Financial Performance - Wintrust 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, a 53% increase compared to $299.3 million in Q1 2022, driven by a $4.3 billion increase in average loans[179]. - Return on average common equity improved to 15.67% in Q1 2023, up from 11.94% in Q1 2022, indicating enhanced 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 Deposit Growth - The loan portfolio increased to $39.6 billion at March 31, 2023, up from $35.3 billion at March 31, 2022, reflecting organic growth in various portfolios[178]. - Total deposits rose to $42.72 billion at March 31, 2023, a 1% increase from $42.22 billion at March 31, 2022[183]. - The total average deposits for Q1 2023 were $42.0 billion, an increase of $448.3 million, or 1%, from $41.6 billion in Q1 2022[260]. Interest Income and Margin - The net interest margin improved to 3.81% in Q1 2023, up 121 basis points from 2.60% in Q1 2022, due to higher yields on earning assets[179]. - For Q1 2023, net interest income was $458.0 million, up $1.2 million from Q4 2022 and up $158.7 million from Q1 2022[204]. - The interest rate spread for Q1 2023 was 3.15%, compared to 3.22% in Q4 2022 and 2.47% in Q1 2022[204]. Non-Interest Income and Expenses - Non-interest income decreased to $107.8 million in Q1 2023 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]. - Total non-interest expense increased by $14.9 million, or 5%, to $299.2 million for the three months ended March 31, 2023, compared to $284.3 million for the same period in 2022[216]. Credit Losses and Allowances - The allowance for credit losses at the end of Q1 2023 was $375.8 million, an increase from $301.2 million at the end of Q1 2022, reflecting a provision for credit losses of $23.1 million compared to $4.0 million in the prior year[255]. - The community banking segment recorded a provision for credit losses of $21.1 million for Q1 2023, up from $4.1 million in Q1 2022, due to macroeconomic deterioration and loan growth[223]. - The allowance for credit losses in the commercial loan portfolio increased to $149.5 million as of March 31, 2023, compared to $120.9 million as of March 31, 2022[241]. Asset Management - Total assets increased by 5% to $52.87 billion at March 31, 2023, compared to $50.25 billion at March 31, 2022[183]. - The company’s liquidity management assets totaled $9.4 billion in Q1 2023, down from $9.9 billion in Q4 2022[204]. - The total average loans increased to $39,093,368, accounting for 80% of total average earning assets, compared to 79% in the previous quarter[227]. Market and Regulatory Environment - The effective tax rate for Q1 2023 was 26.01%, slightly down from 26.65% in Q1 2022, with income tax expense recorded at $63.4 million[220]. - The company is subject to increased regulatory capital requirements and compliance costs due to changes in the regulatory environment[278]. - Regulatory changes could impact the company's ability to market its products and operate profitably in the mortgage business[278]. Risks and Challenges - The company faces risks from security breaches, including denial of service attacks and identity theft, which could adversely affect its operations[278]. - The ongoing COVID-19 pandemic continues to pose risks to the company's financial results and operations[278]. - The company may experience a decrease in capital ratios as a result of declines in the value of its loan portfolios[278].
Wintrust Financial Corporation(WTFCM) - 2023 Q1 - Quarterly Report