Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q1 2021 Earnings Presentation
22 slides from Wintrust Financial's earnings presentation, Apr 20, 2021
Slide 1: Earnings Release Presentation Q1 2021
Earnings Release Presentation Q1 2021 Wintrust Financial Corporation
Slide 2: Q1 2021 Highlights
2 ROA3 • Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $515 million. • Total investment securities increased by $1.0 billion as the Company deployed a portion of its excess liquidity. • Total deposits increased by $780 million. • Net interest income increased by $2.5
Slide 3: Earnings Summary
3 Earnings Summary Net Income & ROA ($ in Millions) Diluted EPS Key Observations Condensed Income Statement Current Q Difference vs.Current Q • Pre-Provision Net Revenue increased by $15.5 million compared to the prior quarter and $10.8 million as compared to Q1 2020 • $62.8 $21.7 $107.3 $101.2 $153
Slide 4: Net Interest Margin
4 3.12% 2.73% 2.56% 2.53% 2.53% 3.14% 2.74% 2.57% 2.54% 2.54% 4.13% 3.44% 3.12% 3.02% 2.96% 0.35% 0.28% 0.24% 0.22% 0.21% 1.34% 0.98% 0.79% 0.70% 0.63% Net Interest Margin (GAAP) Net Interest Margin, Fully Taxable-Equivalent (Non-GAAP ) Earning Assets Yield Net Free Funds Contribution Rate on Intere
Slide 5: Non-Interest Income
5 Non-Interest Income ($ in Millions) $113.2 $162.0 $170.6 $158.4 $186.5 $25.9 $22.6 $25.0 $26.8 $29.3 $48.3 $102.3 $108.5 $86.8 $113.5$12.0 $11.8 $11.7 $12.1 $14.4 $11.3 $10.4 $11.5 $11.8 $12.0 $15.7 $14.9 $13.9 $20.9 $17.3 Wealth Management Mortgage Banking Operating Lease Income, net Service Char
Slide 6: Mortgage Banking
6 $(7.9)$(9.0)$(10.2) $(14.6)$(8.0)$(3.0)$(5.2) $18.0 $48.9 $93.4$94.1$70.9 $71.3 $7.0 $(49.4)$(1.8)$(77.0) $(103.7) $9.4 MSR - Payoffs/Paydowns MSR - Change in Fair Value Model Assumptions Production Revenue Servicing Income & Other MSR Capitalization MSR Hedging Gains (Losses) Q1 2020 Q2 2020 Q3 2
Slide 7: Non-Interest Expense
7 $234.6 $259.4 $264.2 $281.9 $286.9 $136.8 $154.2 $164.0 $171.1 $180.8 $14.8 $15.8 $17.3 $20.6 $20.9 $17.5 $16.9 $15.8 $19.7 $20.0 $10.9 $7.7 $7.9 $9.9 $8.5 $9.3 $9.3 $9.4 $9.9 $10.8 $6.7 $7.7 $6.5 $6.5 $7.6 $8.4 $10.4 $5.7 $5.7 $6.0 $30.2 $37.4 $37.6 $38.5 $32.3 Salaries and Employee Benefits Equi
Slide 8: Total Loans
8 • Total loans increased $1.1 billion from the prior quarter-end and $5.4 billion as compared to the end of Q1 2020. • Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $515 million primarily due to a $254 million increase in life insurance premium finance receivables,
Slide 9: Deposit Portfolio
9 • Total deposits increased by $780 million from the prior quarter end. The increase in deposits includes a $549 million increase in non- interest-bearing deposits and a $213 million increase in NOW and interest-bearing DDA deposits. • Rate paid on average interest-bearing deposits decreased 6 basi
Slide 10: Liquidity
10 Liquidity • We continue to maintain excess liquidity and believe that deploying such liquidity could potentially increase our net interest margin. • Period end investment securities were $743 million higher than average investment securities in the first quarter of 2021. Key Observations Total Av
Slide 11: Capital Adequacy
11 7.0% 8.5% 10.5% 4.50% 6.00% 8.00% 2.50% 2.50% 2.50% 9.0% 10.1% 12.6% Minimum Requirement Product Conservation Buffer WTFC Capital Q1 2021 Key Observations Strong Capital Levels • Tangible book value per common share increased $2.19 from the prior quarter-end and increased $5.24 or 10.4% from Q1 2
Slide 12: Paycheck Protection Program Customer Impact
12 PPP Loans Originated in 2020 and 2021 Paycheck Protection Program Customer Impact Key Observations • CECL Day 1 transition adjustment • Includes ACL for loans and leases, off- balance sheet credit exposures and debt securities Day 1 Adjustment Our bankers didn't wait to hear from nonprofit partne
Slide 13: Credit Quality
13 $253.5 $373.2 $389.0 $380.0 $321.3 0.91% 1.19% 1.21% 1.18% 0.97% 0.91% 1.33% 1.35% 1.29% 1.08% Total Allowance for Credit Losses Total Allowance for Credit Losses as a % of Total Loans Total Allowance for Credit Losses as a % of Total Loans (excl. PPP loans) 3/31/2020 6/30/2020 9/30/2020 12/31/20
Slide 14: Non-Performing Loan Roll-Forward
14 Non-Performing Loan Roll-Forward $127.5 $9.9 $(22.7) $(1.4) $(2.9) $(10.6) $(0.7) $99.1 12/31/2020 New NPLs Pay-offs and Payments Received Transfer to OREO Charge-Offs Net Change in Niche Loans Return to Performing Status 3/31/2021 Non-Performing Loan Balances ($ in Millions) - 3/31/2021 vs. 12/3
Slide 15: Loan Portfolio - Geographic Diversification
15 Loan Portfolio - Geographic Diversification Canada Market: Loan Portfolio1 - Geographic Diversification2 as of 3/31/2021 Total Loan Portfolio1 Primary Geographic Region Commercial: Commercial, industrial and other Illinois/Wisconsin Leasing Nationwide Franchise Lending Multi-State Commercial real
Slide 16: Credit Quality - COVID-19 Related Modified Loans
16 Retail: 29.1% Franchise: 70.9% Credit Quality - COVID-19 Related Modified Loans Interest Only: 49.61% Full Payment Deferral: 20.87% Line Increases: 14.17% All Other: 15.35% COVID-19 Related Modified Loans as of 3/31/2021 and 12/31/2020 COVID-19 Related Modified Loan Types ($ shown in Millions) Lo
Slide 17: Credit Quality - COVID-19 Select High Impact Industries
17 • Restaurants & Food Services make up 4.3% of Total Loans excluding PPP loans and is primarily made up of Quick Service Restaurants ("QSRs"). Outstanding COVID-19 related loan modifications in Restaurants & Food Services modifications decreased to 6.4% as of March 31, 2021 from 8.1% as of Decembe
Slide 18: Credit Quality - CECL Allowance for Credit Losses
18 $379,969 $(7,391) $(51,270) $321,308 12/31/2020 3/31/2021 • Improving macroeconomic indicators and market conditions. • Additional and ongoing governmental monetary and fiscal support. • Substantial liquidity in the market. • Future expectations regarding current COVID-19 loan modifications. • Lo
Slide 19: Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio
19 Three Months Ended Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio ($ in Thousands): March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020 (A) Interest Income (GAAP) $ 305,469 $ 307,981 $ 311,156 $ 329,816 $ 344,067 Taxable-equivalent adjustment: - L
Slide 20: Reconciliation of Non-GAAP Tangible Common Equity
20 Three Months Ended Reconciliation of Non-GAAP Tangible Common Equity ($'s and Shares in Thousands): March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020 Total shareholders’ equity (GAAP) $ 4,252,511 $ 4,115,995 $ 4,074,089 $ 3,990,218 $ 3,700,393 Less: Non-convertible
Slide 21: Forward-Looking Statements
21 This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “will,” “may,” “sh
Slide 22: Forward-Looking Statements (continued)
22 • ability of the Company to use technology to provide products and services that will satisfy customer demands and create efficiencies in operations and to manage risks associated therewith; • failure or breaches of our security systems or infrastructure, or those of third parties; • security bre