ROSEMONT, Ill., April 21, 2020 (GLOBE NEWSWIRE)
-- Wintrust Financial Corporation (“Wintrust” or “the Company”)
(Nasdaq: WTFC) announced net income of $62.8 million or $1.04 per
diluted common share for the first quarter of 2020, a decrease in
diluted earnings per common share of 27.8% compared to the prior
quarter and a decrease of 31.6% compared to the first quarter of
2019.
Highlights of the First Quarter of
2020:
Comparative information to the fourth quarter of 2019
- Total assets increased by $2.2
billion.
- Total loans increased by $1.0
billion.
- Total deposits increased by $1.4
billion.
- Net interest income decreased by
$436,000 as the impact of a five basis point decline in net
interest margin and one less day was partially offset by a
$925 million increase in average earning assets.
- The allowance for credit losses
increased by $95.0 million to $253.5 million as of March 31, 2020
as compared to $158.5 million as of December 31, 2019. The
change in allowance for credit losses was due to:
• An increase of $47.4 million related to the cumulative effect
adjustment from the adoption of the Current Expected Credit Loss
("CECL") standard effective as of January 1, 2020.
• Provision for credit losses of $53.0 million in the current
quarter. Provision for credit losses increased by $45.2
million from a provision for credit losses of $7.8 million in the
fourth quarter of 2019 primarily related to the implementation of
CECL and the economic conditions created by the COVID-19
pandemic.
• Net charge-offs of $5.3 million in the first quarter of 2020
as compared to $12.7 million in the fourth quarter of 2019.
Other highlights of the first quarter of
2020
- Recorded $17.4 million of
derivative income associated with mandatory commitments to fund
mortgage originations for sale in the current quarter as compared
to a $1.0 million derivative loss in the fourth quarter of 2019.
Mandatory commitments to fund mortgage originations for sale were
$1.4 billion at the end of the first quarter of 2020 as compared to
$372 million at the end of the fourth quarter of
2019.
- Recorded a decrease in the value of
mortgage servicing rights related to changes in fair value model
assumptions, net of derivative contract activity held as an
economic hedge, of $10.4 million.
- Recognized $4.4 million of net
losses on investment securities, primarily as a result of
unrealized losses on market sensitive securities.
- Incurred acquisition related costs
of $1.7 million in the first quarter of 2020 as compared to $2.4
million in the fourth quarter of 2019.
- Total period end loans were $871
million higher than average total loans in current quarter.
- Repurchased 576,469 shares of
common stock at a cost of $37.1 million. At this time, we have
temporarily suspended our common stock repurchase program, as an
additional prudential measure.
Edward J. Wehmer, Founder and Chief Executive
Officer, commented, "I would like to start by thanking all Wintrust
employees for their passion and commitment during this difficult
time. As the challenges of COVID-19 affect our customers and our
communities, we stand ready to be responsive and supportive. I am
extremely proud of our successful efforts earlier this month to
timely launch the Paycheck Protection Program ("PPP") to provide
much needed funding to our small business customers so that they
can continue to operate and pay their employees. Our teams worked
tirelessly to process approximately 8,900 applications with a
median loan size of approximately $87,500, totaling loan approvals
of nearly $3.3 billion through April 17th. We are honored to be
part of the solution to the complex problems faced by our clients
during the COVID-19 pandemic. We will continue to answer their call
throughout this crisis and into the eventual recovery. Please
see our previous releases regarding our PPP activity to date. We
expect to further participate in the program if additional
government funding is approved."
With respect to the current quarter, Mr Wehmer
remarked, "Wintrust reported net income of $62.8 million for the
first quarter of 2020, down from $86.0 million in the fourth
quarter of 2019. However, pre-tax income, excluding provision for
credit losses and MSR valuation adjustments (non-GAAP), increased
by $27.8 million over the previous quarter and $12.4 million over
the first quarter of 2019. The Company experienced strong balance
sheet growth as total assets were $2.2 billion higher than the
prior quarter end and $6.4 billion higher than the end of the first
quarter of 2019. The first quarter was characterized by significant
balance sheet growth, stable net interest income, strong mortgage
banking revenue, increased provision for credit losses primarily
related to the implementation of CECL and the economic conditions
created by the COVID-19 pandemic, and a continued focus to increase
franchise value in our market area."
Mr. Wehmer continued, "The Company grew total
loans by $1.0 billion in the current quarter with growth
diversified primarily across various loan portfolios including the
commercial, commercial real estate and life insurance premium
finance receivable portfolios. Management estimates that nearly
half of the growth in the commercial category during the quarter
was a result of customer draws on unfunded commitments primarily
occurring toward the end of the quarter. We have seen this activity
abate after quarter end. Total deposits increased by $1.4 billion
as compared to the fourth quarter of 2019 as strong retail deposit
growth, including growth in our MaxSafe product, was supplemented
by an increase in brokered deposits. Our loans to deposits ratio
ended the quarter at 88.4% and we are confident that we have
sufficient liquidity to meet customer loan demand."
Mr. Wehmer commented, "Despite one less day in
the quarter and modest net interest margin compression, net
interest income stayed relatively flat in the first quarter of 2020
as compared to the fourth quarter of 2019. We believe that
our ability to increase market share and grow the balance sheet
will continue to help mitigate the pressures presented by a lower
interest rate environment. The declining interest rate environment
contributed to a reduction in loan yields of 17 basis points;
however that impact was partially offset by a 13 basis point
improvement in the rate paid on interest bearing deposits. As
always, we will strive to grow without a commensurate increase in
expenses to enhance our net overhead ratio which was 1.33% in the
first quarter of 2020."
Mr. Wehmer noted, “Our mortgage banking business
delivered a record quarter in increased pipeline in light of the
demand associated with historically low long term interest rates.
Loan volumes originated for sale in the current quarter were $1.2
billion, similar to the fourth quarter of 2019. However, due
to record mortgage applications and interest rate lock volume near
the end of the quarter, mandatory commitments to fund mortgage
originations for sale were $1.4 billion at the end of the first
quarter of 2020 as compared to $372 million at the end of the
fourth quarter of 2019. Additionally, the Company recorded a
$10.4 million decrease in the value of mortgage servicing rights
related to changes in fair value model assumptions, net of
derivative contract activity held as an economic hedge. We are
leveraging efficiencies in our delivery channels and staffing
strategies to keep pace with unprecedented demand. We believe the
second quarter of 2020 will provide another strong quarter for
mortgage banking production."
Commenting on credit quality, Mr. Wehmer stated,
"The Company recorded net charge-offs of $5.3 million in the first
quarter of 2020 as compared to $12.7 million in the fourth quarter
of 2019. However, provision for credit losses totaled $53.0
million in the first quarter of 2020 as compared to $7.8 million in
the fourth quarter of 2019. The elevated provision expense in the
current quarter was primarily related to the implementation of the
CECL standard and the economic conditions created by the COVID-19
pandemic. Non-performing assets as of the current quarter end
totaled $190.4 million, an increase of $57.6 million from the
previous quarter end. Due to the adoption of CECL, $35.4
million of the $57.6 million increase relates to purchased
financial assets with credit deterioration that were not previously
required to be reported as non-performing assets but are now
included in non-performing assets. We believe that the Company’s
reserves remain appropriate and we remain diligent in our review of
credit."
Mindful of the challenges ahead, Mr Wehmer
noted, "We leverage robust capital and liquidity management
frameworks, which include stress testing processes, to assess and
monitor risk and inform decision making. We believe the Company has
adequate liquidity and capital to effectively manage through the
COVID-19 pandemic. However, we will continue to prudently evaluate
and expand liquidity sources, including the possible utilization of
the PPP liquidity facility, if necessary."
Mr. Wehmer continued, "Wintrust will continue to
practice what we preach in our unwavering commitment to our
communities by serving customers via drive up branches, by
appointment, telephonically and through digital tools. We believe
that we are uniquely positioned by being technologically on par
with the big banks, as demonstrated by our PPP efforts, while
maintaining the agility and high-touch, personalized service nature
of a community bank. We have executed our existing business
continuity plan successfully across the Wintrust enterprise and I
am proud of our Company's effectiveness in seamlessly adapting to a
remote working environment. In addition to our efforts to support
our customers, we are also focused on the wellbeing of our
colleagues, modifying certain health care programs to provide
additional benefits during the COVID-19 pandemic, as well as
offering other pandemic benefits and compensation premiums to
eligible employees."
Mr. Wehmer concluded, "We have experienced
significant growth in recent quarters and believe that our
opportunities for both internal and external growth remain
consistently strong, while we continue to carefully monitor the
COVID-19 pandemic and evaluate the impact that it could have on the
economy, our customers and our business. We remain focused on
navigating the current environment by actively monitoring and
managing our credit portfolio."
Graphs available at the following link:
http://ml.globenewswire.com/Resource/Download/828bdbfd-a9ad-4684-b6e6-46d21509f781
SUMMARY OF RESULTS:
BALANCE SHEET
Total asset growth of $2.2 billion in the first
quarter of 2020 was primarily comprised of a $1.0 billion increase
in loans and a $465 million increase in available for sale
securities. The Company believes that the $1.9 billion of interest
bearing deposits with banks held as of March 31, 2020 provides
sufficient liquidity to operate its business plan.
Total liabilities grew by $2.2 billion in the
first quarter of 2020 primarily comprised of a $1.4 billion
increase in total deposits. The Company successfully grew deposits
in the first quarter through organic retail channels, including
$282.7 million of growth in our MaxSafe products, that was
supplemented by an increase in brokered deposits. Our loans to
deposits ratio ended the quarter at 88.4%. Management believes in
substantially funding the Company's balance sheet with core
deposits and utilizes brokered or wholesale funding sources as
appropriate to manage its liquidity position as well as for
interest rate risk management purposes.
For more information regarding changes in the
Company’s balance sheet, see Consolidated Statements of Condition
and Tables 1 through 3 in this report.
NET INTEREST INCOME
For the first quarter of 2020, net interest
income totaled $261.4 million, a decrease of $436,000 as compared
to the fourth quarter of 2019 and a decrease of $543,000 as
compared to the first quarter of 2019. The $436,000 decrease in net
interest income in the first quarter of 2020 compared to the fourth
quarter of 2019 was attributable to the impact of a five basis
point decline in net interest margin and one less day. This
impact was partially offset by $924.8 million of growth in average
earning assets.
Net interest margin was 3.12% (3.14% on a fully
taxable-equivalent basis, non-GAAP) during the first quarter of
2020 compared to 3.17% (3.19% on a fully taxable-equivalent basis,
non-GAAP) during the fourth quarter of 2019 and 3.70% (3.72% on a
fully taxable-equivalent basis, non-GAAP) during the first quarter
of 2019. The five basis point decrease in net interest margin in
the first quarter of 2020 as compared to the fourth quarter of 2019
was attributable to a 12 basis point decline in the yield on
earnings assets and a four basis point decrease in the net free
funds contribution partially offset by an 11 basis point decrease
in the rate paid on interest bearing liabilities. The 12 basis
point decline in the yield on earning assets in the current quarter
as compared to the fourth quarter of 2019 was primarily due to a 17
basis point decline in the yield on loans along with lower yields
on interest bearing cash. The 11 basis point decrease in the rate
paid on interest bearing liabilities in the current quarter as
compared to the prior quarter is primarily due to a 13 basis point
decrease in the rate paid on interest bearing deposits as
management initiated various deposit rate reductions given the
recent decrease in the interest rate environment.
For more information regarding net interest
income, see Tables 4 through 8 in this report.
ASSET QUALITY
The allowance for credit losses totaled $253.5
million as of March 31, 2020 an increase of $95.0 million as
compared to $158.5 million as of December 31, 2019. The increase in
allowance for credit losses includes a $47.4 million increase
related to the cumulative effect adjustment from the adoption of
the CECL standard on January 1, 2020.
The provision for credit losses totaled $53.0
million for the first quarter of 2020 compared to $7.8 million for
the fourth quarter of 2019 and $10.6 million for the first quarter
of 2019. The elevated provision expense in the current
quarter was primarily related to the implementation of the CECL
standard and the economic conditions created by the COVID-19
pandemic. Management believes the allowance for credit losses is
appropriate to provide for inherent losses in the portfolio. The
CECL standard requires the Company to estimate expected credit
losses over the life of the Company’s financial assets at a certain
point in time. There can be no assurances, however, that
future losses will not significantly exceed the amounts provided
for, thereby affecting future results of operations. For more
information regarding the provision for credit losses, see Table 10
in this report.
Net charge-offs totaled $5.3 million in the
first quarter of 2020, a $7.4 million decrease from $12.7 million
in the fourth quarter of 2019 and a $146,000 increase from $5.1
million in the first quarter of 2019. Net charge-offs as a
percentage of average total loans, in the first quarter of 2020
totaled eight basis points on an annualized basis compared to 19
basis points on an annualized basis in the fourth quarter of 2019
and nine basis points on an annualized basis in the first quarter
of 2019. For more information regarding net charge-offs, see Table
9 in this report.
As part of the regular 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, niche and consumer
loans and purchased loans. A summary of the allowance for loan
losses calculated for the loan components in the core loan
portfolio, the niche and consumer loan portfolio and purchased loan
portfolio as of March 31, 2020 and December 31, 2019 is
shown on Table 11 of this report.
As of March 31, 2020, $33.0 million of all
loans, or 0.1%, were 60 to 89 days past due and $262.7 million, or
0.9%, were 30 to 59 days (or one payment) past due. As of
December 31, 2019, $50.5 million of all loans, or 0.2%, were
60 to 89 days past due and $248.2 million, or 0.9%, were 30 to 59
days (or one payment) past due. Many 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 rates as of March
31, 2020. Home equity loans at March 31, 2020 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, 2020 that are current with
regards to the contractual terms of the loan agreements comprised
96.4% of total residential real estate loans outstanding. For more
information regarding past due loans, see Table 12 in this
report.
Prior to January 1, 2020, purchased credit
impaired ("PCI") loans were aggregated into pools by common risk
characteristics for accounting purposes, including recognition of
interest income on a pool basis. Measurement of any allowance for
loan losses on these loans were offset by the remaining discount
related to the pool. As a result of the implementation of
CECL, beginning in the first quarter of 2020, PCI loans
transitioned to a classification of purchased financial assets with
credit deterioration ("PCD"), which no longer maintains the prior
pools and related accounting concepts. Measurement of any allowance
for loan losses on PCD loans is no longer offset by the remaining
discount, resulting in additional allowance being recognized at
January 1, 2020 through a cumulative effect adjustment to retained
earnings. See Table 9 for information on this increase at
transition. Additionally, recognition of interest income on PCD
loans is considered at the individual asset level following the
Company's accrual policies, instead of based upon the entire pool
of loans. Due to the first quarter of 2020 adoption of CECL,
the Company included $35.4 million in non-performing PCD loans in
total non-performing loans as of March 31, 2020.
The ratio of non-performing assets, excluding
PCD assets, to total assets was 0.40% as of March 31, 2020,
compared to 0.36% at December 31, 2019, and 0.43% at
March 31, 2019. Non-performing assets, excluding PCD assets,
totaled $155.0 million at March 31, 2020, compared to $132.8
million at December 31, 2019 and $139.4 million at
March 31, 2019. Non-performing loans, excluding PCD loans,
totaled $143.9 million, or 0.53% of total loans, at March 31,
2020 compared to $117.6 million, or 0.44% of total loans, at
December 31, 2019 and $117.6 million, or 0.49% of total loans,
at March 31, 2019. This increase includes a $5.0 million
increase in premium finance receivable balances that are past due
greater than 90 days and still accruing. The level of past due
premium finance receivables is impacted by emergency orders issued
by states which extend the grace period for nonpayment of insurance
premiums to carriers. Other real estate owned ("OREO") of $11.0
million at March 31, 2020 decreased by $4.2 million compared
to $15.2 million at December 31, 2019 and decreased $10.5
million compared to $21.5 million at March 31, 2019.
Management is pursuing the resolution of all non-performing assets.
At this time, management believes OREO is appropriately valued at
the lower of carrying value or fair value less estimated costs to
sell. For more information regarding non-performing assets, see
Table 13 in this report.
NON-INTEREST INCOME
Wealth management revenue increased by $942,000
during the first quarter of 2020 as compared to the fourth quarter
of 2019 primarily due to increased trust fees and brokerage
commissions. Wealth management revenue is comprised of the trust
and asset management revenue of The Chicago Trust Company and Great
Lakes Advisors, the brokerage commissions, managed money fees and
insurance product commissions at Wintrust Investments and fees from
tax-deferred like-kind exchange services provided by the Chicago
Deferred Exchange Company.
Mortgage banking revenue increased by $466,000
in the first quarter of 2020 as compared to the fourth quarter of
2019, primarily as a result of increased derivative income
associated with mandatory commitments to fund originations for
sale, partially offset by a decrease in the fair value of the
mortgage servicing rights portfolio. Mandatory commitments to
fund originations for sale were $1.4 billion at the end of the
first quarter of 2020 as compared to $372.4 million at the end of
the fourth quarter of 2019. The percentage of origination volume
from refinancing activities was 63% in the first quarter of 2020 as
compared to 60% in the fourth quarter of 2019. Mortgage banking
revenue includes revenue from activities related to originating,
selling and servicing residential real estate loans for the
secondary market.
During the first quarter of 2020, the fair value
of the mortgage servicing rights portfolio decreased primarily due
to a negative fair value adjustment of $14.6 million as well as a
reduction in value of $7.0 million due to payoffs and paydowns of
the existing portfolio. The Company entered into interest rate
swaps at the beginning of the fourth quarter of 2019 to
economically hedge a portion of the potential negative fair value
changes recorded in earnings related to its mortgage servicing
rights portfolio. The Company recorded a gain of $4.2 million on
the interest rate swaps held as economic hedges against the
mortgage servicing rights primarily related to the mark to market
valuation adjustment at quarter end which was recorded in mortgage
banking revenue.
The net losses recognized on investment
securities in the first quarter of 2020 were $4.4 million as
compared to a gain of $587,000 in the fourth quarter of 2019. The
losses recorded in the first quarter of 2020 primarily relate to
unrealized losses on market sensitive securities held by the
Company.
Other non-interest income increased by $4.2
million in the first quarter of 2020 as compared to the fourth
quarter of 2019 primarily due to increased income from
interest rate swap fees and net gains related to the sales of loans
and leases. These increases were partially offset by market losses
on BOLI investments related to non-qualified deferred compensation
accounts recorded in BOLI income.
For more information regarding non-interest
income, see Tables 14 and 15 in this report.
NON-INTEREST EXPENSE
Salaries and employee benefits expense decreased
by $9.2 million in the first quarter of 2020 as compared to the
fourth quarter of 2019. The $9.2 million decrease is comprised of a
decrease of $8.7 million in commissions and incentive compensation
and a decrease of $1.6 million in salaries expense partially offset
by $1.1 million increase in employee benefits expense. The decrease
in commissions and incentive compensation is primarily due to lower
expenses associated with the Company's long term incentive
program.
Data processing expenses totaled $8.4 million in
the first quarter of 2020, an increase of $804,000 as compared to
the fourth quarter of 2019. The increase in the current quarter
relates primarily to conversion costs associated with the
Countryside Bank acquisition.
Advertising and marketing expenses in the first
quarter of 2020 decreased by $1.7 million as compared to the fourth
quarter of 2019 primarily related to lower media advertising costs.
Marketing costs are incurred to promote the Company's brand,
commercial banking capabilities, the Company's various products, to
attract loans and deposits and to announce new branch openings as
well as the expansion of the Company's non-bank businesses. The
level of marketing expenditures depends on the timing of
sponsorship programs utilized which are determined based on the
market area, targeted audience, competition and various other
factors.
FDIC insurance expense totaled $4.1 million in
the first quarter of 2020, an increase of $2.8 million as compared
to the fourth quarter of 2019. In the prior quarter, the Company
recorded a $2.8 million reduction to FDIC insurance expense related
to assessment credits received from the FDIC.
In the first quarter of 2020, the Company
recorded a $1.3 million gain on sale of an OREO property resulting
in net OREO income of $876,000 in the first quarter of 2020. This
compares to OREO expense of $536,000 in the prior quarter.
Miscellaneous expense in the first quarter of
2020 decreased $5.3 million as compared to the fourth quarter
of 2019. The decrease in the current quarter as compared to the
fourth quarter of 2019 is primarily due to charges recognized in
the fourth quarter including a litigation settlement, contingent
consideration related to previous acquisitions of certain mortgage
businesses and overlapping telecommunication charges. 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.
For more information regarding non-interest
expense, see Table 16 in this report.
INCOME TAXES
The Company recorded income tax expense of $24.3
million in the first quarter of 2020 compared to $30.7 million in
the fourth quarter of 2019 and $29.5 million in the first quarter
of 2019. The effective tax rates were 27.87% in the first quarter
of 2020 compared to 26.33% in the fourth quarter of 2019 and 24.86%
in the first quarter of 2019.
BUSINESS UNIT SUMMARY
Community Banking
Through its community banking unit, the Company
provides banking and financial services primarily to individuals,
small to mid-sized businesses, local governmental units and
institutional clients residing primarily in the local areas the
Company services. In the first quarter of 2020, this unit expanded
its loan and deposit portfolios. However, the banking segment
also experienced net interest margin compression in part due to
current market conditions.
Mortgage banking revenue was $48.3 million for
the first quarter of 2020 an increase from $47.9 million for the
fourth quarter of 2019. Services charges on deposit accounts
totaled $11.3 million in the first quarter of 2020 an increase of
$292,000 as compared to the fourth quarter of 2019 primarily due to
higher account analysis fees. The Company's gross commercial and
commercial real estate loan pipelines remained strong as of March
31, 2020. Before the impact of scheduled payments and prepayments,
gross commercial and commercial real estate loan pipelines were
estimated to be approximately $1.0 billion to $1.1 billion at
March 31, 2020. When adjusted for the probability of closing,
the pipelines were estimated to be approximately $590 million to
$650 million at March 31, 2020.
Specialty Finance
Through its specialty finance unit, the Company
offers financing of insurance premiums for businesses and
individuals, equipment financing through structured loans and lease
products to customers in a variety of industries and accounts
receivable financing, value-added, out-sourced administrative
services, and other services. Originations within the insurance
premium financing receivables portfolio were $2.5 billion during
the first quarter of 2020 and average balances increased by $231.4
million as compared to the fourth quarter of 2019. The increase in
average balances was more than offset by margin compression in this
portfolio resulting in a $3.0 million decrease in interest income
attributed to the lower market rates of interest associated with
the insurance premium finance receivables portfolio. The Company's
leasing business grew during the first quarter of 2020, with its
portfolio of assets, including capital leases, loans and equipment
on operating leases, increasing by $174.4 million to $1.8 billion
at the end of the first quarter of 2020. Revenues from the
Company's out-sourced administrative services business were $1.1
million in the first quarter of 2020, unchanged from the fourth
quarter of 2019.
Wealth Management
Through four separate subsidiaries within its
wealth management unit, the Company offers a full range of wealth
management services, including trust and investment services,
tax-deferred like-kind exchange services, asset management,
securities brokerage services and 401(k) and retirement plan
services. Wealth management revenue increased by $942,000 in the
first quarter of 2020 compared to the fourth quarter of 2019,
totaling $25.9 million in the current period. At March 31,
2020, the Company’s wealth management subsidiaries had
approximately $25.0 billion of assets under administration, which
included $4.8 billion of assets owned by the Company and its
subsidiary banks, representing a $2.6 billion decrease from the
$27.6 billion of assets under administration at December 31,
2019. Increased trust fees contributed to the growth in wealth
management revenue, while unfavorable equity market performance in
the first quarter of 2020 contributed to the decline of assets
under administration.
ITEMS IMPACTING COMPARATIVE FINANCIAL
RESULTS
Acquisitions
On November 1, 2019, the Company completed its
acquisition of SBC, Incorporated (“SBC”). SBC was the parent
company of Countryside Bank. Through this business combination, the
Company acquired Countryside Bank's six banking offices located in
Countryside, Burbank, Darien, Homer Glen, Oak Brook and Chicago,
Illinois. As of the acquisition date, the Company acquired
approximately $620 million in assets, including approximately $423
million in loans, and approximately $508 million in deposits. The
Company recorded goodwill of approximately $40 million on the
acquisition.
On October 7, 2019, the Company completed its
acquisition of STC Bancshares Corp. (“STC”). STC was the
parent company of STC Capital Bank. Through this business
combination, the Company acquired STC Capital Bank's five banking
offices located in the communities of St. Charles, Geneva and South
Elgin, Illinois. As of the acquisition date, the Company acquired
approximately $250 million in assets, including approximately $174
million in loans, and approximately $201 million in
deposits. The Company recorded goodwill of approximately $19
million on the acquisition.
On May 24, 2019, the Company completed its
acquisition of Rush-Oak Corporation ("ROC"). ROC was the parent
company of Oak Bank. Through this business combination, the Company
acquired Oak Bank's one banking location in Chicago, Illinois. As
of the acquisition date, the Company acquired approximately $223
million in assets, including approximately $125 million in loans,
and approximately $161 million in deposits. The Company recorded
goodwill of approximately $12 million on the acquisition.
Adoption of New Credit Losses Accounting
Standard
Beginning in 2020, the Company adopted the new
current expected credit losses standard, or CECL, which impacted
the measurement of the Company’s allowance for credit losses
(including the allowance for unfunded lending-related commitments).
CECL replaced the previous incurred loss methodology, which delayed
recognition until such loss was probable, with a methodology that
reflects an estimate of lifetime expected credit losses considering
current economic condition and forecasts. Though other assets,
including investment securities and other receivables, were
considered in-scope of the standard and required a measurement of
the allowance for credit loss, the most significant impact of CECL
remains within the Company’s loan portfolios and related lending
commitments. For more information regarding the adoption of CECL,
see the "Asset Quality" section and the asset quality Tables 9-13
in this report.
WINTRUST FINANCIAL CORPORATION
Key
Operating Measures
Wintrust’s key operating measures and growth
rates for the first quarter of 2020, as compared to the fourth
quarter of 2019 (sequential quarter) and first quarter of 2019
(linked quarter), are shown in the table below:
|
|
|
|
|
|
|
% or(4)
basis point (bp)
change from 4th
Quarter 2019 |
|
% or basis point
(bp) change from 1st
Quarter 2019 |
|
|
Three Months Ended |
|
(Dollars in thousands, except per share data) |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Mar 31, 2019 |
|
Net
income |
|
$ |
62,812 |
|
|
$ |
85,964 |
|
|
$ |
89,146 |
|
(27 |
) |
% |
|
(30 |
) |
% |
Pre-tax
income, excluding provision for credit losses (non-GAAP)
(2) |
|
140,044 |
|
|
124,508 |
|
|
129,269 |
|
12 |
|
|
|
8 |
|
|
Pre-tax
income, excluding provision for credit losses and MSR valuation
adjustments (non-GAAP) (2) |
|
150,441 |
|
|
122,662 |
|
|
138,013 |
|
23 |
|
|
|
9 |
|
|
Net
income per common share – diluted |
|
1.04 |
|
|
1.44 |
|
|
1.52 |
|
(28 |
) |
|
|
(32 |
) |
|
Net
revenue (1) |
|
374,685 |
|
|
374,099 |
|
|
343,643 |
|
— |
|
|
|
9 |
|
|
Net
interest income |
|
261,443 |
|
|
261,879 |
|
|
261,986 |
|
— |
|
|
|
— |
|
|
Net
interest margin |
|
3.12 |
% |
|
3.17 |
% |
|
3.70 |
% |
(5 |
) |
bp |
|
(58 |
) |
bp |
Net
interest margin - fully taxable equivalent (non-GAAP)
(2) |
|
3.14 |
|
|
3.19 |
|
|
3.72 |
|
(5 |
) |
|
|
(58 |
) |
|
Net
overhead ratio (3) |
|
1.33 |
|
|
1.53 |
|
|
1.72 |
|
(20 |
) |
|
|
(39 |
) |
|
Return on
average assets |
|
0.69 |
|
|
0.96 |
|
|
1.16 |
|
(27 |
) |
|
|
(47 |
) |
|
Return on
average common equity |
|
6.82 |
|
|
9.52 |
|
|
11.09 |
|
(270 |
) |
|
|
(427 |
) |
|
Return on average tangible common equity (non-GAAP)
(2) |
|
8.73 |
|
|
12.17 |
|
|
14.14 |
|
(344 |
) |
|
|
(541 |
) |
|
At end of period |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
32,358,621 |
|
24 |
|
% |
|
20 |
|
% |
Total
loans (5) |
|
27,807,321 |
|
|
26,800,290 |
|
|
24,214,629 |
|
15 |
|
|
|
15 |
|
|
Total
deposits |
|
31,461,660 |
|
|
30,107,138 |
|
|
26,804,742 |
|
18 |
|
|
|
17 |
|
|
Total shareholders’ equity |
|
3,700,393 |
|
|
3,691,250 |
|
|
3,371,972 |
|
1 |
|
|
|
10 |
|
|
(1) Net revenue is net interest income plus non-interest
income.
(2) See "Supplemental Non-GAAP Financial
Measures/Ratios" at Table 17 for additional information on this
performance measure/ratio.
(3) The net overhead ratio
is calculated by netting total non-interest expense and total
non-interest income, annualizing this amount, and dividing by that
period's average total assets. A lower ratio indicates a higher
degree of efficiency.
(4) Period-end balance sheet
percentage changes are annualized.
(5) Excludes
mortgage loans held-for-sale.
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 website at www.wintrust.com by choosing “Financial
Reports” under the “Investor Relations” heading, and then choosing
“Financial Highlights.”
WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights
|
|
Three Months Ended |
(Dollars in thousands, except per share data) |
|
|
Mar 31,
2020 |
|
|
|
Dec 31,
2019 |
|
|
|
Sep 30,
2019 |
|
|
|
Jun 30,
2019 |
|
|
|
Mar 31,
2019 |
|
Selected Financial Condition Data (at end of
period): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
|
$ |
32,358,621 |
|
Total
loans (1) |
|
27,807,321 |
|
|
26,800,290 |
|
|
25,710,171 |
|
|
25,304,659 |
|
|
24,214,629 |
|
Total
deposits |
|
31,461,660 |
|
|
30,107,138 |
|
|
28,710,379 |
|
|
27,518,815 |
|
|
26,804,742 |
|
Junior
subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
Total shareholders’ equity |
|
3,700,393 |
|
|
3,691,250 |
|
|
3,540,325 |
|
|
3,446,950 |
|
|
3,371,972 |
|
Selected Statements of Income Data: |
Net
interest income |
|
$ |
261,443 |
|
|
$ |
261,879 |
|
|
$ |
264,852 |
|
|
$ |
266,202 |
|
|
$ |
261,986 |
|
Net
revenue (2) |
|
374,685 |
|
|
374,099 |
|
|
379,989 |
|
|
364,360 |
|
|
343,643 |
|
Net
income |
|
62,812 |
|
|
85,964 |
|
|
99,121 |
|
|
81,466 |
|
|
89,146 |
|
Pre-tax
income, excluding provision for credit losses (non-GAAP)
(3) |
|
140,044 |
|
|
124,508 |
|
|
145,435 |
|
|
134,753 |
|
|
129,269 |
|
Pre-tax
income, excluding provision for credit losses and MSR valuation
adjustments (non-GAAP) (3) |
|
150,441 |
|
|
122,662 |
|
|
149,411 |
|
|
138,138 |
|
|
138,013 |
|
Net
income per common share – Basic |
|
1.05 |
|
|
1.46 |
|
|
1.71 |
|
|
1.40 |
|
|
1.54 |
|
Net income per common share – Diluted |
|
1.04 |
|
|
1.44 |
|
|
1.69 |
|
|
1.38 |
|
|
1.52 |
|
Selected Financial Ratios and Other Data: |
Performance Ratios: |
Net
interest margin |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
|
3.62 |
% |
|
3.70 |
% |
Net
interest margin - fully taxable equivalent (non-GAAP)
(3) |
|
3.14 |
|
|
3.19 |
|
|
3.39 |
|
|
3.64 |
|
|
3.72 |
|
Non-interest income to average assets |
|
1.24 |
|
|
1.25 |
|
|
1.35 |
|
|
1.23 |
|
|
1.06 |
|
Non-interest expense to average assets |
|
2.58 |
|
|
2.78 |
|
|
2.74 |
|
|
2.87 |
|
|
2.79 |
|
Net
overhead ratio (4) |
|
1.33 |
|
|
1.53 |
|
|
1.40 |
|
|
1.64 |
|
|
1.72 |
|
Return on
average assets |
|
0.69 |
|
|
0.96 |
|
|
1.16 |
|
|
1.02 |
|
|
1.16 |
|
Return on
average common equity |
|
6.82 |
|
|
9.52 |
|
|
11.42 |
|
|
9.68 |
|
|
11.09 |
|
Return on
average tangible common equity (non-GAAP) (3) |
|
8.73 |
|
|
12.17 |
|
|
14.36 |
|
|
12.28 |
|
|
14.14 |
|
Average
total assets |
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
$ |
32,055,769 |
|
|
$ |
31,216,171 |
|
Average
total shareholders’ equity |
|
3,710,169 |
|
|
3,622,184 |
|
|
3,496,714 |
|
|
3,414,340 |
|
|
3,309,078 |
|
Average
loans to average deposits ratio |
|
90.1 |
% |
|
88.8 |
% |
|
90.6 |
% |
|
93.9 |
% |
|
92.7 |
% |
Period-end loans to deposits ratio |
|
88.4 |
|
|
89.0 |
|
|
89.6 |
|
|
92.0 |
|
|
90.3 |
|
Common Share Data at end of period: |
Market
price per common share |
|
$ |
32.86 |
|
|
$ |
70.90 |
|
|
$ |
64.63 |
|
|
$ |
73.16 |
|
|
$ |
67.33 |
|
Book
value per common share |
|
62.13 |
|
|
61.68 |
|
|
60.24 |
|
|
58.62 |
|
|
57.33 |
|
Tangible
book value per common share (non-GAAP) (3) |
|
50.18 |
|
|
49.70 |
|
|
49.16 |
|
|
47.48 |
|
|
46.38 |
|
Common shares outstanding |
|
57,545,352 |
|
|
57,821,891 |
|
|
56,698,429 |
|
|
56,667,846 |
|
|
56,638,968 |
|
Other Data at end of period: |
Tier 1
leverage ratio (5) |
|
8.5 |
% |
|
8.7 |
% |
|
8.8 |
% |
|
9.1 |
% |
|
9.1 |
% |
Risk-based capital ratios: |
|
|
|
|
|
|
|
|
|
|
Tier 1
capital ratio (5) |
|
9.3 |
|
|
9.6 |
|
|
9.7 |
|
|
9.6 |
|
|
9.8 |
|
Common
equity tier 1 capital ratio(5) |
|
8.9 |
|
|
9.2 |
|
|
9.3 |
|
|
9.2 |
|
|
9.3 |
|
Total
capital ratio (5) |
|
11.9 |
|
|
12.2 |
|
|
12.4 |
|
|
12.4 |
|
|
11.7 |
|
Allowance
for credit losses (6) |
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
|
$ |
159,622 |
|
Allowance
for loan and unfunded lending-related commitment losses to total
loans |
|
0.91 |
% |
|
0.59 |
% |
|
0.64 |
% |
|
0.64 |
% |
|
0.66 |
% |
Number
of: |
|
|
|
|
|
|
|
|
|
|
Bank subsidiaries |
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
Banking offices |
|
187 |
|
|
187 |
|
|
174 |
|
|
172 |
|
|
170 |
|
(1) Excludes mortgage loans held-for-sale.
(2)
Net revenue includes net interest income and non-interest
income.
(3) See “Supplemental Non-GAAP Financial
Measures/Ratios” at Table 17 for additional information on this
performance measure/ratio.
(4) 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.
(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.Effective
January 1, 2020, the allowance for credit losses also includes the
allowance for investment securities as a result of the adoption of
Accounting Standard Update ("ASU") 2016-13, Financial Instruments -
Credit Losses.
WINTRUST FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
|
|
Mar 31, |
|
|
|
Dec 31, |
|
|
|
Sep 30, |
|
|
|
Jun 30, |
|
|
|
Mar 31, |
|
(In thousands) |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
349,118 |
|
|
$ |
286,167 |
|
|
$ |
448,755 |
|
|
$ |
300,934 |
|
|
$ |
270,765 |
|
Federal funds sold and securities purchased under resale
agreements |
|
309 |
|
|
309 |
|
|
59 |
|
|
58 |
|
|
58 |
|
Interest bearing deposits with banks |
|
1,943,743 |
|
|
2,164,560 |
|
|
2,260,806 |
|
|
1,437,105 |
|
|
1,609,852 |
|
Available-for-sale securities, at fair value |
|
3,570,959 |
|
|
3,106,214 |
|
|
2,270,059 |
|
|
2,186,154 |
|
|
2,185,782 |
|
Held-to-maturity securities, at amortized cost |
|
865,376 |
|
|
1,134,400 |
|
|
1,095,802 |
|
|
1,191,634 |
|
|
1,051,542 |
|
Trading account securities |
|
2,257 |
|
|
1,068 |
|
|
3,204 |
|
|
2,430 |
|
|
559 |
|
Equity securities with readily determinable fair value |
|
47,310 |
|
|
50,840 |
|
|
46,086 |
|
|
44,319 |
|
|
47,653 |
|
Federal Home Loan Bank and Federal Reserve Bank stock |
|
134,546 |
|
|
100,739 |
|
|
92,714 |
|
|
92,026 |
|
|
89,013 |
|
Brokerage customer receivables |
|
16,293 |
|
|
16,573 |
|
|
14,943 |
|
|
13,569 |
|
|
14,219 |
|
Mortgage loans held-for-sale |
|
656,934 |
|
|
377,313 |
|
|
464,727 |
|
|
394,975 |
|
|
248,557 |
|
Loans, net of unearned income |
|
27,807,321 |
|
|
26,800,290 |
|
|
25,710,171 |
|
|
25,304,659 |
|
|
24,214,629 |
|
Allowance for loan losses |
|
(216,050 |
) |
|
(156,828 |
) |
|
(161,763 |
) |
|
(160,421 |
) |
|
(158,212 |
) |
Net loans |
|
27,591,271 |
|
|
26,643,462 |
|
|
25,548,408 |
|
|
25,144,238 |
|
|
24,056,417 |
|
Premises and equipment, net |
|
764,583 |
|
|
754,328 |
|
|
721,856 |
|
|
711,214 |
|
|
676,037 |
|
Lease investments, net |
|
207,147 |
|
|
231,192 |
|
|
228,647 |
|
|
230,111 |
|
|
224,240 |
|
Accrued interest receivable and other assets |
|
1,460,168 |
|
|
1,061,141 |
|
|
1,087,864 |
|
|
1,023,896 |
|
|
888,492 |
|
Trade date securities receivable |
|
502,207 |
|
|
— |
|
|
— |
|
|
237,607 |
|
|
375,211 |
|
Goodwill |
|
643,441 |
|
|
645,220 |
|
|
584,315 |
|
|
584,911 |
|
|
573,658 |
|
Other intangible assets |
|
44,185 |
|
|
47,057 |
|
|
43,657 |
|
|
46,588 |
|
|
46,566 |
|
Total assets |
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
|
$ |
32,358,621 |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
$ |
7,556,755 |
|
|
$ |
7,216,758 |
|
|
$ |
7,067,960 |
|
|
$ |
6,719,958 |
|
|
$ |
6,353,456 |
|
Interest bearing |
|
23,904,905 |
|
|
22,890,380 |
|
|
21,642,419 |
|
|
20,798,857 |
|
|
20,451,286 |
|
Total deposits |
|
31,461,660 |
|
|
30,107,138 |
|
|
28,710,379 |
|
|
27,518,815 |
|
|
26,804,742 |
|
Federal Home Loan Bank advances |
|
1,174,894 |
|
|
674,870 |
|
|
574,847 |
|
|
574,823 |
|
|
576,353 |
|
Other borrowings |
|
487,503 |
|
|
418,174 |
|
|
410,488 |
|
|
418,057 |
|
|
372,194 |
|
Subordinated notes |
|
436,179 |
|
|
436,095 |
|
|
435,979 |
|
|
436,021 |
|
|
139,235 |
|
Junior subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
Trade date securities payable |
|
— |
|
|
— |
|
|
226 |
|
|
— |
|
|
— |
|
Accrued interest payable and other liabilities |
|
1,285,652 |
|
|
1,039,490 |
|
|
986,092 |
|
|
993,537 |
|
|
840,559 |
|
Total liabilities |
|
35,099,454 |
|
|
32,929,333 |
|
|
31,371,577 |
|
|
30,194,819 |
|
|
28,986,649 |
|
Shareholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
125,000 |
|
|
125,000 |
|
|
125,000 |
|
|
125,000 |
|
|
125,000 |
|
Common stock |
|
58,266 |
|
|
57,951 |
|
|
56,825 |
|
|
56,794 |
|
|
56,765 |
|
Surplus |
|
1,652,063 |
|
|
1,650,278 |
|
|
1,574,011 |
|
|
1,569,969 |
|
|
1,565,185 |
|
Treasury stock |
|
(44,891 |
) |
|
(6,931 |
) |
|
(6,799 |
) |
|
(6,650 |
) |
|
(6,650 |
) |
Retained earnings |
|
1,917,558 |
|
|
1,899,630 |
|
|
1,830,165 |
|
|
1,747,266 |
|
|
1,682,016 |
|
Accumulated other comprehensive loss |
|
(7,603 |
) |
|
(34,678 |
) |
|
(38,877 |
) |
|
(45,429 |
) |
|
(50,344 |
) |
Total shareholders’ equity |
|
3,700,393 |
|
|
3,691,250 |
|
|
3,540,325 |
|
|
3,446,950 |
|
|
3,371,972 |
|
Total liabilities and shareholders’
equity |
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
|
$ |
32,358,621 |
|
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
Three Months Ended |
(In thousands, except per share data) |
|
Mar 31,
2020 |
|
|
|
Dec 31,
2019 |
|
|
|
Sep 30,
2019 |
|
|
|
Jun 30,
2019 |
|
|
|
Mar 31,
2019 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
301,839 |
|
|
$ |
308,055 |
|
|
$ |
314,277 |
|
|
$ |
309,161 |
|
|
$ |
296,987 |
|
Mortgage loans held-for-sale |
3,165 |
|
|
3,201 |
|
|
3,478 |
|
|
3,104 |
|
|
2,209 |
|
Interest bearing deposits with banks |
4,768 |
|
|
8,971 |
|
|
10,326 |
|
|
5,206 |
|
|
5,300 |
|
Federal funds sold and securities purchased under resale
agreements |
86 |
|
|
390 |
|
|
310 |
|
|
— |
|
|
— |
|
Investment securities |
32,467 |
|
|
27,611 |
|
|
24,758 |
|
|
27,721 |
|
|
27,956 |
|
Trading account securities |
7 |
|
|
6 |
|
|
20 |
|
|
5 |
|
|
8 |
|
Federal Home Loan Bank and Federal Reserve Bank stock |
1,577 |
|
|
1,328 |
|
|
1,294 |
|
|
1,439 |
|
|
1,355 |
|
Brokerage customer receivables |
158 |
|
|
169 |
|
|
164 |
|
|
178 |
|
|
155 |
|
Total interest income |
344,067 |
|
|
349,731 |
|
|
354,627 |
|
|
346,814 |
|
|
333,970 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
Interest on deposits |
67,435 |
|
|
74,724 |
|
|
76,168 |
|
|
67,024 |
|
|
60,976 |
|
Interest on Federal Home Loan Bank advances |
3,360 |
|
|
1,461 |
|
|
1,774 |
|
|
4,193 |
|
|
2,450 |
|
Interest on other borrowings |
3,546 |
|
|
3,273 |
|
|
3,466 |
|
|
3,525 |
|
|
3,633 |
|
Interest on subordinated notes |
5,472 |
|
|
5,504 |
|
|
5,470 |
|
|
2,806 |
|
|
1,775 |
|
Interest on junior subordinated debentures |
2,811 |
|
|
2,890 |
|
|
2,897 |
|
|
3,064 |
|
|
3,150 |
|
Total interest expense |
82,624 |
|
|
87,852 |
|
|
89,775 |
|
|
80,612 |
|
|
71,984 |
|
Net interest income |
261,443 |
|
|
261,879 |
|
|
264,852 |
|
|
266,202 |
|
|
261,986 |
|
Provision for credit losses |
52,961 |
|
|
7,826 |
|
|
10,834 |
|
|
24,580 |
|
|
10,624 |
|
Net interest income after provision for credit losses |
208,482 |
|
|
254,053 |
|
|
254,018 |
|
|
241,622 |
|
|
251,362 |
|
Non-interest income |
|
|
|
|
|
|
|
|
|
Wealth management |
25,941 |
|
|
24,999 |
|
|
23,999 |
|
|
24,139 |
|
|
23,977 |
|
Mortgage banking |
48,326 |
|
|
47,860 |
|
|
50,864 |
|
|
37,411 |
|
|
18,158 |
|
Service charges on deposit accounts |
11,265 |
|
|
10,973 |
|
|
9,972 |
|
|
9,277 |
|
|
8,848 |
|
(Losses) gains on investment securities, net |
(4,359 |
) |
|
587 |
|
|
710 |
|
|
864 |
|
|
1,364 |
|
Fees from covered call options |
2,292 |
|
|
1,243 |
|
|
— |
|
|
643 |
|
|
1,784 |
|
Trading (losses) gains, net |
(451 |
) |
|
46 |
|
|
11 |
|
|
(44 |
) |
|
(171 |
) |
Operating lease income, net |
11,984 |
|
|
12,487 |
|
|
12,025 |
|
|
11,733 |
|
|
10,796 |
|
Other |
18,244 |
|
|
14,025 |
|
|
17,556 |
|
|
14,135 |
|
|
16,901 |
|
Total non-interest income |
113,242 |
|
|
112,220 |
|
|
115,137 |
|
|
98,158 |
|
|
81,657 |
|
Non-interest expense |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
136,762 |
|
|
145,941 |
|
|
141,024 |
|
|
133,732 |
|
|
125,723 |
|
Equipment |
14,834 |
|
|
14,485 |
|
|
13,314 |
|
|
12,759 |
|
|
11,770 |
|
Operating lease equipment |
9,260 |
|
|
9,766 |
|
|
8,907 |
|
|
8,768 |
|
|
8,319 |
|
Occupancy, net |
17,547 |
|
|
17,132 |
|
|
14,991 |
|
|
15,921 |
|
|
16,245 |
|
Data processing |
8,373 |
|
|
7,569 |
|
|
6,522 |
|
|
6,204 |
|
|
7,525 |
|
Advertising and marketing |
10,862 |
|
|
12,517 |
|
|
13,375 |
|
|
12,845 |
|
|
9,858 |
|
Professional fees |
6,721 |
|
|
7,650 |
|
|
8,037 |
|
|
6,228 |
|
|
5,556 |
|
Amortization of other intangible assets |
2,863 |
|
|
3,017 |
|
|
2,928 |
|
|
2,957 |
|
|
2,942 |
|
FDIC insurance |
4,135 |
|
|
1,348 |
|
|
148 |
|
|
4,127 |
|
|
3,576 |
|
OREO expense, net |
(876 |
) |
|
536 |
|
|
1,170 |
|
|
1,290 |
|
|
632 |
|
Other |
24,160 |
|
|
29,630 |
|
|
24,138 |
|
|
24,776 |
|
|
22,228 |
|
Total non-interest expense |
234,641 |
|
|
249,591 |
|
|
234,554 |
|
|
229,607 |
|
|
214,374 |
|
Income before taxes |
87,083 |
|
|
116,682 |
|
|
134,601 |
|
|
110,173 |
|
|
118,645 |
|
Income tax expense |
24,271 |
|
|
30,718 |
|
|
35,480 |
|
|
28,707 |
|
|
29,499 |
|
Net income |
$ |
62,812 |
|
|
$ |
85,964 |
|
|
$ |
99,121 |
|
|
$ |
81,466 |
|
|
$ |
89,146 |
|
Preferred stock dividends |
2,050 |
|
|
2,050 |
|
|
2,050 |
|
|
2,050 |
|
|
2,050 |
|
Net income applicable to common shares |
$ |
60,762 |
|
|
$ |
83,914 |
|
|
$ |
97,071 |
|
|
$ |
79,416 |
|
|
$ |
87,096 |
|
Net income per common share - Basic |
$ |
1.05 |
|
|
$ |
1.46 |
|
|
$ |
1.71 |
|
|
$ |
1.40 |
|
|
$ |
1.54 |
|
Net income per common share - Diluted |
$ |
1.04 |
|
|
$ |
1.44 |
|
|
$ |
1.69 |
|
|
$ |
1.38 |
|
|
$ |
1.52 |
|
Cash dividends declared per common share |
$ |
0.28 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
Weighted average common shares outstanding |
57,620 |
|
|
57,538 |
|
|
56,690 |
|
|
56,662 |
|
|
56,529 |
|
Dilutive potential common shares |
575 |
|
|
874 |
|
|
773 |
|
|
699 |
|
|
699 |
|
Average common shares and dilutive common shares |
58,195 |
|
|
58,412 |
|
|
57,463 |
|
|
57,361 |
|
|
57,228 |
|
TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES AND
COMMERCIAL REAL ESTATE BY STATE
|
|
|
|
|
|
|
|
|
|
% Growth From |
(Dollars in thousands) |
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
Dec 31, 2019(1) |
|
Mar 31, 2019 |
Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial, and other |
$ |
8,999,728 |
|
|
$ |
8,257,614 |
|
|
$ |
8,180,070 |
|
|
$ |
8,246,449 |
|
|
$ |
7,968,861 |
|
36 |
% |
|
13 |
% |
Commercial, industrial, and other - PCD (2) |
26,158 |
|
|
28,306 |
|
|
15,532 |
|
|
24,325 |
|
|
25,330 |
|
(31 |
) |
|
3 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
1,237,274 |
|
|
1,200,783 |
|
|
1,025,961 |
|
|
984,138 |
|
|
951,370 |
|
12 |
|
|
30 |
|
Non-construction |
6,736,706 |
|
|
6,582,053 |
|
|
6,305,423 |
|
|
6,165,115 |
|
|
5,911,474 |
|
9 |
|
|
14 |
|
Commercial real estate - PCD (2) |
211,551 |
|
|
237,440 |
|
|
117,283 |
|
|
126,991 |
|
|
110,661 |
|
(44 |
) |
|
91 |
|
Home equity |
494,655 |
|
|
513,066 |
|
|
512,303 |
|
|
527,370 |
|
|
528,448 |
|
(14 |
) |
|
(6 |
) |
Home equity - PCD (2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
Residential real estate |
1,359,971 |
|
|
1,336,093 |
|
|
1,208,706 |
|
|
1,107,911 |
|
|
1,044,739 |
|
7 |
|
|
30 |
|
Residential real estate - PCD (2) |
17,418 |
|
|
18,128 |
|
|
9,960 |
|
|
10,267 |
|
|
8,785 |
|
(16 |
) |
|
NM |
Premium Finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance |
3,465,055 |
|
|
3,442,027 |
|
|
3,449,950 |
|
|
3,368,423 |
|
|
2,988,788 |
|
3 |
|
|
16 |
|
Life insurance |
5,084,695 |
|
|
4,935,320 |
|
|
4,654,588 |
|
|
4,487,921 |
|
|
4,389,599 |
|
12 |
|
|
16 |
|
Premium finance receivables - PCD (2) |
136,944 |
|
|
139,282 |
|
|
140,908 |
|
|
146,557 |
|
|
165,770 |
|
(7 |
) |
|
(17 |
) |
Consumer and other |
35,546 |
|
|
107,962 |
|
|
87,161 |
|
|
106,547 |
|
|
118,129 |
|
NM |
|
(70 |
) |
Consumer and other - PCD (2) |
1,620 |
|
|
2,216 |
|
|
2,326 |
|
|
2,645 |
|
|
2,675 |
|
(108 |
) |
|
(39 |
) |
Total loans, net of unearned income |
$ |
27,807,321 |
|
|
$ |
26,800,290 |
|
|
$ |
25,710,171 |
|
|
$ |
25,304,659 |
|
|
$ |
24,214,629 |
|
15 |
% |
|
15 |
% |
Mix: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial, and other |
32 |
% |
|
31 |
% |
|
32 |
% |
|
33 |
% |
|
33 |
% |
|
|
|
Commercial, industrial, and other - PCD (2) |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
4 |
|
|
4 |
|
|
4 |
|
|
4 |
|
|
4 |
|
|
|
|
Non-construction |
24 |
|
|
25 |
|
|
25 |
|
|
24 |
|
|
24 |
|
|
|
|
Commercial real estate - PCD (2) |
1 |
|
|
1 |
|
|
0 |
|
|
1 |
|
|
1 |
|
|
|
|
Home equity |
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
|
|
Home equity - PCD (2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Residential real estate |
5 |
|
|
5 |
|
|
5 |
|
|
4 |
|
|
4 |
|
|
|
|
Residential real estate - PCD (2) |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
Premium Finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance |
13 |
|
|
13 |
|
|
13 |
|
|
13 |
|
|
12 |
|
|
|
|
Life insurance |
18 |
|
|
18 |
|
|
18 |
|
|
18 |
|
|
18 |
|
|
|
|
Premium finance receivables - PCD (2) |
1 |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
|
|
Consumer and other |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
1 |
|
|
|
|
Consumer and other - PCD (2) |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
Total loans, net of unearned income |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
(1) Annualized.
(2) As a result of the adoption
of ASU 2016-13, the Company transitioned all previously classified
purchase credit impaired ("PCI") loans to purchased credit
deteriorated ("PCD") loans effective January 1, 2020. For prior
periods presented, the previously classified PCI loans are
presented with the PCD loans in their respective class.
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
(Dollars in thousands) |
|
Balance |
|
%
of Total Balance |
|
|
|
Balance |
|
% of
Total
Balance |
|
|
|
Balance |
|
% of
Total
Balance |
|
|
|
Balance |
|
% of
Total
Balance |
|
|
|
Balance |
|
% of
Total
Balance |
|
Commercial real estate - collateral location by
state: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Illinois |
$ |
6,171,606 |
|
75.4 |
% |
|
$ |
6,176,353 |
|
77.0 |
% |
|
$ |
5,654,827 |
|
75.9 |
% |
|
$ |
5,505,290 |
|
75.7 |
% |
|
$ |
5,331,784 |
|
76.5 |
% |
Wisconsin |
793,145 |
|
9.7 |
|
|
744,975 |
|
9.3 |
|
|
744,577 |
|
10.0 |
|
|
740,288 |
|
10.2 |
|
|
758,097 |
|
10.9 |
|
Total primary markets |
$ |
6,964,751 |
|
85.1 |
% |
|
$ |
6,921,328 |
|
86.3 |
% |
|
$ |
6,399,404 |
|
85.9 |
% |
|
$ |
6,245,578 |
|
85.9 |
% |
|
$ |
6,089,881 |
|
87.4 |
% |
Indiana |
249,680 |
|
3.1 |
|
|
218,963 |
|
2.7 |
|
|
193,350 |
|
2.6 |
|
|
179,977 |
|
2.5 |
|
|
175,350 |
|
2.5 |
|
Florida |
126,786 |
|
1.5 |
|
|
114,629 |
|
1.4 |
|
|
80,120 |
|
1.1 |
|
|
60,343 |
|
0.8 |
|
|
55,528 |
|
0.8 |
|
Arizona |
72,214 |
|
0.9 |
|
|
64,022 |
|
0.8 |
|
|
62,657 |
|
0.8 |
|
|
62,607 |
|
0.9 |
|
|
61,375 |
|
0.9 |
|
California |
63,883 |
|
0.8 |
|
|
64,345 |
|
0.8 |
|
|
67,999 |
|
0.9 |
|
|
68,497 |
|
0.9 |
|
|
67,545 |
|
1.0 |
|
Other |
708,217 |
|
8.6 |
|
|
636,989 |
|
8.0 |
|
|
645,137 |
|
8.7 |
|
|
659,242 |
|
9.0 |
|
|
523,826 |
|
7.4 |
|
Total commercial real estate |
$ |
8,185,531 |
|
100.0 |
% |
|
$ |
8,020,276 |
|
100.0 |
% |
|
$ |
7,448,667 |
|
100.0 |
% |
|
$ |
7,276,244 |
|
100.0 |
% |
|
$ |
6,973,505 |
|
100.0 |
% |
TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES
|
|
|
|
|
|
|
|
|
|
% Growth From |
(Dollars in thousands) |
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
Dec 31, 2019 (1) |
|
Mar 31, 2019 |
Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
$ |
7,556,755 |
|
|
$ |
7,216,758 |
|
|
$ |
7,067,960 |
|
|
$ |
6,719,958 |
|
|
$ |
6,353,456 |
|
19 |
% |
|
19 |
% |
NOW and interest bearing demand deposits |
3,181,159 |
|
|
3,093,159 |
|
|
2,966,098 |
|
|
2,788,976 |
|
|
2,948,576 |
|
11 |
|
|
8 |
|
Wealth management deposits (2) |
3,936,968 |
|
|
3,123,063 |
|
|
2,795,838 |
|
|
3,220,256 |
|
|
3,328,781 |
|
105 |
|
|
18 |
|
Money market |
8,114,659 |
|
|
7,854,189 |
|
|
7,326,899 |
|
|
6,460,098 |
|
|
6,093,596 |
|
13 |
|
|
33 |
|
Savings |
3,282,340 |
|
|
3,196,698 |
|
|
2,934,348 |
|
|
2,823,904 |
|
|
2,729,626 |
|
11 |
|
|
20 |
|
Time certificates of deposit |
5,389,779 |
|
|
5,623,271 |
|
|
5,619,236 |
|
|
5,505,623 |
|
|
5,350,707 |
|
(17 |
) |
|
1 |
|
Total deposits |
$ |
31,461,660 |
|
|
$ |
30,107,138 |
|
|
$ |
28,710,379 |
|
|
$ |
27,518,815 |
|
|
$ |
26,804,742 |
|
18 |
% |
|
17 |
% |
Mix: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
24 |
% |
|
24 |
% |
|
25 |
% |
|
24 |
% |
|
24 |
% |
|
|
|
NOW and interest bearing demand deposits |
10 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
11 |
|
|
|
|
Wealth management deposits (2) |
13 |
|
|
10 |
|
|
10 |
|
|
12 |
|
|
12 |
|
|
|
|
Money market |
26 |
|
|
26 |
|
|
25 |
|
|
24 |
|
|
23 |
|
|
|
|
Savings |
10 |
|
|
11 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
|
|
Time certificates of deposit |
17 |
|
|
19 |
|
|
20 |
|
|
20 |
|
|
20 |
|
|
|
|
Total deposits |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
(1) Annualized.
(2) Represents deposit balances
of the Company’s subsidiary banks from brokerage customers of
Wintrust Investments, CDEC, trust and asset management customers of
the Company and brokerage customers from unaffiliated companies
which have been placed into deposit accounts.
TABLE 3: TIME CERTIFICATES OF DEPOSIT
MATURITY/RE-PRICING ANALYSIS
As of March 31, 2020
(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 |
$ |
1,424 |
|
|
$ |
22,260 |
|
|
$ |
66,464 |
|
|
$ |
1,270,123 |
|
|
$ |
1,360,271 |
|
|
2.00 |
% |
4-6 months |
1,686 |
|
|
23,324 |
|
|
— |
|
|
627,255 |
|
|
652,265 |
|
|
1.88 |
|
7-9 months |
609 |
|
|
20,482 |
|
|
— |
|
|
506,943 |
|
|
528,034 |
|
|
1.70 |
|
10-12 months |
— |
|
|
9,319 |
|
|
— |
|
|
762,874 |
|
|
772,193 |
|
|
1.98 |
|
13-18 months |
1,401 |
|
|
18,348 |
|
|
— |
|
|
1,503,823 |
|
|
1,523,572 |
|
|
2.31 |
|
19-24 months |
— |
|
|
6,631 |
|
|
— |
|
|
368,831 |
|
|
375,462 |
|
|
2.00 |
|
24+ months |
88 |
|
|
2,794 |
|
|
— |
|
|
175,100 |
|
|
177,982 |
|
|
1.75 |
|
Total |
$ |
5,208 |
|
|
$ |
103,158 |
|
|
$ |
66,464 |
|
|
$ |
5,214,949 |
|
|
$ |
5,389,779 |
|
|
2.03 |
% |
(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.
TABLE 4: QUARTERLY AVERAGE BALANCES
|
Average Balance for three months ended, |
|
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
(In thousands) |
2020
|
|
2019 |
|
2019 |
2019 |
|
2019 |
Interest-bearing deposits with banks and cash equivalents
(1) |
|
$ |
|
1,418,809 |
|
|
$ |
|
|
2,206,251 |
|
|
$ |
|
|
1,960,898 |
|
|
$ |
|
|
893,332 |
|
|
$ |
|
|
897,629 |
|
Investment securities (2) |
|
4,780,709 |
|
|
3,909,699 |
|
|
3,410,090 |
|
|
3,653,580 |
|
|
3,630,577 |
|
FHLB and FRB stock |
|
114,829 |
|
|
94,843 |
|
|
92,583 |
|
|
105,491 |
|
|
94,882 |
|
Liquidity management assets (6) |
|
6,314,347 |
|
|
6,210,793 |
|
|
5,463,571 |
|
|
4,652,403 |
|
|
4,623,088 |
|
Other earning assets (3)(6) |
|
19,166 |
|
|
18,353 |
|
|
17,809 |
|
|
15,719 |
|
|
13,591 |
|
Mortgage loans held-for-sale |
|
403,262 |
|
|
381,878 |
|
|
379,870 |
|
|
281,732 |
|
|
188,190 |
|
Loans, net of unearned income (4)(6) |
|
26,936,728 |
|
|
26,137,722 |
|
|
25,346,290 |
|
|
24,553,263 |
|
|
23,880,916 |
|
Total earning assets (6) |
|
33,673,503 |
|
|
32,748,746 |
|
|
31,207,540 |
|
|
29,503,117 |
|
|
28,705,785 |
|
Allowance for loan and investment security losses
(7) |
|
(176,291 |
) |
|
(167,759 |
) |
|
(168,423 |
) |
|
(164,231 |
) |
|
(157,782 |
) |
Cash and due from banks |
|
321,982 |
|
|
316,631 |
|
|
297,475 |
|
|
273,679 |
|
|
283,019 |
|
Other assets |
|
2,806,296 |
|
|
2,747,572 |
|
|
2,618,000 |
|
|
2,443,204 |
|
|
2,385,149 |
|
Total assets |
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
$ |
32,055,769 |
|
|
$ |
31,216,171 |
|
|
|
|
|
|
|
|
|
|
|
|
NOW and interest bearing demand deposits |
|
$ |
3,113,733 |
|
|
$ |
3,016,991 |
|
|
$ |
2,912,961 |
|
|
$ |
2,878,021 |
|
|
$ |
2,803,338 |
|
Wealth management deposits |
|
2,838,719 |
|
|
2,934,292 |
|
|
2,888,817 |
|
|
2,605,690 |
|
|
2,614,035 |
|
Money market accounts |
|
7,990,775 |
|
|
7,647,635 |
|
|
6,956,755 |
|
|
6,095,285 |
|
|
5,915,525 |
|
Savings accounts |
|
3,189,835 |
|
|
3,028,763 |
|
|
2,837,039 |
|
|
2,752,828 |
|
|
2,715,422 |
|
Time deposits |
|
5,526,407 |
|
|
5,682,449 |
|
|
5,590,228 |
|
|
5,322,384 |
|
|
5,267,796 |
|
Interest-bearing deposits |
|
22,659,469 |
|
|
22,310,130 |
|
|
21,185,800 |
|
|
19,654,208 |
|
|
19,316,116 |
|
Federal Home Loan Bank advances |
|
951,613 |
|
|
596,594 |
|
|
574,833 |
|
|
869,812 |
|
|
594,335 |
|
Other borrowings |
|
469,577 |
|
|
415,092 |
|
|
416,300 |
|
|
419,064 |
|
|
465,571 |
|
Subordinated notes |
|
436,119 |
|
|
436,025 |
|
|
436,041 |
|
|
220,771 |
|
|
139,217 |
|
Junior subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
Total interest-bearing liabilities |
|
24,770,344 |
|
|
24,011,407 |
|
|
22,866,540 |
|
|
21,417,421 |
|
|
20,768,805 |
|
Non-interest bearing deposits |
|
7,235,177 |
|
|
7,128,166 |
|
|
6,776,786 |
|
|
6,487,627 |
|
|
6,444,378 |
|
Other liabilities |
|
909,800 |
|
|
883,433 |
|
|
814,552 |
|
|
736,381 |
|
|
693,910 |
|
Equity |
|
3,710,169 |
|
|
3,622,184 |
|
|
3,496,714 |
|
|
3,414,340 |
|
|
3,309,078 |
|
Total liabilities and shareholders’ equity |
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
$ |
32,055,769 |
|
|
$ |
31,216,171 |
|
|
|
|
|
|
|
|
|
|
|
|
Net free funds/contribution (5) |
|
$ |
8,903,159 |
|
|
$ |
8,737,339 |
|
|
$ |
8,341,000 |
|
|
$ |
8,085,696 |
|
|
$ |
7,936,980 |
|
(1) Includes interest-bearing deposits from banks, federal
funds sold and securities purchased under resale
agreements.
(2) Investment securities includes
investment securities classified as available-for-sale and
held-to-maturity, and equity securities with readily determinable
fair values. Equity securities without readily determinable fair
values are included within other assets.
(3) Other
earning assets include brokerage customer receivables and trading
account securities.
(4) Loans, net of unearned income,
include non-accrual loans.
(5) 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.
(6) See
"Supplemental Non-GAAP Financial Measures/Ratios" at Table 17 for
additional information on this performance
measure/ratio.
(7) Effective January 1, 2020 this
includes the allowance for investment security losses as a result
of the adoption of ASU 2016-13, Financial Instruments - Credit
Losses.
TABLE 5: QUARTERLY NET INTEREST
INCOME
|
|
Net Interest Income for three months ended, |
(In thousands) |
|
|
Mar 31, |
|
|
|
Dec 31, |
|
|
|
Sep 30, |
|
|
|
Jun 30, |
|
|
|
Mar 31, |
|
Interest income: |
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
Interest-bearing deposits with banks and cash equivalents |
|
$ |
4,854 |
|
|
$ |
9,361 |
|
|
$ |
10,636 |
|
|
$ |
5,206 |
|
|
$ |
5,300 |
|
Investment securities |
|
33,018 |
|
|
28,184 |
|
|
25,332 |
|
|
28,290 |
|
|
28,521 |
|
FHLB and FRB stock |
|
1,577 |
|
|
1,328 |
|
|
1,294 |
|
|
1,439 |
|
|
1,355 |
|
Liquidity management assets (2) |
|
39,449 |
|
|
38,873 |
|
|
37,262 |
|
|
34,935 |
|
|
35,176 |
|
Other earning assets (2) |
|
167 |
|
|
176 |
|
|
189 |
|
|
184 |
|
|
165 |
|
Mortgage loans held-for-sale |
|
3,165 |
|
|
3,201 |
|
|
3,478 |
|
|
3,104 |
|
|
2,209 |
|
Loans, net of unearned income (2) |
|
302,699 |
|
|
308,947 |
|
|
315,255 |
|
|
310,191 |
|
|
298,021 |
|
Total interest income |
|
$ |
345,480 |
|
|
$ |
351,197 |
|
|
$ |
356,184 |
|
|
$ |
348,414 |
|
|
$ |
335,571 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
NOW and interest bearing demand deposits |
|
$ |
3,665 |
|
|
$ |
4,622 |
|
|
$ |
5,291 |
|
|
$ |
5,553 |
|
|
$ |
4,613 |
|
Wealth management deposits |
|
6,935 |
|
|
7,867 |
|
|
9,163 |
|
|
7,091 |
|
|
7,000 |
|
Money market accounts |
|
22,363 |
|
|
25,603 |
|
|
25,426 |
|
|
21,451 |
|
|
19,460 |
|
Savings accounts |
|
5,790 |
|
|
6,145 |
|
|
5,622 |
|
|
4,959 |
|
|
4,249 |
|
Time deposits |
|
28,682 |
|
|
30,487 |
|
|
30,666 |
|
|
27,970 |
|
|
25,654 |
|
Interest-bearing deposits |
|
67,435 |
|
|
74,724 |
|
|
76,168 |
|
|
67,024 |
|
|
60,976 |
|
Federal Home Loan Bank advances |
|
3,360 |
|
|
1,461 |
|
|
1,774 |
|
|
4,193 |
|
|
2,450 |
|
Other borrowings |
|
3,546 |
|
|
3,273 |
|
|
3,466 |
|
|
3,525 |
|
|
3,633 |
|
Subordinated notes |
|
5,472 |
|
|
5,504 |
|
|
5,470 |
|
|
2,806 |
|
|
1,775 |
|
Junior subordinated debentures |
|
2,811 |
|
|
2,890 |
|
|
2,897 |
|
|
3,064 |
|
|
3,150 |
|
Total interest expense |
|
$ |
82,624 |
|
|
$ |
87,852 |
|
|
$ |
89,775 |
|
|
$ |
80,612 |
|
|
$ |
71,984 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fully taxable-equivalent adjustment |
|
(1,413 |
) |
|
(1,466 |
) |
|
(1,557 |
) |
|
(1,600 |
) |
|
(1,601 |
) |
Net interest income (GAAP) (1) |
|
261,443 |
|
|
261,879 |
|
|
264,852 |
|
|
266,202 |
|
|
261,986 |
|
Fully taxable-equivalent adjustment |
|
1,413 |
|
|
1,466 |
|
|
1,557 |
|
|
1,600 |
|
|
1,601 |
|
Net interest income, fully taxable-equivalent (non-GAAP)
(1) |
|
$ |
262,856 |
|
|
$ |
263,345 |
|
|
$ |
266,409 |
|
|
$ |
267,802 |
|
|
$ |
263,587 |
|
(1) See "Supplemental Non-GAAP Financial Measures/Ratios" at
Table 17 for additional information on this performance
measure/ratio.
(2) Interest income on tax-advantaged
loans, trading securities and investment securities reflects a
taxable-equivalent adjustment based on the marginal federal
corporate tax rate in effect as of the applicable period.
TABLE 6: QUARTERLY NET INTEREST
MARGIN
|
|
Net Interest Margin for three months ended, |
|
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
|
Mar 31,
2019 |
Yield earned on: |
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks and cash equivalents |
|
1.38 |
% |
|
1.68 |
% |
|
2.15 |
% |
|
2.34 |
% |
|
2.39 |
% |
Investment securities |
|
2.78 |
|
|
2.86 |
|
|
2.95 |
|
|
3.11 |
|
|
3.19 |
|
FHLB and FRB stock |
|
5.52 |
|
|
5.55 |
|
|
5.55 |
|
|
5.47 |
|
|
5.79 |
|
Liquidity management assets |
|
2.51 |
|
|
2.48 |
|
|
2.71 |
|
|
3.01 |
|
|
3.09 |
|
Other earning assets |
|
3.50 |
|
|
3.83 |
|
|
4.20 |
|
|
4.68 |
|
|
4.91 |
|
Mortgage loans held-for-sale |
|
3.16 |
|
|
3.33 |
|
|
3.63 |
|
|
4.42 |
|
|
4.76 |
|
Loans, net of unearned income |
|
4.52 |
|
|
4.69 |
|
|
4.93 |
|
|
5.07 |
|
|
5.06 |
|
Total earning assets |
|
4.13 |
% |
|
4.25 |
% |
|
4.53 |
% |
|
4.74 |
% |
|
4.74 |
% |
|
|
|
|
|
|
|
|
|
|
|
Rate paid on: |
|
|
|
|
|
|
|
|
|
|
NOW and interest bearing demand deposits |
|
0.47 |
% |
|
0.61 |
% |
|
0.72 |
% |
|
0.77 |
% |
|
0.67 |
% |
Wealth management deposits |
|
0.98 |
|
|
1.06 |
|
|
1.26 |
|
|
1.09 |
|
|
1.09 |
|
Money market accounts |
|
1.13 |
|
|
1.33 |
|
|
1.45 |
|
|
1.41 |
|
|
1.33 |
|
Savings accounts |
|
0.73 |
|
|
0.80 |
|
|
0.79 |
|
|
0.72 |
|
|
0.63 |
|
Time deposits |
|
2.09 |
|
|
2.13 |
|
|
2.18 |
|
|
2.11 |
|
|
1.98 |
|
Interest-bearing deposits |
|
1.20 |
|
|
1.33 |
|
|
1.43 |
|
|
1.37 |
|
|
1.29 |
|
Federal Home Loan Bank advances |
|
1.42 |
|
|
0.97 |
|
|
1.22 |
|
|
1.93 |
|
|
1.67 |
|
Other borrowings |
|
3.04 |
|
|
3.13 |
|
|
3.30 |
|
|
3.37 |
|
|
3.16 |
|
Subordinated notes |
|
5.02 |
|
|
5.05 |
|
|
5.02 |
|
|
5.08 |
|
|
5.10 |
|
Junior subordinated debentures |
|
4.39 |
|
|
4.46 |
|
|
4.47 |
|
|
4.78 |
|
|
4.97 |
|
Total interest-bearing liabilities |
|
1.34 |
% |
|
1.45 |
% |
|
1.56 |
% |
|
1.51 |
% |
|
1.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread (1)(3) |
|
2.79 |
% |
|
2.80 |
% |
|
2.97 |
% |
|
3.23 |
% |
|
3.34 |
% |
Less: Fully taxable-equivalent adjustment |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
Net free funds/contribution (2) |
|
0.35 |
|
|
0.39 |
|
|
0.42 |
|
|
0.41 |
|
|
0.38 |
|
Net interest margin (GAAP) (3) |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
|
3.62 |
% |
|
3.70 |
% |
Fully taxable-equivalent adjustment |
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
Net interest margin, fully taxable-equivalent (non-GAAP)
(3) |
|
3.14 |
% |
|
3.19 |
% |
|
3.39 |
% |
|
3.64 |
% |
|
3.72 |
% |
(1) Interest rate spread is the difference
between the yield earned on earning assets and the rate paid on
interest-bearing liabilities.
(2) 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.
(3)
See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 17
for additional information on this performance
measure/ratio.
TABLE 7: INTEREST RATE
SENSITIVITY
As an ongoing part of its financial strategy,
the Company attempts to manage the impact of fluctuations in market
interest rates on net interest income. Management measures its
exposure to changes in interest rates by modeling many different
interest rate scenarios.
The following interest rate scenarios display
the percentage change in net interest income over a one-year time
horizon assuming increases of 100 and 200 basis points and a
decrease of 100 basis points. The Static Shock Scenario results
incorporate actual cash flows and repricing characteristics for
balance sheet instruments following an instantaneous, parallel
change in market rates based upon a static (i.e. no growth or
constant) balance sheet. Conversely, the Ramp Scenario results
incorporate management’s projections of future volume and pricing
of each of the product lines following a gradual, parallel change
in market rates over twelve months. Actual results may differ
from these simulated results due to timing, magnitude, and
frequency of interest rate changes as well as changes in market
conditions and management strategies. The interest rate sensitivity
for both the Static Shock and Ramp Scenario is as follows:
Static Shock Scenario |
|
+200
Basis
Points |
|
+100
Basis
Points |
|
-100
Basis
Points |
Mar 31, 2020 |
|
22.5 |
% |
|
10.6 |
% |
|
(9.4 |
)% |
Dec 31, 2019 |
|
18.6 |
|
|
9.7 |
|
|
(10.9 |
) |
Sep 30, 2019 |
|
20.7 |
|
|
10.5 |
|
|
(11.9 |
) |
Jun 30, 2019 |
|
17.3 |
|
|
8.9 |
|
|
(10.2 |
) |
Mar 31, 2019 |
|
14.9 |
|
|
7.8 |
|
|
(8.5 |
) |
Ramp Scenario |
+200
Basis
Points |
|
+100
Basis
Points |
|
-100
Basis
Points |
Mar 31, 2020 |
7.7 |
% |
|
3.7 |
% |
|
(3.8 |
)% |
Dec 31, 2019 |
9.3 |
|
|
4.8 |
|
|
(5.0 |
) |
Sep 30, 2019 |
10.1 |
|
|
5.2 |
|
|
(5.6 |
) |
Jun 30, 2019 |
8.3 |
|
|
4.3 |
|
|
(4.6 |
) |
Mar 31, 2019 |
6.7 |
|
|
3.5 |
|
|
(3.3 |
) |
TABLE 8: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST
RATES
|
Loans repricing or maturity period |
As of March 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
One year or less |
|
|
|
From one to
five years |
|
|
|
Over five years |
|
|
|
Total |
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate |
$ |
295,238 |
|
|
$ |
1,747,321 |
|
|
$ |
808,067 |
|
|
$ |
2,850,626 |
|
Variable rate |
6,153,781 |
|
|
21,347 |
|
|
132 |
|
|
6,175,260 |
|
Total commercial |
$ |
6,449,019 |
|
|
$ |
1,768,668 |
|
|
$ |
808,199 |
|
|
$ |
9,025,886 |
|
Commercial real estate |
|
|
|
|
|
|
|
Fixed rate |
518,259 |
|
|
2,242,979 |
|
|
434,901 |
|
|
3,196,139 |
|
Variable rate |
4,952,584 |
|
|
36,808 |
|
|
— |
|
|
4,989,392 |
|
Total commercial real estate |
$ |
5,470,843 |
|
|
$ |
2,279,787 |
|
|
$ |
434,901 |
|
|
$ |
8,185,531 |
|
Home equity |
|
|
|
|
|
|
|
Fixed rate |
24,813 |
|
|
4,070 |
|
|
570 |
|
|
29,453 |
|
Variable rate |
465,202 |
|
|
— |
|
|
— |
|
|
465,202 |
|
Total home equity |
$ |
490,015 |
|
|
$ |
4,070 |
|
|
$ |
570 |
|
|
$ |
494,655 |
|
Residential real estate |
|
|
|
|
|
|
|
Fixed rate |
40,814 |
|
|
15,607 |
|
|
398,189 |
|
|
454,610 |
|
Variable rate |
90,205 |
|
|
338,495 |
|
|
494,079 |
|
|
922,779 |
|
Total residential real estate |
$ |
131,019 |
|
|
$ |
354,102 |
|
|
$ |
892,268 |
|
|
$ |
1,377,389 |
|
Premium finance receivables - commercial |
|
|
|
|
|
|
|
Fixed rate |
3,378,077 |
|
|
86,978 |
|
|
— |
|
|
3,465,055 |
|
Variable rate |
— |
|
|
— |
|
|
— |
|
|
— |
|
Total premium finance receivables - commercial |
$ |
3,378,077 |
|
|
$ |
86,978 |
|
|
$ |
— |
|
|
$ |
3,465,055 |
|
Premium finance receivables - life insurance |
|
|
|
|
|
|
|
Fixed rate |
16,164 |
|
|
142,886 |
|
|
23,785 |
|
|
182,835 |
|
Variable rate |
5,038,804 |
|
|
— |
|
|
— |
|
|
5,038,804 |
|
Total premium finance receivables - life insurance |
$ |
5,054,968 |
|
|
$ |
142,886 |
|
|
$ |
23,785 |
|
|
$ |
5,221,639 |
|
Consumer and other |
|
|
|
|
|
|
|
Fixed rate |
8,478 |
|
|
8,304 |
|
|
1,669 |
|
|
18,451 |
|
Variable rate |
18,715 |
|
|
— |
|
|
— |
|
|
18,715 |
|
Total consumer and other |
$ |
27,193 |
|
|
$ |
8,304 |
|
|
$ |
1,669 |
|
|
$ |
37,166 |
|
|
|
|
|
|
|
|
|
Total per category |
|
|
|
|
|
|
|
Fixed rate |
4,281,843 |
|
|
4,248,145 |
|
|
1,667,181 |
|
|
10,197,169 |
|
Variable rate |
16,719,291 |
|
|
396,650 |
|
|
494,211 |
|
|
17,610,152 |
|
Total loans, net of unearned income |
$ |
21,001,134 |
|
|
$ |
4,644,795 |
|
|
$ |
2,161,392 |
|
|
$ |
27,807,321 |
|
|
|
|
|
|
|
|
|
Variable Rate Loan Pricing by Index: |
|
|
|
|
|
|
|
Prime |
|
|
|
|
|
|
$ |
2,431,566 |
|
One- month LIBOR |
|
|
|
|
|
|
8,888,190 |
|
Three- month LIBOR |
|
|
|
|
|
|
332,833 |
|
Twelve- month LIBOR |
|
|
|
|
|
|
5,696,796 |
|
Other |
|
|
|
|
|
|
260,767 |
|
Total variable rate |
|
|
|
|
|
|
$ |
17,610,152 |
|
Graph available at the following link:
http://ml.globenewswire.com/Resource/Download/9d852691-bc59-4848-97f4-cd852d9eceab
As noted in the table on the previous page, the
majority of the Company’s portfolio is tied to LIBOR indices which,
as shown in the table above, do not mirror the same changes as the
Prime rate which has historically moved when the Federal Reserve
raises or lowers interest rates. Specifically, the Company
has $8.9 billion of variable rate loans tied to one-month LIBOR and
$5.7 billion of variable rate loans tied to twelve-month LIBOR. The
above chart shows:
|
|
Basis Points (bps) Change in |
|
|
Prime |
|
1-month
LIBOR |
|
12-month
LIBOR |
|
First Quarter 2020 |
|
-150 |
bps |
-77 |
bps |
-100 |
bps |
Fourth
Quarter 2019 |
|
-25 |
|
-26 |
|
-3 |
|
Third
Quarter 2019 |
|
-50 |
|
-38 |
|
-15 |
|
Second
Quarter 2019 |
|
0 |
|
-9 |
|
-53 |
|
First Quarter 2019 |
|
0 |
|
-1 |
|
-30 |
|
TABLE 9: ALLOWANCE FOR CREDIT LOSSES
|
Three Months Ended |
|
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
(Dollars in thousands) |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
Allowance for credit losses at beginning of
period |
|
$ |
|
158,461 |
|
|
$ |
|
|
163,273 |
|
|
$ |
|
|
161,901 |
|
|
$ |
|
|
159,622 |
|
|
$ |
|
|
154,164 |
|
Cumulative effect adjustment from the adoption of ASU
2016-13 |
|
47,418 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Provision for credit losses |
|
52,961 |
|
|
7,826 |
|
|
10,834 |
|
|
24,580 |
|
|
10,624 |
|
Other adjustments |
|
(73 |
) |
|
30 |
|
|
(13 |
) |
|
(11 |
) |
|
(27 |
) |
Charge-offs: |
|
|
|
|
|
|
|
|
|
|
Commercial |
|
2,153 |
|
|
11,222 |
|
|
6,775 |
|
|
17,380 |
|
|
503 |
|
Commercial real estate |
|
85 |
|
|
533 |
|
|
809 |
|
|
326 |
|
|
3,734 |
|
Home equity |
|
1,001 |
|
|
1,330 |
|
|
1,594 |
|
|
690 |
|
|
88 |
|
Residential real estate |
|
356 |
|
|
483 |
|
|
25 |
|
|
287 |
|
|
3 |
|
Premium finance receivables |
|
3,184 |
|
|
3,817 |
|
|
1,866 |
|
|
5,009 |
|
|
2,210 |
|
Consumer and other |
|
128 |
|
|
167 |
|
|
117 |
|
|
136 |
|
|
102 |
|
PCD (1) |
|
530 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total charge-offs |
|
7,437 |
|
|
17,552 |
|
|
11,186 |
|
|
23,828 |
|
|
6,640 |
|
Recoveries: |
|
|
|
|
|
|
|
|
|
|
Commercial |
|
356 |
|
|
1,871 |
|
|
367 |
|
|
289 |
|
|
318 |
|
Commercial real estate |
|
79 |
|
|
1,404 |
|
|
385 |
|
|
247 |
|
|
480 |
|
Home equity |
|
294 |
|
|
166 |
|
|
183 |
|
|
68 |
|
|
62 |
|
Residential real estate |
|
60 |
|
|
50 |
|
|
203 |
|
|
140 |
|
|
29 |
|
Premium finance receivables |
|
1,110 |
|
|
1,350 |
|
|
563 |
|
|
734 |
|
|
556 |
|
Consumer and other |
|
39 |
|
|
43 |
|
|
36 |
|
|
60 |
|
|
56 |
|
PCD (1) |
|
214 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total recoveries |
|
2,152 |
|
|
4,884 |
|
|
1,737 |
|
|
1,538 |
|
|
1,501 |
|
Net charge-offs |
|
(5,285 |
) |
|
(12,668 |
) |
|
(9,449 |
) |
|
(22,290 |
) |
|
(5,139 |
) |
Allowance for credit losses at period end |
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
|
$ |
159,622 |
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net charge-offs by category as a percentage of
its own respective category’s average: |
Commercial |
|
0.09 |
% |
|
0.46 |
% |
|
0.31 |
% |
|
0.85 |
% |
|
0.01 |
% |
Commercial
real estate |
|
0.00 |
|
|
(0.04 |
) |
|
0.02 |
|
|
0.00 |
|
|
0.19 |
|
Home
equity |
|
0.57 |
|
|
0.89 |
|
|
1.08 |
|
|
0.47 |
|
|
0.02 |
|
Residential
real estate |
|
0.10 |
|
|
0.14 |
|
|
(0.07 |
) |
|
0.06 |
|
|
(0.01 |
) |
Premium
finance receivables |
|
0.10 |
|
|
0.28 |
|
|
0.15 |
|
|
0.55 |
|
|
0.23 |
|
Consumer and
other |
|
0.59 |
|
|
0.41 |
|
|
0.27 |
|
|
0.30 |
|
|
0.16 |
|
PCD
(1) |
|
0.32 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total loans, net of unearned income |
|
0.08 |
% |
|
0.19 |
% |
|
0.15 |
% |
|
0.36 |
% |
|
0.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net
charge-offs as a percentage of the provision for credit
losses |
|
9.98 |
% |
|
161.87 |
% |
|
87.22 |
% |
|
90.68 |
% |
|
48.37 |
% |
Loans at period-end |
|
$ |
27,807,321 |
|
|
$ |
26,800,290 |
|
|
$ |
25,710,171 |
|
|
$ |
25,304,659 |
|
|
$ |
24,214,629 |
|
Allowance for loan losses as a percentage of loans at
period end |
|
0.78 |
% |
|
0.59 |
% |
|
0.63 |
% |
|
0.63 |
% |
|
0.65 |
% |
Allowance for loan and unfunded lending-related commitment
losses as a percentage of loans at period end |
|
0.91 |
|
|
0.59 |
|
|
0.64 |
|
|
0.64 |
|
|
0.66 |
|
(1) As a result of the adoption of ASU 2016-13, the
Company transitioned all previously classified PCI loans to PCD
loans effective January 1, 2020. For prior periods presented, the
previously classified PCI charge-offs and recoveries are presented
with the non-PCI charge-offs and recoveries in their respective
class.
TABLE 10: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY
COMPONENT
|
|
Three Months Ended |
|
|
Mar 31, |
|
|
Dec 31, |
|
|
Sep 30, |
|
|
Jun 30, |
|
|
Mar 31, |
|
(In thousands) |
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
Provision for loan losses |
|
$ |
|
50,396 |
|
|
$ |
|
|
7,704 |
|
|
$ |
|
|
10,804 |
|
|
$ |
|
|
24,510 |
|
|
$ |
|
|
10,608 |
|
Provision for unfunded lending-related commitments losses |
|
2,569 |
|
|
122 |
|
|
30 |
|
|
70 |
|
|
16 |
|
Provision for held-to-maturity securities losses |
|
(4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Provision for credit losses |
|
$ |
52,961 |
|
|
$ |
7,826 |
|
|
$ |
10,834 |
|
|
$ |
24,580 |
|
|
$ |
10,624 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
$ |
216,050 |
|
|
156,828 |
|
|
161,763 |
|
|
$ |
160,421 |
|
|
$ |
158,212 |
|
Allowance for unfunded lending-related commitments losses |
|
37,362 |
|
|
1,633 |
|
|
1,510 |
|
|
1,480 |
|
|
1,410 |
|
Allowance for held-to-maturity securities losses |
|
70 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Allowance for credit losses |
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
|
$ |
159,622 |
|
TABLE 11: ALLOWANCE BY LOAN PORTFOLIO
The table below summarizes the calculation of
allowance for loan losses and allowance for unfunded
lending-related commitments losses for the Company’s core, niche
and consumer and purchased loan portfolios, as of March 31,
2020 and December 31, 2019.
|
As of March 31, 2020 |
As of December 31, 2019 |
(Dollars in thousands) |
Recorded
Investment |
|
Calculated
Allowance |
|
% of its
category’s balance |
Recorded
Investment |
|
Calculated
Allowance |
|
% of its
category’s balance |
Commercial: (1) |
|
|
|
|
|
|
|
|
|
|
Commercial, industrial and other |
$ |
8,888,342 |
|
|
$ |
104,754 |
|
|
1.18 |
% |
$ |
8,121,584 |
|
|
$ |
64,829 |
|
|
0.80 |
% |
Commercial real estate: (1) |
|
|
|
|
|
|
|
|
|
|
Construction and development |
1,113,863 |
|
|
31,687 |
|
|
2.84 |
|
1,075,545 |
|
|
16,418 |
|
|
1.53 |
|
Non-construction |
6,388,142 |
|
|
68,914 |
|
|
1.08 |
|
6,199,042 |
|
|
51,935 |
|
|
0.84 |
|
Home
equity (1) |
451,804 |
|
|
11,844 |
|
|
2.62 |
|
469,498 |
|
|
3,860 |
|
|
0.82 |
|
Residential real estate (1) |
1,274,351 |
|
|
11,621 |
|
|
0.91 |
|
1,246,829 |
|
|
9,736 |
|
|
0.78 |
|
Total core loan portfolio |
$ |
18,116,502 |
|
|
$ |
228,820 |
|
|
1.26 |
% |
$ |
17,112,498 |
|
|
$ |
146,778 |
|
|
0.86 |
% |
Premium finance receivables (1) |
|
|
|
|
|
|
|
|
|
|
Commercial insurance loans |
$ |
3,465,055 |
|
|
$ |
7,426 |
|
|
0.21 |
|
$ |
3,442,027 |
|
|
$ |
8,132 |
|
|
0.24 |
% |
Life insurance loans |
5,084,695 |
|
|
454 |
|
|
0.01 |
|
4,935,321 |
|
|
1,515 |
|
|
0.03 |
|
Consumer
and other (1) |
34,111 |
|
|
331 |
|
|
0.97 |
|
107,053 |
|
|
1,704 |
|
|
1.59 |
|
Total niche and consumer loan portfolio |
$ |
8,583,861 |
|
|
$ |
8,211 |
|
|
0.10 |
% |
$ |
8,484,401 |
|
|
$ |
11,351 |
|
|
0.13 |
% |
Purchased
commercial (2) |
$ |
137,544 |
|
|
$ |
2,592 |
|
|
1.88 |
|
$ |
164,336 |
|
|
$ |
91 |
|
|
0.06 |
% |
Purchased
commercial real estate (2) |
683,526 |
|
|
12,195 |
|
|
1.78 |
|
745,689 |
|
|
158 |
|
|
0.02 |
|
Purchased
home equity (2) |
42,851 |
|
|
550 |
|
|
1.28 |
|
43,568 |
|
|
18 |
|
|
0.04 |
|
Purchased
residential real estate (2) |
103,038 |
|
|
929 |
|
|
0.90 |
|
107,392 |
|
|
64 |
|
|
0.06 |
|
Purchased life insurance loans (2) |
136,944 |
|
|
— |
|
|
— |
|
139,281 |
|
|
— |
|
|
— |
|
Purchased
consumer and other (2) |
3,055 |
|
|
115 |
|
|
3.76 |
|
3,125 |
|
|
1 |
|
|
0.03 |
|
Total purchased loan portfolio |
$ |
1,106,958 |
|
|
$ |
16,381 |
|
|
1.48 |
|
$ |
1,203,391 |
|
|
$ |
332 |
|
|
0.03 |
% |
Total loans, net of unearned income |
$ |
27,807,321 |
|
|
$ |
253,412 |
|
|
0.91 |
|
$ |
26,800,290 |
|
|
158,461 |
|
|
0.59 |
% |
(1) As a result of the adoption of ASU 2016-13, the Company
transitioned all previously classified PCI loans to PCD loans
effective January 1, 2020. Excludes PCD loans.
(2)
Includes PCD loans.
TABLE 12: LOAN PORTFOLIO
AGING
|
As of March 31, 2020 |
|
December 31, 2019 |
(Dollars in thousands) |
|
Non-PCD |
|
PCD (1) |
|
Total Loans |
|
Non-PCD |
|
PCD (1) |
|
Total Loans |
Loan Balances: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
47,661 |
|
|
$ |
2,255 |
|
|
$ |
49,916 |
|
|
$ |
37,224 |
|
|
$ |
— |
|
|
$ |
37,224 |
|
90+ days and still accruing |
|
3 |
|
|
1,238 |
|
|
1,241 |
|
|
— |
|
|
1,855 |
|
|
1,855 |
|
60-89 days past due |
|
8,541 |
|
|
332 |
|
|
8,873 |
|
|
2,852 |
|
|
423 |
|
|
3,275 |
|
30-59 days past due |
|
86,129 |
|
|
— |
|
|
86,129 |
|
|
70,010 |
|
|
7,314 |
|
|
77,324 |
|
Current |
|
8,857,394 |
|
|
22,333 |
|
|
8,879,727 |
|
|
8,147,528 |
|
|
18,714 |
|
|
8,166,242 |
|
Total Commercial |
|
$ |
8,999,728 |
|
|
$ |
26,158 |
|
|
$ |
9,025,886 |
|
|
$ |
8,257,614 |
|
|
$ |
28,306 |
|
|
$ |
8,285,920 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
36,904 |
|
|
$ |
25,926 |
|
|
$ |
62,830 |
|
|
$ |
26,113 |
|
|
$ |
— |
|
|
$ |
26,113 |
|
90+ days and still accruing |
|
516 |
|
|
— |
|
|
516 |
|
|
— |
|
|
14,946 |
|
|
14,946 |
|
60-89 days past due |
|
7,415 |
|
|
2,797 |
|
|
10,212 |
|
|
23,573 |
|
|
7,973 |
|
|
31,546 |
|
30-59 days past due |
|
65,578 |
|
|
9,490 |
|
|
75,068 |
|
|
66,442 |
|
|
31,125 |
|
|
97,567 |
|
Current |
|
7,863,567 |
|
|
173,338 |
|
|
8,036,905 |
|
|
7,666,708 |
|
|
183,396 |
|
|
7,850,104 |
|
Total Commercial real estate |
|
$ |
7,973,980 |
|
|
$ |
211,551 |
|
|
$ |
8,185,531 |
|
|
$ |
7,782,836 |
|
|
$ |
237,440 |
|
|
$ |
8,020,276 |
|
Home equity |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
7,243 |
|
|
$ |
— |
|
|
$ |
7,243 |
|
|
$ |
7,363 |
|
|
$ |
— |
|
|
$ |
7,363 |
|
90+ days and still accruing |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
60-89 days past due |
|
214 |
|
|
— |
|
|
214 |
|
|
454 |
|
|
— |
|
|
454 |
|
30-59 days past due |
|
2,096 |
|
|
— |
|
|
2,096 |
|
|
3,533 |
|
|
— |
|
|
3,533 |
|
Current |
|
485,102 |
|
|
— |
|
|
485,102 |
|
|
501,716 |
|
|
— |
|
|
501,716 |
|
Total Home equity |
|
$ |
494,655 |
|
|
$ |
— |
|
|
$ |
494,655 |
|
|
$ |
513,066 |
|
|
$ |
— |
|
|
$ |
513,066 |
|
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
13,132 |
|
|
$ |
5,833 |
|
|
$ |
18,965 |
|
|
$ |
13,797 |
|
|
$ |
— |
|
|
$ |
13,797 |
|
90+ days and still accruing |
|
605 |
|
|
— |
|
|
605 |
|
|
— |
|
|
5,771 |
|
|
5,771 |
|
60-89 days past due |
|
345 |
|
|
— |
|
|
345 |
|
|
2,474 |
|
|
615 |
|
|
3,089 |
|
30-59 days past due |
|
26,437 |
|
|
2,546 |
|
|
28,983 |
|
|
16,664 |
|
|
1,377 |
|
|
18,041 |
|
Current |
|
1,319,452 |
|
|
9,039 |
|
|
1,328,491 |
|
|
1,303,158 |
|
|
10,365 |
|
|
1,313,523 |
|
Total Residential real estate |
|
$ |
1,359,971 |
|
|
$ |
17,418 |
|
|
$ |
1,377,389 |
|
|
$ |
1,336,093 |
|
|
$ |
18,128 |
|
|
$ |
1,354,221 |
|
Premium finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
21,058 |
|
|
$ |
— |
|
|
$ |
21,058 |
|
|
$ |
21,180 |
|
|
$ |
— |
|
|
$ |
21,180 |
|
90+ days and still accruing |
|
16,505 |
|
|
— |
|
|
16,505 |
|
|
11,517 |
|
|
— |
|
|
11,517 |
|
60-89 days past due |
|
12,730 |
|
|
— |
|
|
12,730 |
|
|
12,119 |
|
|
— |
|
|
12,119 |
|
30-59 days past due |
|
70,185 |
|
|
— |
|
|
70,185 |
|
|
51,342 |
|
|
— |
|
|
51,342 |
|
Current |
|
8,429,272 |
|
|
136,944 |
|
|
8,566,216 |
|
|
8,281,189 |
|
|
139,282 |
|
|
8,420,471 |
|
Total Premium finance receivables |
|
$ |
8,549,750 |
|
|
$ |
136,944 |
|
|
$ |
8,686,694 |
|
|
$ |
8,377,347 |
|
|
$ |
139,282 |
|
|
$ |
8,516,629 |
|
Consumer and other |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
232 |
|
|
$ |
171 |
|
|
$ |
403 |
|
|
$ |
231 |
|
|
$ |
— |
|
|
$ |
231 |
|
90+ days and still accruing |
|
78 |
|
|
— |
|
|
78 |
|
|
163 |
|
|
124 |
|
|
287 |
|
60-89 days past due |
|
607 |
|
|
18 |
|
|
625 |
|
|
40 |
|
|
— |
|
|
40 |
|
30-59 days past due |
|
188 |
|
|
19 |
|
|
207 |
|
|
344 |
|
|
— |
|
|
344 |
|
Current |
|
34,441 |
|
|
1,412 |
|
|
35,853 |
|
|
107,184 |
|
|
2,092 |
|
|
109,276 |
|
Total Consumer and other |
|
$ |
35,546 |
|
|
$ |
1,620 |
|
|
$ |
37,166 |
|
|
$ |
107,962 |
|
|
$ |
2,216 |
|
|
$ |
110,178 |
|
Total loans, net of unearned income |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
126,230 |
|
|
$ |
34,185 |
|
|
$ |
160,415 |
|
|
$ |
105,908 |
|
|
$ |
— |
|
|
$ |
105,908 |
|
90+ days and still accruing |
|
17,707 |
|
|
1,238 |
|
|
18,945 |
|
|
11,680 |
|
|
22,696 |
|
|
34,376 |
|
60-89 days past due |
|
29,852 |
|
|
3,147 |
|
|
32,999 |
|
|
41,512 |
|
|
9,011 |
|
|
50,523 |
|
30-59 days past due |
|
250,613 |
|
|
12,055 |
|
|
262,668 |
|
|
208,335 |
|
|
39,816 |
|
|
248,151 |
|
Current |
|
26,989,228 |
|
|
343,066 |
|
|
27,332,294 |
|
|
26,007,483 |
|
|
353,849 |
|
|
26,361,332 |
|
Total loans, net of unearned income |
|
$ |
27,413,630 |
|
|
$ |
393,691 |
|
|
$ |
27,807,321 |
|
|
$ |
26,374,918 |
|
|
$ |
425,372 |
|
|
$ |
26,800,290 |
|
(1) As a result of the adoption of
ASU 2016-13, the Company transitioned all previously classified PCI
loans to PCD loans effective January 1, 2020. For prior periods
presented, the previously classified PCI loans are presented with
the PCD loans in their respective class.
TABLE 13: NON-PERFORMING ASSETS AND TROUBLED DEBT
RESTRUCTURINGS ("TDRs")
|
Mar 31, |
|
|
Dec 31, |
|
Sep 30, |
Jun 30, |
Mar 31, |
(Dollars in thousands) |
2020 |
|
|
2019 |
|
2019 |
|
2019 |
|
2019 |
Loans past due greater than 90 days and still accruing
(1): |
Non-PCD |
|
PCD(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
3 |
|
$ |
1,238 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
488 |
|
|
$ |
— |
|
Commercial real estate |
516 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Home
equity |
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Residential real estate |
605 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
30 |
|
Premium
finance receivables |
16,505 |
|
— |
|
|
11,517 |
|
|
10,612 |
|
|
6,940 |
|
|
6,726 |
|
Consumer
and other |
78 |
|
— |
|
|
163 |
|
|
53 |
|
|
172 |
|
|
218 |
|
Total loans past due greater than 90 days and still accruing |
17,707 |
|
1,238 |
|
|
11,680 |
|
|
10,665 |
|
|
7,600 |
|
|
6,974 |
|
Non-accrual loans: |
|
|
|
|
|
|
|
|
|
|
Commercial |
47,661 |
|
2,255 |
|
|
37,224 |
|
|
43,931 |
|
|
47,604 |
|
|
55,792 |
|
Commercial real estate |
36,904 |
|
25,926 |
|
|
26,113 |
|
|
21,557 |
|
|
20,875 |
|
|
15,933 |
|
Home
equity |
7,243 |
|
— |
|
|
7,363 |
|
|
7,920 |
|
|
8,489 |
|
|
7,885 |
|
Residential real estate |
13,132 |
|
5,833 |
|
|
13,797 |
|
|
13,447 |
|
|
14,236 |
|
|
15,879 |
|
Premium
finance receivables |
21,058 |
|
— |
|
|
21,180 |
|
|
16,540 |
|
|
14,423 |
|
|
14,797 |
|
Consumer
and other |
232 |
|
171 |
|
|
231 |
|
|
224 |
|
|
220 |
|
|
326 |
|
Total non-accrual loans |
126,230 |
|
34,185 |
|
|
105,908 |
|
|
103,619 |
|
|
105,847 |
|
|
110,612 |
|
Total non-performing loans: |
|
|
|
|
|
|
|
|
|
|
Commercial |
47,664 |
|
3,493 |
|
|
37,224 |
|
|
43,931 |
|
|
48,092 |
|
|
55,792 |
|
Commercial real estate |
37,420 |
|
25,926 |
|
|
26,113 |
|
|
21,557 |
|
|
20,875 |
|
|
15,933 |
|
Home
equity |
7,243 |
|
— |
|
|
7,363 |
|
|
7,920 |
|
|
8,489 |
|
|
7,885 |
|
Residential real estate |
13,737 |
|
5,833 |
|
|
13,797 |
|
|
13,447 |
|
|
14,236 |
|
|
15,909 |
|
Premium
finance receivables |
37,563 |
|
— |
|
|
32,697 |
|
|
27,152 |
|
|
21,363 |
|
|
21,523 |
|
Consumer
and other |
310 |
|
171 |
|
|
394 |
|
|
277 |
|
|
392 |
|
|
544 |
|
Total non-performing loans |
$ |
143,937 |
|
$ |
35,423 |
|
|
$ |
117,588 |
|
|
$ |
114,284 |
|
|
$ |
113,447 |
|
|
$ |
117,586 |
|
Other
real estate owned |
2,701 |
|
— |
|
|
5,208 |
|
|
8,584 |
|
|
9,920 |
|
|
9,154 |
|
Other
real estate owned - from acquisitions |
8,325 |
|
— |
|
|
9,963 |
|
|
8,898 |
|
|
9,917 |
|
|
12,366 |
|
Other
repossessed assets |
— |
|
— |
|
|
4 |
|
|
257 |
|
|
263 |
|
|
270 |
|
Total non-performing assets |
$ |
154,963 |
|
$ |
35,423 |
|
|
$ |
132,763 |
|
|
$ |
132,023 |
|
|
$ |
133,547 |
|
|
$ |
139,376 |
|
Accruing
TDRs not included within non-performing assets |
$ |
46,995 |
|
$ |
54 |
|
|
$ |
36,725 |
|
|
$ |
45,178 |
|
|
$ |
45,862 |
|
|
$ |
48,305 |
|
Total non-performing loans by category as a percent of its
own respective category’s period-end balance: |
|
|
|
|
|
|
|
|
|
|
Commercial |
0.53 |
% |
13.35 |
% |
|
0.45 |
% |
|
0.54 |
% |
|
0.58 |
% |
|
0.70 |
% |
Commercial real estate |
0.47 |
|
12.26 |
|
|
0.33 |
|
|
0.29 |
|
|
0.29 |
|
|
0.23 |
|
Home
equity |
1.46 |
|
— |
|
|
1.44 |
|
|
1.55 |
|
|
1.61 |
|
|
1.49 |
|
Residential real estate |
1.01 |
|
33.49 |
|
|
1.02 |
|
|
1.10 |
|
|
1.27 |
|
|
1.51 |
|
Premium
finance receivables |
0.44 |
|
— |
|
|
0.39 |
|
|
0.34 |
|
|
0.27 |
|
|
0.29 |
|
Consumer
and other |
0.87 |
|
10.56 |
|
|
0.36 |
|
|
0.31 |
|
|
0.36 |
|
|
0.45 |
|
Total loans, net of unearned income |
0.53 |
% |
9.00 |
% |
|
0.44 |
% |
|
0.44 |
% |
|
0.45 |
% |
|
0.49 |
% |
Total non-performing assets as a percentage of total
assets |
0.49 |
% |
|
|
0.36 |
% |
|
0.38 |
% |
|
0.40 |
% |
|
0.43 |
% |
Allowance for loan losses as a percentage of total
non-performing loans |
120.46 |
% |
|
|
133.37 |
% |
|
141.54 |
% |
|
141.41 |
% |
|
134.55 |
% |
(1) As of March 31, 2020, December 31, 2019,
September 30, 2019, June 30, 2019, and March 31, 2019, no TDRs were
past due greater than 90 days and still accruing
interest.
(2) As a result of the adoption of ASU
2016-13, the Company transitioned all previously classified PCI
loans to PCD loans effective January 1, 2020.
Non-performing Loans Rollforward
|
Three Months Ended |
|
Mar 31, |
|
|
Dec 31, |
|
|
|
Sep 30, |
|
|
|
Jun 30, |
|
|
|
Mar 31, |
|
(In thousands) |
2020 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
Non-PCD |
PCD(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
117,588 |
|
$ |
— |
|
|
$ |
114,284 |
|
|
$ |
113,447 |
|
|
$ |
117,586 |
|
|
$ |
113,234 |
|
Additions, net |
30,390 |
|
1,805 |
|
|
30,977 |
|
|
20,781 |
|
|
20,567 |
|
|
24,030 |
|
Additions from the adoption of ASU 2016-13 |
— |
|
37,285 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Return to performing status |
(317 |
) |
(169 |
) |
|
(243 |
) |
|
(407 |
) |
|
(47 |
) |
|
(14,077 |
) |
Payments received |
(4,451 |
) |
(3,498 |
) |
|
(19,380 |
) |
|
(16,326 |
) |
|
(5,438 |
) |
|
(4,024 |
) |
Transfer to OREO and other repossessed assets |
(1,297 |
) |
— |
|
|
— |
|
|
(1,493 |
) |
|
(1,486 |
) |
|
(82 |
) |
Charge-offs |
(2,551 |
) |
— |
|
|
(11,798 |
) |
|
(6,984 |
) |
|
(16,817 |
) |
|
(3,992 |
) |
Net change for niche loans (1) |
4,575 |
|
— |
|
|
3,748 |
|
|
5,266 |
|
|
(918 |
) |
|
2,497 |
|
Balance at end of period |
$ |
143,937 |
|
$ |
35,423 |
|
|
$ |
117,588 |
|
|
$ |
114,284 |
|
|
$ |
113,447 |
|
|
$ |
117,586 |
|
(1) This includes activity for premium finance receivables
and indirect consumer loans.
(2) As a result of the
adoption of ASU 2016-13, the Company transitioned all previously
classified PCI loans to PCD loans effective January 1,
2020.
TDRs
|
Mar 31, |
|
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
(In thousands) |
2020 |
|
|
2019 |
|
2019 |
|
2019 |
|
2019 |
Accruing TDRs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
6,500 |
|
|
$ |
4,905 |
|
|
$ |
14,099 |
|
|
$ |
15,923 |
|
|
$ |
19,650 |
|
Commercial real estate |
18,043 |
|
|
9,754 |
|
|
10,370 |
|
|
12,646 |
|
|
14,123 |
|
Residential real estate and other |
22,506 |
|
|
22,066 |
|
|
20,709 |
|
|
17,293 |
|
|
14,532 |
|
Total accrual |
$ |
47,049 |
|
|
$ |
36,725 |
|
|
$ |
45,178 |
|
|
$ |
45,862 |
|
|
$ |
48,305 |
|
Non-accrual TDRs: (1) |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
17,206 |
|
|
$ |
13,834 |
|
|
$ |
7,451 |
|
|
$ |
21,850 |
|
|
$ |
34,390 |
|
Commercial real estate |
14,420 |
|
|
7,119 |
|
|
7,673 |
|
|
2,854 |
|
|
1,517 |
|
Residential real estate and other |
4,962 |
|
|
6,158 |
|
|
6,006 |
|
|
5,435 |
|
|
4,150 |
|
Total non-accrual |
$ |
36,588 |
|
|
$ |
27,111 |
|
|
$ |
21,130 |
|
|
$ |
30,139 |
|
|
$ |
40,057 |
|
Total TDRs: |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
23,706 |
|
|
$ |
18,739 |
|
|
$ |
21,550 |
|
|
$ |
37,773 |
|
|
$ |
54,040 |
|
Commercial real estate |
32,463 |
|
|
16,873 |
|
|
18,043 |
|
|
15,500 |
|
|
15,640 |
|
Residential real estate and other |
27,468 |
|
|
28,224 |
|
|
26,715 |
|
|
22,728 |
|
|
18,682 |
|
Total TDRs |
$ |
83,637 |
|
|
$ |
63,836 |
|
|
$ |
66,308 |
|
|
$ |
76,001 |
|
|
$ |
88,362 |
|
(1) Included in total non-performing
loans.
Other Real Estate Owned
|
Three Months Ended |
|
Mar 31, |
|
|
Dec 31, |
|
|
Sep 30, |
|
|
Jun 30, |
|
|
Mar 31, |
|
(In thousands) |
2020 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
Balance at beginning of period |
$ |
|
15,171 |
|
|
$ |
|
|
17,482 |
|
|
$ |
|
|
19,837 |
|
|
$ |
|
|
21,520 |
|
|
$ |
|
|
24,820 |
|
Disposals/resolved |
(4,793 |
) |
|
(4,860 |
) |
|
(4,501 |
) |
|
(2,397 |
) |
|
(2,758 |
) |
Transfers in at fair value, less costs to sell |
954 |
|
|
936 |
|
|
3,008 |
|
|
1,746 |
|
|
32 |
|
Additions from acquisition |
— |
|
|
2,179 |
|
|
— |
|
|
— |
|
|
— |
|
Fair value adjustments |
(306 |
) |
|
(566 |
) |
|
(862 |
) |
|
(1,032 |
) |
|
(574 |
) |
Balance at end of period |
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
|
$ |
19,837 |
|
|
$ |
21,520 |
|
|
|
|
|
|
|
|
|
|
|
|
Period End |
|
Mar 31, |
|
|
Dec 31, |
|
|
Sep 30, |
|
|
Jun 30, |
|
|
Mar 31, |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
Balance by Property Type: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential real estate |
$ |
|
1,684 |
|
|
$ |
|
|
1,016 |
|
|
$ |
|
|
1,250 |
|
|
$ |
|
|
1,312 |
|
|
$ |
|
|
3,037 |
|
Residential real estate development |
— |
|
|
810 |
|
|
1,282 |
|
|
1,282 |
|
|
1,139 |
|
Commercial real estate |
9,342 |
|
|
13,345 |
|
|
14,950 |
|
|
17,243 |
|
|
17,344 |
|
Total |
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
|
$ |
19,837 |
|
|
$ |
21,520 |
|
TABLE 14: NON-INTEREST INCOME
|
Three Months Ended |
|
Q1 2020 compared to |
|
Q1 2020 compared to |
|
|
Mar 31, |
|
|
|
Dec 31, |
|
|
|
Sep 30, |
|
|
|
Jun 30, |
|
|
|
Mar 31, |
|
|
Q4 2019 |
|
Q1 2019 |
(Dollars in thousands) |
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
$ Change |
|
% Change |
|
$ Change |
|
% Change |
Brokerage |
$ |
5,281 |
|
|
$ |
4,859 |
|
|
$ |
4,686 |
|
|
$ |
4,764 |
|
|
$ |
4,516 |
|
|
$ |
422 |
|
|
9 |
% |
|
$ |
765 |
|
|
17 |
% |
Trust and asset management |
20,660 |
|
|
20,140 |
|
|
19,313 |
|
|
19,375 |
|
|
19,461 |
|
|
520 |
|
|
3 |
|
|
1,199 |
|
|
6 |
|
Total wealth management |
25,941 |
|
|
24,999 |
|
|
23,999 |
|
|
24,139 |
|
|
23,977 |
|
|
942 |
|
|
4 |
|
|
1,964 |
|
|
8 |
|
Mortgage banking |
48,326 |
|
|
47,860 |
|
|
50,864 |
|
|
37,411 |
|
|
18,158 |
|
|
466 |
|
|
1 |
|
|
30,168 |
|
|
NM |
|
Service charges on deposit accounts |
11,265 |
|
|
10,973 |
|
|
9,972 |
|
|
9,277 |
|
|
8,848 |
|
|
292 |
|
|
3 |
|
|
2,417 |
|
|
27 |
|
(Losses) gains on investment securities, net |
(4,359 |
) |
|
587 |
|
|
710 |
|
|
864 |
|
|
1,364 |
|
|
(4,946 |
) |
|
NM |
|
|
(5,723 |
) |
|
NM |
|
Fees from covered call options |
2,292 |
|
|
1,243 |
|
|
— |
|
|
643 |
|
|
1,784 |
|
|
1,049 |
|
|
84 |
|
|
508 |
|
|
28 |
|
Trading (losses) gains, net |
(451 |
) |
|
46 |
|
|
11 |
|
|
(44 |
) |
|
(171 |
) |
|
(497 |
) |
|
NM |
|
|
(280 |
) |
|
NM |
|
Operating lease income, net |
11,984 |
|
|
12,487 |
|
|
12,025 |
|
|
11,733 |
|
|
10,796 |
|
|
(503 |
) |
|
(4 |
) |
|
1,188 |
|
|
11 |
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap fees |
6,066 |
|
|
2,206 |
|
|
4,811 |
|
|
3,224 |
|
|
2,831 |
|
|
3,860 |
|
|
NM |
|
|
3,235 |
|
|
NM |
|
BOLI |
(1,284 |
) |
|
1,377 |
|
|
830 |
|
|
1,149 |
|
|
1,591 |
|
|
(2,661 |
) |
|
NM |
|
|
(2,875 |
) |
|
NM |
|
Administrative services |
1,112 |
|
|
1,072 |
|
|
1,086 |
|
|
1,009 |
|
|
1,030 |
|
|
40 |
|
|
4 |
|
|
82 |
|
|
8 |
|
Foreign currency remeasurement (losses) gains |
(151 |
) |
|
261 |
|
|
(55 |
) |
|
113 |
|
|
464 |
|
|
(412 |
) |
|
NM |
|
|
(615 |
) |
|
NM |
|
Early pay-offs of capital leases |
74 |
|
|
24 |
|
|
6 |
|
|
— |
|
|
5 |
|
|
50 |
|
|
NM |
|
|
69 |
|
|
NM |
|
Miscellaneous |
12,427 |
|
|
9,085 |
|
|
10,878 |
|
|
8,640 |
|
|
10,980 |
|
|
3,342 |
|
|
37 |
|
|
1,447 |
|
|
13 |
|
Total Other |
18,244 |
|
|
14,025 |
|
|
17,556 |
|
|
14,135 |
|
|
16,901 |
|
|
4,219 |
|
|
30 |
|
|
1,343 |
|
|
8 |
|
Total Non-Interest Income |
$ |
113,242 |
|
|
$ |
112,220 |
|
|
$ |
115,137 |
|
|
$ |
98,158 |
|
|
$ |
81,657 |
|
|
$ |
1,022 |
|
|
1 |
% |
|
$ |
31,585 |
|
|
39 |
% |
NM - Not meaningful.
TABLE 15: MORTGAGE BANKING
|
Three Months Ended |
(Dollars in thousands) |
Mar 31,
2020 |
|
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
|
Mar 31,
2019 |
Originations and Commitments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
originations |
$ |
773,144 |
|
|
$ |
782,122 |
|
|
$ |
913,631 |
|
|
$ |
669,510 |
|
|
$ |
365,602 |
|
Correspondent originations |
— |
|
|
4,024 |
|
|
50,639 |
|
|
182,966 |
|
|
148,100 |
|
Veterans
First originations |
442,957 |
|
|
459,236 |
|
|
456,005 |
|
|
301,324 |
|
|
164,762 |
|
Total originations for sale (A) |
$ |
1,216,101 |
|
|
$ |
1,245,382 |
|
|
$ |
1,420,275 |
|
|
$ |
1,153,800 |
|
|
$ |
678,464 |
|
Originations for investment |
73,727 |
|
|
105,911 |
|
|
154,897 |
|
|
106,237 |
|
|
93,689 |
|
Total originations |
$ |
1,289,828 |
|
|
$ |
1,351,293 |
|
|
$ |
1,575,172 |
|
|
$ |
1,260,037 |
|
|
$ |
772,153 |
|
|
|
|
|
|
|
|
|
|
|
Purchases
as a percentage of originations for sale |
37 |
% |
|
40 |
% |
|
48 |
% |
|
63 |
% |
|
67 |
% |
Refinances as a percentage of originations for sale |
63 |
|
|
60 |
|
|
52 |
|
|
37 |
|
|
33 |
|
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
Mandatory
commitments to fund originations for sale (1) |
$ |
1,375,162 |
|
|
$ |
372,357 |
|
|
$ |
433,009 |
|
|
$ |
475,618 |
|
|
$ |
285,917 |
|
|
|
|
|
|
|
|
|
|
|
Production Margin: |
|
|
|
|
|
|
|
|
|
Production revenue (B) (2) |
$ |
31,964 |
|
|
$ |
35,600 |
|
|
$ |
39,881 |
|
|
$ |
29,905 |
|
|
$ |
16,942 |
|
Production margin (B / A) |
2.63 |
% |
|
2.86 |
% |
|
2.81 |
% |
|
2.59 |
% |
|
2.50 |
% |
|
|
|
|
|
|
|
|
|
|
Mortgage Servicing: |
|
|
|
|
|
|
|
|
|
Loans
serviced for others (C) |
$ |
8,314,634 |
|
|
$ |
8,243,251 |
|
|
$ |
7,901,045 |
|
|
$ |
7,515,186 |
|
|
$ |
7,014,269 |
|
MSRs, at
fair value (D) |
73,504 |
|
|
85,638 |
|
|
75,585 |
|
|
72,850 |
|
|
71,022 |
|
Percentage of MSRs to loans serviced for others (D / C) |
0.88 |
% |
|
1.04 |
% |
|
0.96 |
% |
|
0.97 |
% |
|
1.01 |
% |
Servicing
income |
$ |
7,031 |
|
|
$ |
6,247 |
|
|
$ |
5,989 |
|
|
$ |
5,460 |
|
|
$ |
5,460 |
|
|
|
|
|
|
|
|
|
|
|
Components of MSRs: |
|
|
|
|
|
|
|
|
|
MSR -
current period capitalization |
$ |
9,447 |
|
|
$ |
14,532 |
|
|
$ |
14,029 |
|
|
$ |
9,802 |
|
|
$ |
6,580 |
|
MSR -
collection of expected cash flows - paydowns |
(547 |
) |
|
(483 |
) |
|
(456 |
) |
|
(457 |
) |
|
(505 |
) |
MSR -
collection of expected cash flows - payoffs |
(6,476 |
) |
|
(6,325 |
) |
|
(6,781 |
) |
|
(3,619 |
) |
|
(1,492 |
) |
Valuation: |
|
|
|
|
|
|
|
|
|
MSR - changes in fair value model assumptions |
(14,557 |
) |
|
2,329 |
|
|
(4,058 |
) |
|
(4,305 |
) |
|
(8,744 |
) |
Gain (loss) on derivative contract held as an economic hedge,
net |
4,160 |
|
|
(483 |
) |
|
82 |
|
|
920 |
|
|
— |
|
MSR valuation adjustment, net of (loss)/gain on derivative contract
held as an economic hedge |
$ |
(10,397 |
) |
|
$ |
1,846 |
|
|
$ |
(3,976 |
) |
|
$ |
(3,385 |
) |
|
$ |
(8,744 |
) |
(1) Certain volume adjusted for the
estimated pull-through rate of the loan, which represents the
Company’s best estimate of the likelihood that a committed loan
will ultimately fund.
(2) Production revenue represents
revenue earned from the origination and subsequent sale of
mortgages, including gains on loans sold and fees from
originations, processing and other related activities, and excludes
servicing fees, changes in the fair value of servicing rights.
Excludes changes to the mortgage recourse obligation, derivative
income from interest rate lock commitments and other non-production
revenue.
TABLE 16: NON-INTEREST EXPENSE
|
Three Months Ended |
|
Q1 2020 compared to |
|
Q1 2020 compared to |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Q4 2019 |
|
Q1 2019 |
(Dollars in thousands) |
2020 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
|
$ Change |
|
% Change |
|
$ Change |
|
% Change |
Salaries and employee benefits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries |
$ |
81,286 |
|
|
$ |
82,888 |
|
|
$ |
78,067 |
|
|
$ |
75,360 |
|
|
$ |
74,037 |
|
|
$ |
(1,602 |
) |
|
(2 |
)% |
|
$ |
7,249 |
|
|
10 |
% |
Commissions and incentive compensation |
31,575 |
|
|
40,226 |
|
|
40,289 |
|
|
36,486 |
|
|
31,599 |
|
|
(8,651 |
) |
|
(22 |
) |
|
(24 |
) |
|
— |
|
Benefits |
23,901 |
|
|
22,827 |
|
|
22,668 |
|
|
21,886 |
|
|
20,087 |
|
|
1,074 |
|
|
5 |
|
|
3,814 |
|
|
19 |
|
Total salaries and employee benefits |
136,762 |
|
|
145,941 |
|
|
141,024 |
|
|
133,732 |
|
|
125,723 |
|
|
(9,179 |
) |
|
(6 |
) |
|
11,039 |
|
|
9 |
|
Equipment |
14,834 |
|
|
14,485 |
|
|
13,314 |
|
|
12,759 |
|
|
11,770 |
|
|
349 |
|
|
2 |
|
|
3,064 |
|
|
26 |
|
Operating lease equipment |
9,260 |
|
|
9,766 |
|
|
8,907 |
|
|
8,768 |
|
|
8,319 |
|
|
(506 |
) |
|
(5 |
) |
|
941 |
|
|
11 |
|
Occupancy, net |
17,547 |
|
|
17,132 |
|
|
14,991 |
|
|
15,921 |
|
|
16,245 |
|
|
415 |
|
|
2 |
|
|
1,302 |
|
|
8 |
|
Data processing |
8,373 |
|
|
7,569 |
|
|
6,522 |
|
|
6,204 |
|
|
7,525 |
|
|
804 |
|
|
11 |
|
|
848 |
|
|
11 |
|
Advertising and marketing |
10,862 |
|
|
12,517 |
|
|
13,375 |
|
|
12,845 |
|
|
9,858 |
|
|
(1,655 |
) |
|
(13 |
) |
|
1,004 |
|
|
10 |
|
Professional fees |
6,721 |
|
|
7,650 |
|
|
8,037 |
|
|
6,228 |
|
|
5,556 |
|
|
(929 |
) |
|
(12 |
) |
|
1,165 |
|
|
21 |
|
Amortization of other intangible assets |
2,863 |
|
|
3,017 |
|
|
2,928 |
|
|
2,957 |
|
|
2,942 |
|
|
(154 |
) |
|
(5 |
) |
|
(79 |
) |
|
(3 |
) |
FDIC insurance |
4,135 |
|
|
1,348 |
|
|
148 |
|
|
4,127 |
|
|
3,576 |
|
|
2,787 |
|
|
NM |
|
|
559 |
|
|
16 |
|
OREO expense, net |
(876 |
) |
|
536 |
|
|
1,170 |
|
|
1,290 |
|
|
632 |
|
|
(1,412 |
) |
|
NM |
|
|
(1,508 |
) |
|
NM |
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions - 3rd party brokers |
865 |
|
|
717 |
|
|
734 |
|
|
749 |
|
|
718 |
|
|
148 |
|
|
21 |
|
|
147 |
|
|
20 |
|
Postage |
1,949 |
|
|
2,220 |
|
|
2,321 |
|
|
2,606 |
|
|
2,450 |
|
|
(271 |
) |
|
(12 |
) |
|
(501 |
) |
|
(20 |
) |
Miscellaneous |
21,346 |
|
|
26,693 |
|
|
21,083 |
|
|
21,421 |
|
|
19,060 |
|
|
(5,347 |
) |
|
(20 |
) |
|
2,286 |
|
|
12 |
|
Total other |
24,160 |
|
|
29,630 |
|
|
24,138 |
|
|
24,776 |
|
|
22,228 |
|
|
(5,470 |
) |
|
(18 |
) |
|
1,932 |
|
|
9 |
|
Total Non-Interest Expense |
$ |
234,641 |
|
|
$ |
249,591 |
|
|
$ |
234,554 |
|
|
$ |
229,607 |
|
|
$ |
214,374 |
|
|
$ |
(14,950 |
) |
|
(6 |
)% |
|
$ |
20,267 |
|
|
9 |
% |
NM - Not meaningful.
TABLE 17: SUPPLEMENTAL NON-GAAP
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),
taxable-equivalent net interest margin (including its individual
components), the taxable-equivalent efficiency ratio, tangible
common equity ratio, tangible book value per common share, return
on average tangible common equity, pre-tax income, excluding
provision for credit losses and pre-tax income, excluding provision
for credit losses and MSR valuation adjustment. Management believes
that these measures and ratios provide users of the Company’s
financial information a more meaningful view of the performance of
the Company's 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 basis. In this
non-GAAP presentation, net interest income is adjusted to reflect
tax-exempt interest income on an equivalent before-tax basis using
tax rates effective as of the end of the period. This measure
ensures comparability of net interest income arising from both
taxable and tax-exempt sources. Net interest income on a fully
taxable-equivalent 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. Management
considers pre-tax income, excluding provision for credit losses and
pre-tax income, excluding provision for credit losses and MSR
valuation adjustment as useful measurements of the Company's core
net income.
|
Three Months Ended |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
(Dollars
and shares in thousands) |
2020 |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
Reconciliation of Non-GAAP Net Interest Margin and
Efficiency Ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
Interest Income (GAAP) |
$ |
344,067 |
|
|
$ |
349,731 |
|
|
$ |
354,627 |
|
|
$ |
346,814 |
|
|
$ |
333,970 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
- Loans |
860 |
|
|
892 |
|
|
978 |
|
|
1,031 |
|
|
1,034 |
|
- Liquidity Management Assets |
551 |
|
|
573 |
|
|
574 |
|
|
568 |
|
|
565 |
|
- Other Earning Assets |
2 |
|
|
1 |
|
|
5 |
|
|
1 |
|
|
2 |
|
(B)
Interest Income (non-GAAP) |
$ |
345,480 |
|
|
$ |
351,197 |
|
|
$ |
356,184 |
|
|
$ |
348,414 |
|
|
$ |
335,571 |
|
(C)
Interest Expense (GAAP) |
$ |
82,624 |
|
|
$ |
87,852 |
|
|
$ |
89,775 |
|
|
$ |
80,612 |
|
|
$ |
71,984 |
|
(D)
Net Interest Income (GAAP) (A minus C) |
$ |
261,443 |
|
|
$ |
261,879 |
|
|
$ |
264,852 |
|
|
$ |
266,202 |
|
|
$ |
261,986 |
|
(E)
Net Interest Income (non-GAAP) (B minus C) |
$ |
262,856 |
|
|
$ |
263,345 |
|
|
$ |
266,409 |
|
|
$ |
267,802 |
|
|
$ |
263,587 |
|
Net
interest margin (GAAP) |
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
|
3.62 |
% |
|
3.70 |
% |
Net
interest margin, fully taxable-equivalent (non-GAAP) |
3.14 |
% |
|
3.19 |
% |
|
3.39 |
% |
|
3.64 |
% |
|
3.72 |
% |
(F)
Non-interest income |
$ |
113,242 |
|
|
$ |
112,220 |
|
|
$ |
115,137 |
|
|
$ |
98,158 |
|
|
$ |
81,657 |
|
(G) (Losses)
gains on investment securities, net |
(4,359 |
) |
|
587 |
|
|
710 |
|
|
864 |
|
|
1,364 |
|
(H)
Non-interest expense |
234,641 |
|
|
249,591 |
|
|
234,554 |
|
|
229,607 |
|
|
214,374 |
|
Efficiency ratio (H/(D+F-G)) |
61.90 |
% |
|
66.82 |
% |
|
61.84 |
% |
|
63.17 |
% |
|
62.63 |
% |
Efficiency ratio (non-GAAP) (H/(E+F-G)) |
61.67 |
% |
|
66.56 |
% |
|
61.59 |
% |
|
62.89 |
% |
|
62.34 |
% |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Tangible Common Equity
Ratio: |
Total
shareholders’ equity (GAAP) |
$ |
3,700,393 |
|
|
$ |
3,691,250 |
|
|
$ |
3,540,325 |
|
|
$ |
3,446,950 |
|
|
$ |
3,371,972 |
|
Less:
Non-convertible preferred stock (GAAP) |
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
Less:
Intangible assets (GAAP) |
(687,626 |
) |
|
(692,277 |
) |
|
(627,972 |
) |
|
(631,499 |
) |
|
(620,224 |
) |
(I) Total tangible common shareholders’ equity (non-GAAP) |
$ |
2,887,767 |
|
|
$ |
2,873,973 |
|
|
$ |
2,787,353 |
|
|
$ |
2,690,451 |
|
|
$ |
2,626,748 |
|
(J) Total
assets (GAAP) |
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
|
$ |
32,358,621 |
|
Less:
Intangible assets (GAAP) |
(687,626 |
) |
|
(692,277 |
) |
|
(627,972 |
) |
|
(631,499 |
) |
|
(620,224 |
) |
(K) Total tangible assets (non-GAAP) |
$ |
38,112,221 |
|
|
$ |
35,928,306 |
|
|
$ |
34,283,930 |
|
|
$ |
33,010,270 |
|
|
$ |
31,738,397 |
|
Common equity to assets ratio (GAAP) (L/J) |
9.2 |
% |
|
9.7 |
% |
|
9.8 |
% |
|
9.9 |
% |
|
10.0 |
% |
Tangible common equity ratio (non-GAAP) (I/K) |
7.6 |
% |
|
8.0 |
% |
|
8.1 |
% |
|
8.2 |
% |
|
8.3 |
% |
|
Three Months Ended |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
(Dollars
and shares in thousands) |
2020 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
Reconciliation of Non-GAAP Tangible Book Value per Common
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
shareholders’ equity |
$ |
3,700,393 |
|
|
$ |
3,691,250 |
|
|
$ |
3,540,325 |
|
|
$ |
3,446,950 |
|
|
$ |
3,371,972 |
|
Less:
Preferred stock |
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
(L) Total common equity |
$ |
3,575,393 |
|
|
$ |
3,566,250 |
|
|
$ |
3,415,325 |
|
|
$ |
3,321,950 |
|
|
$ |
3,246,972 |
|
(M) Actual
common shares outstanding |
57,545 |
|
|
57,822 |
|
|
56,698 |
|
|
56,668 |
|
|
56,639 |
|
Book
value per common share (L/M) |
$ |
62.13 |
|
|
$ |
61.68 |
|
|
$ |
60.24 |
|
|
$ |
58.62 |
|
|
$ |
57.33 |
|
Tangible book value per common share (non-GAAP)
(I/M) |
$ |
50.18 |
|
|
$ |
49.70 |
|
|
$ |
49.16 |
|
|
$ |
47.48 |
|
|
$ |
46.38 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Return on Average Tangible
Common Equity: |
(N) Net
income applicable to common shares |
$ |
60,762 |
|
|
$ |
83,914 |
|
|
$ |
97,071 |
|
|
$ |
79,416 |
|
|
$ |
87,096 |
|
Add:
Intangible asset amortization |
2,863 |
|
|
3,017 |
|
|
2,928 |
|
|
2,957 |
|
|
2,942 |
|
Less: Tax
effect of intangible asset amortization |
(799 |
) |
|
(793 |
) |
|
(773 |
) |
|
(771 |
) |
|
(731 |
) |
After-tax intangible asset amortization |
2,064 |
|
|
2,224 |
|
|
2,155 |
|
|
2,186 |
|
|
2,211 |
|
(O) Tangible net income applicable to common shares (non-GAAP) |
$ |
62,826 |
|
|
$ |
86,138 |
|
|
$ |
99,226 |
|
|
$ |
81,602 |
|
|
$ |
89,307 |
|
Total
average shareholders' equity |
$ |
3,710,169 |
|
|
$ |
3,622,184 |
|
|
$ |
3,496,714 |
|
|
$ |
3,414,340 |
|
|
$ |
3,309,078 |
|
Less:
Average preferred stock |
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
(P) Total average common shareholders' equity |
$ |
3,585,169 |
|
|
$ |
3,497,184 |
|
|
$ |
3,371,714 |
|
|
$ |
3,289,340 |
|
|
$ |
3,184,078 |
|
Less: Average intangible assets |
(690,777 |
) |
|
(689,286 |
) |
|
(630,279 |
) |
|
(624,794 |
) |
|
(622,240 |
) |
(Q) Total average tangible common shareholders’ equity
(non-GAAP) |
$ |
2,894,392 |
|
|
$ |
2,807,898 |
|
|
$ |
2,741,435 |
|
|
$ |
2,664,546 |
|
|
$ |
2,561,838 |
|
Return on average common equity, annualized
(N/P) |
6.82 |
% |
|
9.52 |
% |
|
11.42 |
% |
|
9.68 |
% |
|
11.09 |
% |
Return on average tangible common equity, annualized
(non-GAAP) (O/Q) |
8.73 |
% |
|
12.17 |
% |
|
14.36 |
% |
|
12.28 |
% |
|
14.14 |
% |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income
and Pre-Tax, Pre-Provision, Pre-MSR Adjustment
Income: |
|
|
Income
before taxes |
$ |
87,083 |
|
|
$ |
116,682 |
|
|
$ |
134,601 |
|
|
$ |
110,173 |
|
|
$ |
118,645 |
|
Add:
Provision for credit losses |
52,961 |
|
|
7,826 |
|
|
10,834 |
|
|
24,580 |
|
|
10,624 |
|
Pre-tax income, excluding provision for credit losses
(non-GAAP) |
$ |
140,044 |
|
|
$ |
124,508 |
|
|
$ |
145,435 |
|
|
$ |
134,753 |
|
|
$ |
129,269 |
|
Less: MSR
valuation adjustment, net of (loss)/gain on derivative contract
held as an economic hedge |
$ |
(10,397 |
) |
|
$ |
1,846 |
|
|
$ |
(3,976 |
) |
|
$ |
(3,385 |
) |
|
$ |
(8,744 |
) |
Pre-tax income, excluding provision for credit losses and
MSR valuation adjustments (non-GAAP) |
$ |
150,441 |
|
|
$ |
122,662 |
|
|
$ |
149,411 |
|
|
$ |
138,138 |
|
|
$ |
138,013 |
|
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, N.A., Hinsdale Bank & Trust
Company, N.A., Wintrust Bank, N.A., in Chicago, Libertyville
Bank & Trust Company, N.A., Barrington Bank &
Trust Company, N.A., Crystal Lake Bank & Trust Company,
N.A., Northbrook Bank & Trust Company, N.A., Schaumburg
Bank & Trust Company, N.A., Village Bank & Trust,
N.A., in Arlington Heights, Beverly Bank & Trust Company,
N.A. in Chicago, Wheaton Bank & Trust Company, N.A., State
Bank of The Lakes, N.A., in Antioch, Old Plank Trail Community
Bank, N.A. in New Lenox, St. Charles Bank & Trust Company,
N.A. and Town Bank, N.A., in Hartland, Wisconsin.
In addition to the locations noted above, the
banks also operate facilities in Illinois in Addison, Algonquin,
Aurora, Bloomingdale, Buffalo Grove, Burbank, Cary, Clarendon
Hills, Crete, Countryside, Darien, Deerfield, Des Plaines, Downers
Grove, Elgin, Elk Grove Village, Elmhurst, Evanston, Evergreen
Park, Frankfort, Geneva, Glen Ellyn, Glencoe, Glenview, Gurnee,
Grayslake, Hanover Park, Highland Park, Highwood, Hoffman Estates,
Homer Glen, Island Lake, Itasca, Joliet, Lake Bluff, Lake Villa,
Lansing, Lemont, Lindenhurst, Lynwood, Markham, Maywood, McHenry,
Mokena, Mount Prospect, Mundelein, Naperville, North Chicago,
Northfield, Norridge, Oak Lawn, Oak Brook, Orland Park, Palatine,
Park Ridge, Prospect Heights, Ravinia, Riverside, Rolling Meadows,
Roselle, Round Lake Beach, Shorewood, Skokie, South Holland, South
Elgin, Spring Grove, Steger, Stone Park, Vernon Hills, Wauconda,
Waukegan, Western Springs, Willowbrook, Wilmette, Winnetka and Wood
Dale, and in Wisconsin in Albany, Burlington, Clinton, Darlington,
Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva,
Madison, Menomonee Falls, Milwaukee, Monroe, Pewaukee, Racine,
Sharon, Wales, Walworth and Wind Lake, and in Dyer, Indiana and in
Naples, Florida.
Additionally, the Company operates various non-bank business
units:
- FIRST Insurance Funding, a division
of Lake Forest Bank & Trust Company, N.A., and Wintrust Life
Finance, a division of Lake Forest Bank & Trust Company, N.A.,
serve commercial and life insurance loan customers, respectively,
throughout the United States.
- 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, N.A., 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.
- Wintrust 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, N.A., a
trust subsidiary, allows Wintrust to service customers’ trust and
investment needs at each banking location.
- Wintrust Asset Finance offers
direct leasing opportunities.
- CDEC provides Qualified
Intermediary services (as defined by U.S. Treasury regulations) for
taxpayers seeking to structure tax-deferred like-kind exchanges
under Internal Revenue Code Section 1031.
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,” “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, such
as the potential impacts of the COVID-19 pandemic, and which may
include, but are not limited to, those listed below and the Risk
Factors discussed under Item 1A of the Company’s 2019 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:
- the severity, magnitude and
duration of the COVID-19 pandemic and the direct and indirect
impact of such pandemic, as well as responses to the pandemic by
the government, businesses and consumers, on our operations and
personnel, commercial activity and demand across our business and
our customers’ businesses;
- the disruption of global, national,
state and local economies associated with the COVID-19 pandemic,
which could affect the Company’s liquidity and capital positions,
impair the ability of our borrowers to repay outstanding loans,
impair collateral values and further increase our allowance for
credit losses;
- the impact of the COVID-19 pandemic
on our financial results, including possible lost revenue and
increased expenses (including the cost of capital), as well as
possible goodwill impairment charges;
- economic conditions that affect the
economy, housing prices, the job market and other factors that may
adversely affect the Company’s liquidity and the performance of its
loan portfolios, particularly in the markets in which it
operates;
- negative effects suffered by us or
our customers resulting from changes in U.S. trade policies;
- 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;
- commercial real estate market
conditions in the Chicago metropolitan area and southern
Wisconsin;
- the extent of commercial and
consumer delinquencies and declines in real estate values, which
may require further increases in the Company’s allowance for credit
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
(including developments and volatility arising from or related to
the COVID-19 pandemic) 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), which may result in loss of
market share and reduced income from deposits, loans, advisory fees
and income from other products;
- 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;
- harm to the Company’s
reputation;
- any negative perception of the
Company’s financial strength;
- ability of the Company 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 of the Company to use
technology to provide products and services that will satisfy
customer demands and create efficiencies in operations and to
manage risks associated therewith;
- failure or breaches of our security
systems or infrastructure, or those of third parties;
- security breaches, including denial
of service attacks, hacking, social engineering attacks, malware
intrusion or data corruption attempts and identity theft;
- adverse effects on our information
technology systems resulting from failures, human error or
cyberattacks;
- 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 to which the Company is subject, including any effect on
our reputation;
- losses incurred in connection with
repurchases and indemnification payments related to mortgages and
increases in reserves associated therewith;
- 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, and any unanticipated impact of the Tax Act;
- changes in accounting standards,
rules and interpretations such as the new CECL standard and related
changes to address the impact of COVID-19, and the impact on the
Company’s financial statements;
- the ability of the Company to
receive dividends from its subsidiaries;
- uncertainty about the discontinued
use of LIBOR and transition to an alternative rate;
- a decrease in the Company’s capital
ratios, including as a result of 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 changes that are in response to the
COVID-19 pandemic, including without limitation the CARES Act and
the rules and regulations that may be promulgated thereunder;
- a lowering of our credit
rating;
- changes in U.S. monetary policy and
changes to the Federal Reserve’s balance sheet, including changes
in response to the COVID-19 pandemic or otherwise;
- regulatory restrictions upon our
ability to market our products to consumers and limitations on our
ability to profitably operate our mortgage business;
- increased costs of compliance,
heightened regulatory capital requirements and other risks
associated with changes in regulation and the regulatory
environment;
- 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 or events 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, WEBCAST AND REPLAY
The Company will hold a conference call on
Wednesday, April 22, 2020 at 10:00 a.m. (Central Time) regarding
first quarter 2020 results. Individuals interested in listening
should call (877) 363-5049 and enter Conference ID #6554248. A
simultaneous audio-only webcast and replay of the conference call
as well as an accompanying slide presentation may be accessed via
the Company’s website at https://www.wintrust.com, Investor
Relations, Investor News and Events, Presentations &
Conference Calls. The text of the first quarter 2020 earnings press
release will be available on the home page of the Company’s website
at https://www.wintrust.com and at the Investor Relations, Investor
News and Events, Press Releases link on its website.
FOR MORE INFORMATION CONTACT:
Edward J. Wehmer, Founder & Chief Executive Officer
David A. Dykstra, Vice Chairman & Chief Operating Officer
(847) 939-9000
Web site address: www.wintrust.com
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