Wintrust Financial Corporation Q4 FY2025 earnings call

• Tim highlighted that Wintrust had solid 2025 performance with record net income, disciplined growth above peers, stable margin, operating leverage, and improved Net Promoter Scores.
• Dave discussed strong loan and deposit growth, a stable net interest margin, record net interest income, and a positive outlook for continued growth.
• Rich noted solid credit performance, loan growth across categories like commercial real estate, mortgage warehouse, and others, and a positive outlook for first quarter loan growth.

Wintrust delivered solid performance in 2025. Full-year 2025 net income was $824 million, up 19% from $695 million in 2024. Earnings per diluted share were $11.40, up from $10.31. Total assets at year-end were over $71 billion. In the fourth quarter, net income was $223 million, a record, up 3% from the prior quarter. Loan growth in the fourth quarter was $1.0 billion, with deposits growing $1.0 billion. Net interest income reached a record quarterly amount, driven by an increase in average earning assets and a net interest margin increase. The provision for credit losses was consistent. Noninterest income in the fourth quarter was $130.4 million, slightly down from the prior quarter. Noninterest expenses in the fourth quarter were $384.5 million, slightly up from the prior quarter.

• Expect mid- to high single-digit loan and deposit growth in 2026 funded by similar deposit growth.
• Margin expected to remain relatively stable around 3.5% despite potential rate changes.
• Aim for positive operating leverage while investing in tools, technology, and people.
• Anticipate improved noninterest income in wealth management and service-based fee income, and hopeful for a mortgage market pickup.

• Competitive pressures in the market could impact performance.
• Potential changes in interest rates may affect the mortgage market's performance.
• Benefit expenses have been increasing and could be a wild card.
• Uncertainty in the premium finance environment may impact loan growth.

Q: Can you talk a bit more about loan growth, Tim?

A: Cautiously optimistic about local economies, solid loan growth broad-based, first quarter can be softer but first half in line with targets.

Q: What are the puts and takes on expenses and overall thoughts on expense plans for 2026?

A: If mid- to high single-digit revenue growth, expenses expected to be 4%-5% growth, with potential wild cards like benefit expenses and mortgage market pickup.

Q: Unpack decline in deposit costs in the quarter, drivers?

A: Team moved deposits as Fed moved, DDA deposits had lumpy year-end, pleased with deposit cost management.

Q: What's not where you want it to be operationally?

A: Mortgage business could be stronger, but paring back expenses related to it, disciplined with commercial activity.

Q: Capital deployment beyond dividend and organic growth?

A: Focus on organic growth, then consider buybacks or acquisitions if capital grows too much.

Q: Thoughts on competitive landscape and market share gains?

A: Benefits from competitors' distraction, differentiate by service, focus on Midwest markets.

Q: Mortgage banking outlook for 2026?

A: Optimistic, potential pickup if mortgage rates drop, share increased due to refinance broker closures.

Q: Construction lending growth outlook?

A: Feeling okay, multifamily in Chicago strong, some markets have oversupply.