Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q2 2023 Earnings Presentation
27 slides from Wintrust Financial's earnings presentation, Jul 20, 2023
Slide 1: Earnings Release Presentation Q2 2023
Wintrust Financial Corporation Earnings Release Presentation Q2 2023
Slide 2: Forward Looking Statements
Forward Looking Statements 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,” “possi
Slide 3: Forward Looking Statements
Forward Looking Statements • adverse effects of failures by our vendors to provide agreed upon services in the manner and at the cost agreed, particularly our information technology vendors; • increased costs as a result of protecting our customers from the impact of stolen debit card information; •
Slide 4: Q2 2023 Highlights (comparative to Q1 2023)
Q2 2023 Highlights (comparative to Q1 2023) Net Income Pre-Tax, Pre-Provision1 Diluted EPS $154.8 million $239.9 million $2.38 -$25.4 million -$26.7 million -$0.42 Return on Assets ROE / ROTCE Efficiency Ratio (GAAP) (non-GAAP) (GAAP) (non-GAAP) 1.18% 12.79% 15.12% 57.20% 56.95% -22 bps -288 bps -34
Slide 5: Earnings Summary
Earnings Summary Differentiated, highly diversified and sustainable business model Strong Quarterly Net Income Lower Quarterly PTPP due to Net Interest Margin Compression ($ in Millions) ($ in Millions) $180.2 $266.6 $242.8 $239.9 $154.8 $143.0 $144.8 $206.5 1.40% $94.5 1.18% 1.12% 1.10% $152.1 0.77
Slide 6: Loan Portfolio
Loan Portfolio Diversified loan portfolio Strong Loan Growth Coupled with Expanded Loan Yield Diversified Loan Mix (as of 6/30/2023) ($ in Billions) Year-over-Year Change 6% $3.9B or 11% in Total Loans 1% $41.0 20% $39.6 6.23% $37.1 5.82% 16% 31% 3.59% 26% 6/30/2022 3/31/2023 6/30/2023 Commercial Co
Slide 7: Deposit Portfolio
Deposit Portfolio Enviable core deposit franchise in Chicago and Milwaukee market areas Deposit Growth Supported by Strong Franchise Outlook Commentary ($ in Billions) • Deposit base and liquidity remains strong despite a volatile market. $44.0 We remain highly competitive in the Chicagoland and Mil
Slide 8: Deposit Portfolio
Deposit Portfolio Reversion of deposit mix to pre-pandemic levels while deposit beta increases with market pressures Deposit Beta Approaching Our Guidance Range Fed Funds Upper Target up 500 bps Total Interest-Bearing Deposit Beta 49% Total Deposit Beta 38% 5.25% 2.71% 2.04% 0.25% 0.24% 0.16% 12/31/
Slide 9: Liquidity
Liquidity Prudently managing investment portfolio, while maintaining adequate liquidity Investment Portfolio Snapshot (as of 6/30/2023) Strategically Balanced Investment Portfolio (as of 6/30/2023) ($ in Millions) ($ in Billions) Total Investment Held-to-Maturity Available for Sale Portfolio Yield (
Slide 10: Capital
Capital Current capital levels are well in excess of regulatory thresholds with the Company recording strong earnings Capital Levels Remained Stable Supporting Strong Growth CET1 Flat Quarter over Quarter CET1 Ratio 11.9% 12.1% 11.9% 0.3% 10.1% 10.1% 9.2% (0.3)% 9.2% 9.9% 9.0% 9.2% 9.2% 9.1% 9.3% 8.
Slide 11: Net Interest Margin/Income
Net Interest Margin/Income Net interest margin negatively impacted by hedging activity which is expected to benefit the Company if interest rates fall materially Q2 2023 NIM Down But Remained Relatively Stable Throughout the Quarter Q1 '23 NII Q2 '23 NII $458.0MM 0.42% $447.5MM (0.08)% 3.83% 0.15% 3
Slide 12: Non-Interest Income
Non-Interest Income Diversified fee businesses support non-interest income levels despite challenging mortgage environment Fee Businesses Stable Amidst Rising Rate Environment Wealth Management Acquisition Drove Increased Revenue ($ in Millions) ($ in Millions) $33.1 $33.9 $107.8 $113.0 $31.4 $30.7
Slide 13: Non-Interest Expense
Non-Interest Expense Continue to monitor our expenses and believe they are in line with current Company growth Efficiency Ratio Impacted by Competitive Deposit Pricing and Higher Incentive Expense Driven By Loan Growth and Mortgage Business Seasonal Advertising Expenses ($ in Millions) $176.1 $180.3
Slide 14: Credit Quality
Credit Quality Exceptional credit quality supported by a diversified loan portfolio Levels of Non-Performing Loans Remained Stable Low Levels of Net Charge-Offs ($ in Millions) ($ in Millions) 0.17% $108.7 0.11% $47.6 $97.6 $100.7 $100.7 0.05% 0.06% $28.5 $72.4 0.03% $23.0 $20.4 $17.0 0.26% 0.26% 0.
Slide 15: Credit Quality - Allowance for Loan Losses
Credit Quality - Allowance for Loan Losses The Company remains well reserved Sufficient Allowance Coverage of Total Loan Portfolio Well Reserved Across Our Core Loan Portfolio ($ in Billions) ($ in Billions) $41.0 $39.2 $39.6 $23.4 $23.0 $22.5 1.50% 0.91% 0.95% 0.94% 1.46% 1.42% 12/31/2022 3/31/2023
Slide 16: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans Diversified portfolio with low net charge-offs Sustained Portfolio Growth Paired with a Low Net Charge-Off Ratio Low Levels of Non-Performing Commercial Loans ($ in Millions) ($ in Millions) $12,047 $12,259 $12,549 $12,577 $12,600 $48.0 $44.5 0.27% $41.0 $36.0 $32.4
Slide 17: Credit Quality - Commercial Real Estate Loans
Credit Quality - Commercial Real Estate Loans Well-diversified portfolio with a majority of its exposure in stabilized, income producing properties Increase in Net Charge-offs Driven by Proactive Sale of CRE Credits Identified as Particularly Vulnerable Low Levels of Non-Performing Commercial Real E
Slide 18: CRE Office Portfolio (as of 06/30/2023)
CRE Office Portfolio (as of 06/30/2023) CRE office represents a minimal percentage of the total loan portfolio As of As of CRE Office Portfolio Geography Portfolio Characteristics 6/30/2023 3/31/2023 ($ in Millions) 1 2 Chicago CBD, Other CBD, 12% Balance ($ in Millions) $1,404 $1,392 13% $178.8 $17
Slide 19: Credit Quality Premium Finance Receivables Life
Credit Quality Premium Finance Receivables Life Life Insurance portfolio remains steady and has continued to demonstrate exceptional credit quality Q2 Balances Remained Stable with Exceptional Credit Quality Healthy Portfolio with Low Levels of Non-Performing Loans ($ in Millions) ($ in Millions) $8
Slide 20: Premium Finance Receivables Commercial
Premium Finance Receivables Commercial Exceptional Portfolio Growth in the Second Quarter Low Levels of Non-Performing Loans ($ in Millions) ($ in Millions) $6,763 $5,714 $5,850 $5,739 $5,541 $32.4 $29.7 $29.3 $27.8 0.30% 0.23% 0.24% $19.8 0.16% 0.52% 0.50% 0.48% 0.48% 0.14% 0.36% 6/30/2022 9/30/202
Slide 21: Appendix
Appendix WINTRUST 21
Slide 22: Hedging Strategy Update
Hedging Strategy Update Use of Hedges to Mitigate Negative Impacts of Falling Rates Hedging activities had a 15 bp detriment to our Q2 2023 NIM as compared to 7 bps in Q1 2023. However, these derivatives are expected to benefit the Company if interest rates fall materially. Below are the details of
Slide 23: Loan Portfolio
Loan Portfolio Highly diversified portfolio across U.S Loan Portfolio - Geographic Diversification1 (as of 6/30/2023) Canada Market: 2% 5% 5% 2% 2% 2% 2% 36% 2% 9% 2% Total Loan Portfolio Primary Geographic Region Commercial: Commercial, industrial and other Illinois/Wisconsin 6% Leasing Nationwide
Slide 24: Glossary
Glossary Abbreviation Definition AFS Available For Sale BOLI Bank Owned Life Insurance BP Basis Point BV Book Value per Common Share CBD Central Business District CDEC Chicago Deferred Exchange Company CECL Current Expected Credit Losses CET1 Ratio Common Equity Tier 1 Capital Ratio CRE Commercial R
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Reconciliation of non-GAAP Net Interest Margin and Efficiency Ratio ($ June 30, March 31, December 31, September 30, June 30, in Thousands): 2023 2023 2022 2022 2022 (A) Interest Income (GAAP) $ 697,176 $ 639,690 $ 580,745 $ 466,478 $ 371,968 Taxable-equiva
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended June 30, March 31, December 31, September 30, June 30, Reconciliation of non-GAAP Tangible Common Equity ($'s and Shares in Thousands): 2023 2023 2022 2022 2022 Total shareholders’ equity (GAAP) $ 5,041,912 $ 5,015,506 $ 4,796,838 $ 4,637,980 $ 4,727,623 Le
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended June 30, March 31, December 31, September 30, June 30, Reconciliation of non-GAAP Return on Average Tangible Common Equity ($ in Thousands): 2023 2023 2022 2022 2022 (N) Net income applicable to common shares $ 147,759 $ 173,207 $ 137,826 $ 135,970 $ 87,522