WINTRUST FINANCIAL CORPORATION Wintrust Financial Corporation
Earnings Release
Presentation
Q4 2020
Q4 2020 Highlights
Performance Highlights | vs. Q3 2020 |
(Q4 2020) | |
$101.2 million | $(6.1) million | ||
Net Income | Net Income | ||
$1.63 | $(0.04) | ||
Diluted EPS1 | Diluted EPS1 | ||
0.92% | -7 bps2 | ||
ROA3 | ROA3 | ||
10.30% | -36 bps2 | ||
ROE4 | ROE4 | ||
1.12% | +25 bps2 | ||
Net Overhead Ratio | Net Overhead Ratio | ||
67.67% | +566 bps2 | ||
Efficiency Ratio (GAAP) | Efficiency Ratio (GAAP) | ||
67.53% | +567 bps2 | ||
Efficiency Ratio (Non-GAAP5) | Efficiency Ratio (Non-GAAP5) | ||
As of 12/31/2020 | vs. 9/30/2020 | ||
$45.1 billion | $+1.3 billion | ||
Total Assets | Total Assets | ||
$32.1 billion | $(0.1) billion | ||
Total Loans | Total Loans | ||
$37.1 billion | $+1.2 billion | ||
Total Deposits | Total Deposits | ||
Fourth Quarter 2020 Highlights as compared to Third Quarter 2020
- Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $607 million primarily due to growth in commercial loans and life insurance premium finance receivables.
- Total deposits increased by $1.2 billion, not withstanding the return of approximately $666 million in wholesale deposits during the fourth quarter of 2020.
- Net interest income increased by $3.5 million primarily due to a reduction in the rate on interest- bearing deposits and loan growth.
- Provision for credit losses totaled $1.2 million in the fourth quarter of 2020 as compared to $25.0 million in the third quarter of 2020.
- Recorded net charge-offs of $10.3 million in the fourth quarter of 2020, as compared to net charge-offs of $9.3 million in the third quarter of 2020. Net charge-offs as a percentage of average total loans, totaled 13 basis points in the fourth quarter of 2020 on an annualized basis compared to 12 basis points on an annualized basis in the third quarter of 2020.
- Mortgage banking revenue decreased by $21.7 million to $86.8 million for the fourth quarter of 2020 as compared to $108.5 million in the prior quarter.
- Outstanding COVID-19 related loan modifications for customers totaled approximately $345 million or 1.2% of total loans, excluding PPP loans, as of December 31, 2020 as compared to $413 million or 1.4% as of September 30, 2020.
Other items of note from the Fourth Quarter 2020
- The following items had a $13.2 million unfavorable pre-tax income impact on the fourth quarter of 2020:
- Recorded a decrease in the value of mortgage servicing rights related to changes in fair value model assumptions of $5.2 million in the fourth quarter of 2020 as compared to a decline of $3.0 million in the prior quarter.
- Accrued $6.6 million of contingent consideration expense in the fourth quarter of 2020 related to the previous acquisition of mortgage operations as compared to $6.3 million in the third quarter of 2020, which was recorded in other non-interest expense.
- Recorded an impairment charge of $1.4 million related to the planned closure of 10 bank branches.
- Repurchased 974,150 shares of our common stock at a cost of $54.9 million, or an average price of $56.40 per share.
-
Diluted EPS: Net Income Per Common Share - Diluted 2 Bps: Basis Points 3 ROA: Return on Average Assets2
4 ROE: Return on Average Common Equity 5See Non-GAAP reconciliation on pg. 18
Earnings Summary | |||||||||
Condensed Income Statement | Current Q | Difference vs. Current Q | Net Income & ROA ($ in Millions) | ||||||
Thousands ($) | Q4 2020 | Q3 2020 | Q4 2019 | ||||||
Net Interest Income | $259,397 | $3,461 | $(2,482) | ||||||
Non-Interest Income | $158,361 | $(12,232) | $46,141 | ||||||
Net Revenue | $417,758 | $(8,771) | $43,659 | ||||||
Non-Interest Expense | $281,867 | $17,648 | $32,276 | ||||||
Pre-Provision Net Revenue | $135,891 | $(26,419) | $11,383 | ||||||
Provision For Credit Losses | $1,180 | $(23,846) | $(6,646) | ||||||
Income Before Taxes | $134,711 | $(2,573) | $18,029 | ||||||
Income Tax Expense1 | $33,507 | $3,538 | $2,789 | ||||||
Net Income | $101,204 | $(6,111) | $15,240 | ||||||
Preferred Stock Dividends2 | $6,991 | $(3,295) | $4,941 | ||||||
Net Income Available to Common Shares | $94,213 | $(2,816) | $10,299 | ||||||
Diluted EPS | $1.63 | $(0.04) | $0.19 | Pre-Tax Income, excluding Provision for Credit Losses - |
5 Year Trend (Non-GAAP3) ($ in Millions) | ||||
ROA | 0.92% | -7 bps | -4 bps | |
ROE | 10.30% | -36 bps | 78 bps | |
Diluted EPS |
- Q3 2020 had a $9.0 million state income tax benefit.
3 | ||||||||
2 Preferred dividends were $7.0 million in Q4 2020. Recorded preferred dividends of $10.3 million in Q3 2020 | 3 See Non-GAAP reconciliation on pg. 19 | |||||||
including dividends declared for Q3 2020 as well as a stub period related to the issuance of preferred stock in Q2 2020. |
Loan Portfolio
Key Observations
- Total loans, excluding PPP loans, increased by $607 million primarily due to growth in commercial loans and life insurance premium finance receivables. This growth also included a $71 million net increase in residential real estate loans for investment as the Company decided to allocate a portion of its current and future mortgage production for investment.
- In addition, during Q4 2020, the Company exercised its early buyout option on $248 million of eligible loans previously sold to the Government National Mortgage Association ("GNMA") recorded in mortgage loans held-for-sale.
- Before the impact of scheduled payments and prepayments, gross commercial and commercial real estate loan pipelines were estimated to be approximately $1.1 billion to $1.3 billion at December 31, 2020. When adjusted for the probability of closing, the pipelines were estimated to be approximately $650 million to $750 million at December 31, 2020.
Total Loans ($ in Billions)
Year-over-Year Change |
$5.3B or 20% |
Loan Composition (as of 12/31/2020)
18%
29% | |
13% | |
5% | 8% |
26% | |
1% | |
Commercial excl. PPP Commercial PPP Commercial Real Estate Home Equity Residential Real Estate
Premium Finance Receivables - Commercial Premium Finance Receivables - Life Insurance
Total Loans as of 12/31/2020 vs. 9/30/2020 ($ in Millions)
$342 | ||||||||||||||||||
$369 | ||||||||||||||||||
2,136 | $71 | $71 | ||||||||||||||||
$(24) | $32,079 | |||||||||||||||||
$(21) | ||||||||||||||||||
$(663) | ||||||||||||||||||
$(196) | $(6) | |||||||||||||||||
30/2020 Commercial | Commercial | Commercial | Home | Residential | Residential | Premium | Premium | Consumer | 12/31/2020 |
excl. PPP | PPP | Real Estate | Equity | Real Estate | mortgage | Finance | Finance | & Other | |
loans for | loans, early | Receivables | Receivables | ||||||
investment | buy-out | - | - Life | ||||||
eligible | Commercial | Insurance | |||||||
loans | |||||||||
guaranteed | |||||||||
by U.S. | |||||||||
Government | |||||||||
Agencies |
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Wintrust Financial Corporation published this content on 20 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 January 2021 22:05:03 UTC
