Yahoo Finance Wintrust Financial Corp (WTFC) (Q1 2024) Earnings Call Transcript Highlights: Record Net Income ...
Net Income: Reported record net income of just over $187 million.
Net Interest Margin: Recorded at 3.59%.
Net Interest Income: $464 million, slightly down from the previous quarter.
Loan Growth: Increased by approximately $1.1 billion or 10% on an annualized basis.
Deposit Growth: Also increased by $1.1 billion, a 9% increase on an annualized basis.
Non-Interest-Bearing Deposits: Declined by approximately $434 million.
Total Assets: Grew by approximately $1.3 billion.
Provision for Credit Losses: $21.7 million, down from $42.9 million in the prior quarter.
Non-Interest Income: Totaled $140.6 million, up $39.8 million from the previous quarter.
Non-Interest Expenses: Totaled $333 million, down $29.5 million due to lower special assessments.
Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you touch on those non-interest-bearing levels and confidence that those balances can stabilize? Also, touch on some of the pricing trends you expect in the money markets and savings products. A: Timothy S. Crane - CEO, President & Director: We're hopeful that the half of the DDA balances that were out on average in the first quarter have more or less come back and that, that will stick. With market rates up, some of the competition that we've seen subsiding kind of is back in the market and so you're around 5% for some of the promotional or marginal deposit growth. We were pleased in the first quarter to match the deposit growth with the loan growth, although it came in a little higher cost than we expected.
Q: Can you unpack mortgage a bit in terms of your expectations there? You talked about slightly higher origination volumes. But typically, you guys see pretty strong Q2 and Q3. What kind of expectations do you have there? A: David L. Stoehr - Executive VP & CFO: January's applications were higher than December and February was higher than January and March was higher than February. We are sort of expecting the spring buying season to help. Although the increase in rates are recently hasn't been helpful, but there is a lot of pent-up demand out there. We've got more than our normal share of people asking for prequalification letters and the like, which indicates that there's some pent-up demand. So we do sort of expect the spring buying season to pick up even though there is a shortage of supply.
Q: What are your expectations for margins? You talked about a little bit of pressure for growth purposes. But if we do get the forward curve, is the range that you've previously guided on the margin still good? Or is it going to be kind of maybe trending below that? A: David L. Stoehr - Executive VP & CFO: We're fairly neutral now on any -- if the consensus is a couple of rate cuts, we don't think that, that impacts us dramatically. The bigger pressure here is simply hold the DDA. And we've seen like -- Tim and I have said, we've seen a bounce back so far this quarter. And then just really strong loan growth. We're going to be above the top end of our guidance in the second quarter, we believe, and just to fund that short term because it's a little bit more expensive we're seeing in the market than if you were to just grow the deposits in mid-single-digit sort of range.
Q: Maybe provide a bit more color, if you could, on the commercial loan growth in the first quarter, the $670 million. I know you mentioned some of it was mortgage warehouse, the rest was market share gains. Just maybe expand industries, are these larger banks, smaller banks? And what's behind that growth? A: Richard B. Murphy - Vice Chairman & Chief Lending Officer: We have seen tremendous consolidation and a number of our meaningful competitors like MB and private and First Midwest are all gone. And so there's just a lot of dislocation. Things don't happen immediately. They just take time. But we are just seeing a tremendous amount of opportunities as a result of that dislocation. We're also seeing a lot of opportunities out of the much larger banks that have a presence in Chicago, where they're just not -- customers are not feeling a real good connection and communication with some of those situations right now.
Q: In light of the acquisition announcement earlier this week, you guys are -- it seems like that should be accretive to your capital ratios going forward. So just curious to hear kind of the appetite for additional acquisitions over the next year or so, particularly as you maybe look to fill in up towards the Grand Rapids area potentially. A: Timothy S. Crane - CEO, President & Director: Number one, we think we're reasonably good at acquisitions. So we're confident that we'll get this integrated and moving the right direction quickly. And we start from a terrific bank place because this is a really good bank. We're not going to try to do several at the same time. So we're probably on the sidelines for a little bit here, but we're having conversations and continuing to look at what makes the most sense for us going forward.
Q: Just wanted to circle back on the deal in terms of the timing. That seems like a great time line for closing. With the commentaries that are coming out of regulators recently, it sounds like deals for banks will be more difficult. Do you feel that there'll be an opportunity for you to do more deals going forward after you integrate this? You seem pretty optimistic on the outlook there. A: Timothy S. Crane - CEO, President & Director: Well, we hope so. We're a community-oriented high-quality bank. We think Macatawa is same in terms of their profile. And so we'll go through the process, but we hope that this gets approved rapidly. And as we talked about earlier, we'll continue to have conversations and look for other opportunities. But I can tell you, again, no hesitation on our part with respect to Macatawa. We think this is exactly the right fit and a very good market right now.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
