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WINTRUST FINANCIAL CORP (WTFC)·Q1 2025 Earnings Summary

Executive Summary

  • EPS beat and revenue mixed vs consensus: Q1 2025 diluted EPS was $2.69, above S&P Global consensus $2.49 (+$0.20, +8.1%); S&P’s revenue printed $618.4M vs $643.5M consensus (−$25.1M, −3.9%), while company-reported net revenue was $643.1M .
  • Margin and NII strength: Net interest margin rose 5 bps to 3.56% (FTE) and record net interest income reached $526.5M, despite two fewer days in the quarter .
  • Balance-sheet growth: Loans +$653M (6% annualized) and deposits +$1.1B (8% annualized); L/D ratio ended at 90.9% and noninterest-bearing deposits remained ~21% of total .
  • Guidance tone: Management expects stable margin and continued NII growth with strong Q2 loan growth led by premium finance; noninterest expenses to tick up seasonally in Q2 (merit increases and marketing) .
  • Shareholder return: Quarterly dividend increased to $0.50 ($2.00 annualized) in April, reinforcing capital return alongside tangible book value per share rising to $78.83 .

What Went Well and What Went Wrong

  • What Went Well

    • “Very clean and straightforward quarter” with record net interest income of $526M and loan/deposit growth; NIM up 5 bps to 3.56% (FTE) .
    • Credit quality stable: net charge-offs fell to 11 bps; NPLs steady at 0.35% of loans; allowance lifted to $448.4M with core loan ACL 1.37% .
    • Deposits outpaced loans; noninterest-bearing deposits held at 21%, supporting funding cost declines (interest-bearing deposit rate down 23 bps QoQ) .

  • What Went Wrong

    • Wealth management revenue decreased $4.7M QoQ due to platform transition and lower market valuations; brokerage revenues also softer .
    • Mortgage banking remained subdued; volumes and gain-on-sale depend on rates; management continues to see muted activity absent rate relief .
    • Provision increased to $24.0M (from $17.0M) on macro uncertainty (credit spreads, equity valuations) despite stable baseline scenario; overlay of $35.9M discussed .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Net Interest Income ($M)$502.6 $525.1 $526.5
Non-Interest Income ($M)$113.1 $121.1 $116.6
Net Revenue ($M)$615.7 $638.6 $643.1
Diluted EPS ($)$2.47 $2.63 $2.69
Return on Avg Assets (%)1.11 1.16 1.20
NIM (GAAP, %)3.49 3.49 3.54
NIM (FTE, %)3.51 3.51 3.56
Efficiency Ratio (GAAP, %)58.88 57.46 57.21
Efficiency Ratio (FTE, %)58.58 57.18 56.95

Estimates vs Actuals (S&P Global)

MetricConsensusActualSurprise
EPS ($)2.49*2.69*+$0.20 / +8.1%*
Revenue ($M)643.5*618.4*−$25.1 / −3.9%*

Note: Values retrieved from S&P Global.

Segment and Mix

ItemQ3 2024Q4 2024Q1 2025
Loans ($B)$47.07 $48.06 $48.71
Deposits ($B)$51.40 $52.51 $53.57
Period-end L/D Ratio (%)91.6 91.5 90.9
Noninterest-bearing deposits (% of total)21 22 21

Q1 2025 Loan Growth Contributions

SegmentQoQ Change ($M)Notes
Premium Finance – Life+$218 Exceptional credit quality; NPLs near zero
Mortgage Warehouse+$126 New relationships; deposit cross-sell opportunity
Residential Real Estate (Portfolio)+$72 Continued portfolio build
Commercial/OtherBalance of +$653M total loan growth Pricing disciplined; competitive pressure noted

Key KPIs

KPIQ3 2024Q4 2024Q1 2025
Allowance for Credit Losses ($M)$436.2 $437.1 $448.4
ACL / Total Loans (%)0.93 0.91 0.92
Core Loans ACL (%)1.40 1.36 1.37
NPLs ($M)$179.7 $170.8 $172.4
NPLs / Loans (%)0.38 0.36 0.35
Net Charge-offs (annualized, %)0.23 0.13 0.11
CET1 Ratio (%)9.8 9.9 10.1
Tangible Book Value per Share ($)76.15 75.39 78.83

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan GrowthFY 2025Mid- to high single digits (Q4 call) Maintained; expect strong Q2, P&C premium finance ~+$1B Maintained
Net Interest Margin2025Stable around ~3.5% (Q4 call) Stable; +5 bps QoQ, hedges modest NIM drag Maintained
Net Interest IncomeNext few quartersGrowth with balance-sheet expansion (Q4 call) Continue to grow; expect higher NII in Q2 Maintained
Noninterest ExpenseQ2 2025Mid-single-digit growth off run-rate (Q4 call) Increase slightly (full impact of merit, higher marketing/benefits) Maintained (seasonal uptick)
Dividend2025$0.45/qtr in Q4 2024 $0.50/qtr effective May 22, 2025 Raised
Effective Tax RateQ1 vs Q426.76% in Q4 2024 25.30% in Q1 2025 Lowered (actual)

Earnings Call Themes & Trends

TopicQ3 2024Q4 2024Q1 2025Trend
Margin & Rate SensitivityStable ~3.51%; neutral positioning Stable; expect narrow band in 2025 3.56% (FTE); hedges reduced NIM by 6 bps QoQ Stable to modest improvement
Loan Growth DriversDiversified; ABL, warehouse, CRE, resi Broad-based; cautious on pricing pressure Premium finance life, mortgage warehouse, resi portfolio Continued momentum
Deposits & CompetitionShare gains; 7.7% Chicago MSA Rational market; NIBD ~21–22% Deposits +$1.1B; NIBD 21% Favorable environment
Wealth ManagementSteady growth Stable; discussed platform change Revenue down on transition & markets Short-term headwind
Mortgage BankingMuted; rate dependent Gain-on-sale margin target ~2% if rates fall Subdued; servicing steady ~$10.6M Neutral; lever on rate declines
CRE Office ExposureDetailed monitoring; granularity ~$1.7B, 44% medical/owner-occupied ~$1.64B, NPL ratio ~0.41%, granular book Stable metrics
Macro/Tariffs/UncertaintyNot emphasizedNeutral to cautious outlook Potential tariffs/funding cuts; overlay added Elevated uncertainty

Management Commentary

  • “We reported quarterly net income of $189 million and record net interest income of $526 million…loans grew over $650 million and deposits by over $1.1 billion…NIM of 3.56% was 5 bps higher” – Tim Crane .
  • “Noninterest expenses totaled $366.1 million…down ~$2.4 million QoQ…we expect [Q2] to increase slightly…full effect of annual merit increases…and higher marketing” – Dave Dykstra .
  • “Credit performance continued to be very solid…charge-offs $12.6 million or 11 bps…NPLs as % of total loans decreased slightly to 35 bps” – Rich Murphy .
  • “During the quarter, we announced an increase in our dividend to $2 per share on an annualized basis…CET1…ended…slightly over 10%” – Tim Crane .

Q&A Highlights

  • Loan growth vs uncertainty: Management sees cautious clients but maintained growth outlook; expects strong Q2 led by premium finance; core C&I pipelines solid .
  • Provision overlay: Baseline scenario improved, but late-quarter spikes in Baa spreads and equity factors led to a $35.9M uncertainty overlay; expect provision aligned with growth absent further deterioration .
  • Margin levers: Slight decline expected in non-maturity deposit costs; pricing rational in Chicago; balancing deposit raising to fund loan growth .
  • Competitive pricing: Some pressure in leasing and fully-funded CRE; premium finance retains moat; discipline on pricing maintained .
  • M&A appetite: Ongoing conversations; disciplined approach; Macatawa integration progressing; capital supports opportunities .

Estimates Context

  • EPS beat: $2.69 actual vs $2.49 consensus (+$0.20, +8.1%)*.
  • Revenue miss per S&P: $618.4M actual vs $643.5M consensus (−$25.1M, −3.9%)*; note company-reported net revenue was $643.1M .
  • Estimate counts: 12 EPS and 10 revenue estimates for the quarter*.
  • Implications: Record NII and stable margin may support modest upward revisions to EPS and NII trajectories, while wealth management softness and seasonal Q2 expense uptick temper near-term operating leverage .

Note: Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS beat on stronger NII and stable margin; management message signals margin stability into 2025, a key support for forward EPS .
  • Balance-sheet momentum continues: loans +$653M and deposits +$1.1B; L/D at 90.9% gives capacity to fund growth without stressing liquidity .
  • Credit metrics are resilient: NCOs down to 11 bps; NPLs steady at ~0.35%; ACL increased prudently given macro overlay .
  • Near-term watchers: Q2 loan growth (premium finance P&C expected ~+$1B), deposit cost trajectory, and seasonal expense increase (merit, marketing) .
  • Fee line volatility: Wealth management transition and market valuations weighed on revenue; mortgage banking steady on servicing but origination remains rate-sensitive .
  • Capital and dividends: CET1 ~10.1% and dividend raised to $0.50/qtr; TBVPS up to $78.83 supports valuation compounding .
  • Trading setup: Stable NIM plus visible Q2 loan growth are positive catalysts; watch for competitive pricing in leasing/CRE and any macro-driven reserve changes .