Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Sandler O'Neill + Partners, L.P. 2011 East Coast Financial Services Conference
51 slides from Wintrust Financial's conference presentation, Nov 10, 2011
Slide 1: Sandler O'Neill 2011 East Coast Financial Services Conference
Exhibit 99.2 Sandler O’Neill + Partners, L.P. 2011 East Coast Financial Services Conference November 10, 2011
Slide 2: Forward-Looking Information
FORWARD-LOOKING INFORMATION During the course of our remarks today, we will make certain predictive statements regarding our plans and strategies and anticipated financial effects to assist you better in understanding our company. These forward looking statements about future results are subject to
Slide 3: Today's Presentation
Today’s Presentation Who we are Where we have been-how we got here Where we are going Summary financial results Questions
Slide 4: Slide 4
Slide 5: Who We Are
Who We Are Nearly twenty year-old community focused banking organization with approximately $16 billion in assets Fifteen community banks with strong ties to local residents and business leaders in the Chicago and Milwaukee metropolitan markets 9 de novo charters established since 1991 14 bank acqui
Slide 6: Who We Are - Company Overview
Who We Are - Company Overview Community Banking Fifteen community banks Chicago and Milwaukee metropolitan markets locations Full product suite –home equity, home mortgage, consumer, real estate and commercial loans, safe deposit facilities, ATMs, & internet banking Wintrust Mortgage Corporation Nat
Slide 7: Asset Growth – Internal / Acquired
Asset Growth – Internal / Acquired (in millions) $16,000 $12,000 $8,000 $4,000 $0 Acquired Growth Internal Growth 3Q11
Slide 8: Banking Locations
Banking Locations Acquisition Internal Current
Slide 9: Wintrust Banks: Beginning of 2010
Wintrust Banks: Beginning of 2010
Slide 10: Wintrust Banks – Current Footprint
Wintrust Banks – Current Footprint
Slide 11: Who We Are - Core Strategy
Who We Are - Core Strategy Good Markets Community Focused Market Share Growth Chicago and Milwaukee metropolitan markets Initially focused on high net worth areas. Have since moved into broader market Flexibility to continue to profitably penetrate broader market Downtown Chicago focusing on corpora
Slide 12: Who We Are - Operating Strategy
Who We Are - Operating Strategy Assets Loan-to-deposit ratio 85% - 90% Generate ~ two-thirds of loan volume from banks Remaining loan volume from niche businesses First Insurance Funding Tricom Other (including housing associations, franchise lending, mortgage warehouse lending, indirect auto - to n
Slide 13: Deposit Market Share-Chicago MSA
Deposit Market Share-Chicago MSA As of June 30, 2011 and 2010 At June 30, 2011 At June 30, 2010 In-market Deposit In-market Deposit 2011 Deposit Market Deposit Market Rank Bank Holding Company Dollars Share % Dollars Share % 1. JP Morgan Chase & Co. ** $ 57.9 BB 19.8% $49.2 BB 17.2% 2. Bank of Montr
Slide 14: How We Got Here
How We Got Here
Slide 15: Consistent Strategy – Changing Tactics
Consistent Strategy – Changing Tactics CREDIT CYCLE Healthy Storm Clouds The Perfect Restrained Gather Storm Stabilization Recovery (1991-2005) (2006-07) (2008) (2009) (2010-11) WINTRUST TACTICS Organic & Acquisition Growth 7 traditional bank acquisitions since 2003 9 de novo charters since 1991 “Ro
Slide 16: Compound Annual Growth Rates Through 2005
Compound Annual Growth Rates Through 2005 (Years ended December 31, 2005) 1 year 2 year 3 year 4 year 5 year Revenues 27.6% 26.8 25.0% 31.8% 31.4% Net Income 30.5 32.6 34.0 38.1 43.1 EPS (diluted) 17.5 17.9 19.8 21.3 27.1 Assets 27.4 31.2 30.0 31.9 31.2 Loans 19.9 25.7 26.8 26.8 27.5 Deposits 31.8 3
Slide 17: So How Did Wintrust Fare??
So How Did Wintrust Fare?? Remained profitable throughout the cycle. We have taken advantage of the many opportunities which are always present in adverse credit cycles Dislocated people Dislocated assets Dislocated banks Key Financial Goals Increase pre-tax pre-provision adjusted earnings Move bad
Slide 18: Taking Advantage of Dislocations
Taking Advantage of Dislocations Dislocated People Set up downtown Chicago office to capture core commercial and industrial (C&I) business Added 50+ lenders since the beginning of 2009 added throughout the organization Adding talented staff in other areas to support our growth and to stay out in fro
Slide 19: FDIC-Assisted Transactions
FDIC-Assisted Transactions Bank Date of Number Fair Value Fair Value Fair Value of Bargain Acquisition Of of Asset of Loans Liabilities Purchase Branches Acquired Acquired Acquired Gain (in 000s) (in 000s) (in 000s) Lincoln Park 4/23/2010 4 157,078 103,420 192,018 $4.2MM Wheatland 4/23/2010 1 343,87
Slide 20: Consolidated Net Income
Consolidated Net Income (before Preferred Dividends, in 000s) $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $4,846 $6,245 $9,427 $11,155 $18,439 $27,875 $38,118 $51,334 $67,016 $66,493 $55,653 $20,488 $73,069 $63,329 $49,125 $58,354 3Q10 3Q11 YTD
Slide 21: Annual “Pre-tax Adjusted Earnings”
Annual “Pre-tax Adjusted Earnings” (in 000s) $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 3Q08* 4Q08* 1Q09* 2Q09* 3Q09* 4Q09* 1Q10* 2Q10* 3Q10* 4Q10* 1Q11* 2Q11* 3Q11* (* - Annualized) “Pre-tax Adjusted Earnings” are calculated by removing from reported Pre-tax earnings the following cate
Slide 22: Loan Growth
LOAN GROWTH (excluding Loans Held for Sale) (in millions) $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- 5 year CAGR = 13.8% 2009-2010 Loan pipelines remain good 3Q11
Slide 23: Non-Performing Asset Ratio Wintrust vs. Peer Group
Non-Performing Asset Ratio Wintrust vs. Peer Group 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Wintrust Peer Peer Group Data is per the Federal Reserve’s Bank Holding Company Performance Report
Slide 24: Net Charge-offs Ratio Wintrust vs. Peer Group
Net Charge-offs Ratio Wintrust vs. Peer Group 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Wintrust Peer Group Peer Group Data is per the Federal Reserve’s Bank Holding Company Performance Report
Slide 25: Capital Summary
Capital Summary Enhance and maintain strong capital ratios 12/31/09 12/31/10 9/30/11 Tier 1 Risk-based capital 11.0% 12.5% 12.0% Total capital ratio 12.4% 13.8% 13.3% Leverage ratio 9.3% 10.1% 9.6% Tangible common equity ratio 4.7% 8.0% 7.4% Provide flexibility for growth Organic growth & lending op
Slide 26: Financial Overview – Wintrust Has Consistently Grown
Financial Overview – Wintrust Has Consistently Grown Tangible Book Value Per Share Through Cycles Tangible Common Book Value Per Share $30.00 $20.00 $10.00 $0.00 $5.50 $6.03 $6.19 $7.08 $9.03 $11.65 $14.84 $16.07 $17.28 $18.97 $19.02 $20.78 $23.22 $25.80 $26.47 $26.66* $27.43* 3Q11 * Proforma assumi
Slide 27: Financial Overview – Capital Components
Financial Overview – Capital Components (in millions) $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 3Q11 - Common Shareholders Equity - Preferred Securities - Trust Preferred Securities - Subordinated Debt
Slide 28: Wintrust Strategy for 2011 and Beyond
Wintrust Strategy for 2011 and Beyond Back to the Future
Slide 29: Back to the Future Strategy for 2011 and Beyond
Back to the Future Strategy for 2011 and Beyond This cycle isn’t over yet so we need to proceed cautiously in all of our endeavors Continue to increase core earnings Continue to expeditiously remove problem assets from the balance sheet Plan is to return to the growth mode experienced in the first 1
Slide 30: Expected Pre-tax Adjusted Earnings Improvements
Expected Pre-tax Adjusted Earnings Improvements “Pre-tax adjusted earnings” annualized run rate $199 million in the 1st Qtr 2011 $ 217 million in the 2nd Qtr 2011 $242 million in the 3rd Qtr of 2011 Subject to market and other conditions, including interest rate environments, liquidity positions and
Slide 31: Organic Growth and Branding
Organic Growth and Branding Organic Growth-going back to pre Rope-A-Dope model Expect each bank to grow $75 million per year Expect each bank to open a branch every two years The Wintrust Brand By design becoming more prevalent and recognized over the last two years Wintrust Wealth Management, Wintr
Slide 32: Growth Strategy - Expansion
Growth Strategy - Expansion Penetrate new markets with community banking model Within 1 1 / 2 hours of Wintrust headquarters Acquired entities with existing management that wish to continue to grow Acquisitions in specialty finance and wealth management Must complement existing franchise, be a strat
Slide 33: Why Invest in Wintrust?
Why Invest in Wintrust? Managing well through the cycle-consistently profitable with strong core earnings growth Asset quality position is manageable and better than peer group and should allow us to be first out of this cycle Strong capital position-NO TARP overhang Enviable core deposit franchise
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Slide 35: Supplemental Financial Data
Supplemental Financial Data
Slide 36: Total Assets
Total Assets (in millions) $16,000 $12,000 $8,000 $4,000 $0 $1,348 $2,103 $2,705 $3,722 $4,747 $6,419 $8,177 $9,572 $9,369 $10,658 $12,216 $13,980 $15,915 3Q11
Slide 37: Historical Growth
Historical Growth Banking Facilities Operating Subsidiaries Current
Slide 38: Asset Growth of Banks by Year
Asset Growth of Banks by Year (in millions) $3,000 $2,750 $2,500 $2,250 $2,000 $1,750 $1,500 $1,250 $1,000 $750 $500 $250 $0 3Q11 Lake Forest Hinsdale North Shore Libertyville Barrington Crystal Lake Northbrook Schaumburg Village Beverly Wheaton Town SBOTL Old Plank St. Charles
Slide 39: Net Interest Margin
Net Interest Margin (fully taxable equivalent) 4.00% 3.00% 2.00% 1.00% 0.00% 3.41% 3.43% 3.54% 3.66% 3.49% 3.34% 3.20% 3.17% 3.16% 3.10% 3.11% 2.81% 3.01% 3.37% 3.41% 3Q11 YTD
Slide 40: Revenue Growth by Quarter
Revenue Growth by Quarter (excluding Bargain Purchase Gains recorded in 3Q09 through 3Q11) (in 000s) $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 - Net interest income - Non-interest income
Slide 41: EPS Annual Quarterly Growth
EPS Annual Quarterly Growth Annual $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Quarterly $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 $0.20 4th Quarter and full year 2010 amounts exclude $(0.33) and $(0.36) per diluted common share as a result of the deemed preferred stock dividend resulting from the rep
Slide 42: Net Overhead Ratio & Efficiency Ratio
Net Overhead Ratio & Efficiency Ratio 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% YTD 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 3Q11 Net Overhead Ratio Efficiency Ratio
Slide 43: Loan Portfolio Composition
Loan Portfolio Composition As of September 30, 2011 - $11.0 Billion (excludes loans held for sale) Covered Loans Home Equity Res. R/E Other Commercial Real Estate Premium Finance – Life Insurance Premium Finance – Commercial Other Commercial Niches Commercial and Industrial 6% 8% 3% 2% 15% 13% 3% 18
Slide 44: Ending Loan-to-Deposit/Secured Borrowing Ratio
Ending Loan-to-Deposit/Secured Borrowing Ratio* (excludes loans held for sale) 100% 80% 60% 40% 87.2% 82.7% 85.1% 85.2% 77.5% 82.6% 91.0% 91.0% 84.8% 87.1% 84.9% 3Q11 *Includes $600 million of secured borrowing related to the commercial premium finance loan securitization for which the related loans
Slide 45: Non-Performing Assets to Total Assets
Non-Performing Assets to Total Assets (NPAs include NPLs and OREO and exclude covered loans) Assets in millions 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% $16,000 $12,000 $8,000 $4,000 $0 0.40% 0.45% 0.41% 0.46% 0.48% 0.34% 0.51% 0.29% 0.34% 0.39% 0.81% 1.58% 1.74% 1.53% 1.45% 3Q11 Peer Group-2003 =
Slide 46: Net Charge-offs to Total Average Loans
Net Charge-offs to Total Average Loans Loans In millions 1.80% 1.50% 1.20% 0.90% 0.60% 0.30% 0.00% $12,000 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 0.31% 0.28% 0.19% 0.24% 0.18% 0.07% 0.10% 0.09% 0.16% 0.51% 1.65% 1.13% 1.05% 3Q11 Net Charge-offs/Average loan
Slide 47: 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 48: Forward-Looking Statements (cont.)
FORWARD-LOOKING STATEMENTS (cont.) • negative economic conditions that adversely affect the economy, housing prices, the job market and other factors that may affect the Company’s liquidity and the performance of its loan portfolios, particularly in the markets in which it operates; • the extent of
Slide 49: Forward-Looking Statements (cont.)
FORWARD-LOOKING STATEMENTS (cont.) • competitive pressures in the financial services business which may affect the pricing of the Company’s loan and deposit products as well as its services (including wealth management services); • delinquencies or fraud with respect to the Company’s premium finance
Slide 50: Forward-Looking Statements (cont.)
FORWARD-LOOKING STATEMENTS (cont.) Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by or on behalf of Wintrust. Any such statement speaks on
Slide 51: Questions
Questions