Wintrust Financial Corporation
ROSEMONT, Ill, Oct. 21, 2024 (GLOBE NEWSWIRE) — Wintrust Financial Corporation (“Wintrust”, “the Company”, “we” or “our”) (Nasdaq: WTFC) announced net income of $509.7 million or $7.67 per diluted common share for the first nine months of 2024 compared to net income of $499.1 million or $7.71 per diluted common share for the same period of 2023. Pre-tax, pre-provision income (non-GAAP) for the first nine months of 2024 totaled a record $778.1 million, compared to $751.3 million in the first nine months of 2023.
The Company recorded quarterly net income of $170.0 million or $2.47 per diluted common share for the third quarter of 2024 compared to net income of $152.4 million or $2.32 per diluted common share for the second quarter of 2024. Pre-tax, pre-provision income (non-GAAP) totaled $255.0 million as compared to $251.4 million for the second quarter of 2024.
Results of operations include those of Macatawa Bank Corporation (“Macatawa”), since the acquisition date of August 1, 2024.
Timothy S. Crane, President and Chief Executive Officer, commented, “Our net income for both the third quarter and year-to-date 2024 were driven by robust organic loan and deposit growth as well as a stable net interest margin. We believe we are well-positioned for strong financial performance as we continue our momentum in the fourth quarter of 2024 and into 2025.”
Additionally, Mr. Crane emphasized, “Net interest margin in the third quarter remained stable, decreasing one basis point as compared to the second quarter of 2024. We expect net interest margin to remain in the 3.50% range in the fourth quarter of 2024 and into 2025. Stable net interest margin coupled with continued balance sheet growth should result in net interest income growth. Focusing on growth of net interest income, disciplined expense control and maintaining our consistent credit standards should drive strong financial performance.”
Mr. Crane continued, “I want to recognize the efforts of our new Macatawa teammates and committed Wintrust team members on the seamless transaction and a solid beginning to integration activities. Macatawa offers a unique opportunity for Wintrust to expand into the desirable west Michigan market with a compatible management team and reputable brand. The quality core deposit franchise, excess liquidity and pristine credit quality coupled with aligned values make the acquisition an ideal fit for the Company. We are thrilled to bring our product offerings to Michigan and continue Macatawa’s commitment to customer service and community involvement.”
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Highlights of the third quarter of 2024:
Comparative information to the second quarter of 2024, unless otherwise noted
Total loans increased by approximately $2.4 billion, which includes approximately $1.3 billion of acquired balances relating to Macatawa. Excluding Macatawa, total loans increased $1.1 billion or 10% annualized.
Total deposits increased by approximately $3.4 billion, which includes approximately $2.3 billion of acquired balances relating to Macatawa. Excluding Macatawa, total deposits increased $1.1 billion or 9% annualized.
Total assets increased by $4.0 billion, which includes approximately $2.9 billion of acquired assets relating to Macatawa. Excluding Macatawa, total assets increased $1.1 billion or 8% annualized.
Net interest income increased to $502.6 million in the third quarter of 2024 compared to $470.6 million in the second quarter of 2024, primarily due to average earning asset growth and the addition of Macatawa for the last two months of the third quarter.
Non-interest income was impacted by the following:
Net gains on investment securities totaling $3.2 million in the third quarter of 2024 related to changes in the value of equity securities as compared to net losses of $4.3 million in the second quarter of 2024.
Unfavorable mortgage servicing rights (“MSRs”) related revenue totaled $11.4 million in the third quarter of 2024 compared to favorable MSRs related revenue of $2.8 million in the second quarter of 2024.
Non-interest expense was impacted by the following:
Macatawa added approximately $10.1 million of total operating expenses, including $3.0 million of core deposit intangible asset amortization.
Incurred acquisition related costs of $1.6 million in the third quarter of 2024 as compared to $542,000 in the second quarter of 2024.
Provision for credit losses totaled $22.3 million in the third quarter of 2024, including a one-time acquisition-related Day 1 provision of approximately $15.5 million, as compared to a provision for credit losses of $40.1 million in the second quarter of 2024.
Tangible book value per common share (non-GAAP) increased to $76.15 as of September 30, 2024 as compared to $72.01 as of June 30, 2024. See Table 18 for reconciliation of non-GAAP measures.
Mr. Crane noted, “We are very pleased with our organic loan and deposit growth rates. Excess liquidity acquired in the Macatawa transaction was deployed by funding quality loan growth and reducing exposure to wholesale and brokered funding sources. Non-interest bearing deposits remained at 21% of total deposits at the end of the third quarter of 2024 and increased $708 million compared to the second quarter of 2024. We continue to leverage our customer relationships and market positioning to generate deposits, grow loans and build long term franchise value.”
Commenting on credit quality, Mr. Crane stated, “Our credit metrics were stable. Net charge-offs totaled $26.7 million, or 23 basis points of average total loans on an annualized basis, in the third quarter of 2024 and were spread primarily across the commercial and property and casualty premium finance receivables portfolios. This compared to net charge-offs totaling $30.0 million, or 28 basis points of average total loans on an annualized basis, in the second quarter of 2024. Approximately $18.3 million of charge-offs in the current quarter were previously reserved for in the second quarter of 2024. Non-performing loans totaled $179.7 million, or 0.38% of total loans, at the end of the third quarter of 2024 compared to $174.3 million, or 0.39% of total loans, at the end of the second quarter of 2024. Total non-performing assets comprised 0.30% of total assets as of September 30, 2024, a two basis point decline compared to June 30, 2024. We continue to be conservative and proactive in reviewing credit and maintaining our consistently strong credit standards. We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit.”
In summary, Mr. Crane noted, “Our record year continued as we built upon our strong momentum with the acquisition of Macatawa. Substantial loan growth in the third quarter and inclusion of Macatawa for all three months in the fourth quarter create positive revenue momentum. We have reduced our asset sensitivity to interest rates and therefore we believe that we are well positioned for the current interest rate environment and consensus forecast for additional interest rate cuts by the Federal Reserve. Steadfast commitment to credit quality, growing net interest income and increasing our long term franchise value remain our priority.”
The graphs below illustrate certain financial highlights of the third quarter of 2024 as well as historical financial performance. See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information with respect to non-GAAP financial measures/ratios, including the reconciliations to the corresponding GAAP financial measures/ratios.
Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/bc11950c-ec29-45c6-902d-8e0709edd6de
SUMMARY OF RESULTS:
BALANCE SHEET
Total assets increased $4.0 billion in the third quarter of 2024 as compared to the second quarter of 2024. Total loans increased by $2.4 billion as compared to the second quarter of 2024. The increase in total loans included approximately $1.3 billion of loans related to the Macatawa acquisition. The increase in loans was diversified across nearly all loan portfolios.
Total liabilities increased by $3.1 billion in the third quarter of 2024 as compared to the second quarter of 2024 primarily due to a $3.4 billion increase in total deposits. The increase in total deposits included approximately $2.3 billion related to the Macatawa acquisition. Excess liquidity acquired in the Macatawa transaction enabled the Company to reduce brokered funding reliance by $858 million. Non-interest bearing deposits increased $708 million in the third quarter of 2024 as compared to the second quarter of 2024. Non-interest bearing deposits as a percentage of total deposits was 21% at September 30, 2024, June 30, 2024 and March 31, 2024. The Company’s loans to deposits ratio was 91.6% on September 30, 2024 as compared to 93.0% as of June 30, 2024.
For more information regarding changes in the Company’s balance sheet, see Consolidated Statements of Condition and Table 1 through Table 3 in this report.
NET INTEREST INCOME
For the third quarter of 2024, net interest income totaled $502.6 million, an increase of $32.0 million as compared to the second quarter of 2024. The $32.0 million increase in net interest income in the third quarter of 2024 compared to the second quarter of 2024 was primarily due to a $3.1 billion increase in average earning assets, which included the addition of Macatawa in the third quarter. These benefits were partially offset by a one basis point decrease in the net interest margin.
Net interest margin was 3.49% (3.51% on a fully taxable-equivalent basis, non-GAAP) during the third quarter of 2024 compared to 3.50% (3.52% on a fully taxable-equivalent basis, non-GAAP) during the second quarter of 2024. The net interest margin decrease as compared to the second quarter of 2024 was primarily due to a one basis point decrease in the yield on earning assets and one basis point decrease in the net free funds contribution. These declines were partially offset by a one basis point decrease in rate paid on interest-bearing liabilities. The one basis point decrease in yield on earnings assets in the third quarter of 2024 as compared to the second quarter of 2024 was primarily due to an increase in average interest-bearing cash as a percentage of average quarterly earning assets associated with the Macatawa acquisition. The one basis point decrease in the rate paid on interest-bearing liabilities in the third quarter of 2024 as compared to the second quarter of 2024 was primarily due to a one basis point decrease in rate paid on interest-bearing deposits.
For more information regarding net interest income, see Table 4 through Table 8 in this report.
ASSET QUALITY
The allowance for credit losses totaled $436.2 million as of September 30, 2024, relatively unchanged compared to $437.6 million as of June 30, 2024. A provision for credit losses totaling $22.3 million was recorded for the third quarter of 2024 as compared to $40.1 million recorded in the second quarter of 2024. Provision for credit losses in the third quarter of 2024 included Day 1 provision for credit losses of approximately $15.5 million related to the Macatawa acquisition. The lower provision for credit losses recognized in the third quarter of 2024 compared to the second quarter of 2024 was primarily attributable to lower required specific reserves on nonaccrual loans, improved forecasted macroeconomic conditions, and, to a lesser extent, portfolio changes related to improved risk rating mix and shorter life of loan. For more information regarding the allowance for credit losses and provision for credit losses, see Table 11 in this report.
Management believes the allowance for credit losses is appropriate to account for expected credit losses. The Current Expected Credit Losses accounting standard requires the Company to estimate expected credit losses over the life of the Company’s financial assets as of the reporting date. There can be no assurances, however, that future losses will not significantly exceed the amounts provided for, thereby affecting future results of operations. A summary of the allowance for credit losses calculated for the loan components in each portfolio as of September 30, 2024, June 30, 2024, and March 31, 2024 is shown on Table 12 of this report.
Net charge-offs totaled $26.7 million in the third quarter of 2024, a decrease of $3.3 million as compared to $30.0 million of net charge-offs in the second quarter of 2024. Approximately $18.3 million of charge-offs in the current quarter were previously reserved for in the second quarter of 2024. Net charge-offs as a percentage of average total loans were 23 basis points in the third quarter of 2024 on an annualized basis compared to 28 basis points on an annualized basis in the second quarter of 2024. For more information regarding net charge-offs, see Table 10 in this report.
The Company’s delinquency rates remain low and manageable. For more information regarding past due loans, see Table 13 in this report.
Non-performing assets totaled $193.4 million and comprised 0.30% of total assets as of September 30, 2024, as compared to $194.0 million, or 0.32% of total assets, as of June 30, 2024. Non-performing loans totaled $179.7 million and comprised 0.38% of total loans at September 30, 2024, as compared to $174.3 million and 0.39% of total loans at June 30, 2024. The increase in the third quarter of 2024 was primarily due to an increase in certain credits within the commercial portfolios becoming nonaccrual. For more information regarding non-performing assets, see Table 14 in this report.
Credit metrics remained stable and at relatively low levels in the third quarter of 2024.
NON-INTEREST INCOME
Wealth management revenue increased by $1.8 million in the third quarter of 2024 as compared to the second quarter of 2024 primarily due to the Macatawa acquisition and increased asset management fees from higher assets under management during the period. Wealth management revenue is comprised of the trust and asset management revenue of Wintrust Private Trust Company and Great Lakes Advisors, the brokerage commissions, managed money fees and insurance product commissions at Wintrust Investments and fees from tax-deferred like-kind exchange services provided by the Chicago Deferred Exchange Company.
Mortgage banking revenue decreased by $13.2 million in the third quarter of 2024 as compared to the second quarter of 2024 primarily due to $11.4 million unfavorable MSR related revenues, net of servicing hedge, in the third quarter of 2024 compared to $2.8 million favorable MSR related revenues in the second quarter of 2024 and slightly decreased production revenue due to reduced production margin. This was partially offset by a favorable adjustment to the Company’s held-for-sale portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $3.5 million in the third quarter of 2024 compared to a $642,000 favorable adjustment in the second quarter of 2024. The Company monitors the relationship of these assets and seeks to minimize the earnings impact of fair value changes. For more information regarding mortgage banking revenue, see Table 16 in this report.
The Company recognized $3.2 million in net gains on investment securities in the third quarter of 2024 as compared to $4.3 million in net losses in the second quarter of 2024. The net gains in the third quarter of 2024 were primarily the result of unrealized gains on the Company’s equity investment securities with a readily determinable fair value.
Fees from covered call options decreased by $1.1 million in the third quarter of 2024 as compared to the second quarter of 2024. The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio. These option transactions are designed to mitigate overall interest rate risk and do not qualify as hedges pursuant to accounting guidance.
Other income decreased by $5.1 million in the third quarter of 2024 compared to the second quarter of 2024 primarily due to a gain recognized in the second quarter of 2024 associated with our property and casualty insurance premium finance receivable loan sale transaction.
For more information regarding non-interest income, see Table 15 in this report.
NON-INTEREST EXPENSE
Non-interest expenses totaled $360.7 million in the third quarter of 2024, increasing $20.3 million as compared to $340.4 million in the second quarter of 2024. The Macatawa acquisition impacted this increase by approximately $10.1 million of non-interest expense associated with Macatawa, which included $3.0 million in amortization of other acquisition-related intangible assets in the third quarter of 2024.
Salaries and employee benefits expense increased by $12.7 million in the third quarter of 2024 as compared to the second quarter of 2024. The $12.7 million increase is primarily related to higher incentive compensation expense due to elevated bonus accruals in the third quarter of 2024 as well as increased salaries expense due to the Macatawa acquisition and additional staffing to support the Company’s growth.
Software and equipment expense increased $2.3 million in the third quarter of 2024 as compared to the second quarter of 2024 primarily due to software expense relating to upgrading and maintenance of information technology and security infrastructure as well as the Macatawa acquisition.
Advertising and marketing expenses in the third quarter of 2024 totaled $18.2 million, which is a $803,000 increase as compared to the second quarter of 2024. Marketing costs are incurred to promote the Company’s brand, commercial banking capabilities and the Company’s various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the Company’s non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs utilized which are determined based on the market area, targeted audience, competition and various other factors. Generally, these expenses are elevated in the second and third quarters of each year.
For more information regarding non-interest expense, see Table 17 in this report.
INCOME TAXES
The Company recorded income tax expense of $62.7 million in the third quarter compared to $59.0 million in the second quarter of 2024. The effective tax rates were 26.95% in the third quarter of 2024 compared to 27.90% in the second quarter of 2024. The effective tax rates were impacted by an overall lower level of provision for state income tax expense in the comparable periods.
BUSINESS UNIT SUMMARY
Community Banking
Through its community banking unit, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the third quarter of 2024, the community banking unit expanded its commercial, commercial real estate and residential real estate loan portfolios.
Mortgage banking revenue was $16.0 million for the third quarter of 2024, a decrease of $13.2 million as compared to the second quarter of 2024, primarily due to $11.4 million unfavorable MSR related revenues, net of servicing hedge, in the third quarter of 2024 compared to $2.8 million favorable MSR related revenues in the second quarter of 2024 and slightly decreased production revenue due to reduced production margin. This was partially offset by a favorable adjustment to the Company’s held-for-sale portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $3.5 million in the third quarter of 2024 compared to a $642,000 favorable adjustment in the second quarter of 2024. Service charges on deposit accounts totaled $16.4 million in the third quarter of 2024, which was relatively stable compared to the second quarter of 2024. The Company’s gross commercial and commercial real estate loan pipelines remained solid as of September 30, 2024 indicating momentum for expected continued loan growth in the fourth quarter of 2024.
Specialty Finance
Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries, accounts receivable financing and value-added, out-sourced administrative services and other services. Originations within the insurance premium financing receivables portfolios were $4.8 billion during the third quarter of 2024. Average balances increased by $259.8 million, as compared to the second quarter of 2024. The Company’s leasing portfolio balance remained stable in the third quarter of 2024, with its portfolio of assets, including capital leases, loans and equipment on operating leases, totaling $3.7 billion as of September 30, 2024 and June 30, 2024. Revenues from the Company’s out-sourced administrative services business were $1.5 million in the third quarter of 2024, which was relatively stable compared to the second quarter of 2024.
Wealth Management
Through four separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, tax-deferred like-kind exchange services, asset management, and securities brokerage services. See “Items Impacting Comparative Results,” regarding the sale of the Company’s Retirement Benefits Advisors (“RBA”) division during the first quarter of 2024. Wealth management revenue totaled $37.2 million in the third quarter of 2024, relatively stable as compared to the second quarter of 2024. At September 30, 2024, the Company’s wealth management subsidiaries had approximately $51.1 billion of assets under administration, which included $8.0 billion of assets owned by the Company and its subsidiary banks.
ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS
Business Combination
On August 1, 2024, the Company completed its previously announced acquisition of Macatawa, the parent company of Macatawa Bank. In conjunction with the completed acquisition, the Company issued approximately 4.7 million shares of common stock. Macatawa operates 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties in the state of Michigan. Macatawa offers a full range of banking, retail and commercial lending, wealth management and ecommerce services to individuals, businesses and governmental entities. As of August 1, 2024, Macatawa had approximately $2.9 billion in assets, $2.3 billion in deposits and $1.3 billion in loans. The Company preliminarily recorded goodwill of approximately $144.6 million on the purchase.
Division Sale
In the first quarter of 2024, the Company sold its RBA division and recorded a gain of approximately $20.0 million in other non-interest income from the sale.
Business Combination
On April 3, 2023, the Company completed its acquisition of Rothschild & Co Asset Management US Inc. and Rothschild & Co Risk Based Investments LLC from Rothschild & Co North America Inc. As the transaction was determined to be a business combination, the Company recorded goodwill of approximately $2.6 million on the purchase.
WINTRUST FINANCIAL CORPORATION
Key Operating Measures
Wintrust’s key operating measures and growth rates for the third quarter of 2024, as compared to the second quarter of 2024 (sequential quarter) and third quarter of 2023 (linked quarter), are shown in the table below:
% or(1)
basis point (bp) change from
2nd Quarter
2024
% or
basis point (bp) change from
3rd Quarter
2023
Three Months Ended
(Dollars in thousands, except per share data)
Sep 30, 2024
Jun 30, 2024
Sep 30, 2023
Net income
$
170,001
$
152,388
$
164,198
12
%
4
%
Pre-tax income, excluding provision for credit losses (non-GAAP) (2)
255,043
251,404
244,781
1
4
Net income per common share – Diluted
2.47
2.32
2.53
6
(2)
Cash dividends declared per common share
0.45
0.45
0.40
—
13
Net revenue (3)
615,730
591,757
574,836
4
7
Net interest income
502,583
470,610
462,358
7
9
Net interest margin
3.49
%
3.50
%
3.60
%
(1)
bps
(11)
bps
Net interest margin – fully taxable-equivalent (non-GAAP) (2)
3.51
3.52
3.62
(1)
(11)
Net overhead ratio (4)
1.62
1.53
1.59
9
3
Return on average assets
1.11
1.07
1.20
4
(9)
Return on average common equity
11.63
11.61
13.35
2
(172)
Return on average tangible common equity (non-GAAP) (2)
13.92
13.49
15.73
43
(181)
At end of period
Total assets
$
63,788,424
$
59,781,516
$
55,555,246
27
%
15
%
Total loans (5)
47,067,447
44,675,531
41,446,032
21
14
Total deposits
51,404,966
48,049,026
44,992,686
28
14
Total shareholders’ equity
6,399,714
5,536,628
5,015,613
62
28
(1) Period-end balance sheet percentage changes are annualized.
(2) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(3) Net revenue is net interest income plus non-interest income.
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency.
(5) Excludes mortgage loans held-for-sale.
Certain returns, yields, performance ratios, or quarterly growth rates are “annualized” in this presentation to represent an annual time period. This is done for analytical purposes to better discern, for decision-making purposes, underlying performance trends when compared to full-year or year-over-year amounts. For example, a 5% growth rate for a quarter would represent an annualized 20% growth rate. Additional supplemental financial information showing quarterly trends can be found on the Company’s website at www.wintrust.com by choosing “Financial Reports” under the “Investor Relations” heading, and then choosing “Financial Highlights.”
WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights
Three Months Ended
Nine Months Ended
(Dollars in thousands, except per share data)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Selected Financial Condition Data (at end of period):
Total assets
$
63,788,424
$
59,781,516
$
57,576,933
$
56,259,934
$
55,555,246
Total loans(1)
47,067,447
44,675,531
43,230,706
42,131,831
41,446,032
Total deposits
51,404,966
48,049,026
46,448,858
45,397,170
44,992,686
Total shareholders’ equity
6,399,714
5,536,628
5,436,400
5,399,526
5,015,613
Selected Statements of Income Data:
Net interest income
$
502,583
$
470,610
$
464,194
$
469,974
$
462,358
$
1,437,387
$
1,367,890
Net revenue(2)
615,730
591,757
604,774
570,803
574,836
1,812,261
1,701,167
Net income
170,001
152,388
187,294
123,480
164,198
509,683
499,146
Pre-tax income, excluding provision for credit losses (non-GAAP)(3)
255,043
251,404
271,629
208,151
244,781
778,076
751,320
Net income per common share – Basic
2.51
2.35
2.93
1.90
2.57
7.79
7.82
Net income per common share – Diluted
2.47
2.32
2.89
1.87
2.53
7.67
7.71
Cash dividends declared per common share
0.45
0.45
0.45
0.40
0.40
1.35
1.20
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin
3.49
%
3.50
%
3.57
%
3.62
%
3.60
%
3.52
%
3.68
%
Net interest margin – fully taxable-equivalent (non-GAAP)(3)
3.51
3.52
3.59
3.64
3.62
3.54
3.70
Non-interest income to average assets
0.74
0.85
1.02
0.73
0.82
0.86
0.84
Non-interest expense to average assets
2.36
2.38
2.41
2.62
2.41
2.38
2.39
Net overhead ratio(4)
1.62
1.53
1.39
1.89
1.59
1.52
1.55
Return on average assets
1.11
1.07
1.35
0.89
1.20
1.17
1.26
Return on average common equity
11.63
11.61
14.42
9.93
13.35
12.52
13.91
Return on average tangible common equity (non-GAAP)(3)
13.92
13.49
16.75
11.73
15.73
14.69
16.43
Average total assets
$
60,915,283
$
57,493,184
$
55,602,695
$
55,017,075
$
54,381,981
$
58,014,347
$
53,028,199
Average total shareholders’ equity
5,990,429
5,450,173
5,440,457
5,066,196
5,083,883
5,628,346
5,008,648
Average loans to average deposits ratio
93.8
%
95.1
%
94.5
%
92.9
%
92.4
%
94.5
%
93.2
%
Period-end loans to deposits ratio
91.6
93.0
93.1
92.8
92.1
Common Share Data at end of period:
Market price per common share
$
108.53
$
98.56
$
104.39
$
92.75
$
75.50
Book value per common share
90.06
82.97
81.38
81.43
75.19
Tangible book value per common share (non-GAAP)(3)
76.15
72.01
70.40
70.33
64.07
Common shares outstanding
66,481,543
61,760,139
61,736,715
61,243,626
61,222,058
Other Data at end of period:
Common equity to assets ratio
9.4
%
8.6
%
8.7
%
8.9
%
8.3
%
Tangible common equity ratio (non-GAAP)(3)
8.1
7.5
7.6
7.7
7.1
Tier 1 leverage ratio(5)
9.4
9.3
9.4
9.3
9.2
Risk-based capital ratios:
Tier 1 capital ratio(5)
10.5
10.3
10.3
10.3
10.2
Common equity tier 1 capital ratio(5)
9.8
9.5
9.5
9.4
9.3
Total capital ratio(5)
12.2
12.1
12.2
12.1
12.0
Allowance for credit losses(6)
$
436,193
$
437,560
$
427,504
$
427,612
$
399,531
Allowance for loan and unfunded lending-related commitment losses to total loans
0.93
%
0.98
%
0.99
%
1.01
%
0.96
%
Number of:
Bank subsidiaries
16
15
15
15
15
Banking offices
203
177
176
174
174
(1) Excludes mortgage loans held-for-sale.
(2) Net revenue is net interest income plus non-interest income.
(3) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency.
(5) Capital ratios for current quarter-end are estimated.
(6) The allowance for credit losses includes the allowance for loan losses, the allowance for unfunded lending-related commitments and the allowance for held-to-maturity securities losses.
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(In thousands)
2024
2024
2024
2023
2023
Assets
Cash and due from banks
$
725,465
$
415,462
$
379,825
$
423,404
$
418,088
Federal funds sold and securities purchased under resale agreements
5,663
62
61
60
60
Interest-bearing deposits with banks
3,648,117
2,824,314
2,131,077
2,084,323
2,448,570
Available-for-sale securities, at fair value
3,912,232
4,329,957
4,387,598
3,502,915
3,611,835
Held-to-maturity securities, at amortized cost
3,677,420
3,755,924
3,810,015
3,856,916
3,909,150
Trading account securities
3,472
4,134
2,184
4,707
1,663
Equity securities with readily determinable fair value
125,310
112,173
119,777
139,268
134,310
Federal Home Loan Bank and Federal Reserve Bank stock
266,908
256,495
224,657
205,003
204,040
Brokerage customer receivables
16,662
13,682
13,382
10,592
14,042
Mortgage loans held-for-sale, at fair value
461,067
411,851
339,884
292,722
304,808
Loans, net of unearned income
47,067,447
44,675,531
43,230,706
42,131,831
41,446,032
Allowance for loan losses
(360,279
)
(363,719
)
(348,612
)
(344,235
)
(315,039
)
Net loans
46,707,168
44,311,812
42,882,094
41,787,596
41,130,993
Premises, software and equipment, net
772,002
722,295
744,769
748,966
747,501
Lease investments, net
270,171
275,459
283,557
281,280
275,152
Accrued interest receivable and other assets
1,721,090
1,671,334
1,580,142
1,551,899
1,674,681
Trade date securities receivable
551,031
—
—
690,722
—
Goodwill
800,780
655,955
656,181
656,672
656,109
Other acquisition-related intangible assets
123,866
20,607
21,730
22,889
24,244
Total assets
$
63,788,424
$
59,781,516
$
57,576,933
$
56,259,934
$
55,555,246
Liabilities and Shareholders’ Equity
Deposits:
Non-interest-bearing
$
10,739,132
$
10,031,440
$
9,908,183
$
10,420,401
$
10,347,006
Interest-bearing
40,665,834
38,017,586
36,540,675
34,976,769
34,645,680
Total deposits
51,404,966
48,049,026
46,448,858
45,397,170
44,992,686
Federal Home Loan Bank advances
3,171,309
3,176,309
2,676,751
2,326,071
2,326,071
Other borrowings
647,043
606,579
575,408
645,813
643,999
Subordinated notes
298,188
298,113
437,965
437,866
437,731
Junior subordinated debentures
253,566
253,566
253,566
253,566
253,566
Accrued interest payable and other liabilities
1,613,638
1,861,295
1,747,985
1,799,922
1,885,580
Total liabilities
57,388,710
54,244,888
52,140,533
50,860,408
50,539,633
Shareholders’ Equity:
Preferred stock
412,500
412,500
412,500
412,500
412,500
Common stock
66,546
61,825
61,798
61,269
61,244
Surplus
2,470,228
1,964,645
1,954,532
1,943,806
1,933,226
Treasury stock
(6,098
)
(5,760
)
(5,757
)
(2,217
)
(1,966
)
Retained earnings
3,748,715
3,615,616
3,498,475
3,345,399
3,253,332
Accumulated other comprehensive loss
(292,177
)
(512,198
)
(485,148
)
(361,231
)
(642,723
)
Total shareholders’ equity
6,399,714
5,536,628
5,436,400
5,399,526
5,015,613
Total liabilities and shareholders’ equity
$
63,788,424
$
59,781,516
$
57,576,933
$
56,259,934
$
55,555,246
WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
Nine Months Ended
(Dollars in thousands, except per share data)
Sep 30,
2024
Jun 30,
2024
Mar 31,
2024
Dec 31,
2023
Sep 30,
2023
Sep 30, 2024
Sep 30, 2023
Interest income
Interest and fees on loans
$
794,163
$
749,812
$
710,341
$
694,943
$
666,260
$
2,254,316
$
1,846,009
Mortgage loans held-for-sale
6,233
5,434
4,146
4,318
4,767
15,813
12,473
Interest-bearing deposits with banks
32,608
19,731
16,658
21,762
26,866
68,997
57,216
Federal funds sold and securities purchased under resale agreements
277
17
19
578
1,157
313
1,228
Investment securities
69,592
69,779
69,678
68,237
59,164
209,049
170,350
Trading account securities
11
13
18
15
6
42
26
Federal Home Loan Bank and Federal Reserve Bank stock
5,451
4,974
4,478
3,792
3,896
14,903
11,120
Brokerage customer receivables
269
219
175
203
284
663
844
Total interest income
908,604
849,979
805,513
793,848
762,400
2,564,096
2,099,266
Interest expense
Interest on deposits
362,019
335,703
299,532
285,390
262,783
997,254
621,080
Interest on Federal Home Loan Bank advances
26,254
24,797
22,048
18,316
17,436
73,099
53,970
Interest on other borrowings
9,013
8,700
9,248
9,557
9,384
26,961
25,723
Interest on subordinated notes
3,712
5,185
5,487
5,522
5,491
14,384
16,502
Interest on junior subordinated debentures
5,023
4,984
5,004
5,089
4,948
15,011
14,101
Total interest expense
406,021
379,369
341,319
323,874
300,042
1,126,709
731,376
Net interest income
502,583
470,610
464,194
469,974
462,358
1,437,387
1,367,890
Provision for credit losses
22,334
40,061
21,673
42,908
19,923
84,068
71,482
Net interest income after provision for credit losses
480,249
430,549
442,521
427,066
442,435
1,353,319
1,296,408
Non-interest income
Wealth management
37,224
35,413
34,815
33,275
33,529
107,452
97,332
Mortgage banking
15,974
29,124
27,663
7,433
27,395
72,761
75,640
Service charges on deposit accounts
16,430
15,546
14,811
14,522
14,217
46,787
40,728
Gains (losses) on investment securities, net
3,189
(4,282
)
1,326
2,484
(2,357
)
233
(959
)
Fees from covered call options
988
2,056
4,847
4,679
4,215
7,891
17,184
Trading (losses) gains, net
(130
)
70
677
(505
)
728
617
1,647
Operating lease income, net
15,335
13,938
14,110
14,162
13,863
43,383
39,136
Other
24,137
29,282
42,331
24,779
20,888
95,750
62,569
Total non-interest income
113,147
121,147
140,580
100,829
112,478
374,874
333,277
Non-interest expense
Salaries and employee benefits
211,261
198,541
195,173
193,971
192,338
604,975
554,042
Software and equipment
31,574
29,231
27,731
27,779
25,951
88,536
76,853
Operating lease equipment
10,518
10,834
10,683
10,694
12,020
32,035
31,669
Occupancy, net
19,945
19,585
19,086
18,102
21,304
58,616
58,966
Data processing
9,984
9,503
9,292
8,892
10,773
28,779
29,908
Advertising and marketing
18,239
17,436
13,040
17,166
18,169
48,715
47,909
Professional fees
9,783
9,967
9,553
8,768
8,887
29,303
25,990
Amortization of other acquisition-related intangible assets
4,042
1,122
1,158
1,356
1,408
6,322
4,142
FDIC insurance
10,512
10,429
14,537
43,677
9,748
35,478
27,425
OREO expenses, net
(938
)
(259
)
392
(1,559
)
120
(805
)
31
Other
35,767
33,964
32,500
33,806
29,337
102,231
92,912
Total non-interest expense
360,687
340,353
333,145
362,652
330,055
1,034,185
949,847
Income before taxes
232,709
211,343
249,956
165,243
224,858
694,008
679,838
Income tax expense
62,708
58,955
62,662
41,763
60,660
184,325
180,692
Net income
$
170,001
$
152,388
$
187,294
$
123,480
$
164,198
$
509,683
$
499,146
Preferred stock dividends
6,991
6,991
6,991
6,991
6,991
20,973
20,973
Net income applicable to common shares
$
163,010
$
145,397
$
180,303
$
116,489
$
157,207
$
488,710
$
478,173
Net income per common share – Basic
$
2.51
$
2.35
$
2.93
$
1.90
$
2.57
$
7.79
$
7.82
Net income per common share – Diluted
$
2.47
$
2.32
$
2.89
$
1.87
$
2.53
$
7.67
$
7.71
Cash dividends declared per common share
$
0.45
$
0.45
$
0.45
$
0.40
$
0.40
$
1.35
$
1.20
Weighted average common shares outstanding
64,888
61,839
61,481
61,236
61,213
62,743
61,119
Dilutive potential common shares
1,053
926
928
1,166
964
934
888
Average common shares and dilutive common shares
65,941
62,765
62,409
62,402
62,177
63,677
62,007
TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES
% Growth From
(Dollars in thousands)
Sep 30,
2024
Jun 30,
2024
Mar 31,
2024
Dec 31,
2023
Sep 30,
2023
Dec 31,
2023(1)
Sep 30,
2023
Balance:
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. government agencies
$
314,693
$
281,103
$
193,064
$
155,529
$
190,511
NM
65
%
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. government agencies
146,374
130,748
146,820
137,193
114,297
9
28
Total mortgage loans held-for-sale
$
461,067
$
411,851
$
339,884
$
292,722
$
304,808
77
%
51
%
Core loans:
Commercial
Commercial and industrial
$
6,768,382
$
6,226,336
$
6,105,968
$
5,804,629
$
5,894,732
22
%
15
%
Asset-based lending
1,709,685
1,465,867
1,355,255
1,433,250
1,396,591
26
22
Municipal
827,125
747,357
721,526
677,143
676,915
30
22
Leases
2,443,721
2,439,128
2,344,295
2,208,368
2,109,628
14
16
PPP loans
6,301
9,954
11,036
11,533
13,744
(61
)
(54
)
Commercial real estate
Residential construction
73,088
55,019
57,558
58,642
51,550
33
42
Commercial construction
1,984,240
1,866,701
1,748,607
1,729,937
1,547,322
20
28
Land
346,362
338,831
344,149
295,462
294,901
23
17
Office
1,675,286
1,585,312
1,566,748
1,455,417
1,422,748
20
18
Industrial
2,527,932
2,307,455
2,190,200
2,135,876
2,057,957
25
23
Retail
1,404,586
1,365,753
1,366,415
1,337,517
1,341,451
7
5
Multi-family
3,193,339
2,988,940
2,922,432
2,815,911
2,710,829
18
18
Mixed use and other
1,588,584
1,439,186
1,437,328
1,515,402
1,519,422
6
5
Home equity
427,043
356,313
340,349
343,976
343,258
32
24
Residential real estate
Residential real estate loans for investment
3,252,649
2,933,157
2,746,916
2,619,083
2,538,630
32
28
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. government agencies
92,355
88,503
90,911
92,780
97,911
(1
)
(6
)
Residential mortgage loans, early buy-out exercised loans guaranteed by U.S. government agencies
43,034
45,675
52,439
57,803
71,062
(34
)
(39
)
Total core loans
$
28,363,712
$
26,259,487
$
25,402,132
$
24,592,729
$
24,088,651
20
%
18
%
Niche loans:
Commercial
Franchise
$
1,191,686
$
1,150,460
$
1,122,302
$
1,092,532
$
1,074,162
12
%
11
%
Mortgage warehouse lines of credit
750,462
593,519
403,245
230,211
245,450
302
206
Community Advantage – homeowners association
501,645
491,722
475,832
452,734
424,054
14
18
Insurance agency lending
1,048,686
1,030,119
964,022
921,653
890,197
18
18
Premium Finance receivables
U.S. property & casualty insurance
6,253,271
6,142,654
6,113,993
5,983,103
5,815,346
6
8
Canada property & casualty insurance
878,410
958,099
826,026
920,426
907,401
(6
)
(3
)
Life insurance
7,996,899
7,962,115
7,872,033
7,877,943
7,931,808
2
1
Consumer and other
82,676
87,356
51,121
60,500
68,963
49
20
Total niche loans
$
18,703,735
$
18,416,044
$
17,828,574
$
17,539,102
$
17,357,381
9
%
8
%
Total loans, net of unearned income
$
47,067,447
$
44,675,531
$
43,230,706
$
42,131,831
$
41,446,032
16
%
14
%
(1) Annualized.
TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES
% Growth From
(Dollars in thousands)
Sep 30,
2024
Jun 30,
2024
Mar 31,
2024
Dec 31,
2023
Sep 30,
2023
Jun 30,
2024(1)
Sep 30,
2023
Balance:
Non-interest-bearing
$
10,739,132
$
10,031,440
$
9,908,183
$
10,420,401
$
10,347,006
28
%
4
%
NOW and interest-bearing demand deposits
5,466,932
5,053,909
5,720,947
5,797,649
6,006,114
33
(9
)
Wealth management deposits(2)
1,303,354
1,490,711
1,347,817
1,614,499
1,788,099
(50
)
(27
)
Money market
17,713,726
16,320,017
15,617,717
15,149,215
14,478,504
34
22
Savings
6,183,249
5,882,179
5,959,774
5,790,334
5,584,294
20
11
Time certificates of deposit
9,998,573
9,270,770
7,894,420
6,625,072
6,788,669
31
47
Total deposits
$
51,404,966
$
48,049,026
$
46,448,858
$
45,397,170
$
44,992,686
28
%
14
%
Mix:
Non-interest-bearing
21
%
21
%
21
%
23
%
23
%
NOW and interest-bearing demand deposits
11
11
12
13
13
Wealth management deposits(2)
3
3
3
4
4
Money market
34
34
34
33
32
Savings
12
12
13
13
13
Time certificates of deposit
19
19
17
14
15
Total deposits
100
%
100
%
100
%
100
%
100
%
(1) Annualized.
(2) Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wintrust Investments, Chicago Deferred Exchange Company, LLC (“CDEC”), and trust and asset management customers of the Company.
TABLE 3: TIME CERTIFICATES OF DEPOSIT MATURITY/RE-PRICING ANALYSIS
As of September 30, 2024
(Dollars in thousands)
Total Time
Certificates of
Deposit
Weighted-Average
Rate of Maturing
Time Certificates
of Deposit
1-3 months
$
3,125,473
4.71
%
4-6 months
3,238,465
4.55
7-9 months
2,624,913
4.39
10-12 months
619,340
4.05
13-18 months
239,018
3.48
19-24 months
89,361
2.82
24+ months
62,003
2.29
Total
$
9,998,573
4.47
%
TABLE 4: QUARTERLY AVERAGE BALANCES
Average Balance for three months ended,
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(In thousands)
2024
2024
2024
2023
2023
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents(1)
$
2,413,728
$
1,485,481
$
1,254,332
$
1,682,176
$
2,053,568
Investment securities(2)
8,276,576
8,203,764
8,349,796
7,971,068
7,706,285
FHLB and FRB stock
263,707
253,614
230,648
204,593
201,252
Liquidity management assets(3)
$
10,954,011
$
9,942,859
$
9,834,776
$
9,857,837
$
9,961,105
Other earning assets(3)(4)
17,542
15,257
15,081
14,821
17,879
Mortgage loans held-for-sale
376,251
347,236
290,275
279,569
319,099
Loans, net of unearned income(3)(5)
45,920,586
43,819,354
42,129,893
41,361,952
40,707,042
Total earning assets(3)
$
57,268,390
$
54,124,706
$
52,270,025
$
51,514,179
$
51,005,125
Allowance for loan and investment security losses
(383,736
)
(360,504
)
(361,734
)
(329,441
)
(319,491
)
Cash and due from banks
467,333
434,916
450,267
443,989
459,819
Other assets
3,563,296
3,294,066
3,244,137
3,388,348
3,236,528
Total assets
$
60,915,283
$
57,493,184
$
55,602,695
$
55,017,075
$
54,381,981
NOW and interest-bearing demand deposits
$
5,174,673
$
4,985,306
$
5,680,265
$
5,868,976
$
5,815,155
Wealth management deposits
1,362,747
1,531,865
1,510,203
1,704,099
1,512,765
Money market accounts
16,436,111
15,272,126
14,474,492
14,212,320
14,155,446
Savings accounts
6,096,746
5,878,844
5,792,118
5,676,155
5,472,535
Time deposits
9,598,109
8,546,172
7,148,456
6,645,980
6,495,906
Interest-bearing deposits
$
38,668,386
$
36,214,313
$
34,605,534
$
34,107,530
$
33,451,807
Federal Home Loan Bank advances
3,178,973
3,096,920
2,728,849
2,326,073
2,241,292
Other borrowings
622,792
587,262
627,711
633,673
657,454
Subordinated notes
298,135
410,331
437,893
437,785
437,658
Junior subordinated debentures
253,566
253,566
253,566
253,566
253,566
Total interest-bearing liabilities
$
43,021,852
$
40,562,392
$
38,653,553
$
37,758,627
$
37,041,777
Non-interest-bearing deposits
10,271,613
9,879,134
9,972,646
10,406,585
10,612,009
Other liabilities
1,631,389
1,601,485
1,536,039
1,785,667
1,644,312
Equity
5,990,429
5,450,173
5,440,457
5,066,196
5,083,883
Total liabilities and shareholders’ equity
$
60,915,283
$
57,493,184
$
55,602,695
$
55,017,075
$
54,381,981
Net free funds/contribution(6)
$
14,246,538
$
13,562,314
$
13,616,472
$
13,755,552
$
13,963,348
(1) Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(4) Other earning assets include brokerage customer receivables and trading account securities.
(5) Loans, net of unearned income, include non-accrual loans.
(6) Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.
TABLE 5: QUARTERLY NET INTEREST INCOME
Net Interest Income for three months ended,
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(In thousands)
2024
2024
2024
2023
2023
Interest income:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents
$
32,885
$
19,748
$
16,677
$
22,340
$
28,022
Investment securities
70,260
70,346
70,228
68,812
59,737
FHLB and FRB stock
5,451
4,974
4,478
3,792
3,896
Liquidity management assets(1)
$
108,596
$
95,068
$
91,383
$
94,944
$
91,655
Other earning assets(1)
282
235
198
222
291
Mortgage loans held-for-sale
6,233
5,434
4,146
4,318
4,767
Loans, net of unearned income(1)
796,637
752,117
712,587
697,093
668,183
Total interest income
$
911,748
$
852,854
$
808,314
$
796,577
$
764,896
Interest expense:
NOW and interest-bearing demand deposits
$
30,971
$
32,719
$
34,896
$
38,124
$
36,001
Wealth management deposits
10,158
10,294
10,461
12,076
9,350
Money market accounts
167,382
155,100
137,984
130,252
124,742
Savings accounts
42,892
41,063
39,071
36,463
31,784
Time deposits
110,616
96,527
77,120
68,475
60,906
Interest-bearing deposits
$
362,019
$
335,703
$
299,532
$
285,390
$
262,783
Federal Home Loan Bank advances
26,254
24,797
22,048
18,316
17,436
Other borrowings
9,013
8,700
9,248
9,557
9,384
Subordinated notes
3,712
5,185
5,487
5,522
5,491
Junior subordinated debentures
5,023
4,984
5,004
5,089
4,948
Total interest expense
$
406,021
$
379,369
$
341,319
$
323,874
$
300,042
Less: Fully taxable-equivalent adjustment
(3,144
)
(2,875
)
(2,801
)
(2,729
)
(2,496
)
Net interest income (GAAP)(2)
502,583
470,610
464,194
469,974
462,358
Fully taxable-equivalent adjustment
3,144
2,875
2,801
2,729
2,496
Net interest income, fully taxable-equivalent (non-GAAP)(2)
$
505,727
$
473,485
$
466,995
$
472,703
$
464,854
(1) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(2) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
TABLE 6: QUARTERLY NET INTEREST MARGIN
Net Interest Margin for three months ended,
Sep 30,
2024
Jun 30,
2024
Mar 31,
2024
Dec 31,
2023
Sep 30,
2023
Yield earned on:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents
5.42
%
5.35
%
5.35
%
5.27
%
5.41
%
Investment securities
3.38
3.45
3.38
3.42
3.08
FHLB and FRB stock
8.22
7.89
7.81
7.35
7.68
Liquidity management assets
3.94
%
3.85
%
3.74
%
3.82
%
3.65
%
Other earning assets
6.38
6.23
5.25
5.92
6.47
Mortgage loans held-for-sale
6.59
6.29
5.74
6.13
5.93
Loans, net of unearned income
6.90
6.90
6.80
6.69
6.51
Total earning assets
6.33
%
6.34
%
6.22
%
6.13
%
5.95
%
Rate paid on:
NOW and interest-bearing demand deposits
2.38
%
2.64
%
2.47
%
2.58
%
2.46
%
Wealth management deposits
2.97
2.70
2.79
2.81
2.45
Money market accounts
4.05
4.08
3.83
3.64
3.50
Savings accounts
2.80
2.81
2.71
2.55
2.30
Time deposits
4.58
4.54
4.34
4.09
3.72
Interest-bearing deposits
3.72
%
3.73
%
3.48
%
3.32
%
3.12
%
Federal Home Loan Bank advances
3.29
3.22
3.25
3.12
3.09
Other borrowings
5.76
5.96
5.92
5.98
5.66
Subordinated notes
4.95
5.08
5.04
5.00
4.98
Junior subordinated debentures
7.88
7.91
7.94
7.96
7.74
Total interest-bearing liabilities
3.75
%
3.76
%
3.55
%
3.40
%
3.21
%
Interest rate spread(1)(2)
2.58
%
2.58
%
2.67
%
2.73
%
2.74
%
Less: Fully taxable-equivalent adjustment
(0.02
)
(0.02
)
(0.02
)
(0.02
)
(0.02
)
Net free funds/contribution(3)
0.93
0.94
0.92
0.91
0.88
Net interest margin (GAAP)(2)
3.49
%
3.50
%
3.57
%
3.62
%
3.60
%
Fully taxable-equivalent adjustment
0.02
0.02
0.02
0.02
0.02
Net interest margin, fully taxable-equivalent (non-GAAP)(2)
3.51
%
3.52
%
3.59
%
3.64
%
3.62
%
(1) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(2) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(3) Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.
TABLE 7: YEAR-TO-DATE AVERAGE BALANCES, AND NET INTEREST INCOME AND MARGIN
Average Balance
fornine months ended,
Interest
fornine months ended,
Yield/Rate
fornine months ended,
(Dollars in thousands)
Sep 30,
2024
Sep 30,
2023
Sep 30,
2024
Sep 30,
2023
Sep 30,
2024
Sep 30,
2023
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents(1)
$
1,720,387
$
1,584,120
$
69,310
$
58,443
5.38
%
4.93
%
Investment securities(2)
8,276,711
7,637,612
210,834
172,025
3.40
3.01
FHLB and FRB stock
249,375
219,442
14,903
11,120
7.98
6.77
Liquidity management assets(3)(4)
$
10,246,473
$
9,441,174
$
295,047
$
241,588
3.85
%
3.42
%
Other earning assets(3)(4)(5)
15,966
17,906
715
876
5.98
6.54
Mortgage loans held-for-sale
338,061
299,426
15,813
12,473
6.25
5.57
Loans, net of unearned income(3)(4)(6)
43,963,779
39,974,840
2,261,341
1,851,686
6.87
6.19
Total earning assets(4)
$
54,564,279
$
49,733,346
$
2,572,916
$
2,106,623
6.30
%
5.66
%
Allowance for loan and investment security losses
(368,713
)
(301,742
)
Cash and due from banks
450,899
476,490
Other assets
3,367,882
3,120,105
Total assets
$
58,014,347
$
53,028,199
NOW and interest-bearing demand deposits
$
5,279,697
$
5,544,488
$
98,586
$
83,949
2.49
%
2.02
%
Wealth management deposits
1,467,886
1,739,427
30,913
30,705
2.81
2.36
Money market accounts
15,398,045
13,480,887
460,466
299,649
3.99
2.97
Savings accounts
5,923,205
5,172,174
123,026
73,203
2.77
1.89
Time deposits
8,435,172
5,718,850
284,263
133,574
4.50
3.12
Interest-bearing deposits
$
36,504,005
$
31,655,826
$
997,254
$
621,080
3.65
%
2.62
%
Federal Home Loan Bank advances
3,002,228
2,313,571
73,099
53,970
3.25
3.12
Other borrowings
612,627
628,915
26,961
25,723
5.88
5.47
Subordinated notes
381,813
437,543
14,384
16,502
5.03
5.04
Junior subordinated debentures
253,566
253,566
15,011
14,101
7.91
7.44
Total interest-bearing liabilities
$
40,754,239
$
35,289,421
$
1,126,709
$
731,376
3.69
%
2.77
%
Non-interest-bearing deposits
10,041,972
11,224,841
Other liabilities
1,589,790
1,505,289
Equity
5,628,346
5,008,648
Total liabilities and shareholders’ equity
$
58,014,347
$
53,028,199
Interest rate spread(4)(7)
2.61
%
2.89
%
Less: Fully taxable-equivalent adjustment
(8,820
)
(7,357
)
(0.02
)
(0.02
)
Net free funds/contribution(8)
$
13,810,040
$
14,443,925
0.93
0.81
Net interest income/margin (GAAP)(4)
$
1,437,387
$
1,367,890
3.52
%
3.68
%
Fully taxable-equivalent adjustment
8,820
7,357
0.02
0.02
Net interest income/margin, fully taxable-equivalent (non-GAAP)(4)
$
1,446,207
$
1,375,247
3.54
%
3.70
%
(1) Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(4) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(5) Other earning assets include brokerage customer receivables and trading account securities.
(6) Loans, net of unearned income, include non-accrual loans.
(7) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(8) Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.
TABLE 8: INTEREST RATE SENSITIVITY
As an ongoing part of its financial strategy, the Company attempts to manage the impact of fluctuations in market interest rates on net interest income. Management measures its exposure to changes in interest rates by modeling many different interest rate scenarios.
The following interest rate scenarios display the percentage change in net interest income over a one-year time horizon assuming increases and decreases of 100 and 200 basis points. The Static Shock Scenario results incorporate actual cash flows and repricing characteristics for balance sheet instruments following an instantaneous, parallel change in market rates based upon a static (i.e. no growth or constant) balance sheet. Conversely, the Ramp Scenario results incorporate management’s projections of future volume and pricing of each of the product lines following a gradual, parallel change in market rates over twelve months. Actual results may differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies. The interest rate sensitivity for both the Static Shock and Ramp Scenario is as follows:
Static Shock Scenario
+200 Basis Points
+100 Basis Points
-100 Basis Points
-200 Basis Points
Sep 30, 2024
1.2
%
1.1
%
0.4
%
(0.9
)%
Jun 30, 2024
1.5
1.0
0.6
(0.0
)
Mar 31, 2024
1.9
1.4
1.5
1.6
Dec 31, 2023
2.6
1.8
0.4
(0.7
)
Sep 30, 2023
3.3
1.9
(2.0
)
(5.2
)
Ramp Scenario
+200 Basis Points
+100 Basis Points
-100 Basis Points
-200 Basis Points
Sep 30, 2024
1.6
%
1.2
%
0.7
%
0.5
%
Jun 30, 2024
1.2
1.0
0.9
1.0
Mar 31, 2024
0.8
0.6
1.3
2.0
Dec 31, 2023
1.6
1.2
(0.3
)
(1.5
)
Sep 30, 2023
1.7
1.2
(0.5
)
(2.4
)
As shown above, the magnitude of potential changes in net interest income in various interest rate scenarios has continued to remain relatively neutral. Given the recent unprecedented rise in interest rates, the Company has made a conscious effort to reposition its exposure to changing interest rates given the uncertainty of the future interest rate environment. To this end, management has executed various derivative instruments including collars and receive fixed swaps to hedge variable rate loan exposures and originated a higher percentage of its loan originations in longer term fixed rate loans. The Company will continue to monitor current and projected interest rates and may execute additional derivatives to mitigate potential fluctuations in the net interest margin in future periods.
TABLE 9: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES
Loans repricing or contractual maturity period
As of September 30, 2024
One year or
less
From one to
five years
From five to fifteen years
After fifteen years
Total
(In thousands)
Commercial
Fixed rate
$
442,214
$
3,352,273
$
1,914,643
$
23,532
$
5,732,662
Variable rate
9,513,446
1,585
—
—
9,515,031
Total commercial
$
9,955,660
$
3,353,858
$
1,914,643
$
23,532
$
15,247,693
Commercial real estate
Fixed rate
$
570,054
$
2,866,473
$
420,951
$
55,521
$
3,912,999
Variable rate
8,868,451
11,899
68
—
8,880,418
Total commercial real estate
$
9,438,505
$
2,878,372
$
421,019
$
55,521
$
12,793,417
Home equity
Fixed rate
$
8,588
$
1,593
$
—
$
22
$
10,203
Variable rate
416,840
—
—
—
416,840
Total home equity
$
425,428
$
1,593
$
—
$
22
$
427,043
Residential real estate
Fixed rate
$
7,088
$
5,468
$
75,934
$
1,086,008
$
1,174,498
Variable rate
92,075
512,374
1,609,091
—
2,213,540
Total residential real estate
$
99,163
$
517,842
$
1,685,025
$
1,086,008
$
3,388,038
Premium finance receivables – property & casualty
Fixed rate
$
7,049,022
$
82,659
$
—
$
—
$
7,131,681
Variable rate
—
—
—
—
—
Total premium finance receivables – property & casualty
$
7,049,022
$
82,659
$
—
$
—
$
7,131,681
Premium finance receivables – life insurance
Fixed rate
$
160,090
$
444,534
$
4,000
$
4,654
$
613,278
Variable rate
7,383,621
—
—
—
7,383,621
Total premium finance receivables – life insurance
$
7,543,711
$
444,534
$
4,000
$
4,654
$
7,996,899
Consumer and other
Fixed rate
$
17,226
$
7,218
$
841
$
998
$
26,283
Variable rate
56,393
—
—
—
56,393
Total consumer and other
$
73,619
$
7,218
$
841
$
998
$
82,676
Total per category
Fixed rate
$
8,254,282
$
6,760,218
$
2,416,369
$
1,170,735
$
18,601,604
Variable rate
26,330,826
525,858
1,609,159
—
28,465,843
Total loans, net of unearned income
$
34,585,108
$
7,286,076
$
4,025,528
$
1,170,735
$
47,067,447
Less: Existing cash flow hedging derivatives
(6,000,000
)
Less: Cash flow hedging derivatives effective in Q4 2024
(700,000
)
Total loans repricing or maturing in one year or less, adjusted for cash flow hedging activity
$
27,885,108
Variable Rate Loan Pricing by Index:
SOFR tenors
$
17,155,288
12- month CMT
6,242,461
Prime
3,545,047
Fed Funds
951,119
Ameribor tenors
237,486
Other U.S. Treasury tenors
196,990
Other
137,452
Total variable rate
$
28,465,843
SOFR – Secured Overnight Financing Rate.
CMT – Constant Maturity Treasury Rate.
Ameribor – American Interbank Offered Rate.
Graph available at the following link: http://ml.globenewswire.com/Resource/Download/9d3dafaf-55b5-40b8-9717-0f757fa58f36
Source: Bloomberg
As noted in the table on the previous page, the majority of the Company’s portfolio is tied to SOFR and CMT indices which, as shown in the table above, do not mirror the same changes as the Prime rate which has historically moved when the Federal Reserve raises or lowers interest rates. Specifically, the Company has variable rate loans of $13.7 billion tied to one-month SOFR and $6.2 billion tied to twelve-month CMT. The above chart shows:
Basis Point (bp) Change in
1-month
SOFR
12- month
CMT
Prime
Third Quarter 2024
(49
)
bps
(111
)
bps
(50
)
bps
Second Quarter 2024
1
6
0
First Quarter 2024
(2
)
24
0
Fourth Quarter 2023
3
(67
)
0
Third Quarter 2023
18
6
25
TABLE 10: ALLOWANCE FOR CREDIT LOSSES
Three Months Ended
Nine Months Ended
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Sep 30,
Sep 30,
(Dollars in thousands)
2024
2024
2024
2023
2023
2024
2023
Allowance for credit losses at beginning of period
$
437,560
$
427,504
$
427,612
$
399,531
$
387,786
$
427,612
$
357,936
Cumulative effect adjustment from the adoption of ASU 2022-02
—
—
—
—
—
—
741
Provision for credit losses – Other
6,787
40,061
21,673
42,908
19,923
68,521
71,482
Provision for credit losses – Day 1 on non-PCD assets acquired during the period
15,547
—
—
—
—
15,547
—
Initial allowance for credit losses recognized on PCD assets acquired during the period
3,004
—
—
—
—
3,004
—
Other adjustments
30
(19
)
(31
)
62
(60
)
(20
)
(15
)
Charge-offs:
Commercial
22,975
9,584
11,215
5,114
2,427
43,774
10,599
Commercial real estate
95
15,526
5,469
5,386
1,713
21,090
9,842
Home equity
—
—
74
—
227
74
227
Residential real estate
—
23
38
114
78
61
78
Premium finance receivables – property & casualty
7,790
9,486
6,938
6,706
5,830
24,214
14,978
Premium finance receivables – life insurance
4
—
—
—
18
4
173
Consumer and other
154
137
107
148
184
398
447
Total charge-offs
31,018
34,756
23,841
17,468
10,477
89,615
36,344
Recoveries:
Commercial
649
950
479
592
1,162
2,078
2,059
Commercial real estate
30
90
31
92
243
151
368
Home equity
101
35
29
34
33
165
105
Residential real estate
5
8
2
10
1
15
11
Premium finance receivables – property & casualty
3,436
3,658
1,519
1,820
906
8,613
3,110
Premium finance receivables – life insurance
41
5
8
7
—
54
9
Consumer and other
21
24
23
24
14
68
69
Total recoveries
4,283
4,770
2,091
2,579
2,359
11,144
5,731
Net charge-offs
(26,735
)
(29,986
)
(21,750
)
(14,889
)
(8,118
)
(78,471
)
(30,613
)
Allowance for credit losses at period end
$
436,193
$
437,560
$
427,504
$
427,612
$
399,531
$
436,193
$
399,531
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial
0.61
%
0.25
%
0.33
%
0.14
%
0.04
%
0.41
%
0.09
%
Commercial real estate
0.00
0.53
0.19
0.19
0.05
0.23
0.12
Home equity
(0.10
)
(0.04
)
0.05
(0.04
)
0.23
(0.03
)
0.05
Residential real estate
0.00
0.00
0.01
0.02
0.01
0.00
0.00
Premium finance receivables – property & casualty
0.24
0.33
0.32
0.29
0.29
0.30
0.26
Premium finance receivables – life insurance
0.00
(0.00
)
(0.00
)
(0.00
)
0.00
(0.00
)
0.00
Consumer and other
0.63
0.56
0.42
0.58
0.65
0.54
0.60
Total loans, net of unearned income
0.23
%
0.28
%
0.21
%
0.14
%
0.08
%
0.24
0.10
%
Loans at period end
$
47,067,447
$
44,675,531
$
43,230,706
$
42,131,831
$
41,446,032
Allowance for loan losses as a percentage of loans at period end
0.77
%
0.81
%
0.81
%
0.82
%
0.76
%
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end
0.93
0.98
0.99
1.01
0.96
TABLE 11: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT
Three Months Ended
Nine Months Ended
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Sep 30,
Sep 30,
(In thousands)
2024
2024
2024
2023
2023
2024
2023
Provision for loan losses – Other
$
6,782
$
45,111
$
26,159
$
44,023
$
20,717
$
78,052
$
74,753
Provision for credit losses – Day 1 on non-PCD assets acquired during the period
15,547
—
—
—
—
15,547
—
Provision for unfunded lending-related commitments losses – Other
17
(5,212
)
(4,468
)
(1,081
)
(769
)
(9,663
)
(3,164
)
Provision for held-to-maturity securities losses
(12
)
162
(18
)
(34
)
(25
)
132
(107
)
Provision for credit losses
$
22,334
$
40,061
$
21,673
$
42,908
$
19,923
$
84,068
$
71,482
Allowance for loan losses
$
360,279
$
363,719
$
348,612
$
344,235
$
315,039
Allowance for unfunded lending-related commitments losses
75,435
73,350
78,563
83,030
84,111
Allowance for loan losses and unfunded lending-related commitments losses
435,714
437,069
427,175
427,265
399,150
Allowance for held-to-maturity securities losses
479
491
329
347
381
Allowance for credit losses
$
436,193
$
437,560
$
427,504
$
427,612
$
399,531
TABLE 12: ALLOWANCE BY LOAN PORTFOLIO
The table below summarizes the calculation of allowance for loan losses and allowance for unfunded lending-related commitments losses for the Company’s loan portfolios as well as core and niche portfolios, as of September 30, 2024, June 30, 2024 and March 31, 2024.
As of Sep 30, 2024
As of Jun 30, 2024
As of Mar 31, 2024
(Dollars in thousands)
Recorded
Investment
Calculated
Allowance
% of its
category’s balance
Recorded
Investment
Calculated
Allowance
% of its
category’s balance
Recorded
Investment
Calculated
Allowance
% of its
category’s balance
Commercial:
Commercial, industrial and other
$
15,247,693
$
171,598
1.13
%
$
14,154,462
$
181,991
1.29
%
$
13,503,481
$
166,518
1.23
%
Commercial real estate:
Construction and development
2,403,690
97,949
4.07
2,260,551
93,154
4.12
2,150,314
96,052
4.47
Non-construction
10,389,727
133,195
1.28
9,686,646
130,574
1.35
9,483,123
130,000
1.37
Home equity
427,043
8,823
2.07
356,313
7,242
2.03
340,349
7,191
2.11
Residential real estate
3,388,038
9,745
0.29
3,067,335
8,773
0.29
2,890,266
13,701
0.47
Premium finance receivables
Property and casualty insurance
7,131,681
13,045
0.18
7,100,753
14,053
0.20
6,940,019
12,645
0.18
Life insurance
7,996,899
698
0.01
7,962,115
693
0.01
7,872,033
685
0.01
Consumer and other
82,676
661
0.80
87,356
589
0.67
51,121
383
0.75
Total loans, net of unearned income
$
47,067,447
$
435,714
0.93
%
$
44,675,531
$
437,069
0.98
%
$
43,230,706
$
427,175
0.99
%
Total core loans(1)
$
28,363,712
$
396,394
1.40
%
$
26,259,487
$
398,494
1.52
%
$
25,402,132
$
382,372
1.51
%
Total niche loans(1)
18,703,735
39,320
0.21
18,416,044
38,575
0.21
17,828,574
44,803
0.25
(1) See Table 1 for additional detail on core and niche loans.
TABLE 13: LOAN PORTFOLIO AGING
(In thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Loan Balances:
Commercial
Nonaccrual
$
63,826
$
51,087
$
31,740
$
38,940
$
43,569
90+ days and still accruing
20
304
27
98
200
60-89 days past due
32,560
16,485
30,248
19,488
22,889
30-59 days past due
46,057
36,358
77,715
85,743
35,681
Current
15,105,230
14,050,228
13,363,751
12,687,784
12,623,134
Total commercial
$
15,247,693
$
14,154,462
$
13,503,481
$
12,832,053
$
12,725,473
Commercial real estate
Nonaccrual
$
42,071
$
48,289
$
39,262
$
35,459
$
17,043
90+ days and still accruing
225
—
—
—
1,092
60-89 days past due
13,439
6,555
16,713
8,515
7,395
30-59 days past due
48,346
38,065
32,998
20,634
60,984
Current
12,689,336
11,854,288
11,544,464
11,279,556
10,859,666
Total commercial real estate
$
12,793,417
$
11,947,197
$
11,633,437
$
11,344,164
$
10,946,180
Home equity
Nonaccrual
$
1,122
$
1,100
$
838
$
1,341
$
1,363
90+ days and still accruing
—
—
—
—
—
60-89 days past due
1,035
275
212
62
219
30-59 days past due
2,580
1,229
1,617
2,263
1,668
Current
422,306
353,709
337,682
340,310
340,008
Total home equity
$
427,043
$
356,313
$
340,349
$
343,976
$
343,258
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies(1)
$
135,389
$
134,178
$
143,350
$
150,583
$
168,973
Nonaccrual
17,959
18,198
17,901
15,391
16,103
90+ days and still accruing
—
—
—
—
—
60-89 days past due
6,364
1,977
—
2,325
1,145
30-59 days past due
2,160
130
24,523
22,942
904
Current
3,226,166
2,912,852
2,704,492
2,578,425
2,520,478
Total residential real estate
$
3,388,038
$
3,067,335
$
2,890,266
$
2,769,666
$
2,707,603
Premium finance receivables – property & casualty
Nonaccrual
$
36,079
$
32,722
$
32,648
$
27,590
$
26,756
90+ days and still accruing
18,235
22,427
25,877
20,135
16,253
60-89 days past due
18,740
29,925
15,274
23,236
16,552
30-59 days past due
30,204
45,927
59,729
50,437
31,919
Current
7,028,423
6,969,752
6,806,491
6,782,131
6,631,267
Total Premium finance receivables – property & casualty
$
7,131,681
$
7,100,753
$
6,940,019
$
6,903,529
$
6,722,747
Premium finance receivables – life insurance
Nonaccrual
$
—
$
—
$
—
$
—
$
—
90+ days and still accruing
—
—
—
—
10,679
60-89 days past due
10,902
4,118
32,482
16,206
41,894
30-59 days past due
74,432
17,693
100,137
45,464
14,972
Current
7,911,565
7,940,304
7,739,414
7,816,273
7,864,263
Total Premium finance receivables – life insurance
$
7,996,899
$
7,962,115
$
7,872,033
$
7,877,943
$
7,931,808
Consumer and other
Nonaccrual
$
2
$
3
$
19
$
22
$
16
90+ days and still accruing
148
121
47
54
27
60-89 days past due
22
81
16
25
196
30-59 days past due
264
366
210
165
519
Current
82,240
86,785
50,829
60,234
68,205
Total consumer and other
$
82,676
$
87,356
$
51,121
$
60,500
$
68,963
Total loans, net of unearned income
Early buy-out loans guaranteed by U.S. government agencies(1)
$
135,389
$
134,178
$
143,350
$
150,583
$
168,973
Nonaccrual
161,059
151,399
122,408
118,743
104,850
90+ days and still accruing
18,628
22,852
25,951
20,287
28,251
60-89 days past due
83,062
59,416
94,945
69,857
90,290
30-59 days past due
204,043
139,768
296,929
227,648
146,647
Current
46,465,266
44,167,918
42,547,123
41,544,713
40,907,021
Total loans, net of unearned income
$
47,067,447
$
44,675,531
$
43,230,706
$
42,131,831
$
41,446,032
(1) Early buy-out loans are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.
TABLE 14: NON-PERFORMING ASSETS(1)
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(Dollars in thousands)
2024
2024
2024
2023
2023
Loans past due greater than 90 days and still accruing:
Commercial
$
20
$
304
$
27
$
98
$
200
Commercial real estate
225
—
—
—
1,092
Home equity
—
—
—
—
—
Residential real estate
—
—
—
—
—
Premium finance receivables – property & casualty
18,235
22,427
25,877
20,135
16,253
Premium finance receivables – life insurance
—
—
—
—
10,679
Consumer and other
148
121
47
54
27
Total loans past due greater than 90 days and still accruing
18,628
22,852
25,951
20,287
28,251
Non-accrual loans:
Commercial
63,826
51,087
31,740
38,940
43,569
Commercial real estate
42,071
48,289
39,262
35,459
17,043
Home equity
1,122
1,100
838
1,341
1,363
Residential real estate
17,959
18,198
17,901
15,391
16,103
Premium finance receivables – property & casualty
36,079
32,722
32,648
27,590
26,756
Premium finance receivables – life insurance
—
—
—
—
—
Consumer and other
2
3
19
22
16
Total non-accrual loans
161,059
151,399
122,408
118,743
104,850
Total non-performing loans:
Commercial
63,846
51,391
31,767
39,038
43,769
Commercial real estate
42,296
48,289
39,262
35,459
18,135
Home equity
1,122
1,100
838
1,341
1,363
Residential real estate
17,959
18,198
17,901
15,391
16,103
Premium finance receivables – property & casualty
54,314
55,149
58,525
47,725
43,009
Premium finance receivables – life insurance
—
—
—
—
10,679
Consumer and other
150
124
66
76
43
Total non-performing loans
$
179,687
$
174,251
$
148,359
$
139,030
$
133,101
Other real estate owned
13,682
19,731
14,538
13,309
14,060
Total non-performing assets
$
193,369
$
193,982
$
162,897
$
152,339
$
147,161
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial
0.42
%
0.36
%
0.24
%
0.30
%
0.34
%
Commercial real estate
0.33
0.40
0.34
0.31
0.17
Home equity
0.26
0.31
0.25
0.39
0.40
Residential real estate
0.53
0.59
0.62
0.56
0.59
Premium finance receivables – property & casualty
0.76
0.78
0.84
0.69
0.64
Premium finance receivables – life insurance
—
—
—
—
0.13
Consumer and other
0.18
0.14
0.13
0.13
0.06
Total loans, net of unearned income
0.38
%
0.39
%
0.34
%
0.33
%
0.32
%
Total non-performing assets as a percentage of total assets
0.30
%
0.32
%
0.28
%
0.27
%
0.26
%
Allowance for loan losses and unfunded lending-related commitments losses as a percentage of non-accrual loans
270.53
%
288.69
%
348.98
%
359.82
%
380.69
%
(1) Excludes early buy-out loans guaranteed by U.S. government agencies. Early buy-out loans are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.
Non-performing Loans Rollforward, excluding early buy-out loans guaranteed by U.S. government agencies
Three Months Ended
Nine Months Ended
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Sep 30,
Sep 30,
(In thousands)
2024
2024
2024
2023
2023
2024
2023
Balance at beginning of period
$
174,251
$
148,359
$
139,030
$
133,101
$
108,712
$
139,030
$
100,697
Additions from becoming non-performing in the respective period
42,335
54,376
23,142
59,010
18,666
96,711
64,367
Additions from assets acquired in the respective period
189
—
—
—
—
189
—
Return to performing status
(362
)
(912
)
(490
)
(24,469
)
(1,702
)
(1,274
)
(2,542
)
Payments received
(10,894
)
(9,611
)
(8,336
)
(10,000
)
(6,488
)
(20,505
)
(24,063
)
Transfer to OREO and other repossessed assets
(3,680
)
(6,945
)
(1,381
)
(2,623
)
(2,671
)
(10,625
)
(5,629
)
Charge-offs, net
(21,211
)
(7,673
)
(14,810
)
(9,480
)
(3,011
)
(28,884
)
(6,866
)
Net change for premium finance receivables
(941
)
(3,343
)
11,204
(6,509
)
19,595
(4,284
)
7,137
Balance at end of period
$
179,687
$
174,251
$
148,359
$
139,030
$
133,101
$
170,358
$
133,101
Other Real Estate Owned
Three Months Ended
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(In thousands)
2024
2024
2024
2023
2023
Balance at beginning of period
$
19,731
$
14,538
$
13,309
$
14,060
$
11,586
Disposals/resolved
(9,729
)
(1,752
)
—
(3,416
)
(467
)
Transfers in at fair value, less costs to sell
3,680
6,945
1,436
2,665
2,941
Fair value adjustments
—
—
(207
)
—
—
Balance at end of period
$
13,682
$
19,731
$
14,538
$
13,309
$
14,060
Period End
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Balance by Property Type:
2024
2024
2024
2023
2023
Residential real estate
$
—
$
161
$
1,146
$
720
$
441
Commercial real estate
13,682
19,570
13,392
12,589
13,619
Total
$
13,682
$
19,731
$
14,538
$
13,309
$
14,060
TABLE 15: NON-INTEREST INCOME
Three Months Ended
Q3 2024 compared to
Q2 2024
Q3 2024 compared to
Q3 2023
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(Dollars in thousands)
2024
2024
2024
2023
2023
$ Change
% Change
$ Change
% Change
Brokerage
$
6,139
$
5,588
$
5,556
$
5,349
$
4,359
$
551
10
%
$
1,780
41
%
Trust and asset management
31,085
29,825
29,259
27,926
29,170
1,260
4
1,915
7
Total wealth management
37,224
35,413
34,815
33,275
33,529
1,811
5
3,695
11
Mortgage banking
15,974
29,124
27,663
7,433
27,395
(13,150
)
(45
)
(11,421
)
(42
)
Service charges on deposit accounts
16,430
15,546
14,811
14,522
14,217
884
6
2,213
16
Gains (losses) on investment securities, net
3,189
(4,282
)
1,326
2,484
(2,357
)
7,471
NM
5,546
NM
Fees from covered call options
988
2,056
4,847
4,679
4,215
(1,068
)
(52
)
(3,227
)
(77
)
Trading (losses) gains, net
(130
)
70
677
(505
)
728
(200
)
NM
(858
)
NM
Operating lease income, net
15,335
13,938
14,110
14,162
13,863
1,397
10
1,472
11
Other:
Interest rate swap fees
2,914
3,392
2,828
4,021
2,913
(478
)
(14
)
1
—
BOLI
1,517
1,351
1,651
1,747
729
166
12
788
NM
Administrative services
1,450
1,322
1,217
1,329
1,336
128
10
114
9
Foreign currency remeasurement gains (losses)
696
(145
)
(1,171
)
1,150
(446
)
841
NM
1,142
NM
Changes in fair value on EBOs and loans held-for-investment
518
604
(439
)
1,556
(338
)
(86
)
(14
)
856
NM
Early pay-offs of capital leases
532
393
430
157
461
139
35
71
15
Miscellaneous
16,510
22,365
37,815
14,819
16,233
(5,855
)
(26
)
277
2
Total Other
24,137
29,282
42,331
24,779
20,888
(5,145
)
(18
)
3,249
16
Total Non-Interest Income
$
113,147
$
121,147
$
140,580
$
100,829
$
112,478
$
(8,000
)
(7) %
$
669
1
%
Nine Months Ended
Sep 30,
Sep 30,
$
%
(Dollars in thousands)
2024
2023
Change
Change
Brokerage
$
17,283
$
13,296
$
3,987
30
%
Trust and asset management
90,169
84,036
6,133
7
Total wealth management
107,452
97,332
10,120
10
Mortgage banking
72,761
75,640
(2,879
)
(4
)
Service charges on deposit accounts
46,787
40,728
6,059
15
Gains (losses) on investment securities, net
233
(959
)
1,192
NM
Fees from covered call options
7,891
17,184
(9,293
)
(54
)
Trading gains, net
617
1,647
(1,030
)
(63
)
Operating lease income, net
43,383
39,136
4,247
11
Other:
Interest rate swap fees
9,134
8,230
904
11
BOLI
4,519
3,402
1,117
33
Administrative services
3,989
4,270
(281
)
(7
)
Foreign currency remeasurement losses
(620
)
(91
)
(529
)
NM
Changes in fair value on EBOs and loans held-for-investment
683
(35
)
718
NM
Early pay-offs of capital leases
1,355
1,027
328
32
Miscellaneous
76,690
45,766
30,924
68
Total Other
95,750
62,569
33,181
53
Total Non-Interest Income
$
374,874
$
333,277
$
41,597
12
%
NM – Not meaningful.
BOLI – Bank-owned life insurance.
TABLE 16: MORTGAGE BANKING
Three Months Ended
Nine Months Ended
(Dollars in thousands)
Sep 30,
2024
Jun 30,
2024
Mar 31,
2024
Dec 31,
2023
Sep 30,
2023
Sep 30,
2024
Sep 30,
2023
Originations:
Retail originations
$
527,408
$
544,394
$
331,504
$
315,637
$
408,761
$
1,403,306
$
1,071,786
Veterans First originations
239,369
177,792
144,109
123,564
163,856
561,270
451,218
Total originations for sale (A)
$
766,777
$
722,186
$
475,613
$
439,201
$
572,617
$
1,964,576
$
1,523,004
Originations for investment
218,984
275,331
169,246
124,974
137,622
663,561
453,597
Total originations
$
985,761
$
997,517
$
644,859
$
564,175
$
710,239
$
2,628,137
$
1,976,601
As a percentage of originations for sale:
Retail originations
69
%
75
%
70
%
72
%
71
%
71
%
70
%
Veterans First originations
31
25
30
28
29
29
30
Purchases
72
%
83
%
75
%
85
%
84
%
78
%
83
%
Refinances
28
17
25
15
16
22
17
Production Margin:
Production revenue (B)(1)
$
13,113
$
14,990
$
13,435
$
6,798
$
13,766
$
41,538
$
34,233
Total originations for sale (A)
$
766,777
$
722,186
$
475,613
$
439,201
$
572,617
$
1,964,576
$
1,523,004
Add: Current period end mandatory interest rate lock commitments to fund originations for sale(2)
272,072
222,738
207,775
119,624
150,713
272,072
150,713
Less: Prior period end mandatory interest rate lock commitments to fund originations for sale(2)
222,738
207,775
119,624
150,713
196,246
119,624
113,303
Total mortgage production volume (C)
$
816,111
$
737,149
$
563,764
$
408,112
$
527,084
$
2,117,024
$
1,560,414
Production margin (B / C)
1.61
%
2.03
%
2.38
%
1.67
%
2.61
%
1.96
%
2.19
%
Mortgage Servicing:
Loans serviced for others (D)
$
12,253,361
$
12,211,027
$
12,051,392
$
12,007,165
$
11,885,531
MSRs, at fair value (E)
186,308
204,610
201,044
192,456
210,524
Percentage of MSRs to loans serviced for others (E / D)
1.52
%
1.68
%
1.67
%
1.60
%
1.77
%
Servicing income
$
10,809
$
10,586
$
10,498
$
10,286
$
10,191
$
31,893
$
33,277
Components of MSR:
MSR – changes in fair value model assumptions
$
(17,331
)
$
877
$
7,595
$
(19,634
)
$
4,723
$
(8,859
)
$
485
Changes in fair value of derivative contract held as an economic hedge, net
6,892
(772
)
(2,577
)
3,541
(2,481
)
3,543
(2,261
)
MSR – current period capitalization
6,357
8,223
5,379
5,077
9,706
19,959
23,533
MSR – collection of expected cash flows – paydowns
(1,598
)
(1,504
)
(1,444
)
(1,572
)
(1,492
)
(4,546
)
(4,712
)
MSR – collection of expected cash flows – payoffs and repurchases
(5,730
)
(4,030
)
(2,942
)
(1,939
)
(3,105
)
(12,702
)
(8,837
)
MSR Activity
$
(11,410
)
$
2,794
$
6,011
$
(14,527
)
$
7,351
$
(2,605
)
$
8,208
Summary of Mortgage Banking Revenue:
Production revenue(1)
$
13,113
$
14,990
$
13,435
$
6,798
$
13,766
$
41,538
$
34,233
Servicing income
10,809
10,586
10,498
10,286
10,191
31,893
33,277
MSR activity
(11,410
)
2,794
6,011
(14,527
)
7,351
(2,605
)
8,208
Changes in fair value of early buy-out loans guaranteed by U.S. government agencies (HFS)
3,529
642
(2,190
)
4,856
(4,245
)
1,981
(440
)
Other revenue
(67
)
112
(91
)
20
332
(46
)
362
Total mortgage banking revenue
$
15,974
$
29,124
$
27,663
$
7,433
$
27,395
$
72,761
$
75,640
Changes in fair value on early buy-out loans guaranteed by U.S. government agencies (HFI)
$
518
$
604
$
(439
)
$
1,556
$
(338
)
$
683
$
(35
)
(1) Production revenue represents revenue earned from the origination and subsequent sale of mortgages, including gains on loans sold and fees from originations, changes in other related financial instruments carried at fair value, processing and other related activities, and excludes servicing fees, changes in the fair value of servicing rights and changes to the mortgage recourse obligation and other non-production revenue.
(2) Certain volume adjusted for the estimated pull-through rate of the loan, which represents the Company’s best estimate of the likelihood that a committed loan will ultimately fund.
TABLE 17: NON-INTEREST EXPENSE
Three Months Ended
Q3 2024 compared to
Q2 2024
Q3 2024 compared to
Q3 2023
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(Dollars in thousands)
2024
2024
2024
2023
2023
$ Change
% Change
$ Change
% Change
Salaries and employee benefits:
Salaries
$
118,971
$
113,860
$
112,172
$
111,484
$
111,303
$
5,111
4
%
$
7,668
7
%
Commissions and incentive compensation
57,575
52,151
51,001
48,974
48,817
5,424
10
8,758
18
Benefits
34,715
32,530
32,000
33,513
32,218
2,185
7
2,497
8
Total salaries and employee benefits
211,261
198,541
195,173
193,971
192,338
12,720
6
18,923
10
Software and equipment
31,574
29,231
27,731
27,779
25,951
2,343
8
5,623
22
Operating lease equipment
10,518
10,834
10,683
10,694
12,020
(316
)
(3
)
(1,502
)
(12
)
Occupancy, net
19,945
19,585
19,086
18,102
21,304
360
2
(1,359
)
(6
)
Data processing
9,984
9,503
9,292
8,892
10,773
481
5
(789
)
(7
)
Advertising and marketing
18,239
17,436
13,040
17,166
18,169
803
5
70
0
Professional fees
9,783
9,967
9,553
8,768
8,887
(184
)
(2
)
896
10
Amortization of other acquisition-related intangible assets
4,042
1,122
1,158
1,356
1,408
2,920
NM
2,634
NM
FDIC insurance
10,512
10,429
9,381
9,303
9,748
83
1
764
8
FDIC insurance – special assessment
—
—
5,156
34,374
—
—
NM
—
NM
OREO expense, net
(938
)
(259
)
392
(1,559
)
120
(679
)
NM
(1,058
)
NM
Other:
Lending expenses, net of deferred origination costs
4,995
5,335
5,078
5,330
4,777
(340
)
(6
)
218
5
Travel and entertainment
5,364
5,340
4,597
5,754
5,449
24
—
(85
)
(2
)
Miscellaneous
25,408
23,289
22,825
22,722
19,111
2,119
9
6,297
33
Total other
35,767
33,964
32,500
33,806
29,337
1,803
5
6,430
22
Total Non-Interest Expense
$
360,687
$
340,353
$
333,145
$
362,652
$
330,055
$
20,334
6
%
$
30,632
9
%
Nine Months Ended
Sep 30,
Sep 30,
$
%
(Dollars in thousands)
2024
2023
Change
Change
Salaries and employee benefits:
Salaries
$
345,003
$
327,328
$
17,675
5
%
Commissions and incentive compensation
160,727
133,127
27,600
21
Benefits
99,245
93,587
5,658
6
Total salaries and employee benefits
604,975
554,042
50,933
9
Software and equipment
88,536
76,853
11,683
15
Operating lease equipment
32,035
31,669
366
1
Occupancy, net
58,616
58,966
(350
)
(1
)
Data processing
28,779
29,908
(1,129
)
(4
)
Advertising and marketing
48,715
47,909
806
2
Professional fees
29,303
25,990
3,313
13
Amortization of other acquisition-related intangible assets
6,322
4,142
2,180
53
FDIC insurance
30,322
27,425
2,897
11
FDIC insurance – special assessment
5,156
—
5,156
NM
OREO expense, net
(805
)
31
(836
)
NM
Other:
Lending expenses, net of deferred origination costs
15,408
15,766
(358
)
(2
)
Travel and entertainment
15,301
15,440
(139
)
(1
)
Miscellaneous
71,522
61,706
9,816
16
Total other
102,231
92,912
9,319
10
Total Non-Interest Expense
$
1,034,185
$
949,847
$
84,338
9
%
NM – Not meaningful.
TABLE 18: SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES/RATIOS
The accounting and reporting policies of Wintrust conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company’s performance. These include taxable-equivalent net interest income (including its individual components), taxable-equivalent net interest margin (including its individual components), the taxable-equivalent efficiency ratio, tangible common equity ratio, tangible book value per common share, return on average tangible common equity, and pre-tax income, excluding provision for credit losses. Management believes that these measures and ratios provide users of the Company’s financial information a more meaningful view of the performance of the Company’s interest-earning assets and interest-bearing liabilities and of the Company’s operating efficiency. Other financial holding companies may define or calculate these measures and ratios differently.
Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax rates effective as of the end of the period. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a fully taxable-equivalent basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses), measures how much it costs to produce one dollar of revenue. Securities gains or losses are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity ratio and tangible book value per common share as useful measurements of the Company’s equity. The Company references the return on average tangible common equity as a measurement of profitability. Management considers pre-tax income, excluding provision for credit losses, as a useful measurement of the Company’s core net income.
Three Months Ended
Nine Months Ended
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Sep 30,
Sep 30,
(Dollars and shares in thousands)
2024
2024
2024
2023
2023
2024
2023
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:
(A) Interest Income (GAAP)
$
908,604
$
849,979
$
805,513
$
793,848
$
762,400
$
2,564,096
$
2,099,266
Taxable-equivalent adjustment:
– Loans
2,474
2,305
2,246
2,150
1,923
7,025
5,677
– Liquidity Management Assets
668
567
550
575
572
1,785
1,674
– Other Earning Assets
2
3
5
4
1
10
6
(B) Interest Income (non-GAAP)
$
911,748
$
852,854
$
808,314
$
796,577
$
764,896
$
2,572,916
$
2,106,623
(C) Interest Expense (GAAP)
406,021
379,369
341,319
323,874
300,042
1,126,709
731,376
(D) Net Interest Income (GAAP) (A minus C)
$
502,583
$
470,610
$
464,194
$
469,974
$
462,358
$
1,437,387
$
1,367,890
(E) Net Interest Income (non-GAAP) (B minus C)
$
505,727
$
473,485
$
466,995
$
472,703
$
464,854
$
1,446,207
$
1,375,247
Net interest margin (GAAP)
3.49
%
3.50
%
3.57
%
3.62
%
3.60
%
3.52
%
3.68
%
Net interest margin, fully taxable-equivalent (non-GAAP)
3.51
3.52
3.59
3.64
3.62
3.54
3.70
(F) Non-interest income
$
113,147
$
121,147
$
140,580
$
100,829
$
112,478
$
374,874
$
333,277
(G) (Losses) gains on investment securities, net
3,189
(4,282
)
1,326
2,484
(2,357
)
233
(959
)
(H) Non-interest expense
360,687
340,353
333,145
362,652
330,055
1,034,185
949,847
Efficiency ratio (H/(D+F-G))
58.88
%
57.10
%
55.21
%
63.81
%
57.18
%
57.07
%
55.80
%
Efficiency ratio (non-GAAP) (H/(E+F-G))
58.58
56.83
54.95
63.51
56.94
56.80
55.56
Three Months Ended
Nine Months Ended
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
Sep 30,
Sep 30,
(Dollars and shares in thousands)
2024
2024
2024
2023
2023
2024
2023
Reconciliation of Non-GAAP Tangible Common Equity Ratio:
Total shareholders’ equity (GAAP)
$
6,399,714
$
5,536,628
$
5,436,400
$
5,399,526
$
5,015,613
Less: Non-convertible preferred stock (GAAP)
(412,500
)
(412,500
)
(412,500
)
(412,500
)
(412,500
)
Less: Intangible assets (GAAP)
(924,646
)
(676,562
)
(677,911
)
(679,561
)
(680,353
)
(I) Total tangible common shareholders’ equity (non-GAAP)
$
5,062,568
$
4,447,566
$
4,345,989
$
4,307,465
$
3,922,760
(J) Total assets (GAAP)
$
63,788,424
$
59,781,516
$
57,576,933
$
56,259,934
$
55,555,246
Less: Intangible assets (GAAP)
(924,646
)
(676,562
)
(677,911
)
(679,561
)
(680,353
)
(K) Total tangible assets (non-GAAP)
$
62,863,778
$
59,104,954
$
56,899,022
$
55,580,373
$
54,874,893
Common equity to assets ratio (GAAP) (L/J)
9.4
%
8.6
%
8.7
%
8.9
%
8.3
%
Tangible common equity ratio (non-GAAP) (I/K)
8.1
7.5
7.6
7.7
7.1
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity
$
6,399,714
$
5,536,628
$
5,436,400
$
5,399,526
$
5,015,613
Less: Preferred stock
(412,500
)
(412,500
)
(412,500
)
(412,500
)
(412,500
)
(L) Total common equity
$
5,987,214
$
5,124,128
$
5,023,900
$
4,987,026
$
4,603,113
(M) Actual common shares outstanding
66,482
61,760
61,737
61,244
61,222
Book value per common share (L/M)
$
90.06
$
82.97
$
81.38
$
81.43
$
75.19
Tangible book value per common share (non-GAAP) (I/M)
76.15
72.01
70.40
70.33
64.07
Reconciliation of Non-GAAP Return on Average Tangible Common Equity:
(N) Net income applicable to common shares
$
163,010
$
145,397
$
180,303
$
116,489
$
157,207
$
488,710
$
478,173
Add: Intangible asset amortization
4,042
1,122
1,158
1,356
1,408
6,322
4,142
Less: Tax effect of intangible asset amortization
(1,087
)
(311
)
(291
)
(343
)
(380
)
(1,682
)
(1,102
)
After-tax intangible asset amortization
$
2,955
$
811
$
867
$
1,013
$
1,028
$
4,640
$
3,040
(O) Tangible net income applicable to common shares (non-GAAP)
$
165,965
$
146,208
$
181,170
$
117,502
$
158,235
$
493,350
$
481,213
Total average shareholders’ equity
$
5,990,429
$
5,450,173
$
5,440,457
$
5,066,196
$
5,083,883
$
5,628,346
$
5,008,648
Less: Average preferred stock
(412,500
)
(412,500
)
(412,500
)
(412,500
)
(412,500
)
(412,500
)
(412,500
)
(P) Total average common shareholders’ equity
$
5,577,929
$
5,037,673
$
5,027,957
$
4,653,696
$
4,671,383
$
5,215,846
$
4,596,148
Less: Average intangible assets
(833,574
)
(677,207
)
(678,731
)
(679,812
)
(681,520
)
(730,216
)
(679,799
)
(Q) Total average tangible common shareholders’ equity (non-GAAP)
$
4,744,355
$
4,360,466
$
4,349,226
$
3,973,884
$
3,989,863
$
4,485,630
$
3,916,349
Return on average common equity, annualized (N/P)
11.63
%
11.61
%
14.42
%
9.93
%
13.35
%
12.52
%
13.91
%
Return on average tangible common equity, annualized (non-GAAP) (O/Q)
13.92
13.49
16.75
11.73
15.73
14.69
16.43
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:
Income before taxes
$
232,709
$
211,343
$
249,956
$
165,243
$
224,858
$
694,008
$
679,838
Add: Provision for credit losses
22,334
40,061
21,673
42,908
19,923
84,068
71,482
Pre-tax income, excluding provision for credit losses (non-GAAP)
$
255,043
$
251,404
$
271,629
$
208,151
$
244,781
$
778,076
$
751,320
WINTRUST SUBSIDIARIES AND LOCATIONS
Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select Market (Nasdaq: WTFC). Its 16 community bank subsidiaries are: Lake Forest Bank & Trust Company, N.A., Hinsdale Bank & Trust Company, N.A., Wintrust Bank, N.A., in Chicago, Libertyville Bank & Trust Company, N.A., Barrington Bank & Trust Company, N.A., Crystal Lake Bank & Trust Company, N.A., Northbrook Bank & Trust Company, N.A., Schaumburg Bank & Trust Company, N.A., Village Bank & Trust, N.A., in Arlington Heights, Beverly Bank & Trust Company, N.A. in Chicago, Wheaton Bank & Trust Company, N.A., State Bank of The Lakes, N.A., in Antioch, Old Plank Trail Community Bank, N.A., in New Lenox, St. Charles Bank & Trust Company, N.A., Town Bank, N.A., in Hartland, Wisconsin and Macatawa Bank in Holland, Michigan.
In addition to the locations noted above, the banks also operate facilities in Illinois in Addison, Algonquin, Aurora, Bloomingdale, Bolingbrook, Buffalo Grove, Burbank, Cary, Clarendon Hills, Countryside, Crete, Darien, Deerfield, Des Plaines, Downers Grove, Elgin, Elk Grove Village, Elmhurst, Evanston, Evergreen Park, Frankfort, Geneva, Glen Ellyn, Glencoe, Glenview, Grayslake, Gurnee, Hanover Park, Hawthorn Woods, Highland Park, Highwood, Hoffman Estates, Homer Glen, Itasca, Joliet, Lake Bluff, Lake Villa, Lansing, Lemont, Lindenhurst, Lombard, Lynwood, Markham, Maywood, McHenry, Mokena, Mount Prospect, Mundelein, Naperville, Norridge, Northfield, Oak Lawn, Oak Park, Orland Park, Palatine, Park Ridge, Prospect Heights, Riverside, Rockford, Rolling Meadows, Round Lake Beach, Shorewood, Skokie, Spring Grove, Steger, Stone Park, Vernon Hills, Wauconda, Waukegan, Western Springs, Willowbrook, Wilmette, Winnetka and Wood Dale, and in Wisconsin in Burlington, Clinton, Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva, Madison, Menomonee Falls, Milwaukee, Pewaukee, Racine, Wales, Walworth, Whitefish Bay and Wind Lake, and in Michigan in Allendale, Byron Center, Douglas, Grand Haven, Grand Rapids, Grandville, Hamilton, Hudsonville, Jenison, Rockford, Walker, Wyoming, and Zeeland, and in Florida in Bonita Springs and Naples, and in Indiana in Crown Point and Dyer.
Additionally, the Company operates various non-bank business units:
FIRST Insurance Funding and Wintrust Life Finance, each a division of Lake Forest Bank & Trust Company, N.A., serve commercial and life insurance loan customers, respectively, throughout the United States.
First Insurance Funding of Canada serves commercial insurance loan customers throughout Canada.
Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States.
Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices.
Wintrust Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest.
Great Lakes Advisors LLC provides money management services and advisory services to individual accounts.
Wintrust Private Trust Company, N.A., a trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location.
Wintrust Asset Finance offers direct leasing opportunities.
CDEC provides Qualified Intermediary services (as defined by U.S. Treasury regulations) for taxpayers seeking to structure tax-deferred like-kind exchanges under Internal Revenue Code Section 1031.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “will,” “may,” “should,” “would” and “could.” Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, and which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of the Company’s 2023 Annual Report on Form 10-K and in any of the Company’s subsequent SEC filings. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things, statements relating to the Company’s future financial performance, the performance of its loan portfolio, the expected amount of future credit reserves and charge-offs, delinquency trends, growth plans, regulatory developments, securities that the Company may offer from time to time, plans to form additional de novo banks or branch offices, and management’s long-term performance goals, as well as statements relating to the anticipated effects on the Company’s financial condition and results of operations from expected developments or events, the Company’s business and growth strategies, including future acquisitions of banks, specialty finance or wealth management businesses, internal growth and plans to form additional de novo banks or branch offices. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:
economic conditions and events that affect the economy, housing prices, the job market and other factors that may adversely affect the Company’s liquidity and the performance of its loan portfolios, including an actual or threatened U.S. government debt default or rating downgrade, particularly in the markets in which it operates;
negative effects suffered by us or our customers resulting from changes in U.S. trade policies;
the extent of defaults and losses on the Company’s loan portfolio, which may require further increases in its allowance for credit losses;
estimates of fair value of certain of the Company’s assets and liabilities, which could change in value significantly from period to period;
the financial success and economic viability of the borrowers of our commercial loans;
commercial real estate market conditions in the Chicago metropolitan area and southern Wisconsin;
the extent of commercial and consumer delinquencies and declines in real estate values, which may require further increases in the Company’s allowance for credit losses;
inaccurate assumptions in our analytical and forecasting models used to manage our loan portfolio;
changes in the level and volatility of interest rates, the capital markets and other market indices that may affect, among other things, the Company’s liquidity and the value of its assets and liabilities;
the interest rate environment, including a prolonged period of low interest rates or rising interest rates, either broadly or for some types of instruments, which may affect the Company’s net interest income and net interest margin, and which could materially adversely affect the Company’s profitability;
competitive pressures in the financial services business which may affect the pricing of the Company’s loan and deposit products as well as its services (including wealth management services), which may result in loss of market share and reduced income from deposits, loans, advisory fees and income from other products;
failure to identify and complete favorable acquisitions in the future or unexpected losses, difficulties or developments related to the Company’s recent or future acquisitions;
unexpected difficulties and losses related to FDIC-assisted acquisitions;
harm to the Company’s reputation;
any negative perception of the Company’s financial strength;
ability of the Company to raise additional capital on acceptable terms when needed;
disruption in capital markets, which may lower fair values for the Company’s investment portfolio;
ability of the Company to use technology to provide products and services that will satisfy customer demands and create efficiencies in operations and to manage risks associated therewith;
failure or breaches of our security systems or infrastructure, or those of third parties;
security breaches, including denial of service attacks, hacking, social engineering attacks, malware intrusion and similar events or data corruption attempts and identity theft;
adverse effects on our information technology systems, or those of third parties, resulting from failures, human error or cyberattacks (including ransomware);
adverse effects of failures by our vendors to provide agreed upon services in the manner and at the cost agreed, particularly our information technology vendors;
increased costs as a result of protecting our customers from the impact of stolen debit card information;
accuracy and completeness of information the Company receives about customers and counterparties to make credit decisions;
ability of the Company to attract and retain senior management experienced in the banking and financial services industries;
environmental liability risk associated with lending activities;
the impact of any claims or legal actions to which the Company is subject, including any effect on our reputation;
losses incurred in connection with repurchases and indemnification payments related to mortgages and increases in reserves associated therewith;
the loss of customers as a result of technological changes allowing consumers to complete their financial transactions without the use of a bank;
the soundness of other financial institutions and the impact of recent failures of financial institutions, including broader financial institution liquidity risk and concerns;
the expenses and delayed returns inherent in opening new branches and de novo banks;
liabilities, potential customer loss or reputational harm related to closings of existing branches;
examinations and challenges by tax authorities, and any unanticipated impact of the Tax Act;
changes in accounting standards, rules and interpretations, and the impact on the Company’s financial statements;
the ability of the Company to receive dividends from its subsidiaries;
the impact of the Company’s transition from LIBOR to an alternative benchmark rate for current and future transactions;
a decrease in the Company’s capital ratios, including as a result of declines in the value of its loan portfolios, or otherwise;
legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies;
changes in laws, regulations, rules, standards and contractual obligations regarding data privacy and cybersecurity;
a lowering of our credit rating;
changes in U.S. monetary policy and changes to the Federal Reserve’s balance sheet, including changes in response to persistent inflation or otherwise;
regulatory restrictions upon our ability to market our products to consumers and limitations on our ability to profitably operate our mortgage business;
increased costs of compliance, heightened regulatory capital requirements and other risks associated with changes in regulation and the regulatory environment;
the impact of heightened capital requirements;
increases in the Company’s FDIC insurance premiums, or the collection of special assessments by the FDIC;
delinquencies or fraud with respect to the Company’s premium finance business;
credit downgrades among commercial and life insurance providers that could negatively affect the value of collateral securing the Company’s premium finance loans;
the Company’s ability to comply with covenants under its credit facility;
fluctuations in the stock market, which may have an adverse impact on the Company’s wealth management business and brokerage operation; and
widespread outages of operational, communication, or other systems, whether internal or provided by third parties, natural or other disasters (including acts of terrorism, armed hostilities and pandemics), and the effects of climate change.
Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by the Company. Any such statement speaks only as of the date the statement was made or as of such date that may be referenced within the statement. The Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events after the date of the press release. Persons are advised, however, to consult further disclosures management makes on related subjects in its reports filed with the Securities and Exchange Commission and in its press releases.
CONFERENCE CALL, WEBCAST AND REPLAY
The Company will hold a conference call on Tuesday, October 22, 2024 at 10:00 a.m. (CDT) regarding third quarter and year-to-date 2024 earnings results. Individuals interested in participating in the call by addressing questions to management should register for the call to receive the dial-in numbers and unique PIN at the Conference Call Link included within the Company’s press release dated September 30, 2024 available at the Investor Relations, Investor News and Events, Press Releases link on its website at https://www.wintrust.com. A separate simultaneous audio-only webcast link is included within the press release referenced above. Registration for and a replay of the audio-only webcast with an accompanying slide presentation will be available at https://www.wintrust.com, Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the third quarter and year-to-date 2024 earnings press release will also be available on the home page of the Company’s website at https://www.wintrust.com and at the Investor Relations, Investor News and Events, Press Releases link on its website.
FOR MORE INFORMATION CONTACT:
Timothy S. Crane, President & Chief Executive Officer
David A. Dykstra, Vice Chairman & Chief Operating Officer
(847) 939-9000
Web site address: www.wintrust.com
