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Sep 30, 2022
Wintrust Q3 2022 Earnings Report
Reported strong net income and record quarterly pre-tax, pre-provision income (non-GAAP). Benefited significantly from the recent rise in interest rates as net interest income and net interest margin showed substantial growth. Added strong loan growth in the third quarter, which paired with margin expansion.
Key Takeaways
Wintrust Financial Corporation reported a strong third quarter in 2022, with net income of $143.0 million or $2.21 per diluted common share, a 48% increase compared to the second quarter of 2022. The company benefited from rising interest rates, substantial growth in net interest income and net interest margin, and strong loan growth.
Net interest income increased by $63.6 million or by 19% as compared to the second quarter of 2022 primarily due to improvement in net interest margin and loan growth.
Net interest margin increased by 42 basis points as the upward repricing of earning assets significantly outpaced increases in deposit costs.
Total loans increased by $1.1 billion, or 12% on an annualized basis.
Total assets increased by $1.4 billion totaling $52.4 billion as of September 30, 2022 and total deposits increased by $204 million.
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Wintrust Revenue by Segment
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CapyFin.com Forward Guidance
Wintrust expects to leverage its diversified loan portfolio to outperform peers in loan growth and expand net interest income. The company is focused on deploying liquidity into earning assets while maintaining an interest rate sensitive asset portfolio. Wintrust is closely watching expenses and believes its efficiency ratio will continue to improve. The company is opportunistically evaluating the acquisition market for both banks and business lines.
Positive Outlook
- Loan yields will continue to reprice at a greater magnitude than deposit costs.
- Net interest margin will continue to expand and should approach 4.00% during the first quarter of 2023.
- Leverage diversified loan portfolio to outperform peers with respect to loan growth which should allow us to continue to expand net interest income.
- Focused on taking advantage of market opportunities to prudently deploy liquidity into earning assets including core and niche loans and investment securities while maintaining an interest rate sensitive asset portfolio.
- Efficiency ratio will continue to improve.
Challenges Ahead
- Uncertain economic conditions may persist in the coming quarters.
- Non-performing loans comprise only 0.26% of total loans as of September 30, 2022 increasing to $97.6 million as compared to $72.4 million as of June 30, 2022.
- Closely watching our expenses
- Remaining diligent in our consideration of acquisition targets and intend to be prudent in our decision making, always seeking to minimize dilution.
- Subject to no material change in the consensus projection of interest rates as of this release date