ASSET QUALITY
Allowance for Credit Losses
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2008 2007 2008 2007
Allowance for loan
losses at beginning
of period $57,633 $47,392 $50,389 $46,055
Provision for credit
losses 24,129 4,365 42,985 8,662
Charge-offs:
Commercial and
commercial real
estate loans 13,543 2,239 22,930 4,929
Home equity loans 28 - 53 133
Residential real
estate loans 786 - 1,004 147
Consumer and other
loans 125 65 344 463
Premium finance
receivables 1,002 625 2,798 1,760
Indirect consumer
loans 292 247 821 527
Tricom finance
receivables 40 102 117 152
Total charge-offs 15,816 3,278 28,067 8,111
Recoveries:
Commercial and
commercial real
estate loans 216 82 285 1,498
Home equity loans - - - 60
Residential real
estate loans - - - -
Consumer and other
loans 18 37 82 100
Premium finance
receivables 118 115 518 366
Indirect consumer
loans 29 44 135 124
Tricom finance
receivables - - - 3
Total recoveries 381 278 1,020 2,151
Net charge-offs (15,435) (3,000) (27,047) (5,960)
Allowance for loan
losses at period end $66,327 $48,757 $66,327 $48,757
Allowance for unfunded
loan commitments at
period end $493 $457 $493 $457
Allowance for credit
losses at period end $66,820 $49,214 $66,820 $49,214
Annualized net
charge-offs by
category as a
percentage of its
own respective
category's average:
Commercial and
commercial real
estate loans 1.15% 0.21% 0.67% 0.11%
Home equity loans 0.01 - 0.01 0.02
Residential real
estate loans 0.92 - 0.39 0.06
Consumer and other
loans 0.30 0.11 0.25 0.51
Premium finance
receivables 0.29 0.16 0.26 0.15
Indirect consumer loans 0.49 0.32 0.41 0.22
Tricom finance
receivables 0.78 1.30 0.66 0.59
Total loans, net of
unearned income 0.84% 0.17% 0.50% 0.12%
Net charge-offs as a
percentage of the
provision for loan
losses 63.97% 68.72% 62.92% 68.81%
Loans at period-end $7,322,545 $6,808,359
Allowance for loan
losses as a percentage
of loans at period-end 0.91% 0.72%
Allowance for credit
losses as a percentage
of loans at period-end 0.91% 0.72%
The allowance for credit losses is comprised of the allowance for loan
losses and the allowance for lending-related commitments. The allowance for
loan losses is a reserve against loan amounts that are actually funded and
outstanding while the allowance for lending-related commitments relates to
certain amounts that Wintrust is committed to lend but for which funds have
not yet been disbursed. The allowance for lending-related commitments
(separate liability account) represents the portion of the provision for
credit losses that was associated with unfunded lending-related
commitments. The provision for credit losses may contain both a component
related to funded loans (provision for loan losses) and a component related
to lending-related commitments (provision for unfunded loan commitments and
letters of credit).
Non-performing Loans
The following table sets forth Wintrust's non-performing loans at the
dates indicated.
September 30, June 30, December 31, September 30,
(Dollars in thousands) 2008 2008 2007 2007
Loans past due greater
than 90 days and
still accruing:
Residential real estate
and home equity (1) $1,084 $200 $51 $85
Commercial, consumer
and other 6,100 2,259 14,742 2,207
Premium finance
receivables 5,903 5,180 8,703 7,204
Indirect consumer loans 877 471 517 279
Tricom finance receivables - - - -
Total past due
greater than 90 days
and still accruing 13,964 8,110 24,013 9,775
Non-accrual loans:
Residential real estate
and home equity (1) 6,214 3,384 3,215 4,465
Commercial, consumer
and other 81,997 61,878 33,267 20,452
Premium finance
receivables 10,239 13,005 10,725 11,400
Indirect consumer loans 627 389 560 592
Tricom finance
receivables - 40 74 174
Total non-accrual 99,077 78,696 47,841 37,083
Total non-performing
loans:
Residential real estate
and home equity (1) 7,298 3,584 3,266 4,550
Commercial, consumer
and other 88,097 64,137 48,009 22,659
Premium finance
receivables 16,142 18,185 19,428 18,604
Indirect consumer loans 1,504 860 1,077 871
Tricom finance
receivables - 40 74 174
Total non-performing
loans $113,041 $86,806 $71,854 $46,858
Total non-performing
loans by category as
a percent of its own
respective category's
period-end balance:
Residential real estate
and home equity (1) 0.67% 0.35% 0.36% 0.52%
Commercial, consumer
and other 1.83 1.35 1.06 0.52
Premium finance
receivables 1.34 1.59 1.80 1.44
Indirect consumer loans 0.75 0.39 0.45 0.34
Tricom finance
receivables - 0.18 0.27 0.52
Total non-performing
loans 1.54% 1.21% 1.06% 0.69%
Allowance for loan
losses as a percentage
of non-performing
loans 58.67% 66.39% 70.13% 104.05%
(1) Non-accrual and past due greater than 90 days and still accruing
residential mortgage loans held for sale are excluded from the
non-performing balances presented above. These balances totaled $0
as of September 30, 2008, $0.2 million as of June 30, 2008, and
$2.0 million as of December 31, 2007. Residential mortgage loans
held for sale are accounted for at lower of aggregate cost or fair
value, with valuation changes included as adjustments to non-interest
income.
The provision for credit losses totaled $24.1 million for the third
quarter of 2008, $10.3 million in the second quarter of 2008 and $4.4
million for the third quarter of 2007. For the quarter ended September 30,
2008, net charge-offs totaled $15.4 million compared to $6.4 million in the
second quarter of 2008 and $3.0 million recorded in the third quarter of
2007. On a ratio basis, annualized net charge-offs as a percentage of
average loans were 0.84% in the third quarter of 2008, 0.36% in the second
quarter of 2008 and 0.17% in the third quarter of 2007.
On a year-to-date basis, provision for credit losses totaled $43.0
million for the first nine months of 2008 compared to $8.7 million in the
first nine months of 2007. Net charge-offs totaled $27.0 million, or 0.50%
of average loans on an annualized basis in the first nine months of 2008,
compared to $6.0 million, or 0.12% of average loans on an annualized basis
in the first nine months of 2007.
Management believes the allowance for loan losses is adequate to
provide for inherent losses in the portfolio. There can be no assurances
however, that future losses will not exceed the amounts provided for,
thereby affecting future results of operations. The amount of future
additions to the allowance for loan losses will be dependent upon
management's assessment of the adequacy of the allowance based on its
evaluation of economic conditions, changes in real estate values, interest
rates, the regulatory environment, the level of past-due and non-performing
loans, and other factors. The increase from the end of the prior quarter
reflects the continued economic weaknesses in the Company's markets and is
the result of an individual review of a significant number of individual
credits as well as the overall risk factors impacting certain types of
credits, specifically credits with residential development collateral
valuation exposure.
Non-performing Residential Real Estate and Home Equity
The non-performing residential real estate and home equity loans
totaled $7.3 million as of September 30, 2008 compared to $3.6 million at
June 30, 2008 and $4.6 million as of September 30, 2007. The September 30,
2008 non-performing balance is comprised of $6.0 million of residential
real estate (one credit of $3.3 million and 16 individual credits totaling
$2.7 million) and $1.3 million of home equity loans (16 individual
credits). On average, this is approximately two non-performing residential
real estate loans and home equity loans per chartered bank within the
Company. The Company believes control and collection of these loans is very
manageable. At this time, management does not expect any material losses
from the resolution of any of the credits in this category.
Non-performing Commercial, Consumer and Other
The commercial, consumer and other non-performing loan category totaled
$88.1 million as of September 30, 2008 compared to $64.1 million as of June
30, 2008 and $22.7 million as of September 30, 2007.
Management is pursuing the resolution of all credits in this category.
However, given the current state of the residential real estate market,
resolution of certain credits could span a lengthy period of time until
market conditions stabilize. However, management believes reserves are
adequate to absorb inherent losses that may occur upon the ultimate
resolution of these credits.
Non-performing Loan Composition
The $95.4 million of non-performing loans classified as residential
real estate and home equity, commercial, consumer, and other consumer
consists of $39.1 million of residential real estate construction and land
development related loans, $5.9 million of commercial related loans, $19.2
million of commercial real estate related loans, $17.5 million of
commercial real estate construction and land development related loans,
$13.4 million of residential real estate and home equity related loans and
$269,000 of consumer related loans. Twelve of these relationships exceed
$2.5 million in outstanding balances, approximating $69.1 million in total
outstanding balances.
Non-performing Premium Finance Receivables
The table below presents the level of non-performing premium finance
receivables as of September 30, 2008 and 2007, and the amount of net
charge-offs for the quarters then ended.
(Dollars in thousands) September 30, 2008 September 30, 2007
Non-performing premium
finance receivables $16,142 $18,604
- as a percent of premium finance
receivables outstanding 1.34% 1.44%
Net charge-offs of premium finance
receivables $884 $510
- annualized as a percent of average
premium finance receivables 0.29% 0.16%
As noted below, fluctuations in this category may occur due to timing
and nature of account collections from insurance carriers. Although non-
performing balances and net charge-offs in this category have increased
over the past 12 months, the Company's underwriting standards, regardless
of the condition of the economy, have remained consistent. We anticipate
that net charge-offs and non-performing asset levels in the near term will
continue to be at levels that are within acceptable operating ranges for
this category of loans. Management is comfortable with administering the
collections at this level of non-performing premium finance receivables.
The ratio of non-performing premium finance receivables fluctuates
throughout the year due to the nature and timing of canceled account
collections from insurance carriers. Due to the nature of collateral for
premium finance receivables it customarily takes 60-150 days to convert the
collateral into cash collections. Accordingly, the level of non-performing
premium finance receivables is not necessarily indicative of the loss
inherent in the portfolio. In the event of default, Wintrust has the power
to cancel the insurance policy and collect the unearned portion of the
premium from the insurance carrier. In the event of cancellation, the cash
returned in payment of the unearned premium by the insurer should generally
be sufficient to cover the receivable balance, the interest and other
charges due. Due to notification requirements and processing time by most
insurance carriers, many receivables will become delinquent beyond 90 days
while the insurer is processing the return of the unearned premium.
Management continues to accrue interest until maturity as the unearned
premium is ordinarily sufficient to pay-off the outstanding balance and
contractual interest due.
Non-performing Indirect Consumer Loans
Total non-performing indirect consumer loans were $1.5 million at
September 30, 2008, compared to $860,000 at June 30, 2008 and $871,000 at
September 30, 2007. The ratio of these non-performing loans to total
indirect consumer loans was 0.75% at September 30, 2008 compared to 0.39%
at June 30, 2008 and 0.34% at September 30, 2007. As noted in the Allowance
for Credit Losses table, net charge-offs as a percent of total indirect
consumer loans were 0.49% for the quarter ended September 30, 2008 compared
to 0.32% in the same period in 2007. The level of non-performing and net
charge-offs of indirect consumer loans continue to be below standard
industry ratios for this type of lending.
At the beginning of the third quarter the Company ceased the
origination of indirect automobile loans. This niche business has served
the Company well over the past 12 years in helping de-novo banks quickly,
and profitably, grow into their physical structures. Competitive pricing
pressures have significantly reduced the long-term potential profitably of
this niche business. Given the current economic environment, the retirement
of the founder of this niche business and the distinct possibility of
rising interest rates over the longer-term, exiting the origination of this
business was deemed to be in the best interest of the Company at this time.
The Company will continue to service its existing portfolio during the
duration of the credits and does not anticipate any change in historical
credit trends for this niche business given this decision.
Other Real Estate Owned
The table below presents a summary of other real estate owned as of
September 30, 2008 and shows the changes in the balance from June 30, 2008 for
each property type:
Residential
Residential Real Estate Commercial
Real Estate Development Real Estate Total
(Dollars in thousands) Balance # Balance # Balance # Balance #
Balance at June 30, 2008 $2,506 9 $4,683 9 $2,044 3 $9,233 21
Transfers at fair value 5,734 5 741 2 1,358 4 7,833 11
Fair value adjustments (66) - (100) - - - (166) -
Resolved (473)(2) (3,112)(5) (792)(1) (4,377) (8)
Balance at September 30,
2008 $7,701 12 $2,212 6 $2,610 6 $12,523 24
Balance at December 31,
2007 $3,858
Balance at September 30,
2007 $1,834
# = number of individual properties
WINTRUST SUBSIDIARIES AND LOCATIONS
Wintrust is a financial holding company whose common stock is traded on
the Nasdaq Stock Market(R) (Nasdaq: WTFC). Its 15 community bank
subsidiaries are: Lake Forest Bank & Trust Company, Hinsdale Bank & Trust
Company, North Shore Community Bank & Trust Company in Wilmette,
Libertyville Bank & Trust Company, Barrington Bank & Trust Company, Crystal
Lake Bank & Trust Company, Northbrook Bank & Trust Company, Advantage
National Bank in Elk Grove Village, Village Bank & Trust in Arlington
Heights, Beverly Bank & Trust Company in Chicago, Wheaton Bank & Trust
Company, State Bank of The Lakes in Antioch, Old Plank Trail Community
Bank, N.A. in New Lenox, St. Charles Bank & Trust Company and Town Bank in
Hartland, Wisconsin. The banks also operate facilities in Illinois in
Algonquin, Bloomingdale, Buffalo Grove, Cary, Chicago, Clarendon Hills,
Darien, Deerfield, Downers Grove, Frankfort, Geneva, Glencoe, Glen Ellyn,
Gurnee, Grayslake, Highland Park, Highwood, Hoffman Estates, Island Lake,
Lake Bluff, Lake Villa, Lindenhurst, McHenry, Mokena, Mundelein, North
Chicago, Northfield, Palatine, Prospect Heights, Ravinia, Riverside,
Roselle, Sauganash, Skokie, Spring Grove, Vernon Hills, Wauconda, Western
Springs, Willowbrook and Winnetka, and in Delafield, Elm Grove, Madison and
Wales, Wisconsin.
Additionally, the Company operates various non-bank subsidiaries. First
Insurance Funding Corporation, one of the largest commercial insurance
premium finance companies operating in the United States, serves commercial
loan customers throughout the country. Tricom, Inc. of Milwaukee provides
high- yielding, short-term accounts receivable financing and value-added
out-sourced administrative services, such as data processing of payrolls,
billing and cash management services, to temporary staffing service clients
located throughout the United States. WestAmerica Mortgage Company engages
primarily in the origination and purchase of residential mortgages for sale
into the secondary market through origination offices located throughout
the United States. Loans are also originated nationwide through
relationships with wholesale and correspondent offices. Guardian Real
Estate Services, Inc. of Oakbrook Terrace provides document preparation and
other loan closing services to WestAmerica Mortgage Company and its network
of mortgage brokers. Wayne Hummer Investments, LLC is a broker-dealer
providing a full range of private client and brokerage services to clients
and correspondent banks located primarily in the Midwest. Wayne Hummer
Asset Management Company provides money management services and advisory
services to individual accounts. Wayne Hummer Trust Company, a trust
subsidiary, allows Wintrust to service customers' trust and investment
needs at each banking location. Wintrust Information Technology Services
Company provides information technology support, item capture and statement
preparation services to the Wintrust subsidiaries.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of
federal securities laws. Forward-looking information in this document can
be identified through the use of words such as "may," "will," "intend,"
"plan," "project," "expect," "anticipate," "should," "would," "believe,"
"estimate," "contemplate," "possible," and "point." The forward-looking
information is premised on many factors, some of which are outlined below.
The Company intends such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and is including this
statement for purposes of invoking these safe harbor provisions. Such
forward-looking statements may be deemed to include, among other things,
statements relating to the Company's projected growth, anticipated
improvements in earnings, earnings per share and other financial
performance measures, and management's long-term performance goals, as well
as statements relating to the anticipated effects on financial results of
condition from expected developments or events, the Company's business and
growth strategies, including anticipated internal growth, plans to form
additional de novo banks and to open new branch offices, and to pursue
additional potential development or acquisitions of banks, wealth
management entities or specialty finance businesses. Actual results could
differ materially from those addressed in the forward-looking statements as
a result of numerous factors, including the following:
-- Competitive pressures in the financial services business which may
affect the pricing of the Company's loan and deposit products as well
as its services (including wealth management services).
-- Changes in the interest rate environment, which may influence, among
other things, the growth of loans and deposits, the quality of the
Company's loan portfolio, the pricing of loans and deposits and
interest income.
-- The extent of defaults and losses on our loan portfolio.
-- Unexpected difficulties or unanticipated developments related to the
Company's strategy of de novo bank formations and openings. De novo
banks typically require 13 to 24 months of operations before becoming
profitable, due to the impact of organizational and overhead expenses,
the startup phase of generating deposits and the time lag typically
involved in redeploying deposits into attractively priced loans and
other higher yielding earning assets.
-- The ability of the Company to obtain liquidity and income from the
sale of premium finance receivables in the future and the unique
collection and delinquency risks associated with such loans.
-- Failure to identify and complete acquisitions in the future or
unexpected difficulties or unanticipated developments related to the
integration of acquired entities with the Company.
-- Legislative or regulatory changes or actions, or significant
litigation involving the Company.
-- Changes in general economic conditions in the markets in which the
Company operates.
-- The ability of the Company to receive dividends from its subsidiaries.
-- The loss of customers as a result of technological changes allowing
consumers to complete their financial transactions without the use of
a bank.
-- The ability of the Company to attract and retain senior management
experienced in the banking and financial services industries.
-- The other risk factors set forth in the Company's filings with the
Securities and Exchange Commission.
Therefore, there can be no assurances that future actual results will
correspond to these forward-looking statements. The reader is cautioned not
to place undue reliance on any forward looking statement made by or on
behalf of Wintrust. Any such statement speaks only as of the date the
statement was made or as of such date that may be referenced within the
statement. The Company undertakes no obligation to release revisions to
these forward-looking statements or reflect events or circumstances after
the date of this press release. Persons are advised, however, to consult
further disclosures management makes on related subjects in its reports
filed with the Securities and Exchange Commission and in its press
releases.
CONFERENCE CALL AND WEBCAST
The Company will hold a conference call at 1:00 p.m. (Central Daylight
Time) Wednesday, October 22, 2008, regarding third quarter 2008 results.
Individuals interested in listening should call (877) 365-7575 and enter
Conference ID #69073612. A simultaneous audio-only web cast of the
conference call may be accessed via the Company's web site at
(http://www.wintrust.com), Presentations & Conference Calls, Conference
Calls, Third Quarter 2008 Earnings Release Conference Call.
A replay of the call will be available beginning at 5:00 p.m. (Central
Daylight Time) on October 22, 2008 and will run through 10:59 p.m. (Central
Daylight Time) November 5, 2008, by calling (800) 642-1687 and entering
Conference ID #69073612.
WINTRUST FINANCIAL CORPORATION
Supplemental Financial Information
5 Quarter Trends
Selected Financial Highlights
Consolidated Statements of Condition
Consolidated Statements of Income
Period End Loan and Deposit Balances
Quarterly Average Balances and Net Interest Margin
Net Interest Margin (Including Call Option Income)
Non-Interest Income and Expense
Allowance for Credit Losses
Non-Performing Loans
WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights - 5 Quarter Trends
(Dollars in
thousands,
except per
share data) Three Months Ended
Selected September 30, June 30, March 31, December 31, September 30,
Financial 2008 2008 2008 2007 2007
Condition
Data
(at end
of period):
Total
assets $9,864,920 $9,923,077 $9,732,466 $9,368,859 $9,465,114
Total
loans 7,322,545 7,153,603 6,874,916 6,801,602 6,808,359
Total
deposits 7,829,527 7,761,367 7,483,582 7,471,441 7,578,064
Junior
subord-
inated
debentures 249,537 249,579 249,621 249,662 249,704
Total
shareholders'
equity 809,331 749,025 753,293 739,555 721,973
Selected
Statements
of Income
Data:
Net interest
income $60,680 $59,400 $61,742 $65,438 $66,187
Net revenue(1) 82,595 92,408 86,298 93,406 77,724
Income before
taxes (4,518) 17,522 14,910 23,623 13,872
Net income (2,448) 11,276 9,705 15,643 9,919
Net income
per common
share
- Basic (0.13) 0.48 0.41 0.67 0.42
Net income
per common
share
- Diluted (0.12) 0.47 0.40 0.65 0.40
Selected
Financial
Ratios and
Other Data:
Performance
Ratios:
Net interest
margin(6) 2.74% 2.77% 2.98% 3.08% 3.14%
Core net
interest
margin(2)(6) 2.97 3.02 3.26 3.37 3.43
Non-interest
income to
average assets 0.88 1.37 1.05 1.17 0.49
Non-interest
expense to
average assets 2.54 2.68 2.70 2.66 2.52
Net overhead
ratio(3) 1.65 1.31 1.64 1.49 2.03
Efficiency
ratio(4)(6) 76.57 69.34 71.11 69.44 75.73
Return on
average assets (0.10) 0.47 0.42 0.65 0.42
Return on
average equity (1.59) 5.97 5.25 8.56 5.53
Average
total
assets $9,881,554 $9,682,454 $9,373,539 $9,497,111 $9,382,060
Average
total
shareholders'
equity 765,892 760,253 743,997 725,145 712,115
Average loans
to average
deposits
ratio 94.1% 94.6% 94.9% 93.1% 91.3%
Common Share
Data at end
of period:
Market price
per common
share $29.35 $23.85 $34.95 $33.13 $42.69
Book value
per common
share $32.07 $31.70 $31.97 $31.56 $30.55
Common shares
out-
standing 23,693,799 23,625,841 23,563,958 23,430,490 23,631,673
Other Data
at end of
period:
Allowance for
credit
losses(5) $66,820 $58,126 $54,251 $50,882 $49,214
Non-performing
loans $113,041 $86,806 $86,541 $71,854 $46,858
Allowance
for credit
losses to
total loans(5) 0.91% 0.81% 0.79% 0.75% 0.72%
Non-performing
loans to
total loans 1.54% 1.21% 1.26% 1.06% 0.69%
Number of:
Bank
subsidiaries 15 15 15 15 15
Non-bank
subsidiaries 8 8 8 8 8
Banking
offices 79 79 78 77 78
(1) Net revenue includes net interest income and non-interest income.
(2) The core net interest margin excludes the effect of the net interest
expense associated with Wintrust's junior subordinated debentures and
the interest expense incurred to fund common stock repurchases.
(3) The net overhead ratio is calculated by netting total non-interest
expense and total non-interest income, annualizing this amount, and
dividing by that period's total average assets. A lower ratio
indicates a higher degree of efficiency.
(4) The efficiency ratio is calculated by dividing total non-interest
expense by tax-equivalent net revenue (less securities gains or
losses). A lower ratio indicates more efficient revenue generation.
(5) The allowance for credit losses includes both the allowance for loan
losses and the allowance for lending-related commitments.
(6) See "Supplemental Financial Measures/Ratios" for additional
information on this performance measure/ratio.
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Condition - 5 Quarter Trends
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
(In September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Assets
Cash and due
from banks $158,201 $166,857 $160,890 $170,190 $149,970
Federal funds
sold and
securities
purchased
under resale
agreements 35,181 73,311 280,408 90,964 62,297
Interest-
bearing
deposits with
banks 4,686 6,438 11,280 10,410 9,740
Available-for-
sale
securities,
at fair
value 1,469,500 1,590,648 1,110,854 1,303,837 1,536,027
Trading
account
securities 2,243 1,877 1,185 1,571 1,350
Brokerage
customer
receivables 19,436 19,661 22,786 24,206 23,800
Mortgage loans
held-for-sale 68,398 118,379 102,324 109,552 104,951
Loans, net
of unearned
income 7,322,545 7,153,603 6,874,916 6,801,602 6,808,359
Less:
Allowance
for loan
losses 66,327 57,633 53,758 50,389 48,757
Net loans 7,256,218 7,095,970 6,821,158 6,751,213 6,759,602
Premises
and
equipment,
net 349,388 348,881 344,863 339,297 336,755
Accrued
interest
receivable
and other
assets 209,970 208,574 583,648 273,678 192,938
Goodwill 276,310 276,311 276,121 276,204 268,983
Other
intangible
assets 15,389 16,170 16,949 17,737 18,701
Total
assets $9,864,920 $9,923,077 $9,732,466 $9,368,859 $9,465,114
Liabilities
and
Shareholders'
Equity
Deposits:
Non-
interest
bearing $717,587 $688,512 $670,433 $664,264 $658,214
Interest
bearing 7,111,940 7,072,855 6,813,149 6,807,177 6,919,850
Total
deposits 7,829,527 7,761,367 7,483,582 7,471,441 7,578,064
Notes payable 42,025 41,975 70,300 60,700 71,900
Federal Home
Loan Bank
advances 438,983 438,983 434,482 415,183 408,192
Other
borrowings 296,391 383,009 293,091 254,434 271,106
Subordinated
notes 75,000 75,000 75,000 75,000 75,000
Junior
subordinated
debentures 249,537 249,579 249,621 249,662 249,704
Accrued
interest
payable and
other
liabilities 124,126 224,139 373,097 102,884 89,175
Total
liabi-
lities 9,055,589 9,174,052 8,979,173 8,629,304 8,743,141
Shareholders'
equity:
Preferred
stock 49,379 - - - -
Common
stock 26,548 26,478 26,416 26,281 26,060
Surplus 550,994 547,333 544,135 539,127 532,407
Treasury
stock (122,290) (122,258) (122,252) (122,196) (107,742)
Common
stock
warrants 459 459 459 459 618
Retained
earnings 318,066 325,314 314,038 309,556 293,913
Accumulated
other
compre-
hensive
loss (13,825) (28,301) (9,503) (13,672) (23,283)
Total
share-
holders'
equity 809,331 749,025 753,293 739,555 721,973
Total
liabi-
lities
and
share-
holders'
equity $9,864,920 $9,923,077 $9,732,466 $9,368,859 $9,465,114
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited) - 5 Quarter Trends
(In
thousands, Three Months Ended
except per September 30, June 30, March 31, December 31, September 30,
share data) 2008 2008 2008 2007 2007
Interest income
Interest
and fees on
loans $108,495 $108,803 $118,953 $131,888 $134,578
Interest
bearing
deposits
with banks 27 68 120 150 203
Federal funds
sold and
securities
purchased
under resale
agreements 197 472 634 275 238
Securities 17,599 16,553 16,081 18,979 19,104
Trading
account
securities 23 15 31 10 27
Brokerage
customer
receivables 228 249 357 415 495
Total
interest
income 126,569 126,160 136,176 151,717 154,645
Interest expense
Interest on
deposits 53,405 53,862 61,430 70,965 74,324
Interest on
Federal Home
Loan Bank
advances 4,583 4,557 4,556 4,550 4,479
Interest on
notes payable
and other
borrowings 2,661 2,900 2,770 4,783 3,721
Interest on
subor-
dinated
notes 786 843 1,087 1,308 1,305
Interest on
junior
subor-
dinated
debentures 4,454 4,598 4,591 4,673 4,629
Total
interest
expense 65,889 66,760 74,434 86,279 88,458
Net interest
income 60,680 59,400 61,742 65,438 66,187
Provision for
credit losses 24,129 10,301 8,555 6,217 4,365
Net interest
income after
provision for
credit losses 36,551 49,099 53,187 59,221 61,822
Non-interest
income
Wealth
management 7,044 7,771 7,865 8,320 7,631
Mortgage
banking 4,488 7,536 6,096 5,793 (3,122)
Service
charges on
deposit
accounts 2,674 2,565 2,373 2,288 2,139
Gain on sale
of premium
finance
receivables 456 566 1,141 1,596 -
Administrative
services 803 755 713 965 980
Gains (losses)
on available-
for-sale
securities,
net 920 (140) (1,333) 2,834 (76)
Other 5,530 13,955 7,701 6,172 3,985
Total non-
interest
income 21,915 33,008 24,556 27,968 11,537
Non-interest
expense
Salaries and
employee
benefits 35,823 36,976 36,672 36,583 34,256
Equipment 4,050 4,048 3,926 4,034 3,910
Occupancy,
net 5,666 5,438 5,867 5,902 5,303
Data
processing 2,850 2,918 2,798 2,721 2,645
Advertising
and
marketing 1,343 1,368 999 1,212 1,515
Professional
fees 2,195 2,227 2,068 2,045 1,757
Amortization
of other
intangible
assets 781 779 788 964 964
Other 10,276 10,831 9,715 10,105 9,137
Total non-
interest
expense 62,984 64,585 62,833 63,566 59,487
Income
before
income
taxes (4,518) 17,522 14,910 23,623 13,872
Income tax
expense (2,070) 6,246 5,205 7,980 3,953
Net income $(2,448) $11,276 $9,705 $15,643 $9,919
Dividends
declared on
preferred
shares 544 - - - -
Net income
applicable
to common
shares $(2,992) $11,276 $9,705 $15,643 $9,919
Net income
per common
share
- Basic $(0.13) $0.48 $0.41 $0.67 $0.42
Net income
per common
share
- Diluted $(0.12) $0.47 $0.40 $0.65 $0.40
Cash dividends
declared
per common
share $0.18 $- $0.18 $- $0.16
Weighted
average
common shares
outstanding 23,644 23,608 23,518 23,471 23,797
Dilutive
potential
common
shares 456 531 582 699 795
Average
common shares
and dilutive
common
shares 24,100 24,139 24,100 24,170 24,592
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Period End Loan Balances - 5 Quarter Trends
(Dollars in September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Balance:
Commercial
and
commercial
real
estate $4,673,682 $4,610,550 $4,534,383 $4,408,661 $4,219,320
Home equity 837,127 770,748 695,446 678,298 654,022
Residential
real estate 247,203 243,400 233,556 226,686 220,084
Premium
finance
receivables 1,205,376 1,145,986 1,017,011 1,078,185 1,289,920
Indirect
consumer
loans(1) 199,845 221,511 230,771 241,393 253,058
Tricom
finance
receivables 16,924 22,676 23,478 27,719 33,342
Other loans 142,388 138,732 140,271 140,660 138,613
Total loans,
net of
unearned
income $7,322,545 $7,153,603 $6,874,916 $6,801,602 $6,808,359
Mix:
Commercial and
commercial
real estate 64% 65% 66% 65% 62%
Home equity 11 11 10 10 10
Residential
real estate 4 3 3 3 3
Premium finance
receivables 17 16 15 16 19
Indirect
consumer loans(1) 3 3 4 4 4
Tricom finance
receivables - - - - -
Other loans 1 2 2 2 2
Total loans, net
of unearned
income 100% 100% 100% 100% 100%
(1) Includes autos, boats, snowmobiles and other indirect consumer loans
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Period End Deposit Balances - 5 Quarter Trends
(Dollars in September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Balance:
Non-
interest
bearing $717,587 $688,512 $670,433 $664,264 $658,214
NOW 1,012,393 1,064,792 1,013,603 1,014,780 1,005,002
Wealth
Management
deposits(1) 583,715 599,451 647,798 599,426 563,003
Money
market 997,638 900,482 797,215 701,972 690,798
Savings 317,108 326,869 325,096 297,586 291,466
Time
certificates
of deposit 4,201,086 4,181,261 4,029,437 4,193,413 4,369,581
Total
deposits $7,829,527 $7,761,367 $7,483,582 $7,471,441 $7,578,064
Mix:
Non-interest
bearing 9% 9% 9% 9% 9%
NOW 13 14 13 14 13
Wealth
Management
deposits (1) 7 8 9 8 7
Money market 13 11 11 9 9
Savings 4 4 4 4 4
Time
certificates
of deposit 54 54 54 56 58
Total
deposits 100% 100% 100% 100% 100%
(1) Represents deposit balances from brokerage customers of Wayne Hummer
Investments and trust and asset management customers of Wayne Hummer
Trust Company at the Company's subsidiary banks.
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Quarterly Average Balances - 5 Quarter Trends
Three Months Ended
(Dollars in September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Liquidity
management
assets $1,544,465 $1,543,795 $1,391,400 $1,552,675 $1,551,389
Other
earning
assets 21,687 22,519 26,403 23,875 23,882
Loans, net
of unearned
income 7,343,845 7,158,317 7,012,642 6,985,850 6,879,856
Total
earning
assets $8,909,997 $8,724,631 $8,430,445 $8,562,400 $8,455,127
Allowance
for loan
losses (57,751) (53,798) (51,364) (50,190) (48,839)
Cash and due
from banks 133,527 125,806 124,745 131,240 129,904
Other assets 895,781 885,815 869,713 853,661 845,868
Total
assets $9,881,554 $9,682,454 $9,373,539 $9,497,111 $9,382,060
Interest-
bearing
deposits $7,127,065 $6,906,437 $6,747,980 $6,845,466 $6,892,110
Federal Home
Loan Bank
advances 438,983 437,642 426,911 411,480 403,590
Notes
payable and
other
borrowings 398,911 439,130 332,019 433,983 330,184
Subordinated
notes 75,000 75,000 75,000 75,000 75,000
Junior
subordinated
debentures 249,552 249,594 249,635 249,677 249,719
Total
interest-
bearing
liabi-
lities $8,289,511 $8,107,803 $7,831,545 $8,015,606 $7,950,603
Non-
interest
bearing
deposits 678,651 663,526 642,917 657,029 643,338
Other
liabilities 147,500 150,872 155,080 99,331 76,004
Equity 765,892 760,253 743,997 725,145 712,115
Total
liabilities
and
share-
holders'
equity $9,881,554 $9,682,454 $9,373,539 $9,497,111 $9,382,060
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Net Interest Margin - 5 Quarter Trends
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
Yield earned on: 2008 2008 2008 2007 2007
Liquidity
management
assets 4.70% 4.56% 5.01% 5.15% 5.13%
Other earning
assets 4.81 4.83 6.10 7.09 8.76
Loans, net of
unearned income 5.89 6.12 6.83 7.50 7.77
Total earning
assets 5.68% 5.84% 6.53% 7.07% 7.29%
Rate paid on:
Interest-bearing
deposits 2.98% 3.14% 3.66% 4.11% 4.28%
Federal Home
Loan Bank
advances 4.15 4.19 4.29 4.39 4.40
Notes payable
and other
borrowings 2.65 2.66 3.36 4.37 4.47
Subordinated
notes 4.10 4.45 5.73 6.82 6.81
Junior
subordinated
debentures 6.98 7.29 7.28 7.32 7.25
Total
interest-
bearing
liabilities 3.16% 3.31% 3.82% 4.27% 4.41%
Rate Spread 2.52% 2.53% 2.71% 2.80% 2.88%
Net Free Funds
Contribution 0.22 0.24 0.27 0.28 0.26
Net Interest
Margin 2.74% 2.77% 2.98% 3.08% 3.14%
Core Net
Interest
Margin 2.97% 3.02% 3.26% 3.37% 3.43%
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Net Interest Margin (Including Call Option Income) - 5 Quarter Trends
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2008 2008 2008 2007 2007
Net Interest
Income $61,257 $59,992 $62,466 $66,402 $66,941
Call Option
Income 2,723 12,083 6,780 1,693 56
Net Interest
Income
Including
Call Option
Income $63,980 $72,075 $69,246 $68,095 $66,997
Yield on
Earning
Assets 5.68% 5.84% 6.53% 7.07% 7.29%
Rate on
Interest-
bearing
Liabilities 3.16 3.31 3.82 4.27 4.41
Rate Spread 2.52% 2.53% 2.71% 2.80% 2.88%
Net Free Funds
Contribution 0.22 0.24 0.27 0.28 0.26
Net Interest
Margin 2.74% 2.77% 2.98% 3.08% 3.14%
Call Option
Income 0.12 0.56 0.31 0.08 -
Net Interest
Margin including
Call Option
Income 2.86% 3.33% 3.29% 3.16% 3.14%
Core Net
Interest Margin
Including Call
Option Income 3.09% 3.58% 3.57% 3.45% 3.43%
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Net Interest Margin (Including Call Option Income) - YTD Trends
YTD YTD
September 30, December 31,
2008 2007 2006 2005 2004
Net Interest
Income $183,714 $264,777 $250,507 $218,086 $158,609
Call Option
Income 21,586 2,628 3,157 11,434 11,121
Net Interest
Income
Including
Call Option
Income $205,300 $267,405 $253,664 $229,520 $169,730
Yield on
Earning Assets 6.01% 7.21% 6.91% 5.92% 5.24%
Rate on
Interest-
bearing
Liabilities 3.42 4.39 4.11 3.00 2.28
Rate Spread 2.59% 2.82% 2.80% 2.92% 2.96%
Net Free Funds
Contribution 0.24 0.29 0.30 0.24 0.21
Net Interest
Margin 2.83% 3.11% 3.10% 3.16% 3.17%
Call Option
Income 0.33 0.03 0.04 0.17 0.16
Net Interest
Margin including
Call Option
Income 3.16% 3.14% 3.14% 3.33% 3.33%
Core Net
Interest Margin
Including Call
Option Income 3.41% 3.41% 3.36% 3.54% 3.47%
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Non-Interest Income - 5 Quarter Trends
Three Months Ended
(Dollars in September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Brokerage $4,354 $4,948 $5,038 $5,464 $4,727
Trust and
asset
management 2,690 2,823 2,827 2,856 2,904
Total wealth
management 7,044 7,771 7,865 8,320 7,631
Mortgage
banking 4,488 7,536 6,096 5,793 (3,122)
Service charges
on deposit
accounts 2,674 2,565 2,373 2,288 2,139
Gain on sale
of premium
finance
receivables 456 566 1,141 1,596 -
Administrative
services 803 755 713 965 980
Gains (losses)
on available-
for-sale
securities, net 920 (140) (1,333) 2,834 (76)
Other:
Fees from
covered
call options 2,723 12,083 6,780 1,693 56
Bank Owned
Life
Insurance 478 851 613 903 2,205
Miscellaneous 2,329 1,021 308 3,576 1,724
Total other
income 5,530 13,955 7,701 6,172 3,985
Total non-
interest
income $21,915 $33,008 $24,556 $27,968 $11,537
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Non-Interest Expense - 5 Quarter Trends
Three Months Ended
(Dollars in September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Salaries and
employee
benefits $35,823 $36,976 $36,672 $36,583 $34,256
Equipment 4,050 4,048 3,926 4,034 3,910
Occupancy, net 5,666 5,438 5,867 5,902 5,303
Data
processing 2,850 2,918 2,798 2,721 2,645
Advertising
and marketing 1,343 1,368 999 1,212 1,515
Professional
fees 2,195 2,227 2,068 2,045 1,757
Amortization
of other
intangibles 781 779 788 964 964
Other:
Commissions -
3rd party
brokers 985 997 985 905 924
Postage 1,067 1,055 986 1,074 948
Stationery
and supplies 750 756 742 849 741
FDIC
Insurance 1,344 1,289 1,286 1,257 1,067
Miscellaneous 6,130 6,734 5,716 6,020 5,457
Total other
expense 10,276 10,831 9,715 10,105 9,137
Total non-
interest
expense $62,984 $64,585 $62,833 $63,566 $59,487
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Allowance for Credit Losses - 5 Quarter Trends
Three Months Ended
(Dollars in September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Balance at
beginning of
period $57,633 $53,758 $50,389 $48,757 $47,392
Provision for
credit losses 24,129 10,301 8,555 6,217 4,365
Allowance
acquired in
business
combinations - - - 362 -
Reclassification
to allowance
for lending-
related
commitments - - - (36) -
Charge-offs:
Commercial
and commercial
real estate
loans 13,543 5,430 3,957 4,029 2,239
Home equity
loans 28 25 - 156 -
Residential real
estate loans 786 - 219 - -
Consumer and
other loans 125 150 69 130 65
Premium finance
receivables 1,002 913 883 665 625
Indirect
consumer
loans 292 271 258 346 247
Tricom finance
receivables 40 52 25 100 102
Total
charge-offs 15,816 6,841 5,411 5,426 3,278
Recoveries:
Commercial
and commercial
real estate
loans 216 29 40 234 82
Home equity
loans - - - 1 -
Residential real
estate loans - - - 6 -
Consumer and
other loans 18 52 12 78 37
Premium finance
receivables 118 273 128 148 115
Indirect
consumer loans 29 61 45 48 44
Tricom finance
receivables - - - - -
Total
recoveries 381 415 225 515 278
Net charge-offs (15,435) (6,426) (5,186) (4,911) (3,000)
Allowance for
loan losses
at end of
period $66,327 $57,633 $53,758 $50,389 $48,757
Allowance for
lending-
related
commitments
at end of
period $493 $493 $493 $493 $457
Allowance for
credit
losses at
end of
period $66,820 $58,126 $54,251 $50,882 $49,214
Annualized net
charge-offs
(recoveries)
by category
as a percentage
of its own
respective
category's
average:
Commercial
and commercial
real estate
loans 1.15% 0.48% 0.35% 0.35% 0.21%
Home equity
loans 0.01 0.01 - 0.09 -
Residential
real estate
loans 0.92 - 0.27 (0.01) -
Consumer and
other loans 0.30 0.29 0.16 0.14 0.11
Premium finance
receivables 0.29 0.23 0.27 0.16 0.16
Indirect
consumer
loans 0.49 0.38 0.36 0.48 0.32
Tricom finance
receivables 0.78 0.82 0.41 1.23 1.30
Total loans,
net of
unearned
income 0.84% 0.36% 0.30% 0.28% 0.17%
Net charge-offs
as a percentage
of the provision
for loan losses 63.97% 62.38% 60.62% 78.99% 68.72%
Loans at
period-
end $7,322,545 $7,153,603 $6,874,916 $6,801,602 $6,808,359
Allowance
for loan
losses as
a percentage
of loans at
period-end 0.91% 0.81% 0.78% 0.74% 0.72%
Allowance for
credit losses
as a percentage
of loans at
period-end 0.91% 0.81% 0.79% 0.75% 0.72%
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
Non-Performing Loans - 5 Quarter Trends
(Dollars in September 30, June 30, March 31, December 31, September 30,
thousands) 2008 2008 2008 2007 2007
Loans past due
greater than
90 days and
still accruing:
Residential real
estate and home
equity (1) $1,084 $200 $387 $51 $85
Commercial,
consumer and
other 6,100 2,259 8,557 14,742 2,207
Premium finance
receivables 5,903 5,180 8,133 8,703 7,204
Indirect consumer
loans 877 471 635 517 279
Tricom finance
receivables - - - - -
Total past
due greater
than 90 days
and still
accruing 13,964 8,110 17,712 24,013 9,775
Non-accrual
loans:
Residential
real estate
and home
equity(1) 6,214 3,384 3,655 3,215 4,465
Commercial,
consumer and
other 81,997 61,878 51,184 33,267 20,452
Premium
finance
receivables 10,239 13,005 13,542 10,725 11,400
Indirect
consumer loans 627 389 399 560 592
Tricom finance
receivables - 40 49 74 174
Total non-
accrual 99,077 78,696 68,829 47,841 37,083
Total non-
performing
loans:
Residential
real estate
and home
equity (1) 7,298 3,584 4,042 3,266 4,550
Commercial,
consumer and
other 88,097 64,137 59,741 48,009 22,659
Premium
finance
receivables 16,142 18,185 21,675 19,428 18,604
Indirect
consumer
loans 1,504 860 1,034 1,077 871
Tricom finance
receivables - 40 49 74 174
Total non-
performing
loans $113,041 $86,806 $86,541 $71,854 $46,858
Total non-
performing
loans by
category as
a percent of
its own
respective
category's
period-end
balance:
Residential real
estate and
home
equity(1) 0.67% 0.35% 0.44% 0.36% 0.52%
Commercial,
consumer and
other 1.83 1.35 1.28 1.06 0.52
Premium finance
receivables 1.34 1.59 2.13 1.80 1.44
Indirect
consumer loans 0.75 0.39 0.45 0.45 0.34
Tricom finance
receivables - 0.18 0.21 0.27 0.52
Total non-
performing
loans 1.54% 1.21% 1.26% 1.06% 0.69%
Allowance for
loan losses as a
percentage of
non-performing
loans 58.67% 66.39% 62.12% 70.13% 104.05%
(1) Non-accrual and past due greater than 90 days and still accruing
residential mortgage loans held for sale accounted for at lower of
cost or market are excluded from the non-performing balances
presented above. These balances totaled $0 as of September 30, 2008,
$0.2 million as of June 30, 2008, and $2.0 million as of December 31,
2007.
SOURCE Wintrust Financial Corporation
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