Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q3 2023 Earnings Presentation
25 slides from Wintrust Financial's earnings presentation, Oct 18, 2023
Slide 1: Earnings Release Presentation Q3 2023
Wintrust Financial Corporation Earnings Release Presentation Q3 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: Q3 2023 Highlights (comparative to Q2 2023)
Q3 2023 Highlights (comparative to Q2 2023) Net Income Pre-Tax, Pre-Provision1 Diluted EPS $164.2 million $244.8 million $2.53 +$9.4 million +$4.8 million +$0.15 Return on Assets ROE / ROTCE Efficiency Ratio (GAAP) (non-GAAP) (GAAP) (non-GAAP) 1.20% 13.35% 15.73% 57.18% 56.94% +2 bps +56 bps +61 bps
Slide 5: Earnings Summary
Earnings Summary Differentiated, highly diversified and sustainable business model Strong Quarterly Net Income Higher Quarterly PTPP driven by Net Interest Income ($ in Millions) ($ in Millions) $180.2 $266.6 $164.2 $242.8 $239.9 $244.8 $154.8 $143.0 $144.8 $206.5 1.40% 1.18% 1.20% 1.12% 1.10% Q3 20
Slide 6: Loan Portfolio
Loan Portfolio Diversified loan portfolio Sustained Loan Growth Coupled with Higher Loan Yield Diversified Loan Mix (as of 9/30/2023) ($ in Billions) Year-over-Year Change 7% $3.2B or 9% in Total Loans 1% 19% $41.0 $41.4 $38.2 16% 6.51% 6.23% 31% 4.28% 26% 9/30/2022 6/30/2023 9/30/2023 Commercial Co
Slide 7: Deposit Portfolio
Deposit Portfolio Enviable core deposit franchise in Chicago and Milwaukee market areas Continued Deposit Growth Supported by Strong Franchise Highlights ($ in Billions) $45.0 • Deposit base and liquidity remain strong despite a volatile market $44.0 • Deposit mix shift continued in Q3 2023 primaril
Slide 8: Deposit Portfolio
Deposit Portfolio Reversion of deposit mix to pre-pandemic levels while deposit beta increases with market pressures Deposit Beta was in Line with Q3 2023 Guidance Range Fed Funds Upper Target up 525 bps Total Interest-Bearing Deposit Beta 55% Total Deposit Beta 42% 5.50% 3.12% 2.37% 0.25% 0.24% 0.1
Slide 9: Capital/Liquidity
Capital/Liquidity Current capital levels are well in excess of regulatory thresholds with the Company recording strong earnings Capital Levels Remained Stable Supporting Strong Growth CET1 Flat Quarter over Quarter CET1 Ratio 11.8% 12.0% 12.0% 0.2% 10.1% 10.2% 9.3% (0.2)% 9.3% 9.9% 9.3% 9.3% 9.0% 9.
Slide 10: Net Interest Margin/Income
Net Interest Margin/Income Net interest margin stabilizing within guidance range coupled with higher Net Interest Income due to strong earning asset growth Q3 2023 NIM Remained Relatively Stable Throughout the Quarter but Decreased due to Higher Deposit Costs and Hedging Impact Q2 '23 NII Q3 '23 NII
Slide 11: Non-Interest Income
Non-Interest Income Diversified fee businesses support non-interest income levels despite challenging mortgage environment Fee Businesses Stable Amidst Rising Rate Environment Strong Wealth Management Business ($ in Millions) ($ in Millions) $113.0 $112.5 $33.1 $33.9 $33.5 $107.8 $30.7 $101.5 $29.9
Slide 12: Non-Interest Expense
Non-Interest Expense Continue to monitor our expenses and believe they are in line with current Company growth Higher Total Salaries Related to Acquisition-Related Severance Charges and Other Contractually due Compensation Cost Efficiency Ratio Remains Relatively Flat ($ in Millions) $184.9 $192.3 $
Slide 13: Credit Quality
Credit Quality Exceptional credit quality supported by a diversified loan portfolio Manageable Levels of Non-Performing Loans Low Levels of Net Charge-Offs ($ in Millions) ($ in Millions) 0.32% 0.17% $47.6 0.26% 0.26% 0.25% 0.26% $133.1 0.08% 0.05% 0.06% $28.5 0.03% $23.0 $19.9 $17.0 $108.7 $8.1 $43
Slide 14: Credit Quality - Allowance for Loan Losses
Credit Quality - Allowance for Loan Losses The Company remains well-reserved Sufficient Allowance Coverage of Total Loan Portfolio Well-Reserved Across Our Core Loan Portfolio ($ in Billions) ($ in Billions) $41.0 $41.4 $24.1 $39.6 $23.4 0.96% $23.0 0.95% 0.94% 1.50% 1.51% 1.46% 3/31/2023 6/30/2023
Slide 15: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans Diversified portfolio with low net charge-offs Consistent Portfolio Growth Paired with a Low Net Charge-Off Ratio Continuously Low Levels of Non-Performing Commercial Loans ($ in Millions) ($ in Millions) $12,259 $12,549 $12,577 $12,600 $12,725 $48.0 $44.5 $43.8 $41
Slide 16: Credit Quality - Commercial Real Estate Loans
Credit Quality - Commercial Real Estate Loans Well-diversified portfolio with a majority of its exposure in stabilized, income producing properties Low Levels of Net Charge-offs Stable Levels of Non-Performing Commercial Real Estate Loans ($ in Millions) ($ in Millions) $10,609 $10,946 $9,951 $10,23
Slide 17: CRE Office Portfolio (as of 09/30/2023)
CRE Office Portfolio (as of 09/30/2023) CRE office represents a minimal percentage of the total loan portfolio As of As of CRE Office Portfolio Geography Portfolio Characteristics 6/30/2023 9/30/2023 ($ in Millions) 1 2 Chicago CBD, Other CBD, 13% Balance ($ in Millions) $1,404 $1,423 13% CRE office
Slide 18: Credit Quality Premium Finance Receivables Life
Credit Quality Premium Finance Receivables Life Life Insurance portfolio remains steady and has continued to demonstrate exceptional credit quality Q3 Balances Remained Stable with Strong Credit Quality Healthy Portfolio with Manageable Levels of Non-Performing Loans ($ in Millions) ($ in Millions)
Slide 19: Premium Finance Receivables Commercial
Premium Finance Receivables Commercial Stable in Q3 Despite Impact of $344 Million Related to Loan Sale Moderate Levels of Non-Performing Loans ($ in Millions) ($ in Millions) $6,763 $6,723 $43.0 $5,714 $5,850 $5,739 $32.4 $29.7 $29.3 $27.8 0.30% 0.29% 0.23% 0.24% 0.64% 0.16% 0.52% 0.50% 0.48% 0.48%
Slide 20: Appendix
Appendix WINTRUST 2
Slide 21: Hedging Strategy Update
Hedging Strategy Update Use of Hedges to Mitigate Negative Impacts of Falling Rates Hedging activities had a 18 basis point detriment to our Q3 2023 NIM as compared to 15 basis points in Q2 2023. However, these derivatives are expected to benefit the Company if interest rates fall materially. Below
Slide 22: Loan Portfolio
Loan Portfolio Highly diversified portfolio across U.S Loan Portfolio - Geographic Diversification1 (as of 9/30/2023) Canada: 2% 5% 5% 2% 2% 2% 2% 36% 2% 9% 2% Total Loan Portfolio Primary Geographic Region Commercial: Commercial, industrial and other Illinois/Wisconsin 6% Leasing Nationwide Franchi
Slide 23: Glossary
Glossary Abbreviation Definition AFS Available For Sale BOLI Bank Owned Life Insurance BP Basis Point CBD Central Business District CET1 Ratio Common Equity Tier 1 Capital Ratio CRE Commercial Real Estate Diluted EPS Net Income per Common Share - Diluted FDIC Federal Deposit Insurance Corporation FH
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Reconciliation of non-GAAP Net Interest Margin and Efficiency Ratio ($ September 30, June 30, March 31, December 31, September 30, in Thousands): 2023 2023 2023 2022 2022 (A) Interest Income (GAAP) $ 762,400 $ 697,176 $ 639,690 $ 580,745 $ 466,478 Taxable-e
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended September 30, June 30, March 31, December 31, September 30, Reconciliation of non-GAAP Return on Average Tangible Common Equity ($ in Thousands): 2023 2023 2023 2022 2022 (N) Net income applicable to common shares $ 157,207 $ 147,759 $ 173,207 $ 137,826 $ 1