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WINTRUST FINANCIAL CORP (WTFC)·Q2 2025 Earnings Summary

Executive Summary

  • Record Q2 2025 results: net income $195.5M and diluted EPS $2.78; net interest income rose to $546.7M on strong average earning asset growth, with NIM stable at 3.52% .
  • EPS beat S&P Global consensus by roughly $0.17 (2.78 vs 2.615*), and net revenue exceeded internal Q1 trend; management guided to higher NII in Q3 on continued balance sheet growth and stable NIM .
  • Loans grew $2.3B QoQ (19% annualized) and deposits grew $2.2B (17% annualized), funding growth with loans-to-deposits at 91.4% .
  • Credit quality remained solid: net charge-offs 11 bps annualized, NPLs at 0.37% of loans, ACL $457.5M; provision eased to $22.2M, reflecting macro and portfolio growth dynamics .
  • Catalysts: expected NII increase in Q3, consistent deposit gathering, and visibility on preferred redemption mechanics; modest expense seasonality (low $380M run-rate in 2H) supports efficiency .

What Went Well and What Went Wrong

What Went Well

  • Broad-based loan and deposit growth with stable margins: “Net Interest Income…a quarterly record…loan growth of $2.3B…Net Interest Margin…3.54%” (CEO) .
  • Clear outlook for NII: “We remain confident that our Net Interest Margin will continue to be relatively stable…we would again expect to increase Net Interest Income in the third quarter” (CFO) .
  • Disciplined credit: “Charge-offs…11 basis points, unchanged…NPLs remained at a very low level, increasing slightly from 0.20% to 0.25% (CRE)” (CLO) .

What Went Wrong

  • Seasonal/non-core expense pressure: Advertising and marketing rose $6.5M QoQ due to sponsorships; salaries/benefits up $8.0M from health claims and commissions .
  • Mortgage banking still muted vs year-ago; Q2 up QoQ but down YoY (23.2M vs 29.1M) amid rate environment; MSR fair value marks were unfavorable .
  • Slight uptick in NPLs (0.35%→0.37% QoQ) with isolated CRE office and one C&I credit moving to non-performing; management views as granular and manageable .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Net Revenue ($USD Millions)$638.6 $643.1 $670.8
Net Interest Income ($USD Millions)$525.1 $526.5 $546.7
Non-Interest Income ($USD Millions)$113.5 $116.6 $124.1
Net Income ($USD Millions)$185.4 $189.0 $195.5
Diluted EPS ($)$2.63 $2.69 $2.78
Net Interest Margin (%)3.49 3.54 3.52
Return on Avg Assets (%)1.16 1.20 1.19
Return on Avg Common Equity (%)11.82 12.21 12.07
Balance Sheet & Credit KPIsQ4 2024Q1 2025Q2 2025
Loans (period-end, $USD Millions)$48,055.0 $48,708.4 $51,041.7
Deposits (period-end, $USD Millions)$52,512.3 $53,570.0 $55,816.8
Loans/Deposits Ratio (period-end, %)91.5 90.9 91.4
Provision for Credit Losses ($USD Millions)$17.0 $24.0 $22.2
Net Charge-offs ($USD Millions)$15.9 $12.6 $13.3
NPLs/Total Loans (%)0.36 0.35 0.37
NPAs/Total Assets (%)0.30 0.30 0.31
ACL ($USD Millions)$437.1 $448.4 $457.5
Non-Interest Income Mix ($USD Millions)Q4 2024Q1 2025Q2 2025
Wealth Management$38.8 $34.0 $36.8
Mortgage Banking$20.5 $20.5 $23.2
Service Charges$18.9 $19.4 $19.5
Operating Lease Income, net$15.3 $15.3 $15.2
Gains (Losses) on Securities, net$(2.8) $3.2 $0.7
Covered Call Option Fees$2.3 $3.4 $5.6
Other$20.7 $20.8 $23.0

Note: Company-reported “Net revenue” equals net interest income + non-interest income . S&P Global’s revenue actuals can differ by classification; see Estimates Context.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan Growth (YoY/2H trajectory)2H 2025Mid-to-high single digits (Q1 call) Mid-to-high single digits; pipelines strong (Q2 call) Maintained
Net Interest MarginFY/Q3 2025Relatively stable around ~3.5% (Q1 call) Relatively stable; supports higher Q3 NII Maintained
Net Interest IncomeQ3 2025Expect growth with balance sheet expansion (Q1 call) Expect increase in Q3 on higher average earning assets Maintained/clarified
Non-Interest ExpenseQ3–Q4 2025Mid-single-digit growth off Q4 run-rate (Q4 call) About low $380M per quarter run-rate in 2H Clarified (run-rate)
DepositsFY 2025Grow in tandem with loans (Q1 call) Continued deposit growth funds loans; deposit costs stable barring Fed moves Maintained
Preferred StockQ3 2025Considering actions (Q4 call) Series F issued/Series D&E redeemed July; Q3 EPS calc impact explained Executed and clarified

Earnings Call Themes & Trends

TopicQ4 2024 (Prior Mentions)Q1 2025 (Prior Mentions)Q2 2025 (Current)Trend
NIM stability & hedgingStable ~3.5%; added forward swaps; neutral to small rate moves NIM up 5bps; hedges modestly unfavorable to NIM; strategy protects in lower-rate cycle NIM 3.52; expect stability; hedging buckets strong for next year Stable/neutral
Loan growth & competitionSeeing more aggressive competitor pricing; won’t chase uneconomic deals Guidance mid-to-high single digits; strong niche (warehouse, life PF) Broad-based growth; PF P&C seasonal strength; maintain pricing discipline Strong, mindful of pricing
Deposits & betasDDA steady ~21%; incremental costs mid-3% to ~4% CDs Slight decline in deposit costs possible; rational market Deposit costs stable; able to cut 25bps swiftly on discretionary accounts if Fed cuts Stable; responsive
CRE/Office exposureOffice steady ~$1.7B; granular; proactive renewals Office ~$1.6B; detailed maturity reviews; low CRE charge-offs Office ~$1.6B; slight NPL uptick from small deals; still low ratio Stable, well-managed
MortgageMuted overall; pick-up at ~6% rates Platform conversion impacted wealth; mortgage production margin goals Mortgage QoQ up; MSR FV negative; margin mid/low Modest recovery QoQ
Capital & preferredsPreference to replace/reset preferreds Expect repricing; evaluate market alternatives Series F issued ($425M) and D&E redeemed; Q3 EPS mechanics detailed Executed; clarity

Management Commentary

  • CEO: “Net Interest Income…a quarterly record…loan growth of $2.3 billion…Net Interest Margin…3.54%…pipelines are strong, and we expect continued mid-to-high single-digit loan growth for the second half of the year.” .
  • CFO: “We remain confident that our Net Interest Margin will continue to be relatively stable throughout the remainder of 2025…we would again expect to increase Net Interest Income in the third quarter.” .
  • CLO: “Charge-offs for the quarter were 11 basis points, unchanged from Q1…CRE NPLs remained at a very low level, increasing slightly from 0.20% to 0.25%.” .
  • CEO on deposits: “Commercial growth in deposits is particularly helpful…This was a very solid deposit growth quarter…$2B should not be the norm going forward.” .
  • CFO on preferreds: “Third quarter…Series F preferred dividends…more than a quarter’s worth…issuance costs…recorded through net income available to common shareholders…will not impact third quarter operating net income.” .
  • Q2 earnings release: “Net interest margin…3.52% (3.54% FTE)…We expect a relatively stable net interest margin coupled with continued balance sheet growth to drive net interest income higher in the third quarter.” .

Q&A Highlights

  • Loan growth trajectory: Management reiterated mid-to-high single-digit growth for 2H, with Q2 period-end loans already ~$1.5B higher than Q2 averages, setting up Q3 NII growth .
  • Deposit gathering/costs: Deposit costs stable; ability to pass through 25bps cuts on discretionary accounts if Fed cuts; CDs mostly sub-12 months .
  • CRE/Office: Slight uptick from a few small office credits and one C&I moved to NPL; portfolio granular and appropriately marked; continued deep-dive reviews .
  • Expenses: Expect low $380M per quarter run-rate in Q3–Q4; seasonal marketing in Q2–Q3; investing prudently .
  • Hedging strategy: Buckets well-filled for next year; will opportunistically add for 2027–2028 maturities .

Estimates Context

MetricQ4 2024 Consensus*Q4 2024 ActualQ1 2025 Consensus*Q1 2025 ActualQ2 2025 Consensus*Q2 2025 Actual
Primary EPS ($)2.4729*2.63 2.4876*2.69 2.6152*2.78
Revenue ($USD)641.1M*638.6M 643.5M*643.1M 661.7M*670.8M
  • EPS: Beats in Q4, Q1, and Q2 versus S&P Global consensus; Q2 beat approx $0.17 (2.78 vs 2.6152*).
  • Revenue: Company “Net revenue” (NII + non-interest income) exceeded S&P’s consensus in Q2; note S&P’s actual revenue classification may differ from company “net revenue” definition .
    Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Earnings power: Stable NIM (~3.5%) plus tangible average asset growth points to higher Q3 NII and sustained EPS momentum in 2H 2025 .
  • Balance sheet engine: Robust, diversified loan growth (PF P&C seasonal boost, CRE, warehouse, leasing) funded by core deposits; loans/deposits ~91% remains disciplined .
  • Credit resilience: Low charge-offs (11 bps) and modest NPL ratio (0.37%) with granular office exposure; reserves appropriate at $457.5M .
  • Expense control: Seasonal Q2 marketing uplift should normalize to low $380M per quarter; efficiency ratio supportive amid revenue growth .
  • Capital clarity: Preferred recap (Series F issuance; D&E redeemed) provides rate optimization; Q3 EPS math impacted but operating income unaffected .
  • Near-term trade: Positive bias into Q3 on NII growth and EPS beats; watch deposit pricing discipline and any competitive loan pricing compression .
  • Medium-term thesis: Diversified specialty platforms and core-market share gains support durable growth with rate neutrality from hedges; optionality in M&A discipline .

Additional Q2 2025 Press Releases

  • Quarterly cash dividend of $0.50 per common share, payable Aug 21, 2025 (record Aug 7, 2025); Series F preferred dividend payable Oct 15, 2025 (record Oct 1, 2025) .

Notes and Clarifications

  • Company “Net revenue” equals net interest income + non-interest income; S&P Global revenue metrics may differ in classification, causing reported vs S&P “actual” differences .
  • Management expects Q3 NII to increase due to higher average earning assets and stable margins; Q2 period-end loans already set a favorable starting point .
  • Seasonal expense patterns: Q2–Q3 advertising/marketing higher due to sponsorship calendars; expect normalization in 2H run-rate .