Buried beneath the celebratory tone of Wintrust Financial Corporation's Q1 2024 earnings call, there's a subtle shift in strategy that hints at a bolder, more aggressive Wintrust on the horizon. It's not about the record net income or the strong loan and deposit growth – those are simply echoes of their well-established, steady-as-she-goes approach. The whisper we're picking up on comes from their expansion into Western Michigan, specifically the acquisition of Macatawa Bank. This move, presented almost as a footnote to a solid quarter, may signal a departure from their historically conservative M&A approach and hint at a Wintrust ready to flex its muscles in a new market.

Why is this whisper so intriguing? Because it's not just about expanding their footprint. It's about the type of bank they're acquiring and the speed at which they're integrating them. Macatawa isn't just "a good fit" as CEO Tim Crane described it – it's an almost impossibly perfect match for Wintrust's current needs and future aspirations.

Consider Macatawa's financial profile: pristine credit quality with virtually no non-performing loans, a low-cost deposit base, and a loan-to-deposit ratio of a mere 55%. That translates to a whopping $1.1 billion in excess deposits just waiting to be deployed by Wintrust's lending machine. It's as if Macatawa was built in a lab specifically to fuel Wintrust's growth ambitions.

Here's where the hypothesis gets even more interesting. Wintrust anticipates "strong" loan growth in Q2, potentially exceeding the already impressive $1 billion increase seen in Q1. Much of this is driven by their unique commercial premium finance portfolio, which typically experiences its strongest growth during the second quarter. Last year, these balances surged by over $1 billion in Q2.

Now, let's connect the dots. Wintrust acknowledges that funding this accelerated loan growth with deposits will pressure the net interest margin, especially in the short term. They've already seen a slight decline in the NIM, attributing it to the higher cost of attracting incremental deposits. But here's the crucial detail: they're willing to accept this trade-off for "solid franchise growth and favorable net interest income performance in future quarters."

This is where Macatawa enters the picture, not just as a footprint expansion, but as a strategic funding source. Those $1.1 billion in excess deposits? They arrive just in time to backstop Wintrust's aggressive lending push without significantly impacting their funding costs. It's a move that other analysts might dismiss as coincidental, but we see it as a calculated maneuver to supercharge their growth while minimizing margin impact.

Further reinforcing our hypothesis is Wintrust's confidence in their M&A execution. They readily acknowledge their proficiency in acquisitions, expecting swift integration and "good momentum" for the combined entity. This, in a regulatory environment where M&A is reportedly becoming more challenging, suggests a newfound confidence in their ability to navigate regulatory hurdles.

The whisper from Western Michigan isn't just about one acquisition, it's about a Wintrust potentially embracing a more aggressive, proactive approach to M&A. They've tasted the potent combination of a perfect target and rapid integration, and it's likely whetted their appetite for more.

This whisper also speaks to a broader shift in the competitive landscape. Wintrust has long been a beneficiary of consolidation in the Chicago market, but the acquisition of Macatawa hints at a Wintrust ready to take the fight to new territories.

Projected Loan Growth

Wintrust anticipates strong loan growth, exceeding $1 billion in Q2. This chart illustrates the projected loan growth, driven significantly by their commercial premium finance portfolio.

Remember those 10-year charts showcasing Wintrust's steady and consistent growth? They might need to make room for a new chapter, one where the sleeping giant awakens and starts making waves in markets beyond their traditional strongholds. This whisper from Western Michigan might just be the first rumble.

"Fun Fact: Grand Rapids, Michigan, where Macatawa Bank is headquartered, is known as "Beer City USA" for its thriving craft brewery scene. Wintrust's expansion into this vibrant market might just be the perfect pairing for future success."