Wintrust Financial in Rosemont, Ill., reported third-quarter earnings of $40.2 million, as increases in interest and fee income were partially offset by heavier expenses.
The earnings were 13% higher than a year earlier. At 79 cents per share, the earnings beat analysts' expectations by a penny.
Interest income drove the earnings growth. The $19.1 billion-asset company reported net interest income of $151.6 million, up 7% from a year earlier. Interest expense was relatively flat, while the company reported growth in interest from loans and available-for-sale securities.
Total loans, excluding loans covered by loss-sharing agreements with the Federal Deposit Insurance Corp. and held-for-sale mortgage loans, were $14.3 billion, up nearly 11% from a year earlier. The company added $302 million in loans in the third quarter, including $120 million it acquired through two separate branch deals in Wisconsin that were completed in the quarter.
The net interest margin for the quarter was 3.46%, down 16 basis points from the end of the second quarter. The contraction was attributed to $140 million subordinated debt issuance, competitive pricing on commercial and commercial real estate loans and the continued runoff of the covered-loan portfolio.
"This increase in loan volume drove higher net interest income in the current quarter despite a decline in net interest margin," Edward Wehmer, chief executive of Wintrust, said in a press release Thursday. "The loan pipeline, an indicator of future loan-balance growth, remains consistently strong."
Lower credit costs also aided the earnings, with the provision for loan losses totaling $6 million, roughly half of what Wintrust set aside for problem loans a year earlier. The company attributed the reduction to improved credit.
Fee income was $58 million, up 6% from a year earlier, as the company reported improvements in wealth management, mortgage banking and trading activity.
Expenses were $138.5 million, up 9%. Salaries and employee benefits were $85 million, up 10%, with the increase driven by acquisitions and higher commissions.
Earlier this week Wintrust said it had agreed to buy the $208 million-asset Delavan Bancshares in a cash-and-stock deal valued at $38 million.