Wintrust Financial (WTFC)

Edward Wehmer Founder and CEO
David Dykstra VC and COO
Rich Murphy VC and CLO
Dave Stoehr EVP and CFO
Tim Crane President
Jon Arfstrom RBC Capital Markets
David Long Raymond James
Terry McEvoy Stephens
Brock Vandervliet UBS
Nathan Race Piper Sandler
Michael Young Truist Securities
Chris McGratty KBW
Call transcript
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Welcome to Wintrust Financial Corporation's Second Quarter and year-to-date 2021 Earnings Conference Call. A review of the results will be made by Edward Wehmer, Founder and Chief Executive Officer; Tim Crane, President; David Dykstra, Vice Chairman and Chief Operating Officer; and Richard Murphy, Vice Chairman and Chief Lending Officer.

As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation.

Following their presentation, there'll be a formal question-and-answer session.

During the course of today's call, Wintrust management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statements. materially forward-looking results statements. differ in or could such any results from anticipated the projected Actual discussed are The SEC. with the release XX-K differ information and actual forward-looking and results this company's assumptions most filings to materially that in the any from recent earnings subsequent in the our detailed could company's cause during press call Form the file on remarks our may Also, non-GAAP measures. reference financial certain

to and release its earnings release nearest a measure. include financial of measure press presentation non-GAAP reconciliation financial earnings the GAAP comparable Our

As a I Wehmer. conference to reminder, this is being Edward conference call will recorded. call Mr. the now turn over

Edward Wehmer

Good morning call. everybody earnings welcome and second quarter our to

going with We'll the first Stoehr, you Rich format President mentioned -- balance Operating us and can Dave in the are Boege, stick sheet, to Chief the we me about Vice overview will started Tim will our Officer; CFO; statement. of Rich about comments the of of Chairman give analysis as with Crane, Murphy detailed summary back I'll As provide Murphy, Dave me much where to Crane listen talk for the to and income Credit. Dave future. talk an our me quarter Dykstra; Kate General is Tim will of credit [indiscernible] Counsel; David some Dykstra

Wintrust so the Of Today so, so be course will it. to general capital the good. and [ph], quarter time go I support response for to questions. massive along indicated Last rate April have and we started far we'll government pandemic we through interest try environment.

since growth all growth The time. has today is -- quarter Second strategy of shows has organic been period the our the working. been

our quarter was say. to I'd quarter like dollar million Second

of PPV plus by core the $X loans billion grew surpasses Assets loans or minus. approximately out

quarter million million was totaled common growth remain $X.XX the $X.XX common share. income income or very good. or $XXX.X Year-to-date per $XXX prospects per for Our The share.

was up and to QX. $XX.X net income net nine million basis our margin interest grew Our points in interest X.XX% reported

up investment PPP Period income exceeded in NIM the loan loans million. for of grew growth points end the was in three the activity grew back end by basis $XXX loan over three. average quarter Our at quarter loans X.XX%. Core quarter the

nice pocket. So our we -- in a back with QX started

so excellent -- remain and XX% normal our important very and And is was about growth pipelines low lining, average loan in pipeline It's an the XX%. our closer good. all-time businesses to it's an our

we'll were NPAs go or two with built So even $X.X there Quarter NPLs points. better in charge-offs back we reached to growth net out. million $XX.X of and NPLs points, $X got we've basis million billion there. basis XX

is resulted this in stand Mortgage about has detail. NPAs It saying should credit relative management Our believe. basis a getting in total that $XX.X were better, can't immune my will keeps noted this the release time $X.X be been assets. points to million. This Dave quarter. I in XX better, story. and keep wealth at get decline growth discuss reserve experiencing in

X.X% Assets the world and XX% market business. in administration billion through quarter $X new or grew under or annualized

end it's at prior million, in $XX.X $XX.X grown million management quarter was wealth Our to one of outflow $XX the assets million year. the

Tim Crane

it I'll review I'll maybe second statement. sheet of just a turn for balance then and for the to Dave the review turn a to income over Dave.

strong categories, across excluding loans was worth to experienced highlighting loan very the here; core Ed growth. spread up loan PPP billion were $X.X up in first the $X.X we in annualized. of growth equates $XX.X grew this As is excluding loan XX% a XX% growth Rich our a to commercial real nicely our Couple billion. estate quarter. mentioned, niche PPP and assets annualized billion and quarter On Growth share just little basis $X.X few more a will detail a year-to-date minutes. businesses. over on in billion basis items percentage

As hurt believe our quarter in than coming in activity. growth will help continue a to growth solid a reverse decline quarters rather numbers and the trend were the loan utilization, Ed mentioned during we we see that we these and hope will

accelerated end the the accelerating markets. peak economic a at during quarter. of $X.X of strong the pipelines as activity remain loans saw of in to the we as billion see were loans, reduction respect addition, down of With at end first materially $X.X a the from In forgiveness evidence our the $X.X PPP billion Total the PPP of quarter. we quarter activity billion

the a we on For to credit We high strong market improved conditions. this could of growth Deposit the year, [ph], or mid term XX%. with in growth Deposit utilization of continue the upside percentage as repriced Majority of of to represents million. was target non-interest-bearing growth we fall deposits. DDA quarter annualized costs with of $XXX continued the primarily growth comfortable basis. remainder single nearly either remain loan for digits our line

points, fell basis third XX trend expect an the basis continue seven Notably deposits deposits a DDA the interest-bearing quarters. of comprise points cost now our total the deposits. to quarter, additional the a coming in non-interest-bearing of we For to

monitoring As deposit noted the we've in carefully. prior significant growth quarters, we're

securities relationships. However, the remain deposits position for to We we yields. held quarter. also as our liquid. will quarter during very wary Obviously, With our low like low strength long-term in liquidity, and essentially in low a cost falling stable of excess continue company locking levels grow cautious those of the view deployment stable most related to remain at many we deposits we our rates client of the of institutions,

future an of this We continue as evaluate opportunity options our to appropriate and the view in periods. deployment liquidity

or Given generally Capital excluding second the or income interest the lower forward, Dave? as growth PPP given of we of of economic the coming risk interest both will levels rates benefit quarter steady we with enter stronger in appropriate bank. going remain PPP, higher Overall, accretion the to strong steady where quarters remain conservative net during either volumes expect year. steady profile generally the the held and and improving despite we levels net land essentially well-positioned to expected we from think margin. activity half

Dave Stoehr

Tim. Thanks

first categories the income. the starting Ed income As interest indicated, with cover I'll statement net noteworthy

yield by additional interest-bearing interest in margin For approximates year. to net the additional assets totaled the increase as yield quarter of increase offset as million was income paid And the late the into interest-bearing to in partially interest recognition basis four investments was nine appointment was the income second excess lower on time the the day be was of point sheet $X margin on our on deposits, $XX.X net margin. the million as in again to The $XX.X point quarter the on million release XX basis decrease from second improved decrease on a of to liquidity paid two liabilities the the second to in in due points we $XX.X The compared quarter of is basis day The compared point and quarter growth seven from for decline prior deposits. million quarter The earning quarter net liquidity over quarter $XXX.X the tailwind the declined improved which forgiveness Wintrust. basis compared and the up X% of management the million quarter the increase basis assets three our and activity in to to PPP quarter liquidity of and on the the securities of loans one seven accelerated XXXX of on $XX.X basis second increase portion prior liabilities on increase point the contribution. fee for in we rate first point the by to a in in will your XXXX, assets liquidity $XX.X rate was income noted, such the during of million net a an the X.XX% increase on quarter. as was in quarter, one of the in rate the interest of additionally compared due interest reference, through net earning that a margin last our basis market point an accretion due and the the as basis first in a noted Tim comprised primarily believe the affected yield as improvement that first primarily to four conditions refunds compared a points deployment net press first expansion interest-bearing was million XXXX interest as a prior repricing primarily when net second balance earning and quarter quarter. yield asset of to of

to quarter a credit a this expense the negative $XX.X to for to was BAA year spreads. for other losses credit corporate and million in by million estate index and many $XX.X similar similar million in a the of macroeconomic provision the compared to losses commercial forecasts credit Wintrust prior provision price provision banks quarter negative Turning $XXX.X for in in improvements due provision recorded in driven recorded of credit that have directionally provision quarter. reported improvements negative including ago reduction the the The real primarily losses, allowance

for decreases portfolio provide in will loan XX you and for loans credit just additional and company the the migration. improvement and Rich on lot losses the the including loan rating deck website that in loan, the improving quality will characteristics loan Additionally, about our allowance a minutes. macroeconomic risk factors credit improvement we quarter details COVID-XX saw in few the in the presentation the related detail more during in Slide give modified cover a impacting nonperforming COVIDXX modifications

first in $XX.X and increased the This quarter impact in income our asset income source noninterest the higher the the revenue portion quarter. has accounts. another $XX.X million to $X.X net by million ago the noninterest equity of of wealth expense to which quarter level positively revenue valuations second in In income $XX.X from revenue tax record pricing on to XX% managed million income sources Turning the our compared statement, of sections. noninterest million in impacted the the the year management been and recorded

of of net the related the the a decline billion capitalization the volume million MSR due To a $XX $XXX.X positive $X.X banking XX% million the second year. last impact quarter the the in solid year to mortgage first Mortgage company a $XX the approximately as negative value few compared value payoffs and the second to the to due to revenue record servicing XXXX $X.X high A quarter, end, adjustment in was quarters decrease capitalization of level and well that loans of quarter down loans Turning $XX the in pay-downs, lower fair items. of quarter to the marketplace. revenue the to $XX.X in million servicing refinance each first volume off and in of quarter of originated rights billion as compared XXXX in the value that loan the as sold a for for of mortgage retained the of decreased in contributing million second reduction but in impact revenue, prior saw in $X.X of million past reasonably related the banking the second of the rights in million as following the origination servicing of from $XX.X seen the the valuation sale revenue current million quarter for we quarter approximately mortgage mortgage origination to activity of in quarter MSR decline during in decrease to primarily to retained.

reduction associated rate and a of was mark-to-market decline aforementioned on interest to production marketing lock commitment to million due volume lower $XX secondary impact million declining reduced Another pipelines. and the $XX primarily due sale with gains gain

end the the first the than quarter Our at pipeline of was quarter. second smaller

levels secondary enhancement normalization to demand margin a recognized gains First demand, timing marketing range consumer quarter. from first atypical investor with through prior a the quarterly and to that the more quarter. historically of in quarter gains related the the hedging had of market associated in typical assigned trades also second of XXXX benefited on where gains strong in The market the environment quarter drove elevated we the of strong secondary general

the on revenue mortgage line any with mid-$XX expect we some pipeline we second and origination to second activity, quarter in the volumes roughly in the third to the valuation range. to the forward MSR Looking adjustments be for very quarter than current mortgage the in be in quarter the based million excluding or experienced less similar the origination slightly

that expected note lower the estimate expenses should I to is for However, second quarter. aforementioned the in revenue although quarter be with line in The quarter. the the should third third operating trend

once revenue lock we still we loans that the reductions Accordingly, close interest process expense the to the record as underwrite know the revenue majority we in mortgage that of need net loans expect that. processing in commissions essentially many the naturally at in lag you the the and As and end rate when we pay well recognition higher loans commitment of associated are with originate. those Since on and close. of as off the into the quarter were pipeline second first pipeline the quarter closing expenses drop lagged loans the substantially pipeline that mortgage and lagged the the

pipeline As quarter. loans the we to mortgage-related of see expect third the decreased corresponding expenses decrease second would has a during quarter, in in the

the at valuation $XX $XX decline. declined in the associated revenue expenses assuming the mortgage you in million decline third of have currently We've valuation, million the, measurements. secondary mid-$XX are mortgage I to decline $XX simply related know noninterest those of decline, not in marketing to revenue consider in aggregate evaluate reduction, expenses we $X range. valuation anticipate and any revenue, when million the further should pipeline range the excluding So relative or that's that MSR amounts should MSR mortgage-related you gains any the the in million that the of to million quarter, expense

So million. reductions the fall with through production $XX of really the expense decline

a interest guided to of be additional a little expenses just that guide we adjustment should be with able will wildcard I profitability note revenue end to I third So the additional other expense last our, our to commission $X rates million days, the of dropped continues, new revenue have that dollars first in applications have the mortgage were then that valuation rates quarter. on just associated the on be an the caveat should few higher couple quarter. that net at MSR a saw. rates, than the quarter expense of production that and considerably to million lock the we we said, revenue we're we mortgage in $X reductions, expense With And where the that and expected interest of Also, that third reductions reductions. the $X tied have of million in of reductions million would at it's I increased. If pipeline in would than that the what million I what and said, going being but higher decline expect to to always generally not speculate also in $X and

categories $XXX.X the $X.X about those, And account And quarter MSRs majority of in million that would of was focus non-interest change million $XXX.X those the amounts million the locations a million quarter, recorded was Wisconsin the the that that increase up other the of gain quarter. categories, recorded prior of transaction There in that from just total be exclusive primary Southwestern a the down prior the non-interest the second for the handful are talked so I million during that'll expense disclosed $XX.X quarter. quarter. from non-interest reason income sale closed branch in second in XX.X $X expenses previously on the on. $X.X few the totaled a from approximately or million prior X% million for The

marketing associated year, first with prior and of location quarter the and $X.X the level other totaled just that employee commissions approximately and salaries comp to the to primarily million $X.X Lower first $XX.X which repairs $XX to million decreased benefits related branch first of in impairment plant primarily of commissions second I the quarter lower quarter, million. in and lower increased a a quarter. and of $X $X client the a closure result decreasing million the the primarily including this than expense the having about. $X.X the from million decrease was That to compared quarter. maintenance by current quarter million talked charges, was quarter, the of expense. recorded the related XXXX, The incentive to pandemic decline First Occupancy first is impacted the Similar recent years, to million from by $X.X the by expense million related mortgage in originations $XX.X expenses million

calls, due as league be and minor sponsorships related discussed that we've the as As increase a in third to higher of expenses of the primarily various our to major of second previous on well corporate to year, efforts sponsorship baseball marketing tend held category as quarter communities serve. we this events and the summertime sponsorships, in

that aggregate million than to the other So by to up less than those $X nothing categories discussed, in expense other categories all compared first the noteworthy discuss. quarter and expense I were

tax we in is so the income to rate which significant that about. XX% expense, talk in was Moving XX% normally nothing XX%, on the first approximately the expect, to quarter there effective tax would range

nuance normalizing So the improved the with the and revenue, growth in margin, summary, associated increased loan in wealth and mortgage with robust core other market interest than valuation, quality swing the lower credit expenses. management undesirable MSR were fundamentals strong record the and deposit net

Murphy. that, comments I it my over turn and to Rich conclude with will So

Rich Murphy

Thanks, Dave.

noted solid the PPP from growth couple billion portfolio, a of earlier, for of but this of a $X.X net areas stood credit with was and Loan was growth As across performance out. quarter very really perspectives. number the

grew our larger insurance where $XXX the by annualized. lower premium a finance of we was commercial First number average XX% quarter, to an to up million the of market, by in interest first due the insurance continued or life from relationships, popularity rates result XX,XXX XX,XXX new grew quarter insurance financing, hardening Wintrust of premiums and and a outstanding which $XXX million, which took funding, premiums finance

commercial total part at out, of that looking finance life billion historically the We very we with adding, rates. them product loan approximately loans, million think as dollars we loan $XXX at core plan, market pre pandemic or pipeline by allows low X.X% and PPP within insurance loan and in a with to From lower core quarter excluding people million the the Most X.X% number the commercial the estate pleased by the the point pointed in in This is by of a utilization, to grew approximately real loans levels annualized. as XX% XX% which over end levels pipeline is is in A of well. couple seen very QX.And their growth estate this look grow billion Tim closed out granularity over to are line And perspective, are QX consistent the key product of to level at on additional saw a resulted of As line $X.X by $XXX notes of or of as strong. reduced continue which the the balances the billion. more year, grew compared utilization and have by past while overall like the fell $X we The to level I'd also upper what growth. portfolio. core range. needed being funded annualized

quarters, our to number has been of As we of keys across lines. number the prior a diversification product have credit about one talked in portfolio

great grow ahead a overall niche core portfolio of products example growth strategy our was consistent well of that the projections. to quarter This have continue portfolio, while us our allowed we from have good, to

portfolio. details XX the diversification In in addition, slide geographic our

before As a Nexus. we always Milwaukee have Windtrust stated have Chicago, will

This outside seen slide XX, $XX our to in meaningful From at of as million charge long-term the of Non-performing, see amount a recoveries, funding At primary off charge of from of is from quarter from half can number economy be to of the million We level with a the performance credit meaningful pandemic. quarter, to this a end million. detailed slide This opportunities this reduce of the the we good the very down improvement $XX quarter, number lines by on quarter in metrics. continued a recorded portfolio. of the a our end first previous the primarily continues us MPLs, from the credit the portfolio of was quarter. as during net $X perspective credit across of which is at of markets. QX of the the end second we in saw roughly as quality helped and third out XXXX. product recover a $XX million provides However, insurance perspective, illustrates, various offs

results XX% million majority recover modified to of our team $XXX quarter of was in on we, than also outlined proud the more finally, through a XX, Wintrust slide made reduction on loans modified a in XX.The positive over customers COVID as $X.X to We we who the with primarily credit saw cannot we PPP million million program continue businesses and migration. of And remaining from community, and We $XX.X customers to billion XX,XXX the funded more our happier the are meaningful, PPP, outlined high-risk an be impact XX than these on as possible. continue are the positive effects loans as slide to industries to this effort. of enormous And our program. and different $XXX employees so that select show from it ratings during it

received working decision. are on is That applications to customers turn XXXX wrap focused it Ed loans now their loans I'll have well and to now their includes our for my over to back very of over our This have XX% applications as PPP final XX% we forgiveness those processed proceeding and up. forgiveness We of comments and forgiveness. process with

Edward Wehmer

Thanks Rich.

be accomplished structural As like pretty until has to Wells, onto are anticipation growth rates offset income higher rates, the net mortgages time now achieve sensitivity the above asset grow enhancing strategy too. Due loss this can I turn rates. by the our interest growth. we essential lower sheet strategy. to benefit to mentioned PPP hedges, expected income the went position to All loss balance low been this was color add the as the to These throughout me, is the buffer bouncy such of

organic laid experienced swing go, out, to sleeping For the upon which PPP. it her sale Tim asked $X.X today, The We've based I has picking $X.X billion, been up as acquisition year loan it inbound calls been we've basis. totally be appears loans billion, done held this the on of the was lately. all the core for to has received a market, amount on

still and said high was since pipe is to position all where want major we're we expectation, this categories. Rich all it ends So our having you a extremely the man, it, as we where away. said, up, have could long so see going I take strong

We continue to investment. leg our into

market wish a Our takes consistently both are of There's and in than rates. results Well, this standards. invested portfolio lending were folks into to rush administration of lower be before lot pH area lousy making is our sense. the credit to loan our credit It Plus liquidity Thanks is the excess to our no and with assets delivering I Pandemic. grow. of was strong our MPLs advantage flips. long-term continue line totally locking credit that is they good. remarkably conservative start

fulfillment. PPP market, the to to of if as should in Organic to makes open this to opening plan bring take is total well as And any the it plan So that. We'll the the strong. date, actually full advantage working. we core continue wealth -- growth offset to reduction acquisition We remain doing order this seem need -- some of be loans. would to in sense,

some year, we extent our PPP loan made of the up of net would, end loans margin I think to by another should the income. growth interest the if the and day, should quarter have actually help get that end the our we $Xbillion

right and achieving is, basically we going out to what So is The good I'm about is, that, take gives where we over are Thank some questions. plan feel the us. now. to continue to And what market you, very achieve with we I turn set


markets lineup, coming first RBC capital [Operator open. Austin Instructions] the question, Now, John from with is

Jon Arfstrom

finance some about the expenses. the talked of talked the terms outside about what of sustainability loan expectations some commercial starting premium of did I guys growth little a growth the activity, Tim, the at potential it help and the just seeing to accelerating Rich, and well? higher of is growth quarter. economic want and you the And the to did, mortgage for I'm the then bit premium of you then on in on there, out broaden are as end on ask NII here and finance of Thanks I businesses you curious

Edward Wehmer

take course question Yeah, I'll the first.

think our that, going you seeing customers prospects much about I, half are the we into the feeling So year. the I know, of back better

dramatically. think is really I competence improved

are I headwinds think people nervous. there that making are obviously some

obviously helps see it more availability result continue in think the us to little know, that's think we've a opportunities as issue. I think are, past, our on in disruption pipelines good go in of know feeling existing bank in we'll we're bit And about the I terms a really started will of new a you half an this the customers happen. good really market. to you has you are, I people as talked the increase relates uptick very as but the And are back And COVID the cases we I The the into where mean, bring labor year. utilization anxious, most we pretty bank of the about recent Chicago's feel line we're, is at are. coming has overall John, of and concept think as to like point Midwest announcement, we I well. as in time, been go-to being first

as confident into the the relates pretty it to insurance. first we're might be of about loan core So growth year half where back going

good side new I of anytime away the bringing very PNC market team a in done think the, job not is you see you that know, soon I think on the as relationships. the has going hard

talking the recently that very back could hard as begin of in as about to also the half You've good with slowing had year recent, that, we the life lot going side, of market, a you got the half yesterday, down anticipated the team you similarly year. go. where But they're And in have know, of the back feeling really things good, strong there. as momentum were

So, changing our year at again, not momentum you know, we're guidance, through now pretty least end. right will but comfortable that we're continue feeling

Jon Arfstrom

that and estate about taxes estate Talking in Okay. regard. planning

something So right he's for doing us.

Edward Wehmer

business. this lot goes hit. Dave, when the is a when That's rates just it, numbers about good. at trying a it and materially we when the but if about your look really know expectations it question, in think anything the pandemic prior other prêt-pandemic pandemic, term $XX the million, to for get Question quarter you at more the this was I you line, and range, And some there's where what into to but you, took off that different That's just is good. mortgage I'm of the difficult there's business just today was obviously than business than wondering I'm a longer of and

So that out that, anything can help us you on appreciate. I'd do

Edward Wehmer

think, the has fairly first a The mix veterans Well, obviously and refi off stable. bit. has little volume been between the dropped I retail

this but think have like better and deals. up that reach to I little those have better where are picking a looks the Although with and their are physically those bouncing more be than better serve technology tools bit physically we guys tools back do people and may I longer in, it crop, we customers street to street guys just hitting hitting the that people help recent term, think that

of I but market, customers. the additional with different the pick old of technology between some improved it's So Obviously of our little wouldn't improved a is the or product, dramatically our different see in some still technology good different areas day, just, model. better. mix I don't service fashioned anything serve can just improved as ability expand end But hopefully footprint and substantially we that I on our service think at customers, to say continue we it's up business bit to

Jon Arfstrom

help. the for Thanks right. All


of next with David question line the Your Long James. coming Raymond from

is open. Your line

David Long

A Are good lot deposits? are relationships, Just deposit sticky? of deposits, that very had those and on customers sheet drop or you've they to to things you do time as see growth. Is sense remain liquidity these off spend these are going deposits new it quite your your some a to as created. balance again, some in start relates improve for

Edward Wehmer

as the we bring Those close all the relationships says are by activity fully in XXX in. from the A picked we customers of part. sticky. pretty new lot loans, judging new it these most relationships. them are Well, area, up are Those to all our leftover the PPP tertiary for

Tim, your So thoughts?

Tim Crane

good. it watching and folks numbers add feel lift here, digital their reporting We households. carefully, We're David don't but we're we that we have tools. else on good the get continuing everybody to but Yeah. calls pretty disclose is

added branches, a of bring year. few we've will the now continue between a in more which to online So couple and

So again, we'll watch it's sticky. carefully, so far pretty it but

David Long

loosen then side, have that, backdrop, guys internally, quarters? to know sub-standards, a I your, few as lending word, able we the competitive the, side the last the anything on you you to about differently? And side your core talked over far you little but but stuff, willingness in it. don't the how it's right the doing on it's commercial changed the anything commercial as bit CNI if your are Are Got lend internally

Edward Wehmer

David, away. Well loan we do not right decisions are I said change our pricing sacrosanct. or this Those often policy our

not seeing exceptions we're So our models. profitability any more from deviations or

not all. we're no, I We anything do differently, do to never that. say, we say thoughts. would credit at your So stance our Murphy changing would

Rich Murphy

Yeah, you is where talk very basis our sure no, hot. on is talk It's also market with about price the guys market's very to other as a aggressive. in credit just through, the we meetings something would you competition I is I'm banks that at, Structural regular agree that. competition competitive. because pretty

make the of are. people do really where we're And know all to far sure that we broaden topic I And note lines page. credit just very just to mindful to we're time and I different niches at, have as and the want all we on and lines have able pretty good communication one, to to we think a same our look we think that grow, just be So continue that the good job suite. maybe Then to is continue so done the out that in regard. to product we between we've our

we to continue evolve as part only, as an things areas. of sort that start to finance, grow about group leasing themselves. leasing aviation group maybe thing different the the the and probably would opportunities services to, is So just, of to we be be about money would, that want our we've We've, we those the that talked are look talked forward present and to

David Long

on follow-up just any, seeing deposit of yet? additional are seeing numbers the growth you any customers your side, loan new borrowing and the with and maybe former then relationships Are seeing relationships the PPP final then, PPP your today? you're PPP out these talked And Are, loan you in you to about, that in are a that attributed yet?

Edward Wehmer

the relationships on are the little commitments and Yeah, and of the better substitution overall. utilization and added with part ones sides $X.X there's a I that. to of that we've utilization and more track reason to billion of been there already you're with, we there's than come down, new bit there's, books over mean, the two seeing David's larger in see is we, It's our utilization but are, we also a sort obviously

So We've way prospect more to of three through activity, we the the probably, PPP good feel about pipeline. but got, still half that. we're quarters

David Dykstra

longer lot structure, that, bring to that payoff. needs it it of, getting working relationship work Unfortunately the lending Yeah. of takes done over. getting it loan of the in that and a documented, getting side the There's terms get getting, through approved just just and to

but see are a work coming. on our that with new So we PPP. basis, definitely it's, opportunities result We see of as it's a it, coming weekly

Edward Wehmer

saw with hangover some us. Still helpful. very changing we're of decision And good there of And obviously of table of to is MB that. want do. change. down same to some we've to we Canada a things that any there's first see opportunities but happens, We're been to the have you seeing there never going market Midwest disruptions there. want involved it from now, they're us. market And you for sort at see comes out to that if to gets very a and the they more at to and Private, disruption The is. point. people is benefit move now thing, be successful are seat more what have that We starting that still been


line Our of Stephens. McEvoy the next with Terry from question, coming

Terry McEvoy

steep outlook Dave, thinking question everyone. you that, X.X% on a to page type Morning, production Good a mortgage quarter? about Hi. shows last what near XX, margins Maybe decline for graph over top of term you that pretty down left a on, the are on your

Dave Stoehr

gained about pipeline. way changes this thinking had losses, think in a little we're quarter any in And pipeline. plus minus impacted by quarter. sort secluding, presented the We type the I in had declining marketing bit the more of think bit in in it X% volatility a some the we inventory but the next the of last little had some it's range, or and we we small there's secondary Yeah, I also

Terry McEvoy

as just evaluate to quarter, maybe or the final And something a Thanks. along your an last on then been same something, you're the exact us as the the, profitability. not creative quote as add, not question, I'm releases, two trying sure but basis follow-up you're are expenses maybe to typically ongoing each enhance you lines press tell has of

are are, picture So consciously you statement, same some big read a there is it we kind row, of or into that coming that a, of two more and always of is should you're in expense of quarters a that, expenses? sort of aware plan

Dave Stoehr

and the the always invest at company we're We, going looking to with same ladder through we still working and are company. The growth a time. we're expenses them

up number have in branches of We a markets. opening

board. at contrary money do. for believes. We've yet We but up somebody us. watch get We on to way guys are skews in how both very that's be find in record quarter, moving should one, it you and wish for could all well, We coming we it them we never parts our next expenses running. a there. haven't market to We income screwed been That'd We one better kind very some you to the so Dave our a explained in many right been will mid overhead one great we ratio think always we'll That's what think parking up look we're we so other maybe of and things show the or just time with That's we the the works. closely up. everything there but expenses but this those normalize, but do, I try and in the depending expenses all, in down all quarter. quarter now, the be a that so in the mean about doesn't comfortable net XXXs it don't in up in is overhead where mortgages our of look run a think to goal to on that normalized be ratio, could basis mid down. and thirties great. I with we XXX costs But their



of Vandervliet line UBS. with the Next question. Coming Brock from

Brock Vandervliet


or than to a to regarding up that the to out on call the, veteran's there of dropped so the wanted by commentary. the third harder that of it first rest seemed mortgage a volume business? drop Just anything follow rest your Was

Edward Wehmer


it to the the is part market business refinance their towards think purchase the of customers that piece activity more relationship a it. weighted we're, walking just the got activity we've of I with got be our hit tends in bank generally heavier have of into harder. the bank heavily, and in footprint the

that it's think I and and of the So on more mix purchase marketplace. again again, refinance, just

Brock Vandervliet

and growth what security's combining of may mortgage the kind bank. Yeah. just it And Okay. the, you retain on for

of you've given XX% guidance production. I around think

look given the growing the and how grow cautious it environment, book unpack or You're securities And that should may sheet. of that like book, in could you're at just going you sounds balance bit? securities to that investment versus you pretty we if shunt environment, how kind a on rate this little

Edward Wehmer

been have we but other was a bank, jumbo the is on but lot out We've a would to books, bank keep so product for production of, the the normally hundred million a thought products keeping hundred of million hundred we Yeah. books generally which maybe the the on the, mortgage in rate we So of sell. we of, that the of typically normal, variable production our or a that originate in or on keep probably that also then keep some non-standard know of

would good that rough and be on balance a liquidity the So we number add would would a say quarter, right. in numb side hundred per couple to of you're total sheet million I the

off bit. based were end we X taking, rates XX instrument liquidity we noted on XX XXX As long-term rates just quarter essentially noted appealing we're sort a we doesn't quarter that as flat or inch right little now. sort investing more added backed the seem cautious for earlier, a And, and end that being and, as, of because mortgage a of just just backed

at it margin, deed loan not an of earnings by opportunity, to grow that not the low patient hope that to going a and, may, to we're some bit but look we're suppressor rates long-term. invest at patient be opportunity little so investing the we grow with the quarter that We an up And look grow the at portfolio, it now. at And may as just that in really as to trying and and NII liquidity. the be right

Brock Vandervliet

it. Got

Okay. Thank you.


coming question, with next Nathan Sandler. Our of from the Race line Instructions] Piper [Operator

Nathan Race

a along come some of the X-X-X around morning. in on guess just good questions the curious to your books. on back? around I through capital. stocks with cancel get the a group, couple little These updated of turn updates returning rest bit thoughts the to days, buy

Edward Wehmer

money previous than our got left authorization. We've offers

utilize will go and if time from right, So that we the is there.

too. buy like a levels But the money? make where have blackout yesterday would but some day, do we that all turn And we know it to capital? acquisition we yeah, stack we go? also sense So to vis-a-vis at to want back, And there it's like period. we were looked good to where see. invest do then you as at out the a time We'll Where been o opportunities Where do compared that certain

what you but plus I we prior said, So availability Well, look time. are your constantly, forward, as capital all do evaluated there. about at look just going I'm conditions we authorization, under minus to invest million where the but market I So it can at or have the we are we think going $XX

Nathan Race

guys the terms spoken sure the other imagine. I'd I a do you've just comfortable I'm but Dave, to, stands acquisitions how capital that a up larger stable where curious, lines, go past to be Obviously are, willing you an of to not appetite think in in range with, you sequentially know levels today those kind along in to level, of that at. that your currency appetite the I'm curious, just would it's And it. in acquisition, terms Got of

do a potentially those along want lines, stewards and seeing your you're standpoint, guys growing tangible to So strong continue a that what opportunity. from get on you will the acquisition updated imagine thoughts be how just of large potential case entertained book you historically, defending forward deal been you'd and I have guys curious, can going I to value, as acquisition

just So updated all those curious dynamics? on thoughts to get some

Dave Stoehr

market like would prices. I the say how for well, of billion years, deals what Yeah. don't us reasonable gives the much us it I dollars under a gave solution.

market So not we But $X And the grow still years' us as think do strategic going organically but comes $X market is billion deal we the, you. that like size, to is, we're there, have, growth. anything giving that from grow is where have we like still can along of out anywhere don't giving or under to good to make kind of to up unless they're billion, $X earnings stupid. what with billion a to, worth limited. organic sense. We stick We'll don't I

you of a think geography. when Now, that,

the right Basically billion, was concept guess, the that throughout I chumming M board see look the be a $X haven't earlier, there. billion, look But we'd picked inbound at earnings get I they're always anybody market of value, been I $XXX The we golf franchise disciplined to up I see on So traditional day, area across million. now earnings, where had goes. house value, we'll very, away had and very in regard. they're, shareholder but between a that it, down it give don't doesn't $X a to and And do, we'll lot. calls water our get to we'll the the did a said seen, fishing but the couple out but is do of calls, was anything. bad we'll, a if I that out It we answer

hard However, price of reviewed about ones are expectations that for it's don't we've fit criteria kind earlier. the to first

that's guys So disruption's Yeah, the if we, else, sell good. somebody the good to local us. for they,

stay harder or to now, I the in somebody especially think billion of harder So out $X banks it's billion, state $X for assault, and competitive.

regulatory new administration, all get loans. Just deeper. good that the there. additional technology is I the it's the harder and amount guess compete. guys deals, in down those are dig We Trying all from you getting pike to have to with those loans to spend coming on things for We're people just

to in the does line. margins, it's understand time going magnitude them of costs, for going their to expectations think what it's that, I back their take it their do, price in and their to some what over

Nathan Race

of focus an that of front It trajectory with are in that in I given range the days. of like announced described was recent accelerate M&A that begin asset It's, imagine, you those guys, was in growth just acquisitions disruption you from some lines. that's perspective. Yeah. Chicago these a along probably organic to the less

the that front of that's of that's given in gotten growth within runway guys last months Just stronger organic couple here? today, you only

Dave Stoehr

both, that And, doesn't knowledge growth prices. mean came But work. a said, in Yeah. foreclose we and if can do, good is, deal And do Yeah. it. we doing you obviously do but doesn't it along really but and that market wouldn't organic strategically out good the is can acquisition is,

Edward Wehmer

December. I'm Yeah. to in trying take, be years it XX old will

a We the a chance car have growth $XX XX from just and years. XX good billion, table, years through organic hitting

and, and our returns idea'. 'Well, value. have We'll ask, the and market So don't grow profitability want sense. be us I our tangible gives always grow you our say, We'll care you'd profitably what where It to be?' take I keep from big and makes and And years people growth people, no we you and 'How I on five in makes book what up sense. to operate growth, shareholder do now continue

any in those are, reaching are advances, that if of and fits available. everything's those lines So to is those walls

Nathan Race

say Got Thanks bad the I color. the to it. appreciate guys. Not least.

you. Thank welcome. So


question, Brush Our coming line with the from of next Truist Securities Julien

Michael Young

that Would Michael the overall that ask, what know, categories, make happen pricing to or loan to you loan kind kind be or expect some Truist in shift environment growth not? yields of wanted those accretive to as that seeing yield? would the loan the you Securities. of would cause Thanks. you you are finance Hey, out, the premium broadens is for on just of to Young out of this know, maybe

Rich Murphy

I, very model, mean, again, and accretive we we want we're, to something you pricing overall, know, closely going think that we we're so and strict before that really be. you I yeah, a and, go. out pointed I have I do very we we're, Ed that. you where competent just not we're, to to, just do Yeah, not know, mean, know, going we're, It's to not We're monitor that can it.

Michael Young


Okay. And Obviously the seeing, loan expense mortgage. on related you to up quite commentary a maybe just you follow guys production. are strong know,

with I So but, kind levels, run way pieces? inflation on two would about offset is there's production that reduction, you know, the expense X to the million the assume think that some potential depending those it, natural rate, of right of to

David Dykstra

bit to we not to? saying of expenses that little just if inflated the Is high I'm a sure in that that past, I extraordinarily volume? follow, you're you're think are because get the what trying

Michael Young

quarter expenses the expect quarter that? over discussed core net I that in you offset a production from guess, factors in of assuming expense you strong a that levels of some $X there million inflation more or it loan would production is reduction kind are

David Dykstra

is that No, get the think line in net assuming is -- I $X line level what prior I was revenue with million level is at in trying savings quarter. to net the

go revenues production I the to say to expenses little up too. million, let's go $X up $X $X Now, they bit say a million. and go up let's would million, expect

that but on be -- the of able million roughly business. you to delta should profit So maintain improvement $X

Michael Young

Thanks. Okay, perfect.


coming Chris question of line from next with Your KBW. McGratty the

open. line Your is

Chris McGratty

well been move kind any quality, served cycles. you Asset over to quick historically of you guys it have problems and

exposure industry, amount to I that given today. across effectively is of the high the for any Given are guess there assets looking assets are the bid reduce for there's you guys portfolios Thanks. to

Rich Murphy

and to the sales there. out market calling and exist go the in and we're the through just where asset spots past portfolio weak try done always we've to Chris, to find to see

So asset would the to open maximum work pretty through. we that of getting value say concept. We've that do sort done we're a on well I

those willing a starts But and at of distress. more So through. where just when -- in speaking, to some that of see the weren't the work But when we forward, time some even going at to you if we've kind we narrow take mean of might we discount. deal gap some take a portfolios at maybe I a generally a accept prices, we looked look it past just

this So point. as of no plans


remarks. conference I'm time. now over for closing further the questions showing back Mr. would no Wehmer like to call to I at this turn Edward

Edward Wehmer

Thanks everybody for in. listening

decreases. to right Our continue not things and goal in is to the have a important increase way all

And that, thanks any see please with you on very free in or a we'll So to Thank much. questions, months. feel you again talk to call you. who's the questions, follow-up we'll -- And anybody month call. further three