WINTRUST FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - WINTRUST FINANCIAL CORP	a8-kq32017.htm

Exhibit 99.1

Wintrust Financial Corporation

9700 W. Higgins Road, Suite 800, Rosemont, Illinois 60018

News Release




FOR IMMEDIATE RELEASE		October 18, 2017

FOR MORE INFORMATION CONTACT:

Edward J. Wehmer, President & Chief Executive Officer

David A. Dykstra, Senior Executive Vice President & Chief Operating Officer

(847) 939-9000

Web site address: www.wintrust.com

Wintrust Financial Corporation Reports Record Third Quarter 2017 Net Income, an Increase of 24% Over Prior Year, and Year-to-Date 2017 Net Income of $188.9 million, an Increase of 24% Over Prior Year

ROSEMONT, ILLINOIS – Wintrust Financial Corporation (“Wintrust” or “the Company”) (Nasdaq: WTFC) announced net income of $65.6 million or $1.12 per diluted common share for the third quarter of 2017 compared to net income of $64.9 million or $1.11 per diluted common share for the second quarter of 2017 and $53.1 million or $0.92 per diluted common share for the third quarter of 2016. The Company recorded net income of $188.9 million or $3.23 per diluted common share for the first nine months of 2017 compared to net income of $152.3 million or $2.72 per diluted common share for the same period of 2016.

Highlights of the Third Quarter of 2017 *:


•	Total assets increased by $429 million from the prior quarter and now total $27.4 billion.


•	Total deposits increased $289 million to $22.9 billion with non-interest bearing deposit accounts comprising 28% of total deposits.


•	Total loans, excluding covered loans, mortgage loans held-for-sale and mortgage warehouse lines of credit, increased by $210 million from the prior quarter.


•	Net interest margin increased primarily as a result of higher yields, which were positively impacted by the Federal Reserve's rate increase in June of 2017. This increase as well as $935 million of growth in average earning assets since the second quarter of 2017 drove the $11.6 million increase in net interest income over the prior quarter.


•	Return on average assets was 0.96%.


•	Net charge-offs, excluding covered loans, decreased to $4.5 million. Net charge-offs as a percentage of average total loans, excluding covered loans, decreased to eight basis points for the third quarter of 2017 and remained under ten basis points for the year-to-date period.


•	Non-performing loans as a percentage of total loans, excluding covered loans, remained low at 0.37% with the allowance for loan losses as a percentage of total non-performing loans, excluding covered loans, remaining strong at 171%.


•	Mortgage banking revenue decreased $7.8 million compared to the previous quarter due to lower origination volumes and a $2.2 million negative fair value adjustment related to mortgage servicing rights assets compared to an $825,000 positive fair value adjustment in the second quarter of 2017.


•	Reduction in other non-interest income of $4.5 million as the prior quarter benefited from a $4.9 million reduction to the estimated FDIC indemnification liability primarily as a result of an adjustment related to clawback provisions within certain loss-sharing agreements.


•	Opened two new branches on the DePaul University campus in Chicago as well as one new branch in Uptown Milwaukee.

* See "Supplemental Financial Measures/Ratios" on pages 10-11 for more information on non-GAAP measures.

Edward J. Wehmer, President and Chief Executive Officer, commented, “Wintrust reported record net income for the seventh consecutive quarter. We are pleased with the third quarter results despite elevated payoffs and paydowns in our commercial and commercial real estate portfolios, lower revenues from our mortgage banking division and a reduction of our estimated FDIC indemnification liability by $4.9 million that was recorded in our second quarter of 2017. Our ability to generate new retail and commercial deposits was evidenced by a $562 million increase in such deposit balances in the third quarter, which allowed us to reduce our wholesale deposit balances by $272 million. Continued growth of non-interest bearing balances is a positive contribution to our net interest margin as well as a driver to our organic growth, helping offset the rise in our deposit costs during the quarter."

Mr. Wehmer continued, “Excluding covered loans, mortgage loans held-for-sale and mortgage warehouse lines of credit, we grew our loan portfolio by $210 million during the third quarter, which was driven by steady growth in the commercial portfolio as well as the insurance premium finance receivables portfolios. Our loan pipelines remain consistently strong. New loan volumes were consistent with our expectations, but overall portfolio growth was muted by the elevated levels of payoffs and paydowns. The increased loan volume and continued improvement in net interest margin from recent interest rate increases during the period helped net interest income increase by $11.6 million. We remain well positioned for expected rising rates in the future. Strong deposit growth continued in the third quarter of 2017 as deposits increased $289 million and ended at nearly $23 billion as of the end of the third quarter. Total deposit growth included $208 million of growth from demand deposits, which now total $6.5 billion and comprise 28.4% of our overall deposit base."

Commenting on credit quality, Mr. Wehmer noted, “Credit quality metrics remained strong during the third quarter of 2017 and the Company continued its practice of addressing and resolving non-performing credits in a timely fashion. Excluding covered loans, net charge-offs totaled $4.5 million in the current quarter, decreasing $787,000 from the second quarter of 2017. Additionally, net charge-offs as a percentage of average total loans decreased to 0.08% from 0.10% in the second quarter. Total non-performing loans as a percentage of total loans, excluding covered loans, remained at historically low levels at 0.37% at the end of the third quarter of 2017. Total non-performing loans, excluding covered loans, increased $8.9 million. This increase was primarily the result of delayed payment on one $6.7 million credit within the life insurance premium finance receivables portfolio, which is fully secured and not expected to result in any loss, as well as a $3.0 million increase within the commercial insurance premium finance receivables portfolio due to the delayed payment of certain credits, most of which are no longer 90 days past due in October, and the impact of the recent hurricanes in the United States. The remaining loan portfolios were not significantly impacted by these hurricanes and non-performing loans, excluding covered loans, within such portfolios remained stable during the third quarter of 2017. Additionally, the allowance for loan losses as a percentage of non-performing loans, excluding covered loans, remained strong at 171%. We believe that the Company's reserves remain appropriate."

Mr. Wehmer further commented, “Mortgage banking revenue in the third quarter of 2017 totaled $28.2 million, a decrease of $7.8 million compared to the second quarter of 2017. The decreased revenue compared to the the second quarter resulted from origination volumes declining to $956.0 million from $1.1 billion as a result of a decrease in originations related to purchases due to typical seasonality in our market area. Purchases represented 80% of the volume for the third quarter of 2017 compared to 84% in the second quarter of 2017. Revenue for the third quarter of 2017 was also negatively impacted by a $2.2 million negative fair value adjustment on mortgage servicing rights assets compared to an $825,000 positive fair value adjustment in the prior quarter. We expect slightly lower origination volumes in the fourth quarter due to normal seasonality, although our mortgage pipeline remains good. We continue to look for opportunities to further enhance the mortgage banking business both organically and through acquisitions."

Commenting on events subsequent to the end of the third quarter, Mr. Wehmer noted, “On October 16th, Wintrust entered into agreements with the FDIC that terminate all existing loss share agreements related to the acquisitions of eight failed banks in 2010, 2011 and 2012. Under terms of the agreements, we made a net payment of $15.2 million to the FDIC as consideration for the early termination of the loss share agreements resulting in a pre-tax gain of approximately $0.4 million in the fourth quarter. This termination has no effect on yields of the loans that were previously covered under these agreements and will result in the remaining net indemnification liabilities scheduled amortization against earnings not occurring for the remainder of the fourth quarter of 2017 and future periods thereafter. We will be solely responsible for all future charge-offs, recoveries, gains, losses and expenses related to the previously covered assets as the FDIC will no longer share in those amounts."

Turning to the future, Mr. Wehmer stated, “Wintrust continues to take a steady and measured approach to achieving our main objectives of growing franchise value, increasing profitability, leveraging our expense infrastructure and increasing shareholder value. As our growth engine continues its momentum, we expect continued organic growth in all areas of our business while still focusing on expense control. We remain well-positioned for a rising rate environment in the future, which, along with growth, will continue to grow net interest income. We have invested significantly in technology throughout Wintrust and will continue to do so as we grow in order to provide the services needed to our customers. Evaluating strategic acquisitions and organic branch growth will also be a part of our overall growth strategy with the goal of becoming Chicago’s bank and Wisconsin’s bank. Our opportunities for both internal growth and external growth remain consistently strong."

The graphs below illustrate certain highlights of the third quarter of 2017.

Wintrust’s key operating measures and growth rates for the third quarter of 2017, as compared to the sequential and linked quarters, are shown in the table below:



										% or⁽⁴⁾ basis point (bp)change from 2nd Quarter 2017			% or basis point (bp) change from 3rd Quarter 2016
	Three Months Ended
(Dollars in thousands)	September 30, 2017			June 30, 2017			September 30, 2016
Net income	$	65,626		$	64,897		$	53,115		1		%	24	%
Net income per common share – diluted	$	1.12		$	1.11		$	0.92		1		%	22	%
Net revenue ⁽¹⁾	$	295,719		$	294,381		$	271,240		—		%	9	%
Net interest income	$	215,988		$	204,409		$	184,636		6		%	17	%
Net interest margin	3.43		%	3.41		%	3.21		%	2		bp	22	bp
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.46		%	3.43		%	3.24		%	3		bp	22	bp
Net overhead ratio ⁽³⁾	1.53		%	1.44		%	1.44		%	9		bp	9	bp
Return on average assets	0.96		%	1.00		%	0.85		%	(4	)	bp	11	bp
Return on average common equity	9.15		%	9.55		%	8.20		%	(40	)	bp	95	bp
Return on average tangible common equity (non-GAAP) ⁽²⁾	11.39		%	12.02		%	10.55		%	(63	)	bp	84	bp
At end of period
Total assets	$	27,358,162		$	26,929,265		$	25,321,759		6		%	8	%
Total loans, excluding loans held-for-sale, excluding covered loans	20,912,781			20,743,332			19,101,261			3		%	9	%
Total loans, including loans held-for-sale, excluding covered loans	21,283,063			21,126,169			19,660,895			3		%	8	%
Total deposits	22,895,063			22,605,692			21,147,655			5		%	8	%
Total shareholders’ equity	2,908,925			2,839,458			2,674,474			10		%	9	%


(1)	Net revenue is net interest income plus non-interest income.


(2)	See "Supplemental Financial Measures/Ratios" for additional information on this performance measure/ratio.


(3)	The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period's average total assets. A lower ratio indicates a higher degree of efficiency.


(4)	Period-end balance sheet percentage changes are annualized.

Certain returns, yields, performance ratios, or quarterly growth rates are “annualized” in this presentation to represent an annual time period. This is done for analytical purposes to better discern for decision-making purposes underlying performance trends when compared to full-year or year-over-year amounts. For example, a 5% growth rate for a quarter would represent an annualized 20% growth rate. Additional supplemental financial information showing quarterly trends can be found on the Company’s website at www.wintrust.com by choosing “Financial Reports” under the “Investor Relations” heading, and then choosing “Financial Highlights.”

WINTRUST FINANCIAL CORPORATION

Selected Financial Highlights



	Three Months Ended									Nine Months Ended
(Dollars in thousands, except per share data)	September 30, 2017			June 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Selected Financial Condition Data (at end of period):
Total assets	$	27,358,162		$	26,929,265		$	25,321,759
Total loans, excluding loans held-for-sale and covered loans	20,912,781			20,743,332			19,101,261
Total deposits	22,895,063			22,605,692			21,147,655
Junior subordinated debentures	253,566			253,566			253,566
Total shareholders’ equity	2,908,925			2,839,458			2,674,474
Selected Statements of Income Data:
Net interest income	$	215,988		$	204,409		$	184,636		$	612,977		$	531,415
Net revenue ⁽¹⁾	295,719			294,381			271,240			851,445			771,570
Net income	65,626			64,897			53,115			188,901			152,267
Net income per common share – Basic	$	1.14		$	1.15		$	0.96		$	3.34		$	2.84
Net income per common share – Diluted	$	1.12		$	1.11		$	0.92		$	3.23		$	2.72
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin	3.43		%	3.41		%	3.21		%	3.40		%	3.25		%
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.46		%	3.43		%	3.24		%	3.43		%	3.27		%
Non-interest income to average assets	1.17		%	1.39		%	1.38		%	1.22		%	1.35		%
Non-interest expense to average assets	2.70		%	2.83		%	2.82		%	2.74		%	2.81		%
Net overhead ratio ⁽³⁾	1.53		%	1.44		%	1.44		%	1.52		%	1.46		%
Return on average assets	0.96		%	1.00		%	0.85		%	0.97		%	0.85		%
Return on average common equity	9.15		%	9.55		%	8.20		%	9.21		%	8.39		%
Return on average tangible common equity (non-GAAP) ⁽²⁾	11.39		%	12.02		%	10.55		%	11.62		%	10.98		%
Average total assets	$	27,012,295		$	26,050,949		$	24,879,252		$	26,096,809		$	23,849,412
Average total shareholders’ equity	2,882,682			2,800,905			2,651,684			2,808,072			2,502,940
Average loans to average deposits ratio (excluding loans held-for-sale, excluding covered loans)	91.8		%	94.1		%	89.8		%	92.8		%	91.4		%
Average loans to average deposits ratio (excluding loans held-for-sale, including covered loans)	92.1		%	94.4		%	90.3		%	93.0		%	92.0		%
Common Share Data at end of period:
Market price per common share	$	78.31		$	76.44		$	55.57
Book value per common share ⁽²⁾	$	49.86		$	48.73		$	46.86
Tangible common book value per share ⁽²⁾	$	40.53		$	39.40		$	37.06
Common shares outstanding	55,838,063			55,699,927			51,714,683
Other Data at end of period:⁽⁶⁾
Leverage Ratio ⁽⁴⁾	9.2		%	9.2		%	9.0		%
Tier 1 capital to risk-weighted assets ⁽⁴⁾	10.0		%	9.8		%	9.8		%
Common equity Tier 1 capital to risk-weighted assets ⁽⁴⁾	9.5		%	9.3		%	8.7		%
Total capital to risk-weighted assets ⁽⁴⁾	12.1		%	12.0		%	12.1		%
Allowance for credit losses ⁽⁵⁾	$	134,395		$	131,296		$	119,341
Non-performing loans	77,983			69,050			83,128
Allowance for credit losses to total loans ⁽⁵⁾	0.64		%	0.63		%	0.62		%
Non-performing loans to total loans	0.37		%	0.33		%	0.44		%
Number of:
Bank subsidiaries	15			15			15
Banking offices	156			153			152


(1)	Net revenue includes net interest income and non-interest income.


(2)	See “Supplemental Financial Measures/Ratios” for additional information on this performance measure/ratio.


(3)	The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s total average assets. A lower ratio indicates a higher degree of efficiency.


(4)	Capital ratios for current quarter-end are estimated.


(5)	The allowance for credit losses includes both the allowance for loan losses and the allowance for unfunded lending-related commitments, but excludes the allowance for covered loan losses.


(6)	Asset quality ratios exclude covered loans.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION



	(Unaudited)						(Unaudited)
(In thousands)	September 30, 2017			December 31, 2016			September 30, 2016
Assets
Cash and due from banks	$	251,896		$	267,194		$	242,825
Federal funds sold and securities purchased under resale agreements	56			2,851			4,122
Interest bearing deposits with banks	1,218,728			980,457			816,104
Available-for-sale securities, at fair value	1,665,903			1,724,667			1,650,096
Held-to-maturity securities, at amortized cost	819,340			635,705			932,767
Trading account securities	643			1,989			1,092
Federal Home Loan Bank and Federal Reserve Bank stock	87,192			133,494			129,630
Brokerage customer receivables	23,631			25,181			25,511
Mortgage loans held-for-sale	370,282			418,374			559,634
Loans, net of unearned income, excluding covered loans	20,912,781			19,703,172			19,101,261
Covered loans	46,601			58,145			95,940
Total loans	20,959,382			19,761,317			19,197,201
Allowance for loan losses	(133,119		)	(122,291		)	(117,693		)
Allowance for covered loan losses	(758		)	(1,322		)	(1,422		)
Net loans	20,825,505			19,637,704			19,078,086
Premises and equipment, net	609,978			597,301			597,263
Lease investments, net	193,828			129,402			116,355
Accrued interest receivable and other assets	580,612			593,796			660,923
Trade date securities receivable	189,896			—			677
Goodwill	502,021			498,587			485,938
Other intangible assets	18,651			21,851			20,736
Total assets	$	27,358,162		$	25,668,553		$	25,321,759
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	6,502,409		$	5,927,377		$	5,711,042
Interest bearing	16,392,654			15,731,255			15,436,613
Total deposits	22,895,063			21,658,632			21,147,655
Federal Home Loan Bank advances	468,962			153,831			419,632
Other borrowings	251,680			262,486			241,366
Subordinated notes	139,052			138,971			138,943
Junior subordinated debentures	253,566			253,566			253,566
Trade date securities payable	880			—			—
Accrued interest payable and other liabilities	440,034			505,450			446,123
Total liabilities	24,449,237			22,972,936			22,647,285
Shareholders’ Equity:
Preferred stock	125,000			251,257			251,257
Common stock	55,940			51,978			51,811
Surplus	1,519,596			1,365,781			1,356,759
Treasury stock	(4,884		)	(4,589		)	(4,522		)
Retained earnings	1,254,759			1,096,518			1,051,748
Accumulated other comprehensive loss	(41,486		)	(65,328		)	(32,579		)
Total shareholders’ equity	2,908,925			2,695,617			2,674,474
Total liabilities and shareholders’ equity	$	27,358,162		$	25,668,553		$	25,321,759

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



	Three Months Ended									Nine Months Ended
(In thousands, except per share data)	September 30, 2017			June 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Interest income
Interest and fees on loans	$	227,120		$	212,709		$	190,189		$	639,143		$	541,846
Interest bearing deposits with banks	3,272			1,634			1,156			6,529			2,695
Federal funds sold and securities purchased under resale agreements	—			1			1			2			3
Investment securities	16,058			15,524			15,496			45,155			49,084
Trading account securities	8			4			18			23			43
Federal Home Loan Bank and Federal Reserve Bank stock	1,080			1,153			1,094			3,303			3,143
Brokerage customer receivables	150			156			195			473			630
Total interest income	247,688			231,181			208,149			694,628			597,444
Interest expense
Interest on deposits	23,655			18,471			15,621			58,396			41,996
Interest on Federal Home Loan Bank advances	2,151			2,933			2,577			6,674			8,447
Interest on other borrowings	1,482			1,149			1,137			3,770			3,281
Interest on subordinated notes	1,772			1,786			1,778			5,330			5,332
Interest on junior subordinated debentures	2,640			2,433			2,400			7,481			6,973
Total interest expense	31,700			26,772			23,513			81,651			66,029
Net interest income	215,988			204,409			184,636			612,977			531,415
Provision for credit losses	7,896			8,891			9,571			21,996			26,734
Net interest income after provision for credit losses	208,092			195,518			175,065			590,981			504,681
Non-interest income
Wealth management	19,803			19,905			19,334			59,856			56,506
Mortgage banking	28,184			35,939			34,712			86,061			93,254
Service charges on deposit accounts	8,645			8,696			8,024			25,606			23,156
Gain on investment securities, net	39			47			3,305			31			6,070
Fees from covered call options	1,143			890			3,633			2,792			9,994
Trading losses, net	(129		)	(420		)	(432		)	(869		)	(916		)
Operating lease income, net	8,461			6,805			4,459			21,048			11,270
Other	13,585			18,110			13,569			43,943			40,821
Total non-interest income	79,731			89,972			86,604			238,468			240,155
Non-interest expense
Salaries and employee benefits	106,251			106,502			103,718			312,069			300,423
Equipment	9,947			9,909			9,449			28,858			27,523
Operating lease equipment depreciation	6,794			5,662			3,605			17,092			9,040
Occupancy, net	13,079			12,586			12,767			38,766			36,658
Data processing	7,851			7,804			7,432			23,580			21,089
Advertising and marketing	9,572			8,726			7,365			23,448			18,085
Professional fees	6,786			7,510			5,508			18,956			14,986
Amortization of other intangible assets	1,068			1,141			1,085			3,373			3,631
FDIC insurance	3,877			3,874			3,686			11,907			11,339
OREO expense, net	590			739			1,436			2,994			3,344
Other	17,760			19,091			20,564			54,194			55,196
Total non-interest expense	183,575			183,544			176,615			535,237			501,314
Income before taxes	104,248			101,946			85,054			294,212			243,522
Income tax expense	38,622			37,049			31,939			105,311			91,255
Net income	$	65,626		$	64,897		$	53,115		$	188,901		$	152,267
Preferred stock dividends	2,050			2,050			3,628			7,728			10,884
Net income applicable to common shares	$	63,576		$	62,847		$	49,487		$	181,173		$	141,383
Net income per common share - Basic	$	1.14		$	1.15		$	0.96		$	3.34		$	2.84
Net income per common share - Diluted	$	1.12		$	1.11		$	0.92		$	3.23		$	2.72
Cash dividends declared per common share	$	0.14		$	0.14		$	0.12		$	0.42		$	0.36
Weighted average common shares outstanding	55,796			54,775			51,679			54,292			49,763
Dilutive potential common shares	966			1,812			4,047			2,305			3,931
Average common shares and dilutive common shares	56,762			56,587			55,726			56,597			53,694

EARNINGS PER SHARE

The following table shows the computation of basic and diluted earnings per share for the periods indicated:



		Three Months Ended						Nine Months Ended
(In thousands, except per share data)		September 30, 2017		June 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Net income		$	65,626	$	64,897	$	53,115	$	188,901	$	152,267
Less: Preferred stock dividends		2,050		2,050		3,628		7,728		10,884
Net income applicable to common shares—Basic	(A)	63,576		62,847		49,487		181,173		141,383
Add: Dividends on convertible preferred stock, if dilutive		—		—		1,578		1,578		4,735
Net income applicable to common shares—Diluted	(B)	63,576		62,847		51,065		182,751		146,118
Weighted average common shares outstanding	(C)	55,796		54,775		51,679		54,292		49,763
Effect of dilutive potential common shares:
Common stock equivalents		966		927		938		988		822
Convertible preferred stock, if dilutive		—		885		3,109		1,317		3,109
Weighted average common shares and effect of dilutive potential common shares	(D)	56,762		56,587		55,726		56,597		53,694
Net income per common share:
Basic	(A/C)	$	1.14	$	1.15	$	0.96	$	3.34	$	2.84
Diluted	(B/D)	$	1.12	$	1.11	$	0.92	$	3.23	$	2.72

Potentially dilutive common shares can result from stock options, restricted stock unit awards, stock warrants, the Company’s convertible preferred stock and shares to be issued under the Employee Stock Purchase Plan and the Directors Deferred Fee and Stock Plan, being treated as if they had been either exercised or issued, computed by application of the treasury stock method. While potentially dilutive common shares are typically included in the computation of diluted earnings per share, potentially dilutive common shares are excluded from this computation in periods in which the effect would reduce the loss per share or increase the income per share. For diluted earnings per share, net income applicable to common shares can be affected by the conversion of the Company’s convertible preferred stock. Where the effect of this conversion would reduce the loss per share or increase the income per share for a period, net income applicable to common shares is not adjusted by the associated preferred dividends. On April 25, 2017, 2,073 shares of the Series C Preferred Stock were converted at the option of the respective holder into 51,244 shares of the Company's common stock, pursuant to the terms of the Series C Preferred Stock. On April 27, 2017, the Company caused a mandatory conversion of its outstanding 124,184 shares of Series C Preferred Stock into 3,069,828 shares of the Company's common stock at a conversion rate of 24.72 shares of common stock per share of Series C Preferred Stock. Cash was paid in lieu of fractional shares for an amount considered insignificant.

SUPPLEMENTAL FINANCIAL MEASURES/RATIOS

The accounting and reporting policies of Wintrust conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company’s performance. These include taxable-equivalent net interest income (including its individual components), taxable-equivalent net interest margin (including its individual components), the taxable-equivalent efficiency ratio, tangible common equity ratio, tangible common book value per share and return on average tangible common equity. Management believes that these measures and ratios provide users of the Company’s financial information a more meaningful view of the performance of the Company's interest-earning assets and interest-bearing liabilities and of the Company’s operating efficiency. Other financial holding companies may define or calculate these measures and ratios differently.

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent (“FTE”) basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a FTE basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses), measures how much it costs to produce one dollar of revenue. Securities gains or losses are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible

common equity ratio and tangible book value per common share as useful measurements of the Company’s equity. The Company references the return on average tangible common equity as a measurement of profitability.

The following table presents a reconciliation of certain non-GAAP performance measures and ratios used by the Company to evaluate and measure the Company’s performance to the most directly comparable GAAP financial measures for the last five quarters.



	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
(Dollars and shares in thousands)	2017			2017			2017			2016			2016			2017			2016
Calculation of Net Interest Margin and Efficiency Ratio
(A) Interest Income (GAAP)	$	247,688		$	231,181		$	215,759		$	215,013		$	208,149		$	694,628		$	597,444
Taxable-equivalent adjustment:
- Loans	1,033			831			790			666			584			2,654			1,616
- Liquidity Management Assets	921			866			907			815			963			2,694			2,815
- Other Earning Assets	5			2			5			17			9			12			23
(B) Interest Income - FTE	$	249,647		$	232,880		$	217,461		$	216,511		$	209,705		$	699,988		$	601,898
(C) Interest Expense (GAAP)	31,700			26,772			23,179			24,235			23,513			81,651			66,029
(D) Net Interest Income - FTE (B minus C)	$	217,947		$	206,108		$	194,282		$	192,276		$	186,192		$	618,337		$	535,869
(E) Net Interest Income (GAAP) (A minus C)	$	215,988		$	204,409		$	192,580		$	190,778		$	184,636		$	612,977		$	531,415
Net interest margin (GAAP-derived)	3.43		%	3.41		%	3.36		%	3.21		%	3.21		%	3.40		%	3.25		%
Net interest margin - FTE	3.46		%	3.43		%	3.39		%	3.23		%	3.24		%	3.43		%	3.27		%
(F) Non-interest income	$	79,731		$	89,972		$	68,765		$	85,275		$	86,604		$	238,468		$	240,155
(G) Gains (losses) on investment securities, net	39			47			(55		)	1,575			3,305			31			6,070
(H) Non-interest expense	183,575			183,544			168,118			180,371			176,615			535,237			501,314
Efficiency ratio (H/(E+F-G))	62.09		%	62.36		%	64.31		%	65.71		%	65.92		%	62.86		%	65.49		%
Efficiency ratio - FTE (H/(D+F-G))	61.68		%	62.00		%	63.90		%	65.36		%	65.54		%	62.47		%	65.11		%
Calculation of Tangible Common Equity ratio (at period end)
Total shareholders’ equity	$	2,908,925		$	2,839,458		$	2,764,983		$	2,695,617		$	2,674,474
(I) Less: Convertible preferred stock	—			—			(126,257		)	(126,257		)	(126,257		)
Less: Non-convertible preferred stock	(125,000		)	(125,000		)	(125,000		)	(125,000		)	(125,000		)
Less: Intangible assets	(520,672		)	(519,806		)	(520,028		)	(520,438		)	(506,674		)
(J) Total tangible common shareholders’ equity	$	2,263,253		$	2,194,652		$	1,993,698		$	1,923,922		$	1,916,543
Total assets	$	27,358,162		$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759
Less: Intangible assets	(520,672		)	(519,806		)	(520,028		)	(520,438		)	(506,674		)
(K) Total tangible assets	$	26,837,490		$	26,409,459		$	25,258,865		$	25,148,115		$	24,815,085
Tangible common equity ratio (J/K)	8.4		%	8.3		%	7.9		%	7.7		%	7.7		%
Tangible common equity ratio, assuming full conversion of convertible preferred stock ((J-I)/K)	8.4		%	8.3		%	8.4		%	8.2		%	8.2		%
Calculation of book value per share
Total shareholders’ equity	$	2,908,925		$	2,839,458		$	2,764,983		$	2,695,617		$	2,674,474
Less: Preferred stock	(125,000		)	(125,000		)	(251,257		)	(251,257		)	(251,257		)
(L) Total common equity	$	2,783,925		$	2,714,458		$	2,513,726		$	2,444,360		$	2,423,217
(M) Actual common shares outstanding	55,838			55,700			52,504			51,881			51,715
Book value per common share (L/M)	$	49.86		$	48.73		$	47.88		$	47.12		$	46.86
Tangible common book value per share (J/M)	$	40.53		$	39.40		$	37.97		$	37.08		$	37.06



Calculation of return on average common equity
(N) Net income applicable to common shares	63,576		62,847		54,750		50,979		49,487		181,173		141,383
Add: After-tax intangible asset amortization	672		726		771		716		677		2,169		2,270
(O) Tangible net income applicable to common shares	64,248		63,573		55,521		51,695		50,164		183,342		143,653
Total average shareholders' equity	2,882,682		2,800,905		2,739,050		2,689,876		2,651,684		2,808,072		2,502,940
Less: Average preferred stock	(125,000	)	(161,028	)	(251,257	)	(251,257	)	(251,257	)	(178,632	)	(251,259	)
(P) Total average common shareholders' equity	2,757,682		2,639,877		2,487,793		2,438,619		2,400,427		2,629,440		2,251,681
Less: Average intangible assets	(520,333	)	(519,340	)	(520,346	)	(513,017	)	(508,812	)	(520,006	)	(503,966	)
(Q) Total average tangible common shareholders’ equity	2,237,349		2,120,537		1,967,447		1,925,602		1,891,615		2,109,434		1,747,715
Return on average common equity, annualized (N/P)	9.15	%	9.55	%	8.93	%	8.32	%	8.20	%	9.21	%	8.39	%
Return on average tangible common equity, annualized (O/Q)	11.39	%	12.02	%	11.44	%	10.68	%	10.55	%	11.62	%	10.98	%

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking segment, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the third quarter of 2017, profitability within this franchise was primarily driven by increased net interest income due to a higher net interest margin, partially offset by lower revenue from the mortgage banking business. The net interest margin increased in the third quarter of 2017 compared to the second quarter of 2017 primarily as a result of higher yields on the commercial loan portfolio (excluding lease loans) and the commercial real estate loan portfolio, partially offset by higher rates on interest-bearing deposits. Mortgage banking revenue decreased by $7.8 million from $35.9 million for the second quarter of 2017 to $28.2 million for the third quarter of 2017. The lower revenue was primarily due to originations during the current period decreasing to $956.0 million from $1.1 billion in the second quarter of 2017 as a result of typical seasonality in our market area and a $2.2 million negative fair value adjustment related to mortgage servicing rights assets compared to an $825,000 positive fair value adjustment in the second quarter of 2017. Purchases represented 80% of loan origination volume for the third quarter of 2017. The Company's gross commercial and commercial real estate loan pipelines remain strong. Before the impact of scheduled payments and prepayments, at September 30, 2017, gross commercial and commercial real estate loan pipelines totaled $1.1 billion, or $714.7 million when adjusted for the probability of closing, compared to $1.2 billion, or $796.8 million when adjusted for the probability of closing, at June 30, 2017.

Specialty Finance

Through its specialty finance segment, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries and accounts receivable financing, value-added, out-sourced administrative services, and other services. In the third quarter of 2017, the specialty finance unit experienced higher revenue as a result of increased volumes and higher yields within its insurance premium financing receivables portfolio. Originations of $1.8 billion during the third quarter of 2017 resulted in a $284.0 million increase in average balances. The increase in average balances along with higher yields on these loans resulted in a $5.0 million increase in interest income attributed to this portfolio. The Company's leasing business continued to grow during the third quarter of 2017, increasing its portfolio of assets, including capital leases, loans and equipment on operating leases, to $916.1 million at the end of the third quarter of 2017. Revenues from the Company's out-sourced administrative services business remained steady, totaling approximately $1.1 million and $1.0 million in the third quarter of 2017 and second quarter of 2017, respectively.

Wealth Management

Through its wealth management segment, the Company offers a full range of wealth management services through three separate subsidiaries: trust and investment services, asset management, securities brokerage services and 401(k) and retirement plan services. At September 30, 2017, the Company’s wealth management subsidiaries had approximately $24.5 billion of assets under administration, which includes $2.7 billion of assets owned by the Company and its subsidiary banks, representing a $1.2 billion increase from the $23.3 billion of assets under administration at June 30, 2017. This growth in assets under administration was positive across the various services offered.

LOANS

Loan Portfolio Mix and Growth Rates



										% Growth
(Dollars in thousands)	September 30, 2017			December 31, 2016			September 30, 2016			From ⁽¹⁾December 31, 2016		From September 30, 2016
Balance:
Commercial	$	6,456,034		$	6,005,422		$	5,951,544		10	%	8	%
Commercial real estate	6,400,781			6,196,087			5,908,684			4		8
Home equity	672,969			725,793			742,868			(10	)	(9	)
Residential real estate	789,499			705,221			663,598			16		19
Premium finance receivables - commercial	2,664,912			2,478,581			2,430,233			10		10
Premium finance receivables - life insurance	3,795,474			3,470,027			3,283,359			13		16
Consumer and other	133,112			122,041			120,975			12		10
Total loans, net of unearned income, excluding covered loans	$	20,912,781		$	19,703,172		$	19,101,261		8	%	9	%
Covered loans	46,601			58,145			95,940			(27	)	(51	)
Total loans, net of unearned income	$	20,959,382		$	19,761,317		$	19,197,201		8	%	9	%
Mix:
Commercial	31		%	30		%	31		%
Commercial real estate	31			31			31
Home equity	3			4			4
Residential real estate	3			4			3
Premium finance receivables - commercial	13			12			13
Premium finance receivables - life insurance	18			18			17
Consumer and other	1			1			1
Total loans, net of unearned income, excluding covered loans	100		%	100		%	100		%
Covered loans	—			—			—
Total loans, net of unearned income	100		%	100		%	100		%


(1)	Annualized

Commercial and Commercial Real Estate Loan Portfolios



	As of September 30, 2017
			% of Total Balance		Nonaccrual		> 90 Days Past Due and Still Accruing		Allowance For Loan Losses Allocation

(Dollars in thousands)	Balance
Commercial:
Commercial, industrial and other	$	4,120,533	32.0	%	$	12,281	$	—	$	38,708
Franchise	853,716		6.6		—		—		6,154
Mortgage warehouse lines of credit	194,370		1.5		—		—		1,438
Asset-based lending	896,336		7.0		1,141		—		7,683
Leases	381,394		3.0		509		—		1,208
PCI - commercial loans ⁽¹⁾	9,685		0.1		—		1,489		544
Total commercial	$	6,456,034	50.2	%	$	13,931	$	1,489	$	55,735
Commercial Real Estate:
Construction	$	673,977	5.2	%	$	1,607	$	—	$	7,565
Land	102,753		0.8		196		—		3,354
Office	880,951		6.9		5,148		—		6,249
Industrial	836,485		6.5		1,848		—		5,538
Retail	934,239		7.3		2,200		—		6,107
Multi-family	864,985		6.7		569		—		8,873
Mixed use and other	1,974,315		15.4		3,310		—		14,270
PCI - commercial real estate ⁽¹⁾	133,076		1.0		—		8,443		84
Total commercial real estate	$	6,400,781	49.8	%	$	14,878	$	8,443	$	52,040
Total commercial and commercial real estate	$	12,856,815	100.0	%	$	28,809	$	9,932	$	107,775

Commercial real estate - collateral location by state:
Illinois	$	4,981,379	77.8	%
Wisconsin	683,229		10.7
Total primary markets	$	5,664,608	88.5	%
Indiana	140,749		2.2
Florida	114,599		1.8
Arizona	58,192		0.9
Michigan	44,664		0.7
California	36,366		0.6
Other (no individual state greater than 0.6%)	341,603		5.3
Total	$	6,400,781	100.0	%


(1)	Purchased credit impaired ("PCI") loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30. Loan agings are based upon contractually required payments.

DEPOSITS

Deposit Portfolio Mix and Growth Rates



										% Growth
(Dollars in thousands)	September 30, 2017			December 31, 2016			September 30, 2016			From ⁽¹⁾December 31, 2016		From September 30, 2016
Balance:
Non-interest bearing	$	6,502,409		$	5,927,377		$	5,711,042		13	%	14	%
NOW and interest bearing demand deposits	2,273,025			2,624,442			2,552,611			(18	)	(11	)
Wealth management deposits ⁽²⁾	2,171,758			2,209,617			2,283,233			(2	)	(5	)
Money market	4,607,995			4,441,811			4,421,631			5		4
Savings	2,673,201			2,180,482			1,977,661			30		35
Time certificates of deposit	4,666,675			4,274,903			4,201,477			12		11
Total deposits	$	22,895,063		$	21,658,632		$	21,147,655		8	%	8	%
Mix:
Non-interest bearing	28		%	27		%	27		%
NOW and interest bearing demand deposits	10			12			12
Wealth management deposits ⁽²⁾	10			10			11
Money market	20			21			21
Savings	12			10			9
Time certificates of deposit	20			20			20
Total deposits	100		%	100		%	100		%


(1)	Annualized


(2)	Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wayne Hummer Investments, trust and asset management customers of the Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts.

Time Certificates of Deposit

Maturity/Re-pricing Analysis

As of September 30, 2017



(Dollars in thousands)	CDARs & Brokered Certificates of Deposit ⁽¹⁾		MaxSafe Certificates of Deposit ⁽¹⁾		Variable Rate Certificates of Deposit ⁽²⁾		Other Fixed Rate Certificates of Deposit ⁽¹⁾		Total Time Certificates of Deposit		Weighted-Average Rate of Maturing Time Certificates of Deposit ⁽³⁾
1-3 months	$	1,253	$	40,644	$	128,579	$	851,813	$	1,022,289	0.84	%
4-6 months	1,493		28,487		—		892,779		922,759		0.97	%
7-9 months	59,737		16,700		—		736,366		812,803		1.05	%
10-12 months	—		20,191		—		592,693		612,884		1.02	%
13-18 months	—		13,716		—		765,773		779,489		1.28	%
19-24 months	249		11,431		—		208,626		220,306		1.43	%
24+ months	1,000		15,892		—		279,253		296,145		1.50	%
Total	$	63,732	$	147,061	$	128,579	$	4,327,303	$	4,666,675	1.07	%


(1)	This category of certificates of deposit is shown by contractual maturity date.


(2)	This category includes variable rate certificates of deposit and savings certificates with the majority repricing on at least a monthly basis.


(3)	Weighted-average rate excludes the impact of purchase accounting fair value adjustments.

NET INTEREST INCOME

The following table presents a summary of Wintrust’s average balances, net interest income and related net interest margins, calculated on a fully tax-equivalent basis, for the third quarter of 2017 compared to the second quarter of 2017 (sequential quarters) and third quarter of 2016 (linked quarters), respectively:



	Average Balance for three months ended,									Interest for three months ended,									Yield/Rate for three months ended,
(Dollars in thousands)	September 30, 2017			June 30, 2017			September 30, 2016			September 30, 2017			June 30, 2017			September 30, 2016			September 30, 2017		June 30, 2017		September 30, 2016
Interest-bearing deposits with banks and cash equivalents⁽¹⁾	$	1,003,572		$	722,349		$	851,385		$	3,272		$	1,635		$	1,157		1.29	%	0.91	%	0.54	%
Investment securities	2,652,119			2,572,619			2,692,691			16,979			16,390			16,459			2.54		2.55		2.43
FHLB and FRB stock	81,928			99,438			127,501			1,080			1,153			1,094			5.23		4.66		3.41
Liquidity management assets⁽²⁾⁽⁷⁾	$	3,737,619		$	3,394,406		$	3,671,577		$	21,331		$	19,178		$	18,710		2.26	%	2.27	%	2.03	%
Other earning assets^(2)(3)(7)	25,844			25,749			29,875			163			162			222			2.49		2.53		2.96
Loans, net of unearned income^(2)(4)(7)	21,195,222			20,599,718			19,071,621			227,553			212,892			189,637			4.26		4.15		3.96
Covered loans	48,415			51,823			101,570			600			648			1,136			4.91		5.01		4.45
Total earning assets⁽⁷⁾	$	25,007,100		$	24,071,696		$	22,874,643		$	249,647		$	232,880		$	209,705		3.96	%	3.88	%	3.65	%
Allowance for loan and covered loan losses	(135,519		)	(132,053		)	(121,156		)
Cash and due from banks	242,186			242,495			240,239
Other assets	1,898,528			1,868,811			1,885,526
Total assets	$	27,012,295		$	26,050,949		$	24,879,252

Interest-bearing deposits	$	16,291,891		$	15,621,674		$	15,117,102		$	23,655		$	18,471		$	15,621		0.58	%	0.47	%	0.41	%
Federal Home Loan Bank advances	324,996			689,600			459,198			2,151			2,933			2,577			2.63		1.71		2.23
Other borrowings	268,850			240,547			249,307			1,482			1,149			1,137			2.19		1.92		1.81
Subordinated notes	139,035			139,007			138,925			1,772			1,786			1,778			5.10		5.14		5.12
Junior subordinated debentures	253,566			253,566			253,566			2,640			2,433			2,400			4.07		3.80		3.70
Total interest-bearing liabilities	$	17,278,338		$	16,944,394		$	16,218,098		$	31,700		$	26,772		$	23,513		0.73	%	0.63	%	0.58	%
Non-interest bearing deposits	6,419,326			5,904,679			5,566,983
Other liabilities	431,949			400,971			442,487
Equity	2,882,682			2,800,905			2,651,684
Total liabilities and shareholders’ equity	$	27,012,295		$	26,050,949		$	24,879,252
Interest rate spread⁽⁵⁾⁽⁷⁾																			3.23	%	3.25	%	3.07	%
Less: Fully tax-equivalent adjustment										(1,959		)	(1,699		)	(1,556		)	(0.03	)	(0.02	)	(0.03	)
Net free funds/contribution⁽⁶⁾	$	7,728,762		$	7,127,302		$	6,656,545											0.23		0.18		0.17
Net interest income/ margin⁽⁷⁾(GAAP)										$	215,988		$	204,409		$	184,636		3.43	%	3.41	%	3.21	%
Fully tax-equivalent adjustment										1,959			1,699			1,556			0.03		0.02		0.03
Net interest income/ margin - FTE ⁽⁷⁾										$	217,947		$	206,108		$	186,192		3.46	%	3.43	%	3.24	%


(1)	Includes interest-bearing deposits from banks, federal funds sold and securities purchased under resale agreements.


(2)	Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016 were $2.0 million, $1.7 million and $1.6 million, respectively.


(3)	Other earning assets include brokerage customer receivables and trading account securities.


(4)	Loans, net of unearned income, include loans held-for-sale and non-accrual loans.


(5)	Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.


(6)	Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.


(7)	See “Supplemental Financial Measures/Ratios” for additional information on this performance ratio.

For the third quarter of 2017, net interest income totaled $216.0 million, an increase of $11.6 million as compared to the second quarter of 2017 and an increase of $31.4 million as compared to the third quarter of 2016. Net interest margin was 3.43% (3.46% on a fully tax-equivalent basis) during the third quarter of 2017 compared to 3.41% (3.43% on a fully tax-equivalent basis) during the second quarter of 2017 and 3.21% (3.24% on a fully tax-equivalent basis) during the third quarter of 2016.

The following table presents a summary of Wintrust's average balances, net interest income and related interest margins, calculated on a fully tax-equivalent basis, for nine months ended September 30, 2017 compared to nine months ended September 30, 2016:



	Average Balance for nine months ended,						Interest for nine months ended,						Yield/Rate for nine months ended,
(Dollars in thousands)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			September 30, 2017		September 30, 2016
Interest-bearing deposits with banks and cash equivalents ⁽¹⁾	$	836,373		$	688,208		$	6,531		$	2,699		1.04	%	0.52	%
Investment securities	2,541,061			2,656,969			47,849			51,898			2.52		2.61
FHLB and FRB stock	91,774			117,198			3,303			3,143			4.81		3.58
Liquidity management assets⁽²⁾⁽⁷⁾	$	3,469,208		$	3,462,375		$	57,683		$	57,740		2.22	%	2.23	%
Other earning assets^(2)(3)(7)	25,612			29,457			508			696			2.65		3.16
Loans, net of unearned income^(2)(4)(7)	20,577,507			18,264,545			639,632			538,833			4.16		3.94
Covered loans	52,339			117,427			2,165			4,629			5.53		5.27
Total earning assets⁽⁷⁾	$	24,124,666		$	21,873,804		$	699,988		$	601,898		3.88	%	3.68	%
Allowance for loan and covered loan losses	(131,695		)	(116,739		)
Cash and due from banks	238,136			257,443
Other assets	1,865,702			1,834,904
Total assets	$	26,096,809		$	23,849,412

Interest-bearing deposits	$	15,796,434		$	14,303,125		$	58,396		$	41,996		0.49	%	0.39	%
Federal Home Loan Bank advances	399,171			742,423			6,674			8,447			2.24		1.52
Other borrowings	254,854			251,633			3,770			3,281			1.98		1.74
Subordinated notes	139,008			138,898			5,330			5,332			5.11		5.12
Junior subordinated debentures	253,566			254,935			7,481			6,973			3.89		3.59
Total interest-bearing liabilities	$	16,843,033		$	15,691,014		$	81,651		$	66,029		0.65	%	0.56	%
Non-interest bearing deposits	6,039,329			5,244,552
Other liabilities	406,375			410,906
Equity	2,808,072			2,502,940
Total liabilities and shareholders’ equity	$	26,096,809		$	23,849,412
Interest rate spread⁽⁵⁾⁽⁷⁾													3.23	%	3.12	%
Less: Fully tax-equivalent adjustment							(5,360		)	(4,454		)	(0.03	)	(0.02	)
Net free funds/contribution⁽⁶⁾	$	7,281,633		$	6,182,790								0.20		0.15
Net interest income/ margin⁽⁷⁾(GAAP)							$	612,977		$	531,415		3.40	%	3.25	%
Fully tax-equivalent adjustment							5,360			4,454			0.03		0.02
Net interest income/ margin - FTE ⁽⁷⁾							$	618,337		$	535,869		3.43	%	3.27	%


(1)	Includes interest-bearing deposits from banks, federal funds sold and securities purchased under resale agreements.


(2)	Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for nine months ended September 30, 2017 and 2016 were $5.4 million and $4.5 million respectively.


(3)	Other earning assets include brokerage customer receivables and trading account securities.


(4)	Loans, net of unearned income, include loans held-for-sale and non-accrual loans.


(5)	Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.


(6)	Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.


(7)	See “Supplemental Financial Measures/Ratios” for additional information on this performance ratio.

For the first nine months of 2017 net interest income totaled $613.0 million, an increase of $81.6 million as compared to the first nine months of 2016. Net interest margin was 3.40% (3.43% on a fully tax-equivalent basis) for the first nine months of 2017 compared to 3.25% (3.27% on a fully tax-equivalent basis) for the first nine months of 2016.

Interest Rate Sensitivity

As an ongoing part of its financial strategy, the Company attempts to manage the impact of fluctuations in market interest rates on net interest income. Management measures its exposure to changes in interest rates by modeling many different interest rate scenarios.

The following interest rate scenarios display the percentage change in net interest income over a one-year time horizon assuming increases of 100 and 200 basis points and a decrease of 100 basis points. The Static Shock Scenario results incorporate actual cash flows and repricing characteristics for balance sheet instruments following an instantaneous, parallel change in market rates based upon a static (i.e. no growth or constant) balance sheet. Conversely, the Ramp Scenario results incorporate management’s projections of future volume and pricing of each of the product lines following a gradual, parallel change in market rates over twelve months. Actual results may differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies. The interest rate sensitivity for both the Static Shock and Ramp Scenario at September 30, 2017, June 30, 2017 and September 30, 2016 is as follows:




Static Shock Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
September 30, 2017	19.5	%	9.8	%	(12.9	)%
June 30, 2017	19.3	%	10.4	%	(13.5	)%
September 30, 2016	19.6	%	10.1	%	(10.4	)%



Ramp Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
September 30, 2017	9.0	%	4.6	%	(5.3	)%
June 30, 2017	7.8	%	4.0	%	(4.6	)%
September 30, 2016	7.8	%	3.9	%	(4.1	)%

These results indicate that the Company has positioned its balance sheet to benefit from a rise in interest rates. This analysis also indicates that the Company would benefit to a greater magnitude should a rise in interest rates be significant (i.e., 200 basis points) and immediate (Static Shock Scenario).

Maturities and Sensitivities of Loans to Changes in Interest Rates

The following table classifies the loan portfolio, excluding covered loans, at September 30, 2017 by date at which the loans reprice or mature, and the type of rate exposure:



As of September 30, 2017	One year or less		From one to five years		Over five years
(Dollars in thousands)	One year or less		From one to five years		Over five years		Total
Commercial
Fixed rate	$	173,603	$	668,211	$	442,587	$	1,284,401
Variable rate	5,163,750		6,042		1,841		5,171,633
Total commercial	$	5,337,353	$	674,253	$	444,428	$	6,456,034
Commercial real estate
Fixed rate	405,258		1,769,399		263,307		2,437,964
Variable rate	3,932,069		30,085		663		3,962,817
Total commercial real estate	$	4,337,327	$	1,799,484	$	263,970	$	6,400,781
Home equity
Fixed rate	8,126		4,047		62,070		74,243
Variable rate	598,726		—		—		598,726
Total home equity	$	606,852	$	4,047	$	62,070	$	672,969
Residential real estate
Fixed rate	45,854		30,097		143,789		219,740
Variable rate	54,908		197,720		317,131		569,759
Total residential real estate	$	100,762	$	227,817	$	460,920	$	789,499
Premium finance receivables - commercial
Fixed rate	2,575,106		89,806		—		2,664,912
Variable rate	—		—		—		—
Total premium finance receivables - commercial	$	2,575,106	$	89,806	$	—	$	2,664,912
Premium finance receivables - life insurance
Fixed rate	11,659		33,294		7,082		52,035
Variable rate	3,743,439		—		—		3,743,439
Total premium finance receivables - life insurance	$	3,755,098	$	33,294	$	7,082	$	3,795,474
Consumer and other
Fixed rate	71,223		14,930		3,178		89,331
Variable rate	43,781		—		—		43,781
Total consumer and other	$	115,004	$	14,930	$	3,178	$	133,112
Total per category
Fixed rate	3,290,829		2,609,784		922,013		6,822,626
Variable rate	13,536,673		233,847		319,635		14,090,155
Total loans, net of unearned income, excluding covered loans	$	16,827,502	$	2,843,631	$	1,241,648	$	20,912,781
Variable Rate Loan Pricing by Index:
Prime	$	2,891,012
One- month LIBOR	6,631,241
Three- month LIBOR	473,085
Twelve- month LIBOR	3,663,204
Other	431,613
Total variable rate	$	14,090,155

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to LIBOR indices which, as shown in the table above, do not mirror the same increases as the prime rate or the federal funds rate when the Federal Reserve raises interest rates. Specifically, the Company has $6.6 billion of variable rate loans tied to one-month LIBOR and $3.7 billion of variable rate loans tied to twelve-month LIBOR. The above chart shows that the Federal Reserve raised interest rates by 25 bps in the fourth quarter of 2016, and the first and second quarters of 2017, and during those periods one-month LIBOR increased by 24 bps, 21 bps and 24 bps respectively, while twelve-month LIBOR increased by 14 bps and 11 bps and then decreased by 6 bps in the second quarter of 2017. The Federal Reserve did not raise interest rates during the third quarter of 2017. During that period, one-month LIBOR increased by 1bp and and twelve-month LIBOR increased by 4 bps.

NON-INTEREST INCOME

The following table presents non-interest income by category for the periods presented:



	Three Months Ended
	September 30,			June 30,			September 30,			Q3 2017 compared to Q2 2017					Q3 2017 compared to Q3 2016
(Dollars in thousands)	2017			2017			2016			$ Change			% Change		$ Change			% Change
Brokerage	$	5,127		$	5,449		$	6,752		$	(322	)	(6	)%	$	(1,625	)	(24	)%
Trust and asset management	14,676			14,456			12,582			220			2		2,094			17
Total wealth management	19,803			19,905			19,334			(102		)	(1	)	469			2
Mortgage banking	28,184			35,939			34,712			(7,755		)	(22	)	(6,528		)	(19	)
Service charges on deposit accounts	8,645			8,696			8,024			(51		)	(1	)	621			8
Gains on investment securities, net	39			47			3,305			(8		)	(17	)	(3,266		)	(99	)
Fees from covered call options	1,143			890			3,633			253			28		(2,490		)	(69	)
Trading losses, net	(129		)	(420		)	(432		)	291			(69	)	303			(70	)
Operating lease income, net	8,461			6,805			4,459			1,656			24		4,002			90
Other:
Interest rate swap fees	1,762			2,221			2,881			(459		)	(21	)	(1,119		)	(39	)
BOLI	897			888			884			9			1		13			1
Administrative services	1,052			986			1,151			66			7		(99		)	(9	)
Early pay-offs of leases	—			10			—			(10		)	(100	)	—			NM
Miscellaneous	9,874			14,005			8,653			(4,131		)	(29	)	1,221			14
Total Other	13,585			18,110			13,569			(4,525		)	(25	)	16			—
Total Non-Interest Income	$	79,731		$	89,972		$	86,604		$	(10,241	)	(11	)%	$	(6,873	)	(8	)%

NM - Not Meaningful



	Nine Months Ended
	September 30,			September 30,			$			%
(Dollars in thousands)	2017			2016			Change			Change
Brokerage	$	16,796		$	19,111		$	(2,315	)	(12	)%
Trust and asset management	43,060			37,395			5,665			15
Total wealth management	59,856			56,506			3,350			6
Mortgage banking	86,061			93,254			(7,193		)	(8	)
Service charges on deposit accounts	25,606			23,156			2,450			11
Gains on investment securities, net	31			6,070			(6,039		)	(99	)
Fees from covered call options	2,792			9,994			(7,202		)	(72	)
Trading losses, net	(869		)	(916		)	47			(5	)
Operating lease income, net	21,048			11,270			9,778			87
Other:
Interest rate swap fees	5,416			9,154			(3,738		)	(41	)
BOLI	2,770			2,613			157			6
Administrative services	3,062			3,294			(232		)	(7	)
Gain on extinguishment of debt	—			4,305			(4,305		)	NM
Early pay-offs of leases	1,221			—			1,221			NM
Miscellaneous	31,474			21,455			10,019			47
Total Other	43,943			40,821			3,122			8
Total Non-Interest Income	$	238,468		$	240,155		$	(1,687	)	(1	)%

NM - Not Meaningful

Notable contributions to the change in non-interest income are as follows:

The decrease in wealth management revenue during the current period as compared to the second quarter of 2017 resulted from lower customer trading activity in the current quarter. The increase in wealth management revenue during the current period as compared to the third quarter of 2016 is primarily attributable to growth in assets under management due to new customers. Wealth management revenue is comprised of the trust and asset management revenue of The Chicago Trust Company and Great Lakes Advisors and the brokerage commissions, managed money fees and insurance product commissions at Wayne Hummer Investments.

The decrease in mortgage banking revenue in the current quarter as compared to the second quarter of 2017 resulted primarily from lower origination volumes and a $2.2 million negative fair value adjustment related to mortgage servicing rights assets (compared to an $825,000 positive fair value adjustment in the second quarter of 2017). Mortgage loans originated or purchased for sale decreased during the current quarter, totaling $956.0 million in the third quarter of 2017 as compared to $1.1 billion in the second quarter of 2017 and $1.3 billion in the third quarter of 2016. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. Mortgage revenue is also impacted by changes in the fair value of mortgage servicing rights as the Company does not hedge this change in fair value. The Company typically originates mortgage loans held-for-sale with associated mortgage servicing rights retained or released. The Company records mortgage servicing rights at fair value on a recurring basis. The table below presents additional selected information regarding mortgage banking revenue for the respective periods.



	Three Months Ended									Nine Months Ended
(Dollars in thousands)	September 30, 2017			June 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Retail originations	$	809,961		963,396			$	1,138,571		$	2,398,328		$	2,978,643
Correspondent originations	145,999			170,862			121,007			414,357			229,825
Total originations (A)	$	955,960		1,134,258			$	1,259,578		$	2,812,685		$	3,208,468

Purchases as a percentage of originations	80		%	84		%	57		%	78		%	60		%
Refinances as a percentage of originations	20			16			43			22			40
Total	100		%	100		%	100		%	100		%	100		%

Production revenue (B) ⁽¹⁾	$	24,038		$	28,140		$	32,889		$	69,855		$	85,040
Production margin (B / A)	2.51		%	2.48		%	2.61		%	2.48		%	2.65		%

Loans serviced for others (C)	$	2,622,411		$	2,303,435		$	1,508,469
Mortgage servicing rights, at fair value (D)	29,414			27,307			13,901
Percentage of mortgage servicing rights to loans serviced for others (D / C)	1.12		%	1.19		%	0.92		%


(1)	Production revenue represents revenue earned from the origination and subsequent sale of mortgages, including gains on loans sold and fees from originations, processing and other related activities, and excludes servicing fees, changes in the fair value of servicing rights and changes to the mortgage recourse obligation.

The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio by using fees generated from these options to compensate for net interest margin compression. These option transactions are designed to mitigate overall interest rate risk and do not qualify as hedges pursuant to accounting guidance. Fees from covered call options decreased in the current quarter compared to the third quarter of 2016, primarily as a result of selling call options against a smaller value of underlying securities resulting in lower premiums received by the Company. There were no outstanding call option contracts at September 30, 2017, June 30, 2017 or September 30, 2016.

The increase in operating lease income in the current quarter compared to the prior periods is primarily related to growth in business from the Company's leasing divisions during the third quarter of 2017.

The decrease in other non-interest income in the current quarter as compared to the second quarter of 2017 is primarily due to a reduction in the estimated FDIC indemnification liability of $4.9 million recognized in the previous quarter and lower interest rate swap fees, partially offset by higher income from investments in partnerships.

NON-INTEREST EXPENSE

The following table presents non-interest expense by category for the periods presented:



	Three Months Ended
	September 30,		June 30,		September 30,		Q3 2017 compared to Q2 2017					Q3 2017 compared to Q3 2016
(Dollars in thousands)	2017		2017		2016		$ Change			% Change		$ Change			% Change
Salaries and employee benefits:
Salaries	$	57,689	$	55,215	$	54,309	$	2,474		4	%	$	3,380		6	%
Commissions and incentive compensation	32,095		34,050		33,740		(1,955		)	(6	)	(1,645		)	(5	)
Benefits	16,467		17,237		15,669		(770		)	(4	)	798			5
Total salaries and employee benefits	106,251		106,502		103,718		(251		)	—		2,533			2
Equipment	9,947		9,909		9,449		38			—		498			5
Operating lease equipment depreciation	6,794		5,662		3,605		1,132			20		3,189			88
Occupancy, net	13,079		12,586		12,767		493			4		312			2
Data processing	7,851		7,804		7,432		47			1		419			6
Advertising and marketing	9,572		8,726		7,365		846			10		2,207			30
Professional fees	6,786		7,510		5,508		(724		)	(10	)	1,278			23
Amortization of other intangible assets	1,068		1,141		1,085		(73		)	(6	)	(17		)	(2	)
FDIC insurance	3,877		3,874		3,686		3			—		191			5
OREO expense, net	590		739		1,436		(149		)	(20	)	(846		)	(59	)
Other:
Commissions - 3rd party brokers	990		1,033		1,362		(43		)	(4	)	(372		)	(27	)
Postage	1,814		2,080		1,889		(266		)	(13	)	(75		)	(4	)
Miscellaneous	14,956		15,978		17,313		(1,022		)	(6	)	(2,357		)	(14	)
Total other	17,760		19,091		20,564		(1,331		)	(7	)	(2,804		)	(14	)
Total Non-Interest Expense	$	183,575	$	183,544	$	176,615	$	31		—	%	$	6,960		4	%



	Nine Months Ended
	September 30,		September 30,		$			%
(Dollars in thousands)	2017		2016		Change			Change
Salaries and employee benefits:
Salaries	$	167,912	$	157,515	$	10,397		7	%
Commissions and incentive compensation	92,788		92,646		142			—
Benefits	51,369		50,262		1,107			2
Total salaries and employee benefits	312,069		300,423		11,646			4
Equipment	28,858		27,523		1,335			5
Operating lease equipment depreciation	17,092		9,040		8,052			89
Occupancy, net	38,766		36,658		2,108			6
Data processing	23,580		21,089		2,491			12
Advertising and marketing	23,448		18,085		5,363			30
Professional fees	18,956		14,986		3,970			26
Amortization of other intangible assets	3,373		3,631		(258		)	(7	)
FDIC insurance	11,907		11,339		568			5
OREO expense, net	2,994		3,344		(350		)	(10	)
Other:
Commissions - 3rd party brokers	3,121		3,996		(875		)	(22	)
Postage	5,336		5,229		107			2
Miscellaneous	45,737		45,971		(234		)	(1	)
Total other	54,194		55,196		(1,002		)	(2	)
Total Non-Interest Expense	$	535,237	$	501,314	$	33,923		7	%

Notable contributions to the change in non-interest expense are as follows:

Salaries and employee benefits expense decreased in the current quarter compared to the second quarter of 2017 primarily as a result of lower incentive compensation on variable pay based arrangements (including mortgage banking commissions) and benefits, partially offset by higher salaries.

The increase in operating lease equipment depreciation in the current quarter compared to the prior periods is primarily related to growth in business from the Company's leasing divisions during the third quarter of 2017.

The increase in advertising and marketing expenses during the current quarter compared to the second quarter of 2017 is primarily related to higher expenses from mass market media promotions. Marketing costs are incurred to promote the Company's brand, commercial banking capabilities, the Company's various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the company's non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs and type of marketing programs utilized which are determined based on the market area, targeted audience, competition and various other factors.

The decrease in professional fees during the current quarter compared to the second quarter of 2017 is primarily related to lower legal and consulting fees. Professional fees include legal, audit and tax fees, external loan review costs, consulting arrangements and normal regulatory exam assessments.

The decrease in miscellaneous expenses during the current quarter compared to the second quarter of 2017 is primarily a result of lower fees from various purchased services. Miscellaneous expense includes ATM expenses, correspondent bank charges, directors' fees, telephone, travel and entertainment, corporate insurance, dues and subscriptions, problem loan expenses, operating losses and lending origination costs that are not deferred.

INCOME TAXES

The Company recorded income tax expense of $38.6 million in the third quarter of 2017 compared to $37.0 million in the second quarter of 2017 and $31.9 million in the third quarter of 2016. The effective tax rates were 37.05% in the third quarter of 2017, 36.34% in the second quarter of 2017 and 37.55% in the third quarter of 2016. During the nine months ended September 30, 2017, the Company recorded income tax expense of $105.3 million (35.79% effective tax rate) compared to $91.3 million (37.47% effective tax rate) for the same period of 2016. The lower effective tax rate in the first nine months of 2017 was primarily a result of recording $5.0 million of excess tax benefits related to the adoption of new accounting rules over income taxes attributed to share-based compensation that became effective on January 1, 2017. Approximately $3.4 million of these excess tax benefits were recorded in the first quarter of 2017. Excess tax benefits are expected to be higher in the first quarter when the majority of the Company's share-based awards vest, and will fluctuate throughout the year based on the Company's stock price and timing of employee stock option exercises and vesting of other share-based awards.

ASSET QUALITY

Allowance for Credit Losses, excluding covered loans



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(Dollars in thousands)	2017			2017			2016			2017			2016
Allowance for loan losses at beginning of period	$	129,591		$	125,819		$	114,356		$	122,291		$	105,400
Provision for credit losses	7,942			8,952			9,741			22,210			27,433
Other adjustments	(39		)	(30		)	(112		)	(125		)	(324		)
Reclassification (to) from allowance for unfunded lending-related commitments	94			106			(579		)	62			(700		)
Charge-offs:
Commercial	2,265			913			3,469			3,819			4,861
Commercial real estate	989			1,985			382			3,235			1,555
Home equity	968			1,631			574			3,224			3,672
Residential real estate	267			146			134			742			1,320
Premium finance receivables - commercial	1,716			1,878			1,959			5,021			6,350
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	213			175			389			522			720
Total charge-offs	6,418			6,728			6,907			16,563			18,478
Recoveries:
Commercial	801			561			176			1,635			926
Commercial real estate	323			276			364			1,153			1,029
Home equity	178			144			65			387			184
Residential real estate	55			54			61			287			204
Premium finance receivables - commercial	499			404			456			1,515			1,876
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	93			33			72			267			143
Total recoveries	1,949			1,472			1,194			5,244			4,362
Net charge-offs	(4,469		)	(5,256		)	(5,713		)	(11,319		)	(14,116		)
Allowance for loan losses at period end	$	133,119		$	129,591		$	117,693		$	133,119		$	117,693
Allowance for unfunded lending-related commitments at period end	1,276			1,705			1,648			1,276			1,648
Allowance for credit losses at period end	$	134,395		$	131,296		$	119,341		$	134,395		$	119,341
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial	0.09		%	0.02		%	0.24		%	0.05		%	0.10		%
Commercial real estate	0.04			0.11			0.00			0.04			0.01
Home equity	0.46			0.85			0.27			0.54			0.61
Residential real estate	0.08			0.03			0.03			0.06			0.14
Premium finance receivables - commercial	0.18			0.23			0.24			0.18			0.25
Premium finance receivables - life insurance	0.00			0.00			0.00			0.00			0.00
Consumer and other	0.37			0.45			0.92			0.27			0.56
Total loans, net of unearned income, excluding covered loans	0.08		%	0.10		%	0.12		%	0.07		%	0.10		%
Net charge-offs as a percentage of the provision for credit losses	56.27		%	58.71		%	58.65		%	50.96		%	51.46		%
Loans at period-end, excluding covered loans	$	20,912,781		$	20,743,332		$	19,101,261
Allowance for loan losses as a percentage of loans at period end	0.64		%	0.62		%	0.62		%
Allowance for credit losses as a percentage of loans at period end	0.64		%	0.63		%	0.62		%

The allowance for credit losses, excluding the allowance for covered loan losses, is comprised of the allowance for loan losses and the allowance for unfunded lending-related commitments. The allowance for loan losses is a reserve against loan amounts that are actually funded and outstanding while the allowance for unfunded lending-related commitments (separate liability account) relates to certain amounts that Wintrust is committed to lend but for which funds have not yet been disbursed. The provision for

credit losses, excluding the provision for covered loan losses, may contain both a component related to funded loans (provision for loan losses) and a component related to lending-related commitments (provision for unfunded loan commitments and letters of credit).

Net charge-offs as a percentage of loans, excluding covered loans, for the third quarter of 2017 totaled eight basis points on an annualized basis compared to ten basis points on an annualized basis in the second quarter of 2017 and twelve basis points on an annualized basis in the third quarter of 2016. Net charge-offs totaled $4.5 million in the third quarter of 2017, a $787,000 decrease from $5.3 million in the second quarter of 2017 and a $1.2 million decrease from $5.7 million in the third quarter of 2016. The provision for credit losses, excluding the provision for covered loan losses, totaled $7.9 million for the third quarter of 2017 compared to $9.0 million for the second quarter of 2017 and $9.7 million for the third quarter of 2016.

Management believes the allowance for credit losses is appropriate to provide for inherent losses in the portfolio. There can be no assurances, however, that future losses will not exceed the amounts provided for, thereby affecting future results of operations. The amount of future additions to the allowance for credit losses will be dependent upon management’s assessment of the appropriateness of the allowance based on its evaluation of economic conditions, changes in real estate values, interest rates, the regulatory environment, the level of past-due and non-performing loans and other factors.

The Company also provides a provision for covered loan losses on covered loans and maintains an allowance for covered loan losses on covered loans.

The following table presents the provision for credit losses and allowance for credit losses by component for the periods presented, including covered loans:



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(Dollars in thousands)	2017			2017			2016			2017			2016
Provision for loan losses	$	8,036		$	9,058		$	9,162		$	22,272		$	26,733
Provision for unfunded lending-related commitments	(94		)	(106		)	579			(62		)	700
Provision for covered loan losses	(46		)	(61		)	(170		)	(214		)	(699		)
Provision for credit losses	$	7,896		$	8,891		$	9,571		$	21,996		$	26,734

							Period End
							September 30,			June 30,			September 30,
							2017			2017			2016
Allowance for loan losses							$	133,119		$	129,591		$	117,693
Allowance for unfunded lending-related commitments							1,276			1,705			1,648
Allowance for covered loan losses							758			1,074			1,422
Allowance for credit losses							$	135,153		$	132,370		$	120,763

The tables below summarize the calculation of allowance for loan losses for the Company’s core loan portfolio and consumer, niche and purchased loan portfolio, excluding covered loans, as of September 30, 2017 and June 30, 2017.



	As of September 30, 2017
	Recorded		Calculated		As a percentage of its own respective
(Dollars in thousands)	Investment		Allowance		category’s balance
Commercial:⁽¹⁾
Commercial and industrial	$	3,587,207	$	35,803	1.00	%
Asset-based lending	895,283		7,682		0.86
Tax exempt	350,470		2,454		0.70
Leases	380,056		1,208		0.32
Commercial real estate:⁽¹⁾
Residential construction	37,501		722		1.93
Commercial construction	635,763		6,843		1.08
Land	99,360		3,352		3.37
Office	836,978		6,245		0.75
Industrial	798,459		5,532		0.69
Retail	900,005		6,094		0.68
Multi-family	833,330		8,856		1.06
Mixed use and other	1,870,439		14,199		0.76
Home equity⁽¹⁾	615,690		10,556		1.71
Residential real estate⁽¹⁾	753,407		6,565		0.87
Total core loan portfolio	$	12,593,948	$	116,111	0.92	%
Commercial:
Franchise	$	690,867	$	5,950	0.86	%
Mortgage warehouse lines of credit	194,370		1,438		0.74
Community Advantage - homeowner associations	156,457		392		0.25
Aircraft	3,084		43		1.39
Purchased non-covered commercial loans ⁽²⁾	198,240		765		0.39
Commercial real estate:
Purchased non-covered commercial real estate ⁽²⁾	388,946		197		0.05
Purchased non-covered home equity ⁽²⁾	57,279		—		—
Purchased non-covered residential real estate ⁽²⁾	36,092		92		0.25
Premium finance receivables
U.S. commercial insurance loans	2,353,705		4,760		0.20
Canada commercial insurance loans ⁽²⁾	311,207		469		0.15
Life insurance loans ⁽¹⁾	3,586,011		1,324		0.04
Purchased life insurance loans ⁽²⁾	209,463		—		—
Consumer and other ⁽¹⁾	130,852		1,577		1.21
Purchased non-covered consumer and other ⁽²⁾	2,260		1		0.04
Total consumer, niche and purchased loan portfolio	$	8,318,833	$	17,008	0.20	%
Total loans, net of unearned income, excluding covered loans	$	20,912,781	$	133,119	0.64	%


(1)	Excludes purchased loans reported in accordance with ASC 310-20 and ASC 310-30.


(2)	Purchased loans represent loans reported in accordance with ASC 310-20 and ASC 310-30.



	As of June 30, 2017
	Recorded		Calculated		As a percentage of its own respective
(Dollars in thousands)	Investment		Allowance		category’s balance
Commercial:⁽¹⁾
Commercial and industrial	$	3,562,482	$	32,496	0.91	%
Asset-based lending	869,031		8,004		0.92
Tax exempt	357,872		2,638		0.74
Leases	355,383		1,150		0.32
Commercial real estate:⁽¹⁾
Residential construction	41,640		892		2.14
Commercial construction	667,269		8,295		1.24
Land	107,506		3,594		3.34
Office	838,897		5,729		0.68
Industrial	748,142		5,188		0.69
Retail	878,908		5,952		0.68
Multi-family	780,360		8,207		1.05
Mixed use and other	1,904,331		14,225		0.75
Home equity⁽¹⁾	627,178		11,134		1.78
Residential real estate⁽¹⁾	724,161		6,063		0.84
Total core loan portfolio	$	12,463,160	$	113,567	0.91	%
Commercial:
Franchise	$	622,301	$	5,222	0.84	%
Mortgage warehouse lines of credit	234,643		1,719		0.73
Community Advantage - homeowner associations	145,494		364		0.25
Aircraft	3,156		17		0.54
Purchased non-covered commercial loans ⁽²⁾	255,927		748		0.29
Commercial real estate:
Purchased non-covered commercial real estate ⁽²⁾	435,441		257		0.06
Purchased non-covered home equity ⁽²⁾	62,305		—		—
Purchased non-covered residential real estate ⁽²⁾	38,649		80		0.21
Premium finance receivables
U.S. commercial insurance loans	2,342,428		4,526		0.19
Canada commercial insurance loans ⁽²⁾	305,958		483		0.16
Life insurance loans ⁽¹⁾	3,492,709		1,343		0.04
Purchased life insurance loans ⁽²⁾	226,334		—		—
Consumer and other ⁽¹⁾	112,337		1,264		1.13
Purchased non-covered consumer and other ⁽²⁾	2,490		1		0.04
Total consumer, niche and purchased loan portfolio	$	8,280,172	$	16,024	0.19	%
Total loans, net of unearned income, excluding covered loans	$	20,743,332	$	129,591	0.62	%


(1)	Excludes purchased loans reported in accordance with ASC 310-20 and ASC 310-30.


(2)	Purchased loans represent loans reported in accordance with ASC 310-20 and ASC 310-30.

In addition to the $133.1 million of allowance for loan losses, there is $5.2 million of non-accretable credit discount on purchased loans reported in accordance with ASC 310-30, excluding covered loans, that is available to absorb credit losses.

As part of the regular quarterly review performed by management to determine if the Company’s allowance for loan losses is appropriate, an analysis is prepared on the loan portfolio based upon a breakout of core loans and consumer, niche and purchased loans. A summary of the allowance for loan losses calculated for the loan components in both the core loan portfolio and the consumer, niche and purchased loan portfolio was shown on the preceding tables as of September 30, 2017 and June 30, 2017.

Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date. In accordance with accounting guidance, credit deterioration on purchased loans is recorded as a credit discount at the time of purchase instead of as an increase to the allowance for loan losses.

The tables below show the aging of the Company’s loan portfolio at September 30, 2017 and June 30, 2017:



			90+ days		60-89		30-59
As of September 30, 2017			and still		days past		days past
(Dollars in thousands)	Nonaccrual		accruing		due		due		Current		Total Loans
Loan Balances:
Commercial ⁽¹⁾	$	13,931	$	1,489	$	5,036	$	36,450	$	6,399,128	$	6,456,034
Commercial real estate ⁽¹⁾	14,878		8,443		5,838		16,955		6,354,667		6,400,781
Home equity	7,581		—		446		2,590		662,352		672,969
Residential real estate ⁽¹⁾	14,743		1,120		2,055		165		771,416		789,499
Premium finance receivables - commercial	9,827		9,584		7,421		9,966		2,628,114		2,664,912
Premium finance receivables - life insurance ⁽¹⁾	—		6,740		946		6,937		3,780,851		3,795,474
Consumer and other ⁽¹⁾	540		221		242		685		131,424		133,112
Total loans, net of unearned income, excluding covered loans	$	61,500	$	27,597	$	21,984	$	73,748	$	20,727,952	$	20,912,781
Covered loans	1,936		2,233		1,074		45		41,313		46,601
Total loans, net of unearned income	$	63,436	$	29,830	$	23,058	$	73,793	$	20,769,265	$	20,959,382



As of September 30, 2017 Aging as a % of Loan Balance	Nonaccrual		90+ days and still accruing		60-89 days past due		30-59 days past due		Current		Total Loans
Commercial ⁽¹⁾	0.2	%	—	%	0.1	%	0.6	%	99.1	%	100.0	%
Commercial real estate ⁽¹⁾	0.2		0.1		0.1		0.3		99.3		100.0
Home equity	1.1		—		0.1		0.4		98.4		100.0
Residential real estate ⁽¹⁾	1.9		0.1		0.3		—		97.7		100.0
Premium finance receivables - commercial	0.4		0.4		0.3		0.4		98.5		100.0
Premium finance receivables - life insurance ⁽¹⁾	—		0.2		—		0.2		99.6		100.0
Consumer and other ⁽¹⁾	0.4		0.2		0.2		0.5		98.7		100.0
Total loans, net of unearned income, excluding covered loans	0.3	%	0.1	%	0.1	%	0.4	%	99.1	%	100.0	%
Covered loans	4.2		4.8		2.3		0.1		88.6		100.0
Total loans, net of unearned income	0.3	%	0.1	%	0.1	%	0.4	%	99.1	%	100.0	%


(1)	Including PCI loans. PCI loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30. Loan agings are based upon contractually required payments.



			90+ days		60-89		30-59
As of June 30, 2017			and still		days past		days past
(Dollars in thousands)	Nonaccrual		accruing		due		due		Current		Total Loans
Loan Balances:
Commercial ⁽¹⁾	$	10,191	$	1,572	$	7,062	$	22,372	$	6,365,092	$	6,406,289
Commercial real estate ⁽¹⁾	16,980		8,768		1,642		42,049		6,333,055		6,402,494
Home equity	9,482		—		855		2,858		676,288		689,483
Residential real estate ⁽¹⁾	14,292		775		1,273		300		746,170		762,810
Premium finance receivables - commercial	10,456		5,922		4,951		11,713		2,615,344		2,648,386
Premium finance receivables - life insurance ⁽¹⁾	—		1,046		—		16,977		3,701,020		3,719,043
Consumer and other ⁽¹⁾	439		125		331		515		113,417		114,827
Total loans, net of unearned income, excluding covered loans	$	61,840	$	18,208	$	16,114	$	96,784	$	20,550,386	$	20,743,332
Covered loans	1,961		2,504		113		598		44,943		50,119
Total loans, net of unearned income	$	63,801	$	20,712	$	16,227	$	97,382	$	20,595,329	$	20,793,451



As of June 30, 2017 Aging as a % of Loan Balance:	Nonaccrual		90+ days and still accruing		60-89 days past due		30-59 days past due		Current		Total Loans
Commercial ⁽¹⁾	0.2	%	—	%	0.1	%	0.3	%	99.4	%	100.0	%
Commercial real estate ⁽¹⁾	0.3		0.1		—		0.7		98.9		100.0
Home equity	1.4		—		0.1		0.4		98.1		100.0
Residential real estate ⁽¹⁾	1.9		0.1		0.2		—		97.8		100.0
Premium finance receivables - commercial	0.4		0.2		0.2		0.4		98.8		100.0
Premium finance receivables - life insurance ⁽¹⁾	—		—		—		0.5		99.5		100.0
Consumer and other ⁽¹⁾	0.4		0.1		0.3		0.4		98.8		100.0
Total loans, net of unearned income, excluding covered loans	0.3	%	0.1	%	0.1	%	0.5	%	99.0	%	100.0	%
Covered loans	3.9		5.0		0.2		1.2		89.7		100.0
Total loans, net of unearned income	0.3	%	0.1	%	0.1	%	0.5	%	99.0	%	100.0	%


(1)	Including PCI loans. PCI loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30. Loan agings are based upon contractually required payments.

As of September 30, 2017, $22.0 million of all loans, excluding covered loans, or 0.1%, were 60 to 89 days past due and $73.7 million, or 0.4%, were 30 to 59 days (or one payment) past due. As of June 30, 2017, $16.1 million of all loans, excluding covered loans, or 0.1%, were 60 to 89 days past due and $96.8 million, or 0.5%, were 30 to 59 days (or one payment) past due. The majority of the commercial and commercial real estate loans shown as 60 to 89 days and 30 to 59 days past due are included on the Company’s internal problem loan reporting system. Loans on this system are closely monitored by management on a monthly basis.

The Company’s home equity and residential loan portfolios continue to exhibit low delinquency ratios. Home equity loans at September 30, 2017 that are current with regard to the contractual terms of the loan agreement represent 98.4% of the total home equity portfolio. Residential real estate loans at September 30, 2017 that are current with regards to the contractual terms of the loan agreements comprise 97.7% of total residential real estate loans outstanding.

Non-performing Assets, excluding covered assets

The following table sets forth Wintrust’s non-performing assets and troubled debt restructurings ("TDRs") performing under the contractual terms of the loan agreement, excluding covered assets and non-covered PCI loans, at the dates indicated.



	September 30,			June 30,			September 30,
(Dollars in thousands)	2017			2017			2016
Loans past due greater than 90 days and still accruing⁽¹⁾:
Commercial	$	—		$	—		$	—
Commercial real estate	—			—			—
Home equity	—			—			—
Residential real estate	—			179			—
Premium finance receivables - commercial	9,584			5,922			7,754
Premium finance receivables - life insurance	6,740			1,046			—
Consumer and other	159			63			60
Total loans past due greater than 90 days and still accruing	16,483			7,210			7,814
Non-accrual loans ⁽²⁾:
Commercial	13,931			10,191			16,418
Commercial real estate	14,878			16,980			22,625
Home equity	7,581			9,482			9,309
Residential real estate	14,743			14,292			12,205
Premium finance receivables - commercial	9,827			10,456			14,214
Premium finance receivables - life insurance	—			—			—
Consumer and other	540			439			543
Total non-accrual loans	61,500			61,840			75,314
Total non-performing loans:
Commercial	13,931			10,191			16,418
Commercial real estate	14,878			16,980			22,625
Home equity	7,581			9,482			9,309
Residential real estate	14,743			14,471			12,205
Premium finance receivables - commercial	19,411			16,378			21,968
Premium finance receivables - life insurance	6,740			1,046			—
Consumer and other	699			502			603
Total non-performing loans	$	77,983		$	69,050		$	83,128
Other real estate owned	17,312			16,853			19,933
Other real estate owned - from acquisitions	20,066			22,508			15,117
Other repossessed assets	301			532			428
Total non-performing assets	$	115,662		$	108,943		$	118,606
TDRs performing under the contractual terms of the loan agreement	$	26,972		$	28,008		$	29,440
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.22		%	0.16		%	0.28		%
Commercial real estate	0.23			0.27			0.38
Home equity	1.13			1.38			1.25
Residential real estate	1.87			1.90			1.84
Premium finance receivables - commercial	0.73			0.62			0.90
Premium finance receivables - life insurance	0.18			0.03			—
Consumer and other	0.53			0.44			0.50
Total loans, net of unearned income	0.37		%	0.33		%	0.44		%
Total non-performing assets as a percentage of total assets	0.42		%	0.40		%	0.47		%
Allowance for loan losses as a percentage of total non-performing loans	170.70		%	187.68		%	141.58		%


(1)	As of the dates shown, no TDRs were past due greater than 90 days and still accruing interest.


(2)	Non-accrual loans included TDRs totaling $6.2 million, $5.1 million and $14.8 million as of September 30, 2017, June 30, 2017 and September 30, 2016, respectively.

The ratio of non-performing assets to total assets was 0.42% as of September 30, 2017, compared to 0.40% at June 30, 2017, and 0.47% at September 30, 2016. Non-performing assets, excluding covered assets and non-covered PCI loans, totaled $115.7 million at September 30, 2017, compared to $108.9 million at June 30, 2017 and $118.6 million at September 30, 2016. Non-performing loans, excluding covered loans and non-covered PCI loans, totaled $78.0 million, or 0.37% of total loans, at September 30, 2017 compared to $69.1 million, or 0.33% of total loans, at June 30, 2017 and $83.1 million, or 0.44% of total loans, at September 30, 2016. The increase in non-performing loans, excluding covered loans and non-covered PCI loans, compared to June 30, 2017 was primarily the result of a $5.7 million increase in the life insurance premium finance receivables portfolio, a $3.7 million increase in the commercial portfolio and a $3.0 million increase in the commercial premium finance receivables portfolio. OREO, excluding covered OREO, of $37.4 million at September 30, 2017 decreased $2.0 million compared to $39.4 million at June 30, 2017 and increased $2.3 million compared to $35.1 million at September 30, 2016.

Management is pursuing the resolution of all credits in this category. At this time, management believes reserves are appropriate to absorb inherent losses that are expected upon the ultimate resolution of these credits.

Nonperforming Loans Rollforward

The table below presents a summary of the changes in the balance of non-performing loans, excluding covered loans, for the periods presented:



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(Dollars in thousands)	2017			2017			2016			2017			2016
Balance at beginning of period	$	69,050		$	78,979		$	88,119		$	87,454		$	84,057
Additions, net	10,622			10,888			9,522			30,119			32,039
Return to performing status	(603		)	(975		)	(231		)	(3,170		)	(3,110		)
Payments received	(6,633		)	(10,684		)	(5,235		)	(22,931		)	(13,353		)
Transfer to OREO and other repossessed assets	(1,072		)	(2,543		)	(2,270		)	(5,276		)	(6,168		)
Charge-offs	(2,295		)	(4,344		)	(3,353		)	(7,919		)	(6,829		)
Net change for niche loans ⁽¹⁾	8,914			(2,271		)	(3,424		)	(294		)	(3,508		)
Balance at end of period	$	77,983		$	69,050		$	83,128		$	77,983		$	83,128


(1)	This includes activity for premium finance receivables and indirect consumer loans.

TDRs

The table below presents a summary of TDRs as of the respective date, presented by loan category and accrual status:



	September 30,			June 30,			September 30,
(Dollars in thousands)	2017			2017			2016
Accruing TDRs:
Commercial	$	3,774		$	3,886		$	2,285
Commercial real estate	16,475			17,349			22,261
Residential real estate and other	6,723			6,773			4,894
Total accrual	$	26,972		$	28,008		$	29,440
Non-accrual TDRs: ⁽¹⁾
Commercial	$	2,493		$	1,110		$	2,134
Commercial real estate	1,492			1,839			10,610
Residential real estate and other	2,226			2,134			2,092
Total non-accrual	$	6,211		$	5,083		$	14,836
Total TDRs:
Commercial	$	6,267		$	4,996		$	4,419
Commercial real estate	17,967			19,188			32,871
Residential real estate and other	8,949			8,907			6,986
Total TDRs	$	33,183		$	33,091		$	44,276
Weighted-average contractual interest rate of TDRs	4.39		%	4.28		%	4.33		%


(1)	Included in total non-performing loans.

Other Real Estate Owned

The table below presents a summary of other real estate owned, excluding covered other real estate owned, as of September 30, 2017, June 30, 2017 and September 30, 2016, and shows the activity for the respective period and the balance for each property type:



	Three Months Ended
	September 30,			June 30,			September 30,
(Dollars in thousands)	2017			2017			2016
Balance at beginning of period	$	39,361		$	39,864		$	38,063
Disposals/resolved	(2,391		)	(4,270		)	(5,967		)
Transfers in at fair value, less costs to sell	898			3,965			3,958
Transfers in from covered OREO subsequent to loss share expiration	—			—			—
Additions from acquisition	—			—			—
Fair value adjustments	(490		)	(198		)	(1,004		)
Balance at end of period	$	37,378		$	39,361		$	35,050

	Period End
	September 30,			June 30,			September 30,
Balance by Property Type	2017			2017			2016
Residential real estate	$	7,236		$	7,684		$	9,602
Residential real estate development	676			755			2,114
Commercial real estate	29,466			30,922			23,334
Total	$	37,378		$	39,361		$	35,050

Items Impacting Comparative Financial Results:

Acquisitions

On February 14, 2017, the Company acquired certain assets and assumed certain liabilities of the mortgage banking business of American Homestead Mortgage, LLC ("AHM"), in a business combination. AHM is located in Montana's Flathead Valley and originated approximately $55 million of residential mortgage loans in 2016.

On November 18, 2016, the Company completed its acquisition of First Community Financial Corporation ("FCFC"). FCFC was the parent company of First Community Bank. Through this transaction, the Company acquired First Community Bank's two banking locations in Elgin, Illinois, approximately $187 million in assets and approximately $150 million in deposits.

On August 19, 2016, the Company, through its wholly-owned subsidiary Lake Forest Bank & Trust Company, completed its acquisition of approximately $561 million in select performing loans and related relationships from an affiliate of GE Capital Franchise Finance. The loans are to franchise operators (primarily quick service restaurant concepts) in the Midwest and in the Western portion of the United States.

On March 31, 2016, the Company completed its acquisition of Generations Bancorp. Inc. ("Generations"). Generations was the parent company of Foundations Bank ("Foundations"). Through this transaction, the Company acquired Foundations' banking location in Pewaukee, Wisconsin, approximately $134 million in assets and approximately $100 million in deposits.

Items Occurring Subsequent to September 30, 2017:

Termination of Loss Share Agreements

On October 16, 2017, the Company entered in agreements with the Federal Deposit Insurance Corporation (“FDIC”) that terminate all existing loss share agreements with the FDIC. The loss share agreements were related to the Company’s acquisition of assets and assumption of liabilities of eight failed banks through FDIC assisted transactions in 2010, 2011 and 2012.

Under terms of the agreements, the Company made a net payment of $15.2 million to the FDIC as consideration for the early termination of the loss share agreements. The Company will record a pre-tax gain of approximately $0.4 million in the fourth quarter to write off the remaining loss share asset, relieve the claw-back liability and recognize the payment to the FDIC.

Approximately $0.2 million of the remaining net indemnification liabilities that were scheduled to be amortized against future earnings will not occur for the remainder of the fourth quarter of 2017. Additionally, $0.8 million, $0.8 million and $0.7 million each year in 2018, 2019 and 2020, respectively, of scheduled amortization will not occur.

The termination of FDIC loss share agreements has no effect on yields of the loans that were previously covered under these agreements. The Company will be solely responsible for all future charge-offs, recoveries, gains, losses and expenses related to the previously covered assets as the FDIC will no longer share in those amounts.

WINTRUST SUBSIDIARIES AND LOCATIONS

Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select Market (Nasdaq: WTFC). Its 15 community bank subsidiaries are: Lake Forest Bank & Trust Company, N.A., Hinsdale Bank & Trust Company, Wintrust Bank in Chicago, Libertyville Bank & Trust Company, Barrington Bank & Trust Company, N.A., Crystal Lake Bank & Trust Company, N.A., Northbrook Bank & Trust Company, Schaumburg Bank & Trust Company, N.A., Village Bank & Trust in Arlington Heights, Beverly Bank & Trust Company, N.A. in Chicago, Wheaton Bank & Trust Company, State Bank of The Lakes in Antioch, Old Plank Trail Community Bank, N.A. in New Lenox, St. Charles Bank & Trust Company and Town Bank in Hartland, Wisconsin.

The banks also operate facilities in Illinois in Algonquin, Aurora, Bloomingdale, Buffalo Grove, Cary, Clarendon Hills, Crete, Deerfield, Des Plaines, Downers Grove, Elgin, Elk Grove Village, Elmhurst, Evergreen Park, Frankfort, Geneva, Glen Ellyn, Glencoe, Glenview, Gurnee, Grayslake, Hanover Park, Highland Park, Highwood, Hoffman Estates, Island Lake, Itasca, Joliet, Lake Bluff, Lake Villa, Lansing, Lemont, Lindenhurst, Lynwood, Markham, McHenry, Mokena, Mount Prospect, Mundelein, Naperville, North Chicago, Northfield, Norridge, Oak Lawn, Orland Park, Palatine, Park Ridge, Prospect Heights, Ravinia, Riverside, Rogers Park, Roselle, Round Lake Beach, Shorewood, Skokie, South Holland, Spring Grove, Steger, Stone Park, Vernon Hills, Wauconda, Western Springs, Willowbrook, Wilmette, Winnetka and Wood Dale and in Albany, Burlington, Clinton, Darlington, Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva, Madison, Menomenee Falls, Milwaukee, Monroe, Pewaukee, Sharon, Wales, Walworth and Wind Lake, Wisconsin and Dyer, Indiana.

Additionally, the Company operates various non-bank business units:


•	FIRST Insurance Funding, a division of Lake Forest Bank & Trust Company, N.A., and Wintrust Life Finance, a division of Lake Forest Bank & Trust Company, N.A., serve commercial and life insurance loan customers, respectively, throughout the United States.


•	First Insurance Funding of Canada serves commercial insurance loan customers throughout Canada.


•	Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States.


•	Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices.


•	Wayne Hummer Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest.


•	Great Lakes Advisors LLC provides money management services and advisory services to individual accounts.


•	The Chicago Trust Company, a trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location.


•	Wintrust Asset Finance which offers direct leasing opportunities.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “point,” “will,” “may,” “should,” “would” and “could.” Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of the Company’s 2016 Annual Report on Form 10-K and in any of the Company’s subsequent SEC filings. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things, statements relating to the Company’s future financial performance, the performance of its loan portfolio, the expected amount of future credit reserves and charge-offs, delinquency trends, growth plans, regulatory developments, securities that the Company may offer from time to time, and management’s long-term performance goals, as well as statements relating to the anticipated effects on financial condition and results of operations from expected developments or events, the Company’s business and growth strategies, including future acquisitions of banks, specialty finance or wealth management businesses, internal growth and plans to form additional de novo banks or branch offices. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:


•	negative economic conditions that adversely affect the economy, housing prices, the job market and other factors that may affect the Company’s liquidity and the performance of its loan portfolios, particularly in the markets in which it operates;


•	the extent of defaults and losses on the Company’s loan portfolio, which may require further increases in its allowance for credit losses;


•	estimates of fair value of certain of the Company’s assets and liabilities, which could change in value significantly from period to period;


•	the financial success and economic viability of the borrowers of our commercial loans;


•	commercial real estate market conditions in the Chicago metropolitan area and southern Wisconsin;


•	the extent of commercial and consumer delinquencies and declines in real estate values, which may require further increases in the Company’s allowance for loan and lease losses;


•	inaccurate assumptions in our analytical and forecasting models used to manage our loan portfolio;


•	changes in the level and volatility of interest rates, the capital markets and other market indices that may affect, among other things, the Company’s liquidity and the value of its assets and liabilities;


•	competitive pressures in the financial services business which may affect the pricing of the Company’s loan and deposit products as well as its services (including wealth management services), which may result in loss of market share and reduced income from deposits, loans, advisory fees and income from other products;


•	failure to identify and complete favorable acquisitions in the future or unexpected difficulties or developments related to the integration of the Company’s recent or future acquisitions;


•	unexpected difficulties and losses related to FDIC-assisted acquisitions, including those resulting from our loss-sharing arrangements with the FDIC;


•	any negative perception of the Company’s reputation or financial strength;


•	ability of the Company to raise additional capital on acceptable terms when needed;


•	disruption in capital markets, which may lower fair values for the Company’s investment portfolio;


•	ability of the Company to use technology to provide products and services that will satisfy customer demands and create efficiencies in operations and to manage risks associated therewith;


•	adverse effects on our information technology systems resulting from failures, human error or cyberattack, any of which could result in an information or security breach, the disclosure or misuse of confidential or proprietary information, significant legal and financial losses and reputational harm;


•	adverse effects of failures by our vendors to provide agreed upon services in the manner and at the cost agreed, particularly our information technology vendors;


•	increased costs as a result of protecting our customers from the impact of stolen debit card information;


•	accuracy and completeness of information the Company receives about customers and counterparties to make credit decisions;


•	ability of the Company to attract and retain senior management experienced in the banking and financial services industries;


•	environmental liability risk associated with lending activities;


•	the impact of any claims or legal actions to which the Company is subject, including any effect on our reputation;


•	losses incurred in connection with repurchases and indemnification payments related to mortgages and increases in reserves associated therewith;


•	the loss of customers as a result of technological changes allowing consumers to complete their financial transactions without the use of a bank;


•	the soundness of other financial institutions;


•	the expenses and delayed returns inherent in opening new branches and de novo banks;


•	examinations and challenges by tax authorities;


•	changes in accounting standards, rules and interpretations and the impact on the Company’s financial statements;


•	the ability of the Company to receive dividends from its subsidiaries;


•	a decrease in the Company’s regulatory capital ratios, including as a result of further declines in the value of its loan portfolios, or otherwise;


•	legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies, including those resulting from the Dodd-Frank Act;


•	a lowering of our credit rating;


•	changes in U.S. monetary policy;


•	uncertainty regarding future legislative and regulatory actions, which could be disruptive to our operations;


•	restrictions upon our ability to market our products to consumers and limitations on our ability to profitably operate our mortgage business resulting from the Dodd-Frank Act;


•	increased costs of compliance, heightened regulatory capital requirements and other risks associated with changes in regulation and the current regulatory environment, including the Dodd-Frank Act;


•	the impact of heightened capital requirements;


•	increases in the Company’s FDIC insurance premiums, or the collection of special assessments by the FDIC;


•	delinquencies or fraud with respect to the Company’s premium finance business;


•	credit downgrades among commercial and life insurance providers that could negatively affect the value of collateral securing the Company’s premium finance loans;


•	the Company’s ability to comply with covenants under its credit facility; and


•	fluctuations in the stock market, which may have an adverse impact on the Company’s wealth management business and brokerage operation.

Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by the Company. Any such statement speaks only as of the date the statement was made or as of such date that may be referenced within the statement. The Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events after the date of the press release. Persons are advised, however, to consult further disclosures management makes on related subjects in its reports filed with the Securities and Exchange Commission and in its press releases.

CONFERENCE CALL, WEB CAST AND REPLAY

The Company will hold a conference call at 1:00 p.m. (CT) Thursday, October 19, 2017 regarding third quarter and year-to-date 2017 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #94462324. A simultaneous audio-only web cast and replay of the conference call may be accessed via the Company’s website at (http://www.wintrust.com), Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the third quarter and year-to-date 2017 earnings press release will be available on the home page of the Company’s website at (http://www.wintrust.com) and at the Investor Relations, Investor News and Events, Press Releases link on its website.

WINTRUST FINANCIAL CORPORATION

Supplemental Financial Information

5 Quarter Trends

WINTRUST FINANCIAL CORPORATION - Supplemental Financial Information

Selected Financial Highlights - 5 Quarter Trends

(Dollars in thousands, except per share data)



	Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2017			2017			2017			2016			2016
Selected Financial Condition Data (at end of period):
Total assets	$	27,358,162		$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759
Total loans, excluding loans held-for-sale and covered loans	20,912,781			20,743,332			19,931,058			19,703,172			19,101,261
Total deposits	22,895,063			22,605,692			21,730,441			21,658,632			21,147,655
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Total shareholders’ equity	2,908,925			2,839,458			2,764,983			2,695,617			2,674,474
Selected Statements of Income Data:
Net interest income	215,988			204,409			192,580			190,778			184,636
Net revenue ⁽¹⁾	295,719			294,381			261,345			276,053			271,240
Net income	65,626			64,897			58,378			54,608			53,115
Net income per common share – Basic	$	1.14		$	1.15		$	1.05		$	0.98		$	0.96
Net income per common share – Diluted	$	1.12		$	1.11		$	1.00		$	0.94		$	0.92
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin	3.43		%	3.41		%	3.36		%	3.21		%	3.21		%
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.46		%	3.43		%	3.39		%	3.23		%	3.24		%
Non-interest income to average assets	1.17		%	1.39		%	1.11		%	1.32		%	1.38		%
Non-interest expense to average assets	2.70		%	2.83		%	2.70		%	2.80		%	2.82		%
Net overhead ratio ⁽³⁾	1.53		%	1.44		%	1.60		%	1.48		%	1.44		%
Return on average assets	0.96		%	1.00		%	0.94		%	0.85		%	0.85		%
Return on average common equity	9.15		%	9.55		%	8.93		%	8.32		%	8.20		%
Return on average tangible common equity (non-GAAP) ⁽²⁾	11.39		%	12.02		%	11.44		%	10.68		%	10.55		%
Average total assets	$	27,012,295		$	26,050,949		$	25,207,348		$	25,611,060		$	24,879,252
Average total shareholders’ equity	2,882,682			2,800,905			2,739,050			2,689,876			2,651,684
Average loans to average deposits ratio (excluding loans held-for-sale, excluding covered loans)	91.8		%	94.1		%	92.5		%	89.6		%	89.8		%
Average loans to average deposits ratio (excluding loans held-for-sale, including covered loans)	92.1			94.4			92.7			89.9			90.3
Common Share Data at end of period:
Market price per common share	$	78.31		$	76.44		$	69.12		$	72.57		$	55.57
Book value per common share ⁽²⁾	$	49.86		$	48.73		$	47.88		$	47.12		$	46.86
Tangible common book value per share ⁽²⁾	$	40.53		$	39.40		$	37.97		$	37.08		$	37.06
Common shares outstanding	55,838,063			55,699,927			52,503,663			51,880,540			51,714,683
Other Data at end of period:⁽⁶⁾
Leverage Ratio⁽⁴⁾	9.2		%	9.2		%	9.3		%	8.9		%	9.0		%
Tier 1 Capital to risk-weighted assets ⁽⁴⁾	10.0		%	9.8		%	10.0		%	9.7		%	9.8		%
Common equity Tier 1 capital to risk-weighted assets ⁽⁴⁾	9.5		%	9.3		%	8.9		%	8.6		%	8.7		%
Total capital to risk-weighted assets ⁽⁴⁾	12.1		%	12.0		%	12.2		%	11.9		%	12.1		%
Allowance for credit losses ⁽⁵⁾	$	134,395		$	131,296		$	127,630		$	123,964		$	119,341
Non-performing loans	77,983			69,050			78,979			87,454			83,128
Allowance for credit losses to total loans ⁽⁵⁾	0.64		%	0.63		%	0.64		%	0.63		%	0.62		%
Non-performing loans to total loans	0.37		%	0.33		%	0.40		%	0.44		%	0.44		%
Number of:
Bank subsidiaries	15			15			15			15			15
Banking offices	156			153			155			155			152


(1)	Net revenue includes net interest income and non-interest income.


(2)	See “Supplemental Financial Measures/Ratios” for additional information on this performance measure/ratio.


(3)	The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period’s total average assets. A lower ratio indicates a higher degree of efficiency.


(4)	Capital ratios for current quarter-end are estimated.


(5)	The allowance for credit losses includes both the allowance for loan losses and the allowance for unfunded lending-related commitments, but excluding the allowance for covered loan losses.


(6)	Asset quality ratios exclude covered loans.

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Consolidated Statements of Condition - 5 Quarter Trends



	(Unaudited)			(Unaudited)			(Unaudited)						(Unaudited)
	September 30,			June 30,			March 31,			December 31,			September 30,
(In thousands)	2017			2017			2017			2016			2016
Assets
Cash and due from banks	$	251,896		$	296,105		$	214,102		$	267,194		$	242,825
Federal funds sold and securities purchased under resale agreements	56			56			3,046			2,851			4,122
Interest bearing deposits with banks	1,218,728			1,011,635			1,007,468			980,457			816,104
Available-for-sale securities, at fair value	1,665,903			1,649,636			1,803,733			1,724,667			1,650,096
Held-to-maturity securities, at amortized cost	819,340			793,376			667,764			635,705			932,767
Trading account securities	643			1,987			714			1,989			1,092
Federal Home Loan Bank and Federal Reserve Bank stock	87,192			80,812			78,904			133,494			129,630
Brokerage customer receivables	23,631			23,281			23,171			25,181			25,511
Mortgage loans held-for-sale	370,282			382,837			288,964			418,374			559,634
Loans, net of unearned income, excluding covered loans	20,912,781			20,743,332			19,931,058			19,703,172			19,101,261
Covered loans	46,601			50,119			52,359			58,145			95,940
Total loans	20,959,382			20,793,451			19,983,417			19,761,317			19,197,201
Allowance for loan losses	(133,119		)	(129,591		)	(125,819		)	(122,291		)	(117,693		)
Allowance for covered loan losses	(758		)	(1,074		)	(1,319		)	(1,322		)	(1,422		)
Net loans	20,825,505			20,662,786			19,856,279			19,637,704			19,078,086
Premises and equipment, net	609,978			605,211			598,746			597,301			597,263
Lease investments, net	193,828			191,248			155,233			129,402			116,355
Accrued interest receivable and other assets	580,612			577,359			560,741			593,796			660,923
Trade date securities receivable	189,896			133,130			—			—			677
Goodwill	502,021			500,260			499,341			498,587			485,938
Other intangible assets	18,651			19,546			20,687			21,851			20,736
Total assets	$	27,358,162		$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	6,502,409		$	6,294,052		$	5,790,579		$	5,927,377		$	5,711,042
Interest bearing	16,392,654			16,311,640			15,939,862			15,731,255			15,436,613
Total deposits	22,895,063			22,605,692			21,730,441			21,658,632			21,147,655
Federal Home Loan Bank advances	468,962			318,270			227,585			153,831			419,632
Other borrowings	251,680			277,710			238,787			262,486			241,366
Subordinated notes	139,052			139,029			138,993			138,971			138,943
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Trade date securities payable	880			5,151			—			—			—
Accrued interest payable and other liabilities	440,034			490,389			424,538			505,450			446,123
Total liabilities	24,449,237			24,089,807			23,013,910			22,972,936			22,647,285
Shareholders’ Equity:
Preferred stock	125,000			125,000			251,257			251,257			251,257
Common stock	55,940			55,802			52,605			51,978			51,811
Surplus	1,519,596			1,511,080			1,381,886			1,365,781			1,356,759
Treasury stock	(4,884		)	(4,884		)	(4,884		)	(4,589		)	(4,522		)
Retained earnings	1,254,759			1,198,997			1,143,943			1,096,518			1,051,748
Accumulated other comprehensive loss	(41,486		)	(46,537		)	(59,824		)	(65,328		)	(32,579		)
Total shareholders’ equity	2,908,925			2,839,458			2,764,983			2,695,617			2,674,474
Total liabilities and shareholders’ equity	$	27,358,162		$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Consolidated Statements of Income (Unaudited) - 5 Quarter Trends



	Three Months Ended
	September 30,			June 30,			March 31,			December 31,		September 30,
(In thousands, except per share data)	2017			2017			2017			2016		2016
Interest income
Interest and fees on loans	$	227,120		$	212,709		$	199,314		$	199,155	$	190,189
Interest bearing deposits with banks	3,272			1,634			1,623			1,541		1,156
Federal funds sold and securities purchased under resale agreements	—			1			1			1		1
Investment securities	16,058			15,524			13,573			12,954		15,496
Trading account securities	8			4			11			32		18
Federal Home Loan Bank and Federal Reserve Bank stock	1,080			1,153			1,070			1,144		1,094
Brokerage customer receivables	150			156			167			186		195
Total interest income	247,688			231,181			215,759			215,013		208,149
Interest expense
Interest on deposits	23,655			18,471			16,270			16,413		15,621
Interest on Federal Home Loan Bank advances	2,151			2,933			1,590			2,439		2,577
Interest on other borrowings	1,482			1,149			1,139			1,074		1,137
Interest on subordinated notes	1,772			1,786			1,772			1,779		1,778
Interest on junior subordinated debentures	2,640			2,433			2,408			2,530		2,400
Total interest expense	31,700			26,772			23,179			24,235		23,513
Net interest income	215,988			204,409			192,580			190,778		184,636
Provision for credit losses	7,896			8,891			5,209			7,350		9,571
Net interest income after provision for credit losses	208,092			195,518			187,371			183,428		175,065
Non-interest income
Wealth management	19,803			19,905			20,148			19,512		19,334
Mortgage banking	28,184			35,939			21,938			35,489		34,712
Service charges on deposit accounts	8,645			8,696			8,265			8,054		8,024
Gains (losses) on investment securities, net	39			47			(55		)	1,575		3,305
Fees from covered call options	1,143			890			759			1,476		3,633
Trading (losses) gains, net	(129		)	(420		)	(320		)	1,007		(432		)
Operating lease income, net	8,461			6,805			5,782			5,171		4,459
Other	13,585			18,110			12,248			12,991		13,569
Total non-interest income	79,731			89,972			68,765			85,275		86,604
Non-interest expense
Salaries and employee benefits	106,251			106,502			99,316			104,735		103,718
Equipment	9,947			9,909			9,002			9,532		9,449
Operating lease equipment depreciation	6,794			5,662			4,636			4,219		3,605
Occupancy, net	13,079			12,586			13,101			14,254		12,767
Data processing	7,851			7,804			7,925			7,687		7,432
Advertising and marketing	9,572			8,726			5,150			6,691		7,365
Professional fees	6,786			7,510			4,660			5,425		5,508
Amortization of other intangible assets	1,068			1,141			1,164			1,158		1,085
FDIC insurance	3,877			3,874			4,156			4,726		3,686
OREO expense, net	590			739			1,665			1,843		1,436
Other	17,760			19,091			17,343			20,101		20,564
Total non-interest expense	183,575			183,544			168,118			180,371		176,615
Income before taxes	104,248			101,946			88,018			88,332		85,054
Income tax expense	38,622			37,049			29,640			33,724		31,939
Net income	$	65,626		$	64,897		$	58,378		$	54,608	$	53,115
Preferred stock dividends	2,050			2,050			3,628			3,629		3,628
Net income applicable to common shares	$	63,576		$	62,847		$	54,750		$	50,979	$	49,487
Net income per common share - Basic	$	1.14		$	1.15		$	1.05		$	0.98	$	0.96
Net income per common share - Diluted	$	1.12		$	1.11		$	1.00		$	0.94	$	0.92
Cash dividends declared per common share	$	0.14		$	0.14		$	0.14		$	0.12	$	0.12
Weighted average common shares outstanding	55,796			54,775			52,267			51,812		51,679
Dilutive potential common shares	966			1,812			4,160			4,152		4,047
Average common shares and dilutive common shares	56,762			56,587			56,427			55,964		55,726

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Period End Loan Balances - 5 Quarter Trends



	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2017			2017			2017			2016			2016
Balance:
Commercial	$	6,456,034		$	6,406,289		$	6,081,489		$	6,005,422		$	5,951,544
Commercial real estate	6,400,781			6,402,494			6,261,682			6,196,087			5,908,684
Home equity	672,969			689,483			708,258			725,793			742,868
Residential real estate	789,499			762,810			720,608			705,221			663,598
Premium finance receivables - commercial	2,664,912			2,648,386			2,446,946			2,478,581			2,430,233
Premium finance receivables - life insurance	3,795,474			3,719,043			3,593,563			3,470,027			3,283,359
Consumer and other	133,112			114,827			118,512			122,041			120,975
Total loans, net of unearned income, excluding covered loans	$	20,912,781		$	20,743,332		$	19,931,058		$	19,703,172		$	19,101,261
Covered loans	46,601			50,119			52,359			58,145			95,940
Total loans, net of unearned income	$	20,959,382		$	20,793,451		$	19,983,417		$	19,761,317		$	19,197,201
Mix:
Commercial	31		%	31		%	30		%	30		%	31		%
Commercial real estate	31			31			31			31			31
Home equity	3			3			4			4			4
Residential real estate	3			3			4			4			3
Premium finance receivables - commercial	13			13			12			12			13
Premium finance receivables - life insurance	18			18			18			18			17
Consumer and other	1			1			1			1			1
Total loans, net of unearned income, excluding covered loans	100		%	100		%	100		%	100		%	100		%
Covered loans	—			—			—			—			—
Total loans, net of unearned income	100		%	100		%	100		%	100		%	100		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Period End Deposits Balances - 5 Quarter Trends



	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2017			2017			2017			2016			2016
Balance:
Non-interest bearing	$	6,502,409		$	6,294,052		$	5,790,579		$	5,927,377		$	5,711,042
NOW and interest bearing demand deposits	2,273,025			2,459,238			2,484,676			2,624,442			2,552,611
Wealth management deposits ⁽¹⁾	2,171,758			2,464,162			2,390,464			2,209,617			2,283,233
Money market	4,607,995			4,449,385			4,555,752			4,441,811			4,421,631
Savings	2,673,201			2,419,463			2,287,958			2,180,482			1,977,661
Time certificates of deposit	4,666,675			4,519,392			4,221,012			4,274,903			4,201,477
Total deposits	$	22,895,063		$	22,605,692		$	21,730,441		$	21,658,632		$	21,147,655
Mix:
Non-interest bearing	28		%	28		%	27		%	27		%	27		%
NOW and interest bearing demand deposits	10			11			11			12			12
Wealth management deposits ⁽¹⁾	10			11			11			10			11
Money market	20			19			21			21			21
Savings	12			11			11			10			9
Time certificates of deposit	20			20			19			20			20
Total deposits	100		%	100		%	100		%	100		%	100		%


(1)	Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wayne Hummer Investments, trust and asset management customers of the Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts of the Banks.

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Net Interest Margin (Including Call Option Income) - 5 Quarter Trends



	Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2017			2017			2017			2016			2016
Net interest income - FTE	$	217,947		$	206,108		$	194,282		$	192,276		$	186,192
Call option income	1,143			890			759			1,476			3,633
Net interest income including call option income	$	219,090		$	206,998		$	195,041		$	193,752		$	189,825
Yield on earning assets	3.96		%	3.88		%	3.79		%	3.64		%	3.65		%
Rate on interest-bearing liabilities	0.73			0.63			0.58			0.58			0.58
Rate spread	3.23		%	3.25		%	3.21		%	3.06		%	3.07		%
Less: Fully tax-equivalent adjustment	(0.03		)	(0.02		)	(0.03		)	(0.02		)	(0.03		)
Net free funds contribution	0.23			0.18			0.18			0.17			0.17
Net interest margin (GAAP-derived)	3.43		%	3.41		%	3.36		%	3.21		%	3.21		%
Fully tax-equivalent adjustment	0.03			0.02			0.03			0.02			0.03
Net interest margin - FTE	3.46		%	3.43		%	3.39		%	3.23		%	3.24		%
Call option income	0.02			0.01			0.01			0.02			0.06
Net interest margin - FTE, including call option income	3.48		%	3.44		%	3.40		%	3.25		%	3.30		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Net Interest Margin (Including Call Option Income - YTD Trends)



	Nine Months Ended September 30,			Years Ended December 31,
(Dollars in thousands)	2017			2016			2015			2014			2013
Net interest income - FTE	$	618,337		$	728,145		$	646,238		$	601,744		$	552,887
Call option income	2,792			11,470			15,364			7,859			4,773
Net interest income including call option income	$	621,129		$	739,615		$	661,602		$	609,603		$	557,660
Yield on earning assets	3.88		%	3.67		%	3.76		%	3.96		%	4.01		%
Rate on interest-bearing liabilities	0.65			0.57			0.54			0.55			0.63
Rate spread	3.23		%	3.10		%	3.22		%	3.41		%	3.38		%
Less: Fully tax-equivalent adjustment	(0.03		)	(0.02		)	(0.02		)	(0.02		)	(0.01		)
Net free funds contribution	0.20			0.16			0.14			0.12			0.12
Net interest margin (GAAP-derived)	3.40		%	3.24		%	3.34		%	3.51		%	3.49		%
Fully tax-equivalent adjustment	0.03			0.02			0.02			0.02			0.01
Net interest margin - FTE	3.43		%	3.26		%	3.36		%	3.53		%	3.50		%
Call option income	0.02			0.05			0.08			0.05			0.03
Net interest margin - FTE, including call option income	3.45		%	3.31		%	3.44		%	3.58		%	3.53		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Quarterly Average Balances - 5 Quarter Trends



	Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
(In thousands)	2017			2017			2017			2016			2016
Interest-bearing deposits with banks and cash equivalents	$	1,003,572		$	722,349		$	780,752		$	1,251,677		$	851,385
Investment securities	2,652,119			2,572,619			2,395,625			2,477,708			2,692,691
FHLB and FRB stock	81,928			99,438			94,090			131,231			127,501
Liquidity management assets	$	3,737,619		$	3,394,406		$	3,270,467		$	3,860,616		$	3,671,577
Other earning assets	25,844			25,749			25,236			27,608			29,875
Loans, net of unearned income	21,195,222			20,599,718			19,923,606			19,711,504			19,071,621
Covered loans	48,415			51,823			56,872			59,827			101,570
Total earning assets	$	25,007,100		$	24,071,696		$	23,276,181		$	23,659,555		$	22,874,643
Allowance for loan and covered loan losses	(135,519		)	(132,053		)	(127,425		)	(122,665		)	(121,156		)
Cash and due from banks	242,186			242,495			229,588			221,892			240,239
Other assets	1,898,528			1,868,811			1,829,004			1,852,278			1,885,526
Total assets	$	27,012,295		$	26,050,949		$	25,207,348		$	25,611,060		$	24,879,252
Interest-bearing deposits	$	16,291,891		$	15,621,674		$	15,466,670		$	15,567,263		$	15,117,102
Federal Home Loan Bank advances	324,996			689,600			181,338			388,780			459,198
Other borrowings	268,850			240,547			255,012			240,174			249,307
Subordinated notes	139,035			139,007			138,980			138,953			138,925
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Total interest-bearing liabilities	$	17,278,338		$	16,944,394		$	16,295,566		$	16,588,736		$	16,218,098
Non-interest bearing deposits	6,419,326			5,904,679			5,787,034			5,902,439			5,566,983
Other liabilities	431,949			400,971			385,698			430,009			442,487
Equity	2,882,682			2,800,905			2,739,050			2,689,876			2,651,684
Total liabilities and shareholders’ equity	$	27,012,295		$	26,050,949		$	25,207,348		$	25,611,060		$	24,879,252

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Net Interest Margin - 5 Quarter Trends



	Three Months Ended
	September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016
Yield earned on:
Interest-bearing deposits with banks and cash equivalents	1.29	%	0.91	%	0.84	%	0.49	%	0.54	%
Investment securities	2.54		2.55		2.45		2.21		2.43
FHLB and FRB stock	5.23		4.66		4.61		3.47		3.41
Liquidity management assets	2.26	%	2.27	%	2.13	%	1.70	%	2.03	%
Other earning assets	2.49		2.53		2.95		3.37		2.96
Loans, net of unearned income	4.26		4.15		4.05		4.01		3.96
Covered loans	4.91		5.01		6.55		6.38		4.45
Total earning assets	3.96	%	3.88	%	3.79	%	3.64	%	3.65	%
Rate paid on:
Interest-bearing deposits	0.58	%	0.47	%	0.43	%	0.42	%	0.41	%
Federal Home Loan Bank advances	2.63		1.71		3.55		2.50		2.23
Other borrowings	2.19		1.92		1.81		1.78		1.81
Subordinated notes	5.10		5.14		5.10		5.12		5.12
Junior subordinated debentures	4.07		3.80		3.80		3.90		3.70
Total interest-bearing liabilities	0.73	%	0.63	%	0.58	%	0.58	%	0.58	%
Interest rate spread	3.23	%	3.25	%	3.21	%	3.06	%	3.07	%
Less: Fully tax-equivalent adjustment	(0.03	)	(0.02	)	(0.03	)	(0.02	)	(0.03	)
Net free funds/contribution	0.23		0.18		0.18		0.17		0.17
Net interest margin (GAAP)	3.43	%	3.41	%	3.36	%	3.21	%	3.21	%
Fully tax-equivalent adjustment	0.03		0.02		0.03		0.02		0.03
Net interest margin - FTE	3.46	%	3.43	%	3.39	%	3.23	%	3.24	%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Non-Interest Income - 5 Quarter Trends



	Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
(In thousands)	2017			2017			2017			2016			2016
Brokerage	$	5,127		$	5,449		$	6,220		$	6,408		$	6,752
Trust and asset management	14,676			14,456			13,928			13,104			12,582
Total wealth management	19,803			19,905			20,148			19,512			19,334
Mortgage banking	28,184			35,939			21,938			35,489			34,712
Service charges on deposit accounts	8,645			8,696			8,265			8,054			8,024
Gains (losses) on investment securities, net	39			47			(55		)	1,575			3,305
Fees from covered call options	1,143			890			759			1,476			3,633
Trading (losses) gains, net	(129		)	(420		)	(320		)	1,007			(432		)
Operating lease income, net	8,461			6,805			5,782			5,171			4,459
Other:
Interest rate swap fees	1,762			2,221			1,433			2,870			2,881
BOLI	897			888			985			981			884
Administrative services	1,052			986			1,024			1,115			1,151
Loss on extinguishment of debt	—			—			—			(717		)	—
Early pay-offs of leases	—			10			1,211			728			—
Miscellaneous	9,874			14,005			7,595			8,014			8,653
Total other income	13,585			18,110			12,248			12,991			13,569
Total Non-Interest Income	$	79,731		$	89,972		$	68,765		$	85,275		$	86,604

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Non-Interest Expense - 5 Quarter Trends



	Three Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,
(In thousands)	2017		2017		2017		2016		2016
Salaries and employee benefits:
Salaries	$	57,689	$	55,215	$	55,008	$	53,108	$	54,309
Commissions and incentive compensation	32,095		34,050		26,643		35,744		33,740
Benefits	16,467		17,237		17,665		15,883		15,669
Total salaries and employee benefits	106,251		106,502		99,316		104,735		103,718
Equipment	9,947		9,909		9,002		9,532		9,449
Operating lease equipment depreciation	6,794		5,662		4,636		4,219		3,605
Occupancy, net	13,079		12,586		13,101		14,254		12,767
Data processing	7,851		7,804		7,925		7,687		7,432
Advertising and marketing	9,572		8,726		5,150		6,691		7,365
Professional fees	6,786		7,510		4,660		5,425		5,508
Amortization of other intangible assets	1,068		1,141		1,164		1,158		1,085
FDIC insurance	3,877		3,874		4,156		4,726		3,686
OREO expense, net	590		739		1,665		1,843		1,436
Other:
Commissions - 3rd party brokers	990		1,033		1,098		1,165		1,362
Postage	1,814		2,080		1,442		1,955		1,889
Miscellaneous	14,956		15,978		14,803		16,981		17,313
Total other expense	17,760		19,091		17,343		20,101		20,564
Total Non-Interest Expense	$	183,575	$	183,544	$	168,118	$	180,371	$	176,615

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Allowance for Credit Losses, excluding covered loans - 5 Quarter Trends



	Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2017			2017			2017			2016			2016
Allowance for loan losses at beginning of period	$	129,591		$	125,819		$	122,291		$	117,693		$	114,356
Provision for credit losses	7,942			8,952			5,316			7,357			9,741
Other adjustments	(39		)	(30		)	(56		)	33			(112		)
Reclassification (to) from allowance for unfunded lending-related commitments	94			106			(138		)	(25		)	(579		)
Charge-offs:
Commercial	2,265			913			641			3,054			3,469
Commercial real estate	989			1,985			261			375			382
Home equity	968			1,631			625			326			574
Residential real estate	267			146			329			410			134
Premium finance receivables - commercial	1,716			1,878			1,427			1,843			1,959
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	213			175			134			205			389
Total charge-offs	6,418			6,728			3,417			6,213			6,907
Recoveries:
Commercial	801			561			273			668			176
Commercial real estate	323			276			554			1,916			364
Home equity	178			144			65			300			65
Residential real estate	55			54			178			21			61
Premium finance receivables - commercial	499			404			612			498			456
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	93			33			141			43			72
Total recoveries	1,949			1,472			1,823			3,446			1,194
Net charge-offs	(4,469		)	(5,256		)	(1,594		)	(2,767		)	(5,713		)
Allowance for loan losses at period end	$	133,119		$	129,591		$	125,819		$	122,291		$	117,693
Allowance for unfunded lending-related commitments at period end	1,276			1,705			1,811			1,673			1,648
Allowance for credit losses at period end	$	134,395		$	131,296		$	127,630		$	123,964		$	119,341
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial	0.09		%	0.02		%	0.03		%	0.16		%	0.24		%
Commercial real estate	0.04			0.11			(0.02		)	(0.10		)	0.00
Home equity	0.46			0.85			0.32			0.01			0.27
Residential real estate	0.08			0.03			0.06			0.13			0.03
Premium finance receivables - commercial	0.18			0.23			0.13			0.22			0.24
Premium finance receivables - life insurance	0.00			0.00			0.00			0.00			0.00
Consumer and other	0.37			0.45			(0.02		)	0.47			0.92
Total loans, net of unearned income, excluding covered loans	0.08		%	0.10		%	0.03		%	0.06		%	0.12		%
Net charge-offs as a percentage of the provision for credit losses	56.27		%	58.71		%	29.98		%	37.61		%	58.65		%
Loans at period-end	$	20,912,781		$	20,743,332		$	19,931,058		$	19,703,172		$	19,101,261
Allowance for loan losses as a percentage of loans at period end	0.64		%	0.62		%	0.63		%	0.62		%	0.62		%
Allowance for credit losses as a percentage of loans at period end	0.64		%	0.63		%	0.64		%	0.63		%	0.62		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Non-Performing Assets, excluding covered assets - 5 Quarter Trends



	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2017			2017			2017			2016			2016
Loans past due greater than 90 days and still accruing⁽¹⁾:
Commercial	$	—		$	—		$	100		$	174		$	—
Commercial real estate	—			—			—			—			—
Home equity	—			—			—			—			—
Residential real estate	—			179			—			—			—
Premium finance receivables - commercial	9,584			5,922			4,991			7,962			7,754
Premium finance receivables - life insurance	6,740			1,046			2,024			3,717			—
Consumer and other	159			63			104			144			60
Total loans past due greater than 90 days and still accruing	16,483			7,210			7,219			11,997			7,814
Non-accrual loans:
Commercial	13,931			10,191			14,307			15,875			16,418
Commercial real estate	14,878			16,980			20,809			21,924			22,625
Home equity	7,581			9,482			11,722			9,761			9,309
Residential real estate	14,743			14,292			11,943			12,749			12,205
Premium finance receivables - commercial	9,827			10,456			12,629			14,709			14,214
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	540			439			350			439			543
Total non-accrual loans	61,500			61,840			71,760			75,457			75,314
Total non-performing loans:
Commercial	13,931			10,191			14,407			16,049			16,418
Commercial real estate	14,878			16,980			20,809			21,924			22,625
Home equity	7,581			9,482			11,722			9,761			9,309
Residential real estate	14,743			14,471			11,943			12,749			12,205
Premium finance receivables - commercial	19,411			16,378			17,620			22,671			21,968
Premium finance receivables - life insurance	6,740			1,046			2,024			3,717			—
Consumer and other	699			502			454			583			603
Total non-performing loans	$	77,983		$	69,050		$	78,979		$	87,454		$	83,128
Other real estate owned	17,312			16,853			17,090			17,699			19,933
Other real estate owned - from acquisitions	20,066			22,508			22,774			22,583			15,117
Other repossessed assets	301			532			544			581			428
Total non-performing assets	$	115,662		$	108,943		$	119,387		$	128,317		$	118,606
TDRs performing under the contractual terms of the loan agreement	$	26,972		$	28,008		$	28,392		$	29,911		$	29,440
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.22		%	0.16		%	0.24		%	0.27		%	0.28		%
Commercial real estate	0.23			0.27			0.33			0.35			0.38
Home equity	1.13			1.38			1.66			1.34			1.25
Residential real estate	1.87			1.90			1.66			1.81			1.84
Premium finance receivables - commercial	0.73			0.62			0.72			0.91			0.90
Premium finance receivables - life insurance	0.18			0.03			0.06			0.11			—
Consumer and other	0.53			0.44			0.38			0.48			0.50
Total loans, net of unearned income	0.37		%	0.33		%	0.40		%	0.44		%	0.44		%
Total non-performing assets as a percentage of total assets	0.42		%	0.40		%	0.46		%	0.50		%	0.47		%
Allowance for loan losses as a percentage of total non-performing loans	170.70		%	187.68		%	159.31		%	139.83		%	141.58		%


(1)	As of the dates shown, no TDRs were past due greater than 90 days and still accruing interest.


(2)	Non-accrual loans included TDRs totaling $6.2 million, $5.1 million, $11.3 million, $11.8 million and $14.8 million as of September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, respectively.

WINTRUST FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 18, 2017

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