ROSEMONT, Ill., Oct. 21, 2020 (GLOBE NEWSWIRE)
-- Wintrust Financial Corporation (“Wintrust”, “the Company” or
"we") (Nasdaq: WTFC) announced record net income of $107.3 million
or $1.67 per diluted common share for the third quarter of 2020, an
increase in diluted earnings per common share of 391% compared to
the second quarter of 2020 and a decrease of 1% compared to the
third quarter of 2019. The Company recorded net income of $191.8
million or $3.06 per diluted common share for the first nine months
of 2020 compared to net income of $269.7 million or $4.60 per
diluted common share for the same period of 2019.
Highlights of the Third Quarter of
2020:
Comparative information to the second quarter of 2020
- Total assets increased by $192 million.
- Total loans increased by $733 million.
- Total deposits increased by $193 million.
- Net interest income decreased by
$7.2 million primarily due to lower Paycheck Protection Program
("PPP") loan fee accretion as a result of changes to the estimated
timing of loan forgiveness. The Company recognized $17.4 million of
PPP loan fee accretion in the third quarter of 2020 as compared to
$25.1 million in the prior quarter. As of September 30, 2020, the
Company had approximately $49.3 million of PPP loan fees that have
yet to be recognized in income.
- The loans to deposits ratio ended
the third quarter of 2020 at 89.7% as compared to 88.1% as of the
prior quarter end. Excluding PPP loans, the loans to deposits ratio
ended the third quarter of 2020 at 80.2%.
- Mortgage banking revenue increased
by $6.2 million to $108.5 million for the third quarter of 2020 as
compared to $102.3 million in the prior quarter.
- Loans originated for sale in the third quarter of 2020 totaled
$2.2 billion, essentially unchanged from the prior quarter.
- Outstanding COVID-19 related loan
modifications for customers totaled approximately $413 million or
1.4% of total loans, excluding PPP loans, as of September 30, 2020
as compared to $1.7 billion or 6.2% as of June 30, 2020.
- Provision for credit losses totaled
$25.0 million in the third quarter of 2020 as compared to $135.1
million in the second quarter of 2020.
- Recorded net charge-offs of $9.3
million in the third quarter of 2020, of which $6.4 million were
reserves on individually assessed loans as of the prior quarter
end, as compared to net charge-offs of $15.4 million in the second
quarter of 2020. Net charge-offs as a percentage of average total
loans, totaled 12 basis points in the third quarter of 2020 on an
annualized basis compared to 20 basis points on an annualized basis
in the second quarter of 2020.
- The allowance for credit losses on
our core loan portfolio is approximately 1.88% of the outstanding
balance as of September 30, 2020, up from 1.85% as of the prior
quarter end. See Table 12 for more information.
- Non-performing assets totaled
$182.3 million, or 0.42% of total assets, as of September 30, 2020
as compared to $198.5 million, or 0.46% of total assets, as of the
prior quarter end.
Other items of note from the third quarter
of 2020
- 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 $3.0 million in the third quarter of 2020 as
compared to a decline of $7.4 million in the prior quarter.
- Agreed to settle long standing
recourse obligation disputes which resulted in an additional
accrual of $3.1 million in the third quarter of 2020, recorded as a
reduction to other mortgage banking revenue.
- Accrued $6.3 million of contingent
consideration expense related to the previous acquisition of
mortgage operations in the third quarter of 2020 as compared to
$7.2 million in the prior quarter, which was recorded in other
non-interest expense.
- Recorded acquisition related costs of $132,000 in the third
quarter of 2020 as compared to $4.9 million in the prior
quarter.
- Recorded a $9.0 million state
income tax benefit in the third quarter of 2020 related to the
settlement of an uncertain tax position. Net of the federal tax
impact, the reduction to income tax expense was $7.1 million.
Edward J. Wehmer, Founder and Chief Executive
Officer, commented, "I remain 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
record net income of $107.3 million for the third quarter of 2020,
up from $21.7 million in the second quarter of 2020. The third
quarter of 2020 was characterized by strong loan growth, declining
net interest income primarily due to lower PPP loan fee accretion,
strong mortgage banking revenue, increased allowance for credit
losses coverage and a continued focus to increase franchise value
in our market area."
Mr. Wehmer continued, "The Company grew total
loans by $733 million or 9%, on an annualized basis, in the third
quarter of 2020 as compared to the second quarter of 2020. The
Company experienced growth in its commercial, commercial real
estate and premium finance receivable portfolios. In addition, the
Company originated approximately $27 million of PPP loans in the
third quarter of 2020. Our loan pipelines remain strong and we
expect to continue to grow loans in the fourth quarter of 2020
without compromising our credit standards. Total deposits increased
by $193 million as compared to the second quarter of 2020 including
$205 million of non-interest bearing deposit growth. We continue to
emphasize growing our franchise including gathering low cost
deposits which we believe will drive value in the long term. We
have accumulated excess liquidity in recent quarters and
believe that, if conditions allow for suitable deployment of such
excess liquidity, we could potentially increase our net interest
margin by 10-25 basis points, depending on the mix of earning
assets of such reinvestment. Our loans to deposits ratio ended the
quarter at 89.7% and we believe that we have sufficient liquidity
to meet customer loan demand."
Mr. Wehmer commented, "Net interest income
decreased in the third quarter of 2020 primarily due to lower PPP
loan fee accretion as a result of changes to the estimated timing
of loan forgiveness. The Company recognized $17.4 million of PPP
loan fee accretion in third quarter of 2020 as compared to $25.1
million in the prior quarter. Excluding the impact of PPP fees, the
Company effectively offset the net interest margin impact of
declining earning asset yields through downward repricing of
interest-bearing deposits. We expect that, absent changes to the
level of PPP loan fee accretion, we can continue to mitigate loan
yield compression with deposit repricing in the fourth quarter of
2020. 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 another 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 third
quarter of 2020 were $2.2 billion, essentially unchanged from the
second 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 acquisition of
mortgage operations. Additionally, the Company recorded a $3.0
million decrease in the value of mortgage servicing rights related
to changes in fair value model assumptions. 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 0.87% net overhead ratio for
the third quarter of 2020. We believe the fourth 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 $25.0 million
in the third quarter increasing our allowance for credit losses.
The allowance for credit losses on our core loan portfolio as of
September 30, 2020 is approximately 1.88% of the outstanding
balance. Net charge-offs totaled $9.3 million in the third quarter
of 2020, of which $6.4 million were reserves on individually
assessed loans as of the prior quarter end, as compared to $15.4
million in the second quarter of 2020. Additionally, the level of
non-performing assets decreased by $16.2 million to $182.3 million.
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. The Company's capital
ratios were stable in the third quarter of 2020 as net income
supported asset growth. We believe the Company's capital levels
remain adequate and will evaluate if it is prudent to resume
repurchasing common stock."
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 third 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.
Graphs available at the following
link: http://ml.globenewswire.com/Resource/Download/6ccf49fe-326a-4af9-87b2-479bbf0543ee
SUMMARY OF RESULTS:
BALANCE SHEET
Total asset growth of $192 million in the third
quarter of 2020 was primarily comprised of a $733 million increase
in loans, partially offset by a $417 million decrease in investment
securities and a $189 million decrease in interest-bearing deposits
with banks. The $733 million increase in loans is comprised of
a $418 million increase in commercial loans, a $222 million
increase in commercial real estate loans and a $148 million
increase in premium finance receivables. The $417 million decrease
in investment securities was primarily due to accelerated
prepayments and exercised embedded call options. The Company
believes that the $3.8 billion of interest-bearing deposits with
banks held as of September 30, 2020 provides more than sufficient
liquidity to operate its business plan.
Total liabilities increased $108 million in the
third quarter of 2020 resulting primarily from a $193 million
increase in total deposits. The increase in deposits includes a
$272 million increase in MaxSafe money market deposits and a $205
million increase in non-interest-bearing deposits, partially offset
by a $197 million decrease in wealth management deposits. Our loans
to deposits ratio ended the quarter at 89.7%. 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 third quarter of 2020, net interest
income totaled $255.9 million, a decrease of $7.2 million as
compared to the second quarter of 2020 and a decrease of $8.9
million as compared to the third quarter of 2019. The $7.2 million
decrease in net interest income in the third quarter of 2020
compared to the second quarter of 2020 was primarily due to $7.7
million less PPP loan fee accretion in the third quarter of
2020.
Net interest margin was 2.56% (2.57% on a fully
taxable-equivalent basis, non-GAAP) during the third quarter of
2020 compared to 2.73% (2.74% on a fully taxable-equivalent basis,
non-GAAP) during the second quarter of 2020 and 3.37% (3.39% on a
fully taxable-equivalent basis, non-GAAP) during the third quarter
of 2019. The 17 basis point decrease in net interest margin in the
third quarter of 2020 as compared to the second quarter of 2020 was
attributable to a 32 basis point decline in the yield on earning
assets and a four basis point decrease in the net free funds
contribution partially offset by a 19 basis point decrease in the
rate paid on interest-bearing liabilities. The 32 basis point
decline in the yield on earning assets in the third quarter of 2020
as compared to the second quarter of 2020 was in part due to a 14
basis point impact attributed to the declining yield on PPP loans.
The remaining 18 basis point decrease in earning asset yields,
primarily due to declining loan yields, excluding PPP, was more
than offset by a 19 basis point decrease in the rate paid on
interest-bearing liabilities. The decrease in the rate paid on
interest-bearing liabilities in the third quarter of 2020 as
compared to the prior quarter is primarily due to a 20 basis point
decrease in the rate paid on interest-bearing deposits as
management initiated various deposit rate reductions given the low
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 $389.0
million as of September 30, 2020 an increase of $15.8 million as
compared to $373.2 million as of June 30, 2020. The allowance for
credit losses increased primarily due to portfolio changes
partially offset by changes in the macroeconomic forecasted
conditions which contributed to decrease reserves. Consistent with
the recovery in economic activity since the end of the second
quarter of 2020, the Company's third quarter of 2020 macroeconomic
forecasts of key model inputs (Gross Domestic Product, Baa
Corporate Credit spreads, Dow Jones Total Stock Market Index and
Commercial Real Estate Price Index) assume an improvement in the
economic outlook compared to the macroeconomic forecasts used in
the second quarter of 2020. While the uncertainties around the path
of the recovery are still present, the third quarter of 2020
macroeconomic forecasts assume that the impact of those
uncertainties on economic growth is relatively less severe compared
to that assumed in the prior quarter. The Commercial, Industrial
and Other portfolio realized a decrease in the allowance for credit
losses as compared to the prior quarter-end, which was primarily
driven by improving Dow Jones Total Stock Market Index and Baa
Corporate Credit spread macroeconomic scenario variables. A
deterioration in the CRE Price Index for the first portion of the
Reasonable & Supportable period was a primary driver of
increases in the allowance for credit losses of the Commercial Real
Estate portfolios. Other key drivers of allowance for credit losses
changes in these portfolios include, but are not limited to, net
new loan growth and loan risk rating migration.
The provision for credit losses totaled $25.0
million for the third quarter of 2020 compared to $135.1 million
for the second quarter of 2020 and $10.8 million for the third
quarter of 2019. For more information regarding the provision for
credit losses, see Table 11 in this report.
Management believes the allowance for credit
losses is appropriate to account for expected credit losses. The
Current Expected Credit Losses ("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. A summary of the allowance for credit losses
calculated for the loan components in the core loan portfolio, the
niche and consumer loan portfolio and the purchased loan portfolio
as of September 30, 2020, June 30, 2020 and
March 31, 2020 is shown on Table 12 of this report.
Net charge-offs totaled $9.3 million in the
third quarter of 2020, a $6.1 million decrease from $15.4 million
in the second quarter of 2020 and a $165,000 decrease from $9.4
million in the third quarter of 2019. Net charge-offs as a
percentage of average total loans, totaled 12 basis points in the
third quarter of 2020 on an annualized basis compared to 20 basis
points on an annualized basis in the second quarter of 2020 and 15
basis points on an annualized basis in the third quarter of 2019.
For more information regarding net charge-offs, see Table 10 in
this report.
As of September 30, 2020, $49.9 million of
all loans, or 0.2%, were 60 to 89 days past due and $186.5 million,
or 0.6%, were 30 to 59 days (or one payment) past due. 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. 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 real
estate loan portfolios continue to exhibit low delinquency rates as
of September 30, 2020. Home equity loans at September 30,
2020 that are current with regard to the contractual terms of the
loan agreement represent 98.3% of the total home equity portfolio.
Residential real estate loans at September 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.
Outstanding COVID-19 related loan modifications
for customers totaled approximately $413 million or 1.4% of total
loans, excluding PPP loans as of September 30, 2020 as compared to
$1.7 billion or 6.2% as of June 30, 2020. The outstanding
modifications primarily changed terms to interest-only
payments.
The ratio of non-performing assets to total
assets was 0.42% as of September 30, 2020, compared to 0.46%
at June 30, 2020, and 0.38% at September 30, 2019.
Non-performing assets totaled $182.3 million at September 30,
2020, compared to $198.5 million at June 30, 2020 and $132.0
million at September 30, 2019. Non-performing loans totaled
$173.1 million, or 0.54% of total loans, at September 30, 2020
compared to $188.3 million, or 0.60% of total loans, at
June 30, 2020 and $114.3 million, or 0.44% of total loans, at
September 30, 2019. The decrease in non-performing loans as of
September 30, 2020 as compared to June 30, 2020 is
primarily due to an $18.8 million decrease 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 in the second quarter of 2020. As state
emergency orders expired in the third quarter of 2020, many of the
non-performing premium finance receivables were modified and
returned to current as of September 30, 2020. Other real
estate owned ("OREO") of $9.2 million at September 30, 2020
decreased by $1.0 million compared to $10.2 million at
June 30, 2020 and decreased $8.3 million compared to $17.5
million at September 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 increased by $2.3
million during the third quarter of 2020 as compared to the second
quarter of 2020 primarily due to increased asset management fees
and brokerage commissions. Wealth management revenue is comprised
of the trust and asset management revenue of The Chicago Trust
Company and Great Lakes Advisors, the brokerage commissions,
managed money fees and insurance product commissions at Wintrust
Investments and fees from tax-deferred like-kind exchange services
provided by the Chicago Deferred Exchange Company.
Mortgage banking revenue increased by $6.2
million in the third quarter of 2020 as compared to the second
quarter of 2020, primarily due to a $5.8 million increase in
revenue related to mortgage servicing rights activity. Loans
originated for sale were $2.2 billion in the third quarter of 2020,
essentially unchanged from the second quarter of 2020. The
percentage of origination volume from refinancing activities was
59% in the third quarter of 2020 as compared to 70% in the second
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 third quarter of 2020, the fair value
of the mortgage servicing rights portfolio increased primarily due
to increased capitalization of $20.9 million during the third
quarter. This increase was partially offset by a negative fair
value adjustment of $3.0 million as well as a reduction in value of
$7.9 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. 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 as of September 30, 2020 or June 30, 2020.
Other non-interest income decreased by $1.4
million in the third quarter of 2020 as compared to the second
quarter of 2020 primarily due to lower swap fees with
commercial clients.
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 $9.9 million in the third quarter of 2020 as compared to the
second quarter of 2020. The $9.9 million increase is comprised of
an increase of $4.8 million in employee benefits expense, an
increase of $2.8 million in salaries expense, and an increase of
$2.3 million in commissions and incentive compensation. The
increase in employee benefits expense is primarily due to increases
in employee insurance expense related to higher medical claims in
the third quarter of 2020. The increase in salaries expense is
primarily related to increased staffing costs to support mortgage
origination. The increase in commissions and incentive compensation
is primarily due to a reversal of expense associated with the
Company's long term incentive program recorded in the second
quarter of 2020.
Equipment expense totaled $17.3 million in the
third quarter of 2020, an increase of $1.4 million as compared to
the second quarter of 2020. This increase is primarily due to
increased software licensing expenses.
Professional fees totaled $6.5 million in the
third quarter of 2020, a decrease of $1.2 million as compared to
the second quarter of 2020. The decrease in the third quarter
relates primarily to lower legal and consulting fees during the
period. Professional fees include legal, audit and tax fees,
external loan review costs, consulting arrangements and normal
regulatory exam assessments.
Data processing expenses totaled $5.7 million in
the third quarter of 2020, a decrease of $4.7 million as compared
to the second quarter of 2020. The decrease in the third quarter
relates primarily to conversion costs of $4.5 million associated
with the Countryside Bank acquisition recognized in the second
quarter of 2020.
Miscellaneous expense in the third quarter of
2020 increased $1.1 million as compared to the second quarter of
2020. The increase in the third quarter is primarily due to higher
loan expenses. The third quarter of 2020 included $6.3 million of
contingent consideration expense related to the previous
acquisition of mortgage operations as compared to $7.2 million in
the prior quarter. The liability for contingent consideration
expense related to the previous acquisition of mortgage operations
is based upon forward looking mortgage origination volumes and the
estimated profitability of that operation. Should those
assumptions change going forward, the liability may need to be
increased or decreased. The contractual period covering contingent
consideration ends in January 2023. Miscellaneous expense also
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 $30.0
million in the third quarter of 2020 compared to $9.0 million in
the second quarter of 2020 and $35.5 million in the third quarter
of 2019. The effective tax rates were 21.83% in the third quarter
of 2020 compared to 29.46% in the second quarter of 2020 and 26.36%
in the third quarter of 2019. The effective tax rate in the third
quarter of 2020 reflects a $9.0 million state income tax benefit
related to the settlement of an uncertain tax position. Net of the
federal tax impact, the reduction to income tax expense was $7.1
million.
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 third quarter of 2020, this unit expanded
its loan and deposit portfolios. However, the banking segment also
experienced net interest margin compression primarily due to lower
PPP loan fee accretion in the third quarter of 2020 as compared to
the second quarter of 2020.
Mortgage banking revenue was $108.5 million for
the third quarter of 2020 an increase of $6.2 million as compared
to the second quarter of 2020 primarily due to a $5.8 million
increase in revenue related to mortgage servicing rights activity.
Services charges on deposit accounts totaled $11.5 million in the
third quarter of 2020 an increase of $1.1 million as compared to
the second quarter of 2020 primarily due to higher account analysis
and overdraft fees. The Company's gross commercial and commercial
real estate loan pipelines remained strong as of September 30,
2020. Before the impact of scheduled payments and prepayments,
gross commercial and commercial real estate loan pipelines were
estimated to be approximately $1.3 billion to $1.5 billion at
September 30, 2020. When adjusted for the probability of
closing, the pipelines were estimated to be approximately $850
million to $950 million at September 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, accounts
receivable financing and value-added, out-sourced administrative
services and other services. Originations within the insurance
premium financing receivables portfolio were $2.8 billion during
the third quarter of 2020 and average balances increased by $582.1
million as compared to the second quarter of 2020. The increase in
average balances was more than offset by margin compression in this
portfolio resulting in a $1.3 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 third quarter of 2020, with its
portfolio of assets, including capital leases, loans and equipment
on operating leases, increasing by $20.3 million to $2.0 billion at
the end of the third quarter of 2020. Revenues from the Company's
out-sourced administrative services business were $1.1 million in
the third quarter of 2020, an increase of $144,000 from the second
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 increased by $2.3 million in
the third quarter of 2020 compared to the second quarter of 2020,
totaling $25.0 million in the third quarter of 2020. Increases in
asset management fees were primarily due to favorable equity market
performance during the third quarter of 2020. At September 30,
2020, the Company’s wealth management subsidiaries had
approximately $28.2 billion of assets under administration, which
included $3.5 billion of assets owned by the Company and its
subsidiary banks, representing a $1.2 billion increase from the
$27.0 billion of assets under administration at June 30,
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 Small Business
Administration ("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 September 30, 2020, the
Company secured authorization from the SBA and funded over 12,000
PPP loans with a carrying balance of approximately $3.4
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 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 third quarter of 2020, as compared to the second
quarter of 2020 (sequential quarter) and third quarter of 2019
(linked quarter), are shown in the table below:
|
|
|
Three Months Ended |
% or(1)
basis point
(bp)
change from |
|
% or
basis point
(bp)
change from |
|
(Dollars in thousands, except per share data) |
|
Sep 30, 2020 |
|
Jun 30, 2020 |
|
Sep 30, 2019 |
2nd Quarter
2020 |
|
3rd Quarter
2019 |
|
Net income |
|
$ |
107,315 |
|
|
$ |
21,659 |
|
|
$ |
99,121 |
|
395 |
|
% |
|
8 |
|
% |
| Pre-tax
income, excluding provision for credit losses (non-GAAP)
(2) |
|
162,310 |
|
|
165,756 |
|
|
145,435 |
|
(2 |
) |
|
|
12 |
|
|
| Net
income per common share – diluted |
|
1.67 |
|
|
0.34 |
|
|
1.69 |
|
391 |
|
|
|
(1 |
) |
|
| Net
revenue (3) |
|
426,529 |
|
|
425,124 |
|
|
379,989 |
|
— |
|
|
|
12 |
|
|
| Net
interest income |
|
255,936 |
|
|
263,131 |
|
|
264,852 |
|
(3 |
) |
|
|
(3 |
) |
|
| Net
interest margin |
|
2.56 |
% |
|
2.73 |
% |
|
3.37 |
% |
(17 |
) |
bp |
|
(81 |
) |
bp |
| Net
interest margin - fully taxable equivalent (non-GAAP)
(2) |
|
2.57 |
|
|
2.74 |
|
|
3.39 |
|
(17 |
) |
|
|
(82 |
) |
|
| Net
overhead ratio (4) |
|
0.87 |
|
|
0.93 |
|
|
1.40 |
|
(6 |
) |
|
|
(53 |
) |
|
| Return on
average assets |
|
0.99 |
|
|
0.21 |
|
|
1.16 |
|
78 |
|
|
|
(17 |
) |
|
| Return on
average common equity |
|
10.66 |
|
|
2.17 |
|
|
11.42 |
|
849 |
|
|
|
(76 |
) |
|
|
Return on average tangible common equity (non-GAAP)
(2) |
|
13.43 |
|
|
2.95 |
|
|
14.36 |
|
1,048 |
|
|
|
(93 |
) |
|
|
At end of period |
|
|
|
|
|
|
|
|
|
|
|
| Total
assets |
|
$ |
43,731,718 |
|
|
$ |
43,540,017 |
|
|
$ |
34,911,902 |
|
2 |
|
% |
|
25 |
|
% |
| Total
loans (5) |
|
32,135,555 |
|
|
31,402,903 |
|
|
25,710,171 |
|
9 |
|
|
|
25 |
|
|
| Total
deposits |
|
35,844,422 |
|
|
35,651,874 |
|
|
28,710,379 |
|
2 |
|
|
|
25 |
|
|
|
Total shareholders’ equity |
|
4,074,089 |
|
|
3,990,218 |
|
|
3,540,325 |
|
8 |
|
|
|
15 |
|
|
(1) Period-end balance sheet percentage
changes are annualized.
(2) See "Supplemental Non-GAAP Financial
Measures/Ratios" at Table 18 for additional information on this
performance measure/ratio.
(3) Net revenue is net interest income plus
non-interest income.
(4) The net overhead ratio is calculated by
netting total non-interest expense and total non-interest income,
annualizing this amount, and dividing by that period's average
total assets. A lower ratio indicates a higher degree of
efficiency.
(5) Excludes mortgage loans
held-for-sale.
Certain returns, yields, performance ratios, or
quarterly growth rates are “annualized” in this presentation to
represent an annual time period. This is done for analytical
purposes to better discern, for decision-making purposes,
underlying performance trends when compared to full-year or
year-over-year amounts. For example, a 5% growth rate for a quarter
would represent an annualized 20% growth rate. Additional
supplemental financial information showing quarterly trends can be
found on the Company’s website at www.wintrust.com by
choosing “Financial Reports” under the “Investor Relations”
heading, and then choosing “Financial Highlights.”
WINTRUST FINANCIAL
CORPORATION
Selected Financial Highlights
|
|
|
Three Months Ended |
Nine Months Ended |
|
(Dollars in thousands, except per share data) |
|
Sep 30,
2020 |
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
Sep 30,
2020 |
|
Sep 30,
2019 |
|
Selected Financial Condition Data (at end of
period): |
|
|
|
| Total
assets |
|
$ |
43,731,718 |
|
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
|
|
| Total
loans (1) |
|
32,135,555 |
|
|
31,402,903 |
|
|
27,807,321 |
|
|
26,800,290 |
|
|
25,710,171 |
|
|
|
|
| Total
deposits |
|
35,844,422 |
|
|
35,651,874 |
|
|
31,461,660 |
|
|
30,107,138 |
|
|
28,710,379 |
|
|
|
|
| Junior
subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
|
|
|
Total shareholders’ equity |
|
4,074,089 |
|
|
3,990,218 |
|
|
3,700,393 |
|
|
3,691,250 |
|
|
3,540,325 |
|
|
|
|
|
Selected Statements of Income Data: |
|
|
|
|
Net interest income |
|
$ |
255,936 |
|
|
$ |
263,131 |
|
|
$ |
261,443 |
|
|
$ |
261,879 |
|
|
$ |
264,852 |
|
$ |
780,510 |
|
|
$ |
793,040 |
|
| Net
revenue (2) |
|
426,529 |
|
|
425,124 |
|
|
374,685 |
|
|
374,099 |
|
|
379,989 |
|
1,226,338 |
|
|
1,087,992 |
|
| Net
income |
|
107,315 |
|
|
21,659 |
|
|
62,812 |
|
|
85,964 |
|
|
99,121 |
|
191,786 |
|
|
269,733 |
|
| Pre-tax
income, excluding provision for credit losses (non-GAAP)
(3) |
|
162,310 |
|
|
165,756 |
|
|
140,044 |
|
|
124,508 |
|
|
145,435 |
|
468,110 |
|
|
409,457 |
|
| Net
income per common share – Basic |
|
1.68 |
|
|
0.34 |
|
|
1.05 |
|
|
1.46 |
|
|
1.71 |
|
3.08 |
|
|
4.65 |
|
|
Net income per common share – Diluted |
|
1.67 |
|
|
0.34 |
|
|
1.04 |
|
|
1.44 |
|
|
1.69 |
|
3.06 |
|
|
4.60 |
|
|
Selected Financial Ratios and Other Data: |
|
|
|
|
Performance Ratios: |
|
|
|
| Net
interest margin |
|
2.56 |
% |
|
2.73 |
% |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
2.79 |
% |
|
3.56 |
% |
| Net
interest margin - fully taxable equivalent (non-GAAP)
(3) |
|
2.57 |
|
|
2.74 |
|
|
3.14 |
|
|
3.19 |
|
|
3.39 |
|
2.80 |
|
|
3.58 |
|
|
Non-interest income to average assets |
|
1.58 |
|
|
1.55 |
|
|
1.24 |
|
|
1.25 |
|
|
1.35 |
|
1.47 |
|
|
1.22 |
|
|
Non-interest expense to average assets |
|
2.45 |
|
|
2.48 |
|
|
2.58 |
|
|
2.78 |
|
|
2.74 |
|
2.50 |
|
|
2.80 |
|
| Net
overhead ratio (4) |
|
0.87 |
|
|
0.93 |
|
|
1.33 |
|
|
1.53 |
|
|
1.40 |
|
1.03 |
|
|
1.58 |
|
| Return on
average assets |
|
0.99 |
|
|
0.21 |
|
|
0.69 |
|
|
0.96 |
|
|
1.16 |
|
0.63 |
|
|
1.11 |
|
| Return on
average common equity |
|
10.66 |
|
|
2.17 |
|
|
6.82 |
|
|
9.52 |
|
|
11.42 |
|
6.56 |
|
|
10.74 |
|
| Return on
average tangible common equity (non-GAAP) (3) |
|
13.43 |
|
|
2.95 |
|
|
8.73 |
|
|
12.17 |
|
|
14.36 |
|
8.38 |
|
|
13.60 |
|
| Average
total assets |
|
$ |
42,962,844 |
|
|
$ |
42,042,729 |
|
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
$ |
40,552,517 |
|
|
$ |
32,418,875 |
|
| Average
total shareholders’ equity |
|
4,034,902 |
|
|
3,908,846 |
|
|
3,710,169 |
|
|
3,622,184 |
|
|
3,496,714 |
|
3,885,187 |
|
|
3,407,398 |
|
| Average
loans to average deposits ratio |
|
89.6 |
% |
|
87.8 |
% |
|
90.1 |
% |
|
88.8 |
% |
|
90.6 |
% |
89.1 |
% |
|
92.4 |
% |
|
Period-end loans to deposits ratio |
|
89.7 |
|
|
88.1 |
|
|
88.4 |
|
|
89.0 |
|
|
89.6 |
|
|
|
|
|
Common Share Data at end of period: |
|
|
|
| Market
price per common share |
|
$ |
40.05 |
|
|
$ |
43.62 |
|
|
$ |
32.86 |
|
|
$ |
70.90 |
|
|
$ |
64.63 |
|
|
|
|
| Book
value per common share |
|
63.57 |
|
|
62.14 |
|
|
62.13 |
|
|
61.68 |
|
|
60.24 |
|
|
|
|
| Tangible
book value per common share (non-GAAP) (3) |
|
51.70 |
|
|
50.23 |
|
|
50.18 |
|
|
49.70 |
|
|
49.16 |
|
|
|
|
|
Common shares outstanding |
|
57,601,991 |
|
|
57,573,672 |
|
|
57,545,352 |
|
|
57,821,891 |
|
|
56,698,429 |
|
|
|
|
|
Other Data at end of period: |
|
|
|
| Tier 1
leverage ratio (5) |
|
8.2 |
% |
|
8.1 |
% |
|
8.5 |
% |
|
8.7 |
% |
|
8.8 |
% |
|
|
|
|
Risk-based capital ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tier 1
capital ratio (5) |
|
10.1 |
|
|
10.1 |
|
|
9.3 |
|
|
9.6 |
|
|
9.7 |
|
|
|
|
| Common
equity tier 1 capital ratio(5) |
|
8.9 |
|
|
8.8 |
|
|
8.9 |
|
|
9.2 |
|
|
9.3 |
|
|
|
|
| Total
capital ratio (5) |
|
12.8 |
|
|
12.8 |
|
|
11.9 |
|
|
12.2 |
|
|
12.4 |
|
|
|
|
| Allowance
for credit losses (6) |
|
$ |
388,971 |
|
|
$ |
373,174 |
|
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
|
|
| Allowance
for loan and unfunded lending-related commitment losses to total
loans |
|
1.21 |
% |
|
1.19 |
% |
|
0.91 |
% |
|
0.59 |
% |
|
0.64 |
% |
|
|
|
| Number
of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank subsidiaries |
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
|
15 |
|
|
|
|
|
Banking offices |
|
182 |
|
|
186 |
|
|
187 |
|
|
187 |
|
|
174 |
|
|
|
|
(1) Excludes mortgage loans
held-for-sale.
(2) Net revenue includes net interest income
and non-interest income.
(3) See “Supplemental Non-GAAP Financial
Measures/Ratios” at Table 18 for additional information on this
performance measure/ratio.
(4) The net overhead ratio is calculated by
netting total non-interest expense and total non-interest income,
annualizing this amount, and dividing by that period’s total
average assets. A lower ratio indicates a higher degree of
efficiency.
(5) Capital ratios for current quarter-end are
estimated.
(6) The allowance for credit losses includes both
the allowance for loan losses and the allowance for unfunded
lending-related commitments. Effective January 1, 2020, the
allowance for credit losses also includes the allowance for
investment securities as a result of the adoption of Accounting
Standard Update ("ASU") 2016-13, Financial Instruments - Credit
Losses.
WINTRUST FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
| (In
thousands) |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
308,639 |
|
|
$ |
344,999 |
|
|
$ |
349,118 |
|
|
$ |
286,167 |
|
|
$ |
448,755 |
|
| Federal
funds sold and securities purchased under resale agreements |
|
56 |
|
|
58 |
|
|
309 |
|
|
309 |
|
|
59 |
|
|
Interest-bearing deposits with banks |
|
3,825,823 |
|
|
4,015,072 |
|
|
1,943,743 |
|
|
2,164,560 |
|
|
2,260,806 |
|
|
Available-for-sale securities, at fair value |
|
2,946,459 |
|
|
3,194,961 |
|
|
3,570,959 |
|
|
3,106,214 |
|
|
2,270,059 |
|
|
Held-to-maturity securities, at amortized cost |
|
560,267 |
|
|
728,465 |
|
|
865,376 |
|
|
1,134,400 |
|
|
1,095,802 |
|
| Trading
account securities |
|
1,720 |
|
|
890 |
|
|
2,257 |
|
|
1,068 |
|
|
3,204 |
|
| Equity
securities with readily determinable fair value |
|
54,398 |
|
|
52,460 |
|
|
47,310 |
|
|
50,840 |
|
|
46,086 |
|
| Federal
Home Loan Bank and Federal Reserve Bank stock |
|
135,568 |
|
|
135,571 |
|
|
134,546 |
|
|
100,739 |
|
|
92,714 |
|
| Brokerage
customer receivables |
|
16,818 |
|
|
14,623 |
|
|
16,293 |
|
|
16,573 |
|
|
14,943 |
|
| Mortgage
loans held-for-sale |
|
959,671 |
|
|
833,163 |
|
|
656,934 |
|
|
377,313 |
|
|
464,727 |
|
| Loans,
net of unearned income |
|
32,135,555 |
|
|
31,402,903 |
|
|
27,807,321 |
|
|
26,800,290 |
|
|
25,710,171 |
|
| Allowance
for loan losses |
|
(325,959 |
) |
|
(313,510 |
) |
|
(216,050 |
) |
|
(156,828 |
) |
|
(161,763 |
) |
|
Net loans |
|
31,809,596 |
|
|
31,089,393 |
|
|
27,591,271 |
|
|
26,643,462 |
|
|
25,548,408 |
|
| Premises
and equipment, net |
|
774,288 |
|
|
769,909 |
|
|
764,583 |
|
|
754,328 |
|
|
721,856 |
|
| Lease
investments, net |
|
230,373 |
|
|
237,040 |
|
|
207,147 |
|
|
231,192 |
|
|
228,647 |
|
| Accrued
interest receivable and other assets |
|
1,424,728 |
|
|
1,437,832 |
|
|
1,460,168 |
|
|
1,061,141 |
|
|
1,087,864 |
|
| Trade
date securities receivable |
|
— |
|
|
— |
|
|
502,207 |
|
|
— |
|
|
— |
|
|
Goodwill |
|
644,644 |
|
|
644,213 |
|
|
643,441 |
|
|
645,220 |
|
|
584,315 |
|
| Other
intangible assets |
|
38,670 |
|
|
41,368 |
|
|
44,185 |
|
|
47,057 |
|
|
43,657 |
|
|
Total assets |
|
$ |
43,731,718 |
|
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
|
$ |
10,409,747 |
|
|
$ |
10,204,791 |
|
|
$ |
7,556,755 |
|
|
$ |
7,216,758 |
|
|
$ |
7,067,960 |
|
|
Interest bearing |
|
25,434,675 |
|
|
25,447,083 |
|
|
23,904,905 |
|
|
22,890,380 |
|
|
21,642,419 |
|
|
Total deposits |
|
35,844,422 |
|
|
35,651,874 |
|
|
31,461,660 |
|
|
30,107,138 |
|
|
28,710,379 |
|
| Federal
Home Loan Bank advances |
|
1,228,422 |
|
|
1,228,416 |
|
|
1,174,894 |
|
|
674,870 |
|
|
574,847 |
|
| Other
borrowings |
|
507,395 |
|
|
508,535 |
|
|
487,503 |
|
|
418,174 |
|
|
410,488 |
|
|
Subordinated notes |
|
436,385 |
|
|
436,298 |
|
|
436,179 |
|
|
436,095 |
|
|
435,979 |
|
| Junior
subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
| Trade
date securities payable |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
226 |
|
| Accrued
interest payable and other liabilities |
|
1,387,439 |
|
|
1,471,110 |
|
|
1,285,652 |
|
|
1,039,490 |
|
|
986,092 |
|
|
Total liabilities |
|
39,657,629 |
|
|
39,549,799 |
|
|
35,099,454 |
|
|
32,929,333 |
|
|
31,371,577 |
|
|
Shareholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
412,500 |
|
|
412,500 |
|
|
125,000 |
|
|
125,000 |
|
|
125,000 |
|
|
Common stock |
|
58,323 |
|
|
58,294 |
|
|
58,266 |
|
|
57,951 |
|
|
56,825 |
|
|
Surplus |
|
1,647,049 |
|
|
1,643,864 |
|
|
1,652,063 |
|
|
1,650,278 |
|
|
1,574,011 |
|
|
Treasury stock |
|
(44,891 |
) |
|
(44,891 |
) |
|
(44,891 |
) |
|
(6,931 |
) |
|
(6,799 |
) |
|
Retained earnings |
|
2,001,949 |
|
|
1,921,048 |
|
|
1,917,558 |
|
|
1,899,630 |
|
|
1,830,165 |
|
|
Accumulated other comprehensive loss |
|
(841 |
) |
|
(597 |
) |
|
(7,603 |
) |
|
(34,678 |
) |
|
(38,877 |
) |
|
Total shareholders’ equity |
|
4,074,089 |
|
|
3,990,218 |
|
|
3,700,393 |
|
|
3,691,250 |
|
|
3,540,325 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
43,731,718 |
|
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
WINTRUST FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
|
Three Months Ended |
Nine Months Ended |
| (In
thousands, except per share data) |
Sep 30,
2020 |
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
Sep 30,
2020 |
|
Sep 30,
2019 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
280,479 |
|
|
$ |
294,746 |
|
|
$ |
301,839 |
|
|
$ |
308,055 |
|
|
$ |
314,277 |
|
$ |
877,064 |
|
|
$ |
920,425 |
|
|
Mortgage loans held-for-sale |
5,791 |
|
|
4,764 |
|
|
3,165 |
|
|
3,201 |
|
|
3,478 |
|
13,720 |
|
|
8,791 |
|
|
Interest-bearing deposits with banks |
1,181 |
|
|
1,310 |
|
|
4,768 |
|
|
8,971 |
|
|
10,326 |
|
7,259 |
|
|
20,832 |
|
|
Federal funds sold and securities purchased under resale
agreements |
— |
|
|
16 |
|
|
86 |
|
|
390 |
|
|
310 |
|
102 |
|
|
310 |
|
|
Investment securities |
21,819 |
|
|
27,105 |
|
|
32,467 |
|
|
27,611 |
|
|
24,758 |
|
81,391 |
|
|
80,435 |
|
|
Trading account securities |
6 |
|
|
13 |
|
|
7 |
|
|
6 |
|
|
20 |
|
26 |
|
|
33 |
|
|
Federal Home Loan Bank and Federal Reserve Bank stock |
1,774 |
|
|
1,765 |
|
|
1,577 |
|
|
1,328 |
|
|
1,294 |
|
5,116 |
|
|
4,088 |
|
|
Brokerage customer receivables |
106 |
|
|
97 |
|
|
158 |
|
|
169 |
|
|
164 |
|
361 |
|
|
497 |
|
|
Total interest income |
311,156 |
|
|
329,816 |
|
|
344,067 |
|
|
349,731 |
|
|
354,627 |
|
985,039 |
|
|
1,035,411 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
39,084 |
|
|
50,057 |
|
|
67,435 |
|
|
74,724 |
|
|
76,168 |
|
156,576 |
|
|
204,168 |
|
|
Interest on Federal Home Loan Bank advances |
4,947 |
|
|
4,934 |
|
|
3,360 |
|
|
1,461 |
|
|
1,774 |
|
13,241 |
|
|
8,417 |
|
|
Interest on other borrowings |
3,012 |
|
|
3,436 |
|
|
3,546 |
|
|
3,273 |
|
|
3,466 |
|
9,994 |
|
|
10,624 |
|
|
Interest on subordinated notes |
5,474 |
|
|
5,506 |
|
|
5,472 |
|
|
5,504 |
|
|
5,470 |
|
16,452 |
|
|
10,051 |
|
|
Interest on junior subordinated debentures |
2,703 |
|
|
2,752 |
|
|
2,811 |
|
|
2,890 |
|
|
2,897 |
|
8,266 |
|
|
9,111 |
|
|
Total interest expense |
55,220 |
|
|
66,685 |
|
|
82,624 |
|
|
87,852 |
|
|
89,775 |
|
204,529 |
|
|
242,371 |
|
|
Net interest income |
255,936 |
|
|
263,131 |
|
|
261,443 |
|
|
261,879 |
|
|
264,852 |
|
780,510 |
|
|
793,040 |
|
|
Provision for credit losses |
25,026 |
|
|
135,053 |
|
|
52,961 |
|
|
7,826 |
|
|
10,834 |
|
213,040 |
|
|
46,038 |
|
|
Net interest income after provision for credit losses |
230,910 |
|
|
128,078 |
|
|
208,482 |
|
|
254,053 |
|
|
254,018 |
|
567,470 |
|
|
747,002 |
|
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Wealth management |
24,957 |
|
|
22,636 |
|
|
25,941 |
|
|
24,999 |
|
|
23,999 |
|
73,534 |
|
|
72,115 |
|
|
Mortgage banking |
108,544 |
|
|
102,324 |
|
|
48,326 |
|
|
47,860 |
|
|
50,864 |
|
259,194 |
|
|
106,433 |
|
|
Service charges on deposit accounts |
11,497 |
|
|
10,420 |
|
|
11,265 |
|
|
10,973 |
|
|
9,972 |
|
33,182 |
|
|
28,097 |
|
|
Gains (losses) on investment securities, net |
411 |
|
|
808 |
|
|
(4,359 |
) |
|
587 |
|
|
710 |
|
(3,140 |
) |
|
2,938 |
|
|
Fees from covered call options |
— |
|
|
— |
|
|
2,292 |
|
|
1,243 |
|
|
— |
|
2,292 |
|
|
2,427 |
|
|
Trading gains (losses), net |
183 |
|
|
(634 |
) |
|
(451 |
) |
|
46 |
|
|
11 |
|
(902 |
) |
|
(204 |
) |
|
Operating lease income, net |
11,717 |
|
|
11,785 |
|
|
11,984 |
|
|
12,487 |
|
|
12,025 |
|
35,486 |
|
|
34,554 |
|
|
Other |
13,284 |
|
|
14,654 |
|
|
18,244 |
|
|
14,025 |
|
|
17,556 |
|
46,182 |
|
|
48,592 |
|
|
Total non-interest income |
170,593 |
|
|
161,993 |
|
|
113,242 |
|
|
112,220 |
|
|
115,137 |
|
445,828 |
|
|
294,952 |
|
|
Non-interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
164,042 |
|
|
154,156 |
|
|
136,762 |
|
|
145,941 |
|
|
141,024 |
|
454,960 |
|
|
400,479 |
|
|
Equipment |
17,251 |
|
|
15,846 |
|
|
14,834 |
|
|
14,485 |
|
|
13,314 |
|
47,931 |
|
|
37,843 |
|
|
Operating lease equipment |
9,425 |
|
|
9,292 |
|
|
9,260 |
|
|
9,766 |
|
|
8,907 |
|
27,977 |
|
|
25,994 |
|
|
Occupancy, net |
15,830 |
|
|
16,893 |
|
|
17,547 |
|
|
17,132 |
|
|
14,991 |
|
50,270 |
|
|
47,157 |
|
|
Data processing |
5,689 |
|
|
10,406 |
|
|
8,373 |
|
|
7,569 |
|
|
6,522 |
|
24,468 |
|
|
20,251 |
|
|
Advertising and marketing |
7,880 |
|
|
7,704 |
|
|
10,862 |
|
|
12,517 |
|
|
13,375 |
|
26,446 |
|
|
36,078 |
|
|
Professional fees |
6,488 |
|
|
7,687 |
|
|
6,721 |
|
|
7,650 |
|
|
8,037 |
|
20,896 |
|
|
19,821 |
|
|
Amortization of other intangible assets |
2,701 |
|
|
2,820 |
|
|
2,863 |
|
|
3,017 |
|
|
2,928 |
|
8,384 |
|
|
8,827 |
|
|
FDIC insurance |
6,772 |
|
|
7,081 |
|
|
4,135 |
|
|
1,348 |
|
|
148 |
|
17,988 |
|
|
7,851 |
|
|
OREO expense, net |
(168 |
) |
|
237 |
|
|
(876 |
) |
|
536 |
|
|
1,170 |
|
(807 |
) |
|
3,092 |
|
|
Other |
28,309 |
|
|
27,246 |
|
|
24,160 |
|
|
29,630 |
|
|
24,138 |
|
79,715 |
|
|
71,142 |
|
|
Total non-interest expense |
264,219 |
|
|
259,368 |
|
|
234,641 |
|
|
249,591 |
|
|
234,554 |
|
758,228 |
|
|
678,535 |
|
|
Income before taxes |
137,284 |
|
|
30,703 |
|
|
87,083 |
|
|
116,682 |
|
|
134,601 |
|
255,070 |
|
|
363,419 |
|
|
Income tax expense |
29,969 |
|
|
9,044 |
|
|
24,271 |
|
|
30,718 |
|
|
35,480 |
|
63,284 |
|
|
93,686 |
|
|
Net income |
$ |
107,315 |
|
|
$ |
21,659 |
|
|
$ |
62,812 |
|
|
$ |
85,964 |
|
|
$ |
99,121 |
|
$ |
191,786 |
|
|
$ |
269,733 |
|
|
Preferred stock dividends |
10,286 |
|
|
2,050 |
|
|
2,050 |
|
|
2,050 |
|
|
2,050 |
|
14,386 |
|
|
6,150 |
|
|
Net income applicable to common shares |
$ |
97,029 |
|
|
$ |
19,609 |
|
|
$ |
60,762 |
|
|
$ |
83,914 |
|
|
$ |
97,071 |
|
$ |
177,400 |
|
|
$ |
263,583 |
|
|
Net income per common share - Basic |
$ |
1.68 |
|
|
$ |
0.34 |
|
|
$ |
1.05 |
|
|
$ |
1.46 |
|
|
$ |
1.71 |
|
$ |
3.08 |
|
|
$ |
4.65 |
|
|
Net income per common share - Diluted |
$ |
1.67 |
|
|
$ |
0.34 |
|
|
$ |
1.04 |
|
|
$ |
1.44 |
|
|
$ |
1.69 |
|
$ |
3.06 |
|
|
$ |
4.60 |
|
|
Cash dividends declared per common share |
$ |
0.28 |
|
|
$ |
0.28 |
|
|
$ |
0.28 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
$ |
0.84 |
|
|
$ |
0.75 |
|
|
Weighted average common shares outstanding |
|
57,597 |
|
|
|
57,567 |
|
|
|
57,620 |
|
|
|
57,538 |
|
|
|
56,690 |
|
|
57,595 |
|
|
|
56,627 |
|
|
Dilutive potential common shares |
449 |
|
|
414 |
|
|
575 |
|
|
874 |
|
|
773 |
|
469 |
|
|
724 |
|
|
Average common shares and dilutive common shares |
58,046 |
|
|
57,981 |
|
|
58,195 |
|
|
58,412 |
|
|
57,463 |
|
58,064 |
|
|
57,351 |
|
TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES AND
COMMERCIAL REAL ESTATE BY STATE
|
|
|
|
|
|
|
|
|
|
|
% Growth From |
|
(Dollars in thousands) |
Sep 30,
2020 |
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
Dec 31,
2019 (1) |
|
Sep 30,
2019 |
|
Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial, and other |
$ |
8,897,986 |
|
|
$ |
8,523,864 |
|
|
$ |
9,025,886 |
|
|
$ |
8,285,920 |
|
|
$ |
8,195,602 |
|
10 |
% |
|
9 |
% |
|
Commercial PPP loans |
3,379,013 |
|
|
3,335,368 |
|
|
— |
|
|
— |
|
|
— |
|
100 |
|
|
100 |
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
1,333,149 |
|
|
1,285,282 |
|
|
1,237,274 |
|
|
1,200,783 |
|
|
1,025,961 |
|
15 |
|
|
30 |
|
|
Non-construction |
7,089,993 |
|
|
6,915,463 |
|
|
6,948,257 |
|
|
6,819,493 |
|
|
6,422,706 |
|
5 |
|
|
10 |
|
|
Home equity |
446,274 |
|
|
466,596 |
|
|
494,655 |
|
|
513,066 |
|
|
512,303 |
|
(17 |
) |
|
(13 |
) |
|
Residential real estate |
1,384,810 |
|
|
1,427,429 |
|
|
1,377,389 |
|
|
1,354,221 |
|
|
1,218,666 |
|
3 |
|
|
14 |
|
|
Premium Finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance |
4,060,144 |
|
|
3,999,774 |
|
|
3,465,055 |
|
|
3,442,027 |
|
|
3,449,950 |
|
24 |
|
|
18 |
|
|
Life insurance |
5,488,832 |
|
|
5,400,802 |
|
|
5,221,639 |
|
|
5,074,602 |
|
|
4,795,496 |
|
11 |
|
|
14 |
|
|
Consumer and other |
55,354 |
|
|
48,325 |
|
|
37,166 |
|
|
110,178 |
|
|
89,487 |
|
(66 |
) |
|
(38 |
) |
|
Total loans, net of unearned income |
$ |
32,135,555 |
|
|
$ |
31,402,903 |
|
|
$ |
27,807,321 |
|
|
$ |
26,800,290 |
|
|
$ |
25,710,171 |
|
27 |
% |
|
25 |
% |
|
Mix: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial, and other |
28 |
% |
|
28 |
% |
|
32 |
% |
|
31 |
% |
|
32 |
% |
|
|
|
|
Commercial PPP loans |
11 |
|
|
11 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
4 |
|
|
4 |
|
|
4 |
|
|
4 |
|
|
4 |
|
|
|
|
|
Non-construction |
22 |
|
|
22 |
|
|
25 |
|
|
26 |
|
|
25 |
|
|
|
|
|
Home equity |
1 |
|
|
1 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
|
|
|
Residential real estate |
4 |
|
|
4 |
|
|
5 |
|
|
5 |
|
|
5 |
|
|
|
|
|
Premium Finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance |
13 |
|
|
13 |
|
|
13 |
|
|
13 |
|
|
13 |
|
|
|
|
|
Life insurance |
17 |
|
|
17 |
|
|
19 |
|
|
19 |
|
|
19 |
|
|
|
|
|
Consumer and other |
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
|
Total loans, net of unearned income |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
(1) Annualized.
|
|
Sep 30, 2020 |
|
Jun 30, 2020 |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Sep 30, 2019 |
|
(Dollars in thousands) |
|
Balance |
|
% of
Total
Balance |
|
|
|
Balance |
|
% of
Total
Balance |
|
Balance |
% of
Total
Balance |
|
Balance |
% of
Total
Balance |
|
Balance |
% of
Total
Balance |
|
Commercial real estate - collateral
location by state: |
|
|
|
|
|
|
|
|
|
|
|
Illinois |
$ |
6,270,584 |
|
74.4 |
% |
|
$ |
6,198,486 |
|
75.6 |
% |
|
$ |
6,171,606 |
|
75.4 |
% |
|
$ |
6,176,353 |
|
77.0 |
% |
|
$ |
5,654,827 |
|
75.9 |
% |
|
Wisconsin |
783,241 |
|
9.3 |
|
|
760,839 |
|
9.3 |
|
|
793,145 |
|
9.7 |
|
|
744,975 |
|
9.3 |
|
|
744,577 |
|
10.0 |
|
|
Total primary markets |
$ |
7,053,825 |
|
83.7 |
% |
|
$ |
6,959,325 |
|
84.9 |
% |
|
$ |
6,964,751 |
|
85.1 |
% |
|
$ |
6,921,328 |
|
86.3 |
% |
|
$ |
6,399,404 |
|
85.9 |
% |
|
Indiana |
265,905 |
|
3.2 |
|
|
249,423 |
|
3.0 |
|
|
249,680 |
|
3.1 |
|
|
218,963 |
|
2.7 |
|
|
193,350 |
|
2.6 |
|
|
Florida |
133,602 |
|
1.6 |
|
|
133,810 |
|
1.6 |
|
|
126,786 |
|
1.5 |
|
|
114,629 |
|
1.4 |
|
|
80,120 |
|
1.1 |
|
|
Arizona |
79,086 |
|
0.9 |
|
|
78,135 |
|
1.0 |
|
|
72,214 |
|
0.9 |
|
|
64,022 |
|
0.8 |
|
|
62,657 |
|
0.8 |
|
|
California |
82,852 |
|
1.0 |
|
|
81,634 |
|
1.0 |
|
|
63,883 |
|
0.8 |
|
|
64,345 |
|
0.8 |
|
|
67,999 |
|
0.9 |
|
|
Other |
807,872 |
|
9.6 |
|
|
698,418 |
|
8.5 |
|
|
708,217 |
|
8.6 |
|
|
636,989 |
|
8.0 |
|
|
645,137 |
|
8.7 |
|
|
Total commercial real estate |
$ |
8,423,142 |
|
100 |
% |
|
$ |
8,200,745 |
|
100 |
% |
|
$ |
8,185,531 |
|
100 |
% |
|
$ |
8,020,276 |
|
100 |
% |
|
$ |
7,448,667 |
|
100 |
% |
TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH
RATES
|
|
|
|
|
|
|
|
|
|
|
% Growth From |
|
(Dollars in thousands) |
Sep 30,
2020 |
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
Dec 31,
2019 (1) |
|
Sep 30,
2019 |
|
Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
$ |
10,409,747 |
|
|
$ |
10,204,791 |
|
|
$ |
7,556,755 |
|
|
$ |
7,216,758 |
|
|
$ |
7,067,960 |
|
59 |
% |
|
47 |
% |
|
NOW and interest-bearing demand deposits |
3,294,071 |
|
|
3,440,348 |
|
|
3,181,159 |
|
|
3,093,159 |
|
|
2,966,098 |
|
9 |
|
|
11 |
|
|
Wealth management deposits (2) |
4,235,583 |
|
|
4,433,020 |
|
|
3,936,968 |
|
|
3,123,063 |
|
|
2,795,838 |
|
48 |
|
|
51 |
|
|
Money market |
9,423,653 |
|
|
9,288,976 |
|
|
8,114,659 |
|
|
7,854,189 |
|
|
7,326,899 |
|
27 |
|
|
29 |
|
|
Savings |
3,415,073 |
|
|
3,447,352 |
|
|
3,282,340 |
|
|
3,196,698 |
|
|
2,934,348 |
|
9 |
|
|
16 |
|
|
Time certificates of deposit |
5,066,295 |
|
|
4,837,387 |
|
|
5,389,779 |
|
|
5,623,271 |
|
|
5,619,236 |
|
(13 |
) |
|
(10 |
) |
|
Total deposits |
$ |
35,844,422 |
|
|
$ |
35,651,874 |
|
|
$ |
31,461,660 |
|
|
$ |
30,107,138 |
|
|
$ |
28,710,379 |
|
25 |
% |
|
25 |
% |
|
Mix: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing |
29 |
% |
|
29 |
% |
|
24 |
% |
|
24 |
% |
|
25 |
% |
|
|
|
|
NOW and interest-bearing demand deposits |
9 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
|
|
|
Wealth management deposits (2) |
12 |
|
|
12 |
|
|
13 |
|
|
10 |
|
|
10 |
|
|
|
|
|
Money market |
26 |
|
|
25 |
|
|
26 |
|
|
26 |
|
|
25 |
|
|
|
|
|
Savings |
10 |
|
|
10 |
|
|
10 |
|
|
11 |
|
|
10 |
|
|
|
|
|
Time certificates of deposit |
14 |
|
|
14 |
|
|
17 |
|
|
19 |
|
|
20 |
|
|
|
|
|
Total deposits |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
(1) Annualized.
(2) Represents deposit balances of the Company’s
subsidiary banks from brokerage customers of Wintrust Investments,
Chicago Deferred Exchange Company, LLC ("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 September 30, 2020
|
(Dollars in thousands) |
|
Total Time
Certificates of
Deposit |
|
Weighted-Average
Rate of Maturing
Time Certificates
of Deposit (1) |
|
1-3 months |
|
$ |
671,229 |
|
|
1.37 |
% |
|
4-6 months |
|
859,769 |
|
|
1.82 |
|
|
7-9 months |
|
1,282,241 |
|
|
1.88 |
|
|
10-12 months |
|
908,894 |
|
|
1.62 |
|
|
13-18 months |
|
888,169 |
|
|
1.30 |
|
|
19-24 months |
|
224,400 |
|
|
1.06 |
|
|
24+ months |
|
231,593 |
|
|
1.24 |
|
|
Total |
|
$ |
5,066,295 |
|
|
1.59 |
% |
(1) Weighted-average rate excludes the
impact of purchase accounting fair value adjustments.
TABLE 4: QUARTERLY AVERAGE BALANCES
|
|
|
Average Balance for three months ended, |
|
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
| (In
thousands) |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Interest-bearing deposits with banks and cash equivalents
(1) |
|
$ |
3,411,164 |
|
|
$ |
3,240,167 |
|
|
$ |
1,418,809 |
|
|
$ |
2,206,251 |
|
|
$ |
1,960,898 |
|
|
Investment securities (2) |
|
3,789,422 |
|
|
4,309,471 |
|
|
4,780,709 |
|
|
3,909,699 |
|
|
3,410,090 |
|
|
FHLB and FRB stock |
|
135,567 |
|
|
135,360 |
|
|
114,829 |
|
|
94,843 |
|
|
92,583 |
|
|
Liquidity management assets (6) |
|
7,336,153 |
|
|
7,684,998 |
|
|
6,314,347 |
|
|
6,210,793 |
|
|
5,463,571 |
|
|
Other earning assets (3)(6) |
|
16,656 |
|
|
16,917 |
|
|
19,166 |
|
|
18,353 |
|
|
17,809 |
|
|
Mortgage loans held-for-sale |
|
822,908 |
|
|
705,702 |
|
|
403,262 |
|
|
381,878 |
|
|
379,870 |
|
|
Loans, net of unearned income (4)(6) |
|
31,634,608 |
|
|
30,336,626 |
|
|
26,936,728 |
|
|
26,137,722 |
|
|
25,346,290 |
|
|
Total earning assets (6) |
|
39,810,325 |
|
|
38,744,243 |
|
|
33,673,503 |
|
|
32,748,746 |
|
|
31,207,540 |
|
|
Allowance for loan and investment security losses
(7) |
|
(321,732 |
) |
|
(222,485 |
) |
|
(176,291 |
) |
|
(167,759 |
) |
|
(168,423 |
) |
|
Cash and due from banks |
|
345,438 |
|
|
352,423 |
|
|
321,982 |
|
|
316,631 |
|
|
297,475 |
|
|
Other assets |
|
3,128,813 |
|
|
3,168,548 |
|
|
2,806,296 |
|
|
2,747,572 |
|
|
2,618,000 |
|
|
Total assets |
|
$ |
42,962,844 |
|
|
$ |
42,042,729 |
|
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and interest-bearing demand deposits |
|
$ |
3,435,089 |
|
|
$ |
3,323,124 |
|
|
$ |
3,113,733 |
|
|
$ |
3,016,991 |
|
|
$ |
2,912,961 |
|
|
Wealth management deposits |
|
4,239,300 |
|
|
4,380,996 |
|
|
2,838,719 |
|
|
2,934,292 |
|
|
2,888,817 |
|
|
Money market accounts |
|
9,332,668 |
|
|
8,727,966 |
|
|
7,990,775 |
|
|
7,647,635 |
|
|
6,956,755 |
|
|
Savings accounts |
|
3,419,586 |
|
|
3,394,480 |
|
|
3,189,835 |
|
|
3,028,763 |
|
|
2,837,039 |
|
|
Time deposits |
|
4,900,839 |
|
|
5,104,701 |
|
|
5,526,407 |
|
|
5,682,449 |
|
|
5,590,228 |
|
|
Interest-bearing deposits |
|
25,327,482 |
|
|
24,931,267 |
|
|
22,659,469 |
|
|
22,310,130 |
|
|
21,185,800 |
|
|
Federal Home Loan Bank advances |
|
1,228,421 |
|
|
1,214,375 |
|
|
951,613 |
|
|
596,594 |
|
|
574,833 |
|
|
Other borrowings |
|
512,787 |
|
|
493,350 |
|
|
469,577 |
|
|
415,092 |
|
|
416,300 |
|
|
Subordinated notes |
|
436,323 |
|
|
436,226 |
|
|
436,119 |
|
|
436,025 |
|
|
436,041 |
|
|
Junior subordinated debentures |
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
253,566 |
|
|
Total interest-bearing liabilities |
|
27,758,579 |
|
|
27,328,784 |
|
|
24,770,344 |
|
|
24,011,407 |
|
|
22,866,540 |
|
|
Non-interest-bearing deposits |
|
9,988,769 |
|
|
9,607,528 |
|
|
7,235,177 |
|
|
7,128,166 |
|
|
6,776,786 |
|
|
Other liabilities |
|
1,180,594 |
|
|
1,197,571 |
|
|
909,800 |
|
|
883,433 |
|
|
814,552 |
|
|
Equity |
|
4,034,902 |
|
|
3,908,846 |
|
|
3,710,169 |
|
|
3,622,184 |
|
|
3,496,714 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
42,962,844 |
|
|
$ |
42,042,729 |
|
|
$ |
36,625,490 |
|
|
$ |
35,645,190 |
|
|
$ |
33,954,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net free funds/contribution (5) |
|
$ |
12,051,746 |
|
|
$ |
11,415,459 |
|
|
$ |
8,903,159 |
|
|
$ |
8,737,339 |
|
|
$ |
8,341,000 |
|
(1) Includes interest-bearing deposits from
banks, federal funds sold and securities purchased under resale
agreements.
(2) Investment securities includes investment
securities classified as available-for-sale and held-to-maturity,
and equity securities with readily determinable fair values. Equity
securities without readily determinable fair values are included
within other assets.
(3) Other earning assets include brokerage
customer receivables and trading account securities.
(4) Loans, net of unearned income, include
non-accrual loans.
(5) Net free funds are the difference between
total average earning assets and total average interest-bearing
liabilities. The estimated contribution to net interest margin from
net free funds is calculated using the rate paid for total
interest-bearing liabilities.
(6) See "Supplemental Non-GAAP Financial
Measures/Ratios" at Table 18 for additional information on this
performance measure/ratio.
(7) Effective January 1, 2020 this includes the
allowance for investment security losses as a result of the
adoption of ASU 2016-13, Financial Instruments - Credit
Losses.
TABLE 5: QUARTERLY NET INTEREST INCOME
|
|
|
Net Interest Income for three months ended, |
|
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
| (In
thousands) |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks and cash equivalents |
|
$ |
1,181 |
|
|
$ |
1,326 |
|
|
$ |
4,854 |
|
|
$ |
9,361 |
|
|
$ |
10,636 |
|
|
Investment securities |
|
22,365 |
|
|
27,643 |
|
|
33,018 |
|
|
28,184 |
|
|
25,332 |
|
|
FHLB and FRB stock |
|
1,774 |
|
|
1,765 |
|
|
1,577 |
|
|
1,328 |
|
|
1,294 |
|
|
Liquidity management assets (2) |
|
25,320 |
|
|
30,734 |
|
|
39,449 |
|
|
38,873 |
|
|
37,262 |
|
|
Other earning assets (2) |
|
113 |
|
|
113 |
|
|
167 |
|
|
176 |
|
|
189 |
|
|
Mortgage loans held-for-sale |
|
5,791 |
|
|
4,764 |
|
|
3,165 |
|
|
3,201 |
|
|
3,478 |
|
|
Loans, net of unearned income (2) |
|
280,960 |
|
|
295,322 |
|
|
302,699 |
|
|
308,947 |
|
|
315,255 |
|
|
Total interest income |
|
$ |
312,184 |
|
|
$ |
330,933 |
|
|
$ |
345,480 |
|
|
$ |
351,197 |
|
|
$ |
356,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
NOW and interest-bearing demand deposits |
|
$ |
1,342 |
|
|
$ |
1,561 |
|
|
$ |
3,665 |
|
|
$ |
4,622 |
|
|
$ |
5,291 |
|
|
Wealth management deposits |
|
7,662 |
|
|
7,244 |
|
|
6,935 |
|
|
7,867 |
|
|
9,163 |
|
|
Money market accounts |
|
7,245 |
|
|
13,140 |
|
|
22,363 |
|
|
25,603 |
|
|
25,426 |
|
|
Savings accounts |
|
2,104 |
|
|
3,840 |
|
|
5,790 |
|
|
6,145 |
|
|
5,622 |
|
|
Time deposits |
|
20,731 |
|
|
24,272 |
|
|
28,682 |
|
|
30,487 |
|
|
30,666 |
|
|
Interest-bearing deposits |
|
39,084 |
|
|
50,057 |
|
|
67,435 |
|
|
74,724 |
|
|
76,168 |
|
|
Federal Home Loan Bank advances |
|
4,947 |
|
|
4,934 |
|
|
3,360 |
|
|
1,461 |
|
|
1,774 |
|
|
Other borrowings |
|
3,012 |
|
|
3,436 |
|
|
3,546 |
|
|
3,273 |
|
|
3,466 |
|
|
Subordinated notes |
|
5,474 |
|
|
5,506 |
|
|
5,472 |
|
|
5,504 |
|
|
5,470 |
|
|
Junior subordinated debentures |
|
2,703 |
|
|
2,752 |
|
|
2,811 |
|
|
2,890 |
|
|
2,897 |
|
|
Total interest expense |
|
$ |
55,220 |
|
|
$ |
66,685 |
|
|
$ |
82,624 |
|
|
$ |
87,852 |
|
|
$ |
89,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fully taxable-equivalent adjustment |
|
(1,028 |
) |
|
(1,117 |
) |
|
(1,413 |
) |
|
(1,466 |
) |
|
(1,557 |
) |
|
Net interest income (GAAP) (1) |
|
255,936 |
|
|
263,131 |
|
|
261,443 |
|
|
261,879 |
|
|
264,852 |
|
|
Fully taxable-equivalent adjustment |
|
1,028 |
|
|
1,117 |
|
|
1,413 |
|
|
1,466 |
|
|
1,557 |
|
|
Net interest income, fully taxable-equivalent (non-GAAP)
(1) |
|
$ |
256,964 |
|
|
$ |
264,248 |
|
|
$ |
262,856 |
|
|
$ |
263,345 |
|
|
$ |
266,409 |
|
(1) See "Supplemental Non-GAAP Financial
Measures/Ratios" at Table 18 for additional information on this
performance measure/ratio.
(2) Interest income on tax-advantaged loans,
trading securities and investment securities reflects a
taxable-equivalent adjustment based on the marginal federal
corporate tax rate in effect as of the applicable period.
TABLE 6: QUARTERLY NET INTEREST
MARGIN
|
|
|
Net Interest Margin for three months ended, |
|
|
|
Sep 30,
2020 |
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
|
Yield earned on: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks and cash equivalents |
|
0.14 |
% |
|
0.16 |
% |
|
1.38 |
% |
|
1.68 |
% |
|
2.15 |
% |
|
Investment securities |
|
2.35 |
|
|
2.58 |
|
|
2.78 |
|
|
2.86 |
|
|
2.95 |
|
|
FHLB and FRB stock |
|
5.21 |
|
|
5.24 |
|
|
5.52 |
|
|
5.55 |
|
|
5.55 |
|
|
Liquidity management assets |
|
1.37 |
|
|
1.61 |
|
|
2.51 |
|
|
2.48 |
|
|
2.71 |
|
|
Other earning assets |
|
2.71 |
|
|
2.71 |
|
|
3.50 |
|
|
3.83 |
|
|
4.20 |
|
|
Mortgage loans held-for-sale |
|
2.80 |
|
|
2.72 |
|
|
3.16 |
|
|
3.33 |
|
|
3.63 |
|
|
Loans, net of unearned income |
|
3.53 |
|
|
3.92 |
|
|
4.52 |
|
|
4.69 |
|
|
4.93 |
|
|
Total earning assets |
|
3.12 |
% |
|
3.44 |
% |
|
4.13 |
% |
|
4.25 |
% |
|
4.53 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rate paid on: |
|
|
|
|
|
|
|
|
|
|
|
NOW and interest-bearing demand deposits |
|
0.16 |
% |
|
0.19 |
% |
|
0.47 |
% |
|
0.61 |
% |
|
0.72 |
% |
|
Wealth management deposits |
|
0.72 |
|
|
0.67 |
|
|
0.98 |
|
|
1.06 |
|
|
1.26 |
|
|
Money market accounts |
|
0.31 |
|
|
0.61 |
|
|
1.13 |
|
|
1.33 |
|
|
1.45 |
|
|
Savings accounts |
|
0.24 |
|
|
0.45 |
|
|
0.73 |
|
|
0.80 |
|
|
0.79 |
|
|
Time deposits |
|
1.68 |
|
|
1.91 |
|
|
2.09 |
|
|
2.13 |
|
|
2.18 |
|
|
Interest-bearing deposits |
|
0.61 |
|
|
0.81 |
|
|
1.20 |
|
|
1.33 |
|
|
1.43 |
|
|
Federal Home Loan Bank advances |
|
1.60 |
|
|
1.63 |
|
|
1.42 |
|
|
0.97 |
|
|
1.22 |
|
|
Other borrowings |
|
2.34 |
|
|
2.80 |
|
|
3.04 |
|
|
3.13 |
|
|
3.30 |
|
|
Subordinated notes |
|
5.02 |
|
|
5.05 |
|
|
5.02 |
|
|
5.05 |
|
|
5.02 |
|
|
Junior subordinated debentures |
|
4.17 |
|
|
4.29 |
|
|
4.39 |
|
|
4.46 |
|
|
4.47 |
|
|
Total interest-bearing liabilities |
|
0.79 |
% |
|
0.98 |
% |
|
1.34 |
% |
|
1.45 |
% |
|
1.56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread (1)(3) |
|
2.33 |
% |
|
2.46 |
% |
|
2.79 |
% |
|
2.80 |
% |
|
2.97 |
% |
|
Less: Fully taxable-equivalent adjustment |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
Net free funds/contribution (2) |
|
0.24 |
|
|
0.28 |
|
|
0.35 |
|
|
0.39 |
|
|
0.42 |
|
|
Net interest margin (GAAP) (3) |
|
2.56 |
% |
|
2.73 |
% |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
|
Fully taxable-equivalent adjustment |
|
0.01 |
|
|
0.01 |
|
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
|
Net interest margin, fully taxable-equivalent (non-GAAP)
(3) |
|
2.57 |
% |
|
2.74 |
% |
|
3.14 |
% |
|
3.19 |
% |
|
3.39 |
% |
(1) Interest rate spread is the difference
between the yield earned on earning assets and the rate paid on
interest-bearing liabilities.
(2) Net free funds are the difference between
total average earning assets and total average interest-bearing
liabilities. The estimated contribution to net interest margin from
net free funds is calculated using the rate paid for total
interest-bearing liabilities.
(3) See "Supplemental Non-GAAP Financial
Measures/Ratios" at Table 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 nine months ended, |
Interest
for nine months ended, |
Yield/Rate
for nine months ended, |
|
(Dollars in thousands) |
Sep 30,
2020 |
|
Sep 30,
2019 |
Sep 30,
2020 |
|
Sep 30,
2019 |
Sep 30,
2020 |
|
Sep 30,
2019 |
|
Interest-bearing deposits with banks and cash equivalents
(1) |
$ |
2,692,678 |
|
|
$ |
1,254,534 |
|
$ |
7,361 |
|
|
$ |
21,142 |
|
0.37 |
% |
|
2.26 |
% |
|
Investment securities (2) |
4,291,362 |
|
|
3,563,941 |
|
83,026 |
|
|
82,142 |
|
2.58 |
|
|
3.08 |
|
|
FHLB and FRB stock |
128,611 |
|
|
97,624 |
|
5,116 |
|
|
4,088 |
|
5.31 |
|
|
5.60 |
|
|
Liquidity management assets (3)(8) |
$ |
7,112,651 |
|
|
$ |
4,916,099 |
|
$ |
95,503 |
|
|
$ |
107,372 |
|
1.79 |
% |
|
2.92 |
% |
|
Other earning assets (3)(4)(8) |
17,576 |
|
|
15,722 |
|
393 |
|
|
538 |
|
2.99 |
|
|
4.56 |
|
|
Mortgage loans held-for-sale |
644,611 |
|
|
283,966 |
|
13,720 |
|
|
8,791 |
|
2.84 |
|
|
4.14 |
|
|
Loans, net of unearned income (3)(5)(8) |
29,643,281 |
|
|
24,598,857 |
|
878,981 |
|
|
923,468 |
|
3.96 |
|
|
5.02 |
|
|
Total earning assets (8) |
$ |
37,418,119 |
|
|
$ |
29,814,644 |
|
$ |
988,597 |
|
|
$ |
1,040,169 |
|
3.53 |
% |
|
4.66 |
% |
|
Allowance for loan and investment security losses
(9) |
(240,467 |
) |
|
(163,518 |
) |
|
|
|
|
|
|
|
Cash and due from banks |
339,968 |
|
|
284,779 |
|
|
|
|
|
|
|
|
Other assets |
3,034,897 |
|
|
2,482,970 |
|
|
|
|
|
|
|
|
Total assets |
$ |
40,552,517 |
|
|
$ |
32,418,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and interest-bearing demand deposits |
$ |
3,291,176 |
|
|
$ |
2,865,175 |
|
$ |
6,569 |
|
|
$ |
15,457 |
|
0.27 |
% |
|
0.72 |
% |
|
Wealth management deposits |
3,821,203 |
|
|
2,703,853 |
|
21,840 |
|
|
23,254 |
|
0.76 |
|
|
1.15 |
|
|
Money market accounts |
8,686,171 |
|
|
6,326,336 |
|
42,748 |
|
|
66,337 |
|
0.66 |
|
|
1.40 |
|
|
Savings accounts |
3,334,944 |
|
|
2,768,875 |
|
11,736 |
|
|
14,830 |
|
0.47 |
|
|
0.72 |
|
|
Time deposits |
5,176,307 |
|
|
5,394,651 |
|
73,683 |
|
|
84,290 |
|
1.90 |
|
|
2.09 |
|
|
Interest-bearing deposits |
$ |
24,309,801 |
|
|
$ |
20,058,890 |
|
$ |
156,576 |
|
|
$ |
204,168 |
|
0.86 |
% |
|
1.36 |
% |
|
Federal Home Loan Bank advances |
1,131,823 |
|
|
679,589 |
|
13,241 |
|
|
8,417 |
|
1.56 |
|
|
1.66 |
|
|
Other borrowings |
491,981 |
|
|
433,465 |
|
9,994 |
|
|
10,624 |
|
2.71 |
|
|
3.28 |
|
|
Subordinated notes |
436,223 |
|
|
266,430 |
|
16,452 |
|
|
10,051 |
|
5.03 |
|
|
5.03 |
|
|
Junior subordinated debentures |
253,566 |
|
|
253,566 |
|
8,266 |
|
|
9,111 |
|
4.28 |
|
|
4.74 |
|
|
Total interest-bearing liabilities |
$ |
26,623,394 |
|
|
$ |
21,691,940 |
|
$ |
204,529 |
|
|
$ |
242,371 |
|
1.03 |
% |
|
1.49 |
% |
|
Non-interest-bearing deposits |
8,947,639 |
|
|
6,570,815 |
|
|
|
|
|
|
|
|
Other liabilities |
1,096,297 |
|
|
748,722 |
|
|
|
|
|
|
|
|
Equity |
3,885,187 |
|
|
3,407,398 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
40,552,517 |
|
|
$ |
32,418,875 |
|
|
|
|
|
|
|
|
Interest rate spread (6)(8) |
|
|
|
|
|
|
2.50 |
% |
|
3.17 |
% |
|
Less: Fully taxable-equivalent adjustment |
|
|
|
(3,558 |
) |
|
(4,758 |
) |
(0.01 |
) |
|
(0.02 |
) |
|
Net free funds/contribution (7) |
$ |
10,794,725 |
|
|
$ |
8,122,704 |
|
|
|
|
0.30 |
|
|
0.41 |
|
|
Net interest income/ margin (GAAP) (8) |
|
|
|
$ |
780,510 |
|
|
793,040 |
|
2.79 |
% |
|
3.56 |
% |
|
Fully taxable-equivalent adjustment |
|
|
|
3,558 |
|
|
4,758 |
|
0.01 |
|
|
0.02 |
|
|
Net interest income/ margin, fully taxable-equivalent (non-GAAP)
(8) |
|
|
|
$ |
784,068 |
|
|
$ |
797,798 |
|
2.80 |
% |
|
3.58 |
% |
(1) Includes interest-bearing deposits from
banks, federal funds sold and securities purchased under resale
agreements.
(2) Investment securities includes investment
securities classified as available-for-sale and held-to-maturity,
and equity securities with readily determinable fair values. Equity
securities without readily determinable fair values are included
within other assets.
(3) 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.
(4) Other earning assets include brokerage
customer receivables and trading account securities.
(5) Loans, net of unearned income, include
non-accrual loans.
(6) Interest rate spread is the difference between
the yield earned on earning assets and the rate paid on
interest-bearing liabilities.
(7) 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.
(8) See “Supplemental Non-GAAP Financial
Measures/Ratios” at Table 18 for additional information on this
performance ratio.
(9) 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 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 |
|
Sep 30, 2020 |
|
23.4 |
% |
|
10.9 |
% |
|
(8.1 |
)% |
|
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 |
) |
|
Ramp Scenario |
+200
Basis
Points |
|
+100
Basis
Points |
|
-100
Basis
Points |
|
Sep 30, 2020 |
10.7 |
% |
|
5.2 |
% |
|
(3.5 |
)% |
|
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 |
) |
TABLE 9: MATURITIES AND SENSITIVITIES TO
CHANGES IN INTEREST RATES
|
|
Loans repricing or maturity period |
|
|
|
As of September 30, 2020 |
One year or less |
|
From one to five
years |
|
Over five years |
|
Total |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
Fixed rate |
$ |
329,230 |
|
|
$ |
1,831,547 |
|
|
$ |
794,089 |
|
|
$ |
2,954,866 |
|
|
Fixed Rate - PPP |
— |
|
|
3,379,013 |
|
|
— |
|
|
3,379,013 |
|
|
Variable rate |
5,923,248 |
|
|
19,747 |
|
|
125 |
|
|
5,943,120 |
|
|
Total commercial |
$ |
6,252,478 |
|
|
$ |
5,230,307 |
|
|
$ |
794,214 |
|
|
$ |
12,276,999 |
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
Fixed rate |
601,275 |
|
|
2,093,741 |
|
|
399,264 |
|
|
3,094,280 |
|
|
Variable rate |
5,291,887 |
|
|
36,975 |
|
|
— |
|
|
5,328,862 |
|
|
Total commercial real estate |
$ |
5,893,162 |
|
|
$ |
2,130,716 |
|
|
$ |
399,264 |
|
|
$ |
8,423,142 |
|
|
Home equity |
|
|
|
|
|
|
|
|
Fixed rate |
18,022 |
|
|
7,551 |
|
|
25 |
|
|
25,598 |
|
|
Variable rate |
420,676 |
|
|
— |
|
|
— |
|
|
420,676 |
|
|
Total home equity |
$ |
438,698 |
|
|
$ |
7,551 |
|
|
$ |
25 |
|
|
$ |
446,274 |
|
|
Residential real estate |
|
|
|
|
|
|
|
|
Fixed rate |
29,068 |
|
|
12,611 |
|
|
463,604 |
|
|
505,283 |
|
|
Variable rate |
66,816 |
|
|
328,865 |
|
|
483,846 |
|
|
879,527 |
|
|
Total residential real estate |
$ |
95,884 |
|
|
$ |
341,476 |
|
|
$ |
947,450 |
|
|
$ |
1,384,810 |
|
|
Premium finance receivables - commercial |
|
|
|
|
|
|
|
|
Fixed rate |
3,965,026 |
|
|
95,118 |
|
|
— |
|
|
4,060,144 |
|
|
Variable rate |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Total premium finance receivables - commercial |
$ |
3,965,026 |
|
|
$ |
95,118 |
|
|
$ |
— |
|
|
$ |
4,060,144 |
|
|
Premium finance receivables - life insurance |
|
|
|
|
|
|
|
|
Fixed rate |
15,284 |
|
|
240,467 |
|
|
19,591 |
|
|
275,342 |
|
|
Variable rate |
5,213,490 |
|
|
— |
|
|
— |
|
|
5,213,490 |
|
|
Total premium finance receivables - life insurance |
$ |
5,228,774 |
|
|
$ |
240,467 |
|
|
$ |
19,591 |
|
|
$ |
5,488,832 |
|
|
Consumer and other |
|
|
|
|
|
|
|
|
Fixed rate |
28,297 |
|
|
5,831 |
|
|
1,501 |
|
|
35,629 |
|
|
Variable rate |
19,725 |
|
|
— |
|
|
— |
|
|
19,725 |
|
|
Total consumer and other |
$ |
48,022 |
|
|
$ |
5,831 |
|
|
$ |
1,501 |
|
|
$ |
55,354 |
|
|
|
|
|
|
|
|
|
|
|
Total per category |
|
|
|
|
|
|
|
|
Fixed rate |
4,986,202 |
|
|
7,665,879 |
|
|
1,678,074 |
|
|
14,330,155 |
|
|
Variable rate |
16,935,842 |
|
|
385,587 |
|
|
483,971 |
|
|
17,805,400 |
|
|
Total loans, net of unearned income |
$ |
21,922,044 |
|
|
$ |
8,051,466 |
|
|
$ |
2,162,045 |
|
|
$ |
32,135,555 |
|
|
|
|
|
|
|
|
|
|
|
Variable Rate Loan Pricing by Index: |
|
|
|
|
|
|
|
|
Prime |
|
|
|
|
|
|
$ |
2,254,870 |
|
|
One- month LIBOR |
|
|
|
|
|
|
8,977,288 |
|
|
Three- month LIBOR |
|
|
|
|
|
|
412,969 |
|
|
Twelve- month LIBOR |
|
|
|
|
|
|
5,870,663 |
|
|
Other |
|
|
|
|
|
|
289,610 |
|
|
Total variable rate |
|
|
|
|
|
|
$ |
17,805,400 |
|
Graph available at the following link:
http://ml.globenewswire.com/Resource/Download/ef1ce1bb-9104-4a8b-93ff-34a8785c198e
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 $9.0 billion of variable rate loans tied to one-month LIBOR and
$5.9 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 |
|
|
Third Quarter 2020 |
|
0 |
bps |
-1 |
bps |
-19 |
bps |
| Second
Quarter 2020 |
|
0 |
|
-83 |
|
-45 |
|
| First
Quarter 2020 |
|
-150 |
|
-77 |
|
-100 |
|
| Fourth
Quarter 2019 |
|
-25 |
|
-26 |
|
-3 |
|
|
Third Quarter 2019 |
|
-50 |
|
-38 |
|
-15 |
|
TABLE 10: ALLOWANCE FOR CREDIT LOSSES
|
|
|
Three Months Ended |
Nine Months Ended |
|
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
Sep 30, |
|
Sep 30, |
|
(Dollars in thousands) |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
2020 |
|
2019 |
|
Allowance for credit losses at beginning of
period |
|
$ |
373,174 |
|
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
$ |
161,901 |
|
$ |
158,461 |
|
|
$ |
154,164 |
|
|
Cumulative effect adjustment from the adoption of ASU
2016-13 |
|
— |
|
|
— |
|
|
47,418 |
|
|
— |
|
|
— |
|
47,418 |
|
|
— |
|
|
Provision for credit losses |
|
25,026 |
|
|
135,053 |
|
|
52,961 |
|
|
7,826 |
|
|
10,834 |
|
213,040 |
|
|
46,038 |
|
|
Other adjustments |
|
55 |
|
|
42 |
|
|
(73 |
) |
|
30 |
|
|
(13 |
) |
24 |
|
|
(51 |
) |
|
Charge-offs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
5,270 |
|
|
5,686 |
|
|
2,153 |
|
|
11,222 |
|
|
6,775 |
|
13,109 |
|
|
24,658 |
|
|
Commercial real estate |
|
1,529 |
|
|
7,224 |
|
|
570 |
|
|
533 |
|
|
809 |
|
9,323 |
|
|
4,869 |
|
|
Home equity |
|
138 |
|
|
239 |
|
|
1,001 |
|
|
1,330 |
|
|
1,594 |
|
1,378 |
|
|
2,372 |
|
|
Residential real estate |
|
83 |
|
|
293 |
|
|
401 |
|
|
483 |
|
|
25 |
|
777 |
|
|
315 |
|
|
Premium finance receivables |
|
4,640 |
|
|
3,434 |
|
|
3,184 |
|
|
3,817 |
|
|
1,866 |
|
11,258 |
|
|
9,085 |
|
|
Consumer and other |
|
103 |
|
|
99 |
|
|
128 |
|
|
167 |
|
|
117 |
|
330 |
|
|
355 |
|
|
Total charge-offs |
|
11,763 |
|
|
16,975 |
|
|
7,437 |
|
|
17,552 |
|
|
11,186 |
|
36,175 |
|
|
41,654 |
|
|
Recoveries: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
428 |
|
|
112 |
|
|
384 |
|
|
1,871 |
|
|
367 |
|
924 |
|
|
974 |
|
|
Commercial real estate |
|
175 |
|
|
493 |
|
|
263 |
|
|
1,404 |
|
|
385 |
|
931 |
|
|
1,112 |
|
|
Home equity |
|
111 |
|
|
46 |
|
|
294 |
|
|
166 |
|
|
183 |
|
451 |
|
|
313 |
|
|
Residential real estate |
|
25 |
|
|
30 |
|
|
60 |
|
|
50 |
|
|
203 |
|
115 |
|
|
372 |
|
|
Premium finance receivables |
|
1,720 |
|
|
833 |
|
|
1,110 |
|
|
1,350 |
|
|
563 |
|
3,663 |
|
|
1,853 |
|
|
Consumer and other |
|
20 |
|
|
58 |
|
|
41 |
|
|
43 |
|
|
36 |
|
119 |
|
|
152 |
|
|
Total recoveries |
|
2,479 |
|
|
1,572 |
|
|
2,152 |
|
|
4,884 |
|
|
1,737 |
|
6,203 |
|
|
4,776 |
|
|
Net charge-offs |
|
(9,284 |
) |
|
(15,403 |
) |
|
(5,285 |
) |
|
(12,668 |
) |
|
(9,449 |
) |
(29,972 |
) |
|
(36,878 |
) |
|
Allowance for credit losses at period end |
|
$ |
388,971 |
|
|
$ |
373,174 |
|
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
$ |
388,971 |
|
|
$ |
163,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net charge-offs by category as a percentage of
its own respective category’s average: |
|
|
|
|
Commercial |
|
0.16 |
% |
|
0.20 |
% |
|
0.08 |
% |
|
0.46 |
% |
|
0.31 |
% |
0.15 |
% |
|
0.39 |
% |
|
Commercial real estate |
|
0.06 |
|
|
0.33 |
|
|
0.02 |
|
|
(0.04 |
) |
|
0.02 |
|
0.14 |
|
|
0.07 |
|
|
Home equity |
|
0.02 |
|
|
0.16 |
|
|
0.57 |
|
|
0.89 |
|
|
1.08 |
|
0.26 |
|
|
0.52 |
|
|
Residential real estate |
|
0.02 |
|
|
0.09 |
|
|
0.11 |
|
|
0.14 |
|
|
(0.07 |
) |
0.07 |
|
|
(0.01 |
) |
|
Premium finance receivables |
|
0.12 |
|
|
0.12 |
|
|
0.10 |
|
|
0.28 |
|
|
0.15 |
|
0.11 |
|
|
0.12 |
|
|
Consumer and other |
|
0.49 |
|
|
0.25 |
|
|
0.56 |
|
|
0.41 |
|
|
0.27 |
|
0.41 |
|
|
0.24 |
|
|
Total loans, net of unearned income |
|
0.12 |
% |
|
0.20 |
% |
|
0.08 |
% |
|
0.19 |
% |
|
0.15 |
% |
0.14 |
% |
|
0.20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs as a percentage of the provision for
credit losses |
|
37.10 |
% |
|
11.41 |
% |
|
9.98 |
% |
|
161.87 |
% |
|
87.22 |
% |
14.07 |
% |
|
80.10 |
% |
|
Loans at period-end |
|
$ |
32,135,555 |
|
|
$ |
31,402,903 |
|
|
$ |
27,807,321 |
|
|
$ |
26,800,290 |
|
|
$ |
25,710,171 |
|
|
|
|
|
Allowance for loan losses as a percentage of loans at
period end |
|
1.01 |
% |
|
1.00 |
% |
|
0.78 |
% |
|
0.59 |
% |
|
0.63 |
% |
|
|
|
|
Allowance for loan and unfunded lending-related commitment
losses as a percentage of loans at period end |
|
1.21 |
|
|
1.19 |
|
|
0.91 |
|
|
0.59 |
|
|
0.64 |
|
|
|
|
|
Allowance for loan and unfunded lending-related commitment
losses as a percentage of loans at period end,
excluding PPP loans |
|
1.35 |
|
|
1.33 |
|
|
0.91 |
|
|
0.59 |
|
|
0.64 |
|
|
|
|
TABLE 11: ALLOWANCE AND PROVISON FOR CREDIT LOSSES BY
COMPONENT
|
|
|
Three Months Ended |
Nine Months Ended |
|
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
Sep 30, |
|
Sep 30, |
| (In
thousands) |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
2020 |
|
2019 |
|
Provision for loan losses |
|
$ |
21,678 |
|
|
$ |
112,822 |
|
|
$ |
50,396 |
|
|
$ |
7,704 |
|
|
$ |
10,804 |
|
$ |
184,896 |
|
|
$ |
45,922 |
|
|
Provision for unfunded lending-related commitments losses |
|
3,350 |
|
|
22,236 |
|
|
2,569 |
|
|
122 |
|
|
30 |
|
28,155 |
|
|
116 |
|
|
Provision for held-to-maturity securities losses |
|
(2 |
) |
|
(5 |
) |
|
(4 |
) |
|
— |
|
|
— |
|
(11 |
) |
|
— |
|
|
Provision for credit losses |
|
$ |
25,026 |
|
|
$ |
135,053 |
|
|
$ |
52,961 |
|
|
$ |
7,826 |
|
|
$ |
10,834 |
|
$ |
213,040 |
|
|
$ |
46,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
$ |
325,959 |
|
|
$ |
313,510 |
|
|
$ |
216,050 |
|
|
$ |
156,828 |
|
|
$ |
161,763 |
|
|
|
|
|
Allowance for unfunded lending-related commitments losses |
|
62,949 |
|
|
59,599 |
|
|
37,362 |
|
|
1,633 |
|
|
1,510 |
|
|
|
|
|
Allowance for loan losses and unfunded lending-related commitments
losses |
|
388,908 |
|
|
373,109 |
|
|
253,412 |
|
|
158,461 |
|
|
163,273 |
|
|
|
|
|
Allowance for held-to-maturity securities losses |
|
63 |
|
|
65 |
|
|
70 |
|
|
— |
|
|
— |
|
|
|
|
|
Allowance for credit losses |
|
$ |
388,971 |
|
|
$ |
373,174 |
|
|
$ |
253,482 |
|
|
$ |
158,461 |
|
|
$ |
163,273 |
|
|
|
|
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
September 30, 2020, June 30, 2020, and March 31,
2020.
|
|
As of Sep 30, 2020 |
As of Jun 30, 2020 |
As of Mar 31, 2020 |
|
(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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, industrial and other, excluding PPP loans |
$ |
8,808,467 |
|
|
$ |
110,045 |
|
|
1.25 |
% |
$ |
8,396,485 |
|
|
$ |
130,585 |
|
|
1.56 |
% |
$ |
8,888,342 |
|
|
$ |
104,754 |
|
|
1.18 |
% |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
1,270,235 |
|
|
73,565 |
|
|
5.79 |
|
1,193,735 |
|
|
67,333 |
|
|
5.64 |
|
1,113,863 |
|
|
31,687 |
|
|
2.84 |
|
|
Non-construction |
6,708,538 |
|
|
141,249 |
|
|
2.11 |
|
6,397,847 |
|
|
108,613 |
|
|
1.70 |
|
6,388,142 |
|
|
68,914 |
|
|
1.08 |
|
| Home
equity |
412,162 |
|
|
11,216 |
|
|
2.72 |
|
427,668 |
|
|
11,596 |
|
|
2.71 |
|
451,804 |
|
|
11,844 |
|
|
2.62 |
|
|
Residential real estate |
1,309,209 |
|
|
11,165 |
|
|
0.85 |
|
1,338,801 |
|
|
11,200 |
|
|
0.84 |
|
1,274,351 |
|
|
11,621 |
|
|
0.91 |
|
|
Total core loan portfolio |
$ |
18,508,611 |
|
|
$ |
347,240 |
|
|
1.88 |
% |
$ |
17,754,536 |
|
|
$ |
329,327 |
|
|
1.85 |
% |
$ |
18,116,502 |
|
|
$ |
228,820 |
|
|
1.26 |
% |
|
Commercial PPP loans |
$ |
3,379,013 |
|
|
$ |
3 |
|
|
0.00 |
% |
$ |
3,335,368 |
|
|
$ |
4 |
|
|
0.00 |
% |
$ |
— |
|
|
$ |
— |
|
|
— |
% |
|
Premium finance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial insurance loans |
4,060,144 |
|
|
17,378 |
|
|
0.43 |
|
3,999,774 |
|
|
17,122 |
|
|
0.43 |
|
3,465,055 |
|
|
7,426 |
|
|
0.21 |
|
|
Life insurance loans |
5,376,403 |
|
|
478 |
|
|
0.01 |
|
5,277,126 |
|
|
470 |
|
|
0.01 |
|
5,084,695 |
|
|
454 |
|
|
0.01 |
|
| Consumer
and other |
53,191 |
|
|
555 |
|
|
1.04 |
|
45,474 |
|
|
556 |
|
|
1.22 |
|
34,111 |
|
|
331 |
|
|
0.97 |
|
|
Total niche and consumer loan portfolio |
$ |
12,868,751 |
|
|
$ |
18,414 |
|
|
0.14 |
% |
$ |
12,657,742 |
|
|
$ |
18,152 |
|
|
0.14 |
% |
$ |
8,583,861 |
|
|
$ |
8,211 |
|
|
0.10 |
% |
| Purchased
commercial |
$ |
89,519 |
|
|
$ |
2,846 |
|
|
3.18 |
% |
$ |
127,379 |
|
|
$ |
3,008 |
|
|
2.36 |
% |
$ |
137,544 |
|
|
$ |
2,592 |
|
|
1.88 |
% |
| Purchased
commercial real estate |
444,369 |
|
|
19,196 |
|
|
4.32 |
|
609,163 |
|
|
21,180 |
|
|
3.48 |
|
683,526 |
|
|
12,195 |
|
|
1.78 |
|
| Purchased
home equity |
34,112 |
|
|
461 |
|
|
1.35 |
|
38,928 |
|
|
593 |
|
|
1.52 |
|
42,851 |
|
|
550 |
|
|
1.28 |
|
| Purchased
residential real estate |
75,601 |
|
|
625 |
|
|
0.83 |
|
88,628 |
|
|
715 |
|
|
0.81 |
|
103,038 |
|
|
929 |
|
|
0.90 |
|
|
Purchased life insurance loans |
112,429 |
|
|
— |
|
|
— |
|
123,676 |
|
|
— |
|
|
— |
|
136,944 |
|
|
— |
|
|
— |
|
| Purchased
consumer and other |
2,163 |
|
|
126 |
|
|
5.83 |
|
2,851 |
|
|
134 |
|
|
4.70 |
|
3,055 |
|
|
115 |
|
|
3.76 |
|
|
Total purchased loan portfolio |
$ |
758,193 |
|
|
$ |
23,254 |
|
|
3.07 |
% |
$ |
990,625 |
|
|
$ |
25,630 |
|
|
2.59 |
% |
$ |
1,106,958 |
|
|
$ |
16,381 |
|
|
1.48 |
% |
|
Total loans, net of unearned income |
$ |
32,135,555 |
|
|
$ |
388,908 |
|
|
1.21 |
% |
$ |
31,402,903 |
|
|
$ |
373,109 |
|
|
1.19 |
% |
$ |
27,807,321 |
|
|
$ |
253,412 |
|
|
0.91 |
% |
|
Total loans, net of unearned income,
excluding PPP loans |
$ |
28,756,542 |
|
|
$ |
388,905 |
|
|
1.35 |
% |
$ |
28,067,535 |
|
|
$ |
373,105 |
|
|
1.33 |
% |
$ |
27,807,321 |
|
|
$ |
253,412 |
|
|
0.91 |
% |
TABLE 13: LOAN PORTFOLIO
AGING
|
(Dollars in thousands) |
|
Sep 30, 2020 |
|
Jun 30, 2020 |
|
Mar 31, 2020 |
|
Dec 31, 2019 |
|
Sep 30, 2019 |
|
Loan Balances: |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
42,036 |
|
|
$ |
42,882 |
|
|
$ |
49,916 |
|
|
$ |
37,224 |
|
|
$ |
43,931 |
|
|
90+ days and still accruing |
|
— |
|
|
1,374 |
|
|
1,241 |
|
|
1,855 |
|
|
382 |
|
|
60-89 days past due |
|
2,168 |
|
|
8,952 |
|
|
8,873 |
|
|
3,275 |
|
|
12,860 |
|
|
30-59 days past due |
|
48,271 |
|
|
23,720 |
|
|
86,129 |
|
|
77,324 |
|
|
51,487 |
|
|
Current |
|
12,184,524 |
|
|
11,782,304 |
|
|
8,879,727 |
|
|
8,166,242 |
|
|
8,086,942 |
|
|
Total commercial |
|
$ |
12,276,999 |
|
|
$ |
11,859,232 |
|
|
$ |
9,025,886 |
|
|
$ |
8,285,920 |
|
|
$ |
8,195,602 |
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
68,815 |
|
|
$ |
64,557 |
|
|
$ |
62,830 |
|
|
$ |
26,113 |
|
|
$ |
21,557 |
|
|
90+ days and still accruing |
|
— |
|
|
— |
|
|
516 |
|
|
14,946 |
|
|
4,992 |
|
|
60-89 days past due |
|
8,299 |
|
|
26,480 |
|
|
10,212 |
|
|
31,546 |
|
|
9,629 |
|
|
30-59 days past due |
|
53,462 |
|
|
75,528 |
|
|
75,068 |
|
|
97,567 |
|
|
33,098 |
|
|
Current |
|
8,292,566 |
|
|
8,034,180 |
|
|
8,036,905 |
|
|
7,850,104 |
|
|
7,379,391 |
|
|
Total commercial real estate |
|
$ |
8,423,142 |
|
|
$ |
8,200,745 |
|
|
$ |
8,185,531 |
|
|
$ |
8,020,276 |
|
|
$ |
7,448,667 |
|
|
Home equity |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
6,329 |
|
|
$ |
7,261 |
|
|
$ |
7,243 |
|
|
$ |
7,363 |
|
|
$ |
7,920 |
|
|
90+ days and still accruing |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
60-89 days past due |
|
70 |
|
|
— |
|
|
214 |
|
|
454 |
|
|
95 |
|
|
30-59 days past due |
|
1,148 |
|
|
1,296 |
|
|
2,096 |
|
|
3,533 |
|
|
3,100 |
|
|
Current |
|
438,727 |
|
|
458,039 |
|
|
485,102 |
|
|
501,716 |
|
|
501,188 |
|
|
Total home equity |
|
$ |
446,274 |
|
|
$ |
466,596 |
|
|
$ |
494,655 |
|
|
$ |
513,066 |
|
|
$ |
512,303 |
|
|
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
22,069 |
|
|
$ |
19,529 |
|
|
$ |
18,965 |
|
|
$ |
13,797 |
|
|
$ |
13,447 |
|
|
90+ days and still accruing |
|
— |
|
|
— |
|
|
605 |
|
|
5,771 |
|
|
3,244 |
|
|
60-89 days past due |
|
814 |
|
|
1,506 |
|
|
345 |
|
|
3,089 |
|
|
1,868 |
|
|
30-59 days past due |
|
2,443 |
|
|
4,400 |
|
|
28,983 |
|
|
18,041 |
|
|
1,433 |
|
|
Current |
|
1,359,484 |
|
|
1,401,994 |
|
|
1,328,491 |
|
|
1,313,523 |
|
|
1,198,674 |
|
|
Total residential real estate |
|
$ |
1,384,810 |
|
|
$ |
1,427,429 |
|
|
$ |
1,377,389 |
|
|
$ |
1,354,221 |
|
|
$ |
1,218,666 |
|
|
Premium finance receivables |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
21,080 |
|
|
$ |
16,460 |
|
|
$ |
21,058 |
|
|
$ |
21,180 |
|
|
$ |
16,540 |
|
|
90+ days and still accruing |
|
12,177 |
|
|
35,638 |
|
|
16,505 |
|
|
11,517 |
|
|
10,612 |
|
|
60-89 days past due |
|
38,286 |
|
|
42,353 |
|
|
12,730 |
|
|
12,119 |
|
|
26,606 |
|
|
30-59 days past due |
|
80,732 |
|
|
61,160 |
|
|
70,185 |
|
|
51,342 |
|
|
44,767 |
|
|
Current |
|
9,396,701 |
|
|
9,244,965 |
|
|
8,566,216 |
|
|
8,420,471 |
|
|
8,146,921 |
|
|
Total premium finance receivables |
|
$ |
9,548,976 |
|
|
$ |
9,400,576 |
|
|
$ |
8,686,694 |
|
|
$ |
8,516,629 |
|
|
$ |
8,245,446 |
|
|
Consumer and other |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
422 |
|
|
$ |
427 |
|
|
$ |
403 |
|
|
$ |
231 |
|
|
$ |
224 |
|
|
90+ days and still accruing |
|
175 |
|
|
156 |
|
|
78 |
|
|
287 |
|
|
117 |
|
|
60-89 days past due |
|
273 |
|
|
4 |
|
|
625 |
|
|
40 |
|
|
55 |
|
|
30-59 days past due |
|
493 |
|
|
281 |
|
|
207 |
|
|
344 |
|
|
272 |
|
|
Current |
|
53,991 |
|
|
47,457 |
|
|
35,853 |
|
|
109,276 |
|
|
88,819 |
|
|
Total consumer and other |
|
$ |
55,354 |
|
|
$ |
48,325 |
|
|
$ |
37,166 |
|
|
$ |
110,178 |
|
|
$ |
89,487 |
|
|
Total loans, net of unearned income |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
160,751 |
|
|
$ |
151,116 |
|
|
$ |
160,415 |
|
|
$ |
105,908 |
|
|
$ |
103,619 |
|
|
90+ days and still accruing |
|
12,352 |
|
|
37,168 |
|
|
18,945 |
|
|
34,376 |
|
|
19,347 |
|
|
60-89 days past due |
|
49,910 |
|
|
79,295 |
|
|
32,999 |
|
|
50,523 |
|
|
51,113 |
|
|
30-59 days past due |
|
186,549 |
|
|
166,385 |
|
|
262,668 |
|
|
248,151 |
|
|
134,157 |
|
|
Current |
|
31,725,993 |
|
|
30,968,939 |
|
|
27,332,294 |
|
|
26,361,332 |
|
|
25,401,935 |
|
|
Total loans, net of unearned income |
|
$ |
32,135,555 |
|
|
$ |
31,402,903 |
|
|
$ |
27,807,321 |
|
|
$ |
26,800,290 |
|
|
$ |
25,710,171 |
|
TABLE 14: NON-PERFORMING ASSETS AND TROUBLED DEBT
RESTRUCTURINGS ("TDRs")
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
(Dollars in thousands) |
2020 |
|
2020 |
|
2020(1) |
|
2019 |
|
2019 |
|
Loans past due greater than 90 days and still
accruing
(2): |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
— |
|
|
$ |
1,374 |
|
|
$ |
1,241 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Commercial real estate |
— |
|
|
— |
|
|
516 |
|
|
— |
|
|
— |
|
| Home
equity |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Residential real estate |
— |
|
|
— |
|
|
605 |
|
|
— |
|
|
— |
|
| Premium
finance receivables |
12,177 |
|
|
35,638 |
|
|
16,505 |
|
|
11,517 |
|
|
10,612 |
|
| Consumer
and other |
175 |
|
|
156 |
|
|
78 |
|
|
163 |
|
|
53 |
|
|
Total loans past due greater than 90 days and still accruing |
12,352 |
|
|
37,168 |
|
|
18,945 |
|
|
11,680 |
|
|
10,665 |
|
|
Non-accrual loans: |
|
|
|
|
|
|
|
|
|
|
Commercial |
42,036 |
|
|
42,882 |
|
|
49,916 |
|
|
37,224 |
|
|
43,931 |
|
|
Commercial real estate |
68,815 |
|
|
64,557 |
|
|
62,830 |
|
|
26,113 |
|
|
21,557 |
|
| Home
equity |
6,329 |
|
|
7,261 |
|
|
7,243 |
|
|
7,363 |
|
|
7,920 |
|
|
Residential real estate |
22,069 |
|
|
19,529 |
|
|
18,965 |
|
|
13,797 |
|
|
13,447 |
|
| Premium
finance receivables |
21,080 |
|
|
16,460 |
|
|
21,058 |
|
|
21,180 |
|
|
16,540 |
|
| Consumer
and other |
422 |
|
|
427 |
|
|
403 |
|
|
231 |
|
|
224 |
|
|
Total non-accrual loans |
160,751 |
|
|
151,116 |
|
|
160,415 |
|
|
105,908 |
|
|
103,619 |
|
|
Total non-performing loans: |
|
|
|
|
|
|
|
|
|
|
Commercial |
42,036 |
|
|
44,256 |
|
|
51,157 |
|
|
37,224 |
|
|
43,931 |
|
|
Commercial real estate |
68,815 |
|
|
64,557 |
|
|
63,346 |
|
|
26,113 |
|
|
21,557 |
|
| Home
equity |
6,329 |
|
|
7,261 |
|
|
7,243 |
|
|
7,363 |
|
|
7,920 |
|
|
Residential real estate |
22,069 |
|
|
19,529 |
|
|
19,570 |
|
|
13,797 |
|
|
13,447 |
|
| Premium
finance receivables |
33,257 |
|
|
52,098 |
|
|
37,563 |
|
|
32,697 |
|
|
27,152 |
|
| Consumer
and other |
597 |
|
|
583 |
|
|
481 |
|
|
394 |
|
|
277 |
|
|
Total non-performing loans |
$ |
173,103 |
|
|
$ |
188,284 |
|
|
$ |
179,360 |
|
|
$ |
117,588 |
|
|
$ |
114,284 |
|
| Other
real estate owned |
2,891 |
|
|
2,409 |
|
|
2,701 |
|
|
5,208 |
|
|
8,584 |
|
| Other
real estate owned - from acquisitions |
6,326 |
|
|
7,788 |
|
|
8,325 |
|
|
9,963 |
|
|
8,898 |
|
| Other
repossessed assets |
— |
|
|
— |
|
|
— |
|
|
4 |
|
|
257 |
|
|
Total non-performing assets |
$ |
182,320 |
|
|
$ |
198,481 |
|
|
$ |
190,386 |
|
|
$ |
132,763 |
|
|
$ |
132,023 |
|
| Accruing
TDRs not included within non-performing assets |
$ |
46,410 |
|
|
$ |
48,609 |
|
|
$ |
47,049 |
|
|
$ |
36,725 |
|
|
$ |
45,178 |
|
|
Total non-performing loans by category as a percent of its
own respective category’s period-end balance: |
|
|
|
|
|
|
|
|
|
|
Commercial |
0.34 |
% |
|
0.37 |
% |
|
0.57 |
% |
|
0.45 |
% |
|
0.54 |
% |
|
Commercial real estate |
0.82 |
|
|
0.79 |
|
|
0.77 |
|
|
0.33 |
|
|
0.29 |
|
| Home
equity |
1.42 |
|
|
1.56 |
|
|
1.46 |
|
|
1.44 |
|
|
1.55 |
|
|
Residential real estate |
1.59 |
|
|
1.37 |
|
|
1.42 |
|
|
1.02 |
|
|
1.10 |
|
| Premium
finance receivables |
0.35 |
|
|
0.55 |
|
|
0.43 |
|
|
0.39 |
|
|
0.34 |
|
| Consumer
and other |
1.08 |
|
|
1.21 |
|
|
1.29 |
|
|
0.36 |
|
|
0.31 |
|
|
Total loans, net of unearned income |
0.54 |
% |
|
0.60 |
% |
|
0.65 |
% |
|
0.44 |
% |
|
0.44 |
% |
|
Total non-performing assets as a percentage of total
assets |
0.42 |
% |
|
0.46 |
% |
|
0.49 |
% |
|
0.36 |
% |
|
0.38 |
% |
|
Allowance for loan losses as a percentage of total
non-performing loans |
188.30 |
% |
|
166.51 |
% |
|
120.46 |
% |
|
133.37 |
% |
|
141.54 |
% |
(1) Prior to the adoption
of ASU 2016-13, acquired loans with evidence of credit quality
deterioration (purchased credit deteriorated loans, or "PCD loans")
were excluded from non-performing loans. PCD loans that meet the
definition of non-accrual or are greater than 90 days past-due and
still accruing interest are now included in non-performing loans
and resulted in a $37.3 million increase in non-accrual loans upon
adoption of ASU 2016-13 as of January 1, 2020.
(2) As of September 30, 2020,
June 30, 2020, March 31, 2020, December 31, 2019,
and September 30, 2019, no TDRs were past due greater than 90
days and still accruing interest.
Non-performing Loans Rollforward
|
|
Three Months Ended |
Nine Months Ended |
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
Sep 30, |
|
Sep 30, |
| (In
thousands) |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
188,284 |
|
|
$ |
179,360 |
|
|
$ |
117,588 |
|
|
$ |
114,284 |
|
|
$ |
113,447 |
|
$ |
117,588 |
|
|
$ |
113,234 |
|
|
Additions from becoming non-performing in the respective
period |
19,771 |
|
|
20,803 |
|
|
32,195 |
|
|
30,977 |
|
|
20,781 |
|
72,769 |
|
|
65,378 |
|
|
Additions from the adoption of ASU 2016-13 |
— |
|
|
— |
|
|
37,285 |
|
|
— |
|
|
— |
|
37,285 |
|
|
— |
|
|
Return to performing status |
(6,202 |
) |
|
(2,566 |
) |
|
(486 |
) |
|
(243 |
) |
|
(407 |
) |
(9,254 |
) |
|
(14,531 |
) |
|
Payments received |
(3,733 |
) |
|
(11,201 |
) |
|
(7,949 |
) |
|
(19,380 |
) |
|
(16,326 |
) |
(22,883 |
) |
|
(25,788 |
) |
|
Transfer to OREO and other repossessed assets |
(598 |
) |
|
— |
|
|
(1,297 |
) |
|
— |
|
|
(1,493 |
) |
(1,895 |
) |
|
(3,061 |
) |
|
Charge-offs |
(6,583 |
) |
|
(12,884 |
) |
|
(2,551 |
) |
|
(11,798 |
) |
|
(6,984 |
) |
(22,018 |
) |
|
(27,793 |
) |
|
Net change for niche loans (1) |
(17,836 |
) |
|
14,772 |
|
|
4,575 |
|
|
3,748 |
|
|
5,266 |
|
1,511 |
|
|
6,845 |
|
|
Balance at end of period |
$ |
173,103 |
|
|
$ |
188,284 |
|
|
$ |
179,360 |
|
|
$ |
117,588 |
|
|
$ |
114,284 |
|
$ |
173,103 |
|
|
$ |
114,284 |
|
(1) This includes activity for premium
finance receivables and indirect consumer loans.
TDRs
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
| (In
thousands) |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Accruing TDRs: |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
7,863 |
|
|
$ |
5,338 |
|
|
$ |
6,500 |
|
|
$ |
4,905 |
|
|
$ |
14,099 |
|
|
Commercial real estate |
10,846 |
|
|
19,106 |
|
|
18,043 |
|
|
9,754 |
|
|
10,370 |
|
|
Residential real estate and other |
27,701 |
|
|
24,165 |
|
|
22,506 |
|
|
22,066 |
|
|
20,709 |
|
|
Total accrual |
$ |
46,410 |
|
|
$ |
48,609 |
|
|
$ |
47,049 |
|
|
$ |
36,725 |
|
|
$ |
45,178 |
|
|
Non-accrual TDRs:
(1) |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
13,132 |
|
|
$ |
20,788 |
|
|
$ |
17,206 |
|
|
$ |
13,834 |
|
|
$ |
7,451 |
|
|
Commercial real estate |
13,601 |
|
|
8,545 |
|
|
14,420 |
|
|
7,119 |
|
|
7,673 |
|
|
Residential real estate and other |
5,392 |
|
|
5,606 |
|
|
4,962 |
|
|
6,158 |
|
|
6,006 |
|
|
Total non-accrual |
$ |
32,125 |
|
|
$ |
34,939 |
|
|
$ |
36,588 |
|
|
$ |
27,111 |
|
|
$ |
21,130 |
|
|
Total TDRs: |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
20,995 |
|
|
$ |
26,126 |
|
|
$ |
23,706 |
|
|
$ |
18,739 |
|
|
$ |
21,550 |
|
|
Commercial real estate |
24,447 |
|
|
27,651 |
|
|
32,463 |
|
|
16,873 |
|
|
18,043 |
|
|
Residential real estate and other |
33,093 |
|
|
29,771 |
|
|
27,468 |
|
|
28,224 |
|
|
26,715 |
|
|
Total TDRs |
$ |
78,535 |
|
|
$ |
83,548 |
|
|
$ |
83,637 |
|
|
$ |
63,836 |
|
|
$ |
66,308 |
|
(1) Included in total non-performing
loans.
Other Real Estate Owned
|
|
Three Months Ended |
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
| (In
thousands) |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Balance at beginning of period |
$ |
10,197 |
|
|
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
|
$ |
19,837 |
|
|
Disposals/resolved |
(1,532 |
) |
|
(612 |
) |
|
(4,793 |
) |
|
(4,860 |
) |
|
(4,501 |
) |
|
Transfers in at fair value, less costs to sell |
777 |
|
|
— |
|
|
954 |
|
|
936 |
|
|
3,008 |
|
|
Additions from acquisition |
— |
|
|
— |
|
|
— |
|
|
2,179 |
|
|
— |
|
|
Fair value adjustments |
(225 |
) |
|
(217 |
) |
|
(306 |
) |
|
(566 |
) |
|
(862 |
) |
|
Balance at end of period |
$ |
9,217 |
|
|
$ |
10,197 |
|
|
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End |
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Balance by Property Type: |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
Residential real estate |
$ |
1,839 |
|
|
$ |
1,382 |
|
|
$ |
1,684 |
|
|
$ |
1,016 |
|
|
$ |
1,250 |
|
|
Residential real estate development |
— |
|
|
— |
|
|
— |
|
|
810 |
|
|
1,282 |
|
|
Commercial real estate |
7,378 |
|
|
8,815 |
|
|
9,342 |
|
|
13,345 |
|
|
14,950 |
|
|
Total |
$ |
9,217 |
|
|
$ |
10,197 |
|
|
$ |
11,026 |
|
|
$ |
15,171 |
|
|
$ |
17,482 |
|
TABLE 15: NON-INTEREST INCOME
|
|
Three Months Ended |
|
Q3 2020 compared to |
|
Q3 2020 compared to |
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q2 2020 |
|
Q3 2019 |
|
(Dollars in thousands) |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
$ Change |
|
% Change |
|
$ Change |
|
% Change |
|
Brokerage |
$ |
4,563 |
|
|
$ |
4,147 |
|
|
$ |
5,281 |
|
|
$ |
4,859 |
|
|
$ |
4,686 |
|
|
$ |
416 |
|
|
10 |
% |
|
$ |
(123 |
) |
|
(3 |
)% |
|
Trust and asset management |
20,394 |
|
|
18,489 |
|
|
20,660 |
|
|
20,140 |
|
|
19,313 |
|
|
1,905 |
|
|
10 |
|
|
1,081 |
|
|
6 |
|
|
Total wealth management |
24,957 |
|
|
22,636 |
|
|
25,941 |
|
|
24,999 |
|
|
23,999 |
|
|
2,321 |
|
|
10 |
|
|
958 |
|
|
4 |
|
|
Mortgage banking |
108,544 |
|
|
102,324 |
|
|
48,326 |
|
|
47,860 |
|
|
50,864 |
|
|
6,220 |
|
|
6 |
|
|
57,680 |
|
|
113 |
|
|
Service charges on deposit accounts |
11,497 |
|
|
10,420 |
|
|
11,265 |
|
|
10,973 |
|
|
9,972 |
|
|
1,077 |
|
|
10 |
|
|
1,525 |
|
|
15 |
|
|
Gains (losses) on investment securities, net |
411 |
|
|
808 |
|
|
(4,359 |
) |
|
587 |
|
|
710 |
|
|
(397 |
) |
|
(49 |
) |
|
(299 |
) |
|
(42 |
) |
|
Fees from covered call options |
— |
|
|
— |
|
|
2,292 |
|
|
1,243 |
|
|
— |
|
|
— |
|
|
NM |
|
|
— |
|
|
NM |
|
|
Trading gains (losses), net |
183 |
|
|
(634 |
) |
|
(451 |
) |
|
46 |
|
|
11 |
|
|
817 |
|
|
NM |
|
|
172 |
|
|
NM |
|
|
Operating lease income, net |
11,717 |
|
|
11,785 |
|
|
11,984 |
|
|
12,487 |
|
|
12,025 |
|
|
(68 |
) |
|
(1 |
) |
|
(308 |
) |
|
(3 |
) |
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap fees |
4,029 |
|
|
5,693 |
|
|
6,066 |
|
|
2,206 |
|
|
4,811 |
|
|
(1,664 |
) |
|
(29 |
) |
|
(782 |
) |
|
(16 |
) |
|
BOLI |
1,218 |
|
|
1,950 |
|
|
(1,284 |
) |
|
1,377 |
|
|
830 |
|
|
(732 |
) |
|
(38 |
) |
|
388 |
|
|
47 |
|
|
Administrative services |
1,077 |
|
|
933 |
|
|
1,112 |
|
|
1,072 |
|
|
1,086 |
|
|
144 |
|
|
15 |
|
|
(9 |
) |
|
(1 |
) |
|
Foreign currency remeasurement (losses) gains |
(54 |
) |
|
(208 |
) |
|
(151 |
) |
|
261 |
|
|
(55 |
) |
|
154 |
|
|
74 |
|
|
1 |
|
|
(2 |
) |
|
Early pay-offs of capital leases |
165 |
|
|
275 |
|
|
74 |
|
|
24 |
|
|
6 |
|
|
(110 |
) |
|
(40 |
) |
|
159 |
|
|
NM |
|
|
Miscellaneous |
6,849 |
|
|
6,011 |
|
|
12,427 |
|
|
9,085 |
|
|
10,878 |
|
|
838 |
|
|
14 |
|
|
(4,029 |
) |
|
(37 |
) |
|
Total Other |
13,284 |
|
|
14,654 |
|
|
18,244 |
|
|
14,025 |
|
|
17,556 |
|
|
(1,370 |
) |
|
(9 |
) |
|
(4,272 |
) |
|
(24 |
) |
|
Total Non-Interest Income |
$ |
170,593 |
|
|
$ |
161,993 |
|
|
$ |
113,242 |
|
|
$ |
112,220 |
|
|
$ |
115,137 |
|
|
$ |
8,600 |
|
|
5 |
% |
|
$ |
55,456 |
|
|
48 |
% |
NM - Not meaningful.
|
|
Nine Months Ended |
|
|
|
|
|
|
Sep 30, |
|
Sep 30, |
|
$ |
|
% |
|
(Dollars in thousands) |
2020 |
|
2019 |
|
Change |
|
Change |
|
Brokerage |
$ |
13,991 |
|
|
$ |
13,966 |
|
|
$ |
25 |
|
|
— |
% |
|
Trust and asset management |
59,543 |
|
|
58,149 |
|
|
1,394 |
|
|
2 |
|
|
Total wealth management |
73,534 |
|
|
72,115 |
|
|
1,419 |
|
|
2 |
|
|
Mortgage banking |
259,194 |
|
|
106,433 |
|
|
152,761 |
|
|
144 |
|
|
Service charges on deposit accounts |
33,182 |
|
|
28,097 |
|
|
5,085 |
|
|
18 |
|
|
(Losses) gains on investment securities, net |
(3,140 |
) |
|
2,938 |
|
|
(6,078 |
) |
|
NM |
|
|
Fees from covered call options |
2,292 |
|
|
2,427 |
|
|
(135 |
) |
|
(6 |
) |
|
Trading losses, net |
(902 |
) |
|
(204 |
) |
|
(698 |
) |
|
NM |
|
|
Operating lease income, net |
35,486 |
|
|
34,554 |
|
|
932 |
|
|
3 |
|
|
Other: |
|
|
|
|
|
|
|
|
Interest rate swap fees |
15,788 |
|
|
10,866 |
|
|
4,922 |
|
|
45 |
|
|
BOLI |
1,884 |
|
|
3,570 |
|
|
(1,686 |
) |
|
(47 |
) |
|
Administrative services |
3,122 |
|
|
3,125 |
|
|
(3 |
) |
|
— |
|
|
Foreign currency remeasurement (loss) gain |
(413 |
) |
|
522 |
|
|
(935 |
) |
|
NM |
|
|
Early pay-offs of leases |
514 |
|
|
11 |
|
|
503 |
|
|
NM |
|
|
Miscellaneous |
25,287 |
|
|
30,498 |
|
|
(5,211 |
) |
|
(17 |
) |
|
Total Other |
46,182 |
|
|
48,592 |
|
|
(2,410 |
) |
|
(5 |
) |
|
Total Non-Interest Income |
$ |
445,828 |
|
|
$ |
294,952 |
|
|
$ |
150,876 |
|
|
51 |
% |
NM - Not meaningful.
TABLE 16: MORTGAGE BANKING
|
|
Three Months Ended |
Nine Months Ended |
|
(Dollars in thousands) |
Sep 30,
2020 |
|
Jun 30,
2020 |
|
Mar 31,
2020 |
|
Dec 31,
2019 |
|
Sep 30,
2019 |
Sep 30,
2020 |
|
Sep 30,
2019 |
|
Originations and Commitments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail originations |
$ |
1,590,699 |
|
|
$ |
1,588,932 |
|
|
$ |
773,144 |
|
|
$ |
782,122 |
|
|
$ |
913,631 |
|
$ |
3,952,775 |
|
|
$ |
1,948,743 |
|
|
Correspondent originations |
— |
|
|
— |
|
|
— |
|
|
4,024 |
|
|
50,639 |
|
— |
|
|
381,705 |
|
| Veterans
First originations |
635,876 |
|
|
621,878 |
|
|
442,957 |
|
|
459,236 |
|
|
456,005 |
|
1,700,711 |
|
|
922,091 |
|
|
Total originations for sale (A) |
$ |
2,226,575 |
|
|
$ |
2,210,810 |
|
|
$ |
1,216,101 |
|
|
$ |
1,245,382 |
|
|
$ |
1,420,275 |
|
$ |
5,653,486 |
|
|
$ |
3,252,539 |
|
|
Originations for investment |
73,711 |
|
|
56,954 |
|
|
73,727 |
|
|
105,911 |
|
|
154,897 |
|
204,392 |
|
|
354,823 |
|
|
Total originations |
$ |
2,300,286 |
|
|
$ |
2,267,764 |
|
|
$ |
1,289,828 |
|
|
$ |
1,351,293 |
|
|
$ |
1,575,172 |
|
$ |
5,857,878 |
|
|
$ |
3,607,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Purchases
as a percentage of originations for sale |
41 |
% |
|
30 |
% |
|
37 |
% |
|
40 |
% |
|
48 |
% |
36 |
% |
|
57 |
% |
|
Refinances as a percentage of originations for sale |
59 |
|
|
70 |
|
|
63 |
|
|
60 |
|
|
52 |
|
64 |
|
|
43 |
|
|
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mandatory
commitments to fund originations for sale (1) |
$ |
1,962,817 |
|
|
$ |
1,275,648 |
|
|
$ |
1,375,162 |
|
|
$ |
372,357 |
|
|
$ |
433,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production revenue (B) (2) |
$ |
94,148 |
|
|
$ |
93,433 |
|
|
$ |
49,327 |
|
|
$ |
34,622 |
|
|
$ |
40,924 |
|
$ |
236,908 |
|
|
$ |
87,425 |
|
|
Production margin (B / A) |
4.23 |
% |
|
4.23 |
% |
|
4.06 |
% |
|
2.78 |
% |
|
2.88 |
% |
4.19 |
% |
|
2.69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Servicing: |
|
|
|
|
|
|
|
|
|
|
|
|
| Loans
serviced for others (C) |
$ |
10,139,878 |
|
|
$ |
9,188,285 |
|
|
$ |
8,314,634 |
|
|
$ |
8,243,251 |
|
|
$ |
7,901,045 |
|
|
|
|
| MSRs, at
fair value (D) |
86,907 |
|
|
77,203 |
|
|
73,504 |
|
|
85,638 |
|
|
75,585 |
|
|
|
|
|
Percentage of MSRs to loans serviced for others (D / C) |
0.86 |
% |
|
0.84 |
% |
|
0.88 |
% |
|
1.04 |
% |
|
0.96 |
% |
|
|
|
| Servicing
income |
$ |
8,118 |
|
|
$ |
6,908 |
|
|
$ |
7,031 |
|
|
$ |
6,247 |
|
|
$ |
5,989 |
|
$ |
22,057 |
|
|
$ |
16,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of MSR: |
|
|
|
|
|
|
|
|
|
|
|
|
| MSR -
current period capitalization |
$ |
20,936 |
|
|
$ |
20,351 |
|
|
$ |
9,447 |
|
|
$ |
14,532 |
|
|
$ |
14,029 |
|
$ |
50,734 |
|
|
$ |
30,411 |
|
| MSR -
collection of expected cash flows - paydowns |
(590 |
) |
|
(419 |
) |
|
(547 |
) |
|
(483 |
) |
|
(456 |
) |
(1,556 |
) |
|
(1,418 |
) |
| MSR -
collection of expected cash flows - payoffs |
(7,272 |
) |
|
(8,252 |
) |
|
(6,476 |
) |
|
(6,325 |
) |
|
(6,781 |
) |
(22,000 |
) |
|
(11,892 |
) |
|
Valuation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
MSR - changes in fair value model assumptions |
(3,002 |
) |
|
(7,982 |
) |
|
(14,557 |
) |
|
2,329 |
|
|
(4,058 |
) |
(25,541 |
) |
|
(17,107 |
) |
|
Gain (loss) on derivative contract held as an economic hedge,
net |
— |
|
|
589 |
|
|
4,160 |
|
|
(483 |
) |
|
82 |
|
4,749 |
|
|
1,002 |
|
|
MSR valuation adjustment, net of gain/(loss) on derivative contract
held as an economic hedge |
$ |
(3,002 |
) |
|
$ |
(7,393 |
) |
|
$ |
(10,397 |
) |
|
$ |
1,846 |
|
|
$ |
(3,976 |
) |
$ |
(20,792 |
) |
|
$ |
(16,105 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Mortgage Banking Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production revenue (2) |
$ |
94,148 |
|
|
$ |
93,433 |
|
|
$ |
49,327 |
|
|
$ |
34,622 |
|
|
$ |
40,924 |
|
$ |
236,908 |
|
|
$ |
87,425 |
|
| Servicing
income |
8,118 |
|
|
6,908 |
|
|
7,031 |
|
|
6,247 |
|
|
5,989 |
|
22,057 |
|
|
16,909 |
|
| MSR
activity |
10,072 |
|
|
4,287 |
|
|
(7,973 |
) |
|
9,570 |
|
|
2,816 |
|
6,386 |
|
|
996 |
|
|
Other |
(3,794 |
) |
|
(2,304 |
) |
|
(59 |
) |
|
(2,579 |
) |
|
1,135 |
|
(6,157 |
) |
|
1,103 |
|
|
Total mortgage banking revenue |
$ |
108,544 |
|
|
$ |
102,324 |
|
|
$ |
48,326 |
|
|
$ |
47,860 |
|
|
$ |
50,864 |
|
$ |
259,194 |
|
|
$ |
106,433 |
|
(1) Certain volume adjusted
for the estimated pull-through rate of the loan, which represents
the Company’s best estimate of the likelihood that a committed loan
will ultimately fund.
(2) Production revenue represents revenue
earned from the origination and subsequent sale of mortgages,
including gains on loans sold and fees from originations,
processing and other related activities, and excludes servicing
fees, changes in the fair value of servicing rights and changes to
the mortgage recourse obligation and other non-production
revenue.
TABLE 17: NON-INTEREST EXPENSE
|
|
Three Months Ended |
|
Q3 2020 compared to |
|
Q3 2020 compared to |
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q2 2020 |
|
Q3 2019 |
|
(Dollars in thousands) |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
$ Change |
|
% Change |
|
$ Change |
|
% Change |
|
Salaries and employee benefits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries |
$ |
89,849 |
|
|
$ |
87,105 |
|
|
$ |
81,286 |
|
|
$ |
82,888 |
|
|
$ |
78,067 |
|
|
$ |
2,744 |
|
|
3 |
% |
|
$ |
11,782 |
|
|
15 |
% |
|
Commissions and incentive compensation |
48,475 |
|
|
46,151 |
|
|
31,575 |
|
|
40,226 |
|
|
40,289 |
|
|
2,324 |
|
|
5 |
|
|
8,186 |
|
|
20 |
|
|
Benefits |
25,718 |
|
|
20,900 |
|
|
23,901 |
|
|
22,827 |
|
|
22,668 |
|
|
4,818 |
|
|
23 |
|
|
3,050 |
|
|
13 |
|
|
Total salaries and employee benefits |
164,042 |
|
|
154,156 |
|
|
136,762 |
|
|
145,941 |
|
|
141,024 |
|
|
9,886 |
|
|
6 |
|
|
23,018 |
|
|
16 |
|
|
Equipment |
17,251 |
|
|
15,846 |
|
|
14,834 |
|
|
14,485 |
|
|
13,314 |
|
|
1,405 |
|
|
9 |
|
|
3,937 |
|
|
30 |
|
|
Operating lease equipment depreciation |
9,425 |
|
|
9,292 |
|
|
9,260 |
|
|
9,766 |
|
|
8,907 |
|
|
133 |
|
|
1 |
|
|
518 |
|
|
6 |
|
|
Occupancy, net |
15,830 |
|
|
16,893 |
|
|
17,547 |
|
|
17,132 |
|
|
14,991 |
|
|
(1,063 |
) |
|
(6 |
) |
|
839 |
|
|
6 |
|
|
Data processing |
5,689 |
|
|
10,406 |
|
|
8,373 |
|
|
7,569 |
|
|
6,522 |
|
|
(4,717 |
) |
|
(45 |
) |
|
(833 |
) |
|
(13 |
) |
|
Advertising and marketing |
7,880 |
|
|
7,704 |
|
|
10,862 |
|
|
12,517 |
|
|
13,375 |
|
|
176 |
|
|
2 |
|
|
(5,495 |
) |
|
(41 |
) |
|
Professional fees |
6,488 |
|
|
7,687 |
|
|
6,721 |
|
|
7,650 |
|
|
8,037 |
|
|
(1,199 |
) |
|
(16 |
) |
|
(1,549 |
) |
|
(19 |
) |
|
Amortization of other intangible assets |
2,701 |
|
|
2,820 |
|
|
2,863 |
|
|
3,017 |
|
|
2,928 |
|
|
(119 |
) |
|
(4 |
) |
|
(227 |
) |
|
(8 |
) |
|
FDIC insurance |
6,772 |
|
|
7,081 |
|
|
4,135 |
|
|
1,348 |
|
|
148 |
|
|
(309 |
) |
|
(4 |
) |
|
6,624 |
|
|
NM |
|
|
OREO expense, net |
(168 |
) |
|
237 |
|
|
(876 |
) |
|
536 |
|
|
1,170 |
|
|
(405 |
) |
|
NM |
|
|
(1,338 |
) |
|
NM |
|
|
Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions - 3rd party brokers |
778 |
|
|
707 |
|
|
865 |
|
|
717 |
|
|
734 |
|
|
71 |
|
|
10 |
|
|
44 |
|
|
6 |
|
|
Postage |
1,529 |
|
|
1,591 |
|
|
1,949 |
|
|
2,220 |
|
|
2,321 |
|
|
(62 |
) |
|
(4 |
) |
|
(792 |
) |
|
(34 |
) |
|
Miscellaneous |
26,002 |
|
|
24,948 |
|
|
21,346 |
|
|
26,693 |
|
|
21,083 |
|
|
1,054 |
|
|
4 |
|
|
4,919 |
|
|
23 |
|
|
Total other |
28,309 |
|
|
27,246 |
|
|
24,160 |
|
|
29,630 |
|
|
24,138 |
|
|
1,063 |
|
|
4 |
|
|
4,171 |
|
|
17 |
|
|
Total Non-Interest Expense |
$ |
264,219 |
|
|
$ |
259,368 |
|
|
$ |
234,641 |
|
|
$ |
249,591 |
|
|
$ |
234,554 |
|
|
$ |
4,851 |
|
|
2 |
% |
|
$ |
29,665 |
|
|
13 |
% |
NM - Not meaningful.
|
|
|
Nine Months Ended |
|
|
|
|
|
|
Sep 30, |
|
Sep 30, |
$ |
|
% |
|
(Dollars in thousands) |
|
2020 |
|
2019 |
Change |
|
Change |
|
Salaries and employee benefits: |
|
|
|
|
|
|
|
|
Salaries |
|
$ |
258,240 |
|
|
$ |
227,464 |
|
$ |
30,776 |
|
|
14 |
% |
|
Commissions and incentive compensation |
|
126,201 |
|
|
108,374 |
|
17,827 |
|
|
16 |
|
|
Benefits |
|
70,519 |
|
|
64,641 |
|
5,878 |
|
|
9 |
|
|
Total salaries and employee benefits |
|
454,960 |
|
|
400,479 |
|
54,481 |
|
|
14 |
|
|
Equipment |
|
47,931 |
|
|
37,843 |
|
10,088 |
|
|
27 |
|
|
Operating lease equipment depreciation |
|
27,977 |
|
|
25,994 |
|
1,983 |
|
|
8 |
|
|
Occupancy, net |
|
50,270 |
|
|
47,157 |
|
3,113 |
|
|
7 |
|
|
Data processing |
|
24,468 |
|
|
20,251 |
|
4,217 |
|
|
21 |
|
|
Advertising and marketing |
|
26,446 |
|
|
36,078 |
|
(9,632 |
) |
|
(27 |
) |
|
Professional fees |
|
20,896 |
|
|
19,821 |
|
1,075 |
|
|
5 |
|
|
Amortization of other intangible assets |
|
8,384 |
|
|
8,827 |
|
(443 |
) |
|
(5 |
) |
|
FDIC insurance |
|
17,988 |
|
|
7,851 |
|
10,137 |
|
|
NM |
|
|
OREO expense, net |
|
(807 |
) |
|
3,092 |
|
(3,899 |
) |
|
NM |
|
|
Other: |
|
|
|
|
|
|
|
|
Commissions - 3rd party brokers |
|
2,350 |
|
|
2,201 |
|
149 |
|
|
7 |
|
|
Postage |
|
5,069 |
|
|
7,377 |
|
(2,308 |
) |
|
(31 |
) |
|
Miscellaneous |
|
72,296 |
|
|
61,564 |
|
10,732 |
|
|
17 |
|
|
Total other |
|
79,715 |
|
|
71,142 |
|
8,573 |
|
|
12 |
|
|
Total Non-Interest Expense |
|
$ |
758,228 |
|
|
$ |
678,535 |
|
$ |
79,693 |
|
|
12 |
% |
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 and pre-tax income, excluding
provision for credit losses. 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, as
a useful measurement of the Company's core net income.
|
|
Three Months Ended |
Nine Months Ended |
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
Sep 30, |
|
Sep 30, |
|
(Dollars and shares in thousands) |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
2020 |
|
2019 |
|
Reconciliation of Non-GAAP Net Interest Margin and
Efficiency Ratio: |
|
|
|
|
(A) Interest Income (GAAP) |
$ |
311,156 |
|
|
$ |
329,816 |
|
|
$ |
344,067 |
|
|
$ |
349,731 |
|
|
$ |
354,627 |
|
$ |
985,039 |
|
|
$ |
1,035,411 |
|
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Loans |
481 |
|
|
576 |
|
|
860 |
|
|
892 |
|
|
978 |
|
1,917 |
|
|
3,043 |
|
|
- Liquidity Management Assets |
546 |
|
|
538 |
|
|
551 |
|
|
573 |
|
|
574 |
|
1,635 |
|
|
1,707 |
|
|
- Other Earning Assets |
1 |
|
|
3 |
|
|
2 |
|
|
1 |
|
|
5 |
|
6 |
|
|
8 |
|
|
(B) Interest Income (non-GAAP) |
$ |
312,184 |
|
|
$ |
330,933 |
|
|
$ |
345,480 |
|
|
$ |
351,197 |
|
|
$ |
356,184 |
|
$ |
988,597 |
|
|
$ |
1,040,169 |
|
|
(C) Interest Expense (GAAP) |
$ |
55,220 |
|
|
$ |
66,685 |
|
|
$ |
82,624 |
|
|
$ |
87,852 |
|
|
$ |
89,775 |
|
$ |
204,529 |
|
|
$ |
242,371 |
|
|
(D) Net Interest Income (GAAP) (A minus C) |
$ |
255,936 |
|
|
$ |
263,131 |
|
|
$ |
261,443 |
|
|
$ |
261,879 |
|
|
$ |
264,852 |
|
$ |
780,510 |
|
|
$ |
793,040 |
|
|
(E) Net Interest Income (non-GAAP) (B minus
C) |
$ |
256,964 |
|
|
$ |
264,248 |
|
|
$ |
262,856 |
|
|
$ |
263,345 |
|
|
$ |
266,409 |
|
$ |
784,068 |
|
|
$ |
797,798 |
|
|
Net interest margin (GAAP) |
2.56 |
% |
|
2.73 |
% |
|
3.12 |
% |
|
3.17 |
% |
|
3.37 |
% |
2.79 |
% |
|
3.56 |
% |
|
Net interest margin, fully taxable-equivalent
(non-GAAP) |
2.57 |
% |
|
2.74 |
% |
|
3.14 |
% |
|
3.19 |
% |
|
3.39 |
% |
2.80 |
% |
|
3.58 |
% |
|
(F) Non-interest income |
$ |
170,593 |
|
|
$ |
161,993 |
|
|
$ |
113,242 |
|
|
$ |
112,220 |
|
|
$ |
115,137 |
|
$ |
445,828 |
|
|
$ |
294,952 |
|
|
(G) Gains (losses) on investment securities, net |
411 |
|
|
808 |
|
|
(4,359 |
) |
|
587 |
|
|
710 |
|
(3,140 |
) |
|
2,938 |
|
|
(H) Non-interest expense |
264,219 |
|
|
259,368 |
|
|
234,641 |
|
|
249,591 |
|
|
234,554 |
|
758,228 |
|
|
678,535 |
|
|
Efficiency ratio (H/(D+F-G)) |
62.01 |
% |
|
61.13 |
% |
|
61.90 |
% |
|
66.82 |
% |
|
61.84 |
% |
61.67 |
% |
|
62.53 |
% |
|
Efficiency ratio (non-GAAP) (H/(E+F-G)) |
61.86 |
% |
|
60.97 |
% |
|
61.67 |
% |
|
66.56 |
% |
|
61.59 |
% |
61.49 |
% |
|
62.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Tangible Common Equity
Ratio: |
|
|
|
|
Total shareholders’ equity (GAAP) |
$ |
4,074,089 |
|
|
$ |
3,990,218 |
|
|
$ |
3,700,393 |
|
|
$ |
3,691,250 |
|
|
$ |
3,540,325 |
|
|
|
|
|
Less: Non-convertible preferred stock (GAAP) |
(412,500 |
) |
|
(412,500 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
|
|
|
Less: Intangible assets (GAAP) |
(683,314 |
) |
|
(685,581 |
) |
|
(687,626 |
) |
|
(692,277 |
) |
|
(627,972 |
) |
|
|
|
|
(I) Total tangible common shareholders’ equity (non-GAAP) |
$ |
2,978,275 |
|
|
$ |
2,892,137 |
|
|
$ |
2,887,767 |
|
|
$ |
2,873,973 |
|
|
$ |
2,787,353 |
|
|
|
|
|
(J) Total assets (GAAP) |
$ |
43,731,718 |
|
|
$ |
43,540,017 |
|
|
$ |
38,799,847 |
|
|
$ |
36,620,583 |
|
|
$ |
34,911,902 |
|
|
|
|
|
Less: Intangible assets (GAAP) |
(683,314 |
) |
|
(685,581 |
) |
|
(687,626 |
) |
|
(692,277 |
) |
|
(627,972 |
) |
|
|
|
|
(K) Total tangible assets (non-GAAP) |
$ |
43,048,404 |
|
|
$ |
42,854,436 |
|
|
$ |
38,112,221 |
|
|
$ |
35,928,306 |
|
|
$ |
34,283,930 |
|
|
|
|
|
Common equity to assets ratio (GAAP) (L/J) |
8.4 |
% |
|
8.2 |
% |
|
9.2 |
% |
|
9.7 |
% |
|
9.8 |
% |
|
|
|
|
Tangible common equity ratio (non-GAAP) (I/K) |
6.9 |
% |
|
6.7 |
% |
|
7.6 |
% |
|
8.0 |
% |
|
8.1 |
% |
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
Sep 30, |
|
Sep 30, |
|
(Dollars and shares in thousands) |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
2020 |
|
2019 |
|
Reconciliation of Non-GAAP Tangible Book Value per Common
Share: |
|
|
|
|
Total shareholders’ equity |
$ |
4,074,089 |
|
|
$ |
3,990,218 |
|
|
$ |
3,700,393 |
|
|
$ |
3,691,250 |
|
|
$ |
3,540,325 |
|
|
|
|
|
Less: Preferred stock |
(412,500 |
) |
|
(412,500 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
|
|
|
(L) Total common equity |
$ |
3,661,589 |
|
|
$ |
3,577,718 |
|
|
$ |
3,575,393 |
|
|
$ |
3,566,250 |
|
|
$ |
3,415,325 |
|
|
|
|
|
(M) Actual common shares outstanding |
57,602 |
|
|
57,574 |
|
|
57,545 |
|
|
57,822 |
|
|
56,698 |
|
|
|
|
|
Book value per common share (L/M) |
$ |
63.57 |
|
|
$ |
62.14 |
|
|
$ |
62.13 |
|
|
$ |
61.68 |
|
|
$ |
60.24 |
|
|
|
|
|
Tangible book value per common share (non-GAAP)
(I/M) |
$ |
51.70 |
|
|
$ |
50.23 |
|
|
$ |
50.18 |
|
|
$ |
49.70 |
|
|
$ |
49.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Return on Average Tangible
Common Equity: |
|
|
|
|
(N) Net income applicable to common shares |
$ |
97,029 |
|
|
$ |
19,609 |
|
|
$ |
60,762 |
|
|
$ |
83,914 |
|
|
$ |
97,071 |
|
$ |
177,400 |
|
|
$ |
263,583 |
|
|
Add: Intangible asset amortization |
2,701 |
|
|
2,820 |
|
|
2,863 |
|
|
3,017 |
|
|
2,928 |
|
8,384 |
|
|
8,827 |
|
|
Less: Tax effect of intangible asset amortization |
(589 |
) |
|
(832 |
) |
|
(799 |
) |
|
(793 |
) |
|
(773 |
) |
(2,079 |
) |
|
(2,277 |
) |
|
After-tax intangible asset amortization |
2,112 |
|
|
1,988 |
|
|
2,064 |
|
|
2,224 |
|
|
2,155 |
|
6,305 |
|
|
6,550 |
|
|
(O) Tangible net income applicable to common shares (non-GAAP) |
$ |
99,141 |
|
|
$ |
21,597 |
|
|
$ |
62,826 |
|
|
$ |
86,138 |
|
|
$ |
99,226 |
|
$ |
183,705 |
|
|
$ |
270,133 |
|
|
Total average shareholders' equity |
$ |
4,034,902 |
|
|
$ |
3,908,846 |
|
|
$ |
3,710,169 |
|
|
$ |
3,622,184 |
|
|
$ |
3,496,714 |
|
$ |
3,885,187 |
|
|
$ |
3,407,398 |
|
|
Less: Average preferred stock |
(412,500 |
) |
|
(273,489 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
|
(125,000 |
) |
(270,849 |
) |
|
(125,000 |
) |
|
(P) Total average common shareholders' equity |
$ |
3,622,402 |
|
|
$ |
3,635,357 |
|
|
$ |
3,585,169 |
|
|
$ |
3,497,184 |
|
|
$ |
3,371,714 |
|
$ |
3,614,338 |
|
|
$ |
3,282,398 |
|
|
Less: Average intangible assets |
(684,717 |
) |
|
(686,526 |
) |
|
(690,777 |
) |
|
(689,286 |
) |
|
(630,279 |
) |
(687,331 |
) |
|
(625,800 |
) |
|
(Q) Total average tangible common shareholders’ equity
(non-GAAP) |
$ |
2,937,685 |
|
|
$ |
2,948,831 |
|
|
$ |
2,894,392 |
|
|
$ |
2,807,898 |
|
|
$ |
2,741,435 |
|
$ |
2,927,007 |
|
|
$ |
2,656,598 |
|
|
Return on average common equity, annualized
(N/P) |
10.66 |
% |
|
2.17 |
% |
|
6.82 |
% |
|
9.52 |
% |
|
11.42 |
% |
6.56 |
% |
|
10.74 |
% |
|
Return on average tangible common equity, annualized
(non-GAAP) (O/Q) |
13.43 |
% |
|
2.95 |
% |
|
8.73 |
% |
|
12.17 |
% |
|
14.36 |
% |
8.38 |
% |
|
13.60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision
Income: |
|
|
|
|
|
|
Income before taxes |
$ |
137,284 |
|
|
$ |
30,703 |
|
|
$ |
87,083 |
|
|
$ |
116,682 |
|
|
$ |
134,601 |
|
$ |
255,070 |
|
|
$ |
363,419 |
|
|
Add: Provision for credit losses |
25,026 |
|
|
135,053 |
|
|
52,961 |
|
|
7,826 |
|
|
10,834 |
|
213,040 |
|
|
46,038 |
|
|
Pre-tax income, excluding provision for credit losses
(non-GAAP) |
$ |
162,310 |
|
|
$ |
165,756 |
|
|
$ |
140,044 |
|
|
$ |
124,508 |
|
|
$ |
145,435 |
|
$ |
468,110 |
|
|
$ |
409,457 |
|
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, Bolingbrook, 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, 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, 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;
- a prolonged period of near zero interest rates and potentially
negative interest rates, either broadly or for some types of
instruments, which may affect the Company’s net interest income and
net interest margin, and which could materially adversely affect
the Company’s profitability;
- 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
Thursday, October 22, 2020 at 1:00 p.m. (Central Time) regarding
third quarter and year-to-date 2020 results. Individuals interested
in listening should call (877) 363-5049 and enter Conference
ID #5903949. 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 third
quarter and year-to-date 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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