Wintrust Financial Corporation

Welcome to Wintrust Financial Corporation's third quarter and year-to-date 2025 earnings conference call. A review of the results will be made by Tim Crane, President and Chief Executive Officer, David Dykstra, Vice Chairman and Chief Operating Officer, and Richard Murphy, Vice Chairman and Chief Lending Officer. As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation. Following their presentations, there will be a formal question and answer session. During the course of today's call, Wintrust management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statements. Action 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 and any subsequent filings with the SEC. Also, our remarks may reference certain non-GAAP financial measures. Our earnings press release and earnings release presentation include a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure. As a reminder, this conference call is being recorded. I will now turn the conference over to Mr. Tim Crane.

Good morning. Thank you for joining us for the Wintrust Financial Corporation third quarter earnings call. In addition to the introductions that Lateef just made, I'm joined by our Chief Financial Officer, Dave Starr, and our Chief Legal Officer, Kate Bogey. I'll begin this morning with a quick overview of our results. Dave Dykstra will speak to the financials in more detail, and Rich will speak to the loan activity and credit performance. I'll be back with some final thoughts, and as always, following our remarks, we'll be happy to take your questions. WinTrust reported a third consecutive quarter of record net income driven by our differentiated approach to understanding our clients' needs and delivering the right solutions to help them meet their financial goals. Net income of $216 million was up from just over $195 million last quarter, an increase of almost 11% quarter over quarter. Net interest income was up $20 million from the second quarter to $567 million driven by another quarter of solid loan and overall balance sheet growth. Loan growth of just over a billion was broad-based and continues to reflect the diversified composition of our earning assets. Total loans were $52 billion at quarter end, up 11% year-to-date on an annualized basis. Deposit growth of just under 900 million kept pace with the loan growth. Total deposits were almost $57 billion at the end of the third quarter, and the rate paid on interest-bearing deposits was essentially flat compared to the prior quarter, up just one basis point. Net interest margin was 350 for the quarter, down slightly from the prior quarter, but square in the middle of our targeted range. Credit quality remains very good, and we continue to proactively work with a small number of clients who are experiencing challenges. Before I turn it over to Dave, just a couple of highlights. First, the FDIC's annual deposit market share report was released last month, and we continue to achieve deposit share gains in each of our key markets. In Illinois, Wintrust is now third in deposit market share, up one position. Our Wintrust franchises in Wisconsin and West Michigan showed strong growth as well, also with lots of upside potential. Given our advantage position in these markets, we remain focused on continued core deposit growth as a key tenant of our franchise. Secondly, I'm proud to say Wintrust debuted at number six on American Bankers' nationwide survey of bank reputation. The survey results reflect our commitment to earning the trust of our customers every day. It also speaks to our ability to grow and strengthen the franchise. So once again, a solid and straightforward quarter, and I'll turn it over to Dave for additional insights.

Great, thanks, Tim. With respect to the balance sheet growth in the third quarter, we once again had strong loan and deposit growth, which fell within our stated mid to high single digits targeted growth range. Specifically, the deposit growth was $895 million during the quarter, representing a 6% increase over the prior quarter on an annualized basis. The deposit growth helped to fund solid third quarter loan growth of $1 billion, or 8% on an annualized basis. As to other aspects of the balance sheet results, total assets grew $646 million to just under $70 billion in total assets. Turning to the income statement results, it was a very solid operating quarter. As Tim said, we had another record level of quarterly net income. Our net interest income represented another record high quarterly amount also, a $2.4 billion increase and the average earning assets drove the $20.3 million increase in net interest income over the prior quarter. Given the current interest rate environment, and even with a few rate changes in either direction, we remain confident that our net interest margin can continue to be relatively stable throughout the remainder of 2025 at roughly 3.5%. I would note that period end loans are approximately $660 million higher than the average loans for the third quarter, giving us a good start on achieving higher average earning assets for the fourth quarter and combined with that stable net interest margin I referenced should provide for increased net interest income in the fourth quarter as well. The provision for credit losses remained relatively flat with the prior quarter as the overall credit environment and asset quality has remained relatively stable. As to non-interest income and non-interest expense, total non-interest income totaled $130.8 million in the third quarter which was up approximately $6.7 million when compared with the prior quarter. The increase was supported by slightly higher wealth management and mortgage revenue, higher security gains, and a variety of smaller changes to other non-interest income categories as shown in the table in our earnings release. Overall, a solid and consistent outcome for non-interest income during the third quarter. Non-interest expenses totaled $380 million in the third quarter, which represented a slight decline from the $381.5 million recorded in the prior quarter. The expenses are well controlled with both the quarterly net overhead ratio and efficiency ratio improving from the prior quarter. In summary, we're pleased with the record quarterly results in net income and net interest income. The results were supported by good franchise building loan and deposit growth, a solid net interest margin, low credit costs, and well-controlled expenses. We also continue to build our tangible book value per share during the first three quarters of this year. And as you can see in our published materials, we have grown tangible book value per common share every year since we've become a public company. And we're in track to do so again in 2025. Also, as we mentioned on our last call, in the quarterly call, And to prevent any confusion, I just want to revisit the one-time impact of our preferred stock redemption and the new preferred stock issuance. We included an overview of the impact on slide 24 of the presentation deck. In short, while there was no impact to operating net income, the portion of these transactions that were a one-time nature reduced fully diluted net income per common share by $0.28 in the third quarter. Without this impact, fully diluted net income per common share would have been $3.06. If anybody has any questions on the details of that preferred stock issuance or redemption, please contact me and I'm happy to walk you through it. So with that, I'll turn it over to Rich to discuss credit.