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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, Ill., July 18, 2017 (GLOBE NEWSWIRE) -- 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.

http://www.globenewswire.com/NewsRoom/AttachmentNg/8f666adb-511a-4063-97a1-52811e9ae59a

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 banks1,634 1,623 793 3,257 1,539
Federal funds sold and securities purchased under resale agreements1 1 1 2 2
Investment securities15,524 13,573 16,398 29,097 33,588
Trading account securities4 11 14 15 25
Federal Home Loan Bank and Federal Reserve Bank stock1,153 1,070 1,112 2,223 2,049
Brokerage customer receivables156 167 216 323 435
Total interest income231,181 215,759 197,064 446,940 389,295
Interest expense
Interest on deposits18,471 16,270 13,594 34,741 26,375
Interest on Federal Home Loan Bank advances2,933 1,590 2,984 4,523 5,870
Interest on other borrowings1,149 1,139 1,086 2,288 2,144
Interest on subordinated notes1,786 1,772 1,777 3,558 3,554
Interest on junior subordinated debentures2,433 2,408 2,353 4,841 4,573
Total interest expense26,772 23,179 21,794 49,951 42,516
Net interest income204,409 192,580 175,270 396,989 346,779
Provision for credit losses8,891 5,209 9,129 14,100 17,163
Net interest income after provision for credit losses195,518 187,371 166,141 382,889 329,616
Non-interest income
Wealth management19,905 20,148 18,852 40,053 37,172
Mortgage banking35,939 21,938 36,807 57,877 58,542
Service charges on deposit accounts8,696 8,265 7,726 16,961 15,132
Gains (losses) on investment securities, net47 (55) 1,440 (8) 2,765
Fees from covered call options890 759 4,649 1,649 6,361
Trading losses, net(420) (320) (316) (740) (484)
Operating lease income, net6,805 5,782 4,005 12,587 6,811
Other18,110 12,248 11,636 30,358 27,252
Total non-interest income89,972 68,765 84,799 158,737 153,551
Non-interest expense
Salaries and employee benefits106,502 99,316 100,894 205,818 196,705
Equipment9,909 9,002 9,307 18,911 18,074
Operating lease equipment depreciation5,662 4,636 3,385 10,298 5,435
Occupancy, net12,586 13,101 11,943 25,687 23,891
Data processing7,804 7,925 7,138 15,729 13,657
Advertising and marketing8,726 5,150 6,941 13,876 10,720
Professional fees7,510 4,660 5,419 12,170 9,478
Amortization of other intangible assets1,141 1,164 1,248 2,305 2,546
FDIC insurance3,874 4,156 4,040 8,030 7,653
OREO expense, net739 1,665 1,348 2,404 1,908
Other19,091 17,343 19,306 36,434 34,632
Total non-interest expense183,544 168,118 170,969 351,662 324,699
Income before taxes101,946 88,018 79,971 189,964 158,468
Income tax expense37,049 29,640 29,930 66,689 59,316
Net income$64,897 $58,378 $50,041 $123,275 $99,152
Preferred stock dividends2,050 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 outstanding54,775 52,267 49,140 53,528 48,794
Dilutive potential common shares1,812 4,160 3,965 2,981 3,887
Average common shares and dilutive common shares56,587 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:
- Loans831 790 666 584 523 1,621 1,032
- Liquidity Management Assets866 907 815 963 932 1,773 1,852
- Other Earning Assets2 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 - FTE3.43% 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, net47 (55) 1,575 3,305 1,440 (8) 2,765
(H) Non-interest expense183,544 168,118 180,371 176,615 170,969 351,662 324,699
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 outstanding55,700 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 shares62,847 54,750 50,979 49,487 46,413 117,597 91,896
Add: After-tax intangible asset amortization726 771 716 677 781 1,497 1,593
(O) Tangible net income applicable to common shares63,573 55,521 51,695 50,164 47,194 119,094 93,489
Total average shareholders' equity2,800,905 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' equity2,639,877 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’ equity2,120,537 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 securities2,572,619 2,395,625 2,656,654 16,390 14,480 17,330 2.55 2.45 2.62
FHLB and FRB stock99,438 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 loans51,823 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 banks242,495 229,588 272,935
Other assets1,868,811 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 advances689,600 181,338 946,081 2,933 1,590 2,984 1.71 3.55 1.27
Other borrowings240,547 255,012 248,233 1,149 1,139 1,086 1.92 1.81 1.76
Subordinated notes139,007 138,980 138,898 1,786 1,772 1,777 5.14 5.10 5.12
Junior subordinated debentures253,566 253,566 253,566 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 deposits5,904,679 5,787,034 5,223,384
Other liabilities400,971 385,698 412,866
Equity2,800,905 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 securities2,484,611 2,638,911 30,870 35,440 2.51 2.70
FHLB and FRB stock96,779 111,990 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 loans54,505 125,442 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 banks236,077 266,139
Other assets1,849,058 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 advances436,873 885,592 4,523 5,870 2.09 1.33
Other borrowings247,740 252,809 2,288 2,144 1.86 1.71
Subordinated notes138,994 138,884 3,558 3,554 5.12 5.12
Junior subordinated debentures253,566 255,626 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 deposits5,845,083 5,081,565
Other liabilities393,377 394,943
Equity2,771,768 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, 20177.8% 4.0% (4.6)%
March 31, 20177.3% 3.9% (4.8)%
June 30, 20167.0% 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, 2017One year or less From one to five
years
Over five years
(Dollars in thousands) Total
Commercial
Fixed rate$155,364 $703,707 $470,295 $1,329,366
Variable rate5,067,733 7,288 1,902 5,076,923
Total commercial$5,223,097 $710,995 $472,197 $6,406,289
Commercial real estate
Fixed rate404,454 1,735,009 252,118 2,391,581
Variable rate3,978,265 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 rate5,962 4,657 63,208 73,827
Variable rate611,581 4,075 615,656
Total home equity$617,543 $8,732 $63,208 $689,483
Residential real estate
Fixed rate40,593 38,946 145,978 225,517
Variable rate54,493 180,457 302,343 537,293
Total residential real estate$95,086 $219,403 $448,321 $762,810
Premium finance receivables - commercial
Fixed rate2,560,924 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 rate17,174 34,370 1,370 52,914
Variable rate3,666,129 3,666,129
Total premium finance receivables - life insurance$3,683,303 $34,370 $1,370 $3,719,043
Consumer and other
Fixed rate54,315 13,124 3,536 70,975
Variable rate43,852 43,852
Total consumer and other$98,167 $13,124 $3,536 $114,827
Total per category
Fixed rate3,238,786 2,617,275 936,505 6,792,566
Variable rate13,422,053 222,888 305,825 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 LIBOR6,514,657
Three- month LIBOR500,408
Twelve- month LIBOR3,525,934
Other452,028
Total variable rate$13,950,766

A table accompanying this announcement can be found at:

http://www.globenewswire.com/NewsRoom/AttachmentNg/70320b5d-ceba-4871-96ef-5a079570adfc

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 Type2017 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 estate179
Premium finance receivables - commercial5,922 4,991 7,962 7,754 10,558
Premium finance receivables - life insurance1,046 2,024 3,717
Consumer and other63 104 144 60 163
Total loans past due greater than 90 days and still accruing7,210 7,219 11,997 7,814 10,956
Non-accrual loans:
Commercial10,191 14,307 15,875 16,418 16,801
Commercial real estate16,980 20,809 21,924 22,625 24,415
Home equity9,482 11,722 9,761 9,309 8,562
Residential real estate14,292 11,943 12,749 12,205 12,413
Premium finance receivables - commercial10,456 12,629 14,709 14,214 14,497
Premium finance receivables - life insurance
Consumer and other439 350 439 543 475
Total non-accrual loans61,840 71,760 75,457 75,314 77,163
Total non-performing loans:
Commercial10,191 14,407 16,049 16,418 17,036
Commercial real estate16,980 20,809 21,924 22,625 24,415
Home equity9,482 11,722 9,761 9,309 8,562
Residential real estate14,471 11,943 12,749 12,205 12,413
Premium finance receivables - commercial16,378 17,620 22,671 21,968 25,055
Premium finance receivables - life insurance1,046 2,024 3,717
Consumer and other502 454 583 603 638
Total non-performing loans$69,050 $78,979 $87,454 $83,128 $88,119
Other real estate owned16,853 17,090 17,699 19,933 22,154
Other real estate owned - from acquisitions22,508 22,774 22,583 15,117 15,909
Other repossessed assets532 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:
Commercial0.16% 0.24% 0.27% 0.28% 0.33%
Commercial real estate0.27 0.33 0.35 0.38 0.42
Home equity1.38 1.66 1.34 1.25 1.13
Residential real estate1.90 1.66 1.81 1.84 1.90
Premium finance receivables - commercial0.62 0.72 0.91 0.90 1.01
Premium finance receivables - life insurance0.03 0.06 0.11
Consumer and other0.44 0.38 0.48 0.50 0.50
Total loans, net of unearned income0.33% 0.40% 0.44% 0.44% 0.48%
Total non-performing assets as a percentage of total assets0.40% 0.46% 0.50% 0.47% 0.52%
Allowance for loan losses as a percentage of total non-performing loans187.68% 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.

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

Source:Wintrust Financial Corporation