Wintrust Financial Corporation Reports Record Year-to-Date Net Income


ROSEMONT, Ill., July 17, 2024 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, “we” or “our”) (Nasdaq: WTFC) announced record net income of $339.7 million or $5.21 per diluted common share for the first six months of 2024 compared to net income of $334.9 million or $5.18 per diluted common share for the same period of 2023. Pre-tax, pre-provision income (non-GAAP) for the first six months of 2024 totaled a record $523.0 million, compared to $506.5 million in the first six months of 2023.

The Company recorded quarterly net income of $152.4 million or $2.32 per diluted common share for the second quarter of 2024 compared to net income of $187.3 million or $2.89 per diluted common share for the first quarter of 2024. Pre-tax, pre-provision income (non-GAAP) totaled $251.4 million as compared to $271.6 million for the first quarter of 2024, with the majority of the decrease attributable to the net gain of $19.3 million on the sale of the Company's Retirement Benefit Advisors ("RBA") division in the first quarter of 2024.

Timothy S. Crane, President and Chief Executive Officer, commented, “We are pleased with our record net income for the first half of 2024 and record quarterly net interest income. Robust loan and deposit growth coupled with a stabilizing margin drove our strong second quarter results. Pre-tax, pre-provision income (non-GAAP) also set the Company’s record for the first half of 2024 and we believe we are well-positioned for strong financial performance as we continue our momentum into the second half of the year.”

Additionally, Mr. Crane noted, “Net interest margin in the second quarter was within our expected range, decreasing seven basis points as compared to the first quarter of 2024. We expect the combination of a stable net interest margin and balance sheet growth to result in continued net interest income growth over the next few quarters. Focusing on growth of net interest income, disciplined expense control and maintaining our consistent credit standards should lead to increasing our long-term franchise value.”

Highlights of the second quarter of 2024:
Comparative information to the first quarter of 2024, unless otherwise noted

  • Total loans increased by approximately $1.4 billion, or 13% annualized. Adjusting for the impact of a loan sale transaction of property and casualty insurance premium finance receivables during the second quarter of 2024, total loans would have increased $2.1 billion, or 20% annualized.
  • Total deposits increased by approximately $1.6 billion, or 14% annualized.
  • Total assets increased by $2.2 billion, or 15% annualized.
  • Net interest margin decreased by seven basis points to 3.50% (3.52% on a fully taxable-equivalent basis, non-GAAP) during the second quarter of 2024.
    • Net interest income increased to $470.6 million in the second quarter of 2024 compared to $464.2 million in the first quarter of 2024, primarily due to average earning asset growth.
  • Non-interest income was impacted by the following:
    • Net losses on investment securities totaled $4.3 million in the second quarter of 2024 related to changes in the value of equity securities as compared to net gains of $1.3 million in the first quarter of 2024.
    • Favorable net valuation adjustments related to certain mortgage assets totaled $1.4 million in the second quarter of 2024 compared to favorable net valuation adjustments of $2.4 million in the first quarter of 2024.
  • Non-interest expense was impacted by the following:
    • Occupancy expenses of $1.9 million in the second quarter of 2024 related to an unrealized loss associated with the anticipated sale of a branch facility.
    • Approximately $532,000 of professional fees related to the pending acquisition of Macatawa Bank Corporation in the second quarter of 2024 as compared to approximately $392,000 recorded in the first quarter of 2024.
  • Provision for credit losses totaled $40.1 million in the second quarter of 2024 as compared to a provision for credit losses of $21.7 million in the first quarter of 2024.

Mr. Crane noted, “Net loan growth during the second quarter totaled $1.4 billion, or 13% on an annualized basis. We are pleased with our diversified loan growth across all major loan types. We were able to achieve this growth net of our election to sell property and casualty insurance premium finance receivables that reduced total outstanding loans at the end of the second quarter by approximately $698 million. Deposit growth in the second quarter of 2024 was utilized to fund our robust loan growth as deposits increased by approximately $1.6 billion, or 14% on an annualized basis. Non-interest bearing deposits remained 21% of total deposits at the end of the second quarter of 2024 and increased $123.3 million compared to the first quarter of 2024. We continue to leverage our customer relationships and market positioning to generate deposits, grow loans and build long term franchise value. Despite the slightly lower net interest margin during the current period, we generated record quarterly net interest income as we continued to grow earning assets.”

Commenting on credit quality, Mr. Crane stated, “As anticipated, we are observing some gradual normalization in our credit metrics. Net charge-offs totaled $30.0 million, or 28 basis points of average total loans on an annualized basis, in the second quarter of 2024 and were spread primarily across the commercial, commercial real estate and property and casualty premium finance receivables portfolios. This compared to net charge-offs totaling $21.8 million, or 21 basis points of average total loans on an annualized basis, in the first quarter of 2024. Non-performing loans totaled $174.3 million, or 0.39% of total loans, at the end of the second quarter of 2024 compared to $148.4 million, or 0.34% of total loans, at the end of the first quarter of 2024. Levels of loans classified as special mention and substandard remained consistent with levels reported at the end of the first quarter of 2024. We continue to be conservative and proactive in reviewing credit and maintaining our consistently strong credit standards. The allowance for credit losses on our core loan portfolio as of June 30, 2024 was approximately 1.52% of the outstanding balance, an increase of one basis point compared to March 31, 2024 (see Table 11 for additional information). We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit.”

In summary, Mr. Crane noted, “We are very pleased with our record start to the year. Momentum continues as our substantial loan growth in the second quarter creates positive revenue momentum moving forward as period-end loan balances exceeded averages. Regulatory approval of our previously announced acquisition of Macatawa Bank Corporation in Michigan was received June 17, 2024. Completion of the acquisition remains subject to approval by Macatawa’s shareholders at a meeting to be held on July 31, 2024, as well as the satisfaction of the other customary closing conditions set forth in the merger agreement. We remain excited for the opportunity to expand into Michigan with Macatawa’s committed management team and reputable bank exhibiting excess liquidity, pristine asset quality and low-cost core deposits.”

The graphs below illustrate certain financial highlights of the second quarter of 2024 as well as historical financial performance. See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information with respect to non-GAAP financial measures/ratios, including the reconciliations to the corresponding GAAP financial measures/ratios.

Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/49b05914-dbe5-4a50-923d-ed93ccdfb379

SUMMARY OF RESULTS:

BALANCE SHEET

Total assets increased $2.2 billion in the second quarter of 2024 as compared to the first quarter of 2024. Total loans increased by $1.4 billion as compared to the first quarter of 2024. The increase in loans was diversified across nearly all loan portfolios. Adjusting for the impact of a loan sale transaction of property and casualty insurance premium finance receivables during the second quarter of 2024, total loans would have increased $2.1 billion, or 20% annualized.

Total liabilities increased by $2.1 billion in the second quarter of 2024 as compared to the first quarter of 2024 primarily due to a $1.6 billion increase in total deposits. Non-interest bearing deposits as a percentage of total deposits was 21% at both June 30, 2024 and March 31, 2024. The Company's loans to deposits ratio ended the quarter at 93.0%.

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 second quarter of 2024, net interest income totaled $470.6 million, an increase of $6.4 million as compared to the first quarter of 2024. The $6.4 million increase in net interest income in the second quarter of 2024 compared to the first quarter of 2024 was primarily due to a $1.9 billion increase in average earning assets partially offset by a seven basis point decrease in the net interest margin.

Net interest margin was 3.50% (3.52% on a fully taxable-equivalent basis, non-GAAP) during the second quarter of 2024 compared to 3.57% (3.59% on a fully taxable-equivalent basis, non-GAAP) during the first quarter of 2024. The net interest margin decrease as compared to the first quarter of 2024 was primarily due to a 21 basis point increase in the rate paid on interest-bearing liabilities. This decrease was partially offset by a 12 basis point increase in yield on earning assets and a two basis point increase in the net free funds contribution. The 21 basis point increase on the rate paid on interest-bearing liabilities in the second quarter of 2024 as compared to the first quarter of 2024 was primarily due to a 25 basis point increase in the rate paid on interest-bearing deposits. The 12 basis point increase in the yield on earning assets in the second quarter of 2024 as compared to the first quarter of 2024 was primarily due to a 10 basis point expansion on loan yields and 11 basis point increase in yield on liquidity management assets.

For more information regarding net interest income, see Table 4 through Table 8 in this report.

ASSET QUALITY

The allowance for credit losses totaled $437.6 million as of June 30, 2024, an increase of $10.1 million compared to $427.5 million as of March 31, 2024. A provision for credit losses totaling $40.1 million was recorded for the second quarter of 2024 as compared to $21.7 million recorded in the first quarter of 2024. For more information regarding the allowance for credit losses and provision for credit losses, see Table 11 in this report.

Management believes the allowance for credit losses is appropriate to account for expected credit losses. The Current Expected Credit Losses accounting standard requires the Company to estimate expected credit losses over the life of the Company’s financial assets as of the reporting date. There can be no assurances, however, that future losses will not significantly exceed the amounts provided for, thereby affecting future results of operations. A summary of the allowance for credit losses calculated for the loan components in each portfolio as of June 30, 2024, March 31, 2024, and December 31, 2023 is shown on Table 12 of this report.

Net charge-offs totaled $30.0 million in the second quarter of 2024, as compared to $21.8 million of net charge-offs in the first quarter of 2024. Net charge-offs as a percentage of average total loans were 28 basis points in the second quarter of 2024 on an annualized basis compared to 21 basis points on an annualized basis in the first quarter of 2024. For more information regarding net charge-offs, see Table 10 in this report.

The Company’s delinquency rates remain low and manageable. For more information regarding past due loans, see Table 13 in this report.

Non-performing assets totaled $194.0 million and comprised 0.32% of total assets as of June 30, 2024, as compared to $162.9 million, or 0.28% of total assets, as of March 31, 2024. Non-performing loans totaled $174.3 million and comprised 0.39% of total loans at June 30, 2024, as compared to $148.4 million and 0.34% of total loans at March 31, 2024. The increase in the second quarter of 2024 was primarily due to an increase in certain credits within the commercial and commercial real estate portfolios becoming nonaccrual. For more information regarding non-performing assets, see Table 14 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 relatively low levels in the second quarter of 2024.

NON-INTEREST INCOME

Wealth management revenue was relatively stable in the second quarter of 2024 as compared to the first quarter of 2024. 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 $1.5 million in the second quarter of 2024 as compared to the first quarter of 2024 primarily due to $1.6 million higher production revenue from increased mortgage production as well as a favorable adjustment to the Company’s held-for-sale portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $642,000 in the second quarter of 2024 compared to a $2.2 million unfavorable adjustment in the first quarter of 2024. This was partially offset by a $105,000 favorable valuation adjustment to the fair value of mortgage servicing rights, net of servicing hedge, in the second quarter of 2024 compared to a $5.0 million favorable adjustment in the first quarter of 2024. The Company monitors the relationship of these assets and seeks to minimize the earnings impact of fair value changes. For more information regarding mortgage banking revenue, see Table 16 in this report.

The Company recognized $4.3 million in net losses on investment securities in the second quarter of 2024 as compared to $1.3 million in net gains in the first quarter of 2024. The change from period to period was primarily the result of higher losses on the Company’s equity investment securities in the second quarter of 2024.

Fees from covered call options decreased by $2.8 million in the second quarter of 2024 as compared to the first quarter of 2024. The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio. These option transactions are designed to mitigate overall interest rate risk and do not qualify as hedges pursuant to accounting guidance.

Other income decreased by $13.0 million in the second quarter of 2024 compared to the first quarter of 2024 primarily due to a $20.0 million gain related to the sale of the RBA division within the wealth management business recognized in the first quarter of 2024. This was partially offset by a favorable 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 $1.0 million when compared to the first quarter of 2024, as well as less unfavorable foreign currency remeasurement adjustments when compared to the first quarter of 2024 and realized gains from the sale of certain loans during the second quarter of 2024.

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

NON-INTEREST EXPENSE

Salaries and employee benefits expense increased by $3.4 million in the second quarter of 2024 as compared to the first quarter of 2024. The $3.4 million increase is primarily related to higher incentive compensation expense due to elevated commissions from increased mortgage production as well as higher salaries due to a full quarter of the Company’s annual merit increase.

Advertising and marketing expenses in the second quarter of 2024 totaled $17.4 million, which is a $4.4 million increase as compared to the first quarter of 2024, primarily due to an increase in seasonal sports sponsorship costs. Marketing costs are incurred to promote the Company’s brand, commercial banking capabilities and the Company’s various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the Company’s non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs utilized which are determined based on the market area, targeted audience, competition and various other factors. Generally, these expenses are elevated in the second and third quarters of each year.

FDIC insurance, including amounts accrued for estimated special assessments, decreased $4.1 million in the second quarter of 2024 as compared to the first quarter of 2024. This was primarily the result of a $5.2 million 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 no such special assessment in the second quarter of 2024.

For more information regarding non-interest expense, see Table 17 in this report.

INCOME TAXES

The Company recorded income tax expense of $59.0 million in the second quarter of 2024 compared to $62.7 million in the first quarter of 2024. The effective tax rates were 27.90% in the second quarter of 2024 compared to 25.07% in the first quarter of 2024. 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 $16,000 in the second quarter of 2024, compared to net excess tax benefits of $4.4 million in the first quarter of 2024 related to share-based compensation.

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

Mortgage banking revenue was $29.1 million for the second quarter of 2024, an increase of $1.5 million as compared to the first quarter of 2024, primarily due to $1.6 million higher production revenue from increased mortgage production as well as a favorable adjustment to the Company’s held-for-sale portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $642,000 in the second quarter of 2024 compared to a $2.2 million unfavorable adjustment in the first quarter of 2024. This was partially offset by a $105,000 favorable valuation adjustment to the fair value of mortgage servicing rights, net of servicing hedge, in the second quarter of 2024 compared to a $5.0 million favorable adjustment in the first quarter of 2024. Service charges on deposit accounts totaled $15.5 million in the second quarter of 2024, which was relatively stable compared to the first quarter of 2024. The Company’s gross commercial and commercial real estate loan pipelines remained solid as of June 30, 2024 indicating momentum for expected continued loan growth in the third 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 $5.5 billion during the second quarter of 2024. Average balances increased by $392.2 million, net of a loan sale transaction of property and casualty insurance premium finance receivables during the second quarter of 2024, as compared to the first quarter of 2024. The Company’s leasing portfolio balance increased in the second quarter of 2024, with its portfolio of assets, including capital leases, loans and equipment on operating leases, totaling $3.7 billion as of June 30, 2024 as compared to $3.6 billion as of March 31, 2024. Revenues from the Company’s out-sourced administrative services business were $1.3 million in the second quarter of 2024, which was relatively stable compared to the first quarter of 2024.

Wealth Management

Through four separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, tax-deferred like-kind exchange services, asset management, and securities brokerage services. See “Items Impacting Comparative Results,” regarding the sale of the RBA division during the first quarter of 2024. Wealth management revenue totaled $35.4 million in the second quarter of 2024, relatively stable as compared to the first quarter of 2024. At June 30, 2024, the Company’s wealth management subsidiaries had approximately $48.2 billion of assets under administration, which included $8.8 billion of assets owned by the Company and its subsidiary banks.

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

       % or (1)
basis point  (bp) change from
1st Quarter
2024
 % or
basis point  (bp) change from
2nd Quarter
2023
  Three Months Ended 
(Dollars in thousands, except per share data) Jun 30, 2024 Mar 31, 2024 Jun 30, 2023 
Net income $152,388  $187,294  $154,750 (19)% (2)%
Pre-tax income, excluding provision for credit losses (non-GAAP) (2)  251,404   271,629   239,944 (7)  5  
Net income per common share – Diluted  2.32   2.89   2.38 (20)  (3) 
Cash dividends declared per common share  0.45   0.45   0.40    13  
Net revenue (3)  591,757   604,774   560,567 (2)  6  
Net interest income  470,610   464,194   447,537 1   5  
Net interest margin  3.50%  3.57%  3.64%(7)bps (14)bps
Net interest margin – fully taxable-equivalent (non-GAAP) (2)  3.52   3.59   3.66 (7)  (14) 
Net overhead ratio (4)  1.53   1.39   1.58 14   (5) 
Return on average assets  1.07   1.35   1.18 (28)  (11) 
Return on average common equity  11.61   14.42   12.79 (281)  (118) 
Return on average tangible common equity (non-GAAP) (2)  13.49   16.75   15.12 (326)  (163) 
At end of period           
Total assets $59,781,516  $57,576,933  $54,286,176 15 % 10 %
Total loans (5)  44,675,531   43,230,706   41,023,408 13   9  
Total deposits  48,049,026   46,448,858   44,038,707 14   9  
Total shareholders’ equity  5,536,628   5,436,400   5,041,912 7   10  

(1) Period-end balance sheet percentage changes are annualized.
(2) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(3) Net revenue is net interest income plus non-interest income.
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency.
(5) Excludes mortgage loans held-for-sale.

Certain returns, yields, performance ratios, or quarterly growth rates are “annualized” in this presentation to represent an annual time period. This is done for analytical purposes to better discern, for decision-making purposes, underlying performance trends when compared to full-year or year-over-year amounts. For example, a 5% growth rate for a quarter would represent an annualized 20% growth rate. Additional supplemental financial information showing quarterly trends can be found on the Company’s website at www.wintrust.com by choosing “Financial Reports” under the “Investor Relations” heading, and then choosing “Financial Highlights.”

WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights

  Three Months EndedSix Months Ended
(Dollars in thousands, except per share data) Jun 30,
2024
 Mar 31,
2024
 Dec 31,
2023
 Sep 30,
2023
 Jun 30,
2023
Jun 30,
2024
 Jun 30,
2023
Selected Financial Condition Data (at end of period):   
Total assets $59,781,516  $57,576,933  $56,259,934  $55,555,246  $54,286,176    
Total loans (1)  44,675,531   43,230,706   42,131,831   41,446,032   41,023,408    
Total deposits  48,049,026   46,448,858   45,397,170   44,992,686   44,038,707    
Total shareholders’ equity  5,536,628   5,436,400   5,399,526   5,015,613   5,041,912    
Selected Statements of Income Data:             
Net interest income $470,610  $464,194  $469,974  $462,358  $447,537 $934,804  $905,532 
Net revenue (2)  591,757   604,774   570,803   574,836   560,567  1,196,531   1,126,331 
Net income  152,388   187,294   123,480   164,198   154,750  339,682   334,948 
Pre-tax income, excluding provision for credit losses (non-GAAP) (3)  251,404   271,629   208,151   244,781   239,944  523,033   506,539 
Net income per common share – Basic  2.35   2.93   1.90   2.57   2.41  5.28   5.26 
Net income per common share – Diluted  2.32   2.89   1.87   2.53   2.38  5.21   5.18 
Cash dividends declared per common share  0.45   0.45   0.40   0.40   0.40  0.90   0.80 
Selected Financial Ratios and Other Data:             
Performance Ratios:             
Net interest margin  3.50%  3.57%  3.62%  3.60%  3.64% 3.53%  3.72%
Net interest margin – fully taxable-equivalent (non-GAAP) (3)  3.52   3.59   3.64   3.62   3.66  3.56   3.74 
Non-interest income to average assets  0.85   1.02   0.73   0.82   0.86  0.93   0.85 
Non-interest expense to average assets  2.38   2.41   2.62   2.41   2.44  2.40   2.39 
Net overhead ratio (4)  1.53   1.39   1.89   1.59   1.58  1.46   1.54 
Return on average assets  1.07   1.35   0.89   1.20   1.18  1.21   1.29 
Return on average common equity  11.61   14.42   9.93   13.35   12.79  13.01   14.20 
Return on average tangible common equity (non-GAAP) (3)  13.49   16.75   11.73   15.73   15.12  15.12   16.79 
Average total assets $57,493,184  $55,602,695  $55,017,075  $54,381,981  $52,601,953 $56,547,939  $52,340,090 
Average total shareholders’ equity  5,450,173   5,440,457   5,066,196   5,083,883   5,044,718  5,445,315   4,970,407 
Average loans to average deposits ratio  95.1%  94.5%  92.9%  92.4%  94.3% 94.8%  93.7%
Period-end loans to deposits ratio  93.0   93.1   92.8   92.1   93.2    
Common Share Data at end of period:             
Market price per common share $98.56  $104.39  $92.75  $75.50  $72.62    
Book value per common share  82.97   81.38   81.43   75.19   75.65    
Tangible book value per common share (non-GAAP) (3)  72.01   70.40   70.33   64.07   64.50    
Common shares outstanding  61,760,139   61,736,715   61,243,626   61,222,058   61,197,676    
Other Data at end of period:             
Common equity to assets ratio  8.6%  8.7%  8.9%  8.3%  8.5%   
Tangible common equity ratio (non-GAAP) (3)  7.5   7.6   7.7   7.1   7.4    
Tier 1 leverage ratio (5)  9.3   9.4   9.3   9.2   9.3    
Risk-based capital ratios:             
Tier 1 capital ratio (5)  10.2   10.3   10.3   10.2   10.1    
Common equity tier 1 capital ratio (5)  9.5   9.5   9.4   9.3   9.3    
Total capital ratio (5)  12.0   12.2   12.1   12.0   12.0    
Allowance for credit losses (6) $437,560  $427,504  $427,612  $399,531  $387,786    
Allowance for loan and unfunded lending-related commitment losses to total loans  0.98%  0.99%  1.01%  0.96%  0.94%   
Number of:             
Bank subsidiaries  15   15   15   15   15    
Banking offices  177   176   174   174   175    

(1) Excludes mortgage loans held-for-sale.
(2) Net revenue is net interest income plus non-interest income.
(3) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(4) The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency.
(5) Capital ratios for current quarter-end are estimated.
(6) The allowance for credit losses includes the allowance for loan losses, the allowance for unfunded lending-related commitments and the allowance for held-to-maturity securities losses.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

  (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
  Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands)  2024   2024   2023   2023   2023 
Assets          
Cash and due from banks $415,462  $379,825  $423,404  $418,088  $513,858 
Federal funds sold and securities purchased under resale agreements  62   61   60   60   59 
Interest-bearing deposits with banks  2,824,314   2,131,077   2,084,323   2,448,570   2,163,708 
Available-for-sale securities, at fair value  4,329,957   4,387,598   3,502,915   3,611,835   3,492,481 
Held-to-maturity securities, at amortized cost  3,755,924   3,810,015   3,856,916   3,909,150   3,564,473 
Trading account securities  4,134   2,184   4,707   1,663   3,027 
Equity securities with readily determinable fair value  112,173   119,777   139,268   134,310   116,275 
Federal Home Loan Bank and Federal Reserve Bank stock  256,495   224,657   205,003   204,040   195,117 
Brokerage customer receivables  13,682   13,382   10,592   14,042   15,722 
Mortgage loans held-for-sale, at fair value  411,851   339,884   292,722   304,808   338,728 
Loans, net of unearned income  44,675,531   43,230,706   42,131,831   41,446,032   41,023,408 
Allowance for loan losses  (363,719)  (348,612)  (344,235)  (315,039)  (302,499)
Net loans  44,311,812   42,882,094   41,787,596   41,130,993   40,720,909 
Premises, software and equipment, net  722,295   744,769   748,966   747,501   749,393 
Lease investments, net  275,459   283,557   281,280   275,152   274,351 
Accrued interest receivable and other assets  1,671,334   1,580,142   1,551,899   1,674,681   1,455,748 
Trade date securities receivable        690,722       
Goodwill  655,955   656,181   656,672   656,109   656,674 
Other acquisition-related intangible assets  20,607   21,730   22,889   24,244   25,653 
Total assets $59,781,516  $57,576,933  $56,259,934  $55,555,246  $54,286,176 
Liabilities and Shareholders’ Equity          
Deposits:          
Non-interest-bearing $10,031,440  $9,908,183  $10,420,401  $10,347,006  $10,604,915 
Interest-bearing  38,017,586   36,540,675   34,976,769   34,645,680   33,433,792 
Total deposits  48,049,026   46,448,858   45,397,170   44,992,686   44,038,707 
Federal Home Loan Bank advances  3,176,309   2,676,751   2,326,071   2,326,071   2,026,071 
Other borrowings  606,579   575,408   645,813   643,999   665,219 
Subordinated notes  298,113   437,965   437,866   437,731   437,628 
Junior subordinated debentures  253,566   253,566   253,566   253,566   253,566 
Accrued interest payable and other liabilities  1,861,295   1,747,985   1,799,922   1,885,580   1,823,073 
Total liabilities  54,244,888   52,140,533   50,860,408   50,539,633   49,244,264 
Shareholders’ Equity:          
Preferred stock  412,500   412,500   412,500   412,500   412,500 
Common stock  61,825   61,798   61,269   61,244   61,219 
Surplus  1,964,645   1,954,532   1,943,806   1,933,226   1,923,623 
Treasury stock  (5,760)  (5,757)  (2,217)  (1,966)  (1,966)
Retained earnings  3,615,616   3,498,475   3,345,399   3,253,332   3,120,626 
Accumulated other comprehensive loss  (512,198)  (485,148)  (361,231)  (642,723)  (474,090)
Total shareholders’ equity  5,536,628   5,436,400   5,399,526   5,015,613   5,041,912 
Total liabilities and shareholders’ equity $59,781,516  $57,576,933  $56,259,934  $55,555,246  $54,286,176 


WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 Three Months EndedSix Months Ended
(Dollars in thousands, except per share data)Jun 30,
2024
 Mar 31,
2024
 Dec 31,
2023
 Sep 30,
2023
 Jun 30,
2023
Jun 30,
2024
 Jun 30,
2023
Interest income            
Interest and fees on loans$749,812  $710,341 $694,943  $666,260  $621,057$1,460,153  $1,179,749 
Mortgage loans held-for-sale 5,434   4,146  4,318   4,767   4,178 9,580   7,706 
Interest-bearing deposits with banks 19,731   16,658  21,762   26,866   16,882 36,389   30,350 
Federal funds sold and securities purchased under resale agreements 17   19  578   1,157   1 36   71 
Investment securities 69,779   69,678  68,237   59,164   51,243 139,457   111,186 
Trading account securities 13   18  15   6   6 31   20 
Federal Home Loan Bank and Federal Reserve Bank stock 4,974   4,478  3,792   3,896   3,544 9,452   7,224 
Brokerage customer receivables 219   175  203   284   265 394   560 
Total interest income 849,979   805,513  793,848   762,400   697,176 1,655,492   1,336,866 
Interest expense            
Interest on deposits 335,703   299,532  285,390   262,783   213,495 635,235   358,297 
Interest on Federal Home Loan Bank advances 24,797   22,048  18,316   17,436   17,399 46,845   36,534 
Interest on other borrowings 8,700   9,248  9,557   9,384   8,485 17,948   16,339 
Interest on subordinated notes 5,185   5,487  5,522   5,491   5,523 10,672   11,011 
Interest on junior subordinated debentures 4,984   5,004  5,089   4,948   4,737 9,988   9,153 
Total interest expense 379,369   341,319  323,874   300,042   249,639 720,688   431,334 
Net interest income 470,610   464,194  469,974   462,358   447,537 934,804   905,532 
Provision for credit losses 40,061   21,673  42,908   19,923   28,514 61,734   51,559 
Net interest income after provision for credit losses 430,549   442,521  427,066   442,435   419,023 873,070   853,973 
Non-interest income            
Wealth management 35,413   34,815  33,275   33,529   33,858 70,228   63,803 
Mortgage banking 29,124   27,663  7,433   27,395   29,981 56,787   48,245 
Service charges on deposit accounts 15,546   14,811  14,522   14,217   13,608 30,357   26,511 
(Losses) gains on investment securities, net (4,282)  1,326  2,484   (2,357)  0 (2,956)  1,398 
Fees from covered call options 2,056   4,847  4,679   4,215   2,578 6,903   12,969 
Trading gains (losses), net 70   677  (505)  728   106 747   919 
Operating lease income, net 13,938   14,110  14,162   13,863   12,227 28,048   25,273 
Other 29,282   42,331  24,779   20,888   20,672 71,613   41,681 
Total non-interest income 121,147   140,580  100,829   112,478   113,030 261,727   220,799 
Non-interest expense            
Salaries and employee benefits 198,541   195,173  193,971   192,338   184,923 393,714   361,704 
Software and equipment 29,231   27,731  27,779   25,951   26,205 56,962   50,902 
Operating lease equipment 10,834   10,683  10,694   12,020   9,816 21,517   19,649 
Occupancy, net 19,585   19,086  18,102   21,304   19,176 38,671   37,662 
Data processing 9,503   9,292  8,892   10,773   9,726 18,795   19,135 
Advertising and marketing 17,436   13,040  17,166   18,169   17,794 30,476   29,740 
Professional fees 9,967   9,553  8,768   8,887   8,940 19,520   17,103 
Amortization of other acquisition-related intangible assets 1,122   1,158  1,356   1,408   1,499 2,280   2,734 
FDIC insurance 10,429   14,537  43,677   9,748   9,008 24,966   17,677 
OREO expenses, net (259)  392  (1,559)  120   118 133   (89)
Other 33,964   32,500  33,806   29,337   33,418 66,464   63,575 
Total non-interest expense 340,353   333,145  362,652   330,055   320,623 673,498   619,792 
Income before taxes 211,343   249,956  165,243   224,858   211,430 461,299   454,980 
Income tax expense 58,955   62,662  41,763   60,660   56,680 121,617   120,032 
Net income$152,388  $187,294 $123,480  $164,198  $154,750$339,682  $334,948 
Preferred stock dividends 6,991   6,991  6,991   6,991   6,991 13,982   13,982 
Net income applicable to common shares$145,397  $180,303 $116,489  $157,207  $147,759$325,700  $320,966 
Net income per common share - Basic$2.35  $2.93 $1.90  $2.57  $2.41$5.28  $5.26 
Net income per common share - Diluted$2.32  $2.89 $1.87  $2.53  $2.38$5.21  $5.18 
Cash dividends declared per common share$0.45  $0.45 $0.40  $0.40  $0.40$0.90  $0.80 
Weighted average common shares outstanding 61,839   61,481  61,236   61,213   61,192 61,660   61,072 
Dilutive potential common shares 926   928  1,166   964   902 901   933 
Average common shares and dilutive common shares 62,765   62,409  62,402   62,177   62,094 62,561   62,005 


TABLE 1
: LOAN PORTFOLIO MIX AND GROWTH RATES

          % Growth From
(Dollars in thousands)Jun 30,
2024
 Mar 31,
2024
 Dec 31,
2023
 Sep 30,
2023
 Jun 30,
2023
Dec 31,
2023 (1)
 Jun 30,
2023
Balance:            
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. government agencies$281,103 $193,064 $155,529 $190,511 $235,570NM 19%
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. government agencies 130,748  146,820  137,193  114,297  103,158(9) 27 
Total mortgage loans held-for-sale$411,851 $339,884 $292,722 $304,808 $338,72882% 22%
             
Core loans:            
Commercial            
Commercial and industrial$6,226,336 $6,105,968 $5,804,629 $5,894,732 $5,737,63315% 9%
Asset-based lending 1,465,867  1,355,255  1,433,250  1,396,591  1,465,8485  0 
Municipal 747,357  721,526  677,143  676,915  653,11721  14 
Leases 2,439,128  2,344,295  2,208,368  2,109,628  1,925,76721  27 
PPP loans 9,954  11,036  11,533  13,744  15,337(20) (35)
Commercial real estate            
Residential construction 55,019  57,558  58,642  51,550  51,689(12) 6 
Commercial construction 1,866,701  1,748,607  1,729,937  1,547,322  1,409,75116  32 
Land 338,831  344,149  295,462  294,901  298,99630  13 
Office 1,585,312  1,566,748  1,455,417  1,422,748  1,404,42218  13 
Industrial 2,307,455  2,190,200  2,135,876  2,057,957  2,002,74016  15 
Retail 1,365,753  1,366,415  1,337,517  1,341,451  1,304,0834  5 
Multi-family 2,988,940  2,922,432  2,815,911  2,710,829  2,696,47812  11 
Mixed use and other 1,439,186  1,437,328  1,515,402  1,519,422  1,440,652(10) (0)
Home equity 356,313  340,349  343,976  343,258  336,9747  6 
Residential real estate            
Residential real estate loans for investment 2,933,157  2,746,916  2,619,083  2,538,630  2,455,39224  19 
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. government agencies 88,503  90,911  92,780  97,911  117,024(9) (24)
Residential mortgage loans, early buy-out exercised loans guaranteed by U.S. government agencies 45,675  52,439  57,803  71,062  70,824(42) (36)
Total core loans$26,259,487 $25,402,132 $24,592,729 $24,088,651 $23,386,72714% 12%
             
Niche loans:            
Commercial            
Franchise$1,150,460 $1,122,302 $1,092,532 $1,074,162 $1,091,1645% 5%
Mortgage warehouse lines of credit 593,519  403,245  230,211  245,450  381,04395  56 
Community Advantage - homeowners association 491,722  475,832  452,734  424,054  405,0427  21 
Insurance agency lending 1,030,119  964,022  921,653  890,197  925,52014  11 
Premium Finance receivables            
U.S. property & casualty insurance 6,142,654  6,113,993  5,983,103  5,815,346  5,900,2281  4 
Canada property & casualty insurance 958,099  826,026  920,426  907,401  862,47032  11 
Life insurance 7,962,115  7,872,033  7,877,943  7,931,808  8,039,2732  (1)
Consumer and other 87,356  51,121  60,500  68,963  31,941143  173 
Total niche loans$18,416,044 $17,828,574 $17,539,102 $17,357,381 $17,636,6817% 4%
             
Total loans, net of unearned income$44,675,531 $43,230,706 $42,131,831 $41,446,032 $41,023,4087% 9%

(1) Annualized.

TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

          % Growth From
(Dollars in thousands)Jun 30,
2024
 Mar 31,
2024
 Dec 31,
2023
 Sep 30,
2023
 Jun 30,
2023
Mar 31,
2024 (1)
 Jun 30, 2023
Balance:            
Non-interest-bearing$10,031,440  $9,908,183  $10,420,401  $10,347,006  $10,604,915 5% (5)%
NOW and interest-bearing demand deposits 5,053,909   5,720,947   5,797,649   6,006,114   5,814,836 (47) (13)
Wealth management deposits (2) 1,490,711   1,347,817   1,614,499   1,788,099   1,417,984 43  5 
Money market 16,320,017   15,617,717   15,149,215   14,478,504   14,523,124 18  12 
Savings 5,882,179   5,959,774   5,790,334   5,584,294   5,321,578 (5) 11 
Time certificates of deposit 9,270,770   7,894,420   6,625,072   6,788,669   6,356,270 70  46 
Total deposits$48,049,026  $46,448,858  $45,397,170  $44,992,686  $44,038,707 14% 9%
Mix:            
Non-interest-bearing 21%  21%  23%  23%  24%   
NOW and interest-bearing demand deposits 11   12   13   13   13    
Wealth management deposits (2) 3   3   4   4   3    
Money market 34   34   33   32   33    
Savings 12   13   13   13   12    
Time certificates of deposit 19   17   14   15   15    
Total deposits 100%  100%  100%  100%  100%   

(1) Annualized.
(2) Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wintrust Investments, Chicago Deferred Exchange Company, LLC (“CDEC”), and trust and asset management customers of the Company.

TABLE 3: TIME CERTIFICATES OF DEPOSIT MATURITY/RE-PRICING ANALYSIS
As of June 30, 2024

(Dollars in thousands) Total Time
Certificates of
Deposit
 Weighted-Average
Rate of Maturing
Time Certificates
of Deposit
1-3 months $2,680,761 4.75%
4-6 months  2,863,328 4.74 
7-9 months  2,309,917 4.36 
10-12 months  1,073,537 4.25 
13-18 months  215,181 3.50 
19-24 months  67,172 2.52 
24+ months  60,874 1.90 
Total $9,270,770 4.53%


TABLE 4
: QUARTERLY AVERAGE BALANCES

  Average Balance for three months ended,
  Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands)  2024   2024   2023   2023   2023 
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents (1) $1,485,481  $1,254,332  $1,682,176  $2,053,568  $1,454,057 
Investment securities (2)  8,203,764   8,349,796   7,971,068   7,706,285   7,252,582 
FHLB and FRB stock  253,614   230,648   204,593   201,252   223,813 
Liquidity management assets (3)  9,942,859   9,834,776   9,857,837   9,961,105   8,930,452 
Other earning assets (3)(4)  15,257   15,081   14,821   17,879   17,401 
Mortgage loans held-for-sale  347,236   290,275   279,569   319,099   307,683 
Loans, net of unearned income (3)(5)  43,819,354   42,129,893   41,361,952   40,707,042   40,106,393 
Total earning assets (3)  54,124,706   52,270,025   51,514,179   51,005,125   49,361,929 
Allowance for loan and investment security losses  (360,504)  (361,734)  (329,441)  (319,491)  (302,627)
Cash and due from banks  434,916   450,267   443,989   459,819   481,510 
Other assets  3,294,066   3,244,137   3,388,348   3,236,528   3,061,141 
Total assets $57,493,184  $55,602,695  $55,017,075  $54,381,981  $52,601,953 
           
NOW and interest-bearing demand deposits $4,985,306  $5,680,265  $5,868,976  $5,815,155  $5,540,597 
Wealth management deposits  1,531,865   1,510,203   1,704,099   1,512,765   1,545,626 
Money market accounts  15,272,126   14,474,492   14,212,320   14,155,446   13,735,924 
Savings accounts  5,878,844   5,792,118   5,676,155   5,472,535   5,206,609 
Time deposits  8,546,172   7,148,456   6,645,980   6,495,906   5,603,024 
Interest-bearing deposits  36,214,313   34,605,534   34,107,530   33,451,807   31,631,780 
Federal Home Loan Bank advances  3,096,920   2,728,849   2,326,073   2,241,292   2,227,106 
Other borrowings  587,262   627,711   633,673   657,454   625,757 
Subordinated notes  410,331   437,893   437,785   437,658   437,545 
Junior subordinated debentures  253,566   253,566   253,566   253,566   253,566 
Total interest-bearing liabilities  40,562,392   38,653,553   37,758,627   37,041,777   35,175,754 
Non-interest-bearing deposits  9,879,134   9,972,646   10,406,585   10,612,009   10,908,022 
Other liabilities  1,601,485   1,536,039   1,785,667   1,644,312   1,473,459 
Equity  5,450,173   5,440,457   5,066,196   5,083,883   5,044,718 
Total liabilities and shareholders’ equity $57,493,184  $55,602,695  $55,017,075  $54,381,981  $52,601,953 
           
Net free funds/contribution (6) $13,562,314  $13,616,472  $13,755,552  $13,963,348  $14,186,175 

(1) Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(4) Other earning assets include brokerage customer receivables and trading account securities.
(5) Loans, net of unearned income, include non-accrual loans.
(6) Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.

TABLE 5: QUARTERLY NET INTEREST INCOME

  Net Interest Income for three months ended,
  Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands)  2024   2024   2023   2023   2023 
Interest income:          
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents $19,748  $16,677  $22,340  $28,022  $16,882 
Investment securities  70,346   70,228   68,812   59,737   51,795 
FHLB and FRB stock  4,974   4,478   3,792   3,896   3,544 
Liquidity management assets (1)  95,068   91,383   94,944   91,655   72,221 
Other earning assets (1)  235   198   222   291   272 
Mortgage loans held-for-sale  5,434   4,146   4,318   4,767   4,178 
Loans, net of unearned income (1)  752,117   712,587   697,093   668,183   622,939 
Total interest income $852,854  $808,314  $796,577  $764,896  $699,610 
           
Interest expense:          
NOW and interest-bearing demand deposits $32,719  $34,896  $38,124  $36,001  $29,178 
Wealth management deposits  10,294   10,461   12,076   9,350   9,097 
Money market accounts  155,100   137,984   130,252   124,742   106,630 
Savings accounts  41,063   39,071   36,463   31,784   25,603 
Time deposits  96,527   77,120   68,475   60,906   42,987 
Interest-bearing deposits  335,703   299,532   285,390   262,783   213,495 
Federal Home Loan Bank advances  24,797   22,048   18,316   17,436   17,399 
Other borrowings  8,700   9,248   9,557   9,384   8,485 
Subordinated notes  5,185   5,487   5,522   5,491   5,523 
Junior subordinated debentures  4,984   5,004   5,089   4,948   4,737 
Total interest expense $379,369  $341,319  $323,874  $300,042  $249,639 
           
Less: Fully taxable-equivalent adjustment  (2,875)  (2,801)  (2,729)  (2,496)  (2,434)
Net interest income (GAAP) (2)   470,610   464,194   469,974   462,358   447,537 
Fully taxable-equivalent adjustment  2,875   2,801   2,729   2,496   2,434 
Net interest income, fully taxable-equivalent (non-GAAP) (2)  $473,485  $466,995  $472,703  $464,854  $449,971 

(1) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(2) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.

TABLE 6: QUARTERLY NET INTEREST MARGIN

  Net Interest Margin for three months ended,
  Jun 30,
2024
 Mar 31,
2024
 Dec 31,
2023
 Sep 30,
2023
 Jun 30,
2023
Yield earned on:          
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents 5.35% 5.35% 5.27% 5.41% 4.66%
Investment securities 3.45  3.38  3.42  3.08  2.86 
FHLB and FRB stock 7.89  7.81  7.35  7.68  6.35 
Liquidity management assets 3.85  3.74  3.82  3.65  3.24 
Other earning assets 6.23  5.25  5.92  6.47  6.27 
Mortgage loans held-for-sale 6.29  5.74  6.13  5.93  5.45 
Loans, net of unearned income 6.90  6.80  6.69  6.51  6.23 
Total earning assets 6.34% 6.22% 6.13% 5.95% 5.68%
           
Rate paid on:          
NOW and interest-bearing demand deposits 2.64% 2.47% 2.58% 2.46% 2.11%
Wealth management deposits 2.70  2.79  2.81  2.45  2.36 
Money market accounts 4.08  3.83  3.64  3.50  3.11 
Savings accounts 2.81  2.71  2.55  2.30  1.97 
Time deposits 4.54  4.34  4.09  3.72  3.08 
Interest-bearing deposits 3.73  3.48  3.32  3.12  2.71 
Federal Home Loan Bank advances 3.22  3.25  3.12  3.09  3.13 
Other borrowings 5.96  5.92  5.98  5.66  5.44 
Subordinated notes 5.08  5.04  5.00  4.98  5.06 
Junior subordinated debentures 7.91  7.94  7.96  7.74  7.49 
Total interest-bearing liabilities 3.76% 3.55% 3.40% 3.21% 2.85%
           
Interest rate spread (1)(2) 2.58% 2.67% 2.73% 2.74% 2.83%
Less: Fully taxable-equivalent adjustment (0.02) (0.02) (0.02) (0.02) (0.02)
Net free funds/contribution (3) 0.94  0.92  0.91  0.88  0.83 
Net interest margin (GAAP) (2) 3.50% 3.57% 3.62% 3.60% 3.64%
Fully taxable-equivalent adjustment 0.02  0.02  0.02  0.02  0.02 
Net interest margin, fully taxable-equivalent (non-GAAP) (2) 3.52% 3.59% 3.64% 3.62% 3.66%

(1) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(2) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(3) Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.

TABLE 7: YEAR-TO-DATE AVERAGE BALANCES, AND NET INTEREST INCOME AND MARGIN

 Average Balance
for six months ended,
Interest
for six months ended,
Yield/Rate
for six months ended,
(Dollars in thousands)Jun 30,
2024
 Jun 30,
2023
Jun 30,
2024
 Jun 30,
2023
Jun 30,
2024
 Jun 30,
2023
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents (1)$1,369,906  $1,345,506 $36,425  $30,421 5.35% 4.56%
Investment securities (2) 8,276,780   7,602,707  140,574   112,288 3.42  2.98 
FHLB and FRB stock 242,131   228,687  9,452   7,224 7.85  6.37 
Liquidity management assets (3)(4)$9,888,817  $9,176,900 $186,451  $149,933 3.79% 3.29%
Other earning assets (3)(4)(5) 15,169   17,920  433   585 5.74  6.58 
Mortgage loans held-for-sale 318,756   289,426  9,580   7,706 6.04  5.37 
Loans, net of unearned income (3)(4)(6) 42,974,623   39,602,672  1,464,704   1,183,503 6.85  6.03 
Total earning assets (4)$53,197,365  $49,086,918 $1,661,168  $1,341,727 6.28% 5.51%
Allowance for loan and investment security losses (361,119)  (292,721)      
Cash and due from banks 442,591   484,964       
Other assets 3,269,102   3,060,929       
Total assets$56,547,939  $52,340,090       
          
NOW and interest-bearing demand deposits$5,332,786  $5,406,911 $67,615  $47,949 2.55% 1.79%
Wealth management deposits 1,521,034   1,854,637  20,755   21,355 2.74  2.32 
Money market accounts 14,873,309   13,138,018  293,084   174,907 3.96  2.68 
Savings accounts 5,835,481   5,019,505  80,134   41,419 2.76  1.66 
Time deposits 7,847,314   5,323,882  173,647   72,667 4.45  2.75 
Interest-bearing deposits$35,409,924  $30,742,953 $635,235  $358,297 3.61% 2.35%
Federal Home Loan Bank advances 2,912,884   2,350,309  46,845   36,534 3.23  3.13 
Other borrowings 607,487   614,410  17,948   16,338 5.94  5.36 
Subordinated notes 424,112   437,484  10,672   11,011 5.06  5.08 
Junior subordinated debentures 253,566   253,566  9,988   9,154 7.92  7.28 
Total interest-bearing liabilities$39,607,973  $34,398,722 $720,688  $431,334 3.66% 2.53%
Non-interest-bearing deposits 9,925,890   11,536,336       
Other liabilities 1,568,761   1,434,625       
Equity 5,445,315   4,970,407       
Total liabilities and shareholders’ equity$56,547,939  $52,340,090       
Interest rate spread (4)(7)      2.62% 2.98%
Less: Fully taxable-equivalent adjustment    (5,676)  (4,861)(0.03) (0.02)
Net free funds/contribution (8)$13,589,392  $14,688,196    0.94  0.76 
Net interest income/margin (GAAP) (4)   $934,804  $905,532 3.53% 3.72%
Fully taxable-equivalent adjustment    5,676   4,861 0.03  0.02 
Net interest income/margin, fully taxable-equivalent (non-GAAP) (4)    $940,480  $910,393 3.56% 3.74%

(1) Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(4) See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(5) Other earning assets include brokerage customer receivables and trading account securities.
(6) Loans, net of unearned income, include non-accrual loans.
(7) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(8) Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.

TABLE 8: INTEREST RATE SENSITIVITY

As an ongoing part of its financial strategy, the Company attempts to manage the impact of fluctuations in market interest rates on net interest income. Management measures its exposure to changes in interest rates by modeling many different interest rate scenarios.

The following interest rate scenarios display the percentage change in net interest income over a one-year time horizon assuming increases and decreases of 100 and 200 basis points. The Static Shock Scenario results incorporate actual cash flows and repricing characteristics for balance sheet instruments following an instantaneous, parallel change in market rates based upon a static (i.e. no growth or constant) balance sheet. Conversely, the Ramp Scenario results incorporate management’s projections of future volume and pricing of each of the product lines following a gradual, parallel change in market rates over twelve months. Actual results may differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies. The interest rate sensitivity for both the Static Shock and Ramp Scenario is as follows:

Static Shock Scenario+200 Basis Points +100 Basis Points -100 Basis Points -200 Basis Points
Jun 30, 20241.5% 1.0% 0.6% (0.0)%
Mar 31, 20241.9  1.4  1.5  1.6 
Dec 31, 20232.6  1.8  0.4  (0.7)
Sep 30, 20233.3  1.9  (2.0) (5.2)
Jun 30, 20235.7  2.9  (2.9) (7.9)

 

Ramp Scenario+200 Basis Points +100 Basis Points -100 Basis Points -200 Basis Points
Jun 30, 20241.2% 1.0% 0.9% 1.0%
Mar 31, 20240.8  0.6  1.3  2.0 
Dec 31, 20231.6  1.2  (0.3) (1.5)
Sep 30, 20231.7  1.2  (0.5) (2.4)
Jun 30, 20232.9  1.8  (0.9) (3.4)


As shown above, the magnitude of potential changes in net interest income in various interest rate scenarios has continued to remain relatively neutral. Given the recent unprecedented rise in interest rates, the Company has made a conscious effort to reposition its exposure to changing interest rates given the uncertainty of the future interest rate environment. To this end, management has executed various derivative instruments including collars and receive fixed swaps to hedge variable rate loan exposures and originated a higher percentage of its loan originations in longer term fixed rate loans. The Company will continue to monitor current and projected interest rates and may execute additional derivatives to mitigate potential fluctuations in the net interest margin in future periods.

TABLE 9: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

 Loans repricing or contractual maturity period
As of June 30, 2024One year or
less
 From one to
five years
 From five to fifteen years After fifteen years Total
(In thousands)    
Commercial         
Fixed rate$477,277 $3,103,539 $1,833,528 $42,066 $5,456,410
Variable rate 8,696,826  1,226      8,698,052
Total commercial$9,174,103 $3,104,765 $1,833,528 $42,066 $14,154,462
Commercial real estate         
Fixed rate$528,051 $2,517,267 $352,478 $55,075 $3,452,871
Variable rate 8,480,512  13,745  69    8,494,326
Total commercial real estate$9,008,563 $2,531,012 $352,547 $55,075 $11,947,197
Home equity         
Fixed rate$9,862 $3,413 $ $24 $13,299
Variable rate 343,014        343,014
Total home equity$352,876 $3,413 $ $24 $356,313
Residential real estate         
Fixed rate$20,300 $3,124 $29,630 $1,036,012 $1,089,066
Variable rate 77,249  385,872  1,515,148    1,978,269
Total residential real estate$97,549 $388,996 $1,544,778 $1,036,012 $3,067,335
Premium finance receivables - property & casualty         
Fixed rate$7,015,748 $85,005 $ $ $7,100,753
Variable rate         
Total premium finance receivables - property & casualty$7,015,748 $85,005 $ $ $7,100,753
Premium finance receivables - life insurance         
Fixed rate$71,207 $543,433 $4,000 $6,991 $625,631
Variable rate 7,336,484        7,336,484
Total premium finance receivables - life insurance$7,407,691 $543,433 $4,000 $6,991 $7,962,115
Consumer and other         
Fixed rate$33,887 $5,452 $9 $455 $39,803
Variable rate 47,553        47,553
Total consumer and other$81,440 $5,452 $9 $455 $87,356
          
Total per category         
Fixed rate$8,156,332 $6,261,233 $2,219,645 $1,140,623 $17,777,833
Variable rate 24,981,638  400,843  1,515,217    26,897,698
Total loans, net of unearned income$33,137,970 $6,662,076 $3,734,862 $1,140,623 $44,675,531
          
Variable Rate Loan Pricing by Index:         
SOFR tenors        $15,744,528
One- year CMT         6,176,495
Prime         3,474,480
Fed Funds         997,252
Ameribor tenors         241,682
Other U.S. Treasury tenors         124,349
Other         138,912
Total variable rate        $26,897,698

SOFR - Secured Overnight Financing Rate.
CMT - Constant Maturity Treasury Rate.
Ameribor - American Interbank Offered Rate.

Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/b3dd9b46-22f1-4593-9230-4325cca825e0

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 $12.5 billion tied to one-month SOFR and $6.2 billion tied to one-year CMT. The above chart shows:

  Basis Point (bp) Change in
  1-month
SOFR
 One- year CMT Prime 
Second Quarter 2024 1 bps6 bps0bps
First Quarter 2024 (2) 24  0 
Fourth Quarter 2023 3  (67) 0 
Third Quarter 2023 18  6  25 
Second Quarter 2023 34  76  25 


TABLE 10
: ALLOWANCE FOR CREDIT LOSSES

  Three Months EndedSix Months Ended
  Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,Jun 30, Jun 30,
(Dollars in thousands)  2024   2024   2023   2023   2023  2024   2023 
Allowance for credit losses at beginning of period $427,504  $427,612  $399,531  $387,786  $376,261 $427,612  $357,936 
Cumulative effect adjustment from the adoption of ASU 2022-02                   741 
Provision for credit losses  40,061   21,673   42,908   19,923   28,514  61,734   51,559 
Other adjustments  (19)  (31)  62   (60)  41  (50)  45 
Charge-offs:             
Commercial  9,584   11,215   5,114   2,427   5,629  20,799   8,172 
Commercial real estate  15,526   5,469   5,386   1,713   8,124  20,995   8,129 
Home equity     74      227     74    
Residential real estate  23   38   114   78     61    
Premium finance receivables - property & casualty  9,486   6,938   6,706   5,830   4,519  16,424   9,148 
Premium finance receivables - life insurance           18   134     155 
Consumer and other  137   107   148   184   110  244   263 
Total charge-offs  34,756   23,841   17,468   10,477   18,516  58,597   25,867 
Recoveries:             
Commercial  950   479   592   1,162   505  1,429   897 
Commercial real estate  90   31   92   243   25  121   125 
Home equity  35   29   34   33   37  64   72 
Residential real estate  8   2   10   1   6  10   10 
Premium finance receivables - property & casualty  3,658   1,519   1,820   906   890  5,177   2,204 
Premium finance receivables - life insurance  5   8   7        13   9 
Consumer and other  24   23   24   14   23  47   55 
Total recoveries  4,770   2,091   2,579   2,359   1,486  6,861   3,372 
Net charge-offs  (29,986)  (21,750)  (14,889)  (8,118)  (17,030) (51,736)  (22,495)
Allowance for credit losses at period end $437,560  $427,504  $427,612  $399,531  $387,786 $437,560  $387,786 
              
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:   
Commercial  0.25%  0.33%  0.14%  0.04%  0.16% 0.29%  0.12%
Commercial real estate  0.53   0.19   0.19   0.05   0.31  0.36   0.16 
Home equity  (0.04)  0.05   (0.04)  0.23   (0.04) 0.01   (0.04)
Residential real estate  0.00   0.01   0.02   0.01   (0.00) 0.00   (0.00)
Premium finance receivables - property & casualty  0.33   0.32   0.29   0.29   0.24  0.33   0.24 
Premium finance receivables - life insurance  (0.00)  (0.00)  (0.00)  0.00   0.01  (0.00)  0.00 
Consumer and other  0.56   0.42   0.58   0.65   0.45  0.49   0.58 
Total loans, net of unearned income  0.28%  0.21%  0.14%  0.08%  0.17% 0.24   0.11%
              
Loans at period end $44,675,531  $43,230,706  $42,131,831  $41,446,032  $41,023,408    
Allowance for loan losses as a percentage of loans at period end  0.81%  0.81%  0.82%  0.76%  0.74%   
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end  0.98   0.99   1.01   0.96   0.94    


TABLE 11
: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

  Three Months EndedSix Months Ended
  Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,Jun 30, Jun 30,
(In thousands)  2024   2024   2023   2023   2023  2024   2023 
Provision for loan losses $45,111  $26,159  $44,023  $20,717  $31,516 $71,270  $54,036 
Provision for unfunded lending-related commitments losses  (5,212)  (4,468)  (1,081)  (769)  (2,945) (9,680)  (2,395)
Provision for held-to-maturity securities losses  162   (18)  (34)  (25)  (57) 144   (82)
Provision for credit losses $40,061  $21,673  $42,908  $19,923  $28,514 $61,734  $51,559 
              
Allowance for loan losses $363,719  $348,612  $344,235  $315,039  $302,499    
Allowance for unfunded lending-related commitments losses  73,350   78,563   83,030   84,111   84,881    
Allowance for loan losses and unfunded lending-related commitments losses  437,069   427,175   427,265   399,150   387,380    
Allowance for held-to-maturity securities losses  491   329   347   381   406    
Allowance for credit losses $437,560  $427,504  $427,612  $399,531  $387,786    


TABLE 12
: ALLOWANCE BY LOAN PORTFOLIO

The table below summarizes the calculation of allowance for loan losses and allowance for unfunded lending-related commitments losses for the Company’s loan portfolios as well as core and niche portfolios, as of June 30, 2024, March 31, 2024 and December 31, 2023.

 As of Jun 30, 2024As of Mar 31, 2024As of Dec 31, 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$14,154,462 $181,991 1.29%$13,503,481 $166,518 1.23%$12,832,053 $169,604 1.32%
Commercial real estate:               
Construction and development 2,260,551  93,154 4.12  2,150,314  96,052 4.47  2,084,041  94,081 4.51 
Non-construction 9,686,646  130,574 1.35  9,483,123  130,000 1.37  9,260,123  129,772 1.40 
Home equity 356,313  7,242 2.03  340,349  7,191 2.11  343,976  7,116 2.07 
Residential real estate 3,067,335  8,773 0.29  2,890,266  13,701 0.47  2,769,666  13,133 0.47 
Premium finance receivables               
Property and casualty insurance 7,100,753  14,053 0.20  6,940,019  12,645 0.18  6,903,529  12,384 0.18 
Life insurance 7,962,115  693 0.01  7,872,033  685 0.01  7,877,943  685 0.01 
Consumer and other 87,356  589 0.67  51,121  383 0.75  60,500  490 0.81 
Total loans, net of unearned income$44,675,531 $437,069 0.98%$43,230,706 $427,175 0.99%$42,131,831 $427,265 1.01%
                
Total core loans (1)$26,259,487 $398,494 1.52%$25,402,132 $382,372 1.51%$24,592,729 $380,847 1.55%
Total niche loans (1) 18,416,044  38,575 0.21  17,828,574  44,803 0.25  17,539,102  46,418 0.26 
                

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

TABLE 13: LOAN PORTFOLIO AGING

(In thousands) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023
Loan Balances:          
Commercial          
Nonaccrual $51,087 $31,740 $38,940 $43,569 $40,460
90+ days and still accruing  304  27  98  200  573
60-89 days past due  16,485  30,248  19,488  22,889  22,808
30-59 days past due  36,358  77,715  85,743  35,681  48,970
Current  14,050,228  13,363,751  12,687,784  12,623,134  12,487,660
Total commercial $14,154,462 $13,503,481 $12,832,053 $12,725,473 $12,600,471
Commercial real estate          
Nonaccrual $48,289 $39,262 $35,459 $17,043 $18,483
90+ days and still accruing        1,092  
60-89 days past due  6,555  16,713  8,515  7,395  1,054
30-59 days past due  38,065  32,998  20,634  60,984  14,218
Current  11,854,288  11,544,464  11,279,556  10,859,666  10,575,056
Total commercial real estate $11,947,197 $11,633,437 $11,344,164 $10,946,180 $10,608,811
Home equity          
Nonaccrual $1,100 $838 $1,341 $1,363 $1,361
90+ days and still accruing          110
60-89 days past due  275  212  62  219  316
30-59 days past due  1,229  1,617  2,263  1,668  601
Current  353,709  337,682  340,310  340,008  334,586
Total home equity $356,313 $340,349 $343,976 $343,258 $336,974
Residential real estate          
Early buy-out loans guaranteed by U.S. government agencies (1) $134,178 $143,350 $150,583 $168,973 $187,848
Nonaccrual  18,198  17,901  15,391  16,103  13,652
90+ days and still accruing          
60-89 days past due  1,977    2,325  1,145  7,243
30-59 days past due  130  24,523  22,942  904  872
Current  2,912,852  2,704,492  2,578,425  2,520,478  2,433,625
Total residential real estate $3,067,335 $2,890,266 $2,769,666 $2,707,603 $2,643,240
Premium finance receivables - property & casualty          
Nonaccrual $32,722 $32,648 $27,590 $26,756 $19,583
90+ days and still accruing  22,427  25,877  20,135  16,253  12,785
60-89 days past due  29,925  15,274  23,236  16,552  22,670
30-59 days past due  45,927  59,729  50,437  31,919  32,751
Current  6,969,752  6,806,491  6,782,131  6,631,267  6,674,909
Total Premium finance receivables - property & casualty $7,100,753 $6,940,019 $6,903,529 $6,722,747 $6,762,698
Premium finance receivables - life insurance          
Nonaccrual $ $ $ $ $6
90+ days and still accruing        10,679  1,667
60-89 days past due  4,118  32,482  16,206  41,894  3,729
30-59 days past due  17,693  100,137  45,464  14,972  90,117
Current  7,940,304  7,739,414  7,816,273  7,864,263  7,943,754
Total Premium finance receivables - life insurance $7,962,115 $7,872,033 $7,877,943 $7,931,808 $8,039,273
Consumer and other          
Nonaccrual $3 $19 $22 $16 $4
90+ days and still accruing  121  47  54  27  28
60-89 days past due  81  16  25  196  51
30-59 days past due  366  210  165  519  146
Current  86,785  50,829  60,234  68,205  31,712
Total consumer and other $87,356 $51,121 $60,500 $68,963 $31,941
Total loans, net of unearned income          
Early buy-out loans guaranteed by U.S. government agencies (1) $134,178 $143,350 $150,583 $168,973 $187,848
Nonaccrual  151,399  122,408  118,743  104,850  93,549
90+ days and still accruing  22,852  25,951  20,287  28,251  15,163
60-89 days past due  59,416  94,945  69,857  90,290  57,871
30-59 days past due  139,768  296,929  227,648  146,647  187,675
Current  44,167,918  42,547,123  41,544,713  40,907,021  40,481,302
Total loans, net of unearned income $44,675,531 $43,230,706 $42,131,831 $41,446,032 $41,023,408

(1) Early buy-out loans are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans. 

TABLE 14: NON-PERFORMING ASSETS(1)

 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(Dollars in thousands) 2024   2024   2023   2023   2023 
Loans past due greater than 90 days and still accruing:         
Commercial$304  $27  $98  $200  $573 
Commercial real estate          1,092    
Home equity             110 
Residential real estate              
Premium finance receivables - property & casualty 22,427   25,877   20,135   16,253   12,785 
Premium finance receivables - life insurance          10,679   1,667 
Consumer and other 121   47   54   27   28 
Total loans past due greater than 90 days and still accruing 22,852   25,951   20,287   28,251   15,163 
Non-accrual loans:         
Commercial 51,087   31,740   38,940   43,569   40,460 
Commercial real estate 48,289   39,262   35,459   17,043   18,483 
Home equity 1,100   838   1,341   1,363   1,361 
Residential real estate 18,198   17,901   15,391   16,103   13,652 
Premium finance receivables - property & casualty 32,722   32,648   27,590   26,756   19,583 
Premium finance receivables - life insurance             6 
Consumer and other 3   19   22   16   4 
Total non-accrual loans 151,399   122,408   118,743   104,850   93,549 
Total non-performing loans:         
Commercial 51,391   31,767   39,038   43,769   41,033 
Commercial real estate 48,289   39,262   35,459   18,135   18,483 
Home equity 1,100   838   1,341   1,363   1,471 
Residential real estate 18,198   17,901   15,391   16,103   13,652 
Premium finance receivables - property & casualty 55,149   58,525   47,725   43,009   32,368 
Premium finance receivables - life insurance          10,679   1,673 
Consumer and other 124   66   76   43   32 
Total non-performing loans$174,251  $148,359  $139,030  $133,101  $108,712 
Other real estate owned 19,731   14,538   13,309   14,060   11,586 
Total non-performing assets$193,982  $162,897  $152,339  $147,161  $120,298 
Total non-performing loans by category as a percent of its own respective category’s period-end balance:         
Commercial 0.36%  0.24%  0.30%  0.34%  0.33%
Commercial real estate 0.40   0.34   0.31   0.17   0.17 
Home equity 0.31   0.25   0.39   0.40   0.44 
Residential real estate 0.59   0.62   0.56   0.59   0.52 
Premium finance receivables - property & casualty 0.78   0.84   0.69   0.64   0.48 
Premium finance receivables - life insurance          0.13   0.02 
Consumer and other 0.14   0.13   0.13   0.06   0.10 
Total loans, net of unearned income 0.39%  0.34%  0.33%  0.32%  0.26%
Total non-performing assets as a percentage of total assets 0.32%  0.28%  0.27%  0.26%  0.22%
Allowance for loan losses and unfunded lending-related commitments losses as a percentage of non-accrual loans 288.69%  348.98%  359.82%  380.69%  414.09%
          

(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 EndedSix Months Ended
 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,Jun 30, Jun 30,
(In thousands) 2024   2024   2023   2023   2023  2024   2023 
             
Balance at beginning of period$148,359  $139,030  $133,101  $108,712  $100,690 $139,030  $100,697 
Additions from becoming non-performing in the respective period 54,376   23,142   59,010   18,666   21,246  77,518   45,701 
Return to performing status (912)  (490)  (24,469)  (1,702)  (360) (1,402)  (840)
Payments received (9,611)  (8,336)  (10,000)  (6,488)  (12,314) (17,947)  (17,575)
Transfer to OREO and other repossessed assets (6,945)  (1,381)  (2,623)  (2,671)  (2,958) (8,326)  (2,958)
Charge-offs, net (7,673)  (14,810)  (9,480)  (3,011)  (2,696) (22,483)  (3,855)
Net change for premium finance receivables (3,343)  11,204   (6,509)  19,595   5,104  7,861   (12,458)
Balance at end of period$174,251  $148,359  $139,030  $133,101  $108,712 $174,251  $108,712 


Other Real Estate Owned

 Three Months Ended
 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands) 2024   2024   2023   2023   2023 
Balance at beginning of period$14,538  $13,309  $14,060  $11,586  $9,361 
Disposals/resolved (1,752)     (3,416)  (467)  (733)
Transfers in at fair value, less costs to sell 6,945   1,436   2,665   2,941   2,958 
Fair value adjustments    (207)         
Balance at end of period$19,731  $14,538  $13,309  $14,060  $11,586 
          
 Period End
 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
Balance by Property Type: 2024   2024   2023   2023   2023 
Residential real estate$161  $1,146  $720  $441  $318 
Commercial real estate 19,570   13,392   12,589   13,619   11,268 
Total$19,731  $14,538  $13,309  $14,060  $11,586 


TABLE 15
: NON-INTEREST INCOME

 Three Months Ended Q2 2024 compared to
Q1 2024
 Q2 2024 compared to
Q2 2023
 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,  
(Dollars in thousands) 2024   2024   2023   2023   2023  $ Change % Change $ Change % Change
Brokerage$5,588  $5,556  $5,349  $4,359  $4,404  $32  1% $1,184  27%
Trust and asset management 29,825   29,259   27,926   29,170   29,454   566  2   371  1 
Total wealth management 35,413   34,815   33,275   33,529   33,858   598  2   1,555  5 
Mortgage banking 29,124   27,663   7,433   27,395   29,981   1,461  5   (857) (3)
Service charges on deposit accounts 15,546   14,811   14,522   14,217   13,608   735  5   1,938  14 
(Losses) gains on investment securities, net (4,282)  1,326   2,484   (2,357)  0   (5,608) NM  (4,282) NM
Fees from covered call options 2,056   4,847   4,679   4,215   2,578   (2,791) (58)  (522) (20)
Trading gains (losses), net 70   677   (505)  728   106   (607) (90)  (36) (34)
Operating lease income, net 13,938   14,110   14,162   13,863   12,227   (172) (1)  1,711  14 
Other:                 
Interest rate swap fees 3,392   2,828   4,021   2,913   2,711   564  20   681  25 
BOLI 1,351   1,651   1,747   729   1,322   (300) (18)  29  2 
Administrative services 1,322   1,217   1,329   1,336   1,319   105  9   3  0 
Foreign currency remeasurement (losses) gains (145)  (1,171)  1,150   (446)  543   1,026  (88)  (688) NM
Changes in fair value on EBOs and loans held-for-investment 604   (439)  1,556   (338)  (242)  1,043  NM  846  NM
Early pay-offs of capital leases 393   430   157   461   201   (37) (9)  192  96 
Miscellaneous 22,365   37,815   14,819   16,233   14,818   (15,450) (41)  7,547  51 
Total Other 29,282   42,331   24,779   20,888   20,672   (13,049) (31)  8,610  42 
Total Non-Interest Income$121,147  $140,580  $100,829  $112,478  $113,030  $(19,433) (14)        % $8,117  7%

 

 Six Months Ended    
 Jun 30, Jun 30, $ %
(Dollars in thousands) 2024   2023 Change Change
Brokerage$11,144  $8,937 $2,207  25%
Trust and asset management 59,084   54,866  4,218  8 
Total wealth management 70,228   63,803  6,425  10 
Mortgage banking 56,787   48,245  8,542  18 
Service charges on deposit accounts 30,357   26,511  3,846  15 
(Losses) gains on investment securities, net (2,956)  1,398  (4,354) NM
Fees from covered call options 6,903   12,969  (6,066) (47)
Trading gains, net 747   919  (172) (19)
Operating lease income, net 28,048   25,273  2,775  11 
Other:       
Interest rate swap fees 6,220   5,317  903  17 
BOLI 3,002   2,673  329  12 
Administrative services 2,539   2,934  (395) (13)
Foreign currency remeasurement (losses) gains (1,316)  355  (1,671) NM
Changes in fair value on EBOs and loans held-for-investment 165   303  (138) (46)
Early pay-offs of leases 823   566  257  45 
Miscellaneous 60,180   29,533  30,647  NM
Total Other 71,613   41,681  29,932  72 
Total Non-Interest Income$261,727  $220,799 $40,928  19%

NM - Not meaningful.
BOLI - Bank-owned life insurance.

TABLE 16: MORTGAGE BANKING

 Three Months EndedSix Months Ended
(Dollars in thousands)Jun 30,
2024
 Mar 31,
2024
 Dec 31,
2023
 Sep 30,
2023
 Jun 30,
2023
Jun 30,
2024
 Jun 30,
2023
Originations:            
Retail originations$544,394  $331,504  $315,637  $408,761  $406,888 $875,898  $663,025 
Veterans First originations 177,792   144,109   123,564   163,856   171,158  321,901   287,362 
Total originations for sale (A)$722,186  $475,613  $439,201  $572,617  $578,046 $1,197,799  $950,387 
Originations for investment 275,331   169,246   124,974   137,622   184,795  444,577   315,975 
Total originations$997,517  $644,859  $564,175  $710,239  $762,841 $1,642,376  $1,266,362 
             
As a percentage of originations for sale:            
Retail originations 75%  70%  72%  71%  70% 73%  70%
Veterans First originations 25   30   28   29   30  27   30 
             
Purchases 83%  75%  85%  84%  84% 80%  82%
Refinances 17   25   15   16   16  20   18 
             
Production Margin:            
Production revenue (B) (1)$14,990  $13,435  $6,798  $13,766  $11,846 $28,425  $20,467 
             
Total originations for sale (A)$722,186  $475,613  $439,201  $572,617  $578,046 $1,197,799  $950,387 
Add: Current period end mandatory interest rate lock commitments to fund originations for sale (2) 222,738   207,775   119,624   150,713   196,246  222,738   196,246 
Less: Prior period end mandatory interest rate lock commitments to fund originations for sale (2) 207,775   119,624   150,713   196,246   184,168  119,624   113,303 
Total mortgage production volume (C)$737,149  $563,764  $408,112  $527,084  $590,124 $1,300,913  $1,033,330 
             
Production margin (B / C) 2.03%  2.38%  1.67%  2.61%  2.01% 2.19%  1.98%
             
Mortgage Servicing:            
Loans serviced for others (D)$12,211,027  $12,051,392  $12,007,165  $11,885,531  $11,752,223    
MSRs, at fair value (E) 204,610   201,044   192,456   210,524   200,692    
Percentage of MSRs to loans serviced for others (E / D) 1.68%  1.67%  1.60%  1.77%  1.71%   
Servicing income$10,586  $10,498  $10,286  $10,191  $11,034 $21,084  $23,086 
             
Components of MSR:            
MSR - changes in fair value model assumptions$877  $7,595  $(19,634) $4,723  $2,715 $8,472  $(4,238)
Changes in fair value of derivative contract held as an economic hedge, net (772)  (2,577)  3,541   (2,481)  (726) (3,349)  220 
MSR valuation adjustment, net of changes in fair value of derivative contract held as an economic hedge$105  $5,018  $(16,093) $2,242  $1,989 $5,123  $(4,018)
MSR - current period capitalization 8,223   5,379   5,077   9,706   8,720  13,602   13,827 
MSR - collection of expected cash flows - paydowns (1,504)  (1,444)  (1,572)  (1,492)  (1,432) (2,948)  (3,220)
MSR - collection of expected cash flows - payoffs and repurchases (4,030)  (2,942)  (1,939)  (3,105)  (3,611) (6,972)  (5,732)
MSR Activity$2,794  $6,011  $(14,527) $7,351  $5,666 $8,805  $857 
             
Summary of Mortgage Banking Revenue:            
Production revenue (1)$14,990  $13,435  $6,798  $13,766  $11,846 $28,425  $20,467 
Servicing income 10,586   10,498   10,286   10,191   11,034  21,084   23,086 
MSR activity 2,794   6,011   (14,527)  7,351   5,666  8,805   857 
Changes in fair value of early buy-out loans guaranteed by U.S. government agencies 642   (2,190)  4,856   (4,245)  1,508  (1,548)  3,806 
Other revenue 112   (91)  20   332   (73) 21   29 
Total mortgage banking revenue$29,124  $27,663  $7,433  $27,395  $29,981 $56,787  $48,245 
             
Changes in fair value on EBOs and loans held-for-investment$604  $(439) $1,556  $(338) $(242)$165  $303 

(1) Production revenue represents revenue earned from the origination and subsequent sale of mortgages, including gains on loans sold and fees from originations, changes in other related financial instruments carried at fair value, processing and other related activities, and excludes servicing fees, changes in the fair value of servicing rights and changes to the mortgage recourse obligation and other non-production revenue.
(2) Certain volume adjusted for the estimated pull-through rate of the loan, which represents the Company’s best estimate of the likelihood that a committed loan will ultimately fund.

TABLE 17: NON-INTEREST EXPENSE

 Three Months Ended Q2 2024 compared to
Q1 2024
 Q2 2024 compared to
Q2 2023
 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,  
(Dollars in thousands) 2024   2024  2023   2023  2023 $ Change % Change $ Change % Change
Salaries and employee benefits:                 
Salaries$113,860  $112,172 $111,484  $111,303 $107,671 $1,688  2% $6,189  6%
Commissions and incentive compensation 52,151   51,001  48,974   48,817  44,511  1,150  2   7,640  17 
Benefits 32,530   32,000  33,513   32,218  32,741  530  2   (211) (1)
Total salaries and employee benefits 198,541   195,173  193,971   192,338  184,923  3,368  2   13,618  7 
Software and equipment 29,231   27,731  27,779   25,951  26,205  1,500  5   3,026  12 
Operating lease equipment 10,834   10,683  10,694   12,020  9,816  151  1   1,018  10 
Occupancy, net 19,585   19,086  18,102   21,304  19,176  499  3   409  2 
Data processing 9,503   9,292  8,892   10,773  9,726  211  2   (223) (2)
Advertising and marketing 17,436   13,040  17,166   18,169  17,794  4,396  34   (358) (2)
Professional fees 9,967   9,553  8,768   8,887  8,940  414  4   1,027  11 
Amortization of other acquisition-related intangible assets 1,122   1,158  1,356   1,408  1,499  (36) (3)  (377) (25)
FDIC insurance 10,429   9,381  9,303   9,748  9,008  1,048  11   1,421  16 
FDIC insurance - special assessment    5,156  34,374       (5,156) NM    NM
OREO expense, net (259)  392  (1,559)  120  118  (651) NM  (377) NM
Other:                 
Lending expenses, net of deferred origination costs 5,335   5,078  5,330   4,777  7,890  257  5   (2,555) (32)
Travel and entertainment 5,340   4,597  5,754   5,449  5,401  743  16   (61) (1)
Miscellaneous 23,289   22,825  22,722   19,111  20,127  464  2   3,162  16 
Total other 33,964   32,500  33,806   29,337  33,418  1,464  5   546  2 
Total Non-Interest Expense$340,353  $333,145 $362,652  $330,055 $320,623 $7,208  2% $19,730  6%

 

  Six Months Ended   
  Jun 30, Jun 30,$ %
(Dollars in thousands)  2024  2023 Change Change
Salaries and employee benefits:       
Salaries $226,032 $216,025 $10,007  5%
Commissions and incentive compensation  103,152  84,310  18,842  22 
Benefits  64,530  61,369  3,161  5 
Total salaries and employee benefits  393,714  361,704  32,010  9 
Software and equipment  56,962  50,902  6,060  12 
Operating lease equipment  21,517  19,649  1,868  10 
Occupancy, net  38,671  37,662  1,009  3 
Data processing  18,795  19,135  (340) (2)
Advertising and marketing  30,476  29,740  736  2 
Professional fees  19,520  17,103  2,417  14 
Amortization of other acquisition-related intangible assets  2,280  2,734  (454) (17)
FDIC insurance  19,810  17,677  2,133  12 
FDIC insurance - special assessment  5,156    5,156  NM
OREO expense, net  133  (89) 222  NM
Other:       
Lending expenses, net of deferred origination costs  10,413  10,989  (576) (5)
Travel and entertainment  9,937  9,991  (54) (1)
Miscellaneous  46,114  42,595  3,519  8 
Total other  66,464  63,575  2,889  5 
Total Non-Interest Expense $673,498 $619,792 $53,706  9%

NM - Not meaningful.

TABLE 18: SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES/RATIOS

The accounting and reporting policies of Wintrust conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company’s performance. These include taxable-equivalent net interest income (including its individual components), taxable-equivalent net interest margin (including its individual components), the taxable-equivalent efficiency ratio, tangible common equity ratio, tangible book value per common share, return on average tangible common equity, and pre-tax income, excluding provision for credit losses. Management believes that these measures and ratios provide users of the Company’s financial information a more meaningful view of the performance of the Company’s interest-earning assets and interest-bearing liabilities and of the Company’s operating efficiency. Other financial holding companies may define or calculate these measures and ratios differently.

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax rates effective as of the end of the period. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a fully taxable-equivalent basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses), measures how much it costs to produce one dollar of revenue. Securities gains or losses are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity ratio and tangible book value per common share as useful measurements of the Company’s equity. The Company references the return on average tangible common equity as a measurement of profitability. Management considers pre-tax income, excluding provision for credit losses, as a useful measurement of the Company’s core net income.

 Three Months EndedSix Months Ended
 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,Jun 30, Jun 30,
(Dollars and shares in thousands) 2024   2024   2023   2023   2023  2024   2023 
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:   
(A) Interest Income (GAAP)$849,979  $805,513  $793,848  $762,400  $697,176 $1,655,492  $1,336,866 
Taxable-equivalent adjustment:            
- Loans 2,305   2,246   2,150   1,923   1,882  4,551   3,754 
- Liquidity Management Assets 567   550   575   572   551  1,117   1,102 
- Other Earning Assets 3   5   4   1   1  8   5 
(B) Interest Income (non-GAAP)$852,854  $808,314  $796,577  $764,896  $699,610 $1,661,168  $1,341,727 
(C) Interest Expense (GAAP) 379,369   341,319   323,874   300,042   249,639  720,688   431,334 
(D) Net Interest Income (GAAP) (A minus C)$470,610  $464,194  $469,974  $462,358  $447,537 $934,804  $905,532 
(E) Net Interest Income (non-GAAP) (B minus C)$473,485  $466,995  $472,703  $464,854  $449,971 $940,480  $910,393 
Net interest margin (GAAP) 3.50%  3.57%  3.62%  3.60%  3.64% 3.53%  3.72%
Net interest margin, fully taxable-equivalent (non-GAAP) 3.52   3.59   3.64   3.62   3.66  3.56   3.74 
(F) Non-interest income$121,147  $140,580  $100,829  $112,478  $113,030 $261,727  $220,799 
(G) (Losses) gains on investment securities, net (4,282)  1,326   2,484   (2,357)  0  (2,956)  1,398 
(H) Non-interest expense 340,353   333,145   362,652   330,055   320,623  673,498   619,792 
Efficiency ratio (H/(D+F-G)) 57.10%  55.21%  63.81%  57.18%  57.20% 56.15%  55.10%
Efficiency ratio (non-GAAP) (H/(E+F-G)) 56.83   54.95   63.51   56.94   56.95  55.88   54.86 
 Three Months EndedSix Months Ended
 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,Jun 30, Jun 30,
(Dollars and shares in thousands) 2024   2024   2023   2023   2023  2024   2023 
Reconciliation of Non-GAAP Tangible Common Equity Ratio:   
Total shareholders’ equity (GAAP)$5,536,628  $5,436,400  $5,399,526  $5,015,613  $5,041,912    
Less: Non-convertible preferred stock (GAAP) (412,500)  (412,500)  (412,500)  (412,500)  (412,500)   
Less: Intangible assets (GAAP) (676,562)  (677,911)  (679,561)  (680,353)  (682,327)   
(I) Total tangible common shareholders’ equity (non-GAAP)$4,447,566  $4,345,989  $4,307,465  $3,922,760  $3,947,085    
(J) Total assets (GAAP)$59,781,516  $57,576,933  $56,259,934  $55,555,246  $54,286,176    
Less: Intangible assets (GAAP) (676,562)  (677,911)  (679,561)  (680,353)  (682,327)   
(K) Total tangible assets (non-GAAP)$59,104,954  $56,899,022  $55,580,373  $54,874,893  $53,603,849    
Common equity to assets ratio (GAAP) (L/J) 8.6%  8.7%  8.9%  8.3%  8.5%   
Tangible common equity ratio (non-GAAP) (I/K) 7.5   7.6   7.7   7.1   7.4    

 

Reconciliation of Non-GAAP Tangible Book Value per Common Share:   
Total shareholders’ equity$5,536,628  $5,436,400  $5,399,526  $5,015,613  $5,041,912    
Less: Preferred stock (412,500)  (412,500)  (412,500)  (412,500)  (412,500)   
(L) Total common equity$5,124,128  $5,023,900  $4,987,026  $4,603,113  $4,629,412    
(M) Actual common shares outstanding 61,760   61,737   61,244   61,222   61,198    
Book value per common share (L/M)$82.97  $81.38  $81.43  $75.19  $75.65    
Tangible book value per common share (non-GAAP) (I/M) 72.01   70.40   70.33   64.07   64.50    
             
Reconciliation of Non-GAAP Return on Average Tangible Common Equity:   
(N) Net income applicable to common shares$145,397  $180,303  $116,489  $157,207  $147,759 $325,700  $320,966 
Add: Intangible asset amortization 1,122   1,158   1,356   1,408   1,499  2,280   2,734 
Less: Tax effect of intangible asset amortization (311)  (291)  (343)  (380)  (402) (602)  (722)
After-tax intangible asset amortization$811  $867  $1,013  $1,028  $1,097 $1,678  $2,012 
(O) Tangible net income applicable to common shares (non-GAAP)$146,208  $181,170  $117,502  $158,235  $148,856 $327,378  $322,978 
Total average shareholders’ equity$5,450,173  $5,440,457  $5,066,196  $5,083,883  $5,044,718 $5,445,315  $4,970,407 
Less: Average preferred stock (412,500)  (412,500)  (412,500)  (412,500)  (412,500) (412,500)  (412,500)
(P) Total average common shareholders’ equity$5,037,673  $5,027,957  $4,653,696  $4,671,383  $4,632,218 $5,032,815  $4,557,907 
Less: Average intangible assets (677,207)  (678,731)  (679,812)  (681,520)  (682,561) (677,969)  (678,924)
(Q) Total average tangible common shareholders’ equity (non-GAAP)$4,360,466  $4,349,226  $3,973,884  $3,989,863  $3,949,657 $4,354,846  $3,878,983 
Return on average common equity, annualized (N/P) 11.61%  14.42%  9.93%  13.35%  12.79% 13.01%  14.20%
Return on average tangible common equity, annualized (non-GAAP) (O/Q) 13.49   16.75   11.73   15.73   15.12  15.12   16.79 
             
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:     
Income before taxes$211,343  $249,956  $165,243  $224,858  $211,430 $461,299  $454,980 
Add: Provision for credit losses 40,061   21,673   42,908   19,923   28,514  61,734   51,559 
Pre-tax income, excluding provision for credit losses (non-GAAP)$251,404  $271,629  $208,151  $244,781  $239,944 $523,033  $506,539 

 

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;
  • 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; 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, July 18, 2024 at 10:00 a.m. (CDT) regarding second quarter and year-to-date 2024 earnings results. Individuals interested in participating in the call by addressing questions to management should register for the call to receive the dial-in numbers and unique PIN at the Conference Call Link included within the Company’s press release dated June 28, 2024 available at the Investor Relations, Investor News and Events, Press Releases link on its website at https://www.wintrust.com. A separate simultaneous audio-only webcast link is included within the press release referenced above. Registration for and a replay of the audio-only webcast with an accompanying slide presentation will be available at https://www.wintrust.com, Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the second quarter and year-to-date 2024 earnings press release will also be available on the home page of the Company’s website at https://www.wintrust.com and at the Investor Relations, Investor News and Events, Press Releases link on its website.

FOR MORE INFORMATION CONTACT:
Timothy S. Crane, President & Chief Executive Officer
David A. Dykstra, Vice Chairman & Chief Operating Officer
(847) 939-9000
Web site address: www.wintrust.com



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