• Full-Year Net Income: $695 million, up over 11.5% from 2023.
• Fourth-Quarter Net Income: Approximately $185.4 million.
• Net Interest Income: Increased by $22.6 million from the prior quarter.
• Net Interest Margin: 3.51%, stable compared to the prior quarter.
• Loan Growth: $1 billion for the quarter, 8% annualized.
• Deposit Growth: $1.1 billion for the quarter, 9% annualized.
• Total Assets: Grew approximately $1.1 billion to $64.9 billion.
• Provision for Credit Losses: $17 million in the fourth quarter, down from $22.3 million in the prior quarter.
• Non-Interest Income: Stable at approximately $113 million for the quarter.
• Non-Interest Expenses: Totaled $368.5 million, up approximately $7.9 million from the third quarter.
• Non-Performing Loans: Decreased from 38 basis points to 36 basis points of total loans.
• Charge-Offs: $15.9 million or 13 basis points, down from $26.7 million or 23 basis points in Q3.
• CRE Office Exposure: $1.7 billion, 12.8% of total CRE portfolio, 3.5% of total loan portfolio.

• Warning! GuruFocus has detected 4 Warning Sign with WTFC.

Release Date: January 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Wintrust Financial Corp (NASDAQ:WTFC) reported record net income of $695 million for 2024, marking an 11.5% increase from 2023.
• The company achieved balanced growth in loans and deposits, each increasing by approximately $1 billion in the fourth quarter.
• Net interest income rose by 4.5% quarter over quarter and nearly 12% compared to the previous year's fourth quarter.
• Non-performing loans and charge-offs decreased relative to the previous quarter, indicating improved credit performance.
• WTFC's treasury management and wealth businesses continued to show steady growth, contributing to noninterest revenue expansion.

Negative Points

• The mortgage business remains relatively insignificant in terms of financial impact, with current activity muted.
• Acquisition-related costs and security losses were noted as uncommon items impacting the quarter's financials.
• There is increased competitive pressure in the market, particularly in the commercial real estate sector, affecting pricing and structure.
• Noninterest expenses increased by $7.9 million from the third quarter, partly due to acquisition-related costs and increased software expenses.
• The company faces challenges from a prolonged higher interest rate environment, particularly affecting commercial real estate valuations.

Q & A Highlights

Q: Can you discuss the competitive landscape and your expectations for loan growth in 2025? A: Richard Murphy, Vice Chairman and Chief Lending Officer, noted that while Wintrust has grown when others have not, there is increased competition, particularly in commercial real estate (CRE). The company remains committed to not chasing deals that don't meet their standards. They maintain their guidance for mid- to high single-digit loan growth, despite some headwinds.

Q: What is your outlook for the mortgage business given current interest rates? A: Timothy Crane, President and CEO, mentioned that while mortgage activity remains muted, a rate near 6% could stimulate activity. Inventory is improving, and they are hopeful for a spring pickup, but current rates around 7% are less favorable.

Q: How are you approaching expense management in 2025? A: David Dykstra, Vice Chairman and COO, emphasized that expense management is a good practice, and they plan to grow expenses at a mid-single-digit rate, which is less than their expected loan growth. They are investing in digital products and infrastructure to support growth.

Q: What is your strategy regarding mergers and acquisitions (M&A) and capital priorities? A: Timothy Crane stated that while they field calls and see increased enthusiasm post-election, they remain disciplined. They focus on organic growth and geographic expansion, such as in Rockford, Illinois. Capital is primarily used to support growth, and they are not currently considering buybacks.

Q: Can you provide insights into your deposit repricing and margin outlook? A: David Dykstra explained that the interest-bearing deposit beta is around 65-67%, with incremental deposits coming in at 3-4%. They expect the net interest margin to remain around 3.5% throughout 2025, supported by matched loan and deposit growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.