WINTRUST FINL(WTFCP) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, the company reported net interest income of $526,474,000, an increase from $464,194,000 in the same period of 2024, representing a year-over-year growth of 13.4%[88] - The company recorded a net income of $189,039,000 for the three months ended March 31, 2025, up from $187,294,000 in the prior year, reflecting a slight increase of 0.9%[88] - Non-interest income for the three months ended March 31, 2025, was $116,634,000, compared to $140,580,000 in the same period of 2024, showing a decrease of 17.0%[88] - The company reported total non-interest expenses of $366,090,000 for the three months ended March 31, 2025, compared to $333,145,000 in the same period of 2024, marking an increase of 9.9%[88] - The income tax expense for the three months ended March 31, 2025, was $64,016,000, compared to $62,662,000 in the prior year, representing an increase of 2.2%[88] - Basic earnings per share decreased to $2.73 in Q1 2025 from $2.93 in Q1 2024, a decline of 6.8%[168] - Other comprehensive income for the period ended March 31, 2025, was $98,320,000, compared to a loss of $123,917,000 for the same period in 2024[165] - The balance of accumulated other comprehensive income improved to $(410,015,000) at March 31, 2025, from $(485,148,000) at March 31, 2024[165] Asset Growth - The total assets at the end of the period were $65,870,066,000, compared to $57,576,933,000 as of March 31, 2024, indicating a growth of 14.0%[88] Derivative Financial Instruments - As of March 31, 2025, the total fair value of the company's derivative financial instruments was $204,257,000, compared to $259,264,000 as of March 31, 2024, indicating a decrease of 21.2%[95] - Interest rate derivatives designated as cash flow hedges amounted to $44,304,000 as of March 31, 2025, up from $17,330,000 as of March 31, 2024, reflecting a significant increase of 156.1%[95] - The fair value of derivative assets as of March 31, 2025, was $196.696 million, while derivative liabilities were $248.933 million, resulting in a net credit exposure of $62.399 million[122] - The total fair value of derivative assets was $204.3 million as of March 31, 2025, with Level 2 assets at $198.8 million and Level 3 assets at $5.5 million[139] - The total fair value of derivative liabilities was $181.2 million as of March 31, 2025, with all classified as Level 2[139] Credit Losses and Provisions - The provision for credit losses was $23,963,000 for the three months ended March 31, 2025, compared to $21,673,000 in the same period of 2024, representing an increase of 10.6%[88] - The total fair value losses recognized on individually assessed loans and other real estate owned amounted to $10.571 million for the three months ended March 31, 2025[143] Risk Management - The company utilized interest rate derivatives, including swaps and collars, to manage interest rate risk, with cash flow hedges designated for variable rate loans[96] - The company monitors counterparty credit risk through established exposure limits and ongoing financial performance reviews[118] - The company uses a variety of approaches to manage counterparty credit risk, including collateral agreements and offsetting transactions with highly rated financial institutions[117] - The company is exposed to risks from cybersecurity breaches, including hacking and data corruption attempts[275] Regulatory and Market Risks - The company faces competitive pressures in the financial services sector, which may impact loan and deposit pricing, potentially leading to a loss of market share and reduced income from various products[275] - The company is subject to regulatory changes that could affect its ability to market products and operate profitably, particularly in the mortgage business[275] - The company may face increased FDIC insurance premiums and special assessments, impacting overall costs[275] - There are risks associated with identifying and completing favorable acquisitions, as well as unexpected losses related to recent or future acquisitions[275] Stock and Compensation - The stock-based compensation expense recognized in Q1 2025 was $10.4 million, compared to $9.2 million in Q1 2024[160] - The number of outstanding restricted shares increased to 926,067 at March 31, 2025, from 829,154 at March 31, 2024, reflecting a growth of 11.7%[164] - Performance-based stock awards outstanding decreased to 382,143 shares at March 31, 2025, down from 464,674 shares at March 31, 2024, a decline of 17.7%[164] Future Outlook - The company anticipates future growth through potential acquisitions and internal growth strategies, including the formation of new banks or branch offices[274] - The company acknowledges that future actual results may not align with forward-looking statements, emphasizing the need for caution in reliance on such statements[277]