ROSEMONT, Ill., July 21, 2020 (GLOBE NEWSWIRE)
-- Wintrust Financial Corporation (“Wintrust” or “the Company”)
(Nasdaq: WTFC) announced net income of $21.7 million or $0.34 per
diluted common share for the second quarter of 2020, a decrease in
diluted earnings per common share of 67.3% compared to the prior
quarter and a decrease of 75.4% compared to the second quarter of
2019. The Company recorded net income of $84.5 million or $1.38 per
diluted common share for the first six months of 2020 compared to
net income of $170.6 million or $2.91 per diluted common share for
the same period of 2019.
Highlights of the Second Quarter of
2020:
Comparative information to the first quarter of 2020
- Total assets increased by $4.7
billion, including $3.3 billion of Paycheck Protection Program
("PPP") loans, net of fees.
- Total loans increased by $3.6
billion, including $3.3 billion of PPP loans, net of fees.
° Lines of credit utilization declined to approximately 49% at June
30, 2020 as compared to approximately 56% at March 31, 2020.
- Total deposits increased by $4.2
billion, primarily related to both PPP lending and organic growth
of retail deposits.
- Net interest income increased by
$1.7 million as the impact of a $5.1 billion increase in average
earning assets was partially offset by a 39 basis point decline in
net interest margin. The decline in net interest margin was largely
due to declining interest rates and excess short–term liquidity on
the balance sheet.
- The loans to deposits ratio ended
the second quarter of 2020 at 88.1% as compared to 88.4% at prior
quarter end. Excluding PPP loans, the loans to deposits ratio ended
the second quarter of 2020 at 78.7%.
- Mortgage banking revenue increased
by $54.0 million to $102.3 million for the second quarter of 2020
as compared to $48.3 million in the prior quarter.
° Loans originated for sale in the second quarter of 2020 totaled
$2.2 billion as compared to $1.2 billion in the prior quarter.
° 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 $7.4
million in the second quarter of 2020 as compared to a decline of
$10.4 million in the prior quarter.
° Accrued $7.2 million of additional contingent consideration
expense related to the previous acquisitions of mortgage operations
in the second quarter of 2020 as compared to $329,000 in the prior
quarter, which was recorded in other non-interest expense.
- Provision for credit losses of
$135.1 million in the second quarter of 2020. Provision for credit
losses increased by $82.1 million from $53.0 million in the first
quarter of 2020. The increased provision for credit losses expense
in the second quarter of 2020 was primarily related to generally
deteriorating forecasted economic conditions impacted by the
COVID-19 pandemic which are an input in the Company's Current
Expected Credit Loss ("CECL") models.
- Recorded net charge-offs of $15.4
million in the second quarter of 2020, of which $9.5 million were
previously reserved for, as compared to net charge-offs of $5.3
million in the first quarter of 2020.
- Non-performing assets totaled
$198.5 million as of June 30, 2020, or 0.46% of total assets, as
compared to $190.4 million, or 0.49% of total assets, as of the
prior quarter end.
- The allowance for credit losses on
our core loan portfolio is approximately 1.85% of the outstanding
balance as of June 30, 2020, up from 1.26% as of the prior quarter
end.
- Incurred acquisition related costs
of $4.9 million in the second quarter of 2020 as compared to $1.7
million in the first quarter of 2020.
Other highlights of the second quarter of
2020
- Paid $2.6 million of COVID-19
related salary incentives to non-executive personnel.
- Originated $3.4 billion of PPP loans which generated net fees
of $91.0 million to be recognized over the estimated life of the
PPP loans. Fees are recognized on a level yield basis which
incorporates estimates of the timing of customer requested
forgiveness, Small Business Administration ("SBA") approval of
forgiveness and the repayment timing from the SBA.
- Recorded COVID-19 related loan
modifications for customers with aggregate outstanding balances of
approximately $1.7 billion or 9% of total loans, excluding PPP
loans and premium finance receivables. The modifications primarily
changed terms to interest-only payments or full payment
deferrals.
- Completed a preferred stock
issuance which generated proceeds of $278.4 million, net of the
underwriting discount, which contributed to increasing estimated
Tier 1 and Total Capital ratios to 10.1% and 12.8%,
respectively.
Edward J. Wehmer, Founder and Chief Executive
Officer, commented, "I am very proud of the extraordinary effort
put forth by our employees to support our customers and our
communities amid the challenges of COVID-19. Wintrust reported net
income of $21.7 million for the second quarter of 2020, down from
$62.8 million in the first quarter of 2020. However, pre-tax
income, excluding provision for credit losses and MSR valuation
adjustments (non-GAAP), increased by $22.7 million over the
previous quarter and $35.0 million over the second quarter of 2019.
The Company experienced strong balance sheet growth as total assets
were $4.7 billion higher than the prior quarter end and $9.9
billion higher than the end of the second quarter of 2019. The
second quarter of 2020 was characterized by significant balance
sheet growth, declining net interest margin, strong mortgage
banking revenue, increased provision for credit losses and a
continued focus to increase franchise value in our market
area."
Mr. Wehmer continued, "The Company grew total
loans by $3.6 billion in the second quarter of 2020 including $3.3
billion related to PPP lending. The Company experienced significant
growth in its commercial insurance premium finance and life
insurance premium finance receivable portfolios partially offset by
a decline in its commercial portfolio. Growth in the commercial
insurance premium finance portfolio was in part due to hardening
insurance market conditions driving the average size of new
commercial insurance premium finance receivables to approximately
$38,000 in the second quarter as compared to $31,000 in the first
quarter of 2020. The decline in the commercial loan portfolio is
primarily attributed to paydowns in the second quarter of 2020
related to both existing customers receiving PPP loans and
repayment of balances that were drawn in the first quarter of 2020.
As a result, credit line utilization was approximately 49% at June
30, 2020 as compared to approximately 56% at March 31, 2020. Total
deposits increased by $4.2 billion as compared to the first quarter
of 2020 including $2.6 billion of non-interest bearing deposit
growth primarily related to PPP lending. In addition, the Company
continued to grow organic retail deposits including its
MaxSafeTM deposit products which grew by $482 million in
the second quarter of 2020. Our loans to deposits ratio ended the
quarter at 88.1% and we are confident that we have sufficient
liquidity to meet customer loan demand."
Mr. Wehmer commented, "Net interest income
increased in the second quarter of 2020 primarily due to earning
asset growth but was partially offset by a 39 basis point decline
in the net interest margin. The decline in net interest margin was
primarily due to downward repricing of variable rate loans and an
increase in interest bearing cash balances, partially offset by
favorable repricing of interest bearing deposits and accretion of
PPP fees. At this point, the majority of our variable rate loan
portfolio has repriced to reflect the low interest rate
environment. As such, excluding the impact of PPP fees, we expect
to be able to mitigate potential future loan yield compression with
improvement in pricing on interest bearing deposits. Further, to
the extent we identify prudent opportunities to deploy excess
liquidity, we may be able to improve net interest margin."
Mr. Wehmer noted, “Our mortgage banking business
delivered a record quarter of mortgage banking revenue in light of
the demand associated with historically low long-term interest
rates. Loan volumes originated for sale in the second quarter of
2020 were $2.2 billion, as compared to $1.2 billion in the first
quarter of 2020. As a result of increases in both current and
forecasted revenues given the favorable mortgage banking
environment, the Company recorded increased contingent
consideration expense related to the previous acquisitions of
mortgage operations. Additionally, the Company recorded a $7.4
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. The strong quarter of mortgage
performance contributed to reporting a 0.93% net overhead ratio for
the second quarter of 2020. We believe the third quarter of 2020
will provide another strong quarter for mortgage banking
production."
Commenting on credit quality, Mr. Wehmer stated,
"The Company recorded provision for credit losses of $135.1 million
in the second quarter primarily related to generally deteriorating
forecasted economic conditions impacted by the COVID-19 pandemic.
Net charge-offs totaled $15.4 million in the second quarter of
2020, of which $9.5 million were previously reserved for, as
compared to $5.3 million in the first quarter of 2020. The level of
non-performing assets increased by $8.1 million to $198.5 million.
The allowance for credit losses on our core loan portfolio is
approximately 1.85% of the outstanding balance. 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. In the second quarter of
2020, we completed a preferred stock issuance to bolster our
capital position. We believe the Company has adequate liquidity and
capital to effectively manage through the COVID-19 pandemic."
Mr. Wehmer concluded, "We remain committed to
supporting our community, including the well-being and safety of
our customers and employees. We believe that our opportunities for
both internal and external growth remain consistently strong and
were particularly enhanced as a result of our successful
participation in PPP lending. However, 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."
The graphs below illustrate certain financial
highlights of the second quarter of 2020. See "Supplemental
Non-GAAP Financial Measures/Ratios" at Table 18 for additional
information with respect to non-GAAP financial measures/ratios,
including the reconciliations to the corresponding GAAP financial
measures/ratios.
A PDF accompanying this announcement can be
found at http://ml.globenewswire.com/Resource/Download/33d15dc8-146d-4f4d-b842-5c498ea282c9
SUMMARY OF RESULTS:
BALANCE SHEET
Total asset growth of $4.7 billion in the second
quarter of 2020 was primarily comprised of a $3.6 billion increase
in loans and a $2.1 billion increase in interest bearing deposits
with banks, partially offset by a $513 million decrease in
investment securities and a $502 million decrease in trade date
securities receivables. The Company believes that the $4.0 billion
of interest bearing deposits with banks held as of June 30, 2020
provides more than sufficient liquidity to operate its business
plan.
Total liabilities grew by $4.5 billion in the
second quarter of 2020 resulting primarily from a $4.2 billion
increase in total deposits. The increase in deposits included $2.6
billion of non-interest bearing deposit growth primarily related to
PPP funding. In addition, the Company successfully grew deposits in
the second quarter through organic retail channels including
continued success of MaxSafeTM deposit products which
grew by $482 million in the second quarter. Our loans to deposits
ratio ended the quarter at 88.1%. 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 second quarter of 2020, net interest
income totaled $263.1 million, an increase of $1.7 million as
compared to the first quarter of 2020 and a decrease of $3.1
million as compared to the second quarter of 2019. The $1.7 million
increase in net interest income in the second quarter of 2020
compared to the first quarter of 2020 was attributable to the
impact of a $5.1 billion increase in average earning assets. This
impact was partially offset by a 39 basis point decline in net
interest margin.
Net interest margin was 2.73% (2.74% on a fully
taxable-equivalent basis, non-GAAP) during the second quarter of
2020 compared to 3.12% (3.14% on a fully taxable-equivalent basis,
non-GAAP) during the first quarter of 2020 and 3.62% (3.64% on a
fully taxable-equivalent basis, non-GAAP) during the second quarter
of 2019. The 39 basis point decrease in net interest margin in the
second quarter of 2020 as compared to the first quarter of 2020 was
attributable to a 68 basis point decline in the yield on earnings
assets and a seven basis point decrease in the net free funds
contribution partially offset by a 36 basis point decrease in the
rate paid on interest bearing liabilities. The 68 basis point
decline in the yield on earning assets in the second quarter as
compared to the first quarter of 2020 was primarily due to a 60
basis point decline in the yield on loans along with an increased
balance and reduced yield on interest bearing cash. The 36 basis
point decrease in the rate paid on interest bearing liabilities in
the second quarter as compared to the prior quarter is primarily
due to a 39 basis point decrease in the rate paid on interest
bearing deposits as management initiated various deposit rate
reductions given the decreased 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 $373.2
million as of June 30, 2020 an increase of $119.7 million as
compared to $253.5 million as of March 31, 2020. 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 June 30, 2020 and
March 31, 2020 is shown on Table 12 of this report.
The provision for credit losses totaled $135.1
million for the second quarter of 2020 compared to $53.0 million
for the first quarter of 2020 and $24.6 million for the second
quarter of 2019. The increased provision for credit losses
expense in the second quarter was primarily related to generally
deteriorating forecasted economic conditions impacted by the
COVID-19 pandemic. Specifically, the negative impact of the
COVID-19 pandemic on the projected commercial real-estate price
index materially impacted the modeled losses from the commercial
real-estate portfolio. Management believes the allowance for credit
losses is appropriate to account for expected credit losses. 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 11
in this report.
Net charge-offs totaled $15.4 million in the
second quarter of 2020, a $10.1 million increase from $5.3 million
in the first quarter of 2020 and a $6.9 million decrease from $22.3
million in the second quarter of 2019. Net charge-offs as a
percentage of average total loans, in the second quarter of 2020
totaled 20 basis points on an annualized basis compared to eight
basis points on an annualized basis in the first quarter of 2020
and 36 basis points on an annualized basis in the second quarter of
2019. For more information regarding net charge-offs, see Table 10
in this report.
As of June 30, 2020, $79.3 million of all
loans, or 0.3%, were 60 to 89 days past due and $166.4 million, or
0.5%, were 30 to 59 days (or one payment) past due. 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. 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
June 30, 2020. Home equity loans at June 30, 2020 that
are current with regard to the contractual terms of the loan
agreement represent 98.2% of the total home equity portfolio.
Residential real estate loans at June 30, 2020 that are
current with regards to the contractual terms of the loan
agreements comprised 98.2% of total residential real estate loans
outstanding. For more information regarding past due loans, see
Table 13 in this report.
In the second quarter of 2020, the Company
recorded $1.7 billion of COVID-19 related loan modifications. These
loan modifications were comprised primarily of $882.1 million
commercial loans and $822.6 million commercial real-estate loans.
The modifications primarily changed terms to interest-only payments
or full payment deferrals.
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 credit
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 10 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 $30.3 million in non-performing PCD
loans in total non-performing loans as of June 30, 2020.
The ratio of non-performing assets to total
assets was 0.46% as of June 30, 2020, compared to 0.49% at
March 31, 2020, and 0.40% at June 30, 2019.
Non-performing assets totaled $198.5 million at June 30, 2020,
compared to $190.4 million at March 31, 2020 and $133.5
million at June 30, 2019. Non-performing loans totaled $188.3
million, or 0.60% of total loans, at June 30, 2020 compared to
$179.4 million, or 0.65% of total loans, at March 31, 2020 and
$113.4 million, or 0.45% of total loans, at June 30, 2019. The
increase in non-performing loans in the second quarter of 2020 as
compared to the prior quarter is primarily due to a $14.5 million
increase in total non-performing premium finance receivable
balances. State emergency orders and pandemic delays on processing
of return premiums, which serve as our collateral, contributed to
the increase in 90 day past due premium finance receivables. Other
real estate owned ("OREO") of $10.2 million at June 30, 2020
decreased by $829,000 compared to $11.0 million at March 31,
2020 and decreased $9.6 million compared to $19.8 million at
June 30, 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 14 in this report.
NON-INTEREST INCOME
Wealth management revenue decreased by $3.3
million during the second quarter of 2020 as compared to the first
quarter of 2020 primarily due to decreased asset management fees,
trust fees and brokerage commissions. Declines in asset management
and trust fees are primarily due to volatile equity markets
since year end. Brokerage commissions were negatively impacted in
the second quarter of 2020 due to lower transactional volume as
compared to the prior quarter. 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 $54.0
million in the second quarter of 2020 as compared to the first
quarter of 2020, primarily as a result of a $1.0 billion increase
in loans originated for sale. Loans originated for sale were
$2.2 billion in the second quarter of 2020 as compared to $1.2
billion in the first quarter of 2020. The percentage of origination
volume from refinancing activities was 70% in the second quarter of
2020 as compared to 63% in the first quarter of 2020. Mortgage
banking revenue includes revenue from activities related to
originating, selling and servicing residential real estate loans
for the secondary market.
During the second quarter of 2020, the fair
value of the mortgage servicing rights portfolio increased
primarily due to increased capitalization of $20.4 million during
the second quarter. This increase was partially offset by a
negative fair value adjustment of $8.0 million as well as a
reduction in value of $8.7 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 $589,000 on the
interest rate swaps held as economic hedges against the mortgage
servicing rights primarily related to the mark to market valuation
adjustment which was recorded in mortgage banking revenue. During
the second quarter of 2020, the Company terminated the interest
rate swaps. No economic hedges were outstanding relative to the
mortgage servicing rights portfolio at the end of the second
quarter of 2020.
The net gains recognized on investment
securities in the second quarter of 2020 were $808,000 as compared
to a net loss of $4.4 million in the first quarter of 2020. The
gains recorded in the second quarter of 2020 primarily relate to
unrealized gains on market sensitive securities held by the
Company.
Other non-interest income decreased by $3.6
million in the second quarter of 2020 as compared to the first
quarter of 2020 primarily due to lower card and merchant
services based fees, gains realized on the sales of loan and leases
in the first quarter of 2020 and losses on investment partnerships
in the second quarter. These decreases were partially offset
by market gains on BOLI investments related to non-qualified
deferred compensation accounts recorded in BOLI income.
For more information regarding non-interest
income, see Tables 15 and 16 in this report.
NON-INTEREST EXPENSE
Salaries and employee benefits expense increased
by $17.4 million in the second quarter of 2020 as compared to the
first quarter of 2020. The $17.4 million increase is comprised of
an increase of $14.6 million in commissions and incentive
compensation and an increase of $5.8 million in salaries expense
partially offset by a $3.0 million decrease in employee benefits
expense. The increase in commissions and incentive compensation is
primarily due to increased origination volume associated with the
Company's mortgage business. The increase in salaries expense is
primarily related to COVID-19 related salary incentives, the impact
of a full quarter of annual merit increases, increased staffing to
support mortgage origination and an increase in costs related to
deferred compensation plans impacted by market returns of related
BOLI investments.
Data processing expenses totaled $10.4 million
in the second quarter of 2020, an increase of $2.0 million as
compared to the first quarter of 2020. The increase in the second
quarter relates primarily to conversion costs of $4.5 million
associated with the Countryside Bank acquisition as compared to
$1.4 million of acquisition related conversion costs in the prior
quarter. No additional material conversion charges are anticipated
related to any completed acquisitions.
Advertising and marketing expenses in the second
quarter of 2020 decreased by $3.2 million as compared to the first
quarter of 2020 primarily related to lower sports sponsorship costs
due to shortened or canceled seasons. 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 $7.1 million in
the second quarter of 2020, an increase of $2.9 million as compared
to the first quarter of 2020. This increase is primarily due to
higher assessment rates impacted by declines in the Tier 1 Leverage
Ratio at the Company's bank affiliates as a result of asset growth,
including PPP loans.
Miscellaneous expense in the second quarter of
2020 increased $3.6 million as compared to the first quarter of
2020. The increase in the second quarter is primarily due to $7.2
million of contingent consideration expense accrued in the second
quarter, as compared to $329,000 in the prior quarter, related to
the previous acquisitions of mortgage operations. The increase in
the contingent consideration accrual is a result of higher
anticipated payments resulting from increases in both current and
forecasted revenues related to the acquired businesses due to the
favorable mortgage banking environment. 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 17 in this report.
INCOME TAXES
The Company recorded income tax expense of $9.0
million in the second quarter of 2020 compared to $24.3 million in
the first quarter of 2020 and $28.7 million in the second quarter
of 2019. The effective tax rates were 29.46% in the second quarter
of 2020 compared to 27.87% in the first quarter of 2020 and 26.06%
in the second 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 second 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 low and
declining interest rates and possession of excess short-term
liquidity.
Mortgage banking revenue was $102.3 million for
the second quarter of 2020 an increase of $54.0 million as compared
to the first quarter of 2020 primarily due to increased mortgage
demand associated with historically low long-term interest rates.
Services charges on deposit accounts totaled $10.4 million in the
second quarter of 2020 a decrease of $845,000 as compared to the
first quarter of 2020 primarily due to lower overdraft fees. The
Company's gross commercial and commercial real estate loan
pipelines remained strong as of June 30, 2020. Before the impact of
scheduled payments and prepayments, gross commercial and commercial
real estate loan pipelines were estimated to be approximately $1.1
billion to $1.2 billion at June 30, 2020. When adjusted for
the probability of closing, the pipelines were estimated to be
approximately $700 million to $800 million at June 30,
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, as well as value-added, out-sourced
administrative services and other services. Originations within the
insurance premium financing receivables portfolio were $3.1 billion
during the second quarter of 2020 and average balances increased by
$422.7 million as compared to the first quarter of 2020. Growth in
the commercial insurance premium finance portfolio was in part due
to hardening insurance market conditions driving the average size
of new commercial insurance premium finance receivables to
approximately $38,000 in the second quarter as compared to $31,000
in the first quarter of 2020. The increase in average balances was
more than offset by margin compression in this portfolio resulting
in a $4.2 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 second quarter of 2020, with its portfolio
of assets, including capital leases, loans and equipment on
operating leases, increasing by $231.2 million to $2.0 billion at
the end of the second quarter of 2020. Revenues from the Company's
out-sourced administrative services business were $933,000 in the
second quarter of 2020, a decrease of $179,000 from the first
quarter of 2020.
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 decreased by $3.3 million in
the second quarter of 2020 compared to the first quarter of 2020,
totaling $22.6 million in the second period. Declines in asset
management and trust fees are primarily due to volatile
equity markets since year end. Brokerage commissions were
negatively impacted in the second quarter of 2020 due to lower
transactional volume as compared to the prior quarter. At
June 30, 2020, the Company’s wealth management subsidiaries
had approximately $27.0 billion of assets under administration,
which included $3.9 billion of assets owned by the Company and its
subsidiary banks, representing a $2.0 billion increase from the
$25.0 billion of assets under administration at March 31,
2020.
ITEMS IMPACTING COMPARATIVE FINANCIAL
RESULTS
Paycheck Protection Program
On March 27, 2020, the President of the United
States signed the CARES Act which authorized the SBA to guarantee
loans under the PPP for small businesses who meet the necessary
eligibility requirements in order to keep their workers on the
payroll. The Company began accepting applications on April 3, 2020.
As of June 30, 2020, the Company secured authorization from the SBA
and funded over 11,000 PPP loans with a carrying balance of
approximately $3.3 billion.
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 10-14
in this report.
WINTRUST FINANCIAL CORPORATION
Key Operating Measures
Wintrust’s key operating measures and growth
rates for the second quarter of 2020, as compared to the first
quarter of 2020 (sequential quarter) and second quarter of 2019
(linked quarter), are shown in the table below:
|
|
|
|
|
|
|
% or(4)
basis point (bp) change from
1st Quarter
2020 |
|
% or
basis point (bp)
change from
2nd Quarter
2019 |
|
|
Three Months Ended |
|
(Dollars in thousands, except per share data) |
|
Jun 30, 2020 |
|
Mar 31, 2020 |
|
Jun 30, 2019 |
|
Net income |
|
$ |
21,659 |
|
|
$ |
62,812 |
|
|
$ |
81,466 |
|
(66 |
) |
% |
|
(73 |
) |
% |
Pre-tax
income, excluding provision for credit losses (non-GAAP)
(2) |
|
165,756 |
|
|
140,044 |
|
|
134,753 |
|
18 |
|
|
|
23 |
|
|
Pre-tax
income, excluding provision for credit losses and MSR valuation
adjustments (non-GAAP) (2) |
|
173,149 |
|
|
150,441 |
|
|
138,138 |
|
15 |
|
|
|
25 |
|
|
Net
income per common share – diluted |
|
0.34 |
|
|
1.04 |
|
|
1.38 |
|
(67 |
) |
|
|
(75 |
) |
|
Net
revenue (1) |
|
425,124 |
|
|
374,685 |
|
|
364,360 |
|
13 |
|
|
|
17 |
|
|
Net
interest income |
|
263,131 |
|
|
261,443 |
|
|
266,202 |
|
1 |
|
|
|
(1 |
) |
|
Net
interest margin |
|
2.73 |
% |
|
3.12 |
% |
|
3.62 |
% |
(39 |
) |
bp |
|
(89 |
) |
bp |
Net
interest margin - fully taxable equivalent (non-GAAP)
(2) |
|
2.74 |
|
|
3.14 |
|
|
3.64 |
|
(40 |
) |
|
|
(90 |
) |
|
Net
overhead ratio (3) |
|
0.93 |
|
|
1.33 |
|
|
1.64 |
|
(40 |
) |
|
|
(71 |
) |
|
Return on
average assets |
|
0.21 |
|
|
0.69 |
|
|
1.02 |
|
(48 |
) |
|
|
(81 |
) |
|
Return on
average common equity |
|
2.17 |
|
|
6.82 |
|
|
9.68 |
|
(465 |
) |
|
|
(751 |
) |
|
Return on average tangible common equity (non-GAAP)
(2) |
|
2.95 |
|
|
8.73 |
|
|
12.28 |
|
(578 |
) |
|
|
(933 |
) |
|
At end of period |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
33,641,769 |
|
49 |
|
% |
|
29 |
|
% |
Total
loans (5) |
|
31,402,903 |
|
|
27,807,321 |
|
|
25,304,659 |
|
52 |
|
|
|
24 |
|
|
Total
deposits |
|
35,651,874 |
|
|
31,461,660 |
|
|
27,518,815 |
|
54 |
|
|
|
30 |
|
|
Total shareholders’ equity |
|
3,990,218 |
|
|
3,700,393 |
|
|
3,446,950 |
|
32 |
|
|
|
16 |
|
|
- Net revenue is net interest income plus non-interest
income.
- See "Supplemental Non-GAAP Financial Measures/Ratios" at
Table 18 for additional information on this performance
measure/ratio.
- 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.
- Period-end balance sheet percentage changes are
annualized.
- 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 |
Six Months Ended |
(Dollars in thousands, except per share data) |
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
Jun 30,
2020 |
|
Jun 30,
2019 |
Selected Financial Condition Data (at end of
period): |
|
|
|
Total
assets |
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
|
|
|
Total
loans (1) |
|
31,402,903 |
|
|
27,807,321 |
|
|
26,800,290 |
|
|
25,710,171 |
|
|
25,304,659 |
|
|
|
|
Total
deposits |
|
35,651,874 |
|
|
31,461,660 |
|
|
30,107,138 |
|
|
28,710,379 |
|
|
27,518,815 |
|
|
|
|
Junior
subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
|
|
Total shareholders’ equity |
|
3,990,218 |
|
|
3,700,393 |
|
|
3,691,250 |
|
|
3,540,325 |
|
|
3,446,950 |
|
|
|
|
Selected Statements of Income Data: |
|
|
|
Net interest income |
|
$ |
263,131 |
|
|
$ |
261,443 |
|
|
$ |
261,879 |
|
|
$ |
264,852 |
|
|
$ |
266,202 |
|
$ |
524,574 |
|
|
$ |
528,188 |
|
Net
revenue (2) |
|
425,124 |
|
|
374,685 |
|
|
374,099 |
|
|
379,989 |
|
|
364,360 |
|
799,809 |
|
|
708,003 |
|
Net
income |
|
21,659 |
|
|
62,812 |
|
|
85,964 |
|
|
99,121 |
|
|
81,466 |
|
84,471 |
|
|
170,612 |
|
Pre-tax
income, excluding provision for credit losses (non-GAAP)
(3) |
|
165,756 |
|
|
140,044 |
|
|
124,508 |
|
|
145,435 |
|
|
134,753 |
|
305,800 |
|
|
264,022 |
|
Pre-tax
income, excluding provision for credit losses and MSR valuation
adjustments (non-GAAP) (3) |
|
173,149 |
|
|
150,441 |
|
|
122,662 |
|
|
149,411 |
|
|
138,138 |
|
323,590 |
|
|
276,151 |
|
Net
income per common share – Basic |
|
0.34 |
|
|
1.05 |
|
|
1.46 |
|
|
1.71 |
|
|
1.40 |
|
1.40 |
|
|
2.94 |
|
Net income per common share – Diluted |
|
0.34 |
|
|
1.04 |
|
|
1.44 |
|
|
1.69 |
|
|
1.38 |
|
1.38 |
|
|
2.91 |
|
Selected Financial Ratios and Other Data: |
|
|
|
Performance Ratios: |
|
|
|
Net
interest margin |
|
2.73 |
% |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
|
3.62 |
% |
2.91 |
% |
|
3.66 |
% |
Net
interest margin - fully taxable equivalent (non-GAAP)
(3) |
|
2.74 |
|
|
3.14 |
|
|
3.19 |
|
|
3.39 |
|
|
3.64 |
|
2.93 |
|
|
3.68 |
|
Non-interest income to average assets |
|
1.55 |
|
|
1.24 |
|
|
1.25 |
|
|
1.35 |
|
|
1.23 |
|
1.41 |
|
|
1.15 |
|
Non-interest expense to average assets |
|
2.48 |
|
|
2.58 |
|
|
2.78 |
|
|
2.74 |
|
|
2.87 |
|
2.53 |
|
|
2.83 |
|
Net
overhead ratio (4) |
|
0.93 |
|
|
1.33 |
|
|
1.53 |
|
|
1.40 |
|
|
1.64 |
|
1.12 |
|
|
1.68 |
|
Return on
average assets |
|
0.21 |
|
|
0.69 |
|
|
0.96 |
|
|
1.16 |
|
|
1.02 |
|
0.43 |
|
|
1.09 |
|
Return on
average common equity |
|
2.17 |
|
|
6.82 |
|
|
9.52 |
|
|
11.42 |
|
|
9.68 |
|
4.48 |
|
|
10.37 |
|
Return on
average tangible common equity (non-GAAP) (3) |
|
2.95 |
|
|
8.73 |
|
|
12.17 |
|
|
14.36 |
|
|
12.28 |
|
5.81 |
|
|
13.19 |
|
Average
total assets |
|
$ |
42,042,729 |
|
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
$ |
32,055,769 |
|
$ |
39,334,109 |
|
|
$ |
31,638,289 |
|
Average
total shareholders’ equity |
|
3,908,846 |
|
|
3,710,169 |
|
|
3,622,184 |
|
|
3,496,714 |
|
|
3,414,340 |
|
3,809,508 |
|
|
3,362,000 |
|
Average
loans to average deposits ratio |
|
87.8 |
% |
|
90.1 |
% |
|
88.8 |
% |
|
90.6 |
% |
|
93.9 |
% |
88.9 |
% |
|
93.3 |
% |
Period-end loans to deposits ratio |
|
88.1 |
|
|
88.4 |
|
|
89.0 |
|
|
89.6 |
|
|
92.0 |
|
|
|
|
Common Share Data at end of period: |
|
|
|
Market
price per common share |
|
$ |
43.62 |
|
|
$ |
32.86 |
|
|
$ |
70.90 |
|
|
$ |
64.63 |
|
|
$ |
73.16 |
|
|
|
|
Book
value per common share |
|
62.14 |
|
|
62.13 |
|
|
61.68 |
|
|
60.24 |
|
|
58.62 |
|
|
|
|
Tangible
book value per common share (non-GAAP) (3) |
|
50.23 |
|
|
50.18 |
|
|
49.70 |
|
|
49.16 |
|
|
47.48 |
|
|
|
|
Common shares outstanding |
|
57,573,672 |
|
|
57,545,352 |
|
|
57,821,891 |
|
|
56,698,429 |
|
|
56,667,846 |
|
|
|
|
Other Data at end of period: |
|
|
|
Tier 1
leverage ratio (5) |
|
8.1 |
% |
|
8.5 |
% |
|
8.7 |
% |
|
8.8 |
% |
|
9.1 |
% |
|
|
|
Risk-based capital ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1
capital ratio (5) |
|
10.1 |
|
|
9.3 |
|
|
9.6 |
|
|
9.7 |
|
|
9.6 |
|
|
|
|
Common
equity tier 1 capital ratio(5) |
|
8.8 |
|
|
8.9 |
|
|
9.2 |
|
|
9.3 |
|
|
9.2 |
|
|
|
|
Total
capital ratio (5) |
|
12.8 |
|
|
11.9 |
|
|
12.2 |
|
|
12.4 |
|
|
12.4 |
|
|
|
|
Allowance
for credit losses (6) |
|
$ |
373,174 |
|
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
|
|
|
Allowance
for loan and unfunded lending-related commitment losses to total
loans |
|
1.19 |
% |
|
0.91 |
% |
|
0.59 |
% |
|
0.64 |
% |
|
0.64 |
% |
|
|
|
Number
of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank subsidiaries |
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
|
|
|
Banking offices |
|
186 |
|
|
187 |
|
|
187 |
|
|
174 |
|
|
172 |
|
|
|
|
- Excludes mortgage loans held-for-sale.
- Net revenue includes net interest income and non-interest
income.
- See “Supplemental Non-GAAP Financial Measures/Ratios” at
Table 18 for additional information on this performance
measure/ratio.
- 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.
- Capital ratios for current quarter-end are
estimated.
- 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) |
|
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
(In
thousands) |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
344,999 |
|
|
$ |
349,118 |
|
|
$ |
286,167 |
|
|
$ |
448,755 |
|
|
$ |
300,934 |
|
Federal
funds sold and securities purchased under resale agreements |
|
58 |
|
|
309 |
|
|
309 |
|
|
59 |
|
|
58 |
|
Interest
bearing deposits with banks |
|
4,015,072 |
|
|
1,943,743 |
|
|
2,164,560 |
|
|
2,260,806 |
|
|
1,437,105 |
|
Available-for-sale securities, at fair value |
|
3,194,961 |
|
|
3,570,959 |
|
|
3,106,214 |
|
|
2,270,059 |
|
|
2,186,154 |
|
Held-to-maturity securities, at amortized cost |
|
728,465 |
|
|
865,376 |
|
|
1,134,400 |
|
|
1,095,802 |
|
|
1,191,634 |
|
Trading
account securities |
|
890 |
|
|
2,257 |
|
|
1,068 |
|
|
3,204 |
|
|
2,430 |
|
Equity
securities with readily determinable fair value |
|
52,460 |
|
|
47,310 |
|
|
50,840 |
|
|
46,086 |
|
|
44,319 |
|
Federal
Home Loan Bank and Federal Reserve Bank stock |
|
135,571 |
|
|
134,546 |
|
|
100,739 |
|
|
92,714 |
|
|
92,026 |
|
Brokerage
customer receivables |
|
14,623 |
|
|
16,293 |
|
|
16,573 |
|
|
14,943 |
|
|
13,569 |
|
Mortgage
loans held-for-sale |
|
833,163 |
|
|
656,934 |
|
|
377,313 |
|
|
464,727 |
|
|
394,975 |
|
Loans,
net of unearned income |
|
31,402,903 |
|
|
27,807,321 |
|
|
26,800,290 |
|
|
25,710,171 |
|
|
25,304,659 |
|
Allowance
for loan losses |
|
(313,510 |
) |
|
(216,050 |
) |
|
(156,828 |
) |
|
(161,763 |
) |
|
(160,421 |
) |
Net loans |
|
31,089,393 |
|
|
27,591,271 |
|
|
26,643,462 |
|
|
25,548,408 |
|
|
25,144,238 |
|
Premises
and equipment, net |
|
769,909 |
|
|
764,583 |
|
|
754,328 |
|
|
721,856 |
|
|
711,214 |
|
Lease
investments, net |
|
237,040 |
|
|
207,147 |
|
|
231,192 |
|
|
228,647 |
|
|
230,111 |
|
Accrued
interest receivable and other assets |
|
1,437,832 |
|
|
1,460,168 |
|
|
1,061,141 |
|
|
1,087,864 |
|
|
1,023,896 |
|
Trade
date securities receivable |
|
— |
|
|
502,207 |
|
|
— |
|
|
— |
|
|
237,607 |
|
Goodwill |
|
644,213 |
|
|
643,441 |
|
|
645,220 |
|
|
584,315 |
|
|
584,911 |
|
Other
intangible assets |
|
41,368 |
|
|
44,185 |
|
|
47,057 |
|
|
43,657 |
|
|
46,588 |
|
Total assets |
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
$ |
10,204,791 |
|
|
$ |
7,556,755 |
|
|
$ |
7,216,758 |
|
|
$ |
7,067,960 |
|
|
$ |
6,719,958 |
|
Interest bearing |
|
25,447,083 |
|
|
23,904,905 |
|
|
22,890,380 |
|
|
21,642,419 |
|
|
20,798,857 |
|
Total deposits |
|
35,651,874 |
|
|
31,461,660 |
|
|
30,107,138 |
|
|
28,710,379 |
|
|
27,518,815 |
|
Federal
Home Loan Bank advances |
|
1,228,416 |
|
|
1,174,894 |
|
|
674,870 |
|
|
574,847 |
|
|
574,823 |
|
Other
borrowings |
|
508,535 |
|
|
487,503 |
|
|
418,174 |
|
|
410,488 |
|
|
418,057 |
|
Subordinated notes |
|
436,298 |
|
|
436,179 |
|
|
436,095 |
|
|
435,979 |
|
|
436,021 |
|
Junior
subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
Trade
date securities payable |
|
— |
|
|
— |
|
|
— |
|
|
226 |
|
|
— |
|
Accrued
interest payable and other liabilities |
|
1,471,110 |
|
|
1,285,652 |
|
|
1,039,490 |
|
|
986,092 |
|
|
993,537 |
|
Total liabilities |
|
39,549,799 |
|
|
35,099,454 |
|
|
32,929,333 |
|
|
31,371,577 |
|
|
30,194,819 |
|
Shareholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
412,500 |
|
|
125,000 |
|
|
125,000 |
|
|
125,000 |
|
|
125,000 |
|
Common stock |
|
58,294 |
|
|
58,266 |
|
|
57,951 |
|
|
56,825 |
|
|
56,794 |
|
Surplus |
|
1,643,864 |
|
|
1,652,063 |
|
|
1,650,278 |
|
|
1,574,011 |
|
|
1,569,969 |
|
Treasury stock |
|
(44,891 |
) |
|
(44,891 |
) |
|
(6,931 |
) |
|
(6,799 |
) |
|
(6,650 |
) |
Retained earnings |
|
1,921,048 |
|
|
1,917,558 |
|
|
1,899,630 |
|
|
1,830,165 |
|
|
1,747,266 |
|
Accumulated other comprehensive loss |
|
(597 |
) |
|
(7,603 |
) |
|
(34,678 |
) |
|
(38,877 |
) |
|
(45,429 |
) |
Total shareholders’ equity |
|
3,990,218 |
|
|
3,700,393 |
|
|
3,691,250 |
|
|
3,540,325 |
|
|
3,446,950 |
|
Total liabilities and shareholders’ equity |
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
WINTRUST FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
|
Three Months Ended |
Six Months Ended |
(In
thousands, except per share data) |
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
Jun 30,
2020 |
|
Jun 30,
2019 |
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
294,746 |
|
|
$ |
301,839 |
|
|
$ |
308,055 |
|
|
$ |
314,277 |
|
|
$ |
309,161 |
|
$ |
596,585 |
|
|
$ |
606,148 |
|
Mortgage loans held-for-sale |
4,764 |
|
|
3,165 |
|
|
3,201 |
|
|
3,478 |
|
|
3,104 |
|
7,929 |
|
|
5,313 |
|
Interest bearing deposits with banks |
1,310 |
|
|
4,768 |
|
|
8,971 |
|
|
10,326 |
|
|
5,206 |
|
6,078 |
|
|
10,506 |
|
Federal funds sold and securities purchased under resale
agreements |
16 |
|
|
86 |
|
|
390 |
|
|
310 |
|
|
— |
|
102 |
|
|
— |
|
Investment securities |
27,105 |
|
|
32,467 |
|
|
27,611 |
|
|
24,758 |
|
|
27,721 |
|
59,572 |
|
|
55,677 |
|
Trading account securities |
13 |
|
|
7 |
|
|
6 |
|
|
20 |
|
|
5 |
|
20 |
|
|
13 |
|
Federal Home Loan Bank and Federal Reserve Bank stock |
1,765 |
|
|
1,577 |
|
|
1,328 |
|
|
1,294 |
|
|
1,439 |
|
3,342 |
|
|
2,794 |
|
Brokerage customer receivables |
97 |
|
|
158 |
|
|
169 |
|
|
164 |
|
|
178 |
|
255 |
|
|
333 |
|
Total interest income |
329,816 |
|
|
344,067 |
|
|
349,731 |
|
|
354,627 |
|
|
346,814 |
|
673,883 |
|
|
680,784 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
50,057 |
|
|
67,435 |
|
|
74,724 |
|
|
76,168 |
|
|
67,024 |
|
117,492 |
|
|
128,000 |
|
Interest on Federal Home Loan Bank advances |
4,934 |
|
|
3,360 |
|
|
1,461 |
|
|
1,774 |
|
|
4,193 |
|
8,294 |
|
|
6,643 |
|
Interest on other borrowings |
3,436 |
|
|
3,546 |
|
|
3,273 |
|
|
3,466 |
|
|
3,525 |
|
6,982 |
|
|
7,158 |
|
Interest on subordinated notes |
5,506 |
|
|
5,472 |
|
|
5,504 |
|
|
5,470 |
|
|
2,806 |
|
10,978 |
|
|
4,581 |
|
Interest on junior subordinated debentures |
2,752 |
|
|
2,811 |
|
|
2,890 |
|
|
2,897 |
|
|
3,064 |
|
5,563 |
|
|
6,214 |
|
Total interest expense |
66,685 |
|
|
82,624 |
|
|
87,852 |
|
|
89,775 |
|
|
80,612 |
|
149,309 |
|
|
152,596 |
|
Net interest income |
263,131 |
|
|
261,443 |
|
|
261,879 |
|
|
264,852 |
|
|
266,202 |
|
524,574 |
|
|
528,188 |
|
Provision for credit losses |
135,053 |
|
|
52,961 |
|
|
7,826 |
|
|
10,834 |
|
|
24,580 |
|
188,014 |
|
|
35,204 |
|
Net interest income after provision for credit losses |
128,078 |
|
|
208,482 |
|
|
254,053 |
|
|
254,018 |
|
|
241,622 |
|
336,560 |
|
|
492,984 |
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
Wealth management |
22,636 |
|
|
25,941 |
|
|
24,999 |
|
|
23,999 |
|
|
24,139 |
|
48,577 |
|
|
48,116 |
|
Mortgage banking |
102,324 |
|
|
48,326 |
|
|
47,860 |
|
|
50,864 |
|
|
37,411 |
|
150,650 |
|
|
55,569 |
|
Service charges on deposit accounts |
10,420 |
|
|
11,265 |
|
|
10,973 |
|
|
9,972 |
|
|
9,277 |
|
21,685 |
|
|
18,125 |
|
Gains (losses) on investment securities, net |
808 |
|
|
(4,359 |
) |
|
587 |
|
|
710 |
|
|
864 |
|
(3,551 |
) |
|
2,228 |
|
Fees from covered call options |
— |
|
|
2,292 |
|
|
1,243 |
|
|
— |
|
|
643 |
|
2,292 |
|
|
2,427 |
|
Trading (losses) gains, net |
(634 |
) |
|
(451 |
) |
|
46 |
|
|
11 |
|
|
(44 |
) |
(1,085 |
) |
|
(215 |
) |
Operating lease income, net |
11,785 |
|
|
11,984 |
|
|
12,487 |
|
|
12,025 |
|
|
11,733 |
|
23,769 |
|
|
22,529 |
|
Other |
14,654 |
|
|
18,244 |
|
|
14,025 |
|
|
17,556 |
|
|
14,135 |
|
32,898 |
|
|
31,036 |
|
Total non-interest income |
161,993 |
|
|
113,242 |
|
|
112,220 |
|
|
115,137 |
|
|
98,158 |
|
275,235 |
|
|
179,815 |
|
Non-interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
154,156 |
|
|
136,762 |
|
|
145,941 |
|
|
141,024 |
|
|
133,732 |
|
290,918 |
|
|
259,455 |
|
Equipment |
15,846 |
|
|
14,834 |
|
|
14,485 |
|
|
13,314 |
|
|
12,759 |
|
30,680 |
|
|
24,529 |
|
Operating lease equipment |
9,292 |
|
|
9,260 |
|
|
9,766 |
|
|
8,907 |
|
|
8,768 |
|
18,552 |
|
|
17,087 |
|
Occupancy, net |
16,893 |
|
|
17,547 |
|
|
17,132 |
|
|
14,991 |
|
|
15,921 |
|
34,440 |
|
|
32,166 |
|
Data processing |
10,406 |
|
|
8,373 |
|
|
7,569 |
|
|
6,522 |
|
|
6,204 |
|
18,779 |
|
|
13,729 |
|
Advertising and marketing |
7,704 |
|
|
10,862 |
|
|
12,517 |
|
|
13,375 |
|
|
12,845 |
|
18,566 |
|
|
22,703 |
|
Professional fees |
7,687 |
|
|
6,721 |
|
|
7,650 |
|
|
8,037 |
|
|
6,228 |
|
14,408 |
|
|
11,784 |
|
Amortization of other intangible assets |
2,820 |
|
|
2,863 |
|
|
3,017 |
|
|
2,928 |
|
|
2,957 |
|
5,683 |
|
|
5,899 |
|
FDIC insurance |
7,081 |
|
|
4,135 |
|
|
1,348 |
|
|
148 |
|
|
4,127 |
|
11,216 |
|
|
7,703 |
|
OREO expense, net |
237 |
|
|
(876 |
) |
|
536 |
|
|
1,170 |
|
|
1,290 |
|
(639 |
) |
|
1,922 |
|
Other |
27,246 |
|
|
24,160 |
|
|
29,630 |
|
|
24,138 |
|
|
24,776 |
|
51,406 |
|
|
47,004 |
|
Total non-interest expense |
259,368 |
|
|
234,641 |
|
|
249,591 |
|
|
234,554 |
|
|
229,607 |
|
494,009 |
|
|
443,981 |
|
Income before taxes |
30,703 |
|
|
87,083 |
|
|
116,682 |
|
|
134,601 |
|
|
110,173 |
|
117,786 |
|
|
228,818 |
|
Income tax expense |
9,044 |
|
|
24,271 |
|
|
30,718 |
|
|
35,480 |
|
|
28,707 |
|
33,315 |
|
|
58,206 |
|
Net income |
$ |
21,659 |
|
|
$ |
62,812 |
|
|
$ |
85,964 |
|
|
$ |
99,121 |
|
|
$ |
81,466 |
|
$ |
84,471 |
|
|
$ |
170,612 |
|
Preferred stock dividends |
2,050 |
|
|
2,050 |
|
|
2,050 |
|
|
2,050 |
|
|
2,050 |
|
4,100 |
|
|
4,100 |
|
Net income applicable to common shares |
$ |
19,609 |
|
|
$ |
60,762 |
|
|
$ |
83,914 |
|
|
$ |
97,071 |
|
|
$ |
79,416 |
|
$ |
80,371 |
|
|
$ |
166,512 |
|
Net income per common share - Basic |
$ |
0.34 |
|
|
$ |
1.05 |
|
|
$ |
1.46 |
|
|
$ |
1.71 |
|
|
$ |
1.40 |
|
$ |
1.40 |
|
|
$ |
2.94 |
|
Net income per common share - Diluted |
$ |
0.34 |
|
|
$ |
1.04 |
|
|
$ |
1.44 |
|
|
$ |
1.69 |
|
|
$ |
1.38 |
|
$ |
1.38 |
|
|
$ |
2.91 |
|
Cash dividends declared per common share |
$ |
0.28 |
|
|
$ |
0.28 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
$ |
0.56 |
|
|
$ |
0.50 |
|
Weighted average common shares outstanding |
57,567 |
|
|
57,620 |
|
|
57,538 |
|
|
56,690 |
|
|
56,662 |
|
57,593 |
|
|
56,596 |
|
Dilutive potential common shares |
414 |
|
|
575 |
|
|
874 |
|
|
773 |
|
|
699 |
|
481 |
|
|
700 |
|
Average common shares and dilutive common shares |
57,981 |
|
|
58,195 |
|
|
58,412 |
|
|
57,463 |
|
|
57,361 |
|
58,074 |
|
|
57,296 |
|
TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES AND
COMMERCIAL REAL ESTATE BY STATE
|
|
|
|
|
|
|
|
|
|
% Growth From |
(Dollars in thousands) |
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
Dec 31,
2019 (1) |
|
Jun 30,
2019 |
Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial, and other |
$ |
8,498,931 |
|
|
$ |
8,999,728 |
|
|
$ |
8,257,614 |
|
|
$ |
8,180,070 |
|
|
$ |
8,246,449 |
|
6 |
% |
|
3 |
% |
Commercial PPP loans |
3,335,368 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
100 |
|
|
100 |
|
Commercial, industrial, and other - PCD (2) |
24,933 |
|
|
26,158 |
|
|
28,306 |
|
|
15,532 |
|
|
24,325 |
|
(24 |
) |
|
2 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
1,285,282 |
|
|
1,237,274 |
|
|
1,200,783 |
|
|
1,025,961 |
|
|
984,138 |
|
14 |
|
|
31 |
|
Non-construction |
6,722,438 |
|
|
6,736,706 |
|
|
6,582,053 |
|
|
6,305,423 |
|
|
6,165,115 |
|
4 |
|
|
9 |
|
Commercial real estate - PCD (2) |
193,025 |
|
|
211,551 |
|
|
237,440 |
|
|
117,283 |
|
|
126,991 |
|
(38 |
) |
|
52 |
|
Home equity |
466,596 |
|
|
494,655 |
|
|
513,066 |
|
|
512,303 |
|
|
527,370 |
|
(18 |
) |
|
(12 |
) |
Home equity - PCD (2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
Residential real estate |
1,410,798 |
|
|
1,359,971 |
|
|
1,336,093 |
|
|
1,208,706 |
|
|
1,107,911 |
|
11 |
|
|
27 |
|
Residential real estate - PCD (2) |
16,631 |
|
|
17,418 |
|
|
18,128 |
|
|
9,960 |
|
|
10,267 |
|
(17 |
) |
|
62 |
|
Premium Finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance |
3,999,774 |
|
|
3,465,055 |
|
|
3,442,027 |
|
|
3,449,950 |
|
|
3,368,423 |
|
33 |
|
|
19 |
|
Life insurance |
5,277,126 |
|
|
5,084,695 |
|
|
4,935,320 |
|
|
4,654,588 |
|
|
4,487,921 |
|
14 |
|
|
18 |
|
Premium finance receivables - PCD (2) |
123,676 |
|
|
136,944 |
|
|
139,282 |
|
|
140,908 |
|
|
146,557 |
|
(23 |
) |
|
(16 |
) |
Consumer and other |
46,855 |
|
|
35,546 |
|
|
107,962 |
|
|
87,161 |
|
|
106,547 |
|
NM |
|
(56 |
) |
Consumer and other - PCD (2) |
1,470 |
|
|
1,620 |
|
|
2,216 |
|
|
2,326 |
|
|
2,645 |
|
(68 |
) |
|
(44 |
) |
Total loans, net of unearned income |
$ |
31,402,903 |
|
|
$ |
27,807,321 |
|
|
$ |
26,800,290 |
|
|
$ |
25,710,171 |
|
|
$ |
25,304,659 |
|
35 |
% |
|
24 |
% |
Mix: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial, and other |
28 |
% |
|
32 |
% |
|
31 |
% |
|
32 |
% |
|
33 |
% |
|
|
|
Commercial PPP loans |
11 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Commercial, industrial, and other - PCD (2) |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
4 |
|
|
4 |
|
|
4 |
|
|
4 |
|
|
4 |
|
|
|
|
Non-construction |
21 |
|
|
24 |
|
|
25 |
|
|
25 |
|
|
24 |
|
|
|
|
Commercial real estate - PCD (2) |
1 |
|
|
1 |
|
|
1 |
|
|
0 |
|
|
1 |
|
|
|
|
Home equity |
1 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
|
|
Home equity - PCD (2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Residential real estate |
4 |
|
|
5 |
|
|
5 |
|
|
5 |
|
|
4 |
|
|
|
|
Residential real estate - PCD (2) |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
Premium Finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance |
13 |
|
|
13 |
|
|
13 |
|
|
13 |
|
|
13 |
|
|
|
|
Life insurance |
17 |
|
|
18 |
|
|
18 |
|
|
18 |
|
|
18 |
|
|
|
|
Premium finance receivables - PCD (2) |
0 |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
|
|
Consumer and other |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
Consumer and other - PCD (2) |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
Total loans, net of unearned income |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
- Annualized.
- 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.
|
Jun 30, 2020 |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
|
% of
Total
Balance |
|
|
% of
Total
Balance |
|
|
% of
Total
Balance |
|
|
% of
Total
Balance |
|
|
% of
Total
Balance |
(Dollars in thousands) |
Balance |
|
Balance |
|
Balance |
|
Balance |
|
Balance |
Commercial real estate - collateral location by
state: |
|
|
|
|
|
|
|
|
|
|
Illinois |
$ |
6,198,486 |
|
75.6 |
% |
|
$ |
6,171,606 |
|
75.4 |
% |
|
$ |
6,176,353 |
|
77.0 |
% |
|
$ |
5,654,827 |
|
75.9 |
% |
|
$ |
5,505,290 |
|
75.7 |
% |
Wisconsin |
760,839 |
|
9.3 |
|
|
793,145 |
|
9.7 |
|
|
744,975 |
|
9.3 |
|
|
744,577 |
|
10.0 |
|
|
740,288 |
|
10.2 |
|
Total primary markets |
$ |
6,959,325 |
|
84.9 |
% |
|
$ |
6,964,751 |
|
85.1 |
% |
|
$ |
6,921,328 |
|
86.3 |
% |
|
$ |
6,399,404 |
|
85.9 |
% |
|
$ |
6,245,578 |
|
85.9 |
% |
Indiana |
249,423 |
|
3.0 |
|
|
249,680 |
|
3.1 |
|
|
218,963 |
|
2.7 |
|
|
193,350 |
|
2.6 |
|
|
179,977 |
|
2.5 |
|
Florida |
133,810 |
|
1.6 |
|
|
126,786 |
|
1.5 |
|
|
114,629 |
|
1.4 |
|
|
80,120 |
|
1.1 |
|
|
60,343 |
|
0.8 |
|
Arizona |
78,135 |
|
1.0 |
|
|
72,214 |
|
0.9 |
|
|
64,022 |
|
0.8 |
|
|
62,657 |
|
0.8 |
|
|
62,607 |
|
0.9 |
|
California |
81,634 |
|
1.0 |
|
|
63,883 |
|
0.8 |
|
|
64,345 |
|
0.8 |
|
|
67,999 |
|
0.9 |
|
|
68,497 |
|
0.9 |
|
Other |
698,418 |
|
8.5 |
|
|
708,217 |
|
8.6 |
|
|
636,989 |
|
8.0 |
|
|
645,137 |
|
8.7 |
|
|
659,242 |
|
9.0 |
|
Total commercial real estate |
$ |
8,200,745 |
|
100 |
% |
|
$ |
8,185,531 |
|
100 |
% |
|
$ |
8,020,276 |
|
100 |
% |
|
$ |
7,448,667 |
|
100 |
% |
|
$ |
7,276,244 |
|
100 |
% |
TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH
RATES
|
|
|
|
|
|
|
|
|
|
% Growth From |
(Dollars in thousands) |
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
Dec 31,
2019 (1) |
|
Jun 30,
2019 |
Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
$ |
10,204,791 |
|
|
$ |
7,556,755 |
|
|
$ |
7,216,758 |
|
|
$ |
7,067,960 |
|
|
$ |
6,719,958 |
|
83 |
% |
|
52 |
% |
NOW and interest bearing demand deposits |
3,440,348 |
|
|
3,181,159 |
|
|
3,093,159 |
|
|
2,966,098 |
|
|
2,788,976 |
|
23 |
|
|
23 |
|
Wealth management deposits (2) |
4,433,020 |
|
|
3,936,968 |
|
|
3,123,063 |
|
|
2,795,838 |
|
|
3,220,256 |
|
84 |
|
|
38 |
|
Money market |
9,288,976 |
|
|
8,114,659 |
|
|
7,854,189 |
|
|
7,326,899 |
|
|
6,460,098 |
|
37 |
|
|
44 |
|
Savings |
3,447,352 |
|
|
3,282,340 |
|
|
3,196,698 |
|
|
2,934,348 |
|
|
2,823,904 |
|
16 |
|
|
22 |
|
Time certificates of deposit |
4,837,387 |
|
|
5,389,779 |
|
|
5,623,271 |
|
|
5,619,236 |
|
|
5,505,623 |
|
(28 |
) |
|
(12 |
) |
Total deposits |
$ |
35,651,874 |
|
|
$ |
31,461,660 |
|
|
$ |
30,107,138 |
|
|
$ |
28,710,379 |
|
|
$ |
27,518,815 |
|
37 |
% |
|
30 |
% |
Mix: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
29 |
% |
|
24 |
% |
|
24 |
% |
|
25 |
% |
|
24 |
% |
|
|
|
NOW and interest bearing demand deposits |
10 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
|
|
Wealth management deposits (2) |
12 |
|
|
13 |
|
|
10 |
|
|
10 |
|
|
12 |
|
|
|
|
Money market |
25 |
|
|
26 |
|
|
26 |
|
|
25 |
|
|
24 |
|
|
|
|
Savings |
10 |
|
|
10 |
|
|
11 |
|
|
10 |
|
|
10 |
|
|
|
|
Time certificates of deposit |
14 |
|
|
17 |
|
|
19 |
|
|
20 |
|
|
20 |
|
|
|
|
Total deposits |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
- Annualized.
- 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 June 30, 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 |
$ |
1,690 |
|
|
$ |
33,600 |
|
|
$ |
59,988 |
|
|
$ |
651,964 |
|
|
$ |
747,242 |
|
|
1.65 |
% |
4-6
months |
609 |
|
|
31,127 |
|
|
— |
|
|
561,696 |
|
|
593,432 |
|
|
1.53 |
|
7-9
months |
— |
|
|
9,547 |
|
|
— |
|
|
802,262 |
|
|
811,809 |
|
|
1.91 |
|
10-12
months |
— |
|
|
14,830 |
|
|
— |
|
|
1,223,365 |
|
|
1,238,195 |
|
|
1.93 |
|
13-18
months |
1,401 |
|
|
15,049 |
|
|
— |
|
|
1,012,797 |
|
|
1,029,247 |
|
|
1.99 |
|
19-24
months |
— |
|
|
4,580 |
|
|
— |
|
|
200,078 |
|
|
204,658 |
|
|
1.19 |
|
24+
months |
88 |
|
|
4,395 |
|
|
— |
|
|
208,321 |
|
|
212,804 |
|
|
1.38 |
|
Total |
$ |
3,788 |
|
|
$ |
113,128 |
|
|
$ |
59,988 |
|
|
$ |
4,660,483 |
|
|
$ |
4,837,387 |
|
|
1.79 |
% |
- This category of certificates of deposit is shown by
contractual maturity date.
- This category includes variable rate certificates of
deposit and savings certificates with the majority repricing on at
least a monthly basis.
- Weighted-average rate excludes the impact of purchase
accounting fair value adjustments.
TABLE 4: QUARTERLY AVERAGE BALANCES
|
|
Average Balance for three months ended, |
|
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
(In
thousands) |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Interest-bearing deposits with banks and cash equivalents
(1) |
|
$ |
3,240,167 |
|
|
$ |
1,418,809 |
|
|
$ |
2,206,251 |
|
|
$ |
1,960,898 |
|
|
$ |
893,332 |
|
Investment securities (2) |
|
4,309,471 |
|
|
4,780,709 |
|
|
3,909,699 |
|
|
3,410,090 |
|
|
3,653,580 |
|
FHLB and
FRB stock |
|
135,360 |
|
|
114,829 |
|
|
94,843 |
|
|
92,583 |
|
|
105,491 |
|
Liquidity management assets (6) |
|
7,684,998 |
|
|
6,314,347 |
|
|
6,210,793 |
|
|
5,463,571 |
|
|
4,652,403 |
|
Other
earning assets (3)(6) |
|
16,917 |
|
|
19,166 |
|
|
18,353 |
|
|
17,809 |
|
|
15,719 |
|
Mortgage
loans held-for-sale |
|
705,702 |
|
|
403,262 |
|
|
381,878 |
|
|
379,870 |
|
|
281,732 |
|
Loans,
net of unearned income (4)(6) |
|
30,336,626 |
|
|
26,936,728 |
|
|
26,137,722 |
|
|
25,346,290 |
|
|
24,553,263 |
|
Total earning assets (6) |
|
38,744,243 |
|
|
33,673,503 |
|
|
32,748,746 |
|
|
31,207,540 |
|
|
29,503,117 |
|
Allowance
for loan and investment security losses (7) |
|
(222,485 |
) |
|
(176,291 |
) |
|
(167,759 |
) |
|
(168,423 |
) |
|
(164,231 |
) |
Cash and
due from banks |
|
352,423 |
|
|
321,982 |
|
|
316,631 |
|
|
297,475 |
|
|
273,679 |
|
Other
assets |
|
3,168,548 |
|
|
2,806,296 |
|
|
2,747,572 |
|
|
2,618,000 |
|
|
2,443,204 |
|
Total assets |
|
$ |
42,042,729 |
|
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
$ |
32,055,769 |
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
interest bearing demand deposits |
|
$ |
3,323,124 |
|
|
$ |
3,113,733 |
|
|
$ |
3,016,991 |
|
|
$ |
2,912,961 |
|
|
$ |
2,878,021 |
|
Wealth
management deposits |
|
4,380,996 |
|
|
2,838,719 |
|
|
2,934,292 |
|
|
2,888,817 |
|
|
2,605,690 |
|
Money
market accounts |
|
8,727,966 |
|
|
7,990,775 |
|
|
7,647,635 |
|
|
6,956,755 |
|
|
6,095,285 |
|
Savings
accounts |
|
3,394,480 |
|
|
3,189,835 |
|
|
3,028,763 |
|
|
2,837,039 |
|
|
2,752,828 |
|
Time
deposits |
|
5,104,701 |
|
|
5,526,407 |
|
|
5,682,449 |
|
|
5,590,228 |
|
|
5,322,384 |
|
Interest-bearing deposits |
|
24,931,267 |
|
|
22,659,469 |
|
|
22,310,130 |
|
|
21,185,800 |
|
|
19,654,208 |
|
Federal
Home Loan Bank advances |
|
1,214,375 |
|
|
951,613 |
|
|
596,594 |
|
|
574,833 |
|
|
869,812 |
|
Other
borrowings |
|
493,350 |
|
|
469,577 |
|
|
415,092 |
|
|
416,300 |
|
|
419,064 |
|
Subordinated notes |
|
436,226 |
|
|
436,119 |
|
|
436,025 |
|
|
436,041 |
|
|
220,771 |
|
Junior
subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
Total interest-bearing liabilities |
|
27,328,784 |
|
|
24,770,344 |
|
|
24,011,407 |
|
|
22,866,540 |
|
|
21,417,421 |
|
Non-interest bearing deposits |
|
9,607,528 |
|
|
7,235,177 |
|
|
7,128,166 |
|
|
6,776,786 |
|
|
6,487,627 |
|
Other
liabilities |
|
1,197,571 |
|
|
909,800 |
|
|
883,433 |
|
|
814,552 |
|
|
736,381 |
|
Equity |
|
3,908,846 |
|
|
3,710,169 |
|
|
3,622,184 |
|
|
3,496,714 |
|
|
3,414,340 |
|
Total liabilities and shareholders’ equity |
|
$ |
42,042,729 |
|
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
$ |
32,055,769 |
|
|
|
|
|
|
|
|
|
|
|
|
Net free funds/contribution (5) |
|
$ |
11,415,459 |
|
|
$ |
8,903,159 |
|
|
$ |
8,737,339 |
|
|
$ |
8,341,000 |
|
|
$ |
8,085,696 |
|
- Includes interest-bearing deposits from banks, federal
funds sold and securities purchased under resale
agreements.
- 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.
- Other earning assets include brokerage customer receivables
and trading account securities.
- Loans, net of unearned income, include non-accrual
loans.
- 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.
- See "Supplemental Non-GAAP Financial Measures/Ratios" at
Table 18 for additional information on this performance
measure/ratio.
- 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, |
|
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
(In
thousands) |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks and cash equivalents |
|
$ |
1,326 |
|
|
$ |
4,854 |
|
|
$ |
9,361 |
|
|
$ |
10,636 |
|
|
$ |
5,206 |
|
Investment securities |
|
27,643 |
|
|
33,018 |
|
|
28,184 |
|
|
25,332 |
|
|
28,290 |
|
FHLB and
FRB stock |
|
1,765 |
|
|
1,577 |
|
|
1,328 |
|
|
1,294 |
|
|
1,439 |
|
Liquidity management assets (2) |
|
30,734 |
|
|
39,449 |
|
|
38,873 |
|
|
37,262 |
|
|
34,935 |
|
Other
earning assets (2) |
|
113 |
|
|
167 |
|
|
176 |
|
|
189 |
|
|
184 |
|
Mortgage
loans held-for-sale |
|
4,764 |
|
|
3,165 |
|
|
3,201 |
|
|
3,478 |
|
|
3,104 |
|
Loans,
net of unearned income (2) |
|
295,322 |
|
|
302,699 |
|
|
308,947 |
|
|
315,255 |
|
|
310,191 |
|
Total interest income |
|
$ |
330,933 |
|
|
$ |
345,480 |
|
|
$ |
351,197 |
|
|
$ |
356,184 |
|
|
$ |
348,414 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
NOW and
interest bearing demand deposits |
|
$ |
1,561 |
|
|
$ |
3,665 |
|
|
$ |
4,622 |
|
|
$ |
5,291 |
|
|
$ |
5,553 |
|
Wealth
management deposits |
|
7,244 |
|
|
6,935 |
|
|
7,867 |
|
|
9,163 |
|
|
7,091 |
|
Money
market accounts |
|
13,140 |
|
|
22,363 |
|
|
25,603 |
|
|
25,426 |
|
|
21,451 |
|
Savings
accounts |
|
3,840 |
|
|
5,790 |
|
|
6,145 |
|
|
5,622 |
|
|
4,959 |
|
Time
deposits |
|
24,272 |
|
|
28,682 |
|
|
30,487 |
|
|
30,666 |
|
|
27,970 |
|
Interest-bearing deposits |
|
50,057 |
|
|
67,435 |
|
|
74,724 |
|
|
76,168 |
|
|
67,024 |
|
Federal
Home Loan Bank advances |
|
4,934 |
|
|
3,360 |
|
|
1,461 |
|
|
1,774 |
|
|
4,193 |
|
Other
borrowings |
|
3,436 |
|
|
3,546 |
|
|
3,273 |
|
|
3,466 |
|
|
3,525 |
|
Subordinated notes |
|
5,506 |
|
|
5,472 |
|
|
5,504 |
|
|
5,470 |
|
|
2,806 |
|
Junior
subordinated debentures |
|
2,752 |
|
|
2,811 |
|
|
2,890 |
|
|
2,897 |
|
|
3,064 |
|
Total interest expense |
|
$ |
66,685 |
|
|
$ |
82,624 |
|
|
$ |
87,852 |
|
|
$ |
89,775 |
|
|
$ |
80,612 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fully taxable-equivalent adjustment |
|
(1,117 |
) |
|
(1,413 |
) |
|
(1,466 |
) |
|
(1,557 |
) |
|
(1,600 |
) |
Net
interest income (GAAP) (1) |
|
263,131 |
|
|
261,443 |
|
|
261,879 |
|
|
264,852 |
|
|
266,202 |
|
Fully
taxable-equivalent adjustment |
|
1,117 |
|
|
1,413 |
|
|
1,466 |
|
|
1,557 |
|
|
1,600 |
|
Net interest income, fully taxable-equivalent (non-GAAP)
(1) |
|
$ |
264,248 |
|
|
$ |
262,856 |
|
|
$ |
263,345 |
|
|
$ |
266,409 |
|
|
$ |
267,802 |
|
- See "Supplemental Non-GAAP Financial Measures/Ratios" at
Table 18 for additional information on this performance
measure/ratio.
- 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, |
|
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
Yield earned on: |
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks and cash equivalents |
|
0.16 |
% |
|
1.38 |
% |
|
1.68 |
% |
|
2.15 |
% |
|
2.34 |
% |
Investment securities |
|
2.58 |
|
|
2.78 |
|
|
2.86 |
|
|
2.95 |
|
|
3.11 |
|
FHLB and
FRB stock |
|
5.24 |
|
|
5.52 |
|
|
5.55 |
|
|
5.55 |
|
|
5.47 |
|
Liquidity management assets |
|
1.61 |
|
|
2.51 |
|
|
2.48 |
|
|
2.71 |
|
|
3.01 |
|
Other
earning assets |
|
2.71 |
|
|
3.50 |
|
|
3.83 |
|
|
4.20 |
|
|
4.68 |
|
Mortgage
loans held-for-sale |
|
2.72 |
|
|
3.16 |
|
|
3.33 |
|
|
3.63 |
|
|
4.42 |
|
Loans,
net of unearned income |
|
3.92 |
|
|
4.52 |
|
|
4.69 |
|
|
4.93 |
|
|
5.07 |
|
Total earning assets |
|
3.44 |
% |
|
4.13 |
% |
|
4.25 |
% |
|
4.53 |
% |
|
4.74 |
% |
|
|
|
|
|
|
|
|
|
|
|
Rate paid on: |
|
|
|
|
|
|
|
|
|
|
NOW and
interest bearing demand deposits |
|
0.19 |
% |
|
0.47 |
% |
|
0.61 |
% |
|
0.72 |
% |
|
0.77 |
% |
Wealth
management deposits |
|
0.67 |
|
|
0.98 |
|
|
1.06 |
|
|
1.26 |
|
|
1.09 |
|
Money
market accounts |
|
0.61 |
|
|
1.13 |
|
|
1.33 |
|
|
1.45 |
|
|
1.41 |
|
Savings
accounts |
|
0.45 |
|
|
0.73 |
|
|
0.80 |
|
|
0.79 |
|
|
0.72 |
|
Time
deposits |
|
1.91 |
|
|
2.09 |
|
|
2.13 |
|
|
2.18 |
|
|
2.11 |
|
Interest-bearing deposits |
|
0.81 |
|
|
1.20 |
|
|
1.33 |
|
|
1.43 |
|
|
1.37 |
|
Federal
Home Loan Bank advances |
|
1.63 |
|
|
1.42 |
|
|
0.97 |
|
|
1.22 |
|
|
1.93 |
|
Other
borrowings |
|
2.80 |
|
|
3.04 |
|
|
3.13 |
|
|
3.30 |
|
|
3.37 |
|
Subordinated notes |
|
5.05 |
|
|
5.02 |
|
|
5.05 |
|
|
5.02 |
|
|
5.08 |
|
Junior
subordinated debentures |
|
4.29 |
|
|
4.39 |
|
|
4.46 |
|
|
4.47 |
|
|
4.78 |
|
Total interest-bearing liabilities |
|
0.98 |
% |
|
1.34 |
% |
|
1.45 |
% |
|
1.56 |
% |
|
1.51 |
% |
|
|
|
|
|
|
|
|
|
|
|
Interest
rate spread (1)(3) |
|
2.46 |
% |
|
2.79 |
% |
|
2.80 |
% |
|
2.97 |
% |
|
3.23 |
% |
Less: Fully taxable-equivalent adjustment |
|
(0.01 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
Net free
funds/contribution (2) |
|
0.28 |
|
|
0.35 |
|
|
0.39 |
|
|
0.42 |
|
|
0.41 |
|
Net
interest margin (GAAP) (3) |
|
2.73 |
% |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
|
3.62 |
% |
Fully
taxable-equivalent adjustment |
|
0.01 |
|
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
Net interest margin, fully taxable-equivalent (non-GAAP)
(3) |
|
2.74 |
% |
|
3.14 |
% |
|
3.19 |
% |
|
3.39 |
% |
|
3.64 |
% |
- Interest rate spread is the difference between the yield
earned on earning assets and the rate paid on interest-bearing
liabilities.
- 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.
- See "Supplemental Non-GAAP Financial Measures/Ratios" at
Table 18 for additional information on this performance
measure/ratio.
TABLE 7: YEAR-TO-DATE AVERAGE BALANCES, AND NET INTEREST
INCOME AND MARGIN
|
Average Balance
for six months ended, |
Interest
for six months ended, |
Yield/Rate
for six months ended, |
(Dollars in thousands) |
Jun 30,
2020 |
|
Jun 30,
2019 |
Jun 30,
2020 |
|
Jun 30,
2019 |
Jun 30, 2020 |
|
Jun 30,
2019 |
Interest-bearing deposits with banks and cash equivalents
(1) |
$ |
2,329,488 |
|
|
$ |
895,497 |
|
$ |
6,180 |
|
|
$ |
10,506 |
|
0.53 |
% |
|
2.37 |
% |
Investment securities (2) |
4,545,090 |
|
|
3,642,142 |
|
60,661 |
|
|
56,811 |
|
2.68 |
|
|
3.15 |
|
FHLB and
FRB stock |
125,094 |
|
|
100,187 |
|
3,342 |
|
|
2,794 |
|
5.37 |
|
|
5.62 |
|
Liquidity
management assets (3)(8) |
$ |
6,999,672 |
|
|
$ |
4,637,826 |
|
$ |
70,183 |
|
|
$ |
70,111 |
|
2.02 |
% |
|
3.05 |
% |
Other
earning assets (3)(4)(8) |
18,041 |
|
|
14,661 |
|
280 |
|
|
349 |
|
3.13 |
|
|
4.79 |
|
Mortgage
loans held-for-sale |
554,482 |
|
|
235,220 |
|
7,929 |
|
|
5,313 |
|
2.88 |
|
|
4.55 |
|
Loans,
net of unearned income (3)(5)(8) |
28,636,678 |
|
|
24,218,946 |
|
598,021 |
|
|
608,212 |
|
4.20 |
|
|
5.06 |
|
Total earning assets (8) |
$ |
36,208,873 |
|
|
$ |
29,106,653 |
|
$ |
676,413 |
|
|
$ |
683,985 |
|
3.76 |
% |
|
4.74 |
% |
Allowance
for loan losses |
(199,388 |
) |
|
(161,024 |
) |
|
|
|
|
|
|
Cash and
due from banks |
337,202 |
|
|
278,324 |
|
|
|
|
|
|
|
Other
assets |
2,987,422 |
|
|
2,414,336 |
|
|
|
|
|
|
|
Total assets |
$ |
39,334,109 |
|
|
$ |
31,638,289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
interest bearing demand deposits |
$ |
3,218,429 |
|
|
$ |
2,840,886 |
|
$ |
5,227 |
|
|
$ |
10,166 |
|
0.33 |
% |
|
0.72 |
% |
Wealth
management deposits |
3,609,857 |
|
|
2,609,839 |
|
14,179 |
|
|
14,091 |
|
0.79 |
|
|
1.09 |
|
Money
market accounts |
8,359,370 |
|
|
6,005,902 |
|
35,503 |
|
|
40,911 |
|
0.85 |
|
|
1.37 |
|
Savings
accounts |
3,292,158 |
|
|
2,734,228 |
|
9,630 |
|
|
9,208 |
|
0.59 |
|
|
0.68 |
|
Time
deposits |
5,315,554 |
|
|
5,295,241 |
|
52,953 |
|
|
53,624 |
|
2.00 |
|
|
2.04 |
|
Interest-bearing deposits |
$ |
23,795,368 |
|
|
$ |
19,486,096 |
|
$ |
117,492 |
|
|
$ |
128,000 |
|
0.99 |
% |
|
1.32 |
% |
Federal
Home Loan Bank advances |
1,082,994 |
|
|
732,834 |
|
8,294 |
|
|
6,643 |
|
1.54 |
|
|
1.83 |
|
Other
borrowings |
481,463 |
|
|
442,189 |
|
6,982 |
|
|
7,158 |
|
2.92 |
|
|
3.26 |
|
Subordinated notes |
436,173 |
|
|
180,219 |
|
10,978 |
|
|
4,581 |
|
5.03 |
|
|
5.08 |
|
Junior
subordinated debentures |
253,566 |
|
|
253,566 |
|
5,563 |
|
|
6,214 |
|
4.34 |
|
|
4.88 |
|
Total interest-bearing liabilities |
$ |
26,049,564 |
|
|
$ |
21,094,904 |
|
$ |
149,309 |
|
|
$ |
152,596 |
|
1.15 |
% |
|
1.46 |
% |
Non-interest bearing deposits |
8,421,353 |
|
|
6,466,122 |
|
|
|
|
|
|
|
Other
liabilities |
1,053,684 |
|
|
715,263 |
|
|
|
|
|
|
|
Equity |
3,809,508 |
|
|
3,362,000 |
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
39,334,109 |
|
|
$ |
31,638,289 |
|
|
|
|
|
|
|
Interest
rate spread (6)(8) |
|
|
|
|
|
|
2.61 |
% |
|
3.28 |
% |
Less: Fully taxable-equivalent adjustment |
|
|
|
(2,530 |
) |
|
(3,201 |
) |
(0.02 |
) |
|
(0.02 |
) |
Net free
funds/contribution (7) |
$ |
10,159,309 |
|
|
$ |
8,011,749 |
|
|
|
|
0.32 |
|
|
0.40 |
|
Net
interest income/ margin (GAAP) (8) |
|
|
|
$ |
524,574 |
|
|
$ |
528,188 |
|
2.91 |
% |
|
3.66 |
% |
Fully
taxable-equivalent adjustment |
|
|
|
2,530 |
|
|
3,201 |
|
0.02 |
|
|
0.02 |
|
Net interest income/ margin, fully taxable-equivalent (non-GAAP)
(8) |
|
|
|
$ |
527,104 |
|
|
$ |
531,389 |
|
2.93 |
% |
|
3.68 |
% |
- Includes interest-bearing deposits from banks, federal
funds sold and securities purchased under resale
agreements.
- 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.
- Interest income on tax-advantaged loans, trading securities
and investment securities reflects a taxable-equivalent adjustment
based on a marginal federal corporate tax rate in effect as of the
applicable period.
- Other earning assets include brokerage customer receivables
and trading account securities.
- Loans, net of unearned income, include non-accrual
loans.
- Interest rate spread is the difference between the yield
earned on earning assets and the rate paid on interest-bearing
liabilities.
- 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.
- See “Supplemental Non-GAAP Financial Measures/Ratios” at
Table 18 for additional information on this performance
ratio.
TABLE 8: 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 |
Jun 30, 2020 |
|
25.9 |
% |
|
12.6 |
% |
|
(8.3 |
)% |
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 |
) |
Ramp Scenario |
+200
Basis
Points |
|
+100
Basis
Points |
|
-100
Basis
Points |
Jun 30, 2020 |
13.0 |
% |
|
6.7 |
% |
|
(3.2 |
)% |
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 |
) |
TABLE 9: MATURITIES AND SENSITIVITIES TO CHANGES IN
INTEREST RATES
|
Loans repricing or maturity period |
|
|
As of June 30, 2020 |
One year or less |
|
From one to five
years |
|
Over five years |
|
|
(In
thousands) |
|
|
|
Total |
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
Fixed rate |
$ |
270,078 |
|
|
$ |
5,117,468 |
|
|
$ |
822,542 |
|
|
$ |
6,210,088 |
|
Variable rate |
5,628,606 |
|
|
20,411 |
|
|
127 |
|
|
5,649,144 |
|
Total commercial |
$ |
5,898,684 |
|
|
$ |
5,137,879 |
|
|
$ |
822,669 |
|
|
$ |
11,859,232 |
|
Commercial real estate |
|
|
|
|
|
|
|
Fixed rate |
542,353 |
|
|
2,163,918 |
|
|
431,543 |
|
|
3,137,814 |
|
Variable rate |
5,021,539 |
|
|
41,392 |
|
|
— |
|
|
5,062,931 |
|
Total commercial real estate |
$ |
5,563,892 |
|
|
$ |
2,205,310 |
|
|
$ |
431,543 |
|
|
$ |
8,200,745 |
|
Home
equity |
|
|
|
|
|
|
|
Fixed rate |
23,244 |
|
|
4,807 |
|
|
27 |
|
|
28,078 |
|
Variable rate |
438,518 |
|
|
— |
|
|
— |
|
|
438,518 |
|
Total home equity |
$ |
461,762 |
|
|
$ |
4,807 |
|
|
$ |
27 |
|
|
$ |
466,596 |
|
Residential real estate |
|
|
|
|
|
|
|
Fixed rate |
38,039 |
|
|
11,576 |
|
|
487,530 |
|
|
537,145 |
|
Variable rate |
60,409 |
|
|
341,479 |
|
|
488,396 |
|
|
890,284 |
|
Total residential real estate |
$ |
98,448 |
|
|
$ |
353,055 |
|
|
$ |
975,926 |
|
|
$ |
1,427,429 |
|
Premium
finance receivables - commercial |
|
|
|
|
|
|
|
Fixed rate |
3,909,677 |
|
|
90,096 |
|
|
1 |
|
|
3,999,774 |
|
Variable rate |
— |
|
|
— |
|
|
— |
|
|
— |
|
Total premium finance receivables - commercial |
$ |
3,909,677 |
|
|
$ |
90,096 |
|
|
$ |
1 |
|
|
$ |
3,999,774 |
|
Premium
finance receivables - life insurance |
|
|
|
|
|
|
|
Fixed rate |
43,954 |
|
|
153,947 |
|
|
21,576 |
|
|
219,477 |
|
Variable rate |
5,181,325 |
|
|
— |
|
|
— |
|
|
5,181,325 |
|
Total premium finance receivables - life insurance |
$ |
5,225,279 |
|
|
$ |
153,947 |
|
|
$ |
21,576 |
|
|
$ |
5,400,802 |
|
Consumer
and other |
|
|
|
|
|
|
|
Fixed rate |
22,190 |
|
|
6,456 |
|
|
1,583 |
|
|
30,229 |
|
Variable rate |
18,096 |
|
|
— |
|
|
— |
|
|
18,096 |
|
Total consumer and other |
$ |
40,286 |
|
|
$ |
6,456 |
|
|
$ |
1,583 |
|
|
$ |
48,325 |
|
|
|
|
|
|
|
|
|
Total per
category |
|
|
|
|
|
|
|
Fixed rate |
4,849,535 |
|
|
7,548,268 |
|
|
1,764,802 |
|
|
14,162,605 |
|
Variable rate |
16,348,493 |
|
|
403,282 |
|
|
488,523 |
|
|
17,240,298 |
|
Total loans, net of unearned income |
$ |
21,198,028 |
|
|
$ |
7,951,550 |
|
|
$ |
2,253,325 |
|
|
$ |
31,402,903 |
|
|
|
|
|
|
|
|
|
Variable Rate Loan Pricing by Index: |
|
|
|
|
|
|
|
Prime |
|
|
|
|
|
|
$ |
2,164,995 |
|
One- month LIBOR |
|
|
|
|
|
|
8,661,027 |
|
Three- month LIBOR |
|
|
|
|
|
|
301,327 |
|
Twelve- month LIBOR |
|
|
|
|
|
|
5,846,946 |
|
Other |
|
|
|
|
|
|
266,003 |
|
Total variable rate |
|
|
|
|
|
|
$ |
17,240,298 |
|
A PDF accompanying this announcement can be
found at http://ml.globenewswire.com/Resource/Download/e89d083e-0f74-47bc-95e6-0d3178a6bc71
Source: Bloomberg
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 $8.7 billion of variable rate loans tied to one-month LIBOR and
$5.8 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 |
|
|
Second Quarter 2020 |
|
0 |
|
bps |
-83 |
|
bps |
-45 |
|
bps |
First
Quarter 2020 |
|
-150 |
|
|
-77 |
|
|
-100 |
|
|
Fourth
Quarter 2019 |
|
-25 |
|
|
-26 |
|
|
-3 |
|
|
Third
Quarter 2019 |
|
-50 |
|
|
-38 |
|
|
-15 |
|
|
Second Quarter 2019 |
|
0 |
|
|
-9 |
|
|
-53 |
|
|
TABLE 10: ALLOWANCE FOR CREDIT LOSSES
|
|
Three Months Ended |
Six Months Ended |
|
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
Jun 30, |
|
Jun 30, |
(Dollars in thousands) |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
2020 |
|
2019 |
Allowance for credit losses at beginning of
period |
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
|
$ |
159,622 |
|
$ |
158,461 |
|
|
$ |
154,164 |
|
Cumulative effect adjustment from the adoption of ASU
2016-13 |
|
— |
|
|
47,418 |
|
|
— |
|
|
— |
|
|
— |
|
47,418 |
|
|
— |
|
Provision for credit losses |
|
135,053 |
|
|
52,961 |
|
|
7,826 |
|
|
10,834 |
|
|
24,580 |
|
188,014 |
|
|
35,204 |
|
Other adjustments |
|
42 |
|
|
(73 |
) |
|
30 |
|
|
(13 |
) |
|
(11 |
) |
(31 |
) |
|
(38 |
) |
Charge-offs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
5,686 |
|
|
2,153 |
|
|
11,222 |
|
|
6,775 |
|
|
17,380 |
|
7,839 |
|
|
17,883 |
|
Commercial real estate |
|
7,087 |
|
|
85 |
|
|
533 |
|
|
809 |
|
|
326 |
|
7,172 |
|
|
4,060 |
|
Home
equity |
|
239 |
|
|
1,001 |
|
|
1,330 |
|
|
1,594 |
|
|
690 |
|
1,240 |
|
|
778 |
|
Residential real estate |
|
208 |
|
|
356 |
|
|
483 |
|
|
25 |
|
|
287 |
|
564 |
|
|
290 |
|
Premium
finance receivables |
|
3,434 |
|
|
3,184 |
|
|
3,817 |
|
|
1,866 |
|
|
5,009 |
|
6,618 |
|
|
7,219 |
|
Consumer
and other |
|
99 |
|
|
128 |
|
|
167 |
|
|
117 |
|
|
136 |
|
227 |
|
|
238 |
|
PCD
(1) |
|
222 |
|
|
530 |
|
|
— |
|
|
— |
|
|
— |
|
752 |
|
|
— |
|
Total charge-offs |
|
16,975 |
|
|
7,437 |
|
|
17,552 |
|
|
11,186 |
|
|
23,828 |
|
24,412 |
|
|
30,468 |
|
Recoveries: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
86 |
|
|
356 |
|
|
1,871 |
|
|
367 |
|
|
289 |
|
442 |
|
|
607 |
|
Commercial real estate |
|
307 |
|
|
79 |
|
|
1,404 |
|
|
385 |
|
|
247 |
|
386 |
|
|
727 |
|
Home
equity |
|
36 |
|
|
294 |
|
|
166 |
|
|
183 |
|
|
68 |
|
330 |
|
|
130 |
|
Residential real estate |
|
30 |
|
|
60 |
|
|
50 |
|
|
203 |
|
|
140 |
|
90 |
|
|
169 |
|
Premium finance receivables |
|
833 |
|
|
1,110 |
|
|
1,350 |
|
|
563 |
|
|
734 |
|
1,943 |
|
|
1,290 |
|
Consumer and other |
|
58 |
|
|
39 |
|
|
43 |
|
|
36 |
|
|
60 |
|
97 |
|
|
116 |
|
PCD (1) |
|
222 |
|
|
214 |
|
|
— |
|
|
— |
|
|
— |
|
436 |
|
|
— |
|
Total recoveries |
|
1,572 |
|
|
2,152 |
|
|
4,884 |
|
|
1,737 |
|
|
1,538 |
|
3,724 |
|
|
3,039 |
|
Net charge-offs |
|
(15,403 |
) |
|
(5,285 |
) |
|
(12,668 |
) |
|
(9,449 |
) |
|
(22,290 |
) |
(20,688 |
) |
|
(27,429 |
) |
Allowance for credit losses at period end |
|
$ |
373,174 |
|
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
$ |
373,174 |
|
|
$ |
161,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net charge-offs by category as a percentage of
its own respective category’s average: |
|
|
|
Commercial |
|
0.20 |
% |
|
0.09 |
% |
|
0.46 |
% |
|
0.31 |
% |
|
0.85 |
% |
0.15 |
% |
|
0.44 |
% |
Commercial real estate |
|
0.34 |
|
|
0.00 |
|
|
(0.04 |
) |
|
0.02 |
|
|
0.00 |
|
0.17 |
|
|
0.10 |
|
Home equity |
|
0.17 |
|
|
0.57 |
|
|
0.89 |
|
|
1.08 |
|
|
0.47 |
|
0.37 |
|
|
0.25 |
|
Residential real estate |
|
0.06 |
|
|
0.10 |
|
|
0.14 |
|
|
(0.07 |
) |
|
0.06 |
|
0.08 |
|
|
0.03 |
|
Premium finance receivables |
|
0.12 |
|
|
0.10 |
|
|
0.28 |
|
|
0.15 |
|
|
0.55 |
|
0.11 |
|
|
0.16 |
|
Consumer and other |
|
0.22 |
|
|
0.59 |
|
|
0.41 |
|
|
0.27 |
|
|
0.30 |
|
0.28 |
|
|
0.23 |
|
PCD (1) |
|
0.00 |
|
|
0.32 |
|
|
— |
|
|
— |
|
|
— |
|
0.25 |
|
|
— |
|
Total loans, net of unearned income |
|
0.20 |
% |
|
0.08 |
% |
|
0.19 |
% |
|
0.15 |
% |
|
0.36 |
% |
0.15 |
% |
|
0.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs as a percentage of the provision for
credit losses |
|
11.41 |
% |
|
9.98 |
% |
|
161.87 |
% |
|
87.22 |
% |
|
90.68 |
% |
11.00 |
% |
|
77.92 |
% |
Loans at period-end |
|
$ |
31,402,903 |
|
|
$ |
27,807,321 |
|
|
$ |
26,800,290 |
|
|
$ |
25,710,171 |
|
|
$ |
25,304,659 |
|
|
|
|
Allowance for loan losses as a percentage of loans at
period end |
|
1.00 |
% |
|
0.78 |
% |
|
0.59 |
% |
|
0.63 |
% |
|
0.63 |
% |
|
|
|
Allowance for loan and unfunded lending-related commitment
losses as a percentage of loans at period end |
|
1.19 |
|
|
0.91 |
|
|
0.59 |
|
|
0.64 |
|
|
0.64 |
|
|
|
|
Allowance for loan and unfunded lending-related commitment
losses as a percentage of loans at period end, excluding PPP
loans |
|
1.33 |
|
|
0.91 |
|
|
0.59 |
|
|
0.64 |
|
|
0.64 |
|
|
|
|
(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 11: ALLOWANCE AND PROVISON FOR CREDIT LOSSES BY
COMPONENT
|
|
Three Months Ended |
Six Months Ended |
|
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
Jun 30, |
|
Jun 30, |
(In
thousands) |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
2020 |
|
2019 |
Provision for loan losses |
|
$ |
112,822 |
|
|
$ |
50,396 |
|
|
$ |
7,704 |
|
|
$ |
10,804 |
|
|
$ |
24,510 |
|
$ |
163,218 |
|
|
$ |
35,118 |
|
Provision
for unfunded lending-related commitments losses |
|
22,236 |
|
|
2,569 |
|
|
122 |
|
|
30 |
|
|
70 |
|
24,805 |
|
|
86 |
|
Provision
for held-to-maturity securities losses |
|
(5 |
) |
|
(4 |
) |
|
— |
|
|
— |
|
|
— |
|
(9 |
) |
|
— |
|
Provision for credit losses |
|
$ |
135,053 |
|
|
$ |
52,961 |
|
|
$ |
7,826 |
|
|
$ |
10,834 |
|
|
$ |
24,580 |
|
$ |
188,014 |
|
|
$ |
35,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses |
|
$ |
313,510 |
|
|
$ |
216,050 |
|
|
$ |
156,828 |
|
|
$ |
161,763 |
|
|
$ |
160,421 |
|
|
|
|
Allowance
for unfunded lending-related commitments losses |
|
59,599 |
|
|
37,362 |
|
|
1,633 |
|
|
1,510 |
|
|
1,480 |
|
|
|
|
Allowance
for loan losses and unfunded lending-related commitments
losses |
|
373,109 |
|
|
253,412 |
|
|
158,461 |
|
|
163,273 |
|
|
161,901 |
|
|
|
|
Allowance
for held-to-maturity securities losses |
|
65 |
|
|
70 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Allowance for credit losses |
|
$ |
373,174 |
|
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
|
|
|
TABLE 12: 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 June 30,
2020, March 31, 2020, and December 31, 2019.
|
As of June 30, 2020 |
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 |
Recorded
Investment |
|
Calculated
Allowance |
|
% of its
category’s balance |
Commercial: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial and other, excluding PPP loans |
$ |
8,396,485 |
|
|
$ |
130,585 |
|
|
1.56 |
% |
|
$ |
8,888,342 |
|
|
$ |
104,754 |
|
|
1.18 |
% |
|
$ |
8,121,584 |
|
|
$ |
64,829 |
|
|
0.80 |
% |
Commercial real estate: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
1,193,735 |
|
|
67,333 |
|
|
5.64 |
|
|
1,113,863 |
|
|
31,687 |
|
|
2.84 |
|
|
1,075,545 |
|
|
16,418 |
|
|
1.53 |
|
Non-construction |
6,397,847 |
|
|
108,613 |
|
|
1.70 |
|
|
6,388,142 |
|
|
68,914 |
|
|
1.08 |
|
|
6,199,042 |
|
|
51,935 |
|
|
0.84 |
|
Home
equity (1) |
427,668 |
|
|
11,596 |
|
|
2.71 |
|
|
451,804 |
|
|
11,844 |
|
|
2.62 |
|
|
469,498 |
|
|
3,860 |
|
|
0.82 |
|
Residential real estate (1) |
1,338,801 |
|
|
11,200 |
|
|
0.84 |
|
|
1,274,351 |
|
|
11,621 |
|
|
0.91 |
|
|
1,246,829 |
|
|
9,736 |
|
|
0.78 |
|
Total core loan portfolio |
$ |
17,754,536 |
|
|
$ |
329,327 |
|
|
1.85 |
% |
|
$ |
18,116,502 |
|
|
$ |
228,820 |
|
|
1.26 |
% |
|
$ |
17,112,498 |
|
|
$ |
146,778 |
|
|
0.86 |
% |
Commercial PPP loans |
$ |
3,335,368 |
|
|
$ |
4 |
|
|
0.00 |
% |
|
$ |
— |
|
|
$ |
— |
|
|
— |
% |
|
$ |
— |
|
|
$ |
— |
|
|
— |
% |
Premium
finance receivables (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance loans |
3,999,774 |
|
|
17,122 |
|
|
0.43 |
|
|
3,465,055 |
|
|
7,426 |
|
|
0.21 |
|
|
3,442,027 |
|
|
8,132 |
|
|
0.24 |
|
Life insurance loans |
5,277,126 |
|
|
470 |
|
|
0.01 |
|
|
5,084,695 |
|
|
454 |
|
|
0.01 |
|
|
4,935,321 |
|
|
1,515 |
|
|
0.03 |
|
Consumer
and other(1) |
45,474 |
|
|
556 |
|
|
1.22 |
|
|
34,111 |
|
|
331 |
|
|
0.97 |
|
|
107,053 |
|
|
1,704 |
|
|
1.59 |
|
Total niche and consumer loan portfolio |
$ |
12,657,742 |
|
|
$ |
18,152 |
|
|
0.14 |
% |
|
$ |
8,583,861 |
|
|
$ |
8,211 |
|
|
0.10 |
% |
|
$ |
8,484,401 |
|
|
$ |
11,351 |
|
|
0.13 |
% |
Purchased
commercial (2) |
$ |
127,379 |
|
|
$ |
3,008 |
|
|
2.36 |
% |
|
$ |
137,544 |
|
|
$ |
2,592 |
|
|
1.88 |
% |
|
$ |
164,336 |
|
|
$ |
91 |
|
|
0.06 |
% |
Purchased
commercial real estate (2) |
609,163 |
|
|
21,180 |
|
|
3.48 |
|
|
683,526 |
|
|
12,195 |
|
|
1.78 |
|
|
745,689 |
|
|
158 |
|
|
0.02 |
|
Purchased
home equity (2) |
38,928 |
|
|
593 |
|
|
1.52 |
|
|
42,851 |
|
|
550 |
|
|
1.28 |
|
|
43,568 |
|
|
18 |
|
|
0.04 |
|
Purchased
residential real estate(2) |
88,628 |
|
|
715 |
|
|
0.81 |
|
|
103,038 |
|
|
929 |
|
|
0.90 |
|
|
107,392 |
|
|
64 |
|
|
0.06 |
|
Purchased
life insurance loans (2) |
123,676 |
|
|
— |
|
|
— |
|
|
136,944 |
|
|
— |
|
|
— |
|
|
139,281 |
|
|
— |
|
|
— |
|
Purchased
consumer and other (2) |
2,851 |
|
|
134 |
|
|
4.70 |
|
|
3,055 |
|
|
115 |
|
|
3.76 |
|
|
3,125 |
|
|
1 |
|
|
0.03 |
|
Total purchased loan portfolio |
$ |
990,625 |
|
|
$ |
25,630 |
|
|
2.59 |
% |
|
$ |
1,106,958 |
|
|
$ |
16,381 |
|
|
1.48 |
% |
|
$ |
1,203,391 |
|
|
$ |
332 |
|
|
0.03 |
% |
Total loans, net of unearned income |
$ |
31,402,903 |
|
|
$ |
373,109 |
|
|
1.19 |
% |
|
$ |
27,807,321 |
|
|
$ |
253,412 |
|
|
0.91 |
% |
|
$ |
26,800,290 |
|
|
$ |
158,461 |
|
|
0.59 |
% |
Total loans, net of unearned income, excluding PPP
loans |
$ |
28,067,535 |
|
|
$ |
373,105 |
|
|
1.33 |
% |
|
$ |
27,807,321 |
|
|
$ |
253,412 |
|
|
0.91 |
% |
|
$ |
26,800,290 |
|
|
$ |
158,461 |
|
|
0.59 |
% |
- 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.
- Includes PCD loans.
TABLE 13: LOAN PORTFOLIO AGING
|
|
As of June 30, 2020 |
|
March 31, 2020 |
(Dollars in thousands) |
|
Non-PCD |
|
PCD (1) |
|
Total Loans |
|
Non-PCD |
|
PCD (1) |
|
Total Loans |
Loan Balances: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
39,589 |
|
|
$ |
3,293 |
|
|
$ |
42,882 |
|
|
$ |
47,661 |
|
|
$ |
2,255 |
|
|
$ |
49,916 |
|
90+ days and still accruing |
|
1,374 |
|
|
— |
|
|
1,374 |
|
|
3 |
|
|
1,238 |
|
|
1,241 |
|
60-89 days past due |
|
8,107 |
|
|
845 |
|
|
8,952 |
|
|
8,541 |
|
|
332 |
|
|
8,873 |
|
30-59 days past due |
|
22,421 |
|
|
1,299 |
|
|
23,720 |
|
|
86,129 |
|
|
— |
|
|
86,129 |
|
Current |
|
11,762,808 |
|
|
19,496 |
|
|
11,782,304 |
|
|
8,857,394 |
|
|
22,333 |
|
|
8,879,727 |
|
Total Commercial |
|
$ |
11,834,299 |
|
|
$ |
24,933 |
|
|
$ |
11,859,232 |
|
|
$ |
8,999,728 |
|
|
$ |
26,158 |
|
|
$ |
9,025,886 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
43,334 |
|
|
$ |
21,223 |
|
|
$ |
64,557 |
|
|
$ |
36,904 |
|
|
$ |
25,926 |
|
|
$ |
62,830 |
|
90+ days and still accruing |
|
— |
|
|
— |
|
|
— |
|
|
516 |
|
|
— |
|
|
516 |
|
60-89 days past due |
|
22,402 |
|
|
4,078 |
|
|
26,480 |
|
|
7,415 |
|
|
2,797 |
|
|
10,212 |
|
30-59 days past due |
|
56,501 |
|
|
19,027 |
|
|
75,528 |
|
|
65,578 |
|
|
9,490 |
|
|
75,068 |
|
Current |
|
7,885,483 |
|
|
148,697 |
|
|
8,034,180 |
|
|
7,863,567 |
|
|
173,338 |
|
|
8,036,905 |
|
Total Commercial real estate |
|
$ |
8,007,720 |
|
|
$ |
193,025 |
|
|
$ |
8,200,745 |
|
|
$ |
7,973,980 |
|
|
$ |
211,551 |
|
|
$ |
8,185,531 |
|
Home
equity |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
7,261 |
|
|
$ |
— |
|
|
$ |
7,261 |
|
|
$ |
7,243 |
|
|
$ |
— |
|
|
$ |
7,243 |
|
90+ days and still accruing |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
60-89 days past due |
|
— |
|
|
— |
|
|
— |
|
|
214 |
|
|
— |
|
|
214 |
|
30-59 days past due |
|
1,296 |
|
|
— |
|
|
1,296 |
|
|
2,096 |
|
|
— |
|
|
2,096 |
|
Current |
|
458,039 |
|
|
— |
|
|
458,039 |
|
|
485,102 |
|
|
— |
|
|
485,102 |
|
Total Home equity |
|
$ |
466,596 |
|
|
$ |
— |
|
|
$ |
466,596 |
|
|
$ |
494,655 |
|
|
$ |
— |
|
|
$ |
494,655 |
|
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
13,941 |
|
|
$ |
5,588 |
|
|
$ |
19,529 |
|
|
$ |
13,132 |
|
|
$ |
5,833 |
|
|
$ |
18,965 |
|
90+ days and still accruing |
|
— |
|
|
— |
|
|
— |
|
|
605 |
|
|
— |
|
|
605 |
|
60-89 days past due |
|
1,318 |
|
|
188 |
|
|
1,506 |
|
|
345 |
|
|
— |
|
|
345 |
|
30-59 days past due |
|
3,595 |
|
|
805 |
|
|
4,400 |
|
|
26,437 |
|
|
2,546 |
|
|
28,983 |
|
Current |
|
1,391,944 |
|
|
10,050 |
|
|
1,401,994 |
|
|
1,319,452 |
|
|
9,039 |
|
|
1,328,491 |
|
Total Residential real estate |
|
$ |
1,410,798 |
|
|
$ |
16,631 |
|
|
$ |
1,427,429 |
|
|
$ |
1,359,971 |
|
|
$ |
17,418 |
|
|
$ |
1,377,389 |
|
Premium
finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
16,460 |
|
|
$ |
— |
|
|
$ |
16,460 |
|
|
$ |
21,058 |
|
|
$ |
— |
|
|
$ |
21,058 |
|
90+ days and still accruing |
|
35,638 |
|
|
— |
|
|
35,638 |
|
|
16,505 |
|
|
— |
|
|
16,505 |
|
60-89 days past due |
|
42,353 |
|
|
— |
|
|
42,353 |
|
|
12,730 |
|
|
— |
|
|
12,730 |
|
30-59 days past due |
|
61,160 |
|
|
— |
|
|
61,160 |
|
|
70,185 |
|
|
— |
|
|
70,185 |
|
Current |
|
9,121,289 |
|
|
123,676 |
|
|
9,244,965 |
|
|
8,429,272 |
|
|
136,944 |
|
|
8,566,216 |
|
Total Premium finance receivables |
|
$ |
9,276,900 |
|
|
$ |
123,676 |
|
|
$ |
9,400,576 |
|
|
$ |
8,549,750 |
|
|
$ |
136,944 |
|
|
$ |
8,686,694 |
|
Consumer
and other |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
255 |
|
|
$ |
172 |
|
|
$ |
427 |
|
|
$ |
232 |
|
|
$ |
171 |
|
|
$ |
403 |
|
90+ days and still accruing |
|
156 |
|
|
— |
|
|
156 |
|
|
78 |
|
|
— |
|
|
78 |
|
60-89 days past due |
|
4 |
|
|
— |
|
|
4 |
|
|
607 |
|
|
18 |
|
|
625 |
|
30-59 days past due |
|
281 |
|
|
— |
|
|
281 |
|
|
188 |
|
|
19 |
|
|
207 |
|
Current |
|
46,159 |
|
|
1,298 |
|
|
47,457 |
|
|
34,441 |
|
|
1,412 |
|
|
35,853 |
|
Total Consumer and other |
|
$ |
46,855 |
|
|
$ |
1,470 |
|
|
$ |
48,325 |
|
|
$ |
35,546 |
|
|
$ |
1,620 |
|
|
$ |
37,166 |
|
Total
loans, net of unearned income |
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
120,840 |
|
|
$ |
30,276 |
|
|
$ |
151,116 |
|
|
$ |
126,230 |
|
|
$ |
34,185 |
|
|
$ |
160,415 |
|
90+ days and still accruing |
|
37,168 |
|
|
— |
|
|
37,168 |
|
|
17,707 |
|
|
1,238 |
|
|
18,945 |
|
60-89 days past due |
|
74,184 |
|
|
5,111 |
|
|
79,295 |
|
|
29,852 |
|
|
3,147 |
|
|
32,999 |
|
30-59 days past due |
|
145,254 |
|
|
21,131 |
|
|
166,385 |
|
|
250,613 |
|
|
12,055 |
|
|
262,668 |
|
Current |
|
30,665,722 |
|
|
303,217 |
|
|
30,968,939 |
|
|
26,989,228 |
|
|
343,066 |
|
|
27,332,294 |
|
Total loans, net of unearned income |
|
$ |
31,043,168 |
|
|
$ |
359,735 |
|
|
$ |
31,402,903 |
|
|
$ |
27,413,630 |
|
|
$ |
393,691 |
|
|
$ |
27,807,321 |
|
(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 14: NON-PERFORMING ASSETS AND TROUBLED DEBT
RESTRUCTURINGS ("TDRs")
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
(Dollars in thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Loans past due greater than 90 days and still accruing
(1): |
Non-PCD |
PCD(2) |
|
Non-PCD |
PCD(2) |
|
|
|
|
|
|
Commercial |
$ |
1,374 |
|
$ |
— |
|
|
$ |
3 |
|
1,238 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
488 |
|
Commercial real estate |
— |
|
— |
|
|
516 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Home
equity |
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Residential real estate |
— |
|
— |
|
|
605 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Premium
finance receivables |
35,638 |
|
— |
|
|
16,505 |
|
— |
|
|
11,517 |
|
|
10,612 |
|
|
6,940 |
|
Consumer
and other |
156 |
|
— |
|
|
78 |
|
— |
|
|
163 |
|
|
53 |
|
|
172 |
|
Total loans past due greater than 90 days and still accruing |
37,168 |
|
— |
|
|
17,707 |
|
1,238 |
|
|
11,680 |
|
|
10,665 |
|
|
7,600 |
|
Non-accrual loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
39,589 |
|
3,293 |
|
|
47,661 |
|
2,255 |
|
|
37,224 |
|
|
43,931 |
|
|
47,604 |
|
Commercial real estate |
43,334 |
|
21,223 |
|
|
36,904 |
|
25,926 |
|
|
26,113 |
|
|
21,557 |
|
|
20,875 |
|
Home
equity |
7,261 |
|
— |
|
|
7,243 |
|
— |
|
|
7,363 |
|
|
7,920 |
|
|
8,489 |
|
Residential real estate |
13,941 |
|
5,588 |
|
|
13,132 |
|
5,833 |
|
|
13,797 |
|
|
13,447 |
|
|
14,236 |
|
Premium
finance receivables |
16,460 |
|
— |
|
|
21,058 |
|
— |
|
|
21,180 |
|
|
16,540 |
|
|
14,423 |
|
Consumer
and other |
255 |
|
172 |
|
|
232 |
|
171 |
|
|
231 |
|
|
224 |
|
|
220 |
|
Total non-accrual loans |
120,840 |
|
30,276 |
|
|
126,230 |
|
34,185 |
|
|
105,908 |
|
|
103,619 |
|
|
105,847 |
|
Total non-performing loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
40,963 |
|
3,293 |
|
|
47,664 |
|
3,493 |
|
|
37,224 |
|
|
43,931 |
|
|
48,092 |
|
Commercial real estate |
43,334 |
|
21,223 |
|
|
37,420 |
|
25,926 |
|
|
26,113 |
|
|
21,557 |
|
|
20,875 |
|
Home
equity |
7,261 |
|
— |
|
|
7,243 |
|
— |
|
|
7,363 |
|
|
7,920 |
|
|
8,489 |
|
Residential real estate |
13,941 |
|
5,588 |
|
|
13,737 |
|
5,833 |
|
|
13,797 |
|
|
13,447 |
|
|
14,236 |
|
Premium
finance receivables |
52,098 |
|
— |
|
|
37,563 |
|
— |
|
|
32,697 |
|
|
27,152 |
|
|
21,363 |
|
Consumer
and other |
411 |
|
172 |
|
|
310 |
|
171 |
|
|
394 |
|
|
277 |
|
|
392 |
|
Total non-performing loans |
$ |
158,008 |
|
$ |
30,276 |
|
|
$ |
143,937 |
|
35,423 |
|
|
$ |
117,588 |
|
|
$ |
114,284 |
|
|
$ |
113,447 |
|
Other
real estate owned |
2,409 |
|
— |
|
|
2,701 |
|
— |
|
|
5,208 |
|
|
8,584 |
|
|
9,920 |
|
Other
real estate owned - from acquisitions |
7,788 |
|
— |
|
|
8,325 |
|
— |
|
|
9,963 |
|
|
8,898 |
|
|
9,917 |
|
Other
repossessed assets |
— |
|
— |
|
|
— |
|
— |
|
|
4 |
|
|
257 |
|
|
263 |
|
Total non-performing assets |
$ |
168,205 |
|
$ |
30,276 |
|
|
$ |
154,963 |
|
35,423 |
|
|
$ |
132,763 |
|
|
$ |
132,023 |
|
|
$ |
133,547 |
|
Accruing TDRs not included within non-performing assets |
$ |
47,750 |
|
$ |
859 |
|
|
$ |
46,995 |
|
$ |
54 |
|
|
$ |
36,725 |
|
|
$ |
45,178 |
|
|
$ |
45,862 |
|
Total non-performing loans by category as a percent of its
own respective category’s period-end balance: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
0.35 |
% |
13.21 |
% |
|
0.53 |
% |
13.35 |
% |
|
0.45 |
% |
|
0.54 |
% |
|
0.58 |
% |
Commercial real estate |
0.54 |
|
10.99 |
|
|
0.47 |
|
12.26 |
|
|
0.33 |
|
|
0.29 |
|
|
0.29 |
|
Home
equity |
1.56 |
|
— |
|
|
1.46 |
|
— |
|
|
1.44 |
|
|
1.55 |
|
|
1.61 |
|
Residential real estate |
0.99 |
|
33.60 |
|
|
1.01 |
|
33.49 |
|
|
1.02 |
|
|
1.10 |
|
|
1.27 |
|
Premium
finance receivables |
0.56 |
|
— |
|
|
0.44 |
|
— |
|
|
0.39 |
|
|
0.34 |
|
|
0.27 |
|
Consumer
and other |
0.88 |
|
11.70 |
|
|
0.87 |
|
10.56 |
|
|
0.36 |
|
|
0.31 |
|
|
0.36 |
|
Total loans, net of unearned income |
0.51 |
% |
8.42 |
% |
|
0.53 |
% |
9.00 |
% |
|
0.44 |
% |
|
0.44 |
% |
|
0.45 |
% |
Total non-performing assets as a percentage of total
assets |
0.46 |
% |
|
|
0.49 |
% |
|
|
0.36 |
% |
|
0.38 |
% |
|
0.40 |
% |
Allowance for loan losses as a percentage of total
non-performing loans |
166.51 |
% |
|
|
120.46 |
% |
|
|
133.37 |
% |
|
141.54 |
% |
|
141.41 |
% |
- As of June 30, 2020, March 31, 2020,
December 31, 2019, September 30, 2019, and June 30, 2019,
no TDRs were past due greater than 90 days and still accruing
interest.
- 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 |
Six Months Ended |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
Jun 30, |
|
Jun 30, |
(In
thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
2020 |
|
2019 |
|
Non-PCD |
PCD(2) |
|
Non-PCD |
PCD(2) |
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
143,937 |
|
$ |
35,423 |
|
|
$ |
117,588 |
|
$ |
— |
|
|
$ |
114,284 |
|
|
$ |
113,447 |
|
|
$ |
117,586 |
|
$ |
117,588 |
|
|
$ |
113,234 |
|
Additions from becoming non-performing in the respective
period |
18,547 |
|
2,256 |
|
|
30,390 |
|
1,805 |
|
|
30,977 |
|
|
20,781 |
|
|
20,567 |
|
52,998 |
|
|
44,597 |
|
Additions from the adoption of ASU 2016-13 |
— |
|
— |
|
|
— |
|
37,285 |
|
|
— |
|
|
— |
|
|
— |
|
37,285 |
|
|
— |
|
Return to performing status |
(1,328 |
) |
(1,238 |
) |
|
(317 |
) |
(169 |
) |
|
(243 |
) |
|
(407 |
) |
|
(47 |
) |
(3,052 |
) |
|
(14,124 |
) |
Payments received |
(5,408 |
) |
(5,793 |
) |
|
(4,451 |
) |
(3,498 |
) |
|
(19,380 |
) |
|
(16,326 |
) |
|
(5,438 |
) |
(19,150 |
) |
|
(9,462 |
) |
Transfer to OREO and other repossessed assets |
— |
|
— |
|
|
(1,297 |
) |
— |
|
|
— |
|
|
(1,493 |
) |
|
(1,486 |
) |
(1,297 |
) |
|
(1,568 |
) |
Charge-offs |
(12,512 |
) |
(372 |
) |
|
(2,551 |
) |
— |
|
|
(11,798 |
) |
|
(6,984 |
) |
|
(16,817 |
) |
(15,435 |
) |
|
(20,809 |
) |
Net change for niche loans (1) |
14,772 |
|
— |
|
|
4,575 |
|
— |
|
|
3,748 |
|
|
5,266 |
|
|
(918 |
) |
19,347 |
|
|
1,579 |
|
Balance at end of period |
$ |
158,008 |
|
$ |
30,276 |
|
|
$ |
143,937 |
|
35,423 |
|
|
$ |
117,588 |
|
|
$ |
114,284 |
|
|
$ |
113,447 |
|
$ |
188,284 |
|
|
$ |
113,447 |
|
- This includes activity for premium finance receivables and
indirect consumer loans.
- 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
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
(In
thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Accruing TDRs: |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
5,338 |
|
|
$ |
6,500 |
|
|
$ |
4,905 |
|
|
$ |
14,099 |
|
|
$ |
15,923 |
|
Commercial real estate |
19,106 |
|
|
18,043 |
|
|
9,754 |
|
|
10,370 |
|
|
12,646 |
|
Residential real estate and other |
24,165 |
|
|
22,506 |
|
|
22,066 |
|
|
20,709 |
|
|
17,293 |
|
Total accrual |
$ |
48,609 |
|
|
$ |
47,049 |
|
|
$ |
36,725 |
|
|
$ |
45,178 |
|
|
$ |
45,862 |
|
Non-accrual TDRs: (1) |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
20,788 |
|
|
$ |
17,206 |
|
|
$ |
13,834 |
|
|
$ |
7,451 |
|
|
$ |
21,850 |
|
Commercial real estate |
8,545 |
|
|
14,420 |
|
|
7,119 |
|
|
7,673 |
|
|
2,854 |
|
Residential real estate and other |
5,606 |
|
|
4,962 |
|
|
6,158 |
|
|
6,006 |
|
|
5,435 |
|
Total non-accrual |
$ |
34,939 |
|
|
$ |
36,588 |
|
|
$ |
27,111 |
|
|
$ |
21,130 |
|
|
$ |
30,139 |
|
Total TDRs: |
|
|
|
|
|
|
|
|
|
Commercial |
$ |
26,126 |
|
|
$ |
23,706 |
|
|
$ |
18,739 |
|
|
$ |
21,550 |
|
|
$ |
37,773 |
|
Commercial real estate |
27,651 |
|
|
32,463 |
|
|
16,873 |
|
|
18,043 |
|
|
15,500 |
|
Residential real estate and other |
29,771 |
|
|
27,468 |
|
|
28,224 |
|
|
26,715 |
|
|
22,728 |
|
Total TDRs |
$ |
83,548 |
|
|
$ |
83,637 |
|
|
$ |
63,836 |
|
|
$ |
66,308 |
|
|
$ |
76,001 |
|
(1) Included in total
non-performing loans.
Other Real Estate Owned
|
Three Months Ended |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
(In
thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Balance at beginning of period |
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
|
$ |
19,837 |
|
|
$ |
21,520 |
|
Disposals/resolved |
(612 |
) |
|
(4,793 |
) |
|
(4,860 |
) |
|
(4,501 |
) |
|
(2,397 |
) |
Transfers in at fair value, less costs to sell |
— |
|
|
954 |
|
|
936 |
|
|
3,008 |
|
|
1,746 |
|
Additions from acquisition |
— |
|
|
— |
|
|
2,179 |
|
|
— |
|
|
— |
|
Fair value adjustments |
(217 |
) |
|
(306 |
) |
|
(566 |
) |
|
(862 |
) |
|
(1,032 |
) |
Balance at end of period |
$ |
10,197 |
|
|
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
|
$ |
19,837 |
|
|
|
|
|
|
|
|
|
|
|
|
Period End |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
Balance by Property Type: |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Residential real estate |
$ |
1,382 |
|
|
$ |
1,684 |
|
|
$ |
1,016 |
|
|
$ |
1,250 |
|
|
$ |
1,312 |
|
Residential real estate development |
— |
|
|
— |
|
|
810 |
|
|
1,282 |
|
|
1,282 |
|
Commercial real estate |
8,815 |
|
|
9,342 |
|
|
13,345 |
|
|
14,950 |
|
|
17,243 |
|
Total |
$ |
10,197 |
|
|
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
|
$ |
19,837 |
|
TABLE 15: NON-INTEREST INCOME
|
Three Months Ended |
|
Q2 2020 compared to
Q1 2020 |
|
Q2 2020 compared to
Q2 2019 |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
|
(Dollars in thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
|
$ Change |
|
% Change |
|
$ Change |
|
% Change |
Brokerage |
$ |
4,147 |
|
|
$ |
5,281 |
|
|
$ |
4,859 |
|
|
$ |
4,686 |
|
|
$ |
4,764 |
|
|
$ |
(1,134 |
) |
|
(21 |
)% |
|
$ |
(617 |
) |
|
(13 |
)% |
Trust and
asset management |
18,489 |
|
|
20,660 |
|
|
20,140 |
|
|
19,313 |
|
|
19,375 |
|
|
(2,171 |
) |
|
(11 |
) |
|
(886 |
) |
|
(5 |
) |
Total wealth management |
22,636 |
|
|
25,941 |
|
|
24,999 |
|
|
23,999 |
|
|
24,139 |
|
|
(3,305 |
) |
|
(13 |
) |
|
(1,503 |
) |
|
(6 |
) |
Mortgage
banking |
102,324 |
|
|
48,326 |
|
|
47,860 |
|
|
50,864 |
|
|
37,411 |
|
|
53,998 |
|
|
112 |
|
|
64,913 |
|
|
174 |
|
Service
charges on deposit accounts |
10,420 |
|
|
11,265 |
|
|
10,973 |
|
|
9,972 |
|
|
9,277 |
|
|
(845 |
) |
|
(8 |
) |
|
1,143 |
|
|
12 |
|
Gains
(losses) on investment securities, net |
808 |
|
|
(4,359 |
) |
|
587 |
|
|
710 |
|
|
864 |
|
|
5,167 |
|
|
NM |
|
|
(56 |
) |
|
(6 |
) |
Fees from
covered call options |
— |
|
|
2,292 |
|
|
1,243 |
|
|
— |
|
|
643 |
|
|
(2,292 |
) |
|
(100 |
) |
|
(643 |
) |
|
(100 |
) |
Trading
(losses) gains, net |
(634 |
) |
|
(451 |
) |
|
46 |
|
|
11 |
|
|
(44 |
) |
|
(183 |
) |
|
(41 |
) |
|
(590 |
) |
|
NM |
|
Operating
lease income, net |
11,785 |
|
|
11,984 |
|
|
12,487 |
|
|
12,025 |
|
|
11,733 |
|
|
(199 |
) |
|
(2 |
) |
|
52 |
|
|
— |
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap fees |
5,693 |
|
|
6,066 |
|
|
2,206 |
|
|
4,811 |
|
|
3,224 |
|
|
(373 |
) |
|
(6 |
) |
|
2,469 |
|
|
77 |
|
BOLI |
1,950 |
|
|
(1,284 |
) |
|
1,377 |
|
|
830 |
|
|
1,149 |
|
|
3,234 |
|
|
NM |
|
|
801 |
|
|
70 |
|
Administrative services |
933 |
|
|
1,112 |
|
|
1,072 |
|
|
1,086 |
|
|
1,009 |
|
|
(179 |
) |
|
(16 |
) |
|
(76 |
) |
|
(8 |
) |
Foreign currency remeasurement (losses) gains |
(208 |
) |
|
(151 |
) |
|
261 |
|
|
(55 |
) |
|
113 |
|
|
(57 |
) |
|
(38 |
) |
|
(321 |
) |
|
NM |
|
Early pay-offs of capital leases |
275 |
|
|
74 |
|
|
24 |
|
|
6 |
|
|
— |
|
|
201 |
|
|
272 |
|
|
275 |
|
|
NM |
|
Miscellaneous |
6,011 |
|
|
12,427 |
|
|
9,085 |
|
|
10,878 |
|
|
8,640 |
|
|
(6,416 |
) |
|
(52 |
) |
|
(2,629 |
) |
|
(30 |
) |
Total Other |
14,654 |
|
|
18,244 |
|
|
14,025 |
|
|
17,556 |
|
|
14,135 |
|
|
(3,590 |
) |
|
(20 |
) |
|
519 |
|
|
4 |
|
Total Non-Interest Income |
$ |
161,993 |
|
|
$ |
113,242 |
|
|
$ |
112,220 |
|
|
$ |
115,137 |
|
|
$ |
98,158 |
|
|
$ |
48,751 |
|
|
43 |
% |
|
$ |
63,835 |
|
|
65 |
% |
NM - Not meaningful.
|
Six Months Ended |
|
|
|
|
|
Jun 30, |
|
Jun 30, |
|
$ |
|
% |
(Dollars in thousands) |
2020 |
|
2019 |
|
Change |
|
Change |
Brokerage |
$ |
9,428 |
|
|
$ |
9,280 |
|
|
$ |
148 |
|
|
2 |
% |
Trust and
asset management |
39,149 |
|
|
38,836 |
|
|
313 |
|
|
1 |
|
Total wealth management |
48,577 |
|
|
48,116 |
|
|
461 |
|
|
1 |
|
Mortgage
banking |
150,650 |
|
|
55,569 |
|
|
95,081 |
|
|
171 |
|
Service
charges on deposit accounts |
21,685 |
|
|
18,125 |
|
|
3,560 |
|
|
20 |
|
(Losses)
gains on investment securities, net |
(3,551 |
) |
|
2,228 |
|
|
(5,779 |
) |
|
NM |
|
Fees from
covered call options |
2,292 |
|
|
2,427 |
|
|
(135 |
) |
|
(6 |
) |
Trading
losses, net |
(1,085 |
) |
|
(215 |
) |
|
(870 |
) |
|
NM |
|
Operating
lease income, net |
23,769 |
|
|
22,529 |
|
|
1,240 |
|
|
6 |
|
Other: |
|
|
|
|
|
|
|
Interest rate swap fees |
11,759 |
|
|
6,055 |
|
|
5,704 |
|
|
94 |
|
BOLI |
666 |
|
|
2,740 |
|
|
(2,074 |
) |
|
(76 |
) |
Administrative services |
2,045 |
|
|
2,039 |
|
|
6 |
|
|
— |
|
Foreign currency remeasurement (loss) gain |
(359 |
) |
|
577 |
|
|
(936 |
) |
|
NM |
|
Early pay-offs of leases |
349 |
|
|
5 |
|
|
344 |
|
|
NM |
|
Miscellaneous |
18,438 |
|
|
19,620 |
|
|
(1,182 |
) |
|
(6 |
) |
Total Other |
32,898 |
|
|
31,036 |
|
|
1,862 |
|
|
6 |
|
Total Non-Interest Income |
$ |
275,235 |
|
|
$ |
179,815 |
|
|
$ |
95,420 |
|
|
53 |
% |
NM - Not meaningful.
TABLE 16: MORTGAGE BANKING
|
Three Months Ended |
Six Months Ended |
(Dollars in thousands) |
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Jun 30,
2019 |
Jun 30,
2020 |
|
Jun 30,
2019 |
Originations and Commitments: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail originations |
$ |
1,588,932 |
|
|
$ |
773,144 |
|
|
$ |
782,122 |
|
|
$ |
913,631 |
|
|
$ |
669,510 |
|
$ |
2,362,076 |
|
|
$ |
1,035,112 |
|
Correspondent originations |
— |
|
|
— |
|
|
4,024 |
|
|
50,639 |
|
|
182,966 |
|
— |
|
|
331,066 |
|
Veterans
First originations |
621,878 |
|
|
442,957 |
|
|
459,236 |
|
|
456,005 |
|
|
301,324 |
|
1,064,835 |
|
|
466,086 |
|
Total originations for sale (A) |
$ |
2,210,810 |
|
|
$ |
1,216,101 |
|
|
$ |
1,245,382 |
|
|
$ |
1,420,275 |
|
|
$ |
1,153,800 |
|
$ |
3,426,911 |
|
|
$ |
1,832,264 |
|
Originations for investment |
56,954 |
|
|
73,727 |
|
|
105,911 |
|
|
154,897 |
|
|
106,237 |
|
130,681 |
|
|
199,926 |
|
Total originations |
$ |
2,267,764 |
|
|
$ |
1,289,828 |
|
|
$ |
1,351,293 |
|
|
$ |
1,575,172 |
|
|
$ |
1,260,037 |
|
$ |
3,557,592 |
|
|
$ |
2,032,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
as a percentage of originations for sale |
30 |
% |
|
37 |
% |
|
40 |
% |
|
48 |
% |
|
63 |
% |
32 |
% |
|
64 |
% |
Refinances as a percentage of originations for sale |
70 |
|
|
63 |
|
|
60 |
|
|
52 |
|
|
37 |
|
68 |
|
|
36 |
|
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandatory
commitments to fund originations for sale (1) |
$ |
1,275,648 |
|
|
$ |
1,375,162 |
|
|
$ |
372,357 |
|
|
$ |
433,009 |
|
|
$ |
475,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
Production revenue (B) (2) |
$ |
93,433 |
|
|
$ |
49,327 |
|
|
$ |
34,622 |
|
|
$ |
40,924 |
|
|
$ |
29,895 |
|
$ |
142,760 |
|
|
$ |
46,501 |
|
Production margin (B / A) |
4.23 |
% |
|
4.06 |
% |
|
2.78 |
% |
|
2.88 |
% |
|
2.59 |
% |
4.17 |
% |
|
2.54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Servicing: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans
serviced for others (C) |
$ |
9,188,285 |
|
|
$ |
8,314,634 |
|
|
$ |
8,243,251 |
|
|
$ |
7,901,045 |
|
|
$ |
7,515,186 |
|
|
|
|
MSRs, at
fair value (D) |
77,203 |
|
|
73,504 |
|
|
85,638 |
|
|
75,585 |
|
|
72,850 |
|
|
|
|
Percentage of MSRs to loans serviced for others (D / C) |
0.84 |
% |
|
0.88 |
% |
|
1.04 |
% |
|
0.96 |
% |
|
0.97 |
% |
|
|
|
Servicing
income |
$ |
6,908 |
|
|
$ |
7,031 |
|
|
$ |
6,247 |
|
|
$ |
5,989 |
|
|
$ |
5,460 |
|
$ |
13,939 |
|
|
$ |
10,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of MSR: |
|
|
|
|
|
|
|
|
|
|
|
|
MSR -
current period capitalization |
$ |
20,351 |
|
|
$ |
9,447 |
|
|
$ |
14,532 |
|
|
$ |
14,029 |
|
|
$ |
9,802 |
|
$ |
29,798 |
|
|
$ |
16,382 |
|
MSR -
collection of expected cash flows - paydowns |
(419 |
) |
|
(547 |
) |
|
(483 |
) |
|
(456 |
) |
|
(457 |
) |
(966 |
) |
|
(962 |
) |
MSR -
collection of expected cash flows - payoffs |
(8,252 |
) |
|
(6,476 |
) |
|
(6,325 |
) |
|
(6,781 |
) |
|
(3,619 |
) |
(14,728 |
) |
|
(5,111 |
) |
Valuation: |
|
|
|
|
|
|
|
|
|
|
|
|
MSR - changes in fair value model assumptions |
(7,982 |
) |
|
(14,557 |
) |
|
2,329 |
|
|
(4,058 |
) |
|
(4,305 |
) |
(22,539 |
) |
|
(13,049 |
) |
Gain (loss) on derivative contract held as an economic hedge,
net |
589 |
|
|
4,160 |
|
|
(483 |
) |
|
82 |
|
|
920 |
|
4,749 |
|
|
920 |
|
MSR valuation adjustment, net of gain/(loss) on derivative contract
held as an economic hedge |
$ |
(7,393 |
) |
|
$ |
(10,397 |
) |
|
$ |
1,846 |
|
|
$ |
(3,976 |
) |
|
$ |
(3,385 |
) |
$ |
(17,790 |
) |
|
$ |
(12,129 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Mortgage Banking Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Production revenue (2) |
$ |
93,433 |
|
|
$ |
49,327 |
|
|
$ |
34,622 |
|
|
$ |
40,924 |
|
|
$ |
29,895 |
|
$ |
142,760 |
|
|
$ |
46,501 |
|
Servicing
income |
6,908 |
|
|
7,031 |
|
|
6,247 |
|
|
5,989 |
|
|
5,460 |
|
13,939 |
|
|
10,920 |
|
MSR
activity |
4,287 |
|
|
(7,973 |
) |
|
9,570 |
|
|
2,816 |
|
|
2,341 |
|
(3,686 |
) |
|
(1,820 |
) |
Other |
(2,304 |
) |
|
(59 |
) |
|
(2,579 |
) |
|
1,135 |
|
|
(285 |
) |
(2,363 |
) |
|
(32 |
) |
Total mortgage banking revenue |
$ |
102,324 |
|
|
$ |
48,326 |
|
|
$ |
47,860 |
|
|
$ |
50,864 |
|
|
$ |
37,411 |
|
$ |
150,650 |
|
|
$ |
55,569 |
|
- 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.
- 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 and changes to the mortgage recourse obligation
and other non-production revenue.
TABLE 17: NON-INTEREST EXPENSE
|
Three Months Ended |
|
Q2 2020 compared to
Q1 2020 |
|
Q2 2020 compared to
Q2 2019 |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
|
(Dollars in thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
|
$ Change |
|
% Change |
|
$ Change |
|
% Change |
Salaries
and employee benefits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries |
$ |
87,105 |
|
|
$ |
81,286 |
|
|
$ |
82,888 |
|
|
$ |
78,067 |
|
|
$ |
75,360 |
|
|
$ |
5,819 |
|
|
7 |
% |
|
$ |
11,745 |
|
|
16 |
% |
Commissions and incentive compensation |
46,151 |
|
|
31,575 |
|
|
40,226 |
|
|
40,289 |
|
|
36,486 |
|
|
14,576 |
|
|
46 |
|
|
9,665 |
|
|
26 |
|
Benefits |
20,900 |
|
|
23,901 |
|
|
22,827 |
|
|
22,668 |
|
|
21,886 |
|
|
(3,001 |
) |
|
(13 |
) |
|
(986 |
) |
|
(5 |
) |
Total salaries and employee benefits |
154,156 |
|
|
136,762 |
|
|
145,941 |
|
|
141,024 |
|
|
133,732 |
|
|
17,394 |
|
|
13 |
|
|
20,424 |
|
|
15 |
|
Equipment |
15,846 |
|
|
14,834 |
|
|
14,485 |
|
|
13,314 |
|
|
12,759 |
|
|
1,012 |
|
|
7 |
|
|
3,087 |
|
|
24 |
|
Operating
lease equipment |
9,292 |
|
|
9,260 |
|
|
9,766 |
|
|
8,907 |
|
|
8,768 |
|
|
32 |
|
|
— |
|
|
524 |
|
|
6 |
|
Occupancy, net |
16,893 |
|
|
17,547 |
|
|
17,132 |
|
|
14,991 |
|
|
15,921 |
|
|
(654 |
) |
|
(4 |
) |
|
972 |
|
|
6 |
|
Data
processing |
10,406 |
|
|
8,373 |
|
|
7,569 |
|
|
6,522 |
|
|
6,204 |
|
|
2,033 |
|
|
24 |
|
|
4,202 |
|
|
68 |
|
Advertising and marketing |
7,704 |
|
|
10,862 |
|
|
12,517 |
|
|
13,375 |
|
|
12,845 |
|
|
(3,158 |
) |
|
(29 |
) |
|
(5,141 |
) |
|
(40 |
) |
Professional fees |
7,687 |
|
|
6,721 |
|
|
7,650 |
|
|
8,037 |
|
|
6,228 |
|
|
966 |
|
|
14 |
|
|
1,459 |
|
|
23 |
|
Amortization of other intangible assets |
2,820 |
|
|
2,863 |
|
|
3,017 |
|
|
2,928 |
|
|
2,957 |
|
|
(43 |
) |
|
(2 |
) |
|
(137 |
) |
|
(5 |
) |
FDIC
insurance |
7,081 |
|
|
4,135 |
|
|
1,348 |
|
|
148 |
|
|
4,127 |
|
|
2,946 |
|
|
71 |
|
|
2,954 |
|
|
72 |
|
OREO
expense, net |
237 |
|
|
(876 |
) |
|
536 |
|
|
1,170 |
|
|
1,290 |
|
|
1,113 |
|
|
NM |
|
|
(1,053 |
) |
|
(82 |
) |
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions - 3rd party brokers |
707 |
|
|
865 |
|
|
717 |
|
|
734 |
|
|
749 |
|
|
(158 |
) |
|
(18 |
) |
|
(42 |
) |
|
(6 |
) |
Postage |
1,591 |
|
|
1,949 |
|
|
2,220 |
|
|
2,321 |
|
|
2,606 |
|
|
(358 |
) |
|
(18 |
) |
|
(1,015 |
) |
|
(39 |
) |
Miscellaneous |
24,948 |
|
|
21,346 |
|
|
26,693 |
|
|
21,083 |
|
|
21,421 |
|
|
3,602 |
|
|
17 |
|
|
3,527 |
|
|
16 |
|
Total other |
27,246 |
|
|
24,160 |
|
|
29,630 |
|
|
24,138 |
|
|
24,776 |
|
|
3,086 |
|
|
13 |
|
|
2,470 |
|
|
10 |
|
Total Non-Interest Expense |
$ |
259,368 |
|
|
$ |
234,641 |
|
|
$ |
249,591 |
|
|
$ |
234,554 |
|
|
$ |
229,607 |
|
|
$ |
24,727 |
|
|
11 |
% |
|
$ |
29,761 |
|
|
13 |
% |
NM - Not meaningful.
|
|
Six Months Ended |
|
|
|
|
|
Jun 30, |
|
Jun 30, |
$ |
|
% |
(Dollars in thousands) |
|
2020 |
|
2019 |
Change |
|
Change |
Salaries
and employee benefits: |
|
|
|
|
|
|
|
Salaries |
|
$ |
168,391 |
|
|
$ |
149,397 |
|
$ |
18,994 |
|
|
13 |
% |
Commissions and incentive compensation |
|
77,726 |
|
|
68,085 |
|
9,641 |
|
|
14 |
|
Benefits |
|
44,801 |
|
|
41,973 |
|
2,828 |
|
|
7 |
|
Total salaries and employee benefits |
|
290,918 |
|
|
259,455 |
|
31,463 |
|
|
12 |
|
Equipment |
|
30,680 |
|
|
24,529 |
|
6,151 |
|
|
25 |
|
Operating
lease equipment |
|
18,552 |
|
|
17,087 |
|
1,465 |
|
|
9 |
|
Occupancy, net |
|
34,440 |
|
|
32,166 |
|
2,274 |
|
|
7 |
|
Data
processing |
|
18,779 |
|
|
13,729 |
|
5,050 |
|
|
37 |
|
Advertising and marketing |
|
18,566 |
|
|
22,703 |
|
(4,137 |
) |
|
(18 |
) |
Professional fees |
|
14,408 |
|
|
11,784 |
|
2,624 |
|
|
22 |
|
Amortization of other intangible assets |
|
5,683 |
|
|
5,899 |
|
(216 |
) |
|
(4 |
) |
FDIC
insurance |
|
11,216 |
|
|
7,703 |
|
3,513 |
|
|
46 |
|
OREO
expense, net |
|
(639 |
) |
|
1,922 |
|
(2,561 |
) |
|
NM |
|
Other: |
|
|
|
|
|
|
|
Commissions - 3rd party brokers |
|
1,572 |
|
|
1,467 |
|
105 |
|
|
7 |
|
Postage |
|
3,540 |
|
|
5,056 |
|
(1,516 |
) |
|
(30 |
) |
Miscellaneous |
|
46,294 |
|
|
40,481 |
|
5,813 |
|
|
14 |
|
Total other |
|
51,406 |
|
|
47,004 |
|
4,402 |
|
|
9 |
|
Total Non-Interest Expense |
|
$ |
494,009 |
|
|
$ |
443,981 |
|
$ |
50,028 |
|
|
11 |
% |
NM - Not meaningful.
TABLE 18: 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 |
Six Months Ended |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
Jun 30, |
|
Jun 30, |
(Dollars and shares in thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
2020 |
|
2019 |
Reconciliation of Non-GAAP Net Interest Margin and
Efficiency Ratio: |
|
|
|
(A) Interest Income (GAAP) |
$ |
329,816 |
|
|
$ |
344,067 |
|
|
$ |
349,731 |
|
|
$ |
354,627 |
|
|
$ |
346,814 |
|
$ |
673,883 |
|
|
$ |
680,784 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
- Loans |
576 |
|
|
860 |
|
|
892 |
|
|
978 |
|
|
1,031 |
|
1,436 |
|
|
2,065 |
|
- Liquidity Management Assets |
538 |
|
|
551 |
|
|
573 |
|
|
574 |
|
|
568 |
|
1,089 |
|
|
1,133 |
|
- Other Earning Assets |
3 |
|
|
2 |
|
|
1 |
|
|
5 |
|
|
1 |
|
5 |
|
|
3 |
|
(B) Interest Income (non-GAAP) |
$ |
330,933 |
|
|
$ |
345,480 |
|
|
$ |
351,197 |
|
|
$ |
356,184 |
|
|
$ |
348,414 |
|
$ |
676,413 |
|
|
$ |
683,985 |
|
(C) Interest Expense (GAAP) |
$ |
66,685 |
|
|
$ |
82,624 |
|
|
$ |
87,852 |
|
|
$ |
89,775 |
|
|
$ |
80,612 |
|
$ |
149,309 |
|
|
$ |
152,596 |
|
(D) Net Interest Income (GAAP) (A minus C) |
$ |
263,131 |
|
|
$ |
261,443 |
|
|
$ |
261,879 |
|
|
$ |
264,852 |
|
|
$ |
266,202 |
|
$ |
524,574 |
|
|
$ |
528,188 |
|
(E) Net Interest Income (non-GAAP) (B minus
C) |
$ |
264,248 |
|
|
$ |
262,856 |
|
|
$ |
263,345 |
|
|
$ |
266,409 |
|
|
$ |
267,802 |
|
$ |
527,104 |
|
|
$ |
531,389 |
|
Net interest margin (GAAP) |
2.73 |
% |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
|
3.62 |
% |
2.91 |
% |
|
3.66 |
% |
Net interest margin, fully taxable-equivalent
(non-GAAP) |
2.74 |
% |
|
3.14 |
% |
|
3.19 |
% |
|
3.39 |
% |
|
3.64 |
% |
2.93 |
% |
|
3.68 |
% |
(F)
Non-interest income |
$ |
161,993 |
|
|
$ |
113,242 |
|
|
$ |
112,220 |
|
|
$ |
115,137 |
|
|
$ |
98,158 |
|
$ |
275,235 |
|
|
$ |
179,815 |
|
(G) Gains
(losses) on investment securities, net |
808 |
|
|
(4,359 |
) |
|
587 |
|
|
710 |
|
|
864 |
|
(3,551 |
) |
|
2,228 |
|
(H)
Non-interest expense |
259,368 |
|
|
234,641 |
|
|
249,591 |
|
|
234,554 |
|
|
229,607 |
|
494,009 |
|
|
443,981 |
|
Efficiency ratio (H/(D+F-G)) |
61.13 |
% |
|
61.90 |
% |
|
66.82 |
% |
|
61.84 |
% |
|
63.17 |
% |
61.49 |
% |
|
62.91 |
% |
Efficiency ratio (non-GAAP) (H/(E+F-G)) |
60.97 |
% |
|
61.67 |
% |
|
66.56 |
% |
|
61.59 |
% |
|
62.89 |
% |
61.30 |
% |
|
62.62 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Tangible Common Equity
Ratio: |
|
|
|
Total
shareholders’ equity (GAAP) |
$ |
3,990,218 |
|
|
$ |
3,700,393 |
|
|
$ |
3,691,250 |
|
|
$ |
3,540,325 |
|
|
$ |
3,446,950 |
|
|
|
|
Less:
Non-convertible preferred stock (GAAP) |
(412,500 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
|
|
Less:
Intangible assets (GAAP) |
(685,581 |
) |
|
(687,626 |
) |
|
(692,277 |
) |
|
(627,972 |
) |
|
(631,499 |
) |
|
|
|
(I) Total tangible common shareholders’ equity (non-GAAP) |
$ |
2,892,137 |
|
|
$ |
2,887,767 |
|
|
$ |
2,873,973 |
|
|
$ |
2,787,353 |
|
|
$ |
2,690,451 |
|
|
|
|
(J) Total
assets (GAAP) |
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
$ |
33,641,769 |
|
|
|
|
Less:
Intangible assets (GAAP) |
(685,581 |
) |
|
(687,626 |
) |
|
(692,277 |
) |
|
(627,972 |
) |
|
(631,499 |
) |
|
|
|
(K) Total tangible assets (non-GAAP) |
$ |
42,854,436 |
|
|
$ |
38,112,221 |
|
|
$ |
35,928,306 |
|
|
$ |
34,283,930 |
|
|
$ |
33,010,270 |
|
|
|
|
Common equity to assets ratio (GAAP) (L/J) |
8.2 |
% |
|
9.2 |
% |
|
9.7 |
% |
|
9.8 |
% |
|
9.9 |
% |
|
|
|
Tangible common equity ratio (non-GAAP) (I/K) |
6.7 |
% |
|
7.6 |
% |
|
8.0 |
% |
|
8.1 |
% |
|
8.2 |
% |
|
|
|
|
Three Months Ended |
Six Months Ended |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
Jun 30, |
|
Jun 30, |
(Dollars and shares in thousands) |
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
2020 |
|
2019 |
Reconciliation of Non-GAAP Tangible Book Value per Common
Share: |
|
|
|
Total
shareholders’ equity |
$ |
3,990,218 |
|
|
$ |
3,700,393 |
|
|
$ |
3,691,250 |
|
|
$ |
3,540,325 |
|
|
$ |
3,446,950 |
|
|
|
|
Less:
Preferred stock |
(412,500 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
|
|
(L) Total common equity |
$ |
3,577,718 |
|
|
$ |
3,575,393 |
|
|
$ |
3,566,250 |
|
|
$ |
3,415,325 |
|
|
$ |
3,321,950 |
|
|
|
|
(M)
Actual common shares outstanding |
57,574 |
|
|
57,545 |
|
|
57,822 |
|
|
56,698 |
|
|
56,668 |
|
|
|
|
Book value per common share (L/M) |
$ |
62.14 |
|
|
$ |
62.13 |
|
|
$ |
61.68 |
|
|
$ |
60.24 |
|
|
$ |
58.62 |
|
|
|
|
Tangible book value per common share (non-GAAP)
(I/M) |
$ |
50.23 |
|
|
$ |
50.18 |
|
|
$ |
49.70 |
|
|
$ |
49.16 |
|
|
$ |
47.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Return on Average Tangible
Common Equity: |
|
|
|
(N) Net income applicable to common shares |
$ |
19,609 |
|
|
$ |
60,762 |
|
|
$ |
83,914 |
|
|
$ |
97,071 |
|
|
$ |
79,416 |
|
$ |
80,371 |
|
|
$ |
166,512 |
|
Add:
Intangible asset amortization |
2,820 |
|
|
2,863 |
|
|
3,017 |
|
|
2,928 |
|
|
2,957 |
|
5,683 |
|
|
5,899 |
|
Less: Tax
effect of intangible asset amortization |
(832 |
) |
|
(799 |
) |
|
(793 |
) |
|
(773 |
) |
|
(771 |
) |
(1,608 |
) |
|
(1,502 |
) |
After-tax intangible asset amortization |
1,988 |
|
|
2,064 |
|
|
2,224 |
|
|
2,155 |
|
|
2,186 |
|
4,075 |
|
|
4,397 |
|
(O) Tangible net income applicable to common shares (non-GAAP) |
$ |
21,597 |
|
|
$ |
62,826 |
|
|
$ |
86,138 |
|
|
$ |
99,226 |
|
|
$ |
81,602 |
|
$ |
84,446 |
|
|
$ |
170,909 |
|
Total
average shareholders' equity |
$ |
3,908,846 |
|
|
$ |
3,710,169 |
|
|
$ |
3,622,184 |
|
|
$ |
3,496,714 |
|
|
$ |
3,414,340 |
|
$ |
3,809,508 |
|
|
$ |
3,362,000 |
|
Less:
Average preferred stock |
(273,489 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
(199,245 |
) |
|
(125,000 |
) |
(P) Total average common shareholders' equity |
$ |
3,635,357 |
|
|
$ |
3,585,169 |
|
|
$ |
3,497,184 |
|
|
$ |
3,371,714 |
|
|
$ |
3,289,340 |
|
$ |
3,610,263 |
|
|
$ |
3,237,000 |
|
Less: Average intangible assets |
(686,526 |
) |
|
(690,777 |
) |
|
(689,286 |
) |
|
(630,279 |
) |
|
(624,794 |
) |
(688,652 |
) |
|
(623,524 |
) |
(Q) Total average tangible common shareholders’ equity
(non-GAAP) |
$ |
2,948,831 |
|
|
$ |
2,894,392 |
|
|
$ |
2,807,898 |
|
|
$ |
2,741,435 |
|
|
$ |
2,664,546 |
|
$ |
2,921,611 |
|
|
$ |
2,613,476 |
|
Return on average common equity, annualized
(N/P) |
2.17 |
% |
|
6.82 |
% |
|
9.52 |
% |
|
11.42 |
% |
|
9.68 |
% |
4.48 |
% |
|
10.37 |
% |
Return on average tangible common equity, annualized
(non-GAAP) (O/Q) |
2.95 |
% |
|
8.73 |
% |
|
12.17 |
% |
|
14.36 |
% |
|
12.28 |
% |
5.81 |
% |
|
13.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income
and Pre-Tax, Pre-Provision, Pre-MSR Adjustment
Income: |
|
|
|
|
|
Income
before taxes |
$ |
30,703 |
|
|
$ |
87,083 |
|
|
$ |
116,682 |
|
|
$ |
134,601 |
|
|
$ |
110,173 |
|
$ |
117,786 |
|
|
$ |
228,818 |
|
Add: Provision for credit losses |
135,053 |
|
|
52,961 |
|
|
7,826 |
|
|
10,834 |
|
|
24,580 |
|
188,014 |
|
|
35,204 |
|
Pre-tax income, excluding provision for credit losses
(non-GAAP) |
$ |
165,756 |
|
|
$ |
140,044 |
|
|
$ |
124,508 |
|
|
$ |
145,435 |
|
|
$ |
134,753 |
|
$ |
305,800 |
|
|
$ |
264,022 |
|
Less: MSR
valuation adjustment, net of (loss)/gain on derivative contract
held as an economic hedge |
$ |
(7,393 |
) |
|
$ |
(10,397 |
) |
|
$ |
1,846 |
|
|
$ |
(3,976 |
) |
|
$ |
(3,385 |
) |
$ |
(17,790 |
) |
|
$ |
(12,129 |
) |
Pre-tax income, excluding provision for credit losses and
MSR valuation adjustments (non-GAAP) |
$ |
173,149 |
|
|
$ |
150,441 |
|
|
$ |
122,662 |
|
|
$ |
149,411 |
|
|
$ |
138,138 |
|
$ |
323,590 |
|
|
$ |
276,151 |
|
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 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, July 22, 2020 at 11:00 a.m. (Central Time) regarding
second quarter 2020 results. Individuals interested in listening
should call (877) 363-5049 and enter Conference ID #6266965. 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 second 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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