Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q4 2020 Earnings Presentation
21 slides from Wintrust Financial's earnings presentation, Jan 21, 2021
Slide 1: Earnings Release Presentation Q4 2020
Earnings Release Presentation Q4 2020 Wintrust Financial Corporation
Slide 2: Q4 2020 Highlights
2 ROA3 • Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $607 million primarily due to growth in commercial loans and life insurance premium finance receivables. • Total deposits increased by $1.2 billion, not withstanding the return of approximately $666 million in wh
Slide 3: Earnings Summary
3 Earnings Summary Net Income & ROA ($ in Millions) Diluted EPS Key Observations Condensed Income Statement Difference vs. Current QCurrent Q • Pre-Provision Net Revenue increased by $15.5 million compared to the prior quarter and $10.8 million as compared to Q4 2019 • $86.0 $62.8 $21.7 $107.3 $101.
Slide 4: Loan Portfolio
4 $32,136 $342 $(663) $71 $(21) $71 $(196) $(6) $369 $(24) $32,079 9/30/2020 Commercial excl. PPP Commercial PPP Commercial Real Estate Home Equity Residential Real Estate loans for investment Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. Government Agencies Premium Fin
Slide 5: Deposit Portfolio
5 • Total deposits increased by $1.2 billion from the prior quarter end, which included the return of approximately $666 million in wholesale deposits. • Rate paid on average interest-bearing deposits decreased 10 basis points from the prior quarter. • Non-interest bearing deposits increased $1.3 bi
Slide 6: Net Interest Margin
6 3.17% 3.12% 2.73% 2.56% 2.53% 3.19% 3.14% 2.74% 2.57% 2.54% 4.25% 4.13% 3.44% 3.12% 3.02% 0.39% 0.35% 0.28% 0.24% 0.22% 1.45% 1.34% 0.98% 0.79% 0.70% Net Interest Margin (GAAP) Net Interest Margin, Fully Taxable-Equivalent (Non-GAAP ) Earning Assets Yield Net Free Funds Contribution Rate on Intere
Slide 7: Liquidity
7 Liquidity • We have accumulated excess liquidity in recent quarters and believe that, if conditions allow for suitable deployment of such excess liquidity, we could potentially increase our net interest margin by 15 to 30 basis points, depending on the mix of earning assets of such reinvestment. K
Slide 8: Credit Quality
8 $158.5 $253.5 $373.2 $389.0 $380.0 0.59% 0.91% 1.19% 1.21% 1.18% Total Allowance for Credit Losses Total Allowance for Credit Losses as a % of Total Loans 12/31/2019 3/31/2020 6/30/2020 9/30/2020 12/31/2020 Credit Quality • The Company estimates an increase to the allowance for credit losses of ap
Slide 9: Non-Performing Loan Roll-Forward
9 Non-Performing Loan Roll-Forward $173.1 $13.2 $(30.1) $(12.7) $(7.8) $(7.2) $(1.0) $127.5 9/30/2020 New NPLs Pay-offs and Payments Received Transfer to OREO Charge-Offs Net Change in Niche Loans Return to Performing Status 12/31/2020 Non-Performing Loan Balances ($ in Millions) - 12/31/2020 vs. 9/
Slide 10: Credit Quality - CECL Allowance for Credit Losses
10 $388,971 $(21,448) $12,446 $379,969 9/30/2020 12/31/2020 • Stabilizing macroeconomic indicators and market conditions • Continuing governmental monetary and fiscal support • Substantial liquidity in the market • Future expectations regarding current and former COVID-19 loan modifications • Low ex
Slide 11: Credit Quality - COVID-19 Related Modified Loans
11 Retail: 40.2% Franchise: 59.8% Credit Quality - COVID-19 Related Modified Loans Interest Only: 56.8% Full Payment Deferral: 22.9% Line Increases: 13.3% All Other: 7.0% COVID-19 Related Modified Loans as of 12/31/2020 COVID-19 Related Modified Loan Types ($ shown in Millions) Loan Balance as of 9/
Slide 12: Commercial and Commercial Real Estate Portfolio
12 1 PCD: Purchased Credit Deteriorated loans Commercial and Commercial Real Estate Portfolio Loan Portfolio Mix, Growth, and COVID-19 Related Modified Loans as of 12/31/2020 and 9/30/2020 (Commercial and Commercial Real Estate Portfolio) As of As of Increase/ COVID-19 Related Modified Loans as of 1
Slide 13: Credit Quality - COVID-19 - Select High Impact Industries
13 • Restaurants & Food Services make up 4.1% 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 increased to 8.1% as of December 31, 2020 from 6.7% as of Sept
Slide 14: Non-Interest Income
14 Non-Interest Income ($ in Millions) $112.2 $113.2 $162.0 $170.6 $158.4 $25.0 $25.9 $22.6 $25.0 $26.8 $47.9 $48.3 $102.3 $108.5 $86.8$12.5 $12.0 $11.8 $11.7 $12.1 $11.0 $11.3 $10.4 $11.5 $11.8 $15.8 $15.7 $14.9 $13.9 $20.9 Wealth Management Mortgage Banking Operating Lease Income, net Service Char
Slide 15: Mortgage Banking
15 $47.938 $(8.7)$(7.9)$(9.0) $2.3 $(14.6)$(8.0)$(3.0)$(5.2) $34.7 $49.3 $93.4$94.1$70.9 $3.7 $7.0 $(104.1)$(77.0) $14.5 $9.4 $(0.5) MSR - Payoffs/Paydowns MSR - Change in Fair Value Model Assumptions Production Revenue Servicing Income & Other MSR Capitalization MSR Hedging Gains (Losses) Q4 2019 Q
Slide 16: Non-Interest Expense
16 $249.6 $234.6 $259.4 $264.2 $281.9 $145.9 $136.8 $154.2 $164.0 $171.1 $14.5 $14.8 $15.8 $17.3 $20.6$17.1 $17.5 $16.9 $15.8 $19.7 $12.5 $10.9 $7.7 $7.9 $9.9 $9.8 $9.3 $9.3 $9.4 $9.9 $7.7 $6.7 $7.7 $6.5 $6.5 $7.6 $8.4 $10.4 $5.7 $5.7$34.5 $30.2 $37.4 $37.6 $38.5 Salaries and Employee Benefits Equip
Slide 17: Capital
17 7.0% 8.5% 10.5% 4.50% 6.00% 8.00% 2.50% 2.50% 2.50% 8.8% 10.0% 12.6% Minimum Requirement Product Conservation Buffer WTFC Capital Q4 2020 Key Observations Strong Capital Levels • Tangible book value per common share increased $1.53 from the prior quarter-end and increased $3.53 or 7.1% from Q4 20
Slide 18: Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio
18 Three Months Ended Years Ended Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio ($ in Thousands): December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2020 2020 2020 2020 2019 2020 2019 (A) Interest Income (GAAP) $ 307,981 $ 311,156 $ 329,816 $ 3
Slide 19: Reconciliation of Non-GAAP Tangible Common Equity
19 Three Months Ended Reconciliation of Non-GAAP Tangible Common Equity ($'s and Shares in Thousands): December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 Total shareholders’ equity (GAAP) $ 4,115,995 $ 4,074,089 $ 3,990,218 $ 3,700,393 $ 3,691,250 Less: Non-convertib
Slide 20: Forward-Looking Statements
20 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 21: Forward-Looking Statements (continued)
21 • 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