Wintrust Financial Corp Q2 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : I just wanted to ask on the fixed rate loan portfolio. It's about $17.5 billion. I just wanted to make sure that the $7.8 billion, $7.9 billion, mentioned that reprices or matures over the next year or so. Do you happen to know what the existing yield is on that portfolio? And then what the -- like what new origination rates look like right now?

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Got it. And then I did want to ask just within the available-for-sale portfolio. You give the effective duration [of 6.5 years]. I wanted to ask you if you know what the conditional prepayment rate you're assuming within that duration calculation is.

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Okay. Great. I just want to ask just on the CRE deep dive that you talked about, where I think it was 32% would need some type of short-term extensions; 16%, a little additional attention; 50% or 52%, qualifying for renewal. I guess is that the way it works down. You kind of look at it, you REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 20, 2023 / 2:00PM, WTFC.OQ - Q2 2023 Wintrust Financial Corp Earnings Call say you qualify, you might need a short-term extension, you probably need some more equity. I guess like what drives the delineation between just needing a short-term extension and maybe needing to bring more equity to the table. And then if you could, just on the ones that need a short-term extension, like what happens after they get the short-term extension? Like how long is the extension for and do those loans move off the balance sheet and go somewhere else? Just trying to understand the moving parts there.

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Got it. Okay. That's helpful. And you mentioned -- you did mention that you're still seeing a lot in that end market. Is that for a wide range of projects? Or is it more, I guess, more tailored to specific asset classes of construction where there's available liquidity.

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Got it. And I know it was a smaller amount of loans and it was a (inaudible) things. It was a relatively small charge but did I hear you right and read right, I guess, that the $8 million charge that you took against $17 million of co-working office loans. Was that or it was an $8 million charge on a $17 million loan portfolio?

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Yes. No, I understand that. And so you don't think that, that level of charge is indicative of what you might see if you or other banks maybe had to sell what I would call a more regular way, kind of normal office.

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Got it. And then just one last one for me, just on the loan sale within the commercial finance, premium finance portfolio. Who are the end buyers of these? You don't need to give a name, obviously, but just like a type, is it private equity? Like who are the end buyers of this type of loan portfolio. And I think you mentioned that this kind of gives you the opportunity to explore other types of these transactions down the road. What would drive you to kind of look to lean into selling more of these loans versus keeping them on balance sheet?

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Got it. And I think I heard you right that you're going to continue to service these loans for those borrowers, but they are pretty short term. So is there much in the way of servicing income that will come from that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 20, 2023 / 2:00PM, WTFC.OQ - Q2 2023 Wintrust Financial Corp Earnings Call

Question: Broderick Dyer Preston - UBS Investment Bank, Research Division - Analyst : Sorry about that. I just wanted to clarify something on the co-working space. Is that like a [WeWork]? I just wanted to make sure I totally understood what the property was.