• Net Income: $189 million for the first quarter.
• Net Interest Income: Record $526 million despite two fewer business days.
• Loan Growth: Over $650 million increase.
• Deposit Growth: Over $1.1 billion increase.
• Net Interest Margin: 3.56%, up 5 basis points from the previous quarter.
• Charge-offs: 11 basis points, down from the previous quarter.
• Provision for Credit Losses: $24 million, consistent with prior quarters.
• Non-Interest Income: $116.6 million, a $3.2 million increase from the previous quarter.
• Non-Interest Expenses: $366.1 million, a decrease of $2.4 million from the previous quarter.
• Tangible Book Value Per Share: $78.83, up from $75.39 in the prior quarter.
• CRE Office Exposure: $1.6 billion, 12.7% of total CRE portfolio.
• Dividend: Increased to $2 per share on an annualized basis.
• CET1 Ratio: Slightly over 10% at the end of the quarter.

• Warning! GuruFocus has detected 4 Warning Sign with WTFC.

Release Date: April 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Wintrust Financial Corp (NASDAQ:WTFC) reported a quarterly net income of $189 million and record net interest income of $526 million, despite two fewer business days in the quarter.
• The company achieved significant loan growth of over $650 million and deposit growth of over $1.1 billion, indicating strong market share gains.
• Net interest margin improved to 3.56%, up 5 basis points from the previous quarter, reflecting disciplined loan and deposit pricing.
• Credit performance remained solid with charge-offs down to 11 basis points and stable non-performing loans.
• Wintrust Financial Corp (NASDAQ:WTFC) increased its dividend to $2 per share on an annualized basis and continues to grow its capital ratio steadily.

Negative Points

• The economic environment remains uncertain, with potential impacts from tariffs, tax law changes, and funding cuts, which could affect future growth.
• There was a slight increase in the provision for credit losses due to the uncertain economic environment and potential impact of higher credit spreads.
• Non-interest income was relatively flat, with subdued mortgage banking activity and lower wealth management revenue.
• Non-interest expenses are expected to increase in the second quarter due to annual merit increases and higher marketing expenses.
• The company faces competitive pressures in certain areas, such as leasing and commercial real estate, which could impact pricing and growth.

Q & A Highlights

Q: Can you provide more details on how borrower uncertainty is affecting your growth outlook? A: Timothy Crane, President and CEO, explained that while there is some borrower uncertainty, the company remains encouraged by the local economy's performance. They are not changing their loan growth expectations and anticipate a strong second quarter, particularly due to their P&C business. Richard Murphy, Vice Chairman and Chief Lending Officer, added that while customers are cautious, they are generally proceeding with business as usual. The company is actively engaging with clients to support them through uncertainties.

Q: How did the recent changes in macroeconomic factors influence your reserve changes? A: David Dykstra, Vice Chairman and COO, noted that while the baseline economic scenario improved, certain factors like Baa credit spreads and equity market conditions deteriorated at the end of the quarter. This led to an uncertainty overlay in their reserves, resulting in a $35.9 million provision. Despite this, the provision remains consistent with the average of the last five quarters.

Q: What is the outlook for non-maturity deposit costs given the current interest rate environment? A: David Dykstra mentioned that there is potential for slight declines in non-maturity deposit rates due to rational competition in the Chicago market. However, they need to balance this with the need to raise deposits to support anticipated strong loan growth in the second quarter.

Q: Can you comment on the competitive pricing for new loan production? A: Richard Murphy stated that while there is some pressure in areas like leasing and CRE, particularly for fully funded CRE, the company remains competitive. They have a strong position in premium finance, which allows them to price appropriately despite competitive pressures.

Q: How is the Wealth Management segment performing in terms of new client acquisition and organic growth? A: Timothy Crane highlighted that the Wealth Management segment is transitioning to new platforms, which will enhance capabilities for financial advisers. This transition impacted first-quarter performance, but they expect improved momentum and growth in the future.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.