LAKE FOREST, Ill., Oct. 27, 2009 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation ("Wintrust" or "the Company") (Nasdaq:WTFC) announced net income of $32.0 million or $1.07 per diluted common share for the quarter ended September 30, 2009. This compares with earnings of $6.5 million ($0.06 per diluted common share) for the second quarter of 2009 and a $2.4 million loss (($0.13) per diluted common share) for the third quarter of 2008.
Edward J. Wehmer, President and Chief Executive Officer, commented, "We are pleased to report both solid corporate earnings and strong progress on all strategic fronts during a very active quarter. The acquisition of the life insurance premium finance portfolio during the quarter resulted in both immediate and prospective financial gains. The securitization of a portion of our commercial premium finance loan portfolio, also completed this quarter, enhanced our regulatory capital position, our balance sheet liquidity and our earnings."
Mr. Wehmer noted, "The Company's net interest margin for the quarter increased to 3.25% from 2.91% in the second quarter and 2.74% in the third quarter of 2008 reflecting both positive results from deposit and asset re-pricing and solid balance sheet growth at reasonable and commensurate pricing levels. Fee and other income remained relatively strong while expenses, other than credit related expenses, were in line with expectations."
Commenting on credit, Mr. Wehmer said, "Wintrust recorded a provision for loan losses of $91 million to accommodate net charge-offs approximating $80 million during the quarter. In addition to these charge-offs, we also recorded approximately $10 million of expense related to write downs of other real estate owned. Approximately $29 million of the quarter's charge-offs relate to loans where specific reserves had been previously established. Approximately $12 million of the charge-offs related to either dispositions or new problem assets. The remaining $39 million related to continued downward revaluation of collateral values primarily related to real estate development. This revaluation, along with the $10 million other real-estate owned charge can be attributed to the Company's commitment to liquidate problem assets in a very aggressive manner and, more importantly, to recent changes in overall market conditions. As an increasing amount of troubled assets are being liquidated in the market as a whole, appraised values are dropping accordingly, reflecting the adverse impact of the additional supply. These reduced valuations are further supported by liquidation bids we are receiving on our problem asset portfolio. The charges taken reflect this along with our intention to dispose of problem assets on an expedited basis.
Quarter-end non-performing loans include approximately $17 million of administrative past due loans which have been made current by the borrower. Further, non-performing assets have been reduced by an additional $8 million after September 30, 2009 as of the date of this earnings release. We anticipate continued aggressive disposition of existing problem assets in the fourth quarter. Our allowance for loan losses increased to $95 million or 1.15% of total loans. Adding our reserve for unfunded lending-related commitments and credit discounts on purchased assets brings the Company's total credit reserves to $134 million or 1.62% of total loans."
Mr. Wehmer summarized, "We continue to focus on increasing core earnings and clearing our balance sheet of problem assets. Significant core earnings opportunities remain in the areas of deposit re-pricing, core franchise growth and liquidity redeployment. At quarter end, the Company had approximately $1 billion in overnight liquid assets and was operating at an 84% loan to deposit ratio -- just below the low end of the desired 85% to 90% range. Redeploying a portion of those liquid assets into safe, higher yielding loans is a priority."
He added, "We adopted a long-term strategy in 2006 which anticipated a negative credit cycle. Our goal was to be in a position to not just make it through the cycle but to do so in a manner which would allow us to take advantage of the opportunities which result from these occurrences -- specifically a material dislocation of assets, banks and people in the overall market. To date, we have had good success and we will continue to seek out additional opportunities on all three fronts while continuing to build a strong core franchise."
Net income for the nine months ended September 30, 2009 was $44.9 million, or $1.25 per diluted common share compared to $18.5 million or $0.75 per diluted common share for the same period in 2008. Earnings per diluted common share in the first nine months of 2009 compared to the first nine months of 2008 were reduced by preferred share dividends including discount accretion, related to our issuances of preferred stock in the second half of 2008, reducing comparative net income available to common shareholders by $14.1 million, or $0.58 per diluted common share.
Total assets of $12.1 billion at September 30, 2009 increased $776 million from June 30, 2009 and $2.3 billion from September 30, 2008. The $776 million of asset growth in the third quarter of 2009 was concentrated in liquidity management assets. Total deposits as of September 30, 2009 were $9.8 billion, an increase of $656 million from June 30, 2009 and $2.0 billion from September 30, 2008. The $656 million of deposit growth in the third quarter of 2009 was well distributed amongst all deposit types with $277 million from certificates of deposit, $314 million from NOW, savings and money markets, $16 million from wealth management and $49 million from non-interest bearing deposits. Only $17 million of the $277 million of certificate of deposit growth was due to an increase in brokered certificates of deposits. At the end of the second quarter of 2009, in anticipation of completing the securitization in the third quarter of 2009, the Company reclassified $520 million of premium finance receivables to a held-for-sale classification to comply with accounting requirements related to assets that are held with the intent to sell. At the end of the second quarter, the Company's loans held-for-sale included $301 million of residential mortgages and $520 million of premium finance receivables compared to only $193 million of residential mortgages at September 30, 2009. Total loans, including loans held for sale, grew to $8.5 billion as of September 30, 2009, an increase of $52 million, over the $8.4 billion balance as of June 30, 2009 and an increase of $1.1 billion over the September 30, 2008 balance of $7.4 billion. During the third quarter of 2009 the Company completed the acquisition of the life insurance premium finance receivables portfolio and the securitization of commercial premium finance receivables (see "Acquisitions" and "Securitization" for the impact of these transactions).The Company's loan portfolio includes a wide variety of loan types. Please see the tables included in the remainder of this release for additional disclosures regarding the components of the commercial and commercial real estate portfolio, the allowance for credit losses and loan portfolio aging statistics.
Total shareholders' equity was $1.1 billion, or a book value of $34.10 per common share, at September 30, 2009, compared to $809 million, or a book value of $32.07 per common share, at September 30, 2008.
Wintrust's key operating measures and growth rates for the third quarter of 2009 as compared to the sequential and linked quarters are shown in the table below:
% or % or
basis basis
point point
(bp) (bp)
change change
($ in Three Months Ended from from
thousands, ----------------------------------- 2nd 3rd
except per Sept. 30, June 30, Sept. 30, Quarter Quarter
share data) 2009 2009 2008 2009(4) 2008
------------- ----------- ----------- ---------- -------- --------
Net income $ 31,995 $ 6,549 $ (2,448) 389% 1,407%
Net income per
common share -
diluted $ 1.07 $ 0.06 $ (0.13) 1,683% 923%
Net revenue(1) $ 238,343 $ 117,949 $ 82,810 102% 188%
Net interest
income $ 87,663 $ 72,497 $ 60,680 21% 44%
Net interest
margin(2) 3.25% 2.91% 2.74% 34 bp 51 bp
Net overhead
ratio(3) (1.95)% 1.41% 1.65% (336)bp (360)bp
Return on
average assets 1.08% 0.24% (0.10)% 84 bp 118 bp
Return on
average common
equity 13.79% 0.79% (1.59)% 1,300 bp 1,538 bp
At end of
period
---------
Total assets $12,136,021 $11,359,536 $9,864,920 27% 23%
Total loans $ 8,275,257 $ 7,595,476 $7,322,545 36% 13%
Total loans,
including
loans
held-for-sale $ 8,468,512 $ 8,416,576 $7,390,943 15% 2%
Total deposits $ 9,847,163 $ 9,191,332 $7,829,527 28% 26%
Total equity $ 1,106,082 $ 1,065,076 $ 809,331 15% 37%
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(1) Net revenue is net interest income plus non-interest income.
(2) See "Supplemental Financial Measures/Ratios" for additional
information on this performance measure/ratio.
(3) The net overhead ratio is calculated by netting total non-interest
expense and total non-interest income, annualizing this amount,
and dividing by that period's total average assets. A lower ratio
indicates a higher degree of efficiency.
(4) Period-end balance sheet percentage changes are annualized.
----------------------------------------------------------------------
Certain returns, yields, performance ratios, or quarterly growth rates are "annualized" in this presentation to represent an annual time period. This is done for analytical purposes to better discern for decision-making purposes underlying performance trends when compared to full-year or year-over-year amounts. For example, balance sheet growth rates are most often expressed in terms of an annual rate like 20%. As such, 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 web site at www.wintrust.com by choosing "Financial Reports" and then choosing "Supplemental Financial Info."
Impacting Comparative Financial Results: Acquisitions, Securitization and Stock Offerings/Regulatory Capital
Acquisitions
On July 28, 2009 the Company announced that its indirect, wholly-owned subsidiary, First Insurance Funding Corp. ("FIFC") completed the purchase of a majority of the U.S. life insurance premium finance assets of A.I. Credit Corp. and A.I. Credit Consumer Discount Company ("the seller"), subsidiaries of American International Group, Inc. In doing so, FIFC acquired one of the largest life insurance premium finance portfolios in the industry, as well as certain other assets related to the life insurance premium finance business and the assumption of certain related liabilities. Subsequent to post-closing adjustments, an aggregate unpaid principal balance of $949.3 million was purchased for $685.3 million in cash. At closing, a portion of the portfolio, with an aggregate unpaid principal balance of approximately $317 million, and a corresponding portion of the purchase price of approximately $230 million were placed in escrow, pending the receipt of required third party consents. To the extent any of the required consents are not obtained prior to October 28, 2010, the portion of the portfolio for which such required consents are not obtained will be reassumed by the seller, and the corresponding portion of the purchase price will be returned to FIFC. Also, as a part of this purchase, an aggregate of $84.4 million of additional life insurance premium finance assets were available for future purchase by FIFC subject to satisfying certain conditions. As discussed below, on October 2, 2009, upon the satisfaction of these conditions, the Company completed the purchase of the majority of these additional loans.
The purchase was accounted for as a business combination as required by FASB Statement of Financial Accounting Standards No. 141 (revised 2007) which is now part of Accounting Standards Codification (ASC)805 Business Combinations ("ASC 805"), which became effective for the Company beginning on January 1, 2009. ASC 805 establishes principles and requirements for the acquirer in a business combination, including the recognition and measurement of the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity as of the acquisition date; the recognition and measurement of the goodwill acquired in the business combination or gain from a bargain purchase as of the acquisition date; and the determination of additional disclosures needed to enable users of the financial statements to evaluate the nature and financial effects of the business combination. Under ASC 805, nearly all acquired assets and liabilities assumed are required to be recorded at fair value at the acquisition date, including loans. ASC 805 eliminated recognition at the acquisition date of an allowance for loan losses on acquired loans; rather, credit-related factors are now incorporated directly into the fair value of the loans. Other significant changes include recognizing transaction costs and most restructuring costs as expenses when incurred. The accounting requirements of ASC 805 are applied on a prospective basis for all transactions completed after the effective date and early adoption was not permitted. Under ASC 805 a bargain purchase gain is recorded equal to the amount by which the fair value of net assets acquired exceeds the consideration paid. The Company recognized a $113.1 million gain in the third quarter of 2009 relating to all of the loans it acquired which have all contingencies removed as of September 30, 2009. This gain is shown as a component of non-interest income on our statement of income. The difference between the fair value of the loans acquired and the outstanding principal balance of these loans represents a discount of $113.3 million and is comprised of two components, an accretable component totaling $74.8 million and a non-accretable component totaling $38.5 million. The accretable component will be recognized into interest income using the effective yield method over its estimated remaining life. The non-accretable portion will be evaluated each quarter and if the loans' credit related conditions improve, a relative portion will be transferred to the accretable component and accreted over future periods. In the event of a prepayment, accretion of both the accretable and non-accretable component is accelerated into the quarter in which a specific loan prepays in whole. Currently, we have not established an allowance for loan losses relating to the portfolio purchased in this transaction. If credit related conditions deteriorate, an allowance related to these loans will be established as part of our provision for loan losses. The impact related to this transaction is included in Wintrust's consolidated financial results only since the effective date of acquisition.
On October 2, 2009, the conditions were satisfied in relation to the majority of the additional life insurance premium finance assets which were available for purchase and FIFC purchased $83.4 million of the$84.4 million of life insurance premium finance assets available for an aggregate purchase price of $60.5 million. The Company anticipates recording an additional $14.5 million bargain purchase gain relating to this additional purchase, all of which will be immediately recognizable in the fourth quarter. The difference between the fair value of these loans acquired on October 2, 2009 and the outstanding principal balance of theses loans represents a discount of $8.4 million and is comprised of two components, an accretable component totaling $5.7 million and a non-accretable component totaling $2.7 million. These discount components will be accounted in a similar fashion as the discounts described above. The impact related to this transaction will be included in Wintrust's consolidated financial results only since the effective date of acquisition.
On April 20, 2009 Wayne Hummer Asset Management Company completed its previously announced agreement to purchase certain assets and assume certain liabilities of Advanced Investment Partners, LLC ("AIP"). AIP is an investment management firm specializing in the active management of domestic equity investment strategies. The impact related to the AIP transaction is included in Wintrust's consolidated financial results only since the effective date of acquisition.
On December 23, 2008, the Company announced the acquisition by Wintrust Mortgage Corporation of certain assets and the assumption of certain liabilities of the mortgage banking business of Professional Mortgage Partners ("PMP") of Downers Grove, Illinois. PMP was founded in 1999 and had approximately $1.6 billion in annual mortgage originations in 2008. The terms of the cash transaction were not disclosed; however, a significant portion of the net purchase price for the PMP assets is conditioned upon certain future profitability measures. The impact related to the PMP transaction is included in Wintrust's consolidated financial results only since the effective date of acquisition.
Securitization
On September 11, 2009 Wintrust's indirect, wholly-owned subsidiary, FIFC Premium Funding I, LLC (the "Issuer"), closed on the sale of $600,000,000 aggregate principal amount of its Series 2009-A Premium Finance Asset Backed Notes, Class A (the "Notes"). The Notes were issued in a securitization transaction sponsored by First Insurance Funding Corp. This is an off-balance sheet financing transaction for the Company.
The Notes bear interest at an annual rate equal to one-month LIBOR plus 1.45% and have an expected average term of 2.93 years; provided, however, that the entire unpaid balance of the Notes shall be due and payable in full on February 17, 2014. At the time of issuance, the Notes were eligible collateral under the Federal Reserve Bank of New York's Term Asset-Backed Securities Loan Facility ("TALF"). The Notes are rated Aaa by Moody's and AAA by Standard & Poor's. The Issuer's obligations under the Notes are secured by revolving loans made to buyers of property and casualty insurance policies to finance the related premiums payable by the buyers to the insurance companies for the policies. The premium finance loans will be transferred from time to time by FIFC to FIFC Funding, I LLC (the "Depositor") and by the Depositor to the Issuer.
The Notes have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities laws and may not be offered or sold in the United States without registration under the Securities Act or any applicable exemption from registration. The Notes were sold in a private placement to qualified institutional buyers only pursuant to an exemption under Rule 144A of the Securities Act. The Notes are restricted securities and may only be resold to qualified institutional buyers in a transaction meeting the requirements of Rule 144A and may not otherwise be reoffered, resold, pledged or otherwise transferred.
As a result of this transaction the Company recognized a gain of $3.6 million in the third quarter of 2009. A total of $695 million in premium finance property and casualty receivables were initially transferred into the securitization. The Company retained interests of approximately $84 million and a sellers interest in loans of $11 million. Approximately $50 million of the retained interests are classified as debt securities on the Company's balance sheet and the remainder is classified in other assets. In the event FIFC transfers loans to the Depositor in the fourth quarter, additional gains should be recognized.
Stock Offerings/Regulatory Capital
The Company announced on December 19, 2008 that it had received the proceeds from the $250 million investment in Wintrust by the U.S. Treasury Department. The investment was made as part of the U.S. Treasury Department's Capital Purchase Program, which is designed to infuse capital into the nation's healthy banks in order to expand the flow of credit to U.S. consumers and businesses on competitive terms to promote the sustained growth and vitality of the U.S. economy.
The investment by the U.S. Treasury Department was comprised of $250 million in preferred shares, with a warrant to purchase 1,643,295 shares of Wintrust common stock at a per share exercise price of $22.82 and a term of 10 years. If declared, dividends on the senior preferred stock are payable quarterly in arrears at a rate of 5% annually for the first five years and 9% thereafter. This investment can, with the approval of the Federal Reserve, be repurchased. The Company filed a shelf registration statement to fulfill the requirement of the Capital Purchase Program that the U.S. Department of Treasury be able to publicly sell the preferred shares and warrant it purchased from Wintrust.
On August 26, 2008, the Company sold $50 million ($49.4 million net of issuance costs) of non-cumulative perpetual convertible preferred stock in a private transaction. If declared, dividends on the preferred stock are payable quarterly in arrears at a rate of 8.00% per annum. The shares are convertible into common stock at the option of the holder at a price per share of $25.72. On and after August 26, 2010, the preferred stock will be subject to mandatory conversion into common stock under certain circumstances.
Financial Performance Overview - Third Quarter of 2009
For the third quarter of 2009, net interest income totaled $87.7 million, an increase of $27.0 million as compared to the third quarter of 2008 and an increase of $15.2 million as compared to the second quarter of 2009. Average earning assets for the third quarter of 2009 increased by $1.9 billion compared to the third quarter of 2008. Earning asset growth over the past 12 months was primarily a result of the $1.3 billion increase in average loans and $534 million increase in liquidity management assets. The average earning asset growth of $1.9 billion over the past 12 months was funded by a $1.1 billion increase in the average balances of savings, NOW, MMA and Wealth Management deposits, an increase in the average balance of net free funds of $354 million, an increase in the average balance of brokered certificates of deposit of $166 million, an increase in the average balance of retail certificates of deposit of $442 million offset by a decrease in the average balance of wholesale borrowings of $168 million. At September 30, 2009, $913 million of retail deposits were held in the Company's MaxSafe(R) suite of products (certificates of deposit, MMA and NOW). MaxSafe(R) is an innovative investment alternative that provides up to 15 times the FDIC insurance security of a traditional banking deposit or a total of $3.75 million for an individual interest-bearing account, by capitalizing on the Company's multiple banking charters and depositing a customer's funds across all 15 of the Company's community banks.
The net interest margin for the third quarter of 2009 was 3.25%, compared to 2.74% in the third quarter of 2008 and 2.91% in the second quarter of 2009. The increase in the net interest margin in the third quarter of 2009 when compared to the second quarter of 2009 is attributable to the acquisition of the life insurance premium finance portfolio and lower costs of interest-bearing deposits. In the third quarter of 2009, the yield on loans increased 40 basis points and the rate on interest-bearing deposits decreased 22 basis points compared to the second quarter of 2009. The bulk of the increase in yield on loans is attributable to premium finance receivables. Management believes opportunities during the remainder of 2009 for increasing credit spreads in commercial loan portfolio and re-pricing of maturities of retail certificates of deposits should contribute to continued net interest margin expansion.
Non-interest income totaled $150.7 million in the third quarter of 2009, increasing $128.6 million, or 581%, compared to the third quarter of 2008 and increasing $105.2 million, or 919% on an annualized basis, compared to the second quarter of 2009. The increase, in comparison to both prior periods, was primarily attributable to the activities described earlier under "Acquisitions" and "Securitization." Another component of non-interest income with meaningful changes between comparable quarters was mortgage banking revenue. Mortgage banking revenue increased $8.7 million when compared to the third quarter of 2008 and decreased $9.4 million when compared to the second quarter of 2009. These changes were primarily attributable to varying levels of activity in mortgage loans originated for sale to the secondary market during 2009. Mortgages originated for sale totaled over $960 million in the third quarter of 2009 compared to over $1.5 billion in the second quarter of 2009 and $344 million in the third quarter of 2008.
Non-interest expense totaled $92.6 million in the third quarter of 2009, increasing $29.4 million, or 46%, compared to the third quarter of 2008 and $8.3 million, or 39% on an annualized basis, compared to the second quarter of 2009. The increase compared to the second quarter of 2009 was attributable to a $9.2 million increase in other real estate expenses (including losses recognized on sales), a $2.1 million increase in salaries and employee benefits, and a $1.2 million increase in professional fees, offset by a $4.8 million decrease in the FDIC deposit insurance expense as the second quarter of 2009 contained the industry-wide special assessment.
Financial Performance Overview - First Nine Months of 2009
The net interest margin for the first nine months of 2009 was 2.98%, compared to 2.83% in the first nine months of 2008. The increase in the net interest margin in the first nine months of 2009 when compared to the first nine months of 2008 is primarily attributable to the positive impact of controlling interest-bearing deposit costs. The yield on earning assets decreased by 86 basis points compared to the first nine months of 2008 while the rate paid on total interest-bearing deposits decreased by 110 basis points compared to the first nine months of 2008.
Non-interest income totaled $232.6 million in the first nine months of 2009, increasing $152.3 million, or 190%, compared to the first nine months of 2008. The increase was primarily attributable to the $113.1 million bargain purchase gain and an increase of $33.9 million in mortgage banking revenue. The increase in mortgage banking revenue is primarily attributable to a significant increase in mortgage loans originated and sold to the secondary market. Mortgages originated for sale totaled over $3.7 billion in the first nine months of 2009 compared to over $1.3 billion in the first nine months of 2008. During the first nine months of 2009, the Company recognized an increase of $22.9 million in trading income. Partially offsetting the increase in trading income was the decrease of $19.6 million on fees from covered call options compared to the first nine months of 2008. The majority of the increase in trading income resulted from an increase in the market value of certain collateralized mortgage obligations held as trading assets. The Company purchased these securities at a significant discount during the first quarter of 2009. These securities have increased in value since their purchase due to market spreads tightening, increased mortgage prepayments due to a favorable mortgage rate environment and the resultant refinancing activity taking place in the market and lower than projected default rates.
Non-interest expense totaled $253.8 million in the first nine months of 2009, increasing $62.5 million, or 33%, compared to the first nine months of 2008. The change compared to the first nine months of 2008 was attributable to a $29.5 million increase in salaries and employee benefits and a $12.5 million increase in FDIC insurance expense related to deposit insurance rate increases, the one-time industry-wide FDIC deposit insurance special assessment in the second quarter of 2009 and growth in the assessable deposit base. Additionally, $12.3 million of increased expenses related to other real-estate owned (including losses on sales) and $3.4 million from increased professional fees, primarily as a result of the elevated level of non-performing assets contributed to the $62.5 million non-interest expense growth. The $29.5 million increase in salaries and employee benefits is largely attributable to an increase in variable pay (commissions) of $15.6 million primarily as a result of the higher mortgage loan origination volumes.
Financial Performance Overview - Credit Quality
Non-performing loans totaled $231.7 million, or 2.80% of total loans, at September 30, 2009, compared to $238.2 million, or 3.14% of total loans, at June 30, 2009 and $113.1 million, or 1.54% of total loans, at September 30, 2008. Other real-estate owned ("OREO") of $40.6 million at September 30, 2009 was down slightly compared to June 30, 2009 and increased $28.1 million compared to September 30, 2008. During the third quarter of 2009, 48 individual properties, representing 20 lending relationships, were acquired by the Company via foreclosure or deed in lieu of foreclosure. The fair value of these properties totaled $17.1 million. Changes in fair value of properties held and properties sold reduced the OREO balance by $17.9 million during the third quarter of 2009.
The provision for credit losses totaled $91.2 million for the third quarter of 2009 compared to $23.7 million for the second quarter of 2009 and $24.1 million in the third quarter of 2008. Net charge-offs for the third quarter totaled 365 basis points on an annualized basis compared to 84 basis points on an annualized basis in the third quarter of 2008 and 63 basis points on an annualized basis in the second quarter of 2009. The provision for credit losses totaled $129.3 million for the first nine months of 2009 compared to $43.0 million for the first nine months of 2008. Net charge-offs for the first nine months totaled 166 basis points on an annualized basis compared to 50 basis points on an annualized basis in the first nine months of 2008.
The allowance for credit losses at September 30, 2009 totaled $98.2 million and increased to 1.19% of total loans compared to $86.7 million or 1.14% of total loans at June 30, 2009 and $66.8 million, or 0.91% of total loans at September 30, 2008. At September 30, 2009, an additional $36.2 million of non-accretable discounts on the purchased life insurance premium finance receivables remains. Including this amount as part of the allowance for credit losses would increase the allowance for credit losses as a percentage of total loans outstanding to 1.62% at September 30, 2009.
WINTRUST FINANCIAL CORPORATION
SELECTED FINANCIAL HIGHLIGHTS
Three Months Ended Nine Months Ended
(Dollars in September 30, September 30,
thousands, except ------------------------ ------------------------
per share data) 2009 2008 2009 2008
------------------------------ ----------- ----------- -----------
Selected Financial
Condition Data (at
end of period):
Total assets $12,136,021 $ 9,864,920
Total loans 8,275,257 7,322,545
Total deposits 9,847,163 7,829,527
Junior subordinated
debentures 249,493 249,537
Total shareholders'
equity 1,106,082 809,331
-------------------------------------------
Selected Statements
of Income Data:
Net interest income$ 87,663 $ 60,680 $ 224,942 $ 181,822
Net revenue (1) 238,343 82,810 457,501 262,127
Income before taxes 54,587 (4,518) 74,402 27,914
Net income 31,995 (2,448) 44,902 18,533
Net income per
common share
- Basic 1.14 (0.13) 1.26 0.76
Net income per
common share
- Diluted 1.07 (0.13) 1.25 0.75
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Selected Financial
Ratios and
Other Data:
Performance Ratios:
Net interest
margin (2) 3.25% 2.74% 2.98% 2.83%
Non-interest income
to average assets 5.07 0.89 2.79 1.11
Non-interest
expense to
average assets 3.11 2.54 3.04 2.65
Net overhead
ratio (3) (1.95) 1.65 0.25 1.54
Efficiency
ratio (2) (4) 38.69 76.64 55.15 72.28
Return on average
assets 1.08 (0.10) 0.54 0.26
Return on average
equity 13.79 (1.59) 5.16 3.20
Average total
assets $11,797,520 $ 9,881,554 $11,154,193 $ 9,646,060
Average total
shareholders'
equity 1,070,095 765,892 1,066,447 756,801
Average loans to
average deposits
ratio 90.5% 94.1% 91.9% 94.5%
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Common Share Data
at end of period:
Market price per
common share $ 27.96 $ 29.35
Book value per
common share $ 34.10 $ 32.07
Common shares
outstanding 24,103,068 23,693,799
Other Data at end
of period:
Leverage ratio (5) 7.7% 8.1%
Tier 1 capital to
risk-weighted
assets (5) 8.8% 9.2%
Total capital to
risk-weighted
assets (5) 12.1% 10.7%
Allowance for
credit losses (6) $ 98,225 $ 66,820
Credit discounts
on purchased
loans (7) 36,195 --
Total credit
reserves 134,420 66,820
Non-performing
loans 231,659 113,041
Allowance for
credit losses to
total loans (6) 1.19% 0.91%
Total credit
reserves to
total loans (8) 1.62% 0.91%
Non-performing
loans to
total loans 2.80% 1.54%
Number of:
Bank subsidiaries 15 15
Non-bank
subsidiaries 8 8
Banking offices 78 79
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(1) Net revenue is net interest income plus non-interest income.
(2) See "Supplemental Financial Measures/Ratios" for additional
information on this performance measure/ratio.
(3) The net overhead ratio is calculated by netting total
non-interest expense and total non-interest income, annualizing
this amount, and dividing by that period's total average assets.
A lower ratio indicates a higher degree of efficiency.
(4) The efficiency ratio is calculated by dividing total non-interest
expense by tax-equivalent net revenues (less securities gains or
losses). A lower ratio indicates more efficient revenue
generation.
(5) Capital ratios for current quarter-end are estimated.
(6) The allowance for credit losses includes both the allowance for
loan losses and the allowance for lending-related commitments.
(7) Represents the remaining non-accretable portion of the discounts
on the purchased life insurance premium finance loans that were
purchased.
(8) The sum of allowance for credit losses and credit discounts on
purchased loans divided by total loans outstanding plus the
credit discounts on purchased loans.
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited) (Unaudited)
Sept. 30, Dec. 31, Sept. 30,
(In thousands) 2009 2008 2008
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Assets
Cash and due from banks $ 128,898 $ 219,794 $ 158,201
Federal funds sold and
securities purchased under
resale agreements 22,863 226,110 35,181
Interest bearing deposits
with banks 1,168,362 123,009 4,686
Available-for-sale securities,
at fair value 1,434,248 784,673 1,469,500
Trading account securities 29,204 4,399 2,243
Brokerage customer receivables 19,441 17,901 19,436
Loans held-for-sale 193,255 61,116 68,398
Loans, net of unearned income 8,275,257 7,621,069 7,322,545
Less: Allowance for loan losses 95,096 69,767 66,327
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Net loans 8,180,161 7,551,302 7,256,218
Premises and equipment, net 352,890 349,875 349,388
Accrued interest receivable
and other assets 315,806 240,664 209,970
Trade date securities receivable -- 788,565 --
Goodwill 276,525 276,310 276,310
Other intangible assets 14,368 14,608 15,389
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Total assets $12,136,021 $10,658,326 $ 9,864,920
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Liabilities and
Shareholders' Equity
Deposits:
Non-interest bearing $ 841,668 $ 757,844 $ 717,587
Interest bearing 9,005,495 7,618,906 7,111,940
---------------------------------------------------------------------
Total deposits 9,847,163 8,376,750 7,829,527
Notes payable 1,000 1,000 42,025
Federal Home Loan Bank advances 433,983 435,981 438,983
Other borrowings 252,071 336,764 296,391
Subordinated notes 65,000 70,000 75,000
Junior subordinated debentures 249,493 249,515 249,537
Trade date securities payable -- -- 2,000
Accrued interest payable and
other liabilities 181,229 121,744 122,126
---------------------------------------------------------------------
Total liabilities 11,029,939 9,591,754 9,055,589
---------------------------------------------------------------------
Shareholders' equity:
Preferred stock 284,061 281,873 49,379
Common stock 26,965 26,611 26,548
Surplus 580,988 571,887 551,453
Treasury stock (122,437) (122,290) (122,290)
Retained earnings 342,873 318,793 318,066
Accumulated other
comprehensive loss (6,368) (10,302) (13,825)
---------------------------------------------------------------------
Total shareholders' equity 1,106,082 1,066,572 809,331
---------------------------------------------------------------------
Total liabilities and
shareholders' equity $12,136,021 $10,658,326 $ 9,864,920
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, except per ------------------ -------------------
share data) 2009 2008 2009 2008
------------------------------------------------- -------------------
Interest income
Interest and fees on loans $126,448 $108,495 $343,637 $336,251
Interest bearing deposits
with banks 778 27 2,205 215
Federal funds sold and
securities purchased under
resale agreements 106 197 233 1,303
Securities 14,106 17,599 44,252 50,233
Trading account securities 7 23 86 69
Brokerage customer receivables 132 228 372 834
---------------------------------------------------------------------
Total interest income 141,577 126,569 390,785 388,905
---------------------------------------------------------------------
Interest expense
Interest on deposits 42,806 53,405 132,261 168,697
Interest on Federal Home
Loan Bank advances 4,536 4,583 13,492 13,696
Interest on notes payable and
other borrowings 1,779 2,661 5,401 8,331
Interest on subordinated notes 333 786 1,341 2,716
Interest on junior
subordinated debentures 4,460 4,454 13,348 13,643
---------------------------------------------------------------------
Total interest expense 53,914 65,889 165,843 207,083
---------------------------------------------------------------------
Net interest income 87,663 60,680 224,942 181,822
Provision for credit losses 91,193 24,129 129,329 42,985
---------------------------------------------------------------------
Net interest income after
provision for credit losses (3,530) 36,551 95,613 138,837
---------------------------------------------------------------------
Non-interest income
Wealth management 7,501 7,044 20,310 22,680
Mortgage banking 13,204 4,488 52,032 18,120
Service charges on
deposit accounts 3,447 2,674 9,600 7,612
Gain on sales of commercial
premium finance receivables 3,629 456 4,147 2,163
(Losses) gains on available
-for-sale securities, net (412) 920 (910) (553)
Gain on bargain purchase 113,062 -- 113,062 --
Other 10,249 6,548 34,318 30,283
---------------------------------------------------------------------
Total non-interest income 150,680 22,130 232,559 80,305
---------------------------------------------------------------------
Non-interest expense
Salaries and employee benefits 48,088 35,823 138,923 109,471
Equipment 4,069 4,050 12,022 12,025
Occupancy, net 5,884 5,666 17,682 16,971
Data processing 3,226 2,850 9,578 8,566
Advertising and marketing 1,488 1,343 4,003 3,709
Professional fees 4,089 2,195 9,843 6,490
Amortization of other
intangible assets 677 781 2,040 2,348
Other 25,042 10,491 59,679 31,648
---------------------------------------------------------------------
Total non-interest expense 92,563 63,199 253,770 191,228
---------------------------------------------------------------------
Income before taxes 54,587 (4,518) 74,402 27,914
Income tax expense 22,592 (2,070) 29,500 9,381
---------------------------------------------------------------------
Net income $ 31,995 $ (2,448) $ 44,902 $ 18,533
---------------------------------------------------------------------
Preferred stock dividends and
discount accretion 4,668 544 14,668 544
---------------------------------------------------------------------
Net income applicable to
common shares $ 27,327 $ (2,992) $ 30,234 $ 17,989
---------------------------------------------------------------------
Net income per common share
- Basic $ 1.14 $ (0.13) $ 1.26 $ 0.76
---------------------------------------------------------------------
Net income per common share
- Diluted $ 1.07 $ (0.13) $ 1.25 $ 0.75
---------------------------------------------------------------------
Cash dividends declared per
common share $ 0.09 $ 0.18 $ 0.27 $ 0.36
---------------------------------------------------------------------
---------------------------------------------------------------------
Weighted average common
shares outstanding 24,052 23,644 23,958 23,590
Dilutive potential
common shares 2,493 -- 323 525
---------------------------------------------------------------------
Average common shares and
dilutive common shares 26,545 23,644 24,281 24,115
---------------------------------------------------------------------
SUPPLEMENTAL FINANCIAL MEASURES/RATIOS
The accounting and reporting policies of Wintrust conform to generally accepted accounting principles ("GAAP") in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company's performance. These include taxable-equivalent net interest income (including its individual components), net interest margin (including its individual components) and the efficiency ratio. Management believes that these measures and ratios provide users of the Company's financial information a more meaningful view of the performance of the interest-earning 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 ("FTE") basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a FTE basis is also used in the calculation of the 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.
A reconciliation of certain non-GAAP performance measures and ratios used by the Company to evaluate and measure the Company's performance to the most directly comparable GAAP financial measures is shown below:
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------
(Dollars in thousands) 2009 2008 2009 2008
----------------------------------------------------------------------
(A) Interest income (GAAP) $141,577 $126,569 $390,785 $388,905
Taxable-equivalent adjustment:
- Loans 93 142 360 499
- Liquidity management assets 413 423 1,314 1,362
- Other earning assets 9 12 30 31
---------------------------------------
Interest income - FTE $142,092 $127,146 $392,489 $390,797
(B) Interest expense (GAAP) 53,914 65,889 165,843 207,083
---------------------------------------
Net interest income - FTE $ 88,178 $ 61,257 $226,646 $183,714
---------------------------------------
(C) Net interest income (GAAP)
(A minus B) $ 87,663 $ 60,680 $224,942 $181,822
---------------------------------------
(D) Net interest margin (GAAP) 3.23% 2.71 2.95% 2.80%
Net interest margin - FTE 3.25% 2.74% 2.98% 2.83%
(E) Efficiency ratio (GAAP) 38.77% 77.18% 55.36% 72.80%
Efficiency ratio - FTE 38.69% 76.64% %55.15 72.28%
----------------------------------------------------------------------
Loans
---------------------------------------------------------------------
Loan Portfolio Mix and Growth Rates
% Growth
-------------------
From From
(Dollars in Sept. 30, Dec. 31, Sept. 30, Dec. 31, Sept. 30,
thousands) 2009 2008 2008 2008(1) 2008
------------- ---------- ---------- ---------- --------- ---------
Balance:
--------
Commercial and
commercial
real estate $5,035,859 $4,778,664 $4,673,682 7% 8%
Home equity 928,548 896,438 837,127 5 11
Residential
real estate 281,151 262,908 247,203 9 14
Premium
finance
receivables -
commercial 752,032 1,243,858 1,164,256 (53) (35)
Premium
finance
receivables -
life
insurance 1,045,653 102,728 41,120 NM NM
Indirect
consumer
loans(2) 115,528 175,955 199,845 (46) (42)
Other loans 116,486 160,518 159,312 (36) (27)
---------- ---------- ---------- --------- ---------
Total loans,
net of
unearned
income $8,275,257 $7,621,069 $7,322,545 11% 13%
---------- ---------- ---------- --------- ---------
Mix:
----
Commercial and
commercial
real estate 61% 63% 64%
Home equity 11 12 11
Residential
real estate 4 3 4
Premium finance
receivables -
commercial 9 16 16
Premium finance
receivables -
life insurance 13 2 1
Indirect
consumer
loans(2) 1 2 3
Other loans 1 2 1
---------- ---------- ----------
Total loans,
net of
unearned
income 100% 100% 100%
----------- ----------- -----------
(1) Annualized
(2) Includes autos, boats, snowmobiles and other indirect consumer
loans.
NM = Not Meaningful
---------------------------------------------------------------------
---------------------------------------------------------------------
Commercial and Commercial Real Estate Loans
As of September 30, 2009
> 90 Days Allowance
% of Past Due For Credit
(Dollars in Total Non- and Still Losses
thousands) Balance Loans accrual Accruing Allocation
---------------- ---------- ------ -------- --------- ----------
Commercial:
Commercial and
Industrial $1,345,111 16.3% $ 16,689 $ 605 $ 21,799
Franchise 107,447 1.3 -- -- 1,619
Mortgage
warehouse lines
of credit 73,816 0.9 -- -- 985
Community
Advantage -
homeowner
associations 60,146 0.7 -- -- 145
Aircraft 41,606 0.5 -- 153 164
Other 15,595 0.2 2,346 -- 424
---------- ------ -------- --------- ----------
Total
Commercial $1,643,721 19.9% $ 19,035 $ 758 $ 25,136
---------- ------ -------- --------- ----------
Commercial Real
Estate:
Land and
development $1,041,641 12.6% $103,573 $ 10,090 $ 25,231
Office 544,772 6.6 10,029 -- 7,079
Industrial 466,725 5.6 8,476 355 7,012
Retail 570,589 6.9 10,698 12,161 7,846
Mixed use and
other 768,411 9.3 14,915 13 10,686
---------- ------ -------- --------- ----------
Total Commercial
Real Estate
Loans $3,392,138 41.0% $147,691 $ 22,619 $ 57,854
---------- ------ -------- --------- ----------
Total Commercial
and Commercial
Real Estate $5,035,859 60.9% $166,726 $ 23,377 $ 82,990
---------- ------ -------- --------- ----------
---------------------------------------------------------------------
Commercial Real
Estate-collateral
location by state:
Illinois $2,729,454 80.5%
Wisconsin 375,911 11.1
---------- ------
Total primary
markets $3,105,365 91.6%
---------- ------
Indiana 48,300 1.4
Florida 43,164 1.3
Arizona 42,226 1.2
Other (no
individual state
greater than
0.6%) 153,083 4.5
---------- ------
Total $3,392,138 100.0%
---------- ------
DEPOSITS
---------------------------------------------------------------------
Deposit Portfolio Mix and Growth Rates % Growth
-------------------
From From
(Dollars in Sept. 30, Dec. 31, Sept. 30, Dec. 31, Sept. 30,
thousands) 2009 2008 2008 2008(1) 2008
------------- ---------- ---------- ---------- --------- ---------
Balance:
--------
Non-interest
bearing $ 841,668 $ 757,844 $ 717,587 15% 17%
NOW 1,245,689 1,040,105 1,012,393 26 23
Wealth
Management
deposits(2) 935,740 716,178 583,715 41 60
Money market 1,468,228 1,124,068 997,638 41 47
Savings 513,239 337,808 317,108 69 62
Time
certificates
of deposit 4,842,599 4,400,747 4,201,086 13 15
---------- ---------- ---------- --------- ---------
Total
deposits $9,847,163 $8,376,750 $7,829,527 23% 26%
---------- ---------- ---------- --------- ---------
Mix:
----
Non-interest
bearing 9% 9% 9%
NOW 13 12 13
Wealth
Management
deposits(2) 9 9 7
Money market 15 13 13
Savings 5 4 4
Time
certificates
of deposit 49 53 54
---------- ---------- ----------
Total
deposits 100% 100% 100%
----------- ----------- -----------
(1) Annualized
(2) Represents deposit balances at the Company's subsidiary banks
from brokerage customers of Wayne Hummer Investments, trust and
asset management customers of Wayne Hummer Trust Company and
brokerage customers from unaffiliated companies which have been
placed into deposit accounts of the Banks.
---------------------------------------------------------------------
---------------------------------------------------------------------
Deposit Maturity Analysis Weighted-
As of September 30, 2009 Average
Rate of
Maturing
Non- Time
Interest Savings Time Certifi-
Bearing And Wealth Certifi- ficates
(Dollars in And Money Mgt cates Total of
thousands) NOW(1) Market(1) (1)(2) of Deposit Deposits Deposit
------------------ ---------- -------- ---------- ---------- --------
1 - 3
months $2,087,357 $1,981,467 $615,898 $1,392,088 $6,076,810 2.38%
4 - 6
months -- -- 121,294 851,034 972,328 2.46
7 - 9
months -- -- -- 720,427 720,427 2.61
10 - 12
months -- -- -- 605,530 605,530 2.39
13 - 18
months -- -- 198,548 668,256 866,804 2.67
19 - 24
months -- -- -- 284,965 284,965 3.54
24+
months -- -- -- 320,299 320,299 3.57
---------- ---------- -------- ---------- ---------- --------
Total $2,087,357 $1,981,467 $935,740 $4,842,599 $9,847,163 2.62%
---------- ---------- -------- ---------- ---------- --------
----------------------------------------------------------------------
(1) Balances of non-contractual maturity deposits are shown as
maturing in the earliest time frame. These deposits do not have
contractual maturities and re-price in varying degrees to changes
in overall interest rates.
(2) Wealth management deposit balances from unaffiliated companies
are shown maturing in the period in which the current contractual
obligation to hold these funds matures.
----------------------------------------------------------------------
NET INTEREST INCOME
The following table presents a summary of Wintrust's average balances, net interest income and related net interest margins, calculated on a fully tax-equivalent basis, for the third quarter of 2009 compared to the third quarter of 2008 (linked quarters):
---------------------------------------------------------------------
For the Three Months Ended For the Three Months Ended
September 30, 2009 September 30, 2008
(Dollars in---------------------------- ----------------------------
thousands) Average Interest Rate Average Interest Rate
--------------------------------------- ----------------------------
Liquidity
management
assets (1)
(2) (7) $ 2,078,330 $ 15,403 2.94% $ 1,544,465 $ 18,247 4.70%
Other
earning
assets (2)
(3) (7) 24,874 148 2.36 21,687 262 4.81
Loans, net
of
unearned
income (2)
(4) (7) 8,665,281 126,541 5.79 7,343,845 108,637 5.89
---------------------------- ----------------------------
Total
earning
assets
(7) $10,768,485 $142,092 5.24% $ 8,909,997 $127,146 5.68%
---------------------------- ----------------------------
Allowance
for loan
losses (85,300) (57,751)
Cash and
due from
banks 109,645 133,527
Other
assets 1,004,690 895,781
----------- -----------
Total
assets $11,797,520 $ 9,881,554
=========== ===========
Interest
-bearing
deposits $ 8,799,578 $ 42,806 1.93% $ 7,127,065 $ 53,405 2.98%
Federal
Home Loan
Bank
advances 434,134 4,536 4.14 438,983 4,583 4.15
Notes
payable
and other
borrowings 245,352 1,779 2.88 398,911 2,661 2.65
Subordinated
notes 65,000 333 2.01 75,000 786 4.10
Junior
subordinated
debentures 249,493 4,460 6.99 249,552 4,454 6.98
---------------------------- ----------------------------
Total
interest
-bearing
liabil
-ities $ 9,793,557 $ 53,914 2.18% $ 8,289,511 $ 65,889 3.16%
---------------------------- ----------------------------
Non-interest
bearing
deposits 775,202 678,651
Other
liabilities 158,666 147,500
Equity 1,070,095 765,892
----------- -----------
Total
liabil
-ities
and share
-holders'
equity $11,797,520 $ 9,881,554
=========== ===========
Interest
rate
spread (5)
(7) 3.06% 2.52%
Net free
funds/
contri
-bution
(6) $ 974,928 0.19 $ 620,486 0.22
---------------------------- ----------------------------
Net
interest
income/Net
interest
margin (7) $ 88,178 3.25% $ 61,257 2.74%
--------------- ---------------
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) Liquidity management assets include available-for-sale
securities, interest earning deposits with banks, federal funds
sold and securities purchased under resale agreements.
(2) Interest income on tax-advantaged loans, trading account
securities and securities reflects a tax-equivalent adjustment
based on a marginal federal corporate tax rate of 35%. The total
adjustments for the three months ended September 30, 2009 and
2008 were $515,000 and $576,000, respectively.
(3) Other earning assets include brokerage customer receivables and
trading account securities.
(4) Loans, net of unearned income, include loans held-for-sale and
non-accrual loans.
(5) Interest rate spread is the difference between the yield earned
on earning assets and the rate paid on interest-bearing
liabilities.
(6) Net free funds are the difference between total average earning
assets and total average interest-bearing liabilities. The
estimated contribution to net interest margin from net free funds
is calculated using the rate paid for total interest-bearing
liabilities.
(7) See "Supplemental Financial Measures/Ratios" for additional
information on this performance measure/ratio.
The following table presents a summary of Wintrust's average balances, net interest income and related net interest margins, calculated on a fully tax-equivalent basis, for the third quarter of 2009 compared to the second quarter of 2009 (sequential quarters):
---------------------------------------------------------------------
For the Three Months Ended For the Three Months Ended
September 30, 2009 June 30, 2009
(Dollars in---------------------------- ----------------------------
thousands) Average Interest Rate Average Interest Rate
--------------------------------------- ----------------------------
Liquidity
management
assets (1)
(2) (7) $ 2,078,330 $ 15,403 2.94% $ 1,851,179 $ 17,102 3.71%
Other
earning
assets (2)
(3) (7) 24,874 148 2.36 22,694 185 3.27
Loans, net
of
unearned
income (2)
(4) (7) 8,665,281 126,541 5.79 8,212,572 110,412 5.39
---------------------------- ----------------------------
Total
earning
assets
(7) $10,768,485 $142,092 5.24% $10,086,445 $127,699 5.08%
---------------------------- ----------------------------
Allowance
for loan
losses (85,300) (72,990)
Cash and
due from
banks 109,645 118,402
Other
assets 1,004,690 905,611
----------- -----------
Total
assets $11,797,520 $11,037,468
=========== ===========
Interest
-bearing
deposits $ 8,799,578 $ 42,806 1.93% $ 8,097,096 $ 43,502 2.15%
Federal
Home Loan
Bank
advances 434,134 4,536 4.14 435,983 4,503 4.14
Notes
payable
and other
borrowings 245,352 1,779 2.88 249,123 1,752 2.82
Subordinated
notes 65,000 333 2.01 66,648 428 2.54
Junior
subordinated
debentures 249,493 4,460 6.99 249,494 4,447 7.05
---------------------------- ----------------------------
Total
interest
-bearing
liabil
-ities $ 9,793,557 $ 53,914 2.18% $ 9,098,344 $ 54,632 2.41%
---------------------------- ----------------------------
Non-interest
bearing
deposits 775,202 754,479
Other
liabilities 158,666 117,250
Equity 1,070,095 1,067,395
----------- -----------
Total
liabil
-ities
and share
-holders'
equity $11,797,520 $11,037,468
=========== ===========
Interest
rate
spread (5)
(7) 3.06% 2.67%
Net free
funds/
contri
-bution
(6) $ 974,928 0.19 $ 988,101 0.24
---------------------------- ----------------------------
Net
interest
income/Net
interest
margin (7) $ 88,178 3.25% $ 73,067 2.91%
--------------- ---------------
---------------------------------------------------------------------
(1) Liquidity management assets include available-for-sale
securities, interest earning deposits with banks, federal funds
sold and securities purchased under resale agreements.
(2) Interest income on tax-advantaged loans, trading account
securities and securities reflects a tax-equivalent adjustment
based on a marginal federal corporate tax rate of 35%. The total
adjustments for the three months ended September 30, 2009 was
$515,000 and for the three months ended June 30, 2009 was
$570,000.
(3) Other earning assets include brokerage customer receivables and
trading account securities.
(4) Loans, net of unearned income, include loans held-for-sale and
non-accrual loans.
(5) Interest rate spread is the difference between the yield earned
on earning assets and the rate paid on interest-bearing
liabilities.
(6) Net free funds are the difference between total average earning
assets and total average interest-bearing liabilities. The
estimated contribution to net interest margin from net free funds
is calculated using the rate paid for total interest-bearing
liabilities.
(7) See "Supplemental Financial Measures/Ratios" for additional
information on this performance measure/ratio.
The higher level of net interest income recorded in the third quarter of 2009 compared to the second quarter of 2009 was attributable to the impact of the life insurance premium finance loan purchase and the ability to raise and retain interest-bearing deposits at lower rates. Average earning asset growth of $682 million in the third quarter of 2009 compared to the second quarter of 2009 was comprised of $453 million of loan growth and $227 million of liquid management asset growth. The $682 million of average earning asset growth was primarily funded entirely by a $702 million increase in the average balances of interest-bearing deposits.
In the third quarter of 2009, the yield on loans increased 40 basis points and the rate on interest-bearing deposits decreased 22 basis points compared to the second quarter of 2009. The bulk of the increase in yield on loans is attributable to purchase of the life insurance premium finance receivables. Management believes opportunities remain for increasing credit spreads in commercial and commercial real estate loan portfolios and for lower rates from the re-pricing of maturing retail certificates of deposits, both of which should contribute to continued net interest margin expansion.
The following table presents a summary of Wintrust's average balances, net interest income and related net interest margins, calculated on a fully tax-equivalent basis, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008:
--------------------------------------- ----------------------------
For the Nine Months Ended For the Nine Months Ended
September 30, 2009 September 30, 2008
(Dollars in --------------------------- ----------------------------
thousands) Average Interest Rate Average Interest Rate
--------------------------------------- ----------------------------
Liquidity
management
assets (1)
(2) (7) $ 1,923,869 $ 48,004 3.34% $ 1,493,511 $ 53,114 4.75%
Other
earning
assets (2)
(3) (7) 23,242 488 2.81 23,530 933 5.30
Loans, net
of
unearned
income (2)
(4) (7) 8,244,336 343,997 5.58 7,171,467 336,750 6.27
---------------------------- ----------------------------
Total
earning
assets
(7) $10,191,447 $392,489 5.15% $ 8,688,508 $390,797 6.01%
---------------------------- ----------------------------
Allowance
for loan
losses (76,886) (54,352)
Cash and
due from
banks 103,164 128,045
Other
assets 936,468 883,859
----------- -----------
Total
assets $11,154,193 $ 9,646,060
=========== ===========
Interest
-bearing
deposits $ 8,217,631 $132,261 2.15% $ 6,927,829 $168,697 3.25%
Federal
Home Loan
Bank
advances 435,359 13,492 4.14 434,528 13,696 4.21
Notes
payable
and other
borrowings 266,264 5,401 2.71 389,882 8,331 2.85
Subordinated
notes 67,198 1,341 2.63 75,000 2,716 4.76
Junior
subordinated
debentures 249,498 13,348 7.05 249,594 13,643 7.18
---------------------------- ----------------------------
Total
interest
-bearing
liabil
-ities $ 9,235,950 $165,843 2.40% $ 8,076,833 $207,083 3.42%
---------------------------- ----------------------------
Non-interest
bearing
deposits 754,666 661,787
Other
liabilities 97,130 150,639
Equity 1,066,447 756,801
----------- -----------
Total
liabil
-ities
and share
-holders'
equity $11,154,193 $ 9,646,060
=========== ===========
Interest
rate
spread (5)
(7) 2.75% 2.59%
Net free
funds/
contri
-bution
(6) $ 955,497 0.23 $ 611,675 0.24
---------------------------- ----------------------------
Net
interest
income/Net
interest
margin (7) $226,646 2.98% $183,714 2.83%
--------------- ---------------
---------------------------------------------------------------------
(1) Liquidity management assets include available-for-sale
securities, interest earning deposits with banks, federal funds
sold and securities purchased under resale agreements.
(2) Interest income on tax-advantaged loans, trading account
securities and securities reflects a tax-equivalent adjustment
based on a marginal federal corporate tax rate of 35%. The total
adjustments for the nine months ended September 30, 2009 and
2008 were $1.7 million and $1.9 million, respectively.
(3) Other earning assets include brokerage customer receivables and
trading account securities.
(4) Loans, net of unearned income, include loans held-for-sale and
non-accrual loans.
(5) Interest rate spread is the difference between the yield earned
on earning assets and the rate paid on interest-bearing
liabilities.
(6) Net free funds are the difference between total average earning
assets and total average interest-bearing liabilities. The
estimated contribution to net interest margin from net free funds
is calculated using the rate paid for total interest-bearing
liabilities.
(7) See "Supplemental Financial Measures/Ratios" for additional
information on this performance measure/ratio.
NON-INTEREST INCOME
For the third quarter of 2009, non-interest income totaled $150.7 million, an increase of $128.6 million compared to the third quarter of 2008. The increase was primarily attributable to the life insurance premium finance loan acquisition (see "Acquisitions"), the securitization transaction (see "Securitization"), an increase in mortgage banking revenue and trading income offset by lower levels of fees from covered call options. For the first nine months of 2009, non-interest income totaled $232.6 million, an increase of $152.3 million compared to the first nine months of 2008.
The following table presents non-interest income by category for the periods presented:
---------------------------------------------------------------------
Three Months Ended
September 30,
------------------ $ %
(Dollars in thousands) 2009 2008 Change Change
------------------------------ -------- -------- -------- --------
Brokerage $ 4,593 $ 4,354 239 5
Trust and asset management 2,908 2,690 218 8
-------- -------- -------- --------
Total wealth management 7,501 7,044 457 6
-------- -------- -------- --------
Mortgage banking 13,204 4,488 8,716 194
Service charges on deposit
accounts 3,447 2,674 773 29
Gain on sales of premium
finance receivables 3,629 456 3,173 NM
(Losses) gains on
available-for-sale securities,
net (412) 920 (1,332) (145)
Gain on bargain purchase 113,062 -- 113,062 NM
Other:
Fees from covered call options -- 2,723 (2,723) (100)
Bank Owned Life Insurance 552 478 74 --
Trading income 6,236 286 5,950 NM
Administrative services 527 803 (276) (34)
Miscellaneous 2,934 2,258 676 30
-------- -------- -------- --------
Total other 10,249 6,548 3,701 57
-------- -------- -------- --------
Total non-interest income $150,680 $ 22,130 128,550 NM
-------- -------- -------- --------
---------------------------------------------------------------------
Nine Months Ended
September 30,
------------------ $ %
(Dollars in thousands) 2009 2008 Change Change
----------------------------- -------- -------- -------- --------
Brokerage $ 12,693 $ 14,339 (1,646) (11)
Trust and asset management 7,617 8,341 (724) (9)
-------- -------- -------- --------
Total wealth management 20,310 22,680 (2,370) (10)
-------- -------- -------- --------
Mortgage banking 52,032 18,120 33,912 187
Service charges on deposit
accounts 9,600 7,612 1,988 26
Gain on sales of premium
finance receivables 4,147 2,163 1,984 92
Losses on available-for-sale
securities, net (910) (553) (357) 65
Gain on bargain purchase 113,062 -- 113,062 NM
Other:
Fees from covered call options 1,998 21,586 (19,588) (91)
Bank Owned Life Insurance 1,403 1,941 (538) (28)
Trading income 23,254 396 22,858 NM
Administrative services 1,463 2,271 (808) (36)
Miscellaneous 6,200 4,089 2,111 52
-------- -------- -------- --------
Total other 34,318 30,283 4,035 13
-------- -------- -------- --------
Total non-interest income $232,559 $ 80,305 152,254 189
-------- -------- -------- --------
---------------------------------------------------------------------
NM = Not Meaningful
Wealth management is comprised of the trust and asset management revenue of Wayne Hummer Trust Company and the asset management fees, brokerage commissions, trading commissions and insurance product commissions at Wayne Hummer Investments and Wayne Hummer Asset Management Company. Wealth management totaled $7.5 million in the third quarter of 2009 and $7.0 million in the third quarter of 2008. Increased asset valuations due to the recent equity market improvements have helped revenue growth from trust and asset management activities. With equity markets improving in the third quarter of 2009, wealth management did increase $617,000, or 36% on an annualized basis, over the second quarter of 2009. On a year-to-date basis, wealth management totaled $20.3 million, down $2.4 million, or 10% when compared to the same period in 2008.
Mortgage banking includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. For the quarter ended September 30, 2009, this revenue source totaled $13.2 million, an increase of $8.7 million when compared to the third quarter of 2008. The increase was primarily attributable to $9.3 million from gains recognized on loans sold to the secondary market offset by $601,000 from changes in the fair market value of mortgage servicing rights, valuation fluctuations of mortgage banking derivatives, fair value accounting for certain residential mortgage loans held for sale and increased recourse obligation reserves for loans previously sold. Future growth of mortgage banking is impacted by the interest rate environment and current residential housing conditions and will continue to be dependent upon both. Mortgages originated and sold totaled over $960 million in the third quarter of 2009 compared to $1.5 billion in the second quarter of 2009 and $344 million in the third quarter of 2008. The positive impact of the PMP transaction, completed at the end of 2008, contributed to mortgage banking revenue growth in all quarters of 2009. On a year-to-date basis, mortgage banking totaled $52.0 million, increasing $33.9 million when compared to the same period in 2008. Mortgages originated and sold totaled over $3.7 billion in the first nine months of 2009 compared to over $1.3 billion in the first nine months of 2008.
Service charges on deposit accounts totaled $3.4 million for the third quarter of 2009, an increase of $773,000, or 29%, when compared to the same quarter of 2008. The majority of deposit service charges relates to customary fees on overdrawn accounts and returned items. The level of service charges received is substantially below peer group levels, as management believes in the philosophy of providing high quality service without encumbering that service with numerous activity charges.
Wintrust recognized $3.6 million of gains on the securitization of premium finance receivables in the third quarter of 2009 (see "Securitization"). FIFC sold $34 million of premium finance receivables in the third quarter of 2008, recognizing $456,000 of net gains. As a result of paydowns of loans in the revolving securitization facility, the Company anticipates transferring over $300 million of property and casualty premium finance receivables to the securitization facility during the fourth quarter of 2009 and additional gains related thereto may be recognized.
The bargain purchase gain resulted from the acquisition of the life insurance premium finance receivable portfolio. See "Acquisitions" for a complete discussion of the transaction. The following table summarizes the components of this transaction:
---------------------------------------------------------------------
Purchased Loan Portfolio
Summary of Acquisition
Gross Net Bargain
loan purchase Total purchase
(Dollars in thousands) balance price discounts gain(4)
------------------------------------- -------- --------- ---------
Loans purchased on
July 28, 2009 $949,322 $685,306 $(264,016) $(150,646)
- Initial bargain purchase
gain 99,949
- Accretion (effective
yield method) --
- Impact of accounts
clearing escrow(3) 11,313
- Impact of accounts
prepaid --
- Non-accretable transfer to
accretable --
---------
Remaining balances at
September 30, 2009(1) $ (39,384)
---------
Loans purchased on
October 2, 2009(2) $ 83,393 $ 60,460 $ (22,933) $ (14,461)
======== ======== ========= =========
Credit
discounts -
non-
Accretable accretable
(Dollars in thousands) discounts discounts
--------------------------- ----------- -----------
Loans purchased on July 28, 2009 $ (74,837) $ (38,533)
- Initial bargain purchase gain -- --
- Accretion (effective yield method) 3,530 --
- Impact of accounts clearing escrow(3) -- --
- Impact of accounts prepaid 3,925 2,338
- Non-accretable transfer to accretable -- --
----------- -----------
Remaining balances at September 30, 2009(1) $ (67,382) $ (36,195)
----------- -----------
Loans purchased on October 2, 2009(2) $ (5,742) $ (2,730)
=========== ===========
---------------------------------------------------------------------
(1) The remaining unrecognized bargain purchase gain is recognizable
subject to the receipt of required third party consents.
(2) None of the purchase price proceeds from the October 2, 2009
purchase are held in escrow. The bargain purchase gain is fully
recognizable in the fourth quarter of 2009.
(3) Third party consents were received and funds were released from
escrow.
(4) An additional $1.8 million of gain was recognized in conjunction
with the establishment of a customer list intangible asset.
---------------------------------------------------------------------
Other non-interest income for the third quarter of 2009 totaled $10.2 million, an increase of $3.7 million, compared to $6.5 million in the third quarter of 2008. Trading income increased $6.0 million as the Company recognized $6.2 million in trading income resulting primarily from the increase in market value of certain collateralized mortgage obligations. The Company purchased these securities at a significant discount during the first quarter of 2009. These securities have increased in value since their purchase due to market spreads tightening, increased mortgage prepayments due to favorable mortgage rate environment and the resultant refinancing activity taking place in the market, and lower than projected default rates. Partially offsetting the increase in trading income were fees from certain covered call option transactions decreasing by $2.7 million, as no income was recorded from this activity in the third quarter of 2009. Historically, compression in the net interest margin was effectively offset, as has consistently been the case, by the Company's covered call strategy. In the third quarter of 2009, as the Company's net interest margin expanded management chose to not engage in covered call option activity due to lower than acceptable security yields which resulted in the elimination of revenue from the Company's covered call strategy. An illustration of the past effectiveness of this strategy is shown in the Supplemental Financial Information section (see page titled "Net Interest Margin (Including Call Option Income)").
NON-INTEREST EXPENSE
Non-interest expense for the third quarter of 2009 totaled $92.6 million and increased approximately $29.4 million, or 46%, from the third quarter 2008 total of $63.2 million. On a year-to-date basis, non-interest expense for 2009 totaled $253.8 million and increased $62.5 million, or 33% over the same period in 2008.
The following table presents non-interest expense by category for the periods presented:
---------------------------------------------------------------------
Three Months Ended
September 30,
------------------ $ %
(Dollars in thousands) 2009 2008 Change Change
----------------------------- -------- -------- -------- --------
Salaries and employee benefits $ 48,088 $ 35,823 12,265 34
Equipment 4,069 4,050 19 1
Occupancy, net 5,884 5,666 218 4
Data processing 3,226 2,850 376 13
Advertising and marketing 1,488 1,343 145 11
Professional fees 4,089 2,195 1,894 86
Amortization of other
intangible assets 677 781 (104) (13)
Other:
Commissions - 3rd party
brokers 843 985 (142) (14)
Postage 1,139 1,067 72 7
Stationery and supplies 769 750 19 3
FDIC insurance 4,334 1,344 2,990 NM
OREO expenses, net 10,243 487 9,756 NM
Miscellaneous 7,714 5,858 1,856 32
-------- -------- -------- --------
Total other 25,042 10,491 14,551 139
-------- -------- -------- --------
Total non-interest expense $ 92,563 $ 63,199 29,364 46
-------- -------- -------- --------
---------------------------------------------------------------------
Nine Months Ended
September 30,
------------------ $ %
(Dollars in thousands) 2009 2008 Change Change
----------------------------- -------- -------- -------- --------
Salaries and employee benefits $138,923 $109,471 29,452 27
Equipment 12,022 12,025 (3) --
Occupancy, net 17,682 16,971 711 4
Data processing 9,578 8,566 1,012 12
Advertising and marketing 4,003 3,709 294 8
Professional fees 9,843 6,490 3,353 52
Amortization of other
intangible assets 2,040 2,348 (308) (13)
Other:
Commissions - 3rd party
brokers 2,338 2,967 (629) 21
Postage 3,466 3,108 358 12
Stationery and supplies 2,330 2,247 83 4
FDIC Insurance 16,468 3,919 12,549 NM
OREO expenses, net 13,671 1,382 12,289 NM
Miscellaneous 21,406 18,025 3,381 19
-------- -------- -------- --------
Total other 59,679 31,648 28,031 89
-------- -------- -------- --------
Total non-interest expense $253,770 $191,228 62,542 33
-------- -------- -------- --------
---------------------------------------------------------------------
NM = Not Meaningful
Salaries and employee benefits comprised 52% of total non-interest expense in the third quarter of 2009 and 57% in the third quarter of 2008. Salaries and employee benefits expense increased $12.3 million, or 34%, in the third quarter of 2009 compared to the third quarter of 2008 primarily as a result of higher commission and incentive compensation expenses related to mortgage banking activities and the incremental costs of the PMP staff. The higher commission and incentive compensation expense is primarily attributable to an increase in variable pay (commissions) of $4.7 million as a result of the higher mortgage loan origination volumes. On a year-to-date basis, salaries and employee benefits increased $29.5 million, or 27%, compared to the same period in 2008. Of this increase, $15.6 million was attributable to an increase in variable pay (commissions) as a result of the higher mortgage loan origination volumes, $11.6 million primarily related to acquisitions and the remainder being generally related to increases in base salaries.
Professional fees include legal, audit and tax fees, external loan review costs and normal regulatory exam assessments. Professional fees for the third quarter of 2009 were $4.1 million, an increase of $1.9 million, or 86%, compared to the same period in 2008. On a year-to-date basis, professional fees were $9.8 million, an increase of $3.4 million, or 52%, compared to the same period in 2008. These increases are primarily a result of increased legal costs related to non-performing assets and acquisition related activities.
FDIC insurance totaled $4.3 million in the third quarter of 2009, an increase of $3.0 million compared to $1.3 million in the third quarter of 2008. On a year-to-date basis, FDIC insurance totaled $16.5 million in 2009, an increase of $12.5 million compared to $3.9 million in 2008. The increase in FDIC insurance rates at the beginning of 2009 and growth in the assessable deposit base contributed to the significant increases in FDIC insurance costs for the third quarter of 2009 while the first nine months of 2009 were also negatively impacted by the industry-wide special assessment on financial institutions in the second quarter of 2009.
OREO expenses include all costs related with obtaining, maintaining and selling of other real estate owned properties. This expense totaled $10.2 million in the third quarter of 2009, an increase of $9.8 million compared to $487,000 in the third quarter of 2008. On a year-to-date basis, OREO expenses totaled $13.7 million in 2009, an increase of $12.3 million compared to $1.4 million in 2008.
Miscellaneous expense includes expenses such as ATM expenses, correspondent bank charges, directors' fees, telephone, travel and entertainment, corporate insurance, dues and subscriptions and lending origination costs that are not deferred. Miscellaneous expenses in the third quarter of 2009 increased $1.9 million, or 32%, compared to the same period in the prior year. On year-to-date basis, miscellaneous expenses increased $5.1 million, or 32%, compared to the same period in the prior year.
ASSET QUALITY
Allowance for Credit Losses
---------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
(Dollars in thousands) 2009 2008 2009 2008
--------------------------------- ---------- ---------- ----------
Allowance for loan
losses at beginning
of period $ 85,113 $ 57,633 $ 69,767 $ 50,389
Provision for
credit losses 91,193 24,129 129,329 42,985
Reclassification to
allowance for
lending-related
commitments (1,543) -- (1,543) --
Charge-offs:
------------
Commercial and
commercial real
estate loans 74,613 13,543 92,348 22,930
Home equity loans 1,727 28 3,034 53
Residential real
estate loans 422 786 682 1,004
Premium finance
receivables
- commercial 2,478 1,002 5,622 2,798
Premium finance
receivables - life
insurance -- -- -- --
Indirect consumer
loans 588 292 1,421 821
Consumer and other
loans 244 165 495 461
---------- ---------- ---------- ----------
Total charge-offs 80,072 15,816 103,602 28,067
---------- ---------- ---------- ----------
Recoveries:
----------
Commercial and
commercial real
estate loans 139 216 454 285
Home equity loans 1 -- 3 --
Residential real
estate loans -- -- -- --
Premium finance
receivables
- commercial 161 118 457 518
Premium finance
receivables - life
insurance -- -- -- --
Indirect consumer
loans 62 29 135 135
Consumer and other
loans 42 18 96 82
---------- ---------- ---------- ----------
Total recoveries 405 381 1,145 1,020
---------- ---------- ---------- ----------
Net charge-offs (79,667) (15,435) (102,457) (27,047)
---------- ---------- ---------- ----------
Allowance for loan
losses at period end $ 95,096 $ 66,327 $ 95,096 $ 66,327
---------- ---------- ---------- ----------
Allowance for unfunded
loan commitments at
period end $ 3,129 $ 493 $ 3,129 $ 493
---------- ---------- ---------- ---------
Allowance for credit
losses at period end $ 98,225 $ 66,820 $ 98,225 $ 66,820
---------- ---------- ---------- ---------
Credit discounts on
purchased loans 36,195 -- 36,195 --
---------- ---------- ---------- ----------
Total credit reserves $ 134,420 $ 66,820 $ 134,420 $ 66,820
---------- ---------- ---------- ----------
Annualized net
charge-offs by
category as a
percentage of its own
respective category's
average:
Commercial and
commercial real
estate loans 5.83% 1.15% 2.48% 0.67%
Home equity loans 0.75 0.01 0.44 0.01
Residential real
estate loans 0.33 0.92 0.19 0.39
Premium finance
receivables
- commercial 0.74 0.29 0.54 0.26
Premium finance
receivables - life
insurance -- -- -- --
Indirect consumer
loans 1.67 0.49 1.19 0.41
Consumer and other
loans 0.71 0.36 0.38 0.31
---------- ---------- ---------- ----------
Total loans, net of
unearned income 3.65% 0.84% 1.66% 0.50%
---------- ---------- ---------- ----------
Net charge-offs as a
percentage of the
provision for loan
losses 87.36% 63.97% 79.22% 62.92%
---------- ---------- ---------- ----------
Loans at period-end $8,275,257 $7,322,545
Allowance for loan
losses as a percentage
of loans at period-end 1.15% 0.91%
Allowance for credit
losses as a percentage
of loans at period-end 1.19% 0.91%
Total credit reserves
as a percentage of
loans (net of
discounts) at
period-end 1.62% 0.91%
---------------------------------------------------------------------
The allowance for credit losses is comprised of the allowance for loan losses and the allowance for lending-related commitments. The allowance for loan losses is a reserve against loan amounts that are actually funded and outstanding while the allowance for lending-related commitments relates to certain amounts that Wintrust is committed to lend but for which funds have not yet been disbursed. The allowance for lending-related commitments (separate liability account) represents the portion of the provision for credit losses that was associated with unfunded lending-related commitments. The provision for credit losses may contain both a component related to funded loans (provision for loan losses) and a component related to lending-related commitments (provision for unfunded loan commitments and letters of credit). Total credit reserves include the credit discounts on the purchased life insurance premium finance receivables.
The provision for credit losses totaled $91.2 million for the third quarter of 2009, $23.7 million in the second quarter of 2009 and $24.1 million for the third quarter of 2008. For the quarter ended September 30, 2009, net charge-offs totaled $79.7 million compared to $12.8 million in the second quarter of 2009 and $15.4 million recorded in the third quarter of 2008. On a ratio basis, annualized net charge-offs as a percentage of average loans were 3.65% in the third quarter of 2009, 0.63% in the second quarter of 2009, and 0.84% in the third quarter of 2008. On a year-to-date basis, the provision for credit losses totaled $129.3 million for 2009 and $43.0 million for the same period in 2008. Net charge-offs totaled $102.5 million in 2009 compared to $27.0 million recorded in 2008. On a ratio basis, annualized net charge-offs as a percentage of average loans were 1.66% in 2009 and 0.50% in 2008.
Management believes the allowance for loan losses is adequate to provide for inherent losses in the portfolio. There can be no assurances however, that future losses will not exceed the amounts provided for, thereby affecting future results of operations. The amount of future additions to the allowance for loan losses will be dependent upon management's assessment of the adequacy of the allowance based on its evaluation of economic conditions, changes in real estate values, interest rates, the regulatory environment, the level of past-due and non-performing loans, and other factors. The increase from the end of the prior quarter reflects the continued economic weaknesses in the Company's markets and is the result of an individual review of a significant number of individual credits as well as the overall risk factors impacting certain types of credits, specifically credits with residential development collateral valuation exposure.
The tables below shows the aging of the Company's loan portfolio at September 30, 2009 and June 30, 2009:
---------------------------------------------------------------------
As of
Sept. 30, 90+ days
2009 and 60-89 30-59
(Dollars in Non- still days days Total
thousands) Accrual accruing past due past due Current Loans
-------------------------------------- -------- ---------- ----------
Loan
Balances:
Commercial
and
commercial
real
estate
loans $166,726 $ 23,377 $ 31,957 $ 80,069 $4,733,730 $5,035,859
Home equity
loans 6,808 100 716 5,375 915,549 928,548
Residential
real
estate
loans 4,077 1,172 476 1,595 273,831 281,151
Premium
finance
receivables
-commercial 16,093 11,714 6,394 7,880 709,951 752,032
Premium
finance
receivables
- life
insurance -- -- -- -- 1,045,653 1,045,653
Indirect
consumer
loans 736 549 862 2,398 110,983 115,528
Consumer
and other
loans 282 25 556 304 115,319 116,486
-------- -------- -------- -------- ---------- ----------
Total
loans,
net of
unearned
income $194,722 $ 36,937 $ 40,961 $ 97,621 $7,905,016 $8,275,257
-------- -------- -------- -------- ---------- ----------
Aging as a
% of Loan
Balance:
Commercial
and
commercial
real estate
loans 3.3% 0.5% 0.6% 1.6% 94.0% 100.0%
Home equity
loans 0.7 -- 0.1 0.6 98.6 100.0
Residential
real estate
loans 1.5 0.4 0.2 0.6 97.4 100.0
Premium
finance
receivables
- commercial 2.1 1.6 0.9 1.0 94.4 100.0
Premium
finance
receivables
- life
insurance -- -- -- -- 100.0 100.0
Indirect
consumer
loans 0.6 0.5 0.7 2.1 96.1 100.0
Consumer
and other
loans 0.2 -- 0.5 0.3 99.0 100.0
-------- -------- -------- -------- ---------- ----------
Total
loans,
net of
unearned
income 2.4% 0.4% 0.5% 1.2% 95.5% 100.0%
-------- -------- -------- -------- ---------- ----------
---------------------------------------------------------------------
---------------------------------------------------------------------
As of
June 30, 90+ days
2009 and 60-89 30-59
(Dollars in Non- still days days Total
thousands) Accrual accruing past due past due Current Loans
-------------------------------------- -------- ---------- ----------
Loan
Balances:
Commercial
and
commercial
real
estate
loans $184,722 $ 7,519 $ 59,673 $ 34,870 $4,797,133 $5,083,917
Home
equity
loans 7,133 -- 414 1,934 902,918 912,399
Residential
real
estate
loans 4,792 1,447 161 429 272,516 279,345
Premium
finance
receivables
- commer-
cial 15,806 14,301 6,637 13,855 837,516 888,115
Premium
finance
receivables
- life
insurance -- -- -- -- 182,399 182,399
Indirect
consumer
loans 1,225 695 721 2,607 128,560 133,808
Consumer
and other
loans 238 341 213 821 113,880 115,493
-------- -------- -------- -------- ---------- ----------
Total
loans,
net of
unearned
income $213,916 $ 24,303 $ 67,819 $ 54,516 $7,234,922 $7,595,476
-------- -------- -------- -------- ---------- ----------
Aging as a
% of Loan
Balance:
Commercial
and
commercial
real
estate
loans 3.6% 0.1% 1.2% 0.7% 94.4% 100.0%
Home
equity
loans 0.8 -- -- 0.2 99.0 100.0
Residential
real
estate
loans 1.7 0.5 0.1 0.2 97.6 100.0
Premium
finance
receivables
- commercial 1.8 1.6 0.7 1.6 94.3 100.0
Premium
finance
receivables
- life
insurance -- -- -- -- 100.0 100.0
Indirect
consumer
loans 0.9 0.5 0.5 1.9 96.1 100.0
Consumer
and other
loans 0.2 0.3 0.2 0.7 98.6 100.0
-------- -------- -------- -------- ---------- ----------
Total
loans,
net of
unearned
income 2.8% 0.3% 0.9% 0.7% 95.3% 100.0%
-------- -------- -------- -------- ---------- ----------
---------------------------------------------------------------------
The amounts shown in the non-accrual and the 90+ days and still accruing columns represent the Company's total reported non-performing loans balance. As of September 30, 2009, only $41.0 million of all loans, or 0.5%, were 60 to 89 days past due and only $97.6 million, or 1.2%, were 30 to 59 days (or one payment) past due.
The majority of the commercial and commercial real estate loans shown as 60 to 89 days and 30 to 59 days past due are 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 loan portfolios continue to exhibit very good delinquency ratios. Home equity loans at September 30, 2009 that are current with regards to the contractual terms of the loan agreement represent 98.6% of the total home equity portfolio. Residential real estate loans at September 30, 2009 that are current with regards to the contractual terms of the loan agreements comprise 97.4% of total residential real estate loans outstanding.
The ratio of non-performing commercial premium finance receivables fluctuates throughout the year due to the nature and timing of canceled account collections from insurance carriers. Due to the nature of collateral for commercial premium finance receivables it customarily takes 60-150 days to convert the collateral into cash collections. Accordingly, the level of non-performing commercial premium finance receivables is not necessarily indicative of the loss inherent in the portfolio. In the event of default, Wintrust has the power to cancel the insurance policy and collect the unearned portion of the premium from the insurance carrier. In the event of cancellation, the cash returned in payment of the unearned premium by the insurer should generally be sufficient to cover the receivable balance, the interest and other charges due. Due to notification requirements and processing time by most insurance carriers, many receivables will become delinquent beyond 90 days while the insurer is processing the return of the unearned premium. Management continues to accrue interest until maturity as the unearned premium is ordinarily sufficient to pay-off the outstanding balance and contractual interest due.
Non-performing Loans
The following table sets forth Wintrust's non-performing loans at the dates indicated.
---------------------------------------------------------------------
Sept. 30, June 30, Dec. 31, Sept. 30,
(Dollars in thousands) 2009 2009 2008 2008
---------------------------------------------------------------------
Loans past due greater than
90 days and still accruing:
Residential real estate
and home equity $ 1,272 $ 1,447 $ 617 $ 1,084
Commercial, consumer and other 23,402 7,860 14,750 6,100
Premium finance receivables
- commercial 11,714 14,301 9,339 5,903
Premium finance receivables
- life insurance -- -- -- --
Indirect consumer loans 549 695 679 877
-------- -------- -------- --------
Total past due greater than
90 days and still accruing 36,937 24,303 25,385 13,964
-------- -------- -------- --------
Non-accrual loans:
Residential real estate
and home equity 10,885 11,925 6,528 6,214
Commercial, consumer and other 167,008 184,960 91,814 81,997
Premium finance receivables
- commercial 16,093 15,806 11,454 10,239
Premium finance receivables
- life insurance -- -- -- --
Indirect consumer loans 736 1,225 913 627
-------- -------- -------- --------
Total non-accrual 194,722 213,916 110,709 99,077
-------- -------- -------- --------
Total non-performing loans:
Residential real estate
and home equity 12,157 13,372 7,145 7,298
Commercial, consumer and other 190,410 192,820 106,564 88,097
Premium finance receivables
- commercial 27,807 30,107 20,793 16,142
Premium finance receivables
- life insurance -- -- -- --
Indirect consumer loans 1,285 1,920 1,592 1,504
-------- -------- -------- --------
Total non-performing loans $231,659 238,219 $136,094 $113,041
-------- -------- -------- --------
Total non-performing loans by
category as a percent of its
own respective category's
period-end balance:
Residential real estate and
home equity 1.00% 1.12% 0.62% 0.67%
Commercial, consumer and other 3.70 3.71 2.16 1.82
Premium finance receivables
- commercial 3.70 3.39 1.67 1.39
Premium finance receivables
- life insurance -- -- -- --
Indirect consumer loans 1.11 1.44 0.90 0.75
-------- -------- -------- --------
Total non-performing loans 2.80% 3.14% 1.79% 1.54%
-------- -------- -------- --------
Allowance for loan losses as
a percentage of
non-performing loans 41.05% 35.73% 51.26% 58.67%
-------- -------- -------- --------
---------------------------------------------------------------------
Non-performing Residential Real Estate and Home Equity
The non-performing residential real estate and home equity loans totaled $12.2 million as of September 30, 2009. The balance increased $4.9 million from September 30, 2008 and decreased $1.2 million from June 30, 2009. The September 30, 2009 non-performing balance is comprised of $5.3 million of residential real estate (25 individual credits) and $6.9 million of home equity loans (25 individual credits). On average, this is approximately 3 non-performing residential real estate loans and home equity loans per chartered bank within the Company. The Company believes control and collection of these loans is very manageable. At this time, management believes reserves are adequate to absorb inherent losses that may occur upon the ultimate resolution of these credits.
Non-performing Commercial, Consumer and Other
The commercial, consumer and other non-performing loan category totaled $190.4 million as of September 30, 2009 compared to $192.8 million as of June 30, 2009 and $88.1 million as of September 30, 2008.
Management is pursuing the resolution of all credits in this category. At this time, management believes reserves are adequate to absorb inherent losses that may occur upon the ultimate resolution of these credits.
Non-performing Commercial Premium Finance Receivables
The table below presents the level of non-performing property and casualty premium finance receivables as of September 30, 2009 and 2008, and the amount of net charge-offs for the quarters then ended.
---------------------------------------------------------------------
September 30, September 30,
(Dollars in thousands) 2009 2008
------------- -------------
Non-performing premium finance
receivables-commercial $ 27,807 $ 16,142
- as a percent of premium finance
receivables-commercial outstanding 3.70% 1.39%
Net charge-offs of premium finance
receivables-commercial $ 2,317 $ 884
- annualized as a percent of average
premium finance receivables-commercial 0.74% 0.29%
---------------------------------------------------------------------
Fluctuations in this category may occur due to timing and nature of account collections from insurance carriers. The Company's underwriting standards, regardless of the condition of the economy, have remained consistent. We anticipate that net charge-offs and non-performing asset levels in the near term will continue to be at levels that are within acceptable operating ranges for this category of loans. Management is comfortable with administering the collections at this level of non-performing property and casualty premium finance receivables.
Non-performing Indirect Consumer Loans
Total non-performing indirect consumer loans were $1.3 million at September 30, 2009, compared to $1.9 million at June 30, 2009 and $1.5 million at September 30, 2008. The ratio of these non-performing loans to total indirect consumer loans was 1.11% at September 30, 2009 compared to 1.44% at June 30, 2009 and 0.75% at September 30, 2008. As noted in the Allowance for Credit Losses table, net charge-offs as a percent of total indirect consumer loans were 1.67% for the quarter ended September 30, 2009 compared to 0.49% in the same period in 2008. Given the 42% decline in outstanding balances in the indirect consumer loan portfolio since September 30, 2008, the 1.67% charge-off ratio represents only $526,000 of total net charge-offs in the third quarter of 2009.
At the beginning of the third quarter of 2008, the Company ceased the origination of indirect automobile loans. This niche business served the Company well over the past 12 years in helping de novo banks quickly, and profitably, grow into their physical structures. Competitive pricing pressures significantly reduced the long-term potential profitably of this niche business. Given the current economic environment and the retirement of the founder of this niche business, exiting the origination of this business was deemed to be in the best interest of the Company. The Company will continue to service its existing portfolio during the duration of the credits.
Other Real Estate Owned
The table below presents a summary of other real estate owned as of September 30, 2009 and shows the changes in the balance from June 30, 2009 for each property type:
---------------------------------------------------------------------
Residential
Residential Real Estate
Real Estate Development
------------------ -------------------
(Dollars in thousands) $ # R $ # R
------------------------------ ------------------ -------------------
Balance at June 30, 2009 $ 7,873 6 6 $ 28,908 51 11
------------------ -------------------
Transfers at fair value 3,533 10 7 7,649 10 7
Fair value adjustments (121) -- -- (7,197) -- --
Resolved (3,272) (5) (4) (5,526) (6) (6)
------------------ -------------------
Balance at September 30, 2009 $ 8,013 11 9 $ 23,834 77 12
------------------ -------------------
Commercial Total
Real Estate Balance
------------------ -------------------
(Dollars in thousands) $ # R $ # R
------------------------------ ------------------ -------------------
Balance at June 30, 2009 $ 4,657 8 5 $ 41,438 65 22
------------------ -------------------
Transfers at fair value 5,954 6 6 17,136 48 20
Fair value adjustments (209) -- -- (7,527) -- --
Resolved (1,610) (2) (2) (10,408) (13) (12)
------------------ -------------------
Balance at September 30, 2009 $ 8,792 12 9 $ 40,639 100 30
------------------ -------------------
Balance at September 30, 2008 $ 12,523
--------
$ - balance
# - number of properties
R - number of relationships
---------------------------------------------------------------------
WINTRUST SUBSIDIARIES AND LOCATIONS
Wintrust is a financial holding company whose common stock is traded on the Nasdaq Stock Market(R) (Nasdaq:WTFC). Its 15 community bank subsidiaries are: Lake Forest Bank & Trust Company, Hinsdale Bank & Trust Company, North Shore Community Bank & Trust Company in Wilmette, Libertyville Bank & Trust Company, Barrington Bank & Trust Company, Crystal Lake Bank & Trust Company, Northbrook Bank & Trust Company, Advantage National Bank in Elk Grove Village, Village Bank & Trust in Arlington Heights, Beverly Bank & Trust Company in Chicago, Wheaton Bank & Trust Company, State Bank of The Lakes in Antioch, Old Plank Trail Community Bank, N.A. in New Lenox, St. Charles Bank & Trust Company and Town Bank in Hartland, Wisconsin. The banks also operate facilities in Illinois in Algonquin, Bloomingdale, Buffalo Grove, Cary, Chicago, Clarendon Hills, Deerfield, Downers Grove, Frankfort, Geneva, Glencoe, Glen Ellyn, Gurnee, Grayslake, Highland Park, Highwood, Hoffman Estates, Island Lake, Lake Bluff, Lake Villa, Lindenhurst, McHenry, Mokena, Mundelein, North Chicago, Northfield, Palatine, Prospect Heights, Ravinia, Riverside, Roselle, Sauganash, Skokie, Spring Grove, Vernon Hills, Wauconda, Western Springs, Willowbrook and Winnetka, and in Delafield, Elm Grove, Madison and Wales, Wisconsin.
Additionally, the Company operates various non-bank subsidiaries. First Insurance Funding Corporation, one of the largest insurance premium finance companies operating in the United States, serves commercial and life insurance loan customers throughout the country. Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States. Wintrust Mortgage Corporation (formerly known as WestAmerica Mortgage Company) engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices. Wayne Hummer Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest. Wayne Hummer Asset Management Company provides money management services and advisory services to individual accounts. Advanced Investment Partners, LLC is an investment management firm specializing in the active management of domestic equity investment strategies. Wayne Hummer Trust Company, a trust subsidiary, allows Wintrust to service customers' trust and investment needs at each banking location. Wintrust Information Technology Services Company provides information technology support, item capture and statement preparation services to the Wintrust subsidiaries.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information in this document can be identified through the use of words such as "may," "will," "intend," "plan," "project," "expect," "anticipate," "should," "would," "believe," "estimate," "contemplate," "possible," and "point." Forward-looking statements and information are not historical facts, are premised on many factors, 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, which may include, but are not limited to, those listed below and the Risk Factors discussed in Item 1A on page 20 of the Company's 2008 Form 10-K. 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 projected growth, anticipated improvements in earnings, earnings per share and other financial performance measures, and management's long-term performance goals, as well as statements relating to the anticipated effects on financial results of condition from expected developments or events, the Company's business and growth strategies, including anticipated internal growth, plans to form additional de novo banks and to open new branch offices, and to pursue additional potential development or acquisitions of banks, wealth management entities or specialty finance businesses. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:
* 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). * Changes in the interest rate environment, which may influence, among other things, the growth of loans and deposits, the quality of the Company's loan portfolio, the pricing of loans and deposits and net interest income. * The extent of defaults and losses on the Company's loan portfolio, which may require further increases in its allowance for credit losses. * Distressed global credit and capital markets. * The ability of the Company to obtain liquidity and income from the sale of property and casualty premium finance receivables in the future and the unique collection and delinquency risks associated with such loans. * Legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies. * Failure to identify and complete acquisitions in the future or unexpected difficulties or unanticipated developments related to the integration of acquired entities with the Company. * Significant litigation involving the Company. * Changes in general economic conditions in the markets in which the Company operates. * The ability of the Company to receive dividends from its subsidiaries. * Unexpected difficulties or unanticipated developments related to the Company's strategy of de novo bank formations and openings. De novo banks typically require over 13 months of operations before becoming profitable, due to the impact of organizational and overhead expenses, the startup phase of generating deposits and the time lag typically involved in redeploying deposits into attractively priced loans and other higher yielding earning assets. * The loss of customers as a result of technological changes allowing consumers to complete their financial transactions without the use of a bank. * The ability of the Company to attract and retain senior management experienced in the banking and financial services industries. * The risk that the terms of the U.S. Treasury Department's Capital Purchase Program could change. * The effect of continued margin pressure on the Company's financial results. * Additional deterioration in asset quality. * Additional charges related to asset impairments. * The other risk factors set forth in the Company's filings with the Securities and Exchange Commission.
Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by or on behalf of Wintrust. Any such statement speaks only as of the date the statement was made or as of such date that may be referenced within the statement. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this press release. Persons are advised, however, to consult further disclosures management makes on related subjects in its reports filed with the Securities and Exchange Commission and in its press releases.
CONFERENCE CALL, WEB CAST AND REPLAY
The Company will hold a conference call at 1:00 p.m. (CDT) Tuesday, October 27, 2009 regarding third quarter 2009 results. Individuals interested in listening should call (877) 795-3635 and enter Conference ID #9807043. A simultaneous audio-only web cast and replay of the conference call may be accessed via the Company's web site at (http://www.wintrust.com), Investor News and Events, Presentations & Conference Calls. The text of the third quarter 2009 earnings press release will be available on the home page of the Company's web site at (http://www.wintrust.com) and at the Investor News and Events, Press Releases link on its website.
WINTRUST FINANCIAL CORPORATION
Supplemental Financial Information
5 Quarter Trends
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Selected Financial Highlights - 5 Quarter Trends
---------------------------------------------------------------------
(Dollars in
thousands,
except per
share data)
Selected
Financial
Condition Three Months Ended
Data -----------------------------------------------------------
(at end of Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
period): 2009 2009 2009 2008 2008
----------- ----------- ----------- ----------- -----------
Total
assets $12,136,021 $11,359,536 $10,818,941 $10,658,326 $ 9,864,920
Total
loans 8,275,257 7,595,476 7,841,447 7,621,069 7,322,545
Total
deposits 9,847,163 9,191,332 8,625,977 8,376,750 7,829,527
Junior
subord
-inated
debentures 249,493 249,493 249,502 249,515 249,537
Total
share
-holders'
equity 1,106,082 1,065,076 1,063,227 1,066,572 809,331
---------------------------------------------------------------------
Selected
Statements
of Income
Data:
Net
interest
income $ 87,663 $ 72,497 $ 64,782 $ 62,745 $ 60,680
Net
revenue
(1) 238,343 117,949 101,209 82,117 82,810
Income
(loss)
before
taxes 54,587 10,041 9,774 2,727 (4,518)
Net income
(loss) 31,995 6,549 6,358 1,955 (2,448)
Net income
(loss)
per
common
share
- Basic 1.14 0.06 0.06 0.02 (0.13)
Net income
(loss)
per
common
share
- Diluted 1.07 0.06 0.06 0.02 (0.13)
---------------------------------------------------------------------
Selected
Financial
Ratios and
Other Data:
Performance
Ratios:
Net
interest
margin (2) 3.25% 2.91% 2.71% 2.78% 2.74%
Non
-interest
income to
average
assets 5.07 1.65 1.38 0.77 0.89
Non
-interest
expense to
average
assets 3.11 3.06 2.91 2.57 2.54
Net
overhead
ratio (3) (1.95) 1.41 1.53 1.80 1.65
Efficiency
ratio (2)
(4) 38.69 72.02 74.10 75.22 76.64
Return on
average
assets 1.08 0.24 0.24 0.08 (0.10)
Return on
average
equity 13.79 0.79 0.71 0.22 (1.59)
Average
total
assets $11,797,520 $11,037,468 $10,724,966 $10,060,206 $ 9,881,554
Average
total
share
-holders'
equity 1,070,095 1,067,395 1,061,654 846,982 765,892
Average
loans to
average
deposits
ratio 90.5% 92.8% 93.4% 93.5% 94.1%
---------------------------------------------------------------------
Common
Share Data
at end of
period:
Market
price per
common
share $ 27.96 $ 16.08 $ 12.30 $ 20.57 $ 29.35
Book value
per
common
share $ 34.10 $ 32.59 $ 32.64 $ 33.03 $ 32.07
Common
shares
outstand
-ing 24,103,068 23,979,804 23,910,983 23,756,674 23,693,799
Other Data
at end of
period:
Leverage
ratio (5) 7.7% 7.9% 8.0% 8.6% 8.1%
Tier 1
capital
to risk
-weighted
assets (5) 8.8% 8.9% 9.1% 9.5% 9.2%
Total
capital
to risk
-weighted
assets (5) 12.1% 12.3% 12.6% 13.1% 10.7%
Allowance
for credit
losses
(6) $ 98,225 $ 86,699 $ 75,834 $ 71,352 $ 66,820
Credit
discounts
on
purchased
loans (7) 36,195 -- -- -- --
Total
credit
reserves 134,420 86,699 75,834 71,352 66,820
Non-
perform-
ing loans 231,659 238,219 175,866 136,094 113,041
Allowance
for credit
losses to
total
loans (6) 1.19% 1.14% 0.97% 0.94% 0.91%
Total
credit
reserves
to total
loans (8) 1.62% 1.14% 0.97% 0.94% 0.91%
Non-
perform-
ing loans
to total
loans 2.80% 3.14% 2.24% 1.79% 1.54%
Number of:
Bank
subsid
-iaries 15 15 15 15 15
Non-bank
subsid
-iaries 8 8 7 7 8
Banking
offices 78 79 79 79 79
---------------------------------------------------------------------
(1) Net revenue includes net interest income and non-interest income.
(2) See "Supplemental Financial Measures/Ratios" for additional
information on this performance measure/ratio.
(3) The net overhead ratio is calculated by netting total
non-interest expense and total non-interest income, annualizing
this amount, and dividing by that period's total average assets.
A lower ratio indicates a higher degree of efficiency.
(4) The efficiency ratio is calculated by dividing total non-interest
expense by tax-equivalent net revenue (less securities gains or
losses). A lower ratio indicates more efficient revenue
generation.
(5) Capital ratios for current quarter-end are estimated.
(6) The allowance for credit losses includes both the allowance
for loan losses and the allowance for lending-related
commitments.
(7) Represents the remaining non-accretable portion of the discounts
on the purchased life insurance premium finance loans that were
purchased.
(8) The sum of allowance for credit losses and credit discounts
on purchased loans divided by total loans outstanding plus the
credit discounts on purchased loans.
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Consolidated Statements of Condition - 5 Quarter Trends
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
---------------------------------------------------------------------
Assets
Cash and
due from
banks $ 128,898 $ 122,382 $ 122,207 $ 219,794 $ 158,201
Federal
funds
sold and
secur-
ities
purchased
under
resale
agree-
ments 22,863 41,450 98,454 226,110 35,181
Interest-
bearing
deposits
with
banks 1,168,362 655,759 266,512 123,009 4,686
Available
-for-
sale
secur-
ities,
at fair
value 1,434,248 1,267,410 1,413,576 784,673 1,469,500
Trading
account
secur-
ities 29,204 22,973 13,815 4,399 2,243
Brokerage
customer
receiv-
ables 19,441 17,701 15,850 17,901 19,436
Loans
held-for
-sale 193,255 821,100 218,707 61,116 68,398
Loans,
net of
unearned
income 8,275,257 7,595,476 7,841,447 7,621,069 7,322,545
Less:
Allow-
ance
for
loan
losses 95,096 85,113 74,248 69,767 66,327
---------------------------------------------------------------------
Net
loans 8,180,161 7,510,363 7,767,199 7,551,302 7,256,218
Premises
and
equip-
ment,
net 352,890 350,447 349,245 349,875 349,388
Accrued
interest
receiv-
able and
other
assets 315,806 260,182 263,145 240,664 209,970
Trade
date
secur-
ities
receiv-
able -- -- -- 788,565 --
Goodwill 276,525 276,525 276,310 276,310 276,310
Other
intang-
ible
assets 14,368 13,244 13,921 14,608 15,389
---------------------------------------------------------------------
Total
assets $12,136,021 $11,359,536 $10,818,941 $10,658,326 $ 9,864,920
---------------------------------------------------------------------
Liabili-
ties and
Share-
holders'
Equity
Deposits:
Non-
interest
bearing $ 841,668 $ 793,173 $ 745,194 $ 757,844 $ 717,587
Interest
bearing 9,005,495 8,398,159 7,880,783 7,618,906 7,111,940
---------------------------------------------------------------------
Total
depos-
its 9,847,163 9,191,332 8,625,977 8,376,750 7,829,527
Notes
payable 1,000 1,000 1,000 1,000 42,025
Federal
Home
Loan
Bank
advances 433,983 435,980 435,981 435,981 438,983
Other
borrow-
ings 252,071 244,286 250,488 336,764 296,391
Subordin-
ated
notes 65,000 65,000 70,000 70,000 75,000
Junior
subordin-
ated
debentures 249,493 249,493 249,502 249,515 249,537
Trade
date
secur-
ities
payable -- -- 7,170 -- 2,000
Accrued
interest
payable
and
other
liabili-
ties 181,229 107,369 115,596 121,744 122,126
---------------------------------------------------------------------
Total
liabili-
ties 11,029,939 10,294,460 9,755,714 9,591,754 9,055,589
---------------------------------------------------------------------
Share-
holders'
equity:
Preferred
stock 284,061 283,518 282,662 281,873 49,379
Common
stock 26,965 26,835 26,766 26,611 26,548
Surplus 580,988 577,473 575,166 571,887 551,453
Treasury
stock (122,437) (122,302) (122,302) (122,290) (122,290)
Retained
earnings 342,873 317,713 315,855 318,793 318,066
Accum-
ulated
other
compre-
hensive
loss (6,368) (18,161) (14,920) (10,302) (13,825)
---------------------------------------------------------------------
Total
share-
hold-
ers'
equity 1,106,082 1,065,076 1,063,227 1,066,572 809,331
---------------------------------------------------------------------
Total
liabil-
ities
and
share-
hold-
ers'
equity $12,136,021 $11,359,536 $10,818,941 $10,658,326 $ 9,864,920
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Consolidated Statements of Income (Unaudited) - 5 Quarter Trends
Three Months Ended
---------------------------------------------------------------------
(In thousands,
except per share Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
data) 2009 2009 2009 2008 2008
---------------------------------------------------------------------
Interest income
Interest and fees
on loans $126,448 $110,302 $106,887 $107,598 $108,495
Interest bearing
deposits with
banks 778 767 660 125 27
Federal funds sold
and securities
purchased under
resale agreements 106 66 61 30 197
Securities 14,106 15,819 14,327 17,868 17,599
Trading account
securities 7 55 24 33 23
Brokerage customer
receivables 132 120 120 164 228
---------------------------------------------------------------------
Total interest
income 141,577 127,129 122,079 125,818 126,569
---------------------------------------------------------------------
Interest expense
Interest on
deposits 42,806 43,502 45,953 50,740 53,405
Interest on
Federal Home Loan
Bank advances 4,536 4,503 4,453 4,570 4,583
Interest on notes
payable and other
borrowings 1,779 1,752 1,870 2,387 2,661
Interest on
subordinated notes 333 428 580 770 786
Interest on junior
subordinated
debentures 4,460 4,447 4,441 4,606 4,454
---------------------------------------------------------------------
Total interest
expense 53,914 54,632 57,297 63,073 65,889
---------------------------------------------------------------------
Net interest income 87,663 72,497 64,782 62,745 60,680
Provision for
credit losses 91,193 23,663 14,473 14,456 24,129
---------------------------------------------------------------------
Net interest income
after provision
for credit losses (3,530) 48,834 50,309 48,289 36,551
---------------------------------------------------------------------
Non-interest income
Wealth management 7,501 6,883 5,926 6,705 7,044
Mortgage banking 13,204 22,596 16,232 3,138 4,488
Service charges on
deposit accounts 3,447 3,183 2,970 2,684 2,674
Gain on sales of
commercial
premium
finance
receivables 3,629 196 322 361 456
Gains (losses) on
available-for-
sale securities,
net (412) 1,540 (2,038) (3,618) 920
Gain on bargain
purchase 113,062 -- -- -- --
Other 10,249 11,054 13,015 10,102 6,548
---------------------------------------------------------------------
Total non-
interest income 150,680 45,452 36,427 19,372 22,130
---------------------------------------------------------------------
Non-interest
expense
Salaries and
employee benefits 48,088 46,015 44,820 35,616 35,823
Equipment 4,069 4,015 3,938 4,190 4,050
Occupancy, net 5,884 5,608 6,190 5,947 5,666
Data processing 3,226 3,216 3,136 3,007 2,850
Advertising and
marketing 1,488 1,420 1,095 1,642 1,343
Professional fees 4,089 2,871 2,883 2,334 2,195
Amortization of
other intangible
assets 677 676 687 781 781
Other 25,042 20,424 14,213 11,417 10,491
---------------------------------------------------------------------
Total non-
interest expense 92,563 84,245 76,962 64,934 63,199
---------------------------------------------------------------------
Income (loss)
before income
taxes 54,587 10,041 9,774 2,727 (4,518)
Income tax expense
(benefit) 22,592 3,492 3,416 772 (2,070)
---------------------------------------------------------------------
Net income (loss) $ 31,995 $ 6,549 $ 6,358 $ 1,955 $ (2,448)
---------------------------------------------------------------------
Preferred stock
dividends and
discount accretion 4,668 5,000 5,000 1,532 544
---------------------------------------------------------------------
Net income (loss)
applicable to
common shares $ 27,327 $ 1,549 $ 1,358 $ 423 $ (2,992)
---------------------------------------------------------------------
Net income (loss)
per common share -
Basic $ 1.14 $ 0.06 $ 0.06 $ 0.02 $ (0.13)
---------------------------------------------------------------------
Net income (loss)
per common share -
Diluted $ 1.07 $ 0.06 $ 0.06 $ 0.02 $ (0.13)
---------------------------------------------------------------------
Cash dividends
declared per
common share $ 0.09 $ -- $ 0.18 $ -- $ 0.18
---------------------------------------------------------------------
Weighted average
common shares
outstanding 24,052 23,964 23,855 23,726 23,644
Dilutive potential
common shares 2,493 300 221 447 --
---------------------------------------------------------------------
Average common
shares and
dilutive common
shares 26,545 24,264 24,076 24,173 23,644
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Period End Loan Balances - 5 Quarter Trends
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
------------------------- ---------- ---------- ---------- ----------
Balance:
--------
Commercial and
commercial
real estate $5,035,859 $5,083,917 $4,933,355 $4,778,664 $4,673,682
Home equity 928,548 912,399 920,412 896,438 837,127
Residential
real estate 281,151 279,345 280,808 262,908 247,203
Premium
finance
receivables -
commercial (2) 752,032 888,115 1,287,261 1,243,858 1,164,256
Premium
finance
receivables
- life
insurance 1,045,653 182,399 130,895 102,728 41,120
Indirect
consumer
loans (1) 115,528 133,808 154,257 175,955 199,845
Other Loans 116,486 115,493 134,459 160,518 159,312
---------- ---------- ---------- ---------- ----------
Total loans,
net of
unearned
income $8,275,257 $7,595,476 $7,841,447 $7,621,069 $7,322,545
---------- ---------- ---------- ---------- ----------
Mix:
----
Commercial and
commercial
real estate 61% 67% 63% 63% 64%
Home equity 11 12 12 12 11
Residential
real estate 4 3 4 3 4
Premium
finance
receivables -
commercial (2) 9 12 16 16 16
Premium
finance
receivables
- life
insurance 13 2 2 2 1
Indirect
consumer
loans (1) 1 2 2 2 3
Other loans 1 2 1 2 1
---------- ---------- ---------- ---------- ----------
Total loans,
net of
unearned
income 100% 100% 100% 100% 100%
---------- ---------- ---------- ---------- ----------
(1) Includes autos, boats, snowmobiles and other indirect consumer
loans.
(2) Excludes $520 million of property and casualty premium finance
receivables reclassified to held-for-sale in the second quarter
of 2009.
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Period End Deposit Balances - 5 Quarter Trends
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
------------------------- ---------- ---------- ---------- ----------
Balance:
--------
Non-interest
bearing $ 841,668 $ 793,173 $ 745,194 $ 757,844 $ 717,587
NOW 1,245,689 1,072,255 1,064,663 1,040,105 1,012,393
Wealth
management
deposits (1) 935,740 919,968 833,291 716,178 583,715
Money market 1,468,228 1,379,164 1,313,157 1,124,068 997,638
Savings 513,239 461,377 406,376 337,808 317,108
Time
certificates
of deposit 4,842,599 4,565,395 4,263,296 4,400,747 4,201,086
---------- ---------- ---------- ---------- ----------
Total
deposits $9,847,163 $9,191,332 $8,625,977 $8,376,750 $7,829,527
---------- ---------- ---------- ---------- ----------
Mix:
----
Non-interest
bearing 9% 9% 9% 9% 9%
NOW 13 11 12 12 13
Wealth
management
deposits (1) 9 10 10 9 7
Money market 15 15 15 13 13
Savings 5 5 5 4 4
Time
certificates
of deposit 49 50 49 53 54
---------- ---------- ---------- ---------- ----------
Total
deposits 100% 100% 100% 100% 100%
---------- ---------- ---------- ---------- ----------
(1) Represents deposit balances at the Company's subsidiary banks
from brokerage customers of Wayne Hummer Investments, the trust
and asset management customers of Wayne Hummer Trust Company and
brokerage customers from unaffiliated companies which have been
placed into deposit accounts of the Banks.
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Quarterly Average Balances - 5 Quarter Trends
Three Months Ended
-----------------------------------------------------------
(Dollars
in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
--------- ----------- ----------- ----------- ----------- -----------
Liquidity
manage-
ment
assets $ 2,078,330 $ 1,851,179 $ 1,839,161 $ 1,607,707 $ 1,544,465
Other
earning
assets 24,874 22,694 22,128 21,630 21,687
Loans,
net of
unearned
income 8,665,281 8,212,572 7,924,849 7,455,418 7,343,845
----------- ----------- ----------- ----------- -----------
Total
earning
assets $10,768,485 $10,086,445 $ 9,786,138 $ 9,084,755 $ 8,909,997
----------- ----------- ----------- ----------- -----------
Allowance
for loan
losses (85,300) (72,990) (72,044) (67,342) (57,751)
Cash and
due from
banks 109,645 118,402 107,550 127,700 133,527
Other
assets 1,004,690 905,611 903,322 915,093 895,781
----------- ----------- ----------- ----------- -----------
Total
assets $11,797,520 $11,037,468 $10,724,966 $10,060,206 $ 9,881,554
=========== =========== =========== =========== ===========
Interest-
bearing
deposits $ 8,799,578 $ 8,097,096 $ 7,747,879 $ 7,271,505 $ 7,127,065
Federal
Home Loan
Bank
advances 434,134 435,983 435,982 439,432 438,983
Notes
payable
and other
borrow-
ings 245,352 249,123 301,894 379,914 398,911
Sub-
ordinated
notes 65,000 66,648 70,000 73,364 75,000
Junior
sub-
ordinated
deben-
tures 249,493 249,494 249,506 249,520 249,552
----------- ----------- ----------- ----------- -----------
Total
interest
-bearing
liabili-
ties $ 9,793,557 $ 9,098,344 $ 8,805,261 $ 8,413,735 $ 8,289,511
----------- ----------- ----------- ----------- -----------
Non-
interest
bearing
deposits 775,202 754,479 733,911 705,616 678,651
Other
liabili-
ties 158,666 117,250 124,140 93,873 147,500
Equity 1,070,095 1,067,395 1,061,654 846,982 765,892
----------- ----------- ----------- ----------- -----------
Total
liabili-
ties and
share-
holders'
equity $11,797,520 $11,037,468 $10,724,966 $10,060,206 $ 9,881,554
=========== =========== =========== =========== ===========
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin - 5 Quarter Trends
Three Months Ended
------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
Yield earned on: 2009 2009 2009 2008 2008
---------------- --------- --------- --------- --------- ---------
Liquidity
management assets 2.94% 3.71% 3.42% 4.57% 4.70%
Other earning
assets 2.36 3.27 2.85 3.94 4.81
Loans, net of
unearned income 5.79 5.39 5.48 5.75 5.89
--------- --------- --------- --------- ---------
Total earning
assets 5.24% 5.08% 5.08% 5.54% 5.68%
--------- --------- --------- --------- ---------
Rate paid on:
-------------
Interest-bearing
deposits 1.93% 2.15% 2.41% 2.78% 2.98%
Federal Home Loan
Bank advances 4.14 4.14 4.14 4.14 4.15
Notes payable and
other borrowings 2.88 2.82 2.51 2.50 2.65
Subordinated notes 2.01 2.54 3.31 4.11 4.10
Junior subordinated
debentures 6.99 7.05 7.12 7.22 6.98
--------- --------- --------- --------- ---------
Total interest-
bearing
liabilities 2.18% 2.41% 2.64% 2.98% 3.16%
--------- --------- --------- --------- ---------
Rate Spread 3.06% 2.67% 2.44% 2.56% 2.52%
Net Free Funds
Contribution 0.19 0.24 0.27 0.22 0.22
--------- --------- --------- --------- ---------
Net Interest Margin 3.25% 2.91% 2.71% 2.78% 2.74%
--------- --------- --------- --------- ---------
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin (Including Call Option Income) - 5 Quarter Trends
Three Months Ended
------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2009 2009 2009 2008 2008
------------------------------------------------
Net Interest Income $ 88,178 $ 73,067 $ 65,402 $ 63,340 $ 61,257
Call Option Income -- -- 1,998 7,438 2,723
-------- -------- -------- -------- --------
Net Interest Income
Including Call
Option Income $ 88,178 $ 73,067 $ 67,400 $ 70,778 $ 63,980
======== ======== ======== ======== ========
Yield on Earning
Assets 5.24% 5.08% 5.08% 5.54% 5.68%
Rate on Interest-
bearing Liabilities 2.18 2.41 2.64 2.98 3.16
-------- -------- -------- -------- --------
Rate Spread 3.06% 2.67% 2.44% 2.56% 2.52%
Net Free Funds
Contribution 0.19 0.24 0.27 0.22 0.22
-------- -------- -------- -------- --------
Net Interest Margin 3.25% 2.91% 2.71% 2.78% 2.74%
-------- -------- -------- -------- --------
Call Option Income -- -- 0.08 0.33 0.12
-------- -------- -------- -------- --------
Net Interest Margin
including Call
Option Income 3.25% 2.91% 2.79% 3.11% 2.86%
-------- -------- -------- -------- --------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin (Including Call Option Income) - YTD Trends
Nine
Months
Ended Years Ended
Sept. 30, December 31,
------------------------------------------------
2009 2008 2007 2006 2005
------------------------------------------------
Net Interest Income $226,647 $247,054 $264,777 $250,507 $218,086
Call Option Income 1,998 29,024 2,628 3,157 11,434
-------- -------- -------- -------- --------
Net Interest Income
Including Call
Option Income $228,645 $276,078 $267,405 $253,664 $229,520
======== ======== ======== ======== ========
Yield on Earning
Assets 5.15% 5.88% 7.21% 6.91% 5.92%
Rate on Interest-
bearing
Liabilities 2.40 3.31 4.39 4.11 3.00
-------- -------- -------- -------- --------
Rate Spread 2.75% 2.57% 2.82% 2.80% 2.92%
Net Free Funds
Contribution 0.23 0.24 0.29 0.30 0.24
-------- -------- -------- -------- --------
Net Interest Margin 2.98% 2.81% 3.11% 3.10% 3.16%
-------- -------- -------- -------- --------
Call Option Income 0.03 0.33 0.03 0.04 0.17
-------- -------- -------- -------- --------
Net Interest Margin
including Call
Option Income 3.01% 3.14% 3.14% 3.14% 3.33%
-------- -------- -------- -------- --------
--------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Non-Interest Income - 5 Quarter Trends
Three Months Ended
-------------------------------------------------
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
-------------------- -------- -------- -------- -------- --------
Brokerage $ 4,593 $ 4,280 $ 3,819 $ 4,310 $ 4,354
Trust and asset
management 2,908 2,603 2,107 2,395 2,690
-------- -------- -------- -------- --------
Total wealth
management 7,501 6,883 5,926 6,705 7,044
-------- -------- -------- -------- --------
Mortgage banking 13,204 22,596 16,232 3,138 4,488
Service charges on
deposit accounts 3,447 3,183 2,970 2,684 2,674
Gain on sale of
property and
casualty premium
finance receivables 3,629 196 322 361 456
(Losses) gains on
available-for-sale
securities, net (412) 1,540 (2,038) (3,618) 920
Gain on bargain
purchase 113,062 -- -- -- --
Other:
Fees from covered
call options -- -- 1,998 7,438 2,723
Bank Owned life
Insurance 552 565 286 (319) 478
Trading income 6,236 8,274 8,744 (105) 286
Administrative
services 527 454 482 670 803
Miscellaneous 2,934 1,761 1,505 2,418 2,258
-------- -------- -------- -------- --------
Total other income 10,249 11,054 13,015 10,102 6,548
-------- -------- -------- -------- --------
Total non-interest
income $150,680 $ 45,452 $ 36,427 $ 19,372 $ 22,130
-------- -------- -------- -------- --------
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Non-Interest Expense - 5 Quarter Trends
Three Months Ended
------------------------------------------------
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
-------------------- -------- -------- -------- -------- --------
Salaries and
employee benefits $ 48,088 $ 46,015 $ 44,820 $ 35,616 $ 35,823
Equipment 4,069 4,015 3,938 4,190 4,050
Occupancy, net 5,884 5,608 6,190 5,947 5,666
Data processing 3,226 3,216 3,136 3,007 2,850
Advertising and
marketing 1,488 1,420 1,095 1,642 1,343
Professional fees 4,089 2,871 2,883 2,334 2,195
Amortization of
other intangibles 677 676 687 781 781
Other:
Commissions - 3rd
party brokers 843 791 704 802 985
Postage 1,139 1,146 1,180 1,012 1,067
Stationery and
supplies 769 793 768 757 750
FDIC Insurance 4,334 9,121 3,013 1,681 1,344
OREO expenses, net 10,243 1,072 2,356 641 487
Miscellaneous 7,714 7,501 6,192 6,524 5,858
-------- -------- -------- -------- --------
Total other expense 25,042 20,424 14,213 11,417 10,491
-------- -------- -------- -------- --------
Total non-interest
expense $ 92,563 $ 84,245 $ 76,962 $ 64,934 $ 63,199
-------- -------- -------- -------- --------
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Allowance for Credit Losses - 5 Quarter Trends
Three Months Ended
-------------------------------------------------------
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
------------------------- ---------- ---------- ---------- ----------
Balance at
beginning of
period $ 85,113 $ 74,248 $ 69,767 $ 66,327 $ 57,633
Provision for
credit losses 91,193 23,663 14,473 14,456 24,129
Reclassifi-
cation to
allowance for
lending-
related
commitments (1,543) -- -- (1,093) --
Charge-offs:
------------
Commercial
and
commercial
real estate
loans 74,613 9,846 7,890 7,539 13,543
Home equity
loans 1,727 795 511 231 28
Residential
real estate
loans 422 108 152 627 786
Premium
finance
receivables
- commercial 2,478 1,792 1,351 1,275 1,002
Premium
finance
receivables
- life
insurance -- -- -- -- --
Indirect
consumer
loans 588 473 361 501 292
Consumer and
other loans 244 130 121 157 165
---------- ---------- ---------- ---------- ----------
Total charge
-offs 80,072 13,144 10,386 10,330 15,816
---------- ---------- ---------- ---------- ----------
Recoveries:
-----------
Commercial
and
commercial
real estate
loans 139 107 208 211 216
Home equity
loans 1 1 1 1 --
Residential
real estate
loans -- -- -- -- --
Premium
finance
receivables
- commercial 161 155 141 144 118
Premium
finance
receivables
- life
insurance -- -- -- -- --
Indirect
consumer
loans 62 44 29 38 29
Consumer and
other loans 42 39 15 13 18
---------- ---------- ---------- ---------- ----------
Total
recoveries 405 346 394 407 381
---------- ---------- ---------- ---------- ----------
Net charge-
offs (79,667) (12,798) (9,992) (9,923) (15,435)
---------- ---------- ---------- ---------- ----------
Allowance for
loan losses
at end of
period $ 95,096 $ 85,113 $ 74,248 $ 69,767 $ 66,327
---------- ---------- ---------- ---------- ----------
Allowance for
lending-
related
commitments
at end of
period $ 3,129 $ 1,586 $ 1,586 $ 1,586 $ 493
---------- ---------- ---------- ---------- ----------
Allowance for
credit losses
at end of
period $ 98,225 $ 86,699 $ 75,834 $ 71,353 $ 66,820
---------- ---------- ---------- ---------- ----------
Credit
discounts
on purchased
loans 36,195 -- -- -- --
---------- ---------- ---------- ---------- ----------
Total credit
reserves $ 134,420 $ 86,699 $ 75,834 $ 71,535 $ 66,820
---------- ---------- ---------- ---------- ----------
Annualized net
charge-offs
(recoveries)
by category
as a
percentage of
its own
respective
category's
average:
Commercial
and
commercial
real estate
loans 5.83% 0.78% 0.65% 0.62% 1.15%
Home equity
loans 0.75 0.35 0.23 0.11 0.01
Residential
real estate
loans 0.33 0.09 0.14 0.79 0.92
Premium
finance
receivables
- commercial 0.74 0.48 0.37 0.37 0.29
Premium
finance
receivables
- life
insurance -- -- -- -- --
Indirect
consumer
loans 1.67 1.20 0.81 0.98 0.49
Consumer and
other loans 0.71 0.25 0.27 0.35 0.36
---------- ---------- ---------- ---------- ----------
Total loans,
net of
unearned
income 3.65% 0.6% 0.51% 0.53% 0.84%
---------- ---------- ---------- ---------- ----------
Net charge-
offs as a
percentage of
the provision
for loan
losses 87.36% 54.08% 69.04% 68.64% 63.97%
---------- ---------- ---------- ---------- ----------
Loans at
period-end $8,275,257 $7,595,476 $7,841,447 $7,621,068 $7,322,545
Allowance for
loan losses
as a
percentage of
loans at
period-end 1.15% 1.12% 0.95% 0.92% 0.91%
Allowance for
credit losses
as a
percentage of
loans at
period-end 1.19% 1.14% 0.97% 0.94% 0.91%
Total credit
reserves as a
percentage of
loans (net of
discounts) at
period-end 1.62% 1.14% 0.97% 0.94% 0.91%
---------------------------------------------------------------------
WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Non-Performing Loans - 5 Quarter Trends
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2009 2009 2009 2008 2008
--------------------------- -------- -------- -------- --------
Loans past due
greater than 90
days and still
accruing:
Residential real
estate and home
equity $ 1,272 $ 1,447 $ 726 $ 617 $ 1,084
Commercial,
consumer and
other 23,402 7,860 4,958 14,750 6,100
Premium finance
receivables
- commercial 11,714 14,301 9,722 9,339 5,903
Premium finance
receivables
- life -- -- -- -- --
Indirect consumer
loans 549 695 1,076 679 877
-------- -------- -------- -------- --------
Total past due
greater than 90
days and still
accruing 36,937 24,303 16,482 25,385 13,964
-------- -------- -------- -------- --------
Non-accrual loans:
Residential real
estate and home
equity 10,885 11,925 9,209 6,528 6,214
Commercial,
consumer and
other 167,008 184,960 136,397 91,814 81,997
Premium finance
receivables -
commercial 16,093 15,806 12,694 11,454 10,239
Premium finance
receivables -
life -- -- -- -- --
Indirect consumer
loans 736 1,225 1,084 913 627
-------- -------- -------- -------- --------
Total non-
accrual 194,722 213,916 159,384 110,709 99,077
-------- -------- -------- -------- --------
Total non-
performing loans:
Residential real
estate and home
equity 12,157 13,372 9,935 7,145 7,298
Commercial,
consumer and
other 190,410 192,820 141,355 106,564 88,097
Premium finance
receivables -
commercial 27,807 30,107 22,416 20,793 16,142
Premium finance
receivables -
life -- -- -- -- --
Indirect consumer
loans 1,285 1,920 2,160 1,592 1,504
-------- -------- -------- -------- --------
Total non-
performing
loans $231,659 $238,219 $175,866 $136,094 $113,041
-------- -------- -------- -------- --------
Total non-
performing loans
by category as a
percent of its
own respective
category's period
-end balance:
Residential real
estate and home
equity 1.00% 1.12% 0.83% 0.62% 0.67%
Commercial,
consumer and
other 3.70 3.71 2.79 2.16 1.82
Premium finance
receivables -
commercial 3.70 3.39 1.74 1.67 1.39
Premium finance
receivables -
life -- -- -- -- --
Indirect consumer
loans 1.11 1.44 1.40 0.90 0.75
-------- -------- -------- -------- --------
Total non-
performing
loans 2.80% 3.14% 2.24% 1.79% 1.54%
-------- -------- -------- -------- --------
Allowance for loan
losses as a
percentage of non-
performing
loans 41.05% 35.73% 42.22% 51.26% 58.67%
-------- -------- -------- -------- --------
--------------------------------------------------------------------