Company: WTFCN
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001015328-25-000093
Chunk: 204

Company: WINTRUST FINANCIAL CORP
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 204
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 in us or any of our bank subsidiaries.

Risks Related to Growth and Acquisitions

If we are unable to continue to identify favorable acquisitions or successfully integrate our acquisitions, our growth may be limited and our results of operations could suffer.

In the past, we have completed numerous acquisitions of banks, other financial services related companies and financial services related assets, including acquisitions of troubled financial institutions, as more fully described below. We expect to continue to make such acquisitions in the future. Wintrust seeks merger or acquisition partners that are culturally similar, have experienced management, possess either significant market presence or have potential for improved profitability through financial management, economies of scale or expanded services. Failure to successfully identify and complete acquisitions may result in Wintrust achieving slower growth. 

The standards by which bank and financial institution acquisitions will be evaluated are currently in flux and some banking organizations are experiencing delays in the processing of applications. For example, the OCC adopted a final rule in September 2024 amending its procedures for reviewing applications under the Bank Merger Act (the “BMA”) and adding a policy statement on the OCC’s substantive approach to evaluating bank mergers under the BMA.  The policy statement outlines the general principles the OCC will apply when reviewing bank merger applications and clarifies how the OCC would consider the statutory factors under the BMA. The policy statement also identifies certain indicators that are more likely to withstand scrutiny and be approved expeditiously and those that would raise supervisory or regulatory concerns.  Indicators generally consistent with timely approval include, among others, appropriate capital and supervisory ratings, lack of enforcement or fair lending actions, lack of significant CRA or consumer compliance concerns or significant adverse effect on competition and that the resulting institution would have total assets less than $50 billion. 

Acquiring other banks, businesses or branches involves various risks commonly associated with acquisitions, including, among other things:

(1)potential exposure to unknown or contingent liabilities or asset quality issues of the target company;

(2)failure to adequately estimate the level of loan losses at the target company;

(3)difficulty and expense of integrating the operations and personnel of the target company;

(4)potential disruption to our business, including diversion of our management's time and attention;

(5)the possible loss of key employees and customers of the target company;

(6)difficulty in estimating the value of the target company; and

(7)potential changes in banking or tax laws or regulations that may affect the target company.

Acquisitions typically involve the payment of a premium over book and market