Wintrust Financial Corporation

17/07/2024 | Press release | Distributed by Public on 17/07/2024 21:25

Wintrust Financial Corporation Reports Record Year to Date Net Income

ROSEMONT, Ill., July 17, 2024 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation ("Wintrust", "the Company", "we" or "our") (Nasdaq: WTFC) announced record net income of $339.7 million or $5.21 per diluted common share for the first six months of 2024 compared to net income of $334.9 million or $5.18 per diluted common share for the same period of 2023. Pre-tax, pre-provision income (non-GAAP) for the first six months of 2024 totaled a record $523.0 million, compared to $506.5 million in the first six months of 2023.

The Company recorded quarterly net income of $152.4 million or $2.32 per diluted common share for the second quarter of 2024 compared to net income of $187.3 million or $2.89 per diluted common share for the first quarter of 2024. Pre-tax, pre-provision income (non-GAAP) totaled $251.4 million as compared to $271.6 million for the first quarter of 2024, with the majority of the decrease attributable to the net gain of $19.3 million on the sale of the Company's Retirement Benefit Advisors ("RBA") division in the first quarter of 2024.

Timothy S. Crane, President and Chief Executive Officer, commented, "We are pleased with our record net income for the first half of 2024 and record quarterly net interest income. Robust loan and deposit growth coupled with a stabilizing margin drove our strong second quarter results. Pre-tax, pre-provision income (non-GAAP) also set the Company's record for the first half of 2024 and we believe we are well-positioned for strong financial performance as we continue our momentum into the second half of the year."

Additionally, Mr. Crane noted, "Net interest margin in the second quarter was within our expected range, decreasing seven basis points as compared to the first quarter of 2024. We expect the combination of a stable net interest margin and balance sheet growth to result in continued net interest income growth over the next few quarters. Focusing on growth of net interest income, disciplined expense control and maintaining our consistent credit standards should lead to increasing our long-term franchise value."

Highlights of the second quarter of 2024:
Comparative information to the first quarter of 2024, unless otherwise noted

  • Total loans increased by approximately $1.4 billion, or 13% annualized. Adjusting for the impact of a loan sale transaction of property and casualty insurance premium finance receivables during the second quarter of 2024, total loans would have increased $2.1 billion, or 20% annualized.
  • Total deposits increased by approximately $1.6 billion, or 14% annualized.
  • Total assets increased by $2.2 billion, or 15% annualized.
  • Net interest margin decreased by seven basis points to 3.50% (3.52% on a fully taxable-equivalent basis, non-GAAP) during the second quarter of 2024.
    • Net interest income increased to $470.6 million in the second quarter of 2024 compared to $464.2 million in the first quarter of 2024, primarily due to average earning asset growth.
  • Non-interest income was impacted by the following:
    • Net losses on investment securities totaled $4.3 million in the second quarter of 2024 related to changes in the value of equity securities as compared to net gains of $1.3 million in the first quarter of 2024.
    • Favorable net valuation adjustments related to certain mortgage assets totaled $1.4 million in the second quarter of 2024 compared to favorable net valuation adjustments of $2.4 million in the first quarter of 2024.
  • Non-interest expense was impacted by the following:
    • Occupancy expenses of $1.9 million in the second quarter of 2024 related to an unrealized loss associated with the anticipated sale of a branch facility.
    • Approximately $532,000 of professional fees related to the pending acquisition of Macatawa Bank Corporation in the second quarter of 2024 as compared to approximately $392,000 recorded in the first quarter of 2024.
  • Provision for credit losses totaled $40.1 million in the second quarter of 2024 as compared to a provision for credit losses of $21.7 million in the first quarter of 2024.

Mr. Crane noted, "Net loan growth during the second quarter totaled $1.4 billion, or 13% on an annualized basis. We are pleased with our diversified loan growth across all major loan types. We were able to achieve this growth net of our election to sell property and casualty insurance premium finance receivables that reduced total outstanding loans at the end of the second quarter by approximately $698 million. Deposit growth in the second quarter of 2024 was utilized to fund our robust loan growth as deposits increased by approximately $1.6 billion, or 14% on an annualized basis. Non-interest bearing deposits remained 21% of total deposits at the end of the second quarter of 2024 and increased $123.3 million compared to the first quarter of 2024. We continue to leverage our customer relationships and market positioning to generate deposits, grow loans and build long term franchise value. Despite the slightly lower net interest margin during the current period, we generated record quarterly net interest income as we continued to grow earning assets."

Commenting on credit quality, Mr. Crane stated, "As anticipated, we are observing some gradual normalization in our credit metrics. Net charge-offs totaled $30.0 million, or 28 basis points of average total loans on an annualized basis, in the second quarter of 2024 and were spread primarily across the commercial, commercial real estate and property and casualty premium finance receivables portfolios. This compared to net charge-offs totaling $21.8 million, or 21 basis points of average total loans on an annualized basis, in the first quarter of 2024. Non-performing loans totaled $174.3 million, or 0.39% of total loans, at the end of the second quarter of 2024 compared to $148.4 million, or 0.34% of total loans, at the end of the first quarter of 2024. Levels of loans classified as special mention and substandard remained consistent with levels reported at the end of the first quarter of 2024. We continue to be conservative and proactive in reviewing credit and maintaining our consistently strong credit standards. The allowance for credit losses on our core loan portfolio as of June 30, 2024 was approximately 1.52% of the outstanding balance, an increase of one basis point compared to March 31, 2024 (see Table 11 for additional information). We believe that the Company's reserves remain appropriate and we remain diligent in our review of credit."

In summary, Mr. Crane noted, "We are very pleased with our record start to the year. Momentum continues as our substantial loan growth in the second quarter creates positive revenue momentum moving forward as period-end loan balances exceeded averages. Regulatory approval of our previously announced acquisition of Macatawa Bank Corporation in Michigan was received June 17, 2024. Completion of the acquisition remains subject to approval by Macatawa's shareholders at a meeting to be held on July 31, 2024, as well as the satisfaction of the other customary closing conditions set forth in the merger agreement. We remain excited for the opportunity to expand into Michigan with Macatawa's committed management team and reputable bank exhibiting excess liquidity, pristine asset quality and low-cost core deposits."

The graphs below illustrate certain financial highlights of the second 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/49b05914-dbe5-4a50-923d-ed93ccdfb379

SUMMARY OF RESULTS:

BALANCE SHEET

Total assets increased $2.2 billion in the second quarter of 2024 as compared to the first quarter of 2024. Total loans increased by $1.4 billion as compared to the first quarter of 2024. The increase in loans was diversified across nearly all loan portfolios. Adjusting for the impact of a loan sale transaction of property and casualty insurance premium finance receivables during the second quarter of 2024, total loans would have increased $2.1 billion, or 20% annualized.

Total liabilities increased by $2.1 billion in the second quarter of 2024 as compared to the first quarter of 2024 primarily due to a $1.6 billion increase in total deposits. Non-interest bearing deposits as a percentage of total deposits was 21% at both June 30, 2024 and March 31, 2024. The Company's loans to deposits ratio ended the quarter at 93.0%.

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 second quarter of 2024, net interest income totaled $470.6 million, an increase of $6.4 million as compared to the first quarter of 2024. The $6.4 million increase in net interest income in the second quarter of 2024 compared to the first quarter of 2024 was primarily due to a $1.9 billion increase in average earning assets partially offset by a seven basis point decrease in the net interest margin.

Net interest margin was 3.50% (3.52% on a fully taxable-equivalent basis, non-GAAP) during the second quarter of 2024 compared to 3.57% (3.59% on a fully taxable-equivalent basis, non-GAAP) during the first quarter of 2024. The net interest margin decrease as compared to the first quarter of 2024 was primarily due to a 21 basis point increase in the rate paid on interest-bearing liabilities. This decrease was partially offset by a 12 basis point increase in yield on earning assets and a two basis point increase in the net free funds contribution. The 21 basis point increase on the rate paid on interest-bearing liabilities in the second quarter of 2024 as compared to the first quarter of 2024 was primarily due to a 25 basis point increase in the rate paid on interest-bearing deposits. The 12 basis point increase in the yield on earning assets in the second quarter of 2024 as compared to the first quarter of 2024 was primarily due to a 10 basis point expansion on loan yields and 11 basis point increase in yield on liquidity management assets.

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

ASSET QUALITY

The allowance for credit losses totaled $437.6 million as of June 30, 2024, an increase of $10.1 million compared to $427.5 million as of March 31, 2024. A provision for credit losses totaling $40.1 million was recorded for the second quarter of 2024 as compared to $21.7 million recorded in the first 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 Current Expected Credit Losses accounting standard requires the Company 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 June 30, 2024, March 31, 2024, and December 31, 2023 is shown on Table 12 of this report.

Net charge-offs totaled $30.0 million in the second quarter of 2024, as compared to $21.8 million of net charge-offs in the first quarter of 2024. Net charge-offs as a percentage of average total loans were 28 basis points in the second quarter of 2024 on an annualized basis compared to 21 basis points on an annualized basis in the first 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 $194.0 million and comprised 0.32% of total assets as of June 30, 2024, as compared to $162.9 million, or 0.28% of total assets, as of March 31, 2024. Non-performing loans totaled $174.3 million and comprised 0.39% of total loans at June 30, 2024, as compared to $148.4 million and 0.34% of total loans at March 31, 2024. The increase in the second quarter of 2024 was primarily due to an increase in certain credits within the commercial and commercial real estate portfolios becoming nonaccrual. For more information regarding non-performing assets, see Table 14 in this report.

Though these credit metrics increased during the period, net charge-offs as a percentage of average total loans and non-performing loans as a percentage of total loans remained at relatively low levels in the second quarter of 2024.

NON-INTEREST INCOME

Wealth management revenue was relatively stable in the second quarter of 2024 as compared to the first quarter of 2024. Wealth management revenue is comprised of the trust and asset management revenue of The Chicago 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 $1.5 million in the second quarter of 2024 as compared to the first quarter of 2024 primarily due to $1.6 million higher production revenue from increased mortgage production as well as a favorable adjustment to the Company's held-for-sale portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $642,000 in the second quarter of 2024 compared to a $2.2 million unfavorable adjustment in the first quarter of 2024. This was partially offset by a $105,000 favorable valuation adjustment to the fair value of mortgage servicing rights, net of servicing hedge, in the second quarter of 2024 compared to a $5.0 million favorable adjustment in the first quarter of 2024. The Company monitors the relationship of these assets and seeks to minimize the earnings impact of fair value changes. For more information regarding mortgage banking revenue, see Table 16 in this report.

The Company recognized $4.3 million in net losses on investment securities in the second quarter of 2024 as compared to $1.3 million in net gains in the first quarter of 2024. The change from period to period was primarily the result of higher losses on the Company's equity investment securities in the second quarter of 2024.

Fees from covered call options decreased by $2.8 million in the second quarter of 2024 as compared to the first 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 $13.0 million in the second quarter of 2024 compared to the first quarter of 2024 primarily due to a $20.0 million gain related to the sale of the RBA division within the wealth management business recognized in the first quarter of 2024. This was partially offset by a favorable adjustment to the Company's held-for-investment portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $1.0 million when compared to the first quarter of 2024, as well as less unfavorable foreign currency remeasurement adjustments when compared to the first quarter of 2024 and realized gains from the sale of certain loans during the second quarter of 2024.

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

NON-INTEREST EXPENSE

Salaries and employee benefits expense increased by $3.4 million in the second quarter of 2024 as compared to the first quarter of 2024. The $3.4 million increase is primarily related to higher incentive compensation expense due to elevated commissions from increased mortgage production as well as higher salaries due to a full quarter of the Company's annual merit increase.

Advertising and marketing expenses in the second quarter of 2024 totaled $17.4 million, which is a $4.4 million increase as compared to the first quarter of 2024, primarily due to an increase in seasonal sports sponsorship costs. 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.

FDIC insurance, including amounts accrued for estimated special assessments, decreased $4.1 million in the second quarter of 2024 as compared to the first quarter of 2024. This was primarily the result of a $5.2 million accrual recognized in the first quarter of 2024 for estimated amounts owed as a result of the FDIC special assessment on uninsured deposits in response to certain bank failures occurring in 2023. The Company recognized no such special assessment in the second quarter of 2024.

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

INCOME TAXES

The Company recorded income tax expense of $59.0 million in the second quarter of 2024 compared to $62.7 million in the first quarter of 2024. The effective tax rates were 27.90% in the second quarter of 2024 compared to 25.07% in the first quarter of 2024. The effective tax rates were partially impacted by the tax effects related to share-based compensation which fluctuate based on the Company's stock price and timing of employee stock option exercises and vesting of other share-based awards. The Company recorded net excess tax benefits of $16,000 in the second quarter of 2024, compared to net excess tax benefits of $4.4 million in the first quarter of 2024 related to share-based compensation.

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 second quarter of 2024, the community banking unit expanded its commercial, commercial real estate and residential real estate loan portfolios.

Mortgage banking revenue was $29.1 million for the second quarter of 2024, an increase of $1.5 million as compared to the first quarter of 2024, primarily due to $1.6 million higher production revenue from increased mortgage production as well as a favorable adjustment to the Company's held-for-sale portfolio of early buy-out exercised loans guaranteed by U.S. government agencies, which are held at fair value, of $642,000 in the second quarter of 2024 compared to a $2.2 million unfavorable adjustment in the first quarter of 2024. This was partially offset by a $105,000 favorable valuation adjustment to the fair value of mortgage servicing rights, net of servicing hedge, in the second quarter of 2024 compared to a $5.0 million favorable adjustment in the first quarter of 2024. Service charges on deposit accounts totaled $15.5 million in the second quarter of 2024, which was relatively stable compared to the first quarter of 2024. The Company's gross commercial and commercial real estate loan pipelines remained solid as of June 30, 2024 indicating momentum for expected continued loan growth in the third quarter of 2024.

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 $5.5 billion during the second quarter of 2024. Average balances increased by $392.2 million, net of a loan sale transaction of property and casualty insurance premium finance receivables during the second quarter of 2024, as compared to the first quarter of 2024. The Company's leasing portfolio balance increased in the second quarter of 2024, with its portfolio of assets, including capital leases, loans and equipment on operating leases, totaling $3.7 billion as of June 30, 2024 as compared to $3.6 billion as of March 31, 2024. Revenues from the Company's out-sourced administrative services business were $1.3 million in the second quarter of 2024, which was relatively stable compared to the first 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 RBA division during the first quarter of 2024. Wealth management revenue totaled $35.4 million in the second quarter of 2024, relatively stable as compared to the first quarter of 2024. At June 30, 2024, the Company's wealth management subsidiaries had approximately $48.2 billion of assets under administration, which included $8.8 billion of assets owned by the Company and its subsidiary banks.

ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS

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 second quarter of 2024, as compared to the first quarter of 2024 (sequential quarter) and second quarter of 2023 (linked quarter), are shown in the table below:

% or (1)
basis point (bp) change from
1st Quarter
2024 		% or
basis point (bp) change from
2nd Quarter
2023
Three Months Ended
(Dollars in thousands, except per share data) Jun 30, 2024 Mar 31, 2024 Jun 30, 2023
Net income $ 152,388 $ 187,294 $ 154,750 (19 ) % (2 ) %
Pre-tax income, excluding provision for credit losses (non-GAAP) (2) 251,404 271,629 239,944 (7 ) 5
Net income per common share - Diluted 2.32 2.89 2.38 (20 ) (3 )
Cash dividends declared per common share 0.45 0.45 0.40 - 13
Net revenue (3) 591,757 604,774 560,567 (2 ) 6
Net interest income 470,610 464,194 447,537 1 5
Net interest margin 3.50 % 3.57 % 3.64 % (7 ) bps (14 ) bps
Net interest margin - fully taxable-equivalent (non-GAAP) (2) 3.52 3.59 3.66 (7 ) (14 )
Net overhead ratio (4) 1.53 1.39 1.58 14 (5 )
Return on average assets 1.07 1.35 1.18 (28 ) (11 )
Return on average common equity 11.61 14.42 12.79 (281 ) (118 )
Return on average tangible common equity (non-GAAP) (2) 13.49 16.75 15.12 (326 ) (163 )
At end of period
Total assets $ 59,781,516 $ 57,576,933 $ 54,286,176 15 % 10 %
Total loans (5) 44,675,531 43,230,706 41,023,408 13 9
Total deposits 48,049,026 46,448,858 44,038,707 14 9
Total shareholders' equity 5,536,628 5,436,400 5,041,912 7 10

(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

Three Months Ended Six Months Ended
(Dollars in thousands, except per share data) Jun 30,
2024 		Mar 31,
2024 		Dec 31,
2023 		Sep 30,
2023 		Jun 30,
2023 		Jun 30,
2024 		Jun 30,
2023
Selected Financial Condition Data (at end of period):
Total assets $ 59,781,516 $ 57,576,933 $ 56,259,934 $ 55,555,246 $ 54,286,176
Total loans (1) 44,675,531 43,230,706 42,131,831 41,446,032 41,023,408
Total deposits 48,049,026 46,448,858 45,397,170 44,992,686 44,038,707
Total shareholders' equity 5,536,628 5,436,400 5,399,526 5,015,613 5,041,912
Selected Statements of Income Data:
Net interest income $ 470,610 $ 464,194 $ 469,974 $ 462,358 $ 447,537 $ 934,804 $ 905,532
Net revenue (2) 591,757 604,774 570,803 574,836 560,567 1,196,531 1,126,331
Net income 152,388 187,294 123,480 164,198 154,750 339,682 334,948
Pre-tax income, excluding provision for credit losses (non-GAAP) (3) 251,404 271,629 208,151 244,781 239,944 523,033 506,539
Net income per common share - Basic 2.35 2.93 1.90 2.57 2.41 5.28 5.26
Net income per common share - Diluted 2.32 2.89 1.87 2.53 2.38 5.21 5.18
Cash dividends declared per common share 0.45 0.45 0.40 0.40 0.40 0.90 0.80
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin 3.50 % 3.57 % 3.62 % 3.60 % 3.64 % 3.53 % 3.72 %
Net interest margin - fully taxable-equivalent (non-GAAP) (3) 3.52 3.59 3.64 3.62 3.66 3.56 3.74
Non-interest income to average assets 0.85 1.02 0.73 0.82 0.86 0.93 0.85
Non-interest expense to average assets 2.38 2.41 2.62 2.41 2.44 2.40 2.39
Net overhead ratio (4) 1.53 1.39 1.89 1.59 1.58 1.46 1.54
Return on average assets 1.07 1.35 0.89 1.20 1.18 1.21 1.29
Return on average common equity 11.61 14.42 9.93 13.35 12.79 13.01 14.20
Return on average tangible common equity (non-GAAP) (3) 13.49 16.75 11.73 15.73 15.12 15.12 16.79
Average total assets $ 57,493,184 $ 55,602,695 $ 55,017,075 $ 54,381,981 $ 52,601,953 $ 56,547,939 $ 52,340,090
Average total shareholders' equity 5,450,173 5,440,457 5,066,196 5,083,883 5,044,718 5,445,315 4,970,407
Average loans to average deposits ratio 95.1 % 94.5 % 92.9 % 92.4 % 94.3 % 94.8 % 93.7 %
Period-end loans to deposits ratio 93.0 93.1 92.8 92.1 93.2
Common Share Data at end of period:
Market price per common share $ 98.56 $ 104.39 $ 92.75 $ 75.50 $ 72.62
Book value per common share 82.97 81.38 81.43 75.19 75.65
Tangible book value per common share (non-GAAP) (3) 72.01 70.40 70.33 64.07 64.50
Common shares outstanding 61,760,139 61,736,715 61,243,626 61,222,058 61,197,676
Other Data at end of period:
Common equity to assets ratio 8.6 % 8.7 % 8.9 % 8.3 % 8.5 %
Tangible common equity ratio (non-GAAP) (3) 7.5 7.6 7.7 7.1 7.4
Tier 1 leverage ratio (5) 9.3 9.4 9.3 9.2 9.3
Risk-based capital ratios:
Tier 1 capital ratio (5) 10.2 10.3 10.3 10.2 10.1
Common equity tier 1 capital ratio (5) 9.5 9.5 9.4 9.3 9.3
Total capital ratio (5) 12.0 12.2 12.1 12.0 12.0
Allowance for credit losses (6) $ 437,560 $ 427,504 $ 427,612 $ 399,531 $ 387,786
Allowance for loan and unfunded lending-related commitment losses to total loans 0.98 % 0.99 % 1.01 % 0.96 % 0.94 %
Number of:
Bank subsidiaries 15 15 15 15 15
Banking offices 177 176 174 174 175

(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

(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands) 2024 2024 2023 2023 2023
Assets
Cash and due from banks $ 415,462 $ 379,825 $ 423,404 $ 418,088 $ 513,858
Federal funds sold and securities purchased under resale agreements 62 61 60 60 59
Interest-bearing deposits with banks 2,824,314 2,131,077 2,084,323 2,448,570 2,163,708
Available-for-sale securities, at fair value 4,329,957 4,387,598 3,502,915 3,611,835 3,492,481
Held-to-maturity securities, at amortized cost 3,755,924 3,810,015 3,856,916 3,909,150 3,564,473
Trading account securities 4,134 2,184 4,707 1,663 3,027
Equity securities with readily determinable fair value 112,173 119,777 139,268 134,310 116,275
Federal Home Loan Bank and Federal Reserve Bank stock 256,495 224,657 205,003 204,040 195,117
Brokerage customer receivables 13,682 13,382 10,592 14,042 15,722
Mortgage loans held-for-sale, at fair value 411,851 339,884 292,722 304,808 338,728
Loans, net of unearned income 44,675,531 43,230,706 42,131,831 41,446,032 41,023,408
Allowance for loan losses (363,719 ) (348,612 ) (344,235 ) (315,039 ) (302,499 )
Net loans 44,311,812 42,882,094 41,787,596 41,130,993 40,720,909
Premises, software and equipment, net 722,295 744,769 748,966 747,501 749,393
Lease investments, net 275,459 283,557 281,280 275,152 274,351
Accrued interest receivable and other assets 1,671,334 1,580,142 1,551,899 1,674,681 1,455,748
Trade date securities receivable - - 690,722 - -
Goodwill 655,955 656,181 656,672 656,109 656,674
Other acquisition-related intangible assets 20,607 21,730 22,889 24,244 25,653
Total assets $ 59,781,516 $ 57,576,933 $ 56,259,934 $ 55,555,246 $ 54,286,176
Liabilities and Shareholders' Equity
Deposits:
Non-interest-bearing $ 10,031,440 $ 9,908,183 $ 10,420,401 $ 10,347,006 $ 10,604,915
Interest-bearing 38,017,586 36,540,675 34,976,769 34,645,680 33,433,792
Total deposits 48,049,026 46,448,858 45,397,170 44,992,686 44,038,707
Federal Home Loan Bank advances 3,176,309 2,676,751 2,326,071 2,326,071 2,026,071
Other borrowings 606,579 575,408 645,813 643,999 665,219
Subordinated notes 298,113 437,965 437,866 437,731 437,628
Junior subordinated debentures 253,566 253,566 253,566 253,566 253,566
Accrued interest payable and other liabilities 1,861,295 1,747,985 1,799,922 1,885,580 1,823,073
Total liabilities 54,244,888 52,140,533 50,860,408 50,539,633 49,244,264
Shareholders' Equity:
Preferred stock 412,500 412,500 412,500 412,500 412,500
Common stock 61,825 61,798 61,269 61,244 61,219
Surplus 1,964,645 1,954,532 1,943,806 1,933,226 1,923,623
Treasury stock (5,760 ) (5,757 ) (2,217 ) (1,966 ) (1,966 )
Retained earnings 3,615,616 3,498,475 3,345,399 3,253,332 3,120,626
Accumulated other comprehensive loss (512,198 ) (485,148 ) (361,231 ) (642,723 ) (474,090 )
Total shareholders' equity 5,536,628 5,436,400 5,399,526 5,015,613 5,041,912
Total liabilities and shareholders' equity $ 59,781,516 $ 57,576,933 $ 56,259,934 $ 55,555,246 $ 54,286,176


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

Three Months Ended Six Months Ended
(Dollars in thousands, except per share data) Jun 30,
2024 		Mar 31,
2024 		Dec 31,
2023 		Sep 30,
2023 		Jun 30,
2023 		Jun 30,
2024 		Jun 30,
2023
Interest income
Interest and fees on loans $ 749,812 $ 710,341 $ 694,943 $ 666,260 $ 621,057 $ 1,460,153 $ 1,179,749
Mortgage loans held-for-sale 5,434 4,146 4,318 4,767 4,178 9,580 7,706
Interest-bearing deposits with banks 19,731 16,658 21,762 26,866 16,882 36,389 30,350
Federal funds sold and securities purchased under resale agreements 17 19 578 1,157 1 36 71
Investment securities 69,779 69,678 68,237 59,164 51,243 139,457 111,186
Trading account securities 13 18 15 6 6 31 20
Federal Home Loan Bank and Federal Reserve Bank stock 4,974 4,478 3,792 3,896 3,544 9,452 7,224
Brokerage customer receivables 219 175 203 284 265 394 560
Total interest income 849,979 805,513 793,848 762,400 697,176 1,655,492 1,336,866
Interest expense
Interest on deposits 335,703 299,532 285,390 262,783 213,495 635,235 358,297
Interest on Federal Home Loan Bank advances 24,797 22,048 18,316 17,436 17,399 46,845 36,534
Interest on other borrowings 8,700 9,248 9,557 9,384 8,485 17,948 16,339
Interest on subordinated notes 5,185 5,487 5,522 5,491 5,523 10,672 11,011
Interest on junior subordinated debentures 4,984 5,004 5,089 4,948 4,737 9,988 9,153
Total interest expense 379,369 341,319 323,874 300,042 249,639 720,688 431,334
Net interest income 470,610 464,194 469,974 462,358 447,537 934,804 905,532
Provision for credit losses 40,061 21,673 42,908 19,923 28,514 61,734 51,559
Net interest income after provision for credit losses 430,549 442,521 427,066 442,435 419,023 873,070 853,973
Non-interest income
Wealth management 35,413 34,815 33,275 33,529 33,858 70,228 63,803
Mortgage banking 29,124 27,663 7,433 27,395 29,981 56,787 48,245
Service charges on deposit accounts 15,546 14,811 14,522 14,217 13,608 30,357 26,511
(Losses) gains on investment securities, net (4,282 ) 1,326 2,484 (2,357 ) 0 (2,956 ) 1,398
Fees from covered call options 2,056 4,847 4,679 4,215 2,578 6,903 12,969
Trading gains (losses), net 70 677 (505 ) 728 106 747 919
Operating lease income, net 13,938 14,110 14,162 13,863 12,227 28,048 25,273
Other 29,282 42,331 24,779 20,888 20,672 71,613 41,681
Total non-interest income 121,147 140,580 100,829 112,478 113,030 261,727 220,799
Non-interest expense
Salaries and employee benefits 198,541 195,173 193,971 192,338 184,923 393,714 361,704
Software and equipment 29,231 27,731 27,779 25,951 26,205 56,962 50,902
Operating lease equipment 10,834 10,683 10,694 12,020 9,816 21,517 19,649
Occupancy, net 19,585 19,086 18,102 21,304 19,176 38,671 37,662
Data processing 9,503 9,292 8,892 10,773 9,726 18,795 19,135
Advertising and marketing 17,436 13,040 17,166 18,169 17,794 30,476 29,740
Professional fees 9,967 9,553 8,768 8,887 8,940 19,520 17,103
Amortization of other acquisition-related intangible assets 1,122 1,158 1,356 1,408 1,499 2,280 2,734
FDIC insurance 10,429 14,537 43,677 9,748 9,008 24,966 17,677
OREO expenses, net (259 ) 392 (1,559 ) 120 118 133 (89 )
Other 33,964 32,500 33,806 29,337 33,418 66,464 63,575
Total non-interest expense 340,353 333,145 362,652 330,055 320,623 673,498 619,792
Income before taxes 211,343 249,956 165,243 224,858 211,430 461,299 454,980
Income tax expense 58,955 62,662 41,763 60,660 56,680 121,617 120,032
Net income $ 152,388 $ 187,294 $ 123,480 $ 164,198 $ 154,750 $ 339,682 $ 334,948
Preferred stock dividends 6,991 6,991 6,991 6,991 6,991 13,982 13,982
Net income applicable to common shares $ 145,397 $ 180,303 $ 116,489 $ 157,207 $ 147,759 $ 325,700 $ 320,966
Net income per common share - Basic $ 2.35 $ 2.93 $ 1.90 $ 2.57 $ 2.41 $ 5.28 $ 5.26
Net income per common share - Diluted $ 2.32 $ 2.89 $ 1.87 $ 2.53 $ 2.38 $ 5.21 $ 5.18
Cash dividends declared per common share $ 0.45 $ 0.45 $ 0.40 $ 0.40 $ 0.40 $ 0.90 $ 0.80
Weighted average common shares outstanding 61,839 61,481 61,236 61,213 61,192 61,660 61,072
Dilutive potential common shares 926 928 1,166 964 902 901 933
Average common shares and dilutive common shares 62,765 62,409 62,402 62,177 62,094 62,561 62,005


TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES

% Growth From
(Dollars in thousands) Jun 30,
2024 		Mar 31,
2024 		Dec 31,
2023 		Sep 30,
2023 		Jun 30,
2023 		Dec 31,
2023 (1) 		Jun 30,
2023
Balance:
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. government agencies $ 281,103 $ 193,064 $ 155,529 $ 190,511 $ 235,570 NM 19 %
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. government agencies 130,748 146,820 137,193 114,297 103,158 (9 ) 27
Total mortgage loans held-for-sale $ 411,851 $ 339,884 $ 292,722 $ 304,808 $ 338,728 82 % 22 %
Core loans:
Commercial
Commercial and industrial $ 6,226,336 $ 6,105,968 $ 5,804,629 $ 5,894,732 $ 5,737,633 15 % 9 %
Asset-based lending 1,465,867 1,355,255 1,433,250 1,396,591 1,465,848 5 0
Municipal 747,357 721,526 677,143 676,915 653,117 21 14
Leases 2,439,128 2,344,295 2,208,368 2,109,628 1,925,767 21 27
PPP loans 9,954 11,036 11,533 13,744 15,337 (20 ) (35 )
Commercial real estate
Residential construction 55,019 57,558 58,642 51,550 51,689 (12 ) 6
Commercial construction 1,866,701 1,748,607 1,729,937 1,547,322 1,409,751 16 32
Land 338,831 344,149 295,462 294,901 298,996 30 13
Office 1,585,312 1,566,748 1,455,417 1,422,748 1,404,422 18 13
Industrial 2,307,455 2,190,200 2,135,876 2,057,957 2,002,740 16 15
Retail 1,365,753 1,366,415 1,337,517 1,341,451 1,304,083 4 5
Multi-family 2,988,940 2,922,432 2,815,911 2,710,829 2,696,478 12 11
Mixed use and other 1,439,186 1,437,328 1,515,402 1,519,422 1,440,652 (10 ) (0 )
Home equity 356,313 340,349 343,976 343,258 336,974 7 6
Residential real estate
Residential real estate loans for investment 2,933,157 2,746,916 2,619,083 2,538,630 2,455,392 24 19
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. government agencies 88,503 90,911 92,780 97,911 117,024 (9 ) (24 )
Residential mortgage loans, early buy-out exercised loans guaranteed by U.S. government agencies 45,675 52,439 57,803 71,062 70,824 (42 ) (36 )
Total core loans $ 26,259,487 $ 25,402,132 $ 24,592,729 $ 24,088,651 $ 23,386,727 14 % 12 %
Niche loans:
Commercial
Franchise $ 1,150,460 $ 1,122,302 $ 1,092,532 $ 1,074,162 $ 1,091,164 5 % 5 %
Mortgage warehouse lines of credit 593,519 403,245 230,211 245,450 381,043 95 56
Community Advantage - homeowners association 491,722 475,832 452,734 424,054 405,042 7 21
Insurance agency lending 1,030,119 964,022 921,653 890,197 925,520 14 11
Premium Finance receivables
U.S. property & casualty insurance 6,142,654 6,113,993 5,983,103 5,815,346 5,900,228 1 4
Canada property & casualty insurance 958,099 826,026 920,426 907,401 862,470 32 11
Life insurance 7,962,115 7,872,033 7,877,943 7,931,808 8,039,273 2 (1 )
Consumer and other 87,356 51,121 60,500 68,963 31,941 143 173
Total niche loans $ 18,416,044 $ 17,828,574 $ 17,539,102 $ 17,357,381 $ 17,636,681 7 % 4 %
Total loans, net of unearned income $ 44,675,531 $ 43,230,706 $ 42,131,831 $ 41,446,032 $ 41,023,408 7 % 9 %

(1) Annualized.

TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

% Growth From
(Dollars in thousands) Jun 30,
2024 		Mar 31,
2024 		Dec 31,
2023 		Sep 30,
2023 		Jun 30,
2023 		Mar 31,
2024 (1) 		Jun 30, 2023
Balance:
Non-interest-bearing $ 10,031,440 $ 9,908,183 $ 10,420,401 $ 10,347,006 $ 10,604,915 5 % (5) %
NOW and interest-bearing demand deposits 5,053,909 5,720,947 5,797,649 6,006,114 5,814,836 (47 ) (13 )
Wealth management deposits (2) 1,490,711 1,347,817 1,614,499 1,788,099 1,417,984 43 5
Money market 16,320,017 15,617,717 15,149,215 14,478,504 14,523,124 18 12
Savings 5,882,179 5,959,774 5,790,334 5,584,294 5,321,578 (5 ) 11
Time certificates of deposit 9,270,770 7,894,420 6,625,072 6,788,669 6,356,270 70 46
Total deposits $ 48,049,026 $ 46,448,858 $ 45,397,170 $ 44,992,686 $ 44,038,707 14 % 9 %
Mix:
Non-interest-bearing 21 % 21 % 23 % 23 % 24 %
NOW and interest-bearing demand deposits 11 12 13 13 13
Wealth management deposits (2) 3 3 4 4 3
Money market 34 34 33 32 33
Savings 12 13 13 13 12
Time certificates of deposit 19 17 14 15 15
Total deposits 100 % 100 % 100 % 100 % 100 %

(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 June 30, 2024

(Dollars in thousands) Total Time
Certificates of
Deposit 		Weighted-Average
Rate of Maturing
Time Certificates
of Deposit
1-3 months $ 2,680,761 4.75 %
4-6 months 2,863,328 4.74
7-9 months 2,309,917 4.36
10-12 months 1,073,537 4.25
13-18 months 215,181 3.50
19-24 months 67,172 2.52
24+ months 60,874 1.90
Total $ 9,270,770 4.53 %


TABLE 4: QUARTERLY AVERAGE BALANCES

Average Balance for three months ended,
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands) 2024 2024 2023 2023 2023
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents (1) $ 1,485,481 $ 1,254,332 $ 1,682,176 $ 2,053,568 $ 1,454,057
Investment securities (2) 8,203,764 8,349,796 7,971,068 7,706,285 7,252,582
FHLB and FRB stock 253,614 230,648 204,593 201,252 223,813
Liquidity management assets (3) 9,942,859 9,834,776 9,857,837 9,961,105 8,930,452
Other earning assets (3)(4) 15,257 15,081 14,821 17,879 17,401
Mortgage loans held-for-sale 347,236 290,275 279,569 319,099 307,683
Loans, net of unearned income (3)(5) 43,819,354 42,129,893 41,361,952 40,707,042 40,106,393
Total earning assets (3) 54,124,706 52,270,025 51,514,179 51,005,125 49,361,929
Allowance for loan and investment security losses (360,504 ) (361,734 ) (329,441 ) (319,491 ) (302,627 )
Cash and due from banks 434,916 450,267 443,989 459,819 481,510
Other assets 3,294,066 3,244,137 3,388,348 3,236,528 3,061,141
Total assets $ 57,493,184 $ 55,602,695 $ 55,017,075 $ 54,381,981 $ 52,601,953
NOW and interest-bearing demand deposits $ 4,985,306 $ 5,680,265 $ 5,868,976 $ 5,815,155 $ 5,540,597
Wealth management deposits 1,531,865 1,510,203 1,704,099 1,512,765 1,545,626
Money market accounts 15,272,126 14,474,492 14,212,320 14,155,446 13,735,924
Savings accounts 5,878,844 5,792,118 5,676,155 5,472,535 5,206,609
Time deposits 8,546,172 7,148,456 6,645,980 6,495,906 5,603,024
Interest-bearing deposits 36,214,313 34,605,534 34,107,530 33,451,807 31,631,780
Federal Home Loan Bank advances 3,096,920 2,728,849 2,326,073 2,241,292 2,227,106
Other borrowings 587,262 627,711 633,673 657,454 625,757
Subordinated notes 410,331 437,893 437,785 437,658 437,545
Junior subordinated debentures 253,566 253,566 253,566 253,566 253,566
Total interest-bearing liabilities 40,562,392 38,653,553 37,758,627 37,041,777 35,175,754
Non-interest-bearing deposits 9,879,134 9,972,646 10,406,585 10,612,009 10,908,022
Other liabilities 1,601,485 1,536,039 1,785,667 1,644,312 1,473,459
Equity 5,450,173 5,440,457 5,066,196 5,083,883 5,044,718
Total liabilities and shareholders' equity $ 57,493,184 $ 55,602,695 $ 55,017,075 $ 54,381,981 $ 52,601,953
Net free funds/contribution (6) $ 13,562,314 $ 13,616,472 $ 13,755,552 $ 13,963,348 $ 14,186,175

(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

Net Interest Income for three months ended,
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands) 2024 2024 2023 2023 2023
Interest income:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents $ 19,748 $ 16,677 $ 22,340 $ 28,022 $ 16,882
Investment securities 70,346 70,228 68,812 59,737 51,795
FHLB and FRB stock 4,974 4,478 3,792 3,896 3,544
Liquidity management assets (1) 95,068 91,383 94,944 91,655 72,221
Other earning assets (1) 235 198 222 291 272
Mortgage loans held-for-sale 5,434 4,146 4,318 4,767 4,178
Loans, net of unearned income (1) 752,117 712,587 697,093 668,183 622,939
Total interest income $ 852,854 $ 808,314 $ 796,577 $ 764,896 $ 699,610
Interest expense:
NOW and interest-bearing demand deposits $ 32,719 $ 34,896 $ 38,124 $ 36,001 $ 29,178
Wealth management deposits 10,294 10,461 12,076 9,350 9,097
Money market accounts 155,100 137,984 130,252 124,742 106,630
Savings accounts 41,063 39,071 36,463 31,784 25,603
Time deposits 96,527 77,120 68,475 60,906 42,987
Interest-bearing deposits 335,703 299,532 285,390 262,783 213,495
Federal Home Loan Bank advances 24,797 22,048 18,316 17,436 17,399
Other borrowings 8,700 9,248 9,557 9,384 8,485
Subordinated notes 5,185 5,487 5,522 5,491 5,523
Junior subordinated debentures 4,984 5,004 5,089 4,948 4,737
Total interest expense $ 379,369 $ 341,319 $ 323,874 $ 300,042 $ 249,639
Less: Fully taxable-equivalent adjustment (2,875 ) (2,801 ) (2,729 ) (2,496 ) (2,434 )
Net interest income (GAAP) (2) 470,610 464,194 469,974 462,358 447,537
Fully taxable-equivalent adjustment 2,875 2,801 2,729 2,496 2,434
Net interest income, fully taxable-equivalent (non-GAAP) (2) $ 473,485 $ 466,995 $ 472,703 $ 464,854 $ 449,971

(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

Net Interest Margin for three months ended,
Jun 30,
2024 		Mar 31,
2024 		Dec 31,
2023 		Sep 30,
2023 		Jun 30,
2023
Yield earned on:
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents 5.35 % 5.35 % 5.27 % 5.41 % 4.66 %
Investment securities 3.45 3.38 3.42 3.08 2.86
FHLB and FRB stock 7.89 7.81 7.35 7.68 6.35
Liquidity management assets 3.85 3.74 3.82 3.65 3.24
Other earning assets 6.23 5.25 5.92 6.47 6.27
Mortgage loans held-for-sale 6.29 5.74 6.13 5.93 5.45
Loans, net of unearned income 6.90 6.80 6.69 6.51 6.23
Total earning assets 6.34 % 6.22 % 6.13 % 5.95 % 5.68 %
Rate paid on:
NOW and interest-bearing demand deposits 2.64 % 2.47 % 2.58 % 2.46 % 2.11 %
Wealth management deposits 2.70 2.79 2.81 2.45 2.36
Money market accounts 4.08 3.83 3.64 3.50 3.11
Savings accounts 2.81 2.71 2.55 2.30 1.97
Time deposits 4.54 4.34 4.09 3.72 3.08
Interest-bearing deposits 3.73 3.48 3.32 3.12 2.71
Federal Home Loan Bank advances 3.22 3.25 3.12 3.09 3.13
Other borrowings 5.96 5.92 5.98 5.66 5.44
Subordinated notes 5.08 5.04 5.00 4.98 5.06
Junior subordinated debentures 7.91 7.94 7.96 7.74 7.49
Total interest-bearing liabilities 3.76 % 3.55 % 3.40 % 3.21 % 2.85 %
Interest rate spread (1)(2) 2.58 % 2.67 % 2.73 % 2.74 % 2.83 %
Less: Fully taxable-equivalent adjustment (0.02 ) (0.02 ) (0.02 ) (0.02 ) (0.02 )
Net free funds/contribution (3) 0.94 0.92 0.91 0.88 0.83
Net interest margin (GAAP) (2) 3.50 % 3.57 % 3.62 % 3.60 % 3.64 %
Fully taxable-equivalent adjustment 0.02 0.02 0.02 0.02 0.02
Net interest margin, fully taxable-equivalent (non-GAAP) (2) 3.52 % 3.59 % 3.64 % 3.62 % 3.66 %

(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

Average Balance
for six months ended, 		Interest
for six months ended, 		Yield/Rate
for six months ended,
(Dollars in thousands) Jun 30,
2024 		Jun 30,
2023 		Jun 30,
2024 		Jun 30,
2023 		Jun 30,
2024 		Jun 30,
2023
Interest-bearing deposits with banks, securities purchased under resale agreements and cash equivalents (1) $ 1,369,906 $ 1,345,506 $ 36,425 $ 30,421 5.35 % 4.56 %
Investment securities (2) 8,276,780 7,602,707 140,574 112,288 3.42 2.98
FHLB and FRB stock 242,131 228,687 9,452 7,224 7.85 6.37
Liquidity management assets (3)(4) $ 9,888,817 $ 9,176,900 $ 186,451 $ 149,933 3.79 % 3.29 %
Other earning assets (3)(4)(5) 15,169 17,920 433 585 5.74 6.58
Mortgage loans held-for-sale 318,756 289,426 9,580 7,706 6.04 5.37
Loans, net of unearned income (3)(4)(6) 42,974,623 39,602,672 1,464,704 1,183,503 6.85 6.03
Total earning assets (4) $ 53,197,365 $ 49,086,918 $ 1,661,168 $ 1,341,727 6.28 % 5.51 %
Allowance for loan and investment security losses (361,119 ) (292,721 )
Cash and due from banks 442,591 484,964
Other assets 3,269,102 3,060,929
Total assets $ 56,547,939 $ 52,340,090
NOW and interest-bearing demand deposits $ 5,332,786 $ 5,406,911 $ 67,615 $ 47,949 2.55 % 1.79 %
Wealth management deposits 1,521,034 1,854,637 20,755 21,355 2.74 2.32
Money market accounts 14,873,309 13,138,018 293,084 174,907 3.96 2.68
Savings accounts 5,835,481 5,019,505 80,134 41,419 2.76 1.66
Time deposits 7,847,314 5,323,882 173,647 72,667 4.45 2.75
Interest-bearing deposits $ 35,409,924 $ 30,742,953 $ 635,235 $ 358,297 3.61 % 2.35 %
Federal Home Loan Bank advances 2,912,884 2,350,309 46,845 36,534 3.23 3.13
Other borrowings 607,487 614,410 17,948 16,338 5.94 5.36
Subordinated notes 424,112 437,484 10,672 11,011 5.06 5.08
Junior subordinated debentures 253,566 253,566 9,988 9,154 7.92 7.28
Total interest-bearing liabilities $ 39,607,973 $ 34,398,722 $ 720,688 $ 431,334 3.66 % 2.53 %
Non-interest-bearing deposits 9,925,890 11,536,336
Other liabilities 1,568,761 1,434,625
Equity 5,445,315 4,970,407
Total liabilities and shareholders' equity $ 56,547,939 $ 52,340,090
Interest rate spread (4)(7) 2.62 % 2.98 %
Less: Fully taxable-equivalent adjustment (5,676 ) (4,861 ) (0.03 ) (0.02 )
Net free funds/contribution (8) $ 13,589,392 $ 14,688,196 0.94 0.76
Net interest income/margin (GAAP) (4) $ 934,804 $ 905,532 3.53 % 3.72 %
Fully taxable-equivalent adjustment 5,676 4,861 0.03 0.02
Net interest income/margin, fully taxable-equivalent (non-GAAP) (4) $ 940,480 $ 910,393 3.56 % 3.74 %

(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. 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:

Static Shock Scenario +200 Basis Points +100 Basis Points -100 Basis Points -200 Basis Points
Jun 30, 2024 1.5 % 1.0 % 0.6 % (0.0) %
Mar 31, 2024 1.9 1.4 1.5 1.6
Dec 31, 2023 2.6 1.8 0.4 (0.7 )
Sep 30, 2023 3.3 1.9 (2.0 ) (5.2 )
Jun 30, 2023 5.7 2.9 (2.9 ) (7.9 )
Ramp Scenario +200 Basis Points +100 Basis Points -100 Basis Points -200 Basis Points
Jun 30, 2024 1.2 % 1.0 % 0.9 % 1.0 %
Mar 31, 2024 0.8 0.6 1.3 2.0
Dec 31, 2023 1.6 1.2 (0.3 ) (1.5 )
Sep 30, 2023 1.7 1.2 (0.5 ) (2.4 )
Jun 30, 2023 2.9 1.8 (0.9 ) (3.4 )


As shown above, the magnitude of potential changes in net interest income in various interest rate scenarios has continued to remain relatively neutral. Given the recent unprecedented rise in interest rates, the Company has made a conscious effort to reposition its exposure to changing interest rates given the uncertainty of the future interest rate environment. 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

Loans repricing or contractual maturity period
As of June 30, 2024 One year or
less 		From one to
five years 		From five to fifteen years After fifteen years Total
(In thousands)
Commercial
Fixed rate $ 477,277 $ 3,103,539 $ 1,833,528 $ 42,066 $ 5,456,410
Variable rate 8,696,826 1,226 - - 8,698,052
Total commercial $ 9,174,103 $ 3,104,765 $ 1,833,528 $ 42,066 $ 14,154,462
Commercial real estate
Fixed rate $ 528,051 $ 2,517,267 $ 352,478 $ 55,075 $ 3,452,871
Variable rate 8,480,512 13,745 69 - 8,494,326
Total commercial real estate $ 9,008,563 $ 2,531,012 $ 352,547 $ 55,075 $ 11,947,197
Home equity
Fixed rate $ 9,862 $ 3,413 $ - $ 24 $ 13,299
Variable rate 343,014 - - - 343,014
Total home equity $ 352,876 $ 3,413 $ - $ 24 $ 356,313
Residential real estate
Fixed rate $ 20,300 $ 3,124 $ 29,630 $ 1,036,012 $ 1,089,066
Variable rate 77,249 385,872 1,515,148 - 1,978,269
Total residential real estate $ 97,549 $ 388,996 $ 1,544,778 $ 1,036,012 $ 3,067,335
Premium finance receivables - property & casualty
Fixed rate $ 7,015,748 $ 85,005 $ - $ - $ 7,100,753
Variable rate - - - - -
Total premium finance receivables - property & casualty $ 7,015,748 $ 85,005 $ - $ - $ 7,100,753
Premium finance receivables - life insurance
Fixed rate $ 71,207 $ 543,433 $ 4,000 $ 6,991 $ 625,631
Variable rate 7,336,484 - - - 7,336,484
Total premium finance receivables - life insurance $ 7,407,691 $ 543,433 $ 4,000 $ 6,991 $ 7,962,115
Consumer and other
Fixed rate $ 33,887 $ 5,452 $ 9 $ 455 $ 39,803
Variable rate 47,553 - - - 47,553
Total consumer and other $ 81,440 $ 5,452 $ 9 $ 455 $ 87,356
Total per category
Fixed rate $ 8,156,332 $ 6,261,233 $ 2,219,645 $ 1,140,623 $ 17,777,833
Variable rate 24,981,638 400,843 1,515,217 - 26,897,698
Total loans, net of unearned income $ 33,137,970 $ 6,662,076 $ 3,734,862 $ 1,140,623 $ 44,675,531
Variable Rate Loan Pricing by Index:
SOFR tenors $ 15,744,528
One- year CMT 6,176,495
Prime 3,474,480
Fed Funds 997,252
Ameribor tenors 241,682
Other U.S. Treasury tenors 124,349
Other 138,912
Total variable rate $ 26,897,698

SOFR - Secured Overnight Financing Rate.
CMT - Constant Maturity Treasury Rate.
Ameribor - American Interbank Offered Rate.

Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/b3dd9b46-22f1-4593-9230-4325cca825e0

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 $12.5 billion tied to one-month SOFR and $6.2 billion tied to one-year CMT. The above chart shows:

Basis Point (bp) Change in
1-month
SOFR 		One- year CMT Prime
Second Quarter 2024 1 bps 6 bps 0 bps
First Quarter 2024 (2 ) 24 0
Fourth Quarter 2023 3 (67 ) 0
Third Quarter 2023 18 6 25
Second Quarter 2023 34 76 25


TABLE 10: ALLOWANCE FOR CREDIT LOSSES

Three Months Ended Six Months Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30,
(Dollars in thousands) 2024 2024 2023 2023 2023 2024 2023
Allowance for credit losses at beginning of period $ 427,504 $ 427,612 $ 399,531 $ 387,786 $ 376,261 $ 427,612 $ 357,936
Cumulative effect adjustment from the adoption of ASU 2022-02 - - - - - - 741
Provision for credit losses 40,061 21,673 42,908 19,923 28,514 61,734 51,559
Other adjustments (19 ) (31 ) 62 (60 ) 41 (50 ) 45
Charge-offs:
Commercial 9,584 11,215 5,114 2,427 5,629 20,799 8,172
Commercial real estate 15,526 5,469 5,386 1,713 8,124 20,995 8,129
Home equity - 74 - 227 - 74 -
Residential real estate 23 38 114 78 - 61 -
Premium finance receivables - property & casualty 9,486 6,938 6,706 5,830 4,519 16,424 9,148
Premium finance receivables - life insurance - - - 18 134 - 155
Consumer and other 137 107 148 184 110 244 263
Total charge-offs 34,756 23,841 17,468 10,477 18,516 58,597 25,867
Recoveries:
Commercial 950 479 592 1,162 505 1,429 897
Commercial real estate 90 31 92 243 25 121 125
Home equity 35 29 34 33 37 64 72
Residential real estate 8 2 10 1 6 10 10
Premium finance receivables - property & casualty 3,658 1,519 1,820 906 890 5,177 2,204
Premium finance receivables - life insurance 5 8 7 - - 13 9
Consumer and other 24 23 24 14 23 47 55
Total recoveries 4,770 2,091 2,579 2,359 1,486 6,861 3,372
Net charge-offs (29,986 ) (21,750 ) (14,889 ) (8,118 ) (17,030 ) (51,736 ) (22,495 )
Allowance for credit losses at period end $ 437,560 $ 427,504 $ 427,612 $ 399,531 $ 387,786 $ 437,560 $ 387,786
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category's average:
Commercial 0.25 % 0.33 % 0.14 % 0.04 % 0.16 % 0.29 % 0.12 %
Commercial real estate 0.53 0.19 0.19 0.05 0.31 0.36 0.16
Home equity (0.04 ) 0.05 (0.04 ) 0.23 (0.04 ) 0.01 (0.04 )
Residential real estate 0.00 0.01 0.02 0.01 (0.00 ) 0.00 (0.00 )
Premium finance receivables - property & casualty 0.33 0.32 0.29 0.29 0.24 0.33 0.24
Premium finance receivables - life insurance (0.00 ) (0.00 ) (0.00 ) 0.00 0.01 (0.00 ) 0.00
Consumer and other 0.56 0.42 0.58 0.65 0.45 0.49 0.58
Total loans, net of unearned income 0.28 % 0.21 % 0.14 % 0.08 % 0.17 % 0.24 0.11 %
Loans at period end $ 44,675,531 $ 43,230,706 $ 42,131,831 $ 41,446,032 $ 41,023,408
Allowance for loan losses as a percentage of loans at period end 0.81 % 0.81 % 0.82 % 0.76 % 0.74 %
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end 0.98 0.99 1.01 0.96 0.94


TABLE 11: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

Three Months Ended Six Months Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30,
(In thousands) 2024 2024 2023 2023 2023 2024 2023
Provision for loan losses $ 45,111 $ 26,159 $ 44,023 $ 20,717 $ 31,516 $ 71,270 $ 54,036
Provision for unfunded lending-related commitments losses (5,212 ) (4,468 ) (1,081 ) (769 ) (2,945 ) (9,680 ) (2,395 )
Provision for held-to-maturity securities losses 162 (18 ) (34 ) (25 ) (57 ) 144 (82 )
Provision for credit losses $ 40,061 $ 21,673 $ 42,908 $ 19,923 $ 28,514 $ 61,734 $ 51,559
Allowance for loan losses $ 363,719 $ 348,612 $ 344,235 $ 315,039 $ 302,499
Allowance for unfunded lending-related commitments losses 73,350 78,563 83,030 84,111 84,881
Allowance for loan losses and unfunded lending-related commitments losses 437,069 427,175 427,265 399,150 387,380
Allowance for held-to-maturity securities losses 491 329 347 381 406
Allowance for credit losses $ 437,560 $ 427,504 $ 427,612 $ 399,531 $ 387,786


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 June 30, 2024, March 31, 2024 and December 31, 2023.

As of Jun 30, 2024 As of Mar 31, 2024 As of Dec 31, 2023
(Dollars in thousands) Recorded
Investment 		Calculated
Allowance 		% of its
category's balance 		Recorded
Investment 		Calculated
Allowance 		% of its
category's balance 		Recorded
Investment 		Calculated
Allowance 		% of its
category's balance
Commercial:
Commercial, industrial and other $ 14,154,462 $ 181,991 1.29 % $ 13,503,481 $ 166,518 1.23 % $ 12,832,053 $ 169,604 1.32 %
Commercial real estate:
Construction and development 2,260,551 93,154 4.12 2,150,314 96,052 4.47 2,084,041 94,081 4.51
Non-construction 9,686,646 130,574 1.35 9,483,123 130,000 1.37 9,260,123 129,772 1.40
Home equity 356,313 7,242 2.03 340,349 7,191 2.11 343,976 7,116 2.07
Residential real estate 3,067,335 8,773 0.29 2,890,266 13,701 0.47 2,769,666 13,133 0.47
Premium finance receivables
Property and casualty insurance 7,100,753 14,053 0.20 6,940,019 12,645 0.18 6,903,529 12,384 0.18
Life insurance 7,962,115 693 0.01 7,872,033 685 0.01 7,877,943 685 0.01
Consumer and other 87,356 589 0.67 51,121 383 0.75 60,500 490 0.81
Total loans, net of unearned income $ 44,675,531 $ 437,069 0.98 % $ 43,230,706 $ 427,175 0.99 % $ 42,131,831 $ 427,265 1.01 %
Total core loans (1) $ 26,259,487 $ 398,494 1.52 % $ 25,402,132 $ 382,372 1.51 % $ 24,592,729 $ 380,847 1.55 %
Total niche loans (1) 18,416,044 38,575 0.21 17,828,574 44,803 0.25 17,539,102 46,418 0.26

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

TABLE 13: LOAN PORTFOLIO AGING

(In thousands) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023
Loan Balances:
Commercial
Nonaccrual $ 51,087 $ 31,740 $ 38,940 $ 43,569 $ 40,460
90+ days and still accruing 304 27 98 200 573
60-89 days past due 16,485 30,248 19,488 22,889 22,808
30-59 days past due 36,358 77,715 85,743 35,681 48,970
Current 14,050,228 13,363,751 12,687,784 12,623,134 12,487,660
Total commercial $ 14,154,462 $ 13,503,481 $ 12,832,053 $ 12,725,473 $ 12,600,471
Commercial real estate
Nonaccrual $ 48,289 $ 39,262 $ 35,459 $ 17,043 $ 18,483
90+ days and still accruing - - - 1,092 -
60-89 days past due 6,555 16,713 8,515 7,395 1,054
30-59 days past due 38,065 32,998 20,634 60,984 14,218
Current 11,854,288 11,544,464 11,279,556 10,859,666 10,575,056
Total commercial real estate $ 11,947,197 $ 11,633,437 $ 11,344,164 $ 10,946,180 $ 10,608,811
Home equity
Nonaccrual $ 1,100 $ 838 $ 1,341 $ 1,363 $ 1,361
90+ days and still accruing - - - - 110
60-89 days past due 275 212 62 219 316
30-59 days past due 1,229 1,617 2,263 1,668 601
Current 353,709 337,682 340,310 340,008 334,586
Total home equity $ 356,313 $ 340,349 $ 343,976 $ 343,258 $ 336,974
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies (1) $ 134,178 $ 143,350 $ 150,583 $ 168,973 $ 187,848
Nonaccrual 18,198 17,901 15,391 16,103 13,652
90+ days and still accruing - - - - -
60-89 days past due 1,977 - 2,325 1,145 7,243
30-59 days past due 130 24,523 22,942 904 872
Current 2,912,852 2,704,492 2,578,425 2,520,478 2,433,625
Total residential real estate $ 3,067,335 $ 2,890,266 $ 2,769,666 $ 2,707,603 $ 2,643,240
Premium finance receivables - property & casualty
Nonaccrual $ 32,722 $ 32,648 $ 27,590 $ 26,756 $ 19,583
90+ days and still accruing 22,427 25,877 20,135 16,253 12,785
60-89 days past due 29,925 15,274 23,236 16,552 22,670
30-59 days past due 45,927 59,729 50,437 31,919 32,751
Current 6,969,752 6,806,491 6,782,131 6,631,267 6,674,909
Total Premium finance receivables - property & casualty $ 7,100,753 $ 6,940,019 $ 6,903,529 $ 6,722,747 $ 6,762,698
Premium finance receivables - life insurance
Nonaccrual $ - $ - $ - $ - $ 6
90+ days and still accruing - - - 10,679 1,667
60-89 days past due 4,118 32,482 16,206 41,894 3,729
30-59 days past due 17,693 100,137 45,464 14,972 90,117
Current 7,940,304 7,739,414 7,816,273 7,864,263 7,943,754
Total Premium finance receivables - life insurance $ 7,962,115 $ 7,872,033 $ 7,877,943 $ 7,931,808 $ 8,039,273
Consumer and other
Nonaccrual $ 3 $ 19 $ 22 $ 16 $ 4
90+ days and still accruing 121 47 54 27 28
60-89 days past due 81 16 25 196 51
30-59 days past due 366 210 165 519 146
Current 86,785 50,829 60,234 68,205 31,712
Total consumer and other $ 87,356 $ 51,121 $ 60,500 $ 68,963 $ 31,941
Total loans, net of unearned income
Early buy-out loans guaranteed by U.S. government agencies (1) $ 134,178 $ 143,350 $ 150,583 $ 168,973 $ 187,848
Nonaccrual 151,399 122,408 118,743 104,850 93,549
90+ days and still accruing 22,852 25,951 20,287 28,251 15,163
60-89 days past due 59,416 94,945 69,857 90,290 57,871
30-59 days past due 139,768 296,929 227,648 146,647 187,675
Current 44,167,918 42,547,123 41,544,713 40,907,021 40,481,302
Total loans, net of unearned income $ 44,675,531 $ 43,230,706 $ 42,131,831 $ 41,446,032 $ 41,023,408

(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)

Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(Dollars in thousands) 2024 2024 2023 2023 2023
Loans past due greater than 90 days and still accruing:
Commercial $ 304 $ 27 $ 98 $ 200 $ 573
Commercial real estate - - - 1,092 -
Home equity - - - - 110
Residential real estate - - - - -
Premium finance receivables - property & casualty 22,427 25,877 20,135 16,253 12,785
Premium finance receivables - life insurance - - - 10,679 1,667
Consumer and other 121 47 54 27 28
Total loans past due greater than 90 days and still accruing 22,852 25,951 20,287 28,251 15,163
Non-accrual loans:
Commercial 51,087 31,740 38,940 43,569 40,460
Commercial real estate 48,289 39,262 35,459 17,043 18,483
Home equity 1,100 838 1,341 1,363 1,361
Residential real estate 18,198 17,901 15,391 16,103 13,652
Premium finance receivables - property & casualty 32,722 32,648 27,590 26,756 19,583
Premium finance receivables - life insurance - - - - 6
Consumer and other 3 19 22 16 4
Total non-accrual loans 151,399 122,408 118,743 104,850 93,549
Total non-performing loans:
Commercial 51,391 31,767 39,038 43,769 41,033
Commercial real estate 48,289 39,262 35,459 18,135 18,483
Home equity 1,100 838 1,341 1,363 1,471
Residential real estate 18,198 17,901 15,391 16,103 13,652
Premium finance receivables - property & casualty 55,149 58,525 47,725 43,009 32,368
Premium finance receivables - life insurance - - - 10,679 1,673
Consumer and other 124 66 76 43 32
Total non-performing loans $ 174,251 $ 148,359 $ 139,030 $ 133,101 $ 108,712
Other real estate owned 19,731 14,538 13,309 14,060 11,586
Total non-performing assets $ 193,982 $ 162,897 $ 152,339 $ 147,161 $ 120,298
Total non-performing loans by category as a percent of its own respective category's period-end balance:
Commercial 0.36 % 0.24 % 0.30 % 0.34 % 0.33 %
Commercial real estate 0.40 0.34 0.31 0.17 0.17
Home equity 0.31 0.25 0.39 0.40 0.44
Residential real estate 0.59 0.62 0.56 0.59 0.52
Premium finance receivables - property & casualty 0.78 0.84 0.69 0.64 0.48
Premium finance receivables - life insurance - - - 0.13 0.02
Consumer and other 0.14 0.13 0.13 0.06 0.10
Total loans, net of unearned income 0.39 % 0.34 % 0.33 % 0.32 % 0.26 %
Total non-performing assets as a percentage of total assets 0.32 % 0.28 % 0.27 % 0.26 % 0.22 %
Allowance for loan losses and unfunded lending-related commitments losses as a percentage of non-accrual loans 288.69 % 348.98 % 359.82 % 380.69 % 414.09 %

(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

Three Months Ended Six Months Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30,
(In thousands) 2024 2024 2023 2023 2023 2024 2023
Balance at beginning of period $ 148,359 $ 139,030 $ 133,101 $ 108,712 $ 100,690 $ 139,030 $ 100,697
Additions from becoming non-performing in the respective period 54,376 23,142 59,010 18,666 21,246 77,518 45,701
Return to performing status (912 ) (490 ) (24,469 ) (1,702 ) (360 ) (1,402 ) (840 )
Payments received (9,611 ) (8,336 ) (10,000 ) (6,488 ) (12,314 ) (17,947 ) (17,575 )
Transfer to OREO and other repossessed assets (6,945 ) (1,381 ) (2,623 ) (2,671 ) (2,958 ) (8,326 ) (2,958 )
Charge-offs, net (7,673 ) (14,810 ) (9,480 ) (3,011 ) (2,696 ) (22,483 ) (3,855 )
Net change for premium finance receivables (3,343 ) 11,204 (6,509 ) 19,595 5,104 7,861 (12,458 )
Balance at end of period $ 174,251 $ 148,359 $ 139,030 $ 133,101 $ 108,712 $ 174,251 $ 108,712


Other Real Estate Owned

Three Months Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(In thousands) 2024 2024 2023 2023 2023
Balance at beginning of period $ 14,538 $ 13,309 $ 14,060 $ 11,586 $ 9,361
Disposals/resolved (1,752 ) - (3,416 ) (467 ) (733 )
Transfers in at fair value, less costs to sell 6,945 1,436 2,665 2,941 2,958
Fair value adjustments - (207 ) - - -
Balance at end of period $ 19,731 $ 14,538 $ 13,309 $ 14,060 $ 11,586
Period End
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
Balance by Property Type: 2024 2024 2023 2023 2023
Residential real estate $ 161 $ 1,146 $ 720 $ 441 $ 318
Commercial real estate 19,570 13,392 12,589 13,619 11,268
Total $ 19,731 $ 14,538 $ 13,309 $ 14,060 $ 11,586


TABLE 15: NON-INTEREST INCOME

Three Months Ended Q2 2024 compared to
Q1 2024 		Q2 2024 compared to
Q2 2023
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(Dollars in thousands) 2024 2024 2023 2023 2023 $ Change % Change $ Change % Change
Brokerage $ 5,588 $ 5,556 $ 5,349 $ 4,359 $ 4,404 $ 32 1 % $ 1,184 27 %
Trust and asset management 29,825 29,259 27,926 29,170 29,454 566 2 371 1
Total wealth management 35,413 34,815 33,275 33,529 33,858 598 2 1,555 5
Mortgage banking 29,124 27,663 7,433 27,395 29,981 1,461 5 (857 ) (3 )
Service charges on deposit accounts 15,546 14,811 14,522 14,217 13,608 735 5 1,938 14
(Losses) gains on investment securities, net (4,282 ) 1,326 2,484 (2,357 ) 0 (5,608 ) NM (4,282 ) NM
Fees from covered call options 2,056 4,847 4,679 4,215 2,578 (2,791 ) (58 ) (522 ) (20 )
Trading gains (losses), net 70 677 (505 ) 728 106 (607 ) (90 ) (36 ) (34 )
Operating lease income, net 13,938 14,110 14,162 13,863 12,227 (172 ) (1 ) 1,711 14
Other:
Interest rate swap fees 3,392 2,828 4,021 2,913 2,711 564 20 681 25
BOLI 1,351 1,651 1,747 729 1,322 (300 ) (18 ) 29 2
Administrative services 1,322 1,217 1,329 1,336 1,319 105 9 3 0
Foreign currency remeasurement (losses) gains (145 ) (1,171 ) 1,150 (446 ) 543 1,026 (88 ) (688 ) NM
Changes in fair value on EBOs and loans held-for-investment 604 (439 ) 1,556 (338 ) (242 ) 1,043 NM 846 NM
Early pay-offs of capital leases 393 430 157 461 201 (37 ) (9 ) 192 96
Miscellaneous 22,365 37,815 14,819 16,233 14,818 (15,450 ) (41 ) 7,547 51
Total Other 29,282 42,331 24,779 20,888 20,672 (13,049 ) (31 ) 8,610 42
Total Non-Interest Income $ 121,147 $ 140,580 $ 100,829 $ 112,478 $ 113,030 $ (19,433 ) (14) % $ 8,117 7 %
Six Months Ended
Jun 30, Jun 30, $ %
(Dollars in thousands) 2024 2023 Change Change
Brokerage $ 11,144 $ 8,937 $ 2,207 25 %
Trust and asset management 59,084 54,866 4,218 8
Total wealth management 70,228 63,803 6,425 10
Mortgage banking 56,787 48,245 8,542 18
Service charges on deposit accounts 30,357 26,511 3,846 15
(Losses) gains on investment securities, net (2,956 ) 1,398 (4,354 ) NM
Fees from covered call options 6,903 12,969 (6,066 ) (47 )
Trading gains, net 747 919 (172 ) (19 )
Operating lease income, net 28,048 25,273 2,775 11
Other:
Interest rate swap fees 6,220 5,317 903 17
BOLI 3,002 2,673 329 12
Administrative services 2,539 2,934 (395 ) (13 )
Foreign currency remeasurement (losses) gains (1,316 ) 355 (1,671 ) NM
Changes in fair value on EBOs and loans held-for-investment 165 303 (138 ) (46 )
Early pay-offs of leases 823 566 257 45
Miscellaneous 60,180 29,533 30,647 NM
Total Other 71,613 41,681 29,932 72
Total Non-Interest Income $ 261,727 $ 220,799 $ 40,928 19 %

NM - Not meaningful.
BOLI - Bank-owned life insurance.

TABLE 16: MORTGAGE BANKING

Three Months Ended Six Months Ended
(Dollars in thousands) Jun 30,
2024 		Mar 31,
2024 		Dec 31,
2023 		Sep 30,
2023 		Jun 30,
2023 		Jun 30,
2024 		Jun 30,
2023
Originations:
Retail originations $ 544,394 $ 331,504 $ 315,637 $ 408,761 $ 406,888 $ 875,898 $ 663,025
Veterans First originations 177,792 144,109 123,564 163,856 171,158 321,901 287,362
Total originations for sale (A) $ 722,186 $ 475,613 $ 439,201 $ 572,617 $ 578,046 $ 1,197,799 $ 950,387
Originations for investment 275,331 169,246 124,974 137,622 184,795 444,577 315,975
Total originations $ 997,517 $ 644,859 $ 564,175 $ 710,239 $ 762,841 $ 1,642,376 $ 1,266,362
As a percentage of originations for sale:
Retail originations 75 % 70 % 72 % 71 % 70 % 73 % 70 %
Veterans First originations 25 30 28 29 30 27 30
Purchases 83 % 75 % 85 % 84 % 84 % 80 % 82 %
Refinances 17 25 15 16 16 20 18
Production Margin:
Production revenue (B) (1) $ 14,990 $ 13,435 $ 6,798 $ 13,766 $ 11,846 $ 28,425 $ 20,467
Total originations for sale (A) $ 722,186 $ 475,613 $ 439,201 $ 572,617 $ 578,046 $ 1,197,799 $ 950,387
Add: Current period end mandatory interest rate lock commitments to fund originations for sale (2) 222,738 207,775 119,624 150,713 196,246 222,738 196,246
Less: Prior period end mandatory interest rate lock commitments to fund originations for sale (2) 207,775 119,624 150,713 196,246 184,168 119,624 113,303
Total mortgage production volume (C) $ 737,149 $ 563,764 $ 408,112 $ 527,084 $ 590,124 $ 1,300,913 $ 1,033,330
Production margin (B / C) 2.03 % 2.38 % 1.67 % 2.61 % 2.01 % 2.19 % 1.98 %
Mortgage Servicing:
Loans serviced for others (D) $ 12,211,027 $ 12,051,392 $ 12,007,165 $ 11,885,531 $ 11,752,223
MSRs, at fair value (E) 204,610 201,044 192,456 210,524 200,692
Percentage of MSRs to loans serviced for others (E / D) 1.68 % 1.67 % 1.60 % 1.77 % 1.71 %
Servicing income $ 10,586 $ 10,498 $ 10,286 $ 10,191 $ 11,034 $ 21,084 $ 23,086
Components of MSR:
MSR - changes in fair value model assumptions $ 877 $ 7,595 $ (19,634 ) $ 4,723 $ 2,715 $ 8,472 $ (4,238 )
Changes in fair value of derivative contract held as an economic hedge, net (772 ) (2,577 ) 3,541 (2,481 ) (726 ) (3,349 ) 220
MSR valuation adjustment, net of changes in fair value of derivative contract held as an economic hedge $ 105 $ 5,018 $ (16,093 ) $ 2,242 $ 1,989 $ 5,123 $ (4,018 )
MSR - current period capitalization 8,223 5,379 5,077 9,706 8,720 13,602 13,827
MSR - collection of expected cash flows - paydowns (1,504 ) (1,444 ) (1,572 ) (1,492 ) (1,432 ) (2,948 ) (3,220 )
MSR - collection of expected cash flows - payoffs and repurchases (4,030 ) (2,942 ) (1,939 ) (3,105 ) (3,611 ) (6,972 ) (5,732 )
MSR Activity $ 2,794 $ 6,011 $ (14,527 ) $ 7,351 $ 5,666 $ 8,805 $ 857
Summary of Mortgage Banking Revenue:
Production revenue (1) $ 14,990 $ 13,435 $ 6,798 $ 13,766 $ 11,846 $ 28,425 $ 20,467
Servicing income 10,586 10,498 10,286 10,191 11,034 21,084 23,086
MSR activity 2,794 6,011 (14,527 ) 7,351 5,666 8,805 857
Changes in fair value of early buy-out loans guaranteed by U.S. government agencies 642 (2,190 ) 4,856 (4,245 ) 1,508 (1,548 ) 3,806
Other revenue 112 (91 ) 20 332 (73 ) 21 29
Total mortgage banking revenue $ 29,124 $ 27,663 $ 7,433 $ 27,395 $ 29,981 $ 56,787 $ 48,245
Changes in fair value on EBOs and loans held-for-investment $ 604 $ (439 ) $ 1,556 $ (338 ) $ (242 ) $ 165 $ 303

(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

Three Months Ended Q2 2024 compared to
Q1 2024 		Q2 2024 compared to
Q2 2023
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
(Dollars in thousands) 2024 2024 2023 2023 2023 $ Change % Change $ Change % Change
Salaries and employee benefits:
Salaries $ 113,860 $ 112,172 $ 111,484 $ 111,303 $ 107,671 $ 1,688 2 % $ 6,189 6 %
Commissions and incentive compensation 52,151 51,001 48,974 48,817 44,511 1,150 2 7,640 17
Benefits 32,530 32,000 33,513 32,218 32,741 530 2 (211 ) (1 )
Total salaries and employee benefits 198,541 195,173 193,971 192,338 184,923 3,368 2 13,618 7
Software and equipment 29,231 27,731 27,779 25,951 26,205 1,500 5 3,026 12
Operating lease equipment 10,834 10,683 10,694 12,020 9,816 151 1 1,018 10
Occupancy, net 19,585 19,086 18,102 21,304 19,176 499 3 409 2
Data processing 9,503 9,292 8,892 10,773 9,726 211 2 (223 ) (2 )
Advertising and marketing 17,436 13,040 17,166 18,169 17,794 4,396 34 (358 ) (2 )
Professional fees 9,967 9,553 8,768 8,887 8,940 414 4 1,027 11
Amortization of other acquisition-related intangible assets 1,122 1,158 1,356 1,408 1,499 (36 ) (3 ) (377 ) (25 )
FDIC insurance 10,429 9,381 9,303 9,748 9,008 1,048 11 1,421 16
FDIC insurance - special assessment - 5,156 34,374 - - (5,156 ) NM - NM
OREO expense, net (259 ) 392 (1,559 ) 120 118 (651 ) NM (377 ) NM
Other:
Lending expenses, net of deferred origination costs 5,335 5,078 5,330 4,777 7,890 257 5 (2,555 ) (32 )
Travel and entertainment 5,340 4,597 5,754 5,449 5,401 743 16 (61 ) (1 )
Miscellaneous 23,289 22,825 22,722 19,111 20,127 464 2 3,162 16
Total other 33,964 32,500 33,806 29,337 33,418 1,464 5 546 2
Total Non-Interest Expense $ 340,353 $ 333,145 $ 362,652 $ 330,055 $ 320,623 $ 7,208 2 % $ 19,730 6 %
Six Months Ended
Jun 30, Jun 30, $ %
(Dollars in thousands) 2024 2023 Change Change
Salaries and employee benefits:
Salaries $ 226,032 $ 216,025 $ 10,007 5 %
Commissions and incentive compensation 103,152 84,310 18,842 22
Benefits 64,530 61,369 3,161 5
Total salaries and employee benefits 393,714 361,704 32,010 9
Software and equipment 56,962 50,902 6,060 12
Operating lease equipment 21,517 19,649 1,868 10
Occupancy, net 38,671 37,662 1,009 3
Data processing 18,795 19,135 (340 ) (2 )
Advertising and marketing 30,476 29,740 736 2
Professional fees 19,520 17,103 2,417 14
Amortization of other acquisition-related intangible assets 2,280 2,734 (454 ) (17 )
FDIC insurance 19,810 17,677 2,133 12
FDIC insurance - special assessment 5,156 - 5,156 NM
OREO expense, net 133 (89 ) 222 NM
Other:
Lending expenses, net of deferred origination costs 10,413 10,989 (576 ) (5 )
Travel and entertainment 9,937 9,991 (54 ) (1 )
Miscellaneous 46,114 42,595 3,519 8
Total other 66,464 63,575 2,889 5
Total Non-Interest Expense $ 673,498 $ 619,792 $ 53,706 9 %

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.

Three Months Ended Six Months Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30,
(Dollars and shares in thousands) 2024 2024 2023 2023 2023 2024 2023
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:
(A) Interest Income (GAAP) $ 849,979 $ 805,513 $ 793,848 $ 762,400 $ 697,176 $ 1,655,492 $ 1,336,866
Taxable-equivalent adjustment:
- Loans 2,305 2,246 2,150 1,923 1,882 4,551 3,754
- Liquidity Management Assets 567 550 575 572 551 1,117 1,102
- Other Earning Assets 3 5 4 1 1 8 5
(B) Interest Income (non-GAAP) $ 852,854 $ 808,314 $ 796,577 $ 764,896 $ 699,610 $ 1,661,168 $ 1,341,727
(C) Interest Expense (GAAP) 379,369 341,319 323,874 300,042 249,639 720,688 431,334
(D) Net Interest Income (GAAP) (A minus C) $ 470,610 $ 464,194 $ 469,974 $ 462,358 $ 447,537 $ 934,804 $ 905,532
(E) Net Interest Income (non-GAAP) (B minus C) $ 473,485 $ 466,995 $ 472,703 $ 464,854 $ 449,971 $ 940,480 $ 910,393
Net interest margin (GAAP) 3.50 % 3.57 % 3.62 % 3.60 % 3.64 % 3.53 % 3.72 %
Net interest margin, fully taxable-equivalent (non-GAAP) 3.52 3.59 3.64 3.62 3.66 3.56 3.74
(F) Non-interest income $ 121,147 $ 140,580 $ 100,829 $ 112,478 $ 113,030 $ 261,727 $ 220,799
(G) (Losses) gains on investment securities, net (4,282 ) 1,326 2,484 (2,357 ) 0 (2,956 ) 1,398
(H) Non-interest expense 340,353 333,145 362,652 330,055 320,623 673,498 619,792
Efficiency ratio (H/(D+F-G)) 57.10 % 55.21 % 63.81 % 57.18 % 57.20 % 56.15 % 55.10 %
Efficiency ratio (non-GAAP) (H/(E+F-G)) 56.83 54.95 63.51 56.94 56.95 55.88 54.86
Three Months Ended Six Months Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30,
(Dollars and shares in thousands) 2024 2024 2023 2023 2023 2024 2023
Reconciliation of Non-GAAP Tangible Common Equity Ratio:
Total shareholders' equity (GAAP) $ 5,536,628 $ 5,436,400 $ 5,399,526 $ 5,015,613 $ 5,041,912
Less: Non-convertible preferred stock (GAAP) (412,500 ) (412,500 ) (412,500 ) (412,500 ) (412,500 )
Less: Intangible assets (GAAP) (676,562 ) (677,911 ) (679,561 ) (680,353 ) (682,327 )
(I) Total tangible common shareholders' equity (non-GAAP) $ 4,447,566 $ 4,345,989 $ 4,307,465 $ 3,922,760 $ 3,947,085
(J) Total assets (GAAP) $ 59,781,516 $ 57,576,933 $ 56,259,934 $ 55,555,246 $ 54,286,176
Less: Intangible assets (GAAP) (676,562 ) (677,911 ) (679,561 ) (680,353 ) (682,327 )
(K) Total tangible assets (non-GAAP) $ 59,104,954 $ 56,899,022 $ 55,580,373 $ 54,874,893 $ 53,603,849
Common equity to assets ratio (GAAP) (L/J) 8.6 % 8.7 % 8.9 % 8.3 % 8.5 %
Tangible common equity ratio (non-GAAP) (I/K) 7.5 7.6 7.7 7.1 7.4
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders' equity $ 5,536,628 $ 5,436,400 $ 5,399,526 $ 5,015,613 $ 5,041,912
Less: Preferred stock (412,500 ) (412,500 ) (412,500 ) (412,500 ) (412,500 )
(L) Total common equity $ 5,124,128 $ 5,023,900 $ 4,987,026 $ 4,603,113 $ 4,629,412
(M) Actual common shares outstanding 61,760 61,737 61,244 61,222 61,198
Book value per common share (L/M) $ 82.97 $ 81.38 $ 81.43 $ 75.19 $ 75.65
Tangible book value per common share (non-GAAP) (I/M) 72.01 70.40 70.33 64.07 64.50
Reconciliation of Non-GAAP Return on Average Tangible Common Equity:
(N) Net income applicable to common shares $ 145,397 $ 180,303 $ 116,489 $ 157,207 $ 147,759 $ 325,700 $ 320,966
Add: Intangible asset amortization 1,122 1,158 1,356 1,408 1,499 2,280 2,734
Less: Tax effect of intangible asset amortization (311 ) (291 ) (343 ) (380 ) (402 ) (602 ) (722 )
After-tax intangible asset amortization $ 811 $ 867 $ 1,013 $ 1,028 $ 1,097 $ 1,678 $ 2,012
(O) Tangible net income applicable to common shares (non-GAAP) $ 146,208 $ 181,170 $ 117,502 $ 158,235 $ 148,856 $ 327,378 $ 322,978
Total average shareholders' equity $ 5,450,173 $ 5,440,457 $ 5,066,196 $ 5,083,883 $ 5,044,718 $ 5,445,315 $ 4,970,407
Less: Average preferred stock (412,500 ) (412,500 ) (412,500 ) (412,500 ) (412,500 ) (412,500 ) (412,500 )
(P) Total average common shareholders' equity $ 5,037,673 $ 5,027,957 $ 4,653,696 $ 4,671,383 $ 4,632,218 $ 5,032,815 $ 4,557,907
Less: Average intangible assets (677,207 ) (678,731 ) (679,812 ) (681,520 ) (682,561 ) (677,969 ) (678,924 )
(Q) Total average tangible common shareholders' equity (non-GAAP) $ 4,360,466 $ 4,349,226 $ 3,973,884 $ 3,989,863 $ 3,949,657 $ 4,354,846 $ 3,878,983
Return on average common equity, annualized (N/P) 11.61 % 14.42 % 9.93 % 13.35 % 12.79 % 13.01 % 14.20 %
Return on average tangible common equity, annualized (non-GAAP) (O/Q) 13.49 16.75 11.73 15.73 15.12 15.12 16.79
Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:
Income before taxes $ 211,343 $ 249,956 $ 165,243 $ 224,858 $ 211,430 $ 461,299 $ 454,980
Add: Provision for credit losses 40,061 21,673 42,908 19,923 28,514 61,734 51,559
Pre-tax income, excluding provision for credit losses (non-GAAP) $ 251,404 $ 271,629 $ 208,151 $ 244,781 $ 239,944 $ 523,033 $ 506,539

WINTRUST SUBSIDIARIES AND LOCATIONS

Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select Market (Nasdaq: WTFC). Its 15 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. and Town Bank, N.A., in Hartland, Wisconsin.

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, 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, Willowbrook, Wilmette, Winnetka and Wood Dale, and in Wisconsin in Burlington, Clinton, Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva, Madison, Menomonee Falls, Milwaukee, Pewaukee, Racine, Wales, Walworth, Whitefish Bay and Wind Lake, and in Florida in Bonita Springs 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.
  • The Chicago 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;
  • 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; and
  • the severity, magnitude and duration of the COVID-19 pandemic, including the continued emergence of variant strains, and the direct and indirect impact of such pandemic, as well as responses to the pandemic by the government, businesses and consumers, on the economy, our financial results, operations and personnel, commercial activity and demand across our business and our customers' businesses.

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 Thursday, July 18, 2024 at 10:00 a.m. (CDT) regarding second quarter and year-to-date 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 June 28, 2024 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 second quarter and year-to-date 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


Source: Wintrust Financial Corporation