Wintrust Financial Corporation · NASDAQ:WTFC
Wintrust Financial — Raymond James & Associates Bank Conference 2011
53 slides from Wintrust Financial's conference presentation, Aug 10, 2011
Slide 1: Raymond James & Associates Bank Conference
1 Raymond James & Associates Bank Conference Chicago, Illinois August 10, 2011 August 10, 2011 August 10, 2011 August 10, 2011 August 10, 2011
Slide 2: Forward-Looking Information
2 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 t
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 3
Slide 4: Who We Are
4 Who We Are Nearly twenty year-old community focused banking organization with approximately $15 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 13 bank acq
Slide 5: Who We Are - Company Overview
5 Who We Are - Company Overview Community Banking Specialty Finance Wealth Management Fifteen community banks Chicago and Milwaukee metropolitan markets 95 locations Full product suite - home equity, home mortgage, consumer, real estate and commercial loans, safe deposit facilities, ATMs, & internet
Slide 6: Asset Growth - Internal / Acquired
6 Asset Growth - Internal / Acquired (in millions)
Slide 7: Banking Locations
Banking Locations @ Acquisition m= Internal a PILI ELI ELSE SSS SEES
Slide 8: Wintrust Banks: Beginning of 2010
Wintrust Banks: Beginning of 2010
Slide 9: Wintrust Banks - Current Footprint
Wintrust Banks - Current Footprint
Slide 10: Wintrust Banks - Planned Expansion
Wintrust Banks - Planned Expansion Wintrust Banks - Planned Expansion
Slide 11: Who We Are - Core Strategy
11 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 corporate and commercial customers Positioned as local alternatives to the "Big Ba
Slide 12: Who We Are - Operating Strategy
12 Funding Assets Who We Are - Operating Strategy 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
Slide 13: Deposit Market Share-Chicago MSA
13 Deposit Market Share-Chicago MSA As of June 30, 2010 and 2009 At June 30, 2009 At June 30, 2010 In-market Deposit In-market Deposit 2010 Deposit Market Deposit Market Rank Bank Holding Company Dollars Share % Dollars Share % JP Morgan Chase & Co. ** $ 45.0 BB 15.8% $49.2 BB 17.4% Bank of America
Slide 14: How We Got Here
How We Got Here 14
Slide 15: Consistent Strategy - Changing Tactics
15 Consistent Strategy - Changing Tactics (1991-2005) (2010-11) (2008) (2009) (2006-07) Organic & Acquisition Growth 7 traditional bank acquisitions since 2003 9 de novo charters since 1991 "Rope - A - Dope" Slowed growth Maintained extremely conservative underwriting Reduced relative cost of funds
Slide 16: Compound Annual Growth Rates Through 2005
16 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.
Slide 17: Storm Clouds and What We Expected
17 Storm Clouds and What We Expected Storm Clouds Gather in 2006 Disadvantageous yield curve Loosened credit standards Credit spreads moved to unacceptable levels Opportunities for those with dry powder Lending opportunities Acquisition opportunities for bruised banks and asset generators Need to be
Slide 18: The "Rope-a-Dope" Strategy
18 The "Rope-a-Dope" Strategy 2006 Through 3rd Quarter 2008 No change in loan underwriting - do not chase the herd!! Slow growth Shrink larger banks (run-off of CD-only customers) Grow newer banks Reduce relative cost of funds Discipline Mix Get paid for making loans - hand out credit with an eye dr
Slide 19: Rope-a-Dope Timing and TARP
19 Rope-a-Dope Timing and TARP Capital was always key in the timing as to when to move off of our defensive strategy. In the third quarter of 2008 and in anticipation of moving off of our defensive strategy, we raised $50 million of convertible preferred stock through a private placement. This capit
Slide 20: So How Did Wintrust Fare?
20 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 Core Financial Goals Increase core earnings Move bad assets out
Slide 21: Taking Advantage of Dislocations
21 Taking Advantage of Dislocations Dislocated People Dislocated Assets Dislocated Banks FIFC purchased a portfolio of domestic life insurance premium finance loans and certain related assets from indirect wholly-owned subsidiaries of AIG Aggregate balance of approximately $1.03 billion Purchase pri
Slide 22: FDIC-Assisted Transactions
FDIC-Assisted Transactions 22 Bank Date of Acquisition Number Of Branches Fair Value of Asset Acquired (in 000s) Fair Value of Loans Acquired (in 000s) Fair Value of Liabilities Acquired (in 000s) Bargain Purchase Gain Lincoln Park 4/23/2010 4 157,078 103,420 192,018 $4.2MM Wheatland 4/23/2010 1 343
Slide 23: Consolidated Net Income
23 Consolidated Net Income (before Preferred Dividends, in 000s)
Slide 24: Annual Core Pre-tax Earnings
24 Annual "Core Pre-tax Earnings" (in 000s) (* - Annualized) "Core Pre-tax Earnings" are calculated by removing from reported Pre-tax earnings the following categories: Provision for Credit Losses; OREO Related Costs; Mortgage Recourse Obligations on Loans Previously Sold; Covered Loan Expense; Barg
Slide 25: Loan Growth
LOAN GROWTH (excluding Loans Held for Sale) 25 (in millions) 5 year CAGR = 13.8% 2006-2010
Slide 26: Non-Performing Asset Ratio Wintrust vs. Peer Group
26 Non-Performing Asset Ratio Wintrust vs. Peer Group Peer Group Data is per the Federal Reserve's Bank Holding Company Performance Report
Slide 27: Net Charge-offs Ratio Wintrust vs. Peer Group
27 Net Charge-offs Ratio Wintrust vs. Peer Group Peer Group Data is per the Federal Reserve's Bank Holding Company Performance Report
Slide 28: Capital Summary
28 Capital Summary Enhance and maintain strong capital ratios 12/31/09 12/31/10 6/30/11 Tier 1 Risk-based capital 11.0% 12.5% 12.3% Total capital ratio 12.4% 13.8% 13.5% Leverage ratio 9.3% 10.1% 10.3% Tangible common equity ratio 4.7% 8.0% 7.9% Provide flexibility for growth Organic growth & lendin
Slide 29: Tangible Book Value Per Share Growth
Financial Overview - Wintrust Has Consistently Grown Tangible Book Value Per Share Through Cycles Tangible Common Book Value Per Share $26.66* * Proforma assuming tangible equity units convert at a maximum price of $37.50
Slide 30: Financial Overview - Capital Components
30 Financial Overview - Capital Components (in millions) - Common Shareholders Equity - Trust Preferred Securities - Subordinated Debt - Preferred Securities
Slide 31: Wintrust Strategy for 2011 and Beyond
Wintrust Strategy for 2011 and Beyond Back to the Future 31
Slide 32: Back to the Future Strategy for 2011 and Beyond
32 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 firs
Slide 33: Expected Core Pre-tax Earnings Improvements
Expected Core Pre-tax Earnings Improvements Subject to market and other conditions, including interest rate environments, and other factors influencing growth, pre-tax, pre-provision earnings could benefit from the following: "Core pre-tax earnings" run rate of $201 million in the 1st Qtr 2011 and $
Slide 34: 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 35: Growth Strategy - Expansion
35 Penetrate new markets with community banking model Within 11/2 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 strategic new business line, or a
Slide 36: 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
Slide 37: Supplemental Financial Data
Supplemental Financial Data
Slide 38: Total Assets
38 Total Assets (in millions)
Slide 39: Historical Growth
Historicall Growth Banking Facilities 86 7:79 78 Ze Operating Subsidiaries 95
Slide 40: Asset Growth of Banks by Year
40 Asset Growth of Banks by Year (in millions)
Slide 41: Net Interest Margin
41 Net Interest Margin (fully taxable equivalent)
Slide 42: Revenue Growth by Quarter
42 Revenue Growth by Quarter (excluding Bargain Purchase Gains recorded in 3Q09 through 2Q11) - Net interest income - Non-interest income (in 000s)
Slide 43: EPS Growth
43 EPS Growth Annual Quarterly 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 repurchase of the TARP-CPP preferred stock.
Slide 44: Net Overhead Ratio & Efficiency Ratio
44 Net Overhead Ratio & Efficiency Ratio
Slide 45: Loan Portfolio Composition
45 Loan Portfolio Composition As of June 30, 2011 - $10.3 Billion (excludes loans held for sale) Commercial and Industrial Premium Finance - Life Insurance Res. R/E Home Equity Other Other Commercial Niches Commercial Real Estate Premium Finance - Commercial Covered Loans
Slide 46: Ending Loan-to-Deposit/Secured Borrowing Ratio
46 Ending Loan-to-Deposit/Secured Borrowing Ratio* (excludes loans held for sale) *Includes $600 million of secured borrowing related to the commercial premium finance loan securitization for which the related loans are recorded on the balance sheet beginning in 2010.
Slide 47: Non-Performing Assets to Total Assets
47 Non-Performing Assets to Total Assets (NPAs include NPLs and OREO and exclude covered loans) Assets in millions Peer Group-2003 = 0.58% Peer Group-2004 = 0.45% Peer Group-2005 = 0.42% Peer Group-2006 = 0.43% Peer Group-2007 = 0.80% Peer Group-2008 = 1.97% Peer Group-2009 = 3.16% Peer Group-2010 =
Slide 48: Net Charge-offs to Total Average Loans
48 Net Charge-offs to Total Average Loans Loans In millions Peer Group-2003 = 0.33% Peer Group-2004 = 0.21% Peer Group-2005 = 0.18% Peer Group-2006 = 0.15% Peer Group-2007 = 0.27% Peer Group-2008 = 1.10% Peer Group-2009 = 2.33% Peer Group-2010 = 2.04% 0.31% Peer Group Data is per the Federal Reserve
Slide 49: 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 50: Forward-Looking Statements (cont.)
50 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
Slide 51: Forward-Looking Statements (cont.)
51 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 fina
Slide 52: Forward-Looking Statements (cont.)
52 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
Slide 53: Questions
53 Questions
Wintrust Financial — Raymond James & Associates Bank Conference 2011 on 6ix