Wintrust Financial Corporation Reports Fourth Quarter 2020 Net Income of $101.2 million and Full-Year 2020 Net Income of $293.0 million

Wintrust Financial Corporation

20 January 2021 at 4:42 pm·38-min read

ROSEMONT, Ill., Jan. 20, 2021 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, "we" or "our") (Nasdaq: WTFC) announced net income of $101.2 million or $1.63 per diluted common share for the fourth quarter of 2020, a decrease in diluted earnings per common share of 2% compared to the third quarter of 2020 and an increase of 13% compared to the fourth quarter of 2019. The Company recorded net income of $293.0 million or $4.68 per diluted common share for the year ended December 31, 2020 compared to net income of $355.7 million or $6.03 per diluted common share for the same period of 2019.

Highlights of the Fourth Quarter of 2020:
Comparative information to the third quarter of 2020

Total assets increased by $1.3 billion.
Total loans, excluding Paycheck Protection Program ("PPP") loans, increased by $607 million primarily due to growth in commercial loans and life insurance premium finance receivables. This growth also included a $71 million net increase in residential real estate loans for investment as the Company decided to allocate a portion of its current and future mortgage production for investment.
• In addition, during the fourth quarter of 2020, the Company exercised its early buy-out option on $248 million of eligible loans previously sold to the Government National Mortgage Association ("GNMA") recorded in mortgage loans held-for-sale. See Table 1 for more information.
• PPP loans originated in 2020 declined by $663 million in the fourth quarter of 2020 primarily as a result of processing forgiveness payments. As of January 15, 2021, approximately 23% of PPP loan balances originated in 2020 have been forgiven, approximately 45% of balances are in the forgiveness review or submission process, and approximately 32% of balances have yet to apply.
Total deposits increased by $1.2 billion, notwithstanding the return of approximately $666 million in wholesale deposits during the fourth quarter of 2020.
Net interest income increased by $3.5 million primarily due to a reduction in the rate on interest-bearing deposits and loan growth.
• The rate on interest-bearing deposits declined by 10 basis points in the fourth quarter of 2020 as compared to the third quarter of 2020. This improvement more than offset a two basis point decline in the yield on total loans in the fourth quarter of 2020 as compared to the third quarter of 2020.
• The Company recognized $16.8 million of PPP loan fee accretion in the fourth quarter of 2020 as compared to $17.4 million in the third quarter of 2020 on PPP loans originated in 2020. As of December 31, 2020, the Company had approximately $32.5 million of PPP loan fees that have yet to be recognized in income.
The loans to deposits ratio ended the fourth quarter of 2020 at 86.5% as compared to 89.7% as of September 30, 2020. Excluding PPP loans, the loans to deposits ratio ended the fourth quarter of 2020 at 79.2%.
Mortgage banking revenue decreased by $21.7 million to $86.8 million for the fourth quarter of 2020 as compared to $108.5 million in the prior quarter.
Outstanding COVID-19 related loan modifications for customers totaled approximately $345 million or 1.2% of total loans, excluding PPP loans, as of December 31, 2020 as compared to $413 million or 1.4% as of September 30, 2020.
Provision for credit losses totaled $1.2 million in the fourth quarter of 2020 as compared to $25.0 million in the third quarter of 2020.
Recorded net charge-offs of $10.3 million in the fourth quarter of 2020, of which $5.9 million were reserves on individually assessed loans as of the prior quarter end, as compared to net charge-offs of $9.3 million in the third quarter of 2020. Net charge-offs as a percentage of average total loans, totaled 13 basis points in the fourth quarter of 2020 on an annualized basis compared to 12 basis points on an annualized basis in the third quarter of 2020.
The allowance for credit losses on our core loan portfolio is approximately 1.82% of the outstanding balance as of December 31, 2020, down from 1.88% as of September 30, 2020. See Table 12 for more information.
Non-performing loans declined by $45.6 million, or 26%, and totaled $127.5 million, or 0.40% of total loans, as of December 31, 2020 as compared to $173.1 million, or 0.54% of total loans, as of September 30, 2020.

Other items of note from the fourth quarter of 2020

The following items had a $13.2 million unfavorable pre-tax income impact on the fourth quarter of 2020:
• Recorded a decrease in the value of mortgage servicing rights related to changes in fair value model assumptions of $5.2 million in the fourth quarter of 2020 as compared to a decrease of $3.0 million in the third quarter of 2020.
• Accrued $6.6 million of contingent consideration expense in the fourth quarter of 2020 related to the previous acquisition of mortgage operations as compared to $6.3 million in the third quarter of 2020, which was recorded in other non-interest expense.
• Recorded an impairment charge of $1.4 million in occupancy expense related to the planned closure of 10 bank branches.
Repurchased 974,150 shares of our common stock at a cost of $54.9 million, or an average price of $56.40 per share.

Edward J. Wehmer, Founder and Chief Executive Officer, commented, "Wintrust reported net income of $101.2 million for the fourth quarter of 2020, down from $107.3 million in the third quarter of 2020. The fourth quarter of 2020 was characterized by significant loan growth, increased net interest income, strong mortgage banking revenue, a significant reduction in non-performing loans and a continued focus to increase franchise value in our market area."

Reflecting on the year, Mr. Wehmer stated, "I am very appreciative of our staff's tireless efforts to make the best of a difficult year. The year offered many challenges and I could not be more proud of our results. Pre-tax income, excluding provision for credit losses (non-GAAP), increased by 13% to $604 million in 2020 as compared to $534 million in 2019. We finished 2020 with a lot of momentum and look forward to serving our communities and being responsive to our customers in the new year."

Mr. Wehmer continued, "The Company experienced significant loan growth, excluding PPP loans, in the fourth quarter of 2020, including growth in its commercial, commercial real estate, residential real estate loans for investment and life insurance premium finance receivable portfolios. In addition, the Company supplemented loan growth by exercising its early buy-out option on eligible GNMA loans. The majority of the loan growth was in the latter part of the quarter as total period end loans, excluding PPP loans, were $678 million higher than average total loans, excluding PPP loans, in the fourth quarter of 2020. Our loan pipelines remain strong and we expect to continue to grow loans in 2021 without compromising our credit standards. Total deposits increased by $1.2 billion as compared to the third quarter of 2020 even with the return of approximately $666 million in wholesale deposits. Additionally, the mix of deposit growth during the quarter was favorable evidenced by $1.3 billion of growth in non-interest bearing deposits. We continue to emphasize growing our franchise, including gathering low cost deposits, which we believe will drive value in the long term. Our loans to deposits ratio ended the quarter at 86.5% and we believe that we have sufficient liquidity to meet customer loan demand."

Mr. Wehmer commented, "Net interest income increased in the fourth quarter of 2020 primarily due to lower interest expense on interest-bearing deposits and loan growth. The rate on interest-bearing deposits declined 10 basis points in the fourth quarter of 2020 as compared to the third quarter of 2020. This improvement more than offset a two basis point decline in the yield on total loans in the fourth quarter of 2020 as compared to the third quarter of 2020. PPP loan fee accretion was relatively flat as the Company recognized $16.8 million of PPP loan fee accretion in the fourth quarter of 2020 as compared to $17.4 million in the third quarter of 2020. The three basis point decline in the net interest margin in the fourth quarter of 2020 as compared to the third quarter of 2020 was primarily due to increased levels of liquidity as average interest-bearing cash increased by $1.0 billion. We have accumulated excess liquidity in recent quarters and believe that, if conditions allow for suitable deployment of such excess liquidity, we could potentially increase our net interest margin by 15 to 30 basis points, depending on the mix of earning assets of such reinvestment."

Mr. Wehmer noted, “Our mortgage banking business delivered another strong quarter of mortgage banking revenue in light of the demand associated with historically low long-term interest rates. Loan volumes originated for sale in the fourth quarter of 2020 were $2.4 billion, up from $2.2 billion in the third quarter of 2020. Production revenue decreased during the quarter as the origination pipeline declined as compared to the end of the third quarter of 2020. This decline was partially due to the Company increasing its allocation of pipeline to originations for investment in order to increase earning assets on the balance sheet. Additionally, the Company recorded a $5.2 million decline in the value of mortgage servicing rights related to changes in fair value model assumptions. We are leveraging efficiencies in our delivery channels and staffing strategies to keep pace with unprecedented demand. The strong quarter of mortgage performance contributed to reporting a 1.12% net overhead ratio for the fourth quarter of 2020. We believe the first quarter of 2021 will provide another strong quarter for mortgage banking production."

Commenting on credit quality, Mr. Wehmer stated, "The Company recorded provision for credit losses of $1.2 million reflecting improvement in credit quality in the fourth quarter of 2020. We expended significant effort in the quarter diligently reviewing and addressing our credit portfolio. The Company's population of loans with a rating below "pass" as of December 31, 2020 declined by $273 million, or 14%, as compared to the prior quarter end primarily due to a note sale, pay-offs and risk rating upgrades. The level of non-performing loans decreased by $45.6 million primarily due to non-performing loan pay-offs. Additionally, net charge-offs remained relatively low totaling $10.3 million in the fourth quarter of 2020 as compared to $9.3 million in the third quarter of 2020. The allowance for credit losses on our core loan portfolio as of December 31, 2020 is approximately 1.82% of the outstanding balance. We believe that the Company’s reserves remain appropriate and we remain diligent in our review of credit."

Mr. Wehmer added, "In addition to the previously announced sale of three branches in southwestern Wisconsin, we continue to review our branch footprint and have initiated plans to close an additional 10 branches. These are predominantly smaller locations in close proximity to other Wintrust locations. As such, we do not expect any material attrition or customer disruption. We expect the noted branches to close prior to the end of the second quarter and the branch sale in Wisconsin to close in the second quarter. In the fourth quarter of 2020, we recorded an impairment charge of $1.4 million associated with the closing of the 10 locations. Collectively, the reduction of 13 locations represents approximately 7% of the Wintrust retail banking locations and will result in a reduction in expenses of approximately $5 million annually on an ongoing basis. It is important to note that while we see increased use of electronic services and are investing heavily in digital capabilities to allow clients to choose how they want to be served, Wintrust will continue to selectively open branches in areas where we are not represented."

Mr. Wehmer concluded, "We remain committed to supporting our community, including the well-being and safety of our customers and employees. We are participating in the latest round of PPP having opened our application portal on January 11, 2021. As of January 19, 2021, we have received approximately 5,400 applications aggregating in excess of $1.1 billion of loans with associated fees of approximately $44 million. We are focused on taking advantage of market opportunities to prudently deploy excess liquidity into earning assets. In particular, we expect to grow PPP loans, organic loans, residential real estate loans for investment and investment securities while maintaining an interest rate sensitive asset portfolio. We continue to evaluate our operating expense base to enhance future profitability. We also continue to carefully monitor the COVID-19 pandemic and evaluate the impact that it could have on the economy, our customers and our business. We remain focused on navigating the current environment by actively monitoring and managing our credit portfolio."

Graphs available at the following link: http://ml.globenewswire.com/Resource/Download/0bdf7499-4e66-4b90-bd05-707da79ea7cd

SUMMARY OF RESULTS:

BALANCE SHEET

Total asset growth of $1.3 billion in the fourth quarter of 2020 was primarily comprised of a $977 million increase in interest-bearing deposits with banks, a $312 million increase in mortgage loans held-for-sale, and a $128 million increase in investment securities, partially offset by a $56 million decrease in loans. The Company believes that the $4.8 billion of interest-bearing deposits with banks held as of December 31, 2020 provides more than sufficient liquidity to operate its business plan.

The $56 million decrease in loans was primarily a result of processing forgiveness payments, as PPP loans declined by $663 million in the fourth quarter of 2020. Total loans, excluding PPP loans, increased by $607 million primarily due to growth in commercial loans and life insurance premium finance receivables. This growth also included a $71 million net increase in residential real estate loans for investment as the Company decided to allocate a portion of its current and future mortgage production for investment.

Total liabilities increased $1.3 billion in the fourth quarter of 2020 resulting primarily from a $1.2 billion increase in total deposits, which included the return of approximately $666 million in wholesale deposits. The increase in deposits was primarily due to a $1.3 billion increase in non-interest-bearing deposits. Our loans to deposits ratio ended the quarter at 86.5%. Management believes in substantially funding the Company's balance sheet with core deposits and utilizes brokered or wholesale funding sources as appropriate to manage its liquidity position as well as for interest rate risk management purposes.

For more information regarding changes in the Company’s balance sheet, see Consolidated Statements of Condition and Tables 1 through 3 in this report.

NET INTEREST INCOME

For the fourth quarter of 2020, net interest income totaled $259.4 million, an increase of $3.5 million as compared to the third quarter of 2020 and a decrease of $2.5 million as compared to the fourth quarter of 2019. The $3.5 million increase in net interest income in the fourth quarter of 2020 compared to the third quarter of 2020 was primarily due to a 10 basis point decline in the rate on interest-bearing deposits in the fourth quarter of 2020 and loan growth.

Net interest margin was 2.53% (2.54% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2020 compared to 2.56% (2.57% on a fully taxable-equivalent basis, non-GAAP) during the third quarter of 2020 and 3.17% (3.19% on a fully taxable-equivalent basis, non-GAAP) during the fourth quarter of 2019. The three basis point decrease in net interest margin in the fourth quarter of 2020 as compared to the third quarter of 2020 was attributable to a 10 basis point decline in the yield on earning assets and a two basis point decrease in the net free funds contribution partially offset by a nine basis point decrease in the rate paid on interest-bearing liabilities. The 10 basis point decline in the yield on earning assets in the fourth quarter of 2020 as compared to the third quarter of 2020 was primarily due to a $1.0 billion increase in average interest-bearing deposits with banks and cash equivalents. The decrease in the rate paid on interest-bearing liabilities in the fourth quarter of 2020 as compared to the prior quarter is primarily due to a 10 basis point decrease in the rate paid on interest-bearing deposits as management initiated various deposit rate reductions given the low interest rate environment.

For more information regarding net interest income, see Tables 4 through 8 in this report.

ASSET QUALITY

The allowance for credit losses totaled $380.0 million as of December 31, 2020, a decrease of $9.0 million as compared to $389.0 million as of September 30, 2020. The allowance for credit losses decreased primarily due to portfolio changes and was partially offset by changes in the macroeconomic forecasted conditions. The Commercial, Industrial and Other portfolio realized a decrease in the allowance for credit losses as compared to the prior quarter-end, which was primarily driven by improving portfolio credit characteristics. There was an increase in the allowance for credit losses in the Commercial Real Estate portfolios driven by deterioration in the Commercial Real Estate Price Index forecast, partially offset by improvement in Baa Corporate Credit Spreads. Other key drivers of allowance for credit losses changes in these portfolios include, but are not limited to, decreases in COVID-19 related loan modifications and loan risk rating migration.

The provision for credit losses totaled $1.2 million for the fourth quarter of 2020 compared to $25.0 million for the third quarter of 2020 and $7.8 million for the fourth quarter of 2019. For more information regarding the provision for credit losses, see Table 11 in this report.

Management believes the allowance for credit losses is appropriate to account for expected credit losses. The Current Expected Credit Losses ("CECL") standard requires the Company to estimate expected credit losses over the life of the Company’s financial assets at a certain point in time. There can be no assurances, however, that future losses will not significantly exceed the amounts provided for, thereby affecting future results of operations. A summary of the allowance for credit losses calculated for the loan components in the core loan portfolio, the niche and consumer loan portfolio and the purchased loan portfolio as of December 31, 2020 and September 30, 2020 is shown on Table 12 of this report.

Net charge-offs totaled $10.3 million in the fourth quarter of 2020, a $1.0 million increase from $9.3 million in the third quarter of 2020 and a $2.4 million decrease from $12.7 million in the fourth quarter of 2019. Net charge-offs as a percentage of average total loans, totaled 13 basis points in the fourth quarter of 2020 on an annualized basis compared to 12 basis points on an annualized basis in the third quarter of 2020 and 19 basis points on an annualized basis in the fourth quarter of 2019. For more information regarding net charge-offs, see Table 10 in this report.

As of December 31, 2020, $41.6 million of all loans, or 0.1%, were 60 to 89 days past due and $139.1 million, or 0.4%, were 30 to 59 days (or one payment) past due. As of September 30, 2020, $49.9 million of all loans, or 0.2%, were 60 to 89 days past due and $186.5 million, or 0.6%, were 30 to 59 days (or one payment) past due. Many 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 real estate loan portfolios continue to exhibit low delinquency rates as of December 31, 2020. Home equity loans at December 31, 2020 that are current with regard to the contractual terms of the loan agreement represent 98.3% of the total home equity portfolio. Residential real estate loans at December 31, 2020 that are current with regards to the contractual terms of the loan agreements comprised 96.8% of total residential real estate loans outstanding. For more information regarding past due loans, see Table 13 in this report.

Outstanding COVID-19 related loan modifications for customers totaled approximately $345 million or 1.2% of total loans, excluding PPP loans as of December 31, 2020 as compared to $413 million or 1.4% as of September 30, 2020 and $1.7 billion or 6.2% as of June 30, 2020. The outstanding modifications primarily changed terms to interest-only payments.

The ratio of non-performing assets to total assets was 0.32% as of December 31, 2020, compared to 0.42% at September 30, 2020, and 0.36% at December 31, 2019. Non-performing assets totaled $144.1 million at December 31, 2020, compared to $182.3 million at September 30, 2020 and $132.8 million at December 31, 2019. Non-performing loans totaled $127.5 million, or 0.40% of total loans, at December 31, 2020 compared to $173.1 million, or 0.54% of total loans, at September 30, 2020 and $117.6 million, or 0.44% of total loans, at December 31, 2019. The decrease in non-performing loans as of December 31, 2020 as compared to September 30, 2020 is primarily due to $30.1 million in payments received throughout the quarter. The payment activity was primarily driven by sales of underlying real property collateral, sales of operating businesses, and refinance activity. Other real estate owned ("OREO") of $16.6 million at December 31, 2020 increased by $7.4 million compared to $9.2 million at September 30, 2020 and increased $1.4 million compared to $15.2 million at December 31, 2019. Management is pursuing the resolution of all non-performing assets. At this time, management believes OREO is appropriately valued at the lower of carrying value or fair value less estimated costs to sell. For more information regarding non-performing assets, see Table 14 in this report.

NON-INTEREST INCOME

Wealth management revenue increased by $1.8 million during the fourth quarter of 2020 as compared to the third quarter of 2020 primarily due to increased trust and asset management fees and brokerage commissions. Wealth management revenue is comprised of the trust and asset management revenue of The Chicago Trust Company and Great Lakes Advisors, the brokerage commissions, managed money fees and insurance product commissions at Wintrust Investments and fees from tax-deferred like-kind exchange services provided by the Chicago Deferred Exchange Company.

Mortgage banking revenue decreased by $21.7 million in the fourth quarter of 2020 as compared to the third quarter of 2020, primarily due to a $23.3 million decrease in production revenue. Production revenue decreased as origination pipelines designated for sale declined as compared to the prior quarter, due in part to the Company's intention to retain more loans for investment. Loans originated for sale were $2.4 billion in the fourth quarter of 2020, an increase of $124.7 million as compared to the third quarter of 2020. The percentage of origination volume from refinancing activities was 65% in the fourth quarter of 2020 as compared to 59% in the third quarter of 2020. Mortgage banking revenue includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market.

During the fourth quarter of 2020, the fair value of the mortgage servicing rights portfolio increased primarily due to the capitalization of $20.3 million of servicing rights during the fourth quarter of 2020. This increase was partially offset by a negative fair value adjustment of $5.2 million as well as a reduction in value of $9.0 million due to payoffs and paydowns of the existing portfolio. No economic hedges were outstanding relative to the mortgage servicing rights portfolio during the third or fourth quarter of 2020.

Other non-interest income increased by $6.4 million in the fourth quarter of 2020 as compared to the third quarter of 2020 primarily due to increased bank owned life insurance ("BOLI") revenue and income on partnership investments.

For more information regarding non-interest income, see Tables 15 and 16 in this report.

NON-INTEREST EXPENSE

Salaries and employee benefits expense increased by $7.1 million in the fourth quarter of 2020 as compared to the third quarter of 2020. The $7.1 million increase is comprised of an increase of $3.9 million in commissions and incentive compensation, an increase of $3.7 million in salaries expense, partially offset by a decrease of $520,000 in employee benefits expense.

The increase in commissions and incentive compensation is primarily due to increased commissions expense from higher levels of mortgage loan originations in the current quarter. The increase in salaries expense is primarily related to increased staffing costs to support mortgage origination and investment in technology related services to satisfy customer demands and create efficiencies in operations.

Occupancy expense totaled $19.7 million in the fourth quarter of 2020, an increase of $3.9 million as compared to the third quarter of 2020. This increase is primarily associated with an impairment charge of $1.4 million related to the planned closure of 10 bank branches, increased real estate tax assessment estimates and a higher level of utility charges.

Equipment expense totaled $20.6 million in the fourth quarter of 2020, an increase of $3.3 million as compared to the third quarter of 2020. This increase is primarily due to increased software licensing expenses.

Advertising and Marketing expense totaled $9.9 million in the fourth quarter of 2020, an increase of $2.0 million as compared to the third quarter of 2020. The increase in the fourth quarter relates primarily to increased digital advertising campaigns and corporate sponsorship costs. Marketing costs are incurred to promote the Company's brand, commercial banking capabilities and various products, to attract loans and deposits and to announce new branch openings as well as the expansion of the Company's non-bank businesses. The level of marketing expenditures depends on the timing of sponsorship programs utilized which are determined based on the market area, targeted audience, competition and various other factors.

Miscellaneous expense in the fourth quarter of 2020 increased by $302,000 as compared to the third quarter of 2020. The fourth quarter of 2020 included $6.6 million of contingent consideration expense related to the previous acquisition of mortgage operations as compared to $6.3 million in the prior quarter. The liability for contingent consideration expense related to the previous acquisition of mortgage operations is based upon forward looking mortgage origination volumes and the estimated profitability of that operation. Should those assumptions change going forward, the liability may need to be increased or decreased. The contractual period covering contingent consideration ends in January 2023 and the final two years of the contract contemplate a lower ratio of contingent consideration relative to financial performance. As a result, the Company does not expect to have material adjustments to the contingent consideration liability in future periods. Miscellaneous expense also 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.

For more information regarding non-interest expense, see Table 17 in this report.

INCOME TAXES

The Company recorded income tax expense of $33.5 million in the fourth quarter of 2020 compared to $30.0 million in the third quarter of 2020 and $30.7 million in the fourth quarter of 2019. The effective tax rates were 24.87% in the fourth quarter of 2020 compared to 21.83% in the third quarter of 2020 and 26.33% in the fourth quarter of 2019. The effective tax rate in the third quarter of 2020 reflects the impact of a $9.0 million state income tax benefit related to the settlement of an uncertain tax position.

BUSINESS UNIT SUMMARY

Community Banking

Through its community banking unit, the Company provides banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units and institutional clients residing primarily in the local areas the Company services. In the fourth quarter of 2020, this unit expanded its loan portfolio, excluding PPP loans, and its deposit portfolio. However, the banking segment also experienced net interest margin compression primarily due to increased levels of liquidity as average interest bearing cash increased by $1.0 billion in the fourth quarter of 2020 as compared to the third quarter of 2020.

Mortgage banking revenue was $86.8 million for the fourth quarter of 2020, a decrease of $21.7 million as compared to the third quarter of 2020 primarily due to a $23.3 million decrease in production revenue as origination pipelines declined as compared to the prior quarter. Service charges on deposit accounts totaled $11.8 million in the fourth quarter of 2020, an increase of $344,000 as compared to the third quarter of 2020 primarily due to higher account analysis and overdraft fees. The Company's gross commercial and commercial real estate loan pipelines remained strong as of December 31, 2020. Before the impact of scheduled payments and prepayments, gross commercial and commercial real estate loan pipelines were estimated to be approximately $1.1 billion to $1.3 billion at December 31, 2020. When adjusted for the probability of closing, the pipelines were estimated to be approximately $650 million to $750 million at December 31, 2020.

Specialty Finance

Through its specialty finance unit, the Company offers financing of insurance premiums for businesses and individuals, equipment financing through structured loans and lease products to customers in a variety of industries, accounts receivable financing and value-added, out-sourced administrative services and other services. Originations within the insurance premium financing receivables portfolio were $2.9 billion during the fourth quarter of 2020 and average balances increased by $49.9 million as compared to the third quarter of 2020. The increase in average balances was more than offset by margin compression in this portfolio resulting in a $3.6 million decrease in interest income attributed to the lower market rates of interest associated with the insurance premium finance receivables portfolio. The Company's leasing business grew during the fourth quarter of 2020, with its portfolio of assets, including capital leases, loans and equipment on operating leases, increasing by $95.2 million to $2.1 billion at the end of the fourth quarter of 2020. Revenues from the Company's out-sourced administrative services business were $1.3 million in the fourth quarter of 2020, an increase of $186,000 from the third quarter of 2020.

Wealth Management

Through four separate subsidiaries within its wealth management unit, the Company offers a full range of wealth management services, including trust and investment services, tax-deferred like-kind exchange services, asset management, securities brokerage services and 401(k) and retirement plan services. Wealth management revenue totaled $26.8 million in the fourth quarter of 2020, an increase of $1.8 million compared to the third quarter of 2020. Increases in asset management fees were primarily due to favorable equity market performance during the fourth quarter of 2020. At December 31, 2020, the Company’s wealth management subsidiaries had approximately $30.1 billion of assets under administration, which included $3.5 billion of assets owned by the Company and its subsidiary banks, representing a $1.9 billion increase from the $28.2 billion of assets under administration at September 30, 2020.

ITEMS IMPACTING COMPARATIVE FINANCIAL RESULTS

Paycheck Protection Program

On March 27, 2020, the President of the United States signed the CARES Act, which authorized the Small Business Administration ("SBA") to guarantee loans under the PPP for small businesses who met the necessary eligibility requirements in order to keep their workers on the payroll. The Company began accepting applications on April 3, 2020. From such date through the end of 2020, the Company secured authorization from the SBA for and funded over 12,000 PPP loans with a carrying balance of approximately $3.4 billion. As of December 31, 2020, the carrying balance of such loans was reduced to approximately $2.7 billion primarily resulting from forgiveness by the SBA.

Acquisitions

On November 1, 2019, the Company completed its acquisition of SBC, Incorporated (“SBC”). SBC was the parent company of Countryside Bank. Through this business combination, the Company acquired Countryside Bank's six banking offices located in Countryside, Burbank, Darien, Homer Glen, Oak Brook and Chicago, Illinois. As of the acquisition date, the Company acquired approximately $620 million in assets, including approximately $423 million in loans, and approximately $508 million in deposits. The Company recorded goodwill of approximately $40 million on the acquisition.

On October 7, 2019, the Company completed its acquisition of STC Bancshares Corp. (“STC”). STC was the parent company of STC Capital Bank. Through this business combination, the Company acquired STC Capital Bank's five banking offices located in the communities of St. Charles, Geneva and South Elgin, Illinois. As of the acquisition date, the Company acquired approximately $250 million in assets, including approximately $174 million in loans, and approximately $201 million in deposits. The Company recorded goodwill of approximately $19 million on the acquisition.

On May 24, 2019, the Company completed its acquisition of Rush-Oak Corporation ("ROC"). ROC was the parent company of Oak Bank. Through this business combination, the Company acquired Oak Bank's one banking location in Chicago, Illinois. As of the acquisition date, the Company acquired approximately $223 million in assets, including approximately $125 million in loans, and approximately $161 million in deposits. The Company recorded goodwill of approximately $12 million on the acquisition.

Adoption of New Credit Losses Accounting Standard

Beginning in 2020, the Company adopted the CECL standard, which impacted the measurement of the Company’s allowance for credit losses (including the allowance for unfunded lending-related commitments). CECL replaced the previous incurred loss methodology, which delayed recognition until such loss was probable, with a methodology that reflects an estimate of lifetime expected credit losses considering current economic condition and forecasts. Though other assets, including investment securities and other receivables, were considered in-scope of the standard and required a measurement of the allowance for credit loss, the most significant impact of CECL remains within the Company’s loan portfolios and related lending commitments. For more information regarding the adoption of CECL, see the "Asset Quality" section and the asset quality Tables 10-14 in this report.

WINTRUST FINANCIAL CORPORATION
Selected Financial Highlights

	Three Months Ended															Years Ended
(Dollars in thousands, except per share data)	Dec 31, 2020			Sep 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019			Dec 31, 2020			Dec 31, 2019
Selected Financial Condition Data (at end of period):
Total assets	$	45,080,768		$	43,731,718		$	43,540,017		$	38,799,847		$	36,620,583
Total loans ⁽¹⁾	32,079,073			32,135,555			31,402,903			27,807,321			26,800,290
Total deposits	37,092,651			35,844,422			35,651,874			31,461,660			30,107,138
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Total shareholders’ equity	4,115,995			4,074,089			3,990,218			3,700,393			3,691,250
Selected Statements of Income Data:
Net interest income	$	259,397		$	255,936		$	263,131		$	261,443		$	261,879		$	1,039,907		$	1,054,919
Net revenue ⁽²⁾	417,758			426,529			425,124			374,685			374,099			1,644,096			1,462,091
Net income	101,204			107,315			21,659			62,812			85,964			292,990			355,697
Pre-tax income, excluding provision for credit losses (non-GAAP) ⁽³⁾	135,891			162,310			165,756			140,044			124,508			604,001			533,965
Net income per common share – Basic	1.64			1.68			0.34			1.05			1.46			4.72			6.11
Net income per common share – Diluted	1.63			1.67			0.34			1.04			1.44			4.68			6.03
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin	2.53		%	2.56		%	2.73		%	3.12		%	3.17		%	2.72		%	3.45		%
Net interest margin - fully taxable equivalent (non-GAAP) ⁽³⁾	2.54			2.57			2.74			3.14			3.19			2.73			3.47
Non-interest income to average assets	1.44			1.58			1.55			1.24			1.25			1.46			1.23
Non-interest expense to average assets	2.56			2.45			2.48			2.58			2.78			2.51			2.79
Net overhead ratio ⁽⁴⁾	1.12			0.87			0.93			1.33			1.53			1.05			1.57
Return on average assets	0.92			0.99			0.21			0.69			0.96			0.71			1.07
Return on average common equity	10.30			10.66			2.17			6.82			9.52			7.50			10.41
Return on average tangible common equity (non-GAAP) ⁽³⁾	12.95			13.43			2.95			8.73			12.17			9.54			13.22
Average total assets	$	43,810,005		$	42,962,844		$	42,042,729		$	36,625,490		$	35,645,190		$	41,371,339		$	33,232,083
Average total shareholders’ equity	4,050,286			4,034,902			3,908,846			3,710,169			3,622,184			3,926,688			3,461,535
Average loans to average deposits ratio	87.8		%	89.6		%	87.8		%	90.1		%	88.8		%	88.8		%	91.4		%
Period-end loans to deposits ratio	86.5			89.7			88.1			88.4			89.0
Common Share Data at end of period:
Market price per common share	$	61.09		$	40.05		$	43.62		$	32.86		$	70.90
Book value per common share	65.24			63.57			62.14			62.13			61.68
Tangible book value per common share (non-GAAP) ⁽³⁾	53.23			51.70			50.23			50.18			49.70
Common shares outstanding	56,769,625			57,601,991			57,573,672			57,545,352			57,821,891
Other Data at end of period:
Tier 1 leverage ratio ⁽⁵⁾	8.1		%	8.2		%	8.1		%	8.5		%	8.7		%
Risk-based capital ratios:
Tier 1 capital ratio ⁽⁵⁾	10.0			10.2			10.1			9.3			9.6
Common equity tier 1 capital ratio⁽⁵⁾	8.8			9.0			8.8			8.9			9.2
Total capital ratio ⁽⁵⁾	12.6			12.9			12.8			11.9			12.2
Allowance for credit losses ⁽⁶⁾	$	379,969		$	388,971		$	373,174		$	253,482		$	158,461
Allowance for loan and unfunded lending-related commitment losses to total loans	1.18		%	1.21		%	1.19		%	0.91		%	0.59		%
Number of:
Bank subsidiaries	15			15			15			15			15
Banking offices	181			182			186			187			187

(1) Excludes mortgage loans held-for-sale.
(2) Net revenue includes net interest income and non-interest income.
(3) See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information on this performance measure/ratio.
(4) 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.
(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. Effective January 1, 2020, the allowance for credit losses also includes the allowance for investment securities as a result of the adoption of Accounting Standard Update ("ASU") 2016-13, Financial Instruments - Credit Losses.

WINTRUST FINANCIAL CORPORATION

Key Operating Measures

Wintrust’s key operating measures and growth rates for the fourth quarter of 2020, as compared to the third quarter of 2020 (sequential quarter) and fourth quarter of 2019 (linked quarter), are shown in the table below:

	Three Months Ended									% or⁽¹⁾basis point (bp) change from 3rd Quarter 2020			% or basis point (bp) change from 4th Quarter 2019
(Dollars in thousands, except per share data)	Dec 31, 2020			Sep 30, 2020			Dec 31, 2019
Net income	$	101,204		$	107,315		$	85,964		(6	)	%	18		%
Pre-tax income, excluding provision for credit losses (non-GAAP) ⁽²⁾	135,891			162,310			124,508			(16	)		9
Net income per common share – diluted	1.63			1.67			1.44			(2	)		13
Net revenue ⁽³⁾	417,758			426,529			374,099			(2	)		12
Net interest income	259,397			255,936			261,879			1			(1	)
Net interest margin	2.53		%	2.56		%	3.17		%	(3	)	bps	(64	)	bps
Net interest margin - fully taxable equivalent (non-GAAP) ⁽²⁾	2.54			2.57			3.19			(3	)		(65	)
Net overhead ratio ⁽⁴⁾	1.12			0.87			1.53			25			(41	)
Return on average assets	0.92			0.99			0.96			(7	)		(4	)
Return on average common equity	10.30			10.66			9.52			(36	)		78
Return on average tangible common equity (non-GAAP) ⁽²⁾	12.95			13.43			12.17			(48	)		78
At end of period
Total assets	$	45,080,768		$	43,731,718		$	36,620,583		12		%	23		%
Total loans ⁽⁵⁾	32,079,073			32,135,555			26,800,290			(1	)		20
Total deposits	37,092,651			35,844,422			30,107,138			16			23
Total shareholders’ equity	4,115,995			4,074,089			3,691,250			13			12

(1) Period-end balance sheet percentage changes are annualized.
(2) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 18 for additional information on this performance measure/ratio.
(3) Net revenue is net interest income plus non-interest income.
(4) 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.
(5) Excludes mortgage loans held-for-sale.

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

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	Dec 31,			Sep 30,			Jun 30,			Mar 31,				Dec 31,
(In thousands)	2020			2020			2020			2020				2019
Assets
Cash and due from banks	$	322,415		$	308,639		$	344,999		$	349,118			$	286,167
Federal funds sold and securities purchased under resale agreements	59			56			58			309				309
Interest-bearing deposits with banks	4,802,527			3,825,823			4,015,072			1,943,743				2,164,560
Available-for-sale securities, at fair value	3,055,839			2,946,459			3,194,961			3,570,959				3,106,214
Held-to-maturity securities, at amortized cost	579,138			560,267			728,465			865,376				1,134,400
Trading account securities	671			1,720			890			2,257				1,068
Equity securities with readily determinable fair value	90,862			54,398			52,460			47,310				50,840
Federal Home Loan Bank and Federal Reserve Bank stock	135,588			135,568			135,571			134,546				100,739
Brokerage customer receivables	17,436			16,818			14,623			16,293				16,573
Mortgage loans held-for-sale	1,272,090			959,671			833,163			656,934				377,313
Loans, net of unearned income	32,079,073			32,135,555			31,402,903			27,807,321				26,800,290
Allowance for loan losses	(319,374		)	(325,959		)	(313,510		)	(216,050		)		(156,828		)
Net loans	31,759,699			31,809,596			31,089,393			27,591,271				26,643,462
Premises and equipment, net	768,808			774,288			769,909			764,583				754,328
Lease investments, net	242,434			230,373			237,040			207,147				231,192
Accrued interest receivable and other assets	1,351,455			1,424,728			1,437,832			1,460,168				1,061,141
Trade date securities receivable	—			—			—			502,207				—
Goodwill	645,707			644,644			644,213			643,441				645,220
Other intangible assets	36,040			38,670			41,368			44,185				47,057
Total assets	$	45,080,768		$	43,731,718		$	43,540,017		$	38,799,847			$	36,620,583
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	11,748,455		$	10,409,747		$	10,204,791		$	7,556,755			$	7,216,758
Interest bearing	25,344,196			25,434,675			25,447,083			23,904,905				22,890,380
Total deposits	37,092,651			35,844,422			35,651,874			31,461,660				30,107,138
Federal Home Loan Bank advances	1,228,429			1,228,422			1,228,416			1,174,894				674,870
Other borrowings	518,928			507,395			508,535			487,503				418,174
Subordinated notes	436,506			436,385			436,298			436,179			436,095
Junior subordinated debentures	253,566			253,566			253,566			253,566				253,566
Trade date securities payable	200,907			—			—			—				—
Accrued interest payable and other liabilities	1,233,786			1,387,439			1,471,110			1,285,652				1,039,490
Total liabilities	40,964,773			39,657,629			39,549,799			35,099,454				32,929,333
Shareholders’ Equity:
Preferred stock	412,500			412,500			412,500			125,000				125,000
Common stock	58,473			58,323			58,294			58,266				57,951
Surplus	1,649,990			1,647,049			1,643,864			1,652,063				1,650,278
Treasury stock	(100,363		)	(44,891		)	(44,891		)	(44,891		)		(6,931		)
Retained earnings	2,080,013			2,001,949			1,921,048			1,917,558				1,899,630
Accumulated other comprehensive income (loss)	15,382			(841		)	(597		)	(7,603		)		(34,678		)
Total shareholders’ equity	4,115,995			4,074,089			3,990,218			3,700,393				3,691,250
Total liabilities and shareholders’ equity	$	45,080,768		$	43,731,718		$	43,540,017		$	38,799,847			$	36,620,583

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

	Three Months Ended														Years Ended
(In thousands, except per share data)	Dec 31, 2020			Sep 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019		Dec 31, 2020			Dec 31, 2019
Interest income
Interest and fees on loans	$	280,185		$	280,479		$	294,746		$	301,839		$	308,055	$	1,157,249		$	1,228,480
Mortgage loans held-for-sale	6,357			5,791			4,764			3,165			3,201		20,077			11,992
Interest-bearing deposits with banks	1,294			1,181			1,310			4,768			8,971		8,553			29,803
Federal funds sold and securities purchased under resale agreements	—			—			16			86			390		102			700
Investment securities	18,243			21,819			27,105			32,467			27,611		99,634			108,046
Trading account securities	11			6			13			7			6		37			39
Federal Home Loan Bank and Federal Reserve Bank stock	1,775			1,774			1,765			1,577			1,328		6,891			5,416
Brokerage customer receivables	116			106			97			158			169		477			666
Total interest income	307,981			311,156			329,816			344,067			349,731		1,293,020			1,385,142
Interest expense
Interest on deposits	32,602			39,084			50,057			67,435			74,724		189,178			278,892
Interest on Federal Home Loan Bank advances	4,952			4,947			4,934			3,360			1,461		18,193			9,878
Interest on other borrowings	2,779			3,012			3,436			3,546			3,273		12,773			13,897
Interest on subordinated notes	5,509			5,474			5,506			5,472			5,504		21,961			15,555
Interest on junior subordinated debentures	2,742			2,703			2,752			2,811			2,890		11,008			12,001
Total interest expense	48,584			55,220			66,685			82,624			87,852		253,113			330,223
Net interest income	259,397			255,936			263,131			261,443			261,879		1,039,907			1,054,919
Provision for credit losses	1,180			25,026			135,053			52,961			7,826		214,220			53,864
Net interest income after provision for credit losses	258,217			230,910			128,078			208,482			254,053		825,687			1,001,055
Non-interest income
Wealth management	26,802			24,957			22,636			25,941			24,999		100,336			97,114
Mortgage banking	86,819			108,544			102,324			48,326			47,860		346,013			154,293
Service charges on deposit accounts	11,841			11,497			10,420			11,265			10,973		45,023			39,070
Gains (losses) on investment securities, net	1,214			411			808			(4,359		)	587		(1,926		)	3,525
Fees from covered call options	—			—			—			2,292			1,243		2,292			3,670
Trading (losses) gains, net	(102		)	183			(634		)	(451		)	46		(1,004		)	(158		)
Operating lease income, net	12,118			11,717			11,785			11,984			12,487		47,604			47,041
Other	19,669			13,284			14,654			18,244			14,025		65,851			62,617
Total non-interest income	158,361			170,593			161,993			113,242			112,220		604,189			407,172
Non-interest expense
Salaries and employee benefits	171,116			164,042			154,156			136,762			145,941		626,076			546,420
Equipment	20,565			17,251			15,846			14,834			14,485		68,496			52,328
Operating lease equipment depreciation	9,938			9,425			9,292			9,260			9,766		37,915			35,760
Occupancy, net	19,687			15,830			16,893			17,547			17,132		69,957			64,289
Data processing	5,728			5,689			10,406			8,373			7,569		30,196			27,820
Advertising and marketing	9,850			7,880			7,704			10,862			12,517		36,296			48,595
Professional fees	6,530			6,488			7,687			6,721			7,650		27,426			27,471
Amortization of other intangible assets	2,634			2,701			2,820			2,863			3,017		11,018			11,844
FDIC insurance	7,016			6,772			7,081			4,135			1,348		25,004			9,199
OREO expense, net	(114		)	(168		)	237			(876		)	536		(921		)	3,628
Other	28,917			28,309			27,246			24,160			29,630		108,632			100,772
Total non-interest expense	281,867			264,219			259,368			234,641			249,591		1,040,095			928,126
Income before taxes	134,711			137,284			30,703			87,083			116,682		389,781			480,101
Income tax expense	33,507			29,969			9,044			24,271			30,718		96,791			124,404
Net income	$	101,204		$	107,315		$	21,659		$	62,812		$	85,964	$	292,990		$	355,697
Preferred stock dividends	6,991			10,286			2,050			2,050			2,050		21,377			8,200
Net income applicable to common shares	$	94,213		$	97,029		$	19,609		$	60,762		$	83,914	$	271,613		$	347,497
Net income per common share - Basic	$	1.64		$	1.68		$	0.34		$	1.05		$	1.46	$	4.72		$	6.11
Net income per common share - Diluted	$	1.63		$	1.67		$	0.34		$	1.04		$	1.44	$	4.68		$	6.03
Cash dividends declared per common share	$	0.28		$	0.28		$	0.28		$	0.28		$	0.25	$	1.12		$	1.00
Weighted average common shares outstanding		57,309			57,597			57,567			57,620			57,538		57,523			56,857
Dilutive potential common shares	588			449			414			575			874		496			762
Average common shares and dilutive common shares	57,897			58,046			57,981			58,195			58,412		58,019			57,619

TABLE 1: LOAN PORTFOLIO MIX AND GROWTH RATES AND COMMERCIAL REAL ESTATE BY STATE

																% Growth From
(Dollars in thousands)	Dec 31, 2020			Sep 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019			Sep 30, 2020 ⁽¹⁾		Dec 31, 2019
Balance:
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. Government Agencies	$	927,307		$	862,924		$	814,667		$	642,386		$	361,309		30	%	157	%
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. Government Agencies	344,783			96,747			18,496			14,548			16,004			1020		2054
Total mortgage loans held-for-sale	$	1,272,090		$	959,671		$	833,163		$	656,934		$	377,313		130	%	237	%

Commercial
Commercial, industrial, and other	$	9,240,046		$	8,897,986		$	8,523,864		$	9,025,886		$	8,285,920		15	%	12	%
Commercial PPP loans	2,715,921			3,379,013			3,335,368			—			—			(78	)	100
Commercial real estate
Construction and development	1,371,802			1,333,149			1,285,282			1,237,274			1,200,783			12		14
Non-construction	7,122,330			7,089,993			6,915,463			6,948,257			6,819,493			2		4
Home equity	425,263			446,274			466,596			494,655			513,066			(19	)	(17	)
Residential real estate
Residential real estate loans for investment	1,214,744			1,143,908			1,186,768			1,244,690			1,231,123			25		(1	)
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. Government Agencies	44,854			240,902			240,661			132,699			123,098			(324	)	(64	)
Premium Finance receivables
Commercial insurance	4,054,489			4,060,144			3,999,774			3,465,055			3,442,027			(1	)	18
Life insurance	5,857,436			5,488,832			5,400,802			5,221,639			5,074,602			27		15
Consumer and other	32,188			55,354			48,325			37,166			110,178			(166	)	(71	)
Total loans, net of unearned income	$	32,079,073		$	32,135,555		$	31,402,903		$	27,807,321		$	26,800,290		(1	)%	20	%
Mix:
Mortgage loans held-for-sale, excluding early buy-out exercised loans guaranteed by U.S. Government Agencies	73		%	90		%	98		%	98		%	96		%
Mortgage loans held-for-sale, early buy-out exercised loans guaranteed by U.S. Government Agencies	27			10			2			2			4
Total mortgage loans held-for-sale	100		%	100		%	100		%	100		%	100		%

Commercial
Commercial, industrial, and other	29		%	28		%	28		%	32		%	31		%
Commercial PPP loans	8			11			11			—			—
Commercial real estate
Construction and development	4			4			4			4			4
Non-construction	22			22			22			25			26
Home equity	1			1			1			2			2
Residential real estate
Residential real estate loans for investment	4			3			3			4			5
Residential mortgage loans, early buy-out eligible loans guaranteed by U.S. Government Agencies	1			1			1			1			0
Premium Finance receivables
Commercial insurance	13			13			13			13			13
Life insurance	18			17			17			19			19
Consumer and other	0			0			0			0			0
Total loans, net of unearned income	100		%	100		%	100		%	100		%	100		%

(1) Annualized.

	Dec 31, 2020					Sep 30, 2020				Jun 30, 2020			Mar 31, 2020				Dec 31, 2019
(Dollars in thousands)		Balance	% of Total Balance			Balance	% of Total Balance			Balance	% of Total Balance			Balance	% of Total Balance			Balance	% of Total Balance
Commercial real estate - collateral location by state:
Illinois	$	6,243,651	73.5	%	$	6,270,584	74.4	%	$	6,198,486	75.6	%	$	6,171,606	75.4	%	$	6,176,353	77.0	%
Wisconsin	779,390		9.2		783,241		9.3		760,839		9.3		793,145		9.7		744,975		9.3
Total primary markets	$	7,023,041	82.7	%	$	7,053,825	83.7	%	$	6,959,325	84.9	%	$	6,964,751	85.1	%	$	6,921,328	86.3	%
Indiana	301,177		3.5		265,905		3.2		249,423		3.0		249,680		3.1		218,963		2.7
Florida	131,259		1.5		133,602		1.6		133,810		1.6		126,786		1.5		114,629		1.4
Arizona	63,494		0.8		79,086		0.9		78,135		1.0		72,214		0.9		64,022		0.8
California	85,624		1.0		82,852		1.0		81,634		1.0		63,883		0.8		64,345		0.8
Texas	79,406		0.9		55,229		0.7		48,082		0.6		59,647		0.8		29,586		0.5
Other	810,131		9.6		752,643		8.9		650,336		7.9		648,570		7.8		607,403		7.5
Total commercial real estate	$	8,494,132	100	%	$	8,423,142	100	%	$	8,200,745	100	%	$	8,185,531	100	%	$	8,020,276	100	%

TABLE 2: DEPOSIT PORTFOLIO MIX AND GROWTH RATES

																% Growth From
(Dollars in thousands)	Dec 31, 2020			Sep 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019			Sep 30, 2020⁽¹⁾		Dec 31, 2019
Balance:
Non-interest bearing	$	11,748,455		$	10,409,747		$	10,204,791		$	7,556,755		$	7,216,758		51	%	63	%
NOW and interest-bearing demand deposits	3,349,021			3,294,071			3,440,348			3,181,159			3,093,159			7		8
Wealth management deposits ⁽²⁾	4,138,712			4,235,583			4,433,020			3,936,968			3,123,063			(9	)	33
Money market	9,348,806			9,423,653			9,288,976			8,114,659			7,854,189			(3	)	19
Savings	3,531,029			3,415,073			3,447,352			3,282,340			3,196,698			14		10
Time certificates of deposit	4,976,628			5,066,295			4,837,387			5,389,779			5,623,271			(7	)	(11	)
Total deposits	$	37,092,651		$	35,844,422		$	35,651,874		$	31,461,660		$	30,107,138		14	%	23	%
Mix:
Non-interest bearing	32		%	29		%	29		%	24		%	24		%
NOW and interest-bearing demand deposits	9			9			10			10			10
Wealth management deposits ⁽²⁾	11			12			12			13			10
Money market	25			26			25			26			26
Savings	10			10			10			10			11
Time certificates of deposit	13			14			14			17			19
Total deposits	100		%	100		%	100		%	100		%	100		%

(1) Annualized.
(2) Represents deposit balances of the Company’s subsidiary banks from brokerage customers of Wintrust Investments, Chicago Deferred Exchange Company, LLC ("CDEC"), trust and asset management customers of the Company and brokerage customers from unaffiliated companies which have been placed into deposit accounts.

TABLE 3: TIME CERTIFICATES OF DEPOSIT MATURITY/RE-PRICING ANALYSIS
As of December 31, 2020

(Dollars in thousands)	Total Time Certificates of Deposit		Weighted-Average Rate of Maturing Time Certificates of Deposit ⁽¹⁾
1-3 months	$	872,282	1.74	%
4-6 months	1,327,476		1.82
7-9 months	948,251		1.57
10-12 months	760,907		1.19
13-18 months	628,017		0.85
19-24 months	224,885		0.98
24+ months	214,810		1.02
Total	$	4,976,628	1.47	%

(1) Weighted-average rate excludes the impact of purchase accounting fair value adjustments.

TABLE 4: QUARTERLY AVERAGE BALANCES

	Average Balance for three months ended,
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(In thousands)	2020			2020			2020			2020			2019
Interest-bearing deposits with banks and cash equivalents ⁽¹⁾	$	4,381,040		$	3,411,164		$	3,240,167		$	1,418,809		$	2,206,251
Investment securities ⁽²⁾	3,534,594			3,789,422			4,309,471			4,780,709			3,909,699
FHLB and FRB stock	135,569			135,567			135,360			114,829			94,843
Liquidity management assets ⁽³⁾	8,051,203			7,336,153			7,684,998			6,314,347			6,210,793
Other earning assets ⁽³⁾⁽⁴⁾	18,716			16,656			16,917			19,166			18,353
Mortgage loans held-for-sale	893,395			822,908			705,702			403,262			381,878
Loans, net of unearned income ⁽³⁾⁽⁵⁾	31,783,279			31,634,608			30,336,626			26,936,728			26,137,722
Total earning assets ⁽³⁾	40,746,593			39,810,325			38,744,243			33,673,503			32,748,746
Allowance for loan and investment security losses ⁽⁶⁾	(336,139		)	(321,732		)	(222,485		)	(176,291		)	(167,759		)
Cash and due from banks	344,536			345,438			352,423			321,982			316,631
Other assets	3,055,015			3,128,813			3,168,548			2,806,296			2,747,572
Total assets	$	43,810,005		$	42,962,844		$	42,042,729		$	36,625,490		$	35,645,190

NOW and interest-bearing demand deposits	$	3,320,527		$	3,435,089		$	3,323,124		$	3,113,733		$	3,016,991
Wealth management deposits	4,066,948			4,239,300			4,380,996			2,838,719			2,934,292
Money market accounts	9,435,344			9,332,668			8,727,966			7,990,775			7,647,635
Savings accounts	3,413,388			3,419,586			3,394,480			3,189,835			3,028,763
Time deposits	5,043,558			4,900,839			5,104,701			5,526,407			5,682,449
Interest-bearing deposits	25,279,765			25,327,482			24,931,267			22,659,469			22,310,130
Federal Home Loan Bank advances	1,228,425			1,228,421			1,214,375			951,613			596,594
Other borrowings	510,725			512,787			493,350			469,577			415,092
Subordinated notes	436,433			436,323			436,226			436,119			436,025
Junior subordinated debentures	253,566			253,566			253,566			253,566			253,566
Total interest-bearing liabilities	27,708,914			27,758,579			27,328,784			24,770,344			24,011,407
Non-interest-bearing deposits	10,874,912			9,988,769			9,607,528			7,235,177			7,128,166
Other liabilities	1,175,893			1,180,594			1,197,571			909,800			883,433
Equity	4,050,286			4,034,902			3,908,846			3,710,169			3,622,184
Total liabilities and shareholders’ equity	$	43,810,005		$	42,962,844		$	42,042,729		$	36,625,490		$	35,645,190

Net free funds/contribution ⁽⁷⁾	$	13,037,679		$	12,051,746		$	11,415,459		$	8,903,159		$	8,737,339

(1) Includes interest-bearing deposits from banks, federal funds sold and securities purchased under resale agreements.
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 18 for additional information on this performance measure/ratio.
(4) Other earning assets include brokerage customer receivables and trading account securities.
(5) Loans, net of unearned income, include non-accrual loans.
(6) Effective January 1, 2020 this includes the allowance for investment security losses as a result of the adoption of ASU 2016-13, Financial Instruments - Credit Losses.
(7) Net free funds are the difference between total average earning assets and total average interest-bearing liabilities. The estimated contribution to net interest margin from net free funds is calculated using the rate paid for total interest-bearing liabilities.

TABLE 5: QUARTERLY NET INTEREST INCOME

	Net Interest Income for three months ended,
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(In thousands)	2020			2020			2020			2020			2019
Interest income:
Interest-bearing deposits with banks and cash equivalents	$	1,294		$	1,181		$	1,326		$	4,854		$	9,361
Investment securities	18,773			22,365			27,643			33,018			28,184
FHLB and FRB stock	1,775			1,774			1,765			1,577			1,328
Liquidity management assets ⁽¹⁾	21,842			25,320			30,734			39,449			38,873
Other earning assets ⁽¹⁾	130			113			113			167			176
Mortgage loans held-for-sale	6,357			5,791			4,764			3,165			3,201
Loans, net of unearned income ⁽¹⁾	280,509			280,960			295,322			302,699			308,947
Total interest income	$	308,838		$	312,184		$	330,933		$	345,480		$	351,197

Interest expense:
NOW and interest-bearing demand deposits	$	1,074		$	1,342		$	1,561		$	3,665		$	4,622
Wealth management deposits	7,436			7,662			7,244			6,935			7,867
Money market accounts	3,740			7,245			13,140			22,363			25,603
Savings accounts	773			2,104			3,840			5,790			6,145
Time deposits	19,579			20,731			24,272			28,682			30,487
Interest-bearing deposits	32,602			39,084			50,057			67,435			74,724
Federal Home Loan Bank advances	4,952			4,947			4,934			3,360			1,461
Other borrowings	2,779			3,012			3,436			3,546			3,273
Subordinated notes	5,509			5,474			5,506			5,472			5,504
Junior subordinated debentures	2,742			2,703			2,752			2,811			2,890
Total interest expense	$	48,584		$	55,220		$	66,685		$	82,624		$	87,852

Less: Fully taxable-equivalent adjustment	(857		)	(1,028		)	(1,117		)	(1,413		)	(1,466		)
Net interest income (GAAP) ⁽²⁾	259,397			255,936			263,131			261,443			261,879
Fully taxable-equivalent adjustment	857			1,028			1,117			1,413			1,466
Net interest income, fully taxable-equivalent (non-GAAP) ⁽²⁾	$	260,254		$	256,964		$	264,248		$	262,856		$	263,345

(1) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on the marginal federal corporate tax rate in effect as of the applicable period.
(2) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 18 for additional information on this performance measure/ratio.

TABLE 6: QUARTERLY NET INTEREST MARGIN

	Net Interest Margin for three months ended,
	Dec 31, 2020		Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019
Yield earned on:
Interest-bearing deposits with banks and cash equivalents	0.12	%	0.14	%	0.16	%	1.38	%	1.68	%
Investment securities	2.11		2.35		2.58		2.78		2.86
FHLB and FRB stock	5.21		5.21		5.24		5.52		5.55
Liquidity management assets	1.08		1.37		1.61		2.51		2.48
Other earning assets	2.79		2.71		2.71		3.50		3.83
Mortgage loans held-for-sale	2.83		2.80		2.72		3.16		3.33
Loans, net of unearned income	3.51		3.53		3.92		4.52		4.69
Total earning assets	3.02	%	3.12	%	3.44	%	4.13	%	4.25	%

Rate paid on:
NOW and interest-bearing demand deposits	0.13	%	0.16	%	0.19	%	0.47	%	0.61	%
Wealth management deposits	0.73		0.72		0.67		0.98		1.06
Money market accounts	0.16		0.31		0.61		1.13		1.33
Savings accounts	0.09		0.24		0.45		0.73		0.80
Time deposits	1.54		1.68		1.91		2.09		2.13
Interest-bearing deposits	0.51		0.61		0.81		1.20		1.33
Federal Home Loan Bank advances	1.60		1.60		1.63		1.42		0.97
Other borrowings	2.16		2.34		2.80		3.04		3.13
Subordinated notes	5.05		5.02		5.05		5.02		5.05
Junior subordinated debentures	4.23		4.17		4.29		4.39		4.46
Total interest-bearing liabilities	0.70	%	0.79	%	0.98	%	1.34	%	1.45	%

Interest rate spread⁽¹⁾⁽²⁾	2.32	%	2.33	%	2.46	%	2.79	%	2.80	%
Less: Fully taxable-equivalent adjustment	(0.01	)	(0.01	)	(0.01	)	(0.02	)	(0.02	)
Net free funds/contribution⁽³⁾	0.22		0.24		0.28		0.35		0.39
Net interest margin (GAAP)⁽²⁾	2.53	%	2.56	%	2.73	%	3.12	%	3.17	%
Fully taxable-equivalent adjustment	0.01		0.01		0.01		0.02		0.02
Net interest margin, fully taxable-equivalent (non-GAAP)⁽²⁾	2.54	%	2.57	%	2.74	%	3.14	%	3.19	%

(1) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(2) See "Supplemental Non-GAAP Financial Measures/Ratios" at Table 18 for additional information on this performance measure/ratio.
(3) 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.

TABLE 7: YEAR-TO-DATE AVERAGE BALANCES, AND NET INTEREST INCOME AND MARGIN

	Average Balance for years ended,						Interest for years ended,						Yield/Rate for years ended,
(Dollars in thousands)	Dec 31, 2020			Dec 31, 2019			Dec 31, 2020			Dec 31, 2019			Dec 31, 2020		Dec 31, 2019
Interest-bearing deposits with banks and cash equivalents ⁽¹⁾	$	3,117,075		$	1,494,418		$	8,655		$	30,503		0.28	%	2.04	%
Investment securities ⁽²⁾	4,101,136			3,651,091			101,799			110,326			2.48		3.02
FHLB and FRB stock	130,360			96,924			6,891			5,416			5.29		5.59
Liquidity management assets ⁽³⁾⁽⁴⁾	$	7,348,571		$	5,242,433		$	117,345		$	146,245		1.60	%	2.79	%
Other earning assets ^(3)(4)(5)	17,863			16,385			523			714			2.94		4.36
Mortgage loans held-for-sale	707,147			308,645			20,077			11,992			2.84		3.89
Loans, net of unearned income ^(3)(4)(6)	30,181,204			24,986,736			1,159,490			1,232,415			3.84		4.93
Total earning assets ⁽⁴⁾	$	38,254,785		$	30,554,199		$	1,297,435		$	1,391,366		3.39	%	4.55	%
Allowance for loan and investment security losses ⁽⁷⁾	(264,516		)	(164,587		)
Cash and due from banks	341,116			292,807
Other assets	3,039,954			2,549,664
Total assets	$	41,371,339		$	33,232,083

NOW and interest-bearing demand deposits	$	3,298,554		$	2,903,441		$	7,642		$	20,079		0.23	%	0.69	%
Wealth management deposits	3,882,975			2,761,936			29,277			31,121			0.75		1.13
Money market accounts	8,874,488			6,659,376			46,488			91,940			0.52		1.38
Savings accounts	3,354,662			2,834,381			12,507			20,975			0.37		0.74
Time deposits	5,142,938			5,467,192			93,264			114,777			1.81		2.10
Interest-bearing deposits	$	24,553,617		$	20,626,326		$	189,178		$	278,892		0.77	%	1.35	%
Federal Home Loan Bank advances	1,156,106			658,669			18,193			9,878			1.57		1.50
Other borrowings	496,693			428,834			12,773			13,897			2.57		3.24
Subordinated notes	436,275			309,178			21,961			15,555			5.03		5.03
Junior subordinated debentures	253,566			253,566			11,008			12,001			4.27		4.67
Total interest-bearing liabilities	$	26,896,257		$	22,276,573		$	253,113		$	330,223		0.94	%	1.48	%
Non-interest-bearing deposits	9,432,090			6,711,298
Other liabilities	1,116,304			782,677
Equity	3,926,688			3,461,535
Total liabilities and shareholders’ equity	$	41,371,339		$	33,232,083
Interest rate spread ⁽⁴⁾⁽⁸⁾													2.45	%	3.07	%
Less: Fully taxable-equivalent adjustment							(4,415		)	(6,224		)	(0.01	)	(0.02	)
Net free funds/contribution ⁽⁹⁾	$	11,358,528		$	8,277,626								0.28		0.40
Net interest income/ margin (GAAP)⁽⁴⁾							$	1,039,907		1,054,919			2.72	%	3.45	%
Fully taxable-equivalent adjustment							4,415			6,224			0.01		0.02
Net interest income/ margin, fully taxable-equivalent (non-GAAP) ⁽⁴⁾							$	1,044,322		$	1,061,143		2.73	%	3.47	%

(1) Includes interest-bearing deposits from banks, federal funds sold and securities purchased under resale agreements.
(2) Investment securities includes investment securities classified as available-for-sale and held-to-maturity, and equity securities with readily determinable fair values. Equity securities without readily determinable fair values are included within other assets.
(3) Interest income on tax-advantaged loans, trading securities and investment securities reflects a taxable-equivalent adjustment based on a marginal federal corporate tax rate in effect as of the applicable period.
(4) See “Supplemental Non-GAAP Financial Measures/Ratios” at Table 18 for additional information on this performance ratio.
(5) Other earning assets include brokerage customer receivables and trading account securities.
(6) Loans, net of unearned income, include non-accrual loans.
(7) Effective January 1, 2020 this includes the allowance for investment security losses as a result of the adoption of ASU 2016-13, Financial Instruments - Credit Losses.
(8) Interest rate spread is the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities.
(9) 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.

TABLE 8: INTEREST RATE SENSITIVITY

As an ongoing part of its financial strategy, the Company attempts to manage the impact of fluctuations in market interest rates on net interest income. Management measures its exposure to changes in interest rates by modeling many different interest rate scenarios.

The following interest rate scenarios display the percentage change in net interest income over a one-year time horizon assuming increases of 100 and 200 basis points and a decrease of 100 basis points. The Static Shock Scenario results incorporate actual cash flows and repricing characteristics for balance sheet instruments following an instantaneous, parallel change in market rates based upon a static (i.e. no growth or constant) balance sheet. Conversely, the Ramp Scenario results incorporate management’s projections of future volume and pricing of each of the product lines following a gradual, parallel change in market rates over twelve months. Actual results may differ from these simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies. The interest rate sensitivity for both the Static Shock and Ramp Scenario is as follows:

Static Shock Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
Dec 31, 2020	25.0	%	11.6	%	(7.9	)%
Sep 30, 2020	23.4		10.9		(8.1	)
Jun 30, 2020	25.9		12.6		(8.3	)
Mar 31, 2020	22.5		10.6		(9.4	)
Dec 31, 2019	18.6		9.7		(10.9	)

Ramp Scenario	+200 Basis Points		+100 Basis Points		-100 Basis Points
Dec 31, 2020	11.4	%	5.7	%	(3.3	)%
Sep 30, 2020	10.7		5.2		(3.5	)
Jun 30, 2020	13.0		6.7		(3.2	)
Mar 31, 2020	7.7		3.7		(3.8	)
Dec 31, 2019	9.3		4.8		(5.0	)

TABLE 9: MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

Loans repricing or maturity period

As of December 31, 2020

One year or less

From one to five years

Over five years

(In thousands)

Total

Commercial

Fixed rate

372,909

1,878,763

804,397

3,056,069

Fixed Rate - PPP

—

2,715,921

—

2,715,921

Variable rate

6,180,119

3,735

123

6,183,977

Total commercial

6,553,028

4,598,419

804,520

11,955,967

Commercial real estate

Fixed rate

557,819

2,087,351

377,779

3,022,949

Variable rate

5,435,402

35,781

—

5,471,183

Total commercial real estate

5,993,221

2,123,132

377,779

8,494,132

Home equity

Fixed rate

14,710

8,882

23,617

Variable rate

401,646

—

401,646

Total home equity

416,356

8,882

425,263

Residential real estate

Fixed rate

31,179

11,061

384,420

426,660

Variable rate

60,121

319,347

453,470

832,938

Total residential real estate

91,300

330,408

837,890

1,259,598

Premium finance receivables - commercial

Fixed rate

3,967,351

87,138

—

4,054,489

Variable rate

—

Total premium finance receivables - commercial

3,967,351

87,138

—

4,054,489

Premium finance receivables - life insurance

Fixed rate

12,424

299,640

18,931

330,995

Variable rate

5,526,441

—

5,526,441

Total premium finance receivables - life insurance

5,538,865

299,640

18,931

5,857,436

Consumer and other

Fixed rate

8,696

5,031

1,392

15,119

Variable rate

17,069

—

17,069

Total consumer and other

25,765

5,031

1,392

32,188

Total per category

Fixed rate

4,965,088

4,377,866

1,586,944

10,929,898

Fixed rate - PPP

—

2,715,921

—

2,715,921

Variable rate

17,620,798

358,863

453,593

18,433,254

Total loans, net of unearned income

22,585,886

7,452,650

2,040,537

32,079,073

Variable Rate Loan Pricing by Index:

Prime

2,324,385

One- month LIBOR

9,338,592

Three- month LIBOR

394,592

Twelve- month LIBOR

6,112,979

Other

262,706

Total variable rate

18,433,254

Graph available at the following link: http://ml.globenewswire.com/Resource/Download/f719da90-6a62-4f5d-a7fb-d34801cb841a

Source: Bloomberg

As noted in the table on the previous page, the majority of the Company’s portfolio is tied to LIBOR indices which, as shown in the table above, do not mirror the same changes as the Prime rate which has historically moved when the Federal Reserve raises or lowers interest rates. Specifically, the Company has $9.3 billion of variable rate loans tied to one-month LIBOR and $6.1 billion of variable rate loans tied to twelve-month LIBOR. The above chart shows:

	Basis Point (bp) Change in
	Prime		1-month LIBOR		12-month LIBOR
Fourth Quarter 2020	0	bp	-1	bp	-2	bps
Third Quarter 2020	0		-1		-19
Second Quarter 2020	0		-83		-45
First Quarter 2020	-150		-77		-100
Fourth Quarter 2019	-25		-26		-3

TABLE 10: ALLOWANCE FOR CREDIT LOSSES

	Three Months Ended															Years Ended
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31,			Dec 31,
(Dollars in thousands)	2020			2020			2020			2020			2019			2020			2019
Allowance for credit losses at beginning of period	$	388,971		$	373,174		$	253,482		$	158,461		$	163,273		$	158,461		$	154,164
Cumulative effect adjustment from the adoption of ASU 2016-13	—			—			—			47,418			—			47,418			—
Provision for credit losses	1,180			25,026			135,053			52,961			7,826			214,220			53,864
Other adjustments	155			55			42			(73		)	30			179			(21		)
Charge-offs:
Commercial	5,184			5,270			5,686			2,153			11,222			18,293			35,880
Commercial real estate	6,637			1,529			7,224			570			533			15,960			5,402
Home equity	683			138			239			1,001			1,330			2,061			3,702
Residential real estate	114			83			293			401			483			891			798
Premium finance receivables	4,214			4,640			3,434			3,184			3,817			15,472			12,902
Consumer and other	198			103			99			128			167			528			522
Total charge-offs	17,030			11,763			16,975			7,437			17,552			53,205			59,206
Recoveries:
Commercial	4,168			428			112			384			1,871			5,092			2,845
Commercial real estate	904			175			493			263			1,404			1,835			2,516
Home equity	77			111			46			294			166			528			479
Residential real estate	69			25			30			60			50			184			422
Premium finance receivables	1,445			1,720			833			1,110			1,350			5,108			3,203
Consumer and other	30			20			58			41			43			149			195
Total recoveries	6,693			2,479			1,572			2,152			4,884			12,896			9,660
Net charge-offs	(10,337		)	(9,284		)	(15,403		)	(5,285		)	(12,668		)	(40,309		)	(49,546		)
Allowance for credit losses at period end	$	379,969		$	388,971		$	373,174		$	253,482		$	158,461		$	379,969		$	158,461

Annualized net charge-offs by category as a percentage of its own respective category’s average:
Commercial	0.03		%	0.16		%	0.20		%	0.08		%	0.46		%	0.12		%	0.41		%
Commercial real estate	0.27			0.06			0.33			0.02			(0.04		)	0.17			0.04
Home equity	0.55			0.02			0.16			0.57			0.89			0.33			0.61
Residential real estate	0.02			0.02			0.09			0.11			0.14			0.06			0.04
Premium finance receivables	0.11			0.12			0.12			0.10			0.12			0.11			0.12
Consumer and other	0.78			0.49			0.25			0.56			0.41			0.52			0.29
Total loans, net of unearned income	0.13		%	0.12		%	0.20		%	0.08		%	0.19		%	0.13		%	0.20		%

Net charge-offs as a percentage of the provision for credit losses	876.02		%	37.10		%	11.41		%	9.98		%	161.87		%	18.82		%	91.99		%
Loans at period-end	$	32,079,073		$	32,135,555		$	31,402,903		$	27,807,321		$	26,800,290
Allowance for loan losses as a percentage of loans at period end	1.00		%	1.01		%	1.00		%	0.78		%	0.59		%
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end	1.18			1.21			1.19			0.91			0.59
Allowance for loan and unfunded lending-related commitment losses as a percentage of loans at period end, excluding PPP loans	1.29			1.35			1.33			0.91			0.59

TABLE 11: ALLOWANCE AND PROVISION FOR CREDIT LOSSES BY COMPONENT

	Three Months Ended														Years Ended
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,		Dec 31,			Dec 31,
(In thousands)	2020			2020			2020			2020			2019		2020			2019
Provision for loan losses	$	3,597		$	21,678		$	112,822		$	50,396		$	7,704	$	188,493		$	53,626
Provision for unfunded lending-related commitments losses	(2,413		)	3,350			22,236			2,569			122		25,742			238
Provision for held-to-maturity securities losses	(4		)	(2		)	(5		)	(4		)	—		(15		)	—
Provision for credit losses	$	1,180		$	25,026		$	135,053		$	52,961		$	7,826	$	214,220		$	53,864

Allowance for loan losses	$	319,374		$	325,959		$	313,510		$	216,050		$	156,828
Allowance for unfunded lending-related commitments losses	60,536			62,949			59,599			37,362			1,633
Allowance for loan losses and unfunded lending-related commitments losses	379,910			388,908			373,109			253,412			158,461
Allowance for held-to-maturity securities losses	59			63			65			70			—
Allowance for credit losses	$	379,969		$	388,971		$	373,174		$	253,482		$	158,461

TABLE 12: ALLOWANCE BY LOAN PORTFOLIO

The table below summarizes the calculation of allowance for loan losses and allowance for unfunded lending-related commitments losses for the Company’s core, niche and consumer and purchased loan portfolios, as of December 31, 2020 and September 30, 2020.

	As of Dec 31, 2020						As of Sep 30, 2020
(Dollars in thousands)	Recorded Investment		Calculated Allowance		% of its category’s balance		Recorded Investment		Calculated Allowance		% of its category’s balance
Commercial:
Commercial, industrial and other, excluding PPP loans	$	9,162,327	$	92,777	1.01	%	$	8,808,467	$	110,045	1.25	%
Commercial real estate:
Construction and development	1,344,653		77,463		5.76		1,270,235		73,565		5.79
Non-construction	6,775,195		150,637		2.22		6,708,538		141,249		2.11
Home equity	395,248		11,027		2.79		412,162		11,216		2.72
Residential real estate	1,195,271		11,948		1.00		1,309,209		11,165		0.85
Total core loan portfolio	$	18,872,694	$	343,852	1.82	%	$	18,508,611	$	347,240	1.88	%
Commercial PPP loans	$	2,715,921	$	2	0.00	%	$	3,379,013	$	3	0.00	%
Premium finance receivables
Commercial insurance loans	4,054,489		17,267		0.43		4,060,144		17,378		0.43
Life insurance loans	5,741,639		510		0.01		5,376,403		478		0.01
Consumer and other	30,133		290		0.96		53,191		555		1.04
Total niche and consumer loan portfolio	$	12,542,182	$	18,069	0.14	%	$	12,868,751	$	18,414	0.14	%
Purchased commercial	$	77,719	$	1,433	1.84	%	$	89,519	$	2,846	3.18	%
Purchased commercial real estate	374,284		15,503		4.14		444,369		19,196		4.32
Purchased home equity	30,015		410		1.37		34,112		461		1.35
Purchased residential real estate	64,327		511		0.79		75,601		625		0.83
Purchased life insurance loans	115,797		—		—		112,429		—		—
Purchased consumer and other	2,055		132		6.42		2,163		126		5.83
Total purchased loan portfolio	$	664,197	$	17,989	2.71	%	$	758,193	$	23,254	3.07	%
Total loans, net of unearned income	$	32,079,073	$	379,910	1.18	%	$	32,135,555	$	388,908	1.21	%
Total loans, net of unearned income, excluding PPP loans	$	29,363,152	$	379,908	1.29	%	$	28,756,542	$	388,905	1.35	%

TABLE 13: LOAN PORTFOLIO AGING

(Dollars in thousands)	Dec 31, 2020		Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019
Loan Balances:
Commercial
Nonaccrual	$	21,743	$	42,036	$	42,882	$	49,916	$	37,224
90+ days and still accruing	307		—		1,374		1,241		1,855
60-89 days past due	6,900		2,168		8,952		8,873		3,275
30-59 days past due	44,381		48,271		23,720		86,129		77,324
Current	11,882,636		12,184,524		11,782,304		8,879,727		8,166,242
Total commercial	$	11,955,967	$	12,276,999	$	11,859,232	$	9,025,886	$	8,285,920
Commercial real estate
Nonaccrual	$	46,107	$	68,815	$	64,557	$	62,830	$	26,113
90+ days and still accruing	—		—		—		516		14,946
60-89 days past due	5,178		8,299		26,480		10,212		31,546
30-59 days past due	32,116		53,462		75,528		75,068		97,567
Current	8,410,731		8,292,566		8,034,180		8,036,905		7,850,104
Total commercial real estate	$	8,494,132	$	8,423,142	$	8,200,745	8,185,531		$	8,020,276
Home equity
Nonaccrual	$	6,529	$	6,329	$	7,261	$	7,243	$	7,363
90+ days and still accruing	—		—		—		—		—
60-89 days past due	47		70		—		214		454
30-59 days past due	637		1,148		1,296		2,096		3,533
Current	418,050		438,727		458,039		485,102		501,716
Total home equity	$	425,263	$	446,274	$	466,596	$	494,655	$	513,066
Residential real estate
Nonaccrual	$	26,071	$	22,069	$	19,529	$	18,965	$	13,797
90+ days and still accruing	—		—		—		605		5,771
60-89 days past due	1,635		814		1,506		345		3,089
30-59 days past due	12,584		2,443		4,400		28,983		18,041
Current	1,219,308		1,359,484		1,401,994		1,328,491		1,313,523
Total residential real estate	$	1,259,598	$	1,384,810	$	1,427,429	$	1,377,389	$	1,354,221
Premium finance receivables
Nonaccrual	$	13,264	$	21,080	$	16,460	$	21,058	$	21,180
90+ days and still accruing	12,792		12,177		35,638		16,505		11,517
60-89 days past due	27,801		38,286		42,353		12,730		12,119
30-59 days past due	49,274		80,732		61,160		70,185		51,342
Current	9,808,794		9,396,701		9,244,965		8,566,216		8,420,471
Total premium finance receivables	$	9,911,925	$	9,548,976	$	9,400,576	$	8,686,694	$	8,516,629
Consumer and other
Nonaccrual	$	436	$	422	$	427	$	403	$	231
90+ days and still accruing	264		175		156		78		287
60-89 days past due	24		273		4		625		40
30-59 days past due	136		493		281		207		344
Current	31,328		53,991		47,457		35,853		109,276
Total consumer and other	$	32,188	$	55,354	$	48,325	$	37,166	$	110,178
Total loans, net of unearned income
Nonaccrual	$	114,150	$	160,751	$	151,116	$	160,415	$	105,908
90+ days and still accruing	13,363		12,352		37,168		18,945		34,376
60-89 days past due	41,585		49,910		79,295		32,999		50,523
30-59 days past due	139,128		186,549		166,385		262,668		248,151
Current	31,770,847		31,725,993		30,968,939		27,332,294		26,361,332
Total loans, net of unearned income	$	32,079,073	$	32,135,555	$	31,402,903	$	27,807,321	$	26,800,290

TABLE 14: NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS ("TDRs")

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(Dollars in thousands)	2020			2020			2020			2020⁽¹⁾			2019
Loans past due greater than 90 days and still accruing ⁽²⁾:
Commercial	$	307		$	—		$	1,374		$	1,241		$	—
Commercial real estate	—			—			—			516			—
Home equity	—			—			—			—			—
Residential real estate	—			—			—			605			—
Premium finance receivables	12,792			12,177			35,638			16,505			11,517
Consumer and other	264			175			156			78			163
Total loans past due greater than 90 days and still accruing	13,363			12,352			37,168			18,945			11,680
Non-accrual loans:
Commercial	21,743			42,036			42,882			49,916			37,224
Commercial real estate	46,107			68,815			64,557			62,830			26,113
Home equity	6,529			6,329			7,261			7,243			7,363
Residential real estate	26,071			22,069			19,529			18,965			13,797
Premium finance receivables	13,264			21,080			16,460			21,058			21,180
Consumer and other	436			422			427			403			231
Total non-accrual loans	114,150			160,751			151,116			160,415			105,908
Total non-performing loans:
Commercial	22,050			42,036			44,256			51,157			37,224
Commercial real estate	46,107			68,815			64,557			63,346			26,113
Home equity	6,529			6,329			7,261			7,243			7,363
Residential real estate	26,071			22,069			19,529			19,570			13,797
Premium finance receivables	26,056			33,257			52,098			37,563			32,697
Consumer and other	700			597			583			481			394
Total non-performing loans	$	127,513		$	173,103		$	188,284		$	179,360		$	117,588
Other real estate owned	9,711			2,891			2,409			2,701			5,208
Other real estate owned - from acquisitions	6,847			6,326			7,788			8,325			9,963
Other repossessed assets	—			—			—			—			4
Total non-performing assets	$	144,071		$	182,320		$	198,481		$	190,386		$	132,763
Accruing TDRs not included within non-performing assets	$	47,023		$	46,410		$	48,609		$	47,049		$	36,725
Total non-performing loans by category as a percent of its own respective category’s period-end balance:
Commercial	0.18		%	0.34		%	0.37		%	0.57		%	0.45		%
Commercial real estate	0.54			0.82			0.79			0.77			0.33
Home equity	1.54			1.42			1.56			1.46			1.44
Residential real estate	2.07			1.59			1.37			1.42			1.02
Premium finance receivables	0.26			0.35			0.55			0.43			0.39
Consumer and other	2.17			1.08			1.21			1.29			0.36
Total loans, net of unearned income	0.40		%	0.54		%	0.60		%	0.65		%	0.44		%
Total non-performing assets as a percentage of total assets	0.32		%	0.42		%	0.46		%	0.49		%	0.36		%
Allowance for credit losses as a percentage of non-accrual loans	332.82		%	241.93		%	246.90		%	157.97		%	149.62		%

(1) Prior to the adoption of ASU 2016-13, acquired loans with evidence of credit quality deterioration (purchased credit deteriorated loans, or "PCD loans") were excluded from non-performing loans. PCD loans that meet the definition of non-accrual or are greater than 90 days past-due and still accruing interest are now included in non-performing loans and resulted in a $37.3 million increase in non-accrual loans upon adoption of ASU 2016-13 as of January 1, 2020.
(2) As of December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, no TDRs were past due greater than 90 days and still accruing interest.

Non-performing Loans Rollforward

	Three Months Ended															Years Ended
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31,			Dec 31,
(In thousands)	2020			2020			2020			2020			2019			2020			2019

Balance at beginning of period	$	173,103		$	188,284		$	179,360		$	117,588		$	114,284		$	117,588		$	113,234
Additions from becoming non-performing in the respective period	13,224			19,771			20,803			32,195			30,977			85,993			96,355
Additions from the adoption of ASU 2016-13	—			—			—			37,285			—			37,285			—
Return to performing status	(1,000		)	(6,202		)	(2,566		)	(486		)	(243		)	(10,254		)	(14,774		)
Payments received	(30,146		)	(3,733		)	(11,201		)	(7,949		)	(19,380		)	(53,029		)	(45,168		)
Transfer to OREO and other repossessed assets	(12,662		)	(598		)	—			(1,297		)	—			(14,557		)	(3,061		)
Charge-offs	(7,817		)	(6,583		)	(12,884		)	(2,551		)	(11,798		)	(29,835		)	(39,591		)
Net change for niche loans ⁽¹⁾	(7,189		)	(17,836		)	14,772			4,575			3,748			(5,678		)	10,593
Balance at end of period	$	127,513		$	173,103		$	188,284		$	179,360		$	117,588		$	127,513		$	117,588

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

TDRs

	Dec 31,		Sep 30,		Jun 30,		Mar 31,		Dec 31,
(In thousands)	2020		2020		2020		2020		2019
Accruing TDRs:
Commercial	$	7,699	$	7,863	$	5,338	$	6,500	$	4,905
Commercial real estate	10,549		10,846		19,106		18,043		9,754
Residential real estate and other	28,775		27,701		24,165		22,506		22,066
Total accrual	$	47,023	$	46,410	$	48,609	$	47,049	$	36,725
Non-accrual TDRs: ⁽¹⁾
Commercial	$	10,491	$	13,132	$	20,788	$	17,206	$	13,834
Commercial real estate	6,177		13,601		8,545		14,420		7,119
Residential real estate and other	4,501		5,392		5,606		4,962		6,158
Total non-accrual	$	21,169	$	32,125	$	34,939	$	36,588	$	27,111
Total TDRs:
Commercial	$	18,190	$	20,995	$	26,126	$	23,706	$	18,739
Commercial real estate	16,726		24,447		27,651		32,463		16,873
Residential real estate and other	33,276		33,093		29,771		27,468		28,224
Total TDRs	$	68,192	$	78,535	$	83,548	$	83,637	$	63,836

(1) Included in total non-performing loans.

Other Real Estate Owned

	Three Months Ended
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(In thousands)	2020			2020			2020			2020			2019
Balance at beginning of period	$	9,217		$	10,197		$	11,026		$	15,171		$	17,482
Disposals/resolved	(3,839		)	(1,532		)	(612		)	(4,793		)	(4,860		)
Transfers in at fair value, less costs to sell	11,508			777			—			954			936
Additions from acquisition	—			—			—			—			2,179
Fair value adjustments	(328		)	(225		)	(217		)	(306		)	(566		)
Balance at end of period	$	16,558		$	9,217		$	10,197		$	11,026		$	15,171

	Period End
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
Balance by Property Type:	2020			2020			2020			2020			2019
Residential real estate	$	2,324		$	1,839		$	1,382		$	1,684		$	1,016
Residential real estate development	1,691			—			—			—			810
Commercial real estate	12,543			7,378			8,815			9,342			13,345
Total	$	16,558		$	9,217		$	10,197		$	11,026		$	15,171

TABLE 15: NON-INTEREST INCOME

	Three Months Ended														Q4 2020 compared to Q3 2020					Q4 2020 compared to Q4 2019
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,		Q4 2020 compared to Q3 2020					Q4 2020 compared to Q4 2019
(Dollars in thousands)	2020			2020			2020			2020			2019		$ Change			% Change		$ Change			% Change
Brokerage	$	4,740		$	4,563		$	4,147		$	5,281		$	4,859	$	177		4	%	$	(119	)	(2	)%
Trust and asset management	22,062			20,394			18,489			20,660			20,140		1,668			8		1,922			10
Total wealth management	26,802			24,957			22,636			25,941			24,999		1,845			7		1,803			7
Mortgage banking	86,819			108,544			102,324			48,326			47,860		(21,725		)	(20	)	38,959			81
Service charges on deposit accounts	11,841			11,497			10,420			11,265			10,973		344			3		868			8
Gains (losses) on investment securities, net	1,214			411			808			(4,359		)	587		803			NM		627			NM
Fees from covered call options	—			—			—			2,292			1,243		—			NM		(1,243		)	(100	)
Trading (losses) gains, net	(102		)	183			(634		)	(451		)	46		(285		)	NM		(148		)	NM
Operating lease income, net	12,118			11,717			11,785			11,984			12,487		401			3		(369		)	(3	)
Other:
Interest rate swap fees	4,930			4,029			5,693			6,066			2,206		901			22		2,724			NM
BOLI	2,846			1,218			1,950			(1,284		)	1,377		1,628			134		1,469			NM
Administrative services	1,263			1,077			933			1,112			1,072		186			17		191			18
Foreign currency remeasurement (losses) gains	(208		)	(54		)	(208		)	(151		)	261		(154		)	NM		(469		)	NM
Early pay-offs of capital leases	118			165			275			74			24		(47		)	(28	)	94			NM
Miscellaneous	10,720			6,849			6,011			12,427			9,085		3,871			57		1,635			18
Total Other	19,669			13,284			14,654			18,244			14,025		6,385			48		5,644			40
Total Non-Interest Income	$	158,361		$	170,593		$	161,993		$	113,242		$	112,220	$	(12,232	)	(7	)%	$	46,141		41	%

NM - Not meaningful.

	Years Ended
	Dec 31,			Dec 31,			$			%
(Dollars in thousands)	2020			2019			Change			Change
Brokerage	$	18,731		$	18,825		$	(94	)	0	%
Trust and asset management	81,605			78,289			3,316			4
Total wealth management	100,336			97,114			3,222			3
Mortgage banking	346,013			154,293			191,720			124
Service charges on deposit accounts	45,023			39,070			5,953			15
(Losses) gains on investment securities, net	(1,926		)	3,525			(5,451		)	NM
Fees from covered call options	2,292			3,670			(1,378		)	(38	)
Trading losses, net	(1,004		)	(158		)	(846		)	NM
Operating lease income, net	47,604			47,041			563			1
Other:
Interest rate swap fees	20,718			13,072			7,646			58
BOLI	4,730			4,947			(217		)	(4	)
Administrative services	4,385			4,197			188			4
Foreign currency remeasurement (loss) gain	(621		)	783			(1,404		)	NM
Early pay-offs of leases	632			35			597			NM
Miscellaneous	36,007			39,583			(3,576		)	(9	)
Total Other	65,851			62,617			3,234			5
Total Non-Interest Income	$	604,189		$	407,172		$	197,017		48	%

NM - Not meaningful.

TABLE 16: MORTGAGE BANKING

	Three Months Ended															Years Ended
(Dollars in thousands)	Dec 31, 2020			Sep 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019			Dec 31, 2020			Dec 31, 2019
Originations:
Retail originations	$	1,757,093		$	1,590,699		$	1,588,932		$	773,144		$	782,122		$	5,709,868		$	2,730,865
Correspondent originations	—			—			—			—			4,024			—			385,729
Veterans First originations	594,151			635,876			621,878			442,957			459,236			2,294,862			1,381,327
Total originations for sale (A)	$	2,351,244		$	2,226,575		$	2,210,810		$	1,216,101		$	1,245,382		$	8,004,730		$	4,497,921
Originations for investment	192,107			73,711			56,954			73,727			105,911			396,499			460,734
Total originations	$	2,543,351		$	2,300,286		$	2,267,764		$	1,289,828		$	1,351,293		$	8,401,229		$	4,958,655

Purchases as a percentage of originations for sale	35		%	41		%	30		%	37		%	40		%	35		%	52		%
Refinances as a percentage of originations for sale	65			59			70			63			60			65			48
Total	100		%	100		%	100		%	100		%	100		%	100		%	100		%

Production Margin:
Production revenue (B) ⁽¹⁾	$	70,886		$	94,148		$	93,433		$	49,327		$	34,622		$	307,794		$	122,047
Production margin (B / A)	3.01		%	4.23		%	4.23		%	4.06		%	2.78		%	3.85		%	2.71		%

Mortgage Servicing:
Loans serviced for others (C)	$	10,833,135		$	10,139,878		$	9,188,285		$	8,314,634		$	8,243,251
MSRs, at fair value (D)	92,081			86,907			77,203			73,504			85,638
Percentage of MSRs to loans serviced for others (D / C)	0.85		%	0.86		%	0.84		%	0.88		%	1.04		%
Servicing income	$	9,829		$	8,118		$	6,908		$	7,031		$	6,247		$	31,886		$	23,156

Components of MSR:
MSR - current period capitalization	$	20,343		$	20,936		$	20,351		$	9,447		$	14,532		$	71,077		$	44,943
MSR - collection of expected cash flows - paydowns	(688		)	(590		)	(419		)	(547		)	(483		)	(2,244		)	(1,901		)
MSR - collection of expected cash flows - payoffs	(8,335		)	(7,272		)	(8,252		)	(6,476		)	(6,325		)	(30,335		)	(18,217		)
Valuation:
MSR - changes in fair value model assumptions	(5,223		)	(3,002		)	(7,982		)	(14,557		)	2,329			(30,764		)	(14,778		)
Gain (loss) on derivative contract held as an economic hedge, net	—			—			589			4,160			(483		)	4,749			519
MSR valuation adjustment, net of gain/(loss) on derivative contract held as an economic hedge	$	(5,223	)	$	(3,002	)	$	(7,393	)	$	(10,397	)	$	1,846		$	(26,015	)	$	(14,259	)

Summary of Mortgage Banking Revenue:
Production revenue ⁽¹⁾	$	70,886		$	94,148		$	93,433		$	49,327		$	34,622		$	307,794		$	122,047
Servicing income	9,829			8,118			6,908			7,031			6,247			31,886			23,156
MSR activity	6,097			10,072			4,287			(7,973		)	9,570			12,483			10,566
Other	7			(3,794		)	(2,304		)	(59		)	(2,579		)	(6,150		)	(1,476		)
Total mortgage banking revenue	$	86,819		$	108,544		$	102,324		$	48,326		$	47,860		$	346,013		$	154,293

(1) Production revenue represents revenue earned from the origination and subsequent sale of mortgages, including gains on loans sold and fees from originations, changes in derivative activity, processing and other related activities, and excludes servicing fees, changes in the fair value of servicing rights and changes to the mortgage recourse obligation and other non-production revenue.

TABLE 17: NON-INTEREST EXPENSE

	Three Months Ended													Q4 2020 compared to Q3 2020					Q4 2020 compared to Q4 2019
		Dec 31,			Sep 30,			Jun 30,		Mar 31,			Dec 31,	Q4 2020 compared to Q3 2020					Q4 2020 compared to Q4 2019
(Dollars in thousands)		2020			2020			2020		2020			2019		$ Change		% Change			$ Change		% Change
Salaries and employee benefits:
Salaries	$	93,535		$	89,849		$	87,105	$	81,286		$	82,888	$	3,686		4	%	$	10,647		13	%
Commissions and incentive compensation	52,383			48,475			46,151		31,575			40,226		3,908			8		12,157			30
Benefits	25,198			25,718			20,900		23,901			22,827		(520		)	(2	)	2,371			10
Total salaries and employee benefits	171,116			164,042			154,156		136,762			145,941		7,074			4		25,175			17
Equipment	20,565			17,251			15,846		14,834			14,485		3,314			19		6,080			42
Operating lease equipment depreciation	9,938			9,425			9,292		9,260			9,766		513			5		172			2
Occupancy, net	19,687			15,830			16,893		17,547			17,132		3,857			24		2,555			15
Data processing	5,728			5,689			10,406		8,373			7,569		39			1		(1,841		)	(24	)
Advertising and marketing	9,850			7,880			7,704		10,862			12,517		1,970			25		(2,667		)	(21	)
Professional fees	6,530			6,488			7,687		6,721			7,650		42			1		(1,120		)	(15	)
Amortization of other intangible assets	2,634			2,701			2,820		2,863			3,017		(67		)	(2	)	(383		)	(13	)
FDIC insurance	7,016			6,772			7,081		4,135			1,348		244			4		5,668			NM
OREO expense, net	(114		)	(168		)	237		(876		)	536		54			(32	)	(650		)	NM
Other:
Commissions - 3rd party brokers	764			778			707		865			717		(14		)	(2	)	47			7
Postage	1,849			1,529			1,591		1,949			2,220		320			21		(371		)	(17	)
Miscellaneous	26,304			26,002			24,948		21,346			26,693		302			1		(389		)	(1	)
Total other	28,917			28,309			27,246		24,160			29,630		608			2		(713		)	(2	)
Total Non-Interest Expense	$	281,867		$	264,219		$	259,368	$	234,641		$	249,591	$	17,648		7	%	$	32,276		13	%

NM - Not meaningful.

	Years Ended
	Dec 31,			Dec 31,		$			%
(Dollars in thousands)	2020			2019		Change			Change
Salaries and employee benefits:
Salaries	$	351,775		$	310,352	$	41,423		13	%
Commissions and incentive compensation	178,584			148,600		29,984			20
Benefits	95,717			87,468		8,249			9
Total salaries and employee benefits	626,076			546,420		79,656			15
Equipment	68,496			52,328		16,168			31
Operating lease equipment depreciation	37,915			35,760		2,155			6
Occupancy, net	69,957			64,289		5,668			9
Data processing	30,196			27,820		2,376			9
Advertising and marketing	36,296			48,595		(12,299		)	(25	)
Professional fees	27,426			27,471		(45		)	0
Amortization of other intangible assets	11,018			11,844		(826		)	(7	)
FDIC insurance	25,004			9,199		15,805			NM
OREO expense, net	(921		)	3,628		(4,549		)	NM
Other:
Commissions - 3rd party brokers	3,114			2,918		196			7
Postage	6,918			9,597		(2,679		)	(28	)
Miscellaneous	98,600			88,257		10,343			12
Total other	108,632			100,772		7,860			8
Total Non-Interest Expense	$	1,040,095		$	928,126	$	111,969		12	%

NM - Not meaningful.

TABLE 18: SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES/RATIOS

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

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax rates effective as of the end of the period. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a fully taxable-equivalent basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses), measures how much it costs to produce one dollar of revenue. Securities gains or losses are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity ratio and tangible book value per common share as useful measurements of the Company’s equity. The Company references the return on average tangible common equity as a measurement of profitability. Management considers pre-tax income, excluding provision for credit losses, as a useful measurement of the Company's core net income.

	Three Months Ended															Years Ended
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31,			Dec 31,
(Dollars and shares in thousands)	2020			2020			2020			2020			2019			2020			2019
Reconciliation of Non-GAAP Net Interest Margin and Efficiency Ratio:
(A) Interest Income (GAAP)	$	307,981		$	311,156		$	329,816		$	344,067		$	349,731		$	1,293,020		$	1,385,142
Taxable-equivalent adjustment:
- Loans	324			481			576			860			892			2,241			3,935
- Liquidity Management Assets	530			546			538			551			573			2,165			2,280
- Other Earning Assets	3			1			3			2			1			9			9
(B) Interest Income (non-GAAP)	$	308,838		$	312,184		$	330,933		$	345,480		$	351,197		$	1,297,435		$	1,391,366
(C) Interest Expense (GAAP)	$	48,584		$	55,220		$	66,685		$	82,624		$	87,852		$	253,113		$	330,223
(D) Net Interest Income (GAAP) (A minus C)	$	259,397		$	255,936		$	263,131		$	261,443		$	261,879		$	1,039,907		$	1,054,919
(E) Net Interest Income (non-GAAP) (B minus C)	$	260,254		$	256,964		$	264,248		$	262,856		$	263,345		$	1,044,322		$	1,061,143
Net interest margin (GAAP)	2.53		%	2.56		%	2.73		%	3.12		%	3.17		%	2.72		%	3.45		%
Net interest margin, fully taxable-equivalent (non-GAAP)	2.54		%	2.57		%	2.74		%	3.14		%	3.19		%	2.73		%	3.47		%
(F) Non-interest income	$	158,361		$	170,593		$	161,993		$	113,242		$	112,220		$	604,189		$	407,172
(G) Gains (losses) on investment securities, net	1,214			411			808			(4,359		)	587			(1,926		)	3,525
(H) Non-interest expense	281,867			264,219			259,368			234,641			249,591			1,040,095			928,126
Efficiency ratio (H/(D+F-G))	67.67		%	62.01		%	61.13		%	61.90		%	66.82		%	63.19		%	63.63		%
Efficiency ratio (non-GAAP) (H/(E+F-G))	67.53		%	61.86		%	60.97		%	61.67		%	66.56		%	63.02		%	63.36		%

Reconciliation of Non-GAAP Tangible Common Equity Ratio:
Total shareholders’ equity (GAAP)	$	4,115,995		$	4,074,089		$	3,990,218		$	3,700,393		$	3,691,250
Less: Non-convertible preferred stock (GAAP)	(412,500		)	(412,500		)	(412,500		)	(125,000		)	(125,000		)
Less: Intangible assets (GAAP)	(681,747		)	(683,314		)	(685,581		)	(687,626		)	(692,277		)
(I) Total tangible common shareholders’ equity (non-GAAP)	$	3,021,748		$	2,978,275		$	2,892,137		$	2,887,767		$	2,873,973
(J) Total assets (GAAP)	$	45,080,768		$	43,731,718		$	43,540,017		$	38,799,847		$	36,620,583
Less: Intangible assets (GAAP)	(681,747		)	(683,314		)	(685,581		)	(687,626		)	(692,277		)
(K) Total tangible assets (non-GAAP)	$	44,399,021		$	43,048,404		$	42,854,436		$	38,112,221		$	35,928,306
Common equity to assets ratio (GAAP) (L/J)	8.2		%	8.4		%	8.2		%	9.2		%	9.7		%
Tangible common equity ratio (non-GAAP) (I/K)	6.8		%	6.9		%	6.7		%	7.6		%	8.0		%

	Three Months Ended															Years Ended
	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Dec 31,			Dec 31,
(Dollars and shares in thousands)	2020			2020			2020			2020			2019			2020			2019
Reconciliation of Non-GAAP Tangible Book Value per Common Share:
Total shareholders’ equity	$	4,115,995		$	4,074,089		$	3,990,218		$	3,700,393		$	3,691,250
Less: Preferred stock	(412,500		)	(412,500		)	(412,500		)	(125,000		)	(125,000		)
(L) Total common equity	$	3,703,495		$	3,661,589		$	3,577,718		$	3,575,393		$	3,566,250
(M) Actual common shares outstanding	56,770			57,602			57,574			57,545			57,822
Book value per common share (L/M)	$	65.24		$	63.57		$	62.14		$	62.13		$	61.68
Tangible book value per common share (non-GAAP) (I/M)	$	53.23		$	51.70		$	50.23		$	50.18		$	49.70

Reconciliation of Non-GAAP Return on Average Tangible Common Equity:
(N) Net income applicable to common shares	$	94,213		$	97,029		$	19,609		$	60,762		$	83,914		$	271,613		$	347,497
Add: Intangible asset amortization	2,634			2,701			2,820			2,863			3,017			11,018			11,844
Less: Tax effect of intangible asset amortization	(656		)	(589		)	(832		)	(799		)	(793		)	(2,732		)	(3,068		)
After-tax intangible asset amortization	1,978			2,112			1,988			2,064			2,224			8,286			8,776
(O) Tangible net income applicable to common shares (non-GAAP)	$	96,191		$	99,141		$	21,597		$	62,826		$	86,138		$	279,899		$	356,273
Total average shareholders' equity	$	4,050,286		$	4,034,902		$	3,908,846		$	3,710,169		$	3,622,184		$	3,926,688		$	3,461,535
Less: Average preferred stock	(412,500		)	(412,500		)	(273,489		)	(125,000		)	(125,000		)	(306,455		)	(125,000		)
(P) Total average common shareholders' equity	$	3,637,786		$	3,622,402		$	3,635,357		$	3,585,169		$	3,497,184		$	3,620,233		$	3,336,535
Less: Average intangible assets	(682,290		)	(684,717		)	(686,526		)	(690,777		)	(689,286		)	(686,064		)	(641,802		)
(Q) Total average tangible common shareholders’ equity (non-GAAP)	$	2,955,496		$	2,937,685		$	2,948,831		$	2,894,392		$	2,807,898		$	2,934,169		$	2,694,733
Return on average common equity, annualized (N/P)	10.30		%	10.66		%	2.17		%	6.82		%	9.52		%	7.50		%	10.41		%
Return on average tangible common equity, annualized (non-GAAP) (O/Q)	12.95		%	13.43		%	2.95		%	8.73		%	12.17		%	9.54		%	13.22		%

Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:
Income before taxes	$	134,711		$	137,284		$	30,703		$	87,083		$	116,682		$	389,781		$	480,101
Add: Provision for credit losses	1,180			25,026			135,053			52,961			7,826			214,220			53,864
Pre-tax income, excluding provision for credit losses (non-GAAP)	$	135,891		$	162,310		$	165,756		$	140,044		$	124,508		$	604,001		$	533,965

Reconciliation of Non-GAAP Pre-Tax, Pre-Provision Income:	Years Ended
	Dec 31,		Dec 31,		Dec 31,		Dec 31,		Dec 31,		Dec 31,		Dec 31,		Dec 31,		Dec 31,
	2018		2017		2016		2015		2014		2013		2012		2011		2010
Income before taxes	$	460,133	$	389,997	$	331,854	$	251,765	$	246,431	$	224,440	$	180,132	$	128,033	$	100,807
Add: Provision for credit losses	34,832			29,768		34,084		32,942		20,537		46,033		76,436		102,638		124,664
Pre-tax income, excluding provision for credit losses (non-GAAP)	$	494,965	$	419,765	$	365,938	$	284,707	$	266,968	$	270,473	$	256,568	$	230,671	$	225,471

WINTRUST SUBSIDIARIES AND LOCATIONS

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

In addition to the locations noted above, the banks also operate facilities in Illinois in Addison, Algonquin, Aurora, Bloomingdale, Bolingbrook, Buffalo Grove, Burbank, Cary, Clarendon Hills, Crete, Countryside, Darien, Deerfield, Des Plaines, Downers Grove, Elgin, Elk Grove Village, Elmhurst, Evanston, Evergreen Park, Frankfort, Geneva, Glen Ellyn, Glencoe, Glenview, Gurnee, Grayslake, Hanover Park, Highland Park, Highwood, Hoffman Estates, Homer Glen, Itasca, Joliet, Lake Bluff, Lake Villa, Lansing, Lemont, Lindenhurst, Lynwood, Markham, Maywood, McHenry, Mokena, Mount Prospect, Mundelein, Naperville, North Chicago, Northfield, Norridge, Oak Lawn, Oak Brook, Orland Park, Palatine, Park Ridge, Prospect Heights, Ravinia, Riverside, Rolling Meadows, Round Lake Beach, Shorewood, Skokie, South Holland, Spring Grove, Steger, Stone Park, Vernon Hills, Wauconda, Waukegan, Western Springs, Willowbrook, Wilmette, Winnetka and Wood Dale, and in Wisconsin in Albany, Burlington, Clinton, Darlington, Delafield, Delavan, Elm Grove, Genoa City, Kenosha, Lake Geneva, Madison, Menomonee Falls, Milwaukee, Monroe, Pewaukee, Racine, Sharon, Wales, Walworth and Wind Lake, and in Dyer, Indiana and in Naples, Florida.

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

FIRST Insurance Funding, a division of Lake Forest Bank & Trust Company, N.A., and Wintrust Life Finance, a division of Lake Forest Bank & Trust Company, N.A., serve commercial and life insurance loan customers, respectively, throughout the United States.
First Insurance Funding of Canada serves commercial insurance loan customers throughout Canada.
Tricom, Inc. of Milwaukee provides high-yielding, short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States.
Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., engages primarily in the origination and purchase of residential mortgages for sale into the secondary market through origination offices located throughout the United States. Loans are also originated nationwide through relationships with wholesale and correspondent offices.
Wintrust Investments, LLC is a broker-dealer providing a full range of private client and brokerage services to clients and correspondent banks located primarily in the Midwest.
Great Lakes Advisors LLC provides money management services and advisory services to individual accounts.
The Chicago Trust Company, N.A., a trust subsidiary, allows Wintrust to service customers’ trust and investment needs at each banking location.
Wintrust Asset Finance offers direct leasing opportunities.
CDEC provides Qualified Intermediary services (as defined by U.S. Treasury regulations) for taxpayers seeking to structure tax-deferred like-kind exchanges under Internal Revenue Code Section 1031.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information can be identified through the use of words such as “intend,” “plan,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “contemplate,” “possible,” “will,” “may,” “should,” “would” and “could.” Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, such as the impacts of the COVID-19 pandemic, and which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of the Company’s 2019 Annual Report on Form 10-K and in any of the Company’s subsequent SEC filings. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things, statements relating to the Company’s future financial performance, the performance of its loan portfolio, the expected amount of future credit reserves and charge-offs, delinquency trends, growth plans, regulatory developments, securities that the Company may offer from time to time, and management’s long-term performance goals, as well as statements relating to the anticipated effects on financial condition and results of operations from expected developments or events, the Company’s business and growth strategies, including future acquisitions of banks, specialty finance or wealth management businesses, internal growth and plans to form additional de novo banks or branch offices. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:

the severity, magnitude and duration of the COVID-19 pandemic and the direct and indirect impact of such pandemic, as well as responses to the pandemic by the government, businesses and consumers, on our operations and personnel, commercial activity and demand across our business and our customers’ businesses;
the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect the Company’s liquidity and capital positions, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses;
the impact of the COVID-19 pandemic on our financial results, including possible lost revenue and increased expenses (including the cost of capital), as well as possible goodwill impairment charges;
economic conditions that affect the economy, housing prices, the job market and other factors that may adversely affect the Company’s liquidity and the performance of its loan portfolios, particularly in the markets in which it operates;
negative effects suffered by us or our customers resulting from changes in U.S. trade policies;
the extent of defaults and losses on the Company’s loan portfolio, which may require further increases in its allowance for credit losses;
estimates of fair value of certain of the Company’s assets and liabilities, which could change in value significantly from period to period;
the financial success and economic viability of the borrowers of our commercial loans;
commercial real estate market conditions in the Chicago metropolitan area and southern Wisconsin;
the extent of commercial and consumer delinquencies and declines in real estate values, which may require further increases in the Company’s allowance for credit losses;
inaccurate assumptions in our analytical and forecasting models used to manage our loan portfolio;
changes in the level and volatility of interest rates, the capital markets and other market indices (including developments and volatility arising from or related to the COVID-19 pandemic) that may affect, among other things, the Company’s liquidity and the value of its assets and liabilities;
a prolonged period of near zero interest rates or potentially negative interest rates, either broadly or for some types of instruments, which may affect the Company’s net interest income and net interest margin, and which could materially adversely affect the Company’s profitability;
competitive pressures in the financial services business which may affect the pricing of the Company’s loan and deposit products as well as its services (including wealth management services), which may result in loss of market share and reduced income from deposits, loans, advisory fees and income from other products;
failure to identify and complete favorable acquisitions in the future or unexpected difficulties or developments related to the integration of the Company’s recent or future acquisitions;
unexpected difficulties and losses related to FDIC-assisted acquisitions;
harm to the Company’s reputation;
any negative perception of the Company’s financial strength;
ability of the Company to raise additional capital on acceptable terms when needed;
disruption in capital markets, which may lower fair values for the Company’s investment portfolio;
ability of the Company to use technology to provide products and services that will satisfy customer demands and create efficiencies in operations and to manage risks associated therewith;
failure or breaches of our security systems or infrastructure, or those of third parties;
security breaches, including denial of service attacks, hacking, social engineering attacks, malware intrusion or data corruption attempts and identity theft;
adverse effects on our information technology systems resulting from failures, human error or cyberattacks;
adverse effects of failures by our vendors to provide agreed upon services in the manner and at the cost agreed, particularly our information technology vendors;
increased costs as a result of protecting our customers from the impact of stolen debit card information;
accuracy and completeness of information the Company receives about customers and counterparties to make credit decisions;
ability of the Company to attract and retain senior management experienced in the banking and financial services industries;
environmental liability risk associated with lending activities;
the impact of any claims or legal actions to which the Company is subject, including any effect on our reputation;
losses incurred in connection with repurchases and indemnification payments related to mortgages and increases in reserves associated therewith;
the loss of customers as a result of technological changes allowing consumers to complete their financial transactions without the use of a bank;
the soundness of other financial institutions;
the expenses and delayed returns inherent in opening new branches and de novo banks;
liabilities, potential customer loss or reputational harm related to closings of existing branches;
examinations and challenges by tax authorities, and any unanticipated impact of the Tax Act;
changes in accounting standards, rules and interpretations such as the new CECL standard and related changes to address the impact of COVID-19, and the impact on the Company’s financial statements;
the ability of the Company to receive dividends from its subsidiaries;
uncertainty about the discontinued use of LIBOR and transition to an alternative rate;
a decrease in the Company’s capital ratios, including as a result of declines in the value of its loan portfolios, or otherwise;
legislative or regulatory changes, particularly changes in regulation of financial services companies and/or the products and services offered by financial services companies, including those changes that are in response to the COVID-19 pandemic, including without limitation the CARES Act, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act, and the rules and regulations that may be promulgated thereunder;
a lowering of our credit rating;
changes in U.S. monetary policy and changes to the Federal Reserve’s balance sheet, including changes in response to the COVID-19 pandemic or otherwise;
regulatory restrictions upon our ability to market our products to consumers and limitations on our ability to profitably operate our mortgage business;
increased costs of compliance, heightened regulatory capital requirements and other risks associated with changes in regulation and the regulatory environment;
the impact of heightened capital requirements;
increases in the Company’s FDIC insurance premiums, or the collection of special assessments by the FDIC;
delinquencies or fraud with respect to the Company’s premium finance business;
credit downgrades among commercial and life insurance providers that could negatively affect the value of collateral securing the Company’s premium finance loans;
the Company’s ability to comply with covenants under its credit facility; and
fluctuations in the stock market, which may have an adverse impact on the Company’s wealth management business and brokerage operation.

Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by the Company. Any such statement speaks only as of the date the statement was made or as of such date that may be referenced within the statement. The Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events after the date of the press release. Persons are advised, however, to consult further disclosures management makes on related subjects in its reports filed with the Securities and Exchange Commission and in its press releases.

CONFERENCE CALL, WEBCAST AND REPLAY

The Company will hold a conference call on Thursday, January 21, 2021 at 10:00 a.m. (Central Time) regarding fourth quarter and full year 2020 results. Individuals interested in listening should call (877) 363-5049 and enter Conference ID #9780585. A simultaneous audio-only webcast and replay of the conference call as well as an accompanying slide presentation may be accessed via the Company’s website at https://www.wintrust.com, Investor Relations, Investor News and Events, Presentations & Conference Calls. The text of the fourth quarter and full year 2020 earnings press release will be available on the home page of the Company’s website at https://www.wintrust.com and at the Investor Relations, Investor News and Events, Press Releases link on its website.

FOR MORE INFORMATION CONTACT:
Edward J. Wehmer, Founder & Chief Executive Officer
David A. Dykstra, Vice Chairman & Chief Operating Officer
(847) 939-9000
Web site address: www.wintrust.com

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Wintrust Financial Corporation Reports Fourth Quarter 2020 Net Income of $101.2 million and Full-Year 2020 Net Income of $293.0 million

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