And we wanted to be able to have the plumbing in place, in case there was any future liquidity events that happened in the industry. So we just thought it was prudent to do the sale, put the plumbing in place, test it out and move forward. But right now, based upon the good deposit growth that we’re having and our funding ability to continue to fund those loans and our loan-to-deposit ratio being in a spot that we like it, we don’t have any expectations that we’ll do another sale in the near term. But the facility is there in the event we need for some reason.
Chris McGratty: Perfect. And then maybe the last one, you went through all the moving parts of non-interest income, and I think [it’s at $0.5 million] (ph). How do we think about just the trajectory of your fees with mortgage obviously pretty depressed, but you’ve got other offsets from here?
David Dykstra: Yeah. Well, mortgage and wealth management are two big areas. Service charges sort of just plug along and maybe grow with the growth of your business and retail accounts. But mortgages, the pipelines are pretty consistent, and they’re in the 80%, 85% purchase business. Maybe that slows down a little bit in the winter months, since the majority of our originations come out of the Chicago, Milwaukee and Minnesota markets. But applications, I think, are about as low as they go. So we would expect steady originations. Gain on sale margins have been holding in, a little above 2%. And so we think that will just plug along and then there might be some fluctuation depending upon movements in rates and the impact on mortgage servicing rates, but we try to hedge that impact pretty well, too.
So I think — our personal opinion is I think mortgage probably bounces along here for the next couple of quarters. Hopefully, in the spring buying season, we see some green shoots and some improvement in the applications and the production. But I don’t see anything that would indicate that it would increase rapidly in the near term or decrease rapidly. We just — it’s been plugging along at these levels for four, five, six months now. So we expect that to continue. Wealth management, somewhat depends upon on the movement of the underlying assets under management and their valuations because the fees are based upon a lot of the values. But we continue to try to hire people and grow that business, but it’s a little bit slower trajectory forward, but we would expect it to grow.
So we’ve got some leasing income in there, et cetera, but the rest is pretty small.
Chris McGratty: Great. Thanks.
Operator: [Operator Instructions] Our next question comes from the line of Terry McEvoy of Stephens Inc.
Terry McEvoy: Hi, thanks. Good morning, everyone. Maybe start with the question, the expense outlook for the fourth quarter. There were a couple items called out on the expense line right in the opening of the press release. But can you share some thoughts on 4Q? And maybe while I’m on, any initial thoughts on 2024 expenses, whether that will track kind of historical growth rates or we are hearing from some other banks that they’re looking at expenses with some internal plans to kind of control that growth rate?
David Dykstra: Yeah. Well, you’re right, Terry. We call out about $6 million of sort of uncommon expenses that we wouldn’t expect to recur in the fourth quarter. So that’s $330 million. You take those down, and you are $324 million-ish or something like that. So probably somewhere plus or minus in that area for the fourth quarter. We haven’t really given guidance for ’24 yet, but generally speaking, our thought is that we’re a growth company. And we have lots of opportunities. We’re uniquely positioned here in Chicago right now with our size and how we stack up against the competition. Basically, we’re going against big banks and small community banks. There just aren’t a lot of banks between $10 billion and $50 billion that are headquartered in the Chicago area.
So we have a unique position here that we think we can take advantage of. And we also have our niche businesses that can help out. So we’ve always thought of ourselves as a growth company. We still think we can grow. Deposits are out there and having good growth. And so we’d rather grow into this. And if we grow mid to high single digits, we would expect that our non-interest expenses would grow at a rate less than that, maybe mid-single digits. And so we can leverage the infrastructure going forward. If for some reason the growth doesn’t come, there are certainly levers we can pull to try to reduce expenses. But the plan is to grow into it and leverage the infrastructure. And as I said, actually, our non-interest expenses, even with that $6 million in there, as a percent of average assets was down a little bit this quarter.
So we’re going to watch them. We’re going to control them, but we’re still expecting to be growing the franchise and taking advantage of opportunities in the marketplace. And that’s always been the plan and continues to be the plan.
Terry McEvoy: And then maybe as a follow-up, the $337 million of CRE growth in the third quarter, help us — can you help us understand how much of that came from, kind of market opportunities, new customers, versus current customers? And how successful have you been in bringing — having them bring over their deposit relationships and business as well?
Richard Murphy: Yeah, I’ll answer that sort of in reverse order. Pretty much any new opportunity that we’re looking at, it’s assumed that we’re going to be getting meaningful deposits, that’s number one. As it relates to the growth, as I said in my comments, the majority of what we’re seeing there are draws on existing facilities that we have with existing customers. But there’s a — probably about 40% of that total comes from opportunities that we’re seeing in the marketplace. As you know, a lot of other banks are really out of that space right now, and there are good opportunities out there for us to bring over clients. So it’s a little bit of a mix, but the majority is still with existing clients and existing outstandings.
Terry McEvoy: Great. Thanks for taking my questions.
Tim Crane: Thanks, Terry.
Operator: Thank you. Our next question comes from the line of David Long of Raymond James.
Tim Crane: Hi, David.
David Long: Good morning, everyone. Thanks for the update on loan growth expectations. It sounds like the pipeline is still pretty good. My question, when I’m looking at the surveys of lenders, there’s not a — does not seem to be a big appetite to lend or much of a demand for loans as there has been. What’s making Wintrust different here? How are you guys able to grow the portfolio when the market may be expecting more of a flattish outlook for loan growth?
Richard Murphy: As we’ve talked about in the past, loan growth comes in many different forms for us. So you go back to a point when we are just out of the pandemic or in the middle of the pandemic and rates were very low, life finance was just going crazy. Now that slowed down. But in the meantime, you have the P&C side kind of filling in that gap. So having a multi-pronged approach to lending really does make a difference for us, in terms of when you have growth in certain areas. But more specifically, as it relates to maybe the core businesses, I would say that we’ve been pretty disciplined about the way our portfolio is constructed. A lot of banks right now would look at their CRE bucket and say it’s probably more than ideal.
