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Wintrust Financial Corporation Reports Record First Quarter 2021 Net Income of $153.1 million

Company Release - 4/19/2021 4:41 PM ET

ROSEMONT, Ill., April 19, 2021 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, "we" or "our") (Nasdaq: WTFC) announced record net income of $153.1 million or $2.54 per diluted common share for the first quarter of 2021, an increase in diluted earnings per common share of 56% compared to the fourth quarter of 2020 and an increase of 144% compared to the first quarter of 2020.

Highlights of the First Quarter of 2021:
Comparative information to the fourth quarter of 2020

  • Total assets increased by $601 million.
  • Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $515 million.
    • Originated $1.3 billion of PPP loans in the first quarter of 2021 which generated fees of $51.2 million, net of $1.8 million of deferred costs, to be recognized over the estimated life of the loans.
    • PPP loans originated in 2020 declined by $667 million in the first quarter of 2021 primarily as a result of processing forgiveness payments. As of April 16, 2021, approximately 42% of PPP loan balances originated in 2020 have been forgiven, approximately 40% of balances are in the forgiveness review or submission process, and approximately 18% of balances have yet to apply for forgiveness.
  • Total deposits increased by $780 million.
  • Total investment securities increased by $1.0 billion as the Company deployed a portion of its excess liquidity.
  • Net interest income increased by $2.5 million primarily due to earning asset growth and increased PPP loan fee accretion, despite two less days in the first quarter of 2021. Each day has an approximately $3 million impact on net interest income.
    • The Company recognized $19.2 million of PPP loan fee accretion in the first quarter of 2021 as compared to $16.8 million in the fourth quarter of 2020. As of March 31, 2021, the Company had approximately $64.6 million of net PPP loan fees that have yet to be recognized in income.
  • The loans to deposits ratio ended the first quarter of 2021 at 87.6% as compared to 86.5% as of December 31, 2020. Excluding PPP loans, the loans to deposits ratio ended the first quarter of 2021 at 78.9%.
  • Mortgage banking revenue increased by $26.7 million to $113.5 million for the first quarter of 2021 as compared to $86.8 million in the fourth quarter of 2020.
    • Recorded an increase in the value of mortgage servicing rights related to changes in fair value model assumptions of $18.0 million in the first quarter of 2021 as compared to a decrease of $5.2 million in the fourth quarter of 2020.
  • Recorded a negative provision for credit losses of $45.3 million in the first quarter of 2021 as compared to $1.2 million of expense in the fourth quarter of 2020.
  • Recorded net charge-offs of $13.3 million in the first quarter of 2021 as compared to net charge-offs of $10.3 million in the fourth quarter of 2020. Net charge-offs as a percentage of average total loans totaled 17 basis points in the first quarter of 2021 on an annualized basis compared to 13 basis points on an annualized basis in the fourth quarter of 2020.
  • The allowance for credit losses on our core loan portfolio is approximately 1.62% of the outstanding balance as of March 31, 2021, down from 2.00% as of December 31, 2020. See Table 11 for more information.
  • Non-performing loans declined significantly and totaled $99.1 million, or 0.30% of total loans, as of March 31, 2021 as compared to $127.5 million, or 0.40% of total loans, as of December 31, 2020.
  • The outstanding balance of COVID-19 related modified loans totaled approximately $254 million or 0.8% of total loans, excluding PPP loans, as of March 31, 2021 as compared to $345 million or 1.2% as of December 31, 2020.
  • Tangible book value per common share (non-GAAP) increased to $55.42 as compared to $53.23 as of December 31, 2020.

Other items of note from the first quarter of 2021

  • The following items had a $5.8 million unfavorable pre-tax income impact on the first quarter of 2021:
    • Recognized $3.8 million of expense related to impairment of certain capitalized software costs based on an evaluation of remaining useful life.
    • Recorded an impairment charge of $1.4 million in occupancy expense as part of an ongoing effort to optimize our branch footprint.
    • Recorded severance expense of $626,000.

Edward J. Wehmer, Founder and Chief Executive Officer, commented, "Wintrust reported record net income of $153.1 million for the first quarter of 2021, up from $101.2 million in the fourth quarter of 2020. Pre-tax income, excluding provision for credit losses (non-GAAP) increased by 19% to $161.5 million for the first quarter of 2021 as compared to $135.9 million in the fourth quarter of 2020. The first quarter of 2021 was characterized by strong loan growth, increased net interest income, record mortgage banking revenue, a release of reserves as our credit quality and macroeconomic forecasts improved and a continued focus to increase franchise value in our market area."

Mr. Wehmer continued, "The Company experienced strong loan growth in the first quarter of 2021, including growth in its commercial, commercial real estate, residential real estate loans for investment and life insurance premium finance receivable portfolios. The loan growth occurred in the latter part of the quarter as total period end loans, excluding PPP loans, were $523 million higher than average total loans, excluding PPP loans, in the first quarter of 2021. Our loan pipelines remain strong and we expect to leverage our various core and niche portfolios to continue to grow loans. Total deposits increased by $780 million as compared to the fourth quarter of 2020 primarily due to an increase in non-interest bearing deposits related to PPP loan origination. We continue to emphasize growing our franchise, including gathering low cost deposits, which we believe will drive value in the long term. Our loans to deposits ratio ended the quarter at 87.6% and we believe that we have sufficient liquidity to meet customer loan demand."

Mr. Wehmer commented, "Net interest income increased in the first quarter of 2021 primarily due to earning asset growth and increased PPP loan fee accretion. Net interest margin was unchanged as the rate on interest-bearing liabilities declined seven basis points in the first quarter of 2021 as compared to the fourth quarter of 2020 effectively offsetting a six basis point decline in the yield on total earning assets. PPP loan fee accretion increased as the Company recognized $19.2 million of PPP loan fee accretion in the first quarter of 2021 as compared to $16.8 million in the fourth quarter of 2020. Additionally, we deployed a portion of excess liquidity during the first quarter of 2021 to purchase investment securities increasing our period end total securities by $1.0 billion as compared to December 31, 2020. The majority of the security purchases were in the latter part of the quarter after long term interest rates had increased. As a result, period end investment securities were $743 million higher than average investment securities in the first quarter of 2021 which is expected to favorably impact net interest margin in future quarters. We continue to maintain excess liquidity and believe that deploying such liquidity could potentially increase our net interest margin."

Mr. Wehmer noted, “Our mortgage banking business reported record mortgage banking revenue of $113.5 million in the first quarter of 2021. Loan volumes originated for sale in the first quarter of 2021 were $2.2 billion, down slightly from $2.4 billion in the fourth quarter of 2020. The Company allocated a greater portion of its mortgage originations for investment to benefit future quarters. Additionally, the Company recorded an $18.0 million increase in the value of mortgage servicing rights related to changes in fair value model assumptions. The strong quarter of mortgage performance contributed to reporting a 0.90% net overhead ratio for the first quarter of 2021. We believe the second quarter of 2021 will provide another strong quarter for mortgage banking production as an influx in seasonal purchase demand is expected to help offset an expected decline in refinance activity."

Commenting on credit quality, Mr. Wehmer stated, "The Company recorded a negative provision for credit losses of $45.3 million related to both improving credit quality and macroeconomic forecasts. The level of non-performing loans decreased by $28.5 million primarily due to non-performing loan pay-offs. Additionally, net charge-offs remained relatively low totaling $13.3 million in the first quarter of 2021 as compared to $10.3 million in the fourth quarter of 2020. The allowance for credit losses on our core loan portfolio as of March 31, 2021 is approximately 1.62% of the outstanding balance. We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit." 

Mr. Wehmer continued, "We remain committed to supporting our community, including the well-being and safety of our customers and employees. We have actively participated in the latest rounds of PPP approved in 2021 and as of April 16, 2021 have processed over 7,900 applications aggregating in excess of $1.3 billion of loans. We are carefully monitoring the COVID-19 pandemic including its potential impact on the economy, our customers and our business. We remain focused on navigating the current environment by actively monitoring and managing our credit portfolio."

Mr. Wehmer concluded, "Our first quarter of 2021 results continued to demonstrate the multi-faceted nature of our business model which we believe uniquely positions us to be successful. While Wintrust and the banking industry as a whole have experienced significant net interest margin compression, we have been able to compensate for that with outstanding mortgage banking results. Additionally, we leverage a differentiated, diversified loan portfolio to outperform peers with respect to loan growth. We are focused on taking advantage of market opportunities to prudently deploy excess liquidity into earning assets including core and niche loans and investment securities while maintaining an interest rate sensitive asset portfolio. We remain diligent in our evaluation of acquisition targets and will be prudent in our decision-making, always seeking to minimize dilution. Finally, we evaluate our operating expense base on an ongoing basis to enhance future profitability."

The graphs below illustrate certain financial highlights of the first quarter of 2021 as well as historical financial performance. See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 17 for additional information with respect to non-GAAP financial measures/ratios, including the reconciliations to the corresponding GAAP financial measures/ratios.

Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/4e11acd7-e400-475a-8133-4d0d52f51413

SUMMARY OF RESULTS:

BALANCE SHEET

Total asset growth of $601 million in the first quarter of 2021 was primarily comprised of a $1.1 billion increase in loans and a $1.0 billion increase in investment securities, partially offset by a $1.5 billion decrease in interest-bearing deposits with banks. Total investment securities increased by $1.0 billion as the Company deployed a portion of its excess liquidity as market returns improved due to the change in long-term interest rates. Total loans, excluding PPP loans, increased by $515 million primarily due to growth in the commercial, commercial real estate, residential real estate loans for investment and life insurance premium finance receivable portfolios. The Company believes that the $3.3 billion of interest-bearing deposits with banks held as of March 31, 2021 provides sufficient liquidity to operate its business plan.

Total liabilities increased $465 million in the first quarter of 2021 resulting primarily from a $780 million increase in total deposits, partially offset by a $200 million decrease in trade date securities payable. The increase in deposits was primarily due to a $549 million increase in non-interest-bearing deposits primarily related to PPP loans originated in 2021. The Company's loans to deposits ratio ended the quarter at 87.6%. Management believes in substantially funding the Company's balance sheet with core deposits and utilizes brokered or wholesale funding sources as appropriate to manage its liquidity position as well as for interest rate risk management purposes.

For more information regarding changes in the Company’s balance sheet, see Consolidated Statements of Condition and Tables 1 through 3 in this report.

NET INTEREST INCOME

For the first quarter of 2021, net interest income totaled $261.9 million, an increase of $2.5 million as compared to the fourth quarter of 2020 and an increase of $452,000 as compared to the first quarter of 2020. The $2.5 million increase in net interest income in the first quarter of 2021 compared to the fourth quarter of 2020 was primarily due to earning asset growth and increased PPP loan fee accretion, despite two less days in the first quarter of 2021.

Net interest margin was 2.53% (2.54% on a fully taxable-equivalent basis, non-GAAP) during the first quarter of 2021 unchanged from 2.53% (2.54% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2020 and down from 3.12% (3.14% on a fully taxable-equivalent basis, non-GAAP) during the first quarter of 2020.  The net interest margin was unchanged from the prior quarter due to the six basis point decline in the yield on earning assets and one basis point decrease in the net free funds contribution being offset by a seven basis point decrease in the rate paid on interest-bearing liabilities. The six basis point decline in the yield on earning assets in the first quarter of 2021 as compared to the fourth quarter of 2020 was primarily due to an eight basis point decline in yield earned on loans partially offset by a three basis point increase in yield on liquidity management assets. The decrease in the rate paid on interest-bearing liabilities in the first quarter of 2021 as compared to the prior quarter is primarily due to a six basis point decrease in the rate paid on interest-bearing deposits primarily due to lower repricing of time deposits.

For more information regarding net interest income, see Tables 4 through 7 in this report.

ASSET QUALITY

The allowance for credit losses totaled $321.3 million as of March 31, 2021, a decrease of $58.7 million as compared to $380.0 million as of December 31, 2020. The allowance for credit losses decreased primarily due to improvements in the macroeconomic forecast in addition to improvement in portfolio characteristics throughout the quarter. Notably, there was a decrease in the allowance for credit losses in the Commercial Real Estate portfolio primarily driven by improvement in the Commercial Real Estate Price Index and Baa Corporate Credit Spreads forecasts. Other key drivers of allowance for credit losses changes include, but are not limited to, decreases in COVID-19 related loan modifications and loan risk rating migration.

A negative provision for credit losses totaling $45.3 million was recorded for the first quarter of 2021 compared to $1.2 million of expense for the fourth quarter of 2020 and $53.0 million of expense for the first quarter of 2020. For more information regarding the provision for credit losses, see Table 10 in this report.

Management believes the allowance for credit losses is appropriate to account for expected credit losses. The Current Expected Credit Losses ("CECL") standard requires the Company to estimate expected credit losses over the life of the Company’s financial assets at a certain point in time. There can be no assurances, however, that future losses will not significantly exceed the amounts provided for, thereby affecting future results of operations. A summary of the allowance for credit losses calculated for the loan components in each portfolio as of March 31, 2021 and December 31, 2020 is shown on Table 11 of this report.

Net charge-offs totaled $13.3 million in the first quarter of 2021, a $3.0 million increase from $10.3 million in the fourth quarter of 2020 and a $8.0 million increase from $5.3 million in the first quarter of 2020. Net charge-offs as a percentage of average total loans totaled 17 basis points in the first quarter of 2021 on an annualized basis compared to 13 basis points on an annualized basis in the fourth quarter of 2020 and eight basis points on an annualized basis in the first quarter of 2020. For more information regarding net charge-offs, see Table 9 in this report.

As of March 31, 2021, $28.0 million of all loans, or 0.1%, were 60 to 89 days past due and $151.7 million, or 0.5%, were 30 to 59 days (or one payment) past due. As of December 31, 2020, $41.6 million of all loans, or 0.1%, were 60 to 89 days past due and $139.1 million, or 0.4%, were 30 to 59 days (or one payment) past due. Many of the commercial and commercial real-estate loans shown as 60 to 89 days and 30 to 59 days past due are included on the Company’s internal problem loan reporting system. Loans on this system are closely monitored by management on a monthly basis.

The Company’s home equity and residential real estate loan portfolios continue to exhibit low delinquency rates as of March 31, 2021. Home equity loans at March 31, 2021 that are current with regard to the contractual terms of the loan agreement represent 98.3% of the total home equity portfolio. Residential real estate loans at March 31, 2021 that are current with regards to the contractual terms of the loan agreements comprised 97.4% of total residential real estate loans outstanding. For more information regarding past due loans, see Table 12 in this report. 

The outstanding balance of COVID-19 related modified loans totaled approximately $254 million or 0.8% of total loans, excluding PPP loans as of March 31, 2021 as compared to $345 million or 1.2% as of December 31, 2020. The most significant proportion of outstanding modifications changed terms to interest-only payments.

The ratio of non-performing assets to total assets was 0.25% as of March 31, 2021, compared to 0.32% at December 31, 2020, and 0.49% at March 31, 2020. Non-performing assets totaled $114.9 million at March 31, 2021, compared to $144.1 million at December 31, 2020 and $190.4 million at March 31, 2020. Non-performing loans totaled $99.1 million, or 0.30% of total loans, at March 31, 2021 compared to $127.5 million, or 0.40% of total loans, at December 31, 2020 and $179.4 million, or 0.65% of total loans, at March 31, 2020. The decrease in non-performing loans as of March 31, 2021 as compared to December 31, 2020 is primarily due to payments throughout the quarter. A significant portion of these payments were attributed to refinance activity with some payments resulting from the sale of underlying collateral. Reductions in non-performing loans were also accomplished through note sales and movement to other real estate owned ("OREO"). OREO totaled $15.8 million at March 31, 2021, a decrease of $745,000 compared to $16.6 million at December 31, 2020 and an increase of $4.8 million compared to $11.0 million at March 31, 2020. Management is pursuing the resolution of all non-performing assets. At this time, management believes OREO is appropriately valued at the lower of carrying value or fair value less estimated costs to sell. For more information regarding non-performing assets, see Table 13 in this report.

NON-INTEREST INCOME

Wealth management revenue increased by $2.5 million during the first quarter of 2021 as compared to the fourth quarter of 2020 primarily due to increased trust and asset management fees and brokerage commissions. Wealth management revenue is comprised of the trust and asset management revenue of The Chicago Trust Company and Great Lakes Advisors, the brokerage commissions, managed money fees and insurance product commissions at Wintrust Investments and fees from tax-deferred like-kind exchange services provided by the Chicago Deferred Exchange Company.

Mortgage banking revenue increased by $26.7 million in the first quarter of 2021 as compared to the fourth quarter of 2020, primarily due to an $18.0 million favorable mortgage servicing rights portfolio fair value adjustment as compared to a $5.2 million decrease recognized in the prior quarter related to changes in fair value model assumptions. Loans originated for sale were $2.2 billion in the first quarter of 2021, a decrease of $129.3 million as compared to the fourth quarter of 2020. The percentage of origination volume from refinancing activities was 73% in the first quarter of 2021 as compared to 65% in the fourth quarter of 2020. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market.

During the first quarter of 2021, the fair value of the mortgage servicing rights portfolio increased primarily due to the capitalization of $24.6 million of servicing rights and a fair value adjustment increase of $18.0 million partially offset by a reduction in value of $10.2 million due to payoffs and paydowns of the existing portfolio. No economic hedges were outstanding relative to the mortgage servicing rights portfolio during the fourth quarter of 2020 or first quarter of 2021.

Operating lease income increased by $2.3 million in the first quarter of 2021 as compared to the fourth quarter of 2020.  The increase is primarily due to a $1.5 million gain recognized on sale of lease assets in the first quarter of 2021.

Other non-interest income decreased by $4.0 million in the first quarter of 2021 as compared to the fourth quarter of 2020 primarily due to decreased interest rate swap fees and bank owned life insurance ("BOLI") revenue.

For more information regarding non-interest income, see Tables 14 and 15 in this report.

NON-INTEREST EXPENSE

Salaries and employee benefits expense increased by $9.7 million in the first quarter of 2021 as compared to the fourth quarter of 2020. The $9.7 million increase is comprised of an increase of $9.0 million in commissions and incentive compensation and an increase of $3.2 million in employee benefits expense, partially offset by a decrease of $2.5 million in salaries expense. The increase in commissions and incentive compensation is primarily due to higher expenses associated with the Company's long term incentive program and higher commissions related to its mortgage and wealth management businesses. The increase in employee benefits is primarily related to higher employee payroll taxes.

Advertising and marketing expense totaled $8.5 million in the first quarter of 2021, a decrease of $1.3 million as compared to the fourth quarter of 2020. The decrease in the first quarter relates primarily to decreased digital advertising campaigns and printing costs. Marketing costs are incurred to promote the Company's brand, commercial banking capabilities and various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the Company's non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs utilized which are determined based on the market area, targeted audience, competition and various other factors.

Miscellaneous expense in the first quarter of 2021 decreased by $5.0 million as compared to the fourth quarter of 2020. The first quarter of 2021 included a $937,000 reversal of contingent consideration expense related to the previous acquisition of mortgage operations as compared to $6.6 million of expense in the fourth quarter of 2020. The liability for contingent consideration expense related to the previous acquisition of mortgage operations is based upon forward looking mortgage origination volumes and the estimated profitability of that operation. Should those assumptions change going forward, the liability may need to be increased or decreased. The contractual period covering contingent consideration ends in January 2023 and the final two years of the contract contemplate a lower ratio of contingent consideration relative to financial performance. As a result, the Company does not expect to have material adjustments to the contingent consideration liability in future periods. The Company also recognized $3.8 million of expense related to impairment of certain capitalized software costs based on an evaluation of remaining useful life.  Miscellaneous expense also includes ATM expenses, correspondent bank charges, directors fees, telephone, travel and entertainment, corporate insurance, dues and subscriptions, problem loan expenses and lending origination costs that are not deferred.

For more information regarding non-interest expense, see Table 16 in this report.

INCOME TAXES

The Company recorded income tax expense of $53.7 million in the first quarter of 2021 compared to $33.5 million in the fourth quarter of 2020 and $24.3 million in the first quarter of 2020. The effective tax rates were 25.97% in the first quarter of 2021 compared to 24.87% in the fourth quarter of 2020 and 27.87% in the first quarter of 2020.

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking unit, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the first quarter of 2021, this unit expanded its loan portfolio and its deposit portfolio. In addition, the segment's net interest margin remained relatively stable in the first quarter of 2021 as compared to the fourth quarter of 2020.

Mortgage banking revenue was $113.5 million for the first quarter of 2021, an increase of $26.7 million as compared to the fourth quarter of 2020 primarily due to an $18.0 million favorable mortgage servicing rights portfolio fair value adjustment as compared to a $5.2 million decrease recognized in the prior quarter related to changes in fair value model assumptions. Service charges on deposit accounts totaled $12.0 million in the first quarter of 2021, an increase of $195,000 as compared to the fourth quarter of 2020 primarily due to higher account analysis fees. The Company's gross commercial and commercial real estate loan pipelines remained strong as of March 31, 2021. Before the impact of scheduled payments and prepayments, gross commercial and commercial real estate loan pipelines were estimated to be approximately $1.3 billion to $1.5 billion at March 31, 2021. When adjusted for the probability of closing, the pipelines were estimated to be approximately $800 million to $900 million at March 31, 2021.

Specialty Finance

Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries, accounts receivable financing and value-added, out-sourced administrative services and other services. Originations within the insurance premium financing receivables portfolio were $2.8 billion during the first quarter of 2021 and average balances increased by $263.7 million as compared to the fourth quarter of 2020. The increase in average balances was more than offset by margin compression in this portfolio resulting in a $5.0 million decrease in interest income attributed to the lower market rates of interest associated with the insurance premium finance receivables portfolio. The Company's leasing business grew during the first quarter of 2021, with its portfolio of assets, including capital leases, loans and equipment on operating leases, increasing by $106.6 million to $2.2 billion at the end of the first quarter of 2021. Revenues from the Company's out-sourced administrative services business were $1.3 million in the first quarter of 2021, essentially unchanged from the fourth quarter of 2020.

Wealth Management

Through four separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, tax-deferred like-kind exchange services, asset management, securities brokerage services and 401(k) and retirement plan services. Wealth management revenue totaled $29.3 million in the first quarter of 2021, an increase of $2.5 million compared to the fourth quarter of 2020. Increases in asset management fees were primarily due to favorable equity market performance during the first quarter of 2021. At March 31, 2021, the Company’s wealth management subsidiaries had approximately $32.2 billion of assets under administration, which included $4.2 billion of assets owned by the Company and its subsidiary banks, representing a $2.1 billion increase from the $30.1 billion of assets under administration at December 31, 2020.

ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS

Paycheck Protection Program

On March 27, 2020, the President of the United States signed the CARES Act, which authorized the Small Business Administration ("SBA") to guarantee loans under the PPP for small businesses who met the necessary eligibility requirements in order to keep their workers on the payroll. The Company began accepting applications on April 3, 2020. From such date through March 31, 2021, the Company secured authorization from the SBA for and funded over 19,400 PPP loans with a carrying balance of approximately $4.8 billion. As of March 31, 2021, the carrying balance of such loans was reduced to approximately $3.3 billion primarily resulting from forgiveness by the SBA.

WINTRUST FINANCIAL CORPORATION 
Key Operating Measures

Wintrust’s key operating measures and growth rates for the first quarter of 2021, as compared to the fourth quarter of 2020 (sequential quarter) and first quarter of 2020 (linked quarter), are shown in the table below:

              % or(1)
basis point  (bp)
change from
4th Quarter
2020
  % or
basis point  (bp)
change from
1st Quarter
2020
    Three Months Ended  
(Dollars in thousands, except per share data)   Mar 31, 2021   Dec 31, 2020   Mar 31, 2020  
Net income   $ 153,148      $ 101,204     $ 62,812   51     %   144     %
Pre-tax income, excluding provision for credit losses (non-GAAP) (2)   161,512      135,891     140,044   19         15      
Net income per common share – diluted   2.54      1.63     1.04   56         144      
Net revenue (3)   448,401      417,758     374,685   7         20      
Net interest income   261,895      259,397     261,443   1              
Net interest margin   2.53  %   2.53 %   3.12 %     bp   (59 )   bps
Net interest margin - fully taxable equivalent (non-GAAP) (2)   2.54      2.54     3.14           (60 )    
Net overhead ratio (4)   0.90      1.12     1.33   (22 )       (43 )    
Return on average assets   1.38      0.92     0.69   46         69      
Return on average common equity   15.80      10.30     6.82   550         898      
Return on average tangible common equity (non-GAAP) (2)   19.49      12.95     8.73   654         1,076      
At end of period                      
Total assets   $ 45,682,202      $ 45,080,768     $ 38,799,847   5     %   18     %
Total loans (5)   33,171,233      32,079,073     27,807,321   14         19      
Total deposits   37,872,652      37,092,651     31,461,660   9         20      
Total shareholders’ equity   4,252,511      4,115,995     3,700,393   13         15      

(1) Period-end balance sheet percentage changes are annualized. 
(2) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 17 for additional information on this performance measure/ratio.
(3) Net revenue is net interest income plus non-interest income.
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period's average total assets. A lower ratio indicates a higher degree of efficiency.
(5) Excludes mortgage loans held-for-sale.

Certain returns, yields, performance ratios, or quarterly growth rates are “annualized” in this presentation to represent an annual time period. This is done for analytical purposes to better discern, for decision-making purposes, underlying performance trends when compared to full-year or year-over-year amounts. For example, a 5% growth rate for a quarter would represent an annualized 20% growth rate. Additional supplemental financial information showing quarterly trends can be found on the Company’s website at www.wintrust.com by choosing “Financial Reports” under the “Investor Relations” heading, and then choosing “Financial Highlights.”

 

WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights

    Three Months Ended
(Dollars in thousands, except per share data)   Mar 31,
2021
  Dec 31,
2020
  Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
Selected Financial Condition Data (at end of period):
Total assets   $ 45,682,202     $ 45,080,768     $ 43,731,718     $ 43,540,017     $ 38,799,847  
Total loans (1)   33,171,233     32,079,073     32,135,555     31,402,903     27,807,321  
Total deposits   37,872,652     37,092,651     35,844,422     35,651,874     31,461,660  
Junior subordinated debentures   253,566     253,566     253,566     253,566     253,566  
Total shareholders’ equity   4,252,511     4,115,995     4,074,089     3,990,218     3,700,393  
Selected Statements of Income Data:
Net interest income   $ 261,895     $ 259,397     $ 255,936     $ 263,131     $ 261,443  
Net revenue (2)   448,401     417,758     426,529     425,124     374,685  
Net income   153,148     101,204     107,315     21,659     62,812  
Pre-tax income, excluding provision for credit losses (non-GAAP) (3)   161,512     135,891     162,310     165,756     140,044  
Net income per common share – Basic   2.57     1.64     1.68     0.34     1.05  
Net income per common share – Diluted   2.54     1.63     1.67     0.34     1.04  
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin   2.53 %   2.53 %   2.56 %   2.73 %   3.12 %
Net interest margin - fully taxable equivalent (non-GAAP) (3)   2.54     2.54     2.57     2.74     3.14  
Non-interest income to average assets   1.68     1.44     1.58     1.55     1.24  
Non-interest expense to average assets   2.59     2.56     2.45     2.48     2.58  
Net overhead ratio (4)   0.90     1.12     0.87     0.93     1.33  
Return on average assets   1.38     0.92     0.99     0.21     0.69  
Return on average common equity   15.80     10.30     10.66     2.17     6.82  
Return on average tangible common equity (non-GAAP) (3)   19.49     12.95     13.43     2.95     8.73  
Average total assets   $ 44,988,733     $ 43,810,005     $ 42,962,844     $ 42,042,729     $ 36,625,490  
Average total shareholders’ equity   4,164,890     4,050,286     4,034,902     3,908,846     3,710,169  
Average loans to average deposits ratio   87.1 %   87.9 %   89.6 %   87.8 %   90.1 %
Period-end loans to deposits ratio   87.6     86.5     89.7     88.1     88.4  
Common Share Data at end of period:
Market price per common share   $ 75.80     $ 61.09     $ 40.05     $ 43.62     $ 32.86  
Book value per common share   67.34     65.24     63.57     62.14     62.13  
Tangible book value per common share (non-GAAP) (3)   55.42     53.23     51.70     50.23     50.18  
Common shares outstanding   57,023,273     56,769,625     57,601,991     57,573,672     57,545,352  
Other Data at end of period:
Tier 1 leverage ratio (5)   8.2 %   8.1 %   8.2 %   8.1 %   8.5 %
Risk-based capital ratios:                    
Tier 1 capital ratio (5)   10.1     10.0     10.2     10.1     9.3  
Common equity tier 1 capital ratio(5)   9.0     8.8     9.0     8.8     8.9  
Total capital ratio (5)   12.6     12.6     12.9     12.8     11.9  
Allowance for credit losses (6)   $ 321,308     $ 379,969     $ 388,971     $ 373,174     $ 253,482  
Allowance for loan and unfunded lending-related commitment losses to total loans   0.97 %   1.18 %   1.21 %   1.19 %   0.91 %
Number of:                    
Bank subsidiaries   15     15     15     15     15  
Banking offices   182     181     182     186     187  

(1) Excludes mortgage loans held-for-sale. 
(2) Net revenue is net interest income and non-interest income.
(3) See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 17 for additional information on this performance measure/ratio.
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s total average assets. A lower ratio indicates a higher degree of efficiency.
(5) Capital ratios for current quarter-end are estimated.
(6) The allowance for credit losses includes the allowance for loan losses, the allowance for unfunded lending-related commitments and the allowance for held-to-maturity securities losses.


WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

    (Unaudited)       (Unaudited)   (Unaudited)   (Unaudited)
    Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(In thousands)   2021   2020   2020   2020   2020
Assets                    
Cash and due from banks   $ 426,325       $ 322,415       $ 308,639       $ 344,999       $ 349,118    
Federal funds sold and securities purchased under resale agreements   52       59       56       58       309    
Interest-bearing deposits with banks   3,348,794       4,802,527       3,825,823       4,015,072       1,943,743    
Available-for-sale securities, at fair value   2,430,749       3,055,839       2,946,459       3,194,961       3,570,959    
Held-to-maturity securities, at amortized cost   2,166,419       579,138       560,267       728,465       865,376    
Trading account securities   951       671       1,720       890       2,257    
Equity securities with readily determinable fair value   90,338       90,862       54,398       52,460       47,310    
Federal Home Loan Bank and Federal Reserve Bank stock   135,881       135,588       135,568       135,571       134,546    
Brokerage customer receivables   19,056       17,436       16,818       14,623       16,293    
Mortgage loans held-for-sale   1,260,193       1,272,090       959,671       833,163       656,934    
Loans, net of unearned income   33,171,233       32,079,073       32,135,555       31,402,903       27,807,321    
Allowance for loan losses   (277,709 )     (319,374 )     (325,959 )     (313,510 )     (216,050 )  
Net loans   32,893,524       31,759,699       31,809,596       31,089,393       27,591,271    
Premises and equipment, net   760,522       768,808       774,288       769,909       764,583    
Lease investments, net   238,984       242,434       230,373       237,040       207,147    
Accrued interest receivable and other assets   1,230,362       1,351,455       1,424,728       1,437,832       1,460,168    
Trade date securities receivable                           502,207    
Goodwill   646,017       645,707       644,644       644,213       643,441    
Other intangible assets   34,035       36,040       38,670       41,368       44,185    
Total assets   $ 45,682,202       $ 45,080,768       $ 43,731,718       $ 43,540,017       $ 38,799,847    
Liabilities and Shareholders’ Equity                    
Deposits:                    
Non-interest-bearing   $ 12,297,337       $ 11,748,455       $ 10,409,747       $ 10,204,791       $ 7,556,755    
Interest-bearing   25,575,315       25,344,196       25,434,675       25,447,083       23,904,905    
Total deposits   37,872,652       37,092,651       35,844,422       35,651,874       31,461,660    
Federal Home Loan Bank advances   1,228,436       1,228,429       1,228,422       1,228,416       1,174,894    
Other borrowings   516,877       518,928       507,395       508,535       487,503    
Subordinated notes   436,595       436,506       436,385       436,298       436,179    
Junior subordinated debentures   253,566       253,566       253,566       253,566       253,566    
Trade date securities payable   995       200,907                      
Accrued interest payable and other liabilities   1,120,570       1,233,786       1,387,439       1,471,110       1,285,652    
Total liabilities   41,429,691       40,964,773       39,657,629       39,549,799       35,099,454    
Shareholders’ Equity:                    
Preferred stock   412,500       412,500       412,500       412,500       125,000    
Common stock   58,727       58,473       58,323       58,294       58,266    
Surplus   1,663,008       1,649,990       1,647,049       1,643,864       1,652,063    
Treasury stock   (100,363 )     (100,363 )     (44,891 )     (44,891 )     (44,891 )  
Retained earnings   2,208,535       2,080,013       2,001,949       1,921,048       1,917,558    
Accumulated other comprehensive income (loss)   10,104       15,382       (841 )     (597 )     (7,603 )  
Total shareholders’ equity   4,252,511       4,115,995       4,074,089       3,990,218       3,700,393    
Total liabilities and shareholders’ equity   $ 45,682,202       $ 45,080,768       $ 43,731,718       $ 43,540,017       $ 38,799,847    

 

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

  Three Months Ended
(In thousands, except per share data) Mar 31,
2021
  Dec 31,
2020
  Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
Interest income                  
Interest and fees on loans $ 274,100       $ 280,185       $ 280,479       $ 294,746       $ 301,839    
Mortgage loans held-for-sale 9,036       6,357       5,791       4,764       3,165    
Interest-bearing deposits with banks 1,199       1,294       1,181       1,310       4,768    
Federal funds sold and securities purchased under resale agreements                   16       86    
Investment securities 19,264       18,243       21,819       27,105       32,467    
Trading account securities 2       11       6       13       7    
Federal Home Loan Bank and Federal Reserve Bank stock 1,745       1,775       1,774       1,765       1,577    
Brokerage customer receivables 123       116       106       97       158    
Total interest income 305,469       307,981       311,156       329,816       344,067    
Interest expense                  
Interest on deposits 27,944       32,602       39,084       50,057       67,435    
Interest on Federal Home Loan Bank advances 4,840       4,952       4,947       4,934       3,360    
Interest on other borrowings 2,609       2,779       3,012       3,436       3,546    
Interest on subordinated notes 5,477       5,509       5,474       5,506       5,472    
Interest on junior subordinated debentures 2,704       2,742       2,703       2,752       2,811    
Total interest expense 43,574       48,584       55,220       66,685       82,624    
Net interest income 261,895       259,397       255,936       263,131       261,443    
Provision for credit losses (45,347 )     1,180       25,026       135,053       52,961    
Net interest income after provision for credit losses 307,242       258,217       230,910       128,078       208,482    
Non-interest income                  
Wealth management 29,309       26,802       24,957       22,636       25,941    
Mortgage banking 113,494       86,819       108,544       102,324       48,326    
Service charges on deposit accounts 12,036       11,841       11,497       10,420       11,265    
Gains (losses) on investment securities, net 1,154       1,214       411       808       (4,359 )  
Fees from covered call options                         2,292    
Trading gains (losses), net 419       (102 )     183       (634 )     (451 )  
Operating lease income, net 14,440       12,118       11,717       11,785       11,984    
Other 15,654       19,669       13,284       14,654       18,244    
Total non-interest income 186,506       158,361       170,593       161,993       113,242    
Non-interest expense                  
Salaries and employee benefits 180,809       171,116       164,042       154,156       136,762    
Equipment 20,912       20,565       17,251       15,846       14,834    
Operating lease equipment depreciation 10,771       9,938       9,425       9,292       9,260    
Occupancy, net 19,996       19,687       15,830       16,893       17,547    
Data processing 6,048       5,728       5,689       10,406       8,373    
Advertising and marketing 8,546       9,850       7,880       7,704       10,862    
Professional fees 7,587       6,530       6,488       7,687       6,721    
Amortization of other intangible assets 2,007       2,634       2,701       2,820       2,863    
FDIC insurance 6,558       7,016       6,772       7,081       4,135    
OREO expense, net (251 )     (114 )     (168 )     237       (876 )  
Other 23,906       28,917       28,309       27,246       24,160    
Total non-interest expense 286,889       281,867       264,219       259,368       234,641    
Income before taxes 206,859       134,711       137,284       30,703       87,083    
Income tax expense 53,711       33,507       29,969       9,044       24,271    
Net income $ 153,148       $ 101,204       $ 107,315       $ 21,659       $ 62,812    
Preferred stock dividends 6,991       6,991       10,286       2,050       2,050    
Net income applicable to common shares $ 146,157       $ 94,213       $ 97,029       $ 19,609       $ 60,762    
Net income per common share - Basic $ 2.57       $ 1.64       $ 1.68       $ 0.34       $ 1.05    
Net income per common share - Diluted $ 2.54       $ 1.63       $ 1.67       $ 0.34       $ 1.04    
Cash dividends declared per common share $ 0.31       $ 0.28       $ 0.28       $ 0.28       $ 0.28    
Weighted average common shares outstanding   56,904         57,309         57,597         57,567         57,620    
Dilutive potential common shares 681       588       449       414       575    
Average common shares and dilutive common shares 57,585       57,897       58,046       57,981       58,195    

 

TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES

                    % Growth From
(Dollars in thousands) Mar 31,
2021
  Dec 31,
2020
  Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
Dec 31,
2020 (1)
  Mar 31,
2020
Balance:                        
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. Government Agencies $ 890,749     $ 927,307     $ 862,924     $ 814,667     $ 642,386   (16 ) %   39   %
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. Government Agencies 369,444     344,783     96,747     18,496     14,548   29       2439    
Total mortgage loans held-for-sale $ 1,260,193     $ 1,272,090     $ 959,671     $ 833,163     $ 656,934   (4 ) %   92   %
                         
Core loans:                        
Commercial                        
Commercial and industrial $ 4,630,795     $ 4,675,594     $ 4,555,920     $ 4,292,032     $ 4,580,712   (4 ) %   1   %
Asset-based lending 720,772     721,666     707,365     721,035     1,046,631   (1 )     (31 )  
Municipal 493,417     474,103     482,567     519,691     510,711   17       (3 )  
Leases 1,290,778     1,288,374     1,215,239     1,179,233     1,044,092   1       24    
Commercial real estate                        
Residential construction 72,058     89,389     101,187     131,639     149,623   (79 )     (52 )  
Commercial construction 1,040,631     1,041,729     1,005,708     992,872     929,643         12    
Land 240,635     240,684     226,254     215,537     222,087         8    
Office 1,131,472     1,136,844     1,163,790     1,124,643     1,138,527   (2 )     (1 )  
Industrial 1,152,522     1,129,433     1,117,702     1,062,218     1,095,180   8       5    
Retail 1,198,025     1,224,403     1,175,819     1,148,152     1,179,861   (9 )     2    
Multi-family 1,739,521     1,649,801     1,599,651     1,497,834     1,433,390   22       21    
Mixed use and other 1,969,915     1,981,849     2,033,031     2,027,850     2,037,220   (2 )     (3 )  
Home equity 390,253     425,263     446,274     466,596     494,655   (33 )     (21 )  
Residential real estate                        
Residential real estate loans for investment 1,376,465     1,214,744     1,143,908     1,186,768     1,244,690   54       11    
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. Government Agencies 45,508     44,854     240,902     240,661     132,699   6       (66 )  
Total core loans $ 17,492,767     $ 17,338,730     $ 17,215,317     $ 16,806,761     $ 17,239,721   4   %   1   %
                         
Niche loans:                        
Commercial                        
Franchise $ 1,128,493     $ 1,023,027     $ 964,150     $ 963,531     $ 994,180   42   %   14   %
Mortgage warehouse lines of credit 587,868     567,389     503,371     352,659     323,844   15       82    
Community Advantage - homeowners association 272,222     267,374     254,963     240,634     231,757   7       17    
Insurance agency lending 290,880     222,519     214,411     255,049     293,959   125       (1 )  
Premium Finance receivables                        
U.S. commercial insurance 3,342,730     3,438,087     3,494,155     3,439,987     3,015,549   (11 )     11    
Canada commercial insurance 615,813     616,402     565,989     559,787     449,506         37    
Life insurance 6,111,495     5,857,436     5,488,832     5,400,802     5,221,639   18       17    
Consumer and other 35,983     32,188     55,354     48,325     37,166   48       (3 )  
Total niche loans $ 12,385,484     $ 12,024,422     $ 11,541,225     $ 11,260,774     $ 10,567,600   12   %   17   %
                         
Commercial PPP loans:                        
Originated in 2020 $ 2,049,342     $ 2,715,921     $ 3,379,013     $ 3,335,368     $   (100 ) %   100   %
Originated in 2021 1,243,640                   100       100    
Total commercial PPP loans $ 3,292,982     $ 2,715,921     $ 3,379,013     $ 3,335,368     $   86   %   100   %
                         
Total loans, net of unearned income $ 33,171,233     $ 32,079,073     $ 32,135,555     $ 31,402,903     $ 27,807,321   14   %   19   %

(1)  Annualized.


TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

                    % Growth From
(Dollars in thousands) Mar 31,
2021
  Dec 31,
2020
  Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
Dec 31,
2020 (1)
  Mar 31,
2020
Balance:                        
Non-interest-bearing $ 12,297,337      $ 11,748,455     $ 10,409,747     $ 10,204,791     $ 7,556,755   19   %   63   %
NOW and interest-bearing demand deposits 3,562,312      3,349,021     3,294,071     3,440,348     3,181,159   26       12    
Wealth management deposits (2) 4,274,527      4,138,712     4,235,583     4,433,020     3,936,968   13       9    
Money market 9,236,434      9,348,806     9,423,653     9,288,976     8,114,659   (5 )     14    
Savings 3,690,892      3,531,029     3,415,073     3,447,352     3,282,340   18       12    
Time certificates of deposit 4,811,150      4,976,628     5,066,295     4,837,387     5,389,779   (13 )     (11 )  
Total deposits $ 37,872,652      $ 37,092,651     $ 35,844,422     $ 35,651,874     $ 31,461,660   9   %   20   %
Mix:                        
Non-interest-bearing 32  %   32 %   29 %   29 %   24 %      
NOW and interest-bearing demand deposits     9     9     10     10        
Wealth management deposits (2) 11      11     12     12     13        
Money market 25      25     26     25     26        
Savings 10      10     10     10     10        
Time certificates of deposit 13      13     14     14     17        
Total deposits 100  %   100 %   100 %   100 %   100 %      

(1) Annualized. 
(2) Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wintrust Investments, Chicago Deferred Exchange Company, LLC ("CDEC"), trust and asset management customers of the Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts.


TABLE 3: TIME CERTIFICATES OF DEPOSIT MATURITY/RE-PRICING ANALYSIS
As of March 31, 2021

(Dollars in thousands)   Total Time
Certificates of
Deposit
  Weighted-Average
Rate of Maturing
Time Certificates
    of Deposit (1)
1-3 months   $ 1,385,311      1.75  %
4-6 months   993,635      1.50   
7-9 months   806,574      1.13   
10-12 months   662,375      0.64   
13-18 months   496,540      0.69   
19-24 months   217,147      0.92   
24+ months   249,568      0.74   
Total   $ 4,811,150      1.24  %

(1)  Weighted-average rate excludes the impact of purchase accounting fair value adjustments.

 

TABLE 4: QUARTERLY AVERAGE BALANCES

    Average Balance for three months ended,
    Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(In thousands)   2021   2020   2020   2020   2020
Interest-bearing deposits with banks and cash equivalents (1)   $ 4,230,886        $ 4,381,040       $ 3,411,164       $ 3,240,167       $ 1,418,809    
Investment securities (2)   3,944,676        3,534,594       3,789,422       4,309,471       4,780,709    
FHLB and FRB stock   135,758        135,569       135,567       135,360       114,829    
Liquidity management assets (3)   8,311,320        8,051,203       7,336,153       7,684,998       6,314,347    
Other earning assets (3)(4)   20,370        18,716       16,656       16,917       19,166    
Mortgage loans held-for-sale   1,151,848        893,395       822,908       705,702       403,262    
Loans, net of unearned income (3)(5)   32,442,927        31,783,279       31,634,608       30,336,626       26,936,728    
Total earning assets (3)   41,926,465        40,746,593       39,810,325       38,744,243       33,673,503    
Allowance for loan and investment security losses   (327,080  )     (336,139 )     (321,732 )     (222,485 )     (176,291 )  
Cash and due from banks   366,413        344,536       345,438       352,423       321,982    
Other assets   3,022,935        3,055,015       3,128,813       3,168,548       2,806,296    
Total assets   $ 44,988,733        $ 43,810,005       $ 42,962,844       $ 42,042,729       $ 36,625,490    
                     
NOW and interest-bearing demand deposits   $ 3,493,451        $ 3,320,527       $ 3,435,089       $ 3,323,124       $ 3,113,733    
Wealth management deposits   4,156,398        4,066,948       4,239,300       4,380,996       2,838,719    
Money market accounts   9,335,920        9,435,344       9,332,668       8,727,966       7,990,775    
Savings accounts   3,587,566        3,413,388       3,419,586       3,394,480       3,189,835    
Time deposits   4,875,392        5,043,558       4,900,839       5,104,701       5,526,407    
Interest-bearing deposits   25,448,727        25,279,765       25,327,482       24,931,267       22,659,469    
Federal Home Loan Bank advances   1,228,433        1,228,425       1,228,421       1,214,375       951,613    
Other borrowings   518,188        510,725       512,787       493,350       469,577    
Subordinated notes   436,532        436,433       436,323       436,226       436,119    
Junior subordinated debentures   253,566        253,566       253,566       253,566       253,566    
Total interest-bearing liabilities   27,885,446        27,708,914       27,758,579       27,328,784       24,770,344    
Non-interest-bearing deposits   11,811,194        10,874,912       9,988,769       9,607,528       7,235,177    
Other liabilities   1,127,203        1,175,893       1,180,594       1,197,571       909,800    
Equity   4,164,890        4,050,286       4,034,902       3,908,846       3,710,169    
Total liabilities and shareholders’ equity   $ 44,988,733        $ 43,810,005       $ 42,962,844       $ 42,042,729       $ 36,625,490    
                     
Net free funds/contribution (6)   $ 14,041,019        $ 13,037,679       $ 12,051,746       $ 11,415,459       $ 8,903,159    

(1) Includes interest-bearing deposits from banks, federal funds sold and securities purchased under resale agreements.
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 17 for additional information on this performance measure/ratio.
(4) Other earning assets include brokerage customer receivables and trading account securities.
(5) Loans, net of unearned income, include non-accrual loans.
(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.


TABLE 5: QUARTERLY NET INTEREST INCOME

    Net Interest Income for three months ended,
    Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(In thousands)   2021   2020   2020   2020   2020
Interest income:                    
Interest-bearing deposits with banks and cash equivalents   $ 1,199        $ 1,294       $ 1,181       $ 1,326       $ 4,854    
Investment securities   19,764        18,773       22,365       27,643       33,018    
FHLB and FRB stock   1,745        1,775       1,774       1,765       1,577    
Liquidity management assets (1)   22,708        21,842       25,320       30,734       39,449    
Other earning assets (1)   125        130       113       113       167    
Mortgage loans held-for-sale   9,036        6,357       5,791       4,764       3,165    
Loans, net of unearned income (1)   274,484        280,509       280,960       295,322       302,699    
Total interest income   $ 306,353        $ 308,838       $ 312,184       $ 330,933       $ 345,480    
                     
Interest expense:                    
NOW and interest-bearing demand deposits   $ 901        $ 1,074       $ 1,342       $ 1,561       $ 3,665    
Wealth management deposits   7,351        7,436       7,662       7,244       6,935    
Money market accounts   2,865        3,740       7,245       13,140       22,363    
Savings accounts   430        773       2,104       3,840       5,790    
Time deposits   16,397        19,579       20,731       24,272       28,682    
Interest-bearing deposits   27,944        32,602       39,084       50,057       67,435    
Federal Home Loan Bank advances   4,840        4,952       4,947       4,934       3,360    
Other borrowings   2,609        2,779       3,012       3,436       3,546    
Subordinated notes   5,477        5,509       5,474       5,506       5,472    
Junior subordinated debentures   2,704        2,742       2,703       2,752       2,811    
Total interest expense   $ 43,574        $ 48,584       $ 55,220       $ 66,685       $ 82,624    
                     
Less:  Fully taxable-equivalent adjustment   (884  )     (857 )     (1,028 )     (1,117 )     (1,413 )  
Net interest income (GAAP) (2)   261,895        259,397       255,936       263,131       261,443    
Fully taxable-equivalent adjustment   884        857       1,028       1,117       1,413    
Net interest income, fully taxable-equivalent (non-GAAP) (2)   $ 262,779        $ 260,254       $ 256,964       $ 264,248       $ 262,856    

(1) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period. 
(2) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 17 for additional information on this performance measure/ratio.


TABLE 6: QUARTERLY NET INTEREST MARGIN

    Net Interest Margin for three months ended,
    Mar 31,
2021
  Dec 31,
2020
  Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
Yield earned on:                    
Interest-bearing deposits with banks and cash equivalents   0.11    %   0.12   %   0.14   %   0.16   %   1.38   %
Investment securities   2.03        2.11       2.35       2.58       2.78    
FHLB and FRB stock   5.21        5.21       5.21       5.24       5.52    
Liquidity management assets   1.11        1.08       1.37       1.61       2.51    
Other earning assets   2.50        2.79       2.71       2.71       3.50    
Mortgage loans held-for-sale   3.18        2.83       2.80       2.72       3.16    
Loans, net of unearned income   3.43        3.51       3.53       3.92       4.52    
Total earning assets   2.96    %   3.02   %   3.12   %   3.44   %   4.13   %
                     
Rate paid on:                    
NOW and interest-bearing demand deposits   0.10    %   0.13   %   0.16   %   0.19   %   0.47   %
Wealth management deposits   0.72        0.73       0.72       0.67       0.98    
Money market accounts   0.12        0.16       0.31       0.61       1.13    
Savings accounts   0.05        0.09       0.24       0.45       0.73    
Time deposits   1.36        1.54       1.68       1.91       2.09    
Interest-bearing deposits   0.45        0.51       0.61       0.81       1.20    
Federal Home Loan Bank advances   1.60        1.60       1.60       1.63       1.42    
Other borrowings   2.04        2.16       2.34       2.80       3.04    
Subordinated notes   5.02        5.05       5.02       5.05       5.02    
Junior subordinated debentures   4.27        4.23       4.17       4.29       4.39    
Total interest-bearing liabilities   0.63    %   0.70   %   0.79   %   0.98   %   1.34   %
                     
Interest rate spread  (1)(2)   2.33    %   2.32   %   2.33   %   2.46   %   2.79   %
Less:  Fully taxable-equivalent adjustment   (0.01  )     (0.01 )     (0.01 )     (0.01 )     (0.02 )  
Net free funds/contribution (3)   0.21        0.22       0.24       0.28       0.35    
Net interest margin (GAAP) (2)   2.53    %   2.53   %   2.56   %   2.73   %   3.12   %
Fully taxable-equivalent adjustment   0.01        0.01       0.01       0.01       0.02    
Net interest margin, fully taxable-equivalent (non-GAAP) (2)   2.54    %   2.54   %   2.57   %   2.74   %   3.14   %

(1) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities. 
(2) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 17 for additional information on this performance measure/ratio.
(3) 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.

 

TABLE 7: INTEREST RATE SENSITIVITY

As an ongoing part of its financial strategy, the Company attempts to manage the impact of fluctuations in market interest rates on net interest income. Management measures its exposure to changes in interest rates by modeling many different interest rate scenarios.

The following interest rate scenarios display the percentage change in net interest income over a one-year time horizon assuming increases of 100 and 200 basis points and a decrease of 100 basis points. The Static Shock Scenario results incorporate actual cash flows and repricing characteristics for balance sheet instruments following an instantaneous, parallel change in market rates based upon a static (i.e. no growth or constant) balance sheet. Conversely, the Ramp Scenario results incorporate management’s projections of future volume and pricing of each of the product lines following a gradual, parallel change in market rates over twelve months.  Actual results may differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies. The interest rate sensitivity for both the Static Shock and Ramp Scenario is as follows:

Static Shock Scenario   +200
Basis
Points
  +100
 Basis
 Points
  -100
Basis
 Points
Mar 31, 2021   22.0 %   10.2 %   (7.2 ) %
Dec 31, 2020   25.0     11.6     (7.9 )  
Sep 30, 2020   23.4     10.9     (8.1 )  
Jun 30, 2020   25.9     12.6     (8.3 )  
Mar 31, 2020   22.5     10.6     (9.4 )  

 

Ramp Scenario +200
Basis
Points
  +100
Basis
Points
  -100
Basis
Points
Mar 31, 2021 10.7 %   5.4 %   (3.6 ) %
Dec 31, 2020 11.4     5.7     (3.3 )  
Sep 30, 2020 10.7     5.2     (3.5 )  
Jun 30, 2020 13.0     6.7     (3.2 )  
Mar 31, 2020 7.7     3.7     (3.8 )  

 

TABLE 8: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

  Loans repricing or maturity period    
As of March 31, 2021 One year or less   From one to five years   Over five years    
(In thousands)       Total
Commercial              
Fixed rate $ 310,427      $ 2,025,263      $ 784,277      $ 3,119,967   
Fixed Rate - PPP —      3,292,982      —      3,292,982   
Variable rate 6,291,842      3,350      66      6,295,258   
Total commercial $ 6,602,269      $ 5,321,595      $ 784,343      $ 12,708,207   
Commercial real estate              
Fixed rate 550,899      2,075,177      382,447      3,008,523   
Variable rate 5,505,986      30,270      —      5,536,256   
Total commercial real estate $ 6,056,885      $ 2,105,447      $ 382,447      $ 8,544,779   
Home equity              
Fixed rate 14,653      8,665      51      23,369   
Variable rate 366,884      —      —      366,884   
Total home equity $ 381,537      $ 8,665      $ 51      $ 390,253   
Residential real estate              
Fixed rate 23,194      11,244      617,596      652,034   
Variable rate 65,907      290,906      413,126      769,939   
Total residential real estate $ 89,101      $ 302,150      $ 1,030,722      $ 1,421,973   
Premium finance receivables - commercial              
Fixed rate 3,851,457      107,086      —      3,958,543   
Variable rate —      —      —      —   
Total premium finance receivables - commercial $ 3,851,457      $ 107,086      $ —      $ 3,958,543   
Premium finance receivables - life insurance              
Fixed rate 11,493      348,721      20,365      380,579   
Variable rate 5,730,916      —      —      5,730,916   
Total premium finance receivables - life insurance $ 5,742,409      $ 348,721      $ 20,365      $ 6,111,495   
Consumer and other              
Fixed rate 14,753      4,536      1,154      20,443   
Variable rate 15,540      —      —      15,540   
Total consumer and other $ 30,293      $ 4,536      $ 1,154      $ 35,983   
               
Total per category              
Fixed rate 4,776,876      4,580,692      1,805,890      11,163,458   
Fixed rate - PPP —      3,292,982      —      3,292,982   
Variable rate 17,977,075      324,526      413,192      18,714,793   
Total loans, net of unearned income $ 22,753,951      $ 8,198,200      $ 2,219,082      $ 33,171,233   
               
Variable Rate Loan Pricing by Index:              
Prime             $ 2,296,647   
One- month LIBOR             9,493,060   
Three- month LIBOR             413,942   
Twelve- month LIBOR             6,225,191   
Other             285,953   
Total variable rate             $ 18,714,793   

Graph available at the following link: http://ml.globenewswire.com/Resource/Download/3b1cd75f-31c0-4b3f-a1ec-b86cbbf9fddb

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to LIBOR indices which, as shown in the table above, do not mirror the same changes as the Prime rate which has historically moved when the Federal Reserve raises or lowers interest rates.  Specifically, the Company has $9.5 billion of variable rate loans tied to one-month LIBOR and $6.2 billion of variable rate loans tied to twelve-month LIBOR. The above chart shows:

    Basis Point (bp) Change in
    Prime   1-month
LIBOR
  12-month
LIBOR
 
First Quarter 2021   0 bp -3 bps -6 bps
Fourth Quarter 2020   0   -1   -2  
Third Quarter 2020   0   -1   -19  
Second Quarter 2020   0   -83   -45  
First Quarter 2020   -150   -77   -100  

 

TABLE 9: ALLOWANCE FOR CREDIT LOSSES

    Three Months Ended
    Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(Dollars in thousands)   2021   2020   2020   2020   2020
Allowance for credit losses at beginning of period   $ 379,969        $ 388,971       $ 373,174       $ 253,482       $ 158,461    
Cumulative effect adjustment from the adoption of ASU 2016-13   —                          47,418    
Provision for credit losses   (45,347  )     1,180       25,026       135,053       52,961    
Other adjustments   31        155       55       42       (73 )  
Charge-offs:                    
Commercial   11,781        5,184       5,270       5,686       2,153    
Commercial real estate   980        6,637       1,529       7,224       570    
Home equity   —        683       138       239       1,001    
Residential real estate         114       83       293       401    
Premium finance receivables   3,239        4,214       4,640       3,434       3,184    
Consumer and other   114        198       103       99       128    
Total charge-offs   16,116        17,030       11,763       16,975       7,437    
Recoveries:                    
Commercial   452        4,168       428       112       384    
Commercial real estate   200        904       175       493       263    
Home equity   101        77       111       46       294    
Residential real estate   204        69       25       30       60    
Premium finance receivables   1,782        1,445       1,720       833       1,110    
Consumer and other   32        30       20       58       41    
Total recoveries   2,771        6,693       2,479       1,572       2,152    
Net charge-offs   (13,345  )     (10,337 )     (9,284 )     (15,403 )     (5,285 )  
Allowance for credit losses at period end   $ 321,308        $ 379,969       $ 388,971       $ 373,174       $ 253,482    
                     
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial   0.37    %   0.03   %   0.16   %   0.20   %   0.08   %
Commercial real estate   0.04        0.27       0.06       0.33       0.02    
Home equity   (0.10  )     0.55       0.02       0.16       0.57    
Residential real estate   (0.06  )     0.02       0.02       0.09       0.11    
Premium finance receivables   0.06        0.11       0.12       0.12       0.10    
Consumer and other   0.57        0.78       0.49       0.25       0.56    
Total loans, net of unearned income   0.17    %   0.13   %   0.12   %   0.20   %   0.08   %
                     
Loans at period end   $ 33,171,233        $ 32,079,073       $ 32,135,555       $ 31,402,903       $ 27,807,321    
Allowance for loan losses as a percentage of loans at period end   0.84    %   1.00   %   1.01   %   1.00   %   0.78   %
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end   0.97        1.18       1.21       1.19       0.91    
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end, excluding PPP loans   1.08        1.29       1.35       1.33       0.91    


TABLE 10: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

    Three Months Ended
    Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(In thousands)   2021   2020   2020   2020   2020
Provision for loan losses   $ (28,351 )     $ 3,597       $ 21,678       $ 112,822       $ 50,396    
Provision for unfunded lending-related commitments losses   (17,035 )     (2,413 )     3,350       22,236       2,569    
Provision for held-to-maturity securities losses   39       (4 )     (2 )     (5 )     (4 )  
Provision for credit losses   $ (45,347 )     $ 1,180       $ 25,026       $ 135,053       $ 52,961    
                     
Allowance for loan losses   $ 277,709       $ 319,374       $ 325,959       $ 313,510       $ 216,050    
Allowance for unfunded lending-related commitments losses   43,500       60,536       62,949       59,599       37,362    
Allowance for loan losses and unfunded lending-related commitments losses   321,209       379,910       388,908       373,109       253,412    
Allowance for held-to-maturity securities losses   99       59       63       65       70    
Allowance for credit losses   $ 321,308       $ 379,969       $ 388,971       $ 373,174       $ 253,482    

 

TABLE 11: ALLOWANCE BY LOAN PORTFOLIO

The table below summarizes the calculation of allowance for loan losses and allowance for unfunded lending-related commitments losses for the Company’s loan portfolios as well as core and niche portfolios, as of March 31, 2021 and December 31, 2020.

  As of Mar 31, 2021 As of Dec 31, 2020
(Dollars in thousands) Recorded
Investment
  Calculated
Allowance
  % of its
category’s
balance
Recorded
Investment
  Calculated
Allowance
  % of its
category’s
balance
Commercial:                    
Commercial, industrial and other, excluding PPP loans $ 9,415,225      $ 95,637      1.02  % $ 9,240,046     $ 94,210     1.02 %
Commercial PPP loans 3,292,982          0.00    2,715,921     2     0.00  
Commercial real estate:                    
Construction and development 1,353,324      45,327      3.35    1,371,802     78,833     5.75  
Non-construction 7,191,455      136,465      1.90    7,122,330     164,770     2.31  
Home equity 390,253      11,382      2.92    425,263     11,437     2.69  
Residential real estate 1,421,973      14,242      1.00    1,259,598     12,459     0.99  
Premium finance receivables                    
Commercial insurance loans 3,958,543      16,945      0.43    4,054,489     17,267     0.43  
Life insurance loans 6,111,495      532      0.01    5,857,436     510     0.01  
Consumer and other 35,983      676      1.88    32,188     422     1.31  
Total loans, net of unearned income $ 33,171,233      $ 321,209      0.97  % $ 32,079,073     $ 379,910     1.18 %
Total loans, net of unearned income, excluding PPP loans $ 29,878,251      $ 321,206      1.08  % $ 29,363,152     $ 379,908     1.29 %
                     
Total core loans (1) $ 17,492,767      $ 283,505      1.62  % $ 17,338,730     $ 347,111     2.00 %
Total niche loans (1) 12,385,484      37,701      0.30    12,024,422     32,797     0.27  
Total PPP loans 3,292,982          0.00    2,715,921     2     0.00  
                     

(1)   See Table 1 for additional detail on core and niche loans.

 

TABLE 12: LOAN PORTFOLIO AGING

(Dollars in thousands)   Mar 31, 2021   Dec 31, 2020   Sep 30, 2020   Jun 30, 2020   Mar 31, 2020
Loan Balances:                    
Commercial                    
Nonaccrual   $ 22,459      $ 21,743     $ 42,036     $ 42,882     $ 49,916  
90+ days and still accruing   —      307         1,374     1,241  
60-89 days past due   13,292      6,900     2,168     8,952     8,873  
30-59 days past due   35,541      44,381     48,271     23,720     86,129  
Current   12,636,915      11,882,636     12,184,524     11,782,304     8,879,727  
Total commercial   $ 12,708,207      $ 11,955,967     $ 12,276,999     $ 11,859,232     $ 9,025,886  
Commercial real estate                    
Nonaccrual   $ 34,380      $ 46,107     $ 68,815     $ 64,557     $ 62,830  
90+ days and still accruing   —                  516  
60-89 days past due   8,156      5,178     8,299     26,480     10,212  
30-59 days past due   70,168      32,116     53,462     75,528     75,068  
Current   8,432,075      8,410,731     8,292,566     8,034,180     8,036,905  
Total commercial real estate   $ 8,544,779      $ 8,494,132     $ 8,423,142     8,200,745     $ 8,185,531  
Home equity                    
Nonaccrual   $ 5,536      $ 6,529     $ 6,329     $ 7,261     $ 7,243  
90+ days and still accruing   —                   
60-89 days past due   492      47     70         214  
30-59 days past due   780      637     1,148     1,296     2,096  
Current   383,445      418,050     438,727     458,039     485,102  
Total home equity   $ 390,253      $ 425,263     $ 446,274     $ 466,596     $ 494,655  
Residential real estate                    
Nonaccrual   $ 21,553      $ 26,071     $ 22,069     $ 19,529     $ 18,965  
90+ days and still accruing   —                  605  
60-89 days past due   944      1,635     814     1,506     345  
30-59 days past due   13,768      12,584     2,443     4,400     28,983  
Current   1,385,708      1,219,308     1,359,484     1,401,994     1,328,491  
Total residential real estate   $ 1,421,973      $ 1,259,598     $ 1,384,810     $ 1,427,429     $ 1,377,389  
Premium finance receivables                    
Nonaccrual   $ 9,690      $ 13,264     $ 21,080     $ 16,460     $ 21,058  
90+ days and still accruing   4,783      12,792     12,177     35,638     16,505  
60-89 days past due   5,113      27,801     38,286     42,353     12,730  
30-59 days past due   31,373      49,274     80,732     61,160     70,185  
Current   10,019,079      9,808,794     9,396,701     9,244,965     8,566,216  
Total premium finance receivables   $ 10,070,038      $ 9,911,925     $ 9,548,976     $ 9,400,576     $ 8,686,694  
Consumer and other                    
Nonaccrual   $ 497      $ 436     $ 422     $ 427     $ 403  
90+ days and still accruing   161      264     175     156     78  
60-89 days past due       24     273     4     625  
30-59 days past due   74      136     493     281     207  
Current   35,243      31,328     53,991     47,457     35,853  
Total consumer and other   $ 35,983      $ 32,188     $ 55,354     $ 48,325     $ 37,166  
Total loans, net of unearned income                    
Nonaccrual   $ 94,115      $ 114,150     $ 160,751     $ 151,116     $ 160,415  
90+ days and still accruing   4,944      13,363     12,352     37,168     18,945  
60-89 days past due   28,005      41,585     49,910     79,295     32,999  
30-59 days past due   151,704      139,128     186,549     166,385     262,668  
Current   32,892,465      31,770,847     31,725,993     30,968,939     27,332,294  
Total loans, net of unearned income   $ 33,171,233      $ 32,079,073     $ 32,135,555     $ 31,402,903     $ 27,807,321  

 

TABLE 13: NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS ("TDRs")

  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(Dollars in thousands) 2021   2020   2020   2020   2020
Loans past due greater than 90 days and still accruing (1):                  
Commercial $ —      $ 307     $     $ 1,374     $ 1,241  
Commercial real estate —                  516  
Home equity —                   
Residential real estate —                  605  
Premium finance receivables 4,783      12,792     12,177     35,638     16,505  
Consumer and other 161      264     175     156     78  
Total loans past due greater than 90 days and still accruing 4,944      13,363     12,352     37,168     18,945  
Non-accrual loans:                  
Commercial 22,459      21,743     42,036     42,882     49,916  
Commercial real estate 34,380      46,107     68,815     64,557     62,830  
Home equity 5,536      6,529     6,329     7,261     7,243  
Residential real estate 21,553      26,071     22,069     19,529     18,965  
Premium finance receivables 9,690      13,264     21,080     16,460     21,058  
Consumer and other 497      436     422     427     403  
Total non-accrual loans 94,115      114,150     160,751     151,116     160,415  
Total non-performing loans:                  
Commercial 22,459      22,050     42,036     44,256     51,157  
Commercial real estate 34,380      46,107     68,815     64,557     63,346  
Home equity 5,536      6,529     6,329     7,261     7,243  
Residential real estate 21,553      26,071     22,069     19,529     19,570  
Premium finance receivables 14,473      26,056     33,257     52,098     37,563  
Consumer and other 658      700     597     583     481  
Total non-performing loans $ 99,059      $ 127,513     $ 173,103     $ 188,284     $ 179,360  
Other real estate owned 8,679      9,711     2,891     2,409     2,701  
Other real estate owned - from acquisitions 7,134      6,847     6,326     7,788     8,325  
Other repossessed assets —                   
Total non-performing assets $ 114,872      $ 144,071     $ 182,320     $ 198,481     $ 190,386  
Accruing TDRs not included within non-performing assets $ 46,151      $ 47,023     $ 46,410     $ 48,609     $ 47,049  
Total non-performing loans by category as a percent of its own respective category’s period-end balance:                  
Commercial 0.18  %   0.18 %   0.34 %   0.37 %   0.57 %
Commercial real estate 0.40      0.54     0.82     0.79     0.77  
Home equity 1.42      1.54     1.42     1.56     1.46  
Residential real estate 1.52      2.07     1.59     1.37     1.42  
Premium finance receivables 0.14      0.26     0.35     0.55     0.43  
Consumer and other 1.83      2.17     1.08     1.21     1.29  
Total loans, net of unearned income 0.30  %   0.40 %   0.54 %   0.60 %   0.65 %
Total non-performing assets as a percentage of total assets 0.25  %   0.32 %   0.42 %   0.46 %   0.49 %
Allowance for credit losses as a percentage of non-accrual loans 341.29  %   332.82 %   241.93 %   246.90 %   157.97 %
                   

(1)  As of March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, no TDRs were past due greater than 90 days and still accruing interest.


Non-performing Loans Rollforward

  Three Months Ended
  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(In thousands) 2021   2020   2020   2020   2020
                   
Balance at beginning of period $ 127,513       $ 173,103       $ 188,284       $ 179,360       $ 117,588    
Additions from becoming non-performing in the respective period 9,894       13,224       19,771       20,803       32,195    
Additions from the adoption of ASU 2016-13 —                          37,285    
Return to performing status (654 )     (1,000 )     (6,202 )     (2,566 )     (486 )  
Payments received (22,731 )     (30,146 )     (3,733 )     (11,201 )     (7,949 )  
Transfer to OREO and other repossessed assets (1,372 )     (12,662 )     (598 )           (1,297 )  
Charge-offs (2,952 )     (7,817 )     (6,583 )     (12,884 )     (2,551 )  
Net change for niche loans (1) (10,639 )     (7,189 )     (17,836 )     14,772       4,575    
Balance at end of period $ 99,059       $ 127,513       $ 173,103       $ 188,284       $ 179,360    

(1)  This includes activity for premium finance receivables and indirect consumer loans.

 

TDRs

  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(In thousands) 2021   2020   2020   2020   2020
Accruing TDRs:                  
Commercial $ 7,536      $ 7,699     $ 7,863     $ 5,338     $ 6,500  
Commercial real estate 9,478      10,549     10,846     19,106     18,043  
Residential real estate and other 29,137      28,775     27,701     24,165     22,506  
Total accrual $ 46,151      $ 47,023     $ 46,410     $ 48,609     $ 47,049  
Non-accrual TDRs: (1)                  
Commercial $ 5,583      $ 10,491     $ 13,132     $ 20,788     $ 17,206  
Commercial real estate 1,309      6,177     13,601     8,545     14,420  
Residential real estate and other 3,540      4,501     5,392     5,606     4,962  
Total non-accrual $ 10,432      $ 21,169     $ 32,125     $ 34,939     $ 36,588  
Total TDRs:                  
Commercial $ 13,119      $ 18,190     $ 20,995     $ 26,126     $ 23,706  
Commercial real estate 10,787      16,726     24,447     27,651     32,463  
Residential real estate and other 32,677      33,276     33,093     29,771     27,468  
Total TDRs $ 56,583      $ 68,192     $ 78,535     $ 83,548     $ 83,637  

(1)  Included in total non-performing loans.

 

Other Real Estate Owned

  Three Months Ended
  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(In thousands) 2021   2020   2020   2020   2020
Balance at beginning of period $ 16,558        $ 9,217       $ 10,197       $ 11,026       $ 15,171    
Disposals/resolved (2,162  )     (3,839 )     (1,532 )     (612 )     (4,793 )  
Transfers in at fair value, less costs to sell 1,587        11,508       777             954    
Additions from acquisition —                             
Fair value adjustments (170  )     (328 )     (225 )     (217 )     (306 )  
Balance at end of period $ 15,813        $ 16,558       $ 9,217       $ 10,197       $ 11,026    
                   
  Period End
  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
Balance by Property Type: 2021   2020   2020   2020   2020
Residential real estate $ 2,713        $ 2,324       $ 1,839       $ 1,382       $ 1,684    
Residential real estate development 1,287        1,691                      
Commercial real estate 11,813        12,543       7,378       8,815       9,342    
Total $ 15,813        $ 16,558       $ 9,217       $ 10,197       $ 11,026    

 

TABLE 14: NON-INTEREST INCOME

  Three Months Ended   Q1 2021 compared to
Q4 2020
  Q1 2021 compared to
Q1 2020
  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,    
(Dollars in thousands) 2021   2020   2020   2020   2020   $ Change   % Change   $ Change   % Change
Brokerage $ 5,040        $ 4,740       $ 4,563       $ 4,147       $ 5,281       $ 300       6   %   $ (241 )     (5 ) %
Trust and asset management 24,269        22,062       20,394       18,489       20,660       2,207       10       3,609       17    
Total wealth management 29,309        26,802       24,957       22,636       25,941       2,507       9       3,368       13    
Mortgage banking 113,494        86,819       108,544       102,324       48,326       26,675       31       65,168       135    
Service charges on deposit accounts 12,036        11,841       11,497       10,420       11,265       195       2       771       7    
Gains (losses) on investment securities, net 1,154        1,214       411       808       (4,359 )     (60 )     (5 )     5,513       NM    
Fees from covered call options —                          2,292             NM       (2,292 )     (100 )  
Trading  gains (losses), net 419        (102 )     183       (634 )     (451 )     521       NM       870       NM    
Operating lease income, net 14,440        12,118       11,717       11,785       11,984       2,322       19       2,456       20    
Other:                                  
Interest rate swap fees 2,488        4,930       4,029       5,693       6,066       (2,442 )     (50 )     (3,578 )     (59 )  
BOLI 1,124        2,846       1,218       1,950       (1,284 )     (1,722 )     (61 )     2,408       NM    
Administrative services 1,256        1,263       1,077       933       1,112       (7 )     (1 )     144       13    
Foreign currency remeasurement gains (losses) 99        (208 )     (54 )     (208 )     (151 )     307       NM       250       NM    
Early pay-offs of capital leases (52  )     118       165       275       74       (170 )     NM       (126 )     NM    
Miscellaneous 10,739        10,720       6,849       6,011       12,427       19             (1,688 )     (14 )  
Total Other 15,654        19,669       13,284       14,654       18,244       (4,015 )     (20 )     (2,590 )     (14 )  
Total Non-Interest Income $ 186,506        $ 158,361       $ 170,593       $ 161,993       $ 113,242       $ 28,145       18   %   $ 73,264       65   %

NM - Not meaningful.

 

TABLE 15: MORTGAGE BANKING

  Three Months Ended
(Dollars in thousands) Mar 31,
2021
  Dec 31,
2020
  Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
Originations:                  
Retail originations $ 1,641,664        $ 1,757,093       $ 1,590,699       $ 1,588,932       $ 773,144    
Veterans First originations 580,303        594,151       635,876       621,878       442,957    
Total originations for sale (A) $ 2,221,967        $ 2,351,244       $ 2,226,575       $ 2,210,810       $ 1,216,101    
Originations for investment 321,858        192,107       73,711       56,954       73,727    
Total originations $ 2,543,825        $ 2,543,351       $ 2,300,286       $ 2,267,764       $ 1,289,828    
                   
Purchases as a percentage of originations for sale 27    %   35   %   41   %   30   %   37   %
Refinances as a percentage of originations for sale 73        65       59       70       63    
Total 100    %   100   %   100   %   100   %   100   %
                   
Production Margin:                  
Production revenue (B) (1) $ 71,282        $ 70,886       $ 94,148       $ 93,433       $ 49,327    
Production margin (B / A) 3.21    %   3.01   %   4.23   %   4.23   %   4.06   %
                   
Mortgage Servicing:                  
Loans serviced for others (C) $ 11,530,676        $ 10,833,135       $ 10,139,878       $ 9,188,285       $ 8,314,634    
MSRs, at fair value (D) 124,316        92,081       86,907       77,203       73,504    
Percentage of MSRs to loans serviced for others (D / C) 1.08    %   0.85   %   0.86   %   0.84   %   0.88   %
Servicing income $ 9,636        $ 9,829       $ 8,118       $ 6,908       $ 7,031    
                   
Components of MSR:                  
MSR - current period capitalization $ 24,616        $ 20,343       $ 20,936       $ 20,351       $ 9,447    
MSR - collection of expected cash flows - paydowns (728  )     (688 )     (590 )     (419 )     (547 )  
MSR - collection of expected cash flows - payoffs (9,440  )     (8,335 )     (7,272 )     (8,252 )     (6,476 )  
Valuation:                  
MSR - changes in fair value model assumptions 18,045        (5,223 )     (3,002 )     (7,982 )     (14,557 )  
Gain on derivative contract held as an economic hedge, net —                    589       4,160    
MSR valuation adjustment, net of gain on derivative contract held as an economic hedge $ 18,045        $ (5,223 )     $ (3,002 )     $ (7,393 )     $ (10,397 )  
                   
Summary of Mortgage Banking Revenue:                  
Production revenue (1) $ 71,282        $ 70,886       $ 94,148       $ 93,433       $ 49,327    
Servicing income 9,636        9,829       8,118       6,908       7,031    
MSR activity 32,493        6,097       10,072       4,287       (7,973 )  
Other 83        7       (3,794 )     (2,304 )     (59 )  
Total mortgage banking revenue $ 113,494        $ 86,819       $ 108,544       $ 102,324       $ 48,326    

(1)  Production revenue represents revenue earned from the origination and subsequent sale of mortgages, including gains on loans sold and fees from originations, changes in derivative activity, processing and other related activities, and excludes servicing fees, changes in the fair value of servicing rights and changes to the mortgage recourse obligation and other non-production revenue.

 

TABLE 16: NON-INTEREST EXPENSE

  Three Months Ended   Q1 2021 compared to
Q4 2020
  Q1 2021 compared to
Q1 2020
  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,    
(Dollars in thousands) 2021   2020   2020   2020   2020   $ Change   % Change   $ Change   % Change
Salaries and employee benefits:                                  
Salaries $ 91,054        $ 93,535       $ 89,849       $ 87,105     $ 81,286       $ (2,481 )     (3 ) %   $ 9,768       12   %
Commissions and incentive compensation 61,367        52,383       48,475       46,151     31,575       8,984       17       29,792       94    
Benefits 28,389        25,198       25,718       20,900     23,901       3,191       13       4,488       19    
Total salaries and employee benefits 180,809        171,116       164,042       154,156     136,762       9,693       6       44,047       32    
Equipment 20,912        20,565       17,251       15,846     14,834       347       2       6,078       41    
Operating lease equipment depreciation 10,771        9,938       9,425       9,292     9,260       833       8       1,511       16    
Occupancy, net 19,996        19,687       15,830       16,893     17,547       309       2       2,449       14    
Data processing 6,048        5,728       5,689       10,406     8,373       320       6       (2,325 )     (28 )  
Advertising and marketing 8,546        9,850       7,880       7,704     10,862       (1,304 )     (13 )     (2,316 )     (21 )  
Professional fees 7,587        6,530       6,488       7,687     6,721       1,057       16       866       13    
Amortization of other intangible assets 2,007        2,634       2,701       2,820     2,863       (627 )     (24 )     (856 )     (30 )  
FDIC insurance 6,558        7,016       6,772       7,081     4,135       (458 )     (7 )     2,423       59    
OREO expense, net (251  )     (114 )     (168 )     237     (876 )     (137 )     NM       625       (71 )  
Other:                                  
Commissions - 3rd party brokers 846        764       778       707     865       82       11       (19 )     (2 )  
Postage 1,743        1,849       1,529       1,591     1,949       (106 )     (6 )     (206 )     (11 )  
Miscellaneous 21,317        26,304       26,002       24,948     21,346       (4,987 )     (19 )     (29 )        
Total other 23,906        28,917       28,309       27,246     24,160       (5,011 )     (17 )     (254 )     (1 )  
Total Non-Interest Expense $ 286,889        $ 281,867       $ 264,219       $ 259,368     $ 234,641       $ 5,022       2   %   $ 52,248       22   %

NM - Not meaningful.

 

TABLE 17: SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES/RATIOS

The accounting and reporting policies of Wintrust conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company’s performance. These include taxable-equivalent net interest income (including its individual components), taxable-equivalent net interest margin (including its individual components), the taxable-equivalent efficiency ratio, tangible common equity ratio, tangible book value per common share, return on average tangible common equity and pre-tax income, excluding provision for credit losses. Management believes that these measures and ratios provide users of the Company’s financial information a more meaningful view of the performance of the Company's interest-earning assets and interest-bearing liabilities and of the Company’s operating efficiency. Other financial holding companies may define or calculate these measures and ratios differently.

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax rates effective as of the end of the period. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a fully taxable-equivalent basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses), measures how much it costs to produce one dollar of revenue. Securities gains or losses are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity ratio and tangible book value per common share as useful measurements of the Company’s equity.  The Company references the return on average tangible common equity as a measurement of profitability. Management considers pre-tax income, excluding provision for credit losses, as a useful measurement of the Company's core net income.

  Three Months Ended
  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(Dollars and shares in thousands) 2021   2020   2020   2020   2020
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:
(A) Interest Income (GAAP) $ 305,469        $ 307,981       $ 311,156       $ 329,816       $ 344,067    
Taxable-equivalent adjustment:                  
 - Loans 384        324       481       576       860    
 - Liquidity Management Assets 500        530       546       538       551    
 - Other Earning Assets —        3       1       3       2    
(B) Interest Income (non-GAAP) $ 306,353        $ 308,838       $ 312,184       $ 330,933       $ 345,480    
(C) Interest Expense (GAAP) $ 43,574        $ 48,584       $ 55,220       $ 66,685       $ 82,624    
(D) Net Interest Income (GAAP) (A minus C) $ 261,895        $ 259,397       $ 255,936       $ 263,131       $ 261,443    
(E) Net Interest Income (non-GAAP) (B minus C) $ 262,779        $ 260,254       $ 256,964       $ 264,248       $ 262,856    
Net interest margin (GAAP) 2.53    %   2.53   %   2.56   %   2.73   %   3.12   %
Net interest margin, fully taxable-equivalent (non-GAAP) 2.54    %   2.54   %   2.57   %   2.74   %   3.14   %
(F) Non-interest income $ 186,506        $ 158,361       $ 170,593       $ 161,993       $ 113,242    
(G) Gains (losses) on investment securities, net 1,154        1,214       411       808       (4,359 )  
(H) Non-interest expense 286,889        281,867       264,219       259,368       234,641    
Efficiency ratio (H/(D+F-G)) 64.15    %   67.67   %   62.01   %   61.13   %   61.90   %
Efficiency ratio (non-GAAP) (H/(E+F-G)) 64.02    %   67.53   %   61.86   %   60.97   %   61.67   %
                   
Reconciliation of Non-GAAP Tangible Common Equity Ratio:
Total shareholders’ equity (GAAP) $ 4,252,511        $ 4,115,995       $ 4,074,089       $ 3,990,218       $ 3,700,393    
Less: Non-convertible preferred stock (GAAP) (412,500  )     (412,500 )     (412,500 )     (412,500 )     (125,000 )  
Less: Intangible assets (GAAP) (680,052  )     (681,747 )     (683,314 )     (685,581 )     (687,626 )  
(I) Total tangible common shareholders’ equity (non-GAAP) $ 3,159,959        $ 3,021,748       $ 2,978,275       $ 2,892,137       $ 2,887,767    
(J) Total assets (GAAP) $ 45,682,202        $ 45,080,768       $ 43,731,718       $ 43,540,017       $ 38,799,847    
Less: Intangible assets (GAAP) (680,052  )     (681,747 )     (683,314 )     (685,581 )     (687,626 )  
(K) Total tangible assets (non-GAAP) $ 45,002,150        $ 44,399,021       $ 43,048,404       $ 42,854,436       $ 38,112,221    
Common equity to assets ratio (GAAP) (L/J) 8.4    %   8.2   %   8.4   %   8.2   %   9.2   %
Tangible common equity ratio (non-GAAP) (I/K) 7.0    %   6.8   %   6.9   %   6.7   %   7.6   %

 

  Three Months Ended
  Mar 31,   Dec 31,   Sep 30,   Jun 30,   Mar 31,
(Dollars and shares in thousands) 2021   2020   2020   2020   2020
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity $ 4,252,511        $ 4,115,995       $ 4,074,089       $ 3,990,218       $ 3,700,393    
Less: Preferred stock (412,500  )     (412,500 )     (412,500 )     (412,500 )     (125,000 )  
(L) Total common equity $ 3,840,011        $ 3,703,495       $ 3,661,589       $ 3,577,718       $ 3,575,393    
(M) Actual common shares outstanding 57,023        56,770       57,602       57,574       57,545    
Book value per common share (L/M) $ 67.34        $ 65.24       $ 63.57       $ 62.14       $ 62.13    
Tangible book value per common share (non-GAAP) (I/M) $ 55.42        $ 53.23       $ 51.70       $ 50.23       $ 50.18    
                   
Reconciliation of Non-GAAP Return on Average Tangible Common Equity:
(N) Net income applicable to common shares $ 146,157        $ 94,213       $ 97,029       $ 19,609       $ 60,762    
Add: Intangible asset amortization 2,007        2,634       2,701       2,820       2,863    
Less: Tax effect of intangible asset amortization (522  )     (656 )     (589 )     (832 )     (799 )  
After-tax intangible asset amortization 1,485        1,978       2,112       1,988       2,064    
(O) Tangible net income applicable to common shares (non-GAAP) $ 147,642        $ 96,191       $ 99,141       $ 21,597       $ 62,826    
Total average shareholders' equity $ 4,164,890        $ 4,050,286       $ 4,034,902       $ 3,908,846       $ 3,710,169    
Less: Average preferred stock (412,500  )     (412,500 )     (412,500 )     (273,489 )     (125,000 )  
(P) Total average common shareholders' equity $ 3,752,390        $ 3,637,786       $ 3,622,402       $ 3,635,357       $ 3,585,169    
Less: Average intangible assets (680,805  )     (682,290 )     (684,717 )     (686,526 )     (690,777 )  
(Q) Total average tangible common shareholders’ equity (non-GAAP) $ 3,071,585        $ 2,955,496       $ 2,937,685       $ 2,948,831       $ 2,894,392    
Return on average common equity, annualized  (N/P) 15.80    %   10.30   %   10.66   %   2.17   %   6.82   %
Return on average tangible common equity, annualized (non-GAAP) (O/Q) 19.49    %   12.95   %   13.43   %   2.95   %   8.73   %
                   
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:    
Income before taxes $ 206,859        $ 134,711       $ 137,284       $ 30,703       $ 87,083    
Add:  Provision for credit losses (45,347  )     1,180       25,026       135,053       52,961    
Pre-tax income, excluding provision for credit losses (non-GAAP) $ 161,512        $ 135,891       $ 162,310       $ 165,756       $ 140,044    

 

WINTRUST SUBSIDIARIES AND LOCATIONS

Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select Market (Nasdaq: WTFC). Its 15 community bank subsidiaries are: Lake Forest Bank & Trust Company, N.A., Hinsdale Bank & Trust Company, N.A., Wintrust Bank, N.A., in Chicago, Libertyville Bank & Trust Company, N.A., Barrington Bank & Trust Company, N.A., Crystal Lake Bank & Trust Company, N.A., Northbrook Bank & Trust Company, N.A., Schaumburg Bank & Trust Company, N.A., Village Bank & Trust, N.A., in Arlington Heights, Beverly Bank & Trust Company, N.A. in Chicago, Wheaton Bank & Trust Company, N.A., State Bank of The Lakes, N.A., in Antioch, Old Plank Trail Community Bank, N.A. in New Lenox, St. Charles Bank & Trust Company, N.A. and Town Bank, N.A., in Hartland, Wisconsin.

In addition to the locations noted above, the banks also operate facilities in Illinois in Addison, Algonquin, Aurora, Bloomingdale, Bolingbrook, Buffalo Grove, Burbank, Cary, Clarendon Hills, Crete, Countryside, Darien, Deerfield, Des Plaines, Downers Grove, Elgin, Elk Grove Village, Elmhurst, Evanston, Evergreen Park, Frankfort, Geneva, Glen Ellyn, Glencoe, Glenview, Gurnee, Grayslake, Hanover Park, Highland Park, Highwood, Hoffman Estates, Homer Glen, Itasca, Joliet, Lake Bluff, Lake Villa, Lansing, Lemont, Lindenhurst, Lynwood, Markham, Maywood, McHenry, Mokena, Mount Prospect, Mundelein, Naperville, North Chicago, Northfield, Norridge, Oak Lawn, Oak Brook, Orland Park, Palatine, Park Ridge, Prospect Heights, Ravinia, Riverside, Rolling Meadows, Round Lake Beach, Shorewood, Skokie, South Holland, Spring Grove, Steger, Stone Park, Vernon Hills, Wauconda, Waukegan, Western Springs, Willowbrook, Wilmette, Winnetka and Wood Dale, and in Wisconsin in Albany, Burlington, Clinton, Darlington, Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva, Madison, Menomonee Falls, Milwaukee, Monroe, Pewaukee, Racine, Sharon, Wales, Walworth and Wind Lake, and in Dyer, Indiana and in Naples, Florida. 

Additionally, the Company operates various non-bank business units:

  • FIRST Insurance Funding and Wintrust Life Finance, each a division of Lake Forest Bank & Trust Company, N.A., serve commercial and life insurance loan customers, respectively, throughout the United States.
  • First Insurance Funding of Canada serves commercial insurance loan customers throughout Canada.
  • Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States.
  • Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices.
  • Wintrust Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest.
  • Great Lakes Advisors LLC provides money management services and advisory services to individual accounts.
  • The Chicago Trust Company, N.A., a trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location.
  • Wintrust Asset Finance offers direct leasing opportunities.
  • CDEC provides Qualified Intermediary services (as defined by U.S. Treasury regulations) for taxpayers seeking to structure tax-deferred like-kind exchanges under Internal Revenue Code Section 1031.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “will,” “may,” “should,” “would” and “could.” Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict and which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of the Company’s 2020 Annual Report on Form 10-K and in any of the Company’s subsequent SEC filings. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things, statements relating to the Company’s future financial performance, the performance of its loan portfolio, the expected amount of future credit reserves and charge-offs, delinquency trends, growth plans, regulatory developments, securities that the Company may offer from time to time, and management’s long-term performance goals, as well as statements relating to the anticipated effects on financial condition and results of operations from expected developments or events, the Company’s business and growth strategies, including future acquisitions of banks, specialty finance or wealth management businesses, internal growth and plans to form additional de novo banks or branch offices. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:

  • the severity, magnitude and duration of the COVID-19 pandemic and the direct and indirect impact of such pandemic, as well as responses to the pandemic by the government, businesses and consumers, on our operations and personnel, commercial activity and demand across our business and our customers’ businesses;
  • the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect the Company’s liquidity and capital positions, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses;
  • the impact of the COVID-19 pandemic on our financial results, including possible lost revenue and increased expenses (including the cost of capital), as well as possible goodwill impairment charges;
  • economic conditions that affect the economy, housing prices, the job market and other factors that may adversely affect the Company’s liquidity and the performance of its loan portfolios, particularly in the markets in which it operates;
  • negative effects suffered by us or our customers resulting from changes in U.S. trade policies;
  • the extent of defaults and losses on the Company’s loan portfolio, which may require further increases in its allowance for credit losses;
  • estimates of fair value of certain of the Company’s assets and liabilities, which could change in value significantly from period to period;
  • the financial success and economic viability of the borrowers of our commercial loans;
  • commercial real estate market conditions in the Chicago metropolitan area and southern Wisconsin;
  • the extent of commercial and consumer delinquencies and declines in real estate values, which may require further increases in the Company’s allowance for credit losses;
  • inaccurate assumptions in our analytical and forecasting models used to manage our loan portfolio;
  • changes in the level and volatility of interest rates, the capital markets and other market indices (including developments and volatility arising from or related to the COVID-19 pandemic) that may affect, among other things, the Company’s liquidity and the value of its assets and liabilities;
  • a prolonged period of near zero interest rates or potentially negative interest rates, either broadly or for some types of instruments, which may affect the Company’s net interest income and net interest margin, and which could materially adversely affect the Company’s profitability;
  • competitive pressures in the financial services business which may affect the pricing of the Company’s loan and deposit products as well as its services (including wealth management services), which may result in loss of market share and reduced income from deposits, loans, advisory fees and income from other products;
  • failure to identify and complete favorable acquisitions in the future or unexpected difficulties or developments related to the integration of the Company’s recent or future acquisitions;
  • unexpected difficulties and losses related to FDIC-assisted acquisitions;
  • harm to the Company’s reputation;
  • any negative perception of the Company’s financial strength;
  • ability of the Company to raise additional capital on acceptable terms when needed;
  • disruption in capital markets, which may lower fair values for the Company’s investment portfolio;
  • ability of the Company to use technology to provide products and services that will satisfy customer demands and create efficiencies in operations and to manage risks associated therewith;
  • failure or breaches of our security systems or infrastructure, or those of third parties;
  • security breaches, including denial of service attacks, hacking, social engineering attacks, malware intrusion or data corruption attempts and identity theft;
  • adverse effects on our information technology systems resulting from failures, human error or cyberattacks;
  • adverse effects of failures by our vendors to provide agreed upon services in the manner and at the cost agreed, particularly our information technology vendors;
  • increased costs as a result of protecting our customers from the impact of stolen debit card information;
  • accuracy and completeness of information the Company receives about customers and counterparties to make credit decisions;
  • ability of the Company to attract and retain senior management experienced in the banking and financial services industries;
  • environmental liability risk associated with lending activities;
  • the impact of any claims or legal actions to which the Company is subject, including any effect on our reputation;
  • losses incurred in connection with repurchases and indemnification payments related to mortgages and increases in reserves associated therewith;
  • the loss of customers as a result of technological changes allowing consumers to complete their financial transactions without the use of a bank;
  • the soundness of other financial institutions;
  • the expenses and delayed returns inherent in opening new branches and de novo banks;
  • liabilities, potential customer loss or reputational harm related to closings of existing branches;
  • examinations and challenges by tax authorities, and any unanticipated impact of the Tax Act;
  • changes in accounting standards, rules and interpretations, and the impact on the Company’s financial statements;
  • the ability of the Company to receive dividends from its subsidiaries;
  • uncertainty about the discontinued use of LIBOR and transition to an alternative rate;
  • a decrease in the Company’s capital ratios, including as a result of declines in the value of its loan portfolios, or otherwise;
  • legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies, including those changes that are in response to the COVID-19 pandemic, including without limitation the CARES Act, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act, and the rules and regulations that may be promulgated thereunder;
  • a lowering of our credit rating;
  • changes in U.S. monetary policy and changes to the Federal Reserve’s balance sheet, including changes in response to the COVID-19 pandemic or otherwise;
  • regulatory restrictions upon our ability to market our products to consumers and limitations on our ability to profitably operate our mortgage business;
  • increased costs of compliance, heightened regulatory capital requirements and other risks associated with changes in regulation and the regulatory environment;
  • the impact of heightened capital requirements;
  • increases in the Company’s FDIC insurance premiums, or the collection of special assessments by the FDIC;
  • delinquencies or fraud with respect to the Company’s premium finance business;
  • credit downgrades among commercial and life insurance providers that could negatively affect the value of collateral securing the Company’s premium finance loans;
  • the Company’s ability to comply with covenants under its credit facility; and
  • fluctuations in the stock market, which may have an adverse impact on the Company’s wealth management business and brokerage operation.

Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by the Company. Any such statement speaks only as of the date the statement was made or as of such date that may be referenced within the statement. The Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events after the date of the press release. Persons are advised, however, to consult further disclosures management makes on related subjects in its reports filed with the Securities and Exchange Commission and in its press releases.

CONFERENCE CALL, WEBCAST AND REPLAY

The Company will hold a conference call on Tuesday, April 20, 2021 at 10:00 a.m. (Central Time) regarding first quarter 2021 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #3477928. A simultaneous audio-only webcast and replay of the conference call as well as an accompanying slide presentation may be accessed via the Company’s website at https://www.wintrust.com, Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the first quarter 2021 earnings press release will be available on the home page of the Company’s website at https://www.wintrust.com and at the Investor Relations, Investor News and Events, Press Releases link on its website.


FOR MORE INFORMATION CONTACT:
Edward J. Wehmer, Founder & Chief Executive Officer
David A. Dykstra, Vice Chairman & Chief Operating Officer
(847) 939-9000
Web site address: www.wintrust.com
Source: Wintrust Financial Corporation
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