Q1 2026 Wintrust Financial Corp Earnings Call

April 21, 2026

Operator: Welcome to Wintrust Financial Corporation's Q1 2026 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 earnings press release and the earnings release presentation. Following their presentations, there will be a formal question and answer session.

Operator: Welcome to Wintrust Financial Corporation's Q1 2026 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 earnings press release and the earnings release presentation. Following their presentations, there will be a formal question and answer session.

Speaker #1: As part of their reviews, the presenters may make reference to both earnings press release and the earnings release presentation. Following their presentations, there will be a formal question-and-answer session.

Speaker #1: 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.

Operator: 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. 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.

Speaker #1: 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.

Speaker #1: 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.

Operator: 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.

Speaker #1: As a reminder, this conference call is being recorded. I will now turn the conference to Crane. Good morning, and thank you for joining us for Wintrust first quarter 2026 earnings call.

Timothy Crane: Good morning, and thank you for joining us for Wintrust's Q1 2026 earnings call. In addition to the introductions that Latif made, I'm joined by our Chief Financial Officer, David Stoehr, and our Chief Legal Officer, Kathleen Boege. We'll follow our usual format this morning. I'll begin with a few highlights. Dave Dykstra will review the financial results. Rich will share some thoughts on loan activity and credit quality. I'll be back with some closing thoughts, including a look at expectations for the Q2 and generally for the remainder of the year. As always, we'll be happy to take your questions. Before we begin, I would like to bring your attention to some changes to the presentation document that accompanies the release of our results.

Tim Crane: Good morning, and thank you for joining us for Wintrust's Q1 2026 Earnings Call. In addition to the introductions that Latif made, I'm joined by our Chief Financial Officer, David Stoehr, and our Chief Legal Officer, Kate Boege. We'll follow our usual format this morning. I'll begin with a few highlights. Dave Dykstra will review the financial results. Rich will share some thoughts on loan activity and credit quality.

Speaker #1: In addition to the introductions that Latif made, I'm joined by our Chief Financial Officer Dave Starr, our Chief Legal Officer Kate Bogie. We'll follow our usual format this morning.

Speaker #1: I'll begin with a few highlights. Dave Dykstra will review the financial results. Rich will share some thoughts on loan activity and credit quality. And I'll be back with some closing thoughts, including a look at expectations for the second quarter and generally for the remainder of the year.

Tim Crane: I'll be back with some closing thoughts, including a look at expectations for the Q2 and generally for the remainder of the year. As always, we'll be happy to take your questions. Before we begin, I would like to bring your attention to some changes to the presentation document that accompanies the release of our results.

Speaker #1: As always, we'll be happy to take your questions. Before we begin, I would like to bring your attention to some changes to the presentation document that accompanies the release of our result.

Speaker #1: We've modified the design, making some updates to how we present the data based on valuable feedback we've received from many of you. We hope you find the format helpful and informative.

Timothy Crane: We've modified the design, making some updates to how we present the data based on valuable feedback we've received from many of you. We hope you find the format helpful and informative as we continue to try and provide clear information that highlights our strong market position and our disciplined operating approach. Looking at the Q1 2026 results, I'm very pleased that we delivered a fifth consecutive quarter of record net income. Overall, it was a very solid and straightforward quarter. We continue to focus on our strategic priorities of providing an exceptional customer experience, delivering disciplined and strategic growth across our businesses with a focus on prudent risk management, and investing to build upon our foundation to drive a successful future.

Tim Crane: We've modified the design, making some updates to how we present the data based on valuable feedback we've received from many of you. We hope you find the format helpful and informative as we continue to try and provide clear information that highlights our strong market position and our disciplined operating approach. Looking at the Q1 2026 results, I'm very pleased that we delivered a fifth consecutive quarter of record net income.

Speaker #1: As we continue to try and provide clear information that highlights our strong market position and our disciplined operating approach, looking at the first quarter 2026 results, I'm very pleased that we delivered a fifth consecutive quarter of record net income.

Speaker #1: Overall, it was a very solid and straightforward quarter. We continue to focus on our strategic priorities of providing an exceptional customer experience, delivering disciplined and strategic growth across our businesses with a focus on prudent risk management, and investing to build upon our foundation to drive a successful future.

Tim Crane: Overall, it was a very solid and straightforward quarter. We continue to focus on our strategic priorities of providing an exceptional customer experience, delivering disciplined and strategic growth across our businesses with a focus on prudent risk management, and investing to build upon our foundation to drive a successful future.

Speaker #1: That said, despite too fewer days in the quarter, we achieved net income of $227 million up from $223 million last quarter and $189 million in the first quarter of 2025.

Timothy Crane: That said, despite two fewer days in the quarter, we achieved net income of $227 million, up from $223 million last quarter and $189 million in Q1 2025. While Dave and Rich will provide more detail, in summary, net interest income, net interest margin, and both loan and deposit growth were in line with our expectations. We delivered solid growth in non-interest income led by our wealth management business. Expenses were well managed and credit quality remained stable. I would highlight that all of our growth is organic. We continue to see good new customer acquisition and market momentum as our clients appreciate our differentiated approach and relentless focus on customer service. In fact, during the quarter, we were recognized once again by J.D. Power for Illinois banking services and by Coalition Greenwich with multiple awards for our commercial middle-market banking services.

Tim Crane: That said, despite two fewer days in the quarter, we achieved net income of $227 million, up from $223 million last quarter and $189 million in Q1 2025. While Dave and Rich will provide more detail, in summary, net interest income, net interest margin, and both loan and deposit growth were in line with our expectations. We delivered solid growth in non-interest income led by our wealth management business. Expenses were well managed and credit quality remained stable.

Speaker #1: While Dave and Rich will provide more detail, in summary, net interest income, net interest margin, and both loan and deposit growth were in line with our expectations.

Speaker #1: We delivered solid growth in non-interest income, led by our wealth management business. Expenses were well managed and credit quality remained stable. I would highlight that all of our growth is organic; we continue to see good new customer acquisition and market momentum as our clients appreciate our differentiated approach and relentless focus on customer service.

Tim Crane: I would highlight that all of our growth is organic. We continue to see good new customer acquisition and market momentum as our clients appreciate our differentiated approach and relentless focus on customer service.

Speaker #1: In fact, during the quarter, we were recognized once again by JD Power for Illinois Banking Services and by Coalition Greenwich with multiple awards for our commercial middle market banking services.

Tim Crane: In fact, during the quarter, we were recognized once again by J.D. Power for Illinois banking services and by Coalition Greenwich with multiple awards for our commercial middle-market banking services. These awards are evidence of our continued success in delivering for our clients in ways that many of our competitors cannot. Overall, a solid quarter. Let me turn it over to Dave.

Speaker #1: These awards are evidence of our continued success in delivering for our clients in ways that many of our competitors cannot. Overall, a solid quarter.

Timothy Crane: These awards are evidence of our continued success in delivering for our clients in ways that many of our competitors cannot. Overall, a solid quarter. Let me turn it over to Dave.

Speaker #1: Let me turn it over to Dave.

Speaker #2: Great. Thanks, Tim. Let me start with the balance sheet. Specifically, deposit growth was right at $1.2 billion during the quarter, representing an 8% increase over the prior quarter on an annualized basis.

David Dykstra: Great. Thanks, Tim. Let me start with the balance sheet. Specifically, deposit growth was right at $1.2 billion during the quarter, representing an 8% increase over the prior quarter on an annualized basis.

Speaker #2: This deposit growth helped to fund continued solid first quarter loan growth of approximately $1 billion. Representing a 7% growth rate on an annualized basis.

David Dykstra: This deposit growth helped to fund continued solid Q1 loan growth of approximately $1 billion, representing a 7% growth rate on an annualized basis. Yields and rates on the major balance sheet categories were slightly lower because of the recent market declines in short-term interest rates, with loan yields moving down 13 basis points in Q1 from the prior quarter, while interest-bearing deposit costs declined 16 basis points from the prior quarter, thus resulting in a slightly improved growth spread. I'd like to note that loan growth during the quarter was heavily back-end loaded, and accordingly, period-end loans were approximately $1.2 billion higher than average loans for Q1. That's giving us a great start on achieving higher average earning assets in Q2 2026. Turning to the income statement. This was a very solid operating quarter, producing record levels of quarterly net income.

Speaker #2: Yields and rates on the major balance sheet categories were slightly lower because of the recent market declines in short-term interest rates, with loan yields moving down 13 basis points in the first quarter from the prior quarter, while interest-bearing deposit costs declined 16 basis points from the prior quarter.

Speaker #2: Thus, resulting in a slightly improved growth spread. I'd like to note that loan growth during the quarter was heavily back-enloaded and, accordingly, period-end loans were approximately 1.2 billion higher than average loans for the first quarter.

David Dykstra: I'd like to note that loan growth during the quarter was heavily back-end loaded, and accordingly, period-end loans were approximately $1.2 billion higher than average loans for Q1. That's giving us a great start on achieving higher average earning assets in Q2 2026. Turning to the income statement. This was a very solid operating quarter, producing record levels of quarterly net income.

Speaker #2: That's giving us a great start on achieving higher average earning assets in the second quarter of 2026. Turning to the income statement, this was a very solid operating quarter, producing record levels of quarterly net income.

Speaker #2: Net interest income declined slightly compared to the fourth quarter of 2025. The benefit to net interest income from an increase of $555 million in average earning asset growth and a two basis point increase in the net interest margin was almost enough to offset having too fewer days in the quarter.

David Dykstra: Net interest income declined slightly compared to Q4 2025. The benefit to net interest income from an increase of $555 million in average earning asset growth and a two basis points increase in the net interest margin was almost enough to offset having 2 fewer days in the quarter. The net interest margin was 3.56% for Q1, and the 2 fewer days in the quarter positively impacted net interest margin by two basis points. The net interest margin has ranged from 3.50% to 3.59% during the last nine quarters, exhibiting sustainability of our net interest margin. The provision for credit losses was relatively consistent with prior quarters, remaining in the $20 to $30 million range experienced in all the quarterly periods of 2025. As the overall credit environment or asset quality has remained stable as we enter 2026.

Speaker #2: The net interest margin was 3.56% for the first quarter and the too fewer days in the quarter positively impacted net interest margin by two basis points.

Speaker #2: The net interest margin has ranged from 3.50% to 3.59% during the last nine quarters, exhibiting sustained stability over our net interest margin. The provision for credit losses was relatively consistent with prior quarters, remaining in the $20 to $30 million range, experiencing all the quarterly periods of 2025, as the overall credit environment and our asset quality has remained stable as we enter 2026.

David Dykstra: The net interest margin has ranged from 3.50% to 3.59% during the last nine quarters, exhibiting sustainability of our net interest margin. The provision for credit losses was relatively consistent with prior quarters, remaining in the $20 to $30 million range experienced in all the quarterly periods of 2025. As the overall credit environment or asset quality has remained stable as we enter 2026.

Speaker #2: Regarding other non-interest income and non-interest expense sections, total non-interest income amounted to $134.1 million in the first quarter, which was an increase from the $130.4 million recorded in the prior quarter.

David Dykstra: Regarding other non-interest income and non-interest expense sections, total non-interest income amounted to $134.1 million in Q1, which was an increase from the $130.4 million recorded in the prior quarter. The increase was primarily a result of strong wealth management and operating lease revenues. Mortgage banking activity continued to be subdued, and production-related volumes and revenue were essentially unchanged from the prior quarter. As for the non-interest expense categories, total non-interest expenses were $382.6 million in Q1, which was slightly lower than the $384.5 million recorded in the prior quarter. Increases in salaries and employee benefits were primarily due to annual merit increases that were offset by lower OREO expenses, travel and entertainment, and various other small expense decreases. Overall expenses were very well controlled. Additionally, both the quarterly net overhead ratio and efficiency ratio improved slightly relative to the prior quarter.

Speaker #2: The increase was primarily a result of strong wealth management and operating lease revenues. Mortgage banking activity continued to be subdued, and production-related volumes and revenue were essentially unchanged from the prior quarter.

Speaker #2: As for the non-interest expense categories, total non-interest expenses were $382.6 million in the first quarter, which was slightly lower than the $384.5 million recorded in the prior quarter.

David Dykstra: As for the non-interest expense categories, total non-interest expenses were $382.6 million in Q1, which was slightly lower than the $384.5 million recorded in the prior quarter.

Speaker #2: Increases in salaries and employee benefits were primarily due to annual merit increases that were offset by lower OREO expenses, travel and entertainment, and various other small expense decreases.

David Dykstra: Increases in salaries and employee benefits were primarily due to annual merit increases that were offset by lower OREO expenses, travel and entertainment, and various other small expense decreases. Overall expenses were very well controlled. Additionally, both the quarterly net overhead ratio and efficiency ratio improved slightly relative to the prior quarter.

Speaker #2: Overall, expenses were very well controlled. Additionally, both the quarterly net overhead ratio and efficiency ratio improved slightly relative to the prior quarter. In summary, I'll reiterate this was a very solid quarter.

David Dykstra: In summary, I'll reiterate this was a very solid quarter. The company accomplished good loan and deposit growth, a stable net interest margin, a record level of net income, sustained growth and tangible book value per share, and a continued low level of non-performing assets. With that, I'll conclude my comments and turn it over to Richard Murphy to discuss credit.

Speaker #2: The company accomplished good loan and deposit growth, a stable net interest margin, a record level of net income, sustained growth in tangible book value per share, and a continued low level of non-performing assets.

Speaker #2: So, with that, I'll conclude my comments and turn it over to Rich Murphy to discuss credit.

Speaker #3: Thanks, Dave. As detailed on slide six of the investor presentation, the solid loan growth of approximately $966 million, or 7% on an annualized basis, was broad-based; commercial loans grew by $719 million, including growth in mortgage warehouse of approximately $286 million.

Richard Murphy: Thanks, Dave. As detailed on slide 6 of the investor presentation, the solid loan growth of approximately $966 million or 7% on an annualized basis was broad-based. Commercial loans grew by $719 million, including growth in mortgage warehouse of approximately $286 million. Commercial real estate loans grew by $222 million. The Wintrust Life Finance team continued to build their portfolio by $173 million, and our residential mortgage group also had a very solid quarter. From a credit quality perspective, as detailed on slide 14, we continue to see strong credit performance across the portfolio. This can be seen in a number of metrics. Non-performing loans decreased slightly from $185.8 million or 0.35% of total loans to $182.8 million or 0.34% of total loans and remain at very manageable levels. Charge-offs for the quarter were 14 basis points, down from 17 basis points in the prior quarter.

Speaker #3: Commercial real estate loans grew by 222 million; the WINTRUST Life Finance team continued to build their portfolio by 173 million and our residential mortgage group also had a very solid quarter.

Speaker #3: From a credit quality perspective, as detailed on slide 14, we continue to see strong credit performance across the portfolio. This can be seen in a number of metrics.

Richard Murphy: From a credit quality perspective, as detailed on slide 14, we continue to see strong credit performance across the portfolio. This can be seen in a number of metrics. Non-performing loans decreased slightly from $185.8 million or 0.35% of total loans to $182.8 million or 0.34% of total loans and remain at very manageable levels. Charge-offs for the quarter were 14 basis points, down from 17 basis points in the prior quarter.

Speaker #3: Non-performing loans decreased slightly from $185.8 million, or 0.35% of total loans, to $182.8 million, or 0.34% of total loans, and remained at very manageable levels.

Speaker #3: Charge-offs for the quarter were 14 basis points, down from 17 basis points in the prior quarter. We believe that the level of NPLs and charge-offs in the first quarter reflect a stable credit environment, as evidenced by the chart of historical non-performing asset levels on slide 15, and the consistent level of our special mention and substandard loans on slide 14.

Richard Murphy: We believe that the level of NPLs and charge-offs in Q1 reflect a stable credit environment, as evidenced by the chart of historical non-performing asset levels on slide 15 and the consistent level of our special mention and substandard loans on slide 14. 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. Turning to slide 21, I want to briefly highlight our exposure to non-depository financial institutions, which totals approximately $3.2 billion or about 6% of our overall loan portfolio. Importantly, the majority of this exposure is in areas where we have long-standing experience and strong performance.

Speaker #3: 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.

Speaker #3: Turning to slide 21, I want to briefly highlight our exposure to non-depository financial institutions, which totals approximately $3.2 billion, or about 6% of our overall loan portfolio.

Richard Murphy: Turning to slide 21, I want to briefly highlight our exposure to non-depository financial institutions, which totals approximately $3.2 billion or about 6% of our overall loan portfolio. Importantly, the majority of this exposure is in areas where we have long-standing experience and strong performance.

Speaker #3: Importantly, the majority of this exposure is in areas where we have long-standing experience and strong performance. Of our $3.2 billion exposure, approximately 1.8 billion is tied to our mortgage warehouse business.

Richard Murphy: Of our $3.2 billion exposure, approximately $1.8 billion is tied to our mortgage warehouse business, a line of business we've been into for over 30 years with deep client relationships, robust operating systems, and well-established risk management practices. In addition, about $341 million consists of capital call facilities, which are structured with strong underlying investor support and have historically demonstrated very favorable credit characteristics. The balance of the portfolio is broadly diversified across a granular group of relationships with leasing companies, captive finance companies associated with commercial borrowers, insurance carriers, and broker-dealers. Overall, we view this portfolio as well-diversified and aligned with our disciplined approach to specialty finance, focused on areas where we have expertise, strong structures, and a track record of consistent performance.

Speaker #3: A line of business we've been into for over 30 years, with deep client relationships, robust operating systems, and well-established risk management practices. In addition, about $341 million consists of capital call facilities, which are structured with strong underlying investor support and have historically demonstrated very favorable credit characteristics.

Speaker #3: The balance of the portfolio is broadly diversified across a granular group of relationships with leasing companies, cap-to-finance companies, associated with commercial borrowers, insurance carriers, and broker-dealers.

Richard Murphy: The balance of the portfolio is broadly diversified across a granular group of relationships with leasing companies, captive finance companies associated with commercial borrowers, insurance carriers, and broker-dealers. Overall, we view this portfolio as well-diversified and aligned with our disciplined approach to specialty finance, focused on areas where we have expertise, strong structures, and a track record of consistent performance.

Speaker #3: Overall, we've used this portfolio as well-diversified and aligned with our disciplined approach to specialty finance, focused on areas where we have expertise, strong structures, and a track record of consistent performance.

Speaker #3: Also, as noted in the 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 loan portfolio.

Richard Murphy: Also, as noted in the 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 loan portfolio. As detailed on slide 18, we continue to see signs of stabilization during Q1 as CRE NPLs remained at very low levels, decreasing from 0.18% to 0.12%. CRE charge-offs continue to remain at historically low levels. On slide 24, we continue to provide enhanced detail on our CRE office exposure. Currently, this portfolio remains steady at $1.7 billion, or 11.7% of our total CRE portfolio and only 3.1% of our total loan portfolio. We monitor this portfolio very closely and we will continue to perform deep dive analysis on a quarterly basis. The most recent deep dive analysis showed very consistent results when compared to prior quarters.

Speaker #3: As detailed on slide 18, we continue to see signs of stabilization during the first quarter, as CRE NPLs remained at very low levels, decreasing from 0.18% to 0.12%.

Speaker #3: And CRE charge-offs continue to remain at historically low levels. On slide 24, we continue to provide enhanced detail on our CRE office exposure, currently this portfolio remains steady at 1.7 billion or 11.7% of our total CRE portfolio and only 3.1% of our total loan portfolio.

Richard Murphy: Currently, this portfolio remains steady at $1.7 billion, or 11.7% of our total CRE portfolio and only 3.1% of our total loan portfolio. We monitor this portfolio very closely and we will continue to perform deep dive analysis on a quarterly basis. The most recent deep dive analysis showed very consistent results when compared to prior quarters.

Speaker #3: We monitor this portfolio very closely, and we will continue to perform deep-dive analysis on a quarterly basis. The most recent deep-dive analysis showed very consistent results when compared to prior quarters.

Speaker #3: Finally, as we have discussed on previous calls, our team stayed very close contact with our customers, and those conversations continue to reflect measured optimism around the business climate.

Richard Murphy: Finally, as we have discussed on previous calls, our teams stay in very close contact with our customers, and those conversations continue to reflect measured optimism around the business climate. That concludes my comments on credit, and I'll turn it back to Tim.

Speaker #3: That concludes my comments on credit and I'll turn it back to Tim.

Speaker #2: Great. Thank you, Rich. At the beginning of the call, I briefly mentioned our three strategic priorities: delivering exceptional customer service; generating disciplined and strategic growth across our businesses with prudent risk management—and I would add, through all market cycles; and investing in our foundation and the future of our bank.

Timothy Crane: Great. Thank you, Rich. At the beginning of the call, I briefly mentioned our three strategic priorities. Delivering an exceptional customer service, generating disciplined and strategic growth across our businesses with prudent risk management, and I would add, through all market cycles, and investing in our foundation and the future of our bank. I want to spend just one minute on the first one. Whether high tech or high touch, we offer a more personalized level of service than our larger bank or money center bank competitors. Relative to our smaller competitors, we offer more tools and sophistication to meet their needs. As a result, we occupy a unique and advantaged position in what we believe to be attractive markets and in attractive businesses.

Tim Crane: Great. Thank you, Rich. At the beginning of the call, I briefly mentioned our three strategic priorities. Delivering an exceptional customer service, generating disciplined and strategic growth across our businesses with prudent risk management, and I would add, through all market cycles, and investing in our foundation and the future of our bank. I want to spend just one minute on the first one.

Speaker #2: I want to spend just one minute on the first one. Whether high-tech or high-touch, we offer a more personalized level of service than our larger bank or money center bank competitors.

Tim Crane: Whether high tech or high touch, we offer a more personalized level of service than our larger bank or money center bank competitors. Relative to our smaller competitors, we offer more tools and sophistication to meet their needs. As a result, we occupy a unique and advantaged position in what we believe to be attractive markets and in attractive businesses.

Speaker #2: And relative to our smaller competitors, we offer more tools and sophistication to meet their needs. As a result, we occupy a unique and advantaged position in what we believe to be attractive markets and in attractive businesses.

Speaker #2: And in the second half of the year, we will open several branches to continue to expand market share and to build franchise value in key communities.

Timothy Crane: In H2, we will open several branches to continue to expand market share and to build franchise value in key communities. We'll also supplement that with continued investment in the digital capabilities that provide flexibility and convenience for our customers. For us, it's all about the customer, and this unwavering focus is largely what has led to the consistent results we have delivered. What does this mean for Q2 and to a degree, for the remainder of the year? We expect outsized loan growth in Q2, largely from our Property and Casualty premium finance business, which is seasonally very strong in Q2. Longer term, our pipelines are solid, and we expect to deliver mid- to high single-digit loan growth for the remainder of the year.

Tim Crane: In H2, we will open several branches to continue to expand market share and to build franchise value in key communities. We'll also supplement that with continued investment in the digital capabilities that provide flexibility and convenience for our customers. For us, it's all about the customer, and this unwavering focus is largely what has led to the consistent results we have delivered. What does this mean for Q2 and to a degree, for the remainder of the year?

Speaker #2: We will also supplement that with continued investment in digital capabilities that provide flexibility and convenience for our customers. For us, it's all about the customer, and this unwavering focus is largely what has led to the consistent results we have delivered.

Speaker #2: So, what does this mean for the second quarter and, to a degree, for the remainder of the year? We expect outsized loan growth in the second quarter, largely from our property and casualty premium finance business, which is seasonally very strong in Q2.

Tim Crane: We expect outsized loan growth in Q2, largely from our Property and Casualty premium finance business, which is seasonally very strong in Q2. Longer term, our pipelines are solid, and we expect to deliver mid- to high single-digit loan growth for the remainder of the year.

Speaker #2: Longer term, our pipelines are solid, and we expect to deliver mid- to high-single-digit loan growth for the remainder of the year. Combined with the stable margin Dave mentioned earlier at around 3.5%, we expect solid net interest income growth in the coming quarters.

Timothy Crane: Combined with the stable margin Dave mentioned earlier at around 3.5%, we expect solid net interest income growth in the coming quarters. As always, we will work hard to fund our loan growth with a similar level of deposit growth, expanding our base of deposit clients and building franchise value. Expenses will be seasonally higher in Q2 as a result of a full quarter of annual salary increases, increased marketing expense, and you can expect a normalized tax rate for the remainder of the year. That said, we expect overall expenses will be well managed in line with our revenue growth and will result in operating leverage for the year. With respect to capital, we have reviewed the new proposals.

Tim Crane: Combined with the stable margin Dave mentioned earlier at around 3.5%, we expect solid net interest income growth in the coming quarters. As always, we will work hard to fund our loan growth with a similar level of deposit growth, expanding our base of deposit clients and building franchise value. Expenses will be seasonally higher in Q2 as a result of a full quarter of annual salary increases, increased marketing expense, and you can expect a normalized tax rate for the remainder of the year.

Speaker #2: As always, we will work hard to fund our loan growth with a similar level of deposit growth, expanding our base of deposit clients and building franchise value.

Speaker #2: Expenses will be seasonally higher in Q2 as a result of a full quarter of annual salary increases, increased marketing expense, and you can expect a normalized tax rate for the remainder of the year.

Speaker #2: That said, we expect overall expenses will be well managed, in line with our revenue growth, and will result in operating leverage for the year.

Tim Crane: That said, we expect overall expenses will be well managed in line with our revenue growth and will result in operating leverage for the year. With respect to capital, we have reviewed the new proposals.

Speaker #2: With respect to capital, we have reviewed the new proposals. With the proposed standardized approach, we estimate an approximate 6 to 7% reduction in risk-weighted assets, or said differently, about a 60 to 70 basis point improvement in CET1 if adopted in their present form.

Timothy Crane: With the proposed standardized approach, we estimate an approximate 6% to 7% reduction in risk-weighted assets, or said differently, about a 60 to 70 basis points improvement in CET1 if adopted in their present form. We're evaluating the IRBA approach, which is a bit more involved and requires some assumptions at this point. If it turns out to be more beneficial, it would likely be a result of the treatment on investment-grade loans and some of the retail activity. Overall, we feel good about our momentum and believe we are well-positioned for the remainder of 2026. One final note. I'd like to take a moment to thank two of our longstanding board members who will conclude their service at our annual meeting next month. H. Patrick Hackett Jr. joined our board in 2008 and has served as chairman of the board for the past nine years.

Tim Crane: With the proposed standardized approach, we estimate an approximate 6% to 7% reduction in risk-weighted assets, or said differently, about a 60 to 70 basis points improvement in CET1 if adopted in their present form. We're evaluating the IRBA approach, which is a bit more involved and requires some assumptions at this point. If it turns out to be more beneficial, it would likely be a result of the treatment on investment-grade loans and some of the retail activity.

Speaker #2: We're evaluating the IRBA approach, which is a bit more evolved and requires some assumptions at this point. If it turns out to be more beneficial, it would likely be a result of the treatment on investment-grade loans and some of the retail activity.

Speaker #2: Overall, we feel good about our momentum and believe we are well positioned for the remainder of 2026. One final note: I'd like to take a moment to thank two of our long-standing board members, who will conclude their service at our annual meeting next month.

Tim Crane: Overall, we feel good about our momentum and believe we are well-positioned for the remainder of 2026. One final note. I'd like to take a moment to thank two of our longstanding board members who will conclude their service at our annual meeting next month. H. Patrick Hackett Jr. joined our board in 2008 and has served as chairman of the board for the past nine years.

Speaker #2: Pat Hackett joined our board in 2008 and has served as chairman of the board for the past nine years. And Bill Doyle, who joined the board in 2017.

Timothy Crane: Bill Doyle, who joined the board in 2017. Both Pat and Bill have provided invaluable guidance over the years, and we are grateful for all they have done to help us deliver value for our shareholders. I also want to congratulate Brian Kenney, who's expected to succeed Pat as chairman pending his re-election at the upcoming annual meeting. We are very fortunate to have an engaged and thoughtful group of directors. Their perspective and insights are helpful to me and our entire management team and are certainly a big part of our success. With that, Latif, we're happy to take questions.

Tim Crane: Bill Doyle, who joined the board in 2017. Both Pat and Bill have provided invaluable guidance over the years, and we are grateful for all they have done to help us deliver value for our shareholders. I also want to congratulate Brian Kenney, who's expected to succeed Pat as chairman pending his re-election at the upcoming annual meeting.

Speaker #2: Both Pat and Bill have provided invaluable guidance over the years, and we are grateful for all they have done to help us deliver value for our shareholders.

Speaker #2: I also want to congratulate Brian Kenney who's expected to succeed Pat as chairman pending his reelection at the upcoming annual meeting. We are very fortunate to have an engaged and thoughtful group of directors, their perspective and insights are helpful to me and our entire management team, and are certainly a big part of our success.

Tim Crane: We are very fortunate to have an engaged and thoughtful group of directors. Their perspective and insights are helpful to me and our entire management team and are certainly a big part of our success. With that, Latif, we're happy to take questions.

Speaker #2: With that, Latif, we're happy to take questions.

Speaker #3: Thank you. As a reminder to ask a question, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jon Arfstrom of RBC Capital Markets. Your line is open, John.

Speaker #3: Please stand by while we compile the Q&A roster. Our first question: comes from the line of John Ostrom. Of RBC Capital Markets, your line is open, John.

Jon Arfstrom: Hey, thanks. Good morning, everyone.

Speaker #4: Hey, thanks. Good morning, everyone.

Speaker #5: Hey, John.

Timothy Crane: Hey, John. Morning, John.

Richard Murphy: Hey, John.

Speaker #6: Good morning, John.

Tim Crane: Morning, John.

Speaker #4: Hey, hey, good morning. maybe, Rich or Tim, a question for you on the period on loan growth that you talked about, the period end being higher than average.

Jon Arfstrom: Hey, good morning. Maybe Rich or Tim, a question for you on the period-end loan growth that you talked about, the period end being higher than average. Anything you would call out in terms of the trends from early in the quarter versus the period end strength? And then any impacts you've seen at all from some of the macro uncertainty in terms of the pipelines?

Speaker #4: Anything you would call out in terms of the trends from early in the quarter versus the period-end strength, and then any impacts you've seen at all from some of the macro uncertainty in terms of the pipelines?

Timothy Crane: No. We had some payoffs at the first part of the year that kind of subdued some of that growth. It was just kind of timing, nothing more than that. Good momentum really through the quarter. We did have some strong warehouse line growth right at the end of the quarter that helped as well. I wouldn't say anything really atypical that I would point to.

Richard Murphy: No. We had some payoffs at the first part of the year that kind of subdued some of that growth. It was just kind of timing, nothing more than that. Good momentum really through the quarter. We did have some strong warehouse line growth right at the end of the quarter that helped as well. I wouldn't say anything really atypical that I would point to.

Speaker #5: No. You know, I—we had some payouts, you know, at the first part of the year that kind of subdued some of that growth.

Speaker #5: I mean, it was just kind of timing, nothing more than that. You know, good momentum really through the quarter. We did have some strong warehouse line growth right at the end of the quarter that helped as well.

Speaker #5: but, yeah, I wouldn't say anything really atypical that I would point to. just kind of timing on prepayments and some, some end-of-quarter, warehouse line growth.

Richard Murphy: Just kind of timing on prepayments and some end of quarter warehouse line growth. As it relates to overall sentiment out there, I think that we still feel pretty good. The customers we talk to, I'd say feel that the economy, certainly in the Midwest, still feels pretty good. Tim pointed this out. Our pipelines in the C&I space right now are probably as good as they've ever been. Part of that is because of some of that optimism. Part of it is just because where we sit relative to the competition in Chicago. Right now it feels like we're in a pretty good spot there.

Speaker #5: And as it relates to, you know, overall sentiment out there, I think that we still feel pretty good. The customers we talk to, I'd say, feel that the economy, certainly in the Midwest, still feels pretty good.

Speaker #5: As Tim pointed this out, we're having—our pipelines in the CNI space right now are probably as good as they've ever been.

Richard Murphy: Tim pointed this out. Our pipelines in the C&I space right now are probably as good as they've ever been. Part of that is because of some of that optimism. Part of it is just because where we sit relative to the competition in Chicago. Right now it feels like we're in a pretty good spot there.

Speaker #5: part of, part of that is because of some of that optimism. Part of it is just because where we sit relative to, you know, the competition in Chicago.

Speaker #5: So, you know, right now it feels like we're in a pretty good spot there.

Speaker #4: Okay, good. And then, maybe for you, Dave, on mortgage—it's probably the quarter to ask about mortgage, given some of the typical seasonalities—but I think it was a little better than I expected.

Jon Arfstrom: Okay, good. Maybe for you, Dave, on mortgage. It's probably the quarter to ask about mortgage, given some of the typical seasonalities, but I think it was a little better than I expected, and just curious what kind of an outlook you have for the typical seasonal increase in volumes and then I guess warehouse balances as well, some of the puts and takes. Thanks.

Speaker #4: And just curious what kind of an outlook you have for the typical seasonal increase in volumes and, and then, I guess, warehouse balances as well.

Speaker #4: some of the puts and takes. Thanks.

Speaker #5: Yeah, you know, I guess I'd say it was a little bit better first quarter than maybe we would expect, as you said, because during part of the quarter, rates got down below 6% for just a little bit of time.

David Dykstra: Yeah. I guess I'd say it was a little bit better Q1 than maybe we'd expect, as you said, because during part of the quarter, rates got down below 6% for just a little bit of time. There was a period there where applications did pick up, but then rates popped back up and really applications came down to sort of scraping the bottom again. I think for three years now, I said I've been hopeful about a good spring buying season, and we are hopeful again this year. Given our rates, that we aren't seeing a huge pickup yet. Again, I think we think that rates have to get down around 6% or below for there to be any meaningful pickup.

Speaker #5: So there was a period there where applications did pick up. But then, then rates popped back up and, and, and really, applications came down to sort of, scraping the bottom again.

Speaker #5: So, you know, I think for three years now, I’ve said I've been hopeful about a good spring buying season, and we are hopeful again this year.

David Dykstra: I think for three years now, I said I've been hopeful about a good spring buying season, and we are hopeful again this year. Given our rates, that we aren't seeing a huge pickup yet. Again, I think we think that rates have to get down around 6% or below for there to be any meaningful pickup.

Speaker #5: But given our rates at, we aren't seeing, a huge pickup yet. but, you know, hopefully, as we get into the spring season here, th-that does pick up.

Speaker #5: But, again, I think we think that, you know, rates have to get down around 6% or below for there to be any meaningful pickup.

Speaker #5: So, barring that, I think we probably stick with our revenue in, in the 20 to 30 million dollar range a-as we've been fairly consistently for a number of quarters here.

David Dykstra: Barring that, I think we probably stick with our revenue in the $20 to $30 million range as we've been fairly consistently for a number of quarters here. If you remember, half of that is servicing income. Mortgage warehouse, again, I think that's going to just be dependent upon rates. If we see the rates, the ten-year come down and mortgage rates get close to 6%, then I think we do pretty well in that regard. If they stay up in the mid-6s as far as mortgage rates go, it's probably, again, subdued on that front also.

Speaker #5: And if you remember, half of that is servicing in income. So, mortgage warehouse, you know, again, I think that's going to be just dependent upon rates.

Speaker #5: If, if, if we see the rates—a 10-year—come down and mortgage rates get close to 6, then I, you know, I think we do pretty well in that regard.

Speaker #5: If they s if they stay up in, you know, in the mi-mid 6s, as far as mortgage rates go, it's, it's probably, again, subdued on that front also.

Speaker #6: Yeah, I would only add on the mortgage warehouse, you know, our growth is a little larger there than it is in mortgage in general because we've taken share from some of our competitors and continue to do a nice job of adding very high-quality mortgage originators that, you know, are generally on the larger side.

Timothy Crane: Yeah. I would only add on the mortgage warehouse. Our growth is a little larger there than it is mortgage in general because we've taken share from some of our competitors and continue to do a nice job of adding very high-quality mortgage originators that, generally on the larger side.

Tim Crane: Yeah. I would only add on the mortgage warehouse. Our growth is a little larger there than it is mortgage in general because we've taken share from some of our competitors and continue to do a nice job of adding very high-quality mortgage originators that, generally on the larger side.

Speaker #4: Yeah. Okay. All right. Thanks a lot. Appreciate it.

Jon Arfstrom: Yep. Okay. All right. Thanks a lot. Appreciate it.

Speaker #5: Thanks, John.

Timothy Crane: Thanks, Jon.

Tim Crane: Thanks, Jon.

Operator: Thank you. Our next question comes from the line of Nathan Race of Piper Sandler. Your line is open, Nathan.

Speaker #3: Thank you. Our next question comes from the line of Nathan Race, a Piper Sandler. Your line is open, Nathan.

Speaker #7: Hey, guys. Good morning. Thanks for taking the questions.

Nathan Race: Hey, guys. Good morning. Thanks for taking the questions.

Speaker #3: You bet.

Timothy Crane: You bet.

Tim Crane: You bet.

Nathan Race: Tim, going back to your comments around the insurance premium finance portfolio and the outsized growth that you expect here in Q2, as we've discussed in the past, I mean, overall loan growth is, I think, 19% linked quarter annualized in Q2 of last year, led by the P&C portfolio. I guess I'm just curious, are you seeing any softening in volumes just given what's going on in the P&C market these days, and also kind of what you're seeing within pricing as well within that book?

Speaker #7: Tim, going back to your comments around the, insurance premium finance portfolio and the outsized growth that you expect here in 2Q, as we discussed in the past, I mean, you know, overall loan growth is, I think, you know, 19% in quarter annualized in the second quarter of last year.

Speaker #7: You know, led by that, P&C portfolio. I guess I'm just curious, are you seeing any softening in volumes just given what's going on in the P&C market these days and also kind of what you're seeing within pricing as well within that book?

Speaker #3: Yeah. And R-Rich can help me here, but, you know, we don't have as much tailwind as we've had from premium growth in prior years.

Timothy Crane: Yeah. Rich can help me here, but we don't have as much tailwind as we've had from premium growth in prior years. I think premiums are pretty flat to maybe up slightly as opposed to up quite a bit in prior periods. That'll play a little bit of a role. We continue to grow units, which is encouraging for the growth of our business. I think pricing is fairly rational in that market. As we've talked about in the past, a lot of these are smaller loans where clients, frankly, are just managing their cash flow, and so small differences in rate tend not to move that very much. We continue to expect a good Q2 from a volume standpoint, and pricing's rational.

Tim Crane: Yeah. Rich can help me here, but we don't have as much tailwind as we've had from premium growth in prior years. I think premiums are pretty flat to maybe up slightly as opposed to up quite a bit in prior periods. That'll play a little bit of a role. We continue to grow units, which is encouraging for the growth of our business. I think pricing is fairly rational in that market.

Speaker #3: I, I think premiums are pretty flat to maybe up slightly as opposed to up quite a bit in prior periods. so th-that'll play a, a little bit of a role.

Speaker #3: But we continue to, to grow units, which is encouraging for the, the growth of our business. I, I think pricing is fairly irrational in that market as we've talked about in the past.

Tim Crane: As we've talked about in the past, a lot of these are smaller loans where clients, frankly, are just managing their cash flow, and so small differences in rate tend not to move that very much. We continue to expect a good Q2 from a volume standpoint, and pricing's rational.

Speaker #3: A lot of these are smaller loans where clients, frankly, are just managing their cash flow. And so, small differences in rate tend not to move that very much.

Speaker #3: And so we, we continue to expect a good second quarter from a volume standpoint, and pricing's rational.

Speaker #5: Yeah, I—the only thing I would add is, we've made a, you know, significant investment in the technology associated with that business.

David Dykstra: Yeah. The only thing I would add is, we've made a significant investment in the technology associated with that business, and I think that, as Tim pointed out, the volume that you see is reflective of that. I think that for our customers, they really do see us as the go-to provider in that space. We're just going to continue to do that. The overall market can move up or down. Our job is just to be the premier provider in that space, and it continues to, as Tim pointed out, show in the numbers.

Richard Murphy: Yeah. The only thing I would add is, we've made a significant investment in the technology associated with that business, and I think that, as Tim pointed out, the volume that you see is reflective of that. I think that for our customers, they really do see us as the go-to provider in that space. We're just going to continue to do that. The overall market can move up or down. Our job is just to be the premier provider in that space, and it continues to, as Tim pointed out, show in the numbers.

Speaker #5: And I think that, as Tim pointed out, the volume that you see is reflective of that. I think that, you know, for our customers, they really do see us as the go-to provider in that space.

Speaker #5: And so we're just going to continue to do that. You know, the overall market can, you know, move up or down. Our job is just to be the premier provider in that space.

Speaker #5: And it continues to, as Tim pointed out, show in the numbers.

Speaker #7: Okay, great, that's helpful. And then, question for Dave—maybe curious if you can help us just in terms of kind of a guidepost, in terms of a starting point for expenses in light of the seasonality.

Nathan Race: Okay, great. That's helpful. Then question for Dave. Maybe curious if you can help us just in terms of kind of a guidepost in terms of a starting point for expenses in light of the seasonality and the full quarter impact of the increases that you mentioned within the comp line for the Q2. If you're still kind of thinking about annualizing the Q4 expense number from last year and layering on some mid-single digit growth to get to the full year number for 2026.

Speaker #7: And the, full quarter impact of the, increases that you mentioned within the comp line. for the second quarter and, you know, if you're still kind of thinking about, you know, annualizing the 4Q, expense number from last year and, you know, layering on some mid-single-digit growth, to get to the full year number for 2026.

Speaker #5: Yeah. Hey, it the first quarter tends to be a, a low expense score. I think the last three years now, we've seen it actually dip a little bit from the fourth quarter.

David Dykstra: Yeah. The Q1 tends to be a low expense quarter. I think the last 3 years now, we've seen it actually dip a little bit from the Q4. That trend is consistent with what we've seen in the last couple of years. I'd say our outlook is still, I guess the way I'll frame it is mid-single digit year-over-year expense growth. Which means, as you know, we generally have a pickup in the Q2 and the Q3 because of the advertising and marketing spends that we have for baseball sponsorships, summertime sponsorships, and the like. We also generally have a little bit higher base salaries because we get a full quarter of the base salary increases that went into effect February 1 versus two months.

Speaker #5: So that, that trend is consistent with what we've seen the last couple of years. and, and I, I'd say our, our, our outlook is still I, I guess the way I'll frame it is mid-single-digit, year-over-year expense growth.

Speaker #5: which means, as y as you know, we generally have a pickup in the s a second quarter. And the third quarter, because of the advertising and marketing, spends that we have for, baseball sponsorships and summertime sponsorships and the like.

David Dykstra: Which means, as you know, we generally have a pickup in the Q2 and the Q3 because of the advertising and marketing spends that we have for baseball sponsorships, summertime sponsorships, and the like. We also generally have a little bit higher base salaries because we get a full quarter of the base salary increases that went into effect February 1 versus two months.

Speaker #5: And, you know, we also generally have a little bit, higher, you know, base salaries because we get a full quarter of the base salary increases that go in and to affect February 1st versus two months.

Speaker #5: And then T&E is generally, seasonally low in the first quarter, so you'd expect a little increase there. So I would I would say if you looked at, the increases from the, the prior qu few years, quarters, a-and looked at that directionally, you'd you'd I, I think I think you could look at that as a guide to what to expect, as far as overall expense growth, going into the second quarter here.

David Dykstra: Then T&E is generally seasonally low in Q1, so you'd expect a little increase there. I would say if you looked at the increases from the prior few years' quarters and looked at that directionally, I think you could look at that as a guide to what to expect as far as overall expense growth going into Q2 here. Overall, we still expect mid-single digit year-over-year expense growth, 2026 versus 2025.

Speaker #5: But overall, we still expect sort of mid-single-digit year-over-year expense growth in ’26 versus ’25.

Speaker #7: Okay. Great. if I could just sneak one last one in on the margin, you know, it seems like you guys have kind of outperformed, kind of, the expectations within the last couple of quarters.

Nathan Race: Okay, great. If I could just sneak one last one in on the margin. It seems like you guys have outperformed the expectations within the last couple of quarters. I imagine with some of the swaps and collars you have rolling off this year, there may not be a need or an appetite to replace some of those. I'm just curious or thinking about can the margin grind higher you think from here, as long as the Fed remains on pause, particularly with some of the hedges rolling off and just given the more rational deposit pricing competition in Chicago these days? I imagine new loan production is probably accretive to the portfolio yield of, call it 6.14% coming out of the quarter.

Speaker #7: And, you know, I imagine with some of the swaps and colleges you have rolling off this year, there may not be a need or an appetite to replace some of those.

Speaker #7: so I'm just curious, they're kind of thinking about kind of can the margin grind higher? You think from here as long as the Fed remains on pause, particularly with some of the hedges rolling off and just giving them more rational deposit pricing competition in Chicago these days and I imagine, you know, new loan production, it's probably accretive to the portfolio yield of, call it, 6.14% coming out of the quarter.

Nathan Race: I'm just curious or thinking about can the margin grind higher you think from here, as long as the Fed remains on pause, particularly with some of the hedges rolling off and just given the more rational deposit pricing competition in Chicago these days? I imagine new loan production is probably accretive to the portfolio yield of, call it 6.14% coming out of the quarter.

Speaker #5: Yeah, I think our view on it is, like we said before, we think we're fairly neutral on, on the margin now, even if rates go up one or two times or down one or two times.

David Dykstra: Yeah. I think our view on it is, like we said before, we think we're fairly neutral on the margin now. Even if rates go up 1 or 2 times or down 1 or 2 times, we really feel we're fairly neutral. You'll notice in the deck, we added 3 new swaps during the quarter, with swap rates ranging in the mid-3 range up into the 360s. They're actually very close to what the one-month SOFR is right now. We continue to replace the swaps out into the future because we do think that managing the margin to try to stay neutral in the 350s range is still prudent. We believe we'll stay there. We actually think probably loans are coming on in the low-six range and deposits will be relatively flat too.

Speaker #5: We, we really feel we're fairly neutral. You'll notice in the deck we added, three new swaps during the, the quarter. with, with, swap rates ranging, you know, in the in the mid-three range, up into the 360s.

Speaker #5: So they're actually very close to what the one-month SOFR is right now. So we continue to replace the swaps out into the future.

David Dykstra: We continue to replace the swaps out into the future because we do think that managing the margin to try to stay neutral in the 350s range is still prudent. We believe we'll stay there. We actually think probably loans are coming on in the low-six range and deposits will be relatively flat too. We think we hold the yields and the rates right now and hold the margin relatively flat in the 350s range going forward.

Speaker #5: ’Cause we do think that managing the margin to try to stay neutral in the 350s range is still prudent. So, we believe we’ll stay there.

Speaker #5: We, we actually think probably loans are coming on in the low 6 range. And, and deposits, will be relatively flat too. So I we, we just we, we think we sort of hold the, the yields and the rates right now and, and hold the margin, relatively flat in the 350s range going forward.

David Dykstra: We think we hold the yields and the rates right now and hold the margin relatively flat in the 350s range going forward.

Speaker #7: Okay.

Nathan Race: Okay.

Speaker #5: And remember, this, this quarter had two basis points of benefit from the, the day count. So, you'll get one of those back next quarter because you have one more one more day in the in the quarter.

David Dykstra: Remember, this quarter had two basis points of benefit from the day count. You'll get one of those back next quarter because you have one more day in the quarter. It's very neutral, very flat, and we're trying to maintain that.

Speaker #5: But, but it's very real, very, very neutral, very flat, and we're, we're trying to maintain that.

Speaker #7: Understood. And just to clarify, Dave, you mentioned kind of incremental deposit growth these days is kind of neutral to your all-in kind of interest-bearing deposit cost.

Nathan Race: Understood. Just to clarify, Dave, you mentioned incremental deposit growth these days is neutral to your all-in and interest-bearing deposit costs. Is that what you were alluding to?

Speaker #7: Is that what you were alluding to?

Speaker #5: yeah. I would think that the, the, the loan rates and the deposit rates would be relatively, consistent next quarter barring some move by the Fed and our market rates.

David Dykstra: Yeah. I would think that the loan rates and deposit rates would be relatively consistent next quarter, barring some move by the Fed in our market rates.

Speaker #7: Understood. I appreciate all the color. Congrats on another great quarter, guys. Thanks.

Nathan Race: Understood. I appreciate all the color. Congrats on another great quarter, guys. Thanks.

Nathan Race: Understood. I appreciate all the color. Congrats on another great quarter, guys. Thanks. Thanks, Dave.

Nathan Race: Thanks, Dave.

Speaker #8: Thanks, Nate.

Operator: Thank you. Our next question comes from the line of Janet Lee of TD Cowen. Please go ahead, Janet.

Speaker #9: Thank you. Our next question comes from the line of Janet Lee of TD Cowen. Please go ahead, Janet.

Speaker #10: Hello. So. Not only is your period on loans almost a billion point two sorry, 1.2 billion above your average for the quarter, but your period on non-interest-bearing deposits is, is also 1.1 billion above the average.

Janet Lee: Hello. Not only is your period end loans almost $1.2 billion above your average for the quarter, but your period end non-interest bearing deposits is also $1.1 billion above the average. I would assume a lot of that is you're just taking market share with your service as a differentiator, but I wanted to see if there is any adjustments that should be happening in Q2, or is that a good run rate heading into Q2?

Speaker #10: I would assume a lot of that is, you know, you just taking market share, with your service as a differentiator. But I wanted to see if there are any adjustments that should be happening in the second quarter, or if that is a good run rate heading into the second quarter?

Speaker #8: Yeah. Janet, a couple of things there. You know, one, you're correct. We think we continue to win business in the market and, and grow our deposit base.

David Dykstra: Yeah, Janet, a couple of things there. One, you're correct. We think we continue to win business in the market and grow our deposit base. End of year is a little bit lumpy with respect to non-interest bearing deposits, and I think the better way to look at that is probably to look at the average non-interest bearing deposits over the period. It'll continue to move around a little bit, but we had a very nice quarter end and continue to look to build deposit franchise at the bank.

Tim Crane: Yeah, Janet, a couple of things there. One, you're correct. We think we continue to win business in the market and grow our deposit base. End of year is a little bit lumpy with respect to non-interest bearing deposits, and I think the better way to look at that is probably to look at the average non-interest bearing deposits over the period. It'll continue to move around a little bit, but we had a very nice quarter end and continue to look to build deposit franchise at the bank.

Speaker #8: end of year is a little bit lumpy with respect to non-interest-bearing deposits. And, I think the, the better way to look at that is probably to look at the average non-interest-bearing deposits, over the period.

Speaker #8: it'll continue to move around a little bit. But, we, we had a very nice quarter end and continued to look to, to build the bo deposit franchise at the bank.

Speaker #10: Got it. Thank you. And for so your net interest margin and the 3.5 handle for the rest of the three quarters in 2026, your second quarter NII should be you know, it should benefit a lot from the str-strengthened period on balances.

Janet Lee: Got it. Thank you. Four, so your net interest margin and the 3.5 handle for the rest of the 3 quarters in 2026, your Q2 NII should benefit a lot from that strength and period end balances. It seems to me that double-digit kind of NII growth in 2026 is not unrealistic. Is there anything that I'm missing here, and would you still be looking for that mid-single digit kind of growth and expense if that were to be the case? How should we think about the level of PLL that you want to achieve for the year? Thanks.

Speaker #10: it seems to me that double-digit kind of NII growth in 2026 is not unrealistic. i-am I am I is there any, anything that I'm missing here?

Speaker #10: And would you s-st-still be looking for that mid-single-digit kind of growth in expensive? That were to be the case, how should we think about the level of POL that you wanna achieve for the year?

Speaker #10: Thanks.

Speaker #5: Yeah. Well, I, you know, I don't I don't think if we have a stronger loan growth, for instance, I don't think we're gonna have a significant increase in our expenses.

David Dykstra: Yeah. If we have a stronger loan growth, for instance, I don't think we're going to have a significant increase in our expenses. I think we have an infrastructure that can handle that. You're right that Q2 will be a very strong quarter because of the seasonality. Plus or minus $1 billion in Q2, we would expect just the premium finance to be that way. We do expect a very strong Q2, which should be above, obviously, our range. Looking out two more quarters beyond that, given the volatile interest rate environment, I think we still stay within the high single-digit year expectations. Is it possible that the economy keeps plugging along really great and we do better than expected?

Speaker #5: I, I think we have an infrastructure that can, can handle that. And you're you know, y-you're, you're, you're right that the second quarter will, will be a very strong quarter because of the seasonality of the, premium finance loans, generally that's sort of plus or minus a billion dollars in the second quarter.

Speaker #5: And we would expect just the premium finance to be, be that way. So, and we, we do expect a very strong second quarter, which, which should be at, at above, obviously, the, the our range.

Speaker #5: But, you know, looking out two more quarters beyond that, given the volatile interest rate environment, I think we still stay within that mid to high single-digit year expectations.

David Dykstra: Looking out two more quarters beyond that, given the volatile interest rate environment, I think we still stay within the high single-digit year expectations. Is it possible that the economy keeps plugging along really great and we do better than expected?

Speaker #5: You know, is it possible that the economy keeps plugging along really great and we do better than expected? Possibly. But we've always consistently thought that the pipelines and the business plan produce at least mid- to high single-digit loan growth.

David Dykstra: Possibly, but we've always consistently thought that the pipelines and the business plan would produce at least mid to high single-digit loan growth. We think for the year that's probably still something we'll be with, although given the results so far, you'd probably be at the higher end of that range.

Speaker #5: And we think for the year, that's probably still something we'll be with, although given the results so far, you'd probably be at the higher end of that range.

Speaker #10: Thank you.

Janet Lee: Thank you.

Operator: Thank you. Our next question comes from the line of David Chiaverini of Jefferies. Please go ahead, David.

Speaker #9: Thank you. Our next question comes from the line of David Chiaverini of Jefferies. Please go ahead, David.

Speaker #11: Hi, thanks for taking the question. So I wanted to drill into deposit competition. We're hearing some mixed messages from one of the larger regional banks in the Midwest, saying competition is fairly intense in the Midwest.

David Chiaverini: Hi. Thanks for taking the question. I wanted to drill into deposit competition. We're hearing some mixed messages from one of the larger regional banks in the Midwest in saying competition is fairly intense in the Midwest. Is this impacting Wintrust much?

Speaker #11: Is this impacting WINTRUST much?

Speaker #8: David, I'd say it's still actually fairly reasonable in Chicago. As you know, we have a strong market share in kind of three markets: southeastern Wisconsin, northern Illinois/Chicago area, and Grand Rapids.

David Dykstra: David Dykstra, I'd say it's still actually fairly reasonable in Chicago. As you know, we have a strong market share in kind of three markets: southeastern Wisconsin, northern Illinois, Chicago area, and Grand Rapids. Pretty rational pricing. Promotional CDs kind of at the 4% range. Promotional money market in the low 3s. I don't think we're seeing anything atypical at this point. We appreciate that certainly other markets and maybe some of the Midwest markets are a little frothy, but feels okay to us.

Speaker #8: pretty rational pricing, you know, promotional CDs kind of at the 4% range, promotional money market, you know, in the low 3s. I, I you know, I don't think we're seeing anything atypical at this point.

Speaker #8: But, we appreciate that, you know, certainly other markets and, and maybe some of the WIN Midwest markets are, are a little frothy. But, feels okay to us.

Speaker #11: Great. Thanks for that. And then shifting over to, you touched on, you know, expenses earlier. Just in terms of positive operating leverage, I think you've spoken previously about 200 basis points or so, for this year.

David Chiaverini: Great. Thanks for that. Shifting over to you touched on expenses earlier. Just in terms of positive operating leverage, I think you've spoken previously about 200 basis points or so for this year. Is that still the expectation, or could we do a little bit better?

Speaker #11: Is that still the expectation, or could we do a little bit better?

Speaker #8: Well, we obviously had a strong first quarter and, to some of the other questions we've answered here, expect a good second quarter.

David Dykstra: Well, we obviously had a strong Q1 and, to some of the other questions we've answered here, expect a good Q2. We'll have to see. We continue to invest in the business. We want to make sure that we're positioning the bank for growth going forward. To your point, the 200 basis points isn't out of the question, and we would obviously work harder to improve on that.

Speaker #8: You know, we'll have to see. We continue to invest in the business. We want to make sure that we're positioning the bank for growth going forward.

Speaker #8: But to your point, the 200 basis points isn't out of the question. And we would obviously work harder to improve on that.

Speaker #11: Very helpful. Thank you.

David Chiaverini: Very helpful. Thank you.

Operator: Thank you. Our next question comes from the line of Brendan Nosal of Hovde Group. Please go ahead, Brandon.

Speaker #9: Thank you. Our next question. Comes from the line of Brandon Rudd of Stevens, Inc. Please go ahead, Brandon.

Brendan Nosal: Hi. I guess a few of my questions have been already answered. If I could ask one on credit. I noticed the special mention increase about 20% during the quarter. If I connect the dots with the allowance by loan portfolios, it looks like it stemmed from the commercial portfolio. Is that accurate? If not, could you maybe go into that increase a bit?

Brandon Rud: Hi. I guess a few of my questions have been already answered. If I could ask one on credit. I noticed the special mention increase about 20% during the quarter. If I connect the dots with the allowance by loan portfolios, it looks like it stemmed from the commercial portfolio. Is that accurate? If not, could you maybe go into that increase a bit?

Speaker #12: Hi. I guess a few a few of the questions I've been already answered. If I could ask one on credit, I, I, I know it's a special mentioned increase about 20% during the quarter.

Speaker #12: If I connect the docs with the, I'll, I'll, I'll allowance by loan portfolios, it looks like it stemmed from the commercial portfolio. Is that accurate?

Speaker #12: And if not, could you maybe go into that increase a bit?

Speaker #5: Yeah. It is accurate. I mean, it's in the commercial portfolio. You know, I, you know, it's, it's hard when you look at those numbers because it, it we're s at such low levels that, you know, periodic increases draw attention like this does.

David Dykstra: Yeah, it is accurate. It's in the commercial portfolio. It's hard when you look at those numbers because it's such low levels that periodic increases draw attention like this does. We try to be very active in our loan ratings, and when there are customers that have a little bit of a miss on a quarter, we will make that adjustment. I don't think there's anything systemic here. I think it's really just kind of one-off situations and a couple of different customers. Really no, I'd say, consistency in terms of industry or anything like that. I think it's really just more coincidental. We would anticipate that it'll probably hang around this level here for the next few quarters as far as we can see. Customers generally are operating reasonable results so far. Nothing that I would read into it.

Speaker #5: You know, I w we try to be very, active in our loan ratings. And when there are, customers that have, you know, a, a, a little bit of a miss on a, on a quarter, we will make that adjustment.

Speaker #5: but I don't think there's anything systemic here. I think it's really just, you know, what kind of one-off situations and a couple of, different customers really know, I'd say, consistency in terms of industry or anything like that.

David Dykstra: Really no, I'd say, consistency in terms of industry or anything like that. I think it's really just more coincidental. We would anticipate that it'll probably hang around this level here for the next few quarters as far as we can see. Customers generally are operating reasonable results so far. Nothing that I would read into it.

Speaker #5: So, I think it's really just more coincidental. We would anticipate that, you know, it'll probably hang around this level here for the next, you know, few quarters, as far as we can see.

Speaker #5: You know, customers generally are operating reasonably. Results so far—so nothing that I would read into it.

Speaker #12: Got it. Okay. Thank you. if I if I could ask one on fees, the step up in the operating lease income, I, I think if I look back historically, it's not abnormal to see one or two quarters where it steps up and then, goes back down again.

Brendan Nosal: Got it. Okay. Thank you. If I could ask one on fees. The step-up in the operating lease income, I think if I look back historically, it's not abnormal to see one or two quarters where it steps up and then goes back down again. On a go-forward basis, should we look at that as more of like a $15, $16 million run rate? Or is this $19 million really the new rate going forward?

Brandon Rud: Got it. Okay. Thank you. If I could ask one on fees. The step-up in the operating lease income, I think if I look back historically, it's not abnormal to see one or two quarters where it steps up and then goes back down again. On a go-forward basis, should we look at that as more of like a $15, $16 million run rate? Or is this $19 million really the new rate going forward?

Speaker #12: So, on a go-forward basis, should, sh-should we look at that as more of like a 15, 16 million dollar run rate, or is this 19 really the, the, the new rate going forward?

Speaker #5: You know, it's probably somewhere between the 16 and the 19. Occasionally, you get some gains on some sale of equipment during the quarter.

David Dykstra: It's probably somewhere between the 16 and the 19. Occasionally, you get some gains on some sale of equipment during the quarter. That's normal course of business. We get those each quarter. It's just sort of what's the size of each of those. Probably somewhere in between there would be a good bet. It's not out of the question that it could be 19 again next quarter. There are just some residual gains that come into the portfolio off and on. They happen on a recurring basis. It's just you can't always judge the size of them each quarter.

Speaker #5: But that's normal course of business. We get those each quarter, so it's just sort of the, what's the size of each of those.

Speaker #5: But it's probably somewhere in between there, you know, would be a good bet. But it's not out of the question that it could be 19 again next quarter.

David Dykstra: It's not out of the question that it could be 19 again next quarter. There are just some residual gains that come into the portfolio off and on. They happen on a recurring basis. It's just you can't always judge the size of them each quarter.

Speaker #5: But, you know, there are just some, some residual gains that, that come into the portfolio off and on. And, and, and, and they, they happen on a recurring basis.

Speaker #5: It's just you can't always judge the size of them each quarter.

Speaker #12: Sure. Okay. Thank you for taking my questions.

Brendan Nosal: Sure. Okay. Thanks for taking my questions.

Brandon Rud: Sure. Okay. Thanks for taking my questions.

Speaker #5: Thank you.

David Dykstra: Thank you.

Operator: Thank you. Our next question comes from the line of Jeff Rulis of D.A. Davidson. Please go ahead, Jeff.

Speaker #9: Thank you. Our next question comes from the line of Jeff Rullis of DA Davidson. Please go ahead, Jeff.

Speaker #13: Thanks. Good morning. Just sticking on the fee income conversation—the wealth management side, really pretty impressive. And I wanted to reorient with your thoughts on kind of year-over-year growth, or how you see that line item at $42 million.

Jeff Rulis: Thanks. Good morning. Just sticking on the fee income conversation, the wealth management side, really pretty impressive, and wanted to reorient with your thoughts on year-over-year growth or how you see that line item at $42 million is pretty strong. Just the outlook you see from here for this year.

Speaker #13: It's pretty strong. Just the, the outlook you see from here for, for this year.

Speaker #8: Yeah. It's a good question, Jeff. On, you know, on the wealth side, a really nice quarter and a, a business we like and one that we're growing steadily.

Timothy Crane: Yeah. Good question, Jeff. On the wealth side, a really nice quarter and a business we like and one that we're growing steadily. There is an element to the strong growth this quarter that's seasonal and accounts for a little bit more revenue than we would expect in coming quarters. Overall, good news and good momentum for us in that business. Kind of to Dave's answer to the prior question, I would look for something in between Q4 and Q1 as a better number going forward.

Tim Crane: Yeah. Good question, Jeff. On the wealth side, a really nice quarter and a business we like and one that we're growing steadily. There is an element to the strong growth this quarter that's seasonal and accounts for a little bit more revenue than we would expect in coming quarters. Overall, good news and good momentum for us in that business. Kind of to Dave's answer to the prior question, I would look for something in between Q4 and Q1 as a better number going forward.

Speaker #8: There is an element to the strong growth this quarter that's seasonal and accounts for a little bit more revenue than we would expect in coming quarters.

Speaker #8: But overall, you know, good news and good momentum for us in that business. I, I, you know, kind of to Dave's answer to the prior question, I would look for something in between kind of the fourth quarter and the first quarter as a, a better number going forward.

Speaker #12: Okay, appreciate it. And then, maybe just checking in on the M&A conversations — as you guys target, you know, smaller institutions — just trying to get a sense for the appetite and the level of conversations on that front.

Jeff Rulis: Okay. Appreciate it. Maybe just checking in on the M&A conversations as you guys target smaller institutions, just trying to get a sense for the appetite and the level of conversations on that front. Thanks.

Speaker #12: Thanks.

Speaker #8: Yeah, I would say not much change since we last spoke. Obviously, some high-level conversations, but I’d characterize some of that as more exploration than anything else.

Timothy Crane: Yeah, I would say not much change since we last spoke. Obviously, some high-level conversations, but I'd characterize some of that as more exploration than anything else, and no change to our posture. We consider ourselves a disciplined and skilled acquirer. We'll look at opportunities and believe we're well positioned to take advantage of them if they present themselves, but it'd be based on a good strategic fit, good cultural fit. We'll see how things play out here, but well equipped to be opportunistic if the opportunities arise.

Tim Crane: Yeah, I would say not much change since we last spoke. Obviously, some high-level conversations, but I'd characterize some of that as more exploration than anything else, and no change to our posture. We consider ourselves a disciplined and skilled acquirer.

Speaker #8: And no change to our posture. We consider ourselves a disciplined and skilled acquirer. We'll look at opportunities and believe we're well positioned to take advantage of them if they present themselves.

Tim Crane: We'll look at opportunities and believe we're well positioned to take advantage of them if they present themselves, but it'd be based on a good strategic fit, good cultural fit. We'll see how things play out here, but well equipped to be opportunistic if the opportunities arise.

Speaker #8: But it'd be, you know, based on a good strategic fit, good cultural fit, and, you know, we'll see how things play out here. But we're well-equipped to be opportunistic if the opportunities arise.

Speaker #12: Sounds good. Thank you.

Jeff Rulis: Sounds good. Thank you.

Operator: Thank you. Our next question comes from the line of Ben Gerlinger of Citi. Please go ahead, Ben.

Speaker #9: Thank you. Our next question. Comes from the line of Ben Gerlinger of Citi. Please go ahead, Ben.

Benjamin Gerlinger: Hey, good morning.

Ben Gerlinger: Hey, good morning.

Speaker #13: Hey. Good morning.

Speaker #8: Hi, Ben. I was wondering if we could talk about the branch buildout. I've been prepared to mark—I think you said seven. Were these Chicago? And then for Dykstra, I'm assuming that's in the expense card you provided?

Timothy Crane: Hi, Ben.

Tim Crane: Hi, Ben.

Benjamin Gerlinger: I was wondering if we could talk about the branch build-out. In your prepared remarks, I think you said 7. Were these Chicago and then for Dykstra? I'm assuming that's in the expense guide you provided.

Ben Gerlinger: I was wondering if we could talk about the branch build-out. In your prepared remarks, I think you said 7. Were these Chicago and then for Dykstra? I'm assuming that's in the expense guide you provided.

Speaker #8: Yeah. Ben, I should enunciate it. I said several, not seven. But, th-they're i-in each of our three markets, we actually have new branch activity for the second half of the year.

Timothy Crane: Yeah, Ben, I should enunciate. I said several, not seven. In each of our three markets, we actually have new branch activity for the H2 of the year. These are, in some cases, sub-markets that we're not in. In other cases, opportunistic to kind of build as the populations move in these various areas. Nice opportunities for us, and they'll just help us to continue to build out the franchise and the deposit base of the company.

Tim Crane: Yeah, Ben, I should enunciate. I said several, not seven. In each of our three markets, we actually have new branch activity for the H2 of the year. These are, in some cases, sub-markets that we're not in. In other cases, opportunistic to kind of build as the populations move in these various areas. Nice opportunities for us, and they'll just help us to continue to build out the franchise and the deposit base of the company.

Speaker #8: th-these are in some cases, markets, you know, sub-submarkets that we're not in. In other cases, opportunistic to kind of build as the population's moving in these various areas.

Speaker #8: But, nice opportunities for us. And they'll just help us to continue to build out the franchise and the deposit base of the company.

Speaker #5: And, and it would be included in our expense, forecast that we just talked about.

David Dykstra: It would be included in our expense forecast that we just talked about.

Speaker #8: Gotcha. Okay, that's helpful. And then—with these kind of new branches—should we expect any sort of intentional marketing, potentially, like over market rate?

Benjamin Gerlinger: Got you. Okay. That's helpful. With these kind of new branches, should we expect any sort of intentional marketing, potentially like over market rate? I know you guys are usually the price setter because you're growing faster, but is there anything that we should maybe expect in terms of just spinning up deposits faster, given that branches take roughly three or four years to break even?

Ben Gerlinger: Got you. Okay. That's helpful. With these kind of new branches, should we expect any sort of intentional marketing, potentially like over market rate? I know you guys are usually the price setter because you're growing faster, but is there anything that we should maybe expect in terms of just spinning up deposits faster, given that branches take roughly three or four years to break even?

Speaker #8: I know you guys are usually the price setter because you're growing faster. But is there anything that we should maybe expect in terms of, like, just spinning up deposits faster given that branches take roughly three to four years to break even?

Timothy Crane: Well, yes would be the answer to that question. When we enter new markets, we would want to be aggressive, and we would want to build the size of those branches quickly. I don't think on an overall basis, it's going to change much the trajectory of the financials. I don't think you're going to see something that is easily recognizable. We will try to be very aggressive in the markets we enter.

Tim Crane: Well, yes would be the answer to that question. When we enter new markets, we would want to be aggressive, and we would want to build the size of those branches quickly. I don't think on an overall basis, it's going to change much the trajectory of the financials. I don't think you're going to see something that is easily recognizable. We will try to be very aggressive in the markets we enter.

Speaker #8: W-well, y-yes would be the answer to that question. I mean, when we enter new markets, we would want to be aggressive, and we would want to build the size of those branches quickly.

Speaker #8: I, I don't think on an overall basis it's gonna change much the trajectory of the financials. So I don't I don't think you're gonna see something that is easily recognizable.

Speaker #8: But we will try to be very aggressive in the markets we enter.

Speaker #13: Got it. That's helpful. Appreciate your time, guys.

Benjamin Gerlinger: Got it. That's helpful. Appreciate your time, guys.

Ben Gerlinger: Got it. That's helpful. Appreciate your time, guys.

Speaker #8: You bet.

Timothy Crane: You bet.

Tim Crane: You bet.

Operator: Thank you. Our next question comes from the line of Jared Shaw of Barclays. Please go ahead, Jared.

Speaker #9: Thank you. Our next question. Comes from the line of Jared Shaw of Barclays. Please go ahead, Jared.

Speaker #14: Thanks. Good morning. you know, just I guess listening to the, the optimism around loan growth and the, ability for, for more of a stable margin, I don't know.

Jared Shaw: Thanks. Good morning. Just, I guess, listening to the optimism around loan growth and the ability for more of a stable margin. I don't know. I guess it feels like mid- to high single-digit revenue growth feels pretty conservative. Just given some of those tailwinds, is that the right way to think about it? That maybe there's a little bit of conservatism built in on economic uncertainty or as we get through Q2 and some of the benefits from the premium finance growth, that maybe Q3 and Q4 tail off a little bit.

Speaker #14: I guess it feels like mid to high single-digit, revenue growth feels pretty conservative. just given some of those tailwinds is, is that the right way to think about it?

Speaker #14: That maybe there's a little bit of conservatism built in on, on economic uncertainty? Or, you know, as we get through second quarter and some of the benefits from the premium finance, growth, that, you know, maybe third and fourth quarter tail off a little bit?

Timothy Crane: Yeah. I don't know what I would add to what we've already said. We have visibility to what we think is a very good start to Q2, and then obviously the seasonal P&C business. Pipelines look good for H2. To Dave's point earlier, if that continues, we might be on the high end. We're certainly working to be on the high end, but just don't know what's going on sort of in the market right now with some of the geopolitical stuff. To Rich's point, our clients are still cautiously optimistic, but you get out much more than the six months or so, and the visibility gets a little less clear.

Tim Crane: Yeah. I don't know what I would add to what we've already said. We have visibility to what we think is a very good start to Q2, and then obviously the seasonal P&C business. Pipelines look good for H2. To Dave's point earlier, if that continues, we might be on the high end.

Speaker #8: Yeah. I—I don't, I don't know what I would add to what we've already said. I mean, we have visibility to what we think is a very good start to the second quarter.

Speaker #8: And then, obviously, the seasonal P&C business, pipelines look good for the second half of the year. So, to, to Dave's point earlier, if, if that continues, we, we might be on the high end.

Tim Crane: We're certainly working to be on the high end, but just don't know what's going on sort of in the market right now with some of the geopolitical stuff. To Rich's point, our clients are still cautiously optimistic, but you get out much more than the six months or so, and the visibility gets a little less clear.

Speaker #8: We're certainly working to be on the high end, but just don't know what's going on, sort of, in the market right now with some of the geopolitical stuff.

Speaker #8: And, you know, to Rich's point, our clients are still, you know, cautiously optimistic. But, you know, you get out much more than the six months or so, and the visibility gets a little less clear.

Jared Shaw: Okay, thanks. On capital, I appreciate the comments on sort of the M&A side, but how should we think about capital continuing to grow from here? If there isn't a deal, is there a limit to how high you want to see that go in the near to midterm?

Speaker #14: Okay. Thanks. And then, you know, on capital, I appreciate the comments on, on sort of the M&A side. But how should we think about, you know, capital continuing to grow from here?

Speaker #14: And, you know, if, if there isn't a deal, is there a limit to how high you wanna see that go in the in the near to mid-term?

Timothy Crane: Yeah, sure. We ended the quarter CET1 at 10.4. With substantial growth in Q2, that number probably won't move much, and if we do really well, it might actually move down a little bit. We would expect to grow CET1 the remainder of the year at mid to high single digit loan growth. Once we sort of cross 10.5 or so, and depending what happens with these proposals, we'll evaluate appropriate capital levels and make some decisions. Our approach is probably still ordered in the same fashion. Organic growth, if we happen to find an appropriate acquisition, there may be a need for capital there. Then, as most of you know, we have an authorization in place for stock buybacks, and certainly if we ended up with a lot more capital, we could consider that as an alternative. Hope that helps.

Tim Crane: Yeah, sure. We ended the quarter CET1 at 10.4. With substantial growth in Q2, that number probably won't move much, and if we do really well, it might actually move down a little bit. We would expect to grow CET1 the remainder of the year at mid to high single digit loan growth. Once we sort of cross 10.5 or so, and depending what happens with these proposals, we'll evaluate appropriate capital levels and make some decisions. Our approach is probably still ordered in the same fashion.

Speaker #8: Yeah, sure. So we ended the quarter, CET1 at 10.4, with substantial growth in the second quarter. That number probably won't move much.

Speaker #8: And if we do really well, it might actually move down a little bit. But we would expect to grow CET1 the remainder of the year, at mid- to high-single-digit loan growth.

Speaker #8: You know, once we sort of cross 10 and a half or so, and depending on what happens with these proposals, we'll evaluate appropriate capital levels and make some decisions.

Speaker #8: But our approach is probably still ordered in the same fashion. Organic growth—if we happen to find an appropriate acquisition, you know, there may be a need for capital there.

Tim Crane: Organic growth, if we happen to find an appropriate acquisition, there may be a need for capital there. Then, as most of you know, we have an authorization in place for stock buybacks, and certainly if we ended up with a lot more capital, we could consider that as an alternative. Hope that helps.

Speaker #8: And

Speaker #1: And then is most of you know , we have an authorization in place for stock buybacks and certainly if we ended up with a lot more capital , we could consider that as an alternative .

Jared Shaw: Yep. Thanks.

Speaker #1: So hope that helps

Operator: Thank you. Our next question comes from the line of Brian Frank of Truist. Your line is open, Brian.

Speaker #2: Yep . Thanks

Speaker #3: Thank you Our next question comes from the line of Brian Foreign of Truist . Your line is open . Brian

Brian Frank: Maybe actually piggybacking off that, if no M&A emerges scenario. With some activity happening in and around some markets you touch, are there any opportunities you're watching for team hires, de novo market expansion, opportunistic client acquisitions? Any benefit from M&A happening around you right now?

Speaker #4: Maybe a piggybacking off that if no M&A emerges scenario , you know , with some activity happening in and around some markets , you touch .

Speaker #4: Are there any opportunities you're watching for team hires ? De novo market expansion ? You know , opportunistic client acquisitions . Any benefit from M&A happening around you right now

Timothy Crane: Well, let me try to take pieces of that. We certainly would always look for talented people that we could hire. That tends to happen when somebody gets frustrated with their ability to take care of customers at their financial institution. We've had some success in that area. We typically don't highlight it on these calls. The de novo expansion we're certainly excited about. A number of these communities that we'll enter are very attractive and we believe represent good opportunities. On the M&A front, it happens when it happens. We'll continue to talk to institutions we think would be a cultural and strategic fit. Again, I would say more exploration at this point than serious conversation. That obviously can change, but that'd be candid right now.

Tim Crane: Well, let me try to take pieces of that. We certainly would always look for talented people that we could hire. That tends to happen when somebody gets frustrated with their ability to take care of customers at their financial institution. We've had some success in that area. We typically don't highlight it on these calls. The de novo expansion we're certainly excited about. A number of these communities that we'll enter are very attractive and we believe represent good opportunities.

Speaker #1: Well , let me try to take pieces of that . We certainly would always look for talented people that we could hire . That tends to happen when somebody gets frustrated with their ability to take care of customers at their financial institution .

Speaker #1: And we've had some success in that area . We typically don't highlight it on these calls . The de novo expansion , we're certainly excited about a number of these communities that that will enter our very attractive and we believe represent good opportunities and , you know , on the M&A front , it happens when it happens .

Tim Crane: On the M&A front, it happens when it happens. We'll continue to talk to institutions we think would be a cultural and strategic fit. Again, I would say more exploration at this point than serious conversation. That obviously can change, but that'd be candid right now.

Speaker #1: We'll continue to talk to institutions we think would be a cultural and strategic fit. But again, I would say more exploration at this point than a serious conversation—that obviously can change.

Brian Frank: Okay. Then on the expenses, I've gotten tripped up on this before. Just to clarify, the mid-single digits is off the Q4 annualized base, not the full year 2025?

Speaker #1: But that be candid right now

Speaker #4: Okay . And then on the expenses I've gotten tripped up on this before . So just to clarify , the mid-single digits is off the fourth quarter annualized base , not the full year 2025 .

David Dykstra: Yeah. I think the way to just simplify this is full year 2025, full year 2026, mid-single digits.

Speaker #5: Yeah . You know , I think you could I think the way to just simplify this is full year 2025 , the full year 2026 mid-single digits

Brian Frank: Okay. All right. Thank you.

Speaker #4: Okay. All right. Thank you.

Operator: Thank you. Our next question comes from the line of Christopher McGratty of KBW. Your line is open, Christopher.

Speaker #3: Thank you Our next question comes from the line of Christopher McGrath of KBW . Your line is open . Christopher .

Christopher McGratty: Good morning. Tim or Dave, on the capital, we've heard from some of your peers, like, the rating agencies are obviously one of the constituents you have to be mindful of as you consider the Basel III opportunities. How important is the TCE ratio over the next couple of years? I had one bank say that 8% is kind of a fine line, but any thoughts on balancing the ratios would be great.

Speaker #6: Good morning Tim or Dave on the the capital . We've heard from some of your peers , like the rating agencies are obviously one of the constituents .

Speaker #6: You have to be mindful of as you , you know , consider the Basel three . You know , opportunities , how important is the TCE ratio over the next couple of years ?

Speaker #6: I had one bank say that 8% is kind of a fine line. But any thoughts on balancing the ratios would be great.

David Dykstra: Yeah. Well, the rating agencies, I think, acknowledge that our capital levels are sufficient given our risk profile. I think most of them understand that a third of our portfolio is in premium finance, which is low risk, and life, which is fortunately for us, been zero basis points of loss over the years. From a risk-adjusted perspective, I think our capital is more than sufficient, and I think the rating agencies understand that. We're very comfortable with where we're at right now. Our ratings have stayed stable, and our capital has been growing. Even if we did a buyback and brought that down a little bit, I think we have room there. We're comfortable with our capital levels, and we're comfortable with how the rating agencies look at it right now.

Speaker #5: Yeah . Well The the rating agencies , I think acknowledge that our capital levels are sufficient given our risk profile . I think most of them understand that , you know , a third of our portfolio is in premium finance , which is low risk .

Speaker #5: And life , which is , you know , fortunately for us . Been zero basis points of of loss over the year . So from a risk adjusted perspective , you know , I think our capital is more than sufficient .

Speaker #5: And I think the rating agencies understand that . So we're very comfortable with our with where we're at right now , you know , our ratings have stayed stable and our capital has been growing .

David Dykstra: Our ratings have stayed stable, and our capital has been growing. Even if we did a buyback and brought that down a little bit, I think we have room there. We're comfortable with our capital levels, and we're comfortable with how the rating agencies look at it right now.

Speaker #5: So, even if we did a buyback and brought that down a little bit, I think we have room there. So we're comfortable with our capital levels, and we're comfortable with how the rating agencies look at it right now.

Christopher McGratty: As a follow-up, within the NII expectations, what's your mix assumption? I mean, DDA has grown on a year-over-year basis pretty solidly the last six months. I'm interested in kind of the seasonal patterns there and also just what's in your expectations going forward.

Speaker #6: And then as a follow up within the NII expectations , what's your mix assumption ? I mean , DIA's grown on an on a period basis pretty solidly last six months .

Speaker #6: I'm interested in the seasonal patterns there, and also just what your expectations are going forward?

David Dykstra: Yeah. Well, as Tim said, I think the better way to look at DDA, because sometimes a quarter ends and year ends, there's fluctuations in the DDAs. I'd look at the average demand deposits. I would suspect that the mix of the balance sheet would stay relatively the same. As we have good growth quarters, we tend to add more interest-bearing deposits than non-interest-bearing deposits. The absolute dollar amount of DDA should stay relatively consistent on an average basis and then grow as we bring more customers in. Other than that growth in an interest-bearing being a little bit faster than non-interest-bearing just because we need to do so to support the loan growth, I wouldn't expect big changes in the deposit mix.

Speaker #5: Yeah . Well , as Tim said , I , I think the better way to look at DDA because sometimes a quarter ends and year ends , there's fluctuations in the DDA s .

Speaker #5: I look at the average demand deposits , but I would suspect that the mix of the balance sheet would stay relatively the same as we have good growth quarters , we tend to add more interest bearing deposits than non-interest bearing deposits .

David Dykstra: The absolute dollar amount of DDA should stay relatively consistent on an average basis and then grow as we bring more customers in. Other than that growth in an interest-bearing being a little bit faster than non-interest-bearing just because we need to do so to support the loan growth, I wouldn't expect big changes in the deposit mix.

Speaker #5: But the absolute dollar amount of DDA should stay relatively consistent . On an average basis and then grow as we bring more customers in .

Speaker #5: But but , you know , other than other than that growth in interest bearing being a little bit faster than noninterest bearing , just because we need to do so to support the loan growth .

Christopher McGratty: All right. Perfect. Thank you.

Speaker #5: I wouldn't expect big changes in the , in the deposit mix .

Operator: Thank you. I would now like to turn the conference back to Timothy Crane for closing remarks. Sir.

Speaker #6: All right. Perfect. Thank you.

Speaker #3: Thank you. I would now like to turn the conference back to Tim Crane for closing remarks. Sir,

Timothy Crane: Latif, thank you. Again, a good start to the year. We feel good about the outlook for 2026, and that's really a tribute to the great team we have at Wintrust. They are very focused on our strategic priorities. I want to thank them for all they do for the customers and the communities in which we operate, and most importantly, for our shareholders. With that, Latif, thank you, and I hope everybody has a nice day.

Tim Crane: Latif, thank you. Again, a good start to the year. We feel good about the outlook for 2026, and that's really a tribute to the great team we have at Wintrust. They are very focused on our strategic priorities. I want to thank them for all they do for the customers and the communities in which we operate, and most importantly, for our shareholders. With that, Latif, thank you, and I hope everybody has a nice day.

Speaker #1: Latif, thank you again. A good start to the year. We feel good about the outlook for 2026, and that's really a tribute to the great team we have at Wintrust.

Speaker #1: They are very focused on our strategic priorities . I want to thank them for all they do for the customers and the communities in which we operate and most importantly , for our shareholders .

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker #1: So with that , Latif , thank you and hope everybody has a nice day .

Q1 2026 Wintrust Financial Corp Earnings Call

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