Company: WTFCN
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001015328-25-000130
Chunk: 88

Company: WINTRUST FINANCIAL CORP
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 1
Chunk 88
---
 and servicing residential real estate loans for the secondary market. A main factor in the mortgage banking revenue recognized by the Company is the volume of mortgage loans originated or purchased for sale and the related production margins. Mortgage loans originated for sale totaled $460.5 million in the first quarter of 2025 as compared to $475.6 million in the first quarter of 2024. The slight decrease in linked quarter originations was driven by a slight uptick in rates coupled with a slightly lower refinance percentage offset by slightly higher inventory levels. The percentage of origination volume from refinancing activities was 23% for the three months ended March 31, 2025, as compared to 25%, for the same periods in 2024.

The Company records MSRs at fair value on a recurring basis. For the three months ended March 31, 2025, the fair value of the MSRs portfolio decreased as a result of an unfavorable fair value adjustment of $7.5 million was recorded and a reduction in value of $4.6 million due to payoffs, paydowns and repurchases of the existing portfolio, partially offset as retained servicing rights led to capitalization of $4.7 million. See Note (9) “Mortgage Servicing Rights (“MSRs”)” to the Consolidated Financial Statements in Item 1 of this report for a summary of the changes in the carrying value of MSRs.

Mortgage banking revenue is also impacted by changes in the fair value of derivative contracts held to economically hedge a portion of the fair value adjustments related to the Company’s MSRs portfolio. The change in fair value of the derivative contracts held as an economic hedge was a favorable $4.9 million for the three months ended March 31, 2025 compared to an unfavorable $2.6 million for the three months ended March 31, 2024.

Service charges on deposits increased for the three months ended March 31, 2025 as compared to the same period in 2024 primarily as a result of increased commercial account analysis service fees, and the Macatawa acquisition. Service charges on deposit accounts include fees charged to deposit customers for various services, including account analysis services, and are based on factors such as the size and type of customer, type of product and number of transactions. The fees are based on a standard schedule of fees and, depending on the nature of the service performed, the service is performed at a point in time or over a period of a month.

The Company recognized