Wintrust Financial Corporation (NASDAQ:WTFC) Q3 2019 Earnings Conference Call - Final Transcript

Oct 17, 2019 • 02:00 pm ET


Wintrust Financial Corporation (NASDAQ:WTFC) Q3 2019 Earnings Conference Call - Final Transcript


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Welcome to Wintrust Financial Corporation's Third Quarter and Year-to-Date 2019 Earnings Conference Call. [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 our earnings press release and in the Company's most recent Form 10-K and any subsequent filings on file with the SEC. Also our remarks may reference certain non-GAAP financial measures. Our earnings press release and slide 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. Edward Wehmer.

Edward Joseph Wehmer

Thank you. Good afternoon, everybody. Welcome to our third quarter earnings call. With me as always are Dave Dykstra, our Chief Operating Officer; Kate Boege, our General Counsel; and Dave Stoehr, our CFO. What we do, we will have the same format as usual; I'll give some general comments regarding our results, turn over to Dave for a more detailed analysis of other income, other expenses and taxes, back to me for some summary comments and thoughts about the future, and then have some time for questions on the financial results for the quarter and year-to-date.

In general, the quarter can be summarized as follows: Record quarterly earnings, nice we will say that again; very strong organic balance sheet growth; margin and net interest income pressures due to rate environment effectively offset by strong mortgage results and balance sheet growth; credit metrics returned to historically low numbers; one-timers being the MSR valuation adjustment, the FDIC refund of $4 million each that basically offset each other; and we had about $1.3 million pre-tax and acquisition-related expenses. Net income was $99.1 million for the quarter up to close to $270 million for the year, that's up 2%; same could be said for the earnings per share on a year-to-date basis, $4.60 compared to $4.50 and $1.69 compared to $1.38 for the quarter, up 22% from last quarter, but then that last quarter, general included some extra charges on the credit side. If you look at that income pre-MSR valuation adjustments, the quarter was up 21% and the year was up 9%; same for earnings per share.

So close to the double-digit earnings growth that we project and that we always look for. Return on assets was up 1.16%. Return on equity, 11.42%. Return on tangible equity of 14.36%. Net overhead ratio dropped to 1.40% due to a balance sheet growth and fee income on the mortgage side, that 24 basis point drop basically offset