Financial Performance - Interest income for the three months ended September 30, 2025, was $952,408, an increase from $898,295 for the same period in 2024, representing a growth of 6.0%[97] - Net interest income for the three months ended September 30, 2025, was $555,584, up from $492,274 in 2024, reflecting a year-over-year increase of 12.8%[97] - Non-interest income for the three months ended September 30, 2025, totaled $154,391, compared to $133,341 in 2024, marking a growth of 15.8%[97] - For the nine months ended September 30, 2025, net income was $600,820, compared to $509,683 for the same period in 2024, representing an increase of 17.9%[98] - The company reported an income before taxes of $296,041 for the three months ended September 30, 2025, up from $232,709 in 2024, indicating a growth of 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 year-over-year increase of 27.2%[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, indicating a growth of 15.8%[171] Asset and Liability Management - Total assets at the end of September 30, 2025, were $69,629,638, an increase from $63,788,424 at the end of September 30, 2024, indicating a growth of 9.5%[97] - The total financial liabilities as of September 30, 2025, were $61,205,278 thousand, with a fair value of $61,242,314 thousand[156] - The carrying value of loans held-for-investment at amortized cost was $51,933,889 thousand, with a fair value of $51,255,561 thousand[156] - The total fair value of assets measured at fair value on a recurring basis was $6.22 billion as of September 30, 2025[145] Derivative Financial Instruments - The company utilized various derivative financial instruments to manage interest rate risk, including interest rate swaps and options, enhancing overall yield on investment securities[99][100][101][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 reported $65.300 million in derivatives designated as hedging instruments under ASC 815 as of September 30, 2025, a significant increase from $17.330 million as of December 31, 2024[104] - Interest rate derivatives designated as cash flow hedges amounted to $59.667 million as of September 30, 2025, up from $7.329 million at the end of 2024[104] - The total notional amount of cash flow hedges as of September 30, 2025, was $7.1 billion, with a fair value of $54.717 million[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 had 13 interest rate swaps designated as fair value hedges with an aggregate notional amount of $119.2 million as of September 30, 2025[112] - The cumulative amount of fair value hedging adjustment included in the carrying amount of hedged assets was $(5.031) million as of September 30, 2025[114] - The unrealized gain at the end of the period for cash flow hedges was $76.809 million as of September 30, 2025, compared to $75.452 million for the same period in 2024[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 recorded in accumulated other comprehensive income[109] - Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings, reflecting the Company's strategy to manage economic exposure to interest rate movements[115] - As of September 30, 2025, the Company had interest rate derivative transactions with an aggregate notional amount of approximately $14.8 billion, up from $13.3 billion as of December 31, 2024[116] - The Company reported interest rate lock commitments with an aggregate notional amount of approximately $379.1 million as of September 30, 2025, compared to $120.7 million as of December 31, 2024[117] - The Company had forward commitments to sell mortgage loans with an aggregate notional amount of approximately $495.5 million as of September 30, 2025, increasing from $377.5 million as of December 31, 2024[117] - The Company held commodity derivative transactions with an aggregate notional amount of approximately $4.6 million as of September 30, 2025, down from $5.2 million as of December 31, 2024[118] - The Company reported foreign currency derivatives with an aggregate notional amount of approximately $50.5 million as of September 30, 2025, decreasing from $97.1 million as of December 31, 2024[119] - The Company recorded a net liability position of $1.6 million for derivatives subject to cross-default provisions as of September 30, 2025[127] - The fair value of interest rate derivatives was $201.3 million in assets and $246.9 million in liabilities as of September 30, 2025[129] - The Company experienced trading gains (losses) of $92, $(245), and $60 for interest rate swaps and caps for the three months ended September 30, 2025, 2024, and nine months ended September 30, 2025, respectively[122] - The Company had mortgage banking derivatives losses of $(584) for the three months ended September 30, 2024, and gains of $2,733 for the nine months ended September 30, 2025[122] - The Company’s net credit exposure for interest rate derivatives was $75.8 million as of September 30, 2025, compared to $41.7 million as of December 31, 2024[129] Fair Value Measurements - As of September 30, 2025, the Company classified $129.8 million of municipal securities as Level 3, with all derived ratings being "BBB" or better[135] - The Company classified $54.7 million of certain delinquent mortgage loans held-for-sale as Level 3, with a weighted average discount rate of 5.14%[137] - The fair value of loans held-for-investment was $129.6 million as of September 30, 2025, down from $158.8 million as of December 31, 2024[147] - The Company classified $190.9 million of mortgage servicing rights (MSRs) as Level 3, with a weighted average discount rate of 10.43%[140] - The aggregate remaining contractual principal balance for mortgage loans held-for-sale was $339.1 million as of September 30, 2025[146] - The weighted average prepayment speed for MSRs was 9.44% at September 30, 2025, with prepayment speeds ranging from 0%-86%[140] - The Company classified $7.1 million of derivative assets related to interest rate locks as Level 3, with a weighted-average pull-through rate of 84.88%[142] - The Company used a weighted average credit discount of 1.29% for delinquent mortgage loans held-for-sale, with credit loss discounts ranging from 0%-26%[137] - As of September 30, 2025, the balance of Level 3 assets includes $129.8 million in municipal securities, $54.7 million in mortgage loans held-for-sale, $49.2 million in loans held-for-investment, $190.9 million in mortgage servicing rights, and $7.1 million in derivative assets[148] - The total net losses recognized in net income for the three months ended September 30, 2025, amounted to $2.1 million for mortgage loans held-for-sale and $1.6 million for derivative assets[148] - Individually assessed loans classified as Level 3 totaled $125.0 million, all measured at fair value based on the underlying collateral[152] - The Company reported fair value losses of $21.5 million for the three months and $42.7 million for the nine months ended September 30, 2025, related to individually assessed loans[150] - Other real estate owned classified as Level 3 was valued at $24.8 million, with a 10% reduction applied to the appraisal value representing estimated selling costs[154] - The valuation of mortgage loans held-for-sale is based on a discount rate of 5.14%, with a credit discount range of 0% to 26%[155] - The Company recorded total fair value losses of $149.8 million, with $124.9 million attributed to individually assessed loans and $24.8 million to other real estate owned[150] - The average life of delinquent loans is reported to be between 1.6 years and 11.7 years[155] - The Company made purchases of $14.7 million in Level 3 assets during the three months ended September 30, 2025[148] - The total balance of mortgage loans held-for-sale increased from $27.2 million on July 1, 2025, to $54.7 million by September 30, 2025[148] Stock-Based Compensation - Stock-based compensation expense for Q3 2025 was $10.1 million, compared to $9.5 million in Q3 2024, reflecting a year-over-year increase of approximately 6.3%[165] - The aggregate intrinsic value of options exercised during the nine months ended September 30, 2025, was approximately $467,000, significantly higher than $50,000 for the same period in 2024[167] - As of September 30, 2025, there were 2,184,000 shares available for future grants under the Company Stock Incentive Plans[164] - The Company granted 256,762 restricted shares with a grant-date fair value of $133.15 during the nine months ended September 30, 2025[168] - The total number of outstanding restricted shares at a weighted average grant-date fair value of $101.71 as of September 30, 2025, was 895,196[168] Dividends and Comprehensive Income - The company declared a quarterly cash dividend of $0.50 per share, amounting to an annualized dividend of $2.00, paid on February 20, May 22, and August 21, 2025[172] - 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 ended September 30, 2025, was $51,425,000, compared to $47,709,000 for the previous period[169] - The total amount reclassified from accumulated other comprehensive income into net income for the three months ended September 30, 2025, was $3,723,000, compared to $39,000 for the same period in 2024[170] Business Outlook and Risks - The company anticipates future growth through potential acquisitions and internal growth strategies, including the formation of additional de novo banks or branch offices[291] - The company expects that changes in inflation will not have a material impact on its business compared to changes in interest rates[290] - The company is facing challenges related to commercial real estate market conditions in the Chicago metropolitan area, southern Wisconsin, and west Michigan[292] - 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 is affected by changes in interest rates, which could materially impact net interest income and net interest margin, potentially harming profitability[292] - Competitive pressures in the financial services sector may lead to reduced income from deposits, loans, and advisory fees[292] - The company may encounter difficulties in identifying and completing favorable acquisitions, which could affect future growth[292] - There are risks associated with security breaches and cyberattacks that could adversely affect the company's operations and reputation[292] - The company faces potential liabilities and reputational harm related to the closing of existing branches and the opening of new ones[292] - Changes in regulatory environments and accounting standards may impact the company's financial statements and operations[292] - The company must navigate increased compliance costs and regulatory capital requirements due to evolving regulations[292] - The company is subject to risks associated with the soundness of other financial institutions, which could affect overall market stability[292]
Wintrust Financial Corp Series F Pfd(WTFCN) - 2025 Q3 - Quarterly Report