Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Q2 2024 Earnings Presentation
29 slides from Wintrust Financial's earnings presentation, Jul 18, 2024
Slide 1: Earnings Release Presentation Q2 2024
Wintrust Financial Corporation Earnings Release Presentation Q2 2024
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: June 2024 Year-to-Date Highlights
June 2024 Year-to-Date Highlights (Comparative to June 2023 Year-to-Date) Net Income Pre-Tax, Pre-Provision1 Diluted EPS $339.7 million $523.0 million $5.21 +$5 million or 1% +$16 million or 3% +$0.03 or 1% Net Interest Income Net Interest Margin BV / TBV (GAAP) (non-GAAP) (GAAP) (non-GAAP) $934.8 m
Slide 5: Q2 2024 Highlights (Comparative to Q1 2024)
Q2 2024 Highlights (Comparative to Q1 2024) Net Income Pre-Tax, Pre-Provision1 Diluted EPS $152.4 million $251.4 million $2.32 -$34.9 million -$20.2 million -$0.57 Return on Assets ROE / ROTCE Efficiency Ratio (GAAP) (non-GAAP) (GAAP) (non-GAAP) 1.07% 11.61% 13.49% 57.10% 56.83% -28 bps -281 bps -32
Slide 6: Earnings Summary
Earnings Summary Differentiated, highly diversified and sustainable business model Record Net Income for the First Six Months of the Year Quarterly Pre-Tax Income, Excluding Provision for Credit Losses ($ in Millions) ($ in Millions) $187.3 $271.6 $164.2 $154.8 $152.4 $251.4 $239.9 $244.8 $123.5 1.3
Slide 7: Loan Portfolio
Loan Portfolio Diversified loan portfolio Robust Loan Growth Coupled with Higher Loan Yield Diversified Loan Mix (as of 6/30/2024) ($ in Billions) Year-over-Year Change 7% $3.7B or 9% in Total Loans 18% 1% $44.7 $43.2 $41.0 16% 6.80% 6.90% 6.23% 31% 27% 6/30/2023 3/31/2024 6/30/2024 Commercial Comme
Slide 8: Deposit Portfolio
Deposit Portfolio Enviable core deposit franchise in Chicago and Milwaukee market areas Deposit Growth Supported by Strong Franchise Highlights ($ in Billions) $48.0 • Robust second quarter deposit growth totaling $1.6 billion $46.5 • Deposit base and liquidity remained strong despite a volatile mar
Slide 9: Deposit Portfolio: Deposit Betas
Deposit Portfolio Deposit beta increase driven by competitive deposit pricing to fund quality loan growth Deposit Beta Stability Continues in Q2 2024 6.0% Deposit Betas Interest-Bearing Deposit Beta: 66% 5.50% 5.0% Total Deposit Beta: 53% 4.0% 3.73% 3.0% 2.93% 2.0% 1.0% 0.0% 12/31/2021 3/31/2022 6/3
Slide 10: Capital/Liquidity
Capital/Liquidity Current capital levels are well in excess of regulatory thresholds Total Capital Ratio Decreased Due to Change in RWA and Subordinated Capital Levels Remained Stable Supporting Strong Growth Debt Partially Offset by Strong Earnings Total Capital Ratio 12.0% 12.2% 12.0% 0.3% 12.2% (
Slide 11: Tangible Book Value Per Share (non-GAAP)
Tangible Book Value Per Share (non-GAAP) Wintrust has grown TBV Per Share every year since going public in 1996, and increased TBV Per Share to $72.01 for the second quarter of 2024, which is the highest in Company history $72.01 $70.33 $61.00 $59.64 $53.23 $49.70 $44.67 $41.68 $37.08 $32.45 $33.17
Slide 12: Net Interest Margin/Income
Net Interest Margin/Income Net interest margin within guidance range; coupled with earning asset growth and strong net interest income Q2 2024 NII Increase Primarily Driven by Higher Average Earning Assets Despite Decrease in NIM Q1 '24 NII Q2 '24 NII $464.2MM $470.6MM 0.12% 0.02% 3.59% (0.21)% 3.52
Slide 13: Non-Interest Income
Non-Interest Income Diversified fee businesses support non-interest income levels despite challenging mortgage environment Non-Interest Income Decrease Impacted by Realized Gain on Sale of the Company's RBA Division in Q1 2024 Consistently Strong Wealth Management Business ($ in Millions) ($ in Mill
Slide 14: Non-Interest Expense
Non-Interest Expense Continue to monitor our expenses and believe they are in line with Company growth Increase Primarily Driven by Commissions from Elevated Mortgage Production and Higher Salaries from a Full Quarter of the Annual Merit Increase Efficiency Ratio Remains Relatively Stable Quarter ov
Slide 15: Credit Quality
Credit Quality Diversified Business Lines and Strong Credit Management Support Stable Credit Quality Special Mention and Substandard Percentages Remained Unchanged Manageable Levels of Non-Performing Loans Quarter over Quarter ($ in Millions) ($ in Millions) $41,949 $43,350 0.39% 0.32% 0.33% 0.34% 0
Slide 16: Non-Performing Assets to Total Assets
Non-Performing Assets to Total Assets NPAs continue to normalize after historic lows during the pandemic 1.74% 1.58% 1.52% 1.30% 1.03% 0.85% 0.81% 0.62% 0.56% 0.51% 0.50% 0.45% 0.46% 0.48% 0.47% 0.44% 0.40% 0.41% 0.39% 0.36% 0.34% 0.34% 0.32% 0.32% 0.29% 0.27% 0.21% 0.16% 99 03 07 11 15 19 23 00 04
Slide 17: Credit Quality - Allowance for Loan Losses
Credit Quality - Allowance for Loan Losses The Company remains well-reserved Sufficient Allowance Coverage of Total Loan Portfolio Well-Reserved Across Our Core Loan Portfolio ($ in Billions) ($ in Billions) $44.7 $43.2 $26.3 $42.1 $25.4 $24.6 1.01% 0.99% 0.98% 1.55% 1.51% 1.52% 12/31/2023 3/31/2024
Slide 18: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans Diversified portfolio with low net charge-offs Strong Portfolio Growth Paired with Moderating Charge-Offs Manageable Levels of Non-Performing Commercial Loans ($ in Millions) ($ in Millions) $14,154 $13,503 $51.4 $41.0 $43.8 $39.0 $12,725 $12,832 $12,600 0.33% $31.8
Slide 19: Credit Quality - Commercial Real Estate Loans
Credit Quality - Commercial Real Estate Loans Well-diversified portfolio with a majority of its exposure in stabilized, income producing properties Continue to be Proactive in Managing Credit NPLs Increased as Credit Quality Normalizes ($ in Millions) ($ in Millions) $48.3 $11,633 $11,947 $10,946 $1
Slide 20: CRE Office Portfolio (as of 6/30/2024)
CRE Office Portfolio (as of 6/30/2024) CRE office represents a minimal percentage of the total loan portfolio As of As of CRE Office Portfolio Geography Portfolio Characteristics 3/31/2024 6/30/2024 ($ in Millions) 2 Chicago CBD, 1 Other CBD, 12% Balance ($ in Millions) $1,567 $1,585 11% CRE office
Slide 21: Credit Quality Premium Finance Receivables - Life Insurance
Credit Quality Premium Finance Receivables - Life Insurance Life Insurance portfolio remains steady and has continued to demonstrate exceptional credit quality Q2 2024 Balances Remained Stable with Strong Credit Quality Strong Portfolio with Persistently Low Levels of Non-Performing Loans ($ in Mill
Slide 22: Premium Finance Receivables - Property and Casualty Insurance
Premium Finance Receivables - Property and Casualty Insurance Growth Continued Despite Loan Sale Impact of Approximately $698MM Moderate Levels of Non-Performing Loans ($ in Millions) ($ in Millions) $58.5 $55.1 $6,904 $6,940 $7,101 $47.7 $6,763 $6,723 $43.0 0.32% 0.33% $32.4 0.29% 0.29% 0.84% 0.78%
Slide 23: Appendix
Appendix WINTRUST 23
Slide 24: Hedging Strategy Update
Hedging Strategy Update Use of Hedges to Mitigate Negative Impacts of Falling Rates Hedging activities had a 18 basis point unfavorable impact to our Q2 2024 NIM as compared to a 19 basis point unfavorable impact to our Q1 2024 NIM. These derivatives are expected to benefit the Company if one-month
Slide 25: Loan Portfolio
Loan Portfolio Highly diversified portfolio across U.S Loan Portfolio - Geographic Diversification1 (as of 6/30/2024) Canada: 2% 4% 5% 2% 2% 3% 2% 2% 35% 2% 8% 2% Primary Geographic Total Loan Portfolio Region Commercial: 2% Commercial, industrial and other Illinois/Wisconsin Leasing Nationwide 6% F
Slide 26: Glossary
Glossary Abbreviation Definition BOLI Bank Owned Life Insurance BP Basis Point BV Book Value per Common Share CBD Central Business District CET1 Ratio Common Equity Tier 1 Capital Ratio CRE Commercial Real Estate Diluted EPS Net Income per Common Share - Diluted FDIC Federal Deposit Insurance Corpor
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Six Months Ended Reconciliation of non-GAAP Net Interest Margin and June 30, March 31, December 31, September 30, June 30, June 30, June 30, Efficiency Ratio ($ in Thousands): 2024 2024 2023 2023 2023 2024 2023 (A) Interest Income (GAAP) $849,979 $805,513 $
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Six Months Ended September June 30, March 31, December 31, 30, June 30, June 30, June 30, Reconciliation of non-GAAP Return on Average Tangible 2024 2024 2023 2023 2023 2024 2023 Common Equity ($ in Thousands): (N) Net income applicable to common shares $14
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended June 30, March 31, December 31, September 30, June 30, Reconciliation of non-GAAP Tangible Common Equity 2024 2024 2023 2023 2023 ($'s and Shares in Thousands): Total shareholders’ equity (GAAP) $5,536,628 $5,436,400 $5,399,526 $5,015,613 $5,041,912 Less: N