WTFC - Earnings call 4 2023 | Wintrust Financial Corporation

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Operator

Welcome to Wintrust Financial Corporation's Fourth Quarter and Full Year 2023 Earnings Conference Call. A review of the results will be made by Tim Crane, President and Chief Executive Officer; David Dykstra, Vice Chairman and Chief Operating Officer; and Richard Murphy, Vice Chairman and Chief Lending Officer.

As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation.

Following their presentations, there will be a formal question-and-answer session.

today's expectations, management statements. beliefs of that make course projections, constitute, or the call, may Wintrust statements During similar forward-looking

and results recent information statements. earnings in from subsequent in materially the actual in results any that could our anticipated materially the Form this Actual projected from the SEC. call differ or detailed the could the cause and any during with company's company's press The results forward-looking XX-K release to most forward-looking discussed assumptions filings such differ are

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

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

is As Crane. will recorded. I the Mr. a conference now Tim reminder, call being conference this turn over to

Timothy Crane

joining and the call. you for year full morning, fourth and thank for us quarter Good

haven't For to those who we New recently, Happy Year. spoken

Murphy, me. Dykstra Stoehr, are Boege, Dave with to our addition Financial and our Officer; Chief David In the Kate and Rich host introduced, Counsel, General who

In we'll agenda, I'll to and high-level with thoughts And to some will wrap some terms on performance. of Dykstra some additional always, best I'll on the results, add will summary credit Rich as up an and highlights. do speak color financial our some David information answer XXXX. share questions.

we our approach to conservative of For just growing over reflect results franchise. over reported income year, record net XX% managing the The $XXX million, XXXX. up our and

do show only series evidence key our loans differentiates a from steady In works care that and many clients. management also that conservative both our of have we sound of every on taking we XX-year not growth an at included materials, and metrics, historical target to and in as our Specifically, peers. commitment we us risk of deposits, but liquidity approach progress unwavering and year-end, solid our charts

would think And information, encourage meaningful you haven't these is charts consistent I performance. evidence already, materials. this look review at if strong and our we and not these are you new to While of

$XXX million, million fourth to million For the write-down replenishment $XX to quarter, the the given result bank extraordinary net falling approximately quarter. of related the of of $XX.X the to certain the following solid recognition a an and related expense failures the expense the mortgage-related assets just over was FDIC rates fund March income interest a during due

an income reported of approximately $XXX of interest up as million record the margin net good continued to quarter $X growth. and basis third interest X both net from X.XX% increase million, We a loan result the in of points

increased Deposits the up steady Noninterest-bearing were a in quarter. of deposits also deposits. as slightly percentage and total were

normalize While very the to expect levels last to experienced years, our low. credit over continue losses we and from the remain NPLs performance low few

of And Rich, healthy the our XX to I highlight these allowance. in finance we've credit build X.XX%. press we Despite credits our losses, that continued to you'll coverage is Table low portfolio allowance from proactively core loss insurance primarily detail continue low loans, our address would release. for our excluding portfolio. challenged is This hear at as in

during to The market The up driving the the in the book the that the assets million and rate mortgage our $XXX to $XX caused value led over improvement AOCI a a during increased quarter. quarter capital adjustment decreases material book to value also levels. value by of tangible share

public further to value that book in company since year our if And see shown. mentioned increased I the value the has back, period every book the were has during go that in you charts increased tangible our of You'll year one in fact, every went XXXX. XX-year

Dave that, believe with XXXX on solid and I'll quarter, Rich. our outlook. us differentiate relative over as may of thoughts remains Overall, will liquidity strong. compare With to mentioned, up to the wrap I'll many and come and a back position And which competitors. some Our we turn I well this

David Dykstra

Tim. Thanks, Great.

The loans growth. to respect and with $XXX talk portfolio an our the the high across commercial was many to was bit. were but pleased prior a or loan annualized of X% basis, about million guidance increase we quarter growth, mid- sheet Murphy consistent by primarily little and premium just First, commercial real on loans again to grow balance approximately for finance will in loan related to to the that with in see growth categories estate of single-digit Rich

evidencing is annualized recorded increasing both we ratios relatively prior of deposits, noninterest-bearing The stable a of total of assets increase the And noninterest-bearing the a most at and of stabilization on of company sheet Other were deposits represented also XX% a with growth over half deposit which capital quarter, ending quarter as total by composition the slightly end an the $XXX those million, had the XXXX. basis. quarter latter slightly. balances results approximately X% the fourth of quarter, our loan-to-deposit during ratio third balance the and million ratios $XXX during grew where increased positive

very model, very exceptional franchise, regard. the and differentiated serve to in a and our in successful quarter team continues and business service markets well Overall, position for us growth the Milwaukee Chicago the of unique that

statement categories, the income net starting income. with interest Turning to

an the quarter an increase I $XX.X $X.X the approximately of the net as the quarter as to prior quarter ever of increase in the quarterly due to increase $XXX assets The XXXX, by income compared prior interest fourth to that million, $XXX to compared income as an fourth fourth should of interest average totaled highest of quarter the net net primarily income and company. of million. the million earning quarter amount note increase XXXX. represents interest million For was recorded compared in

for contributed margin structure quarter which as balance An characteristics level. and income. interest interest the X.XX% points company's to increase net sheet we basis interest higher maintain discussed range margin can the roughly than prior calls, provided our composition, we the a in also quarter. and interest the prior And around stable XXXX a beyond was interest repricing in during in the in fourth stay XXXX, margin Accordingly, narrow the our increase margin during net rate the current the The levels current believe rates the based net was same. assuming net relatively of we interest the net on quarter, quarter first X environment, on within

expected were December quarter total obviously I'd some our as in net and that growth in provides margin average also XX quarter the of loans the which like with to than million for of interest further higher of growth total this allow fourth of the note the a loans first net quarter, interest combination income XXXX. balance the first us sheet of The relatively into momentum should year. stable $XXX

million provision year a is but recorded a $XX.X losses. provision provision to of credit ago $XX.X up for the actually the from Turning provision of prior losses quarter. for This million quarter. quarter from credit down recorded of in Wintrust $XX.X the fourth in in million the

price spreads and the conditions, about credit talk forecasted BAA higher loan The net deterioration during primarily estate the index. a quarter higher characteristics a the in bit. depreciation the forecasted Rich relative commercial higher the of macroeconomic and fourth in growth was expense provision real forecasted slightly and some quarter, in to a loan wider of third will credit just level the net of charge-offs result quarter primarily

had value. our really $XX unfavorable quarter, expense. hold to late and income to decline was mortgage Total Those when the other mortgage declines are certain noninterest in down a to mortgage due the other quarter quarter. rights a million change income for in of banking totaled revenue and Relative fair fourth Regarding approximately prepayment the reason decline the million $X.X mortgage-related noninterest third net related was valuation accelerated the quarter, mortgage assets million adjustments prior revenue. primary rates noninterest $XXX.X million servicing to in fourth $XX.X which compared at The and in that we the speeds. assets from less

in it's our which lower and us. the is margins. on We that was higher production to volume the compressed due year, to I than encouraging lower note although quarter for production seasonally million it's decline experienced actually than fourth quarter, of also revenue interesting think the gain revenue prior sale prior But $X

rate the We in better over volumes low up of application that volumes Albeit are were encouraged that still XXXX January that application last seeing application environment, December early thus at volume 'XX. lower we is up in are from picking far. also of receiving levels, increases with we slightly and year are

as approximately in changes in quarter. aggregate, changes a from and other variety the categories, an million nonmortgage-related prior the in in of relatively the but categories those smaller earnings the income resulted the in the release, $X.X unusual were tables shown not in of increase noninterest There's

pay a from to under The the reduction of prior remaining $XX.X for just was in occurred relatively two noninterest million small $XXX.X of $XX.X expense, negative also XXXX. totaled in expenses bank the and reason primary Noninterest up the of increase FDIC the for from The the special that fourth expenses. variances earlier noninterest in the quarter. approximately impact negative million were positive failures both to by the to Turning the $X and assessment quarter in expenses noninterest prior quarter million. million the

we've growth feel a -- income We a was it a delivering net loan in company's low income of assets, any level stable with a somewhat continued continued record period we margin in with nonperforming solid a that view in deposit history, fiscal net revenue level our quarter very through net interest the a a and and record was of well summary, outlook of outlook, In and steady for have for and interest earnings. managed growth, like in good assets. positive year turbulent XXXX, full a level

in easy looking instructive it's over caught the And to back to results, get while think occasionally it also look I up time. quarterly is at

the that loans, credit has earnings to, work and included approach hard in our to well. continue book evidence returns. while some referred share over provide I an Tim trends that charts XX-year very and for earnings consistent to XXXX deposits, in increase beyond think tangible growth shareholder running release all value time, As managing we risk provided and business period extended of the in impressive those some We'll per

discuss and Rich Murphy So with credit. that, it I'll conclude over my comments turn to to

Richard Murphy

Dave. Thanks,

As to number noted solid continued the performance credit perspectives. Tim earlier, very fourth from quarter Dave a in of be and

loan factors. the And million. growth the Slide on to growth this for of a deck, number quarter detailed quarter, driven similar by $XXX was the was As third X of

resulting to within premiums, properties, particularly sizes provided a for premium commercial harder consolidation finance revenue with loan insurance for see premium has and the continue We finance industry commercial in higher us portfolio average opportunities. market our in

real group And finally, quarter. portfolio, very loans. on construction growth estate in leasing We saw resulting solid the our existing another good commercial draws from largely had

X%. be or believe show growth for be billion loan growth guidance our within continue that finance premium as $X.X We for of the Total continue all premiums elevated. commercial growth to continue following XXXX to was for team XXXX to will loan The reasons. solid should

Our very and calls, CRE prior market. we various to and pipelines business. have landscape, leasing have banking we quality in numerous see stayed continues team significant in to disruptions and opportunities And demand the seen from as in in noted our the continue C&I benefit our we've solid, core

at we addition, look to niche in other teams from a number and In come that of regional lending lending banks. dislocation opportunities continue

to to year-over-year line pressure from We equipment cause expansion of grow will within higher to to to utilization, the anticipate XX% higher growth to our that borrowing the competitive and within diversified ability we this Offsetting reconsider borrowing be projects, purchases. In continue digits users. optimistic our be negatively costs credit allow economics about have landscape guidance which and discipline. borrowers and affected XX% C&I XXXX, mid and portfolio on new loans costs grow will business continued of us continue dropped will believe to as single high in position our our summary, we maintain

points. by of a as portfolio. quality Nonperforming XX, in quarter across increased we during continue detailed performance a on strong perspective, credit This from million XX $X loans basis From metrics. to XX the number credit to the can see Slide seen be

increased to from for about basis historically levels, at XX million were portfolio. to Charge-offs during continue NPLs million up the While basis points be X XXXX, or they or from basis XX basis have we QX. $XX.X are points, solid points and of $X.X quarter points in the performance credit XX low confident the

signs level. Slide XX, customer in our stress and levels on saw detailed of loans as stable mention at no Finally, meaningful special substandard economic we additional with the

costs of and focused which our as are noted earnings in portfolio. borrowing exposure total the office commercial be lease category continue noted we've for X/X our rates As last in Higher pressure particularly calls, few we to real on before. highly roughly our and comprises estate on to loans, occupancy concern, cause

we we co-working quarter exposure a by sold subset million, secured were this On portfolio very loans, total $XX co-working are At noted which year, earlier we call had of that of on our in approximately second time, which our focused half. a that office reduced properties.

saw of to as is During largely of flow loan that a to we the million, and due quarter, current issues. is been cash downgrade which NPLs an loan CRE note increase It previously fourth was underlying a nonperforming. the due nonaccrual important to co-working $XX.X to single identified in a potential has

forward. effective We the most continue the with work strategy cost going borrower to determine to

our office XX.X% billion the our and X.X% to our portfolio. On XX% -- a Currently, category. Slide XX, remained only $XX this is the The CRE office portfolio the we average portfolio of $X.X continue X of we exposure, owner office of only only loan is office size portfolio. in and have or of this at X.X characteristics or loans total in occupied. important of portfolio above million have portfolio loan medical of steady Of updated billion total $X.X number million,

this We and our with continue stay we engaged very portfolio, regularly reviews to on borrowers. perform

be third approximately calls, prior XX% during the our mentioned the every quarter collateral. loans following: are will paydown loan resulted will clearly pledge loans which or over a As analysis, in which This period Roughly additional million, qualify loans a will to these all updates these paid a renewal on these dive prevailing renewing off remaining of their of end prevailing of require or regularly maturing covered will rates. of extension credit CRE loans X/X the which X.X this of and now CRE XXXX. rates. between team additional XX% XX% at could for anticipated some short-term of be of of require include attention, at The analysis

by note been dive co-working deep mentioned previously the our secured identified loans to It's that prior important during space had analysis.

have to We borrowers conducted providing and have of additional support deem projected very results to these found tests tightly back-checked outcomes generally and attention, that quarters correlated actual by including their speaking, enhancements, versus the of continue require the prior loans were principal reductions. during outcomes loans

it to lease and work borrowers Again, is portfolio forces effects rates portfolio weaknesses but best identify we not comments proactively the and of from is identify ahead. our immune possible market outcomes. I'll rates, the on credit, in situated Tim. good our behind to We that the in reasonably to shape rising or portfolio our the believe continue to challenges the turn weather my with That back concludes and

Timothy Crane

up environment well we remarks, to positioned of well Thanks, take that Great. prepared to businesses. believe diverse wrap uniquely our are current Rich. To the continue we positioned, with perhaps advantage our

sensitivity Over the taken steps last position several quarters, to interest achieve neutral. closer we've an to much

on data press X see You our some specific can Table release. in

assuming XXXX. are will our this as are assumption, level stable narrow a basis we cuts rate point, three the in term. point there While With cuts we around mentioned, Dave at that the rapid margin rate believe that net for reasonably be interest near that XX don't in warranted be current range will

More interest the likely would the three economic cuts slightly above rate we've offset. would an in margin as and assumed more activity result but favorable beyond pressure also

Rich which currently mentioned, business low For line and very levels. commercial is mortgage in example, utilization, our improvements growth in at

our through at the fund to in loan of target percentage high our like and to our reiterate is the grow range loans levels. comments, to deposit So to single-digit mid- increases prior in growth terms continue to

growth into fourth first XXXX. represents the end good and the there'll questions. results, some as of Overall, the quarter know XXXX we're XXXX. Dave about with Our quarter, we're pleased we start going I experienced pipelines the And mentioned, momentum where of at encouraged which strong remain solid. be we

So host. we and to point, the it pause at can back this I'll turn

Operator

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

Jon Arfstrom

income of you the some protect margin to on made, ask levels? expectations are Can the to wanted guys the your little a can confidence you what just how these Dave, talk in margin or net the Tim your and about current three loan I to growth maintain for interest growth. remain about about your it last doing Maybe peers, comments the margin current you're protecting range that you potential, think particularly about guidance growth loan the around than But just seems your better the Tim and range. we absent than greater talk cuts.

Timothy Crane

We've to Dave the at we've loan of in terms this closely to what is on our costs. that the Jon, add fact in book increase point, that deposit talked can this. got about And book continues correlated asset-sensitive the and an seeing to reprice. Thanks, loan repricing we're Yes.

We short stable. stable that the here spread going of as period will or expect characterize and that some to basis around case that, plus I for at between the that least our X.X. will points loans number forward be and a deposits minus roughly continue would be

pretty three are we've we've more, So in margin parts of probably the think cuts cuts other pressure about deeper good business. the in we If our and starting some that, those on got baked but or in offset an then I feel June. either

David Stoehr

Yes.

on The I portfolio book, thing the sheet of X/X which think also of But it premium is if the down. also rates lags mean, structure the way finance down, focus, helps Another the that's to too, go true. way sort balance I of on up. lagged our

benefit there's So to us there.

as down. also $X rate if the disclosed billion worth fall we will us materials, derivatives in know, rates over of got you assist interest and we've As that

reduce Xs, we So hit rates margin on management the and felt lock patient using as that up tried allow balance the like we we here. neutral through And asset sensitivity to upper by went become expand. to on should we derivatives to that the in when structure to both now neutral the were sheet just derivatives. right and be somewhat rates and relatively we've the And

out So competition is there.

what hold on we depend think the pricing But we right with now, the the world, we way deposit can loan does competition and at will tight. So pretty look move. it rates if

Jon Arfstrom

Yes.

helpful. That's Okay.

more revenue just question Just one on mortgage.

of touched on it. look saying we the first the same 'XX. You get depressed. day, can fair a repeat saw don't you're little obviously, in is that if headwinds potentially of were have MSR, And originations maybe But but quarter better? it, quarter I Spreads and we quarter mortgage what revenue Is that for think a on we good. the tougher I kind maybe even the

David Stoehr

Yes.

pretty $X production I our $X revenue that of think in that's million $X had revenue $X I of was to production and higher -- mean about accurate, $X million of production Jon. and to in about million than million was XXXX, revenue but down production 'XX. about revenue we million

we're they So of now, up at what least clearly, right is, and up through applications but ticking they're up from in are from not the seeing January first again, part 'XX. wildly, we of where November. And December are January, were

So to on back revenue would expect now. we get I sort based those that right of what that, know would levels

mortgage little in buying of the rates that but are the one rate to that down of bit, April. come up, reasons MSR additional going values the hence, do few home declined a some of decline think But not we've bit the season activity it's be that hopefully, and a I a of previous hopefully, Again, return to to bit. little a then March spike spurs been little and And buying we're spring in going if hits quarters. sort where

Jon Arfstrom

be will to watch. It interesting

think, good, that. Just a rebound though, would be I little on

Operator

of comes Chris from Our McGratty next line the of question KBW.

Christopher McGratty

things question past in I proactively reserve say, built are guys mean quarters, for I would the you still a good. Rich. have the when Maybe four

potential you get can or reserves guess, of reserves while to Or you in your the today, it just additionally it ahead where Given of desire I and build to just early XXXX? this is sit need speak kind build can.

Richard Murphy

what the result if out, work I forward what to pretty the should way because provisioning out, how in we're material, and down necessarily of do should supposed of -- getting Dave at put of in what we like growth Murphy BAA it were doesn't the not as they in definitely -- last There's about I quarter. necessarily things the models ourselves accumulate prefunding year road. -- -- that the point Rich the the just I affected had mean necessarily a that this it, same do end in mean so the you have quality portfolio. done, thinks very I the that as reacted, asking the works mean CECL wouldn't we've way. year, me the out you pointed is we're was we I we spreads going work, CECL that the affected think CECL actually work, good not it's losses fourth position it the I that think loan to

actually, our I to now. feel where as allowance really good given right portfolio of the the is So shape

David Stoehr

I Chris, And a can little bit. maybe chime in

very different the And quarter-to-quarter. assets I globally it into were still presentation, but a that criticized without points, growth XX low too if things basis percentages more special sort in we if have those look think substandard pretty getting stable. little good, our All than little second quarter. too weren't in at look a bit you we the of a mention and higher those held far you in weeds, low. the quarter, at had still Charge-offs

that our different So on as look and many provisioning. the correlation model high you factors to we macroeconomic a that biggest a we the expanded that us period our going most everybody bit, out, a of spread modeling. quarter that quite for BAA big the lines over for uses that which credit impact is a loan and models. one think increase, that spread at has had And of look I in But their factors at impacted our

the benefit traction the reserves. going landing it tighten the soft fourth those But out quarter, third extra should than generated and spreads the amongst was see the it some really are the there if that in gained forward. consensus worse quarter, economists and So then view should in, thoughts we

Christopher McGratty

Okay. Great color.

and Can like know some if factored the us scenarios the have disclosed currently scenarios? weighed as Moody's which banks of is remind to -- into what scenario the weigh. I the as you what far they or Just you've communicated

David Stoehr

Yes. at all the well, I mean, we Moody's look facts.

other scenario but some consensus look line are factors We the of Moody's, base at to baseline using that of of scenario. have sort various there. we blue-chip out out But that forecasts are

Christopher McGratty

Okay. to one capital back. Maybe outlook, single-digit that certainly Any something sheet just high on more growth, we The How capital you perhaps XXXX? and capital color ROE mid mid- support do conversations growth. think about would to I'll more consider? your balance can M&A of in in other would Any following be uses use great.

Timothy Crane

part I know to conversations also active, there's lot loan to trend a a think continue say you said, That's add a long-term in To others M&A short-term would the the should the Wintrust, but don't that's still are typically, I the case there's the quarters needed for going about to one, the the that activity. on but the position better for earnings change that's that of there. a be Well, not extent, capital, that isn't is several And capital. support been build company talk would to be where And good. straightforward that now, that, of growth. we've front, as we might who

been in acquisitive the of help past. rates loan down AOCI the either But a we've number books for had people impaired the who and or securities situation coming portfolio. Clearly,

disciplined we it. be future, but about in think may I the we're

Operator

from Haire. of Casey line Jefferies. comes question the Next

Casey Haire

bit touch a little the stability to on wanted guide. NIM I

get what throughout assuming kind Just of along deposit kind those of we you three guys cuts? beta those if the year cuts, are

David Dykstra

at able to that term the Fed for be basis Yes. the by 'XX quickly reduce the point Well, that we're I think XX are should fixed CDs if that generally, non-CD, this fairly cuts we rates points. believing

money we're be as the our to fairly rates we're as went with up, rapidly -- to to able rates and markets expecting closely like. and So cuts follow expecting savings increase we in

Timothy Crane

have rates, rates, some And come don't but the see or those happening to book starting thing other deposits, those of of we're Casey, as if of rates reference a index will. seeing, down. have what's you result with reference a municipal huge we're we

a some seen benefit already. portion on book minor we've the so And of

Casey Haire

on reprices just the release $X the about In Okay. question the out called that within guys rate a Great. you matures fixed within And repricing -- billion asset next year. benefit.

to? you the what -- yield -- what have reprice it is and the wondering the what could that Just on

David Stoehr

Yes. haven't that about that in that, disclosed releases. now, here I handy we'll right we putting but Casey. have don't future No, think

Casey Haire

Okay. just Great. a with And know deposits, bit if cap is I ratio. XX, ticked up guys growth is lastly, about just a there I -- XX the you loan-to-deposit on think you're about hard loan loan-to-deposit funding XX. ratio talked talking to have wondering to there little a if but that

David Stoehr

lot to of we of the is just ticked loan growth near end again quarter. sort come No. happened this next us. We like it range it the little of quarter. A fine in think our expect with It up a bit. down would I

were December. trying deposit the we match a there's of so latter lot part to just And towards and that flowed growth in loan

the just again XX% that down timing So of quarter a probably expect next I drift to little so. or raising. on But mismatch the to back probably deposit

Operator

of of next question Our comes Rulis the Instructions] [Operator line Jeff from Davidson. D.A.

Jeff Rulis

on co-work. wanted the I circle to Rich, back

out million. singled the of, You the credit What I remaining one $XX.X think, is co-work total exposure?

Richard Murphy

Negligible.

I $X million. be there might certainly think under

we're might pieces, behind that largely well I pretty with but us. below issue be I is large generally, think this small think addressed, that a couple of largely that. being There

Jeff Rulis

just bulk tables of that sort that the from those then some was due? and it. and I of so tracking identified the was credit towards back, Okay. kind guess -- sliding of of past

Richard Murphy

There. No, loan Yes. current. is

Jeff Rulis

Got it.

Okay.

words, expense run million expenses. be to 'XX. kind could hopping then the follow-on back to And -- assessment, that mid-$X is that rate there a to Safe that assume the question for the just And maybe overall quarterly insurance would to run rate expectations the on In of good absent reverts special just FDIC be range. other helpful.

David Stoehr

we've Yes. item. a clearly, onetime Well, -- the assessment special is

little bit. I things a depending of out, couple think years they a true the settle how on up of out, the may end towards those -- it

range. yes, now, in you'd a that that million grows. company grows away For as and that mid-$X be number assessment But goes

don't course much like the that trended probably it as time. over the we over the franchise to of goes up we're So assessment, can the pay year. that you see to because has grow going as up number expense But

only to is the balance would what past. expenses growth sort the it we about sheet, to of So overall in of with though. talked go then up And we've similar expect

of and slightly third technology run those employees we invest increasing impact digital rates non-FDIC for coverage increase quarter, inflation, at we grow, and of of the and raises in the you fourth the look of to insurance sort probably If impact our the as the have in XXXX FDIC will infrastructure, the continue merit we impacted wise. and and the as

range that But third X% the expect probably as the in and a we would high leverage single-digit -- loans can can is and the operating mid- of franchise that quarter to using fourth what if base we and system. grow get so range, we mid-single-digit the out the

Jeff Rulis

do for assumption? type type that one, for kind little Is Sounds slowdown in the the a good. of kind And do you to it on soft outlook or have touched crystal bulk ball That's bit, anything high single-digit just 'XX, but loan sort 'XX, you embedded. mid- you of question. a landing it of of a recessionary macro-wise then last layered growth there. But in a have

Timothy Crane

we've fortunately diversified my got to answer a loan granular that pretty and Well, would be book.

transportation conditions and and business our in about are some of past, already terrific. talked doing are we've others the challenging customers experiencing as the So

to pretty change a And know growth technical I across loan is environment. get balanced So of we book, over recession a the the think year. we'll our level don't much that going

Richard Murphy

different have engines point, all that we the It's Yes. -- Tim, these at times. just a different because fire great

year, kind you the finance is look over from essentially If because it our coming last where of this in premium growth environment, doesn't zero actually had at work. rate or group growth higher Life negative a largely

growth down, product. situation, that had we got product lot suddenly years you a a ago much and that that they attractive of into If was recessionary bring loan and type of out looks X more rates the

rate affect So move as they now. cycles different things right through, different definitely

impacted. gets rate a line utilization higher about As really we it talked in environment,

come opposite down, going you're see to rates effect. As the

some So to think different it's going I times. just going at there's affect products different cyclicality, to but be

to So forecast. stay that growth we mid- high to single-digit committed pretty

Operator

of question line the next Truist. Brandon Our of comes King from

Brandon King

on market I'm savings money deposits. if will So where a the see that expectation going forward accounts. -- question the of noticed came I is And quarter in deposit I most the had and from growth? wondering growth of the most we

Timothy Crane

interest-bearing mix stabilized. But clearly, than or clients. year somewhat a we ago, with are Well, more is our the XX months to we had attractive higher these think the products rates

CD wouldn't hard you stable you're And growth around hopeful going I ago. XX%. years to a seen stay continues we're that see the couple so working And have and money market noninterest-bearing and of reasonably think to that portion

Brandon King

Fed also accounts, that money lower to as of you CD part I is anticipating than strategy easier of maybe market sort those And of a rates Okay. easing faster those if maybe cycle funding? did guess, more

Timothy Crane

other quickly interest-bearing them. some Well, than customers, is they I probably of the for wide select best the of move correct fit we the options a accounts be offer to more what believe you and products. what set they our But said think that to would market money

are seeing down, lock in as Whether may continue you to the kind we trying those of rates that get more range. can get So come people activity you in will CD-related levels. as rates X%

Brandon King

on increase. increase reserve the driven question. And I But reserve notice appreciate I category. I Okay. then the another was C&I the did know in primarily the commentary

to on if wondering a opposed lot credit health you the speak of C&I as of just customers trends space. the your to So attention and could just CRE there

Richard Murphy

Yes.

is, I assets think level remains of things we pretty that of as point couple One classified the consistent. that would noted earlier to. a I

ratings. would So lot to to their on think to I up, classified you move customers direct about business very start start spent if our special see try of talking And mention assets But our is that be to we at. risk more be we a anecdotally, proactive time pretty where a reflection.

think, solves And and a number I along, feel bad as so it that feel was you interest just not customers. while rates clicking of zero C&I for rosy bit, it them. that most affected is Obviously, higher costs would a say, still generally them. And pretty I lot that holding that of speaking, problems. economy, has affect borrowing well. like and people doesn't had But line can clearly, slowed the top together really the little our when economy may be revenue

optimistic will revenues are from that their think and they those still coming overall pretty levels about where be. where I feel

I concern think overall -- input are of costs just a less become labor and has probably them for have stabilized.

I So I net-net, they say think would just feel pretty still good.

Operator

line Next question, the Ben of of from comes Citi. Gerlinger which

Benjamin Gerlinger

to be going to a ask to but I'm it anyway. I'm going ask you're little question. a going know annoyed, probably So I

sort of you rate end if you, I just you you 'XX, is 'XX over a finance bit 'XX. trying and CRE growth, you probably also moving a called XXXX, the upper four I possibly a you little into at think repricing And left it. premium getting exit premium obviously, pressure three target, of mean, we little digits, loan -- incremental might kind how -- mid-single So get there of market think largely when at still but has that's kind of think book all. pressure guidance If the that. indexed year have see I'm single work into any some you a environment, just rolls is I'm little range. do a the the at just -- have deposit margin of and digits of any to And back on middle get as deposit it's cut because but XXX growth, But flat probably good get a it's thoughts I tail finance has on costs. towards bit against like about in the a maybe is because there more -- incremental that on cuts, the and the what bit then said, year

would of air, kind that just the be finger in So really helpful.

Timothy Crane

Well, a of actual have be very index deposit clear, products. couple things. we To few

example, they're the contractual. earlier mentioned to while some for not tied municipal that rates, reference are I So rates,

our our discretion. than other pricing CD largely So we're at book,

or would cuts, business you would three pressure cuts assumed as rates we likely faster would right get or down. our rate rate mortgage slightly but if very now, we As and come rebound we're to cuts lines terms at low more margin it, in about talked you expect some beyond Rich's get the XX, and our there better utilization they point, to on of perform see levels

on some the margin while to have rates aspects as will we we be perform So other there think might that continue drop, pressure well. of our business

of value important of way our businesses looking So model. that's we're an at kind and why the as diversified that part the best we

Benjamin Gerlinger

aspect point, like efficiency It's remind of up trying will great kind ratio go softer the of us the Yes, fee mortgage the think on spread robust that you any we that definitely all of of some the to sort I slots, obviously a seen with too, income revenue. haven't color. if just pick as that's on, or turn great also that slot not goes just back market. to well. start does up guess mortgage? to a going I'm kind expenses if are Can

to the we So in I'm rebound a do just trying match if mortgage. see two

David Stoehr

an on ratio generally about how gross the gain business sale market gets think mean But I be the in margins of margin sort efficiency hot mortgage ratio the and wide efficiency how it Yes. XX% are. business. I depends of to on

So...

Benjamin Gerlinger

a the year. Appreciate flat. stay a guys helpful. horsepower It's really That's looks color. good It the should like you just you. have roughly growth margin pure Got that

I it. So forward look to

Operator

comes Our of the Terry from McEvoy of next line question Stephens Inc.

Terence McEvoy

each the pretty do But what you what a headwind But a we three number from what that comes to that if handy? would And is rate that have does hedges sure cuts appendix. Dave, like when tailwind? and be and the you quarter, turn get $XX are to million in that mind. it's -- I'm costing

David Stoehr

other, to about a was a if SOFR the $XX Well, our we so million month, that rates impact deck or basis it's moves slide in strike way I the put but million we're what quarter. -- one would Yes. points gives now, it's the fixed so variable. are details that. all presentation $X of think Right it paying But XX of and about margin, and receiving change that particular a the

strike down pay So benefit less. all, goes if may even though we'll SOFR hit not we'll get rate, the we at because

we pay will So $XX down, a what XX million basis that by decline of points. by if SOFR quarter comes

So portfolio rate it's locking effectively into of our more a based. $X in variable rate SOFR a fixed worth that center scenario of billion

Terence McEvoy

modifications? within And you how how are and are a then estate using rate market are -- defining real are loan you using commercial you or you modifications if

Richard Murphy

Yes. business. I part modifications are mean the a of

lease affected a hide with I can't seriously -- just vacancy you or And So modification. -- but rising by we don't rates if loan a is rates, loan a mean. problem

really you to have that that, whether not. flow But honest, problem. with so identified the income the to similar have the there that opportunity that bank it's one going current. just is Generally change be like the cash the case be at or challenging point, that's some honest have be change modification. going to you and it's and the we the to is So speaking, loan look that borrower say, to about the stream to In really at a and solve to

flow give often. to So relatively rate where policy-driven to you're that much flow all difference to with them much just maybe coverage that and the targeted little working actual we close, gap. between generally pretty cash situation the amortization cash but a it's do something And we use got rate. little I we market the be a is relief really extend the bridge bit speaking, coverage, when interest like to modifications, are it's the we're them modifications don't mean, do, bit or -- of a But a use pretty and

Operator

line comes of Preston Our the of next from UBS. Brody question

Broderick Preston

commentary yields. get wanted of I CMT that given I bit you, understand more Good wanted the the occurred. morning, just kind to just given I you'd the how the already but books, part ask have little middle X-year in of you that trend the margin to granular, expect the loan a loan everyone. premium gave, on finance the Dave, year to the in yields moves just

David Stoehr

that's book. book X-year the life insurance Well, premium finance is tied the the CMT Yes. to

so And you're to, alluding ago. a as rate similar is the to the very year now rate

baked So now. from in benefit is the that book pretty right

the time. go we not over is X.X% premium although at relatively rate, adjusting repricing are the should prime Fed those this book, are pretty back adjusting a the those of is primary to on same. commercial however, finance of repricing good correlation prime. The still most that X.X% the And end was because indexed the end have is year, if they adjusting So the at rates to therefore, stay when Prime And our people and year. generally XXXX you and are the

of book another there's fixed then will to. some basis book. have XXX real we that So repricing the that loan we portion rate reprice we estate have on commercial that of points there, And the out of

Broderick Preston

premium the fixed it. the stuff that's a quarterly expect you next that do like at that of Got the not the stuff all. to How reprice that's on much related rate finance -- And is over year? basis

David Dykstra

that, Well, big we've premium $X.X look It's got total. the finance portion is at $X billion. billion if you of that portfolio. our But in

I And have I'd So we probably over we real don't of billion the another of commercial commercial and se will just get it's reprice estate that year. the per any ratable. seasonality $X.X to think of type loans course portfolio. that say

Timothy Crane

it level, is as helpful reprice. this they generally At slightly

Broderick Preston

kind of assume to just X- is that bucket similarly ratable there? well I there make look to their Is correct when sure -- X-year to fair at I trying XXXX. I'm repricing as Understood. a get it through Yes. it's cadence that

David Stoehr

we don't months, maturity X any to ratable. We you Yes. We can have out boatload for or it's we're say, gosh, sort from X going years." a of get have that just my repricing repricing "Oh walls don't or So get fairly looked when at coming this. XX any

Broderick Preston

Got it.

drove other On that of the in if NIB banks versus outflow. I money. a A actually in the wanted the if deposits period-end group strength NIBs like of quarter you trend kind type a from of ask to this institutional there's any fourth guys the quarter. lot anything specifically on have came there chunky you basis, reacceleration the bucked seen that kind was

Timothy Crane

offer. the mean add us. clients treasury commercial we grow sheets. at that a continue level into balance and continues flows side the services their to And have use and the we we've equation large I for that XX% hard have not clients position services to we team And significantly. the products people of to hopeful as stable really turns the other end No, deposits. deposit are on our and But noninterest-bearing of year worked

of function building franchise. of So it's the sort a

David Stoehr

I line about Yes. at That's a there's the too. way talked Rich less usage. I mean, little would it, look

you're any offsetting quarters. stable So and last some of Tim been a that customers the some But use of the that And those seeing that's franchise it's of pretty line well. couple some right would maybe drawn to on noninterest-bearing continue we reason that industry-wide. pretty is it we're on add of the people why able of their deposits. have And if maybe to leakage said, of grow now that additional an being and average hold basis for as

So we're hopeful that we can hold there. it in

Broderick Preston

the last me they pretty under Great. that I quarter the flat were There's wealth administration caused to to ask in business. wanted decent occur? just on just this after last a is quarter. for what And pickup one then just assets

David Stoehr

the saying? you're be flattish, to For revenue

Timothy Crane

I growth, think. the Just

Broderick Preston

The No. $XX.X was to up $XX.X billion AUA billion. from

David Stoehr

of with Yes. things A couple that.

brokerage of accounts little a the grew Some bit.

the account. we our also that way a through that, our operate company as fiduciary we have, MaxSafe trust We that that -- product works is

included. get those So

that of spread a just in bit out growth other and little little area a So in bit places.

management little management of note up So portfolio our also And per under we is out significant nothing area se the number, assets and included chunky as those bit. a Yes. and investment sort those that ticked one in in press of any also in in deal. release, managed our wealth

Broderick Preston

Got it.

Okay.

quarter? -- that higher shouldn't move necessarily move next result the for higher revenue in in similar So a

David Stoehr

it based end asset versus valuations of quarter or of at on daily Some quarter. beginning of is

little see might there. pickup of you So bit a

Operator

like would remarks. back Sir? I for conference closing turn the to Tim now to Crane

Timothy Crane

Thank All right. you, Great. everybody.

we win pleased is interest moved that on. tell, you the we're your for and clients Wintrust. As an results, your can appreciate day, XXXX but eager got time and the generally in to business team with new We've every bank we've trying and

Thanks, everybody. hard, working you a and talk be to we'll quarter. So in we'll

Operator

participating. for This concludes call. Thank today's conference you

disconnect. may You now

Wintrust Financial (WTFC) 18 Jan 242023 Q4 Earnings call transcript