Wintrust Financial Corporation Q2 FY2025 earnings call

• Record quarterly net income and net interest income achieved. - Strong loan growth of $2.3 billion in Q2, broad-based including premium finance, with over $2 billion deposit growth. - Net interest margin remained within target range of 3.54%. - Disciplined growth approach, passing on credit opportunities where pricing isn't comfortable. - Residential mortgage activity muted but expenses managed. - Credit quality very good, close to clients facing uncertainty. - $425 million Series F preferred stock issued to redeem higher-repricing Series D and E, impacting EPS in Q3.

Wintrust reported record quarterly net income of $195.5 million, up from $189 million last quarter. Net interest income, also a quarterly record at $547 million, was driven by $2.3 billion loan growth in the second quarter, with broad-based growth including a strong premium finance business. Deposits grew over $2 billion, assets reached $69 billion. Total noninterest income in the second quarter was $124.1 million, up ~$7.5 million from prior quarter, with mortgage banking revenue up ~$2.6 million due to higher origination volumes and wealth management revenue up $2.8 million from asset valuation increases. Noninterest expenses totaled $381.5 million in the second quarter, up ~$15.4 million from prior quarter, driven by salaries/employee benefits, advertising/marketing, etc.

• Expect continued mid- to high single-digit loan growth for the second half of 2025. - Expect continued deposit growth to fund loan growth. - Net interest income expected to increase in Q3 due to stable margin and projected average earning assets growth. - Tangible book value per share expected to grow in 2025 as in prior years.

• Potential credit challenges, particularly in commercial real estate though NPLs and charge-offs remain low. - Competitive pricing pressures in certain loan categories leading to margin compression. - Regulatory and compliance risks affecting small banks, potentially impacting M&A activity.

Q: On loan growth expectations for Q3 A: David Alan Dykstra stated mid- to high single digits expected based on June 30 balance Q: Where deposits are found A: Timothy S. Crane said deposits are broad-based, including commercial, consumer, warehouse, with commercial deposits helpful for treasury management Q: NII growth and deposit competition A: David Alan Dykstra said mid- to high single-digit loan growth expected with stable margin, and Timothy S. Crane noted deposit costs were slightly down Q: CRE nonperformers A: Richard B. Murphy said it was a small blip, nothing majorly concerning, managed through portfolio Q: M&A activity A: Timothy S. Crane mentioned pickup in M&A, looking for opportunities that fit culturally and market-wise