Why stock weakness: Wintrust Financial Corp (NASDAQ: WTFC) stock fell over 3.7% on January 23rd, 2019 (as of 10:57 am GMT-5; Source: Google finance) after the company posted lower earnings than the analysts’ expectations for the fourth quarter of FY 18. WTFC has delivered the net income of $79.7 million for the fourth quarter of 2018 compared to net income of $91.9 million for the third quarter of 2018 and $68.8 million for the fourth quarter of 2017. During the quarter, non-performing assets declined by $17.5 million, which now represents 0.44% of total assets. Non-performing loans also declined by $14.0 million while other real-estate owned decreased $3.5 million compared to the end of the third quarter of 2018. The company during the quarter has opened one new branch in the Brighton Park neighborhood of Chicago, Illinois, which increased the total branches to 167 locations.
Positive Loan portfolio: WTFC in the fourth quarter of FY 18 has reported the adjusted earnings per share of $1.35, while reported adjusted revenue growth of 35.9 percent to $329.4 million in the fourth quarter of FY 18. Moreover, WTFC has experienced strong loan growth in the commercial, commercial real-estate and premium finance receivables portfolios during the fourth quarter, which increased the total loans outstanding by $697 million. The company’s loan pipelines remain consistently strong, and reflect opportunities to continue to grow loan balances during 2019. Deposit growth had outpaced loan growth during the fourth quarter, lowering the loan to deposit ratio to 91.3% at year-end. Organic deposit growth in the fourth quarter has occurred across all deposit categories, except time certificates of deposit. The CDEC acquisition has allowed the Company to bring $1.1 billion of low cost funding into the banks.
Positive NIM prospects: For 2019, WTFC expect continued organic growth in all areas of the company’s businesses. Total period-end loans outstanding has 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 due to the CDEC acquisition and stabilizing retail deposit costs. The company will continue to take a steady and measured approach to achieving the 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 the company’s overall growth strategy with the continued goal of becoming Chicago’s bank and Wisconsin’s bank. During 2019, the company believe that the opportunities for both internal growth and external growth will remain consistently strong.