Wintrust sees higher third quarter profit from rising loans, deposits

Despite an increase in net income for the third quarter, share prices for Wintrust Financial fell on Friday.
Despite an increase in net income for the third quarter, share prices for Wintrust Financial fell on Friday.

By Megan Hart

Wintrust Financial Corp. said third quarter profit rose 13 percent on growth in loans and deposits and higher revenue from mortgage banking.

The Rosemont-Ill. company’s net income climbed to $40.2 million, or 79 cents per diluted share, from $35.6 million, or 71 cents per diluted share, a year ago. The results exceeded the 78 cents analysts polled by Yahoo Finance had expected.

“The current quarter was characterized by strong loan and deposit growth,” Wintrust President and CEO Edward Wehmer said in a press release.

Wintrust operates as a holding company for a number of community banks in Illinois, Wisconsin and Indiana, as well as insurance, mortgage and investment subsidiaries.

Net interest income rose to $151.7 million, an increase of 7 percent over last year’s third-quarter. The climb in net interest income came despite a decline in net interest margin, which narrowed to 3.5 percent from 3.6 percent a year ago.

“The increase in loan volume drove higher net interest income in the current quarter despite a decline in net interest margin,” Wehmer said.

Margins were squeezed in the quarter by increased competition for loans in the commercial and commercial real estate markets, the bank said. Acquisition-related costs and higher salaries and employee benefits also hurt profit margins.

Wintrust said it saw an improvement in loan credit quality in the third quarter and the company’s provision for credit losses, at $6 million, was 48 percent below the provision in the year-ago quarter.

In the third quarter, Wintrust closed on the purchase of 11 bank branches in southern Wisconsin from Talmer Bancorp Inc., a Michigan-based firm. It also announced on Tuesday that it will purchase Delavan Bancshares Inc. for $38 million in cash and stock. Delavan operates four branches in southern Wisconsin, a market that Wintrust has aggressively pursued since the beginning of the year. The deal with Delavan is expected to close in early 2015.

For the nine months ended September 30, Wintrust’s net income rose 11 percent to $113.3 million, or $2.23 per diluted share, from $101.9 million, or $2.05 per share, in the year-ago period.

Wintrust shares fell 24 cents, or less than 1 percent, to close at $43.82 Friday.