Capital Adequacy - The Company has adopted the capital transition relief over a five-year period for the impact of CECL on regulatory capital[64] - As of December 31, 2022, the Common Equity Tier 1 Capital Ratio was 9.1%, exceeding the minimum requirement of 4.5%[71] - The Tier 1 Capital Ratio was 10.0%, surpassing the minimum requirement of 6.0%[71] - The Total Capital Ratio stood at 11.9%, above the minimum requirement of 8.0%[71] - The Capital Conservation Buffer is currently at its fully phased-in level of 2.5%[76] - The Company and its subsidiary banks are expected to continue exceeding all applicable well-capitalized regulatory capital requirements[70] - The Federal Reserve requires a Tier 1 Capital Ratio of 6.0% or greater for bank holding companies to be considered well-capitalized[67] - As of December 31, 2022, all of the Company's banks were categorized as "well-capitalized" and met additional requirements under the Capital Conservation Buffer[79] - The Company must maintain a minimum Common Equity Tier 1 Capital Ratio of 7.00% to avoid limitations on capital distributions[70] Regulatory Compliance - The FDIC has adopted a final rule to increase deposit insurance assessment rates by 2 basis points starting in 2023 to restore the DIF reserve ratio[86] - The company is subject to a statutory requirement that interchange fees for electronic debit transactions are limited to 21 cents plus 0.05% of the transaction, plus an additional one cent per transaction fraud adjustment[105] - The company’s subsidiary banks received a "satisfactory" or better rating from the Federal Reserve or the OCC on their most recent Community Reinvestment Act performance evaluation[93] - The company has implemented policies and internal controls to comply with anti-money laundering requirements, including maintaining an AML program and conducting periodic audits[107] - The company consolidated its consumer mortgage loan origination and servicing operations primarily within Wintrust Mortgage to ensure compliance with mortgage-related rules and regulations[102] - The company is required to disclose its privacy policy to certain customers under the Gramm-Leach-Bliley Act[111] - The Federal Reserve finalized a rule that amends Regulation II, requiring debit card issuers to enable all debit card transactions to be processed on at least two unaffiliated payment card networks, effective July 1, 2023[105] - The Anti-Money Laundering Act of 2020 may significantly alter due diligence and reporting requirements for banks in the coming years[108] - The company is subject to various federal and state statutes designed to protect consumers, with increased focus from state authorities on enforcement[95] - The company’s lending operations must adhere to federal laws governing credit transactions, including the Truth-In-Lending Act and the Equal Credit Opportunity Act[99] - The company is required to monitor and report suspicious transactions as part of its compliance with the Bank Secrecy Act[107] Workforce and Training - As of December 31, 2022, Wintrust employed 5,275 full-time equivalent employees, with 97% classified as full-time[126] - In 2022, Wintrust filled 1,881 positions, with 53% of new hires identifying as female and 42% as racial or ethnic minorities[127] - Wintrust's employee turnover rate for 2022 was approximately 25%, with voluntary departures accounting for about 83% of total turnover[127] - The company invested over 189,000 total hours in training for employees in 2022, maintaining an online training catalog with over 16,000 course offerings[130] - Wintrust's diversity initiatives include a Business Resource Group for women, with over 13% of employees registered in one or more groups[129] - The company has implemented a hybrid work model, allowing colleagues to work remotely up to 2 days a week based on job flexibility[135] Risk Management - The Company’s interest rate sensitivity under the Static Shock Scenario showed a 7.2% increase in net interest income with a 200 basis point increase in rates as of December 31, 2022, compared to 25.3% in 2021[516] - Under the Ramp Scenario, the Company projected a 5.6% increase in net interest income with a 200 basis point increase in rates as of December 31, 2022, down from 13.9% in 2021[516] - The Company utilizes derivative financial instruments, including interest rate swaps and options, to manage interest rate risk and enhance profitability[516] - The Company’s asset-liability management policies are designed to balance interest rate risk, credit risk, and liquidity risk while maintaining yield[512] - Interest rate risk is primarily managed through customer deposits, which limits the Company’s ability to control the types and terms of these deposits[514] - The Company entered into covered call option transactions to hedge against net interest margin compression, contributing to overall profitability[517] - The Company continuously monitors net interest margin trends and performs simulation analysis to identify potential adverse changes in net interest income[513] - Inflation is not expected to materially impact the Company’s financial condition compared to changes in interest rates[511] - The Company’s Risk Management Committee regularly reviews interest rate risk exposure to adjust balance sheet and derivative instruments accordingly[515] Environmental Impact - Wintrust's corporate campus energy usage totaled 9,331 MWh in 2022, a decrease from 9,713 MWh in 2021, while greenhouse gas emissions were 4,194 tons in 2022, down from 4,733 tons in 2021[136] - The Climate Opportunities Net Zero Portfolio managed by Great Lakes Advisors reached $157 million in climate-focused investments as of December 31, 2022[137] Securities Regulation - Wintrust's clawback policy for incentive-based compensation must be adopted by November 28, 2023, following SEC regulations[123] - The company is subject to extensive regulation under federal and state securities laws, impacting its operations and compliance requirements[117] - Wintrust is a member of the Securities Investor Protection Corporation (SIPC), providing customer protection up to $500,000, with additional insurance coverage of up to $1.9 million from its clearing firm[120]
Wintrust Financial Corp Series F Pfd(WTFCN) - 2022 Q4 - Annual Report