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

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8-K - 8-K - WINTRUST FINANCIAL CORP	a8-kq22017.htm

Exhibit 99.1

Wintrust Financial Corporation

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

News Release




FOR IMMEDIATE RELEASE		July 18, 2017

FOR MORE INFORMATION CONTACT:

Edward J. Wehmer, President & Chief Executive Officer

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

(847) 939-9000

Web site address: www.wintrust.com

Wintrust Financial Corporation Reports Record Second Quarter 2017 Net Income, an Increase of 30% Over Prior Year, and Year-to-Date 2017 Net Income of $123.3 million, an Increase of 24% Over Prior Year

ROSEMONT, ILLINOIS – Wintrust Financial Corporation (“Wintrust” or “the Company”) (Nasdaq: WTFC) announced net income of $64.9 million or $1.11 per diluted common share for the second quarter of 2017 compared to net income of $58.4 million or $1.00 per diluted common share for the first quarter of 2017 and $50.0 million or $0.90 per diluted common share for the second quarter of 2016. The Company recorded net income of $123.3 million or $2.11 per diluted common share for the first six months of 2017 compared to net income of $99.2 million or $1.80 per diluted common share for the same period of 2016.

Highlights of the Second Quarter of 2017 *:


•	Total assets increased by $1.2 billion from the prior quarter and now total $26.9 billion.


•	Total loans, excluding covered loans and mortgage loans held-for-sale, increased by $812 million from the prior quarter.


•	Total deposits increased $875 million to $22.6 billion. Non-interest bearing deposit accounts now comprise 28% of total deposits.


•	Mortgage banking revenue increased $14.0 million to $35.9 million.


•	Net interest margin increased primarily as a result of the recent rate increases in March and June of 2017. This increase as well as growth in earning assets drove the $11.8 million increase in net interest income over the prior quarter.


•	Return on average assets increased to 1.00% from 0.94%.


•	Net overhead ratio decreased to 1.44% from 1.60%, below our stated goal of 1.50%.


•	Non-performing loans as a percentage of total loans, excluding covered loans, decreased to 0.33% from 0.40% in the first quarter of 2017. The allowance for loan losses as a percentage of total non-performing loans, excluding covered loans, increased to 188% from 159% in the prior quarter.


•	The return on average common equity in the current quarter increased to 9.55% from 8.93% in the first quarter of 2017. On April 27, 2017, the Company caused the mandatory conversion of the remaining shares of the Company's Series C preferred stock into 3.1 million shares of the Company's common stock.


•	Reduced the estimated FDIC indemnification liability by $4.9 million primarily as a result of an adjustment related to clawback provisions within certain loss-sharing agreements.

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

Edward J. Wehmer, President and Chief Executive Officer, commented, “Wintrust reported record net income of $64.9 million for the second quarter of 2017 and net income of $123.3 million for the first six months of 2017. These results reflected the continued strength of the internal growth engine at Wintrust as we grew assets organically by over $1 billion while still controlling operating expenses with our net overhead ratio dropping to 1.44%. The second quarter of 2017 was also characterized by our strong deposit growth, increased net interest margin, improved credit quality metrics and strength in our mortgage banking business."

Mr. Wehmer continued, “We experienced strong loan growth among our various loan categories, including the commercial, commercial real-estate and premium finance receivables portfolios. Excluding covered loans and mortgage loans held-for-sale, we grew our loan portfolio by $812 million during the second quarter. The increased loan volume and continued improvement in net interest margin from recent interest rate increases during the period helped net interest income increase by $11.8 million. Our

loan pipelines remain consistently strong and we remain well positioned for expected rising rates in the future. Deposit growth was strong in the second quarter of 2017 as deposits increased $875 million and exceeded $22 billion as of the end of the second quarter. Total deposit growth included $503 million of growth from demand deposits, which now total $6.3 billion and comprise 28% of our overall deposit base."

Commenting on credit quality, Mr. Wehmer noted, “During the second quarter of 2017, the Company continued its practice of timely addressing and resolving non-performing credits. Excluding covered assets, total non-performing assets decreased $10.4 million during the second quarter of 2017 resulting in non-performing assets as a percentage of total assets dropping from 0.46% to 0.40% during the period. Non-performing loans as a percentage of total loans, excluding covered loans, decreased to 0.33% at the end of the second quarter of 2017 compared to 0.40% at the end of the first quarter of 2017. As a percentage of non-performing loans, the allowance for loan losses, excluding covered loans, increased to 188% during the second quarter of 2017. Net charge-offs remained at historically low levels with net charge-offs as a percentage of total average loans, excluding covered loans, of 0.10% during the second quarter of 2017. We believe that the Company's reserves remain appropriate."

Mr. Wehmer further commented, “Mortgage banking revenue in the second quarter of 2017 totaled $35.9 million, an increase of $14.0 million compared to the first quarter of 2017. The mortgage banking business unit's contribution to increased net income during the second quarter primarily resulted from origination volumes growing to $1.1 billion from $722 million in the previous quarter as a result of higher purchase originations during the traditional spring purchase market. Purchases represented 84% of volume for the second quarter of 2017. Our mortgage pipeline remains strong. We continue to look for opportunities to further enhance the mortgage banking business both organically and through acquisitions."

Turning to the future, Mr. Wehmer stated, “Our growth engine continued into the second quarter of 2017 with strong momentum. Loan growth at the end of the second quarter should add to momentum into the third quarter as period-end loan balances, excluding covered loans and mortgage loans held-for-sale, exceeded the second quarter average balances by approximately $478 million. We continue to take a steady and measured approach to achieving our main objectives of growing franchise value, increasing profitability, leveraging our expense infrastructure and increasing shareholder value. 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 second quarter of 2017.

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



										% or⁽⁴⁾ basis point (bp)change from 1st Quarter 2017			% or basis point (bp) change from 2nd Quarter 2016
	Three Months Ended
(Dollars in thousands)	June 30, 2017			March 31, 2017			June 30, 2016
Net income	$	64,897		$	58,378		$	50,041		11		%	30		%
Net income per common share – diluted	$	1.11		$	1.00		$	0.90		11		%	23		%
Net revenue ⁽¹⁾	$	294,381		$	261,345		$	260,069		13		%	13		%
Net interest income	$	204,409		$	192,580		$	175,270		6		%	17		%
Net interest margin	3.41		%	3.36		%	3.24		%	5		bp	17		bp
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.43		%	3.39		%	3.27		%	4		bp	16		bp
Net overhead ratio ⁽³⁾	1.44		%	1.60		%	1.46		%	(16	)	bp	(2	)	bp
Return on average assets	1.00		%	0.94		%	0.85		%	6		bp	15		bp
Return on average common equity	9.55		%	8.93		%	8.43		%	62		bp	112		bp
Return on average tangible common equity (non-GAAP) ⁽²⁾	12.02		%	11.44		%	11.12		%	58		bp	90		bp
At end of period
Total assets	$	26,929,265		$	25,778,893		$	24,420,616		18		%	10		%
Total loans, excluding loans held-for-sale, excluding covered loans	20,743,332			19,931,058			18,174,655			16		%	14		%
Total loans, including loans held-for-sale, excluding covered loans	21,126,169			20,220,022			18,728,911			18		%	13		%
Total deposits	22,605,692			21,730,441			20,041,750			16		%	13		%
Total shareholders’ equity	2,839,458			2,764,983			2,623,595			11		%	8		%


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


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


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


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

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

WINTRUST FINANCIAL CORPORATION

Selected Financial Highlights



	Three Months Ended									Six Months Ended
(Dollars in thousands, except per share data)	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Selected Financial Condition Data (at end of period):
Total assets	$	26,929,265		$	25,778,893		$	24,420,616
Total loans, excluding loans held-for-sale and covered loans	20,743,332			19,931,058			18,174,655
Total deposits	22,605,692			21,730,441			20,041,750
Junior subordinated debentures	253,566			253,566			253,566
Total shareholders’ equity	2,839,458			2,764,983			2,623,595
Selected Statements of Income Data:
Net interest income	$	204,409		$	192,580		$	175,270		$	396,989		$	346,779
Net revenue ⁽¹⁾	294,381			261,345			260,069			555,726			500,330
Net income	64,897			58,378			50,041			123,275			99,152
Net income per common share – Basic	$	1.15		$	1.05		$	0.94		$	2.20		$	1.88
Net income per common share – Diluted	$	1.11		$	1.00		$	0.90		$	2.11		$	1.80
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin	3.41		%	3.36		%	3.24		%	3.38		%	3.26		%
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.43		%	3.39		%	3.27		%	3.41		%	3.29		%
Non-interest income to average assets	1.39		%	1.11		%	1.44		%	1.25		%	1.32		%
Non-interest expense to average assets	2.83		%	2.70		%	2.89		%	2.77		%	2.80		%
Net overhead ratio ⁽³⁾	1.44		%	1.60		%	1.46		%	1.52		%	1.48		%
Return on average assets	1.00		%	0.94		%	0.85		%	0.97		%	0.85		%
Return on average common equity	9.55		%	8.93		%	8.43		%	9.24		%	8.49		%
Return on average tangible common equity (non-GAAP) ⁽²⁾	12.02		%	11.44		%	11.12		%	11.74		%	11.22		%
Average total assets	$	26,050,949		$	25,207,348		$	23,754,755		$	25,632,004		$	23,328,834
Average total shareholders’ equity	2,800,905			2,739,050			2,465,732			2,771,768			2,427,751
Average loans to average deposits ratio (excluding loans held-for-sale, excluding covered loans)	94.1		%	92.5		%	92.4		%	93.3		%	92.3		%
Average loans to average deposits ratio (excluding loans held-for-sale, including covered loans)	94.4		%	92.7		%	92.9		%	93.6		%	93.0		%
Common Share Data at end of period:
Market price per common share	$	76.44		$	69.12		$	51.00
Book value per common share ⁽²⁾	$	48.73		$	47.88		$	45.96
Tangible common book value per share ⁽²⁾	$	39.40		$	37.97		$	36.12
Common shares outstanding	55,699,927			52,503,663			51,619,155
Other Data at end of period:⁽⁶⁾
Leverage Ratio ⁽⁴⁾	9.2		%	9.3		%	9.2		%
Tier 1 capital to risk-weighted assets ⁽⁴⁾	9.8		%	10.0		%	10.1		%
Common equity Tier 1 capital to risk-weighted assets ⁽⁴⁾	9.3		%	8.9		%	8.9		%
Total capital to risk-weighted assets ⁽⁴⁾	12.0		%	12.2		%	12.4		%
Allowance for credit losses ⁽⁵⁾	$	131,296		$	127,630		$	115,426
Non-performing loans	69,050			78,979			88,119
Allowance for credit losses to total loans ⁽⁵⁾	0.63		%	0.64		%	0.64		%
Non-performing loans to total loans	0.33		%	0.40		%	0.48		%
Number of:
Bank subsidiaries	15			15			15
Banking offices	153			155			153


(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)	June 30, 2017			December 31, 2016			June 30, 2016
Assets
Cash and due from banks	$	296,105		$	267,194		$	267,551
Federal funds sold and securities purchased under resale agreements	56			2,851			4,024
Interest bearing deposits with banks	1,011,635			980,457			693,269
Available-for-sale securities, at fair value	1,649,636			1,724,667			637,663
Held-to-maturity securities, at amortized cost	793,376			635,705			992,211
Trading account securities	1,987			1,989			3,613
Federal Home Loan Bank and Federal Reserve Bank stock	80,812			133,494			121,319
Brokerage customer receivables	23,281			25,181			26,866
Mortgage loans held-for-sale	382,837			418,374			554,256
Loans, net of unearned income, excluding covered loans	20,743,332			19,703,172			18,174,655
Covered loans	50,119			58,145			105,248
Total loans	20,793,451			19,761,317			18,279,903
Allowance for loan losses	(129,591		)	(122,291		)	(114,356		)
Allowance for covered loan losses	(1,074		)	(1,322		)	(2,412		)
Net loans	20,662,786			19,637,704			18,163,135
Premises and equipment, net	605,211			597,301			595,792
Lease investments, net	191,248			129,402			103,749
Accrued interest receivable and other assets	577,359			593,796			670,014
Trade date securities receivable	133,130			—			1,079,238
Goodwill	500,260			498,587			486,095
Other intangible assets	19,546			21,851			21,821
Total assets	$	26,929,265		$	25,668,553		$	24,420,616
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	6,294,052		$	5,927,377		$	5,367,672
Interest bearing	16,311,640			15,731,255			14,674,078
Total deposits	22,605,692			21,658,632			20,041,750
Federal Home Loan Bank advances	318,270			153,831			588,055
Other borrowings	277,710			262,486			252,611
Subordinated notes	139,029			138,971			138,915
Junior subordinated debentures	253,566			253,566			253,566
Trade date securities payable	5,151			—			40,000
Accrued interest payable and other liabilities	490,389			505,450			482,124
Total liabilities	24,089,807			22,972,936			21,797,021
Shareholders’ Equity:
Preferred stock	125,000			251,257			251,257
Common stock	55,802			51,978			51,708
Surplus	1,511,080			1,365,781			1,350,751
Treasury stock	(4,884		)	(4,589		)	(4,145		)
Retained earnings	1,198,997			1,096,518			1,008,464
Accumulated other comprehensive loss	(46,537		)	(65,328		)	(34,440		)
Total shareholders’ equity	2,839,458			2,695,617			2,623,595
Total liabilities and shareholders’ equity	$	26,929,265		$	25,668,553		$	24,420,616

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



	Three Months Ended									Six Months Ended
(In thousands, except per share data)	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Interest income
Interest and fees on loans	$	212,709		$	199,314		$	178,530		$	412,023		$	351,657
Interest bearing deposits with banks	1,634			1,623			793			3,257			1,539
Federal funds sold and securities purchased under resale agreements	1			1			1			2			2
Investment securities	15,524			13,573			16,398			29,097			33,588
Trading account securities	4			11			14			15			25
Federal Home Loan Bank and Federal Reserve Bank stock	1,153			1,070			1,112			2,223			2,049
Brokerage customer receivables	156			167			216			323			435
Total interest income	231,181			215,759			197,064			446,940			389,295
Interest expense
Interest on deposits	18,471			16,270			13,594			34,741			26,375
Interest on Federal Home Loan Bank advances	2,933			1,590			2,984			4,523			5,870
Interest on other borrowings	1,149			1,139			1,086			2,288			2,144
Interest on subordinated notes	1,786			1,772			1,777			3,558			3,554
Interest on junior subordinated debentures	2,433			2,408			2,353			4,841			4,573
Total interest expense	26,772			23,179			21,794			49,951			42,516
Net interest income	204,409			192,580			175,270			396,989			346,779
Provision for credit losses	8,891			5,209			9,129			14,100			17,163
Net interest income after provision for credit losses	195,518			187,371			166,141			382,889			329,616
Non-interest income
Wealth management	19,905			20,148			18,852			40,053			37,172
Mortgage banking	35,939			21,938			36,807			57,877			58,542
Service charges on deposit accounts	8,696			8,265			7,726			16,961			15,132
Gains (losses) on investment securities, net	47			(55		)	1,440			(8		)	2,765
Fees from covered call options	890			759			4,649			1,649			6,361
Trading losses, net	(420		)	(320		)	(316		)	(740		)	(484		)
Operating lease income, net	6,805			5,782			4,005			12,587			6,811
Other	18,110			12,248			11,636			30,358			27,252
Total non-interest income	89,972			68,765			84,799			158,737			153,551
Non-interest expense
Salaries and employee benefits	106,502			99,316			100,894			205,818			196,705
Equipment	9,909			9,002			9,307			18,911			18,074
Operating lease equipment depreciation	5,662			4,636			3,385			10,298			5,435
Occupancy, net	12,586			13,101			11,943			25,687			23,891
Data processing	7,804			7,925			7,138			15,729			13,657
Advertising and marketing	8,726			5,150			6,941			13,876			10,720
Professional fees	7,510			4,660			5,419			12,170			9,478
Amortization of other intangible assets	1,141			1,164			1,248			2,305			2,546
FDIC insurance	3,874			4,156			4,040			8,030			7,653
OREO expense, net	739			1,665			1,348			2,404			1,908
Other	19,091			17,343			19,306			36,434			34,632
Total non-interest expense	183,544			168,118			170,969			351,662			324,699
Income before taxes	101,946			88,018			79,971			189,964			158,468
Income tax expense	37,049			29,640			29,930			66,689			59,316
Net income	$	64,897		$	58,378		$	50,041		$	123,275		$	99,152
Preferred stock dividends	2,050			3,628			3,628			5,678			7,256
Net income applicable to common shares	$	62,847		$	54,750		$	46,413		$	117,597		$	91,896
Net income per common share - Basic	$	1.15		$	1.05		$	0.94		$	2.20		$	1.88
Net income per common share - Diluted	$	1.11		$	1.00		$	0.90		$	2.11		$	1.80
Cash dividends declared per common share	$	0.14		$	0.14		$	0.12		$	0.28		$	0.24
Weighted average common shares outstanding	54,775			52,267			49,140			53,528			48,794
Dilutive potential common shares	1,812			4,160			3,965			2,981			3,887
Average common shares and dilutive common shares	56,587			56,427			53,105			56,509			52,681

EARNINGS PER SHARE

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



		Three Months Ended						Six Months Ended
(In thousands, except per share data)		June 30, 2017		March 31, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Net income		$	64,897	$	58,378	$	50,041	$	123,275	$	99,152
Less: Preferred stock dividends		2,050		3,628		3,628		5,678		7,256
Net income applicable to common shares—Basic	(A)	62,847		54,750		46,413		117,597		91,896
Add: Dividends on convertible preferred stock, if dilutive		—		1,578		1,578		1,578		3,156
Net income applicable to common shares—Diluted	(B)	62,847		56,328		47,991		119,175		95,052
Weighted average common shares outstanding	(C)	54,775		52,267		49,140		53,528		48,794
Effect of dilutive potential common shares:
Common stock equivalents		927		1,060		856		994		778
Convertible preferred stock, if dilutive		885		3,100		3,109		1,987		3,109
Weighted average common shares and effect of dilutive potential common shares	(D)	56,587		56,427		53,105		56,509		52,681
Net income per common share:
Basic	(A/C)	$	1.15	$	1.05	$	0.94	$	2.20	$	1.88
Diluted	(B/D)	$	1.11	$	1.00	$	0.90	$	2.11	$	1.80

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

SUPPLEMENTAL FINANCIAL MEASURES/RATIOS

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

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

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



	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars and shares in thousands)	2017			2017			2016			2016			2016			2017			2016
Calculation of Net Interest Margin and Efficiency Ratio
(A) Interest Income (GAAP)	$	231,181		$	215,759		$	215,013		$	208,149		$	197,064		$	446,940		$	389,295
Taxable-equivalent adjustment:
- Loans	831			790			666			584			523			1,621			1,032
- Liquidity Management Assets	866			907			815			963			932			1,773			1,852
- Other Earning Assets	2			5			17			9			8			7			14
(B) Interest Income - FTE	$	232,880		$	217,461		$	216,511		$	209,705		$	198,527		$	450,341		$	392,193
(C) Interest Expense (GAAP)	26,772			23,179			24,235			23,513			21,794			49,951			42,516
(D) Net Interest Income - FTE (B minus C)	$	206,108		$	194,282		$	192,276		$	186,192		$	176,733		$	400,390		$	349,677
(E) Net Interest Income (GAAP) (A minus C)	$	204,409		$	192,580		$	190,778		$	184,636		$	175,270		$	396,989		$	346,779
Net interest margin (GAAP-derived)	3.41		%	3.36		%	3.21		%	3.21		%	3.24		%	3.38		%	3.26		%
Net interest margin - FTE	3.43		%	3.39		%	3.23		%	3.24		%	3.27		%	3.41		%	3.29		%
(F) Non-interest income	$	89,972		$	68,765		$	85,275		$	86,604		$	84,799		$	158,737		$	153,551
(G) Gains (losses) on investment securities, net	47			(55		)	1,575			3,305			1,440			(8		)	2,765
(H) Non-interest expense	183,544			168,118			180,371			176,615			170,969			351,662			324,699
Efficiency ratio (H/(E+F-G))	62.36		%	64.31		%	65.71		%	65.92		%	66.11		%	63.28		%	65.26		%
Efficiency ratio - FTE (H/(D+F-G))	62.00		%	63.90		%	65.36		%	65.54		%	65.73		%	62.89		%	64.88		%
Calculation of Tangible Common Equity ratio (at period end)
Total shareholders’ equity	$	2,839,458		$	2,764,983		$	2,695,617		$	2,674,474		$	2,623,595
(I) Less: Convertible preferred stock	—			(126,257		)	(126,257		)	(126,257		)	(126,257		)
Less: Non-convertible preferred stock	(125,000		)	(125,000		)	(125,000		)	(125,000		)	(125,000		)
Less: Intangible assets	(519,806		)	(520,028		)	(520,438		)	(506,674		)	(507,916		)
(J) Total tangible common shareholders’ equity	$	2,194,652		$	1,993,698		$	1,923,922		$	1,916,543		$	1,864,422
Total assets	$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759		$	24,420,616
Less: Intangible assets	(519,806		)	(520,028		)	(520,438		)	(506,674		)	(507,916		)
(K) Total tangible assets	$	26,409,459		$	25,258,865		$	25,148,115		$	24,815,085		$	23,912,700
Tangible common equity ratio (J/K)	8.3		%	7.9		%	7.7		%	7.7		%	7.8		%
Tangible common equity ratio, assuming full conversion of convertible preferred stock ((J-I)/K)	8.3		%	8.4		%	8.2		%	8.2		%	8.3		%
Calculation of book value per share
Total shareholders’ equity	$	2,839,458		$	2,764,983		$	2,695,617		$	2,674,474		$	2,623,595
Less: Preferred stock	(125,000		)	(251,257		)	(251,257		)	(251,257		)	(251,257		)
(L) Total common equity	$	2,714,458		$	2,513,726		$	2,444,360		$	2,423,217		$	2,372,338
(M) Actual common shares outstanding	55,700			52,504			51,881			51,715			51,619
Book value per common share (L/M)	$	48.73		$	47.88		$	47.12		$	46.86		$	45.96
Tangible common book value per share (J/M)	$	39.40		$	37.97		$	37.08		$	37.06		$	36.12



Calculation of return on average common equity
(N) Net income applicable to common shares	62,847		54,750		50,979		49,487		46,413		117,597		91,896
Add: After-tax intangible asset amortization	726		771		716		677		781		1,497		1,593
(O) Tangible net income applicable to common shares	63,573		55,521		51,695		50,164		47,194		119,094		93,489
Total average shareholders' equity	2,800,905		2,739,050		2,689,876		2,651,684		2,465,732		2,771,768		2,427,751
Less: Average preferred stock	(161,028	)	(251,257	)	(251,257	)	(251,257	)	(251,257	)	(205,893	)	(251,259	)
(P) Total average common shareholders' equity	2,639,877		2,487,793		2,438,619		2,400,427		2,214,475		2,565,875		2,176,492
Less: Average intangible assets	(519,340	)	(520,346	)	(513,017	)	(508,812	)	(507,439	)	(519,840	)	(501,516	)
(Q) Total average tangible common shareholders’ equity	2,120,537		1,967,447		1,925,602		1,891,615		1,707,036		2,046,035		1,674,976
Return on average common equity, annualized (N/P)	9.55	%	8.93	%	8.32	%	8.20	%	8.43	%	9.24	%	8.49	%
Return on average tangible common equity, annualized (O/Q)	12.02	%	11.44	%	10.68	%	10.55	%	11.12	%	11.74	%	11.22	%

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking franchise, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the second quarter of 2017, profitability within this franchise was primarily driven by increased net interest income due to a higher net interest margin and higher revenue from the mortgage banking business. The net interest margin increased in the second quarter of 2017 compared to the first quarter of 2017 primarily as a result of higher yields on the commercial (excluding lease loans) and commercial real-estate loan portfolios as well as liquidity management assets, partially offset by higher rates on interest-bearing deposits. Mortgage banking revenue increased by $14.0 million from $21.9 million for the first quarter of 2017 to $35.9 million for the second quarter of 2017. The higher revenue was due to originations during the current period increasing to $1.1 billion from $722.5 million in the first quarter of 2017 as a result of higher purchase originations during the traditional spring purchase market. Purchases represented 84% of volume for the second quarter of 2017. The Company's gross commercial and commercial real estate loan pipelines remain strong. Before the impact of scheduled payments and prepayments, at June 30, 2017, gross commercial and commercial real estate loan pipelines totaled $1.2 billion, or $796.8 million when adjusted for the probability of closing, compared to $1.5 billion, or $934 million when adjusted for the probability of closing, at March 31, 2017.

Specialty Finance

Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, accounts receivable financing, value-added, out-sourced administrative services, and other specialty finance businesses. In the second quarter of 2017, the specialty finance unit experienced higher revenue as a result of increased volumes and higher yields within its insurance premium financing receivables portfolio. Originations of $1.9 billion during the second quarter of 2017 resulted in a $214.7 million increase in average balances. The increase in average balances along with higher yields on these loans resulted in a $4.2 million increase in interest income attributed to this portfolio. The Company's leasing business continued to grow during the second quarter of 2017 , increasing its portfolio of assets, including capital leases, loans and equipment on operating leases, by $129.5 million since the end of the first quarter of 2017. Revenues from the Company's out-sourced administrative services business remained steady, totaling approximately $1.0 million in the second quarter of 2017 and first quarter of 2017.

Wealth Management

Through its wealth management unit, the Company offers a full range of wealth management services through three separate subsidiaries: trust and investment services, asset management, securities brokerage services and 401(k) and retirement plan services. At June 30, 2017, the Company’s wealth management subsidiaries had approximately $23.3 billion of assets under administration, which includes $2.6 billion of assets owned by the Company and its subsidiary banks, representing a $364.2 million increase from the $22.9 billion of assets under administration at March 31, 2017.

LOANS

Loan Portfolio Mix and Growth Rates



										% Growth
(Dollars in thousands)	June 30, 2017			December 31, 2016			June 30, 2016			From ⁽¹⁾December 31, 2016		From June 30, 2016
Balance:
Commercial	$	6,406,289		$	6,005,422		$	5,144,533		13	%	25	%
Commercial real estate	6,402,494			6,196,087			5,848,334			7		9
Home equity	689,483			725,793			760,904			(10	)	(9	)
Residential real estate	762,810			705,221			653,664			16		17
Premium finance receivables - commercial	2,648,386			2,478,581			2,478,280			14		7
Premium finance receivables - life insurance	3,719,043			3,470,027			3,161,562			14		18
Consumer and other	114,827			122,041			127,378			(12	)	(10	)
Total loans, net of unearned income, excluding covered loans	$	20,743,332		$	19,703,172		$	18,174,655		11	%	14	%
Covered loans	50,119			58,145			105,248			(28	)	(52	)
Total loans, net of unearned income	$	20,793,451		$	19,761,317		$	18,279,903		11	%	14	%
Mix:
Commercial	31		%	30		%	28		%
Commercial real estate	31			31			31
Home equity	3			4			4
Residential real estate	3			4			4
Premium finance receivables - commercial	13			12			14
Premium finance receivables - life insurance	18			18			17
Consumer and other	1			1			1
Total loans, net of unearned income, excluding covered loans	100		%	100		%	99		%
Covered loans	—			—			1
Total loans, net of unearned income	100		%	100		%	100		%


(1)	Annualized

Commercial and Commercial Real Estate Loan Portfolios



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

(Dollars in thousands)	Balance
Commercial:
Commercial, industrial and other	$	4,094,532	32.0	%	$	8,720	$	—	$	35,542
Franchise	838,394		6.5		—		—		5,305
Mortgage warehouse lines of credit	234,643		1.8		—		—		1,719
Asset-based lending	871,906		6.8		936		—		8,004
Leases	356,604		2.8		535		—		1,150
PCI - commercial loans ⁽¹⁾	10,210		0.1		—		1,572		638
Total commercial	$	6,406,289	50.0	%	$	10,191	$	1,572	$	52,358
Commercial Real Estate:
Construction	$	709,587	5.5	%	$	2,408	$	—	$	9,187
Land	112,153		0.9		202		—		3,596
Office	887,684		6.9		4,806		—		5,740
Industrial	792,791		6.2		2,193		—		5,201
Retail	920,494		7.2		1,635		—		5,971
Multi-family	814,598		6.4		354		—		8,226
Mixed use and other	2,018,950		15.8		5,382		—		14,299
PCI - commercial real estate ⁽¹⁾	146,237		1.1		—		8,768		119
Total commercial real estate	$	6,402,494	50.0	%	$	16,980	$	8,768	$	52,339
Total commercial and commercial real estate	$	12,808,783	100.0	%	$	27,171	$	10,340	$	104,697

Commercial real estate - collateral location by state:
Illinois	$	4,988,746	77.9	%
Wisconsin	689,007		10.8
Total primary markets	$	5,677,753	88.7	%
Indiana	142,137		2.2
Florida	105,897		1.7
Arizona	57,219		0.9
Ohio	46,652		0.7
Michigan	45,541		0.7
California	38,626		0.6
Other (no individual state greater than 0.6%)	288,669		4.5
Total	$	6,402,494	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)	June 30, 2017			December 31, 2016			June 30, 2016			From ⁽¹⁾December 31, 2016		From June 30, 2016
Balance:
Non-interest bearing	$	6,294,052		$	5,927,377		$	5,367,672		12	%	17	%
NOW and interest bearing demand deposits	2,459,238			2,624,442			2,450,710			(13	)	—
Wealth management deposits ⁽²⁾	2,464,162			2,209,617			1,904,121			23		29
Money market	4,449,385			4,441,811			4,384,134			—		1
Savings	2,419,463			2,180,482			1,851,863			22		31
Time certificates of deposit	4,519,392			4,274,903			4,083,250			12		11
Total deposits	$	22,605,692		$	21,658,632		$	20,041,750		9	%	13	%
Mix:
Non-interest bearing	28		%	27		%	27		%
NOW and interest bearing demand deposits	11			12			12
Wealth management deposits ⁽²⁾	11			10			10
Money market	19			21			22
Savings	11			10			9
Time certificates of deposit	20			20			20
Total deposits	100		%	100		%	100		%


(1)	Annualized


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

Time Certificates of Deposit

Maturity/Re-pricing Analysis

As of June 30, 2017



(Dollars in thousands)	CDARs & Brokered Certificates of Deposit ⁽¹⁾		MaxSafe Certificates of Deposit ⁽¹⁾		Variable Rate Certificates of Deposit ⁽²⁾		Other Fixed Rate Certificates of Deposit ⁽¹⁾		Total Time Certificates of Deposit		Weighted-Average Rate of Maturing Time Certificates of Deposit ⁽³⁾
1-3 months	$	537	$	37,577	$	128,018	$	637,354	$	803,486	0.67	%
4-6 months	1,252		30,757		—		792,236		824,245		0.91	%
7-9 months	1,494		25,237		—		826,270		853,001		0.99	%
10-12 months	59,732		15,749		—		714,749		790,230		1.04	%
13-18 months	—		17,213		—		737,219		754,432		1.17	%
19-24 months	249		10,922		—		179,144		190,315		1.25	%
24+ months	1,000		17,467		—		285,216		303,683		1.45	%
Total	$	64,264	$	154,922	$	128,018	$	4,172,188	$	4,519,392	1.00	%


(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 second quarter of 2017 compared to the first quarter of 2017 (sequential quarters) and second quarter of 2016 (linked quarters), respectively:



	Average Balance for three months ended,									Interest for three months ended,									Yield/Rate for three months ended,
(Dollars in thousands)	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017		March 31, 2017		June 30, 2016
Interest-bearing deposits with banks and cash equivalents⁽¹⁾	$	722,349		$	780,752		$	639,753		$	1,635		$	1,624		$	794		0.91	%	0.84	%	0.50	%
Investment securities	2,572,619			2,395,625			2,656,654			16,390			14,480			17,330			2.55		2.45		2.62
FHLB and FRB stock	99,438			94,090			116,706			1,153			1,070			1,112			4.66		4.61		3.83
Liquidity management assets⁽²⁾⁽⁷⁾	$	3,394,406		$	3,270,467		$	3,413,113		$	19,178		$	17,174		$	19,236		2.27	%	2.13	%	2.27	%
Other earning assets^(2)(3)(7)	25,749			25,236			29,759			162			183			238			2.53		2.95		3.21
Loans, net of unearned income^(2)(4)(7)	20,599,718			19,923,606			18,204,552			212,892			199,186			177,571			4.15		4.05		3.92
Covered loans	51,823			56,872			109,533			648			918			1,482			5.01		6.55		5.44
Total earning assets⁽⁷⁾	$	24,071,696		$	23,276,181		$	21,756,957		$	232,880		$	217,461		$	198,527		3.88	%	3.79	%	3.67	%
Allowance for loan and covered loan losses	(132,053		)	(127,425		)	(116,984		)
Cash and due from banks	242,495			229,588			272,935
Other assets	1,868,811			1,829,004			1,841,847
Total assets	$	26,050,949		$	25,207,348		$	23,754,755

Interest-bearing deposits	$	15,621,674		$	15,466,670		$	14,065,995		$	18,471		$	16,270		$	13,594		0.47	%	0.43	%	0.39	%
Federal Home Loan Bank advances	689,600			181,338			946,081			2,933			1,590			2,984			1.71		3.55		1.27
Other borrowings	240,547			255,012			248,233			1,149			1,139			1,086			1.92		1.81		1.76
Subordinated notes	139,007			138,980			138,898			1,786			1,772			1,777			5.14		5.10		5.12
Junior subordinated debentures	253,566			253,566			253,566			2,433			2,408			2,353			3.80		3.80		3.67
Total interest-bearing liabilities	$	16,944,394		$	16,295,566		$	15,652,773		$	26,772		$	23,179		$	21,794		0.63	%	0.58	%	0.56	%
Non-interest bearing deposits	5,904,679			5,787,034			5,223,384
Other liabilities	400,971			385,698			412,866
Equity	2,800,905			2,739,050			2,465,732
Total liabilities and shareholders’ equity	$	26,050,949		$	25,207,348		$	23,754,755
Interest rate spread⁽⁵⁾⁽⁷⁾																			3.25	%	3.21	%	3.11	%
Less: Fully tax-equivalent adjustment										(1,699		)	(1,702		)	(1,463		)	(0.02	)	(0.03	)	(0.03	)
Net free funds/contribution⁽⁶⁾	$	7,127,302		$	6,980,615		$	6,104,184											0.18		0.18		0.16
Net interest income/ margin⁽⁷⁾(GAAP)										$	204,409		$	192,580		$	175,270		3.41	%	3.36	%	3.24	%
Fully tax-equivalent adjustment										1,699			1,702			1,463			0.02		0.03		0.03
Net interest income/ margin - FTE ⁽⁷⁾										$	206,108		$	194,282		$	176,733		3.43	%	3.39	%	3.27	%


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


(2)	Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the three months ended June 30, 2017, March 31, 2017 and June 30, 2016 were $1.7 million, $1.7 million and $1.5 million, respectively.


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


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


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


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


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

For the second quarter of 2017, net interest income totaled $204.4 million, an increase of $11.8 million as compared to the first quarter of 2017 and an increase of $29.1 million as compared to the second quarter of 2016. Net interest margin was 3.41% (3.43% on a fully tax-equivalent basis) during the second quarter of 2017 compared to 3.36% (3.39% on a fully tax-equivalent basis) during the first quarter of 2017 and 3.24% (3.27% on a fully tax-equivalent basis) during the second quarter of 2016.

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



	Average Balance for six months ended,						Interest for six months ended,						Yield/Rate for six months ended,
(Dollars in thousands)	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			June 30, 2017		June 30, 2016
Interest-bearing deposits with banks and cash equivalents ⁽¹⁾	$	751,389		$	605,724		$	3,259		$	1,541		0.87	%	0.51	%
Investment securities	2,484,611			2,638,911			30,870			35,440			2.51		2.70
FHLB and FRB stock	96,779			111,990			2,223			2,049			4.64		3.68
Liquidity management assets⁽²⁾⁽⁷⁾	$	3,332,779		$	3,356,625		$	36,352		$	39,030		2.20	%	2.34	%
Other earning assets^(2)(3)(7)	25,494			29,246			345			474			2.73		3.26
Loans, net of unearned income^(2)(4)(7)	20,263,842			17,856,572			412,078			349,196			4.10		3.93
Covered loans	54,505			125,442			1,566			3,493			5.79		5.60
Total earning assets⁽⁷⁾	$	23,676,620		$	21,367,885		$	450,341		$	392,193		3.84	%	3.69	%
Allowance for loan and covered loan losses	(129,751		)	(114,506		)
Cash and due from banks	236,077			266,139
Other assets	1,849,058			1,809,316
Total assets	$	25,632,004		$	23,328,834

Interest-bearing deposits	$	15,544,603		$	13,891,664		$	34,741		$	26,375		0.45	%	0.38	%
Federal Home Loan Bank advances	436,873			885,592			4,523			5,870			2.09		1.33
Other borrowings	247,740			252,809			2,288			2,144			1.86		1.71
Subordinated notes	138,994			138,884			3,558			3,554			5.12		5.12
Junior subordinated debentures	253,566			255,626			4,841			4,573			3.80		3.54
Total interest-bearing liabilities	$	16,621,776		$	15,424,575		$	49,951		$	42,516		0.60	%	0.55	%
Non-interest bearing deposits	5,845,083			5,081,565
Other liabilities	393,377			394,943
Equity	2,771,768			2,427,751
Total liabilities and shareholders’ equity	$	25,632,004		$	23,328,834
Interest rate spread⁽⁵⁾⁽⁷⁾													3.24	%	3.14	%
Less: Fully tax-equivalent adjustment							(3,401		)	(2,898		)	(0.03	)	(0.03	)
Net free funds/contribution⁽⁶⁾	$	7,054,844		$	5,943,310								0.17		0.15
Net interest income/ margin⁽⁷⁾(GAAP)							$	396,989		$	346,779		3.38	%	3.26	%
Fully tax-equivalent adjustment							3,401			2,898			0.03		0.03
Net interest income/ margin - FTE ⁽⁷⁾							$	400,390		$	349,677		3.41	%	3.29	%


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


(2)	Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for six months ended June 30, 2017 and 2016 were $3.4 million and $2.9 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 six months of 2017 net interest income totaled $397.0 million, an increase of $50.2 million as compared to the first six months of 2016. Net interest margin was 3.38% (3.41% on a fully tax-equivalent basis) for the first six months of 2017 compared to 3.26% (3.29% on a fully tax-equivalent basis) for the first six months of 2016.

Interest Rate Sensitivity

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

The following interest rate scenarios display the percentage change in net interest income over a one-year time horizon assuming increases of 100 and 200 basis points and a decrease of 100 basis points. The Static Shock Scenario results incorporate actual cash flows and repricing characteristics for balance sheet instruments following an instantaneous, parallel change in market rates based upon a static (i.e. no growth or constant) balance sheet. Conversely, the Ramp Scenario results incorporate management’s projections of future volume and pricing of each of the product lines following a gradual, parallel change in market rates over twelve months. Actual results may differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies. The interest rate sensitivity for both the Static Shock and Ramp Scenario at June 30, 2017, March 31, 2017 and June 30, 2016 is as follows:




Static Shock Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
June 30, 2017	19.3	%	10.4	%	(13.5	)%
March 31, 2017	17.7	%	9.3	%	(13.2	)%
June 30, 2016	16.9	%	8.9	%	(8.9	)%



Ramp Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
June 30, 2017	7.8	%	4.0	%	(4.6	)%
March 31, 2017	7.3	%	3.9	%	(4.8	)%
June 30, 2016	7.0	%	3.5	%	(3.7	)%

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

Maturities and Sensitivities of Loans to Changes in Interest Rates

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



As of June 30, 2017	One year or less		From one to five years		Over five years
(Dollars in thousands)	One year or less		From one to five years		Over five years		Total
Commercial
Fixed rate	$	155,364	$	703,707	$	470,295	$	1,329,366
Variable rate	5,067,733		7,288		1,902		5,076,923
Total commercial	$	5,223,097	$	710,995	$	472,197	$	6,406,289
Commercial real estate
Fixed rate	404,454		1,735,009		252,118		2,391,581
Variable rate	3,978,265		31,068		1,580		4,010,913
Total commercial real estate	$	4,382,719	$	1,766,077	$	253,698	$	6,402,494
Home Equity
Fixed rate	5,962		4,657		63,208		73,827
Variable rate	611,581		4,075		—		615,656
Total home equity	$	617,543	$	8,732	$	63,208	$	689,483
Residential real estate
Fixed rate	40,593		38,946		145,978		225,517
Variable rate	54,493		180,457		302,343		537,293
Total residential real estate	$	95,086	$	219,403	$	448,321	$	762,810
Premium finance receivables - commercial
Fixed rate	2,560,924		87,462		—		2,648,386
Variable rate	—		—		—		—
Total premium finance receivables - commercial	$	2,560,924	$	87,462	$	—	$	2,648,386
Premium finance receivables - life insurance
Fixed rate	17,174		34,370		1,370		52,914
Variable rate	3,666,129		—		—		3,666,129
Total premium finance receivables - life insurance	$	3,683,303	$	34,370	$	1,370	$	3,719,043
Consumer and other
Fixed rate	54,315		13,124		3,536		70,975
Variable rate	43,852		—		—		43,852
Total consumer and other	$	98,167	$	13,124	$	3,536	$	114,827
Total per category
Fixed rate	3,238,786		2,617,275		936,505		6,792,566
Variable rate	13,422,053		222,888		305,825		13,950,766
Total loans, net of unearned income, excluding covered loans	$	16,660,839	$	2,840,163	$	1,242,330	$	20,743,332
Variable Rate Loan Pricing by Index:
Prime	$	2,957,739
One- month LIBOR	6,514,657
Three- month LIBOR	500,408
Twelve- month LIBOR	3,525,934
Other	452,028
Total variable rate	$	13,950,766

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to LIBOR indices which, as shown in the table above, do not simulate the same increases as the prime rate or the federal funds rate when the Federal Reserve raises interest rates. Specifically, the Company has $6.5 billion of variable rate loans tied to one-month LIBOR and $3.5 billion of variable rate loans tied to twelve-month LIBOR. The above chart shows that the Federal Reserve raised interest rates by 25 bps in the fourth quarter of 2016, and the first and second quarters of 2017, and during those periods one-month LIBOR increased by 24 bps, 21 bps and 24 bps respectively, while twelve-month LIBOR increased by 14 bps and 11 bps and then decreased by 6 bps in the most recent period. As a result of longer term rates remaining relatively flat in recent months, the Company’s repricing benefit on variable rates loans tied to twelve-month LIBOR has been limited.

NON-INTEREST INCOME

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



	Three Months Ended
	June 30,			March 31,			June 30,			Q2 2017 compared to Q1 2017					Q2 2017 compared to Q2 2016
(Dollars in thousands)	2017			2017			2016			$ Change			% Change		$ Change			% Change
Brokerage	$	5,449		$	6,220		$	6,302		$	(771	)	(12	)%	$	(853	)	(14	)%
Trust and asset management	14,456			13,928			12,550			528			4		1,906			15
Total wealth management	19,905			20,148			18,852			(243		)	(1	)	1,053			6
Mortgage banking	35,939			21,938			36,807			14,001			64		(868		)	(2	)
Service charges on deposit accounts	8,696			8,265			7,726			431			5		970			13
Gains (losses) on investment securities, net	47			(55		)	1,440			102			NM		(1,393		)	(97	)
Fees from covered call options	890			759			4,649			131			17		(3,759		)	(81	)
Trading losses, net	(420		)	(320		)	(316		)	(100		)	(31	)	(104		)	33
Operating lease income, net	6,805			5,782			4,005			1,023			18		2,800			70
Other:
Interest rate swap fees	2,221			1,433			1,835			788			55		386			21
BOLI	888			985			1,257			(97		)	(10	)	(369		)	(29	)
Administrative services	986			1,024			1,074			(38		)	(4	)	(88		)	(8	)
Early pay-offs of leases	10			1,211			—			(1,201		)	(99	)	10			NM
Miscellaneous	14,005			7,595			7,470			6,410			84		6,535			87
Total Other	18,110			12,248			11,636			5,862			48		6,474			56
Total Non-Interest Income	$	89,972		$	68,765		$	84,799		$	21,207		31	%	$	5,173		6	%

NM - Not Meaningful



	Six Months Ended
	June 30,			June 30,			$			%
(Dollars in thousands)	2017			2016			Change			Change
Brokerage	$	11,669		$	12,359		$	(690	)	(6	)%
Trust and asset management	28,384			24,813			3,571			14
Total wealth management	40,053			37,172			2,881			8
Mortgage banking	57,877			58,542			(665		)	(1	)
Service charges on deposit accounts	16,961			15,132			1,829			12
(Losses) gains on investment securities, net	(8		)	2,765			(2,773		)	NM
Fees from covered call options	1,649			6,361			(4,712		)	(74	)
Trading losses, net	(740		)	(484		)	(256		)	53
Operating lease income, net	12,587			6,811			5,776			85
Other:
Interest rate swap fees	3,654			6,273			(2,619		)	(42	)
BOLI	1,873			1,729			144			8
Administrative services	2,010			2,143			(133		)	(6	)
Gain on extinguishment of debt	—			4,305			(4,305		)	NM
Early pay-offs of leases	1,221			—			1,221			NM
Miscellaneous	21,600			12,802			8,798			69
Total Other	30,358			27,252			3,106			11
Total Non-Interest Income	$	158,737		$	153,551		$	5,186		3	%

NM - Not Meaningful

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

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

The increase in mortgage banking revenue in the current quarter as compared to the first quarter of 2017 resulted primarily from higher origination volumes in the current quarter. Mortgage loans originated or purchased for sale increased during the current quarter, totaling $1.1 billion in the second quarter of 2017 as compared to $722.5 million in the first quarter of 2017 and $1.2 billion in the second quarter of 2016. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. Mortgage revenue is also impacted by changes in the fair value of mortgage servicing rights ("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									Six Months Ended
(Dollars in thousands)	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Retail originations	$	963,396		624,971			$	1,135,082		$	1,588,367		$	1,840,072
Correspondent originations	170,862			97,496			77,160			268,358			108,818
Total originations (A)	$	1,134,258		722,467			$	1,212,242		$	1,856,725		$	1,948,890

Purchases as a percentage of originations	84		%	66		%	65		%	77		%	62		%
Refinances as a percentage of originations	16			34			35			23			38
Total	100		%	100		%	100		%	100		%	100		%

Production revenue (B) ⁽¹⁾	$	28,140		$	17,677		$	32,221		$	45,817		$	52,151
Production margin (B / A)	2.48		%	2.45		%	2.66		%	2.47		%	2.68		%

Loans serviced for others (C)	$	2,303,435		$	1,972,592		$	1,250,062
MSRs, at fair value (D)	27,307			21,596			13,382
Percentage of mortgage servicing rights to loans serviced for others (D / C)	1.19		%	1.09		%	1.07		%


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

The Company has typically written call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. Management has entered into these transactions with the goal of economically hedging security positions and enhancing its overall return on its investment portfolio by using fees generated from these options to compensate for net interest margin compression. These option transactions are designed to mitigate overall interest rate risk and do not qualify as hedges pursuant to accounting guidance. Fees from covered call options decreased in the current quarter compared to the 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 June 30, 2017, March 31, 2017 or June 30, 2016.

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 during the second quarter of 2017.

The increase in other non-interest income in the current quarter as compared to the first quarter of 2017 is primarily due to a reduction in the estimated FDIC indemnification liability of $4.9 million and higher interest rate swap fees, partially offset by lower gains on early pay-offs of leases.

NON-INTEREST EXPENSE

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



	Three Months Ended
	June 30,		March 31,		June 30,		Q2 2017 compared to Q1 2017					Q2 2017 compared to Q2 2016
(Dollars in thousands)	2017		2017		2016		$ Change			% Change		$ Change			% Change
Salaries and employee benefits:
Salaries	$	55,215	$	55,008	$	52,924	$	207		—	%	$	2,291		4	%
Commissions and incentive compensation	34,050		26,643		32,531		7,407			28		1,519			5
Benefits	17,237		17,665		15,439		(428		)	(2	)	1,798			12
Total salaries and employee benefits	106,502		99,316		100,894		7,186			7		5,608			6
Equipment	9,909		9,002		9,307		907			10		602			6
Operating lease equipment depreciation	5,662		4,636		3,385		1,026			22		2,277			67
Occupancy, net	12,586		13,101		11,943		(515		)	(4	)	643			5
Data processing	7,804		7,925		7,138		(121		)	(2	)	666			9
Advertising and marketing	8,726		5,150		6,941		3,576			69		1,785			26
Professional fees	7,510		4,660		5,419		2,850			61		2,091			39
Amortization of other intangible assets	1,141		1,164		1,248		(23		)	(2	)	(107		)	(9	)
FDIC insurance	3,874		4,156		4,040		(282		)	(7	)	(166		)	(4	)
OREO expense, net	739		1,665		1,348		(926		)	(56	)	(609		)	(45	)
Other:
Commissions - 3rd party brokers	1,033		1,098		1,324		(65		)	(6	)	(291		)	(22	)
Postage	2,080		1,442		2,038		638			44		42			2
Miscellaneous	15,978		14,803		15,944		1,175			8		34			—
Total other	19,091		17,343		19,306		1,748			10		(215		)	(1	)
Total Non-Interest Expense	$	183,544	$	168,118	$	170,969	$	15,426		9	%	$	12,575		7	%

NM - Not Meaningful



	Six Months Ended
	June 30,		June 30,		$			%
(Dollars in thousands)	2017		2016		Change			Change
Salaries and employee benefits:
Salaries	$	110,223	$	103,206	$	7,017		7	%
Commissions and incentive compensation	60,693		58,906		1,787			3
Benefits	34,902		34,593		309			1
Total salaries and employee benefits	205,818		196,705		9,113			5
Equipment	18,911		18,074		837			5
Operating lease equipment depreciation	10,298		5,435		4,863			89
Occupancy, net	25,687		23,891		1,796			8
Data processing	15,729		13,657		2,072			15
Advertising and marketing	13,876		10,720		3,156			29
Professional fees	12,170		9,478		2,692			28
Amortization of other intangible assets	2,305		2,546		(241		)	(9	)
FDIC insurance	8,030		7,653		377			5
OREO expense, net	2,404		1,908		496			26
Other:
Commissions - 3rd party brokers	2,131		2,634		(503		)	(19	)
Postage	3,522		3,340		182			5
Miscellaneous	30,781		28,658		2,123			7
Total other	36,434		34,632		1,802			5
Total Non-Interest Expense	$	351,662	$	324,699	$	26,963		8	%

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 first quarter of 2017 primarily as a result of higher incentive compensation on variable pay based arrangements (including mortgage banking commissions), partially offset by lower benefits.

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

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

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

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

INCOME TAXES

The Company recorded income tax expense of $37.0 million in the second quarter of 2017 compared to $29.6 million in the first quarter of 2017 and $29.9 million in the second quarter of 2016. The effective tax rates were 36.34% in second quarter of 2017, 33.67% in the first quarter of 2017 and 37.43% in the second quarter of 2016. The lower effective tax rate in the first quarter of 2017 was primarily a result of recording $3.4 million of excess tax benefits related to the adoption of new accounting rules over income taxes attributed to share-based compensation that became effective on January 1, 2017. These excess tax benefits are expected to be higher in the first quarter when the majority of the Company's share-based awards vest, and will fluctuate throughout the year based on the Company's stock price and timing of employee stock option exercises and vesting of other share-based awards.

ASSET QUALITY

Allowance for Credit Losses, excluding covered loans



	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2017			2016
Allowance for loan losses at beginning of period	$	125,819		$	122,291		$	110,171		$	122,291		$	105,400
Provision for credit losses	8,952			5,316			9,269			14,268			17,692
Other adjustments	(30		)	(56		)	(134		)	(86		)	(212		)
Reclassification (to) from allowance for unfunded lending-related commitments	106			(138		)	(40		)	(32		)	(121		)
Charge-offs:
Commercial	913			641			721			1,554			1,392
Commercial real estate	1,985			261			502			2,246			1,173
Home equity	1,631			625			2,046			2,256			3,098
Residential real estate	146			329			693			475			1,186
Premium finance receivables - commercial	1,878			1,427			1,911			3,305			4,391
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	175			134			224			309			331
Total charge-offs	6,728			3,417			6,097			10,145			11,571
Recoveries:
Commercial	561			273			121			834			750
Commercial real estate	276			554			296			830			665
Home equity	144			65			71			209			119
Residential real estate	54			178			31			232			143
Premium finance receivables - commercial	404			612			633			1,016			1,420
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	33			141			35			174			71
Total recoveries	1,472			1,823			1,187			3,295			3,168
Net charge-offs	(5,256		)	(1,594		)	(4,910		)	(6,850		)	(8,403		)
Allowance for loan losses at period end	$	129,591		$	125,819		$	114,356		$	129,591		$	114,356
Allowance for unfunded lending-related commitments at period end	1,705			1,811			1,070			1,705			1,070
Allowance for credit losses at period end	$	131,296		$	127,630		$	115,426		$	131,296		$	115,426
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial	0.02		%	0.03		%	0.05		%	0.02		%	0.03		%
Commercial real estate	0.11			(0.02		)	0.01			0.05			0.02
Home equity	0.85			0.32			1.03			0.58			0.77
Residential real estate	0.03			0.06			0.26			0.05			0.22
Premium finance receivables - commercial	0.23			0.13			0.21			0.19			0.25
Premium finance receivables - life insurance	0.00			0.00			0.00			0.00			0.00
Consumer and other	0.45			(0.02		)	0.57			0.22			0.38
Total loans, net of unearned income, excluding covered loans	0.10		%	0.03		%	0.11		%	0.07		%	0.09		%
Net charge-offs as a percentage of the provision for credit losses	58.71		%	29.98		%	52.97		%	48.01		%	47.50		%
Loans at period-end, excluding covered loans	$	20,743,332		$	19,931,058		$	18,174,655
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	0.63		%	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 second quarter of 2017 totaled ten basis points on an annualized basis compared to three basis points on an annualized basis in the first quarter of 2017 and eleven basis points on an annualized basis in the second quarter of 2016. Net charge-offs totaled $5.3 million in the second quarter of 2017, a $3.7 million increase from $1.6 million in the first quarter of 2017 and a $346,000 increase from $4.9 million in the second quarter of 2016. The provision for credit losses, excluding the provision for covered loan losses, totaled $9.0 million for the second quarter of 2017 compared to $5.3 million for the first quarter of 2017 and $9.3 million for the second quarter of 2016.

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

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

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



	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2017			2016
Provision for loan losses	$	9,058		$	5,178		$	9,229		$	14,236		$	17,571
Provision for unfunded lending-related commitments	(106		)	138			40			32			121
Provision for covered loan losses	(61		)	(107		)	(140		)	(168		)	(529		)
Provision for credit losses	$	8,891		$	5,209		$	9,129		$	14,100		$	17,163

							Period End
							June 30,			March 31,			June 30,
							2017			2017			2016
Allowance for loan losses							$	129,591		$	125,819		$	114,356
Allowance for unfunded lending-related commitments							1,705			1,811			1,070
Allowance for covered loan losses							1,074			1,319			2,412
Allowance for credit losses							$	132,370		$	128,949		$	117,838

The tables below summarize the calculation of allowance for loan losses for the Company’s core loan portfolio and consumer, niche and purchased loan portfolio, excluding covered loans, as of June 30, 2017 and March 31, 2017.



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


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


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



	As of March 31, 2017
	Recorded		Calculated		As a percentage of its own respective
(Dollars in thousands)	Investment		Allowance		category’s balance
Commercial:⁽¹⁾
Commercial and industrial	$	3,396,191	$	29,088	0.86	%
Asset-based lending	875,403		7,262		0.83
Tax exempt	315,487		2,206		0.70
Leases	318,943		1,132		0.35
Commercial real estate:⁽¹⁾
Residential construction	46,956		1,091		2.32
Commercial construction	607,507		6,817		1.12
Land	100,056		3,655		3.65
Office	817,239		5,810		0.71
Industrial	742,844		6,711		0.90
Retail	863,804		5,963		0.69
Multi-family	765,933		8,082		1.06
Mixed use and other	1,835,745		14,302		0.78
Home equity⁽¹⁾	639,399		12,194		1.91
Residential real estate⁽¹⁾	678,978		5,461		0.80
Total core loan portfolio	$	12,004,485	$	109,774	0.91	%
Commercial:
Franchise	$	560,532	$	4,595	0.82	%
Mortgage warehouse lines of credit	154,180		1,178		0.76
Community Advantage - homeowner associations	145,233		363		0.25
Aircraft	3,250		17		0.52
Purchased non-covered commercial loans ⁽²⁾	312,270		741		0.24
Commercial real estate:
Purchased non-covered commercial real estate ⁽²⁾	481,598		202		0.04
Purchased non-covered home equity ⁽²⁾	68,859		9		0.01
Purchased non-covered residential real estate ⁽²⁾	41,630		69		0.17
Premium finance receivables
U.S. commercial insurance loans	2,167,524		5,389		0.25
Canada commercial insurance loans ⁽²⁾	279,422		572		0.20
Life insurance loans ⁽¹⁾	3,352,857		1,598		0.05
Purchased life insurance loans ⁽²⁾	240,706		—		—
Consumer and other ⁽¹⁾	115,710		1,310		1.13
Purchased non-covered consumer and other ⁽²⁾	2,802		2		0.07
Total consumer, niche and purchased loan portfolio	$	7,926,573	$	16,045	0.20	%
Total loans, net of unearned income, excluding covered loans	$	19,931,058	$	125,819	0.63	%


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


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

In addition to the $129.6 million of allowance for loan losses, there is $6.7 million of non-accretable credit discount on purchased loans reported in accordance with ASC 310-30, excluding covered loans, that is available to absorb credit losses.

As part of the regular quarterly review performed by management to determine if the Company’s allowance for loan losses is appropriate, an analysis is prepared on the loan portfolio based upon a breakout of core loans and consumer, niche and purchased loans. A summary of the allowance for loan losses calculated for the loan components in both the core loan portfolio and the consumer, niche and purchased loan portfolio was shown on the preceding tables as of June 30, 2017 and March 31, 2017.

The increase in the allowance for loan losses to core loans in the second quarter of 2017 compared to the first quarter of 2017 was primarily attributable to $458.7 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.

The tables below show the aging of the Company’s loan portfolio at June 30, 2017 and March 31, 2017:



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



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


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



			90+ days		60-89		30-59
As of March 31, 2017			and still		days past		days past
(Dollars in thousands)	Nonaccrual		accruing		due		due		Current		Total Loans
Loan Balances:
Commercial ⁽¹⁾	$	14,307	$	1,468	$	19	$	39,440	$	6,026,255	$	6,081,489
Commercial real estate ⁽¹⁾	20,809		12,559		5,426		56,712		6,166,176		6,261,682
Home equity	11,722		—		430		4,884		691,222		708,258
Residential real estate ⁽¹⁾	11,943		900		3,410		5,262		699,093		720,608
Premium finance receivables - commercial	12,629		4,991		6,383		23,775		2,399,168		2,446,946
Premium finance receivables - life insurance ⁽¹⁾	—		2,024		2,535		32,208		3,556,796		3,593,563
Consumer and other ⁽¹⁾	350		167		323		543		117,129		118,512
Total loans, net of unearned income, excluding covered loans	$	71,760	$	22,109	$	18,526	$	162,824	$	19,655,839	$	19,931,058
Covered loans	1,592		2,808		268		1,570		46,121		52,359
Total loans, net of unearned income	$	73,352	$	24,917	$	18,794	$	164,394	$	19,701,960	$	19,983,417



As of March 31, 2017 Aging as a % of Loan Balance:	Nonaccrual		90+ days and still accruing		60-89 days past due		30-59 days past due		Current		Total Loans
Commercial ⁽¹⁾	0.2	%	—	%	—	%	0.6	%	99.2	%	100.0	%
Commercial real estate ⁽¹⁾	0.3		0.2		0.1		0.9		98.5		100.0
Home equity	1.7		—		0.1		0.7		97.5		100.0
Residential real estate ⁽¹⁾	1.7		0.1		0.5		0.7		97.0		100.0
Premium finance receivables - commercial	0.5		0.2		0.3		1.0		98.0		100.0
Premium finance receivables - life insurance ⁽¹⁾	—		0.1		0.1		0.9		98.9		100.0
Consumer and other ⁽¹⁾	0.3		0.1		0.3		0.5		98.8		100.0
Total loans, net of unearned income, excluding covered loans	0.4	%	0.1	%	0.1	%	0.8	%	98.6	%	100.0	%
Covered loans	3.0		5.4		0.5		3.0		88.1		100.0
Total loans, net of unearned income	0.4	%	0.1	%	0.1	%	0.8	%	98.6	%	100.0	%


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

As of June 30, 2017, $16.1 million of all loans, excluding covered loans, or 0.1%, were 60 to 89 days past due and $96.8 million, or 0.5%, were 30 to 59 days (or one payment) past due. As of March 31, 2017, $18.5 million of all loans, excluding covered loans, or 0.1%, were 60 to 89 days past due and $162.8 million, or 0.8%, 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 June 30, 2017 that are current with regard to the contractual terms of the loan agreement represent 98.1% of the total home equity portfolio. Residential real estate loans at June 30, 2017 that are current with regards to the contractual terms of the loan agreements comprise 97.8% 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.



	June 30,			March 31,			June 30,
(Dollars in thousands)	2017			2017			2016
Loans past due greater than 90 days and still accruing⁽¹⁾:
Commercial	$	—		$	100		$	235
Commercial real estate	—			—			—
Home equity	—			—			—
Residential real estate	179			—			—
Premium finance receivables - commercial	5,922			4,991			10,558
Premium finance receivables - life insurance	1,046			2,024			—
Consumer and other	63			104			163
Total loans past due greater than 90 days and still accruing	7,210			7,219			10,956
Non-accrual loans ⁽²⁾:
Commercial	10,191			14,307			16,801
Commercial real estate	16,980			20,809			24,415
Home equity	9,482			11,722			8,562
Residential real estate	14,292			11,943			12,413
Premium finance receivables - commercial	10,456			12,629			14,497
Premium finance receivables - life insurance	—			—			—
Consumer and other	439			350			475
Total non-accrual loans	61,840			71,760			77,163
Total non-performing loans:
Commercial	10,191			14,407			17,036
Commercial real estate	16,980			20,809			24,415
Home equity	9,482			11,722			8,562
Residential real estate	14,471			11,943			12,413
Premium finance receivables - commercial	16,378			17,620			25,055
Premium finance receivables - life insurance	1,046			2,024			—
Consumer and other	502			454			638
Total non-performing loans	$	69,050		$	78,979		$	88,119
Other real estate owned	16,853			17,090			22,154
Other real estate owned - from acquisitions	22,508			22,774			15,909
Other repossessed assets	532			544			420
Total non-performing assets	$	108,943		$	119,387		$	126,602
TDRs performing under the contractual terms of the loan agreement	$	28,008		$	28,392		$	33,310
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.16		%	0.24		%	0.33		%
Commercial real estate	0.27			0.33			0.42
Home equity	1.38			1.66			1.13
Residential real estate	1.90			1.66			1.90
Premium finance receivables - commercial	0.62			0.72			1.01
Premium finance receivables - life insurance	0.03			0.06			—
Consumer and other	0.44			0.38			0.50
Total loans, net of unearned income	0.33		%	0.40		%	0.48		%
Total non-performing assets as a percentage of total assets	0.40		%	0.46		%	0.52		%
Allowance for loan losses as a percentage of total non-performing loans	187.68		%	159.31		%	129.78		%


(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 $5.1 million, $11.3 million and $16.3 million as of June 30, 2017, March 31, 2017 and June 30, 2016, respectively.

The ratio of non-performing assets to total assets was 0.40% as of June 30, 2017, compared to 0.46% at March 31, 2017, and 0.52% at June 30, 2016. Non-performing assets, excluding covered assets and non-covered PCI loans, totaled $108.9 million at June 30, 2017, compared to $119.4 million at March 31, 2017 and $126.6 million at June 30, 2016. Non-performing loans, excluding covered loans and non-covered PCI loans, totaled $69.1 million, or 0.33% of total loans, at June 30, 2017 compared to $79.0 million, or 0.40% of total loans, at March 31, 2017 and $88.1 million, or 0.48% of total loans, at June 30, 2016. The decrease in non-performing loans, excluding covered loans and non-covered PCI loans, compared to March 31, 2017 is primarily the result of a $4.2 million decrease in the commercial portfolio and a $3.8 million decrease in the commercial real estate portfolio. OREO, excluding covered OREO, of $39.4 million at June 30, 2017 decreased $503,000 compared to $39.9 million at March 31, 2017 and increased $1.3 million compared to $38.1 million at June 30, 2016.

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

Nonperforming Loans Rollforward

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



	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2017			2016
Balance at beginning of period	$	78,979		$	87,454		$	89,499		$	87,454		$	84,057
Additions, net	10,888			8,609			10,351			19,497			22,517
Return to performing status	(975		)	(1,592		)	(873		)	(2,567		)	(2,879		)
Payments received	(10,684		)	(5,614		)	(4,810		)	(16,298		)	(8,118		)
Transfer to OREO and other repossessed assets	(2,543		)	(1,661		)	(1,818		)	(4,204		)	(3,898		)
Charge-offs	(4,344		)	(1,280		)	(2,943		)	(5,624		)	(3,476		)
Net change for niche loans ⁽¹⁾	(2,271		)	(6,937		)	(1,287		)	(9,208		)	(84		)
Balance at end of period	$	69,050		$	78,979		$	88,119		$	69,050		$	88,119


(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:



	June 30,			March 31,			June 30,
(Dollars in thousands)	2017			2017			2016
Accruing TDRs:
Commercial	$	3,886		$	4,607		$	3,931
Commercial real estate	17,349			18,923			24,450
Residential real estate and other	6,773			4,862			4,929
Total accrual	$	28,008		$	28,392		$	33,310
Non-accrual TDRs: ⁽¹⁾
Commercial	$	1,110		$	1,424		$	1,477
Commercial real estate	1,839			7,338			12,240
Residential real estate and other	2,134			2,515			2,608
Total non-accrual	$	5,083		$	11,277		$	16,325
Total TDRs:
Commercial	$	4,996		$	6,031		$	5,408
Commercial real estate	19,188			26,261			36,690
Residential real estate and other	8,907			7,377			7,537
Total TDRs	$	33,091		$	39,669		$	49,635
Weighted-average contractual interest rate of TDRs	4.28		%	4.37		%	4.31		%


(1)	Included in total non-performing loans.

Other Real Estate Owned

The table below presents a summary of other real estate owned, excluding covered other real estate owned, as of June 30, 2017, March 31, 2017 and June 30, 2016, and shows the activity for the respective period and the balance for each property type:



	Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands)	2017			2017			2016
Balance at beginning of period	$	39,864		$	40,282		$	41,002
Disposals/resolved	(4,270		)	(2,644		)	(6,591		)
Transfers in at fair value, less costs to sell	3,965			2,268			1,309
Transfers in from covered OREO subsequent to loss share expiration	—			760			3,300
Additions from acquisition	—			—			—
Fair value adjustments	(198		)	(802		)	(957		)
Balance at end of period	$	39,361		$	39,864		$	38,063

	Period End
	June 30,			March 31,			June 30,
Balance by Property Type	2017			2017			2016
Residential real estate	$	7,684		$	7,597		$	9,153
Residential real estate development	755			1,240			2,133
Commercial real estate	30,922			31,027			26,777
Total	$	39,361		$	39,864		$	38,063

Items Impacting Comparative Financial Results:

Acquisitions

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

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

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

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

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, 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 2016 Annual Report on Form 10-K and in any of the Company’s subsequent SEC filings. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things, statements relating to the Company’s future financial performance, the performance of its loan portfolio, the expected amount of future credit reserves and charge-offs, delinquency trends, growth plans, regulatory developments, securities that the Company may offer from time to time, and management’s long-term performance goals, as well as statements relating to the anticipated effects on financial condition and results of operations from expected developments or events, the Company’s business and growth strategies, including future acquisitions of banks, specialty finance or wealth management businesses, internal growth and plans to form additional de novo banks or branch offices. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


•	environmental liability risk associated with lending activities;


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


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


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


•	the soundness of other financial institutions;


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


•	examinations and challenges by tax authorities;


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


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


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


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


•	a lowering of our credit rating;


•	changes in U.S. monetary policy;


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


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


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


•	the impact of heightened capital requirements;


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


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


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


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


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

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

CONFERENCE CALL, WEB CAST AND REPLAY

The Company will hold a conference call at 10:00 a.m. (CT) Wednesday, July 19, 2017 regarding second quarter and year-to-date 2017 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #50312103. A simultaneous audio-only web cast and replay of the conference call may be accessed via the Company’s website at (http://www.wintrust.com), Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the second quarter and year-to-date 2017 earnings press release will be available on the home page of the Company’s website at (http://www.wintrust.com) and at the Investor Relations, Investor News and Events, Press Releases link on its website.

WINTRUST FINANCIAL CORPORATION

Supplemental Financial Information

5 Quarter Trends

WINTRUST FINANCIAL CORPORATION - Supplemental Financial Information

Selected Financial Highlights - 5 Quarter Trends

(Dollars in thousands, except per share data)



	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
	2017			2017			2016			2016			2016
Selected Financial Condition Data (at end of period):
Total assets	$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759		$	24,420,616
Total loans, excluding loans held-for-sale and covered loans	20,743,332			19,931,058			19,703,172			19,101,261			18,174,655
Total deposits	22,605,692			21,730,441			21,658,632			21,147,655			20,041,750
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Total shareholders’ equity	2,839,458			2,764,983			2,695,617			2,674,474			2,623,595
Selected Statements of Income Data:
Net interest income	204,409			192,580			190,778			184,636			175,270
Net revenue ⁽¹⁾	294,381			261,345			276,053			271,240			260,069
Net income	64,897			58,378			54,608			53,115			50,041
Net income per common share – Basic	$	1.15		$	1.05		$	0.98		$	0.96		$	0.94
Net income per common share – Diluted	$	1.11		$	1.00		$	0.94		$	0.92		$	0.90
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin	3.41		%	3.36		%	3.21		%	3.21		%	3.24		%
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	3.43		%	3.39		%	3.23		%	3.24		%	3.27		%
Non-interest income to average assets	1.39		%	1.11		%	1.32		%	1.38		%	1.44		%
Non-interest expense to average assets	2.83		%	2.70		%	2.80		%	2.82		%	2.89		%
Net overhead ratio ⁽³⁾	1.44		%	1.60		%	1.48		%	1.44		%	1.46		%
Return on average assets	1.00		%	0.94		%	0.85		%	0.85		%	0.85		%
Return on average common equity	9.55		%	8.93		%	8.32		%	8.20		%	8.43		%
Return on average tangible common equity (non-GAAP) ⁽²⁾	12.02		%	11.44		%	10.68		%	10.55		%	11.12		%
Average total assets	$	26,050,949		$	25,207,348		$	25,611,060		$	24,879,252		$	23,754,755
Average total shareholders’ equity	2,800,905			2,739,050			2,689,876			2,651,684			2,465,732
Average loans to average deposits ratio (excluding loans held-for-sale, excluding covered loans)	94.1		%	92.5		%	89.6		%	89.8		%	92.4		%
Average loans to average deposits ratio (excluding loans held-for-sale, including covered loans)	94.4			92.7			89.9			90.3			92.9
Common Share Data at end of period:
Market price per common share	$	76.44		$	69.12		$	72.57		$	55.57		$	51.00
Book value per common share ⁽²⁾	$	48.73		$	47.88		$	47.12		$	46.86		$	45.96
Tangible common book value per share ⁽²⁾	$	39.40		$	37.97		$	37.08		$	37.06		$	36.12
Common shares outstanding	55,699,927			52,503,663			51,880,540			51,714,683			51,619,155
Other Data at end of period:⁽⁶⁾
Leverage Ratio⁽⁴⁾	9.2		%	9.3		%	8.9		%	9.0		%	9.2		%
Tier 1 Capital to risk-weighted assets ⁽⁴⁾	9.8		%	10.0		%	9.7		%	9.8		%	10.1		%
Common equity Tier 1 capital to risk-weighted assets ⁽⁴⁾	9.3		%	8.9		%	8.6		%	8.7		%	8.9		%
Total capital to risk-weighted assets ⁽⁴⁾	12.0		%	12.2		%	11.9		%	12.1		%	12.4		%
Allowance for credit losses ⁽⁵⁾	$	131,296		$	127,630		$	123,964		$	119,341		$	115,426
Non-performing loans	69,050			78,979			87,454			83,128			88,119
Allowance for credit losses to total loans ⁽⁵⁾	0.63		%	0.64		%	0.63		%	0.62		%	0.64		%
Non-performing loans to total loans	0.33		%	0.40		%	0.44		%	0.44		%	0.48		%
Number of:
Bank subsidiaries	15			15			15			15			15
Banking offices	153			155			155			152			153


(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)
	June 30,			March 31,			December 31,			September 30,			June 30,
(In thousands)	2017			2017			2016			2016			2016
Assets
Cash and due from banks	$	296,105		$	214,102		$	267,194		$	242,825		$	267,551
Federal funds sold and securities purchased under resale agreements	56			3,046			2,851			4,122			4,024
Interest bearing deposits with banks	1,011,635			1,007,468			980,457			816,104			693,269
Available-for-sale securities, at fair value	1,649,636			1,803,733			1,724,667			1,650,096			637,663
Held-to-maturity securities, at amortized cost	793,376			667,764			635,705			932,767			992,211
Trading account securities	1,987			714			1,989			1,092			3,613
Federal Home Loan Bank and Federal Reserve Bank stock	80,812			78,904			133,494			129,630			121,319
Brokerage customer receivables	23,281			23,171			25,181			25,511			26,866
Mortgage loans held-for-sale	382,837			288,964			418,374			559,634			554,256
Loans, net of unearned income, excluding covered loans	20,743,332			19,931,058			19,703,172			19,101,261			18,174,655
Covered loans	50,119			52,359			58,145			95,940			105,248
Total loans	20,793,451			19,983,417			19,761,317			19,197,201			18,279,903
Allowance for loan losses	(129,591		)	(125,819		)	(122,291		)	(117,693		)	(114,356		)
Allowance for covered loan losses	(1,074		)	(1,319		)	(1,322		)	(1,422		)	(2,412		)
Net loans	20,662,786			19,856,279			19,637,704			19,078,086			18,163,135
Premises and equipment, net	605,211			598,746			597,301			597,263			595,792
Lease investments, net	191,248			155,233			129,402			116,355			103,749
Accrued interest receivable and other assets	577,359			560,741			593,796			660,923			670,014
Trade date securities receivable	133,130			—			—			677			1,079,238
Goodwill	500,260			499,341			498,587			485,938			486,095
Other intangible assets	19,546			20,687			21,851			20,736			21,821
Total assets	$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759		$	24,420,616
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	6,294,052		$	5,790,579		$	5,927,377		$	5,711,042		$	5,367,672
Interest bearing	16,311,640			15,939,862			15,731,255			15,436,613			14,674,078
Total deposits	22,605,692			21,730,441			21,658,632			21,147,655			20,041,750
Federal Home Loan Bank advances	318,270			227,585			153,831			419,632			588,055
Other borrowings	277,710			238,787			262,486			241,366			252,611
Subordinated notes	139,029			138,993			138,971			138,943			138,915
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Trade date securities payable	5,151			—			—			—			40,000
Accrued interest payable and other liabilities	490,389			424,538			505,450			446,123			482,124
Total liabilities	24,089,807			23,013,910			22,972,936			22,647,285			21,797,021
Shareholders’ Equity:
Preferred stock	125,000			251,257			251,257			251,257			251,257
Common stock	55,802			52,605			51,978			51,811			51,708
Surplus	1,511,080			1,381,886			1,365,781			1,356,759			1,350,751
Treasury stock	(4,884		)	(4,884		)	(4,589		)	(4,522		)	(4,145		)
Retained earnings	1,198,997			1,143,943			1,096,518			1,051,748			1,008,464
Accumulated other comprehensive loss	(46,537		)	(59,824		)	(65,328		)	(32,579		)	(34,440		)
Total shareholders’ equity	2,839,458			2,764,983			2,695,617			2,674,474			2,623,595
Total liabilities and shareholders’ equity	$	26,929,265		$	25,778,893		$	25,668,553		$	25,321,759		$	24,420,616

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Consolidated Statements of Income (Unaudited) - 5 Quarter Trends



	Three Months Ended
	June 30,			March 31,			December 31,		September 30,			June 30,
(In thousands, except per share data)	2017			2017			2016		2016			2016
Interest income
Interest and fees on loans	$	212,709		$	199,314		$	199,155	$	190,189		$	178,530
Interest bearing deposits with banks	1,634			1,623			1,541		1,156			793
Federal funds sold and securities purchased under resale agreements	1			1			1		1			1
Investment securities	15,524			13,573			12,954		15,496			16,398
Trading account securities	4			11			32		18			14
Federal Home Loan Bank and Federal Reserve Bank stock	1,153			1,070			1,144		1,094			1,112
Brokerage customer receivables	156			167			186		195			216
Total interest income	231,181			215,759			215,013		208,149			197,064
Interest expense
Interest on deposits	18,471			16,270			16,413		15,621			13,594
Interest on Federal Home Loan Bank advances	2,933			1,590			2,439		2,577			2,984
Interest on other borrowings	1,149			1,139			1,074		1,137			1,086
Interest on subordinated notes	1,786			1,772			1,779		1,778			1,777
Interest on junior subordinated debentures	2,433			2,408			2,530		2,400			2,353
Total interest expense	26,772			23,179			24,235		23,513			21,794
Net interest income	204,409			192,580			190,778		184,636			175,270
Provision for credit losses	8,891			5,209			7,350		9,571			9,129
Net interest income after provision for credit losses	195,518			187,371			183,428		175,065			166,141
Non-interest income
Wealth management	19,905			20,148			19,512		19,334			18,852
Mortgage banking	35,939			21,938			35,489		34,712			36,807
Service charges on deposit accounts	8,696			8,265			8,054		8,024			7,726
Gains (losses) on investment securities, net	47			(55		)	1,575		3,305			1,440
Fees from covered call options	890			759			1,476		3,633			4,649
Trading (losses) gains, net	(420		)	(320		)	1,007		(432		)	(316		)
Operating lease income, net	6,805			5,782			5,171		4,459			4,005
Other	18,110			12,248			12,991		13,569			11,636
Total non-interest income	89,972			68,765			85,275		86,604			84,799
Non-interest expense
Salaries and employee benefits	106,502			99,316			104,735		103,718			100,894
Equipment	9,909			9,002			9,532		9,449			9,307
Operating lease equipment depreciation	5,662			4,636			4,219		3,605			3,385
Occupancy, net	12,586			13,101			14,254		12,767			11,943
Data processing	7,804			7,925			7,687		7,432			7,138
Advertising and marketing	8,726			5,150			6,691		7,365			6,941
Professional fees	7,510			4,660			5,425		5,508			5,419
Amortization of other intangible assets	1,141			1,164			1,158		1,085			1,248
FDIC insurance	3,874			4,156			4,726		3,686			4,040
OREO expense, net	739			1,665			1,843		1,436			1,348
Other	19,091			17,343			20,101		20,564			19,306
Total non-interest expense	183,544			168,118			180,371		176,615			170,969
Income before taxes	101,946			88,018			88,332		85,054			79,971
Income tax expense	37,049			29,640			33,724		31,939			29,930
Net income	$	64,897		$	58,378		$	54,608	$	53,115		$	50,041
Preferred stock dividends	2,050			3,628			3,629		3,628			3,628
Net income applicable to common shares	$	62,847		$	54,750		$	50,979	$	49,487		$	46,413
Net income per common share - Basic	$	1.15		$	1.05		$	0.98	$	0.96		$	0.94
Net income per common share - Diluted	$	1.11		$	1.00		$	0.94	$	0.92		$	0.90
Cash dividends declared per common share	$	0.14		$	0.14		$	0.12	$	0.12		$	0.12
Weighted average common shares outstanding	54,775			52,267			51,812		51,679			49,140
Dilutive potential common shares	1,812			4,160			4,152		4,047			3,965
Average common shares and dilutive common shares	56,587			56,427			55,964		55,726			53,105

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Period End Loan Balances - 5 Quarter Trends



	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2016			2016
Balance:
Commercial	$	6,406,289		$	6,081,489		$	6,005,422		$	5,951,544		$	5,144,533
Commercial real estate	6,402,494			6,261,682			6,196,087			5,908,684			5,848,334
Home equity	689,483			708,258			725,793			742,868			760,904
Residential real estate	762,810			720,608			705,221			663,598			653,664
Premium finance receivables - commercial	2,648,386			2,446,946			2,478,581			2,430,233			2,478,280
Premium finance receivables - life insurance	3,719,043			3,593,563			3,470,027			3,283,359			3,161,562
Consumer and other	114,827			118,512			122,041			120,975			127,378
Total loans, net of unearned income, excluding covered loans	$	20,743,332		$	19,931,058		$	19,703,172		$	19,101,261		$	18,174,655
Covered loans	50,119			52,359			58,145			95,940			105,248
Total loans, net of unearned income	$	20,793,451		$	19,983,417		$	19,761,317		$	19,197,201		$	18,279,903
Mix:
Commercial	31		%	30		%	30		%	31		%	28		%
Commercial real estate	31			31			31			31			31
Home equity	3			4			4			4			4
Residential real estate	3			4			4			3			4
Premium finance receivables - commercial	13			12			12			13			14
Premium finance receivables - life insurance	18			18			18			17			17
Consumer and other	1			1			1			1			1
Total loans, net of unearned income, excluding covered loans	100		%	100		%	100		%	100		%	99		%
Covered loans	—			—			—			—			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



	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2016			2016
Balance:
Non-interest bearing	$	6,294,052		$	5,790,579		$	5,927,377		$	5,711,042		$	5,367,672
NOW and interest bearing demand deposits	2,459,238			2,484,676			2,624,442			2,552,611			2,450,710
Wealth management deposits ⁽¹⁾	2,464,162			2,390,464			2,209,617			2,283,233			1,904,121
Money market	4,449,385			4,555,752			4,441,811			4,421,631			4,384,134
Savings	2,419,463			2,287,958			2,180,482			1,977,661			1,851,863
Time certificates of deposit	4,519,392			4,221,012			4,274,903			4,201,477			4,083,250
Total deposits	$	22,605,692		$	21,730,441		$	21,658,632		$	21,147,655		$	20,041,750
Mix:
Non-interest bearing	28		%	27		%	27		%	27		%	27		%
NOW and interest bearing demand deposits	11			11			12			12			12
Wealth management deposits ⁽¹⁾	11			11			10			11			10
Money market	19			21			21			21			22
Savings	11			11			10			9			9
Time certificates of deposit	20			19			20			20			20
Total deposits	100		%	100		%	100		%	100		%	100		%


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

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

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



	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2016			2016
Net interest income - FTE	$	206,108		$	194,282		$	192,276		$	186,192		$	176,733
Call option income	890			759			1,476			3,633			4,649
Net interest income including call option income	$	206,998		$	195,041		$	193,752		$	189,825		$	181,382
Yield on earning assets	3.88		%	3.79		%	3.64		%	3.65		%	3.67		%
Rate on interest-bearing liabilities	0.63			0.58			0.58			0.58			0.56
Rate spread	3.25		%	3.21		%	3.06		%	3.07		%	3.11		%
Less: Fully tax-equivalent adjustment	(0.02		)	(0.03		)	(0.02		)	(0.03		)	(0.03		)
Net free funds contribution	0.18			0.18			0.17			0.17			0.16
Net interest margin (GAAP-derived)	3.41		%	3.36		%	3.21		%	3.21		%	3.24		%
Fully tax-equivalent adjustment	0.02			0.03			0.02			0.03			0.03
Net interest margin - FTE	3.43		%	3.39		%	3.23		%	3.24		%	3.27		%
Call option income	0.01			0.01			0.02			0.06			0.09
Net interest margin - FTE, including call option income	3.44		%	3.40		%	3.25		%	3.30		%	3.36		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

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



	Six Months Ended June 30,			Years Ended December 31,
(Dollars in thousands)	2017			2016			2015			2014			2013
Net interest income - FTE	$	400,390		$	728,145		$	646,238		$	601,744		$	552,887
Call option income	1,649			11,470			15,364			7,859			4,773
Net interest income including call option income	$	402,039		$	739,615		$	661,602		$	609,603		$	557,660
Yield on earning assets	3.84		%	3.67		%	3.76		%	3.96		%	4.01		%
Rate on interest-bearing liabilities	0.60			0.57			0.54			0.55			0.63
Rate spread	3.24		%	3.10		%	3.22		%	3.41		%	3.38		%
Less: Fully tax-equivalent adjustment	(0.03		)	(0.02		)	(0.02		)	(0.02		)	(0.01		)
Net free funds contribution	0.17			0.16			0.14			0.12			0.12
Net interest margin (GAAP-derived)	3.38		%	3.24		%	3.34		%	3.51		%	3.49		%
Fully tax-equivalent adjustment	0.03			0.02			0.02			0.02			0.01
Net interest margin - FTE	3.41		%	3.26		%	3.36		%	3.53		%	3.50		%
Call option income	0.01			0.05			0.08			0.05			0.03
Net interest margin - FTE, including call option income	3.42		%	3.31		%	3.44		%	3.58		%	3.53		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Quarterly Average Balances - 5 Quarter Trends



	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(In thousands)	2017			2017			2016			2016			2016
Interest-bearing deposits with banks and cash equivalents	$	722,349		$	780,752		$	1,251,677		$	851,385		$	639,753
Investment securities	2,572,619			2,395,625			2,477,708			2,692,691			2,656,654
FHLB and FRB stock	99,438			94,090			131,231			127,501			116,706
Liquidity management assets	$	3,394,406		$	3,270,467		$	3,860,616		$	3,671,577		$	3,413,113
Other earning assets	25,749			25,236			27,608			29,875			29,759
Loans, net of unearned income	20,599,718			19,923,606			19,711,504			19,071,621			18,204,552
Covered loans	51,823			56,872			59,827			101,570			109,533
Total earning assets	$	24,071,696		$	23,276,181		$	23,659,555		$	22,874,643		$	21,756,957
Allowance for loan and covered loan losses	(132,053		)	(127,425		)	(122,665		)	(121,156		)	(116,984		)
Cash and due from banks	242,495			229,588			221,892			240,239			272,935
Other assets	1,868,811			1,829,004			1,852,278			1,885,526			1,841,847
Total assets	$	26,050,949		$	25,207,348		$	25,611,060		$	24,879,252		$	23,754,755
Interest-bearing deposits	$	15,621,674		$	15,466,670		$	15,567,263		$	15,117,102		$	14,065,995
Federal Home Loan Bank advances	689,600			181,338			388,780			459,198			946,081
Other borrowings	240,547			255,012			240,174			249,307			248,233
Subordinated notes	139,007			138,980			138,953			138,925			138,898
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Total interest-bearing liabilities	$	16,944,394		$	16,295,566		$	16,588,736		$	16,218,098		$	15,652,773
Non-interest bearing deposits	5,904,679			5,787,034			5,902,439			5,566,983			5,223,384
Other liabilities	400,971			385,698			430,009			442,487			412,866
Equity	2,800,905			2,739,050			2,689,876			2,651,684			2,465,732
Total liabilities and shareholders’ equity	$	26,050,949		$	25,207,348		$	25,611,060		$	24,879,252		$	23,754,755

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Net Interest Margin - 5 Quarter Trends



	Three Months Ended
	June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016
Yield earned on:
Interest-bearing deposits with banks and cash equivalents	0.91	%	0.84	%	0.49	%	0.54	%	0.50	%
Investment securities	2.55		2.45		2.21		2.43		2.62
FHLB and FRB stock	4.66		4.61		3.47		3.41		3.83
Liquidity management assets	2.27	%	2.13	%	1.70	%	2.03	%	2.27	%
Other earning assets	2.53		2.95		3.37		2.96		3.21
Loans, net of unearned income	4.15		4.05		4.01		3.96		3.92
Covered loans	5.01		6.55		6.38		4.45		5.44
Total earning assets	3.88	%	3.79	%	3.64	%	3.65	%	3.67	%
Rate paid on:
Interest-bearing deposits	0.47	%	0.43	%	0.42	%	0.41	%	0.39	%
Federal Home Loan Bank advances	1.71		3.55		2.50		2.23		1.27
Other borrowings	1.92		1.81		1.78		1.81		1.76
Subordinated notes	5.14		5.10		5.12		5.12		5.12
Junior subordinated debentures	3.80		3.80		3.90		3.70		3.67
Total interest-bearing liabilities	0.63	%	0.58	%	0.58	%	0.58	%	0.56	%
Interest rate spread	3.25	%	3.21	%	3.06	%	3.07	%	3.11	%
Less: Fully tax-equivalent adjustment	(0.02	)	(0.03	)	(0.02	)	(0.03	)	(0.03	)
Net free funds/contribution	0.18		0.18		0.17		0.17		0.16
Net interest margin (GAAP)	3.41	%	3.36	%	3.21	%	3.21	%	3.24	%
Fully tax-equivalent adjustment	0.02		0.03		0.02		0.03		0.03
Net interest margin - FTE	3.43	%	3.39	%	3.23	%	3.24	%	3.27	%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Non-Interest Income - 5 Quarter Trends



	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(In thousands)	2017			2017			2016			2016			2016
Brokerage	$	5,449		$	6,220		$	6,408		$	6,752		$	6,302
Trust and asset management	14,456			13,928			13,104			12,582			12,550
Total wealth management	19,905			20,148			19,512			19,334			18,852
Mortgage banking	35,939			21,938			35,489			34,712			36,807
Service charges on deposit accounts	8,696			8,265			8,054			8,024			7,726
(Losses) gains on investment securities, net	47			(55		)	1,575			3,305			1,440
Fees from covered call options	890			759			1,476			3,633			4,649
Trading (losses) gains, net	(420		)	(320		)	1,007			(432		)	(316		)
Operating lease income, net	6,805			5,782			5,171			4,459			4,005
Other:
Interest rate swap fees	2,221			1,433			2,870			2,881			1,835
BOLI	888			985			981			884			1,257
Administrative services	986			1,024			1,115			1,151			1,074
(Loss) gain on extinguishment of debt	—			—			(717		)	—			—
Early pay-offs of leases	10			1,211			728			—			—
Miscellaneous	14,005			7,595			8,014			8,653			7,470
Total other income	18,110			12,248			12,991			13,569			11,636
Total Non-Interest Income	$	89,972		$	68,765		$	85,275		$	86,604		$	84,799

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

Non-Interest Expense - 5 Quarter Trends



	Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
(In thousands)	2017		2017		2016		2016		2016
Salaries and employee benefits:
Salaries	$	55,215	$	55,008	$	53,108	$	54,309	$	52,924
Commissions and incentive compensation	34,050		26,643		35,744		33,740		32,531
Benefits	17,237		17,665		15,883		15,669		15,439
Total salaries and employee benefits	106,502		99,316		104,735		103,718		100,894
Equipment	9,909		9,002		9,532		9,449		9,307
Operating lease equipment depreciation	5,662		4,636		4,219		3,605		3,385
Occupancy, net	12,586		13,101		14,254		12,767		11,943
Data processing	7,804		7,925		7,687		7,432		7,138
Advertising and marketing	8,726		5,150		6,691		7,365		6,941
Professional fees	7,510		4,660		5,425		5,508		5,419
Amortization of other intangible assets	1,141		1,164		1,158		1,085		1,248
FDIC insurance	3,874		4,156		4,726		3,686		4,040
OREO expense, net	739		1,665		1,843		1,436		1,348
Other:
Commissions - 3rd party brokers	1,033		1,098		1,165		1,362		1,324
Postage	2,080		1,442		1,955		1,889		2,038
Miscellaneous	15,978		14,803		16,981		17,313		15,944
Total other expense	19,091		17,343		20,101		20,564		19,306
Total Non-Interest Expense	$	183,544	$	168,118	$	180,371	$	176,615	$	170,969

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

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



	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2016			2016
Allowance for loan losses at beginning of period	$	125,819		$	122,291		$	117,693		$	114,356		$	110,171
Provision for credit losses	8,952			5,316			7,357			9,741			9,269
Other adjustments	(30		)	(56		)	33			(112		)	(134		)
Reclassification (to) from allowance for unfunded lending-related commitments	106			(138		)	(25		)	(579		)	(40		)
Charge-offs:
Commercial	913			641			3,054			3,469			721
Commercial real estate	1,985			261			375			382			502
Home equity	1,631			625			326			574			2,046
Residential real estate	146			329			410			134			693
Premium finance receivables - commercial	1,878			1,427			1,843			1,959			1,911
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	175			134			205			389			224
Total charge-offs	6,728			3,417			6,213			6,907			6,097
Recoveries:
Commercial	561			273			668			176			121
Commercial real estate	276			554			1,916			364			296
Home equity	144			65			300			65			71
Residential real estate	54			178			21			61			31
Premium finance receivables - commercial	404			612			498			456			633
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	33			141			43			72			35
Total recoveries	1,472			1,823			3,446			1,194			1,187
Net charge-offs	(5,256		)	(1,594		)	(2,767		)	(5,713		)	(4,910		)
Allowance for loan losses at period end	$	129,591		$	125,819		$	122,291		$	117,693		$	114,356
Allowance for unfunded lending-related commitments at period end	1,705			1,811			1,673			1,648			1,070
Allowance for credit losses at period end	$	131,296		$	127,630		$	123,964		$	119,341		$	115,426
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial	0.02		%	0.03		%	0.16		%	0.24		%	0.05		%
Commercial real estate	0.11			(0.02		)	(0.10		)	0.00			0.01
Home equity	0.85			0.32			0.01			0.27			1.03
Residential real estate	0.03			0.06			0.13			0.03			0.26
Premium finance receivables - commercial	0.23			0.13			0.22			0.24			0.21
Premium finance receivables - life insurance	0.00			0.00			0.00			0.00			0.00
Consumer and other	0.45			(0.02		)	0.47			0.92			0.57
Total loans, net of unearned income, excluding covered loans	0.10		%	0.03		%	0.06		%	0.12		%	0.11		%
Net charge-offs as a percentage of the provision for credit losses	58.71		%	29.98		%	37.61		%	58.65		%	52.97		%
Loans at period-end	$	20,743,332		$	19,931,058		$	19,703,172		$	19,101,261		$	18,174,655
Allowance for loan losses as a percentage of loans at period end	0.62		%	0.63		%	0.62		%	0.62		%	0.63		%
Allowance for credit losses as a percentage of loans at period end	0.63		%	0.64		%	0.63		%	0.62		%	0.64		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION

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



	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2016			2016
Loans past due greater than 90 days and still accruing⁽¹⁾:
Commercial	$	—		$	100		$	174		$	—		$	235
Commercial real estate	—			—			—			—			—
Home equity	—			—			—			—			—
Residential real estate	179			—			—			—			—
Premium finance receivables - commercial	5,922			4,991			7,962			7,754			10,558
Premium finance receivables - life insurance	1,046			2,024			3,717			—			—
Consumer and other	63			104			144			60			163
Total loans past due greater than 90 days and still accruing	7,210			7,219			11,997			7,814			10,956
Non-accrual loans:
Commercial	10,191			14,307			15,875			16,418			16,801
Commercial real estate	16,980			20,809			21,924			22,625			24,415
Home equity	9,482			11,722			9,761			9,309			8,562
Residential real estate	14,292			11,943			12,749			12,205			12,413
Premium finance receivables - commercial	10,456			12,629			14,709			14,214			14,497
Premium finance receivables - life insurance	—			—			—			—			—
Consumer and other	439			350			439			543			475
Total non-accrual loans	61,840			71,760			75,457			75,314			77,163
Total non-performing loans:
Commercial	10,191			14,407			16,049			16,418			17,036
Commercial real estate	16,980			20,809			21,924			22,625			24,415
Home equity	9,482			11,722			9,761			9,309			8,562
Residential real estate	14,471			11,943			12,749			12,205			12,413
Premium finance receivables - commercial	16,378			17,620			22,671			21,968			25,055
Premium finance receivables - life insurance	1,046			2,024			3,717			—			—
Consumer and other	502			454			583			603			638
Total non-performing loans	$	69,050		$	78,979		$	87,454		$	83,128		$	88,119
Other real estate owned	16,853			17,090			17,699			19,933			22,154
Other real estate owned - from acquisitions	22,508			22,774			22,583			15,117			15,909
Other repossessed assets	532			544			581			428			420
Total non-performing assets	$	108,943		$	119,387		$	128,317		$	118,606		$	126,602
TDRs performing under the contractual terms of the loan agreement	$	28,008		$	28,392		$	29,911		$	29,440		$	33,310
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.16		%	0.24		%	0.27		%	0.28		%	0.33		%
Commercial real estate	0.27			0.33			0.35			0.38			0.42
Home equity	1.38			1.66			1.34			1.25			1.13
Residential real estate	1.90			1.66			1.81			1.84			1.90
Premium finance receivables - commercial	0.62			0.72			0.91			0.90			1.01
Premium finance receivables - life insurance	0.03			0.06			0.11			—			—
Consumer and other	0.44			0.38			0.48			0.50			0.50
Total loans, net of unearned income	0.33		%	0.40		%	0.44		%	0.44		%	0.48		%
Total non-performing assets as a percentage of total assets	0.40		%	0.46		%	0.50		%	0.47		%	0.52		%
Allowance for loan losses as a percentage of total non-performing loans	187.68		%	159.31		%	139.83		%	141.58		%	129.78		%


(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 $5.1 million, $11.3 million, $11.8 million, $14.8 million and $16.3 million as of June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016, respectively.

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

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