Wintrust Financial Corporation ("Wintrust" or "the Company")
(Nasdaq:WTFC) announced net income of $20.1 million or $0.47 per
diluted common share for the quarter ended September 30, 2010, an
increase of $0.22, or 88%, compared to $13.0 million, or $0.25 per
diluted common share, recorded in the second quarter of 2010.
The Company's total assets of $14.1 billion at September 30,
2010 increased $392 million from June 30, 2010 and $2.0 billion
from September 30, 2009. Total deposits as of September 30, 2010
were $11.0 billion, an increase of $337 million from June 30, 2010
(including $119 million in additional deposits for the third
quarter of 2010 related to an FDIC-assisted transaction) and $1.1
billion from September 30, 2009. Total loans, including loans held
for sale and excluding covered loans, were $9.8 billion as of
September 30, 2010, an increase of $219 million over the $9.6
billion balance as of June 30, 2010 and an increase of $1.3 billion
over September 30, 2009.
Edward J. Wehmer, President and Chief Executive Officer,
commented, "We are pleased to report net income of $20.1 million
for the third quarter of 2010. Core pre-tax earnings have increased
28% in the past twelve months, to $47.6 million in the third
quarter of 2010 from $37.1 million in the third quarter of
2009."
"Current market conditions are providing us with opportunities
to grow our core deposit franchises. During the third quarter, the
Company grew total deposits by $337 million, which included $119
million from the FDIC-assisted purchase of Ravenswood Bank in
August. The accumulation of excess liquidity management assets on
the Company's balance sheet from solid deposit growth has
negatively impacted our net interest margin on a short-term basis
until appropriate risk-adjusted returns for liquidity can be
found."
Mr. Wehmer noted, "The Company's net interest margin for the
quarter declined to 3.22% from 3.43% in the second quarter of
2010. This 21 basis point decline in margin was caused by:
- 14 basis point reduction due to the combination of higher
levels of liquidity management assets and lower yields on liquidity
management assets
- 10 basis point reduction due to $3.2 million less accretion on
the purchased life insurance premium finance portfolio due to a
slower rate of prepayments
- Nine basis point reduction attributable to the sale of certain
collateralized mortgage obligations
- 11 basis point improvement from continued lower re-pricing of
retail certificates of deposit
- One basis point improvement due to higher contribution from net
free funds
Meaningful expansion of the Company's net interest margin
remains a function of continued loan growth, continued re-pricing
of maturing certificates of deposit and stabilizing levels of
liquidity management assets and yields on those assets."
Commenting on credit, excluding the impact of the covered loans
acquired in the FDIC-assisted transactions, Mr. Wehmer said, "The
Company continues to aggressively identify potential non-performing
credits and take actions on existing non-performing
credits. Both total non-performing loans and total
non-performing loans as a percent of total loans decreased during
the third quarter. Additionally, non-performing assets, which
includes other real-estate owned ("OREO"), declined $11 million
since June 30, 2010. During the third quarter, the Company
recorded a provision for credit losses of $25.5 million and net
charge-offs of $21.4 million, the lowest levels since the second
quarter of 2009. Our allowance for loan losses increased to
$110.4 million or 1.17% of total loans."
Mr. Wehmer also noted, "We are very pleased with our
complementary core banking businesses as well. Mortgage
banking recorded total revenue of $20.1 million in the third
quarter of 2010, up 163% from the previous quarter. Current
mortgage rates available indicate an elevated level of originations
and revenue will be recorded in the fourth quarter. Mortgage
put-backs on previously originated products have abated and are
currently appropriately reserved. The Company has actively
worked to reach global settlements with investors."
Summarizing new initiatives in the quarter, Mr. Wehmer concluded
by noting, "Late in the third quarter we began a re-branding
campaign of our wealth management line of business. All wealth
management services are now marketed under the "Wintrust Wealth
Management" name. Our broker dealer will continue to serve its
customers using the well-recognized Wayne Hummer Investments
brand. Trust services will now be marketed under The Chicago
Trust Company brand name while asset management services will now
be marketed using the Wintrust Capital Management brand
name. Our Wintrust Commercial Banking office opened and
continues to develop its presence in the Chicago middle market
place."
In closing, Mr. Wehmer added, "During the third quarter of 2010
we completed our third FDIC-assisted transaction by acquiring
certain assets and liabilities of the banking operations of
Ravenswood Bank. We will continue to be actively involved in
the FDIC-assisted transaction process in desirable markets using a
disciplined financial approach. We will also continue to
evaluate non-FDIC-assisted transactions as well as opportunities in
our other lines of business following a similarly disciplined
approach."
See "Acquisitions" and "Securitizations" later in this document
for additional explanations of loan balance changes between
comparable periods. The Company's loan portfolio is
diversified among a wide variety of loan types. Please see the
tables included in the remainder of this document for additional
disclosures regarding the components of the commercial and
commercial real estate portfolio, the allowance for credit losses,
loan portfolio aging statistics and purchased loans subject to loss
sharing agreements with the FDIC, which we refer to as "covered
loans".
Wintrust's key operating measures and growth rates for the third
quarter of 2010 as compared to the sequential and linked quarters
are shown in the table below:
| |
|
|
|
% or (4) |
% or |
| |
|
|
|
basis point (bp) |
basis point (bp) |
| |
|
|
|
change |
change |
| |
Three Months
Ended |
from |
from |
| |
September 30, |
June 30, |
September 30, |
2nd Quarter |
3rd Quarter |
| |
2010 |
2010 |
2009 |
2010 |
2009 |
| |
|
|
|
|
|
| Net income |
$ 20,098 |
$ 13,009 |
$ 31,995 |
54% |
(37)% |
| Net income per common share –
diluted |
$ 0.47 |
$ 0.25 |
$ 1.07 |
88% |
(56)% |
| |
|
|
|
|
|
| Core pre-tax earnings (2) |
$ 47,572 |
$ 47,649 |
$ 37,137 |
--% |
28% |
| Net revenue (1) |
$ 157,636 |
$ 154,750 |
$ 238,343 |
2% |
(34)% |
| Net interest income |
$ 102,980 |
$ 104,314 |
$ 87,663 |
(1)% |
17% |
| |
|
|
|
|
|
| Net interest margin (2) |
3.22% |
3.43% |
3.25% |
(21) bp |
(3) bp |
| Net overhead ratio (3) |
1.28% |
1.26% |
(1.95)% |
2 bp |
323 bp |
| Return on average assets |
0.57% |
0.39% |
1.08% |
18 bp |
(51) bp |
| Return on average common equity |
5.44% |
2.98% |
13.79% |
246 bp |
(835) bp |
| |
| |
|
|
|
|
|
| At end of period |
|
|
|
|
|
| Total assets |
$ 14,100,368 |
$ 13,708,560 |
$ 12,136,021 |
12% |
16% |
| Total loans, excluding covered loans |
$ 9,461,155 |
$ 9,324,163 |
$ 8,275,257 |
6% |
14% |
| Total loans, including loans held-for-sale,
excluding covered loans |
$ 9,781,595 |
$ 9,562,144 |
$ 8,468,512 |
9% |
16% |
| Total deposits |
$ 10,962,239 |
$ 10,624,742 |
$ 9,847,163 |
13% |
11% |
| Total shareholders' equity |
$ 1,398,912 |
$ 1,384,736 |
$ 1,106,082 |
4% |
26% |
| |
| (1) Net revenue is net interest income
plus non-interest income. |
|
|
|
|
|
| (2) See "Supplemental
Financial Measures/Ratios" for additional information on this
performance measure/ratio. |
|
|
| (3) The net overhead ratio
is calculated by netting total non-interest expense and total
non-interest income, annualizing this amount, and dividing by that
period's average total assets. A lower ratio indicates a
higher degree of efficiency. |
|
| (4) Period-end balance sheet percentage
changes are annualized. |
|
|
|
|
|
Certain returns, yields, performance ratios, or quarterly growth
rates are "annualized" in this presentation to represent an annual
time period. This is done for analytical purposes to better
discern for decision-making purposes underlying performance trends
when compared to full-year or year-over-year amounts. For
example, a 5% growth rate for a quarter would represent an
annualized 20% growth rate. Additional supplemental financial
information showing quarterly trends can be found on the Company's
web site at www.wintrust.com by choosing "Financial Reports" under
the "Investor Relations" heading, and then choosing "Supplemental
Financial Info."
Items Impacting Comparative Financial
Results: Acquisitions, Securitization and Stock
Offerings/Regulatory Capital
Acquisitions
On August 17, 2010, the Company announced that its wholly-owned
subsidiary bank, Wheaton Bank & Trust Company ("Wheaton")
signed a Branch Purchase and Assumption Agreement whereby it agreed
to acquire a branch of First National Bank of Brookfield that is
located in Naperville, Illinois. The transaction closed on October
22, 2010 and the acquired operations will operate as Naperville
Bank & Trust. Through this transaction, subject to final
adjustments, Wheaton Bank & Trust Company acquired
approximately $23 million of deposits, approximately $11 million of
performing loans, the property, bank facility and various other
assets.
On August 6, 2010, the Company announced that its wholly-owned
subsidiary bank, Northbrook Bank & Trust Company
("Northbrook"), in an FDIC-assisted transaction, had acquired
certain assets and liabilities and the banking operations of
Ravenswood Bank ("Ravenswood"). Ravenswood operated one location in
Chicago, Illinois and one in Mount Prospect, Illinois.
On April 23, 2010, the Company announced that Northbrook and
Wheaton, in two FDIC-assisted transactions, had acquired certain
assets and liabilities and the banking operations of Lincoln Park
Savings Bank ("Lincoln Park") and Wheatland Bank ("Wheatland"),
respectively. Lincoln Park operated four locations in Chicago,
Illinois. Wheatland had one location in Naperville,
Illinois.
In summary in the FDIC-assisted transactions:
- Northbrook assumed approximately $120 million of the
outstanding deposits and approximately $188 million of assets of
Ravenswood, prior to purchase accounting adjustments.
- Northbrook assumed approximately $160 million of the
outstanding deposits and approximately $170 million of assets of
Lincoln Park, prior to purchase accounting adjustments.
- Wheaton assumed approximately $400 million of the outstanding
deposits and approximately $370 million of assets of Wheatland,
prior to purchase accounting adjustments.
These purchases were accounted for as business combinations as
required by Accounting Standards Codification (ASC) 805, Business
Combinations ("ASC 805"), which became effective for the Company
beginning on January 1, 2009. Under ASC 805 a gain is recorded
equal to the amount by which the fair value of net assets purchased
exceeded the purchase price. The Company recognized a gain of
$6.6 million in the third quarter of 2010 on the Ravenswood
acquisition. The Company recognized gains of $22.3 million and $4.2
million in the second quarter of 2010 on the Wheatland and Lincoln
Park acquisitions, respectively. These gains are shown as a gain on
bargain purchases, which is a component of non-interest income, on
the Company's statements of income.
Loans comprise the majority of the assets acquired in the three
FDIC-assisted transactions above and are subject to loss sharing
agreements with the FDIC where the FDIC has agreed to reimburse the
Company for 80% of losses incurred on the purchased loans. We
refer to the loans subject to these loss-sharing agreements as
"covered loans." Covered assets include covered loans, covered
OREO and certain other covered assets. The agreements with the
FDIC require that the Company follow certain servicing procedures
or risk losing FDIC reimbursement of covered asset
losses.
On July 28, 2009, the Company announced that its indirect,
wholly-owned subsidiary, First Insurance Funding Corp. ("FIFC")
completed the purchase of a majority of the U.S. life insurance
premium finance assets of A.I. Credit Corp. and A.I. Credit
Consumer Discount Company ("the seller"), subsidiaries of American
International Group, Inc. In doing so, FIFC acquired one of
the largest life insurance premium finance portfolios in the
industry, as well as certain other assets related to the life
insurance premium finance business and assumed certain related
liabilities. An aggregate unpaid principal balance of $949.3
million was purchased for $685.3 million in cash.
In connection with the purchase of the life insurance premium
finance business, the Company recognized a $10.9 million gain in
the first quarter of 2010, a $43.0 million gain in the fourth
quarter of 2009 and a $113.1 million gain in the third quarter of
2009. As of March 31, 2010, the full amount of bargain
purchase gain was recognized into income. The following table
presents a summary of the discount components for the life
insurance premium finance portfolio purchase as of September 30,
2010 and shows the changes in the balances from December 31,
2009:
| Purchased Loan
Portfolio |
|
|
| Summary of Acquisition |
|
Credit |
| |
|
discounts -- |
| |
|
non-- |
| |
Accretable |
accretable |
| (Dollars in thousands) |
discounts |
discounts -- |
| |
|
|
| Balances at December 31,
2009 |
$ 65,026 |
$ 37,323 |
| - Accretion (effective yield method) |
(5,418) |
-- |
| - Accretion recognized as
accounts prepay |
(1,427) |
(2,289) |
| - Discount used for loans written off |
(144) |
(1,044) |
| Balances at March 31,
2010 |
$ 58,037 |
$ 33,990 |
| - Accretion (effective yield method) |
(4,810) |
-- |
| - Accretion recognized as accounts
prepay |
(3,434) |
(3,418) |
| - Reclassification from nonaccretable to
accretable |
1,986 |
(1,986) |
| - Discount used for loans written off |
-- |
(369) |
| Balances at June 30,
2010 |
$ 51,779 |
$ 28,217 |
| - Accretion (effective yield method) |
(5,139) |
-- |
| - Accretion recognized as
accounts prepay |
(1,672) |
(1,680) |
| - Reclassification to accretable from
nonaccretable |
(52) |
52 |
| - Discount used for loans written off |
-- |
(190) |
| Balances at September 30,
2010 |
$ 44,916 |
$ 26,399 |
| |
On April 20, 2009, Wintrust Capital Management (formerly known
as Wayne Hummer Asset Management Company) completed its purchase
and assumption of certain assets and liabilities of Advanced
Investment Partners, LLC ("AIP"). AIP is an investment
management firm specializing in the active management of domestic
equity investment strategies. The impact related to the AIP
transaction is included in Wintrust's consolidated financial
results only since the effective date of acquisition.
Securitization
Sale of Loans
On September 11, 2009, Wintrust's indirect, wholly-owned
subsidiary, FIFC Premium Funding I, LLC (the "Issuer"), sold
$600,000,000 aggregate principal amount of its Series 2009-A
Premium Finance Asset Backed Notes, Class A (the "Notes"). The
Notes were issued in a securitization transaction sponsored by
First Insurance Funding Corp. At the time of closing, the
securitization was an off-balance sheet financing transaction for
the Company.
The Notes bear interest at an annual rate equal to one-month
LIBOR plus 1.45% and have an expected average term of
2.93 years; provided, however, that the entire unpaid balance
of the Notes shall be due and payable in full on February 17,
2014. At the time of issuance, the Notes were eligible collateral
under the Federal Reserve Bank of New York's Term Asset-Backed
Securities Loan Facility ("TALF"). The Issuer's obligations
under the Notes are secured by revolving loans made to buyers of
property and casualty insurance policies to finance the related
premiums payable by the buyers to the insurance companies for the
policies. The premium finance loans will be transferred from time
to time by FIFC to FIFC Funding I, LLC (the "Depositor") and by the
Depositor to the Issuer.
Change in Accounting Treatment
At September 30, 2009, prior to the existence of the
securitization facility, all premium finance loans held by the
Company were reflected as loans on its balance sheet. At
December 31, 2009, with the securitization facility in place,
approximately $594 million of commercial premium finance loans were
held in the securitization facility and were not reflected on the
Company's balance sheet. In accordance with newly applicable
accounting guidance, and as anticipated by the Company, effective
January 1, 2010 the securitization facility was recorded on the
balance sheet of the Company as a secured borrowing. As a
result of this new guidance, the Company's balance sheet since
January 1, 2010 reflects all loans outstanding in the
securitization facility, the $600 million of secured borrowing
notes issued to the securitization investors and cash in the
securitization facility.
Stock Offerings/Regulatory Capital
On March 9, 2010, the Company announced the closing of its
public offering of 5.8 million shares of common stock at $33.25 per
share. The Company received net proceeds of approximately $182.9
million, after deducting underwriting discounts and commissions and
estimated offering expenses. On March 16, 2010, the Company's
underwriters, who were granted a 30-day option to purchase up to an
additional 870,000 shares at a public offering price of $33.25 per
share to cover over-allotments, fully exercised this option for
additional net proceeds of approximately $27.5 million, after
deducting underwriting discounts and commissions and estimated
offering expenses. In total, the Company sold 6.67 million
shares for net proceeds of approximately $210.3 million.
As of September 30, 2010, the Company's estimated capital ratios
were 14.1% for total risk-based capital, 12.7% for tier 1
risk-based capital and 10.0% for leverage, well above the well
capitalized guidelines. Additionally, the Company's tangible common
equity ratio was 5.9% at September 30, 2010.
Financial Performance Overview – Third Quarter of
2010
For the third quarter of 2010, net interest income totaled
$103.0 million, an increase of $15.3 million as compared to the
third quarter of 2009 and a decrease of $1.3 million as compared to
the second quarter of 2010. Average earning assets for the
third quarter of 2010 increased by $2.0 billion compared to the
third quarter of 2009. Earning asset growth over the past 12
months was primarily a result of the $938 million increase in
average loans and $725 million increase in liquidity management
assets. The acquisition of a life insurance premium finance
portfolio and subsequent growth in this product accounted for $714
million of the total loan growth over the past 12 months, while the
three FDIC-assisted acquisitions accounted for $326 million of
average covered loan growth. The average earning asset growth
of $2.0 billion over the past 12 months was funded by a $647
million increase in the average balances of savings, NOW, MMA and
Wealth Management deposits, an increase in the average balance of
net free funds of $416 million, an increase in the average balance
of retail certificates of deposit of $354 million, an increase of
$600 million due to the secured borrowing notes to the
securitization investors and an increase in the average balance of
brokered certificates of deposit of $23 million, offset by a
decrease in the average balance of other wholesale borrowings of
$42 million. The net interest margin for the third quarter of 2010
was 3.22%, compared to 3.25% in the third quarter of 2009 and 3.43%
in the second quarter of 2010. The decline in net interest
margin in the third quarter of 2010 compared to the second quarter
of 2010 was primarily caused by $3.2 million less accretion on the
purchased life insurance portfolio as less prepayments occurred
(reduced net interest margin by 10 basis points), higher balances
and lower yields on liquidity management assets (reduced net
interest margin by 14 basis points), the negative impact of selling
certain collateralized mortgage obligations (reduced net interest
margin by nine basis points), offset by lower costs for
interest-bearing deposits (increased net interest margin by 11
basis points) and higher contribution from net free funds
(increased net interest margin by 1 basis point). The decrease in
net interest margin in the third quarter of 2010 compared to the
third quarter of 2009 resulted from the yield on earning assets
decreasing 65 basis points and the yield on interest-bearing
liabilities decreasing 63 basis points.
Non-interest income totaled $54.7 million in the third quarter
of 2010, decreasing $96.0 million, or 64%, compared to the third
quarter of 2009 and increasing $4.2 million, or 8%, compared to the
second quarter of 2010. The decrease compared to the prior
year was primarily attributable to the bargain purchase gain
related to the life insurance premium finance loan acquisition in
the third quarter of 2009 and lower trading gains, partially offset
by an increase in mortgage banking revenue and gains on
available-for-sale securities. Mortgage banking revenue increased
$7.8 million when compared to the third quarter of 2009 as loans
originated and sold to the secondary market were $1.1 billion in
the third quarter of 2010 compared to $960 million in the third
quarter of 2009 and $732 million in the second quarter of
2010. Higher originations and sales to the secondary market in
the third quarter of 2010 as compared to the third quarter of 2009
directly increased gains recognized on these sales. However,
changes in the fair market value of mortgage servicing rights,
valuation fluctuations of mortgage banking derivatives and fair
value accounting for certain residential mortgage loans held for
sale lowered mortgage banking revenue in the current quarter.
Additionally, expenses recognized for the estimated liability
associated with mortgage loans previously sold with recourse to the
secondary market decreased in the third quarter of 2010 compared to
the second quarter of 2010 as fewer investors, representing fewer
loans, requested the Company to indemnify them against losses on
loans or to repurchase loans which the investors believe do not
comply with applicable representations. The Company recognized
$1.4 million of expense in the third quarter of 2010, a decrease of
$3.3 million compared to the second quarter of 2010, and an
increase of $1.4 million compared to the third quarter of
2009. Also, net gains on available-for-sale securities
increased $9.6 million in the third quarter of 2010 compared to the
prior year quarter, primarily related to the sale of certain
collateralized mortgage obligations. Trading income decreased by
$5.5 million in the third quarter of 2010 when compared to the
third quarter of 2009 primarily due to realizing larger market
value increases in the prior year on certain collateralized
mortgage obligations held in trading.
Early in July we liquidated approximately $160 million of
collateralized mortgage obligations that were acquired in the first
quarter of 2009, recognizing a $7.7 million gain on
available-for-sale securities in the third quarter. The Company
recorded $31.7 million of trading gains on the trading component of
these securities over the previous six quarters, which had an
initial investment of approximately $0.5 million. The
available-for-sale component of these securities yielded
approximately 9% in the previous quarter. The absence of
these securities from our portfolio in the third quarter negatively
impacted our net interest margin by nine basis points and
restrained the growth of our core pre-tax earnings compared to the
second quarter.
Non-interest expense totaled $99.7 million in the third quarter
of 2010, increasing $7.2 million, or 8%, compared to the third
quarter of 2009 and increasing $7.1 million compared to the second
quarter of 2010. The increase compared to the third quarter of
2009 was primarily attributable to a $8.9 million increase in
salaries and employee benefits. The increase in salaries and
employee benefits was attributable to a $5.5 million increase in
bonus and commissions as variable pay based revenue increased
(mortgage banking and wealth management), a $2.3 million increase
in salaries caused by the additional employees from the three
FDIC-assisted transactions and larger staffing related to Company
growth, and $1.1 million increase from employee benefits (primarily
health plan related). Additionally, professional fees increased
$466,000, primarily related to increased legal costs related to
non-performing assets and recent bank acquisitions, and
miscellaneous expenses increased $1.3 million. These increases
were partially offset by a $5.5 million decrease in expenses
related to other real estate owned, or OREO.
Financial Performance Overview – First Nine Months of
2010
The net interest margin for the first nine months of 2010 was
3.34%, compared to 2.98% in the first nine months of 2009. The
increase in the net interest margin in the first nine months of
2010 when compared to the first nine months of 2009 is primarily
attributable to the acquisition of the life insurance premium
finance portfolio and lower costs of interest-bearing
deposits. The yield on loans increased 8 basis points,
however, the yield on total earning assets decreased by 32 basis
points as the yield on liquidity management assets declined by 148
basis points, while the rate paid on total interest-bearing
deposits decreased by 78 basis points compared to the first nine
months of 2009. Average earning assets for the first nine
months of 2010 increased by $2.0 billion compared to the first nine
months of 2009. Earning asset growth for the first nine months
of 2010 compared to the same period in 2009 was primarily a result
of the $1.1 billion increase in average loans, a $669 million
increase in liquidity management assets and $178 million of covered
loans. The acquisition of a life insurance premium finance
portfolio and subsequent growth in this product accounted for $996
million of the total loan growth for the first nine months of 2010
compared to the same period in 2009. The average earning asset
growth of $2.0 billion was funded by a $739 million increase in the
average balances of savings, NOW, MMA and Wealth Management
deposits, an increase in the average balance of net free funds of
$326 million, an increase in the average balance of retail
certificates of deposit of $356 million, an increase of $600
million due to the secured borrowing notes to the securitization
investors and an increase in the average balance of brokered
certificates of deposit of $46 million, offset by a decrease in the
average balance of other wholesale borrowings of $65
million.
Non-interest income totaled $147.7 million in the first nine
months of 2010, decreasing $84.9 million, or 36%, compared to the
first nine months of 2009. The decrease was primarily
attributable to the inclusion of the $113.1 million of bargain
purchase gains recorded relating to life insurance premium finance
loan acquisition in the third quarter of 2009. In comparison,
during the first nine months of 2010, the Company recorded bargain
purchase gains of $44.0 million as described earlier under
"Acquisitions." Wealth management revenue contributed a $6.5
million increase in non-interest income as improvements in the
equity markets overall has led to a 32% increase in wealth
management revenue compared to the first nine months of
2009. Mortgage banking revenue decreased $13.3 million when
compared to the first nine months of 2009. Changes in the fair
market value of mortgage servicing rights, valuation fluctuations
of mortgage banking derivatives and fair value accounting for
certain residential mortgage loans held for sale lowered mortgage
banking revenue in the first nine months of 2010. Additionally,
expenses recognized for the estimated liability associated with
mortgage loans previously sold with recourse to the secondary
market were higher in the current year due to investors pushing
back claims to the originators of loans in default. The
Company recognized $9.6 million of expense in the first nine months
of 2010 compared to no additional expense in the same period in the
prior year. Also, net gains on available-for-sale securities
increased $10.6 million in the current year, primarily related to
the sale of certain collateralized mortgage obligations. Trading
income decreased by $18.1 million in the current year primarily due
to realizing larger market value increases in the prior year on
certain collateralized mortgage obligations held in
trading.
Non-interest expense totaled $276.3 million in the first nine
months of 2010, increasing $22.6 million, or 9%, compared to the
first nine months of 2009. The increase compared to the first
nine months of 2009 was primarily attributable to a $17.8 million
increase in salaries and employee benefits. The increase in
salaries and employee benefits was attributable to a $7.9 million
increase in salaries caused by the additional employees from the
three FDIC-assisted transactions and larger staffing as the Company
grows, a $6.3 million increase in bonus and commissions as
variable pay based revenue increased (mortgage banking and wealth
management), and $3.6 million increase from employee benefits
(primarily health plan and payroll taxes). Additionally,
professional fees increased $1.8 million primarily related to
increased legal costs related to non-performing assets and recent
bank acquisitions, and miscellaneous expenses increased $4.1
million. These increases were partially offset by a $1.7
million decrease in expenses related to OREO and a decrease of $3.0
million in FDIC insurance expenses as the FDIC imposed an
industry-wide special assessment on financial institutions in the
prior year second quarter.
Financial Performance Overview – Credit
Quality
Non-performing loans, excluding covered loans, totaled $134.3
million, or 1.42% of total loans, at September 30, 2010, compared
to $135.4 million, or 1.45% of total loans, at June 30, 2010 and
$231.7 million, or 2.80% of total loans, at September 30,
2009. OREO, excluding covered OREO, of $76.7 million at
September 30, 2010 decreased $9.8 million compared to June 30, 2010
and increased $36.0 million compared to September 30,
2009.
Since the latter half of 2009, management has focused on
significantly lowering the Company's level of non-performing
loans. This was accomplished through a focus on gaining
control or obtaining possession of collateral from borrowers whose
loans were in non-accrual status. Progress towards this goal
enabled a number of these properties to be transferred to
OREO. The properties the Company obtains via foreclosure or
via deed in lieu of foreclosure are aggressively marketed for
sale. Additionally, beginning in the fourth quarter of 2009,
management has worked with financially distressed borrowers to
restructure current loans. These actions help distressed
borrowers maintain their homes or businesses and keep these loans
in an accruing status for the Company. As of September 30,
2010, a total of $93.7 million of outstanding loan balances
qualified as restructured loans, with $74.0 million of these
modified loans in an accruing status.
The provision for credit losses totaled $25.5 million for the
third quarter of 2010 compared to $41.3 million for the second
quarter of 2010 and $91.2 million in the third quarter of
2009. Net charge-offs as a percentage of loans, excluding
covered loans, for the third quarter of 2010 totaled 89 basis
points on an annualized basis compared to 365 basis points on an
annualized basis in the third quarter of 2009 and 163 basis points
on an annualized basis in the second quarter of 2010. In the second
quarter of 2010, a fraud perpetrated against a number of premium
finance companies in the industry, including the property and
casualty division of our premium financing subsidiary, increased
both our net charge-offs and our provision for loan losses by $15.7
million.
The allowance for credit losses at September 30, 2010 totaled
$112.8 million, or 1.19% of total loans, excluding covered loans,
compared to $108.7 million, or 1.17% of total loans, at June 30,
2010 and $98.2 million, or 1.19% of total loans, at September 30,
2009.
| WINTRUST FINANCIAL
CORPORATION |
Three Months
Ended |
Nine Months
Ended |
| Selected Financial
Highlights |
September
30, |
September
30, |
| |
2010 |
2009 |
2010 |
2009 |
| Selected Financial Condition Data (at
end of period): |
|
|
|
|
| Total assets |
$ 14,100,368 |
$ 12,136,021 |
|
|
| Total loans, excluding covered loans |
9,461,155 |
8,275,257 |
|
|
| Total deposits |
10,962,239 |
9,847,163 |
|
|
| Junior subordinated debentures |
249,493 |
249,493 |
|
|
| Total shareholders' equity |
1,398,912 |
1,106,082 |
|
|
| Selected Statements of Income
Data: |
|
|
|
|
| Net interest income |
$ 102,980 |
$ 87,663 |
$ 303,159 |
$ 224,942 |
| Net revenue (1) |
157,636 |
238,343 |
450,859 |
457,501 |
| Core pre-tax earnings (2) |
47,572 |
37,137 |
137,287 |
81,996 |
| Net income |
20,098 |
31,995 |
49,125 |
44,902 |
| Net income per common share – Basic |
$ 0.49 |
$ 1.14 |
$ 1.17 |
$ 1.26 |
| Net income per common share –
Diluted |
$ 0.47 |
$ 1.07 |
$ 1.12 |
$ 1.25 |
| Selected Financial Ratios and Other
Data: |
|
|
|
|
| Performance Ratios: |
|
|
|
|
| Net interest margin (2) |
3.22% |
3.25% |
3.34% |
2.98% |
| Non-interest income to average assets |
1.56% |
5.07% |
1.48% |
2.79% |
| Non-interest expense to average
assets |
2.85% |
3.11% |
2.77% |
3.04% |
| Net overhead ratio (3) |
1.28% |
(1.95)% |
1.29% |
0.25% |
| Efficiency ratio (2) (4) |
67.01% |
38.69% |
62.45% |
55.15% |
| Return on average assets |
0.57% |
1.08% |
0.49% |
0.54% |
| Return on average common equity |
5.44% |
13.79% |
4.43% |
5.16% |
| |
|
|
|
|
| Average total assets |
$ 14,015,757 |
$ 11,797,520 |
$ 13,322,460 |
$ 11,154,193 |
| Average total shareholders' equity |
1,391,507 |
1,070,095 |
1,320,611 |
1,066,447 |
| Average loans to average deposits ratio
(excluding covered loans) |
88.7% |
90.5% |
91.0% |
91.9% |
| Average loans to average deposits ratio
(including covered loans) |
91.7% |
90.5% |
92.8% |
91.9% |
| Common Share Data at end of
period: |
|
|
|
|
| Market price per common share |
$ 32.41 |
$ 27.96 |
|
|
| Book value per common share |
$ 35.70 |
$ 34.10 |
|
|
| Common shares outstanding |
31,143,740 |
24,103,068 |
|
|
| |
|
|
|
|
| Other Data at end of period:(9) |
|
|
|
|
| Leverage Ratio (5) |
10.0% |
9.3% |
|
|
| Tier 1 capital to risk-weighted assets
(5) |
12.7% |
10.8% |
|
|
| Total capital to risk-weighted assets
(5) |
14.1% |
12.3% |
|
|
| Tangible common equity ratio (TCE) (8) |
5.9% |
4.5% |
|
|
| Allowance for credit losses (6) |
$ 112,807 |
$ 98,225 |
|
|
| Credit discounts on purchased premium finance
receivables - life insurance (7) |
$ 26,399 |
$ 36,195 |
|
|
| Non-performing loans |
$ 134,323 |
$ 231,659 |
|
|
| Allowance for credit losses to total loans
(6) |
1.19% |
1.19% |
|
|
| Non-performing loans to total loans |
1.42% |
2.80% |
|
|
| Number of: |
|
|
|
|
| Bank subsidiaries |
15 |
15 |
|
|
| Non-bank subsidiaries |
8 |
8 |
|
|
| Banking
offices |
85 |
78 |
|
|
| (1) Net revenue includes net
interest income and non-interest income |
| (2) See "Supplemental Financial
Measures/Ratios" for additional information on this performance
measure/ratio. |
| (3) The net overhead ratio is
calculated by netting total non-interest expense and total
non-interest income, annualizing this amount, and dividing by
that period's total average assets. A lower ratio indicates a
higher degree of efficiency. |
| (4) The efficiency ratio is
calculated by dividing total non-interest expense by tax-equivalent
net revenue (less securities gains or losses). A lower ratio
indicates more efficient revenue generation. |
| (5) Capital ratios for current
quarter-end are estimated. |
| (6) The allowance for credit
losses includes both the allowance for loan losses and the
allowance for unfunded lending-related commitments. |
| (7) Represents the credit
discounts on purchased life insurance premium finance loans. |
| (8) Total shareholders' equity
minus preferred stock and total intangible assets divided by total
assets minus total intangible assets. |
| (9) Asset quality ratios exclude
covered loans. |
| |
|
|
|
| WINTRUST FINANCIAL
CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS
OF CONDITION |
| |
|
|
|
| |
(Unaudited) |
|
(Unaudited) |
| |
September 30, |
December 31, |
September 30, |
| (In thousands) |
2010 |
2009 |
2009 |
| Assets |
|
|
|
| Cash and due from banks |
$ 155,067 |
$ 135,133 |
$ 128,898 |
| Federal funds sold and securities purchased
under resale agreements |
88,913 |
23,483 |
22,863 |
| Interest-bearing deposits with other
banks |
1,224,584 |
1,025,663 |
1,168,362 |
| Available-for-sale securities, at fair
value |
1,324,179 |
1,255,066 |
1,362,359 |
| Trading account securities |
4,935 |
33,774 |
29,204 |
| Brokerage customer receivables |
25,442 |
20,871 |
19,441 |
| Federal Home Loan Bank and Federal Reserve
Bank stock, at cost |
80,445 |
73,749 |
71,889 |
| Loans held-for-sale |
320,440 |
275,715 |
193,255 |
| Loans, net of unearned income, excluding
covered loans |
9,461,155 |
8,411,771 |
8,275,257 |
| Covered loans |
353,840 |
-- |
-- |
| Total loans |
9,814,995 |
8,411,771 |
8,275,257 |
| Less: Allowance for
loan losses |
110,432 |
98,277 |
95,096 |
| Net loans |
9,704,563 |
8,313,494 |
8,180,161 |
| Premises and equipment, net |
353,445 |
350,345 |
352,890 |
| FDIC indemnification asset |
161,640 |
-- |
-- |
| Accrued interest receivable and other
assets |
365,496 |
416,678 |
315,806 |
| Goodwill |
278,025 |
278,025 |
276,525 |
| Other intangible assets |
13,194 |
13,624 |
14,368 |
| Total
assets |
$ 14,100,368 |
$ 12,215,620 |
$ 12,136,021 |
| |
|
|
|
| Liabilities and Shareholders'
Equity |
|
|
|
| Deposits: |
|
|
|
| Non-interest bearing |
$ 1,042,730 |
$ 864,306 |
$ 841,668 |
| Interest bearing |
9,919,509 |
9,052,768 |
9,005,495 |
| Total deposits |
10,962,239 |
9,917,074 |
9,847,163 |
| Notes payable |
1,000 |
1,000 |
1,000 |
| Federal Home Loan Bank advances |
414,832 |
430,987 |
433,983 |
| Other borrowings |
241,522 |
247,437 |
252,071 |
| Secured borrowings - owed to
securitization investors |
600,000 |
-- |
-- |
| Subordinated notes |
55,000 |
60,000 |
65,000 |
| Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
| Trade date securities payable |
2,045 |
-- |
-- |
| Accrued interest payable
and other liabilities |
175,325 |
170,990 |
181,229 |
| Total liabilities |
12,701,456 |
11,076,981 |
11,029,939 |
| |
|
|
|
| Shareholders' Equity: |
|
|
|
| Preferred stock |
287,234 |
284,824 |
284,061 |
| Common stock |
31,145 |
27,079 |
26,965 |
| Surplus |
682,318 |
589,939 |
580,988 |
| Treasury stock |
(51) |
(122,733) |
(122,437) |
| Retained earnings |
394,323 |
366,152 |
342,873 |
| Accumulated other
comprehensive income (loss) |
3,943 |
(6,622) |
(6,368) |
| Total shareholders'
equity |
1,398,912 |
1,138,639 |
1,106,082 |
| Total liabilities
and shareholders' equity |
$ 14,100,368 |
$ 12,215,620 |
$ 12,136,021 |
| |
|
|
|
|
| WINTRUST FINANCIAL
CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS
OF INCOME (UNAUDITED) |
| |
|
|
|
|
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| (In thousands, except per share
data) |
2010 |
2009 |
2010 |
2009 |
| Interest income |
|
|
|
|
| Interest and fees on loans |
$ 137,902 |
$ 126,448 |
$ 403,244 |
$ 343,637 |
| Interest bearing deposits with banks |
1,339 |
778 |
3,828 |
2,205 |
| Federal funds sold and securities
purchased under resale agreements |
35 |
106 |
118 |
233 |
| Securities |
7,438 |
13,677 |
29,668 |
42,977 |
| Trading account securities |
19 |
7 |
383 |
86 |
| Brokerage customer receivables |
180 |
132 |
484 |
372 |
| Federal Home Loan Bank
and Federal Reserve Bank stock |
488 |
429 |
1,419 |
1,275 |
| Total interest
income |
147,401 |
141,577 |
439,144 |
390,785 |
| Interest expense |
|
|
|
|
| Interest on deposits |
31,088 |
42,806 |
95,926 |
132,261 |
| Interest on Federal Home Loan Bank
advances |
4,042 |
4,536 |
12,482 |
13,492 |
| Interest on notes payable and other
borrowings |
1,411 |
1,779 |
4,312 |
5,401 |
| Interest on secured borrowings - owed to
securitization investors |
3,167 |
-- |
9,276 |
-- |
| Interest on subordinated notes |
265 |
333 |
762 |
1,341 |
| Interest on junior
subordinated debentures |
4,448 |
4,460 |
13,227 |
13,348 |
| Total interest
expense |
44,421 |
53,914 |
135,985 |
165,843 |
| Net interest income |
102,980 |
87,663 |
303,159 |
224,942 |
| Provision for credit losses |
25,528 |
91,193 |
95,870 |
129,329 |
| Net interest income after provision for
credit losses |
77,452 |
(3,530) |
207,289 |
95,613 |
| Non-interest income |
|
|
|
|
| Wealth management |
8,973 |
7,501 |
26,833 |
20,310 |
| Mortgage banking |
20,980 |
13,204 |
38,693 |
52,032 |
| Service charges on deposit accounts |
3,384 |
3,447 |
10,087 |
9,600 |
| Gain on sales of commercial premium
finance receivables |
-- |
3,629 |
-- |
4,147 |
| Gains (losses) on available-for-sale
securities, net |
9,235 |
(412) |
9,673 |
(910) |
| Gain on bargain purchases |
6,593 |
113,062 |
43,981 |
113,062 |
| Trading gains (losses) |
712 |
6,236 |
5,147 |
23,254 |
| Other |
4,779 |
4,013 |
13,286 |
11,064 |
| Total non-interest
income |
54,656 |
150,680 |
147,700 |
232,559 |
| Non-interest expense |
|
|
|
|
| Salaries and employee benefits |
57,014 |
48,088 |
156,735 |
138,923 |
| Equipment |
4,203 |
4,069 |
12,144 |
12,022 |
| Occupancy, net |
6,254 |
5,884 |
18,517 |
17,682 |
| Data processing |
3,891 |
3,226 |
10,967 |
9,578 |
| Advertising and marketing |
1,650 |
1,488 |
4,434 |
4,003 |
| Professional fees |
4,555 |
4,089 |
11,619 |
9,843 |
| Amortization of other intangible
assets |
701 |
677 |
2,020 |
2,040 |
| FDIC insurance |
4,642 |
4,334 |
13,456 |
16,468 |
| OREO expenses, net |
4,767 |
10,243 |
11,948 |
13,671 |
| Other |
12,046 |
10,465 |
34,484 |
29,540 |
| Total non-interest
expense |
99,723 |
92,563 |
276,324 |
253,770 |
| Income before taxes |
32,385 |
54,587 |
78,665 |
74,402 |
| Income tax expense |
12,287 |
22,592 |
29,540 |
29,500 |
| Net income |
$ 20,098 |
$ 31,995 |
$ 49,125 |
$ 44,902 |
| Preferred stock dividends and discount
accretion |
$ 4,943 |
$ 4,668 |
$14,830 |
$ 14,668 |
| Net income applicable to common
shares |
$ 15,155 |
$ 27,327 |
$ 34,295 |
$ 30,234 |
| Net income per common share -
Basic |
$ 0.49 |
$ 1.14 |
$ 1.17 |
$ 1.26 |
| Net income per common share -
Diluted |
$ 0.47 |
$ 1.07 |
$ 1.12 |
$ 1.25 |
| Cash dividends declared per
common share |
$ 0.09 |
$ 0.09 |
$ 0.18 |
$ 0.27 |
| Weighted average common shares
outstanding |
31,117 |
24,052 |
29,396 |
23,958 |
| Dilutive potential common shares |
988 |
2,493 |
1,132 |
323 |
| Average common shares and dilutive
common shares |
32,105 |
26,545 |
30,528 |
24,281 |
SUPPLEMENTAL FINANCIAL MEASURES/RATIOS
The accounting and reporting policies of Wintrust conform to
generally accepted accounting principles ("GAAP") in the United
States and prevailing practices in the banking
industry. However, certain non-GAAP performance measures and
ratios are used by management to evaluate and measure the Company's
performance. These include taxable-equivalent net interest income
(including its individual components), net interest margin
(including its individual components), the efficiency ratio,
tangible common equity and core pre-tax earnings. Management
believes that these measures and ratios provide users of the
Company's financial information a more meaningful view of the
performance of the interest-earning assets and interest-bearing
liabilities and of the Company's operating efficiency. Other
financial holding companies may define or calculate these measures
and ratios differently.
Management reviews yields on certain asset categories and the
net interest margin of the Company and its banking subsidiaries on
a fully taxable-equivalent ("FTE") basis. In this non-GAAP
presentation, net interest income is adjusted to reflect tax-exempt
interest income on an equivalent before-tax basis. This
measure ensures comparability of net interest income arising from
both taxable and tax-exempt sources. Net interest income on a
FTE basis is also used in the calculation of the Company's
efficiency ratio. The efficiency ratio, which is calculated by
dividing non-interest expense by total taxable-equivalent net
revenue (less securities gains or losses), measures how much it
costs to produce one dollar of revenue. Securities gains or
losses are excluded from this calculation to better match revenue
from daily operations to operational expenses. Core pre-tax
earnings is adjusted to exclude the provision for credit losses and
certain significant items.
A reconciliation of certain non-GAAP performance measures and
ratios used by the Company to evaluate and measure the Company's
performance to the most directly comparable GAAP financial measures
is shown below:
| |
| |
Three Months
Ended |
Nine Months
Ended |
| |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September
30, |
| (Dollars in thousands) |
2010 |
2010 |
2010 |
2009 |
2009 |
2010 |
2009 |
| (A) Interest Income
(GAAP) |
$ 147,401 |
$ 149,248 |
$ 142,496 |
$ 136,829 |
$ 141,577 |
$ 439,144 |
$ 390,785 |
| Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
| - Loans |
85 |
90 |
80 |
99 |
93 |
254 |
360 |
| - Liquidity management assets |
324 |
366 |
361 |
406 |
413 |
1,051 |
1,314 |
| - Other earning assets |
7 |
5 |
5 |
9 |
9 |
16 |
30 |
| Interest Income - FTE |
$ 147,817 |
$ 149,709 |
$ 142,942 |
$ 137,343 |
$ 142,092 |
$ 440,465 |
$ 392,489 |
| (B) Interest Expense
(GAAP) |
$ 44,421 |
$ 44,934 |
$ 46,631 |
$ 49,895 |
$ 53,914 |
$ 135,985 |
$ 165,843 |
| Net interest income - FTE |
103,396 |
104,775 |
96,311 |
87,448 |
88,178 |
304,480 |
226,646 |
| (C) Net Interest Income (GAAP) (A
minus B) |
$ 102,980 |
$ 104,314 |
$ 95,865 |
$ 86,934 |
$ 87,663 |
$ 303,159 |
$ 224,942 |
| (D) Net interest margin
(GAAP) |
3.20% |
3.42% |
3.36% |
3.08% |
3.23% |
3.32% |
2.95% |
| Net interest margin - FTE |
3.22% |
3.43% |
3.38% |
3.10% |
3.25% |
3.34% |
2.98% |
| (E) Efficiency ratio
(GAAP) |
67.20% |
59.90% |
60.79% |
52.70% |
38.77% |
62.63% |
55.36% |
| Efficiency ratio -
FTE |
67.01% |
59.72% |
60.59% |
52.54% |
38.69% |
62.45% |
55.15% |
| |
|
|
|
|
|
|
|
| Calculation of Tangible
Common Equity ratio (at period end) |
|
|
|
|
|
|
| Total shareholders equity |
$ 1,398,912 |
$ 1,384,736 |
$ 1,364,832 |
$ 1,138,639 |
$ 1,106,082 |
|
|
| Less: Preferred stock |
(287,234) |
(286,460) |
(285,642) |
(284,824) |
(284,061) |
|
|
| Less: Intangible assets |
(291,219) |
(291,300) |
(291,003) |
(291,649) |
(290,893) |
|
|
| (F) Total tangible shareholders equity |
$ 820,459 |
$ 806,976 |
$ 788,187 |
$ 562,166 |
$ 531,128 |
|
|
| |
|
|
|
|
|
|
|
| Total assets |
$ 14,100,368 |
$ 13,708,560 |
$ 12,839,978 |
$ 12,215,620 |
$ 12,136,021 |
|
|
| Less: Intangible assets |
(291,219) |
(291,300) |
(291,003) |
(291,649) |
(290,893) |
|
|
| (G) Total tangible assets |
$ 13,809,149 |
$ 13,417,260 |
$ 12,548,975 |
$ 11,923,971 |
$ 11,845,128 |
|
|
| |
|
|
|
|
|
|
|
| Tangible common equity ratio
(F/G) |
5.9% |
6.0% |
6.3% |
4.7% |
4.5% |
|
|
| |
|
|
|
|
|
|
|
| Income before taxes |
$ 32,385 |
$ 20,790 |
$ 25,490 |
$ 43,102 |
$ 54,587 |
$ 78,665 |
$ 74,402 |
| Add: Provision for credit losses |
25,528 |
41,297 |
29,044 |
38,603 |
91,193 |
95,870 |
129,329 |
| Add: OREO expenses, net |
4,767 |
5,843 |
1,337 |
5,293 |
10,243 |
11,948 |
13,671 |
| Add: Recourse obligation on loans previously
sold |
1,432 |
4,721 |
3,452 |
937 |
-- |
9,605 |
-- |
| Less: Gain on bargain purchases |
(6,593) |
(26,494) |
(10,894) |
(42,951) |
(113,062) |
(43,981) |
(113,062) |
| Less: Trading (gains) losses |
(712) |
1,538 |
(5,973) |
(4,437) |
(6,236) |
(5,147) |
(23,254) |
| Less: (Gains) losses on available-for-sale
securities, net |
(9,235) |
(46) |
(392) |
(642) |
412 |
(9,673) |
910 |
| Core pre-tax earnings |
$ 47,572 |
$ 47,649 |
$ 42,064 |
$ 39,905 |
$ 37,137 |
$ 137,287 |
$ 81,996 |
|
|
| |
|
|
|
|
|
| LOANS |
| Loan Portfolio Mix and Growth
Rates |
|
|
|
% Growth |
| |
|
|
|
From (1) |
From |
| |
September 30, |
December 31, |
September 30, |
December 31, |
September 30, |
| (Dollars in thousands) |
2010 |
2009 |
2009 |
2009 |
2009 |
| Balance: |
|
|
|
|
|
| Commercial |
$ 1,952,791 |
$ 1,743,208 |
$ 1,643,721 |
16% |
19% |
| Commercial real estate |
3,331,498 |
3,296,698 |
3,392,138 |
1 |
(2) |
| Home equity |
919,824 |
930,482 |
928,548 |
(2) |
(1) |
| Residential real-estate |
342,009 |
306,296 |
281,151 |
16 |
22 |
| Premium finance receivables -
commercial |
1,323,934 |
730,144 |
752,032 |
109 |
76 |
| Premium finance receivables - life
insurance |
1,434,994 |
1,197,893 |
1,045,653 |
26 |
37 |
| Indirect consumer (2) |
56,575 |
98,134 |
115,528 |
(57) |
(51) |
| Consumer and other |
99,530 |
108,916 |
116,486 |
(12) |
(15) |
| |
|
|
|
|
|
| Total loans, net of unearned income,
excluding covered loans |
$ 9,461,155 |
$ 8,411,771 |
$ 8,275,257 |
17% |
14% |
| Covered loans |
353,840 |
-- |
-- |
100 |
100 |
| Total loans, net of unearned income |
$ 9,814,995 |
$ 8,411,771 |
$ 8,275,257 |
22% |
19% |
| |
|
|
|
|
|
| Mix: |
|
|
|
|
|
| Commercial |
20% |
21% |
20% |
|
|
| Commercial real estate |
34 |
39 |
41 |
|
|
| Home equity |
9 |
11 |
11 |
|
|
| Residential real-estate |
3 |
4 |
4 |
|
|
| Premium finance receivables -
commercial |
13 |
9 |
9 |
|
|
| Premium finance receivables - life
insurance |
15 |
14 |
13 |
|
|
| Indirect consumer (2) |
1 |
1 |
1 |
|
|
| Consumer and other |
1 |
1 |
1 |
|
|
| |
|
|
|
|
|
| Total loans, net of unearned income,
excluding covered loans |
96% |
100% |
100% |
|
|
| Covered loans |
4 |
$ -- |
-- |
|
|
| Total loans, net of unearned income |
100% |
100% |
100% |
|
|
| |
|
|
|
|
|
| (1) Annualized |
|
|
|
|
|
| (2) Includes autos, boats,
snowmobiles and other indirect consumer loans. |
| |
| Commercial and Real-Estate Loans,
excluding covered loans |
|
|
|
> 90 Days |
Allowance |
| As of September 30,
2010 |
|
% of |
|
Past Due |
For Loan |
| |
|
Total |
|
and Still |
Losses |
| (Dollars in thousands) |
Balance |
Loans |
Nonaccrual |
Accruing |
Allocation |
| Commercial: |
|
|
|
|
|
| Commercial and industrial |
$ 1,540,584 |
16.3% |
$ 18,779 |
$ -- |
$ 28,165 |
| Franchise |
115,380 |
1.2 |
-- |
-- |
1,238 |
| Mortgage warehouse lines of credit |
158,597 |
1.7 |
-- |
-- |
1,631 |
| Community Advantage - homeowner
associations |
66,484 |
0.7 |
-- |
-- |
177 |
| Aircraft |
36,522 |
0.4 |
-- |
-- |
363 |
| Other |
35,224 |
0.3 |
665 |
-- |
432 |
| Total commercial |
$ 1,952,791 |
20.6% |
$ 19,444 |
$ -- |
$ 32,006 |
| |
|
|
|
|
|
| Commercial Real-Estate: |
|
|
|
|
|
| Residential construction |
$ 102,911 |
1.1% |
$ 4,921 |
$ -- |
$ 2,764 |
| Commercial construction |
179,667 |
1.9 |
11,230 |
-- |
4,097 |
| Land |
263,363 |
2.8 |
27,134 |
-- |
11,342 |
| Office |
537,868 |
5.6 |
5,745 |
-- |
7,231 |
| Industrial |
472,556 |
5.0 |
3,565 |
-- |
5,264 |
| Retail |
492,633 |
5.2 |
2,084 |
-- |
6,732 |
| Multi-family |
279,127 |
3.0 |
9,339 |
-- |
4,283 |
| Mixed use and other |
1,003,373 |
10.6 |
19,322 |
-- |
14,818 |
| Total commercial
real-estate |
$ 3,331,498 |
35.2% |
$ 83,340 |
$ -- |
$ 56,531 |
| Total commercial and commercial
real-estate |
$ 5,284,289 |
55.8% |
$ 102,784 |
$ -- |
$ 88,537 |
| |
| Commercial real-estate - collateral location
by state: |
|
|
|
|
|
| Illinois |
$ 2,692,839 |
80.8% |
|
|
|
| Wisconsin |
363,498 |
10.9 |
|
|
|
| Total primary
markets |
$ 3,056,337 |
91.7% |
|
|
|
| Florida |
69,204 |
2.1 |
|
|
|
| Arizona |
43,294 |
1.3 |
|
|
|
| Indiana |
42,990 |
1.3 |
|
|
|
| Other (no individual state greater than
0.7%) |
119,673 |
3.6 |
|
|
|
| Total |
$ 3,331,498 |
100.0% |
|
|
|
| |
| |
|
|
|
|
|
|
DEPOSITS |
| Deposit Portfolio Mix and Growth
Rates |
|
|
|
% Growth |
| |
|
|
|
From (1) |
From |
| |
September 30, |
December 31, |
September 30, |
December 31, |
September 30, |
| (Dollars in thousands) |
2010 |
2009 |
2009 |
2009 |
2009 |
| Balance: |
|
|
|
|
|
| Non-interest bearing |
$ 1,042,730 |
$ 864,306 |
$ 841,668 |
28% |
24% |
| NOW |
1,551,749 |
1,415,856 |
1,245,689 |
13 |
25 |
| Wealth Management deposits (2) |
710,435 |
971,113 |
935,740 |
(36) |
(24) |
| Money Market |
1,746,168 |
1,534,632 |
1,468,228 |
18 |
19 |
| Savings |
713,823 |
561,916 |
513,239 |
36 |
39 |
| Time certificates of deposit |
5,197,334 |
4,569,251 |
4,842,599 |
18 |
7 |
| Total deposits |
$ 10,962,239 |
$ 9,917,074 |
$ 9,847,163 |
14% |
11% |
| |
|
|
|
|
|
| Mix: |
|
|
|
|
|
| Non-interest bearing |
10% |
9% |
9% |
|
|
| NOW |
14 |
14 |
13 |
|
|
| Wealth Management deposits (2) |
6 |
10 |
9 |
|
|
| Money Market |
16 |
15 |
15 |
|
|
| Savings |
7 |
6 |
5 |
|
|
| Time certificates of deposit |
47 |
46 |
49 |
|
|
| Total deposits |
100% |
100% |
100% |
|
|
| |
|
|
|
|
|
| (1) Annualized |
|
|
|
|
|
| (2) Represents deposit
balances of the Company's subsidiary banks from brokerage customers
of Wayne Hummer Investments, trust and asset management
customers of The Chicago Trust Company and brokerage customers from
unaffiliated companies which have been placed into deposit accounts
of the Banks. |
| |
| Deposit Maturity
Analysis |
|
|
|
|
|
Weighted- |
| As of September 30,
2010 |
Non-- |
|
|
|
|
Average |
| |
Interest |
Savings |
|
|
|
Rate of |
| |
Bearing |
and |
|
Time |
|
Maturing Time |
| |
and |
Money |
Wealth |
Certificates |
Total |
Certificates |
| (Dollars in thousands) |
NOW (1) |
Market (1) |
Mgt (1) (2) |
of Deposit |
Deposits |
of Deposit |
| 1-3 months |
$ 2,594,479 |
$ 2,459,991 |
$ 710,435 |
$ 1,211,805 |
$ 6,976,710 |
1.55% |
| 4-6 months |
|
|
|
829,519 |
829,519 |
1.57 |
| 7-9 months |
|
|
|
674,904 |
674,904 |
1.84 |
| 10-12 months |
|
|
|
548,572 |
548,572 |
1.60 |
| 13-18 months |
|
|
|
661,811 |
661,811 |
1.84 |
| 19-24 months |
|
|
|
513,866 |
513,866 |
1.88 |
| 24+ months |
|
|
|
756,857 |
756,857 |
2.40 |
| Total deposits |
$ 2,594,479 |
$ 2,459,991 |
$ 710,435 |
$ 5,197,334 |
$ 10,962,239 |
1.79% |
| |
| (1) Balances of non-contractual
maturity deposits are shown as maturing in the earliest time
frame. These deposits do not have contractual maturities
and re-price in varying degrees to changes in interest rates. |
| (2) Wealth management
deposit balances from unaffiliated companies are shown maturing in
the period in which the current contractual obligation to hold
these funds matures. |
NET INTEREST INCOME
The following table presents a summary of Wintrust's average
balances, net interest income and related net interest margins,
calculated on a fully tax-equivalent basis, for the third quarter
of 2010 compared to the third quarter of 2009 (linked
quarters):
| |
| |
For the Three Months
Ended |
For the Three Months Ended |
| |
September 30,
2010 |
September 30, 2009 |
| (Dollars in thousands) |
Average |
Interest |
Rate |
Average |
Interest |
Rate |
| |
|
|
|
|
|
|
| Liquidity management assets (1) (2)
(7) |
$ 2,802,964 |
$ 9,625 |
1.36% |
$ 2,078,330 |
$ 15,403 |
2.94% |
| Other earning assets (2) (3) (7) |
34,263 |
205 |
2.37 |
24,874 |
148 |
2.36 |
| Loans, net of unearned income (2) (4)
(7) |
9,603,561 |
134,016 |
5.54 |
8,665,281 |
126,541 |
5.79 |
| Covered loans |
325,751 |
3,971 |
4.84 |
-- |
-- |
-- |
| Total earning assets (7) |
$ 12,766,539 |
$ 147,817 |
4.59% |
$ 10,768,485 |
$ 142,092 |
5.24% |
| Allowance for loan losses |
(113,631) |
|
|
(85,300) |
|
|
| Cash and due from banks |
154,078 |
|
|
109,645 |
|
|
| Other assets |
1,208,771 |
|
|
1,004,690 |
|
|
| Total assets |
$ 14,015,757 |
|
|
$ 11,797,520 |
|
|
| |
|
|
|
|
|
|
| Interest-bearing deposits |
$ 9,823,525 |
$ 31,088 |
1.26% |
$ 8,799,578 |
$ 42,806 |
1.93% |
| Federal Home Loan Bank advances |
414,789 |
4,042 |
3.87 |
434,134 |
4,536 |
4.14 |
| Notes payable and other borrowings |
232,991 |
1,411 |
2.40 |
245,352 |
1,779 |
2.88 |
| Secured borrowings - owed to
securitization investors |
600,000 |
3,167 |
2.09 |
-- |
-- |
-- |
| Subordinated notes |
55,000 |
265 |
1.89 |
65,000 |
333 |
2.01 |
| Junior subordinated notes |
249,493 |
4,448 |
6.98 |
249,493 |
4,460 |
6.99 |
| Total interest-bearing liabilities |
$ 11,375,798 |
$ 44,421 |
1.55% |
$ 9,793,557 |
$ 53,914 |
2.18% |
| Non-interest bearing liabilities |
1,005,170 |
|
|
775,202 |
|
|
| Other liabilities |
243,282 |
|
|
158,666 |
|
|
| Equity |
1,391,507 |
|
|
1,070,095 |
|
|
| Total liabilities and shareholders'
equity |
$ 14,015,757 |
|
|
$ 11,797,520 |
|
|
| |
|
|
|
|
|
|
| Interest rate spread (5) (7) |
|
|
3.04% |
|
|
3.06% |
| Net free funds/contribution (6) |
$ 1,390,741 |
|
0.18% |
$ 974,928 |
|
0.19% |
| Net interest income/Net interest margin
(7) |
|
$ 103,396 |
3.22% |
|
$ 88,178 |
3.25% |
| |
| (1) Liquidity management
assets include available-for-sale securities, interest earning
deposits with banks, federal funds sold and securities purchased
under resale agreements. |
| (2) Interest income on
tax-advantaged loans, trading securities and securities reflects a
tax-equivalent adjustment based on a marginal federal corporate tax
rate of 35%. The total adjustments for the three months ended
September 30, 2010 and 2009 were $416,000 and $515,000,
respectively. |
| (3) Other earning assets include
brokerage customer receivables and trading account securities. |
| (4) Loans, net of unearned
income, include loans held-for-sale and non-accrual loans. |
| (5) Interest rate spread is the
difference between the yield earned on earning assets and the
rate paid on interest-bearing liabilities. |
| (6) Net free funds are the
difference between total average earning assets and total average
interest-bearing liabilities. The estimated
contribution to net interest margin from net free funds is
calculated using the rate paid for total interest-bearing
liabilities. |
| (7) See "Supplemental Financial
Measures/Ratios" for additional information on this performance
ratio. |
The higher level of net interest income recorded in the third
quarter of 2010 compared to the third quarter of 2009 was primarily
attributable to the impact of the presence of the life insurance
premium finance assets acquired in the second half of 2009 and
lower retail deposit costs during the third quarter of 2010.
Approximately $714 million of the increase in average total loans
is attributable to life insurance premium finance loans including
those purchased in the transaction or originated by the
Company.
In the third quarter of 2010, the yield on earning assets
decreased 65 basis points as the yield on liquidity management
assets declined by 158 basis points and the rate on
interest-bearing liabilities decreased 63 basis points compared to
the third quarter of 2009. Retail deposit re-pricing
opportunities over the past 12 months, due to a sustained low
interest rate environment and more stable financial markets,
contributed to the majority of this decreased cost. The rate
paid on interest-bearing deposits decreased 67 basis points when
compared to the third quarter of 2009.
The following table presents a summary of Wintrust's average
balances, net interest income and related net interest margins,
calculated on a fully tax-equivalent basis, for the third quarter
of 2010 compared to the second quarter of 2010 (sequential
quarters):
| |
|
| |
For the Three Months
Ended |
For the Three Months Ended |
| |
September 30,
2010 |
June 30, 2010 |
| (Dollars in thousands) |
Average |
Interest |
Rate |
Average |
Interest |
Rate |
| |
|
|
|
|
|
|
| Liquidity management assets (1) (2)
(7) |
$ 2,802,964 |
$ 9,625 |
1.36% |
$ 2,613,179 |
$ 13,305 |
2.04% |
| Other earning assets (2) (3)
(7) |
34,263 |
205 |
2.37 |
62,874 |
515 |
3.28 |
| Loans, net of unearned income (2)
(4) (7) |
9,603,561 |
134,016 |
5.54 |
9,356,033 |
133,207 |
5.71 |
| Covered loans |
325,751 |
3,971 |
4.84 |
210,030 |
2,682 |
5.12 |
| Total earning assets (7) |
$ 12,766,539 |
$ 147,817 |
4.59% |
$ 12,242,116 |
$ 149,709 |
4.91% |
| Allowance for loan losses |
(113,631) |
|
|
(108,764) |
|
|
| Cash and due from banks |
154,078 |
|
|
137,531 |
|
|
| Other assets |
1,208,771 |
|
|
1,119,654 |
|
|
| Total assets |
$ 14,015,757 |
|
|
$ 13,390,537 |
|
|
| |
|
|
|
|
|
|
| Interest-bearing deposits |
$ 9,823,525 |
$ 31,088 |
1.26% |
$ 9,348,541 |
$ 31,626 |
1.36% |
| Federal Home Loan Bank advances |
414,789 |
4,042 |
3.87 |
417,835 |
4,094 |
3.93 |
| Notes payable and other borrowings |
232,991 |
1,411 |
2.40 |
217,751 |
1,439 |
2.65 |
| Secured borrowings - owed to securitization
investors |
600,000 |
3,167 |
2.09 |
600,000 |
3,115 |
2.08 |
| Subordinated notes |
55,000 |
265 |
1.89 |
57,198 |
256 |
1.77 |
| Junior subordinated notes |
249,493 |
4,448 |
6.98 |
249,493 |
4,404 |
6.98 |
| Total interest-bearing liabilities |
$ 11,375,798 |
$ 44,421 |
1.55% |
$ 10,890,818 |
$ 44,934 |
1.65% |
| Non-interest bearing liabilities |
1,005,170 |
|
|
932,046 |
|
|
| Other liabilities |
243,282 |
|
|
195,984 |
|
|
| Equity |
1,391,507 |
|
|
1,371,689 |
|
|
| Total liabilities and shareholders'
equity |
$ 14,015,757 |
|
|
$ 13,390,537 |
|
|
| |
|
|
|
|
|
|
| Interest rate spread (5) (7) |
|
|
3.04% |
|
|
3.26% |
| Net free funds/contribution (6) |
$ 1,390,741 |
|
0.18% |
$ 1,351,298 |
|
0.17% |
| Net interest income/Net interest margin
(7) |
|
$ 103,396 |
3.22% |
|
$ 104,775 |
3.43% |
| |
| (1) Liquidity management assets
include available-for-sale securities, interest earning deposits
with banks, federal funds sold and securities purchased under
resale agreements. |
| (2) Interest income on
tax-advantaged loans, trading securities and securities reflects a
tax-equivalent adjustment based on a marginal federal corporate tax
rate of 35%. The total adjustments for the three months ended
September 30, 2010 was $416,000 and for the three months ended June
30, 2010 was $461,000. |
| (3) Other earning assets include
brokerage customer receivables and trading account securities. |
| (4) Loans, net of unearned
income, include loans held-for-sale and non-accrual loans. |
| (5) Interest rate spread is the
difference between the yield earned on earning assets and the
rate paid on interest-bearing liabilities. |
| (6) Net free funds are the
difference between total average earning assets and total average
interest-bearing liabilities. The estimated contribution to
net interest margin from net free funds is calculated using the
rate paid for total interest-bearing liabilities. |
| (7) See "Supplemental Financial
Measures/Ratios" for additional information on this performance
ratio. |
The decline in net interest margin in the third quarter of 2010
compared to the second quarter of 2010 was primarily caused by $3.2
million less accretion on the purchased life insurance premium
finance portfolio as less prepayments occurred (reduced net
interest margin by 10 basis points), higher balances and lower
yields on liquidity management assets (reduced net interest margin
by 14 basis points), the negative impact of selling certain
collateralized mortgage obligations (reduced net interest margin by
nine basis points), offset by lower costs for interest-bearing
deposits (increased net interest margin by 11 basis points) and
higher contribution from net free funds (increased net interest
margin by 1 basis point). The decline in the yield on loans is
primarily attributable to reduced accretion on the purchased life
insurance premium finance portfolio.
The following table presents a summary of Wintrust's average
balances, net interest income and related net interest margins,
calculated on a fully tax-equivalent basis, for the nine months
ended September 30, 2010 compared to the nine months ended
September 30, 2009:
| |
| |
For the Nine Months
Ended |
For the Nine Months Ended |
| |
September 30,
2010 |
September 30, 2009 |
| (Dollars in thousands) |
Average |
Interest |
Rate |
Average |
Interest |
Rate |
| |
|
|
|
|
|
|
| Liquidity management assets (1) (2) (7) |
$ 2,592,751 |
$ 36,084 |
1.86% |
$ 1,923,869 |
$ 48,004 |
3.34% |
| Other earning assets (2) (3) (7) |
50,192 |
883 |
2.35 |
23,242 |
488 |
2.81 |
| Loans, net of unearned income (2) (4)
(7) |
9,371,291 |
396,845 |
5.66 |
8,244,336 |
343,997 |
5.58 |
| Covered loans |
178,492 |
6,653 |
4.98 |
-- |
-- |
-- |
| Total earning assets (7) |
$ 12,192,726 |
$ 440,465 |
4.83% |
$ 10,191,447 |
$ 392,489 |
5.15% |
| Allowance for loan losses |
(109,982) |
|
|
(76,886) |
|
|
| Cash and due from banks |
135,476 |
|
|
103,164 |
|
|
| Other assets |
1,104,240 |
|
|
936,468 |
|
|
| Total assets |
$ 13,322,460 |
|
|
$ 11,154,193 |
|
|
| |
|
|
|
|
|
|
| Interest-bearing deposits |
$ 9,358,313 |
$ 95,926 |
1.37% |
$ 8,217,631 |
$ 132,261 |
2.15% |
| Federal Home Loan Bank advances |
420,554 |
12,482 |
3.97 |
435,359 |
13,492 |
4.14 |
| Notes payable and other borrowings |
225,579 |
4,312 |
2.56 |
266,264 |
5,401 |
2.71 |
| Secured borrowings - owed to securitization
investors |
600,000 |
9,276 |
2.07 |
-- |
|
-- |
| Subordinated notes |
57,381 |
762 |
1.75 |
67,198 |
1,341 |
2.63 |
| Junior subordinated notes |
249,493 |
13,227 |
6.99 |
249,498 |
13,348 |
7.05 |
| Total interest-bearing liabilities |
$ 10,911,320 |
$ 135,985 |
1.66% |
$ 9,235,950 |
$ 165,843 |
2.40% |
| Non-interest bearing liabilities |
934,734 |
|
|
754,666 |
|
|
| Other liabilities |
155,795 |
|
|
97,130 |
|
|
| Equity |
1,320,611 |
|
|
1,066,447 |
|
|
| Total liabilities and shareholders'
equity |
$ 13,322,460 |
|
|
$ 11,154,193 |
|
|
| |
|
|
|
|
|
|
| Interest rate spread (5) (7) |
|
|
3.17% |
|
|
2.75% |
| Net free funds/contribution (6) |
$ 1,281,406 |
|
0.17% |
$ 955,497 |
|
0.23% |
| Net interest income/Net interest margin
(7) |
|
$ 304,480 |
3.34% |
|
$ 226,646 |
2.98% |
| |
| (1) Liquidity management assets
include available-for-sale securities, interest earning deposits
with banks, federal funds sold and securities purchased under
resale agreements. |
| (2) Interest income on
tax-advantaged loans, trading securities and securities reflects a
tax-equivalent adjustment based on a marginal federal corporate tax
rate of 35%. The total adjustments for the nine months ended
September 30, 2010 and 2009 were $1.3 million and $1.7 million,
respectively. |
| (3) Other earning assets include
brokerage customer receivables and trading account securities. |
| (4) Loans, net of unearned
income, include loans held-for-sale and non-accrual loans. |
| (5) Interest rate spread is the
difference between the yield earned on earning assets and the
rate paid on interest-bearing liabilities. |
| (6) Net free funds are the
difference between total average earning assets and total average
interest-bearing liabilities. The estimated contribution to
net interest margin from net free funds is calculated using the
rate paid for total interest-bearing liabilities. |
| (7) See "Supplemental Financial
Measures/Ratios" for additional information on this performance
ratio. |
NON-INTEREST INCOME
For the third quarter of 2010, non-interest income totaled $54.7
million, a decrease of $96.0 million, or 64%, compared to the third
quarter of 2009. The decrease was primarily attributable to
the bargain purchase gain related to the life insurance premium
finance loan acquisition in the third quarter of 2009 and lower
trading gains, partially offset by an increase in mortgage banking
revenue and gains on available-for-sale
securities.
The following table presents non-interest income by category for
the periods presented:
| |
| |
Three Months Ended |
|
|
| |
September 30 |
$ |
% |
| (Dollars in thousands) |
2010 |
2009 |
Change |
Change |
| Brokerage |
$ 5,806 |
$ 4,593 |
$ 1,213 |
26 |
| Trust and asset management |
3,167 |
2,908 |
259 |
9 |
| Total wealth management |
8,973 |
7,501 |
1,472 |
20 |
| Mortgage banking |
20,980 |
13,204 |
7,776 |
59 |
| Service charges on deposit accounts |
3,384 |
3,447 |
(63) |
(2) |
| Gains on sales of premium finance
receivables |
-- |
3,629 |
(3,629) |
(100) |
| Gains (losses) on available-for-sale
securities |
9,235 |
(412) |
9,647 |
NM |
| Gain on bargain purchases |
6,593 |
113,062 |
(106,469) |
(94) |
| Trading gains |
712 |
6,236 |
(5,524) |
(89) |
| Other: |
|
|
|
|
| Fees from covered call options |
703 |
-- |
703 |
100 |
| Bank Owned Life Insurance |
552 |
552 |
-- |
-- |
| Administrative services |
744 |
527 |
217 |
41 |
| Miscellaneous |
2,780 |
2,934 |
(154) |
(5) |
| Total Other |
4,779 |
4,013 |
766 |
19 |
| |
|
|
|
|
| Total Non-Interest
Income |
$ 54,656 |
$ 150,680 |
$ (96,024) |
(64) |
| |
| |
Nine Months Ended |
|
|
| |
September 30 |
$ |
% |
| (Dollars in thousands) |
2010 |
2009 |
Change |
Change |
| Brokerage |
$ 17,072 |
$ 12,693 |
$ 4,379 |
34 |
| Trust and asset management |
9,761 |
7,617 |
2,144 |
28 |
| Total wealth management |
26,833 |
20,310 |
6,523 |
32 |
| Mortgage banking |
38,693 |
52,032 |
(13,339) |
(26) |
| Service charges on deposit accounts |
10,087 |
9,600 |
487 |
5 |
| Gains on sales of premium finance
receivables |
-- |
4,147 |
(4,147) |
(100) |
| Gains (losses) on available-for-sale
securities |
9,673 |
(910) |
10,583 |
NM |
| Gain on bargain purchases |
43,981 |
113,062 |
(69,081) |
(61) |
| Trading gains |
5,147 |
23,254 |
(18,107) |
(78) |
| Other: |
|
|
|
|
| Fees from covered call options |
1,162 |
1,998 |
(836) |
(42) |
| Bank Owned Life Insurance |
1,593 |
1,403 |
190 |
14 |
| Administrative services |
2,034 |
1,463 |
571 |
39 |
| Miscellaneous |
8,497 |
6,200 |
2,297 |
37 |
| Total Other |
13,286 |
11,064 |
2,222 |
20 |
| |
|
|
|
|
| Total Non-Interest
Income |
$ 147,700 |
$ 232,559 |
$ (84,859) |
(36) |
| |
| NM = Not Meaningful |
Wealth management revenue is comprised of the trust and asset
management revenue of The Chicago Trust Company and the asset
management fees, brokerage commissions, trading commissions and
insurance product commissions at Wayne Hummer Investments and
Wintrust Capital Management. Wealth management revenue totaled $9.0
million in the third quarter of 2010 and $7.5 million in the
third quarter of 2009. Increased asset valuations due to equity
market improvements have helped revenue growth from trust and asset
management activities. Additionally, the improvement in the equity
markets overall have led to the increase of the brokerage component
of wealth management revenue as customer trading activity has
increased.
Mortgage banking revenue includes revenue from activities
related to originating, selling and servicing residential real
estate loans for the secondary market. For the quarter ended
September 30, 2010, this revenue source totaled $21.0 million, an
increase of $7.8 million when compared to the third quarter of
2009. Mortgages originated and sold totaled $1.1 billion in the
third quarter of 2010 compared to $732 million in the second
quarter of 2010 and $960 million in the third quarter of
2009. The increase in mortgage banking revenue in the third
quarter of 2010 as compared to the third quarter of 2009 resulted
primarily from an increase in gains on sales of loans, which was
driven by higher origination volumes and better pricing realized as
a result of the Company utilizing mandatory execution of forward
commitments with investors in 2010. The increase in gains on
sales was partially offset by changes in the fair market value of
mortgage servicing rights, valuation fluctuations of mortgage
banking derivatives and fair value accounting for certain
residential mortgage loans held for sale and an increase in loss
indemnification claims by purchasers of the Company's
loans. The Company enters into residential mortgage loan sale
agreements with investors in the normal course of
business. These agreements provide recourse to investors
through certain representations concerning credit information, loan
documentation, collateral and insurability. Investors request
the Company to indemnify them against losses on certain loans or to
repurchase loans which the investors believe do not comply with
applicable representations. An increase in requests for loss
indemnification can negatively impact mortgage banking revenue as
additional recourse expense. Fewer requests from investors for
loss indemnification occurred in the current quarter as compared to
the second quarter of 2010. The Company recognized $1.4
million of expense in the third quarter of 2010, a decrease of $3.3
million compared to the second quarter of 2010 and has recognized
$9.6 million on a year-to-date basis in 2010. This liability on
loans expected to be repurchased from loans sold to investors is
based on trends in repurchase and indemnification requests, actual
loss experience, known and inherent risks in the loan, and current
economic conditions.
A summary of the mortgage banking revenue components is shown
below:
|
|
| Mortgage banking
revenue |
|
|
|
|
| |
|
|
|
|
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| (Dollars in thousands) |
2010 |
2009 |
2010 |
2009 |
| |
|
|
|
|
| Mortgage loans originated and
sold |
$ 1,076,736 |
$ 960,218 |
$ 2,495,880 |
$ 3,713,883 |
| |
|
|
|
|
| Mortgage loans serviced |
$ 787,923 |
$ 715,351 |
|
|
| Fair value of mortgage servicing
rights (MSRs) |
$ 5,179 |
$ 6,030 |
|
|
| MSRs as a percentage of loans
serviced |
0.66% |
0.84% |
|
|
| |
|
|
|
|
| Mortgage banking
revenue: |
|
|
|
|
| Gain on sales of loans |
$ 28,096 |
$ 13,957 |
$ 59,287 |
$ 54,187 |
| Derivative/fair value, net |
(4,212) |
86 |
(7,200) |
(98) |
| Mortgage servicing rights |
(1,472) |
(839) |
(3,789) |
(2,057) |
| Recourse obligation on loans previously
sold |
(1,432) |
-- |
(9,605) |
-- |
| Total mortgage banking
revenue |
$ 20,980 |
$ 13,204 |
$ 38,693 |
$ 52,032 |
| |
|
|
|
|
| Gain on sales of loans as a
percentage of loans sold (1) |
2.22% |
1.46% |
2.09% |
1.46% |
| |
| (1) Includes
derivative/fair value, net |
All mortgage loan servicing by the Company is performed by four
of its subsidiary banks. Mortgage servicing rights are carried
on the balance sheet at fair value. All loans originated and sold
into the secondary market by its mortgage subsidiary Wintrust
Mortgage Company have been sold with mortgage servicing rights
released (sold to the investors).
Service charges on deposit accounts totaled $3.4 million for the
third quarter of 2010, a decrease of $63,000, or 2%, when compared
to the same quarter of 2009. The majority of deposit service
charges relates to customary fees on overdrawn accounts and
returned items. The level of service charges received is
substantially below peer group levels, as management believes in
the philosophy of providing high quality service without
encumbering that service with numerous activity charges.
As a result of the new accounting requirements beginning January
1, 2010 that now require loans sold and transferred into the
securitization facility be accounted for as secured borrowings with
the securitization investors, the Company no longer recognizes
gains on sales of premium finance receivables (see "Securitization
- Sale of Loans").
The Company recognized $9.2 million of net gains on
available-for-sale securities in the third quarter of 2010 compared
to a net loss of $412,000 in the prior year quarter. The net
gains in the third quarter of 2010 were primarily related to the
sale of certain collateralized mortgage
obligations.
The gain on bargain purchase of $6.6 million recognized in the
third quarter of 2010 relates to the FDIC-assisted bank acquisition
of Ravenswood during the period. The gain on bargain purchase
of $113.1 million in the third quarter of 2009 related to the life
insurance premium finance loan acquisition. See "Acquisitions"
for a discussion of these transactions.
Trading gains of $712,000 were recognized by the Company in the
third quarter of 2010 compared to gains of $6.2 million in the
third quarter of 2009. Lower trading gains in 2010 resulted
primarily from realizing larger market value increases in the prior
year on certain collateralized mortgage obligations held in
trading.
Other non-interest income for the third quarter of 2010 totaled
$4.8 million, compared to $4.0 million in the third quarter of
2009. Fees from certain covered call option transactions
increased by $703,000 in the third quarter of 2010 as compared to
the same period in the prior year. Historically, compression
in the net interest margin was effectively offset, as has
consistently been the case, by the Company's covered call
strategy. In the third quarter of 2010 management chose to
engage in limited covered call option activity. An
illustration of the past effectiveness of this strategy is shown in
the Supplemental Financial Information section (see page titled
"Net Interest Margin (Including Call Option Income)").
NON-INTEREST EXPENSE
Non-interest expense for the third quarter of 2010 totaled $99.7
million and increased approximately $7.2 million, or 8%, compared
to the third quarter 2009.
The following table presents non-interest expense by category
for the periods presented:
| |
| |
Three Months
Ended |
|
|
| |
September 30 |
$ |
% |
| (Dollars in thousands) |
2010 |
2009 |
Change |
Change |
| Salaries and employee benefits: |
|
|
|
|
| Salaries |
$ 30,537 |
$ 28,189 |
2,348 |
8 |
| Commissions and bonus |
17,366 |
11,887 |
5,479 |
46 |
| Benefits |
9,111 |
8,012 |
1,099 |
14 |
| Total salaries and employee benefits |
57,014 |
48,088 |
8,926 |
19 |
| Equipment |
4,203 |
4,069 |
134 |
3 |
| Occupancy, net |
6,254 |
5,884 |
370 |
6 |
| Data processing |
3,891 |
3,226 |
665 |
21 |
| Advertising and marketing |
1,650 |
1,488 |
162 |
11 |
| Professional fees |
4,555 |
4,089 |
466 |
11 |
| Amortization of other intangible assets |
701 |
677 |
24 |
4 |
| FDIC insurance |
4,642 |
4,334 |
308 |
7 |
| OREO expenses, net |
4,767 |
10,243 |
(5,476) |
(53) |
| Other: |
|
|
|
|
| Commissions - 3rd party brokers |
979 |
843 |
136 |
16 |
| Postage |
1,254 |
1,139 |
115 |
10 |
| Stationery and supplies |
812 |
769 |
43 |
6 |
| Miscellaneous |
9,001 |
7,714 |
1,287 |
17 |
| Total other |
12,046 |
10,465 |
1,581 |
15 |
| |
|
|
|
|
| Total Non-Interest
Expense |
$ 99,723 |
$ 92,563 |
$ 7,160 |
8 |
|
|
| |
Nine Months Ended |
|
|
| |
September 30 |
$ |
% |
| (Dollars in thousands) |
2010 |
2009 |
Change |
Change |
| Salaries and employee benefits: |
|
|
|
|
| Salaries |
$ 88,334 |
$ 80,421 |
7,913 |
10 |
| Commissions and bonus |
40,064 |
33,751 |
6,313 |
19 |
| Benefits |
28,337 |
24,751 |
3,586 |
14 |
| Total salaries and employee benefits |
156,735 |
138,923 |
17,812 |
13 |
| Equipment |
12,144 |
12,022 |
122 |
1 |
| Occupancy, net |
18,517 |
17,682 |
835 |
5 |
| Data processing |
10,967 |
9,578 |
1,389 |
15 |
| Advertising and marketing |
4,434 |
4,003 |
431 |
11 |
| Professional fees |
11,619 |
9,843 |
1,776 |
18 |
| Amortization of other intangible assets |
2,020 |
2,040 |
(20) |
(1) |
| FDIC insurance |
13,456 |
16,468 |
(3,012) |
(18) |
| OREO expenses, net |
11,948 |
13,671 |
(1,723) |
(13) |
| Other: |
|
|
|
|
| Commissions - 3rd party brokers |
3,037 |
2,338 |
699 |
30 |
| Postage |
3,593 |
3,466 |
127 |
4 |
| Stationery and supplies |
2,305 |
2,330 |
(25) |
(1) |
| Miscellaneous |
25,549 |
21,406 |
4,143 |
19 |
| Total other |
34,484 |
29,540 |
4,944 |
17 |
| |
|
|
|
|
| Total Non-Interest
Expense |
$ 276,324 |
$ 253,770 |
$ 22,554 |
9 |
|
|
Salaries and employee benefits comprised 57% of total
non-interest expense in the third quarter of 2010 and 52% in the
third quarter of 2009. Salaries and employee benefits expense
increased $8.9 million, or 19%, in the third quarter of 2010
compared to the third quarter of 2009 primarily as a result of a
$5.5 million increase in bonus and commissions as variable pay
based revenue increased (mortgage banking and wealth management), a
$2.3 million increase in salaries caused by the additional
employees from the three FDIC-assisted transactions and larger
staffing as the Company grows and a $1.1 million increase from
employee benefits (primarily health plan
related).
Professional fees include legal, audit and tax fees, external
loan review costs and normal regulatory exam
assessments. Professional fees for the third quarter of 2010
were $4.6 million, an increase of $466,000, or 11%, compared to the
same period in 2009. These increases are primarily a result of
increased legal costs related to non-performing assets and recent
bank acquisitions.
FDIC insurance totaled $4.6 million in the third quarter of
2010, an increase of $308,000 compared to $4.3 million in the third
quarter of 2009. The increase in FDIC insurance expense is
primarily the result of the higher level of deposits at the
Company's banks.
OREO expenses include all costs related with obtaining,
maintaining and selling of other real estate owned
properties. This expense totaled $4.8 million in the third
quarter of 2010, a decrease of $5.5 million compared to $10.2
million in the third quarter of 2009. The decrease in OREO
expenses primarily related to lower valuation adjustments of
properties held in OREO in the third quarter of 2010 as compared to
third quarter of 2009.
Miscellaneous expense includes ATM expenses, correspondent bank
charges, directors' fees, telephone, travel and entertainment,
corporate insurance, dues and subscriptions, problem loan expenses
and lending origination costs that are not
deferred. Miscellaneous expenses in the third quarter of 2010
increased $1.3 million, or 17%, compared to the same period in the
prior year. The increase in the third quarter of 2010 compared
to the same period in the prior year is primarily attributable to
the general growth in the Company's business.
ASSET QUALITY
Allowance for Credit Losses
|
|
| |
Three Months
Ended |
Nine Months
Ended |
| |
September
30, |
September
30, |
| (Dollars in thousands) |
2010 |
2009 |
2010 |
2009 |
| |
|
|
|
|
| Allowance for loan losses at
beginning of period |
$ 106,547 |
$ 85,113 |
$ 98,277 |
$ 69,767 |
| Provision for credit
losses |
25,528 |
91,193 |
95,870 |
129,329 |
| Other adjustments |
-- |
-- |
1,943 |
-- |
| Reclassification to allowance for
unfunded lending-related commitments |
(206) |
(1,543) |
478 |
(1,543) |
| |
|
|
|
|
| Charge-offs: |
|
|
|
|
| Commercial |
3,076 |
16,685 |
12,532 |
26,128 |
| Commercial real estate |
15,727 |
57,928 |
48,281 |
66,220 |
| Home equity |
1,234 |
1,727 |
4,604 |
3,034 |
| Residential real estate |
116 |
422 |
832 |
682 |
| Premium finance receivables -
commercial |
1,505 |
2,478 |
21,186 |
5,622 |
| Premium finance receivables - life
insurance |
79 |
-- |
79 |
-- |
| Indirect consumer |
198 |
588 |
728 |
1,421 |
| Consumer and other |
288 |
244 |
576 |
495 |
| Total charge-offs |
22,223 |
80,072 |
88,818 |
103,602 |
| |
|
|
|
|
| Recoveries: |
|
|
|
|
| Commercial |
286 |
104 |
873 |
214 |
| Commercial real estate |
197 |
35 |
856 |
240 |
| Home equity |
8 |
1 |
22 |
3 |
| Residential real estate |
3 |
-- |
10 |
-- |
| Premium finance receivables -
commercial |
220 |
161 |
637 |
457 |
| Premium finance receivables - life
insurance |
-- |
-- |
-- |
-- |
| Indirect consumer |
29 |
62 |
160 |
135 |
| Consumer and other |
43 |
42 |
124 |
96 |
| Total recoveries |
786 |
405 |
2,682 |
1,145 |
| Net charge-offs, excluding
covered loans |
(21,437) |
(79,667) |
(86,136) |
(102,457) |
| Covered loans |
-- |
-- |
-- |
-- |
| Net charge-offs |
(21,437) |
(79,667) |
(86,136) |
(102,457) |
| |
|
|
|
|
| Allowance for loan losses at
period end |
$ 110,432 |
$ 95,096 |
$ 110,432 |
$ 95,096 |
| |
|
|
|
|
| Allowance for unfunded
lending-related commitments at period end |
$ 2,375 |
$ 3,129 |
$ 2,375 |
$ 3,129 |
| |
|
|
|
|
| Allowance for credit losses at
period end |
$ 112,807 |
$ 98,225 |
$ 112,807 |
$ 98,225 |
| |
|
|
|
|
| Annualized net charge-offs by
category as a percentage of its own respective
category's average: |
|
|
|
|
| Commercial |
0.60% |
4.01% |
0.88% |
2.23% |
| Commercial real estate |
1.84 |
6.69 |
1.90 |
2.59 |
| Home equity |
0.53 |
0.75 |
0.66 |
0.44 |
| Residential real estate |
0.07 |
0.33 |
0.20 |
0.19 |
| Premium finance receivables -
commercial |
0.39 |
0.74 |
2.12 |
0.54 |
| Premium finance receivables - life
insurance |
0.02 |
-- |
0.01 |
-- |
| Indirect consumer |
1.08 |
1.67 |
0.99 |
1.19 |
| Consumer and other |
1.01 |
0.71 |
0.57 |
0.38 |
| Total loans, net of unearned income,
excluding covered loans |
0.89% |
3.65% |
1.23% |
1.66% |
| Covered loans |
-- |
-- |
-- |
-- |
| Total loans, net of unearned income |
0.86% |
3.65% |
1.20% |
1.66% |
| |
|
|
|
|
| Net charge-offs as a percentage of
the provision for credit losses |
83.97% |
87.36% |
89.85% |
79.22% |
| |
|
|
|
|
| Excluding covered
loans: |
|
|
|
|
| Loans at period-end |
|
|
$ 9,461,155 |
$ 8,275,257 |
| Allowance for loan losses as a
percentage of loans at period end |
|
|
1.17% |
1.15% |
| Allowance for credit losses as a
percentage of loans at period end |
|
|
1.19% |
1.19% |
| |
|
|
|
|
| Including covered
loans: |
|
|
|
|
| Loans at period-end |
|
|
$ 9,814,995 |
$ 8,275,257 |
| Allowance for loan losses as a
percentage of loans at period end |
|
|
1.13% |
1.15% |
| Allowance for credit losses as a
percentage of loans at period end |
|
|
1.15% |
1.19% |
| |
The allowance for credit losses is comprised of the allowance
for loan losses and the allowance for unfunded lending-related
commitments. The allowance for loan losses is a reserve
against loan amounts that are actually funded and outstanding while
the allowance for unfunded lending-related commitments relates to
certain amounts that Wintrust is committed to lend but for which
funds have not yet been disbursed. The allowance for unfunded
lending-related commitments (separate liability account) represents
the portion of the provision for credit losses that was associated
with unfunded lending-related commitments. The provision for
credit losses may contain both a component related to funded loans
(provision for loan losses) and a component related to
lending-related commitments (provision for unfunded loan
commitments and letters of credit). Total credit-related
reserves include the credit discounts on the purchased life
insurance premium finance receivables which are netted with the
loan balance. Additionally, on January 1, 2010, in conjunction
with recording the securitization facility on its balance sheet,
the Company established an allowance for loan losses totaling $1.9
million. This addition to the allowance for loan losses is
shown as an other adjustment to the allowance for loan
losses. As of September 30, 2010, there was no allowance for
loan losses for covered loans.
The provision for credit losses totaled $25.5 million for the
third quarter of 2010, $41.3 million in the second quarter of 2010
and $91.2 million for the third quarter of 2009. For the
quarter ended September 30, 2010, net charge-offs, excluding
covered loans, totaled $21.4 million compared to $37.9 million in
the second quarter of 2010 and $79.7 million recorded in the third
quarter of 2009. In the second quarter of 2010, a fraud
perpetrated against a number of premium finance companies in the
industry, including the property and casualty division of our
premium financing subsidiary, increased both our net charge-offs
and our provision for loan losses by $15.7 million. On a ratio
basis, annualized net charge-offs as a percentage of average loans,
excluding covered loans, were 0.89% in the third quarter of 2010,
1.63% in the second quarter of 2010, and 3.65% in the third quarter
of 2009. Beginning in the third and fourth quarters of 2009, the
Company committed to resolving problem credits as quickly as
possible. Actions taken during this time increased OREO, net
charge-offs and the provision for loan losses expenses required to
maintain an appropriate level of reserves. The third quarter
of 2010 amounts recorded for both net charge-offs and provision for
credit losses reflect a continuation of the Company's commitment to
maintain a low level of non-performing assets.
Management believes the allowance for loan losses is appropriate
to provide for inherent losses in the portfolio. There can be
no assurances however, that future losses will not exceed the
amounts provided for, thereby affecting future results of
operations. The amount of future additions to the allowance
for loan losses will be dependent upon management's assessment of
the appropriateness of the allowance based on its evaluation of
economic conditions, changes in real estate values, interest rates,
the regulatory environment, the level of past-due and
non-performing loans, and other factors. The increase from the
end of the prior quarter reflects the continued economic weaknesses
in the Company's markets and is the result of an individual review
of a significant number of individual credits as well as the
overall risk factors impacting certain types of credits,
specifically credits with residential development collateral
valuation exposure.
The table below shows the aging of the Company's loan portfolio
at September 30, 2010:
| |
| As of September 30,
2010 |
|
|
|
|
|
|
| (Dollars in thousands) |
Nonaccrual |
90+ days and still
accruing |
60-89 days past
due |
30-59 days past
due |
Current |
Total Loans |
| Loan Balances: |
|
|
|
|
|
|
| Commercial |
$ 19,444 |
$ -- |
$ 5,797 |
$ 16,790 |
$ 1,910,760 |
$ 1,952,791 |
| Commercial real-estate: |
|
-- |
|
|
|
|
| Residential construction |
4,921 |
-- |
3,029 |
3,942 |
91,019 |
102,911 |
| Commercial construction |
11,230 |
-- |
1,665 |
947 |
165,825 |
179,667 |
| Land |
27,134 |
-- |
13,033 |
3,971 |
219,225 |
263,363 |
| Office |
5,745 |
-- |
4,186 |
1,467 |
526,470 |
537,868 |
| Industrial |
3,565 |
-- |
1,014 |
6,658 |
461,319 |
472,556 |
| Retail |
2,084 |
-- |
4,254 |
5,079 |
481,216 |
492,633 |
| Multi-family |
9,339 |
-- |
8,023 |
1,966 |
259,799 |
279,127 |
| Mixed use and other |
19,322 |
-- |
7,373 |
6,916 |
969,762 |
1,003,373 |
| Total commercial real-estate |
83,340 |
-- |
42,577 |
30,946 |
3,174,635 |
3,331,498 |
| Total commercial and commercial
real-estate |
102,784 |
-- |
48,374 |
47,736 |
5,085,395 |
5,284,289 |
| Home equity |
6,144 |
-- |
2,215 |
6,596 |
904,869 |
919,824 |
| Residential real estate |
6,644 |
-- |
718 |
1,765 |
332,882 |
342,009 |
| Premium finance receivables - commercial |
9,082 |
6,853 |
6,723 |
13,409 |
1,287,867 |
1,323,934 |
| Premium finance receivables - life
insurance |
222 |
1,222 |
6,244 |
13,567 |
1,413,739 |
1,434,994 |
| Indirect consumer |
446 |
355 |
210 |
1,420 |
54,144 |
56,575 |
| Consumer and other |
569 |
2 |
356 |
565 |
98,038 |
99,530 |
| Total loans, net of unearned income,
excluding covered loans |
$ 125,891 |
$ 8,432 |
$ 64,840 |
$ 85,058 |
$ 9,176,934 |
$ 9,461,155 |
| Covered loans (1) |
138,953 |
8,021 |
9,820 |
3,078 |
193,968 |
353,840 |
| Total loans, net of unearned income |
$ 264,844 |
$ 16,453 |
$ 74,660 |
$ 88,136 |
$ 9,370,902 |
$ 9,814,995 |
| |
|
|
|
|
|
|
| Aging as a % of Loan
Balance: |
|
|
|
|
|
|
| Commercial |
1.0% |
--% |
0.3% |
0.9% |
97.8% |
100.0% |
| Commercial real-estate: |
|
|
|
|
|
|
| Residential construction |
4.8 |
-- |
2.9 |
3.8 |
88.5 |
100.0 |
| Commercial construction |
6.3 |
-- |
0.9 |
0.5 |
92.3 |
100.0 |
| Land |
10.3 |
-- |
5.0 |
1.5 |
83.2 |
100.0 |
| Office |
1.1 |
-- |
0.8 |
0.3 |
97.8 |
100.0 |
| Industrial |
0.8 |
-- |
0.2 |
1.4 |
97.6 |
100.0 |
| Retail |
0.4 |
-- |
0.9 |
1.0 |
97.7 |
100.0 |
| Multi-family |
3.3 |
-- |
2.9 |
0.7 |
93.1 |
100.0 |
| Mixed use and other |
1.9 |
-- |
0.7 |
0.7 |
96.7 |
100.0 |
| Total commercial real-estate |
2.5 |
-- |
1.3 |
0.9 |
95.3 |
100.0 |
| Total commercial and commercial
real-estate |
2.0 |
-- |
0.9 |
0.9 |
96.2 |
100.0 |
| Home equity |
0.7 |
-- |
0.2 |
0.7 |
98.4 |
100.0 |
| Residential real estate |
1.9 |
-- |
0.2 |
0.6 |
97.3 |
100.0 |
| Premium finance receivables - commercial |
0.7 |
0.5 |
0.5 |
1.0 |
97.3 |
100.0 |
| Premium finance receivables - life
insurance |
0.0 |
0.1 |
0.4 |
1.0 |
98.5 |
100.0 |
| Indirect consumer |
0.8 |
0.6 |
0.4 |
2.5 |
95.7 |
100.0 |
| Consumer and other |
0.6 |
0.0 |
0.3 |
0.6 |
98.5 |
100.0 |
| Total loans, net of unearned income,
excluding covered loans |
1.3% |
0.1% |
0.7% |
0.9% |
97.0% |
100.0% |
| Covered loans (1) |
39.3 |
2.2 |
2.8 |
0.9 |
54.8 |
100.0 |
| Total loans, net of unearned income |
2.7% |
0.2% |
0.7% |
0.9% |
95.5% |
100.0% |
| |
|
|
|
|
|
|
| (1) Covered loans are subject to
a loss sharing agreement with the FDIC whereby the Company is
indemnified against the majority of any losses incurred related to
these loans. |
|
|
|
|
|
|
| |
As of September 30, 2010, only $64.8 million of all loans,
excluding covered loans, or 0.7%, were 60 to 89 days past due and
$85.1 million, or 0.9%, were 30 to 59 days (or one payment) past
due. As of June 30, 2010, only $50.3 million of all loans,
excluding covered loans, or 0.5%, were 60 to 89 days past due and
only $75.2 million, or 0.8%, were 30 to 59 days (or one payment)
past due. The majority of the commercial and commercial real
estate loans shown as 60 to 89 days and 30 to 59 days past due are
included on the Company's internal problem loan reporting
system. Loans on this system are closely monitored by
management on a monthly basis.
The Company's home equity and residential loan portfolios
continue to exhibit low delinquency ratios. Home equity loans
at September 30, 2010 that are current with regard to the
contractual terms of the loan agreement represent 98.4% of the
total home equity portfolio. Residential real estate loans at
September 30, 2010 that are current with regards to the contractual
terms of the loan agreements comprise 97.3% of total residential
real estate loans outstanding.
The table below shows the aging of the Company's loan portfolio
at June 30, 2010:
| |
| As of June 30, 2010 |
|
|
|
|
|
|
| (Dollars in thousands) |
Nonaccrual |
90+ days and still accruing |
60-89 days past due |
30-59 days past due |
Current |
Total Loans |
| Loan Balances: |
|
|
|
|
|
|
| Commercial |
$ 17,741 |
$ 99 |
$ 8,550 |
$ 5,781 |
$ 1,795,447 |
$ 1,827,618 |
| Commercial real-estate: |
|
|
|
|
|
|
| Residential construction |
15,468 |
-- |
6,166 |
3,035 |
104,793 |
129,462 |
| Commercial construction |
6,140 |
-- |
-- |
2,117 |
179,919 |
188,176 |
| Land |
21,699 |
-- |
5,313 |
8,721 |
233,823 |
269,556 |
| Office |
2,991 |
1,194 |
193 |
8,423 |
522,740 |
535,541 |
| Industrial |
5,540 |
-- |
5,612 |
3,530 |
458,033 |
472,715 |
| Retail |
5,174 |
-- |
1,906 |
4,712 |
472,745 |
484,537 |
| Multi-family |
11,074 |
-- |
421 |
1,498 |
263,888 |
276,881 |
| Mixed use and other |
14,898 |
1,054 |
11,156 |
10,476 |
953,371 |
990,955 |
| Total commercial
real-estate |
82,984 |
2,248 |
30,767 |
42,512 |
3,189,312 |
3,347,823 |
| Total commercial and commercial
real-estate |
100,725 |
2,347 |
39,317 |
48,293 |
4,984,759 |
5,175,441 |
| Home equity |
7,149 |
-- |
1,063 |
4,253 |
909,840 |
922,305 |
| Residential real estate |
4,436 |
-- |
1,379 |
2,489 |
324,369 |
332,673 |
| Premium finance receivables - commercial |
11,389 |
6,350 |
3,938 |
9,944 |
1,315,364 |
1,346,985 |
| Premium finance receivables - life
insurance |
-- |
1,923 |
3,960 |
7,712 |
1,365,062 |
1,378,657 |
| Indirect consumer |
438 |
579 |
204 |
1,453 |
66,337 |
69,011 |
| Consumer and other |
62 |
3 |
438 |
1,021 |
97,567 |
99,091 |
| Total loans, net of unearned
income, excluding covered loans |
$ 124,199 |
$ 11,202 |
$ 50,299 |
$ 75,165 |
$ 9,063,298 |
$ 9,324,163 |
| Covered loans (1) |
$ 104,606 |
$ 2 |
$ 9,881 |
$ 9,039 |
$ 152,035 |
$ 275,563 |
| Total loans, net of unearned
income |
$ 228,805 |
$ 11,204 |
$ 60,180 |
$ 84,204 |
$ 9,215,333 |
$ 9,599,726 |
| |
|
|
|
|
|
|
| Aging as a % of Loan
Balance: |
|
|
|
|
|
|
| Commercial |
1.0% |
--% |
0.5% |
0.3% |
98.2% |
100.0% |
| Commercial real-estate: |
|
|
|
|
|
|
| Residential construction |
11.9 |
-- |
4.8 |
2.3 |
81.0 |
100.0 |
| Commercial construction |
3.3 |
-- |
-- |
1.1 |
95.6 |
100.0 |
| Land |
8.0 |
-- |
2.0 |
3.2 |
86.8 |
100.0 |
| Office |
0.6 |
0.2 |
-- |
1.6 |
97.6 |
100.0 |
| Industrial |
1.2 |
-- |
1.2 |
0.7 |
96.9 |
100.0 |
| Retail |
1.1 |
-- |
0.4 |
1.0 |
97.5 |
100.0 |
| Multi-family |
4.0 |
-- |
0.2 |
0.5 |
95.3 |
100.0 |
| Mixed use and other |
1.5 |
0.1 |
1.1 |
1.1 |
96.2 |
100.0 |
| Total commercial
real-estate |
2.5 |
0.1 |
0.9 |
1.3 |
95.2 |
100.0 |
| Total commercial and commercial
real-estate |
1.9 |
-- |
0.8 |
0.9 |
96.4 |
100.0 |
| Home equity |
0.8 |
-- |
0.1 |
0.5 |
98.6 |
100.0 |
| Residential real estate |
1.3 |
-- |
0.4 |
0.7 |
97.6 |
100.0 |
| Premium finance receivables - commercial |
0.8 |
0.5 |
0.3 |
0.7 |
97.7 |
100.0 |
| Premium finance receivables - life
insurance |
-- |
0.1 |
0.3 |
0.6 |
99.0 |
100.0 |
| Indirect consumer |
0.6 |
0.8 |
0.3 |
2.1 |
96.2 |
100.0 |
| Consumer and other |
0.1 |
-- |
0.4 |
1.0 |
98.5 |
100.0 |
| Total loans, net of unearned income,
excluding covered loans |
1.3% |
0.1% |
0.5% |
0.8% |
97.3% |
100.0% |
| Covered loans (1) |
38.0 |
-- |
3.6 |
3.3 |
55.1 |
100.0 |
| Total loans, net of unearned income |
2.4% |
0.1% |
0.6% |
0.9% |
96.0% |
100.0% |
| |
|
|
|
|
|
|
| (1) Covered loans are subject to
a loss sharing agreement with the FDIC whereby the Company is
indemnified against the majority of any losses incurred related to
these loans. |
| |
The ratio of non-performing commercial premium finance
receivables fluctuates throughout the year due to the nature and
timing of canceled account collections from insurance
carriers. Due to the nature of collateral for commercial
premium finance receivables, it customarily takes 60-150 days to
convert the collateral into cash. Accordingly, the level of
non-performing commercial premium finance receivables is not
necessarily indicative of the loss inherent in the
portfolio. In the event of default, Wintrust has the power to
cancel the insurance policy and collect the unearned portion of the
premium from the insurance carrier. In the event of
cancellation, the cash returned in payment of the unearned premium
by the insurer should generally be sufficient to cover the
receivable balance, the interest and other charges due. Due to
notification requirements and processing time by most insurance
carriers, many receivables will become delinquent beyond 90 days
while the insurer is processing the return of the unearned
premium. Management continues to accrue interest until
maturity as the unearned premium is ordinarily sufficient to
pay-off the outstanding balance and contractual interest due.
Non-performing Loans, excluding covered loans
The following table sets forth Wintrust's non-performing loans,
excluding covered loans, at the dates indicated.
|
|
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
December 31, 2009 |
September 30, 2009 |
| |
|
|
|
|
| Loans past due greater than 90 days
and still accruing: |
|
|
|
|
| Commercial |
$ -- |
$ 99 |
$ 561 |
$ 758 |
| Commercial real-estate |
-- |
2,248 |
-- |
22,619 |
| Home equity |
-- |
-- |
-- |
100 |
| Residential real-estate |
-- |
-- |
412 |
1,172 |
| Premium finance receivables -
commercial |
6,853 |
6,350 |
6,271 |
11,714 |
| Premium finance receivables -
life insurance |
1,222 |
1,923 |
-- |
-- |
| Indirect consumer |
355 |
579 |
461 |
549 |
| Consumer and other |
2 |
3 |
95 |
25 |
| Total past due greater than 90
days and still accruing |
8,432 |
11,202 |
7,800 |
36,937 |
| |
|
|
|
|
| Non-accrual loans: |
|
|
|
|
| Commercial |
19,444 |
17,741 |
16,509 |
19,035 |
| Commercial real-estate |
83,340 |
82,984 |
80,639 |
147,691 |
| Home equity |
6,144 |
7,149 |
8,883 |
6,808 |
| Residential real-estate |
6,644 |
4,436 |
3,779 |
4,077 |
| Premium finance receivables -
commercial |
9,082 |
11,389 |
11,878 |
16,093 |
| Premium finance receivables -
life insurance |
222 |
-- |
704 |
-- |
| Indirect consumer |
446 |
438 |
995 |
736 |
| Consumer and other |
569 |
62 |
617 |
282 |
| Total non-accrual |
125,891 |
124,199 |
124,004 |
194,722 |
| |
|
|
|
|
| Total non-performing
loans: |
|
|
|
|
| Commercial |
19,444 |
17,840 |
17,070 |
19,793 |
| Commercial real-estate |
83,340 |
85,232 |
80,639 |
170,310 |
| Home equity |
6,144 |
7,149 |
8,883 |
6,908 |
| Residential real-estate |
6,644 |
4,436 |
4,191 |
5,249 |
| Premium finance receivables -
commercial |
15,935 |
17,739 |
18,149 |
27,807 |
| Premium finance receivables - life
insurance |
1,444 |
1,923 |
704 |
-- |
| Indirect consumer |
801 |
1,017 |
1,456 |
1,285 |
| Consumer and other |
571 |
65 |
712 |
307 |
| Total non-performing |
$ 134,323 |
$ 135,401 |
$ 131,804 |
$ 231,659 |
| |
|
|
|
|
| Total non-performing loans by
category as a percent of its own respective category's period-end
balance: |
|
|
|
|
| Commercial |
1.00% |
0.98% |
0.98% |
1.20% |
| Commercial real-estate |
2.50 |
2.55 |
2.45 |
5.02 |
| Home equity |
0.67 |
0.78 |
0.95 |
0.74 |
| Residential real-estate |
1.94 |
1.33 |
1.37 |
1.87 |
| Premium finance receivables -
commercial |
1.20 |
1.32 |
2.49 |
3.70 |
| Premium finance receivables - life
insurance |
0.10 |
0.14 |
0.06 |
-- |
| Indirect consumer |
1.42 |
1.47 |
1.48 |
1.11 |
| Consumer and other |
0.57 |
0.07 |
0.65 |
0.26 |
| Total loans, net of unearned
income |
1.42% |
1.45% |
1.57% |
2.80% |
| |
|
|
|
|
| Allowance for loan
losses as a percentage total non-performing loans |
82.21% |
78.69% |
74.56% |
41.05% |
| |
Non-performing Commercial and Commercial Real Estate
The commercial non-performing loan category totaled $19.4
million as of September 30, 2010 compared to $17.8 million as of
June 30, 2010 and $19.8 million as of September 30, 2009. The
commercial real estate non-performing loan category totaled $83.3
million as of September 30, 2010 compared to $85.2 million as of
June 30, 2010 and $170.3 million as of September 30,
2009.
Management is pursuing the resolution of all credits in this
category. At this time, management believes reserves are
appropriate to absorb inherent losses that may occur upon the
ultimate resolution of these credits.
Non-performing Residential Real Estate and Home Equity
Non-performing home equity and residential real estate loans
totaled $12.8 million as of September 30, 2010. The balance
increased $631,000 from September 30, 2009 and $1.1 million from
June 30, 2010. The September 30, 2010 non-performing balance
is comprised of $6.7 million of residential real estate (23
individual credits) and $6.1 million of home equity loans (26
individual credits). On average, this is approximately three
non-performing residential real estate loans and home equity loans
per chartered bank within the Company. The Company believes
control and collection of these loans is very manageable. At
this time, management believes reserves are adequate to absorb
inherent losses that may occur upon the ultimate resolution of
these credits.
Non-performing Commercial Premium Finance Receivables
The table below presents the level of non-performing property
and casualty premium finance receivables as of September 30, 2010
and 2009, and the amount of net charge-offs for the quarters then
ended.
|
|
| (Dollars in thousands) |
September 30,
2010 |
September 30, 2009 |
| Non-performing premium finance receivables -
commercial |
$ 15,935 |
$ 27,807 |
| - as a percent of premium finance
receivables - commercial outstanding |
1.20% |
3.70% |
| |
|
|
| Net charge-offs of premium finance
receivables - commercial |
$ 1,285 |
$ 2,317 |
| - annualized as a percent of average
premium finance receivables - commercial |
0.39% |
0.74% |
| |
Fluctuations in this category may occur due to timing and nature
of account collections from insurance carriers. The Company's
underwriting standards, regardless of the condition of the economy,
have remained consistent. We anticipate that net charge-offs
and non-performing asset levels in the near term will continue to
be at levels that are within acceptable operating ranges for this
category of loans. Management is comfortable with
administering the collections at this level of non-performing
property and casualty premium finance receivables and believes
reserves are adequate to absorb inherent losses that may occur upon
the ultimate resolution of these credits. In the second
quarter of 2010, a fraud perpetrated against a number of premium
finance companies in the industry, including the property and
casualty division of our premium financing subsidiary, increased
both our net charge-offs and our provision for loan losses by $15.7
million. Excluding the effect of this fraud, net charge-offs of
premium finance receivables would have been $1.8 million for the
second quarter of 2010, or 0.56% of average premium finance
receivables on an annualized basis.
Nonperforming Loans Rollforward
The table below presents a summary of non-performing loans,
excluding covered loans, as of September 30, 2010 and shows the
changes in the balance from June 30, 2010:
|
|
| |
|
| (Dollars in thousands) |
Non-performing Loans |
| Balance at June 30, 2010 |
$ 135,401 |
| Additions, net |
40,539 |
| Payments received |
(17,179) |
| Transfer to OREO |
(10,011) |
| Charge-offs |
(12,212) |
| Net change for niche loans (1) |
(2,215) |
| Balance at September 30,
2010 |
$ 134,323 |
| |
|
| (1) This includes activity
for premium finance receivables, mortgages held for investment by
Wintrust Mortgage and indirect consumer loans. |
Restructured Loans
The table below presents a summary of restructured loans for the
respective period, presented by loan category and accrual
status:
|
|
| |
|
|
|
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
September 30, 2009 |
| Accruing: |
|
|
|
| Commercial |
$ 7,690 |
$ 5,110 |
$ -- |
| Commercial real estate |
65,149 |
46,052 |
-- |
| Residential real estate |
1,121 |
2,591 |
-- |
| Total accrual |
$ 73,960 |
$ 53,753 |
$ -- |
| |
|
|
|
| Non-accrual: (1) |
|
|
|
| Commercial |
$ 3,959 |
$ 3,865 |
$ -- |
| Commercial real estate |
13,812 |
6,827 |
-- |
| Residential real estate |
1,935 |
238 |
-- |
| Total non-accrual |
$ 19,706 |
$ 10,930 |
$ -- |
| |
|
|
|
| Total restructured
loans: |
|
|
|
| Commercial |
$ 11,649 |
$ 8,975 |
$ -- |
| Commercial real estate |
78,961 |
52,879 |
-- |
| Residential real estate |
3,056 |
2,829 |
-- |
| Total restructured loans |
$ 93,666 |
$ 64,683 |
$ -- |
| |
|
|
|
| (1) Included in total non-performing
loans. |
|
|
|
| |
At September 30, 2010, the Company had $93.7 million in loans
with modified terms. The $93.7 million in modified loans
represents 115 credit relationships in which economic concessions
were granted to financially distressed borrowers to better align
the terms of their loans with their current ability to pay. These
actions were taken on a case-by-case basis working with financially
distressed borrowers to find a concession that would assist them in
retaining their businesses or their homes and attempt to keep these
loans in an accruing status for the Company.
Subsequent to its restructuring, any restructured loan with a
below market rate concession that becomes nonaccrual will remain
classified by the Company as a restructured loan for its duration
and will be included in the Company's non-performing
loans. Each restructured loan was reviewed for collateral
impairment at September 30, 2010 and approximately $8.7 million of
collateral impairment was present and appropriately reserved for
through the Company's normal reserving methodology in the Company's
allowance for loan losses. Additionally, none of these loans at
September 30, 2010 had impairment based on the present value of
expected cash flows, thus there was no impact on interest
income.
Other Real Estate Owned
The table below presents a summary of other real estate owned,
excluding covered other real estate owned, as of September 30, 2010
and shows the activity for the respective period and the balance
for each property type:
| |
| |
|
|
|
| |
Three Months Ended |
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
September 30, 2009 |
| Balance at beginning of period |
$ 86,420 |
$ 89,009 |
$ 41,438 |
| Disposals/resolved |
(15,463) |
(15,201) |
(10,408) |
| Transfers in at fair value,
less costs to sell |
8,303 |
16,348 |
17,136 |
| Fair value adjustments |
(2,606) |
(3,736) |
(7,527) |
| Balance at end of period |
$ 76,654 |
$ 86,420 |
$ 40,639 |
| |
|
|
|
| |
Period
End |
| Balance by Property Type |
September 30,
2010 |
June 30, 2010 |
September 30, 2009 |
| Residential real estate |
$ 8,778 |
$ 5,457 |
$ 8,013 |
| Residential real estate development |
22,600 |
27,161 |
23,834 |
| Commercial real estate |
45,276 |
53,802 |
8,792 |
| Total |
$ 76,654 |
$ 86,420 |
$ 40,639 |
| |
WINTRUST SUBSIDIARIES AND LOCATIONS
Wintrust is a financial holding company whose common stock is
traded on the Nasdaq Global Select Market (Nasdaq:WTFC). Its
15 community bank subsidiaries are: Lake Forest Bank &
Trust Company, Hinsdale Bank & Trust Company, North Shore
Community Bank & Trust Company in Wilmette, Libertyville Bank
& Trust Company, Barrington Bank & Trust Company, Crystal
Lake Bank & Trust Company, Northbrook Bank & Trust Company,
Advantage National Bank in Elk Grove Village, Village Bank &
Trust in Arlington Heights, Beverly Bank & Trust Company in
Chicago, Wheaton Bank & Trust Company, State Bank of The Lakes
in Antioch, Old Plank Trail Community Bank, N.A. in New Lenox, St.
Charles Bank & Trust Company and Town Bank in Hartland,
Wisconsin. The banks also operate facilities in Illinois in
Algonquin, Bloomingdale, Buffalo Grove, Cary, Chicago, Clarendon
Hills, Deerfield, Downers Grove, Frankfort, Geneva, Glencoe, Glen
Ellyn, Gurnee, Grayslake, Highland Park, Highwood, Hoffman Estates,
Island Lake, Lake Bluff, Lake Villa, Lincoln Park, Lindenhurst,
McHenry, Mokena, Mount Prospect, Mundelein, Naperville, North
Chicago, Northfield, Palatine, Prospect Heights, Ravenswood,
Ravinia, Riverside, Roselle, Sauganash, Skokie, Spring Grove,
Vernon Hills, Wauconda, Western Springs, Willowbrook and Winnetka,
and in Delafield, Elm Grove, Madison, Wales, Wisconsin.
Additionally, the Company operates various non-bank
subsidiaries. First Insurance Funding Corporation, one of the
largest insurance premium finance companies operating in the United
States, serves commercial and life insurance loan customers
throughout the country. Tricom, Inc. of Milwaukee provides
high-yielding, short-term accounts receivable financing and
value-added out-sourced administrative services, such as data
processing of payrolls, billing and cash management services, to
temporary staffing service clients located throughout the United
States. Wintrust Mortgage Corporation engages primarily in the
origination and purchase of residential mortgages for sale into the
thirdary market through origination offices located throughout the
United States. Loans are also originated nationwide through
relationships with wholesale and correspondent offices. Wayne
Hummer Investments, LLC is a broker-dealer providing a full range
of private client and brokerage services to clients and
correspondent banks located primarily in the Midwest. Wintrust
Capital Management provides money management services and advisory
services to individual accounts. Advanced Investment Partners,
LLC is an investment management firm specializing in the active
management of domestic equity investment strategies. The
Chicago Trust Company, a trust subsidiary, allows Wintrust to
service customers' trust and investment needs at each banking
location. Wintrust Information Technology Services Company
provides information technology support, item capture and statement
preparation services to the Wintrust subsidiaries.
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," "possible," "point," "will," "may," "should,"
"would" and "could." Forward-looking statements and information are
not historical facts, are premised on many factors and assumptions,
and represent only management's expectations, estimates and
projections regarding future events. Similarly, these
statements are not guarantees of future performance and involve
certain risks and uncertainties that are difficult to predict,
which may include, but are not limited to, those listed below and
the Risk Factors discussed under Item 1A of the Company's 2009
Annual Report on Form 10-K and in any of the Company's subsequent
SEC filings. The Company intends such forward-looking
statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, and is including this statement for
purposes of invoking these safe harbor provisions. Such
forward-looking statements may be deemed to include, among other
things, statements relating to the Company's future financial
performance, the performance of its loan portfolio, the expected
amount of future credit reserves and charge-offs, delinquency
trends, growth plans, regulatory developments, securities that the
Company may offer from time to time, and management's long-term
performance goals, as well as statements relating to the
anticipated effects on financial condition and results of
operations from expected developments or events, the Company's
business and growth strategies, including future acquisitions of
banks, specialty finance or wealth management businesses, internal
growth and plans to form additional de novo banks or branch
offices. Actual results could differ materially from those
addressed in the forward-looking statements as a result of numerous
factors, including the following:
- 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 defaults and losses on the Company's loan
portfolio, which may require further increases in its allowance for
credit losses;
- estimates of fair value of certain of the Company's assets and
liabilities, which could change in value significantly from period
to period;
- changes in the level and volatility of interest rates, the
capital markets and other market indices that may affect, among
other things, the Company's liquidity and the value of its assets
and liabilities;
- a decrease in the Company's regulatory capital ratios,
including as a result of further declines in the value of its loan
portfolios, or otherwise;
- effects resulting from the Company's participation in the
Capital Purchase Program, including restrictions on dividends and
executive compensation practices, as well as any future
restrictions that may become applicable to the Company;
- legislative or regulatory changes, particularly changes in
regulation of financial services companies and/or the products and
services offered by financial services companies;
- increases in the Company's FDIC insurance premiums, or the
collection of special assessments by the FDIC;
- 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 business;
- the Company's ability to comply with covenants under its
securitization facility and credit facility;
- credit downgrades among commercial and life insurance providers
that could negatively affect the value of collateral securing the
Company's premium finance loans;
- any negative perception of the Company's reputation or
financial strength;
- the loss of customers as a result of technological changes
allowing consumers to complete their financial transactions without
the use of a bank;
- the ability of the Company to attract and retain senior
management experienced in the banking and financial services
industries;
- failure to identify and complete favorable acquisitions in the
future, or unexpected difficulties or developments related to the
integration of recent acquisitions, including with respect to any
FDIC-assisted acquisitions;
- unexpected difficulties or unanticipated developments related
to the Company's strategy of de novo bank formations and openings,
which typically require over 13 months of operations before
becoming profitable due to the impact of organizational and
overhead expenses, the startup phase of generating deposits and the
time lag typically involved in redeploying deposits into
attractively priced loans and other higher yielding earning
assets;
- changes in accounting standards, rules and interpretations and
the impact on the Corporation's financial statements;
- significant litigation involving the Company; and
- the ability of the Company to receive dividends from its
subsidiaries.
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 only as of the date the statement was made or
as of such date that may be referenced within the
statement. The Company undertakes no obligation to release
revisions to these forward-looking statements or reflect events or
circumstances after the date of this press release. Persons
are advised, however, to consult further disclosures management
makes on related subjects in its reports filed with the Securities
and Exchange Commission and in its press releases.
CONFERENCE CALL, WEB CAST AND REPLAY
The Company will hold a conference call at 1:00 p.m. (CT)
Wednesday, October 27, 2010 regarding third quarter 2010
results. Individuals interested in listening should call (800)
514-8478 and enter Conference ID #16430168. A simultaneous
audio-only web cast and replay of the conference call may be
accessed via the Company's web site at (http://www.wintrust.com),
Investor News and Events, Presentations & Conference Calls. The
text of the third quarter 2010 earnings press release will be
available on the home page of the Company's website at
(http://www.wintrust.com) and at the Investor News and Events,
Press Releases link on its website.
WINTRUST FINANCIAL
CORPORATION
Supplemental Financial
Information 5 Quarter Trends
| WINTRUST FINANCIAL CORPORATION -
Supplemental Financial Information |
|
|
|
|
|
| Selected Financial Highlights - 5
Quarter Trends |
|
| (Dollars in thousands, except
per share data) |
Three Months Ended |
| |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Selected Financial Condition Data (at
end of period): |
|
|
|
|
|
| Total assets |
$ 14,100,368 |
$ 13,708,560 |
$ 12,839,978 |
$ 12,215,620 |
$ 12,136,021 |
| Total loans, excluding covered loans |
9,461,155 |
9,324,163 |
9,070,562 |
8,411,771 |
8,275,257 |
| Total deposits |
10,962,239 |
10,624,742 |
9,724,870 |
9,917,074 |
9,847,163 |
| Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
249,493 |
249,493 |
| Total shareholders' equity |
1,398,912 |
1,384,736 |
1,364,832 |
1,138,639 |
1,106,082 |
| Selected Statements of Income
Data: |
|
|
|
|
|
| Net interest income |
102,980 |
104,314 |
95,865 |
86,934 |
87,663 |
| Net revenue (1) |
157,636 |
154,750 |
138,472 |
172,022 |
238,343 |
| Core pre-tax earnings (2) |
47,572 |
47,649 |
42,064 |
39,905 |
37,137 |
| Net income |
20,098 |
13,009 |
16,017 |
28,167 |
31,995 |
| Net income per common share – Basic |
$ 0.49 |
$ 0.26 |
$ 0.43 |
$ 0.96 |
$ 1.14 |
| Net income per common share –
Diluted |
$ 0.47 |
$ 0.25 |
$ 0.41 |
$ 0.90 |
$ 1.07 |
| Selected Financial Ratios and Other
Data: |
|
|
|
|
|
| Performance Ratios: |
|
|
|
|
|
| Net interest margin (2) |
3.22% |
3.43% |
3.38% |
3.10% |
3.25% |
| Non-interest income to average assets |
1.56% |
1.51% |
1.37% |
2.77% |
5.07% |
| Non-interest expense to average
assets |
2.85% |
2.78% |
2.70% |
2.94% |
3.11% |
| Net overhead ratio (3) |
1.28% |
1.26% |
1.33% |
0.17% |
(1.95)% |
| Efficiency ratio (2) (4) |
67.01% |
59.72% |
60.59% |
52.54% |
38.69% |
| Return on average assets |
0.57% |
0.39% |
0.52% |
0.92% |
1.08% |
| Return on average common equity |
5.44% |
2.98% |
4.93% |
10.97% |
13.79% |
| Average total assets |
$ 14,015,757 |
$ 13,390,537 |
$ 12,590,817 |
$ 12,189,096 |
$ 11,797,520 |
| Average total shareholders' equity |
1,391,507 |
1,371,689 |
1,196,191 |
1,126,594 |
1,070,095 |
| Average loans to average deposits ratio |
88.7% |
91.0% |
94.6% |
86.9% |
90.5% |
| Average loans to average deposits ratio
(including covered loans) |
91.7 |
93.0 |
94.6 |
86.9 |
90.5 |
| Common Share Data at end of
period: |
|
|
|
|
|
| Market price per common share |
$ 32.41 |
$ 33.34 |
$ 37.21 |
$ 30.79 |
$ 27.96 |
| Book value per common share |
$ 35.70 |
$ 35.33 |
$ 34.76 |
$ 35.27 |
$ 34.10 |
| Common shares outstanding |
31,143,740 |
31,084,298 |
31,044,449 |
24,206,819 |
24,103,068 |
| Other Data at end of period:(9) |
|
|
|
|
|
| Leverage Ratio (5) |
10.0% |
10.2% |
10.8% |
9.3% |
9.3% |
| Tier 1 Capital to risk-weighted assets
(5) |
12.7% |
13.0% |
13.4% |
11.0% |
10.8% |
| Total capital to risk-weighted assets
(5) |
14.1% |
14.3% |
14.9% |
12.4% |
12.3% |
| Tangible Common Equity ratio (TCE) (8) |
5.9% |
6.0% |
6.3% |
4.7% |
4.5% |
| Allowance for credit losses (6) |
$ 112,807 |
$ 108,716 |
$ 106,050 |
$ 101,831 |
$ 98,225 |
| Credit discounts on purchased premium finance
receivables - life insurance (7) |
26,399 |
28,216 |
33,990 |
37,323 |
36,195 |
| Non-performing loans |
134,323 |
135,401 |
140,960 |
131,804 |
231,659 |
| Allowance for credit losses to total loans
(6) |
1.19% |
1.17% |
1.17% |
1.21% |
1.19% |
| Non-performing loans to total loans |
1.42% |
1.45% |
1.55% |
1.57% |
2.80% |
| Number of: |
|
|
|
|
|
| Bank subsidiaries |
15 |
15 |
15 |
15 |
15 |
| Non-bank subsidiaries |
8 |
8 |
8 |
8 |
8 |
| Banking
offices |
85 |
85 |
78 |
78 |
78 |
| (1) Net revenue includes net
interest income and non-interest income |
| (2) See "Supplemental Financial
Measures/Ratios" for additional information on this performance
measure/ratio. |
| (3) The net overhead ratio is
calculated by netting total non-interest expense and total
non-interest income, annualizing this amount, and dividing by that
period's total average assets. A lower ratio indicates a
higher degree of efficiency. |
| (4) The efficiency ratio is
calculated by dividing total non-interest expense by tax-equivalent
net revenue (less securities gains or losses). A lower ratio
indicates more efficient revenue generation. |
| (5) Capital ratios for current
quarter-end are estimated. |
| (6) The allowance for credit
losses includes both the allowance for loan losses and the
allowance for unfunded lending-related commitments. |
| (7) Represents the credit
discounts on purchased life insurance premium finance loans. |
| (8) Total shareholders' equity
minus preferred stock and total intangible assets divided by total
assets minus total intangible assets |
| (9) Asset quality ratios exclude
covered loans. |
| |
|
|
|
|
|
| WINTRUST FINANCIAL CORPORATION -
SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
|
|
| Consolidated Statements of Condition
- 5 Quarter Trends |
|
|
|
|
|
| |
|
|
|
|
|
| (In thousands) |
(Unaudited) September 30,
2010 |
(Unaudited) June 30, 2010 |
(Unaudited) March 31, 2010 |
December 31, 2009 |
(Unaudited) September 30, 2009 |
| Assets |
|
|
|
|
|
| Cash and due from banks |
$ 155,067 |
$ 123,712 |
$ 106,501 |
$ 135,133 |
$ 128,898 |
| Federal funds sold and securities purchased
under resale agreements |
88,913 |
28,664 |
15,393 |
23,483 |
22,863 |
| Interest-bearing deposits with other
banks |
1,224,584 |
1,110,123 |
1,222,323 |
1,025,663 |
1,168,362 |
| Available-for-sale securities, at fair
value |
1,324,179 |
1,418,035 |
1,205,919 |
1,255,066 |
1,362,359 |
| Trading account securities |
4,935 |
38,261 |
39,938 |
33,774 |
29,204 |
| Brokerage customer receivables |
25,442 |
24,291 |
20,978 |
20,871 |
19,441 |
| Federal Home Loan Bank and Federal Reserve
Bank stock, at cost |
80,445 |
79,300 |
74,001 |
73,749 |
71,889 |
| Loans held-for-sale |
320,440 |
237,981 |
156,049 |
275,715 |
193,255 |
| Loans, net of unearned income, excluding
covered loans |
9,461,155 |
9,324,163 |
9,070,562 |
8,411,771 |
8,275,257 |
| Covered loans |
353,840 |
275,563 |
-- |
-- |
-- |
| Total loans |
9,814,995 |
9,599,726 |
9,070,562 |
8,411,771 |
8,275,257 |
|
Less: Allowance for loan losses |
110,432 |
106,547 |
102,397 |
98,277 |
95,096 |
| Net loans |
9,704,563 |
9,493,179 |
8,968,165 |
8,313,494 |
8,180,161 |
| Premises and equipment, net |
353,445 |
346,806 |
348,182 |
350,345 |
352,890 |
| FDIC indemnification asset |
161,640 |
114,102 |
-- |
-- |
-- |
| Accrued interest receivable and other
assets |
365,496 |
374,172 |
363,676 |
416,678 |
315,806 |
| Trade date securities receivable |
-- |
28,634 |
27,850 |
-- |
-- |
| Goodwill |
278,025 |
278,025 |
278,025 |
278,025 |
276,525 |
| Other intangible assets |
13,194 |
13,275 |
12,978 |
13,624 |
14,368 |
| Total
assets |
$ 14,100,368 |
$ 13,708,560 |
$ 12,839,978 |
$ 12,215,620 |
$ 12,136,021 |
| |
|
|
|
|
|
| Liabilities and Shareholders'
Equity |
|
|
|
|
|
| Deposits: |
|
|
|
|
|
| Non-interest bearing |
$ 1,042,730 |
$ 953,814 |
$ 871,830 |
$ 864,306 |
$ 841,668 |
| Interest bearing |
9,919,509 |
9,670,928 |
8,853,040 |
9,052,768 |
9,005,495 |
| Total deposits |
10,962,239 |
10,624,742 |
9,724,870 |
9,917,074 |
9,847,163 |
| Notes payable |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
| Federal Home Loan Bank advances |
414,832 |
415,571 |
421,775 |
430,987 |
433,983 |
| Other borrowings |
241,522 |
218,424 |
218,079 |
247,437 |
252,071 |
| Secured borrowings - owed to
securitization investors |
600,000 |
600,000 |
600,000 |
-- |
-- |
| Subordinated notes |
55,000 |
55,000 |
60,000 |
60,000 |
65,000 |
| Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
249,493 |
249,493 |
| Trade date securities payable |
2,045 |
200 |
62,017 |
-- |
-- |
| Accrued interest
payable and other liabilities |
175,325 |
159,394 |
137,912 |
170,990 |
181,229 |
| Total liabilities |
12,701,456 |
12,323,824 |
11,475,146 |
11,076,981 |
11,029,939 |
| |
|
|
|
|
|
| Shareholders' Equity: |
|
|
|
|
|
| Preferred stock |
287,234 |
286,460 |
285,642 |
284,824 |
284,061 |
| Common stock |
31,145 |
31,084 |
31,044 |
27,079 |
26,965 |
| Surplus |
682,318 |
680,261 |
677,090 |
589,939 |
580,988 |
| Treasury stock |
(51) |
(4) |
-- |
(122,733) |
(122,437) |
| Retained earnings |
394,323 |
381,969 |
373,903 |
366,152 |
342,873 |
| Accumulated other
comprehensive income (loss) |
3,943 |
4,966 |
(2,847) |
(6,622) |
(6,368) |
| Total shareholders'
equity |
1,398,912 |
1,384,736 |
1,364,832 |
1,138,639 |
1,106,082 |
| Total liabilities
and shareholders' equity |
$ 14,100,368 |
$ 13,708,560 |
$ 12,839,978 |
$ 12,215,620 |
$ 12,136,021 |
| |
|
|
|
|
|
| WINTRUST FINANCIAL CORPORATION -
SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
|
|
| Consolidated Statements of Income
(Unaudited) - 5 Quarter Trends |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| (In thousands, except per share
data) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Interest income |
|
|
|
|
|
| Interest and fees on loans |
$ 137,902 |
$ 135,800 |
$ 129,542 |
$ 122,140 |
$ 126,448 |
| Interest bearing deposits with
banks |
1,339 |
1,215 |
1,274 |
1,369 |
778 |
| Federal funds sold and
securities purchased under resale agreements |
35 |
34 |
49 |
38 |
106 |
| Securities |
7,438 |
11,218 |
11,012 |
12,672 |
13,677 |
| Trading account securities |
19 |
343 |
21 |
20 |
7 |
| Brokerage customer
receivables |
180 |
166 |
139 |
143 |
132 |
| Federal Home Loan Bank
and Federal Reserve Bank stock |
488 |
472 |
459 |
447 |
429 |
| Total interest
income |
147,401 |
149,248 |
142,496 |
136,829 |
141,577 |
| Interest expense |
|
|
|
|
|
| Interest on deposits |
31,088 |
31,626 |
33,212 |
38,998 |
42,806 |
| Interest on Federal Home Loan
Bank advances |
4,042 |
4,094 |
4,346 |
4,510 |
4,536 |
| Interest on notes payable and
other borrowings |
1,411 |
1,439 |
1,462 |
1,663 |
1,779 |
| Interest on secured borrowings
- owed to securitization investors |
3,167 |
3,115 |
2,995 |
-- |
-- |
| Interest on subordinated
notes |
265 |
256 |
241 |
286 |
333 |
| Interest on junior
subordinated debentures |
4,448 |
4,404 |
4,375 |
4,438 |
4,460 |
| Total interest
expense |
44,421 |
44,934 |
46,631 |
49,895 |
53,914 |
| Net interest income |
102,980 |
104,314 |
95,865 |
86,934 |
87,663 |
| Provision for credit
losses |
25,528 |
41,297 |
29,044 |
38,603 |
91,193 |
| Net interest income after provision for
credit losses |
77,452 |
63,017 |
66,821 |
48,331 |
(3,530) |
| Non-interest income |
|
|
|
|
|
| Wealth management |
8,973 |
9,193 |
8,667 |
8,047 |
7,501 |
| Mortgage banking |
20,980 |
7,985 |
9,727 |
16,495 |
13,204 |
| Service charges on deposit
accounts |
3,384 |
3,371 |
3,332 |
3,437 |
3,447 |
| Gain on sales of commercial
premium finance receivables |
-- |
-- |
-- |
4,429 |
3,629 |
| Gains (losses) on
available-for-sale securities, net |
9,235 |
46 |
392 |
642 |
(412) |
| Gain on bargain purchases |
6,593 |
26,494 |
10,894 |
42,951 |
113,062 |
| Trading gains (losses) |
712 |
(1,538) |
5,973 |
4,437 |
6,236 |
| Other |
4,779 |
4,885 |
3,622 |
4,650 |
4,013 |
| Total non-interest
income |
54,656 |
50,436 |
42,607 |
85,088 |
150,680 |
| Non-interest expense |
|
|
|
|
|
| Salaries and employee
benefits |
57,014 |
50,649 |
49,072 |
47,955 |
48,088 |
| Equipment |
4,203 |
4,046 |
3,896 |
4,097 |
4,069 |
| Occupancy, net |
6,254 |
6,033 |
6,230 |
6,124 |
5,884 |
| Data processing |
3,891 |
3,669 |
3,407 |
3,404 |
3,226 |
| Advertising and marketing |
1,650 |
1,470 |
1,314 |
1,366 |
1,488 |
| Professional fees |
4,555 |
3,957 |
3,107 |
3,556 |
4,089 |
| Amortization of other
intangible assets |
701 |
674 |
645 |
744 |
677 |
| FDIC insurance |
4,642 |
5,005 |
3,809 |
4,731 |
4,334 |
| OREO expenses, net |
4,767 |
5,843 |
1,337 |
5,293 |
10,243 |
| Other |
12,046 |
11,317 |
11,121 |
13,047 |
10,465 |
| Total non-interest
expense |
99,723 |
92,663 |
83,938 |
90,317 |
92,563 |
| Income before taxes |
32,385 |
20,790 |
25,490 |
43,102 |
54,587 |
| Income tax expense |
12,287 |
7,781 |
9,473 |
14,935 |
22,592 |
| Net income |
$ 20,098 |
$ 13,009 |
$ 16,017 |
$ 28,167 |
$ 31,995 |
| Preferred stock dividends and discount
accretion |
$ 4,943 |
$ 4,943 |
$ 4,943 |
$ 4,888 |
$ 4,668 |
| Net income applicable to common
shares |
$ 15,155 |
$ 8,066 |
$ 11,074 |
$ 23,279 |
$ 27,327 |
| Net income per common share -
Basic |
$ 0.49 |
$ 0.26 |
$ 0.43 |
$ 0.96 |
$ 1.14 |
| Net income per common share -
Diluted |
$ 0.47 |
$ 0.25 |
$ 0.41 |
$ 0.90 |
$ 1.07 |
| Cash dividends declared per
common share |
$ 0.09 |
$ -- |
$ 0.09 |
$ -- |
$ -- |
| Weighted average common shares
outstanding |
31,117 |
31,074 |
25,942 |
24,166 |
24,052 |
| Dilutive potential common
shares |
988 |
1,267 |
1,139 |
2,845 |
2,493 |
| Average common shares and dilutive
common shares |
32,105 |
32,341 |
27,081 |
27,011 |
26,545 |
| |
|
|
|
|
|
| WINTRUST FINANCIAL CORPORATION -
SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
|
|
| Period End Loan Balances - 5 Quarter
Trends |
|
|
|
|
|
| |
|
|
|
|
|
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Balance: |
|
|
|
|
|
| Commercial |
$ 1,952,791 |
$ 1,827,618 |
$ 1,749,895 |
$ 1,743,208 |
$ 1,643,721 |
| Commercial real estate |
3,331,498 |
3,347,823 |
3,333,157 |
3,296,698 |
3,392,138 |
| Home equity |
919,824 |
922,305 |
924,993 |
930,482 |
928,548 |
| Residential real-estate |
342,009 |
332,673 |
322,984 |
306,296 |
281,151 |
| Premium finance receivables -
commercial |
1,323,934 |
1,346,985 |
1,317,822 |
730,144 |
752,032 |
| Premium finance receivables -
life insurance |
1,434,994 |
1,378,657 |
1,233,573 |
1,197,893 |
1,045,653 |
| Indirect consumer (1) |
56,575 |
69,011 |
83,136 |
98,134 |
115,528 |
| Consumer and other |
99,530 |
99,091 |
105,002 |
108,916 |
116,486 |
| |
|
|
|
|
|
| Total loans, net of unearned income,
excluding covered loans |
$ 9,461,155 |
$ 9,324,163 |
$ 9,070,562 |
$ 8,411,771 |
$ 8,275,257 |
| Covered loans |
$ 353,840 |
$ 275,563 |
$ -- |
$ -- |
$ -- |
| Total loans, net of unearned income |
$ 9,814,995 |
$ 9,599,726 |
$ 9,070,562 |
$ 8,411,771 |
$ 8,275,257 |
| |
|
|
|
|
|
| Mix: |
|
|
|
|
|
| Commercial |
20% |
19% |
19% |
21% |
20% |
| Commercial real estate |
34 |
35 |
37 |
39 |
41 |
| Home equity |
9 |
10 |
10 |
11 |
11 |
| Residential real-estate |
3 |
3 |
4 |
4 |
4 |
| Premium finance receivables -
commercial |
13 |
14 |
14 |
9 |
9 |
| Premium finance receivables -
life insurance |
15 |
14 |
14 |
14 |
13 |
| Indirect consumer (1) |
1 |
1 |
1 |
1 |
1 |
| Consumer and other |
1 |
1 |
1 |
1 |
1 |
| |
|
|
|
|
|
| Total loans, net of unearned
income, excluding covered loans |
96% |
97% |
100% |
100% |
100% |
| Covered loans |
4 |
3 |
-- |
-- |
-- |
| Total loans, net of unearned
income |
100% |
100% |
100% |
100% |
100% |
| |
|
|
|
|
|
| (1) Includes autos, boats,
snowmobiles and other indirect consumer loans. |
| |
| |
|
|
|
|
|
| WINTRUST FINANCIAL CORPORATION -
SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
|
|
| Period End Deposits Balances - 5
Quarter Trends |
|
|
|
|
|
| |
|
|
|
|
|
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Balance: |
|
|
|
|
|
| Non-interest bearing |
$ 1,042,730 |
$ 953,814 |
$ 871,830 |
$ 864,306 |
$ 841,668 |
| NOW |
1,551,749 |
1,560,733 |
1,448,857 |
1,415,856 |
1,245,689 |
| Wealth Management deposits (1) |
710,435 |
694,830 |
690,919 |
971,113 |
935,740 |
| Money Market |
1,746,168 |
1,722,729 |
1,586,830 |
1,534,632 |
1,468,228 |
| Savings |
713,823 |
594,753 |
558,770 |
561,916 |
513,239 |
| Time certificates of deposit |
5,197,334 |
5,097,883 |
4,567,664 |
4,569,251 |
4,842,599 |
| Total deposits |
$ 10,962,239 |
$ 10,624,742 |
$ 9,724,870 |
$ 9,917,074 |
$ 9,847,163 |
| |
|
|
|
|
|
| Mix: |
|
|
|
|
|
| Non-interest bearing |
10% |
9% |
9% |
9% |
9% |
| NOW |
14 |
15 |
15 |
14 |
13 |
| Wealth Management deposits (1) |
6 |
6 |
7 |
10 |
9 |
| Money Market |
16 |
16 |
16 |
15 |
15 |
| Savings |
7 |
6 |
6 |
6 |
5 |
| Time certificates of deposit |
47 |
48 |
47 |
46 |
49 |
| Total deposits |
100% |
100% |
100% |
100% |
100% |
| (1) Represents deposit balances
of the Company's subsidiary banks from brokerage customers of Wayne
Hummer Investments, trust and asset management customers of The
Chicago Trust Company and brokerage customers from unaffiliated
companies which have been placed into deposit accounts of the
Banks. |
| |
| |
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
| Net Interest Margin
(Including Call Option Income) - 5 Quarter Trends |
|
|
| |
Three Months Ended |
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| |
|
|
|
|
|
| Net interest income |
$ 103,396 |
$ 104,775 |
$ 96,311 |
$ 87,448 |
$ 88,178 |
| Call option income |
703 |
169 |
289 |
-- |
-- |
| Net interest income including call option
income |
$ 104,099 |
$ 104,944 |
$ 96,600 |
$ 87,448 |
$ 88,178 |
| |
|
|
|
|
|
| Yield on earning assets |
4.59% |
4.91% |
5.01% |
4.87% |
5.24% |
| Rate on interest-bearing liabilities |
1.55 |
1.65 |
1.82 |
1.98 |
2.18 |
| Rate spread |
3.04% |
3.26% |
3.19% |
2.89% |
3.06% |
| Net free funds contribution |
0.18 |
0.17 |
0.19 |
0.21 |
0.19 |
| Net interest margin |
3.22 |
3.43 |
3.38 |
3.10 |
3.25 |
| Call option income |
0.02 |
0.01 |
0.01 |
-- |
-- |
| Net interest margin including call option
income |
3.24% |
3.44% |
3.39% |
3.10% |
3.25% |
| |
|
|
|
|
|
| |
|
| |
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
| Net Interest Margin
(Including Call Option Income) - YTD Trends |
|
|
|
| |
|
|
|
|
|
| |
Nine Months Ended September 30, |
Years Ended December
31, |
| (Dollars in thousands) |
2010 |
2009 |
2008 |
2007 |
2006 |
| |
|
|
|
|
|
| Net interest income |
$ 304,481 |
$ 314,096 |
$ 247,054 |
$ 264,777 |
$ 250,507 |
| Call option income |
1,162 |
1,998 |
29,024 |
2,628 |
3,157 |
| Net interest income including call option
income |
$ 305,643 |
$ 316,094 |
$ 276,078 |
$ 267,405 |
$ 253,664 |
| |
|
|
|
|
|
| Yield on earning assets |
4.83% |
5.07 % |
5.88% |
7.21% |
6.91% |
| Rate on interest-bearing liabilities |
1.66 |
2.29 |
3.31 |
4.39 |
4.11 |
| Rate spread |
3.17% |
2.78 % |
2.57% |
2.82% |
2.80% |
| Net free funds contribution |
0.17 |
0.23 |
0.24 |
0.29 |
0.30 |
| Net interest margin |
3.34 |
3.01 |
2.81 |
3.11 |
3.10 |
| Call option income |
0.01 |
0.02 |
0.33 |
0.03 |
0.04 |
| Net interest margin including call option
income |
3.35% |
3.03 % |
3.14% |
3.14% |
3.14% |
| |
|
|
|
|
|
| |
|
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
| Quarterly Average Balances - 5
Quarter Trends |
|
|
|
|
|
| |
Three Months Ended |
| (In thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Liquidity management assets |
$ 2,802,964 |
$ 2,613,179 |
$ 2,384,122 |
$ 2,569,584 |
$ 2,078,330 |
| Other earning assets |
34,263 |
62,874 |
26,269 |
26,167 |
24,874 |
| Loans, net of unearned income |
9,603,561 |
9,356,033 |
9,150,078 |
8,604,006 |
8,665,281 |
| Covered loans |
325,751 |
210,030 |
-- |
-- |
-- |
| Total earning assets |
$ 12,766,539 |
$ 12,242,116 |
$ 11,560,469 |
$ 11,199,757 |
$ 10,768,485 |
| Allowance for loan losses |
(113,631) |
(108,764) |
(107,257) |
(97,269) |
(85,300) |
| Cash and due from banks |
154,078 |
137,531 |
113,514 |
124,219 |
109,645 |
| Other assets |
1,208,771 |
1,119,654 |
1,024,091 |
962,389 |
1,004,690 |
| Total assets |
$ 14,015,757 |
$ 13,390,537 |
$ 12,590,817 |
$ 12,189,096 |
$ 11,797,520 |
| |
|
|
|
|
|
| Interest-bearing deposits |
$ 9,823,525 |
$ 9,348,541 |
$ 8,818,012 |
$ 9,016,863 |
$ 8,799,578 |
| Federal Home Loan Bank advances |
414,789 |
417,835 |
429,195 |
432,028 |
434,134 |
| Notes payable and other borrowings |
232,991 |
217,751 |
225,919 |
234,754 |
245,352 |
| Secured borrowings - owed to securitization
investors |
600,000 |
600,000 |
600,000 |
-- |
-- |
| Subordinated notes |
55,000 |
57,198 |
60,000 |
63,261 |
65,000 |
| Junior subordinated notes |
249,493 |
249,493 |
249,493 |
249,493 |
249,493 |
| Total interest-bearing liabilities |
$ 11,375,798 |
$ 10,890,818 |
$ 10,382,619 |
$ 9,996,399 |
$ 9,793,557 |
| Non-interest bearing liabilities |
1,005,170 |
932,046 |
858,875 |
886,988 |
775,202 |
| Other liabilities |
243,282 |
195,984 |
153,132 |
179,115 |
158,666 |
| Equity |
1,391,507 |
1,371,689 |
1,196,191 |
1,126,594 |
1,070,095 |
| Total liabilities and shareholders'
equity |
$ 14,015,757 |
$ 13,390,537 |
$ 12,590,817 |
$ 12,189,096 |
$ 11,797,520 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
| Net Interest Margin - 5 Quarter
Trends |
|
|
|
|
|
| |
Three Months Ended |
| |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Yield earned on: |
|
|
|
|
|
| Liquidity management assets |
1.36% |
2.04% |
2.24% |
2.31% |
2.94% |
| Other earning assets |
2.37 |
3.28 |
2.53 |
2.59 |
2.36 |
| Loans, net of unearned income |
5.54 |
5.71 |
5.75 |
5.64 |
5.79 |
| Covered loans |
4.84 |
5.12 |
-- |
-- |
-- |
| |
4.59% |
4.91% |
5.01% |
4.87% |
5.24% |
| Rate paid on: |
|
|
|
|
|
| Interest-bearing deposits |
1.26 % |
1.36 % |
1.53 % |
1.72 % |
1.93 % |
| Federal Home Loan Bank advances |
3.87 |
3.93 |
4.11 |
4.14 |
4.14 |
| Notes payable and other borrowings |
2.40 |
2.65 |
2.63 |
2.81 |
2.88 |
| Secured borrowings - owed to securitization
investors |
2.09 |
2.08 |
2.02 |
-- |
-- |
| Subordinated notes |
1.89 |
1.77 |
1.60 |
1.77 |
2.01 |
| Junior subordinated notes |
6.98 |
6.98 |
7.01 |
6.96 |
6.99 |
| |
1.55% |
1.65% |
1.82% |
1.98% |
2.18% |
| |
|
|
|
|
|
| Interest rate spread |
3.04% |
3.26% |
3.19% |
2.89% |
3.06% |
| Net free funds/contribution |
0.18% |
0.17% |
0.19% |
0.21% |
0.19% |
| Net interest income/Net interest margin |
3.22% |
3.43% |
3.38% |
3.10% |
3.25% |
| |
|
|
|
|
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
| Non-Interest Income - 5 Quarter
Trends |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| (In thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Brokerage |
$ 5,806 |
$ 5,712 |
$ 5,554 |
$ 5,034 |
$ 4,593 |
| Trust and asset management |
3,167 |
3,481 |
3,113 |
3,013 |
2,908 |
| Total wealth management |
8,973 |
9,193 |
8,667 |
8,047 |
7,501 |
| Mortgage banking |
20,980 |
7,985 |
9,727 |
16,495 |
13,204 |
| Service charges on deposit accounts |
3,384 |
3,371 |
3,332 |
3,437 |
3,447 |
| Gains on sales of premium finance
receivables |
-- |
-- |
-- |
4,429 |
3,629 |
| Gains (losses) on available-for-sale
securities |
9,235 |
46 |
392 |
642 |
(412) |
| Gain on bargain purchases |
6,593 |
26,494 |
10,894 |
42,951 |
113,062 |
| Trading gains (losses) |
712 |
(1,538) |
5,973 |
4,437 |
6,236 |
| Other: |
|
|
|
|
|
| Fees from covered call options |
703 |
169 |
289 |
-- |
-- |
| Bank Owned Life Insurance |
552 |
418 |
623 |
642 |
552 |
| Administrative services |
744 |
708 |
582 |
511 |
527 |
| Miscellaneous |
2,780 |
3,590 |
2,128 |
3,497 |
2,934 |
| Total other income |
4,779 |
4,885 |
3,622 |
4,650 |
4,013 |
| |
|
|
|
|
|
| Total Non-Interest
Income |
$ 54,656 |
$ 50,436 |
$ 42,607 |
$ 85,088 |
$ 150,680 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
| Non-Interest Expense - 5 Quarter
Trends |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| (In thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| Salaries and employee benefits: |
|
|
|
|
|
| Salaries |
$ 30,537 |
$ 28,714 |
$ 29,083 |
$ 28,426 |
$ 28,189 |
| Commissions and bonus |
17,366 |
12,967 |
9,731 |
11,752 |
11,887 |
| Benefits |
9,111 |
8,968 |
10,258 |
7,777 |
8,012 |
| Total salaries and employee benefits |
57,014 |
50,649 |
49,072 |
47,955 |
48,088 |
| Equipment |
4,203 |
4,046 |
3,896 |
4,097 |
4,069 |
| Occupancy, net |
6,254 |
6,033 |
6,230 |
6,124 |
5,884 |
| Data processing |
3,891 |
3,669 |
3,407 |
3,404 |
3,226 |
| Advertising and marketing |
1,650 |
1,470 |
1,314 |
1,366 |
1,488 |
| Professional fees |
4,555 |
3,957 |
3,107 |
3,556 |
4,089 |
| Amortization of other intangibles |
701 |
674 |
645 |
744 |
677 |
| FDIC insurance |
4,642 |
5,005 |
3,809 |
4,731 |
4,334 |
| OREO expenses, net |
4,767 |
5,843 |
1,337 |
5,293 |
10,243 |
| Other: |
|
|
|
|
|
| Commissions - 3rd party brokers |
979 |
1,097 |
962 |
757 |
843 |
| Postage |
1,254 |
1,229 |
1,110 |
1,367 |
1,139 |
| Stationery and supplies |
812 |
761 |
732 |
859 |
769 |
| Miscellaneous |
9,001 |
8,230 |
8,317 |
10,064 |
7,714 |
| Total other expense |
12,046 |
11,317 |
11,121 |
13,047 |
10,465 |
| |
|
|
|
|
|
| Total Non-Interest
Expense |
$ 99,723 |
$ 92,663 |
$ 83,938 |
$ 90,317 |
$ 92,563 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
|
|
| Allowance for Credit Losses - 5
Quarter Trends |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| |
|
|
|
|
|
| Allowance for loan losses at
beginning of period |
$ 106,547 |
$ 102,397 |
$ 98,277 |
$ 95,096 |
$ 85,113 |
| Provision for credit
losses |
25,528 |
41,297 |
29,044 |
38,603 |
91,193 |
| Other adjustments |
-- |
-- |
1,943 |
-- |
-- |
| Reclassification (to)/from allowance
for unfunded lending-related commitments |
(206) |
785 |
(99) |
(494) |
(1,543) |
| |
|
|
|
|
|
| Charge-offs: |
|
|
|
|
|
| Commercial |
3,076 |
4,781 |
4,675 |
8,894 |
16,685 |
| Commercial real estate |
15,727 |
12,311 |
20,244 |
22,894 |
57,928 |
| Home equity |
1,234 |
3,089 |
281 |
1,572 |
1,727 |
| Residential real estate |
116 |
310 |
406 |
385 |
422 |
| Premium finance receivables -
commercial |
1,505 |
17,747 |
1,933 |
2,532 |
2,478 |
| Premium finance receivables - life
insurance |
79 |
-- |
-- |
-- |
-- |
| Indirect consumer |
198 |
256 |
274 |
427 |
588 |
| Consumer and other |
288 |
109 |
179 |
148 |
244 |
| Total charge-offs |
22,223 |
38,603 |
27,992 |
36,852 |
80,072 |
| |
|
|
|
|
|
| Recoveries: |
|
|
|
|
|
| Commercial |
286 |
143 |
443 |
237 |
104 |
| Commercial real estate |
197 |
218 |
442 |
552 |
35 |
| Home equity |
8 |
6 |
8 |
812 |
1 |
| Residential real estate |
3 |
2 |
5 |
-- |
-- |
| Premium finance receivables -
commercial |
220 |
188 |
229 |
194 |
161 |
| Premium finance receivables - life
insurance |
-- |
-- |
-- |
-- |
-- |
| Indirect consumer |
29 |
81 |
50 |
44 |
62 |
| Consumer and other |
43 |
33 |
47 |
85 |
42 |
| Total recoveries |
786 |
671 |
1,224 |
1,924 |
405 |
| Net charge-offs, excluding covered
loans |
(21,437) |
(37,932) |
(26,768) |
(34,928) |
(79,667) |
| Covered loans |
-- |
-- |
-- |
-- |
-- |
| Net charge-offs |
(21,437) |
(37,932) |
(26,768) |
(34,928) |
(79,667) |
| |
|
|
|
|
|
| Allowance for loan losses at period
end |
$ 110,432 |
$ 106,547 |
$ 102,397 |
$ 98,277 |
$ 95,096 |
| |
|
|
|
|
|
| Allowance for unfunded
lending-related commitments at period end |
$ 2,375 |
$ 2,169 |
$ 3,653 |
$ 3,554 |
$ 3,129 |
| Allowance for credit losses at period
end |
$ 112,807 |
$ 108,716 |
$ 106,050 |
$ 101,831 |
$ 98,225 |
| |
|
|
|
|
|
| Annualized net charge-offs by
category as a percentage of its own respective category's
average: |
|
|
|
|
|
| Commercial |
0.60% |
1.04% |
1.02% |
2.04% |
4.01% |
| Commercial real estate |
1.84 |
1.45 |
2.42 |
2.62 |
6.69 |
| Home equity |
0.53 |
1.34 |
0.12 |
0.32 |
0.75 |
| Residential real estate |
0.07 |
0.23 |
0.32 |
0.28 |
0.33 |
| Premium finance receivables -
commercial |
0.39 |
5.46 |
0.54 |
1.38 |
0.74 |
| Premium finance receivables - life
insurance |
0.02 |
-- |
-- |
-- |
-- |
| Indirect consumer |
1.08 |
0.92 |
1.00 |
1.43 |
1.67 |
| Consumer and other |
1.01 |
0.27 |
0.48 |
0.22 |
0.71 |
| Total loans, net of unearned income,
excluding covered loans |
0.89% |
1.63% |
1.19% |
1.61% |
3.65% |
| Covered loans |
-- |
-- |
-- |
-- |
-- |
| Total loans, net of unearned income |
0.86% |
1.59% |
1.19% |
1.61% |
3.65% |
| |
|
|
|
|
|
| Net charge-offs as a percentage of
the provision for credit losses |
83.97% |
91.85% |
92.48% |
90.48% |
87.36% |
| |
|
|
|
|
|
| Excluding covered
loans: |
|
|
|
|
|
| Loans at period-end |
$ 9,461,155 |
$ 9,324,163 |
$ 9,070,562 |
$ 8,411,771 |
$ 8,275,257 |
| Allowance for loan losses as a
percentage of loans at period end |
1.17% |
1.14% |
1.13% |
1.17% |
1.15% |
| Allowance for credit losses as a
percentage of loans at period end |
1.19% |
1.17% |
1.17% |
1.21% |
1.19% |
| |
|
|
|
|
|
| Including covered
loans: |
|
|
|
|
|
| Loans at period-end |
$ 9,814,995 |
$ 9,599,726 |
$ 9,070,562 |
$ 8,411,771 |
$ 8,275,257 |
| Allowance for loan losses as a
percentage of loans at period end |
1.13% |
1.11% |
1.13% |
1.17% |
1.15% |
| Allowance for credit losses as a
percentage of loans at period end |
1.15% |
1.13% |
1.17% |
1.21% |
1.19% |
| |
|
|
|
|
|
| |
|
|
|
|
|
| WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
|
|
| Non-Performing Loans, excluding
covered loans - 5 Quarter Trends |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| (Dollars in thousands) |
September 30,
2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
| |
|
|
|
|
|
| Loans past due greater than 90 days
and still accruing: |
|
|
|
|
|
| Commercial |
$ -- |
$ 99 |
$ -- |
$ 561 |
$ 758 |
| Commercial real-estate |
-- |
2,248 |
1,195 |
-- |
22,619 |
| Home equity |
-- |
-- |
21 |
-- |
100 |
| Residential real-estate |
-- |
-- |
-- |
412 |
1,172 |
| Premium finance receivables -
commercial |
6,853 |
6,350 |
7,479 |
6,271 |
11,714 |
| Premium finance receivables - life
insurance |
1,222 |
1,923 |
5,450 |
-- |
-- |
| Indirect consumer |
355 |
579 |
665 |
461 |
549 |
| Consumer and other |
2 |
3 |
20 |
95 |
25 |
| Total past due greater than 90 days and
still accruing |
8,432 |
11,202 |
14,830 |
7,800 |
36,937 |
| |
|
|
|
|
|
| Non-accrual loans: |
|
|
|
|
|
| Commercial |
19,444 |
17,741 |
15,331 |
16,509 |
19,035 |
| Commercial real-estate |
83,340 |
82,984 |
82,389 |
80,639 |
147,691 |
| Home equity |
6,144 |
7,149 |
7,730 |
8,883 |
6,808 |
| Residential real-estate |
6,644 |
4,436 |
5,460 |
3,779 |
4,077 |
| Premium finance receivables -
commercial |
9,082 |
11,389 |
14,106 |
11,878 |
16,093 |
| Premium finance receivables - life
insurance |
222 |
-- |
73 |
704 |
-- |
| Indirect consumer |
446 |
438 |
615 |
995 |
736 |
| Consumer and other |
569 |
62 |
426 |
617 |
282 |
| Total non-accrual |
125,891 |
124,199 |
126,130 |
124,004 |
194,722 |
| |
|
|
|
|
|
| Total non-performing
loans: |
|
|
|
|
|
| Commercial |
19,444 |
17,840 |
15,331 |
17,070 |
19,793 |
| Commercial real-estate |
83,340 |
85,232 |
83,584 |
80,639 |
170,310 |
| Home equity |
6,144 |
7,149 |
7,751 |
8,883 |
6,908 |
| Residential real-estate |
6,644 |
4,436 |
5,460 |
4,191 |
5,249 |
| Premium finance receivables -
commercial |
15,935 |
17,739 |
21,585 |
18,149 |
27,807 |
| Premium finance receivables - life
insurance |
1,444 |
1,923 |
5,523 |
704 |
-- |
| Indirect consumer |
801 |
1,017 |
1,280 |
1,456 |
1,285 |
| Consumer and other |
571 |
65 |
446 |
712 |
307 |
| Total non-performing |
$ 134,323 |
$ 135,401 |
$ 140,960 |
$ 131,804 |
$ 231,659 |
| |
|
|
|
|
|
| Total non-performing loans by
category as a percent of its own respective category's period-end
balance: |
|
|
|
|
|
| Commercial |
1.00 % |
0.98 % |
0.88 % |
0.98 % |
1.20 % |
| Commercial real-estate |
2.50 |
2.55 |
2.51 |
2.45 |
5.02 |
| Home equity |
0.67 |
0.78 |
0.84 |
0.95 |
0.74 |
| Residential real-estate |
1.94 |
1.33 |
1.69 |
1.37 |
1.87 |
| Premium finance receivables -
commercial |
1.20 |
1.32 |
1.64 |
2.49 |
3.70 |
| Premium finance receivables - life
insurance |
0.10 |
0.14 |
0.45 |
0.06 |
-- |
| Indirect consumer |
1.42 |
1.47 |
1.54 |
1.48 |
1.11 |
| Consumer and other |
0.57 |
0.07 |
0.42 |
0.65 |
0.26 |
| Total loans |
1.42% |
1.45% |
1.55% |
1.57% |
2.80% |
| |
|
|
|
|
|
| Allowance for loan losses as a
percentage total non-performing loans |
82.21% |
78.69% |
72.64% |
74.56% |
41.05% |
| |
|
|
|
|
|
CONTACT: Wintrust Financial Corporation
Edward J. Wehmer, President & Chief Executive Officer
David A. Dykstra, Senior Executive Vice President
& Chief Operating Officer
(847) 615-4096
www.wintrust.com
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