Wintrust Financial Corporation Reports Fourth Quarter and Full Year 2022 Results

ROSEMONT, Ill., Jan. 18, 2023 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, “we” or “our”) (Nasdaq: WTFC) announced net income of $144.8 million or $2.23 per diluted common share for the fourth quarter of 2022, an increase in diluted earnings per common share of 1% compared to the third quarter of 2022. The Company had record annual net income of $509.7 million or $8.02 per diluted common share for the year ended December 31, 2022 as compared to net income of $466.2 million or $7.58 per diluted common share for the same period of 2021. Pre-tax, pre-provision income (non-GAAP) totaled a record $779.1 million for the year ended December 31, 2022, up 35% as compared to $578.5 million for the same period of 2021.

Edward J. Wehmer, Founder and Chief Executive Officer, commented, “Wintrust finished the year with great momentum as our fourth quarter results were highlighted by strong net income and record quarterly pre-tax, pre-provision income. Net interest income and net interest margin expanded meaningfully and our loan portfolio continued to grow while exhibiting low levels of net charge-offs. The fourth quarter caps an extraordinary year for Wintrust, and we believe that we are well-positioned to reach even higher levels of financial performance in 2023."

Highlights of the fourth quarter of 2022:
Comparative information to the third quarter of 2022, unless otherwise noted

• Net interest income increased by $55.4 million or 14% as compared to the third quarter of 2022 primarily due to improvement in net interest margin and loan growth.
  • Net interest margin, on a GAAP basis, increased by 37 basis points to 3.71% for the fourth quarter of 2022 as the upward repricing of earning assets outpaced increases in deposit costs. Net interest margin, on a fully taxable equivalent basis (non-GAAP) increased by 38 basis points to 3.73%.
• Total loans increased by $1.0 billion, or 11% on an annualized basis. In addition, total loans as of December 31, 2022 were $630 million higher than average total loans in the fourth quarter of 2022 which is expected to benefit future quarters.
• Total assets increased by $567 million totaling $52.9 billion as of December 31, 2022 and total deposits increased by $105 million.
• Recorded a provision for credit losses of $47.6 million in the fourth quarter of 2022 primarily related to a moderate deterioration in macroeconomic factors coupled with strong loan growth. This compares to a provision for credit losses of $6.4 million in the third quarter of 2022.
• Net charge-offs totaled $5.1 million or five basis points of average total loans on an annualized basis in the fourth quarter of 2022 as compared to $3.2 million or three basis points of average total loans on an annualized basis in the third quarter of 2022.
• Non-performing loans were essentially unchanged at 0.26% of total loans, as of December 31, 2022. See “Asset Quality” section for more information.
• Book value per common share increased by $2.56 to $72.12 as of December 31, 2022. Tangible book value per common share (non-GAAP) increased to $61.00 as of December 31, 2022 as compared to $58.42 as of September 30, 2022.

Other items of note from the fourth quarter of 2022

• Net losses on investment securities totaled $6.7 million in the fourth quarter of 2022 related to changes in the value of equity securities as compared to net losses of $3.1 million in the third quarter of 2022.
• The effective tax rate decreased as the Company recorded an approximately $1.7 million benefit to income tax expense related to earnings at its Canadian subsidiary. See “Income Taxes” section for more information.
• Recorded $838,000 in occupancy expense related to an unrealized loss associated with the anticipated sale of a branch facility.
• Recorded $846,000 in operating lease equipment expense related to the impairment of an operating lease asset.
• The Company recorded net negative fair value adjustments of $702,000 in the fourth quarter of 2022 related to fair value changes in certain mortgage assets, see “Non-Interest Income” section for more information.

Mr. Wehmer continued, "The Company experienced robust loan growth as loans increased by $1.0 billion, or 11% on an annualized basis, in the fourth quarter of 2022. The loan growth was spread across all of our material loan portfolios as we experienced growth in commercial, commercial real estate, commercial insurance premium finance receivables and life insurance premium finance receivables. We remain prudent in our review of credit prospects ensuring our loan growth stays within our conservative credit standards. Loan growth in the fourth quarter of 2022 outpaced deposit growth which resulted in our loans to deposits ratio ending the quarter at 91.4%. Strategically growing deposits is among our most important objectives in 2023 and we believe we are well positioned to accomplish that without compromising our net interest margin guidance."

Mr. Wehmer commented, "Net interest income increased by $55.4 million in the fourth quarter of 2022 primarily due to improvement in net interest margin as well as an increase in earning assets. Net interest margin, on a fully taxable equivalent basis (non-GAAP), increased by 38 basis points as the upward repricing of earning assets outpaced deposit rate changes. We expect that trend to continue and believe, subject to no material change in the consensus projection of interest rates as of this release date, that our net interest margin should approach 4.00% during the first quarter of 2023. While Wintrust benefited significantly from being asset sensitive to interest rates in 2022, we acknowledge the uncertainty in projected interest rates and are repositioning our balance sheet to reduce our interest rate sensitivity. We expect to continue this strategy, including the use of derivative instruments, in order to mitigate potential negative impacts to our net interest margin in a declining interest rate environment.”

Commenting on credit quality, Mr. Wehmer stated, "The allowance for credit losses totaled $357.9 million as of December 31, 2022, an increase of $42.6 million as compared to $315.3 million as of September 30, 2022. The $42.6 million increase in reserves consisted of a $32.2 million increase related to a moderate deterioration in macroeconomic factors and a $10.4 million increase related to portfolio changes in the fourth quarter of 2022. Meanwhile, credit metrics related to current loan performance remained relatively stable. Non-performing loans totaled $100.7 million and comprised only 0.26% of total loans as of December 31, 2022, essentially unchanged from levels as of September 30, 2022. Net charge-offs totaled $5.1 million or five basis points of average total loans on an annualized basis in the fourth quarter of 2022 as compared to $3.2 million or three basis points of average total loans on an annualized basis in the third quarter of 2022. The allowance for credit losses on our core loan portfolio as of December 31, 2022 is approximately 1.42% of the outstanding balance. We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit."

Mr. Wehmer concluded, “Our fourth quarter of 2022 results continued to demonstrate the multi-faceted nature of our business model which we believe uniquely positions us to be successful. We remain an asset driven organization, focused on prudently growing our loan portfolio. We are confident we can raise funding to support asset growth and drive further net interest income expansion. We are closely watching our expenses and believe our efficiency ratio will continue to improve. We are opportunistically evaluating the acquisition market for both banks and business lines of various sizes and are excited about our recently announced and pending wealth management acquisition. Of course, we remain diligent in our consideration of acquisition targets and intend to be prudent in our decision making, always seeking to minimize tangible book value dilution. We are very proud that Wintrust’s tangible book value per common share has increased every year since we became a public company in 1996 and you can be assured of our best efforts to maintain that trend in 2023 and beyond.”

The graphs below illustrate certain financial highlights of the fourth quarter of 2022 as well as historical financial performance. See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 17 for additional information with respect to non-GAAP financial measures/ratios, including the reconciliations to the corresponding GAAP financial measures/ratios.

Graphs available at the following link: 
http://ml.globenewswire.com/Resource/Download/b70f58b8-5524-4ca3-8936-f89104accc4a

SUMMARY OF RESULTS:

BALANCE SHEET

Total loans increased by $1.0 billion as core loans increased by $794 million and niche loans increased by $250 million as compared to the third quarter of 2022. See Table 1 for more information. During the fourth quarter of 2022, the Company increased its investment portfolio by approximately $1.5 billion. However, certain securities were called by option holders on December 31, 2022 which resulted in the recognition of a trade date receivable of $922 million as of December 31, 2022. In January 2023, the Company reinvested the trade date receivable proceeds by purchasing a similar amount of investment securities.

Total liabilities increased $408 million in the fourth quarter of 2022 as compared to the third quarter of 2022 resulting primarily from a $136 million increase in notes payable and a $105 million increase in total deposits. The Company's loans to deposits ratio ended the quarter at 91.4%. Management believes in substantially funding the Company's balance sheet with core deposits and utilizes brokered or wholesale funding sources on a limited basis to manage its liquidity position as well as for interest rate risk management purposes.

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

NET INTEREST INCOME

For the fourth quarter of 2022, net interest income totaled $456.8 million, an increase of $55.4 million as compared to the third quarter of 2022. The $55.4 million increase in net interest income in the fourth quarter of 2022 compared to the third quarter of 2022 was primarily due to robust loan growth and continued expansion of net interest margin.

Net interest margin was 3.71% (3.73% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2022 compared to 3.34% (3.35% on a fully taxable-equivalent basis, non-GAAP) during the third quarter of 2022. The net interest margin increase as compared to the third quarter of 2022 was due to an 84 basis point increase in yield on earning assets and a 22 basis point increase in the net free funds contribution. These improvements were partially offset by a 68 basis point increase in the rate paid on interest-bearing liabilities. The 84 basis point increase in the yield on earning assets in the fourth quarter of 2022 as compared to the third quarter of 2022 was primarily due to an 87 basis point expansion on loan yields and a higher liquidity management asset yield as the Company earned higher yields on interest-bearing deposits with banks and added investment securities at higher current market rates. The 68 basis point increase in the rate paid on interest-bearing liabilities in the fourth quarter of 2022 as compared to the third quarter of 2022 is primarily due to a 66 basis point increase in the rate paid on interest-bearing deposits primarily related to the increasing rate environment.

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

ASSET QUALITY

The allowance for credit losses totaled $357.9 million as of December 31, 2022, an increase of $42.6 million as compared to $315.3 million as of September 30, 2022. The $42.6 million increase in reserves consisted of a $32.2 million increase related to a moderate deterioration in macroeconomic factors and a $10.4 million increase related to portfolio changes in the fourth quarter of 2022. A provision for credit losses totaling $47.6 million was recorded for the fourth quarter of 2022 as compared to $6.4 million recorded in the third quarter of 2022. For more information regarding the provision for credit losses, see Table 11 in this report.

Management believes the allowance for credit losses is appropriate to account for expected credit losses. The Current Expected Credit Losses (“CECL”) accounting standard requires the Company to estimate expected credit losses over the life of the Company’s financial assets as of the reporting date. There can be no assurances, however, that future losses will not significantly exceed the amounts provided for, thereby affecting future results of operations. A summary of the allowance for credit losses calculated for the loan components in each portfolio as of December 31, 2022, September 30, 2022, and June 30, 2022 is shown on Table 12 of this report.

Net charge-offs totaled $5.1 million in the fourth quarter of 2022, as compared to $3.2 million of net charge-offs in the third quarter of 2022. Net charge-offs as a percentage of average total loans were reported as five basis points in the fourth quarter of 2022 on an annualized basis compared to three basis points on an annualized basis in the third quarter of 2022. For more information regarding net charge-offs, see Table 10 in this report.

The Company’s delinquency rates remain low and manageable. For more information regarding past due loans, see Table 13 in this report.

The ratio of non-performing assets to total assets was 0.21% as of December 31, 2022, compared to 0.20% at September 30, 2022. Non-performing assets totaled $110.6 million at December 31, 2022, compared to $104.3 million at September 30, 2022. Non-performing loans remained relatively flat totaling $100.7 million, or 0.26% of total loans, at December 31, 2022 compared to $97.6 million, or 0.26% of total loans, at September 30, 2022. For more information regarding non-performing assets, see Table 14 in this report.

NON-INTEREST INCOME

Wealth management revenue decreased $2.4 million in the fourth quarter of 2022 as compared to the third quarter of 2022 primarily related to lower fees associated with our tax-deferred like-kind exchange business. Wealth management revenue is comprised of the trust and asset management revenue of The Chicago Trust Company and Great Lakes Advisors, the brokerage commissions, managed money fees and insurance product commissions at Wintrust Investments and fees from tax-deferred like-kind exchange services provided by the Chicago Deferred Exchange Company.

Mortgage banking revenue decreased by $9.8 million in the fourth quarter of 2022 as compared to the third quarter of 2022 primarily due to lower production revenue as a result of declining mortgage origination volume in the recent rising rate environment as well as lower production margins. The Company recorded net negative fair value adjustments of $702,000 in the fourth quarter of 2022 related to fair value changes in certain mortgage assets. This included a $2.1 million decrease in the value of mortgage servicing rights related to changes in fair value model assumptions net of economic hedges and a positive $1.4 million valuation related adjustment on the Company’s held-for-sale portfolio of early buy-out exercised loans guaranteed by U.S. government agencies which are held at fair value. The Company intends to monitor the relationship of these assets and will seek to minimize the earnings impact of fair value changes in future quarters.

Net losses on investment securities totaled $6.7 million in the fourth quarter of 2022 related to changes in the value of equity securities as compared to net losses of $3.1 million in the third quarter of 2022.

Fees from covered call options increased $6.6 million in the fourth quarter of 2022 as compared to the third quarter of 2022. The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio. These option transactions are designed to mitigate overall interest rate risk and do not qualify as hedges pursuant to accounting guidance.

For more information regarding non-interest income, see Table 15 in this report.

NON-INTEREST EXPENSE

Salaries and employee benefits expense increased by $4.2 million in the fourth quarter of 2022 as compared to the third quarter of 2022. The $4.2 million increase is primarily related to higher incentive compensation expense related to the Company's strong 2022 financial performance, increased employee insurance costs and higher levels of deferred compensation expense, partially offset by lower commissions expense primarily related to lower mortgage production volume.

Advertising and marketing expenses in the fourth quarter of 2022 totaled $14.3 million, which is a $2.3 million decrease as compared to the third quarter of 2022 primarily due to a decrease in sports sponsorships. Marketing costs are incurred to promote the Company's brand, commercial banking capabilities and the Company's various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the Company's non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs utilized which are determined based on the market area, targeted audience, competition and various other factors.

Miscellaneous expense increased by $4.8 million in the fourth quarter of 2022 as compared to the third quarter of 2022 which includes a $1.1 million increase in charitable donations. In addition, miscellaneous expense includes ATM expenses, correspondent bank charges, directors fees, telephone, postage, corporate insurance, dues and subscriptions, problem loan expenses and other miscellaneous operational losses and costs.

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

INCOME TAXES

The Company recorded income tax expense of $50.4 million in the fourth quarter of 2022 compared to $57.1 million in the third quarter of 2022. The effective tax rates were 25.80% in the fourth quarter of 2022 compared to 28.53% in the third quarter of 2022. Primarily as a result of fluctuations in currency rates, in the fourth quarter of 2022, the Company reversed approximately $1.7 million of the $2.0 million of tax expense related to GILTI (“Global Intangible Low-taxed Income”) recorded in the third quarter of 2022. The GILTI tax is a U.S. minimum tax on global profits.

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking unit, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the fourth quarter of 2022, this unit expanded its loan portfolio. The segment’s net interest income increased in the fourth quarter of 2022 as compared to the third quarter of 2022 due to loan growth and an increased net interest margin.

Mortgage banking revenue was $17.4 million for the fourth quarter of 2022, a decrease of $9.8 million as compared to the third quarter of 2022, primarily due to lower production revenue as a result of declining mortgage origination volume in the current rising rate environment as well as lower production margins. Service charges on deposit accounts totaled $13.1 million in the fourth quarter of 2022, a decrease of $1.3 million as compared to the third quarter of 2022 primarily due to lower fees associated with commercial account activity. The Company’s gross commercial and commercial real estate loan pipelines remained robust as of December 31, 2022 indicating momentum for expected continued loan growth in the first quarter of 2023.

Specialty Finance

Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries, accounts receivable financing and value-added, out-sourced administrative services and other services. Originations within the insurance premium financing receivables portfolio were $4.0 billion during the fourth quarter of 2022 and average balances increased by $396.1 million as compared to the third quarter of 2022. The Company’s leasing portfolio balance increased in the fourth quarter of 2022, with its portfolio of assets, including capital leases, loans and equipment on operating leases, totaling $3.0 billion as of December 31, 2022 as compared to $2.7 billion as of September 30, 2022. Revenues from the Company’s out-sourced administrative services business were $1.7 million in the fourth quarter of 2022, an increase of $203,000 from the third quarter of 2022.

Wealth Management

Through four separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, tax-deferred like-kind exchange services, asset management, securities brokerage services and 401(k) and retirement plan services. Wealth management revenue totaled $30.7 million in the fourth quarter of 2022, a decrease of $2.4 million compared to the third quarter of 2022. The decline in wealth management revenue in the fourth quarter of 2022 was primarily related to lower fees associated with our tax-deferred like-kind exchange business. At December 31, 2022, the Company’s wealth management subsidiaries had approximately $34.4 billion of assets under administration, which included $7.4 billion of assets owned by the Company and its subsidiary banks, representing an increase from the $32.8 billion of assets under administration at September 30, 2022.

ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS

Common Stock Offering
In June 2022, the Company sold through a public offering a total of 3,450,000 shares of its common stock. Net proceeds to the Company totaled approximately $285.7 million, net of estimated issuance costs.

Insurance Agency Loan Portfolio
On November 15, 2021, the Company completed its acquisition of certain assets from The Allstate Corporation (“Allstate”). Through this business combination, the Company acquired approximately $581.6 million of loans, net of allowance for credit losses measured on the acquisition date. The loan portfolio was comprised of approximately 1,800 loans to Allstate agents nationally. In addition to acquiring the loans, the Company became the national preferred provider of loans to Allstate agents. In connection with the loan acquisition, a team of Allstate agency lending specialists joined the Company, to augment and expand Wintrust’s existing insurance agency finance business. As the transaction was determined to be a business combination, the Company recorded goodwill of approximately $9.3 million on the purchase.

WINTRUST FINANCIAL CORPORATION 
Key Operating Measures

Wintrust’s key operating measures and growth rates for the fourth quarter of 2022, as compared to the third quarter of 2022 (sequential quarter) and fourth quarter of 2021 (linked quarter), are shown in the table below:

													% or(1) basis point  (bp) change from 3rd Quarter 2022				% or basis point   (bp) change from 4th Quarter 2021
		Three Months Ended
(Dollars in thousands, except per share data)		Dec 31, 2022				Sep 30, 2022				Dec 31, 2021
Net income		$	144,817			$	142,961			$	98,757		1		%		47	%
Pre-tax income, excluding provision for credit losses (non-GAAP)(2)			242,819				206,461				146,344		18				66
Net income per common share – diluted			2.23				2.21				1.58		1				41
Cash dividends declared per common share			0.34				0.34				0.31		—				10
Net revenue(3)			550,655				502,930				429,743		9				28
Net interest income			456,816				401,448				295,976		14				54
Net interest margin			3.71	%			3.34	%			2.54	%	37		bps		117	bps
Net interest margin – fully taxable-equivalent (non-GAAP)(2)			3.73				3.35				2.55		38				118
Net overhead ratio(4)			1.63				1.53				1.21		10				42
Return on average assets			1.10				1.12				0.80		(2	)			30
Return on average common equity			12.72				12.31				9.05		41				367
Return on average tangible common equity (non-GAAP)(2)			15.21				14.68				11.04		53				417
At end of period
Total assets		$	52,949,649			$	52,382,939			$	50,142,143		4		%		6	%
Total loans(5)			39,196,485				38,167,613				34,789,104		11				13
Total deposits			42,902,544				42,797,191				42,095,585		1				2
Total shareholders’ equity			4,796,838				4,637,980				4,498,688		14				7

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

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

 

WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights

		Three Months Ended																			Years Ended
(Dollars in thousands, except per share data)		Dec 31, 2022				Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021			Dec 31, 2022				Dec 31, 2021
Selected Financial Condition Data (at end of period):
Total assets		$	52,949,649			$	52,382,939			$	50,969,332			$	50,250,661			$	50,142,143
Total loans(1)			39,196,485				38,167,613				37,053,103				35,280,547				34,789,104
Total deposits			42,902,544				42,797,191				42,593,326				42,219,322				42,095,585
Total shareholders’ equity			4,796,838				4,637,980				4,727,623				4,492,256				4,498,688
Selected Statements of Income Data:
Net interest income		$	456,816			$	401,448			$	337,804			$	299,294			$	295,976		$	1,495,362			$	1,124,957
Net revenue(2)			550,655				502,930				440,746				462,084				429,743			1,956,415				1,711,077
Net income			144,817				142,961				94,513				127,391				98,757			509,682				466,151
Pre-tax income, excluding provision for credit losses (non-GAAP)(3)			242,819				206,461				152,078				177,786				146,344			779,144				578,533
Net income per common share – Basic			2.27				2.24				1.51				2.11				1.61			8.14				7.69
Net income per common share – Diluted			2.23				2.21				1.49				2.07				1.58			8.02				7.58
Cash dividends declared per common share			0.34				0.34				0.34				0.34				0.31			1.36				1.24
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin			3.71	%			3.34	%			2.92	%			2.60	%			2.54	%		3.15	%			2.57	%
Net interest margin – fully taxable-equivalent (non-GAAP)(3)			3.73				3.35				2.93				2.61				2.55			3.17				2.58
Non-interest income to average assets			0.71				0.79				0.84				1.33				1.08			0.91				1.25
Non-interest expense to average assets			2.34				2.32				2.35				2.33				2.29			2.33				2.42
Net overhead ratio(4)			1.63				1.53				1.51				1.00				1.21			1.42				1.17
Return on average assets			1.10				1.12				0.77				1.04				0.80			1.01				1.00
Return on average common equity			12.72				12.31				8.53				11.94				9.05			11.41				11.27
Return on average tangible common equity (non-GAAP)(3)			15.21				14.68				10.36				14.48				11.04			13.73				13.83
Average total assets		$	52,087,618			$	50,722,694			$	49,353,426			$	49,501,844			$	49,118,777		$	50,424,319			$	46,824,051
Average total shareholders’ equity			4,710,856				4,795,387				4,526,110				4,500,460				4,433,953			4,634,224				4,300,742
Average loans to average deposits ratio			90.5	%			88.8	%			86.8	%			83.8	%			81.7	%		87.5	%			84.7	%
Period-end loans to deposits ratio			91.4				89.2				87.0				83.6				82.6
Common Share Data at end of period:
Market price per common share		$	84.52			$	81.55			$	80.15			$	92.93			$	90.82
Book value per common share			72.12				69.56				71.06				71.26				71.62
Tangible book value per common share (non-GAAP)(3)			61.00				58.42				59.87				59.34				59.64
Common shares outstanding			60,794,008				60,743,335				60,721,889				57,253,214				57,054,091
Other Data at end of period:
Tier 1 leverage ratio(5)			8.8	%			8.8	%			8.8	%			8.1	%			8.0	%
Risk-based capital ratios:
Tier 1 capital ratio(5)			10.0				9.9				9.9				9.6				9.6
Common equity tier 1 capital ratio(5)			9.1				9.0				9.0				8.6				8.6
Total capital ratio(5)			11.9				11.8				11.9				11.6				11.6
Allowance for credit losses(6)		$	357,936			$	315,338			$	312,192			$	301,327			$	299,731
Allowance for loan and unfunded lending-related commitment losses to total loans			0.91	%			0.83	%			0.84	%			0.85	%			0.86	%
Number of:
Bank subsidiaries			15				15				15				15				15
Banking offices			174				174				173				174				173

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

 

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)			2022				2022				2022				2022				2021
Assets
Cash and due from banks		$	490,908			$	489,590			$	498,891			$	462,516			$	411,150
Federal funds sold and securities purchased under resale agreements			58				57				475,056				700,056				700,055
Interest-bearing deposits with banks			1,988,719				3,968,605				3,266,541				4,013,597				5,372,603
Available-for-sale securities, at fair value			3,243,017				2,923,653				2,970,121				2,998,898				2,327,793
Held-to-maturity securities, at amortized cost			3,640,567				3,389,842				3,413,469				3,435,729				2,942,285
Trading account securities			1,127				179				1,010				852				1,061
Equity securities with readily determinable fair value			110,365				114,012				93,295				92,689				90,511
Federal Home Loan Bank and Federal Reserve Bank stock			224,759				178,156				136,138				136,163				135,378
Brokerage customer receivables			16,387				20,327				21,527				22,888				26,068
Mortgage loans held-for-sale			299,935				376,160				513,232				606,545				817,912
Loans, net of unearned income			39,196,485				38,167,613				37,053,103				35,280,547				34,789,104
Allowance for loan losses			(270,173	)			(246,110	)			(251,769	)			(250,539	)			(247,835	)
Net loans			38,926,312				37,921,503				36,801,334				35,030,008				34,541,269
Premises, software and equipment, net			764,798				763,029				762,381				761,213				766,405
Lease investments, net			253,928				244,822				223,813				240,656				242,082
Accrued interest receivable and other assets			1,391,342				1,316,305				1,112,697				1,066,750				1,084,115
Trade date securities receivable			921,717				—				—				—				—
Goodwill			653,524				653,079				654,709				655,402				655,149
Other acquisition-related intangible assets			22,186				23,620				25,118				26,699				28,307
Total assets		$	52,949,649			$	52,382,939			$	50,969,332			$	50,250,661			$	50,142,143
Liabilities and Shareholders’ Equity
Deposits:
Non-interest-bearing		$	12,668,160			$	13,529,277			$	13,855,844			$	13,748,918			$	14,179,980
Interest-bearing			30,234,384				29,267,914				28,737,482				28,470,404				27,915,605
Total deposits			42,902,544				42,797,191				42,593,326				42,219,322				42,095,585
Federal Home Loan Bank advances			2,316,071				2,316,071				1,166,071				1,241,071				1,241,071
Other borrowings			596,614				447,215				482,787				482,516				494,136
Subordinated notes			437,392				437,260				437,162				437,033				436,938
Junior subordinated debentures			253,566				253,566				253,566				253,566				253,566
Trade date securities payable			—				—				—				437				—
Accrued interest payable and other liabilities			1,646,624				1,493,656				1,308,797				1,124,460				1,122,159
Total liabilities			48,152,811				47,744,959				46,241,709				45,758,405				45,643,455
Shareholders’ Equity:
Preferred stock			412,500				412,500				412,500				412,500				412,500
Common stock			60,797				60,743				60,722				59,091				58,892
Surplus			1,902,474				1,891,621				1,880,913				1,698,093				1,685,572
Treasury stock			(304	)			—				—				(109,903	)			(109,903	)
Retained earnings			2,849,007				2,731,844				2,616,525				2,548,474				2,447,535
Accumulated other comprehensive (loss) income			(427,636	)			(458,728	)			(243,037	)			(115,999	)			4,092
Total shareholders’ equity			4,796,838				4,637,980				4,727,623				4,492,256				4,498,688
Total liabilities and shareholders’ equity		$	52,949,649			$	52,382,939			$	50,969,332			$	50,250,661			$	50,142,143

 

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

	Three Months Ended																			Years Ended
(In thousands, except per share data)	Dec 31, 2022				Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021			Dec 31, 2022				Dec 31, 2021
Interest income
Interest and fees on loans	$	498,838			$	402,689			$	320,501			$	285,698			$	289,140		$	1,507,726			$	1,133,528
Mortgage loans held-for-sale		3,997				5,371				5,740				6,087				7,234			21,195				32,169
Interest-bearing deposits with banks		20,349				15,621				5,790				1,687				2,254			43,447				6,606
Federal funds sold and securities purchased under resale agreements		1,263				1,845				1,364				431				173			4,903				173
Investment securities		53,092				38,569				36,541				32,398				27,210			160,600				95,286
Trading account securities		6				7				4				5				4			22				10
Federal Home Loan Bank and Federal Reserve Bank stock		2,918				2,109				1,823				1,772				1,776			8,622				7,067
Brokerage customer receivables		282				267				205				174				188			928				645
Total interest income		580,745				466,478				371,968				328,252				327,979			1,747,443				1,275,484
Interest expense
Interest on deposits		95,447				45,916				18,985				14,854				16,572			175,202				88,119
Interest on Federal Home Loan Bank advances		13,823				6,812				4,878				4,816				4,923			30,329				19,581
Interest on other borrowings		5,313				4,008				2,734				2,239				2,250			14,294				9,928
Interest on subordinated notes		5,520				5,485				5,517				5,482				5,514			22,004				21,983
Interest on junior subordinated debentures		3,826				2,809				2,050				1,567				2,744			10,252				10,916
Total interest expense		123,929				65,030				34,164				28,958				32,003			252,081				150,527
Net interest income		456,816				401,448				337,804				299,294				295,976			1,495,362				1,124,957
Provision for credit losses		47,646				6,420				20,417				4,106				9,299			78,589				(59,263	)
Net interest income after provision for credit losses		409,170				395,028				317,387				295,188				286,677			1,416,773				1,184,220
Non-interest income
Wealth management		30,727				33,124				31,369				31,394				32,489			126,614				124,019
Mortgage banking		17,407				27,221				33,314				77,231				53,138			155,173				273,010
Service charges on deposit accounts		13,054				14,349				15,888				15,283				14,734			58,574				54,168
Losses on investment securities, net		(6,745	)			(3,103	)			(7,797	)			(2,782	)			(1,067	)		(20,427	)			(1,059	)
Fees from covered call options		7,956				1,366				1,069				3,742				1,128			14,133				3,673
Trading (losses) gains, net		(306	)			(7	)			176				3,889				206			3,752				245
Operating lease income, net		12,384				12,644				15,007				15,475				14,204			55,510				53,691
Other		19,362				15,888				13,916				18,558				18,935			67,724				78,373
Total non-interest income		93,839				101,482				102,942				162,790				133,767			461,053				586,120
Non-interest expense
Salaries and employee benefits		180,331				176,095				167,326				172,355				167,131			696,107				691,669
Software and equipment		24,699				24,126				24,250				22,810				23,708			95,885				87,515
Operating lease equipment		10,078				9,448				8,774				9,708				10,147			38,008				40,880
Occupancy, net		17,763				17,727				17,651				17,824				18,343			70,965				74,184
Data processing		7,927				7,767				8,010				7,505				7,207			31,209				27,279
Advertising and marketing		14,279				16,600				16,615				11,924				13,981			59,418				47,275
Professional fees		9,267				7,544				7,876				8,401				7,551			33,088				29,494
Amortization of other acquisition-related intangible assets		1,436				1,492				1,579				1,609				1,811			6,116				7,734
FDIC insurance		6,775				7,186				6,949				7,729				7,317			28,639				27,030
OREO expense, net		369				229				294				(1,032	)			(641	)		(140	)			(1,654	)
Other		34,912				28,255				29,344				25,465				26,844			117,976				101,138
Total non-interest expense		307,836				296,469				288,668				284,298				283,399			1,177,271				1,132,544
Income before taxes		195,173				200,041				131,661				173,680				137,045			700,555				637,796
Income tax expense		50,356				57,080				37,148				46,289				38,288			190,873				171,645
Net income	$	144,817			$	142,961			$	94,513			$	127,391			$	98,757		$	509,682			$	466,151
Preferred stock dividends		6,991				6,991				6,991				6,991				6,991			27,964				27,964
Net income applicable to common shares	$	137,826			$	135,970			$	87,522			$	120,400			$	91,766		$	481,718			$	438,187
Net income per common share - Basic	$	2.27			$	2.24			$	1.51			$	2.11			$	1.61		$	8.14			$	7.69
Net income per common share - Diluted	$	2.23			$	2.21			$	1.49			$	2.07			$	1.58		$	8.02			$	7.58
Cash dividends declared per common share	$	0.34			$	0.34			$	0.34			$	0.34			$	0.31		$	1.36			$	1.24
Weighted average common shares outstanding		60,769				60,738				58,063				57,196				57,022			59,205				56,994
Dilutive potential common shares		1,096				837				775				862				976			886				792
Average common shares and dilutive common shares		61,865				61,575				58,838				58,058				57,998			60,091				57,786

 

TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES

															% Growth From(1)
(Dollars in thousands)	Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021		Sep 30, 2022(2)			Dec 31, 2021
Balance:
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. government agencies	$	156,297		$	216,062		$	294,688		$	296,548		$	473,102	NM			(67	)%
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. government agencies		143,638			160,098			218,544			309,997			344,810	(41	)		(58	)
Total mortgage loans held-for-sale	$	299,935		$	376,160		$	513,232		$	606,545		$	817,912	(80	)%		(63	)%
Core loans:
Commercial
Commercial and industrial	$	5,852,166		$	5,818,959		$	5,502,584		$	5,348,266		$	5,346,084	2	%		9	%
Asset-based lending		1,473,344			1,545,038			1,552,033			1,365,297			1,299,869	(18	)		13
Municipal		668,235			608,234			535,586			533,357			536,498	39			25
Leases		1,840,928			1,582,359			1,592,329			1,481,368			1,454,099	65			27
Commercial real estate
Residential construction		76,877			66,957			55,941			57,037			51,464	59			49
Commercial construction		1,102,098			1,176,407			1,145,602			1,055,972			1,034,988	(25	)		6
Land		307,955			282,147			304,775			283,397			269,752	36			14
Office		1,337,176			1,269,729			1,321,745			1,273,705			1,285,686	21			4
Industrial		1,836,276			1,777,658			1,746,280			1,668,516			1,585,808	13			16
Retail		1,304,444			1,331,316			1,331,059			1,395,021			1,429,567	(8	)		(9	)
Multi-family		2,560,709			2,305,433			2,171,583			2,175,875			2,043,754	44			25
Mixed use and other		1,425,412			1,368,537			1,330,220			1,325,551			1,289,267	16			11
Home equity		332,698			328,822			325,826			321,435			335,155	5			(1	)
Residential real estate
Residential real estate loans for investment		2,207,595			2,086,795			1,965,051			1,749,889			1,606,271	23			37
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. government agencies		80,701			57,161			34,764			13,520			22,707	NM			NM
Residential mortgage loans, early buy-out exercised loans guaranteed by U.S. government agencies		84,087			91,503			79,092			36,576			8,121	(32	)		NM
Total core loans	$	22,490,701		$	21,697,055		$	20,994,470		$	20,084,782		$	19,599,090	15	%		15	%
Niche loans:
Commercial
Franchise	$	1,169,623		$	1,118,478		$	1,136,929		$	1,181,761		$	1,227,234	18	%		(5	)%
Mortgage warehouse lines of credit		237,392			297,374			398,085			261,847			359,818	(80	)		(34	)
Community Advantage - homeowners association		380,875			365,967			341,095			324,383			308,286	16			24
Insurance agency lending		897,678			879,183			906,375			833,720			813,897	8			10
Premium Finance receivables
U.S. property & casualty insurance		5,103,820			4,983,795			4,781,042			4,271,828			4,178,474	10			22
Canada property & casualty insurance		745,639			729,545			760,405			665,580			677,013	9			10
Life insurance		8,090,998			8,004,856			7,608,433			7,354,163			7,042,810	4			15
Consumer and other		50,836			47,702			44,180			48,519			24,199	26			NM
Total niche loans	$	16,676,861		$	16,426,900		$	15,976,544		$	14,941,801		$	14,631,731	6	%		14	%
Commercial PPP loans:
Originated in 2020	$	7,898		$	8,724		$	18,547		$	40,016		$	74,412	(38	)%		(89	)%
Originated in 2021		21,025			34,934			63,542			213,948			483,871	NM			(96	)
Total commercial PPP loans	$	28,923		$	43,658		$	82,089		$	253,964		$	558,283	NM			(95	)%
Total loans, net of unearned income	$	39,196,485		$	38,167,613		$	37,053,103		$	35,280,547		$	34,789,104	11	%		13	%

(1)   NM - Not meaningful.
(2)   Annualized

 

TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

																				% Growth From
(Dollars in thousands)	Dec 31, 2022				Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021			Sep 30, 2022(1)			Dec 31, 2021
Balance:
Non-interest-bearing	$	12,668,160			$	13,529,277			$	13,855,844			$	13,748,918			$	14,179,980		(25	)%		(11	)%
NOW and interest-bearing demand deposits		5,591,986				5,676,122				5,918,908				5,089,724				4,646,944		(6	)		20
Wealth management deposits(2)		2,463,833				2,988,195				3,182,407				2,542,995				2,612,759		(70	)		(6	)
Money market		12,886,795				12,538,489				12,273,350				13,012,460				12,840,432		11			—
Savings		4,556,635				3,988,790				3,686,596				4,089,230				3,846,681		56			18
Time certificates of deposit		4,735,135				4,076,318				3,676,221				3,735,995				3,968,789		64			19
Total deposits	$	42,902,544			$	42,797,191			$	42,593,326			$	42,219,322			$	42,095,585		1	%		2	%
Mix:
Non-interest-bearing		30	%			32	%			33	%			32	%			34	%
NOW and interest-bearing demand deposits		13				13				13				12				11
Wealth management deposits(2)		5				7				7				6				6
Money market		30				29				29				31				31
Savings		11				9				9				10				9
Time certificates of deposit		11				10				9				9				9
Total deposits		100	%			100	%			100	%			100	%			100	%

(1)   Annualized. 
(2)  Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wintrust Investments, Chicago Deferred Exchange Company, LLC (“CDEC”), trust and asset management customers of the Company.

 

TABLE 3: TIME CERTIFICATES OF DEPOSIT MATURITY/RE-PRICING ANALYSIS
As of December 31, 2022

(Dollars in thousands)		Total Time Certificates of Deposit			Weighted-Average Rate of Maturing Time Certificates of Deposit(1)
1-3 months		$	988,118		2.04	%
4-6 months			929,448		1.89
7-9 months			815,885		1.56
10-12 months			894,365		2.06
13-18 months			654,059		2.32
19-24 months			233,827		2.03
24+ months			219,433		2.20
Total		$	4,735,135		1.98	%

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

 

TABLE 4: QUARTERLY AVERAGE BALANCES

		Average Balance for three months ended,
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)			2022				2022				2022				2022				2021
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents(1)		$	2,449,889			$	3,039,907			$	3,265,607			$	4,563,726			$	6,148,165
Investment securities(2)			7,310,383				6,655,215				6,589,947				6,378,022				5,317,351
FHLB and FRB stock			185,290				142,304				136,930				135,912				135,414
Liquidity management assets(3)			9,945,562				9,837,426				9,992,484				11,077,660				11,600,930
Other earning assets(3)(4)			18,585				21,805				24,059				25,192				28,298
Mortgage loans held-for-sale			308,639				455,342				560,707				664,019				827,672
Loans, net of unearned income(3)(5)			38,566,871				37,431,126				35,860,329				34,830,520				33,677,777
Total earning assets(3)			48,839,657				47,745,699				46,437,579				46,597,391				46,134,677
Allowance for loan and investment security losses			(252,827	)			(260,270	)			(260,547	)			(253,080	)			(254,874	)
Cash and due from banks			475,691				458,263				476,741				481,634				468,331
Other assets			3,025,097				2,779,002				2,699,653				2,675,899				2,770,643
Total assets		$	52,087,618			$	50,722,694			$	49,353,426			$	49,501,844			$	49,118,777
NOW and interest-bearing demand deposits		$	5,598,291			$	5,789,368			$	5,230,702			$	4,788,272			$	4,439,242
Wealth management deposits			2,883,247				3,078,764				2,835,267				2,505,800				2,646,879
Money market accounts			12,319,842				12,037,412				11,892,948				12,773,805				12,665,167
Savings accounts			4,403,113				3,862,579				3,882,856				3,904,299				3,766,037
Time deposits			4,023,232				3,675,930				3,687,778				3,861,371				4,058,282
Interest-bearing deposits			29,227,725				28,444,053				27,529,551				27,833,547				27,575,607
Federal Home Loan Bank advances			2,088,201				1,403,573				1,197,390				1,241,071				1,241,073
Other borrowings			480,553				478,909				489,779				494,267				501,933
Subordinated notes			437,312				437,191				437,084				436,966				436,861
Junior subordinated debentures			253,566				253,566				253,566				253,566				253,566
Total interest-bearing liabilities			32,487,357				31,017,292				29,907,370				30,259,417				30,009,040
Non-interest-bearing deposits			13,404,036				13,731,219				13,805,128				13,734,064				13,640,270
Other liabilities			1,485,369				1,178,796				1,114,818				1,007,903				1,035,514
Equity			4,710,856				4,795,387				4,526,110				4,500,460				4,433,953
Total liabilities and shareholders’ equity		$	52,087,618			$	50,722,694			$	49,353,426			$	49,501,844			$	49,118,777
Net free funds/contribution(6)		$	16,352,300			$	16,728,407			$	16,530,209			$	16,337,974			$	16,125,637

(1)   Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2)   Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3)   See Table 17: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(4)   Other earning assets include brokerage customer receivables and trading account securities.
(5)   Loans, net of unearned income, include non-accrual loans.
(6)   Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.

 

TABLE 5: QUARTERLY NET INTEREST INCOME

		Net Interest Income for three months ended,
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)			2022				2022				2022				2022				2021
Interest income:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents		$	21,612			$	17,466			$	7,154			$	2,118			$	2,427
Investment securities			53,630				39,071				37,013				32,863				27,696
FHLB and FRB stock			2,918				2,109				1,823				1,772				1,776
Liquidity management assets(1)			78,160				58,646				45,990				36,753				31,899
Other earning assets(1)			289				275				210				181				194
Mortgage loans held-for-sale			3,997				5,371				5,740				6,087				7,234
Loans, net of unearned income(1)			500,432				403,719				321,069				286,125				289,557
Total interest income		$	582,878			$	468,011			$	373,009			$	329,146			$	328,884
Interest expense:
NOW and interest-bearing demand deposits		$	14,982			$	8,041			$	2,553			$	1,990			$	1,913
Wealth management deposits			14,079				11,068				3,685				918				1,402
Money market accounts			45,468				18,916				8,559				7,648				7,658
Savings accounts			8,421				2,130				347				336				345
Time deposits			12,497				5,761				3,841				3,962				5,254
Interest-bearing deposits			95,447				45,916				18,985				14,854				16,572
Federal Home Loan Bank advances			13,823				6,812				4,878				4,816				4,923
Other borrowings			5,313				4,008				2,734				2,239				2,250
Subordinated notes			5,520				5,485				5,517				5,482				5,514
Junior subordinated debentures			3,826				2,809				2,050				1,567				2,744
Total interest expense		$	123,929			$	65,030			$	34,164			$	28,958			$	32,003
Less: Fully taxable-equivalent adjustment			(2,133	)			(1,533	)			(1,041	)			(894	)			(905	)
Net interest income (GAAP)(2)			456,816				401,448				337,804				299,294				295,976
Fully taxable-equivalent adjustment			2,133				1,533				1,041				894				905
Net interest income, fully taxable-equivalent (non-GAAP)(2)		$	458,949			$	402,981			$	338,845			$	300,188			$	296,881

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

 

TABLE 6: QUARTERLY NET INTEREST MARGIN

		Net Interest Margin for three months ended,
		Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021
Yield earned on:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents		3.50	%		2.28	%		0.88	%		0.19	%		0.16	%
Investment securities		2.91			2.33			2.25			2.09			2.07
FHLB and FRB stock		6.25			5.88			5.34			5.29			5.20
Liquidity management assets		3.12			2.37			1.85			1.35			1.09
Other earning assets		6.17			5.01			3.49			2.91			2.71
Mortgage loans held-for-sale		5.14			4.68			4.11			3.72			3.47
Loans, net of unearned income		5.15			4.28			3.59			3.33			3.41
Total earning assets		4.73	%		3.89	%		3.22	%		2.86	%		2.83	%
Rate paid on:
NOW and interest-bearing demand deposits		1.06	%		0.55	%		0.20	%		0.17	%		0.17	%
Wealth management deposits		1.94			1.43			0.52			0.15			0.21
Money market accounts		1.46			0.62			0.29			0.24			0.24
Savings accounts		0.76			0.22			0.04			0.03			0.04
Time deposits		1.23			0.62			0.42			0.42			0.51
Interest-bearing deposits		1.30			0.64			0.28			0.22			0.24
Federal Home Loan Bank advances		2.63			1.93			1.63			1.57			1.57
Other borrowings		4.39			3.32			2.24			1.84			1.78
Subordinated notes		5.05			5.02			5.05			5.02			5.05
Junior subordinated debentures		5.90			4.33			3.20			2.47			4.23
Total interest-bearing liabilities		1.51	%		0.83	%		0.46	%		0.39	%		0.42	%
Interest rate spread(1)(2)		3.22	%		3.06	%		2.76	%		2.47	%		2.41	%
Less: Fully taxable-equivalent adjustment		(0.02	)		(0.01	)		(0.01	)		(0.01	)		(0.01	)
Net free funds/contribution(3)		0.51			0.29			0.17			0.14			0.14
Net interest margin (GAAP)(2)		3.71	%		3.34	%		2.92	%		2.60	%		2.54	%
Fully taxable-equivalent adjustment		0.02			0.01			0.01			0.01			0.01
Net interest margin, fully taxable-equivalent (non-GAAP)(2)		3.73	%		3.35	%		2.93	%		2.61	%		2.55	%

(1)   Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(2)   See Table 17: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(3)   Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.

 

TABLE 7: YEAR-TO-DATE AVERAGE BALANCES, AND NET INTEREST INCOME AND MARGIN

	Average Balance fortwelve months ended,							Interest fortwelve months ended,							Yield/Rate fortwelve months ended,
(Dollars in thousands)	Dec 31, 2022				Dec 31, 2021			Dec 31, 2022				Dec 31, 2021			Dec 31, 2022			Dec 31, 2021
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents(1)	$	3,323,196			$	4,840,048		$	48,350			$	6,779		1.45	%		0.14	%
Investment securities(2)		6,735,732				4,779,313			162,577				97,258		2.41			2.03
FHLB and FRB stock		150,223				135,873			8,622				7,067		5.74			5.20
Liquidity management assets(3)(4)	$	10,209,151			$	9,755,234		$	219,549			$	111,104		2.15	%		1.14	%
Other earning assets(3)(4)(5)		22,391				25,096			955				657		4.27			2.62
Mortgage loans held-for-sale		496,088				959,457			21,195				32,169		4.27			3.35
Loans, net of unearned income(3)(4)(6)		36,684,528				33,051,043			1,511,345				1,135,155		4.12			3.43
Total earning assets(4)	$	47,412,158			$	43,790,830		$	1,753,044			$	1,279,085		3.70	%		2.92	%
Allowance for loan and investment security losses		(256,690	)			(284,163	)
Cash and due from banks		473,025				432,836
Other assets		2,795,826				2,884,548
Total assets	$	50,424,319			$	46,824,051
NOW and interest-bearing demand deposits	$	5,355,077			$	4,029,662		$	27,566			$	7,739		0.51	%		0.19	%
Wealth management deposits		2,827,497				2,361,412			29,750				4,534		1.05			0.19
Money market accounts		12,254,159				11,801,788			80,591				32,031		0.66			0.27
Savings accounts		4,014,166				3,734,162			11,234				1,583		0.28			0.04
Time deposits		3,812,148				4,447,871			26,061				42,232		0.68			0.95
Interest-bearing deposits	$	28,263,047			$	26,374,895		$	175,202			$	88,119		0.62	%		0.33	%
Federal Home Loan Bank advances		1,484,663				1,236,478			30,329				19,581		2.04			1.58
Other borrowings		485,820				514,657			14,294				9,928		2.94			1.93
Subordinated notes		437,139				436,697			22,004				21,983		5.03			5.03
Junior subordinated debentures		253,566				253,566			10,252				10,916		4.10			4.25
Total interest-bearing liabilities	$	30,924,235			$	28,816,293		$	252,081			$	150,527		0.81	%		0.52	%
Non-interest-bearing deposits		13,667,879				12,638,518
Other liabilities		1,197,981				1,068,498
Equity		4,634,224				4,300,742
Total liabilities and shareholders’ equity	$	50,424,319			$	46,824,051
Interest rate spread(4)(7)															2.89	%		2.40	%
Less: Fully taxable-equivalent adjustment									(5,601	)			(3,601	)	(0.02	)		(0.01	)
Net free funds/contribution(8)	$	16,487,923			$	14,974,537									0.28			0.18
Net interest income/margin (GAAP)(4)								$	1,495,362			$	1,124,957		3.15	%		2.57	%
Fully taxable-equivalent adjustment									5,601				3,601		0.02			0.01
Net interest income/margin, fully taxable-equivalent (non-GAAP)(4)								$	1,500,963			$	1,128,558		3.17	%		2.58	%

(1)   Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2)   Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3)   Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(4)   See Table 17: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(5)   Other earning assets include brokerage customer receivables and trading account securities.
(6)   Loans, net of unearned income, include non-accrual loans.
(7)   Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(8)   Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.

 

TABLE 8: INTEREST RATE SENSITIVITY

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

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

Static Shock Scenario		+200 Basis Points			+100 Basis Points			-100 Basis Points			-200 Basis Points
Dec 31, 2022		7.2	%		3.8	%		(5.0	)%		(12.1	)%
Sep 30, 2022		12.9			7.1			(8.7	)		(18.9	)
Jun 30, 2022		17.0			9.0			(12.6	)		(23.8	)
Mar 31, 2022		21.4			11.0			(11.3	)		(18.7	)
Dec 31, 2021		25.3			12.4			(8.5	)		(15.8	)

 

Ramp Scenario	+200 Basis Points			+100 Basis Points			-100 Basis Points			-200 Basis Points
Dec 31, 2022	5.6	%		3.0	%		(2.9	)%		(6.8	)%
Sep 30, 2022	6.5			3.6			(3.9	)		(8.6	)
Jun 30, 2022	10.2			5.3			(6.9	)		(14.3	)
Mar 31, 2022	11.2			5.8			(7.1	)		(12.4	)
Dec 31, 2021	13.9			6.9			(5.6	)		(10.8	)

As shown above, the magnitude of potential changes in net interest income in various interest rate scenarios has continued to diminish. Given the recent unprecedented rise in interest rates, the Company has made a conscious effort to reposition its exposure to changing interest rates given the uncertainty of the future interest rate environment. To this end, management has executed various derivative instruments including collars and receive fixed swaps to hedge variable rate loan exposures and originated a higher percentage of its loan originations in longer term fixed rate loans. The Company will continue to monitor current and projected interest rates and expects to execute additional derivatives to mitigate potential fluctuations in the net interest margin in future years.

 

TABLE 9: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

	Loans repricing or maturity period
As of December 31, 2022	One year or less			From one to five years			From five to fifteen years			After fifteen years			Total
(In thousands)
Commercial
Fixed rate	$	555,594		$	2,534,527		$	1,592,024		$	12,925		$	4,695,070
Variable rate		7,852,693			1,352			49			—			7,854,094
Total commercial	$	8,408,287		$	2,535,879		$	1,592,073		$	12,925		$	12,549,164
Commercial real estate
Fixed rate		430,152			2,744,033			607,770			46,352			3,828,307
Variable rate		6,102,383			20,257			—			—			6,122,640
Total commercial real estate	$	6,532,535		$	2,764,290		$	607,770		$	46,352		$	9,950,947
Home equity
Fixed rate		11,960			3,185			—			144			15,289
Variable rate		317,409			—			—			—			317,409
Total home equity	$	329,369		$	3,185		$	—		$	144		$	332,698
Residential real estate
Fixed rate		20,048			3,960			30,245			1,032,018			1,086,271
Variable rate		63,242			238,405			984,465			—			1,286,112
Total residential real estate	$	83,290		$	242,365		$	1,014,710		$	1,032,018		$	2,372,383
Premium finance receivables - property & casualty
Fixed rate		5,695,585			153,874			—			—			5,849,459
Variable rate		—			—			—			—			—
Total premium finance receivables - property & casualty	$	5,695,585		$	153,874		$	—		$	—		$	5,849,459
Premium finance receivables - life insurance
Fixed rate		91,363			470,117			22,185			—			583,665
Variable rate		7,507,333			—			—			—			7,507,333
Total premium finance receivables - life insurance	$	7,598,696		$	470,117		$	22,185		$	—		$	8,090,998
Consumer and other
Fixed rate		12,335			5,032			11			482			17,860
Variable rate		32,976			—			—			—			32,976
Total consumer and other	$	45,311		$	5,032		$	11		$	482		$	50,836
Total per category
Fixed rate		6,817,037			5,914,728			2,252,235			1,091,921			16,075,921
Variable rate		21,876,036			260,014			984,514			—			23,120,564
Total loans, net of unearned income	$	28,693,073		$	6,174,742		$	3,236,749		$	1,091,921		$	39,196,485
Variable Rate Loan Pricing by Index:
Prime													$	3,850,970
One- month LIBOR														3,349,999
Three- month LIBOR														122,551
Twelve- month LIBOR														3,582,952
One- year CMT														3,812,549
Other U.S. Treasury tenors														84,837
SOFR tenors														7,670,959
Ameribor tenors														336,618
BSBY tenors														39,185
Other														269,944
Total variable rate													$	23,120,564

LIBOR - London Interbank Offered Rate.
CMT - Constant Maturity Treasury Rate.
SOFR - Secured Overnight Financing Rate.
Ameribor - American Interbank Offered Rate.
BSBY - Bloomberg Short Term Bank Yield Index.

Graph available at the following link: 
http://ml.globenewswire.com/Resource/Download/af5c30bf-cfcb-48dd-a1d5-f5753b798a27

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to LIBOR and SOFR indices which, as shown in the table above, do not mirror the same changes as the Prime rate which has historically moved when the Federal Reserve raises or lowers interest rates. Specifically, the Company has variable rate loans of $3.3 billion tied to one-month LIBOR, $3.6 billion tied to twelve-month LIBOR and $6.6 billion tied to one-month SOFR. The above chart shows:

		Basis Point (bp) Change in
		Prime		1-month LIBOR		12-month LIBOR		1-month SOFR
Fourth Quarter 2022		125	bps	125	bps	70	bps	132	bps
Third Quarter 2022		150		135		116		135
Second Quarter 2022		125		134		152		139
First Quarter 2022		25		35		152		25
Fourth Quarter 2021		0		2		34		-1

 

TABLE 10: ALLOWANCE FOR CREDIT LOSSES

		Three Months Ended																			Years Ended
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(Dollars in thousands)			2022				2022				2022				2022				2021			2022				2021
Allowance for credit losses at beginning of period		$	315,338			$	312,192			$	301,327			$	299,731			$	296,138		$	299,731			$	379,969
Provision for credit losses			47,646				6,420				20,417				4,106				9,299			78,589				(59,263	)
Initial allowance for credit losses recognized on PCD assets acquired during the period(1)			—				—				—				—				470			—				470
Other adjustments			31				(105	)			(56	)			22				5			(108	)			5
Charge-offs:
Commercial			3,019				780				8,928				1,414				4,431			14,141				20,801
Commercial real estate			538				24				40				777				495			1,379				3,293
Home equity			—				43				192				197				135			432				336
Residential real estate			—				5				—				466				1,067			471				1,082
Premium finance receivables - property & casualty			3,629				6,037				2,903				1,671				2,314			14,240				9,020
Premium finance receivables - life insurance			28				—				—				7				—			35				—
Consumer and other			—				635				253				193				157			1,081				487
Total charge-offs			7,214				7,524				12,316				4,725				8,599			31,779				35,019
Recoveries:
Commercial			691				2,523				996				538				389			4,748				2,559
Commercial real estate			61				55				553				32				217			701				1,304
Home equity			65				38				123				93				461			319				1,203
Residential real estate			6				60				6				5				85			77				330
Premium finance receivables - property & casualty			1,279				1,648				1,119				1,476				1,240			5,522				7,989
Premium finance receivables - life insurance			—				—				—				—				—			—				—
Consumer and other			33				31				23				49				26			136				184
Total recoveries			2,135				4,355				2,820				2,193				2,418			11,503				13,569
Net charge-offs			(5,079	)			(3,169	)			(9,496	)			(2,532	)			(6,181	)		(20,276	)			(21,450	)
Allowance for credit losses at period end		$	357,936			$	315,338			$	312,192			$	301,327			$	299,731		$	357,936			$	299,731
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial			0.08	%		(0.06)        %					0.27	%			0.03	%			0.14	%		0.08	%			0.16	%
Commercial real estate			0.02				0.00				(0.02	)			0.03				0.01			0.01				0.02
Home equity			(0.08	)			0.01				0.09				0.13				(0.38	)		0.03				(0.23	)
Residential real estate			0.00				(0.01	)			0.00				0.11				0.25			0.02				0.05
Premium finance receivables - property & casualty			0.16				0.30				0.14				0.02				0.09			0.16				0.02
Premium finance receivables - life insurance			0.00				—				—				0.00				—			0.00				—
Consumer and other			(0.16	)			4.02				1.31				1.19				0.95			1.22				0.66
Total loans, net of unearned income			0.05	%			0.03	%			0.11	%			0.03	%			0.07	%		0.06	%			0.06	%
Loans at period end		$	39,196,485			$	38,167,613			$	37,053,103			$	35,280,547			$	34,789,104
Allowance for loan losses as a percentage of loans at period end			0.69	%			0.64	%			0.68	%			0.71	%			0.71	%
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end			0.91				0.83				0.84				0.85				0.86

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

 

TABLE 11: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

		Three Months Ended																		Years Ended
		Dec 31,			Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,			Dec 31,
(In thousands)		2022				2022				2022				2022				2021			2022			2021
Provision for loan losses		$	29,110		$	(2,385	)		$	10,782			$	5,214			$	4,929		$	42,721		$	(50,563	)
Provision for unfunded lending-related commitments losses			18,358			8,578				9,711				(1,189	)			4,375			35,458			(8,717	)
Provision for held-to-maturity securities losses			178			227				(76	)			81				(5	)		410			17
Provision for credit losses		$	47,646		$	6,420			$	20,417			$	4,106			$	9,299		$	78,589		$	(59,263	)
Allowance for loan losses		$	270,173		$	246,110			$	251,769			$	250,539			$	247,835
Allowance for unfunded lending-related commitments losses			87,275			68,918				60,340				50,629				51,818
Allowance for loan losses and unfunded lending-related commitments losses			357,448			315,028				312,109				301,168				299,653
Allowance for held-to-maturity securities losses			488			310				83				159				78
Allowance for credit losses		$	357,936		$	315,338			$	312,192			$	301,327			$	299,731

 

TABLE 12: ALLOWANCE BY LOAN PORTFOLIO

The table below summarizes the calculation of allowance for loan losses and allowance for unfunded lending-related commitments losses for the Company’s loan portfolios as well as core and niche portfolios, as of December 31, 2022, September 30, 2022 and June 30, 2022.

	As of Dec 31, 2022								As of Sep 30, 2022								As of Jun 30, 2022
(Dollars in thousands)	Recorded Investment			Calculated Allowance			% of its category’s balance		Recorded Investment			Calculated Allowance			% of its category’s balance		Recorded Investment			Calculated Allowance			% of its category’s balance
Commercial:
Commercial, industrial and other, excluding PPP loans	$	12,520,241		$	142,769		1.14	%	$	12,215,592		$	135,315		1.11	%	$	11,965,016		$	142,916		1.19	%
Commercial PPP loans		28,923			0		0.00			43,658			1		0.00			82,089			3		0.00
Commercial real estate:
Construction and development		1,486,930			75,907		5.10			1,525,511			51,389		3.37			1,506,318			45,522		3.02
Non-construction		8,464,017			108,445		1.28			8,052,673			99,329		1.23			7,900,887			98,210		1.24
Home equity		332,698			7,573		2.28			328,822			7,055		2.15			325,826			6,990		2.15
Residential real estate		2,372,383			11,585		0.49			2,235,459			11,023		0.49			2,078,907			10,479		0.50
Premium finance receivables
Commercial insurance loans		5,849,459			9,967		0.17			5,713,340			9,736		0.17			5,541,447			6,840		0.12
Life insurance loans		8,090,998			704		0.01			8,004,856			696		0.01			7,608,433			662		0.01
Consumer and other		50,836			498		0.98			47,702			484		1.01			44,180			487		1.10
Total loans, net of unearned income	$	39,196,485		$	357,448		0.91	%	$	38,167,613		$	315,028		0.83	%	$	37,053,103		$	312,109		0.84	%
Total loans, net of unearned income, excluding PPP loans	$	39,167,562		$	357,448		0.91	%	$	38,123,955		$	315,027		0.83	%	$	36,971,014		$	312,106		0.84	%
Total core loans(1)	$	22,490,701		$	320,403		1.42	%	$	21,697,055		$	273,947		1.26	%	$	20,994,470		$	275,188		1.31	%
Total niche loans(1)		16,676,861			37,045		0.22			16,426,900			41,080		0.25			15,976,544			36,918		0.23
Total PPP loans		28,923			0		0.00			43,658			1		0.00			82,089			3		0.00

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

 

TABLE 13: LOAN PORTFOLIO AGING

(In thousands)		Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021
Loan Balances:
Commercial
Nonaccrual		$	35,579		$	44,293		$	32,436		$	16,878		$	20,399
90+ days and still accruing			462			237			—			—			15
60-89 days past due			21,128			24,641			16,789			1,294			24,262
30-59 days past due			56,696			34,917			14,120			31,889			43,861
Current			12,435,299			12,155,162			11,983,760			11,533,902			11,815,531
Total commercial		$	12,549,164		$	12,259,250		$	12,047,105		$	11,583,963		$	11,904,068
Commercial real estate
Nonaccrual		$	6,387		$	10,477		$	10,718		$	12,301		$	21,746
90+ days and still accruing			—			—			—			—			—
60-89 days past due			2,244			6,041			6,771			2,648			284
30-59 days past due			30,675			29,971			34,220			30,141			40,443
Current			9,911,641			9,531,695			9,355,496			9,189,984			8,927,813
Total commercial real estate		$	9,950,947		$	9,578,184		$	9,407,205		$	9,235,074		$	8,990,286
Home equity
Nonaccrual		$	1,487		$	1,320		$	1,084		$	1,747		$	2,574
90+ days and still accruing			—			—			—			—			—
60-89 days past due			—			125			154			199			—
30-59 days past due			2,152			848			930			545			1,120
Current			329,059			326,529			323,658			318,944			331,461
Total home equity		$	332,698		$	328,822		$	325,826		$	321,435		$	335,155
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies(1)		$	164,788		$	148,664			113,856		$	50,096		$	30,828
Nonaccrual			10,171			9,787			8,330			7,262			16,440
90+ days and still accruing			—			—			—			—			—
60-89 days past due			4,364			2,149			534			293			982
30-59 days past due			9,982			15			147			18,808			12,145
Current			2,183,078			2,074,844			1,956,040			1,723,526			1,576,704
Total residential real estate		$	2,372,383		$	2,235,459		$	2,078,907		$	1,799,985		$	1,637,099
Premium finance receivables - property & casualty
Nonaccrual		$	13,470		$	13,026		$	13,303		$	6,707		$	5,433
90+ days and still accruing			15,841			16,624			6,447			12,363			7,210
60-89 days past due			14,926			15,301			15,299			8,890			15,490
30-59 days past due			40,557			21,128			23,313			21,278			22,419
Current			5,764,665			5,647,261			5,483,085			4,888,170			4,804,935
Total Premium finance receivables - property & casualty		$	5,849,459		$	5,713,340		$	5,541,447		$	4,937,408		$	4,855,487
Premium finance receivables - life insurance
Nonaccrual		$	—		$	—		$	—		$	—		$	—
90+ days and still accruing			17,245			1,831			—			—			7
60-89 days past due			5,260			13,628			1,796			22,401			12,614
30-59 days past due			68,725			44,954			65,155			15,522			66,651
Current			7,999,768			7,944,443			7,541,482			7,316,240			6,963,538
Total Premium finance receivables - life insurance		$	8,090,998		$	8,004,856		$	7,608,433		$	7,354,163		$	7,042,810
Consumer and other
Nonaccrual		$	6		$	7		$	8		$	4		$	477
90+ days and still accruing			49			31			25			43			137
60-89 days past due			18			26			8			5			34
30-59 days past due			224			343			119			221			509
Current			50,539			47,295			44,020			48,246			23,042
Total consumer and other		$	50,836		$	47,702		$	44,180		$	48,519		$	24,199
Total loans, net of unearned income
Early buy-out loans guaranteed by U.S. government agencies(1)		$	164,788		$	148,664		$	113,856		$	50,096		$	30,828
Nonaccrual			67,100			78,910			65,879			44,899			67,069
90+ days and still accruing			33,597			18,723			6,472			12,406			7,369
60-89 days past due			47,940			61,911			41,351			35,730			53,666
30-59 days past due			209,011			132,176			138,004			118,404			187,148
Current			38,674,049			37,727,229			36,687,541			35,019,012			34,443,024
Total loans, net of unearned income		$	39,196,485		$	38,167,613		$	37,053,103		$	35,280,547		$	34,789,104

(1)   Early buy-out loans are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.

 

TABLE 14: NON-PERFORMING ASSETS⁽¹⁾ AND TROUBLED DEBT RESTRUCTURINGS (“TDRs”)

	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(Dollars in thousands)		2022				2022				2022				2022				2021
Loans past due greater than 90 days and still accruing(2):
Commercial	$	462			$	237			$	—			$	—			$	15
Commercial real estate		—				—				—				—				—
Home equity		—				—				—				—				—
Residential real estate		—				—				—				—				—
Premium finance receivables - property & casualty		15,841				16,624				6,447				12,363				7,210
Premium finance receivables - life insurance		17,245				1,831				—				—				7
Consumer and other		49				31				25				43				137
Total loans past due greater than 90 days and still accruing		33,597				18,723				6,472				12,406				7,369
Non-accrual loans:
Commercial		35,579				44,293				32,436				16,878				20,399
Commercial real estate		6,387				10,477				10,718				12,301				21,746
Home equity		1,487				1,320				1,084				1,747				2,574
Residential real estate		10,171				9,787				8,330				7,262				16,440
Premium finance receivables - property & casualty		13,470				13,026				13,303				6,707				5,433
Premium finance receivables - life insurance		—				—				—				—				—
Consumer and other		6				7				8				4				477
Total non-accrual loans		67,100				78,910				65,879				44,899				67,069
Total non-performing loans:
Commercial		36,041				44,530				32,436				16,878				20,414
Commercial real estate		6,387				10,477				10,718				12,301				21,746
Home equity		1,487				1,320				1,084				1,747				2,574
Residential real estate		10,171				9,787				8,330				7,262				16,440
Premium finance receivables - property & casualty		29,311				29,650				19,750				19,070				12,643
Premium finance receivables - life insurance		17,245				1,831				—				—				7
Consumer and other		55				38				33				47				614
Total non-performing loans	$	100,697			$	97,633			$	72,351			$	57,305			$	74,438
Other real estate owned		8,589				5,376				5,574				4,978				1,959
Other real estate owned - from acquisitions		1,311				1,311				1,265				1,225				2,312
Other repossessed assets		—				—				—				—				—
Total non-performing assets	$	110,597			$	104,320			$	79,190			$	63,508			$	78,709
Accruing TDRs not included within non-performing assets	$	36,620			$	34,238			$	36,184			$	35,922			$	37,486
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial		0.29	%			0.36	%			0.27	%			0.15	%			0.17	%
Commercial real estate		0.06				0.11				0.11				0.13				0.24
Home equity		0.45				0.40				0.33				0.54				0.77
Residential real estate		0.43				0.44				0.40				0.40				1.00
Premium finance receivables - property & casualty		0.50				0.52				0.36				0.39				0.26
Premium finance receivables - life insurance		0.21				0.02				—				—				0.00
Consumer and other		0.11				0.08				0.07				0.10				2.54
Total loans, net of unearned income		0.26	%			0.26	%			0.20	%			0.16	%			0.21	%
Total non-performing assets as a percentage of total assets		0.21	%			0.20	%			0.16	%			0.13	%			0.16	%
Allowance for loan losses and unfunded lending-related commitments losses as a percentage of non-accrual loans		532.71	%			399.22	%			473.76	%			670.77	%			446.78	%

(1)   Excludes early buy-out loans guaranteed by U.S. government agencies. Early buy-out loans are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.
(2)   As of December 31, 2022, no TDRs were past due greater than 90 days and still accruing. As of September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021, approximately $1.1 million,$541,000, $320,000 and $320,000, respectively, of TDRs were past due greater than 90 days and still accruing interest.

 

Non-performing Loans Rollforward, excluding early buy-out loans guaranteed by U.S. government agencies 

	Three Months Ended																			Years Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(In thousands)		2022				2022				2022				2022				2021			2022				2021
Balance at beginning of period	$	97,633			$	72,351			$	57,305			$	74,438			$	90,041		$	74,438			$	127,513
Additions from becoming non-performing in the respective period		10,027				35,234				22,841				4,141				6,851			72,243				38,848
Return to performing status		(1,167	)			(154	)			(1,000	)			(729	)			(6,616	)		(3,050	)			(10,592	)
Payments received		(16,351	)			(20,417	)			(4,029	)			(20,139	)			(13,212	)		(60,936	)			(53,823	)
Transfer to OREO and other repossessed assets		(3,365	)			(185	)			(1,611	)			(4,377	)			(275	)		(9,538	)			(6,027	)
Charge-offs, net		(1,363	)			(341	)			(1,969	)			(2,354	)			(5,167	)		(6,027	)			(13,351	)
Net change for niche loans(1)		15,283				11,145				814				6,325				2,816			33,567				(8,130	)
Balance at end of period	$	100,697			$	97,633			$	72,351			$	57,305			$	74,438		$	100,697			$	74,438

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

 

TDRs

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(In thousands)		2022			2022			2022			2022			2021
Accruing TDRs:
Commercial	$	2,462		$	2,254		$	2,456		$	2,773		$	4,131
Commercial real estate		15,048			8,967			9,659			10,068			8,421
Residential real estate and other		19,110			23,017			24,069			23,081			24,934
Total accrual	$	36,620		$	34,238		$	36,184		$	35,922		$	37,486
Non-accrual TDRs:(1)
Commercial	$	345		$	4,599		$	4,786		$	4,935		$	6,746
Commercial real estate		1,823			1,880			1,955			2,050			2,050
Residential real estate and other		2,311			2,516			2,453			1,964			3,027
Total non-accrual	$	4,479		$	8,995		$	9,194		$	8,949		$	11,823
Total TDRs:
Commercial	$	2,807		$	6,853		$	7,242		$	7,708		$	10,877
Commercial real estate		16,871			10,847			11,614			12,118			10,471
Residential real estate and other		21,421			25,533			26,522			25,045			27,961
Total TDRs	$	41,099		$	43,233		$	45,378		$	44,871		$	49,309

(1)   Included in total non-performing loans.

 

Other Real Estate Owned

	Three Months Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(In thousands)		2022				2022				2022				2022				2021
Balance at beginning of period	$	6,687			$	6,839			$	6,203			$	4,271			$	13,845
Disposals/resolved		(152	)			(133	)			(1,172	)			(2,497	)			(9,664	)
Transfers in at fair value, less costs to sell		3,365				134				2,090				4,429				275
Fair value adjustments		—				(153	)			(282	)			—				(185	)
Balance at end of period	$	9,900			$	6,687			$	6,839			$	6,203			$	4,271
	Period End
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
Balance by Property Type:		2022				2022				2022				2022				2021
Residential real estate	$	1,585			$	1,585			$	1,630			$	1,127			$	1,310
Residential real estate development		—				—				133				—				—
Commercial real estate		8,315				5,102				5,076				5,076				2,961
Total	$	9,900			$	6,687			$	6,839			$	6,203			$	4,271

 

TABLE 15: NON-INTEREST INCOME

	Three Months Ended																				Q4 2022 compared to Q3 2022							Q4 2022 compared to Q4 2021
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(Dollars in thousands)		2022				2022				2022				2022				2021			$ Change				% Change			$ Change				% Change
Brokerage	$	4,177			$	4,587			$	4,272			$	4,632			$	5,292			$	(410	)		(9	)%		$	(1,115	)		(21	)%
Trust and asset management		26,550				28,537				27,097				26,762				27,197				(1,987	)		(7	)			(647	)		(2	)
Total wealth management		30,727				33,124				31,369				31,394				32,489				(2,397	)		(7	)			(1,762	)		(5	)
Mortgage banking		17,407				27,221				33,314				77,231				53,138				(9,814	)		(36	)			(35,731	)		(67	)
Service charges on deposit accounts		13,054				14,349				15,888				15,283				14,734				(1,295	)		(9	)			(1,680	)		(11	)
Losses on investment securities, net		(6,745	)			(3,103	)			(7,797	)			(2,782	)			(1,067	)			(3,642	)		NM				(5,678	)		NM
Fees from covered call options		7,956				1,366				1,069				3,742				1,128				6,590			NM				6,828			NM
Trading (losses) gains, net		(306	)			(7	)			176				3,889				206				(299	)		NM				(512	)		NM
Operating lease income, net		12,384				12,644				15,007				15,475				14,204				(260	)		(2	)			(1,820	)		(13	)
Other:
Interest rate swap fees		2,319				1,997				3,300				4,569				3,526				322			16				(1,207	)		(34	)
BOLI		1,394				248				(884	)			48				1,192				1,146			NM				202			17
Administrative services		1,736				1,533				1,591				1,853				1,846				203			13				(110	)		(6	)
Foreign currency remeasurement gains (losses)		277				(93	)			97				11				111				370			NM				166			NM
Early pay-offs of capital leases		131				138				160				265				249				(7	)		(5	)			(118	)		(47	)
Miscellaneous		13,505				12,065				9,652				11,812				12,011				1,440			12				1,494			12
Total Other		19,362				15,888				13,916				18,558				18,935				3,474			22				427			2
Total Non-Interest Income	$	93,839			$	101,482			$	102,942			$	162,790			$	133,767			$	(7,643	)		(8	)%		$	(39,928	)		(30	)%

NM - Not meaningful.
BOLI - Bank-owned life insurance.

 

	Years Ended
	Dec 31,				Dec 31,				$				%
(Dollars in thousands)		2022				2021			Change				Change
Brokerage	$	17,668			$	20,710			$	(3,042	)		(15	)%
Trust and asset management		108,946				103,309				5,637			5
Total wealth management		126,614				124,019				2,595			2
Mortgage banking		155,173				273,010				(117,837	)		(43	)
Service charges on deposit accounts		58,574				54,168				4,406			8
Losses on investment securities, net		(20,427	)			(1,059	)			(19,368	)		NM
Fees from covered call options		14,133				3,673				10,460			NM
Trading gains, net		3,752				245				3,507			NM
Operating lease income, net		55,510				53,691				1,819			3
Other:
Interest rate swap fees		12,185				13,702				(1,517	)		(11	)
BOLI		806				5,812				(5,006	)		(86	)
Administrative services		6,713				5,689				1,024			18
Foreign currency remeasurement gains (losses)		292				(495	)			787			NM
Early pay-offs of leases		694				601				93			15
Miscellaneous		47,034				53,064				(6,030	)		(11	)
Total Other		67,724				78,373				(10,649	)		(14	)
Total Non-Interest Income	$	461,053			$	586,120			$	(125,067	)		(21	)%

NM - Not meaningful. 
BOLI - Bank-owned life insurance.

 

TABLE 16: NON-INTEREST EXPENSE

	Three Months Ended																	Q4 2022 compared to Q3 2022							Q4 2022 compared to Q4 2021
	Dec 31,			Sep 30,			Jun 30,			Mar 31,				Dec 31,
(Dollars in thousands)	2022			2022			2022				2022				2021			$ Change				% Change			$ Change				% Change
Salaries and employee benefits:
Salaries	$	100,232		$	97,419		$	92,414		$	92,116			$	91,612			$	2,813			3	%		$	8,620			9	%
Commissions and incentive compensation		49,546			50,403			46,131			51,793				49,923				(857	)		(2	)			(377	)		(1	)
Benefits		30,553			28,273			28,781			28,446				25,596				2,280			8				4,957			19
Total salaries and employee benefits		180,331			176,095			167,326			172,355				167,131				4,236			2				13,200			8
Software and equipment		24,699			24,126			24,250			22,810				23,708				573			2				991			4
Operating lease equipment		10,078			9,448			8,774			9,708				10,147				630			7				(69	)		(1	)
Occupancy, net		17,763			17,727			17,651			17,824				18,343				36			0				(580	)		(3	)
Data processing		7,927			7,767			8,010			7,505				7,207				160			2				720			10
Advertising and marketing		14,279			16,600			16,615			11,924				13,981				(2,321	)		(14	)			298			2
Professional fees		9,267			7,544			7,876			8,401				7,551				1,723			23				1,716			23
Amortization of other acquisition-related intangible assets		1,436			1,492			1,579			1,609				1,811				(56	)		(4	)			(375	)		(21	)
FDIC insurance		6,775			7,186			6,949			7,729				7,317				(411	)		(6	)			(542	)		(7	)
OREO expense, net		369			229			294			(1,032	)			(641	)			140			61				1,010			NM
Other:
Lending expenses, net of deferred origination costs		4,951			4,533			4,270			6,821				5,525				418			9				(574	)		(10	)
Travel and entertainment		5,681			4,252			3,897			2,676				3,782				1,429			34				1,899			50
Miscellaneous		24,280			19,470			21,177			15,968				17,537				4,810			25				6,743			38
Total other		34,912			28,255			29,344			25,465				26,844				6,657			24				8,068			30
Total Non-Interest Expense	$	307,836		$	296,469		$	288,668		$	284,298			$	283,399			$	11,367			4	%		$	24,437			9	%

NM - Not meaningful.

 

		Years Ended
		Dec 31,				Dec 31,			$				%
(Dollars in thousands)			2022				2021		Change				Change
Salaries and employee benefits:
Salaries		$	382,181			$	361,915		$	20,266			6	%
Commissions and incentive compensation			197,873				222,067			(24,194	)		(11	)
Benefits			116,053				107,687			8,366			8
Total salaries and employee benefits			696,107				691,669			4,438			1
Software and equipment			95,885				87,515			8,370			10
Operating lease equipment			38,008				40,880			(2,872	)		(7	)
Occupancy, net			70,965				74,184			(3,219	)		(4	)
Data processing			31,209				27,279			3,930			14
Advertising and marketing			59,418				47,275			12,143			26
Professional fees			33,088				29,494			3,594			12
Amortization of other acquisition-related intangible assets			6,116				7,734			(1,618	)		(21	)
FDIC insurance			28,639				27,030			1,609			6
OREO expense, net			(140	)			(1,654	)		1,514			(92	)
Other:
Lending expenses, net of deferred origination costs			20,575				22,794			(2,219	)		(10	)
Travel and entertainment			16,506				10,048			6,458			64
Miscellaneous			80,895				68,296			12,599			18
Total other			117,976				101,138			16,838			17
Total Non-Interest Expense		$	1,177,271			$	1,132,544		$	44,727			4	%

 

TABLE 17: SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES/RATIOS

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

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

	Three Months Ended																			Years Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(Dollars and shares in thousands)		2022				2022				2022				2022				2021			2022				2021
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:
(A) Interest Income (GAAP)	$	580,745			$	466,478			$	371,968			$	328,252			$	327,979		$	1,747,443			$	1,275,484
Taxable-equivalent adjustment:
- Loans		1,594				1,030				568				427				417			3,619				1,627
- Liquidity Management Assets		538				502				472				465				486			1,977				1,972
- Other Earning Assets		1				1				1				2				2			5				2
(B) Interest Income (non-GAAP)	$	582,878			$	468,011			$	373,009			$	329,146			$	328,884		$	1,753,044			$	1,279,085
(C) Interest Expense (GAAP)		123,929				65,030				34,164				28,958				32,003			252,081				150,527
(D) Net Interest Income (GAAP) (A minus C)	$	456,816			$	401,448			$	337,804			$	299,294			$	295,976		$	1,495,362			$	1,124,957
(E) Net Interest Income (non-GAAP) (B minus C)	$	458,949			$	402,981			$	338,845			$	300,188			$	296,881		$	1,500,963			$	1,128,558
Net interest margin (GAAP)		3.71	%			3.34	%			2.92	%			2.60	%			2.54	%		3.15	%			2.57	%
Net interest margin, fully taxable-equivalent (non-GAAP)		3.73				3.35				2.93				2.61				2.55			3.17				2.58
(F) Non-interest income	$	93,839			$	101,482			$	102,942			$	162,790			$	133,767		$	461,053			$	586,120
(G) Losses on investment securities, net		(6,745	)			(3,103	)			(7,797	)			(2,782	)			(1,067	)		(20,427	)			(1,059	)
(H) Non-interest expense		307,836				296,469				288,668				284,298				283,399			1,177,271				1,132,544
Efficiency ratio (H/(D+F-G))		55.23	%			58.59	%			64.36	%			61.16	%			65.78	%		59.55	%			66.15	%
Efficiency ratio (non-GAAP) (H/(E+F-G))		55.02				58.41				64.21				61.04				65.64			59.38				66.01
Reconciliation of Non-GAAP Tangible Common Equity Ratio:
Total shareholders’ equity (GAAP)	$	4,796,838			$	4,637,980			$	4,727,623			$	4,492,256			$	4,498,688
Less: Non-convertible preferred stock (GAAP)		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)
Less: Intangible assets (GAAP)		(675,710	)			(676,699	)			(679,827	)			(682,101	)			(683,456	)
(I) Total tangible common shareholders’ equity (non-GAAP)	$	3,708,628			$	3,548,781			$	3,635,296			$	3,397,655			$	3,402,732
(J) Total assets (GAAP)	$	52,949,649			$	52,382,939			$	50,969,332			$	50,250,661			$	50,142,143
Less: Intangible assets (GAAP)		(675,710	)			(676,699	)			(679,827	)			(682,101	)			(683,456	)
(K) Total tangible assets (non-GAAP)	$	52,273,939			$	51,706,240			$	50,289,505			$	49,568,560			$	49,458,687
Common equity to assets ratio (GAAP) (L/J)		8.3	%			8.1	%			8.5	%			8.1	%			8.1	%
Tangible common equity ratio (non-GAAP) (I/K)		7.1				6.9				7.2				6.9				6.9

 

	Three Months Ended																			Years Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,			Dec 31,				Dec 31,
(Dollars and shares in thousands)		2022				2022				2022				2022				2021			2022				2021
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity	$	4,796,838			$	4,637,980			$	4,727,623			$	4,492,256			$	4,498,688
Less: Preferred stock		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)
(L) Total common equity	$	4,384,338			$	4,225,480			$	4,315,123			$	4,079,756			$	4,086,188
(M) Actual common shares outstanding		60,794				60,743				60,722				57,253				57,054
Book value per common share (L/M)	$	72.12			$	69.56			$	71.06			$	71.26			$	71.62
Tangible book value per common share (non-GAAP) (I/M)		61.00				58.42				59.87				59.34				59.64
Reconciliation of Non-GAAP Return on Average Tangible Common Equity:
(N) Net income applicable to common shares	$	137,826			$	135,970			$	87,522			$	120,400			$	91,766		$	481,718			$	438,187
Add: Intangible asset amortization		1,436				1,492				1,579				1,609				1,811			6,116				7,734
Less: Tax effect of intangible asset amortization		(370	)			(425	)			(445	)			(430	)			(505	)		(1,664	)			(2,080	)
After-tax intangible asset amortization	$	1,066			$	1,067			$	1,134			$	1,179			$	1,306		$	4,452			$	5,654
(O) Tangible net income applicable to common shares (non-GAAP)	$	138,892			$	137,037			$	88,656			$	121,579			$	93,072		$	486,170			$	443,841
Total average shareholders’ equity	$	4,710,856			$	4,795,387			$	4,526,110			$	4,500,460			$	4,433,953		$	4,634,224			$	4,300,742
Less: Average preferred stock		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)		(412,500	)			(412,500	)
(P) Total average common shareholders’ equity	$	4,298,356			$	4,382,887			$	4,113,610			$	4,087,960			$	4,021,453		$	4,221,724			$	3,888,242
Less: Average intangible assets		(676,371	)			(678,953	)			(681,091	)			(682,603	)			(677,470	)		(679,735	)			(678,739	)
(Q) Total average tangible common shareholders’ equity (non-GAAP)	$	3,621,985			$	3,703,934			$	3,432,519			$	3,405,357			$	3,343,983		$	3,541,989			$	3,209,503
Return on average common equity, annualized (N/P)		12.72	%			12.31	%			8.53	%			11.94	%			9.05	%		11.41	%			11.27	%
Return on average tangible common equity, annualized (non-GAAP) (O/Q)		15.21				14.68				10.36				14.48				11.04			13.73				13.83
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income, Adjusted for Changes in Fair Value of MSRs, net of economic hedge and Early Buy-out Loans Guaranteed by U.S. Government Agencies:
Income before taxes	$	195,173			$	200,041			$	131,661			$	173,680			$	137,045		$	700,555			$	637,796
Add: Provision for credit losses		47,646				6,420				20,417				4,106				9,299			78,589				(59,263	)
Pre-tax income, excluding provision for credit losses (non-GAAP)	$	242,819			$	206,461			$	152,078			$	177,786			$	146,344		$	779,144			$	578,533
Less: Changes in fair value of MSRs, net of economic hedge and early buy-out loans guaranteed by U.S. government agencies		702				2,472				(445	)			(43,365	)			(6,656	)		(40,636	)			(18,273	)
Pre-tax income, excluding provision for credit losses, adjusted for changes in fair value of MSRs, net of economic hedge and early buy-out loans guaranteed by U.S. government agencies (non-GAAP)	$	243,521			$	208,933			$	151,633			$	134,421			$	139,688		$	738,508			$	560,260

 

	Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,				Dec 31,
		2020				2019				2018				2017				2016				2015				2014				2013				2012
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity	$	4,115,995			$	3,691,250			$	3,267,570			$	2,976,939			$	2,695,617			$	2,352,274			$	2,069,822			$	1,900,589			$	1,804,705
Less: Non-convertible preferred stock (GAAP)		(412,500	)			(125,000	)			(125,000	)			(125,000	)			(251,257	)			(251,287	)			(126,467	)			(126,477	)			(176,406	)
(R) Less: Intangible assets (GAAP)		(681,747	)			(692,277	)			(622,565	)			(519,505	)			(520,438	)			(495,970	)			(424,445	)			(393,760	)			(366,348	)
(I) Total tangible common shareholders’ equity (non-GAAP)	$	3,021,748			$	2,873,973			$	2,520,005			$	2,332,434			$	1,923,922			$	1,605,017			$	1,518,910			$	1,380,352			$	1,261,951
Actual common shares outstanding		56,770				57,822				56,408				55,965				51,881				48,383				46,805				46,117				36,858
Add: Tangible equity unit conversion shares		—				—				—				—				—				—				—				—				6,241
(M) Common shares used for book value calculation		56,770				57,822				56,408				55,965				51,881				48,383				46,805				46,117				43,099
Book value per common share ((I-R)/M)	$	65.24			$	61.68			$	55.71			$	50.96			$	47.11			$	43.42			$	41.52			$	38.47			$	37.78
Tangible book value per common share (non-GAAP) (I/M)		53.23				49.70				44.67				41.68				37.08				33.17				32.45				29.93				29.28

 

WINTRUST SUBSIDIARIES AND LOCATIONS

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

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

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

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

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “will,” “may,” “should,” “would” and “could.” Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, such as the impacts of the COVID-19 pandemic (including the continued emergence of variant strains), and which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of the Company’s 2021 Annual Report on Form 10-K and in any of the Company’s subsequent SEC filings. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things, statements relating to the Company’s future financial performance, the performance of its loan portfolio, the expected amount of future credit reserves and charge-offs, delinquency trends, growth plans, regulatory developments, securities that the Company may offer from time to time, and management’s long-term performance goals, as well as statements relating to the anticipated effects on financial condition and results of operations from expected developments or events, the Company’s business and growth strategies, including future acquisitions of banks, specialty finance or wealth management businesses, internal growth and plans to form additional de novo banks or branch offices. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:

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

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

CONFERENCE CALL, WEBCAST AND REPLAY

The Company will hold a conference call on Thursday, January 19, 2023 at 10:00 a.m. (CST) regarding fourth quarter and full year 2022 earnings results. Individuals interested in participating in the call by addressing questions to management should register for the call to receive the dial-in numbers and unique PIN at the link included within the Company’s press release dated December 22, 2022 available at the Investor Relations, Investor News and Events, Press Releases link on its website at https://www.wintrust.com. A separate simultaneous audio-only webcast link is included within the press release referenced above. Registration for and a replay of the audio-only webcast with an accompanying slide presentation will be available at https://www.wintrust.com, Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the fourth quarter and full year 2022 earnings press release will also be available on the home page of the Company’s website at https://www.wintrust.com and at the Investor Relations, Investor News and Events, Press Releases link on its website.

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