Q4 2025 Wintrust Financial Corp Earnings Call

January 21, 2026

Results will be made by Tim crane president and chief executive officer.

David deister, Vice chairman and Chief Operating Officer and Richard Murphy, Vice, chairman and chief lending officer.

As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation.

Following their presentations, there will be a formal question and answer session during the course of today's call. When trust management, may make statements to constitute projections, expectations beliefs or similar for looking statements,

Actual results could differ materially from the results anticipated or projected in any such for looking statements.

the companies forward looking assumptions that could cause the actual results to differ materially from the information discussed during this, call are detailed in our earnings press release and in the company's most recent form 10K and any subsequent filings with the SEC

Also, our remarks May reference certain non-gaap Financial measures.

Operator: Welcome to Wintrust Financial Corporation's Q4 and Q4 2025 Earnings Conference Call. A review of the results will be made by Tim Crane, President and Chief Executive Officer, David Dykstra, Vice Chairman and Chief Operating Officer, and Richard Murphy, Vice Chairman and Chief Lending Officer. As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation. Following their presentations, there will be a formal question-and-answer session. During the course of today's call, Wintrust management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statements. Actual results could differ materially from the results anticipated or projected in any such forward-looking statements.

Our earnings press release and earnings release presentation, include a Reconciliation of each, non-gaap Financial measure to the nearest comparable, gaap Financial measure.

Speaker #1: David Dykstra, Vice Chairman and Chief Operating Officer, and Richard Murphy, Vice Chairman and Chief Lending Officer. As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation.

As a reminder, this conference call is being recorded. I will now turn the conference call over to Mr. Tim crane

Good morning. And for those of you, we haven't seen or talked to recently, Happy New Year.

Speaker #1: Following their presentations, there will be a formal question and answer session. During the course of today's call, Wintrust management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statements.

Q4 2025 Wintrust Financial Corp Earnings Call

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Wintrust Financial

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Q4 2025 Wintrust Financial Corp Earnings Call

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Wednesday, January 21st, 2026 at 4:00 PM

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Operator: The company's forward-looking assumptions that could cause the actual results to differ materially from the information discussed during this call are detailed in our earnings press release and in the company's most recent Form 10-K and any subsequent filings with the SEC. Also, our remarks may reference certain non-GAAP financial measures. Our earnings press release and earnings release presentation include a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure. As a reminder, this conference call is being recorded. I will now turn the conference call over to Mr. Tim Crane. Good morning. And for those of you we haven't seen or talked to recently, Happy New Year. Thank you for joining us for the Wintrust Q4 and full year 2024 earnings call. In addition to the introductions Lateef made, I'm joined by our Chief Financial Officer, Dave Starr, and Chief Legal Officer, Kate Boege.

Operator: As we usually do on these calls, I'll begin the morning with a few highlights. Dave Dykstra will review the financial results. Rich will speak to loan activity and credit performance. And I will return with some summary comments on 2025 and early thoughts on 2026. As always, following our remarks, we'll be happy to take questions. With that, Wintrust delivered solid performance in 2025. The results reflect our focus on generating strategic and disciplined growth. I'm proud to say our efforts drove record net income for the year. For Q4 2025, we reported net income of $824 million, up 19% from $695 million in 2024. Earnings per diluted share was $11.40, up from $10.31 in 2024, and tangible book value increased by over $13 to nearly $89 a share. Total assets at year-end were just over $71 billion. Our Q4 was also strong.

Operator: Net income was $223 million, also a record, up 3% or $7 million from the prior quarter. Solid loan and deposit growth during the quarter and a slightly improved margin led to continued growth in net interest income. Credit quality remained solid, and overall non-interest expenses were well managed. When I look back over the year, I want to highlight three things that I am particularly pleased by. First, we delivered disciplined growth at a level above most of our peers with a stable margin. As we've discussed, we are adding new relationships, consumer and commercial, that we expect will be with us for years to come as we continue to build the franchise. In fact, in 2025, our steady and consistent approach moved us into third position in deposit market share in the Chicago area, and we showed strong gains in both Wisconsin and West Michigan.

Operator: Second, we achieved solid operating leverage. On a percentage basis, net revenue was up 11.2%, 340 basis points higher than our non-interest expense. We did this while investing in the tools, technology, and people to both run a bank our size today and to build the foundation for future growth. Lastly, we saw improved net promoter scores that were already best in class in both retail and commercial banking in 2025, as our focus on exceptional customer service continues to differentiate us from many of our peers. Before I turn this over to Dave, I want to call your attention to the charts we include in our press release at the end of each year showing our 10-year performance on key metrics. What you will see here is the continued consistent performance that we stress with our teams.

Operator: I'm very proud of these results and how they translate into real value for our shareholders. Now, let me turn this over to Dave. Great. Thanks, Tim. We finished off 2025 with another quarter of strong loan and deposit growth, with both falling within our stated range of mid to high single digits growth. Specifically, the deposit growth was right at $1 billion during the quarter, representing a 7% increase over the prior quarter on an annualized basis. This deposit growth helped to fund continued strong Q4 loan growth of a similar $1.0 billion amount that represented 8% growth on an annualized basis. On a full-year basis, loans and deposits grew 11% and 10%, respectively. Turning to the income statement results, this was a very solid operating quarter for Wintrust, producing a record level of quarterly net income.

Operator: The provision for credit losses was relatively consistent with prior quarters, remaining in the $20 to $30 million range experienced in all quarterly periods of 2025, as the overall credit environment and asset quality has remained relatively stable. Regarding other non-interest income and other non-interest expenses, non-interest income totaled $130.4 million in the fourth quarter, similar to the $130.8 million recorded in the prior quarter. A very slight decline was impacted by lower security gains, but overall, other than the continued softness in the mortgage revenue, it was a solid outcome for non-interest income for the fourth quarter. As to non-interest expense categories, non-interest expenses totaled $384.5 million in the fourth quarter, which represented a slight increase from the $380 million recorded in the prior quarter.

Operator: Increases in employees' health insurance claims, OREO expenses, travel and entertainment, and various other small expense increases were offset somewhat by seasonally lower marketing costs. Overall, expenses were well controlled and within the expected range we discussed on our last call. Additionally, both the quarterly net overhead ratio and the efficiency ratio remained relatively stable during the quarter from the prior quarter. In summary, I'll reiterate what I said on our last call, with this being another very solid quarter. The company accomplished good loan and deposit growth, a stable net interest margin with a steady outlook, a record level of net interest income, and a continued low level of non-performing assets. Our team delivered net income that was a record for any full fiscal year in the company's history, and we have a positive outlook for continued growth in assets, revenues, and earnings.

Operator: Our core C&I and CRE pipelines remain consistent, and we continue to benefit from our unique market positioning in our core markets of Chicagoland, Wisconsin, West Michigan, and Northwest Indiana. In addition, we continue to have very good momentum in a number of our lending verticals, including mortgage warehouse, leasing, and premium finance. From a credit quality perspective, as detailed on slide 15, we continue to see strong credit performance across the portfolio. This can be seen in a number of metrics. Non-performing loans increased slightly from $162.6 million, or 31 basis points, to $185.8, or 35 basis points, but remained at a very manageable level and in line with levels we had seen in the first half of the year. Charge-offs for the quarter were 17 basis points, down from 19 basis points in the prior quarter.

Operator: We continue to believe the level of NPLs and charge-offs in the fourth quarter reflect a stable credit environment, as evidenced by the chart of historical non-performing asset levels on slide 16, and the consistent level in our special mention and substandard loans on slide 15. This quarter is another example of our commitment to identify problems early and charging them down where appropriate. Our goal, as always, is to stay ahead of any credit challenges. As noted in our last few earnings calls, we continue to be highly focused on our exposure to commercial real estate loans, which comprise roughly one quarter of our total portfolio. As detailed on slide 19, we continue to see signs of stabilization during the fourth quarter, as CRE NPLs remained at a very low level, decreasing from 0.21% to 0.18%. CRE charge-offs continue to remain at historically low levels.

Operator: On slide 20, we continue to provide enhanced detail on our CRE office exposure. Currently, this portfolio remains steady at $1.7 billion, or 12.1% of our total CRE portfolio, and only 3.2% of our total loan portfolio. We monitor this portfolio very closely, and we will continue to perform our deep dive analysis on a quarterly basis. The most recent deep dive analysis showed very consistent results when compared to prior quarters. Finally, as we have discussed on previous calls, our team stays in close contact with our customers, and those conversations continue to reflect a measured optimism. With solid visibility into our loan pipelines and continued discipline around our portfolio, we would expect loan growth in 2026 to be within our guidance and portfolio performance in line with our historical experience. That concludes my comments on credit, and I'll turn it back to Tim. Great. Thank you, Rich.

Operator: Again, really good financial results in 2025. Our primary objective for 2026 is to continue to deliver solid and consistent financial performance. We expect our teams will continue to provide a differentiated level of service to drive organic growth. At the same time, we will continue to invest in the tools, technology, and people needed to support that growth. Our targets for 2026 are straightforward. We expect mid to high single-digit loan growth funded by a similar level of deposit growth as we continue to expand share. Given the current interest rate environment, and even with a few rate changes in either direction, we expect the margin to remain relatively stable around 3.5%. We plan to deliver positive operating leverage while continuing to make the important investments that position us for the future.

Operator: We expect to see improved non-interest income in our wealth management and service-based fee income businesses and are hopeful for the mortgage market to pick up. We remain focused on our Midwestern footprint and will continue to make the most of opportunities across the United States for our specialty businesses where our expertise and unique solutions give us a competitive advantage. Our pipelines remain solid, and although we have strong momentum going into the year, we are mindful of the typical seasonality that can make our quarterly growth uneven, particularly in the first half of the year. With this in mind, I feel good about our business heading into 2026. Let me end by saying that we could not generate the results that we do without the dedication and commitment of our Wintrust team.

First quarter last year was 653. And so down from we're about 6%. Um and then we picked it up in the second quarter as you you know, John you know that story how our first Insurance business really kind of picks up um the pace there and the second quarter. So um, we had a really good second half, but, you know, there's but where that comes from is as I mentioned, some really good Market, positioning right now in our cni and CRA space. Um, that we feel pretty good about. Um, when we talked to customers, as I mentioned, you know, they feel pretty good about where the economy stands right now. And, you know, I think our, you know, there's enough stability in the, you know, General picture where they're willing to invest, you know, and then you look at the different verticals that we saw really good success with in the fourth quarter um in particular where mortgage Warehouse lines. And if we get some some pickup here on the mortgage side of the business, I think you'll continue to see that in the first half of the year, um, you know, Leasing

Operator: What's not where you want it to be in terms of either growth by asset class or anything operationally? Well, we'd like the mortgage business to be stronger. We think we've done a good job of paring back the expense related to that business so it's not damaging to us at these relatively low levels from a volume standpoint. We'd always like more commercial activity, but we remain pretty disciplined about trying to pick relationships versus transaction activity. And periodically, as some of our peers try to get loan growth, we've seen some transactional activity and some odd pricing. But we think we continue to be well-positioned in the market. Size-wise, there are very few local institutions near where we are. We think that's an advantage for us. And net-net, we continue to feel like we're in a pretty good position. Okay.

Operator: Then just following up, Tim, you don't need to do a deal with that kind of growth, but you have historically kind of entertained tuck-ins. What's the latest on M&A appetite? Yeah, Chris, you're right. I mean, we're aiming for organic growth, and that would be our plan. If we get an opportunity to do an acquisition, we think we're reasonably good at acquisitions, at least the smaller ones that we've done. Conversations continue. There's a little bit of fits and starts, but nothing that's worth talking about right now. And our business plan for 2026 is based on growing our business organically. Great. Thank you. Thank you. Our next question comes from the line of Brendan Nosal of Hovde Group. Please go ahead, Brendan. Hey, good morning, everybody. Hope you're doing well. Good morning. Just to start off, good morning.

Operator: I think if I look back over the past two years, you've been gradually shaving a couple of basis points here and there off reserve ratios, whether it's the stated reserve to loan or the ACL to the core loan portfolio. I get that a lot of that is formulaic and driven by outside factors. But just kind of take us through the thought process on gradually bringing down reserves and where do you see coverage ratios trending across 2026? Well, we don't plan whether to build reserves or take reserves away. The CECL process, the macroeconomic factors, the mix of the portfolio, and the process we go through to determine reserves really determines the level of those reserves. So if the economic forecast gets much worse for some reason, if the economy gets worse, then you're going to see that coverage ratio go up.

Well, we we don't, you know, we don't plan whether to build reserves or take reserves away the Cecil process and the economic macroeconomic factors and the mix of the portfolio and the, the the process we go through to determine reserves really determines the level of those reserves. So, you know, if the economic forecast gets much worse for some reason, if if, if, if the economy gets worse and you're going to see that coverage ratio, go up what we saw started during the year is that the economic forecast, generally, we're getting better. And, and so, the, the model just spits out the the results but uh, our our credit, as we talked about, has been very good. Our criticized, the classified levels are very low. Our npas are very low, our charge us, you know, our our, our low. And so we we add economic conditions or even some commercial real estate price and index. These got better early in the year and and the like and so you know we we really

Operator: We talked about M&A, and I understand you guys have an excellent organic growth opportunity in front of you and fully taking advantage of it. But in the past, you've talked about other MSAs and looking to replicate what you do in Chicago and other MSAs. Minneapolis, St. Louis, and Indianapolis have been mentioned. Is there any appetite to move outside of the Chicago MSA at this point? Well, I mean, we're in Southeast Wisconsin and West Michigan now, which you know, David. I mean, we would be opportunistic in other Midwest geographies that we don't cover today, but that would be on a disciplined basis. Where we haven't been able to acquire, we've in some cases opened branches, and we've been effective in doing so. We've talked in the past about Rockford, and we've got some branches opening in Northwest Indiana this coming year.

Operator: So we'll take the opportunities as they come to us. But if we need to go to other geographies organically, we think we've proven our ability to do that. Great. Thanks, Tim. Appreciate you taking my question. That's all that I have. You bet. Thanks, David. Thank you. Our next question comes from the line of Terry McAvoy of Stephens Inc. Terry, your line is open. Thank you. Maybe, Tim, just a question for you. As the industry continues to evolve, what are your current thoughts on the strategic benefits of operating 16 banking charters kind of relative to some of the costs and leveraging the Wintrust brand? Yeah. The charter question comes up periodically, and we currently have 16 for those of you that are following along. We believe they continue to be a benefit for us. They keep us closer to the market than many of our competitors.

Operator: We've centralized most of the infrastructure and expense that goes along with the charters. And so it's really more of a marketing and market function that we believe is valuable to us. And if you look at the communities in which we operate, in many of those communities, we're the number one or number two market share in very attractive markets. That's not a benefit we want to give up at this point. So we watch it carefully. The expense is not trajectory changing. It's a structure that we believe we operate well, and we'll continue to evaluate it as we go. But for the time being, we like it. There are clearly benefits. Deposit insurance is one of them. Our MaxSafe product obviously gives us the ability to provide customers more insurance than they might otherwise get. There are other benefits.

Operator: And as you would expect, there are some other trade-offs. But the net balance for us remains positive. Thanks, Tim. And then as a follow-up, about 1/3 of last quarter's loan growth was in mortgage warehouse. And I think in the past, you've talked about gaining market share. But when you kind of look at the forward curve, is that portfolio kind of a headwind, a tailwind to growth expectations for 2026? Well, obviously, it depends on what happens to the mortgage market. We've been successful in growing that business in a stable mortgage market because of the expertise our team brings and the job our folks do from an operational standpoint. But for us, that's a zero-loss business with very attractive dynamics. We think we're very efficient. It'll move a little bit with the mortgage volume over time.

Successful in in growing that business in a stable mortgage Market, because of the expertise, our team brings and the the job, our folks do from an operational standpoint. But, um, you know, for us, that's a, that's a zero loss business. With very attractive Dynamics. We, we think we're very efficient. Um, it, it'll move a little bit with the mortgage volume over time. And if, uh, the mortgage Market gets stronger, as we've talked about, it's it's a benefit to us both in terms of our Core Business and the, the warehouse business. Yeah. In addition to which, you know, they think that it's it's it's a great Point. Tim brings up, you know, it's uh the market obviously but they've done a really nice job of bringing new names in. Um and that comes with, you know, if you get the volume you also get some fee income out of that and some very nice deposits. So, I mean, it's really, it's been a great story in spite of the fact that you might get some value.

Operator: It just doesn't seem like the volumes are going to go much lower in the mortgage market. So I would think net-net over a quarter to quarter may change a little bit, but net-net there's probably more upside than downside there. Exactly. Okay. Thanks for taking my questions. Appreciate it. You bet. Thank you. Our next question comes from the line of Casey Haire of Autonomous Research. Your line is open, Casey. Great. Thanks. Good morning. Happy New Year, everyone. Dave, wanted to clarify your comments about the operating leverage dynamics. I think you said you expect mid- to high single-digit revenue off of 2025 and then expenses to grow mid- to high 4% to 5% versus the Q4 run rate. There's a little bit of excitement that you meant or that you said mid- to high single-digit revenue growth off the Q4 run rate.

Operator: We continue to believe, if we get rate cuts, that we'll do a nice job managing the interest-bearing deposit expense. So I don't think our view has changed there. Okay. Very good. And just last one for me. The hedge program that you guys detail on slide 12, you do have a number of hedges that mature this year. Does that hurt your ability to hold the NIM stable, or is there a plan to backfill with new hedges as they come off? Our guidance fully contemplates those hedging programs running off, but we would expect to, depending on market conditions, to backfill that and just probably do some forward starts and fill in the gaps going forward as they mature. But we think, given our current position, our current swaps in place, and our growth projections, that we will hold the margin in the 350s.

Operator: And as Tim said, if rates go up two or three times or down two or three times, we still think we're there. So we think we're very neutral for a full year with the margin. Great. Thank you. Thank you. Our next question comes from the line of David Chiaverini of Jefferies. Your question, please, David. Hi. Thanks. And maybe just starting off with further clarification on that run rate comment. So are we talking Q4 2026 versus Q4 2025, those growth rate figures, or are we talking full year 2026 versus the Q4 2025 annualized? I'm taking Q4 2025 annualized to get to a number, and then you can put the growth rates on top of that for the full year of 2026. Perfect. Thank you for that. And then I wanted to ask about the mortgage banking outlook. It sounds like that could be a nice swing factor for 2026.

Operator: We don't think that going down much further is really that probable. We've been in the low 20s for quite a while here and with very low application volume. So unless rates really shoot up in the mortgage market, we think we can hold this revenue. So we look at it as upside, and we're optimistic it happens, but we can't control the mortgage rates. Yeah. And maybe the other benefit, which has been the case now for a couple of years, is as these low rates have continued, many of the sort of refinance independent broker mortgage operations have gone out of business. And so our share of the market, we think, is up considerably. And when it comes back, we expect to do well. Very helpful. Thank you. Thank you. Our next question comes from the line of Ben Gerlinger of Citi. Your line is open, Ben.

Operator: Hey. Good morning. Good morning, Ben. Sorry. Just wanted to double-check and maybe fine-tune a little bit here. I apologize for being a little myopic on it, but you talked through the property casualty insurance market. I agree, softening versus strengthening, I don't know either. It seems like the pricing is a little limited year over year. So is it fair to think Q2 will still be a good growth quarter, but maybe not as heroic as we've seen previously? I'm just trying to fine-tune the first half of the year in terms of modeling growth. Yeah. I think the only point we were trying to make is that for the last couple of years, we've had the benefit of premiums going up. That may not be the case right now. We don't think they're working against us, but we still expect a strong second quarter.

Operator: It's a seasonal component of the property and casualty premium finance business, and we would expect to have a good second quarter. Gotcha. And then just kind of at a 50,000-foot view, you guys generally tend to show loan growth and deposit growth in roughly the same quarter. Is that a fair way to think about this year given kind of what's transpired over rates and your outlook for growth? Yeah. We certainly aim for deposit growth to mirror our loan growth. And we would take more deposit growth if we could get it. Again, that's adding clients that will be with us for a long time. It can be lumpy, so I can't tell you they're going to exactly mirror each other, but that would be our target. Gotcha. That's helpful. Thank you, guys. Thank you. Our next question comes from the line of Jared Shaw of Barclays.

Operator: And then just finally, looking at construction down this quarter, any color on the build-out of construction and how that could potentially be funded up as we move through next year or this year? Are you talking about just general construction lending? Yeah. Yeah. It was down this quarter, I'm guessing, from completions. But sort of what's the growth outlook there? Yeah. I would say it's kind of Chicago hasn't been a huge construction market. We've seen a little bit, but I think there's more upside there. I mean, multifamily, for instance, in Chicago continues to be very strong. Some other markets are maybe struggling a little bit more because of oversupply. So I actually think we're feeling okay about where construction activity will be for this coming year. Great. Thank you. Thank you. Our next question comes from the line of Janet Lee of TD Cowen.

Operator: Please go ahead, Janet. Good afternoon. Not to be beating a dead horse, but just to clarify on your outlook for residential mortgage and mortgage warehouse, is your mid to high single-digit loan growth for 2026 contemplate a level of bullish? Are you assuming that mortgage rates perhaps dip to the 5% handle? Are you baking in a level of mortgage rate reduction in your mid to high single-digit outlook, or were you referring to an additional upside to the mid to high single-digit loan growth if mortgage rates do dip below 6%? Janet, the assumption would be a slightly improved mortgage market in line with the Mortgage Bankers Association projections, not any dramatic drop in rates. Dave, a couple of minutes ago, gave you a little bit of a sense for how much volume you could get if the rates dropped.

Operator: But I think to get any very, very material lift, rates would have to go below 6%. Got it. And on your NIM outlook for stable, I think there's room for interpretations since you're characterizing four basis points increase in NIM this quarter as being stable. You're pretty neutral to rates, it seems, and 60% beta also seems solid. What are some of the drivers that could put you to either perhaps increasing net interest margin through 2026? And are you still seeing the phenomena of seeing some spread compressions on fully funded CRE, which you've talked about in the past quarters? Thanks. Well, we've talked about competitive pressures largely from folks that maybe haven't grown as quickly as we have and kind of desire to do that. And so I think there still is a fairly competitive environment for fully funded loans.

Operator: But some of that's transaction-based, and we're really much more focused on relationship-based arrangements. If the competitive environment changed dramatically, you could get some pressure on the margin. Obviously, Q1 with a couple fewer days has a math impact on the margin. But we're actually pretty neutral, almost independent of rate changes. And given the visibility to the competitive environment, that would be the case there too. Thank you. Thank you. Our next question comes from the line of Bill Haple of 22V Research. Your line is open, Bill. Good morning, guys. Thanks. Can you just maybe talk through the fixed asset reprice that you're seeing on both the loan and the security side, kind of where roll-on, roll-off yields are in both books? Thanks. Yeah. Well, we really haven't talked about the roll-off yields on them.

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