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Mr. Crane noted, “A stable net interest margin coupled with earning asset growth resulted in record net interest income in the fourth quarter of 2024 as we grew our net interest income by $22.6 million as compared to the third quarter of 2024. The company continued its consistent, strong loan growth as loans increased by $1.0 billion, or 8% on an annualized basis in the fourth quarter of 2024. Loan pipelines are strong and we remain prudent in our review of credit prospects, ensuring our loan growth adheres to our conservative credit standards. Deposit growth of $1.1 billion, or 9% on an annualized basis, in the fourth quarter of 2024 outpaced loan growth which resulted in our loans to deposits ratio ending the quarter at 91.5%. Non-interest bearing deposits increased $670.9 million compared to the third quarter of 2024 and comprised 22% of total deposits at the end of the fourth quarter of 2024. We continue to leverage our customer relationships and market positioning to generate deposits, grow loans and build long-term franchise value.”

Commenting on credit quality, Mr. Crane stated, “Credit metrics improved for the second consecutive quarter, ending 2024 with overall stable credit quality. Net charge-offs as a percentage of average total loans on an annualized basis improved, with the fourth quarter of 2024 being the low point for the year. Prudent credit management and disciplined underwriting standards continue to support low losses in the portfolios. Non-performing loans also improved in the second half of 2024, with the fourth quarter of 2024 non-performing loans being 0.36% of total loans. Improvement has been experienced in our commercial real estate portfolio, where consistent in-depth reviews of the portfolio have led to positive outcomes by proactively identifying and resolving problem credits. Total non-performing assets, at 0.30% of total assets at year-end, remained consistent with the same level at the end of the third quarter. We continue to be conservative, diversified, and maintain our consistently strong credit standards. We believe that the Company’s reserves are appropriate and we remain diligent in our review of credit.”

In summary, Mr. Crane noted, “We are proud of our results in 2024 and believe we are well-positioned to continue our momentum into the new year. We have successfully reduced our asset sensitivity, leaving us well positioned to deliver improved results independent of interest rate changes. We remain focused on winning new business, expanding our franchise and improving our position in the markets we serve.”

The graphs shown on pages 3-8 illustrate certain financial highlights of the fourth quarter of 2024 as well as historical financial performance. See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information with respect to non-GAAP financial measures/ratios, including the reconciliations to the corresponding GAAP financial measures/ratios.

Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/4c23147f-25a8-47d1-b395-94398cec535c

SUMMARY OF RESULTS:

BALANCE SHEET

Total assets increased $1.1 billion in the fourth quarter of 2024 as compared to the third quarter of 2024. Total loans increased by $1.0 billion as compared to the third quarter of 2024. The increase in loans was diversified across nearly all loan portfolios.

Total liabilities increased by $1.1 billion in the fourth quarter of 2024 as compared to the third quarter of 2024 primarily due to a $1.1 billion increase in total deposits. Strong organic deposit growth in the fourth quarter of 2024 enabled the Company to reduce brokered funding reliance by $482 million as compared to the third quarter of 2024. Non-interest bearing deposits increased $671 million in the fourth quarter of 2024 as compared to the third quarter of 2024. Non-interest bearing deposits as a percentage of total deposits increased to 22% at December 31, 2024, compared to 21% as of September 30, 2024. The Company's loans to deposits ratio was 91.5% on December 31, 2024 as compared to 91.6% as of September 30, 2024.

For more information regarding changes in the Company’s balance sheet, see Consolidated Statements of Condition and Table 1 through Table 3 in this report.

NET INTEREST INCOME

For the fourth quarter of 2024, net interest income totaled $525.1 million, an increase of $22.6 million as compared to the third quarter of 2024. The $22.6 million increase in net interest income in the fourth quarter of 2024 compared to the third quarter of 2024 was primarily due to a $2.6 billion increase in average earning assets.

Net interest margin was 3.49% (3.51% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2024, unchanged compared to the third quarter of 2024. The yield on earning assets declined 24 basis points during the fourth quarter of 2024 as compared to the third quarter of 2024 primarily due to a 22 basis point decrease in loan yields. The net free funds contribution declined seven basis points compared to the third quarter of 2024 due to a reduced rate paid on interest-bearing liabilities. These declines were offset by a 31 basis point decrease in rate paid on interest-bearing liabilities. The 31 basis point decrease in rate paid on interest-bearing liabilities in the fourth quarter of 2024 as compared to the third quarter of 2024 was primarily due to a 33 basis point decline in rate paid on interest-bearing deposits.

For more information regarding net interest income, see Table 4 through Table 8 in this report.

ASSET QUALITY

The allowance for credit losses totaled $437.1 million as of December 31, 2024, relatively unchanged compared to $436.2 million as of September 30, 2024. A provision for credit losses totaling $17.0 million was recorded for the fourth quarter of 2024 as compared to $22.3 million recorded in the third quarter of 2024. The lower provision for credit losses recognized in the fourth quarter of 2024 as compared to the third quarter of 2024 is primarily attributable to the Day 1 provision for credit losses of approximately $15.5 million related to the Macatawa acquisition recognized in the third quarter of 2024. For more information regarding the allowance for credit losses and provision for credit losses, see Table 11 in this report.

Management believes the allowance for credit losses is appropriate to account for expected credit losses. The Company is required to estimate expected credit losses over the life of the Company’s financial assets as of the reporting date. There can be no assurances, however, that future losses will not significantly exceed the amounts provided for, thereby affecting future results of operations. A summary of the allowance for credit losses calculated for the loan components in each portfolio as of December 31, 2024, September 30, 2024, and June 30, 2024 is shown on Table 12 of this report.

Net charge-offs totaled $15.9 million in the fourth quarter of 2024, a decrease of $10.8 million as compared to $26.7 million of net charge-offs in the third quarter of 2024. Net charge-offs as a percentage of average total loans were 13 basis points in the fourth quarter of 2024 on an annualized basis compared to 23 basis points on an annualized basis in the third quarter of 2024. For more information regarding net charge-offs, see Table 10 in this report.

The Company’s delinquency rates remain low and manageable. For more information regarding past due loans, see Table 13 in this report.

Non-performing assets totaled $193.9 million and comprised 0.30% of total assets as of December 31, 2024, as compared to $193.4 million, or 0.30% of total assets, as of September 30, 2024. Non-performing loans totaled $170.8 million and comprised 0.36% of total loans at December 31, 2024, as compared to $179.7 million and 0.38% of total loans at September 30, 2024. The decrease in non-performing loans in the fourth quarter of 2024 was primarily attributable to a decline in commercial real estate nonaccrual loans. For more information regarding non-performing assets, see Table 14 in this report.

NON-INTEREST INCOME

Wealth management revenue increased by $1.6 million in the fourth quarter of 2024 as compared to the third quarter of 2024 primarily due to increased trust and asset management fees from higher assets under management during the period. Approximately $0.6 million of additional wealth management revenue recognized in the fourth quarter of 2024 compared to the third quarter of 2024 relates to one additional month of Macatawa results included in the current quarter. Wealth management revenue is comprised of the trust and asset management revenue of Wintrust Private Trust Company and Great Lakes Advisors, the brokerage commissions, managed money fees and insurance product commissions at Wintrust Investments and fees from tax-deferred like-kind exchange services provided by the Chicago Deferred Exchange Company.

Mortgage banking revenue increased by $4.5 million in the fourth quarter of 2024 as compared to the third quarter of 2024 primarily due to a change in net fair value marks, a $5.5 million impact. Partially offsetting the positive fair value impact was a decrease in operational mortgage banking revenue of $1.0 million in the fourth quarter of 2024 compared to the third quarter of 2024. For more information regarding mortgage banking revenue, see Table 16 in this report.

The Company recognized $18.9 million in service charges on deposits accounts in the fourth quarter of 2024 as compared to $16.4 million in the third quarter of 2024. The $2.4 million increase in the fourth quarter of 2024 was primarily the result of increased commercial account analysis fees.

The Company incurred $2.8 million in net losses on investment securities in the fourth quarter of 2024 as compared to $3.2 million in net gains in the third quarter of 2024. The net losses in the fourth quarter of 2024 were primarily the result of unrealized losses on the Company’s equity investment securities with a readily determinable fair value.

Fees from covered call options increased by $1.3 million in the fourth quarter of 2024 as compared to the third quarter of 2024. The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio. These option transactions are designed to mitigate overall interest rate risk and do not qualify as hedges pursuant to accounting guidance.

Other income decreased by $3.5 million in the fourth quarter of 2024 compared to the third quarter of 2024 due to unfavorable foreign currency remeasurement adjustments of $1.4 million and a variety of other smaller miscellaneous revenue declines.

For more information regarding non-interest income, see Table 15 in this report.

NON-INTEREST EXPENSE

Non-interest expenses totaled $368.5 million in the fourth quarter of 2024, increasing $7.9 million as compared to $360.7 million in the third quarter of 2024. The additional expense is attributable to one additional month of recognized expenses for Macatawa in the fourth quarter of 2024 as compared to the third quarter of 2024. The Macatawa acquisition accounted for approximately $5.7 million of the increase, which included $1.8 million in additional amortization of other acquisition-related intangible assets in the fourth quarter of 2024 as compared to the third quarter of 2024.

Salaries and employee benefits expense increased by $872,000 in the fourth quarter of 2024 as compared to the third quarter of 2024. The $872,000 increase is primarily related to increased salaries expense due to the Macatawa acquisition impacting the fourth quarter of 2024 for three months as compared to two months in the third quarter of 2024 as well as increased employee insurance costs in the current quarter. These increases were partially offset by lower incentive compensation expense in the fourth quarter of 2024.

Software and equipment expense increased $2.7 million in the fourth quarter of 2024 as compared to the third quarter of 2024 primarily due to software expense relating to upgrading and maintenance of information technology and security infrastructure as well as the Macatawa acquisition.

Advertising and marketing expenses in the fourth quarter of 2024 totaled $13.1 million, which is a $5.1 million decrease as compared to the third quarter of 2024 primarily due to a decrease in sports sponsorships. Marketing costs are incurred to promote the Company’s brand, commercial banking capabilities and the Company’s various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the Company’s non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs utilized which are determined based on the market area, targeted audience, competition and various other factors. Generally, these expenses are elevated in the second and third quarters of each year.

Professional fees expense totaled $11.3 million in the fourth quarter of 2024, an increase of $1.6 million as compared to the third quarter of 2024. The increase in the current quarter relates primarily to increased fees on consulting services. Professional fees include legal, audit, and tax fees, external loan review costs, consulting arrangements and normal regulatory exam assessments.

The Company recorded net OREO expense of $397,000 in the fourth quarter of 2024, compared to net OREO income of $938,000 in the third quarter of 2024. The net OREO income in the third quarter of 2024 was primarily the result of realized gains on sales of OREO. Net OREO expenses also include all costs associated with obtaining, maintaining and selling other real estate owned properties as well as valuation adjustments.

For more information regarding non-interest expense, see Table 17 in this report.

INCOME TAXES

The Company recorded income tax expense of $67.7 million in the fourth quarter compared to $62.7 million in the third quarter of 2024. The effective tax rates were 26.76% in the fourth quarter of 2024 compared to 26.95% in the third quarter of 2024.

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking unit, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the fourth quarter of 2024, the community banking unit increased its commercial, commercial real estate and residential real estate loan portfolios.

Mortgage banking revenue was $20.5 million for the fourth quarter of 2024, an increase of $4.5 million as compared to the third quarter of 2024, primarily due to a change in net fair value marks, a $5.5 million impact. Partially offsetting the positive fair value impact was a decrease in operational mortgage banking revenue of $1.0 million in the fourth quarter of 2024 compared to the third quarter of 2024. See Table 16 for more detail. Service charges on deposit accounts totaled $18.9 million in the fourth quarter of 2024 as compared to $16.4 million in the third quarter of 2024. The Company’s gross commercial and commercial real estate loan pipelines remained solid as of December 31, 2024 indicating momentum for expected continued loan growth in the first quarter of 2025.

Specialty Finance

Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries, accounts receivable financing and value-added, out-sourced administrative services and other services. Originations within the insurance premium financing receivables portfolios were $5.1 billion during the fourth quarter of 2024. Average balances increased by $11.6 million, as compared to the third quarter of 2024. The Company’s leasing portfolio balance increased in the fourth quarter of 2024, with its portfolio of assets, including capital leases, loans and equipment on operating leases, totaling $3.9 billion as of December 31, 2024 as compared to $3.7 billion as of September 30, 2024. Revenues from the Company’s out-sourced administrative services business were $1.3 million in the fourth quarter of 2024, which was relatively stable compared to the third quarter of 2024.

Wealth Management

Through four separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, tax-deferred like-kind exchange services, asset management, and securities brokerage services. See “Items Impacting Comparative Results,” regarding the sale of the Company’s Retirement Benefits Advisors (“RBA”) division during the first quarter of 2024. Wealth management revenue totaled $38.8 million in the fourth quarter of 2024, up slightly as compared to the third quarter of 2024. At December 31, 2024, the Company’s wealth management subsidiaries had approximately $51.2 billion of assets under administration, which included $8.5 billion of assets owned by the Company and its subsidiary banks.

ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS

Business Combination

On August 1, 2024, the Company completed its previously announced acquisition of Macatawa, the parent company of Macatawa Bank. In conjunction with the completed acquisition, the Company issued approximately 4.7 million shares of common stock. Macatawa operates 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties in the state of Michigan. Macatawa offers a full range of banking, retail and commercial lending, wealth management and ecommerce services to individuals, businesses and governmental entities. As of August 1, 2024, Macatawa had carrying values of approximately $2.7 billion in assets, $2.3 billion in deposits and $1.4 billion in loans. As of December 31, 2024, the Company recorded preliminary goodwill of approximately $142.1 million on the purchase. The initial purchase accounting for the acquisition, in accordance with GAAP, for this business combination is not finalized and is therefore subject to change.

Division Sale

In the first quarter of 2024, the Company sold its RBA division and recorded a gain of approximately $20.0 million in other non-interest income from the sale.

Business Combination

On April 3, 2023, the Company completed its acquisition of Rothschild & Co Asset Management US Inc. and Rothschild & Co Risk Based Investments LLC from Rothschild & Co North America Inc. As the transaction was determined to be a business combination, the Company recorded goodwill of approximately $2.6 million on the purchase.

WINTRUST FINANCIAL CORPORATION
Key Operating Measures

Wintrust’s key operating measures and growth rates for the fourth quarter of 2024, as compared to the third quarter of 2024 (sequential quarter) and fourth quarter of 2023 (linked quarter), are shown in the table below:

_{(1)   Period-end balance sheet percentage changes are annualized.
(2)   See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(3)   Net revenue is net interest income plus non-interest income.
(4)   The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency.
(5)   Excludes mortgage loans held-for-sale.}

Certain returns, yields, performance ratios, or quarterly growth rates are “annualized” in this presentation to represent an annual time period. This is done for analytical purposes to better discern, for decision-making purposes, underlying performance trends when compared to full-year or year-over-year amounts. For example, a 5% growth rate for a quarter would represent an annualized 20% growth rate. Additional supplemental financial information showing quarterly trends can be found on the Company’s website at www.wintrust.com by choosing “Financial Reports” under the “Investor Relations” heading, and then choosing “Financial Highlights.”

WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights

_{(1)   Excludes mortgage loans held-for-sale.
(2)   Net revenue is net interest income plus non-interest income.
(3)   See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(4)   The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s average total assets. A lower ratio indicates a higher degree of efficiency.
(5)   Capital ratios for current quarter-end are estimated.
(6)   The allowance for credit losses includes the allowance for loan losses, the allowance for unfunded lending-related commitments and the allowance for held-to-maturity securities losses.}

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES

_{(1)   Annualized.}

TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

_{(1)   Annualized.
(2)   Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wintrust Investments, Chicago Deferred Exchange Company, LLC (“CDEC”), and trust and asset management customers of the Company.}

TABLE 3: TIME CERTIFICATES OF DEPOSIT MATURITY/RE-PRICING ANALYSIS
As of December 31, 2024

TABLE 4: QUARTERLY AVERAGE BALANCES

_{(1)   Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2)   Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3)   See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(4)   Other earning assets include brokerage customer receivables and trading account securities.
(5)   Loans, net of unearned income, include non-accrual loans.
(6)   Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.}

TABLE 5: QUARTERLY NET INTEREST INCOME

_{(1)   Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(2)   See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.}

TABLE 6: QUARTERLY NET INTEREST MARGIN

_{(1)   Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(2)   See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(3)   Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.}

TABLE 7: YEAR-TO-DATE AVERAGE BALANCES, AND NET INTEREST INCOME AND MARGIN

_{(1)   Includes interest-bearing deposits from banks and securities purchased under resale agreements with original maturities of greater than three months. Cash equivalents include federal funds sold and securities purchased under resale agreements with original maturities of three months or less.
(2)   Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3)   Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(4)   See Table 18: Supplemental Non-GAAP Financial Measures/Ratios for additional information on this performance measure/ratio.
(5)   Other earning assets include brokerage customer receivables and trading account securities.
(6)   Loans, net of unearned income, include non-accrual loans.
(7)   Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(8)   Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.}

TABLE 8: INTEREST RATE SENSITIVITY

As an ongoing part of its financial strategy, the Company attempts to manage the impact of fluctuations in market interest rates on net interest income. Management measures its exposure to changes in interest rates by modeling many different interest rate scenarios.

The following interest rate scenarios display the percentage change in net interest income over a one-year time horizon assuming increases and decreases of 100 and 200 basis points as compared to projected net interest income in a scenario with no assumed rate changes. The Static Shock Scenario results incorporate actual cash flows and repricing characteristics for balance sheet instruments following an instantaneous, parallel change in market rates based upon a static (i.e. no growth or constant) balance sheet. Conversely, the Ramp Scenario results incorporate management’s projections of future volume and pricing of each of the product lines following a gradual, parallel change in market rates over twelve months. Actual results may differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies. The interest rate sensitivity for both the Static Shock and Ramp Scenario is as follows:

 

As shown above, the magnitude of potential changes in net interest income in various interest rate scenarios has continued to remain relatively neutral. As the current interest rate cycle progressed, management took action to reposition its sensitivity to interest rates. To this end, management has executed various derivative instruments including collars and receive fixed swaps to hedge variable rate loan exposures and originated a higher percentage of its loan originations in longer term fixed rate loans. The Company will continue to monitor current and projected interest rates and may execute additional derivatives to mitigate potential fluctuations in the net interest margin in future periods.

TABLE 9: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

_{(1)   Excludes cash flow hedges with future effective starting dates.
(2)   SOFR - Secured Overnight Financing Rate.
(3)   CMT - Constant Maturity Treasury Rate.}

Graph available at the following link: http://ml.globenewswire.com/Resource/Download/4c8a617f-4b3c-41ee-9940-f8da8b036110

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to SOFR and CMT indices which, as shown in the table above, do not mirror the same changes as the Prime rate which has historically moved when the Federal Reserve raises or lowers interest rates. Specifically, the Company has variable rate loans of $14.9 billion tied to one-month SOFR and $6.4 billion tied to twelve-month CMT. The above chart shows:

TABLE 10: ALLOWANCE FOR CREDIT LOSSES

TABLE 11: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

TABLE 12: ALLOWANCE BY LOAN PORTFOLIO

The table below summarizes the calculation of allowance for loan losses and allowance for unfunded lending-related commitments losses for the Company’s loan portfolios as well as core and niche portfolios, as of December 31, 2024, September 30, 2024 and June 30, 2024.

_{(1)   See Table 1 for additional detail on core and niche loans.}

TABLE 13: LOAN PORTFOLIO AGING

_{(1)   Early buy-out loans are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.}

TABLE 14: NON-PERFORMING ASSETS⁽¹⁾

_{(1)   Excludes early buy-out loans guaranteed by U.S. government agencies. Early buy-out loans are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.}

Non-performing Loans Rollforward, excluding early buy-out loans guaranteed by U.S. government agencies

Other Real Estate Owned

TABLE 15: NON-INTEREST INCOME

 

_{NM - Not meaningful.
BOLI - Bank-owned life insurance.}

TABLE 16: MORTGAGE BANKING

_{(1)   Production revenue represents revenue earned from the origination and subsequent sale of mortgages, including gains on loans sold and fees from originations, changes in other related financial instruments carried at fair value, processing and other related activities, and excludes servicing fees, changes in the fair value of servicing rights and changes to the mortgage recourse obligation and other non-production revenue.
(2)   Certain volume adjusted for the estimated pull-through rate of the loan, which represents the Company’s best estimate of the likelihood that a committed loan will ultimately fund.}

_{(1)   Production revenue represents revenue earned from the origination and subsequent sale of mortgages, including gains on loans sold and fees from originations, changes in other related financial instruments carried at fair value, processing and other related activities, and excludes servicing fees, changes in the fair value of servicing rights and changes to the mortgage recourse obligation and other non-production revenue.
(2)   Certain volume adjusted for the estimated pull-through rate of the loan, which represents the Company’s best estimate of the likelihood that a committed loan will ultimately fund.}

TABLE 17: NON-INTEREST EXPENSE

 

_{NM - Not meaningful.}

TABLE 18: SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES/RATIOS

The accounting and reporting policies of Wintrust conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company’s performance. These include taxable-equivalent net interest income (including its individual components), taxable-equivalent net interest margin (including its individual components), the taxable-equivalent efficiency ratio, tangible common equity ratio, tangible book value per common share, return on average tangible common equity, and pre-tax income, excluding provision for credit losses. Management believes that these measures and ratios provide users of the Company’s financial information a more meaningful view of the performance of the Company’s interest-earning assets and interest-bearing liabilities and of the Company’s operating efficiency. Other financial holding companies may define or calculate these measures and ratios differently.

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax rates effective as of the end of the period. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a fully taxable-equivalent basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses), measures how much it costs to produce one dollar of revenue. Securities gains or losses are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity ratio and tangible book value per common share as useful measurements of the Company’s equity. The Company references the return on average tangible common equity as a measurement of profitability. Management considers pre-tax income, excluding provision for credit losses, as a useful measurement of the Company’s core net income.

 

 

WINTRUST SUBSIDIARIES AND LOCATIONS

Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select Market (Nasdaq: WTFC). Its 16 community bank subsidiaries are: Lake Forest Bank & Trust Company, N.A., Hinsdale Bank & Trust Company, N.A., Wintrust Bank, N.A., in Chicago, Libertyville Bank & Trust Company, N.A., Barrington Bank & Trust Company, N.A., Crystal Lake Bank & Trust Company, N.A., Northbrook Bank & Trust Company, N.A., Schaumburg Bank & Trust Company, N.A., Village Bank & Trust, N.A., in Arlington Heights, Beverly Bank & Trust Company, N.A. in Chicago, Wheaton Bank & Trust Company, N.A., State Bank of The Lakes, N.A., in Antioch, Old Plank Trail Community Bank, N.A., in New Lenox, St. Charles Bank & Trust Company, N.A., Town Bank, N.A., in Hartland, Wisconsin and Macatawa Bank, N.A., in Holland, Michigan.

In addition to the locations noted above, the banks also operate facilities in Illinois in Addison, Algonquin, Aurora, Bloomingdale, Bolingbrook, Buffalo Grove, Burbank, Cary, Clarendon Hills, Countryside, Crete, Darien, Deerfield, Des Plaines, Downers Grove, Elgin, Elk Grove Village, Elmhurst, Evanston, Evergreen Park, Frankfort, Geneva, Glen Ellyn, Glencoe, Glenview, Grayslake, Gurnee, Hanover Park, Hawthorn Woods, Highland Park, Highwood, Hoffman Estates, Homer Glen, Itasca, Joliet, Lake Bluff, Lake Villa, Lansing, Lemont, Lindenhurst, Lombard, Lynwood, Machesney Park, Markham, Maywood, McHenry, Mokena, Mount Prospect, Mundelein, Naperville, Norridge, Northfield, Oak Lawn, Oak Park, Orland Park, Palatine, Park Ridge, Prospect Heights, Riverside, Rockford, Rolling Meadows, Round Lake Beach, Shorewood, Skokie, Spring Grove, Steger, Stone Park, Vernon Hills, Wauconda, Waukegan, Western Springs, Wheeling, Willowbrook, Wilmette, Winnetka and Wood Dale, and in Wisconsin in Burlington, Clinton, Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva, Madison, Menomonee Falls, Mequon, Milwaukee, Pewaukee, Racine, Wales, Walworth, Whitefish Bay and Wind Lake, and in Michigan in Allendale, Byron Center, Douglas, Grand Haven, Grand Rapids, Grandville, Hamilton, Hudsonville, Jenison, Rockford, Walker, Wyoming, and Zeeland, and in Florida in Bonita Spring, Cape Coral, and Naples, and in Indiana in Crown Point and Dyer.

Additionally, the Company operates various non-bank business units:

• FIRST Insurance Funding and Wintrust Life Finance, each a division of Lake Forest Bank & Trust Company, N.A., serve commercial and life insurance loan customers, respectively, throughout the United States.

• First Insurance Funding of Canada serves commercial insurance loan customers throughout Canada.

• Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States.

• Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices.

• Wintrust Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest.

• Great Lakes Advisors LLC provides money management services and advisory services to individual accounts.

• Wintrust Private Trust Company, N.A., a trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location.

• Wintrust Asset Finance offers direct leasing opportunities.

• CDEC provides Qualified Intermediary services (as defined by U.S. Treasury regulations) for taxpayers seeking to structure tax-deferred like-kind exchanges under Internal Revenue Code Section 1031.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “will,” “may,” “should,” “would” and “could.” Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, and which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of the Company’s 2023 Annual Report on Form 10-K and in any of the Company’s subsequent SEC filings. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things, statements relating to the Company’s future financial performance, the performance of its loan portfolio, the expected amount of future credit reserves and charge-offs, delinquency trends, growth plans, regulatory developments, securities that the Company may offer from time to time, plans to form additional de novo banks or branch offices, and management’s long-term performance goals, as well as statements relating to the anticipated effects on the Company’s financial condition and results of operations from expected developments or events, the Company’s business and growth strategies, including future acquisitions of banks, specialty finance or wealth management businesses, internal growth and plans to form additional de novo banks or branch offices. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:

• economic conditions and events that affect the economy, housing prices, the job market and other factors that may adversely affect the Company’s liquidity and the performance of its loan portfolios, including an actual or threatened U.S. government debt default or rating downgrade, particularly in the markets in which it operates;

• negative effects suffered by us or our customers resulting from changes in U.S. trade policies;

• the extent of defaults and losses on the Company’s loan portfolio, which may require further increases in its allowance for credit losses;

• estimates of fair value of certain of the Company’s assets and liabilities, which could change in value significantly from period to period;

• the financial success and economic viability of the borrowers of our commercial loans;

• commercial real estate market conditions in the Chicago metropolitan area and southern Wisconsin;

• the extent of commercial and consumer delinquencies and declines in real estate values, which may require further increases in the Company’s allowance for credit losses;

• inaccurate assumptions in our analytical and forecasting models used to manage our loan portfolio;

• changes in the level and volatility of interest rates, the capital markets and other market indices that may affect, among other things, the Company’s liquidity and the value of its assets and liabilities;

• the interest rate environment, including a prolonged period of low interest rates or rising interest rates, either broadly or for some types of instruments, which may affect the Company’s net interest income and net interest margin, and which could materially adversely affect the Company’s profitability;

• competitive pressures in the financial services business which may affect the pricing of the Company’s loan and deposit products as well as its services (including wealth management services), which may result in loss of market share and reduced income from deposits, loans, advisory fees and income from other products;

• failure to identify and complete favorable acquisitions in the future or unexpected losses, difficulties or developments related to the Company’s recent or future acquisitions;

• unexpected difficulties and losses related to FDIC-assisted acquisitions;

• harm to the Company’s reputation;

• any negative perception of the Company’s financial strength;

• ability of the Company to raise additional capital on acceptable terms when needed;

• disruption in capital markets, which may lower fair values for the Company’s investment portfolio;

• ability of the Company to use technology to provide products and services that will satisfy customer demands and create efficiencies in operations and to manage risks associated therewith;

• failure or breaches of our security systems or infrastructure, or those of third parties;

• security breaches, including denial of service attacks, hacking, social engineering attacks, malware intrusion and similar events or data corruption attempts and identity theft;

• adverse effects on our information technology systems, or those of third parties, resulting from failures, human error or cyberattacks (including ransomware);

• adverse effects of failures by our vendors to provide agreed upon services in the manner and at the cost agreed, particularly our information technology vendors;

• increased costs as a result of protecting our customers from the impact of stolen debit card information;

• accuracy and completeness of information the Company receives about customers and counterparties to make credit decisions;

• ability of the Company to attract and retain senior management experienced in the banking and financial services industries;

• environmental liability risk associated with lending activities;

• the impact of any claims or legal actions to which the Company is subject, including any effect on our reputation;

• losses incurred in connection with repurchases and indemnification payments related to mortgages and increases in reserves associated therewith;

• the loss of customers as a result of technological changes allowing consumers to complete their financial transactions without the use of a bank;

• the soundness of other financial institutions and the impact of recent failures of financial institutions, including broader financial institution liquidity risk and concerns;

• the expenses and delayed returns inherent in opening new branches and de novo banks;

• liabilities, potential customer loss or reputational harm related to closings of existing branches;

• examinations and challenges by tax authorities, and any unanticipated impact of the Tax Act;

• changes in accounting standards, rules and interpretations, and the impact on the Company’s financial statements;

• the ability of the Company to receive dividends from its subsidiaries;

• the impact of the Company’s transition from LIBOR to an alternative benchmark rate for current and future transactions;

• a decrease in the Company’s capital ratios, including as a result of declines in the value of its loan portfolios, or otherwise;

• legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies;

• changes in laws, regulations, rules, standards and contractual obligations regarding data privacy and cybersecurity;

• a lowering of our credit rating;

• changes in U.S. monetary policy and changes to the Federal Reserve’s balance sheet, including changes in response to persistent inflation or otherwise;

• regulatory restrictions upon our ability to market our products to consumers and limitations on our ability to profitably operate our mortgage business;

• increased costs of compliance, heightened regulatory capital requirements and other risks associated with changes in regulation and the regulatory environment;

• the impact of heightened capital requirements;

• increases in the Company’s FDIC insurance premiums, or the collection of special assessments by the FDIC;

• delinquencies or fraud with respect to the Company’s premium finance business;

• credit downgrades among commercial and life insurance providers that could negatively affect the value of collateral securing the Company’s premium finance loans;

• the Company’s ability to comply with covenants under its credit facility;

• fluctuations in the stock market, which may have an adverse impact on the Company’s wealth management business and brokerage operation; and

• widespread outages of operational, communication, or other systems, whether internal or provided by third parties, natural or other disasters (including acts of terrorism, armed hostilities and pandemics), and the effects of climate change.

Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by the Company. Any such statement speaks only as of the date the statement was made or as of such date that may be referenced within the statement. The Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events after the date of the press release. Persons are advised, however, to consult further disclosures management makes on related subjects in its reports filed with the Securities and Exchange Commission and in its press releases.

CONFERENCE CALL, WEBCAST AND REPLAY

The Company will hold a conference call on Wednesday, January 22, 2025 at 9:00 a.m. (CST) regarding fourth quarter and full year 2024 earnings results. Individuals interested in participating in the call by addressing questions to management should register for the call to receive the dial-in numbers and unique PIN at the Conference Call Link included within the Company’s press release dated January 2, 2025 available at the Investor Relations, Investor News and Events, Press Releases link on its website at https://www.wintrust.com. A separate simultaneous audio-only webcast link is included within the press release referenced above. Registration for and a replay of the audio-only webcast with an accompanying slide presentation will be available at https://www.wintrust.com, Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the fourth quarter and full year 2024 earnings press release will also be available on the home page of the Company’s website at https://www.wintrust.com and at the Investor Relations, Investor News and Events, Press Releases link on its website.

FOR MORE INFORMATION CONTACT:
Timothy S. Crane, President & Chief Executive Officer
David A. Dykstra, Vice Chairman & Chief Operating Officer
(847) 939-9000
Web site address: www.wintrust.com