Wintrust Financial Corporation Reports Q3 2024 Results

Wintrust Financial (NASDAQ: WTFC) Corporation announced a net income of over $170 million for the third quarter, meeting expectations.

The acquisition of Macatawa Bank on August 1 contributed significantly to the company's growth, adding $1.3 billion in loans and $2.3 billion in deposits. The company reported a record net interest income of $503 million and has positive projections for 2024-2025.

Key Takeaways

• Net Income: Q3 net income exceeded $170 million; nearly $510 million year-to-date.
• Acquisition Impact: Added $1.3 billion in loans and $2.3 billion in deposits from Macatawa Bank.
• Net Interest Margin: Stable at 3.51%, with record net interest income of $503 million.
• Noninterest Income: Decreased to $113.1 million due to lower mortgage-related revenues.
• Noninterest Expenses: Rose to $360.7 million, mainly from acquisition-related costs, but improved as a percentage of average assets.
• Future Outlook: Expects positive valuation adjustment in Q4, due to rising mortgage rates, indicating strong future growth prospects.

Company Outlook

Wintrust anticipates continued growth in loans and deposits, aiming for consistent performance into 2025.

Bearish Highlights

• Noninterest income decreased to $113.1 million, affected by unfavorable mortgage servicing revenues.
• Noninterest expenses increased to $360.7 million due to acquisition costs.

Bullish Highlights

• Strong growth in loans ($2.4 billion) and deposits ($3.4 billion).
• Maintained a steady net interest margin, boosting net interest income.
• Positive expectations for growth in loan quality and tangible book value per share.

Misses

• Provision for credit losses was $22.3 million, including a one-time $15.5 million related to the acquisition.

Q&A Highlights

Management discussed the effects of rising interest rates on finance segment growth and the overall positive growth outlook.

• Credit Loss Provisions: Expected to align with mid to high single-digit growth.
• Stability: Deposit cost beta remains in the mid-60s during rate rises, indicating controlled competitive pricing strategies.
• Capital Ratios: Projected improvement with CET1 reaching around 10% by 2025.

The third-quarter performance of Wintrust Financial Corporation indicates resilient and strategic growth, particularly due to the Macatawa Bank acquisition, resulting in strong net interest income and a steady net interest margin. Despite a dip in noninterest income, the overall outlook remains optimistic, supported by solid loan and deposit growth.