윈트러스트 파이낸셜(WTFC) 2026년 3분기 실적 발표회: 사상 최대 순이익 및 8% 대출 성장

핵심 요약

• 윈트러스트 파이낸셜(Wintrust Financial Corporation)이 7분기 연속 분기 기준 최고 순이익을 기록했다고 발표했다. 2026년 3분기 순이익은 전분기 2억 3,400만 달러에서 2억 3,900만 달러로 증가했다.
• 순이자이익은 평균 수익자산이 21억 달러 증가한 데 힘입어 전분기 대비 2,420만 달러 증가한 6억 2,160만 달러를 기록했다. 순이자마진(NIM)은 1bp 하락한 3.51%를 나타냈다.
• 대출과 예수금 모두 전분기 대비 연율 8%의 성장률을 기록했다. 예수금은 약 13억 달러 증가하여 약 11억 달러 규모의 대출 성장에 필요한 자금을 조달했다.
• 신용 자산 건전성은 안정적인 수준을 유지했다. 부실채권(NPL)은 1억 7,690만 달러(전체 대출의 0.31%)로 감소했으며, 분기 상각률은 15bp를 기록했다.
• 경영진은 4분기 대출 및 예수금 성장률 목표를 한 자릿수 중후반대(mid- to high-single digits)로 유지했으며, 순이자마진은 3.5% 수준을 유지할 것으로 예상했다.
• 기말 대출 잔액은 3분기 평균을 약 8억 2,200만 달러 상회하여 4분기 평균 수익자산의 출발점을 높였다.

주요 재무 데이터

사업 및 영업 실적

대출 성장은 모든 대출 부문에서 광범위하게 나타났다. 핵심 상업용 부동산(CRE) 대출이 6억 9,000만 달러, 윈트러스트 라이프 대출이 2억 2,600만 달러, 주택담보대출이 1억 5,300만 달러 증가했다.

경영진은 직전 분기 대출 집행 규모가 1억 달러를 약간 상회하는 수준에 그쳤던 데 따른 시차 효과가 이번 강한 CRE 대출 증가에 일부 반영되었다고 설명했다. 3분기 영업 활동에는 자가 사용 목적의 대형 대출 및 기존 투자자와의 거래 확대가 포함되었다. CRE 부실채권 비율은 12bp에서 9bp로 감소했으며, 포트폴리오 상각률은 2분기 2bp 상각에서 3분기 5bp 회수로 돌아섰다.

예수금 성장은 지속해서 핵심 전략적 우선순위 자리를 지켰다. 경영진이 인용한 최신 미국 연방예금보험공사(FDIC) 시장 점유율 데이터에 따르면, 윈트러스트의 일리노이주 예수금은 전년 동기 대비 9.2% 증가해 일리노이주 전체 성장률(4.4%)과 미국 은행권 전체 성장률(5.2%)을 모두 상회했다. 3분기 중 이자부예금 조달비용은 1bp 하락해 대출 수익률 하락 폭과 일치했다.

윈트러스트는 해당 분기 동안 4개 지점을 개점했으며 10월에 2개 지점을 추가로 개점할 예정이다. 경영진은 210개 이상의 지점 네트워크를 고려할 때 이번 지점 신설이 회사의 전체 성장 궤도를 실질적으로 바꾸지는 않겠지만, 향후 가계 고객 및 예수금 성장을 뒷받침할 것으로 기대하고 있다.

비이자이익은 전분기 대비 약 500만 달러 감소했다. 주요 원인은 주택담보대출 은행업 수익이 190만 달러 감소하고 유가증권 손익이 약 350만 달러 악화된 데 따른 것이다.

9월 1일에 마감된 가디언십 서비스(Guardianship Services) 인수를 통해 12억 달러 규모의 운용자산(AUM)이 추가되었다. 경영진은 해당 사업이 윈트러스트의 기존 시스템으로 이관되어 영업레버리지가 개선되었다고 설명했다. 회사 측에 따르면 가디언십 수수료율은 일반적으로 1% 안팎이다.

경영진 가이던스

경영진은 고객 피드백, 대출 파이프라인, 시장 입지 등에 힘입어 2026년 4분기 대출 및 예수금 성장률 목표를 한 자릿수 중후반대(mid- to high-single digits)로 유지했다.

윈트러스트는 순이자마진(NIM)이 3.5% 수준을 유지할 것으로 예상하고 있다. 경영진은 금리가 추가 상승할 경우 대출 수익률과 예수금 비용이 전반적으로 함께 움직일 것으로 보았다. 다만 대출 지수의 금리 재조정(repricing) 속도가 빨라지거나 예수금 비용 상승이 둔화되면 소폭의 추가 상승 여력이 발생할 수 있다고 덧붙였다.

4분기 비용은 소폭의 변동을 제외하면 3분기 기록인 4억 570만 달러와 거의 비슷한 수준을 유지할 것으로 예상된다. 장기적으로 경영진은 인수합병이나 주택담보대출 활동의 급증을 제외하고 대출 성장이 한 자릿수 중후반대를 유지한다면 연간 비용 성장률은 대체로 한 자릿수 중반대(mid-single digits)가 될 것이라고 밝혔다.

주택담보대출 은행업 수익은 계절적 요인과 고금리로 인해 4분기에도 약세를 지속할 것으로 예상된다. 경영진은 수익이 2,000만 달러대 초반 수준일 수 있으며, 그 중 약 1,000만~1,100만 달러는 서비싱(대출관리) 수익에서 발생할 것으로 전망했다.

윈트러스트는 총 약 1억 800만 달러 규모의 신탁선호증권(TRUPS) 7개 발행건을 상환했거나 상환할 계획이다. 해당 증권은 3개월 SOFR 대비 평균 약 309bp의 스프레드를 적용받는다. 경영진은 이번 조치가 궁극적으로 마진을 약 1bp 개선할 수 있지만, 상환의 상당 부분이 분기 말에 이루어지므로 4분기에 미치는 영향은 제한적일 것이라고 전했다.

리스크 및 주요 관전 포인트

차입 비용 상승은 특히 상업용 부동산(CRE) 분야의 대출 수요에 궁극적으로 영향을 미칠 수 있으나, 경영진은 아직 의미 있는 영향은 관찰되지 않았다고 설명했다. 고객들은 신중하게 낙관적인 태도를 유지하고 있으며, 대출 파이프라인도 견고한 것으로 묘사되었다.

예수금 유치 경쟁은 마진 전망과 관련된 주요 불확실성 요소로 남아 있다. 경영진은 시카고, 웨스트 미시간, 밀워키 지역의 금리 책정이 4% 안팎 또는 4%대 초반의 판촉 금리로 대체로 이성적인 수준을 유지하고 있다고 설명했으나, 경쟁 상황은 변할 수 있음을 강조했다.

윈트러스트는 금리 인상 후 이자부예금 베타가 40% 근처에서 시작하여 전체 주기 동안 60%~65%를 향해 이동할 것으로 예상하고 있다. 실적 발표 통화 당시의 스팟(현물) 예수금 비용은 3분기 평균보다 약 4~5bp 높았다.

주택담보대출 신규 취급(originations)은 높은 금리와 계절적 약세로 인해 계속 압박을 받고 있다. 경영진은 지정학적 상황, 인플레이션, 전반적인 경제 상황으로 인한 불확실성을 언급하는 동시에 3분기 동안 자산 건전성과 고객 실적이 안정적으로 유지되었음을 강조했다.

애널리스트 Q&A 주요 내용

• 대출 파이프라인: 경영진은 시카고, 미시간, 위스콘신 전역에서 CRE 및 C&I 대출의 건전한 모멘텀을 보고했습니다. 성장의 일부는 대형 은행 대비 시장 점유율 확대 및 고객 확보 덕분이라고 설명했습니다.
• 대출 금리 책정: 우량하고 예금 규모가 큰 CRE 고객과의 거래 경쟁은 치열하게 유지되었으나, 금리 하락 압력은 안정화되었습니다. 윈트러스트는 적합한 기회에 대해 6.5% 수준의 금리를 목표로 하며, 적절한 금리와 관계 가치가 없는 거래는 포기할 것이라고 밝혔습니다.
• 예수금 구조: 무이자 예금 비중은 전체 기말 예수금의 19% 미만으로 감소했는데, 이는 부분적으로 전체 예수금 기반이 빠르게 성장했기 때문입니다. 경영진은 이 비중을 19% 근처로 유지하는 것을 목표로 하되, 적정한 비용으로 대출 성장에 자금을 조달하는 것에 우선순위를 두고 있습니다.
• 금리 민감도: 대출의 약 80%가 1년 이내에 금리가 재조정되거나 만기가 도래합니다. 경영진은 예수금 금리 조정이 SOFR 및 기타 대출 지수 상승보다 지연될 경우, 금리 상승 환경이 마진에 소폭의 상향 편향을 가져올 수 있다고 말했습니다.
• 자본 활용: 경영진은 자본 비율이 10.5%를 넘어서면 이전에 밝힌 우선순위에 따라 4분기 및 2027년까지 추가적인 자본 활용 방안을 보다 본격적으로 검토할 것이라고 밝혔습니다.
• M&A: 주로 전략적 대안을 검토 중인 소형 은행들과 논의를 이어가고 있습니다. 경영진은 대형 금융기관과의 논의는 제한적이었다고 설명했습니다.

실적 발표 컨퍼런스 콜 전문

---

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Welcome to Wintrust Financial Corporation's Third Quarter and Year-to-Date 2026 Earnings Conference Call. A review of the results will be made by Tim Crane, President and Chief Executive Officer; David Dykstra, Vice Chairman and Chief Operating Officer; and Richard Murphy, Vice Chairman and Chief Lending Officer.

As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation. Following their presentations, there will be a formal question-and-answer session.

During the course of today's call, Wintrust management may make statements that constitute projections, expectations, beliefs or similar forward-looking statements. Actual results could differ materially from the results anticipated or projected in any such forward-looking statements. The company's forward-looking assumptions that could cause the actual results to differ materially from the information discussed during this call are detailed in our earnings press release and in the company's most recent Form 10-K and any subsequent filings with the SEC. Also, our remarks may reference certain non-GAAP financial measures. Our earnings press release and earnings release presentation include a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure.

As a reminder, this conference call is being recorded. I will now turn the conference over to Mr. Tim Crane.

Timothy Crane

Good morning, and welcome to Wintrust's Third Quarter 2026 Earnings Call. In addition to those Latif introduced, I'm joined by Chief Financial Officer, Dave Stoehr; and Chief Legal Officer, Kate Boege. I will begin with a brief overview of the quarter. David Dykstra will -- and Rich will provide a deeper look at the key results, and I'll be back to share some final thoughts before we open to your questions.

In the third quarter, we recorded our seventh consecutive quarter of record net income. Net income was $239 million, up from $234 million in the prior quarter. Net income and net interest income growth continue to be a function of a stable margin and solid core business growth. Both loans and deposits were up nicely during the quarter in-line with our historical results and our expectations for the quarter. Our efficiency ratio improved, and we continue to generate operating leverage as expenses remain appropriate relative to revenue growth.

To generate these results, we continue to deliver on our three key strategic priorities: to deliver an exceptional and differentiated customer experience, to pursue strategic and disciplined growth and further build-out our foundation by investing for our future. On September 1, we closed the previously announced acquisition to grow our Guardianship Services business. This transaction will help boost Wealth Management revenues and income going forward. We also opened 4 new branches during the quarter with 2 others opening this month. They're all off to a good start in terms of deposit gathering and growing new Wintrust households. These branches help fill in our Midwestern footprint as we continue to deliver our high-touch, high-tech approach to meeting customer banking needs.

In fact, the latest FDIC deposit market share data shows that Wintrust outperformed both Illinois and the U.S. banking industry on deposit growth. To be more specific in our core Illinois market, Wintrust continued to gain market share, growing deposits 9.2% year-over-year, more than double the state's 4.4% growth rate and well above the U.S. industry average of 5.2%. We remain well positioned in Wisconsin and West Michigan as well with plenty of growth opportunities in all of our markets. Growing core deposits remains the single most important thing we do to enhance the value of our franchise and to ensure our continued success.

Overall, I'm pleased with our results this quarter. Another consistent quarter of solid performance, driving continued value for our shareholders. Let me turn it over to Dave for more on what drove our results.

David Dykstra

Great. Thanks, Tim. Let me start with the balance sheet. Both loans and deposits grew at an annualized rate of 8% for the third quarter relative to the prior quarter. Total deposits were up approximately $1.3 billion during the quarter which funded solid third quarter loan growth of roughly $1.1 billion. Yields and rates on major balance sheet categories were essentially flat with the prior quarter. We were particularly pleased that given the strong deposit growth during the quarter that interest-bearing deposit costs were actually down 1 basis point, matching the 1 basis point decline in loan yields. I would note that period-end loans were approximately $822 million higher than average loans for the third quarter giving us a great start to achieving a higher level of average earning assets in the final quarter of 2026.

Turning to the income statement results. This was a very solid operating quarter producing another record level of quarterly net income. Net interest income improved by $24.2 million compared to the second quarter of 2026 to $621.6 million. The improvement in net interest income was primarily the result of an increase of $2.1 billion in average earning assets, which was offset slightly by a 1 basis point decline in the net interest margin which was 3.51% for the third quarter. The 1 basis point decline in the net interest margin was caused by the impact of having 1 additional day in the quarter, interest rate changes and business mix changes essentially netted to no impact on the margin. The net interest margin has remained in the range of 3.50% to 3.59% during the last 11 quarters, showing the sustained stability of this metric, and given our balance sheet structure and our established interest rate hedging positions, we believe that our interest rate sensitivity should continue to remain relatively neutral even with a few rate cuts in either direction. The provision for credit losses continue to remain relatively consistent with prior quarters, staying in the $20 million to $30 million range for the seventh consecutive quarter as the overall credit environment and our asset quality has remained stable.

Turning to other noninterest income and noninterest expenses. Total noninterest income was $136.3 million in the third quarter which was a decrease from the $141.3 million recorded in the prior quarter. This roughly $5 million decline was primarily a result of a $1.9 million of lower Mortgage Banking revenue as higher rates weighed on mortgage loan originations and approximately $3.5 million less security gains and losses as the unrealized gains in the second quarter swing around to unrealized losses in the third quarter.

As to noninterest expense categories, noninterest expenses were consistent with our expectations noted during the second quarter conference call and totaled $405.7 million in the third quarter, up $8.1 million from the prior quarter. The second quarter included a $5.2 million reversal of an accrued FDIC insurance expense related to the final true-up of the previously imposed special assessments by the FDIC. So we adjust for that reversal, expenses were up only $2.9 million from the prior quarter and reflects smaller levels of increases in a variety of other expense categories to support continued growth of the company. Additionally, the net overhead and efficiency ratios have remained relatively stable through the first 9 months of the year, helping the company produce solid operating leverage thus far in 2026.

In summary, I'll reiterate what Tim said, this was another very solid and consistent operating quarter. The company achieved strong loan and deposit growth, a relatively stable net interest margin, another record of level of net income and a continued low level of nonperforming assets. In addition to the operating performance, I'll add one additional comment regarding the planned use of cash in the fourth quarter. The company has already or intends to redeem 7 issuances of our trust preferred securities, which are shown on our balance sheet as junior subordinated debentures. The redemptions will total approximately $108 million and will retire higher-priced floating rate debentures that on average have a spread to 3-month SOFR of approximately 309 basis points. So some of our highest rate debt will be retired during the fourth quarter.

So with that, I'll conclude my comments and turn it over to Rich to discuss credit.

Richard Murphy

Thanks, Dave. As detailed on Slide 7 of the investor presentation, third quarter loan growth was strong and broad-based. The three primary drivers were $690 million in core Commercial Real Estate loan growth reflecting both new lending opportunities and funding of previously committed loans. $226 million in growth in Wintrust Life Loans and $153 million in Residential Mortgage Loan growth. Every lending segment recorded positive growth during the quarter. On a year-over-year basis, total loans increased by $4.7 billion or 9%.

Turning to credit quality. Slide 15 details continued strong performance across our portfolio. Nonperforming loans decreased slightly from $179.3 million or 0.32% of total loans to $176.9 million or 0.31% and remained at very manageable levels. Charge-offs were 15 basis points for the quarter, up slightly from the prior quarter and continue to reflect a stable and benign credit environment. That assessment is further supported by the historical nonperforming asset trends on Slide 16 and the consistent levels of special mention and substandard loans on Slide 15. This quarter again demonstrates our commitment to identifying problems early and charging down loans where appropriate. Our goal is always is to stay ahead of potential credit challenges.

As we've noted on recent calls, we remain highly focused on our Commercial Real Estate exposure, particularly in light of potential higher interest rates in the environment. As detailed on Slide 19, this portfolio continued to perform well during the third quarter. CRE nonperforming loans declined from 12 basis points to 9 basis points. Charge-offs of 2 basis points in the second quarter shifted to 5 basis points of recoveries in the third quarter. Overall, customers have remained resilient despite continued uncertainty around the geopolitical environment, interest rates, inflation and the broader economy. We continue to see healthy activity across our markets and client conversations reflect cautious optimism about the business environment. These close relationships provide valuable real-time insights into changing conditions, while our disciplined risk management approach positions us well as the economic environment continues to evolve.

That concludes my comments on lending and credit. And Tim, I'll turn it back to you.

Timothy Crane

Great. Thank you, Rich. Just some final thoughts. As we close out the year, our targets remain unchanged for the fourth quarter. Based on continued positive feedback from clients, solid pipelines and the unique market position we occupy, we expect loan and deposit growth in the mid- to high single digits. We've consistently funded our loan growth with appropriately priced deposits, and we expect that to continue in the fourth quarter. The net interest margin should remain stable, plus or minus 3.5%. We believe that any further rate increases will result in loan yields and deposit costs moving roughly in concert and accordingly should not materially impact the margin. That said, as our loan book is largely variable priced, increases in SOFR or other loan index rates in advance of a rate increase or market factors that moderate increases in deposit costs could be supportive of a slightly higher margin. Our capital position remained strong and increased during the quarter. The capital priorities we have discussed on prior calls remain unchanged.

As always, our team focuses on delivering the exceptional customer service that is our key differentiator. Going into 2027, we feel good about our competitive position in the market, our ability to continue to grow our business and to deliver value for our shareholders. With that, Latif, could you please open the line for questions?

Operator

[Operator Instructions] Our first question comes from the line of Jon Arfstrom of RBC Capital Markets.

질의응답

Jon Arfstrom

Maybe Tim or Rich, let's just start with the lending pipelines Rich, anything else you can share in terms of what you're seeing in terms of the pipelines, whether they're strengthening or not? And then maybe help us understand the CRE growth a little bit more this quarter. I know you touched on it in your prepared comments, but what drove that?

Richard Murphy

Sure. Yes, the pipelines are good, Jon. I mean we've said this really for the last few calls. I think it's indicative of the economy that's holding together pretty well. But we continue to have a really nice position in our market, both in Chicago Michigan, Wisconsin, all seem to be taking market share pretty nicely. And so as long as we can continue to execute on that, the pipelines are going to reflect some pretty good numbers. So if I look down the major categories, I mean, CRE shows pretty good momentum there.

C&I, we've had some really nice wins here over the last couple of quarters, and that continues to show up in the pipeline. So again, feel pretty good about that. Now we don't know where the economy is going to go and where things will happen. But generally speaking, as I look at the pipelines, we feel good.

As it relates to the CRE, I mean, CRE for the quarter is a little bit of a timing issue. If you look back at last quarter, we were just over $100 million in total funding. So if you add those 2 quarters together, they kind of come in right where the last 4 quarters are, which is right around $300 million or around [ 9% ]. So -- and as I look at what funded during the third quarter, we had a number of larger owner-occupied and kind of strong investor-type deals that we feel good about. The thing about real estate, too for us is that these are not transactional deals. These are very much relationship-oriented deals that if I look at the names that we funded in the third quarter, [indiscernible] our people that we've been doing business with for a long time. So in general, it's more just -- it's a timing issue more than anything else.

Jon Arfstrom

Okay. And then maybe Dave or Tim, I appreciate the comments on the variable rate loans. It's just what I thought. But the other side of it, can you just comment a little on deposit pricing environment? You obviously had a very nice quarter on deposit costs and -- just maybe help us understand the drivers of the deposit growth and how you're able to hold those costs steady?

Timothy Crane

Yes, Jon, thanks. We do feel good about the deposit growth, probably a little more commercial than retail. But the Chicago and both West Michigan and Milwaukee markets are largely rational. We see promotional pricing 4% or low 4s. We continue to win business at those levels. We started to get a little bit of a lift from the new branches we've opened. We'll get more of that in the fourth quarter, and continued build-out of our Commercial franchise as well. So a nice mix of deposits, as many of them interest-bearing, but we control the interest-bearing deposit costs well during the quarter. And overall, I feel like we did a very nice job during the quarter.

Operator

Our next question comes from the line of Daniel Tamayo of Raymond James.

Daniel Tamayo

Maybe the other side of the deposit question. So certainly a really nice quarter on overall deposit growth, but the noninterest-bearing came down a bit on the period-end basis. Average has been trending up, but I guess as a percentage of overall kind of down below that 19% I don't know if I'd call it a bogey or not, but it seems like it's just kind of trending down. Just curious your thoughts on the ability to hold that number at or close to that level? Or if you're not as concerned with it given kind of the overall level of deposit cost and deposit growth that you been in?

Timothy Crane

Well, I think it's both, Daniel. We're growing the denominator rapidly and doing that at a reasonable cost. So we're comfortable that we continue to build the franchise and happy with those results. That said, we very much would like the noninterest-bearing to stay around 19%, and we'll work to do that. But the mix comes to us as our customers dictate at times and just kind of look at it on an overall basis.

David Stoehr

Yes. And Danny, this is Dave. I do think you pointed to the average balance. I do think you need to look at the average balance a little bit more than a point in time because moneys flow in and out sometimes a quarter and make that that move around a little bit. But the average balance is trending up, which shows we're gaining -- most of that is commercial, obviously. And so we're gaining middle market and small business accounts. And we think we'll keep doing that. But we're fortunate that we have to fund good loan growth. And then if you fund that higher loan growth, you generally have to do some of that with interest-bearing deposits more so than DDA. And so we'll try to hold that number there, but it's a good problem to have.

Daniel Tamayo

I agree. And thanks for your thoughts on that. Maybe just a higher-level question. Have you been seeing an impact? It sounds like pipelines are really strong. But with the rate increase in September and then we've got another one probably coming here soon or maybe some more next year. Any early indications that, that's impacting borrowers at all? And do you guys think that would potentially impact your ability to grow loans as fast as you've been growing them?

Richard Murphy

Yes. We can speculate on that. And my guess is it will have some impact, certainly, borrowing costs in the CRE space are a big driver. But at this point, we don't see that. And if you think back about the last 4 quarters and really beyond that, the Midwest economy that we pretty much lend into has been amazingly resilient. I mean, so whether it's been tariffs or increased rates or transportation costs or whatever those shocks have been, they've continued to work their way through it. And our customers kind of reflect that same attitude that they will those might be impactful, but they think that they can manage through it. So at this point, I wouldn't anticipate it would have a meaningful effect.

David Stoehr

Yes. I might just throw on there, 80% of our loans reprice or mature within a year and the short end of the curve was 50 basis points higher in June of last year. So prime was 50 basis points higher than where we are now, and our production was very good at that point in time. So as Rich said, we'll have to see what happens with the economy and the shape of the curve is a little bit different. But we still think these rates are a good [ for ] new business development.

Operator

Our next question comes from the line of Ben Gerlinger of Citi.

Benjamin Gerlinger

I just want to [indiscernible] of to you Dykstra, but whoever wants to take it go for it, like when you have like roughly a year ago, rates being lower as we drift into early '27, the repricing aspect seems like it's a pretty big tailwind. So I get that the floating rate runs with SOFR. You guys have been really, really, really good on deposit pricing. Why are we not talking like a bias higher on the margin? Or maybe we are, you just maybe giving yourself a little rope here on deposit pricing because like you said, mix is not always in your control?

David Stoehr

Yes. I would say we do have the swaps in place that hedge part of that floating rate SOFR portfolio. But I would say that in a rising rate scenario, as Tim said in his comments, if you -- if deposit rates lag a little bit as they historically do when rates go up, which our competition is doing. And then if SOFR gets out ahead with increases, that would put us to a bias to the upside of the 3.50%, plus or minus a few basis points. And then over time, all else being equal, you will have your premium finance books reprice over time. But you also have some CDs repricing over time. So I think you're right, an up rate environment, we have a slight bias to an increased margin, but a lot of moving parts there.

Benjamin Gerlinger

Got it. That's helpful. And then as you kind of think about the branch expansion, its good to hear the early progress. Is there something we should look for? Is it more NIB deposits? Is it a very similar mix? I'm just trying to think like branches should equal what kind of correlation towards overall deposits?

Timothy Crane

I mean, given our overall size with more than 210 branches, I don't think the 5 or 6 that we've talked about are going to be trajectory changing. But we continue to add households. We continue to add retail deposits, and we [indiscernible] focus on deposits is the core of our franchise. And so we're filling in, in communities that we would like to have been in. We're building in adjacent communities. And I would just view it as kind of normal progress. I don't think you're going to see major changes, but it will contribute to the deposit growth over time.

Operator

Our next question comes from the line of Nathan Race of Piper Sandler.

Nathan Race

Dave on slide -- sorry, Page 21 of the release, just looking at the sensitivity to rates going up. It looks like it became a little bit more of a headwind to NII. Could you just unpack maybe some of the assumption changes that went into that? Or -- I'm just curious within that context, it looks like you guys added more downside protection to rates going up. So just curious if you can kind of unpack why the sensitivity to higher rates increased or was more detrimental relative to -- at the end of June?

David Stoehr

Yes. One of the things I'll note in that table is that assumes instantaneous change of deposit rates. And to the extent we can lag deposit rates that would actually probably bring that 2.9% to more of a neutral position. And so we assume our competition is going to move quickly in our models. But to the extent that the market moderates a little bit and deposit betas take time to get up to the full amount then that will benefit us. So this is a conservative view of the world and really the impact of that is deposit lagging.

Nathan Race

Okay. So it's just kind of conservative beta assumptions, which isn't necessarily what you guys are seeing relative to Tim's comments around some of the rational deposit pricing competition you're seeing these days. Is that a correct interpretation?

David Stoehr

I think that's a good way to summarize it.

Nathan Race

Okay. Great. And then maybe, Richard, Tim, just curious if you can comment on what you're seeing from a loan pricing perspective to the earlier question, a good amount of growth on the CRE side in the quarter, but just curious what you're seeing in terms of coupons on loan production in the third quarter relative to kind of the portfolio yield these days around 6.06%?

Richard Murphy

Yes. We've talked about this in the [indiscernible] where we saw just a lot of competition out there, particularly on fully funded CRE loans. And I think it's still very competitive. But some of that downward pricing pressure, I think, has stabilized a little bit. When the -- when it's a really good credit and you get lots of deposits, still people are fighting very hard over it. But at this point, I think people are generally focused on getting reasonably paid given the -- where we're at in the market and the potential risks out there, but we like to kind of be in that 6.5% range when we're looking at opportunities, and we can't get appropriately priced in a decent relationship with it, we'll pass on it.

Operator

Our next question comes from the line of Terry Mcevoy of Wells Fargo.

Terence McEvoy

Maybe just start, David, a question for you. Could you provide any insight into fourth quarter expenses with a normal FDIC expense and then the deal that closed and also if you're willing to discuss kind of early thoughts on 2027 expense growth?

David Dykstra

Yes. Well, the FDIC recovery was the second quarter. So the third quarter here was a pretty clean quarter for us. I'd expect it to be roughly the same in the fourth quarter, plus or minus just a hair. So I think we'll be able hold the expense is fairly consistent in the fourth quarter. And then we have said this for years now in a row that probably without the impact of any acquisitions into the equation or a big jump up in the mortgage business. that we would expect expenses generally to grow in the mid-single digits each year if we're getting that mid- to high single-digit loan growth. So I think we've been consistent quarter-to-quarter, year after year here with those forecasts. And given what we see right now, I think that's probably still a consistent way to look at us going forward.

Terence McEvoy

Great. And Tim, maybe just a question for you on scale. When I look at the Chicago MSA, you're now surrounded by these $1 trillion-plus banks, which you, as we see today, continue to outperform from a growth perspective as a $75 billion bank today. Do you need more scale for that trend to continue over the medium term?

Timothy Crane

No, I don't think so. Our relationship model and our presence in the market and our ability to differentiate with service will continue regardless of size. I think on the technology front, we're well positioned from Treasury Management Services and Wealth Services to compete effectively. I don't see scale being a limitation given where we are right now.

David Stoehr

And I'd probably add to that. I think it's a benefit to be surrounded by those banks because we can provide better service and take market share. If you look at the deposit market share that slide that we put in on Slide 22 of the deck. We grew our market share more than those banks and a number of the big banks actually lost market share. So I think our relationship style of banking against the big guys is what we've always done for 30 years very effectively. So I think it's actually good for us.

Operator

Our next question comes from the line of Casey Haire of Autonomous.

Casey Haire

Yes. Great. One more on the deposit side of things. It all sounds kind of right in line. But just longer term, when we look back at the last cycle, that the interest-bearing deposit beta was 66% on a cumulative basis, and 53% of the total. Is that -- is there anything that would -- this cycle that would change those kind of numbers? Or is that still the expectation?

David Stoehr

No. I think if you've gone through a number of different cycles, 60% to 65% has sort of been the beta on the way up and the way down, and we would expect that to behave similarly on the way up here.

Casey Haire

Okay. And then the M&A commentary -- sorry, not the commentary. The M&A outlook, just some updated thoughts on what you guys are seeing in your markets from an opportunity point of view?

Timothy Crane

Yes. Still some conversations, mostly smaller banks, I would suggest exploring their options in an environment that still feels like a pretty good time to exit if that's your plan. I would say larger size conversations have been few and far between.

Operator

Our next question comes from the line of David Chiaverini of Jefferies.

David Chiaverini

So circling back to loans. So solid trends overall. I was curious on your thoughts with premium finance P&C and it being a softer market? Could the headwinds here potentially lead to the lower end of the mid- to high single digit as we look out over the next 12 months? Or could the pipelines on the C&I side make up for it?

Richard Murphy

I think -- yes, I mean it is softer, but we would still think that we would see positive growth in deal sizes next year, albeit not at the same level that we used to see because of that opening in the market. But we're still taking share. We continue to, I think, be a premium provider in that space. Our technology that we -- the investments that we make allow us to continue to take market share. So I'm optimistic there that we'll continue to see that class continue to grow in line with that mid- to high single digits. But it depends on where those markets go. But I'm pretty optimistic about that business right now.

David Chiaverini

Great. And then on the capital front, does the increase in AOCI this quarter impact how you manage the business at all, such as tapping the brakes on loan growth? Or does it not impact the loan front or any felts at all?

Timothy Crane

Yes. I don't think it affects our ability to continue to conduct business. I mean our long-term approach is to add franchise value by adding clients. You can tell from the way we've positioned the balance sheet for interest rates that we are very neutral and want to continue to grow. There's been a little bit of a recovery since the end of the quarter. And so some of the AOCI change, we've probably recovered. But it's 1 quarter, it's not a major element.

Operator

Our next question comes from the line of Janet Lee of TD Cowen.

Sun Young Lee

Sorry for asking on the same topic, but if you were to assume 60%-ish beta on your interest-bearing deposits, I mean, that would imply a significant uptick in deposit costs over the near term, but that doesn't really square away with what you saw in the third quarter at least and then your commentary around deposit competition, maybe you're referring to the cycle or cumulative beta over time. Could you talk on like the -- are you able to share that the spot deposit cost as it stands today?

David Stoehr

Yes. So I was talking through the cycle, that 60% to 65% is the beta that we see through the cycle. Initially, I think we generally see close to 40%, so 10 basis points of the 25% and then it works its way up over time. So Spot rates were just slightly higher, 4 basis points or 5 basis points higher than the average for the third quarter. So -- but that 40% initial beta or 10 basis points would eventually work its way up to 60%, 65% through the cycle.

Sun Young Lee

Right. And you're referring to the interest-bearing deposits.

David Stoehr

Yes.

Sun Young Lee

On the resi mortgage piece, you've been consistent. Even in the third quarter, you've been consistently growing that category pretty nicely in the current backdrop, which is pretty impressive. Do you continue do you expect this line category to continue increasing from here given where the rates are?

Timothy Crane

I think it's a little bit seasonal, Janet. We clearly think we will benefit from some of the what I would characterize as refinance shops or independents that haven't survived the cycle. And so our share of the mortgage business, whatever that is, should be higher. And we believe that mortgages are a core component of our offering. So I think the market will drive that. But as we've said for several quarters, it's a pretty tough market right now and the financial changes that you'll see over the next few quarters probably won't be very material. As we've said in the past too about half of the mortgage-related revenue is related to servicing. So it's just not a big impact anymore at this level.

David Stoehr

Yes. And on the balance sheet, which you might be referring to, we add $100 million or $200 million a quarter and then generally our customers in our footprint and ones that we'd like to do and works well within our asset liability positioning also. So probably that will grow gradually but not dramatically.

Sun Young Lee

Got it. And if I can squeeze one quick one. The backlog repricing for the premium finance that negative impact to NIM? Is it still about 1 basis point in the fourth quarter at that's it?

David Stoehr

No. Well, what we talked about last quarter is that -- the 1 basis point impact was impacting the third quarter. And so we should have done in the third quarter and now rates are going up. So we should start to see that actually start to benefit and price up.

Operator

Our next question comes from the line of Chris McGratty of KBW.

Christopher McGratty

Tim or Dave, no one's asked the buyback question. You're generating a lot of capital more than you've ever done. You have the helper from Basel III. Does that become more of the narrative even with the growth that you expect into '27?

Timothy Crane

Yes. I think it could, Chris. I mean we said when we get north of 10.5%, we would start to more materially look at other options. As you know, even at 10.5%, we feel like we're very well capitalized from a risk-adjusted basis. So I think fourth quarter and into 2027, we will be looking at other ways to deploy capital, in the same order and sort of with the same priorities we've talked about on prior calls.

Christopher McGratty

Helpful. And Dave, I know the mortgage market isn't all that great right now. But what's -- any near-term expectations for mortgage contribution relative to recent levels?

David Stoehr

No. Fourth quarter tends to be a soft quarter in general, and with the bump up in rates, I would expect that to continue. So originations in our markets in the winter months tend to be lower generally. And I would just expect it to continue to be soft. But as Tim said, half of that revenue $10 plus million, $10 million, $11 million of it is servicing income. So we'll see where originations are, but probably low 20s, maybe just $20 million plus in for the fourth quarter just because of the rates and the seasonality can go much lower. I mean there's a certain amount of purchases that just occur because people move or have other life events going on. I think we're sort of close to that bottom.

But -- it doesn't materially -- if you think about it, it doesn't materially impact the bottom line after you take that revenue and back off commissions and other expenses and taxes. So we're going to stay in the business. We're committed to it to serve our customers. We're just going to be as efficient as we can and wait for the rates to rebound and get more of the market share, as Tim referred to earlier.

Operator

Our next question comes from the line of Jeff Rulis of D.A. Davidson.

Jeff Rulis

On the -- you guys have covered the margin pretty well. I just wanted to check with you Dave, the impact from that higher rate sub debt retiring. Is that -- it sounds like that is immaterial or a slight positive? Just want to check in on the general margin outlook with that piece.

David Stoehr

Yes. I mean think about $100 million on a $76 billion balance sheet. So it's not a big impact. But maybe it adds 1 basis point to the margin. But it's also that -- it pays off during the quarter. A lot of it pays off on the last day of the quarter. So it's not going to have much of an impact in the fourth quarter.

Jeff Rulis

Got it. And then another kind of granular question. Just looking at the Premium Finance, Life Insurance had a little uptick in the nonperforming loan balance loss rates historically very, very low. So just checking in on that, if that's any indication on anything on credit within that segment?

David Stoehr

No. I think if you look at it, it's in the over 90 and still accruing. From time to time, we have administrative past dues and we don't see any loss in that. But if you go back, we have one of those every now and then is just administratively, we work on deals to accommodate customers or for whatever other reason. And so we don't think there's anything there.

Jeff Rulis

And maybe if I could squeeze one last one in. Just the market share tables, I appreciate those the minor tick down in Michigan in terms of deposit market share. Is that -- would you relate that to kind of the deal that you did in finding your footing and then expect to grow from there? Any comment on the Michigan market?

Timothy Crane

Yes. I mean, as you know, these are a little bit did. They reflect the beta as of June when the prior year. So you would have some conversion-related activities. I think I'd look at it over the 2-year period and we continue to have very good momentum in Michigan and feel great about the opportunities there. So I don't think there's anything to read into that.

Operator

Next question comes from the line of Jared Shaw of Barclays.

Jared David Shaw

I guess maybe just on the deposit side. Any color around the growth that we saw in the quarter in the Wealth Management mix and what we can expect from that line with the acquisition closing now?

Timothy Crane

Yes. I mean we feel good about our Wealth Management business and have kind of seen it moving in the right direction in '26 and expect that, that will continue in '27. The Guardianship deal brings a very, very small number of deposits. That's not going to affect the number very materially there. But we continue to view the wealth business is an opportunity and have good traction in all of our markets.

Jared David Shaw

Okay. And then just going back to the margin and the bias of like plus or minus 1 basis points, I guess what would have to happen for you to be more comfortable with a higher margin here in the next few quarters. It feels like deposit costs or deposit costs are lagging. You still have the tailwinds from Premium Finance. You have a little bit of benefit from the sub debt. What would what would keep you back from being more optimistic on margin?

Timothy Crane

Just the competitive environment is really the biggest, Jared. I mean, I just don't know what we're going to see. Again, we feel pretty good about pipelines and our MO has been a relatively stable margin and then grow the business to produce more net interest income and franchise value. So we're hopeful that we get a little bit of help here, but we're not counting on it.

Operator

Our next question comes from the line of Bernard Von Gizycki of Deutsche Bank.

Bernard Von Gizycki

Just on the Guardianship Services business, it added the $1.2 billion AUM. What was the revenue and expense impact in the quarter? And it's just a bigger question. What kind of investments are needed to integrate into your franchise? And any color on expectations on AUM fees and efficiency ratio for the business?

David Stoehr

Yes. We haven't disclosed all of it yet, Bernie. But you're right, we brought over $1.2 billion of assets under management related to that business. We were in that business already. So we didn't bring over their technology. We put the business on our systems. So it just gave us better leverage and gave us a better market position in especially the Chicago market area for that -- both services. So we think it's just a nice addition to our Wealth Management business. And from a revenue perspective, generally, again, we haven't disclosed the details, but our Guardianship business to get you sort of in the ballpark, generally, it's about a 1% fee range, plus or minus. So if you take $1.2 billion at 1%, it should get you in the range of the additive revenue.

Bernard Von Gizycki

And then maybe just on the deposit market share. Obviously, a great presence in the Illinois market. But just the strategic importance in Wisconsin, Indiana, Michigan, is there -- like from those three, where do you see the biggest market share opportunity outside the Chicago area?

Timothy Crane

I don't know that we would handicap any of the three against each other. They have their own elements in some ways, different competitors. We've talked about in the past, Michigan and Wisconsin have more credit unions sort of makes the numbers a little bit harder to look at. But we feel good and would intend to grow in each of the markets. The branches we've opened a couple were in Indiana, one that opens this quarter is in Wisconsin. So again, we're not going to do anything crazy. We're disciplined with respect to pricing, but we do add households and small business activity is good. Wealth activity is good and -- these branches are nice fill-ins for us.

Operator

Our next question comes from the line of Brandon Rud of Stephens Inc.

Brandon Rud

So most of mine have been asked. I guess just one follow-up on your commentary earlier Rich, on the CRE portfolio. I think your comment was that there was some funding -- I'm not pushing the third quarter that resulted in a stronger growth rate here. But when I look at the industrial portfolio specifically going back really over the last year, it's kind of been growing in quarter in, quarter out. Can you kind of help characterize that is that new customer growth? Or is that existing customers investing more heavily?

Richard Murphy

I'd say it's a combination of both. Getting new opportunities from -- as we talked about before, bringing in customers from some of the other larger banks. But it's also from longtime customers that have have a lot of experience in that space. It's an area that we've had a lot of success in over the years. We think we are pretty good at underwriting those opportunities and definitely an asset class, we feel pretty good about, particularly with that type of sponsorship.

Operator

Our next question comes from the line of Timur Braziler of UBS.

Timur Braziler

One more follow-up for me on Commercial Real Estate. First, if you can just provide any color on payoff activity and if that headwind has now largely abated? And then maybe triangulate your comments on focusing on CRE exposure in light of the rate hikes with some of the growth and what that might mean for future growth rates?

Richard Murphy

Yes. Payoff activity was pretty consistent over the first 3 quarters. So there's still borrowers who are going out to secondary markets and there's a lot liquidity still out there. So -- but I think you're right. I think that what we would maybe anticipate here over Q4 and into next year is that, you might want to hold on to a property for an existing loan for a little bit longer and then wait for the end markets to write themselves. So maybe that slows down payoff activity over the next few quarters, but to be seen. So we haven't quite seen that yet, but I would agree with you that, that might be an effect.

As it relates to CRE growth, we've always been very, very disciplined. I mean, we -- our portfolio mix is -- and we always talk about 1/3, 1/3, 1/3, which is a 1/3 C&I, 1/3 CRE third niche businesses. Right now, our CRE growth is actually less than that, not to say that we want to fill that out to that level. But -- we'd like to have a nice balanced portfolio. CRE has always been a piece of that. But again, if you look at our performance over time, you look at the quality of the sponsors that we deal with. You look at the mix of different types of properties within that subset of CRE, we try to be very, very disciplined in that space. We underwrite, I'd say, very conservatively. So while I would agree that as rates move up, you have to be very mindful of that. But we like our positioning right now. We like our customers. We like that portfolio.

Timur Braziler

And then just, I guess, from a competitive landscape, are you seeing anything that's either stretching from a pricing standpoint or more importantly, from a structural standpoint from any of your CRE competitors?

Richard Murphy

Last quarter, I got the question, where we add on a spectrum of competitiveness. And I would have said at that time, we would definitely be at the higher end of the curve, seems to have moderated a little bit, maybe for some of the reasons that you touched on. But right now, it's competitive, as I said earlier in the call, if you have a well-structured good credit that we are looking at, there's going to be a lot of other people looking at it as well. So you have to be thoughtful, but it's not a hurdle and it's got to bring relationship for us to have it make sense.

Operator

I would now like to turn the conference back to Tim Crane for closing remarks. Sir?

Timothy Crane

Thank you, Latif. And for those of you on the phone, I always thank you for your questions. I know we'll see some of you between now and the end of the year for those that we don't, on behalf of Dave, Rich and our team, we want to wish you the best for safe and happy holiday season. Our team will be focused on finishing the year strong. We anticipate carrying our momentum into 2027, and hopefully, we'll do some celebrating too. Thank you for joining us on the call today. Have a great rest of the day.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.