WINTRUST FINANCIAL CORPWTFC
WINTRUST FINANCIAL CORP Income Taxes Disclosure
Income Taxes
Income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023 is summarized as follows:
| Years Ended December 31, | ||||||||||||||||||||
(In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Current income taxes: | ||||||||||||||||||||
| Federal | $ | 174,157 | $ | 178,075 | $ | 165,518 | ||||||||||||||
| State | 67,604 | 52,882 | 62,948 | |||||||||||||||||
| Foreign | 7,961 | 10,076 | 13,696 | |||||||||||||||||
| Total current income taxes | $ | 249,722 | $ | 241,033 | $ | 242,162 | ||||||||||||||
| Deferred income taxes: | ||||||||||||||||||||
| Federal | $ | 43,997 | $ | 2,914 | $ | (8,245) | ||||||||||||||
| State | 942 | 7,927 | (9,750) | |||||||||||||||||
| Foreign | (98) | 170 | (1,712) | |||||||||||||||||
| Total deferred income taxes | $ | 44,841 | $ | 11,011 | $ | (19,707) | ||||||||||||||
| Total income tax expense | $ | 294,563 | $ | 252,044 | $ | 222,455 | ||||||||||||||
The Company’s income before income taxes in 2025, 2024 and 2023 includes $19.4 million, $27.3 million and $42.5 million, respectively, of foreign income attributable to its Canadian subsidiary.
The tax effects of certain transactions are recorded directly to shareholders’ equity rather than income tax expense. The tax effect of fair value adjustments on securities available-for-sale and derivative instruments in cash flow hedges are recorded directly to shareholders’ equity as part of other comprehensive income (loss) and are reflected on the Consolidated Statements of Comprehensive Income. The tax effect of unrealized gains and losses on certain foreign currency transactions is also recorded in shareholders’ equity as part of other comprehensive income (loss).
A reconciliation of the differences between taxes computed using the statutory Federal income tax rate and actual income tax expense is as follows:
| Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||||||
| Income tax expense using the statutory Federal income tax rate of 21% on income before taxes | $ | 234,866 | 21.0 | % | $ | 198,889 | 21.0 | % | $ | 177,467 | 21.0 | % | ||||||||||||||||||||||||||
| Increase (decrease) from: | ||||||||||||||||||||||||||||||||||||||
State taxes, net of federal tax benefit (1) | 54,151 | 4.8 | 48,039 | 5.1 | 42,027 | 5.0 | ||||||||||||||||||||||||||||||||
| Nontaxable and nondeductible items, net: | ||||||||||||||||||||||||||||||||||||||
| Tax-exempt interest, net of interest expense disallowance | (5,266) | (0.5) | (5,338) | (0.6) | (5,348) | (0.6) | ||||||||||||||||||||||||||||||||
| Income earned on bank owned life insurance | (1,304) | (0.1) | (1,139) | (0.1) | (1,013) | (0.1) | ||||||||||||||||||||||||||||||||
| Excess tax benefits on share based compensation | (3,179) | (0.3) | (3,621) | (0.4) | (2,314) | (0.3) | ||||||||||||||||||||||||||||||||
| Meals, entertainment and related expenses | 2,900 | 0.3 | 2,823 | 0.3 | 2,439 | 0.3 | ||||||||||||||||||||||||||||||||
| FDIC insurance expense | 9,319 | 0.8 | 8,602 | 0.9 | 7,713 | 0.9 | ||||||||||||||||||||||||||||||||
| Non-deductible compensation expense | 2,822 | 0.2 | 2,587 | 0.3 | 2,147 | 0.3 | ||||||||||||||||||||||||||||||||
| Tax benefits related to tax credits, net | (5,820) | (0.5) | (4,636) | (0.5) | (3,950) | (0.5) | ||||||||||||||||||||||||||||||||
| Foreign tax effects | 5,333 | 0.5 | 6,187 | 0.7 | 3,378 | 0.4 | ||||||||||||||||||||||||||||||||
| Other, net | 741 | 0.1 | (349) | (0.1) | (91) | (0.1) | ||||||||||||||||||||||||||||||||
| Income tax expense | $ | 294,563 | 26.3 | % | $ | 252,044 | 26.6 | % | $ | 222,455 | 26.3 | % | ||||||||||||||||||||||||||
(1)State taxes in Illinois made up the majority (greater than 50 percent) of the tax effect in this category.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2025 and 2024 are as follows:
(In thousands) | 2025 | 2024 | ||||||||||||
| Deferred tax assets: | ||||||||||||||
| Allowance for credit losses | $ | 119,728 | $ | 113,648 | ||||||||||
| Net unrealized losses on securities included in other comprehensive income | 103,838 | 151,886 | ||||||||||||
| Right-of-use liability | 36,989 | 39,691 | ||||||||||||
| Deferred compensation | 36,670 | 34,850 | ||||||||||||
| Stock-based compensation | 15,571 | 14,741 | ||||||||||||
| Loans | 8,625 | 12,104 | ||||||||||||
| Net unrealized losses on derivatives included in other comprehensive income | — | 4,032 | ||||||||||||
| Federal net operating loss carryforward | 402 | 549 | ||||||||||||
| Other | 14,605 | 8,017 | ||||||||||||
| Total gross deferred tax assets | 336,428 | 379,518 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Equipment Leasing | 219,927 | 165,363 | ||||||||||||
| Capitalized servicing rights | 50,363 | 52,298 | ||||||||||||
| Goodwill and intangible assets | 39,829 | 42,733 | ||||||||||||
| Premises and equipment | 35,378 | 38,554 | ||||||||||||
| Right-of-use asset | 30,680 | 32,651 | ||||||||||||
| Net unrealized gains on derivatives included in other comprehensive income | 17,449 | — | ||||||||||||
| Deferred loan fees and costs | 10,264 | 7,889 | ||||||||||||
| Other | 3,076 | 2,660 | ||||||||||||
| Total gross deferred tax liabilities | 406,966 | 342,148 | ||||||||||||
| Net deferred tax (liabilities) assets | $ | (70,538) | $ | 37,370 | ||||||||||
Management has determined that a valuation allowance is not required for the deferred tax assets at December 31, 2025 because it is more likely than not that these assets could be realized through future reversals of existing taxable temporary differences, tax planning strategies and future taxable income. This conclusion is based on the Company’s historical earnings, its current level of earnings and prospects for continued growth and profitability.
The Company has Federal net operating loss (“NOL”) carryforwards of $1.9 million that begin to expire in 2029 through 2035 and are subject to IRC Section 382 annual limitation. The NOL carryforwards were a result of acquisitions.
The Company accounts for uncertainties in income taxes in accordance with ASC 740, “Income Taxes.” At December 31, 2025, 2024, and 2023, the Company had no unrecognized tax benefits related to uncertain tax positions that, if recognized, would impact the effective tax rate. If the Company were to record interest or penalties associated with uncertain tax positions, the interest or penalties would be included in income tax expense.
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in numerous state jurisdictions and in Canada. In the ordinary course of business, we are routinely subject to audit by the taxing authorities of these jurisdictions. Currently, the Company’s U.S. federal income tax returns are open and subject to audit for the 2022 tax return year forward, and in general, the Company’s state income tax returns are open and subject to audit from the 2022 tax return year forward, subject to individual state statutes of limitation. The Company has extended the statute of limitations on certain state income tax returns for tax years 2017 through 2021 due to an ongoing audit. The Company’s Canadian subsidiary’s Canadian income tax returns are also subject to audit for the 2022 tax return year forward.
The income taxes paid by the Company for the years ended December 31, 2025, 2024 and 2023 is summarized as follows:
| Years Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Federal | $ | 148,000 | $ | 173,000 | $ | 165,873 | ||||||||||||||
| State and Local: | ||||||||||||||||||||
| Illinois | 33,378 | 30,502 | 38,002 | |||||||||||||||||
| All Other States | 33,119 | 25,373 | 26,469 | |||||||||||||||||
| Foreign | 7,915 | 23,976 | 1,309 | |||||||||||||||||
| Total | $ | 222,412 | $ | 252,851 | $ | 231,653 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 29, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.