Jackson Singleton

Jackson Singleton asked about the total cumulative interest-bearing deposit beta expectation underpinning Wintrust's stable NIM guidance, noting a historical beta around 65% versus 55% at the end of Q3. He also inquired about the outlook for Premium Finance P&C growth, which has shown strong performance this year.

Answer

Timothy Crane, President and Chief Executive Officer, confirmed that a mid-60s deposit beta is still considered appropriate. He noted that Wintrust's interest-bearing deposit costs are higher than some peers, providing more room to reduce costs if rates decline further, thus supporting the 3.50% NIM. Richard Murphy, Vice Chairman and Chief Lending Officer, expressed continued bullishness on P&C premium finance, citing consistent market share gains and account growth over the past five years, with the market remaining firm.

Jackson Singleton, on behalf of Casey Haire from Autonomous Research, asked for the specific drivers that could lead to a net interest margin (NIM) increase in the third quarter and for expectations on deposit beta performance going forward.

Answer

CFO Harold Carpenter explained that potential NIM upside in Q3 would be driven by continued lift from fixed-rate loan repricing and stable non-interest-bearing deposit balances. He stated that while there is always room for improvement, he does not anticipate significant changes in deposit betas in the near term. However, a Fed rate decrease would be the key catalyst to more aggressively lower deposit costs.

Jackson Singleton, on behalf of Casey Haire from Autonomous Research, asked for more color on the drivers behind the potential Net Interest Margin (NIM) increase in Q3 and for expectations on deposit beta performance going forward.

Answer

CFO Harold Carpenter attributed the stable-to-upwardly biased NIM outlook to continued fixed-rate loan repricing and the stability of non-interest-bearing deposits. He noted that he does not expect significant changes in deposit betas until the Federal Reserve enacts a rate cut, which would create an opportunity to reprice deposits lower.

Jackson Singleton from Autonomous Research asked for more color on the drivers of the Net Interest Margin (NIM) and what could lead to an increase in Q3. He also inquired about expectations for deposit betas going forward.

Answer

CFO Harold Carpenter explained that potential NIM stability or a slight upward bias in Q3 would be driven by ongoing fixed-rate loan repricing and stable non-interest-bearing deposit balances. He noted that deposit betas are expected to remain stable in the near term and that a rate decrease from the Federal Reserve would be the primary catalyst needed to meaningfully lower deposit costs.