WINTRUST FINL(WTFCP) - 2025 Q2 - Quarterly Results

Financial Highlights Wintrust Financial Corporation reported record net income of $195.5 million for Q2 2025 and $384.6 million for the first half, driven by balance sheet growth and stable net interest margin Q2 and First Half 2025 Performance Summary (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $195.5 | $152.4 | $384.6 | $339.7 | | Diluted EPS | $2.78 | $2.32 | $5.47 | $5.21 | | Pre-tax, Pre-provision Income (non-GAAP) | $289.3 | $251.4 | $566.3 | $523.0 | - CEO Timothy S. Crane attributed the record results to a combination of balance sheet growth and a stable net interest margin, which remained within the expected range at 3.54% (fully taxable-equivalent)[4] Q2 2025 vs Q1 2025 Key Changes | Metric | Change | Annualized Growth (%) | | :--- | :--- | :--- | | Total Loans | +$2.3 billion | 19 | | Total Deposits | +$2.2 billion | 17 | | Total Assets | +$3.1 billion | 19 | | Net Interest Income | +$20.2 million | N/A | - The company expects continued momentum into the third quarter, driven by loan growth from Q2, a strong core deposit franchise, and disciplined expense control[6] Financial Condition and Results of Operations The company demonstrated robust balance sheet growth, with significant increases in loans and deposits, while maintaining strong asset quality and stable net interest margin Balance Sheet Total assets increased by $3.1 billion in Q2 2025, driven by a $2.3 billion rise in loans and a $2.2 billion increase in deposits, with the loan-to-deposit ratio ending at 91.4% - Total assets grew by $3.1 billion, total loans by $2.3 billion, and total deposits by $2.2 billion compared to Q1 2025[19][20] - The loan growth was funded by deposit growth, resulting in a stable loans-to-deposits ratio of 91.4%[20][6] - On May 22, 2025, the company issued $425 million of Series F Preferred Stock to redeem $412.5 million of higher-cost Series D and E preferred stock[21] Net Interest Income Net interest income for Q2 2025 rose by $20.2 million to $546.7 million, primarily due to a $1.9 billion growth in average earning assets, with the net interest margin remaining largely stable at 3.52% Q2 2025 Net Interest Income & Margin (in millions, except basis points) | Metric | Q2 2025 | Change from Q1 2025 | | :--- | :--- | :--- | | Net Interest Income | $546.7 | +$20.2 | | Net Interest Margin (NIM) | 3.52% | -2 bps | | NIM (FTE, non-GAAP) | 3.54% | -2 bps | - The increase in NII was mainly due to a 12% annualized growth in average earning assets[23] - The slight decline in NIM was attributed to a 5 basis point decrease in loan yields and a 2 basis point decline in net free funds contribution, partially offset by a 2 basis point reduction in funding costs on interest-bearing deposits[24] Asset Quality Asset quality remained strong and stable in Q2 2025, with the allowance for credit losses increasing to $457.5 million and net charge-offs stable at 0.11% of average loans Q2 2025 Asset Quality Metrics (in millions, except percentages) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Allowance for Credit Losses | $457.5 | $448.4 | | Provision for Credit Losses | $22.2 | $24.0 | | Net Charge-offs | $13.3 | $12.6 | | Net Charge-offs to Avg. Loans | 0.11% | 0.11% | | Non-performing Assets to Total Assets | 0.31% | 0.30% | | Non-performing Loans to Total Loans | 0.37% | 0.35% | - The lower provision for credit losses compared to Q1 was primarily due to a more stable macroeconomic outlook, which was partially offset by portfolio growth and qualitative additions reflecting wider credit spreads[26] Non-Interest Income 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 - Total non-interest income rose to $124.1 million, a $7.5 million increase from Q1 2025[31] - Wealth management revenue grew by $2.8 million due to higher asset valuations and increased activity following a system transition[32] - Mortgage banking revenue increased by $2.7 million, driven by higher origination volumes and improved production margins[33] - Fees from covered call options on U.S. Treasury and agency securities increased by $2.2 million[34] Non-Interest Expense Non-interest expense rose by $15.4 million to $381.5 million in Q2 2025, primarily due to higher salaries, employee benefits, and seasonal advertising expenses - Total non-interest expense increased by $15.4 million to $381.5 million in Q2 2025, while remaining stable as a percentage of average assets at 2.32%[37] - Salaries and employee benefits expense increased by $8.0 million, driven by higher health insurance claims and increased commissions in mortgage and wealth management[38] - Advertising and marketing expenses increased by $6.5 million due to seasonal summer sports and community sponsorships[39] Income Taxes The company recorded income tax expense of $71.6 million in Q2 2025, resulting in an effective tax rate of 26.79%, an increase from the prior quarter Q2 2025 Tax Expense and Rate (in millions, except percentages) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Income Tax Expense | $71.6 | $64.0 | | Effective Tax Rate | 26.79% | 25.30% | | Net Excess Tax Benefits | $0.08 | $3.7 | Business Summary All three of Wintrust's primary business segments—Community Banking, Specialty Finance, and Wealth Management—demonstrated positive performance in the second quarter Community Banking The Community Banking segment saw solid loan growth across portfolios and increased mortgage banking revenue, with strong pipelines indicating continued Q3 momentum - Mortgage banking revenue increased to $23.2 million in Q2 2025, up $2.6 million from Q1 2025[44] - Service charges on deposit accounts were stable at $19.5 million[44] Specialty Finance The Specialty Finance segment achieved strong insurance premium financing originations of $6.1 billion and growth in its leasing portfolio, with total balances reaching $4.3 billion - Insurance premium financing receivables originations totaled $6.1 billion in Q2 2025[45] - Leasing division portfolio balances increased, with capital leases, loans, and equipment on operating leases totaling $2.8 billion, $1.2 billion, and $289.8 million, respectively[45] Wealth Management The Wealth Management segment's revenue increased to $36.8 million in Q2 2025, with total assets under administration reaching approximately $53.2 billion Wealth Management Q2 2025 Metrics | Metric | Value | | :--- | :--- | | Revenue | $36.8 million | | Assets Under Administration | $53.2 billion | Items Impacting Comparative Financial Results The acquisition of Macatawa Bank on August 1, 2024, significantly impacts year-over-year comparisons, adding approximately $2.9 billion in assets and $2.3 billion in deposits - The acquisition of Macatawa was completed on August 1, 2024[47] - At acquisition, Macatawa had fair values of approximately $2.9 billion in assets, $2.3 billion in deposits, and $1.3 billion in loans[47] Financial Tables This section provides detailed financial tables supporting the earnings release, including key operating measures, consolidated statements, and granular portfolio breakdowns Key Operating Measures This table presents key operating measures and growth rates for Q2 2025, with comparisons to the sequential quarter (Q1 2025) and the linked quarter (Q2 2024) Key Operating Measures (Dollars in thousands, except per share data) | | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Net income | $195,527 | $189,039 | $152,388 | | Net income per common share – Diluted | $2.78 | $2.69 | $2.32 | | Net interest margin | 3.52% | 3.54% | 3.50% | | Return on average assets | 1.19% | 1.20% | 1.07% | | Return on average common equity | 12.07% | 12.21% | 11.61% | | Total assets | $68,983,318 | $65,870,066 | $59,781,516 | | Total loans | $51,041,679 | $48,708,390 | $44,675,531 | | Total deposits | $55,816,811 | $53,570,038 | $48,049,026 | Selected Financial Highlights This table summarizes selected financial data, ratios, and other key metrics for the last five quarters and the six-month periods ended June 30, 2025 and 2024 Selected Financial Highlights (Dollars in thousands, except per share data) | | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total assets | $68,983,318 | $65,870,066 | $64,879,668 | $59,781,516 | | Total loans | $51,041,679 | $48,708,390 | $48,055,037 | $44,675,531 | | Total deposits | $55,816,811 | $53,570,038 | $52,512,349 | $48,049,026 | | Net income | $195,527 | $189,039 | $185,362 | $152,388 | | Net income per common share – Diluted | $2.78 | $2.69 | $2.63 | $2.32 | | Book value per common share | $95.43 | $92.47 | $89.21 | $82.97 | Consolidated Statements of Condition This table presents the company's unaudited consolidated balance sheets as of the end of the last five quarters, detailing assets, liabilities, and shareholders' equity Consolidated Statements of Condition (Balance Sheet, in thousands) | | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Total assets | $68,983,318 | $65,870,066 | $59,781,516 | | Net loans | $50,650,025 | $48,330,183 | $44,311,812 | | Total deposits | $55,816,811 | $53,570,038 | $48,049,026 | | Total liabilities | $61,757,622 | $59,269,529 | $54,244,888 | | Total shareholders' equity | $7,225,696 | $6,600,537 | $5,536,628 | Consolidated Statements of Income This table presents the company's unaudited consolidated income statements for the last five quarters and the six-month periods ended June 30, 2025 and 2024 Consolidated Statements of Income (in thousands) | | Three Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Net interest income | $546,694 | $1,073,168 | $934,804 | | Provision for credit losses | $22,234 | $46,197 | $61,734 | | Total non-interest income | $124,089 | $240,723 | $261,727 | | Total non-interest expense | $381,461 | $747,551 | $673,498 | | Net income | $195,527 | $384,566 | $339,682 | Loan Portfolio This table details the composition and growth rates of the company's loan portfolio, broken down by core loans and niche loans, showing total loans grew 19% annualized from Q1 2025 Loan Portfolio Mix (as of June 30, 2025, in thousands) | Loan Category | Balance | % of Total Loans | | :--- | :--- | :--- | | Core loans | $29,928,663 | 58.6% | | Commercial & Industrial | $7,028,247 | 13.8% | | Commercial Real Estate | $10,511,066 | 20.6% | | Niche loans | $21,113,016 | 41.4% | | U.S. P&C Premium Finance | $7,378,340 | 14.5% | | Life Insurance Premium Finance | $8,506,960 | 16.7% | | Total loans | $51,041,679 | 100.0% | Deposit Portfolio These tables provide a breakdown of the deposit portfolio by type and its growth rates, along with a maturity analysis for time certificates of deposit, showing total deposits grew 17% annualized from Q1 2025 Deposit Portfolio Mix (as of June 30, 2025, in thousands) | Deposit Category | Balance | % of Total Deposits | | :--- | :--- | :--- | | Non-interest-bearing | $10,877,166 | 19% | | Money market | $19,556,041 | 35% | | Time certificates of deposit | $10,332,696 | 19% | | Other Interest-bearing | $15,050,908 | 27% | | Total deposits | $55,816,811 | 100% | Time Certificates of Deposit Maturity (as of June 30, 2025, in thousands) | Maturity Period | Total Balance | Weighted-Average Rate (%) | | :--- | :--- | :--- | | 1-3 months | $2,486,694 | 3.92 | | 4-6 months | $4,464,126 | 3.80 | | 7-12 months | $2,958,479 | 3.72 | | Total | $10,332,696 | 3.78 | Net Interest Margin Analysis This section provides a detailed analysis of net interest income and margin, including average balances, yields, and rates, showing a stable NIM with asset growth driving higher NII Quarterly Net Interest Margin (GAAP) | Quarter | Net Interest Margin (%) | | :--- | :--- | | Q2 2025 | 3.52 | | Q1 2025 | 3.54 | | Q4 2024 | 3.49 | | Q3 2024 | 3.49 | | Q2 2024 | 3.50 | - For the six months ended June 30, 2025, the net interest margin was 3.53%, identical to the same period in 2024, while net interest income grew from $934.8 million to $1,073.2 million[71] Interest Rate Sensitivity These tables show the company's sensitivity of net interest income to interest rate changes and the repricing characteristics of its loan portfolio, indicating a relatively neutral interest rate risk profile Interest Rate Sensitivity (Ramp Scenario, % Change in NII) | Scenario | Jun 30, 2025 | | :--- | :--- | | +200 Basis Points | 0.0% | | +100 Basis Points | 0.0% | | -100 Basis Points | (0.1)% | | -200 Basis Points | (0.4)% | - Of the $51.0 billion total loan portfolio, $30.8 billion are variable rate loans and $20.2 billion are fixed rate, with the majority of variable rate loans tied to SOFR ($19.5 billion) and CMT ($6.9 billion) indices[78] Asset Quality Tables This section provides a comprehensive look at asset quality through several tables, confirming strong and stable credit quality with low levels of problem loans Allowance for Credit Losses Roll-forward (Q2 2025, in thousands) | Component | Amount | | :--- | :--- | | Beginning Balance (Mar 31, 2025) | $448,387 | | Provision for credit losses | $22,234 | | Net charge-offs | ($13,340) | | Other adjustments | $180 | | Ending Balance (Jun 30, 2025) | $457,461 | - Total non-performing loans were $188.8 million, or 0.37% of total loans, as of June 30, 2025, a slight increase from $172.4 million (0.35%) at March 31, 2025[87] - The allowance for loan and unfunded commitment losses as a percentage of non-accrual loans was a healthy 262.71% at the end of Q2 2025[87] Non-Interest Income and Expense Tables These tables offer a detailed breakdown of non-interest income and expense components, with key drivers for income changes being wealth management and mortgage, and expense changes driven by salaries and seasonal advertising Non-Interest Income Breakdown (Q2 2025 vs Q1 2025, in thousands) | Category | Q2 2025 | Q1 2025 | $ Change | | :--- | :--- | :--- | :--- | | Wealth management | $36,821 | $34,042 | +$2,779 | | Mortgage banking | $23,170 | $20,529 | +$2,641 | | Service charges | $19,502 | $19,362 | +$140 | | Total Non-Interest Income | $124,089 | $116,634 | +$7,455 | Non-Interest Expense Breakdown (Q2 2025 vs Q1 2025, in thousands) | Category | Q2 2025 | Q1 2025 | $ Change | | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $219,541 | $211,526 | +$8,015 | | Advertising and marketing | $18,761 | $12,272 | +$6,489 | | Total Non-Interest Expense | $381,461 | $366,090 | +$15,371 | - In mortgage banking, total originations for sale increased to $681.5 million in Q2 2025 from $460.5 million in Q1 2025, driving higher production revenue[94] Supplemental Non-GAAP Financial Measures/Ratios This section provides reconciliations for non-GAAP financial measures used by management, such as taxable-equivalent net interest margin and tangible common equity ratios, to their nearest GAAP equivalents Key Non-GAAP Ratios (Q2 2025) | Ratio | Value | | :--- | :--- | | Net interest margin, fully taxable equivalent | 3.54% | | Tangible common equity ratio | 8.0% | | Tangible book value per common share | $81.86 | | Return on average tangible common equity, annualized | 14.44% | - Pre-tax, pre-provision income, a measure of core earnings, was $289.3 million for Q2 2025, up from $277.0 million in Q1 2025[102] Company Overview and Disclosures This section lists Wintrust's 16 community bank subsidiaries and various non-bank businesses, along with a standard forward-looking statements disclaimer outlining numerous economic, market, and operational risks Wintrust Subsidiaries and Non-Bank Businesses Wintrust operates through 16 community bank subsidiaries across multiple states and manages several non-bank businesses specializing in diverse financial services - The company operates 16 community bank subsidiaries, including Barrington Bank & Trust, Lake Forest Bank & Trust, and Macatawa Bank[103] - Key non-bank businesses include FIRST Insurance Funding, Wintrust Life Finance, Tricom, Wintrust Mortgage, and Wintrust Investments, LLC[105] Forward-Looking Statements and Conference Call The report contains forward-looking statements subject to numerous risks and uncertainties, with the company scheduled to host a conference call on July 22, 2025, to discuss results - The document includes a safe harbor statement for forward-looking statements, noting that actual results could differ materially due to various risk factors[104] - Key risk factors cited include economic conditions, loan defaults, interest rate volatility, competitive pressures, and cybersecurity threats[106][107][110] - An earnings conference call is scheduled for Tuesday, July 22, 2025, at 10:00 a.m. (CDT), with access details provided[109]