EX-99.1

EX-99.1 2 d285321dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Wintrust Financial Corporation

727 North Bank Lane, Lake Forest, Illinois 60045

News Release


FOR IMMEDIATE RELEASE		January 18, 2012

FOR MORE INFORMATION CONTACT:

Edward J. Wehmer, President & Chief Executive Officer

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

(847) 615-4096

Web site address: www.wintrust.com

WINTRUST FINANCIAL CORPORATION REPORTS FOURTH QUARTER 2011 NET INCOME OF $19.2

MILLION, AN INCREASE OF 35% AND RECORD FULL YEAR 2011 NET INCOME OF $77.6 MILLION

LAKE FOREST, ILLINOIS – Wintrust Financial Corporation (“Wintrust” or “the Company”) (Nasdaq WTFC) announced net income of $19.2 million or $0.41 per diluted common share for the fourth quarter of 2011 compared to net income of $14.2 million or ($0.06) per diluted common share for the fourth quarter of 2010. The Company recorded net income of $77.6 million or $1.67 per diluted common share for the full year of 2011 compared to net income of $63.3 million or $1.02 per diluted common share for the full year of 2010.

The Company’s total assets of $15.9 billion at December 31, 2011 increased $1.9 billion from December 31, 2010. Total deposits as of December 31, 2011 were $12.3 billion, an increase of $1.5 billion from December 31, 2010. Noninterest bearing deposits increased by $584 million or 49% since December 31, 2010, while NOW, wealth management, money market and savings deposits increased $914 million or 19% during the same time period. Total time certificates of deposit remained essentially unchanged at December 31, 2011 compared to December 31, 2010. Total loans, including loans held for sale but excluding covered loans, were $10.8 billion as of December 31, 2011, an increase of $871 million over December 31, 2010.

Edward J. Wehmer, President and Chief Executive Officer, commented, “Our reported fourth quarter net income of $19.2 million caps a record year of earnings for the Company. Full year net income for 2011 of $77.6 million represents our highest reported net income in the history of Wintrust. The fourth quarter of 2011 was highlighted by solid loan growth, an increase in net interest margin and net interest income, growth of pre-tax adjusted earnings, continued improvement in credit quality, and continued favorable shifting in the mix of the deposit funding base.

Total loans outstanding at December 31, 2011, excluding covered loans but including loans held for sale, increased $356 million from September 30, 2011. This growth was primarily comprised of $210 million of commercial and commercial real-estate and $107 million of mortgage loans held for sale. Funding of this loan

growth was provided by using existing liquidity at each of our banking affiliates as total deposits outstanding remained the same as September 30, 2011. While our overall level of deposits remained the same as the prior quarter, our mix of deposits improved due to both a more desirable mix of deposits from our core customers and to the replacement of approximately $70 million of matured certificates of deposits related to FDIC-assisted acquired banks with non-maturity deposit products. In the fourth quarter, the $371 million growth in non-maturity core deposits slightly more than offset the $370 million decline in certificates of deposits during the period. This movement has helped improve the Company’s deposit mix as certificates of deposit at December 31, 2011 make up only 40% of total deposits, down from 45% at December 31, 2010. Additionally, non-interest bearing demand deposits now comprise 15% of total deposits, up from 11% at December 31, 2010.

As a result of the solid loan growth and improved net interest margin, net interest income increased in the fourth quarter by $6 million over the third quarter of 2011. The Company’s net interest margin improved to 3.45% for the fourth quarter of 2011, compared to 3.37% in the previous quarter. Net interest income and net interest margin for the full year of 2011 were $461 million and 3.42%, respectively, compared to $416 million and 3.37% for the full year of 2010. The growth in net interest income in the fourth quarter of 2011 contributed to continued improvement in pre-tax adjusted earnings, one of our main internal measurements of profitability.”

Commenting on credit quality, Mr. Wehmer noted, “The Company’s credit quality metrics improved during the quarter as non-performing loans as a percent of total loans decreased to 1.14%, the lowest level reported since the end of the fourth quarter of 2007. Total non-performing loans decreased to $120 million at December 31, 2011, down from $142 million at December 31, 2010 and down from $134 million at September 30, 2011. Non-performing loan inflows during the fourth quarter of 2011 declined to $25 million, the lowest amount in the past eight quarters, down from $48 million in the fourth quarter of 2010 and $40 million in the third quarter of 2011. Total allowance for loan losses as a percentage of non-performing loans rose to 92% at December 31, 2011, the highest level since September 30, 2007.

Total non-performing assets, which includes other real estate owned, declined to $207 million, down from $213 million at December 31, 2010 and $231 million at September 30, 2011. During the fourth quarter of 2011, excluding the provision for covered loan losses, the Company recorded a provision for loan losses of $17 million, net charge-offs of $25 million and other real-estate owned operating charges of $9 million.”

Turning to 2012, Mr. Wehmer noted, “We expect loan growth to continue in 2012 which should allow the Company to expand the franchise organically as our loan pipelines remain strong. This should allow us to return to an asset-driven business model similar to our pre ‘Rope-A-Dope’ days prior to 2006. We also expect 2012 to be a very active year industry-wide for acquisition opportunities for both FDIC-assisted and unassisted banks as well as individual branches and lines of business.”

In closing, Mr. Wehmer added, “We have ended 2011 well positioned to take advantage of these growth opportunities. We will continue to be disciplined in our approach to growth. Given proper execution of our objectives, Wintrust can be the financial institution of choice to allow any customer, as we say, to ‘HAVE IT ALL’.”

The graphs below depict changes in the level of non-performing loans, excluding covered loans, over the last five quarters. The following metrics, for the last five quarters, are diagrammed below: total non-performing loans, non-performing loans as a percent of total loans, non-performing loan inflows and allowance for loan losses as a percent of total non-performing loans.

LOGO

Wintrust’s key operating measures and growth rates for the fourth quarter of 2011, as compared to the sequential and linked quarters are shown in the table below:


										% or⁽⁴⁾ basis point (bp) change from 3rd Quarter 2011			% or basis point (bp) change from 4th Quarter 2010


	Three Months Ended
	December 31, 2011			September 30, 2011			December 31, 2010
Net income	$	19,221		$	30,202		$	14,205			(36	)%		35	%
Net income per common share – diluted	$	0.41		$	0.65		$	(0.06	)		(37	)%		783	%

Pre-tax adjusted earnings ⁽²⁾	$	61,341		$	60,936		$	57,675			1	%		6	%
Net revenue ⁽¹⁾	$	169,559		$	185,657		$	157,138			(9	)%		8	%
Net interest income	$	124,647		$	118,410		$	112,677			5	%		11	%

Net interest margin⁽²⁾		3.45	%		3.37	%		3.46	%		8	bp		(1	)bp
Net overhead ratio⁽³⁾		1.83	%		1.00	%		1.73	%		83	bp		10	bp
Return on average assets		0.48	%		0.77	%		0.40	%		(29	)bp		8	bp
Return on average common equity		4.87	%		7.94	%		(0.66	)%		(307	)bp		553	bp

At end of period
Total assets	$	15,893,808		$	15,914,804		$	13,980,156			(1	)%		14	%
Total loans, excluding loans held-for-sale, excluding covered loans	$	10,521,377		$	10,272,711		$	9,599,886			10	%		10	%
Total loans, including loans held-for-sale, excluding covered loans	$	10,841,901		$	10,485,747		$	9,971,333			14	%		9	%
Total deposits	$	12,307,267		$	12,306,008		$	10,803,673			—	%		14	%
Total shareholders’ equity	$	1,543,533		$	1,528,187		$	1,436,549			4	%		7	%

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

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

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

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

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

Items Impacting Comparative Financial Results: Acquisitions and Capital

Acquisitions

On September 30, 2011, the Company completed its acquisition of Elgin State Bancorp, Inc. (“ESBI”). ESBI was the parent company of Elgin State Bank, which operated three banking locations in Elgin, Illinois. As part of the transaction, Elgin State Bank merged into the Company’s wholly-owned subsidiary bank, St. Charles Bank & Trust Company (“St. Charles”), and the three acquired banking locations are operating as branches of St. Charles under the brand name Elgin State Bank. Elgin State Bank had approximately $262 million in assets and $240 million in deposits as of the acquisition date, prior to purchase accounting adjustments. The Company recorded goodwill of $5.0 million on the acquisition.

On July 8, 2011, the Company announced that its wholly-owned subsidiary bank, Northbrook Bank & Trust Company (“Northbrook”), acquired certain assets and liabilities and the banking operations of First Chicago Bank & Trust (“First Chicago”) in an FDIC-assisted transaction. First Chicago operated seven locations in Illinois: three in Chicago and one each in Bloomingdale, Itasca, Norridge and Park Ridge.

On July 1, 2011, the Company completed its acquisition of Great Lakes Advisors, Inc. (“Great Lakes Advisors”), a Chicago-based investment manager with approximately $2.4 billion in assets under management. The Company recorded goodwill of $15.7 million on the acquisition. Great Lakes Advisors merged with Wintrust’s existing asset management business, Wintrust Capital Management, LLC and operates as “Great Lakes Advisors, LLC, a Wintrust Wealth Management Company”. Wintrust Wealth Management, which includes Great Lakes Advisors, Wayne Hummer Investments and the Chicago Trust Company, has $13.8 billion assets under administration at December 31, 2011.

On April 13, 2011, the Company announced the acquisition of certain assets and the assumption of certain liabilities of the mortgage banking business of River City Mortgage, LLC (“River City”) of Bloomington, Minnesota. With offices in Minnesota, Nebraska and North Dakota, River City originated nearly $500 million in mortgage loans in 2010.

On March 25, 2011, the Company announced that its wholly-owned subsidiary bank, Advantage National Bank Group (“Advantage”) acquired certain assets and liabilities and the banking operations of The Bank of Commerce (“TBOC”) in an FDIC-assisted transaction. TBOC operated one location in Wood Dale, Illinois. Advantage subsequently changed its name to Schaumburg Bank and Trust Company, N.A. (“Schaumburg”).

On February 4, 2011, the Company announced that its wholly-owned subsidiary bank, Northbrook, acquired certain assets and liabilities and the banking operations of Community First Bank-Chicago (“CFBC”) in an FDIC-assisted transaction. CFBC operated one location in Chicago, Illinois.

On February 3, 2011, the Company announced the acquisition of certain assets and the assumption of certain liabilities of the mortgage banking business of Woodfield Planning Corporation (“Woodfield”) of Rolling Meadows, Illinois. With offices in Rolling Meadows, Illinois and Crystal Lake, Illinois, Woodfield originated approximately $180 million in mortgage loans in 2010.

On August 17, 2010, the Company announced that its wholly-owned subsidiary bank, Wheaton Bank & Trust Company (“Wheaton”) signed a Branch Purchase and Assumption Agreement whereby it agreed to acquire a branch of an unaffiliated bank located in Naperville, Illinois. The transaction closed on October 22, 2010 and the acquired operations are operating as Naperville Bank & Trust. Through this transaction, Wheaton acquired approximately $23 million of deposits, approximately $11 million of performing loans, the property, bank facility and various other assets.

On August 6, 2010, the Company announced that its wholly-owned subsidiary bank, Northbrook, in an FDIC-assisted transaction, had acquired certain assets and liabilities and the banking operations of Ravenswood Bank (“Ravenswood”). Ravenswood operated one location in Chicago, Illinois and one in Mount Prospect, Illinois.

On April 23, 2010, the Company announced that Northbrook and Wheaton, in two FDIC-assisted transactions, had acquired certain assets and liabilities and the banking operations of Lincoln Park Savings Bank (“Lincoln Park”) and Wheatland Bank (“Wheatland”), respectively. Lincoln Park operated four locations in Chicago, Illinois. Wheatland had one location in Naperville, Illinois.

Summary of FDIC-assisted Transactions

•

Northbrook assumed approximately $887 million of the outstanding deposits and approximately $959 million of assets of First Chicago on July 8, 2011, prior to purchase accounting adjustments. A bargain purchase gain of $27.4 million was recognized on this transaction.

•

Schaumburg assumed approximately $161 million of the outstanding deposits and approximately $163 million of assets of TBOC on March 25, 2011, prior to purchase accounting adjustments. A bargain purchase gain of $8.6 million was recognized on this transaction.

•

Northbrook assumed approximately $50 million of the outstanding deposits and approximately $51 million of assets of CFBC on February 4, 2011, prior to purchase accounting adjustments. A bargain purchase gain of $2.0 million was recognized on this transaction.

•

Northbrook assumed approximately $120 million of the outstanding deposits and approximately $188 million of assets of Ravenswood on August 6, 2010, prior to purchase accounting adjustments. A bargain purchase gain of $6.8 million was recognized on this transaction.

•

Northbrook assumed approximately $160 million of the outstanding deposits and approximately $170 million of assets of Lincoln Park on April 23, 2010, prior to purchase accounting adjustments. A bargain purchase gain of $4.2 million was recognized on this transaction.

•

Wheaton assumed approximately $400 million of the outstanding deposits and approximately $370 million of assets of Wheatland on April 23, 2010, prior to purchase accounting adjustments. A bargain purchase gain of $22.3 million was recognized on this transaction.

Loans comprise the majority of the assets acquired in the FDIC-assisted transactions and are subject to loss sharing agreements with the FDIC where the FDIC has agreed to reimburse the Company for 80% of losses incurred on the purchased loans. Additionally, the loss share agreements with the FDIC require the Company to reimburse the FDIC in the event that actual losses on covered assets are lower than the original loss estimates agreed upon with the FDIC with respect to such assets in the loss share agreements. We refer to the loans subject to these loss-sharing agreements as “covered loans.” We use the term “covered assets” to refer to the total of covered loans, covered OREO and certain other covered assets. The agreements with the FDIC require that the Company follow certain servicing procedures or risk losing FDIC reimbursement of losses related to covered assets.

Capital Ratios

As of December 31, 2011, the Company’s estimated capital ratios were 13.2% for total risk-based capital, 12.0% for tier 1 risk-based capital and 9.4% for leverage, well above the well capitalized guidelines. Additionally, the Company’s tangible common equity ratio was 7.5% at December 31, 2011.

Financial Performance Overview – Fourth quarter of 2011

For the fourth quarter of 2011, net interest income totaled $124.6 million, an increase of $12.0 million as compared to the fourth quarter of 2010 and $6.2 million as compared to the third quarter of 2011. The increases in net interest income on both a linked and sequential quarter basis are the result of balance sheet growth:

•

Average earning assets for the fourth quarter of 2011 increased by $1.4 billion compared to the fourth quarter of 2010. Average earning asset growth over the past 12 months was primarily a result of the $885.1 million increase in average loans, $314.5 million of average covered loan growth from the FDIC-assisted bank acquisitions and a $206.7 million increase in average liquidity management and other earning assets. The $885.1 million increase in average loans was, in turn, comprised of a $408.6 million increase in commercial and industrial loans, a $211.1 million increase in life insurance premium finance loans, a $210.6 million increase in commercial insurance premium finance loans, a $163.5 million increase in commercial real estate loans, and an increase in mortgage warehouse lending of $10.6 million, partially offset by a decrease in mortgages held for sale of $95.3 million and a net decrease in all other loans of $24.0 million. The decrease in all other loans was primarily related to home equity loans. The shift in growth over the past 12 months toward commercial and industrial loans is a reflection of the commercial initiatives the Company has implemented. The average earning asset growth of $1.4 billion over the past 12 months was primarily funded by a $723.9 million increase in the average balances of interest-bearing deposits, an increase in the average balance of net free funds of $413.9 million and an increase in wholesale funding of $268.4 million.

•

Average earning assets for the fourth quarter of 2011 increased by $402.3 million compared to the third quarter of 2011. Average earning asset growth over the past three months was primarily the result of a $434.0 million increase in average loans and covered loans partially offset by $31.7 million decrease in average liquidity management and other earning assets. Liquidity management assets include available-for-sale securities, interest earning deposits with banks, federal funds sold and securities purchased under resale agreements. Growth in average loans was due to a $163.0 million increase in commercial and industrial loans as a result of the Company’s commercial banking initiative and the Elgin State Bank acquisition. Additionally, increases totaling $228.3 million in mortgages held for sale and mortgage warehouse lending as residential originations increased slightly from prior quarters in the fourth quarter of 2011 as a result of lower mortgage interest rates. The average earning asset growth of $402.3 million over the past three months was primarily funded by an increase in the average balance of net free funds of $288.5 million and a $120.2 million increase in deposits.

The net interest margin for the fourth quarter of 2011 was 3.45% compared to 3.46% in the fourth quarter of 2010 and 3.37% in the third quarter of 2011. The changes in net interest margin on both a linked and sequential quarter basis are the result of:

•

The one basis point decrease in the fourth quarter of 2011 compared to the fourth quarter of 2010 was primarily attributable to the negative impact of both competitive and economic pricing pressures on the commercial and industrial and commercial premium finance portfolios during 2011 and a decrease in accretable discount recognized as interest income on the purchased life insurance premium portfolio as prepayments declined. Offsetting the lower yield on loans was a 38 basis point decline in the cost of interest-bearing deposits over the last 12 months and an increase in yield on the covered loan portfolio.

•

The eight basis point increase in net interest margin in the fourth quarter of 2011 compared to the third quarter of 2011 resulted from positive repricing of retail interest-bearing deposits, the decline in interest expense due to our new interest rate swap agreements on certain trust preferred debentures and higher yields on our covered loan portfolio that more than offset the very low yield on excess liquidity and the lower yield on the non-covered loan portfolio. Pricing pressures both competitive and economic, have negatively impacted the yield on total loans over the past four quarters.

Non-interest income totaled $44.9 million in the fourth quarter of 2011, increasing $451,000, or 1%, compared to the fourth quarter of 2010 and decreasing $22.3 million, or 33%, compared to the third quarter of 2011. The increase in the fourth quarter of 2011 compared to the fourth quarter of 2010 was primarily attributable to higher wealth management revenues and fees from covered call options, partially offset by decreases in mortgage banking revenue. The decrease in the fourth quarter of 2011 compared to the third quarter of 2011 is primarily attributable to the bargain purchase gains recorded during the third quarter of 2011 as a result of the First Chicago FDIC-assisted transaction. Mortgage banking revenue decreased $4.7 million when compared to the fourth quarter of 2010 and increased $3.6 million when compared to the third quarter of 2011. The decrease in the current quarter as compared to the fourth quarter of 2010 resulted primarily from a decrease in gains on sales of loans, which was driven by lower origination volumes in the current quarter. Mortgage banking revenue in the past two quarters has been restrained by negative mortgage servicing rights valuation adjustments totaling $1.0 million in the fourth quarter of 2011 and $2.6 million in the third quarter of 2011. Loans sold to the secondary market were $883.0 million in the fourth quarter of 2011 compared to $1.3 billion in the fourth quarter of 2010 and $642 million in the third quarter of 2011 (see “Non-Interest Income” section later in this document for further detail).

Non-interest expense totaled $118.8 million in the fourth quarter of 2011, increasing $12.6 million, or 12%, compared to the fourth quarter of 2010 and increasing $12.4 million compared to the third quarter of 2011. The increase compared to the fourth quarter of 2010 was primarily attributable to a $7.7 million increase in salaries and employee benefits. The increase in salaries and employee benefits was attributable to a $4.8 million increase in salaries caused by the addition of employees from the various acquisitions and larger staffing as the Company grows, a $1.2 million increase in bonus and commissions primarily attributable to the Company’s long-term incentive program approved by the Compensation Committee of the Board of Directors in August 2011 and a $1.7 million increase from employee benefits (primarily health plan and payroll taxes related).

Financial Performance Overview – Full Year 2011

The net interest margin for 2011 was 3.42%, compared to 3.37% in 2010. Average earning assets for 2011 increased by $1.1 billion compared to 2010. This average earning asset growth was primarily a result of the $671.9 million increase in average loans, $288.3 million of average covered loan growth from the FDIC-assisted bank acquisitions and a $169.7 million increase in liquidity management and other earning assets. Growth in the commercial and industrial portfolio of $330.8 million, in the life insurance premium finance portfolio of $266.8 million and in the commercial insurance premium finance loan portfolio of $145.4 accounted for the majority of the total average loan growth over the past 12 months. The average earning asset growth of $1.1 billion over the past 12 months was primarily funded by a $602.6 million increase in the average balances of interest-bearing deposits and an increase in the average balance of net free funds of $354.7 million.

Non-interest income totaled $189.7 million in 2011, decreasing $2.5 million, or 1%, compared to 2010. The change was primarily attributable to lower bargain purchase gains recorded during the current period relating to the FDIC-assisted transactions than during the comparable period as well as lower net gains on available-for-sale securities in 2011, partially offset by higher wealth management revenues and fees from covered call options in the current period. The Company recognized $1.8 million of net gains on available-for-sale securities in 2011 compared to a net gain of $9.8 million in 2010. The higher net gains in 2010 were primarily related to the sale of certain collateralized mortgage obligations during that period. Additionally, trading gains of $337,000 were recognized by the Company in 2011 compared to gains of $5.2 million in 2010. Lower trading income in 2011 resulted primarily from realizing larger market value increases in the prior year on certain collateralized mortgage obligations held in

trading. Mortgages originated for sale totaled approximately $2.5 billion in 2011 compared to approximately $3.7 billion in 2010. Partially offsetting a $13.2 million decrease in gains on sales of loans and other fees as a result of the lower origination volumes, was a $10.5 million positive impact from lower recourse obligation adjustments as the number of indemnification requests from investors declined, as well as lower loss estimates on future indemnification requests.

Non-interest expense totaled $420.4 million in 2011, increasing $37.9 million, or 10%, compared to 2010. The increase compared to 2010 was primarily attributable to a $22.0 million increase in salaries and employee benefits. The increase in salaries and employee benefits was, in turn, attributable to a $18.2 million increase in salaries related to the addition of employees from the various acquisitions and larger staffing related to organic Company growth, and a $6.2 million increase from employee benefits (primarily related to health plans and payroll taxes), partially offset by a $2.4 million decrease in bonus and commissions attributable to variable pay based revenue. Additionally, OREO related expenses increased $7.0 million, occupancy expense increased $4.3 million as a result of rent expense on additional leased premises and depreciation on owned locations, advertising and marketing expense increased $2.1 million primarily related to rebranding initiatives and professional fees increased $480,000, primarily related to increased legal costs related to non-performing assets and recent acquisitions.

The Company’s effective tax rate increased to 39.4% for 2011, up from 37.2% in 2010. This increase is primarily attributable to increases in state income taxes, including the impact of a 2.2% increase in the Illinois corporate tax rate on 2011 earnings.

Financial Performance Overview – Credit Quality

Non-performing loans, excluding covered loans, totaled $120.1 million, or 1.14% of total loans, at December 31, 2011, compared to $142.1 million, or 1.48% of total loans, at December 31, 2010 and $134.0 million, or 1.30% of total loans, at September 30, 2011. OREO, excluding covered OREO, of $86.5 million at December 31, 2011, increased $15.3 million compared to $71.2 million at December 31, 2010, and decreased $10.4 million compared to $96.9 million at September 30, 2011.

The provision for credit losses, excluding the provision for covered loan losses, totaled $16.6 million for the fourth quarter of 2011 compared to $28.8 million in the fourth quarter of 2010 and $28.3 million for the third quarter of 2011. Net charge-offs as a percentage of loans, excluding covered loans, for the fourth quarter of 2011 totaled 93 basis points on an annualized basis compared to 96 basis points on an annualized basis in the fourth quarter of 2010 and 105 basis points on an annualized basis in the third quarter of 2011. Net charge-offs, excluding covered loans, for the full year of 2011 totaled $103.3 million or 102 basis points compared to $109.7 million or 116 basis points in 2010. The provision for credit losses, excluding covered loans, totaled $97.9 million for the full year 2011 compared to $124.7 million for the full year 2010.

Excluding the allowance for covered loan losses, the allowance for credit losses at December 31, 2011 totaled $123.6 million, or 1.17% of total loans, compared to $118.0 million, or 1.23% of total loans, at December 31, 2010 and $132.1 million, or 1.29% of total loans, at September 30, 2011.

The lower level of provision for credit losses and the allowance for credit losses, reflect the improvements in credit quality metrics for the fourth quarter of 2011. The graphs on pages four and five highlight the level of total non-performing loans, the improvement seen in the reduced levels of inflows to non-performing loans and the improvement in the allowance for loan loss coverage of non-performing loans.

WINTRUST FINANCIAL CORPORATION

Selected Financial Highlights


	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2011			2010			2011			2010
Selected Financial Condition Data (at end of period):
Total assets	$	15,893,808		$	13,980,156
Total loans, excluding covered loans		10,521,377			9,599,886
Total deposits		12,307,267			10,803,673
Junior subordinated debentures		249,493			249,493
Total shareholders’ equity		1,543,533			1,436,549

Selected Statements of Income Data:
Net interest income	$	124,647		$	112,677		$	461,377		$	415,836
Net revenue ⁽¹⁾		169,559			157,138			651,075			607,996
Pre-tax adjusted earnings ⁽²⁾		61,341			57,675			225,451			199,033
Net income		19,221			14,205			77,575			63,329
Net income per common share – Basic	$	0.51		$	(0.06	)	$	2.08		$	1.08
Net income per common share – Diluted	$	0.41		$	(0.06	)	$	1.67		$	1.02

Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin ⁽²⁾		3.45	%		3.46	%		3.42	%		3.37	%
Non-interest income to average assets		1.11	%		1.24	%		1.27	%		1.42	%
Non-interest expense to average assets		2.94	%		2.97	%		2.82	%		2.82	%
Net overhead ratio ⁽³⁾		1.83	%		1.73	%		1.55	%		1.40	%
Efficiency ratio^{(2) (4)}		69.99	%		67.48	%		64.58	%		63.77	%
Return on average assets		0.48	%		0.40	%		0.52	%		0.47	%
Return on average common equity		4.87	%		(0.66	)%		5.11	%		3.01	%
Average total assets	$	16,014,209		$	14,199,351		$	14,920,160		$	13,556,612
Average total shareholders’ equity		1,531,936			1,442,754			1,484,720			1,352,135
Average loans to average deposits ratio (excluding covered loans)		86.6	%		89.0	%		88.3	%		91.1	%
Average loans to average deposits ratio (including covered loans)		91.9	%		92.1	%		92.8	%		93.4	%

*Common Share Data at end of period:*
Market price per common share	$	28.05		$	33.03
Book value per common share ⁽²⁾	$	34.23		$	32.73
Tangible common book value per share ⁽²⁾	$	26.76		$	25.80
Common shares outstanding		35,978,349			34,864,068
Other Data at end of period:⁽⁸⁾
Leverage Ratio⁽⁵⁾		9.4	%		10.1	%
Tier 1 capital to risk-weighted assets ⁽⁵⁾		12.0	%		12.5	%
Total capital to risk-weighted assets⁽⁵⁾		13.2	%		13.8	%
Tangible common equity ratio (TCE) ⁽²⁾⁽⁷⁾		7.5	%		8.0	%
Allowance for credit losses ⁽⁶⁾	$	123,612		$	118,037
Non-performing loans	$	120,084		$	142,132
Allowance for credit losses to total loans ⁽⁶⁾		1.17	%		1.23	%
Non-performing loans to total loans		1.14	%		1.48	%
Number of:
Bank subsidiaries		15			15
Non-bank subsidiaries		7			8
Banking offices		99			86

⁽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⁾	The efficiency ratio is calculated by dividing total non-interest expense by tax-equivalent net revenue (less securities gains or losses). A lower ratio indicates more efficient revenue generation.

⁽⁵⁾	Capital ratios for current quarter-end are estimated.

⁽⁶⁾	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.

⁽⁷⁾	Total shareholders’ equity minus preferred stock and total intangible assets divided by total assets minus total intangible assets.

⁽⁸⁾	Asset quality ratios exclude covered loans.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION


	(Unaudited)			(Unaudited)
	December 31,			September 30,			December 31,
(In thousands)	2011			2011			2010
Assets
Cash and due from banks	$	148,012		$	147,270		$	153,690
Federal funds sold and securities purchased under resale agreements		21,692			13,452			18,890
Interest-bearing deposits with other banks		749,287			1,101,353			865,575
Available-for-sale securities, at fair value		1,291,797			1,267,682			1,496,302
Trading account securities		2,490			297			4,879
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		100,434			99,749			82,407
Brokerage customer receivables		27,925			27,935			24,549
Mortgage loans held-for-sale, at fair value		306,838			204,081			356,662
Mortgage loans held-for-sale, at lower of cost or market		13,686			8,955			14,785
Loans, net of unearned income, excluding covered loans		10,521,377			10,272,711			9,599,886
Covered loans		651,368			680,075			334,353

Total loans		11,172,745			10,952,786			9,934,239
Less: Allowance for loan losses		110,381			118,649			113,903
Less: Allowance for covered loan losses		12,977			12,496			—

Net loans		11,049,387			10,821,641			9,820,336
Premises and equipment, net		431,512			412,478			363,696
FDIC indemnification asset		344,251			379,306			118,182
Accrued interest receivable and other assets		444,912			468,711			366,438
Trade date securities receivable		634,047			637,112			—
Goodwill		305,468			302,369			281,190
Other intangible assets		22,070			22,413			12,575

Total assets	$	15,893,808		$	15,914,804		$	13,980,156


Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	1,785,433		$	1,631,709		$	1,201,194
Interest bearing		10,521,834			10,674,299			9,602,479

Total deposits		12,307,267			12,306,008			10,803,673

Notes payable		52,822			3,004			1,000
Federal Home Loan Bank advances		474,481			474,570			423,500
Other borrowings		443,753			448,082			260,620
Secured borrowings - owed to securitization investors		600,000			600,000			600,000
Subordinated notes		35,000			40,000			50,000
Junior subordinated debentures		249,493			249,493			249,493
Trade date securities payable		47			73,874			—
Accrued interest payable and other liabilities		187,412			191,586			155,321

Total liabilities		14,350,275			14,386,617			12,543,607


Shareholders’ Equity:
Preferred stock		49,768			49,736			49,640
Common stock		35,982			35,926			34,864
Surplus		1,001,316			997,854			965,203
Treasury stock		(112	)		(68	)		—
Retained earnings		459,457			441,268			392,354
Accumulated other comprehensive (loss) income		(2,878	)		3,471			(5,512	)

Total shareholders’ equity		1,543,533			1,528,187			1,436,549

Total liabilities and shareholders’ equity	$	15,893,808		$	15,914,804		$	13,980,156

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


	Three Months Ended					Years Ended
	December 31,					December 31,
(In thousands, except per share data)	2011		2010			2011		2010
Interest income
Interest and fees on loans	$	143,514	$	144,652		$	552,938	$	547,896
Interest bearing deposits with banks		696		1,342			3,419		5,170
Federal funds sold and securities purchased under resale agreements		33		39			116		157
Securities		12,574		7,236			46,219		36,904
Trading account securities		6		11			44		394
Federal Home Loan Bank and Federal Reserve Bank stock		591		512			2,297		1,931
Brokerage customer receivables		203		170			760		655

Total interest income		157,617		153,962			605,793		593,107

Interest expense
Interest on deposits		19,685		27,853			87,938		123,779
Interest on Federal Home Loan Bank advances		4,186		4,038			16,320		16,520
Interest on notes payable and other borrowings		2,804		1,631			11,023		5,943
Interest on secured borrowings - owed to securitization investors		3,076		3,089			12,113		12,366
Interest on subordinated notes		176		233			750		995
Interest on junior subordinated debentures		3,043		4,441			16,272		17,668

Total interest expense		32,970		41,285			144,416		177,271

Net interest income		124,647		112,677			461,377		415,836
Provision for credit losses		18,817		28,795			102,638		124,664

Net interest income after provision for credit losses		105,830		83,882			358,739		291,172

Non-interest income
Wealth management		11,686		10,108			44,517		36,941
Mortgage banking		18,025		22,686			56,942		61,378
Service charges on deposit accounts		3,973		3,346			14,963		13,433
Gains on available-for-sale securities, net		309		159			1,792		9,832
Gain on bargain purchases		—		250			37,974		44,231
Trading gains		216		611			337		5,165
Other		10,703		7,301			33,173		21,180

Total non-interest income		44,912		44,461			189,698		192,160

Non-interest expense
Salaries and employee benefits		66,744		59,031			237,785		215,766
Equipment		5,093		4,384			18,267		16,529
Occupancy, net		7,975		5,927			28,764		24,444
Data processing		4,062		4,388			14,568		15,355
Advertising and marketing		3,207		1,881			8,380		6,315
Professional fees		3,710		4,775			16,874		16,394
Amortization of other intangible assets		1,062		719			3,425		2,739
FDIC insurance		3,244		4,572			14,143		18,028
OREO expenses, net		8,821		7,384			26,340		19,331
Other		14,850		13,140			51,858		47,624

Total non-interest expense		118,768		106,201			420,404		382,525

Income before taxes		31,974		22,142			128,033		100,807
Income tax expense		12,753		7,937			50,458		37,478

Net income	$	19,221	$	14,205		$	77,575	$	63,329

Preferred stock dividends and discount accretion	$	1,032	$	16,175		$	4,128	$	31,004

Net income (loss) applicable to common shares	$	18,189	$	(1,970	)	$	73,447	$	32,325

Net income (loss) per common share—Basic	$	0.51	$	(0.06	)	$	2.08	$	1.08

Net income (loss) per common share—Diluted	$	0.41	$	(0.06	)	$	1.67	$	1.02

Cash dividends declared per common share	$	—	$	—		$	0.18	$	0.18

Weighted average common shares outstanding		35,958		32,015			35,355		30,057
Dilutive potential common shares		8,480		—			8,636		1,513

Average common shares and dilutive common shares		44,438		32,015			43,991		31,570

SUPPLEMENTAL FINANCIAL MEASURES/RATIOS

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

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

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 5 quarters:


	Three Months Ended															Years Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
(Dollars and shares in thousands)	2011			2011			2011			2011			2010			2011			2010
Calculation of Net Interest Margin and Efficiency Ratio
(A) Interest Income (GAAP)	$	157,617		$	154,951		$	145,445		$	147,780		$	153,962		$	605,793		$	593,107
Taxable-equivalent adjustment:
- Loans		132			100			110			116			79			458			334
- Liquidity management assets		320			313			296			295			326			1,224			1,377
- Other earning assets		2			6			2			3			—			12			17

Interest Income—FTE	$	158,071		$	155,370		$	145,853		$	148,194		$	154,367		$	607,487		$	594,835
(B) Interest Expense (GAAP)		32,970			36,541			36,739			38,166			41,285			144,416			177,271

Net interest income—FTE	$	125,101		$	118,829		$	109,114		$	110,028		$	113,082		$	463,071		$	417,564

(C) Net Interest Income (GAAP) (A minus B)	$	124,647		$	118,410		$	108,706		$	109,614		$	112,677		$	461,377		$	415,836

(D) Net interest margin (GAAP)		3.44	%		3.36	%		3.38	%		3.46	%		3.44	%		3.41	%		3.35	%
Net interest margin—FTE		3.45	%		3.37	%		3.40	%		3.48	%		3.46	%		3.42	%		3.37	%
(E) Efficiency ratio (GAAP)		70.17	%		57.34	%		67.41	%		65.23	%		67.65	%		64.75	%		63.95	%
Efficiency ratio—FTE		69.99	%		57.21	%		67.22	%		65.05	%		67.48	%		64.58	%		63.77	%

Calculation of Tangible Common Equity ratio (at period end)
Total shareholders’ equity	$	1,543,533		$	1,528,187		$	1,473,386		$	1,453,253		$	1,436,549
Less: Preferred stock		(49,768	)		(49,736	)		(49,704	)		(49,672	)		(49,640	)
Less: Intangible assets		(327,538	)		(324,782	)		(294,833	)		(293,996	)		(293,765	)

(F) Total tangible common shareholders’ equity	$	1,166,227		$	1,153,669		$	1,128,849		$	1,109,585		$	1,093,144


Total assets	$	15,893,808		$	15,914,804		$	14,615,897		$	14,094,294		$	13,980,156
Less: Intangible assets		(327,538	)		(324,782	)		(294,833	)		(293,996	)		(293,765	)

(G) Total tangible assets	$	15,566,270		$	15,590,022		$	14,321,064		$	13,800,298		$	13,686,391


Tangible common equity ratio (F/G)		7.5	%		7.4	%		7.9	%		8.0	%		8.0	%

Calculation of Pre-Tax Adjusted Earnings
Income before taxes	$	31,974		$	50,046		$	18,965		$	27,048		$	22,142		$	128,033		$	100,807
Add: Provision for credit losses		18,817			29,290			29,187			25,344			28,795			102,638			124,664
Add: OREO expenses, net		8,821			5,134			6,577			5,808			7,384			26,340			19,331
Add: Recourse obligation on loans previously sold		986			266			(916	)		103			1,365			439			10,970
Add: Covered loan expense		944			336			806			745			342			2,831			689
Add: Mortgage servicing rights fair value adjustments		1,047			2,631			1,136			(141	)		(834	)		4,673			2,955
Less: (Gain) loss from investment partnerships		(723	)		1,439			240			(356	)		(499	)		600			(1,155	)
Less: Gain on bargain purchases		—			(27,390	)		(746	)		(9,838	)		(250	)		(37,974	)		(44,231	)
Less: Trading (gains) losses		(216	)		(591	)		30			440			(611	)		(337	)		(5,165	)
Less: Gains on available-for-sale securities, net		(309	)		(225	)		(1,152	)		(106	)		(159	)		(1,792	)		(9,832	)

Pre-tax adjusted earnings	$	61,341		$	60,936		$	54,127		$	49,047		$	57,675		$	225,451		$	199,033


Calculation of book value per share
Total shareholders’ equity	$	1,543,533		$	1,528,187		$	1,473,386		$	1,453,253		$	1,436,549
Less: Preferred stock		(49,768	)		(49,736	)		(49,704	)		(49,672	)		(49,640	)

(H) Total common equity	$	1,493,765		$	1,478,451		$	1,423,682		$	1,403,581		$	1,386,909


Actual common shares outstanding		35,978			35,924			34,988			34,947			34,864
Add: TEU conversion shares		7,666			7,666			7,342			6,696			7,512

(I) Common shares used for book value calculation		43,644			43,590			42,330			41,643			42,376


Book value per share (H/I)	$	34.23		$	33.92		$	33.63		$	33.70		$	32.73
Tangible common book value per share (F/I)	$	26.72		$	26.47		$	26.67		$	26.65		$	25.80

LOANS

Loan Portfolio Mix and Growth Rates


										% Growth
										From ⁽¹⁾			From
	December 31,			September 30,			December 31,			September 30,			December 31,
(Dollars in thousands)	2011			2011			2010			2011			2010
Balance:
Commercial	$	2,498,313		$	2,337,098		$	2,049,326			27	%		22	%
Commercial real-estate		3,514,261			3,465,321			3,338,007			6			5
Home equity		862,345			879,180			914,412			(8	)		(6	)
Residential real-estate		350,289			326,207			353,336			29			(1	)
Premium finance receivables - commercial		1,412,454			1,417,572			1,265,500			(1	)		12
Premium finance receivables - life insurance		1,695,225			1,671,443			1,521,886			6			11
Indirect consumer ⁽²⁾		64,545			62,452			51,147			13			26
Consumer and other		123,945			113,438			106,272			37			17

Total loans, net of unearned income, excluding covered loans	$	10,521,377		$	10,272,711		$	9,599,886			10	%		10	%
Covered loans		651,368			680,075			334,353			(17	)		95

Total loans, net of unearned income	$	11,172,745		$	10,952,786		$	9,934,239			8	%		12	%


Mix:
Commercial		22	%		21	%		21	%
Commercial real-estate		31			32			34
Home equity		8			8			9
Residential real-estate		3			3			3
Premium finance receivables - commercial		13			13			13
Premium finance receivables - life insurance		15			15			15
Indirect consumer ⁽²⁾		1			1			1
Consumer and other		1			1			1

Total loans, net of unearned income, excluding covered loans		94	%		94	%		97	%
Covered loans		6			6			3

Total loans, net of unearned income		100	%		100	%		100	%

⁽¹⁾	Annualized

⁽²⁾	Includes autos, boats, snowmobiles and other indirect consumer loans.

As of December 31, 2011


								> 90 Days		Allowance
			% of					Past Due		For Loan
			Total					and Still		Losses
(Dollars in thousands)	Balance		Balance			Nonaccrual		Accruing		Allocation
Commercial:
Commercial and industrial	$	1,450,451		24.2	%	$	16,154	$	—	$	18,787
Franchise		142,775		2.4			1,792		—		1,571
Mortgage warehouse lines of credit		180,450		3.0			—		—		1,409
Community Advantage - homeowner associations		77,504		1.3			—		—		194
Aircraft		20,397		0.3			—		—		110
Asset-based lending		465,737		7.7			1,072		—		7,705
Municipal		78,319		1.3			—		—		1,136
Leases		72,134		1.2			—		—		309
Other		2,125		0.1			—		—		16
Purchased non-covered commercial loans ⁽¹⁾		8,421		0.1			—		589		—

Total commercial	$	2,498,313		41.6	%	$	19,018	$	589	$	31,237


Commercial Real-Estate:
Residential construction	$	65,811		1.1	%	$	1,993	$	—	$	1,804
Commercial construction		169,876		2.8			2,158		—		4,512
Land		178,531		3.0			31,547		—		12,515
Office		554,446		9.2			10,614		—		6,929
Industrial		555,802		9.2			2,002		—		5,314
Retail		536,729		8.9			5,366		—		4,569
Multi-family		314,557		5.2			4,736		—		9,337
Mixed use and other		1,086,654		18.1			8,092		—		11,425
Purchased non-covered commercial real-estate ⁽¹⁾		51,855		0.9			—		2,198		—

Total commercial real-estate	$	3,514,261		58.4	%	$	66,508	$	2,198	$	56,405

Total commercial and commercial real-estate	$	6,012,574		100.0	%	$	85,526	$	2,787	$	87,642


Commercial real-estate - collateral location by state:
Illinois	$	2,913,288		82.9	%
Wisconsin		335,070		9.5

Total primary markets	$	3,248,358		92.4	%

Florida		57,527		1.6
Arizona		39,921		1.1
Indiana		43,322		1.2
Other (no individual state greater than 0.5%)		125,133		3.7

Total	$	3,514,261		100.0	%

(1)

Purchased 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
										From ⁽¹⁾			From
	December 31,			September 30,			December 31,			September 30,			December 31,
(Dollars in thousands)	2011			2011			2010			2011			2010
Balance:
Non-interest bearing	$	1,785,433		$	1,631,709		$	1,201,194			37	%		49	%
NOW		1,698,778			1,633,752			1,561,507			16			9
Wealth Management deposits ⁽²⁾		788,311			730,315			658,660			32			20
Money Market		2,263,253			2,190,117			1,759,866			13			29
Savings		888,592			867,483			744,534			10			19
Time certificates of deposit		4,882,900			5,252,632			4,877,912			(28	)		—

Total deposits	$	12,307,267		$	12,306,008		$	10,803,673			—	%		14	%


Mix:
Non-interest bearing		15	%		13	%		11	%
NOW		14			13			15
Wealth Management deposits ⁽²⁾		6			6			6
Money Market		18			18			16
Savings		7			7			7
Time certificates of deposit		40			43			45

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 Chicago Trust Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts of the Banks.

Deposit Maturity Analysis

As of December 31, 2011


											Weighted-
	Non-										Average
	Interest		Savings								Rate of
	Bearing		and				Time				Maturing Time
	and		Money		Wealth		Certificates		Total		Certificates
(Dollars in thousands)	NOW⁽¹⁾		Market ⁽¹⁾		Mgt. ⁽¹⁾		of Deposit		Deposits		of Deposit ⁽²⁾
1-3 months	$	3,484,211	$	3,151,845	$	788,311	$	1,031,409	$	8,455,776		1.02	%
4-6 months		—		—		—		878,084		878,084		1.10
7-9 months		—		—		—		745,054		745,054		1.28
10-12 months		—		—		—		585,214		585,214		1.02
13-18 months		—		—		—		615,599		615,599		1.35
19-24 months		—		—		—		388,425		388,425		1.45
24+ months		—		—		—		639,115		639,115		2.21

Total deposits	$	3,484,211	$	3,151,845	$	788,311	$	4,882,900	$	12,307,267		1.31	%

⁽¹⁾	Balances of non-contractual maturity deposits are shown as maturing in the earliest time frame. These deposits do not have contractual maturities and re-price in varying degrees to changes in interest rates.

⁽²⁾	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 fourth quarter of 2011 compared to the fourth quarter of 2010 (linked quarters):


	For the Three Months Ended December 31, 2011								For the Three Months Ended December 31, 2010
	For the Three Months Ended December 31, 2011								For the Three Months Ended December 31, 2010
(Dollars in thousands)	Average			Interest		Rate			Average			Interest		Rate
Liquidity management assets^{(1) (2) (7)}	$	3,051,850		$	14,215		1.85	%	$	2,844,351		$	9,455		1.32	%
Other earning assets ^{(2) (3) (7)}		28,828			210		2.90			29,676			183		2.45
Loans, net of unearned income^{(2) (4) (7)}		10,662,516			128,518		4.78			9,777,435			140,689		5.71
Covered loans		652,157			15,128		9.20			337,690			4,042		4.75

Total earning assets ⁽⁷⁾	$	14,395,351		$	158,071		4.36	%	$	12,989,152		$	154,369		4.72	%

Allowance for loan losses		(137,423	)							(116,447	)
Cash and due from banks		130,437								151,562
Other assets		1,625,844								1,175,084

Total assets	$	16,014,209							$	14,199,351


Interest-bearing deposits	$	10,563,090		$	19,685		0.74	%	$	9,839,223		$	27,853		1.12	%
Federal Home Loan Bank advances		474,549			4,186		3.50			415,260			4,038		3.86
Notes payable and other borrowings		468,139			2,804		2.38			244,044			1,631		2.65
Secured borrowings—owed to securitization investors		600,000			3,076		2.03			600,000			3,089		2.04
Subordinated notes		38,370			176		1.79			53,369			233		1.71
Junior subordinated notes		249,493			3,043		4.77			249,493			4,441		6.97

Total interest-bearing liabilities	$	12,393,641		$	32,970		1.05	%	$	11,401,389		$	41,285		1.43	%

Non-interest bearing deposits		1,755,446								1,148,208
Other liabilities		333,186								207,000
Equity		1,531,936								1,442,754

Total liabilities and shareholders’ equity	$	16,014,209							$	14,199,351


Interest rate spread ^{(5) (7)}							3.31	%							3.29	%
Net free funds/contribution⁽⁶⁾	$	2,001,710					0.14	%	$	1,587,763					0.17	%

Net interest income/Net interest margin ⁽⁷⁾				$	125,101		3.45	%				$	113,084		3.46	%

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

⁽²⁾	Interest income on tax-advantaged loans, trading securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the three months ended December 31, 2011 and 2010 were $454,000 and $405,000, respectively.

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

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

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

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

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

The net interest margin decreased by one basis point in the fourth quarter of 2011 compared to the fourth quarter of 2010. This decrease was primarily attributable to a 93 basis point decline in the yield on loans due to the negative impact of both competitive and economic pricing pressures on the commercial, commercial real estate and commercial insurance premium finance portfolios and a decrease in accretable discount recognized as interest income on the purchased life insurance premium portfolio as prepayments declined. Nearly offsetting the lower yield on loans was a 38 basis point decline in the cost of interest-bearing deposits over the last 12 months and an increase in the yield on covered loan portfolio.

The majority of covered loans are accounted for in accordance with ASC 310-30. As such, the yield on these loans at the acquisition date represents a fair value loan yield. In periods subsequent to the quarter of acquisition, the Company has experienced cash collections generally better than estimated for the initial valuation. Overall, expected losses and expected estimated lives have decreased, which has led to generally higher effective yields as estimated cash flows on the pools of loans has improved.


	For the Three Months Ended December 31, 2011								For the Three Months Ended September 30, 2011
(Dollars in thousands)	Average			Interest		Rate			Average			Interest		Rate
Liquidity management assets ^{(1) (2) (7)}	$	3,051,850		$	14,215		1.85	%	$	3,083,508		$	14,508		1.87	%
Other earning assets ^{(2) (3) (7)}		28,828			210		2.90			28,834			217		2.98
Loans, net of unearned income ^{(2) (4) (7)}		10,662,516			128,518		4.78			10,200,733			127,718		4.97
Covered loans		652,157			15,128		9.20			680,003			12,926		7.54

Total earning assets ⁽⁷⁾	$	14,395,351		$	158,071		4.36	%	$	13,993,078		$	155,369		4.41	%

Allowance for loan losses		(137,423	)							(128,848	)
Cash and due from banks		130,437								140,010
Other assets		1,625,844								1,522,187

Total assets	$	16,014,209							$	15,526,427


Interest-bearing deposits	$	10,563,090		$	19,685		0.74	%	$	10,442,886		$	21,893		0.83	%
Federal Home Loan Bank advances		474,549			4,186		3.50			486,379			4,166		3.40
Notes payable and other borrowings		468,139			2,804		2.38			461,141			2,874		2.47
Secured borrowings - owed to securitization investors		600,000			3,076		2.03			600,000			3,003		1.99
Subordinated notes		38,370			176		1.79			40,000			168		1.65
Junior subordinated notes		249,493			3,043		4.77			249,493			4,437		6.96

Total interest-bearing liabilities	$	12,393,641		$	32,970		1.05	%	$	12,279,899		$	36,541		1.18	%

Non-interest bearing deposits		1,755,446								1,553,769
Other liabilities		333,186								185,042
Equity		1,531,936								1,507,717

Total liabilities and shareholders’ equity	$	16,014,209							$	15,526,427


Interest rate spread ^{(5) (7)}							3.31	%							3.23	%
Net free funds/contribution ⁽⁶⁾	$	2,001,710					0.14	%	$	1,713,179					0.14	%

Net interest income/Net interest margin ⁽⁷⁾				$	125,101		3.45	%				$	118,828		3.37	%

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

⁽²⁾

Interest income on tax-advantaged loans, trading securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the three months ended December 31, 2011 was $454,000 and for the three months ended September 30, 2011 was $419,000.

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

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

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

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

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

The net interest margin increased by eight basis points in the fourth quarter of 2011 compared to the third quarter of 2011. This increase was primarily attributable to positive repricing of retail deposits, the decline in interest expense due to our new interest rate swap agreements, which replaced matured interest rate swap agreements, on certain trust preferred debentures and higher yields on our covered loan portfolio more than offsetting the very low yield on excess liquidity and the lower yield on the loan portfolio. Pricing pressures both competitive and economic, have negatively impacted the yield on total loans over the past four quarters.

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 year ended December 31, 2011 compared to the year ended December 31, 2010:


	For the Year Ended December 31, 2011								For the Year Ended December 31, 2010
(Dollars in thousands)	Average			Interest		Rate			Average			Interest		Rate
Liquidity management assets ^{(1) (2) (7)}	$	2,840,157		$	53,275		1.88	%	$	2,654,013		$	45,539		1.72	%
Other earning assets ^{(2) (3) (7)}		28,570			816		2.86			45,021			1,067		2.37
Loans, net of unearned income ^{(2) (4) (7)}		10,145,462			509,870		5.03			9,473,589			537,534		5.67
Covered loans		520,550			43,526		8.36			232,206			10,695		4.61

Total earning assets ⁽⁷⁾	$	13,534,739		$	607,487		4.49	%	$	12,404,829		$	594,835		4.80	%

Allowance for loan losses		(127,660	)							(111,503	)
Cash and due from banks		138,795								137,547
Other assets		1,374,286								1,125,739

Total assets	$	14,920,160							$	13,556,612


Interest-bearing deposits	$	10,012,522		$	87,938		0.88	%	$	9,409,950		$	123,779		1.32	%
Federal Home Loan Bank advances		449,874			16,320		3.63			418,981			16,520		3.94
Notes payable and other borrowings		384,256			11,023		2.87			229,569			5,943		2.59
Secured borrowings - owed to securitization investors		600,000			12,113		2.02			600,000			12,366		2.06
Subordinated notes		43,411			750		1.70			56,370			995		1.74
Junior subordinated notes		249,493			16,272		6.43			249,493			17,668		6.98

Total interest-bearing liabilities	$	11,739,556		$	144,416		1.23	%	$	10,964,363		$	177,271		1.61	%

Non-interest bearing deposits		1,481,594								984,416
Other liabilities		214,290								255,698
Equity		1,484,720								1,352,135
Total liabilities and shareholders’ equity	$	14,920,160							$	13,556,612


Interest rate spread ^{(5) (7)}							3.26	%							3.19	%
Net free funds/contribution ⁽⁶⁾	$	1,795,183					0.16	%	$	1,440,466					0.18	%

Net interest income/Net interest margin ⁽⁷⁾				$	463,071		3.42	%				$	417,564		3.37	%

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

⁽²⁾	Interest income on tax-advantaged loans, trading securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for both of the years ended December 31, 2011 and 2010 were $1.7 million.

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

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

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

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

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

The net interest margin for 2011 was 3.42%, compared to 3.37% in 2010. Average earning assets for 2011 increased by $1.1 billion compared to 2010. This average earning asset growth was primarily a result of the $671.9 million increase in average loans, $288.3 million of average covered loan growth from the FDIC-assisted bank acquisitions and a $186.1 million increase in liquidity management and other earning assets. Growth in the commercial and industrial portfolio of $301.8 million, in the life insurance premium finance portfolio of $266.8 million and in the commercial insurance premium finance loan portfolio of $145.4 accounted for the majority of the total average loan growth over the past 12 months. The average earning asset growth of $1.1 billion over the past 12 months was primarily funded by a $602.6 million increase in the average balances of interest-bearing deposits and an increase in the average balance of net free funds of $354.7 million.

NON-INTEREST INCOME

For the fourth quarter of 2011, non-interest income totaled $44.9 million, an increase of $451,000, or 1%, compared to the fourth quarter of 2010. The increase was primarily attributable to higher wealth management revenues and fees from covered call options, partially offset by decreases in mortgage banking revenue.

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

		$00,00000		$00,00000		$00,00000			$00,00000
	Three Months Ended
	December 31,				$			%
(Dollars in thousands)	2011		2010		Change			Change
Brokerage	$	5,960	$	6,641	$	(681	)		(10	)
Trust and asset management		5,726		3,467		2,259			65

Total wealth management		11,686		10,108		1,578			16

Mortgage banking		18,025		22,686		(4,661	)		(21	)
Service charges on deposit accounts		3,973		3,346		627			19
Gains on available-for-sale securities		309		159		150			94
Gain on bargain purchases		—		250		(250	)		(100	)
Trading gains		216		611		(395	)		(65	)
Other:
Fees from covered call options		5,377		1,074		4,303			NM
Bank Owned Life Insurance		681		811		(130	)		(16	)
Administrative services		789		715		74			10
Miscellaneous		3,856		4,701		(845	)		(18	)

Total Other		10,703		7,301		3,402			47


Total Non-Interest Income	$	44,912	$	44,461	$	451			1

		$00,00000		$00,00000		$00,00000			$00,00000
	Years Ended
	December 31,				$			%
(Dollars in thousands)	2011		2010		Change			Change
Brokerage	$	24,601	$	23,713	$	888			4
Trust and asset management		19,916		13,228		6,688			51

Total wealth management		44,517		36,941		7,576			21

Mortgage banking		56,942		61,378		(4,436	)		(7	)
Service charges on deposit accounts		14,963		13,433		1,530			11
Gains on available-for-sale securities		1,792		9,832		(8,040	)		(82	)
Gain on bargain purchases		37,974		44,231		(6,257	)		(14	)
Trading gains		337		5,165		(4,828	)		(93	)
Other:
Fees from covered call options		13,570		2,235		11,335			NM
Bank Owned Life Insurance		2,569		2,404		165			7
Administrative services		3,071		2,749		322			12
Miscellaneous		13,963		13,792		171			1

Total Other		33,173		21,180		11,993			57


Total Non-Interest Income	$	189,698	$	192,160	$	(2,462	)		(1	)

NM—Not Meaningful

The significant changes in non-interest income for the quarter ended December 31, 2011 compared to the quarter ended December 31, 2010 are discussed below.

Wealth management revenue is comprised of the trust and asset management revenue of The Chicago Trust Company and the asset management fees, brokerage commissions, trading commissions and insurance product commissions at Wayne Hummer Investments and Great Lakes Advisors. Wealth management revenue totaled $11.7 million in the fourth quarter of 2011 and $10.1 million in the fourth quarter of 2010, an increase of 16%. The increase is mostly attributable to additional revenues resulting from the acquisition of Great Lakes Advisors.

Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. For the quarter ended December 31, 2011, this revenue totaled $18.0 million, a decrease of $4.7 million when compared to the fourth quarter of 2010. Mortgages originated and sold totaled $883.0 million in the fourth quarter of 2011 compared to $1.3 billion in the fourth quarter of 2010. The decrease in mortgage banking revenue in the fourth quarter of 2011 as compared to the fourth quarter of 2010 resulted primarily from a decrease in gain on sales of loans, which was driven by lower origination volumes in the current quarter. Partially offsetting the decrease in gains on sales of loans and other fees was a $379,000 positive impact from lower recourse obligation adjustments as the number of indemnification requests from investors declined as well as lower loss estimates on future indemnification requests.

A summary of the mortgage banking revenue components is shown below:

Mortgage banking revenue


	Three Months Ended									Years Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(Dollars in thousands)	2011			2011			2010			2011			2010
Mortgage loans originated and sold	$	883,017		$	641,742		$	1,250,193		$	2,545,385		$	3,746,127

Mortgage loans serviced for others	$	958,749		$	952,257		$	942,224
Fair value of mortgage servicing rights (MSRs)	$	6,700		$	6,740		$	8,762
MSRs as a percentage of loans serviced		0.70	%		0.71	%		0.93	%

Gain on sales of loans and other fees	$	20,058		$	17,366		$	23,217		$	62,054		$	75,303
Mortgage servicing rights fair value adjustments		(1,047	)		(2,631	)		834			(4,673	)		(2,955	)
Recourse obligation adjustments on loans previously sold		(986	)		(266	)		(1,365	)		(439	)		(10,970	)

Total mortgage banking revenue	$	18,025		$	14,469		$	22,686		$	56,942		$	61,378


Gain on sales of loans and other fees as a percentage of loans sold		2.27	%		2.71	%		1.86	%		2.44	%		2.01	%

Other non-interest income for the fourth quarter of 2011 totaled $10.7 million, compared to $7.3 million in the fourth quarter of 2010. Fees from certain covered call option transactions increased by $4.3 million in the fourth quarter of 2011 as compared to the same period in the prior year. Historically, compression in the net interest margin was effectively offset by the Company’s covered call strategy. An illustration of the past effectiveness of this strategy is shown in the Supplemental Financial Information section (see page titled “Net Interest Margin (Including Call Option Income)”). Miscellaneous income is primarily comprised of revenue from interest rate hedging transactions related to both customer-based trades and the related matched trades with inter-bank dealer counterparties. The Company recognized $1.6 million of swap fee revenue in the fourth quarter of 2011 compared to $866,000 in the fourth quarter of 2010. The Company recognized $6.8 million of swap fee revenue in 2011 compared to $1.5 million in 2010. The revenue recognized on this customer-based activity is sensitive to the pace of organic loan growth, the shape of the LIBOR curve and the customers’ expectations of interest rates.

NON-INTEREST EXPENSE

Non-interest expense for the fourth quarter of 2011 totaled $118.8 million and increased approximately $12.6 million, or 12%, compared to the fourth quarter of 2010.

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


	Three Months Ended
	December 31,				$			%
(Dollars in thousands)	2011		2010		Change			Change
Salaries and employee benefits:
Salaries	$	36,676	$	31,876		4,800			15
Commissions and bonus		19,263		18,043		1,220			7
Benefits		10,805		9,112		1,693			19

Total salaries and employee benefits		66,744		59,031		7,713			13
Equipment		5,093		4,384		709			16
Occupancy, net		7,975		5,927		2,048			35
Data processing		4,062		4,388		(326	)		(7	)
Advertising and marketing		3,207		1,881		1,326			70
Professional fees		3,710		4,775		(1,065	)		(22	)
Amortization of other intangible assets		1,062		719		343			48
FDIC insurance		3,244		4,572		(1,328	)		(29	)
OREO expenses, net		8,821		7,384		1,437			19
Other:
Commissions - 3rd party brokers		872		965		(93	)		(10	)
Postage		1,322		1,220		102			8
Stationery and supplies		1,186		1,069		117			11
Miscellaneous		11,470		9,886		1,584			16

Total other		14,850		13,140		1,710			13


Total Non-Interest Expense	$	118,768	$	106,201	$	12,567			12


	Years Ended
	December 31,				$			%
(Dollars in thousands)	2011		2010		Change			Change
Salaries and employee benefits:
Salaries	$	138,452	$	120,210		18,242			15
Commissions and bonus		55,721		58,107		(2,386	)		(4	)
Benefits		43,612		37,449		6,163			16

Total salaries and employee benefits		237,785		215,766		22,019			10
Equipment		18,267		16,529		1,738			11
Occupancy, net		28,764		24,444		4,320			18
Data processing		14,568		15,355		(787	)		(5	)
Advertising and marketing		8,380		6,315		2,065			33
Professional fees		16,874		16,394		480			3
Amortization of other intangible assets		3,425		2,739		686			25
FDIC insurance		14,143		18,028		(3,885	)		(22	)
OREO expenses, net		26,340		19,331		7,009			36
Other:
Commissions - 3rd party brokers		3,829		4,003		(174	)		(4	)
Postage		4,672		4,813		(141	)		(3	)
Stationery and supplies		3,818		3,374		444			13
Miscellaneous		39,539		35,434		4,105			12

Total other		51,858		47,624		4,234			9


Total Non-Interest Expense	$	420,404	$	382,525	$	37,879			10

The significant changes in non-interest expense for the quarter ended December 31, 2011 compared to the quarter ended December 31, 2010 are discussed below.

Salaries and employee benefits comprised 56% of total non-interest expense in the fourth quarters of 2011 and 2010. Salaries and employee benefits expense increased $7.7 million, or 13%, in the fourth quarter of 2011 compared to the fourth quarter of 2010 primarily as a result of a $4.8 million increase in salaries caused by the addition of employees from the various acquisitions and larger staffing as the Company grows, a $1.2 million increase in bonus and commissions primarily attributable to the Company’s long-term incentive program approved by the Compensation Committee of the Board of Directors in August 2011 and a $1.7 million increase from employee benefits (primarily health plan and payroll taxes related).

Occupancy expense includes depreciation on premises, real estate taxes, utilities and maintenance of premises, as well as net rent expense for leased premises. Occupancy expense for the fourth quarter of 2011 was $8.0 million, an increase of $2.0 million, or 35%, compared to the same period in 2010. The increase is primarily the result of rent expense on additional leased premises and depreciation on owned locations which were obtained in the FDIC-assisted acquisitions.

Advertising and marketing expense for the fourth of 2011 was $3.2 million, an increase of $1.3 million, or 70%, compared to the same period in 2010. The increase is attributable to rebranding initiatives in 2011.

Professional fees include legal, audit and tax fees, external loan review costs and normal regulatory exam assessments. Professional fees for the fourth quarter of 2011 were $3.7 million, a decrease of $1.1 million, or 22%, compared to the same period in 2010. This decrease is primarily a result of reduced legal costs as the level of non-performing assets has decreased in the fourth quarter of 2011 compared to the fourth quarter of 2010.

FDIC insurance expense for the fourth quarter of 2011 was $3.2 million, a decrease of $1.3 million, or 29%, compared to the same period in 2010. Effective April 1, 2011, standards applied in FDIC assessments set forth in the Federal Deposit Insurance Act were revised by the Dodd-Frank Wall Street Reform and Consumer Protection Act. These revisions modified definitions of a company’s insurance assessment base and assessment rates which led to the Company’s decreased FDIC expense in the fourth quarter of 2011 as compared to the fourth quarter of 2010.

OREO expenses include all costs related to obtaining, maintaining and selling of other real estate owned properties. This expense totaled $8.8 million in the fourth quarter of 2011, an increase of $1.4 million compared to $7.4 million in the fourth quarter of 2010. The increase in OREO expenses is primarily related to higher valuation adjustments of properties held in OREO in the fourth quarter of 2011 as compared to the fourth quarter of 2010.

Miscellaneous expense includes ATM expenses, correspondent bank charges, directors’ fees, telephone, travel and entertainment, corporate insurance, dues and subscriptions, problem loan expenses and lending origination costs that are not deferred. Miscellaneous expenses in the fourth quarter of 2011 increased $1.6 million, or 16% compared to the same period in the prior year. The increase in the fourth quarter of 2011 compared to the same period in the prior year is attributable to increased expenses related to covered loans as well as general growth in the Company’s business.

ASSET QUALITY

Allowance for Credit Losses, excluding covered loans


	Three Months Ended						Years Ended
	December 31,						December 31,
(Dollars in thousands)	2011			2010			2011			2010
Allowance for loan losses at beginning of period	$	118,649		$	110,432		$	113,903		$	98,277
Provision for credit losses		16,615			28,795			97,920			124,664
Other adjustments		—			—			—			1,943
Reclassification (to)/from allowance for unfunded lending-related commitments		171			(1,781	)		1,904			(1,301	)

Charge-offs:
Commercial		6,377			6,060			31,951			18,592
Commercial real estate		13,931			13,591			62,698			61,873
Home equity		1,876			1,322			5,020			5,926
Residential real estate		1,632			311			4,115			1,143
Premium finance receivables - commercial		1,479			1,820			6,617			23,005
Premium finance receivables - life insurance		—			154			275			233
Indirect consumer		56			239			244			967
Consumer and other		824			565			1,532			1,141

Total charge-offs		26,175			24,062			112,452			112,880


Recoveries:
Commercial		541			268			1,258			1,140
Commercial real estate		286			57			1,386			914
Home equity		5			2			64			24
Residential real estate		2			2			10			12
Premium finance receivables - commercial		204			144			6,006			781
Premium finance receivables - life insurance		—			—			12			—
Indirect consumer		37			38			220			198
Consumer and other		46			8			150			131

Total recoveries		1,121			519			9,106			3,200

Net charge-offs		(25,054	)		(23,543	)		(103,346	)		(109,680	)

Allowance for loan losses at period end	$	110,381		$	113,903		$	110,381		$	113,903

Allowance for unfunded lending-related commitments at period end		13,231			4,134			13,231			4,134


Allowance for credit losses at period end	$	123,612		$	118,037		$	123,612		$	118,037


Annualized net charge-offs by category as a percentage of its own respective category’s average:
Commercial		0.96	%		1.11	%		1.44	%		0.95	%
Commercial real estate		1.56			1.66			1.80			1.83
Home equity		0.85			0.57			0.56			0.64
Residential real estate		1.07			0.17			0.79			0.19
Premium finance receivables - commercial		0.35			0.54			0.04			1.74
Premium finance receivables - life insurance		—			0.04			0.02			0.02
Indirect consumer		0.12			1.51			0.04			1.09
Consumer and other		2.35			1.98			1.21			0.93

Total loans, net of unearned income, excluding covered loans		0.93	%		0.96	%		1.02	%		1.16	%

Net charge-offs as a percentage of the provision for credit losses		150.79	%		81.76	%		105.54	%		87.98	%

Loans at period-end							$	10,521,377		$	9,599,886
Allowance for loan losses as a percentage of loans at period end								1.05	%		1.19	%
Allowance for credit losses as a percentage of loans at period end								1.17	%		1.23	%

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 relates to certain amounts that Wintrust is committed to lend but for which funds have not yet been disbursed. The allowance for unfunded lending-related commitments (separate liability account) represents the portion of the allowance for credit losses that was associated with unfunded lending-related commitments. 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). Total credit-related reserves also include the credit discounts on the purchased life insurance premium finance receivables which are netted with the loan balance. Additionally, on January 1, 2010, in conjunction with recording the securitization facility on its balance sheet, the Company established an allowance for loan losses totaling $1.9 million. This addition to the allowance for loan losses is shown as an “other adjustment to the allowance for loan losses.”

The provision for credit losses, excluding the provision for covered loan losses, totaled $16.6 million for the fourth quarter of 2011, $28.8 million for the fourth quarter of 2010 and $28.3 million in the third quarter of 2011. For the quarter ended December 31, 2011, net charge-offs, excluding covered loans, totaled $25.1 million compared to $23.5 million recorded in the fourth quarter of 2010 and $26.9 million in the third quarter of 2011. On a ratio basis, annualized net charge-offs as a percentage of average loans, excluding covered loans, were 0.93% in the fourth quarter of 2011, 0.96% in the fourth quarter of 2010, and 1.05% in the third quarter of 2011. The lower level of provision for credit losses and the allowance for credit losses, reflect the improvements in credit quality metrics for the fourth quarter of 2011. The graphs on pages four and five highlight the level of total non-performing loans, the improvement seen in the reduced levels of inflows to non-performing loans and the improvement in the allowance for loan loss coverage of non-performing loans.

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 increase in the allowance for credit losses from the end of the prior quarter reflects the continued changes in real estate values on certain types of credits, specifically credits with residential development collateral valuation exposure.

The Company also provides a provision for covered loan losses on covered loans and an allowance for covered loan losses on covered loans. Please see “Covered Assets” later in this document for more detail.

The table below shows the aging of the Company’s loan portfolio, excluding covered loans, at December 31, 2011:

As of December 31, 2011

90+ days

60-89

30-59

and still

days past

(Dollars in thousands)

Nonaccrual

accruing

due

Current

Total Loans

Loan Balances:

Commercial

Commercial and industrial

16,154

—

7,496

15,797

1,411,004

1,450,451

Franchise

1,792

—

140,983

142,775

Mortgage warehouse lines of credit

—

180,450

Community Advantage—homeowners association

—

77,504

Aircraft

—

709

170

19,518

20,397

Asset-based lending

1,072

—

749

11,026

452,890

465,737

Municipal

—

78,319

Leases

—

431

71,703

72,134

Other

—

2,125

Purchased non-covered commercial ⁽¹⁾

—

589

—

7,758

8,421

Total commercial

19,018

589

9,028

27,424

2,442,254

2,498,313

Commercial real-estate:

Residential construction

1,993

—

4,982

1,721

57,115

65,811

Commercial construction

2,158

—

150

167,568

169,876

Land

31,547

—

4,100

6,772

136,112

178,531

Office

10,614

—

2,622

930

540,280

554,446

Industrial

2,002

—

508

4,863

548,429

555,802

Retail

5,366

—

5,268

8,651

517,444

536,729

Multi-family

4,736

—

3,880

347

305,594

314,557

Mixed use and other

8,092

—

7,163

20,814

1,050,585

1,086,654

Purchased non-covered commercial real-estate ⁽¹⁾

—

2,198

—

252

49,405

51,855

Total commercial real-estate

66,508

2,198

28,523

44,500

3,372,532

3,514,261

Home equity

14,164

—

1,351

3,262

843,568

862,345

Residential real estate

6,619

—

2,343

3,112

337,522

349,596

Purchased non-covered residential real estate ⁽¹⁾

—

693

Premium finance receivables

Commercial insurance loans

7,755

5,281

3,850

13,787

1,381,781

1,412,454

Life insurance loans

—

423

1,096,285

1,096,762

Purchased life insurance loans ⁽¹⁾

—

598,463

Indirect consumer

138

314

113

551

63,429

64,545

Consumer and other

233

—

170

1,070

122,393

123,866

Purchased non-covered consumer and other ⁽¹⁾

—

Total loans, net of unearned income, excluding covered loans

114,489

8,382

45,378

94,131

10,258,997

10,521,377

Covered loans

—

174,727

25,507

24,799

426,335

651,368

Total loans, net of unearned income

114,489

183,109

70,885

118,930

10,685,332

11,172,745

(1)

Purchased 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.

Aging as a % of Loan Balance:

$00,0000

90+ days

60-89

30-59

and still

days past

Nonaccrual

accruing

due

Current

Total Loans

Commercial

Commercial and industrial

1.1

—

0.5

1.1

97.3

100.0

Franchise

1.3

—

98.7

100.0

Mortgage warehouse lines of credit

—

100.0

Community Advantage—homeowners association

—

100.0

Aircraft

—

3.5

0.8

95.7

100.0

Asset-based lending

0.2

—

0.2

2.4

97.2

100.0

Municipal

—

100.0

Leases

—

0.6

99.4

100.0

Other

—

100.0

Purchased non-covered commercial ⁽¹⁾

—

7.0

0.9

—

92.1

100.0

Total commercial

0.8

0.0

0.4

1.1

97.7

100.0

Commercial real-estate

Residential construction

3.0

—

7.6

2.6

86.8

100.0

Commercial construction

1.3

—

0.1

98.6

100.0

Land

17.7

—

2.3

3.8

76.2

100.0

Office

1.9

—

0.5

0.2

97.4

100.0

Industrial

0.4

—

0.1

0.9

98.6

100.0

Retail

1.0

—

1.0

1.6

96.4

100.0

Multi-family

1.5

—

1.2

0.1

97.2

100.0

Mixed use and other

0.7

—

0.7

1.9

96.7

100.0

Purchased non-covered commercial real-estate ⁽¹⁾

—

4.2

—

0.5

95.3

100.0

Total commercial real-estate

1.9

0.1

0.8

1.3

95.9

100.0

Home equity

1.6

—

0.2

0.4

97.8

100.0

Residential real estate

1.9

—

0.7

0.9

96.5

100.0

Purchased non-covered residential real estate ⁽¹⁾

—

100.0

Premium finance receivables

Commercial insurance loans

0.5

0.4

0.3

1.0

97.8

100.0

Life insurance loans

0.0

—

0.0

100.0

Purchased life insurance loans ⁽¹⁾

—

100.0

Indirect consumer

0.2

0.5

0.2

0.9

98.2

100.0

Consumer and other

0.2

—

0.1

0.9

98.8

100.0

Purchased non-covered consumer and other ⁽¹⁾

—

2.5

97.5

100.0

Total loans, net of unearned income, excluding covered loans

1.1

0.1

0.4

0.9

97.5

100.0

Covered loans

—

26.8

3.9

3.8

65.5

100.0

Total loans, net of unearned income

1.0

1.6

0.6

1.1

95.7

100.0

As of December 31, 2011, $45.4 million of all loans, excluding covered loans, or 0.4%, were 60 to 89 days past due and $94.1 million, or 0.9%, were 30 to 59 days (or one payment) past due. As of September 30, 2011, $51.0 million of all loans, excluding covered loans, or 0.5%, were 60 to 89 days past due and $96.3 million, or 0.9%, were 30 to 59 days (or one payment) past due. The majority of the commercial and commercial real estate loans shown as 60 to 89 days and 30 to 59 days past due are included on the Company’s internal problem loan reporting system. Loans on this system are closely monitored by management on a monthly basis.

The Company’s home equity and residential loan portfolios continue to exhibit low delinquency ratios. Home equity loans at December 31, 2011 that are current with regard to the contractual terms of the loan agreement represent 97.8% of the total home equity portfolio. Residential real estate loans at December 31, 2011 that are current with regards to the contractual terms of the loan agreements comprise 96.5% of total residential real estate loans outstanding.

The table below shows the aging of the Company’s loan portfolio, excluding covered loans, at September 30, 2011:

As of September 30, 2011


			90+ days		60-89		30-59
			and still		days past		days past
(Dollars in thousands)	Nonaccrual		accruing		due		due		Current		Total Loans
Loan Balances:
Commercial
Commercial and industrial	$	21,055	$	—	$	13,691	$	9,748	$	1,370,221	$	1,414,715
Franchise		1,792		—		—		—		125,062		126,854
Mortgage warehouse lines of credit		—		—		—		—		132,425		132,425
Community Advantage—homeowners association		—		—		—		—		74,281		74,281
Aircraft		—		—		—		53		18,027		18,080
Asset-based lending		1,989		—		210		—		417,538		419,737
Municipal		—		—		—		—		74,723		74,723
Leases		—		—		—		—		66,671		66,671
Other		—		—		—		—		2,044		2,044
Purchased non-covered commercial ⁽¹⁾		—		616		—		—		6,952		7,568

Total commercial		24,836		616		13,901		9,801		2,287,944		2,337,098

Commercial real-estate:
Residential construction		1,358		1,105		1,532		4,896		63,050		71,941
Commercial construction		2,860		—		—		823		156,738		160,421
Land		31,072		—		2,661		8,935		156,462		199,130
Office		15,432		—		2,079		63		516,356		533,930
Industrial		2,160		—		294		2,427		533,367		538,248
Retail		3,664		—		4,318		19,085		492,168		519,235
Multi-family		3,423		—		4,230		5,666		311,458		324,777
Mixed use and other		9,700		—		8,955		22,759		1,021,868		1,063,282
Purchased non-covered commercial real-estate ⁽¹⁾		—		344		—		285		53,728		54,357

Total commercial real-estate		69,669		1,449		24,069		64,939		3,305,195		3,465,321

Home equity		15,426		—		2,002		5,072		856,680		879,180
Residential real estate		7,546		—		1,852		908		315,901		326,207
Purchased non-covered residential real estate ⁽¹⁾		—		—		—		—		—		—
Premium finance receivables
Commercial insurance loans		6,942		4,599		3,206		7,726		1,395,099		1,417,572
Life insurance loans		349		2,413		5,877		7,076		1,019,952		1,035,667
Purchased life insurance loans ⁽¹⁾		—		675		—		—		635,101		635,776
Indirect consumer		146		292		81		370		61,563		62,452
Consumer and other		653		—		26		386		111,736		112,801
Purchased non-covered consumer and other ⁽¹⁾		—		—		—		63		574		637

Total loans, net of unearned income, excluding covered loans	$	125,567	$	10,044	$	51,014	$	96,341	$	9,989,745	$	10,272,711
Covered loans		—		179,277		13,721		14,750		472,327		680,075

Total loans, net of unearned income	$	125,567	$	189,321	$	64,735	$	111,091	$	10,462,072	$	10,952,786

(1)

Aging as a % of Loan Balance:


				90+ days			60-89			30-59
				and still			days past			days past
	Nonaccrual			accruing			due			due			Current			Total Loans
Commercial
Commercial and industrial		1.5	%		—	%		1.0	%		0.7	%		96.8	%		100.0	%
Franchise		1.4			—			—			—			98.6			100.0
Mortgage warehouse lines of credit		—			—			—			—			100.0			100.0
Community Advantage—homeowners association		—			—			—			—			100.0			100.0
Aircraft		—			—			—			0.3			99.7			100.0
Asset-based lending		0.5			—			0.1			—			99.4			100.0
Municipal		—			—			—			—			100.0			100.0
Leases		—			—			—			—			100.0			100.0
Other		—			—			—			—			100.0			100.0
Purchased non-covered commercial ⁽¹⁾		—			8.1			—			—			91.9			100.0

Total commercial		1.1			—			0.6			0.4			97.9			100.0

Commercial real-estate
Residential construction		1.9			1.5			2.1			6.8			87.7			100.0
Commercial construction		1.8			—			—			0.5			97.7			100.0
Land		15.6			—			1.3			4.5			78.6			100.0
Office		2.9			—			0.4			—			96.7			100.0
Industrial		0.4			—			0.1			0.5			99.0			100.0
Retail		0.7			—			0.8			3.7			94.8			100.0
Multi-family		1.1			—			1.3			1.7			95.9			100.0
Mixed use and other		0.9			—			0.8			2.1			96.2			100.0
Purchased non-covered commercial real-estate ⁽¹⁾		—			0.6			—			0.5			98.9			100.0

Total commercial real-estate		2.0			—			0.7			1.9			95.4			100.0

Home equity		1.8			—			0.2			0.6			97.4			100.0
Residential real estate		2.3			—			0.6			0.3			96.8			100.0
Purchased non-covered residential real estate ⁽¹⁾		—			—			—			—			—			—
Premium finance receivables
Commercial insurance loans		0.5			0.3			0.2			0.5			98.5			100.0
Life insurance loans		—			0.2			0.6			0.7			98.5			100.0
Purchased life insurance loans ⁽¹⁾		—			0.1			—			—			99.9			100.0
Indirect consumer		0.2			0.5			0.1			0.6			98.6			100.0
Consumer and other		0.6			—			—			0.3			99.1			100.0
Purchased non-covered consumer and other ⁽¹⁾		—			—			—			9.9			90.1			100.0

Total loans, net of unearned income, excluding covered loans		1.2	%		0.1	%		0.5	%		0.9	%		97.3	%		100.0	%
Covered loans		—			26.4			2.0			2.2			69.4			100.0

Total loans, net of unearned income		1.1	%		1.7	%		0.6	%		1.0	%		95.6	%		100.0	%

Non-performing Assets, excluding covered assets

The following table sets forth Wintrust’s non-performing assets, excluding covered assets and purchased non-covered loans acquired with evidence of credit quality deterioration since origination, at the dates indicated.


	December 31,			September 30,			December 31,
(Dollars in thousands)	2011			2011			2010
Loans past due greater than 90 days and still accruing:
Commercial	$	—		$	—		$	478
Commercial real-estate		—			1,105			—
Home equity		—			—			—
Residential real-estate		—			—			—
Premium finance receivables—commercial		5,281			4,599			8,096
Premium finance receivables—life insurance		—			2,413			—
Indirect consumer		314			292			318
Consumer and other		—			—			1

Total loans past due greater than 90 days and still accruing		5,595			8,409			8,893


Non-accrual loans:
Commercial		19,018			24,836			16,382
Commercial real-estate		66,508			69,669			93,963
Home equity		14,164			15,426			7,425
Residential real-estate		6,619			7,546			6,085
Premium finance receivables—commercial		7,755			6,942			8,587
Premium finance receivables—life insurance		54			349			354
Indirect consumer		138			146			191
Consumer and other		233			653			252

Total non-accrual loans		114,489			125,567			133,239


Total non-performing loans:
Commercial		19,018			24,836			16,860
Commercial real-estate		66,508			70,774			93,963
Home equity		14,164			15,426			7,425
Residential real-estate		6,619			7,546			6,085
Premium finance receivables—commercial		13,036			11,541			16,683
Premium finance receivables—life insurance		54			2,762			354
Indirect consumer		452			438			509
Consumer and other		233			653			253

Total non-performing loans	$	120,084		$	133,976		$	142,132
Other real estate owned		79,093			86,622			71,214
Other real estate owned—obtained in acquisition		7,430			10,302			—

Total non-performing assets	$	206,607		$	230,900		$	213,346


Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial		0.76	%		1.06	%		0.82	%
Commercial real-estate		1.89			2.04			2.81
Home equity		1.64			1.75			0.81
Residential real-estate		1.89			2.31			1.72
Premium finance receivables—commercial		0.92			0.81			1.32
Premium finance receivables—life insurance		—			0.17			0.02
Indirect consumer		0.70			0.70			0.99
Consumer and other		0.19			0.58			0.24

Total loans, net of unearned income		1.14	%		1.30	%		1.48	%


Total non-performing assets as a percentage of total assets		1.30	%		1.45	%		1.53	%


Allowance for loan losses as a percentage of total non-performing loans		91.92	%		88.56	%		80.14	%

Non-performing Commercial and Commercial Real Estate

The commercial non-performing loan category totaled $19.0 million as of December 31, 2011 compared to $24.8 million as of September 30, 2011 and $16.9 million as of December 31, 2010. The commercial real estate non-performing loan category totaled $66.5 million as of December 31, 2011 compared to $70.8 million as of September 30, 2011 and $94.0 million as of December 31, 2010.

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 to occur upon the ultimate resolution of these credits.

Non-performing Residential Real Estate and Home Equity

Non-performing home equity and residential real estate loans totaled $20.8 million as of December 31, 2011. The balance increased $7.3 million from December 31, 2010 and decreased $2.2 million from September 30, 2011. The December 31, 2011 non-performing balance is comprised of $6.6 million of residential real estate (34 individual credits) and $14.2 million of home equity loans (42 individual credits). On average, this is approximately 5 non-performing residential real estate loans and home equity loans per chartered bank within the Company. The Company believes control and collection of these loans is very manageable. At this time, management believes reserves are adequate to absorb inherent losses that may occur upon the ultimate resolution of these credits.

Non-performing Commercial Insurance Premium Finance Receivables

The table below presents the level of non-performing property and casualty premium finance receivables as of December 31, 2011 and 2010, and the amount of net charge-offs for the quarters then ended.


	December 31,			December 31,
(Dollars in thousands)	2011			2010
Non-performing premium finance receivables—commercial	$	13,036		$	16,683
—as a percent of premium finance receivables—commercial outstanding		0.92	%		1.32	%

Net (recoveries) charge-offs of premium finance receivables—commercial	$	1,275		$	1,676
—annualized as a percent of average premium finance receivables—commercial		0.35	%		0.54	%

Fluctuations in this category may occur due to timing and nature of account collections from insurance carriers. The Company’s underwriting standards, regardless of the condition of the economy, have remained consistent. We anticipate that net charge-offs and non-performing asset levels in the near term will continue to be at levels that are within acceptable operating ranges for this category of loans. Management is comfortable with administering the collections at this level of non-performing property and casualty premium finance receivables and believes reserves are adequate to absorb inherent losses that may occur upon the ultimate resolution of these credits.

The ratio of non-performing commercial premium finance receivables fluctuates throughout the year due to the nature and timing of canceled account collections from insurance carriers. Due to the nature of collateral for commercial premium finance receivables, it customarily takes 60-150 days to convert the collateral into cash. Accordingly, the level of non-performing commercial premium finance receivables is not necessarily indicative of the loss inherent in the portfolio. In the event of default, Wintrust has the power to cancel the insurance policy and collect the unearned portion of the premium from the insurance carrier. In the event of cancellation, the cash returned in payment of the unearned premium by the insurer should generally be sufficient to cover the receivable balance, the interest and other charges due. Due to notification requirements and processing time by most insurance carriers, many receivables will become delinquent beyond 90 days while the insurer is processing the return of the unearned premium. Management continues to accrue interest until maturity as the unearned premium is ordinarily sufficient to pay-off the outstanding balance and contractual interest due.

Nonperforming Loans Rollforward

The table below presents a summary of the changes in the balance of non-performing loans, excluding covered loans, for the three and nine month periods ending December 31, 2011 and 2010:


	Three Months Ended						Years Ended
	December 31,			December 31,			December 31,			December 31,
(Dollars in thousands)	2011			2010			2011			2010
Balance at beginning of period	$	133,976		$	134,323		$	142,132		$	131,804
Additions, net		25,049			47,789			166,459			173,461
Return to performing status		(2,285	)		(20	)		(7,800	)		(4,914	)
Payments received		(10,426	)		(6,419	)		(44,804	)		(30,513	)
Transfer to OREO		(6,182	)		(17,929	)		(59,203	)		(68,663	)
Charge-offs		(18,614	)		(14,328	)		(68,608	)		(55,220	)
Net change for niche loans ⁽¹⁾		(1,434	)		(1,284	)		(8,092	)		(3,823	)

Balance at end of period	$	120,084		$	142,132		$	120,084		$	142,132

⁽¹⁾	This includes activity for premium finance receivables and indirect consumer loans.

Restructured Loans

The table below presents a summary of restructured loans for the respective period, presented by loan category and accrual status:


	December 31,		September 30,		December 31,
(Dollars in thousands)	2011		2011		2010
Accruing:
Commercial	$	9,270	$	7,726	$	14,163
Commercial real estate		104,864		74,307		65,419
Residential real estate and other		5,786		3,326		1,562

Total accrual	$	119,920	$	85,359	$	81,144


Non-accrual: ⁽¹⁾
Commercial	$	1,564	$	3,793	$	3,865
Commercial real estate		7,932		13,322		15,947
Residential real estate and other		1,102		1,918		234

Total non-accrual	$	10,598	$	19,033	$	20,046


Total restructured loans:
Commercial	$	10,834	$	11,519	$	18,028
Commercial real estate		112,796		87,629		81,366
Residential real estate and other		6,888		5,244		1,796

Total restructured loans	$	130,518	$	104,392	$	101,190

⁽¹⁾	Included in total non-performing loans.

At December 31, 2011, the Company had $130.5 million in loans with modified terms representing 168 credit relationships in which economic concessions were granted to certain borrowers to better align the terms of their loans with their current ability to pay.

The Company’s approach to restructuring loans is built on its credit risk rating system which requires credit management personnel to assign a credit risk rating to each loan. In each case, the loan officer is responsible for recommending a credit risk rating for each loan and ensuring the credit risk ratings are appropriate. These credit risk ratings are then reviewed and approved by the bank’s chief credit officer or the director’s loan committee. Credit risk ratings are determined by evaluating a number of factors including a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s credit risk rating scale is one through ten with higher scores

indicating higher risk. In the case of loans rated six or worse following modification, the Company’s Managed Assets Division evaluates the loan and the credit risk rating and determines that the loan has been restructured to be reasonably assured of repayment and of performance according to the modified terms and is supported by a current, well-documented credit assessment of the borrower’s financial condition and prospects for repayment under the revised terms.

A modification of a loan with an existing credit risk rating of six or worse or a modification of any other credit, which will result in a restructured credit risk rating of six or worse must be reviewed for troubled debt restructuring (“TDR”) classification. In that event, our Managed Assets Division conducts an overall credit and collateral review. A modification of a loan is considered to be a TDR if both (1) the borrower is experiencing financial difficulty and (2) for economic or legal reasons, the bank grants a concession to a borrower that it would not otherwise consider. The modification of a loan where the credit risk rating is five or better both before and after such modification are not reviewed for TDR status. Based on the Company’s credit risk rating system, it considers that borrowers whose credit risk rating is five or better are not experiencing financial difficulties and therefore, are not considered TDRs.

TDRs are reviewed at the time of modification and on a quarterly basis to determine if a specific reserve is needed. The carrying amount of the loan is compared to the expected payments to be received, discounted at the loan’s original rate, or for collateral dependent loans, to the fair value of the collateral. Any shortfall is recorded as a specific reserve.

All credits determined to be a TDR will continue to be classified as a TDR in all subsequent periods, unless the borrower has been in compliance with the loan’s modified terms for a period of six months (including over a calendar year-end) and the modified interest rate represented a market rate at the time of a restructuring. Additionally, before removing a loan from TDR classification, a review of the current or previously measured impairment on the loan and any concerns related to future performance by the borrower is conducted. If concerns exist about the future ability of the borrower to meet its obligations under the loans based on a credit review by the Managed Assets Division, the TDR classification is not removed from the loan.

Each restructured loan was reviewed for impairment at December 31, 2011 and approximately $2.9 million of collateral impairment was present and appropriately reserved for through the Company’s normal reserving methodology in the Company’s allowance for loan losses.

Other Real Estate Owned

The table below presents a summary of other real estate owned, excluding covered other real estate owned, as of December 31, 2011 and shows the activity for the respective period and the balance for each property type:


	Three Months Ended
	December 31,			September 30,			December 31,
(Dollars in thousands)	2011			2011			2010
Balance at beginning of period	$	96,924		$	82,772		$	76,654
Disposals/resolved		(7,722	)		(7,581	)		(21,904	)
Transfers in at fair value, less costs to sell		6,084			14,530			18,812
Additions from acquisition		—			10,302			—
Fair value adjustments		(8,763	)		(3,099	)		(2,348	)

Balance at end of period	$	86,523		$	96,924		$	71,214


	Period End
	December 31,			September 30,			December 31,
Balance by Property Type	2011			2011			2010
Residential real estate	$	7,327		$	6,938		$	5,694
Residential real estate development		19,923			18,535			17,781
Commercial real estate		59,273			71,451			47,739

Total	$	86,523		$	96,924		$	71,214

The following table provides a comparative analysis for the period end balances of the covered asset components and any changes in the allowance for covered loan losses.

Covered Assets


	December 31,			September 30,			December 31,
(Dollars in thousands)	2011			2011			2010
Period End Balances:
Loans	$	651,368		$	680,075		$	334,353
Other real estate owned and other assets		47,459			65,583			19,583
FDIC Indemnification asset		344,251			379,306			118,182

Total covered assets	$	1,043,078		$	1,124,964		$	472,118


Allowance for Covered Loan Losses Rollforward:
Balance at beginning of quarter	$	12,496		$	7,443		$	—
Provision for covered loan losses before benefit
attributable to FDIC loss share agreements		10,693			5,139			—
Benefit attributable to FDIC loss share agreements		(8,554	)		(4,112	)		—

Net provision for covered loan losses		2,139			1,027			—
Increase in FDIC indemnification asset		8,554			4,112			—
Loans charged-off		(10,212	)		(86	)		—
Recoveries of loans charged-off		—			—			—

Net charge-offs		(10,212	)		(86	)		—

Balance at end of quarter	$	12,977		$	12,496		$	—

In conjunction with FDIC-assisted transactions, the Company entered into loss share agreements with the FDIC. These agreements cover realized losses on loans, foreclosed real estate and certain other assets. These loss share assets are measured separately from the loan portfolios because they are not contractually embedded in the loans and are not transferable with the loans should the Company choose to dispose of them. Fair values at the acquisition dates were estimated based on projected cash flows available for loss-share based on the credit adjustments estimated for each loan pool and the loss share percentages. The loss share assets are also separately measured from the related loans and foreclosed real estate and recorded separately on the Consolidated Statements of Condition. Subsequent to the acquisition date, reimbursements received from the FDIC for actual incurred losses will reduce the loss share assets. Additional expected losses, to the extent such expected losses result in the recognition of an allowance for loan losses, will increase the loss share assets. The loss share agreements with the FDIC require the Company to reimburse the FDIC in the event that actual losses on covered assets are lower than the original loss estimates agreed upon with the FDIC with respect of such assets in the loss share agreements. The allowance for loan losses for loans acquired in FDIC-assisted transactions is determined without giving consideration to the amounts recoverable through loss share agreements (since the loss share agreements are separately accounted for and thus presented “gross” on the balance sheet). On the Consolidated Statements of Income, the provision for credit losses is reported net of changes in the amount recoverable under the loss share agreements. Reductions to expected losses, to the extent such reductions to expected losses are the result of an improvement to the actual or expected cash flows from the covered assets, will reduce the loss share assets. The increases in cash flows for the purchased loans are recognized as interest income prospectively.

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


	Accretable Yield Activity
				Life Insurance
	Bank			Premium
(Dollars in thousands)	Acquisitions			Finance Loans
Accretable yield at December 31, 2010	$	39,809		$	33,315
Acquisitions		7,107			—
Accretable yield amortized to interest income		(14,159	)		(9,052	)
Reclassification to/from non-accretable difference		43,099			184
Increases in interest cash flows due to payments and changes in interest rates		15,476			1,096

Accretable yield at March 31, 2011	$	91,332		$	25,543

Accretable yield amortized to interest income		(13,568	)		(5,122	)
Reclassification to/from non-accretable difference		(2,625	)		3,673
Increases in interest cash flows due to payments and changes in interest rates		5,609			797

Accretable yield at June 30, 2011	$	80,748		$	24,891

Acquisitions		24,695			—
Accretable yield amortized to interest income		(14,187	)		(5,127	)
Reclassification to/from non-accretable difference		(3,018	)		—
Increases (decreases) in interest cash flows due to payments and changes in interest rates		(1,741	)		432

Accretable yield at September 30, 2011	$	86,497		$	20,196

Accretable yield amortized to interest income		(34,212	)		(2,808	)
Reclassification to/from non-accretable difference		110,583			1,358
Increases (decreases) in interest cash flows due to payments and changes in interest rates		10,252			115

Accretable yield at December 31, 2011	$	173,120		$	18,861

WINTRUST SUBSIDIARIES AND LOCATIONS

Wintrust is a financial holding company whose common stock is traded on the Nasdaq Global Select Market (Nasdaq: WTFC). Its 15 community bank subsidiaries are: Lake Forest Bank & Trust Company, Hinsdale Bank & Trust Company, North Shore Community Bank & Trust Company in Wilmette, Libertyville Bank & Trust Company, Barrington Bank & Trust Company, Crystal Lake Bank & Trust Company, Northbrook Bank & Trust Company, Schaumburg Bank & Trust Company, N.A., Village Bank & Trust in Arlington Heights, Beverly Bank & Trust Company in Chicago, Wheaton Bank & Trust Company, State Bank of The Lakes in Antioch, Old Plank Trail Community Bank, N.A. in New Lenox, St. Charles Bank & Trust Company and Town Bank in Hartland, Wisconsin. The banks also operate facilities in Illinois in Algonquin, Bloomingdale, Buffalo Grove, Cary, Chicago, Clarendon Hills, Deerfield, Downers Grove, Elgin, Frankfort, Geneva, Glencoe, Glen Ellyn, Gurnee, Grayslake, Highland Park, Highwood, Hoffman Estates, Island Lake, Itasca, Lake Bluff, Lake Villa, Lincoln Park, Lindenhurst, McHenry, Mokena, Mount Prospect, Mundelein, Naperville, North Chicago, Northfield, Norridge, Palatine, Park Ridge, Prospect Heights, Ravenswood, Ravinia, Riverside, Rogers Park, Roselle, Sauganash, Skokie, Spring Grove, Vernon Hills, Wauconda, Western Springs, Willowbrook, Winnetka and Wood Dale and in Delafield, Elm Grove, Madison, Wales, Wisconsin.

Additionally, the Company operates various non-bank subsidiaries. First Insurance Funding Corporation, one of the largest insurance premium finance companies operating in the United States, serves commercial and life insurance loan customers throughout the country. Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States. Wintrust Mortgage, a division of Barrington Bank & Trust Company, engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices. Wayne Hummer Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest. Great Lakes Advisors provides money management services and advisory services to individual accounts. Advanced Investment Partners, LLC is an investment management firm specializing in the active management of domestic equity investment strategies. The Chicago Trust Company, a trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location. Wintrust Information Technology Services Company provides information technology support, item capture and statement preparation services to the Wintrust subsidiaries.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “point,” “will,” “may,” “should,” “would” and “could.” Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of the Company’s 2010 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, organic 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;

•

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;

•

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

•

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

•

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

•

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

•

changes in capital requirements resulting from Basel II and III initiatives;

•

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

•

losses incurred in connection with repurchases and indemnification payments related to mortgages;

•

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);

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

unexpected difficulties or unanticipated developments related to the Company’s strategy of de novo bank formations and openings, which typically require over 13 months of operations before becoming profitable due to the impact of organizational and overhead expenses, the startup phase of generating deposits and the time lag typically involved in redeploying deposits into attractively priced loans and other higher yielding earning assets;

•

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

•

adverse effects on our operational systems resulting from failures, human error or tampering;

•

significant litigation involving the Company; and

•

the ability of the Company to receive dividends from its subsidiaries.

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 or on behalf of Wintrust. 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 release revisions to these forward-looking statements or reflect events or circumstances after the date of this 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 1:00 p.m. (CT) Thursday, January 19, 2012 regarding fourth quarter 2011 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #43011164. A simultaneous audio-only web cast and replay of the conference call may be accessed via the Company’s web site at (http://www.wintrust.com), Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the fourth quarter 2011 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
	December 31,			September 30,			June 30,			March 31,			December 31,
	2011			2011			2011			2011			2010
Selected Financial Condition Data (at end of period):
Total assets	$	15,893,808		$	15,914,804		$	14,615,897		$	14,094,294		$	13,980,156
Total loans, excluding covered loans		10,521,377			10,272,711			9,925,077			9,561,802			9,599,886
Total deposits		12,307,267			12,306,008			11,259,260			10,915,169			10,803,673
Junior subordinated debentures		249,493			249,493			249,493			249,493			249,493
Total shareholders’ equity		1,543,533			1,528,187			1,473,386			1,453,253			1,436,549

Selected Statements of Income Data:
Net interest income		124,647			118,410			108,706			109,614			112,677
Net revenue ⁽¹⁾		169,559			185,657			145,358			150,501			157,138
Pre-tax adjusted earnings ⁽²⁾		61,341			60,936			54,127			49,047			57,675
Net income		19,221			30,202			11,750			16,402			14,205
Net income (loss) per common share – Basic	$	0.51		$	0.82		$	0.31		$	0.44		$	(0.06	)
Net income (loss) per common share – Diluted	$	0.41		$	0.65		$	0.25		$	0.36		$	(0.06	)

Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin ⁽²⁾		3.45	%		3.37	%		3.40	%		3.48	%		3.46	%
Non-interest income to average assets		1.11	%		1.72	%		1.04	%		1.18	%		1.24	%
Non-interest expense to average assets		2.94	%		2.72	%		2.76	%		2.84	%		2.97	%
Net overhead ratio ⁽³⁾		1.83	%		1.00	%		1.72	%		1.66	%		1.73	%
Efficiency ratio^{(2) (4)}		69.99	%		57.21	%		67.22	%		65.05	%		67.48	%
Return on average assets		0.48	%		0.77	%		0.33	%		0.47	%		0.40	%
Return on average common equity		4.87	%		7.94	%		3.05	%		4.49	%		(0.66	)%
Average total assets	$	16,014,209		$	15,526,427		$	14,105,136		$	14,018,525		$	14,199,351
Average total shareholders’ equity		1,531,936			1,507,717			1,460,071			1,437,869			1,442,754
Average loans to average deposits ratio		86.6	%		85.0	%		90.9	%		91.2	%		89.0	%
Average loans to average deposits ratio (including covered loans)		91.9			90.7			94.8			94.2			92.1

*Common Share Data at end of period:*
Market price per common share	$	28.05		$	25.81		$	32.18		$	36.75		$	33.03
Book value per common share ⁽²⁾	$	34.23		$	33.92		$	33.63		$	33.70		$	32.73
Tangible common book value per share ⁽²⁾	$	26.76		$	26.47		$	26.67		$	26.65		$	25.80
Common shares outstanding		35,978,349			35,924,066			34,988,125			34,947,251			34,864,068
Other Data at end of period:⁽⁸⁾
Leverage Ratio⁽⁵⁾		9.4	%		9.6	%		10.3	%		10.3	%		10.1	%
Tier 1 Capital to risk-weighted assets ⁽⁵⁾		12.0	%		12.0	%		12.3	%		12.7	%		12.5	%
Total capital to risk-weighted assets⁽⁵⁾		13.2	%		13.3	%		13.5	%		14.1	%		13.8	%
Tangible Common Equity ratio (TCE) ^{(2) (7)}		7.5	%		7.4	%		7.9	%		8.0	%		8.0	%
Allowance for credit losses ⁽⁶⁾	$	123,612		$	132,051		$	119,697		$	117,067		$	118,037
Non-performing loans		120,084			133,976			156,072			155,387			142,132
Allowance for credit losses to total loans ⁽⁶⁾		1.17	%		1.29	%		1.21	%		1.22	%		1.23	%
Non-performing loans to total loans		1.14	%		1.30	%		1.57	%		1.63	%		1.48	%
Number of:
Bank subsidiaries		15			15			15			15			15
Non-bank subsidiaries		7			7			7			8			8
Banking offices		99			99			88			88			86

⁽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⁾	The efficiency ratio is calculated by dividing total non-interest expense by tax-equivalent net revenue (less securities gains or losses). A lower ratio indicates more efficient revenue generation.

⁽⁵⁾	Capital ratios for current quarter-end are estimated.

⁽⁶⁾	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.

⁽⁷⁾	Total shareholders’ equity minus preferred stock and total intangible assets divided by total assets minus total intangible assets.

⁽⁸⁾	Asset quality ratios exclude covered loans.

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Consolidated Statements of Condition—5 Quarter Trends


	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	December 31,			September 30,			June 30,			March 31,			December 31,
(In thousands)	2011			2011			2011			2011			2010
Assets
Cash and due from banks	$	148,012		$	147,270		$	140,434		$	140,919		$	153,690
Federal funds sold and securities purchased under resale agreements		21,692			13,452			43,634			33,575			18,890
Interest-bearing deposits with other banks		749,287			1,101,353			990,308			946,193			865,575
Available-for-sale securities, at fair value		1,291,797			1,267,682			1,456,426			1,710,321			1,496,302
Trading account securities		2,490			297			509			2,229			4,879
Federal Home Loan Bank and Federal Reserve Bank stock, at cost		100,434			99,749			86,761			85,144			82,407
Brokerage customer receivables		27,925			27,935			29,736			25,361			24,549
Mortgage loans held-for-sale, at fair value		306,838			204,081			133,083			92,151			356,662
Mortgage loans held-for-sale, at lower of cost or market		13,686			8,955			5,881			2,335			14,785
Loans, net of unearned income, excluding covered loans		10,521,377			10,272,711			9,925,077			9,561,802			9,599,886
Covered loans		651,368			680,075			408,669			431,299			334,353

Total loans		11,172,745			10,952,786			10,333,746			9,993,101			9,934,239
Less: Allowance for loan losses		110,381			118,649			117,362			115,049			113,903
Less: Allowance for covered loan losses		12,977			12,496			7,443			4,844			—

Net loans		11,049,387			10,821,641			10,208,941			9,873,208			9,820,336
Premises and equipment, net		431,512			412,478			403,577			369,785			363,696
FDIC indemnification asset		344,251			379,306			110,049			124,785			118,182
Accrued interest receivable and other assets		444,912			468,711			389,634			394,292			366,438
Trade date securities receivable		634,047			637,112			322,091			—			—
Goodwill		305,468			302,369			283,301			281,940			281,190
Other intangible assets		22,070			22,413			11,532			12,056			12,575

Total assets	$	15,893,808		$	15,914,804		$	14,615,897		$	14,094,294		$	13,980,156


Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	1,785,433		$	1,631,709		$	1,397,433		$	1,279,256		$	1,201,194
Interest bearing		10,521,834			10,674,299			9,861,827			9,635,913			9,602,479

Total deposits		12,307,267			12,306,008			11,259,260			10,915,169			10,803,673
Notes payable		52,822			3,004			1,000			1,000			1,000
Federal Home Loan Bank advances		474,481			474,570			423,500			423,500			423,500
Other borrowings		443,753			448,082			432,706			250,032			260,620
Secured borrowings—owed to securitization investors		600,000			600,000			600,000			600,000			600,000
Subordinated notes		35,000			40,000			40,000			50,000			50,000
Junior subordinated debentures		249,493			249,493			249,493			249,493			249,493
Trade date securities payable		47			73,874			2,243			10,000			—
Accrued interest payable and other liabilities		187,412			191,586			134,309			141,847			155,321

Total liabilities		14,350,275			14,386,617			13,142,511			12,641,041			12,543,607


Shareholders’ Equity:
Preferred stock		49,768			49,736			49,704			49,672			49,640
Common stock		35,982			35,926			34,988			34,947			34,864
Surplus		1,001,316			997,854			969,315			967,587			965,203
Treasury stock		(112	)		(68	)		(50	)		(74	)		—
Retained earnings		459,457			441,268			415,297			404,580			392,354
Accumulated other comprehensive (loss) income		(2,878	)		3,471			4,132			(3,459	)		(5,512	)

Total shareholders’ equity		1,543,533			1,528,187			1,473,386			1,453,253			1,436,549

Total liabilities and shareholders’ equity	$	15,893,808		$	15,914,804		$	14,615,897		$	14,094,294		$	13,980,156

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Consolidated Statements of Income (Unaudited)—5 Quarter Trends


	Three Months Ended
	December 31,		September 30,		June 30,			March 31,			December 31,
(In thousands, except per share data)	2011		2011		2011			2011			2010
Interest income
Interest and fees on loans	$	143,514	$	140,543	$	132,338		$	136,543		$	144,652
Interest bearing deposits with banks		696		917		870			936			1,342
Federal funds sold and securities purchased under resale agreements		33		28		23			32			39
Securities		12,574		12,667		11,438			9,540			7,236
Trading account securities		6		15		10			13			11
Federal Home Loan Bank and Federal Reserve Bank stock		591		584		572			550			512
Brokerage customer receivables		203		197		194			166			170

Total interest income		157,617		154,951		145,445			147,780			153,962

Interest expense
Interest on deposits		19,685		21,893		22,404			23,956			27,853
Interest on Federal Home Loan Bank advances		4,186		4,166		4,010			3,958			4,038
Interest on notes payable and other borrowings		2,804		2,874		2,715			2,630			1,631
Interest on secured borrowings—owed to securitization investors		3,076		3,003		2,994			3,040			3,089
Interest on subordinated notes		176		168		194			212			233
Interest on junior subordinated debentures		3,043		4,437		4,422			4,370			4,441

Total interest expense		32,970		36,541		36,739			38,166			41,285

Net interest income		124,647		118,410		108,706			109,614			112,677
Provision for credit losses		18,817		29,290		29,187			25,344			28,795

Net interest income after provision for credit losses		105,830		89,120		79,519			84,270			83,882

Non-interest income
Wealth management		11,686		11,994		10,601			10,236			10,108
Mortgage banking		18,025		14,469		12,817			11,631			22,686
Service charges on deposit accounts		3,973		4,085		3,594			3,311			3,346
Gains on available-for-sale securities, net		309		225		1,152			106			159
Gain on bargain purchases		—		27,390		746			9,838			250
Trading gains (losses)		216		591		(30	)		(440	)		611
Other		10,703		8,493		7,772			6,205			7,301

Total non-interest income		44,912		67,247		36,652			40,887			44,461

Non-interest expense
Salaries and employee benefits		66,744		61,863		53,079			56,099			59,031
Equipment		5,093		4,501		4,409			4,264			4,384
Occupancy, net		7,975		7,512		6,772			6,505			5,927
Data processing		4,062		3,836		3,147			3,523			4,388
Advertising and marketing		3,207		2,119		1,440			1,614			1,881
Professional fees		3,710		5,085		4,533			3,546			4,775
Amortization of other intangible assets		1,062		970		704			689			719
FDIC insurance		3,244		3,100		3,281			4,518			4,572
OREO expenses, net		8,821		5,134		6,577			5,808			7,384
Other		14,850		12,201		13,264			11,543			13,140

Total non-interest expense		118,768		106,321		97,206			98,109			106,201

Income before taxes		31,974		50,046		18,965			27,048			22,142
Income tax expense		12,753		19,844		7,215			10,646			7,937

Net income	$	19,221	$	30,202	$	11,750		$	16,402		$	14,205

Preferred stock dividends and discount accretion	$	1,032	$	1,032	$	1,033		$	1,031		$	16,175

Net income (loss) applicable to common shares	$	18,189	$	29,170	$	10,717		$	15,371		$	(1,970	)

Net income (loss) per common share—Basic	$	0.51	$	0.82	$	0.31		$	0.44		$	(0.06	)

Net income (loss) per common share—Diluted	$	0.41	$	0.65	$	0.25		$	0.36		$	(0.06	)

Cash dividends declared per common share	$	—	$	0.09	$	—		$	0.09		$	—

Weighted average common shares outstanding		35,958		35,550		34,971			34,928			32,015
Dilutive potential common shares		8,480		10,551		8,438			7,794			—

Average common shares and dilutive common shares		44,438		46,101		43,409			42,722			32,015

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Period End Loan Balances—5 Quarter Trends

		$0,000,000			$0,000,000			$0,000,000			$0,000,000			$0,000,000
	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2011			2011			2011			2011			2010
Balance:
Commercial	$	2,498,313		$	2,337,098		$	2,132,436		$	1,937,561		$	2,049,326
Commercial real estate		3,514,261			3,465,321			3,374,668			3,356,562			3,338,007
Home equity		862,345			879,180			880,702			891,332			914,412
Residential real-estate		350,289			326,207			329,381			344,909			353,336
Premium finance receivables—commercial		1,412,454			1,417,572			1,429,436			1,337,851			1,265,500
Premium finance receivables—life insurance		1,695,225			1,671,443			1,619,668			1,539,521			1,521,886
Indirect consumer ⁽¹⁾		64,545			62,452			57,718			52,379			51,147
Consumer and other		123,945			113,438			101,068			101,687			106,272
Total loans, net of unearned income, excluding covered loans	$	10,521,377		$	10,272,711		$	9,925,077		$	9,561,802		$	9,599,886
Covered loans		651,368			680,075			408,669			431,299			334,353

Total loans, net of unearned income	$	11,172,745		$	10,952,786		$	10,333,746		$	9,993,101		$	9,934,239


Mix:
Commercial		22	%		21	%		20	%		19	%		21	%
Commercial real estate		31			32			33			34			34
Home equity		8			8			8			9			9
Residential real-estate		3			3			3			4			3
Premium finance receivables—commercial		13			13			14			13			13
Premium finance receivables—life insurance		15			15			16			15			15
Indirect consumer ⁽¹⁾		1			1			1			1			1
Consumer and other		1			1			1			1			1

Total loans, net of unearned income, excluding covered loans		94	%		94	%		96	%		96	%		97	%
Covered loans		6			6			4			4			3

Total loans, net of unearned income		100	%		100	%		100	%		100	%		100	%

⁽¹⁾	Includes autos, boats, snowmobiles and other indirect consumer loans.

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Period End Deposits Balances—5 Quarter Trends

		$0,000,000			$0,000,000			$0,000,000			$0,000,000			$0,000,000
	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2011			2011			2011			2011			2010
Balance:
Non-interest bearing	$	1,785,433		$	1,631,709		$	1,397,433		$	1,279,256		$	1,201,194
NOW		1,698,778			1,633,752			1,530,068			1,526,955			1,561,507
Wealth Management deposits ⁽¹⁾		788,311			730,315			737,428			659,194			658,660
Money Market		2,263,253			2,190,117			1,985,661			1,844,416			1,759,866
Savings		888,592			867,483			736,974			749,681			744,534
Time certificates of deposit		4,882,900			5,252,632			4,871,696			4,855,667			4,877,912

Total deposits	$	12,307,267		$	12,306,008		$	11,259,260		$	10,915,169		$	10,803,673


Mix:
Non-interest bearing		15	%		13	%		12	%		12	%		11	%
NOW		14			13			14			14			15
Wealth Management deposits ⁽¹⁾		6			6			6			6			6
Money Market		18			18			18			17			16
Savings		7			7			7			7			7
Time certificates of deposit		40			43			43			44			45

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 Chicago Trust 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
	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2011			2011			2011			2011			2010

Net interest income	$	125,101		$	118,828		$	109,114		$	110,028		$	113,084
Call option income		5,377			3,436			2,287			2,470			1,074

Net interest income including call option income	$	130,478		$	122,264		$	111,401		$	112,498		$	114,158


Yield on earning assets		4.36	%		4.41	%		4.54	%		4.68	%		4.72
Rate on interest-bearing liabilities		1.05			1.18			1.32			1.39			1.43

Rate spread		3.31	%		3.23	%		3.22	%		3.29	%		3.29
Net free funds contribution		0.14			0.14			0.18			0.19			0.17

Net interest margin		3.45			3.37			3.40			3.48			3.46
Call option income		0.15			0.10			0.07			0.08			0.03

Net interest margin including call option income		3.60	%		3.47	%		3.47	%		3.56	%		3.49

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

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


	Years Ended December 31,
(Dollars in thousands)	2011			2010			2009			2008			2007

Net interest income	$	463,071		$	417,564		$	314,096		$	247,054		$	264,777
Call option income		13,570			2,235			1,998			29,024			2,628

Net interest income including call option income	$	476,641		$	419,799		$	316,094		$	276,078		$	267,405


Yield on earning assets		4.49	%		4.80	%		5.07	%		5.88	%		7.21	%
Rate on interest-bearing liabilities		1.23			1.61			2.29			3.31			4.39

Rate spread		3.26	%		3.19	%		2.78	%		2.57	%		2.82	%
Net free funds contribution		0.16			0.18			0.23			0.24			0.29

Net interest margin		3.42			3.37			3.01			2.81			3.11
Call option income		0.10			0.02			0.02			0.33			0.03

Net interest margin including call option income		3.52	%		3.39	%		3.03	%		3.14	%		3.14	%

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Quarterly Average Balances—5 Quarter Trends

		$000000000			$000000000			$000000000			$000000000			$000000000
	Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(In thousands)	2011			2011			2011			2011			2010
Liquidity management assets	$	3,051,850		$	3,083,508		$	2,591,398		$	2,632,012		$	2,844,351
Other earning assets		28,828			28,834			28,886			27,718			29,676
Loans, net of unearned income		10,662,516			10,200,733			9,859,789			9,849,309			9,777,435
Covered loans		652,157			680,003			418,129			326,571			337,690

Total earning assets	$	14,395,351		$	13,993,078		$	12,898,202		$	12,835,610		$	12,989,152

Allowance for loan losses		(137,423	)		(128,848	)		(125,537	)		(118,610	)		(116,447	)
Cash and due from banks		130,437			140,010			135,670			152,264			151,562
Other assets		1,625,844			1,522,187			1,196,801			1,149,261			1,175,084

Total assets	$	16,014,209		$	15,526,427		$	14,105,136		$	14,018,525		$	14,199,351


Interest-bearing deposits	$	10,563,090		$	10,442,886		$	9,491,778		$	9,542,637		$	9,839,223
Federal Home Loan Bank advances		474,549			486,379			421,502			416,021			415,260
Notes payable and other borrowings		468,139			461,141			338,304			266,379			244,044
Secured borrowings—owed to securitization investors		600,000			600,000			600,000			600,000			600,000
Subordinated notes		38,370			40,000			45,440			50,000			53,369
Junior subordinated notes		249,493			249,493			249,493			249,493			249,493

Total interest-bearing liabilities	$	12,393,641		$	12,279,899		$	11,146,517		$	11,124,530		$	11,401,389

Non-interest bearing deposits		1,755,446			1,553,769			1,349,549			1,261,374			1,148,208
Other liabilities		333,186			185,042			148,999			194,752			207,000
Equity		1,531,936			1,507,717			1,460,071			1,437,869			1,442,754

Total liabilities and shareholders’ equity	$	16,014,209		$	15,526,427		$	14,105,136		$	14,018,525		$	14,199,351

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Net Interest Margin—5 Quarter Trends

		$160140209			$160140209			$160140209			$160140209			$160140209
	Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2011			2011			2011			2011			2010

Yield earned on:
Liquidity management assets		1.85	%		1.87	%		2.04	%		1.75	%		1.32	%
Other earning assets		2.90			2.98			2.89			2.65			2.45
Loans, net of unearned income		4.78			4.97			5.05			5.34			5.71
Covered loans		9.20			7.54			8.06			8.78			4.75

Total earning assets		4.36	%		4.41	%		4.54	%		4.68	%		4.72	%

Rate paid on:
Interest-bearing deposits		0.74	%		0.83	%		0.95	%		1.02	%		1.12	%
Federal Home Loan Bank advances		3.50			3.40			3.82			3.86			3.86
Notes payable and other borrowings		2.38			2.47			3.22			4.00			2.65
Secured borrowings—owed to securitization investors		2.03			1.99			2.00			2.05			2.04
Subordinated notes		1.79			1.65			1.69			1.69			1.71
Junior subordinated notes		4.77			6.96			7.01			7.01			6.97

Total interest-bearing liabilities		1.05	%		1.18	%		1.32	%		1.39	%		1.43	%


Interest rate spread		3.31	%		3.23	%		3.22	%		3.29	%		3.29	%
Net free funds/contribution		0.14			0.14			0.18			0.19			0.17

Net interest income/Net interest margin		3.45	%		3.37	%		3.40	%		3.48	%		3.46	%

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Non-Interest Income—5 Quarter Trends


	Three Months Ended
	December 31,		September 30,		June 30,			March 31,			December 31,
(In thousands)	2011		2011		2011			2011			2010
Brokerage	$	5,960	$	6,108	$	6,208		$	6,325		$	6,641
Trust and asset management		5,726		5,886		4,393			3,911			3,467

Total wealth management		11,686		11,994		10,601			10,236			10,108

Mortgage banking		18,025		14,469		12,817			11,631			22,686
Service charges on deposit accounts		3,973		4,085		3,594			3,311			3,346
Gains on available-for-sale securities		309		225		1,152			106			159
Gain on bargain purchases		—		27,390		746			9,838			250
Trading gains (losses)		216		591		(30	)		(440	)		611
Other:
Fees from covered call options		5,377		3,436		2,287			2,470			1,074
Bank Owned Life Insurance		681		351		661			876			811
Administrative services		789		784		781			717			715
Miscellaneous		3,856		3,922		4,043			2,142			4,701

Total other income		10,703		8,493		7,772			6,205			7,301


Total Non-Interest Income	$	44,912	$	67,247	$	36,652		$	40,887		$	44,461

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

Non-Interest Expense—5 Quarter Trends


	Three Months Ended
(In thousands)	December 31, 2011		September 30, 2011		June 30, 2011		March 31, 2011		December 31, 2010
Salaries and employee benefits:
Salaries	$	36,676	$	36,633	$	32,008	$	33,135	$	31,876
Commissions and bonus		19,263		14,984		10,760		10,714		18,043
Benefits		10,805		10,246		10,311		12,250		9,112

Total salaries and employee benefits		66,744		61,863		53,079		56,099		59,031
Equipment		5,093		4,501		4,409		4,264		4,384
Occupancy, net		7,975		7,512		6,772		6,505		5,927
Data processing		4,062		3,836		3,147		3,523		4,388
Advertising and marketing		3,207		2,119		1,440		1,614		1,881
Professional fees		3,710		5,085		4,533		3,546		4,775
Amortization of other intangible assets		1,062		970		704		689		719
FDIC insurance		3,244		3,100		3,281		4,518		4,572
OREO expenses, net		8,821		5,134		6,577		5,808		7,384
Other:
Commissions—3rd party brokers		872		936		991		1,030		965
Postage		1,322		1,102		1,170		1,078		1,220
Stationery and supplies		1,186		904		888		840		1,069
Miscellaneous		11,470		9,259		10,215		8,595		9,886

Total other expense		14,850		12,201		13,264		11,543		13,140


Total Non-Interest Expense	$	118,768	$	106,321	$	97,206	$	98,109	$	106,201

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

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


	Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2011			2011			2011			2011			2010
Allowance for loan losses at beginning of period	$	118,649		$	117,362		$	115,049		$	113,903		$	110,432
Provision for credit losses		16,615			28,263			28,666			24,376			28,795
Other adjustments		—			—			—			—			—
Reclassification (to)/from allowance for unfunded lending-related commitments		171			(66	)		(317	)		2,116			(1,781	)

Charge-offs:
Commercial		6,377			8,851			7,583			9,140			6,060
Commercial real estate		13,931			14,734			20,691			13,342			13,591
Home equity		1,876			1,071			1,300			773			1,322
Residential real estate		1,632			926			282			1,275			311
Premium finance receivables—commercial		1,479			1,738			1,893			1,507			1,820
Premium finance receivables—life insurance		—			31			214			30			154
Indirect consumer		56			24			44			120			239
Consumer and other		824			282			266			160			565

Total charge-offs		26,175			27,657			32,273			26,347			24,062

Recoveries:
Commercial		541			150			301			266			268
Commercial real estate		286			299			463			338			57
Home equity		5			32			19			8			2
Residential real estate		2			3			3			2			2
Premium finance receivables—commercial		204			159			5,375			268			144
Premium finance receivables—life insurance		—			—			12			—			—
Indirect consumer		37			75			42			66			38
Consumer and other		46			29			22			53			8

Total recoveries		1,121			747			6,237			1,001			519

Net charge-offs		(25,054	)		(26,910	)		(26,036	)		(25,346	)		(23,543	)
Allowance for loan losses at period end	$	110,381		$	118,649		$	117,362		$	115,049		$	113,903
Allowance for unfunded lending-related commitments at period end		13,231			13,402			2,335			2,018			4,134

Allowance for credit losses at period end	$	123,612		$	132,051		$	119,697		$	117,067		$	118,037


Annualized net charge-offs by category as a percentage of its own respective category’s average:
Commercial		0.96			1.60			1.45			1.85			1.11	%
Commercial real estate		1.56			1.69			2.40			1.57			1.66
Home equity		0.85			0.47			0.58			0.34			0.57
Residential real estate		1.07			0.80			0.25			0.91			0.17
Premium finance receivables—commercial		0.35			0.42			(0.99	)		0.37			0.54
Premium finance receivables—life insurance		—			0.01			0.05			0.01			0.04
Indirect consumer		0.12			(0.33	)		0.02			0.41			1.51
Consumer and other		2.35			0.84			0.98			0.42			1.98

Total loans, net of unearned income, excluding covered loans		0.93			1.05			1.06			1.04			0.96	%

Net charge-offs as a percentag of the provision for credit losses		150.79	%		95.21	%		90.83	%		103.98	%		81.76	%
Loans at period-end	$	10,521,377		$	10,272,711		$	9,925,077		$	9,561,802		$	9,599,886
Allowance for loan losses as a percentage of loans at period end		1.05	%		1.15	%		1.18	%		1.20	%		1.19	%
Allowance for credit losses as a percentage of loans at period end		1.17	%		1.29	%		1.21	%		1.22	%		1.23	%

WINTRUST FINANCIAL CORPORATION—SUPPLEMENTAL FINANCIAL INFORMATION

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


	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)	2011			2011			2011			2011			2010
Loans past due greater than 90 days and still accruing:
Commercial	$	—		$	—		$	—		$	150		$	478
Commercial real-estate		—			1,105			—			1,997			—
Home equity		—			—			—			—			—
Residential real-estate		—			—			—			—			—
Premium finance receivables—commercial		5,281			4,599			4,446			6,319			8,096
Premium finance receivables—life insurance		—			2,413			324			—			—
Indirect consumer		314			292			284			310			318
Consumer and other		—			—			—			1			1

Total loans past due greater than 90 days and still accruing		5,595			8,409			5,054			8,777			8,893

Non-accrual loans:
Commercial		19,018			24,836			26,168			26,157			16,382
Commercial real-estate		66,508			69,669			89,793			94,001			93,963
Home equity		14,164			15,426			15,853			11,184			7,425
Residential real-estate		6,619			7,546			7,379			4,909			6,085
Premium finance receivables—commercial		7,755			6,942			10,309			9,550			8,587
Premium finance receivables—life insurance		54			349			670			342			354
Indirect consumer		138			146			89			320			191
Consumer and other		233			653			757			147			252

Total non-accrual loans		114,489			125,567			151,018			146,610			133,239

Total non-performing loans:
Commercial		19,018			24,836			26,168			26,307			16,860
Commercial real-estate		66,508			70,774			89,793			95,998			93,963
Home equity		14,164			15,426			15,853			11,184			7,425
Residential real-estate		6,619			7,546			7,379			4,909			6,085
Premium finance receivables—commercial		13,036			11,541			14,755			15,869			16,683
Premium finance receivables—life insurance		54			2,762			994			342			354
Indirect consumer		452			438			373			630			509
Consumer and other		233			653			757			148			253

Total non-performing loans	$	120,084		$	133,976		$	156,072		$	155,387		$	142,132
Other real estate owned		79,093			86,622			82,772			85,290			71,214
Other real estate owned—obtained in acquisition		7,430			10,302			—			—			—

Total non-performing assets	$	206,607		$	230,900		$	238,844		$	240,677		$	213,346

Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial		0.76	%		1.06	%		1.23	%		1.36	%		0.82	%
Commercial real-estate		1.89			2.04			2.66			2.86			2.81
Home equity		1.64			1.75			1.80			1.25			0.81
Residential real-estate		1.89			2.31			2.24			1.42			1.72
Premium finance receivables—commercial		0.92			0.81			1.03			1.19			1.32
Premium finance receivables—life insurance		—			0.17			0.06			0.02			0.02
Indirect consumer		0.70			0.70			0.65			1.20			0.99
Consumer and other		0.19			0.58			0.75			0.15			0.24

Total loans, net of unearned income		1.14	%		1.30	%		1.57	%		1.63	%		1.48	%

Total non-performing assets as a percentage of total assets		1.30	%		1.45	%		1.63	%		1.71	%		1.53	%


Allowance for loan losses as a percentage of total non-performing loans		91.92	%		88.56	%		75.20	%		74.04	%		80.14	%