Wintrust(WTFC) - 2025 Q2 - Quarterly Results

Earnings Summary Q2 2025 Performance Highlights Wintrust Financial Corporation reported record net income of $195.5 million for Q2 2025, driven by strong balance sheet growth and a stable net interest margin of 3.54%, with significant annualized growth in loans, deposits, and total assets Q2 2025 vs Q1 2025 Financial Performance | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net Income | $195.5 million | $189.0 million | | Diluted EPS | $2.78 | $2.69 | | Pre-tax, Pre-provision Income (non-GAAP) | $289.3 million | $277.0 million | Q2 2025 Key Growth Metrics (vs Q1 2025, Annualized) | Metric | Growth Rate | | :--- | :--- | | Total Loans | 19% | | Total Deposits | 17% | | Total Assets | 19% | - CEO Timothy S. Crane attributed the record results to a combination of balance sheet growth and a stable net interest margin, which was 3.54% in Q2 2025[4] - The company expects continued loan growth in the mid-to-high single digits for the second half of the year, while maintaining conservative credit standards[6] Financial Performance Analysis Balance Sheet Analysis In Q2 2025, total assets grew by $3.1 billion, primarily driven by a $2.3 billion increase in loans funded by a $2.2 billion rise in deposits, maintaining a 91.4% loans-to-deposits ratio - Total assets increased by $3.1 billion, total loans by $2.3 billion, and total deposits by $2.2 billion in Q2 2025 compared to Q1 2025[19][20] - The loans-to-deposits ratio was 91.4% at the end of Q2 2025[20] - The company issued $425 million of Series F Preferred Stock on May 22, 2025, in anticipation of redeeming $412.5 million of Series D and Series E preferred stock on July 15, 2025[21] Net Interest Income Analysis Net interest income for Q2 2025 rose to $546.7 million, primarily fueled by a $1.9 billion increase in average earning assets, with the net interest margin remaining stable at 3.52% (3.54% FTE) Net Interest Income and Margin (Q2 2025 vs Q1 2025) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $546.7M | $526.5M | +$20.2M | | Net Interest Margin (NIM) | 3.52% | 3.54% | -2 bps | | NIM (FTE, non-GAAP) | 3.54% | 3.56% | -2 bps | - The increase in NII was mainly due to a $1.9 billion growth in average earning assets, representing a 12% annualized increase[23] Asset Quality Asset quality remained strong and stable in Q2 2025, with a lower provision for credit losses of $22.2 million and stable net charge-offs at 11 basis points, despite a slight increase in non-performing assets Credit Quality Metrics (Q2 2025 vs Q1 2025) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Provision for Credit Losses | $22.2M | $24.0M | | Net Charge-offs | $13.3M | $12.6M | | Net Charge-offs to Avg. Loans (annualized) | 0.11% | 0.11% | | Non-performing Assets to Total Assets | 0.31% | 0.30% | - The allowance for credit losses increased to $457.5 million from $448.4 million at the end of Q1 2025[26] - Non-performing loans totaled $188.8 million, or 0.37% of total loans, at the end of Q2 2025, up from $172.4 million (0.35%) in Q1 2025[30] Non-Interest Income Analysis Non-interest income increased by $7.5 million to $124.1 million in Q2 2025, driven by growth in wealth management, mortgage banking, and fees from covered call options Non-Interest Income Breakdown (Q2 2025 vs Q1 2025) | Category | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Total Non-Interest Income | $124.1M | $116.6M | +$7.5M | | Wealth Management Revenue | $36.8M | $34.0M | +$2.8M | | Mortgage Banking Revenue | $23.2M | $20.5M | +$2.6M | | Fees from Covered Call Options | $5.6M | $3.4M | +$2.2M | Non-Interest Expense Analysis Non-interest expense rose by $15.4 million to $381.5 million in Q2 2025, primarily due to increases in salaries and employee benefits and seasonal advertising and marketing expenses Non-Interest Expense Breakdown (Q2 2025 vs Q1 2025) | Category | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Total Non-Interest Expense | $381.5M | $366.1M | +$15.4M | | Salaries and Employee Benefits | - | - | +$8.0M | | Advertising and Marketing | $18.8M | $12.3M | +$6.5M | - Advertising and marketing expenses are typically higher in the second and third quarters due to seasonal sponsorships[39] Income Taxes The company recorded income tax expense of $71.6 million in Q2 2025, with an effective tax rate of 26.79%, higher than Q1 due to a smaller net excess tax benefit from share-based compensation Income Tax Metrics (Q2 2025 vs Q1 2025) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Income Tax Expense | $71.6M | $64.0M | | Effective Tax Rate | 26.79% | 25.30% | | Net Excess Tax Benefit | $80,000 | $3.7M | Business Segment Review Community Banking The Community Banking segment experienced growth in its loan portfolios and increased mortgage banking revenue in Q2 2025, with solid loan pipelines indicating continued momentum - Mortgage banking revenue increased by $2.6 million to $23.2 million in Q2 2025[44] - Service charges on deposit accounts were stable at $19.5 million[44] - Gross commercial and commercial real estate loan pipelines remained strong, suggesting continued loan growth in Q3 2025[44] Specialty Finance The Specialty Finance segment showed strong activity in Q2 2025, with insurance premium financing originations reaching $6.1 billion and growth in the leasing division's portfolio - Insurance premium financing receivables originations totaled $6.1 billion in Q2 2025[45] - The leasing division's portfolio balances increased, with capital leases, loans, and equipment on operating leases reaching $2.8 billion, $1.2 billion, and $289.8 million, respectively[45] Wealth Management The Wealth Management segment reported total revenue of $36.8 million in Q2 2025, managing approximately $53.2 billion of assets under administration Wealth Management Metrics (Q2 2025) | Metric | Value | | :--- | :--- | | Revenue | $36.8 million | | Assets Under Administration | $53.2 billion | Financial Tables Key Operating Measures & Selected Financial Highlights Wintrust reported strong key operating measures for Q2 2025, including a 28% YoY increase in net income to $195.5 million and significant balance sheet growth, with total assets reaching $69.0 billion Key Operating Measures (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $195.5M | $152.4M | 28% | | Diluted EPS | $2.78 | $2.32 | 20% | | Net Revenue | $670.8M | $591.8M | 13% | | Total Assets | $69.0B | $59.8B | 15% | | Total Loans | $51.0B | $44.7B | 14% | | Total Deposits | $55.8B | $48.0B | 16% | Key Financial Ratios (Q2 2025) | Ratio | Value | | :--- | :--- | | Net Interest Margin | 3.52% | | Return on Average Assets | 1.19% | | Return on Average Common Equity | 12.07% | | Book Value per Common Share | $95.43 | | Tangible Book Value per Common Share (non-GAAP) | $81.86 | Consolidated Financial Statements The Consolidated Statement of Condition as of June 30, 2025, shows total assets of $69.0 billion and total deposits of $55.8 billion, while the Consolidated Statement of Income for Q2 2025 reports net income of $195.5 million Consolidated Statement of Condition Highlights (as of June 30, 2025) | Account | Amount (in thousands) | | :--- | :--- | | Assets | | | Total Assets | $68,983,318 | | Net Loans | $50,650,025 | | Liabilities & Equity | | | Total Deposits | $55,816,811 | | Total Liabilities | $61,757,622 | | Total Shareholders' Equity | $7,225,696 | Consolidated Statement of Income Highlights (for Three Months Ended June 30, 2025) | Account | Amount (in thousands) | | :--- | :--- | | Net Interest Income | $546,694 | | Provision for Credit Losses | $22,234 | | Non-interest Income | $124,089 | | Non-interest Expense | $381,461 | | Net Income | $195,527 | Detailed Loan and Deposit Analysis Total loans grew to $51.0 billion in Q2 2025, a 19% annualized increase, with broad-based growth across core and niche loans, while total deposits increased to $55.8 billion, driven by money market and NOW accounts - Total loans reached $51.0 billion, a 19% annualized growth from Q1 2025. Core loans grew 11% and niche loans grew 31% on an annualized basis[56] - Total deposits grew to $55.8 billion, a 17% annualized increase from Q1 2025. Non-interest-bearing deposits decreased by 12% annualized, now comprising 19% of the total deposit mix, down from 21% in Q1[59] - As of June 30, 2025, the company held $10.3 billion in time certificates of deposit with a weighted-average rate of 3.78%. The largest tranche, $4.5 billion, is set to mature in 4-6 months[61] Detailed Net Interest Income and Margin Analysis In Q2 2025, average earning assets grew to $62.2 billion, driving a $20.2 million increase in net interest income to $546.7 million, with a stable fully taxable-equivalent net interest margin of 3.54% Quarterly Average Balances (Q2 2025 vs Q1 2025) | Category | Q2 2025 (Avg) | Q1 2025 (Avg) | | :--- | :--- | :--- | | Total Earning Assets | $62.2B | $60.3B | | Total Loans | $49.5B | $47.8B | | Total Interest-bearing Liabilities | $46.9B | $45.4B | | Non-interest-bearing Deposits | $10.6B | $10.7B | Quarterly Net Interest Margin Analysis (Q2 2025) | Metric | Value | | :--- | :--- | | Yield on Earning Assets | 5.96% | | Rate on Interest-bearing Liabilities | 3.20% | | Interest Rate Spread | 2.76% | | Net Interest Margin (GAAP) | 3.52% | | Net Interest Margin (FTE, non-GAAP) | 3.54% | Interest Rate Sensitivity The company's interest rate sensitivity profile remains relatively neutral, with minimal projected impact on net interest income from gradual rate changes, as most variable-rate loans are tied to SOFR and CMT indices Net Interest Income Sensitivity (Ramp Scenario, as of June 30, 2025) | Rate Change | % Change in NII | | :--- | :--- | | +200 bps | 0.0% | | +100 bps | 0.0% | | -100 bps | (0.1)% | | -200 bps | (0.4)% | - Of the $51.0 billion total loan portfolio, $30.8 billion are variable-rate loans[78] - The largest portion of variable-rate loans is tied to SOFR tenors ($19.5 billion), followed by the 12-month CMT ($6.9 billion)[78] Detailed Asset Quality Analysis The allowance for credit losses stood at $457.5 million at the end of Q2 2025, with stable net charge-offs and increased non-performing loans, maintaining strong ACL coverage Allowance for Credit Losses Rollforward (Q2 2025) | Item | Amount (in thousands) | | :--- | :--- | | Beginning ACL (Q1'25) | $448,387 | | Provision for Credit Losses | $22,234 | | Net Charge-offs | ($13,340) | | Ending ACL (Q2'25) | $457,461 | - The allowance for core loans was 1.37% of the total core loan balance, stable from Q1 2025[85] - Total non-performing loans increased to $188.8 million (0.37% of total loans) from $172.4 million (0.35% of total loans) in the prior quarter[87][89] Detailed Non-Interest Income and Expense Analysis Total non-interest income for Q2 2025 increased by 6% to $124.1 million, driven by wealth management and mortgage banking, while total non-interest expense rose 4% to $381.5 million due to salaries and advertising Non-Interest Income Key Items (Q2 2025 vs Q1 2025) | Category | Q2 2025 | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | | Total Non-Interest Income | $124.1M | $116.6M | 6% | | Wealth Management | $36.8M | $34.0M | 8% | | Mortgage Banking | $23.2M | $20.5M | 13% | Non-Interest Expense Key Items (Q2 2025 vs Q1 2025) | Category | Q2 2025 | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | | Total Non-Interest Expense | $381.5M | $366.1M | 4% | | Salaries and Employee Benefits | $219.5M | $211.5M | 4% | | Advertising and Marketing | $18.8M | $12.3M | 53% | - Mortgage originations for sale increased to $681.5 million in Q2 2025 from $460.5 million in Q1 2025, with the production margin improving to 2.07% from 1.80%[94] Supplementary Information Non-GAAP Financial Measures The company utilizes non-GAAP measures such as taxable-equivalent net interest margin (3.54%), tangible book value per common share ($81.86), and pre-tax, pre-provision income ($289.3 million) to provide a more meaningful view of core performance and equity Key Non-GAAP Metrics (Q2 2025) | Metric | Value | | :--- | :--- | | Net Interest Margin, FTE | 3.54% | | Tangible Book Value per Common Share | $81.86 | | Return on Average Tangible Common Equity | 14.44% | | Pre-tax, Pre-provision Income | $289.3M | - Management believes non-GAAP measures like tangible common equity ratio and tangible book value per common share are useful for measuring the company's equity, while pre-tax, pre-provision income is a useful measure of core net income[99][100] Corporate Information and Forward-Looking Statements Wintrust Financial Corporation operates through 16 community bank subsidiaries and various non-bank businesses, with its forward-looking statements subject to economic, regulatory, and market risks, and a conference call scheduled for July 22, 2025 - Wintrust operates 16 community bank subsidiaries and several non-bank businesses like FIRST Insurance Funding, Wintrust Mortgage, and Great Lakes Advisors LLC[103][105] - The document includes a safe harbor statement for forward-looking statements, noting that actual results could differ materially due to various factors including economic conditions, interest rate changes, and competitive pressures[104][106] - A conference call to discuss the Q2 2025 earnings is scheduled for July 22, 2025[109]