WINTRUST FINANCIAL CORP [WTFCM] Filings

10-Q 1 wtfc-20230331.htm 10-Q wtfc-20230331

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, 2023


☐			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, 61,192,818 shares, as of April 28, 2023

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	44
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	68
ITEM 4.	Controls and Procedures	69
	PART II. — OTHER INFORMATION
ITEM 1.	Legal Proceedings	70
ITEM 1A.	Risk Factors	71
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
ITEM 3.	Defaults Upon Senior Securities	NA
ITEM 4.	Mine Safety Disclosures	NA
ITEM 5.	Other Information	71
ITEM 6.	Exhibits	72
	Signatures	73

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, 2023		December 31, 2022		March 31, 2022
Assets
Cash and due from banks	$	445,928	$	490,908	$	462,516
Federal funds sold and securities purchased under resale agreements	58		58		700,056
Interest-bearing deposits with banks	1,563,578		1,988,719		4,013,597
Available-for-sale securities, at fair value	3,259,845		3,243,017		2,998,898
Held-to-maturity securities, at amortized cost, net of allowance for credit losses of $463, $488 and $159 at March 31, 2023, December 31, 2022 and March 31, 2022, respectively ($3.0 billion, $2.9 billion and $3.1 billion fair value at March 31, 2023, December 31, 2022 and March 31, 2022, respectively)	3,606,391		3,640,567		3,435,729
Trading account securities	102		1,127		852
Equity securities with readily determinable fair value	111,943		110,365		92,689
Federal Home Loan Bank and Federal Reserve Bank stock	244,957		224,759		136,163
Brokerage customer receivables	16,042		16,387		22,888
Mortgage loans held-for-sale, at fair value	302,493		299,935		606,545




Loans, net of unearned income	39,565,471		39,196,485		35,280,547
Allowance for loan losses	(287,972)		(270,173)		(250,539)


Net loans	39,277,499		38,926,312		35,030,008
Premises, software and equipment, net	760,283		764,798		761,213
Lease investments, net	256,301		253,928		240,656


Accrued interest receivable and other assets	1,413,795		1,391,342		1,066,750
Trade date securities receivable	939,758		921,717		—

Goodwill	653,587		653,524		655,402
Other acquisition-related intangible assets	20,951		22,186		26,699
Total assets	$	52,873,511	$	52,949,649	$	50,250,661

Liabilities and Shareholders’ Equity
Deposits:
Non-interest-bearing	$	11,236,083	$	12,668,160	$	13,748,918
Interest-bearing	31,482,128		30,234,384		28,470,404
Total deposits	42,718,211		42,902,544		42,219,322


Federal Home Loan Bank advances	2,316,071		2,316,071		1,241,071

Other borrowings	583,548		596,614		482,516

Subordinated notes	437,493		437,392		437,033
Junior subordinated debentures	253,566		253,566		253,566
Trade date securities payable	—		—		437
Accrued interest payable and other liabilities	1,549,116		1,646,624		1,124,460



Total liabilities	47,858,005		48,152,811		45,758,405
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, 2023, December 31, 2022 and March 31, 2022	125,000		125,000		125,000
Series E - $25,000 liquidation value; 11,500 shares issued and outstanding at March 31, 2023, December 31, 2022 and March 31, 2022	287,500		287,500		287,500
Common stock, no par value; $1.00 stated value; 100,000,000 shares authorized at March 31, 2023, December 31, 2022 and March 31, 2022; 61,197,979 shares issued at March 31, 2023, 60,797,270 shares issued at December 31, 2022 and 59,090,903 shares issued at March 31, 2022	61,198		60,797		59,091
Surplus	1,913,947		1,902,474		1,698,093
Treasury stock, at cost, 21,564 shares at March 31, 2023, 3,262 shares at December 31, 2022, and 1,837,689 shares at March 31, 2022	(1,966)		(304)		(109,903)
Retained earnings	2,997,263		2,849,007		2,548,474
Accumulated other comprehensive loss	(367,436)		(427,636)		(115,999)
Total shareholders’ equity	5,015,506		4,796,838		4,492,256
Total liabilities and shareholders’ equity	$	52,873,511	$	52,949,649	$	50,250,661

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, 2023		March 31, 2022
Interest income
Interest and fees on loans	$	558,692	$	285,698
Mortgage loans held-for-sale	3,528		6,087
Interest-bearing deposits with banks	13,468		1,687
Federal funds sold and securities purchased under resale agreements	70		431
Investment securities	59,943		32,398
Trading account securities	14		5
Federal Home Loan Bank and Federal Reserve Bank stock	3,680		1,772
Brokerage customer receivables	295		174
Total interest income	639,690		328,252
Interest expense
Interest on deposits	144,802		14,854
Interest on Federal Home Loan Bank advances	19,135		4,816
Interest on other borrowings	7,854		2,239
Interest on subordinated notes	5,488		5,482
Interest on junior subordinated debentures	4,416		1,567
Total interest expense	181,695		28,958
Net interest income	457,995		299,294
Provision for credit losses	23,045		4,106
Net interest income after provision for credit losses	434,950		295,188
Non-interest income
Wealth management	29,945		31,394
Mortgage banking	18,264		77,231
Service charges on deposit accounts	12,903		15,283
Gains (losses) on investment securities, net	1,398		(2,782)
Fees from covered call options	10,391		3,742
Trading gains, net	813		3,889
Operating lease income, net	13,046		15,475
Other	21,009		18,558
Total non-interest income	107,769		162,790
Non-interest expense
Salaries and employee benefits	176,781		172,355
Software and equipment	24,697		22,810
Operating lease equipment	9,833		9,708
Occupancy, net	18,486		17,824
Data processing	9,409		7,505
Advertising and marketing	11,946		11,924
Professional fees	8,163		8,401
Amortization of other acquisition-related intangible assets	1,235		1,609
FDIC insurance	8,669		7,729
Other real estate owned expense, net	(207)		(1,032)
Other	30,157		25,465
Total non-interest expense	299,169		284,298
Income before taxes	243,550		173,680
Income tax expense	63,352		46,289
Net income	$	180,198	$	127,391
Preferred stock dividends	6,991		6,991
Net income applicable to common shares	$	173,207	$	120,400
Net income per common share—Basic	$	2.84	$	2.11
Net income per common share—Diluted	$	2.80	$	2.07
Cash dividends declared per common share	$	0.40	$	0.34
Weighted average common shares outstanding	60,950		57,196
Dilutive potential common shares	873		862
Average common shares and dilutive common shares	61,823		58,058

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, 2023		March 31, 2022
Net income	$	180,198	$	127,391
Unrealized gains (losses) on available-for-sale securities
Before tax	47,040		(206,017)
Tax effect	(12,537)		54,903
Net of tax	34,503		(151,114)
Reclassification of net gains on available-for-sale securities included in net income
Before tax	560		250
Tax effect	(151)		(67)
Net of tax	409		183
Reclassification of amortization of unrealized gains on investment securities transferred to held-to-maturity from available-for-sale
Before tax	43		42
Tax effect	(11)		(11)
Net of tax	32		31
Net unrealized gains (losses) on available-for-sale securities	34,062		(151,328)
Unrealized gains on derivative instruments
Before tax	34,666		39,481
Tax effect	(9,238)		(10,532)
Net unrealized gains on derivative instruments	25,428		28,949
Foreign currency adjustment
Before tax	890		2,842
Tax effect	(180)		(554)
Net foreign currency adjustment	710		2,288
Total other comprehensive income (loss)	60,200		(120,091)
Comprehensive income	$	240,398	$	7,300

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, 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


















Balance at January 1, 2023	$	412,500	$	60,797	$	1,902,474	$	(304)	$	2,849,007	$	(427,636)	$	4,796,838
Cumulative effect adjustment from the adoption of ASU 2022-02	—		—		—		—		(544)		—		(544)
Net income	—		—		—		—		180,198		—		180,198
Other comprehensive income, net of tax	—		—		—		—		—		60,200		60,200
Cash dividends declared on common stock, $0.40 per share	—		—		—		—		(24,407)		—		(24,407)
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	—		—		8,295		—		—		—		8,295

Common stock issued for:

Exercise of stock options and warrants	—		54		2,162		—		—		—		2,216
Restricted stock awards	—		275		(275)		(1,662)		—		—		(1,662)
Employee stock purchase plan	—		9		685		—		—		—		694
Director compensation plan	—		63		606		—		—		—		669
Balance at March 31, 2023	$	412,500	$	61,198	$

WINTRUST FINANCIAL CORP [WTFCM] Filings
WINTRUST FINANCIAL CORP [WTFC] Filings
WINTRUST FINANCIAL CORP [WTFCP] Filings
10-Q	[2023-05-09]
10-K	[2023-02-28]
10-Q	[2022-11-08]
10-Q	[2022-08-08]
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 [WTFCM] Filings

WINTRUST FINANCIAL CORP [WTFC] Filings

WINTRUST FINANCIAL CORP [WTFCP] Filings