Financial Performance - Net income for the first nine months of 2024 was $509.7 million, or $7.67 per diluted common share, compared to $499.1 million, or $7.71 per diluted common share for the same period in 2023[1]. - Net income for Q3 2024 was $170.0 million, a 12% increase from $152.4 million in Q2 2024[49]. - Net income for the three months ended September 30, 2024, was $170,001 thousand, compared to $164,198 thousand for the same period last year, showing a growth of 3.4%[52]. - Net income applicable to common shares was $163.010 million in Q3 2024, up from $145.397 million in Q2 2024, representing a growth of 12.1%[57]. - Basic net income per common share for Q3 2024 was $2.51, an increase from $2.35 in Q2 2024, reflecting a rise of 6.8%[57]. Loan and Deposit Growth - Total loans increased by approximately $2.4 billion in Q3 2024, including $1.3 billion from the Macatawa acquisition; excluding Macatawa, total loans increased by $1.1 billion or 10% annualized[4]. - Total deposits rose by approximately $3.4 billion in Q3 2024, with $2.3 billion from Macatawa; excluding Macatawa, total deposits increased by $1.1 billion or 9% annualized[4]. - Total loans reached $47,067,447 thousand as of September 30, 2024, up from $41,446,032 thousand a year earlier, indicating a 13.6% increase[52]. - Total deposits increased to $51,404,966 thousand as of September 30, 2024, compared to $44,992,686 thousand a year earlier, marking a growth of 14.3%[52]. - Non-interest-bearing deposits remained at 21% of total deposits at the end of Q3 2024, increasing by $708 million compared to Q2 2024[5]. Interest Income and Margin - Net interest income increased to $502.6 million in Q3 2024, up from $470.6 million in Q2 2024, primarily due to average earning asset growth and the addition of Macatawa[6]. - Total interest income for Q3 2024 reached $908.604 million, an increase from $849.979 million in Q2 2024, representing a growth of 6.5%[57]. - The net interest margin for the three months ended September 30, 2024, was 3.49%, slightly down from 3.60% a year ago[52]. - The company anticipates net interest margin to remain in the 3.50% range in Q4 2024 and into 2025, supported by stable net interest margin and continued balance sheet growth[3]. Non-Interest Income and Expenses - Other income decreased by $5.1 million in Q3 2024 compared to Q2 2024, primarily due to a gain recognized in Q2 2024 from a loan sale transaction[33]. - Non-interest expenses totaled $360.7 million in Q3 2024, an increase of $20.3 million from $340.4 million in Q2 2024, with the Macatawa acquisition contributing approximately $10.1 million to this increase[35]. - Total Non-Interest Income for Q3 2024 was $113,147,000, a decrease of $8,000,000 (7%) compared to Q2 2024, but an increase of $669,000 (1%) compared to Q3 2023[90]. - Total Non-Interest Income for the nine months ended September 30, 2024, was $374,874,000, an increase of $41,597,000 (12%) compared to the same period in 2023[90]. Credit Quality and Allowance for Losses - Net charge-offs totaled $26.7 million in Q3 2024, a decrease from $30.0 million in Q2 2024, with net charge-offs as a percentage of average total loans at 23 basis points[25]. - Non-performing loans totaled $179.7 million, or 0.38% of total loans, at the end of Q3 2024, compared to $174.3 million, or 0.39% of total loans, at the end of Q2 2024[27]. - The allowance for credit losses was $436.2 million as of September 30, 2024, relatively unchanged from $437.6 million as of June 30, 2024[23]. - The allowance for loan losses as a percentage of loans at period end was 0.77% as of September 30, 2024, down from 0.81% in the previous quarter[81]. Acquisitions and Market Expansion - The acquisition of Macatawa is expected to enhance Wintrust's presence in the west Michigan market, leveraging a compatible management team and reputable brand[3]. - The company completed the acquisition of Macatawa on August 1, 2024, issuing approximately 4.7 million shares and recording goodwill of approximately $144.6 million[45]. - The company plans to continue its growth strategy, including potential acquisitions and expansion of its banking operations[101]. Operational Efficiency and Ratios - The efficiency ratio, which measures the cost to produce one dollar of revenue, is calculated using non-GAAP measures, excluding securities gains or losses[96]. - The efficiency ratio (GAAP) for Q3 2024 was 58.88%, up from 57.10% in Q2 2024, indicating a decrease in operational efficiency[97]. - Return on average common equity (annualized) was 11.63% for the three months ended September 30, 2024, slightly up from 11.61% in June 2024[98]. Risks and Regulatory Environment - The Company faces potential risks from economic conditions affecting liquidity and loan portfolio performance, including U.S. government debt defaults or rating downgrades[103]. - The Company must navigate regulatory changes that could impact its operations and compliance costs[106]. - Changes in interest rates and market volatility could materially affect the Company's net interest income and profitability[103].

Financial Performance - Wintrust recorded net income of $152.4 million for Q2 2024, a decrease of 2% from $154.8 million in Q2 2023[169] - Net income for Q2 2024 was $152.4 million, a decrease of $2.4 million, or 2%, compared to Q2 2023, with diluted earnings per share of $2.32 versus $2.38 in the prior year[188] - The company reported a pre-tax income of $211.3 million for Q2 2024, compared to $249.9 million in Q1 2024[1] - The effective tax rate for the second quarter of 2024 was 27.90%, compared to 26.81% in the second quarter of 2023[223] Income and Revenue - Net interest income rose to $470.6 million in Q2 2024, a 5% increase from $447.5 million in Q2 2023, driven by a $3.7 billion increase in average loans[171] - Non-interest income increased to $121.1 million in Q2 2024, compared to $113.0 million in Q2 2023, primarily due to gains on the sale of premium finance receivables[172] - Non-interest income for the three months ended June 30, 2024, was $121,147 thousand, a 7% increase from $113,030 thousand in 2023[203] - Total non-interest income increased by $40.9 million, or 19%, to $261.7 million for the six months ended June 30, 2024, compared to $220.8 million in the same period of 2023[204] Expenses - Non-interest expense totaled $340.4 million in Q2 2024, an increase of 6% from $320.7 million in Q2 2023, mainly due to higher salaries and employee benefits[173] - Non-interest expense for the three months ended June 30, 2024, increased by $19.7 million, or 6%, to $340.4 million compared to $320.6 million for the same period in 2023[218] - Salaries and employee benefits increased by $13.6 million, or 7%, for the three months ended June 30, 2024, primarily due to elevated commissions from increased mortgage production and annual merit increases[219] Asset and Deposit Growth - Total assets grew by 10% to $59.8 billion at June 30, 2024, compared to $54.3 billion at June 30, 2023[175] - Total deposits increased by 9% to $48.0 billion at June 30, 2024, up from $44.0 billion at June 30, 2023[175] - Total average deposits for the second quarter of 2024 were $46.1 billion, an increase of $3.6 billion, or 8%, from the second quarter of 2023[262] - Total average assets increased to $57.49 billion in Q2 2024, up from $52.60 billion in Q2 2023, reflecting a growth of 9%[231] Loan Portfolio - The loan portfolio increased to $44.7 billion at June 30, 2024, up from $42.1 billion at December 31, 2023, reflecting organic growth across several segments[170] - The total average loans amounted to $43.82 billion in Q2 2024, maintaining 81% of total average earning assets, consistent with the previous quarters[231] - The commercial loan portfolio grew to $13.73 billion in Q2 2024, representing 25% of total average loans, consistent with the previous quarter[231] - Mortgage loans originated for sale totaled $1.2 billion for the six months ended June 30, 2024, up from $1.0 billion in the same period of 2023, reflecting growth in both purchase and refinance originations[206] Credit Quality and Allowance for Losses - The allowance for credit losses is critical, with 81% of total assets in loan and held-to-maturity debt securities[184] - The provision for credit losses for the second quarter of 2024 was $39.9 million, compared to $28.6 million in the same quarter of 2023, showing increased caution in credit management[258] - Non-performing loans increased to $174.3 million at the end of the period, compared to $108.7 million at the same time last year, indicating a rise in credit issues[254] - The allowance for credit losses at the end of the period was $437.1 million, up from $387.4 million a year earlier, reflecting a proactive approach to managing credit risk[258] Market and Economic Conditions - The company expects that changes in inflation will not have a material impact on its business compared to other industries[274] - Economic conditions, including housing prices and job market fluctuations, may adversely affect the company's liquidity and loan portfolio performance[276] - The company faces risks related to competitive pressures in the financial services sector, which could impact loan and deposit pricing[276] Strategic Initiatives - The company plans to form additional de novo banks or branch offices as part of its growth strategy[276] - The Company is committed to maintaining capital levels above the "Well Capitalized" standards established by the Federal Reserve[271] - The company is focused on using technology to meet customer demands and improve operational efficiencies[276]

Financial Performance - Wintrust recorded net income of $187.3 million for Q1 2024, a 4% increase from $180.2 million in Q1 2023[166]. - Net income for Q1 2024 totaled $187.3 million, an increase of $7.1 million, or 4%, compared to Q1 2023[185]. - Net income per diluted common share for Q1 2024 was $2.89, compared to $2.80 for Q1 2023[185]. - The increase in net income was primarily due to increased net interest income, higher mortgage banking revenue, and a $20.0 million gain from the sale of the RBA division[186]. - Return on average common equity fell to 14.42% in Q1 2024, down from 15.67% in Q1 2023[172]. - The effective tax rate decreased to 25.07% in Q1 2024 from 26.01% in Q1 2023, with income tax expense recorded at $62.7 million[211]. - The company recorded net excess tax benefits of $4.4 million in Q1 2024, compared to $2.8 million in Q1 2023, related to share-based compensation[213]. Loan and Deposit Growth - The loan portfolio increased to $43.2 billion at March 31, 2024, up from $39.6 billion a year earlier, reflecting organic growth in various segments[167]. - Total deposits increased by 9% to $46.4 billion at March 31, 2024, from $42.7 billion in the same period last year[172]. - Premium finance receivables originated in Q1 2024 reached $4.6 billion, compared to $3.8 billion in Q1 2023, indicating strong growth in the portfolio[224]. - Residential real estate loans averaged $2.7 billion in Q1 2024, an increase of $394.7 million, or 17%, from Q1 2023[223]. - As of March 31, 2024, total loans net of unearned income amounted to $43,230.7 million, with fixed rate loans at $17,370.5 million and variable rate loans at $25,860.2 million[227]. - Total average deposits for Q1 2024 were $44.6 billion, an increase of $2.6 billion, or 6%, from Q1 2023[246]. Income and Expenses - Net interest income for Q1 2024 was $464.2 million, a slight increase of 1% compared to $458.0 million in Q1 2023[168]. - Non-interest income rose to $140.6 million in Q1 2024, up from $107.8 million in Q1 2023, driven by a $20.0 million gain from the sale of the Retirement Benefits Advisors division[169]. - Non-interest expense increased by 11% to $333.1 million in Q1 2024, primarily due to higher salaries and employee benefits[170]. - Total non-interest expense for Q1 2024 was $333.15 million, an 11% increase from $299.17 million in Q1 2023[206]. - Salaries and employee benefits rose to $195.17 million in Q1 2024, a 10% increase from $176.78 million in Q1 2023, largely due to higher commissions and incentive compensation[207]. Asset Growth - Total assets grew by 9% to $57.6 billion at March 31, 2024, compared to $52.9 billion a year earlier[172]. - Total assets increased to $55.60 billion in Q1 2024 from $55.02 billion in Q4 2023 and $52.08 billion in Q1 2023[193]. - Average earning assets for Q1 2024 totaled $52.27 billion, compared to $51.51 billion in Q4 2023 and $48.81 billion in Q1 2023[193]. - The total equity increased to $5.44 billion in Q1 2024 from $5.07 billion in Q4 2023 and $4.90 billion in Q1 2023[193]. Credit Losses and Allowances - The allowance for credit losses is critical, representing management's estimate of expected credit losses over the life of financial assets[180]. - The allowance for credit losses at the end of the period was $427.175 million, up from $375.798 million in the previous year[242]. - The provision for credit losses for the three months ended March 31, 2024, was $21.691 million, compared to $23.070 million for the same period in 2023[242]. - The community banking segment recorded a provision for credit losses of $20.4 million in Q1 2024, down from $21.1 million in Q1 2023[215]. - The total charge-offs for the three months ended March 31, 2024, were $23.841 million, compared to $7.351 million for the same period in 2023[242]. Market and Economic Conditions - The company anticipates future financial performance to be influenced by economic conditions, housing prices, and job market trends, which may adversely affect liquidity and loan portfolio performance[263]. - The company expects potential increases in its allowance for credit losses due to defaults and losses on its loan portfolio[263]. - The company acknowledges the impact of competitive pressures in the financial services sector, which may affect pricing and market share[263]. - The company is monitoring the commercial real estate market conditions in the Chicago metropolitan area and southern Wisconsin[263]. Strategic Initiatives - The Company announced the acquisition of Macatawa Bank Corporation, which had approximately $2.7 billion in assets and $2.4 billion in deposits as of December 31, 2023[259]. - The company is focused on growth strategies, including plans to form additional de novo banks or branch offices[263]. - The company is preparing for the transition from LIBOR to an alternative benchmark rate for current and future transactions[265]. - The company recognizes the importance of attracting and retaining experienced senior management in the banking and financial services industries[265]. Risk Management - The company faces risks related to cybersecurity, including potential breaches and the impact of human error or cyberattacks[265]. - The company is evaluating the impact of heightened capital requirements and increased FDIC insurance premiums on its financial position[265].

Capital Ratios and Compliance - As of December 31, 2023, the Company's Tier 1 leverage ratio was 9.3%, exceeding the minimum requirement of 4.0%[70] - The Company's Tier 1 capital ratio was 10.3%, surpassing the well-capitalized standard of 6.0%[70] - The Common Equity Tier 1 capital ratio stood at 9.4%, well above the minimum requirement of 4.5%[70] - The total capital ratio was reported at 12.1%, exceeding the minimum requirement of 8.0%[70] - The Capital Conservation Buffer is currently at its fully phased-in level of 2.5%[74] - The Company is in compliance with specific net worth requirements for participation in mortgage programs as of December 31, 2023[72] - The Federal Reserve has not revised the well-capitalized standard for bank holding companies, but the Company's capital ratios exceed the expected revised standards[64] - The Company and its subsidiary banks are categorized as "well-capitalized" as of December 31, 2023[77] Regulatory Compliance and Legal Obligations - The company is subject to various federal, state, and local laws regarding data privacy and cybersecurity, which are evolving and may increase compliance costs[91] - The Anti-Money Laundering Act of 2020 may significantly alter due diligence and reporting requirements for banks over the next few years[89] - Wintrust Investments is registered as a broker-dealer with the SEC and in all 50 states, which subjects it to extensive regulation under federal and state securities laws[98] - The company must comply with the SEC's net capital rule, which requires maintaining a minimum amount of net assets in liquid form, potentially limiting its operations[101] - The company has implemented policies to comply with the Bank Secrecy Act, including maintaining an anti-money laundering program and conducting employee training[88] - The California Consumer Privacy Act imposes obligations on the company regarding personal information and may require additional costs for compliance[94] - The company is required to adopt a clawback policy for incentive-based compensation in line with SEC rules effective by November 28, 2023[104] - The company’s incentive compensation policies must not encourage imprudent risk-taking, as mandated by federal banking agencies[103] Workforce and Diversity - As of December 31, 2023, Wintrust employed 5,521 full-time equivalent employees, with 97% classified as full-time[107] - In 2023, Wintrust filled over 1,500 positions, with 53% of new hires identifying as female and 41% as racial or ethnic minorities[108] - The turnover rate for Wintrust in 2023 was approximately 14%, with voluntary departures accounting for about 63% of total turnover[108] - Wintrust's workforce is composed of 56% women and 33% racially and ethnically diverse individuals[110] - In 2023, Wintrust invested over 217,000 total hours in training for employees, maintaining an online training catalog with over 22,000 course offerings[112] - The company has implemented a "Leadership Journey" program to support the development of future leaders, with over 100 newly minted leaders participating in 2023[113] - Wintrust has taken steps to enhance diversity and inclusion, including mentoring programs with 31% minority participation and advocacy programs with over 72% women[110] Financial Projections and Interest Rate Management - The Company anticipates three 25 basis point rate cuts starting June 2024, expecting net interest margin to remain stable in a narrow range[515] - Under the Static Shock Scenario, the net interest income is projected to change by +2.6% and -0.7% for +200 and -200 basis points respectively as of December 31, 2023[517] - In the Ramp Scenario, the net interest income is projected to change by +1.6% and -1.5% for +200 and -200 basis points respectively as of December 31, 2023[517] - The Company uses derivative financial instruments to manage interest rate risk, including interest rate swaps and options[518] - The Company’s asset-liability management policies are monitored by the Risk Management Committee to balance interest rate, credit, and liquidity risks[512] - The Company does not expect inflation to materially impact its financial condition compared to interest rate changes[511] - The Company’s ability to manage interest-bearing liabilities is limited by customer preferences and local competition[514] - The Company continuously monitors its net interest margin and performs simulation analysis to identify potential adverse changes due to interest rate fluctuations[513] Environmental Impact - The corporate campus greenhouse gas carbon emissions totaled 4,473 tons in 2023, an increase from 4,194 tons in 2022[135] - The Climate Opportunities Net Zero Portfolio managed $102 million in climate-focused investments as of December 31, 2023[135] Community Engagement and Performance - Wintrust's subsidiary banks received a "satisfactory" or better rating from the OCC on their most recent Community Reinvestment Act performance evaluation[119] - The Federal Reserve finalized a rule on October 3, 2022, limiting debit interchange fees to 21 cents plus 0.05% of the transaction, effective July 1, 2023[132] - The Small Business Lending Rule requires covered lenders to collect and report information about small business credit applications, with compliance required by October 2024[127]

Financial Performance - Wintrust recorded net income of $164.2 million for Q3 2023, a 15% increase from $143.0 million in Q3 2022[185]. - Net income for Q3 2023 totaled $164.2 million, an increase of $21.2 million, or 15%, compared to Q3 2022[205]. - Comprehensive income for Q3 2023 was a loss of $4.4 million, significantly improved from a loss of $72.7 million in Q3 2022[185]. - Return on average common equity rose to 13.35% for Q3 2023, compared to 12.31% in Q3 2022, indicating improved profitability[191]. - The wealth management segment's net income for Q3 2023 was $8.5 million, down from $11.1 million in Q3 2022, with year-to-date net income totaling $23.6 million compared to $28.1 million in the same period last year[244]. Income and Expenses - Net interest income for Q3 2023 was $462.4 million, a 15% increase compared to $401.4 million in Q3 2022, driven by a $3.3 billion increase in average loans[187]. - Non-interest income rose to $112.5 million in Q3 2023, up from $101.5 million in Q3 2022, attributed to increased fees from covered call options and operating lease income[188]. - Non-interest expense totaled $330.1 million in Q3 2023, an 11% increase from $296.5 million in Q3 2022, primarily due to higher salaries and employee benefits[189]. - The efficiency ratio (GAAP) for Q3 2023 was 57.18%, compared to 58.59% in Q3 2022, indicating improved operational efficiency[206]. Asset and Loan Growth - The loan portfolio increased to $41.4 billion as of September 30, 2023, up from $39.2 billion at December 31, 2022, reflecting organic growth in various portfolios[186]. - Total assets increased by 6% to $55.6 billion as of September 30, 2023, compared to $52.4 billion at the end of 2022[191]. - Total earning assets for Q3 2023 were $51.01 billion, compared to $49.36 billion in Q2 2023 and $47.75 billion in Q3 2022[212]. - Total average loans reached $39.97 billion, accounting for 80% of total average earning assets, compared to $36.05 billion and 77% in the previous year[254]. Credit Losses and Non-Performing Loans - The allowance for credit losses was determined to be 380.69% of nonaccrual loans as of September 30, 2023, down from 414.09% as of June 30, 2023[269]. - As of September 30, 2023, total non-performing loans amounted to $133.1 million, an increase from $108.7 million as of June 30, 2023, representing a 22.4% increase[269]. - The total allowance for credit losses for commercial and commercial real estate loans increased to $367.2 million as of September 30, 2023, compared to $286.0 million in 2022[261]. - The community banking segment recorded a provision for credit losses of $16.7 million for Q3 2023, compared to $3.6 million in Q3 2022, reflecting a significant increase due to macroeconomic deterioration and loan growth[241]. Deposits and Funding - Total deposits grew to $44.99 billion as of September 30, 2023, a 5% increase from $42.8 billion at the end of 2022[191]. - Brokered deposits as of September 30, 2023, were $3.69 billion, representing 8.2% of total deposits[281]. - The company had approximately $15.3 billion of uninsured deposits as of September 30, 2023, representing about 28% of total deposits[283]. - Total funding as of September 30, 2023, was $48.7 billion, an increase from $46.3 billion at September 30, 2022[245]. Capital and Regulatory Environment - The Tier 1 capital ratio as of September 30, 2023, was 10.2%, up from 9.9% a year earlier, indicating a strengthening of the company's capital position[288]. - The company emphasizes the importance of its ability to raise additional capital on acceptable terms when needed[299]. - Regulatory changes may impact the Company's ability to market products and operate its mortgage business profitably[299]. - The Company is subject to increased costs of compliance and heightened regulatory capital requirements[299]. Market and Economic Conditions - Key macroeconomic variables, such as the Baa corporate credit spread, significantly impact the estimate of allowance for credit losses[202]. - The severity and duration of the COVID-19 pandemic continue to pose risks to the Company's financial results and operations[299]. - Disruptions in capital markets may lower fair values for the Company's investment portfolio[299].

Financial Performance - Wintrust recorded net income of $154.8 million for Q2 2023, a 64% increase from $94.5 million in Q2 2022[190] - Net income for Q2 2023 was $154.8 million, a 64% increase from $94.6 million in Q2 2022[210] - Return on average common equity improved to 12.79% in Q2 2023, up from 8.53% in Q2 2022, indicating enhanced profitability[196] - Return on average common equity (annualized) was 12.79% for Q2 2023, down from 15.67% in Q2 2022[210] Loan and Asset Growth - The loan portfolio increased to $41.0 billion at June 30, 2023, up from $39.2 billion at December 31, 2022, reflecting organic growth in various portfolios[191] - Total assets grew by 7% to $54.3 billion at June 30, 2023, compared to $51.0 billion at June 30, 2022[196] - Total average assets increased to $52.34 billion, reflecting a growth from $49.43 billion in the same period last year[259] - Total earning assets increased to $49,086,918 thousand in June 2023 from $46,517,043 thousand in June 2022, with a net interest margin of 5.51% compared to 3.04% in the previous year[219] Interest Income and Margin - Net interest income rose to $447.5 million in Q2 2023, a 32% increase compared to $337.8 million in Q2 2022, driven by a $4.2 billion increase in average loans[192] - Net interest income for Q2 2023 was $457.995 million, compared to $447.537 million in Q2 2022, reflecting a growth of 1.03%[210] - The net interest margin improved to 3.64% in Q2 2023, up 72 basis points from 2.92% in Q2 2022, due to higher yields on earning assets[192] - The net interest margin (GAAP) for Q2 2023 was 3.64%, down from 3.81% in Q2 2022[210] Non-Interest Income and Expenses - Non-interest income totaled $113.0 million in Q2 2023, compared to $102.9 million in Q2 2022, with no losses on investment securities in Q2 2023[193] - Non-interest income for Q2 2023 was $107.769 million, a decrease from $113.030 million in Q2 2022[210] - Non-interest expense increased by 11% to $320.6 million in Q2 2023, primarily due to higher salaries, employee benefits, and marketing expenses[194] - Total non-interest expense increased by $46.8 million, or 8%, to $619.8 million for the six months ended June 30, 2023, compared to $572.9 million in the same period of 2022[1][4] Deposits and Funding - Total deposits increased to $44.0 billion at June 30, 2023, a 3% rise from $42.6 billion at June 30, 2022[196] - Total funding at June 30, 2023, was $47.4 billion, up from $44.9 billion at June 30, 2022[247] - Brokered deposits increased to $4.1 billion, representing 9.3% of total deposits as of June 30, 2023, compared to 4.2% in the previous year[287] - The company had approximately $14.1 billion of uninsured deposits as of June 30, 2023, with $2.4 billion being fully collateralized[289] Credit Losses and Allowances - The allowance for credit losses is critical, with 82% of total assets in loan and held-to-maturity debt securities[206] - The allowance for credit losses at the end of the period was $387.4 million, compared to $312.1 million in the previous year[280] - The allowance for loan and investment security losses was $302.63 million in Q2 2023, compared to $282.70 million in Q1 2023 and $260.55 million in Q2 2022[218] - The total allowance for credit losses is based on a comprehensive analysis of the loan portfolio, considering economic and industry factors[278] Market and Economic Conditions - The company anticipates potential impacts on its financial condition from economic conditions, interest rate changes, and competitive pressures in the financial services sector[303] - The ongoing COVID-19 pandemic continues to pose risks to the company's financial results and operations[305] - Regulatory changes could impact the company's ability to market products and operate its mortgage business profitably[305] Management and Strategy - The Company is committed to maintaining capital levels above the "Well Capitalized" standards established by the Federal Reserve[299] - The Company plans to continue evaluating liquidity sources, including management of availability with the FHLB and FRB[301] - Management continues to actively monitor loan portfolios to identify problem credits in a timely manner, amid ongoing macroeconomic uncertainty[275] Risks and Challenges - The company faces risks from security breaches, including hacking and malware, which could adversely affect its operations[305] - Increased costs are anticipated due to the need to protect customers from the impact of stolen debit card information[305] - The company is at risk of losing customers due to technological changes that allow financial transactions without traditional banking[305] - The company must navigate the challenges of transitioning from LIBOR to an alternative benchmark rate for transactions[305]

Financial Performance - The Company recorded net income of $180.2 million for Q1 2023, a 41% increase from $127.4 million in Q1 2022[177] - Net interest income rose to $458.0 million in Q1 2023, up 53% from $299.3 million in Q1 2022, driven by a $4.3 billion increase in average loans[179] - Non-interest income decreased to $107.8 million in Q1 2023, down 34% from $162.8 million in Q1 2022, primarily due to lower mortgage banking revenues[180] - Non-interest expense totaled $299.2 million in Q1 2023, a 5% increase from $284.3 million in Q1 2022, mainly due to higher salaries and miscellaneous expenses[181] - The net interest margin improved to 3.81% in Q1 2023, up 121 basis points from 2.60% in Q1 2022, attributed to higher yields on earning assets[179] - Return on average common equity rose to 15.67% in Q1 2023, compared to 11.94% in Q1 2022, indicating improved profitability[183] - Diluted earnings per share for Q1 2023 were $2.80, up from $2.07 in Q1 2022[196] - The increase in net income was primarily due to higher net interest income, partially offset by lower mortgage banking revenue[197] Loan and Asset Growth - Total loans increased to $39.6 billion at March 31, 2023, compared to $35.3 billion at March 31, 2022, reflecting organic growth in various portfolios[178] - Total assets increased by 5% to $52.87 billion at March 31, 2023, compared to $50.25 billion at March 31, 2022[183] - Total average loans increased to $39,093,368 thousand, representing 80% of total average earning assets, compared to 79% in the previous quarter[227] - The commercial and commercial real estate loan categories comprised 58% of the average loan portfolio in Q1 2023, up from 57% in Q4 2022[230] Credit Losses and Allowances - The allowance for credit losses is a critical accounting estimate, with loan and held-to-maturity debt securities portfolios representing 82% of total assets[191] - The allowance for credit losses at the end of the period was $375.8 million, an increase from $301.2 million at the end of the same period last year, reflecting a well-diversified and secured loan portfolio[255] - The net charge-offs for the quarter were $5.5 million, compared to $2.5 million in the same quarter last year, indicating a rise in credit losses[255] - The allowance for loan losses as a percentage of loans at period end was 0.73%, slightly up from 0.71% the previous year[255] Deposits and Liquidity - Total deposits increased slightly to $42.72 billion at March 31, 2023, from $42.22 billion at March 31, 2022[183] - The Company maintained a strong liquidity position, benefiting from a solid deposit base and access to various funding sources[182] - Brokered deposits increased to $4.0 billion, representing 9.4% of total deposits as of March 31, 2023, compared to 6.0% the previous year[262] - The company had approximately $14.8 billion of uninsured deposits, with $1.8 billion being fully collateralized[264] Regulatory and Operational Risks - The Company faces risks from security breaches, including denial of service attacks and hacking, which could adversely affect its operations[278] - Regulatory changes could impact the Company's ability to market its products and operate profitably in the mortgage business[278] - The Company must navigate challenges related to compliance costs and heightened regulatory capital requirements[278] - The impact of the COVID-19 pandemic continues to affect the Company's financial results and operations[278] Strategic Initiatives - Forward-looking statements indicate potential growth strategies, including future acquisitions and the formation of additional de novo banks or branch offices[276] - The Company is focused on transitioning away from LIBOR to an alternative benchmark rate for future transactions[278] - The Company continues to evaluate liquidity sources, including management of availability with the FHLB and FRB, to ensure sufficient funds for operations[274]

Capital Adequacy - The Company has adopted the capital transition relief over a five-year period for the day-one impact of CECL on retained earnings[64] - As of December 31, 2022, the Company's Common Equity Tier 1 Capital Ratio was 9.1%, exceeding the minimum requirement of 4.5%[71] - The Tier 1 Capital Ratio was 10.0%, above the minimum requirement of 6.0%[71] - The Total Capital Ratio stood at 11.9%, surpassing the minimum requirement of 8.0%[71] - The Company and its subsidiary banks met the Capital Conservation Buffer of 2.5% as of December 31, 2022[70] - The Company is categorized as "well-capitalized" and exceeds the revised well-capitalized standards set by the Federal Reserve[79] - The Federal Reserve requires a Tier 1 Capital Ratio of 6.0% or greater for bank holding companies to be considered well-capitalized[67] - The Company must maintain a Capital Conservation Buffer to avoid restrictions on capital distributions, including dividends[69] Regulatory Compliance - The FDIC has adopted a final rule to increase deposit insurance assessment rates by 2 basis points starting in 2023[86] - The Company remains in compliance with specific net worth requirements for participation in mortgage programs as of December 31, 2022[74] - The company is subject to a statutory requirement that interchange fees for electronic debit transactions are limited to 21 cents plus 0.05% of the transaction, plus an additional one cent per transaction for fraud adjustment[105] - The company’s subsidiary banks received a "satisfactory" or better rating from the Federal Reserve or the OCC on their most recent Community Reinvestment Act performance evaluation[93] - The company has implemented policies and internal controls to comply with anti-money laundering requirements, including maintaining an AML program and conducting periodic audits[107] - The company consolidated its consumer mortgage loan origination and servicing operations primarily within Wintrust Mortgage to ensure compliance with mortgage-related rules and regulations[102] - The Federal Reserve finalized a rule that requires debit card issuers to enable all debit card transactions to be processed on at least two unaffiliated payment card networks, effective July 1, 2023[105] - The company is required to disclose its privacy policy to certain customers under the Gramm-Leach-Bliley Act[111] - The Anti-Money Laundering Act of 2020 may significantly alter due diligence and reporting requirements for banks in the coming years[108] - The company is subject to various federal and state statutes designed to protect consumers, with increased focus from state authorities on enforcement[95] - The company’s lending operations must adhere to federal laws governing credit transactions, including the Truth-In-Lending Act and the Equal Credit Opportunity Act[99] - The company is required to monitor and report suspicious transactions as part of its compliance with the Bank Secrecy Act[107] Workforce and Diversity - As of December 31, 2022, Wintrust employed 5,275 full-time equivalent employees, with 97% classified as full-time[126] - In 2022, Wintrust filled 1,881 positions, with 53% of new hires identifying as female and 42% as racial or ethnic minorities[127] - The turnover rate for Wintrust in 2022 was approximately 25%, with voluntary departures accounting for about 83% of total turnover[127] - Women represent 57% of Wintrust's workforce, while racially and ethnically diverse representation stands at 32%[129] - Wintrust has launched a fifth Business Resource Group called Women of Wintrust, aimed at promoting inclusivity and empowerment[129] - Wintrust's Future of Work model allows for remote work up to 2 days a week for eligible roles, reflecting a flexible approach to scheduling[135] - Wintrust invested more than 189,000 total hours in training for employees in 2022, maintaining an online training catalog with over 16,000 course offerings[130] - Wintrust's clawback policy must be adopted no later than 60 days following the effective date of the applicable listing standard, which is set for November 28, 2023[123] Environmental Impact - Wintrust's corporate campus energy usage in 2022 was 9,331 MWh, a decrease from 9,713 MWh in 2021, while greenhouse gas emissions totaled 4,194 tons, down from 4,733 tons in 2021[136] - The Climate Opportunities Net Zero Portfolio managed by Great Lakes Advisors reached $157 million in climate-focused investments as of December 31, 2022[137] Interest Rate Risk Management - The Company’s interest rate sensitivity under the Static Shock Scenario showed a 7.2% increase in net interest income with a 200 basis point rise in rates as of December 31, 2022, compared to 25.3% in 2021[516] - Under the Ramp Scenario, the Company projected a 5.6% increase in net interest income with a 200 basis point rise in rates as of December 31, 2022, down from 13.9% in 2021[516] - The Company utilizes derivative financial instruments, including interest rate swaps and options, to manage interest rate risk and enhance profitability[516] - The Company’s asset-liability management policies are monitored by the Risk Management Committee to balance interest rate risk, credit risk, and liquidity risk[512] - Interest rate risk is continuously reviewed, with management taking action to mitigate potential adverse changes in net interest income[515] - The Company entered into covered call option transactions to hedge positions and increase total returns from related securities, contributing to overall profitability[517] - The Company’s primary source of interest-bearing liabilities is customer deposits, which limits its ability to manage deposit types and terms[514] - Changes in inflation are not expected to materially impact the Company’s financial condition compared to changes in interest rates[511] - The Company’s interest rate risk exposure is regularly assessed to minimize inherent risks while maximizing net interest income[515]