Wintrust Bank posted its eighth straight record annual profit after growing net earnings 33 percent, to $243.2 million, last year.
The Rosemont-based bank, which has branches in Dyer, Lansing and throughout the south suburbs, boosted profits by 16 percent year-over-year to $79.7 million in the fourth quarter. The bank earned $1.35 per diluted share in the fourth quarter, up from $1.17 per common share in the fourth quarter of 2017.
"Net income was $79.7 million for the fourth quarter of 2018, down from the third quarter of 2018, primarily due to market-related adjustments resulting from quickly declining interest rates and lower equity markets late in the year," Wintrust President and CEO Edward Wehmer said. "These market-related adjustments and acquisition-related expenses incurred in the fourth quarter negatively impacted our net overhead ratio by 18 basis points. During the fourth quarter, total assets and deposits grew by over $1 billion while we leveraged acquisitions to enhance our deposit mix. A substantial amount of the balance sheet growth occurred near the end of the quarter, which positions us well for the first quarter of 2019."
In the fourth quarter, Wintrust grew loans by $697 million, including $119 million of loans acquired in the merger with American Enterprise Bank. Deposits increased by $1.2 billion in the fourth quarter, as compared to the previous quarter.
"We experienced strong loan growth in our commercial, commercial real estate and premium finance receivables portfolios during the fourth quarter, increasing our total loans outstanding by $697 million. Our loan pipelines remain consistently strong, and reflect opportunities to continue to grow loan balances during 2019," Wehmer said. "Deposit growth outpaced loan growth during the fourth quarter, lowering our loan-to-deposit ratio to 91.3 percent at year-end. Organic deposit growth in the fourth quarter occurred across all deposit categories, except time certificates of deposit."
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Wintrust's non-performing assets decreased by $17.5 million and now only account for 0.44 percent of total assets.
"Both non-performing loans and other real estate owned declined during the quarter," Wehmer said. "Additionally, near-term 60 to 89-day delinquent loans declined to $34.2 million or only 0.1 percent of total loans in the fourth quarter of 2018. The allowance for loan losses as a percentage of non-performing loans ended the year at 135 percent. Net charge-offs for the fourth quarter were 12 basis points of total average loan balances with full year net charge-offs at a historically low level of nine basis points of total average loan balances. We believe that the company’s reserves remain appropriate. The company begins 2019 with credit quality in a very strong position but will continue to be diligent in its review of credit."
Wintrust expects to continue to grow in 2019, including through mergers and acquisitions.
“As 2019 begins, we expect our growth engines to continue their momentum. We expect continued organic growth in all areas of our businesses," Wehmer said. "Total period-end loans outstanding exceeded fourth quarter total average loans by $657 million, providing momentum for net interest income into the first quarter of 2019. Net interest margin is expected to improve in first quarter of 2019 fueled by the CDEC acquisition and stabilizing retail deposit costs. We will continue to take a steady and measured approach to achieving our main objectives of growing franchise value, increasing profitability, leveraging our expense infrastructure and continuing to increase shareholder value. Evaluating strategic acquisitions and organic branch growth will also be a part of our overall growth strategy with the continued goal of becoming Chicago’s bank and Wisconsin’s bank. We believe our opportunities for both internal growth and external growth remain consistently strong."