WINTRUST FINL(WTFCP) - 2024 Q2 - Quarterly Report

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]