Wintrust Financial Corporation Reports Record Second Quarter 2018 Net Income, an Increase of 38% Over Prior Year, and Year-to-Date Net Income of $171.6 million, an Increase of 39% Over Prior Year

ROSEMONT, Ill., July 17, 2018 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust” or “the Company”) (Nasdaq:WTFC) announced net income of $89.6 million or $1.53 per diluted common share for the second quarter of 2018 compared to net income of $82.0 million or $1.40 per diluted common share for the first quarter of 2018 and $64.9 million or $1.11 per diluted common share for the second quarter of 2017. The Company recorded net income of $171.6 million or $2.93 per diluted common share for the first six months of 2018 compared to net income of $123.3 million or $2.11 per diluted common share for the same period of 2017.

Highlights of the Second Quarter of 2018 *:

• Total assets increased by $1.0 billion from the prior quarter and now total $29.5 billion.
• Total deposits increased $1.1 billion from the prior quarter to $24.4 billion with non-interest bearing deposit accounts comprising 27% of total deposits.
• Total loans increased by $548 million from the prior quarter.
• Non-performing loans as a percentage of total loans decreased to 0.37% from 0.41% at the end of the prior quarter.
• Allowance for loan losses as a percentage of total non-performing loans remained strong, increasing to 172%.
• Net charge-offs decreased to $1.1 million, or two basis points of average total loans for the period.
• Provision for credit losses totaled $5.0 million in the second quarter compared to $8.3 million in the prior quarter.
• Net interest margin increased seven basis points and net interest income increased $13.1 million over the prior quarter.
• Return on average assets increased to 1.26% from 1.20% in the first quarter.  Return on average common equity increased to 11.94% from 11.29% in the first quarter.
• Mortgage banking revenue increased to $39.8 million, up $8.9 million over the first quarter of 2018 due to higher originations during the traditional spring purchase market and a full quarter's impact from the iFreedom Direct Corporation DBA Veterans First Mortgage ("Veterans First") acquisition, offset by lower production margins and smaller positive fair market value adjustment to mortgage servicing rights.
• Salaries and employee benefits increased $9.2 million from the most recent quarter due to a full quarter impact from the Veterans First acquisition as well as higher incentive compensation on variable pay based arrangements, commissions on mortgage originations and salaries due to the Company's growth.
• Opened five new branches, including three locations in Illinois and two locations in Wisconsin.

* See "Supplemental Financial Measures/Ratios" on pages 11-12 for more information on non-GAAP measures.

Edward J. Wehmer, President and Chief Executive Officer, commented, "Wintrust reported net income of $89.6 million for the second quarter of 2018, the tenth consecutive quarter of record net income, and net income of $171.6 million for the first six months of 2018. These results were driven by strong loan and deposit growth and an increased net interest margin as we continue to benefit from rising interest rates.  The second quarter of 2018 was also characterized by good credit quality metrics and increased mortgage banking revenue."
               
Mr. Wehmer continued, "We experienced strong loan growth within the commercial portfolio and premium finance receivables portfolios during the period. The commercial real estate portfolio remained relatively flat during the second quarter as elevated payoffs and paydowns offset new loan growth within the portfolio. We continue to take a measured approach in evaluating new commercial real estate loan opportunities due to supply and demand issues in the market place, pricing competition and easing of underwriting standards by some competitors. Overall, we grew our loan portfolio by $548 million during the second quarter of 2018. Our loan pipelines improved to the highest levels since the second quarter of 2017. The increased loan volume, continued improvement in net interest margin from rising interest rates and an additional day in the second quarter compared to the first quarter helped net interest income increase by $13.1 million in the second quarter of 2018. Deposit growth was strong in the second quarter of 2018 as deposits increased $1.1 billion and exceeded $24 billion as of the end of the quarter. Our deposit growth was primarily the result of growth in money market accounts and retail certificate of deposit accounts as active marketing campaigns began to take effect. Five branches added during the second quarter of 2018 contributed $134 million of retail deposit balances to this growth."

Commenting on credit quality, Mr. Wehmer noted, "During the second quarter of 2018, the Company continued its practice of addressing and resolving non-performing credits in a timely fashion. Net charge-offs totaled $1.1 million in the current quarter, decreasing $5.6 million from the first quarter of 2018. Additionally, net charge-offs as a percentage of average total loans decreased to two basis points from 13 basis points in the first quarter. Total non-performing assets decreased $7.5 million during the second quarter of 2018 resulting in non-performing assets as a percentage of total assets dropping from 0.44% to 0.40% during the period.  Total non-performing loans decreased $6.4 million in the second quarter of 2018 and now total $83.3 million, or 0.37% of total loans. As a percentage of non-performing loans, the allowance for loan losses increased to 172% at the end of the second quarter of 2018 from 156% at the end of the first quarter of 2018. We believe that the Company's reserves remain appropriate."

Mr. Wehmer further commented, "Mortgage banking revenue in the second quarter of 2018 totaled $39.8 million, an increase of $8.9 million compared to the first quarter of 2018. Mortgage loan origination volumes in the second quarter of 2018 increased to $1.1 billion from $779 million in the first quarter of 2018 as a result of higher purchase originations during the traditional spring purchase market and a full quarter's impact from the Veterans First acquisition. The increase in mortgage banking revenue from higher originations was tempered by lower production margins and smaller positive fair market value adjustment to mortgage servicing rights as interest rates increased less during the second quarter of 2018 when compared to the first quarter of 2018. Home purchases activity represented 80% of the volume for the second quarter of 2018 compared to 73% in the first quarter of 2018. Our mortgage pipeline remains relatively strong. With respect to production margin, we anticipate that it will decline slightly in the third quarter with stabilization in future periods. We continue to focus on efficiencies in our delivery channels and operating costs in our mortgage banking area."

Turning to the future, Mr. Wehmer stated, "Our growth engine continued its momentum into the second quarter of 2018 and we expect that to continue for the second half of the year. Loan growth at the end of the second quarter of 2018 should add to this momentum as period-end loan balances exceeded the second quarter average balance by $327 million. Wintrust continues to take a steady and measured approach to achieving our main objectives of growing franchise value, increasing profitability, leveraging our expense infrastructure and continuing to increase shareholder value. As our growth engine continues its momentum, we expect continued organic growth while still focusing on expense control. We remain well-positioned for a rising interest rate environment in the future, which, coupled with this loan growth, should continue to grow net interest income. Evaluating strategic acquisitions and organic branch growth will also be a part of our overall growth strategy with the goal of becoming Chicago’s bank and Wisconsin’s bank. To that end, the Company opened five new branches in the second quarter of 2018 and will continue to evaluate future locations in our market area including four expected branch openings in the third quarter of 2018. Our opportunities for both internal growth and external growth remain consistently strong."

The graphs below illustrate certain highlights of the second quarter of 2018.

http://resource.globenewswire.com/Resource/Download/67e63205-bcc4-4010-9f95-adb4dbc564db

Wintrust’s key operating measures and growth rates for the second quarter of 2018, as compared to the sequential and linked quarters, are shown in the table below:

														% or(4) basis point  (bp) change from 1st Quarter 2018				% or basis point  (bp) change from 2nd Quarter 2017
		Three Months Ended
(Dollars in thousands)		June 30,  2018				March 31,  2018				June 30,  2017
Net income		$	89,580			$	81,981			$	64,897			9		%		38		%
Net income per common share – diluted		$	1.53			$	1.40			$	1.11			9		%		38		%
Net revenue (1)		$	333,403			$	310,761			$	294,381			7		%		13		%
Net interest income		238,170				225,082				204,409				6		%		17		%
Net interest margin		3.61		%		3.54		%		3.41		%		7		bp		20		bp
Net interest margin - fully taxable equivalent (non-GAAP) (2)		3.63		%		3.56		%		3.43		%		7		bp		20		bp
Net overhead ratio (3)		1.57		%		1.58		%		1.44		%		(1	)	bp		13		bp
Return on average assets		1.26		%		1.20		%		1.00		%		6		bp		26		bp
Return on average common equity		11.94		%		11.29		%		9.55		%		65		bp		239		bp
Return on average tangible common equity (non-GAAP) (2)		14.72		%		14.02		%		12.02		%		70		bp		270		bp
At end of period
Total assets		$	29,464,588			$	28,456,772			$	26,929,265			14		%		9		%
Total loans, excluding covered loans		22,610,560				22,062,134				20,743,332				10		%		9		%
Total deposits		24,365,479				23,279,327				22,605,692				19		%		8		%
Total shareholders’ equity		3,106,871				3,031,250				2,839,458				10		%		9		%

1. Net revenue is net interest income plus non-interest income.
2. See "Supplemental Financial Measures/Ratios" for additional information on this performance measure/ratio.
3. The net overhead ratio is calculated by netting total non-interest expense and total non-interest income, annualizing this amount, and dividing by that period's average total assets. A lower ratio indicates a higher degree of efficiency.
4. Period-end balance sheet percentage changes are annualized.

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

WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights

		Three Months Ended												Six Months Ended
(Dollars in thousands, except per share data)		June 30,  2018				March 31,  2018				June 30,  2017				June 30,  2018				June 30,  2017
Selected Financial Condition Data (at end of period):
Total assets		$	29,464,588			$	28,456,772			$	26,929,265
Total loans, excluding covered loans		22,610,560				22,062,134				20,743,332
Total deposits		24,365,479				23,279,327				22,605,692
Junior subordinated debentures		253,566				253,566				253,566
Total shareholders’ equity		3,106,871				3,031,250				2,839,458
Selected Statements of Income Data:
Net interest income		$	238,170			$	225,082			$	204,409			$	463,252			$	396,989
Net revenue (1)		333,403				310,761				294,381				644,164				555,726
Net income		89,580				81,981				64,897				171,561				123,275
Net income per common share – Basic		$	1.55			$	1.42			$	1.15			$	2.98			$	2.20
Net income per common share – Diluted		$	1.53			$	1.40			$	1.11			$	2.93			$	2.11
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin		3.61		%		3.54		%		3.41		%		3.58		%		3.38		%
Net interest margin - fully taxable equivalent (non-GAAP) (2)		3.63		%		3.56		%		3.43		%		3.60		%		3.41		%
Non-interest income to average assets		1.34		%		1.25		%		1.39		%		1.29		%		1.25		%
Non-interest expense to average assets		2.90		%		2.83		%		2.83		%		2.87		%		2.77		%
Net overhead ratio (3)		1.57		%		1.58		%		1.44		%		1.58		%		1.52		%
Return on average assets		1.26		%		1.20		%		1.00		%		1.23		%		0.97		%
Return on average common equity		11.94		%		11.29		%		9.55		%		11.62		%		9.24		%
Return on average tangible common equity (non-GAAP) (2)		14.72		%		14.02		%		12.02		%		14.38		%		11.74		%
Average total assets		$	28,567,579			$	27,809,597			$	26,050,949			$	28,190,683			$	25,632,004
Average total shareholders’ equity		3,064,154				2,995,592				2,800,905				3,030,062				2,771,768
Average loans to average deposits ratio (excluding covered loans)		95.5		%		95.2		%		94.1		%		95.3		%		93.3		%
Period-end loans to deposits ratio (excluding covered loans)		92.8		%		94.8		%		91.8		%
Common Share Data at end of period:
Market price per common share		$	87.05			$	86.05			$	76.44
Book value per common share (2)		$	52.94			$	51.66			$	48.73
Tangible common book value per share (2)		$	43.50			$	42.17			$	39.40
Common shares outstanding		56,329,276				56,256,498				55,699,927
Other Data at end of period:(6)
Leverage Ratio (4)		9.4		%		9.3		%		9.2		%
Tier 1 capital to risk-weighted assets (4)		10.0		%		10.0		%		9.8		%
Common equity Tier 1 capital to risk-weighted assets (4)		9.5		%		9.5		%		9.3		%
Total capital to risk-weighted assets (4)		12.0		%		12.0		%		12.0		%
Allowance for credit losses (5)		$	144,645			$	140,746			$	131,296
Non-performing loans		83,282				89,690				69,050
Allowance for credit losses to total loans (5)		0.64		%		0.64		%		0.63		%
Non-performing loans to total loans		0.37		%		0.41		%		0.33		%
Number of:
Bank subsidiaries		15				15				15
Banking offices		162				157				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.
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,  2018				December 31,  2017				June 30,  2017
Assets
Cash and due from banks		$	304,580			$	277,534			$	296,105
Federal funds sold and securities purchased under resale agreements		62				57				56
Interest bearing deposits with banks		1,221,407				1,063,242				1,011,635
Available-for-sale securities, at fair value		1,940,787				1,803,666				1,649,636
Held-to-maturity securities, at amortized cost		890,834				826,449				793,376
Trading account securities		862				995				1,987
Equity securities with readily determinable fair value		37,839				—				—
Federal Home Loan Bank and Federal Reserve Bank stock		96,699				89,989				80,812
Brokerage customer receivables		16,649				26,431				23,281
Mortgage loans held-for-sale		455,712				313,592				382,837
Loans, net of unearned income, excluding covered loans		22,610,560				21,640,797				20,743,332
Covered loans		—				—				50,119
Total loans		22,610,560				21,640,797				20,793,451
Allowance for loan losses		(143,402		)		(137,905		)		(129,591		)
Allowance for covered loan losses		—				—				(1,074		)
Net loans		22,467,158				21,502,892				20,662,786
Premises and equipment, net		639,345				621,895				605,211
Lease investments, net		194,160				212,335				191,248
Accrued interest receivable and other assets		666,673				567,374				577,359
Trade date securities receivable		450				90,014				133,130
Goodwill		509,957				501,884				500,260
Other intangible assets		21,414				17,621				19,546
Total assets		$	29,464,588			$	27,915,970			$	26,929,265
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing		$	6,520,724			$	6,792,497			$	6,294,052
Interest bearing		17,844,755				16,390,850				16,311,640
Total deposits		24,365,479				23,183,347				22,605,692
Federal Home Loan Bank advances		667,000				559,663				318,270
Other borrowings		255,701				266,123				277,710
Subordinated notes		139,148				139,088				139,029
Junior subordinated debentures		253,566				253,566				253,566
Trade date securities payable		—				—				5,151
Accrued interest payable and other liabilities		676,823				537,244				490,389
Total liabilities		26,357,717				24,939,031				24,089,807
Shareholders’ Equity:
Preferred stock		125,000				125,000				125,000
Common stock		56,437				56,068				55,802
Surplus		1,547,511				1,529,035				1,511,080
Treasury stock		(5,355		)		(4,986		)		(4,884		)
Retained earnings		1,464,494				1,313,657				1,198,997
Accumulated other comprehensive loss		(81,216		)		(41,835		)		(46,537		)
Total shareholders’ equity		3,106,871				2,976,939				2,839,458
Total liabilities and shareholders’ equity		$	29,464,588			$	27,915,970			$	26,929,265

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended												Six Months Ended
(In thousands, except per share data)	June 30,  2018				March 31,  2018				June 30,  2017				June 30,  2018				June 30,  2017
Interest income
Interest and fees on loans	255,063				234,994				209,289				490,057				406,205
Mortgage loans held-for-sale	4,226				2,818				3,420				7,044				5,818
Interest bearing deposits with banks	3,243				2,796				1,634				6,039				3,257
Federal funds sold and securities purchased under resale agreements	1				—				1				1				2
Investment securities	19,888				19,128				15,524				39,016				29,097
Trading account securities	4				14				4				18				15
Federal Home Loan Bank and Federal Reserve Bank stock	1,455				1,298				1,153				2,753				2,223
Brokerage customer receivables	167				157				156				324				323
Total interest income	284,047				261,205				231,181				545,252				446,940
Interest expense
Interest on deposits	35,293				26,549				18,471				61,842				34,741
Interest on Federal Home Loan Bank advances	4,263				3,639				2,933				7,902				4,523
Interest on other borrowings	1,698				1,699				1,149				3,397				2,288
Interest on subordinated notes	1,787				1,773				1,786				3,560				3,558
Interest on junior subordinated debentures	2,836				2,463				2,433				5,299				4,841
Total interest expense	45,877				36,123				26,772				82,000				49,951
Net interest income	238,170				225,082				204,409				463,252				396,989
Provision for credit losses	5,043				8,346				8,891				13,389				14,100
Net interest income after provision for credit losses	233,127				216,736				195,518				449,863				382,889
Non-interest income
Wealth management	22,617				22,986				19,905				45,603				40,053
Mortgage banking	39,834				30,960				35,939				70,794				57,877
Service charges on deposit accounts	9,151				8,857				8,696				18,008				16,961
Gains (losses) on investment securities, net	12				(351		)		47				(339		)		(8		)
Fees from covered call options	669				1,597				890				2,266				1,649
Trading gains (losses), net	124				103				(420		)		227				(740		)
Operating lease income, net	8,746				9,691				6,805				18,437				12,587
Other	14,080				11,836				18,110				25,916				30,358
Total non-interest income	95,233				85,679				89,972				180,912				158,737
Non-interest expense
Salaries and employee benefits	121,675				112,436				106,502				234,111				205,818
Equipment	10,527				10,072				9,909				20,599				18,911
Operating lease equipment depreciation	6,940				6,533				5,662				13,473				10,298
Occupancy, net	13,663				13,767				12,586				27,430				25,687
Data processing	8,752				8,493				7,804				17,245				15,729
Advertising and marketing	11,782				8,824				8,726				20,606				13,876
Professional fees	6,484				6,649				7,510				13,133				12,170
Amortization of other intangible assets	997				1,004				1,141				2,001				2,305
FDIC insurance	4,598				4,362				3,874				8,960				8,030
OREO expense, net	980				2,926				739				3,906				2,404
Other	20,371				19,283				19,091				39,654				36,434
Total non-interest expense	206,769				194,349				183,544				401,118				351,662
Income before taxes	121,591				108,066				101,946				229,657				189,964
Income tax expense	32,011				26,085				37,049				58,096				66,689
Net income	$	89,580			$	81,981			$	64,897			$	171,561			$	123,275
Preferred stock dividends	2,050				2,050				2,050				4,100				5,678
Net income applicable to common shares	$	87,530			$	79,931			$	62,847			$	167,461			$	117,597
Net income per common share - Basic	$	1.55			$	1.42			$	1.15			$	2.98			$	2.20
Net income per common share - Diluted	$	1.53			$	1.40			$	1.11			$	2.93			$	2.11
Cash dividends declared per common share	$	0.19			$	0.19			$	0.14			$	0.38			$	0.28
Weighted average common shares outstanding	56,299				56,137				54,775				56,218				53,528
Dilutive potential common shares	928				888				1,812				909				2,981
Average common shares and dilutive common shares	57,227				57,025				56,587				57,127				56,509

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,  2018				March 31,  2018				June 30,  2017				June 30,  2018				June 30,  2017
Net income			$	89,580			$	81,981			$	64,897			$	171,561			$	123,275
Less: Preferred stock dividends			2,050				2,050				2,050				4,100				5,678
Net income applicable to common shares—Basic	(A)		87,530				79,931				62,847				167,461				117,597
Add: Dividends on convertible preferred stock, if dilutive			—				—				—				—				1,578
Net income applicable to common shares—Diluted	(B)		87,530				79,931				62,847				167,461				119,175
Weighted average common shares outstanding	(C)		56,299				56,137				54,775				56,218				53,528
Effect of dilutive potential common shares:
Common stock equivalents			928				888				927				909				994
Convertible preferred stock, if dilutive			—				—				885				—				1,987
Weighted average common shares and effect of dilutive potential common shares	(D)		57,227				57,025				56,587				57,127				56,509
Net income per common share:
Basic	(A/C)		$	1.55			$	1.42			$	1.15			$	2.98			$	2.20
Diluted	(B/D)		$	1.53			$	1.40			$	1.11			$	2.93			$	2.11

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

SUPPLEMENTAL FINANCIAL MEASURES/RATIOS

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

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent (“FTE”) basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax rates effective as of the end of the period. 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)	2018				2018				2017				2017				2017				2018				2017
Calculation of Net Interest Margin and Efficiency Ratio
(A) Interest Income (GAAP)	$	284,047			$	261,205			$	251,840			$	247,688			$	231,181			$	545,252			$	446,940
Taxable-equivalent adjustment:
- Loans	812				670				1,106				1,033				831				1,482				1,621
- Liquidity Management Assets	566				531				1,019				921				866				1,097				1,773
- Other Earning Assets	1				3				2				5				2				4				7
(B) Interest Income - FTE	$	285,426			$	262,409			$	253,967			$	249,647			$	232,880			$	547,835			$	450,341
(C) Interest Expense (GAAP)	45,877				36,123				32,741				31,700				26,772				82,000				49,951
(D) Net Interest Income - FTE (B minus C)	$	239,549			$	226,286			$	221,226			$	217,947			$	206,108			$	465,835			$	400,390
(E) Net Interest Income (GAAP) (A minus C)	$	238,170			$	225,082			$	219,099			$	215,988			$	204,409			$	463,252			$	396,989
Net interest margin (GAAP-derived)	3.61		%		3.54		%		3.45		%		3.43		%		3.41		%		3.58		%		3.38		%
Net interest margin - FTE	3.63		%		3.56		%		3.49		%		3.46		%		3.43		%		3.60		%		3.41		%
(F) Non-interest income	$	95,233			$	85,679			$	81,038			$	79,731			$	89,972			$	180,912			$	158,737
(G) Gains (losses) on investment securities, net	12				(351		)		14				39				47				(339		)		(8		)
(H) Non-interest expense	206,769				194,349				196,580				183,575				183,544				401,118				351,662
Efficiency ratio (H/(E+F-G))	62.02		%		62.47		%		65.50		%		62.09		%		62.36		%		62.24		%		63.28		%
Efficiency ratio - FTE (H/(D+F-G))	61.76		%		62.23		%		65.04		%		61.68		%		62.00		%		61.99		%		62.89		%
Calculation of Tangible Common Equity ratio (at period end)
Total shareholders’ equity	$	3,106,871			$	3,031,250			$	2,976,939			$	2,908,925			$	2,839,458
Less: Non-convertible preferred stock	(125,000		)		(125,000		)		(125,000		)		(125,000		)		(125,000		)
Less: Intangible assets	(531,371		)		(533,910		)		(519,505		)		(520,672		)		(519,806		)
(I) Total tangible common shareholders’ equity	$	2,450,500			$	2,372,340			$	2,332,434			$	2,263,253			$	2,194,652
Total assets	$	29,464,588			$	28,456,772			$	27,915,970			$	27,358,162			$	26,929,265
Less: Intangible assets	(531,371		)		(533,910		)		(519,505		)		(520,672		)		(519,806		)
(J) Total tangible assets	$	28,933,217			$	27,922,862			$	27,396,465			$	26,837,490			$	26,409,459
Tangible common equity ratio (I/J)	8.5		%		8.5		%		8.5		%		8.4		%		8.3		%
Calculation of book value per share
Total shareholders’ equity	$	3,106,871			$	3,031,250			$	2,976,939			$	2,908,925			$	2,839,458
Less: Preferred stock	(125,000		)		(125,000		)		(125,000		)		(125,000		)		(125,000		)
(K) Total common equity	$	2,981,871			$	2,906,250			$	2,851,939			$	2,783,925			$	2,714,458
(L) Actual common shares outstanding	56,329				56,256				55,965				55,838				55,700
Book value per common share (K/L)	$	52.94			$	51.66			$	50.96			$	49.86			$	48.73
Tangible common book value per share (I/L)	$	43.50			$	42.17			$	41.68			$	40.53			$	39.40

Calculation of return on average common equity
(M) Net income applicable to common shares	$	87,530			$	79,931			$	66,731			$	63,576			$	62,847			$	167,461			$	117,597
Add: After-tax intangible asset amortization	734				761				738				672				726				1,495				1,497
(N) Tangible net income applicable to common shares	$	88,264			$	80,692			$	67,469			$	64,248			$	63,573			$	168,956			$	119,094
Total average shareholders' equity	$	3,064,154			$	2,995,592			$	2,942,999			$	2,882,682			$	2,800,905			$	3,030,062			$	2,771,768
Less: Average preferred stock	(125,000		)		(125,000		)		(125,000		)		(125,000		)		(161,028		)		(125,000		)		(205,893		)
(O) Total average common shareholders' equity	$	2,939,154			$	2,870,592			$	2,817,999			$	2,757,682			$	2,639,877			$	2,905,062			$	2,565,875
Less: Average intangible assets	(533,496		)		(536,676		)		(519,626		)		(520,333		)		(519,340		)		(535,077		)		(519,840		)
(P) Total average tangible common shareholders’ equity	$	2,405,658			$	2,333,916			$	2,298,373			$	2,237,349			$	2,120,537			$	2,369,985			$	2,046,035
Return on average common equity, annualized  (M/O)	11.94		%		11.29		%		9.39		%		9.15		%		9.55		%		11.62		%		9.24		%
Return on average tangible common equity, annualized (N/P)	14.72		%		14.02		%		11.65		%		11.39		%		12.02		%		14.38		%		11.74		%

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking unit, 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 2018, revenue within this unit was primarily driven by increased net interest income due to a higher net interest margin, increased earning assets and one additional day in the second quarter. The net interest margin increased in the second quarter of 2018 compared to the first quarter of 2018 primarily as a result of higher yields on the commercial and commercial real estate loan portfolios (excluding lease loans) and the liquidity management assets portfolio, partially offset by higher rates on interest-bearing liabilities. Mortgage banking revenue increased by $8.9 million from $31.0 million for the first quarter of 2018 to $39.8 million for the second quarter of 2018. The higher revenue was primarily due to originations during the current period increasing to $1.1 billion from $778.9 million in the first quarter of 2018 as a result of typical seasonality in our primary markets and one full quarter's impact of Veterans First. Home purchases represented 80% of loan origination volume for the second quarter of 2018. The increase in revenue from higher originations was tempered by lower production margins and smaller positive fair market value adjustment to mortgage servicing rights as interest rates increased less during the second quarter of 2018 when compared to the first quarter of 2018. The Company's gross commercial and commercial real estate loan pipelines remain strong. Before the impact of scheduled payments and prepayments, at June 30, 2018, gross commercial and commercial real estate loan pipelines totaled $1.3 billion, or $847.4 million when adjusted for the probability of closing, compared to $1.1 billion, or $688.4 million when adjusted for the probability of closing, at March 31, 2018.

Specialty Finance

Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries and accounts receivable financing, value-added, out-sourced administrative services, and other services. In the second quarter of 2018, 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 $2.1 billion during the second quarter of 2018 resulted in a $232.2 million increase in average balances. The increase in average balances along with higher yields on these loans resulted in a $5.3 million increase in interest income attributed to this portfolio. The Company's leasing business remained steady during the second quarter of 2018, with its portfolio of assets, including capital leases, loans and equipment on operating leases, totaling $1.0 billion at the end of the second quarter of 2018. Revenues from the Company's out-sourced administrative services business remained steady, totaling approximately $1.2 million in the second quarter of 2018 and $1.1 million in the first quarter of 2018.

Wealth Management

Through three separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, asset management, securities brokerage services and 401(k) and retirement plan services. Wealth management revenue slightly decreased in the second quarter of 2018 to $22.6 million from $23.0 million in the first quarter of 2018. The decrease in revenue was primarily due to a decrease in brokerage fees due to a reduction in trading activity during the period. At June 30, 2018, the Company’s wealth management subsidiaries had approximately $24.6 billion of assets under administration, which includes $2.9 billion of assets owned by the Company and its subsidiary banks, representing a $299.0 million increase from the $24.3 billion of assets under administration at March 31, 2018. This increase in assets under administration was primarily driven by new customers and market appreciation. Starting in August, our brokerage services subsidiary, Wayne Hummer Investments, LLC, will be  renamed to Wintrust Investments, LLC to better align with our Wintrust brand.

LOANS

Loan Portfolio Mix and Growth Rates

														% Growth
(Dollars in thousands)		June 30,  2018				December 31,  2017				June 30,  2017				From (1) December 31, 2017			From June 30, 2017
Balance:
Commercial		$	7,289,060			$	6,787,677			$	6,406,289			15	%		14	%
Commercial real estate		6,575,084				6,580,618				6,402,494				—			3
Home equity		593,500				663,045				689,483				(21	)		(14	)
Residential real estate		895,470				832,120				762,810				15			17
Premium finance receivables - commercial		2,833,452				2,634,565				2,648,386				15			7
Premium finance receivables - life insurance		4,302,288				4,035,059				3,719,043				13			16
Consumer and other		121,706				107,713				114,827				26			6
Total loans, net of unearned income, excluding covered loans		$	22,610,560			$	21,640,797			$	20,743,332			9	%		9	%
Covered loans		—				—				50,119				—			(100	)
Total loans, net of unearned income		$	22,610,560			$	21,640,797			$	20,793,451			9	%		9	%
Mix:
Commercial		32		%		31		%		31		%
Commercial real estate		29				30				31
Home equity		3				3				3
Residential real estate		4				4				3
Premium finance receivables - commercial		12				12				13
Premium finance receivables - life insurance		19				19				18
Consumer and other		1				1				1
Total loans, net of unearned income, excluding covered loans		100		%		100		%		100		%
Covered loans		—				—				—
Total loans, net of unearned income		100		%		100		%		100		%

(1)  Annualized

Commercial and Commercial Real Estate Loan Portfolios

		As of June 30, 2018
						% 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		$	4,621,789			33.2	%		$	13,543			$	—			$	39,704
Franchise		957,339				6.9			2,438				—				8,743
Mortgage warehouse lines of credit		200,060				1.4			—				—				1,598
Asset-based lending		1,042,755				7.5			2,158				—				8,958
Leases		458,614				3.3			249				—				1,237
PCI - commercial loans (1)		8,503				0.1			—				882				487
Total commercial		$	7,289,060			52.4	%		$	18,388			$	882			$	60,727
Commercial Real Estate:
Construction		$	807,235			5.8	%		$	1,554			$	—			$	9,337
Land		115,357				0.8			228				—				3,716
Office		894,349				6.5			1,333				—				5,971
Industrial		882,525				6.4			185				—				5,902
Retail		867,639				6.3			11,540				—				8,085
Multi-family		952,048				6.9			342				—				9,688
Mixed use and other		1,949,242				14.1			4,013				—				14,859
PCI - commercial real estate (1)		106,689				0.8			—				3,194				102
Total commercial real estate		$	6,575,084			47.6	%		$	19,195			$	3,194			$	57,660
Total commercial and commercial real estate		$	13,864,144			100.0	%		$	37,583			$	4,076			$	118,387
Commercial real estate - collateral location by state:
Illinois		$	5,100,132			77.6	%
Wisconsin		726,874				11.1
Total primary markets		$	5,827,006			88.7	%
Indiana		153,807				2.3
Florida		51,143				0.8
Arizona		55,171				0.8
Michigan		45,670				0.7
California		68,459				1.0
Other (no individual state greater than 0.6%)		373,828				5.7
Total		$	6,575,084			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,  2018				December 31,  2017				June 30,  2017				From (1) December 31, 2017			From June 30, 2017
Balance:
Non-interest bearing		$	6,520,724			$	6,792,497			$	6,294,052			(8	)%		4	%
NOW and interest bearing demand deposits		2,452,474				2,315,055				2,459,238				12			—
Wealth management deposits (2)		2,523,572				2,323,699				2,464,162				17			2
Money market		5,205,678				4,515,353				4,449,385				31			17
Savings		2,763,062				2,829,373				2,419,463				(5	)		14
Time certificates of deposit		4,899,969				4,407,370				4,519,392				23			8
Total deposits		$	24,365,479			$	23,183,347			$	22,605,692			10	%		8	%
Mix:
Non-interest bearing		27		%		29		%		28		%
NOW and interest bearing demand deposits		10				10				11
Wealth management deposits (2)		11				10				11
Money market		21				20				19
Savings		11				12				11
Time certificates of deposit		20				19				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, 2018

(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		$	—			$	36,755			$	112,055			$	698,040			$	846,850			1.02	%
4-6 months		75,008				25,935				—				735,477				836,420				1.31	%
7-9 months		—				16,035				—				715,993				732,028				1.40	%
10-12 months		249				21,114				—				761,277				782,640				1.59	%
13-18 months		—				22,937				—				706,818				729,755				1.61	%
19-24 months		—				13,810				—				631,437				645,247				2.18	%
24+ months		1,000				9,124				—				316,905				327,029				1.87	%
Total		$	76,257			$	145,710			$	112,055			$	4,565,947			$	4,899,969			1.52	%

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 2018 compared to the first quarter of 2018 (sequential quarters) and second quarter of 2017 (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,  2018				March 31,  2018				June 30,  2017				June 30,  2018				March 31,  2018				June 30,  2017				June 30,  2018			March 31,  2018			June 30,  2017
Interest-bearing deposits with banks and cash equivalents(1)	$	759,425			$	749,973			$	722,349			$	3,244			$	2,796			$	1,635			1.71	%		1.51	%		0.91	%
Investment securities(2)	2,890,828				2,892,617				2,572,619				20,454				19,659				16,390				2.84			2.76			2.55
FHLB and FRB stock	115,119				105,414				99,438				1,455				1,298				1,153				5.07	%		4.99			4.66
Liquidity management assets(3)(8)	$	3,765,372			$	3,748,004			$	3,394,406			$	25,153			$	23,753			$	19,178			2.68	%		2.57	%		2.27	%
Other earning assets(3)(4)(8)	21,244				27,571				25,749				172				174				162				3.24			2.56			2.53
Mortgage loans held-for-sale	403,967				281,181				334,843				4,226				2,818				3,420				4.20			4.06			4.10
Loans, net of unearned income(3)(5)(8)	22,283,541				21,711,342				20,264,875				255,875				235,664				209,472				4.61			4.40			4.15
Covered loans	—				—				51,823				—				—				648				—			—			5.01
Total earning assets(8)	$	26,474,124			$	25,768,098			$	24,071,696			$	285,426			$	262,409			$	232,880			4.32	%		4.13	%		3.88	%
Allowance for loan and covered loan losses	(147,192		)		(143,108		)		(132,053		)
Cash and due from banks	270,240				254,489				242,495
Other assets	1,970,407				1,930,118				1,868,811
Total assets	$	28,567,579			$	27,809,597			$	26,050,949
NOW and interest bearing demand deposits	$	2,295,268			$	2,255,692			$	2,470,130			$	1,901			$	1,386			$	1,214			0.33	%		0.25	%		0.20	%
Wealth management deposits	2,365,191				2,250,139				2,091,251				6,992				5,441				2,867				1.19			0.98			0.55
Money market accounts	4,883,645				4,520,620				4,435,670				8,111				4,667				2,707				0.67			0.42			0.24
Savings accounts	2,702,665				2,813,772				2,329,195				2,709				2,732				1,508				0.40			0.39			0.26
Time deposits	4,557,187				4,322,111				4,295,428				15,580				12,323				10,175				1.37			1.16			0.95
Interest-bearing deposits	$	16,803,956			$	16,162,334			$	15,621,674			$	35,293			$	26,549			$	18,471			0.84	%		0.67	%		0.47	%
Federal Home Loan Bank advances	1,006,407				872,811				689,600				4,263				3,639				2,933				1.70			1.69			1.71
Other borrowings	240,066				263,125				240,547				1,698				1,699				1,149				2.84			2.62			1.92
Subordinated notes	139,125				139,094				139,007				1,787				1,773				1,786				5.14			5.10			5.14
Junior subordinated debentures	253,566				253,566				253,566				2,836				2,463				2,433				4.42			3.89			3.80
Total interest-bearing liabilities	$	18,443,120			$	17,690,930			$	16,944,394			$	45,877			$	36,123			$	26,772			1.00	%		0.83	%		0.63	%
Non-interest bearing deposits	6,539,731				6,639,845				5,904,679
Other liabilities	520,574				483,230				400,971
Equity	3,064,154				2,995,592				2,800,905
Total liabilities and shareholders’ equity	$	28,567,579			$	27,809,597			$	26,050,949
Interest rate spread(6)(8)																									3.32	%		3.30	%		3.25	%
Less:  Fully tax-equivalent adjustment													(1,379		)		(1,204		)		(1,699		)		(0.02	)		(0.02	)		(0.02	)
Net free funds/contribution(7)	$	8,031,004			$	8,077,168			$	7,127,302															0.31			0.26			0.18
Net interest income/ margin(8)  (GAAP)													$	238,170			$	225,082			$	204,409			3.61	%		3.54	%		3.41	%
Fully tax-equivalent adjustment													1,379				1,204				1,699				0.02			0.02			0.02
Net interest income/ margin - FTE (8)													$	239,549			$	226,286			$	206,108			3.63	%		3.56	%		3.43	%

1. Includes interest-bearing deposits from banks, federal funds sold and securities purchased under resale agreements.
2. Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
3. Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period. The total adjustments for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017 were $1.4 million, $1.2 million and $1.7 million, respectively.
4. Other earning assets include brokerage customer receivables and trading account securities.
5. Loans, net of unearned income, include non-accrual loans.
6. Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
7. 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.
8. See “Supplemental Financial Measures/Ratios” for additional information on this performance ratio.

For the second quarter of 2018, net interest income totaled $238.2 million, an increase of $13.1 million as compared to the first quarter of 2018 and an increase of $33.8 million as compared to the second quarter of 2017. Net interest margin was 3.61% (3.63% on a fully tax-equivalent basis) during the second quarter of 2018 compared to 3.54% (3.56% on a fully tax-equivalent basis) during the first quarter of 2018 and 3.41% (3.43% on a fully tax-equivalent basis) during the second quarter of 2017. The $13.1 million increase in net interest income in the second quarter of 2018 compared to the first quarter of 2018 was attributable to a $6.2 million increase from higher levels of earning assets, a $4.4 million increase from rising rates and a $2.5 million increase due to one more day in the quarter.

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, 2018 compared to six months ended June 30, 2017:

	Average Balance  for six months ended,								Interest  for six months ended,								Yield/Rate   for six months ended,
(Dollars in thousands)	June 30,  2018				June 30,  2017				June 30,  2018				June 30,  2017				June 30,  2018			June 30,  2017
Interest-bearing deposits with banks and cash equivalents (1)	$	754,725			$	751,389			$	6,040			$	3,259			1.61	%		0.87	%
Investment securities (2)	2,891,718				2,484,611				40,113				30,870				2.80			2.51
FHLB and FRB stock	110,293				96,779				2,753				2,223				5.04			4.64
Liquidity management assets(3)(8)	$	3,756,736			$	3,332,779			$	48,906			$	36,352			2.63	%		2.20	%
Other earning assets(3)(4)(8)	24,390				25,494				346				345				2.86			2.73
Mortgage loans held-for-sale	342,914				302,021				7,044				5,818				4.14			3.88
Loans, net of unearned income(3)(5)(8)	21,999,022				19,961,821				491,539				406,260				4.51			4.10
Covered loans	—				54,505				—				1,566				—			5.79
Total earning assets(8)	$	26,123,062			$	23,676,620			$	547,835			$	450,341			4.23	%		3.84	%
Allowance for loan and covered loan losses	(145,161		)		(129,751		)
Cash and due from banks	262,408				236,077
Other assets	1,950,374				1,849,058
Total assets	$	28,190,683			$	25,632,004
NOW and interest bearing demand deposits	$	2,275,589			$	2,491,247			$	3,286			$	2,307			0.29	%		0.19	%
Wealth management deposits	2,307,983				2,086,793				12,433				5,179				1.09			0.50
Money market accounts	4,703,135				4,421,863				12,778				4,928				0.55			0.22
Savings accounts	2,757,911				2,278,392				5,440				2,837				0.40			0.25
Time deposits	4,440,299				4,266,308				27,905				19,490				1.27			0.92
Interest-bearing deposits	$	16,484,917			$	15,544,603			$	61,842			$	34,741			0.76	%		0.45	%
Federal Home Loan Bank advances	939,978				436,873				7,902				4,523				1.70			2.09
Other borrowings	251,532				247,740				3,397				2,288				2.72			1.86
Subordinated notes	139,110				138,994				3,560				3,558				5.12			5.12
Junior subordinated debentures	253,566				253,566				5,299				4,841				4.16			3.80
Total interest-bearing liabilities	$	18,069,103			$	16,621,776			$	82,000			$	49,951			0.91	%		0.60	%
Non-interest bearing deposits	6,589,511				5,845,083
Other liabilities	502,007				393,377
Equity	3,030,062				2,771,768
Total liabilities and shareholders’ equity	$	28,190,683			$	25,632,004
Interest rate spread(6)(8)																	3.32	%		3.24	%
Less:  Fully tax-equivalent adjustment									(2,583		)		(3,401		)		(0.02	)		(0.03	)
Net free funds/contribution(7)	$	8,053,959			$	7,054,844											0.28			0.17
Net interest income/ margin(8)  (GAAP)									$	463,252			$	396,989			3.58	%		3.38	%
Fully tax-equivalent adjustment									2,583				3,401				0.02			0.03
Net interest income/ margin - FTE (8)									$	465,835			$	400,390			3.60	%		3.41	%

1. Includes interest-bearing deposits from banks, federal funds sold and securities purchased under resale agreements.
2. Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
3. Interest income on tax-advantaged loans, trading securities and investment securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate in effect as of the applicable period. The total adjustments for the six months ended June 30, 2018 and 2017 were $2.6 million and $3.4 million respectively.
4. Other earning assets include brokerage customer receivables and trading account securities.
5. Loans, net of unearned income, include non-accrual loans.
6. Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
7. 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.
8. See “Supplemental Financial Measures/Ratios” for additional information on this performance ratio.

For the first six months of 2018 net interest income totaled $463.3 million, an increase of $66.3 million as compared to the first six months of 2017. Net interest margin was 3.58% (3.60% on a fully tax-equivalent basis) for the first six months of 2018 compared to 3.38% (3.41% on a fully tax-equivalent basis) for the first six months of 2017. The $66.3 million increase in net interest income in the first six months of 2018 compared to the same period of 2017 was attributable to a $39.0 million increase from higher levels of earning assets and a $27.3 million increase from rising rates.

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, 2018, March 31, 2018 and June 30, 2017 is as follows:

Static Shock Scenario		+200 Basis Points			+100  Basis  Points			-100 Basis Points
June 30, 2018		19.3	%		9.7	%		(10.7	)%
March 31, 2018		18.8	%		9.7	%		(11.6	)%
June 30, 2017		19.3	%		10.4	%		(13.5	)%

Ramp Scenario	+200 Basis Points			+100 Basis Points			-100 Basis Points
June 30, 2018	8.7	%		4.5	%		(4.4	)%
March 31, 2018	9.0	%		4.6	%		(4.8	)%
June 30, 2017	7.8	%		4.0	%		(4.6	)%

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 at June 30, 2018 by date at which the loans reprice or mature, and the type of rate exposure:

As of June 30, 2018	One year or less				From one to five years				Over five years
(Dollars in thousands)													Total
Commercial
Fixed rate	$	146,138			$	919,964			$	611,043			$	1,677,145
Variable rate	5,608,722				3,193				—				5,611,915
Total commercial	$	5,754,860			$	923,157			$	611,043			$	7,289,060
Commercial real estate
Fixed rate	391,292				1,793,231				267,142				2,451,665
Variable rate	4,093,746				29,522				151				4,123,419
Total commercial real estate	$	4,485,038			$	1,822,753			$	267,293			$	6,575,084
Home equity
Fixed rate	10,778				7,900				25,751				44,429
Variable rate	549,071				—				—				549,071
Total home equity	$	559,849			$	7,900			$	25,751			$	593,500
Residential real estate
Fixed rate	39,358				26,430				197,436				263,224
Variable rate	62,023				246,611				323,612				632,246
Total residential real estate	$	101,381			$	273,041			$	521,048			$	895,470
Premium finance receivables - commercial
Fixed rate	2,755,795				77,657				—				2,833,452
Variable rate	—				—				—				—
Total premium finance receivables - commercial	$	2,755,795			$	77,657			$	—			$	2,833,452
Premium finance receivables - life insurance
Fixed rate	12,778				2,855				3,937				19,570
Variable rate	4,282,718				—				—				4,282,718
Total premium finance receivables - life insurance	$	4,295,496			$	2,855			$	3,937			$	4,302,288
Consumer and other
Fixed rate	68,038				11,498				2,496				82,032
Variable rate	39,674				—				—				39,674
Total consumer and other	$	107,712			$	11,498			$	2,496			$	121,706
Total per category
Fixed rate	3,424,177				2,839,535				1,107,805				7,371,517
Variable rate	14,635,954				279,326				323,763				15,239,043
Total loans, net of unearned income	$	18,060,131			$	3,118,861			$	1,431,568			$	22,610,560
Variable Rate Loan Pricing by Index:
Prime	$	2,596,588
One- month LIBOR	7,538,044
Three- month LIBOR	482,723
Twelve- month LIBOR	4,384,194
Other	237,494
Total variable rate	$	15,239,043

http://resource.globenewswire.com/Resource/Download/3da6161d-7cc3-4410-a2cd-6b0d8c6821bf

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to LIBOR indices which, as shown in the table above, do not mirror the same increases as the Prime rate when the Federal Reserve raises interest rates.  Specifically, the Company has $7.5 billion of variable rate loans tied to one-month LIBOR and $4.4 billion of variable rate loans tied to twelve-month LIBOR. The above chart shows:

		Changes in
		Prime		1-month LIBOR		12-month LIBOR
Third Quarter 2017		0 bps		+1 bps		+4 bps
Fourth Quarter 2017		+25 bps		+33 bps		+33 bps
First Quarter 2018		+25 bps		+32 bps		+55 bps
Second Quarter 2018		+25 bps		+21 bps		+10 bps

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 2018 compared to Q1 2018										Q2 2018 compared to Q2 2017
(Dollars in thousands)		2018						2018						2017						$ Change						% Change				$ Change						% Change
Brokerage		$			5,784			$			6,031			$			5,449			$			(247	)		(4		)%		$			335			6		%
Trust and asset management		16,833						16,955						14,456						(122				)		(1		)		2,377						16
Total wealth management		22,617						22,986						19,905						(369				)		(2		)		2,712						14
Mortgage banking		39,834						30,960						35,939						8,874						29				3,895						11
Service charges on deposit accounts		9,151						8,857						8,696						294						3				455						5
Gains (losses) on investment securities, net		12						(351				)		47						363						NM				(35				)		(74		)
Fees from covered call options		669						1,597						890						(928				)		(58		)		(221				)		(25		)
Trading gains (losses), net		124						103						(420				)		21						20				544						NM
Operating lease income, net		8,746						9,691						6,805						(945				)		(10		)		1,941						29
Other:
Interest rate swap fees		3,829						2,237						2,221						1,592						71				1,608						72
BOLI		1,544						714						888						830						NM				656						74
Administrative services		1,205						1,061						986						144						14				219						22
Early pay-offs of capital leases		554						33						10						521						NM				544						NM
Miscellaneous		6,948						7,791						14,005						(843				)		(11		)		(7,057				)		(50		)
Total Other		14,080						11,836						18,110						2,244						19				(4,030				)		(22		)
Total Non-Interest Income		$			95,233			$			85,679			$			89,972			$			9,554			11		%		$			5,261			6		%

		Six Months Ended
		June 30,							June 30,				$						%
(Dollars in thousands)		2018							2017				Change						Change
Brokerage		11,815							11,669				$			146			1		%
Trust and asset management		33,788							28,384				5,404						19
Total wealth management		45,603							40,053				5,550						14
Mortgage banking		70,794							57,877				12,917						22
Service charges on deposit accounts		18,008							16,961				1,047						6
Losses on investment securities, net		(339					)		(8		)		(331				)		NM
Fees from covered call options		2,266							1,649				617						37
Trading gains (losses), net		227							(740		)		967						NM
Operating lease income, net		18,437							12,587				5,850						46
Other:
Interest rate swap fees		6,066							3,654				2,412						66
BOLI		2,258							1,873				385						21
Administrative services		2,266							2,010				256						13
Early pay-offs of capital leases		587							1,221				(634				)		(52		)
Miscellaneous		14,739							21,600				(6,861				)		(32		)
Total Other		25,916							30,358				(4,442				)		(15		)
Total Non-Interest Income		180,912							158,737				$			22,175			14		%

NM - Not meaningful

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

The increase in wealth management revenue during the current period as compared to the same period of 2017 is primarily attributable to growth in assets under management along with market appreciation related to managed money accounts with fees based on assets under management.  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 2018 resulted primarily from higher origination volumes as a result of typical seasonality in our primary markets and one full quarter's impact of Veterans First. Mortgage loans originated or purchased for sale totaled $1.1 billion in the second quarter of 2018 as compared to $778.9 million in the first quarter of 2018 and $1.1 billion in the second quarter of 2017. The increase from higher originations was tempered by lower production margins and smaller positive fair market value adjustment to mortgage servicing rights as interest rates increased less during the second quarter of 2018 when compared to the first quarter of 2018. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. Mortgage revenue is also impacted by changes in the fair value of mortgage servicing rights as the Company does not hedge this change in fair value. The Company typically originates mortgage loans held-for-sale with associated mortgage servicing rights ("MSRs") retained or released. Additionally, through the acquisition of Veterans First, the Company acquired approximately $13.8 million of MSRs in the first quarter of 2018. 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, 2018														March 31, 2018						June 30, 2017						June 30, 2018										June 30, 2017
Originations:
Retail originations			$											769,279			539,911						$			963,396			$							1,309,190			$			1,588,367
Correspondent originations			122,986														126,464						170,862						249,450										268,358
Veterans First originations			204,108														112,477						—						316,585										—
Total originations (A)			$											1,096,373			778,852						$			1,134,258			$							1,875,225			$			1,856,725
Purchases as a percentage of originations			80												%		73				%		84				%		77								%		77				%
Refinances as a percentage of originations			20														27						16						23										23
Total			100												%		100				%		100				%		100								%		100				%
Production Margin:
Production revenue (B) (1)			$											27,814			$			20,526			$			28,140			$							48,340			$			45,817
Production margin (B / A)			2.54												%		2.64				%		2.48				%		2.58								%		2.47				%
Mortgage Servicing:
Loans serviced for others (C)			$											5,228,699			$			4,795,335			$			2,303,435
MSRs, at fair value (D)			63,194														54,572						27,307
Percentage of MSRs to loans serviced for others (D / C)			1.21												%		1.14				%		1.19				%
Components of Mortgage Banking Revenue:
Production revenue			$											27,814			$			20,526			$			28,140			$							48,340			$			45,817
MSR capitalization, net of payoffs and paydowns			6,525														2,957						4,886						9,482										7,223
MSR fair value adjustments			2,097														4,133						825						6,230										981
Servicing income			3,505														2,905						1,457						6,410										2,773
Other			(107												)		439						631						332										1,083
Total mortgage banking revenue			$											39,834			$			30,960			$			35,939			$							70,794			$			57,877

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 primarily as a result of selling call options against a smaller value of underlying securities resulting in lower premiums received by Company. There were no outstanding call option contracts at June 30, 2018, March 31, 2018 or June 30, 2017.

The decrease in operating lease income in the current quarter compared to the first quarter of 2018 is primarily related to a $1.1 million gain realized in the prior quarter from the sale of certain equipment held on operating 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 2018 compared to Q1 2018													Q2 2018 compared to Q2 2017
Dollars in thousands)		2018														2018						2017						$ Change									% Change				$ Change									% Change
Salaries and employee benefits:
Salaries		$											66,976			$			61,986			$			55,215			$						4,990			8		%		$						11,761			21		%
Commissions and incentive compensation		35,907														31,949						34,050						3,958									12				1,857									5
Benefits		18,792														18,501						17,237						291									2				1,555									9
Total salaries and employee benefits		121,675														112,436						106,502						9,239									8				15,173									14
Equipment		10,527														10,072						9,909						455									5				618									6
Operating lease equipment depreciation		6,940														6,533						5,662						407									6				1,278									23
Occupancy, net		13,663														13,767						12,586						(104							)		(1		)		1,077									9
Data processing		8,752														8,493						7,804						259									3				948									12
Advertising and marketing		11,782														8,824						8,726						2,958									34				3,056									35
Professional fees		6,484														6,649						7,510						(165							)		(2		)		(1,026							)		(14		)
Amortization of other intangible assets		997														1,004						1,141						(7							)		(1		)		(144							)		(13		)
FDIC insurance		4,598														4,362						3,874						236									5				724									19
OREO expense, net		980														2,926						739						(1,946							)		(67		)		241									33
Other:
Commissions - 3rd party brokers		1,174														1,252						1,033						(78							)		(6		)		141									14
Postage		2,567														1,866						2,080						701									38				487									23
Miscellaneous		16,630														16,165						15,978						465									3				652									4
Total other		20,371														19,283						19,091						1,088									6				1,280									7
Total Non-Interest Expense		$											206,769			$			194,349			$			183,544			$						12,420			6		%		$						23,225			13		%

		Six Months Ended
		June 30,										June 30,						$						%
(Dollars in thousands)		2018										2017						Change						Change
Salaries and employee benefits:
Salaries		$							128,962			$			110,223			$			18,739			17		%
Commissions and incentive compensation		67,856										60,693						7,163						12
Benefits		37,293										34,902						2,391						7
Total salaries and employee benefits		234,111										205,818						28,293						14
Equipment		20,599										18,911						1,688						9
Operating lease equipment depreciation		13,473										10,298						3,175						31
Occupancy, net		27,430										25,687						1,743						7
Data processing		17,245										15,729						1,516						10
Advertising and marketing		20,606										13,876						6,730						49
Professional fees		13,133										12,170						963						8
Amortization of other intangible assets		2,001										2,305						(304				)		(13		)
FDIC insurance		8,960										8,030						930						12
OREO expense, net		3,906										2,404						1,502						62
Other:
Commissions - 3rd party brokers		2,426										2,131						295						14
Postage		4,433										3,522						911						26
Miscellaneous		32,795										30,781						2,014						7
Total other		39,654										36,434						3,220						9
Total Non-Interest Expense		$							401,118			$			351,662			$			49,456			14		%

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 2018 primarily as a result of higher salaries and commissions and incentive compensation. The increase in salaries is primarily due to additional salaries from the Veterans First acquisition as well as increases from merit-based salary increases for current employees effective in February and an increase of the minimum wage for eligible hourly employees effective in March. The increase in commissions and incentive compensation is the result of higher commissions due to increased production in mortgage banking and an increase in bonus and long-term performance-based incentive compensation recognized in the second quarter of 2018 due to higher earnings.

The increase in advertising and marketing expenses during the current quarter compared to the first quarter of 2018 and the second quarter of 2017 is primarily related to higher corporate sponsorship costs, which are typically higher in the spring and summer due to our marketing efforts with the Chicago Cubs and Chicago White Sox, as well as increased spending related to deposit generation and brand awareness to grow our loan and deposit portfolios. Marketing costs are incurred to promote the Company's brand, commercial banking capabilities, the Company's various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the Company's non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs and type of marketing programs utilized which are determined based on the market area, targeted audience, competition and various other factors.

The decrease in OREO expense in the current quarter compared to the first quarter of 2018 was primarily the result of negative valuation adjustments and realized losses on the sale of certain OREO properties recognized in the previous quarter from our continuing efforts to address and resolve non-performing assets in a timely fashion. OREO expenses include all costs associated with obtaining, maintaining and selling other real estate owned properties as well as valuation adjustments.

INCOME TAXES

The Company recorded income tax expense of $32.0 million in the second quarter of 2018 compared to $26.1 million in the first quarter of 2018 and $37.0 million in the second quarter of 2017. The effective tax rates were 26.33% in the second quarter of 2018, 24.14% in the first quarter of 2018 and 36.34% in the second quarter of 2017. During the six months ended June 30, 2018, the Company recorded income tax expense of $58.1 million (25.30% effective tax rate) compared to $66.7 million (35.11% effective tax rate) for the same period of 2017. The lower effective tax rates for the 2018 quarterly and year-to-date periods as compared to 2017 were primarily due to the reduction of the federal corporate income tax rate effective in 2018 as a result of the enactment of the Tax Cuts and Jobs Act on December 22, 2017. The Company recorded $712,000 of excess tax benefits in the second quarter of 2018 related to share-based compensation and $2.6 million in the first quarter of 2018, compared to $456,000 in the second quarter of 2017 and $3.4 million in the first quarter of 2017. Excess tax benefits are expected to be higher in the first quarter when the majority of the Company's share-based awards vest, and will fluctuate throughout the year based on the Company's stock price and timing of employee stock option exercises and vesting of other share-based awards.

ASSET QUALITY

Allowance for Credit Losses, excluding covered loans

		Three Months Ended																										Six Months Ended
(Dollars in thousands)		June 30, 2018														March 31, 2018						June 30, 2017						June 30, 2018										June 30, 2017
Allowance for loan losses at beginning of period		$	139,503													$	137,905					$	125,819					$	137,905									$	122,291
Provision for credit losses		5,043														8,346						8,952						13,389										14,268
Other adjustments (1)		(44												)		(40				)		(30				)		(84								)		(86				)
Reclassification (to) from allowance for unfunded lending-related commitments		—														26						106						26										(32				)
Charge-offs:
Commercial		2,210														2,687						913						4,897										1,554
Commercial real estate		155														813						1,985						968										2,246
Home equity		612														357						1,631						969										2,256
Residential real estate		180														571						146						751										475
Premium finance receivables - commercial		3,254														4,721						1,878						7,975										3,305
Premium finance receivables - life insurance		—														—						—						—										—
Consumer and other		459														129						175						588										309
Total charge-offs		6,870														9,278						6,728						16,148										10,145
Recoveries:
Commercial		666														262						561						928										834
Commercial real estate		2,387														1,687						276						4,074										830
Home equity		171														123						144						294										209
Residential real estate		1,522														40						54						1,562										232
Premium finance receivables - commercial		975														385						404						1,360										1,016
Premium finance receivables - life insurance		—														—						—						—										—
Consumer and other		49														47						33						96										174
Total recoveries		5,770														2,544						1,472						8,314										3,295
Net charge-offs		(1,100												)		(6,734				)		(5,256				)		(7,834								)		(6,850				)
Allowance for loan losses at period end		$											143,402			$			139,503			$			129,591			$							143,402			$			129,591
Allowance for unfunded lending-related commitments at period end		1,243														1,243						1,705						1,243										1,705
Allowance for credit losses at period end		$											144,645			$			140,746			$			131,296			$							144,645			$			131,296
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial		0.09												%		0.14				%		0.02				%		0.11								%		0.02				%
Commercial real estate		(0.14												)		(0.05				)		0.11						(0.09								)		0.05
Home equity		0.29														0.15						0.85						0.22										0.58
Residential real estate		(0.64												)		0.26						0.05						(0.20								)		0.07
Premium finance receivables - commercial		0.34														0.68						0.23						0.51										0.19
Premium finance receivables - life insurance		0.00														0.00						0.00						0.00										0.00
Consumer and other		1.21														0.26						0.45						0.76										0.22
Total loans, net of unearned income, excluding covered loans		0.02												%		0.13				%		0.10				%		0.07								%		0.07				%
Net charge-offs as a percentage of the provision for credit losses		21.80												%		80.69				%		58.71				%		58.51								%		48.01				%
Loans at period-end, excluding covered loans		$											22,610,560			$			22,062,134			$			20,743,332
Allowance for loan losses as a percentage of loans at period end		0.63												%		0.63				%		0.62				%
Allowance for credit losses as a percentage of loans at period end		0.64												%		0.64				%		0.63				%

1. Includes $742,000 of allowance for covered loan losses reclassified as a result of the termination of all existing loss share agreements with the FDIC during the fourth quarter of 2017.

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 2018 totaled two basis points on an annualized basis compared to 13 basis points on an annualized basis in the first quarter of 2018 and 10 basis points on an annualized basis in the second quarter of 2017.  Net charge-offs totaled $1.1 million in the second quarter of 2018, a $5.6 million decrease from $6.7 million in the first quarter of 2018 and a $4.2 million decrease from $5.3 million in the second quarter of 2017. The decrease in the second quarter of 2018 compared to first quarter of 2018 is primarily the result of decreased net charge-offs within the commercial real estate, residential real estate and commercial insurance premium finance receivables portfolios. The decrease in the second quarter of 2018 compared to second quarter of 2017 is primarily the result of decreased net charge-offs within the commercial real estate and residential real estate portfolios. The provision for credit losses, excluding the provision for covered loan losses, totaled $5.0 million for the second quarter of 2018 compared to $8.3 million for the first quarter of 2018 and $9.0 million for the second quarter of 2017.

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 provided a provision for covered loan losses on covered loans when applicable.

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)		2018				2018				2017				2018				2017
Provision for loan losses		$	5,043			$	8,372			$	9,058			$	13,415			$	14,236
Provision for unfunded lending-related commitments		—				(26		)		(106		)		(26		)		32
Provision for covered loan losses		—				—				(61		)		—				(168		)
Provision for credit losses		$	5,043			$	8,346			$	8,891			$	13,389			$	14,100
										June 30,				March 31,				June 30,
										2018				2018				2017
Allowance for loan losses										$	143,402			$	139,503			$	129,591
Allowance for unfunded lending-related commitments										1,243				1,243				1,705
Allowance for covered loan losses										—				—				1,074
Allowance for credit losses										$	144,645			$	140,746			$	132,370

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, 2018 and March 31, 2018.

		As of June 30, 2018
		Recorded				Calculated				As a percentage of its own respective
(Dollars in thousands)		Investment				Allowance				category’s balance
Commercial:(1)
Commercial and industrial		$	4,000,272			$	36,381			0.91	%
Asset-based lending		1,041,894				8,957				0.86
Tax exempt		432,435				2,856				0.66
Leases		456,906				1,237				0.27
Commercial real estate:(1)
Residential construction		34,350				709				2.06
Commercial construction		770,314				8,606				1.12
Land		113,937				3,714				3.26
Office		863,448				5,967				0.69
Industrial		851,584				5,896				0.69
Retail		836,901				8,047				0.96
Multi-family		926,475				9,679				1.04
Mixed use and other		1,876,807				14,811				0.79
Home equity(1)		547,836				9,437				1.72
Residential real estate(1)		854,176				6,199				0.73
Total core loan portfolio		$	13,607,335			$	122,496			0.90	%
Commercial:
Franchise		$	881,921			$	8,661			0.98	%
Mortgage warehouse lines of credit		200,060				1,598				0.80
Community Advantage - homeowner associations		169,443				424				0.25
Aircraft		2,586				3				0.12
Purchased non-covered commercial loans (2)		103,543				610				0.59
Commercial real estate:
Purchased non-covered commercial real estate (2)		301,268				231				0.08
Purchased non-covered home equity (2)		45,664				114				0.25
Purchased non-covered residential real estate (2)		41,294				137				0.33
Premium finance receivables
U.S. commercial insurance loans		2,487,886				5,759				0.23
Canada commercial insurance loans (2)		345,566				513				0.15
Life insurance loans (1)		4,118,666				1,462				0.04
Purchased life insurance loans (2)		183,622				—				—
Consumer and other (1)		119,143				1,390				1.17
Purchased non-covered consumer and other (2)		2,563				4				0.14
Total consumer, niche and purchased loan portfolio		$	9,003,225			$	20,906			0.23	%
Total loans, net of unearned income, excluding covered loans		$	22,610,560			$	143,402			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.

		As of March 31, 2018
		Recorded			Calculated			As a percentage of its own respective
(Dollars in thousands)		Investment			Allowance			category’s balance
Commercial:(1)
Commercial and industrial		$	3,989,211		$	36,092		0.90	%
Asset-based lending		977,063			8,315			0.85
Tax exempt		380,264			2,602			0.68
Leases		412,786			1,222			0.30
Commercial real estate:(1)
Residential construction		44,328			860			1.94
Commercial construction		769,330			8,723			1.13
Land		121,005			3,988			3.30
Office		853,839			5,795			0.68
Industrial		872,761			5,895			0.68
Retail		861,249			8,101			0.94
Multi-family		903,778			9,599			1.06
Mixed use and other		1,866,691			14,319			0.77
Home equity(1)		571,925			9,719			1.70
Residential real estate(1)		823,322			6,073			0.74
Total core loan portfolio		$	13,447,552		$	121,303		0.90	%
Commercial:
Franchise		$	852,166		$	7,032		0.83	%
Mortgage warehouse lines of credit		163,470			1,297			0.79
Community Advantage - homeowner associations		168,656			422			0.25
Aircraft		2,904			42			1.45
Purchased non-covered commercial loans (2)		114,351			612			0.54
Commercial real estate:
Purchased non-covered commercial real estate (2)		340,539			201			0.06
Purchased non-covered home equity (2)		54,622			141			0.26
Purchased non-covered residential real estate (2)		45,782			205			0.45
Premium finance receivables
U.S. commercial insurance loans		2,263,019			5,415			0.24
Canada commercial insurance loans (2)		313,131			491			0.16
Life insurance loans (1)		4,002,726			1,427			0.04
Purchased life insurance loans (2)		187,235			—			—
Consumer and other (1)		103,312			911			0.88
Purchased non-covered consumer and other (2)		2,669			4			0.15
Total consumer, niche and purchased loan portfolio		$	8,614,582		$	18,200		0.21	%
Total loans, net of unearned income, excluding covered loans		$	22,062,134		$	139,503		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.

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, 2018 and March 31, 2018.

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.

In addition to the $143.4 million of allowance for loan losses, there is $2.9 million of non-accretable credit discount on purchased loans reported in accordance with ASC 310-30 that is available to absorb credit losses.

The tables below show the aging of the Company’s loan portfolio at June 30, 2018 and March 31, 2018:

						90+ days				60-89				30-59
As of June 30, 2018						and still				days past				days past
(Dollars in thousands)		Nonaccrual				accruing				due				due				Current				Total Loans
Loan Balances:
Commercial (1)		$	18,388			$	882			$	3,064			$	15,923			$	7,250,803			$	7,289,060
Commercial real estate (1)		19,195				3,194				4,119				27,682				6,520,894				6,575,084
Home equity		9,096				—				—				3,226				581,178				593,500
Residential real estate (1)		15,825				1,472				3,637				1,534				873,002				895,470
Premium finance receivables - commercial		14,832				5,159				8,848				10,535				2,794,078				2,833,452
Premium finance receivables - life insurance (1)		—				—				26,770				17,211				4,258,307				4,302,288
Consumer and other (1)		563				286				150				310				120,397				121,706
Total loans, net of unearned income		$	77,899			$	10,993			$	46,588			$	76,421			$	22,398,659			$	22,610,560

As of June 30, 2018 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)		0.3	%		—	%		—	%		0.2	%		99.5	%		100.0	%
Commercial real estate (1)		0.3			—			0.1			0.4			99.2			100.0
Home equity		1.5			—			—			0.5			98.0			100.0
Residential real estate (1)		1.8			0.2			0.4			0.2			97.4			100.0
Premium finance receivables - commercial		0.5			0.2			0.3			0.4			98.6			100.0
Premium finance receivables - life insurance (1)		—			—			0.6			0.4			99.0			100.0
Consumer and other (1)		0.5			0.2			0.1			0.3			98.9			100.0
Total loans, net of unearned income		0.3	%		—	%		0.2	%		0.3	%		99.2	%		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, 2018						and still				days past				days past
(Dollars in thousands)		Nonaccrual				accruing				due				due				Current				Total Loans
Loan Balances:
Commercial (1)		$	14,007			$	856			$	771			$	54,233			$	6,991,004			$	7,060,871
Commercial real estate (1)		21,825				3,107				3,563				58,469				6,546,556				6,633,520
Home equity		9,828				—				1,505				4,033				611,181				626,547
Residential real estate (1)		17,214				1,437				229				8,808				841,416				869,104
Premium finance receivables - commercial		17,342				8,547				6,543				17,756				2,525,962				2,576,150
Premium finance receivables - life insurance (1)		—				—				5,125				11,420				4,173,416				4,189,961
Consumer and other (1)		720				269				216				291				104,485				105,981
Total loans, net of unearned income		$	80,936			$	14,216			$	17,952			$	155,010			$	21,794,020			$	22,062,134

As of March 31, 2018 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	%		—	%		—	%		0.8	%		99.0	%		100.0	%
Commercial real estate (1)		0.3			—			0.1			0.9			98.7			100.0
Home equity		1.6			—			0.2			0.6			97.6			100.0
Residential real estate (1)		2.0			0.2			—			1.0			96.8			100.0
Premium finance receivables - commercial		0.7			0.3			0.3			0.7			98.0			100.0
Premium finance receivables - life insurance (1)		—			—			0.1			0.3			99.6			100.0
Consumer and other (1)		0.7			0.3			0.2			0.3			98.5			100.0
Total loans, net of unearned income		0.4	%		0.1	%		0.1	%		0.7	%		98.7	%		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, 2018, $46.6 million of all loans, or 0.2%, were 60 to 89 days past due and $76.4 million, or 0.3%, were 30 to 59 days (or one payment) past due. As of March 31, 2018, $18.0 million of all loans, or 0.1%, were 60 to 89 days past due and $155.0 million, or 0.7%, 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. All loans within the life insurance premium financing portfolio shown as 60 to 89 days and 30 to 59 days past due (four and nine credits, respectively) remain fully secured.

The Company’s home equity and residential loan portfolios continue to exhibit low delinquency ratios. Home equity loans at June 30, 2018 that are current with regard to the contractual terms of the loan agreement represent 98.0% of the total home equity portfolio. Residential real estate loans at June 30, 2018 that are current with regards to the contractual terms of the loan agreements comprise 97.4% 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)	2018			2018			2017
Loans past due greater than 90 days and still accruing(1):
Commercial	$	—		$	—		$	—
Commercial real estate	—			—			—
Home equity	—			—			—
Residential real estate	—			—			179
Premium finance receivables - commercial	5,159			8,547			5,922
Premium finance receivables - life insurance	—			—			1,046
Consumer and other	224			207			63
Total loans past due greater than 90 days and still accruing	5,383			8,754			7,210
Non-accrual loans(2):
Commercial	18,388			14,007			10,191
Commercial real estate	19,195			21,825			16,980
Home equity	9,096			9,828			9,482
Residential real estate	15,825			17,214			14,292
Premium finance receivables - commercial	14,832			17,342			10,456
Premium finance receivables - life insurance	—			—			—
Consumer and other	563			720			439
Total non-accrual loans	77,899			80,936			61,840
Total non-performing loans:
Commercial	18,388			14,007			10,191
Commercial real estate	19,195			21,825			16,980
Home equity	9,096			9,828			9,482
Residential real estate	15,825			17,214			14,471
Premium finance receivables - commercial	19,991			25,889			16,378
Premium finance receivables - life insurance	—			—			1,046
Consumer and other	787			927			502
Total non-performing loans	$	83,282		$	89,690		$	69,050
Other real estate owned	18,925			18,481			16,853
Other real estate owned - from acquisitions	16,406			18,117			22,508
Other repossessed assets	305			113			532
Total non-performing assets	$	118,918		$	126,401		$	108,943
TDRs performing under the contractual terms of the loan agreement	$	57,249		$	39,562		$	28,008
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.25		%	0.20		%	0.16		%
Commercial real estate	0.29			0.33			0.27
Home equity	1.53			1.57			1.38
Residential real estate	1.77			1.98			1.90
Premium finance receivables - commercial	0.71			1.00			0.62
Premium finance receivables - life insurance	—			—			0.03
Consumer and other	0.65			0.87			0.44
Total loans, net of unearned income	0.37		%	0.41		%	0.33		%
Total non-performing assets as a percentage of total assets	0.40		%	0.44		%	0.40		%
Allowance for loan losses as a percentage of total non-performing loans	172.19		%	155.54		%	187.68		%

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 $8.1 million, $8.1 million and $5.1 million as of June 30, 2018, March 31, 2018 and June 30, 2017, respectively.

The ratio of non-performing assets to total assets was 0.40% as of June 30, 2018, compared to 0.44% at March 31, 2018, and 0.40% at June 30, 2017. Non-performing assets, excluding covered assets and non-covered PCI loans, totaled $118.9 million at June 30, 2018, compared to $126.4 million at March 31, 2018 and $108.9 million at June 30, 2017. Non-performing loans, excluding covered loans and non-covered PCI loans, totaled $83.3 million, or 0.37% of total loans, at June 30, 2018 compared to $89.7 million, or 0.41% of total loans, at March 31, 2018 and $69.1 million, or 0.33% of total loans, at June 30, 2017. OREO, excluding covered OREO, of $35.3 million at June 30, 2018 decreased $1.3 million compared to $36.6 million at March 31, 2018 and decreased $4.0 million compared to $39.4 million at June 30, 2017.

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 and non-covered PCI loans, for the periods presented:

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
(Dollars in thousands)		2018				2018				2017				2018				2017
Balance at beginning of period		$	89,690			$	90,162			$	78,979			$	90,162			$	87,454
Additions, net, from non-covered portfolio		10,403				6,608				10,888				17,011				19,497
Return to performing status		(759		)		(3,753		)		(975		)		(4,512		)		(2,567		)
Payments received		(4,589		)		(2,569		)		(10,684		)		(7,158		)		(16,298		)
Transfer to OREO and other repossessed assets		(3,528		)		(1,981		)		(2,543		)		(5,509		)		(4,204		)
Charge-offs		(1,968		)		(3,555		)		(4,344		)		(5,523		)		(5,624		)
Net change for niche loans (1)		(5,967		)		4,778				(2,271		)		(1,189		)		(9,208		)
Balance at end of period		$	83,282			$	89,690			$	69,050			$	83,282			$	69,050

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)		2018				2018				2017
Accruing TDRs:
Commercial		$	37,560			$	19,803			$	3,886
Commercial real estate		15,086				16,087				17,349
Residential real estate and other		4,603				3,672				6,773
Total accrual		$	57,249			$	39,562			$	28,008
Non-accrual TDRs: (1)
Commercial		$	1,671			$	1,741			$	1,110
Commercial real estate		1,362				1,304				1,839
Residential real estate and other		5,028				5,069				2,134
Total non-accrual		$	8,061			$	8,114			$	5,083
Total TDRs:
Commercial		$	39,231			$	21,544			$	4,996
Commercial real estate		16,448				17,391				19,188
Residential real estate and other		9,631				8,741				8,907
Total TDRs		$	65,310			$	47,676			$	33,091
Weighted-average contractual interest rate of TDRs		5.46		%		4.84		%		4.28		%

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, 2018, March 31, 2018 and June 30, 2017, 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)		2018				2018				2017
Balance at beginning of period		$	36,598			$	40,646			$	39,864
Disposals/resolved		(4,557		)		(3,679		)		(4,270		)
Transfers in at fair value, less costs to sell		4,801				1,789				3,965
Fair value adjustments		(1,511		)		(2,158		)		(198		)
Balance at end of period		$	35,331			$	36,598			$	39,361
		Period End
		June 30,				March 31,				June 30,
Balance by Property Type		2018				2018				2017
Residential real estate		$	5,155			$	6,407			$	7,684
Residential real estate development		2,205				2,229				755
Commercial real estate		27,971				27,962				30,922
Total		$	35,331			$	36,598			$	39,361

Items Impacting Comparative Financial Results:

Acquisitions

On January 4, 2018, the Company acquired certain assets and assumed certain liabilities of the mortgage banking business of Veterans First, in a business combination. The Company also acquired mortgage servicing rights assets from Veterans First on approximately 10,000 loans, totaling an estimated $1.6 billion in unpaid principal balance. Veterans First is a consumer direct lender with three offices, operating two in Salt Lake City and one in San Diego, and originated in excess of $800 million in loans in 2017.

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

Termination of Loss Share Agreements

On October 16, 2017, the Company entered in agreements with the FDIC that terminated all existing loss share agreements with the FDIC.  The loss share agreements were related to the Company’s acquisition of assets and assumption of liabilities of eight failed banks through FDIC assisted transactions in 2010, 2011 and 2012.

Under terms of the agreements, the Company made a net payment of $15.2 million to the FDIC as consideration for the early termination of the loss share agreements.  The Company recorded a pre-tax gain of approximately $0.4 million in the fourth quarter of 2017 to write off the remaining loss share asset, relieve the claw-back liability and recognize the payment to the FDIC.

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

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

WINTRUST SUBSIDIARIES AND LOCATIONS

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

The banks also operate facilities in Illinois in Addison, Algonquin, Aurora, Bloomingdale, Buffalo Grove, Cary, Clarendon Hills, Crete, Deerfield, Des Plaines, Downers Grove, Elgin, Elk Grove Village, Elmhurst, Evanston, 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, Rolling Meadows, 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, Menomonee Falls, Milwaukee, Monroe, Pewaukee, Racine, Sharon, Wales, Walworth and Wind Lake, Wisconsin and Dyer, Indiana.

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

• FIRST Insurance Funding, a division of Lake Forest Bank & Trust Company, N.A., and Wintrust Life Finance, a division of Lake Forest Bank & Trust Company, N.A., serve commercial and life insurance loan customers, respectively, throughout the United States.
• First Insurance Funding of Canada serves commercial insurance loan customers throughout Canada.
• Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States.
• Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices.
• Wayne Hummer Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest.
• Great Lakes Advisors LLC provides money management services and advisory services to individual accounts.
• The Chicago Trust Company, a trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location.
• Wintrust Asset Finance which offers direct leasing opportunities.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “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 2017 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;
• harm to the Company’s reputation;
• any negative perception of the Company’s 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;
• failure or breaches of our security systems or infrastructure, or those of third parties;
• security breaches, including denial of service attacks, hacking, social engineering attacks, malware intrusion or data corruption attempts and identity theft;
• adverse effects on our information technology systems resulting from failures, human error or cyberattacks;
• 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, and any unanticipated impact of the Tax Act;
• changes in accounting standards, rules and interpretations such as the new CECL standard, and the impact on the Company’s financial statements;
• the ability of the Company to receive dividends from its subsidiaries;
• uncertainty about the future of LIBOR;
• a decrease in the Company’s capital ratios, including as a result of 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;
• a lowering of our credit rating;
• changes in U.S. monetary policy and changes to the Federal Reserve’s balance sheet as a result of the end of its program of quantitative easing or otherwise;
• 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 regulatory environment;
• 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. (Central Time) on Wednesday, July 18, 2018 regarding second quarter and year-to-date 2018 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #2188524. 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 2018 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,
		2018				2018				2017				2017				2017
Selected Financial Condition Data (at end of period):
Total assets		$	29,464,588			$	28,456,772			$	27,915,970			$	27,358,162			$	26,929,265
Total loans, excluding covered loans		22,610,560				22,062,134				21,640,797				20,912,781				20,743,332
Total deposits		24,365,479				23,279,327				23,183,347				22,895,063				22,605,692
Junior subordinated debentures		253,566				253,566				253,566				253,566				253,566
Total shareholders’ equity		3,106,871				3,031,250				2,976,939				2,908,925				2,839,458
Selected Statements of Income Data:
Net interest income		238,170				225,082				219,099				215,988				204,409
Net revenue (1)		333,403				310,761				300,137				295,719				294,381
Net income		89,580				81,981				68,781				65,626				64,897
Net income per common share – Basic		$	1.55			$	1.42			$	1.19			$	1.14			$	1.15
Net income per common share – Diluted		$	1.53			$	1.40			$	1.17			$	1.12			$	1.11
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin		3.61		%		3.54		%		3.45		%		3.43		%		3.41		%
Net interest margin - fully taxable equivalent (non-GAAP) (2)		3.63		%		3.56		%		3.49		%		3.46		%		3.43		%
Non-interest income to average assets		1.34		%		1.25		%		1.18		%		1.17		%		1.39		%
Non-interest expense to average assets		2.90		%		2.83		%		2.87		%		2.70		%		2.83		%
Net overhead ratio (3)		1.57		%		1.58		%		1.69		%		1.53		%		1.44		%
Return on average assets		1.26		%		1.20		%		1.00		%		0.96		%		1.00		%
Return on average common equity		11.94		%		11.29		%		9.39		%		9.15		%		9.55		%
Return on average tangible common equity (non-GAAP) (2)		14.72		%		14.02		%		11.65		%		11.39		%		12.02		%
Average total assets		$	28,567,579			$	27,809,597			$	27,179,484			$	27,012,295			$	26,050,949
Average total shareholders’ equity		3,064,154				2,995,592				2,942,999				2,882,682				2,800,905
Average loans to average deposits ratio (excluding covered loans)		95.5		%		95.2		%		92.3		%		91.8		%		94.1		%
Period-end loans to deposits ratio (excluding covered loans)		92.8				94.8				93.3				91.3				91.8
Common Share Data at end of period:
Market price per common share		$	87.05			$	86.05			$	82.37			$	78.31			$	76.44
Book value per common share (2)		$	52.94			$	51.66			$	50.96			$	49.86			$	48.73
Tangible common book value per share (2)		$	43.50			$	42.17			$	41.68			$	40.53			$	39.40
Common shares outstanding		56,329,276				56,256,498				55,965,207				55,838,063				55,699,927
Other Data at end of period:(6)
Leverage Ratio(4)		9.4		%		9.3		%		9.3		%		9.2		%		9.2		%
Tier 1 Capital to risk-weighted assets (4)		10.0		%		10.0		%		9.9		%		10.0		%		9.8		%
Common equity Tier 1 capital to risk-weighted assets (4)		9.5		%		9.5		%		9.4		%		9.5		%		9.3		%
Total capital to risk-weighted assets (4)		12.0		%		12.0		%		12.0		%		12.2		%		12.0		%
Allowance for credit losses (5)		$	144,645			$	140,746			$	139,174			$	134,395			$	131,296
Non-performing loans		83,282				89,690				90,162				77,983				69,050
Allowance for credit losses to total loans (5)		0.64		%		0.64		%		0.64		%		0.64		%		0.63		%
Non-performing loans to total loans		0.37		%		0.41		%		0.42		%		0.37		%		0.33		%
Number of:
Bank subsidiaries		15				15				15				15				15
Banking offices		162				157				157				156				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.
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)		2018				2018				2017				2017				2017
Assets
Cash and due from banks		$	304,580			$	231,407			$	277,534			$	251,896			$	296,105
Federal funds sold and securities purchased under resale agreements		62				57				57				56				56
Interest bearing deposits with banks		1,221,407				980,380				1,063,242				1,218,728				1,011,635
Available-for-sale securities, at fair value		1,940,787				1,895,688				1,803,666				1,665,903				1,649,636
Held-to-maturity securities, at amortized cost		890,834				892,937				826,449				819,340				793,376
Trading account securities		862				1,682				995				643				1,987
Equity securities with readily determinable fair value		37,839				37,832				—				—				—
Federal Home Loan Bank and Federal Reserve Bank stock		96,699				104,956				89,989				87,192				80,812
Brokerage customer receivables		16,649				24,531				26,431				23,631				23,281
Mortgage loans held-for-sale		455,712				411,505				313,592				370,282				382,837
Loans, net of unearned income, excluding covered loans		22,610,560				22,062,134				21,640,797				20,912,781				20,743,332
Covered loans		—				—				—				46,601				50,119
Total loans		22,610,560				22,062,134				21,640,797				20,959,382				20,793,451
Allowance for loan losses		(143,402		)		(139,503		)		(137,905		)		(133,119		)		(129,591		)
Allowance for covered loan losses		—				—				—				(758		)		(1,074		)
Net loans		22,467,158				21,922,631				21,502,892				20,825,505				20,662,786
Premises and equipment, net		639,345				626,687				621,895				609,978				605,211
Lease investments, net		194,160				190,775				212,335				193,828				191,248
Accrued interest receivable and other assets		666,673				601,794				567,374				580,612				577,359
Trade date securities receivable		450				—				90,014				189,896				133,130
Goodwill		509,957				511,497				501,884				502,021				500,260
Other intangible assets		21,414				22,413				17,621				18,651				19,546
Total assets		$	29,464,588			$	28,456,772			$	27,915,970			$	27,358,162			$	26,929,265
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing		$	6,520,724			$	6,612,319			$	6,792,497			$	6,502,409			$	6,294,052
Interest bearing		17,844,755				16,667,008				16,390,850				16,392,654				16,311,640
Total deposits		24,365,479				23,279,327				23,183,347				22,895,063				22,605,692
Federal Home Loan Bank advances		667,000				915,000				559,663				468,962				318,270
Other borrowings		255,701				247,092				266,123				251,680				277,710
Subordinated notes		139,148				139,111				139,088				139,052				139,029
Junior subordinated debentures		253,566				253,566				253,566				253,566				253,566
Trade date securities payable		—				—				—				880				5,151
Accrued interest payable and other liabilities		676,823				591,426				537,244				440,034				490,389
Total liabilities		26,357,717				25,425,522				24,939,031				24,449,237				24,089,807
Shareholders’ Equity:
Preferred stock		125,000				125,000				125,000				125,000				125,000
Common stock		56,437				56,364				56,068				55,940				55,802
Surplus		1,547,511				1,540,673				1,529,035				1,519,596				1,511,080
Treasury stock		(5,355		)		(5,355		)		(4,986		)		(4,884		)		(4,884		)
Retained earnings		1,464,494				1,387,663				1,313,657				1,254,759				1,198,997
Accumulated other comprehensive loss		(81,216		)		(73,095		)		(41,835		)		(41,486		)		(46,537		)
Total shareholders’ equity		3,106,871				3,031,250				2,976,939				2,908,925				2,839,458
Total liabilities and shareholders’ equity		$	29,464,588			$	28,456,772			$	27,915,970			$	27,358,162			$	26,929,265

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)		2018				2018				2017				2017				2017
Interest income
Interest and fees on loans		255,063				234,994				226,447				223,897				209,289
Mortgage loans held-for-sale		4,226				2,818				3,291				3,223				3,420
Interest bearing deposits with banks		3,243				2,796				2,723				3,272				1,634
Federal funds sold and securities purchased under resale agreements		1				—				—				—				1
Investment securities		19,888				19,128				18,160				16,058				15,524
Trading account securities		4				14				2				8				4
Federal Home Loan Bank and Federal Reserve Bank stock		1,455				1,298				1,067				1,080				1,153
Brokerage customer receivables		167				157				150				150				156
Total interest income		284,047				261,205				251,840				247,688				231,181
Interest expense
Interest on deposits		35,293				26,549				24,930				23,655				18,471
Interest on Federal Home Loan Bank advances		4,263				3,639				2,124				2,151				2,933
Interest on other borrowings		1,698				1,699				1,600				1,482				1,149
Interest on subordinated notes		1,787				1,773				1,786				1,772				1,786
Interest on junior subordinated debentures		2,836				2,463				2,301				2,640				2,433
Total interest expense		45,877				36,123				32,741				31,700				26,772
Net interest income		238,170				225,082				219,099				215,988				204,409
Provision for credit losses		5,043				8,346				7,772				7,896				8,891
Net interest income after provision for credit losses		233,127				216,736				211,327				208,092				195,518
Non-interest income
Wealth management		22,617				22,986				21,910				19,803				19,905
Mortgage banking		39,834				30,960				27,411				28,184				35,939
Service charges on deposit accounts		9,151				8,857				8,907				8,645				8,696
Gains (losses) on investment securities, net		12				(351		)		14				39				47
Fees from covered call options		669				1,597				1,610				1,143				890
Trading gains (losses), net		124				103				24				(129		)		(420		)
Operating lease income, net		8,746				9,691				8,598				8,461				6,805
Other		14,080				11,836				12,564				13,585				18,110
Total non-interest income		95,233				85,679				81,038				79,731				89,972
Non-interest expense
Salaries and employee benefits		121,675				112,436				118,009				106,251				106,502
Equipment		10,527				10,072				9,500				9,947				9,909
Operating lease equipment depreciation		6,940				6,533				7,015				6,794				5,662
Occupancy, net		13,663				13,767				14,154				13,079				12,586
Data processing		8,752				8,493				7,915				7,851				7,804
Advertising and marketing		11,782				8,824				7,382				9,572				8,726
Professional fees		6,484				6,649				8,879				6,786				7,510
Amortization of other intangible assets		997				1,004				1,028				1,068				1,141
FDIC insurance		4,598				4,362				4,324				3,877				3,874
OREO expense, net		980				2,926				599				590				739
Other		20,371				19,283				17,775				17,760				19,091
Total non-interest expense		206,769				194,349				196,580				183,575				183,544
Income before taxes		121,591				108,066				95,785				104,248				101,946
Income tax expense		32,011				26,085				27,004				38,622				37,049
Net income		$	89,580			$	81,981			$	68,781			$	65,626			$	64,897
Preferred stock dividends		2,050				2,050				2,050				2,050				2,050
Net income applicable to common shares		$	87,530			$	79,931			$	66,731			$	63,576			$	62,847
Net income per common share - Basic		$	1.55			$	1.42			$	1.19			$	1.14			$	1.15
Net income per common share - Diluted		$	1.53			$	1.40			$	1.17			$	1.12			$	1.11
Cash dividends declared per common share		$	0.19			$	0.19			$	0.14			$	0.14			$	0.14
Weighted average common shares outstanding		56,299				56,137				55,924				55,796				54,775
Dilutive potential common shares		928				888				1,010				966				1,812
Average common shares and dilutive common shares		57,227				57,025				56,934				56,762				56,587

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)		2018				2018				2017				2017				2017
Balance:
Commercial		$	7,289,060			$	7,060,871			$	6,787,677			$	6,456,034			$	6,406,289
Commercial real estate		6,575,084				6,633,520				6,580,618				6,400,781				6,402,494
Home equity		593,500				626,547				663,045				672,969				689,483
Residential real estate		895,470				869,104				832,120				789,499				762,810
Premium finance receivables - commercial		2,833,452				2,576,150				2,634,565				2,664,912				2,648,386
Premium finance receivables - life insurance		4,302,288				4,189,961				4,035,059				3,795,474				3,719,043
Consumer and other		121,706				105,981				107,713				133,112				114,827
Total loans, net of unearned income, excluding covered loans		$	22,610,560			$	22,062,134			$	21,640,797			$	20,912,781			$	20,743,332
Covered loans		—				—				—				46,601				50,119
Total loans, net of unearned income		$	22,610,560			$	22,062,134			$	21,640,797			$	20,959,382			$	20,793,451
Mix:
Commercial		32		%		32		%		31		%		31		%		31		%
Commercial real estate		29				30				30				31				31
Home equity		3				3				3				3				3
Residential real estate		4				4				4				3				3
Premium finance receivables - commercial		12				12				12				13				13
Premium finance receivables - life insurance		19				19				19				18				18
Consumer and other		1				—				1				1				1
Total loans, net of unearned income, excluding covered loans		100		%		100		%		100		%		100		%		100		%
Covered loans		—				—				—				—				—
Total loans, net of unearned income		100		%		100		%		100		%		100		%		100		%

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Period End Deposits Balances - 5 Quarter Trends

		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2018				2018				2017				2017				2017
Balance:
Non-interest bearing		$	6,520,724			$	6,612,319			$	6,792,497			$	6,502,409			$	6,294,052
NOW and interest bearing demand deposits		2,452,474				2,315,122				2,315,055				2,273,025				2,459,238
Wealth management deposits (1)		2,523,572				2,495,134				2,323,699				2,171,758				2,464,162
Money market		5,205,678				4,617,122				4,515,353				4,607,995				4,449,385
Savings		2,763,062				2,901,504				2,829,373				2,673,201				2,419,463
Time certificates of deposit		4,899,969				4,338,126				4,407,370				4,666,675				4,519,392
Total deposits		$	24,365,479			$	23,279,327			$	23,183,347			$	22,895,063			$	22,605,692
Mix:
Non-interest bearing		27		%		28		%		29		%		28		%		28		%
NOW and interest bearing demand deposits		10				10				10				10				11
Wealth management deposits (1)		11				11				10				10				11
Money market		21				20				20				20				19
Savings		11				12				12				12				11
Time certificates of deposit		20				19				19				20				20
Total deposits		100		%		100		%		100		%		100		%		100		%

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

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin (Including Call Option Income) - 5 Quarter Trends

		Three Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,
(Dollars in thousands)		2018				2018				2017				2017				2017
Net interest income - FTE		$	239,549			$	226,286			$	221,226			$	217,947			$	206,108
Call option income		669				1,597				1,610				1,143				890
Net interest income including call option income		$	240,218			$	227,883			$	222,836			$	219,090			$	206,998
Yield on earning assets		4.32		%		4.13		%		4.00		%		3.96		%		3.88		%
Rate on interest-bearing liabilities		1.00				0.83				0.75				0.73				0.63
Rate spread		3.32		%		3.30		%		3.25		%		3.23		%		3.25		%
Less:  Fully tax-equivalent adjustment		(0.02		)		(0.02		)		(0.04		)		(0.03		)		(0.02		)
Net free funds contribution		0.31				0.26				0.24				0.23				0.18
Net interest margin (GAAP-derived)		3.61		%		3.54		%		3.45		%		3.43		%		3.41		%
Fully tax-equivalent adjustment		0.02				0.02				0.04				0.03				0.02
Net interest margin - FTE		3.63		%		3.56		%		3.49		%		3.46		%		3.43		%
Call option income		0.01				0.03				0.03				0.02				0.01
Net interest margin - FTE, including call option income		3.64		%		3.59		%		3.52		%		3.48		%		3.44		%

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)		2018				2017				2016				2015				2014
Net interest income - FTE		$	465,835			$	839,563			$	728,145			$	646,238			$	601,744
Call option income		2,266				4,402				11,470				15,364				7,859
Net interest income including call option income		$	468,101			$	843,965			$	739,615			$	661,602			$	609,603
Yield on earning assets		4.23		%		3.91		%		3.67		%		3.76		%		3.96		%
Rate on interest-bearing liabilities		0.91				0.67				0.57				0.54				0.55
Rate spread		3.32		%		3.24		%		3.10		%		3.22		%		3.41		%
Less:  Fully tax-equivalent adjustment		(0.02		)		(0.03		)		(0.02		)		(0.02		)		(0.02		)
Net free funds contribution		0.28				0.20				0.16				0.14				0.12
Net interest margin (GAAP-derived)		3.58		%		3.41		%		3.24		%		3.34		%		3.51		%
Fully tax-equivalent adjustment		0.02				0.03				0.02				0.02				0.02
Net interest margin - FTE		3.60		%		3.44		%		3.26		%		3.36		%		3.53		%
Call option income		0.02				0.02				0.05				0.08				0.05
Net interest margin - FTE, including call option income		3.62		%		3.46		%		3.31		%		3.44		%		3.58		%

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)		2018				2018				2017				2017				2017
Interest-bearing deposits with banks and cash equivalents		$	759,425			$	749,973			$	914,319			$	1,003,572			$	722,349
Investment securities		2,890,828				2,892,617				2,736,253				2,652,119				2,572,619
FHLB and FRB stock		115,119				105,414				82,092				81,928				99,438
Liquidity management assets		$	3,765,372			$	3,748,004			$	3,732,664			$	3,737,619			$	3,394,406
Other earning assets		21,244				27,571				26,955				25,844				25,749
Mortgage loans held-for-sale		403,967				281,181				335,385				336,604				334,843
Loans, net of unearned income		22,283,541				21,711,342				21,080,984				20,858,618				20,264,875
Covered loans		—				—				6,025				48,415				51,823
Total earning assets		$	26,474,124			$	25,768,098			$	25,182,013			$	25,007,100			$	24,071,696
Allowance for loan and covered loan losses		(147,192		)		(143,108		)		(138,584		)		(135,519		)		(132,053		)
Cash and due from banks		270,240				254,489				244,097				242,186				242,495
Other assets		1,970,407				1,930,118				1,891,958				1,898,528				1,868,811
Total assets		$	28,567,579			$	27,809,597			$	27,179,484			$	27,012,295			$	26,050,949
NOW and interest bearing demand deposits		$	2,295,268			$	2,255,692			$	2,284,576			$	2,344,848			$	2,470,130
Wealth management deposits		2,365,191				2,250,139				2,005,197				2,320,674				2,091,251
Money market accounts		4,883,645				4,520,620				4,611,515				4,471,342				4,435,670
Savings accounts		2,702,665				2,813,772				2,741,621				2,581,946				2,329,195
Time deposits		4,557,187				4,322,111				4,581,464				4,573,081				4,295,428
Interest-bearing deposits		$	16,803,956			$	16,162,334			$	16,224,373			$	16,291,891			$	15,621,674
Federal Home Loan Bank advances		1,006,407				872,811				324,748				324,996				689,600
Other borrowings		240,066				263,125				255,972				268,850				240,547
Subordinated notes		139,125				139,094				139,065				139,035				139,007
Junior subordinated debentures		253,566				253,566				253,566				253,566				253,566
Total interest-bearing liabilities		$	18,443,120			$	17,690,930			$	17,197,724			$	17,278,338			$	16,944,394
Non-interest bearing deposits		6,539,731				6,639,845				6,605,553				6,419,326				5,904,679
Other liabilities		520,574				483,230				433,208				431,949				400,971
Equity		3,064,154				2,995,592				2,942,999				2,882,682				2,800,905
Total liabilities and shareholders’ equity		$	28,567,579			$	27,809,597			$	27,179,484			$	27,012,295			$	26,050,949

WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION
Net Interest Margin - 5 Quarter Trends

		Three Months Ended
		June 30,  2018			March 31,  2018			December 31,  2017			September 30,  2017			June 30,  2017
Yield earned on:
Interest-bearing deposits with banks and cash equivalents		1.71	%		1.51	%		1.18	%		1.29	%		0.91	%
Investment securities		2.84			2.76			2.78			2.54			2.55
FHLB and FRB stock		5.07			4.99			5.15			5.23			4.66
Liquidity management assets		2.68	%		2.57	%		2.44	%		2.26	%		2.27	%
Other earning assets		3.24			2.56			2.27			2.49			2.53
Mortgage loans held-for-sale		4.20			4.06			3.89			3.80			4.10
Loans, net of unearned income		4.61			4.40			4.28			4.27			4.15
Covered loans		—			—			5.66			4.91			5.01
Total earning assets		4.32	%		4.13	%		4.00	%		3.96	%		3.88	%
Rate paid on:
NOW and interest bearing demand deposits		0.33	%		0.25	%		0.24	%		0.22	%		0.20	%
Wealth management deposits		1.19			0.98			0.80			0.81			0.55
Money market accounts		0.67			0.42			0.36			0.31			0.24
Savings accounts		0.40			0.39			0.39			0.33			0.26
Time deposits		1.37			1.16			1.09			1.04			0.95
Interest-bearing deposits		0.84	%		0.67	%		0.61	%		0.58	%		0.47	%
Federal Home Loan Bank advances		1.70			1.69			2.59			2.63			1.71
Other borrowings		2.84			2.62			2.48			2.19			1.92
Subordinated notes		5.14			5.10			5.14			5.10			5.14
Junior subordinated debentures		4.42			3.89			3.55			4.07			3.80
Total interest-bearing liabilities		1.00	%		0.83	%		0.75	%		0.73	%		0.63	%
Interest rate spread		3.32	%		3.30	%		3.25	%		3.23	%		3.25	%
Less:  Fully tax-equivalent adjustment		(0.02	)		(0.02	)		(0.04	)		(0.03	)		(0.02	)
Net free funds/contribution		0.31			0.26			0.24			0.23			0.18
Net interest margin (GAAP)		3.61	%		3.54	%		3.45	%		3.43	%		3.41	%
Fully tax-equivalent adjustment		0.02			0.02			0.04			0.03			0.02
Net interest margin - FTE		3.63	%		3.56	%		3.49	%		3.46	%		3.43	%

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)		2018				2018				2017				2017				2017
Brokerage		$	5,784			$	6,031			$	6,067			$	5,127			$	5,449
Trust and asset management		16,833				16,955				15,843				14,676				14,456
Total wealth management		22,617				22,986				21,910				19,803				19,905
Mortgage banking		39,834				30,960				27,411				28,184				35,939
Service charges on deposit accounts		9,151				8,857				8,907				8,645				8,696
Gains (losses) on investment securities, net		12				(351		)		14				39				47
Fees from covered call options		669				1,597				1,610				1,143				890
Trading gains (losses), net		124				103				24				(129		)		(420		)
Operating lease income, net		8,746				9,691				8,598				8,461				6,805
Other:
Interest rate swap fees		3,829				2,237				1,963				1,762				2,221
BOLI		1,544				714				754				897				888
Administrative services		1,205				1,061				1,103				1,052				986
Early pay-offs of capital leases		554				33				7				—				10
Miscellaneous		6,948				7,791				8,737				9,874				14,005
Total other income		14,080				11,836				12,564				13,585				18,110
Total Non-Interest Income		$	95,233			$	85,679			$	81,038			$	79,731			$	89,972

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)		2018				2018				2017				2017				2017
Salaries and employee benefits:
Salaries		$	66,976			$	61,986			$	58,239			$	57,689			$	55,215
Commissions and incentive compensation		35,907				31,949				40,723				32,095				34,050
Benefits		18,792				18,501				19,047				16,467				17,237
Total salaries and employee benefits		121,675				112,436				118,009				106,251				106,502
Equipment		10,527				10,072				9,500				9,947				9,909
Operating lease equipment depreciation		6,940				6,533				7,015				6,794				5,662
Occupancy, net		13,663				13,767				14,154				13,079				12,586
Data processing		8,752				8,493				7,915				7,851				7,804
Advertising and marketing		11,782				8,824				7,382				9,572				8,726
Professional fees		6,484				6,649				8,879				6,786				7,510
Amortization of other intangible assets		997				1,004				1,028				1,068				1,141
FDIC insurance		4,598				4,362				4,324				3,877				3,874
OREO expense, net		980				2,926				599				590				739
Other:
Commissions - 3rd party brokers		1,174				1,252				1,057				990				1,033
Postage		2,567				1,866				1,427				1,814				2,080
Miscellaneous		16,630				16,165				15,291				14,956				15,978
Total other expense		20,371				19,283				17,775				17,760				19,091
Total Non-Interest Expense		$	206,769			$	194,349			$	196,580			$	183,575			$	183,544

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)		2018				2018				2017				2017				2017
Allowance for loan losses at beginning of period		$	139,503			$	137,905			$	133,119			$	129,591			$	125,819
Provision for credit losses		5,043				8,346				7,772				7,942				8,952
Other adjustments (1)		(44		)		(40		)		698				(39		)		(30		)
Reclassification (to) from allowance for unfunded lending-related commitments		—				26				7				94				106
Charge-offs:
Commercial		2,210				2,687				1,340				2,265				913
Commercial real estate		155				813				1,001				989				1,985
Home equity		612				357				728				968				1,631
Residential real estate		180				571				542				267				146
Premium finance receivables - commercial		3,254				4,721				2,314				1,716				1,878
Premium finance receivables - life insurance		—				—				—				—				—
Consumer and other		459				129				207				213				175
Total charge-offs		6,870				9,278				6,132				6,418				6,728
Recoveries:
Commercial		666				262				235				801				561
Commercial real estate		2,387				1,687				1,037				323				276
Home equity		171				123				359				178				144
Residential real estate		1,522				40				165				55				54
Premium finance receivables - commercial		975				385				613				499				404
Premium finance receivables - life insurance		—				—				—				—				—
Consumer and other		49				47				32				93				33
Total recoveries		5,770				2,544				2,441				1,949				1,472
Net charge-offs		(1,100		)		(6,734		)		(3,691		)		(4,469		)		(5,256		)
Allowance for loan losses at period end		$	143,402			$	139,503			$	137,905			$	133,119			$	129,591
Allowance for unfunded lending-related commitments at period end		1,243				1,243				1,269				1,276				1,705
Allowance for credit losses at period end		$	144,645			$	140,746			$	139,174			$	134,395			$	131,296
Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial		0.09		%		0.14		%		0.07		%		0.09		%		0.02		%
Commercial real estate		(0.14		)		(0.05		)		0.00				0.04				0.11
Home equity		0.29				0.15				0.22				0.46				0.85
Residential real estate		(0.64		)		0.26				0.18				0.11				0.05
Premium finance receivables - commercial		0.34				0.68				0.26				0.18				0.23
Premium finance receivables - life insurance		0.00				0.00				0.00				0.00				0.00
Consumer and other		1.21				0.26				0.52				0.37				0.45
Total loans, net of unearned income, excluding covered loans		0.02		%		0.13		%		0.07		%		0.08		%		0.10		%
Net charge-offs as a percentage of the provision for credit losses		21.81		%		80.69		%		47.49		%		56.27		%		58.71		%
Loans at period-end		$	22,610,560			$	22,062,134			$	21,640,797			$	20,912,781			$	20,743,332
Allowance for loan losses as a percentage of loans at period end		0.63		%		0.63		%		0.64		%		0.64		%		0.62		%
Allowance for credit losses as a percentage of loans at period end		0.64		%		0.64		%		0.64		%		0.64		%		0.63		%

1. Includes $742,000 of allowance for covered loan losses reclassified as a result of the termination of all existing loss share agreements with the FDIC during the fourth quarter of 2017.

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)	2018				2018				2017 (3)				2017				2017
Loans past due greater than 90 days and still accruing(1):
Commercial	$	—			$	—			$	—			$	—			$	—
Commercial real estate	—				—				—				—				—
Home equity	—				—				—				—				—
Residential real estate	—				—				3,278				—				179
Premium finance receivables - commercial	5,159				8,547				9,242				9,584				5,922
Premium finance receivables - life insurance	—				—				—				6,740				1,046
Consumer and other	224				207				40				159				63
Total loans past due greater than 90 days and still accruing	5,383				8,754				12,560				16,483				7,210
Non-accrual loans(2):
Commercial	18,388				14,007				15,696				13,931				10,191
Commercial real estate	19,195				21,825				22,048				14,878				16,980
Home equity	9,096				9,828				8,978				7,581				9,482
Residential real estate	15,825				17,214				17,977				14,743				14,292
Premium finance receivables - commercial	14,832				17,342				12,163				9,827				10,456
Premium finance receivables - life insurance	—				—				—				—				—
Consumer and other	563				720				740				540				439
Total non-accrual loans	77,899				80,936				77,602				61,500				61,840
Total non-performing loans:
Commercial	18,388				14,007				15,696				13,931				10,191
Commercial real estate	19,195				21,825				22,048				14,878				16,980
Home equity	9,096				9,828				8,978				7,581				9,482
Residential real estate	15,825				17,214				21,255				14,743				14,471
Premium finance receivables - commercial	19,991				25,889				21,405				19,411				16,378
Premium finance receivables - life insurance	—				—				—				6,740				1,046
Consumer and other	787				927				780				699				502
Total non-performing loans	$	83,282			$	89,690			$	90,162			$	77,983			$	69,050
Other real estate owned	18,925				18,481				20,244				17,312				16,853
Other real estate owned - from acquisitions	16,406				18,117				20,402				20,066				22,508
Other repossessed assets	305				113				153				301				532
Total non-performing assets	$	118,918			$	126,401			$	130,961			$	115,662			$	108,943
TDRs performing under the contractual terms of the loan agreement	$	57,249			$	39,562			$	39,683			$	26,972			$	28,008
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.25		%		0.20		%		0.23		%		0.22		%		0.16		%
Commercial real estate	0.29				0.33				0.34				0.23				0.27
Home equity	1.53				1.57				1.35				1.13				1.38
Residential real estate	1.77				1.98				2.55				1.87				1.90
Premium finance receivables - commercial	0.71				1.00				0.81				0.73				0.62
Premium finance receivables - life insurance	—				—				—				0.18				0.03
Consumer and other	0.65				0.87				0.72				0.53				0.44
Total loans, net of unearned income	0.37		%		0.41		%		0.42		%		0.37		%		0.33		%
Total non-performing assets as a percentage of total assets	0.40		%		0.44		%		0.47		%		0.42		%		0.40		%
Allowance for loan losses as a percentage of total non-performing loans	172.19		%		155.54		%		152.95		%		170.70		%		187.68		%

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 $8.1 million, $8.1 million, $10.1 million, $6.2 million and $5.1 million as of June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017, respectively.
3. Includes $2.6 million of non-performing loans and $2.9 million of other real estate owned reclassified from covered assets as a result of the termination of all existing loss share agreements with the FDIC during the fourth quarter of 2017.