Core Viewpoint - Wintrust Financial Corporation has announced a public offering of 17 million depositary shares, aiming for gross proceeds of $425 million, with each share representing a 1/1,000th interest in its preferred stock [1][2]. Group 1: Offering Details - The offering consists of 17 million depositary shares priced at $25.00 each, totaling gross proceeds of $425 million before expenses [1]. - Each depositary share represents a 1/1,000th interest in Wintrust's 7.875% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series F [1]. - The expected closing date for the offering is May 22, 2025, pending customary closing conditions [1]. Group 2: Use of Proceeds - Wintrust plans to use the net proceeds for general corporate purposes, which may include redeeming outstanding shares of Series D and Series E preferred stock, subject to Federal Reserve approval [2]. Group 3: Listing and Management - Wintrust intends to list the depositary shares on The Nasdaq Global Select Market under the symbol "WTFCN" [2]. - RBC Capital Markets is the sole book-running manager, with Keefe, Bruyette & Woods, Piper Sandler, and US Bancorp acting as co-managers for the offering [2]. Group 4: Company Overview - Wintrust is a financial holding company with over 200 retail banking locations across several states, providing a range of banking and non-banking services [5]. - The company operates under a philosophy of offering large bank resources while maintaining a community banking experience [5].

Financial Performance - For the three months ended March 31, 2025, the company reported net interest income of $526,474,000, an increase from $464,194,000 for the same period in 2024, representing a growth of 13.4%[88] - The total assets at the end of the period were $65,870,066,000, up from $57,576,933,000 as of March 31, 2024, indicating a year-over-year increase of 14.0%[88] - The company recorded a net income of $189,039,000 for the three months ended March 31, 2025, compared to $187,294,000 for the same period in 2024, reflecting a slight increase of 0.9%[88] - Non-interest income for the three months ended March 31, 2025, was $116,634,000, compared to $140,580,000 in the same period of 2024, showing a decrease of 17.0%[88] - The company reported total non-interest expenses of $366,090,000 for the three months ended March 31, 2025, compared to $333,145,000 for the same period in 2024, marking an increase of 9.9%[88] - The net income applicable to common shares for Q1 2025 was $182,048,000, compared to $180,303,000 in Q1 2024, reflecting a slight increase of 1%[168] - Basic earnings per share decreased from $2.93 in Q1 2024 to $2.73 in Q1 2025, a decline of 6.8%[168] Derivative and Risk Management - The company utilized interest rate derivatives, including swaps and collars, to manage interest rate risk, with cash flow hedges designated for variable rate loans[96] - As of March 31, 2025, the total fair value of derivatives was $204,257,000, compared to $200,027,000 as of December 31, 2024, indicating a slight increase of 1.1%[95] - Interest rate derivatives designated as cash flow hedges amounted to $44,304,000 as of March 31, 2025, up from $17,330,000 as of December 31, 2024, reflecting a significant increase of 156.1%[95] - The company had interest rate lock commitments with an aggregate notional amount of approximately $242.5 million as of March 31, 2025[109] - The company actively manages counterparty credit risk through established exposure limits and ongoing financial performance monitoring[118] - As of March 31, 2025, there were no derivatives in a net liability position subject to cross-default provisions[120] Asset Valuation and Fair Value Measurements - The company classified $121.8 million of municipal securities as Level 3, with a focus on equivalent rating, yield, and other pricing terms for valuation[128] - The fair value of mortgage servicing rights (MSRs) was classified as Level 3, with a total of $196.3 million and a weighted average discount rate of 10.94%[134] - The fair value of derivative assets as of March 31, 2025, was $196.696 million, while derivative liabilities stood at $248.933 million, indicating a net credit exposure of $62.399 million[122] - The total fair value of available-for-sale securities was $5,351.0 million, with Level 2 assets comprising $4,661.7 million[139] - The total fair value of derivative assets was $204.3 million as of March 31, 2025, with Level 2 assets at $198.8 million[139] Stock and Compensation - The company recognized stock-based compensation expense of $10.4 million in Q1 2025, compared to $9.2 million in Q1 2024[160] - As of March 31, 2025, there were approximately 347,000 shares available for future grants under the Company Stock Incentive Plans[159] - The intrinsic value of stock options outstanding at March 31, 2025, was $384,000, with a weighted average strike price of $44.81[161] - The intrinsic value of options exercised increased significantly from approximately $50,000 in Q1 2024 to $467,000 in Q1 2025, representing a 834% increase[163] - The number of outstanding restricted shares increased from 829,154 in Q1 2024 to 926,067 in Q1 2025, a growth of 11.7%[164] Regulatory and Market Risks - The Company faces competitive pressures in the financial services sector, which may lead to a loss of market share and reduced income from deposits, loans, and advisory fees[275] - There are risks associated with the Company's ability to identify and complete favorable acquisitions, which could adversely affect profitability[275] - The Company may experience increased costs due to protecting customers from the impact of stolen debit card information[275] - The Company is subject to potential reputational harm and customer loss due to technological changes allowing consumers to complete financial transactions without a bank[275] - Regulatory changes may impact the Company's ability to market products and operate profitably, particularly in the mortgage business[275] - The Company may face increased compliance costs and heightened regulatory capital requirements due to changes in the regulatory environment[275] Other Financial Metrics - The accumulated other comprehensive income improved from a loss of $508,335,000 at the beginning of 2025 to a loss of $410,015,000 by March 31, 2025[165] - The company reported a net other comprehensive income of $98,320,000 for the period ending March 31, 2025, compared to a net loss of $123,917,000 for the same period in 2024[165] - The weighted average common shares outstanding increased from 61,481 in Q1 2024 to 66,726 in Q1 2025, an increase of 8.5%[168]

Group 1 - The article expresses concerns about a slowdown in demand for credit and the overvaluation of Wintrust Financial Corporation (WTFC) [1] - WTFC has experienced a decline of 17% in its stock price since the previous analysis [1] Group 2 - The author emphasizes a preference for fundamental analysis over technical analysis, focusing on actual company performance rather than stock price movements [1]

Financial Data and Key Metrics Changes - The company reported quarterly net income of $189 million and record net interest income of $526 million, despite having two fewer business days compared to the prior period [6][36] - Loans grew by over $650 million and deposits increased by over $1.1 billion, with a net interest margin of 3.56%, which is five basis points higher than the previous quarter [7][11] - Charge-offs for the quarter decreased to 11 basis points, and the provision for credit losses was $24 million, consistent with prior quarters [8][9] Business Line Data and Key Metrics Changes - Loan growth was 6% on an annualized basis, while deposit growth was approximately 8% on an annualized basis [11] - Non-interest income was relatively stable, totaling $116.6 million, with increases in net security gains and fees from covered call options offset by lower wealth management revenue [17] - Non-interest expenses totaled $366.1 million, down approximately $2.4 million from the prior quarter, primarily due to lower salary and employee benefit expenses [18][19] Market Data and Key Metrics Changes - Non-interest bearing deposits represented 21% of total deposits at the end of the quarter, remaining stable over the last five quarters [12] - The company anticipates strong loan growth in the second quarter, particularly in the premium finance segment, which is expected to grow close to $1 billion [26] Company Strategy and Development Direction - The company announced an increase in its dividend to $2 per share on an annualized basis and continues to grow its capital ratio, with a CET1 ratio of slightly over 10% [36] - The management emphasized the importance of differentiated client service and maintaining a strong local presence to navigate economic uncertainties [40] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is uncertainty in the market, clients remain generally encouraged about the local economy and their ability to perform normally [45] - The company is focused on proactive communication with clients to address concerns related to economic conditions, tariffs, and funding cuts [34][46] Other Important Information - The company received 14 Coalition Greenwich Awards and was recognized for best customer service in Illinois for the fourth consecutive year [36] - The tangible book value per common share increased to $78.83 compared to $75.39 in the prior quarter [23] Q&A Session Summary Question: How prevalent is uncertainty from borrowers and its impact on growth outlook? - Management acknowledged that borrowers are cautious but remain generally encouraged about the local economy, maintaining their loan growth expectations [45][46] Question: Can you walk us through the thought process on reserve changes? - The management explained that while the baseline economic scenario improved, they implemented a qualitative overlay due to spikes in credit spreads and equity market factors at the end of the quarter [52][69] Question: Any changes in competitive pricing on new home production? - Management noted that competition remains rational, with slight declines in rates from competitors, but they expect to balance this with strong loan growth [58][60] Question: How is new client acquisition in wealth management going? - The company is transitioning to a new platform that is expected to improve capabilities for financial advisors, which should enhance growth in the wealth management business [72][73] Question: Thoughts on M&A and growth through acquisition? - Management indicated ongoing M&A conversations and expressed confidence in their ability to pursue attractive acquisition opportunities [76] Question: How should we think about the source of deposit growth going forward? - Management expects to continue growing deposits to match loan growth, with a stable mix of commercial and consumer relationships [82][84]

Financial Data and Key Metrics Changes - The company reported quarterly net income of $189 million and record net interest income of $526 million, despite having two fewer business days compared to the prior period [5] - The net interest margin increased to 3.56%, up five basis points from the previous quarter, reflecting disciplined loan and deposit pricing [6][11] - Loans grew by over $650 million and deposits increased by over $1.1 billion during the quarter [5][9] Business Line Data and Key Metrics Changes - Loan growth was 6% on an annualized basis, consistent with prior guidance, while deposit growth was approximately 8% on an annualized basis [9][10] - Noninterest income was relatively stable, totaling $116.6 million, with increases in net security gains and fees from covered call options offset by lower wealth management revenue [13] - Noninterest expenses totaled $366.1 million, down approximately $2.4 million from the prior quarter, primarily due to lower salary and employee benefit expenses [14] Market Data and Key Metrics Changes - Nonperforming loans (NPLs) as a percentage of total loans decreased slightly from 36 basis points to 35 basis points, indicating stable credit quality [19] - Charge-offs for the quarter were $12.6 million or 11 basis points, down from $15.9 million or 13 basis points in the previous quarter [19] Company Strategy and Development Direction - The company announced an increase in its dividend to $2 per share on an annualized basis and continues to grow its capital ratio, with the CET1 ratio ending the quarter at slightly over 10% [24] - The management emphasized a focus on differentiated client service and maintaining a strong competitive position in the market [26][27] Management's Comments on Operating Environment and Future Outlook - Management noted a fair amount of uncertainty in the market, which causes clients to pause before making major investments, but they remain optimistic about loan growth in the second quarter [26][27] - The company is committed to proactive engagement with clients to navigate periods of uncertainty and believes that its strong underwriting standards will mitigate potential impacts from economic challenges [22][23] Other Important Information - The company received 14 Coalition Greenwich Awards for performance with commercial clients and was recognized for best customer service in Illinois for the fourth consecutive year [25] - The management highlighted the importance of client feedback in improving service levels and maintaining competitive advantage [25] Q&A Session Summary Question: How prevalent is uncertainty from borrowers, and is it impacting growth outlook? - Management acknowledged that borrowers are cautious and pausing due to uncertainty but remain encouraged about the local economy and do not expect to change loan growth expectations [32][34] Question: Can you walk through the thought process on reserve changes? - The management explained that while the baseline economic scenario improved, they implemented an uncertainty overlay due to spikes in credit spreads and equity market factors at the end of the quarter [36][38] Question: How should we think about the source of deposit growth going forward? - The company plans to grow deposits to match loan growth, maintaining a stable mix and focusing on adding new clients [72][74]

Financial Data and Key Metrics Changes - The company reported quarterly net income of $189 million and record net interest income of $526 million, despite having two fewer business days compared to the prior period [6][36] - Loans grew by over $650 million and deposits increased by over $1.1 billion, with a net interest margin of 3.56%, which is five basis points higher than the previous quarter [7][11] - Charge-offs for the quarter decreased to 11 basis points, and the provision for credit losses was $24 million, consistent with prior quarters [8][9] Business Line Data and Key Metrics Changes - Loan growth was 6% on an annualized basis, while deposit growth was approximately 8% on an annualized basis [11] - Non-interest income was relatively stable, totaling $116.6 million, with increases in net security gains and fees from covered call options offset by lower wealth management revenue [17] - Non-interest expenses totaled $366.1 million, down approximately $2.4 million from the prior quarter, primarily due to lower salary and employee benefit expenses [18][19] Market Data and Key Metrics Changes - Non-interest bearing deposits represented 21% of total deposits at the end of the quarter, remaining stable over the last five quarters [12] - The company anticipates strong loan growth in the second quarter, particularly in the premium finance segment, which is expected to grow close to $1 billion [26] Company Strategy and Development Direction - The company announced an increase in its dividend to $2 per share on an annualized basis and continues to grow its capital ratio steadily [36] - The management emphasized a focus on differentiated client service and maintaining a stable net interest margin despite economic uncertainties [40] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is uncertainty in the market, clients remain generally encouraged about the local economy and their ability to perform normally [45] - The company is committed to proactive engagement with clients to navigate periods of uncertainty and believes that its strong underwriting standards will limit the impact of macroeconomic challenges [34][40] Other Important Information - The company received 14 Coalition Greenwich Awards and was recognized for best customer service in Illinois for the fourth consecutive year [36] - The tangible book value per common share increased to $78.83 compared to $75.39 in the prior quarter [23] Q&A Session Summary Question: How prevalent is uncertainty from borrowers and its impact on growth outlook? - Management acknowledged that borrowers are cautious but remain generally encouraged about the local economy, maintaining their loan growth expectations [45][46] Question: Can you walk us through the thought process on reserve changes? - The management explained that while the baseline economic scenario improved, they implemented a qualitative overlay due to spikes in credit spreads and equity market factors at the end of the quarter [52][69] Question: Any changes in competitive pricing on new home production? - Management noted that competition remains rational, with slight declines in rates, but they are confident in their market position [58][60] Question: How is new client acquisition in wealth management going? - Management indicated that they are in the process of switching platforms to enhance capabilities, expecting improvement in the wealth management business moving forward [72] Question: Thoughts on M&A and growth through acquisition? - Management expressed confidence in their ability to pursue M&A opportunities and indicated they have the financial resources to do so [76]

Core Insights - Wintrust Financial (WTFC) reported revenue of $643.11 million for Q1 2025, a year-over-year increase of 6.3% and a slight surprise of +0.01% over the Zacks Consensus Estimate of $643.03 million [1] - The EPS for the quarter was $2.69, down from $2.89 a year ago, with a surprise of +6.75% compared to the consensus estimate of $2.52 [1] Financial Performance Metrics - Efficiency Ratio was reported at 57.2%, slightly better than the estimated 57.6% [4] - Net Interest Margin remained stable at 3.5%, matching the analyst estimate [4] - Total earning assets averaged $60.34 billion, slightly below the estimated $60.58 billion [4] - Tier 1 leverage ratio was reported at 9.6%, in line with analyst expectations [4] - Net charge-offs to average loan ratio was 0.1%, better than the estimated 0.2% [4] - Total Non-Interest Income was $116.63 million, below the estimated $127.46 million [4] - Net interest income (FTE) was $529.37 million, exceeding the average estimate of $524.12 million [4] - Net Interest Income was reported at $526.47 million, slightly above the estimated $523.72 million [4] - Service charges on deposit accounts were $19.36 million, surpassing the estimate of $17.60 million [4] - Wealth management income was $34.04 million, below the estimated $39.13 million [4] - Mortgage banking income was $20.53 million, slightly below the estimate of $21.37 million [4] - Operating lease income, net, was reported at $15.29 million, in line with the estimate of $15.28 million [4] Stock Performance - Wintrust shares have returned -9.6% over the past month, compared to the Zacks S&P 500 composite's -5.6% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Company Performance - Wintrust Financial (WTFC) reported quarterly earnings of $2.69 per share, exceeding the Zacks Consensus Estimate of $2.52 per share, but down from $2.89 per share a year ago, representing an earnings surprise of 6.75% [1] - The company posted revenues of $643.11 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.01% and up from $604.77 million year-over-year [2] - Over the last four quarters, Wintrust has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Outlook - Wintrust shares have declined approximately 17.8% since the beginning of the year, compared to a decline of 10.2% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $2.55 on revenues of $657.5 million, and for the current fiscal year, it is $10.26 on revenues of $2.65 billion [7] Industry Context - The Zacks Industry Rank for Banks - Midwest is currently in the top 12% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

Financial Performance - Wintrust Financial Corporation reported record quarterly net income of $189.0 million, or $2.69 per diluted common share, for Q1 2025, compared to $185.4 million, or $2.63 per diluted common share in Q4 2024[2]. - Net income for Q1 2025 was $189,039,000, a slight increase from $185,362,000 in Q4 2024, showing a growth of 0.9%[55]. - Net income applicable to common shares was $182,048,000, compared to $178,371,000 in the previous quarter, reflecting an increase of 3.8%[55]. - The effective tax rate was 25.30% in Q1 2025, down from 26.76% in Q4 2024, influenced by fluctuations in share-based compensation[41]. - The company declared cash dividends of $0.50 per common share, an 11% increase from Q4 2024[48]. Loan and Deposit Growth - Total loans increased by $653 million, or 6% annualized, while total deposits increased by approximately $1.1 billion, or 8% annualized in Q1 2025[4]. - Total loans reached $48.71 billion, up 6% from Q4 2024 and 13% from Q1 2024[48]. - Total deposits increased to $53.57 billion, an 8% increase from Q4 2024 and a 15% increase from Q1 2024[48]. - The company's loans-to-deposits ratio ended the quarter at 90.9%, indicating a strong liquidity position[4]. - Core loans increased by 4% to $29,108,500,000 compared to December 31, 2024, reflecting a 15% growth year-over-year[56]. Interest Income and Expenses - Net interest income rose to $526.5 million in Q1 2025, up from $525.1 million in Q4 2024, supported by an increase in net interest margin to 3.54%[5]. - Total interest income for Q1 2025 was $886,965,000, a decrease of 2.7% from $913,501,000 in Q4 2024[55]. - Interest expense decreased to $360,491,000 in Q1 2025 from $388,353,000 in Q4 2024, representing a decline of 7.2%[55]. - Net interest income after provision for credit losses was $502,511,000, compared to $508,169,000 in the previous quarter, reflecting a decrease of 1.3%[55]. - The net interest margin for the three months ended March 31, 2025, was 3.54%, an increase from 3.49% in the previous quarter[67]. Non-Interest Income - Non-interest income totaled $116.6 million in Q1 2025, an increase of $3.2 million compared to $113.5 million in Q4 2024[30]. - Total non-interest income for Q1 2025 was $116,634 thousand, a 3% increase compared to $113,451 thousand in Q4 2024, but a 17% decrease from $140,580 thousand in Q1 2024[88]. - Brokerage income fell to $4,757 thousand, down 11% from $5,328 thousand in Q4 2024 and down 14% from $5,556 thousand in Q1 2024[88]. - Trust and asset management income decreased by 12% to $29,285 thousand compared to $33,447 thousand in Q4 2024[88]. - Gains on investment securities improved significantly to $3,196 thousand from a loss of $2,835 thousand in Q4 2024[88]. Credit Quality and Losses - The provision for credit losses totaled $24.0 million in Q1 2025, compared to $17.0 million in Q4 2024, reflecting a conservative approach to credit quality amid macroeconomic uncertainty[5]. - Net charge-offs decreased to $12.6 million, or 11 basis points of average total loans on an annualized basis, down from $15.9 million, or 13 basis points in Q4 2024[27]. - The allowance for credit losses at the end of the period was $448,387 thousand, an increase from $437,060 thousand at the end of the previous quarter[77]. - The annualized net charge-offs as a percentage of total loans was 0.11%, a slight decrease from 0.13% in the previous quarter[77]. - The total allowance for loan losses and unfunded lending-related commitments was $447,941 thousand, compared to $436,603 thousand in the previous quarter[79]. Asset Management and Wealth Management - As of March 31, 2025, the company had approximately $51.1 billion in assets under administration in its wealth management subsidiaries[45]. - Wealth management revenue decreased by $4.7 million in Q1 2025 due to system transitions and lower market valuations[31]. - Wealth management revenue for Q1 2025 totaled $34.0 million, slightly down from Q4 2024[45]. - The company recorded a net gain of approximately $19.3 million from the sale of its Retirement Benefits Advisors division in Q1 2024[47]. - The company is subject to various risks, including fluctuations in stock market conditions that could adversely affect its wealth management and brokerage operations[106]. Operational Efficiency and Expenses - Total non-interest expense for Q1 2025 was $366,090,000, a decrease from $368,539,000 in Q4 2024, reflecting a reduction of 0.4%[55]. - Salaries and employee benefits totaled $211,526 thousand in Q1 2025, a slight decrease of 0.3% compared to $212,133 thousand in Q4 2024[93]. - The efficiency ratio (GAAP) for the quarter was 57.21%, slightly improved from 57.46% in the previous quarter[97]. - Non-interest expenses decreased to $366,090 thousand in Q1 2025 from $368,539 thousand in Q4 2024, a reduction of 0.4%[93]. - The company emphasizes the importance of technology in providing products and services that meet customer demands and improve operational efficiency[103]. Strategic Initiatives and Market Conditions - The Company is focused on growth strategies, including potential acquisitions of banks and specialty finance businesses, as well as plans to establish new branches[104]. - The Company faces competitive pressures in the financial services sector, which may impact pricing and market share for its loan and deposit products[103]. - The Company anticipates potential risks affecting its loan portfolio, including economic conditions, trade policy changes, and defaults, which may require increases in credit loss allowances[102]. - The Company is monitoring the impact of regulatory changes and heightened capital requirements on its operations and financial performance[103]. - The Company acknowledges the potential adverse effects of natural disasters and climate change on its operations[106].

Core Points - Wintrust Financial Corporation reported record quarterly net income of $189.0 million, or $2.69 per diluted common share, for Q1 2025, an increase from $185.4 million, or $2.63 per diluted common share in Q4 2024 [1] - Pre-tax, pre-provision income reached a record $277.0 million, compared to $270.1 million in the previous quarter [1] Financial Performance - Total assets increased by $1.0 billion to $65.87 billion in Q1 2025 compared to Q4 2024 [4][38] - Total loans rose by $653 million, or 6% annualized, driven by growth in commercial and premium finance life insurance loan portfolios [3][5] - Total deposits increased by approximately $1.1 billion, or 8% annualized, resulting in a loans-to-deposits ratio of 90.9% [3][6] - Net interest income increased to $526.5 million in Q1 2025, up from $525.1 million in Q4 2024, supported by improved net interest margin [5][8] - Net interest margin improved by five basis points to 3.54% in Q1 2025 compared to Q4 2024 [9][35] Credit Quality - The allowance for credit losses totaled $448.4 million as of March 31, 2025, an increase from $437.1 million at the end of Q4 2024 [11][39] - Net charge-offs decreased to $12.6 million, or 11 basis points of average total loans, down from $15.9 million, or 13 basis points in Q4 2024 [13][39] - Non-performing assets remained stable at $195.0 million, comprising 0.30% of total assets as of March 31, 2025 [15][39] Non-Interest Income and Expenses - Non-interest income totaled $116.6 million in Q1 2025, an increase of $3.2 million from $113.5 million in Q4 2024 [16] - Non-interest expenses decreased to $366.1 million in Q1 2025, down from $368.5 million in Q4 2024 [21] Business Segments - Community banking saw increases in commercial, commercial real estate, and residential real estate loan portfolios in Q1 2025 [28] - Wealth management revenue totaled $34.0 million in Q1 2025, slightly down from the previous quarter [32] - Specialty finance reported originations of $4.8 billion in insurance premium financing receivables during Q1 2025 [30]