WINTRUST FINL(US:WTFCP)2025-02-28 22:07Capital Adequacy and Regulatory Compliance - The Company deferred 100% of the day-one effect of adopting CECL for two years and 25% of the cumulative increase or decrease in the allowance for credit losses since the adoption of CECL [68]. - As of December 31, 2024, the Company's Tier 1 Capital Ratio was 10.7%, exceeding the well-capitalized standard of 6.0% [74]. - The Company's Total Capital Ratio was 12.3%, surpassing the minimum requirement of 8.0% [74]. - The Capital Conservation Buffer is currently at 2.5%, which is fully phased in [78]. - The Company and its subsidiary banks are expected to continue exceeding all applicable well-capitalized regulatory capital requirements [73]. - The Company must maintain a Tier 1 Leverage Ratio of 4.0% or greater, with the current ratio at 9.4% [74]. - The Federal Reserve may require bank holding companies to maintain capital ratios substantially in excess of mandated minimum levels depending on economic conditions [69]. Special Assessments and Financial Obligations - The FDIC issued a final rule for a special assessment to recoup losses to the DIF, with the Company recording $34.4 million in the fourth quarter of 2023 [87]. - The special assessment payments will begin in June 2024 and will continue for a total of eight quarterly installments [87]. - As of December 31, 2024, each of the Company's banks was categorized as "well-capitalized" and met additional requirements under the Capital Conservation Buffer [81]. Compliance with Financial Regulations - The Company is subject to the Bank Secrecy Act (BSA) and USA PATRIOT Act, requiring maintenance of an anti-money laundering (AML) program and reporting of suspicious transactions [91]. - The Anti-Money Laundering Act of 2020 mandates the U.S. Treasury to issue new regulations that may alter due diligence and reporting requirements for banks [92]. - The Corporate Transparency Act requires the establishment of a national beneficial ownership information registry, with compliance costs expected to increase for the Company [93]. - Wintrust Investments is registered as a broker-dealer with the SEC and is subject to extensive federal and state securities regulations [103]. - The SEC's net capital rule requires Wintrust Investments to maintain minimum capital requirements, impacting the Company's ability to withdraw capital and pay dividends [105]. - The Dodd-Frank Act requires the implementation of clawback policies for incentive-based compensation, with compliance required by November 28, 2023 [109]. Data Privacy and Cybersecurity Compliance - The Company must comply with evolving data privacy and cybersecurity laws, including the California Consumer Privacy Act, which imposes obligations on businesses regarding personal information [98]. - The Company is required to provide written privacy notices to customers and implement a comprehensive information security program under the Gramm-Leach-Bliley Act [97]. - Violations of data privacy and cybersecurity laws may expose the Company to regulatory action and private litigation, increasing compliance risks and potential liabilities [101]. Workforce and Employee Development - As of December 31, 2024, Wintrust employed 5,903 full-time equivalent employees, with 98% classified as full-time [129]. - In 2024, Wintrust filled over 1,390 positions, with 53% of new hires identifying as female and 41% as racial or ethnic minorities [130]. - The turnover rate for Wintrust in 2024 was approximately 12%, with voluntary departures accounting for about 75% of total turnover [130]. - Wintrust's workforce is composed of 56% women and 33% racial and ethnic minorities [132]. - In 2024, Wintrust invested more than 177,000 total hours in training for team members [133]. - Over 425 leaders participated in leadership development programs in 2024 [134]. - Wintrust offers a comprehensive total rewards package to attract and retain talent [131]. - The company has a mentoring program, "Paired To Win," with over 1,300 participants, 33% of whom are minorities [132]. - Wintrust maintains an online training catalog with over 21,000 course offerings for employee development [133]. Environmental Impact and Sustainability - The corporate campus greenhouse gas carbon emissions (CO2e) totaled 3,692 tons in 2024, a decrease from 3,938 tons in 2023 [137]. - The aggregate measurement of greenhouse gas carbon emissions from the corporate campus and retail banking locations totaled 17,699 tons in 2024, down from 18,607 tons in 2023 [137]. - The Company’s climate-focused asset portfolios totaled approximately $135 million as of December 31, 2024 [138]. Interest Rate Risk Management - The Company’s interest rate sensitivity scenarios indicate a potential decrease in net interest income of (1.6)% under a +200 basis points Static Shock Scenario as of December 31, 2024 [525]. - The Ramp Scenario for December 31, 2024 shows a potential decrease in net interest income of (0.2)% under a +200 basis points change [525]. - The Company has executed various derivative instruments to hedge variable-rate loan exposures as part of its interest rate risk management strategy [526]. - The Company entered into covered call option transactions to economically hedge positions and increase total return from related securities [527]. - There were no covered call options outstanding as of December 31, 2024 or 2023 [528].