Wintrust Financial Corporation Reports Record First Quarter 2024 Net Income

ROSEMONT, Ill., April 17, 2024 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, “we” or “our”) (Nasdaq: WTFC) announced record quarterly net income of $187.3 million or $2.89 per diluted common share for the first quarter of 2024, an increase in diluted earnings per common share of 55% compared to the fourth quarter of 2023. Pre-tax, pre-provision income (non-GAAP) totaled a record $271.6 million, up 30% as compared to $208.2 million in the fourth quarter of 2023.

Timothy S. Crane, President and Chief Executive Officer, commented, “Following record net income in 2023, we continued our momentum with strong results to start 2024. We leveraged our balanced, multi-faceted business model and position as Chicago’s and Wisconsin’s bank to grow deposits and loans while maintaining our consistent credit standards coupled with expense management.”

Additionally, Mr. Crane noted, “The first quarter exhibited funding strong loan growth with competitively-priced deposits in accordance with the increased loan demand. Increasing our long-term franchise value and net interest income remains our focus as we consider opportunities in the markets we serve.”

Highlights of the first quarter of 2024:

Comparative information to the fourth quarter of 2023, unless otherwise noted

• Total loans increased by approximately $1.1 billion, or 10% annualized.
• Total deposits increased by approximately $1.1 billion, or 9% annualized.
• Total assets increased by $1.3 billion, or 9% annualized.
• Net interest margin decreased by five basis points to 3.57% (3.59% on a fully taxable-equivalent basis, non-GAAP) during the first quarter of 2024.
  • Net interest income decreased to $464.2 million in the first quarter of 2024 compared to $470.0 million in the fourth quarter of 2023, primarily due to one less day in the first quarter of 2024.
• Non-interest income was impacted by the following:
  • Gains of approximately $20.0 million from the sale of the Company’s Retirement Benefits Advisors (“RBA”) division. This gain was partially offset by additional commissions and incentive compensation totaling $701,000 related to the sale transaction.
  • Favorable net valuation adjustments related to certain mortgage assets totaled $2.3 million in the first quarter of 2024 compared to unfavorable net valuation adjustments of $9.7 million in the fourth quarter of 2023.
• Non-interest expense was negatively impacted by an accrual of $5.2 million for estimated amounts owed as a result of the FDIC special assessment on uninsured deposits in response to certain bank failures occurring in 2023. This is in addition to the related $34.4 million accrued in the fourth quarter of 2023 for the estimate of such FDIC special assessments.
• Provision for credit losses totaled $21.7 million in the first quarter of 2024 as compared to a provision for credit losses of $42.9 million in the fourth quarter of 2023.
• Net charge-offs totaled $21.8 million, or 21 basis points of average total loans on an annualized basis, in the first quarter of 2024 as compared to $14.9 million, or 14 basis points of average total loans on an annualized basis in the fourth quarter of 2023.

Mr. Crane noted, “Our net interest margin for the first quarter stayed within our expected range, decreasing by five basis points compared to the fourth quarter of 2023. The decrease in net interest margin was due primarily to certain seasonal declines in non-interest bearing deposit balances, deposit migration to interest-bearing products and competitive deposit pricing to fund quality loan growth. Loan growth during the first quarter totaled $1.1 billion, or 10% on an annualized basis. We are pleased with our diversified loan growth in the first quarter with strong loan origination activity in commercial and residential real estate portfolios, as well as growth in commercial real estate driven primarily by draws on existing loan facilities. Deposit growth in the first quarter of 2024 was utilized to fund our robust loan growth as deposits increased by approximately $1.1 billion, or 9% on an annualized basis. We continue to leverage our customer relationships and market positioning to generate deposits and build long term franchise value. Non-interest bearing deposits decreased due to seasonality during the first quarter while also experiencing some migration to interest-bearing products. Despite the slightly lower net interest income during the current period, we generated record quarterly net revenue through our diversified sources of revenue, including our mortgage banking and wealth management businesses.”

Commenting on credit quality, Mr. Crane stated, “Credit metrics have remained steady, aligning with historical averages. Net charge-offs totaled $21.8 million, or 21 basis points of average total loans on an annualized basis, in the first quarter of 2024 as compared to $14.9 million, or 14 basis points of average total loans on an annualized basis, in the fourth quarter of 2023. Approximately $11.9 million of charge-offs in the current quarter were previously reserved for in the fourth quarter of 2023 Non-performing loans totaled $148.4 million, or 0.34% of total loans, at the end of the first quarter of 2024 compared to $139.0 million, or 0.33% of total loans, at the end of the fourth quarter of 2023. We continue to conservatively and proactively review credit and maintain our consistently strong credit standards. The allowance for credit losses on our core loan portfolio as of March 31, 2024 was approximately 1.51% of the outstanding balance (see Table 11 for additional information). We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit.”

Mr. Crane added, “Late loan growth in the first quarter creates positive revenue momentum moving forward as period-end loan balances exceeded averages. We continue to see good opportunities in the markets we serve and feel well positioned to grow deposit and loan relationships in future quarters. Our focus remains on winning business and maximizing long term franchise value.”

In summary, Mr. Crane noted, “The quarter was strong, momentum remains good and we are excited about the agreement reached to acquire Macatawa Bank Corporation in Michigan (announced April 15, 2024). The ability to expand with a high quality bank with a strong low-cost core deposit base, excess liquidity, exceptional asset quality and a committed management team is a terrific fit for Wintrust.”

The graphs below illustrate certain financial highlights of the first quarter of 2024 as well as historical financial performance. See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 16 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: 

SUMMARY OF RESULTS:

BALANCE SHEET

Total assets increased $1.3 billion in the first quarter of 2024 as compared to the fourth quarter of 2023. Total loans increased by $1.1 billion as compared to the fourth quarter of 2023. The increase in loans was the result of diversified loan growth primarily across the commercial and residential real estate portfolios coupled with draws on existing commercial real-estate loan facilities.

Total liabilities increased by $1.3 billion in the first quarter of 2024 as compared to the fourth quarter of 2023 primarily due to a $1.1 billion increase in total deposits. Non-interest bearing deposits as a percentage of total deposits was 21% at March 31, 2024 compared to 23% at December 31, 2023. The Company's loans to deposits ratio ended the quarter at 93.1%.

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 first quarter of 2024, net interest income totaled $464.2 million, a decrease of $5.8 million as compared to the fourth quarter of 2023. The $5.8 million decrease in net interest income in the first quarter of 2024 compared to the fourth quarter of 2023 was primarily due to one less day during the period as well as a five basis point decrease in the net interest margin, partially offset by a $755.8 million increase in average earning assets.

Net interest margin was 3.57% (3.59% on a fully taxable-equivalent basis, non-GAAP) during the first quarter of 2024 compared to 3.62% (3.64% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2023. The net interest margin decrease as compared to the fourth quarter of 2023 was primarily due to a 15 basis point increase in the rate paid on interest-bearing liabilities. This decrease was partially offset by a nine basis point increase in yield on earning assets and a one basis point increase in the net free funds contribution. The 15 basis point increase on the rate paid on interest-bearing liabilities in the first quarter of 2024 as compared to the fourth quarter of 2023 was primarily due to a 16 basis point increase in the rate paid on interest-bearing deposits. The nine basis point increase in the yield on earning assets in the first quarter of 2024 as compared to the fourth quarter of 2023 was primarily due to an 11 basis point expansion on loan yields.

For more information regarding net interest income, see Table 4 through Table 7 in this report.

ASSET QUALITY

The allowance for credit losses totaled $427.5 million as of March 31, 2024, relatively unchanged compared to $427.6 million as of December 31, 2023. A provision for credit losses totaling $21.7 million was recorded for the first quarter of 2024 as compared to $42.9 million recorded in the fourth quarter of 2023. For more information regarding the allowance for credit losses and provision for credit losses, see Table 10 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 March 31, 2024, December 31, 2023, and September 30, 2023 is shown on Table 11 of this report.

Net charge-offs totaled $21.8 million in the first quarter of 2024, as compared to $14.9 million of net charge-offs in the fourth quarter of 2023. The increase in net charge-offs during the first quarter of 2024 was primarily the result of increased net charge-offs within the commercial portfolio. Net charge-offs as a percentage of average total loans were 21 basis points in the first quarter of 2024 on an annualized basis compared to 14 basis points on an annualized basis in the fourth quarter of 2023. For more information regarding net charge-offs, see Table 9 in this report.

The Company’s delinquency rates remain low and manageable. For more information regarding past due loans, see Table 12 in this report.

Non-performing assets totaled $162.9 million and comprised 0.28% of total assets as of March 31, 2024, as compared to $152.3 million as of December 31, 2023. Non-performing loans totaled $148.4 million, or 0.34% of total loans, at March 31, 2024. The increase in the first quarter of 2024 was primarily due to an increase in certain credits within the commercial real estate portfolio becoming nonaccrual as well as increases within the property and casualty insurance premium finance receivables portfolio, partially offset by a decrease within the commercial portfolio. For more information regarding non-performing assets, see Table 13 in this report.

Though these credit metrics increased during the period, net charge-offs as a percentage of average total loans and non-performing loans as a percentage of total loans remained at historically low levels in the first quarter of 2024.

NON-INTEREST INCOME

Wealth management revenue increased by $1.5 million in the first quarter of 2024 as compared to the fourth quarter of 2023 primarily due to 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 The Chicago 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 increased by $20.2 million in the first quarter of 2024 as compared to the fourth quarter of 2023 primarily due to a $5.0 million favorable valuation adjustment to the fair value of mortgage servicing rights, net of servicing hedge, in the first quarter of 2024 compared to a $16.1 million unfavorable adjustment in the fourth quarter of 2023, as well as $6.6 million higher in production revenue. This was partially offset by an unfavorable 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 $2.2 million in the first quarter of 2024 compared to a $4.9 million favorable adjustment in the fourth quarter of 2023. The Company monitors the relationship of these assets and seeks to minimize the earnings impact of fair value changes.

The Company recognized $1.3 million in net gains on investment securities in the first quarter of 2024 as compared to $2.5 million in net gains in the fourth quarter of 2023. The change from period to period was primarily the result of lower unrealized gains on the Company’s equity investment securities with a readily determinable fair value, partially offset by higher realized gains from the liquidation of an equity investment security without a readily determinable fair value in the first quarter of 2024.

Fluctuations in trading gains and losses in the first quarter of 2024 compared to the fourth quarter of 2023 were primarily the result of fair value adjustments related to interest rate derivatives not designated as hedges.

Other income increased by $17.6 million in the first quarter of 2024 compared to the fourth quarter of 2023 primarily due to a $20.0 million gain recognized related to the sale of the Company’s RBA division within its wealth management business. This was partially offset by an unfavorable adjustment to the Company’s held-for-investment portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $2.1 million when compared to the fourth quarter of 2023, as well as lower interest rate swap fees and unfavorable foreign currency remeasurement adjustments.

For more information regarding non-interest income, see Table 14 in this report.

NON-INTEREST EXPENSE

Salaries and employee benefits expense increased by $1.2 million in the first quarter of 2024 as compared to the fourth quarter of 2023. The $1.2 million increase is primarily related to higher commissions from increased mortgage production as well as commissions related to the sale of the Company’s RBA division within its wealth management business in the first quarter of 2024. This was partially offset by lower employee benefits as employee insurance decreased in the first quarter of 2024.

Advertising and marketing expenses in the first quarter of 2024 totaled $13.0 million, which is a $4.1 million decrease as compared to the fourth quarter of 2023 primarily due to a decrease in digital advertising and sponsorships.

FDIC insurance, including amounts accrued for estimated special assessments, decreased $29.1 million in the first quarter of 2024 as compared to the fourth quarter of 2023. This was primarily the result of a lower accrual recognized in the first quarter of 2024 for estimated amounts owed as a result of the FDIC special assessment on uninsured deposits in response to certain bank failures occurring in 2023. The Company recognized $5.2 million in the first quarter of 2024 for such special assessment compared to $34.4 million in the fourth quarter of 2023.

The Company recorded OREO expense of $392,000 in the first quarter of 2024, compared to net OREO income of $1.6 million in the fourth quarter of 2023 related to realized gains on sales of OREO.

For more information regarding non-interest expense, see Table 15 in this report.

INCOME TAXES

The Company recorded income tax expense of $62.7 million in the first quarter of 2024 compared to $41.8 million in the fourth quarter of 2023. The effective tax rates were 25.07% in the first quarter of 2024 compared to 25.27% in the fourth quarter of 2023. The effective tax rates were partially impacted by the tax effects related to share-based compensation which fluctuate based on the Company’s stock price and timing of employee stock option exercises and vesting of other share-based awards. The Company recorded net excess tax benefits of $4.4 million in the first quarter of 2024, compared to net excess tax benefits of $53,000 in the fourth quarter of 2023 related to share-based compensation. The effective tax rates were also partially impacted due to an overall lower level of pre-tax net income in the comparable periods, primarily due to the accrual for the estimated amount owed as a result of the FDIC special assessment on uninsured deposits. The Company recorded an estimated FDIC special assessment accrual of $5.2 million in the first quarter of 2024, compared to a $34.4 million accrual in the fourth quarter of 2023.

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 first quarter of 2024, the community banking unit expanded its commercial, commercial real estate and residential real estate loan portfolios.

Mortgage banking revenue was $27.7 million for the first quarter of 2024, an increase of $20.2 million as compared to the fourth quarter of 2023, primarily due to a $5.0 million favorable valuation adjustment to the fair value of mortgage servicing rights, net of servicing hedge, in the first quarter of 2024 compared to a $16.1 million unfavorable adjustment in the fourth quarter of 2023, as well as $6.6 million higher in production revenue. This was partially offset by an unfavorable 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 $2.2 million in the first quarter of 2024 compared to a $4.9 million favorable adjustment in the fourth quarter of 2023. Service charges on deposit accounts totaled $14.8 million in the first quarter of 2024, which was relatively stable compared to the fourth quarter of 2023. The Company’s gross commercial and commercial real estate loan pipelines remained solid as of March 31, 2024 indicating momentum for expected continued loan growth in the second 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 $4.6 billion during the first quarter of 2024 and average balances increased by $12.5 million as compared to the fourth quarter of 2023. The Company’s leasing portfolio balance increased in the first quarter of 2024, with its portfolio of assets, including capital leases, loans and equipment on operating leases, totaling $3.6 billion as of March 31, 2024 as compared to $3.4 billion as of December 31, 2023. Revenues from the Company’s out-sourced administrative services business were $1.2 million in the first quarter of 2024, which was relatively stable compared to the fourth quarter of 2023.

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 RBA division during the first quarter of 2024. Wealth management revenue totaled $34.8 million in the first quarter of 2024, increasing $1.5 million in the first quarter of 2024 as compared to the fourth quarter of 2023 primarily due to increased asset management fees from higher assets under management during the period. At March 31, 2024, the Company’s wealth management subsidiaries had approximately $48.7 billion of assets under administration, which included $8.8 billion of assets owned by the Company and its subsidiary banks, representing an increase from the $47.1 billion of assets under administration at December 31, 2023.

ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS

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 first quarter of 2024, as compared to the fourth quarter of 2023 (sequential quarter) and first quarter of 2023 (linked quarter), are shown in the table below:

													% or (1) basis point (bp) change from 4th Quarter 2023				% or basis point (bp) change from 1st Quarter 2023
		Three Months Ended
(Dollars in thousands, except per share data)		Mar 31, 2024				Dec 31, 2023				Mar 31, 2023
Net income		$	187,294			$	123,480			$	180,198		52		%		4		%
Pre-tax income, excluding provision for credit losses (non-GAAP) (2)			271,629				208,151				266,595		30				2
Net income per common share – Diluted			2.89				1.87				2.80		55				3
Cash dividends declared per common share			0.45				0.40				0.40		13				13
Net revenue (3)			604,774				570,803				565,764		6				7
Net interest income			464,194				469,974				457,995		(1	)			1
Net interest margin			3.57	%			3.62	%			3.81	%	(5	)	bps		(24	)	bps
Net interest margin – fully taxable-equivalent (non-GAAP) (2)			3.59				3.64				3.83		(5	)			(24	)
Net overhead ratio (4)			1.39				1.89				1.49		(50	)			(10	)
Return on average assets			1.35				0.89				1.40		46				(5	)
Return on average common equity			14.42				9.93				15.67		449				(125	)
Return on average tangible common equity (non-GAAP) (2)			16.75				11.73				18.55		502				(180	)
At end of period
Total assets		$	57,576,933			$	56,259,934			$	52,873,511		9		%		9		%
Total loans (5)			43,230,706				42,131,831				39,565,471		10				9
Total deposits			46,448,858				45,397,170				42,718,211		9				9
Total shareholders’ equity			5,436,400				5,399,526				5,015,506		3				8

(1) Period-end balance sheet percentage changes are annualized.

(2) See Table 16: 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 by choosing “Financial Reports” under the “Investor Relations” heading, and then choosing “Financial Highlights.”

WINTRUST FINANCIAL CORPORATION

Selected Financial Highlights

		Three Months Ended
(Dollars in thousands, except per share data)		Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Mar 31, 2023
Selected Financial Condition Data (at end of period):
Total assets		$	57,576,933			$	56,259,934			$	55,555,246			$	54,286,176			$	52,873,511
Total loans (1)			43,230,706				42,131,831				41,446,032				41,023,408				39,565,471
Total deposits			46,448,858				45,397,170				44,992,686				44,038,707				42,718,211
Total shareholders’ equity			5,436,400				5,399,526				5,015,613				5,041,912				5,015,506
Selected Statements of Income Data:
Net interest income		$	464,194			$	469,974			$	462,358			$	447,537			$	457,995
Net revenue (2)			604,774				570,803				574,836				560,567				565,764
Net income			187,294				123,480				164,198				154,750				180,198
Pre-tax income, excluding provision for credit losses (non-GAAP) (3)			271,629				208,151				244,781				239,944				266,595
Net income per common share – Basic			2.93				1.90				2.57				2.41				2.84
Net income per common share – Diluted			2.89				1.87				2.53				2.38				2.80
Cash dividends declared per common share			0.45				0.40				0.40				0.40				0.40
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin			3.57	%			3.62	%			3.60	%			3.64	%			3.81	%
Net interest margin – fully taxable-equivalent (non-GAAP) (3)			3.59				3.64				3.62				3.66				3.83
Non-interest income to average assets			1.02				0.73				0.82				0.86				0.84
Non-interest expense to average assets			2.41				2.62				2.41				2.44				2.33
Net overhead ratio (4)			1.39				1.89				1.59				1.58				1.49
Return on average assets			1.35				0.89				1.20				1.18				1.40
Return on average common equity			14.42				9.93				13.35				12.79				15.67
Return on average tangible common equity (non-GAAP) (3)			16.75				11.73				15.73				15.12				18.55
Average total assets		$	55,602,695			$	55,017,075			$	54,381,981			$	52,601,953			$	52,075,318
Average total shareholders’ equity			5,440,457				5,066,196				5,083,883				5,044,718				4,895,271
Average loans to average deposits ratio			94.5	%			92.9	%			92.4	%			94.3	%			93.0	%
Period-end loans to deposits ratio			93.1				92.8				92.1				93.2				92.6
Common Share Data at end of period:
Market price per common share		$	104.39			$	92.75			$	75.50			$	72.62			$	72.95
Book value per common share			81.38				81.43				75.19				75.65				75.24
Tangible book value per common share (non-GAAP) (3)			70.40				70.33				64.07				64.50				64.22
Common shares outstanding			61,736,715				61,243,626				61,222,058				61,197,676				61,176,415
Other Data at end of period:
Common equity to assets ratio			8.7	%			8.9	%			8.3	%			8.5	%			8.7	%
Tangible common equity ratio (non-GAAP) (3)			7.6				7.7				7.1				7.4				7.5
Tier 1 leverage ratio (5)			9.5				9.3				9.2				9.3				9.1
Risk-based capital ratios:
Tier 1 capital ratio (5)			10.3				10.3				10.2				10.1				10.1
Common equity tier 1 capital ratio (5)			9.5				9.4				9.3				9.3				9.2
Total capital ratio (5)			12.2				12.1				12.0				12.0				12.1
Allowance for credit losses (6)		$	427,504			$	427,612			$	399,531			$	387,786			$	376,261
Allowance for loan and unfunded lending-related commitment losses to total loans			0.99	%			1.01	%			0.96	%			0.94	%			0.95	%
Number of:
Bank subsidiaries			15				15				15				15				15
Banking offices			176				174				174				175				174

(1) Excludes mortgage loans held-for-sale.

(2) Net revenue is net interest income plus non-interest income.

(3) See Table 16: 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)
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(In thousands)			2024				2023				2023				2023				2023
Assets
Cash and due from banks		$	379,825			$	423,404			$	418,088			$	513,858			$	445,928
Federal funds sold and securities purchased under resale agreements			61				60				60				59				58
Interest-bearing deposits with banks			2,131,077				2,084,323				2,448,570				2,163,708				1,563,578
Available-for-sale securities, at fair value			4,387,598				3,502,915				3,611,835				3,492,481				3,259,845
Held-to-maturity securities, at amortized cost			3,810,015				3,856,916				3,909,150				3,564,473				3,606,391
Trading account securities			2,184				4,707				1,663				3,027				102
Equity securities with readily determinable fair value			119,777				139,268				134,310				116,275				111,943
Federal Home Loan Bank and Federal Reserve Bank stock			224,657				205,003				204,040				195,117				244,957
Brokerage customer receivables			13,382				10,592				14,042				15,722				16,042
Mortgage loans held-for-sale, at fair value			339,884				292,722				304,808				338,728				302,493
Loans, net of unearned income			43,230,706				42,131,831				41,446,032				41,023,408				39,565,471
Allowance for loan losses			(348,612	)			(344,235	)			(315,039	)			(302,499	)			(287,972	)
Net loans			42,882,094				41,787,596				41,130,993				40,720,909				39,277,499
Premises, software and equipment, net			744,769				748,966				747,501				749,393				760,283
Lease investments, net			283,557				281,280				275,152				274,351				256,301
Accrued interest receivable and other assets			1,580,142				1,551,899				1,674,681				1,455,748				1,413,795
Trade date securities receivable			—				690,722				—				—				939,758
Goodwill			656,181				656,672				656,109				656,674				653,587
Other acquisition-related intangible assets			21,730				22,889				24,244				25,653				20,951
Total assets		$	57,576,933			$	56,259,934			$	55,555,246			$	54,286,176			$	52,873,511
Liabilities and Shareholders’ Equity
Deposits:
Non-interest-bearing		$	9,908,183			$	10,420,401			$	10,347,006			$	10,604,915			$	11,236,083
Interest-bearing			36,540,675				34,976,769				34,645,680				33,433,792				31,482,128
Total deposits			46,448,858				45,397,170				44,992,686				44,038,707				42,718,211
Federal Home Loan Bank advances			2,676,751				2,326,071				2,326,071				2,026,071				2,316,071
Other borrowings			575,408				645,813				643,999				665,219				583,548
Subordinated notes			437,965				437,866				437,731				437,628				437,493
Junior subordinated debentures			253,566				253,566				253,566				253,566				253,566
Accrued interest payable and other liabilities			1,747,985				1,799,922				1,885,580				1,823,073				1,549,116
Total liabilities			52,140,533				50,860,408				50,539,633				49,244,264				47,858,005
Shareholders’ Equity:
Preferred stock			412,500				412,500				412,500				412,500				412,500
Common stock			61,798				61,269				61,244				61,219				61,198
Surplus			1,954,532				1,943,806				1,933,226				1,923,623				1,913,947
Treasury stock			(5,757	)			(2,217	)			(1,966	)			(1,966	)			(1,966	)
Retained earnings			3,498,475				3,345,399				3,253,332				3,120,626				2,997,263
Accumulated other comprehensive loss			(485,148	)			(361,231	)			(642,723	)			(474,090	)			(367,436	)
Total shareholders’ equity			5,436,400				5,399,526				5,015,613				5,041,912				5,015,506
Total liabilities and shareholders’ equity		$	57,576,933			$	56,259,934			$	55,555,246			$	54,286,176			$	52,873,511

 

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended
(Dollars in thousands, except per share data)	Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Mar 31, 2023
Interest income
Interest and fees on loans	$	710,341			$	694,943			$	666,260			$	621,057			$	558,692
Mortgage loans held-for-sale		4,146				4,318				4,767				4,178				3,528
Interest-bearing deposits with banks		16,658				21,762				26,866				16,882				13,468
Federal funds sold and securities purchased under resale agreements		19				578				1,157				1				70
Investment securities		69,678				68,237				59,164				51,243				59,943
Trading account securities		18				15				6				6				14
Federal Home Loan Bank and Federal Reserve Bank stock		4,478				3,792				3,896				3,544				3,680
Brokerage customer receivables		175				203				284				265				295
Total interest income		805,513				793,848				762,400				697,176				639,690
Interest expense
Interest on deposits		299,532				285,390				262,783				213,495				144,802
Interest on Federal Home Loan Bank advances		22,048				18,316				17,436				17,399				19,135
Interest on other borrowings		9,248				9,557				9,384				8,485				7,854
Interest on subordinated notes		5,487				5,522				5,491				5,523				5,488
Interest on junior subordinated debentures		5,004				5,089				4,948				4,737				4,416
Total interest expense		341,319				323,874				300,042				249,639				181,695
Net interest income		464,194				469,974				462,358				447,537				457,995
Provision for credit losses		21,673				42,908				19,923				28,514				23,045
Net interest income after provision for credit losses		442,521				427,066				442,435				419,023				434,950
Non-interest income
Wealth management		34,815				33,275				33,529				33,858				29,945
Mortgage banking		27,663				7,433				27,395				29,981				18,264
Service charges on deposit accounts		14,811				14,522				14,217				13,608				12,903
Gains (losses) on investment securities, net		1,326				2,484				(2,357	)			0				1,398
Fees from covered call options		4,847				4,679				4,215				2,578				10,391
Trading gains (losses), net		677				(505	)			728				106				813
Operating lease income, net		14,110				14,162				13,863				12,227				13,046
Other		42,331				24,779				20,888				20,672				21,009
Total non-interest income		140,580				100,829				112,478				113,030				107,769
Non-interest expense
Salaries and employee benefits		195,173				193,971				192,338				184,923				176,781
Software and equipment		27,731				27,779				25,951				26,205				24,697
Operating lease equipment		10,683				10,694				12,020				9,816				9,833
Occupancy, net		19,086				18,102				21,304				19,176				18,486
Data processing		9,292				8,892				10,773				9,726				9,409
Advertising and marketing		13,040				17,166				18,169				17,794				11,946
Professional fees		9,553				8,768				8,887				8,940				8,163
Amortization of other acquisition-related intangible assets		1,158				1,356				1,408				1,499				1,235
FDIC insurance		14,537				43,677				9,748				9,008				8,669
OREO expenses, net		392				(1,559	)			120				118				(207	)
Other		32,500				33,806				29,337				33,418				30,157
Total non-interest expense		333,145				362,652				330,055				320,623				299,169
Income before taxes		249,956				165,243				224,858				211,430				243,550
Income tax expense		62,662				41,763				60,660				56,680				63,352
Net income	$	187,294			$	123,480			$	164,198			$	154,750			$	180,198
Preferred stock dividends		6,991				6,991				6,991				6,991				6,991
Net income applicable to common shares	$	180,303			$	116,489			$	157,207			$	147,759			$	173,207
Net income per common share - Basic	$	2.93			$	1.90			$	2.57			$	2.41			$	2.84
Net income per common share - Diluted	$	2.89			$	1.87			$	2.53			$	2.38			$	2.80
Cash dividends declared per common share	$	0.45			$	0.40			$	0.40			$	0.40			$	0.40
Weighted average common shares outstanding		61,481				61,236				61,213				61,192				60,950
Dilutive potential common shares		928				1,166				964				902				873
Average common shares and dilutive common shares		62,409				62,402				62,177				62,094				61,823

 

TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES

															% Growth From
(Dollars in thousands)	Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023		Dec 31, 2023 (1)			Mar 31, 2023
Balance:
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. government agencies	$	193,064		$	155,529		$	190,511		$	235,570		$	155,687	97	%		24	%
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. government agencies		146,820			137,193			114,297			103,158			146,806	28			0
Total mortgage loans held-for-sale	$	339,884		$	292,722		$	304,808		$	338,728		$	302,493	65	%		12	%
Core loans:
Commercial
Commercial and industrial	$	6,105,968		$	5,804,629		$	5,894,732		$	5,737,633		$	5,855,035	21	%		4	%
Asset-based lending		1,355,255			1,433,250			1,396,591			1,465,848			1,482,071	(22	)		(9	)
Municipal		721,526			677,143			676,915			653,117			655,301	26			10
Leases		2,344,295			2,208,368			2,109,628			1,925,767			1,904,137	25			23
PPP loans		11,036			11,533			13,744			15,337			17,195	(17	)		(36	)
Commercial real estate
Residential construction		57,558			58,642			51,550			51,689			69,998	(7	)		(18	)
Commercial construction		1,748,607			1,729,937			1,547,322			1,409,751			1,234,762	4			42
Land		344,149			295,462			294,901			298,996			292,293	66			18
Office		1,566,748			1,455,417			1,422,748			1,404,422			1,392,040	31			13
Industrial		2,190,200			2,135,876			2,057,957			2,002,740			1,858,088	10			18
Retail		1,366,415			1,337,517			1,341,451			1,304,083			1,309,680	9			4
Multi-family		2,922,432			2,815,911			2,710,829			2,696,478			2,635,411	15			11
Mixed use and other		1,437,328			1,515,402			1,519,422			1,440,652			1,446,806	(21	)		(1	)
Home equity		340,349			343,976			343,258			336,974			337,016	(4	)		1
Residential real estate
Residential real estate loans for investment		2,746,916			2,619,083			2,538,630			2,455,392			2,309,393	20			19
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. government agencies		90,911			92,780			97,911			117,024			119,301	(8	)		(24	)
Residential mortgage loans, early buy-out exercised loans guaranteed by U.S. government agencies		52,439			57,803			71,062			70,824			76,851	(37	)		(32	)
Total core loans	$	25,402,132		$	24,592,729		$	24,088,651		$	23,386,727		$	22,995,378	13	%		10	%
Niche loans:
Commercial
Franchise	$	1,122,302		$	1,092,532		$	1,074,162		$	1,091,164		$	1,131,913	11	%		(1	)%
Mortgage warehouse lines of credit		403,245			230,211			245,450			381,043			235,684	302			71
Community Advantage - homeowners association		475,832			452,734			424,054			405,042			389,922	21			22
Insurance agency lending		964,022			921,653			890,197			925,520			905,727	18			6
Premium Finance receivables
U.S. property & casualty insurance		6,113,993			5,983,103			5,815,346			5,900,228			5,043,486	9			21
Canada property & casualty insurance		826,026			920,426			907,401			862,470			695,394	(41	)		19
Life insurance		7,872,033			7,877,943			7,931,808			8,039,273			8,125,802	0			(3	)
Consumer and other		51,121			60,500			68,963			31,941			42,165	(62	)		21
Total niche loans	$	17,828,574		$	17,539,102		$	17,357,381		$	17,636,681		$	16,570,093	7	%		8	%
Total loans, net of unearned income	$	43,230,706		$	42,131,831		$	41,446,032		$	41,023,408		$	39,565,471	10	%		9	%

(1) Annualized.

TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

																				% Growth From
(Dollars in thousands)	Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Mar 31, 2023			Dec 31, 2023 (1)			Mar 31, 2023
Balance:
Non-interest-bearing	$	9,908,183			$	10,420,401			$	10,347,006			$	10,604,915			$	11,236,083		(20	)%		(12	)%
NOW and interest-bearing demand deposits		5,720,947				5,797,649				6,006,114				5,814,836				5,576,558		(5	)		3
Wealth management deposits (2)		1,347,817				1,614,499				1,788,099				1,417,984				1,809,933		(66	)		(26	)
Money market		15,617,717				15,149,215				14,478,504				14,523,124				13,552,277		12			15
Savings		5,959,774				5,790,334				5,584,294				5,321,578				5,192,108		12			15
Time certificates of deposit		7,894,420				6,625,072				6,788,669				6,356,270				5,351,252		77			48
Total deposits	$	46,448,858			$	45,397,170			$	44,992,686			$	44,038,707			$	42,718,211		9	%		9	%
Mix:
Non-interest-bearing		21	%			23	%			23	%			24	%			26	%
NOW and interest-bearing demand deposits		12				13				13				13				13
Wealth management deposits (2)		3				4				4				3				4
Money market		34				33				32				33				32
Savings		13				13				13				12				12
Time certificates of deposit		17				14				15				15				13
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 March 31, 2024

(Dollars in thousands)		Total Time Certificates of Deposit				Weighted-Average Rate of Maturing Time Certificates of Deposit
1-3 months		$	2,250,084			4.53	%
4-6 months			2,431,414			4.76
7-9 months			1,658,270			4.32
10-12 months			991,137			4.06
13-18 months			438,441			3.71
19-24 months			55,853			2.50
24+ months			69,221			1.78
Total		$	7,894,420			4.42	%

 

TABLE 4: QUARTERLY AVERAGE BALANCES

		Average Balance for three months ended,
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(In thousands)			2024				2023				2023				2023				2023
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents (1)		$	1,254,332			$	1,682,176			$	2,053,568			$	1,454,057			$	1,235,748
Investment securities (2)			8,349,796				7,971,068				7,706,285				7,252,582				7,956,722
FHLB and FRB stock			230,648				204,593				201,252				223,813				233,615
Liquidity management assets (3)			9,834,776				9,857,837				9,961,105				8,930,452				9,426,085
Other earning assets (3)(4)			15,081				14,821				17,879				17,401				18,445
Mortgage loans held-for-sale			290,275				279,569				319,099				307,683				270,966
Loans, net of unearned income (3)(5)			42,129,893				41,361,952				40,707,042				40,106,393				39,093,368
Total earning assets (3)			52,270,025				51,514,179				51,005,125				49,361,929				48,808,864
Allowance for loan and investment security losses			(361,734	)			(329,441	)			(319,491	)			(302,627	)			(282,704	)
Cash and due from banks			450,267				443,989				459,819				481,510				488,457
Other assets			3,244,137				3,388,348				3,236,528				3,061,141				3,060,701
Total assets		$	55,602,695			$	55,017,075			$	54,381,981			$	52,601,953			$	52,075,318
NOW and interest-bearing demand deposits		$	5,680,265			$	5,868,976			$	5,815,155			$	5,540,597			$	5,271,740
Wealth management deposits			1,510,203				1,704,099				1,512,765				1,545,626				2,167,081
Money market accounts			14,474,492				14,212,320				14,155,446				13,735,924				12,533,468
Savings accounts			5,792,118				5,676,155				5,472,535				5,206,609				4,830,322
Time deposits			7,148,456				6,645,980				6,495,906				5,603,024				5,041,638
Interest-bearing deposits			34,605,534				34,107,530				33,451,807				31,631,780				29,844,249
Federal Home Loan Bank advances			2,728,849				2,326,073				2,241,292				2,227,106				2,474,882
Other borrowings			627,711				633,673				657,454				625,757				602,937
Subordinated notes			437,893				437,785				437,658				437,545				437,422
Junior subordinated debentures			253,566				253,566				253,566				253,566				253,566
Total interest-bearing liabilities			38,653,553				37,758,627				37,041,777				35,175,754				33,613,056
Non-interest-bearing deposits			9,972,646				10,406,585				10,612,009				10,908,022				12,171,631
Other liabilities			1,536,039				1,785,667				1,644,312				1,473,459				1,395,360
Equity			5,440,457				5,066,196				5,083,883				5,044,718				4,895,271
Total liabilities and shareholders’ equity		$	55,602,695			$	55,017,075			$	54,381,981			$	52,601,953			$	52,075,318
Net free funds/contribution (6)		$	13,616,472			$	13,755,552			$	13,963,348			$	14,186,175			$	15,195,808

(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 16: 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,
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(In thousands)			2024				2023				2023				2023				2023
Interest income:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents		$	16,677			$	22,340			$	28,022			$	16,882			$	13,538
Investment securities			70,228				68,812				59,737				51,795				60,494
FHLB and FRB stock			4,478				3,792				3,896				3,544				3,680
Liquidity management assets (1)			91,383				94,944				91,655				72,221				77,712
Other earning assets (1)			198				222				291				272				313
Mortgage loans held-for-sale			4,146				4,318				4,767				4,178				3,528
Loans, net of unearned income (1)			712,587				697,093				668,183				622,939				560,564
Total interest income		$	808,314			$	796,577			$	764,896			$	699,610			$	642,117
Interest expense:
NOW and interest-bearing demand deposits		$	34,896			$	38,124			$	36,001			$	29,178			$	18,772
Wealth management deposits			10,461				12,076				9,350				9,097				12,258
Money market accounts			137,984				130,252				124,742				106,630				68,276
Savings accounts			39,071				36,463				31,784				25,603				15,816
Time deposits			77,120				68,475				60,906				42,987				29,680
Interest-bearing deposits			299,532				285,390				262,783				213,495				144,802
Federal Home Loan Bank advances			22,048				18,316				17,436				17,399				19,135
Other borrowings			9,248				9,557				9,384				8,485				7,854
Subordinated notes			5,487				5,522				5,491				5,523				5,488
Junior subordinated debentures			5,004				5,089				4,948				4,737				4,416
Total interest expense		$	341,319			$	323,874			$	300,042			$	249,639			$	181,695
Less: Fully taxable-equivalent adjustment			(2,801	)			(2,729	)			(2,496	)			(2,434	)			(2,427	)
Net interest income (GAAP) (2)			464,194				469,974				462,358				447,537				457,995
Fully taxable-equivalent adjustment			2,801				2,729				2,496				2,434				2,427
Net interest income, fully taxable-equivalent (non-GAAP) (2)		$	466,995			$	472,703			$	464,854			$	449,971			$	460,422

(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 16: 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,
		Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023
Yield earned on:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents		5.35	%		5.27	%		5.41	%		4.66	%		4.44	%
Investment securities		3.38			3.42			3.08			2.86			3.08
FHLB and FRB stock		7.81			7.35			7.68			6.35			6.39
Liquidity management assets		3.74			3.82			3.65			3.24			3.34
Other earning assets		5.25			5.92			6.47			6.27			6.87
Mortgage loans held-for-sale		5.74			6.13			5.93			5.45			5.28
Loans, net of unearned income		6.80			6.69			6.51			6.23			5.82
Total earning assets		6.22	%		6.13	%		5.95	%		5.68	%		5.34	%
Rate paid on:
NOW and interest-bearing demand deposits		2.47	%		2.58	%		2.46	%		2.11	%		1.44	%
Wealth management deposits		2.79			2.81			2.45			2.36			2.29
Money market accounts		3.83			3.64			3.50			3.11			2.21
Savings accounts		2.71			2.55			2.30			1.97			1.33
Time deposits		4.34			4.09			3.72			3.08			2.39
Interest-bearing deposits		3.48			3.32			3.12			2.71			1.97
Federal Home Loan Bank advances		3.25			3.12			3.09			3.13			3.14
Other borrowings		5.92			5.98			5.66			5.44			5.28
Subordinated notes		5.04			5.00			4.98			5.06			5.02
Junior subordinated debentures		7.94			7.96			7.74			7.49			6.97
Total interest-bearing liabilities		3.55	%		3.40	%		3.21	%		2.85	%		2.19	%
Interest rate spread (1)(2)		2.67	%		2.73	%		2.74	%		2.83	%		3.15	%
Less: Fully taxable-equivalent adjustment		(0.02	)		(0.02	)		(0.02	)		(0.02	)		(0.02	)
Net free funds/contribution (3)		0.92			0.91			0.88			0.83			0.68
Net interest margin (GAAP) (2)		3.57	%		3.62	%		3.60	%		3.64	%		3.81	%
Fully taxable-equivalent adjustment		0.02			0.02			0.02			0.02			0.02
Net interest margin, fully taxable-equivalent (non-GAAP) (2)		3.59	%		3.64	%		3.62	%		3.66	%		3.83	%

(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 16: 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: 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
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	)
Jun 30, 2023		5.7			2.9			(2.9	)		(7.9	)
Mar 31, 2023		4.2			2.4			(2.4	)		(7.3	)

 

Ramp Scenario	+200 Basis Points			+100 Basis Points			-100 Basis Points			-200 Basis Points
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	)
Jun 30, 2023	2.9			1.8			(0.9	)		(3.4	)
Mar 31, 2023	3.0			1.7			(1.3	)		(3.4	)

As shown above, the magnitude of potential changes in net interest income in various interest rate scenarios has continued to diminish. 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 years.

TABLE 8: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

	Loans repricing or contractual maturity period
As of March 31, 2024	One year or less				From one to five years				From five to fifteen years				After fifteen years				Total
(In thousands)
Commercial
Fixed rate	$	446,377			$	3,035,619			$	1,778,737			$	38,598			$	5,299,331
Variable rate		8,202,814				1,336				—				—				8,204,150
Total commercial	$	8,649,191			$	3,036,955			$	1,778,737			$	38,598			$	13,503,481
Commercial real estate
Fixed rate		507,960				2,472,599				364,499				53,492				3,398,550
Variable rate		8,218,443				16,406				38				—				8,234,887
Total commercial real estate	$	8,726,403			$	2,489,005			$	364,537			$	53,492			$	11,633,437
Home equity
Fixed rate		9,684				3,551				—				26				13,261
Variable rate		327,088				—				—				—				327,088
Total home equity	$	336,772			$	3,551			$	—			$	26			$	340,349
Residential real estate
Fixed rate		19,856				3,515				30,517				1,045,088				1,098,976
Variable rate		79,739				315,526				1,396,025				—				1,791,290
Total residential real estate	$	99,595			$	319,041			$	1,426,542			$	1,045,088			$	2,890,266
Premium finance receivables - property & casualty
Fixed rate		6,827,182				112,837				—				—				6,940,019
Variable rate		—				—				—				—				—
Total premium finance receivables - property & casualty	$	6,827,182			$	112,837			$	—			$	—			$	6,940,019
Premium finance receivables - life insurance
Fixed rate		4,452				594,634				4,000				6,991				610,077
Variable rate		7,261,956				—				—				—				7,261,956
Total premium finance receivables - life insurance	$	7,266,408			$	594,634			$	4,000			$	6,991			$	7,872,033
Consumer and other
Fixed rate		4,139				5,683				9				460				10,291
Variable rate		40,830				—				—				—				40,830
Total consumer and other	$	44,969			$	5,683			$	9			$	460			$	51,121
Total per category
Fixed rate		7,819,650				6,228,438				2,177,762				1,144,655				17,370,505
Variable rate		24,130,870				333,268				1,396,063				—				25,860,201
Total loans, net of unearned income	$	31,950,520			$	6,561,706			$	3,573,825			$	1,144,655			$	43,230,706
Variable Rate Loan Pricing by Index:
SOFR tenors																	$	14,880,310
One- year CMT																		6,112,917
Prime																		3,341,033
Fed Funds																		1,039,799
Ameribor tenors																		284,141
Other U.S. Treasury tenors																		124,941
Other																		77,060
Total variable rate																	$	25,860,201

SOFR - Secured Overnight Financing Rate.

CMT - Constant Maturity Treasury Rate.

Ameribor - American Interbank Offered Rate.

Graph available at the following link:

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 $11.6 billion tied to one-month SOFR and $6.1 billion tied to one-year CMT. The above chart shows:

		Basis Point (bp) Change in
		1-month SOFR			One- year CMT			Prime
First Quarter 2024		(2	)	bps	24		bps	0	bps
Fourth Quarter 2023		3			(67	)		0
Third Quarter 2023		18			6			25
Second Quarter 2023		34			76			25
First Quarter 2023		44			(9	)		50

 

TABLE 9: ALLOWANCE FOR CREDIT LOSSES

		Three Months Ended
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands)			2024				2023				2023				2023				2023
Allowance for credit losses at beginning of period		$	427,612			$	399,531			$	387,786			$	376,261			$	357,936
Cumulative effect adjustment from the adoption of ASU 2022-02			—				—				—				—				741
Provision for credit losses			21,673				42,908				19,923				28,514				23,045
Other adjustments			(31	)			62				(60	)			41				4
Charge-offs:
Commercial			11,215				5,114				2,427				5,629				2,543
Commercial real estate			5,469				5,386				1,713				8,124				5
Home equity			74				—				227				—				—
Residential real estate			38				114				78				—				—
Premium finance receivables - property & casualty			6,938				6,706				5,830				4,519				4,629
Premium finance receivables - life insurance			—				—				18				134				21
Consumer and other			107				148				184				110				153
Total charge-offs			23,841				17,468				10,477				18,516				7,351
Recoveries:
Commercial			479				592				1,162				505				392
Commercial real estate			31				92				243				25				100
Home equity			29				34				33				37				35
Residential real estate			2				10				1				6				4
Premium finance receivables - property & casualty			1,519				1,820				906				890				1,314
Premium finance receivables - life insurance			8				7				—				—				9
Consumer and other			23				24				14				23				32
Total recoveries			2,091				2,579				2,359				1,486				1,886
Net charge-offs			(21,750	)			(14,889	)			(8,118	)			(17,030	)			(5,465	)
Allowance for credit losses at period end		$	427,504			$	427,612			$	399,531			$	387,786			$	376,261
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial			0.33	%			0.14	%			0.04	%			0.16	%			0.07	%
Commercial real estate			0.19				0.19				0.05				0.31				0.00
Home equity			0.05				(0.04	)			0.23				(0.04	)			(0.04	)
Residential real estate			0.01				0.02				0.01				0.00				0.00
Premium finance receivables - property & casualty			0.32				0.29				0.29				0.24				0.23
Premium finance receivables - life insurance			(0.00	)			(0.00	)			0.00				0.01				0.00
Consumer and other			0.42				0.58				0.65				0.45				0.74
Total loans, net of unearned income			0.21	%			0.14	%			0.08	%			0.17	%			0.06	%
Loans at period end		$	43,230,706			$	42,131,831			$	41,446,032			$	41,023,408			$	39,565,471
Allowance for loan losses as a percentage of loans at period end			0.81	%			0.82	%			0.76	%			0.74	%			0.73	%
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end			0.99				1.01				0.96				0.94				0.95

 

TABLE 10: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

		Three Months Ended
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(In thousands)			2024				2023				2023				2023				2023
Provision for loan losses		$	26,159			$	44,023			$	20,717			$	31,516			$	22,520
Provision for unfunded lending-related commitments losses			(4,468	)			(1,081	)			(769	)			(2,945	)			550
Provision for held-to-maturity securities losses			(18	)			(34	)			(25	)			(57	)			(25	)
Provision for credit losses		$	21,673			$	42,908			$	19,923			$	28,514			$	23,045
Allowance for loan losses		$	348,612			$	344,235			$	315,039			$	302,499			$	287,972
Allowance for unfunded lending-related commitments losses			78,563				83,030				84,111				84,881				87,826
Allowance for loan losses and unfunded lending-related commitments losses			427,175				427,265				399,150				387,380				375,798
Allowance for held-to-maturity securities losses			329				347				381				406				463
Allowance for credit losses		$	427,504			$	427,612			$	399,531			$	387,786			$	376,261

 

TABLE 11: 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 March 31, 2024, December 31, 2023 and September 30, 2023.

	As of Mar 31, 2024								As of Dec 31, 2023								As of Sep 30, 2023
(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	$	13,503,481		$	166,518		1.23	%	$	12,832,053		$	169,604		1.32	%	$	12,725,473		$	151,488		1.19	%
Commercial real estate:
Construction and development		2,150,314			96,052		4.47			2,084,041			94,081		4.51			1,893,773			90,622		4.79
Non-construction		9,483,123			130,000		1.37			9,260,123			129,772		1.40			9,052,407			125,096		1.38
Home equity		340,349			7,191		2.11			343,976			7,116		2.07			343,258			7,080		2.06
Residential real estate		2,890,266			13,701		0.47			2,769,666			13,133		0.47			2,707,603			12,659		0.47
Premium finance receivables
Property and casualty insurance		6,940,019			12,645		0.18			6,903,529			12,384		0.18			6,722,747			11,132		0.17
Life insurance		7,872,033			685		0.01			7,877,943			685		0.01			7,931,808			688		0.01
Consumer and other		51,121			383		0.75			60,500			490		0.81			68,963			385		0.56
Total loans, net of unearned income	$	43,230,706		$	427,175		0.99	%	$	42,131,831		$	427,265		1.01	%	$	41,446,032		$	399,150		0.96	%
Total core loans (1)	$	25,402,132		$	382,372		1.51	%	$	24,592,729		$	380,847		1.55	%	$	24,088,651		$	363,873		1.51	%
Total niche loans (1)		17,828,574			44,803		0.25			17,539,102			46,418		0.26			17,357,381			35,277		0.20

(1) See Table 1 for additional detail on core and niche loans.

TABLE 12: LOAN PORTFOLIO AGING

(In thousands)		Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Mar 31, 2023
Loan Balances:
Commercial
Nonaccrual		$	31,740			$	38,940			$	43,569			$	40,460			$	47,950
90+ days and still accruing			27				98				200				573				—
60-89 days past due			30,248				19,488				22,889				22,808				10,755
30-59 days past due			77,715				85,743				35,681				48,970				95,593
Current			13,363,751				12,687,784				12,623,134				12,487,660				12,422,687
Total commercial		$	13,503,481			$	12,832,053			$	12,725,473			$	12,600,471			$	12,576,985
Commercial real estate
Nonaccrual		$	39,262			$	35,459			$	17,043			$	18,483			$	11,196
90+ days and still accruing			—				—				1,092				—				—
60-89 days past due			16,713				8,515				7,395				1,054				20,539
30-59 days past due			32,998				20,634				60,984				14,218				72,680
Current			11,544,464				11,279,556				10,859,666				10,575,056				10,134,663
Total commercial real estate		$	11,633,437			$	11,344,164			$	10,946,180			$	10,608,811			$	10,239,078
Home equity
Nonaccrual		$	838			$	1,341			$	1,363			$	1,361			$	1,190
90+ days and still accruing			—				—				—				110				—
60-89 days past due			212				62				219				316				116
30-59 days past due			1,617				2,263				1,668				601				1,118
Current			337,682				340,310				340,008				334,586				334,592
Total home equity		$	340,349			$	343,976			$	343,258			$	336,974			$	337,016
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies (1)		$	143,350			$	150,583			$	168,973			$	187,848			$	196,152
Nonaccrual			17,901				15,391				16,103				13,652				11,333
90+ days and still accruing			—				—				—				—				104
60-89 days past due			—				2,325				1,145				7,243				74
30-59 days past due			24,523				22,942				904				872				19,183
Current			2,704,492				2,578,425				2,520,478				2,433,625				2,278,699
Total residential real estate		$	2,890,266			$	2,769,666			$	2,707,603			$	2,643,240			$	2,505,545
Premium finance receivables - property & casualty
Nonaccrual		$	32,648			$	27,590			$	26,756			$	19,583			$	18,543
90+ days and still accruing			25,877				20,135				16,253				12,785				9,215
60-89 days past due			15,274				23,236				16,552				22,670				14,287
30-59 days past due			59,729				50,437				31,919				32,751				32,545
Current			6,806,491				6,782,131				6,631,267				6,674,909				5,664,290
Total Premium finance receivables - property & casualty		$	6,940,019			$	6,903,529			$	6,722,747			$	6,762,698			$	5,738,880
Premium finance receivables - life insurance
Nonaccrual		$	—			$	—			$	—			$	6			$	—
90+ days and still accruing			—				—				10,679				1,667				1,066
60-89 days past due			32,482				16,206				41,894				3,729				21,552
30-59 days past due			100,137				45,464				14,972				90,117				52,975
Current			7,739,414				7,816,273				7,864,263				7,943,754				8,050,209
Total Premium finance receivables - life insurance		$	7,872,033			$	7,877,943			$	7,931,808			$	8,039,273			$	8,125,802
Consumer and other
Nonaccrual		$	19			$	22			$	16			$	4			$	6
90+ days and still accruing			47				54				27				28				87
60-89 days past due			16				25				196				51				10
30-59 days past due			210				165				519				146				379
Current			50,829				60,234				68,205				31,712				41,683
Total consumer and other		$	51,121			$	60,500			$	68,963			$	31,941			$	42,165
Total loans, net of unearned income
Early buy-out loans guaranteed by U.S. government agencies (1)		$	143,350			$	150,583			$	168,973			$	187,848			$	196,152
Nonaccrual			122,408				118,743				104,850				93,549				90,218
90+ days and still accruing			25,951				20,287				28,251				15,163				10,472
60-89 days past due			94,945				69,857				90,290				57,871				67,333
30-59 days past due			296,929				227,648				146,647				187,675				274,473
Current			42,547,123				41,544,713				40,907,021				40,481,302				38,926,823
Total loans, net of unearned income		$	43,230,706			$	42,131,831			$	41,446,032			$	41,023,408			$	39,565,471

(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 13: NON-PERFORMING ASSETS⁽¹⁾

	Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars in thousands)		2024				2023				2023				2023				2023
Loans past due greater than 90 days and still accruing:
Commercial	$	27			$	98			$	200			$	573			$	—
Commercial real estate		—				—				1,092				—				—
Home equity		—				—				—				110				—
Residential real estate		—				—				—				—				104
Premium finance receivables - property & casualty		25,877				20,135				16,253				12,785				9,215
Premium finance receivables - life insurance		—				—				10,679				1,667				1,066
Consumer and other		47				54				27				28				87
Total loans past due greater than 90 days and still accruing		25,951				20,287				28,251				15,163				10,472
Non-accrual loans:
Commercial		31,740				38,940				43,569				40,460				47,950
Commercial real estate		39,262				35,459				17,043				18,483				11,196
Home equity		838				1,341				1,363				1,361				1,190
Residential real estate		17,901				15,391				16,103				13,652				11,333
Premium finance receivables - property & casualty		32,648				27,590				26,756				19,583				18,543
Premium finance receivables - life insurance		—				—				—				6				—
Consumer and other		19				22				16				4				6
Total non-accrual loans		122,408				118,743				104,850				93,549				90,218
Total non-performing loans:
Commercial		31,767				39,038				43,769				41,033				47,950
Commercial real estate		39,262				35,459				18,135				18,483				11,196
Home equity		838				1,341				1,363				1,471				1,190
Residential real estate		17,901				15,391				16,103				13,652				11,437
Premium finance receivables - property & casualty		58,525				47,725				43,009				32,368				27,758
Premium finance receivables - life insurance		—				—				10,679				1,673				1,066
Consumer and other		66				76				43				32				93
Total non-performing loans	$	148,359			$	139,030			$	133,101			$	108,712			$	100,690
Other real estate owned		14,538				13,309				14,060				11,586				9,361
Total non-performing assets	$	162,897			$	152,339			$	147,161			$	120,298			$	110,051
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial		0.24	%			0.30	%			0.34	%			0.33	%			0.38	%
Commercial real estate		0.34				0.31				0.17				0.17				0.11
Home equity		0.25				0.39				0.40				0.44				0.35
Residential real estate		0.62				0.56				0.59				0.52				0.46
Premium finance receivables - property & casualty		0.84				0.69				0.64				0.48				0.48
Premium finance receivables - life insurance		—				—				0.13				0.02				0.01
Consumer and other		0.13				0.13				0.06				0.10				0.22
Total loans, net of unearned income		0.34	%			0.33	%			0.32	%			0.26	%			0.25	%
Total non-performing assets as a percentage of total assets		0.28	%			0.27	%			0.26	%			0.22	%			0.21	%
Allowance for loan losses and unfunded lending-related commitments losses as a percentage of non-accrual loans		348.98	%			359.82	%			380.69	%			414.09	%			416.54	%

(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
	Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(In thousands)		2024				2023				2023				2023				2023
Balance at beginning of period	$	139,030			$	133,101			$	108,712			$	100,690			$	100,697
Additions from becoming non-performing in the respective period		23,142				59,010				18,666				21,246				24,455
Return to performing status		(490	)			(24,469	)			(1,702	)			(360	)			(480	)
Payments received		(8,336	)			(10,000	)			(6,488	)			(12,314	)			(5,261	)
Transfer to OREO and other repossessed assets		(1,381	)			(2,623	)			(2,671	)			(2,958	)			—
Charge-offs, net		(14,810	)			(9,480	)			(3,011	)			(2,696	)			(1,159	)
Net change for niche loans (1)		11,204				(6,509	)			19,595				5,104				(17,562	)
Balance at end of period	$	148,359			$	139,030			$	133,101			$	108,712			$	100,690

(1) Includes activity for premium finance receivables and indirect consumer loans.

Other Real Estate Owned

	Three Months Ended
	Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(In thousands)		2024				2023				2023				2023				2023
Balance at beginning of period	$	13,309			$	14,060			$	11,586			$	9,361			$	9,900
Disposals/resolved		—				(3,416	)			(467	)			(733	)			(435	)
Transfers in at fair value, less costs to sell		1,436				2,665				2,941				2,958				—
Fair value adjustments		(207	)			—				—				—				(104	)
Balance at end of period	$	14,538			$	13,309			$	14,060			$	11,586			$	9,361
	Period End
	Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
Balance by Property Type:		2024				2023				2023				2023				2023
Residential real estate	$	720			$	720			$	441			$	318			$	1,051
Residential real estate development		426				—				—				—				—
Commercial real estate		13,392				12,589				13,619				11,268				8,310
Total	$	14,538			$	13,309			$	14,060			$	11,586			$	9,361

 

TABLE 14: NON-INTEREST INCOME

	Three Months Ended																			Q1 2024 compared to Q4 2023							Q1 2024 compared to Q1 2023
	Mar 31,				Dec 31,				Sep 30,				Jun 30,			Mar 31,
(Dollars in thousands)		2024				2023				2023				2023			2023			$ Change				% Change			$ Change				% Change
Brokerage	$	5,556			$	5,349			$	4,359			$	4,404		$	4,533			$	207			4	%		$	1,023			23	%
Trust and asset management		29,259				27,926				29,170				29,454			25,412				1,333			5				3,847			15
Total wealth management		34,815				33,275				33,529				33,858			29,945				1,540			5				4,870			16
Mortgage banking		27,663				7,433				27,395				29,981			18,264				20,230			NM				9,399			51
Service charges on deposit accounts		14,811				14,522				14,217				13,608			12,903				289			2				1,908			15
Gains (losses) on investment securities, net		1,326				2,484				(2,357	)			0			1,398				(1,158	)		(47	)			(72	)		(5	)
Fees from covered call options		4,847				4,679				4,215				2,578			10,391				168			4				(5,544	)		(53	)
Trading gains (losses), net		677				(505	)			728				106			813				1,182			NM				(136	)		(17	)
Operating lease income, net		14,110				14,162				13,863				12,227			13,046				(52	)		0				1,064			8
Other:
Interest rate swap fees		2,828				4,021				2,913				2,711			2,606				(1,193	)		(30	)			222			9
BOLI		1,651				1,747				729				1,322			1,351				(96	)		(5	)			300			22
Administrative services		1,217				1,329				1,336				1,319			1,615				(112	)		(8	)			(398	)		(25	)
Foreign currency remeasurement (losses) gains		(1,171	)			1,150				(446	)			543			(188	)			(2,321	)		NM				(983	)		NM
Early pay-offs of capital leases		430				157				461				201			365				273			NM				65			18
Miscellaneous		37,376				16,375				15,895				14,576			15,260				21,001			NM				22,116			NM
Total Other		42,331				24,779				20,888				20,672			21,009				17,552			71				21,322			NM
Total Non-Interest Income	$	140,580			$	100,829			$	112,478			$	113,030		$	107,769			$	39,751			39	%		$	32,811			30	%

NM - Not meaningful.

BOLI - Bank-owned life insurance.

TABLE 15: NON-INTEREST EXPENSE

	Three Months Ended																	Q1 2024 compared to Q4 2023							Q1 2024 compared to Q1 2023
	Mar 31,			Dec 31,				Sep 30,			Jun 30,			Mar 31,
(Dollars in thousands)		2024			2023				2023			2023			2023			$ Change				% Change			$ Change				% Change
Salaries and employee benefits:
Salaries	$	112,172		$	111,484			$	111,303		$	107,671		$	108,354			$	688			1	%		$	3,818			4	%
Commissions and incentive compensation		51,001			48,974				48,817			44,511			39,799				2,027			4				11,202			28
Benefits		32,000			33,513				32,218			32,741			28,628				(1,513	)		(5	)			3,372			12
Total salaries and employee benefits		195,173			193,971				192,338			184,923			176,781				1,202			1				18,392			10
Software and equipment		27,731			27,779				25,951			26,205			24,697				(48	)		0				3,034			12
Operating lease equipment		10,683			10,694				12,020			9,816			9,833				(11	)		0				850			9
Occupancy, net		19,086			18,102				21,304			19,176			18,486				984			5				600			3
Data processing		9,292			8,892				10,773			9,726			9,409				400			4				(117	)		(1	)
Advertising and marketing		13,040			17,166				18,169			17,794			11,946				(4,126	)		(24	)			1,094			9
Professional fees		9,553			8,768				8,887			8,940			8,163				785			9				1,390			17
Amortization of other acquisition-related intangible assets		1,158			1,356				1,408			1,499			1,235				(198	)		(15	)			(77	)		(6	)
FDIC insurance		9,381			9,303				9,748			9,008			8,669				78			1				712			8
FDIC insurance - special assessment		5,156			34,374				—			—			—				(29,218	)		(85	)			5,156			NM
OREO expense, net		392			(1,559	)			120			118			(207	)			1,951			NM				599			NM
Other:
Lending expenses, net of deferred origination costs		5,078			5,330				4,777			7,890			3,099				(252	)		(5	)			1,979			64
Travel and entertainment		4,597			5,754				5,449			5,401			4,590				(1,157	)		(20	)			7			0
Miscellaneous		22,825			22,722				19,111			20,127			22,468				103			0				357			2
Total other		32,500			33,806				29,337			33,418			30,157				(1,306	)		(4	)			2,343			8
Total Non-Interest Expense	$	333,145		$	362,652			$	330,055		$	320,623		$	299,169			$	(29,507	)		(8	)%		$	33,976			11	%

NM - Not meaningful.

TABLE 16: 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
	Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars and shares in thousands)		2024				2023				2023				2023				2023
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:
(A) Interest Income (GAAP)	$	805,513			$	793,848			$	762,400			$	697,176			$	639,690
Taxable-equivalent adjustment:
- Loans		2,246				2,150				1,923				1,882				1,872
- Liquidity Management Assets		550				575				572				551				551
- Other Earning Assets		5				4				1				1				4
(B) Interest Income (non-GAAP)	$	808,314			$	796,577			$	764,896			$	699,610			$	642,117
(C) Interest Expense (GAAP)		341,319				323,874				300,042				249,639				181,695
(D) Net Interest Income (GAAP) (A minus C)	$	464,194			$	469,974			$	462,358			$	447,537			$	457,995
(E) Net Interest Income (non-GAAP) (B minus C)	$	466,995			$	472,703			$	464,854			$	449,971			$	460,422
Net interest margin (GAAP)		3.57	%			3.62	%			3.60	%			3.64	%			3.81	%
Net interest margin, fully taxable-equivalent (non-GAAP)		3.59				3.64				3.62				3.66				3.83
(F) Non-interest income	$	140,580			$	100,829			$	112,478			$	113,030			$	107,769
(G) (Losses) gains on investment securities, net		1,326				2,484				(2,357	)			0				1,398
(H) Non-interest expense		333,145				362,652				330,055				320,623				299,169
Efficiency ratio (H/(D+F-G))		55.21	%			63.81	%			57.18	%			57.20	%			53.01	%
Efficiency ratio (non-GAAP) (H/(E+F-G))		54.95				63.51				56.94				56.95				52.78
	Three Months Ended
	Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(Dollars and shares in thousands)		2024				2023				2023				2023				2023
Reconciliation of Non-GAAP Tangible Common Equity Ratio:
Total shareholders’ equity (GAAP)	$	5,436,400			$	5,399,526			$	5,015,613			$	5,041,912			$	5,015,506
Less: Non-convertible preferred stock (GAAP)		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)
Less: Intangible assets (GAAP)		(677,911	)			(679,561	)			(680,353	)			(682,327	)			(674,538	)
(I) Total tangible common shareholders’ equity (non-GAAP)	$	4,345,989			$	4,307,465			$	3,922,760			$	3,947,085			$	3,928,468
(J) Total assets (GAAP)	$	57,576,933			$	56,259,934			$	55,555,246			$	54,286,176			$	52,873,511
Less: Intangible assets (GAAP)		(677,911	)			(679,561	)			(680,353	)			(682,327	)			(674,538	)
(K) Total tangible assets (non-GAAP)	$	56,899,022			$	55,580,373			$	54,874,893			$	53,603,849			$	52,198,973
Common equity to assets ratio (GAAP) (L/J)		8.7	%			8.9	%			8.3	%			8.5	%			8.7	%
Tangible common equity ratio (non-GAAP) (I/K)		7.6				7.7				7.1				7.4				7.5

 

Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity	$	5,436,400			$	5,399,526			$	5,015,613			$	5,041,912			$	5,015,506
Less: Preferred stock		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)
(L) Total common equity	$	5,023,900			$	4,987,026			$	4,603,113			$	4,629,412			$	4,603,006
(M) Actual common shares outstanding		61,737				61,244				61,222				61,198				61,176
Book value per common share (L/M)	$	81.38			$	81.43			$	75.19			$	75.65			$	75.24
Tangible book value per common share (non-GAAP) (I/M)		70.40				70.33				64.07				64.50				64.22
Reconciliation of Non-GAAP Return on Average Tangible Common Equity:
(N) Net income applicable to common shares	$	180,303			$	116,489			$	157,207			$	147,759			$	173,207
Add: Intangible asset amortization		1,158				1,356				1,408				1,499				1,235
Less: Tax effect of intangible asset amortization		(291	)			(343	)			(380	)			(402	)			(321	)
After-tax intangible asset amortization	$	867			$	1,013			$	1,028			$	1,097			$	914
(O) Tangible net income applicable to common shares (non-GAAP)	$	181,170			$	117,502			$	158,235			$	148,856			$	174,121
Total average shareholders’ equity	$	5,440,457			$	5,066,196			$	5,083,883			$	5,044,718			$	4,895,271
Less: Average preferred stock		(412,500	)			(412,500	)			(412,500	)			(412,500	)			(412,500	)
(P) Total average common shareholders’ equity	$	5,027,957			$	4,653,696			$	4,671,383			$	4,632,218			$	4,482,771
Less: Average intangible assets		(678,731	)			(679,812	)			(681,520	)			(682,561	)			(675,247	)
(Q) Total average tangible common shareholders’ equity (non-GAAP)	$	4,349,226			$	3,973,884			$	3,989,863			$	3,949,657			$	3,807,524
Return on average common equity, annualized (N/P)		14.42	%			9.93	%			13.35	%			12.79	%			15.67	%
Return on average tangible common equity, annualized (non-GAAP) (O/Q)		16.75				11.73				15.73				15.12				18.55
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:
Income before taxes	$	249,956			$	165,243			$	224,858			$	211,430			$	243,550
Add: Provision for credit losses		21,673				42,908				19,923				28,514				23,045
Pre-tax income, excluding provision for credit losses (non-GAAP)	$	271,629			$	208,151			$	244,781			$	239,944			$	266,595

 

WINTRUST SUBSIDIARIES AND LOCATIONS

Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select Market (Nasdaq: WTFC). Its 15 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. and Town Bank, N.A., in Hartland, Wisconsin.

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 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.
• The Chicago 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, and ability of the Company to effectively manage the transition of the chief executive officer role;
• 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;
• 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 could have an adverse effect on the Company’s financial condition and results of operations, lead to material disruption of the Company’s operations or the ability or willingness of clients to access the Company’s products and services; and
• the severity, magnitude and duration of the COVID-19 pandemic, including the continued emergence of variant strains, and the direct and indirect impact of such pandemic, as well as responses to the pandemic by the government, businesses and consumers, on the economy, our financial results, operations and personnel, commercial activity and demand across our business and our customers’ businesses.

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 Thursday, April 18, 2024 at 10:00 a.m. (CDT) regarding first quarter 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 March 28, 2024 available at the Investor Relations, Investor News and Events, Press Releases link on its website at 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 , Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the first quarter 2024 earnings press release will also be available on the home page of the Company’s website at 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: