On Tuesday, Wintrust Financial (NASDAQ:WTFC) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Wintrust Financial reported a fifth consecutive quarter of record net income, achieving $227 million, up from $223 million last quarter.
The company saw an 8% annualized increase in deposits and a 7% rise in loan growth, with net interest margin holding at 3.56%.
Non-interest income grew, led by wealth management, while expenses were well-managed and credit quality remained stable.
Strategic priorities include exceptional customer service, disciplined growth, and prudent risk management, with plans to open several new branches and invest in digital capabilities.
Future outlook anticipates strong loan growth in Q2, particularly in the property and casualty premium finance business, with an expectation of mid to high single-digit loan growth for the year.
Full Transcript
OPERATOR
Welcome to Wintrust Financial Corporation’s first quarter 2026 earnings conference call. A review of the results will be made by Tim Crain, President and Chief Executive Officer David Dykstra, Vice Chairman and Chief Operating Officer and Richard Murphy, Vice Chairman and Chief Lending Officer. As part of their reviews, the presenters may make reference to both earnings press release and the earnings release presentation. Following their presentations, there will be a formal question and answer session. During the course of today’s call, Wintrust Management may make statements that constitute projections, expectations, beliefs or similar forward looking statements. Actual results could differ materially from the results anticipated or projected in any such forward looking statements. The company’s forward looking assumptions that could cause the actual results to differ materially from the information discussed during this call are detailed in our earnings Press release and in the Company’s Most recent form, 10-K. Also, our remarks may reference certain non-GAAP financial measures. Our earnings press release and earnings release presentation include a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure. As a reminder, this conference call is being recorded. I will now turn the conference call over to Mr. Tim Crane.
Tim Crane
Good morning and thank you for joining us for Wintrust first quarter 2026 earnings call. In addition to the introductions that Latif made, I’m joined by our Chief Financial Officer Dave Starr, our Chief Legal Officer Kate Boge. We’ll follow our usual format this morning. I’ll begin with a few highlights, Dave Dykstra will review the financial results, Rich will share some thoughts on loan activity and credit quality, and I’ll be back with some closing thoughts, including a look at expectations for the second quarter and generally for the remainder of the year. As always, we’ll be happy to take your questions. Before we begin, I would like to bring your attention to some changes to the presentation document that accompanies the release of our result. We’ve modified the design, making some updates to how we present the data based on valuable feedback we’ve received from many of you. We hope you find the format helpful and informative as we continue to try and provide clear information that highlights our strong market position and our disciplined operating approach. Looking at the first quarter 2026 results, I’m very pleased that we delivered a fifth consecutive quarter of record net income. Overall, it was a very solid and straightforward quarter. We continue to focus on our strategic priorities of providing an exceptional customer experience, delivering disciplined and strategic growth across our businesses with a focus on prudent risk management and investing to build upon our foundation to drive a successful future that said. Despite two fewer days in the quarter, we achieved net income of $227 million, up from $223 million last quarter and $189 million in the first quarter of 2025. While Dave and Rich will provide more detail. In summary, net interest income, net interest margin and both loan and deposit growth were in line with our expectations. We delivered solid growth in non interest income led by our wealth management business expenses were well managed and credit quality remained stable. I would highlight that all of our growth is organic. We continue to see good new customer acquisition and market momentum and as our clients appreciate our differentiated approach and relentless focus on customer service. In fact, during the quarter we were recognized Once Again by J.D. power for Illinois Banking Services and by Coalition Greenwich with multiple awards for our commercial middle market banking services. These awards are evidence of our continued success in delivering for our clients in ways that many of our competitors cannot Overall, a Solid quarter. Let me turn it over to Dave. Great.
Dave Dykstra
Thanks Tim. Let me start with the balance sheet. Specifically, deposit growth was right at $1.2 billion during the quarter, representing an 8% increase over the prior quarter on an annualized basis. This deposit growth helped to Fund continued solid first quarter loan growth of approximately $1 billion, representing a 7% growth rate on an annualized basis. Yields and rates on the major balance sheet categories were slightly lower because of the recent market declines in short term interest rates, with loan yields moving down 13 basis points in the first quarter from the prior quarter, while interest bearing deposit costs declined 16 basis points from the prior quarter, thus resulting in a slightly improved gross spread. I’d like to note that loan growth during the quarter was heavily back end loaded and accordingly, period end loans are approximately $1.2 billion higher than average loans for the first quarter. That’s giving us a great start on achieving higher average earning assets in the second quarter of 2026. Turning to the income statement, this was a very solid operating quarter producing record levels of quarterly net income. Net interest income declined slightly compared to the fourth quarter of 2025. The benefit to net interest income from an increase of $555 million in average earning asset growth and and a 2 basis point increase in the net interest margin was almost enough to offset having two fewer days in the quarter. The net interest margin was 3.56% for the first quarter and the two fewer days in the quarter positively impacted net interest margin by 2 basis points. The net interest margin has ranged from 3.50 to 3.59% during the last nine quarters, exhibiting sustainability over at an interest margin. The provision for credit losses was relatively consistent with prior quarters remaining in the 20 to 30 million dollars range experienced in all the quarterly periods of 2025. As the overall credit environment our asset quality has remained stable as we enter 2026. Regarding other non interest income and non interest expense sections, total non interest income amounted to $134.1 million in the first quarter, which was an increase from the $130.4 million recorded in the prior quarter. The increase was primarily a result of strong wealth management and operating lease revenues. Mortgage banking activity continued to be subdued and production related volumes and revenue were essentially unchanged from the prior quarter as the non interest expense categories. Total non interest expenses for $382.6 million in the first quarter, which was slightly lower than the $384.5 million recorded in the prior quarter. Increases in salaries and employee benefits were primarily due to annual merit increases that were offset by lower OREO expenses, travel and entertainment and various other small expense decreases. Overall expenses were very well controlled. Additionally, both the quarterly net overhead ratio and efficiency ratio improved slightly relative to the priority prior quarter. In summary, I’ll reiterate this was a very solid quarter. The company accomplished good loan and deposit growth, a stable net interest margin, a record level of net income, sustained growth and tangible book value per share and a continued low level of non performing assets. So with that I’ll conclude my comments and turn it over to Rich Murphy to discuss credit.
Rich Murphy (Vice Chairman and Chief Lending Officer)
Thanks Dave. As detailed on Slide 6 of the Investor presentation, the solid loan growth of approximately $966 million or 7% on an annualized basis was broad based. Commercial loans grew by 719 million, including growth in mortgage warehouse of approximately 286 million. Commercial real estate loans grew by 222 million. The Wintrust Life Finance team continued to build their portfolio by 173 million and our residential mortgage group also had a very solid quarter. From a credit quality perspective as detailed on Slide 14, we continue to see strong credit performance across the portfolio. This can be seen in a number of metrics. Non performing loans decreased slightly from 1.85.8 million or 0.35% of total loans to 182.8% or 182.8 or 34% of total loans and remain at very manageable levels. Charge offs for the quarter were 14 basis points down from 17 basis points in the prior quarter. We believe that the level of non-performing loans (NPLs) and charge offs in the first quarter reflect a stable credit environment as evidenced by the chart of historical non performing asset levels on slide 15 and the consistent level of our special mention and substandard loans on slide 14. This quarter is another example of our commitment to identify problems early and charging them down where appropriate. Our goal, as always, is to stay ahead of any credit challenges. Turning to Slide 21, I want to briefly highlight our exposure to non depository financial institutions which totals approximately $3.2 billion or about 6% of our overall loan portfolio. Importantly, the majority of this exposure is in areas where we have long standing experience and strong performance. Of our 3.2 billion exposure, approximately 1.8 billion is tied to our mortgage warehouse business, a line of business we’ve been into for over 30 years with deep client relationships, robust operating systems and well established risk management practices. In addition, about $341 million consists of capital call facilities which are structured with strong underlying investor support and have historically demonstrated very favorable credit characteristics. The balance of the portfolio is broadly diversified across a granular group of relationships with leasing companies, Canadian captive finance companies, associated with commercial borrowers, insurance carriers and broker dealers. Overall, we view this portfolio as well diversified and aligned with our disciplined approach to specialty finance focused on areas where we have expertise, strong structures and a track record of consistent performance. Also, as noted in the last few earnings calls, we continue to be highly focused on our exposure to commercial real estate loans which comprise roughly one quarter of our total loan portfolio. As detailed on Slide 18, we continue to see signs of stabilization during the first quarter as commercial real estate (CRE) non-performing loans (NPLs) remained at very low levels, decreasing from 0.18% to 0.12% and commercial real estate (CRE) charge offs continue to remain at historically low levels. On slide 24, we continue to provide enhanced detail on our commercial real estate (CRE) office exposure. Currently, this portfolio remains steady at 1.7 billion or 11.7% of our total commercial real estate (CRE) portfolio and only 3.1% of our total loan portfolio. We monitor this portfolio very closely and we will continue to perform deep dive analysis on a quarterly basis. The most recent deep dive analysis showed very consistent results when compared to prior quarters. Finally, as we have discussed on previous calls, our team stayed very close contact with our customers and those conversations continue to reflect measured optimism around the business climate. That concludes my comments on credit and I’ll turn it back to Tim.
Tim Crane
Great, thank you Rich. At the beginning of the call I briefly mentioned our three strategic priorities delivering exceptional customer service, generating disciplined and strategic growth across our businesses with prudent risk management, and I would add through all market cycles and investing in our foundation and the future of our bank. I want to spend just one minute on the first one. Whether high tech or high touch, we offer a more personalized level of service than our larger bank or money center bank competitors, and relative to our smaller competitors, we offer more tools and sophistication to meet their needs. As a result, we occupy a unique and advantaged position in what we believe to be attractive markets and in attractive businesses. In the second half of the year, we will open several branches to continue to expand market share and to build franchise value in key communities. We will also supplement that with combined continued investment in the digital capabilities that provide flexibility and convenience for our customers. For us, it’s all about the customer and this unwavering focus is largely what has led to the consistent results we have delivered. So what does this mean for the second quarter and to a degree for the remainder of the year? We expect outsized loan growth in the second quarter largely from our property and casualty premium finance business which is seasonally very strong in Q2. Longer term, our pipelines are solid and we expect to deliver mid to high single digit loan growth for the remainder of the year. Combined with the stable margin Dave mentioned earlier at around 3.5%, we expect solid net interest income growth in the coming quarters. As always, we will work hard to fund our loan growth with a similar level of deposit growth, expanding our base of deposit clients and building franchise value expenses will be seasonally higher in Q2 as a result …
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