“We’ve all moved to Florida,” was the first, but certainly not the last colorful comment made at the annual shareholder meeting of Illinois-based Wintrust Financial Corp.
As the smaller than usual group of shareholders moved up to fill open seats last Thursday, congenial president and CEO Edward J. Wehmer coaxed them to the front. “This isn’t church,” he reassured them before beginning the meeting with a question: “How do you like our new digs?”
The bank holding company, which has gained market share through a series of acquisitions since its inception in 1991, recently moved its corporate office to Park Ridge from Lake Forest. The new modern offices house five floors of Wintrust employees, who work behind the scenes at banks with names such as Hinsdale Bank & Trust, North Shore Community Bank and Trust and Old Plank Trail Community Bank.
Wintrust had good news to report, including strong results for the first quarter of fiscal 2013. Wintrust reported net income of $32.1 million, or 65 cents per diluted share, a 38 percent increase from $23.2 million, or 50 cents per diluted share, in the year-ago quarter. The bank holding company also continues to expand as competitors consolidate because of the tough economic climate.
Many shareholders present at the meeting have been longtime supporters of Wintrust and Wehmer. “Most of us have been involved since the beginning,” said shareholder and Wilmette resident Marguerite Savard McKenna.
Wehmer puts a high premium on a sense of community. In fact, it’s the cornerstone of the Wintrust business model. Wintrust could have turned acquisitions into branches of its current banks but it has kept the local nameplates and charters.
Many community-based banks failed or were taken over during the economic downturn. But Wehmer saw the recession on the horizon in 2006 and downsized the company’s portfolio, helping to ensure the bank’s survival. Through acquiring other banks, Wintrust has grown to become the No. 2 Chicago-based bank after giant Northern Trust Corp.
“Ed is younger but he has a sentimental side and is very loyal,” said shareholder and local business owner Gayle Inbinder.
The owner of Wilmette Jewelers and a Wintrust investor since 1991, Inbinder is proud of the success Wintrust has achieved as similarly situated banks closed their doors.
“If you are playing a game of musical chairs, someone is eventually going to end up sitting on the floor,” Inbinder said.
Items on the meeting’s agenda included a vote to elect 13 directors and approval of Ernst & Young LLP as the bank’s independent registered accountant. Both were approved. Shareholders also voted to approve the company’s 2012 executive compensation packages. Wehmer received $2.4 million in total compensation in 2012, an 8 percent decrease from his total compensation of $2.6 million the previous year.
During his presentation, Wehmer discussed the history of the company and the bank’s “rope-a-dope strategy” of outlasting competitors during the financial crisis. The company maintained its conservative underwriting strategy during the economic boom and then pulled back just in time. “We shrunk a bit by design,” Wehmer said of the last few years. However, Wintrust is now employing a long-term strategy that includes relying on organic growth with two branches opening per year.
In regards to branding, Wintrust is also expanding. Customers and clients will hear more advertisements for Wintrust on the radio and see more billboards in the Chicago area. However, the bank will continue to promote its community bank sub-brands to maintain the familiar name and personalized services that clients are accustomed to.
Despite the positive numbers , Wehmer struck a cautious stance about the credit market and alerted shareholders that future acquisitions of banks will be on the smaller side.
“We are not going for short-term profits…We still need to be very cautious in everything we do,” he told investors. “We are not straying from the middle of the road regarding credit…For some bankers it’s like childbirth, they forgot how painful it was the first time.”
As Wintrust grows, Wehmer promised to maintain the company’s community-based brands and remain true to its roots.
“We are still the same guys as when we started. You start thinking you’re big, and you’re dead.”