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 interest income rose to $447.5 million in Q2 2023, a 32% increase from $337.8 million in Q2 2022, driven by a $4.2 billion increase in average loans[192]. - 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]. - Return on average common equity increased to 12.79% in Q2 2023, compared to 8.53% in Q2 2022, indicating improved profitability[196]. - Diluted earnings per share for Q2 2023 were $2.38, compared to $1.49 in Q2 2022[210]. - The company reported a fully taxable-equivalent net interest income of $910,393 thousand for the six months ended June 30, 2023, up from $639,033 thousand in the same period of 2022[224]. - Non-interest income for the three months ended June 30, 2023, was $113,030 thousand, a 10% increase from $102,942 thousand in the same period of 2022[225]. - The wealth management segment reported a net income of $5.8 million for Q2 2023, down 38% from $9.3 million in Q2 2022[246]. 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 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]. - Total average loans reached $39.60 billion, accounting for 81% of total average earning assets, compared to $35.35 billion and 76% in the prior year[259]. - The commercial loan portfolio grew to $12.60 billion, with a 54.3% allowance for credit losses of $143.14 million as of June 30, 2023, compared to $12.05 billion and 56.2% allowance in 2022[266]. Non-Interest Expenses - 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 2022[236]. - Salaries and employee benefits increased by $22.0 million, or 6%, to $361.7 million for the six months ended June 30, 2023, primarily due to additional full-time employees from a wealth management acquisition[236]. Credit Quality and Allowances - The allowance for credit losses is critical, representing management's estimate of expected credit losses over the life of financial assets[206]. - The allowance for loan and investment security losses was $302.6 million in Q2 2023, compared to $282.7 million in Q1 2023 and $260.5 million in Q2 2022[218]. - The allowance for credit losses at the end of the period was $387.4 million, up from $312.1 million in the previous year[280]. - The total allowance for credit losses for commercial and commercial real estate loans increased to $358.84 million as of June 30, 2023, compared to $286.65 million in 2022[266]. - As of June 30, 2023, total non-performing loans amounted to $108.7 million, an increase from $100.7 million as of March 31, 2023, representing a 1.0% increase[274]. Deposits and Funding - Total deposits reached $44.0 billion at June 30, 2023, a 3% increase from $42.6 billion at June 30, 2022[196]. - Brokered deposits increased to $4.1 billion, representing 9.3% of total deposits as of June 30, 2023, up from 4.2% in the previous year[287]. - The company had approximately $14.1 billion of uninsured deposits, representing about 27% of total deposits as of June 30, 2023[289]. Market and Economic Conditions - The company is exposed to economic conditions that could adversely affect liquidity and loan portfolio performance[303]. - Management believes that reserves are appropriate to absorb expected losses, but significant increases may occur due to ongoing macroeconomic uncertainty[275]. - The company is evaluating the impact of the COVID-19 pandemic on its financial results and operations[305]. Strategic Initiatives - The Company plans to continue evaluating liquidity sources, including management of availability with the FHLB and FRB[301]. - The Company anticipates potential future acquisitions and growth strategies, including the formation of additional de novo banks or branch offices[303]. - The Company is committed to maintaining capital levels above the "Well Capitalized" standards established by the Federal Reserve[299].
Wintrust Financial Corporation(WTFCM) - 2023 Q2 - Quarterly Report