Wintrust Financial Corporation (WTFC) Q1 2012 Earnings Report, Transcript and Summary

Welcome to Wintrust Financial Corporation’s 2012 First Quarter Earnings Conference Call. Following a review of the results by Edward Wehmer, Chief Executive Officer and President; and David Dykstra, Senior Executive Vice President and Chief Operating Officer, there will be a formal question-and-answer session. The company’s forward-looking assumptions are detailed in the first quarter’s earnings press release and in the company’s Form 10-K on file with SEC. I will now turn the conference call over to Mr. Edward Wehmer. You may begin.

Thank you. Good afternoon, everybody, and welcome to our first quarter earnings call. This is the first call we’re making from our new intergalactic headquarters, so if there’s a - if you hear some background noise we’re still under construction here, we thought it would be fun to make the call from Rosemont as oppose to Lake Forest. With me as usual are Dave Dykstra, our Chief Operating Officer; Dave Stoehr, our Chief Financial Officer; and Lisa Pattis, our Corporate Counsel. As is our customary approach, I will make some comments on the quarter in general, Dave Dykstra will then take you into detail as he relates to other income and other expense, following that I will have a few minutes to summarize and talk a little bit about future direction, and as always there will be time for questions at the end. First of all, I’d like to say we’re very pleased with first quarter results. All of our vital signs continue to trend positively and our crystal ball shows no reason right now why there should not continue to do so going forward. Our earnings for the first quarter were $23.2 million or $0.50 per share, up 42% from the same period last year, and 21% from the fourth quarter of 2011. This was a relatively noiseless quarter as it relates to one timers, securities gains of $816,000 basically offset a one-time expense of $848,000 related to early extinguishment of a portion of our securitization facility, and we’ll talk a little bit about - more about that a little bit later. Other than that we recorded a pre-tax bargain purchase gain of $840,000 of pre-tax or approximately $0.01 per share after tax, related to the Charter National Bank, FDIC-assisted transaction completed in the first quarter. I know Dave…

Thanks, Ed. I will touch briefly on the non-interest income and non-interest expenses section. I’ll focus more on the first quarter this year than fourth quarter of last, although I’ll give some comparisons to the prior year. As you know 2011, we had a lot of acquisitions, and so the changes I think are more relevant from the fourth quarter of last year to the current quarter. In the non-interest income section, our wealth management revenue increased nicely to $12.4 million from $11.7 million in the previous quarter and $10.2 million in the year ago quarter. The increase in wealth management revenue from the prior quarter came fairly evenly from both the brokerage business and from the trust and asset management business. As we noted in the news release, we closed on the acquisition of the trust department from a local community bank on March 30, so that you know, the current quarter was not impacted by that acquisition, but we should benefit the revenue stream starting in the second quarter. The assets under administration which we acquired related to that trust department approximated at $160 million and it also had some land trust business. On the Mortgage Banking front, Mortgage Banking revenue improved slightly to $18.5 million in the first quarter of 2012, from $18.0 million in the fourth quarter of last year and was much higher than the $11.6 million that we recorded in the first quarter of last year. The company originated and sold $715 million of mortgage loans in the first quarter compared to $883 million of mortgage loans originated in the prior quarter, and $562 million in the year ago quarter. You know, Mortgage Banking revenues actually improved despite the lower origination levels due to overall pricing metrics in the marketplace and a better mix…

Thanks Dave, so to summarize, all in all a very positive quarter for Wintrust pretty much all facets of our operations with lots of good positive momentum in all important areas. Our Wintrust branding initiative whereby we’re bringing all our community banks in under the Wintrust umbrella, yet not losing their identity as a local community bank alternative is exceeding our expectations. We like where we are positioned now both on an operating basis, and on a strategic basis. We’ve always said that in this business, you have to be in a position to take advantage of what the market gives you. We believe our past strategies have shown us that we have done this in our past strategies and our go forward strategies will also do this. We look forward to continuing to execute said strategy while taking advantage of opportunistic developments in our marketplace. All in all in short, it’s kind of nice when the plan comes together even if the plans been going on for about 6 years but it’s very nice when it comes together. Now, we can open up the line for questions.

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

Nice job. Quick question on the margin, do you see any risks to the current margin level, obviously, if the Macquarie stuff coming on in the pipeline, but is there anything else unusual say in the accretable yield or anything that you see that is artificially boosted this?

No, I don’t - Jon, this is Dave, we don’t see anything on the accretable side that’s unusual this quarter. As we talked about in the past, if we speed up the collection of the FDIC assets, or we do better on them, that might boost the yield a little bit, or could go the other way, if they slow down. But it was fairly consistent yield on those as well as the life side, so nothing unusual there.

Like we said, it was pretty noiseless across the board other than things we pointed out.

Okay, okay. That’s good. And then just one question, I haven’t asked you this one in awhile. But what kind of growth are you seeing out of your younger banks call it, the youngest half of your bank?

Well, it’s - the growth is relatively consistent across, because as I said in my comments that we have not been pushing growth. We did not, when we - in the old days we were asset driven, we’d open a new bank and we could really generate and gain a lot of market share, because we knew we had assets to cover. We just this quarter have gotten back to being in that position. So we have not been marketing deposits and marketing household relationships very hard. We’ve been focusing on obviously commercial relationships as indicated by the amount of demand deposits we’ve been able to pick up. But we didn’t want to bring deposits in and put them in a negative spread and spend a half hour on this call, explaining to everybody why our margin went down. So we were trying to time this. We, we have almost 21 new locations where we haven’t done any new marketing. Our markets where we can - where we think that we can unwrap, get in the closet and take our old marketing plans out of the box, which served us so well back before 2006 when we went into [indiscernible] and start gaining market share because we know that we can bring those assets - we can bring those households in and we have assets to cover where we can do so profitably. So, and the other thing is we have the leverage built into the system, as I said, we can probably put on most of this good growth without a lot of increase in expenses. We have great leverage built in, because we haven’t grown those new branches yet as we’ve been waiting for this equilibrium to take place. So that’s a good question to ask. Maybe 2 quarters from now.

Okay. Okay. But pretty broad. That’s what I was getting at, thank you.

Our next question comes from Steve Scinicariello of UBS.

Just couple of quick ones for you. So just given the huge opportunities that you guys just continue to see within your footprint, I’m just kind of curious, do you think you’ll be able to deploy the full, $126.5 million of convertible for this year or just - what’s the kind of timing in terms of deploying that accretively?

Well, this year, next year, the issue was, we know we have really good loan demand which is going to require, if it all comes to pass we’re able to execute and we’re able to maintain the pull through rates we have in the past on that pipeline we’re talking about bringing a lot of our assets on the books right now. And we know we’ve got, the Canadian Premium Finance acquisition should be closing, in this quarter. It’s another $230 million. We, we need to start growing the balance sheet to, to accommodate that, so there is some, in that core growth will use some of those numbers. Again some of that will be offset by the third quarter, the rest of the securitization going away. But we see good organic growth coming on board. The other side of it is, we believe with the acquisitions that are going to be coming our way we need to be prepared and very opportunistic to take care of them. So to put a timeframe on it, I can’t do that, because some of it is core opportunistic acquisition opportunities that we believe will be coming our way, have been coming our way, we just haven’t found any that made sense for us other than the Elgin State Bank and some of the branches that we picked up. But we believe that there’s going to be over the next couple of years, it could be next month, it could be 3 months, one that comes along that makes a lot of sense to us. So in the old days we used to do just in time capital, where we push it to the edge of the envelope and then we go out and we would raise capital to support that and then we brought it down again. The regulators - we’ve got very good relationships with the regulators, they would like to see us have the money in place first. The reason we did a convert like this was that the cost of the convert was cheaper than what we were seeing in some of the debt markets. And in a $41 price per share conversion price and should be pretty accretive to us in terms of tangible book value. So it made sense that we needed to pre-load to take advantage, to keep the regulators comfortable and to be able to take advantage of these opportunities as they come along. So it’s very hard for me to put a time on that because some of it is based on opportunistic timing of opportunities.

That make total sense, Ed, thank you. And then just on the Macquarie Premium finance. I know that, right now the book is just over $200 million, but I believe those guys were originating closer to like $600 million. So is it possible that kind of once you bring that platform on deck that may be you could hook closer to that $500 million to $600 million kind of annual kind of run rates on balance sheets as this thing gets ramped up?

Yes, Steve the $600 million in originations is what they do now but because these loans payoff over 9 months and they’re full-out loans, so they’re installment loans, $600 million translates into about their $230 million of outstandings. It’s like our portfolio we’ve got about $3.5 billion of commercial premium finance originations a year. And we’ve got a about $1.4 billion to $1.5 billion outstanding. So I think I confused some people a little bit when I put the $600 million number into the press release and the 8-K. But they’ll still do that, but $600 million really translates to the 230 outstanding. We do think that there’s opportunities to grow in that marketplace up there. We’ve talked to agents and brokers in Canada and those that have operations in the U.S. and Canada, they seem to be excited to have us up there with our product line that we have and the system that we have. And the customer service that we have, Macquarie did a great job up there. We just - I think we’ve got a few other arrows in our - in our quiver that we can offer up there, and for those of our customers down here that also do business in Canada, they’re looking forward to it. So I do think we can grow that, that business. But you know, we’ll do it in a disciplined ratable way.

Our next question comes from Brad Milsaps of Sandler O’Neill.

Just on the previous finance business you guys had nice growth here in the first quarter, about $100 million. I know that the renewal season may tend to be heavier at the first of the year. But just curious, you’re up about 13% year-over-year, is it an increase in the number of units or are we starting to see a little bit more of a harder market, you know like we’ve been talking about for the last few quarters, are you starting to see a price increase and your average ticket size go up?

We are starting to see it go up on a spotty basis, but yes the market is hardening but nothing like we would like to see it, but there, but we have, we have seen a, a little bit of a spike in average ticket size. But again we continue, you know, our units processed have been up double-digit every year. We’ve gained market share in that business every year, even as the ticket price sizes have gone down. But I think that we are seeing, as you see it, and your - our commercial clients are seeing, you know, 10% to 15% increases in their premiums. So we expect that to continue to build. It’s not going to be an overnight big, you know beach ball under water sort of thing. But it will build over time. But we also continue to pick up market share in that business. So we’re looking forward to rates. The other phenomena when premiums go up, is more people finance, and we like that too. So basically it’s probably a combination of both right now, but not like a really big pick up in average ticket size, but we’re starting to see - starting to see it happen, though.

Okay. And then, I know we talked about this a little bit last night, but the - on the 30 to 89 days past dues, that they were up a fair amount in the quarter, as you delve into that number a little more, did anything stand out there, is it more administrative kind of with the renewal process? Just kind of wanted to get a little more color on that increase on a linked-quarter basis?

Well, the 60 to 89 days stayed relatively constant. That was relatively stable. But there was a pick up in the 30 to 60-day category, by about $40 million, Dave? And a lot of that is - most of that is - what’s the word I’m looking for? Administrative.

Yes.

So, as you know our philosophy, Brad, if it’s bad, call it bad, deal with the issue. So we did have some administrative issues pop through on the first quarter, just kind of a year-end phenomena, but - and we do concentrate very heavily on making sure they don’t get over 90, because you’ll see we basically have none, no administrative past dues over 90 days. So we don’t - we’re not concerned by that number, if that’s the issue.

Yes. And think about - if you - and Brad, if you go after the 60 to 89, that’s - it’s relatively flat which is a true statement, but we’ve put...

Why would I lie Dave?

No, I’ll just give you credit for that Ed. It sort of fluctuated between the low 40s to the mid 60s, so we’re sort of in the range of where that is. And again a lot of it is just administrative out there.

Our next question comes from the Christy McGratty of KBW.

Question on the loan growth. Maybe I’ll ask a little bit different. Ed, the, if you look at the premium businesses, they were last year up about 11% and 12% for the life of the commercial. Aside from the Mcquery acquisition, is that a fair ballpark for these businesses this year?

I think that’s a fair ballpark for this year notwithstanding any sort of inflation in premiums.

Okay.

In other words, we’ve been, we’ve been, like I said, we’ve been growing double digit in unit process, 10% plus every year and that’s indicative in those balances going up by that number. So if we get any sort of increase in, in average ticket sizes, you know, vis-à-vis, premiums going up, that will all be gravy. So we, we think that that’s a reasonable number to use and a flat premium environment, in a rising premium environment, numbers should get better.

Okay. Dave, on the margin, you guys, give quite a bit of detail on the securitizations and the impact going forward. Maybe, maybe you can just talk a little bit more, you did 355 NIM this quarter. I think in the past you’ve talked, Ed, about 360, 370 in this rate environment maybe you bridge the gap and offer any kind of guidance in terms of numbers in the last couple of quarter.

Yes, the last time I did that you guys all filleted [ph] me. I think we said in the middle of last year we said yes, that is our goal, that’s where our models say we can be in that rate environment but then when the QE, whatever it was came in, I think the twist, the QE 3 twist, the new dance, came in, we said boy it might take us a couple more quarters to get there and I think that’s what we’re seeing right now. We still believe that there’s, there’s good opportunities in our cost of funds that continue to bring them down. You know, repricing side of the equation plus new balances coming on are coming in cheaper than the overall portfolio was, so that should bring those numbers down. Bringing down the cost of the entire securitization goes away, has the material effect on our cost of funds so we so see good reasonable decreases in our cost of funds. The Macquarie transaction the rates on that premium finance business are higher than what we get in our market. We can’t talk about them directly now as we don’t own the company, but it’s, they’re good yielding assets, and we’re trying to hold the line. There still is pricing pressure on the commercial asset, the commercial side of the equation, but we do not bend off of our profitability analysis. So we’re trying to hold those constant. The one area where we see some pressure continues to be in the premium finance side of the business on pricing. That seems to have abated now. But we kind of maybe hit a bottom. So hopefully we can continue to, to hold steady or grow the asset side of the margins. So you know, we only need 5 basis points you guys let me off the hook on that 3.60 to 3.70 side so it’s in my mind. But it will be what it will be. We think the trends are good for us there. While most of it will be whatever happens on the asset side of the equation, but I think we’ll get a nice boost from the Macquarie deal and if we can hold steady on everything else. We should be okay. Dave, do you have anything to add to that?

No, I think the challenges will be where’s it’s competition on the commercial side and if anybody starts to move on the deposit side, but most of us - most of our competitors out there, I think have more liquidity than they need, so they’re not being aggressive on the deposit side. So, hopefully we won’t see that move and we’ll just have to see how the competition goes on the loan side.

Okay. Just last one on the expenses, aside from the seasonal $3 million or so in the personnel costs, in the declining in kind of the OREO cost going forward, should we see material growth in expenses next quarter, or should expenses be down?

Well, I - we don’t anticipate adding a lot of new people, nor do we have any layoffs planned per se, so salaries should be relatively flat, barring an acquisition. We’re not adding any new locations now. And so I don’t see major changes here unless we do some acquisitions out there. OREO is going to be what expenses are going to be, what they’re going to be. And hopefully they’ll come down. We won’t have any debt deficient cost going forward unless we buy some of those notes back. That’s not something we can - that deficient wasn’t us pre-paying the notes. So it was us buying notes in the marketplace when people were willing to sell them, and there was some activity in the first quarter. It’s slowed down a little bit here in the second quarters where we haven’t seen people selling them but if people would offer those in the marketplace at the right price, we probably would look at buying those back early again because it’s helpful to the margin and our profitability, but borrowing that we shouldn’t have the debt deficient cost next quarter. So, I don’t see major changes unless we have some acquisition, or OREO improves.

Our next question comes from Emlen Harmon of Jefferies.

Couple of questions for you on credit. I guess, nice improvement on the charge upfront this quarter. You talked a little bit about just kind of, dealing with problems as you see them. But, as you look at underlying kind of loan migration on the commercial credit side, is there room for further improvement in charge-offs there? I think, the second part of my question would be, just kind of, thinking out a few quarters, how do you think about kind of total, like the total loss rate on the loan portfolio and is there more room for improvement from these levels?

Absolutely there’s room for improvement. If you go back in time, we - we - our credit philosophy always resulted in credit statistics that were 1/3 to maybe in a bad year 1/2 of what peer group was. They were very - in history, if you go back in time, history will show you that. So you know, we will tell you when we get back to those types of ratios, then I think we can call it over. So, no, we believe that our credit cost even at current charge-off levels were very elevated for where we want to be. And when we can get back to percentage type levels that were equal to our first 15 years of existence, then we’ll officially call the cycle over as it relates to us. But there’s a lot of room there for us to improve.

Got you. I mean, just thinking about that more in terms of the short-term. I mean, in terms of what we see in the near term is that, do you think we see a slope down from these levels or is there room for some lumpiness here in the near future?

Well, where trend has been our friend for the last 5 or 6 quarters. And we would hope, as you look at the inflows that have come down from 55, 45, 35, 25, now 18, we would like to see that trend continue to go forward. Like I said, in my prepared comments it may the not be linear and it may be a little lumpy what I don’t want to do is have our people start to manage to a number or manage to try and to maintain this slope of this curve of credit of this positive trend of credit statistics. What happens then is, you have an explosion of capitalist [ph] pile down the road. We still understand this isn’t over. We still understand that there is stress out there. But our goal is to be first out of this thing. Identify them quickly and get them out of here as quickly as you can. So we don’t anticipate a freight train coming at us, we would like to see numbers to stay stable to continue to go down. That doesn’t mean that there won’t be a little bit lumpy but because of the numbers are smaller, small enough now, that lumpiness, if you had a $10 million hick up, the number is going to look like you are up 10% in non-performance, but in fact the number is low enough now that it might be just one deal that would do that. So it’s going to be a little bit lumpy. We continue to try to land this airplane but we envision, we’d like to, the light at the end of the tunnel we see, seems like they’re coming down. All the statistics show they should be coming down and credit cards should be getting less but we won’t call a victory until we’re back to levels equal to our first 15 years of existence.

Our next question comes from Terry Mcevoy of Oppenheimer.

I know we’ve you’ve a couple of more months to spend with the new Canadian team. Do you still feel like and still believe yield, credit will be better out of the Canadian portfolio versus, versus the U.S.?

Yield certainly, credits about the same as ours.

It’s a little bit better, they don’t do workers’ comp up in Canada, and so workers policies tend to have a little bit higher rate than the rest. So credit will be a little bit better for that reason and yields like we said are better than ours.

And it’s a great group of people. We’re very excited to be working and they’re excited to be working with us. So we have high hopes for that organization and being able to really grow that and take - we’re number 2, once we - that entity is number 2 in the Canadian market. We have our sights on being number 1, so we’re having fun.

Yes, and we’re just waiting for the day we can close. Regulatory process between 2 different countries it just takes a while so. We’ve got to get Dykstra a passport too. He’s from Iowa, he’s never gone anywhere.

And I was thanks to you earlier. I don’t have a passport.

And just a question on the new downtown location. At first blush it’s another bank opening a new branch in Chicago, it sounds like from your remarks earlier, you’ve got more of a focus targeted approach really trying to leverage the commercial business. But if you set outside of that location on West Madison and polled people and asked them who is Wintrust, do people know who Wintrust is? Or is it on your part being very proactive and going after the commercial customers and it sounds like trying get more corporate and commercial deposits is the initial strategy there?

Our guys’ downtown say that that office is worth $200 million in deposits to us, we’ll see if this it happens, but that’s what they say. But if you think of it on the retail side of things, in all the markets that we’re in, there are 101 branches in different markets where people work downtown that are now right in the center of the loop, are going to have the ability to go in and conduct banking business. It will be called the Wintrust Banking Center and then it’s got like 15 windows on the outside of it and we’ll be flashing the names of banks up there and the like and people now know over the last 18 months as we have adopted this new branding strategy where we override it with the Wintrust name and if you come to Chicago you’ll see Billboards up, you’ll go to Wrigley Field and you know our names is up all over there. Although the cubs not doing well. I hope we’re not a Jonah [ph] to them. But I guess, they didn’t win for a long time, so they can’t blame us. So this actually is going to be well received by our retail base to have that outlet down there too. But - so we think, we’re looking at - we believe that in the long run we will need more than one down there to service that client base. So this is the first one. We’ll learn from it. See where it goes, but we’re excited about it. So it’s, you know, it’s going to be pretty interesting, but you can pick up $200 million out of there just servicing the commercial clients and the referral sources, the accounting firms and the lawyers and the like, that’s a good move for us.

Your next question is from Stephen Geyen of Stifel, Nicolaus.

Hey, good morning or good afternoon. Just a handful of questions here. You know, there is certainly some good potential for some solid loan growth in the second quarter. How should we look at that as far as funding and I guess, maybe the changes in balance sheet relating to investment securities and the deposit growth?

Well, we’re sort of back to the asset driven mode, so we’ve used up a lot of our excess liquidity now and we’re back after the growth side. So we’ll watch all of these new locations we had in the communities on the north side of Chicago and you know, out -where we’ve got some of the other banks that we picked up from an FDIC perspective, the new ones in the Charter National Bank area that we picked up, and we’ll do our normal group of products that we do there. But we also think that we’ll pick up - continue to pick up DDA from the commercial business that we have out there. So as Ed said, the new accounts are coming in at cheaper rates than what’s on our books here. We think we’ll be successful. We always have been from our retail schmaltzy sort of marketing out there. So it should be across the board, with less emphasize, though on CDs than we used to do when we opened up banks or promoted out there. There’s a lot of...

And maybe just a follow-up to that, how should we look at the investment securities? I guess you talked a little bit about - that it’s going to be really driven from the liability side, the deposit side, to support that growth, but just curious about the investment security. Should we look at that as more of an end of period kind of run rate or kind of an average quarter run rate?

No. Well, end of period is probably accurate this quarter. We had no securities called away or anything like that. So what we have at end of period now is there. We sort of target the - 85% to 90% loan to deposit ratio, and we’re at the higher end of that right now. So as the balance sheet grows, the liquidity assets, the investment portfolio may grow a little bit. We want to put whatever new deposit growth we get, 90% of that in the loans and a little bit of it will go into investment. So as the balance sheet grows you may see the investment portfolio grow modestly but end of period should be relatively...

10% to 15% of overall growth will be added to the investment portfolio into liquidity balances.

Got it. Okay. That’s helpful. And as far as Mcquery I know you can’t comment on operating costs I’m curious about how many employees are coming over and if there are some other large costs that maybe we should consider.

I, well you know they run a fairy efficient business up there. We can’t talk about their cost structure at all, and we’re still haven’t closed yet, and we can’t talk about it. We, we will bring over all their employees initially, but just because of the confidentiality that we signed with them, we really aren’t supposed to talk about their operating metrics.

We’ll bring them over initially and we hope to expand there also. I don’t think anybody that initially we’re going to did that and we have economies of scale. We will have economies of scale but we’re going to need the rest of, just based on some operating leverages of systems and the like, but we, moved to number one, we’re going to need every, everybody that’s up there and, and then some to achieve the goals that we want to achieve up there and to achieve the goals they want to achieve up there. That’s a great group of people. I - I, I kind of like Canada. The people up there were, were, couldn’t have been nicer, and we, we had a great time when we were up and visited them and they’re very much looking forward to, they’re more competitive than we are, I think in a lot of ways and they want to be number one, so where we will, once that deal gets closed, you we can give you some information, some more information on that, but we believe it’s a great opportunity for us. Okay. And last question, just curious what the trends might be in SBA, I know you guys dived into that market I guess late last year, how does it look right now?

The on the SBA side, well, I don’t have, I’ll have them next time or I can call you back with it. Steven, but I will tell you in the first quarter, we were number 2 in production in the state of Illinois. We were number 2 in overall production in the state of Illinois so they are off and running and doing a fine job. But I can call you offline and get you those numbers or Dave can down the road. I don’t have them in front of me, but I do know that we are number 2 in production in the first quarter.

[Operator Instructions] Our next question comes from Mac Hodgson of SunTrust.

Most of mine have been asked but just a couple follow-ups. In the press release you mentioned higher yields on premium finance loans, positively impacting the margin can you give us specifics on what change in yields there were?

Yes, we, well, we the commercial side stayed relatively flat I mean so we think we’re seeing that, you know, competitive pricing pressures subside. We did a little bit better on the life side this quarter. So you know, not, not dramatically but a little bit better. So Life contributed a little bit better because the commercial side plateaued out there.

And on the Life side, was that just less competition so you’re able to get better yields?

No there’s a good deal of competition now on the Life side. But we, our guy’s have been holding the line and doing a nice job.

Okay. And then period end, interest bearing deposits on the balance sheet your excess liquidity were I think $900 million. Was it very different from an average balance standpoint during the quarter. I may have missed it in the release just checking there?

No. I don’t think there would have been much, much difference from that perspective. I don’t - I’m just looking here real quick. Nothing, nothing funny would have happened there. Some quarters we have securities called away, and then they’re, down below at the bottom, but it was about the same for an average balance. Dave Dykstra will confirm that.

Okay, great. And you talk about driving deposit growth to fund asset generation, but it does seems like you still have a lot of excess liquidity even...

Well, remember we’re going to have to pay off that securitization. There’s 400 something million dollars that’s sitting in a trust fund right now making the buck-o [ph] 280 basis points. That’s that negative spread. So, we - that has to stay there. So you net that out, we’re getting a little light.

Okay. So you don’t think you’d like to take it below $400 million or $500 million in excess liquidity.

No, I mean, if you look at that would mean you would get your loan to deposit ratios way up into the mid 90s and that’s not one of our goals. We still think liquidity is important, so. Well, thank you all very much. We appreciate your support and your interest in Wintrust. We’re excited about where we are right now. Any follow-up things that come to mind later tonight over a beer or 2, give Mr. Dykstra and myself or Mr. Stoehr a call. But thank you all for listening in, and we’ll talk to you again soon.

Thank you. Ladies and gentlemen, this concludes the conference for today. You may all disconnect and have a wonderful day.