Wintrust Financial Corporation ("Wintrust" or "the Company")
(Nasdaq:WTFC) announced net income of $35.3 million or $0.70 per
diluted common share for the fourth quarter of 2013 compared to net
income of $35.6 million or $0.71 per diluted common share for the
third quarter of 2013 and $30.1 million or $0.61 per diluted common
share for the fourth quarter of 2012. The Company recorded record
net income of $137.2 million or $2.75 per diluted common share in
2013 compared to net income of $111.2 million or $2.31 per diluted
common share in 2012.
Highlights compared with the Third Quarter of
2013:
- Total loans increased by $246 million. Total loans, excluding
covered loans and loans held-for-sale, increased by $316 million or
10% on an annualized basis
- Average total loans decreased by $117 million
- Provision for credit losses decreased by $7.3 million
- The allowance for loan losses as a percentage of total
non-performing loans increased to 93.8%. Non-performing loans
declined by $19.9 million, or 16%, to $103.3 million and
non-performing loans as a percent of total loans, excluding covered
loans, decreased to 0.80%. Other real estate owned decreased by
$4.8 million
- Paid off outstanding subordinated notes of $10.0 million and a
$1.0 million term facility
- Capital ratios remain strong with a tangible common equity
ratio, assuming full conversion of preferred stock, of 8.5%
- Completed the acquisition of Diamond Bancorp, Inc. and certain
assets and liabilities of Surety Financial Services, Inc.
- Opened new banking locations in Round Lake Beach, Elk Grove
Village and Milwaukee
- Recorded other than temporary impairment of $3.3 million on one
security as a result of Volcker Rule
Edward J. Wehmer, President and Chief Executive Officer,
commented, "Wintrust reported strong net income for the fourth
quarter of 2013 and record annual net income in 2013. The fourth
quarter of 2013 was highlighted by improvement in non-performing
asset levels, continued loan growth, relatively stable net interest
margin, the acquisition of Diamond Bancorp and the acquisition of
certain assets and liabilities of Surety Financial Services."
Commenting on credit quality, Mr. Wehmer noted, "The Company's
non-performing loans decreased to the lowest level since the second
quarter of 2008. The decrease was due both to a decline in the
volume of new non-performing assets as well as the continued
reduction in existing non-performing assets through the efforts of
our credit workout teams. As a result of improving credit quality,
the Company recorded a lower provision for loan losses in the
fourth quarter and we believe that the Company's reserves remain
appropriate."
Mr. Wehmer further commented, "We anticipate that mortgage
banking originations will decline slightly in the first quarter of
2014 but gradually trend upward and expect our normal seasonal
pickup in the second and third quarters of 2014. We will continue
to evaluate organic and acquisition opportunities to expand our
mortgage banking business as increased regulatory and economic
challenges impact the industry. In addition, our commercial and
commercial real estate loan pipelines remain strong."
Turning to the future, Mr. Wehmer stated, "We expanded our
franchise in the fourth quarter by opening new bank branches in
Round Lake Beach, Elk Grove Village and Milwaukee. In 2013, we
increased the number of Wintrust banking locations to 124, as
compared to 111 at the end of 2012. Evaluating strategic
acquisitions and organic branch growth will continue to be a part
of our overall growth strategy. Our pipelines for both internal
growth and external growth remain consistently strong. We continue
to take a steady and measured approach to achieve our main
objectives of growing franchise value, increasing profitability,
leveraging our expense infrastructure and increasing shareholder
value."
Graphs accompanying this release are available at
http://media.globenewswire.com/cache/11955/file/24169.pdf
Wintrust's key operating measures and growth rates for the
fourth quarter of 2013, as compared to the sequential and linked
quarters are shown in the table below:
|
|
|
|
% or(5) |
% or |
|
|
|
|
basis point
(bp) |
basis point
(bp) |
|
|
|
|
change |
change |
|
|
|
|
from |
from |
|
Three Months
Ended |
3rd Quarter |
4th Quarter |
(Dollars in thousands) |
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
2013 |
2012 |
Net income |
$ 35,288 |
$ 35,563 |
$ 30,089 |
(1)% |
17% |
Net income per common share – diluted |
$ 0.70 |
$ 0.71 |
$ 0.61 |
(1)% |
15% |
Pre-tax adjusted earnings (2) |
$ 66,896 |
$ 69,920 |
$ 72,441 |
(4)% |
(8)% |
Net revenue (1) |
$ 188,669 |
$ 196,444 |
$ 197,965 |
(4)% |
(5)% |
Net interest income |
$ 142,308 |
$ 141,782 |
$ 132,776 |
—% |
7% |
Net interest margin (2) |
3.53% |
3.57% |
3.40% |
(4) bp |
13 bp |
Net overhead ratio (2) (3) |
1.79% |
1.65% |
1.48% |
14 bp |
31 bp |
Net overhead ratio, based on pre-tax adjusted
earnings (2) (3) |
1.68% |
1.63% |
1.39% |
5 bp |
29 bp |
|
|
|
|
|
|
Efficiency ratio (2) (4) |
65.95% |
64.60% |
66.13% |
135 bp |
(18) bp |
Efficiency ratio, based on pre-tax adjusted
earnings (2) (4) |
64.81% |
64.00% |
62.62% |
81 bp |
219 bp |
|
|
|
|
|
|
Return on average assets |
0.78% |
0.81% |
0.69% |
(3) bp |
9 bp |
Return on average common equity |
7.56% |
7.85% |
6.79% |
(29) bp |
77 bp |
At end of period |
|
|
|
|
|
Total assets |
$ 18,097,783 |
$ 17,682,548 |
$ 17,519,613 |
9% |
3% |
Total loans, excluding loans held-for-sale,
excluding covered loans |
$ 12,896,602 |
$ 12,581,039 |
$ 11,828,943 |
10% |
9% |
Total loans, including loans held-for-sale,
excluding covered loans |
$ 13,230,929 |
$ 12,915,384 |
$ 12,241,143 |
10% |
8% |
Total deposits |
$ 14,668,789 |
$ 14,647,446 |
$ 14,428,544 |
1% |
2% |
Total shareholders' equity |
$ 1,900,589 |
$ 1,873,566 |
$ 1,804,705 |
6% |
5% |
|
|
|
|
|
|
(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) 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)
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 Information."
Financial Performance Overview – Fourth Quarter
2013
For the fourth quarter of 2013, net interest income totaled
$142.3 million, an increase of $526,000 as compared to the third
quarter of 2013 and an increase of $9.5 million as compared to the
fourth quarter of 2012. The net interest margin, on a fully
taxable equivalent basis, for the fourth quarter of 2013 was 3.53%
compared to 3.57% in the third quarter of 2013 and 3.40% in the
fourth quarter of 2012. The changes in net interest income on
both a sequential and linked quarter basis are the result of the
following:
-- Net interest income increased $526,000 in the fourth quarter
of 2013 compared to the third quarter of 2013, due to:
- An additional $2.1 million in net interest income related to
the acquisition of Diamond Bank completed in October 2013.
- A $1.3 million decrease in interest expense related to the
Company's trust preferred securities.
- These increases in net interest income were partially offset by
a $1.5 million decrease in interest income recorded on mortgage
loans held-for-sale and a $1.3 million decrease in interest income
on covered loans. These decreases were primarily a result of
lower average balances in the fourth quarter of 2013 as compared to
the third quarter of 2013.
-- Net interest income increased $9.5 million in the fourth
quarter of 2013 compared to the fourth quarter of 2012, due to:
- Average earning assets for the fourth quarter of 2013 increased
by $470.0 million compared to the fourth quarter of 2012. This was
comprised of average loan growth, excluding covered loans, of $1.0
billion partially offset by a decrease of $333.9 million in the
average balance of liquidity management and other assets and a
decrease of $238.3 million in the average balance of covered loans.
The growth in average total loans, excluding covered loans,
included an increase of $376.7 million in commercial loans, $466.3
million in commercial real-estate loans, $188.1 million in
commercial premium finance receivables and $206.0 million in life
premium finance receivables, partially offset by a decrease of
$160.1 million in mortgage loans held-for-sale and $34.8 million in
home equity and other loans.
- The average earning asset growth of $470.0 million in the
fourth quarter of 2013 compared to the fourth quarter of 2012 was
partially offset by a three basis point decline in the yield
on earning assets, creating an increase in total interest income of
$3.9 million in the fourth quarter of 2013 compared to the prior
year quarter.
- The average earning asset growth of $470.0 million was
primarily funded by an increase in average demand deposits of
$408.4 million and average interest bearing deposits of $236.3
million. Average wholesale borrowings decreased by $182.3 million
in the fourth quarter of 2013 compared to the fourth quarter of
2012. The improved mix of funding in the fourth quarter of 2013
compared to the fourth quarter of 2012 resulted in an 18 basis
point decrease in the yield on average interest bearing liabilities
which created a $5.6 million decrease in interest expense.
- Combined, the increase in interest income of $3.9 million and
the reduction of interest expense by $5.6 million created the $9.5
million increase in net interest income in the fourth quarter of
2013 compared to the fourth quarter of 2012.
Non-interest income totaled $46.4 million in the fourth quarter
of 2013, decreasing $8.3 million or 15%, compared to the third
quarter of 2013 and decreasing $18.8 million, or 29%, compared to
the fourth quarter of 2012. The decrease in non-interest income in
the fourth quarter of 2013 compared to the third quarter of 2013 is
primarily attributable to a decrease in mortgage banking revenues
as well as losses on available-for-sale securities related to other
than temporary impairment recorded on one security as a result of
the Volcker Rule, partially offset by increased fees from covered
call options and fewer trading losses primarily related to the
valuation of interest rate cap derivatives. The decrease in
non-interest income in the fourth quarter of 2013 compared to the
fourth quarter of 2012 was primarily attributable to lower mortgage
banking revenues and gains on available-for-sale securities,
partially offset by higher wealth management revenues. Mortgage
banking revenue decreased $6.4 million when compared to the third
quarter of 2013 and $15.4 million when compared to the fourth
quarter of 2012. The decreases in mortgage banking revenue from the
third quarter of 2013 and the fourth quarter of 2012 resulted
primarily from decreased loan originations due to the impact of
higher rates on refinancing activity as well as competitive pricing
pressure. Loans originated and sold to the secondary market
were $742.3 million in the fourth quarter of 2013 compared to
$940.8 million in the third quarter of 2013 and $1.2 billion the
fourth quarter of 2012 (see "Non-Interest Income" section later in
this release for further detail).
Non-interest expense totaled $127.0 million in the fourth
quarter of 2013, decreasing $251,000 compared to the third quarter
of 2013 and decreasing $2.6 million, or 2%, compared to the fourth
quarter of 2012. The decrease in the current quarter compared
to the third quarter of 2013 can be primarily attributed to lower
expenses related to variable pay based arrangements, partially
offset by increased occupancy, equipment, professional fee and
marketing expenses. The fourth quarter of 2013 included
significant expenses related to acquisitions completed in the
quarter totaling approximately $3.3 million. The decrease
in the fourth quarter of 2013 compared to the fourth quarter of
2012 was primarily attributable to a decrease in OREO expenses and
lower salary and employee benefit costs, partially offset by
increased occupancy, professional fee, marketing, equipment and
data processing expenses (see "Non-Interest Expense" section
later in this release for further detail).
Financial Performance Overview – Full Year
2013
The net interest margin, on a fully taxable equivalent basis,
for 2013 was 3.50% compared to 3.49% in 2012. Net interest
income increased $31.1 million in 2013 compared to 2012, due
to:
- Average earning assets for 2013 increased by $837.3 million
compared to 2012. This was comprised of average loan growth,
excluding covered loans, of $1.2 billion partially offset by a
decrease of $175.1 million in the average balance of covered loans
and a decrease of $209.3 million in the average balance of
liquidity management and other assets.
- The increase in average earning assets was partially offset by
a 20 basis point decrease in the yield on average earning assets,
creating an increase in total interest income of $3.7 million in
2013 compared to the prior year.
- The average earning asset growth of $837.3 million was
primarily funded by an increase in average interest bearing
deposits of $777.8 million and an increase in average demand
deposits of $428.6 million. Average wholesale borrowings
decreased by $490.8 million in 2013 compared to 2012. The
improved mix of funding in 2013 compared to the fourth quarter of
2012 resulted in a 24 basis point decrease in the yield on average
interest bearing liabilities which was partially offset by an
increase in average interest bearing liabilities, creating a $27.4
million decrease in interest expense.
- Combined, the increase in interest income of $3.7 million and
the reduction of interest expense by $27.4 million, created the
$31.1 million increase in net interest income in 2013 compared to
2012.
Non-interest income totaled $222.4 million in 2013, decreasing
$3.7 million, or 2%, when compared to the $226.1 million recorded
in 2012. Non-interest income in 2013 as compared to 2012
included lower bargain purchase gains, decreased fees from covered
call options, higher losses on available for sale securities and
lower mortgage banking revenues, partially offset by higher wealth
management revenues, service charges on deposit accounts and
trading gains. Mortgage banking revenue decreased $3.1 million
when compared to 2012. The decrease in 2013 resulted primarily from
a decrease in gains on sales of loans, which was driven by lower
origination volumes primarily due to a softening of the refinance
market in 2013. Loans originated and sold to the secondary market
were $3.7 billion in 2013 compared to $3.9 billion in 2012.
Non-interest expense totaled $502.6 million in 2013, increasing
$13.5 million compared to 2012. The increase compared to 2012 was
primarily attributable to a $20.2 million increase in salaries and
employee benefits, as well as increases of $4.3 million in
occupancy expenses, $3.2 million in equipment expenses and $2.9
million in data processing expenses, partially offset by a $16.3
million decline in OREO expenses.
Financial Performance Overview – Credit
Quality
The ratio of non-performing assets to total assets was 0.85% as
of December 31, 2013, compared to 1.01% at September 30,
2013 and 1.03% at December 31, 2012. Non-performing
assets, excluding covered assets, totaled $154.3 million at
December 31, 2013, compared to $179.0 million at
September 30, 2013 and $181.0 million at December 31,
2012.
Non-performing loans, excluding covered loans, totaled $103.3
million, or 0.80% of total loans, at December 31, 2013,
compared to $123.3 million, or 0.98% of total loans, at
September 30, 2013 and $118.1 million, or 1.00% of total
loans, at December 31, 2012. OREO, excluding covered
OREO, of $50.5 million at December 31, 2013 decreased $4.8
million compared to $55.3 million at September 30, 2013 and
decreased $12.4 million compared to $62.9 million at
December 31, 2012.
The provision for credit losses, excluding the provision for
covered loan losses, totaled $3.9 million for the fourth quarter of
2013 compared to $11.6 million for the third quarter of 2013 and
$20.7 million in the fourth quarter of 2012. The decrease in
the provision for credit losses recorded in the current quarter was
primarily due to a decrease in the level of new non-accrual loans
coupled with a decrease in allowance for loan losses related to
charge-offs that were previously provided for within the estimate
for credit losses associated with non-accrual loans. In
addition, the Company recorded a decrease in provision associated
with general reserves driven by improvement in historical
charge-off rates and lower levels of non-performing loans and
adversely classified loans.
Net charge-offs as a percentage of loans, excluding covered
loans, for the fourth quarter of 2013 totaled 44 basis points on an
annualized basis compared to 34 basis points on an annualized basis
in the third quarter of 2013 and 83 basis points on an annualized
basis in the fourth quarter of 2012. Net charge-offs,
excluding covered loans, increased in the fourth quarter of 2013
compared to the third quarter of 2013 primarily as a result of a
$2.3 million increase in net charge-offs within the commercial loan
portfolio.
Excluding the allowance for covered loan losses, the allowance
for credit losses at December 31, 2013 totaled $97.6 million,
or 0.76% of total loans, compared to $108.5 million, or 0.86% of
total loans at September 30, 2013 and $122.0 million, or 1.03%
of total loans at December 31, 2012. The decrease in the
allowance for credit losses, excluding the allowance for covered
loan losses, was partially attributable to a decrease in the
allowance for unfunded lending-related commitments during both
periods. As of December 31, 2013, the allowance for unfunded
lending-related commitments totaled $719,000 compared to $1.3
million as of September 30, 2013 and $14.6 million as of
December 31, 2012. The decrease when comparing both
periods was primarily the result of the funding of two letters of
credit in the second and third quarters of 2013.
Financial Performance Overview – Earnings Per
Share
The following table shows the computation of basic and diluted
earnings per share for the periods indicated:
|
|
Three Months
Ended |
Years
Ended |
|
|
December
31, |
December
31, |
(In thousands, except per share data) |
|
2013 |
2012 |
2013 |
2012 |
Net income |
|
$ 35,288 |
$ 30,089 |
$ 137,210 |
$ 111,196 |
Less: Preferred stock dividends and discount
accretion |
|
1,581 |
2,616 |
8,395 |
9,093 |
Net income applicable to common
shares—Basic |
(A) |
33,707 |
27,473 |
128,815 |
102,103 |
Add: Dividends on convertible preferred
stock, if dilutive |
|
1,581 |
2,581 |
8,325 |
8,955 |
Net income applicable to common
shares—Diluted |
(B) |
35,288 |
30,054 |
137,140 |
111,058 |
Weighted average common shares
outstanding |
(C) |
40,954 |
36,543 |
38,699 |
36,365 |
Effect of dilutive potential common
shares: |
|
|
|
|
|
Common stock equivalents |
|
6,522 |
7,438 |
7,108 |
7,313 |
Convertible preferred stock, if
dilutive |
|
3,076 |
5,020 |
4,141 |
4,356 |
Weighted average common shares and effect of
dilutive potential common shares |
(D) |
50,552 |
49,001 |
49,948 |
48,034 |
Net income per common share: |
|
|
|
|
|
Basic |
(A/C) |
$ 0.82 |
0.75 |
$ 3.33 |
2.81 |
Diluted |
(B/D) |
$ 0.70 |
0.61 |
$ 2.75 |
2.31 |
Potentially dilutive common shares can result from stock
options, restricted stock unit awards, stock warrants, the
Company's convertible preferred stock, tangible equity unit shares
and shares to be issued under the Employee Stock Purchase Plan and
the Directors Deferred Fee and Stock Plan, being treated as if they
had been either exercised or issued, computed by application of the
treasury stock method. While potentially dilutive common shares are
typically included in the computation of diluted earnings per
share, potentially dilutive common shares are excluded from this
computation in periods in which the effect would reduce the loss
per share or increase the income per share. For diluted earnings
per share, net income applicable to common shares can be affected
by the conversion of the Company's convertible preferred stock.
Where the effect of this conversion would reduce the loss per share
or increase the income per share, net income applicable to common
shares is not adjusted by the associated preferred dividends.
|
|
|
|
|
WINTRUST FINANCIAL
CORPORATION |
|
|
|
|
Selected Financial
Highlights |
|
|
|
|
|
|
|
|
|
|
Three months
ended December 31, |
Years Ended
December 31, |
(Dollars in thousands, except per share
data) |
2013 |
2012 |
2013 |
2012 |
Selected Financial Condition Data (at
end of period): |
|
|
|
|
Total assets |
$ 18,097,783 |
$ 17,519,613 |
|
|
Total loans, excluding covered loans |
12,896,602 |
11,828,943 |
|
|
Total deposits |
14,668,789 |
14,428,544 |
|
|
Junior subordinated debentures |
249,493 |
249,493 |
|
|
Total shareholders' equity |
1,900,589 |
1,804,705 |
|
|
Selected Statements of Income
Data: |
|
|
|
|
Net interest income |
$ 142,308 |
$ 132,776 |
$ 550,627 |
$ 519,516 |
Net revenue (1) |
188,669 |
197,965 |
773,024 |
745,608 |
Pre-tax adjusted earnings (2) |
66,896 |
72,441 |
275,999 |
274,873 |
Net income |
35,288 |
30,089 |
137,210 |
111,196 |
Net income per common share – Basic |
$ 0.82 |
$ 0.75 |
$ 3.33 |
$ 2.81 |
Net income per common share – Diluted |
$ 0.70 |
$ 0.61 |
$
2.75 |
$ 2.31 |
Selected Financial Ratios and Other
Data: |
|
|
|
|
Performance Ratios: |
|
|
|
|
Net interest margin (2) |
3.53% |
3.40% |
3.50% |
3.49% |
Non-interest income to average assets |
1.03% |
1.50% |
1.27% |
1.37% |
Non-interest expense to average assets |
2.82% |
2.99% |
2.88% |
2.96% |
Net overhead ratio (2) (3) |
1.79% |
1.48% |
1.60% |
1.59% |
Net overhead ratio, based on pre-tax adjusted
earnings (2) (3) |
1.68% |
1.39% |
1.57% |
1.48% |
Efficiency ratio (2) (4) |
65.95% |
66.13% |
64.57% |
65.85% |
Efficiency ratio, based on pre-tax adjusted
earnings (2) (4) |
64.81% |
62.62% |
64.01% |
62.38% |
Return on average assets |
0.78% |
0.69% |
0.79% |
0.67% |
Return on average common equity |
7.56% |
6.79% |
7.56% |
6.60% |
Return on average tangible common equity |
9.71% |
8.71% |
9.71% |
8.48% |
Average total assets |
$ 17,835,999 |
$ 17,248,650 |
$ 17,468,249 |
$ 16,529,617 |
Average total shareholders' equity |
1,895,498 |
1,786,824 |
1,856,706 |
1,696,276 |
Average loans to average deposits ratio
(excluding covered loans) |
88.9% |
85.6% |
88.9% |
87.8% |
Average loans to average deposits ratio
(including covered loans) |
91.6% |
90.0% |
92.1% |
92.6% |
Common Share Data at end of
period: |
|
|
|
|
Market price per common share |
$ 46.12 |
$ 36.70 |
|
|
Book value per common share (2) |
$ 38.47 |
$ 37.78 |
|
|
Tangible common book value per share (2) |
$ 29.93 |
$ 29.28 |
|
|
Common shares outstanding |
46,116,583 |
36,858,355 |
|
|
Other Data at end of
period:(8) |
|
|
|
|
Leverage Ratio (5) |
10.5% |
10.0% |
|
|
Tier 1 capital to risk-weighted assets
(5) |
12.1% |
12.1% |
|
|
Total capital to risk-weighted assets
(5) |
12.8% |
13.1% |
|
|
Tangible common equity ratio (TCE)
(2)(7) |
7.8% |
7.4% |
|
|
Tangible common equity ratio, assuming full
conversion of preferred stock (2) (7) |
8.5% |
8.4% |
|
|
Allowance for credit losses (6) |
$ 97,641 |
$ 121,988 |
|
|
Non-performing loans |
$ 103,334 |
$ 118,083 |
|
|
Allowance for credit losses to total loans
(6) |
0.76% |
1.03% |
|
|
Non-performing loans to total loans |
0.80% |
1.00% |
|
|
Number of: |
|
|
|
|
Bank subsidiaries |
15 |
15 |
|
|
Non-bank subsidiaries |
8 |
8 |
|
|
Banking offices |
124 |
111 |
|
|
|
|
|
|
|
(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, but excludes
the allowance for covered loan losses. |
(7) Total shareholders'
equity minus preferred stock and total intangible assets divided by
total assets minus total intangible assets. |
(8) Asset quality ratios
exclude covered loans. |
|
|
WINTRUST FINANCIAL
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF CONDITION |
|
(In thousands) |
(Unaudited)
December 31, 2013 |
(Unaudited) September 30,
2013 |
December 31, 2012 |
|
|
|
|
Assets |
|
|
|
Cash and due from banks |
$ 253,408 |
$ 322,866 |
$ 284,731 |
Federal funds sold and securities purchased
under resale agreements |
10,456 |
7,771 |
30,297 |
Interest-bearing deposits with other
banks |
495,574 |
681,834 |
1,035,743 |
Available-for-sale securities, at fair
value |
2,176,290 |
1,781,883 |
1,796,076 |
Trading account securities |
497 |
259 |
583 |
Federal Home Loan Bank and Federal Reserve
Bank stock, at cost |
79,261 |
76,755 |
79,564 |
Brokerage customer receivables |
30,953 |
29,253 |
24,864 |
Mortgage loans held-for-sale, at fair
value |
332,485 |
329,186 |
385,033 |
Mortgage loans held-for-sale, at lower of
cost or market |
1,842 |
5,159 |
27,167 |
Loans, net of unearned income, excluding
covered loans |
12,896,602 |
12,581,039 |
11,828,943 |
Covered loans |
346,431 |
415,988 |
560,087 |
Total loans |
13,243,033 |
12,997,027 |
12,389,030 |
Less: Allowance for loan
losses |
96,922 |
107,188 |
107,351 |
Less: Allowance for covered
loan losses |
10,092 |
12,924 |
13,454 |
Net loans |
13,136,019 |
12,876,915 |
12,268,225 |
Premises and equipment, net |
531,947 |
517,942 |
501,205 |
FDIC indemnification asset |
85,672 |
100,313 |
208,160 |
Accrued interest receivable and other
assets |
569,619 |
576,121 |
511,617 |
Goodwill |
374,547 |
357,309 |
345,401 |
Other intangible assets |
19,213 |
18,982 |
20,947 |
Total
assets |
$ 18,097,783 |
$ 17,682,548 |
$ 17,519,613 |
Liabilities and Shareholders'
Equity |
|
|
|
Deposits: |
|
|
|
Non-interest bearing |
$ 2,721,771 |
$ 2,622,518 |
$ 2,396,264 |
Interest bearing |
11,947,018 |
12,024,928 |
12,032,280 |
Total deposits |
14,668,789 |
14,647,446 |
14,428,544 |
Notes payable |
364 |
1,546 |
2,093 |
Federal Home Loan Bank advances |
417,762 |
387,852 |
414,122 |
Other borrowings |
254,740 |
246,870 |
274,411 |
Secured borrowings - owed to securitization
investors |
— |
— |
— |
Subordinated notes |
— |
10,000 |
15,000 |
Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
Trade date securities payable |
303,088 |
— |
— |
Accrued interest payable and other
liabilities |
302,958 |
265,775 |
331,245 |
Total liabilities |
16,197,194 |
15,808,982 |
15,714,908 |
Shareholders' Equity: |
|
|
|
Preferred stock |
126,477 |
126,500 |
176,406 |
Common stock |
46,181 |
39,992 |
37,108 |
Surplus |
1,117,032 |
1,118,550 |
1,036,295 |
Treasury stock |
(3,000) |
(8,290) |
(7,838) |
Retained earnings |
676,935 |
643,228 |
555,023 |
Accumulated other comprehensive
(loss) income |
(63,036) |
(46,414) |
7,711 |
Total shareholders' equity |
1,900,589 |
1,873,566 |
1,804,705 |
Total liabilities and
shareholders' equity |
$ 18,097,783 |
$ 17,682,548 |
$ 17,519,613 |
|
|
WINTRUST FINANCIAL
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME (UNAUDITED, except for the year ended December 31,
2012) |
|
|
Three months
ended December 31, |
Years Ended
December 31, |
(In thousands, except per share data) |
2013 |
2012 |
2013 |
2012 |
Interest income |
|
|
|
|
Interest and fees on loans |
$ 149,528 |
$ 146,946 |
$ 588,435 |
$ 583,872 |
Interest bearing deposits with
banks |
435 |
739 |
1,644 |
1,552 |
Federal funds sold and
securities purchased under resale agreements |
4 |
13 |
27 |
38 |
Securities |
9,690 |
8,086 |
37,025 |
38,134 |
Trading account securities |
(2) |
6 |
25 |
28 |
Federal Home Loan Bank and
Federal Reserve Bank stock |
709 |
656 |
2,773 |
2,550 |
Brokerage customer
receivables |
218 |
197 |
780 |
847 |
Total interest income |
160,582 |
156,643 |
630,709 |
627,021 |
Interest expense |
|
|
|
|
Interest on deposits |
12,488 |
16,208 |
53,191 |
68,305 |
Interest on Federal Home Loan
Bank advances |
2,700 |
2,835 |
11,014 |
12,103 |
Interest on notes payable and
other borrowings |
1,145 |
1,566 |
4,341 |
8,966 |
Interest on secured borrowings
- owed to securitization investors |
— |
— |
— |
5,087 |
Interest on subordinated
notes |
16 |
66 |
167 |
428 |
Interest on junior subordinated
debentures |
1,925 |
3,192 |
11,369 |
12,616 |
Total interest expense |
18,274 |
23,867 |
80,082 |
107,505 |
Net interest income |
142,308 |
132,776 |
550,627 |
519,516 |
Provision for credit losses |
3,850 |
19,546 |
46,033 |
76,436 |
Net interest income after provision for
credit losses |
138,458 |
113,230 |
504,594 |
443,080 |
Non-interest income |
|
|
|
|
Wealth management |
16,265 |
13,634 |
63,042 |
52,680 |
Mortgage banking |
19,296 |
34,702 |
106,857 |
109,970 |
Service charges on deposit
accounts |
5,230 |
4,534 |
20,366 |
16,971 |
(Losses) gains on
available-for-sale securities, net |
(3,328) |
2,561 |
(3,000) |
4,895 |
Fees from covered call
options |
1,856 |
2,156 |
4,773 |
10,476 |
Gain on bargain purchases,
net |
— |
85 |
— |
7,503 |
Trading (losses) gains,
net |
(278) |
(120) |
892 |
(1,900) |
Other |
7,320 |
7,637 |
29,467 |
25,497 |
Total non-interest income |
46,361 |
65,189 |
222,397 |
226,092 |
Non-interest expense |
|
|
|
|
Salaries and employee
benefits |
74,049 |
76,140 |
308,794 |
288,589 |
Equipment |
7,260 |
6,468 |
26,450 |
23,222 |
Occupancy, net |
9,994 |
8,480 |
36,633 |
32,294 |
Data processing |
4,831 |
4,178 |
18,672 |
15,739 |
Advertising and marketing |
3,517 |
2,725 |
11,051 |
9,438 |
Professional fees |
4,132 |
3,158 |
14,922 |
15,262 |
Amortization of other
intangible assets |
1,189 |
1,108 |
4,627 |
4,324 |
FDIC insurance |
3,036 |
3,039 |
12,728 |
13,422 |
OREO expenses, net |
2,671 |
5,269 |
5,834 |
22,103 |
Other |
16,318 |
18,983 |
62,840 |
64,647 |
Total non-interest expense |
126,997 |
129,548 |
502,551 |
489,040 |
Income before taxes |
57,822 |
48,871 |
224,440 |
180,132 |
Income tax expense |
22,534 |
18,782 |
87,230 |
68,936 |
Net income |
$ 35,288 |
$ 30,089 |
$ 137,210 |
$ 111,196 |
Preferred stock dividends and discount
accretion |
$ 1,581 |
$ 2,616 |
$ 8,395 |
$ 9,093 |
Net income applicable to common
shares |
$ 33,707 |
$ 27,473 |
$ 128,815 |
$ 102,103 |
Net income per common share -
Basic |
$ 0.82 |
$ 0.75 |
$ 3.33 |
$ 2.81 |
Net income per common share -
Diluted |
$ 0.70 |
$ 0.61 |
$ 2.75 |
$ 2.31 |
Cash dividends declared per common
share |
$ — |
$ — |
$ 0.18 |
$ 0.18 |
Weighted average common shares
outstanding |
40,954 |
36,543 |
38,699 |
36,365 |
Dilutive potential common shares |
9,598 |
12,458 |
11,249 |
11,669 |
Average common shares and dilutive common
shares |
50,552 |
49,001 |
49,948 |
48,034 |
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 ratio, tangible common book value per share and pre-tax
adjusted 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. Management considers the tangible common
equity ratio and tangible book value per common share as useful
measurements of the Company's equity. Pre-tax adjusted earnings is
a significant metric in assessing the Company's operating
performance. Pre-tax adjusted earnings is calculated by adjusting
income before taxes to exclude the provision for credit losses and
certain significant items.
The net overhead ratio and the efficiency ratio are primarily
reviewed by the Company based on pre-tax adjusted earnings. The
Company believes that these measures provide a more meaningful view
of the Company's operating efficiency and expense management. The
net overhead ratio, based on pre-tax adjusted earnings, is
calculated by netting total adjusted non-interest expense and total
adjusted non-interest income, annualizing this amount, and dividing
it by total average assets. Adjusted non-interest expense is
calculated by subtracting OREO expenses, covered loan collection
expense, defeasance cost, seasonal payroll tax fluctuation and fees
to terminate repurchase agreements. Adjusted non-interest income is
calculated by adding back the recourse obligation on loans
previously sold and subtracting gains or adding back losses on
foreign currency remeasurement, investment partnerships, bargain
purchase, trading and available-for-sale securities activity.
The efficiency ratio, based on pre-tax adjusted earnings, is
calculated by dividing adjusted non-interest expense by adjusted
taxable-equivalent net revenue. Adjusted taxable-equivalent net
revenue is comprised of fully taxable equivalent net interest
income and adjusted non-interest income.
The following table presents 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 for the last 5 quarters:
|
Three Months
Ended |
Years
Ended |
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
December
31, |
(Dollars and shares in thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
2013 |
2012 |
Calculation of Net Interest Margin
and Efficiency Ratio |
|
|
|
|
|
|
|
(A) Interest Income
(GAAP) |
$ 160,582 |
$ 161,168 |
$ 156,646 |
$ 152,313 |
$ 156,643 |
$ 630,709 |
$ 627,021 |
Taxable-equivalent
adjustment: |
|
|
|
|
|
|
|
- Loans |
226 |
241 |
225 |
150 |
159 |
842 |
576 |
- Liquidity Management
Assets |
347 |
361 |
356 |
343 |
349 |
1,407 |
1,363 |
- Other Earning Assets |
(1) |
7 |
4 |
1 |
1 |
11 |
8 |
Interest Income - FTE |
$ 161,154 |
$ 161,777 |
$ 157,231 |
$ 152,807 |
$ 157,152 |
$ 632,969 |
$ 628,968 |
(B) Interest Expense
(GAAP) |
18,274 |
19,386 |
20,822 |
21,600 |
23,867 |
80,082 |
107,505 |
Net interest income - FTE |
$ 142,880 |
$ 142,391 |
$ 136,409 |
$ 131,207 |
$ 133,285 |
$ 552,887 |
$ 521,463 |
(C) Net Interest Income (GAAP) (A
minus B) |
$ 142,308 |
$ 141,782 |
$ 135,824 |
$ 130,713 |
$ 132,776 |
$ 550,627 |
$ 519,516 |
(D) Net interest margin
(GAAP) |
3.51% |
3.55% |
3.49% |
3.40% |
3.39% |
3.49% |
3.47% |
Net interest margin - FTE |
3.53% |
3.57% |
3.50% |
3.41% |
3.40% |
3.50% |
3.49% |
(E) Efficiency ratio
(GAAP) |
66.15% |
64.80% |
64.15% |
63.95% |
66.30% |
64.76% |
66.02% |
Efficiency ratio -
FTE |
65.95% |
64.60% |
63.97% |
63.78% |
66.13% |
64.57% |
65.85% |
Efficiency ratio -
Based on pre-tax adjusted earnings |
64.81% |
64.00% |
63.78% |
63.46% |
62.62% |
64.01% |
62.38% |
(F) Net Overhead Ratio
(GAAP) |
1.79% |
1.65% |
1.49% |
1.47% |
1.48% |
1.60% |
1.59% |
Net Overhead ratio -
Based on pre-tax adjusted earnings |
1.68% |
1.63% |
1.51% |
1.47% |
1.39% |
1.57% |
1.48% |
Calculation of Tangible Common Equity
ratio (at period end) |
|
|
|
|
|
|
|
Total shareholders' equity |
$ 1,900,589 |
$ 1,873,566 |
$ 1,836,660 |
$ 1,825,688 |
$ 1,804,705 |
|
|
(G) Less: Preferred stock |
(126,477) |
(126,500) |
(176,476) |
(176,441) |
(176,406) |
|
|
Less: Intangible assets |
(393,760) |
(376,291) |
(377,008) |
(363,142) |
(366,348) |
|
|
(H) Total tangible common shareholders'
equity |
$ 1,380,352 |
$ 1,370,775 |
$ 1,283,176 |
$ 1,286,105 |
$ 1,261,951 |
|
|
Total assets |
$ 18,097,783 |
$ 17,682,548 |
$ 17,613,546 |
$ 17,074,247 |
$ 17,519,613 |
|
|
Less: Intangible assets |
(393,760) |
(376,291) |
(377,008) |
(363,142) |
(366,348) |
|
|
(I) Total tangible assets |
$ 17,704,023 |
$ 17,306,257 |
$ 17,236,538 |
$ 16,711,105 |
$ 17,153,265 |
|
|
Tangible common equity ratio
(H/I) |
7.8% |
7.9% |
7.4% |
7.7% |
7.4% |
|
|
Tangible common equity ratio,
assuming full conversion of preferred stock ((H-G)/I) |
8.5% |
8.7% |
8.5% |
8.8% |
8.4% |
|
|
Calculation of Pre-Tax Adjusted
Earnings |
|
|
|
|
|
|
|
Income before taxes |
$ 57,822 |
$ 58,082 |
$ 56,250 |
$ 52,286 |
$ 48,871 |
$ 224,440 |
$ 180,132 |
Add: Provision for credit losses |
3,850 |
11,114 |
15,382 |
15,687 |
19,546 |
46,033 |
76,436 |
Add: OREO expenses (income), net |
2,671 |
2,499 |
2,284 |
(1,620) |
5,269 |
5,834 |
22,103 |
Add: Recourse obligation on loans previously
sold |
(20) |
(732) |
815 |
(755) |
— |
(692) |
— |
Add: Covered loan collection expense |
279 |
462 |
276 |
699 |
836 |
1,716 |
4,759 |
Add: Defeasance cost |
— |
— |
— |
— |
— |
— |
996 |
Add: Seasonal payroll tax fluctuation |
(186) |
(1,112) |
(312) |
1,610 |
(873) |
— |
— |
Add: FDIC Indemnification Asset
Accretion |
357 |
(1,209) |
16 |
1,208 |
407 |
372 |
1,387 |
Add: (Gain) loss on foreign currency
remeasurement |
(16) |
(203) |
33 |
22 |
(826) |
(164) |
(1) |
Add: Fees for Termination of Repurchase
Agreements |
— |
— |
— |
— |
2,110 |
— |
2,110 |
Less: Gain from investment partnerships |
(1,467) |
(561) |
(562) |
(1,058) |
(373) |
(3,648) |
(2,551) |
Less: Gain on bargain purchases, net |
— |
— |
— |
— |
(85 |
— |
(7,503) |
Add: Trading losses (gains), net |
278 |
1,655 |
(3,260) |
435 |
120 |
(892) |
1,900 |
Add: Losses (gains) on available-for-sale
securities, net |
3,328 |
(75) |
(2) |
(251) |
(2,561) |
3,000 |
(4,895) |
Pre-tax adjusted
earnings |
$ 66,896 |
$ 69,920 |
$ 70,920 |
$ 68,263 |
$ 72,441 |
$ 275,999 |
$ 274,873 |
Calculation of book value per
share |
|
|
|
|
|
|
|
Total shareholders' equity |
$ 1,900,589 |
$ 1,873,566 |
$ 1,836,660 |
$ 1,825,688 |
$ 1,804,705 |
|
|
Less: Preferred stock |
(126,477) |
(126,500) |
(176,476) |
(176,441) |
(176,406) |
|
|
(J) Total common equity |
$ 1,774,112 |
$ 1,747,066 |
$ 1,660,184 |
$ 1,649,247 |
$ 1,628,299 |
|
|
Actual common shares outstanding |
46,117 |
39,731 |
37,725 |
37,014 |
36,858 |
|
|
Add: TEU conversion shares |
— |
6,133 |
6,145 |
6,238 |
6,241 |
|
|
(K) Common shares used for book value
calculation |
46,117 |
45,864 |
43,870 |
43,252 |
43,099 |
|
|
Book value per share
(J/K) |
$ 38.47 |
$ 38.09 |
$ 37.84 |
$ 38.13 |
$ 37.78 |
|
|
Tangible common book value per share
(H/K) |
$ 29.93 |
$ 29.89 |
$ 29.25 |
$ 29.74 |
$ 29.28 |
|
|
Calculation of return on average
common equity |
|
|
|
|
|
|
|
(L) Net income applicable to common
shares |
$ 33,707 |
33,982 |
31,690 |
29,436 |
27,473 |
$
128,815 |
102,103 |
Total average shareholders' equity |
$ 1,895,498 |
1,853,122 |
1,859,265 |
1,818,127 |
1,786,824 |
$ 1, 856,706 |
1,696,276 |
Less: Average preferred stock |
$ (126,484) |
(136,278) |
(176,454) |
(176,422) |
(176,383) |
$
(153,724) |
(149,373) |
(M) Total average common shareholders'
equity |
$ 1,769,014 |
1,716,844 |
1,682,811 |
1,641,705 |
1,610,441 |
$
1,702,982 |
1,546,903 |
Less: Average intangible assets |
$ (391,791) |
(376,667) |
(372,796) |
(365,505) |
(356,320) |
$
(376,762) |
(342,969) |
(N) Total average tangible common
shareholders' equity |
$ 1,377,223 |
1,340,177 |
1,310,015 |
1,276,200 |
1,254,121 |
$
1,326,220 |
1,203,934 |
Return on average common equity (L/M) |
7.56% |
7.85% |
7.55% |
7.27% |
6.79% |
7.56% |
6.60% |
Return on average tangible common equity
(L/N) |
9.71% |
10.06% |
9.70% |
9.35% |
8.71% |
9.71% |
8.48% |
|
LOANS |
Loan Portfolio Mix and
Growth Rates |
|
|
|
|
|
|
|
|
|
% Growth |
|
|
|
|
From (1) |
From |
|
December 31, |
September 30, |
December 31, |
September 30, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2012 |
2013 |
2012 |
Balance: |
|
|
|
|
|
Commercial |
$ 3,253,687 |
$ 3,109,121 |
$ 2,914,798 |
18% |
12% |
Commercial real-estate |
4,230,035 |
4,146,110 |
3,864,118 |
8 |
9 |
Home equity |
719,137 |
736,620 |
788,474 |
(9) |
(9) |
Residential real-estate |
434,992 |
397,707 |
367,213 |
37 |
18 |
Premium finance receivables -
commercial |
2,167,565 |
2,150,481 |
1,987,856 |
3 |
9 |
Premium finance receivables - life
insurance |
1,923,698 |
1,869,739 |
1,725,166 |
11 |
12 |
Indirect consumer (2) |
50,680 |
57,236 |
77,333 |
(45) |
(34) |
Consumer and other |
116,808 |
114,025 |
103,985 |
10 |
12 |
Total loans, net of unearned
income, excluding covered loans |
$ 12,896,602 |
$ 12,581,039 |
$ 11,828,943 |
10% |
9% |
Covered loans |
346,431 |
415,988 |
560,087 |
(66) |
(38) |
Total loans, net of unearned income |
$ 13,243,033 |
$ 12,997,027 |
$ 12,389,030 |
8% |
7% |
Mix: |
|
|
|
|
|
Commercial |
25% |
24% |
24% |
|
|
Commercial real-estate |
32 |
32 |
31 |
|
|
Home equity |
5 |
6 |
6 |
|
|
Residential real-estate |
3 |
3 |
3 |
|
|
Premium finance receivables -
commercial |
16 |
16 |
16 |
|
|
Premium finance receivables - life
insurance |
15 |
14 |
14 |
|
|
Indirect consumer (2) |
— |
1 |
1 |
|
|
Consumer and other |
1 |
1 |
1 |
|
|
Total loans, net of unearned
income, excluding covered loans |
97% |
97% |
96% |
|
|
Covered loans |
3 |
3 |
4 |
|
|
Total loans, net of unearned income |
100% |
100% |
100% |
|
|
|
|
|
|
|
|
(1) Annualized |
(2) Includes autos, boats,
snowmobiles and other indirect consumer loans. |
|
As of December 31, 2013 |
|
|
|
> 90 Days |
Allowance |
|
|
% of |
|
Past Due |
For Loan |
|
|
Total |
|
and Still |
Losses |
(Dollars in thousands) |
Balance |
Balance |
Nonaccrual |
Accruing |
Allocation |
Commercial: |
|
|
|
|
|
Commercial and industrial |
$ 1,836,206 |
24.5% |
$ 10,143 |
$ — |
$ 14,547 |
Franchise |
220,383 |
2.9 |
— |
— |
1,576 |
Mortgage warehouse lines of credit |
67,470 |
0.9 |
— |
— |
477 |
Community Advantage - homeowner
associations |
90,894 |
1.2 |
— |
— |
— |
Aircraft |
10,241 |
0.1 |
— |
— |
18 |
Asset-based lending |
735,093 |
9.8 |
637 |
— |
5,174 |
Tax exempt |
161,239 |
2.2 |
— |
— |
1,158 |
Leases |
109,831 |
1.5 |
— |
— |
4 |
Other |
11,147 |
0.1 |
— |
— |
75 |
Purchased non-covered commercial loans
(1) |
11,183 |
0.2 |
— |
274 |
63 |
Total commercial |
$ 3,253,687 |
43.4% |
$ 10,780 |
$ 274 |
$ 23,092 |
Commercial Real-Estate: |
|
|
|
|
|
Residential construction |
$ 38,500 |
0.5% |
$ 149 |
$ — |
$ 775 |
Commercial construction |
136,706 |
1.8 |
6,969 |
— |
2,329 |
Land |
106,785 |
1.4 |
2,814 |
— |
3,001 |
Office |
642,241 |
8.6 |
10,087 |
— |
6,524 |
Industrial |
633,938 |
8.5 |
5,654 |
— |
5,521 |
Retail |
656,259 |
8.8 |
10,862 |
— |
6,536 |
Multi-family |
566,537 |
7.6 |
2,035 |
— |
10,473 |
Mixed use and other |
1,372,454 |
18.3 |
8,088 |
230 |
13,499 |
Purchased non-covered commercial
real-estate (1) |
76,615 |
1.1 |
— |
18,582 |
— |
Total commercial
real-estate |
$ 4,230,035 |
56.6% |
$ 46,658 |
$ 18,812 |
$ 48,658 |
Total commercial and commercial
real-estate |
$ 7,483,722 |
100.0% |
$ 57,438 |
$ 19,086 |
$ 71,750 |
|
|
|
|
|
|
Commercial real-estate - collateral location
by state: |
|
|
|
|
|
Illinois |
$ 3,557,982 |
84.1% |
|
|
|
Wisconsin |
346,810 |
8.2 |
|
|
|
Total primary
markets |
$ 3,904,792 |
92.3% |
|
|
|
Florida |
66,737 |
1.6 |
|
|
|
Arizona |
15,551 |
0.4 |
|
|
|
Indiana |
78,621 |
1.9 |
|
|
|
Other (no individual state greater than
0.5%) |
164,334 |
3.8 |
|
|
|
Total |
$ 4,230,035 |
100% |
|
|
|
|
|
|
|
|
|
(1) Purchased loans
represent loans acquired with evidence of credit quality
deterioration since origination, in accordance with ASC 310-30.
Loan agings are based upon contractually required payments. |
|
DEPOSITS |
Deposit Portfolio Mix and
Growth Rates |
|
|
|
|
|
|
|
|
|
|
% Growth |
|
|
|
|
From (1) |
From |
|
December 31, |
September 30, |
December 31, |
September 30, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2012 |
2013 |
2012 |
Balance: |
|
|
|
|
|
Non-interest bearing |
$ 2,721,771 |
$ 2,622,518 |
$ 2,396,264 |
15% |
14% |
NOW |
1,953,882 |
1,922,906 |
2,022,957 |
6 |
(3) |
Wealth Management deposits (2) |
1,013,850 |
1,099,509 |
991,902 |
(31) |
2 |
Money Market |
3,359,999 |
3,423,413 |
2,761,498 |
(7) |
22 |
Savings |
1,392,575 |
1,318,147 |
1,275,012 |
22 |
9 |
Time certificates of deposit |
4,226,712 |
4,260,953 |
4,980,911 |
(3) |
(15) |
Total deposits |
$ 14,668,789 |
$ 14,647,446 |
$ 14,428,544 |
1% |
2% |
Mix: |
|
|
|
|
|
Non-interest bearing |
19% |
18% |
17% |
|
|
NOW |
13 |
13 |
14 |
|
|
Wealth Management deposits (2) |
7 |
8 |
7 |
|
|
Money Market |
23 |
23 |
19 |
|
|
Savings |
9 |
9 |
9 |
|
|
Time certificates of deposit |
29 |
29 |
34 |
|
|
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. |
|
Time Certificates of
Deposit |
Maturity/Re-pricing
Analysis |
As of December 31,
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted- |
|
CDARs & |
|
|
|
|
Average |
|
Brokered |
MaxSafe |
Variable Rate |
Other Fixed |
Total Time |
Rate of Maturing |
|
Certificates |
Certificates |
Certificates |
Rate Certificates |
Certificates of |
Time Certificates |
(Dollars in thousands) |
of Deposit (1) |
of Deposit (1) |
of Deposit (2) |
of Deposit (1) |
Deposit |
of Deposit
(3) |
1-3 months |
$ 39,914 |
$ 88,755 |
$ 157,657 |
$ 713,476 |
$ 999,802 |
0.61% |
4-6 months |
5,192 |
45,810 |
— |
600,559 |
651,561 |
0.63% |
7-9 months |
18,237 |
54,915 |
— |
447,832 |
520,984 |
0.71% |
10-12 months |
— |
37,007 |
— |
437,520 |
474,527 |
0.66% |
13-18 months |
131,653 |
14,059 |
— |
471,285 |
616,997 |
1.25% |
19-24 months |
38,475 |
32,452 |
— |
214,701 |
285,628 |
1.26% |
24+ months |
163,712 |
8,402 |
— |
505,099 |
677,213 |
1.22% |
Total |
$ 397,183 |
$ 281,400 |
$ 157,657 |
$ 3,390,472 |
4,226,712 |
0.87% |
|
|
|
|
|
|
|
(1) This category of
certificates of deposit is shown by contractual maturity date. |
(2) This category includes
variable rate certificates of deposit and savings certificates with
the majority repricing on at least a monthly basis. |
(3) Weighted-average rate
excludes the impact of purchase accounting fair value
adjustments. |
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 fourth quarter
of 2013 compared to the fourth quarter of 2012 (linked
quarters):
|
Three months
ended December 31, 2013 |
Three months ended
December 31, 2012 |
(Dollars in thousands) |
Average |
Interest |
Rate |
Average |
Interest |
Rate |
Liquidity management assets (1) (2)
(7) |
$2,613,876 |
$11,185 |
1.70% |
$2,949,034 |
$9,844 |
1.33% |
Other earning assets (2) (3) (7) |
28,746 |
215 |
2.95 |
27,482 |
203 |
2.95 |
Loans, net of unearned income (2) (4)
(7) |
13,043,666 |
142,071 |
4.32 |
12,001,433 |
134,347 |
4.45 |
Covered loans |
388,148 |
7,683 |
7.85 |
626,449 |
12,758 |
8.10 |
Total earning assets (7) |
$16,074,436 |
$161,154 |
3.98% |
$15,604,398 |
$157,152 |
4.01% |
Allowance for loan and covered loan
losses |
(122,060) |
|
|
(135,156) |
|
|
Cash and due from banks |
237,138 |
|
|
206,914 |
|
|
Other assets |
1,646,485 |
|
|
1,572,494 |
|
|
Total assets |
$17,835,999 |
|
|
$17,248,650 |
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$11,945,314 |
$12,488 |
0.41% |
$11,709,058 |
$16,209 |
0.55% |
Federal Home Loan Bank advances |
389,583 |
2,700 |
2.75 |
414,289 |
2,835 |
2.72 |
Notes payable and other borrowings |
251,168 |
1,145 |
1.81 |
397,807 |
1,565 |
1.57 |
Secured borrowings - owed to securitization
investors |
— |
— |
— |
— |
— |
— |
Subordinated notes |
4,022 |
16 |
1.56 |
15,000 |
66 |
1.72 |
Junior subordinated notes |
249,493 |
1,925 |
3.02 |
249,493 |
3,192 |
5.01 |
Total interest-bearing
liabilities |
$12,839,580 |
$18,274 |
0.56% |
$12,785,647 |
$23,867 |
0.74% |
Non-interest bearing deposits |
2,723,360 |
|
|
2,314,935 |
|
|
Other liabilities |
377,561 |
|
|
361,244 |
|
|
Equity |
1,895,498 |
|
|
1,786,824 |
|
|
Total liabilities and
shareholders' equity |
$17,835,999 |
|
|
$17,248,650 |
|
|
Interest rate spread (5) (7) |
|
|
3.42% |
|
|
3.27% |
Net free funds/contribution (6) |
$3,234,856 |
|
0.11% |
$2,818,751 |
|
0.13% |
Net interest income/Net interest margin
(7) |
|
$142,880 |
3.53% |
|
$133,285 |
3.40% |
|
|
|
|
|
|
|
(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
December 31, 2013 and 2012 were $572,000 and $509,000,
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 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 fourth quarter
of 2013 compared to the third quarter of 2013 (sequential
quarters):
|
Three months
ended December 31, 2013 |
Three months ended
September 30, 2013 |
|
(Dollars in thousands) |
Average |
Interest |
Rate |
Average |
Interest |
Rate |
|
Liquidity management assets (1) (2)
(7) |
$2,613,876 |
$11,185 |
1.70% |
$2,262,839 |
$10,504 |
1.84% |
|
Other earning assets (2) (3) (7) |
28,746 |
215 |
2.95 |
27,426 |
221 |
3.19 |
|
Loans, net of unearned income (2) (4)
(7) |
13,043,666 |
142,071 |
4.32 |
13,113,138 |
142,085 |
4.30 |
|
Covered loans |
388,148 |
7,683 |
7.85 |
435,961 |
8,967 |
8.16 |
|
Total earning assets (7) |
$16,074,436 |
$161,154 |
3.98% |
$15,839,364 |
$161,777 |
4.05% |
|
Allowance for loan and covered loan
losses |
(122,060) |
|
|
(126,164) |
|
|
|
Cash and due from banks |
237,138 |
|
|
209,539 |
|
|
|
Other assets |
1,646,485 |
|
|
1,566,832 |
|
|
|
Total assets |
$17,835,999 |
|
|
$17,489,571 |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$11,945,314 |
$12,488 |
0.41% |
$11,817,636 |
$12,524 |
0.42% |
|
Federal Home Loan Bank advances |
389,583 |
2,700 |
2.75 |
454,563 |
2,729 |
2.38 |
|
Notes payable and other borrowings |
251,168 |
1,145 |
1.81 |
256,318 |
910 |
1.41 |
|
Secured borrowings - owed to securitization
investors |
— |
— |
— |
— |
— |
— |
|
Subordinated notes |
4,022 |
16 |
1.56 |
10,000 |
40 |
1.57 |
|
Junior subordinated notes |
249,493 |
1,925 |
3.02 |
249,493 |
3,183 |
4.99 |
|
Total interest-bearing
liabilities |
$12,839,580 |
$18,274 |
0.56% |
$12,788,010 |
$19,386 |
0.60% |
|
Non-interest bearing deposits |
2,723,360 |
|
|
2,552,182 |
|
|
|
Other liabilities |
377,561 |
|
|
296,257 |
|
|
|
Equity |
1,895,498 |
|
|
1,853,122 |
|
|
|
Total liabilities and
shareholders' equity |
$17,835,999 |
|
|
$17,489,571 |
|
|
|
Interest rate spread (5) (7) |
|
|
3.42% |
|
|
3.45% |
|
Net free funds/contribution (6) |
$3,234,856 |
|
0.11% |
$3,051,354 |
|
0.12% |
|
Net interest income/Net interest margin
(7) |
|
$142,880 |
3.53% |
|
$142,391 |
3.57% |
|
|
|
|
|
|
|
|
|
(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
December 31, 2013 was $572,000 and for the three months ended
September 30, 2013 was $609,000. |
|
(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 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 year ended
December 31, 2013 compared to the year ended December 31, 2012:
|
Year Ended
December 31, 2013 |
Year Ended December 31,
2012 |
(Dollars in thousands) |
Average |
Interest |
Rate |
Average |
Interest |
Rate |
Liquidity management assets (1) (2)
(7) |
$2,557,223 |
$42,876 |
1.68% |
$2,763,154 |
$43,638 |
1.58% |
Other earning assets (2) (3) (7) |
26,554 |
816 |
3.07 |
29,967 |
882 |
2.94 |
Loans, net of unearned income (2) (4)
(7) |
12,742,202 |
553,035 |
4.34 |
11,520,499 |
530,446 |
4.60 |
Covered loans |
462,518 |
36,242 |
7.84 |
637,607 |
54,002 |
8.47 |
Total earning assets (7) |
$15,788,497 |
$632,969 |
4.01% |
$14,951,227 |
$628,968 |
4.21% |
Allowance for loan and covered loan
losses |
(124,970) |
|
|
(134,946) |
|
|
Cash and due from banks |
222,453 |
|
|
172,215 |
|
|
Other assets |
1,582,269 |
|
|
1,541,121 |
|
|
Total assets |
$17,468,249 |
|
|
$16,529,617 |
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$11,846,854 |
$53,191 |
0.45% |
$11,069,056 |
$68,305 |
0.62% |
Federal Home Loan Bank advances |
423,221 |
11,013 |
2.60 |
459,972 |
12,104 |
2.63 |
Notes payable and other borrowings |
269,311 |
4,341 |
1.61 |
437,970 |
8,965 |
2.05 |
Secured borrowings - owed to securitization
investors |
— |
— |
— |
273,753 |
5,087 |
1.86 |
Subordinated notes |
10,521 |
168 |
1.57 |
22,158 |
428 |
1.90 |
Junior subordinated notes |
249,493 |
11,369 |
4.49 |
249,493 |
12,616 |
4.97 |
Total interest-bearing liabilities |
$12,799,400 |
$80,082 |
0.62% |
$12,512,402 |
$107,505 |
0.86% |
Non-interest bearing deposits |
2,487,761 |
|
|
2,059,160 |
|
|
Other liabilities |
324,382 |
|
|
261,779 |
|
|
Equity |
$1,856,706 |
|
|
$1,696,276 |
|
|
Total liabilities and shareholders'
equity |
$17,468,249 |
|
|
$16,529,617 |
|
|
Interest rate spread (5) (7) |
|
|
3.39% |
|
|
3.35% |
Net free funds/contribution (6) |
$2,989,097 |
|
0.11% |
$2,438,825 |
|
0.14% |
Net interest income/Net interest margin
(7) |
|
$552,887 |
3.50% |
|
$521,463 |
3.49% |
|
|
|
|
|
|
|
(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 both of the years ended
December 31, 2013 and 2012 were $2.3 million and $1.9 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 fourth quarter of 2013, non-interest income totaled
$46.4 million, a decrease of $18.8 million, or 29%, compared to the
fourth quarter of 2012. The decrease was primarily
attributable to lower mortgage banking revenues and losses on
available-for-sale securities, partially offset by higher wealth
management revenues.
The following table presents non-interest income by category for
the periods presented:
|
Three months
ended December 31, |
$ |
% |
(Dollars in thousands) |
2013 |
2012 |
Change |
Change |
Brokerage |
$7,200 |
$6,404 |
$796 |
12 |
Trust and asset management |
9,065 |
7,230 |
1,835 |
25 |
Total wealth management |
16,265 |
13,634 |
2,631 |
19 |
Mortgage banking |
19,296 |
34,702 |
(15,406) |
(44) |
Service charges on deposit accounts |
5,230 |
4,534 |
696 |
15 |
(Losses) gains on available-for-sale
securities, net |
(3,328) |
2,561 |
(5,889) |
NM |
Fees from covered call options |
1,856 |
2,156 |
(300) |
(14) |
Gain on bargain purchases, net |
— |
85 |
(85) |
NM |
Trading losses, net |
(278) |
(120) |
(158) |
NM |
Other: |
|
|
|
|
Interest rate swap fees |
1,537 |
2,178 |
(641) |
(29) |
Bank Owned Life Insurance |
1,074 |
686 |
388 |
57 |
Administrative services |
878 |
867 |
11 |
1 |
Miscellaneous |
3,831 |
3,906 |
(75) |
(2) |
Total Other |
7,320 |
7,637 |
(317) |
(4) |
Total Non-Interest Income |
$46,361 |
$65,189 |
$(18,828) |
(29) |
NM - Not Meaningful |
|
|
|
|
|
|
|
|
|
|
Years ended
December 31, |
$ |
% |
(Dollars in thousands) |
2013 |
2012 |
Change |
Change |
Brokerage |
$29,281 |
$25,477 |
$3,804 |
15 |
Trust and asset management |
33,761 |
27,203 |
6,558 |
24 |
Total wealth management |
63,042 |
52,680 |
10,362 |
20 |
Mortgage banking |
106,857 |
109,970 |
(3,113) |
(3) |
Service charges on deposit accounts |
20,366 |
16,971 |
3,395 |
20 |
(Losses) gains on available-for-sale
securities, net |
(3,000) |
4,895 |
(7,895) |
NM |
Fees from covered call options |
4,773 |
10,476 |
(5,703) |
(54) |
Gain on bargain purchases, net |
— |
7,503 |
(7,503) |
NM |
Trading gains (losses), net |
892 |
(1,900) |
2,792 |
NM |
Other: |
|
|
|
|
Interest rate swap fees |
7,629 |
9,381 |
(1,752) |
(19) |
Bank Owned Life Insurance |
3,446 |
2,920 |
526 |
18 |
Administrative services |
3,390 |
3,281 |
109 |
3 |
Miscellaneous |
15,002 |
9,915 |
5,087 |
51 |
Total Other |
29,467 |
25,497 |
3,970 |
16 |
Total Non-Interest Income |
$222,397 |
$226,092 |
$(3,695) |
(2) |
NM - Not Meaningful |
|
|
|
|
The significant changes in non-interest income for the quarter
ended December 31, 2013 compared to the quarter ended December 31,
2012 are discussed below.
Wealth management revenue totaled $16.3 million in the fourth
quarter of 2013 and $13.6 million in the fourth quarter of 2012, an
increase of 19%. The increase is mostly attributable to growth
in assets from new customers and new financial advisors, as well as
an increase in existing customer activity and market appreciation.
Wealth management revenue is comprised of the trust and asset
management revenue of The Chicago Trust Company and Great Lakes
Advisors and the brokerage commissions, money managed fees and
insurance product commissions at Wayne Hummer Investments.
For the quarter ended December 31, 2013, mortgage banking
revenue totaled $19.3 million, a decrease of $15.4 million when
compared to the fourth quarter of 2012. The decrease in
mortgage banking revenue in the fourth quarter of 2013 as compared
to the fourth quarter of 2012 resulted primarily from lower
origination volumes as refinance activity declined as well as
competitive pricing pressure. Mortgage loan originations were
$742.3 million in the fourth quarter of 2013 as compared to $1.2
billion in the prior year quarter. Mortgage banking revenue
includes revenue from activities related to originating, selling
and servicing residential real estate loans for the secondary
market.
A summary of mortgage banking components is shown
below:
|
Three Months Ended |
Years Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2012 |
2013 |
2012 |
Mortgage loans originated and
sold |
$742,306 |
$940,827 |
$1,178,010 |
$3,708,364 |
$3,866,012 |
Mortgage loans serviced for
others |
$961,619 |
$981,415 |
$1,005,372 |
|
|
Fair value of mortgage servicing
rights (MSRs) |
$8,946 |
$8,608 |
$6,750 |
|
|
MSRs as a percentage of loans
serviced |
0.93% |
0.88% |
0.67% |
|
|
Service charges on deposit accounts totaled $5.2 million in the
fourth quarter of 2013, an increase of $696,000 compared to the
prior year quarter. The increase in the current quarter is
primarily a result of higher account analysis fees on deposit
accounts which have increased as a result of the Company's
commercial banking initiative as well as additional service charges
on deposit accounts from acquired institutions.
The Company recognized $3.3 million of losses on
available-for-sale securities in the fourth quarter of 2013
compared to net gains of $2.6 million in the fourth quarter of
2012. The $3.3 million of losses related to other than
temporary impairment recorded on one security as a result of the
Volcker Rule.
NON-INTEREST EXPENSE
Non-interest expense for the fourth quarter of 2013 totaled
$127.0 million and decreased approximately $2.6 million, or 2%,
compared to the fourth quarter of 2012. On a full year basis,
non-interest expense for 2013 totaled $502.6 million and increased
$13.5 million, or 3%, compared to 2012.
The following table presents non-interest expense by category
for the periods presented:
|
Three months
ended December 31, |
$ |
% |
(Dollars in thousands) |
2013 |
2012 |
Change |
Change |
Salaries and employee benefits: |
|
|
|
|
Salaries |
$43,832 |
$40,457 |
3,375 |
8 |
Commissions and bonus |
18,009 |
23,968 |
(5,959) |
(25) |
Benefits |
12,208 |
11,715 |
493 |
4 |
Total salaries and employee
benefits |
74,049 |
76,140 |
(2,091) |
(3) |
Equipment |
7,260 |
6,468 |
792 |
12 |
Occupancy, net |
9,994 |
8,480 |
1,514 |
18 |
Data processing |
4,831 |
4,178 |
653 |
16 |
Advertising and marketing |
3,517 |
2,725 |
792 |
29 |
Professional fees |
4,132 |
3,158 |
974 |
31 |
Amortization of other intangible assets |
1,189 |
1,108 |
81 |
7 |
FDIC insurance |
3,036 |
3,039 |
(3) |
— |
OREO expenses, net |
2,671 |
5,269 |
(2,598) |
(49) |
Other: |
|
|
|
|
Commissions - 3rd party
brokers |
1,439 |
944 |
495 |
52 |
Postage |
1,622 |
1,856 |
(234) |
(13) |
Stationery and supplies |
1,157 |
1,095 |
62 |
6 |
Miscellaneous |
12,100 |
15,088 |
(2,988) |
(20) |
Total other |
16,318 |
18,983 |
(2,665) |
(14) |
Total Non-Interest
Expense |
$126,997 |
$129,548 |
$(2,551) |
(2) |
|
|
|
|
|
|
|
|
|
|
|
Years ended
December 31, |
$ |
% |
(Dollars in thousands) |
2013 |
2012 |
Change |
Change |
Salaries and employee benefits: |
|
|
|
|
Salaries |
$170,123 |
$155,800 |
14,323 |
9 |
Commissions and bonus |
87,837 |
84,199 |
3,638 |
4 |
Benefits |
50,834 |
48,590 |
2,244 |
5 |
Total salaries and employee
benefits |
308,794 |
288,589 |
20,205 |
7 |
Equipment |
26,450 |
23,222 |
3,228 |
14 |
Occupancy, net |
36,633 |
32,294 |
4,339 |
13 |
Data processing |
18,672 |
15,739 |
2,933 |
19 |
Advertising and marketing |
11,051 |
9,438 |
1,613 |
17 |
Professional fees |
14,922 |
15,262 |
(340) |
(2) |
Amortization of other intangible assets |
4,627 |
4,324 |
303 |
7 |
FDIC insurance |
12,728 |
13,422 |
(694) |
(5) |
OREO expenses, net |
5,834 |
22,103 |
(16,269) |
(74) |
Other: |
|
|
|
|
Commissions - 3rd party
brokers |
5,078 |
4,140 |
938 |
23 |
Postage |
5,591 |
5,729 |
(138) |
(2) |
Stationery and supplies |
3,987 |
4,003 |
(16) |
— |
Miscellaneous |
48,184 |
50,775 |
(2,591) |
(5) |
Total other |
62,840 |
64,647 |
(1,807) |
(3) |
Total Non-Interest
Expense |
$502,551 |
$489,040 |
$13,511 |
3 |
The significant changes in non-interest expense for the quarter
ended December 31, 2013 compared to the quarter ended December 31,
2012 are discussed below.
Salaries and employee benefits expense decreased $2.1 million,
or 3%, in the fourth quarter of 2013 compared to the fourth quarter
of 2012 primarily due to a $6.0 million decrease in bonus and
commissions primarily related to lower expenses on variable pay
based arrangements, partially offset by a $3.4 million increase in
salaries caused by the addition of employees from the various
acquisitions and larger staffing as the Company grows, and a
$493,000 increase in benefits (primarily health plan and
payroll taxes related).
Equipment expense totaled $7.3 million for the fourth quarter of
2013, an increase of $792,000 compared to the fourth quarter
of 2012. The increase is primarily the result of
additional equipment depreciation as well as maintenance and repair
costs associated with the increasing number of facilities due to
acquisition activity. Equipment expense includes depreciation
on equipment, maintenance and repairs, equipment rental and
software license fees.
Occupancy expense for the fourth quarter of 2013 was $10.0
million, an increase of $1.5 million, or 18%, compared to the same
period in 2012. The increase is primarily the result of
depreciation and property taxes on owned locations which have
increased as a result of acquisitions and new branches opening
in 2013. Occupancy expense includes depreciation on premises,
real estate taxes, utilities and maintenance of premises, as well
as net rent expense for leased premises.
Data processing expenses increased $653,000 in the fourth
quarter of 2013, totaling $4.8 million, compared to $4.2 million in
the fourth quarter of 2012. The amount of data processing expenses
incurred fluctuates based on the overall growth of loan and deposit
accounts as well as additional expenses recorded related to bank
acquisition transactions.
Advertising and marketing expenses for the fourth quarter of
2013 were $3.5 million, an increase of $792,000 from the fourth
quarter of 2012. The increase is partially due to the Company's
continued growth in size and increased branding cost associated
with the Company's overall goal of becoming "Chicago's Bank."
Professional fees for the fourth quarter of 2013 were $4.1
million, an increase of $974,000, or 31%, compared to the same
period in 2012. This increase is primarily the result of increased
legal costs in the current quarter related to credit costs and
acquisitions. Professional fees include legal, audit and tax fees,
external loan review costs and normal regulatory exam
assessments.
OREO expense totaled $2.7 million in the fourth quarter of 2013,
a decrease of $2.6 million compared to $5.3 million in the fourth
quarter of 2012. The decrease in total OREO expenses is
primarily related to lower valuation adjustments on properties held
in OREO in the current quarter. OREO costs include all costs
related to obtaining, maintaining and selling other real estate
owned properties.
Miscellaneous expenses in the fourth quarter of 2013 decreased
$3.0 million, or 20%, compared to the same period in the prior
year. The decrease in the fourth quarter of 2013 compared to
the same period in the prior year is primarily attributable to $2.1
million of fees paid on the termination of approximately $68.4
million longer-term, higher rate repurchase agreements in the prior
year quarter. 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.
ASSET QUALITY
Allowance for Credit Losses, excluding covered loans
|
Three months
ended |
Years
Ended |
|
December
31, |
December
31, |
(Dollars in thousands) |
2013 |
2012 |
2013 |
2012 |
Allowance for loan losses at
beginning of period |
$107,188 |
$112,287 |
$107,351 |
$110,381 |
Provision for credit
losses |
3,904 |
20,672 |
45,984 |
72,412 |
Other adjustments |
(195) |
(289) |
(938) |
(1,333) |
Reclassification from/(to) allowance
for unfunded lending-related commitments |
504 |
(260) |
640 |
693 |
Charge-offs: |
|
|
|
|
Commercial |
5,209 |
9,782 |
14,123 |
22,405 |
Commercial real estate |
7,517 |
9,084 |
32,745 |
43,539 |
Home equity |
1,468 |
3,496 |
6,361 |
9,361 |
Residential real estate |
385 |
2,470 |
2,958 |
4,060 |
Premium finance receivables -
commercial |
1,395 |
1,284 |
5,063 |
3,751 |
Premium finance receivables -
life insurance |
14 |
13 |
17 |
29 |
Indirect consumer |
59 |
64 |
130 |
221 |
Consumer and other |
578 |
570 |
980 |
1,024 |
Total charge-offs |
16,625 |
26,763 |
62,377 |
84,390 |
Recoveries: |
|
|
|
|
Commercial |
336 |
368 |
1,655 |
1,220 |
Commercial real estate |
1,302 |
978 |
2,526 |
6,635 |
Home equity |
56 |
43 |
432 |
428 |
Residential real estate |
202 |
9 |
289 |
22 |
Premium finance receivables -
commercial |
230 |
250 |
1,108 |
871 |
Premium finance receivables -
life insurance |
2 |
15 |
13 |
69 |
Indirect consumer |
9 |
27 |
53 |
103 |
Consumer and other |
9 |
14 |
186 |
240 |
Total recoveries |
2,146 |
1,704 |
6,262 |
9,588 |
Net
charge-offs |
(14,479) |
(25,059) |
(56,115) |
(74,802) |
Allowance for loan
losses at period end |
$96,922 |
$107,351 |
$96,922 |
$107,351 |
Allowance for unfunded
lending-related commitments at period end |
719 |
14,647 |
719 |
14,647 |
Allowance for credit
losses at period end |
$97,641 |
$121,998 |
$97,641 |
$121,998 |
Annualized net
charge-offs by category as a percentage of its own respective
category's average: |
|
|
|
|
Commercial |
0.61% |
1.35% |
0.41% |
0.81% |
Commercial real estate |
0.59 |
0.86 |
0.74 |
1.02 |
Home equity |
0.77 |
1.72 |
0.79 |
1.08 |
Residential real estate |
0.10 |
1.19 |
0.35 |
0.51 |
Premium finance receivables -
commercial |
0.21 |
0.21 |
0.19 |
0.16 |
Premium finance receivables -
life insurance |
— |
— |
— |
— |
Indirect consumer |
0.37 |
0.19 |
0.12 |
0.16 |
Consumer and other |
1.72 |
1.86 |
0.65 |
0.66 |
Total loans, net of unearned
income, excluding covered loans |
0.44% |
0.83% |
0.44% |
0.65% |
Net charge-offs as a
percentage of the provision for credit losses |
370.90% |
121.22% |
122.04% |
103.30% |
Loans at
period-end |
|
|
$12,896,602 |
$11,828,943 |
Allowance for loan
losses as a percentage of loans at period end |
|
|
0.75% |
0.91% |
Allowance for credit
losses as a percentage of loans at period end |
|
|
0.76% |
1.03% |
The allowance for credit losses, excluding the allowance for
covered loan 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 (separate liability account)
relates to certain amounts that Wintrust is committed to lend but
for which funds have not yet been disbursed. The provision for
credit losses, excluding the provision for covered loan 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).
The provision for credit losses, excluding the provision for
covered loan losses, totaled $3.9 million for the fourth quarter of
2013, $11.6 million for the third quarter of 2013 and $20.7 million
for the fourth quarter of 2012. For the quarter ended
December 31, 2013, net charge-offs, excluding covered loans,
totaled $14.5 million compared to $11.3 million in the third
quarter of 2013 and $25.1 million recorded in the fourth quarter of
2012. Annualized net charge-offs as a percentage of average loans,
excluding covered loans, were 0.44% in the fourth quarter of 2013,
0.34% in the third quarter of 2013 and 0.83% in the fourth quarter
of 2012. Net charge-offs increased in the fourth quarter of 2013
compared to the third quarter of 2013 primarily as a result of a
$2.3 million increase in net charge-offs within the commercial loan
portfolio.
The allowance for unfunded lending-related commitments totaled
$719,000 as of December 31, 2013 compared to $1.3 million as
of September 30, 2013 and $14.6 million as of December 31,
2012. The decrease from the third quarter of 2013 is primarily
attributable to the expiration of one letter of credit. When
compared to the prior year, the decrease was primarily attributable
to the funding in the second and third quarter of 2013 of two
letters of credit. The lower level of the allowance for credit
losses in 2013, reflects the improvements in credit quality metrics
compared to 2012.
Management believes the allowance for credit 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
credit 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 Company also provides a provision for covered loan losses on
covered loans and maintains an allowance for covered loan losses on
covered loans. Please see "Covered Assets" later in this document
for more detail.
The tables below summarizes the calculation of allowance for
loan losses for the Company's core loan portfolio and consumer,
niche and purchased loan portfolio as of December 31, 2013 and
September 30, 2013.
|
As of December
31, 2013 |
|
|
|
As a percentage |
|
Recorded |
Calculated |
of its own respective |
(Dollars in thousands) |
Investment |
Allowance |
category's
balance |
Commercial: |
|
|
|
Commercial and industrial
(1) |
$1,794,953 |
$14,443 |
0.80% |
Asset-based lending (1) |
730,170 |
5,155 |
0.71 |
Tax exempt |
160,850 |
1,158 |
0.72 |
Leases (1) |
109,631 |
4 |
— |
Other (1) |
11,147 |
75 |
0.67 |
Commercial real-estate: |
|
|
|
Residential construction |
37,301 |
769 |
2.06 |
Commercial construction
(1) |
134,618 |
2,329 |
1.73 |
Land |
99,959 |
2,992 |
2.99 |
Office (1) |
615,818 |
6,407 |
1.04 |
Industrial (1) |
621,732 |
5,456 |
0.88 |
Retail (1) |
629,293 |
6,432 |
1.02 |
Multi-family (1) |
526,480 |
10,331 |
1.96 |
Mixed use and other (1) |
1,259,755 |
13,194 |
1.05 |
Home equity (1) |
692,304 |
12,503 |
1.81 |
Residential real-estate (1) |
404,802 |
4,978 |
1.23 |
Total core loan
portfolio |
$7,828,813 |
$86,226 |
1.10% |
Commercial: |
|
|
|
Franchise |
$220,383 |
$1,576 |
0.72% |
Mortgage warehouse lines of
credit |
67,470 |
477 |
0.71 |
Community Advantage - homeowner
associations |
90,894 |
— |
— |
Aircraft |
8,914 |
18 |
0.20 |
Purchased non-covered
commercial loans (2) |
59,275 |
186 |
0.31 |
Commercial real-estate: |
|
|
|
Purchased non-covered
commercial real-estate (2) |
305,079 |
748 |
0.25 |
Purchased non-covered home equity (2) |
26,833 |
108 |
0.40 |
Purchased non-covered residential real-estate
(2) |
30,190 |
130 |
0.43 |
Premium finance receivables |
|
|
|
U.S. commercial insurance
loans |
1,892,755 |
4,657 |
0.25 |
Canada commercial insurance
loans (2) |
274,810 |
185 |
0.07 |
Life insurance loans (1) |
1,499,792 |
741 |
0.05 |
Purchased life insurance loans
(2) |
423,906 |
— |
— |
Indirect consumer |
50,680 |
182 |
0.36 |
Consumer and other (1) |
106,303 |
1,631 |
1.53 |
Purchased non-covered consumer and other
(2) |
10,505 |
57 |
0.54 |
Total consumer, niche
and purchased loan portfolio |
$5,067,789 |
$10,696 |
0.21% |
Total loans, net of
unearned income, excluding covered loans |
$12,896,602 |
$96,922 |
0.75% |
|
|
|
|
(1) Excludes purchased
loans reported in accordance with ASC 310-20 and ASC 310-30. |
(2) Purchased loans
represent loans reported in accordance with ASC 310-20 and ASC
310-30. |
|
|
As of September
30, 2013 |
|
|
|
As a percentage |
|
Recorded |
Calculated |
of its own respective |
(Dollars in thousands) |
Investment |
Allowance |
category's
balance |
Commercial: |
|
|
|
Commercial and industrial
(1) |
$1,701,689 |
$17,295 |
1.02% |
Asset-based lending (1) |
723,583 |
6,674 |
0.92 |
Tax exempt |
147,638 |
1,165 |
0.79 |
Leases |
101,395 |
253 |
0.25 |
Other |
90 |
1 |
1.11 |
Commercial real-estate: |
|
|
|
Residential construction |
39,916 |
919 |
2.30 |
Commercial construction
(1) |
145,568 |
2,175 |
1.49 |
Land |
107,864 |
3,879 |
3.60 |
Office (1) |
615,118 |
5,288 |
0.86 |
Industrial (1) |
618,046 |
5,484 |
0.89 |
Retail (1) |
594,648 |
6,837 |
1.15 |
Multi-family (1) |
515,337 |
11,294 |
2.19 |
Mixed use and other (1) |
1,263,025 |
14,228 |
1.13 |
Home equity (1) |
713,288 |
15,322 |
2.15 |
Residential real-estate (1) |
381,270 |
5,237 |
1.37 |
Total core loan
portfolio |
$7,668,475 |
$96,051 |
1.25% |
Commercial: |
|
|
|
Franchise |
$213,328 |
$1,715 |
0.80% |
Mortgage warehouse lines of
credit |
71,383 |
624 |
0.87 |
Community Advantage - homeowner
associations |
90,504 |
226 |
0.25 |
Aircraft |
12,601 |
32 |
0.25 |
Purchased non-covered
commercial loans (2) |
46,910 |
256 |
0.55 |
Commercial real-estate: |
|
|
|
Purchased non-covered
commercial real-estate (2) |
246,588 |
715 |
0.29 |
Purchased non-covered home equity (2) |
23,332 |
39 |
0.17 |
Purchased non-covered residential real-estate
(2) |
16,437 |
20 |
0.12 |
Premium finance receivables |
|
|
|
U.S. commercial insurance
loans |
1,874,942 |
4,625 |
0.25 |
Canada commercial insurance
loans (2) |
275,539 |
183 |
0.07 |
Life insurance loans (1) |
1,409,856 |
679 |
0.05 |
Purchased life insurance loans
(2) |
459,883 |
— |
— |
Indirect consumer |
57,236 |
201 |
0.35 |
Consumer and other (1) |
106,575 |
1,809 |
1.70 |
Purchased non-covered consumer and other
(2) |
7,450 |
13 |
0.17 |
Total consumer, niche
and purchased loan portfolio |
$4,912,564 |
$11,137 |
0.23% |
Total loans, net of
unearned income, excluding covered loans |
$12,581,039 |
$107,188 |
0.85% |
|
|
|
|
(1) Excludes purchased
loans reported in accordance with ASC 310-20 and ASC 310-30. |
(2) Purchased loans
represent loans reported in accordance with ASC 310-20 and ASC
310-30. |
As part of a quarterly review performed by Management to
determine if the Company's allowance for loan losses is
appropriate, an analysis is prepared on the loan portfolio based
upon a breakout of core loans and consumer, niche and purchased
loans. A summary of the allowance for loan losses calculated for
the loan components in both the core loan portfolio and the
consumer, niche and purchased loan portfolio was shown on the
previous pages as of December 31, 2013 and September 30,
2013. The allowance for loan losses to core loans was 1.10%
compared to 0.21% for consumer, niche and purchased loans and 0.75%
for the entire loan portfolio as of December 31, 2013. As
of September 30, 2013, the allowance for loan losses to core
loans was 1.25% compared to 0.23% for consumer, niche and purchased
loans and 0.85% for the entire loan portfolio.
The decrease in the allowance for loan losses to core loans in
the fourth quarter of 2013 compared to the third quarter of 2013
was attributable to a decrease in core loans requiring ASC 310
reserves (specific reserves) and an increase in core loans
requiring ASC 450 reserves (general reserves). The ASC 310 reserve
as a percentage of core loans was 5.06% at December 31, 2013
compared to 8.01% at September 30, 2013. The decrease was
attributable to a $5.9 million decrease in required ASC 310
reserves on core loans during the quarter. The ASC 450 reserve as a
percentage of core loans was 1.02% at December 31, 2013 and
1.09% at September 30, 2013. The decrease was attributable to
lower ASC 450 reserve factors, which are influenced by declining
historical charge-offs.
The table below shows the aging of the Company's loan portfolio
at December 31, 2013:
|
|
90+ days |
60-89 |
30-59 |
|
|
As of December 31, 2013 |
|
and still |
days past |
days past |
|
|
(Dollars in thousands) |
Nonaccrual |
accruing |
due |
due |
Current |
Total Loans |
Loan Balances: |
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
Commercial and industrial |
$10,143 |
$— |
$4,938 |
$7,404 |
$1,813,721 |
$1,836,206 |
Franchise |
— |
— |
400 |
— |
219,983 |
220,383 |
Mortgage warehouse lines of
credit |
— |
— |
— |
— |
67,470 |
67,470 |
Community Advantage -
homeowners association |
— |
— |
— |
— |
90,894 |
90,894 |
Aircraft |
— |
— |
— |
— |
10,241 |
10,241 |
Asset-based lending |
637 |
— |
388 |
1,878 |
732,190 |
735,093 |
Tax exempt |
— |
— |
— |
— |
161,239 |
161,239 |
Leases |
— |
— |
— |
788 |
109,043 |
109,831 |
Other |
— |
— |
— |
— |
11,147 |
11,147 |
Purchased non-covered
commercial (1) |
— |
274 |
156 |
1,685 |
9,068 |
11,183 |
Total commercial |
10,780 |
274 |
5,882 |
11,755 |
3,224,996 |
3,253,687 |
Commercial real-estate |
|
|
|
|
|
|
Residential construction |
149 |
— |
— |
— |
38,351 |
38,500 |
Commercial construction |
6,969 |
— |
— |
505 |
129,232 |
136,706 |
Land |
2,814 |
— |
4,224 |
619 |
99,128 |
106,785 |
Office |
10,087 |
— |
2,265 |
3,862 |
626,027 |
642,241 |
Industrial |
5,654 |
— |
585 |
914 |
626,785 |
633,938 |
Retail |
10,862 |
— |
837 |
2,435 |
642,125 |
656,259 |
Multi-family |
2,035 |
— |
— |
348 |
564,154 |
566,537 |
Mixed use and other |
8,088 |
230 |
3,943 |
15,949 |
1,344,244 |
1,372,454 |
Purchased non-covered
commercial real-estate (1) |
— |
18,582 |
3,540 |
5,238 |
49,255 |
76,615 |
Total commercial
real-estate |
46,658 |
18,812 |
15,394 |
29,870 |
4,119,301 |
4,230,035 |
Home equity |
10,071 |
— |
1,344 |
3,060 |
704,662 |
719,137 |
Residential real estate |
14,974 |
— |
1,689 |
5,032 |
410,430 |
432,125 |
Purchased non-covered residential real estate
(1) |
— |
1,988 |
— |
— |
879 |
2,867 |
Premium finance receivables |
|
|
|
|
|
|
Commercial insurance loans |
10,537 |
8,842 |
6,912 |
24,094 |
2,117,180 |
2,167,565 |
Life insurance loans |
— |
— |
2,524 |
1,808 |
1,495,460 |
1,499,792 |
Purchased life insurance loans
(1) |
— |
— |
— |
— |
423,906 |
423,906 |
Indirect consumer |
55 |
105 |
29 |
353 |
50,138 |
50,680 |
Consumer and other |
1,082 |
— |
47 |
657 |
113,818 |
115,604 |
Purchased non-covered consumer and other
(1) |
— |
181 |
— |
— |
1,023 |
1,204 |
Total loans, net of unearned
income, excluding covered loans |
$94,157 |
$30,202 |
$33,821 |
$76,629 |
$12,661,793 |
$12,896,602 |
Covered loans |
9,425 |
56,282 |
5,877 |
7,937 |
266,910 |
346,431 |
Total loans, net of unearned
income |
$103,582 |
$86,484 |
$39,698 |
$84,566 |
$12,928,703 |
$13,243,033 |
|
|
|
|
|
|
|
(1) Purchased loans
represent loans acquired with evidence of credit quality
deterioration since origination, in accordance with ASC 310-30.
Loan agings are based upon contractually required payments. |
|
|
90+ days |
60-89 |
30-59 |
|
|
|
|
and still |
days past |
days past |
|
|
Aging as a % of Loan
Balance: |
Nonaccrual |
accruing |
due |
due |
Current |
Total Loans |
Commercial |
|
|
|
|
|
|
Commercial and industrial |
0.6% |
—% |
0.3% |
0.4% |
98.7% |
100.0% |
Franchise |
— |
— |
0.2 |
— |
99.8 |
100.0 |
Mortgage warehouse lines of
credit |
— |
— |
— |
— |
100.0 |
100.0 |
Community Advantage -
homeowners association |
— |
— |
— |
— |
100.0 |
100.0 |
Aircraft |
— |
— |
— |
— |
100.0 |
100.0 |
Asset-based lending |
0.1 |
— |
0.1 |
0.3 |
99.5 |
100.0 |
Tax exempt |
— |
— |
— |
— |
100.0 |
100.0 |
Leases |
— |
— |
— |
0.7 |
99.3 |
100.0 |
Other |
— |
— |
— |
— |
100.0 |
100.0 |
Purchased non-covered commercial (1) |
— |
2.5 |
1.4 |
15.1 |
81.0 |
100.0 |
Total commercial |
0.3 |
— |
0.2 |
0.4 |
99.1 |
100.0 |
Commercial real-estate |
|
|
|
|
|
|
Residential construction |
0.4 |
— |
— |
— |
99.6 |
100.0 |
Commercial construction |
5.1 |
— |
— |
0.4 |
94.5 |
100.0 |
Land |
2.6 |
— |
4.0 |
0.6 |
92.8 |
100.0 |
Office |
1.6 |
— |
0.4 |
0.6 |
97.4 |
100.0 |
Industrial |
0.9 |
— |
0.1 |
0.1 |
98.9 |
100.0 |
Retail |
1.7 |
— |
0.1 |
0.4 |
97.8 |
100.0 |
Multi-family |
0.4 |
— |
— |
0.1 |
99.5 |
100.0 |
Mixed use and other |
0.6 |
— |
0.3 |
1.2 |
97.9 |
100.0 |
Purchased non-covered
commercial real-estate (1) |
— |
24.3 |
4.6 |
6.8 |
64.3 |
100.0 |
Total commercial
real-estate |
1.1 |
0.4 |
0.4 |
0.7 |
97.4 |
100.0 |
Home equity |
1.4 |
— |
0.2 |
0.4 |
98.0 |
100.0 |
Residential real estate |
3.5 |
— |
0.4 |
1.2 |
94.9 |
100.0 |
Purchased non-covered residential real
estate(1) |
— |
69.3 |
— |
— |
30.7 |
100.0 |
Premium finance receivables |
|
|
|
|
|
|
Commercial insurance loans |
0.5 |
0.4 |
0.3 |
1.1 |
97.7 |
100.0 |
Life insurance loans |
— |
— |
0.2 |
0.1 |
99.7 |
100.0 |
Purchased life insurance loans
(1) |
— |
— |
— |
— |
100.0 |
100.0 |
Indirect consumer |
0.1 |
0.2 |
0.1 |
0.7 |
98.9 |
100.0 |
Consumer and other |
0.9 |
— |
— |
0.6 |
98.5 |
100.0 |
Purchased non-covered consumer and
other(1) |
— |
15.0 |
— |
— |
85.0 |
100.0 |
Total loans, net of unearned
income, excluding covered loans |
0.7% |
0.2% |
0.3% |
0.6% |
98.2% |
100.0% |
Covered loans |
2.7 |
16.2 |
1.7 |
2.3 |
77.1 |
100.0 |
Total loans, net of unearned income |
0.8% |
0.7% |
0.3% |
0.6% |
97.6% |
100.0% |
As of December 31, 2013, $33.8 million of all loans,
excluding covered loans, or 0.3%, were 60 to 89 days past due and
$76.6 million, or 0.6%, were 30 to 59 days (or one payment) past
due. As of September 30, 2013, $33.0 million of all loans,
excluding covered loans, or 0.3%, were 60 to 89 days past due and
$82.8 million, or 0.7%, 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
December 31, 2013 that are current with regard to the
contractual terms of the loan agreement represent 98.0% of the
total home equity portfolio. Residential real estate loans at
December 31, 2013 that are current with regards to the
contractual terms of the loan agreements comprise 94.6% of total
residential real estate loans outstanding, which includes purchased
non-covered residential real-estate.
The table below shows the aging of the Company's loan portfolio
at September 30, 2013:
|
|
90+ days |
60-89 |
30-59 |
|
|
As of September 30,
2013 |
|
and still |
days past |
days past |
|
|
(Dollars in thousands) |
Nonaccrual |
accruing |
due |
due |
Current |
Total Loans |
Loan Balances: |
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
Commercial and industrial |
$15,283 |
$190 |
$3,585 |
$15,261 |
$1,688,232 |
$1,722,551 |
Franchise |
— |
— |
113 |
— |
213,215 |
213,328 |
Mortgage warehouse lines of
credit |
— |
— |
— |
— |
71,383 |
71,383 |
Community Advantage -
homeowners association |
— |
— |
— |
— |
90,504 |
90,504 |
Aircraft |
— |
— |
— |
— |
12,601 |
12,601 |
Asset-based lending |
2,364 |
— |
693 |
3,926 |
732,585 |
739,568 |
Tax exempt |
— |
— |
— |
— |
148,103 |
148,103 |
Leases |
— |
— |
— |
— |
101,654 |
101,654 |
Other |
— |
— |
— |
— |
90 |
90 |
Purchased non-covered
commercial (1) |
— |
265 |
— |
1,642 |
7,432 |
9,339 |
Total commercial |
17,647 |
455 |
4,391 |
20,829 |
3,065,799 |
3,109,121 |
Commercial real-estate |
|
|
|
|
|
|
Residential construction |
2,049 |
3,120 |
1,595 |
261 |
33,305 |
40,330 |
Commercial construction |
7,854 |
— |
— |
— |
138,234 |
146,088 |
Land |
4,216 |
— |
— |
4,082 |
100,953 |
109,251 |
Office |
4,318 |
— |
3,965 |
1,270 |
624,967 |
634,520 |
Industrial |
8,184 |
— |
— |
2,419 |
614,409 |
625,012 |
Retail |
11,259 |
— |
271 |
7,422 |
593,263 |
612,215 |
Multi-family |
2,603 |
— |
— |
4,332 |
543,690 |
550,625 |
Mixed use and other |
12,240 |
269 |
2,761 |
15,371 |
1,339,029 |
1,369,670 |
Purchased non-covered
commercial real-estate (1) |
— |
9,607 |
3,380 |
2,702 |
42,710 |
58,399 |
Total commercial
real-estate |
52,723 |
12,996 |
11,972 |
37,859 |
4,030,560 |
4,146,110 |
Home equity |
10,926 |
— |
2,436 |
5,887 |
717,371 |
736,620 |
Residential real estate |
14,126 |
— |
1,749 |
2,844 |
377,489 |
396,208 |
Purchased non-covered residential real estate
(1) |
— |
447 |
289 |
34 |
729 |
1,499 |
Premium finance receivables |
|
|
|
|
|
|
Commercial insurance loans |
10,132 |
11,751 |
5,307 |
14,628 |
2,108,663 |
2,150,481 |
Life insurance loans |
14 |
592 |
6,428 |
— |
1,402,822 |
1,409,856 |
Purchased life
insurance |
— |
— |
— |
— |
459,883 |
459,883 |
loans (1) |
|
|
|
|
|
|
Indirect consumer |
80 |
100 |
97 |
231 |
56,728 |
57,236 |
Consumer and other |
1,591 |
— |
319 |
445 |
111,491 |
113,846 |
Purchased non-covered consumer and other
(1) |
— |
28 |
— |
19 |
132 |
179 |
Total loans, net of unearned
income, excluding covered loans |
$107,239 |
$26,369 |
$32,988 |
$82,776 |
$12,331,667 |
$12,581,039 |
Covered loans |
8,602 |
81,430 |
9,813 |
9,216 |
12,638,594 |
12,997,027 |
Total loans, net of unearned
income |
$115,841 |
$107,799 |
4$2,801 |
$91,992 |
$12,638,594 |
$12,997,027 |
|
|
|
|
|
|
|
(1) Purchased loans
represent loans acquired with evidence of credit quality
deterioration since origination, in accordance with ASC 310-30.
Loan agings are based upon contractually required payments. |
|
|
|
90+ days |
60-89 |
30-59 |
|
|
|
|
and still |
days past |
days past |
|
|
Aging as a % of Loan
Balance: |
Nonaccrual |
accruing |
due |
due |
Current |
Total Loans |
Commercial |
|
|
|
|
|
|
Commercial and industrial |
0.9% |
—% |
0.2% |
0.9% |
98.0% |
100.0% |
Franchise |
— |
— |
0.1 |
— |
99.9 |
100.0 |
Mortgage warehouse lines of
credit |
— |
— |
— |
— |
100.0 |
100.0 |
Community Advantage -
homeowners association |
— |
— |
— |
— |
100.0 |
100.0 |
Aircraft |
— |
— |
— |
— |
100.0 |
100.0 |
Asset-based lending |
0.3 |
— |
0.1 |
0.5 |
99.1 |
100.0 |
Tax exempt |
— |
— |
— |
— |
100.0 |
100.0 |
Leases |
— |
— |
— |
— |
100.0 |
100.0 |
Other |
— |
— |
— |
— |
100.0 |
100.0 |
Purchased non-covered
commercial(1) |
— |
2.8 |
— |
17.6 |
79.6 |
100.0 |
Total commercial |
0.6 |
— |
0.1 |
0.7 |
98.6 |
100.0 |
Commercial real-estate |
|
|
|
|
|
|
Residential construction |
5.1 |
7.7 |
4.0 |
0.6 |
82.6 |
100.0 |
Commercial construction |
5.4 |
— |
— |
— |
94.6 |
100.0 |
Land |
3.9 |
— |
— |
3.7 |
92.4 |
100.0 |
Office |
0.7 |
— |
0.6 |
0.2 |
98.5 |
100.0 |
Industrial |
1.3 |
— |
— |
0.4 |
98.3 |
100.0 |
Retail |
1.8 |
— |
— |
1.2 |
97.0 |
100.0 |
Multi-family |
0.5 |
— |
— |
0.8 |
98.7 |
100.0 |
Mixed use and other |
0.9 |
— |
0.2 |
1.1 |
97.8 |
100.0 |
Purchased non-covered
commercial real-estate (1) |
— |
16.5 |
5.8 |
4.6 |
73.1 |
100.0 |
Total commercial
real-estate |
1.3 |
0.3 |
0.3 |
0.9 |
97.2 |
100.0 |
Home equity |
1.5 |
— |
0.3 |
0.8 |
97.4 |
100.0 |
Residential real estate |
3.6 |
— |
0.4 |
0.7 |
95.3 |
100.0 |
Purchased non-covered residential real estate
(1) |
— |
29.8 |
19.3 |
2.3 |
48.6 |
100.0 |
Premium finance receivables |
|
|
|
|
|
|
Commercial insurance loans |
0.5 |
0.5 |
0.2 |
0.7 |
98.1 |
100.0 |
Life insurance loans |
— |
— |
0.5 |
— |
99.5 |
100.0 |
Purchased life insurance loans (1) |
— |
— |
— |
— |
100.0 |
100.0 |
Indirect consumer |
0.1 |
0.2 |
0.2 |
0.4 |
99.1 |
100.0 |
Consumer and other |
1.4 |
— |
0.3 |
0.4 |
97.9 |
100.0 |
Purchased non-covered consumer and other
(1) |
— |
15.6 |
— |
10.6 |
73.8 |
100.0 |
Total loans, net of unearned
income, excluding covered loans |
0.9% |
0.2% |
0.3% |
0.7% |
97.9% |
100.0% |
Covered loans |
2.1 |
19.6 |
2.4 |
2.2 |
73.7 |
100.0 |
Total loans, net of unearned
income |
0.9% |
0.8% |
0.3% |
0.7% |
97.3% |
100.0% |
Non-performing Assets, excluding covered assets
The following table sets forth Wintrust's non-performing assets
and troubled debt restructurings ("TDRs") performing under the
contractual terms of the loan agreement, excluding covered assets
and purchased non-covered loans acquired with evidence of credit
quality deterioration since origination, at the dates
indicated.
|
December 31, |
September 30, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2012 |
Loans past due greater than 90 days
and still accruing (1): |
|
|
|
Commercial |
$— |
$190 |
$— |
Commercial real-estate |
230 |
3,389 |
— |
Home equity |
— |
— |
100 |
Residential real-estate |
— |
— |
— |
Premium finance receivables -
commercial |
8,842 |
11,751 |
10,008 |
Premium finance receivables -
life insurance |
— |
592 |
— |
Indirect consumer |
105 |
100 |
189 |
Consumer and other |
— |
— |
32 |
Total loans past due greater
than 90 days and still accruing |
9,177 |
16,022 |
10,329 |
Non-accrual loans (2): |
|
|
|
Commercial |
10,780 |
17,647 |
21,737 |
Commercial real-estate |
46,658 |
52,723 |
49,973 |
Home equity |
10,071 |
10,926 |
13,423 |
Residential real-estate |
14,974 |
14,126 |
11,728 |
Premium finance receivables -
commercial |
10,537 |
10,132 |
9,302 |
Premium finance receivables -
life insurance |
— |
14 |
25 |
Indirect consumer |
55 |
80 |
55 |
Consumer and other |
1,082 |
1,591 |
1,511 |
Total non-accrual loans |
94,157 |
107,239 |
107,754 |
Total non-performing
loans: |
|
|
|
Commercial |
10,780 |
17,837 |
21,737 |
Commercial real-estate |
46,888 |
56,112 |
49,973 |
Home equity |
10,071 |
10,926 |
13,523 |
Residential real-estate |
14,974 |
14,126 |
11,728 |
Premium finance receivables -
commercial |
19,379 |
21,883 |
19,310 |
Premium finance receivables -
life insurance |
— |
606 |
25 |
Indirect consumer |
160 |
180 |
244 |
Consumer and other |
1,082 |
1,591 |
1,543 |
Total non-performing loans |
$103,334 |
$123,261 |
$118,083 |
Other real estate owned |
43,632 |
46,901 |
56,174 |
Other real estate owned -
obtained in acquisition |
6,822 |
8,349 |
6,717 |
Other repossessed assets |
$542 |
$446 |
$— |
Total non-performing
assets |
$154,330 |
$178,957 |
$180,974 |
TDRs performing under the
contractual terms of the loan agreement |
$78,610 |
$79,205 |
$106,119 |
Total non-performing
loans by category as a percent of its own respective
category's period-end balance: |
|
|
|
Commercial |
0.33% |
0.57% |
0.75% |
Commercial real-estate |
1.11 |
1.35 |
1.29 |
Home equity |
1.40 |
1.48 |
1.72 |
Residential real-estate |
3.44 |
3.55 |
3.19 |
Premium finance receivables -
commercial |
0.89 |
1.02 |
0.97 |
Premium finance receivables -
life insurance |
— |
0.03 |
— |
Indirect consumer |
0.32 |
0.31 |
0.32 |
Consumer and other |
0.93 |
1.40 |
1.48 |
Total loans, net of unearned
income |
0.80% |
0.98% |
1.00% |
Total non-performing assets as a
percentage of total assets |
0.85% |
1.01% |
1.03% |
Allowance for loan losses as a
percentage of total non-performing loans |
93.8% |
86.96% |
90.91% |
|
|
|
|
(1) As of the dates shown,
no TDRs were past due greater than 90 days and still accruing
interest. |
(2) Non-accrual loans
included TDRs totaling $28.5 million, $35.8 million and $20.4
million as of December 31, 2013, September 30, 2013 and
December 31, 2012, respectively. |
Non-performing Commercial and Commercial Real Estate
Commercial non-performing loans totaled $10.8 million as of
December 31, 2013 compared to $17.8 million as of
September 30, 2013 and $21.7 million as of December 31,
2012. Commercial real estate non-performing loans totaled $46.9
million as of December 31, 2013 compared to $56.1 million as
of September 30, 2013 and $50.0 million as of
December 31, 2012.
Management is pursuing the resolution of all credits in this
category. At this time, management believes reserves are
appropriate to absorb inherent losses that are expected to 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 $25.0 million as of December 31, 2013. The
balance remained relatively unchanged from September 30, 2013
and decreased $206,000 from December 31, 2012. The
December 31, 2013 non-performing balance is comprised of $15.0
million of residential real estate (70 individual credits) and
$10.1 million of home equity loans (47 individual credits). On
average, this is approximately 8 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 Insurance Premium Finance
Receivables
The table below presents the level of non-performing property
and casualty premium finance receivables as of December 31,
2013 and 2012, and the amount of net charge-offs for the quarters
then ended.
|
December 31, |
December 31, |
(Dollars in thousands) |
2013 |
2012 |
Non-performing premium finance
receivables -- commercial |
$19,379 |
$19,310 |
- as a percent of premium
finance receivables - commercial outstanding |
0.89% |
0.97% |
Net charge-offs (recoveries) of premium
finance receivables - commercial |
$1,165 |
$1,034 |
- annualized as a percent of
average premium finance receivables - commercial |
0.21% |
0.21% |
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.
Due to the nature of collateral for commercial insurance 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.
Nonperforming Loans Rollforward
The table below presents a summary of the changes in the balance
of non-performing loans, excluding covered loans, for the three
months and years ending December 31, 2013 and 2012:
|
Three Months
Ended |
Years
Ended |
|
December 31, |
December 31, |
December 31, |
December 31, |
(Dollars in thousands) |
2013 |
2012 |
2013 |
2012 |
Balance at beginning of period |
$123,261 |
$117,891 |
$118,083 |
$120,084 |
Additions, net |
18,285 |
28,199 |
94,076 |
109,378 |
Return to performing
status |
(10,070) |
(94) |
(11,692) |
(3,137) |
Payments received |
(12,142) |
(12,014) |
(35,066) |
(41,250) |
Transfer to OREO and other
repossessed assets |
(1,516) |
(7,359) |
(21,531) |
(25,275) |
Charge-offs |
(10,436) |
(14,848) |
(38,662) |
(48,408) |
Net change for niche loans
(1) |
(4,048) |
6,308 |
(1,874) |
6,691 |
Balance at end of
period |
$103,334 |
$118,083 |
$103,334 |
$118,083 |
(1) This includes activity
for premium finance receivables and indirect consumer loans. |
TDRs
The table below presents a summary of TDRs for the respective
period, presented by loan category and accrual status:
|
December 31, |
September 30, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2012 |
Accruing TDRs: |
|
|
|
Commercial |
$6,045 |
$6,174 |
$11,871 |
Commercial real estate |
69,225 |
70,346 |
89,906 |
Residential real estate and
other |
3,340 |
2,685 |
4,342 |
Total accrual |
$78,610 |
$79,205 |
$106,119 |
Non-accrual TDRs: (1) |
|
|
|
Commercial |
$1,343 |
$2,199 |
$6,124 |
Commercial real estate |
24,310 |
30,442 |
12,509 |
Residential real estate and
other |
2,840 |
3,157 |
1,721 |
Total non-accrual |
$28,493 |
$35,798 |
$20,354 |
Total TDRs: |
|
|
|
Commercial |
$7,388 |
$8,373 |
$17,995 |
Commercial real estate |
93,535 |
100,788 |
102,415 |
Residential real estate and
other |
6,180 |
5,842 |
6,063 |
Total TDRs |
$107,103 |
$115,003 |
$126,473 |
Weighted-average contractual interest
rate of TDRs |
4.12% |
4.12% |
4.11% |
|
|
|
|
(1) Included in total
non-performing loans. |
At December 31, 2013, the Company had $107.1 million in
loans modified in TDRs. The $107.1 million in TDRs represents
149 credits in which economic concessions were granted to certain
borrowers to better align the terms of their loans with their
current ability to pay. The balance decreased from $115.0
million representing 161 credits at September 30, 2013 and
decreased from $126.5 million representing 165 credits at
December 31, 2012.
The table below presents a summary of TDRs as of
December 31, 2013 and December 31, 2012, and shows the
changes in the balance during the periods presented:
Three Months Ended December 31,
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
|
Commercial |
Real Estate |
|
(Dollars in thousands) |
Commercial |
Real
Estate |
and Other |
Total |
Balance at beginning of period |
$8,373 |
$100,788 |
$5,842 |
$115,003 |
Additions during the period |
— |
1,414 |
518 |
1,932 |
Reductions: |
|
|
|
|
Charge-offs |
(393) |
(1,992) |
(109) |
(2,494) |
Transferred to OREO and other
repossessed assets |
— |
(1,111) |
— |
(1,111) |
Removal of TDR loan status
(1) |
— |
(1,003) |
— |
(1,003) |
Payments received |
(592) |
(4,561) |
(71) |
(5,224) |
Balance at period end |
$7,388 |
$93,535 |
$6,180 |
$107,103 |
|
|
|
|
|
Three Months Ended December 31,
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
|
Commercial |
Real Estate |
|
(Dollars in thousands) |
Commercial |
Real
Estate |
and Other |
Total |
Balance at beginning of period |
$22,050 |
$117,650 |
$7,496 |
$147,196 |
Additions during the period |
987 |
1,547 |
126 |
2,660 |
Reductions: |
|
|
|
|
Charge-offs |
(4,361) |
(1,723) |
(764) |
(6,848) |
Transferred to OREO and other
repossessed assets |
— |
(955) |
(449) |
(1,404) |
Removal of TDR loan status (1) |
— |
(4,488) |
— |
(4,488) |
Payments received |
(681) |
(9,616) |
(346) |
(10,643) |
Balance at period end |
$17,995 |
$102,415 |
$6,063 |
$126,473 |
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2013 |
|
|
|
|
|
|
|
Residential |
|
|
|
Commercial |
Real Estate |
|
(Dollars in thousands) |
Commercial |
Real
Estate |
and Other |
Total |
Balance at beginning of period |
$17,995 |
$102,415 |
$6,063 |
$126,473 |
Additions during the period |
708 |
19,676 |
2,296 |
22,680 |
Reductions: |
|
|
|
|
Charge-offs |
(3,146) |
(8,658) |
(369) |
(12,173) |
Transferred to OREO and other
repossessed assets |
(3,800) |
(1,948) |
(103) |
(5,851) |
Removal of TDR loan status
(1) |
(2,932) |
(1,003) |
— |
(3,935) |
Payments received |
(1,437) |
(16,947) |
(1,707) |
(20,091) |
Balance at period end |
$7,388 |
$93,535 |
$6,180 |
$107,103 |
|
|
|
|
|
(1) Loan was previously
classified as a TDR and subsequently performed in compliance with
the loan's modified terms for a period of six months (including
over a calendar year-end) at a modified interest rate which
represented a market rate at the time of restructuring. Per our TDR
policy, the TDR classification is removed. |
Year Ended December 31,
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
|
Commercial |
Real Estate |
|
(Dollars in thousands) |
Commercial |
Real
Estate |
and Other |
Total |
Balance at beginning of period |
$10,834 |
$112,796 |
$6,888 |
$130,518 |
Additions during the period |
14,312 |
56,564 |
1,672 |
72,548 |
Reductions: |
|
|
|
|
Charge-offs |
(5,160) |
(13,259) |
(1,396) |
(19,815) |
Transferred to OREO and other
repossessed assets |
— |
(4,096) |
(449) |
(4,545) |
Removal of TDR loan status (1) |
(363) |
(6,365) |
(273) |
(7,001) |
Payments received |
(1,628) |
(43,225) |
(379) |
(45,232) |
Balance at period end |
$17,995 |
$102,415 |
$6,063 |
$126,473 |
|
|
|
|
|
(1) Loan was previously
classified as a TDR and subsequently performed in compliance with
the loan's modified terms for a period of six months (including
over a calendar year-end) at a modified interest rate which
represented a market rate at the time of restructuring. Per our TDR
policy, the TDR classification is removed. |
The Company's approach to restructuring loans, excluding those
acquired with evidence of credit quality deterioration since
origination, is built on its credit risk rating system which
requires credit management personnel to assign a credit risk rating
to each loan at the time of each modification. In each case, the
loan officer is responsible for recommending a credit risk rating
for each loan and ensuring the credit risk ratings are appropriate.
These credit risk ratings are then reviewed and approved by the
bank's chief credit officer and/or concurrence credit
officer. Credit risk ratings are determined by evaluating a
number of factors including a borrower's financial strength, cash
flow coverage, collateral protection and guarantees. The Company's
credit risk rating scale is one through ten with higher scores
indicating higher risk. In the case of loans rated six or worse
following modification, the Company's Managed Assets Division
evaluates the loan and the credit risk rating and determines that
the loan has been restructured to be reasonably assured of
repayment and of performance according to the modified terms and is
supported by a current, well-documented credit assessment of the
borrower's financial condition and prospects for repayment under
the revised terms.
A modification of a loan, excluding those acquired with evidence
of credit quality deterioration since origination, with an existing
credit risk rating of six or worse or a modification of any other
credit, which will result in a restructured credit risk rating of
six or worse must be reviewed for TDR classification. In that
event, our Managed Assets Division conducts an overall credit and
collateral review. A modification of a loan is considered to be a
TDR if both (1) the borrower is experiencing financial
difficulty and (2) for economic or legal reasons, the bank
grants a concession to a borrower that it would not otherwise
consider. The modification of a loan, excluding those acquired with
evidence of credit quality deterioration since
origination, where the credit risk rating is five or better
both before and after such modification is not considered to be a
TDR. Based on the Company's credit risk rating system, it
considers that borrowers whose credit risk rating is five or better
are not experiencing financial difficulties and therefore, are not
considered TDRs.
All credits determined to be a TDR will continue to be
classified as a TDR in all subsequent periods, unless the borrower
has been in compliance with the loan's modified terms for a period
of six months (including over a calendar year-end) and the modified
interest rate represented a market rate at the time of a
restructuring. The Managed Assets Division, in consultation with
the respective loan officer, determines whether the modified
interest rate represented a current market rate at the time of
restructuring. Using knowledge of current market conditions and
rates, competitive pricing on recent loan originations, and an
assessment of various characteristics of the modified loan
(including collateral position and payment history), an appropriate
market rate for a new borrower with similar risk is determined. If
the modified interest rate meets or exceeds this market rate for a
new borrower with similar risk, the modified interest rate
represents a market rate at the time of restructuring.
Additionally, before removing a loan from TDR classification, a
review of the current or previously measured impairment on the loan
and any concerns related to future performance by the borrower is
conducted. If concerns exist about the future ability of the
borrower to meet its obligations under the loans based on a credit
review by the Managed Assets Division, the TDR classification is
not removed from the loan. Loans classified as TDRs that are
re-modified subsequent to the initial determination will continue
to be classified as TDRs following the re-modification, unless the
requirements for removal from TDR classification discussed above
are satisfied at the time of the re-modification.
TDRs are reviewed at the time of modification and on a quarterly
basis to determine if a specific reserve is needed. The carrying
amount of the loan is compared to the expected payments to be
received, discounted at the loan's original rate, or for collateral
dependent loans, to the fair value of the collateral. Any shortfall
is recorded as a specific reserve. The Company, in accordance
with ASC 310-10, continues to individually measure impairment of
these loans after the TDR classification is removed.
Each TDR was reviewed for impairment at December 31, 2013
and approximately $4.8 million of impairment was present and
appropriately reserved for through the Company's normal reserving
methodology in the Company's allowance for loan losses. For
TDRs in which impairment is calculated by the present value of
future cash flows, the Company records interest income representing
the decrease in impairment resulting from the passage of time
during the respective period, which differs from interest income
from contractually required interest on these specific
loans. For the three months ended December 31, 2013 and
2012, the Company recorded $174,000 and $265,000, respectively, in
interest income representing this decrease in impairment. For
the year ended December 31, 2013 and 2012, the Company
recorded $901,000 and $1.3 million, respectively, in interest
income representing this decrease in impairment.
Other Real Estate Owned
The table below presents a summary of other real estate owned,
excluding covered other real estate owned, as of December 31,
2013 and shows the activity for the respective period and the
balance for each property type:
|
Three Months Ended |
|
December 31, |
September 30, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2012 |
Balance at beginning of period |
$55,250 |
$57,025 |
$67,377 |
Disposals/resolved |
(6,891) |
(10,194) |
(12,516) |
Transfers in at fair value,
less costs to sell |
1,816 |
9,619 |
8,030 |
Additions from acquisition |
1,773 |
— |
2,923 |
Fair value adjustments |
(1,494) |
(1,200) |
(2,923) |
Balance at end of period |
$50,454 |
$55,250 |
$62,891 |
|
|
|
|
|
Period End |
|
December 31, |
September 30, |
December 31, |
Balance by Property Type |
2013 |
2013 |
2012 |
Residential real estate |
$5,452 |
$6,421 |
$9,077 |
Residential real estate development |
3,859 |
4,551 |
12,144 |
Commercial real estate |
41,143 |
44,278 |
41,670 |
Total |
$50,454 |
$55,250 |
$62,891 |
Covered Assets
In conjunction with FDIC-assisted transactions, the Company
entered into loss share agreements with the FDIC. These agreements
cover realized losses on loans, foreclosed real estate and certain
other assets. These loss share assets are measured separately from
the loan portfolios because they are not contractually embedded in
the loans and are not transferable with the loans should the
Company choose to dispose of them. Fair values at the acquisition
dates were estimated based on projected cash flows available for
loss-share based on the credit adjustments estimated for each loan
pool and the loss share percentages. The loss share assets are also
separately measured from the related loans and foreclosed real
estate and recorded separately on the Consolidated Statements of
Condition. Subsequent to the acquisition date, reimbursements
received from the FDIC for actual incurred losses will reduce the
loss share assets. Additional expected losses, to the extent such
expected losses result in the recognition of an allowance for loan
losses, will increase the loss share assets. The loss share
agreements with the FDIC require the Company to reimburse the FDIC
in the event that actual losses on covered assets are lower than
the original loss estimates agreed upon with the FDIC with respect
of such assets in the loss share agreements. The allowance for loan
losses for loans acquired in FDIC-assisted transactions is
determined without giving consideration to the amounts recoverable
through loss share agreements (since the loss share agreements are
separately accounted for and thus presented "gross" on the balance
sheet). On the Consolidated Statements of Income, the provision for
credit losses is reported net of changes in the amount recoverable
under the loss share agreements. Reductions to expected losses, to
the extent such reductions to expected losses are the result of an
improvement to the actual or expected cash flows from the covered
assets, will reduce the loss share assets. The increases in cash
flows for the purchased loans are recognized as interest income
prospectively.
The following table provides a comparative analysis for the
period end balances of the covered asset components and any changes
in the allowance for covered loan losses.
|
December 31, |
September 30, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2012 |
Period End Balances: |
|
|
|
Loans |
$346,431 |
$415,988 |
$560,087 |
Other real estate owned |
85,834 |
87,037 |
82,908 |
Other assets |
2,879 |
2,272 |
1,097 |
FDIC Indemnification asset |
85,672 |
100,313 |
208,160 |
Total covered assets |
$520,816 |
$605,610 |
$852,252 |
Allowance for Covered Loan Losses
Rollforward: |
|
|
|
Balance at beginning of
quarter: |
$12,924 |
$14,429 |
$21,926 |
Provision for covered loan
losses before benefit attributable to FDIC loss share
agreements |
(269) |
(2,331) |
(5,634) |
Benefit attributable to FDIC
loss share agreements |
215 |
1,865 |
4,508 |
Net provision for covered loan
losses |
(54) |
(466) |
(1,126) |
(Decrease) increase in FDIC
indemnification asset |
(215) |
(1,865) |
(4,508) |
Loans charged-off |
(6,791) |
(3,237) |
(2,869) |
Recoveries of loans
charged-off |
4,228 |
4,063 |
31 |
Net charge-offs |
(2,563) |
826 |
(2,838) |
Balance at end of quarter |
$10,092 |
$12,924 |
$13,454 |
Changes in Accretable Yield
The excess of cash flows expected to be collected over the
carrying value of loans accounted for under ASC 310-30 is referred
to as the accretable yield and is recognized in interest income
using an effective yield method over the remaining life of the pool
of loans. The accretable yield is affected by:
- Changes in interest rate indices for variable rate loans
accounted for under ASC 310-30 – Expected future cash flows are
based on the variable rates in effect at the time of the regular
evaluations of cash flows expected to be collected;
- Changes in prepayment assumptions – Prepayments affect the
estimated life of loans accounted for under ASC 310-30 which may
change the amount of interest income, and possibly principal,
expected to be collected; and
- Changes in the expected principal and interest payments over
the estimated life – Updates to expected cash flows are driven by
the credit outlook and actions taken with borrowers. Changes in
expected future cash flows from loan modifications are included in
the regular evaluations of cash flows expected to be
collected.
The following table provides activity for the accretable yield
of loans accounted for under ASC 310-30.
|
Three Months
Ended |
Three Months Ended |
|
December 31,
2013 |
December 31, 2012 |
|
|
Life Insurance |
|
Life Insurance |
|
Bank |
Premium |
Bank |
Premium |
(Dollars in thousands) |
Acquisitions |
Finance Loans |
Acquisitions |
Finance Loans |
Accretable yield, beginning balance |
$117,030 |
$8,813 |
$151,800 |
$15,426 |
Acquisitions |
3,451 |
— |
(123) |
— |
Accretable yield amortized to interest
income |
(8,918) |
(2,579) |
(11,556) |
(2,646) |
Accretable yield amortized to indemnification
asset(1) |
(7,311) |
— |
(10,886) |
— |
Reclassification from non-accretable
difference(2) |
5,966 |
1,599 |
10,776 |
— |
(Decreases) increases in interest cash flows
due to payments and changes in interest rates |
(2,563) |
421 |
3,213 |
275 |
Accretable yield, ending balance (3) |
$107,655 |
$8,254 |
$143,224 |
$13,055 |
|
|
|
|
|
|
Year
Ended |
Year Ended |
|
December 31,
2013 |
December 31,
2012 |
|
|
Life Insurance |
|
Life Insurance |
|
Bank |
Premium |
Bank |
Premium |
(Dollars in thousands) |
Acquisitions |
Finance Loans |
Acquisitions |
Finance Loans |
Accretable yield, beginning balance |
$143,224 |
$13,055 |
$173,120 |
$18,861 |
Acquisitions |
5,428 |
— |
8,217 |
— |
Accretable yield amortized to interest
income |
(36,898) |
(8,795) |
(52,101) |
(11,441) |
Accretable yield amortized to indemnification
asset(1) |
(36,202) |
— |
(66,798) |
— |
Reclassification from non-accretable
difference(2) |
50,873 |
2,840 |
64,603 |
4,096 |
(Decreases) increases in interest cash flows
due to payments and changes in interest rates |
(18,770) |
1,154 |
16,183 |
1,539 |
Accretable yield, ending balance (3) |
$107,655 |
$8,254 |
$143,224 |
$13,055 |
|
|
|
|
|
(1) Represents the portion
of the current period accreted yield, resulting from lower expected
losses, applied to reduce the loss share indemnification
asset. |
(2) Reclassification is the
result of subsequent increases in expected principal cash
flows. |
(3) As of December 31,
2013, the Company estimates that the remaining accretable yield
balance to be amortized to the indemnification asset for the bank
acquisitions is $33.7 million. The remainder of the accretable
yield related to bank acquisitions is expected to be amortized to
interest income. |
Items Impacting Comparative Financial
Results:
Acquisitions
On October 18, 2013, the Company completed its acquisition of
Diamond Bancorp, Inc. ("Diamond"). Diamond was the parent company
of Diamond Bank, FSB ("Diamond Bank"), which operated four banking
locations in Chicago, Schaumburg, Elmhurst, and Northbrook,
Illinois. As part of the transaction, Diamond Bank was merged into
the Company's wholly-owned subsidiary bank, North Shore Community
Bank & Trust Company ("North Shore Bank"). Diamond Bank
had approximately $169 million in assets and $140 million in
deposits as of the acquisition date, prior to purchase accounting
adjustments. The Company recorded goodwill of $8.4 million on
the acquisition.
On October 1, 2013, the Company announced that its subsidiary,
Barrington Bank through its division Wintrust Mortgage, acquired
certain assets and assumed certain liabilities of the mortgage
banking business of Surety Financial Services ("Surety") of Sherman
Oaks, California. Surety has five offices located in southern
California which originated approximately $1.0 billion in the
twelve months prior to the acquisition date.
On May 1, 2013, the Company completed its acquisition
of First Lansing Bancorp, Inc. ("FLB"). FLB was the
parent company of First National Bank of Illinois
("FNBI"). FNBI is headquartered in Lansing, Illinois and
operated seven banking locations in the south and southwest suburbs
of Chicago, as well as one location in northwest Indiana. As part
of the transaction, First Lansing Bancorp merged into the Company's
wholly-owned subsidiary bank, Old Plank Trail Community Bank, N.A.
("Old Plank Trail Bank"), and its banking locations acquired are
operating as branches of Old Plank Trail Bank. FNBI had
approximately $372 million in assets and approximately $330 million
in deposits as of the acquisition date, prior to purchase
accounting adjustments. The Company recorded goodwill of $14.0
million on the acquisition.
On December 12, 2012, the Company completed its acquisition of
HPK Financial Corporation ("HPK"). HPK was the parent company
of Hyde Park Bank & Trust Company, an Illinois state bank,
("Hyde Park Bank"), which operated two banking locations in the
Hyde Park neighborhood of Chicago, Illinois. As part of the
transaction, Hyde Park Bank merged into the Company's wholly-owned
subsidiary bank, Beverly Bank & Trust Company, N.A. ("Beverly
Bank"), and the two acquired banking locations are operating as
branches of Beverly Bank under the brand name Hyde Park
Bank. HPK had approximately $358 million in assets and $243
million in deposits as of the acquisition date, prior to purchase
accounting adjustments. The Company recorded goodwill of $12.6
million on the acquisition.
On September 28, 2012, the Company's wholly-owned subsidiary
bank Old Plank Trail Bank, acquired certain assets and liabilities
and the banking operations of First United Bank of Crete, Illinois
("First United Bank") in an FDIC-assisted transaction. First United
Bank operated four locations in Illinois; one in Crete, two in
Frankfort and one in Steger, as well as one location in St. John,
Indiana which was subsequently closed.
On July 20, 2012, the Company's wholly-owned subsidiary bank,
Hinsdale Bank and Trust Company ("Hinsdale Bank"), assumed the
deposits and banking operations of Second Federal Savings and Loan
Association of Chicago ("Second Federal") in an FDIC-assisted
transaction. Second Federal operated three locations in Illinois;
two in Chicago (Brighton Park and Little Village neighborhoods) and
one in Cicero. The Company subsequently divested the deposits
and banking operations of Second Federal. See "Divestiture of
Previous FDIC-Assisted Acquisition" on page 45 for more
information.
On June 8, 2012, the Company's wholly-owned subsidiary bank Lake
Forest Bank and Trust Company ("Lake Forest Bank"), completed its
acquisition of Macquarie Premium Funding Inc., the Canadian
insurance premium funding business of Macquarie Group. Through this
transaction, Lake Forest Bank acquired approximately $213 million
of gross premium finance receivables outstanding. The Company
recorded goodwill of approximately $22 million on the
acquisition.
On April 13, 2012, the Company's wholly-owned subsidiary bank,
Old Plank Trail Bank, completed its acquisition of a branch of
Suburban Bank & Trust Company ("Suburban") located in Orland
Park, Illinois. Through this transaction, Old Plank Trail Bank
acquired approximately $52 million of deposits and $3 million of
loans. The Company recorded goodwill of $1.5 million on the
branch acquisition.
On March 30, 2012, the Company's wholly-owned subsidiary bank,
The Chicago Trust Company, N.A. ("CTC"), completed its acquisition
of the trust operations of Suburban. Through this transaction, CTC
acquired trust accounts having assets under administration of
approximately $160 million, in addition to land trust accounts and
various other assets. The Company recorded goodwill of $1.8
million on the acquisition.
On February 10, 2012, the Company's wholly-owned subsidiary,
Barrington Bank and Trust Company, N.A. ("Barrington Bank"),
acquired certain assets and liabilities and the banking operations
of Charter National Bank and Trust ("Charter National") in an
FDIC-assisted transaction. Charter National operated two locations:
one in Hoffman Estates and one in Hanover Park.
Summary of FDIC-assisted transactions impacting comparative
financial results
- Old Plank Trail Bank assumed approximately $316 million of the
outstanding deposits and approximately $310 million of assets of
First United Bank on September 28, 2012, prior to purchase
accounting adjustments. A bargain purchase gain of $6.7
million was recognized on this transaction.
- Hinsdale Bank assumed approximately $169 million of the
outstanding deposits and approximately $10 million of assets of
Second Federal on July 20, 2012, prior to purchase accounting
adjustments. A bargain purchase gain of $43,000 was recognized
on this transaction.
- Barrington assumed approximately $89 million of the outstanding
deposits and approximately $94 million of assets of Charter
National on February 10, 2012, prior to purchase accounting
adjustments. A bargain purchase gain of $785,000 was
recognized on this transaction.
Loans comprise the majority of the assets acquired in the
FDIC-assisted transactions 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. Additionally, the loss share agreements with the FDIC
require the Company to reimburse the FDIC in the event that actual
losses on covered assets are lower than the original loss estimates
agreed upon with the FDIC with respect to such assets in the loss
share agreements. We refer to the loans subject to these
loss-sharing agreements as "covered loans." We use the term
"covered assets" to refer to the total of 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 losses related to covered
assets.
Divestiture of Previous FDIC-Assisted
Acquisition
On February 1, 2013, Hinsdale Bank completed its divestiture of
the deposits and current banking operations of Second Federal,
which were acquired in an FDIC-assisted transaction on July 20,
2012, to Self-Help Federal Credit Union. Through this
transaction, the Company divested approximately $149 million of
related deposits.
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, Schaumburg Bank & Trust
Company, N.A., 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, Crete,
Deerfield, Downers Grove, Elgin, Elk Grove Village, Elmhurst,
Frankfort, Geneva, Glencoe, Glen Ellyn, Gurnee, Grayslake, Hanover
Park, Highland Park, Highwood, Hoffman Estates, Island Lake,
Itasca, Joliet, Lake Bluff, Lake Villa, Lansing, Lindenhurst,
Lynwood, McHenry, Mokena, Mount Prospect, Mundelein, Naperville,
North Chicago, Northfield, Norridge, Orland Park, Palatine, Park
Ridge, Plainfield, Prospect Heights, Ravinia, Riverside, Rogers
Park, Roselle, Round Lake Beach, Shorewood, Skokie, South Holland,
Spring Grove, Steger, Vernon Hills, Wauconda, Western Springs,
Willowbrook, Winnetka and Wood Dale and in Delafield, Elm Grove,
Madison, Menomenee Falls, Milwaukee and Wales, Wisconsin and Dyer,
Indiana.
Additionally, the Company operates various non-bank business
units:
- 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.
- First Insurance Funding of Canada serves commercial insurance
loan customers throughout Canada
- 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, a division of Barrington Bank &
Trust Company, engages primarily in the origination and purchase of
residential mortgages for sale into the secondary 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.
- Great Lakes Advisors LLC provides money management services and
advisory services to individual accounts.
- The Chicago Trust Company, a trust subsidiary, allows Wintrust
to service customers' trust and investment needs at each banking
location.
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 2012 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;
- the financial success and economic viability of the borrowers
of our commercial loans;
- market conditions in the commercial real estate market in the
Chicago metropolitan area;
- the extent of commercial and consumer delinquencies and
declines in real estate values, which may require further increases
in the Company's allowance for loan and lease losses;
- 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;
- 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);
- failure to identify and complete favorable acquisitions in the
future or unexpected difficulties or developments related to the
integration of the Company's recent or future acquisitions;
- unexpected difficulties and losses related to FDIC-assisted
acquisitions, including those resulting from our loss- sharing
arrangements with the FDIC;
- any negative perception of the Company's reputation or
financial strength;
- ability to raise additional capital on acceptable terms when
needed;
- disruption in capital markets, which may lower fair values for
the Company's investment portfolio;
- ability to use technology to provide products and services that
will satisfy customer demands and create efficiencies in
operations;
- adverse effects on our information technology systems resulting
from failures, human error or tampering;
- accuracy and completeness of information the Company receives
about customers and counterparties to make credit decisions;
- ability of the Company to attract and retain senior management
experienced in the banking and financial services industries;
- environmental liability risk associated with lending
activities;
- the impact of any claims or legal actions, including any effect
on our reputation;
- losses incurred in connection with repurchases and
indemnification payments related to mortgages;
- the loss of customers as a result of technological changes
allowing consumers to complete their financial transactions without
the use of a bank;
- the soundness of other financial institutions;
- the possibility that certain European Union member states will
default on their debt obligations, which may affect the Company's
liquidity, financial conditions and results of operations;
- examinations and challenges by tax authorities;
- changes in accounting standards, rules and interpretations and
the impact on the Company's financial statements;
- the ability of the Company to receive dividends from its
subsidiaries;
- 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;
- legislative or regulatory changes, particularly changes in
regulation of financial services companies and/or the products and
services offered by financial services companies, including those
resulting from the Dodd-Frank Act;
- restrictions upon our ability to market our products to
consumers and limitations on our ability to profitably operate our
mortgage business resulting from the Dodd-Frank Act;
- increased costs of compliance, heightened regulatory capital
requirements and other risks associated with changes in regulation
and the current regulatory environment, including the Dodd-Frank
Act;
- changes in capital requirements;
- increases in the Company's FDIC insurance premiums, or the
collection of special assessments by the FDIC;
- delinquencies or fraud with respect to the Company's premium
finance business;
- credit downgrades among commercial and life insurance providers
that could negatively affect the value of collateral securing the
Company's premium finance loans;
- the Company's ability to comply with covenants under its credit
facility; and
- fluctuations in the stock market, which may have an adverse
impact on the Company's wealth management business and brokerage
operation.
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 the Company. 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 update any forward-looking statement to reflect the
impact of circumstances after the date of the 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 10:00 a.m. (CT)
Wednesday, January 22, 2014 regarding fourth quarter 2013 results.
Individuals interested in listening should call (877) 363-5049
and enter Conference ID #33183901. 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
Relations, Investor News and Events, Presentations &
Conference Calls. The text of the fourth quarter 2013 earnings
press release will be available on the home page of the Company's
website at (http://www.wintrust.com) and at the Investor
Relations, 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 |
|
|
|
June 30, |
March 31, |
|
|
December 31, 2013 |
September 30, 2013 |
2013 |
2013 |
December 31, 2012 |
Selected Financial Condition Data (at
end of period): |
|
|
|
|
|
Total assets |
$18,097,783 |
$17,682,548 |
$17,613,546 |
$17,074,247 |
$17,519,613 |
Total loans, excluding covered loans |
12,896,602 |
12,581,039 |
12,516,892 |
11,900,312 |
11,828,943 |
Total deposits |
14,668,789 |
14,647,446 |
14,365,854 |
13,962,757 |
14,428,544 |
Junior subordinated debentures |
249,493 |
249,493 |
249,943 |
249,493 |
249,493 |
Total shareholders' equity |
1,900,589 |
1,873,566 |
1,836,660 |
1,825,688 |
1,804,705 |
Selected Statements of Income
Data: |
|
|
|
|
|
Net interest income |
142,308 |
141,782 |
135,824 |
130,713 |
132,776 |
Net revenue (1) |
188,669 |
196,444 |
199,819 |
188,092 |
197,965 |
Pre-tax adjusted earnings (2) |
66,896 |
69,920 |
70,920 |
68,263 |
72,441 |
Net income |
35,288 |
35,563 |
34,307 |
32,052 |
30,089 |
Net income per common share – Basic |
$0.82 |
$0.86 |
$0.85 |
$0.80 |
$0.75 |
Net income per common share – Diluted |
$0.70 |
$0.71 |
$0.69 |
$0.65 |
$0.61 |
Selected Financial Ratios and Other
Data: |
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
Net interest margin (2) |
3.53% |
3.57% |
3.50% |
3.41% |
3.40% |
Non-interest income to average assets |
1.03% |
1.24% |
1.49% |
1.35% |
1.50% |
Non-interest expense to average assets |
2.82% |
2.89% |
2.97% |
2.82% |
2.99% |
Net overhead ratio (2) (3) |
1.79% |
1.65% |
1.49% |
1.47% |
1.48% |
Net overhead ratio - pre-tax adjusted
earnings (2) (3) |
1.68% |
1.63% |
1.51% |
1.47% |
1.39% |
Efficiency ratio - FTE (2) (4) |
65.95% |
64.60% |
63.97% |
63.78% |
66.13% |
Efficiency ratio - pre-tax adjusted earnings
(2) (4) |
64.81% |
64.00% |
63.78% |
63.46% |
62.62% |
Return on average assets |
0.78% |
0.81% |
0.80% |
0.75% |
0.69% |
Return on average common equity |
7.56% |
7.85% |
7.55% |
7.27% |
6.79% |
Return on average tangible common equity |
9.71% |
10.06% |
9.70% |
9.35% |
8.71% |
Average total assets |
$17,835,999 |
$17,489,571 |
$17,283,985 |
$17,256,843 |
$17,248,650 |
Average total shareholders' equity |
1,895,498 |
1,853,122 |
1,859,265 |
1,818,127 |
1,786,824 |
Average loans to average deposits ratio |
88.9% |
91.3% |
88.7% |
86.6% |
85.6% |
Average loans to average deposits ratio
(including covered loans) |
91.6 |
94.3 |
92.2 |
90.4 |
90.0 |
Common Share Data at end of
period: |
|
|
|
|
|
Market price per common share |
$46.12 |
$41.07 |
$38.28 |
$37.04 |
$36.70 |
Book value per common share (2) |
$38.47 |
$38.09 |
$37.84 |
$38.13 |
$37.78 |
Tangible common book value per share (2) |
$29.93 |
$29.89 |
$29.25 |
$29.74 |
$29.28 |
Common shares outstanding |
46,116,583 |
39,731,043 |
37,725,143 |
37,013,707 |
36,858,355 |
Other Data at end of period:(8) |
|
|
|
|
|
Leverage Ratio(5) |
10.5% |
10.5% |
10.4% |
10.2% |
10.0% |
Tier 1 Capital to risk-weighted assets
(5) |
12.1% |
12.3% |
12.0% |
12.4% |
12.1% |
Total capital to risk-weighted assets
(5) |
12.8% |
13.1% |
12.9% |
13.5% |
13.1% |
Tangible common equity ratio (TCE) (2)
(7) |
7.8% |
7.9% |
7.4% |
7.7% |
7.4% |
Tangible common equity ratio, assuming full
conversion of preferred stock (2) (7) |
8.5% |
8.7% |
8.5% |
8.8% |
8.4% |
Allowance for credit losses (6) |
$97,641 |
$108,455 |
$110,405 |
$125,635 |
$121,988 |
Non-performing loans |
103,334 |
123,261 |
121,485 |
128,633 |
118,083 |
Allowance for credit losses to total loans
(6) |
0.76% |
0.86% |
0.88% |
1.06% |
1.03% |
Non-performing loans to total loans |
0.80% |
0.98% |
0.97% |
1.08% |
1.00% |
Number of: |
|
|
|
|
|
Bank subsidiaries |
15 |
15 |
15 |
15 |
15 |
Non-bank subsidiaries |
8 |
8 |
8 |
8 |
8 |
Banking offices |
124 |
119 |
117 |
108 |
111 |
(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, but excluding
the allowance for covered loan losses. |
(7) Total shareholders'
equity minus preferred stock and total intangible assets divided by
total assets minus total intangible assets |
(8) Asset quality ratios
exclude covered loans. |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Consolidated Statements
of Condition - 5 Quarter Trends |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(In thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Assets |
|
|
|
|
|
Cash and due from banks |
$253,408 |
$322,866 |
$224,286 |
$199,575 |
$284,731 |
Federal funds sold and securities purchased
under resale agreements |
10,456 |
7,771 |
9,013 |
13,626 |
30,297 |
Interest-bearing deposits with other
banks |
495,574 |
681,834 |
440,656 |
685,302 |
1,035,743 |
Available-for-sale securities, at fair
value |
2,176,290 |
1,781,883 |
1,843,824 |
1,870,831 |
1,796,076 |
Trading account securities |
497 |
259 |
659 |
1,036 |
583 |
Federal Home Loan Bank and Federal Reserve
Bank stock, at cost |
79,261 |
76,755 |
79,354 |
76,601 |
79,564 |
Brokerage customer receivables |
30,953 |
29,253 |
26,214 |
25,614 |
24,864 |
Mortgage loans held-for-sale, at fair
value |
332,485 |
329,186 |
525,027 |
370,570 |
385,033 |
Mortgage loans held-for-sale, at lower of
cost or market |
1,842 |
5,159 |
12,964 |
10,352 |
27,167 |
Loans, net of unearned income, excluding
covered loans |
12,896,602 |
12,581,039 |
12,516,892 |
11,900,312 |
11,828,943 |
Covered loans |
346,431 |
415,988 |
454,602 |
518,661 |
560,087 |
Total loans |
13,243,033 |
12,997,027 |
12,971,494 |
12,418,973 |
12,389,030 |
Less: Allowance for loan
losses |
96,922 |
107,188 |
106,842 |
110,348 |
107,351 |
Less: Allowance for covered
loan losses |
10,092 |
12,924 |
14,429 |
12,272 |
13,454 |
Net loans |
13,136,019 |
12,876,915 |
12,850,223 |
12,296,353 |
12,268,225 |
Premises and equipment, net |
531,947 |
517,942 |
512,928 |
504,803 |
501,205 |
FDIC indemnification asset |
85,672 |
100,313 |
137,681 |
170,696 |
208,160 |
Accrued interest receivable and other
assets |
569,619 |
576,121 |
573,709 |
485,746 |
511,617 |
Goodwill |
374,547 |
357,309 |
356,871 |
343,632 |
345,401 |
Other intangible assets |
19,213 |
18,982 |
20,137 |
19,510 |
20,947 |
Total
assets |
$18,097,783 |
$17,682,548 |
$17,613,546 |
$17,074,247 |
$17,519,613 |
Liabilities and Shareholders'
Equity |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Non-interest bearing |
$2,721,771 |
$2,622,518 |
$2,450,659 |
$2,243,440 |
$2,396,264 |
Interest bearing |
11,947,018 |
12,024,928 |
11,915,195 |
11,719,317 |
12,032,280 |
Total deposits |
14,668,789 |
14,647,446 |
14,365,854 |
13,962,757 |
14,428,544 |
Notes payable |
364 |
1,546 |
1,729 |
31,911 |
2,093 |
Federal Home Loan Bank advances |
417,762 |
387,852 |
585,942 |
414,032 |
414,122 |
Other borrowings |
254,740 |
246,870 |
252,776 |
256,244 |
274,411 |
Secured borrowings - owed to securitization
investors |
— |
— |
— |
— |
— |
Subordinated notes |
— |
10,000 |
10,000 |
15,000 |
15,000 |
Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
249,493 |
249,493 |
Trade date securities payable |
303,088 |
— |
577 |
1,250 |
— |
Accrued interest payable and other
liabilities |
302,958 |
265,775 |
310,515 |
317,872 |
331,245 |
Total liabilities |
16,197,194 |
15,808,982 |
15,776,886 |
15,248,559 |
15,714,908 |
Shareholders' Equity: |
|
|
|
|
|
Preferred stock |
126,477 |
126,500 |
176,476 |
176,441 |
176,406 |
Common stock |
46,181 |
39,992 |
37,985 |
37,272 |
37,108 |
Surplus |
1,117,032 |
1,118,550 |
1,066,796 |
1,040,098 |
1,036,295 |
Treasury stock |
(3,000) |
(8,290) |
(8,214) |
(8,187) |
(7,838) |
Retained earnings |
676,935 |
643,228 |
612,821 |
581,131 |
555,023 |
Accumulated other comprehensive
(loss) income |
(63,036) |
(46,414) |
(49,204) |
(1,067) |
7,711 |
Total shareholders' equity |
1,900,589 |
1,873,566 |
1,836,660 |
1,825,688 |
1,804,705 |
Total liabilities and
shareholders' equity |
$18,097,783 |
$17,682,548 |
$17,613,546 |
$17,074,247 |
$17,519,613 |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Consolidated Statements
of Income (Unaudited) - 5 Quarter Trends |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(In thousands, except per share data) |
2013 |
2013 |
2013 |
2013 |
2012 |
Interest income |
|
|
|
|
|
Interest and fees on loans |
$149,528 |
$150,810 |
$145,983 |
$142,114 |
$146,946 |
Interest bearing deposits with
banks |
435 |
229 |
411 |
569 |
739 |
Federal funds sold and
securities purchased under resale agreements |
4 |
4 |
4 |
15 |
13 |
Securities |
9,690 |
9,224 |
9,359 |
8,752 |
8,086 |
Trading account securities |
(2) |
14 |
8 |
5 |
6 |
Federal Home Loan Bank and
Federal Reserve Bank stock |
709 |
687 |
693 |
684 |
656 |
Brokerage customer
receivables |
218 |
200 |
188 |
174 |
197 |
Total interest income |
160,582 |
161,168 |
156,646 |
152,313 |
156,643 |
Interest expense |
|
|
|
|
|
Interest on deposits |
12,488 |
12,524 |
13,675 |
14,504 |
16,208 |
Interest on Federal Home Loan
Bank advances |
2,700 |
2,729 |
2,821 |
2,764 |
2,835 |
Interest on notes payable and
other borrowings |
1,145 |
910 |
1,132 |
1,154 |
1,566 |
Interest on secured borrowings
- owed to securitization investors |
— |
— |
— |
— |
— |
Interest on subordinated
notes |
16 |
40 |
52 |
59 |
66 |
Interest on junior subordinated
debentures |
1,925 |
3,183 |
3,142 |
3,119 |
3,192 |
Total interest expense |
18,274 |
19,386 |
20,822 |
21,600 |
23,867 |
Net interest income |
142,308 |
141,782 |
135,824 |
130,713 |
132,776 |
Provision for credit losses |
3,850 |
11,114 |
15,382 |
15,687 |
19,546 |
Net interest income after provision for
credit losses |
138,458 |
130,668 |
120,442 |
115,026 |
113,230 |
Non-interest income |
|
|
|
|
|
Wealth management |
16,265 |
16,057 |
15,892 |
14,828 |
13,634 |
Mortgage banking |
19,296 |
25,682 |
31,734 |
30,145 |
34,702 |
Service charges on deposit
accounts |
5,230 |
5,308 |
5,035 |
4,793 |
4,534 |
(Losses) gains on
available-for-sale securities, net |
(3,328) |
75 |
2 |
251 |
2,561 |
Fees from covered call
options |
1,856 |
285 |
993 |
1,639 |
2,156 |
Gain on bargain purchases,
net |
— |
— |
— |
— |
85 |
Trading (losses) gains,
net |
(278) |
(1,655) |
3,260 |
(435) |
(120) |
Other |
7,320 |
8,910 |
7,079 |
6,158 |
7,637 |
Total non-interest income |
46,361 |
54,662 |
63,995 |
57,379 |
65,189 |
Non-interest expense |
|
|
|
|
|
Salaries and employee
benefits |
74,049 |
78,007 |
79,225 |
77,513 |
76,140 |
Equipment |
7,260 |
6,593 |
6,413 |
6,184 |
6,468 |
Occupancy, net |
9,994 |
9,079 |
8,707 |
8,853 |
8,480 |
Data processing |
4,831 |
4,884 |
4,358 |
4,599 |
4,178 |
Advertising and marketing |
3,517 |
2,772 |
2,722 |
2,040 |
2,725 |
Professional fees |
4,132 |
3,378 |
4,191 |
3,221 |
3,158 |
Amortization of other
intangible assets |
1,189 |
1,154 |
1,164 |
1,120 |
1,108 |
FDIC insurance |
3,036 |
3,245 |
3,003 |
3,444 |
3,039 |
OREO expenses, net |
2,671 |
2,499 |
2,284 |
(1,620) |
5,269 |
Other |
16,318 |
15,637 |
16,120 |
14,765 |
18,983 |
Total non-interest expense |
126,997 |
127,248 |
128,187 |
120,119 |
129,548 |
Income before taxes |
57,822 |
58,082 |
56,250 |
52,286 |
48,871 |
Income tax expense |
22,534 |
22,519 |
21,943 |
20,234 |
18,782 |
Net income |
$35,288 |
$35,563 |
$34,307 |
$32,052 |
$30,089 |
Preferred stock dividends and discount
accretion |
$1,581 |
$1,581 |
$2,617 |
$2,616 |
$2,616 |
Net income applicable to common
shares |
$33,707 |
$33,982 |
$31,690 |
$29,436 |
$27,473 |
Net income per common share -
Basic |
$0.82 |
$0.86 |
$0.85 |
$0.80 |
$0.75 |
Net income per common share -
Diluted |
$0.70 |
$0.71 |
$0.69 |
$0.65 |
$0.61 |
Cash dividends declared per common
share |
$— |
$0.09 |
$— |
$0.09 |
$— |
Weighted average common shares
outstanding |
40,954 |
39,331 |
37,486 |
36,976 |
36,543 |
Dilutive potential common shares |
9,598 |
10,823 |
12,354 |
12,463 |
12,458 |
Average common shares and dilutive common
shares |
50,552 |
50,154 |
49,840 |
49,439 |
49,001 |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Period End Loan Balances
- 5 Quarter Trends |
|
|
|
|
|
|
|
|
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Balance: |
|
|
|
|
|
Commercial |
$3,253,687 |
$3,109,121 |
$3,119,931 |
$2,872,695 |
$2,914,798 |
Commercial real estate |
4,230,035 |
4,146,110 |
4,094,628 |
3,990,465 |
3,864,118 |
Home equity |
719,137 |
736,620 |
758,260 |
759,218 |
788,474 |
Residential real-estate |
434,992 |
397,707 |
384,961 |
360,652 |
367,213 |
Premium finance receivables -
commercial |
2,167,565 |
2,150,481 |
2,165,734 |
1,997,160 |
1,987,856 |
Premium finance receivables -
life insurance |
1,923,698 |
1,869,739 |
1,821,147 |
1,753,512 |
1,725,166 |
Indirect consumer (1) |
50,680 |
57,236 |
64,521 |
69,245 |
77,333 |
Consumer and other |
116,808 |
114,025 |
107,710 |
97,365 |
103,985 |
Total loans, net of unearned
income, excluding covered loans |
$12,896,602 |
$12,581,039 |
$12,516,892 |
$11,900,312 |
$11,828,943 |
Covered loans |
346,431 |
415,988 |
454,602 |
518,661 |
560,087 |
Total loans, net of unearned
income |
$13,243,033 |
$12,997,027 |
$12,971,494 |
$12,418,973 |
$12,389,030 |
Mix: |
|
|
|
|
|
Commercial |
25% |
24% |
24% |
23% |
24% |
Commercial real estate |
32 |
32 |
31 |
32 |
31 |
Home equity |
5 |
6 |
6 |
6 |
6 |
Residential real-estate |
3 |
3 |
3 |
3 |
3 |
Premium finance receivables -
commercial |
16 |
16 |
16 |
16 |
16 |
Premium finance receivables -
life insurance |
15 |
14 |
14 |
14 |
14 |
Indirect consumer (1) |
— |
1 |
1 |
1 |
1 |
Consumer and other |
1 |
1 |
1 |
1 |
1 |
Total loans, net of unearned
income, excluding covered loans |
97% |
97% |
96% |
96% |
96% |
Covered loans |
3 |
3 |
4 |
4 |
4 |
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 |
|
|
|
|
|
|
|
|
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Balance: |
|
|
|
|
|
Non-interest bearing |
$2,721,771 |
$2,622,518 |
$2,450,659 |
$2,243,440 |
$2,396,264 |
NOW |
1,953,882 |
1,922,906 |
2,147,004 |
2,043,227 |
2,022,957 |
Wealth Management deposits
(1) |
1,013,850 |
1,099,509 |
1,083,897 |
868,119 |
991,902 |
Money Market |
3,359,999 |
3,423,413 |
3,037,354 |
2,879,636 |
2,761,498 |
Savings |
1,392,575 |
1,318,147 |
1,304,619 |
1,258,682 |
1,275,012 |
Time certificates of
deposit |
4,226,712 |
4,260,953 |
4,342,321 |
4,669,653 |
4,980,911 |
Total deposits |
$14,668,789 |
$14,647,446 |
$14,365,854 |
$13,962,757 |
$14,428,544 |
Mix: |
|
|
|
|
|
Non-interest bearing |
19% |
18% |
17% |
16% |
17% |
NOW |
13 |
13 |
15 |
15 |
14 |
Wealth Management deposits
(1) |
7 |
8 |
8 |
6 |
7 |
Money Market |
23 |
23 |
21 |
21 |
19 |
Savings |
9 |
9 |
9 |
9 |
9 |
Time certificates of
deposit |
29 |
29 |
30 |
33 |
34 |
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 |
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Net interest income |
$142,880 |
$142,391 |
$136,409 |
$131,207 |
$133,285 |
Call option income |
1,856 |
285 |
993 |
1,639 |
2,156 |
Net interest income including call option
income |
$144,736 |
$142,676 |
$137,402 |
$132,846 |
$135,441 |
Yield on earning assets |
3.98% |
4.05% |
4.04% |
3.97% |
4.01% |
Rate on interest-bearing liabilities |
0.56 |
0.60 |
0.65 |
0.68 |
0.74 |
Rate spread |
3.42% |
3.45% |
3.39% |
3.29% |
3.27% |
Net free funds contribution |
0.11 |
0.12 |
0.11 |
0.12 |
0.13 |
Net interest margin |
3.53 |
3.57 |
3.50 |
3.41 |
3.40 |
Call option income |
0.05 |
0.01 |
0.03 |
0.04 |
0.05 |
Net interest margin including call option
income |
3.58% |
3.58% |
3.53% |
3.45% |
3.45% |
|
|
|
|
|
|
WINTRUST FINANCIAL CORPORATION -
SUPPLEMENTAL FINANCIAL INFORMATION |
|
|
|
|
|
Net Interest Margin (Including Call
Option Income - YTD Trends) |
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended |
|
December 31, |
(Dollars in thousands) |
2013 |
2012 |
2011 |
2010 |
2009 |
Net interest income |
$552,887 |
$521,463 |
$463,071 |
$417,564 |
$314,096 |
Call option income |
4,773 |
10,476 |
13,570 |
2,235 |
1,998 |
Net interest income including call option
income |
$557,660 |
$531,939 |
$476,641 |
$419,799 |
$316,094 |
Yield on earning assets |
4.01% |
4.21% |
4.49% |
4.80% |
5.07% |
Rate on interest-bearing liabilities |
0.62 |
0.86 |
1.23 |
1.61 |
2.29 |
Rate spread |
3.39% |
3.35% |
3.26% |
3.19% |
2.78% |
Net free funds contribution |
0.11 |
0.14 |
0.16 |
0.18 |
0.23 |
Net interest margin |
3.50 |
3.49 |
3.42 |
3.37 |
3.01 |
Call option income |
0.03 |
0.07 |
0.10 |
0.02 |
0.02 |
Net interest margin including call option
income |
3.53% |
3.56% |
3.52% |
3.39% |
3.03% |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Quarterly Average
Balances - 5 Quarter Trends |
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(In thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Liquidity management assets |
$2,613,876 |
$2,262,839 |
$2,560,118 |
$2,797,310 |
$2,949,034 |
Other earning assets |
28,746 |
27,426 |
25,775 |
24,205 |
27,482 |
Loans, net of unearned income |
13,043,666 |
13,113,138 |
12,546,676 |
12,252,558 |
12,001,433 |
Covered loans |
388,148 |
435,961 |
491,603 |
536,284 |
626,449 |
Total earning assets |
$16,074,436 |
$15,839,364 |
$15,624,172 |
$15,610,357 |
$15,604,398 |
Allowance for loan and covered loan
losses |
(122,060) |
(126,164) |
(126,455) |
(125,221) |
(135,156) |
Cash and due from banks |
237,138 |
209,539 |
225,712 |
217,345 |
206,914 |
Other assets |
1,646,485 |
1,566,832 |
1,560,556 |
1,554,362 |
1,572,494 |
Total assets |
$17,835,999 |
$17,489,571 |
$17,283,985 |
$17,256,843 |
$17,248,650 |
Interest-bearing deposits |
$11,945,314 |
$11,817,636 |
$11,766,422 |
$11,857,400 |
$11,709,058 |
Federal Home Loan Bank advances |
389,583 |
454,563 |
434,572 |
414,092 |
414,289 |
Notes payable and other borrowings |
251,168 |
256,318 |
273,255 |
297,151 |
397,807 |
Secured borrowings - owed to securitization
investors |
— |
— |
— |
— |
— |
Subordinated notes |
4,022 |
10,000 |
13,187 |
15,000 |
15,000 |
Junior subordinated notes |
249,493 |
249,493 |
249,493 |
249,493 |
249,493 |
Total interest-bearing
liabilities |
$12,839,580 |
$12,788,010 |
$12,736,929 |
$12,833,136 |
$12,785,647 |
Non-interest bearing deposits |
2,723,360 |
2,552,182 |
2,379,315 |
2,290,725 |
2,314,935 |
Other liabilities |
377,561 |
296,257 |
308,476 |
314,855 |
361,244 |
Equity |
1,895,498 |
1,853,122 |
1,859,265 |
1,818,127 |
1,786,824 |
Total liabilities and
shareholders' equity |
$17,835,999 |
$17,489,571 |
$17,283,985 |
$17,256,843 |
$17,248,650 |
|
|
|
|
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Net Interest Margin - 5
Quarter Trends |
|
|
|
|
|
|
|
Three Months Ended |
|
December 31,
2013 |
September 30, 2013 |
June 30, 2013 |
March 31, 2013 |
December 31, 2012 |
Yield earned on: |
|
|
|
|
|
Liquidity management assets |
1.70% |
1.84% |
1.70% |
1.50% |
1.33% |
Other earning assets |
2.95 |
3.19 |
3.13 |
3.02 |
2.95 |
Loans, net of unearned income |
4.32 |
4.30 |
4.38 |
4.36 |
4.45 |
Covered loans |
7.85 |
8.16 |
7.40 |
7.96 |
8.10 |
Total earning assets |
3.98% |
4.05% |
4.04% |
3.97% |
4.01% |
Rate paid on: |
|
|
|
|
|
Interest-bearing deposits |
0.41% |
0.42% |
0.47% |
0.50% |
0.55% |
Federal Home Loan Bank advances |
2.75 |
2.38 |
2.60 |
2.71 |
2.72 |
Notes payable and other borrowings |
1.81 |
1.41 |
1.66 |
1.57 |
1.57 |
Secured borrowings - owed to securitization
investors |
— |
— |
— |
— |
— |
Subordinated notes |
1.56 |
1.57 |
1.58 |
1.56 |
1.72 |
Junior subordinated notes |
3.02 |
4.99 |
4.98 |
5.00 |
5.01 |
Total interest-bearing
liabilities |
0.56% |
0.60% |
0.65% |
0.68% |
0.74% |
Interest rate spread |
3.42% |
3.45% |
3.39% |
3.29% |
3.27% |
Net free funds/contribution |
0.11 |
0.12 |
0.11 |
0.12 |
0.13 |
Net interest income/Net interest margin |
3.53% |
3.57% |
3.50% |
3.41% |
3.40% |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Non-Interest Income - 5
Quarter Trends |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(In thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Brokerage |
$7,200 |
$7,388 |
$7,426 |
$7,267 |
$6,404 |
Trust and asset management |
9,065 |
8,669 |
8,466 |
7,561 |
7,230 |
Total wealth management |
16,265 |
16,057 |
15,892 |
14,828 |
13,634 |
Mortgage banking |
19,296 |
25,682 |
31,734 |
30,145 |
34,702 |
Service charges on deposit accounts |
5,230 |
5,308 |
5,035 |
4,793 |
4,534 |
(Loss) gains on available-for-sale |
(3,328) |
75 |
2 |
251 |
2,561 |
securities, net |
|
|
|
|
|
Fees from covered call options |
1,856 |
285 |
993 |
1,639 |
2,156 |
Gain on bargain purchases, net |
— |
— |
— |
— |
85 |
Trading (losses) gains, net |
(278) |
(1,655) |
3,260 |
(435) |
(120) |
Other: |
|
|
|
|
|
Interest rate swap fees |
1,537 |
2,183 |
1,638 |
2,270 |
2,178 |
Bank Owned Life Insurance |
1,074 |
625 |
902 |
846 |
686 |
Administrative services |
878 |
943 |
832 |
738 |
867 |
Miscellaneous |
3,831 |
5,159 |
3,707 |
2,304 |
3,906 |
Total other income |
7,320 |
8,910 |
7,079 |
6,158 |
7,637 |
Total Non-Interest
Income |
$46,361 |
$54,662 |
$63,995 |
$57,379 |
$65,189 |
|
|
|
|
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Non-Interest Expense - 5
Quarter Trends |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(In thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Salaries and employee benefits: |
|
|
|
|
|
Salaries |
$43,832 |
$42,789 |
$41,671 |
$41,831 |
$40,457 |
Commissions and bonus |
18,009 |
23,409 |
25,143 |
21,276 |
23,968 |
Benefits |
12,208 |
11,809 |
12,411 |
14,406 |
11,715 |
Total salaries and employee benefits |
74,049 |
78,007 |
79,225 |
77,513 |
76,140 |
Equipment |
7,260 |
6,593 |
6,413 |
6,184 |
6,468 |
Occupancy, net |
9,994 |
9,079 |
8,707 |
8,853 |
8,480 |
Data processing |
4,831 |
4,884 |
4,358 |
4,599 |
4,178 |
Advertising and marketing |
3,517 |
2,772 |
2,722 |
2,040 |
2,725 |
Professional fees |
4,132 |
3,378 |
4,191 |
3,221 |
3,158 |
Amortization of other intangible assets |
1,189 |
1,154 |
1,164 |
1,120 |
1,108 |
FDIC insurance |
3,036 |
3,245 |
3,003 |
3,444 |
3,039 |
OREO expenses, net |
2,671 |
2,499 |
2,284 |
(1,620) |
5,269 |
Other: |
|
|
|
|
|
Commissions - 3rd party
brokers |
1,439 |
1,277 |
1,128 |
1,233 |
944 |
Postage |
1,622 |
1,255 |
1,464 |
1,249 |
1,856 |
Stationery and supplies |
1,157 |
1,009 |
887 |
934 |
1,095 |
Miscellaneous |
12,100 |
12,096 |
12,641 |
11,349 |
15,088 |
Total other expense |
16,318 |
15,637 |
16,120 |
14,765 |
18,983 |
Total Non-Interest
Expense |
$126,997 |
$127,248 |
$128,187 |
$120,119 |
$129,548 |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Allowance for Credit
Losses, excluding covered loans - 5 Quarter Trends |
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Allowance for loan losses at
beginning of period |
$107,188 |
$106,842 |
$110,348 |
$107,351 |
$112,287 |
Provision for credit
losses |
3,904 |
11,580 |
15,133 |
15,367 |
20,672 |
Other adjustments |
(195) |
(205) |
(309) |
(229) |
(289) |
Reclassification from/(to) allowance
for unfunded lending-related commitments |
504 |
284 |
65 |
(213) |
(260) |
Charge-offs: |
|
|
|
|
|
Commercial |
5,209 |
3,281 |
1,093 |
4,540 |
9,782 |
Commercial real estate |
7,517 |
6,982 |
14,947 |
3,299 |
9,084 |
Home equity |
1,468 |
711 |
1,785 |
2,397 |
3,496 |
Residential real estate |
385 |
328 |
517 |
1,728 |
2,470 |
Premium finance receivables -
commercial |
1,395 |
1,294 |
1,306 |
1,068 |
1,284 |
Premium finance receivables -
life insurance |
14 |
3 |
— |
— |
13 |
Indirect consumer |
59 |
23 |
16 |
32 |
64 |
Consumer and other |
578 |
193 |
112 |
97 |
570 |
Total charge-offs |
16,625 |
12,815 |
19,776 |
13,161 |
26,763 |
Recoveries: |
|
|
|
|
|
Commercial |
336 |
756 |
268 |
295 |
368 |
Commercial real estate |
1,302 |
272 |
584 |
368 |
978 |
Home equity |
56 |
43 |
171 |
162 |
43 |
Residential real estate |
202 |
64 |
18 |
5 |
9 |
Premium finance receivables -
commercial |
230 |
314 |
279 |
285 |
250 |
Premium finance receivables -
life insurance |
2 |
2 |
— |
9 |
15 |
Indirect consumer |
9 |
12 |
17 |
15 |
27 |
Consumer and other |
9 |
39 |
44 |
94 |
14 |
Total recoveries |
2,146 |
1,502 |
1,381 |
1,233 |
1,704 |
Net
charge-offs |
(14,479) |
(11,313) |
(18,395) |
(11,928) |
(25,059) |
Allowance for loan
losses at period end |
$96,922 |
$107,188 |
$106,842 |
$110,348 |
$107,351 |
Allowance for unfunded
lending-related commitments at period end |
719 |
1,267 |
3,563 |
15,287 |
14,647 |
Allowance for credit
losses at period end |
$97,641 |
$108,455 |
$110,405 |
$125,635 |
$121,998 |
Annualized net
charge-offs by category as a percentage of its own respective
category's average: |
|
|
|
|
|
Commercial |
0.61% |
0.32% |
0.11% |
0.61% |
1.35% |
Commercial real estate |
0.59 |
0.65 |
1.42 |
0.30 |
0.86 |
Home equity |
0.77 |
0.36 |
0.85 |
1.17 |
1.72 |
Residential real estate |
0.10 |
0.12 |
0.26 |
0.93 |
1.19 |
Premium finance receivables -
commercial |
0.21 |
0.17 |
0.20 |
0.16 |
0.21 |
Premium finance receivables -
life insurance |
— |
— |
— |
— |
— |
Indirect consumer |
0.37 |
0.08 |
(0.01) |
0.09 |
0.19 |
Consumer and other |
1.72 |
0.48 |
0.24 |
0.01 |
1.86 |
Total loans, net of unearned
income, excluding covered loans |
0.44% |
0.34% |
0.59% |
0.39% |
0.83% |
Net charge-offs as a
percentage of the provision for credit losses |
370.90% |
97.69% |
121.57% |
77.62% |
121.22% |
Loans at
period-end |
$12,896,602 |
$12,581,039 |
$12,516,892 |
$11,900,312 |
$11,828,943 |
Allowance for loan
losses as a percentage of loans at period end |
0.75% |
0.85% |
0.85% |
0.93% |
0.91% |
Allowance for credit
losses as a percentage of loans at period end |
0.76% |
0.86% |
0.88% |
1.06% |
1.03% |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Non-Performing Assets,
excluding covered assets - 5 Quarter Trends |
|
|
|
|
|
|
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(Dollars in thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
Loans past due greater than 90 days
and still accruing (1): |
|
|
|
|
|
Commercial |
$— |
$190 |
$100 |
$— |
$— |
Commercial real-estate |
230 |
3,389 |
3,263 |
— |
— |
Home equity |
— |
— |
25 |
— |
100 |
Residential real-estate |
— |
— |
— |
— |
— |
Premium finance receivables -
commercial |
8,842 |
11,751 |
6,671 |
7,677 |
10,008 |
Premium finance receivables -
life insurance |
— |
592 |
1,212 |
2,256 |
— |
Indirect consumer |
105 |
100 |
217 |
145 |
189 |
Consumer and other |
— |
— |
— |
— |
32 |
Total loans past due greater
than 90 days and still accruing |
9,177 |
16,022 |
11,488 |
10,078 |
10,329 |
Non-accrual loans (2): |
|
|
|
|
|
Commercial |
10,780 |
17,647 |
17,248 |
18,373 |
21,737 |
Commercial real-estate |
46,658 |
52,723 |
54,825 |
61,807 |
49,973 |
Home equity |
10,071 |
10,926 |
12,322 |
14,891 |
13,423 |
Residential real-estate |
14,974 |
14,126 |
10,213 |
9,606 |
11,728 |
Premium finance receivables -
commercial |
10,537 |
10,132 |
13,605 |
12,068 |
9,302 |
Premium finance receivables -
life insurance |
— |
14 |
16 |
20 |
25 |
Indirect consumer |
55 |
80 |
91 |
95 |
55 |
Consumer and other |
1,082 |
1,591 |
1,677 |
1,695 |
1,511 |
Total non-accrual loans |
94,157 |
107,239 |
109,997 |
118,555 |
107,754 |
Total non-performing
loans: |
|
|
|
|
|
Commercial |
10,780 |
17,837 |
17,348 |
18,373 |
21,737 |
Commercial real-estate |
46,888 |
56,112 |
58,088 |
61,807 |
49,973 |
Home equity |
10,071 |
10,926 |
12,347 |
14,891 |
13,523 |
Residential real-estate |
14,974 |
14,126 |
10,213 |
9,606 |
11,728 |
Premium finance receivables -
commercial |
19,379 |
21,883 |
20,276 |
19,745 |
19,310 |
Premium finance receivables -
life insurance |
— |
606 |
1,228 |
2,276 |
25 |
Indirect consumer |
160 |
180 |
308 |
240 |
244 |
Consumer and other |
1,082 |
1,591 |
1,677 |
1,695 |
1,543 |
Total non-performing loans |
$103,334 |
$123,261 |
$121,485 |
$128,633 |
$118,083 |
Other real estate owned |
43,632 |
46,901 |
46,169 |
50,593 |
56,174 |
Other real estate owned -
obtained in acquisition |
6,822 |
8,349 |
10,856 |
5,584 |
6,717 |
Other repossessed assets |
$542 |
$446 |
$1,032 |
$4,315 |
$— |
Total non-performing
assets |
$154,330 |
$178,957 |
$179,542 |
$189,125 |
$180,974 |
TDRs performing under the
contractual terms of the loan agreement |
78,610 |
79,205 |
93,810 |
97,122 |
106,119 |
Total non-performing loans by
category as a percent of its own respective category's period-end
balance: |
|
|
|
|
|
Commercial |
0.33% |
0.57% |
0.56% |
0.64% |
0.75% |
Commercial real-estate |
1.11 |
1.35 |
1.42 |
1.55 |
1.29 |
Home equity |
1.40 |
1.48 |
1.63 |
1.96 |
1.72 |
Residential real-estate |
3.44 |
3.55 |
2.65 |
2.66 |
3.19 |
Premium finance receivables -
commercial |
0.89 |
1.02 |
0.94 |
0.99 |
0.97 |
Premium finance receivables -
life insurance |
— |
0.03 |
0.07 |
0.13 |
— |
Indirect consumer |
0.32 |
0.31 |
0.48 |
0.35 |
0.32 |
Consumer and other |
0.93 |
1.40 |
1.56 |
1.74 |
1.48 |
Total loans, net of unearned
income |
0.80% |
0.98% |
0.97% |
1.08% |
1.00% |
Total non-performing
assets as a percentage of total assets |
0.85% |
1.01% |
1.02% |
1.11% |
1.03% |
Allowance for loan
losses as a percentage of total non-performing loans |
93.80% |
86.96% |
87.95% |
85.79% |
90.91% |
|
|
|
|
|
|
(1) As of the dates shown,
no TDRs were past due greater than 90 days and still accruing
interest. |
(2) Non-accrual loans
included in TDRs totaling $28.5 million, $35.8 million, $32.4
million, $19.2 million and $20.4 million as of December 31, 2013,
September 30, 2013, June 30, 2013, March 31, 2013 and December 31,
2012. |
CONTACT: Edward J. Wehmer, President & Chief Executive Officer
David A. Dykstra, Senior Executive Vice President
& Chief Operating Officer
(847) 939-9000
Web site address: www.wintrust.com
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