Wintrust Financial Corporation Q3 FY2025 earnings call

• Record net income for third consecutive quarter, driven by differentiated client solutions. - Net interest income up $20 million to $567 million due to loan and balance sheet growth. - Deposit growth of almost $900 million kept pace with loan growth. - Interest margin 3.5%, within targeted range. - Credit quality very good, nonperforming loans decreased, charge-offs stable. - Achieved deposit share gains in key markets, ranked 6th on American Bankers' bank reputation survey. - Loan growth expected to continue in fourth quarter, supported by strong pipelines and market positioning.

Wintrust reported net income of $216 million, up from $195 million last quarter, a 11% QoQ increase. Net interest income was $567 million, up $20 million from the second quarter, driven by loan and balance sheet growth. Loan growth was over $1 billion, total loans at $52 billion. Deposit growth was almost $900 million, total deposits at $57 billion. Interest margin was 3.5%, down slightly from prior quarter but within targeted range. Loan growth was broad-based, with commercial real estate loans up $327 million, Wintrust Life Finance up $252 million, etc. Deposit growth helped fund loan growth, total assets grew to just under $70 billion.

• Expect continued loan and deposit growth in mid to high single-digit range. - Anticipate growing net income and maintaining stable net interest margin. - Focus on managing expenses thoughtfully while investing in the business. - Confident in portfolio performance supported by strong underwriting and diversification.

• Risk of irrational competition altering loan or deposit pricing in markets. - Potential yield curve inversion, though not currently seen as a prevalent risk.

Q: Talk about loan growth pipelines and NDFI exposure A: Pipelines consist of opportunities from larger banks losing customers due to impersonal decision-making. NDFI over $2 billion, ~70% mortgage warehouse lines and capital call lines with no losses, balance in leasing and premium finance with familiar customers Q: Thoughts on holding margin with Fed rate cuts A: Believes can hold margin in 3.50 range as deposits are 80% non-term and can adjust costs with rate cuts, swaps in place to manage downside risk Q: Strategy to play offense in markets while competitors focus on other geographies A: Confident in Midwest markets like Chicagoland, West Michigan, Wisconsin, where they can take share from peers through relationship-based approach Q: Operating leverage and M&A outlook A: Expect operating leverage with balance sheet growth, open to M&A opportunities but focus on strategic and cultural fit, with prior experience in bolt-on deals like Makatawa Q: NIM and premium finance growth A: NIM expected to stay stable, premium finance growth seen as positive with good product and market share, outlook optimistic with steady growth