WTFC - Earnings call transcript Q2 2024 | Wintrust Financial Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Wintrust Financial Corporation's Second Quarter and Year-to-Date 2024 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 results statements. from in materially could anticipated Actual projected or the any results forward-looking such differ to the The company's could our call from XX-K that most forward-looking earnings this any SEC. press information during filings detailed in and differ the recent actual discussed company's cause the are materially the assumptions results with in release subsequent and Form

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

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

this reminder, a being conference As recorded. call is

the I turn conference will to Mr. now Tim Crane. over

Timothy Crane

you. and Good morning, thank

Officer, the In General introductions our that addition Chief Counsel. by to Financial Kate and were Boege, made joined Latif Dave, our

some an I'll Bank. back agenda, forward Macatawa Rich results, financial and some wrap up on share to color on and I'll going high-level we'll to our of highlights. update acquisition best credit additional summary a topics: and some and speak will Dave with do information pending be answer terms our of performance an In to activity outlook course, And questions. of Dykstra the will some X on add high-level thoughts loan

in For and first the half the just reported with of just encouraging quarter, million expectations $XXX we The underlying our positive million for and of were reported over record results of $XXX line net with income elements. year. under net several income the

higher would we million loan growth sell material across by loans by not billion approximately during Dave deposits The will elected over we had the product have slightly to $X.X all loans quarter, discuss. billion. quarter, balanced grew been $X.X the categories and in $XXX For which was and

net to are and loan growth quarter. we noninterest-bearing evidence deposit our results continue to interest stable deposits quarter. Midwest and Chicago, the record deposit first of and in was percentage noninterest-bearing X.XX% in almost combined absolute and in the with million, net strong it's expectations, and growth interest growth the $XXX Both of line margin deposit deposits the from million the $X the produced gain with total share businesses. included relative The niche income remained of The in for up that our our

some levels We loss of low expected experienced years. are from the few very seeing last of normalization delinquency the and the over credit

walk as were However, our the nonperforming prior classified loans changed some through mention will detail. little low remain substandard special quarter. from loans and additional Rich again, or And

a quarter nice is credit to think in I discipline, and our in respect team results will going forward. particular, Overall, up solid to our doing job continue very which show pricing a with

for are be that us also adding commercial clients rate, clients with We to at will come. healthy consumer a and years

hand here to pause and over I'll and to I'll Rich, up. Dave and wrap this be back

David Dykstra

Tim. Thanks, Great.

represented second basis. annualized both first an of the increased quarter. during And First, the end in and balance deposit at quarter billion relative second million the the reported this a on the the over -- and deposit quarter sheet to quarter and approximately to by first prior quarter again first to composition, deposit with the we $XXX noninterest-bearing strong quarter of growth of deposits the quarter again increase compared first in this loan The XX% year, deposits respect of growth. is the growth the $X.X as the total of XX%

last in quarter. So the noninterest-bearing stabilization a from and deposits slight increase

is and or annualized or the loan billion total quarter. during premium fund high to loan XX% above second -- annualized the helped growth prior Adjusting certain solid to for to helped deposit loan on for sale of $X.X strong of consistent growth solid second of basis. an the of with guidance growth fund loans XX% single-digit quarter strong impact our growth billion The would have $X.X loans increased on this quarter, the basis finance being an mid second

conduct premium at election appropriate the transaction finance loan-to-deposit loans premium our was quarter that loan of $XXX ratios. a The maintain the the million. and million liquidity, outstanding done finance would by reduced have to balances sale end capital quarter, the $XXX second was portfolio up during been net to -- Additionally, commercial of saleable

billion and other relatively stable of regulatory results. the capital our grew ratios with to aspects to $X.X sheet even the billion, As assets Total balance growth. by remained $XX.X strong

customers a another primary it and new successful for Wintrust. objective very for which of Tim has gaining growth franchise, of As the was our quarter mentioned, been always

unique Our markets model, our differentiated business and future. well, Milwaukee to Chicago and that think do the the it position provide our and service so will teams continue we serve in in the us exceptional

on amount growth categories, solid net assets statement growth. the a was due result the of income primarily the deposits that high quarter the million interest income of to prior in a than mix this cost of of attracting in loan our incremental last to and fund the expectations our increase An earnings higher interest in net net and average we call modest discussed the to quarterly shift the represented margin the the deposits strong the As income. record increased offset quarter and earning interest more $X.X from decline

We're long-term returns high-quality to relationships these at pressure. provide way, even additional take margin means current bit another a gains value. market loan it add nice of if interest and in share, and obviously and franchise new income Said of acceptable relationships happy advantage market deposit net conditions

from X.XX% quarter a quarter we interest be net quarter, net that was gives where into was the first can which in our slightly around quarter the us X.X% great the of second continue confidence this of interest up narrow to third ended and margin range fourth and margin year. Our in

in expect would net to earning income we stable the net assets, increase and outlook growth again relatively interest the Given quarter. third interest margin in the

the the in the credit up million was last of recorded $XX.X second slightly in relative but higher credit $XX.X characteristics quarter million to and for a charge-offs was quarter Again, slightly and about bit. million resulted recorded year. portfolio the of of just the fourth credit of net Rich in We a provision level growth quarter, which quarter, aforementioned a the prior primarily a loan of second higher expense loan the result in reserves. in provision from the will from The first strong talk of $XX.X provision down a losses quarter our and the in buildup

expense. when prior compared totaled $XX.X quarter, quarter. down million to approximately and income was On noninterest $XXX.X the second income the to Total noninterest noninterest million which in

advisers As recall, to that of quarter million the gain the current a for on primary the you recorded reason decline in sale retirement related planning the our quarter. the first and recognized we similar division in no gains was $XX were

mortgage production value And activity, portfolio. less we offset spring slightly revenue $X.X our on for adjustments optimism due revenue in higher buying although servicing our stronger mortgage company rates higher origination the experienced banking approximately generated persistently by rights favorable home mortgage market somewhat dampened volumes, was as to higher season million more which

sale million relative in to the material of The the those uncommon. were of the on income to as a release. prior security changes gain of categories, noninterest and company a losses, press But smaller variety $X.X tables the the a loans our changes and shown quarter recorded premium not finance modest in

Turning to noninterest expense categories.

employee expense to expenses related The was were benefits commissions and second million due total to the in primary quarter. and the $X.X from were mortgage million noninterest origination higher $X.X The on increasing $XXX.X first salary up the volumes. increased increase increase The quarter the for approximately approximately million. by reasons slight

which The employee having benefits increased we X, that increases level be expenses merit seasonally low. slightly health claims is -- to to first tends higher the the quarter effective the annual on quarter due of to second February had of insurance full effect compared during and were an quarter,

Advertising expenses category on and to previous we related year sponsorships higher as league sponsorship this held to third in increased million various $X.X first communities our major quarter, serve. summertime and second tends to we've the the when other calls, quarters expenses and events, the the in in second baseball of that expenditures of minor to discussed the compared marketing quarter, by be and

of recorded our as we is Chicago, expense, charge impacted going pending less was branch, which a branch optimize the lower period $X.X sale a The in X than by to essentially branch slight company an downsizing network. This on pending a and million of years. in occupancy downtown a bank relocation which payback work increase forward in sale estimated also of with result a expenses will a

special our in increases were slightly million Macatawa to related $XXX,XXX offset Bank by $X.X reduction the approximately the as fees elevated the costs in due $X.X recorded the of related million acquisition assessments pending approximately These this by such to of assessments And expense partially special quarter. were FDIC the Corporation. Professional FDIC expense in first insurance imposed quarter. no of company such to

remaining both and a positive loan warrant The net and noninterest expenses charge expected margin in impact our sale, of level on our excluding ranges. other of on extraordinarily deposit relatively and solid normal a exhibited were special net call. In are the interest and income quarterly pending second summary, negative record the the income and interest expected this any the range, is don't branch mention within strong variance quarter growth, noninterest

quarter that mentioned, produced results, of combined net to company. income X-month like first for the highlight, I'd this the -- record in Again, X-month with first Tim any quarter's the history period as

value first XX going we've we've this every to again to Slide as we're book our value build share since also XXXX. We per tangible continue year, tangible And and a our track the do presentation company XXXX, year. on so in during half public been see share deck, of you on to back can grown of per book

we're So excited We're proud the very that's something future. about of.

solid future it interest strong us have net We well sets up pipelines, in and income. growth a sheet, balance for

it will talk I Rich to that, with over credit. to turn about And

Richard Murphy

Thanks, Dave.

credit noted, both Dave to be performance and in Tim the As solid very quarter. continued

release, $X.X the finance loan Commercial As the in XX% finance impact driven the $XXX loan This net premium billion factors. grew was by of of growth a number or sale. loans. of was before the quarter the annualized, premium detailed the sale from of $XXX for growth earnings million million in by impact loans

highest in is second noted historically volumes. when funding our the past, we As the see quarter

of market for particularly a the to continue properties, loan average harder we effects for addition, higher commercial premiums, insurance resulting size. see in In

of consolidation and to within premium a Finally, we opportunities see new a as the finance continue result industry. dislocation

we opportunities loans, from up by quarter, largely banking in core resulting During second quality the driven our saw primary markets. commercial dislocation $XXX growth landscape million, also in which the within were

real in growth good saw leasing estate also our commercial and We portfolios.

on remain also appropriately focused note we our for getting highly that I paid risk. would

quarter. reasons. the growth As to-high Slide yields of X, our strong continue digits average will second to half XXXX previous loan guidance noted during the up believe increase, a XX of that number continue with to of We loan points for mid- aligned on basis be single and for

Last for for year's premium third quarter loans continue should We volume very is believe year-end. strong. insurance the premium hard through market finance commercial

very leasing C&I core and our pipelines addition, In remain solid.

Finally, loan borrowing borrowers reduced business CRE opportunities as rates costs pressure we to C&I will purchases. projects, continued to that core equipment costs this We XX% reconsider new saw demand in be volume believe XX% quarter-over-quarter. on economics continue the higher that expansion utilization cause higher and will area. have from of trending new to up a the growth line Offsetting of borrowing

at our loans continue grow we maintain be discipline. about and rates summary, our to In attractive to credit optimistic ability

As noted of continue the mid-to-high growth within strong single of balance guidance and earlier, our be digits. should to XXXX loan for

points the From basis loans but be quarter's Slide points. increase and levels the both of see portfolio evidenced loans in nonperforming our we that premium segment performance, loans quality credit portfolio. NPLs core across we transportation was strong see slightly of with This credit as XX, as continue percentage can a ways. in CRE noted on resulting commercial XX total in from seen XX detailed of slightly basis from in was a but elevated perspective, signs in number on as a of up This normalization to stress portfolio. Nonperforming of portfolios. lower And C&I ongoing finance call, modest last to continue to

situation million underwriting. segment primarily yields portfolio. $XX premium this XX up and loan the or Charge-offs losses. and finance quarter basis or were credit started for in have commercial monitor from this points, see charges stabilize enhanced to tighter late We the from we million as portfolio continue our a offset the basis from These of within core points to to and trend result QX. our Higher charge-offs XX loans of structures continue in C&I CRE, $XX.X resulted closely,

solid, loans. where saw Evidence on be of on Slide reflect stable environment this as very normalized continues Slide this level our seen substandard levels to more XX, We and special evidenced credit portfolio granular. be historical well of to a in believe could of mention diversified Our chart very that asset quarter's we levels the NPLs by charge-offs XX. return and and nonperforming a

Finally, and appropriate. charging problems we early are committed identifying down firmly to where them

as as credit of Our always, they goal, head is any challenges.

particularly our few loans, noted occupancy and portfolio. continue which the continue evaluation last our the in lease of highly total office to commercial real As pressure X/X Higher calls, in rates and costs category. focused to borrowing earnings to we on on comprise CRE estate be roughly affect exposure

X.XX% ] to -- average and total [ the XX, or our of quarter and rightsize X.XX%. more modest our sizable an in CRE CRE office in portfolio uptick of we increase and challenged loan $XX is X a from As provide Slide in to XX.X% loans charge-offs billion only our -- office saw The detail at $X.X only occupied. loan exposure. remains have X occupied. on we On in of office owner and this also proactively as the continue above portfolio. portfolio only total $X.X size average steady our the X.X% or million we address detailed of CRE only office which our NPLs billion Of non saw continue XX, million owner enhanced are the the CRE credits. and to we The Slide during of medical CRE we second portfolio level exposure, or loan $X.X is XX% Medical Currently,

We engaged performed and our CRE portfolio with our very we borrowers. portfolio, stay reviews regularly on

now of nonowner-occupied prior of the the quarter calls, over regularly every credit loan XXXX. their million, on be between deep and mentioned updates analysis which end will of As $X.X CRE team our dive renewing first

short-term following: analysis which XX% collateral. loans will of this roughly maturing clearly for a remaining require extension off to will paid period all of loans which these a covered during at are the or prevailing a attention, prevailing the XX% XX% of be loans the renewal require rates, anticipated in some could include paydown at This of CRE nonowner-occupied loans reviewed will and additional additional rates, qualify pledge resulted or

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

identify we on the or As proactively the rates immune our forces portfolio we market continue to have not lease stated from rising of calls, is rates, but prior weaknesses behind in effects ahead. weather portfolio the that situated and portfolio reserved the good our our identify believe in the challenges work borrowers and outcomes. with to appropriately reasonably shape to best We is possible

credit, now back I'll turn on comments my to Tim. concludes it That and

Timothy Crane

by growth wrap and environment prepared in heard the positioned very you've with we're continue uniquely on sort expect of loan to The we while markets quarter growth remarks, current Thanks, of the to businesses. positioned well be of solid this see continue prior that me this advantage was encouraged diverse up to our we we say this take our to forward, calls, believe some in our necessarily wouldn't going Rich. To pipelines. that. evidence And cases,

year rate half we of given As margin assumptions. the be stable second in relatively discussed, the will the current Dave believe the

interest year. continued With integration second likely half been Bank, have and many financial income solid pending growth believe the transaction. our good there respect and the the Macatawa in is acquisition of growth the with this and otherwise With and the this of we planning to associated net conversations the pipelines, that quarter benefits regarding

on track was our about team very organizations the for we of will strength application, that Fed which opportunities remain and the their days We quick acquisitions. with XX strong in record environment, We approval XX we the both received impressed transaction together. from today's and reflects regarding think relative that have June

top Macatawa in recall, which MSA greater very deposit solid attractive West Grand credit serves and States. quality, Rapids United You'll a Michigan XX a the have low loan-to-deposit book. a low-cost is market, They ratio the

they to excess ratio to XX%, transaction their special in billion shareholder after would close consider is shortly The transaction loan-to-deposit deposits. and approval. approval approximately XX, which has $X.X we approximately July scheduled of final their expect translates meeting the the to Macatawa receive shareholder for

our course, with provide related additional the closing, information Of after results. entries on quarterly we next financial will

questions. and I'll we some point, this pause take can At

Operator

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

Jon Arfstrom

either some what for be the drove thought you of growth Rich I expect And quarter guess, anything than there's just second near kind and was term third quarter loan do would on or pullback the in activity. I call terms it Question else obviously the of of this if stronger the kind near-term the provisioning I but out Tim, you mean -- in as well, would quarter? the of expectations. a

Richard Murphy

out, pointed talked That tempered in Well, second is the definitely the the quarter. markets. was affected out, it we're first really as end of as our nice quarter P&C third gets opportunities in we at quarter. knew primary the by I And happens But portfolio. very still the what We about coming. that seeing I in pointed core

of going would in the that for quite of down quarter, slowed at P&C would back Certainly, I year. you're to range see we a half say be our probably bit. upper end So the the fourth the

ones. lower you probably historic of fourth funding our back at patterns, is the look one If quarter

will very quarter strong. be third So

the of As probably be I the at said, range. end upper we'll

Timothy Crane

business. we categories, some of material obviously a the strong point, little was the only function thing our really C&I in the all a is broad-based, by the add a think saw loan bit growth exaggerated growth things, part Jon, And our P&C And to growth. and in particularly But strong which market Yes. I side Rich's of on position utilization. is more I'd

know. that tailwind So be not, don't continues a to I whether or

Jon Arfstrom

it's commercial normal on a anything the expect like call this rolling charge-off the levels, hard -- It in charge-offs would around you is were do to Okay. higher, Rich, the Anything second say think you? bit estate Good. you but used out the unusual in more looks quarter. for I else you normalization. a term And rate, but run this there? real

Richard Murphy

particularly when it's commercial slides mean have at the where I different were got would interesting and of pop just just was Slide point of we I a number I the No. we it stories had a that estate quite ahead credits XX, looking were that challenged does up out a like there. that we charge-offs, that And number bit. CRE of real they

basis But look we I ] you points. [ if XX are X/XX/'XX to back at mean,

so you quarter the we it's that it's just know. just don't just a anticipate similar but And would in space, necessarily in necessarily don't in lumpy. charge-offs see CRE, CRE We third

criticized and that We really lot you're seeing movement. of not and would just at look point out a that substandard page

it's and -- don't just So to a it and is of these a you it's affect just tenant just sometimes lose the be term it, -- could that we're tough types the to we property, of issues replace but there use that. like primary episodic,

that take very mean, was out that normalization. of look that level if in charge-offs a still just of you history. at level of feel I we some tenure broader all terms low such were I terms -- a that historical point a in out reasonable But these and QX generally it we sort. NPLs. of than a But at little at like of feel you we're a NPLs, numbers other these at When mean it's different signs doesn't chart speaking, look

Jon Arfstrom

Yes.

hold Okay. Good. fair? And philosophy one, to that based what you're last is the guess and relatively point percentage your I then at stable. seeing on to reserve Is this try

David Stoehr

that But this like is yes, happen. drives Dave. CECL to Well, Jon, that result. certainly, sort we'd of

provisioning our in year last is higher sort deck, charge-offs the Now always been or our we so. over than of show

that and times forward economic built potentially going extent reserves, could CECL building have that think problematic reserves. and model slight been I what more the we've said we've a to So so was more

been factors as little And happens whether not, have bit recently some a or those of better problematic. economic getting and not that

we built the So have reserves.

kind sort in some had the be the you the reserves of book says think your And for we the point provision based if time look you've CECL should well, going upon got back I loan at if of people at forward. going provisioning, say, pattern life of to the forward? what that

So mean sort normal had that so look really has future we provisioning provisioning the quarter, obviously, our And I of charge-off to $XX really million. at X of quarters, just you strong And growth. added And look loan sort would the the levels. loan provision. averaged this about then growth, at last if

a not one to would range, was one quarter. those the $XX a of reserves, but we would what this build probably million little exceed So place that, We start. again think charge-offs bad and had in bit that more and was than quarters

of sort growth standpoint, a sort bit little to But a Rich substandard are see us growth from economic fluctuates changes we the or or holding characteristics probably on it's loans minus depending stable. it if classified the or of special conditions encouraging and factors. mention, economic million that plus aren't, portfolio, based upon provisioning as other we and and very classified So $XX in of said, those which percentages any the the

those show actually, are if quarter. quarter actually at look that last you And down delinquencies release, the we from in the earnings this near-term

So we're out systemic not seeing anything there.

a going else, lower episodic continue mean or provisioning been what said, deals Rich the stable. something minus, of higher barring smaller of or changes you're mid-XXs, factors. sort on as But obviously, would And macroeconomic in we've added than estimate research think that that build and that's economic couple based probably it. to that decent plus probably the a I to stay would would if forward. So or of be nature But of

Jon Arfstrom

sorry. What was Dave, that,

David Stoehr

I so answer, that. apologize Unwinded for

Operator

of line comes Haire Casey question the of Our from Jefferies. next

Casey Haire

questions funding on strategy. first the NIM. of the guess, I on Couple Great.

was you're -- obviously drove want that the operates that just of I go? this lot of today? to you limit to a -- wondering, quarter. what the a your growth a XX% guys -- is is then there there limit -- how CDs And don't you at is do there CD you Your deposit are as high stack

Timothy Crane

the your extent those more history CDs obviously, funding that have are book. you'd recent to expensive source, of it's too have fewer, XX% could to Well, made when but prefer somebody's not up

we've our or specific So is that levels. I have the a don't we X%. CD renewing, of approximately offerings minus think promotional number, lower year are shortened most but you a And -- can offerings, plus tell and at they're I ago are from what renewing now

clients is we with a to so long a were And that committed quarter, with with be we time. acquire there us we've for pricing core of growth loan lot we've these deposit the done will customers, and this And new that. promotional But growth rationalization we of some expect which funding we rates. to think the acquired

Casey Haire

that so then And digested? forward? loan expect things, bps -- of loan million sort finance lift to Is kind of the yield up wondering, yields XX the that side cadence we in on what Okay. can lag premium on is just now of terms And of can repricing. we loan the $XXX going

David Stoehr

Yes.

hasn't if risen in you digested, a now. I within generally Casey. you at think a said, I of it say, those year and turn about as portfolios, mean, well, Prime year, over both look pretty they

probably We area rate book those I on think some commercial be point leasing loans rate fixed single-digit have think loan would quarter. and of through other increases cetera, I next up. deposit much loans in both increases. back in deposits pretty will But still basis do we et loans, real think lift there'll those, yields. -- the that even reprice a we're estate probably And side, and in slight say, we with the the

expect to $XXX margin stay [ around million again, we, So the ].

the million And even year, rest there's if can managing think $XXX or of X, points this we a margin. still we XX So hold of we're rate that. cut basis the

Casey Haire

just Okay. All Great. right. And last one.

million. missed you provide at if but spot a I this, Sorry $XXX did NIM guys

David Stoehr

we didn't. We we at But ended know, you this $XXX quarter averaged $XXX quarter and whole -- as range, the million. last

So at low so. where million we're is $XXX

Operator

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

Terence McEvoy

Just to there loan quick $XXX million in on Was a recorded here a X gain all the sale? start.

David Stoehr

Yes. I my comments then get we little mentioned that a the in bit numbers.

little million So a of we $X.X $XXX million. sold of those over and loans had a roughly gain

You last over sold spreads when really the those come of $X quarter -- the little we the really was recall a year The and loans, -- are it they or million. have cost tighter. last in pricing, funding

$X.X So Terry, to gain like I it But sale. and capital liquidity, obviously, have the over to them $X.X little that kept cash was on we sell said, balance gain a next quarters, thought million over sheet. them net on million and loan-to-deposit really on -- those have about X a the from, We the remember, our you we loans would present that's purposes. recorded more flows just interest had valuing back prudent but income, recording

the we have sale money third quarters. quickly. those of substantially by book the and on would in the end That million, the on And an will income back from portfolio those of that fourth pretty loans come But that been the perspective have $XXX replaced interest so. earned year,

Terence McEvoy

you've within then back CDs -- growth, in margin and what's the there, your essentially, second of And billion interest-bearing year. could $X of the assuming that loan maybe year? outlook, got in maturing us help as And this of the follow-up the maybe a costs half got to what cost half XXX you've you're deposit just fund you for understand

-- rolling think into was market somewhere those I rate it a CDs else? $X.XX are mature, rate. you are they products when seeing What or

Timothy Crane

question. last the your to answer Both is

I of the are clients promotional Some rolling shortening we're CDs, into term as mentioned, the CDs. but

market And are you're closer clients the so to than seeing X% X%. roll into -- offerings, also money which

would, hard to continue the again, growth that to deposit roughly match allow And to work CD And retain so have we'll loan to us forward. volume. and going

And first of me the again? your give question sorry, part

Terence McEvoy

do deposit up fund They over think you growth. year. QX in the to do X Just second What obviously half of the quarters? in this next were will the costs interest-bearing they loan

Timothy Crane

Yes.

interest-bearing had I rates was roll of quarter in off. we on terms that movement substantially think lower deposits from were deposit the big the when costs larger this some

point, should to And that I costs, muted kind think the we're going Dave's to so much deposit what change loan yields. be to to happens see in interest-bearing a more of similar something

David Stoehr

Again, be both single-digit those basis raises point categories. it'll in a

Operator

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

Christopher McGratty

the back to you X.X%. the little by guide. linked just quarter mitigated Dave, there growth given that NIM of bit in the was is The the year quarter's growth change in it acceleration going got quarter? relative back a NII to this Is NII about pressure? the half this Or an of

David Stoehr

No, NIM fairly think is hold think to we -- I going the Chris. stable,

think asset really held grow will do believe can and be So the be the is loan. we can drive earning stable the growth be why margin NII in I think we we it that the growth here. will And

So we growth quarter. had a great

over our into the range. So second that's of the high-single-digit we're high to at end said, And half going of year. to- carry the mid- Rich as

would at And that, the of end I accelerate high it think. should if we're so more,

Christopher McGratty

out? sensitive to see you've I than asset $XXX if know that curve Relative cuts thinking the we're but Okay. over less lot now, do looking market fickle, plays a market's I right the X talked been, downside but fairly year. going much to out, the the to you get about million, guess, you're you've next or And X then -- I how mean, margin

David Stoehr

our X forecast think confident Whether Well, that, or in we year. have we're if we whatever mid-Xs. maybe there cuts we feel XX%. keep X looking pretty can this mean it's of margin that cuts you that low at next at I whichever to X to in we out I still think is -- look year

say, to So X.XX% X.X%.

speed sort on the of the So those. of magnitude just those of and depends

lot we'd But we've think done to be downside. a that And of protect that end range. hedging in I probably up

cetera. if et cuts, going XX there's be So have probably the on you're lose money, because spread some we free XX your to on going or to stress

manage based but think range So that I it the will there how and think we estimate there, pressure be to in X.XX% hold X.XX% to some on current them. consensus we can

Christopher McGratty

high little true-up? this [indiscernible]? is a the then And a Is this looks perfect. Or quarter. That's this tax a rate

David Dykstra

on all Well, out sharp are you picking things. guys pretty

David Stoehr

nuance, this the in that quarter. the treated of is way going It's change we to will apportionment deferred tax inventory up of our state the because but little quarters, changed benefit for that It's securities past the revalue future had law. the Illinois but us kind investment the bit in a a forward of and law

little that barring more a generally, items range, unusual the In bit. XX.X% thought quarter. any So our the tax in in past, was rate bumped rate the the up we

that's probably to XX%. closer now think We

going rate close So pick in to we should X.X% our tax forward. up

of a us, that the few So tax revalue the Illinois rate State inventory, but had which little tax of times changes benefited tax our bit. the we law in one increase to had deferred

Operator

from next question Hovde comes Brendan of Our the Group. of line Nosal

Brendan Nosal

the for like for was maybe could seasonally the sales they off start unpack it would strong one repeat the to happen, a be this in guessing just Maybe future? you in finance any trigger here, to loan points premium additional quarter probably if business? I'm

David Stoehr

that's think higher had than to that, ratio would really here. levels had to core touched up Well, mean it and XX% been deposit. but we'd extraordinarily quarter $X.X we appropriate We want don't run at rather strong the just right. on to billion capital. -- care like we much not And of and deposits. and deposit We we've generally, loan running I the fund I have that we and with liquidity to keep an growth, go of Yes. obviously loan-to-deposit loans I or

it -- would mind, relief on on think. rather we I have we'd planning metrics our those need belt in it's X we'll assets it nice because a we stronger the other be we've So keep books, the but And use when that to playbook. really disciplined capital got have to And our us follow and judiciously growth. for liquidity

Timothy Crane

books. And again, minutes just do asset relatively Dave attractive could our very described loans it's a few roughly And this quickly, Yes. because turn on they a as I'd after add, with those be to year-end, back ago.

David Stoehr

Yes.

substantially -- $XXX they pay Tim's point, fast. that, because So balance less have we off but than so I that to to the mean, of sold average million about is you

is be balance. So roughly rule would and the of bid your X.X%, it you by that average thumb

because quickly. off so -- so pay And they

as a get says, Tim great your sell back and to it's asset So books class, quickly. on

Brendan Nosal

Maybe for one me. more

was AUM bit were strong guess little down see a I quarter-over-quarter in Within a quarter. the how wealth given markets I to business, the little surprised just second ticked

Just seeing and kind like. looks business that in what of momentum curious trends you're underlying what

David Dykstra

se wasn't in that grow expect third quarter. anything with would per around money to unusual move the It Yes. a of couple clients options, we different to but

right. So a change. it wasn't substantial

Operator

line from Rulis come question of D.A. of Davidson. the Jeff Next

Jeff Rulis

bit see kind to I you quarter but I think opportunities? I the some still nonperforming you still loans of for mentioned still where just higher check up that's in last if national medical rhetoric. tenanted sort to little mean ticked to office just check the of despite on office, there, saw -- Maybe in sort some you how Do wanted you're think appetite wanted targeted you or the -- mentioned of opportunities a see really case. feeling. And

Richard Murphy

We're that all talk this Yes. deal It's the grade an really did of but has another huge, space towards But else, you We else got got not that quarter, structure office -- and a good some obviously, we're -- in space. over very XXX% building, investment probably about. allocated we we everybody no careful not. because where and have because dynamics reasonable pricing. got we one tenant great that size,

to past, as have our we're I very are never in about job, the very deals want overreact. never And But we've out wheel talked be So careful. good still this again, jerk there. thoughtful, to the to there doesn't want really be always, day to

It's of time. there's on And our looking like be to there, could bulk do are if if up -- limitless you because to not opportunities people But numbers advantage them. of those. taking want we're opportunities there's out all that We we almost tell the there here.

Our find can't job is really, a those really and and opportunities. that really choose those are great to home just between are pick that just

but be yes, business, open So picky. continue to we very, for very

Jeff Rulis

was frame? a time a in again? certain you're... I that review maturing referenced, CRE figure Or Rich, that what bucket was missed you that the And Okay. Could you -- just

Richard Murphy

Yes.

us do, about several So think of we've to and a next and what about try really want number is for of to quarters. to we the over ahead quarters focus this we what's -- done

identify do are to And have where we rolling try X-quarter a where of affecting lease may what borrower more there's is may review challenges some ask we And the is what to balance. curtail pressures the borrowing we expecting. outstanding what to So higher have really been we costs have the we're just that. do pronounced or

consistent due just over period, the at we is numbers as I out, And in X-quarter loan pretty look that my of been that's we the a keep just track million I going properties. really in importantly to But borrowers of are forward, of -- loans huge those more materiality in those every -- comes and comment, thing to that, $X.X even just move terms we haven't as So me in it. that have not interesting we pointed those any their of think amount attention. is supported terms require have who seen

So what's as and it's we down look of coming way us as make kind to pike that just we understand -- for address the prudently a sure can. it's ahead it and

Jeff Rulis

Sure.

past frame. a in reflective quarters, rate of as imagine, that's environment. would that's current tight time you've And undergone So analysis that the I pretty

rolled good in that similar, that correct? gives mean, the pretty on that I that So read guess upcoming. you've confidence as you the Is that statistics stayed not fact get is credit I to a have that the nothing

Richard Murphy

what job our so ahead always understanding that's to stuff generally, gives to look it And going before perfect, pretty That's but of our this you to exactly our is a not at. right. -- doing that, of it to way up is good because as washes you're get way and try

has like thing other walls. maturity lot a -- about The we of said -- been

years. coming X very that. years, don't just the we due quarter-to-quarter. maturities at look We have number that's consistent pending a And It's X.X over next the

again, much so what outcome job as sure in to look to to make try is. just we of we're our those as that of front terms can aligned and And is get try in and forward the borrowers all

Jeff Rulis

a one, I no there's of of in And could it. timing Appreciate sounds like Tim. third cropping close. It community in that that come sort you've always heard. but like quarter issues X good the institutions pretty Any as and one transaction, sounds up -- with terms late, last quick Macatawa

Timothy Crane

We received June to approval. includes on primary approval The comment process period XX. a prior

communities no, continue So do as they only we but do well, to serve believe well. not as that we our

Operator

comes question of the James. line Our from David next Raymond Long of

David Long

the sticking about interest of lot and $XXX range. talk the margin here A the net around million

and that interest will of And net $XXX sort how million that? Macatawa, of the of next maintaining that adding that Macatawa, the for impact about think is quarters margin? part outlook couple you As

David Stoehr

think a We'll But our and we're They're so think liabilities you available David, with can But talking queues. all our and value. current not market going organization publicly now is far Wintrust, dramatic, of be going $XXX to size revalue about positive. go size be because the have are purchase it's No. there'll we slight through traded it the all asset of data people be that, about cetera. if and Most blend was trying company, things it's once of as Macatawa that going through But at not to million, growth et margins, relative positive set. We're publicly right a look to go and to the Macatawa about it. But accounting the you is. for Macatawa to we be of lift assets about current haven't those to margin. of to number organization. base, exactly what as disclosed we think X% culture in the the they

it that vote. tout we this we try just loan up, them beneficial, got get of One, XX% shareholder into fairly deposit vote size we as don't they've should be put know, they've our liquidity that excess want loans out front of little But that to quickly. to in and because and fair but to of marginally use shareholder materially think a thing over since ahead a and coming not we just higher-yielding the funds you But those it. can a -- aspect can of amount got take XX% their

So we to them. beneficial that think be will

David Long

the guaranteed pretty rates And of for rates seeing the the and have resurgence Chicago a some Got deposits, X you in on savings it. relates seeing -- months. market? is are What there competition, you bit increase? high next deposit And seems and specifically an Chicago some are in of MSA, bit then in seeing a the follow-up to question I be to

Timothy Crane

Subjectively, only XX-month longer to more or terms less personally is surprise, -- around months mean I call have XX-, some We're rates that would it's it, at X I the been that people would have than David. X%. out others. there type seeing say I stable, guess, I we've

and strange here X% stuff. we're our think that I forward. competitors be going rates do should again, down those sometimes thinking But

Operator

Our of Nathan question Piper the line Sandler. from comes next Race,

Nathan Race

just that around to being back the fact in of the $XXX after cuts it appreciate begin ] even reprice to around can rate-sensitive of as commentary still terms I curious [ cut? have deposits for the I'm going million margin X guys X relates within it, discussion, context how hold Just of much kind following each kind you that

David Stoehr

our deposits are mean, not look if you I Well, disclosures, roughly CDs. our of XX% at

accounts able would as even the the we immediately. fairly are cut those deposits market money on So as and everything reduce fair that be moves if being And far CDs Fed other CDs, noninterest-bearing would rates to the our intention it than and quickly. game, savings rates

would we've a through. as way work fairly But take those while to done said, their short maturities Tim on CDs recently.

their work going to way those not take to for it's So too long through.

won't in and let's them, under do XX% of out if you've be got that say them so. the XX% you price when have immediately. out XX% So got And we got think active another with. XX%, you to that of CDs noninterest-bearings at would take you we've we We just XX% doing that ability take

Timothy Crane

deposits reminder, indexed Yes. have really either. a And don't as we

to rate, of Some down bit trending a the a little which of are prior Fed to is tied cutting. deposits reference our sort actually even municipal

the move going not it carefully. to that's number watching a but ton, we're So

Nathan Race

smaller morning Or institution if if M&A the chatter of likely scale these the would just still imagine company heard this today? Very smaller deals. size guys helpful. increase entertain imagine Great. a little Okay. Curious I if land some some are I in interested bit. you of acquisitions another guys to there's those lately. Changing you these are gears kind that given days? We Chicago from --

Timothy Crane

we've where felt The ability certainly think our it sense we $X.X would made be demonstrated overlap of We we're about in of the they acquisition would favorable if $X.X if get Macatawa to deals like activity. some cost We deal Well, branch We do well. in strategic from terms to more market, sort there needed we terms smaller is we takeout right or think look that's billion billion. size. a or think good economics you at was in. of

But just I $XXX us that good want dollars. pick think integration is We billion the culture, in can several we right to do range markets can a number, for expand. good million we companies where

So helps I Nathan that if don't or but... know not,

Nathan Race

and Tim. color. XQ just to great last the margin in that's on on thoughts gain considerable degree. trend XQ the gain down No, XQ Yes. sale may One The Any mortgage? on a versus one. sale on how the margin came

David Stoehr

if Yes. down forward. from us from the I to the I would -- but -- X.X% sort expect the been you range low to to range, at look It's we've that's X.X% been X.X%. we've mean, little of X% a in the be still going bit, --

Operator

the Shaw from Barclays. Jared comes question next Our from line Instructions] of [Operator

Jared David Shaw

should target peers? be with here? my it But are thinking at of sort to should answered. I we level you for as comfortable guess, Most sort that closer be what a to something that were questions higher, be we of we look Is CETX, of about capital, as growing you? especially Or that for expecting

David Stoehr

I'd think I where it's there say at comfortable things us, we're of Jared. there, are couple obviously. a -- Well, We

outstripping which leverage use earnings We -- would our not as just securities generally They're preferred over common X. stack. We capital, time our expect continue to grow do capital also here because have Tier Tier in We grow our X. count to number that of are equity capital.

of but quarter, this off this strong we where so slide decrease, manage to This capital grow the some the given treatment. period but expect how one a count that was strong, capital, which And amortization the a X, a in the another here But down XX, us for growth. to was factor the sub had in we into sub of we total And limiting growth. debt did and is reasonably of bit get that the over capital sub be But quarter, of little if part we're But debt little the that. past. you pay remaining extraordinarily risk-based XX% look XX% sort of to lost that issue didn't short tends we period in Slide the deck quarter we on unique that strong time. was capital us the also debt would

flat we XX% another And will that to XX% so that -- get next -- where we but until lose of stay June accounting.

relatively ] expect you accounted that capital And going for earnings strip we forward, equation, flat. would in without take continue growth, out if So that number. X.XXX [ ratios. we just and the the of stayed And the capital roughly that ratio the to decline grow

David Dykstra

little we a have also bit we -- acknowledge But more this.

stack. We have a little bit more in leverage our capital

this Our capital preferred we environment, securities a are and and they them. stir redeem relatively cheap in X to permanent until decide count

the So near now, that the to XX CETX sometime structure future. recently right have to capital get but we happy in understanding need probably that over

Jared David Shaw

color. the finally, like just average CRE seen, you on on great real when the then That's you've office. on estate, been at And what's decline valuation look the Okay. that maybe commercial especially charge-offs

Richard Murphy

different is every it's is. and just to big. number on that existing it's I a a draw hard But there small is of bit the so depending out would -- a such location -- deal throw It's just there. effective It's population to kind insignificant. really just range because it a how hate it's But not little number tenancy and the

Jared David Shaw

But concern causing nothing you that's more broadly.

Richard Murphy

I Well, I declining a situation. time good not have you valuations, any mean, it's mean

I ]. the structure nothing it. it's located I thing again, looks profound most on a that that's but massively I importantly, most existing like like. So that's every something different situation -- what every depending just mean mean, little lease [ is bit -- where that mean the it's zirconium probably and affects

not we had large projects. our generally looking And little portfolio haven't bit unique a nature super at speaking, there because the again, we're of is

in well. tenant as the granularity tend more you have to base So

you a X in building of mean have but a seeing that's X you're effects. where not one if seeing we're lose tenants them. most and huge, So you I the profound or

Operator

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

Brandon King

back a follow-up part you on the context us of the also the far the mortgage. half year? as in is your quarter. some trends later particularly Just as you And saw for could what give Could give the us of you outlook

David Stoehr

Yes. Well, would spring buying more in. a And bit I we said, as better first last than season kick were little quarter the quarter. that was quarter optimistic little second the a

second You we the quarter quarter. that in origination had the $XXX $XXX for could provided. in first versus million sale that see million numbers We of volumes

tick we last stronger little than a months. be but been up X there, were it volume that. the hoping X bit or fairly application has So a would stable

and because quarter generally stable expect the of purchase dip down the probably the fourth It seasonality. rates, And drop the probably slows it activity our here rest activity in relatively and rate structure. down roughly unless we stay fourth first the would is then quarter, activity and a of right purchase there's to quarter our in fourth really quarter given interest just XX% now big of

case little see and flat So be our right we the in in mortgage rates come now. then XX-year which base the the would not is a -- dramatically, it unless relatively dip fourth third down probably probably to expect longer-term we quarter quarter long

Richard Murphy

Yes.

of the quarter, is issue talked we come a last that all prequals There's is it's The just in -- As lot too, one. of not -- inventory. have time. for we about really lack

able So they've ago. were fact dramatically and digest at been looking up years that couple of over I people they are the where think the a mortgage rates they're to

They it's a not is of offers inventory there. And that they're there just comes multiple homes. property to And when a people looking away. are there buy out online, right just whole lot -- just are

we -- probably purchase is that's are the XX% said, So as right we're biggest now -- challenge oriented. Dave just

So can't home take buy, you can't find if you mortgage. a out to a

David Stoehr

is and expenses, thing million banking not the expenses, out is million. $XX pay commissions fluctuation I'd is again, other taxes generally commissions, $XX the after item, you is that net other that effect Once the now Dave Brandon, in this line revenue to on dramatic. gross add, mortgage other on And

don't in we that. number dramatic see are going impact love one we'd job profit good on really enough job moving of it managing and that have doing moving just teams we to And doing income to think a of the substantially because impact the this a don't environment, a of net and enough the on in just this way but go it company, good our have net a other. it's see just We up, the or dramatic to environment, rates

Brandon King

Got you.

with so sensitive less I forward? thoughts issues And would those in a be to inventory on say the mortgage there, rates and that mean could you moving decline

Timothy Crane

of a Well, mean, I here sort there's dead low because got zone very people with of rates. a lot you've

of question reasonably a rates originators are. exactly of point, certain beginning clients' just know kind all mortgage decline pick activity. certainly where the I'm And a to may some up lot rate most some so progressively that not volume. happens. of of And going at produce of It's you're that But their when

Brandon King

sense of Any where Or is it to you give is? can moving kind to level us as target? that

Timothy Crane

evolutionary. it's think I Again,

But would handle people a have lot the with XX of XXX So mortgages X help. points or them. on

levels you're get have get we to years before so going what to to X or X ago. lower saw much anywhere near And back down to you

David Stoehr

Brandon. is around to used on that our the X.X%. it to or average X% But I have answer Yes. don't that, portfolio I up just a is that rate right mean we now and service, -- be specific drifting

when had that rate, go going So to lot to X.X% that ] dramatically. X% weren't they there get think go to I I a refis to it they X% X% the But people to of are there have down a mean, [ mortgage rate. for out

there's but X.X low-Xs that to pickup, or high-Xs the to got X say, be got go from is just I'll to go got this the X you'd out I really "Hey, or house. people won't from gut a is buy, the you our again, to our gut into X new there to high-Xs. that But rate so want or and would to see too. low-Xs, X into get -- I high-Xs if supply

pickup So But I it. started a rates in will to Xs the in that see down think before, when bit of certainly, we came little activity. mute

if that be So guess would think the helpful. would low we quite into I you that got Xs,

Operator

Tim this the turn call back At to time, remarks. over you. Thank I'd like for to Crane closing

Timothy Crane

in think the the for We and continued that next Macatawa growing with Yes. Thanks, us. progress share solid and compete. franchise able remain presence where quarter. acquisition more our you thank excited is line, the a joining Latif, we information Overall, and quarter hope everybody on to we you to about be

out your our any As items, you and always, with can Feel hard appreciate free we good feedback. count to questions work your on team reach follow-up to and here.

Latif, you. sign And we'll off. that, thank with So

Operator

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

You may now disconnect.

Wintrust Financial (WTFC) 18 Jul 242024 Q2 Earnings call transcript