Wintrust Financial Corp., said Monday that its third-quarter earnings fell 25% from last year's third quarter, to $14.9 million. Per-share earnings fell 30%, to 56 cents, 5 cents below estimates from analysts at Ryan Beck & Co.
The $9.5 billion-asset Lake Forest, Ill., company attributed the decline largely to a balance-sheet repositioning that president and chief executive Edward J. Wehmer said should "stabilize its reported net income and build an improved earnings base for future quarters."
Wintrust sold interest rate swap positions that Mr. Wehmer said were causing large fluctuations in earnings due to the required accounting treatment and entered into new interest rate swap contracts on its variable rate trust-preferred securities that qualify for hedge accounting.
The company also made the decision to keep premium finance receivables on its books rather than sell them, as it had done in the past. Those sales had contributed to large gains in quarterly earnings.
Wintrust said its interest income rose 16%, to $65.1 million, on strong loan growth. Loans rose 22%, to $6.3 million. Noninterest income fell 34%, to $9.7 million, mainly because of a decrease in trading income recognized on rate swaps, lower gains on sales of premium finance receivables, and lower mortgage banking revenue.
