Company: WTFCN
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001015328-25-000093
Chunk: 154

Company: WINTRUST FINANCIAL CORP
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 154
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 million of individually assessed loans classified as Level 3. All of the $119.3 million of individually assessed loans were measured at fair value based on the underlying collateral of the loan as shown in the table above. None were valued based on discounted cash flows in accordance with ASC 310,”Receivables.”Other real estate owned — Other real estate owned is comprised of real estate acquired in partial or full satisfaction of loans and is included in other assets. Other real estate owned is recorded at its estimated fair value less estimated selling costs at the date of transfer, with any excess of the related loan balance over the fair value less expected selling costs charged to the allowance for loan losses. Subsequent changes in value are reported as adjustments to the carrying amount and are recorded in other non-interest expense. Gains and losses upon sale, if any, are also charged to other non-interest expense. Fair value is generally based on third party appraisals and internal estimates that are adjusted by a discount representing the estimated cost of sale and is therefore considered a Level 3 valuation.The Company’s Managed Assets Division is primarily responsible for the valuation of Level 3 inputs for other real estate owned. At December 31, 2024, the Company had $23.1 million of other real estate owned classified as Level 3. The unobservable input applied to other real estate owned relates to the 10% reduction to the appraisal value representing the estimated cost of sale of the foreclosed property. A higher discount for the estimated cost of sale results in a decreased carrying value.

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The valuation techniques and significant unobservable inputs used to measure both recurring and non-recurring Level 3 fair value measurements at December 31, 2024 were as follows:(Dollars in thousands)Fair ValueValuation MethodologySignificant Unobservable InputRangeof InputsWeightedAverageof InputsImpact to valuation from an increased or higher input valueMeasured at fair value on a recurring basis:Municipal securities$121,607 Bond pricingEquivalent ratingBBB-AA+N/AIncreaseMortgage loans held-for-sale60,399 Discounted cash flowsDiscount rate6.61 %6.61 %DecreaseCredit discount0% - 20%0.69 %DecreaseLoans held-for-investment34,896 Discounted cash flowsDiscount rate6.50% - 6.61%6.61 %DecreaseCredit discount0% - 39%1.