Wintrust Financial Corporation (NASDAQ:WTFC.M) Q3 2016 Earnings Conference Call - Preliminary Transcript

Oct 18, 2016 • 03:00 pm ET

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Wintrust Financial Corporation (NASDAQ:WTFC.M) Q3 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Welcome to Wintrust Financial Corporation 2016 Third Quarter and Year-to-date Earnings Conference Call. At this time all participants are in a listen-only mode. (Operator Instructions)Following a review of the results by Edward Wehmer, Chief Executive Officer and President, and David Dykstra, Senior Executive Vice President and Chief Operating Officer, there will be a formal question-and-answer session.

During the course of today's call, Wintrust's 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. 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 the third quarter and year-to-date earnings press release and in the company's most recent Form 10-K and any subsequent filings on the file with the SEC. As a reminder, this conference call is being recorded.

I will now turn the conference call over to Mr. Edward Wehmer.

Executive
Edward Wehmer

Good afternoon everybody and thanks for joining us for our third quarter earnings call. I am here with Dave Dykstra, our Chief Operating Officer, Dave Stoehr, our Chief Financial Officer, and Kate Boege, our General Counsel. Our call will as usual take the normal format, I will discuss some general comments about the quarter, Dave Dykstra will go into detail on other income and other expense categories, he will turn it back to me and we can summarize the quarter and talks about the future and then we will take some questions.

In general we are very pleased with the results this quarter. We showed good progress on all fronts and we continue to grow profitably and profitably into our overhead base, and prospects for continued growth remain very positive. Highlights for the quarter, record earnings to 53.1 million or $0.92 a share, up from the second quarter and up from previous year by about 38%. Year-to-date earnings of $152.3 million or $2.72 per share were up 26%.

If you look at the quarter, odd-ball items actually in our opinion went against us just based on the way we look at it. We had a $3.3 million gain on securities offset by $2.5 million mortgage servicing rights evaluation adjustment and $1.8 million in legal dispute accruals, if you add those up its 1 million negative in pre-tax. So that's kind of the way we look at it.

Evaluation charge was obviously a factor of market rates and prepayment speed and should and could turn around if rates ever go up. The $1.5 million legal arbitration award, now typically we do not comment on litigation related matters, (technical difficulty) $1.4 billion the earnings were obviously hurt by the mortgage servicing devaluation. Wealth Management had good revenue growth also.

On the operating expense side non-variable operating expenses were well contained and Dave will comment on that. Our net overhead ratio was down to 144 from 146, again ahead of our goal of 150. Long-term we expect this number to continue to