Wintrust Financial Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
April 22, 2025

Key Takeaways

  • Wind Trust reported Q1 net income of $189M and record net interest income of $526M, with net interest margin rising 5bps to 3.56%.
  • Loans grew by over $650M and deposits by $1.1B, and management reiterated mid-to-high single-digit loan growth guidance for Q2, driven in part by a strong premium finance pipeline.
  • Credit metrics remained strong with charge-offs down to 11bps, stable nonperforming loans at 0.35% of the portfolio, and well-controlled CRE exposure with low balances and limited large credits.
  • Noninterest expenses decreased $2.4M in Q1, but are expected to rise in Q2 due to full merit increases and seasonal marketing and insurance claim costs.
  • The quarterly dividend was raised to $2.00 annually, CET1 ratio stood above 10%, and the company received multiple awards for customer service and employer recognition.
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Earnings Conference Call
Wintrust Financial Q1 2025
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Operator

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

Operator

The company's forward-looking assumptions that could cause the actual results to differ materially from the information discussed during this call are detailed in our earnings press release and in the company's most recent Form 10-K and any subsequent filings with the SEC. Also, our remarks may reference certain non-GAAP financial measures. Our earnings press release and earnings release presentation include a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure. As a reminder, this conference call is being recorded. I will now turn the conference over to Mr. Tim Crane.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Latif, thank you. Good morning, everyone, and thank you for joining us for the Wintrust Financial First Quarter Earnings Call. In addition to the introductions Latif made, I'm joined by Dave Stoehr, our Chief Financial Officer, and Kate Boege, our Chief Legal Officer. In terms of an agenda, I'll share some high-level highlights. Dave Dykstra will speak to the financial results, and Rich will add some additional information on credit performance and loan activity. I'll be back to wrap up with some summary thoughts, and of course, we'll do our best to answer some questions at the end. Let me start with this: this was a very clean and straightforward quarter. We reported quarterly net income of $189 million and record net interest income of $526 million, despite two fewer business days in the first quarter compared to the prior period.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

These results were in line with our expectations, with several positive and encouraging underlying elements. For the quarter, we grew loans by over $650 million and deposits by over $1.1 billion. We continued to gain share in the market, adding meaningful new client and household relationships. The net interest margin of 3.56% was five basis points higher than the fourth quarter result, reflecting disciplined loan and deposit pricing. We remain very neutral from a rate sensitivity standpoint and should continue to show a relatively stable margin in the coming quarters. That relatively stable margin, combined with what we expect to be a solid second quarter from the standpoint of loan growth, should yield continued good growth in net interest income. Charge-offs for the quarter were down to 11 basis points. The provision of $24 million was in line with the prior several quarters and resulted in slightly improved coverage ratios.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Non-performing loans were stable. Overall, we continued to deliver consistent results in line with both our own expectations and those shared with you on prior calls. I'll turn this over to Dave, and I'll be back to offer some additional thoughts in a few minutes.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

Great. Thanks, Tim. First, with respect to the balance sheet growth, Tim mentioned another strong quarter of loan and deposit growth. The loan growth was 6% on an annualized basis, which was in line with our prior guidance of being in the mid to high single-digit growth range. Deposit growth for the quarter was approximately 8% on an annualized basis. This resulted in a period-end loan-to-deposit ratio, which remained consistent with the prior quarter at roughly 91%. Non-interest-bearing deposits remained relatively stable during the first quarter and represented 21% of total deposits at the end of the quarter. Total non-interest-bearing balances have stayed in a tight range of approximately 21%-22% of total deposits for each of the last five quarters. Turning to the income statement results, another solid operating quarter producing a record level of net income in just a few moving pieces.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

To that end, I'll start off by highlighting what we consider the uncommon items to be for the quarter. From our perspective, the quarter included acquisition-related costs of $2.7 million and net security gains of $3.2 million. Those items essentially net each other out for minimal impact to net income and are discussed on the first page of the earnings release if you'd like to refer to them later. With those items in mind, I'll touch on each of the major income statement categories. As Tim mentioned, our net interest income increased slightly compared to the fourth quarter of 2024 to a record quarterly level. An increase of $496 million in average earning assets and a five-basis-point increase in net interest margin more than offset the two fewer days in the quarter. Our first quarter net interest margin was 3.56% compared to 3.51% in the prior quarter.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

Yields and rates on the major balance sheet categories were lower because of the recent market declines in short-term interest rates, with loan yields moving down 15 basis points to 6.53% and interest-bearing deposit costs declining 23 basis points from the fourth quarter to 3.16%. 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. The slightly higher provision for credit losses recognized in the first quarter as compared to the prior quarter is primarily attributable to the uncertain economic environment and the potential impact of higher credit spreads and lower financial market valuations.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

Although I would note that our credit metrics remained low and stable during the first quarter, and the first quarter provision is near the average of the provision for credit losses that we recorded during the last five quarters. Rich Murphy will talk about credit and the loan portfolio characteristics in just a bit. Regarding other non-interest income and non-interest expenses, total non-interest income was relatively consistent with the prior quarter, increasing approximately $3.2 million relative to the fourth quarter of 2024 and totaled $116.6 million. Increases in net security gains and fees from covered call options were somewhat offset by lower wealth management revenue. Mortgage banking activity continued to be subdued and was essentially unchanged from the prior quarter. Turning to non-interest expense categories, non-interest expenses totaled $366.1 million in the first quarter and were well controlled and down approximately $2.4 million from the prior quarter.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

The primary reasons for the decrease were, one, salary and employee benefit expenses were down approximately $607,000. The slight decrease in this expense category was primarily due to annual merit increases that were effective February 1st, which were more than offset by lower commissions on reduced levels of mortgage and wealth management activity and lower health insurance claims. Relative to the prior quarter, the company experienced a seasonal decline in travel and entertainment expenses, as well as lower levels of professional fees due to a reduced level of project-related consulting fees and slightly lower marketing costs. Offsetting those expenses were approximately $2.7 million of acquisition-related costs during the quarter. The remaining variations in non-interest expenses during the quarter were a combination of other relatively non-noteworthy fluctuations. I would like to talk about second quarter expectations on non-interest expenses.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

We would expect them to increase slightly based upon the second quarter having a full effect of annual merit increases. The first quarter had 2/3 of the impact. The second quarter will have the full impact of the merit increases. We expect to experience slightly higher employee benefit expense due to increased level of health insurance claims during the quarter compared to a seasonally low first quarter. As we've discussed on many previous calls, marketing expenses tend to be higher in the second and third quarter of the year due to expenditures related to various major and minor league baseball sponsorships and other summertime sponsorship events held in the communities we serve. I think we can look at last year's trends and get a feel for roughly how the marketing expenses increase in the middle two quarters of the year relative to the first and the fourth quarters.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

Additionally, to the extent we see growth in the mortgage and/or wealth management revenues, we'd have a corresponding increase in incentive compensation, but that would obviously be an overall beneficial situation. We also continue to build tangible book value per common share, ending the quarter at $78.83 per share compared to $75.39 per share in the prior quarter and $70.40 per share in the year-ago quarter. With that, I'll conclude my comments and turn it over to Rich to discuss credit.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

Thanks, Dave. As Tim and Dave both noted, credit performance continued to be very solid in the first quarter. As detailed in the earnings release, the loan growth for the quarter came from a number of areas. Our life premium finance segment, which had another strong quarter, grew by $218 million. The mortgage warehouse team also built on their momentum from last year and grew by $126 million as we continue to fill out new relationships, which also come with meaningful deposit opportunities. Portfolio residential real estate loans grew by $72 million. We believe that loan growth for the second quarter of 2025 will continue to be strong and at the high end of our previous guidance of mid to high single digits for a number of reasons.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

We have traditionally seen our highest funding volumes for our First Insurance Funding premium finance business in the second quarter of each year. We would anticipate growth in this segment alone to be close to $1 billion in Q2. In addition, Core C&I pipelines remain solid, and we have very strong momentum in our other niche businesses, including leasing and mortgage warehouse. While there is growing uncertainty in economic conditions as a result of potential tariffs, tax law changes, and funding cuts, we continue to remain optimistic about our ability to grow loans for the remainder of this year within our guidance and with appropriate structures and pricing. 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.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

Non-performing loans, as a percentage of total loans, decreased slightly from 36 basis points to 35 basis points. NPLs in total were consistent quarter over quarter from $171 million to $172 million. Charge-offs for the quarter were $12.6 million, or 11 basis points, down from $15.9 million, or 13 basis points, in Q4. While concerns about the economy continue to mount, 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 in our special mention and substandard loans on slide 14. Finally, we are firmly committed to identifying problems early and charging them down where appropriate. Our goal, as always, is to stay ahead of any credit challenges.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

As noted in our last few earnings calls, we continue to be highly focused on our exposure to commercial real estate loans, which comprise roughly one quarter of our total portfolio. As detailed on slide 18, we continue to see signs of stabilization during the first quarter as CRE NPLs remained at a very low level, increasing slightly from 0.16% to 0.20%. We saw CRE charge-offs remaining at historically low levels from 3 basis points to 1 basis point quarter-over-quarter. On slide 19, we continue to provide enhanced detail on our CRE office exposure. Currently, this portfolio remains steady at $1.6 billion, or 12.7% of our total CRE portfolio, and only 3.4% of our total loan portfolio. Of the $1.6 billion of office exposure, 45% is medical office or owner-occupied. The average size of a loan in the office portfolio is only $1.5 million.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

We have only eight loans of $20 million, and only five of which are non-medical or owner-occupied. We continue to perform portfolio reviews regularly on our CRE portfolio, and we stay very engaged with our borrowers. As mentioned on prior calls, our CRE credit team regularly updates their deep-dive analysis of every non-owner-occupied loan over $2.5 million, which will be maturing between now and the end of this year. This analysis, which covered 79% of all non-owner-occupied CRE loans maturing during this period, showed very consistent results compared to prior quarters. Tim mentioned macro uncertainties as a result of potential tariffs and funding cuts. While it is too early to determine the full effects that these issues may cause, we believe the impacts on our portfolio will be limited as a result of our strong underwriting standards and disciplined approach to diversification.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

In addition, our goal is to stay ahead of these specific challenges, and we are conducting detailed reviews of our portfolio to identify clients who may be impacted. As always, our goal is to be proactive and work closely with our clients to help them navigate periods of uncertainty. Times like this really highlight the benefit of having a local bank and an experienced banking team on your side. That concludes my comments on credit, and now I'll turn it back to Tim.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Great. Thanks, Rich. To wrap up our prepared remarks, a reminder and a few thoughts. During the quarter, we announced an increase in our dividend to $2 per share on an annualized basis. We continue to grow our capital ratio steadily. Our CET1 ratio, which ended the quarter at slightly over 10%. During the quarter, we also received several forms of recognition. We received 14 Coalition Greenwich Awards, which measure performance with commercial clients on both a regional and national basis. We won the J.D. Power Award for Best Customer Service in Illinois for the fourth consecutive year. We also were recognized as a top employer in all of our material markets in a separate rating. While we always appreciate the recognition from these organizations, what's really important is the feedback we receive around our differentiated client service.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

We use that feedback to better our relationships and service levels with the goal of continuing to win and retain business. Our Net Promoter Scores, one recognized measure of client service, continue to improve and materially, and I would add very materially in some cases, exceed those of our competitors. In just a moment, it is likely you will ask questions about the economic environment, tariffs, and what clients are telling us. We will do our best to answer those questions, particularly what we are hearing from clients. At a high level, there is a fair amount of uncertainty in the market. At a minimum, the uncertainty causes clients to pause and make sure they understand the environment and, for lack of a better word, the rules before making major investments. To sum up, we had a solid first quarter.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

The important thing for us, regardless of economic conditions, is that we continue to care for our clients by delivering differentiated service that others do not and in some cases cannot offer. We will be mindful of and prudent around the risks we take. Over time, independent of the economic conditions, this approach will continue to make us the bank of choice where we compete and will result in a more valuable franchise for our shareholders. At this point, I'll pause and we can take some questions.

Operator

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. Please go ahead, Jon.

Jon Arfstrom
Jon Arfstrom
Analyst at RBC Capital Markets

Hey, thanks. Good morning.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Morning, John.

Jon Arfstrom
Jon Arfstrom
Analyst at RBC Capital Markets

Tim, I'll probably start with where you thought we would, but you obviously have a very solid message on loan growth. Can you give us a little bit more on how prevalent some of the uncertainty is from borrowers? Are they actually pausing, and is it having an impact on your growth, despite the fact you basically reiterated it? Is there an impact right now?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Sure, John. Rich and I can take this together. We do hear of people pausing, and obviously, people are concerned about uncertainty, but generally, remain pretty encouraged about the local economy and their ability to perform kind of on a normal basis. As you suggested, we're not changing our expectations around loan growth at this point and think we'll have a particularly good second quarter, in part due to the P&C business.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

John, I would also point out we do a pretty deep analysis on our customer sentiment by going out there and talking to customers, particularly those that we feel might be more affected by any tariffs or funding cuts. Generally, I think people are cautious, but they still seem to be playing this as business as usual until they hear different. I would not say there is a dramatic amount of pessimism. I would say people are just kind of waiting and seeing. We want to make sure that we are actively talking with them and making sure that they know that we are there for them. The second piece that I would point out is a number of pieces to our portfolio really would not be affected by that. The premium finance side, you get some issues there relating to sentiment, but people still need to insure their properties.

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

People still need to plan their estates. The mortgage warehouse business is going to continue to do what it does. Those topics that we're addressing right now really focus more on our core C&I and CRE portfolios. There is a significant segment of our portfolio that we think will be largely unaffected by those tariffs, depending on what happens there. I think there is more that we do not know than we know, but right now, we still feel pretty good, certainly through the first half of the year. From there, it gets a little bit more difficult to see.

Jon Arfstrom
Jon Arfstrom
Analyst at RBC Capital Markets

Yep. Okay. Yeah. Fair enough on that. Okay. This is maybe somewhat related, but on slide 14, you break out your reserve cadence, and it looks like a better baseline, but some macro uncertainty factors. Can you just kind of walk us through the thought process on that in terms of what you did on the reserve changes?

Dave Dysktra
Dave Dysktra
Vice Chairman and COO at Wintrust Financial Corporation

Yeah, John, this is Dave Dykstra. You're right. The baseline economic scenario that we used out of Moody's, the factors out of Moody's that we use are a number of factors in that baseline scenario. The ones we used generally got better during the quarter. You will see on that chart you referred to on slide 14, that was actually beneficial. Right near the end of the quarter, a few of those variables, like the Baa credit spreads, really sort of spiked up, and some of the equity market factors that we monitor deteriorated. We did do an uncertainty overlay to accommodate the spikes at the end of the quarter, even though the baseline forecast did not fully incorporate those yet.

Dave Dysktra
Dave Dysktra
Vice Chairman and COO at Wintrust Financial Corporation

Just for the uncertain conditions, we provided for a little bit wider credit spreads and a little bit more deteriorated equity market situation than what was in the baseline Moody's scenario. That is that $35.9 million number that shows on slide 14. That overlay resulted in that amount of additional provision. As I said in my comments, it is still roughly on average what we have done the last five quarters. We think it was prudent to do it given the situation and build the reserves.

Jon Arfstrom
Jon Arfstrom
Analyst at RBC Capital Markets

Okay. All right. Thanks. Appreciate it.

Operator

Thank you. Our next question comes from the line of Nathan Race of Piper Sandler. Please go ahead, Nathan.

Nathan Race
Nathan Race
Analyst at Piper Sandler

Hey, guys. Good morning. Thanks for taking the question.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Morning, Nate.

Nathan Race
Nathan Race
Analyst at Piper Sandler

Yep. On the margin front, just curious in terms of how much additional kind of non-maturity deposit cost leverage you have with the Fed presumably on hold, at least through the second quarter. You obviously provide great detail on the CD repricing front in the earnings release, but just curious on the non-maturity side.

Dave Dysktra
Dave Dysktra
Vice Chairman and COO at Wintrust Financial Corporation

I think there's a little bit there, Nate. It seems like the competition in the market, again, in Chicago is very rational, and we've seen a little bit of decline by some of our competitors in those categories. We think there's a little bit that we can do there. We also expect to have, as Rich said, a very strong second quarter loan growth. We have to balance that with raising the deposits from our core customers to support that loan growth. Generally speaking, I think the trend is a slight decline in those rates in the marketplace.

Nathan Race
Nathan Race
Analyst at Piper Sandler

Okay. Have you noticed any changes in competitive pricing on new loan production lately? I know the coupon mix can vary depending on production in any given quarter. Obviously, you have commercial insurance, premium finance, expect to have a strong 2Q. Just any comments in terms of what you're seeing from a competitive perspective and maybe on a blended basis where new loans are coming on the portfolio at these days?

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

Yeah. I'd say generally, things remain pretty consistent. When you look at premium finance, there's a little bit of a moat there where it's competitive, but I think we offer a product that we have a market share in that. We are the market leader, and I think we can price appropriately. In some of the more transactional areas, it's probably a little bit more pressured. We're seeing a little more pressure in the leasing space. We're seeing a little more pressure in CRE, particularly fully funded CRE. As of this point, nothing that is overly disconcerting. I think a lot of banks are struggling for loan growth, and so they're probably pricing a little more aggressively, particularly if they can get something that is fully funded from day one. Those are the two areas I would call out.

Nathan Race
Nathan Race
Analyst at Piper Sandler

Okay. Rich, while I got you, if I could sneak one last one in, just in terms of the rising criticized loans in the quarter, any common threads or kind of any geographic areas or portfolios that drove that increase?

Rich Murphy
Rich Murphy
Vice Chairman and Chief Lending Officer at Wintrust Financial Corporation

No. It's funny. We were looking at that this morning and went back. Last quarter, it was the other way. We actually had net upgrades. Our risk ratings are meant to be dynamic. Depending on certain things, it's a relatively nominal number relative to the entirety of the portfolio. I went and looked at the few deals that did move, and no real common denominators there. I do not think it's the beginning of a trend. I think it's really more of a one-off.

Nathan Race
Nathan Race
Analyst at Piper Sandler

Okay. Great. I appreciate all the color. Thanks, guys. Nice quarter.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. Thanks, Nate.

Operator

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

Jared Shaw
Jared Shaw
Analyst at Barclays

Hey. Good morning, everybody. Thanks for the question.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Morning.

Jared Shaw
Jared Shaw
Analyst at Barclays

Maybe starting just to follow up on John's credit question, when we look at the slide 14 trends, it feels like, I guess, what Moody's got a little better in February and then worse in March. Is that right? You have your qualitative overlay. Should we think that if the Moody's scenario, the baseline scenario, continues to stay weak or gets a little weaker, would that drive provision a little higher from here? Or do you feel like your qualitative overlay covered for that? Maybe we see that pullback a little bit if we see broader deterioration in the baseline?

Dave Dysktra
Dave Dysktra
Vice Chairman and COO at Wintrust Financial Corporation

Yeah. Yeah. I don't necessarily think the baseline changed that much. It's more a couple of the factors that we focus on that impact our portfolio, the BAA credit spreads, and some of the equity market factors. Not inside the Moody's forecast, but in reality, we saw them deteriorate a little bit at the end of the quarter. Given that spike at the end of the quarter and the uncertainty with that that went into the first quarter, we did the overlay. We'll have to see how the April and May and June Moody's forecasts come out and how they apply. We think that that $35.9 million overlay that we had, in our opinion, would be appropriate to account for that. Unless there's any further deterioration, we would think it should be a fairly normal provision based upon growth, etc.

Jared Shaw
Jared Shaw
Analyst at Barclays

Okay. All right. Thanks. On wealth management, can you just comment a little bit about how sort of new client acquisition is going there and how sort of that level of organic growth is versus the moves we've seen just from market rates on AUM?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. This is Tim. I mean, there's a couple of things going on. We're in kind of the 11th hour of switching our platforms, which provide better capabilities for our financial advisors and for our money management professionals. That was part of the reason the first quarter was a little softer. We expect improvement in the wealth management business and those better capabilities to give us some momentum going forward. Obviously, the market swings matter. Absent the market swings, we think we have good momentum and the team's well-positioned to continue to grow our wealth business.

Jared Shaw
Jared Shaw
Analyst at Barclays

Okay. Thanks. Just finally for me, can you share your updated thoughts on M&A and growth through acquisition going forward once Bremer's closed? Do you feel that you have the capital to do that? Is there sort of what's the appetite or the market like on M&A now?

Dave Dysktra
Dave Dysktra
Vice Chairman and COO at Wintrust Financial Corporation

You probably should ask the Old National folks about Bremer, but I understand they're scheduled to close in a couple of months.

Jared Shaw
Jared Shaw
Analyst at Barclays

I'm sorry, man.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

No. That's okay. I know we've got some overlap in our call here too. It's okay. I totally understand. The M&A conversations continue. Obviously, there's been volatility with respect to the market value of financial institutions. We continue to have good conversations. We think we're good as an acquirer. We think Macatawa is in a terrific place and will be growing as we kind of get the second half of the year going. We'll be disciplined but certainly think we have the financial resources to move forward on M&A that would be attractive to us.

Jared Shaw
Jared Shaw
Analyst at Barclays

Great. Thank you.

Dave Dysktra
Dave Dysktra
Vice Chairman and COO at Wintrust Financial Corporation

Yep.

Operator

Thank you. Our next question comes from the line of Chris McGratty of KBW. Please go ahead, Chris.

Andrew Leischner
Andrew Leischner
Analyst at KBW

Hey. How's it going? This is Andrew Leischner on for Chris McGratty.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Hey, Andrew. Please go ahead.

Andrew Leischner
Andrew Leischner
Analyst at KBW

Deposit growth has been pretty solid recently. Just given economic uncertainty, how should we be thinking about the source of that deposit growth going forward?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

I think pretty consistent in terms of our existing mix in total. As Rich mentioned a little bit earlier, and Dave did too, I think we will try to grow deposits to match the loan growth. That's been kind of our MO for the last several quarters. The non-interest-bearing piece has remained stable as we add principally commercial relationships and nice growth in terms of households on the consumer side. Even at increased deposit cost at the margin, we like growing deposits. We add new clients to the franchise. We ultimately will sell those clients other services. I don't think you'd see a mix change that would be very material.

Dave Dysktra
Dave Dysktra
Vice Chairman and COO at Wintrust Financial Corporation

No. I also point out that our deposit growth was stronger than our loan growth this quarter. We then past indicated that we thought they would sort of grow in tandem. In anticipation of a strong second quarter loan growth, we grew deposits a little bit faster, and that will serve us well going into the second quarter. The market is still rational. Our position is fantastic in Chicago from a competitive position. We think we can keep growing them as we have recently.

Andrew Leischner
Andrew Leischner
Analyst at KBW

Okay. Great. Thank you. That's it for me.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. You bet.

Operator

I'd like to turn the conference back to Tim Crane for closing remarks. Sir.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. Latif, thank you. For those of you who've joined us this morning, thank you for taking the time. I just say a very clean quarter. NII up, margin up, good loan growth that should be better in the second quarter, and solid evidence of differentiated service level versus our peers. We enter the second quarter with good momentum. As always, you'll get our best effort. Thank you. Latif, with that, we'll sign off.

Operator

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

Executives
    • Rich Murphy
      Rich Murphy
      Vice Chairman and Chief Lending Officer
    • Dave Dysktra
      Dave Dysktra
      Vice Chairman and COO
    • Tim Crane
      Tim Crane
      President and CEO
    • Dave Stoehr
      Dave Stoehr
      CFO
Analysts
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