Segment Information

The Company’s operations consist of three primary segments: community banking, specialty finance and wealth management.

The three reportable segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies. In addition, each segment’s customer base has varying characteristics and each segment has a different regulatory environment. While the Company’s management monitors each of the fifteen bank subsidiaries’ operations and profitability separately, these subsidiaries have been aggregated into one reportable operating segment due to the similarities in products and services, customer base, operations, profitability measures, and economic characteristics.

For purposes of internal segment profitability, management allocates certain intersegment and parent company balances. Management allocates a portion of revenues to the specialty finance segment related to loans and leases originated by the specialty finance segment and sold or assigned to the community banking segment. Similarly, for purposes of analyzing the contribution from the wealth management segment, management allocates a portion of the net interest income earned by the community banking segment on deposit balances of customers of the wealth management segment to the wealth management segment. See Note 10 — Deposits, for more information on these deposits. Finally, expenses incurred at the Wintrust parent company are allocated to each segment based on each segment's risk-weighted assets.

The segment financial information provided in the following tables has been derived from the internal reporting system used by management to monitor and manage the financial performance of the Company. The accounting policies of the segments are substantially similar to those described in “Summary of Significant Accounting Policies” in Note 1 of the Company’s 2017 Form 10-K. The Company evaluates segment performance based on after-tax profit or loss and other appropriate profitability measures common to each segment.

The following is a summary of certain operating information for reportable segments:



	Three months ended						$ Change in Contribution			% Change in Contribution
(Dollars in thousands)	September 30, 2018			September 30, 2017			$ Change in Contribution			% Change in Contribution
Net interest income:
Community Banking	$	202,435		$	176,526		$	25,909		15	%
Specialty Finance	36,398			30,501			5,897			19
Wealth Management	4,048			4,557			(509		)	(11	)
Total Operating Segments	242,881			211,584			31,297			15
Intersegment Eliminations	4,682			4,404			278			6
Consolidated net interest income	$	247,563		$	215,988		$	31,575		15	%
Non-interest income:
Community Banking	$	69,776		$	52,554		$	17,222		33	%
Specialty Finance	16,963			16,315			648			4
Wealth Management	23,535			20,371			3,164			16
Total Operating Segments	110,274			89,240			21,034			24
Intersegment Eliminations	(10,344		)	(9,509		)	(835		)	(9	)
Consolidated non-interest income	$	99,930		$	79,731		$	20,199		25	%
Net revenue:
Community Banking	$	272,211		$	229,080		$	43,131		19	%
Specialty Finance	53,361			46,816			6,545			14
Wealth Management	27,583			24,928			2,655			11
Total Operating Segments	353,155			300,824			52,331			17
Intersegment Eliminations	(5,662		)	(5,105		)	(557		)	(11	)
Consolidated net revenue	$	347,493		$	295,719		$	51,774		18	%
Segment profit:
Community Banking	$	63,735		$	44,799		$	18,936		42	%
Specialty Finance	22,971			17,043			5,928			35
Wealth Management	5,242			3,784			1,458			39
Consolidated net income	$	91,948		$	65,626		$	26,322		40	%
Segment assets:
Community Banking	$	24,590,027		$	22,426,049		$	2,163,978		10	%
Specialty Finance	4,897,664			4,305,960			591,704			14
Wealth Management	655,040			626,153			28,887			5
Consolidated total assets	$	30,142,731		$	27,358,162		$	2,784,569		10	%



	Nine months ended						$ Change in Contribution			% Change in Contribution
(Dollars in thousands)	September 30, 2018			September 30, 2017			$ Change in Contribution			% Change in Contribution
Net interest income:
Community Banking	$	583,926		$	499,135		$	84,791		17	%
Specialty Finance	100,104			85,871			14,233			17
Wealth Management	12,729			14,532			(1,803		)	(12	)
Total Operating Segments	696,759			599,538			97,221			16
Intersegment Eliminations	14,056			13,439			617			5
Consolidated net interest income	$	710,815		$	612,977		$	97,838		16	%
Non-interest income:
Community Banking	$	192,028		$	160,277		$	31,751		20	%
Specialty Finance	49,005			44,192			4,813			11
Wealth Management	69,789			61,746			8,043			13
Total Operating Segments	310,822			266,215			44,607			17
Intersegment Eliminations	(29,980		)	(27,747		)	(2,233		)	(8	)
Consolidated non-interest income	$	280,842		$	238,468		$	42,374		18	%
Net revenue:
Community Banking	$	775,954		$	659,412		$	116,542		18	%
Specialty Finance	149,109			130,063			19,046			15
Wealth Management	82,518			76,278			6,240			8
Total Operating Segments	1,007,581			865,753			141,828			16
Intersegment Eliminations	(15,924		)	(14,308		)	(1,616		)	(11	)
Consolidated net revenue	$	991,657		$	851,445		$	140,212		16	%
Segment profit:
Community Banking	$	187,395		$	128,502		$	58,893		46	%
Specialty Finance	61,482			47,990			13,492			28
Wealth Management	14,632			12,409			2,223			18
Consolidated net income	$	263,509		$	188,901		$	74,608		39	%