Wintrust Financial Q4 2025 Earnings Call Transcript

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Provided by Quartr
January 21, 2026

Key Takeaways

  • Positive Sentiment: Record 2025 earnings — Wintrust reported net income of $824 million (up 19% YoY), EPS of $11.40, and tangible book value up to nearly $89, with Q4 net income of $223 million, all-time highs that bolster shareholder value.
  • Positive Sentiment: Strong balance-sheet growth — Loans grew ~11% and deposits ~10% for 2025, with Q4 annualized loan and deposit growth near mid‑ to high‑single digits and a 2026 target of similar organic growth.
  • Positive Sentiment: Stable margin and operating leverage — Net interest margin held around 3.5% (Q4 3.54%) with record net interest income, a low‑60s estimated total deposit beta, and guidance for positive operating leverage (revenues growing faster than expenses).
  • Positive Sentiment: Credit quality remains healthy — Non‑performing loans stayed low (35 bps), charge‑offs declined, CRE NPLs remain minimal, and focused monitoring (CRE office exposure $1.7B, ~3.2% of loans) mitigates portfolio risk.
  • Negative Sentiment: Mortgage business is a swing factor — Mortgage banking revenue was soft in 2025 and recovery depends on lower mortgage rates; management views mortgage upside as possible but not guaranteed, creating near‑term revenue uncertainty.
AI Generated. May Contain Errors.
Earnings Conference Call
Wintrust Financial Q4 2025
00:00 / 00:00

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Company Representative at Wintrust Financial Corporation

Welcome to Wintrust Financial Corporation's Fourth Quarter and Full Year 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.

Company Representative at Wintrust Financial Corporation

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

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Good morning, and for those of you we haven't seen or talked to recently, Happy New Year. Thank you for joining us for the Wintrust Fourth Quarter and Full Year 2025 earnings call. In addition to the introductions Latif made, I'm joined by our Chief Financial Officer, Dave Stoehr, and Chief Legal Officer, Kate Boege. As we usually do on these calls, I'll begin the morning with a few highlights. Dave Dykstra will review the financial results. Rich will speak to loan activity and credit performance. And I will return with some summary comments on 2025 and early thoughts on 2026. As always, following our remarks, we'll be happy to take questions. With that, Wintrust delivered solid performance in 2025. The results reflect our focus on generating strategic and disciplined growth. I'm proud to say our efforts drove record net income for the year.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

For full year 2025, we reported net income of $824 million, up 19% from $695 million in 2024. Earnings per diluted share was $11.40, up from $10.31 in 2024, and tangible book value increased by over $13 to nearly $89 a share. Total assets at year-end were just over $71 billion. Our fourth quarter was also strong. Net income was $223 million, also a record, up 3% or $7 million from the prior quarter. Solid loan and deposit growth during the quarter and a slightly improved margin led to continued growth in net interest income. Credit quality remained solid, and overall non-interest expenses were well managed. When I look back over the year, I want to highlight three things that I am particularly pleased by. First, we delivered disciplined growth at a level above most of our peers with a stable margin.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

As we've discussed, we are adding new relationships, consumer and commercial, that we expect will be with us for years to come as we continue to build the franchise. In fact, in 2025, our steady and consistent approach moved us into third position in deposit market share in the Chicago area, and we showed strong gains in both Wisconsin and West Michigan. Second, we achieved solid operating leverage. On a percentage basis, net revenue was up 11.2%, 340 basis points higher than our non-interest expense. We did this while investing in the tools, technology, and people to both run a bank our size today and to build the foundation for future growth. Lastly, we saw improved Net Promoter Scores that were already best in class in both retail and commercial banking in 2025, as our focus on exceptional customer service continues to differentiate us from many of our peers.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Before I turn this over to Dave, I want to call your attention to the charts we include in our press release at the end of each year showing our 10-year performance on key metrics. What you will see here is the continued consistent performance that we stress with our teams. I'm very proud of these results and how they translate into real value for our shareholders. Now, let me turn this over to Dave.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Great. Thanks, Tim. We finished off 2025 with another quarter of strong loan and deposit growth, with both falling within our stated range of mid to high single digits growth. Specifically, the deposit growth was right at $1 billion during the quarter, representing a 7% increase over the prior quarter on an annualized basis. This deposit growth helped to fund continued strong fourth quarter loan growth of a similar $1.0 billion amount that represented 8% growth on an annualized basis. On a full year basis, loans and deposits grew 11% and 10%, respectively. Turning to the income statement results, this was a very solid operating quarter for Wintrust, producing a record level of quarterly net income.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Speaking to the major components of the income statement, our net interest income also reached another high record quarterly amount. A $1.1 billion increase in the average earning assets, as well as a four basis points increase in the net interest margin, drove the $16.9 million increase in net interest income over the prior quarter. The net interest margin ranged from 3.50%-3.56% during the four quarters of 2025, and the 3.54% net interest margin for the fourth quarter fell squarely in that range. I would note that period-end loans were once again higher than the average loans for the fourth quarter, giving us a good start on achieving higher average earning assets in the first quarter of 2026.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

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

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

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

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

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

Richard Murphy
Richard 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 fourth quarter. As detailed on slide seven, loan growth of approximately $1 billion came from a number of different categories. Commercial real estate loans grew by $322 million. Our mortgage warehouse team grew their outstandings by $310 million. The Wintrust Life Finance team had another strong quarter and grew by $265 million, and our leasing and residential mortgage groups also had a very solid quarter. We believe loan growth for the first quarter, while typically our slowest quarter, will continue to be solid for a number of reasons. Our core C&I and CRE pipelines remain consistent, and we continue to benefit from our unique market positioning in our core markets of Chicagoland, Wisconsin, West Michigan, and Northwest Indiana.

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

In addition, we continue to have very good momentum in a number of our lending verticals, including mortgage warehouse, leasing, and premium finance. From a credit quality perspective, as detailed on slide 15, we continue to see strong credit performance across the portfolio. This can be seen in a number of metrics. Non-performing loans increased slightly from $162.6 million, or 31 basis points, to $185.8 million, or 35 basis points, but remained at a very manageable level and in line with levels we had seen in the first half of the year. Charge-offs for the quarter were 17 basis points, down from 19 basis points in the prior quarter.

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

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

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

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

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

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

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

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

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

We have the best people in the business, and I want to thank each of our colleagues for all that you do to ensure we deliver results for our clients and our shareholders while we work to drive sustainable growth in the communities we serve. Thank you for joining us this morning, and let me turn it back to Latif for your questions.

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. Please go ahead, Jon.

Jon Arfstrom
Jon Arfstrom
Managing Director at RBC Capital Markets

Hey, thanks. Good morning.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Good morning, Jon.

Jon Arfstrom
Jon Arfstrom
Managing Director at RBC Capital Markets

Usually, we start with loan growth, but can you talk a little bit more about that, Tim, kind of what takes you to the mid-single digit, what takes you to the high single digit? It sounds like you're off to a stronger start, even though you're flagging how the first quarter and second quarter can sometimes be a little bit softer, but it feels like you're entering the year with pretty good momentum. Can you just unpack that a little bit for us?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Sure, a little bit, Jon, and Rich can help me here. But again, we're cautiously optimistic about what we're hearing in the local economies where we operate. Employment levels, unemployment levels are low, and it was a pretty solid quarter for us, broad-based in terms of loan growth. So I think we feel pretty good. As you mentioned, the first quarter can be a little bit softer than the second quarter for us, but the first half of the year tends to be in line with our targets. So again, I think we feel pretty good. And Rich?

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

Yeah, no, I think you answered that very well. First quarter last year was 653, so down from we were about 6%. And then we picked it up in the second quarter, as you, Jon, you know that story, how our First Insurance business really kind of picks up the pace there in the second quarter. So we had a really good second half, but where that comes from is, as I mentioned, some really good market positioning right now in our C&I and CRE space that we feel pretty good about. When we talk to customers, as I mentioned, they feel pretty good about where the economy stands right now. And I think there's enough stability in the general picture where they're willing to invest. And then you look at the different verticals that we saw really good success with in the fourth quarter, in particular, mortgage warehouse lines.

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

And if we get some pickup here on the mortgage side of the business, I think you'll continue to see that in the first half of the year. Leasing, Resi Mortgage also had a good quarter. So there's a lot of different things that feel pretty good right now. But again, the effect of the first quarter phenomenon in the premium finance business is something that we would expect to see, usually reversing then back in the second quarter.

Jon Arfstrom
Jon Arfstrom
Managing Director at RBC Capital Markets

Yeah. Okay. Good. And then maybe Tim or Dave, you talked about the positive operating leverage. I mean, there was a big lift in 2025. What are some of the puts and takes on expenses and overall thoughts on the expense plans for 2026? Thanks.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

I think it's probably sort of more of the same story that we've had before. If we have that mid- to high single-digit revenue growth, so sort of say 7.5%-8% is sort of the middle of the target we would expect, and that's off of the fourth quarter run rate. We would expect expenses off of the fourth quarter run rate probably to be in that 4%-5% range. And so we expect to get positive operating leverage again. And if you had revenue that was at the lower end of that range, then we would tighten up on expenses. So the goal is to get positive operating leverage, invest in the business, and support stronger growth, as we've always done, and grow the franchise.

Dave Stoehr
Dave Stoehr
CFO at Wintrust Financial Corporation

So as you know, second and third quarters are a little bit higher for marketing and sponsorships for us, and the first and the fourth quarters are lower. But health insurance claims are tending to be up a little bit in this market, and so they may rise a little bit, but all of that is sort of baked into this, say, 4%-5% expected growth based on a fourth quarter run rate. And again, that gets you operating leverage. If loan growth was lower for some reason, which we don't expect right now, we see a lot of good opportunities, and we would probably trim back a little bit on expenses. But we're big believers in investing in the business to grow the franchise.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah, John, the two kind of wild cards. One, I think everybody is seeing benefit expense go up fairly substantially. The other is if the mortgage business picks up, we'll get more expense, but that would be good news for us because we would get, obviously, more revenue as well. Otherwise, I think Dave got the answer there.

Jon Arfstrom
Jon Arfstrom
Managing Director at RBC Capital Markets

Yep. Okay. Thanks a lot. I 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 questions. This is your bet. I was hoping to unpack just the deposit cost in the quarter, some of the drivers there. So maybe, Tim, could you just speak to how much of the opportunity to reduce deposit costs in the quarter was just a function of more rational competition in Chicago these days, or maybe just some complexity and changes in terms of the Wintrust deposit composition over the years that has allowed you guys to put up some pretty favorable deposit reductions lately?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. You bet, Nate. I guess two things. One, our team did a really nice job moving deposits as the Fed moved, and we talked about the expectation that we would be able to do that, and that, in fact, did play out in the fourth quarter. We also had kind of a nice trend in terms of DDA deposits during the quarter. That can be a little bit lumpy at year-end as companies position themselves for their reporting activities. But we continue to see good growth in terms of the commercial deposits of the bank and the treasury services they use, and we're going to continue to work that mix. It just can be a little bit lumpy, but we were very pleased with the way deposit costs were managed in the quarter.

Nathan Race
Nathan Race
Analyst at Piper Sandler

Okay. Great. That's helpful, and then just looking at some of the deposit growth drivers, it looked like it mainly came in the non-maturity segment, so just curious, do you see additional opportunities to run off higher cost CDs going forward, and can you kind of just speak to maybe the CD repricing benefit that you have with like 95% or so of your deposits that are CDs maturing by the end of this year?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. I think there's probably a minor benefit. And again, I would emphasize minor on the CD book rolling as we continue into 2026. But the non-interest or the interest-bearing deposit growth supports our loan growth. And as we continue to grow loans at a pretty healthy level, we've stated that we would try to continue to fund that with new deposits. And our deposit costs can be a little bit higher than some of our peers. We're fine with that as we add clients to the bank that will be with us for a long time.

Nathan Race
Nathan Race
Analyst at Piper Sandler

Understood. I appreciate it, Latif. Thanks, guys. Congrats on a nice quarter.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Thank you.

Operator

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

Chris McGratty
Chris McGratty
Managing Director at KBW

Oh, great. Good morning. Tim or Dave, I guess, what's not where you want it to be? It seems like a lot of positives in one column. What's not where you want it to be in terms of either growth by asset class or anything operationally?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

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

Chris McGratty
Chris McGratty
Managing Director at KBW

Okay. And then just following up, Tim, you don't need to do a deal with that kind of growth, but you have historically kind of entertained tuck-ins. What's the latest on M&A appetite?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah, Chris, you're right. I mean, we're aiming for organic growth, and that would be our plan. If we get an opportunity to do an acquisition, we think we're reasonably good at acquisitions, at least the smaller ones that we've done. Conversations continue. There's a little bit of fits and starts, but nothing that's worth talking about right now. And our business plan for 2026 is based on growing our business organically.

Chris McGratty
Chris McGratty
Managing Director at KBW

Great. Thank you.

Operator

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

Brendan Nosal
Brendan Nosal
Director of Research Department at Hovde Group

Hey, good morning, everybody. Hope you're doing well.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Good morning.

Brendan Nosal
Brendan Nosal
Director of Research Department at Hovde Group

Just to start off, good morning. Just to start off on capital, you've built ratios nicely over the last 12 months despite robust loan growth. Is there a point at which you see an alternative deployment outlet for capital beyond the dividend and organic growth?

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

I think as we talked before, I mean, generally, if you grow that mid to high single digits, we're probably growing capital at 10 basis points a quarter plus or minus, and we've been doing that. I think, as we said before, we want to focus on organic growth and see how strong that is. If that number starts to get to 10 and a half or above and we don't have any good acquisition opportunities and organic growth is mid to high single digits, that number would keep growing. Then I think you would look at buybacks and then dividend increases. Generally, it would be organic growth, well-priced acquisitions. Smaller acquisitions, I think, would be number two, then a buyback.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

And just for reference, we haven't talked about this in a while, but we do have a little over $200 million of an authorized buyback plan in place that we could use down the road if we wanted to. But right now, I think we're letting it grow a little bit. Going to see how the organic growth opportunities go and whether we can use it for that. And then we'll play it by ear after a couple of quarters down the road.

Brendan Nosal
Brendan Nosal
Director of Research Department at Hovde Group

Okay. Okay. That's helpful. Thanks. One more from me, just pivoting to credit and specifically the reserve. I think if I look back over the past two years, you've been gradually shaving a couple of basis points here and there off reserve ratios, whether it's the stated reserve to loan or the ACL to the core loan portfolio. I get that a lot of that is formulaic and driven by outside factors. But just kind of take us through the thought process on gradually bringing down reserves and where do you see coverage ratios trending across 2026?

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

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

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

And so we really do a fairly thorough process of using economic data, digging down with our teams on the loan side to build what that reserve should be. So we don't go into it with some preconceived notion that we should build reserves or release reserves. We look at all the factors and record the provision accordingly. So I don't want to give you an outlook as to whether you're going to build or release because I don't know what the economic factors are going to be in the future. And if you remember, CECL is a forward-looking concept, not a backward-looking concept.

Brendan Nosal
Brendan Nosal
Director of Research Department at Hovde Group

Yep. Yep. That makes a great deal of sense. Well, thanks for the color and taking the questions.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Thank you.

Operator

Thank you. Our next question comes from the line of Jeff Rulis of D.A. Davidson. Your line is open, Jeff.

Jeff Rulis
Jeff Rulis
Managing Director and Senior Research Analyst at D.A. Davidson

Thanks. Good morning, Tim. Maybe just back to the you talked about the macro environment being pretty favorable or optimistic with your customers. I wanted to touch on the competitive landscape. Some of your larger Midwest peers are engaged with deal activity down in the Southeast in Texas and wanted to kind of is a portion of your growth or market share gains from maybe competitors being focused elsewhere? Just a thought on if you could touch on that.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Sure. We've always benefited from disruption, distraction, call it whatever you want. But we believe our position in the Midwest is an attractive one. We believe the markets we compete in are actually very good markets. There's a lot of density. There's a lot of wealth. And to the extent that others elect to focus elsewhere at times, I think that's only helpful to us. But we compete with all of the big banks every day and a handful of Chicago-based competitors and, in some cases, credit unions in some of our markets. And so we believe we differentiate based on service and the people at the company, and we'll continue to do that.

Jeff Rulis
Jeff Rulis
Managing Director and Senior Research Analyst at D.A. Davidson

And I guess, Tim, just to kind of follow up then, I mean, you've outstripped a little bit of the even the high single digit, I think, 11% loan growth. And just trying to think about timing, do you look at 2026 as equal opportunity on that disruption as you've had in maybe the prior year? I guess the question being, any change to that? Is that closing? Are you seeing folks kind of reorient with the Midwest and might be a more competitive year ahead? Loaded question.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

It's hard to say. I think there certainly are lots of fits and starts for various competitors, and we have some folks that are trying to open more locations in Chicago and people that are trying to move teams, so I don't think that's anything really new. The only piece that I would say on loan growth relative to the last few years is we've obviously had a little bit of a tailwind in terms of premium finance with premiums rising in addition to the bank growing the number of units that we produce. And I think there is some flattening in terms of the premium environment for insurance companies. I don't know. People use soft and hard and all those terms. I just think it's probably up to us to grow the loans now as opposed to getting help from the market.

Jeff Rulis
Jeff Rulis
Managing Director and Senior Research Analyst at D.A. Davidson

Appreciate it. And just one other one, Rich. Looking at the linked quarter commercial non-performing loan increase, again, not big, and that could probably flatten it down from the second quarter. So the balances are kind of moving around. But anything you'd point to on the commercial linked quarter increase on non-performing loans?

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

No, not really. It's more episodic in nature, and we've said this in the past where we see things as just kind of one-off things, and we work to solve them and move along. I think when I look at credit quality in the portfolio, I really focus on where the special mention substandard numbers are, which we're seeing at a pretty consistent level, so things will occasionally go bump in the night, and that's our job to fix those, but this is really more, for this quarter at least, more of a we would kind of identify it as more episodic.

Jeff Rulis
Jeff Rulis
Managing Director and Senior Research Analyst at D.A. Davidson

Rich, on the, I guess, as we approach a year from kind of the tariff liberation day noise, your sense of customers, is there more maybe relative ease? I mean, that threat is always out there. But from a customer standpoint, do you sense any more comfortability than you were nine months ago?

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

Yeah. I think the ease around the tariffs is real. I think probably maybe even more so is, I think, labor costs are, if you go back a year or two years ago, labor costs and finding labor was really problematic. I think that that's improved quite a bit, and I think people kind of look at just a more stable labor environment, more predictable from an expense perspective, and so they're a little more comfortable today.

Jeff Rulis
Jeff Rulis
Managing Director and Senior Research Analyst at D.A. Davidson

Great. Appreciate it.

Operator

Thank you. Our next question comes from the line of David Long of Raymond James. Your line is open, David.

David Long
David Long
Managing Director at Raymond James

Hi, everyone.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Good morning, David.

David Long
David Long
Managing Director at Raymond James

We talked about M&A, and I understand you guys have an excellent organic growth opportunity in front of you and fully taking advantage of it. But in the past, you've talked about other MSAs and looking to replicate what you do in Chicago and other MSAs, Minneapolis, St. Louis, Indianapolis have been mentioned. Is there any appetite to move outside of the Chicago MSA at this point?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

I mean, we're in southeast Wisconsin and West Michigan now, which you know, David. I mean, we would be opportunistic in other Midwest geographies that we don't cover today, but that would be on a disciplined basis. Where we haven't been able to acquire, we've in some cases opened branches, and we've been effective in doing so. We've talked in the past about Rockford, and we've got some branches opening in Northwest Indiana this coming year. We'll take the opportunities as they come to us. If we need to go to other geographies organically, we think we've proven our ability to do that.

David Long
David Long
Managing Director at Raymond James

Great. Thanks, Tim. Appreciate taking my question. That's all that I have.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

You bet. Thanks, David.

Operator

Thank you. Our next question comes from the line of Terry McEvoy of Stephens Inc. Terry, your line is open.

Terry McEvoy
Terry McEvoy
Managing Director at Stephens Inc

Thank you. Maybe, Tim, just a question for you. As the industry continues to evolve, what are your current thoughts on the strategic benefits of operating 16 banking charters kind of relative to some of the costs and leveraging the Wintrust brand?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. The charter question comes up periodically, and we currently have 16 for those of you that are following along. We believe they continue to be a benefit for us. They keep us closer to the market than many of our competitors. We've centralized most of the infrastructure and expense that goes along with the charters. And so it's really more of a marketing and market function that we believe is valuable to us. And if you look at the communities in which we operate, in many of those communities, we're the number one or number two market share in very attractive markets. That's not a benefit we want to give up at this point. So we watch it carefully. The expense is not trajectory changing. It's a structure that we believe we operate well, and we'll continue to evaluate it as we go.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

But for the time being, we like it. There are clearly benefits. Deposit insurance is one of them. Our MaxSafe product obviously gives us the ability to provide customers more insurance than they might otherwise get. There are other benefits. And as you would expect, there are some other trade-offs. But the net balance for us remains positive.

Terry McEvoy
Terry McEvoy
Managing Director at Stephens Inc

Thanks, Tim. And then as a follow-up, about a third of last quarter's loan growth was in mortgage warehouse. And I think in the past, you've talked about gaining market share. But when you kind of look at the forward curve, is that portfolio kind of a headwind, a tailwind to growth expectations for 2026?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Obviously, it depends on what happens to the mortgage market. We've been successful in growing that business in a stable mortgage market because of the expertise our team brings and the job our folks do from an operational standpoint. But for us, that's a zero-loss business with very attractive dynamics. We think we're very efficient. It'll move a little bit with the mortgage volume over time. And if the mortgage market gets stronger, as we've talked about, it's a benefit to us both in terms of our core business and the warehouse business.

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

Yeah. In addition to which, yeah, I think it's a great point Tim brings up. It's the market, obviously, but they have done a really nice job of bringing new names in. And that comes with if you get the volume, you also get some fee income out of that and some very nice deposits. So I mean, it's been a great story in spite of the fact that you might get some volatility in overall rates. So we like where we sit in that space right now.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

And Terry, this to Dykstra, I would just add the mortgage market's been bouncing around the bottom for so long. I'd say over a period of time, there's way more upside than downside there. It just doesn't seem like the volumes are going to go much lower in the mortgage market. So I would think net-net over a quarter to quarter may change a little bit, but net-net there's probably more upside than downside there.

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

Exactly.

Terry McEvoy
Terry McEvoy
Managing Director at Stephens Inc

Thanks for taking my questions. Appreciate it.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

You bet.

Operator

Thank you. Our next question comes from the line of Casey Haire of Autonomous Research. Your line is open, Casey.

Casey Haire
Managing Director at Autonomous Research

Great. Thanks. Good morning. Happy New Year, everyone. Tim, I wanted to clarify your comments about the operating leverage dynamics. I think you said you expect mid- to high-single-digit revenue off of 2025 and then expenses to grow mid- to high 4%-5% versus the fourth quarter run rate. There's a little bit of excitement that you meant or that you said mid- to high-single-digit revenue growth off the fourth quarter run rate. Just wanted to clarify that.

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

Yeah. No, we're talking off of that since we generally have acquisitions in past years and we grow organically so good, we generally try to give you guidance off the fourth quarter run rate versus a full year. So when we're talking about forward growth, we're talking about off of the fourth quarter run rate on both sides there.

Casey Haire
Managing Director at Autonomous Research

Wow. Okay. All right. And then just to follow up on a couple of follow-ups on the NIM. So first off, I have your interest-bearing deposit beta cycle to date around 57%. Just some updated thoughts as to where that can trend to, yeah, in 2026.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. As we've talked about on prior calls, our guess on the deposit beta in terms of total cycle is going to be in the low 60s. And we continue to believe if we get rate cuts that we'll do a nice job managing the deposit, the interest-bearing deposit expense. And so I don't think our view has changed there.

Casey Haire
Managing Director at Autonomous Research

Okay. Very good. And just last one for me. The hedge program that you guys detail on slide 12, you do have a number of hedges that mature this year. Does that hurt your ability to hold the NIM stable, or is there a plan to backfill with new hedges as they come off?

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

No. Our guidance fully contemplates those hedging programs running off, but we would expect, depending on market conditions, to backfill that and just probably do some forward starts and fill in the gaps going forward as they mature, but we think, given our current position, our current swaps in place, and our growth projections, is that we will hold the margin in the 350s, and as Tim said, if rates go up two or three times or down two or three times, we still think we're there, so we think we're very neutral for a full year with the margin.

Casey Haire
Managing Director at Autonomous Research

Great. Thank you.

Operator

Thank you. Our next question comes from the line of David Chiaverini of Jefferies. Your question, please, David.

David Chiaverini
David Chiaverini
Equity Research Analyst at Jefferies

Hi. Thanks. Maybe just starting off with further clarification on that run rate comment. So are we talking 4Q 2026 versus 4Q 2025, those growth rate figures, or are we talking full year 2026 versus the 4Q 2025 annualized?

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

I'm taking 4Q 2025 annualized that to get to a number, and then you can put the growth rates on top of that for the full year of 2026.

David Chiaverini
David Chiaverini
Equity Research Analyst at Jefferies

Perfect. Thank you for that. And then I wanted to ask about the mortgage banking outlook. It sounds like that could be a nice swing factor for 2026. Can you talk about your expectations in terms of volume, gain on sale margins, whether those could increase or be under pressure, and just give us a sense of how optimistic you are on that business?

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

I guess we've always been optimistic. I think the last two years, I've been optimistic for a great spring buying season. It hasn't occurred, but we are optimistic. There's still a supply shortage out there. I mean, if you look at our mix of business in the fourth quarter, it was about 50/50 purchase and refi. In the prior three quarters, it was probably three quarters purchase and a quarter refi. As rates have come down, we've seen a little bit of a pickup in refi, but also a slow winter buying season in the fourth quarter.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

But if you sort of look at the servicing portfolio that we have out there, which is a sizable portfolio, we've got maybe at the current rates around in the low 6s. We've got between 10% and 15% of that portfolio is sort of in the money to refi. But if rates go down another 25 basis points or let's say 50 basis points, you'd have more like a quarter of that portfolio would be refinancable. So we think if rates go down 25 to 50 basis points on the mortgage side, that we could have some pickup. But the ten-year has been going up. And so I can't predict interest rates, but we are optimistic that if the mortgage rates stay where they are now and drop a little bit further into 2026, that there's some pickup there. There's upside.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

And we don't think that going down much further is really that probable. We've been in the low 20s for quite a while here and with very low application volume. So unless rates really shoot up in the mortgage market, we think we can hold this revenue. So we look at it as upside, and we're optimistic it happens, but we can't control the mortgage rates.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. And maybe the other benefit, which has been the case now for a couple of years, is as these low rates have continued, many of the sort of refinance independent broker mortgage operations have gone out of business. And so our share of the market, we think, is up considerably. And when it comes back, we expect to do well.

David Chiaverini
David Chiaverini
Equity Research Analyst at Jefferies

Very helpful. Thank you.

Operator

Thank you. Our next question comes from the line of Ben Gerlinger of Citi. Your line is open, Ben.

Ben Gerlinger
Ben Gerlinger
VP of Equity Research at Citi

Hey. Good morning.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Good morning, Ben.

Ben Gerlinger
Ben Gerlinger
VP of Equity Research at Citi

Sorry. Just wanted to double-check and maybe fine-tune a little bit here, and I apologize for being a little myopic on it, but you talked through the property casualty insurance market, and I agree, softening versus strengthening, I don't know either, but it seems like the pricing is a little limited year-over-year, so is it fair to think 2Q will still be a good growth quarter, but maybe not as heroic as we've seen previously? I'm just trying to fine-tune the first half of the year in terms of modeling growth.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. I think the only point we were trying to make is that for the last couple of years, we've had the benefit of premiums going up. That may not be the case right now. We don't think they're working against us, but we still expect a strong second quarter. It's a seasonal component of the property and casualty premium finance business, and we would expect to have a good second quarter.

Ben Gerlinger
Ben Gerlinger
VP of Equity Research at Citi

Gotcha, and then just kind of at a 50,000 ft view, you guys generally tend to show loan growth and deposit growth in roughly the same quarter. Is that a fair way to think about this year given kind of what's transpired over rates and your outlook for growth?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. We certainly aim for deposit growth to mirror our loan growth. And we would take more deposit growth if we could get it. Again, that's adding clients that will be with us for a long time. It can be lumpy, so I can't tell you they're going to exactly mirror each other, but that would be our target.

Ben Gerlinger
Ben Gerlinger
VP of Equity Research at Citi

Gotcha. That's helpful. Thank you, guys.

Operator

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

Jared Shaw
Jared Shaw
Managing Director at Barclays

Thanks. Good morning. Most have been asked and answered, but I guess just as you look at hiring incremental revenue producers here, are you seeing competition impacting what you have to pay for new people here, or what's sort of driving the movement of revenue producers among companies right now?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. I don't think there's been a hugely material change. Obviously, top-tier producers can be expensive, and we think we do a good job of not only working our own team and periodically finding others. We don't talk about it a lot here just because it's a normal part of our business. And so we're always looking to add folks that are very good at taking care of customers and help us differentiate our services.

Jared Shaw
Jared Shaw
Managing Director at Barclays

Okay. Thanks. And then just finally, looking at construction down this quarter, any color on the build-out of construction and how that could potentially be funded up as we move through next year or this year?

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Are you talking about just general construction lending?

Jared Shaw
Jared Shaw
Managing Director at Barclays

Yeah. It was down this quarter, I'm guessing, from completions. But sort of what's the growth outlook there?

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Yeah. I would say it's kind of, Chicago hasn't been a huge construction market. We've seen a little bit, but I think there's more upside there. I mean, multifamily, for instance, in Chicago continues to be very strong. Some other markets are maybe struggling a little bit more because of oversupply. So I actually think we're feeling okay about where construction activity will be for this coming year.

Jared Shaw
Jared Shaw
Managing Director at Barclays

Great. Thank you.

Operator

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

Janet Lee
Janet Lee
Director of Equity Research at TD Cowen

Good afternoon. Not to beat a dead horse, but just to clarify on your outlook for Resi Mortgage and Mortgage Warehouse, is your mid to high single-digit loan growth for 2026 contemplate a level of bullish? Are you assuming that mortgage rates perhaps dip to the 5% handle? Are you baking in a level of mortgage rate reduction in your mid to high single-digit outlook, or were you referring to an additional upside to the mid to high single-digit loan growth if mortgage rates do dip below 6%?

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Janet, the assumption would be a slightly improved mortgage market in line with the Mortgage Bankers Association projections, not any dramatic drop in rates. And Dave, a couple of minutes ago, gave you a little bit of a sense for how much volume you could get if the rates dropped. But I think to get any very, very material lift, rates would have to go below 6%.

Janet Lee
Janet Lee
Director of Equity Research at TD Cowen

Got it. And on your NIM outlook for stable, I think there's room for interpretation since you're characterizing four basis point increase in NIM this quarter as being stable. You're pretty neutral to rates it seems, and 60% beta also seems solid. What are some of the drivers that could put you to either perhaps increasing net interest margin through 2026? And are you still seeing the phenomena of seeing some spread compressions on fully funded CRE, which you've talked about in the past quarters? Thanks.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Well, we've talked about competitive pressures largely from folks that maybe haven't grown as quickly as we have and kind of desire to do that. And so I think there still is a fairly competitive environment for fully funded loans. But some of that's transaction-based, and we're really much more focused on relationship-based arrangements. If the competitive environment changed dramatically, you could get some pressure on the margin. Obviously, the first quarter with a couple fewer days has a math impact on the margin. But we're actually pretty neutral, almost independent of rate changes. And given the visibility to the competitive environment, that would be the case there too.

Janet Lee
Janet Lee
Director of Equity Research at TD Cowen

Thank you.

Operator

Thank you. Our next question comes from the line of Bill Happle of 22V Research. Your line is open, Bill.

Operator

Good morning, guys. Thanks. Can you just maybe talk through the fixed asset repricing that you're seeing on both the loan and the security side, kind of where roll-on, roll-off yields are in both books? Thanks.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Yeah. Well, we really haven't talked about the roll-off yields on them. We have so very little commercial and commercial real estate fixed asset repricing. Most of our fixed asset repricing comes out of the premium finance portfolios. Life is fixed for a year, and so it reprices once a year. So it takes a full year for that portfolio to reprice. That portfolio is generally 12-month CMT plus 200 basis points. So if you look back a year and see where the 12-month CMT was and look at current rates, you can kind of calculate that impact. And commercial premium finance is generally, well, it's not tied to Prime, but generally has good correlation to the Prime Rate. And there are nine-month loans that are fixed rate that pay monthly. So it takes nine to 10 months for them to generally turn over.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

So again, if you look back at what the Prime rate was nine to 12 months ago and look at where they are now, you can probably get some good feel for that repricing. The commercial portfolio repricing on securities, it's very little cash flow. So basis point or two here or there, impact of nothing material.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Got it. And where are you adding the securities that you added in the available for sale book? Where were those yields coming on? Where were you purchasing?

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Around the 5% level.

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Yeah. High fours, five.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Yeah.

David Dykstra
David Dykstra
Vice Chairman and COO at Wintrust Financial Corporation

Got it. Okay. Thank you very much.

Operator

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

Tim Crane
Tim Crane
President and CEO at Wintrust Financial Corporation

Thank you, Latif. As always, for those of you on the phone, we appreciate you joining us and for your support. We start 2026 in a good place. I hope we've answered your questions. If not, you know where to find us, and we'll be working hard for all of you and for our shareholders. Thank you.

Operator

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

Executives
    • Company Representative
    • Richard Murphy
      Richard Murphy
      Vice Chairman and Chief Lending Officer
    • Tim Crane
      Tim Crane
      President and CEO
    • David Dykstra
      David Dykstra
      Vice Chairman and COO
    • Dave Stoehr
      Dave Stoehr
      CFO
Analysts
    • Terry McEvoy
      Managing Director at Stephens Inc
    • Casey Haire
      Managing Director at Autonomous Research
    • Nathan Race
      Analyst at Piper Sandler
    • Chris McGratty
      Managing Director at KBW
    • Ben Gerlinger
      VP of Equity Research at Citi
    • Janet Lee
      Director of Equity Research at TD Cowen
    • Jeff Rulis
      Managing Director and Senior Research Analyst at D.A. Davidson
    • David Long
      Managing Director at Raymond James
    • Jared Shaw
      Managing Director at Barclays
    • Analyst
    • Brendan Nosal
      Director of Research Department at Hovde Group
    • Jon Arfstrom
      Managing Director at RBC Capital Markets
    • David Chiaverini
      Equity Research Analyst at Jefferies
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