WTFC - Earnings call transcript Q4 2019 | Wintrust Financial Corporation

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Operator

Welcome to Wintrust Financial Corporation's Fourth Quarter and Year-to-Date 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]

Following a review of the results by Edward Wehmer, Chief Executive Officer and President and David Dykstra, Senior Executive Vice President and Chief Operating Officer, there will be a formal question-and-answer session.

During the course of today's call, Wintrust's management may make statements that constitute projections, expectations, beliefs or similar forward-looking statements. materially statements. results differ in or could forward-looking any results from anticipated the projected Actual forward-looking that during SEC. with company's and and materially detailed The in assumptions our in from to actual in filings recent the differ the results the company's information Form press subsequent the discussed earnings this most are could call release cause XX-K the file on

remarks our may Also, non-GAAP measures. reference financial certain

the and release non-GAAP slide presentation comparable reconciliation a measure. the to press include financial of measure earnings nearest financial GAAP Our

a reminder, this recorded. As conference call being is

Mr. I Wehmer. the will now conference turn call over to Edward

Edward Wehmer

Thanks and very me, our as Year, Stoehr, Dave Boege, Chief And With fourth Dave are welcome Kate Dykstra, our our CFO. much. to Happy New always, Operating call. Counsel; quarter General earnings Officer; everybody. our

go of as to expenses turn income, results, future going the usual, regarding general about for thoughts analysis will over and and some summary back through me format then the detailed questions. I'm other comments time more same for give to some to comments our and taxes, other Dave for We

to first go down memory to like I'd lane. walk

take last we second our XXs, the like to to enter to to now decade. the I it's appropriate accomplishments As look call over at I think think roaring a

always been actually I find really valuable. in franchises at a entire term. and confidence As it we body ever on longer have for last with or I manages can looking quarter, better been over that more refreshing company never concentrating the long-term, that the analysts are say work position our that

tripled and out record now in that little the with XX% period now to time, in a over grew income growth XX years share $X status. rate. Over of XXXX $X during $XXX Nine period, from of that net CAGR. over annual year million only record per XXXX, resulting in compound million Earnings from XXXX XX% achieving earnings were $XX XX

from at of almost in grew annual deposits CAGR $XX in from compound X% And XXXX have growth $XX XXXX. XX% book Tangible value rate. growth

to deposits to from billion frame grew and Assets tripled from the from billion that $XX time billion $XX.X billion $XX.X billion XXXX $XX.X and year-end to during XXXX. $XX billion. $X.X Loans from

percent XXXX, then down have Nonperforming that low come this the of and assets, total of assets. year since a year every as assets, XX.XX%

Given financial our $X results, rate our the drives the track growth trade me relative to all run nuts fundamental we in just consistent at look and I market. EPS to discount and that at the record,

growth by our is tend Our goal us and material for good all major to material basis future for decreases rates, sand aspirations. run growth growth through of -- XXXX for future statistics the line beyond in decreases, sit in the historic to material rate to and continue its

a of is bit X/XX, only Now all-in-all quarter considering onto that environment income, little months. maybe XX I know new done bit think is but it I good hard I normal but really aggregate years. to it the manage yield interest had net Fourth some of those that XX over it rate period sheet, anymore, the reasonable XX makes for pretty normal I think of an job balance curve consider to headwinds your Again, since we've a what a a experienced. don't the we quarter. actually we've

basis the direct yield and points. forward. LIBOR result ratio for be All basis these so expense, XXX the didn't fell some as XX net material earning points interest market interest you of net increase going which was curve, by they in should are points. there's basis free asset funds know down good yields differences probably X changes, and points fell as Net basis XX income basis us margin, Net a interest to

is XX fell The due XX to basis basis yield assets by in liquidity constant liquidity staying yields Investing XX drop contribution fell our management liquidity points. was should liquidity assist during securities, increase due for our held -- in evidenced yet Loans about growth the $XXX four our increase invested of the Loan management management for average to yields be while million points. sale good basis fell the liquidity This management points, -- duration in longer-term as management these quarter. longer forward. to part term years. as securities going securities in should assets relatively be margin

we duration of is goal some approximate an maintain Our assets have there. opportunity liquidity to year six management

down the at loan deposit end previous XX% high Our of XX% at end. of of XX%, from the to maybe overall estimate quarter ended the ratio, quarter to range, our XX%

XX expense interest and the the aggressively decreased cost the deposit we On are at base. quarter, decrease to the and basis front, actively rates funds decreased in deposit working points of our expanse deposit

So points. here basis XX and also. of funds there's liabilities cost was interest rate opportunity bearing Overall also down total

was by interest mitigated was On decrease, net the asset the the decrease decrease about it income X reported our and and front, margin of million growth. primary bucks we overall

year basis interest was income up full approximately million. For $XXX net

is to decreased not on our cost expect depending due forward, be cutting that's pressure cost the for We environment assets is -- we've any the in Going the our to have the down going the cutting down. been and know and aggressive quarter. deposit decrease can. by ability deploy cost higher to to of margin think securities in offset plan we going management again decrease liabilities appreciated, this our -- to rate assets yielding liquid to rate actually liabilities hopefully the aggressive be under where future and we We LIBOR in

in good an quick kind we're So the shift materially materially a -- barring the again, here, down point we market. a shift-down overall in think in of

be and the but can growth We'll table. should going Shortly, these plus high result another I'm the based reviewing income franchise as [X.XX%] build detail should especially organic for acquisition interest can be we a some as to of X.XX historical and Net grow, one in growth. if above later, rates valuation valuations be our in earnings cover additional a grow the and to to achieve approximately Net we of maintain a MSR current asset which to the percent expense an the XXXX. on bit for organization. eliminate below X% If X.XX were ratios negative adjustments MSR to we were X.X% If growth were the for related goal our quarter the the year. for year, year. were eliminate level overhead we remarks. for bit and the

grew $X quarter for over billion $X.XXX billion billion $X the loans to sheet year. and quarter the billion the the year were $X.X and both balance year. up and assets billion On And $X.X billion assets the September, earning of for $X.X where over and for the for

-- average growth going a describe assets start I'm with below loan board. quarter million the so that's average to and head of good assets, So a across of $XXX you to little assets end being a bit good almost thing.

and held for grew the So $X.X XX.X% quarter or the sale XX.X% net or loans, loans $X the year. for billion for approximately billion of

quarter million commercial million. included the total For $XX life loans, loans, finance and and approximately loans estate and $XXX $XXX loans grew acquired of $XXX real increased and premium commercial residential and million by grew million P&C

across continue the pipelines Our remain loan board. to strong

was non-broker growing -- comprise Core another consistent billion net deposits. returning We loans of this it $XXX in front of prior as Acquisitions single-digits Deposit that's $X.X periods. with for expect growth of for in deposits high XX% approximately million. after deposits. us accounted deposit total continue growth quarter half to

best XXXX have we at core think of is our market planning in good the I through beyond. franchise growth our the heart continued and

This XX% be stayed The outstanding. and same nonperforming Nonperforming credit norms. assets. has metrics time largely areas past for in could as said loans credit fund, total constant of mentioned, returned about in historical been to the

So for. and quarter million, as anyone's number the net $X.X around Despite with basis what you Net our points, the second in line us. it's X.XX% blip, so said charge-offs were million chart-off for expect reserved from including charges totaled good I in in of previously to earlier, more would from year measure decreased just assets. XX $XX.X

We they want welcome moving are become as and continue anymore expeditious high assets, on portfolio them out them and we problems basis. call here can, prime moving them work but deals we to to find not we the out an them before are leverage moving for

on to will additional But He Dave CECL. long that I'm convoluted, detail Dave, go the on turn thought who detail awaited expense. he and will you I income it going give convoluted. over ahead. other to also provide some

Dave Stoehr

All right. Thanks Ed.

expense As well normal, non-interest I'll the and diluted the comp sections, to. briefly standard CECL non-interest other as income touch on referred as Ed that

to record third quarter. section the $XX income in and our wealth from year non-interest the million management up the the in compared quarter million On fourth increased in to this million million the XX% $XX.X recorded ago year $X of quarter revenue $XX a

from market. equity segment, or management another Overall, Mortgage XX% quarter from good by and the customer $XX.X prior the declined growth quarter in strong million XXXX quarter in the revenue wealth million we year. recorded last was a million $XX.X believe in quarter $X to of was and strong $XX.X solid fourth the recorded benefiting the from banking million a up fourth X% fourth was of for quarter,

activity, MSR of sold was lower and from offset an this negative in recognized home then positive by adjustment quarter. loans decrease primarily revenue adjustment basically prior the the levels which purchase value MSRs a fair somewhat category on of from The the quarter, resulted prior seasonally quarter fourth in lower during from quarter during originated versus the

of sale the year. volumes the of originations loan compared to fourth for The quarter. billion the in third that related in in quarter. for $X.X this approximately and quarter of -- XX% originated prior billion This was was sale compares year, approximately company fourth our originated The was $XXX XX% loans $X.X quarter of mix refinance million to last of activity, related to in mortgage

the lower refinance activity. purchase quarter seasonally the So increased home the to during acted and mitigate volume

provide release to the fourth fourth origination first delivery Table we volumes less refinance quarter continuation quarter and of originations the currently quarter of of be first currently in first expected expect stronger banking where the the of is but our last year quarter, by and of volumes capitalizations somewhere XX the so the servicing revenue and be be. originators mortgage the income. [Technical year MSR comp of are the components value to expect given of also XXXX between the quarter activity, XXXX revenue including to detailed and production We last of the than the than channel fair of earnings sort Difficulty]

five the million reasons lower the quarter in the from less swap down include fee third $XX $X.X $X.X year. past revenue These The of talked fourth generally investments revenue sources two fluctuates just million non-interest totaled over about partnerships. averaged million approximately to as of investment quarters. and Other and and the of I category in $XX.X support partnerships the related of this lower result are million CRA million category this our $X.X $XX.X goals. has recorded million investments primarily the from of quarter, in This for income to income revenue FDIC primary a about, revenue

current quarters. from despite with third average on roughly a last very So falling and good quarter level, the the is five quarter

Turning the factors contributed approximately expense Noninterest noninterest from million totaled to $XX number the the A prior of categories. up fourth quarter. X% million or quarter, expenses in $XXX.X to increase.

and reduce to third $X.X we million related severance infrastructure. was payments, first, conversion million into The we operating amount million integrate Bank Countryside quarter, acquisitions to our continue approximately incurred totaled the and fourth $X.X acquisitions, would $X.X fees this as in STC expense expect related and that data to the would charges during Approximately acquisitions process compared during recent to normal quarter. the of the and these other the were overtime professional quarter

in court There effective to in management fourth with to $XXX,XXX, charges costs potentially no was Costs plans legal lengthy be more acquisitions into and the as to pension quarter the the settle we small longer litigation quarter that end associated it with enter matters inherited $XXX,XXX with increase that prior plans any cost should we associated third it. pension certain settlement as terminating of compared have deemed two than proceedings. totaled

mortgage was acquisitions. accrued of $X.X payments contingent additional million as related additional operation prior expense purchase to price

to better, is acquisitions, and if we to best consideration may and mortgage guess additional have our have upfront expense. record the our mortgage We make you contingent market have on

$X.X would could given FDIC of insurance prior I contingent we mortgage income, come on mortgage be this And quarter this And it had to additional we operations. the when that payments stronger accruals in were think also those on market million price assessments worse recorded. $X.X for purchase rebates quarter. less compared we was think million the what

$X.X million, all -- category approximately resulting significant year. -- the now. third acquisitions the The more approximately increased quarter, Bank accounted then benefit and severance million Bank plus almost related the categories category. salaries $X.X fourth completed was $X.X increase quarter in I'll the expenses million, $X.X approximately Company talk also resulting more Capital growth of of the $X.X employee STC an Countryside approximately from in million additional growth Salary normal from staffing for significant the costs during of the and was fourth to quarter and accruals accounted the this that million for up

expense really with plans. benefit was in quarter, all costs due $XXX,XXX $XXX,XXX terminating than the the the this was two and current employee Additionally, associated quarter higher pension the approximately prior to

for Act expense Equipment monitor fourth software, million invest BSA-related closed information during in as depreciation the primarily enhances current the and the information The to and of technology, million we newly relates ability totaled increase Secrecy $XX.X quarter. two to the to implemented continue $X.X with quarter, the quarter activities our associated compared an increased software and continue to expenses in acquisitions Bank which the grow. security quarter, increase we as third in licensing as to

primarily to we operating acquisitions during just and processing quarter compared to the in fourth $X of million to increased expense Capital quarter. STC the real quarter increase $XXX,XXX during quarter. additional expense growth totaled the quarter quarter, cost acquired two that was in related data locations to due tax the franchise and institutions, the new the the increasing general of The approximately conversion processing branch the system million with Occupancy the Bank fourth of Data new estate $XX.X costs million the associated charges locations conversion, increased of from assessments. closed related to prior $X.X and the prior due approximately

FDIC fourth quarter to compared in insurance was up expense $X.X million quarter. prior the the

on regulations regular assessments full amount less. credits, them assessments their since reached insurance the full would $XX to the small subsidiary stayed than automatically As you above or their the FDIC of The reserve insurance each for know, less after And the banks' of threshold X.XX%, deposit apply ratio whichever the XXth of small the assets, ratio FDIC each assessment credits provided and our to reached in that bank the credits. X.XX amount up to of reduce required qualified are reserve is on June XXth. September billion banks are

million for in the increase Therefore, quarter, the received $X.X additional and the quarter, in the expense. Wintrust Banks We credit all those plus credits believe was be of the could prior required ratio million and and to fourth assessment come reserve the $X.X it we threshold. the remains have the about in of million future, credits we $X.X expect first approximately that $XXX,XXX in of accounts basically applied above of approximately which currently in received quarter generally if

category and million of by expense I Miscellaneous impacted of price million and telecommunication and converting. upgrading get one charges provider network are increased we we infrastructure, got infrastructure in as overlap the and we temporarily that increase also approximately increase the expense purchase compared acquisitions contingent million. category in fourth to that $X.X our of settlement the mortgage legal we the of by this $XX.X and so aforementioned and to impacted payments as when $XX.X discussed, go an another as on was negatively telecommunication the as providers quarter, quarter in the totaled system of system-wide million on approximately two are The $X.X third $X.X charge kind accrued converting invest provider data off million

comments, expense fourth at categories overhead aggregate categories just for basis Other were all of we of it been The $X expect ratio down below million charges from just of ratio the Without than X.X% quarter expenses XXXX. the third quarter below XXXX. to uncommon year net would over the overhead for the and related at by an I stood mentioned acquisition the X.X% discussed, X.XX%. be the the my have other on and beginning other net

over And before on to I of the back it CECL. comment I'll Ed, briefly implementation turn

the existing to range reserves economic life commitments well in the Our CECL amount. credit those under record result Company's for the to used This to lending estimated XX% a is credit of that'll CECL as by considered in reflects is range. the the borrowers of through of to unfunded of of for expected as the forecast of over losses estimated increase allowance XX% implementation utilization be uncertainty for the acquired transition the as loans, Approximately which discounts. related the increase additions previously consideration commitments, XX%

relatively expect remaining We modest legacy increases reserves the on book. in

quarterly quarters many of current As impacted factors. to the the growth, and growth future and mix and accounting volatility to it future, charge-offs, CECL the macroeconomic million may stay our the loan loan high be if similar charge-offs may range. stable low, remain environment with that and will provisioning, our be $XX million that losses we prior in to caution to and low. continue cause credit $XX the to If I macroeconomic assumptions have expect environment by for loan other significant in estimate I provision be But standard growth, or

net that CECL, thoughts loans Company's that not or provision sensitive the portfolio. focus forecasts may the be economic charge-offs rather significant on My to Under of performance will should loan in investors on and impact expense trends may have than ultimately are expense. the non-performing a provision

team But are on it and whack. believe a big hard is aspect fair And So a CECL to of in as of accounting amount implementing volatility my cost I it, worked you we've the go. standard a got the will create imagine, we benefit standard. fan I'm new going great There's accounting of a that's way forward. may not out new opinion ready of

will I throw with to that, over my it Ed. So back and comments conclude

Edward Wehmer

for comments, convoluted the Thanks Dave.

David Dykstra

Welcome Ed.

Edward Wehmer

of rate Talk growth organic in we be challenges, able the through as need future convoluted good we grow believe of Well, navigate environment and a challenging storm Overall, past. this growth the to provides important at and although, period have acquisitive will the plethora will be as be. to we you're environment. rate we should always being of

cost on business Decrease the of hold been all pipelines to remain finance a and strong, funds interesting able note to we're rates priority obviously is business. and we've in leasing premium our commercial that Loan our it. our over

our So four we're years part taking term duration it longer helpful there. six better doing, is should be I hold as earning them what assets management from will our liquidity to mentioned, well. Applying assets into

expectation the have market. strong We mortgage of continued

risk don't to build gap, to of want We want -- will we actually X.XX is to actively we have be maintaining never knock-in, we're off margin going but to to big pretty looks this lock though in know. so we manage the X.XX I positive a downside as that, in a do always more bit right little but past. than you the now, question, Credit good

We it never can road when kick credit. the to comes will down the

continued growth key. will again, So good core the be franchise

in We in total few take to the assets. added cost-outs deals $XXX to and have SBC add Countryside the the transaction fourth Together to closed going Significant quarters happen, they're but million will quarter. transaction -- these will close achieve.

and STC and start time, the That of there converted starting a period in branches happening first should to three second have possibly we're quarter. over -- close We we'll four.

be converting taking the we in really too. but Countryside can out now some We conversion, with of will that will expenses the second that costs quarter. associated There be start

should decreasing. first costs relatively We're two in elevated as not have from pipeline the full. should future remains we the opportunities loss acquisition So for be but on the quarter, them that

transactions more now that like been to a maybe have some we those of advise are and may possibility. involved with I'd larger -- You historically

So bigger. get we

on think the sense. we at can bigger deals pricing deals. And I make more I look bigger think the

know of or involved each I it being results be going weeks holding two record being deals now. don't we'll by could seeing And as other. God pricing going willing, in to three forward just in walked result in then, We're unions been two it's from up past know we've relatively the don't three what's the has out right XXXX. smaller long-term. I but or look whether reporting quarter a high credit priced away on. we But or drums find

our to share best in can you efforts regard. always, that As

can questions. up for we Now open

Operator

with Capital [Operator line the of comes RBC Instructions] Arfstrom Markets. Our first Jon question from

Your line now open. is

Jon Arfstrom

script. the you had Ed, tongue some twisters in

in percentage that if So draw going I the mark number? interest margin was bit. about didn't at bit $X.X margin, in more growth and the the seeing good to your just interest But Because guys the that and loan down for script just talk to number -- off net confidence that print, now. quarter. income topic, little net margin get X.XX surprised anything we're you see your favorite curious the in fact billion the X.XX can you I except guess percentage during And you surprised a and stabilize income things a look that to

Edward Wehmer

into $XXX Yes, But, about this I that. can understand million carry quarter. we have over know

much. So basis, up went we on that average

So that's some of the issue there.

will So that. you see

income we we next think I capital net rates. if year, growth our the with -- grow can can steady interest maintain

been think earlier I got so expenses, basis XX deposit, quarter, to LIBOR down cutting XX this or As points actively we've expense. you but interest our

portfolio But can loans we or just is our you basis any billion use a to I the numbers continues recent commercial Dave, relatively that by right hope benchmark rates. now improvement up, the our the off, gradual or a finance show if is them maintain us. it this, eventually XX we what we can we it it's bring got XX knowing same forward. the but that's base it mean, premium quarter, work, stays leasing putting and that down. to So will. as to drops comment? move It's on And keeps liquidity points this that work hard and where our our we can side level, handle appears it catch going down right $X.X the speaking,

David Dykstra

of or key baseline not. as interest we the be growth and LIBOR the income. and whether the two good those net hold a hold they think is then The can got And think If stable. stable stabilizes hold to I I rate we the Fed growth XX-day and rate going great that and

and LIBOR yield out the curve here. anchors steepens hope let's day So XX

Jon Arfstrom

ago. is mortgage good and of a a item, kind which line quarter bigger obviously other and the did a mortgage you you lot you talk year then Xx, this had about And

to Sounds all reasonably little slowdown efforts thinking we like a But the also the your though I ability, do And about seasonal see the you're and QX even you're get efficiency what down think mortgage in bit then to still bit. some and your you've about refi? ability optimistic, QX? down expect be if we about slowdown costs a talked talk in

David Dykstra

Well, mortgage I in as I think now in to my seeing the make what quarter, and loans XX for don't said then production have the visibility because we're the right full comments you some period. of day that close XX sort

like, the So that of of sure forecast end we what application first will and the look what where pipelines based quarter we last in go in is we next not few have the quarter to upon think going be did weeks. the will the and the we rates the year did the fourth between somewhere what quarter. production and in and have, we But

or minus guess somewhere but if it's that best $XXX It -- last $XXX my we now. worth in guess of million that right plus in $X.X did rates picks up billion it refinance change and more, quarter. could is production that's and My first year, did it's fall estimate million our of somewhere quarter we range, this range. million even but activity So $XXX that

Jon Arfstrom

pieces of then the it? efficiency And

David Dykstra

that. on work continue We to

have, off-shored We we've that are activities have priced. we some talked that are of unit the non-customer as before, more facings

more technology. the in that rate, variable to turned versus and we've in the continue we invest And fixed so

quarter evolving to in just the quarter. better. we There each look and expense line get So or an big going improvement as better and this better items not where one continue expenses is to be at drop I just better getting as

some continued we So improvement there. see should

Jon Arfstrom

step I'll And then, more just and one back.

What deals, than mean historically Just consider you you done with? MOE? Just Thanks. that? just billion transaction you an mean mean those Do by by do you've the bigger comments? mean what about comment these sub you dollar do Ed. you Do bigger

Edward Wehmer

made billion banks to that. Well, many billion over at obviously, of dollars we same and for through us now, given at $X having banks right But looking them we've we'll of are. a look some got also sense the are under issues continue kind

of never on that the a you On the can generally year not and lots like don't this, particular of discussions, we but margin that. we in I going going that looked at on there issues saying there's on of But But everybody some kind may the But going compression going was that make sense. in just MOE who comment through things sort before, standpoint, Anything knows. imagine same opportunity them. on. some are things

Operator

next McEvoy Our Terry from comes question Stephens. with

Your now line open. is

Terry McEvoy

you first as a the I'll and puts start well? Could you but disappear some just off of and of with lot the in takes through the expenses. those the seasonality quarter a kind quarter ran typically fourth on Dave, Well, first some expenses. to the question on quarter? have -- you also expenses provide some of thoughts that shows up

David Dykstra

now we've to happen million, $X consideration accrued will certainly, of don't Pension little again. that headwind are on again. FDIC there $XXX,XXX, think $X.X legal settlements to happen we purchase estimate, the credits to mortgage $X.X on the we termination this that. down the so million expect million that don't quarter, be up. we going of And The expect price roughly Well, a of contingent

million. expect wouldn't happen we that of again. related Acquisition So charges $X.X

As will we second deal Ed Countryside we in the said, quarter, expect the don't much quarter. convert in first the but

happens, we'll second that additional then be So quarter. charges mostly but that in should when some have the

were So forward. think going I items that recur big the I should those don't mean

bit swing third could a partnership quarter positive. quarter investments fourth on We off well quarter-to-quarter, the $X.X little that in fourth good given get impacted note likes, had there's fluctuates our non-interest swap quarter the fees funds that and the couple these had investment side, very we during quarter, that million income FDIC environment us. on of that the which third some Also dropped abnormally negatively their firms rate but and between investment, the quarter certainly, are And the have rolled those a of better. inside fourth and then

swing. was I but again, to happen So that $X.X expect that million don't

we that what don't are two So and funds capital lines, those of to market value million to do equation. the side sort we the just the there's in non-interest between expect swap issues. of customer market the have volatile there the of of But again sort happen what those for and $X.X are swing income see those was appetites

large I commission's sort on will going the a salary items mortgage the about the commission should item of expense, in for help Those the little are I forward. in adjust bit that that that spoke we're could I expense as think think you do first line origination, side so too. less quarter that come the down,

Terry McEvoy

And all, on is the the is, X.XX to At it book small call banks? given then it M&A M&A or be an at follow-up option tangible really banks currency the just question. times larger

David Dykstra

have just side look their even prices at the can some and them deals, or you get make larger can you price I look some them out of small and if deals sense. you relative cost what the and at the enough these savings, costs of of on make potentially if to

Edward Wehmer

coming need XX world banks, continue great everybody the you is just that good quarter I think hold average with pretty house guys or bucks. grow. an think X And environment, like at we do give likes away good. XX tangible value. we we you then Hopefully, the run can market to Yes, it pretty at the and reality XXX X but bucks, book tangible rate back the share, don't and and pretty a bucks when know, mean get We XX-year per reaction be something. is I as we job steady kidding. stewards worms be But out this end, I think there, of at it's is this we're trading your book nobody thinks With you earn should a to we won't

higher value aspect at I about franchise growth and look our good at it. earlier, has I As said deposits that now, think never it's and of right feel we great customer been XX% base than some, you pretty core a that

turns and 'XX, else Done in were lots market cost don't in is work. So off numbers never of yes, the value is really done the numbers have which in know, terms work you everybody we you too. not cuts where but with that know. book boat of were only up earnings won't same made But

We're We acquisitions. do them stupid. anything do not can we do going to can So well.

I've for never some of So you saying make sense looking smaller earlier. but I more the adds been deals just it reason discussed work, the that doesn't at know larger deals might in the if

Operator

Our comes Chris with KBW. from next McGratty question

Chris McGratty

to this about borrowing the couple $X times Is talked you've trying by you'll Ed, in than on you're trying $X that do sense call number of Is get to in expectation that fed? a a the your XXXX, any XXXX. today. send? the that better changes message I'm

Edward Wehmer

the it's off we're going think I to build Yes, of. base

our net have earnings we when hopefully, XXXs would R&D grown keep that will commensurate rate think, can it and us can just that, grow we've a hold billion in continue which ratio for number We've a we margin billion, to acquisition last $X okay. drew we through grown been the to will I $X billion we down cost at that. the the at, on beat we year. get overhead $X.X consistently, expect can good the and be and if organically had our we in be steady increase And expenses,

Chris McGratty

And maybe I missed it.

that I talked from of of think your comment the or this from kind hold will Was quarter the will abate rate here? about you margin. compression XXX that

Edward Wehmer

maturities LIBOR through hold costs us… both. a in effect way have does on on We we to sudden But our to a think funds. hard continuing quarter it. should would any it both portfolio, sudden either a -- down down holdback more of our cut drop management be the basis like that extending I But But just Well, slow than go isn't negative to XX which our XX expect. it compression take. depends out where XX continues to point, basis -- points, and drop just liquidity It'll

Chris McGratty

But the if it a quarter, points for today that LIBOR the ballpark first you'll stays quarter of as down what stands XX think be XXX same? you in basis with everything

Edward Wehmer

sir, Yes, of and going… build off that

Chris McGratty

pressures revenue But revenue question, thoughts of ratcheting to efforts lot have seen the go while expense banks, what well. guys growth the of the given to aspect the cut pressures a kind costs the there? you the to are are story. Obviously, second we've Maybe up a really the of

Edward Wehmer

the the we the that those time. all do for And efficiencies, look We time. all

number efficiencies we process and the whole here in looking in process terms through a at are have now. of We right of go those works

it. also go we're make doing work we through that that's to that and in We through But people. have continue investments technology and IT to and

look all and expenses now in to I the cut we do could time. grow to what continue at it So the we don't know exactly organization. do drastic really right a

mean, cut organic XXXs, the can't some momentum explain steady it employment the on franchise would give me growth up growth in If we at our rates, continue up in pressures, markets, I forever, give don't it's us, can solidify I margin can Chris. grow maybe ever is and someday. growth X% you now, our and what and take I've that overhead of to the will no good to eventually. given good X.X%, markets. come -- the maybe out to where seen market some But around GDP just good will I a and some it right have day, ratio period keep in inflationary full I we go market time I've the think and point, absolutely can -- interest how We

-- for I sensitive, But I stay maybe me. to next were a to not little. margin because back we much make in that positive But in I sense maintain we've do want as years, interest XXX to been want the I want do rate not as want And know do to doesn't -- little a that I walk gap. to that five don't

anything? where see it Dave, goes. got So you

Operator

with question UBS. comes Brock next Vandervliet from Our

is open. line now Your

Brock Vandervliet

past, in part at growth played I your acquisitions that. a loan So as the have the of look always

growth loan Is at mid look than What that XXXX. higher does look you single-digits organic that? like? in that As

Edward Wehmer

number, believe mid X% that… be to single-digit a good in right on I number, that X% somewhere that

David Dykstra

sort So, I mid be use, which to the would single-digit X%. of would phrase to X% high is

Brock Vandervliet

still quarter at is kind the of low a XXXs adjustments. And expenses, But about taken we per how has through should And shots going separately on we're this question. think everyone base reasonable that? expenses, for

David Dykstra

and there variables depending so many like. the are mortgage There the out on market

sort the noninterest those. think can past component overhead we've you expense component do on to the ratio, tried are the Brock take net income related the so and that I what of focus in to noninterest is

range goal the for our So year. XXXX in of full was XXX-ish sort

to we get that Ed XXX. into down previously, As had mentioned the expect

-- So be it XXX looking below will it now. certainly should based on we're at what

get the But higher So of if commissions expense grow, this FDIC we and but have that some you to we're higher quarter. back you're is and time we going It first at. of probably expenses look on the come we little as leverage than system in out down XXX. take that's it's going a how add the in the to credits,

mortgage that sort So and get but the the what XXX market depends maybe you of really it low on does.

it's what it the so hesitate that of number have. hard we're doing revenue on section businesses these -- give the on And to based I some because fluctuates upon commission-based we

you less would I focus ratios in overhead So on, the coming in than more XXXs. with net are for the XXX

Brock Vandervliet

QX? that appreciate call guide provisioning with CECL square does million it post forward, to XX X.X, guide How quarter. on the the going And XX a X in

David Dykstra

took to a you specific have had QX, remember, of reserve way $X charge-off million. of that we

of that loan. just that part a drop we for the have big as reserve didn't So that one was

Edward Wehmer

mean up, bad said I banking is on forward, the for Moody's or the think down, or business at he their everybody's over -- earlier, going Moody's And basis all has his basically baseline this. be hangover Going because hemorrhoids as board the guy day CECL this. looking at jacked using is we if think to could Dave a

you down win. think -- and That's up because net based doing I we we're this on mean and to chases got could reserves. go charge-offs evaluate what people, concentrate in our their when I here in So specific thing go on

Operator

with comes Securities. Chiaverini from Wedbush David Our next question

David Chiaverini

discussion. the to up wanted follow NIM I on

You how the to defend pickup interest may duration? duration extending from mentioned XXX able expect with by yield years. margin four curious, years be level I you in the six net much was to the the extending at do about how you

David Dykstra

look Well, Fannie just rate Ginnie a to overnight and is I what you marketplace. is to have rate think whatever the out and compare in that the

so the XXX in are and Ginnie's or are mid Fannie's Xs overnight you the pickup X, and So points. mid-X, maybe basis so right rates

some call is agency, get could you wasn't that closer so depend to agency, If the there. that the margin. up having if of lowering you mix what certainly if you pick basis over XXX But you just have plus but costs points you said some it get do X%, deposit

David Chiaverini

billion the $X the And securities? extending you on entire on plan that for like portfolio roughly

Edward Wehmer

the liquidity management overnight Well, the funds. includes

David Dykstra

of we've and in I sheet, to billion the you sales that's look maturity, have already for $X.X balance our the bearing if of got mean, You deposits of banks of interest billion with million, $X.X $X to look at, invested. available held

plus -- we the the got you money out side. could of overnight get get be little on need that's over a we've billion available So of to balance deposit $X of sheet invested to whatever growth

Edward Wehmer

after-tax goal. The whole we over what little at. a past, little I but is but would up. we picked X% should, that's goal tax hesitate we're X.XX my X% then tax anyhow, mean, looking the industry spread environment is the and that's in about after Why be good a X.XX, by

David Dykstra

it hasn't less to the that hesitant haven't into return. $X shoot I've the and And you put long spreads we're than us all all the we money that's said why of provided work to And seen moon. that the And ton because just always type at do yet, the at of a long days as billion to once. and put day that of

leg into costs dramatically. long So up we'll the thing and unless this really

David Chiaverini

feeling And Do and curious they just how the X% borrower, to the then shifting to was to borrowers commercial your X%. you nowadays? growth mid loan your about mentioned high-single-digit I trade economy better as what the just deal, trade about that deal feel in with X your I'm the the discussions they're saying. done? getting with feel to curious Phase them they

Edward Wehmer

offer privately a about could out have business, right from much right booked goes and they're year portfolio of reasonably loans there but didn't all rid we But billion offs they're all But owned they of the the in downs. of we may all C&I with that feeling but they of PE not middle they backlog feeling $XX now day pretty the portfolio, out and money around and worth They're running they're they're by, -- they're for mean got I but stagnant over of that there's dollars pay flying getting those pretty we're they're that and highly lot doing de-risking. doing pay We're pretty company was of feel through some be hell firms a our that's now, a all, who good. leveraged companies, market well million deals. Basically, that not what lot good mean, good. money. fintech seeing that

steady So really business. we have to that hard in stay to work just

the accounts. fintech the deposit takes it maintain over, if do Fortunately, we

So that's good thing. a

the say So over long. it's fintech the I'd

got of because to in terms had kind I that's the of we legs be up careful against wall company though a So leverage.

a good, tough So market would it's from all pretty standpoint, a feeling I standpoint, from lender the say. they're borrower

Operator

Our with next SunTrust. comes question from Young Michael

Michael Young

well. of lot the share kind But that of versus are I announced just kind to up of your that. buyback a on and own Obviously, get discussion looking at wanted looking and of on to your stock comparing how follow acquisitions? you're you how contrasting back M&A you thoughts just buying as deploy

David Dykstra

bought stock today. back haven't Well, we any

-- and and us dilute not and diluting really value. we compare the -- of as we book sort tangible off of We deal flow think we just can of what buyback. those returns contrast the big we have the versus I get tool available said fans to We're

to looking deals stock those compare we're them. So the we're through how given and some of flow price then we'll of and at, see pipeline watch the going movement

some but So continue out two losing haven't just the evaluate the it to-date, there. acquisitions. will deals compare the done why we and maybe we're that's we to versus anything But of

to to are bank for at if very we or do. don't X, have overpay. it X judicious on looking X much, some a We're the do recently too value no price very or them the I've need the what billion said, and long-term We reason there's we're shareholder. high of dollar X, As expectations, of had just cost

don't pan stock buyback. a then at look the those you little us harder see if So out would probably

Edward Wehmer

XX said are, bucks numbers looking XX.X The where a multiples deals capital it's it. share, multiples It's just David matter, and the we're just times at I vis-à-vis the and times said situation. we're as XX returning

But use comes buy it So back a we the buying bank. of capital, and where always obviously accordingly. were is than better good we stewards time it it

just all the titled of out it's [indiscernible] book. comes So finance basic

Michael Young

capital Dave, point be And would the this watch? capital that we a at ratio limiting just should what the follow-up, with ratio. total as Is

David Dykstra

Yes, sir. That's limiting been ratio. our always

Operator

turn I'm for the time. like showing no to further to questions in this Mr. Wehmer I'd back call queue at remarks. closing

Edward Wehmer

for Have look a to forward great first everybody and pitchers reporting. And catchers Thanks listening have in, quarter. month. a good Bye.

Operator

Ladies conference participating. and gentlemen, call. this today's concludes for you Thank

You now disconnect. may

Wintrust Financial (WTFC) 22 Jan 202019 Q4 Earnings call transcript