Wintrust Financial Corporation Reports Fourth Quarter 2021 Net Income of $98.8 million and Record Full Year Net Income of $466.2 million
ROSEMONT, Ill., Jan. 19, 2022 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, “we” or “our”) (Nasdaq: WTFC) announced net income of $98.8 million or $1.58 per diluted common share for the fourth quarter of 2021, a decrease in diluted earnings per common share of 11% compared to the third quarter of 2021. The Company recorded record annual net income of $466.2 million or $7.58 per diluted common share for the year ended December 31, 2021 compared to net income of $293.0 million or $4.68 per diluted common share for the same period of 2020.
Highlights of the Fourth Quarter of 2021:
Comparative information to the third quarter of 2021
Total assets increased by $2.3 billion totaling $50.1 billion as of December 31, 2021.
Total loans, excluding Paycheck Protection Program (“PPP”) loans, increased by $2.0 billion, or 25% on an annualized basis.
Core loans increased by $908 million and Niche loans increased by $1.1 billion. Niche loans included $578 million of growth related to loans acquired in a business combination completed in the fourth quarter of 2021.
PPP loans declined by $524 million in the fourth quarter of 2021 primarily as a result of processing forgiveness payments.
Total deposits increased by $2.1 billion, including a $925 million increase in non-interest bearing deposits.
Net interest income increased by $8.5 million as compared to the third quarter of 2021 as follows:
Increased $15.5 million primarily due to earning asset growth and a five basis point decline in deposit costs.
Decreased by $7.0 million due to $1.7 million less PPP interest income and $5.3 million less PPP fee income.
Net interest margin decreased by four basis points primarily due to increased liquidity which had approximately a six basis point unfavorable impact.
However, the rate on interest bearing deposits declined by five basis points which more than offset a three basis point decline in loan yields.
Recorded $6.2 million of net charge-offs or seven basis points on an annualized basis in the fourth quarter of 2021 as compared to no material net charge-offs in the third quarter of 2021.
Recorded a provision for credit losses of $9.3 million in the fourth quarter of 2021 as compared to a negative provision for credit losses of $7.9 million in the third quarter of 2021. The provision for credit losses in the fourth quarter of 2021 was primarily due to strong loan growth with approximately $782,000 of provision for credit losses related to acquired loans.
The allowance for credit losses on our core loan portfolio is approximately 1.33% of the outstanding balance as of December 31, 2021, down from 1.38% as of September 30, 2021. See Table 12 for more information.
Non-performing loans decreased to 0.21% of total loans, as of December 31, 2021, down from 0.27% as of September 30, 2021.
Mortgage banking revenue decreased to $53.1 million for the fourth quarter of 2021 as compared to $55.8 million in the third quarter of 2021.
Tangible book value per common share (non-GAAP) increased to $59.64 as compared to $58.32 as of September 30, 2021. See Table 18 for reconciliation of non-GAAP measures.
Edward J. Wehmer, Founder and Chief Executive Officer, commented, "I am extremely proud of the Company’s performance in 2021 as we celebrated Wintrust’s 30th anniversary by reporting record annual net income and eclipsing $50 billion in total assets. The fourth quarter of 2021 was characterized by significant loan and deposit growth, increased net interest income, seasonally strong mortgage banking revenue, tangible book value growth and impressive credit quality metrics. Wintrust reported net income of $98.8 million for the fourth quarter of 2021, down from $109.1 million in the third quarter of 2021. On an annual basis, the Company had record net income totaling $466.2 million in 2021, up from $293.0 million in 2020. Total assets of $50.1 billion as of December 31, 2021 increased by $2.3 billion as compared to September 30, 2021 and increased by $5.1 billion as compared to December 31, 2020."
Mr. Wehmer continued, "The Company experienced significant loan growth as loans, excluding PPP loans, increased by $2.0 billion or 25%, on an annualized basis in the fourth quarter of 2021. We continue to pick up new market share and grow organically as all of our material loan portfolios exhibited strong growth in the fourth quarter of 2021 including our commercial, commercial real estate, residential real estate loans for investment, commercial insurance premium finance receivable and life insurance premium receivable portfolios. In addition, we completed an acquisition which contributed approximately $578 million of loan growth to the balance sheet. We believe this portfolio fits well with our existing insurance lending businesses. We are still experiencing historically low commercial line of credit utilization and feel confident that we can continue to grow loans given our robust loan pipelines and diversified loan portfolio. Further, our loan growth was predominantly in the second half of the fourth quarter of 2021 as loans as of December 31, 2021 were $1.1 billion higher than average total loans in the fourth quarter of 2021. Total deposits increased by $2.1 billion as compared to the third quarter of 2021 primarily in products with zero or near zero interest rates contributing to a decrease in our cost of funds. We continue to emphasize growing our franchise, including gathering low cost deposits, which we believe will drive value in the long term. Our loans to deposits ratio ended the quarter at 82.6% and we believe that we have sufficient liquidity to meet customer loan demand."
Mr. Wehmer commented, "Net interest income increased by $8.5 million in the fourth quarter of 2021 primarily due to earning asset growth and a decline in deposit costs. We believe that we have managed to optimize our cost of funds and successfully grown through this challenging interest rate cycle. Additionally, we have been prudent and measured in our approach to deploying liquidity into investment securities and we expect to expand our securities portfolio in 2022 to further enhance net interest income as available market returns improve. Net interest margin decreased by four basis points in the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to increased liquidity which had approximately a six basis point unfavorable impact. Excluding the unfavorable net interest margin impact from increased liquidity, the margin exhibited improvement as the rate on deposits declined five basis points as compared to a three basis point decline in loan yields."
Mr. Wehmer stated, “We have maintained our asset sensitive interest rate position which we expect to benefit us as short term interest rates rise. Based on modeled contractual cash flows, including prepayment assumptions, approximately 80% of our current loan balances are projected to reprice or mature in 2022. We project that, assuming an immediate and parallel 25 basis point rate hike, the cumulative increase to net interest income in the subsequent 12 months is approximately $40-$50 million. Such projections incorporate a number of assumptions and could differ materially depending on various factors including competition and the macroeconomic environment.”
Mr. Wehmer noted, “We recorded mortgage banking revenue of $53.1 million in the fourth quarter of 2021 as compared to $55.8 million in the third quarter of 2021. Loan volumes originated for sale in the fourth quarter of 2021 were $1.3 billion, down from $1.6 billion in the third quarter of 2021. Additionally, the Company recorded a $6.7 million increase in the value of mortgage servicing rights related to changes in fair value model assumptions as compared to an $888,000 decrease recognized in the third quarter of 2021. We are focused on expanding our market share of purchase originations understanding that refinance volumes may be pressured in a rising rate environment. Based on current market conditions, and excluding the impact of MSR valuation adjustments, we expect that mortgage banking revenue in the first quarter of 2022 will remain relatively similar to the level recorded in the fourth quarter of 2021.”
Commenting on credit quality, Mr. Wehmer stated, "The Company has reached a record low level of non-performing loans of 0.21% of total loans, as of December 31, 2021. During the fourth quarter of 2021, we continued our practice of pursuing the resolution of non-performing credits and executed a loan sale that reduced non-performing loans by approximately $10 million resulting in $1.8 million of net charge-offs. The fourth quarter of 2021 demonstrated another benign quarter of net charge-offs at $6.2 million following the third quarter of 2021 which had no material net charge-offs. The Company recorded a provision for credit losses of $9.3 million in the fourth quarter of 2021 primarily due to significant loan growth. The allowance for credit losses on our core loan portfolio as of December 31, 2021 is approximately 1.33% of the outstanding balance. We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit."
Mr. Wehmer concluded, “Our fourth quarter of 2021 results continued to demonstrate the multi-faceted nature of our business model which we believe uniquely positions us to be successful. We expect to leverage our differentiated, diversified loan portfolio to outperform peers with respect to loan growth which should allow us to continue to expand net interest income. We are focused on taking advantage of market opportunities to prudently deploy excess liquidity into earning assets including core and niche loans and investment securities while maintaining an interest rate sensitive asset portfolio. We are opportunistically evaluating the acquisition market which has been active for both banks and business lines of various sizes. Of course, we remain diligent in our consideration of acquisition targets and intend to be prudent in our decision-making, always seeking to minimize dilution.”
The graphs below illustrate certain financial highlights of the fourth quarter of 2021 as well as historical financial performance. 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/f8ba0f96-41dd-4f04-a9bf-8082be4c0600
SUMMARY OF RESULTS:
BALANCE SHEET
Total asset growth of $2.3 billion in the fourth quarter of 2021 was primarily comprised of a $1.5 billion increase in total loans and a $1.0 billion increase in liquidity management assets partially offset by a $107 million decline in mortgage loans held-for-sale. Total loans, excluding PPP loans, increased by $2.0 billion as core loans increased by $908 million and niche loans increased by $1.1 billion, partially offset by a $524 million decline in PPP loans. See Table 1 for more information. Niche loans included $578 million of growth related to loans acquired in a business combination completed in the fourth quarter of 2021. As of December 31, 2021, virtually all of PPP loan balances originated in 2020 were forgiven with only $74 million remaining on balance sheet of which nearly all are in the forgiveness process. Whereas, as of December 31, 2021, approximately 64% of PPP loan balances originated in 2021 were forgiven, 14% are in the forgiveness review or submission process and 22% have yet to apply for forgiveness.
Total liabilities increased $2.2 billion in the fourth quarter of 2021 resulting primarily from a $2.1 billion increase in total deposits. The increase in deposits was primarily due to a $925 million increase in non-interest bearing deposits and a $692 million increase in money market deposits. The Company's loans to deposits ratio ended the quarter at 82.6%. Management believes in substantially funding the Company's balance sheet with core deposits and utilizes brokered or wholesale funding sources on a limited basis 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 fourth quarter of 2021, net interest income totaled $296.0 million, an increase of $8.5 million as compared to the third quarter of 2021. The $8.5 million increase in net interest income in the fourth quarter of 2021 compared to the third quarter of 2021 was primarily due to earning asset growth and a decline in deposit costs. Additionally, the net interest income growth occurred despite a decline of $7.0 million due to $1.7 million less PPP interest income and $5.3 million less PPP fee income. As of December 31, 2021, the Company had approximately $12.7 million of net PPP loan fees that have yet to be recognized in income.
Net interest margin was 2.54% (2.55% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2021 compared to 2.58% (2.59% on a fully taxable-equivalent basis, non-GAAP) during the third quarter of 2021. The net interest margin decrease as compared to the prior quarter was primarily due to the seven basis point decrease in yield on earning assets and three basis point decrease in the net free funds contribution partially offset by a six basis point decrease in the rate paid on interest-bearing liabilities. The decrease in the rate paid on interest-bearing liabilities in the fourth quarter of 2021 as compared to the third quarter of 2021 is primarily due to a five basis point decrease in the rate paid on interest-bearing deposits primarily due to lower repricing of time deposits. The seven basis point decrease in the yield on earning assets in the fourth quarter of 2021 as compared to the third quarter of 2021 was primarily due to a shift in earning asset mix with increasing levels of lower yielding liquidity management assets.
For more information regarding net interest income, see Tables 4 through 8 in this report.
ASSET QUALITY
The allowance for credit losses totaled $299.7 million as of December 31, 2021, an increase of $3.6 million as compared to $296.1 million as of September 30, 2021. The allowance for credit losses increased primarily due to growth in the loan portfolio and was partially offset by improvement in macroeconomic factors. A provision for credit losses totaling $9.3 million was recorded for the fourth quarter of 2021 as compared to a negative provision of $7.9 million for the third quarter of 2021. 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”) accounting standard requires the Company to estimate expected credit losses over the life of the Company’s financial assets as of the reporting date. 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 each portfolio as of December 31, 2021, September 30, 2021, and June 30, 2021 is shown on Table 12 of this report.
Net charge-offs totaled $6.2 million in the fourth quarter of 2021, as compared to no material net charge-offs in the third quarter of 2021. Net charge-offs as a percentage of average total loans were reported as seven basis points in the fourth quarter of 2021 on an annualized basis compared to zero basis points on an annualized basis in the third quarter of 2021. For more information regarding net charge-offs, see Table 10 in this report.
As of December 31, 2021, $53.7 million of all loans, or 0.2%, were 60 to 89 days past due and $187.4 million, or 0.5%, were 30 to 59 days (or one payment) past due. As of September 30, 2021, $32.9 million of all loans, or 0.1%, were 60 to 89 days past due and $128.8 million, or 0.4%, 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 December 31, 2021. Home equity loans at December 31, 2021 that are current with regard to the contractual terms of the loan agreement represent 98.9% of the total home equity portfolio. Residential real estate loans at December 31, 2021 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.
The ratio of non-performing assets to total assets was 0.16% as of December 31, 2021, compared to 0.22% at September 30, 2021. Non-performing assets totaled $78.7 million at December 31, 2021, compared to $103.9 million at September 30, 2021. Non-performing loans totaled $74.4 million, or 0.21% of total loans, at December 31, 2021 compared to $90.0 million, or 0.27% of total loans, at September 30, 2021. Other real estate owned (“OREO”) totaled $4.3 million at December 31, 2021, a decrease of $9.6 million compared to $13.8 million at September 30, 2021. 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 $1.0 million during the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to increased trust and asset management fees. 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 decreased by $2.7 million in the fourth quarter of 2021 as compared to the third quarter of 2021, primarily due to an $11.1 million decline in production revenue. This decrease was partially offset by a $6.7 million favorable mortgage servicing rights portfolio fair value adjustment as compared to an $888,000 decrease recognized in the prior quarter. Loans originated for sale were $1.3 billion in the fourth quarter of 2021, a decrease of $260 million as compared to the third quarter of 2021. The percentage of origination volume from refinancing activities was 48% in the fourth quarter of 2021 as compared to 44% in the third quarter of 2021. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market.
During the fourth quarter of 2021, the fair value of the mortgage servicing rights portfolio increased primarily due to the capitalization of $15.1 million of servicing rights and a fair value adjustment increase of $6.7 million. These increases were partially offset by a reduction in value of $7.5 million due to payoffs and paydowns of the existing portfolio.
The Company recognized net losses on investment securities of $1.1 million in the fourth quarter of 2021 as compared to net losses of $2.4 million recognized in the third quarter of 2021.
Net operating lease income totaled $14.2 million in the fourth quarter of 2021 as compared to $12.8 million in the prior quarter. The $1.4 million increase in the fourth quarter of 2021 is primarily attributable to increased gains on sale of lease assets as compared to the third quarter of 2021.
Other non-interest income decreased by $4.5 million in the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to a $3.7 million decrease in income on partnership investments.
For more information regarding non-interest income, see Tables 15 and 16 in this report.
NON-INTEREST EXPENSE
Salaries and employee benefits expense decreased by $3.8 million in the fourth quarter of 2021 as compared to the third quarter of 2021. The $3.8 million decline is primarily related to lower incentive compensation expense and lower commissions expense due to declining mortgage production, partially offset by increased staffing expense as the company grows.
Software and equipment expense totaled $23.7 million in the fourth quarter of 2021, an increase of $1.7 million as compared to the third quarter of 2021. The increase in the fourth quarter of 2021 is primarily due to accelerated depreciation related to the reduction in the useful life of a software asset that is planned to be replaced as we continue to make upgrades to our digital customer experience.
The Company recorded a net OREO gain of $641,000 in the fourth quarter of 2021 as compared to a net gain of $1.5 million in the third quarter of 2021. The net gains are primarily attributable to the sale of OREO properties during the third and fourth quarter of 2021.
Miscellaneous expense in the fourth quarter of 2021 increased by $864,000 as compared to the third quarter of 2021. Miscellaneous expense includes ATM expenses, correspondent bank charges, directors fees, telephone, travel and entertainment, corporate insurance, dues and subscriptions, problem loan expenses and lending origination costs that are not deferred.
For more information regarding non-interest expense, see Table 17 in this report.
INCOME TAXES
The Company recorded income tax expense of $38.3 million in the fourth quarter of 2021 compared to $40.6 million in the third quarter of 2021. The effective tax rates were 27.94% in the fourth quarter of 2021 compared to 27.12% in the third quarter of 2021.
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 fourth quarter of 2021, this unit expanded its loan portfolio and its deposit portfolio. The segment’s net interest income increased in the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to growth in earning assets despite a net interest margin decrease primarily due to increased liquidity.
Mortgage banking revenue was $53.1 million for the fourth quarter of 2021, a decrease of $2.7 million as compared to the third quarter of 2021. Service charges on deposit accounts totaled $14.7 million in the fourth quarter of 2021, an increase of $585,000 as compared to the third quarter of 2021 primarily due to higher fees associated with commercial account activity. The Company’s gross commercial and commercial real estate loan pipelines remained strong as of December 31, 2021. Before the impact of scheduled payments and prepayments, gross commercial and commercial real estate loan pipelines were estimated to be approximately $1.1 billion to $1.3 billion at December 31, 2021. When adjusted for the probability of closing, the pipelines were estimated to be approximately $700 million to $800 million at December 31, 2021.
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 $3.6 billion during the fourth quarter of 2021 and average balances increased by $386.3 million as compared to the third quarter of 2021. The increase in average balances in the insurance premium finance receivables portfolios primarily generated a $2.1 million increase in interest income. The Company’s leasing portfolio increased in the fourth quarter of 2021, with its portfolio of assets, including capital leases, loans and equipment on operating leases, at $2.4 billion at the end of the fourth quarter of 2021 as compared to $2.3 billion at the end of third quarter of 2021. Revenues from the Company’s out-sourced administrative services business were $1.8 million in the fourth quarter of 2021, up $487,000 from the third quarter of 2021.
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 totaled $32.5 million in the fourth quarter of 2021, an increase of $1.0 million compared to the third quarter of 2021. Increases in asset management fees were primarily due to favorable equity market performance during the fourth quarter of 2021. At December 31, 2021, the Company’s wealth management subsidiaries had approximately $35.5 billion of assets under administration, which included $5.3 billion of assets owned by the Company and its subsidiary banks, representing a $963.9 million increase from the $34.5 billion of assets under administration at September 30, 2021.
ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS
Acquisitions
On November 15, 2021, the Company completed its previously-announced purchase of loans with a fair value of approximately $582 million, net of allowance for credit losses measured on the acquisition date, from the Allstate Corporation. The loan portfolio was comprised of approximately 1,800 loans to Allstate agents nationally. In addition to acquiring the loans, the Company became the national preferred provider of loans to Allstate agents. In connection with the loan acquisition, a team of Allstate agency lending specialists joined the Company, to augment and expand Wintrust’s existing insurance agency finance business. As the transaction was determined to be a business combination, the Company recorded goodwill of approximately $9.3 million on the purchase.
WINTRUST FINANCIAL CORPORATION
Key Operating Measures
Wintrust’s key operating measures and growth rates for the fourth quarter of 2021, as compared to the third quarter of 2021 (sequential quarter) and fourth quarter of 2020 (linked quarter), are shown in the table below:
% or(1) | % or | ||||||||||||||||||
Three Months Ended | |||||||||||||||||||
(Dollars in thousands, except per share data) | Dec 31, 2021 | Sep 30, 2021 | Dec 31, 2020 | ||||||||||||||||
Net income | $ | 98,757 | $ | 109,137 | $ | 101,204 | (10 | ) | % | (2 | ) | % | |||||||
Pre-tax income, excluding provision for credit losses (non-GAAP) (2) | 146,344 | 141,826 | 135,891 | 3 | 8 | ||||||||||||||
Net income per common share – diluted | 1.58 | 1.77 | 1.63 | (11 | ) | (3 | ) | ||||||||||||
Cash dividends declared per common share | 0.31 | 0.31 | 0.28 | — | 11 | ||||||||||||||
Net revenue (3) | 429,743 | 423,970 | 417,758 | 1 | 3 | ||||||||||||||
Net interest income | 295,976 | 287,496 | 259,397 | 3 | 14 | ||||||||||||||
Net interest margin | 2.54 | % | 2.58 | % | 2.53 | % | (4 | ) | bps | 1 | bps | ||||||||
Net interest margin – fully taxable-equivalent (non-GAAP) (2) | 2.55 | 2.59 | 2.54 | (4 | ) | 1 | |||||||||||||
Net overhead ratio (4) | 1.21 | 1.22 | 1.12 | (1 | ) | 9 | |||||||||||||
Return on average assets | 0.80 | 0.92 | 0.92 | (12 | ) | (12 | ) | ||||||||||||
Return on average common equity | 9.05 | 10.31 | 10.30 | (126 | ) | (125 | ) | ||||||||||||
Return on average tangible common equity (non-GAAP) (2) | 11.04 | 12.62 | 12.95 | (158 | ) | (191 | ) | ||||||||||||
At end of period | |||||||||||||||||||
Total assets | $ | 50,142,143 | $ | 47,832,271 | $ | 45,080,768 | 19 | % | 11 | % | |||||||||
Total loans (5) | 34,789,104 | 33,264,043 | 32,079,073 | 18 | 8 | ||||||||||||||
Total deposits | 42,095,585 | 39,952,558 | 37,092,651 | 21 | 13 | ||||||||||||||
Total shareholders’ equity | 4,498,688 | 4,410,317 | 4,115,995 | 8 | 9 | ||||||||||||||
(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 | Years Ended | ||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Dec 31, | Dec 31, | ||||||||||||||||||||
Selected Financial Condition Data (at end of period): | |||||||||||||||||||||||||||
Total assets | $ | 50,142,143 | $ | 47,832,271 | $ | 46,738,450 | $ | 45,682,202 | $ | 45,080,768 | |||||||||||||||||
Total loans (1) | 34,789,104 | 33,264,043 | 32,911,187 | 33,171,233 | 32,079,073 | ||||||||||||||||||||||
Total deposits | 42,095,585 | 39,952,558 | 38,804,616 | 37,872,652 | 37,092,651 | ||||||||||||||||||||||
Total shareholders’ equity | 4,498,688 | 4,410,317 | 4,339,011 | 4,252,511 | 4,115,995 | ||||||||||||||||||||||
Selected Statements of Income Data: | |||||||||||||||||||||||||||
Net interest income | $ | 295,976 | $ | 287,496 | $ | 279,590 | $ | 261,895 | $ | 259,397 | $ | 1,124,957 | $ | 1,039,907 | |||||||||||||
Net revenue (2) | 429,743 | 423,970 | 408,963 | 448,401 | 417,758 | 1,711,077 | 1,644,096 | ||||||||||||||||||||
Net income | 98,757 | 109,137 | 105,109 | 153,148 | 101,204 | 466,151 | 292,990 | ||||||||||||||||||||
Pre-tax income, excluding provision for credit losses (non-GAAP) (3) | 146,344 | 141,826 | 128,851 | 161,512 | 135,891 | 578,533 | 604,001 | ||||||||||||||||||||
Net income per common share – Basic | 1.61 | 1.79 | 1.72 | 2.57 | 1.64 | 7.69 | 4.72 | ||||||||||||||||||||
Net income per common share – Diluted | 1.58 | 1.77 | 1.70 | 2.54 | 1.63 | 7.58 | 4.68 | ||||||||||||||||||||
Cash dividends declared per common share | 0.31 | 0.31 | 0.31 | 0.31 | 0.28 | 1.24 | 1.12 | ||||||||||||||||||||
Selected Financial Ratios and Other Data: | |||||||||||||||||||||||||||
Performance Ratios: | |||||||||||||||||||||||||||
Net interest margin | 2.54 | % | 2.58 | % | 2.62 | % | 2.53 | % | 2.53 | % | 2.57 | % | 2.72 | % | |||||||||||||
Net interest margin – fully taxable-equivalent (non-GAAP) (3) | 2.55 | 2.59 | 2.63 | 2.54 | 2.54 | 2.58 | 2.73 | ||||||||||||||||||||
Non-interest income to average assets | 1.08 | 1.15 | 1.13 | 1.68 | 1.44 | 1.25 | 1.46 | ||||||||||||||||||||
Non-interest expense to average assets | 2.29 | 2.37 | 2.45 | 2.59 | 2.56 | 2.42 | 2.51 | ||||||||||||||||||||
Net overhead ratio (4) | 1.21 | 1.22 | 1.32 | 0.90 | 1.12 | 1.17 | 1.05 | ||||||||||||||||||||
Return on average assets | 0.80 | 0.92 | 0.92 | 1.38 | 0.92 | 1.00 | 0.71 | ||||||||||||||||||||
Return on average common equity | 9.05 | 10.31 | 10.24 | 15.80 | 10.30 | 11.27 | 7.50 | ||||||||||||||||||||
Return on average tangible common equity (non-GAAP) (3) | 11.04 | 12.62 | 12.62 | 19.49 | 12.95 | 13.83 | 9.54 | ||||||||||||||||||||
Average total assets | $ | 49,118,777 | $ | 47,192,510 | $ | 45,946,751 | $ | 44,988,733 | $ | 43,810,005 | $ | 46,824,051 | $ | 41,371,339 | |||||||||||||
Average total shareholders’ equity | 4,433,953 | 4,343,915 | 4,256,778 | 4,164,890 | 4,050,286 | 4,300,742 | 3,926,688 | ||||||||||||||||||||
Average loans to average deposits ratio | 81.7 | % | 83.8 | % | 86.7 | % | 87.1 | % | 87.9 | % | 84.7 | % | 88.8 | % | |||||||||||||
Period-end loans to deposits ratio | 82.6 | 83.3 | 84.8 | 87.6 | 86.5 | ||||||||||||||||||||||
Common Share Data at end of period: | |||||||||||||||||||||||||||
Market price per common share | $ | 90.82 | $ | 80.37 | $ | 75.63 | $ | 75.80 | $ | 61.09 | |||||||||||||||||
Book value per common share | 71.62 | 70.19 | 68.81 | 67.34 | 65.24 | ||||||||||||||||||||||
Tangible book value per common share (non-GAAP) (3) | 59.64 | 58.32 | 56.92 | 55.42 | 53.23 | ||||||||||||||||||||||
Common shares outstanding | 57,054,091 | 56,956,026 | 57,066,677 | 57,023,273 | 56,769,625 | ||||||||||||||||||||||
Other Data at end of period: | |||||||||||||||||||||||||||
Tier 1 leverage ratio (5) | 8.0 | % | 8.1 | % | 8.2 | % | 8.2 | % | 8.1 | % | |||||||||||||||||
Risk-based capital ratios: | |||||||||||||||||||||||||||
Tier 1 capital ratio (5) | 9.6 | 9.9 | 10.1 | 10.2 | 10.0 | ||||||||||||||||||||||
Common equity tier 1 capital ratio (5) | 8.5 | 8.9 | 9.0 | 9.0 | 8.8 | ||||||||||||||||||||||
Total capital ratio (5) | 11.6 | 12.1 | 12.4 | 12.6 | 12.6 | ||||||||||||||||||||||
Allowance for credit losses (6) | $ | 299,731 | $ | 296,138 | $ | 304,121 | $ | 321,308 | $ | 379,969 | |||||||||||||||||
Allowance for loan and unfunded lending-related commitment losses to total loans | 0.86 | % | 0.89 | % | 0.92 | % | 0.97 | % | 1.18 | % | |||||||||||||||||
Number of: | |||||||||||||||||||||||||||
Bank subsidiaries | 15 | 15 | 15 | 15 | 15 | ||||||||||||||||||||||
Banking offices | 173 | 172 | 172 | 182 | 181 | ||||||||||||||||||||||
(1) Excludes mortgage loans held-for-sale.
(2) Net revenue is 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 average total 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 the allowance for loan losses, the allowance for unfunded lending-related commitments and the allowance for held-to-maturity securities losses.
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||
(In thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 411,150 | $ | 462,244 | $ | 434,957 | $ | 426,325 | $ | 322,415 | ||||||||||
Federal funds sold and securities purchased under resale agreements | 700,055 | 55 | 52 | 52 | 59 | |||||||||||||||
Interest-bearing deposits with banks | 5,372,603 | 5,232,315 | 4,707,415 | 3,348,794 | 4,802,527 | |||||||||||||||
Available-for-sale securities, at fair value | 2,327,793 | 2,373,478 | 2,188,608 | 2,430,749 | 3,055,839 | |||||||||||||||
Held-to-maturity securities, at amortized cost | 2,942,285 | 2,736,722 | 2,498,232 | 2,166,419 | 579,138 | |||||||||||||||
Trading account securities | 1,061 | 1,103 | 2,667 | 951 | 671 | |||||||||||||||
Equity securities with readily determinable fair value | 90,511 | 88,193 | 86,316 | 90,338 | 90,862 | |||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank stock | 135,378 | 135,408 | 136,625 | 135,881 | 135,588 | |||||||||||||||
Brokerage customer receivables | 26,068 | 26,378 | 23,093 | 19,056 | 17,436 | |||||||||||||||
Mortgage loans held-for-sale | 817,912 | 925,312 | 984,994 | 1,260,193 | 1,272,090 | |||||||||||||||
Loans, net of unearned income | 34,789,104 | 33,264,043 | 32,911,187 | 33,171,233 | 32,079,073 | |||||||||||||||
Allowance for loan losses | (247,835 | ) | (248,612 | ) | (261,089 | ) | (277,709 | ) | (319,374 | ) | ||||||||||
Net loans | 34,541,269 | 33,015,431 | 32,650,098 | 32,893,524 | 31,759,699 | |||||||||||||||
Premises, software and equipment, net | 766,405 | 748,872 | 752,375 | 760,522 | 768,808 | |||||||||||||||
Lease investments, net | 242,082 | 243,933 | 219,023 | 238,984 | 242,434 | |||||||||||||||
Accrued interest receivable and other assets | 1,084,115 | 1,166,917 | 1,185,811 | 1,230,362 | 1,351,455 | |||||||||||||||
Trade date securities receivable | — | — | 189,851 | — | — | |||||||||||||||
Goodwill | 655,149 | 645,792 | 646,336 | 646,017 | 645,707 | |||||||||||||||
Other acquisition-related intangible assets | 28,307 | 30,118 | 31,997 | 34,035 | 36,040 | |||||||||||||||
Total assets | $ | 50,142,143 | $ | 47,832,271 | $ | 46,738,450 | $ | 45,682,202 | $ | 45,080,768 | ||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Non-interest-bearing | $ | 14,179,980 | $ | 13,255,417 | $ | 12,796,110 | $ | 12,297,337 | $ | 11,748,455 | ||||||||||
Interest-bearing | 27,915,605 | 26,008,506 | ||||||||||||||||||
