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

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8-K - 8-K - WINTRUST FINANCIAL CORP	a8-kq32016.htm

Exhibit 99.1

Wintrust Financial Corporation

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

News Release




FOR IMMEDIATE RELEASE		October 17, 2016

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 2016 Net Income, an Increase of 38% Over Prior Year, and Year-to-Date 2016 Net Income of $152.3 million, an Increase of 26% Over Prior Year

ROSEMONT, ILLINOIS – Wintrust Financial Corporation (“Wintrust” or “the Company”) (Nasdaq: WTFC) announced net income of $53.1 million or $0.92 per diluted common share for the third quarter of 2016 compared to net income of $50.0 million or $0.90 per diluted common share for the second quarter of 2016 and $38.4 million or $0.69 per diluted common share for the third quarter of 2015. The Company recorded net income of $152.3 million or $2.72 per diluted common share for the first nine months of 2016 compared to net income of $121.2 million or $2.29 per diluted common share for the same period of 2015.

Highlights of the Third Quarter of 2016 *:


•	Total assets increased by 15% on an annualized basis and now exceed $25 billion.


•	Total loans, excluding covered loans and mortgage loans held-for-sale, increased by $927 million, or 20% on an annualized basis, to $19.1 billion. Loan growth included $555 million of select performing loans acquired from an affiliate of GE Capital Franchise Finance, which was completed in mid-August.


•	Total deposits increased by $1.1 billion, or 22% on an annualized basis, to $21.1 billion. Non-interest bearing deposit accounts comprise 27% of total deposits.


•	Mortgage banking revenue remained strong, totaling $34.7 million during the third quarter as origination volumes increased to $1.3 billion in the third quarter compared to $1.2 billion in the second quarter.


•	Net overhead ratio improved to 1.44% from 1.46% remaining below our stated goal of 1.50%.


•	Non-performing loans as a percentage of total loans, excluding covered loans, decreased to 0.44% from 0.48% and the allowance for loan losses as a percentage of total non-performing loans, excluding covered loans, increased to 142% from 130%.


•	Net interest income increased $9.4 million primarily as a result of earning assets growth. Although loan yields increased, net interest margin dropped 3 basis points primarily due to a decrease in yields on liquidity management assets brought about by market conditions.


•	Gains on investment securities totaled $3.3 million.


•	Recorded a $2.5 million negative fair value adjustment related to mortgage servicing rights assets.


•	Recorded a $1.8 million charge related to outstanding legal disputes, including a $1.5 million adverse arbitration award relating to a previously disclosed claim.

* 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, “The growth engine at Wintrust continued its momentum into the third quarter as we recorded nearly $1 billion of asset growth while controlling operating expenses as evidenced by the improvement of our net overhead ratio to 1.44% for the quarter. All aspects of our business performed solidly in the third quarter as evidenced by our record level of net income. Continued strong loan growth and mortgage banking operations, improved credit quality metrics and an improved net overhead ratio fueled the record results this quarter."

Mr. Wehmer continued, “Excluding covered loans and mortgage loans held-for-sale, our loan portfolio grew by $927 million during the third quarter, which included $555 million of select performing loans and related relationships acquired from an affiliate of GE Capital Franchise Finance. The increased loan volumes offset compression in the net interest margin during the

quarter due to a reduction in yield on liquidity management assets, resulting in an increase in net interest income of $9.4 million. Our loan pipelines remain consistently strong and we are well positioned for rising interest rates in the future. Deposit growth continued to be strong in the third quarter of 2016 as deposits increased $1.1 billion and exceeded $21 billion as of the end of the third quarter. Total deposit growth included $343 million of growth from demand deposits, which now totals $5.7 billion and comprises 27% of our overall deposit base."

Commenting on credit quality, Mr. Wehmer noted, “During the third quarter of 2016, the Company has continued its practice of timely addressing and resolving non-performing credits. Total non-performing assets, excluding covered assets, decreased by $8.0 million during the third quarter of 2016 resulting in non-performing assets as a percentage of total assets dropping from 0.52% to 0.47% during the period. Additionally, the allowance for loan losses as a percentage of non-performing loans, excluding covered loans, increased to 142% during the third quarter, exhibiting greater coverage for those non-performing credits. We believe that the Company's reserves remain appropriate."

Mr. Wehmer further commented, “Mortgage banking revenue in the third quarter totaled $34.7 million, a decrease of $2.1 million compared to the second quarter of 2016. Revenue for the third quarter of 2016 was negatively impacted by a $2.5 million valuation adjustment on mortgage servicing rights assets. Our mortgage operations experienced record origination volumes in the third quarter totaling $1.3 billion for the period compared to $1.2 billion during the second quarter of 2016. We expect normal seasonality in the fourth quarter, although our mortgage loan pipelines remain strong."

Turning to the future, Mr. Wehmer stated, “Wintrust is continuing to take a steady and measured approach to achieve our main objectives of growing franchise value, increasing profitability, leveraging our expense infrastructure and increasing shareholder value. We expect continued growth and momentum in all areas of our business. The acquisition of select performing loans from an affiliate of GE Capital Franchise Finance is expected to help expand our franchise lending business. Also, the previously announced acquisition of First Community Financial Corporation located in Elgin, Illinois is expected to be completed in the fourth quarter of 2016. Evaluating strategic acquisitions and organic branch growth will continue to 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 2016.

Wintrust’s key operating measures and growth rates for the third quarter of 2016, as compared to the sequential and linked quarters, are shown in the table below:



										% or⁽⁴⁾ basis point (bp)change from 2nd Quarter 2016			% or basis point (bp) change from 3rd Quarter 2015
	Three Months Ended
(Dollars in thousands)	September 30, 2016			June 30, 2016			September 30, 2015
Net income	$	53,115		$	50,041		$	38,355		6		%	38		%
Net income per common share – diluted	$	0.92		$	0.90		$	0.69		2		%	33		%
Net revenue ⁽¹⁾	$	271,240		$	260,069		$	230,493		4		%	18		%
Net interest income	$	184,636		$	175,270		$	165,540		5		%	12		%
Net interest margin	3.21		%	3.24		%	3.31		%	(3	)	bp	(10	)	bp
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.24		%	3.27		%	3.33		%	(3	)	bp	(9	)	bp
Net overhead ratio ⁽³⁾	1.44		%	1.46		%	1.74		%	(2	)	bp	(30	)	bp
Return on average assets	0.85		%	0.85		%	0.70		%	—		bp	15		bp
Return on average common equity	8.20		%	8.43		%	6.60		%	(23	)	bp	160		bp
Return on average tangible common equity (non-GAAP) ⁽²⁾	10.55		%	11.12		%	8.88		%	(57	)	bp	167		bp
At end of period
Total assets	$	25,321,759		$	24,420,616		$	22,035,216		15		%	15		%
Total loans, excluding loans held-for-sale, excluding covered loans	19,101,261			18,174,655			16,316,211			20		%	17		%
Total loans, including loans held-for-sale, excluding covered loans	19,660,895			18,728,911			16,663,216			20		%	18		%
Total deposits	21,147,655			20,041,750			18,228,469			22		%	16		%
Total shareholders’ equity	2,674,474			2,623,595			2,335,736			8		%	15		%


(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 web site 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, 2016			June 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Selected Financial Condition Data (at end of period):
Total assets	$	25,321,759		$	24,420,616		$	22,035,216
Total loans, excluding loans held-for-sale and covered loans	19,101,261			18,174,655			16,316,211
Total deposits	21,147,655			20,041,750			18,228,469
Junior subordinated debentures	253,566			253,566			268,566
Total shareholders’ equity	2,674,474			2,623,595			2,335,736
Selected Statements of Income Data:
Net interest income	$	184,636		$	175,270		$	165,540		$	531,415		$	474,323
Net revenue ⁽¹⁾	271,240			260,069			230,493			771,570			680,830
Net income	53,115			50,041			38,355			152,267			121,238
Net income per common share – Basic	$	0.96		$	0.94		$	0.71		$	2.84		$	2.39
Net income per common share – Diluted	$	0.92		$	0.90		$	0.69		$	2.72		$	2.29
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin	3.21		%	3.24		%	3.31		%	3.25		%	3.36		%
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.24		%	3.27		%	3.33		%	3.27		%	3.39		%
Non-interest income to average assets	1.38		%	1.44		%	1.19		%	1.35		%	1.34		%
Non-interest expense to average assets	2.82		%	2.89		%	2.93		%	2.81		%	3.00		%
Net overhead ratio ⁽³⁾	1.44		%	1.46		%	1.74		%	1.46		%	1.66		%
Return on average assets	0.85		%	0.85		%	0.70		%	0.85		%	0.79		%
Return on average common equity	8.20		%	8.43		%	6.60		%	8.39		%	7.53		%
Return on average tangible common equity (non-GAAP) ⁽²⁾	10.55		%	11.12		%	8.88		%	10.98		%	9.90		%
Average total assets	$	24,879,252		$	23,754,755		$	21,679,062		$	23,849,412		$	20,586,924
Average total shareholders’ equity	2,651,684			2,465,732			2,310,511			2,502,940			2,194,384
Average loans to average deposits ratio (excluding loans held-for-sale, excluding covered loans)	89.8		%	92.4		%	89.7		%	91.4		%	89.8		%
Average loans to average deposits ratio (excluding loans held-for-sale, including covered loans)	90.3		%	92.9		%	90.6		%	92.0		%	91.0		%
Common Share Data at end of period:
Market price per common share	$	55.57		$	51.00		$	53.43
Book value per common share ⁽²⁾	$	46.86		$	45.96		$	43.12
Tangible common book value per share ⁽²⁾	$	37.06		$	36.12		$	32.83
Common shares outstanding	51,714,683			51,619,155			48,336,870
Other Data at end of period:⁽⁶⁾
Leverage Ratio ⁽⁴⁾	9.0		%	9.2		%	9.2		%
Tier 1 capital to risk-weighted assets ⁽⁴⁾	9.8		%	10.1		%	10.3		%
Common equity Tier 1 capital to risk-weighted assets ⁽⁴⁾	8.7		%	8.9		%	8.6		%
Total capital to risk-weighted assets ⁽⁴⁾	12.1		%	12.4		%	12.6		%
Allowance for credit losses ⁽⁵⁾	$	119,341		$	115,426		$	103,922
Non-performing loans	$	83,128		$	88,119		$	85,976
Allowance for credit losses to total loans ⁽⁵⁾	0.62		%	0.64		%	0.64		%
Non-performing loans to total loans	0.44		%	0.48		%	0.53		%
Number of:
Bank subsidiaries	15			15			15
Banking offices	152			153			160


(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. As of January 1, 2015 capital ratios are calculated under the requirements of Basel III.


(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, 2016			December 31, 2015			September 30, 2015
Assets
Cash and due from banks	$	242,825		$	271,454		$	247,341
Federal funds sold and securities purchased under resale agreements	4,122			4,341			3,314
Interest bearing deposits with banks	816,104			607,782			701,106
Available-for-sale securities, at fair value	1,650,096			1,716,388			2,214,281
Held-to-maturity securities, at amortized cost	932,767			884,826			—
Trading account securities	1,092			448			3,312
Federal Home Loan Bank and Federal Reserve Bank stock	129,630			101,581			90,308
Brokerage customer receivables	25,511			27,631			28,293
Mortgage loans held-for-sale	559,634			388,038			347,005
Loans, net of unearned income, excluding covered loans	19,101,261			17,118,117			16,316,211
Covered loans	95,940			148,673			168,609
Total loans	19,197,201			17,266,790			16,484,820
Allowance for loan losses	(117,693		)	(105,400		)	(102,996		)
Allowance for covered loan losses	(1,422		)	(3,026		)	(2,918		)
Net loans	19,078,086			17,158,364			16,378,906
Premises and equipment, net	597,263			592,256			587,348
Lease investments, net	116,355			63,170			29,111
Accrued interest receivable and other assets	660,923			597,099			629,211
Trade date securities receivable	677			—			277,981
Goodwill	485,938			471,761			472,166
Other intangible assets	20,736			24,209			25,533
Total assets	$	25,321,759		$	22,909,348		$	22,035,216
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	5,711,042		$	4,836,420		$	4,705,994
Interest bearing	15,436,613			13,803,214			13,522,475
Total deposits	21,147,655			18,639,634			18,228,469
Federal Home Loan Bank advances	419,632			853,431			443,955
Other borrowings	241,366			265,785			259,805
Subordinated notes	138,943			138,861			138,834
Junior subordinated debentures	253,566			268,566			268,566
Trade date securities payable	—			538			617
Accrued interest payable and other liabilities	446,123			390,259			359,234
Total liabilities	22,647,285			20,557,074			19,699,480
Shareholders’ Equity:
Preferred stock	251,257			251,287			251,312
Common stock	51,811			48,469			48,422
Surplus	1,356,759			1,190,988			1,187,407
Treasury stock	(4,522		)	(3,973		)	(3,964		)
Retained earnings	1,051,748			928,211			901,652
Accumulated other comprehensive loss	(32,579		)	(62,708		)	(49,093		)
Total shareholders’ equity	2,674,474			2,352,274			2,335,736
Total liabilities and shareholders’ equity	$	25,321,759		$	22,909,348		$	22,035,216

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



	Three Months Ended									Nine Months Ended
(In thousands, except per share data)	September 30, 2016			June 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Interest income
Interest and fees on loans	$	190,189		$	178,530		$	167,831		$	541,846		$	482,330
Interest bearing deposits with banks	1,156			793			372			2,695			993
Federal funds sold and securities purchased under resale agreements	1			1			1			3			4
Investment securities	15,496			16,398			16,130			49,084			44,601
Trading account securities	18			14			19			43			83
Federal Home Loan Bank and Federal Reserve Bank stock	1,094			1,112			821			3,143			2,375
Brokerage customer receivables	195			216			205			630			591
Total interest income	208,149			197,064			185,379			597,444			530,977
Interest expense
Interest on deposits	15,621			13,594			12,436			41,996			36,246
Interest on Federal Home Loan Bank advances	2,577			2,984			2,458			8,447			6,426
Interest on other borrowings	1,137			1,086			1,045			3,281			2,620
Interest on subordinated notes	1,778			1,777			1,776			5,332			5,328
Interest on junior subordinated debentures	2,400			2,353			2,124			6,973			6,034
Total interest expense	23,513			21,794			19,839			66,029			56,654
Net interest income	184,636			175,270			165,540			531,415			474,323
Provision for credit losses	9,571			9,129			8,322			26,734			23,883
Net interest income after provision for credit losses	175,065			166,141			157,218			504,681			450,440
Non-interest income
Wealth management	19,334			18,852			18,243			56,506			54,819
Mortgage banking	34,712			36,807			27,887			93,254			91,694
Service charges on deposit accounts	8,024			7,726			7,403			23,156			20,174
Gains (losses) on investment securities, net	3,305			1,440			(98		)	6,070			402
Fees from covered call options	3,633			4,649			2,810			9,994			11,735
Trading losses, net	(432		)	(316		)	(135		)	(916		)	(452		)
Operating lease income, net	4,459			4,005			613			11,270			755
Other	13,569			11,636			8,230			40,821			27,380
Total non-interest income	86,604			84,799			64,953			240,155			206,507
Non-interest expense
Salaries and employee benefits	103,718			100,894			97,749			300,423			282,300
Equipment	9,449			9,307			8,456			27,523			24,090
Operating lease equipment depreciation	3,605			3,385			431			9,040			547
Occupancy, net	12,767			11,943			12,066			36,658			35,818
Data processing	7,432			7,138			8,127			21,089			19,656
Advertising and marketing	7,365			6,941			6,237			18,085			16,550
Professional fees	5,508			5,419			4,100			14,986			13,838
Amortization of other intangible assets	1,085			1,248			1,350			3,631			3,297
FDIC insurance	3,686			4,040			3,035			11,339			9,069
OREO expense, net	1,436			1,348			(367		)	3,344			1,885
Other	20,564			19,306			18,790			55,196			54,539
Total non-interest expense	176,615			170,969			159,974			501,314			461,589
Income before taxes	85,054			79,971			62,197			243,522			195,358
Income tax expense	31,939			29,930			23,842			91,255			74,120
Net income	$	53,115		$	50,041		$	38,355		$	152,267		$	121,238
Preferred stock dividends and discount accretion	3,628			3,628			4,079			10,884			7,240
Net income applicable to common shares	$	49,487		$	46,413		$	34,276		$	141,383		$	113,998
Net income per common share - Basic	$	0.96		$	0.94		$	0.71		$	2.84		$	2.39
Net income per common share - Diluted	$	0.92		$	0.90		$	0.69		$	2.72		$	2.29
Cash dividends declared per common share	$	0.12		$	0.12		$	0.11		$	0.36		$	0.33
Weighted average common shares outstanding	51,679			49,140			48,158			49,763			47,658
Dilutive potential common shares	4,047			3,965			4,049			3,931			4,141
Average common shares and dilutive common shares	55,726			53,105			52,207			53,694			51,799

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, 2016		June 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Net income		$	53,115	$	50,041	$	38,355	$	152,267	$	121,238
Less: Preferred stock dividends and discount accretion		3,628		3,628		4,079		10,884		7,240
Net income applicable to common shares—Basic	(A)	49,487		46,413		34,276		141,383		113,998
Add: Dividends on convertible preferred stock, if dilutive		1,578		1,578		1,579		4,735		4,740
Net income applicable to common shares—Diluted	(B)	51,065		47,991		35,855		146,118		118,738
Weighted average common shares outstanding	(C)	51,679		49,140		48,158		49,763		47,658
Effect of dilutive potential common shares:
Common stock equivalents		938		856		978		822		1,070
Convertible preferred stock, if dilutive		3,109		3,109		3,071		3,109		3,071
Weighted average common shares and effect of dilutive potential common shares	(D)	55,726		53,105		52,207		53,694		51,799
Net income per common share:
Basic	(A/C)	$	0.96	$	0.94	$	0.71	$	2.84	$	2.39
Diluted	(B/D)	$	0.92	$	0.90	$	0.69	$	2.72	$	2.29

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, net income applicable to common shares is not adjusted by the associated preferred dividends.

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), net interest margin (including its individual components), the 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 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)	2016			2016			2016			2015			2015			2016			2015
Calculation of Net Interest Margin and Efficiency Ratio
(A) Interest Income (GAAP)	$	208,149		$	197,064		$	192,231		$	187,487		$	185,379		$	597,444		$	530,977
Taxable-equivalent adjustment:
- Loans	584			523			509			430			346			1,616			1,001
- Liquidity Management Assets	963			932			920			866			841			2,815			2,355
- Other Earning Assets	9			8			6			13			10			23			44
(B) Interest Income - FTE	$	209,705		$	198,527		$	193,666		$	188,796		$	186,576		$	601,898		$	534,377
(C) Interest Expense (GAAP)	23,513			21,794			20,722			20,281			19,839			66,029			56,654
(D) Net Interest Income - FTE (B minus C)	$	186,192		$	176,733		$	172,944		$	168,515		$	166,737		$	535,869		$	477,723
(E) Net Interest Income (GAAP) (A minus C)	$	184,636		$	175,270		$	171,509		$	167,206		$	165,540		$	531,415		$	474,323
Net interest margin (GAAP-derived)	3.21		%	3.24		%	3.29		%	3.26		%	3.31		%	3.25		%	3.36		%
Net interest margin - FTE	3.24		%	3.27		%	3.32		%	3.29		%	3.33		%	3.27		%	3.39		%
(F) Non-interest income	$	86,604		$	84,799		$	68,752		$	65,090		$	64,953		$	240,155		$	206,507
(G) Gains (losses) on investment securities, net	3,305			1,440			1,325			(79		)	(98		)	6,070			402
(H) Non-interest expense	176,615			170,969			153,730			166,829			159,974			501,314			461,589
Efficiency ratio (H/(E+F-G))	65.92		%	66.11		%	64.34		%	71.79		%	69.38		%	65.49		%	67.84		%
Efficiency ratio - FTE (H/(D+F-G))	65.54		%	65.73		%	63.96		%	71.39		%	69.02		%	65.11		%	67.50		%
Calculation of Tangible Common Equity ratio (at period end)
Total shareholders’ equity	$	2,674,474		$	2,623,595		$	2,418,442		$	2,352,274		$	2,335,736
(I) Less: Convertible preferred stock	(126,257		)	(126,257		)	(126,257		)	(126,287		)	(126,312		)
Less: Non-convertible preferred stock	(125,000		)	(125,000		)	(125,000		)	(125,000		)	(125,000		)
Less: Intangible assets	(506,674		)	(507,916		)	(508,005		)	(495,970		)	(497,699		)
(J) Total tangible common shareholders’ equity	$	1,916,543		$	1,864,422		$	1,659,180		$	1,605,017		$	1,586,725
Total assets	$	25,321,759		$	24,420,616		$	23,488,168		$	22,909,348		$	22,035,216
Less: Intangible assets	(506,674		)	(507,916		)	(508,005		)	(495,970		)	(497,699		)
(K) Total tangible assets	$	24,815,085		$	23,912,700		$	22,980,163		$	22,413,378		$	21,537,517
Tangible common equity ratio (J/K)	7.7		%	7.8		%	7.2		%	7.2		%	7.4		%
Tangible common equity ratio, assuming full conversion of convertible preferred stock ((J-I)/K)	8.2		%	8.3		%	7.8		%	7.7		%	8.0		%
Calculation of book value per share
Total shareholders’ equity	$	2,674,474		$	2,623,595		$	2,418,442		$	2,352,274		$	2,335,736
Less: Preferred stock	(251,257		)	(251,257		)	(251,257		)	(251,287		)	(251,312		)
(L) Total common equity	$	2,423,217		$	2,372,338		$	2,167,185		$	2,100,987		$	2,084,424
(M) Actual common shares outstanding	51,715			51,619			48,519			48,383			48,337
Book value per common share (L/M)	$	46.86		$	45.96		$	44.67		$	43.42		$	43.12
Tangible common book value per share (J/M)	$	37.06		$	36.12		$	34.20		$	33.17		$	32.83



Calculation of return on average common equity
(N) Net income applicable to common shares	49,487		46,413		45,483		31,883		34,276		141,383		113,998
Add: After-tax intangible asset amortization	677		781		812		834		833		2,270		2,046
(O) Tangible net income applicable to common shares	50,164		47,194		46,295		32,717		35,109		143,653		116,044
Total average shareholders' equity	2,651,684		2,465,732		2,389,770		2,347,545		2,310,511		2,502,940		2,194,384
Less: Average preferred stock	(251,257	)	(251,257	)	(251,262	)	(251,293	)	(251,312	)	(251,259	)	(171,238	)
(P) Total average common shareholders' equity	2,400,427		2,214,475		2,138,508		2,096,252		2,059,199		2,251,681		2,023,146
Less: Average intangible assets	(508,812	)	(507,439	)	(495,594	)	(497,199	)	(490,583	)	(503,966	)	(455,787	)
(Q) Total average tangible common shareholders’ equity	1,891,615		1,707,036		1,642,914		1,599,053		1,568,616		1,747,715		1,567,359
Return on average common equity, annualized (N/P)	8.20	%	8.43	%	8.55	%	6.03	%	6.60	%	8.39	%	7.53	%
Return on average tangible common equity, annualized (O/Q)	10.55	%	11.12	%	11.33	%	8.12	%	8.88	%	10.98	%	9.90	%

LOANS

Loan Portfolio Mix and Growth Rates



										% Growth
(Dollars in thousands)	September 30, 2016			December 31, 2015			September 30, 2015			From ⁽¹⁾ December 31, 2015		From September 30, 2015
Balance:
Commercial	$	5,951,544		$	4,713,909		$	4,400,185		35	%	35	%
Commercial real estate	5,908,684			5,529,289			5,307,566			9		11
Home equity	742,868			784,675			797,465			(7	)	(7	)
Residential real estate	663,598			607,451			571,743			12		16
Premium finance receivables - commercial	2,430,233			2,374,921			2,407,075			3		1
Premium finance receivables - life insurance	3,283,359			2,961,496			2,700,275			15		22
Consumer and other	120,975			146,376			131,902			(23	)	(8	)
Total loans, net of unearned income, excluding covered loans	$	19,101,261		$	17,118,117		$	16,316,211		15	%	17	%
Covered loans	95,940			148,673			168,609			(47	)	(43	)
Total loans, net of unearned income	$	19,197,201		$	17,266,790		$	16,484,820		15	%	16	%
Mix:
Commercial	31		%	27		%	27		%
Commercial real estate	31			32			32
Home equity	4			5			5
Residential real estate	3			3			3
Premium finance receivables - commercial	13			14			15
Premium finance receivables - life insurance	17			17			16
Consumer and other	1			1			1
Total loans, net of unearned income, excluding covered loans	100		%	99		%	99		%
Covered loans	—			1			1
Total loans, net of unearned income	100		%	100		%	100		%


(1)	Annualized

Commercial and Commercial Real Estate Loan Portfolios




As of September 30, 2016			% 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	$	3,605,516	30.4	%	$	15,809	$	—	$	29,087
Franchise	874,745		7.4		—		—		3,357
Mortgage warehouse lines of credit	309,632		2.6		—		—		2,241
Asset-based lending	845,719		7.2		234		—		6,728
Leases	299,953		2.5		375		—		893
PCI - commercial loans ⁽¹⁾	15,979		0.1		—		1,783		732
Total commercial	$	5,951,544	50.2	%	$	16,418	$	1,783	$	43,038
Commercial Real Estate:
Construction	$	451,477	3.8	%	$	400	$	—	$	4,778
Land	107,701		0.9		1,208		—		3,577
Office	884,082		7.5		3,609		—		6,003
Industrial	767,504		6.5		9,967		—		6,353
Retail	895,341		7.5		909		—		6,063
Multi-family	794,955		6.7		90		—		7,966
Mixed use and other	1,851,507		15.6		6,442		—		13,586
PCI - commercial real estate ⁽¹⁾	156,117		1.3		—		21,433		22
Total commercial real estate	$	5,908,684	49.8	%	$	22,625	$	21,433	$	48,348
Total commercial and commercial real estate	$	11,860,228	100.0	%	$	39,043	$	23,216	$	91,386

Commercial real estate - collateral location by state:
Illinois	$	4,652,758	78.8	%
Wisconsin	646,116		10.9
Total primary markets	$	5,298,874	89.7	%
Indiana	111,206		1.9
Florida	77,836		1.3
Arizona	45,620		0.8
California	38,195		0.6
Other (no individual state greater than 0.7%)	336,953		5.7
Total	$	5,908,684	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, 2016			December 31, 2015			September 30, 2015			From ⁽¹⁾ December 31, 2015		From September 30, 2015
Balance:
Non-interest bearing	$	5,711,042		$	4,836,420		$	4,705,994		24	%	21	%
NOW and interest bearing demand deposits	2,552,611			2,390,217			2,231,258			9		14
Wealth management deposits ⁽²⁾	2,283,233			1,643,653			1,469,920			52		55
Money market	4,421,631			4,041,300			4,001,518			13		10
Savings	1,977,661			1,723,367			1,684,007			20		17
Time certificates of deposit	4,201,477			4,004,677			4,135,772			7		2
Total deposits	$	21,147,655		$	18,639,634		$	18,228,469		18	%	16	%
Mix:
Non-interest bearing	27		%	26		%	26		%
NOW and interest bearing demand deposits	12			13			12
Wealth management deposits ⁽²⁾	11			9			8
Money market	21			22			22
Savings	9			9			9
Time certificates of deposit	20			21			23
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, 2016



(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	$	—	$	53,575	$	138,228	$	697,340	$	889,143	0.62	%
4-6 months	—		33,497		—		655,169		688,666		0.72	%
7-9 months	43,570		24,529		—		503,267		571,366		0.75	%
10-12 months	531		21,464		—		530,905		552,900		0.81	%
13-18 months	2,744		16,479		—		1,016,558		1,035,781		1.10	%
19-24 months	3,021		8,259		—		162,251		173,531		0.91	%
24+ months	1,249		13,232		—		275,609		290,090		1.29	%
Total	$	51,115	$	171,035	$	138,228	$	3,841,099	$	4,201,477	0.86	%


(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 2016 compared to the second quarter of 2016 (sequential quarters) and third quarter of 2015 (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, 2016			June 30, 2016			September 30, 2015			September 30, 2016			June 30, 2016			September 30, 2015			September 30, 2016		June 30, 2016		September 30, 2015
Liquidity management assets⁽¹⁾ ₍₂₎₍₇₎	$	3,671,577		$	3,413,113		$	3,140,782		$	18,710		$	19,236		$	18,165		2.03	%	2.27	%	2.29	%
Other earning assets^(2)(3)(7)	29,875			29,759			30,990			222			238			234			2.96		3.21		3.00
Loans, net of unearned income _(2)(4)(7)	19,071,621			18,204,552			16,509,001			189,637			177,571			165,572			3.96		3.92		3.98
Covered loans	101,570			109,533			174,768			1,136			1,482			2,605			4.45		5.44		5.91
Total earning assets⁽⁷⁾	$	22,874,643		$	21,756,957		$	19,855,541		$	209,705		$	198,527		$	186,576		3.65	%	3.67	%	3.73	%
Allowance for loan and covered loan losses	(121,156		)	(116,984		)	(106,091		)
Cash and due from banks	240,239			272,935			251,289
Other assets	1,885,526			1,841,847			1,678,323
Total assets	$	24,879,252		$	23,754,755		$	21,679,062

Interest-bearing deposits	$	15,117,102		$	14,065,995		$	13,489,651		$	15,621		$	13,594		$	12,436		0.41	%	0.39	%	0.37	%
Federal Home Loan Bank advances	459,198			946,081			394,666			2,577			2,984			2,458			2.23		1.27		2.47
Other borrowings	249,307			248,233			272,549			1,137			1,086			1,045			1.81		1.76		1.52
Subordinated notes	138,925			138,898			138,825			1,778			1,777			1,776			5.12		5.12		5.12
Junior subordinated debentures	253,566			253,566			264,974			2,400			2,353			2,124			3.70		3.67		3.14
Total interest-bearing liabilities	$	16,218,098		$	15,652,773		$	14,560,665		$	23,513		$	21,794		$	19,839		0.58	%	0.56	%	0.54	%
Non-interest bearing deposits	5,566,983			5,223,384			4,473,632
Other liabilities	442,487			412,866			334,254
Equity	2,651,684			2,465,732			2,310,511
Total liabilities and shareholders’ equity	$	24,879,252		$	23,754,755		$	21,679,062
Interest rate spread⁽⁵⁾⁽⁷⁾																			3.07	%	3.11	%	3.19	%
Less: Fully tax-equivalent adjustment										(1,556		)	(1,463		)	(1,197		)	(0.03	)	(0.03	)	(0.02	)
Net free funds/contribution⁽⁶⁾	$	6,656,545		$	6,104,184		$	5,294,876											0.17		0.16		0.14
Net interest income/ margin⁽⁷⁾(GAAP)										$	184,636		$	175,270		$	165,540		3.21	%	3.24	%	3.31	%
Fully tax-equivalent adjustment										1,556			1,463			1,197			0.03		0.03		0.02
Net interest income/ margin - FTE ⁽⁷⁾										$	186,192		$	176,733		$	166,737		3.24	%	3.27	%	3.33	%


(1)	Liquidity management assets include available-for-sale and held-to-maturity securities, interest earning deposits with banks, federal funds sold and securities purchased under resale agreements.


(2)	Interest income on tax-advantaged loans, trading securities and available-for-sale 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, 2016, June 30, 2016 and September 30, 2015 were $1.6 million, $1.5 million and $1.2 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 2016, net interest income totaled $184.6 million, an increase of $9.4 million as compared to the second quarter of 2016 and an increase of $19.1 million as compared to the third quarter of 2015. Net interest margin was 3.21% (3.24% on a fully tax-equivalent basis) during the third quarter of 2016 compared to 3.24% (3.27% on a fully tax-equivalent basis) during the second quarter of 2016 and 3.31% (3.33% on a fully tax-equivalent basis) during the third quarter of 2015. The reduction in net interest margin compared to the second quarter of 2016 is primarily the result of a decline in yields on mortgage-backed securities.

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 the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015:



	Average Balance for nine months ended,						Interest for nine months ended,						Yield/Rate for nine months ended,
(Dollars in thousands)	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015			September 30, 2016		September 30, 2015
Liquidity management assets^(1)(2)(7)	$	3,462,375		$	2,907,284		$	57,740		$	50,328		2.23	%	2.31	%
Other earning assets^(2)(3)(7)	29,457			30,286			696			718			3.16		3.17
Loans, net of unearned income^(2)(4)(7)	18,264,545			15,730,009			538,833			473,857			3.94		4.03
Covered loans	117,427			197,069			4,629			9,474			5.27		6.43
Total earning assets⁽⁷⁾	$	21,873,804		$	18,864,648		$	601,898		$	534,377		3.68	%	3.79	%
Allowance for loan and covered loan losses	(116,739		)	(101,440		)
Cash and due from banks	257,443			245,745
Other assets	1,834,904			1,577,971
Total assets	$	23,849,412		$	20,586,924

Interest-bearing deposits	$	14,303,125		$	13,158,498		$	41,996		$	36,246		0.39	%	0.37	%
Federal Home Loan Bank advances	742,423			360,470			8,447			6,426			1.52		2.38
Other borrowings	251,633			220,478			3,281			2,620			1.74		1.59
Subordinated notes	138,898			138,799			5,332			5,328			5.12		5.12
Junior subordinated debentures	254,935			254,710			6,973			6,034			3.59		3.12
Total interest-bearing liabilities	$	15,691,014		$	14,132,955		$	66,029		$	56,654		0.56	%	0.54	%
Non-interest bearing deposits	5,244,552			3,931,194
Other liabilities	410,906			328,391
Equity	2,502,940			2,194,384
Total liabilities and shareholders’ equity	$	23,849,412		$	20,586,924
Interest rate spread⁽⁵⁾⁽⁷⁾													3.12	%	3.25	%
Less: Fully tax-equivalent adjustment							(4,454		)	(3,400		)	(0.02	)	(0.03	)
Net free funds/contribution⁽⁶⁾	$	6,182,790		$	4,731,693								0.15		0.14
Net interest income/ margin⁽⁷⁾(GAAP)							$	531,415		$	474,323		3.25	%	3.36	%
Fully tax-equivalent adjustment							4,454			3,400			0.02		0.03
Net interest income/ margin - FTE ⁽⁷⁾							$	535,869		$	477,723		3.27	%	3.39	%


(1)	Liquidity management assets include available-for-sale and held-to-maturity securities, interest earning deposits with banks, federal funds sold and securities purchased under resale agreements.


(2)	Interest income on tax-advantaged loans, trading securities and available-for-sale securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the nine months ended September 30, 2016 and September 30, 2015 were $4.5 million and $3.4 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 2016, net interest income totaled $531.4 million, an increase of $57.1 million as compared to the first nine months of 2015. Net interest margin was 3.25% (3.27% on a fully tax-equivalent basis) for the first nine months of 2016 compared to 3.36% (3.39% on a fully tax-equivalent basis) for the same period of 2015. The reduction in net interest margin compared to the first nine months of 2015 is primarily the result of a decline in loan yields, including less accretion recognized on purchased loans, and an increase on the rate of interest bearing liabilities.

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, 2016, June 30, 2016 and September 30, 2015 is as follows:




Static Shock Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
September 30, 2016	19.6	%	10.1	%	(10.4	)%
June 30, 2016	16.9	%	8.9	%	(8.9	)%
September 30, 2015	15.6	%	8.0	%	(11.1	)%



Ramp Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
September 30, 2016	7.8	%	3.9	%	(4.1	)%
June 30, 2016	7.0	%	3.5	%	(3.7	)%
September 30, 2015	6.7	%	3.6	%	(4.0	)%

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).

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 2016 compared to Q2 2016					Q3 2016 compared to Q3 2015
(Dollars in thousands)	2016			2016			2015			$ Change			% Change		$ Change			% Change
Brokerage	$	6,752		$	6,302		$	6,579		$	450		7	%	$	173		3	%
Trust and asset management	12,582			12,550			11,664			32			—		918			8
Total wealth management	19,334			18,852			18,243			482			3		1,091			6
Mortgage banking	34,712			36,807			27,887			(2,095		)	(6	)	6,825			24
Service charges on deposit accounts	8,024			7,726			7,403			298			4		621			8
Gains (losses) on investment securities, net	3,305			1,440			(98		)	1,865			NM		3,403			NM
Fees from covered call options	3,633			4,649			2,810			(1,016		)	(22	)	823			29
Trading losses, net	(432		)	(316		)	(135		)	(116		)	37		(297		)	NM
Operating lease income, net	4,459			4,005			613			454			11		3,846			NM
Other:
Interest rate swap fees	2,881			1,835			2,606			1,046			57		275			11
BOLI	884			1,257			212			(373		)	(30	)	672			NM
Administrative services	1,151			1,074			1,072			77			7		79			7
Gain on extinguishment of debt	—			—			—			—			NM		—			NM
Miscellaneous	8,653			7,470			4,340			1,183			16		4,313			99
Total Other	13,569			11,636			8,230			1,933			17		5,339			65
Total Non-Interest Income	$	86,604		$	84,799		$	64,953		$	1,805		2	%	$	21,651		33	%

NM - Not Meaningful



	Nine Months Ended
	September 30,			September 30,			$			%
(Dollars in thousands)	2016			2015			Change			Change
Brokerage	$	19,111		$	20,181		$	(1,070	)	(5	)%
Trust and asset management	37,395			34,638			2,757			8
Total wealth management	56,506			54,819			1,687			3
Mortgage banking	93,254			91,694			1,560			2
Service charges on deposit accounts	23,156			20,174			2,982			15
Gains on investment securities, net	6,070			402			5,668			NM
Fees from covered call options	9,994			11,735			(1,741		)	(15	)
Trading losses, net	(916		)	(452		)	(464		)	NM
Operating lease income, net	11,270			755			10,515			NM
Other:
Interest rate swap fees	9,154			7,144			2,010			28
BOLI	2,613			3,158			(545		)	(17	)
Administrative services	3,294			3,151			143			5
Gain on extinguishment of debt	4,305			—			4,305			NM
Miscellaneous	21,455			13,927			7,528			54
Total Other	40,821			27,380			13,441			49
Total Non-Interest Income	$	240,155		$	206,507		$	33,648		16	%

NM - Not Meaningful

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

The increase in wealth management revenue during the current period as compared to the second quarter of 2016 and third quarter of 2015 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 most recent quarter resulted primarily from a $2.5 million negative fair value adjustment on mortgage servicing rights assets ("MSRs") during the period as a result of actual prepayments in the third quarter of 2016 and higher projected prepayment speeds. Mortgage loans originated or purchased for sale remained steady during the period totaling $1.3 billion in the current quarter as compared to $1.2 billion in the second quarter of 2016 and $973.7 million in the third quarter of 2015. 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 MSRs as the Company does not hedge this change in fair value. The Company typically originates mortgage loans held-for-sale with associated MSRs either retained or released. The Company records MSRs 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, 2016			June 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Retail originations	$	1,138,571		1,135,082			$	900,302		$	2,978,643		$	2,906,508
Correspondent originations	121,007			77,160			73,362			229,825			188,393
(A) Total originations	$	1,259,578		1,212,242			$	973,664		$	3,208,468		$	3,094,901

Purchases as a percentage of originations	57		%	65		%	72		%	60		%	60		%
Refinances as a percentage of originations	43			35			28			40			40
Total	100		%	100		%	100		%	100		%	100		%

(B) Production revenue ⁽¹⁾	$	32,889		$	32,221		$	27,211		$	85,040		$	90,640
Production margin (B / A)	2.61		%	2.66		%	2.79		%	2.65		%	2.93		%

Loans serviced for others (C)	$	1,508,469		$	1,250,062		$	853,286
MSRs, at fair value (D)	13,901			13,382			7,875
Percentage of mortgage servicing rights to loans serviced for others (D/C)	0.92		%	1.07		%	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 increase in service charges on deposit accounts in the current quarter is mostly a result of higher account analysis fees on deposit accounts which have increased as a result of the Company's commercial banking initiative as well as additional service charges on deposit accounts from acquired institutions.

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 effectively 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 second 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, 2016, June 30, 2016 and September 30, 2015.

The increase in operating lease income in the current quarter compared to the prior period quarters is primarily related to growth in business from the Company's leasing divisions.

The increase in other non-interest income in the current quarter as compared to the second quarter of 2016 is primarily due to higher swap fee revenues resulting from interest rate hedging transactions related to both customer-based trades and the related

matched trades with inter-bank dealer counterparties and gains recognized on the purchase and sale of certain assets, partially offset by lower income on bank-owned life insurance.

NON-INTEREST EXPENSE

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



	Three Months Ended
	September 30,		June 30,		September 30,			Q3 2016 compared to Q2 2016					Q3 2016 compared to Q3 2015
(Dollars in thousands)	2016		2016		2015			$ Change			% Change		$ Change			% Change
Salaries and employee benefits:
Salaries	$	54,309	$	52,924	$	53,028		$	1,385		3	%	$	1,281		2	%
Commissions and incentive compensation	33,740		32,531		30,035			1,209			4		3,705			12
Benefits	15,669		15,439		14,686			230			1		983			7
Total salaries and employee benefits	103,718		100,894		97,749			2,824			3		5,969			6
Equipment	9,449		9,307		8,456			142			2		993			12
Operating lease equipment depreciation	3,605		3,385		431			220			6		3,174			NM
Occupancy, net	12,767		11,943		12,066			824			7		701			6
Data processing	7,432		7,138		8,127			294			4		(695		)	(9	)
Advertising and marketing	7,365		6,941		6,237			424			6		1,128			18
Professional fees	5,508		5,419		4,100			89			2		1,408			34
Amortization of other intangible assets	1,085		1,248		1,350			(163		)	(13	)	(265		)	(20	)
FDIC insurance	3,686		4,040		3,035			(354		)	(9	)	651			21
OREO expense, net	1,436		1,348		(367		)	88			7		1,803			NM
Other:
Commissions - 3rd party brokers	1,362		1,324		1,364			38			3		(2		)	—
Postage	1,889		2,038		1,927			(149		)	(7	)	(38		)	(2	)
Miscellaneous	17,313		15,944		15,499			1,369			9		1,814			12
Total other	20,564		19,306		18,790			1,258			7		1,774			9
Total Non-Interest Expense	$	176,615	$	170,969	$	159,974		$	5,646		3	%	$	16,641		10	%

NM - Not Meaningful



	Nine Months Ended
	September 30,		September 30,		$			%
(Dollars in thousands)	2016		2015		Change			Change
Salaries and employee benefits:
Salaries	$	157,515	$	146,493	$	11,022		8	%
Commissions and incentive compensation	92,646		88,916		3,730			4
Benefits	50,262		46,891		3,371			7
Total salaries and employee benefits	300,423		282,300		18,123			6
Equipment	27,523		24,090		3,433			14
Operating lease equipment depreciation	9,040		547		8,493			NM
Occupancy, net	36,658		35,818		840			2
Data processing	21,089		19,656		1,433			7
Advertising and marketing	18,085		16,550		1,535			9
Professional fees	14,986		13,838		1,148			8
Amortization of other intangible assets	3,631		3,297		334			10
FDIC insurance	11,339		9,069		2,270			25
OREO expense, net	3,344		1,885		1,459			77
Other:
Commissions - 3rd party brokers	3,996		4,153		(157		)	(4	)
Postage	5,229		5,138		91			2
Miscellaneous	45,971		45,248		723			2
Total other	55,196		54,539		657			1
Total Non-Interest Expense	$	501,314	$	461,589	$	39,725		9	%

NM - Not Meaningful

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

Salaries and employee benefits expense increased in the current quarter compared to the second quarter of 2016 primarily as a result of increased staffing as the Company grows and higher commissions and incentive compensation on variable pay based arrangements. Salaries and employee benefits expense increased in the current quarter compared to the third quarter of 2015 primarily as a result of the addition of employees from acquisitions, increased staffing as the Company grows, higher commissions and incentive compensation on variable pay based arrangements and an increase in employee benefits (primarily payroll tax related).

The increase in advertising and marketing expenses during the current quarter compared to the second quarter of 2016 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 type of marketing programs utilized which are determined based on the market area, targeted audience, competition and various other factors.

The increase in miscellaneous expenses in the current quarter as compared to the second quarter of 2016 is primarily a result of a $1.8 million charge related to outstanding legal disputes recognized during the period, including a $1.5 million adverse arbitration award relating to a previously disclosed claim arising out of the hiring of a wealth management financial advisor by Wayne Hummer Investments LLC. Miscellaneous expense includes such items as 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.

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)	2016			2016			2015			2016			2015
Allowance for loan losses at beginning of period	$	114,356		$	110,171		$	100,204		$	105,400		$	91,705
Provision for credit losses	9,741			9,269			8,665			27,433			24,551
Other adjustments	(112		)	(134		)	(153		)	(324		)	(494		)
Reclassification (to) from allowance for unfunded lending-related commitments	(579		)	(40		)	(42		)	(700		)	(151		)
Charge-offs:
Commercial	3,469			721			964			4,861			2,884
Commercial real estate	382			502			1,948			1,555			3,809
Home equity	574			2,046			1,116			3,672			3,547
Residential real estate	134			693			1,138			1,320			2,692
Premium finance receivables - commercial	1,959			1,911			1,595			6,350			4,384
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	389			224			116			720			342
Total charge-offs	6,907			6,097			6,877			18,478			17,658
Recoveries:
Commercial	176			121			462			926			1,117
Commercial real estate	364			296			213			1,029			2,349
Home equity	65			71			42			184			129
Residential real estate	61			31			136			204			228
Premium finance receivables - commercial	456			633			278			1,876			1,065
Premium finance receivables - life insurance	—			—			16			—			16
Consumer and other	72			35			52			143			139
Total recoveries	1,194			1,187			1,199			4,362			5,043
Net charge-offs	(5,713		)	(4,910		)	(5,678		)	(14,116		)	(12,615		)
Allowance for loan losses at period end	$	117,693		$	114,356		$	102,996		$	117,693		$	102,996
Allowance for unfunded lending-related commitments at period end	1,648			1,070			926			1,648			926
Allowance for credit losses at period end	$	119,341		$	115,426		$	103,922		$	119,341		$	103,922
Annualized net charge-offs by category as a percentage of its own respective category’s average:
Commercial	0.24		%	0.05		%	0.05		%	0.10		%	0.06		%
Commercial real estate	0.00			0.01			0.13			0.01			0.04
Home equity	0.27			1.03			0.55			0.61			0.62
Residential real estate	0.03			0.26			0.42			0.14			0.37
Premium finance receivables - commercial	0.24			0.21			0.21			0.25			0.18
Premium finance receivables - life insurance	0.00			0.00			0.00			0.00			0.00
Consumer and other	0.92			0.57			0.17			0.56			0.17
Total loans, net of unearned income, excluding covered loans	0.12		%	0.11		%	0.14		%	0.10		%	0.11		%
Net charge-offs as a percentage of the provision for credit losses	58.65		%	52.97		%	65.53		%	51.46		%	51.39		%
Loans at period-end, excluding covered loans	$	19,101,261		$	18,174,655		$	16,316,211
Allowance for loan losses as a percentage of loans at period end	0.62		%	0.63		%	0.63		%
Allowance for credit losses as a percentage of loans at period end	0.62		%	0.64		%	0.64		%

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 2016 totaled 12 basis points on an annualized basis compared to 11 basis points on an annualized basis in the second quarter of 2016 and 14 basis points on an annualized basis in the third quarter of 2015. Net charge-offs totaled $5.7 million in the third quarter of 2016, an $803,000 increase from $4.9 million in the second quarter of 2016 and remained steady when compared to the third quarter of 2015.

The provision for credit losses, excluding the provision for covered loan losses, totaled $9.7 million for the third quarter of 2016 compared to $9.3 million for the second quarter of 2016 and $8.7 million for the third quarter of 2015. The higher provision for credit losses in the third quarter of 2016 compared to the second quarter of 2016 was partly due to loan growth, excluding covered loans and mortgage loans held-for-sale, during 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. Please see “Covered Assets” later in this document for more detail.

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



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(Dollars in thousands)	2016			2016			2015			2016			2015
Provision for loan losses	$	9,162		$	9,229		$	8,623		$	26,733		$	24,400
Provision for unfunded lending-related commitments	579			40			42			700			151
Provision for covered loan losses	(170		)	(140		)	(343		)	(699		)	(668		)
Provision for credit losses	$	9,571		$	9,129		$	8,322		$	26,734		$	23,883

							Period End
							September 30,			June 30,			September 30,
							2016			2016			2015
Allowance for loan losses							$	117,693		$	114,356		$	102,996
Allowance for unfunded lending-related commitments							1,648			1,070			926
Allowance for covered loan losses							1,422			2,412			2,918
Allowance for credit losses							$	120,763		$	117,838		$	106,840

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 as of September 30, 2016 and June 30, 2016.



	As of September 30, 2016
	Recorded		Calculated		As a percentage of its own respective
(Dollars in thousands)	Investment		Allowance		category’s balance
Commercial:⁽¹⁾
Commercial and industrial	$	3,111,891	$	26,440	0.85	%
Asset-based lending	844,357		6,728		0.80
Tax exempt	316,343		2,229		0.70
Leases	299,534		893		0.30
Commercial real estate:⁽¹⁾
Residential construction	64,986		736		1.13
Commercial construction	386,275		4,042		1.05
Land	103,109		3,577		3.47
Office	834,123		6,002		0.72
Industrial	719,470		6,349		0.88
Retail	834,507		6,045		0.72
Multi-family	752,106		7,956		1.06
Mixed use and other	1,731,583		13,545		0.78
Home equity⁽¹⁾	664,811		11,678		1.76
Residential real estate⁽¹⁾	615,312		6,027		0.98
Total core loan portfolio	$	11,278,407	$	102,247	0.91	%
Commercial:
Franchise	$	334,910	$	3,357	1.00	%
Mortgage warehouse lines of credit	309,632		2,241		0.72
Community Advantage - homeowner associations	141,351		353		0.25
Aircraft	4,498		53		1.18
Purchased non-covered commercial loans ⁽²⁾	589,028		744		0.13
Commercial real estate:
Purchased non-covered commercial real estate ⁽²⁾	482,525		96		0.02
Purchased non-covered home equity ⁽²⁾	78,057		6		0.01
Purchased non-covered residential real estate ⁽²⁾	48,286		76		0.16
Premium finance receivables
U.S. commercial insurance loans	2,139,966		5,416		0.25
Canada commercial insurance loans ⁽²⁾	290,267		554		0.19
Life insurance loans ⁽¹⁾	3,020,472		1,305		0.04
Purchased life insurance loans ⁽²⁾	262,887		—		—
Consumer and other ⁽¹⁾	117,897		1,244		1.06
Purchased non-covered consumer and other ⁽²⁾	3,078		1		0.03
Total consumer, niche and purchased loan portfolio	$	7,822,854	$	15,446	0.20	%
Total loans, net of unearned income, excluding covered loans	$	19,101,261	$	117,693	0.62	%
Non-accretable credit discounts on purchased loans reported in accordance with ASC 310-30, excluding covered loans			$	20,940
Total allowance for loan losses and non-accretable credit discounts on purchased loans, excluding covered loans			$	138,633	0.72	%


(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, 2016
	Recorded		Calculated		As a percentage of its own respective
(Dollars in thousands)	Investment		Allowance		category’s balance
Commercial:⁽¹⁾
Commercial and industrial	$	2,986,178	$	26,037	0.87	%
Asset-based lending	841,028		6,735		0.80
Tax exempt	288,091		2,027		0.70
Leases	267,686		807		0.30
Commercial real estate:⁽¹⁾
Residential construction	67,006		768		1.15
Commercial construction	336,486		3,551		1.06
Land	100,187		3,455		3.45
Office	856,193		6,099		0.71
Industrial	717,313		6,439		0.90
Retail	830,284		6,040		0.73
Multi-family	732,449		7,736		1.06
Mixed use and other	1,678,829		12,622		0.75
Home equity⁽¹⁾	673,741		11,367		1.69
Residential real estate⁽¹⁾	599,262		5,333		0.89
Total core loan portfolio	$	10,974,733	$	99,016	0.90	%
Commercial:
Franchise	$	289,905	$	3,337	1.15	%
Mortgage warehouse lines of credit	270,586		1,976		0.73
Community Advantage - homeowner associations	134,273		3		0.00
Aircraft	4,597		54		1.17
Purchased non-covered commercial loans ⁽²⁾	62,189		678		1.09
Commercial real estate:
Purchased non-covered commercial real estate ⁽²⁾	529,587		114		0.02
Purchased non-covered home equity ⁽²⁾	87,163		16		0.02
Purchased non-covered residential real estate ⁽²⁾	54,402		72		0.13
Premium finance receivables
U.S. commercial insurance loans	2,181,222		5,776		0.26
Canada commercial insurance loans ⁽²⁾	297,058		598		0.20
Life insurance loans ⁽¹⁾	2,869,960		1,440		0.05
Purchased life insurance loans ⁽²⁾	291,602		—		—
Consumer and other ⁽¹⁾	123,944		1,275		1.03
Purchased non-covered consumer and other ⁽²⁾	3,434		1		0.03
Total consumer, niche and purchased loan portfolio	$	7,199,922	$	15,340	0.21	%
Total loans, net of unearned income, excluding covered loans	$	18,174,655	$	114,356	0.63	%
Non-accretable credit discounts on purchased loans reported in accordance with ASC 310-30, excluding covered loans			$	27,039
Total allowance for loan losses and non-accretable credit discounts on purchased loans, excluding covered loans			$	141,395	0.78	%


(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 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 previous pages as of September 30, 2016 and June 30, 2016.

The increase in the allowance for loan losses to core loans in the third quarter of 2016 compared to the second quarter of 2016 was attributable to $303.7 million core loan portfolio growth.

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. For analysis purposes, the Company has combined the non-accretable credit discounts recorded on purchased loans with the total allowance for loan losses in the previous tables to present the total credit reserves available on its loan portfolio. The total allowance for loan losses and non-accretable credit discounts on purchased loans was 0.72% of the total loan portfolio as of September 30, 2016 and 0.78% of the total loan portfolio as of June 30, 2016.

The tables below show the aging of the Company’s loan portfolio at September 30, 2016 and June 30, 2016:



			90+ days		60-89		30-59
As of September 30, 2016			and still		days past		days past
(Dollars in thousands)	Nonaccrual		accruing		due		due		Current		Total Loans
Loan Balances:
Commercial
Commercial, industrial and other	$	15,809	$	—	$	7,324	$	8,987	$	3,573,396	$	3,605,516
Franchise	—		—		458		1,626		872,661		874,745
Mortgage warehouse lines of credit	—		—		—		—		309,632		309,632
Asset-based lending	234		—		3,772		3,741		837,972		845,719
Leases	375		—		239		—		299,339		299,953
PCI - commercial ⁽¹⁾	—		1,783		—		1,036		13,160		15,979
Total commercial	16,418		1,783		11,793		15,390		5,906,160		5,951,544
Commercial real estate
Construction	400		—		—		3,775		447,302		451,477
Land	1,208		—		787		300		105,406		107,701
Office	3,609		—		6,457		8,062		865,954		884,082
Industrial	9,967		—		940		2,961		753,636		767,504
Retail	909		—		1,340		8,723		884,369		895,341
Multi-family	90		—		3,051		2,169		789,645		794,955
Mixed use and other	6,442		—		2,157		5,184		1,837,724		1,851,507
PCI - commercial real estate ⁽¹⁾	—		21,433		1,509		4,066		129,109		156,117
Total commercial real estate	22,625		21,433		16,241		35,240		5,813,145		5,908,684
Home equity	9,309		—		1,728		3,842		727,989		742,868
Residential real estate, including PCI	12,205		1,496		2,232		1,088		646,577		663,598
Premium finance receivables
Commercial insurance loans	14,214		7,754		6,968		10,291		2,391,006		2,430,233
Life insurance loans	—		—		9,960		3,717		3,006,795		3,020,472
PCI - life insurance loans ⁽¹⁾	—		—		—		—		262,887		262,887
Consumer and other, including PCI	543		124		204		871		119,233		120,975
Total loans, net of unearned income, excluding covered loans	$	75,314	$	32,590	$	49,126	$	70,439	$	18,873,792	$	19,101,261
Covered loans	2,331		4,806		1,545		2,456		84,802		95,940
Total loans, net of unearned income	$	77,645	$	37,396	$	50,671	$	72,895	$	18,958,594	$	19,197,201



As of September 30, 2016 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
Commercial, industrial and other	0.4	%	—	%	0.2	%	0.2	%	99.2	%	100.0	%
Franchise	—		—		0.1		0.2		99.7		100.0
Mortgage warehouse lines of credit	—		—		—		—		100.0		100.0
Asset-based lending	—		—		0.4		0.4		99.2		100.0
Leases	0.1		—		0.1		—		99.8		100.0
PCI - commercial⁽¹⁾	—		11.2		—		6.5		82.3		100.0
Total commercial	0.3		—		0.2		0.3		99.2		100.0
Commercial real estate
Construction	0.1		—		—		0.8		99.1		100.0
Land	1.1		—		0.7		0.3		97.9		100.0
Office	0.4		—		0.7		0.9		98.0		100.0
Industrial	1.3		—		0.1		0.4		98.2		100.0
Retail	0.1		—		0.1		1.0		98.8		100.0
Multi-family	—		—		0.4		0.3		99.3		100.0
Mixed use and other	0.3		—		0.1		0.3		99.3		100.0
PCI - commercial real estate ⁽¹⁾	—		13.7		1.0		2.6		82.7		100.0
Total commercial real estate	0.4		0.4		0.3		0.6		98.3		100.0
Home equity	1.3		—		0.2		0.5		98.0		100.0
Residential real estate, including PCI	1.8		0.2		0.3		0.2		97.5		100.0
Premium finance receivables
Commercial insurance loans	0.6		0.3		0.3		0.4		98.4		100.0
Life insurance loans	—		—		0.3		0.1		99.6		100.0
PCI - life insurance loans ⁽¹⁾	—		—		—		—		100.0		100.0
Consumer and other, including PCI	0.4		0.1		0.2		0.7		98.6		100.0
Total loans, net of unearned income, excluding covered loans	0.4	%	0.2	%	0.3	%	0.4	%	98.7	%	100.0	%
Covered loans	2.4		5.0		1.6		2.6		88.4		100.0
Total loans, net of unearned income	0.4	%	0.2	%	0.3	%	0.4	%	98.7	%	100.0	%


(1)	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, 2016			and still		days past		days past
(Dollars in thousands)	Nonaccrual		accruing		due		due		Current		Total Loans
Loan Balances:
Commercial
Commercial, industrial and other	$	16,414	$	—	$	1,412	$	22,317	$	3,416,432	$	3,456,575
Franchise	—		—		560		87		289,258		289,905
Mortgage warehouse lines of credit	—		—		—		—		270,586		270,586
Asset-based lending	—		235		1,899		6,421		834,112		842,667
Leases	387		—		48		—		267,639		268,074
PCI - commercial⁽¹⁾	—		1,956		630		1,426		12,714		16,726
Total commercial	16,801		2,191		4,549		30,251		5,090,741		5,144,533
Commercial real estate
Construction	673		—		46		7,922		396,264		404,905
Land	1,725		—		—		340		103,816		105,881
Office	6,274		—		5,452		4,936		892,791		909,453
Industrial	10,295		—		1,108		719		754,647		766,769
Retail	916		—		535		6,450		889,945		897,846
Multi-family	90		—		2,077		1,275		775,075		778,517
Mixed use and other	4,442		—		4,285		8,007		1,795,931		1,812,665
PCI - commercial real estate ⁽¹⁾	—		27,228		1,663		2,608		140,799		172,298
Total commercial real estate	24,415		27,228		15,166		32,257		5,749,268		5,848,334
Home equity	8,562		—		380		4,709		747,253		760,904
Residential real estate, including PCI	12,413		1,479		1,367		299		638,106		653,664
Premium finance receivables
Commercial insurance loans	14,497		10,558		6,966		9,456		2,436,803		2,478,280
Life insurance loans	—		—		46,651		11,953		2,811,356		2,869,960
PCI - life insurance loans ⁽¹⁾	—		—		—		—		291,602		291,602
Consumer and other, including PCI	475		226		610		1,451		124,616		127,378
Total loans, net of unearned income, excluding covered loans	$	77,163	$	41,682	$	75,689	$	90,376	$	17,889,745	$	18,174,655
Covered loans	2,651		6,810		697		1,610		93,480		105,248
Total loans, net of unearned income	$	79,814	$	48,492	$	76,386	$	91,986	$	17,983,225	$	18,279,903



As of June 30, 2016 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
Commercial, industrial and other	0.5	%	—	%	—	%	0.6	%	98.9	%	100.0	%
Franchise	—		—		0.2		—		99.8		100.0
Mortgage warehouse lines of credit	—		—		—		—		100.0		100.0
Asset-based lending	—		—		0.2		0.8		99.0		100.0
Leases	0.1		—		—		—		99.9		100.0
PCI - commercial⁽¹⁾	—		11.7		3.8		8.5		76.0		100.0
Total commercial	0.3		—		0.1		0.6		99.0		100.0
Commercial real estate
Construction	0.2		—		—		2.0		97.8		100.0
Land	1.6		—		—		0.3		98.1		100.0
Office	0.7		—		0.6		0.5		98.2		100.0
Industrial	1.3		—		0.1		0.1		98.5		100.0
Retail	0.1		—		0.1		0.7		99.1		100.0
Multi-family	—		—		0.3		0.2		99.5		100.0
Mixed use and other	0.2		—		0.2		0.4		99.2		100.0
PCI - commercial real estate ⁽¹⁾	—		15.8		1.0		1.5		81.7		100.0
Total commercial real estate	0.4		0.5		0.3		0.6		98.2		100.0
Home equity	1.1		—		—		0.6		98.3		100.0
Residential real estate, including PCI	1.9		0.2		0.2		—		97.7		100.0
Premium finance receivables
Commercial insurance loans	0.6		0.4		0.3		0.4		98.3		100.0
Life insurance loans	—		—		1.6		0.4		98.0		100.0
PCI - life insurance loans ⁽¹⁾	—		—		—		—		100.0		100.0
Consumer and other, including PCI	0.4		0.2		0.5		1.1		97.8		100.0
Total loans, net of unearned income, excluding covered loans	0.4	%	0.2	%	0.4	%	0.5	%	98.5	%	100.0	%
Covered loans	2.5		6.5		0.7		1.5		88.8		100.0
Total loans, net of unearned income	0.4	%	0.3	%	0.4	%	0.5	%	98.4	%	100.0	%


(1)	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, 2016, $49.1 million of all loans, excluding covered loans, or 0.3%, were 60 to 89 days past due and $70.4 million, or 0.4%, were 30 to 59 days (or one payment) past due. As of June 30, 2016, $75.7 million of all loans, excluding covered loans, or 0.4%, were 60 to 89 days past due and $90.4 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, 2016 that are current with regard to the contractual terms of the loan agreement represent 98.0% of the total home equity portfolio. Residential real estate loans at September 30, 2016 that are current with regards to the contractual terms of the loan agreements comprise 97.5% 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)	2016			2016			2015
Loans past due greater than 90 days and still accruing⁽¹⁾:
Commercial	$	—		$	235		$	—
Commercial real estate	—			—			—
Home equity	—			—			—
Residential real estate	—			—			—
Premium finance receivables - commercial	7,754			10,558			8,231
Premium finance receivables - life insurance	—			—			—
Consumer and other	60			163			140
Total loans past due greater than 90 days and still accruing	7,814			10,956			8,371
Non-accrual loans⁽²⁾:
Commercial	16,418			16,801			12,018
Commercial real estate	22,625			24,415			28,617
Home equity	9,309			8,562			8,365
Residential real estate	12,205			12,413			14,557
Premium finance receivables - commercial	14,214			14,497			13,751
Premium finance receivables - life insurance	—			—			—
Consumer and other	543			475			297
Total non-accrual loans	75,314			77,163			77,605
Total non-performing loans:
Commercial	16,418			17,036			12,018
Commercial real estate	22,625			24,415			28,617
Home equity	9,309			8,562			8,365
Residential real estate	12,205			12,413			14,557
Premium finance receivables - commercial	21,968			25,055			21,982
Premium finance receivables - life insurance	—			—			—
Consumer and other	603			638			437
Total non-performing loans	$	83,128		$	88,119		$	85,976
Other real estate owned	19,933			22,154			29,053
Other real estate owned - from acquisitions	15,117			15,909			22,827
Other repossessed assets	428			420			193
Total non-performing assets	$	118,606		$	126,602		$	138,049
TDRs performing under the contractual terms of the loan agreement	$	29,440		$	33,310		$	49,173
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.28		%	0.33		%	0.27		%
Commercial real estate	0.38			0.42			0.54
Home equity	1.25			1.13			1.05
Residential real estate	1.84			1.90			2.55
Premium finance receivables - commercial	0.90			1.01			0.91
Premium finance receivables - life insurance	—			—			—
Consumer and other	0.50			0.50			0.33
Total loans, net of unearned income	0.44		%	0.48		%	0.53		%
Total non-performing assets as a percentage of total assets	0.47		%	0.52		%	0.63		%
Allowance for loan losses as a percentage of total non-performing loans	141.58		%	129.78		%	119.79		%


(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 $14.8 million, $16.3 million, and $10.1 million as of September 30, 2016, June 30, 2016, and September 30, 2015, respectively.

The ratio of non-performing assets to total assets was 0.47% as of September 30, 2016, compared to 0.52% at June 30, 2016, and 0.63% at September 30, 2015. Non-performing assets, excluding covered assets, totaled $118.6 million at September 30, 2016, compared to $126.6 million at June 30, 2016 and $138.0 million at September 30, 2015. Non-performing loans, excluding covered loans, totaled $83.1 million, or 0.44% of total loans, at September 30, 2016 compared to $88.1 million, or 0.48% of total loans, at June 30, 2016 and $86.0 million, or 0.53% of total loans, at September 30, 2015. The decrease in non-performing loans, excluding covered loans, compared to June 30, 2016 is primarily the result of a $3.1 million decrease in the commercial premium finance receivables portfolio and a $1.8 million decrease in the commercial real estate loan portfolio. OREO, excluding covered OREO, of $35.1 million at September 30, 2016 decreased $3.0 million compared to $38.1 million at June 30, 2016 and decreased $16.8 million compared to $51.9 million at September 30, 2015.

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)	2016			2016			2015			2016			2015
Balance at beginning of period	$	88,119		$	89,499		$	76,554		$	84,057		$	78,677
Additions, net	9,522			10,351			24,333			32,039			42,141
Return to performing status	(231		)	(873		)	(1,028		)	(3,110		)	(2,591		)
Payments received	(5,235		)	(4,810		)	(5,468		)	(13,353		)	(16,417		)
Transfer to OREO and other repossessed assets	(2,270		)	(1,818		)	(1,773		)	(6,168		)	(8,678		)
Charge-offs	(3,353		)	(2,943		)	(4,081		)	(6,829		)	(8,637		)
Net change for niche loans ⁽¹⁾	(3,424		)	(1,287		)	(2,561		)	(3,508		)	1,481
Balance at end of period	$	83,128		$	88,119		$	85,976		$	83,128		$	85,976


(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)	2016			2016			2015
Accruing TDRs:
Commercial	$	2,285		$	3,931		$	5,717
Commercial real estate	22,261			24,450			39,867
Residential real estate and other	4,894			4,929			3,589
Total accrual	$	29,440		$	33,310		$	49,173
Non-accrual TDRs: ⁽¹⁾
Commercial	$	2,134		$	1,477		$	147
Commercial real estate	10,610			12,240			5,778
Residential real estate and other	2,092			2,608			4,222
Total non-accrual	$	14,836		$	16,325		$	10,147
Total TDRs:
Commercial	$	4,419		$	5,408		$	5,864
Commercial real estate	32,871			36,690			45,645
Residential real estate and other	6,986			7,537			7,811
Total TDRs	$	44,276		$	49,635		$	59,320
Weighted-average contractual interest rate of TDRs	4.33		%	4.31		%	4.04		%


(1)	Included in total non-performing loans.

At September 30, 2016, the Company had $44.3 million in loans modified in TDRs. The $44.3 million in TDRs represents 89 credits in which economic concessions were granted to certain borrowers to better align the terms of their loans with their current ability to pay. The balance decreased from $49.6 million representing 97 credits at June 30, 2016 and decreased from $59.3 million representing 114 credits at September 30, 2015.

The table below presents a summary of TDRs as of September 30, 2016 and September 30, 2015, and shows the changes in the balance during the periods presented:

Three Months Ended September 30, 2016



(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate and Other			Total
Balance at beginning of period	$	5,408		$	36,690		$	7,537		$	49,635
Additions during the period	28			—			43			71
Reductions:
Charge-offs	(761		)	(204		)	—			(965		)
Transferred to OREO and other repossessed assets	—			(681		)	(535		)	(1,216		)
Removal of TDR loan status ⁽¹⁾	—			(1,323		)	—			(1,323		)
Payments received, net	(256		)	(1,611		)	(59		)	(1,926		)
Balance at period end	$	4,419		$	32,871		$	6,986		$	44,276


(1)	Loan was previously classified as a troubled debt restructuring and subsequently performed in compliance with the loan’s modified terms for a period of six months (including over a calendar year-end) at a modified interest rate which represented a market rate at the time of restructuring. Per our TDR policy, the TDR classification is removed.

Three Months Ended September 30, 2015



(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate and Other			Total
Balance at beginning of period	$	6,204		$	48,450		$	8,122		$	62,776
Additions during the period	—			—			222			222
Reductions:
Charge-offs	—			(267		)	(52		)	(319		)
Transferred to OREO and other repossessed assets	—			—			(175		)	(175		)
Removal of TDR loan status ⁽¹⁾	(234		)	(1,581		)	-			(1,815		)
Payments received, net	(106		)	(957		)	(306		)	(1,369		)
Balance at period end	$	5,864		$	45,645		$	7,811		$	59,320

Nine Months Ended September 30, 2016



(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate and Other			Total
Balance at beginning of period	$	5,747		$	38,707		$	7,399		$	51,853
Additions during the period	345			8,521			583			9,449
Reductions:
Charge-offs	(781		)	(1,038		)	(212		)	(2,031		)
Transferred to OREO and other repossessed assets	—			(1,365		)	(535		)	(1,900		)
Removal of TDR loan status ⁽¹⁾	—			(6,479		)	—			(6,479		)
Payments received, net	(892		)	(5,475		)	(249		)	(6,616		)
Balance at period end	$	4,419		$	32,871		$	6,986		$	44,276

Nine Months Ended September 30, 2015



(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate and Other			Total
Balance at beginning of period	$	7,576		$	67,623		$	7,076		$	82,275
Additions during the period	—			169			1,664			1,833
Reductions:
Charge-offs	(397		)	(268		)	(92		)	(757		)
Transferred to OREO and other repossessed assets	(562		)	(2,290		)	(279		)	(3,131		)
Removal of TDR loan status ⁽¹⁾	(471		)	(10,151		)	—			(10,622		)
Payments received, net	(282		)	(9,438		)	(558		)	(10,278		)
Balance at period end	$	5,864		$	45,645		$	7,811		$	59,320


(1)	Loan was previously classified as a troubled debt restructuring and subsequently performed in compliance with the loan’s modified terms for a period of six months (including over a calendar year-end) at a modified interest rate which represented a market rate at the time of restructuring. Per our TDR policy, the TDR classification is removed.

Each TDR was reviewed for impairment at September 30, 2016 and approximately $2.8 million of impairment was present and appropriately reserved for through the Company’s normal reserving methodology in the Company’s allowance for loan losses. For TDRs in which impairment is calculated by the present value of future cash flows, the Company records interest income representing the decrease in impairment resulting from the passage of time during the respective period, which differs from interest income from contractually required interest on these specific loans. For both the three months ending September 30, 2016 and 2015, the Company recorded $98,000 in interest income representing this decrease in impairment. For the nine months ended September 30, 2016 and 2015, the Company recorded $323,000 and $385,000, respectively, in interest income.

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, 2016, June 30, 2016 and September 30, 2015, 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)	2016			2016			2015
Balance at beginning of period	$	38,063		$	41,002		$	42,080
Disposals/resolved	(5,967		)	(6,591		)	(7,611		)
Transfers in at fair value, less costs to sell	3,958			1,309			6,159
Transfers in from covered OREO subsequent to loss share expiration	—			3,300			7,316
Additions from acquisition	—			—			4,617
Fair value adjustments	(1,004		)	(957		)	(681		)
Balance at end of period	$	35,050		$	38,063		$	51,880

	Period End
	September 30,			June 30,			September 30,
Balance by Property Type	2016			2016			2015
Residential real estate	$	9,602		$	9,153		$	12,577
Residential real estate development	2,114			2,133			3,147
Commercial real estate	23,334			26,777			36,156
Total	$	35,050		$	38,063		$	51,880

Covered Assets

In conjunction with FDIC-assisted transactions, the Company entered into loss share agreements with the FDIC. These agreements cover realized losses on loans, foreclosed real estate and certain other assets and require the Company to record loss share assets and liabilities that are measured separately from the loan portfolios because they are not contractually embedded in the loans and are not transferable with the loans should the Company choose to dispose of them. Fair values at the acquisition dates were estimated based on projected cash flows available for loss-share based on the credit adjustments estimated for each loan pool and the loss share percentages. The loss share assets and liabilities are also separately measured from the related loans and foreclosed real estate and recorded on the Consolidated Statements of Condition. Subsequent to the acquisition date, reimbursements received from the FDIC for actual incurred losses will reduce any loss share assets. Reductions to expected losses, to the extent such reductions to expected losses are the result of an improvement to the actual or expected cash flows from the covered assets, will also reduce any loss share asset and, if necessary, increase any loss share liability when necessary reductions exceed the current value of the loss share asset. The increases in cash flows for the purchased loans are recognized as interest income prospectively. In accordance with clawback provisions included in loss share agreements with the FDIC, the Company may be required to reimburse the FDIC when actual losses are less than certain thresholds established for each loss share agreement. The balance of these estimated reimbursements in accordance with clawback provisions and any related amortization are adjusted periodically for changes in the expected losses on covered assets. Estimated reimbursements from clawback provisions are recorded as a reduction to the loss share asset or, if necessary, an increase to the loss share liability on the Consolidated Statements of Condition. The allowance for loan losses for loans acquired in FDIC-assisted transactions is determined without giving consideration to the amounts recoverable through loss share agreements (since the loss share agreements are separately accounted for and thus presented “gross” on the balance sheet). On the Consolidated Statements of Income, the provision for credit losses is reported net of changes in the amount recoverable under the loss share agreements.

The following table provides a comparative analysis for the period end balances of covered assets and any changes in the allowance for covered loan losses. The Company expects covered assets and the allowance for covered loan losses to continue to decrease in periods without FDIC-assisted acquisitions.



	September 30,			June 30,			September 30,
(Dollars in thousands)	2016			2016			2015
Period End Balances:
Loans	$	95,940		$	105,248		$	168,609
Other real estate owned	10,399			12,983			28,644
Other assets	216			238			686
FDIC indemnification (liability) asset	(17,945		)	(11,729		)	(3,033		)
Total net covered assets	$	88,610		$	106,740		$	194,906
Allowance for Covered Loan Losses Rollforward:
Balance at beginning of quarter:	$	2,412		$	2,507		$	2,215
Provision for covered loan losses before benefit attributable to FDIC loss share agreements	(847		)	(702		)	(1,716		)
Benefit attributable to FDIC loss share agreements	677			562			1,373
Net provision for covered loan losses	(170		)	(140		)	(343		)
Decrease in FDIC indemnification liability/asset	(677		)	(562		)	(1,373		)
Loans charged-off	(918		)	(143		)	(287		)
Recoveries of loans charged-off	775			750			2,706
Net (charge-offs) recoveries	(143		)	607			2,419
Balance at end of quarter	$	1,422		$	2,412		$	2,918

Changes in Accretable Yield

The excess of cash flows expected to be collected over the carrying value of loans accounted for under ASC 310-30 is referred to as the accretable yield and is recognized in interest income using an effective yield method over the remaining life of the pool of loans. The accretable yield is affected by:


•	Changes in interest rate indices for variable rate loans accounted for under ASC 310-30 – Expected future cash flows are based on the variable rates in effect at the time of the regular evaluations of cash flows expected to be collected;


•	Changes in prepayment assumptions – Prepayments affect the estimated life of loans accounted for under ASC 310-30 which may change the amount of interest income, and possibly principal, expected to be collected; and


•	Changes in the expected principal and interest payments over the estimated life – Updates to expected cash flows are driven by the credit outlook and actions taken with borrowers. Changes in expected future cash flows from loan modifications are included in the regular evaluations of cash flows expected to be collected.

The following table provides activity for the accretable yield of loans accounted for under ASC 310-30.



	Three Months Ended
	September 30,			September 30,
(Dollars in thousands)	2016			2015
Accretable yield, beginning balance	$	55,630		$	63,643
Acquisitions	—			10,407
Accretable yield amortized to interest income	(6,449		)	(5,939		)
Accretable yield amortized to indemnification asset/liability ⁽¹⁾	(1,744		)	(3,280		)
Reclassification from non-accretable difference⁽²⁾	5,370			2,298
Increases (decreases) in interest cash flows due to payments and changes in interest rates	170			(610		)
Accretable yield, ending balance ⁽³⁾	$	52,977		$	66,519



	Nine Months Ended
	September 30,			September 30,
(Dollars in thousands)	2016			2015
Accretable yield, beginning balance	$	63,902		$	79,102
Acquisitions	1,266			11,305
Accretable yield amortized to interest income	(17,105		)	(18,359		)
Accretable yield amortized to indemnification asset/liability ⁽¹⁾	(5,539		)	(10,945		)
Reclassification from non-accretable difference⁽²⁾	12,099			5,154
(Decreases) increases in interest cash flows due to payments and changes in interest rates	(1,646		)	262
Accretable yield, ending balance ⁽³⁾	$	52,977		$	66,519

(1) Represents the portion of the current period accreted yield, resulting from lower expected losses, applied to reduce the loss share indemnification asset.

(2) Reclassification is the result of subsequent increases in expected principal cash flows.

(3) As of September 30, 2016, the Company estimates that the remaining accretable yield balance to be amortized to the indemnification asset for the bank acquisitions is $1.5 million. The remainder of the accretable yield related to bank acquisitions is expected to be amortized to interest income.

Accretion to interest income accounted for under ASC 310-30 totaled $6.4 million and $5.9 million in the third quarter of 2016 and 2015, respectively. For the nine months ended September 30, 2016 and 2015, the Company recorded accretion to interest income of $17.1 million and $18.4 million, respectively. These amounts include accretion from both covered and non-covered loans, and are included together within interest and fees on loans in the Consolidated Statements of Income.

Items Impacting Comparative Financial Results:

Acquisitions

On August 19, 2016, the Company, through its wholly-owned subsidiary Lake Forest Bank & Trust Company, completed its acquisition of approximately $555 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 $131 million in assets and approximately $100 million in deposits.

On July 24, 2015, the Company completed its acquisition of Community Financial Shares, Inc ("CFIS"). CFIS was the parent company of Community Bank - Wheaton/Glen Ellyn ("CBWGE"). Through this transaction, the Company acquired CBWGE's four banking locations in Wheaton and Glen Ellyn, Illinois, approximately $351 million in assets and approximately $290 million in deposits.

On July 17, 2015, the Company completed its acquisition of Suburban Illinois Bancorp, Inc. ("Suburban"). Suburban was the parent company of Suburban Bank & Trust Company ("SBT"). Through this transaction, the Company acquired SBT's ten banking locations in Chicago and its suburbs, approximately $495 million in assets and approximately $417 million in deposits.

On July 1, 2015, the Company, through its wholly-owned subsidiary Wintrust Bank, completed its acquisition of North Bank. Through this transaction, Wintrust Bank acquired two banking locations, $118 million in assets and approximately $101 million in deposits.

On January 16, 2015, the Company completed its acquisition of Delavan Bancshares, Inc. ("Delavan"). Delavan was the parent company of Community Bank CBD. Through this transaction, Town Bank acquired four banking locations, approximately $224 million in assets and approximately $170 million in deposits.

Previously Announced Acquisitions

On July 6, 2016, the Company announced the signing of a definitive agreement to acquire First Community Financial Corporation ("FCFC"). FCFC is the parent company of First Community Bank, an Illinois state-chartered bank, which operates two banking locations in Elgin, Illinois. As of June 30, 2016, First Community Bank had approximately $177 million in assets, approximately $79 million in loans and approximately $154 million in deposits.

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, 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, Chicago, 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 Corporation, one of the largest insurance premium finance companies operating in the United States, serves commercial and life insurance loan customers throughout the country.


•	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, 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 2015 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:


•	difficult economic conditions have adversely affected our company and the financial services industry in general and further deterioration in economic conditions may materially adversely affect our business, financial condition, results of operations and cash flows;


•	since our business is concentrated in the Chicago metropolitan and southern Wisconsin market areas, further declines in the economy of this region could adversely affect our business;


•	if our allowance for loan losses is not sufficient to absorb losses that may occur in our loan portfolio, our financial condition and liquidity could suffer;


•	a significant portion of our loan portfolio is comprised of commercial loans, the repayment of which is largely dependent upon the financial success and economic viability of the borrower;


•	a substantial portion of our loan portfolio is secured by real estate, in particular commercial real estate. Deterioration in the real estate markets could lead to additional losses, which could have a material adverse effect on our financial condition and results of operations;


•	any inaccurate assumptions in our analytical and forecasting models could cause us to miscalculate our projected revenue or losses, which could adversely affect our financial condition;


•	unanticipated changes in prevailing interest rates and the effects of changing regulation could adversely affect our net interest income, which is our largest source of income;


•	our liquidity position may be negatively impacted if economic conditions continue to suffer;


•	the financial services industry is very competitive, and if we are not able to compete effectively, we may lose market share and our business could suffer;


•	if we are unable to compete effectively, we will lose market share and income from deposits, loans and other products may be reduced. This could adversely affect our profitability and have a material adverse effect on our business, financial condition and results of operations;


•	if we are unable to continue to identify favorable acquisitions or successfully integrate our acquisitions, our growth may be limited and our results of operations could suffer;


•	our participation in FDIC-assisted acquisitions may present additional risks to our financial condition and results of operations;


•	an actual or perceived reduction in our financial strength may cause others to reduce or cease doing business with us, which could result in a decrease in our net interest income and fee revenues;


•	if our growth requires us to raise additional capital, that capital may not be available when it is needed or the cost of that capital may be very high;


•	disruption in the financial markets could result in lower fair values for our investment securities portfolio;


•	our controls and procedures may fail or be circumvented;


•	new lines of business and new products and services are essential to our ability to compete but may subject us to additional risks;


•	failures of our information technology systems may adversely affect our operations;


•	failures by or of our vendors may adversely affect our operations;


•	we issue debit cards, and debit card transactions pose a particular cybersecurity risk that is outside of our control;


•	we depend on the accuracy and completeness of information we receive about our customers and counterparties to make credit decisions;


•	if we are unable to attract and retain experienced and qualified personnel, our ability to provide high quality service will be diminished, we may lose key customer relationships, and our results of operations may suffer;


•	we are subject to environmental liability risk associated with lending activities;


•	we are subject to claims and legal actions which could negatively affect our results of operations or financial condition;

•

losses incurred in connection with actual or projected repurchases and indemnification payments related to mortgages that we have sold into the secondary market may exceed our financial statement reserves and we may be required to increase such reserves in the future. Increases to our reserves and losses incurred in connection with actual loan repurchases and indemnification payments could have a material adverse effect on our business, financial condition, results of operations or cash flows;


•	consumers may decide not to use banks to complete their financial transactions, which could adversely affect our business and results of operations;


•	we may be adversely impacted by the soundness of other financial institutions;


•	de novo operations often involve significant expenses and delayed returns and may negatively impact Wintrust's profitability;


•	we are subject to examinations and challenges by tax authorities, and changes in federal and state tax laws and changes in interpretation of existing laws can impact our financial results;


•	changes in accounting policies or accounting standards could materially adversely affect how we report our financial results and financial condition;


•	we are a bank holding company, and our sources of funds, including to pay dividends, are limited;


•	anti-takeover provisions could negatively impact our shareholders;


•	if we fail to meet our regulatory capital ratios, we may be forced to raise capital or sell assets;


•	if our credit rating is lowered, our financing costs could increase;


•	changes in the United States’ monetary policy may restrict our ability to conduct our business in a profitable manner;


•	legislative and regulatory actions taken now or in the future regarding the financial services industry may significantly increase our costs or limit our ability to conduct our business in a profitable manner;


•	financial reform legislation and increased regulatory rigor around mortgage-related issues may reduce our ability to market our products to consumers and may limit our ability to profitably operate our mortgage business;


•	federal, state and local consumer lending laws may restrict our ability to originate certain mortgage loans or increase our risk of liability with respect to such loans and could increase our cost of doing business;


•	regulatory initiatives regarding bank capital requirements may require heightened capital;


•	our FDIC insurance premiums may increase, which could negatively impact our results of operations;


•	non-compliance with the USA PATRIOT Act, Bank Secrecy Act or other laws and regulations could result in fines or sanctions;


•	our premium finance business may involve a higher risk of delinquency or collection than our other lending operations, and could expose us to losses;


•	widespread financial difficulties or credit downgrades among commercial and life insurance providers could lessen the value of the collateral securing our premium finance loans and impair the financial condition and liquidity of FIFC and FIFC Canada;


•	regulatory changes could significantly reduce loan volume and impair the financial condition of FIFC; and


•	our wealth management business in general, and WHI's brokerage operation, in particular, exposes us to certain risks associated with the securities industry.

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 2:00 p.m. (CT) Tuesday, October 18, 2016 regarding third quarter and year-to-date 2016 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #91910010. A simultaneous audio-only web cast and replay of the conference call may be accessed via the Company’s web site at (http://www.wintrust.com), Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the third quarter and year-to-date 2016 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,
	2016			2016			2016			2015			2015
Selected Financial Condition Data (at end of period):
Total assets	$	25,321,759		$	24,420,616		$	23,488,168		$	22,909,348		$	22,035,216
Total loans, excluding loans held-for-sale and covered loans	19,101,261			18,174,655			17,446,413			17,118,117			16,316,211
Total deposits	21,147,655			20,041,750			19,217,071			18,639,634			18,228,469
Junior subordinated debentures	253,566			253,566			253,566			268,566			268,566
Total shareholders’ equity	2,674,474			2,623,595			2,418,442			2,352,274			2,335,736
Selected Statements of Income Data:
Net interest income	184,636			175,270			171,509			167,206			165,540
Net revenue ⁽¹⁾	271,240			260,069			240,261			232,296			230,493
Net income	53,115			50,041			49,111			35,512			38,355
Net income per common share – Basic	$	0.96		$	0.94		$	0.94		$	0.66		$	0.71
Net income per common share – Diluted	$	0.92		$	0.90		$	0.90		$	0.64		$	0.69
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin	3.21		%	3.24		%	3.29		%	3.26		%	3.31		%
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.24		%	3.27		%	3.32		%	3.29		%	3.33		%
Non-interest income to average assets	1.38		%	1.44		%	1.21		%	1.16		%	1.19		%
Non-interest expense to average assets	2.82		%	2.89		%	2.70		%	2.98		%	2.93		%
Net overhead ratio ⁽³⁾	1.44		%	1.46		%	1.49		%	1.82		%	1.74		%
Return on average assets	0.85		%	0.85		%	0.86		%	0.63		%	0.70		%
Return on average common equity	8.20		%	8.43		%	8.55		%	6.03		%	6.60		%
Return on average tangible common equity (non-GAAP) ⁽²⁾	10.55		%	11.12		%	11.33		%	8.12		%	8.88		%
Average total assets	$	24,879,252		$	23,754,755		$	22,902,913		$	22,225,112		$	21,679,062
Average total shareholders’ equity	2,651,684			2,465,732			2,389,770			2,347,545			2,310,511
Average loans to average deposits ratio (excluding loans held-for-sale, excluding covered loans)	89.8		%	92.4		%	92.2		%	90.2		%	89.7		%
Average loans to average deposits ratio (excluding loans held-for-sale, including covered loans)	90.3			92.9			93.0			91.0			90.6
Common Share Data at end of period:
Market price per common share	$	55.57		$	51.00		$	44.34		$	48.52		$	53.43
Book value per common share ⁽²⁾	$	46.86		$	45.96		$	44.67		$	43.42		$	43.12
Tangible common book value per share ⁽²⁾	$	37.06		$	36.12		$	34.20		$	33.17		$	32.83
Common shares outstanding	51,714,683			51,619,155			48,518,998			48,383,279			48,336,870
Other Data at end of period:⁽⁶⁾
Leverage Ratio⁽⁴⁾	9.0		%	9.2		%	8.7		%	9.1		%	9.2		%
Tier 1 Capital to risk-weighted assets ⁽⁴⁾	9.8		%	10.1		%	9.6		%	10.0		%	10.3		%
Common equity Tier 1 capital to risk-weighted assets ⁽⁴⁾	8.7		%	8.9		%	8.4		%	8.4		%	8.6		%
Total capital to risk-weighted assets ⁽⁴⁾	12.1		%	12.4		%	12.1		%	12.2		%	12.6		%
Allowance for credit losses ⁽⁵⁾	$	119,341		$	115,426		$	111,201		$	106,349		$	103,922
Non-performing loans	83,128			88,119			89,499			84,057			85,976
Allowance for credit losses to total loans ⁽⁵⁾	0.62		%	0.64		%	0.64		%	0.62		%	0.64		%
Non-performing loans to total loans	0.44		%	0.48		%	0.51		%	0.49		%	0.53		%
Number of:
Bank subsidiaries	15			15			15			15			15
Banking offices	152			153			153			152			160


(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. As of January 1, 2015 capital ratios are calculated under the requirements of Basel III.


(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)	2016			2016			2016			2015			2015
Assets
Cash and due from banks	$	242,825		$	267,551		$	208,480		$	271,454		$	247,341
Federal funds sold and securities purchased under resale agreements	4,122			4,024			3,820			4,341			3,314
Interest bearing deposits with banks	816,104			693,269			817,013			607,782			701,106
Available-for-sale securities, at fair value	1,650,096			637,663			770,983			1,716,388			2,214,281
Held-to-maturity securities, at amortized cost	932,767			992,211			911,715			884,826			—
Trading account securities	1,092			3,613			2,116			448			3,312
Federal Home Loan Bank and Federal Reserve Bank stock	129,630			121,319			113,222			101,581			90,308
Brokerage customer receivables	25,511			26,866			28,266			27,631			28,293
Mortgage loans held-for-sale	559,634			554,256			314,554			388,038			347,005
Loans, net of unearned income, excluding covered loans	19,101,261			18,174,655			17,446,413			17,118,117			16,316,211
Covered loans	95,940			105,248			138,848			148,673			168,609
Total loans	19,197,201			18,279,903			17,585,261			17,266,790			16,484,820
Allowance for loan losses	(117,693		)	(114,356		)	(110,171		)	(105,400		)	(102,996		)
Allowance for covered loan losses	(1,422		)	(2,412		)	(2,507		)	(3,026		)	(2,918		)
Net loans	19,078,086			18,163,135			17,472,583			17,158,364			16,378,906
Premises and equipment, net	597,263			595,792			591,608			592,256			587,348
Lease investments, net	116,355			103,749			89,337			63,170			29,111
Accrued interest receivable and other assets	660,923			670,014			647,853			597,099			629,211
Trade date securities receivable	677			1,079,238			1,008,613			—			277,981
Goodwill	485,938			486,095			484,280			471,761			472,166
Other intangible assets	20,736			21,821			23,725			24,209			25,533
Total assets	$	25,321,759		$	24,420,616		$	23,488,168		$	22,909,348		$	22,035,216
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	5,711,042		$	5,367,672		$	5,205,410		$	4,836,420		$	4,705,994
Interest bearing	15,436,613			14,674,078			14,011,661			13,803,214			13,522,475
Total deposits	21,147,655			20,041,750			19,217,071			18,639,634			18,228,469
Federal Home Loan Bank advances	419,632			588,055			799,482			853,431			443,955
Other borrowings	241,366			252,611			253,126			265,785			259,805
Subordinated notes	138,943			138,915			138,888			138,861			138,834
Junior subordinated debentures	253,566			253,566			253,566			268,566			268,566
Trade date securities payable	—			40,000			—			538			617
Accrued interest payable and other liabilities	446,123			482,124			407,593			390,259			359,234
Total liabilities	22,647,285			21,797,021			21,069,726			20,557,074			19,699,480
Shareholders’ Equity:
Preferred stock	251,257			251,257			251,257			251,287			251,312
Common stock	51,811			51,708			48,608			48,469			48,422
Surplus	1,356,759			1,350,751			1,194,750			1,190,988			1,187,407
Treasury stock	(4,522		)	(4,145		)	(4,145		)	(3,973		)	(3,964		)
Retained earnings	1,051,748			1,008,464			967,882			928,211			901,652
Accumulated other comprehensive loss	(32,579		)	(34,440		)	(39,910		)	(62,708		)	(49,093		)
Total shareholders’ equity	2,674,474			2,623,595			2,418,442			2,352,274			2,335,736
Total liabilities and shareholders’ equity	$	25,321,759		$	24,420,616		$	23,488,168		$	22,909,348		$	22,035,216

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)	2016			2016			2016			2015			2015
Interest income
Interest and fees on loans	$	190,189		$	178,530		$	173,127		$	169,501		$	167,831
Interest bearing deposits with banks	1,156			793			746			493			372
Federal funds sold and securities purchased under resale agreements	1			1			1			—			1
Investment securities	15,496			16,398			17,190			16,405			16,130
Trading account securities	18			14			11			25			19
Federal Home Loan Bank and Federal Reserve Bank stock	1,094			1,112			937			857			821
Brokerage customer receivables	195			216			219			206			205
Total interest income	208,149			197,064			192,231			187,487			185,379
Interest expense
Interest on deposits	15,621			13,594			12,781			12,617			12,436
Interest on Federal Home Loan Bank advances	2,577			2,984			2,886			2,684			2,458
Interest on other borrowings	1,137			1,086			1,058			1,007			1,045
Interest on subordinated notes	1,778			1,777			1,777			1,777			1,776
Interest on junior subordinated debentures	2,400			2,353			2,220			2,196			2,124
Total interest expense	23,513			21,794			20,722			20,281			19,839
Net interest income	184,636			175,270			171,509			167,206			165,540
Provision for credit losses	9,571			9,129			8,034			9,059			8,322
Net interest income after provision for credit losses	175,065			166,141			163,475			158,147			157,218
Non-interest income
Wealth management	19,334			18,852			18,320			18,634			18,243
Mortgage banking	34,712			36,807			21,735			23,317			27,887
Service charges on deposit accounts	8,024			7,726			7,406			7,210			7,403
Gains (losses) on investment securities, net	3,305			1,440			1,325			(79		)	(98		)
Fees from covered call options	3,633			4,649			1,712			3,629			2,810
Trading (losses) gains, net	(432		)	(316		)	(168		)	205			(135		)
Operating lease income, net	4,459			4,005			2,806			1,973			613
Other	13,569			11,636			15,616			10,201			8,230
Total non-interest income	86,604			84,799			68,752			65,090			64,953
Non-interest expense
Salaries and employee benefits	103,718			100,894			95,811			99,780			97,749
Equipment	9,449			9,307			8,767			8,799			8,456
Operating lease equipment depreciation	3,605			3,385			2,050			1,202			431
Occupancy, net	12,767			11,943			11,948			13,062			12,066
Data processing	7,432			7,138			6,519			7,284			8,127
Advertising and marketing	7,365			6,941			3,779			5,373			6,237
Professional fees	5,508			5,419			4,059			4,387			4,100
Amortization of other intangible assets	1,085			1,248			1,298			1,324			1,350
FDIC insurance	3,686			4,040			3,613			3,317			3,035
OREO expense, net	1,436			1,348			560			2,598			(367		)
Other	20,564			19,306			15,326			19,703			18,790
Total non-interest expense	176,615			170,969			153,730			166,829			159,974
Income before taxes	85,054			79,971			78,497			56,408			62,197
Income tax expense	31,939			29,930			29,386			20,896			23,842
Net income	$	53,115		$	50,041		$	49,111		$	35,512		$	38,355
Preferred stock dividends and discount accretion	3,628			3,628			3,628			3,629			4,079
Net income applicable to common shares	$	49,487		$	46,413		$	45,483		$	31,883		$	34,276
Net income per common share - Basic	$	0.96		$	0.94		$	0.94		$	0.66		$	0.71
Net income per common share - Diluted	$	0.92		$	0.90		$	0.90		$	0.64		$	0.69
Cash dividends declared per common share	$	0.12		$	0.12		$	0.12		$	0.11		$	0.11
Weighted average common shares outstanding	51,679			49,140			48,448			48,371			48,158
Dilutive potential common shares	4,047			3,965			3,820			4,005			4,049
Average common shares and dilutive common shares	55,726			53,105			52,268			52,376			52,207

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)	2016			2016			2016			2015			2015
Balance:
Commercial	$	5,951,544		$	5,144,533		$	4,890,246		$	4,713,909		$	4,400,185
Commercial real estate	5,908,684			5,848,334			5,737,959			5,529,289			5,307,566
Home equity	742,868			760,904			774,342			784,675			797,465
Residential real estate	663,598			653,664			626,043			607,451			571,743
Premium finance receivables - commercial	2,430,233			2,478,280			2,320,987			2,374,921			2,407,075
Premium finance receivables - life insurance	3,283,359			3,161,562			2,976,934			2,961,496			2,700,275
Consumer and other	120,975			127,378			119,902			146,376			131,902
Total loans, net of unearned income, excluding covered loans	$	19,101,261		$	18,174,655		$	17,446,413		$	17,118,117		$	16,316,211
Covered loans	95,940			105,248			138,848			148,673			168,609
Total loans, net of unearned income	$	19,197,201		$	18,279,903		$	17,585,261		$	17,266,790		$	16,484,820
Mix:
Commercial	31		%	28		%	28		%	27		%	27		%
Commercial real estate	31			31			32			32			32
Home equity	4			4			4			5			5
Residential real estate	3			4			4			3			3
Premium finance receivables - commercial	13			14			13			14			15
Premium finance receivables - life insurance	17			17			17			17			16
Consumer and other	1			1			1			1			1
Total loans, net of unearned income, excluding covered loans	100		%	99		%	99		%	99		%	99		%
Covered loans	—			1			1			1			1
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)	2016			2016			2016			2015			2015
Balance:
Non-interest bearing	$	5,711,042		$	5,367,672		$	5,205,410		$	4,836,420		$	4,705,994
NOW and interest bearing demand deposits	2,552,611			2,450,710			2,369,474			2,390,217			2,231,258
Wealth management deposits ⁽¹⁾	2,283,233			1,904,121			1,761,710			1,643,653			1,469,920
Money market	4,421,631			4,384,134			4,157,083			4,041,300			4,001,518
Savings	1,977,661			1,851,863			1,766,552			1,723,367			1,684,007
Time certificates of deposit	4,201,477			4,083,250			3,956,842			4,004,677			4,135,772
Total deposits	$	21,147,655		$	20,041,750		$	19,217,071		$	18,639,634		$	18,228,469
Mix:
Non-interest bearing	27		%	27		%	27		%	26		%	26		%
NOW and interest bearing demand deposits	12			12			12			13			12
Wealth management deposits ⁽¹⁾	11			10			9			9			8
Money market	21			22			22			22			22
Savings	9			9			9			9			9
Time certificates of deposit	20			20			21			21			23
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)	2016			2016			2016			2015			2015
Net interest income - FTE	$	186,192		$	176,733		$	172,944		$	168,515		$	166,737
Call option income	3,633			4,649			1,712			3,629			2,810
Net interest income including call option income	$	189,825		$	181,382		$	174,656		$	172,144		$	169,547
Yield on earning assets	3.65		%	3.67		%	3.71		%	3.69		%	3.73		%
Rate on interest-bearing liabilities	0.58		%	0.56		%	0.55			0.55		%	0.54
Rate spread	3.07		%	3.11		%	3.16		%	3.14		%	3.19		%
Less: Fully tax-equivalent adjustment	(0.03		)	(0.03		)	(0.03		)	(0.03		)	(0.02		)
Net free funds contribution	0.17		%	0.16			0.16			0.15		%	0.14
Net interest margin (GAAP-derived)	3.21		%	3.24		%	3.29		%	3.26		%	3.31		%
Fully tax-equivalent adjustment	0.03			0.03			0.03			0.03			0.02
Net interest margin - FTE	3.24		%	3.27		%	3.32		%	3.29		%	3.33		%
Call option income	0.06		%	0.09		%	0.03			0.07		%	0.06
Net interest margin - FTE, including call option income	3.30		%	3.36		%	3.35		%	3.36		%	3.39		%

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)	2016			2015			2014			2013			2012
Net interest income - FTE	$	535,869		$	646,238		$	601,744		$	552,887		$	521,463
Call option income	9,994			15,364			7,859			4,773			10,476
Net interest income including call option income	$	545,863		$	661,602		$	609,603		$	557,660		$	531,939
Yield on earning assets	3.68		%	3.76		%	3.96		%	4.01		%	4.21		%
Rate on interest-bearing liabilities	0.56		%	0.54			0.55			0.63			0.86
Rate spread	3.12		%	3.22		%	3.41		%	3.38		%	3.35		%
Less: Fully tax-equivalent adjustment	(0.02		)	(0.02		)	(0.02		)	(0.01		)	(0.02		)
Net free funds contribution	0.15			0.14			0.12			0.12			0.14
Net interest margin (GAAP-derived)	3.25		%	3.34		%	3.51		%	3.49		%	3.47		%
Fully tax-equivalent adjustment	0.02			0.02			0.02			0.01			0.02
Net interest margin - FTE	3.27		%	3.36		%	3.53		%	3.50		%	3.49		%
Call option income	0.06		%	0.08			0.05			0.03			0.07
Net interest margin - FTE, including call option income	3.33		%	3.44		%	3.58		%	3.53		%	3.56		%

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)	2016			2016			2016			2015			2015
Liquidity management assets	$	3,671,577		$	3,413,113		$	3,300,138		$	3,245,393		$	3,140,782
Other earning assets	29,875			29,759			28,731			29,792			30,990
Loans, net of unearned income	19,071,621			18,204,552			17,508,593			16,889,922			16,509,001
Covered loans	101,570			109,533			141,351			154,846			174,768
Total earning assets	$	22,874,643		$	21,756,957		$	20,978,813		$	20,319,953		$	19,855,541
Allowance for loan and covered loan losses	(121,156		)	(116,984		)	(112,028		)	(109,448		)	(106,091		)
Cash and due from banks	240,239			272,935			259,343			260,593			251,289
Other assets	1,885,526			1,841,847			1,776,785			1,754,014			1,678,323
Total assets	$	24,879,252		$	23,754,755		$	22,902,913		$	22,225,112		$	21,679,062
Interest-bearing deposits	$	15,117,102		$	14,065,995		$	13,717,333		$	13,606,046		$	13,489,651
Federal Home Loan Bank advances	459,198			946,081			825,104			441,669			394,666
Other borrowings	249,307			248,233			257,384			269,738			272,549
Subordinated notes	138,925			138,898			138,870			138,852			138,825
Junior subordinated debentures	253,566			253,566			257,687			268,566			264,974
Total interest-bearing liabilities	$	16,218,098		$	15,652,773		$	15,196,378		$	14,724,871		$	14,560,665
Non-interest bearing deposits	5,566,983			5,223,384			4,939,746			4,776,977			4,473,632
Other liabilities	442,487			412,866			377,019			375,719			334,254
Equity	2,651,684			2,465,732			2,389,770			2,347,545			2,310,511
Total liabilities and shareholders’ equity	$	24,879,252		$	23,754,755		$	22,902,913		$	22,225,112		$	21,679,062

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Net Interest Margin - 5 Quarter Trends



	Three Months Ended
	September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015
Yield earned on:
Liquidity management assets	2.03	%	2.27	%	2.41	%	2.28	%	2.29	%
Other earning assets	2.96	%	3.21	%	3.31	%	3.26	%	3.00	%
Loans, net of unearned income	3.96	%	3.92	%	3.94	%	3.95	%	3.98	%
Covered loans	4.45	%	5.44	%	5.72	%	4.79	%	5.91	%
Total earning assets	3.65	%	3.67	%	3.71	%	3.69	%	3.73	%
Rate paid on:
Interest-bearing deposits	0.41	%	0.39	%	0.37	%	0.37	%	0.37	%
Federal Home Loan Bank advances	2.23	%	1.27	%	1.41	%	2.41	%	2.47	%
Other borrowings	1.81	%	1.76	%	1.65	%	1.48	%	1.52	%
Subordinated notes	5.12	%	5.12	%	5.12	%	5.12	%	5.12	%
Junior subordinated debentures	3.70	%	3.67	%	3.41	%	3.20	%	3.14	%
Total interest-bearing liabilities	0.58	%	0.56	%	0.55	%	0.55	%	0.54	%
Interest rate spread	3.07	%	3.11	%	3.16	%	3.14	%	3.19	%
Less: Fully tax-equivalent adjustment	(0.03	)	(0.03	)	(0.03	)	(0.03	)	(0.02	)
Net free funds/contribution	0.17		0.16		0.16		0.15		0.14
Net interest margin (GAAP)	3.21	%	3.24	%	3.29	%	3.26	%	3.31	%
Fully tax-equivalent adjustment	0.03		0.03		0.03		0.03		0.02
Net interest margin - FTE	3.24	%	3.27	%	3.32	%	3.29	%	3.33	%

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)	2016			2016			2016			2015			2015
Brokerage	$	6,752		$	6,302		$	6,057		$	6,850		$	6,579
Trust and asset management	12,582			12,550			12,263			11,784			11,664
Total wealth management	19,334			18,852			18,320			18,634			18,243
Mortgage banking	34,712			36,807			21,735			23,317			27,887
Service charges on deposit accounts	8,024			7,726			7,406			7,210			7,403
Gains (losses) on investment securities, net	3,305			1,440			1,325			(79		)	(98		)
Fees from covered call options	3,633			4,649			1,712			3,629			2,810
Trading (losses) gains, net	(432		)	(316		)	(168		)	205			(135		)
Operating lease income, net	4,459			4,005			2,806			1,973			613
Other:
Interest rate swap fees	2,881			1,835			4,438			2,343			2,606
BOLI	884			1,257			472			1,463			212
Administrative services	1,151			1,074			1,069			1,101			1,072
Gain on extinguishment of debt	—			—			4,305			—			—
Miscellaneous	8,653			7,470			5,332			5,294			4,340
Total other income	13,569			11,636			15,616			10,201			8,230
Total Non-Interest Income	$	86,604		$	84,799		$	68,752		$	65,090		$	64,953

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)	2016		2016		2016		2015		2015
Salaries and employee benefits:
Salaries	$	54,309	$	52,924	$	50,282	$	50,982	$	53,028
Commissions and incentive compensation	33,740		32,531		26,375		31,222		30,035
Benefits	15,669		15,439		19,154		17,576		14,686
Total salaries and employee benefits	103,718		100,894		95,811		99,780		97,749
Equipment	9,449		9,307		8,767		8,799		8,456
Operating lease equipment depreciation	3,605		3,385		2,050		1,202		431
Occupancy, net	12,767		11,943		11,948		13,062		12,066
Data processing	7,432		7,138		6,519		7,284		8,127
Advertising and marketing	7,365		6,941		3,779		5,373		6,237
Professional fees	5,508		5,419		4,059		4,387		4,100
Amortization of other intangible assets	1,085		1,248		1,298		1,324		1,350
FDIC insurance	3,686		4,040		3,613		3,317		3,035
OREO expense, net	1,436		1,348		560		2,598		(367		)
Other:
Commissions - 3rd party brokers	1,362		1,324		1,310		1,321		1,364
Postage	1,889		2,038		1,302		1,892		1,927
Miscellaneous	17,313		15,944		12,714		16,490		15,499
Total other expense	20,564		19,306		15,326		19,703		18,790
Total Non-Interest Expense	$	176,615	$	170,969	$	153,730	$	166,829	$	159,974

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)	2016			2016			2016			2015			2015
Allowance for loan losses at beginning of period	$	114,356		$	110,171		$	105,400		$	102,996		$	100,204
Provision for credit losses	9,741			9,269			8,423			9,196			8,665
Other adjustments	(112		)	(134		)	(78		)	(243		)	(153		)
Reclassification (to) from allowance for unfunded lending-related commitments	(579		)	(40		)	(81		)	13			(42		)
Charge-offs:
Commercial	3,469			721			671			1,369			964
Commercial real estate	382			502			671			2,734			1,948
Home equity	574			2,046			1,052			680			1,116
Residential real estate	134			693			493			211			1,138
Premium finance receivables - commercial	1,959			1,911			2,480			2,676			1,595
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	389			224			107			179			116
Total charge-offs	6,907			6,097			5,474			7,849			6,877
Recoveries:
Commercial	176			121			629			315			462
Commercial real estate	364			296			369			491			213
Home equity	65			71			48			183			42
Residential real estate	61			31			112			55			136
Premium finance receivables - commercial	456			633			787			223			278
Premium finance receivables - life insurance	—			—			—			—			16
Consumer and other	72			35			36			20			52
Total recoveries	1,194			1,187			1,981			1,287			1,199
Net charge-offs	(5,713		)	(4,910		)	(3,493		)	(6,562		)	(5,678		)
Allowance for loan losses at period end	$	117,693		$	114,356		$	110,171		$	105,400		$	102,996
Allowance for unfunded lending-related commitments at period end	1,648			1,070			1,030			949			926
Allowance for credit losses at period end	$	119,341		$	115,426		$	111,201		$	106,349		$	103,922
Annualized net charge-offs by category as a percentage of its own respective category’s average:
Commercial	0.24		%	0.05		%	0.00		%	0.09		%	0.05		%
Commercial real estate	0.00			0.01			0.02			0.16			0.13
Home equity	0.27			1.03			0.52			0.25			0.55
Residential real estate	0.03			0.26			0.17			0.07			0.42
Premium finance receivables - commercial	0.24			0.21			0.29			0.41			0.21
Premium finance receivables - life insurance	0.00			0.00			0.00			0.00			0.00
Consumer and other	0.92			0.57			0.20			0.37			0.17
Total loans, net of unearned income, excluding covered loans	0.12		%	0.11		%	0.08		%	0.15		%	0.14		%
Net charge-offs as a percentage of the provision for credit losses	58.65		%	52.97		%	41.47		%	71.35		%	65.53		%
Loans at period-end	$	19,101,261		$	18,174,655		$	17,446,413		$	17,118,117		$	16,316,211
Allowance for loan losses as a percentage of loans at period end	0.62		%	0.63		%	0.63		%	0.62		%	0.63		%
Allowance for credit losses as a percentage of loans at period end	0.62		%	0.64		%	0.64		%	0.62		%	0.64		%

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)	2016			2016			2016			2015			2015
Loans past due greater than 90 days and still accruing⁽¹⁾:
Commercial	$	—		$	235		$	338		$	541		$	—
Commercial real estate	—			—			1,260			—			—
Home equity	—			—			—			—			—
Residential real estate	—			—			—			—			—
Premium finance receivables - commercial	7,754			10,558			9,548			10,294			8,231
Premium finance receivables - life insurance	—			—			1,641			—			—
Consumer and other	60			163			180			150			140
Total loans past due greater than 90 days and still accruing	7,814			10,956			12,967			10,985			8,371
Non-accrual loans⁽²⁾:
Commercial	16,418			16,801			12,373			12,712			12,018
Commercial real estate	22,625			24,415			26,996			26,645			28,617
Home equity	9,309			8,562			9,365			6,848			8,365
Residential real estate	12,205			12,413			11,964			12,043			14,557
Premium finance receivables - commercial	14,214			14,497			15,350			14,561			13,751
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	543			475			484			263			297
Total non-accrual loans	75,314			77,163			76,532			73,072			77,605
Total non-performing loans:
Commercial	16,418			17,036			12,711			13,253			12,018
Commercial real estate	22,625			24,415			28,256			26,645			28,617
Home equity	9,309			8,562			9,365			6,848			8,365
Residential real estate	12,205			12,413			11,964			12,043			14,557
Premium finance receivables - commercial	21,968			25,055			24,898			24,855			21,982
Premium finance receivables - life insurance	—			—			1,641			—			—
Consumer and other	603			638			664			413			437
Total non-performing loans	$	83,128		$	88,119		$	89,499		$	84,057		$	85,976
Other real estate owned	19,933			22,154			24,022			26,849			29,053
Other real estate owned - from acquisitions	15,117			15,909			16,980			17,096			22,827
Other repossessed assets	428			420			171			174			193
Total non-performing assets	$	118,606		$	126,602		$	130,672		$	128,176		$	138,049
TDRs performing under the contractual terms of the loan agreement	29,440			33,310			34,949			42,744			49,173
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.28		%	0.33		%	0.26		%	0.28		%	0.27		%
Commercial real estate	0.38			0.42			0.49			0.48			0.54
Home equity	1.25			1.13			1.21			0.87			1.05
Residential real estate	1.84			1.90			1.91			1.98			2.55
Premium finance receivables - commercial	0.90			1.01			1.07			1.05			0.91
Premium finance receivables - life insurance	—			—			0.06			—			—
Consumer and other	0.50			0.50			0.55			0.28			0.33
Total loans, net of unearned income	0.44		%	0.48		%	0.51		%	0.49		%	0.53		%
Total non-performing assets as a percentage of total assets	0.47		%	0.52		%	0.56		%	0.56		%	0.63		%
Allowance for loan losses as a percentage of total non-performing loans	141.58		%	129.78		%	123.10		%	125.39		%	119.79		%


(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 $14.8 million, $16.3 million, $17.6 million, $9.1 million and $10.1 million as of September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively.

WINTRUST FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 17, 2016

Attached files