Wintrust(WTFC) - 2025 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2025, the total interest income was $952,408,000, an increase from $898,295,000 for the same period in 2024, representing a growth of approximately 6%[97] - Net interest income for the three months ended September 30, 2025, was $567,010,000, up from $502,583,000 in the prior year, reflecting an increase of about 12.8%[97] - For the nine months ended September 30, 2025, net income was $600,820,000, an increase from $509,683,000 in the same period of 2024, representing a growth of approximately 17.9%[98] - The income before taxes for the three months ended September 30, 2025, was $296,041,000, up from $232,709,000 in the same period of 2024, indicating an increase of approximately 27.2%[97] - Net income for the three months ended September 30, 2025, was $216,254,000, compared to $170,001,000 for the same period in 2024, representing a 27.2% increase[171] - The company reported a net income applicable to common shares of $188,913,000 for the three months ended September 30, 2025, compared to $163,010,000 for the same period in 2024, a 15.8% increase[171] Asset and Liability Management - Total assets at the end of the period on September 30, 2025, were $69,629,638,000, up from $63,788,424,000 a year earlier, indicating a growth of about 9.5%[97] - The total non-interest expense for the three months ended September 30, 2025, was $380,028,000, compared to $360,687,000 in the prior year, reflecting an increase of about 5.3%[97] - Total financial liabilities reached $61,205,278 thousand, with a fair value of $61,242,314 thousand as of September 30, 2025[156] - The aggregate remaining contractual principal balance for loans held-for-investment was $126.4 million as of September 30, 2025, with a fair value of $129.6 million[147] Derivative Financial Instruments - The company utilizes various derivative financial instruments, including interest rate swaps and options, to manage interest rate risk and enhance yield on securities[99][100][101] - The company recognizes derivative financial instruments at fair value in its consolidated financial statements, impacting either income or shareholders' equity depending on hedge accounting qualifications[102] - As of September 30, 2025, the fair value of the Company's derivative financial instruments totaled $208.957 million, compared to $200.027 million as of December 31, 2024, and $255.662 million as of September 30, 2024[104] - The Company had $65.300 million in derivatives designated as hedging instruments under ASC 815 as of September 30, 2025, an increase from $17.330 million in December 31, 2024[104] - Interest rate derivatives designated as cash flow hedges amounted to $59.667 million as of September 30, 2025, significantly up from $7.329 million as of December 31, 2024[104] - The total cash flow hedges had a notional amount of $7.1 billion with a fair value of $54.717 million as of September 30, 2025[108] - The Company expects to reclassify $22.8 million from accumulated other comprehensive income to net interest income over the next 12 months[111] - The Company terminated interest rate swap derivative contracts with a total notional value of $1.5 billion in 2022, resulting in a fair value adjustment of $77.2 million recorded in accumulated other comprehensive income[109][110] Credit Losses and Risk Management - The provision for credit losses for the three months ended September 30, 2025, was $21,768,000, slightly down from $22,334,000 in the same period of 2024[97] - The Company’s counterparty credit risk is managed through established exposure limits and ongoing monitoring of financial performance[126] - There is a risk of increased delinquencies and declines in real estate values, which may necessitate further increases in the company's allowance for credit losses[292] - The company faces challenges related to the accuracy and completeness of customer information used for credit decisions[292] Stock and Shareholder Information - Stock-based compensation expense for Q3 2025 was $10.1 million, compared to $9.5 million in Q3 2024, marking a year-over-year increase of 6.3%[165] - The aggregate intrinsic value of options exercised in the nine months ended September 30, 2025, was approximately $467,000, significantly higher than $50,000 in the same period of 2024[167] - Outstanding restricted shares as of September 30, 2025, were 895,196 shares, with a weighted average grant-date fair value of $101.71[168] - Basic earnings per share for the three months ended September 30, 2025, was $2.82, up from $2.51 in the same period of 2024, reflecting a 12.3% increase[171] - The company declared a quarterly cash dividend of $0.50 per share, amounting to an annualized dividend of $2.00, paid on February 20, 2025[172] Comprehensive Income and Other Financial Metrics - The accumulated other comprehensive income (loss) balance at September 30, 2025, was $(314,808,000), a decrease from $(366,233,000) at July 1, 2025[169] - The net other comprehensive income during the period, net of tax, was $51,425,000 for the three months ended September 30, 2025[169] - The total amount reclassified from accumulated other comprehensive income into net income, net of tax, was $3,723,000 for the three months ended September 30, 2025[170] Future Outlook and Risks - The company anticipates future growth through potential acquisitions and internal growth strategies, as indicated in its forward-looking statements[291] - The company is facing competitive pressures in the financial services sector, which may affect loan and deposit pricing, potentially leading to a loss of market share and reduced income from various products[292] - The company is concerned about the impact of changes in interest rates on net interest income and net interest margin, which could adversely affect profitability[292] - The company may encounter difficulties in identifying and completing favorable acquisitions, which could lead to unexpected losses[292] - There are potential risks associated with cybersecurity, including breaches and data corruption attempts, which could impact the company's operations[292] - The company is subject to regulatory changes that may affect its ability to market products and operate profitably in the mortgage business[292] - The company may experience increased costs related to compliance and regulatory capital requirements[292]