Wintrust Financial Corporation ("Wintrust" or "the Company")
(Nasdaq:WTFC) announced net income of $34.5 million or $0.68 per
diluted common share for the first quarter of 2014 compared to net
income of $35.3 million or $0.70 per diluted common share for the
fourth quarter of 2013 and $32.1 million or $0.65 per diluted
common share for the first quarter of 2013.
Highlights compared with the Fourth Quarter of
2013*:
- Net interest margin, on a fully taxable-equivalent basis,
improved by eight basis points to 3.61% from 3.53%
- Total loans, excluding covered loans and mortgage loans
held-for-sale, increased by $237 million
- Total deposits increased by $460 million to $15 billion
- Provision for credit losses decreased by $2 million
- Net charge-offs declined by $6.7 million from $14.5 million to
$7.8 million
- The allowance for loan losses as a percentage of total
non-performing loans increased to 102.4%. Non-performing loans
declined by $13.2 million, or 13%, to $90.1 million and
non-performing loans as a percent of total loans, excluding covered
loans, decreased to 0.69%.
- Capital ratios remain strong with a tangible common equity
ratio, assuming full conversion of preferred stock, of 8.7%
- Opened two new banking locations in Evergreen Park and Prospect
Heights
* See "Supplemental Financial Measures/Ratios" on page 13/14 for
more information on non-GAAP measures.
Edward J. Wehmer, President and Chief Executive Officer,
commented, "Our first quarter net income of $34.5 million
represents an increase of 8% as compared to net income of $32.1
million in the first quarter of 2013. The first quarter of 2014 was
highlighted by an increased net interest margin, improvement in
non-performing asset levels and strong loan and deposit
growth."
Mr. Wehmer continued, "Net interest margin, on a fully
taxable-equivalent basis, improved to 3.61% as compared to 3.53% in
the fourth quarter of 2013. The current quarter's net interest
margin, on a fully taxable-equivalent basis, is the highest the
Company has reported since the first quarter of 2001. Net interest
margin increased as a result of strong loan growth along with a
more desirable funding blend as wholesale borrowings declined and
deposit mix improved."
Commenting on credit quality, Mr. Wehmer noted, "For the second
quarter in a row, the Company's non-performing loans decreased
significantly. These decreases are both due to a decline in the
volume of new non-performing assets as well as the reduction in
existing non-performing assets through the efforts of our credit
workout teams. As a result, our credit quality metrics are
returning to levels experienced prior to the impact of the
recession. The Company recorded a lower provision for loan losses
in the first quarter due to the credit quality improvements and we
believe that the Company's reserves remain appropriate."
Mr. Wehmer further commented, "A general downturn in the
mortgage banking business coupled with a prolonged winter season
across the nation negatively affected our mortgage banking
operations in the current quarter. We expect a more favorable
mortgage banking environment in the second quarter resulting in
higher originations and mortgage banking revenue. We believe that
our mortgage banking business remains well positioned to grow both
organically and through acquisitions."
With regard to expenses, Mr. Wehmer further commented, "The
Company's efficiency ratio was elevated in the first quarter
primarily due to the time lag between the decline in mortgage
revenues and the related decrease in mortgage related expenses as
well as management's decision to limit staffing reductions in order
to remain properly staffed for the higher volumes anticipated in
the second quarter of 2014. Additionally, higher OREO valuation
charges on various properties as we continue to aggressively
attempt to reduce non-performing assets and seasonal increases in
employee benefits expense contributed to the elevated efficiency
ratio. Excluding these items, the Company's
efficiency ratio would have been more in line with prior periods
and other expense categories were well controlled and generally
less than the prior quarter."
Turning to the future, Mr. Wehmer stated, "We expanded our
franchise in the first quarter by opening new bank branches in
Evergreen Park and Prospect Heights and acquiring a bank branch in
Lake Bluff. We also signed an agreement to acquire a bank branch in
Stone Park, which is expected to be completed in the second
quarter. Additionally, we recently announced two acquisitions to
expand our footprint in southern Wisconsin through the pending
purchases of a bank branch from THE National Bank and 11 bank
branches from Talmer Bancorp, Inc. Evaluating strategic
acquisitions of this nature 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.
Growing franchise value, increasing profitability, leveraging our
expense infrastructure and increasing shareholder value continue to
be our main objectives."
A map of Wintrust locations is available at
http://media.globenewswire.com/cache/11955/file/25821.pdf
Graphs accompanying this release are available at
http://media.globenewswire.com/cache/11955/file/25822.pdf
Wintrust's key operating measures and growth rates for the first
quarter of 2014, 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 |
4th Quarter |
1st Quarter |
(Dollars in thousands) |
March 31,
2014 |
December 31, 2013 |
March 31, 2013 |
2013 |
2013 |
Net income |
$ 34,500 |
$ 35,288 |
$ 32,052 |
(2)% |
8% |
Net income per common share – diluted |
$ 0.68 |
$ 0.70 |
$ 0.65 |
(3)% |
5% |
Net revenue (1) |
$ 189,535 |
$ 188,669 |
$ 188,092 |
—% |
1% |
Net interest income |
$ 144,006 |
$ 142,308 |
$ 130,713 |
1% |
10% |
Net interest margin (2) |
3.61% |
3.53% |
3.41% |
8 bp |
20 bp |
Net overhead ratio (2) (3) |
1.93% |
1.79% |
1.47% |
14 bp |
46 bp |
Efficiency ratio (2) (4) |
69.02% |
65.95% |
63.78% |
307 bp |
524 bp |
Return on average assets |
0.78% |
0.78% |
0.75% |
— bp |
3 bp |
Return on average common equity |
7.43% |
7.56% |
7.27% |
(13) bp |
16 bp |
Return on average tangible common
equity |
9.71% |
9.92% |
9.57% |
(21) bp |
14 bp |
At end of period |
|
|
|
|
|
Total assets |
$ 18,221,163 |
$ 18,097,783 |
$ 17,074,247 |
3% |
7% |
Total loans, excluding loans held-for-sale,
excluding covered loans |
$ 13,133,160 |
$ 12,896,602 |
$ 11,900,312 |
7% |
10% |
Total loans, including loans held-for-sale,
excluding covered loans |
$ 13,348,391 |
$ 13,230,929 |
$ 12,281,234 |
4% |
9% |
Total deposits |
$ 15,129,045 |
$ 14,668,789 |
$ 13,962,757 |
13% |
8% |
Total shareholders' equity |
$ 1,940,143 |
$ 1,900,589 |
$ 1,825,688 |
8% |
6% |
|
|
|
|
|
|
(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 – First Quarter
2014
For the first quarter of 2014, net interest income totaled
$144.0 million, an increase of $1.7 million as compared to the
fourth quarter of 2013 and an increase of $13.3 million as compared
to the first quarter of 2013. The net interest margin, on a
fully taxable equivalent basis, for the first quarter of 2014 was
3.61% compared to 3.53% for the fourth quarter of 2013 and 3.41%
for the first quarter of 2013. The changes in net interest
income on both a sequential and linked quarter basis are the result
of the following:
-- Net interest income increased $1.7 million in the first
quarter of 2014 compared to the fourth quarter of 2013, due
to:
- An increase in total interest income of $744,000 in the first
quarter of 2014 compared to the fourth quarter of 2013 resulting
from a six basis point increase in the yield on earning assets and
a $205.2 million increase in average earning assets, partially
offset by two fewer days in the current year quarter.
- A $954,000 reduction in interest expense in the first quarter
of 2014 compared to the fourth quarter of 2013 created by a two
basis point decline in the rate paid on total interest-bearing
liabilities and two fewer days in the current quarter, partially
offset by an increase in average interest-bearing liabilities of
$165.0 million.
- Combined, the increase in interest income of $744,000 and the
reduction of interest expense by $954,000 created the $1.7 million
increase in net interest income in the first quarter of 2014
compared to the fourth quarter of 2013.
-- Net interest income increased $13.3 million in the first
quarter of 2014 compared to the first quarter of 2013, due to:
- Average earning assets for the first quarter of 2014 increased
by $669.3 million compared to the first quarter of 2013. This
was comprised of average loan growth, excluding covered loans, of
$1.0 billion, partially offset by a decrease of $150.6 million in
the average balance of liquidity management and other assets and a
decrease of $210.4 million in the average balance of covered
loans. The growth in average total loans, excluding covered
loans, included an increase of $465.7 million in commercial loans,
$339.1 million in commercial real-estate loans, $219.1 million in
commercial premium finance receivables and $170.9 million in life
insurance premium finance receivables, partially offset by a
decrease of $154.3 million in mortgage loans held-for-sale and
$14.9 million in home equity and other loans.
- The average earning asset growth of $669.3 million in the first
quarter of 2014 and a 7 basis point improvement in the yield on
earning assets, resulted in an increase in total interest income of
$9.0 million in the first quarter of 2014 compared to the prior
year quarter.
- Funding mix improved as average demand deposits increased
$436.1 million, average interest bearing deposits increased $263.8
million and average wholesale borrowings decreased by $92.3 million
in the first quarter of 2014 compared to the first quarter of
2013. The change in funding resulted in a 14 basis point
decrease in the yield on average interest bearing liabilities which
created a $4.3 million decrease in interest expense.
- Combined, the increase in interest income of $9.0 million and
the reduction of interest expense by $4.3 million created the $13.3
million increase in net interest income in the first quarter of
2014 compared to the first quarter of 2013.
Non-interest income totaled $45.5 million in the first quarter
of 2014, decreasing $832,000, or 2%, compared to the fourth quarter
of 2013 and decreasing $11.9 million, or 21%, compared to the first
quarter of 2013. The decrease in non-interest income in the first
quarter of 2014 compared to the fourth quarter of 2013 is primarily
attributable to a decrease in mortgage banking revenues, partially
offset by an other-than-temporary impairment loss recorded by the
Company in the fourth quarter of 2013. The decrease in
non-interest income in the first quarter of 2014 compared to the
first quarter of 2013 was primarily attributable to a decrease in
mortgage banking revenues and fewer interest rate swap fees,
partially offset by higher wealth management revenues.
Mortgage banking revenue decreased $2.9 million when compared to
the fourth quarter of 2013 and $13.7 million when compared to the
first quarter of 2013. The decrease in mortgage banking revenue
from the fourth quarter of 2013 primarily resulted from decreased
originations in the current quarter due to a general downturn in
the mortgage banking business coupled with a prolonged winter
season across the nation, while the decrease in mortgage banking
revenue compared to the first quarter of 2013 resulted primarily
from decreased originations due to the favorable mortgage banking
environment in the first quarter of 2013. Loans originated and
sold to the secondary market were $527.3 million in the first
quarter of 2014 compared to $742.3 million in the fourth quarter of
2013 and $974.4 million in the first quarter of 2013 (see
"Non-Interest Income" section later in this release for further
detail).
Non-interest expense totaled $131.3 million in the first quarter
of 2014, increasing $4.3 million, or 3%, compared to the fourth
quarter of 2013 and increasing $11.2 million, or 9%, compared to
the first quarter of 2013. The increase in the current quarter
compared to the fourth quarter of 2013 can be primarily attributed
to an increase in commission and bonus expense due to higher
expenses related to variable pay based arrangements and an increase
in payroll taxes. The increase in the first quarter of 2014
compared to the first quarter of 2013 was primarily attributable to
higher OREO costs along with increases to salary, occupancy, and
equipment expenses. (see "Non-Interest Expense" section later in
this release for further detail).
Financial Performance Overview – Credit
Quality
The ratio of non-performing assets to total assets was 0.79% as
of March 31, 2014, compared to 0.85% at December 31, 2013
and 1.11% at March 31, 2013. Non-performing assets,
excluding covered assets, totaled $144.7 million at March 31,
2014, compared to $154.3 million at December 31, 2013 and
$189.1 million at March 31, 2013.
Non-performing loans, excluding covered loans, totaled $90.1
million, or 0.69% of total loans, at March 31, 2014, compared
to $103.3 million, or 0.80% of total loans, at December 31,
2013 and $128.6 million, or 1.08% of total loans, at March 31,
2013. Compared to December 31, 2013, non-performing
loans, excluding covered loans, decreased primarily as a
result of a $13.2 million and $2.8 million decrease in
non-performing loans within the commercial real-estate and home
equity loan portfolios, respectively, partially offset by a $1.9
million increase in non-performing loans within the property and
casualty premium finance receivables portfolio. The decrease in
non-performing loans, excluding covered loans, compared to
March 31, 2013 is primarily the result of a $28.1 million
decrease in the commercial real-estate loan portfolio, a $7.6
million decrease in the home equity loan portfolio and a $6.2
million decrease in the commercial loan portfolio, partially offset
by a $4.8 million increase in the residential real-estate loan
portfolio. OREO, excluding covered OREO, of $54.1 million at
March 31, 2014 increased $3.6 million compared to $50.5
million at December 31, 2013 and decreased $2.1 million
compared to $56.2 million at March 31, 2013.
The provision for credit losses, excluding the provision for
covered loan losses, remained relatively unchanged in the first
quarter of 2014 compared to the fourth quarter of 2013,
totaling $3.3 million for the first quarter of 2014 compared to
$3.9 million for the fourth quarter of 2013. Compared to the
first quarter of 2013, the provision for credit losses, excluding
the provision for covered loan losses, decreased from $15.4
million. 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 nonperforming loans and adversely classified loans.
Net charge-offs as a percentage of loans, excluding covered
loans, for the first quarter of 2014 totaled 24 basis points on an
annualized basis compared to 44 basis points on an annualized basis
in the fourth quarter of 2013 and 39 basis points on an annualized
basis in the first quarter of 2013. Net charge-offs decreased
in the first quarter of 2014 compared to the fourth quarter of 2013
primarily as a result of a $4.5 million decrease in net charge-offs
within the commercial loan portfolio and a $1.9 million decrease
within the commercial real estate loan portfolio. Compared to the
first quarter of 2013, net charge-offs decreased primarily as a
result of a $3.9 million decrease in net charge-offs within the
commercial loan portfolio and a $1.6 million decrease within the
residential real estate loan portfolio, partially offset by a $1.4
million increase within the commercial real estate loan
portfolio.
Excluding the allowance for covered loan losses, the allowance
for credit losses at March 31, 2014 totaled $93.0 million, or
0.71% of total loans, a decrease compared to $97.6 million, or
0.76% of total loans at December 31, 2013. At March 31,
2013, the allowance for credit losses, excluding the allowance for
covered loan losses, totaled $125.6 million, or 1.06% of total
loans. The decrease from March 31, 2013 to March 31,
2014 was partially attributable to a decrease in the allowance for
unfunded lending-related commitments during the period primarily as
a result of the funding of two letters of credit in the second and
third quarters of 2013 and the expiration of one letter of credit
in fourth quarter of 2013. As of March 31, 2014, the
allowance for unfunded lending-related commitments totaled $737,000
compared to $719,000 as of December 31, 2013 and $15.3 million
as of March 31, 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 |
(In thousands, except per share data) |
|
March 31, 2014 |
December 31, 2013 |
March 31, 2013 |
Net income |
|
$ 34,500 |
$ 35,288 |
$ 32,052 |
Less: Preferred stock dividends and discount
accretion |
|
1,581 |
1,581 |
2,616 |
Net income applicable to common
shares—Basic |
(A) |
32,919 |
33,707 |
29,436 |
Add: Dividends on convertible preferred
stock, if dilutive |
|
1,581 |
1,581 |
2,581 |
Net income applicable to common
shares—Diluted |
(B) |
34,500 |
35,288 |
32,017 |
Weighted average common shares
outstanding |
(C) |
46,195 |
40,954 |
36,976 |
Effect of dilutive potential common
shares: |
|
|
|
|
Common stock equivalents |
|
1,434 |
6,522 |
7,443 |
Convertible preferred stock, if
dilutive |
|
3,075 |
3,076 |
5,020 |
Weighted average common shares and effect of
dilutive potential common shares |
(D) |
50,704 |
50,552 |
49,439 |
Net income per common share: |
|
|
|
|
Basic |
(A/C) |
$
0.71 |
$ 0.82 |
$ 0.80 |
Diluted |
(B/D) |
$
0.68 |
$ 0.70 |
$ 0.65 |
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 |
(Dollars in thousands, except per share
data) |
March 31, 2014 |
December 31, 2013 |
March 31, 2013 |
Selected Financial Condition Data (at
end of period): |
|
|
|
Total assets |
$ 18,221,163 |
$ 18,097,783 |
$ 17,074,247 |
Total loans, excluding covered loans |
13,133,160 |
12,896,602 |
11,900,312 |
Total deposits |
15,129,045 |
14,668,789 |
13,962,757 |
Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
Total shareholders' equity |
1,940,143 |
1,900,589 |
1,825,688 |
Selected Statements of Income
Data: |
|
|
|
Net interest income |
$ 144,006 |
$ 142,308 |
$ 130,713 |
Net revenue (1) |
189,535 |
188,669 |
188,092 |
Net income |
34,500 |
35,288 |
32,052 |
Net income per common share – Basic |
$ 0.71 |
$ 0.82 |
$ 0.80 |
Net income per common share – Diluted |
$ 0.68 |
$ 0.70 |
$ 0.65 |
Selected Financial Ratios and Other
Data: |
|
|
|
Performance Ratios: |
|
|
|
Net interest margin (2) |
3.61% |
3.53% |
3.41% |
Non-interest income to average assets |
1.03% |
1.03% |
1.35% |
Non-interest expense to average assets |
2.96% |
2.82% |
2.82% |
Net overhead ratio (2) (3) |
1.93% |
1.79% |
1.47% |
Efficiency ratio (2) (4) |
69.02% |
65.95% |
63.78% |
Return on average assets |
0.78% |
0.78% |
0.75% |
Return on average common equity |
7.43% |
7.56% |
7.27% |
Return on average tangible common equity
(2) |
9.71% |
9.92% |
9.57% |
Average total assets |
$ 17,980,943 |
$ 17,835,999 |
$ 17,256,843 |
Average total shareholders' equity |
1,923,649 |
1,895,498 |
1,818,127 |
Average loans to average deposits ratio
(excluding covered loans) |
89.4% |
88.9% |
86.6% |
Average loans to average deposits ratio
(including covered loans) |
91.6% |
91.6% |
90.4% |
Common Share Data at end of
period: |
|
|
|
Market price per common share |
$ 48.66 |
$ 46.12 |
$ 37.04 |
Book value per common share (2) |
$ 39.21 |
$ 38.47 |
$ 38.13 |
Tangible common book value per share (2) |
$ 30.74 |
$ 29.93 |
$ 29.74 |
Common shares outstanding |
46,258,960 |
46,116,583 |
37,013,707 |
Other Data at end of
period:(8) |
|
|
|
Leverage Ratio (5) |
10.5% |
10.5% |
10.2% |
Tier 1 capital to risk-weighted assets
(5) |
12.0% |
12.2% |
12.4% |
Total capital to risk-weighted assets
(5) |
12.6% |
12.9% |
13.5% |
Tangible common equity ratio (TCE)
(2)(7) |
8.0% |
7.8% |
7.7% |
Tangible common equity ratio, assuming full
conversion of preferred stock (2) (7) |
8.7% |
8.5% |
8.8% |
Allowance for credit losses (6) |
$ 93,012 |
$ 97,641 |
$ 125,635 |
Non-performing loans |
$ 90,124 |
$ 103,334 |
$ 128,633 |
Allowance for credit losses to total loans
(6) |
0.71% |
0.76% |
1.06% |
Non-performing loans to total loans |
0.69% |
0.80% |
1.08% |
Number of: |
|
|
|
Bank subsidiaries |
15 |
15 |
15 |
Non-bank subsidiaries |
8 |
8 |
8 |
Banking offices |
126 |
124 |
108 |
|
|
|
|
(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) March
31, 2014 |
December 31, 2013 |
(Unaudited) March 31, 2013 |
Assets |
|
|
|
Cash and due from banks |
$ 330,262 |
$ 253,408 |
$ 199,575 |
Federal funds sold and securities purchased
under resale agreements |
12,476 |
10,456 |
13,626 |
Interest-bearing deposits with other
banks |
540,964 |
495,574 |
685,302 |
Available-for-sale securities, at fair
value |
1,949,697 |
2,176,290 |
1,870,831 |
Trading account securities |
1,068 |
497 |
1,036 |
Federal Home Loan Bank and Federal Reserve
Bank stock, at cost |
78,524 |
79,261 |
76,601 |
Brokerage customer receivables |
26,884 |
30,953 |
25,614 |
Mortgage loans held-for-sale |
215,231 |
334,327 |
380,922 |
Loans, net of unearned income, excluding
covered loans |
13,133,160 |
12,896,602 |
11,900,312 |
Covered loans |
312,478 |
346,431 |
518,661 |
Total loans |
13,445,638 |
13,243,033 |
12,418,973 |
Less: Allowance for loan
losses |
92,275 |
96,922 |
110,348 |
Less: Allowance for covered
loan losses |
3,447 |
10,092 |
12,272 |
Net loans |
13,349,916 |
13,136,019 |
12,296,353 |
Premises and equipment, net |
531,763 |
531,947 |
504,803 |
FDIC indemnification asset |
60,298 |
85,672 |
170,696 |
Accrued interest receivable and other
assets |
549,705 |
569,619 |
485,746 |
Trade date securities receivable |
182,600 |
— |
— |
Goodwill |
373,725 |
374,547 |
343,632 |
Other intangible assets |
18,050 |
19,213 |
19,510 |
Total
assets |
$ 18,221,163 |
$ 18,097,783 |
$ 17,074,247 |
Liabilities and Shareholders'
Equity |
|
|
|
Deposits: |
|
|
|
Non-interest bearing |
$ 2,773,922 |
$ 2,721,771 |
$ 2,243,440 |
Interest bearing |
12,355,123 |
11,947,018 |
11,719,317 |
Total deposits |
15,129,045 |
14,668,789 |
13,962,757 |
Notes payable |
182 |
364 |
31,911 |
Federal Home Loan Bank advances |
387,672 |
417,762 |
414,032 |
Other borrowings |
230,904 |
254,740 |
256,244 |
Subordinated notes |
— |
— |
15,000 |
Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
Trade date securities payable |
— |
303,088 |
1,250 |
Accrued interest payable and other
liabilities |
283,724 |
302,958 |
317,872 |
Total liabilities |
16,281,020 |
16,197,194 |
15,248,559 |
Shareholders' Equity: |
|
|
|
Preferred stock |
126,477 |
126,477 |
176,441 |
Common stock |
46,332 |
46,181 |
37,272 |
Surplus |
1,122,233 |
1,117,032 |
1,040,098 |
Treasury stock |
(3,380) |
(3,000) |
(8,187) |
Retained earnings |
705,234 |
676,935 |
581,131 |
Accumulated other comprehensive
loss |
(56,753) |
(63,036) |
(1,067) |
Total shareholders' equity |
1,940,143 |
1,900,589 |
1,825,688 |
Total liabilities and
shareholders' equity |
$ 18,221,163 |
$ 18,097,783 |
$ 17,074,247 |
|
|
WINTRUST FINANCIAL
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME (UNAUDITED) |
|
|
Three months
ended |
(In thousands, except per share data) |
March 31, 2014 |
December 31, 2013 |
March 31, 2013 |
Interest income |
|
|
|
Interest and fees on loans |
$ 147,030 |
$ 149,528 |
$ 142,114 |
Interest bearing deposits with
banks |
249 |
435 |
569 |
Federal funds sold and
securities purchased under resale agreements |
4 |
4 |
15 |
Securities |
13,114 |
9,690 |
8,752 |
Trading account securities |
9 |
(2) |
5 |
Federal Home Loan Bank and
Federal Reserve Bank stock |
711 |
709 |
684 |
Brokerage customer
receivables |
209 |
218 |
174 |
Total interest income |
161,326 |
160,582 |
152,313 |
Interest expense |
|
|
|
Interest on deposits |
11,923 |
12,488 |
14,504 |
Interest on Federal Home Loan
Bank advances |
2,643 |
2,700 |
2,764 |
Interest on notes payable and
other borrowings |
750 |
1,145 |
1,154 |
Interest on subordinated
notes |
— |
16 |
59 |
Interest on junior subordinated
debentures |
2,004 |
1,925 |
3,119 |
Total interest expense |
17,320 |
18,274 |
21,600 |
Net interest income |
144,006 |
142,308 |
130,713 |
Provision for credit losses |
1,880 |
3,850 |
15,687 |
Net interest income after provision for
credit losses |
142,126 |
138,458 |
115,026 |
Non-interest income |
|
|
|
Wealth management |
16,813 |
16,265 |
14,828 |
Mortgage banking |
16,428 |
19,296 |
30,145 |
Service charges on deposit
accounts |
5,346 |
5,230 |
4,793 |
(Losses) gains on
available-for-sale securities, net |
(33) |
(3,328) |
251 |
Fees from covered call
options |
1,542 |
1,856 |
1,639 |
Trading losses, net |
(652) |
(278) |
(435) |
Other |
6,085 |
7,320 |
6,158 |
Total non-interest income |
45,529 |
46,361 |
57,379 |
Non-interest expense |
|
|
|
Salaries and employee
benefits |
79,934 |
74,049 |
77,513 |
Equipment |
7,403 |
7,260 |
6,184 |
Occupancy, net |
10,993 |
9,994 |
8,853 |
Data processing |
4,715 |
4,831 |
4,599 |
Advertising and marketing |
2,816 |
3,517 |
2,040 |
Professional fees |
3,454 |
4,132 |
3,221 |
Amortization of other
intangible assets |
1,163 |
1,189 |
1,120 |
FDIC insurance |
2,951 |
3,036 |
3,444 |
OREO expense (income), net |
3,976 |
2,671 |
(1,620) |
Other |
13,910 |
16,318 |
14,765 |
Total non-interest expense |
131,315 |
126,997 |
120,119 |
Income before taxes |
56,340 |
57,822 |
52,286 |
Income tax expense |
21,840 |
22,534 |
20,234 |
Net income |
$ 34,500 |
$ 35,288 |
$ 32,052 |
Preferred stock dividends and discount
accretion |
$ 1,581 |
$ 1,581 |
$ 2,616 |
Net income applicable to common
shares |
$ 32,919 |
$ 33,707 |
$ 29,436 |
Net income per common share -
Basic |
$ 0.71 |
$ 0.82 |
$ 0.80 |
Net income per common share -
Diluted |
$ 0.68 |
$ 0.70 |
$ 0.65 |
Cash dividends declared per common
share |
$ 0.10 |
$ — |
$ 0.09 |
Weighted average common shares
outstanding |
46,195 |
40,954 |
36,976 |
Dilutive potential common shares |
4,509 |
9,598 |
12,463 |
Average common shares and dilutive common
shares |
50,704 |
50,552 |
49,439 |
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 return on
average tangible common equity. 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. The Company references
the return on average tangible common equity as a measurement of
profitability.
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 five quarters.
|
Three Months
Ended |
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(Dollars and shares in thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Calculation of Net Interest Margin
and Efficiency Ratio |
|
|
|
|
|
(A) Interest Income
(GAAP) |
$ 161,326 |
$ 160,582 |
$ 161,168 |
$ 156,646 |
$ 152,313 |
Taxable-equivalent
adjustment: |
|
|
|
|
|
- Loans |
231 |
226 |
241 |
225 |
150 |
- Liquidity Management
Assets |
455 |
347 |
361 |
356 |
343 |
- Other Earning
Assets |
4 |
(1) |
7 |
4 |
1 |
Interest Income - FTE |
$ 162,016 |
$ 161,154 |
$ 161,777 |
$ 157,231 |
$ 152,807 |
(B) Interest Expense
(GAAP) |
17,320 |
18,274 |
19,386 |
20,822 |
21,600 |
Net interest income - FTE |
$ 144,696 |
$ 142,880 |
$ 142,391 |
$ 136,409 |
$ 131,207 |
(C) Net Interest Income (GAAP) (A
minus B) |
$ 144,006 |
$ 142,308 |
$ 141,782 |
$ 135,824 |
$ 130,713 |
(D) Net interest margin
(GAAP) |
3.59% |
3.51% |
3.55% |
3.49% |
3.40% |
Net interest margin - FTE |
3.61% |
3.53% |
3.57% |
3.50% |
3.41% |
(E) Efficiency ratio
(GAAP) |
69.27% |
66.15% |
64.80% |
64.15% |
63.95% |
Efficiency ratio -
FTE |
69.02% |
65.95% |
64.60% |
63.97% |
63.78% |
(F) Net Overhead Ratio
(GAAP) |
1.93% |
1.79% |
1.65% |
1.49% |
1.47% |
Calculation of Tangible Common Equity
ratio (at period end) |
|
|
|
|
|
Total shareholders' equity |
$ 1,940,143 |
$ 1,900,589 |
$ 1,873,566 |
$ 1,836,660 |
$ 1,825,688 |
(G) Less: Preferred stock |
(126,477) |
(126,477) |
(126,500) |
(176,476) |
(176,441) |
Less: Intangible assets |
(391,775) |
(393,760) |
(376,291) |
(377,008) |
(363,142) |
(H) Total tangible common shareholders'
equity |
$ 1,421,891 |
$ 1,380,352 |
$ 1,370,775 |
$ 1,283,176 |
$ 1,286,105 |
Total assets |
$ 18,221,163 |
$ 18,097,783 |
$ 17,682,548 |
$ 17,613,546 |
$ 17,074,247 |
Less: Intangible assets |
(391,775) |
(393,760) |
(376,291) |
(377,008) |
(363,142) |
(I) Total tangible assets |
$ 17,829,388 |
$ 17,704,023 |
$ 17,306,257 |
$ 17,236,538 |
$ 16,711,105 |
Tangible common equity ratio
(H/I) |
8.0% |
7.8% |
7.9% |
7.4% |
7.7% |
Tangible common equity ratio,
assuming full conversion of preferred stock ((H-G)/I) |
8.7% |
8.5% |
8.7% |
8.5% |
8.8% |
Calculation of book value per
share |
|
|
|
|
|
Total shareholders' equity |
$ 1,940,143 |
$ 1,900,589 |
$ 1,873,566 |
$ 1,836,660 |
$ 1,825,688 |
Less: Preferred stock |
(126,477) |
(126,477) |
(126,500) |
(176,476) |
(176,441) |
(J) Total common equity |
$ 1,813,666 |
$ 1,774,112 |
$ 1,747,066 |
$ 1,660,184 |
$ 1,649,247 |
Actual common shares outstanding |
46,259 |
46,117 |
39,731 |
37,725 |
37,014 |
Add: TEU conversion shares |
— |
— |
6,133 |
6,145 |
6,238 |
(K) Common shares used for book value
calculation |
46,259 |
46,117 |
45,864 |
43,870 |
43,252 |
Book value per share
(J/K) |
$ 39.21 |
$ 38.47 |
$ 38.09 |
$ 37.84 |
$ 38.13 |
Tangible common book value per share
(H/K) |
$ 30.74 |
$ 29.93 |
$ 29.89 |
$ 29.25 |
$ 29.74 |
Calculation of return on average
common equity |
|
|
|
|
|
(L) Net income applicable to common
shares |
32,919 |
33,707 |
33,982 |
31,690 |
29,436 |
Add: After-tax intangible asset
amortization |
712 |
726 |
705 |
710 |
685 |
(M) Tangible net income applicable to common
shares |
33,631 |
34,433 |
34,687 |
32,400 |
30,121 |
Total average shareholders' equity |
1,923,649 |
1,895,498 |
1,853,122 |
1,859,265 |
1,818,127 |
Less: Average preferred stock |
(126,477) |
(126,484) |
(136,278) |
(176,454) |
(176,422) |
(N) Total average common shareholders'
equity |
1,797,172 |
1,769,014 |
1,716,844 |
1,682,811 |
1,641,705 |
Less: Average intangible assets |
(392,703) |
(391,791) |
(376,667) |
(372,796) |
(365,505) |
(O) Total average tangible common
shareholders' equity |
1,404,469 |
1,377,223 |
1,340,177 |
1,310,015 |
1,276,200 |
Return on average common equity,
annualized (L/N) |
7.43% |
7.56% |
7.85% |
7.55% |
7.27% |
Return on average tangible common
equity, annualized (M/O) |
9.71% |
9.92% |
10.27% |
9.92% |
9.57% |
|
|
LOANS |
Loan Portfolio Mix and
Growth Rates |
|
|
|
|
|
% Growth |
(Dollars in thousands) |
March 31, 2014 |
December 31, 2013 |
March 31, 2013 |
From (1) December 31, 2013 |
From March 31, 2013 |
Balance: |
|
|
|
|
|
Commercial |
$ 3,439,197 |
$ 3,253,687 |
$ 2,872,695 |
23% |
20% |
Commercial real-estate |
4,262,255 |
4,230,035 |
3,990,465 |
3 |
7 |
Home equity |
707,748 |
719,137 |
759,218 |
(6) |
(7) |
Residential real-estate |
426,769 |
434,992 |
360,652 |
(8) |
18 |
Premium finance receivables -
commercial |
2,208,361 |
2,167,565 |
1,997,160 |
8 |
11 |
Premium finance receivables -
life insurance |
1,929,334 |
1,923,698 |
1,753,512 |
1 |
10 |
Consumer and other(2) |
159,496 |
167,488 |
166,610 |
(19) |
(4) |
Total loans, net of unearned
income, excluding covered loans |
$ 13,133,160 |
$ 12,896,602 |
$ 11,900,312 |
7% |
10% |
Covered loans |
312,478 |
346,431 |
518,661 |
(40) |
(40) |
Total loans, net of unearned
income |
$ 13,445,638 |
$ 13,243,033 |
$ 12,418,973 |
6% |
8% |
|
|
|
|
|
|
Mix: |
|
|
|
|
|
Commercial |
26% |
25% |
23% |
|
|
Commercial real-estate |
32 |
32 |
32 |
|
|
Home equity |
5 |
5 |
6 |
|
|
Residential real-estate |
3 |
3 |
3 |
|
|
Premium finance receivables -
commercial |
17 |
16 |
16 |
|
|
Premium finance receivables -
life insurance |
14 |
15 |
14 |
|
|
Consumer and other(2) |
1 |
1 |
2 |
|
|
Total loans, net of unearned
income, excluding covered loans |
98% |
97% |
96% |
|
|
Covered loans |
2 |
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 March 31, 2014 |
|
|
|
|
> 90 Days |
Allowance |
|
|
|
% of |
|
Past Due |
For Loan |
|
|
|
Total |
|
and Still |
Losses |
(Dollars in thousands) |
|
Balance |
Balance |
Nonaccrual |
Accruing |
Allocation |
Commercial: |
|
|
|
|
|
|
Commercial and industrial |
|
$ 1,995,309 |
26.0% |
$ 11,112 |
$ 387 |
$ 16,018 |
Franchise |
|
221,101 |
2.9 |
— |
— |
1,482 |
Mortgage warehouse lines of
credit |
|
60,809 |
0.8 |
— |
— |
494 |
Community Advantage - homeowner
associations |
|
91,414 |
1.2 |
— |
— |
— |
Aircraft |
|
8,840 |
0.1 |
— |
— |
17 |
Asset-based lending |
|
740,668 |
9.6 |
670 |
— |
5,303 |
Tax exempt |
|
177,973 |
2.3 |
— |
— |
1,240 |
Leases |
|
121,986 |
1.6 |
— |
— |
2 |
Other |
|
10,261 |
0.1 |
— |
— |
63 |
PCI - commercial loans (1) |
|
10,836 |
0.1 |
— |
1,079 |
70 |
Total
commercial |
|
$ 3,439,197 |
44.7% |
$ 11,782 |
$ 1,466 |
$ 24,689 |
Commercial Real-Estate: |
|
|
|
|
|
|
Residential construction |
|
$ 36,397 |
0.5% |
$ — |
$ — |
$ 775 |
Commercial construction |
|
151,630 |
2.0 |
844 |
— |
2,298 |
Land |
|
107,970 |
1.4 |
2,405 |
— |
2,990 |
Office |
|
651,165 |
8.5 |
6,970 |
— |
5,767 |
Industrial |
|
625,060 |
8.1 |
6,101 |
— |
4,964 |
Retail |
|
677,430 |
8.8 |
9,540 |
— |
5,569 |
Multi-family |
|
575,763 |
7.5 |
1,327 |
— |
9,863 |
Mixed use and other |
|
1,361,236 |
17.5 |
6,546 |
— |
12,379 |
PCI - commercial real-estate (1) |
|
75,604 |
1.0 |
— |
21,073 |
— |
Total commercial
real-estate |
|
$ 4,262,255 |
55.3% |
$ 33,733 |
$ 21,073 |
$ 44,605 |
Total commercial and
commercial real-estate |
|
$ 7,701,452 |
100.0% |
$ 45,515 |
$ 22,539 |
$ 69,294 |
|
|
|
|
|
|
|
Commercial real-estate - collateral location
by state: |
|
|
|
|
|
|
Illinois |
|
$ 3,637,173 |
85.3% |
|
|
|
Wisconsin |
|
361,619 |
8.5 |
|
|
|
Total primary
markets |
|
$ 3,998,792 |
93.8% |
|
|
|
Florida |
|
67,260 |
1.6 |
|
|
|
Arizona |
|
15,487 |
0.4 |
|
|
|
Indiana |
|
79,469 |
1.9 |
|
|
|
Other (no individual state
greater than 0.5%) |
|
101,247 |
2.3 |
|
|
|
Total |
|
$ 4,262,255 |
100.0% |
|
|
|
|
|
|
|
|
|
|
(1) Purchased credit
impaired ("PCI") 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 |
(Dollars in thousands) |
March 31,
2014 |
December 31, 2013 |
March 31, 2013 |
From (1) December 31, 2013 |
From March 31, 2013 |
Balance: |
|
|
|
|
|
Non-interest bearing |
$ 2,773,922 |
$ 2,721,771 |
$ 2,243,440 |
8% |
24% |
NOW |
1,983,251 |
1,953,882 |
2,043,227 |
6 |
(3) |
Wealth Management deposits
(2) |
1,289,134 |
1,013,850 |
868,119 |
110 |
48 |
Money Market |
3,454,271 |
3,359,999 |
2,879,636 |
11 |
20 |
Savings |
1,443,943 |
1,392,575 |
1,258,682 |
15 |
15 |
Time certificates of
deposit |
4,184,524 |
4,226,712 |
4,669,653 |
(4) |
(10) |
Total deposits |
$ 15,129,045 |
$ 14,668,789 |
$ 13,962,757 |
13% |
8% |
Mix: |
|
|
|
|
|
Non-interest bearing |
18% |
19% |
16% |
|
|
NOW |
13 |
13 |
15 |
|
|
Wealth Management deposits
(2) |
8 |
7 |
6 |
|
|
Money Market |
23 |
23 |
21 |
|
|
Savings |
10 |
9 |
9 |
|
|
Time certificates of
deposit |
28 |
29 |
33 |
|
|
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 March 31,
2014 |
|
(Dollars in thousands) |
CDARs & Brokered Certificates
of Deposit (1) |
MaxSafe Certificates
of Deposit (1) |
Variable Rate Certificates
of Deposit (2) |
Other Fixed
Rate Certificates of Deposit (1) |
Total
Time
Certificates of Deposit |
Weighted-Average
Rate of Maturing Time
Certificates of Deposit (3) |
1-3 months |
$ 5,113 |
$ 65,185 |
$ 158,924 |
$ 677,414 |
$ 906,636 |
0.50% |
4-6 months |
18,241 |
71,470 |
— |
533,772 |
623,483 |
0.62% |
7-9 months |
80,000 |
43,148 |
— |
470,978 |
594,126 |
0.57% |
10-12 months |
95,661 |
31,194 |
— |
412,183 |
539,038 |
1.01% |
13-18 months |
72,302 |
22,877 |
— |
527,552 |
622,731 |
1.05% |
19-24 months |
2,167 |
22,515 |
— |
199,832 |
224,514 |
1.11% |
24+ months |
163,712 |
15,495 |
— |
494,789 |
673,996 |
1.18% |
Total |
$ 437,196 |
$ 271,884 |
$ 158,924 |
$ 3,316,520 |
$ 4,184,524 |
0.82% |
|
(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 first quarter
of 2014 compared to the fourth quarter of 2013 (sequential
quarters) and first quarter of 2013 (linked quarters),
respectively:
|
Average
Balance for three months ended, |
Interest for
three months ended, |
Yield/Rate for three months ended, |
(Dollars in thousands) |
March 31,
2014 |
December 31, 2013 |
March 31, 2013 |
March 31,
2014 |
December 31, 2013 |
March 31, 2013 |
March 31,
2014 |
December 31, 2013 |
March 31, 2013 |
Liquidity management assets(1)(2)(7) |
$ 2,646,720 |
$ 2,613,876 |
$ 2,797,310 |
$ 14,533 |
$ 11,185 |
$ 10,363 |
2.23% |
1.70% |
1.50% |
Other earning assets(2)(3)(7) |
28,925 |
28,746 |
24,205 |
222 |
215 |
180 |
3.12 |
2.95 |
3.02 |
Loans, net of unearned income(2)(4)(7) |
13,278,122 |
13,043,666 |
12,252,558 |
140,320 |
142,071 |
131,740 |
4.29 |
4.32 |
4.36 |
Covered loans |
325,885 |
388,148 |
536,284 |
6,941 |
7,683 |
10,524 |
8.64 |
7.85 |
7.96 |
Total earning assets(7) |
$ 16,279,652 |
$ 16,074,436 |
$ 15,610,357 |
$ 162,016 |
$ 161,154 |
$ 152,807 |
4.04% |
3.98% |
3.97% |
Allowance for loan and covered loan
losses |
(110,304) |
(122,060) |
(125,221) |
|
|
|
|
|
|
Cash and due from banks |
223,324 |
237,138 |
217,345 |
|
|
|
|
|
|
Other assets |
1,588,271 |
1,646,485 |
1,554,362 |
|
|
|
|
|
|
Total assets |
$ 17,980,943 |
$ 17,835,999 |
$ 17,256,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ 12,121,185 |
$ 11,945,314 |
$ 11,857,400 |
$ 11,923 |
$ 12,488 |
$ 14,504 |
0.40% |
0.41% |
0.50% |
Federal Home Loan Bank advances |
388,975 |
389,583 |
414,092 |
2,643 |
2,700 |
2,764 |
2.76 |
2.75 |
2.71 |
Notes payable and other borrowings |
244,950 |
251,168 |
297,151 |
750 |
1,145 |
1,154 |
1.24 |
1.81 |
1.57 |
Subordinated notes |
— |
4,022 |
15,000 |
— |
16 |
59 |
— |
1.56 |
1.56 |
Junior subordinated notes |
249,493 |
249,493 |
249,493 |
2,004 |
1,925 |
3,119 |
3.21 |
3.02 |
5.00 |
Total interest-bearing
liabilities |
$ 13,004,603 |
$ 12,839,580 |
$ 12,833,136 |
$ 17,320 |
$ 18,274 |
$ 21,600 |
0.54% |
0.56% |
0.68% |
Non-interest bearing deposits |
2,726,872 |
2,723,360 |
2,290,725 |
|
|
|
|
|
|
Other liabilities |
325,819 |
377,561 |
314,855 |
|
|
|
|
|
|
Equity |
1,923,649 |
1,895,498 |
1,818,127 |
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ 17,980,943 |
$ 17,835,999 |
$ 17,256,843 |
|
|
|
|
|
|
Interest rate spread(5)(7) |
|
|
|
|
|
|
3.50% |
3.42% |
3.29% |
Net free funds/contribution(6) |
$ 3,275,049 |
$ 3,234,856 |
$ 2,777,221 |
|
|
|
0.11% |
0.11% |
0.12% |
Net interest income/ margin(7) |
|
|
|
$ 144,696 |
$ 142,880 |
$ 131,207 |
3.61% |
3.53% |
3.41% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 31, 2014, December 31, 2013 and
March 31, 2013 were $690,000, $572,000 and $494,000,
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. |
NON-INTEREST INCOME
For the first quarter of 2014, non-interest income totaled $45.5
million compared to $46.4 million in the fourth quarter of 2013 and
$57.4 million in the first quarter of 2013. The decrease
compared to the fourth quarter of 2013 was primarily attributable
to a decrease in mortgage banking revenues, partially offset by an
other-than-temporary impairment loss recorded by the Company in the
fourth quarter of 2013. The decrease compared to the first
quarter of 2013 was primarily attributable to a decrease in
mortgage banking revenues and fewer interest rate swap fees,
partially offset by higher wealth management revenues.
The following table presents non-interest income by category for
the periods presented:
|
Three months
ended |
|
|
|
|
|
March
31, |
December 31, |
March 31, |
Q1 2014 compared to Q4
2013 |
Q1 2014 compared to Q1
2013 |
(Dollars in thousands) |
2014 |
2013 |
2013 |
$ Change |
% Change |
$ Change |
% Change |
Brokerage |
$7,091 |
$ 7,200 |
$ 7,267 |
$ (109) |
(2)% |
$ (176) |
(2)% |
Trust and asset management |
9,722 |
9,065 |
7,561 |
657 |
7 |
2,161 |
29 |
Total wealth management |
16,813 |
16,265 |
14,828 |
548 |
3 |
1,985 |
13 |
Mortgage banking |
16,428 |
19,296 |
30,145 |
(2,868) |
(15) |
(13,717) |
(46) |
Service charges on deposit accounts |
5,346 |
5,230 |
4,793 |
116 |
2 |
553 |
12 |
(Losses) gains on available-for-sale
securities, net |
(33) |
(3,328) |
251 |
3,295 |
99 |
(284) |
(113) |
Fees from covered call options |
1,542 |
1,856 |
1,639 |
(314) |
(17) |
(97) |
(6) |
Trading losses, net |
(652) |
(278) |
(435) |
(374) |
(135) |
(217) |
(50) |
Other: |
|
|
|
|
|
|
|
Interest rate swap fees |
951 |
1,537 |
2,270 |
(586) |
(38) |
(1,319) |
(58) |
Bank Owned Life Insurance |
712 |
1,074 |
846 |
(362) |
(34) |
(134) |
(16) |
Administrative services |
859 |
878 |
738 |
(19) |
(2) |
121 |
16 |
Miscellaneous |
3,563 |
3,831 |
2,304 |
(268) |
(7) |
1,259 |
55 |
Total Other |
6,085 |
7,320 |
6,158 |
(1,235) |
(17) |
(73) |
(1) |
Total Non-Interest Income |
$45,529 |
$ 46,361 |
$ 57,379 |
$ (832) |
(2)% |
$ (11,850) |
(21)% |
The significant changes in non-interest income for the quarter
ended March 31, 2014 compared to the quarters ended
December 31, 2013 and March 31, 2013 are discussed
below.
Wealth management revenue totaled $16.8 million in the first
quarter of 2014 compared to $16.3 million in the fourth quarter of
2013, an increase of 3%, and $14.8 million in the first quarter of
2013, an increase of 13%. The increase during the current
period compared to prior quarters is mostly attributable to growth
in assets under management due to new customers, as well as 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 March 31, 2014, mortgage banking
revenue totaled $16.4 million, a decrease of $2.9 million, or 15%,
when compared to the fourth quarter of 2013, and a decrease of
$13.7 million, or 46%, when compared to the first quarter of
2013. The decrease in mortgage banking revenue in the first
quarter of 2014 as compared to the comparable periods resulted
primarily from lower origination volumes as a result of a general
downturn in the mortgage banking business coupled with a prolonged
winter season across the nation in the current
quarter. Additionally, originations were higher in the first
quarter of 2013 as a result of a more favorable refinance market as
compared to the first quarter of 2014. Mortgage loan
originations were $527.3 million in the first quarter of 2014 as
compared to $742.3 million and $974.4 million in the fourth quarter
and first quarter of 2013, respectively. 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 |
(Dollars in thousands) |
March 31,
2014 |
December 31, 2013 |
March 31, 2013 |
Mortgage loans originated and sold |
$527,272 |
$ 742,306 |
$ 974,432 |
Mortgage loans serviced for others |
949,434 |
961,619 |
1,016,191 |
Fair value of mortgage servicing rights
(MSRs) |
8,719 |
8,946 |
7,344 |
MSRs as a percentage of loans serviced |
0.92% |
0.93% |
0.72% |
Service charges on deposit accounts totaled $5.3 million in the
first quarter of 2014, an increase of $116,000 and $553,000
compared to the quarters ended December 31, 2013 and
March 31, 2013, respectively. 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.
The Company recognized $33,000 of net losses on
available-for-sale securities in the first quarter of 2014 compared
to net losses of $3.3 million in the fourth quarter of 2013 and net
gains of $251,000 in the first quarter of 2013. The $3.3 million of
losses in the fourth quarter of 2013 related to
other-than-temporary impairment recorded on one security as a
result of the Volcker Rule.
Other non-interest income totaled $6.1 million in the first
quarter of 2014 compared to $7.3 million in the fourth quarter of
2013 and $6.2 million in the first quarter of 2013. Other
income decreased in the first quarter of 2014 compared to the
fourth quarter of 2013 primarily as a result of fewer interest rate
swap transactions due to an unfavorable change in the rate
environment and increased competition.
NON-INTEREST EXPENSE
Non-interest expense for the first quarter of 2014 totaled
$131.3 million, an increase of approximately $4.3 million, or 3%,
compared to the fourth quarter of 2013 and an increase of $11.2
million, or 9%, compared to the first quarter of 2013. The
increase compared to the fourth quarter of 2013 was primarily
attributable to higher salary and employee benefit costs and
increased OREO expenses, partially offset by a decrease in
advertising and marketing expenses, professional fees and
miscellaneous expenses. The increase compared to the first
quarter of 2013 was primarily attributable to higher salary and
employee benefit costs and increased occupancy, equipment and OREO
expenses.
The following table presents non-interest expense by category
for the periods presented:
|
Three months
ended |
|
|
|
|
|
March
31, |
December 31, |
March 31, |
Q1 2014 compared to Q4
2013 |
Q1 2014 compared to Q1
2013 |
(Dollars in thousands) |
2014 |
2013 |
2013 |
$ Change |
% Change |
$ Change |
% Change |
Salaries and employee benefits: |
|
|
|
|
|
|
|
Salaries |
$43,736 |
$ 43,832 |
$ 41,831 |
$ (96) |
—% |
$ 1,905 |
5% |
Commissions and bonus |
21,534 |
18,009 |
21,276 |
3,525 |
20 |
258 |
1 |
Benefits |
14,664 |
12,208 |
14,406 |
2,456 |
20 |
258 |
2 |
Total salaries and employee benefits |
79,934 |
74,049 |
77,513 |
5,885 |
8 |
2,421 |
3 |
Equipment |
7,403 |
7,260 |
6,184 |
143 |
2 |
1,219 |
20 |
Occupancy, net |
10,993 |
9,994 |
8,853 |
999 |
10 |
2,140 |
24 |
Data processing |
4,715 |
4,831 |
4,599 |
(116) |
(2) |
116 |
3 |
Advertising and marketing |
2,816 |
3,517 |
2,040 |
(701) |
(20) |
776 |
38 |
Professional fees |
3,454 |
4,132 |
3,221 |
(678) |
(16) |
233 |
7 |
Amortization of other intangible assets |
1,163 |
1,189 |
1,120 |
(26) |
(2) |
43 |
4 |
FDIC insurance |
2,951 |
3,036 |
3,444 |
(85) |
(3) |
(493) |
(14) |
OREO expense (income), net |
3,976 |
2,671 |
(1,620) |
1,305 |
49 |
5,596 |
NM |
Other: |
|
|
|
|
|
|
|
Commissions - 3rd party brokers |
1,657 |
1,439 |
1,233 |
218 |
15 |
424 |
34 |
Postage |
1,429 |
1,622 |
1,249 |
(193) |
(12) |
180 |
14 |
Stationery and supplies |
892 |
1,157 |
934 |
(265) |
(23) |
(42) |
(4) |
Miscellaneous |
9,932 |
12,100 |
11,349 |
(2,168) |
(18) |
(1,417) |
(12) |
Total other |
13,910 |
16,318 |
14,765 |
(2,408) |
(15) |
(855) |
(6) |
Total Non-Interest Expense |
$131,315 |
$ 126,997 |
$ 120,119 |
$ 4,318 |
3% |
$ 11,196 |
9% |
|
|
|
|
|
|
|
|
NM - Not Meaningful |
|
|
|
|
|
|
|
The significant changes in non-interest expense for the quarter
ended March 31, 2014 compared to the quarters ended
December 31, 2013 and March 31, 2013 are discussed
below.
Salaries and employee benefits expense increased $5.9 million,
or 8%, in the first quarter of 2014 compared to the fourth quarter
of 2013 primarily as a result of a $3.5 million increase in bonus
and commissions primarily attributable to the Company's long-term
incentive program and a $2.5 million increase in employee benefits
resulting from higher payroll taxes. Salaries and employee
benefits expense increased $2.4 million, or 3%, compared to the
first quarter of 2013 primarily as a result of a $1.9 million
increase in salaries caused by the addition of employees from the
various acquisitions and larger staffing as the Company grows.
Equipment expense totaled $7.4 million for the first quarter of
2014, an increase of $143,000 and $1.2 million compared to the
fourth quarter of 2013 and first quarter of 2013,
respectively. The increase in the current quarter compared to
the prior year quarter is primarily related to additional equipment
depreciation as a result of acquisitions as well as increased
software license fees. Equipment expense includes depreciation
on equipment, maintenance and repairs, equipment rental and
software license fees.
Occupancy expense for the first quarter of 2014 was $11.0
million, an increase of $1.0 million, or 10%, compared to the
fourth quarter of 2013 and an increase of $2.1 million, or 24%,
compared to the same period in 2013. The increase is primarily
the result of elevated snow removal expenses and utility expenses
on owned locations including those obtained in the Company's
acquisitions as well as increased property taxes, partially offset
by increased rental income. 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 totaled $4.7 million in the first
quarter of 2014 compared to $4.8 million recorded in the fourth
quarter of 2013 and $4.6 million recorded in the first quarter of
2013. 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.
Professional fees for the first quarter of 2014 were $3.5
million, a decrease of $678,000, or 16%, compared to the fourth
quarter of 2013 and an increase of $233,000, or 7%, compared to the
same period in 2013. The decrease compared to the fourth quarter of
2013 is primarily a result of reduced legal costs in the current
quarter. The increase compared to the first quarter of 2013 is
primarily the result of increased consulting fees during the
period. Professional fees include legal, audit and tax fees,
external loan review costs and normal regulatory exam
assessments.
OREO expense totaled $4.0 million in the first quarter of 2014
compared to OREO expense of $2.7 million recorded in the fourth
quarter of 2013 and OREO income of $1.6 million recorded in the
first quarter of 2013. OREO expense was higher in the current
quarter compared to the quarter ended December 31, 2013
primarily due to negative valuation adjustments of certain OREO
properties. Compared to the first quarter of 2013, OREO
expense increased primarily due to a $3.4 million gain recognized
during the prior year quarter on a covered OREO property sale. OREO
costs include all costs related to obtaining, maintaining and
selling other real estate owned
properties.
Miscellaneous other expenses in the first quarter of 2014
decreased $2.4 million, or 15%, compared to the quarter ended
December 31, 2013 and decreased $855,000, or 6%, compared to
the quarter ended March 31, 2013. 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 |
|
March
31, |
December 31, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
Allowance for loan losses at
beginning of period |
$
96,922 |
$ 107,188 |
$ 107,351 |
Provision for credit
losses |
3,304 |
3,904 |
15,367 |
Other adjustments |
(148) |
(195) |
(229) |
Reclassification to allowance for
unfunded lending-related commitments |
(18) |
504 |
(213) |
Charge-offs: |
|
|
|
Commercial |
648 |
5,209 |
4,540 |
Commercial real estate |
4,493 |
7,517 |
3,299 |
Home equity |
2,267 |
1,468 |
2,397 |
Residential real estate |
226 |
385 |
1,728 |
Premium finance receivables -
commercial |
1,210 |
1,395 |
1,068 |
Premium finance receivables - life
insurance |
— |
14 |
— |
Consumer and other |
173 |
637 |
129 |
Total charge-offs |
9,017 |
16,625 |
13,161 |
Recoveries: |
|
|
|
Commercial |
317 |
336 |
295 |
Commercial real estate |
145 |
1,302 |
368 |
Home equity |
257 |
56 |
162 |
Residential real estate |
131 |
202 |
5 |
Premium finance receivables -
commercial |
319 |
230 |
285 |
Premium finance receivables - life
insurance |
2 |
2 |
9 |
Consumer and other |
61 |
18 |
109 |
Total recoveries |
1,232 |
2,146 |
1,233 |
Net charge-offs |
(7,785) |
(14,479) |
(11,928) |
Allowance for loan losses at
period end |
$
92,275 |
$ 96,922 |
$ 110,348 |
Allowance for unfunded
lending-related commitments at period end |
737 |
719 |
15,287 |
Allowance for credit losses at
period end |
$
93,012 |
$ 97,641 |
$ 125,635 |
Annualized net charge-offs by
category as a percentage of its own respective
category's average: |
|
|
|
Commercial |
0.04% |
0.61% |
0.61% |
Commercial real estate |
0.41 |
0.59 |
0.30 |
Home equity |
1.14 |
0.77 |
1.17 |
Residential real estate |
0.06 |
0.10 |
0.93 |
Premium finance receivables -
commercial |
0.16 |
0.21 |
0.16 |
Premium finance receivables - life
insurance |
— |
— |
— |
Consumer and other |
0.26 |
1.33 |
0.04 |
Total loans, net of unearned income,
excluding covered loans |
0.24% |
0.44% |
0.39% |
Net charge-offs as a percentage of
the provision for credit losses |
235.65% |
370.90% |
77.62% |
Loans at period-end, excluding
covered loans |
$
13,133,160 |
$ 12,896,602 |
$ 11,900,312 |
Allowance for loan losses as a
percentage of loans at period end |
0.70% |
0.75% |
0.93% |
Allowance for credit losses as a
percentage of loans at period end |
0.71% |
0.76% |
1.06% |
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 $3.3 million for the first quarter of
2014, $3.9 million for the fourth quarter of 2013 and $15.4 million
for the first quarter of 2013. For the quarter ended March 31,
2014, net charge-offs, excluding covered loans, totaled $7.8
million compared to $14.5 million in the fourth quarter of 2013 and
$11.9 million recorded in the first quarter of 2013. Annualized net
charge-offs as a percentage of average loans, excluding covered
loans, were 0.24% in the first quarter of 2014, 0.44% in the fourth
quarter of 2013 and 0.39% in the first quarter of 2013. Net
charge-offs decreased in the first quarter of 2014 compared to the
fourth quarter of 2013 primarily as a result of a $4.5 million
decrease in net charge-offs within the commercial loan portfolio
and a $1.9 million decrease within the commercial real estate loan
portfolio. Compared to the first quarter of 2013, net charge-offs
decreased primarily as a result of a $3.9 million decrease in net
charge-offs within the commercial loan portfolio and a $1.6 million
decrease within the residential real estate loan portfolio,
partially offset by a $1.4 million increase within the commercial
real estate loan portfolio.
The allowance for unfunded lending-related commitments totaled
$737,000 as of March 31, 2014 compared to $719,000 as of
December 31, 2013 and $15.3 million as of March 31,
2013. The decrease when compared to the first quarter of 2013
was primarily attributable to the funding of two letters of credit
in the second and third quarters of 2013 and the expiration of one
letter of credit in the fourth quarter of 2013.
The lower level of the allowance for credit losses in 2014
reflects the improvements in credit quality metrics compared to
2013. 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 following table presents the provision for credit losses and
allowance for credit losses by component for the periods
presented:
|
Three months
ended |
|
March 31, |
December 31, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
Provision for loan losses |
$ 3,286 |
$ 4,408 |
$ 15,154 |
Provision for unfunded lending-related
commitments |
18 |
(504) |
213 |
Provision for covered loan losses |
(1,424) |
(54) |
320 |
Provision for credit losses |
$
1,880 |
$ 3,850 |
$ 15,687 |
|
|
|
|
|
Period
End |
|
March 31, |
December 31, |
March 31, |
|
2014 |
2013 |
2013 |
Allowance for loan losses |
$ 92,275 |
$ 96,922 |
$ 110,348 |
Allowance for unfunded lending-related
commitments |
$ 737 |
$ 719 |
$ 15,287 |
Allowance for covered loan losses |
$
3,447 |
$ 10,092 |
$ 12,272 |
Allowance for credit losses |
$
96,459 |
$ 107,733 |
$ 137,907 |
The tables below summarize the calculation of allowance for loan
losses for the Company's core loan portfolio and consumer, niche
and purchased loan portfolio as of March 31, 2014 and
December 31, 2013.
|
As of March 31,
2014 |
|
Recorded |
Calculated |
As a percentage
of its own respective |
(Dollars in thousands) |
Investment |
Allowance |
category's
balance |
Commercial: |
|
|
|
Commercial and industrial (1) |
$ 1,969,882 |
$ 15,997 |
0.81% |
Asset-based lending (1) |
739,302 |
5,303 |
0.72 |
Tax exempt (1) |
177,616 |
1,240 |
0.70 |
Leases (1) |
121,817 |
2 |
— |
Other (1) |
10,261 |
63 |
0.61 |
Commercial real-estate: |
|
|
|
Residential construction (1) |
35,103 |
775 |
2.21 |
Commercial construction (1) |
149,435 |
2,298 |
1.54 |
Land (1) |
100,782 |
2,990 |
2.97 |
Office (1) |
637,730 |
5,732 |
0.90 |
Industrial (1) |
608,977 |
4,955 |
0.81 |
Retail (1) |
658,016 |
5,562 |
0.85 |
Multi-family (1) |
538,231 |
9,858 |
1.83 |
Mixed use and other (1) |
1,302,712 |
12,349 |
0.95 |
Home equity (1) |
686,209 |
10,906 |
1.59 |
Residential real-estate (1) |
398,863 |
4,583 |
1.15 |
Total core loan
portfolio |
$
8,134,936 |
$
82,613 |
1.02% |
Commercial: |
|
|
|
Franchise |
$ 221,101 |
$ 1,482 |
0.67% |
Mortgage warehouse lines of credit |
60,809 |
494 |
0.81 |
Community Advantage - homeowner
associations |
91,414 |
— |
— |
Aircraft |
7,540 |
17 |
0.23 |
Purchased non-covered commercial loans
(2) |
39,455 |
91 |
0.23 |
Commercial real-estate: |
|
|
|
Purchased non-covered commercial
real-estate (2) |
231,269 |
86 |
0.04 |
Purchased non-covered home equity (2) |
21,539 |
60 |
0.28 |
Purchased non-covered residential real-estate
(2) |
27,906 |
108 |
0.39 |
Premium finance receivables |
|
|
|
U.S. commercial insurance loans |
1,959,081 |
4,840 |
0.25 |
Canada commercial insurance loans
(2) |
249,280 |
166 |
0.07 |
Life insurance loans (1) |
1,516,132 |
576 |
0.04 |
Purchased life insurance loans (2) |
413,202 |
— |
— |
Consumer and other (1) |
153,587 |
1,725 |
1.12 |
Purchased non-covered consumer and other
(2) |
5,909 |
17 |
0.29 |
Total consumer, niche and
purchased loan portfolio |
$
4,998,224 |
$
9,662 |
0.19% |
Total loans, net of unearned
income, excluding covered loans |
$
13,133,160 |
$
92,275 |
0.70% |
|
|
|
|
(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 December
31, 2013 |
|
Recorded |
Calculated |
As a percentage
of its own respective |
(Dollars in thousands) |
Investment |
Allowance |
category's
balance |
Commercial: |
|
|
|
Commercial and industrial (1) |
$ 1,805,591 |
$ 14,463 |
0.80% |
Asset-based lending (1) |
732,712 |
5,242 |
0.72 |
Tax exempt (1) |
160,850 |
1,158 |
0.72 |
Leases (1) |
109,631 |
4 |
— |
Other (1) |
11,147 |
75 |
0.67 |
Commercial real-estate: |
|
|
|
Residential construction (1) |
37,410 |
775 |
2.07 |
Commercial construction (1) |
134,618 |
2,329 |
1.73 |
Land (1) |
100,248 |
3,001 |
2.99 |
Office (1) |
623,631 |
6,476 |
1.04 |
Industrial (1) |
626,035 |
5,508 |
0.88 |
Retail (1) |
640,052 |
6,527 |
1.02 |
Multi-family (1) |
533,126 |
10,467 |
1.96 |
Mixed use and other (1) |
1,288,798 |
13,463 |
1.04 |
Home equity (1) |
695,532 |
12,536 |
1.80 |
Residential real-estate (1) |
407,624 |
5,023 |
1.23 |
Total core loan
portfolio |
$
7,907,005 |
$
87,047 |
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) |
46,095 |
79 |
0.17 |
Commercial real-estate: |
|
|
|
Purchased non-covered commercial
real-estate (2) |
246,117 |
112 |
0.05 |
Purchased non-covered home equity (2) |
23,605 |
75 |
0.32 |
Purchased non-covered residential real-estate
(2) |
27,368 |
85 |
0.31 |
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 |
— |
— |
Consumer and other (1) |
158,137 |
1,851 |
1.17 |
Purchased non-covered consumer and other
(2) |
9,351 |
19 |
0.20 |
Total consumer, niche and
purchased loan portfolio |
$ 4,989,597 |
$ 9,875 |
0.20% |
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 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 March 31, 2014 and December 31,
2013. The allowance for loan losses to core loans was 1.02%
compared to 0.19% for consumer, niche and purchased loans and 0.70%
for the entire loan portfolio as of March 31, 2014. As of
December 31, 2013, the allowance for loan losses to core loans
was 1.10% compared to 0.20% for consumer, niche and purchased loans
and 0.75% for the entire loan portfolio.
The decrease in the allowance for loan losses to core loans in
the first quarter of 2014 compared to the fourth 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 5.71% at March 31, 2014
compared to 5.06% at December 31, 2013. The increase was
attributable to the required ASC 310 reserves on core loans during
the quarter remaining relatively unchanged despite the related loan
balance decreasing by $19.6 million. The ASC 450 reserve as a
percentage of core loans was 0.93% at March 31, 2014 and 1.02%
at December 31, 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 March 31, 2014 and December 31, 2013:
|
|
90+
days |
60-89 |
30-59 |
|
|
As of March 31, 2014 |
|
and
still |
days
past |
days
past |
|
|
(Dollars in thousands) |
Nonaccrual |
accruing |
due |
due |
Current |
Total
Loans |
Loan Balances: |
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
Commercial and industrial |
$
11,112 |
$ 387 |
$ 2,235 |
$ 16,150 |
$
1,965,425 |
$
1,995,309 |
Franchise |
— |
— |
— |
75 |
221,026 |
221,101 |
Mortgage warehouse lines of credit |
— |
— |
— |
— |
60,809 |
60,809 |
Community Advantage - homeowners
association |
— |
— |
— |
— |
91,414 |
91,414 |
Aircraft |
— |
— |
— |
— |
8,840 |
8,840 |
Asset-based lending |
670 |
— |
— |
10,573 |
729,425 |
740,668 |
Tax exempt |
— |
— |
— |
— |
177,973 |
177,973 |
Leases |
— |
— |
— |
— |
121,986 |
121,986 |
Other |
— |
— |
— |
— |
10,261 |
10,261 |
PCI - commercial (1) |
— |
1,079 |
— |
865 |
8,892 |
10,836 |
Total commercial |
11,782 |
1,466 |
2,235 |
27,663 |
3,396,051 |
3,439,197 |
Commercial real-estate |
|
|
|
|
|
|
Residential construction |
— |
— |
680 |
27 |
35,690 |
36,397 |
Commercial construction |
844 |
— |
— |
— |
150,786 |
151,630 |
Land |
2,405 |
— |
2,682 |
3,438 |
99,445 |
107,970 |
Office |
6,970 |
— |
1,672 |
8,868 |
633,655 |
651,165 |
Industrial |
6,101 |
— |
1,114 |
2,706 |
615,139 |
625,060 |
Retail |
9,540 |
— |
217 |
3,089 |
664,584 |
677,430 |
Multi-family |
1,327 |
— |
— |
3,820 |
570,616 |
575,763 |
Mixed use and other |
6,546 |
— |
6,626 |
10,744 |
1,337,320 |
1,361,236 |
PCI - commercial real-estate (1) |
— |
21,073 |
2,791 |
6,169 |
45,571 |
75,604 |
Total commercial real-estate |
33,733 |
21,073 |
15,782 |
38,861 |
4,152,806 |
4,262,255 |
Home equity |
7,311 |
— |
1,650 |
4,972 |
693,815 |
707,748 |
Residential real estate |
14,385 |
— |
946 |
4,889 |
403,474 |
423,694 |
PCI - residential real estate (1) |
— |
1,414 |
— |
248 |
1,413 |
3,075 |
Premium finance receivables |
|
|
|
|
|
|
Commercial insurance loans |
14,517 |
6,808 |
5,600 |
20,777 |
2,160,659 |
2,208,361 |
Life insurance loans |
— |
— |
— |
4,312 |
1,511,820 |
1,516,132 |
Purchased life insurance loans (1) |
— |
— |
— |
— |
413,202 |
413,202 |
Consumer and other |
1,144 |
57 |
213 |
550 |
157,290 |
159,254 |
PCI - consumer and other (1) |
— |
48 |
— |
20 |
174 |
242 |
Total loans, net of unearned income,
excluding covered loans |
$
82,872 |
$
30,866 |
$
26,426 |
$
102,292 |
$
12,890,704 |
$
13,133,160 |
Covered loans |
9,136 |
35,831 |
6,682 |
7,042 |
253,787 |
312,478 |
Total loans, net of unearned income |
$
92,008 |
$
66,697 |
$
33,108 |
$
109,334 |
$
13,144,491 |
$
13,445,638 |
|
|
|
|
|
|
|
(1) Purchased credit impaired
("PCI") 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. |
|
Aging as a % of Loan
Balance: |
Nonaccrual |
90+ days
and still accruing |
60-89
days past due |
30-59
days past due |
Current |
Total Loans |
Commercial |
|
|
|
|
|
|
Commercial and industrial |
0.6% |
—% |
0.1% |
0.8% |
98.5% |
100.0% |
Franchise |
— |
— |
— |
— |
100.0 |
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 |
— |
— |
1.4 |
98.5 |
100.0 |
Tax exempt |
— |
— |
— |
— |
100.0 |
100.0 |
Leases |
— |
— |
— |
— |
100.0 |
100.0 |
Other |
— |
— |
— |
— |
100.0 |
100.0 |
PCI - commercial(1) |
— |
10.0 |
— |
8.0 |
82.0 |
100.0 |
Total commercial |
0.3 |
— |
0.1 |
0.8 |
98.8 |
100.0 |
Commercial real-estate |
|
|
|
|
|
|
Residential construction |
— |
— |
1.9 |
0.1 |
98.0 |
100.0 |
Commercial construction |
0.6 |
— |
— |
— |
99.4 |
100.0 |
Land |
2.2 |
— |
2.5 |
3.2 |
92.1 |
100.0 |
Office |
1.1 |
— |
0.3 |
1.4 |
97.2 |
100.0 |
Industrial |
1.0 |
— |
0.2 |
0.4 |
98.4 |
100.0 |
Retail |
1.4 |
— |
— |
0.5 |
98.1 |
100.0 |
Multi-family |
0.2 |
— |
— |
0.7 |
99.1 |
100.0 |
Mixed use and other |
0.5 |
— |
0.5 |
0.8 |
98.2 |
100.0 |
PCI - commercial
real-estate (1) |
— |
27.9 |
3.7 |
8.2 |
60.2 |
100.0 |
Total commercial real-estate |
0.8 |
0.5 |
0.4 |
0.9 |
97.4 |
100.0 |
Home equity |
1.0 |
— |
0.2 |
0.7 |
98.1 |
100.0 |
Residential real estate |
3.4 |
— |
0.2 |
1.2 |
95.2 |
100.0 |
PCI - residential real estate(1) |
— |
46.0 |
— |
8.1 |
45.9 |
100.0 |
Premium finance receivables |
|
|
|
|
|
|
Commercial insurance loans |
0.7 |
0.3 |
0.3 |
0.9 |
97.8 |
100.0 |
Life insurance loans |
— |
— |
— |
0.3 |
99.7 |
100.0 |
Purchased life insurance loans (1) |
— |
— |
— |
— |
100.0 |
100.0 |
Consumer and other |
0.7 |
— |
0.1 |
0.3 |
98.9 |
100.0 |
PCI - consumer and other(1) |
— |
19.8 |
— |
8.3 |
71.9 |
100.0 |
Total loans, net of unearned income,
excluding covered loans |
0.6% |
0.2% |
0.2% |
0.8% |
98.2% |
100.0% |
Covered loans |
2.9 |
11.5 |
2.1 |
2.3 |
81.2 |
100.0 |
Total loans, net of unearned income |
0.7% |
0.5% |
0.2% |
0.8% |
97.8% |
100.0% |
As of March 31, 2014, $26.4 million of all loans, excluding
covered loans, or 0.2%, were 60 to 89 days past due and $102.3
million, or 0.8%, were 30 to 59 days (or one payment) past due. 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. 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
March 31, 2014 that are current with regard to the contractual
terms of the loan agreement represent 98.1% of the total home
equity portfolio. Residential real estate loans at March 31,
2014 that are current with regards to the contractual terms of the
loan agreements comprise 94.9% 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 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 |
|
PCI - 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 |
|
PCI - 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 |
|
PCI - 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 |
|
Consumer and other |
1,137 |
105 |
76 |
1,010 |
163,956 |
166,284 |
|
PCI - 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 credit impaired
("PCI") 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. |
|
|
|
Aging as a % of Loan
Balance: |
Nonaccrual |
90+ days
and still accruing |
60-89
days past due |
30-59
days past 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 |
PCI - 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 |
PCI - 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 |
PCI - 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 |
Consumer and other |
0.7 |
0.1 |
— |
0.6 |
98.6 |
100.0 |
PCI - 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% |
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.
|
March
31, |
December 31, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
Loans past due greater than 90 days
and still accruing(1): |
|
|
|
Commercial |
$
387 |
$ — |
$ — |
Commercial real-estate |
— |
230 |
— |
Home equity |
— |
— |
— |
Residential real-estate |
— |
— |
— |
Premium finance receivables -
commercial |
6,808 |
8,842 |
7,677 |
Premium finance receivables - life
insurance |
— |
— |
2,256 |
Consumer and other |
57 |
105 |
145 |
Total loans past due greater than 90 days
and still accruing |
7,252 |
9,177 |
10,078 |
Non-accrual loans(2): |
|
|
|
Commercial |
11,782 |
10,780 |
18,373 |
Commercial real-estate |
33,733 |
46,658 |
61,807 |
Home equity |
7,311 |
10,071 |
14,891 |
Residential real-estate |
14,385 |
14,974 |
9,606 |
Premium finance receivables -
commercial |
14,517 |
10,537 |
12,068 |
Premium finance receivables - life
insurance |
— |
— |
20 |
Consumer and other |
1,144 |
1,137 |
1,790 |
Total non-accrual loans |
82,872 |
94,157 |
118,555 |
Total non-performing
loans: |
|
|
|
Commercial |
12,169 |
10,780 |
18,373 |
Commercial real-estate |
33,733 |
46,888 |
61,807 |
Home equity |
7,311 |
10,071 |
14,891 |
Residential real-estate |
14,385 |
14,974 |
9,606 |
Premium finance receivables -
commercial |
21,325 |
19,379 |
19,745 |
Premium finance receivables - life
insurance |
— |
— |
2,276 |
Consumer and other |
1,201 |
1,242 |
1,935 |
Total non-performing loans |
$
90,124 |
$ 103,334 |
$ 128,633 |
Other real estate owned |
48,115 |
43,632 |
50,593 |
Other real estate owned - obtained in
acquisition |
6,016 |
6,822 |
5,584 |
Other repossessed assets |
426 |
542 |
4,315 |
Total non-performing assets |
$
144,681 |
$ 154,330 |
$ 189,125 |
TDRs performing under the contractual
terms of the loan agreement |
74,622 |
78,610 |
97,122 |
Total non-performing loans by
category as a percent of its own respective category's
period-end balance: |
|
|
|
Commercial |
0.35% |
0.33% |
0.64% |
Commercial real-estate |
0.79 |
1.11 |
1.55 |
Home equity |
1.03 |
1.40 |
1.96 |
Residential real-estate |
3.37 |
3.44 |
2.66 |
Premium finance receivables -
commercial |
0.97 |
0.89 |
0.99 |
Premium finance receivables - life
insurance |
— |
— |
0.13 |
Consumer and other |
0.75 |
0.74 |
1.16 |
Total loans, net of unearned income |
0.69% |
0.80% |
1.08% |
Total non-performing assets as a
percentage of total assets |
0.79% |
0.85% |
1.11% |
Allowance for loan losses as a
percentage of total non-performing loans |
102.39% |
93.80% |
85.79% |
|
|
|
|
(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 $17.9 million, $28.5 million, and $19.2
million as of March 31, 2014, December 31, 2013, and
March 31, 2013, respectively. |
Non-performing Commercial and Commercial Real Estate
Commercial non-performing loans totaled $12.2 million as of
March 31, 2014 compared to $10.8 million as of
December 31, 2013 and $18.4 million as of March 31, 2013.
Commercial real estate non-performing loans totaled $33.7 million
as of March 31, 2014 compared to $46.9 million as of
December 31, 2013 and $61.8 million as of March 31,
2013.
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 $21.7 million as of March 31, 2014. The balance
decreased $3.3 million from December 31, 2013 and decreased
$2.8 million from March 31, 2013. The March 31, 2014
non-performing balance is comprised of $14.4 million of residential
real estate (72 individual credits) and $7.3 million of home equity
loans (37 individual credits). On average, this is
approximately 7 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 March 31, 2014,
December 31, 2013 and March 31, 2013 the amount of net
charge-offs for the quarters then ended.
|
|
March
31, |
|
|
December 31, |
|
|
March 31, |
|
(Dollars in thousands) |
|
2014 |
|
|
2013 |
|
|
2013 |
|
Non-performing premium finance
receivables -- commercial |
|
$
21,325 |
|
|
$ 19,379 |
|
|
$ 19,745 |
|
- as a percent of premium finance
receivables - commercial outstanding |
|
0.97% |
|
|
0.89% |
|
|
0.99% |
|
Net charge-offs of premium finance
receivables - commercial |
|
$
891 |
|
|
$ 1,165 |
|
|
$ 783 |
|
- annualized as a percent of average
premium finance receivables - commercial |
|
0.16% |
|
|
0.21% |
|
|
0.16% |
|
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 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
month period ending March 31, 2014, December 31, 2013 and
March 31, 2013:
|
Three Months
Ended |
|
March
31, |
December 31, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
Balance at beginning of period |
$ 103,334 |
$ 123,261 |
$ 118,083 |
Additions, net |
5,655 |
18,285 |
28,030 |
Return to performing status |
(1,973) |
(10,070) |
— |
Payments received |
(3,730) |
(12,142) |
(4,121) |
Transfer to OREO and other repossessed
assets |
(10,013) |
(1,516) |
(6,890) |
Charge-offs |
(4,774) |
(10,436) |
(9,148) |
Net change for niche loans (1) |
1,625 |
(4,048) |
2,679 |
Balance at end of
period |
$ 90,124 |
$ 103,334 |
$ 128,633 |
|
|
|
|
(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:
|
March
31, |
December 31, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
Accruing TDRs: |
|
|
|
Commercial |
$ 5,844 |
$ 6,045 |
$ 9,073 |
Commercial real estate |
64,726 |
69,225 |
83,396 |
Residential real estate and other |
4,052 |
3,340 |
4,653 |
Total accrual |
$ 74,622 |
$ 78,610 |
$ 97,122 |
Non-accrual TDRs: (1) |
|
|
|
Commercial |
$ 1,434 |
$ 1,343 |
$ 2,764 |
Commercial real estate |
14,774 |
24,310 |
14,907 |
Residential real estate and other |
1,687 |
2,840 |
1,552 |
Total non-accrual |
$ 17,895 |
$ 28,493 |
$ 19,223 |
Total TDRs: |
|
|
|
Commercial |
$ 7,278 |
$ 7,388 |
$ 11,837 |
Commercial real estate |
79,500 |
93,535 |
98,303 |
Residential real estate and other |
5,739 |
6,180 |
6,205 |
Total TDRs |
$ 92,517 |
$ 107,103 |
$ 116,345 |
Weighted-average contractual interest
rate of TDRs |
4.02% |
4.12% |
4.14% |
|
|
|
|
(1) Included in total
non-performing loans. |
At March 31, 2014, the Company had $92.5 million in loans
modified in TDRs. The $92.5 million in TDRs represents 143
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 $107.1
million representing 149 credits at December 31, 2013 and
decreased from $116.3 million representing 167 credits at
March 31, 2013.
The table below presents a summary of TDRs as of March 31,
2014 and March 31, 2013, and shows the changes in the balance
during the periods presented:
Three Months Ended March 31, 2014
(Dollars in thousands) |
Commercial |
Commercial Real
Estate |
Residential
Real Estate and Other |
Total |
Balance at beginning of period |
$ 7,388 |
$ 93,535 |
$ 6,180 |
$ 107,103 |
Additions during the period |
88 |
5,157 |
— |
5,245 |
Reductions: |
|
|
|
|
Charge-offs |
(6) |
(3,713) |
(406) |
(4,125) |
Transferred to OREO and other repossessed
assets |
— |
(12,277) |
— |
(12,277) |
Removal of TDR loan status (1) |
— |
— |
— |
— |
Payments received |
(192) |
(3,202) |
(35) |
(3,429) |
Balance at period end |
$ 7,278 |
$ 79,500 |
$ 5,739 |
$ 92,517 |
Three Months Ended March 31, 2013
(Dollars in thousands) |
Commercial |
Commercial Real
Estate |
Residential
Real Estate and Other |
Total |
Balance at beginning of period |
$ 17,995 |
$ 102,415 |
$ 6,063 |
$ 126,473 |
Additions during the period |
708 |
1,192 |
377 |
2,277 |
Reductions: |
|
|
|
|
Charge-offs |
(2,142) |
(1,372) |
(17) |
(3,531) |
Transferred to OREO and other repossessed
assets |
(3,800) |
(167) |
(103) |
(4,070) |
Removal of TDR loan status (1) |
(609) |
— |
— |
(609) |
Payments received |
(315) |
(3,765) |
(115) |
(4,195) |
Balance at period end |
$ 11,837 |
$ 98,303 |
$ 6,205 |
$ 116,345 |
|
|
|
|
|
(1) Loan was previously classified as a
troubled debt restructuring 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 March 31, 2014 and
approximately $4.0 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 March 31, 2014 and
2013, the Company recorded $132,000 and $229,000, 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 March 31,
2014, December 31, 2013 and March 31, 2013, and shows the
activity for the respective period and the balance for each
property type:
|
Three Months Ended |
|
March
31, |
December 31, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
Balance at beginning of period |
$ 50,454 |
$ 55,250 |
$ 62,891 |
Disposals/resolved |
(8,205) |
(6,891) |
(7,498) |
Transfers in at fair value, less costs to
sell |
14,570 |
1,816 |
2,128 |
Additions from acquisition |
— |
1,773 |
— |
Fair value adjustments |
(2,688) |
(1,494) |
(1,344) |
Balance at end of period |
$ 54,131 |
$ 50,454 |
$ 56,177 |
|
|
|
|
|
Period End |
|
March
31, |
December 31, |
March 31, |
Balance by Property Type |
2014 |
2013 |
2013 |
Residential real estate |
$ 6,452 |
$ 5,452 |
$ 7,312 |
Residential real estate development |
3,500 |
3,859 |
10,133 |
Commercial real estate |
44,179 |
41,143 |
38,732 |
Total |
$ 54,131 |
$ 50,454 |
$ 56,177 |
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.
|
March
31, |
December 31, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
Period End Balances: |
|
|
|
Loans |
$ 312,478 |
$ 346,431 |
$ 518,661 |
Other real estate owned |
75,148 |
85,834 |
72,240 |
Other assets |
2,272 |
2,879 |
681 |
FDIC Indemnification asset |
60,298 |
85,672 |
170,696 |
Total covered assets |
$ 450,196 |
$ 520,816 |
$ 762,278 |
Allowance for Covered Loan Losses
Rollforward: |
|
|
|
Balance at beginning of quarter: |
$ 10,092 |
$ 12,924 |
$ 13,454 |
Provision for covered loan losses before
benefit attributable to FDIC loss share agreements |
(7,121) |
(269) |
1,600 |
Benefit attributable to FDIC loss share
agreements |
5,697 |
215 |
(1,280) |
Net provision for covered loan
losses |
(1,424) |
(54) |
320 |
(Decrease) increase in FDIC
indemnification asset |
(5,697) |
(215) |
1,280 |
Loans charged-off |
(2,864) |
(6,791) |
(2,791) |
Recoveries of loans charged-off |
3,340 |
4,228 |
9 |
Net recoveries (charge-offs) |
476 |
(2,563) |
(2,782) |
Balance at end of quarter |
$ 3,447 |
$ 10,092 |
$ 12,272 |
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 March 31,
2014 |
Three Months Ended March
31, 2013 |
|
Bank |
Life Insurance
Premium |
Bank |
Life Insurance Premium |
(Dollars in thousands) |
Acquisitions |
Finance Loans |
Acquisitions |
Finance Loans |
Accretable yield, beginning balance |
$ 107,655 |
$ 8,254 |
$ 143,224 |
$ 13,055 |
Acquisitions |
— |
— |
(78) |
— |
Accretable yield amortized to interest
income |
(7,770) |
(1,771) |
(9,577) |
(2,019) |
Accretable yield amortized to indemnification
asset(1) |
(5,648) |
— |
(8,706) |
— |
Reclassification from non-accretable
difference(2) |
8,580 |
— |
5,412 |
— |
(Decreases) increases in interest cash flows
due to payments and changes in interest rates |
(5,143) |
78 |
(8,550) |
182 |
Accretable yield, ending balance (3) |
$ 97,674 |
$ 6,561 |
$ 121,725 |
$ 11,218 |
|
|
|
|
|
(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 March 31,
2014, the Company estimates that the remaining accretable yield
balance to be amortized to the indemnification asset for the bank
acquisitions is $28.1 million. The remainder of the accretable
yield related to bank acquisitions is expected to be amortized to
interest income. |
Accretion to interest income from loans acquired in bank
acquisitions totaled $7.8 million and $9.6 million in the first
quarter of 2014 and 2013, respectively. These amounts include
accretion from both covered and non-covered loans, and are included
together within interest and fees on loans in the Consolidated
Statements of Income.
Items Impacting Comparative Financial
Results:
Acquisitions
On February 28, 2014, the Company, through its subsidiary Lake
Forest Bank and Trust Company ("Lake Forest Bank"), completed an
acquisition of a bank branch from Baytree National Bank & Trust
Company. In addition to the banking facility, Lake Forest Bank
acquired certain assets and approximately $15 million of
deposits.
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. 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 and Trust Company, N.A. 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 had 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 was 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, FNBI merged into the Company's wholly-owned
subsidiary bank, Old Plank Trail Community Bank, N.A. ("Old Plank
Trail Bank"), and the seven 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.
Divestiture of Previous FDIC-Assisted
Acquisition
On February 1, 2013, Hinsdale Bank and Trust Company ("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 an unaffiliated
credit union. Through this transaction, the Company divested
approximately $149 million of related deposits.
Announced Acquisitions
On April 8, 2014, the Company announced the signing of a
definitive agreement to acquire, through its wholly-owned
subsidiary Town Bank, certain branch offices and deposits of Talmer
Bank & Trust. Through this transaction, subject to final
adjustments, Town Bank will acquire 11 branch offices and deposits
of approximately $360 million.
On April 7, 2014, the Company announced the signing of a
definitive agreement to acquire, through its wholly-owned
subsidiary Town Bank, the Pewaukee, Wisconsin branch of THE
National Bank. Through this transaction, subject to final
adjustments, Town Bank will acquire approximately $40 million of
deposits, approximately $90 million of performing loans, the bank
facility, property and various other assets.
On February 12, 2014, the Company signed a
definitive agreement to acquire, through its wholly-owned
subsidiary Hinsdale Bank, the Stone Park branch office and certain
related deposits of Urban Partnership Bank.
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, Evergreen Park, 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, 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 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 2013 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;
- inaccurate assumptions in our analytical and forecasting models
used to manage our loan portfolio;
- 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;
- adverse effects of failures by our vendors to provide agreed
upon services in the manner and at the cost agreed, particularly
our information technology vendors;
- increased costs as a result of protecting our customers from
the impact of stolen debit card information;
- 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 expenses and delayed returns inherent in opening new
branches and de novo banks;
- 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;
- a lowering of our credit rating;
- 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;
- the impact of heightened 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, April 16, 2014 regarding first quarter 2014 results.
Individuals interested in listening should call (877) 363-5049
and enter Conference ID #25628125. 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 first quarter 2014 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 |
|
March
31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
2014 |
2013 |
2013 |
2013 |
2013 |
Selected Financial Condition Data (at
end of period): |
|
|
|
|
|
Total assets |
$
18,221,163 |
$ 18,097,783 |
$ 17,682,548 |
$ 17,613,546 |
$ 17,074,247 |
Total loans, excluding covered loans |
13,133,160 |
12,896,602 |
12,581,039 |
12,516,892 |
11,900,312 |
Total deposits |
15,129,045 |
14,668,789 |
14,647,446 |
14,365,854 |
13,962,757 |
Junior subordinated debentures |
249,493 |
249,493 |
249,493 |
249,943 |
249,493 |
Total shareholders' equity |
1,940,143 |
1,900,589 |
1,873,566 |
1,836,660 |
1,825,688 |
Selected Statements of Income
Data: |
|
|
|
|
|
Net interest income |
144,006 |
142,308 |
141,782 |
135,824 |
130,713 |
Net revenue (1) |
189,535 |
188,669 |
196,444 |
199,819 |
188,092 |
Net income |
34,500 |
35,288 |
35,563 |
34,307 |
32,052 |
Net income per common share – Basic |
$
0.71 |
$ 0.82 |
$ 0.86 |
$ 0.85 |
$ 0.80 |
Net income per common share – Diluted |
$
0.68 |
$ 0.70 |
$ 0.71 |
$ 0.69 |
$ 0.65 |
Selected Financial Ratios and Other
Data: |
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
Net interest margin (2) |
3.61% |
3.53% |
3.57% |
3.50% |
3.41% |
Non-interest income to average assets |
1.03% |
1.03% |
1.24% |
1.49% |
1.35% |
Non-interest expense to average assets |
2.96% |
2.82% |
2.89% |
2.97% |
2.82% |
Net overhead ratio (2) (3) |
1.93% |
1.79% |
1.65% |
1.49% |
1.47% |
Efficiency ratio - FTE (2) (4) |
69.02% |
65.95% |
64.60% |
63.97% |
63.78% |
Return on average assets |
0.78% |
0.78% |
0.81% |
0.80% |
0.75% |
Return on average common equity |
7.43% |
7.56% |
7.85% |
7.55% |
7.27% |
Return on average tangible common equity |
9.71% |
9.92% |
10.27% |
9.92% |
9.57% |
Average total assets |
$
17,980,943 |
$ 17,835,999 |
$ 17,489,571 |
$ 17,283,985 |
$ 17,256,843 |
Average total shareholders' equity |
1,923,649 |
1,895,498 |
1,853,122 |
1,859,265 |
1,818,127 |
Average loans to average deposits ratio |
89.4% |
88.9% |
91.3% |
88.7% |
86.6% |
Average loans to average deposits ratio
(including covered loans) |
91.6 |
91.6 |
94.3 |
92.2 |
90.4 |
Common Share Data at end of
period: |
|
|
|
|
|
Market price per common share |
$
48.66 |
$ 46.12 |
$ 41.07 |
$ 38.28 |
$ 37.04 |
Book value per common share (2) |
$
39.21 |
$ 38.47 |
$ 38.09 |
$ 37.84 |
$ 38.13 |
Tangible common book value per share (2) |
$
30.74 |
$ 29.93 |
$ 29.89 |
$ 29.25 |
$ 29.74 |
Common shares outstanding |
46,258,960 |
46,116,583 |
39,731,043 |
37,725,143 |
37,013,707 |
Other Data at end of period:(8) |
|
|
|
|
|
Leverage Ratio(5) |
10.5% |
10.5% |
10.5% |
10.4% |
10.2% |
Tier 1 Capital to risk-weighted assets
(5) |
12.0% |
12.2% |
12.3% |
12.0% |
12.4% |
Total capital to risk-weighted assets
(5) |
12.6% |
12.9% |
13.1% |
12.9% |
13.5% |
Tangible common equity ratio (TCE) (2)
(7) |
8.0% |
7.8% |
7.9% |
7.4% |
7.7% |
Tangible common equity ratio, assuming full
conversion of preferred stock (2) (7) |
8.7% |
8.5% |
8.7% |
8.5% |
8.8% |
Allowance for credit losses (6) |
$
93,012 |
$ 97,641 |
$ 108,455 |
$ 110,405 |
$ 125,635 |
Non-performing loans |
90,124 |
103,334 |
123,261 |
121,485 |
128,633 |
Allowance for credit losses to total loans
(6) |
0.71% |
0.76% |
0.86% |
0.88% |
1.06% |
Non-performing loans to total loans |
0.69% |
0.80% |
0.98% |
0.97% |
1.08% |
Number of: |
|
|
|
|
|
Bank subsidiaries |
15 |
15 |
15 |
15 |
15 |
Non-bank subsidiaries |
8 |
8 |
8 |
8 |
8 |
Banking offices |
126 |
124 |
119 |
117 |
108 |
|
|
|
|
|
|
(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) |
|
March
31, |
December 31, |
September 30, |
June 30, |
March 31, |
(In thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Assets |
|
|
|
|
|
Cash and due from banks |
$
330,262 |
$ 253,408 |
$ 322,866 |
$ 224,286 |
$ 199,575 |
Federal funds sold and securities purchased
under resale agreements |
12,476 |
10,456 |
7,771 |
9,013 |
13,626 |
Interest-bearing deposits with other
banks |
540,964 |
495,574 |
681,834 |
440,656 |
685,302 |
Available-for-sale securities, at fair
value |
1,949,697 |
2,176,290 |
1,781,883 |
1,843,824 |
1,870,831 |
Trading account securities |
1,068 |
497 |
259 |
659 |
1,036 |
Federal Home Loan Bank and Federal Reserve
Bank stock, at cost |
78,524 |
79,261 |
76,755 |
79,354 |
76,601 |
Brokerage customer receivables |
26,884 |
30,953 |
29,253 |
26,214 |
25,614 |
Mortgage loans held-for-sale |
215,231 |
334,327 |
334,345 |
537,991 |
380,922 |
Loans, net of unearned income, excluding
covered loans |
13,133,160 |
12,896,602 |
12,581,039 |
12,516,892 |
11,900,312 |
Covered loans |
312,478 |
346,431 |
415,988 |
454,602 |
518,661 |
Total loans |
13,445,638 |
13,243,033 |
12,997,027 |
12,971,494 |
12,418,973 |
Less: Allowance for loan losses |
92,275 |
96,922 |
107,188 |
106,842 |
110,348 |
Less: Allowance for covered loan
losses |
3,447 |
10,092 |
12,924 |
14,429 |
12,272 |
Net loans |
13,349,916 |
13,136,019 |
12,876,915 |
12,850,223 |
12,296,353 |
Premises and equipment, net |
531,763 |
531,947 |
517,942 |
512,928 |
504,803 |
FDIC indemnification asset |
60,298 |
85,672 |
100,313 |
137,681 |
170,696 |
Accrued interest receivable and other
assets |
549,705 |
569,619 |
576,121 |
573,709 |
485,746 |
Trade date securities receivable |
182,600 |
— |
— |
— |
— |
Goodwill |
373,725 |
374,547 |
357,309 |
356,871 |
343,632 |
Other intangible assets |
18,050 |
19,213 |
18,982 |
20,137 |
19,510 |
Total assets |
$ 18,221,163 |
$ 18,097,783 |
$ 17,682,548 |
$ 17,613,546 |
$ 17,074,247 |
Liabilities and Shareholders'
Equity |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Non-interest bearing |
$ 2,773,922 |
$ 2,721,771 |
$ 2,622,518 |
$ 2,450,659 |
$ 2,243,440 |
Interest bearing |
12,355,123 |
11,947,018 |
12,024,928 |
11,915,195 |
11,719,317 |
Total deposits |
15,129,045 |
14,668,789 |
14,647,446 |
14,365,854 |
13,962,757 |
Notes payable |
182 |
364 |
1,546 |
1,729 |
31,911 |
Federal Home Loan Bank advances |
387,672 |
417,762 |
387,852 |
585,942 |
414,032 |
Other borrowings |
230,904 |
254,740 |
246,870 |
252,776 |
256,244 |
Subordinated notes |
— |
— |
10,000 |
10,000 |
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 |
283,724 |
302,958 |
265,775 |
310,515 |
317,872 |
Total liabilities |
16,281,020 |
16,197,194 |
15,808,982 |
15,776,886 |
15,248,559 |
Shareholders' Equity: |
|
|
|
|
|
Preferred stock |
126,477 |
126,477 |
126,500 |
176,476 |
176,441 |
Common stock |
46,332 |
46,181 |
39,992 |
37,985 |
37,272 |
Surplus |
1,122,233 |
1,117,032 |
1,118,550 |
1,066,796 |
1,040,098 |
Treasury stock |
(3,380) |
(3,000) |
(8,290) |
(8,214) |
(8,187) |
Retained earnings |
705,234 |
676,935 |
643,228 |
612,821 |
581,131 |
Accumulated other comprehensive loss |
(56,753) |
(63,036) |
(46,414) |
(49,204) |
(1,067) |
Total shareholders' equity |
1,940,143 |
1,900,589 |
1,873,566 |
1,836,660 |
1,825,688 |
Total liabilities and
shareholders' equity |
$ 18,221,163 |
$ 18,097,783 |
$ 17,682,548 |
$ 17,613,546 |
$ 17,074,247 |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Consolidated Statements
of Income (Unaudited) - 5 Quarter Trends |
|
|
|
|
|
|
|
Three Months Ended |
|
March
31, |
December 31, |
September 30, |
June 30, |
March 31, |
(In thousands, except per share data) |
2014 |
2013 |
2013 |
2013 |
2013 |
Interest income |
|
|
|
|
|
Interest and fees on loans |
$ 147,030 |
$ 149,528 |
$ 150,810 |
$ 145,983 |
$ 142,114 |
Interest bearing deposits with banks |
249 |
435 |
229 |
411 |
569 |
Federal funds sold and securities
purchased under resale agreements |
4 |
4 |
4 |
4 |
15 |
Securities |
13,114 |
9,690 |
9,224 |
9,359 |
8,752 |
Trading account securities |
9 |
(2) |
14 |
8 |
5 |
Federal Home Loan Bank and Federal
Reserve Bank stock |
711 |
709 |
687 |
693 |
684 |
Brokerage customer receivables |
209 |
218 |
200 |
188 |
174 |
Total interest income |
161,326 |
160,582 |
161,168 |
156,646 |
152,313 |
Interest expense |
|
|
|
|
|
Interest on deposits |
11,923 |
12,488 |
12,524 |
13,675 |
14,504 |
Interest on Federal Home Loan Bank
advances |
2,643 |
2,700 |
2,729 |
2,821 |
2,764 |
Interest on notes payable and other
borrowings |
750 |
1,145 |
910 |
1,132 |
1,154 |
Interest on subordinated notes |
— |
16 |
40 |
52 |
59 |
Interest on junior subordinated
debentures |
2,004 |
1,925 |
3,183 |
3,142 |
3,119 |
Total interest expense |
17,320 |
18,274 |
19,386 |
20,822 |
21,600 |
Net interest income |
144,006 |
142,308 |
141,782 |
135,824 |
130,713 |
Provision for credit losses |
1,880 |
3,850 |
11,114 |
15,382 |
15,687 |
Net interest income after provision for
credit losses |
142,126 |
138,458 |
130,668 |
120,442 |
115,026 |
Non-interest income |
|
|
|
|
|
Wealth management |
16,813 |
16,265 |
16,057 |
15,892 |
14,828 |
Mortgage banking |
16,428 |
19,296 |
25,682 |
31,734 |
30,145 |
Service charges on deposit accounts |
5,346 |
5,230 |
5,308 |
5,035 |
4,793 |
(Losses) gains on available-for-sale
securities, net |
(33) |
(3,328) |
75 |
2 |
251 |
Fees from covered call options |
1,542 |
1,856 |
285 |
993 |
1,639 |
Trading (losses) gains, net |
(652) |
(278) |
(1,655) |
3,260 |
(435) |
Other |
6,085 |
7,320 |
8,910 |
7,079 |
6,158 |
Total non-interest income |
45,529 |
46,361 |
54,662 |
63,995 |
57,379 |
Non-interest expense |
|
|
|
|
|
Salaries and employee benefits |
79,934 |
74,049 |
78,007 |
79,225 |
77,513 |
Equipment |
7,403 |
7,260 |
6,593 |
6,413 |
6,184 |
Occupancy, net |
10,993 |
9,994 |
9,079 |
8,707 |
8,853 |
Data processing |
4,715 |
4,831 |
4,884 |
4,358 |
4,599 |
Advertising and marketing |
2,816 |
3,517 |
2,772 |
2,722 |
2,040 |
Professional fees |
3,454 |
4,132 |
3,378 |
4,191 |
3,221 |
Amortization of other intangible
assets |
1,163 |
1,189 |
1,154 |
1,164 |
1,120 |
FDIC insurance |
2,951 |
3,036 |
3,245 |
3,003 |
3,444 |
OREO expense (income), net |
3,976 |
2,671 |
2,499 |
2,284 |
(1,620) |
Other |
13,910 |
16,318 |
15,637 |
16,120 |
14,765 |
Total non-interest expense |
131,315 |
126,997 |
127,248 |
128,187 |
120,119 |
Income before taxes |
56,340 |
57,822 |
58,082 |
56,250 |
52,286 |
Income tax expense |
21,840 |
22,534 |
22,519 |
21,943 |
20,234 |
Net income |
$ 34,500 |
$ 35,288 |
$ 35,563 |
$ 34,307 |
$ 32,052 |
Preferred stock dividends and discount
accretion |
$
1,581 |
$ 1,581 |
$ 1,581 |
$ 2,617 |
$ 2,616 |
Net income applicable to common
shares |
$ 32,919 |
$ 33,707 |
$ 33,982 |
$ 31,690 |
$ 29,436 |
Net income per common share -
Basic |
$ 0.71 |
$ 0.82 |
$ 0.86 |
$ 0.85 |
$ 0.80 |
Net income per common share -
Diluted |
$ 0.68 |
$ 0.70 |
$ 0.71 |
$ 0.69 |
$ 0.65 |
Cash dividends declared per common
share |
$ 0.10 |
$ — |
$ 0.09 |
$ — |
$ 0.09 |
Weighted average common shares
outstanding |
46,195 |
40,954 |
39,331 |
37,486 |
36,976 |
Dilutive potential common shares |
4,509 |
9,598 |
10,823 |
12,354 |
12,463 |
Average common shares and dilutive common
shares |
50,704 |
50,552 |
50,154 |
49,840 |
49,439 |
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Period End Loan Balances
- 5 Quarter Trends |
|
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Balance: |
|
|
|
|
|
Commercial |
$3,439,197 |
$3,253,687 |
$3,109,121 |
$3,119,931 |
$2,872,695 |
Commercial real estate |
4,262,255 |
4,230,035 |
4,146,110 |
4,094,628 |
3,990,465 |
Home equity |
707,748 |
719,137 |
736,620 |
758,260 |
759,218 |
Residential real-estate |
426,769 |
434,992 |
397,707 |
384,961 |
360,652 |
Premium finance receivables -
commercial |
2,208,361 |
2,167,565 |
2,150,481 |
2,165,734 |
1,997,160 |
Premium finance receivables - life
insurance |
1,929,334 |
1,923,698 |
1,869,739 |
1,821,147 |
1,753,512 |
Consumer and other (1) |
159,496 |
167,488 |
171,261 |
172,231 |
166,610 |
Total loans, net of unearned income,
excluding covered loans |
$13,133,160 |
$12,896,602 |
$12,581,039 |
$12,516,892 |
$11,900,312 |
Covered loans |
312,478 |
346,431 |
415,988 |
454,602 |
518,661 |
Total loans, net of unearned income |
$13,445,638 |
$13,243,033 |
$12,997,027 |
$12,971,494 |
$12,418,973 |
|
|
|
|
|
|
Mix: |
|
|
|
|
|
Commercial |
26% |
25% |
24% |
24% |
23% |
Commercial real estate |
32 |
32 |
32 |
31 |
32 |
Home equity |
5 |
5 |
6 |
6 |
6 |
Residential real-estate |
3 |
3 |
3 |
3 |
3 |
Premium finance receivables -
commercial |
17 |
16 |
16 |
16 |
16 |
Premium finance receivables - life
insurance |
14 |
15 |
14 |
14 |
14 |
Consumer and other (1) |
1 |
1 |
2 |
2 |
2 |
Total loans, net of unearned income,
excluding covered loans |
98% |
97% |
97% |
96% |
96% |
Covered loans |
2 |
3 |
3 |
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 |
|
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Balance: |
|
|
|
|
|
Non-interest bearing |
$2,773,922 |
$2,721,771 |
$2,622,518 |
$2,450,659 |
$2,243,440 |
NOW |
1,983,251 |
1,953,882 |
1,922,906 |
2,147,004 |
2,043,227 |
Wealth Management deposits (1) |
1,289,134 |
1,013,850 |
1,099,509 |
1,083,897 |
868,119 |
Money Market |
3,454,271 |
3,359,999 |
3,423,413 |
3,037,354 |
2,879,636 |
Savings |
1,443,943 |
1,392,575 |
1,318,147 |
1,304,619 |
1,258,682 |
Time certificates of deposit |
4,184,524 |
4,226,712 |
4,260,953 |
4,342,321 |
4,669,653 |
Total deposits |
$15,129,045 |
$14,668,789 |
$14,647,446 |
$14,365,854 |
$13,962,757 |
Mix: |
|
|
|
|
|
Non-interest bearing |
18% |
19% |
18% |
17% |
16% |
NOW |
13 |
13 |
13 |
15 |
15 |
Wealth Management deposits (1) |
8 |
7 |
8 |
8 |
6 |
Money Market |
23 |
23 |
23 |
21 |
21 |
Savings |
10 |
9 |
9 |
9 |
9 |
Time certificates of deposit |
28 |
29 |
29 |
30 |
33 |
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 |
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Net interest income |
$144,696 |
$142,880 |
$142,391 |
$136,409 |
$131,207 |
Call option income |
1,542 |
1,856 |
285 |
993 |
1,639 |
Net interest income including call option
income |
$146,238 |
$144,736 |
$142,676 |
$137,402 |
$132,846 |
Yield on earning assets |
4.04% |
3.98% |
4.05% |
4.04% |
3.97% |
Rate on interest-bearing liabilities |
0.54 |
0.56 |
0.60 |
0.65 |
0.68 |
Rate spread |
3.50% |
3.42% |
3.45% |
3.39% |
3.29% |
Net free funds contribution |
0.11 |
0.11 |
0.12 |
0.11 |
0.12 |
Net interest margin |
3.61 |
3.53 |
3.57 |
3.50 |
3.41 |
Call option income |
0.04 |
0.05 |
0.01 |
0.03 |
0.04 |
Net interest margin including call option
income |
3.65% |
3.58% |
3.58% |
3.53% |
3.45% |
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Net Interest Margin
(Including Call Option Income - YTD Trends) |
|
|
Three Months Ended, March 31 |
|
Years Ended December
31, |
|
(Dollars in thousands) |
2014 |
2013 |
2012 |
2011 |
2010 |
Net interest income |
$144,696 |
$552,887 |
$521,463 |
$463,071 |
$417,564 |
Call option income |
1,542 |
4,773 |
10,476 |
13,570 |
2,235 |
Net interest income including call option
income |
$146,238 |
$557,660 |
$531,939 |
$476,641 |
$419,799 |
Yield on earning assets |
4.04% |
4.01% |
4.21% |
4.49% |
4.80% |
Rate on interest-bearing liabilities |
0.54 |
0.62 |
0.86 |
1.23 |
1.61 |
Rate spread |
3.50% |
3.39% |
3.35% |
3.26% |
3.19% |
Net free funds contribution |
0.11 |
0.11 |
0.14 |
0.16 |
0.18 |
Net interest margin |
3.61 |
3.50 |
3.49 |
3.42 |
3.37 |
Call option income |
0.04 |
0.03 |
0.07 |
0.10 |
0.02 |
Net interest margin including call option
income |
3.65% |
3.53% |
3.56% |
3.52% |
3.39% |
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Quarterly Average
Balances - 5 Quarter Trends |
|
|
Three Months Ended |
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(In thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Liquidity management assets |
$2,646,720 |
$2,613,876 |
$2,262,839 |
$2,560,118 |
$2,797,310 |
Other earning assets |
28,925 |
28,746 |
27,426 |
25,775 |
24,205 |
Loans, net of unearned income |
13,278,122 |
13,043,666 |
13,113,138 |
12,546,676 |
12,252,558 |
Covered loans |
325,885 |
388,148 |
435,961 |
491,603 |
536,284 |
Total earning assets |
$16,279,652 |
$16,074,436 |
$15,839,364 |
$15,624,172 |
$15,610,357 |
Allowance for loan and covered loan
losses |
(110,304) |
(122,060) |
(126,164) |
(126,455) |
(125,221) |
Cash and due from banks |
223,324 |
237,138 |
209,539 |
225,712 |
217,345 |
Other assets |
1,588,271 |
1,646,485 |
1,566,832 |
1,560,556 |
1,554,362 |
Total assets |
$17,980,943 |
$17,835,999 |
$17,489,571 |
$17,283,985 |
$17,256,843 |
Interest-bearing deposits |
$12,121,185 |
$11,945,314 |
$11,817,636 |
$11,766,422 |
$11,857,400 |
Federal Home Loan Bank advances |
388,975 |
389,583 |
454,563 |
434,572 |
414,092 |
Notes payable and other borrowings |
244,950 |
251,168 |
256,318 |
273,255 |
297,151 |
Subordinated notes |
— |
4,022 |
10,000 |
13,187 |
15,000 |
Junior subordinated notes |
249,493 |
249,493 |
249,493 |
249,493 |
249,493 |
Total interest-bearing liabilities |
$13,004,603 |
$12,839,580 |
$12,788,010 |
$12,736,929 |
$12,833,136 |
Non-interest bearing deposits |
2,726,872 |
2,723,360 |
2,552,182 |
2,379,315 |
2,290,725 |
Other liabilities |
325,819 |
377,561 |
296,257 |
308,476 |
314,855 |
Equity |
1,923,649 |
1,895,498 |
1,853,122 |
1,859,265 |
1,818,127 |
Total liabilities and shareholders'
equity |
$17,980,943 |
$17,835,999 |
$17,489,571 |
$17,283,985 |
$17,256,843 |
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Net Interest Margin - 5
Quarter Trends |
|
|
Three Months Ended |
|
March 31,
2014 |
December 31, 2013 |
September 30, 2013 |
June 30, 2013 |
March 31, 2013 |
Yield earned on: |
|
|
|
|
|
Liquidity management assets |
2.23% |
1.70% |
1.84% |
1.70% |
1.50% |
Other earning assets |
3.12 |
2.95 |
3.19 |
3.13 |
3.02 |
Loans, net of unearned income |
4.29 |
4.32 |
4.30 |
4.38 |
4.36 |
Covered loans |
8.64 |
7.85 |
8.16 |
7.40 |
7.96 |
Total earning assets |
4.04% |
3.98% |
4.05% |
4.04% |
3.97% |
Rate paid on: |
|
|
|
|
|
Interest-bearing deposits |
0.40% |
0.41% |
0.42% |
0.47% |
0.50% |
Federal Home Loan Bank advances |
2.76 |
2.75 |
2.38 |
2.60 |
2.71 |
Notes payable and other borrowings |
1.24 |
1.81 |
1.41 |
1.66 |
1.57 |
Subordinated notes |
— |
1.56 |
1.57 |
1.58 |
1.56 |
Junior subordinated notes |
3.21 |
3.02 |
4.99 |
4.98 |
5.00 |
Total interest-bearing liabilities |
0.54% |
0.56% |
0.60% |
0.65% |
0.68% |
Interest rate spread |
3.50% |
3.42% |
3.45% |
3.39% |
3.29% |
Net free funds/contribution |
0.11 |
0.11 |
0.12 |
0.11 |
0.12 |
Net interest income/Net interest margin |
3.61% |
3.53% |
3.57% |
3.50% |
3.41% |
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Non-Interest Income - 5
Quarter Trends |
|
|
Three Months Ended |
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(In thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Brokerage |
$7,091 |
$7,200 |
$7,388 |
$7,426 |
$7,267 |
Trust and asset management |
9,722 |
9,065 |
8,669 |
8,466 |
7,561 |
Total wealth management |
16,813 |
16,265 |
16,057 |
15,892 |
14,828 |
Mortgage banking |
16,428 |
19,296 |
25,682 |
31,734 |
30,145 |
Service charges on deposit accounts |
5,346 |
5,230 |
5,308 |
5,035 |
4,793 |
(Losses) gains on available-for-sale
securities, net |
(33) |
(3,328) |
75 |
2 |
251 |
Fees from covered call options |
1,542 |
1,856 |
285 |
993 |
1,639 |
Trading (losses) gains, net |
(652) |
(278) |
(1,655) |
3,260 |
(435) |
Other: |
|
|
|
|
|
Interest rate swap fees |
951 |
1,537 |
2,183 |
1,638 |
2,270 |
Bank Owned Life Insurance |
712 |
1,074 |
625 |
902 |
846 |
Administrative services |
859 |
878 |
943 |
832 |
738 |
Miscellaneous |
3,563 |
3,831 |
5,159 |
3,707 |
2,304 |
Total other income |
6,085 |
7,320 |
8,910 |
7,079 |
6,158 |
Total Non-Interest
Income |
$45,529 |
$46,361 |
$54,662 |
$63,995 |
$57,379 |
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Non-Interest Expense - 5
Quarter Trends |
|
Three Months Ended |
|
March
31, |
December 31, |
September 30, |
June 30, |
March 31, |
(In thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Salaries and employee benefits: |
|
|
|
|
|
Salaries |
$43,736 |
$43,832 |
$42,789 |
$41,671 |
$41,831 |
Commissions and bonus |
21,534 |
18,009 |
23,409 |
25,143 |
21,276 |
Benefits |
14,664 |
12,208 |
11,809 |
12,411 |
14,406 |
Total salaries and employee benefits |
79,934 |
74,049 |
78,007 |
79,225 |
77,513 |
Equipment |
7,403 |
7,260 |
6,593 |
6,413 |
6,184 |
Occupancy, net |
10,993 |
9,994 |
9,079 |
8,707 |
8,853 |
Data processing |
4,715 |
4,831 |
4,884 |
4,358 |
4,599 |
Advertising and marketing |
2,816 |
3,517 |
2,772 |
2,722 |
2,040 |
Professional fees |
3,454 |
4,132 |
3,378 |
4,191 |
3,221 |
Amortization of other intangible assets |
1,163 |
1,189 |
1,154 |
1,164 |
1,120 |
FDIC insurance |
2,951 |
3,036 |
3,245 |
3,003 |
3,444 |
OREO expense (income), net |
3,976 |
2,671 |
2,499 |
2,284 |
(1,620) |
Other: |
|
|
|
|
|
Commissions - 3rd party brokers |
1,657 |
1,439 |
1,277 |
1,128 |
1,233 |
Postage |
1,429 |
1,622 |
1,255 |
1,464 |
1,249 |
Stationery and supplies |
892 |
1,157 |
1,009 |
887 |
934 |
Miscellaneous |
9,932 |
12,100 |
12,096 |
12,641 |
11,349 |
Total other expense |
13,910 |
16,318 |
15,637 |
16,120 |
14,765 |
Total Non-Interest
Expense |
$131,315 |
$126,997 |
$127,248 |
$128,187 |
$120,119 |
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Allowance for Credit
Losses, excluding covered loans - 5 Quarter Trends |
|
|
Three Months Ended |
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Allowance for loan losses at
beginning of period |
$96,922 |
$107,188 |
$106,842 |
$110,348 |
$107,351 |
Provision for credit
losses |
3,304 |
3,904 |
11,580 |
15,133 |
15,367 |
Other adjustments |
(148) |
(195) |
(205) |
(309) |
(229) |
Reclassification (to)/from allowance
for unfunded lending-related commitments |
(18) |
504 |
284 |
65 |
(213) |
Charge-offs: |
|
|
|
|
|
Commercial |
648 |
5,209 |
3,281 |
1,093 |
4,540 |
Commercial real estate |
4,493 |
7,517 |
6,982 |
14,947 |
3,299 |
Home equity |
2,267 |
1,468 |
711 |
1,785 |
2,397 |
Residential real estate |
226 |
385 |
328 |
517 |
1,728 |
Premium finance receivables -
commercial |
1,210 |
1,395 |
1,294 |
1,306 |
1,068 |
Premium finance receivables - life
insurance |
— |
14 |
3 |
— |
— |
Consumer and other |
173 |
637 |
216 |
128 |
129 |
Total charge-offs |
9,017 |
16,625 |
12,815 |
19,776 |
13,161 |
Recoveries: |
|
|
|
|
|
Commercial |
317 |
336 |
756 |
268 |
295 |
Commercial real estate |
145 |
1,302 |
272 |
584 |
368 |
Home equity |
257 |
56 |
43 |
171 |
162 |
Residential real estate |
131 |
202 |
64 |
18 |
5 |
Premium finance receivables -
commercial |
319 |
230 |
314 |
279 |
285 |
Premium finance receivables - life
insurance |
2 |
2 |
2 |
— |
9 |
Consumer and other |
61 |
18 |
51 |
61 |
109 |
Total recoveries |
1,232 |
2,146 |
1,502 |
1,381 |
1,233 |
Net charge-offs |
(7,785) |
(14,479) |
(11,313) |
(18,395) |
(11,928) |
Allowance for loan losses at
period end |
$92,275 |
$96,922 |
$107,188 |
$106,842 |
$110,348 |
Allowance for unfunded
lending-related commitments at period end |
737 |
719 |
1,267 |
3,563 |
15,287 |
Allowance for credit losses at
period end |
$93,012 |
$97,641 |
$108,455 |
$110,405 |
$125,635 |
Annualized net charge-offs by
category as a percentage of its own respective category's
average: |
|
|
|
|
|
Commercial |
0.04% |
0.61% |
0.32% |
0.11% |
0.61% |
Commercial real estate |
0.41 |
0.59 |
0.65 |
1.42 |
0.30 |
Home equity |
1.14 |
0.77 |
0.36 |
0.85 |
1.17 |
Residential real estate |
0.06 |
0.10 |
0.12 |
0.26 |
0.93 |
Premium finance receivables -
commercial |
0.16 |
0.21 |
0.17 |
0.20 |
0.16 |
Premium finance receivables - life
insurance |
— |
— |
— |
— |
— |
Consumer and other |
0.26 |
1.33 |
0.35 |
0.15 |
0.04 |
Total loans, net of unearned income,
excluding covered loans |
0.24% |
0.44% |
0.34% |
0.59% |
0.39% |
Net charge-offs as a percentage
of the provision for credit losses |
235.65% |
370.90% |
97.69% |
121.57% |
77.62% |
Loans at period-end |
$13,133,160 |
$12,896,602 |
$12,581,039 |
$12,516,892 |
$11,900,312 |
Allowance for loan losses as a
percentage of loans at period end |
0.70% |
0.75% |
0.85% |
0.85% |
0.93% |
Allowance for credit losses as a
percentage of loans at period end |
0.71% |
0.76% |
0.86% |
0.88% |
1.06% |
|
|
WINTRUST FINANCIAL
CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION |
Non-Performing Assets,
excluding covered assets - 5 Quarter Trends |
|
|
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(Dollars in thousands) |
2014 |
2013 |
2013 |
2013 |
2013 |
Loans past due greater than 90 days
and still accruing(1): |
|
|
|
|
|
Commercial |
$387 |
$— |
$190 |
$100 |
$— |
Commercial real-estate |
— |
230 |
3,389 |
3,263 |
— |
Home equity |
— |
— |
— |
25 |
— |
Residential real-estate |
— |
— |
— |
— |
— |
Premium finance receivables -
commercial |
6,808 |
8,842 |
11,751 |
6,671 |
7,677 |
Premium finance receivables - life
insurance |
— |
— |
592 |
1,212 |
2,256 |
Consumer and other |
57 |
105 |
100 |
217 |
145 |
Total loans past due greater than 90 days
and still accruing |
7,252 |
9,177 |
16,022 |
11,488 |
10,078 |
Non-accrual loans(2): |
|
|
|
|
|
Commercial |
11,782 |
10,780 |
17,647 |
17,248 |
18,373 |
Commercial real-estate |
33,733 |
46,658 |
52,723 |
54,825 |
61,807 |
Home equity |
7,311 |
10,071 |
10,926 |
12,322 |
14,891 |
Residential real-estate |
14,385 |
14,974 |
14,126 |
10,213 |
9,606 |
Premium finance receivables -
commercial |
14,517 |
10,537 |
10,132 |
13,605 |
12,068 |
Premium finance receivables - life
insurance |
— |
— |
14 |
16 |
20 |
Consumer and other |
1,144 |
1,137 |
1,671 |
1,768 |
1,790 |
Total non-accrual loans |
82,872 |
94,157 |
107,239 |
109,997 |
118,555 |
Total non-performing
loans: |
|
|
|
|
|
Commercial |
12,169 |
10,780 |
17,837 |
17,348 |
18,373 |
Commercial real-estate |
33,733 |
46,888 |
56,112 |
58,088 |
61,807 |
Home equity |
7,311 |
10,071 |
10,926 |
12,347 |
14,891 |
Residential real-estate |
14,385 |
14,974 |
14,126 |
10,213 |
9,606 |
Premium finance receivables -
commercial |
21,325 |
19,379 |
21,883 |
20,276 |
19,745 |
Premium finance receivables - life
insurance |
— |
— |
606 |
1,228 |
2,276 |
Consumer and other |
1,201 |
1,242 |
1,771 |
1,985 |
1,935 |
Total non-performing loans |
$90,124 |
$103,334 |
$123,261 |
$121,485 |
$128,633 |
Other real estate owned |
48,115 |
43,632 |
46,901 |
46,169 |
50,593 |
Other real estate owned - obtained in
acquisition |
6,016 |
6,822 |
8,349 |
10,856 |
5,584 |
Other repossessed assets |
426 |
542 |
446 |
1,032 |
4,315 |
Total non-performing assets |
$144,681 |
$154,330 |
$178,957 |
$179,542 |
$189,125 |
TDRs performing under the contractual
terms of the loan agreement |
74,622 |
78,610 |
79,205 |
93,810 |
97,122 |
Total non-performing loans by
category as a percent of its own respective category's period-end
balance: |
|
|
|
|
|
Commercial |
0.35% |
0.33% |
0.57% |
0.56% |
0.64% |
Commercial real-estate |
0.79 |
1.11 |
1.35 |
1.42 |
1.55 |
Home equity |
1.03 |
1.40 |
1.48 |
1.63 |
1.96 |
Residential real-estate |
3.37 |
3.44 |
3.55 |
2.65 |
2.66 |
Premium finance receivables -
commercial |
0.97 |
0.89 |
1.02 |
0.94 |
0.99 |
Premium finance receivables - life
insurance |
— |
— |
0.03 |
0.07 |
0.13 |
Consumer and other |
0.75 |
0.74 |
1.03 |
1.15 |
1.16 |
Total loans, net of unearned income |
0.69% |
0.80% |
0.98% |
0.97% |
1.08% |
Total non-performing assets as a
percentage of total assets |
0.79% |
0.85% |
1.01% |
1.02% |
1.11% |
Allowance for loan losses as a
percentage of total non-performing loans |
102.39% |
93.80% |
86.96% |
87.95% |
85.79% |
|
(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 $17.9 million, $28.5 million, $35.8 million,
$32.4 million and $19.2 million as of March 31, 2014,
December 31, 2013, September 30, 2013, June 30, 2013 and March
31, 2013, respectively. |
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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