Wintrust Financial Corporation Reports Fourth Quarter 2021 Net Income of $98.8 million and Record Full Year Net Income of $466.2 million

Rhea-AI Summary

Wintrust Financial Corporation (WTFC) reported net income of $98.8 million in Q4 2021, down 11% from Q3 2021. However, annual net income reached a record $466.2 million, up 59% from $293 million in 2020. Total assets increased by $2.3 billion to $50.1 billion, driven by a $2.0 billion rise in loans, excluding PPP loans. Non-performing loans decreased to 0.21% of total loans. Net interest income rose by $8.5 million, despite a slight decline in net interest margin to 2.54%. The company recorded a provision for credit losses of $9.3 million, reflecting strong loan growth.

Positive

• Annual net income increased to $466.2 million, up 59% y/y.
• Total assets rose by $2.3 billion to $50.1 billion.
• Total loans increased by $2.0 billion, excluding PPP loans.
• Non-performing loans fell to 0.21% of total loans, indicating improved credit quality.

Negative

• Net income for Q4 2021 decreased 11% from Q3 2021.
• Net interest margin declined to 2.54%, down four basis points.
• Recorded a provision for credit losses of $9.3 million.

ROSEMONT, Ill., Jan. 19, 2022 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, “we” or “our”) (Nasdaq: WTFC) announced net income of $98.8 million or $1.58 per diluted common share for the fourth quarter of 2021, a decrease in diluted earnings per common share of 11% compared to the third quarter of 2021. The Company recorded record annual net income of $466.2 million or $7.58 per diluted common share for the year ended December 31, 2021 compared to net income of $293.0 million or $4.68 per diluted common share for the same period of 2020.

Highlights of the Fourth Quarter of 2021:
Comparative information to the third quarter of 2021

• Total assets increased by $2.3 billion totaling $50.1 billion as of December 31, 2021.
• Total loans, excluding Paycheck Protection Program (“PPP”) loans, increased by $2.0 billion, or 25% on an annualized basis.
  • Core loans increased by $908 million and Niche loans increased by $1.1 billion. Niche loans included $578 million of growth related to loans acquired in a business combination completed in the fourth quarter of 2021.
  • PPP loans declined by $524 million in the fourth quarter of 2021 primarily as a result of processing forgiveness payments.
• Total deposits increased by $2.1 billion, including a $925 million increase in non-interest bearing deposits.
• Net interest income increased by $8.5 million as compared to the third quarter of 2021 as follows:
  • Increased $15.5 million primarily due to earning asset growth and a five basis point decline in deposit costs.
  • Decreased by $7.0 million due to $1.7 million less PPP interest income and $5.3 million less PPP fee income.
• Net interest margin decreased by four basis points primarily due to increased liquidity which had approximately a six basis point unfavorable impact.
  • However, the rate on interest bearing deposits declined by five basis points which more than offset a three basis point decline in loan yields.
• Recorded $6.2 million of net charge-offs or seven basis points on an annualized basis in the fourth quarter of 2021 as compared to no material net charge-offs in the third quarter of 2021.
• Recorded a provision for credit losses of $9.3 million in the fourth quarter of 2021 as compared to a negative provision for credit losses of $7.9 million in the third quarter of 2021. The provision for credit losses in the fourth quarter of 2021 was primarily due to strong loan growth with approximately $782,000 of provision for credit losses related to acquired loans.
• The allowance for credit losses on our core loan portfolio is approximately 1.33% of the outstanding balance as of December 31, 2021, down from 1.38% as of September 30, 2021. See Table 12 for more information.
• Non-performing loans decreased to 0.21% of total loans, as of December 31, 2021, down from 0.27% as of September 30, 2021.
• Mortgage banking revenue decreased to $53.1 million for the fourth quarter of 2021 as compared to $55.8 million in the third quarter of 2021.
• Tangible book value per common share (non-GAAP) increased to $59.64 as compared to $58.32 as of September 30, 2021. See Table 18 for reconciliation of non-GAAP measures.

Edward J. Wehmer, Founder and Chief Executive Officer, commented, "I am extremely proud of the Company’s performance in 2021 as we celebrated Wintrust’s 30th anniversary by reporting record annual net income and eclipsing $50 billion in total assets. The fourth quarter of 2021 was characterized by significant loan and deposit growth, increased net interest income, seasonally strong mortgage banking revenue, tangible book value growth and impressive credit quality metrics. Wintrust reported net income of $98.8 million for the fourth quarter of 2021, down from $109.1 million in the third quarter of 2021. On an annual basis, the Company had record net income totaling $466.2 million in 2021, up from $293.0 million in 2020. Total assets of $50.1 billion as of December 31, 2021 increased by $2.3 billion as compared to September 30, 2021 and increased by $5.1 billion as compared to December 31, 2020."

Mr. Wehmer continued, "The Company experienced significant loan growth as loans, excluding PPP loans, increased by $2.0 billion or 25%, on an annualized basis in the fourth quarter of 2021. We continue to pick up new market share and grow organically as all of our material loan portfolios exhibited strong growth in the fourth quarter of 2021 including our commercial, commercial real estate, residential real estate loans for investment, commercial insurance premium finance receivable and life insurance premium receivable portfolios. In addition, we completed an acquisition which contributed approximately $578 million of loan growth to the balance sheet. We believe this portfolio fits well with our existing insurance lending businesses. We are still experiencing historically low commercial line of credit utilization and feel confident that we can continue to grow loans given our robust loan pipelines and diversified loan portfolio. Further, our loan growth was predominantly in the second half of the fourth quarter of 2021 as loans as of December 31, 2021 were $1.1 billion higher than average total loans in the fourth quarter of 2021. Total deposits increased by $2.1 billion as compared to the third quarter of 2021 primarily in products with zero or near zero interest rates contributing to a decrease in our cost of funds. We continue to emphasize growing our franchise, including gathering low cost deposits, which we believe will drive value in the long term. Our loans to deposits ratio ended the quarter at 82.6% and we believe that we have sufficient liquidity to meet customer loan demand."

Mr. Wehmer commented, "Net interest income increased by $8.5 million in the fourth quarter of 2021 primarily due to earning asset growth and a decline in deposit costs. We believe that we have managed to optimize our cost of funds and successfully grown through this challenging interest rate cycle. Additionally, we have been prudent and measured in our approach to deploying liquidity into investment securities and we expect to expand our securities portfolio in 2022 to further enhance net interest income as available market returns improve. Net interest margin decreased by four basis points in the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to increased liquidity which had approximately a six basis point unfavorable impact. Excluding the unfavorable net interest margin impact from increased liquidity, the margin exhibited improvement as the rate on deposits declined five basis points as compared to a three basis point decline in loan yields."

Mr. Wehmer stated, “We have maintained our asset sensitive interest rate position which we expect to benefit us as short term interest rates rise. Based on modeled contractual cash flows, including prepayment assumptions, approximately 80% of our current loan balances are projected to reprice or mature in 2022. We project that, assuming an immediate and parallel 25 basis point rate hike, the cumulative increase to net interest income in the subsequent 12 months is approximately $40-$50 million. Such projections incorporate a number of assumptions and could differ materially depending on various factors including competition and the macroeconomic environment.”

Mr. Wehmer noted, “We recorded mortgage banking revenue of $53.1 million in the fourth quarter of 2021 as compared to $55.8 million in the third quarter of 2021. Loan volumes originated for sale in the fourth quarter of 2021 were $1.3 billion, down from $1.6 billion in the third quarter of 2021. Additionally, the Company recorded a $6.7 million increase in the value of mortgage servicing rights related to changes in fair value model assumptions as compared to an $888,000 decrease recognized in the third quarter of 2021. We are focused on expanding our market share of purchase originations understanding that refinance volumes may be pressured in a rising rate environment. Based on current market conditions, and excluding the impact of MSR valuation adjustments, we expect that mortgage banking revenue in the first quarter of 2022 will remain relatively similar to the level recorded in the fourth quarter of 2021.”

Commenting on credit quality, Mr. Wehmer stated, "The Company has reached a record low level of non-performing loans of 0.21% of total loans, as of December 31, 2021. During the fourth quarter of 2021, we continued our practice of pursuing the resolution of non-performing credits and executed a loan sale that reduced non-performing loans by approximately $10 million resulting in $1.8 million of net charge-offs. The fourth quarter of 2021 demonstrated another benign quarter of net charge-offs at $6.2 million following the third quarter of 2021 which had no material net charge-offs. The Company recorded a provision for credit losses of $9.3 million in the fourth quarter of 2021 primarily due to significant loan growth. The allowance for credit losses on our core loan portfolio as of December 31, 2021 is approximately 1.33% of the outstanding balance. We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit."

Mr. Wehmer concluded, “Our fourth quarter of 2021 results continued to demonstrate the multi-faceted nature of our business model which we believe uniquely positions us to be successful. We expect to leverage our differentiated, diversified loan portfolio to outperform peers with respect to loan growth which should allow us to continue to expand net interest income. We are focused on taking advantage of market opportunities to prudently deploy excess liquidity into earning assets including core and niche loans and investment securities while maintaining an interest rate sensitive asset portfolio. We are opportunistically evaluating the acquisition market which has been active for both banks and business lines of various sizes. Of course, we remain diligent in our consideration of acquisition targets and intend to be prudent in our decision-making, always seeking to minimize dilution.”

The graphs below illustrate certain financial highlights of the fourth quarter of 2021 as well as historical financial performance. See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information with respect to non-GAAP financial measures/ratios, including the reconciliations to the corresponding GAAP financial measures/ratios.

Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/f8ba0f96-41dd-4f04-a9bf-8082be4c0600

SUMMARY OF RESULTS:

BALANCE SHEET

Total asset growth of $2.3 billion in the fourth quarter of 2021 was primarily comprised of a $1.5 billion increase in total loans and a $1.0 billion increase in liquidity management assets partially offset by a $107 million decline in mortgage loans held-for-sale. Total loans, excluding PPP loans, increased by $2.0 billion as core loans increased by $908 million and niche loans increased by $1.1 billion, partially offset by a $524 million decline in PPP loans. See Table 1 for more information. Niche loans included $578 million of growth related to loans acquired in a business combination completed in the fourth quarter of 2021. As of December 31, 2021, virtually all of PPP loan balances originated in 2020 were forgiven with only $74 million remaining on balance sheet of which nearly all are in the forgiveness process. Whereas, as of December 31, 2021, approximately 64% of PPP loan balances originated in 2021 were forgiven, 14% are in the forgiveness review or submission process and 22% have yet to apply for forgiveness.

Total liabilities increased $2.2 billion in the fourth quarter of 2021 resulting primarily from a $2.1 billion increase in total deposits. The increase in deposits was primarily due to a $925 million increase in non-interest bearing deposits and a $692 million increase in money market deposits. The Company's loans to deposits ratio ended the quarter at 82.6%. Management believes in substantially funding the Company's balance sheet with core deposits and utilizes brokered or wholesale funding sources on a limited basis to manage its liquidity position as well as for interest rate risk management purposes.

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

NET INTEREST INCOME

For the fourth quarter of 2021, net interest income totaled $296.0 million, an increase of $8.5 million as compared to the third quarter of 2021. The $8.5 million increase in net interest income in the fourth quarter of 2021 compared to the third quarter of 2021 was primarily due to earning asset growth and a decline in deposit costs. Additionally, the net interest income growth occurred despite a decline of $7.0 million due to $1.7 million less PPP interest income and $5.3 million less PPP fee income.  As of December 31, 2021, the Company had approximately $12.7 million of net PPP loan fees that have yet to be recognized in income.

Net interest margin was 2.54% (2.55% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2021 compared to 2.58% (2.59% on a fully taxable-equivalent basis, non-GAAP) during the third quarter of 2021. The net interest margin decrease as compared to the prior quarter was primarily due to the seven basis point decrease in yield on earning assets and three basis point decrease in the net free funds contribution partially offset by a six basis point decrease in the rate paid on interest-bearing liabilities. The decrease in the rate paid on interest-bearing liabilities in the fourth quarter of 2021 as compared to the third quarter of 2021 is primarily due to a five basis point decrease in the rate paid on interest-bearing deposits primarily due to lower repricing of time deposits. The seven basis point decrease in the yield on earning assets in the fourth quarter of 2021 as compared to the third quarter of 2021 was primarily due to a shift in earning asset mix with increasing levels of lower yielding liquidity management assets.

For more information regarding net interest income, see Tables 4 through 8 in this report.

ASSET QUALITY

The allowance for credit losses totaled $299.7 million as of December 31, 2021, an increase of $3.6 million as compared to $296.1 million as of September 30, 2021. The allowance for credit losses increased primarily due to growth in the loan portfolio and was partially offset by improvement in macroeconomic factors. A provision for credit losses totaling $9.3 million was recorded for the fourth quarter of 2021 as compared to a negative provision of $7.9 million for the third quarter of 2021. For more information regarding the provision for credit losses, see Table 11 in this report.

Management believes the allowance for credit losses is appropriate to account for expected credit losses. The Current Expected Credit Losses (“CECL”) accounting standard requires the Company to estimate expected credit losses over the life of the Company’s financial assets as of the reporting date. There can be no assurances, however, that future losses will not significantly exceed the amounts provided for, thereby affecting future results of operations. A summary of the allowance for credit losses calculated for the loan components in each portfolio as of December 31, 2021, September 30, 2021, and June 30, 2021 is shown on Table 12 of this report.

Net charge-offs totaled $6.2 million in the fourth quarter of 2021, as compared to no material net charge-offs in the third quarter of 2021. Net charge-offs as a percentage of average total loans were reported as seven basis points in the fourth quarter of 2021 on an annualized basis compared to zero basis points on an annualized basis in the third quarter of 2021. For more information regarding net charge-offs, see Table 10 in this report.

As of December 31, 2021, $53.7 million of all loans, or 0.2%, were 60 to 89 days past due and $187.4 million, or 0.5%, were 30 to 59 days (or one payment) past due. As of September 30, 2021, $32.9 million of all loans, or 0.1%, were 60 to 89 days past due and $128.8 million, or 0.4%, were 30 to 59 days (or one payment) past due. Many of the commercial and commercial real-estate loans shown as 60 to 89 days and 30 to 59 days past due are included on the Company’s internal problem loan reporting system. Loans on this system are closely monitored by management on a monthly basis.

The Company’s home equity and residential real estate loan portfolios continue to exhibit low delinquency rates as of December 31, 2021. Home equity loans at December 31, 2021 that are current with regard to the contractual terms of the loan agreement represent 98.9% of the total home equity portfolio. Residential real estate loans at December 31, 2021 that are current with regards to the contractual terms of the loan agreements comprised 98.2% of total residential real estate loans outstanding. For more information regarding past due loans, see Table 13 in this report. 

The ratio of non-performing assets to total assets was 0.16% as of December 31, 2021, compared to 0.22% at September 30, 2021. Non-performing assets totaled $78.7 million at December 31, 2021, compared to $103.9 million at September 30, 2021. Non-performing loans totaled $74.4 million, or 0.21% of total loans, at December 31, 2021 compared to $90.0 million, or 0.27% of total loans, at September 30, 2021. Other real estate owned (“OREO”) totaled $4.3 million at December 31, 2021, a decrease of $9.6 million compared to $13.8 million at September 30, 2021. Management is pursuing the resolution of all non-performing assets. At this time, management believes OREO is appropriately valued at the lower of carrying value or fair value less estimated costs to sell. For more information regarding non-performing assets, see Table 14 in this report.

NON-INTEREST INCOME

Wealth management revenue increased by $1.0 million during the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to increased trust and asset management fees. Wealth management revenue is comprised of the trust and asset management revenue of The Chicago Trust Company and Great Lakes Advisors, the brokerage commissions, managed money fees and insurance product commissions at Wintrust Investments and fees from tax-deferred like-kind exchange services provided by the Chicago Deferred Exchange Company.

Mortgage banking revenue decreased by $2.7 million in the fourth quarter of 2021 as compared to the third quarter of 2021, primarily due to an $11.1 million decline in production revenue. This decrease was partially offset by a $6.7 million favorable mortgage servicing rights portfolio fair value adjustment as compared to an $888,000 decrease recognized in the prior quarter.  Loans originated for sale were $1.3 billion in the fourth quarter of 2021, a decrease of $260 million as compared to the third quarter of 2021. The percentage of origination volume from refinancing activities was 48% in the fourth quarter of 2021 as compared to 44% in the third quarter of 2021. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market.

During the fourth quarter of 2021, the fair value of the mortgage servicing rights portfolio increased primarily due to the capitalization of $15.1 million of servicing rights and a fair value adjustment increase of $6.7 million.  These increases were partially offset by a reduction in value of $7.5 million due to payoffs and paydowns of the existing portfolio.

The Company recognized net losses on investment securities of $1.1 million in the fourth quarter of 2021 as compared to net losses of $2.4 million recognized in the third quarter of 2021. 

Net operating lease income totaled $14.2 million in the fourth quarter of 2021 as compared to $12.8 million in the prior quarter.  The $1.4 million increase in the fourth quarter of 2021 is primarily attributable to increased gains on sale of lease assets as compared to the third quarter of 2021.

Other non-interest income decreased by $4.5 million in the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to a $3.7 million decrease in income on partnership investments.

For more information regarding non-interest income, see Tables 15 and 16 in this report.

NON-INTEREST EXPENSE

Salaries and employee benefits expense decreased by $3.8 million in the fourth quarter of 2021 as compared to the third quarter of 2021. The $3.8 million decline is primarily related to lower incentive compensation expense and lower commissions expense due to declining mortgage production, partially offset by increased staffing expense as the company grows.

Software and equipment expense totaled $23.7 million in the fourth quarter of 2021, an increase of $1.7 million as compared to the third quarter of 2021. The increase in the fourth quarter of 2021 is primarily due to accelerated depreciation related to the reduction in the useful life of a software asset that is planned to be replaced as we continue to make upgrades to our digital customer experience.

The Company recorded a net OREO gain of $641,000 in the fourth quarter of 2021 as compared to a net gain of $1.5 million in the third quarter of 2021.  The net gains are primarily attributable to the sale of OREO properties during the third and fourth quarter of 2021.

Miscellaneous expense in the fourth quarter of 2021 increased by $864,000 as compared to the third quarter of 2021.  Miscellaneous expense includes ATM expenses, correspondent bank charges, directors fees, telephone, travel and entertainment, corporate insurance, dues and subscriptions, problem loan expenses and lending origination costs that are not deferred.

For more information regarding non-interest expense, see Table 17 in this report.

INCOME TAXES

The Company recorded income tax expense of $38.3 million in the fourth quarter of 2021 compared to $40.6 million in the third quarter of 2021. The effective tax rates were 27.94% in the fourth quarter of 2021 compared to 27.12% in the third quarter of 2021.

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking unit, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the fourth quarter of 2021, this unit expanded its loan portfolio and its deposit portfolio. The segment’s net interest income increased in the fourth quarter of 2021 as compared to the third quarter of 2021 primarily due to growth in earning assets despite a net interest margin decrease primarily due to increased liquidity.

Mortgage banking revenue was $53.1 million for the fourth quarter of 2021, a decrease of $2.7 million as compared to the third quarter of 2021. Service charges on deposit accounts totaled $14.7 million in the fourth quarter of 2021, an increase of $585,000 as compared to the third quarter of 2021 primarily due to higher fees associated with commercial account activity. The Company’s gross commercial and commercial real estate loan pipelines remained strong as of December 31, 2021. Before the impact of scheduled payments and prepayments, gross commercial and commercial real estate loan pipelines were estimated to be approximately $1.1 billion to $1.3 billion at December 31, 2021. When adjusted for the probability of closing, the pipelines were estimated to be approximately $700 million to $800 million at December 31, 2021.

Specialty Finance

Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries, accounts receivable financing and value-added, out-sourced administrative services and other services. Originations within the insurance premium financing receivables portfolio were $3.6 billion during the fourth quarter of 2021 and average balances increased by $386.3 million as compared to the third quarter of 2021. The increase in average balances in the insurance premium finance receivables portfolios primarily generated a $2.1 million increase in interest income. The Company’s leasing portfolio increased in the fourth quarter of 2021, with its portfolio of assets, including capital leases, loans and equipment on operating leases, at $2.4 billion at the end of the fourth quarter of 2021 as compared to $2.3 billion at the end of third quarter of 2021. Revenues from the Company’s out-sourced administrative services business were $1.8 million in the fourth quarter of 2021, up $487,000 from the third quarter of 2021.

Wealth Management

Through four separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, tax-deferred like-kind exchange services, asset management, securities brokerage services and 401(k) and retirement plan services. Wealth management revenue totaled $32.5 million in the fourth quarter of 2021, an increase of $1.0 million compared to the third quarter of 2021. Increases in asset management fees were primarily due to favorable equity market performance during the fourth quarter of 2021. At December 31, 2021, the Company’s wealth management subsidiaries had approximately $35.5 billion of assets under administration, which included $5.3 billion of assets owned by the Company and its subsidiary banks, representing a $963.9 million increase from the $34.5 billion of assets under administration at September 30, 2021.

ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS

Acquisitions

On November 15, 2021, the Company completed its previously-announced purchase of loans with a fair value of approximately $582 million, net of allowance for credit losses measured on the acquisition date, from the Allstate Corporation. The loan portfolio was comprised of approximately 1,800 loans to Allstate agents nationally. In addition to acquiring the loans, the Company became the national preferred provider of loans to Allstate agents. In connection with the loan acquisition, a team of Allstate agency lending specialists joined the Company, to augment and expand Wintrust’s existing insurance agency finance business. As the transaction was determined to be a business combination, the Company recorded goodwill of approximately $9.3 million on the purchase.

WINTRUST FINANCIAL CORPORATION
Key Operating Measures

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

													% or(1) basis point  (bp) change from 3rd Quarter 2021				% or basis point  (bp) change from 4th Quarter 2020
		Three Months Ended
(Dollars in thousands, except per share data)		Dec 31, 2021				Sep 30, 2021				Dec 31, 2020
Net income		$	98,757			$	109,137			$	101,204		(10	)	%		(2	)	%
Pre-tax income, excluding provision for credit losses (non-GAAP) (2)			146,344				141,826				135,891		3				8
Net income per common share – diluted			1.58				1.77				1.63		(11	)			(3	)
Cash dividends declared per common share			0.31				0.31				0.28		—				11
Net revenue (3)			429,743				423,970				417,758		1				3
Net interest income			295,976				287,496				259,397		3				14
Net interest margin			2.54	%			2.58	%			2.53	%	(4	)	bps		1		bps
Net interest margin – fully taxable-equivalent (non-GAAP) (2)			2.55				2.59				2.54		(4	)			1
Net overhead ratio (4)			1.21				1.22				1.12		(1	)			9
Return on average assets			0.80				0.92				0.92		(12	)			(12	)
Return on average common equity			9.05				10.31				10.30		(126	)			(125	)
Return on average tangible common equity (non-GAAP) (2)			11.04				12.62				12.95		(158	)			(191	)
At end of period
Total assets		$	50,142,143			$	47,832,271			$	45,080,768		19		%		11		%
Total loans (5)			34,789,104				33,264,043				32,079,073		18				8
Total deposits			42,095,585				39,952,558				37,092,651		21				13
Total shareholders’ equity			4,498,688				4,410,317				4,115,995		8				9

(1) Period-end balance sheet percentage changes are annualized. 
(2) See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information on this performance measure/ratio. 
(3) Net revenue is net interest income plus non-interest income. 
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency. 
(5) Excludes mortgage loans held-for-sale.

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

WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights

		Three Months Ended																			Years Ended
(Dollars in thousands, except per share data)		Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020			Dec 31, 2021				Dec 31, 2020
Selected Financial Condition Data (at end of period):
Total assets		$	50,142,143			$	47,832,271			$	46,738,450			$	45,682,202			$	45,080,768
Total loans (1)			34,789,104				33,264,043				32,911,187				33,171,233				32,079,073
Total deposits			42,095,585				39,952,558				38,804,616				37,872,652				37,092,651
Total shareholders’ equity			4,498,688				4,410,317				4,339,011				4,252,511				4,115,995
Selected Statements of Income Data:
Net interest income		$	295,976			$	287,496			$	279,590			$	261,895			$	259,397		$	1,124,957			$	1,039,907
Net revenue (2)			429,743				423,970				408,963				448,401				417,758			1,711,077				1,644,096
Net income			98,757				109,137				105,109				153,148				101,204			466,151				292,990
Pre-tax income, excluding provision for credit losses (non-GAAP) (3)			146,344				141,826				128,851				161,512				135,891			578,533				604,001
Net income per common share – Basic			1.61				1.79				1.72				2.57				1.64			7.69				4.72
Net income per common share – Diluted			1.58				1.77				1.70				2.54				1.63			7.58				4.68
Cash dividends declared per common share			0.31				0.31				0.31				0.31				0.28			1.24				1.12
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin			2.54	%			2.58	%			2.62	%			2.53	%			2.53	%		2.57	%			2.72	%
Net interest margin – fully taxable-equivalent (non-GAAP) (3)			2.55				2.59				2.63				2.54				2.54			2.58				2.73
Non-interest income to average assets			1.08				1.15				1.13				1.68				1.44			1.25				1.46
Non-interest expense to average assets			2.29				2.37				2.45				2.59				2.56			2.42				2.51
Net overhead ratio (4)			1.21				1.22				1.32				0.90				1.12			1.17				1.05
Return on average assets			0.80				0.92				0.92				1.38				0.92			1.00				0.71
Return on average common equity			9.05				10.31				10.24				15.80				10.30			11.27				7.50
Return on average tangible common equity (non-GAAP) (3)			11.04				12.62				12.62				19.49				12.95			13.83				9.54
Average total assets		$	49,118,777			$	47,192,510			$	45,946,751			$	44,988,733			$	43,810,005		$	46,824,051			$	41,371,339
Average total shareholders’ equity			4,433,953				4,343,915				4,256,778				4,164,890				4,050,286			4,300,742				3,926,688
Average loans to average deposits ratio			81.7	%			83.8	%			86.7	%			87.1	%			87.9	%		84.7	%			88.8	%
Period-end loans to deposits ratio			82.6				83.3				84.8				87.6				86.5
Common Share Data at end of period:
Market price per common share		$	90.82			$	80.37			$	75.63			$	75.80			$	61.09
Book value per common share			71.62				70.19				68.81				67.34				65.24
Tangible book value per common share (non-GAAP) (3)			59.64				58.32				56.92				55.42				53.23
Common shares outstanding			57,054,091				56,956,026				57,066,677				57,023,273				56,769,625
Other Data at end of period:
Tier 1 leverage ratio (5)			8.0	%			8.1	%			8.2	%			8.2	%			8.1	%
Risk-based capital ratios:
Tier 1 capital ratio (5)			9.6				9.9				10.1				10.2				10.0
Common equity tier 1 capital ratio (5)			8.5				8.9				9.0				9.0				8.8
Total capital ratio (5)			11.6				12.1				12.4				12.6				12.6
Allowance for credit losses (6)		$	299,731			$	296,138			$	304,121			$	321,308			$	379,969
Allowance for loan and unfunded lending-related commitment losses to total loans			0.86	%			0.89	%			0.92	%			0.97	%			1.18	%
Number of:
Bank subsidiaries			15				15				15				15				15
Banking offices			173				172				172				182				181

(1) Excludes mortgage loans held-for-sale. 
(2) Net revenue is net interest income and non-interest income. 
(3) See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information on this performance measure/ratio. 
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency. 
(5) Capital ratios for current quarter-end are estimated. 
(6) The allowance for credit losses includes the allowance for loan losses, the allowance for unfunded lending-related commitments and the allowance for held-to-maturity securities losses.

 

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)			2021				2021				2021				2021				2020
Assets
Cash and due from banks		$	411,150			$	462,244			$	434,957			$	426,325			$	322,415
Federal funds sold and securities purchased under resale agreements			700,055				55				52				52				59
Interest-bearing deposits with banks			5,372,603				5,232,315				4,707,415				3,348,794				4,802,527
Available-for-sale securities, at fair value			2,327,793				2,373,478				2,188,608				2,430,749				3,055,839
Held-to-maturity securities, at amortized cost			2,942,285				2,736,722				2,498,232				2,166,419				579,138
Trading account securities			1,061				1,103				2,667				951				671
Equity securities with readily determinable fair value			90,511				88,193				86,316				90,338				90,862
Federal Home Loan Bank and Federal Reserve Bank stock			135,378				135,408				136,625				135,881				135,588
Brokerage customer receivables			26,068				26,378				23,093				19,056				17,436
Mortgage loans held-for-sale			817,912				925,312				984,994				1,260,193				1,272,090
Loans, net of unearned income			34,789,104				33,264,043				32,911,187				33,171,233				32,079,073
Allowance for loan losses			(247,835	)			(248,612	)			(261,089	)			(277,709	)			(319,374	)
Net loans			34,541,269				33,015,431				32,650,098				32,893,524				31,759,699
Premises, software and equipment, net			766,405				748,872				752,375				760,522				768,808
Lease investments, net			242,082				243,933				219,023				238,984				242,434
Accrued interest receivable and other assets			1,084,115				1,166,917				1,185,811				1,230,362				1,351,455
Trade date securities receivable			—				—				189,851				—				—
Goodwill			655,149				645,792				646,336				646,017				645,707
Other acquisition-related intangible assets			28,307				30,118				31,997				34,035				36,040
Total assets		$	50,142,143			$	47,832,271			$	46,738,450			$	45,682,202			$	45,080,768
Liabilities and Shareholders’ Equity
Deposits:
Non-interest-bearing		$	14,179,980			$	13,255,417			$	12,796,110			$	12,297,337			$	11,748,455
Interest-bearing			27,915,605				26,697,141				26,008,506				25,575,315				25,344,196
Total deposits			42,095,585				39,952,558				38,804,616				37,872,652				37,092,651
Federal Home Loan Bank advances			1,241,071				1,241,071				1,241,071				1,228,436				1,228,429
Other borrowings			494,136				504,527				518,493				516,877				518,928
Subordinated notes			436,938				436,811				436,719				436,595				436,506
Junior subordinated debentures			253,566				253,566				253,566				253,566				253,566
Trade date securities payable			—				1,348				—				995				200,907
Accrued interest payable and other liabilities			1,122,159				1,032,073				1,144,974				1,120,570				1,233,786
Total liabilities			45,643,455				43,421,954				42,399,439				41,429,691				40,964,773
Shareholders’ Equity:
Preferred stock			412,500				412,500				412,500				412,500				412,500
Common stock			58,892				58,794				58,770				58,727				58,473
Surplus			1,685,572				1,674,062				1,669,002				1,663,008				1,649,990
Treasury stock			(109,903	)			(109,903	)			(100,363	)			(100,363	)			(100,363	)
Retained earnings			2,447,535				2,373,447				2,288,969				2,208,535				2,080,013
Accumulated other comprehensive income			4,092				1,417				10,133				10,104				15,382
Total shareholders’ equity			4,498,688				4,410,317				4,339,011				4,252,511				4,115,995
Total liabilities and shareholders’ equity		$	50,142,143			$	47,832,271			$	46,738,450			$	45,682,202			$	45,080,768

 

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

	Three Months Ended																			Years Ended
(In thousands, except per share data)	Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020			Dec 31, 2021				Dec 31, 2020
Interest income
Interest and fees on loans	$	289,140			$	285,587			$	284,701			$	274,100			$	280,185		$	1,133,528			$	1,157,249
Mortgage loans held-for-sale		7,234				7,716				8,183				9,036				6,357			32,169				20,077
Interest-bearing deposits with banks		2,254				2,000				1,153				1,199				1,294			6,606				8,553
Federal funds sold and securities purchased under resale agreements		173				—				—				—				—			173				102
Investment securities		27,210				25,189				23,623				19,264				18,243			95,286				99,634
Trading account securities		4				3				1				2				11			10				37
Federal Home Loan Bank and Federal Reserve Bank stock		1,776				1,777				1,769				1,745				1,775			7,067				6,891
Brokerage customer receivables		188				185				149				123				116			645				477
Total interest income		327,979				322,457				319,579				305,469				307,981			1,275,484				1,293,020
Interest expense
Interest on deposits		16,572				19,305				24,298				27,944				32,602			88,119				189,178
Interest on Federal Home Loan Bank advances		4,923				4,931				4,887				4,840				4,952			19,581				18,193
Interest on other borrowings		2,250				2,501				2,568				2,609				2,779			9,928				12,773
Interest on subordinated notes		5,514				5,480				5,512				5,477				5,509			21,983				21,961
Interest on junior subordinated debentures		2,744				2,744				2,724				2,704				2,742			10,916				11,008
Total interest expense		32,003				34,961				39,989				43,574				48,584			150,527				253,113
Net interest income		295,976				287,496				279,590				261,895				259,397			1,124,957				1,039,907
Provision for credit losses		9,299				(7,916	)			(15,299	)			(45,347	)			1,180			(59,263	)			214,220
Net interest income after provision for credit losses		286,677				295,412				294,889				307,242				258,217			1,184,220				825,687
Non-interest income
Wealth management		32,489				31,531				30,690				29,309				26,802			124,019				100,336
Mortgage banking		53,138				55,794				50,584				113,494				86,819			273,010				346,013
Service charges on deposit accounts		14,734				14,149				13,249				12,036				11,841			54,168				45,023
(Losses) gains on investment securities, net		(1,067	)			(2,431	)			1,285				1,154				1,214			(1,059	)			(1,926	)
Fees from covered call options		1,128				1,157				1,388				—				—			3,673				2,292
Trading gains (losses), net		206				58				(438	)			419				(102	)		245				(1,004	)
Operating lease income, net		14,204				12,807				12,240				14,440				12,118			53,691				47,604
Other		18,935				23,409				20,375				15,654				19,669			78,373				65,851
Total non-interest income		133,767				136,474				129,373				186,506				158,361			586,120				604,189
Non-interest expense
Salaries and employee benefits		167,131				170,912				172,817				180,809				171,116			691,669				626,076
Software and equipment		23,708				22,029				20,866				20,912				20,565			87,515				68,496
Operating lease equipment depreciation		10,147				10,013				9,949				10,771				9,938			40,880				37,915
Occupancy, net		18,343				18,158				17,687				19,996				19,687			74,184				69,957
Data processing		7,207				7,104				6,920				6,048				5,728			27,279				30,196
Advertising and marketing		13,981				13,443				11,305				8,546				9,850			47,275				36,296
Professional fees		7,551				7,052				7,304				7,587				6,530			29,494				27,426
Amortization of other acquisition-related intangible assets		1,811				1,877				2,039				2,007				2,634			7,734				11,018
FDIC insurance		7,317				6,750				6,405				6,558				7,016			27,030				25,004
OREO expense, net		(641	)			(1,531	)			769				(251	)			(114	)		(1,654	)			(921	)
Other		26,844				26,337				24,051				23,906				28,917			101,138				108,632
Total non-interest expense		283,399				282,144				280,112				286,889				281,867			1,132,544				1,040,095
Income before taxes		137,045				149,742				144,150				206,859				134,711			637,796				389,781
Income tax expense		38,288				40,605				39,041				53,711				33,507			171,645				96,791
Net income	$	98,757			$	109,137			$	105,109			$	153,148			$	101,204		$	466,151			$	292,990
Preferred stock dividends		6,991				6,991				6,991				6,991				6,991			27,964				21,377
Net income applicable to common shares	$	91,766			$	102,146			$	98,118			$	146,157			$	94,213		$	438,187			$	271,613
Net income per common share - Basic	$	1.61			$	1.79			$	1.72			$	2.57			$	1.64		$	7.69			$	4.72
Net income per common share - Diluted	$	1.58			$	1.77			$	1.70			$	2.54			$	1.63		$	7.58			$	4.68
Cash dividends declared per common share	$	0.31			$	0.31			$	0.31			$	0.31			$	0.28		$	1.24			$	1.12
Weighted average common shares outstanding		57,022				57,000				57,049				56,904				57,309			56,994				57,523
Dilutive potential common shares		976				753				726				681				588			792				496
Average common shares and dilutive common shares		57,998				57,753				57,775				57,585				57,897			57,786				58,019

 

TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES

															% Growth From (2)
(Dollars in thousands)	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020		Sep 30, 2021 (1)			Dec 31, 2020
Balance:
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. Government Agencies	$	473,102		$	570,663		$	633,006		$	890,749		$	927,307	(68	)%		(49	)%
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. Government Agencies		344,810			354,649			351,988			369,444			344,783	(11	)		—
Total mortgage loans held-for-sale	$	817,912		$	925,312		$	984,994		$	1,260,193		$	1,272,090	(46	)%		(36	)%
Core loans:
Commercial
Commercial and industrial	$	5,346,084		$	4,953,769		$	4,650,607		$	4,630,795		$	4,675,594	31	%		14	%
Asset-based lending		1,299,869			1,066,376			892,109			720,772			721,666	87			80
Municipal		536,498			524,192			511,094			493,417			474,103	9			13
Leases		1,454,099			1,365,281			1,357,036			1,290,778			1,288,374	26			13
Commercial real estate
Residential construction		51,464			49,754			55,735			72,058			89,389	14			(42	)
Commercial construction		1,034,988			1,038,034			1,090,447			1,040,631			1,041,729	(1	)		(1	)
Land		269,752			255,927			239,067			240,635			240,684	21			12
Office (3)		1,285,686			1,269,746			1,220,658			1,131,472			1,136,844	5			13
Industrial (3)		1,585,808			1,490,358			1,434,377			1,152,522			1,129,433	25			40
Retail (3)		1,429,567			1,462,101			1,455,638			1,198,025			1,224,403	(9	)		17
Multi-family (3)		2,043,754			2,038,526			1,984,582			1,739,521			1,649,801	1			24
Mixed use and other (3)		1,289,267			1,281,268			1,197,865			1,969,915			1,981,849	2			(35	)
Home equity		335,155			347,662			369,806			390,253			425,263	(14	)		(21	)
Residential real estate
Residential real estate loans for investment		1,614,392			1,528,889			1,485,952			1,376,465			1,214,744	22			33
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. Government Agencies		22,707			18,847			44,333			45,508			44,854	81			(49	)
Total core loans	$	19,599,090		$	18,690,730		$	17,989,306		$	17,492,767		$	17,338,730	19	%		13	%
Niche loans:
Commercial
Franchise	$	1,227,234		$	1,176,569		$	1,060,468		$	1,128,493		$	1,023,027	17	%		20	%
Mortgage warehouse lines of credit		359,818			468,162			529,867			587,868			567,389	(92	)		(37	)
Community Advantage - homeowners association		308,286			291,153			287,689			272,222			267,374	23			15
Insurance agency lending		813,897			260,482			273,999			290,880			222,519	843			266
Premium Finance receivables
U.S. commercial insurance		4,178,474			3,921,289			3,805,504			3,342,730			3,438,087	26			22
Canada commercial insurance		677,013			695,688			716,367			615,813			616,402	(11	)		10
Life insurance		7,042,810			6,655,453			6,359,556			6,111,495			5,857,436	23			20
Consumer and other		24,199			22,529			9,024			35,983			32,188	29			(25	)
Total niche loans	$	14,631,731		$	13,491,325		$	13,042,474		$	12,385,484		$	12,024,422	34	%		22	%
Commercial PPP loans:
Originated in 2020	$	74,412		$	172,849		$	656,502		$	2,049,342		$	2,715,921	NM			(97	)%
Originated in 2021		483,871			909,139			1,222,905			1,243,640			—	NM			100
Total commercial PPP loans	$	558,283		$	1,081,988		$	1,879,407		$	3,292,982		$	2,715,921	NM			(79	)%
Total loans, net of unearned income	$	34,789,104		$	33,264,043		$	32,911,187		$	33,171,233		$	32,079,073	18	%		8	%

(1) Annualized. 
(2) NM - Not meaningful. 
(3) As a result of a review of the composition of borrowers within the mixed use and other loan portfolio, the Company identified certain loans that would be more precisely classified within a separate class of non-construction commercial real estate. This change in classification was based on related collateral and source of repayment of the underlying loan. Balances within such categories were also updated as of September 30, 2021 and June 30, 2021 in the table above for comparison purposes.

 

TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

																				% Growth From
(Dollars in thousands)	Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020			Sep 30, 2021 (1)			Dec 31, 2020
Balance:
Non-interest-bearing	$	14,179,980			$	13,255,417			$	12,796,110			$	12,297,337			$	11,748,455		28	%		21	%
NOW and interest-bearing demand deposits		4,158,871				3,769,825				3,625,538				3,562,312				3,349,021		41			24
Wealth management deposits (2)		4,491,795				4,177,820				4,399,303				4,274,527				4,138,712		30			9
Money market		11,449,469				10,757,654				9,843,390				9,236,434				9,348,806		26			22
Savings		3,846,681				3,861,296				3,776,400				3,690,892				3,531,029		(2	)		9
Time certificates of deposit		3,968,789				4,130,546				4,363,875				4,811,150				4,976,628		(16	)		(20	)
Total deposits	$	42,095,585			$	39,952,558			$	38,804,616			$	37,872,652			$	37,092,651		21	%		13	%
Mix:
Non-interest-bearing		34	%			33	%			33	%			32	%			32	%
NOW and interest-bearing demand deposits		10				9				9				9				9
Wealth management deposits (2)		11				11				11				11				11
Money market		27				27				25				25				25
Savings		9				10				10				10				10
Time certificates of deposit		9				10				12				13				13
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 December 31, 2021

(Dollars in thousands)		Total Time Certificates of Deposit			Weighted-Average Rate of Maturing Time Certificates     of Deposit (1)
1-3 months		$	838,321		0.52	%
4-6 months			686,126		0.38
7-9 months			677,003		0.39
10-12 months			613,644		0.41
13-18 months			601,464		0.47
19-24 months			293,945		0.48
24+ months			258,286		0.52
Total		$	3,968,789		0.45	%

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

 

TABLE 4: QUARTERLY AVERAGE BALANCES

		Average Balance for three months ended,
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)			2021				2021				2021				2021				2020
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents (1)		$	6,148,165			$	5,112,720			$	3,844,355			$	4,230,886			$	4,381,040
Investment securities (2)			5,317,351				5,065,593				4,771,403				3,944,676				3,534,594
FHLB and FRB stock			135,414				136,001				136,324				135,758				135,569
Liquidity management assets (3)			11,600,930				10,314,314				8,752,082				8,311,320				8,051,203
Other earning assets (3)(4)			28,298				28,238				23,354				20,370				18,716
Mortgage loans held-for-sale			827,672				871,824				991,011				1,151,848				893,395
Loans, net of unearned income (3)(5)			33,677,777				32,985,445				33,085,174				32,442,927				31,783,279
Total earning assets (3)			46,134,677				44,199,821				42,851,621				41,926,465				40,746,593
Allowance for loan and investment security losses			(254,874	)			(269,963	)			(285,686	)			(327,080	)			(336,139	)
Cash and due from banks			468,331				425,000				470,566				366,413				344,536
Other assets			2,770,643				2,837,652				2,910,250				3,022,935				3,055,015
Total assets		$	49,118,777			$	47,192,510			$	45,946,751			$	44,988,733			$	43,810,005
NOW and interest-bearing demand deposits		$	3,962,739			$	3,757,677			$	3,626,424			$	3,493,451			$	3,320,527
Wealth management deposits			4,514,319				4,672,402				4,369,998				4,156,398				4,066,948
Money market accounts			11,274,230				10,027,424				9,547,167				9,335,920				9,435,344
Savings accounts			3,766,037				3,851,523				3,728,271				3,587,566				3,413,388
Time deposits			4,058,282				4,236,317				4,632,796				4,875,392				5,043,558
Interest-bearing deposits			27,575,607				26,545,343				25,904,656				25,448,727				25,279,765
Federal Home Loan Bank advances			1,241,073				1,241,073				1,235,142				1,228,433				1,228,425
Other borrowings			501,933				512,785				525,924				518,188				510,725
Subordinated notes			436,861				436,746				436,644				436,532				436,433
Junior subordinated debentures			253,566				253,566				253,566				253,566				253,566
Total interest-bearing liabilities			30,009,040				28,989,513				28,355,932				27,885,446				27,708,914
Non-interest-bearing deposits			13,640,270				12,834,084				12,246,274				11,811,194				10,874,912
Other liabilities			1,035,514				1,024,998				1,087,767				1,127,203				1,175,893
Equity			4,433,953				4,343,915				4,256,778				4,164,890				4,050,286
Total liabilities and shareholders’ equity		$	49,118,777			$	47,192,510			$	45,946,751			$	44,988,733			$	43,810,005
Net free funds/contribution (6)		$	16,125,637			$	15,210,308			$	14,495,689			$	14,041,019			$	13,037,679

(1) Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less. 
(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 18 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,
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)			2021				2021				2021				2021				2020
Interest income:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents		$	2,427			$	2,000			$	1,153			$	1,199			$	1,294
Investment securities			27,696				25,681				24,117				19,764				18,773
FHLB and FRB stock			1,776				1,777				1,769				1,745				1,775
Liquidity management assets (1)			31,899				29,458				27,039				22,708				21,842
Other earning assets (1)			194				188				150				125				130
Mortgage loans held-for-sale			7,234				7,716				8,183				9,036				6,357
Loans, net of unearned income (1)			289,557				285,998				285,116				274,484				280,509
Total interest income		$	328,884			$	323,360			$	320,488			$	306,353			$	308,838
Interest expense:
NOW and interest-bearing demand deposits		$	774			$	767			$	736			$	901			$	1,074
Wealth management deposits			7,595				7,888				7,686				7,351				7,436
Money market accounts			2,604				2,342				2,795				2,865				3,740
Savings accounts			345				406				402				430				773
Time deposits			5,254				7,902				12,679				16,397				19,579
Interest-bearing deposits			16,572				19,305				24,298				27,944				32,602
Federal Home Loan Bank advances			4,923				4,931				4,887				4,840				4,952
Other borrowings			2,250				2,501				2,568				2,609				2,779
Subordinated notes			5,514				5,480				5,512				5,477				5,509
Junior subordinated debentures			2,744				2,744				2,724				2,704				2,742
Total interest expense		$	32,003			$	34,961			$	39,989			$	43,574			$	48,584
Less:  Fully taxable-equivalent adjustment			(905	)			(903	)			(909	)			(884	)			(857	)
Net interest income (GAAP) (2)			295,976				287,496				279,590				261,895				259,397
Fully taxable-equivalent adjustment			905				903				909				884				857
Net interest income, fully taxable-equivalent (non-GAAP) (2)		$	296,881			$	288,399			$	280,499			$	262,779			$	260,254

(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 18 for additional information on this performance measure/ratio.

 

TABLE 6: QUARTERLY NET INTEREST MARGIN

		Net Interest Margin for three months ended,
		Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Yield earned on:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents		0.16	%		0.16	%		0.12	%		0.11	%		0.12	%
Investment securities		2.07			2.01			2.03			2.03			2.11
FHLB and FRB stock		5.20			5.18			5.20			5.21			5.21
Liquidity management assets		1.09			1.13			1.24			1.11			1.08
Other earning assets		2.71			2.64			2.59			2.50			2.79
Mortgage loans held-for-sale		3.47			3.51			3.31			3.18			2.83
Loans, net of unearned income		3.41			3.44			3.46			3.43			3.51
Total earning assets		2.83	%		2.90	%		3.00	%		2.96	%		3.02	%
Rate paid on:
NOW and interest-bearing demand deposits		0.08	%		0.08	%		0.08	%		0.10	%		0.13	%
Wealth management deposits		0.67			0.67			0.71			0.72			0.73
Money market accounts		0.09			0.09			0.12			0.12			0.16
Savings accounts		0.04			0.04			0.04			0.05			0.09
Time deposits		0.51			0.74			1.10			1.36			1.54
Interest-bearing deposits		0.24			0.29			0.38			0.45			0.51
Federal Home Loan Bank advances		1.57			1.58			1.59			1.60			1.60
Other borrowings		1.78			1.94			1.96			2.04			2.16
Subordinated notes		5.05			5.02			5.05			5.02			5.05
Junior subordinated debentures		4.23			4.23			4.25			4.27			4.23
Total interest-bearing liabilities		0.42	%		0.48	%		0.56	%		0.63	%		0.70	%
Interest rate spread  (1)(2)		2.41	%		2.42	%		2.44	%		2.33	%		2.32	%
Less:  Fully taxable-equivalent adjustment		(0.01	)		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Net free funds/contribution (3)		0.14			0.17			0.19			0.21			0.22
Net interest margin (GAAP) (2)		2.54	%		2.58	%		2.62	%		2.53	%		2.53	%
Fully taxable-equivalent adjustment		0.01			0.01			0.01			0.01			0.01
Net interest margin, fully taxable-equivalent (non-GAAP) (2)		2.55	%		2.59	%		2.63	%		2.54	%		2.54	%

(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 18 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: YEAR-TO-DATE AVERAGE BALANCES, AND NET INTEREST INCOME AND MARGIN

	Average Balance for years ended,							Interest for years ended,							Yield/Rate for years ended,
(Dollars in thousands)	Dec 31, 2021				Dec 31, 2020			Dec 31, 2021				Dec 31, 2020			Dec 31, 2021			Dec 31, 2020
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents (1)	$	4,840,048			$	3,117,075		$	6,779			$	8,655		0.14	%		0.28	%
Investment securities (2)		4,779,313				4,101,136			97,258				101,799		2.03			2.48
FHLB and FRB stock		135,873				130,360			7,067				6,891		5.20			5.29
Liquidity management assets (3)(4)	$	9,755,234			$	7,348,571		$	111,104			$	117,345		1.14	%		1.60	%
Other earning assets (3)(4)(5)		25,096				17,863			657				523		2.62			2.94
Mortgage loans held-for-sale		959,457				707,147			32,169				20,077		3.35			2.84
Loans, net of unearned income (3)(4)(6)		33,051,043				30,181,204			1,135,155				1,159,490		3.43			3.84
Total earning assets (4)	$	43,790,830			$	38,254,785		$	1,279,085			$	1,297,435		2.92	%		3.39	%
Allowance for loan and investment security losses		(284,163	)			(264,516	)
Cash and due from banks		432,836				341,116
Other assets		2,884,548				3,039,954
Total assets	$	46,824,051			$	41,371,339
NOW and interest-bearing demand deposits	$	3,711,489			$	3,298,554		$	3,178			$	7,642		0.09	%		0.23	%
Wealth management deposits		4,429,929				3,882,975			30,520				29,277		0.69			0.75
Money market accounts		10,051,444				8,874,488			10,606				46,488		0.11			0.52
Savings accounts		3,734,162				3,354,662			1,583				12,507		0.04			0.37
Time deposits		4,447,871				5,142,938			42,232				93,264		0.95			1.81
Interest-bearing deposits	$	26,374,895			$	24,553,617		$	88,119			$	189,178		0.33	%		0.77	%
Federal Home Loan Bank advances		1,236,478				1,156,106			19,581				18,193		1.58			1.57
Other borrowings		514,657				496,693			9,928				12,773		1.93			2.57
Subordinated notes		436,697				436,275			21,983				21,961		5.03			5.03
Junior subordinated debentures		253,566				253,566			10,916				11,008		4.25			4.27
Total interest-bearing liabilities	$	28,816,293			$	26,896,257		$	150,527			$	253,113		0.52	%		0.94	%
Non-interest-bearing deposits		12,638,518				9,432,090
Other liabilities		1,068,498				1,116,304
Equity		4,300,742				3,926,688
Total liabilities and shareholders’ equity	$	46,824,051			$	41,371,339
Interest rate spread (4)(7)															2.40	%		2.45	%
Less:  Fully taxable-equivalent adjustment									(3,601	)			(4,415	)	(0.01	)		(0.01	)
Net free funds/contribution (8)	$	14,974,537			$	11,358,528									0.18			0.28
Net interest income/margin (GAAP) (4)								$	1,124,957			$	1,039,907		2.57	%		2.72	%
Fully taxable-equivalent adjustment									3,601				4,415		0.01			0.01
Net interest income/margin, fully taxable-equivalent (non-GAAP) (4)								$	1,128,558			$	1,044,322		2.58	%		2.73	%

(1) Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less. 
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets. 
(3) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period. 
(4) See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information on this performance measure/ratio. 
(5) Other earning assets include brokerage customer receivables and trading account securities. 
(6) Loans, net of unearned income, include non-accrual loans. 
(7) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities. 
(8) 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 8: INTEREST RATE SENSITIVITY

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

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

Static Shock Scenario		+200 Basis Points			+100  Basis  Points			-100 Basis  Points
Dec 31, 2021		25.3	%		12.4	%		(8.5	)%
Sep 30, 2021		24.3			11.5			(7.8	)
Jun 30, 2021		24.6			11.7			(6.9	)
Mar 31, 2021		22.0			10.2			(7.2	)
Dec 31, 2020		25.0			11.6			(7.9	)

 

Ramp Scenario	+200 Basis Points			+100 Basis Points			-100 Basis Points
Dec 31, 2021	13.9	%		6.9	%		(5.6	)%
Sep 30, 2021	10.8			5.4			(3.8	)
Jun 30, 2021	11.4			5.8			(3.3	)
Mar 31, 2021	10.7			5.4			(3.6	)
Dec 31, 2020	11.4			5.7			(3.3	)

 

TABLE 9: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

	Loans repricing or maturity period
As of December 31, 2021	One year or less			From one to five years			Over five years
(In thousands)										Total
Commercial
Fixed rate	$	536,782		$	2,092,006		$	1,330,518		$	3,959,306
Fixed Rate - PPP		40,533			517,750			—			558,283
Variable rate		7,383,214			3,207			58			7,386,479
Total commercial	$	7,960,529		$	2,612,963		$	1,330,576		$	11,904,068
Commercial real estate
Fixed rate		518,488			2,376,629			525,173			3,420,290
Variable rate		5,550,141			19,855			—			5,569,996
Total commercial real estate	$	6,068,629		$	2,396,484		$	525,173		$	8,990,286
Home equity
Fixed rate		14,896			3,059			42			17,997
Variable rate		317,158			—			—			317,158
Total home equity	$	332,054		$	3,059		$	42		$	335,155
Residential real estate
Fixed rate		17,812			5,834			897,316			920,962
Variable rate		58,968			237,706			419,463			716,137
Total residential real estate	$	76,780		$	243,540		$	1,316,779		$	1,637,099
Premium finance receivables - commercial
Fixed rate		4,677,500			177,987			—			4,855,487
Variable rate		—			—			—			—
Total premium finance receivables - commercial	$	4,677,500		$	177,987		$	—		$	4,855,487
Premium finance receivables - life insurance
Fixed rate		8,579			474,465			21,727			504,771
Variable rate		6,538,039			—			—			6,538,039
Total premium finance receivables - life insurance	$	6,546,618		$	474,465		$	21,727		$	7,042,810
Consumer and other
Fixed rate		4,094			5,004			656			9,754
Variable rate		14,445			—			—			14,445
Total consumer and other	$	18,539		$	5,004		$	656		$	24,199
Total per category
Fixed rate		5,778,151			5,134,984			2,775,432			13,688,567
Fixed rate - PPP		40,533			517,750			—			558,283
Variable rate		19,861,965			260,768			419,521			20,542,254
Total loans, net of unearned income	$	25,680,649		$	5,913,502		$	3,194,953		$	34,789,104
Variable Rate Loan Pricing by Index:
Prime										$	3,273,915
One- month LIBOR											8,848,709
Three- month LIBOR											285,441
Twelve- month LIBOR											6,677,139
U.S. Treasury tenors											107,037
SOFR tenors											598,904
Thirty-Day Ameribor											89,832
Other											661,277
Total variable rate										$	20,542,254

LIBOR - London Interbank Offered Rate.
SOFR - Secured Overnight Financing Rate.
Ameribor - American Interbank Offered Rate.

Graph available at the following link: http://ml.globenewswire.com/Resource/Download/a9f90280-1a99-476a-b4f8-435648696df0

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to LIBOR indices which, as shown in the table above, do not mirror the same changes as the Prime rate which has historically moved when the Federal Reserve raises or lowers interest rates.  Specifically, the Company has $8.8 billion of variable rate loans tied to one-month LIBOR and $6.7 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
Fourth Quarter 2021		0	bps	2	bps	34	bps
Third Quarter 2021		0		-2		-1
Second Quarter 2021		0		-1		-3
First Quarter 2021		0		-3		-6
Fourth Quarter 2020		0		-1		-2

 

TABLE 10: ALLOWANCE FOR CREDIT LOSSES

		Three Months Ended																			Years Ended
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(Dollars in thousands)			2021				2021				2021				2021				2020			2021				2020
Allowance for credit losses at beginning of period		$	296,138			$	304,121			$	321,308			$	379,969			$	388,971		$	379,969			$	158,461
Cumulative effect adjustment from the adoption of ASU 2016-13			—				—				—				—				—			—				47,418
Provision for credit losses			9,299				(7,916	)			(15,299	)			(45,347	)			1,180			(59,263	)			214,220
Initial allowance for credit losses recognized on PCD assets acquired during the period (1)			470				—				—				—				—			470				—
Other adjustments			5				(65	)			34				31				155			5				179
Charge-offs:
Commercial			4,431				1,352				3,237				11,781				5,184			20,801				18,293
Commercial real estate			495				406				1,412				980				6,637			3,293				15,960
Home equity			135				59				142				—				683			336				2,061
Residential real estate			1,067				10				3				2				114			1,082				891
Premium finance receivables			2,314				1,390				2,077				3,239				4,214			9,020				15,472
Consumer and other			157				112				104				114				198			487				528
Total charge-offs			8,599				3,329				6,975				16,116				17,030			35,019				53,205
Recoveries:
Commercial			389				816				902				452				4,168			2,559				5,092
Commercial real estate			217				373				514				200				904			1,304				1,835
Home equity			461				313				328				101				77			1,203				528
Residential real estate			85				5				36				204				69			330				184
Premium finance receivables			1,240				1,728				3,239				1,782				1,445			7,989				5,108
Consumer and other			26				92				34				32				30			184				149
Total recoveries			2,418				3,327				5,053				2,771				6,693			13,569				12,896
Net charge-offs			(6,181	)			(2	)			(1,922	)			(13,345	)			(10,337	)		(21,450	)			(40,309	)
Allowance for credit losses at period end		$	299,731			$	296,138			$	304,121			$	321,308			$	379,969		$	299,731			$	379,969
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial			0.14	%			0.02	%			0.08	%			0.37	%			0.03	%		0.16	%			0.12	%
Commercial real estate			0.01				0.00				0.04				0.04				0.27			0.02				0.17
Home equity			(0.38	)			(0.28	)			(0.20	)			(0.10	)			0.55			(0.23	)			0.33
Residential real estate			0.25				0.00				(0.01	)			(0.06	)			0.02			0.05				0.06
Premium finance receivables			0.04				(0.01	)			(0.04	)			0.06				0.11			0.01				0.11
Consumer and other			0.95				0.26				0.69				0.57				0.78			0.66				0.52
Total loans, net of unearned income			0.07	%			0.00	%			0.02	%			0.17	%			0.13	%		0.06	%			0.13	%
Loans at period end		$	34,789,104			$	33,264,043			$	32,911,187			$	33,171,233			$	32,079,073
Allowance for loan losses as a percentage of loans at period end			0.71	%			0.75	%			0.79	%			0.84	%			1.00	%
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end			0.86				0.89				0.92				0.97				1.18
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end, excluding PPP loans			0.88				0.92				0.98				1.08				1.29

(1) The initial allowance for credit losses on purchased credit deteriorated (“PCD”) loans acquired during the period measured approximately $2.8 million, of which approximately $2.3 million was charged-off related to PCD loans that met the Company’s charge-off policy at the time of acquisition. After considering these loans that were immediately charged-off, the net impact of PCD allowance for credit losses at the acquisition date was approximately $470,000.

 

TABLE 11: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

		Three Months Ended																			Years Ended
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(In thousands)			2021				2021				2021				2021				2020			2021				2020
Provision for loan losses		$	4,929			$	(12,410	)		$	(14,731	)		$	(28,351	)		$	3,597		$	(50,563	)		$	188,493
Provision for unfunded lending-related commitments losses			4,375				4,501				(558	)			(17,035	)			(2,413	)		(8,717	)			25,742
Provision for held-to-maturity securities losses			(5	)			(7	)			(10	)			39				(4	)		17				(15	)
Provision for credit losses		$	9,299			$	(7,916	)		$	(15,299	)		$	(45,347	)		$	1,180		$	(59,263	)		$	214,220
Allowance for loan losses		$	247,835			$	248,612			$	261,089			$	277,709			$	319,374
Allowance for unfunded lending-related commitments losses			51,818				47,443				42,942				43,500				60,536
Allowance for loan losses and unfunded lending-related commitments losses			299,653				296,055				304,031				321,209				379,910
Allowance for held-to-maturity securities losses			78				83				90				99				59
Allowance for credit losses		$	299,731			$	296,138			$	304,121			$	321,308			$	379,969

              

TABLE 12: ALLOWANCE BY LOAN PORTFOLIO

The table below summarizes the calculation of allowance for loan losses and allowance for unfunded lending-related commitments losses for the Company’s loan portfolios as well as core and niche portfolios, as of December 31, 2021,  September 30, 2021, and June 30, 2021.

	As of Dec 31, 2021								As of Sep 30, 2021								As of Jun 30, 2021
(Dollars in thousands)	Recorded Investment			Calculated Allowance			% of its category’s balance		Recorded Investment			Calculated Allowance			% of its category’s balance		Recorded Investment			Calculated Allowance			% of its category’s balance
Commercial:
Commercial, industrial and other, excluding PPP loans	$	11,345,785		$	119,305		1.05	%	$	10,105,984		$	109,780		1.09	%	$	9,562,869		$	98,505		1.03	%
Commercial PPP loans		558,283			2		0.00			1,081,988			2		0.00			1,879,407			2		0.00
Commercial real estate:
Construction and development		1,356,204			35,206		2.60			1,343,715			34,101		2.54			1,385,249			38,550		2.78
Non-construction		7,634,082			109,377		1.43			7,541,999			105,934		1.40			7,293,120			119,972		1.65
Home equity		335,155			10,699		3.19			347,662			10,939		3.15			369,806			11,207		3.03
Residential real estate		1,637,099			8,782		0.54			1,547,736			16,272		1.05			1,530,285			15,684		1.02
Premium finance receivables
Commercial insurance loans		4,855,487			15,246		0.31			4,616,977			17,996		0.39			4,521,871			19,346		0.43
Life insurance loans		7,042,810			613		0.01			6,655,453			579		0.01			6,359,556			553		0.01
Consumer and other		24,199			423		1.75			22,529			452		2.01			9,024			212		2.35
Total loans, net of unearned income	$	34,789,104		$	299,653		0.86	%	$	33,264,043		$	296,055		0.89	%	$	32,911,187		$	304,031		0.92	%
Total loans, net of unearned income, excluding PPP loans	$	34,230,821		$	299,651		0.88	%	$	32,182,055		$	296,053		0.92	%	$	31,031,780		$	304,029		0.98	%
Total core loans (1)	$	19,599,090		$	260,511		1.33	%	$	18,690,730		$	257,788		1.38	%	$	17,989,306		$	267,999		1.49	%
Total niche loans (1)		14,631,731			39,140		0.27			13,491,325			38,265		0.28			13,042,474			36,030		0.28
Total PPP loans		558,283			2		0.00			1,081,988			2		0.00			1,879,407			2		0.00

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

 

TABLE 13: LOAN PORTFOLIO AGING

(Dollars in thousands)		Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Loan Balances:
Commercial
Nonaccrual		$	20,399		$	26,468		$	23,232		$	22,459		$	21,743
90+ days and still accruing			15			—			1,244			—			307
60-89 days past due			24,262			9,768			5,204			13,292			6,900
30-59 days past due			43,861			25,224			18,478			35,541			44,381
Current			11,815,531			11,126,512			11,394,118			12,636,915			11,882,636
Total commercial		$	11,904,068		$	11,187,972		$	11,442,276		$	12,708,207		$	11,955,967
Commercial real estate
Nonaccrual		$	21,746		$	23,706		$	26,035		$	34,380		$	46,107
90+ days and still accruing			—			—			—			—			—
60-89 days past due			284			5,395			4,382			8,156			5,178
30-59 days past due			40,443			79,818			19,698			70,168			32,116
Current			8,927,813			8,776,795			8,628,254			8,432,075			8,410,731
Total commercial real estate		$	8,990,286		$	8,885,714		$	8,678,369		$	8,544,779		$	8,494,132
Home equity
Nonaccrual		$	2,574		$	3,449		$	3,478		$	5,536		$	6,529
90+ days and still accruing			—			164			—			—			—
60-89 days past due			—			340			301			492			47
30-59 days past due			1,120			867			777			780			637
Current			331,461			342,842			365,250			383,445			418,050
Total home equity		$	335,155		$	347,662		$	369,806		$	390,253		$	425,263
Residential real estate
Nonaccrual		$	16,440		$	22,633		$	23,050		$	21,553		$	26,071
90+ days and still accruing			—			—			—			—			—
60-89 days past due			982			1,540			1,584			944			1,635
30-59 days past due			12,420			1,076			2,139			13,768			12,584
Current			1,607,257			1,522,487			1,503,512			1,385,708			1,219,308
Total residential real estate		$	1,637,099		$	1,547,736		$	1,530,285		$	1,421,973		$	1,259,598
Premium finance receivables
Nonaccrual		$	5,433		$	7,300		$	6,418		$	9,690		$	13,264
90+ days and still accruing			7,217			5,811			3,570			4,783			12,792
60-89 days past due			28,104			15,804			7,759			5,113			27,801
30-59 days past due			89,070			21,654			32,758			31,373			49,274
Current			11,768,473			11,221,861			10,830,922			10,019,079			9,808,794
Total premium finance receivables		$	11,898,297		$	11,272,430		$	10,881,427		$	10,070,038		$	9,911,925
Consumer and other
Nonaccrual		$	477		$	384		$	485		$	497		$	436
90+ days and still accruing			137			126			178			161			264
60-89 days past due			34			16			22			8			24
30-59 days past due			509			125			75			74			136
Current			23,042			21,878			8,264			35,243			31,328
Total consumer and other		$	24,199		$	22,529		$	9,024		$	35,983		$	32,188
Total loans, net of unearned income
Nonaccrual		$	67,069		$	83,940		$	82,698		$	94,115		$	114,150
90+ days and still accruing			7,369			6,101			4,992			4,944			13,363
60-89 days past due			53,666			32,863			19,252			28,005			41,585
30-59 days past due			187,423			128,764			73,925			151,704			139,128
Current			34,473,577			33,012,375			32,730,320			32,892,465			31,770,847
Total loans, net of unearned income		$	34,789,104		$	33,264,043		$	32,911,187		$	33,171,233		$	32,079,073

 

TABLE 14: NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS ("TDRs")

	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(Dollars in thousands)		2021				2021				2021				2021				2020
Loans past due greater than 90 days and still accruing (1):
Commercial	$	15			$	—			$	1,244			$	—			$	307
Commercial real estate		—				—				—				—				—
Home equity		—				164				—				—				—
Residential real estate		—				—				—				—				—
Premium finance receivables		7,217				5,811				3,570				4,783				12,792
Consumer and other		137				126				178				161				264
Total loans past due greater than 90 days and still accruing		7,369				6,101				4,992				4,944				13,363
Non-accrual loans:
Commercial		20,399				26,468				23,232				22,459				21,743
Commercial real estate		21,746				23,706				26,035				34,380				46,107
Home equity		2,574				3,449				3,478				5,536				6,529
Residential real estate		16,440				22,633				23,050				21,553				26,071
Premium finance receivables		5,433				7,300				6,418				9,690				13,264
Consumer and other		477				384				485				497				436
Total non-accrual loans		67,069				83,940				82,698				94,115				114,150
Total non-performing loans:
Commercial		20,414				26,468				24,476				22,459				22,050
Commercial real estate		21,746				23,706				26,035				34,380				46,107
Home equity		2,574				3,613				3,478				5,536				6,529
Residential real estate		16,440				22,633				23,050				21,553				26,071
Premium finance receivables		12,650				13,111				9,988				14,473				26,056
Consumer and other		614				510				663				658				700
Total non-performing loans	$	74,438			$	90,041			$	87,690			$	99,059			$	127,513
Other real estate owned		1,959				9,934				10,510				8,679				9,711
Other real estate owned - from acquisitions		2,312				3,911				5,062				7,134				6,847
Other repossessed assets		—				—				—				—				—
Total non-performing assets	$	78,709			$	103,886			$	103,262			$	114,872			$	144,071
Accruing TDRs not included within non-performing assets	$	37,486			$	38,468			$	44,019			$	46,151			$	47,023
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial		0.17	%			0.24	%			0.21	%			0.18	%			0.18	%
Commercial real estate		0.24				0.27				0.30				0.40				0.54
Home equity		0.77				1.04				0.94				1.42				1.54
Residential real estate		1.00				1.46				1.51				1.52				2.07
Premium finance receivables		0.11				0.12				0.09				0.14				0.26
Consumer and other		2.54				2.26				7.35				1.83				2.17
Total loans, net of unearned income		0.21	%			0.27	%			0.27	%			0.30	%			0.40	%
Total non-performing assets as a percentage of total assets		0.16	%			0.22	%			0.22	%			0.25	%			0.32	%
Allowance for loan losses and unfunded lending-related commitments losses as a percentage of non-accrual loans		446.78	%			352.70	%			367.64	%			341.29	%			332.82	%

(1)     As of December 31, 2021, September 30, 2021, and June 30, 2021,  approximately $320,000, $445,000 and $320,000, respectively, of TDRs were past due greater than 90 days and still accruing interest. No TDRs as of March 31, 2021, and December 31, 2020 were past due greater than 90 days and still accruing interest.

 

Non-performing Loans Rollforward

	Three Months Ended																			Years Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(In thousands)		2021				2021				2021				2021				2020			2021				2020
Balance at beginning of period	$	90,041			$	87,690			$	99,059			$	127,513			$	173,103		$	127,513			$	117,588
Additions from becoming non-performing in the respective period		6,851				9,341				12,762				9,894				13,224			38,848				85,993
Additions from the adoption of ASU 2016-13		—				—				—				—				—			—				37,285
Return to performing status		(6,616	)			(3,322	)			—				(654	)			(1,000	)		(10,592	)			(10,254	)
Payments received		(13,212	)			(5,568	)			(12,312	)			(22,731	)			(30,146	)		(53,823	)			(53,029	)
Transfer to OREO and other repossessed assets		(275	)			(720	)			(3,660	)			(1,372	)			(12,662	)		(6,027	)			(14,557	)
Charge-offs, net		(5,167	)			(548	)			(4,684	)			(2,952	)			(7,817	)		(13,351	)			(29,835	)
Net change for niche loans (1)		2,816				3,168				(3,475	)			(10,639	)			(7,189	)		(8,130	)			(5,678	)
Balance at end of period	$	74,438			$	90,041			$	87,690			$	99,059			$	127,513		$	74,438			$	127,513

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

 

TDRs

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(In thousands)		2021			2021			2021			2021			2020
Accruing TDRs:
Commercial	$	4,131		$	4,532		$	6,911		$	7,536		$	7,699
Commercial real estate		8,421			8,385			9,659			9,478			10,549
Residential real estate and other		24,934			25,551			27,449			29,137			28,775
Total accrual	$	37,486		$	38,468		$	44,019		$	46,151		$	47,023
Non-accrual TDRs: (1)
Commercial	$	6,746		$	3,079		$	4,104		$	5,583		$	10,491
Commercial real estate		2,050			3,239			3,434			1,309			6,177
Residential real estate and other		3,027			3,685			4,190			3,540			4,501
Total non-accrual	$	11,823		$	10,003		$	11,728		$	10,432		$	21,169
Total TDRs:
Commercial	$	10,877		$	7,611		$	11,015		$	13,119		$	18,190
Commercial real estate		10,471			11,624			13,093			10,787			16,726
Residential real estate and other		27,961			29,236			31,639			32,677			33,276
Total TDRs	$	49,309		$	48,471		$	55,747		$	56,583		$	68,192

(1) Included in total non-performing loans.

 

Other Real Estate Owned

	Three Months Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)		2021				2021				2021				2021				2020
Balance at beginning of period	$	13,845			$	15,572			$	15,813			$	16,558			$	9,217
Disposals/resolved		(9,664	)			(1,949	)			(3,152	)			(2,162	)			(3,839	)
Transfers in at fair value, less costs to sell		275				315				3,660				1,587				11,508
Fair value adjustments		(185	)			(93	)			(749	)			(170	)			(328	)
Balance at end of period	$	4,271			$	13,845			$	15,572			$	15,813			$	16,558
	Period End
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
Balance by Property Type:		2021				2021				2021				2021				2020
Residential real estate	$	1,310			$	1,592			$	1,952			$	2,713			$	2,324
Residential real estate development		—				934				1,030				1,287				1,691
Commercial real estate		2,961				11,319				12,590				11,813				12,543
Total	$	4,271			$	13,845			$	15,572			$	15,813			$	16,558

 

TABLE 15: NON-INTEREST INCOME

	Three Months Ended																				Q4 2021 compared to Q3 2021							Q4 2021 compared to Q4 2020
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(Dollars in thousands)		2021				2021				2021				2021				2020			$ Change				% Change			$ Change				% Change
Brokerage	$	5,292			$	5,230			$	5,148			$	5,040			$	4,740			$	62			1	%		$	552			12	%
Trust and asset management		27,197				26,301				25,542				24,269				22,062				896			3				5,135			23
Total wealth management		32,489				31,531				30,690				29,309				26,802				958			3				5,687			21
Mortgage banking		53,138				55,794				50,584				113,494				86,819				(2,656	)		(5	)			(33,681	)		(39	)
Service charges on deposit accounts		14,734				14,149				13,249				12,036				11,841				585			4				2,893			24
(Losses) gains on investment securities, net		(1,067	)			(2,431	)			1,285				1,154				1,214				1,364			56				(2,281	)		NM
Fees from covered call options		1,128				1,157				1,388				—				—				(29	)		(3	)			1,128			NM
Trading  gains (losses), net		206				58				(438	)			419				(102	)			148			NM				308			NM
Operating lease income, net		14,204				12,807				12,240				14,440				12,118				1,397			11				2,086			17
Other:
Interest rate swap fees		3,526				4,868				2,820				2,488				4,930				(1,342	)		(28	)			(1,404	)		(28	)
BOLI		1,192				2,154				1,342				1,124				2,846				(962	)		(45	)			(1,654	)		(58	)
Administrative services		1,846				1,359				1,228				1,256				1,263				487			36				583			46
Foreign currency remeasurement gains (losses)		111				77				(782	)			99				(208	)			34			44				319			NM
Early pay-offs of capital leases		249				209				195				(52	)			118				40			19				131			NM
Miscellaneous		12,011				14,742				15,572				10,739				10,720				(2,731	)		(19	)			1,291			12
Total Other		18,935				23,409				20,375				15,654				19,669				(4,474	)		(19	)			(734	)		(4	)
Total Non-Interest Income	$	133,767			$	136,474			$	129,373			$	186,506			$	158,361			$	(2,707	)		(2	)%		$	(24,594	)		(16	)%

NM - Not meaningful.

 

	Years Ended
	Dec 31,				Dec 31,				$				%
(Dollars in thousands)		2021				2020			Change				Change
Brokerage	$	20,710			$	18,731			$	1,979			11	%
Trust and asset management		103,309				81,605				21,704			27
Total wealth management		124,019				100,336				23,683			24
Mortgage banking		273,010				346,013				(73,003	)		(21	)
Service charges on deposit accounts		54,168				45,023				9,145			20
Losses on investment securities, net		(1,059	)			(1,926	)			867			45
Fees from covered call options		3,673				2,292				1,381			60
Trading gains (losses), net		245				(1,004	)			1,249			NM
Operating lease income, net		53,691				47,604				6,087			13
Other:
Interest rate swap fees		13,702				20,718				(7,016	)		(34	)
BOLI		5,812				4,730				1,082			23
Administrative services		5,689				4,385				1,304			30
Foreign currency remeasurement loss		(495	)			(621	)			126			20
Early pay-offs of leases		601				632				(31	)		(5	)
Miscellaneous		53,064				36,007				17,057			47
Total Other		78,373				65,851				12,522			19
Total Non-Interest Income	$	586,120			$	604,189			$	(18,069	)		(3	)%

NM - Not meaningful.

 

TABLE 16: MORTGAGE BANKING

	Three Months Ended																			Years Ended
(Dollars in thousands)	Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020			Dec 31, 2021				Dec 31, 2020
Originations:
Retail originations	$	980,627			$	1,153,265			$	1,328,721			$	1,641,664			$	1,757,093		$	5,104,277			$	5,709,868
Veterans First originations		318,244				405,663				395,290				580,303				594,151			1,699,500				2,294,862
Total originations for sale (A)	$	1,298,871			$	1,558,928			$	1,724,011			$	2,221,967			$	2,351,244		$	6,803,777			$	8,004,730
Originations for investment		177,676				181,886				249,749				321,858				192,107			931,169				396,499
Total originations	$	1,476,547			$	1,740,814			$	1,973,760			$	2,543,825			$	2,543,351		$	7,734,946			$	8,401,229
Retail originations as  percentage of originations for sale		75	%			74	%			77	%			74	%			75	%		75	%			71	%
Veterans First originations as a percentage of originations for sale		25				26				23				26				25			25				29
Purchases as a percentage of originations for sale		52	%			56	%			53	%			27	%			35	%		45	%			35	%
Refinances as a percentage of originations for sale		48				44				47				73				65			55				65
Production Margin:
Production revenue (B) (1)	$	28,182			$	39,247			$	37,531			$	71,282			$	70,886		$	176,242			$	307,794
Total originations for sale (A)	$	1,298,871			$	1,558,928			$	1,724,011			$	2,221,967			$	2,351,244		$	6,803,777			$	8,004,730
Add:  Current period end mandatory interest rate lock commitments to fund originations for sale (2)		353,509				510,982				605,400				798,534				1,072,717			353,509				1,072,717
Less:  Prior period end  mandatory interest rate lock commitments to fund originations for sale (2)		510,982				605,400				798,534				1,072,717				1,544,234			1,072,717				372,357
Total mortgage production volume (C)	$	1,141,398			$	1,464,510			$	1,530,877			$	1,947,784			$	1,879,727		$	6,084,569			$	8,705,090
Production margin (B / C)		2.47	%			2.68	%			2.45	%			3.66	%			3.77	%		2.90	%			3.54	%
Mortgage Servicing:
Loans serviced for others (D)	$	13,126,254			$	12,720,126			$	12,307,337			$	11,530,676			$	10,833,135
MSRs, at fair value (E)		147,571				133,552				127,604				124,316				92,081
Percentage of MSRs to loans serviced for others (E / D)		1.12	%			1.05	%			1.04	%			1.08	%			0.85	%
Servicing income	$	10,766			$	10,454			$	9,830			$	9,636			$	9,829		$	40,686			$	31,886
Components of MSR:
MSR - current period capitalization	$	15,080			$	15,546			$	17,512			$	24,616			$	20,343		$	72,754			$	71,077
MSR - collection of expected cash flows - paydowns		(1,101	)			(1,036	)			(991	)			(728	)			(688	)		(3,856	)			(2,244	)
MSR - collection of expected cash flows - payoffs		(6,385	)			(7,558	)			(7,549	)			(9,440	)			(8,335	)		(30,932	)			(30,335	)
Valuation:
MSR - changes in fair value model assumptions		6,656				(888	)			(5,540	)			18,045				(5,223	)		18,273				(30,764	)
Gain on derivative contract held as an economic hedge, net		—				—				—				—				—			—				4,749
MSR valuation adjustment, net of gain on derivative contract held as an economic hedge	$	6,656			$	(888	)		$	(5,540	)		$	18,045			$	(5,223	)	$	18,273			$	(26,015	)
Summary of Mortgage Banking Revenue:
Production revenue (1)	$	28,182			$	39,247			$	37,531			$	71,282			$	70,886		$	176,242			$	307,794
Servicing income		10,766				10,454				9,830				9,636				9,829			40,686				31,886
MSR activity		14,250				6,064				3,432				32,493				6,097			56,239				12,483
Other		(60	)			29				(209	)			83				7			(157	)			(6,150	)
Total mortgage banking revenue	$	53,138			$	55,794			$	50,584			$	113,494			$	86,819		$	273,010			$	346,013

(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 other related financial instruments carried at fair value, 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. 
(2) Certain volume adjusted for the estimated pull-through rate of the lo an, which represents the Company’s best estimate of the likelihood that a committed loan will ultimately fund.

 

TABLE 17: NON-INTEREST EXPENSE

	Three Months Ended																			Q4 2021 compared to Q3 2021							Q4 2021 compared to Q4 2020
	Dec 31,				Sep 30,				Jun 30,			Mar 31,				Dec 31,
(Dollars in thousands)		2021				2021				2021			2021				2020			$ Change				% Change			$ Change				% Change
Salaries and employee benefits:
Salaries	$	91,612			$	88,161			$	91,089		$	91,053			$	93,535			$	3,451			4	%		$	(1,923	)		(2	)%
Commissions and incentive compensation		49,923				57,026				53,751			61,367				52,383				(7,103	)		(12	)			(2,460	)		(5	)
Benefits		25,596				25,725				27,977			28,389				25,198				(129	)		(1	)			398			2
Total salaries and employee benefits		167,131				170,912				172,817			180,809				171,116				(3,781	)		(2	)			(3,985	)		(2	)
Software and equipment		23,708				22,029				20,866			20,912				20,565				1,679			8				3,143			15
Operating lease equipment depreciation		10,147				10,013				9,949			10,771				9,938				134			1				209			2
Occupancy, net		18,343				18,158				17,687			19,996				19,687				185			1				(1,344	)		(7	)
Data processing		7,207				7,104				6,920			6,048				5,728				103			1				1,479			26
Advertising and marketing		13,981				13,443				11,305			8,546				9,850				538			4				4,131			42
Professional fees		7,551				7,052				7,304			7,587				6,530				499			7				1,021			16
Amortization of other acquisition-related intangible assets		1,811				1,877				2,039			2,007				2,634				(66	)		(4	)			(823	)		(31	)
FDIC insurance		7,317				6,750				6,405			6,558				7,016				567			8				301			4
OREO expense, net		(641	)			(1,531	)			769			(251	)			(114	)			890			(58	)			(527	)		NM
Other:
Commissions - 3rd party brokers		861				884				889			846				764				(23	)		(3	)			97			13
Postage		1,684				2,018				1,900			1,743				1,849				(334	)		(17	)			(165	)		(9	)
Miscellaneous		24,299				23,435				21,262			21,317				26,304				864			4				(2,005	)		(8	)
Total other		26,844				26,337				24,051			23,906				28,917				507			2				(2,073	)		(7	)
Total Non-Interest Expense	$	283,399			$	282,144			$	280,112		$	286,889			$	281,867			$	1,255			0	%		$	1,532			1	%

NM - Not meaningful.

 

		Years Ended
		Dec 31,				Dec 31,			$				%
(Dollars in thousands)			2021				2020		Change				Change
Salaries and employee benefits:
Salaries		$	361,915			$	351,775		$	10,140			3	%
Commissions and incentive compensation			222,067				178,584			43,483			24
Benefits			107,687				95,717			11,970			13
Total salaries and employee benefits			691,669				626,076			65,593			10
Software and equipment			87,515				68,496			19,019			28
Operating lease equipment depreciation			40,880				37,915			2,965			8
Occupancy, net			74,184				69,957			4,227			6
Data processing			27,279				30,196			(2,917	)		(10	)
Advertising and marketing			47,275				36,296			10,979			30
Professional fees			29,494				27,426			2,068			8
Amortization of other acquisition-related intangible assets			7,734				11,018			(3,284	)		(30	)
FDIC insurance			27,030				25,004			2,026			8
OREO expense, net			(1,654	)			(921	)		(733	)		(80	)
Other:
Commissions - 3rd party brokers			3,480				3,114			366			12
Postage			7,345				6,918			427			6
Miscellaneous			90,313				98,600			(8,287	)		(8	)
Total other			101,138				108,632			(7,494	)		(7	)
Total Non-Interest Expense		$	1,132,544			$	1,040,095		$	92,449			9	%

NM - Not meaningful.

 

TABLE 18: SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES/RATIOS

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

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

	Three Months Ended																			Years Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(Dollars and shares in thousands)		2021				2021				2021				2021				2020			2021				2020
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:
(A) Interest Income (GAAP)	$	327,979			$	322,457			$	319,579			$	305,469			$	307,981		$	1,275,484			$	1,293,020
Taxable-equivalent adjustment:
- Loans		417				411				415				384				324			1,627				2,241
- Liquidity Management Assets		486				492				494				500				530			1,972				2,165
- Other Earning Assets		2				—				—				—				3			2				9
(B) Interest Income (non-GAAP)	$	328,884			$	323,360			$	320,488			$	306,353			$	308,838		$	1,279,085			$	1,297,435
(C) Interest Expense (GAAP)		32,003				34,961				39,989				43,574				48,584			150,527				253,113
(D) Net Interest Income (GAAP) (A minus C)	$	295,976			$	287,496			$	279,590			$	261,895			$	259,397		$	1,124,957			$	1,039,907
(E) Net Interest Income (non-GAAP) (B minus C)	$	296,881			$	288,399			$	280,499			$	262,779			$	260,254		$	1,128,558			$	1,044,322
Net interest margin (GAAP)		2.54	%			2.58	%			2.62	%			2.53	%			2.53	%		2.57	%			2.72	%
Net interest margin, fully taxable-equivalent (non-GAAP)		2.55				2.59				2.63				2.54				2.54			2.58				2.73
(F) Non-interest income	$	133,767			$	136,474			$	129,373			$	186,506			$	158,361		$	586,120			$	604,189
(G) (Losses) gains on investment securities, net		(1,067	)			(2,431	)			1,285				1,154				1,214			(1,059	)			(1,926	)
(H) Non-interest expense		283,399				282,144				280,112				286,889				281,867			1,132,544				1,040,095
Efficiency ratio (H/(D+F-G))		65.78	%			66.17	%			68.71	%			64.15	%			67.67	%		66.15	%			63.19	%
Efficiency ratio (non-GAAP) (H/(E+F-G))		65.64				66.03				68.56				64.02				67.53			66.01				63.02
Reconciliation of Non-GAAP Tangible Common Equity Ratio:
Total shareholders’ equity (GAAP)	$	4,498,688			$	4,410,317			$	4,339,011			$	4,252,511			$	4,115,995
Less: Non-convertible preferred stock (GAAP)		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)
Less: Intangible assets (GAAP)		(683,456	)			(675,910	)			(678,333	)			(680,052	)			(681,747	)
(I) Total tangible common shareholders’ equity (non-GAAP)	$	3,402,732			$	3,321,907			$	3,248,178			$	3,159,959			$	3,021,748
(J) Total assets (GAAP)	$	50,142,143			$	47,832,271			$	46,738,450			$	45,682,202			$	45,080,768
Less: Intangible assets (GAAP)		(683,456	)			(675,910	)			(678,333	)			(680,052	)			(681,747	)
(K) Total tangible assets (non-GAAP)	$	49,458,687			$	47,156,361			$	46,060,117			$	45,002,150			$	44,399,021
Common equity to assets ratio (GAAP) (L/J)		8.1	%			8.4	%			8.4	%			8.4	%			8.2	%
Tangible common equity ratio (non-GAAP) (I/K)		6.9				7.0				7.1				7.0				6.8

 

	Three Months Ended																			Years Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(Dollars and shares in thousands)		2021				2021				2021				2021				2020			2021				2020
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity	$	4,498,688			$	4,410,317			$	4,339,011			$	4,252,511			$	4,115,995
Less: Preferred stock		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)
(L) Total common equity	$	4,086,188			$	3,997,817			$	3,926,511			$	3,840,011			$	3,703,495
(M) Actual common shares outstanding		57,054				56,956				57,067				57,023				56,770
Book value per common share (L/M)	$	71.62			$	70.19			$	68.81			$	67.34			$	65.24
Tangible book value per common share (non-GAAP) (I/M)		59.64				58.32				56.92				55.42				53.23
Reconciliation of Non-GAAP Return on Average Tangible Common Equity:
(N) Net income applicable to common shares	$	91,766			$	102,146			$	98,118			$	146,157			$	94,213		$	438,187			$	271,613
Add: Intangible asset amortization		1,811				1,877				2,039				2,007				2,634			7,734				11,018
Less: Tax effect of intangible asset amortization		(505	)			(509	)			(553	)			(522	)			(656	)		(2,080	)			(2,732	)
After-tax intangible asset amortization	$	1,306			$	1,368			$	1,486			$	1,485			$	1,978		$	5,654			$	8,286
(O) Tangible net income applicable to common shares (non-GAAP)	$	93,072			$	103,514			$	99,604			$	147,642			$	96,191		$	443,841			$	279,899
Total average shareholders’ equity	$	4,433,953			$	4,343,915			$	4,256,778			$	4,164,890			$	4,050,286		$	4,300,742			$	3,926,688
Less: Average preferred stock		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)		(412,500	)			(306,455	)
(P) Total average common shareholders’ equity	$	4,021,453			$	3,931,415			$	3,844,278			$	3,752,390			$	3,637,786		$	3,888,242			$	3,620,233
Less: Average intangible assets		(677,470	)			(677,201	)			(679,535	)			(680,805	)			(682,290	)		(678,739	)			(686,064	)
(Q) Total average tangible common shareholders’ equity (non-GAAP)	$	3,343,983			$	3,254,214			$	3,164,743			$	3,071,585			$	2,955,496		$	3,209,503			$	2,934,169
Return on average common equity, annualized  (N/P)		9.05	%			10.31	%			10.24	%			15.80	%			10.30	%		11.27	%			7.50	%
Return on average tangible common equity, annualized (non-GAAP) (O/Q)		11.04				12.62				12.62				19.49				12.95			13.83				9.54
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:
Income before taxes	$	137,045			$	149,742			$	144,150			$	206,859			$	134,711		$	637,796			$	389,781
Add:  Provision for credit losses		9,299				(7,916	)			(15,299	)			(45,347	)			1,180			(59,263	)			214,220
Pre-tax income, excluding provision for credit losses (non-GAAP)	$	146,344			$	141,826			$	128,851			$	161,512			$	135,891		$	578,533			$	604,001

 

	Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,
		2019				2018				2017				2016				2015				2014				2013				2012				2011
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity	$	3,691,250			$	3,267,570			$	2,976,939			$	2,695,617			$	2,352,274			$	2,069,822			$	1,900,589			$	1,804,705			$	1,543,533
Less: Non-convertible preferred stock (GAAP)		(125,000	)			(125,000	)			(125,000	)			(251,257	)			(251,287	)			(126,467	)			(126,477	)			(176,406	)			(49,768	)
(R) Less:  Intangible assets (GAAP)		(692,277	)			(622,565	)			(519,505	)			(520,438	)			(495,970	)			(424,445	)			(393,760	)			(366,348	)			(327,538	)
(I) Total tangible common shareholders’ equity (non-GAAP)	$	2,873,973			$	2,520,005			$	2,332,434			$	1,923,922			$	1,605,017			$	1,518,910			$	1,380,352			$	1,261,951			$	1,166,227
Actual common shares outstanding		57,822				56,408				55,965				51,881				48,383				46,805				46,117				36,858				35,978
Add:  TEU conversion shares		—				—				—				—				—				—				—				6,241				7,666
(M) Common shares used for book value calculation		57,822				56,408				55,965				51,881				48,383				46,805				46,117				43,099				43,644
Book value per common share ((I-R)/M)	$	61.68			$	55.71			$	50.96			$	47.12			$	43.42			$	41.52			$	38.47			$	37.78			$	34.23
Tangible book value per common share (non-GAAP) (I/M)		49.70				44.67				41.68				37.08				33.17				32.45				29.93				29.28				26.72

 

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, Northfield, Norridge, Oak Lawn, Oak Park, Orland Park, Palatine, Park Ridge, Prospect Heights, 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  Burlington, Clinton, Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva, Madison, Menomonee Falls, Milwaukee, Pewaukee, Racine, Wales, Walworth, Whitefish Bay 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, such as the impacts of the COVID-19 pandemic (including the emergence of variant strains), 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, including the emergence of variant strains, 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;
• the interest rate environment, including a prolonged period of low interest rates or rising 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 (including ransomware);
• 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 Coronavirus Aid, Relief, and Economic Security 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, persistent inflation 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;
• fluctuations in the stock market, which may have an adverse impact on the Company’s wealth management business and brokerage operation; and
• widespread outages of operational, communication, or other systems, whether internal or provided by third parties, natural or other disasters (including acts of terrorism and pandemics), and the effects of climate change could have an adverse effect on the Company’s financial condition and results of operations, lead to material disruption of the Company’s operations or the ability or willingness of clients to access the Company’s products and services.

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

CONFERENCE CALL, WEBCAST AND REPLAY

The Company will hold a conference call on Thursday, January 20, 2022 at 11:00 a.m. (Central Time) regarding fourth quarter and full year 2021 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #2759911. 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 fourth quarter and full year 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  

FAQ

What was Wintrust Financial's net income for Q4 2021?

Wintrust Financial reported a net income of $98.8 million for Q4 2021.

How did Wintrust Financial's annual net income change in 2021?

The annual net income for Wintrust Financial increased to a record $466.2 million in 2021, up 59% from 2020.

What were the total assets of Wintrust Financial as of December 31, 2021?

As of December 31, 2021, Wintrust Financial's total assets were $50.1 billion.

What is the percentage of non-performing loans for Wintrust Financial?

Non-performing loans decreased to 0.21% of total loans as of December 31, 2021.

What is Wintrust Financial's current loans to deposits ratio?

Wintrust Financial reported a loans to deposits ratio of 82.6% at the end of Q4 2021.