CHICAGO`S BANK® WISCONSIN`S BANK®

CHICAGO’S BANK®
WISCONSIN’S BANK®
WELCOME | 2015 SHAREHOLDERS’ LETTER
Welcome
TO OUR FELLOW SHAREHOLDERS ...
W e l c o m e t o W i n t r u s t F i n a n c i a l C o r p o r a t i o n ’s
2 0 1 5 a n n u a l s h a r e h o l d e r s ’ l e t t e r. We t h a n k y o u f o r b e i n g a s h a r e h o l d e r.
25 YEARS OF TRUE COMMUNITY SUPPORT
The close of 2015 signifies an important milestone in Wintrust’s history: 2016 is your Company’s 25th anniversary. The following pages give
an overview of 2015, but they should also give you a great sense of pride in seeing just how far we’ve come. Some of you have been with
us from the beginning, some of you have jumped aboard along the way, but each of you has helped create the Company we are today. For
a quarter century, we’ve been supporting the greater Chicago area with solid financial solutions and unmatched customer service.
Thank you for the last 25 years. Here’s to the next!
PAG E 2
2015
SUBURBAN BANK & TRUST
HOW WE’ VE GROWN: 25 YEAR TIMELINE
2009
LIFE INSURANCE PREMIUM FINANCE PORTFOLIO
SURETY MORTGAGE
2004
BEVERLY BANK & TRUST
WEST AMERICA MORTGAGE
WHEATON BANK & TRUST
TOWN BANK OF DELAFIELD
1996
BARRINGTON BANK & TRUST
FIRST INSURANCE
FUNDING CORP.
FIRST NATIONAL BANK OF ILLINOIS
PREFERRED MORTGAGE
PARTNERS
1996-2000
ELGIN STATE BANK
OLD PLANK TRAIL
COMMUNITY BANK
1995
LIBERTYVILLE BANK & TRUST
1999
TRICOM INC.
2001-2005
2005
STATE BANK OF THE LAKES
FIRST NORTHWEST BANK
GREAT LAKES ADVISORS
RIVER CITY MORTGAGE
WOODFIELD PLANNING CORP.
2006-2010
BROADWAY PREMIUM
FUNDING CORP.
2010
CRYSTAL LAKE BANK & TRUST
2003
2011-2015
2012
2007
1997
HINSDALE BANK & TRUST
2011
3 FDIC-ASSISTED TRANSACTIONS
HINSBROOK BANK & TRUST
1990-1995
DIAMOND BANK
2008
2006
2002
WAYNE HUMMER
COMPANIES
LAKE FOREST BANK & TRUST
1993
2013
NORTHBROOK BANK & TRUST
WINTRUST BANK
(formerly North Shore
Community Bank & Trust)
1991
COMMUNITY BANK WHEATON/GLEN ELLYN
ADVANCED INVESTMENT PARTNERS
2000
1994
NORTH BANK
COMMUNITY BANK CBD
3 FDIC-ASSISTED TRANSACTIONS
1 BRANCH PURCHASE–ORLAND PARK
1 TRUST DEPT. PURCHASE
HYDE PARK BANK
3 FDIC-ASSISTED TRANSACTIONS
1 BRANCH PURCHASE–NAPERVILLE
LAKE FOREST CAPITAL MGT.
ADVANTAGE NATIONAL BANK
VILLAGE BANK & TRUST–ARLINGTON HEIGHTS
2014
12 BRANCH PURCHASES–WISCONSIN
1 BRANCH PURCHASE–PROVISO
POLICY BILLING SERVICES & EQUITY
PREMIUM FINANCE
PAG E 3
W I N T R U S T F I N A N C I A L C O R P O R AT I O N | S E L E C T E D F I N A N C I A L T R E N D S
TOTAL ASSETS
TOTAL LOANS
TOTAL DEPOSITS
25
(excluding covered loans)
20
18
15
13.5
10
9
5
4.5
20
15
10
5
2011
2012
2013
2014
2015
2011
2012
2013
2014
2011
2015
200
2013
2014
2015
OPERATING NET INCOME
EARNINGS PER SHARE–
DILUTED 1
OPERATING NET
INCOME 1
NET INCOME
2012
3.5
200
3.0
150
150
2.5
2.0
100
100
1.5
1.0
50
50
0.5
2011
2012
2013
2014
2015
2011
2012
2013
2014
2011
2015
2012
2013
2014
2015
NET CHARGE-OFFS
TOTAL SHAREHOLDERS’
EQUITY
2.5
(as a % of average loans,
excluding covered loans)
NET INTEREST MARGIN
1.2
4.0
3.5
1.0
2.0
3.0
0.8
2.5
1.5
0.6
2.0
1.0
1.5
0.4
1.0
.5
0.2
0.5
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
2011
2012
2013
P Operating
A G E 4net income is reported net income excluding acquisition and non-operating compensation charges. Acquisition and non-operating compensation charges incurred prior to 2015 are considered insignificant.
2014
2015
SELECTED FINANCIAL HIGHLIGHTS | 2015 SHAREHOLDERS’ LETTER
2015
Dollars in thousands except per share data. Years ended December 31,
2014
2013
2012
2011
SELECTED FINANCIAL CONDITION DATA (AT END OF YEAR)
Total assets
$
22,917,166
$
20,010,727
$
18,097,783
$
17,519,613
$
15,893,808
Total loans, excluding covered loans
17,118,117
14,409,398
12,896,602
11,828,943
10,521,377
12,307,267
Total deposits
18,639,634
16,281,844
14,668,789
14,428,544
Junior subordinated debentures
268,566
249,493
249,493
249,493
249,493
Total shareholders’ equity
2,352,274
2,069,822
1,900,589
1,804,705
1,543,533
SELECTED STATEMENTS OF INCOME DATA
Net interest income
$
641,529
$
598,575
$
550,627
$
519,516
$
461,377
Net revenue1
913,126
813,815
773,024
745,608
651,075
Net income
156,749
151,398
137,210
111,196
77,575
Net operating income2
165,736
151,398
137,210
111,196
77,575
Net income per common share–basic
3.05
3.12
3.33
2.81
2.08
Net income per common share–diluted
2.93
2.98
2.75
2.31
1.67
3.36 %
3.53 %
3.50 %
3.49 %
3.42 %
SELECTED FINANCIAL RATIOS AND OTHER DATA
PERFORMANCE RATIOS:
Net interest margin3
Non-interest income to average assets
1.29
1.15
1.27
1.37
1.27
Non-interest expense to average assets
2.99
2.92
2.88
2.96
2.82
Net overhead ratio 3,4
1.70
1.77
1.60
1.59
1.55
3,5
68.49
66.89
64.57
65.85
64.58
Return on average assets
0.75
0.81
0.79
0.67
0.52
Efficiency ratio
3
7.15
7.77
7.56
6.60
5.12
Return on average tangible common equity
9.44
10.14
9.93
8.70
6.70
Return on average common equity
Average total assets
$
Average total shareholders’ equity
21,009,773
$
2,232,989
Average loans to average deposits ratio
(excluding covered loans)
$
1,993,959
92.0 %
Average loans to average deposits ratio
(including covered loans)
18,699,458
93.1
17,468,249
$
1,856,706
16,529,617
$
1,696,276
14,920,160
1,484,720
89.9 %
88.9 %
87.8 %
88.3 %
91.7
92.1
92.6
92.8
COMMON SHARE DATA AT END OF YEAR
Market price per common share
$
48.52
$
Book value per common share
3
$
43.42
Tangible common book value per share3
$
33.17
Common shares outstanding
46.76
$
46.12
$
$
41.52
$
38.47
$
32.45
$
29.93
48,383,279
46,805,055
36.70
$
$
37.78
$
34.23
$
29.28
$
26.72
46,116,583
36,858,355
28.05
35,978,349
OTHER DATA AT END OF YEAR8
Leverage ratio
9.1 %
10.2 %
10.5 %
10.0 %
9.4 %
Tier 1 capital to risk-weighted assets
10.0
11.6
12.2
12.1
11.8
Common equity Tier 1 capital to risk-weighted assets
8.4
N/A
N/A
N/A
N/A
Total capital to risk-weighted assets
12.2
13.0
12.9
13.1
13.0
3,7
7.2
7.8
7.8
7.4
7.5
Tangible Common Equity ratio, assuming
full conversion of preferred stock3,7
7.7
8.4
8.5
8.4
7.8
Tangible Common Equity ratio (TCE)
Allowance for credit losses6
Non-performing loans
Allowance for credit losses5 to total loans
(excluding covered loans)
$
106,349
84,057
$
92,480
78,677
$
97,641
103,334
$
121,988
118,083
$
123,612
120,084
0.62 %
0.64 %
0.76 %
1.03 %
1.17 %
0.49
0.55
0.80
1.00
1.14
Bank subsidiaries
15
15
15
15
15
Banking offices
152
140
124
111
99
Non-performing loans to total loans
(excluding covered loans)
NUMBER OF:
1. Net revenue includes net interest income and non-interest income. 2. Operating net income is reported net income excluding acquisition and non-operating compensation charges. Acquisition and non-operating compensation charges incurred prior
to 2015 are considered insignificant. 3. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Non-GAAP Financial Measures/Ratios,” within our Annual Report on Form 10-K for a reconciliation of this
performance measure/ratio to GAAP. 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 total average assets. A lower ratio indicates a higher
degree of efficiency. 5. 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. 6. The allowance for credit losses
includes both the allowance for loan losses and the allowance for unfunded lending-related commitments, but excluding the allowance for covered loan losses. 7. Total shareholders’ equity minus preferred stock and total intangible assets divided by
PAG E 5
total assets minus total intangible assets. 8. Asset quality ratios exclude covered loans.
W I N T R U S T F I N A N C I A L C O R P O R AT I O N | 2 0 1 5 S H A R E H O L D E R S ’ L E T T E R
IF YOU BUILD IT…
According to one of the greatest
and the White Sox was about so much
baseball movies, “If you build it...”
more than baseball. It brought us to
people will come. That’s something
a whole new level of recognition.
that applies well to Wintrust. We’ve
Our name loomed large above every
spent a quarter century building
play at Wrigley, and was a prominent
this Company and they have come:
fixture for every car passing The Cell
customers of all ages, ethnicities
on the Dan Ryan Expressway. It also
and backgrounds; local businesses
sent an important message to this city:
of all sizes in a variety of industries;
Only Chicago’s Bank understands the
partner organizations and non-profits;
importance of sponsoring both teams.
outstanding, talented employees; and
We didn’t choose the Cubs and Sox
you, our shareholders, have all been
randomly. These are our teams. We’re
drawn to our unique model.
actual fans. This is our home.
What started as a small storefront
From a marketing perspective, this
in Lake Forest has grown into a
year was all about baseball. With the
substantial player in this market. With
introduction of the new video board
152 community bank locations, a
at Wrigley Field, people certainly
variety of specialty niche groups and
learned our name. And, thanks to
a number of companies, we are the
some promising young rookies, we
one-stop-shop for any financial need.
got a lot of traction out of our Cubs
We’ve built a Company that provides
partnership in particular. It might
expertise in every financial area we
have seemed like fun and games, but
cover. This is what we do and we do
the focus on baseball was a strategic
it well.
decision to help us grow our presence
and recognition as major players in our
2015 marked an important milestone in
markets. According to our 2015 Season
our Company’s history: our prominent
Highlights, it worked.
physical presence in Chicago baseball.
Wintrust’s involvement with the Cubs
2 0 1 5 M A R K E D A N I M P O RTA N T M I L E S T O N E I N O U R
C O M PA N Y ’ S H I S T O RY: O U R P R O M I N E N T P H Y S I C A L
PRESENCE IN CHICAGO BASEBALL .
PAG E 6
PAG E 7
W I N T R U S T F I N A N C I A L C O R P O R AT I O N
THE GREAT AMERICAN PASTIME IS ALL ABOUT TRADITION
We’ve had consistent growth, but
true to our core values. It seems to
the effects. Our net interest margin
it’s never interfered with us being
be working. Our customers continue
decreased slightly to 3.36% primarily
the Company we’ve promised to be.
to rate us high in the areas we’re most
as a result of lower yields on earning
We were built on traditional values.
concerned with: customer service,
assets. But, our growing non-interest
We believe in outstanding customer
knowledge, and community focus.
bearing deposit accounts now
service, a strong community focus and
represents 26% of our total deposits.
a concentration on giving back. This is
According to our Net Promoter Score
With rates still compressed, our cost
what we focused on in 1991. This is what
(NPS), a measurement across industries
of funds held relatively steady at
defines us today.
that evaluates customer satisfaction,
0.54%. This all resulted in a net interest
we continue to excel. The NPS starts
income increase of 7% over 2014 due
Even as the financial industry, the
with one question: “How likely are you
to asset growth.
markets, and technologies change, the
to refer our company to your friends
demand for customer focus does not.
and family?” Respondents answer
We continue to use the tools at our
We’ve always promised the same or
using a scale, one to ten. Those who
disposal for long-term income growth
better products as the big banks, the
answer nine and ten are considered
and to prepare for a higher interest rate
same or better technology, but then
“promoters.” Six, seven and eight are
environment: variable rate lending, fixed
we shower them with a level of service
“neutral.” Those who answer with five
rate loans with interest rate swaps, non-
you can only find at a true community
or less are considered “detractors.” The
interest bearing deposits and long-term,
bank. Just as the nostalgic traditions of
NPS is the percentage of promoters
fixed-rate Certificates of Deposit. And,
baseball never go out of style, neither
minus the percentage of detractors.
we continue to provide added-value
does community banking.
Our score is nearly two times the
services, like treasury management and
banking industry average.
commercial account enhancements
That doesn’t mean we aren’t nimble.
to better diversify our income sources
We’ve expanded services, improved
Our traditional approach to banking
and better serve our customers. Unlike
technology and renovated buildings,
practices has also served us well. We
our big bank competitors, we’re not
but we’ve never lost sight of the
didn’t grow to be a nearly $23 billion
increasing our income through nuisance
traditional values we were built on.
company with risky lending or one
fees. These smart, traditional banking
Just like at Wrigley Field, adding a new
income source. We’ve consistently
practices put the long-term health of
video board doesn’t change the team
practiced conservative underwriting,
our company and our customers over
you’ve always rooted for.
asset diversification (which we’ll visit in
short-term income gains.
more detail later) and income diversity
PAG E 8
The financial industry and bank
to keep us healthy in a compressed
Our traditional banking practices also
regulatory environment haven’t made
interest rate environment and beyond.
serve us well when it comes to credit
it easy for community banks. But, we’ve
Like much of the industry, as rates
decisions. We continue to come out
found our way by adapting and staying
didn’t move much in 2015, we felt
ahead of our peer group for net charge-
2015 SHAREHOLDERS’ LETTER
offs as a percentage of total loans,
And, staying true to those traditions
we’re a Company that’s focused on
excluding covered loans, which in 2015
has worked for you, too. Year to
delivering value to our shareholders.
declined to 0.12% compared to 0.20%
year, we’ve continued to increase our
Our overall trends over the past decade
in 2014. Our total non-performing
tangible common book value per
demonstrate that commitment.
assets as a percentage of total assets,
share, through the economic crisis and
excluding covered assets, declined to
beyond. And, in 2015, our operating net
0.56% compared to 0.62% at the end
income was $165.7 million or $3.10 per
of 2014.
diluted common share. As you know,
EARNINGS PER DILUTED COMMON SHARE
TANGIBLE COMMON BOOK VALUE PER SHARE
$35.00
$3.00
CRISIS
CRISIS
$2.50
$30.00
$2.00
$25.00
$1.50
RECOVERY
RECOVERY
$20.00
$15.00
$1.00
2006
2007
2008
2009
2010
2011
2012
2013
2014
$0.50
2015
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2.5%
2.0%
NET CHARGE-OFFS RATIO
(WINTRUST VS. PEER GROUP)
1.5%
1.0%
WINTRUST
0.5%
PEER GROUP
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Peer group data is per the Federal Reserve’s Bank Holding Company Performance Report
PAG E 9
WE’ VE GOT OUR BASES COVERED: WINTRUST COMMUNITY BANKS
No one player takes a team to the
expertise and proficiency and we can
nearly 50% of those under 40, used our
World Series. The game relies on the
offer them to every person who walks
mobile banking app.
entire team—each member playing
through our banks’ doors.
an important role—to bring home a
To say baseball played a big role is no
win. The same applies to Wintrust.
You’ll often hear us say we have the
exaggeration. The release of our Cubs
But, if we’re assigning positions, our
tools and technology of the big banks
and White Sox Checking accounts
community banks cover a few: namely
with the personal focus you can only
inspired our “You Decide” campaign.
first, second and third base. Our 152
find at a true community bank. That
We asked customers to show northside
community banks make us who we
could not be more true in 2015. In fact,
or southside pride by opening their
are and give us the avenue to sell all
last year, we led the industry with the
chosen account with matching
the other things we do. Because of
release of Cardless Cash. This tool lets
debit card. The push gave us great
our banks—which stretch across the
users pre-order money from an ATM
exposure across the area, even beyond
Chicago area, southern Wisconsin and
through our mobile banking app and
baseball, resulting in nearly 21,000 new
northwest Indiana—we’ve got our
access the cash by scanning a code
accounts—whether Cubs, Sox or any of
bases covered.
that pops up on their smart phone.
our other checking accounts—reaching
The process removes the card from
more than 8,800 new households in
Everything we do as an organization
the equation. This offers convenience
2015. That’s compared to approximately
supports the banks and each bank
and, with no card to skim or steal,
19,200 accounts and approximately
location encompasses everything we
added security.
7,800 new customer households in 2014.
our specialized companies or groups
We also added a person-to-person
The campaign also gave us a unified
through their relationship with the
payment feature to mobile banking that
message across our banks and allowed
banks. Wealth management guidance,
lets users electronically send money.
our employees to show their team
mortgage and treasury management
This tool allows our customers to easily
spirit in unique and quirky ways. Bankers
solutions, even our niches—like our
share funds to cover dinner with friends
decided for themselves with shirts
award-winning SBA lending group,
or to conveniently pay the babysitter.
and displays at the banks and at events
named Illinois Lender of the Year by
Both of these features have encouraged
throughout the summer. It also marked
the SBA—can be accessed through the
mobile banking usage. In 2015, more
our first collective push across social
banks. These are services that require
than 22% of checking customers, and
media by encouraging people to show
do. Customers have access to any of
PAG E 1 0
EVERYONE NEEDS A
SEVENTH INNING
STRETCH
Every day, our employees give it their
all and then walk off the field. Each
and every one makes us what we are
by delivering on the promises we
make as a Company. It’s important
that they have the work-life balance
that keeps them coming back to play
us which team they “decided” with
savings and CD rates. And, because
#DecideCubs or #DecideSox. For each
many of our recent bank acquisitions
hashtag, we donated $0.25 to Cubs or
came with branch locations that were
It’s a heavy responsibility to create a
White Sox Charities.
relatively small, it offers an opportunity
corporate environment that nurtures
to focus growth at these under-utilized
employee development, growth
Just as the year saw a centralized
branches. We believe we can grow
and satisfaction. It’s something we
marketing campaign, in a continuing
deposits and loans at smaller branches
take very seriously. We know it’s
effort to reassess our operations, we
without a commensurate increase in
imperative that our people feel
centralized some of our services in
operating costs, allowing us to leverage
supported as they, in turn, support
2015 as well. Because of our unique
existing infrastructure. We like to
our customers, communities,
structure, this is one area we navigate
call this the “kinetic” leverage that
shareholders and each other.
carefully. Our customers are always
will allow us to reduce our operating
our top priority, so we are vigilant
expense ratios.
that our operational decisions
the game.
According to our employees,
whose survey results gave us this
don’t impact any customer-facing
And, as is our practice, we continue
recognition, we’re doing alright: For
services. But, as we continue to grow
to appeal to our communities by
the second year in a row, Wintrust
and navigate a constantly changing
being active, valuable participants.
was named one of the Chicago
regulatory environment, there are some
In 2015, our banks hosted more than
Tribune’s 2015 Top Work Places. Their
organizational and operational functions
890 events and seminars; offered 458
longevity also indicates our success.
that make more sense at the corporate
community sponsorships; and put in
level. We will continue to evaluate areas
more than 7,800 service hours with
We know we have good players on
within our Company where we can
local organizations and non-profits and
our team. We want to keep them.
implement operational efficiencies.
those hours only include the activity
This is one area we continue to
tracked for Community Reinvestment
revisit and improve so that every
Act purposes.
employee feels valued. As we grow,
Most importantly, our banks still have
the potential for growth. Just as in the
we want to keep working to ensure
previous few years, we have focused
that each employee feels like they’re
on growing our reach and households
part of the action. At Wintrust, no
through acquisition without aggressive
one should be warming the bench.
PAG E 1 1
EVERY TEAM NEEDS A POWER HITTER
If every team needs a heavy hitter, ours
of Wintrust Commercial Finance,
In 2015, FIRST Insurance Funding,
is commercial banking. The commercial
an equipment-focused financing
Property & Casualty Division U.S.,
banking group continues to hit it out of
group headquartered in Texas. The
originated approximately $5 billion in
the park (pun intended).
group compliments our other leasing
loan volume and ended the year with
operations, Wintrust Equipment
nearly $2.1 billion in outstandings. The
Wintrust Commercial Banking found its
Finance and Wintrust Capital, and
company’s number of units financed
new home in 2015. The group moved
provides sophisticated loan and lease
increased by 3% or 6,259. First Insurance
into the prominent building at 231 S.
solutions to commercial companies in
Funding of Canada continues to be
LaSalle St. in the heart of Chicago’s
a variety of industries throughout the
the second largest premium finance
financial district. Shared amongst some
United States. Since forming in April,
company in Canada and ended the
of the other Chicago-based Wintrust
the group has expanded into a team of
year with more than $278 million in
companies, the building gives the
12 professionals with more than $217
outstandings on loan volume of nearly
groups—and Wintrust as a whole—a
million in total assets. Our entire lease
$617 million. First Insurance Funding,
notable downtown presence.
portfolio now stands at more than
Life Division, added $914 million in new
$289.3 million.
loan volume, ending 2015 nearly 40%
No one can argue with Wintrust
higher than 2014, and with outstandings
Commercial Banking’s player stats:
Wintrust Construction, Engineering
The group added more than 300 new
& Architecture (CEA) also had a busy
relationships for the fifth consecutive
year. Since its inception in 2014, the
year and grew middle market loans
group solidified $250 million in loan
by 19% and related deposits by 29%.
commitments and banks a number of
In 2015, we also grew our commercial
preeminent contractor firms working
real estate portfolio by more than $1
on a number of important projects
billion with the portfolio ending the
across the area. Keep an eye out for
year totaling $5.5 billion, a 23% increase
“financed by Wintrust” signs.
over 2014.
Our diversified loan portfolio
We also continued our effort to
has served us well over the
expand and focus on specialized
years and we have our niche
lending teams. In 2015, we expanded
groups to thank for this.
our lease and equipment finance
Particularly, our premium
operation capabilities with the addition
finance companies.
LOANS:
$17.3 BILLION
(INCLUDING COVERED LOANS)
PAG E 1 2
of more than $2.9 billion.
THE OUTFIELD:
WINTRUST MORTGAGE AND WINTRUST WEALTH MANAGEMENT
Wintrust Mortgage and Wintrust
no different. The company was at
Wealth Management’s continued
Wealth Management cover the
approximately 61% with the industry
success is a result of the coordinated
outfield. Both companies enable us
at 54%.
efforts of its four reputable and
to provide service variety, ensure
talented teams. Wayne Hummer
no opportunities get past us and, as
The company made a push for first-
Investments offers comprehensive
mutually beneficial partners, throw
time homebuyers in 2015 offering
brokerage and insurance solutions,
opportunities back to our banks. Many
seminars to educate prospective
The Chicago Trust Company offers
of the companies’ loan officers and
homeowners about how to begin the
trust and estate planning, Great Lakes
financial advisors work within our banks
process. Much like our banks, Wintrust
Advisors assists with proprietary asset
and help strengthen our local customer
Mortgage works to provide more than
management, and Wintrust Wealth
relationships and bring in new ones.
just mortgage services by offering
Services provides financial solutions to
education to potential clients.
private clients. Each pillar of Wintrust
Wintrust Mortgage continues to be
Wealth Management works with
one of the largest mortgage originators
Wintrust Wealth Management
the community bankers, commercial
in the Midwest. The company has 55
continued to grow assets under
bankers and mortgage loan officers
locations in 12 states as well as office
administration by 5% from 2014
to provide well-rounded, customized
locations at several of our banks.
reaching more than $21 billion. The
financial solutions for clients. In
Wintrust Mortgage’s purchase volume
company saw a 3% revenue increase as
2015, Wintrust Wealth Management’s
as a percentage of total volume has
well, up from $71.3 million in 2014 to
downtown-based employees also
exceeded industry averages over
$73.5 million in 2015.
moved into the building at 231 S. LaSalle.
the last several years and 2015 was
WINTRUST MORTGAGE FIVE-YEAR
ORIGINATIONS/ VOLUME & LOCATION GROW TH
WEALTH MANAGEMENT ASSETS
UNDER ADMINISTRATION
$25 BILLION
$6 BILLION
60
$5 BILLION
50
$4 BILLION
40
$15 BILLION
$3 BILLION
30
$10 BILLION
$2 BILLION
20
$5 BILLION
$1 BILLION
10
2011
2012
ORIGINATIONS/ VOLUME ($)
2013
2014
$20 BILLION
2011
2012
2013
2014
2015
2015
MORTGAGE LOCATIONS
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W I N T R U S T F I N A N C I A L C O R P O R AT I O N | 2 0 1 5 S H A R E H O L D E R S ’ L E T T E R
THE NICHES:
PREPARED
TO THROW
WHATEVER’S
NEEDED
OUR PITCHES (OR NICHES)
Community Advantage is one of
Agriculture Banking provides crop
the leading providers of financial
insurance products to farmers,
services for homeowner communities
and offers lending and financial
in the Midwest. The group supports
services to commercial agriculture
condominium, townhouse and
companies for daily and long-term
Most pitchers concentrate on
homeowner associations with
operational needs. The group assists
four different pitches at most. We
financing, treasury management
with transportation, distribution and
specialize in so many more. Our
tools, reserve investments and online
equipment financing and provides
asset niches offer variety, with
account services.
farm service agency guarantees and
the accuracy of knowing what to
offer when. In other words, solid
pitching skills.
Farmer Mac II rate options.
FIRST Insurance Funding is one of the
largest insurance premium financing
Wintrust Business Credit offers creative
companies in the U.S. The company
and competitive asset-based lending to
We rely on our niche groups to
offers finance programs that provide
middle-market companies. The division
help us continue to grow without
funding and financial services tailored to
also provides revolving lines of credit
overreaching for credits contained
each client’s individual needs.
on accounts receivable and inventory,
within core banking portfolio
loan areas. These groups allow us
to truly be experts at what we
do. These specialty services are
as well as term loans secured by
FIRST Insurance Funding – Agency
equipment and real estate.
Lending provides exceptional lending
options for insurance agencies. This
the reason we’re able to refer to
Wintrust Construction, Engineering
group offers custom commercial loans
our banks as “one-stop-shops”.
& Architecture focuses on the unique
based on an agency’s strategic needs.
banking needs of the Chicago area’s
We offer proficiency in very
specific areas. Our niche groups
have also given our employees
construction industry. Based on industry
FIRST Insurance Funding – Life Division
knowledge and experience, the team
offers insurance premium financing for
delivers a well-rounded relationship
the freedom to find a specialty.
life insurance. The division focuses on
offering working capital lines of credit,
Many of our niches were created
providing solutions specifically for each
term loans, treasury management
based on a banker in another area
individual, or company, looking to fund
tools, investment management and
identifying a need. It keeps our
the cost of premiums.
personalized banking services.
FIRST Insurance Funding of Canada
Wintrust Retirement Plan Services
specializes in insurance premium
ensures that companies attract and
financing for the Canadian market. The
retain the best employees with a
company offers pre-approved terms,
variety of competitive retirement plans,
competitive rates and flexible payment
including defined benefit and IRA-
options for funding insurance premiums.
based. It can also assists with employer-
bankers growing and branching
out into industries that fit them
and benefit the long-term health
of the Company.
sponsored college savings plans.
Tricom Funding provides staffing
financing and administrative services.
The company focuses on payroll
funding for staffing companies, payroll
processing, accounts receivable
financing, and back office and
administrative support.
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W I N T R U S T F I N A N C I A L C O R P O R AT I O N
OUR PITCHES (OR NICHES) cont.
Wintrust Asset Finance focuses
Wintrust Government, Non-Profit &
Wintrust SBA Lending provides
on customized company leasing
Healthcare provides financial solutions
expertise in Small Business
opportunities. The team and its
for mission-based organizations. The
Administration loans. The group
additional groups, Wintrust Business
group offers tailored financing packages
has extensive knowledge of SBA
Credit, Wintrust Commercial Finance,
and services to support hospitals, non-
Express, SBA 7a and CDC/504 Loans
and Wintrust Equipment Finance,
profits, educational institutions and
and can provide guidance on the
provide flexible leasing solutions
local government operations.
appropriate loan type and how to
to help with acquisition, expansion,
complete the process.
day-to-day business management and
Wintrust Mortgage Correspondent
migration of hardware and software
supports credit unions, banks and
Wintrust Ventures is a division that
capital asset needs.
mortgage bankers to purchase
focuses on the unique needs of
residential mortgages for sale in the
start-ups. The group is positioned
Wintrust Franchise Services provides
secondary market. The group offers a
to provide guidance, networking
banking solutions for franchisees
delegated correspondent option for
opportunities, knowledge, financing,
throughout the country. The team
clients who deliver a whole-closed
wealth management tools and, in some
offers loan products and resources to
loan for purchase or a non-delegated
instances, investment, to support
get a new franchise up and running,
correspondent option for clients who
Chicago’s innovation community.
or to support one that’s already
need underwriting support.
well-established.
Wintrust Loan Capital Markets
Wintrust’s Mortgage Warehouse Lines
provides financing solutions through
Wintrust Funds Group provides
provide short-term revolving lines to
partnerships with premier lenders
commercial banking services for
mortgage originators in order to fund
and investors. The group focuses on
private investment funds, investment
mortgages before they sell such loans
originating, structuring and arranging
management companies and third
to secondary markets.
credit facilities for middle-market,
party administrators.
commercial real estate and private
Wintrust Professional Practice Group
Wintrust Government Funds helps to
provides loans for dental, optometry,
provide financial solutions for school
veterinary, physician and pharmaceutical
districts, park districts, municipalities
practices. The group also offers
and other local government entities.
financing for practice acquisition,
The division offers a full suite of retail
buy-in, expansion or the refinance of
and business banking options, and
existing debt.
specialized municipal offerings, to
deliver customized packages.
PAG E 1 6
equity firms.
2015 SHAREHOLDERS’ LETTER
A GAME IS ONLY AS GOOD AS ITS RULES
Like any good baseball game, someone’s
areas. We’re sincere in offering solutions
is the second
got to keep the teams honest
that really support those areas
highest rating on
about the play. If the burdensome
including our Money Smart Education
the four-point
regulatory environment is the umpire,
Series; first-time homebuyer and
scale.
our compliance, fair lending and
credit score seminars; Everyday Loan
Although, the
Community Reinvestment Act (CRA)
solutions; and free checking and forced
umps are a big
efforts are our coaches ensuring we
savings accounts. To be specific, in 2015,
part of our game, our
play by the rules. We may not always
our organization hosted more than 890
goal is always to make
like the call, but we never want to get
seminars and classes to help educate
sure they don’t interfere with
thrown from the game for arguing too
more than 11,740 people.
what we do. We continue to find a way
strongly with the umpire. It is critical
to comply with increased regulations
for our organization to play inside the
So far, our record is pretty
(sometimes begrudgingly) while
foul lines and keep it fair.
“outstanding.” Seven of our 15
ensuring our customer experience isn’t
bank charters (47%) have received
diminished.
We have a strong focus on providing
Outstanding CRA ratings compared
great services to our diverse
with the most recent bank national
communities across the board,
average from 2014, 6.4%. The rest of our
including low-to-moderate income
banks are rated as “Satisfactory,” which
TRAINING: IT’S NOT JUST FOR THE SPRING
To have the best and brightest
helps new hires get a better feel for
aspiring commercial bankers—was still
employees, who continue to excel, we
who we are right away. In 2015, many
strong with 30 people working their way
need good training all year long. This
new employees went through the one-
through the two-year program, which
is a long-term, Company investment.
day workshop offered once a month
includes classroom and on-the-job
In 2015, we had a big push for training
throughout the year.
training opportunities.
offer internal training programs. This
2015 also saw a concentration on more
Wintrust Mortgage continued to
is an area we focus on improving year-
employee-initiated, outside trainings.
expand its junior loan officer (LO)
to-year. In 2015, Wintrust University
It’s something we encouraged and
program in 2015. The average age of LOs
held 702 sessions, compared with 421
tracked at the corporate level to ensure
is more than 50, so the program—which
in 2014, and had 8,957 participants over
employees were seeking training in the
pairs junior LOs with a mentor for
5,337 in 2014. Trainings included banker
areas they deemed most beneficial.
training—focuses on hiring and training
academies, leadership development
A strong focus on training helps us
young and more diverse LOs.
workshops and technology and
keep up with industry trends and new
systems courses.
knowledge so we can continue to offer
Wintrust-wide. We’ve continued to
the best resources and services.
We also created a new onboarding
training program in 2015. Our unique
Our commercial, wealth and mortgage
structure and culture make us a
groups were also busy with training
complicated Company to figure out.
this year. Wintrust Credit Academy—
The focus on new employee training
our credit analyst program to recruit
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W I N T R U S T F I N A N C I A L C O R P O R AT I O N | 2 0 1 5 S H A R E H O L D E R S ’ L E T T E R
AND THE CROWD GOES WILD!
To be a great baseball team, it’s
our commitment to work towards
important to appeal to your fans
stronger communities.
and keep them cheering for more.
That means appealing to all kinds of
These diverse areas have strong
different groups, areas, industries and
local economies and business
people. Over the past few years, we’ve
communities, so our small business
pushed ourselves into new areas and
focus also helps our diversity efforts.
markets through diversity outreach.
In 2015, we continued to work to
That focus continued.
improve our business offerings and
relationships. Over the past few years,
We’re lucky enough to serve an area
we standardized our small business
that’s rich with diverse communities.
solutions and loan offerings. Last year,
Twenty-two percent of our footprint is
we revisited some of those decisions to
Latino and 17% African American. And,
adjust our product features and make
when we look at the nation’s largest
them even better.
consumer markets in 2015, Illinois’
African American, Asian, multiracial,
We also continued many of the strong
and Hispanic consumers, place it in the
partnerships we’ve formed over the
top ten for each group when it comes
years in order to offer our clients
to buying power. Even in Wisconsin, the
the best resources in the area. Our
percentage change in buying power for
relationships—like those we maintain
Asian and Hispanic consumers, 39.4%
with local chambers of commerce,
and 30.9% respectively, ranked above
the National Organization of Women
the U.S. average between 2010 and 2015.
Business Owners and SCORE—enable
That means, without a doubt, one area
us to support local businesses in ways
of potential Company growth is within
that go well beyond banking.
some of the more diverse communities
we cover.
This strategy is working. In 2015,
our business customers were more
2015 marked the fourth year of our
diverse—culturally, ethnically and
organized outreach efforts and it
by trade—and more dense across
continues to offer a lot of potential.
our footprint than ever before. We
Last year we became even more
support 5,200 businesses in diverse
recognizable in these markets. The
areas in more than 1,600 different
organizations and groups we work
industries. You can find one of the
with know that, for us, it’s about
more than 50,000 businesses that bank
investing in the areas we serve and not
with us, on average, every half mile
solely about meeting regulations and
across our footprint.
satisfying exams.
In 2015, at the corporate level, we
partnered with 90 organizations,
professional associations and
chambers of commerce as part of
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PAG E 1 9
WE ROOT, ROOT,
ROOT FOR HOME
Why? Because we were built here, for
here, and we don’t plan on leaving.
This isn’t just where we ended up.
We chose to be here and it’s a major
part of who we are as a Company. We
often say, we actually know this area.
And, we really do. Just like one of
our niches specializing in something
specific, one topic we know well is
the area that includes Chicago, its
surrounding suburbs, and southern
Wisconsin. It’s those local roots that
make us even more invested in these
communities’ success.
While our big bank competitors come
in and blanket a market, we diligently
work to get to know the communities
we serve. We love to be part of each
and every one. We promise that
when our customers bank with us,
they can be certain their money goes
back to things that matter most to
them. We’re proud to invest in the
local areas we serve by partnering
with local organizations, offering local
sponsorships and supporting the local
economy and business community.
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W I N T R U S T F I N A N C I A L C O R P O R AT I O N | 2 0 1 5 S H A R E H O L D E R S ’ L E T T E R
IT’S NOT ABOUT THE SEASON; IT’S ABOUT THE LEGACY
If there’s one thing we’ve learned from
counting or drive-up services in 2015,
relationship we’ve formed across all of
our baseball partners, it’s that you can’t
we made it a point to highlight how
our companies and divisions.
get caught up in each season. It’s about
important those extra things can be to
the legacy you create as a team. Your
a customer. Like coins, the little things
We are a company that strives to offer
Company knows how to play the game
add up.
the best-in-class financial services,
for long-term success.
but we also do so much more. We
At the end of the day, we want
understand, invest in, care about,
You’ll never see us take the risky
to know that each and every
give back to and commit to the
loans that many of our peers do.
interaction—whether it’s a kid opening
communities we serve. That’s what it
You won’t see us cutting corners
her first Junior Saver account, a
means to be Wintrust.
at the risk of creating dissatisfied
commercial client solidifying a line
employees. And, you certainly won’t
of credit, or a community group
Thank you for being a shareholder. We
see us trimming costs or eliminating
we’re working with—understands the
hope to see you at our annual meeting
services that negatively impact our
kind of company we are. For us, it
at 10 a.m. on May 26, 2016 at our
customers. In fact, while some of our
always comes back to the reputation
corporate headquarters at 9700 West
big bank competitors cut convenient,
we’ve built with our customers,
Higgins Road in Rosemont, Illinois.
complementary offerings like coin
communities, shareholders and every
Sincerely,
Peter D. Crist
Edward J. Wehmer
David A. Dykstra
Chairman of the Board (Non-Executive)
President & Chief Executive Officer
Senior Executive Vice President &
Chief Operating Officer
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W I N T R U S T F I N A N C I A L C O R P O R AT I O N
OUR COMMUNITY BANK BRANDS
,
OUR SPECIALIZED BRANDS
A DIVISION OF BEVERLY BANK & TRUST COMPANY, N.A.
SBA LENDING
PAG E 2 2
.
.
2015 SHAREHOLDERS’ LETTER
OUR LOCATIONS
94
43
90
94
90
88
88
355
39
94
80
80
55
57
65
9700 WEST HIGGINS ROAD | ROSEMONT | ILLINOIS , 60018
W I N T R U S T. C O M / F I N D U S
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