WTFC Wintrust Financial Corporation

LAKE FOREST, Ill., April 28 /PRNewswire-FirstCall/ -- Wintrust Financial Corporation ("Wintrust" or "the Company") (NASDAQ:WTFC) announced quarterly net income of $6.4 million, or $0.06 per diluted share, for the period ended March 31, 2009, an increase of $0.04 per diluted share, compared to $2.0 million of net income, or $0.02 per diluted share, recorded in the fourth quarter of 2008. Compared to the first quarter of 2008, earnings per diluted share decreased $0.34, on a $3.3 million decrease in net income. Contributing to the decrease in earnings per diluted share in the first quarter of 2009 compared to the first quarter of 2008 were preferred share dividends, reducing net income available to common shareholders by $5.0 million. Edward J. Wehmer, President and Chief Executive Officer, commented, "We are pleased to report net income of $6.4 million in the first quarter of 2009. Despite extremely volatile economic conditions throughout the first quarter, our banks reported increasing new loan volumes and deposit generation. Given the nature of competitive conditions, reasonable pricing metrics are returning to the marketplace." Mr. Wehmer noted, "We recorded $10.0 million of net loan charge-offs and $14.5 million in provision for credit losses in the first quarter. Both of these are essentially the same as the amounts recorded in the previous quarter. Non-performing loans increased in the first quarter as weak economic conditions persist. Distressed real estate valuations due to lack of sales activity, large property inventories, decreasing numbers of potential buyers and other factors continue to restrict the flow of these properties. We remain focused on resolving existing problem credits and are working to identify potential problem credits." Mr. Wehmer added, "Throughout the first quarter we generated solid earning asset growth, lower priced retail core deposits and improvements in loan pricing spreads on new volumes. Record residential mortgage originations in excess of $1.2 billion, primarily loan refinancing, were recorded in the first quarter by our mortgage banking operations. This is nearly a five-fold increase over the fourth quarter of 2008. In the first quarter, more than $2.7 billion of credit was extended to new and existing borrowers subsequent to the U.S. Treasury Department's capital investment as part of the Capital Purchase Program. Our successful community banking model continues to be a competitive advantage in these tough economic times as our banks are predominantly funded by a stable base of retail deposits rather than by volatile wholesale funding vehicles. During the first quarter, outstanding balances in our MaxSafe(R) suite of products, which offer 15 times the level of FDIC insurance a customer can achieve at a single charter bank, increased another $160 million to $534 million. This product continues to be an effectively priced deposit generation tool and is well received in the marketplace." Mr. Wehmer summarized, "The challenges faced by the banking industry in the first quarter most likely will continue throughout 2009. We have been preparing for this for some time and believe we are in a position to take advantage due to our unique community bank model. The Company has the capital available to meet lending demands and to work through each problem credit, as well as diversified retail deposit funding sources to support the quality asset growth." Total assets of $10.8 billion at March 31, 2009 increased $161 million from December 31, 2008 and $1.1 billion from March 31, 2008. Total deposits as of March 31, 2009 were $8.6 billion, an increase of $249 million from December 31, 2008 and $1.1 billion from March 31, 2008. Total loans grew to $7.8 billion as of March 31, 2009, an increase of $220 million, or 12% on an annualized basis, over the $7.6 billion balance as of December 31, 2008 and an increase of $967 million, or 14%, over March 31, 2008. The Company's loan portfolio includes a wide variety of loan types, of which approximately 9% are commercial real estate construction and land development related and 5% are residential real estate construction and land development related. These projects are being carefully monitored on an individual credit basis at each bank. Total shareholders' equity is $1.1 billion, or a book value of $32.64 per common share, at March 31, 2009, compared to $1.1 billion, or a book value of $33.03 per common share, at December 31, 2008 and $753 million, or a book value of $31.97 per common share, at March 31, 2008. Wintrust's key operating measures and growth rates for the first quarter of 2009 as compared to the sequential and linked quarters are shown in the table below: % or % or basis basis point point (bp) (bp) Change Change From From Three Months Ended 4th 1st March 31, December 31, March 31, Quarter Quarter ($in 2009 2008 2008 2008 (4) 2008 thousands, except per share data) Net income $6,358 $1,955 $9,705 225% (34)% Net income per common share - diluted $0.06 $0.02 $0.40 200% (85)% Net revenue (1) $101,209 $82,117 $86,314 23% 17% Net interest income $64,782 $62,745 $61,742 3% 5% Net interest margin (2) 2.71% 2.78% 2.98% (7)bp (27)bp Net overhead ratio (3) 1.53% 1.80% 1.64% (27)bp (11)bp Return on average assets 0.24% 0.08% 0.42 16bp (18)bp Return on average common equity 0.71% 0.22% 5.25 49bp (454)bp At end of period ------- Total assets $10,818,941 $10,658,326 $9,732,466 6% 11% Total loans $7,841,447 $7,621,069 $6,874,916 12% 14% Total deposits $8,625,977 $8,376,750 $7,483,582 12% 15% Total equity $1,063,227 $1,066,572 $753,293 (1)% 41% (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 total average 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, balance sheet growth rates are most often expressed in terms of an annual rate like 20%. As such, a 5% growth rate for a quarter would represent an annualized 20% growth rate. Additional supplemental financial information showing quarterly trends can be found on the Company's website at http://www.wintrust.com/ by choosing "Financial Reports" and then choosing "Supplemental Financial Info." Impacting Comparative Financial Results: Acquisitions, Stock Offerings/Regulatory Capital and New Location Acquisitions On December 23, 2008, the Company announced the acquisition by Wintrust Mortgage Corporation of certain assets and the assumption of certain liabilities of the mortgage banking business of Professional Mortgage Partners ("PMP") of Downers Grove, Illinois. PMP was founded in 1999 and had approximately $1.6 billion in annual mortgage originations in 2008. The terms of the cash transaction were not disclosed, however, a significant portion of the net purchase price for the PMP assets is conditioned upon certain future profitability measures. The impact related to the PMP transaction is included in Wintrust's consolidated financial results only since the effective date of acquisition. Subsequent to quarter-end, Wayne Hummer Asset Management Company completed its previously announced agreement to purchase certain assets and assume certain liabilities of Advanced Investment Partners, LLC ("AIP"). AIP is an investment management firm specializing in the active management of domestic equity investment strategies. The terms of the transaction were not disclosed. Stock Offerings/Regulatory Capital The Company announced on December 19, 2008 that it had received the proceeds from the $250 million investment in Wintrust by the U.S. Treasury Department. The investment was made as part of the U.S. Treasury Department's Capital Purchase Program, which is designed to infuse capital into the nation's healthy banks in order to expand the flow of credit to U.S. consumers and businesses on competitive terms to promote the sustained growth and vitality of the U.S. economy. The investment by the U.S. Treasury Department was comprised of $250 million in preferred shares, with a warrant to purchase 1,643,295 shares of Wintrust common stock at a per share exercise price of $22.82 and a term of 10 years. If declared, dividends on the senior preferred stock are payable quarterly in arrears at a rate of 5% annually for the first five years and 9% thereafter. This investment can, with the approval of the Federal Reserve, be redeemed. The Company filed a shelf registration statement to fulfill the requirement of the Capital Purchase Program that the U.S. Department of Treasury be able to publicly sell the preferred shares and warrant it purchased from Wintrust. On August 26, 2008, the Company sold $50 million ($49.4 million net of issuance costs) of non-cumulative perpetual convertible preferred stock in a private transaction. If declared, dividends on the preferred stock are payable quarterly in arrears at a rate of 8.00% per annum. The shares are convertible into common stock at the option of the holder at a price per share of $27.38. On and after August 26, 2010, the preferred stock will be subject to mandatory conversion into common stock under certain circumstances. De Novo Banking Location Activity In the second quarter of 2008, Wintrust opened a banking location in Vernon Hills, Illinois (Libertyville Bank & Trust Company). Financial Performance Overview For the first quarter of 2009, net interest income totaled $64.8 million, an increase of $3.0 million as compared to the first quarter of 2008 and an increase of $2.0 million as compared to the fourth quarter of 2008. Average earning assets for the first quarter of 2009 increased by $1.4 billion compared to the first quarter of 2008. Earning asset growth over the past 12 months was primarily a result of the $912 million increase in average loans and $448 million increase in liquidity management assets. The average earning asset growth of $1.4 billion over the past 12 months was funded by a $780 million increase in the average balances of Savings, NOW, MMA and Wealth Management deposits, an increase in the average balance of net free funds of $382 million, an increase in the average balance of brokered certificates of deposit of $114 million, an increase in the average balance of retail certificates of deposit of $106 million and a decrease in the average balance of wholesale borrowings (primarily notes payable) of $26 million. At March 31, 2009, $534 million of retail deposits were held in the Company's MaxSafe(R) suite of products (certificates of deposit, MMA and NOW). MaxSafe(R) is an innovative investment alternative that provides up to 15 times the FDIC insurance security of a traditional banking deposit or a total of $3.75 million for interest-bearing accounts, by capitalizing on the Company's multiple chartered subsidiaries and depositing a customer's funds across all 15 of the Company's community banks. The net interest margin for the first quarter of 2009 was 2.71%, compared to 2.98% in the first quarter of 2008 and 2.78% in the fourth quarter of 2008. The decrease in the net interest margin in the first quarter of 2009 when compared to the first quarter of 2008 is directly attributable to two factors: first, interest rate compression as the rates on certain variable rate retail deposit products were unable to decline at the same magnitude as variable rate earning assets and, second, the negative impact of an increased balance of nonaccrual loans. In the first quarter of 2009, higher than acceptable security pricing limited revenue from the Company's covered call strategy. Historically, compression in the net interest margin was effectively offset, as has consistently been the case, 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).") In the first quarter of 2009, the yield on loans decreased 27 basis points and the rate on interest-bearing deposits decreased 37 basis points compared to the fourth quarter of 2008. Management believes opportunities during 2009 for increasing credit spreads in the loan portfolio and repricing of maturities of retail certificates of deposits should help offset the effects of any continued interest rate spread compression on variable rate retail deposits and the unprecedented competitive retail deposit pricing given the current economic conditions that have hindered net interest margin expansion. Non-interest income totaled $36.4 million in the first quarter of 2009, increasing $11.9 million, or 48%, compared to the first quarter of 2008 and increasing $17.1 million, or 357% on an annualized basis, compared to the fourth quarter of 2008. The increase, in comparison to both prior periods, was primarily attributable to increases in mortgage banking revenue. Mortgage banking revenue increased $10.1 million when compared to the first quarter of 2008 and $13.1 million when compared to the fourth quarter of 2008. This was primarily attributable to a significant increase in mortgage loans originated and sold to the secondary market. Mortgages originated and sold totaled over $1.2 billion in the first quarter of 2009 compared to $263 million in the fourth quarter of 2008 and $463 million in the first quarter of 2008. In the first quarter of 2009, Wintrust recognized $2.1 million of other-than-temporary impairment ("OTTI") charges on certain corporate debt investment securities compared to OTTI charges of $3.9 million in the fourth quarter of 2008 and $1.9 million in the first quarter of 2008. During the first quarter of 2009, the Company recognized an increase of $8.8 million in trading income, primarily resulting from the increase in market value of certain securities held as trading assets. Offsetting the increase in trading income was a decrease of $5.4 million on fees from covered call options compared to the fourth quarter of 2008. Non-interest expense totaled $77.0 million in the first quarter of 2009, increasing $14.1 million, or 22%, compared to the first quarter of 2008 and $12.0 million, or 75% on an annualized basis, compared to the fourth quarter of 2008. The increase compared to the fourth quarter of 2008 was attributable to a $9.2 million increase in salaries and employee benefits, increases in the FDIC deposit insurance rates adding $1.3 million of additional expense and an increase of $1.7 million in expenses related to OREO. The $9.2 million in salaries and employee benefits is attributable to an increase in variable pay (commissions) of $5.2 million primarily as a result of the higher mortgage loan origination volumes, $2.0 million of increased base salary and employee benefits as a result of the PMP acquisition, $1.7 million from the seasonal impact of payroll taxes and $0.3 million of other base pay and employee benefits increases. Non-performing loans totaled $175.9 million, or 2.24% of total loans, at March 31, 2009, compared to $136.1 million, or 1.79% of total loans, at December 31, 2008 and $86.5 million, or 1.26% of total loans, at March 31, 2008. OREO of $41.5 million at March 31, 2009 increased $8.9 million compared to December 31, 2008 and $36.6 million compared to March 31, 2008. During the first quarter of 2009, 10 individual properties, representing 6 lending relationships, were acquired by the Company via foreclosure or deed in lieu of foreclosure. The fair value of these properties totaled $21.5 million. Changes in fair value of properties held and properties sold reduced the OREO balance by $12.6 million during the first quarter of 2009. The $151.3 million of non-performing loans as of March 31, 2009 classified as residential real estate and home equity, commercial, consumer, and other consumer consists of $52.3 million of residential real estate construction and land development related loans, $51.5 million of commercial real estate construction and land development related loans, $23.9 million of residential real estate and home equity related loans, $15.1 million of commercial real estate related loans, $6.5 million of commercial related loans, and $2.0 million of consumer related loans. Sixteen of these relationships exceed $2.5 million in outstanding balances, approximating $93.8 million of the $151.3 million in total outstanding balances. 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. The provision for credit losses totaled $14.5 million for the first quarter of 2009 compared to $14.5 million for the fourth quarter of 2008 and $8.6 million in the first quarter of 2008. Net charge-offs for the first quarter totaled 51 basis points on an annualized basis compared to 30 basis points on an annualized basis in the first quarter of 2008 and 53 basis points on an annualized basis in the fourth quarter of 2008. The allowance for credit losses at March 31, 2009 increased to 0.97% compared to 0.94% at December 31, 2008 and 0.79% at March 31, 2008. WINTRUST FINANCIAL CORPORATION SELECTED FINANCIAL HIGHLIGHTS Three Months Ended (Dollars in thousands, except per March 31, share data) 2009 2008 Selected Financial Condition Data (at end of period): Total assets $10,818,941 $9,732,466 Total loans 7,841,447 6,874,916 Total deposits 8,625,977 7,483,582 Junior subordinated debentures 249,502 249,621 Total shareholders' equity 1,063,227 753,293 Selected Statements of Income Data: Net interest income $64,782 $61,742 Net revenue (1) 101,209 86,314 Income before taxes 9,774 14,910 Net income 6,358 9,705 Net income per common share - Basic 0.06 0.41 Net income per common share - Diluted 0.06 0.40 Selected Financial Ratios and Other Data: Performance Ratios: Net interest margin (2) 2.71% 2.98% Non-interest income to average assets 1.38 1.05 Non-interest expense to average assets 2.91 2.70 Net overhead ratio (3) 1.53 1.64 Efficiency ratio (2) (4) 74.10 71.12 Return on average assets 0.24 0.42 Return on average common equity 0.71 5.25 Average total assets $10,724,966 $9,373,539 Average total shareholders' equity 1,061,654 743,997 Average loans to average deposits ratio 93.4% 94.9% Common Share Data at end of period: Market price per common share $12.30 $34.95 Book value per common share $32.64 $31.97 Common shares outstanding 23,910,983 23,563,958 Other Data at end of period: Allowance for credit losses (5) $75,834 $54,251 Non-performing loans $175,866 $91,414 Allowance for credit losses to total loans (5) 0.97% 0.79% Non-performing loans to total loans 2.24% 1.33% Number of: Bank subsidiaries 15 15 Non-bank subsidiaries 7 8 Banking offices 79 78 (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 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 revenues (less securities gains or losses). A lower ratio indicates more efficient revenue generation. (5) The allowance for credit losses includes both the allowance for loan losses and the allowance for lending-related commitments. WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CONDITION (Unaudited) (Unaudited) March 31, December 31, March 31, (In thousands) 2009 2008 2008 Assets Cash and due from banks $122,207 $219,794 $160,890 Federal funds sold and securities purchased under resale agreements 98,454 226,110 280,408 Interest bearing deposits with banks 266,512 123,009 11,280 Available-for-sale securities, at fair value 1,413,576 784,673 1,110,854 Trading account securities 13,815 4,399 1,185 Brokerage customer receivables 15,850 17,901 22,786 Mortgage loans held-for-sale 218,707 61,116 102,324 Loans, net of unearned income 7,841,447 7,621,069 6,874,916 Less: Allowance for loan losses 74,248 69,767 53,758 Net loans 7,767,199 7,551,302 6,821,158 Premises and equipment, net 349,245 349,875 344,863 Accrued interest receivable and other assets 263,145 240,664 188,607 Trade date securities receivable - 788,565 395,041 Goodwill 276,310 276,310 276,121 Other intangible assets 13,921 14,608 16,949 Total assets $10,818,941 $10,658,326 $9,732,466 Liabilities and Shareholders' Equity Deposits: Non-interest bearing $745,194 $757,844 $670,433 Interest bearing 7,880,783 7,618,906 6,813,149 Total deposits 8,625,977 8,376,750 7,483,582 Notes payable 1,000 1,000 70,300 Federal Home Loan Bank advances 435,981 435,981 434,482 Other borrowings 250,488 336,764 293,091 Subordinated notes 70,000 70,000 75,000 Junior subordinated debentures 249,502 249,515 249,621 Trade date securities payable 7,170 - 236,217 Accrued interest payable and other liabilities 115,596 121,744 136,880 Total liabilities 9,755,714 9,591,754 8,979,173 Shareholders' equity: Preferred stock 282,662 281,873 - Common stock 26,766 26,611 26,416 Surplus 575,166 571,887 544,594 Treasury stock (122,302) (122,290) (122,252) Retained earnings 315,855 318,793 314,038 Accumulated other comprehensive loss (14,920) (10,302) (9,503) Total shareholders' equity 1,063,227 1,066,572 753,293 Total liabilities and shareholders' equity $10,818,941 $10,658,326 $9,732,466 WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended March 31, (In thousands, except per share data) 2009 2008 Interest income Interest and fees on loans $106,887 $118,953 Interest bearing deposits with banks 660 120 Federal funds sold and securities purchased under resale agreements 61 634 Securities 14,327 16,081 Trading account securities 24 31 Brokerage customer receivables 120 357 Total interest income 122,079 136,176 Interest expense Interest on deposits 45,953 61,430 Interest on Federal Home Loan Bank advances 4,453 4,556 Interest on notes payable and other borrowings 1,870 2,770 Interest on subordinated notes 580 1,087 Interest on junior subordinated debentures 4,441 4,591 Total interest expense 57,297 74,434 Net interest income 64,782 61,742 Provision for credit losses 14,473 8,555 Net interest income after provision for credit losses 50,309 53,187 Non-interest income Wealth management 5,926 7,865 Mortgage banking 16,232 6,096 Service charges on deposit accounts 2,970 2,373 Gain on sales of premium finance receivables 322 1,141 Losses on available-for-sale securities, net (2,038) (1,333) Other 13,015 8,430 Total non-interest income 36,427 24,572 Non-interest expense Salaries and employee benefits 44,820 36,672 Equipment 3,938 3,926 Occupancy, net 6,190 5,867 Data processing 3,136 2,798 Advertising and marketing 1,095 999 Professional fees 2,883 2,068 Amortization of other intangible assets 687 788 Other 14,213 9,731 Total non-interest expense 76,962 62,849 Income before taxes 9,774 14,910 Income tax expense 3,416 5,205 Net income $6,358 $9,705 Dividends on preferred shares 5,000 - Net income applicable to common shares $1,358 $9,705 Net income per common share - Basic $0.06 $0.41 Net income per common share - Diluted $0.06 $0.40 Cash dividends declared per common share $0.18 $0.18 Weighted average common shares outstanding 23,855 23,518 Dilutive potential common shares 221 582 Average common shares and dilutive common shares 24,076 24,100 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) and the efficiency ratio. 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 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. 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 is shown below: Three Months Ended March 31, (Dollars in thousands) 2009 2008 (A) Interest income (GAAP) $122,079 $136,176 Taxable-equivalent adjustment: - Loans 158 200 - Liquidity management assets 451 511 - Other earning assets 11 13 Interest income - FTE $122,699 $136,900 (B) Interest expense (GAAP) 57,297 74,434 Net interest income - FTE $65,402 $62,466 (C) Net interest income (GAAP) (A minus B) $64,782 $61,742 (D) Net interest margin (GAAP) 2.68% 2.95% Net interest margin - FTE 2.71% 2.98% (E) Efficiency ratio (GAAP) 74.54% 71.71% Efficiency ratio - FTE 74.10% 71.12% LOANS, NET OF UNEARNED INCOME % Growth From From March 31, December 31, March 31, December 31, March 31, 2009 2008 2008 2008(1) 2008 (Dollars in thousands) Balance: -------- Commercial and commercial real estate $4,933,355 $4,778,664 $4,534,383 13% 9% Home equity 920,412 896,438 695,446 11 32 Residential real estate 280,808 262,908 233,556 28 20 Premium finance receivables 1,418,156 1,346,586 1,017,011 22 39 Indirect consumer loans(2) 154,257 175,955 230,771 (50) (33) Other loans 134,459 160,518 163,749 (66) (18) Total loans, net of unearned income $7,841,447 $7,621,069 $6,874,916 12% 14% Mix: ---- Commercial and commercial real estate 63% 63% 66% Home equity 12 12 10 Residential real estate 4 3 3 Premium finance receivables 18 18 15 Indirect consumer loans (2) 2 2 4 Other loans 1 2 2 Total loans, net of unearned income 100% 100% 100% (1) Annualized (2) Includes autos, boats, snowmobiles and other indirect consumer loans. DEPOSITS % Growth From From March 31, December 31, March 31, December 31, March 31, 2009 2008 2008 2008(1) 2008 (Dollars in thousands) Balance: -------- Non-interest bearing $745,194 $757,844 $670,433 (7)% 11% NOW 1,064,663 1,040,105 1,013,603 10 5 Wealth Management deposits ((2)) 833,291 716,178 647,798 66 29 Money market 1,313,157 1,124,068 797,215 68 65 Savings 406,376 337,808 325,096 82 25 Time certificates of deposit 4,263,296 4,400,747 4,029,437 (13) 6 Total deposits $8,625,977 $8,376,750 $7,483,582 12% 15% Mix: ---- Non-interest bearing 9% 9% 9% NOW 12 12 13 Wealth Management deposits (2) 10 9 9 Money market 15 13 11 Savings 5 4 4 Time certificates of deposit 49 53 54 Total deposits 100% 100% 100% (1) Annualized (2) Represents deposit balances at the Company's subsidiary banks from brokerage customers of Wayne Hummer Investments, trust and asset management customers of Wayne Hummer Trust Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts of the Banks. 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 first quarter of 2009 compared to the first quarter of 2008 (linked quarters): For the Three Months Ended For the Three Months Ended March 31, 2009 March 31, 2008 (Dollars in Average Interest Rate Average Interest Rate thousands) ----------- Liquidity management assets(1)(2)(7) $1,839,161 $15,499 3.42% $1,391,400 $17,346 5.01% Other earning assets (2)(3)(7) 22,128 155 2.85 26,403 401 6.10 Loans, net of unearned income (2)(4)(7) 7,924,849 107,045 5.48 7,012,642 119,153 6.83 Total earning assets(7) $9,786,138 $122,699 5.08% $8,430,44 $136,900 6.53% Allowance for loan losses (72,044) (51,364) Cash and due from banks 107,550 124,745 Other assets 903,322 869,713 Total assets $10,724,966 $9,373,539 Interest-bearing Deposits $7,747,879 $45,953 2.41% $6,747,980 $61,430 3.66% Federal Home Loan Bank Advances 435,982 4,453 4.14 426,911 4,556 4.29 Notes payable and other borrowings 301,894 1,870 2.51 332,019 2,770 3.36 Subordinated Notes 70,000 580 3.31 75,000 1,087 5.73 Junior subordinated debentures 249,506 4,441 7.12 249,635 4,591 7.28 Total interest- bearing liabilities $8,805,261 $57,297 2.64% $7,831,545 $74,434 3.82% Non-interest bearing deposits 733,911 642,917 Other Liabilities 124,140 155,080 Equity 1,061,654 743,997 Total liabilities and shareholders' equity $10,724,966 $9,373,539 Interest rate spread (5)(7) 2.44% 2.71% Net free funds/ contribution(6) $980,877 0.27 $598,900 0.27 Net interest Income /Net interest margin (7) $65,402 2.71% $62,466 2.98% (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 account 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 March 31, 2009 and 2008 were $620,000 and $724,000, respectively. (3) Other earning assets include brokerage customer receivables and trading account securities. (4) Loans, net of unearned income, include mortgages 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 measure/ratio. 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 first quarter of 2009 compared to the fourth quarter of 2008 (sequential quarters): For the Three Months Ended For the Three Months Ended March 31, 2009 December 31, 2008 (Dollars in thousands) Average Interest Rate Average Interest Rate Liquidity management assets (1)(2)(7) $1,839,161 $15,499 3.42% $1,607,707 $18,455 4.57% Other earning assets (2)(3)(7) 22,128 155 2.85 21,630 214 3.94 Loans, net of unearned income (2)(4)(7) 7,924,849 107,045 5.48 7,455,418 107,744 5.75 Total earning assets (7) $9,786,138 $122,699 5.08% $9,084,755 $126,413 5.54% Allowance for loan losses (72,044) (67,342) Cash and due from banks 107,550 127,700 Other assets 903,322 915,093 Total assets $10,724,966 $10,060,206 Interest- bearing deposits $7,747,879 $45,953 2.41% $7,271,505 $50,740 2.78% Federal Home Loan Bank advances 435,982 4,453 4.14 439,432 4,570 4.14 Notes payable and other borrowings 301,894 1,870 2.51 379,914 2,387 2.50 Subordinated notes 70,000 580 3.31 73,364 770 4.11 Junior subordinated debentures 249,506 4,441 7.12 249,520 4,606 7.22 Total interest- bearing liabilities $8,805,261 $57,297 2.64% $8,413,735 $63,073 2.98% Non-interest bearing deposits 733,911 705,616 Other liabilities 124,140 93,873 Equity 1,061,654 846,982 Total liabilities and shareholders' equity $10,724,966 $10,060,206 Interest rate spread (5)(7) 2.44% 2.56% Net free funds/ contribution (6) $980,877 0.27 $671,020 0.22 Net interest income/Net interest margin (7) $65,402 2.71% $63,340 2.78% (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 account 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 March 31, 2009 was $620,000 and for the three months ended December 31, 2008 was $594,000. (3) Other earning assets include brokerage customer receivables and trading account securities. (4) Loans, net of unearned income, include mortgages 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 measure/ratio. The higher level of net interest income recorded in the first quarter of 2009 compared to the fourth quarter of 2008 was attributable to increasing credit spreads on new loan volumes and the ability to raise interest-bearing deposits at more reasonable rates and strong earning asset growth. Average earning asset growth of $701 million in the first quarter of 2009 compared to the fourth quarter of 2008 was comprised of $469 million of loan growth and $231 million of liquid management asset growth. This growth was primarily funded by a $476 million increase in the average balances of interest-bearing liabilities and an increase in the average balance of net free funds of $310 million. Management believes opportunities during 2009 for continuing to increase credit spreads in the loan portfolio and favorable repricing of maturing retail certificates of deposit should help offset the effects of any additional interest rate spread compression on variable rate retail deposits and the unprecedented competitive retail deposit pricing given the current economic conditions that have hindered net interest margin expansion. NON-INTEREST INCOME For the first quarter of 2009, non-interest income totaled $36.4 million, an increase of $11.9 million compared to the first quarter of 2008. The increase was primarily attributable to increases in mortgage banking revenue and trading income. Offsetting these increases were lower levels of fees from covered call options, lower wealth management revenue, lower gains on sales of premium finance receivables and higher OTTI charges. The following table presents non-interest income by category for the periods presented: Three Months Ended March 31, (Dollars in $ % thousands) 2009 2008 Change Change Brokerage $3,819 $5,038 (1,219) (24) Trust and asset management 2,107 2,827 (720) (25) Total wealth management 5,926 7,865 (1,939) (25) Mortgage banking 16,232 6,096 10,136 166 Service charges on deposit accounts 2,970 2,373 597 25 Gain on sales of premium finance receivables 322 1,141 (819) (72) Losses on available-for-sale securities, net (2,038) (1,333) (705) 53 Other: Fees from covered call options 1,998 6,780 (4,782) (71) Bank Owned Life Insurance 286 613 (327) (53) Trading income 8,744 33 8,711 NM Administrative services 482 713 (231) (32) Miscellaneous 1,505 291 1,214 NM Total other 13,015 8,430 4,585 54 Total non-interest income $36,427 $24,572 11,855 48 NM = Not Meaningful Wealth management is comprised of the trust and asset management revenue of Wayne Hummer Trust Company and the asset management fees, brokerage commissions, trading commissions and insurance product commissions at Wayne Hummer Investments and Wayne Hummer Asset Management Company. Wealth management totaled $5.9 million in the first quarter of 2009 and $7.9 million in the first quarter of 2008. Decreased asset valuations due to the equity market declines over the past 12 months have hindered the revenue growth from trust and asset management activities. Continued uncertainties surrounding the equity markets overall have slowed the growth of the brokerage component of wealth management revenue. Mortgage banking includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. For the quarter ended March 31, 2009, this revenue source totaled $16.2 million, an increase of $10.1 million when compared to the first quarter of 2008. The increase was primarily attributable to $12.5 million from gains recognized on loans sold to the secondary market offset by $2.4 million from changes in the fair market value of mortgage servicing rights, valuation fluctuations of mortgage banking derivatives, fair value accounting for certain residential mortgage loans held for sale and increased recourse obligation for loans previously sold. Future growth of mortgage banking is impacted by the interest rate environment and current residential housing conditions and will continue to be dependent upon both. Mortgages originated and sold totaled over $1.2 billion in the first quarter of 2009 compared to $263 million in the fourth quarter of 2008 and $427 million in the first quarter of 2008. The positive impact of the PMP transaction, completed at the end of 2008, contributed to mortgage banking in the first quarter of 2009. Service charges on deposit accounts totaled $3.0 million for the first quarter of 2009, an increase of $597,000, or 25%, when compared to the same quarter of 2008. The majority of deposit service charges relates to customary fees on overdrawn accounts and returned items. The level of service charges received is substantially below peer group levels, as management believes in the philosophy of providing high quality service without encumbering that service with numerous activity charges. Wintrust did not sell any premium finance receivables in the first quarter of 2009 but recognized $322,000 of gains in the first quarter of 2009 on clean-up calls of previous sales. Wintrust sold $115 million of premium finance receivables in the first quarter of 2008, recognizing $1.1 million of net gains. Sales of these receivables in future quarters are dependent upon an improvement in the market conditions impacting both sales of these loans and the opportunity for securitizing these loans as well as liquidity and capital management considerations. Wintrust recognized $2.0 million of net losses on available-for-sale securities in the first quarter of 2009 compared to net losses of $1.3 million in the first quarter of 2008. In the first quarter of 2009, this amount included $2.1 million of OTTI charges on certain corporate debt investment securities compared to $1.9 million of OTTI charges in the first quarter of 2008. Other non-interest income for the first quarter of 2009 totaled $13.0 million compared to $8.4 million in the first quarter of 2008. The largest component of the increase in other income was an increase in trading income as the Company recognized $8.1 million in trading income resulting from the increase in market value of certain securities held as trading assets. Miscellaneous income benefited comparatively in the current quarter as the first quarter of 2008 included a $0.9 million OTTI charge on certain investment partnerships. Offsetting these increases were fees from certain covered call option transactions decreasing by $4.8 million. Historically, compression in the net interest margin was effectively offset, as has consistently been the case, by the Company's covered call strategy. Management has been able to effectively use the proceeds from selling covered call options to offset net interest margin compression and administers such sales in a coordinated process with the Company's overall asset/liability management. The covered call option contracts are written against certain U.S. Treasury and agency securities held in the Company's portfolio for liquidity and other purposes. In the first quarter of 2009, higher than acceptable security pricing limited revenue from 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)."). Other non-interest income for the first quarter of 2009 totaled $13.0 million compared to $8.4 million in the first quarter of 2008. The largest component of the increase in other income was an increase in trading income as the Company recognized $8.1 million in trading income resulting from the increase in market value of certain CMOs held as trading assets. Miscellaneous income benefited comparatively in the current quarter as the first quarter of 2008 included a $0.9 million OTTI charge on certain investment partnerships. Offsetting these increases were fees from certain covered call option transactions decreasing by $4.8 million. Historically, compression in the net interest margin was effectively offset, as has consistently been the case, by the Company's covered call strategy. Management has been able to effectively use the proceeds from selling covered call options to offset net interest margin compression and administers such sales in a coordinated process with the Company's overall asset/liability management. The covered call option contracts are written against certain U.S. Treasury and agency securities held in the Company's portfolio for liquidity and other purposes. In the first quarter of 2009, higher than acceptable security pricing limited revenue from 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)."). NON-INTEREST EXPENSE Non-interest expense for the first quarter of 2009 totaled $77.0 million and increased approximately $14.1 million, or 22%, from the first quarter 2008 total of $62.8 million. The following table presents non-interest expense by category for the periods presented: Three Months Ended March 31, $ % (Dollars in thousands) 2009 2008 Change Change Salaries and employee benefits $44,820 $36,672 8,148 22 Equipment 3,938 3,926 12 - Occupancy, net 6,190 5,867 323 6 Data processing 3,136 2,798 338 12 Advertising and marketing 1,095 999 96 10 Professional fees 2,883 2,068 815 39 Amortization of other intangible assets 687 788 (101) (13) Other: Commissions - 3rd party brokers 704 985 (281) (29) Postage 1,180 986 194 20 Stationery and supplies 768 742 26 4 FDIC insurance 3,013 1,286 1,727 134 OREO expenses, net 2,356 58 2,298 NM Miscellaneous 6,192 5,674 518 9 Total other 14,213 9,731 4,482 46 Total non-interest expense $76,962 $62,849 14,113 22 NM = Not Meaningful Salaries and employee benefits comprised 58% of total non-interest expense in the first quarter of 2009 and 2008. Salaries and employee benefits expense increased $8.1 million, or 22%, in the first quarter of 2009 compared to the first quarter of 2008 primarily as a result of higher commission and incentive compensation expenses related to mortgage banking activities and the incremental costs of the PMP staff. The large increase in salaries and employee benefits is attributable to an increase in variable pay (commissions) of $4.7 million primarily as a result of the higher mortgage loan origination volumes, $2.0 million of increased base salary and employee benefits as a result of the PMP acquisition and $1.4 million from seasonal base pay and employee benefits increases. Professional fees include legal, audit and tax fees, external loan review costs and normal regulatory exam assessments. Professional fees for the first quarter of 2009 were $2.9 million, an increase of $815,000, or 39%, compared to the same period of 2008. These increases are primarily a result of increased legal costs related to non-performing loans. FDIC insurance totaled $3.0 million in the first quarter of 2009, an increase of $1.7 million, or 134%, compared to $1.3 million in the first quarter of 2008. The FDIC increased deposit insurance rates dramatically at the beginning of 2009 in response to the current economic conditions. Miscellaneous expense includes expenses such as ATM expenses, net OREO expenses, correspondent bank charges, directors' fees, telephone, travel and entertainment, corporate insurance, dues and subscriptions and lending origination costs that are not deferred. Miscellaneous expenses in the first quarter of 2009 increased $518,000, or 9%, compared to the same period in the prior year with the largest component increase related to a $252,000 increase in net lending origination costs. ASSET QUALITY Allowance for Credit Losses Three Months Ended March 31, (Dollars in thousands) 2009 2008 Allowance for loan losses at beginning of period $69,767 $50,389 Provision for credit losses 14,473 8,555 Charge-offs: ------------ Commercial and commercial real estate loans 7,890 3,957 Home equity loans 511 - Residential real estate loans 152 219 Premium finance receivables 1,351 883 Indirect consumer loans 361 258 Consumer and other loans 121 94 Total charge-offs 10,386 5,411 Recoveries: ----------- Commercial and commercial real estate loans 208 40 Home equity loans 1 - Residential real estate loans - - Premium finance receivables 141 128 Indirect consumer loans 29 45 Consumer and other loans 15 12 Total recoveries 394 225 Net charge-offs (9,992) (5,186) Allowance for loan losses at period end $74,248 $53,758 Allowance for lending-related commitments at period end $1,586 $493 Allowance for credit losses at period end $75,834 $54,251 Annualized net charge-offs by category as a percentage of its own respective category's average: Commercial and commercial real estate loans 0.65% 0.35% Home equity loans 0.23 - Residential real estate loans 0.14 0.27 Premium finance receivables 0.35 0.27 Indirect consumer loans 0.81 0.36 Consumer and other loans 0.27 0.16 Total loans, net of unearned income 0.51% 0.30% Net charge-offs as a percentage of the provision for loan losses 69.04% 60.62% Loans at period-end $7,841,447 $6,874,916 Allowance for loan losses as a percentage of loans at period-end 0.95% 0.78% Allowance for credit losses as a percentage of loans at period-end 0.97% 0.79% The allowance for credit losses is comprised of the allowance for loan losses and the allowance for lending-related commitments. The allowance for loan losses is a reserve against loan amounts that are actually funded and outstanding while the allowance for 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 lending-related commitments (separate liability account) represents the portion of the provision for credit losses that was associated with unfunded lending-related commitments. The provision for credit 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). Non-performing Loans The following table sets forth Wintrust's non-performing loans at the dates indicated. March 31, December 31, March 31, (Dollars in thousands) 2009 2008 2008 Loans past due greater than 90 days and still accruing: Residential real estate and home equity (1) $726 $617 $387 Commercial, consumer and other 4,958 14,750 8,557 Premium finance receivables 9,722 9,339 8,133 Indirect consumer loans 1,076 679 635 Total past due greater than 90 days and still accruing 16,482 25,385 17,712 Non-accrual loans: Residential real estate and home equity (1) 9,209 6,528 3,655 Commercial, consumer and other 136,397 91,814 51,233 Premium finance receivables 12,694 11,454 13,542 Indirect consumer loans 1,084 913 399 Total non-accrual 159,384 110,709 68,829 Total non-performing loans: Residential real estate and home equity (1) 9,935 7,145 4,042 Commercial, consumer and other 141,355 106,564 59,790 Premium finance receivables 22,416 20,793 21,675 Indirect consumer loans 2,160 1,592 1,034 Total non-performing loans $175,866 $136,094 $86,541 Total non-performing loans by category as a percent of its own respective category's period-end balance: Residential real estate and home equity (1) 0.83% 0.62% 0.44% Commercial, consumer and other 2.79 2.16 1.27 Premium finance receivables 1.58 1.54 2.13 Indirect consumer loans 1.40 0.90 0.45 Total non-performing loans 2.24% 1.79% 1.26% Allowance for loan losses as a percentage of non-performing loans 42.22% 51.26% 62.12% (1) Residential real estate and home equity loans that are non-accrual and past due greater than 90 days and still accruing do not include non- performing mortgage loans held-for-sale. These balances totaled $0 as of March 31, 2009 and December 31, 2008, respectively, and $2.1 million as of March 31, 2008. Mortgage loans held-for sale are carried at either fair value or at the lower of cost or market applied on an aggregate basis by loan type. Charges related to adjustments to record the loans at fair value are recognized in mortgage banking revenue. The provision for credit losses totaled $14.5 million for the first quarter of 2009, $14.5 million in the fourth quarter of 2008 and $8.6 million for the first quarter of 2008. For the quarter ended March 31, 2009, net charge-offs totaled $10.0 million compared to $9.9 million in the fourth quarter of 2008 and $5.2 million recorded in the first quarter of 2008. On a ratio basis, annualized net charge-offs as a percentage of average loans were 0.51% in the first quarter of 2009, 0.53% in the fourth quarter of 2008, and 0.30% in the first quarter of 2008. Management believes the allowance for loan losses is adequate 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 loan losses will be dependent upon management's assessment of the adequacy 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 from the end of the prior quarter reflects the continued economic weaknesses in the Company's markets and is the result of an individual review of a significant number of individual credits as well as the overall risk factors impacting certain types of credits, specifically credits with residential development collateral valuation exposure. Non-performing Residential Real Estate and Home Equity The non-performing residential real estate and home equity loans totaled $9.9 million as of March 31, 2009. The balance increased $5.9 million from March 31, 2008 and increased $2.8 million from December 31, 2008. The March 31, 2009 non-performing balance is comprised of $4.9 million of residential real estate (20 individual credits) and $5.0 million of home equity loans (23 individual credits). On average, this is approximately three 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, Consumer and Other The commercial, consumer and other non-performing loan category totaled $141.4 million as of March 31, 2009 compared to $106.6 million as of December 31, 2008 and $59.7 million as of March 31, 2008. Management is pursuing the resolution of all credits in this category. However, given the current state of the residential real estate market, resolution of certain credits could span a lengthy period of time until market conditions stabilize. At this time, management believes reserves are adequate to absorb inherent losses that may occur upon the ultimate resolution of these credits. Non-performing Loan Composition The $151.3 million of non-performing loans as of March 31, 2009 classified as residential real estate and home equity, commercial, consumer, and other consumer consists of $52.3 million of residential real estate construction and land development related loans, $51.5 million of commercial real estate construction and land development related loans, $23.9 million of residential real estate and home equity related loans, $15.1 million of commercial real estate related loans, $6.5 million of commercial related loans and $2.0 million of consumer related loans. Sixteen of these relationships exceed $2.5 million in outstanding balances, approximating $93.8 million in total outstanding balances. At this time, management believes reserves are adequate to absorb inherent losses that may occur upon the ultimate resolution of these credits. Non-performing Premium Finance Receivables The table below presents the level of non-performing premium finance receivables as of March 31, 2009 and 2008, and the amount of net charge-offs for the quarters then ended. (Dollars in thousands) March 31, 2009 March 31, 2008 Non-performing premium finance receivables $22,416 $21,675 - as a percent of premium finance receivables outstanding 1.58% 2.13% Net charge-offs of premium finance receivables $1,210 $755 - annualized as a percent of average premium finance receivables 0.35% 0.27% As noted below, 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 premium finance receivables. The ratio of non-performing 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 premium finance receivables it customarily takes 60-150 days to convert the collateral into cash collections. Accordingly, the level of non-performing 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. Non-performing Indirect Consumer Loans Total non-performing indirect consumer loans were $2.2 million at March 31, 2009, compared to $1.6 million at December 31, 2008 and $1.0 million at March 31, 2008. The ratio of these non-performing loans to total indirect consumer loans was 1.40% at March 31, 2009 compared to 0.90% at December 31, 2008 and 0.45% at March 31, 2008. As noted in the Allowance for Credit Losses table, net charge-offs as a percent of total indirect consumer loans were 0.81% for the quarter ended March 31, 2009 compared to 0.36% in the same period in 2008. At the beginning of the third quarter of 2008, the Company ceased the origination of indirect automobile loans. This niche business served the Company well over the past 12 years in helping de-novo banks quickly, and profitably, grow into their physical structures. Competitive pricing pressures significantly reduced the long-term potential profitably of this niche business. Given the current economic environment and the retirement of the founder of this niche business, exiting the origination of this business was deemed to be in the best interest of the Company. The Company will continue to service its existing portfolio during the duration of the credits. Other Real Estate Owned The table below presents a summary of other real estate owned as of March 31, 2009 and shows the changes in the balance from December 31, 2008 for each property type: Residential Residential Real Estate Commercial Total Real Estate Development Real Estate Balance (Dollars in thousands $ # R $ # R $ # R $ # R Balance at December 31, 2008 $6,907 12 12 $21,712 46 14 $3,953 7 4 $32,572 65 30 Transfers at fair value 2,800 1 1 17,583 8 4 1,137 1 1 21,520 10 6 Fair value adjustments (19) - - 207 - - (276) - - (88) - - Resolved (1,407) (6) (6) (11,080) (9) (5) - - - (12,487) (15) (11) Balance at March 31, 2009 $8,281 7 7 28,422 45 13 4,814 8 5 41,517 60 25 Balance at March 31, 2008 $4,873 $ - balance # - number of properties R - number of relationships WINTRUST SUBSIDIARIES AND LOCATIONS Wintrust is a financial holding company whose common stock is traded on the Nasdaq Stock 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, Advantage National Bank in Elk Grove Village, 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, Darien, Deerfield, Downers Grove, Frankfort, Geneva, Glencoe, Glen Ellyn, Gurnee, Grayslake, Highland Park, Highwood, Hoffman Estates, Island Lake, Lake Bluff, Lake Villa, Lindenhurst, McHenry, Mokena, Mundelein, North Chicago, Northfield, Palatine, Prospect Heights, Ravinia, Riverside, Roselle, Sauganash, Skokie, Spring Grove, Vernon Hills, Wauconda, Western Springs, Willowbrook and Winnetka, and in Delafield, Elm Grove, Madison and Wales, Wisconsin. Additionally, the Company operates various non-bank subsidiaries. First Insurance Funding Corporation, one of the largest commercial insurance premium finance companies operating in the United States, serves commercial 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 Corporation (formerly known as WestAmerica Mortgage 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. Wayne Hummer Asset Management Company provides money management services and advisory services to individual accounts. Wayne Hummer 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 in this document can be identified through the use of words such as "may," "will," "intend," "plan," "project," "expect," "anticipate," "should," "would," "believe," "estimate," "contemplate," "possible," and "point." Forward-looking statements and information are not historical facts, are premised on many factors, 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 in Item 1A on page 20 of the Company's 2008 Form 10-K. 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 projected growth, anticipated improvements in earnings, earnings per share and other financial performance measures, and management's long-term performance goals, as well as statements relating to the anticipated effects on financial results of condition from expected developments or events, the Company's business and growth strategies, including anticipated internal growth, plans to form additional de novo banks and to open new branch offices, and to pursue additional potential development or acquisitions of banks, wealth management entities or specialty finance businesses. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following: -- 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). -- Changes in the interest rate environment, which may influence, among other things, the growth of loans and deposits, the quality of the Company's loan portfolio, the pricing of loans and deposits and net interest income. -- The extent of defaults and losses on the Company's loan portfolio, which may require further increases in its allowance for credit losses. -- Distressed global credit and capital markets. -- The ability of the Company to obtain liquidity and income from the sale of premium finance receivables in the future and the unique collection and delinquency risks associated with such loans. -- Legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies. -- Failure to identify and complete acquisitions in the future or unexpected difficulties or unanticipated developments related to the integration of acquired entities with the Company. -- Significant litigation involving the Company. -- Changes in general economic conditions in the markets in which the Company operates. -- The ability of the Company to receive dividends from its subsidiaries. -- Unexpected difficulties or unanticipated developments related to the Company's strategy of de novo bank formations and openings. De novo banks 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. -- 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 risk that the terms of the U.S. Treasury Department's Capital Purchase Program could change. -- The effect of continued margin pressure on the Company's financial results. -- Additional deterioration in asset quality. -- Additional charges related to asset impairments. -- The other risk factors set forth in the Company's filings with the Securities and Exchange Commission. 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. (CDT) Wednesday, April 29, 2009 regarding first quarter 2009 results. Individuals interested in listening should call (877) 365-7575 and enter Conference ID #95822026. 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 News and Events, Presentations & Conference Calls. The text of the first quarter 2009 earnings press release will be available on the Company's web site at (http://www.wintrust.com/), Investor News and Events, Press Releases. WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Selected Financial Highlights - 5 Quarter Trends (Dollars in thousands, except per share data) Selected Financial Condition Data (at end of period): Three Months Ended March 31, December 31, September 30, June 30, March 31, 2009 2008 2008 2008 2008 Total assets $10,818,941 $10,658,326 $9,864,920 $9,923,077 $9,732,466 Total loans 7,841,447 7,621,069 7,322,545 7,153,603 6,874,916 Total deposits 8,625,977 8,376,750 7,829,527 7,761,367 7,483,582 Junior subordinated debentures 249,502 249,515 249,537 249,579 249,621 Total shareholders' equity 1,063,227 1,066,572 809,331 749,025 753,293 Selected Statements of Income Data: Net interest income $64,782 $62,745 $60,680 $59,400 $61,742 Net revenue (1) 101,209 82,117 82,810 93,004 86,314 Income (loss) before taxes 9,774 2,727 (4,518) 17,522 14,910 Net income (loss) 6,358 1,955 (2,448) 11,276 9,705 Net income (loss) per common share - Basic 0.06 0.02 (0.13) 0.48 0.41 Net income (loss) per common share - Diluted 0.06 0.02 (0.13) 0.47 0.40 Selected Financial Ratios and Other Data: Performance Ratios: Net interest margin (2) 2.71% 2.78% 2.74% 2.77% 2.98% Non-interest income to average assets 1.38 0.77 0.89 1.40 1.05 Non-interest expense to average assets 2.91 2.57 2.54 2.71 2.70 Net overhead ratio (3) 1.53 1.80 1.65 1.31 1.64 Efficiency ratio (2)(4) 74.10 75.22 76.64 69.54 71.12 Return on average assets 0.24 0.08 (0.10) 0.47 0.42 Return on average equity 0.71 0.22 (1.59) 5.97 5.25 Average total assets $10,724,966 $10,060,206 $9,881,554 $9,682,454 9,373,539 Average total shareholders' equity 1,061,654 846,982 765,892 760,253 743,997 Average loans to average deposits ratio 93.4% 93.5% 94.1% 94.6% 94.9% Common Share Data at end of period: Market price per common share $12.30 $20.57 $29.35 $23.85 $34.95 Book value per common share $32.64 $33.03 $32.07 $31.70 $31.97 Common shares outstanding 23,910,983 23,756,674 23,693,799 23,625,841 23,563,958 Other Data at end of period: Allowance for credit losses (5) $75,834 $71,352 $66,820 $58,126 $54,251 Non-performing loans $175,866 $136,094 $113,041 $86,806 $86,541 Allowance for credit losses to total loans (5) 0.97% 0.94% 0.91% 0.81% 0.79% Non-performing loans to total loans 2.24% 1.79% 1.54% 1.21% 1.26% Number of: Bank subsidiaries 15 15 15 15 15 Non-bank subsidiaries 7 7 8 8 8 Banking offices 79 79 79 79 78 (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) The allowance for credit losses includes both the allowance for loan losses and the allowance for lending-related commitments. WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Consolidated Statements of Condition - 5 Quarter Trends (Unaudited) (Unaudited)(Unaudited)(Unaudited) March 31, December 31, September 30, June 30, March 31, (In thousands) 2009 2008 2008 2008 2008 Assets Cash and due from banks $122,207 $219,794 $158,201 $166,857 $160,890 Federal funds sold and securities purchased under resale agreements 98,454 226,110 35,181 73,311 280,408 Interest- bearing deposits with banks 266,512 123,009 4,686 6,438 11,280 Available- for-sale securities, at fair value 1,413,576 784,673 1,469,500 1,590,648 1,110,854 Trading account securities 13,815 4,399 2,243 1,877 1,185 Brokerage customer receivables 15,850 17,901 19,436 19,661 22,786 Mortgage loans held-for-sale 218,707 61,116 68,398 118,379 102,324 Loans, net of unearned income 7,841,447 7,621,069 7,322,545 7,153,603 6,874,916 Less: Allowance for loan losses 74,248 69,767 66,327 57,633 53,758 Net loans 7,767,199 7,551,302 7,256,218 7,095,970 6,821,158 Premises and equipment, net 349,245 349,875 349,388 348,881 344,863 Accrued interest receivable and other assets 263,145 240,664 209,970 208,574 188,607 Trade date securities receivable - 788,565 - - 395,041 Goodwill 276,310 276,310 276,310 276,311 276,121 Other intangible assets 13,921 14,608 15,389 16,170 16,949 Total assets $10,818,941 $10,658,326 $9,864,920 $9,923,077 $9,732,466 Liabilities and Shareholders' Equity Deposits: Non-interest bearing $745,194 $757,844 $717,587 $688,512 $670,433 Interest bearing 7,880,783 7,618,906 7,111,940 7,072,855 6,813,149 Total deposits 8,625,977 8,376,750 7,829,527 7,761,367 7,483,582 Notes payable 1,000 1,000 42,025 41,975 70,300 Federal Home Loan Bank advances 435,981 435,981 438,983 438,983 434,482 Other borrowings 250,488 336,764 296,391 383,009 293,091 Subordinated notes 70,000 70,000 75,000 75,000 75,000 Junior subordinated debentures 249,502 249,515 249,537 249,579 249,621 Trade date securities payable 7,170 - 2,000 97,898 236,217 Accrued interest payable and other liabilities 115,596 121,744 122,126 126,241 136,880 Total liabilities 9,755,714 9,591,754 9,055,589 9,174,052 8,979,173 Shareholders' equity: Preferred stock 282,662 281,873 49,379 - - Common stock 26,766 26,611 26,548 26,478 26,416 Surplus 575,166 571,887 551,453 547,792 544,594 Treasury stock (122,302) (122,290) (122,290) (122,258) (122,252) Retained earnings 315,855 318,793 318,066 325,314 314,038 Accumulated other comprehensive loss (14,920) (10,302) (13,825) (28,301) (9,503) Total shareholders' equity 1,063,227 1,066,572 809,331 749,025 753,293 Total liabilities and shareholders' equity $10,818,941 $10,658,326 $9,864,920 $9,923,077 $9,732,466 WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Consolidated Statements of Income (Unaudited) - 5 Quarter Trends Three Months Ended March 31, December 31, September 30, June 30, March 31, (In thousands, 2009 2008 2008 2008 2008 except per share data) Interest income Interest and fees on loans $106,887 $107,598 $108,495 $108,803 $118,953 Interest bearing deposits with banks 660 125 27 68 120 Federal funds sold and securities purchased under resale agreements 61 30 197 472 634 Securities 14,327 17,868 17,599 16,553 16,081 Trading account securities 24 33 23 15 31 Brokerage customer receivables 120 164 228 249 357 Total interest income 122,079 125,818 126,569 126,160 136,176 Interest expense Interest on deposits 45,953 50,740 53,405 53,862 61,430 Interest on Federal Home Loan Bank advances 4,453 4,570 4,583 4,557 4,556 Interest on notes payable and other borrowings 1,870 2,387 2,661 2,900 2,770 Interest on subordinated notes 580 770 786 843 1,087 Interest on junior subordinated debentures 4,441 4,606 4,454 4,598 4,591 Total interest expense 57,297 63,073 65,889 66,760 74,434 Net interest income 64,782 62,745 60,680 59,400 61,742 Provision for credit losses 14,473 14,456 24,129 10,301 8,555 Net interest income after provision for credit losses 50,309 48,289 36,551 49,099 53,187 Non-interest income Wealth management 5,926 6,705 7,044 7,771 7,865 Mortgage banking 16,232 3,138 4,488 7,536 6,096 Service charges on deposit accounts 2,970 2,684 2,674 2,565 2,373 Gain on sale of premium finance receivables 322 361 456 566 1,141 (Losses) gains on available- for-sale securities, net (2,038) (3,618) 920 (140) (1,333) Other 13,015 10,102 6,548 15,306 8,430 Total non-interest income 36,427 19,372 22,130 33,604 24,572 Non-interest expense Salaries and employee benefits 44,820 35,616 35,823 36,976 36,672 Equipment 3,938 4,190 4,050 4,048 3,926 Occupancy, net 6,190 5,947 5,666 5,438 5,867 Data processing 3,136 3,007 2,850 2,918 2,798 Advertising and marketing 1,095 1,642 1,343 1,368 999 Professional fees 2,883 2,334 2,195 2,227 2,068 Amortization of other intangible assets 687 781 781 779 788 Other 14,213 11,417 10,491 11,427 9,731 Total non- interest expense 76,962 64,934 63,199 65,181 62,849 Income (loss) before income taxes 9,774 2,727 (4,518) 17,522 14,910 Income tax expense (benefit) 3,416 772 (2,070) 6,246 5,205 Net income (loss) $6,358 $1,955 $(2,448) $11,276 $9,705 Dividends on preferred shares 5,000 1,532 544 - - Net income (loss) applicable to common shares $1,358 $423 $(2,992) $11,276 $9,705 Net income (loss) per common share - Basic $0.06 $0.02 $(0.13) $0.48 $0.41 Net income (loss) per common share - Diluted $0.06 $0.02 $(0.13) $0.47 $0.40 Cash dividends declared per common share $0.18 $- $0.18 $- $0.18 Weighted average common shares outstanding 23,855 23,726 23,644 23,608 23,518 Dilutive potential common shares 221 447 - 531 582 Average common shares and dilutive common shares 24,076 24,173 23,644 24,139 24,100 WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Period End Loan Balances - 5 Quarter Trends March 31, December 31, September 30, June 30, March 31, (Dollars in thousands) 2009 2008 2008 2008 2008 Balance: Commercial and commercial real estate $4,933,355 $4,778,664 $4,673,682 $4,610,550 $4,534,383 Home equity 920,412 896,438 837,127 770,748 695,446 Residential real estate 280,808 262,908 247,203 243,400 233,556 Premium finance receivables 1,418,156 1,346,586 1,205,376 1,145,986 1,017,011 Indirect consumer loans (1) 154,257 175,955 199,845 221,511 230,771 Other loans 134,459 160,518 159,312 161,408 163,749 Total loans, net of unearned income $7,841,447 $7,621,069 $7,322,545 $7,153,603 $6,874,916 Mix: Commercial and commercial real estate 63% 63% 64% 65% 66% Home equity 12 12 11 11 10 Residential real estate 4 3 4 3 3 Premium finance receivables 18 18 17 16 15 Indirect consumer loans (1) 2 2 3 3 4 Other loans 1 2 1 2 2 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 Deposit Balances - 5 Quarter Trends March 31, December 31, September 30, June 30, March 31, (Dollars in thousands) 2009 2008 2008 2008 2008 Balance: Non-interest bearing $745,194 $757,844 $717,587 $688,512 $670,433 NOW 1,064,663 1,040,105 1,012,393 1,064,792 1,013,603 Wealth management deposits (1) 833,291 716,178 583,715 599,451 647,798 Money market 1,313,157 1,124,068 997,638 900,482 797,215 Savings 406,376 337,808 317,108 326,869 325,096 Time certificates of deposit 4,263,296 4,400,747 4,201,086 4,181,261 4,029,437 Total deposits $8,625,977 $8,376,750 $7,829,527 $7,761,367 $7,483,582 Mix: Non-interest bearing 9% 9% 9% 9% 9% NOW 12 12 13 14 13 Wealth management deposits (1) 10 9 7 8 9 Money market 15 13 13 11 11 Savings 5 4 4 4 4 Time certificates of deposit 49 53 54 54 54 Total deposits 100% 100% 100% 100% 100% (1) Represents deposit balances at the Company's subsidiary banks from brokerage customers of Wayne Hummer Investments, the trust and asset management customers of Wayne Hummer Trust Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts of the Banks. WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Quarterly Average Balances - 5 Quarter Trends Three Months Ended March 31, December 31, September 30, June 30, March 31, (Dollars in thousands) 2009 2008 2008 2008 2008 Liquidity management assets $1,839,161 $1,607,707 $1,544,465 $1,543,795 $1,391,400 Other earning assets 22,128 21,630 21,687 22,519 26,403 Loans, net of unearned income 7,924,849 7,455,418 7,343,845 7,158,317 7,012,642 Total earning assets $9,786,138 $9,084,755 $8,909,997 $8,724,631 $8,430,445 Allowance for loan losses (72,044) (67,342) (57,751) (53,798) (51,364) Cash and due from banks 107,550 127,700 133,527 125,806 124,745 Other assets 903,322 915,093 895,781 885,815 869,713 Total assets $10,724,966 $10,060,206 $9,881,554 $9,682,454 $9,373,539 Interest- bearing deposits $7,747,879 $7,271,505 $7,127,065 $6,906,437 $6,747,980 Federal Home Loan Bank advances 435,982 439,432 438,983 437,642 426,911 Notes payable and other borrowings 301,894 379,914 398,911 439,130 332,019 Subordinated notes 70,000 73,364 75,000 75,000 75,000 Junior subordinated debentures 249,506 249,520 249,552 249,594 249,635 Total interest- bearing liabilities $8,805,261 $8,413,735 $8,289,511 $8,107,803 $7,831,545 Non-interest bearing deposits 733,911 705,616 678,651 663,526 642,917 Other liabilities 124,140 93,873 147,500 150,872 155,080 Equity 1,061,654 846,982 765,892 760,253 743,997 Total liabilities and shareholders' equity $10,724,966 $10,060,206 $9,881,554 $9,682,454 $9,373,539 WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Net Interest Margin - 5 Quarter Trends Three Months Ended March 31, December 31, September 30, June 30, March 31, Yield earned on: 2009 2008 2008 2008 2008 Liquidity management assets 3.42% 4.57% 4.70% 4.56% 5.01% Other earning assets 2.85 3.94 4.81 4.83 6.10 Loans, net of unearned income 5.48 5.75 5.89 6.12 6.83 Total earning assets 5.08% 5.54% 5.68% 5.84% 6.53% Rate paid on: Interest-bearing deposits 2.41% 2.78% 2.98% 3.14% 3.66% Federal Home Loan Bank advances 4.14 4.14 4.15 4.19 4.29 Notes payable and other borrowings 2.51 2.50 2.65 2.66 3.36 Subordinated notes 3.31 4.11 4.10 4.45 5.73 Junior subordinated debentures 7.12 7.22 6.98 7.29 7.28 Total interest- bearing liabilities 2.64% 2.98% 3.16% 3.31% 3.82% Rate Spread 2.44% 2.56% 2.52% 2.53% 2.71% Net Free Funds Contribution 0.27 0.22 0.22 0.24 0.27 Net Interest Margin 2.71% 2.78% 2.74% 2.77% 2.98% WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Net Interest Margin (Including Call Option Income) - 5 Quarter Trends Three Months Ended March 31, December 31, September 30, June 30, March 31, 2009 2008 2008 2008 2008 Net Interest Income $65,402 $63,340 $61,257 $59,992 $62,466 Call Option Income 1,998 7,438 2,723 12,083 6,780 Net Interest Income Including Call Option Income $67,400 $70,778 $63,980 $72,075 $69,246 Yield on Earning Assets 5.08% 5.54% 5.68% 5.84% 6.53% Rate on Interest- bearing Liabilities 2.64 2.98 3.16 3.31 3.82 Rate Spread 2.44% 2.56% 2.52% 2.53% 2.71% Net Free Funds Contribution 0.27 0.22 0.22 0.24 0.27 Net Interest Margin 2.71% 2.78% 2.74% 2.77% 2.98% Call Option Income 0.08 0.33 0.12 0.56 0.31 Net Interest Margin including Call Option Income 2.79% 3.11% 2.86% 3.33% 3.29% WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Net Interest Margin (Including Call Option Income) - YTD Trends Years Ended December 31, 2008 2007 2006 2005 2004 Net Interest Income $247,054 $264,777 $250,507 $218,086 $158,609 Call Option Income 29,024 2,628 3,157 11,434 11,121 Net Interest Income Including Call Option Income $276,078 $267,405 $253,664 $229,520 $169,730 Yield on Earning Assets 5.88% 7.21% 6.91% 5.92% 5.24% Rate on Interest- bearing Liabilities 3.31 4.39 4.11 3.00 2.28 Rate Spread 2.57% 2.82% 2.80% 2.92% 2.96% Net Free Funds Contribution 0.24 0.29 0.30 0.24 0.21 Net Interest Margin 2.81% 3.11% 3.10% 3.16% 3.17% Call Option Income 0.33 0.03 0.04 0.17 0.16 Net Interest Margin including Call Option Income 3.14% 3.14% 3.14% 3.33% 3.33% WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Non-Interest Income - 5 Quarter Trends Three Months Ended March 31, December 31, September 30, June 30, March 31, 2009 2008 2008 2008 2008 (Dollars in thousands) Brokerage $3,819 $4,310 $4,354 $4,948 $5,038 Trust and asset management 2,107 2,395 2,690 2,823 2,827 Total wealth management 5,926 6,705 7,044 7,771 7,865 Mortgage banking 16,232 3,138 4,488 7,536 6,096 Service charges on deposit accounts 2,970 2,684 2,674 2,565 2,373 Gain on sale of Premium Finance receivables 322 361 456 566 1,141 (Losses) gains on available-for-sale securities, net (2,038) (3,618) 920 (140) (1,333) Other: Fees from covered call options 1,998 7,438 2,723 12,083 6,780 Bank Owned Life Insurance 286 (319) 478 851 613 Trading income 8,744 (105) 286 77 33 Administrative services 482 670 803 755 713 Miscellaneous 1,505 2,418 2,258 1,540 291 Total other income 13,015 10,102 6,548 15,306 8,430 Total non- interest income $36,427 19,372 22,130 33,604 24,572 WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Non-Interest Expense - 5 Quarter Trends Three Months Ended March 31, December 31, September 30, June 30, March 31, (Dollars in 2009 2008 2008 2008 2008 thousands) Salaries and employee benefits $44,820 $35,616 $35,823 $36,976 $36,672 Equipment 3,938 4,190 4,050 4,048 3,926 Occupancy, net 6,190 5,947 5,666 5,438 5,867 Data processing 3,136 3,007 2,850 2,918 2,798 Advertising and marketing 1,095 1,642 1,343 1,368 999 Professional fees 2,883 2,334 2,195 2,227 2,068 Amortization of other intangibles 687 781 781 779 788 Other: Commissions - 3rd party brokers 704 802 985 997 985 Postage 1,180 1,012 1,067 1,055 986 Stationery and supplies 768 757 750 756 742 FDIC Insurance 3,013 1,681 1,344 1,289 1,286 OREO expenses, net 2,356 641 487 837 58 Miscellaneous 6,192 6,524 5,858 6,493 5,674 Total other expense 14,213 11,417 10,491 11,427 9,731 Total non- interest expense $76,962 64,934 63,199 65,181 62,849 WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Allowance for Credit Losses - 5 Quarter Trends Three Months Ended March 31, December 31, September 30, June 30, March 31, (Dollars in 2009 2008 2008 2008 2008 thousands) Balance at beginning of period $69,767 $66,327 $57,633 $53,758 $50,389 Provision for credit losses 14,473 14,456 24,129 10,301 8,555 Reclassification to allowance for lending-related commitments - (1,093) - - - Charge-offs: Commercial and commercial real estate loans 7,890 7,539 13,543 5,430 3,957 Home equity loans 511 231 28 25 - Residential real estate loans 152 627 786 - 219 Premium finance receivables 1,351 1,275 1,002 913 883 Indirect consumer loans 361 501 292 271 258 Consumer and other loans 121 157 165 202 94 Total charge- offs 10,386 10,330 15,816 6,841 5,411 Recoveries: Commercial and commercial real estate loans 208 211 216 29 40 Home equity loans 1 1 - - - Residential real estate loans - - - - - Premium finance receivables 141 144 118 273 128 Indirect consumer loans 29 38 29 61 45 Consumer and other loans 15 13 18 52 12 Total recoveries 394 407 381 415 225 Net charge-offs (9,992) (9,923) (15,435) (6,426) (5,186) Allowance for loan losses at end of period $74,248 $69,767 $66,327 $57,633 $53,758 Allowance for lending-related commitments at end of period $1,586 $1,586 $493 $493 $493 Allowance for credit losses at end of period $75,834 $71,353 $66,820 $58,126 $54,251 Annualized net charge-offs (recoveries) by category as a percentage of its own respective category's average: Commercial and commercial real estate loans 0.65% 0.62% 1.15% 0.48% 0.35% Home equity loans 0.23 0.11 0.01 0.01 - Residential real estate loans 0.14 0.79 0.92 - 0.27 Premium finance receivables 0.35 0.37 0.29 0.23 0.27 Indirect consumer loans 0.81 0.98 0.49 0.38 0.36 Consumer and other loans 0.27 0.35 0.36 0.37 0.20 Total loans, net of unearned income 0.51% 0.53% 0.84% 0.36% 0.30% Net charge-offs as a percentage of the provision for loan losses 69.04% 68.64% 63.97% 62.38% 60.62% Loans at period-end $7,841,447 $7,621,068 $7,322,545 $7,153,603 $6,874,916 Allowance for loan losses as a percentage of loans at period-end 0.95% 0.92% 0.91% 0.81% 0.78% Allowance for credit losses as a percentage of loans at period-end 0.97% 0.94% 0.91% 0.81% 0.79% WINTRUST FINANCIAL CORPORATION - SUPPLEMENTAL FINANCIAL INFORMATION Non-Performing Loans - 5 Quarter Trends March 31, December 31, September 30, June 30, March 31, (Dollars in 2009 2008 2008 2008 2008 thousands) Loans past due greater than 90 days and still accruing: Residential real estate and home equity (1) $726 $617 $1,084 $200 $387 Commercial, consumer and other 4,958 14,750 6,100 2,259 8,557 Premium finance receivables 9,722 9,339 5,903 5,180 8,133 Indirect consumer loans 1,076 679 877 471 635 Total past due greater than 90 days and still accruing 16,482 25,385 13,964 8,110 17,712 Non-accrual loans: Residential real estate and home equity (1) 9,209 6,528 6,214 3,384 3,655 Commercial, consumer and other 136,397 91,814 81,997 61,918 51,233 Premium finance receivables 12,694 11,454 10,239 13,005 13,542 Indirect consumer loans 1,084 913 627 389 399 Total non- accrual 159,384 110,709 99,077 78,696 68,829 Total non- performing loans: Residential real estate and home equity (1) 9,935 7,145 7,298 3,584 4,042 Commercial, consumer and other 141,355 106,564 88,097 64,177 59,790 Premium finance receivables 22,416 20,793 16,142 18,185 21,675 Indirect consumer loans 2,160 1,592 1,504 860 1,034 Total non- performing loans $175,866 $136,094 $113,041 $86,806 $86,541 Total non- performing loans by category as a percent of its own respective category's period- end balance: Residential real estate and home equity (1) 0.83% 0.62% 0.67% 0.35% 0.44% Commercial, consumer and other 2.79 2.16 1.82 1.34 1.27 Premium finance receivables 1.58 1.54 1.34 1.59 2.13 Indirect consumer loans 1.40 0.90 0.75 0.39 0.45 Total non- performing loans 2.24% 1.79% 1.54% 1.21% 1.26% Allowance for loan losses as a percentage of non- performing loans 42.22% 51.26% 58.67% 66.39% 62.12% (1) Residential real estate and home equity loans that are non-accrual and past due greater than 90 days and still accruing do not include non- performing mortgage loans held-for-sale. These balances totaled $0 as of March 31, 2009, December 31, 2008 and September 30, 2008, respectively, $0.2 million as of June 30, 2008, and $2.1 million as of March 31, 2008. Mortgage loans held-for sale are carried at either fair value or at the lower of cost or market applied on an aggregate basis by loan type. Charges related to adjustments to record the loans at fair value are recognized in mortgage banking revenue. DATASOURCE: Wintrust Financial Corporation CONTACT: Edward J. Wehmer, President & Chief Executive Officer, or David A. Dykstra, Senior Executive Vice President & Chief Operating Officer, both of Wintrust Financial Corporation, +1-847-615-4096 Web Site: http://www.wintrust.com/

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