WINTRUST FINANCIAL CORP [WTFC] Filings

10-Q 1 wtfc-20220331.htm 10-Q wtfc-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________

FORM 10-Q

_________________________________________


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35077

_____________________________________

WINTRUST FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)


Illinois			36-3873352
(State of incorporation or organization)			(I.R.S. Employer Identification No.)

9700 W. Higgins Road, Suite 800

Rosemont, Illinois 60018

(Address of principal executive offices)

(847) 939-9000

(Registrant’s telephone number, including area code)


Title of Each Class	Ticker Symbol	Name of Each Exchange on Which Registered
Common Stock, no par value	WTFC	The NASDAQ Global Select Market
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, no par value	WTFCM	The NASDAQ Global Select Market
Depositary Shares, Each Representing a 1/1,000th Interest in a Share of	WTFCP	The NASDAQ Global Select Market
6.875% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E, no par value

____________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

(Do not check if a smaller reporting company)

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock — no par value, 57,267,865 shares, as of April 29, 2022

Table of Contents

TABLE OF CONTENTS


		Page
	PART I. — FINANCIAL INFORMATION
ITEM 1.	Financial Statements	1
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	88
ITEM 4.	Controls and Procedures	90
	PART II. — OTHER INFORMATION
ITEM 1.	Legal Proceedings	91
ITEM 1A.	Risk Factors	92
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	92
ITEM 3.	Defaults Upon Senior Securities	NA
ITEM 4.	Mine Safety Disclosures	NA
ITEM 5.	Other Information	NA
ITEM 6.	Exhibits	93
	Signatures	94

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS


WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CONDITION
	(Unaudited)				(Unaudited)
(In thousands, except share data)	March 31, 2022		December 31, 2021		March 31, 2021
Assets
Cash and due from banks	$	462,516	$	411,150	$	426,325
Federal funds sold and securities purchased under resale agreements	700,056		700,055		52
Interest-bearing deposits with banks	4,013,597		5,372,603		3,348,794
Available-for-sale securities, at fair value	2,998,898		2,327,793		2,430,749
Held-to-maturity securities, at amortized cost, net of allowance for credit losses of $159, $78 and $99 at March 31, 2022, December 31, 2021 and March 31, 2021, respectively ($3.1 billion, $2.9 billion and $2.1 billion fair value at March 31, 2022, December 31, 2021 and March 31, 2021, respectively)	3,435,729		2,942,285		2,166,419
Trading account securities	852		1,061		951
Equity securities with readily determinable fair value	92,689		90,511		90,338
Federal Home Loan Bank and Federal Reserve Bank stock	136,163		135,378		135,881
Brokerage customer receivables	22,888		26,068		19,056
Mortgage loans held-for-sale, at fair value	606,545		817,912		1,260,193




Loans, net of unearned income	35,280,547		34,789,104		33,171,233
Allowance for loan losses	(250,539)		(247,835)		(277,709)


Net loans	35,030,008		34,541,269		32,893,524
Premises, software and equipment, net	761,213		766,405		760,522
Lease investments, net	240,656		242,082		238,984


Accrued interest receivable and other assets	1,066,750		1,084,115		1,230,362


Goodwill	655,402		655,149		646,017
Other acquisition-related intangible assets	26,699		28,307		34,035
Total assets	$	50,250,661	$	50,142,143	$	45,682,202

Liabilities and Shareholders’ Equity
Deposits:
Non-interest-bearing	$	13,748,918	$	14,179,980	$	12,297,337
Interest-bearing	28,470,404		27,915,605		25,575,315
Total deposits	42,219,322		42,095,585		37,872,652


Federal Home Loan Bank advances	1,241,071		1,241,071		1,228,436

Other borrowings	482,516		494,136		516,877

Subordinated notes	437,033		436,938		436,595
Junior subordinated debentures	253,566		253,566		253,566
Trade date securities payable	437		—		995
Accrued interest payable and other liabilities	1,124,460		1,122,159		1,120,570



Total liabilities	45,758,405		45,643,455		41,429,691
Shareholders’ Equity:
Preferred stock, no par value; 20,000,000 shares authorized:


Series D - $25 liquidation value; 5,000,000 shares issued and outstanding at March 31, 2022, December 31, 2021 and March 31, 2021	125,000		125,000		125,000
Series E - $25,000 liquidation value; 11,500 shares issued and outstanding at March 31, 2022, December 31, 2021 and March 31, 2021	287,500		287,500		287,500
Common stock, no par value; $1.00 stated value; 100,000,000 shares authorized at March 31, 2022, December 31, 2021 and March 31, 2021; 59,090,903 shares issued at March 31, 2022, 58,891,780 shares issued at December 31, 2021 and 58,726,900 shares issued at March 31, 2021	59,091		58,892		58,727
Surplus	1,698,093		1,685,572		1,663,008
Treasury stock, at cost, 1,837,689 shares at March 31, 2022, 1,837,689 shares at December 31, 2021, and 1,703,627 shares at March 31, 2021	(109,903)		(109,903)		(100,363)
Retained earnings	2,548,474		2,447,535		2,208,535
Accumulated other comprehensive (loss) income	(115,999)		4,092		10,104
Total shareholders’ equity	4,492,256		4,498,688		4,252,511
Total liabilities and shareholders’ equity	$	50,250,661	$	50,142,143	$	45,682,202

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


	Three Months Ended
(In thousands, except per share data)	March 31, 2022		March 31, 2021
Interest income
Interest and fees on loans	$	285,698	$	274,100
Mortgage loans held-for-sale	6,087		9,036
Interest-bearing deposits with banks	1,687		1,199
Federal funds sold and securities purchased under resale agreements	431		—
Investment securities	32,398		19,264
Trading account securities	5		2
Federal Home Loan Bank and Federal Reserve Bank stock	1,772		1,745
Brokerage customer receivables	174		123
Total interest income	328,252		305,469
Interest expense
Interest on deposits	14,854		27,944
Interest on Federal Home Loan Bank advances	4,816		4,840
Interest on other borrowings	2,239		2,609
Interest on subordinated notes	5,482		5,477
Interest on junior subordinated debentures	1,567		2,704
Total interest expense	28,958		43,574
Net interest income	299,294		261,895
Provision for credit losses	4,106		(45,347)
Net interest income after provision for credit losses	295,188		307,242
Non-interest income
Wealth management	31,394		29,309
Mortgage banking	77,231		113,494
Service charges on deposit accounts	15,283		12,036
(Losses) gains on investment securities, net	(2,782)		1,154
Fees from covered call options	3,742		—
Trading gains, net	3,889		419
Operating lease income, net	15,475		14,440
Other	18,558		15,654
Total non-interest income	162,790		186,506
Non-interest expense
Salaries and employee benefits	172,355		180,809
Software and equipment	22,810		20,912
Operating lease equipment depreciation	9,708		10,771
Occupancy, net	17,824		19,996
Data processing	7,505		6,048
Advertising and marketing	11,924		8,546
Professional fees	8,401		7,587
Amortization of other acquisition-related intangible assets	1,609		2,007
FDIC insurance	7,729		6,558
Other real estate owned expense, net	(1,032)		(251)
Other	25,465		23,906
Total non-interest expense	284,298		286,889
Income before taxes	173,680		206,859
Income tax expense	46,289		53,711
Net income	$	127,391	$	153,148
Preferred stock dividends	6,991		6,991
Net income applicable to common shares	$	120,400	$	146,157
Net income per common share—Basic	$	2.11	$	2.57
Net income per common share—Diluted	$	2.07	$	2.54
Cash dividends declared per common share	$	0.34	$	0.31
Weighted average common shares outstanding	57,196		56,904
Dilutive potential common shares	862		681
Average common shares and dilutive common shares	58,058		57,585

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended
(In thousands)	March 31, 2022		March 31, 2021
Net income	$	127,391	$	153,148
Unrealized losses on available-for-sale securities
Before tax	(206,017)		(60,726)
Tax effect	54,903		16,207
Net of tax	(151,114)		(44,519)
Reclassification of net gains on available-for-sale securities included in net income
Before tax	250		210
Tax effect	(67)		(56)
Net of tax	183		154
Reclassification of amortization of unrealized gains on investment securities transferred to held-to-maturity from available-for-sale
Before tax	42		57
Tax effect	(11)		(15)
Net of tax	31		42
Net unrealized losses on available-for-sale securities	(151,328)		(44,715)
Unrealized gains on derivative instruments
Before tax	39,481		50,792
Tax effect	(10,532)		(13,535)
Net unrealized gains on derivative instruments	28,949		37,257
Foreign currency adjustment
Before tax	2,842		2,734
Tax effect	(554)		(554)
Net foreign currency adjustment	2,288		2,180
Total other comprehensive loss	(120,091)		(5,278)
Comprehensive income	$	7,300	$	147,870

See accompanying notes to unaudited consolidated financial statements.

Table of Contents


WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(In thousands, except per share data)	Preferred stock		Common stock		Surplus		Treasury stock		Retained earnings		Accumulated other comprehensive income (loss)		Total shareholders’ equity
Balance at January 1, 2021	$	412,500	$	58,473	$	1,649,990	$	(100,363)	$	2,080,013	$	15,382	$	4,115,995

Net income	—		—		—		—		153,148		—		153,148
Other comprehensive loss, net of tax	—		—		—		—		—		(5,278)		(5,278)
Cash dividends declared on common stock, $0.31 per share	—		—		—		—		(17,635)		—		(17,635)
Dividends on Series D preferred stock, $0.41 per share and Series E preferred stock, $429.69 per share	—		—		—		—		(6,991)		—		(6,991)

Stock-based compensation	—		—		2,862		—		—		—		2,862

Common stock issued for:

Exercise of stock options and warrants	—		209		8,752		—		—		—		8,961
Restricted stock awards	—		7		(7)		—		—		—		—
Employee stock purchase plan	—		14		801		—		—		—		815
Director compensation plan	—		24		610		—		—		—		634
Balance at March 31, 2021	$	412,500	$	58,727	$	1,663,008	$	(100,363)	$	2,208,535	$	10,104	$	4,252,511


















Balance at January 1, 2022	$	412,500	$	58,892	$	1,685,572	$	(109,903)	$	2,447,535	$	4,092	$	4,498,688
Net income	—		—		—		—		127,391		—		127,391
Other comprehensive loss, net of tax	—		—		—		—		—		(120,091)		(120,091)
Cash dividends declared on common stock, $0.34 per share	—		—		—		—		(19,461)		—		(19,461)
Dividends on Series D preferred stock, $0.41 per share and Series E preferred stock, $429.69 per share	—		—		—		—		(6,991)		—		(6,991)


Stock-based compensation	—		—		7,891		—		—		—		7,891

Common stock issued for:
Exercise of stock options and warrants	—		79		3,279		—		—		—		3,358
Restricted stock awards	—		52		(52)		—		—		—		—
Employee stock purchase plan	—		10		832		—		—		—		842
Director compensation plan	—		58		571		—		—		—		629
Balance at March 31, 2022	$	412,500	$	59,091	$	1,698,093	$	(109,903)	$	2,548,474	$	(115,999)	$	4,492,256

WINTRUST FINANCIAL CORP [WTFC] Filings
WINTRUST FINANCIAL CORP [WTFCM] Filings
WINTRUST FINANCIAL CORP [WTFCP] Filings
10-Q	[2022-05-06]
10-K	[2022-02-25]
10-Q	[2021-11-08]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-02-26]
10-Q	[2020-11-06]
10-Q	[2020-08-07]
10-Q	[2020-05-05]
10-K	[2020-02-28]
10-Q	[2019-11-08]
10-Q	[2019-08-09]
10-Q	[2019-05-09]
10-K	[2019-02-28]
10-Q	[2018-11-09]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-02-28]
10-Q	[2017-11-08]
10-Q	[2017-08-08]
10-Q	[2017-05-09]
10-K	[2017-02-28]
10-Q	[2016-11-08]
10-Q	[2016-08-08]
10-Q	[2016-05-09]
10-K	[2016-02-29]
10-Q	[2015-11-09]
10-Q	[2015-08-10]
10-Q	[2015-05-08]
10-K	[2015-02-27]
10-Q	[2014-11-07]
10-Q	[2014-08-08]
10-Q	[2014-05-08]
10-K	[2014-02-28]
10-Q	[2013-11-07]
10-Q	[2013-08-08]
10-Q	[2013-05-09]
10-K	[2013-02-28]
10-Q	[2012-11-08]
10-Q	[2012-08-09]
10-Q	[2012-05-09]
10-K	[2012-02-29]

WINTRUST FINANCIAL CORP [WTFC] Filings

WINTRUST FINANCIAL CORP [WTFCM] Filings

WINTRUST FINANCIAL CORP [WTFCP] Filings