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8-K - FORM 8-K - WINTRUST FINANCIAL CORP | c65625e8vk.htm |
Exhibit 99.1
News Release
FOR IMMEDIATE RELEASE July 27, 2011
FOR MORE INFORMATION CONTACT:
Edward J. Wehmer, President & Chief Executive Officer
David A. Dykstra, Senior Executive Vice President & Chief Operating Officer
(847) 615-4096
Web site address: www.wintrust.com
Edward J. Wehmer, President & Chief Executive Officer
David A. Dykstra, Senior Executive Vice President & Chief Operating Officer
(847) 615-4096
Web site address: www.wintrust.com
WINTRUST FINANCIAL CORPORATION REPORTS SECOND QUARTER 2011
NET INCOME OF $11.8 MILLION AND STRONG LOAN GROWTH
NET INCOME OF $11.8 MILLION AND STRONG LOAN GROWTH
LAKE FOREST, ILLINOIS Wintrust Financial Corporation (Wintrust or the Company) (Nasdaq
WTFC) announced net income of $11.8 million or $0.25 per diluted common share for the quarter ended
June 30, 2011 compared to net income of $13.0 million or $0.25 per diluted common share for the
quarter ended June 30, 2010 and $16.4 million or $0.36 per diluted common share for the first
quarter of 2011.
The Companys total assets of $14.6 billion at June 30, 2011 increased $920.2 million from
June 30, 2010. Total deposits as of June 30, 2011 were $11.3 billion, an increase of $634.5
million from June 30, 2010. Noninterest bearing deposits increased by $443.6 million or 46.5%
since June 30, 2010, while NOW, money market and savings deposits increased $374.5 million or 9.7%
during the same time period. Total loans, including loans held for sale and excluding covered
loans, were $10.1 billion as of June 30, 2011, an increase of $501.9 million over June 30, 2010.
Edward J. Wehmer, President and Chief Executive Officer, commented, Today, we are reporting
net income of $11.8 million for the second quarter of 2011. Core pre-tax earnings, one of our main
internal measurements of profitability, improved by 10% over the second quarter of 2010 and 6% over
the first quarter of 2011. The growth in core pre-tax earnings in 2011 has been hampered by an
industry-wide fall-off in residential real estate loan originations and a significant decline in
the accretable discount recognized as interest income on our purchased life insurance premium
finance portfolio as prepayments declined. The decline in the accretable discount recognized as
interest income on our purchased life insurance premium finance portfolio negatively impacted our
reported net interest margins by 12 basis points on a sequential basis and 10 basis points on a
year-to-date basis.
We are very pleased with growth in our loan portfolio during the second quarter. Loans
outstanding, including mortgages held for sale but excluding covered assets from FDIC-assisted
transactions, grew by $408 million, or 17% on an annualized basis, since March 31, 2011. This loan
growth was funded primarily through deposit growth, keeping our total liquidity levels at June 30,
2011 essentially equal to previous quarter-end levels.
The Companys average loan growth lagged behind period-end balances outstanding in the second
quarter as loan growth substantially accelerated during the second quarter.
Mr. Wehmer noted, Our renewed franchise expansion efforts continued as we acquired River City
Mortgage of Bloomington, Minnesota in April, completed the acquisition of Great Lakes Advisors, a
Chicago-based investment manager, on July 1, 2011 and acquired certain assets, liabilities and
banking operations of First Chicago Bank & Trust in an FDIC-assisted acquisition on July 8, 2011.
These transactions bring additional residential loan origination capacity, assets under management
and new banking markets to Wintrust. River City Mortgage originated approximately $500 million in
mortgage loans in 2010, Great Lakes Advisors has approximately $2.4 billion in assets under
management and First Chicago had seven operating branch banking locations. With the addition of
First Chicago, we are now approaching 100 banking locations with 12 in the city of Chicago.
Commenting on credit quality, Mr. Wehmer noted, Non-performing loans as a percent of total
loans was 1.57%, down from 1.63% at the previous quarter-end, while total non-performing assets to
total assets declined to 1.63% from 1.71% at March 31, 2011. However, the aggregate dollar level
of non-performing loans and non-performing assets remain essentially unchanged from the end of the
first quarter. During the second quarter of 2011, excluding covered loans, the Company recorded a
provision for loan losses of $28.7 million, net charge-offs of $26.0 million and other real-estate
owned operating charges of $6.6 million. Our allowance for credit losses, excluding covered loans,
increased to $119.7 million from $117.1 million at March 31, 2011.
Continuing, Mr. Wehmer noted, We are excited about the prospects for the remainder of 2011
and beyond. The Company had solid internal loan growth in the second quarter of 2011 and our loan
pipelines remain strong. The recent acquisitions of Great Lakes Advisors and First Chicago Bank &
Trust as well as the pending acquisition of Elgin State Bank will provide additional revenues and
earnings and provide great platforms to continue growth. Additionally, as it relates to the net
interest margin, we expect deposit costs to continue to decline and we recently entered into new
interest rate swap agreements relative to certain of our trust preferred debentures which should
further reduce our interest expense by approximately $5 million on an annual basis beginning late
in the third quarter of this year.
In closing, Mr. Wehmer added, The first half of the 20th anniversary year of the Wintrust
organization has set the stage for an exciting second half. Our marketplace is providing unique
growth opportunities for which we believe we have positioned ourselves to take advantage of in a
favorable manner. We will be disciplined in our approach to growth and given proper execution of
our objectives, Wintrust should be uniquely positioned in our marketplace to be the financial
institution of choice and to allow our customers, as we say, to HAVE IT ALL.
2
The Companys results in 2011 have been particularly impacted by the industry-wide fall-off in
residential real estate loan originations as the outstanding balances of mortgages held for sale
and mortgage warehouse lending declined rapidly during the first quarter of 2011. As these balances
stabilized during the second quarter of 2011, growth in the Companys commercial and premium
finance portfolios accelerated. The graph below depicts the delayed effect on quarterly average
balances in the second quarter of 2011 as period-end balances initially declined in 2011 and then
grew in the second quarter of 2011. Growth of average total loans in the third quarter will be
positively impacted by higher beginning balances at the start of the third quarter, the addition of
First Chicago and continued internal loan growth. Total loans include mortgage loans held for sale
and exclude covered loans. (Dollars in billions)
Total Loans
3
The Companys results in 2011 have also been impacted by the level of accretable discount
recognized as interest income on its purchased premium life insurance portfolio as prepayments have
declined. The graph below shows the quarterly discount recognized as interest income on the
purchased life insurance premium finance portfolio as a function of prepayments and accretion for
the past five quarterly periods. (Dollars in millions)
Accretable Discount Recognized as Interest Income
The following tables show the components of the accretable discount recognized as interest
income over the past six quarters on the purchased life insurance premium portfolio. The impact on
the linked quarter, sequential quarter and year-to-date interest income and net interest margin is
also shown.
Accretable Discount Components
(dollars in millions) | Accretion | Prepayments | Total | |||||||||
1Q10 |
$ | 5.4 | $ | 3.7 | $ | 9.1 | ||||||
2Q10 |
4.8 | 6.9 | 11.7 | |||||||||
3Q10 |
5.1 | 3.4 | 8.5 | |||||||||
4Q10 |
6.9 | 7.7 | 14.6 | |||||||||
1Q11 |
6.4 | 2.7 | 9.1 | |||||||||
2Q11 |
3.6 | 1.5 | 5.1 |
Impact of Lower Prepayments on Interest Income and Net Interest Margin
Change in | Change in | Impact on | ||||||||||||
(dollars in millions) | Accretion | Prepayments | Total | Net Interest Margin | ||||||||||
Linked Qtr 2Q11 vs 2Q10
|
$ | (1.2 | ) | $ | (5.4 | ) | $ | (6.6 | ) | (20) bps | ||||
Sequential Qtr 2Q11 vs 1Q11
|
(2.8 | ) | (1.2 | ) | (4.0 | ) | (12) bps | |||||||
YTD 2Q11 vs YTD 2Q10
|
(0.2 | ) | (6.4 | ) | (6.6 | ) | (10) bps |
4
Wintrusts key operating measures and growth rates for the second quarter of 2011, as
compared to the sequential and linked quarters are shown in the table below:
% or (4) | % or | |||||||||||||||||||
basis point (bp) | basis point (bp) | |||||||||||||||||||
Three Months Ended | change | change | ||||||||||||||||||
from | from | |||||||||||||||||||
June 30, | March 31, | June 30, | 1st Quarter | 2nd Quarter | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Net income
|
$ | 11,750 | $ | 16,402 | $ | 13,009 | (28 | )% | (10 | )% | ||||||||||
Net income (loss) per common share diluted
|
$ | 0.25 | $ | 0.36 | $ | 0.25 | (31 | )% | | % | ||||||||||
Core pre-tax earnings (2)
|
$ | 52,751 | $ | 49,544 | $ | 47,912 | 6 | % | 10 | % | ||||||||||
Net revenue (1)
|
$ | 145,358 | $ | 150,501 | $ | 154,750 | (3 | )% | (6 | )% | ||||||||||
Net interest income
|
$ | 108,706 | $ | 109,614 | $ | 104,314 | (1 | )% | 4 | % | ||||||||||
Net interest margin (2)
|
3.40 | % | 3.48 | % | 3.43 | % | (8 | ) bp | (3 | ) bp | ||||||||||
Net overhead ratio (3)
|
1.72 | % | 1.66 | % | 1.26 | % | 6 | bp | 46 | bp | ||||||||||
Return on average assets
|
0.33 | % | 0.47 | % | 0.39 | % | (14 | ) bp | (6 | ) bp | ||||||||||
Return on average common equity
|
3.05 | % | 4.49 | % | 2.98 | % | (144 | ) bp | 7 | bp | ||||||||||
At end of period |
||||||||||||||||||||
Total assets
|
$ | 14,615,897 | $ | 14,094,294 | $ | 13,708,560 | 15 | % | 7 | % | ||||||||||
Total loans, excluding loans held-for-sale, excluding covered loans
|
$ | 9,925,077 | $ | 9,561,802 | $ | 9,324,163 | 15 | % | 6 | % | ||||||||||
Total loans, including loans held-for-sale, excluding covered loans
|
$ | 10,064,041 | $ | 9,656,288 | $ | 9,562,144 | 17 | % | 5 | % | ||||||||||
Total deposits
|
$ | 11,259,260 | $ | 10,915,169 | $ | 10,624,742 | 13 | % | 6 | % | ||||||||||
Total shareholders equity
|
$ | 1,473,386 | $ | 1,453,253 | $ | 1,384,736 | 6 | % | 6 | % |
(1) | Net revenue is net interest income plus non-interest income. | |
(2) | See Supplemental Financial Measures/Ratios for additional information on this performance measure/ratio. | |
(3) | The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that periods average total assets. A lower ratio indicates a higher degree of efficiency. | |
(4) | Period-end balance sheet percentage changes are annualized. |
Certain returns, yields, performance ratios, or quarterly growth rates are annualized
in this presentation to represent an annual time period. This is done for analytical purposes to
better discern for decision-making purposes underlying performance trends when compared to
full-year or year-over-year amounts. For example, a 5% growth rate for a quarter would represent
an annualized 20% growth rate. Additional supplemental financial information showing quarterly
trends can be found on the Companys web site at www.wintrust.com by choosing Financial Reports
under the Investor Relations heading, and then choosing Supplemental Financial Info.
5
Items Impacting Comparative Financial Results: Acquisitions and Capital
Acquisitions
On April 13, 2011, the Company announced the acquisition of certain assets and the
assumption of certain liabilities of the mortgage banking business of River City Mortgage, LLC
(River City) of Bloomington, Minnesota. With offices in Minnesota, Nebraska and North Dakota,
River City originated nearly $500 million in mortgage loans in 2010.
On March 25, 2011, the Company announced that its wholly-owned subsidiary bank, Advantage
National Bank Group (Advantage) acquired certain assets and liabilities and the banking
operations of The Bank of Commerce (TBOC) in an FDIC-assisted transaction. TBOC operated one
location in Wood Dale, Illlinois and had approximately $163 million in total assets and $161
million in total deposits as of December 31, 2010. Advantage subsequently changed its name to
Schaumburg Bank & Trust, N.A. (Schaumburg) and acquired substantially all of TBOCs assets at a
discount of approximately 14% and assumed all of the non-brokered deposits at a premium of
approximately 0.1%.
On February 4, 2011, the Company announced that its wholly-owned subsidiary bank, Northbrook
Bank & Trust Company (Northbrook), acquired certain assets and liabilities and the banking
operations of Community First Bank-Chicago (CFBC) in an FDIC-assisted transaction. CFBC operated
one location in Chicago and had approximately $51.1 million in total assets and $49.5 million in
total deposits as of December 31, 2010. Northbrook acquired substantially all of CFBCs assets at
a discount of approximately 8% and assumed all of the non-brokered deposits at a premium of
approximately 0.5%.
On February 3, 2011, the Company announced the acquisition of certain assets and the
assumption of certain liabilities of the mortgage banking business of Woodfield Planning
Corporation (Woodfield) of Rolling Meadows, Illinois. With offices in Rolling Meadows, Illinois
and Crystal Lake, Illinois, Woodfield originated approximately $180 million in mortgage loans in
2010.
On August 17, 2010, the Company announced that its wholly-owned subsidiary bank, Wheaton Bank
& Trust Company (Wheaton) signed a Branch Purchase and Assumption Agreement whereby it agreed to
acquire a branch of First National Bank of Brookfield located in Naperville, Illinois. The
transaction closed on October 22, 2010 and the acquired operations are operating as Naperville Bank
& Trust. Through this transaction, Wheaton acquired approximately $23 million of deposits,
approximately $11 million of performing loans, the property, bank facility and various other
assets.
6
On August 6, 2010, the Company announced that its wholly-owned subsidiary bank, Northbrook, in
an FDIC-assisted transaction, had acquired certain assets and liabilities and the banking
operations of Ravenswood Bank (Ravenswood). Ravenswood operated one location in Chicago, Illinois
and one in Mount Prospect, Illinois.
On April 23, 2010, the Company announced that Northbrook and Wheaton, in two FDIC-assisted
transactions, had acquired certain assets and liabilities and the banking operations of Lincoln
Park Savings Bank (Lincoln Park) and Wheatland Bank (Wheatland), respectively. Lincoln Park
operated four locations in Chicago, Illinois. Wheatland had one location in Naperville, Illinois.
In summary, in the FDIC-assisted transactions:
Schaumburg assumed approximately $161 million of the outstanding deposits and approximately
$163 million of assets of TBOC, prior to purchase accounting adjustments. A bargain purchase gain
of $8.6 million was recognized on this transaction.
Northbrook assumed approximately $50 million of the outstanding deposits and approximately
$51 million of assets of CFBC, prior to purchase accounting adjustments. A bargain purchase gain
of $2.0 million was recognized on this transaction.
Northbrook assumed approximately $120 million of the outstanding deposits and approximately
$188 million of assets of Ravenswood, prior to purchase accounting adjustments. A bargain purchase
gain of $6.8 million was recognized on this transaction.
Northbrook assumed approximately $160 million of the outstanding deposits and approximately
$170 million of assets of Lincoln Park, prior to purchase accounting adjustments. A bargain
purchase gain of $4.2 million was recognized on this transaction.
Wheaton assumed approximately $400 million of the outstanding deposits and approximately
$370 million of assets of Wheatland, prior to purchase accounting adjustments. A bargain purchase
gain of $22.3 million was recognized on this transaction.
Loans comprise the majority of the assets acquired in the FDIC-assisted transactions and are
subject to loss sharing agreements with the FDIC where the FDIC has agreed to reimburse the Company
for 80% of losses incurred on the purchased loans. We refer to the loans subject to these
loss-sharing agreements as covered loans. Covered assets include covered loans, covered OREO and
certain other covered assets. The agreements with the FDIC require that the Company follow certain
servicing procedures or risk losing FDIC reimbursement of losses related to covered assets.
7
Wintrust Financial Corporate Headquarters
On June 8, 2011, the Company purchased a 277,000 square foot 11-story office building
complex at 9700 W. Higgins Road, Rosemont, Illinois for approximately $22.5 million. The building
will serve as the Companys corporate and mortgage division headquarters and initially house
approximately 400 employees. Currently, the building is approximately 50% occupied through lease
tenants. The Company will begin to occupy the entire remaining area of the building in December
2011.
Capital Ratios
As of June 30, 2011, the Companys estimated capital ratios were 13.5% for total
risk-based capital, 12.3% for tier 1 risk-based capital and 10.3% for leverage, well above the well
capitalized guidelines. Additionally, the Companys tangible common equity ratio was 7.9% at June
30, 2011.
Financial Performance Overview Second Quarter of 2011
For the second quarter of 2011, net interest income totaled $108.7 million, an increase
of $4.4 million as compared to the second quarter of 2010 and a decrease of $908,000 as compared to
the first quarter of 2011. Average earning assets for the second quarter of 2011 increased by
$656.1 million compared to the second quarter of 2010. Average earning asset growth over the past
12 months was primarily a result of the $503.8 million increase in average loans, $208.1 million of
average covered loan growth from the FDIC-assisted bank acquisitions partially offset by a $55.8
million decrease in average liquidity management and other earning assets. Growth in the life
insurance premium finance portfolio of $292.5 million and growth in the commercial and industrial
portfolio of $114.0 million accounted for the bulk of the total average loan growth over the past
12 months. The average earning asset growth of $656.1 million over the past 12 months was primarily
funded by a $374.8 million increase in the average balances of savings, NOW, MMA and Wealth
Management deposits, and an increase in the average balance of net free funds of $400.4 million.
The net interest margin for the second quarter of 2011 was 3.40% compared to 3.48% in the
first quarter of 2011 and 3.43% in the second quarter of 2010. The eight basis point decrease in
net interest margin in the second quarter of 2011 compared to the first quarter of 2011 resulted
from a $4.0 million decrease in accretable discount recognized as interest income on the purchased
life insurance premium portfolio as prepayments declined, lowering interest income recognized on
prepayments and reducing accretion on the remaining balance of the pool as the estimated remaining
life extended. Absent this decline in the second quarter the net interest margin would have been
3.52%. The impact of the decline was partially offset by continued lower repricing on
interest-bearing deposits in
8
the second quarter which benefited the net interest margin. The cost of interest-bearing
deposits declined seven basis points in the second quarter. The Company continues to see a
beneficial shift in its deposit mix as average non-interest bearing deposits comprised 12.4% of
total average deposits in the second quarter of 2011 compared to 11.7% in the first quarter of
2011.
The net interest margin decreased three basis points in the second quarter of 2011 compared to
the second quarter of 2010. The driver of this decline was a $6.6 million decrease in accretable
discount recognized as interest income on the purchased life insurance premium portfolio as
prepayments declined, lowering interest income recognized on prepayments and reducing accretion on
the remaining balance of the pool as the estimated remaining life extended. Absent this decline,
the net interest margin in the second quarter would have been 3.60%. The cost of interest-bearing
deposits declined 41 basis points from the second quarter of 2010 to the second quarter of 2011.
Non-interest income totaled $36.7 million in the second quarter of 2011, decreasing $13.8
million, or 27%, compared to the second quarter of 2010 and decreasing $4.2 million, or 10%,
compared to the first quarter of 2011. The change was primarily attributable to the lower bargain
purchase gains recorded during the current period relating to the FDIC-assisted transactions than
during the comparable periods. Mortgage banking revenue increased $4.8 million when
compared to the second quarter of 2010 and increased $1.2 million when compared to the first
quarter of 2011. The increase in the current quarter as compared to the second quarter of 2010
resulted primarily from estimations of fewer loss indemnification requests from investors. Loans
sold to the secondary market were $459 million in the second quarter of 2011 compared to $732
million in the second quarter of 2010 and $562 million in the first quarter of 2011 (see
Non-Interest Income section later in this document for further detail).
Non-interest expense totaled $97.2 million in the second quarter of 2011, increasing $4.5
million, or 5%, compared to the second quarter of 2010 and decreasing $903,000 compared to the
first quarter of 2011. The increase compared to the second quarter of 2010 was primarily
attributable to a $2.4 million increase in salaries and employee benefits. The increase in
salaries and employee benefits was attributable to a $3.3 million increase in salaries caused by
the addition of employees from the FDIC-assisted transactions and larger staffing related to
organic Company growth, and a $1.3 million increase from employee benefits (primarily related to
health plans and payroll taxes), partially offset by a $2.2 million decrease in bonus and
commissions attributable to variable pay based revenue.
Financial Performance Overview First Six Months of 2011
The net interest margin for the first six months of 2011 was 3.44%, compared to 3.41% in
the first six months of 2010. Absent the negative impact described earlier from lower accretable
discount recognized as interest
9
income on the purchased life insurance premium portfolio, the 2011 year-to-date net interest
margin would have been 3.54%. The impact of the decline was partially offset by continued lower
repricing on interest-bearing deposits over the past 12 months. Average earning assets for the
first six months of 2011 increased by $961.1 million compared to the first six months of 2010. This
average earning asset growth was primarily a result of the $600.9 million increase in average
loans, $267.0 million of average covered loan growth from the FDIC-assisted bank acquisitions and a
$93.2 million increase in liquidity management and other earning assets. Growth in the
life insurance premium finance portfolio of $309.7 million and growth in the commercial and
industrial portfolio of $96.8 million accounted for the bulk of the total average loan growth over
the past 12 months. The average earning asset growth of $961.1 million over the past 12 months was
primarily funded by a $404.6 million increase in the average balances of savings, NOW, MMA and
Wealth Management deposits and an increase in the average balance of net free funds of $466.2
million.
Non-interest income totaled $77.5 million in the first six months of 2011, decreasing
$15.5 million, or 17%, compared to the first six months of 2010. The change was primarily
attributable to lower bargain purchase gains recorded during the current period relating to the
FDIC-assisted transactions than during the comparable period. Mortgage banking revenue
increased $6.7 million when compared to the first six months of 2010. This increase resulted
primarily from estimations of fewer loss indemnification requests from investors. Mortgages
originated for sale totaled over $1.0 billion in the first six months of 2011 compared to $1.4
billion in the first six months of 2010.
Non-interest expense totaled $195.3 million in the first six months of 2011, increasing $18.7
million, or 11%, compared to the first six months of 2010. The increase compared to the first six
months of 2010 was primarily attributable to a $9.5 million increase in salaries and employee
benefits. The increase in salaries and employee benefits was attributable to a $7.3 million
increase in salaries caused by the addition of employees from the FDIC-assisted transactions and
larger staffing related to organic Company growth, and a $3.3 million increase from employee
benefits (primarily related to health plans and payroll taxes), partially offset by a $1.2 million
decrease in bonus and commissions attributable to variable pay based revenue. Additionally, OREO
related expenses increased $5.2 million and professional fees increased $1.0 million, primarily
related to increased legal costs related to non-performing assets and recent acquisitions.
The Companys effective tax rate increased to 38.8% for the first six months of 2011, up from
37.3% in the first six months of 2010. This increase is primarily attributable to two items. The
increased Illinois corporate tax rate on 2011 earnings increased our total tax expense by
approximately $320,000. Additionally, the Company
10
recorded approximately $300,000 of additional tax expense in the first quarter due to a
one-time adjustment to change the recorded value of its deferred tax liabilities as of the
beginning of 2011 as a result of the Illinois corporate tax rate change that was effective on
January 1, 2011.
Financial Performance Overview Credit Quality
Non-performing loans, excluding covered loans, totaled $156.1 million, or 1.57% of total
loans, at June 30, 2011, compared to $155.4 million, or 1.63% of total loans, at March 31, 2011 and
$135.4 million, or 1.45% of total loans, at June 30, 2010. OREO, excluding covered OREO, of $82.8
million at June 30, 2011 decreased $2.5 million compared to $85.3 million at March 31, 2011 and
decreased $3.6 million compared to $86.4 million at June 30, 2010. Management continues to work
with certain borrowers to restructure performing loans. These actions help these borrowers
maintain their homes or businesses and keep these loans in an accruing status for the Company. As
of June 30, 2011, a total of $103.0 million of outstanding loan balances qualified as restructured
loans, with $85.8 million of these modified loans in an accruing status.
The provision for credit losses totaled $29.2 million for the second quarter of 2011 compared
to $25.3 million for the first quarter of 2011 and $41.3 million in the second quarter of 2010.
Net charge-offs as a percentage of loans, excluding covered loans, for the second quarter of 2011
totaled 106 basis points on an annualized basis compared to 163 basis points on an annualized basis
in the second quarter of 2010 and 104 basis points on an annualized basis in the first quarter of
2011.
Excluding the allowance for covered loan losses, the allowance for credit losses at June 30,
2011 totaled $119.7 million, or 1.21% of total loans, compared to $117.1 million, or 1.22% of total
loans, at March 31, 2011 and $108.7 million, or 1.17% of total loans, at June 30, 2010.
Acquisitions Subsequent to Quarter-End
On July 8, 2011, the Company announced that its wholly-owned subsidiary bank, Northbrook,
acquired certain assets and liabilities and the banking operations of First Chicago Bank & Trust
(First Chicago) in an FDIC-assisted transaction. First Chicago operated seven locations in
Illinois: three in Chicago, one each in Bloomingdale, Itasca, Norridge and Park Ridge, and had
approximately $959 million in total assets and $887 million in total deposits as of March 31, 2011.
Northbrook acquired substantially all of First Chicagos assets at a discount of approximately 12%
and assumed all of the non-brokered deposits at a premium of approximately 0.5%. Based upon
initial calculations, the Company anticipates it will record a bargain purchase gain of at least
$21 million in the third quarter of 2011 relating to the First Chicago transaction.
11
On July 1, 2011, the Company announced the completion of its previously announced acquisition
of Great Lakes Advisors, Inc. (Great Lakes), a Chicago-based investment manager with
approximately $2.4 billion in assets under management. Great Lakes merged with Wintrusts existing
asset management business, Wintrust Capital Management, LLC and operates as Great Lakes Advisors,
LLC, a Wintrust Wealth Management Company and will have assets under management of nearly $4.5
billion.
On July 26, 2011, the Company announced the signing of a definitive agreement to acquire Elgin
State Bancorp, Inc. (ESBI). ESBI is the parent company of Elgin State Bank, which operates three
banking locations in Elgin, Illinois. As of March 31, 2011, Elgin State Bank had approximately
$288 million in assets and $259 million in deposits.
12
WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Selected Financial Condition Data
(at end of period): |
||||||||||||||||
Total assets |
$ | 14,615,897 | $ | 13,708,560 | ||||||||||||
Total loans, excluding covered loans |
9,925,077 | 9,324,163 | ||||||||||||||
Total deposits |
11,259,260 | 10,624,742 | ||||||||||||||
Junior subordinated debentures |
249,493 | 249,493 | ||||||||||||||
Total shareholders equity |
1,473,386 | 1,384,736 | ||||||||||||||
Selected Statements of Income Data: |
||||||||||||||||
Net interest income |
$ | 108,706 | $ | 104,314 | $ | 218,320 | $ | 200,179 | ||||||||
Net revenue (1) |
145,358 | 154,750 | 295,859 | 293,223 | ||||||||||||
Core pre-tax earnings (2) |
52,751 | 47,912 | 102,295 | 89,990 | ||||||||||||
Net income |
11,750 | 13,009 | 28,152 | 29,027 | ||||||||||||
Net income (loss) per common share
Basic |
$ | 0.31 | $ | 0.26 | $ | 0.75 | $ | 0.67 | ||||||||
Net income (loss) per common share
Diluted |
$ | 0.25 | $ | 0.25 | $ | 0.60 | $ | 0.64 | ||||||||
Selected Financial Ratios and Other
Data: |
||||||||||||||||
Performance Ratios: |
||||||||||||||||
Net interest margin (2) |
3.40 | % | 3.43 | % | 3.44 | % | 3.41 | % | ||||||||
Non-interest income to average
assets |
1.04 | % | 1.51 | % | 1.11 | % | 1.44 | % | ||||||||
Non-interest expense to average
assets |
2.76 | % | 2.78 | % | 2.80 | % | 2.74 | % | ||||||||
Net overhead ratio (3) |
1.72 | % | 1.26 | % | 1.69 | % | 1.30 | % | ||||||||
Efficiency ratio (2) (4) |
67.22 | % | 59.72 | % | 66.11 | % | 60.13 | % | ||||||||
Return on average assets |
0.33 | % | 0.39 | % | 0.40 | % | 0.45 | % | ||||||||
Return on average common equity |
3.05 | % | 2.98 | % | 3.76 | % | 3.86 | % | ||||||||
Average total assets |
$ | 14,105,136 | $ | 13,390,537 | $ | 14,059,339 | $ | 12,993,056 | ||||||||
Average total shareholders equity |
1,460,071 | 1,371,689 | 1,449,031 | 1,284,460 | ||||||||||||
Average loans to average deposits
ratio (excluding covered loans) |
90.9 | % | 91.0 | % | 91.1 | % | 92.7 | % | ||||||||
Average loans to average deposits
ratio (including covered loans) |
94.8 | % | 93.0 | % | 94.5 | % | 93.8 | % | ||||||||
Common Share Data at end of period: |
||||||||||||||||
Market price per common share |
$ | 32.18 | $ | 33.34 | ||||||||||||
Book value per common share
(2) |
$ | 33.63 | $ | 35.33 | ||||||||||||
Tangible common book value per
share (2) |
$ | 26.67 | $ | 25.96 | ||||||||||||
Common shares outstanding |
34,988,125 | 31,084,298 | ||||||||||||||
Other Data at end of
period:(9) |
||||||||||||||||
Leverage Ratio (5) |
10.3 | % | 10.2 | % | ||||||||||||
Tier 1 capital to risk-weighted
assets (5) |
12.3 | % | 13.0 | % | ||||||||||||
Total capital to risk-weighted
assets (5) |
13.5 | % | 14.3 | % | ||||||||||||
Tangible common equity ratio (TCE)
(2)(8) |
7.9 | % | 6.0 | % | ||||||||||||
Allowance for credit losses
(6) |
$ | 119,697 | $ | 108,716 | ||||||||||||
Credit discounts on purchased
premium finance receivables life
insurance (7) |
$ | 17,458 | $ | 28,217 | ||||||||||||
Non-performing loans |
$ | 156,072 | $ | 135,401 | ||||||||||||
Allowance for credit losses to
total loans (6) |
1.21 | % | 1.17 | % | ||||||||||||
Non-performing loans to total loans |
1.57 | % | 1.45 | % | ||||||||||||
Number of: |
||||||||||||||||
Bank subsidiaries |
15 | 15 | ||||||||||||||
Non-bank subsidiaries |
7 | 8 | ||||||||||||||
Banking offices |
88 | 85 | ||||||||||||||
(1) | Net revenue includes net interest income and non-interest income | |
(2) | See Supplemental Financial Measures/Ratios for additional information on this performance measure/ratio. | |
(3) | The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that periods total average assets. A lower ratio indicates a higher degree of efficiency. | |
(4) | The efficiency ratio is calculated by dividing total non-interest expense by tax-equivalent net revenue (less securities gains or losses).A lower ratio indicates more efficient revenue generation. | |
(5) | Capital ratios for current quarter-end are estimated. | |
(6) | The allowance for credit losses includes both the allowance for loan losses and the allowance for unfunded lending-related commitments, but excludes the allowance for covered loan losses. | |
(7) | Represents the credit discounts on purchased life insurance premium finance loans. | |
(8) | Total shareholders equity minus preferred stock and total intangible assets divided by total assets minus total intangible assets. | |
(9) | Asset quality ratios exclude covered loans. |
13
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited) | (Unaudited) | |||||||||||
June 30, | December 31, | June 30, | ||||||||||
(In thousands) | 2011 | 2010 | 2010 | |||||||||
Assets |
||||||||||||
Cash and due from banks |
$ | 140,434 | $ | 153,690 | $ | 123,712 | ||||||
Federal funds sold and securities purchased under resale agreements |
43,634 | 18,890 | 28,664 | |||||||||
Interest-bearing deposits with other banks |
990,308 | 865,575 | 1,110,123 | |||||||||
Available-for-sale securities, at fair value |
1,456,426 | 1,496,302 | 1,418,035 | |||||||||
Trading account securities |
509 | 4,879 | 38,261 | |||||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost |
86,761 | 82,407 | 79,300 | |||||||||
Brokerage customer receivables |
29,736 | 24,549 | 24,291 | |||||||||
Mortgage loans held-for-sale, at fair value |
133,083 | 356,662 | 222,703 | |||||||||
Mortgage loans held-for-sale, at lower of cost or market |
5,881 | 14,785 | 15,278 | |||||||||
Loans, net of unearned income, excluding covered loans |
9,925,077 | 9,599,886 | 9,324,163 | |||||||||
Covered loans |
408,669 | 334,353 | 275,563 | |||||||||
Total loans |
10,333,746 | 9,934,239 | 9,599,726 | |||||||||
Less: Allowance for loan losses |
117,362 | 113,903 | 106,547 | |||||||||
Less: Allowance for covered loan losses |
7,443 | | | |||||||||
Net loans |
10,208,941 | 9,820,336 | 9,493,179 | |||||||||
Premises and equipment, net |
403,577 | 363,696 | 346,806 | |||||||||
FDIC indemnification asset |
110,049 | 118,182 | 114,102 | |||||||||
Accrued interest receivable and other assets |
389,634 | 366,438 | 374,172 | |||||||||
Trade date securities receivable |
322,091 | | 28,634 | |||||||||
Goodwill |
283,301 | 281,190 | 278,025 | |||||||||
Other intangible assets |
11,532 | 12,575 | 13,275 | |||||||||
Total assets |
$ | 14,615,897 | $ | 13,980,156 | $ | 13,708,560 | ||||||
Liabilities and Shareholders Equity |
||||||||||||
Deposits: |
||||||||||||
Non-interest bearing |
$ | 1,397,433 | $ | 1,201,194 | $ | 953,814 | ||||||
Interest bearing |
9,861,827 | 9,602,479 | 9,670,928 | |||||||||
Total deposits |
11,259,260 | 10,803,673 | 10,624,742 | |||||||||
Notes payable |
1,000 | 1,000 | 1,000 | |||||||||
Federal Home Loan Bank advances |
423,500 | 423,500 | 415,571 | |||||||||
Other borrowings |
432,706 | 260,620 | 218,424 | |||||||||
Secured borrowings owed to securitization investors |
600,000 | 600,000 | 600,000 | |||||||||
Subordinated notes |
40,000 | 50,000 | 55,000 | |||||||||
Junior subordinated debentures |
249,493 | 249,493 | 249,493 | |||||||||
Trade date securities payable |
2,243 | | 200 | |||||||||
Accrued interest payable and other liabilities |
134,309 | 155,321 | 159,394 | |||||||||
Total liabilities |
13,142,511 | 12,543,607 | 12,323,824 | |||||||||
Shareholders Equity: |
||||||||||||
Preferred stock |
49,704 | 49,640 | 286,460 | |||||||||
Common stock |
34,988 | 34,864 | 31,084 | |||||||||
Surplus |
969,315 | 965,203 | 680,261 | |||||||||
Treasury stock |
(50 | ) | | (4 | ) | |||||||
Retained earnings |
415,297 | 392,354 | 381,969 | |||||||||
Accumulated other comprehensive income (loss) |
4,132 | (5,512 | ) | 4,966 | ||||||||
Total shareholders equity |
1,473,386 | 1,436,549 | 1,384,736 | |||||||||
Total liabilities
and shareholders
equity |
$ | 14,615,897 | $ | 13,980,156 | $ | 13,708,560 | ||||||
14
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(In thousands, except per share data) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest income |
||||||||||||||||
Interest and fees on loans |
$ | 132,338 | $ | 135,800 | $ | 268,881 | $ | 265,342 | ||||||||
Interest bearing deposits with banks |
870 | 1,215 | 1,806 | 2,489 | ||||||||||||
Federal funds sold and securities purchased under resale agreements |
23 | 34 | 55 | 83 | ||||||||||||
Securities |
11,438 | 11,218 | 20,978 | 22,230 | ||||||||||||
Trading account securities |
10 | 343 | 23 | 364 | ||||||||||||
Federal Home Loan Bank and Federal Reserve Bank stock |
572 | 472 | 1,122 | 931 | ||||||||||||
Brokerage customer receivables |
194 | 166 | 360 | 304 | ||||||||||||
Total interest income |
145,445 | 149,248 | 293,225 | 291,743 | ||||||||||||
Interest expense |
||||||||||||||||
Interest on deposits |
22,404 | 31,626 | 46,360 | 64,838 | ||||||||||||
Interest on Federal Home Loan Bank advances |
4,010 | 4,094 | 7,968 | 8,440 | ||||||||||||
Interest on notes payable and other borrowings |
2,715 | 1,439 | 5,345 | 2,901 | ||||||||||||
Interest on secured borrowings owed to securitization investors |
2,994 | 3,115 | 6,034 | 6,109 | ||||||||||||
Interest on subordinated notes |
194 | 256 | 406 | 497 | ||||||||||||
Interest on junior subordinated debentures |
4,422 | 4,404 | 8,792 | 8,779 | ||||||||||||
Total interest expense |
36,739 | 44,934 | 74,905 | 91,564 | ||||||||||||
Net interest income |
108,706 | 104,314 | 218,320 | 200,179 | ||||||||||||
Provision for
credit losses |
29,187 | 41,297 | 54,531 | 70,342 | ||||||||||||
Net interest income
after provision for
credit losses |
79,519 | 63,017 | 163,789 | 129,837 | ||||||||||||
Non-interest income |
||||||||||||||||
Wealth management |
10,601 | 9,193 | 20,837 | 17,860 | ||||||||||||
Mortgage banking |
12,817 | 7,985 | 24,448 | 17,713 | ||||||||||||
Service charges on deposit accounts |
3,594 | 3,371 | 6,905 | 6,703 | ||||||||||||
Gains on available-for-sale securities, net |
1,152 | 46 | 1,258 | 438 | ||||||||||||
Gain on bargain purchases |
746 | 26,494 | 10,584 | 37,388 | ||||||||||||
Trading (losses) gains |
(30 | ) | (1,617 | ) | (470 | ) | 4,344 | |||||||||
Other |
7,772 | 4,964 | 13,977 | 8,598 | ||||||||||||
Total non-interest income |
36,652 | 50,436 | 77,539 | 93,044 | ||||||||||||
Non-interest expense |
||||||||||||||||
Salaries and employee benefits |
53,079 | 50,649 | 109,178 | 99,721 | ||||||||||||
Equipment |
4,409 | 4,046 | 8,673 | 7,941 | ||||||||||||
Occupancy, net |
6,772 | 6,033 | 13,277 | 12,263 | ||||||||||||
Data processing |
3,147 | 3,669 | 6,670 | 7,076 | ||||||||||||
Advertising and marketing |
1,440 | 1,470 | 3,054 | 2,784 | ||||||||||||
Professional fees |
4,533 | 3,957 | 8,079 | 7,064 | ||||||||||||
Amortization of other intangible assets |
704 | 674 | 1,393 | 1,319 | ||||||||||||
FDIC insurance |
3,281 | 5,005 | 7,799 | 8,814 | ||||||||||||
OREO expenses, net |
6,577 | 5,843 | 12,385 | 7,181 | ||||||||||||
Other |
13,264 | 11,317 | 24,807 | 22,438 | ||||||||||||
Total non-interest expense |
97,206 | 92,663 | 195,315 | 176,601 | ||||||||||||
Income before taxes |
18,965 | 20,790 | 46,013 | 46,280 | ||||||||||||
Income tax expense |
7,215 | 7,781 | 17,861 | 17,253 | ||||||||||||
Net income |
$ | 11,750 | $ | 13,009 | $ | 28,152 | $ | 29,027 | ||||||||
Preferred stock
dividends and
discount accretion |
$ | 1,033 | $ | 4,943 | $ | 2,064 | $ | 9,887 | ||||||||
Net income
applicable to
common shares |
$ | 10,717 | $ | 8,066 | $ | 26,088 | $ | 19,140 | ||||||||
Net income per
common share -
Basic |
$ | 0.31 | $ | 0.26 | $ | 0.75 | $ | 0.67 | ||||||||
Net income per
common share -
Diluted |
$ | 0.25 | $ | 0.25 | $ | 0.60 | $ | 0.64 | ||||||||
Cash dividends
declared per common
share |
$ | | $ | | $ | 0.09 | $ | 0.09 | ||||||||
Weighted average
common shares
outstanding |
34,971 | 31,074 | 34,950 | 28,522 | ||||||||||||
Dilutive potential
common shares |
8,438 | 1,267 | 8,437 | 1,203 | ||||||||||||
Average common
shares and dilutive
common shares |
43,409 | 32,341 | 43,387 | 29,725 | ||||||||||||
15
SUPPLEMENTAL FINANCIAL MEASURES/RATIOS
The accounting and reporting policies of Wintrust conform to generally accepted accounting principles (GAAP) in the United States and
prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Companys performance. These include taxable-equivalent net interest income
(including its individual components), net interest margin (including its individual components), the efficiency ratio, tangible common equity ratio, tangible common book value per share and core pre-tax earnings. Management believes that these measures
and ratios provide users of the Companys financial information a more meaningful view of the performance of the interest-earning assets and
interest-bearing liabilities and of the Companys operating efficiency. Other financial holding companies may define or calculate these measures and ratios differently.
Management reviews yields on certain asset categories and the net interest margin of the Company and
its banking subsidiaries on a fully taxable-equivalent (FTE) basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt
interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources.
Net interest income on a FTE basis is also used in the calculation of the Companys 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 Companys equity. Core pre-tax earnings is a significant metric in assessing the Companys core operating performance.
Core pre-tax earnings is adjusted to exclude the provision for credit losses and certain significant items.
16
The following table presents a reconciliation of certain non-GAAP performance measures and ratios used by the Company to evaluate and measure the
Companys performance to the most directly comparable GAAP financial measures for the last 5 quarters:
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
(Dollars and shares | June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | ||||||||||||||||||||||
in thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | 2011 | 2010 | |||||||||||||||||||||
Calculation of Net
Interest Margin and
Efficiency Ratio |
||||||||||||||||||||||||||||
(A) Interest Income
(GAAP) |
$ | 145,445 | $ | 147,780 | $ | 153,962 | $ | 147,401 | $ | 149,248 | $ | 293,225 | $ | 291,743 | ||||||||||||||
Taxable-equivalent
adjustment: |
||||||||||||||||||||||||||||
- Loans |
110 | 116 | 79 | 85 | 90 | 226 | 169 | |||||||||||||||||||||
- Liquidity
management assets |
296 | 295 | 326 | 324 | 366 | 591 | 727 | |||||||||||||||||||||
- Other earning
assets |
2 | 3 | | 7 | 5 | 5 | 10 | |||||||||||||||||||||
Interest Income -
FTE |
$ | 145,853 | $ | 148,194 | $ | 154,367 | $ | 147,817 | $ | 149,709 | $ | 294,047 | $ | 292,649 | ||||||||||||||
(B) Interest
Expense (GAAP) |
$ | 36,739 | $ | 38,166 | $ | 41,285 | $ | 44,421 | $ | 44,934 | $ | 74,905 | $ | 91,564 | ||||||||||||||
Net interest
income FTE |
109,114 | 110,028 | 113,082 | 103,396 | 104,775 | 219,142 | 201,085 | |||||||||||||||||||||
(C) Net Interest
Income (GAAP) (A
minus B) |
$ | 108,706 | $ | 109,614 | $ | 112,677 | $ | 102,980 | $ | 104,314 | $ | 218,320 | $ | 200,179 | ||||||||||||||
(D) Net interest
margin (GAAP) |
3.38 | % | 3.46 | % | 3.44 | % | 3.20 | % | 3.42 | % | 3.42 | % | 3.39 | % | ||||||||||||||
Net interest
margin FTE |
3.40 | % | 3.48 | % | 3.46 | % | 3.22 | % | 3.43 | % | 3.44 | % | 3.41 | % | ||||||||||||||
(E) Efficiency
ratio (GAAP) |
67.41 | % | 65.23 | % | 67.65 | % | 67.20 | % | 59.90 | % | 66.30 | % | 60.32 | % | ||||||||||||||
Efficiency ratio -
FTE |
67.22 | % | 65.05 | % | 67.48 | % | 67.01 | % | 59.72 | % | 66.11 | % | 60.13 | % | ||||||||||||||
Calculation of
Tangible Common
Equity ratio (at
period end) |
||||||||||||||||||||||||||||
Total shareholders
equity |
$ | 1,473,386 | $ | 1,453,253 | $ | 1,436,549 | $ | 1,398,912 | $ | 1,384,736 | ||||||||||||||||||
Less: Preferred
stock |
(49,704 | ) | (49,672 | ) | (49,640 | ) | (287,234 | ) | (286,460 | ) | ||||||||||||||||||
Less: Intangible
assets |
(294,833 | ) | (293,996 | ) | (293,765 | ) | (291,219 | ) | (291,300 | ) | ||||||||||||||||||
(F) Total tangible
common
shareholders
equity |
$ | 1,128,849 | $ | 1,109,585 | $ | 1,093,144 | $ | 820,459 | $ | 806,976 | ||||||||||||||||||
Total assets |
$ | 14,615,897 | $ | 14,094,294 | $ | 13,980,156 | $ | 14,100,368 | $ | 13,708,560 | ||||||||||||||||||
Less: Intangible
assets |
(294,833 | ) | (293,996 | ) | (293,765 | ) | (291,219 | ) | (291,300 | ) | ||||||||||||||||||
(G) Total tangible
assets |
$ | 14,321,064 | $ | 13,800,298 | $ | 13,686,391 | $ | 13,809,149 | $ | 13,417,260 | ||||||||||||||||||
Tangible common
equity ratio (F/G) |
7.9 | % | 8.0 | % | 8.0 | % | 5.9 | % | 6.0 | % | ||||||||||||||||||
Calculation of Core
Pre-Tax Earnings |
||||||||||||||||||||||||||||
Income before taxes |
$ | 18,965 | $ | 27,048 | $ | 22,142 | $ | 32,385 | $ | 20,790 | $ | 46,013 | $ | 46,280 | ||||||||||||||
Add: Provision for
credit losses |
29,187 | 25,344 | 28,795 | 25,528 | 41,297 | 54,531 | 70,342 | |||||||||||||||||||||
Add: OREO expenses,
net |
6,577 | 5,808 | 7,384 | 4,767 | 5,843 | 12,385 | 7,181 | |||||||||||||||||||||
Add: Recourse
obligation on loans
previously sold |
(916 | ) | 103 | 1,365 | 1,432 | 4,721 | (813 | ) | 8,173 | |||||||||||||||||||
Add: Covered loan
expense |
806 | 745 | 342 | 162 | 184 | 1,551 | 184 | |||||||||||||||||||||
Less: Gain on
bargain purchases |
(746 | ) | (9,838 | ) | (250 | ) | (6,593 | ) | (26,494 | ) | (10,584 | ) | (37,388 | ) | ||||||||||||||
Less: Trading
losses (gains) |
30 | 440 | (611 | ) | (210 | ) | 1,617 | 470 | (4,344 | ) | ||||||||||||||||||
Less: (Gains)
losses on
available-for-sale
securities, net |
(1,152 | ) | (106 | ) | (159 | ) | (9,235 | ) | (46 | ) | (1,258 | ) | (438 | ) | ||||||||||||||
Core pre-tax
earnings |
$ | 52,751 | $ | 49,544 | $ | 59,008 | $ | 48,236 | $ | 47,912 | $ | 102,295 | $ | 89,990 | ||||||||||||||
Calculation of book
value per share |
||||||||||||||||||||||||||||
Total shareholders
equity |
$ | 1,473,386 | $ | 1,453,253 | $ | 1,436,549 | $ | 1,398,912 | $ | 1,384,736 | ||||||||||||||||||
Less: Preferred
stock |
(49,704 | ) | (49,672 | ) | (49,640 | ) | (287,234 | ) | (286,460 | ) | ||||||||||||||||||
(H) Total common
equity |
$ | 1,423,682 | $ | 1,403,581 | $ | 1,386,909 | $ | 1,111,678 | $ | 1,098,276 | ||||||||||||||||||
Actual common
shares outstanding |
34,988 | 34,947 | 34,864 | 31,144 | 31,084 | |||||||||||||||||||||||
Add: TEU conversion
shares |
7,342 | 6,696 | 7,512 | | | |||||||||||||||||||||||
(I) Common shares
used for book value
calculation |
42,330 | 41,643 | 42,376 | 31,144 | 31,084 | |||||||||||||||||||||||
Book value per
share (H/I) |
$ | 33.63 | $ | 33.70 | $ | 32.73 | $ | 35.70 | $ | 35.33 | ||||||||||||||||||
Tangible common
book value per
share (F/I) |
$ | 26.67 | $ | 26.65 | $ | 25.80 | $ | 26.34 | $ | 25.96 |
17
LOANS
Loan Portfolio Mix and Growth Rates | % Growth | |||||||||||||||||||
From (1) | From | |||||||||||||||||||
June 30, | December 31, | June 30, | December 31, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2010 | 2010 | 2010 | 2010 | |||||||||||||||
Balance: |
||||||||||||||||||||
Commercial |
$ | 2,132,436 | $ | 2,049,326 | $ | 1,827,618 | 8 | % | 17 | % | ||||||||||
Commercial real-estate |
3,374,668 | 3,338,007 | 3,347,823 | 2 | 1 | |||||||||||||||
Home equity |
880,702 | 914,412 | 922,305 | (7 | ) | (5 | ) | |||||||||||||
Residential real-estate |
329,381 | 353,336 | 332,673 | (14 | ) | (1 | ) | |||||||||||||
Premium finance receivables commercial |
1,429,436 | 1,265,500 | 1,346,985 | 26 | 6 | |||||||||||||||
Premium finance receivables life insurance |
1,619,668 | 1,521,886 | 1,378,657 | 13 | 17 | |||||||||||||||
Indirect consumer (2) |
57,718 | 51,147 | 69,011 | 26 | (16 | ) | ||||||||||||||
Consumer and other |
101,068 | 106,272 | 99,091 | (10 | ) | 2 | ||||||||||||||
Total loans, net of unearned income, excluding
covered loans |
$ | 9,925,077 | $ | 9,599,886 | $ | 9,324,163 | 7 | % | 6 | % | ||||||||||
Covered loans |
408,669 | 334,353 | 275,563 | 45 | 48 | |||||||||||||||
Total loans, net of unearned income |
$ | 10,333,746 | $ | 9,934,239 | $ | 9,599,726 | 8 | % | 8 | % | ||||||||||
Mix: |
||||||||||||||||||||
Commercial |
20 | % | 21 | % | 19 | % | ||||||||||||||
Commercial real-estate |
33 | 34 | 35 | |||||||||||||||||
Home equity |
8 | 9 | 10 | |||||||||||||||||
Residential real-estate |
3 | 3 | 3 | |||||||||||||||||
Premium finance receivables commercial |
14 | 13 | 14 | |||||||||||||||||
Premium finance receivables life insurance |
16 | 15 | 14 | |||||||||||||||||
Indirect consumer (2) |
1 | 1 | 1 | |||||||||||||||||
Consumer and other |
1 | 1 | 1 | |||||||||||||||||
Total loans, net of
unearned income,
excluding covered loans |
96 | % | 97 | % | 97 | % | ||||||||||||||
Covered loans |
4 | 3 | 3 | |||||||||||||||||
Total loans, net of
unearned income |
100 | % | 100 | % | 100 | % | ||||||||||||||
(1) | Annualized | |
(2) | Includes autos, boats, snowmobiles and other indirect consumer loans. | |
18
Commercial
and Commercial Real-Estate Loans, excluding covered loans
As of June 30, 2011
As of June 30, 2011
> 90 Days | Allowance | |||||||||||||||||||
% of | Past Due | For Loan | ||||||||||||||||||
Total | and Still | Losses | ||||||||||||||||||
(Dollars in thousands) | Balance | Balance | Nonaccrual | Accruing | Allocation | |||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
$ | 1,362,662 | 24.7 | % | $ | 22,289 | $ | | $ | 22,111 | ||||||||||
Franchise |
114,134 | 2.1 | 1,792 | | 978 | |||||||||||||||
Mortgage warehouse lines of credit |
68,477 | 1.2 | | | 559 | |||||||||||||||
Community Advantage homeowner associations |
73,929 | 1.3 | | | 185 | |||||||||||||||
Aircraft |
21,231 | 0.4 | | | 53 | |||||||||||||||
Asset-based lending |
366,096 | 6.6 | 2,087 | | 7,444 | |||||||||||||||
Municipal |
63,296 | 1.1 | | | 1,099 | |||||||||||||||
Leases |
62,535 | 1.1 | | | 417 | |||||||||||||||
Other |
76 | | | | 1 | |||||||||||||||
Total commercial |
$ | 2,132,436 | 38.5 | % | $ | 26,168 | $ | | $ | 32,847 | ||||||||||
Commercial Real-Estate: |
||||||||||||||||||||
Residential construction |
$ | 90,755 | 1.6 | $ | 3,011 | $ | | $ | 2,751 | |||||||||||
Commercial construction |
137,647 | 2.5 | 2,453 | | 3,849 | |||||||||||||||
Land |
212,934 | 3.9 | 33,980 | | 15,104 | |||||||||||||||
Office |
532,382 | 9.7 | 17,503 | | 8,287 | |||||||||||||||
Industrial |
514,534 | 9.3 | 2,470 | | 4,735 | |||||||||||||||
Retail |
524,788 | 9.5 | 8,164 | | 5,589 | |||||||||||||||
Multi-family |
316,151 | 5.7 | 4,947 | | 8,488 | |||||||||||||||
Mixed use and other |
1,045,477 | 19.3 | 17,265 | | 12,900 | |||||||||||||||
Total commercial real-estate |
$ | 3,374,668 | 61.5 | % | $ | 89,793 | $ | | $ | 61,703 | ||||||||||
Total commercial and commercial
real-estate |
$ | 5,507,104 | 100.0 | % | $ | 115,961 | $ | | $ | 94,550 | ||||||||||
Commercial real-estate collateral location by state: |
||||||||||||||||||||
Illinois |
$ | 2,735,375 | 81.1 | % | ||||||||||||||||
Wisconsin |
349,436 | 10.4 | ||||||||||||||||||
Total primary markets |
$ | 3,084,811 | 91.5 | % | ||||||||||||||||
Florida |
57,993 | 1.7 | ||||||||||||||||||
Arizona |
41,295 | 1.2 | ||||||||||||||||||
Indiana |
48,870 | 1.4 | ||||||||||||||||||
Other (no individual state greater than 0.5%) |
141,699 | 4.2 | ||||||||||||||||||
Total |
$ | 3,374,668 | 100.0 | % | ||||||||||||||||
19
DEPOSITS
Deposit Portfolio Mix and Growth Rates | % Growth | |||||||||||||||||||
From (1) | From | |||||||||||||||||||
June 30, | December 31, | June 30, | December 31, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2010 | 2010 | 2010 | 2010 | |||||||||||||||
Balance: |
||||||||||||||||||||
Non-interest bearing |
$ | 1,397,433 | $ | 1,201,194 | $ | 953,814 | 33 | % | 47 | % | ||||||||||
NOW |
1,530,068 | 1,561,507 | 1,560,733 | (4 | ) | (2 | ) | |||||||||||||
Wealth Management deposits (2) |
737,428 | 658,660 | 694,830 | 24 | 6 | |||||||||||||||
Money Market |
1,985,661 | 1,759,866 | 1,722,729 | 26 | 15 | |||||||||||||||
Savings |
736,974 | 744,534 | 594,753 | (2 | ) | 24 | ||||||||||||||
Time certificates of deposit |
4,871,696 | 4,877,912 | 5,097,883 | | (4 | ) | ||||||||||||||
Total deposits |
$ | 11,259,260 | $ | 10,803,673 | $ | 10,624,742 | 9 | % | 6 | % | ||||||||||
Mix: |
||||||||||||||||||||
Non-interest bearing |
12 | % | 11 | % | 9 | % | ||||||||||||||
NOW |
14 | 15 | 15 | |||||||||||||||||
Wealth Management deposits (2) |
6 | 6 | 6 | |||||||||||||||||
Money Market |
18 | 16 | 16 | |||||||||||||||||
Savings |
7 | 7 | 6 | |||||||||||||||||
Time certificates of deposit |
43 | 45 | 48 | |||||||||||||||||
Total deposits |
100 | % | 100 | % | 100 | % | ||||||||||||||
(1) | Annualized | |
(2) | Represents deposit balances of the Companys subsidiary banks from brokerage customers of Wayne Hummer Investments, trust and asset management customers of The Chicago Trust Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts of the Banks. |
Deposit Maturity Analysis | Weighted- | |||||||||||||||||||||||
As of June 30, 2011 | Non- | Average | ||||||||||||||||||||||
Interest | Savings | Rate of | ||||||||||||||||||||||
Bearing | and | Time | Maturing Time | |||||||||||||||||||||
and | Money | Wealth | Certificates | Total | Certificates | |||||||||||||||||||
(Dollars in thousands) | NOW (1) | Market (1) | Mgt (1) | of Deposit | Deposits | of Deposit | ||||||||||||||||||
1-3 months |
$ | 2,927,501 | $ | 2,722,635 | $ | 737,428 | $ | 1,022,882 | $ | 7,410,446 | 1.23 | % | ||||||||||||
4-6 months |
843,694 | $ | 843,694 | 1.23 | ||||||||||||||||||||
7-9 months |
665,411 | $ | 665,411 | 1.24 | ||||||||||||||||||||
10-12 months |
666,345 | $ | 666,345 | 1.21 | ||||||||||||||||||||
13-18 months |
653,088 | $ | 653,088 | 1.59 | ||||||||||||||||||||
19-24 months |
346,255 | $ | 346,255 | 1.68 | ||||||||||||||||||||
24+ months |
674,021 | $ | 674,021 | 2.27 | ||||||||||||||||||||
Total deposits |
$ | 2,927,501 | $ | 2,722,635 | $ | 737,428 | $ | 4,871,696 | $ | 11,259,260 | 1.46 | % | ||||||||||||
(1) | Balances of non-contractual maturity deposits are shown as maturing in the earliest time frame. These deposits do not have contractual maturities and re-price in varying degrees to changes in interest rates. |
20
NET INTEREST INCOME
The following table presents a summary of Wintrusts average balances, net interest income and
related net interest margins, calculated on a fully tax-equivalent basis, for the second quarter of
2011 compared to the second quarter of 2010 (linked quarters):
For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | |||||||||||||||||||||||
(Dollars in thousands) | Average | Interest | Rate | Average | Interest | Rate | ||||||||||||||||||
Liquidity management assets (1) (2) (7) |
$ | 2,591,398 | $ | 13,198 | 2.04 | % | $ | 2,613,179 | $ | 13,305 | 2.04 | % | ||||||||||||
Other earning assets (2) (3) (7) |
28,886 | 208 | 2.89 | 62,874 | 515 | 3.28 | ||||||||||||||||||
Loans, net of unearned income (2) (4) (7) |
9,859,789 | 124,047 | 5.05 | 9,356,033 | 133,207 | 5.71 | ||||||||||||||||||
Covered loans |
418,129 | 8,400 | 8.06 | 210,030 | 2,682 | 5.12 | ||||||||||||||||||
Total earning assets (7) |
$ | 12,898,202 | $ | 145,853 | 4.54 | % | $ | 12,242,116 | $ | 149,709 | 4.91 | % | ||||||||||||
Allowance for loan losses |
(125,537 | ) | (108,764 | ) | ||||||||||||||||||||
Cash and due from banks |
135,670 | 137,531 | ||||||||||||||||||||||
Other assets |
1,196,801 | 1,119,654 | ||||||||||||||||||||||
Total assets |
$ | 14,105,136 | $ | 13,390,537 | ||||||||||||||||||||
Interest-bearing deposits |
9,491,778 | $ | 22,404 | 0.95 | % | $ | 9,348,541 | $ | 31,626 | 1.36 | % | |||||||||||||
Federal Home Loan Bank advances |
421,502 | 4,010 | 3.82 | 417,835 | 4,094 | 3.93 | ||||||||||||||||||
Notes payable and other borrowings |
338,304 | 2,715 | 3.22 | 217,751 | 1,439 | 2.65 | ||||||||||||||||||
Secured borrowings owed to securitization investors |
600,000 | 2,994 | 2.00 | 600,000 | 3,115 | 2.08 | ||||||||||||||||||
Subordinated notes |
45,440 | 194 | 1.69 | 57,198 | 256 | 1.77 | ||||||||||||||||||
Junior subordinated notes |
249,493 | 4,422 | 7.01 | 249,493 | 4,404 | 6.98 | ||||||||||||||||||
Total interest-bearing liabilities |
$ | 11,146,517 | $ | 36,739 | 1.32 | % | $ | 10,890,818 | $ | 44,934 | 1.65 | % | ||||||||||||
Non-interest bearing deposits |
1,349,549 | 932,046 | ||||||||||||||||||||||
Other liabilities |
148,999 | 195,984 | ||||||||||||||||||||||
Equity |
1,460,071 | 1,371,689 | ||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 14,105,136 | $ | 13,390,537 | ||||||||||||||||||||
Interest rate spread (5) (7) |
3.22 | % | 3.26 | % | ||||||||||||||||||||
Net free funds/contribution (6) |
$ | 1,751,685 | 0.18 | % | $ | 1,351,298 | 0.17 | % | ||||||||||||||||
Net interest income/Net interest margin (7) |
$ | 109,114 | 3.40 | % | $ | 104,775 | 3.43 | % | ||||||||||||||||
(1) | Liquidity management assets include available-for-sale securities, interest earning deposits with banks, federal funds sold and securities purchased under resale agreements. | |
(2) | Interest income on tax-advantaged loans, trading securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the three months ended June 30, 2011 and 2010 were $408,000 and $461,000, respectively. | |
(3) | Other earning assets include brokerage customer receivables and trading account securities. | |
(4) | Loans, net of unearned income, include loans held-for-sale and non-accrual loans. | |
(5) | Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities. | |
(6) | Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities. | |
(7) | See Supplemental Financial Measures/Ratios for additional information on this performance ratio. |
The net interest margin decreased three basis points in the second quarter of 2011 compared to the
second quarter of 2010. The driver of this decline was a $6.6 million decrease in accretable
discount recognized as interest income on the purchased life insurance premium portfolio as
prepayments declined, lowering income recognized on prepayments and reducing accretion on the
remaining balance of the pool as the estimated remaining life extended. Absent this decline, the
net interest margin in the second quarter would have been 3.60%. The cost of interest-bearing
deposits declined 41 basis points from the second quarter of 2010 to the second quarter of 2011.
21
The following table presents a summary of Wintrusts average balances, net interest income and
related net interest margins, calculated on a fully tax-equivalent basis, for the second quarter of
2011 compared to the first quarter of 2011 (sequential quarters):
For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||
June 30, 2011 | March 31, 2011 | |||||||||||||||||||||||
(Dollars in thousands) | Average | Interest | Rate | Average | Interest | Rate | ||||||||||||||||||
Liquidity management assets (1) (2) (7) |
$ | 2,591,398 | $ | 13,198 | 2.04 | % | $ | 2,632,012 | $ | 11,354 | 1.75 | % | ||||||||||||
Other earning assets (2) (3) (7) |
28,886 | 208 | 2.89 | 27,718 | 181 | 2.65 | ||||||||||||||||||
Loans, net of unearned income (2) (4) (7) |
9,859,789 | 124,047 | 5.05 | 9,849,309 | 129,587 | 5.34 | ||||||||||||||||||
Covered loans |
418,129 | 8,400 | 8.06 | 326,571 | 7,072 | 8.78 | ||||||||||||||||||
Total earning assets (7) |
$ | 12,898,202 | $ | 145,853 | 4.54 | % | $ | 12,835,610 | $ | 148,194 | 4.68 | % | ||||||||||||
Allowance for loan losses |
(125,537 | ) | (118,610 | ) | ||||||||||||||||||||
Cash and due from banks |
135,670 | 152,264 | ||||||||||||||||||||||
Other assets |
1,196,801 | 1,149,261 | ||||||||||||||||||||||
Total assets |
$ | 14,105,136 | $ | 14,018,525 | ||||||||||||||||||||
Interest-bearing deposits |
9,491,778 | $ | 22,404 | 0.95 | % | $ | 9,542,637 | $ | 23,956 | 1.02 | % | |||||||||||||
Federal Home Loan Bank advances |
421,502 | 4,010 | 3.82 | 416,021 | 3,958 | 3.86 | ||||||||||||||||||
Notes payable and other borrowings |
338,304 | 2,715 | 3.22 | 266,379 | 2,630 | 4.00 | ||||||||||||||||||
Secured borrowings owed to securitization investors |
600,000 | 2,994 | 2.00 | 600,000 | 3,040 | 2.05 | ||||||||||||||||||
Subordinated notes |
45,440 | 194 | 1.69 | 50,000 | 212 | 1.69 | ||||||||||||||||||
Junior subordinated notes |
249,493 | 4,422 | 7.01 | 249,493 | 4,370 | 7.01 | ||||||||||||||||||
Total interest-bearing liabilities |
$ | 11,146,517 | $ | 36,739 | 1.32 | % | $ | 11,124,530 | $ | 38,166 | 1.39 | % | ||||||||||||
Non-interest bearing deposits |
1,349,549 | 1,261,374 | ||||||||||||||||||||||
Other liabilities |
148,999 | 194,752 | ||||||||||||||||||||||
Equity |
1,460,071 | 1,437,869 | ||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 14,105,136 | $ | 14,018,525 | ||||||||||||||||||||
Interest rate spread (5) (7) |
3.22 | % | 3.29 | % | ||||||||||||||||||||
Net free funds/contribution (6) |
$ | 1,751,685 | 0.18 | % | $ | 1,711,080 | 0.19 | % | ||||||||||||||||
Net interest income/Net interest margin (7) |
$ | 109,114 | 3.40 | % | $ | 110,028 | 3.48 | % | ||||||||||||||||
(1) | Liquidity management assets include available-for-sale securities, interest earning deposits with banks, federal funds sold and securities purchased under resale agreements. | |
(2) | Interest income on tax-advantaged loans, trading securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the three months ended June 30, 2011 was $408,000 and for the three months ended March 31, 2011 was $414,000. | |
(3) | Other earning assets include brokerage customer receivables and trading account securities. | |
(4) | Loans, net of unearned income, include loans held-for-sale and non-accrual loans. | |
(5) | Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities. | |
(6) | Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities. | |
(7) | See Supplemental Financial Measures/Ratios for additional information on this performance ratio. |
The net interest margin for the second quarter of 2011 was 3.40% compared to 3.48% in the first
quarter of 2011. The eight basis point decrease in net interest margin in the second quarter of
2011 compared to the first quarter of 2011 resulted from a $4.0 million decrease in accretable
discount recognized as interest income on the purchased life insurance premium portfolio as
prepayments declined, lowering income recognized on prepayments and reducing accretion on the
remaining balance of the pool as the estimated remaining life extended. Absent this decline in the
second quarter the net interest margin would have been 3.52%. The impact of the decline was
partially offset by continued lower repricing on interest-bearing deposits in the second quarter
improved the net interest margin. The cost of interest-bearing deposits declined seven basis
points in the second quarter. The Company continues to see a beneficial shift in its deposit mix as
average non-interest bearing deposits comprised 12.4% of total average deposits in the second
quarter of 2011 compared to 11.7% in the first quarter of 2011.
22
The following table presents a summary of Wintrusts average balances, net interest income and
related net interest margins, calculated on a fully tax-equivalent basis, for the six months ended
June 30, 2011 compared to the six months ended June 30, 2010:
For the Six Months Ended | For the Six Months Ended | |||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | |||||||||||||||||||||||
(Dollars in thousands) | Average | Interest | Rate | Average | Interest | Rate | ||||||||||||||||||
Liquidity management assets (1) (2) (7) |
$ | 2,608,863 | $ | 24,552 | 1.90 | % | $ | 2,485,713 | $ | 26,459 | 2.15 | % | ||||||||||||
Other earning assets (2) (3) (7) |
28,305 | 389 | 2.77 | 58,291 | 679 | 2.35 | ||||||||||||||||||
Loans, net of unearned income (2) (4) (7) |
9,854,578 | 253,634 | 5.19 | 9,253,693 | 262,829 | 5.73 | ||||||||||||||||||
Covered loans |
372,608 | 15,472 | 8.37 | 105,595 | 2,682 | 5.12 | ||||||||||||||||||
Total earning assets (7) |
$ | 12,864,354 | $ | 294,047 | 4.61 | % | $ | 11,903,292 | $ | 292,649 | 4.96 | % | ||||||||||||
Allowance for loan losses |
(122,093 | ) | (108,019 | ) | ||||||||||||||||||||
Cash and due from banks |
143,921 | 125,589 | ||||||||||||||||||||||
Other assets |
1,173,157 | 1,072,194 | ||||||||||||||||||||||
Total assets |
$ | 14,059,339 | $ | 12,993,056 | ||||||||||||||||||||
Interest-bearing deposits |
$ | 9,514,337 | $ | 46,360 | 0.98 | % | $ | 9,084,587 | $ | 64,838 | 1.44 | % | ||||||||||||
Federal Home Loan Bank advances |
418,777 | 7,968 | 3.84 | 423,484 | 8,440 | 4.02 | ||||||||||||||||||
Notes payable and other borrowings |
302,540 | 5,345 | 3.56 | 221,812 | 2,901 | 2.64 | ||||||||||||||||||
Secured borrowings owed to securitization investors |
600,000 | 6,034 | 2.03 | 600,000 | 6,109 | 2.05 | ||||||||||||||||||
Subordinated notes |
47,707 | 406 | 1.69 | 58,591 | 497 | 1.69 | ||||||||||||||||||
Junior subordinated notes |
249,493 | 8,792 | 7.01 | 249,493 | 8,779 | 7.00 | ||||||||||||||||||
Total interest-bearing liabilities |
$ | 11,132,854 | $ | 74,905 | 1.35 | % | $ | 10,637,967 | $ | 91,564 | 1.73 | % | ||||||||||||
Non-interest bearing deposits |
1,305,705 | 895,650 | ||||||||||||||||||||||
Other liabilities |
171,749 | 174,979 | ||||||||||||||||||||||
Equity |
1,449,031 | 1,284,460 | ||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 14,059,339 | $ | 12,993,056 | ||||||||||||||||||||
Interest rate spread (5) (7) |
3.26 | % | 3.23 | % | ||||||||||||||||||||
Net free funds/contribution (6) |
$ | 1,731,500 | 0.18 | % | $ | 1,265,325 | 0.18 | % | ||||||||||||||||
Net interest income/Net interest margin (7) |
$ | 219,142 | 3.44 | % | $ | 201,085 | 3.41 | % | ||||||||||||||||
(1) | Liquidity management assets include available-for-sale securities, interest earning deposits with banks, federal funds sold and securities purchased under resale agreements. | |
(2) | Interest income on tax-advantaged loans, trading securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the six months ended June 30, 2011 and 2010 were $822,000 and $906,000, respectively. | |
(3) | Other earning assets include brokerage customer receivables and trading account securities. | |
(4) | Loans, net of unearned income, include loans held-for-sale and non-accrual loans. | |
(5) | Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities. | |
(6) | Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities. | |
(7) | See Supplemental Financial Measures/Ratios for additional information on this performance ratio. |
The net interest margin for the first six months of 2011 was 3.44%, compared to 3.41% in the first
six months of 2010. Absent the $6.6 million negative impact on a year-to-date basis described
earlier from lower accretable discount recognized as interest income on the purchased life
insurance premium portfolio, the 2011 year-to-date net interest margin would have been 3.54%. The
impact of the decline was partially offset by continued lower repricing on the interest-bearing
deposits over the past 12 months. Average earning assets for the first six months of 2011 increased
by $961.1 million compared to the first six months of 2010. This average earning asset growth was
primarily a result of the $600.9 million increase in average loans, $267.0 million of average covered loan growth from the
FDIC-assisted bank acquisitions and a $93.2 million increase in liquidity management and other
earning assets. Growth in the life insurance premium finance portfolio of $309.7 million and growth
in the commercial and industrial portfolio of $96.8 million accounted for the bulk of the total
average loan growth over the past 12 months. The average earning asset growth of $961.1 million
over the past 12 months was primarily funded by a $404.6 million increase in the average balances
of savings, NOW, MMA and Wealth Management deposits and an increase in the average balance of net
free funds of $466.2 million.
23
NON-INTEREST INCOME
For the second quarter of 2011, non-interest income totaled $36.7 million, a decrease of $13.8
million, or 27%, compared to the second quarter of 2010. The decrease was primarily attributable
to lower bargain purchase gains, partially offset by increases in wealth management revenues,
mortgage banking revenue and fees from covered call options.
The following table presents non-interest income by category for the periods presented:
Three Months Ended | ||||||||||||||||
June 30, | $ | % | ||||||||||||||
(Dollars in thousands) | 2011 | 2010 | Change | Change | ||||||||||||
Brokerage |
$ | 6,208 | $ | 5,712 | $ | 496 | 9 | |||||||||
Trust and asset management |
4,393 | 3,481 | 912 | 26 | ||||||||||||
Total wealth management |
10,601 | 9,193 | 1,408 | 15 | ||||||||||||
Mortgage banking |
12,817 | 7,985 | 4,832 | 61 | ||||||||||||
Service charges on deposit accounts |
3,594 | 3,371 | 223 | 7 | ||||||||||||
Gains on available-for-sale securities |
1,152 | 46 | 1,106 | NM | ||||||||||||
Gain on bargain purchases |
746 | 26,494 | (25,748 | ) | (97 | ) | ||||||||||
Trading (losses) gains |
(30 | ) | (1,617 | ) | 1,587 | 98 | ||||||||||
Other: |
||||||||||||||||
Fees from covered call options |
2,287 | 169 | 2,118 | NM | ||||||||||||
Bank Owned Life Insurance |
661 | 418 | 243 | 58 | ||||||||||||
Administrative services |
781 | 708 | 73 | 10 | ||||||||||||
Miscellaneous |
4,043 | 3,669 | 374 | 10 | ||||||||||||
Total Other |
7,772 | 4,964 | 2,808 | 57 | ||||||||||||
Total Non-Interest Income |
$ | 36,652 | $ | 50,436 | $ | (13,784 | ) | (27 | ) | |||||||
Six Months Ended | ||||||||||||||||
June 30, | $ | % | ||||||||||||||
(Dollars in thousands) | 2011 | 2010 | Change | Change | ||||||||||||
Brokerage |
$ | 12,533 | $ | 11,266 | $ | 1,267 | 11 | |||||||||
Trust and asset management |
8,304 | 6,594 | 1,710 | 26 | ||||||||||||
Total wealth management |
20,837 | 17,860 | 2,977 | 17 | ||||||||||||
Mortgage banking |
24,448 | 17,713 | 6,735 | 38 | ||||||||||||
Service charges on deposit accounts |
6,905 | 6,703 | 202 | 3 | ||||||||||||
Gains (losses) on available-for-sale securities |
1,258 | 438 | 820 | NM | ||||||||||||
Gain on bargain purchases |
10,584 | 37,388 | (26,804 | ) | (72 | ) | ||||||||||
Trading (losses) gains |
(470 | ) | 4,344 | (4,814 | ) | NM | ||||||||||
Other: |
||||||||||||||||
Fees from covered call options |
4,757 | 459 | 4,298 | NM | ||||||||||||
Bank Owned Life Insurance |
1,537 | 1,041 | 496 | 48 | ||||||||||||
Administrative services |
1,498 | 1,289 | 209 | 16 | ||||||||||||
Miscellaneous |
6,185 | 5,809 | 376 | 6 | ||||||||||||
Total Other |
13,977 | 8,598 | 5,379 | 63 | ||||||||||||
Total Non-Interest Income |
$ | 77,539 | $ | 93,044 | $ | (15,505 | ) | (17 | ) | |||||||
NM Not Meaningful |
The significant changes in non-interest income for the quarter ended June 30, 2011 compared to the
quarter ended June 30, 2010 are discussed below.
Wealth management revenue is comprised of the trust and asset management revenue of The Chicago
Trust Company and the asset management fees, brokerage commissions, trading commissions and
insurance product commissions at Wayne Hummer Investments and Great Lakes Advisors. Wealth
management revenue totaled $10.6 million in the second quarter of 2011 and $9.2 million in the
second quarter of 2010, an increase of 15%. Increased asset valuations due to equity market
improvements have helped revenue growth from trust and asset management activities.
24
Additionally, the improvement in the equity markets overall has led to the increase of the brokerage component of
wealth management revenue as customer trading activity has increased.
Mortgage banking revenue includes revenue from activities related to originating, selling and
servicing residential real estate loans for the secondary market. For the quarter ended June 30,
2011, this revenue totaled $12.8 million, an increase of $4.8 million when compared to the second
quarter of 2010. Mortgages originated and sold totaled $459 million in the second quarter of 2011
compared to $732 million in the second quarter of 2010. The increase in mortgage banking revenue
in the second quarter of 2011 as compared to the second quarter of 2010 resulted primarily from
estimations of fewer loss indemnification requests from investors. The Company enters into
residential mortgage loan sale agreements with investors in the normal course of business. These
agreements provide recourse to investors through certain representations concerning credit
information, loan documentation, collateral and insurability. Investors request the Company to
indemnify them against losses on certain loans or to repurchase loans which the investors believe
do not comply with applicable representations. An increase in requests for loss indemnification
can negatively impact mortgage banking revenue as additional recourse expense. The loss reserves
established for loans expected to be repurchased is based on trends in repurchase and
indemnification requests, actual loss experience, known and inherent risks in the loans that have
been sold, and current economic conditions.
A summary of the mortgage banking revenue components is shown below:
Mortgage banking revenue | Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||
Mortgage loans originated and sold |
$ | 458,538 | $ | 562,088 | $ | 732,464 | $ | 1,020,626 | $ | 1,419,144 | ||||||||||
Mortgage loans serviced for others |
$ | 943,542 | $ | 943,074 | $ | 756,451 | ||||||||||||||
Fair value of mortgage servicing rights (MSRs) |
$ | 8,762 | $ | 9,448 | $ | 5,347 | ||||||||||||||
MSRs as a percentage of loans serviced |
0.93 | % | 1.00 | % | 0.71 | % | ||||||||||||||
Gain on sales of loans and other fees |
$ | 13,037 | $ | 11,593 | $ | 14,485 | $ | 24,630 | $ | 28,203 | ||||||||||
Mortgage servicing rights fair value adjustments |
(1,136 | ) | 141 | (1,779 | ) | (995 | ) | (2,317 | ) | |||||||||||
Recourse obligation on loans previously sold |
916 | (103 | ) | (4,721 | ) | 813 | (8,173 | ) | ||||||||||||
Total mortgage banking revenue |
$ | 12,817 | $ | 11,631 | $ | 7,985 | $ | 24,448 | $ | 17,713 | ||||||||||
Gain on sales of loans and other fees as a percentage of loans sold |
2.84 | % | 2.06 | % | 1.98 | % | 2.41 | % | 1.99 | % |
The Company has recognized gains on bargain purchases of $10.6 million in the first six months of
2011 related to the FDIC-assisted acquisitions of TBOC by Schaumburg and CFBC by Northbrook. In
comparison, in the comparable period in 2010, the Company recognized $22.3 million and $4.2 million
of bargain purchase gains related to the Wheatland and Lincoln Park acquisitions, as well as $10.9
million related to loans acquired in the Companys acquisition of a life insurance premium finance
loan portfolio.
Other non-interest income for the second quarter of 2011 totaled $7.8 million, compared to $5.0
million in the second quarter of 2010. Fees from certain covered call option transactions
increased by $2.1 million in the second quarter of 2011 as compared to the same period in the prior
year. Historically, compression in the net interest margin was effectively offset, as has
consistently been the case, by the Companys covered call strategy. An illustration of the past
effectiveness of this strategy is shown in the Supplemental Financial Information section (see page
titled Net Interest Margin (Including Call Option Income)).
25
NON-INTEREST EXPENSE
Non-interest expense for the second quarter of 2011 totaled $97.2 million and increased
approximately $4.5 million, or 5%, compared to the second quarter of 2010.
The following table presents non-interest expense by category for the periods presented:
Three Months Ended | ||||||||||||||||
June 30, | $ | % | ||||||||||||||
(Dollars in thousands) | 2011 | 2010 | Change | Change | ||||||||||||
Salaries and employee benefits: |
||||||||||||||||
Salaries |
$ | 32,008 | $ | 28,714 | 3,294 | 11 | ||||||||||
Commissions and bonus |
10,760 | 12,967 | (2,207 | ) | (17 | ) | ||||||||||
Benefits |
10,311 | 8,968 | 1,343 | 15 | ||||||||||||
Total salaries and employee benefits |
53,079 | 50,649 | 2,430 | 5 | ||||||||||||
Equipment |
4,409 | 4,046 | 363 | 9 | ||||||||||||
Occupancy, net |
6,772 | 6,033 | 739 | 12 | ||||||||||||
Data processing |
3,147 | 3,669 | (522 | ) | (14 | ) | ||||||||||
Advertising and marketing |
1,440 | 1,470 | (30 | ) | (2 | ) | ||||||||||
Professional fees |
4,533 | 3,957 | 576 | 15 | ||||||||||||
Amortization of other intangible assets |
704 | 674 | 30 | 4 | ||||||||||||
FDIC insurance |
3,281 | 5,005 | (1,724 | ) | (34 | ) | ||||||||||
OREO expenses, net |
6,577 | 5,843 | 734 | 13 | ||||||||||||
Other: |
||||||||||||||||
Commissions 3rd party brokers |
991 | 1,097 | (106 | ) | (10 | ) | ||||||||||
Postage |
1,170 | 1,229 | (59 | ) | (5 | ) | ||||||||||
Stationery and supplies |
888 | 761 | 127 | 17 | ||||||||||||
Miscellaneous |
10,215 | 8,230 | 1,985 | 24 | ||||||||||||
Total other |
13,264 | 11,317 | 1,947 | 17 | ||||||||||||
Total Non-Interest Expense |
$ | 97,206 | $ | 92,663 | $ | 4,543 | 5 | |||||||||
Six Months Ended | ||||||||||||||||
June 30, | $ | % | ||||||||||||||
(Dollars in thousands) | 2011 | 2010 | Change | Change | ||||||||||||
Salaries and employee benefits: |
||||||||||||||||
Salaries |
$ | 65,143 | $ | 57,797 | 7,346 | 13 | ||||||||||
Commissions and bonus |
21,474 | 22,698 | (1,224 | ) | (5 | ) | ||||||||||
Benefits |
22,561 | 19,226 | 3,335 | 17 | ||||||||||||
Total salaries and employee benefits |
109,178 | 99,721 | 9,457 | 9 | ||||||||||||
Equipment |
8,673 | 7,941 | 732 | 9 | ||||||||||||
Occupancy, net |
13,277 | 12,263 | 1,014 | 8 | ||||||||||||
Data processing |
6,670 | 7,076 | (406 | ) | (6 | ) | ||||||||||
Advertising and marketing |
3,054 | 2,784 | 270 | 10 | ||||||||||||
Professional fees |
8,079 | 7,064 | 1,015 | 14 | ||||||||||||
Amortization of other intangible assets |
1,393 | 1,319 | 74 | 6 | ||||||||||||
FDIC insurance |
7,799 | 8,814 | (1,015 | ) | (12 | ) | ||||||||||
OREO expenses, net |
12,385 | 7,181 | 5,204 | 72 | ||||||||||||
Other: |
||||||||||||||||
Commissions 3rd party brokers |
2,021 | 2,058 | (37 | ) | (2 | ) | ||||||||||
Postage |
2,248 | 2,339 | (91 | ) | (4 | ) | ||||||||||
Stationery and supplies |
1,728 | 1,493 | 235 | 16 | ||||||||||||
Miscellaneous |
18,810 | 16,548 | 2,262 | 14 | ||||||||||||
Total other |
24,807 | 22,438 | 2,369 | 11 | ||||||||||||
Total Non-Interest Expense |
$ | 195,315 | $ | 176,601 | $ | 18,714 | 11 | |||||||||
26
The significant changes in non-interest expense for the quarter ended June 30, 2011 compared
to the quarter ended June 30, 2010 are discussed below.
Salaries and employee benefits comprised 55% of total non-interest expense in the second quarter of
2011 and 55% in the second quarter of 2010. Salaries and employee benefits expense increased $2.4
million, or 5%, in the second quarter of 2011 compared to the second quarter of 2010 primarily as a
result of a $3.3 million increase in salaries caused by the addition of employees from the
FDIC-assisted transactions and larger staffing as the Company grows and a $1.3 million increase
from employee benefits (primarily health plan and payroll taxes related), partially offset by a
$2.2 million decrease in bonus and commissions attributable to variable pay based revenue.
Occupancy expense includes depreciation on premises, real estate taxes, utilities and maintenance
of premises, as well as net rent expense for leased premises. Occupancy expense for the second
quarter of 2011 was $6.8 million, an increase of $739,000, or 12%, compared to the same period in
2010. The increase is primarily the result of rent expense on additional leased premises and
depreciation on owned locations which were obtained in the FDIC-assisted acquisitions.
Data processing expenses decreased $522,000 for the second quarter of 2011 as compared to the
second quarter of 2010. The decrease in the data processing expenses is related to more favorable
terms from third-party providers.
Professional fees include legal, audit and tax fees, external loan review costs and normal
regulatory exam assessments. Professional fees for the second quarter of 2011 were $4.5 million,
an increase of $576,000, or 15%, compared to the same period in 2010. These increases are
primarily a result of increased legal costs related to non-performing assets and recent bank
acquisitions.
FDIC insurance expense for the second quarter of 2011 was $3.3 million, a decrease of $1.7 million,
or 34%, compared to the same period in 2010. Effective April 1, 2011, standards applied in FDIC
assessments set forth in the Federal Deposit Insurance Act were revised by the Dodd-Frank Wall
Street Reform and Consumer Protection Act. These revisions modified definitions of a companys
insurance assessment base and assessment rates which led to the Companys decreased FDIC expense in
the second quarter of 2011.
OREO expenses include all costs related to obtaining, maintaining and selling of other real estate
owned properties. This expense totaled $6.6 million in the second quarter of 2011, an increase of
$734,000 compared to $5.8 million in the second quarter of 2010. The increase in OREO expenses
primarily related to higher valuation adjustments of properties held in OREO in the second quarter
of 2011 as compared to second quarter of 2010.
27
ASSET QUALITY
Allowance for Credit Losses, excluding covered loans
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Allowance for loan losses at beginning of period |
$ | 115,049 | $ | 102,397 | $ | 113,903 | $ | 98,277 | ||||||||
Provision for credit losses |
28,666 | 41,297 | 53,042 | 70,342 | ||||||||||||
Other adjustments |
| | | 1,943 | ||||||||||||
Reclassification (to)/from allowance for unfunded lending-related commitments |
(317 | ) | 785 | 1,799 | 684 | |||||||||||
Charge-offs: |
||||||||||||||||
Commercial |
7,583 | 4,781 | 16,723 | 9,456 | ||||||||||||
Commercial real estate |
20,691 | 12,311 | 34,033 | 32,554 | ||||||||||||
Home equity |
1,300 | 3,089 | 2,073 | 3,370 | ||||||||||||
Residential real estate |
282 | 310 | 1,557 | 717 | ||||||||||||
Premium finance receivables commercial |
1,893 | 17,747 | 3,400 | 19,680 | ||||||||||||
Premium finance receivables life insurance |
214 | | 244 | | ||||||||||||
Indirect consumer |
44 | 256 | 164 | 529 | ||||||||||||
Consumer and other |
266 | 109 | 426 | 288 | ||||||||||||
Total charge-offs |
32,273 | 38,603 | 58,620 | 66,594 | ||||||||||||
Recoveries: |
||||||||||||||||
Commercial |
301 | 143 | 567 | 586 | ||||||||||||
Commercial real estate |
463 | 218 | 801 | 660 | ||||||||||||
Home equity |
19 | 6 | 27 | 13 | ||||||||||||
Residential real estate |
3 | 2 | 5 | 7 | ||||||||||||
Premium finance receivables commercial |
5,375 | 188 | 5,643 | 417 | ||||||||||||
Premium finance receivables life insurance |
12 | | 12 | | ||||||||||||
Indirect consumer |
42 | 81 | 108 | 132 | ||||||||||||
Consumer and other |
22 | 33 | 75 | 80 | ||||||||||||
Total recoveries |
6,237 | 671 | 7,238 | 1,895 | ||||||||||||
Net charge-offs |
(26,036 | ) | (37,932 | ) | (51,382 | ) | (64,699 | ) | ||||||||
Allowance for loan losses at period end |
$ | 117,362 | $ | 106,547 | $ | 117,362 | $ | 106,547 | ||||||||
Allowance for unfunded lending-related
commitments at period end |
2,335 | 2,169 | 2,335 | 2,169 | ||||||||||||
Allowance for credit losses at period end |
$ | 119,697 | $ | 108,716 | $ | 119,697 | $ | 108,716 | ||||||||
Annualized net charge-offs by category as a
percentage of its own respective categorys
average: |
||||||||||||||||
Commercial |
1.45 | % | 1.04 | 1.65 | % | 1.03 | % | |||||||||
Commercial real estate |
2.40 | 1.45 | 1.99 | 1.93 | ||||||||||||
Home equity |
0.58 | 1.34 | 0.46 | 0.73 | ||||||||||||
Residential real estate |
0.25 | 0.23 | 0.62 | 0.28 | ||||||||||||
Premium finance receivables commercial |
(0.99 | ) | 5.46 | (0.33 | ) | 3.03 | ||||||||||
Premium finance receivables life insurance |
0.05 | | 0.03 | | ||||||||||||
Indirect consumer |
0.02 | 0.92 | 0.21 | 0.96 | ||||||||||||
Consumer and other |
0.98 | 0.27 | 0.69 | 0.37 | ||||||||||||
Total loans, net of unearned income, excluding covered loans |
1.06 | % | 1.63 | 1.05 | % | 1.41 | % | |||||||||
Net charge-offs as a percentage of the
provision for credit losses |
90.83 | % | 91.85 | 96.87 | % | 91.98 | % | |||||||||
Loans at period-end |
$ | 9,925,077 | $ | 9,324,163 | ||||||||||||
Allowance for loan
losses as a
percentage of loans
at period end |
1.18 | % | 1.14 | % | ||||||||||||
Allowance for
credit losses as a
percentage of loans
at period end |
1.21 | % | 1.17 | % |
28
The allowance for credit losses, excluding the allowance for covered loan losses, is comprised
of the allowance for loan losses and the allowance for unfunded lending-related commitments. The
allowance for loan losses is a reserve against loan amounts that are actually funded and
outstanding while the allowance for unfunded lending-related commitments relates to certain amounts
that Wintrust is committed to lend but for which funds have not yet been disbursed. The allowance
for unfunded lending-related commitments (separate liability account) represents the portion of the
allowance for credit losses that was associated with unfunded lending-related commitments. The
provision for credit losses, excluding the provision for covered loan losses, may contain both a
component related to funded loans (provision for loan losses) and a component related to
lending-related commitments (provision for unfunded loan commitments and letters of credit). Total
credit-related reserves also include the credit discounts on the purchased life insurance premium
finance receivables which are netted with the loan balance. Additionally, on January 1, 2010, in
conjunction with recording the securitization facility on its balance sheet, the Company
established an allowance for loan losses totaling $1.9 million. This addition to the allowance for
loan losses is shown as an other adjustment to the allowance for loan losses.
The provision for credit losses, excluding the provision for covered loan losses, totaled $28.7
million for the second quarter of 2011, $24.4 million in the first quarter of 2011 and $41.3
million for the second quarter of 2010. For the quarter ended June 30, 2011, net charge-offs,
excluding covered loans, totaled $26.0 million compared to $25.3 million in the first quarter of
2011 and $37.9 million recorded in the second quarter of 2010. On a ratio basis, annualized net
charge-offs as a percentage of average loans, excluding covered loans, were 1.06% in the second
quarter of 2011, 1.04% in the first quarter of 2011, and 1.63% in the second quarter of 2010. The
second quarter of 2011 amounts recorded for both net charge-offs and provision for credit losses
reflect a continuation of the Companys commitment to maintain a low level of non-performing assets
and an appropriate level of reserves.
Management believes the allowance for credit losses is appropriate to provide for inherent losses
in the portfolio. There can be no assurances however, that future losses will not exceed the
amounts provided for, thereby affecting future results of operations. The amount of future
additions to the allowance for credit losses will be dependent upon managements assessment of the
appropriateness of the allowance based on its evaluation of economic conditions, changes in real
estate values, interest rates, the regulatory environment, the level of past-due and non-performing
loans, and other factors. The increase in the allowance for credit losses from the end of the
prior quarter reflects the continued changes in real estate values on certain types of credits,
specifically credits with residential development collateral valuation exposure.
The Company also provides a provision for covered loan losses on covered loans and an allowance for
covered loan losses on covered loans. Please see Covered Assets later in this document for more
detail.
29
The table below shows the aging of the Companys loan portfolio, excluding covered loans, at June
30, 2011:
90+ days | 60-89 | 30-59 | ||||||||||||||||||||||
As of June 30, 2011 | and still | days past | days past | |||||||||||||||||||||
(Dollars in thousands) | Nonaccrual | accruing | due | due | Current | Total Loans | ||||||||||||||||||
Loan Balances: |
||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||
Commercial and industrial |
$ | 22,289 | $ | | $ | 7,164 | $ | 23,754 | $ | 1,309,455 | $ | 1,362,662 | ||||||||||||
Franchise |
1,792 | | | | 112,342 | 114,134 | ||||||||||||||||||
Mortgage warehouse lines of credit |
| | | | 68,477 | 68,477 | ||||||||||||||||||
Community Advantage homeowners association |
| | | | 73,929 | 73,929 | ||||||||||||||||||
Aircraft |
| | | | 21,231 | 21,231 | ||||||||||||||||||
Asset-based lending |
2,087 | | | 2,415 | 361,594 | 366,096 | ||||||||||||||||||
Municipal |
| | | | 63,296 | 63,296 | ||||||||||||||||||
Leases |
| | | 763 | 61,772 | 62,535 | ||||||||||||||||||
Other |
| | | | 76 | 76 | ||||||||||||||||||
Total commercial |
26,168 | | 7,164 | 26,932 | 2,072,172 | 2,132,436 | ||||||||||||||||||
Commercial real-estate: |
||||||||||||||||||||||||
Residential construction |
3,011 | | 938 | 5,245 | 81,561 | 90,755 | ||||||||||||||||||
Commercial construction |
2,453 | | 7,579 | 7,075 | 120,540 | 137,647 | ||||||||||||||||||
Land |
33,980 | | 10,281 | 8,076 | 160,597 | 212,934 | ||||||||||||||||||
Office |
17,503 | | 1,648 | 3,846 | 509,385 | 532,382 | ||||||||||||||||||
Industrial |
2,470 | | 2,689 | 2,480 | 506,895 | 514,534 | ||||||||||||||||||
Retail |
8,164 | | 3,778 | 14,806 | 498,040 | 524,788 | ||||||||||||||||||
Multi-family |
4,947 | | 4,628 | 3,836 | 302,740 | 316,151 | ||||||||||||||||||
Mixed use and other |
17,265 | | 9,350 | 4,201 | 1,014,661 | 1,045,477 | ||||||||||||||||||
Total commercial real-estate |
89,793 | | 40,891 | 49,565 | 3,194,419 | 3,374,668 | ||||||||||||||||||
Home equity |
15,853 | | 1,502 | 4,081 | 859,266 | 880,702 | ||||||||||||||||||
Residential real estate |
7,379 | | 1,272 | 949 | 319,781 | 329,381 | ||||||||||||||||||
Premium finance receivables commercial |
10,309 | 4,446 | 5,089 | 7,897 | 1,401,695 | 1,429,436 | ||||||||||||||||||
Premium finance receivables life insurance |
670 | 324 | 4,873 | 3,254 | 1,610,547 | 1,619,668 | ||||||||||||||||||
Indirect consumer |
89 | 284 | 98 | 531 | 56,716 | 57,718 | ||||||||||||||||||
Consumer and other |
757 | | 123 | 418 | 99,770 | 101,068 | ||||||||||||||||||
Total loans, net of unearned income, excluding covered loans |
$ | 151,018 | $ | 5,054 | $ | 61,012 | $ | 93,627 | $ | 9,614,366 | $ | 9,925,077 | ||||||||||||
Aging as a % of Loan Balance: |
||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||
Commercial and industrial |
1.6 | % | | % | 0.5 | % | 1.7 | % | 96.2 | % | 100.0 | % | ||||||||||||
Franchise |
1.6 | | | | 98.4 | 100.0 | ||||||||||||||||||
Mortgage warehouse lines of credit |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Community Advantage homeowners association |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Aircraft |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Asset-based lending |
0.6 | | | 0.7 | 98.7 | 100.0 | ||||||||||||||||||
Municipal |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Leases |
| | | 1.2 | 98.8 | 100.0 | ||||||||||||||||||
Other |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Total commercial |
1.2 | | 0.3 | 1.3 | 97.2 | 100.0 | ||||||||||||||||||
Commercial real-estate: |
||||||||||||||||||||||||
Residential construction |
3.3 | | 1.0 | 5.8 | 89.9 | 100.0 | ||||||||||||||||||
Commercial construction |
1.8 | | 5.5 | 5.1 | 87.6 | 100.0 | ||||||||||||||||||
Land |
16.0 | | 4.8 | 3.8 | 75.4 | 100.0 | ||||||||||||||||||
Office |
3.3 | | 0.3 | 0.7 | 95.7 | 100.0 | ||||||||||||||||||
Industrial |
0.5 | | 0.5 | 0.5 | 98.5 | 100.0 | ||||||||||||||||||
Retail |
1.6 | | 0.7 | 2.8 | 94.9 | 100.0 | ||||||||||||||||||
Multi-family |
1.6 | | 1.5 | 1.2 | 95.7 | 100.0 | ||||||||||||||||||
Mixed use and other |
1.7 | | 0.9 | 0.4 | 97.0 | 100.0 | ||||||||||||||||||
Total commercial real-estate |
2.7 | | 1.2 | 1.5 | 94.6 | 100.0 | ||||||||||||||||||
Home equity |
1.8 | 0.2 | 0.5 | 97.5 | 100.0 | |||||||||||||||||||
Residential real estate |
2.2 | | 0.4 | 0.3 | 97.1 | 100.0 | ||||||||||||||||||
Premium finance receivables commercial |
0.7 | 0.3 | 0.4 | 0.6 | 98.0 | 100.0 | ||||||||||||||||||
Premium finance receivables life insurance |
| | 0.3 | 0.2 | 99.5 | 100.0 | ||||||||||||||||||
Indirect consumer |
0.2 | 0.5 | 0.2 | 0.9 | 98.2 | 100.0 | ||||||||||||||||||
Consumer and other |
0.7 | | 0.1 | 0.4 | 98.8 | 100.0 | ||||||||||||||||||
Total loans, net of unearned income, excluding covered loans |
1.5 | % | 0.1 | % | 0.6 | % | 0.9 | % | 96.9 | % | 100.0 | % | ||||||||||||
30
As of June 30, 2011, $61.0 million of all loans, excluding covered loans, or 0.6%, were 60 to
89 days past due and $93.6 million, or 0.9%, were 30 to 59 days (or one payment) past due. As of
March 31, 2011, $41.2 million of all loans, excluding covered loans, or 0.4%, were 60 to 89 days
past due and $103.5 million, or 1.1%, were 30 to 59 days (or one payment) past due. The majority
of the commercial and commercial real estate loans shown as 60 to 89 days and 30 to 59 days past
due are included on the Companys internal problem loan reporting system. Loans on this system are
closely monitored by management on a monthly basis.
The Companys home equity and residential loan portfolios continue to exhibit low delinquency
ratios. Home equity loans at June 30, 2011 that are current with regard to the contractual terms
of the loan agreement represent 97.5% of the total home equity portfolio. Residential real estate
loans at June 30, 2011 that are current with regards to the contractual terms of the loan
agreements comprise 97.1% of total residential real estate loans outstanding.
31
The table below shows the aging of the Companys loan portfolio, excluding covered loans, at March
31, 2011:
90+ days | 60-89 | 30-59 | ||||||||||||||||||||||
As of March 31, 2011 | and still | days past | days past | |||||||||||||||||||||
(Dollars in thousands) | Nonaccrual | accruing | due | due | Current | Total Loans | ||||||||||||||||||
Loan Balances: |
||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||
Commercial and industrial |
$ | 24,277 | $ | 150 | $ | 3,233 | $ | 9,201 | $ | 1,240,796 | $ | 1,277,657 | ||||||||||||
Franchise |
1,792 | | | | 112,584 | 114,376 | ||||||||||||||||||
Mortgage warehouse lines of credit |
| | | | 33,482 | 33,482 | ||||||||||||||||||
Community Advantage homeowners association |
| | | | 75,948 | 75,948 | ||||||||||||||||||
Aircraft |
74 | | | | 22,243 | 22,317 | ||||||||||||||||||
Asset-based lending |
| | 216 | 2,355 | 299,328 | 301,899 | ||||||||||||||||||
Municipal |
| | | | 60,376 | 60,376 | ||||||||||||||||||
Leases |
14 | | | 88 | 51,404 | 51,506 | ||||||||||||||||||
Other |
| | | | | | ||||||||||||||||||
Total commercial |
26,157 | 150 | 3,449 | 11,644 | 1,896,161 | 1,937,561 | ||||||||||||||||||
Commercial real-estate: |
||||||||||||||||||||||||
Residential construction |
7,891 | | 1,057 | 3,587 | 78,832 | 91,367 | ||||||||||||||||||
Commercial construction |
1,396 | 692 | 2,469 | 680 | 116,311 | 121,548 | ||||||||||||||||||
Land |
26,974 | | 7,366 | 12,455 | 183,419 | 230,214 | ||||||||||||||||||
Office |
17,945 | | 1,705 | 3,059 | 534,558 | 557,267 | ||||||||||||||||||
Industrial |
1,251 | 524 | 1,672 | 8,499 | 483,690 | 495,636 | ||||||||||||||||||
Retail |
12,824 | | 4,994 | 5,810 | 499,486 | 523,114 | ||||||||||||||||||
Multi-family |
5,968 | | 1,107 | 5,059 | 281,729 | 293,863 | ||||||||||||||||||
Mixed use and other |
19,752 | 781 | 7,187 | 19,835 | 995,998 | 1,043,553 | ||||||||||||||||||
Total commercial real-estate |
94,001 | 1,997 | 27,557 | 58,984 | 3,174,023 | 3,356,562 | ||||||||||||||||||
Home equity |
11,184 | | 3,366 | 6,603 | 870,179 | 891,332 | ||||||||||||||||||
Residential real estate |
4,909 | | 918 | 5,174 | 333,908 | 344,909 | ||||||||||||||||||
Premium finance receivables commercial |
9,550 | 6,319 | 4,433 | 14,428 | 1,303,121 | 1,337,851 | ||||||||||||||||||
Premium finance receivables life insurance |
342 | | 1,130 | 5,580 | 1,532,469 | 1,539,521 | ||||||||||||||||||
Indirect consumer |
320 | 310 | 182 | 657 | 50,910 | 52,379 | ||||||||||||||||||
Consumer and other |
147 | 1 | 185 | 394 | 100,960 | 101,687 | ||||||||||||||||||
Total loans, net of unearned income, excluding covered loans |
$ | 146,610 | $ | 8,777 | $ | 41,220 | $ | 103,464 | $ | 9,261,731 | $ | 9,561,802 | ||||||||||||
Aging as a % of Loan Balance: |
||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||
Commercial and industrial |
1.9 | % | | % | 0.3 | % | 0.7 | % | 97.1 | % | 100.0 | % | ||||||||||||
Franchise |
1.6 | | | | 98.4 | 100.0 | ||||||||||||||||||
Mortgage warehouse lines of credit |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Community Advantage homeowners association |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Aircraft |
0.3 | | | | 99.7 | 100.0 | ||||||||||||||||||
Asset-based lending |
| | 0.1 | 0.8 | 99.1 | 100.0 | ||||||||||||||||||
Municipal |
| | | | 100.0 | 100.0 | ||||||||||||||||||
Leases |
| | | 0.2 | 99.8 | 100.0 | ||||||||||||||||||
Other |
| | | | | | ||||||||||||||||||
Total commercial |
1.3 | | 0.2 | 0.6 | 97.9 | 100.0 | ||||||||||||||||||
Commercial real-estate: |
||||||||||||||||||||||||
Residential construction |
8.6 | | 1.2 | 3.9 | 86.3 | 100.0 | ||||||||||||||||||
Commercial construction |
1.1 | 0.6 | 2.0 | 0.6 | 95.7 | 100.0 | ||||||||||||||||||
Land |
11.7 | | 3.2 | 5.4 | 79.7 | 100.0 | ||||||||||||||||||
Office |
3.2 | | 0.3 | 0.5 | 96.0 | 100.0 | ||||||||||||||||||
Industrial |
0.3 | 0.1 | 0.3 | 1.7 | 97.6 | 100.0 | ||||||||||||||||||
Retail |
2.5 | | 1.0 | 1.1 | 95.4 | 100.0 | ||||||||||||||||||
Multi-family |
2.0 | | 0.4 | 1.7 | 95.9 | 100.0 | ||||||||||||||||||
Mixed use and other |
1.9 | 0.1 | 0.7 | 1.9 | 95.4 | 100.0 | ||||||||||||||||||
Total commercial real-estate |
2.8 | 0.1 | 0.8 | 1.8 | 94.5 | 100.0 | ||||||||||||||||||
Home equity |
1.3 | | 0.4 | 0.7 | 97.6 | 100.0 | ||||||||||||||||||
Residential real estate |
1.4 | | 0.3 | 1.5 | 96.8 | 100.0 | ||||||||||||||||||
Premium finance receivables commercial |
0.7 | 0.5 | 0.3 | 1.1 | 97.4 | 100.0 | ||||||||||||||||||
Premium finance receivables life insurance |
0.0 | | 0.1 | 0.4 | 99.5 | 100.0 | ||||||||||||||||||
Indirect consumer |
0.6 | 0.6 | 0.3 | 1.3 | 97.2 | 100.0 | ||||||||||||||||||
Consumer and other |
0.1 | 0.0 | 0.2 | 0.4 | 99.3 | 100.0 | ||||||||||||||||||
Total loans, net of unearned income, excluding covered loans |
1.5 | % | 0.1 | % | 0.4 | % | 1.1 | % | 96.9 | % | 100.0 | % | ||||||||||||
32
Non-performing Assets, excluding covered assets
The following table sets forth Wintrusts non-performing assets, excluding covered assets, at the
dates indicated.
June 30, | March 31, | June 30, | ||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | |||||||||
Loans past due greater than 90 days and still accruing: |
||||||||||||
Commercial |
$ | | $ | 150 | $ | 99 | ||||||
Commercial real-estate |
| 1,997 | 2,248 | |||||||||
Home equity |
| | | |||||||||
Residential real-estate |
| | | |||||||||
Premium finance receivables commercial |
4,446 | 6,319 | 6,350 | |||||||||
Premium finance receivables life insurance |
324 | | 1,923 | |||||||||
Indirect consumer |
284 | 310 | 579 | |||||||||
Consumer and other |
| 1 | 3 | |||||||||
Total loans past due greater than 90 days and still accruing |
5,054 | 8,777 | 11,202 | |||||||||
Non-accrual loans: |
||||||||||||
Commercial |
26,168 | 26,157 | 17,741 | |||||||||
Commercial real-estate |
89,793 | 94,001 | 82,984 | |||||||||
Home equity |
15,853 | 11,184 | 7,149 | |||||||||
Residential real-estate |
7,379 | 4,909 | 4,436 | |||||||||
Premium finance receivables commercial |
10,309 | 9,550 | 11,389 | |||||||||
Premium finance receivables life insurance |
670 | 342 | | |||||||||
Indirect consumer |
89 | 320 | 438 | |||||||||
Consumer and other |
757 | 147 | 62 | |||||||||
Total non-accrual loans |
151,018 | 146,610 | 124,199 | |||||||||
Total non-performing loans: |
||||||||||||
Commercial |
26,168 | 26,307 | 17,840 | |||||||||
Commercial real-estate |
89,793 | 95,998 | 85,232 | |||||||||
Home equity |
15,853 | 11,184 | 7,149 | |||||||||
Residential real-estate |
7,379 | 4,909 | 4,436 | |||||||||
Premium finance receivables commercial |
14,755 | 15,869 | 17,739 | |||||||||
Premium finance receivables life insurance |
994 | 342 | 1,923 | |||||||||
Indirect consumer |
373 | 630 | 1,017 | |||||||||
Consumer and other |
757 | 148 | 65 | |||||||||
Total non-performing loans |
$ | 156,072 | $ | 155,387 | $ | 135,401 | ||||||
Other real estate owned |
82,772 | 85,290 | 86,420 | |||||||||
Total non-performing assets |
$ | 238,844 | $ | 240,677 | $ | 221,821 | ||||||
Total non-performing loans by category as a percent of
its own respective categorys period-end balance: |
||||||||||||
Commercial |
1.23 | % | 1.36 | % | 0.98 | % | ||||||
Commercial real-estate |
2.66 | 2.86 | 2.55 | |||||||||
Home equity |
1.80 | 1.25 | 0.78 | |||||||||
Residential real-estate |
2.24 | 1.42 | 1.33 | |||||||||
Premium finance receivables commercial |
1.03 | 1.19 | 1.32 | |||||||||
Premium finance receivables life insurance |
0.06 | 0.02 | 0.14 | |||||||||
Indirect consumer |
0.65 | 1.20 | 1.47 | |||||||||
Consumer and other |
0.75 | 0.15 | 0.07 | |||||||||
Total loans, net of unearned income |
1.57 | % | 1.63 | % | 1.45 | % | ||||||
Total non-performing assets as a percentage
of total assets |
1.63 | % | 1.71 | % | 1.62 | % | ||||||
Allowance for loan losses as a percentage
total non-performing loans |
75.20 | % | 74.04 | % | 78.69 | % | ||||||
Non-performing Commercial and Commercial Real Estate
The commercial non-performing loan category totaled $26.2 million as of June 30, 2011 compared to
$26.3 million as of March 31, 2011 and $17.8 million as of June 30, 2010. The commercial real
estate non-performing loan category totaled $89.8 million as of June 30, 2011 compared to $96.0
million as of March 31, 2011 and $85.2 million as of June 30, 2010.
33
Management is pursuing the resolution of all credits in this category. At this time,
management believes reserves are appropriate to absorb inherent losses that are expected to
occur upon the ultimate resolution of these credits.
Non-performing Residential Real Estate and Home Equity
Non-performing home equity and residential real estate loans totaled $23.2 million as of June 30,
2011. The balance increased $11.6 million from June 30, 2010 and $7.1 million from March 31, 2011.
The June 30, 2011 non-performing balance is comprised of $7.4 million of residential real estate
(28 individual credits) and $15.8 million of home equity loans (38 individual credits). On
average, this is approximately four non-performing residential real estate loans and home equity
loans per chartered bank within the Company. The Company believes control and collection of these
loans is very manageable. At this time, management believes reserves are adequate to absorb
inherent losses that may occur upon the ultimate resolution of these credits.
Non-performing Commercial Premium Finance Receivables
The table below presents the level of non-performing property and casualty premium finance
receivables as of June 30, 2011 and 2010, and the amount of net charge-offs for the quarters then
ended.
June 30, | June 30, | |||||||
(Dollars in thousands) | 2011 | 2010 | ||||||
Non-performing premium finance receivables commercial |
$ | 14,755 | $ | 17,739 | ||||
as a percent of premium finance receivables commercial outstanding |
1.03 | % | 1.32 | % | ||||
Net (recoveries) charge-offs of premium finance receivables commercial |
$ | (3,482 | ) | $ | 17,559 | |||
annualized as a percent of average premium finance receivables
commercial |
(0.99) | % | 5.46 | % |
Fluctuations in this category may occur due to timing and nature of account collections from
insurance carriers. The Companys underwriting standards, regardless of the condition of the
economy, have remained consistent. We anticipate that net charge-offs and non-performing asset
levels in the near term will continue to be at levels that are within acceptable operating ranges
for this category of loans. Management is comfortable with administering the collections at this
level of non-performing property and casualty premium finance receivables and believes reserves are
adequate to absorb inherent losses that may occur upon the ultimate resolution of these credits.
In the second quarter of 2010, fraud perpetrated against a number of premium finance companies in
the industry, including the property and casualty division of our premium financing subsidiary,
increased both our net charge-offs and our provision for credit losses by $15.7 million. Excluding
the effect of this fraud, net charge-offs of commercial premium finance receivables would have been
$1.8 million for the second quarter of 2010, which is 0.56% of average commercial premium finance
receivables on an annualized basis. In the second quarter of 2011, the Company recovered $5.0
million from insurance coverage of the $15.7 million fraud loss recorded in the second quarter of
2010. The Company continues to pursue additional recoveries, but does not anticipate any
significant additional recoveries. Absent this recovery, net charge-offs of commercial premium
finance receivables would have been $1.5 million or 0.45% of average commercial premium finance
receivables in the second quarter of 2011.
The ratio of non-performing commercial premium finance receivables fluctuates throughout the year
due to the nature and timing of canceled account collections from insurance carriers. Due to the
nature of collateral for commercial premium finance receivables, it customarily takes 60-150 days
to convert the collateral into cash. Accordingly, the level of non-performing commercial premium
finance receivables is not necessarily indicative of the loss inherent in the portfolio. In the
event of default, Wintrust has the power to cancel the insurance policy and collect the unearned
portion of the premium from the insurance carrier. In the event of cancellation, the cash returned
in payment of the unearned premium by the insurer should generally be sufficient to cover the
receivable balance, the interest and other charges due. Due to notification requirements and
processing time by most insurance carriers, many receivables will become delinquent beyond 90 days
while the insurer is processing the return of the unearned premium. Management continues to accrue
interest until maturity as the unearned premium is ordinarily sufficient to pay-off the outstanding
balance and contractual interest due.
34
Nonperforming Loans Rollforward
The table below presents a summary of the changes in the balance of non-performing loans, excluding
covered loans, for the three and six month periods ending June 30, 2011 and 2010:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
(Dollars in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Balance at beginning of period |
$ | 155,387 | $ | 140,960 | $ | 142,132 | $ | 131,804 | ||||||||
Additions, net |
45,742 | 41,007 | 101,910 | 86,810 | ||||||||||||
Return to performing status |
(2,193 | ) | (738 | ) | (3,368 | ) | (3,825 | ) | ||||||||
Payments received |
(12,553 | ) | (8,213 | ) | (14,142 | ) | (9,513 | ) | ||||||||
Transfer to OREO |
(12,926 | ) | (13,477 | ) | (35,351 | ) | (40,723 | ) | ||||||||
Charge-offs |
(17,611 | ) | (16,481 | ) | (31,711 | ) | (28,680 | ) | ||||||||
Net change for niche loans (1) |
226 | (7,657 | ) | (3,398 | ) | (472 | ) | |||||||||
Balance at end of period |
$ | 156,072 | $ | 135,401 | $ | 156,072 | $ | 135,401 | ||||||||
(1) | This includes activity for premium finance receivables and indirect consumer loans. |
Restructured Loans
The table below presents a summary of restructured loans for the respective period, presented by
loan category and accrual status:
June 30, | March 31, | June 30, | ||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | |||||||||
Accruing: |
||||||||||||
Commercial |
$ | 12,396 | $ | 12,620 | $ | 5,110 | ||||||
Commercial real estate |
72,363 | 55,202 | 46,052 | |||||||||
Residential real estate |
1,079 | 1,560 | 2,591 | |||||||||
Total accrual |
$ | 85,838 | $ | 69,382 | $ | 53,753 | ||||||
Non-accrual: (1) |
||||||||||||
Commercial |
$ | 3,587 | $ | 5,582 | $ | 3,865 | ||||||
Commercial real estate |
12,308 | 21,174 | 6,827 | |||||||||
Residential real estate |
1,311 | 431 | 238 | |||||||||
Total non-accrual |
$ | 17,206 | $ | 27,187 | $ | 10,930 | ||||||
Total restructured loans: |
||||||||||||
Commercial |
$ | 15,983 | $ | 18,202 | $ | 8,975 | ||||||
Commercial real estate |
84,671 | 76,376 | 52,879 | |||||||||
Residential real estate |
2,390 | 1,991 | 2,829 | |||||||||
Total restructured loans |
$ | 103,044 | $ | 96,569 | $ | 64,683 | ||||||
(1) | Included in total non-performing loans. |
At June 30, 2011, the Company had $103.0 million in loans with modified terms. The $103.0
million in modified loans represents 126 credit relationships in which economic concessions were
granted to certain borrowers to better align the terms of their loans with their current ability to
pay. These actions were taken on a case-by-case basis working with these borrowers to find a
concession that would assist them in retaining their businesses or their homes and attempt to keep
these loans in an accruing status for the Company.
Subsequent to its restructuring, any restructured loan with a below market rate concession
will remain classified by the Company as a restructured loan for its duration. All restructured
loans were reviewed for collateral impairment at June 30, 2011 and approximately $4.7 million of
collateral impairment was present on restructured loans classified as non-
35
accrual and appropriately reserved for through the Companys normal reserving methodology in
the Companys allowance for loan losses.
Other Real Estate Owned
The table below presents a summary of other real estate owned, excluding covered other real estate
owned, as of June 30, 2011 and shows the activity for the respective period and the balance for
each property type:
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | |||||||||
Balance at beginning of period |
$ | 85,290 | $ | 71,214 | $ | 89,009 | ||||||
Disposals/resolved |
(8,253 | ) | (11,515 | ) | (15,201 | ) | ||||||
Transfers in at fair value, less costs to sell |
10,190 | 28,865 | 16,348 | |||||||||
Fair value adjustments |
(4,455 | ) | (3,274 | ) | (3,736 | ) | ||||||
Balance at end of period |
$ | 82,772 | $ | 85,290 | $ | 86,420 | ||||||
Period End | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
Balance by Property Type | 2011 | 2011 | 2010 | |||||||||
Residential real estate |
$ | 7,196 | $ | 10,570 | $ | 5,457 | ||||||
Residential real estate development |
16,591 | 17,808 | 27,161 | |||||||||
Commercial real estate |
58,985 | 56,912 | 53,802 | |||||||||
Total |
$ | 82,772 | $ | 85,290 | $ | 86,420 | ||||||
36
The following table provides a comparative analysis for the period end balances of the covered
asset components and any changes in the allowance for covered loan losses.
Covered Assets
June 30, | March 31, | June 30, | ||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | |||||||||
Period End Balances: |
||||||||||||
Loans |
$ | 408,669 | $ | 431,299 | $ | | ||||||
Other real estate owned |
31,053 | 36,295 | | |||||||||
FDIC Indemnification asset |
110,049 | 124,785 | | |||||||||
Total covered assets |
$ | 549,771 | $ | 592,379 | $ | | ||||||
Allowance for Covered Loan Losses Rollforward: |
||||||||||||
Balance at beginning of period |
$ | 4,844 | $ | | $ | | ||||||
Provision for covered loan losses before benefit
attributable to FDIC loss share agreements |
2,599 | 4,844 | | |||||||||
Benefit attributable to FDIC loss share agreements |
(2,078 | ) | (3,876 | ) | | |||||||
Net provision for covered loan losses |
521 | 968 | | |||||||||
Increase in FDIC indemnification asset |
2,076 | 3,876 | | |||||||||
Loans charged-off |
| | | |||||||||
Recoveries of loans charged-off |
2 | | | |||||||||
Net charge-offs |
2 | | | |||||||||
Balance at end of period |
$ | 7,443 | $ | 4,844 | $ | | ||||||
In conjunction with FDIC-assisted transactions, the Company entered into loss share agreements
with the FDIC. These agreements cover realized losses on loans, foreclosed real estate and certain
other assets. These loss share assets are measured separately from the loan portfolios because they
are not contractually embedded in the loans and are not transferable with the loans should the
Company choose to dispose of them. Fair values at the acquisition dates were estimated based on
projected cash flows available for loss-share based on the credit adjustments estimated for each
loan pool and the loss share percentages. The loss share assets are also separately measured from
the related loans and foreclosed real estate and recorded separately on the Consolidated Statements
of Condition. Subsequent to the acquisition date, reimbursements received from the FDIC for actual
incurred losses will reduce the loss share assets. Additional expected losses, to the extent such
expected losses result in the recognition of an allowance for loan losses, will increase the loss
share assets. The allowance for loan losses for loans acquired in FDIC-assisted transactions is
determined without giving consideration to the amounts recoverable through loss share agreements
(since the loss share agreements are separately accounted for and thus presented gross on the
balance sheet). On the Consolidated Statements of Income, the provision for credit losses is
reported net of changes in the amount recoverable under the loss share agreements. Reductions to
expected losses, to the extent such reductions to expected losses are the result of an improvement
to the actual or expected cash flows from the covered assets, will reduce the loss share assets.
The increases in cash flows for the purchased loans are recognized as interest income
prospectively.
37
The following table presents a summary of the discount components for the life insurance premium
finance portfolio purchase as of June 30, 2011 and shows the changes in the balances from June 30,
2010.
Purchased Loan Portfolio
Summary of Acquisition
Summary of Acquisition
Credit | ||||||||
discounts - | ||||||||
non- | ||||||||
Accretable | accretable | |||||||
(Dollars in thousands) | discounts | discounts | ||||||
Balances at June 30, 2010 |
$ | 51,779 | $ | 28,217 | ||||
- Accretion (effective yield method) |
(5,139 | ) | | |||||
- Accretion recognized as accounts
prepay |
(1,672 | ) | (1,680 | ) | ||||
- Reclassification from accretable
to nonaccretable |
(52 | ) | 52 | |||||
- Discount used for loans written off |
| (190 | ) | |||||
Balances at September 30, 2010 |
$ | 44,916 | $ | 26,399 | ||||
- Accretion (effective yield method) |
(6,873 | ) | | |||||
- Accretion recognized as accounts
prepay |
(4,591 | ) | (3,181 | ) | ||||
- Reclassification from accretable
to nonaccretable |
(137 | ) | 137 | |||||
- Discount used for loans written off |
| (128 | ) | |||||
Balances at December 31, 2010 |
$ | 33,315 | $ | 23,227 | ||||
- Accretion (effective yield method) |
(6,418 | ) | | |||||
- Accretion recognized as accounts
prepay |
(1,538 | ) | (1,096 | ) | ||||
- Reclassification from
nonaccretable to accretable |
184 | (184 | ) | |||||
- Recovery of discount used for
loans written off |
| 200 | ||||||
Balances at March 31, 2011 |
$ | 25,543 | $ | 22,147 | ||||
- Accretion (effective yield method) |
(3,629 | ) | | |||||
- Accretion recognized as accounts
prepay |
(696 | ) | (797 | ) | ||||
- Reclassification from
nonaccretable to accretable |
3,673 | (3,673 | ) | |||||
- Recovery of discount used for
loans written off |
| 100 | ||||||
- Discount used for loans written off |
| (319 | ) | |||||
Balances at June 30, 2011 |
$ | 24,891 | $ | 17,458 | ||||
38
WINTRUST SUBSIDIARIES AND LOCATIONS
Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select
Market (Nasdaq: WTFC). Its 15 community bank subsidiaries are: Lake Forest Bank & Trust Company,
Hinsdale Bank & Trust Company, North Shore Community Bank & Trust Company in Wilmette, Libertyville
Bank & Trust Company, Barrington Bank & Trust Company, Crystal Lake Bank & Trust Company,
Northbrook Bank & Trust Company, Schaumburg Bank & Trust, N.A., Village Bank & Trust in Arlington
Heights, Beverly Bank & Trust Company in Chicago, Wheaton Bank & Trust Company, State Bank of The
Lakes in Antioch, Old Plank Trail Community Bank, N.A. in New Lenox, St. Charles Bank & Trust
Company and Town Bank in Hartland, Wisconsin. The banks also operate facilities in Illinois in
Algonquin, Bloomingdale, Buffalo Grove, Cary, Chicago, Clarendon Hills, Deerfield, Downers Grove,
Frankfort, Geneva, Glencoe, Glen Ellyn, Gurnee, Grayslake, Highland Park, Highwood, Hoffman
Estates, Island Lake, Lake Bluff, Lake Villa, Lincoln Park, Lindenhurst, McHenry, Mokena, Mount
Prospect, Mundelein, Naperville, North Chicago, Northfield, Palatine, Prospect Heights, Ravenswood,
Ravinia, Riverside, Rogers Park, Roselle, Sauganash, Skokie, Spring Grove, Vernon Hills, Wauconda,
Western Springs, Willowbrook, Winnetka and Wood Dale and in Delafield, Elm Grove, Madison, Wales,
Wisconsin.
Additionally, the Company operates various non-bank subsidiaries. First Insurance Funding
Corporation, one of the largest insurance premium finance companies operating in the United States,
serves commercial and life insurance loan customers throughout the country. Tricom, Inc. of
Milwaukee provides high-yielding, short-term accounts receivable financing and value-added
out-sourced administrative services, such as data processing of payrolls, billing and cash
management services, to temporary staffing service clients located throughout the United States.
Wintrust Mortgage, a division of Barrington Bank & Trust Company, engages primarily in the
origination and purchase of residential mortgages for sale into the secondary market through
origination offices located throughout the United States. Loans are also originated nationwide
through relationships with wholesale and correspondent offices. Wayne Hummer Investments, LLC is a
broker-dealer providing a full range of private client and brokerage services to clients and
correspondent banks located primarily in the Midwest. Great Lakes Advisors provides money
management services and advisory services to individual accounts. Advanced Investment Partners,
LLC is an investment management firm specializing in the active management of domestic equity
investment strategies. The Chicago Trust Company, a trust subsidiary, allows Wintrust to service
customers trust and investment needs at each banking location. Wintrust Information Technology
Services Company provides information technology support, item capture and statement preparation
services to the Wintrust subsidiaries.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of federal securities laws.
Forward-looking information can be identified through the use of words such as intend, plan,
project, expect, anticipate, believe, estimate, contemplate, possible, point,
will, may, should, would and could. Forward-looking statements and information are not
historical facts, are premised on many factors and assumptions, and represent only managements
expectations, estimates and projections regarding future events. Similarly, these statements are
not guarantees of future performance and involve certain risks and uncertainties that are difficult
to predict, which may include, but are not limited to, those listed below and the Risk Factors
discussed under Item 1A of the Companys 2010 Annual Report on Form 10-K and in any of the
Companys 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 Companys 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
managements 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
Companys business and growth strategies, including future acquisitions of
banks, specialty finance or wealth management businesses, internal growth and plans to form
additional de novo banks or branch offices. Actual results could differ materially from those
addressed in the forward-looking statements as a result of numerous factors, including the
following:
| negative economic conditions that adversely affect the economy, housing prices, the job market and other factors that may affect the Companys liquidity and the performance of its loan portfolios, particularly in the markets in which it operates; |
| the extent of defaults and losses on the Companys loan portfolio, which may require further increases in its allowance for credit losses; |
| effects of the potential delay or failure of the U.S. federal government to pay its debts as they become due or |
39
make payments in the ordinary course; | |||
| estimates of fair value of certain of the Companys assets and liabilities, which could change in value significantly from period to period; | ||
| changes in the level and volatility of interest rates, the capital markets and other market indices that may affect, among other things, the Companys liquidity and the value of its assets and liabilities; | ||
| a decrease in the Companys regulatory capital ratios, including as a result of further declines in the value of its loan portfolios, or otherwise; | ||
| legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies, including those resulting from the Dodd-Frank Act; | ||
| restrictions upon our ability to market our products to consumers and limitations on our ability to profitably operate our mortgage business resulting from the Dodd-Frank Act; | ||
| increased costs of compliance, heightened regulatory capital requirements and other risks associated with changes in regulation and the current regulatory environment, including the Dodd-Frank Act; | ||
| changes in capital requirements resulting from Basel II and III initiatives; | ||
| increases in the Companys FDIC insurance premiums, or the collection of special assessments by the FDIC; | ||
| losses incurred in connection with repurchases and indemnification payments related to mortgages; | ||
| competitive pressures in the financial services business which may affect the pricing of the Companys loan and deposit products as well as its services (including wealth management services); | ||
| delinquencies or fraud with respect to the Companys premium finance business; | ||
| failure to identify and complete favorable acquisitions in the future or unexpected difficulties or developments related to the integration of recent or future acquisitions; | ||
| unexpected difficulties and losses related to FDIC-assisted acquisitions, including those resulting from our loss-sharing arrangements with the FDIC; | ||
| credit downgrades among commercial and life insurance providers that could negatively affect the value of collateral securing the Companys premium finance loans; | ||
| any negative perception of the Companys reputation or financial strength; | ||
| the loss of customers as a result of technological changes allowing consumers to complete their financial transactions without the use of a bank; | ||
| the ability of the Company to attract and retain senior management experienced in the banking and financial services industries; | ||
| the Companys ability to comply with covenants under its securitization facility and credit facility; | ||
| unexpected difficulties or unanticipated developments related to the Companys strategy of de novo bank formations and openings, which typically require over 13 months of operations before becoming profitable due to the impact of organizational and overhead expenses, the startup phase of generating deposits and the time lag typically involved in redeploying deposits into attractively priced loans and other higher yielding earning assets; | ||
| changes in accounting standards, rules and interpretations and the impact on the Companys financial statements; | ||
| adverse effects on our operational systems resulting from failures, human error or tampering; | ||
| significant litigation involving the Company; and | ||
| the ability of the Company to receive dividends from its subsidiaries. |
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 or on behalf of Wintrust. 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 release revisions to these forward-looking statements or
reflect events or circumstances after the date of this press release. Persons are advised,
however, to
consult further disclosures management makes on related subjects in its reports filed with the
Securities and Exchange Commission and in its press releases.
CONFERENCE CALL, WEB CAST AND REPLAY
The Company will hold a conference call at 1:00 p.m. (ET) Wednesday, July 27, 2011 regarding second
quarter 2011 results. Individuals interested in listening should call (877) 363-5049 and enter
Conference ID #83467278. A simultaneous audio-only web cast and replay of the conference call may
be accessed via the Companys web site at (http://www.wintrust.com), Investor Relations, Investor
News and Events, Presentations & Conference Calls. The text of the second quarter 2011 earnings
press release will be available on the home page of the Companys website at
(http://www.wintrust.com) and at the Investor News and Events, Press Releases link on its website.
40
WINTRUST FINANCIAL CORPORATION
Supplemental Financial Information
5 Quarter Trends
41
WINTRUST FINANCIAL CORPORATION Supplemental Financial Information
Selected Financial Highlights 5 Quarter Trends
(Dollars in thousands, except per share data)
Selected Financial Highlights 5 Quarter Trends
(Dollars in thousands, except per share data)
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
Selected Financial Condition Data (at end of period): |
||||||||||||||||||||
Total assets |
$ | 14,615,897 | $ | 14,094,294 | $ | 13,980,156 | $ | 14,100,368 | $ | 13,708,560 | ||||||||||
Total loans, excluding covered loans |
9,925,077 | 9,561,802 | 9,599,886 | 9,461,155 | 9,324,163 | |||||||||||||||
Total deposits |
11,259,260 | 10,915,169 | 10,803,673 | 10,962,239 | 10,624,742 | |||||||||||||||
Junior subordinated debentures |
249,493 | 249,493 | 249,493 | 249,493 | 249,493 | |||||||||||||||
Total shareholders equity |
1,473,386 | 1,453,253 | 1,436,549 | 1,398,912 | 1,384,736 | |||||||||||||||
Selected Statements of Income Data: |
||||||||||||||||||||
Net interest income |
108,706 | 109,614 | 112,677 | 102,980 | 104,314 | |||||||||||||||
Net revenue (1) |
145,358 | 150,501 | 157,138 | 157,636 | 154,750 | |||||||||||||||
Core pre-tax earnings (2) |
52,751 | 49,544 | 59,008 | 48,236 | 47,912 | |||||||||||||||
Net income |
11,750 | 16,402 | 14,205 | 20,098 | 13,009 | |||||||||||||||
Net income (loss) per common share Basic |
$ | 0.31 | $ | 0.44 | $ | (0.06 | ) | $ | 0.49 | $ | 0.26 | |||||||||
Net income (loss) per common share Diluted |
$ | 0.25 | $ | 0.36 | $ | (0.06 | ) | $ | 0.47 | $ | 0.25 | |||||||||
Selected Financial Ratios and Other Data: |
||||||||||||||||||||
Performance Ratios: |
||||||||||||||||||||
Net interest margin (2) |
3.40 | % | 3.48 | % | 3.46 | % | 3.22 | % | 3.43 | % | ||||||||||
Non-interest income to average assets |
1.04 | % | 1.18 | % | 1.24 | % | 1.56 | % | 1.51 | % | ||||||||||
Non-interest expense to average assets |
2.76 | % | 2.84 | % | 2.97 | % | 2.85 | % | 2.78 | % | ||||||||||
Net overhead ratio (3) |
1.72 | % | 1.66 | % | 1.73 | % | 1.28 | % | 1.26 | % | ||||||||||
Efficiency ratio (2) (4) |
67.22 | % | 65.05 | % | 67.48 | % | 67.01 | % | 59.72 | % | ||||||||||
Return on average assets |
0.33 | % | 0.47 | % | 0.40 | % | 0.57 | % | 0.39 | % | ||||||||||
Return on average common equity |
3.05 | % | 4.49 | % | (0.66) | % | 5.44 | % | 2.98 | % | ||||||||||
Average total assets |
$ | 14,105,136 | $ | 14,018,525 | $ | 14,199,351 | $ | 14,015,757 | $ | 13,390,537 | ||||||||||
Average total shareholders equity |
1,460,071 | 1,437,869 | 1,442,754 | 1,391,507 | 1,371,689 | |||||||||||||||
Average loans to average deposits ratio |
90.9 | % | 91.2 | % | 89.0 | % | 88.7 | % | 91.0 | % | ||||||||||
Average loans to average deposits ratio (including
covered loans) |
94.8 | 94.2 | 92.1 | 91.7 | 93.0 | |||||||||||||||
Common Share Data at end of period: |
||||||||||||||||||||
Market price per common share |
$ | 32.18 | $ | 36.75 | $ | 33.03 | $ | 32.41 | $ | 33.34 | ||||||||||
Book value per common share (2) |
$ | 33.63 | $ | 33.70 | $ | 32.73 | $ | 35.70 | $ | 35.33 | ||||||||||
Tangible common book value per share (2) |
$ | 26.67 | $ | 26.65 | $ | 25.80 | $ | 26.34 | $ | 25.96 | ||||||||||
Common shares outstanding |
34,988,125 | 34,947,251 | 34,864,068 | 31,143,740 | 31,084,298 | |||||||||||||||
Other Data at end of period:(9) |
||||||||||||||||||||
Leverage Ratio (5) |
10.3 | % | 10.3 | % | 10.1 | % | 10.0 | % | 10.2 | % | ||||||||||
Tier 1 Capital to risk-weighted assets (5) |
12.3 | % | 12.7 | % | 12.5 | % | 12.7 | % | 13.0 | % | ||||||||||
Total capital to risk-weighted assets (5) |
13.5 | % | 14.1 | % | 13.8 | % | 14.1 | % | 14.3 | % | ||||||||||
Tangible Common Equity ratio (TCE) (2) (8) |
7.9 | % | 8.0 | % | 8.0 | % | 5.9 | % | 6.0 | % | ||||||||||
Allowance for credit losses (6) |
$ | 119,697 | $ | 117,067 | $ | 118,037 | $ | 112,807 | $ | 108,716 | ||||||||||
Credit discounts on purchased premium
finance receivables life insurance (7) |
17,458 | 22,147 | 23,227 | 26,399 | 28,217 | |||||||||||||||
Non-performing loans |
156,072 | 155,387 | 142,132 | 134,323 | 135,401 | |||||||||||||||
Allowance for credit losses to total loans (6) |
1.21 | % | 1.22 | % | 1.23 | % | 1.19 | % | 1.17 | % | ||||||||||
Non-performing loans to total loans |
1.57 | % | 1.63 | % | 1.48 | % | 1.42 | % | 1.45 | % | ||||||||||
Number of: |
||||||||||||||||||||
Bank subsidiaries |
15 | 15 | 15 | 15 | 15 | |||||||||||||||
Non-bank subsidiaries |
7 | 8 | 8 | 8 | 8 | |||||||||||||||
Banking offices |
88 | 88 | 86 | 85 | 85 | |||||||||||||||
(1) | Net revenue includes net interest income and non-interest income | |
(2) | See Supplemental Financial Measures/Ratios for additional information on this performance measure/ratio. | |
(3) | The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that periods total average assets. A lower ratio indicates a higher degree of efficiency. | |
(4) | The efficiency ratio is calculated by dividing total non-interest expense by tax-equivalent net revenue (less securities gains or losses). A lower ratio indicates more efficient revenue generation. | |
(5) | Capital ratios for current quarter-end are estimated. | |
(6) | The allowance for credit losses includes both the allowance for loan losses and the allowance for unfunded lending-related commitments, but excluding the allowance for covered loan losses. | |
(7) | Represents the credit discounts on purchased life insurance premium finance loans. | |
(8) | Total shareholders equity minus preferred stock and total intangible assets divided by total assets minus total intangible assets | |
(9) | Asset quality ratios exclude covered loans. |
42
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Consolidated Statements of Condition 5 Quarter Trends
Consolidated Statements of Condition 5 Quarter Trends
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(In thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Assets |
||||||||||||||||||||
Cash and due from banks |
$ | 140,434 | $ | 140,919 | $ | 153,690 | $ | 155,067 | $ | 123,712 | ||||||||||
Federal funds sold and securities purchased under resale agreements |
43,634 | 33,575 | 18,890 | 88,913 | 28,664 | |||||||||||||||
Interest-bearing deposits with other banks |
990,308 | 946,193 | 865,575 | 1,224,584 | 1,110,123 | |||||||||||||||
Available-for-sale securities, at fair value |
1,456,426 | 1,710,321 | 1,496,302 | 1,324,179 | 1,418,035 | |||||||||||||||
Trading account securities |
509 | 2,229 | 4,879 | 4,935 | 38,261 | |||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost |
86,761 | 85,144 | 82,407 | 80,445 | 79,300 | |||||||||||||||
Brokerage customer receivables |
29,736 | 25,361 | 24,549 | 25,442 | 24,291 | |||||||||||||||
Mortgage loans held-for-sale, at fair value |
133,083 | 92,151 | 356,662 | 307,231 | 222,703 | |||||||||||||||
Mortgage loans held-for-sale, at lower of cost or market |
5,881 | 2,335 | 14,785 | 13,209 | 15,278 | |||||||||||||||
Loans, net of unearned income, excluding covered loans |
9,925,077 | 9,561,802 | 9,599,886 | 9,461,155 | 9,324,163 | |||||||||||||||
Covered loans |
408,669 | 431,299 | 334,353 | 353,840 | 275,563 | |||||||||||||||
Total loans |
10,333,746 | 9,993,101 | 9,934,239 | 9,814,995 | 9,599,726 | |||||||||||||||
Less: Allowance for loan losses |
117,362 | 115,049 | 113,903 | 110,432 | 106,547 | |||||||||||||||
Less: Allowance for covered loan losses |
7,443 | 4,844 | | | | |||||||||||||||
Net loans |
10,208,941 | 9,873,208 | 9,820,336 | 9,704,563 | 9,493,179 | |||||||||||||||
Premises and equipment, net |
403,577 | 369,785 | 363,696 | 353,445 | 346,806 | |||||||||||||||
FDIC indemnification asset |
110,049 | 124,785 | 118,182 | 161,640 | 114,102 | |||||||||||||||
Accrued interest receivable and other assets |
389,634 | 394,292 | 366,438 | 365,496 | 374,172 | |||||||||||||||
Trade date securities receivable |
322,091 | | | | 28,634 | |||||||||||||||
Goodwill |
283,301 | 281,940 | 281,190 | 278,025 | 278,025 | |||||||||||||||
Other intangible assets |
11,532 | 12,056 | 12,575 | 13,194 | 13,275 | |||||||||||||||
Total assets |
$ | 14,615,897 | $ | 14,094,294 | $ | 13,980,156 | $ | 14,100,368 | $ | 13,708,560 | ||||||||||
Liabilities and Shareholders Equity |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Non-interest bearing |
$ | 1,397,433 | $ | 1,279,256 | $ | 1,201,194 | $ | 1,042,730 | $ | 953,814 | ||||||||||
Interest bearing |
9,861,827 | 9,635,913 | 9,602,479 | 9,919,509 | 9,670,928 | |||||||||||||||
Total deposits |
11,259,260 | 10,915,169 | 10,803,673 | 10,962,239 | 10,624,742 | |||||||||||||||
Notes payable |
1,000 | 1,000 | 1,000 | 1,000 | 1,000 | |||||||||||||||
Federal Home Loan Bank advances |
423,500 | 423,500 | 423,500 | 414,832 | 415,571 | |||||||||||||||
Other borrowings |
432,706 | 250,032 | 260,620 | 241,522 | 218,424 | |||||||||||||||
Secured borrowings owed to securitization investors |
600,000 | 600,000 | 600,000 | 600,000 | 600,000 | |||||||||||||||
Subordinated notes |
40,000 | 50,000 | 50,000 | 55,000 | 55,000 | |||||||||||||||
Junior subordinated debentures |
249,493 | 249,493 | 249,493 | 249,493 | 249,493 | |||||||||||||||
Trade date securities payable |
2,243 | 10,000 | | 2,045 | 200 | |||||||||||||||
Accrued interest payable and other liabilities |
134,309 | 141,847 | 155,321 | 175,325 | 159,394 | |||||||||||||||
Total liabilities |
13,142,511 | 12,641,041 | 12,543,607 | 12,701,456 | 12,323,824 | |||||||||||||||
Shareholders Equity: |
||||||||||||||||||||
Preferred stock |
49,704 | 49,672 | 49,640 | 287,234 | 286,460 | |||||||||||||||
Common stock |
34,989 | 34,947 | 34,864 | 31,145 | 31,084 | |||||||||||||||
Surplus |
969,314 | 967,587 | 965,203 | 682,318 | 680,261 | |||||||||||||||
Treasury stock |
(50 | ) | (74 | ) | | (51 | ) | (4 | ) | |||||||||||
Retained earnings |
415,297 | 404,580 | 392,354 | 394,323 | 381,969 | |||||||||||||||
Accumulated other comprehensive income (loss) |
4,132 | (3,459 | ) | (5,512 | ) | 3,943 | 4,966 | |||||||||||||
Total shareholders equity |
1,473,386 | 1,453,253 | 1,436,549 | 1,398,912 | 1,384,736 | |||||||||||||||
Total liabilities and shareholders equity |
$ | 14,615,897 | $ | 14,094,294 | $ | 13,980,156 | $ | 14,100,368 | $ | 13,708,560 | ||||||||||
43
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Consolidated Statements of Income (Unaudited) 5 Quarter Trends
Consolidated Statements of Income (Unaudited) 5 Quarter Trends
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(In thousands, except per share data) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Interest income |
||||||||||||||||||||
Interest and fees on loans |
$ | 132,338 | $ | 136,543 | $ | 144,652 | $ | 137,902 | $ | 135,800 | ||||||||||
Interest bearing deposits with banks |
870 | 936 | 1,342 | 1,339 | 1,215 | |||||||||||||||
Federal funds sold and securities purchased under resale agreements |
23 | 32 | 39 | 35 | 34 | |||||||||||||||
Securities |
11,438 | 9,540 | 7,236 | 7,438 | 11,218 | |||||||||||||||
Trading account securities |
10 | 13 | 11 | 19 | 343 | |||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank stock |
572 | 550 | 512 | 488 | 472 | |||||||||||||||
Brokerage customer receivables |
194 | 166 | 170 | 180 | 166 | |||||||||||||||
Total interest income |
145,445 | 147,780 | 153,962 | 147,401 | 149,248 | |||||||||||||||
Interest expense |
||||||||||||||||||||
Interest on deposits |
22,404 | 23,956 | 27,853 | 31,088 | 31,626 | |||||||||||||||
Interest on Federal Home Loan Bank advances |
4,010 | 3,958 | 4,038 | 4,042 | 4,094 | |||||||||||||||
Interest on notes payable and other borrowings |
2,715 | 2,630 | 1,631 | 1,411 | 1,439 | |||||||||||||||
Interest on secured borrowings owed to securitization investors |
2,994 | 3,040 | 3,089 | 3,167 | 3,115 | |||||||||||||||
Interest on subordinated notes |
194 | 212 | 233 | 265 | 256 | |||||||||||||||
Interest on junior subordinated debentures |
4,422 | 4,370 | 4,441 | 4,448 | 4,404 | |||||||||||||||
Total interest expense |
36,739 | 38,166 | 41,285 | 44,421 | 44,934 | |||||||||||||||
Net interest income |
108,706 | 109,614 | 112,677 | 102,980 | 104,314 | |||||||||||||||
Provision for credit losses |
29,187 | 25,344 | 28,795 | 25,528 | 41,297 | |||||||||||||||
Net interest income after provision for credit losses |
79,519 | 84,270 | 83,882 | 77,452 | 63,017 | |||||||||||||||
Non-interest income |
||||||||||||||||||||
Wealth management |
10,601 | 10,236 | 10,108 | 8,973 | 9,193 | |||||||||||||||
Mortgage banking |
12,817 | 11,631 | 22,686 | 20,980 | 7,985 | |||||||||||||||
Service charges on deposit accounts |
3,594 | 3,311 | 3,346 | 3,384 | 3,371 | |||||||||||||||
Gains on available-for-sale securities, net |
1,152 | 106 | 159 | 9,235 | 46 | |||||||||||||||
Gain on bargain purchases |
746 | 9,838 | 250 | 6,593 | 26,494 | |||||||||||||||
Trading (losses) gains |
(30 | ) | (440 | ) | 611 | 210 | (1,617 | ) | ||||||||||||
Other |
7,772 | 6,205 | 7,301 | 5,281 | 4,964 | |||||||||||||||
Total non-interest income |
36,652 | 40,887 | 44,461 | 54,656 | 50,436 | |||||||||||||||
Non-interest expense |
||||||||||||||||||||
Salaries and employee benefits |
53,079 | 56,099 | 59,031 | 57,014 | 50,649 | |||||||||||||||
Equipment |
4,409 | 4,264 | 4,384 | 4,203 | 4,046 | |||||||||||||||
Occupancy, net |
6,772 | 6,505 | 5,927 | 6,254 | 6,033 | |||||||||||||||
Data processing |
3,147 | 3,523 | 4,388 | 3,891 | 3,669 | |||||||||||||||
Advertising and marketing |
1,440 | 1,614 | 1,881 | 1,650 | 1,470 | |||||||||||||||
Professional fees |
4,533 | 3,546 | 4,775 | 4,555 | 3,957 | |||||||||||||||
Amortization of other intangible assets |
704 | 689 | 719 | 701 | 674 | |||||||||||||||
FDIC insurance |
3,281 | 4,518 | 4,572 | 4,642 | 5,005 | |||||||||||||||
OREO expenses, net |
6,577 | 5,808 | 7,384 | 4,767 | 5,843 | |||||||||||||||
Other |
13,264 | 11,543 | 13,140 | 12,046 | 11,317 | |||||||||||||||
Total non-interest expense |
97,206 | 98,109 | 106,201 | 99,723 | 92,663 | |||||||||||||||
Income before taxes |
18,965 | 27,048 | 22,142 | 32,385 | 20,790 | |||||||||||||||
Income tax expense |
7,215 | 10,646 | 7,937 | 12,287 | 7,781 | |||||||||||||||
Net income |
$ | 11,750 | $ | 16,402 | $ | 14,205 | $ | 20,098 | $ | 13,009 | ||||||||||
Preferred stock dividends and discount accretion |
$ | 1,033 | $ | 1,031 | $ | 16,175 | $ | 4,943 | $ | 4,943 | ||||||||||
Net income (loss) applicable to common shares |
$ | 10,717 | $ | 15,371 | $ | (1,970 | ) | $ | 15,155 | $ | 8,066 | |||||||||
Net income (loss) per common share Basic |
$ | 0.31 | $ | 0.44 | $ | (0.06 | ) | $ | 0.49 | $ | 0.26 | |||||||||
Net income (loss) per common share Diluted |
$ | 0.25 | $ | 0.36 | $ | (0.06 | ) | $ | 0.47 | $ | 0.25 | |||||||||
Cash dividends declared per common share |
$ | | $ | 0.09 | $ | | $ | 0.09 | $ | | ||||||||||
Weighted average common shares outstanding |
34,971 | 34,928 | 32,015 | 31,117 | 31,074 | |||||||||||||||
Dilutive potential common shares |
8,438 | 7,794 | | 988 | 1,267 | |||||||||||||||
Average common shares and dilutive common shares |
43,409 | 42,722 | 32,015 | 32,105 | 32,341 | |||||||||||||||
44
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Period End Loan Balances 5 Quarter Trends
Period End Loan Balances 5 Quarter Trends
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Balance: |
||||||||||||||||||||
Commercial |
$ | 2,132,436 | $ | 1,937,561 | $ | 2,049,326 | $ | 1,952,791 | $ | 1,827,618 | ||||||||||
Commercial real estate |
3,374,668 | 3,356,562 | 3,338,007 | 3,331,498 | 3,347,823 | |||||||||||||||
Home equity |
880,702 | 891,332 | 914,412 | 919,824 | 922,305 | |||||||||||||||
Residential real-estate |
329,381 | 344,909 | 353,336 | 342,009 | 332,673 | |||||||||||||||
Premium finance receivables commercial |
1,429,436 | 1,337,851 | 1,265,500 | 1,323,934 | 1,346,985 | |||||||||||||||
Premium finance receivables life insurance |
1,619,668 | 1,539,521 | 1,521,886 | 1,434,994 | 1,378,657 | |||||||||||||||
Indirect consumer (1) |
57,718 | 52,379 | 51,147 | 56,575 | 69,011 | |||||||||||||||
Consumer and other |
101,068 | 101,687 | 106,272 | 99,530 | 99,091 | |||||||||||||||
Total loans, net of unearned income,
excluding covered loans |
$ | 9,925,077 | $ | 9,561,802 | $ | 9,599,886 | $ | 9,461,155 | $ | 9,324,163 | ||||||||||
Covered loans |
408,669 | 431,299 | 334,353 | 353,840 | 275,563 | |||||||||||||||
Total loans, net of unearned income |
$ | 10,333,746 | $ | 9,993,101 | $ | 9,934,239 | $ | 9,814,995 | $ | 9,599,726 | ||||||||||
Mix: |
||||||||||||||||||||
Commercial |
20 | % | 19 | % | 21 | % | 20 | % | 19 | % | ||||||||||
Commercial real estate |
33 | 34 | 34 | 34 | 35 | |||||||||||||||
Home equity |
8 | 9 | 9 | 9 | 10 | |||||||||||||||
Residential real-estate |
3 | 4 | 3 | 3 | 3 | |||||||||||||||
Premium finance receivables commercial |
14 | 13 | 13 | 13 | 14 | |||||||||||||||
Premium finance receivables life insurance |
16 | 15 | 15 | 15 | 14 | |||||||||||||||
Indirect consumer (1) |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Consumer and other |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Total loans, net of unearned income,
excluding covered loans |
96 | % | 96 | % | 97 | % | 96 | % | 97 | % | ||||||||||
Covered loans |
4 | 4 | 3 | 4 | 3 | |||||||||||||||
Total loans, net of unearned income |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
(1) | Includes autos, boats, snowmobiles and other indirect consumer loans. |
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Period End Deposits Balances 5 Quarter Trends
Period End Deposits Balances 5 Quarter Trends
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Balance: |
||||||||||||||||||||
Non-interest bearing |
$ | 1,397,433 | $ | 1,279,256 | $ | 1,201,194 | $ | 1,042,730 | $ | 953,814 | ||||||||||
NOW |
1,530,068 | 1,526,955 | 1,561,507 | 1,551,749 | 1,560,733 | |||||||||||||||
Wealth Management deposits (1) |
737,428 | 659,194 | 658,660 | 710,435 | 694,830 | |||||||||||||||
Money Market |
1,985,661 | 1,844,416 | 1,759,866 | 1,746,168 | 1,722,729 | |||||||||||||||
Savings |
736,974 | 749,681 | 744,534 | 713,823 | 594,753 | |||||||||||||||
Time certificates of deposit |
4,871,696 | 4,855,667 | 4,877,912 | 5,197,334 | 5,097,883 | |||||||||||||||
Total deposits |
$ | 11,259,260 | $ | 10,915,169 | $ | 10,803,673 | $ | 10,962,239 | $ | 10,624,742 | ||||||||||
Mix: |
||||||||||||||||||||
Non-interest bearing |
12 | % | 12 | % | 11 | % | 10 | % | 9 | % | ||||||||||
NOW |
14 | 14 | 15 | 14 | 15 | |||||||||||||||
Wealth Management deposits (1) |
6 | 6 | 6 | 6 | 6 | |||||||||||||||
Money Market |
18 | 17 | 16 | 16 | 16 | |||||||||||||||
Savings |
7 | 7 | 7 | 7 | 6 | |||||||||||||||
Time certificates of deposit |
43 | 44 | 45 | 47 | 48 | |||||||||||||||
Total deposits |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
(1) | Represents deposit balances of the Companys subsidiary banks from brokerage customers of Wayne Hummer Investments, trust and asset management customes of The Chicago Trust Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts of the Banks. |
45
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin (Including Call Option Income) 5 Quarter Trends
Net Interest Margin (Including Call Option Income) 5 Quarter Trends
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Net interest income |
$ | 109,114 | $ | 110,028 | $ | 113,083 | $ | 103,396 | $ | 104,775 | ||||||||||
Call option income |
2,287 | 2,470 | 1,075 | 703 | 169 | |||||||||||||||
Net interest income including call option income |
$ | 111,401 | $ | 112,498 | $ | 114,158 | $ | 104,099 | $ | 104,944 | ||||||||||
Yield on earning assets |
4.54 | % | 4.68 | % | 4.72 | % | 4.59 | % | 4.91 | % | ||||||||||
Rate on interest-bearing liabilities |
1.32 | 1.39 | 1.43 | 1.55 | 1.65 | |||||||||||||||
Rate spread |
3.22 | % | 3.29 | % | 3.29 | % | 3.04 | % | 3.26 | % | ||||||||||
Net free funds contribution |
0.18 | 0.19 | 0.17 | 0.18 | 0.17 | |||||||||||||||
Net interest margin |
3.40 | 3.48 | 3.46 | 3.22 | 3.43 | |||||||||||||||
Call option income |
0.07 | 0.08 | 0.03 | 0.02 | 0.01 | |||||||||||||||
Net interest margin including call option income |
3.47 | % | 3.56 | % | 3.49 | % | 3.24 | % | 3.44 | % | ||||||||||
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin (Including Call Option Income YTD Trends)
Net Interest Margin (Including Call Option Income YTD Trends)
Six Months Ended | Years Ended | |||||||||||||||||||
June 30, | December 31, | |||||||||||||||||||
(Dollars in thousands) | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||
Net interest income |
$ | 219,142 | $ | 417,565 | $ | 314,096 | $ | 247,054 | $ | 264,777 | ||||||||||
Call option income |
4,757 | 2,236 | 1,998 | 29,024 | 2,628 | |||||||||||||||
Net interest income including call option income |
$ | 223,899 | $ | 419,801 | $ | 316,094 | $ | 276,078 | $ | 267,405 | ||||||||||
Yield on earning assets |
4.61 | % | 4.80 | % | 5.07 | % | 5.88 | % | 7.21 | % | ||||||||||
Rate on interest-bearing liabilities |
1.35 | 1.61 | 2.29 | 3.31 | 4.39 | |||||||||||||||
Rate spread |
3.26 | % | 3.19 | % | 2.78 | % | 2.57 | % | 2.82 | % | ||||||||||
Net free funds contribution |
0.18 | 0.18 | 0.23 | 0.24 | 0.29 | |||||||||||||||
Net interest margin |
3.44 | 3.37 | 3.01 | 2.81 | 3.11 | |||||||||||||||
Call option income |
0.07 | 0.02 | 0.02 | 0.33 | 0.03 | |||||||||||||||
Net interest margin including call option income |
3.51 | % | 3.39 | % | 3.03 | % | 3.14 | % | 3.14 | % | ||||||||||
46
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Quarterly Average Balances 5 Quarter Trends
Quarterly Average Balances 5 Quarter Trends
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(In thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Liquidity management assets |
$ | 2,591,398 | $ | 2,632,012 | $ | 2,844,351 | $ | 2,802,964 | $ | 2,613,179 | ||||||||||
Other earning assets |
28,886 | 27,718 | 29,676 | 34,263 | 62,874 | |||||||||||||||
Loans, net of unearned income |
9,859,789 | 9,849,309 | 9,777,435 | 9,603,561 | 9,356,033 | |||||||||||||||
Covered loans |
418,129 | 326,571 | 337,690 | 325,751 | 210,030 | |||||||||||||||
Total earning assets |
$ | 12,898,202 | $ | 12,835,610 | $ | 12,989,152 | $ | 12,766,539 | $ | 12,242,116 | ||||||||||
Allowance for loan losses |
(125,537 | ) | (118,610 | ) | (116,447 | ) | (113,631 | ) | (108,764 | ) | ||||||||||
Cash and due from banks |
135,670 | 152,264 | 151,562 | 154,078 | 137,531 | |||||||||||||||
Other assets |
1,196,801 | 1,149,261 | 1,175,084 | 1,208,771 | 1,119,654 | |||||||||||||||
Total assets |
$ | 14,105,136 | $ | 14,018,525 | $ | 14,199,351 | $ | 14,015,757 | $ | 13,390,537 | ||||||||||
Interest-bearing deposits |
$ | 9,491,778 | $ | 9,542,637 | $ | 9,839,223 | $ | 9,823,525 | $ | 9,348,541 | ||||||||||
Federal Home Loan Bank advances |
421,502 | 416,021 | 415,260 | 414,789 | 417,835 | |||||||||||||||
Notes payable and other borrowings |
338,304 | 266,379 | 244,044 | 232,991 | 217,751 | |||||||||||||||
Secured borrowings owed to securitization investors |
600,000 | 600,000 | 600,000 | 600,000 | 600,000 | |||||||||||||||
Subordinated notes |
45,440 | 50,000 | 53,369 | 55,000 | 57,198 | |||||||||||||||
Junior subordinated notes |
249,493 | 249,493 | 249,493 | 249,493 | 249,493 | |||||||||||||||
Total interest-bearing liabilities |
$ | 11,146,517 | $ | 11,124,530 | $ | 11,401,389 | $ | 11,375,798 | $ | 10,890,818 | ||||||||||
Non-interest bearing deposits |
1,349,549 | 1,261,374 | 1,148,208 | 1,005,170 | 932,046 | |||||||||||||||
Other liabilities |
148,999 | 194,752 | 207,000 | 243,282 | 195,984 | |||||||||||||||
Equity |
1,460,071 | 1,437,869 | 1,442,754 | 1,391,507 | 1,371,689 | |||||||||||||||
Total liabilities and shareholders equity |
$ | 14,105,136 | $ | 14,018,525 | $ | 14,199,351 | $ | 14,015,757 | $ | 13,390,537 | ||||||||||
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin 5 Quarter Trends
Net Interest Margin 5 Quarter Trends
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
Yield earned on: |
||||||||||||||||||||
Liquidity management assets |
2.04 | % | 1.75 | % | 1.32 | % | 1.36 | % | 2.04 | % | ||||||||||
Other earning assets |
2.89 | 2.65 | 2.45 | 2.37 | 3.28 | |||||||||||||||
Loans, net of unearned income |
5.05 | 5.34 | 5.71 | 5.54 | 5.71 | |||||||||||||||
Covered loans |
8.06 | 8.78 | 4.75 | 4.84 | 5.12 | |||||||||||||||
4.54 | % | 4.68 | % | 4.72 | % | 4.59 | % | 4.91 | % | |||||||||||
Rate paid on: |
||||||||||||||||||||
Interest-bearing deposits |
0.95 | % | 1.02 | % | 1.12 | % | 1.26 | % | 1.36 | % | ||||||||||
Federal Home Loan Bank advances |
3.82 | 3.86 | 3.86 | 3.87 | 3.93 | |||||||||||||||
Notes payable and other borrowings |
3.22 | 4.00 | 2.65 | 2.40 | 2.65 | |||||||||||||||
Secured borrowings owed to securitization investors |
2.00 | 2.05 | 2.04 | 2.09 | 2.08 | |||||||||||||||
Subordinated notes |
1.69 | 1.69 | 1.71 | 1.89 | 1.77 | |||||||||||||||
Junior subordinated notes |
7.01 | 7.01 | 6.97 | 6.98 | 6.98 | |||||||||||||||
1.32 | % | 1.39 | % | 1.43 | % | 1.55 | % | 1.65 | % | |||||||||||
Interest rate spread |
3.22 | % | 3.29 | % | 3.29 | % | 3.04 | % | 3.26 | % | ||||||||||
Net free funds/contribution |
0.18 | 0.19 | 0.17 | 0.18 | 0.17 | |||||||||||||||
Net interest income/Net interest margin |
3.40 | % | 3.48 | % | 3.46 | % | 3.22 | % | 3.43 | % | ||||||||||
47
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Non-Interest Income 5 Quarter Trends
Non-Interest Income 5 Quarter Trends
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(In thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Brokerage |
$ | 6,208 | $ | 6,325 | $ | 6,641 | $ | 5,806 | $ | 5,712 | ||||||||||
Trust and asset management |
4,393 | 3,911 | 3,467 | 3,167 | 3,481 | |||||||||||||||
Total wealth management |
10,601 | 10,236 | 10,108 | 8,973 | 9,193 | |||||||||||||||
Mortgage banking |
12,817 | 11,631 | 22,686 | 20,980 | 7,985 | |||||||||||||||
Service charges on deposit accounts |
3,594 | 3,311 | 3,346 | 3,384 | 3,371 | |||||||||||||||
Gains on available-for-sale securities |
1,152 | 106 | 159 | 9,235 | 46 | |||||||||||||||
Gain on bargain purchases |
746 | 9,838 | 250 | 6,593 | 26,494 | |||||||||||||||
Trading (losses) gains |
(30 | ) | (440 | ) | 611 | 210 | (1,617 | ) | ||||||||||||
Other: |
||||||||||||||||||||
Fees from covered call options |
2,287 | 2,470 | 1,074 | 703 | 169 | |||||||||||||||
Bank Owned Life Insurance |
661 | 876 | 811 | 552 | 418 | |||||||||||||||
Administrative services |
781 | 717 | 715 | 744 | 708 | |||||||||||||||
Miscellaneous |
4,043 | 2,142 | 4,701 | 3,282 | 3,669 | |||||||||||||||
Total other income |
7,772 | 6,205 | 7,301 | 5,281 | 4,964 | |||||||||||||||
Total Non-Interest Income |
$ | 36,652 | $ | 40,887 | $ | 44,461 | $ | 54,656 | $ | 50,436 | ||||||||||
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Non-Interest Expense 5 Quarter Trends
Non-Interest Expense 5 Quarter Trends
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(In thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Salaries and employee benefits: |
||||||||||||||||||||
Salaries |
$ | 32,008 | $ | 33,135 | $ | 31,876 | $ | 30,537 | $ | 28,714 | ||||||||||
Commissions and bonus |
10,760 | 10,714 | 18,043 | 17,366 | 12,967 | |||||||||||||||
Benefits |
10,311 | 12,250 | 9,112 | 9,111 | 8,968 | |||||||||||||||
Total salaries and employee benefits |
53,079 | 56,099 | 59,031 | 57,014 | 50,649 | |||||||||||||||
Equipment |
4,409 | 4,264 | 4,384 | 4,203 | 4,046 | |||||||||||||||
Occupancy, net |
6,772 | 6,505 | 5,927 | 6,254 | 6,033 | |||||||||||||||
Data processing |
3,147 | 3,523 | 4,388 | 3,891 | 3,669 | |||||||||||||||
Advertising and marketing |
1,440 | 1,614 | 1,881 | 1,650 | 1,470 | |||||||||||||||
Professional fees |
4,533 | 3,546 | 4,775 | 4,555 | 3,957 | |||||||||||||||
Amortization of other intangibles |
704 | 689 | 719 | 701 | 674 | |||||||||||||||
FDIC insurance |
3,281 | 4,518 | 4,572 | 4,642 | 5,005 | |||||||||||||||
OREO expenses, net |
6,577 | 5,808 | 7,384 | 4,767 | 5,843 | |||||||||||||||
Other: |
||||||||||||||||||||
Commissions - 3rd party brokers |
991 | 1,030 | 965 | 979 | 1,097 | |||||||||||||||
Postage |
1,170 | 1,078 | 1,220 | 1,254 | 1,229 | |||||||||||||||
Stationery and supplies |
888 | 840 | 1,069 | 812 | 761 | |||||||||||||||
Miscellaneous |
10,215 | 8,595 | 9,886 | 9,001 | 8,230 | |||||||||||||||
Total other expense |
13,264 | 11,543 | 13,140 | 12,046 | 11,317 | |||||||||||||||
Total Non-Interest Expense |
$ | 97,206 | $ | 98,109 | $ | 106,201 | $ | 99,723 | $ | 92,663 | ||||||||||
48
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Allowance for Credit Losses, excluding covered loans 5 Quarter Trends
Allowance for Credit Losses, excluding covered loans 5 Quarter Trends
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Allowance for loan losses at beginning of period |
$ | 115,049 | $ | 113,903 | $ | 110,432 | $ | 106,547 | $ | 102,397 | ||||||||||
Provision for credit losses |
28,666 | 24,376 | 28,795 | 25,528 | 41,297 | |||||||||||||||
Other adjustments |
| | | | ||||||||||||||||
Reclassification (to)/from allowance for unfunded
lending-related commitments |
(317 | ) | 2,116 | (1,781 | ) | (206 | ) | 785 | ||||||||||||
Charge-offs: |
||||||||||||||||||||
Commercial |
7,583 | 9,140 | 6,060 | 3,076 | 4,781 | |||||||||||||||
Commercial real estate |
20,691 | 13,342 | 13,591 | 15,727 | 12,311 | |||||||||||||||
Home equity |
1,300 | 773 | 1,322 | 1,234 | 3,089 | |||||||||||||||
Residential real estate |
282 | 1,275 | 311 | 116 | 310 | |||||||||||||||
Premium finance receivables commercial |
1,893 | 1,507 | 1,820 | 1,505 | 17,747 | |||||||||||||||
Premium finance receivables life insurance |
214 | 30 | 154 | 79 | | |||||||||||||||
Indirect consumer |
44 | 120 | 239 | 198 | 256 | |||||||||||||||
Consumer and other |
266 | 160 | 565 | 288 | 109 | |||||||||||||||
Total charge-offs |
32,273 | 26,347 | 24,062 | 22,223 | 38,603 | |||||||||||||||
Recoveries: |
||||||||||||||||||||
Commercial |
301 | 266 | 268 | 286 | 143 | |||||||||||||||
Commercial real estate |
463 | 338 | 57 | 197 | 218 | |||||||||||||||
Home equity |
19 | 8 | 2 | 8 | 6 | |||||||||||||||
Residential real estate |
3 | 2 | 2 | 3 | 2 | |||||||||||||||
Premium finance receivables commercial |
5,375 | 268 | 144 | 220 | 188 | |||||||||||||||
Premium finance receivables life insurance |
12 | | | | | |||||||||||||||
Indirect consumer |
42 | 66 | 38 | 29 | 81 | |||||||||||||||
Consumer and other |
22 | 53 | 8 | 43 | 33 | |||||||||||||||
Total recoveries |
6,237 | 1,001 | 519 | 786 | 671 | |||||||||||||||
Net charge-offs |
(26,036 | ) | (25,346 | ) | (23,543 | ) | (21,437 | ) | (37,932 | ) | ||||||||||
Allowance for loan losses at period end |
$ | 117,362 | $ | 115,049 | $ | 113,903 | $ | 110,432 | $ | 106,547 | ||||||||||
Allowance for unfunded lending-related
commitments at period end |
2,335 | 2,018 | 4,134 | 2,375 | 2,169 | |||||||||||||||
Allowance for credit losses at period end |
$ | 119,697 | $ | 117,067 | $ | 118,037 | $ | 112,807 | $ | 108,716 | ||||||||||
Annualized net charge-offs by category as a
percentage of its own respective categorys
average: |
||||||||||||||||||||
Commercial |
1.45 | % | 1.85 | % | 1.11 | % | 0.60 | % | 1.04 | % | ||||||||||
Commercial real estate |
2.40 | 1.57 | 1.66 | 1.84 | 1.45 | |||||||||||||||
Home equity |
0.58 | 0.34 | 0.57 | 0.53 | 1.34 | |||||||||||||||
Residential real estate |
0.25 | 0.91 | 0.17 | 0.07 | 0.23 | |||||||||||||||
Premium finance receivables commercial |
(0.99 | ) | 0.37 | 0.54 | 0.39 | 5.46 | ||||||||||||||
Premium finance receivables life insurance |
0.05 | 0.01 | 0.04 | 0.02 | | |||||||||||||||
Indirect consumer |
0.02 | 0.41 | 1.51 | 1.08 | 0.92 | |||||||||||||||
Consumer and other |
0.98 | 0.42 | 1.98 | 1.01 | 0.27 | |||||||||||||||
Total loans, net of unearned income |
1.06 | % | 1.04 | % | 0.96 | % | 0.89 | % | 1.63 | % | ||||||||||
Net charge-offs as a percentage of the
provision for credit losses |
90.83 | % | 103.98 | % | 81.76 | % | 83.97 | % | 91.85 | % | ||||||||||
Loans at period-end |
$ | 9,925,077 | $ | 9,561,802 | $ | 9,599,886 | $ | 9,461,155 | $ | 9,324,163 | ||||||||||
Allowance for loan losses as a percentage of loans at period end |
1.18 | % | 1.20 | % | 1.19 | % | 1.17 | % | 1.14 | % | ||||||||||
Allowance for credit losses as a percentage of loans at period end |
1.21 | % | 1.22 | % | 1.23 | % | 1.19 | % | 1.17 | % |
49
WINTRUST FINANCIAL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION
Non-Performing Assets, excluding covered assets 5 Quarter Trends
Non-Performing Assets, excluding covered assets 5 Quarter Trends
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2011 | 2011 | 2010 | 2010 | 2010 | |||||||||||||||
Loans past due greater than 90 days and still accruing: |
||||||||||||||||||||
Commercial |
$ | | $ | 150 | $ | 478 | $ | | $ | 99 | ||||||||||
Commercial real-estate |
| 1,997 | | | 2,248 | |||||||||||||||
Home equity |
| | | | | |||||||||||||||
Residential real-estate |
| | | | | |||||||||||||||
Premium finance receivables commercial |
4,446 | 6,319 | 8,096 | 6,853 | 6,350 | |||||||||||||||
Premium finance receivables life insurance |
324 | | | 1,222 | 1,923 | |||||||||||||||
Indirect consumer |
284 | 310 | 318 | 355 | 579 | |||||||||||||||
Consumer and other |
| 1 | 1 | 2 | 3 | |||||||||||||||
Total loans past due greater than 90 days and still accruing |
5,054 | 8,777 | 8,893 | 8,432 | 11,202 | |||||||||||||||
Non-accrual loans: |
||||||||||||||||||||
Commercial |
26,168 | 26,157 | 16,382 | 19,444 | 17,741 | |||||||||||||||
Commercial real-estate |
89,793 | 94,001 | 93,963 | 83,340 | 82,984 | |||||||||||||||
Home equity |
15,853 | 11,184 | 7,425 | 6,144 | 7,149 | |||||||||||||||
Residential real-estate |
7,379 | 4,909 | 6,085 | 6,644 | 4,436 | |||||||||||||||
Premium finance receivables commercial |
10,309 | 9,550 | 8,587 | 9,082 | 11,389 | |||||||||||||||
Premium finance receivables life insurance |
670 | 342 | 354 | 222 | | |||||||||||||||
Indirect consumer |
89 | 320 | 191 | 446 | 438 | |||||||||||||||
Consumer and other |
757 | 147 | 252 | 569 | 62 | |||||||||||||||
Total non-accrual loans |
151,018 | 146,610 | 133,239 | 125,891 | 124,199 | |||||||||||||||
Total non-performing loans: |
||||||||||||||||||||
Commercial |
26,168 | 26,307 | 16,860 | 19,444 | 17,840 | |||||||||||||||
Commercial real-estate |
89,793 | 95,998 | 93,963 | 83,340 | 85,232 | |||||||||||||||
Home equity |
15,853 | 11,184 | 7,425 | 6,144 | 7,149 | |||||||||||||||
Residential real-estate |
7,379 | 4,909 | 6,085 | 6,644 | 4,436 | |||||||||||||||
Premium finance receivables commercial |
14,755 | 15,869 | 16,683 | 15,935 | 17,739 | |||||||||||||||
Premium finance receivables life insurance |
994 | 342 | 354 | 1,444 | 1,923 | |||||||||||||||
Indirect consumer |
373 | 630 | 509 | 801 | 1,017 | |||||||||||||||
Consumer and other |
757 | 148 | 253 | 571 | 65 | |||||||||||||||
Total non-performing loans |
$ | 156,072 | $ | 155,387 | $ | 142,132 | $ | 134,323 | $ | 135,401 | ||||||||||
Other real estate owned |
82,772 | 85,290 | 71,214 | 76,654 | 86,420 | |||||||||||||||
Total non-performing assets |
$ | 238,844 | $ | 240,677 | $ | 213,346 | $ | 210,977 | $ | 221,821 | ||||||||||
Total non-performing loans by category as a percent of
its own respective categorys period-end balance: |
||||||||||||||||||||
Commercial |
1.23 | % | 1.36 | % | 0.82 | % | 1.00 | % | 0.98 | % | ||||||||||
Commercial real-estate |
2.66 | 2.86 | 2.81 | 2.50 | 2.55 | |||||||||||||||
Home equity |
1.80 | 1.25 | 0.81 | 0.67 | 0.78 | |||||||||||||||
Residential real-estate |
2.24 | 1.42 | 1.72 | 1.94 | 1.33 | |||||||||||||||
Premium finance receivables commercial |
1.03 | 1.19 | 1.32 | 1.20 | 1.32 | |||||||||||||||
Premium finance receivables life insurance |
0.06 | 0.02 | 0.02 | 0.10 | 0.14 | |||||||||||||||
Indirect consumer |
0.65 | 1.20 | 0.99 | 1.42 | 1.47 | |||||||||||||||
Consumer and other |
0.75 | 0.15 | 0.24 | 0.57 | 0.07 | |||||||||||||||
Total loans |
1.57 | % | 1.63 | % | 1.48 | % | 1.42 | % | 1.45 | % | ||||||||||
Total non-performing assets as a percentage
of total assets |
1.63 | % | 1.71 | % | 1.53 | % | 1.50 | % | 1.62 | % | ||||||||||
Allowance for loan losses as a percentage
total non-performing loans |
75.20 | % | 74.04 | % | 80.14 | % | 82.21 | % | 78.69 | % | ||||||||||
50