Capital Adequacy - The Company has deferred 100% of the day-one impact of adopting CECL for two years and 25% of the cumulative increase or decrease in the allowance for credit losses since adoption[62]. - As of December 31, 2023, the Company's Tier 1 capital ratio was 10.3%, exceeding the minimum requirement of 6.0%[70]. - The Common Equity Tier 1 capital ratio was 9.4%, surpassing the minimum requirement of 4.5%[70]. - The Total capital ratio stood at 12.1%, well above the minimum requirement of 8.0%[70]. - The Capital Conservation Buffer is currently at its fully phased-in level of 2.5%[74]. - The Company is required to maintain a Tier 1 Capital Ratio of 6.0% or greater to be considered well-capitalized[64]. - The Federal Reserve has not revised the well-capitalized standard for bank holding companies to reflect higher capital requirements under the U.S. Basel III Rule[64]. - The Company and its subsidiary banks are categorized as "well-capitalized" as of December 31, 2023[77]. Regulatory Compliance - The Company is estimated to incur a special assessment of approximately $34.4 million due to losses associated with bank failures, to be paid in eight quarterly installments starting June 2024[84]. - The Company remains in compliance with specific net worth requirements for participation in mortgage programs with government-sponsored entities[72]. - The company is subject to federal banking laws that impose limits on the amount of credit extended to any one borrower, including credit exposures from derivative transactions and securities lending[85]. - The company must maintain written policies for real estate lending that establish loan portfolio diversification standards and prudent underwriting standards[87]. - The company has implemented an Anti-Money Laundering (AML) program in compliance with the Bank Secrecy Act and USA PATRIOT Act, requiring employee training and periodic audits[88]. - The Anti-Money Laundering Act of 2020 may alter due diligence and reporting requirements, promoting increased information-sharing and technology use[89]. - The company is subject to data privacy and cybersecurity laws, including the Gramm-Leach-Bliley Act and the California Consumer Privacy Act, which impose obligations on the handling of personal information[92][94]. - Wintrust Investments is registered as a broker-dealer and investment adviser, subject to extensive federal and state regulations governing securities transactions[98][99]. - The company must comply with net capital requirements that restrict its ability to withdraw capital, potentially limiting dividend payments and debt repayments[101]. - The company is required to adopt clawback policies for incentive-based compensation in compliance with SEC rules, effective by November 28, 2023[104][105]. Workforce and Training - The company aims to differentiate itself by providing a highly-personalized banking experience through warm and responsive staff[106]. - As of December 31, 2023, Wintrust employed 5,521 full-time equivalent employees, with 97% classified as full-time[107]. - In 2023, Wintrust filled over 1,500 positions, with 53% of new hires identifying as female and 41% as racial or ethnic minorities[108]. - The turnover rate for Wintrust in 2023 was approximately 14%, with voluntary departures accounting for about 63% of total turnover[108]. - Wintrust's workforce is composed of 56% women and 33% racially and ethnically diverse individuals[110]. - In 2023, Wintrust invested over 217,000 total hours in employee training, maintaining an online training catalog with over 22,000 course offerings[112]. - The company launched the "Leadership Journey," an eight-phase leadership development program to support leaders at various advancement stages[113]. Community Reinvestment and Regulation - Wintrust's subsidiary banks received a "satisfactory" or better rating from the OCC on their most recent CRA performance evaluation[119]. - The Federal Reserve, FDIC, and OCC issued a final rule on October 24, 2023, revising the CRA framework, expected to take effect on April 1, 2024[120]. Interchange Fees and Payment Processing - Wintrust is subject to a statutory requirement that interchange fees for electronic debit transactions be reasonable and proportional to the costs incurred by the issuer[132]. - The final rule regarding debit card transactions processing on at least two unaffiliated payment card networks became effective on July 1, 2023[132]. - The Federal Reserve proposed to lower the maximum interchange fee for large debit card issuers, reducing the base component from 21.0 cents to 14.4 cents and the ad valorem component from 5.0 basis points to 4.0 basis points[133]. Environmental Impact - The Company's corporate campus greenhouse gas emissions totaled 4,473 tons in 2023, an increase from 4,194 tons in 2022[135]. - Great Lakes Advisors managed $102 million in climate-focused portfolios as of December 31, 2023, focusing on renewable energy and sustainable solutions[135]. Interest Rate Risk Management - The Company anticipates three 25 basis point rate cuts starting June 2024, expecting net interest margin to remain stable in a narrow range[514]. - Under the Static Shock Scenario, the net interest income is projected to change by +2.6% and -0.7% for +200 and -200 basis points respectively as of December 31, 2023[516]. - In the Ramp Scenario, the net interest income is projected to change by +1.6% and -1.5% for +200 and -200 basis points respectively as of December 31, 2023[516]. - The Company entered into covered call option transactions to hedge against net interest margin compression, although no options were outstanding as of December 31, 2023[517]. - The Company continuously monitors interest rate risk and adjusts its asset-liability structure to mitigate potential adverse changes in net interest income[514]. - The Company’s asset-liability management policies are established to balance interest rate risk, credit risk, and liquidity risk[511]. - The Company does not expect inflation to materially impact its financial condition compared to changes in interest rates[510].
Wintrust Financial Corp Series F Pfd(WTFCN) - 2023 Q4 - Annual Report