WINTRUST FINANCIAL CORP (Form: 10-Q, Received: 08/09/2006 16:00:23)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2006

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 0-21923

WINTRUST FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)


Illinois		36-3873352

(State of incorporation or organization)		(I.R.S. Employer Identification No.)

727 North Bank Lane
Lake Forest, Illinois 60045

(Address of principal executive offices)

(847) 615-4096

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x Accelerated Filer o Non-Accelerated Filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock — no par value, 25,625,931 shares, as of August 4, 2006

TABLE OF CONTENTS


		Page
	PART I. — FINANCIAL INFORMATION

ITEM 1.	Financial Statements.		1-20

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.		21-51

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk.		52-54

ITEM 4.	Controls and Procedures.		55

	PART II. — OTHER INFORMATION

ITEM 1.	Legal Proceedings.	NA

ITEM 1A.	Risk Factors.		56

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		56

ITEM 3.	Defaults Upon Senior Securities.	NA

ITEM 4.	Submission of Matters to a Vote of Security Holders.		56-57

ITEM 5.	Other Information.	NA

ITEM 6.	Exhibits		57

	Signatures		58
Amended and Restated Articles of Incorporation
Amended and Restated By-laws
Employment Agreement with Thomas P. Zidar
302 Certification of Chief Executive Officer
302 Certification of Chief Financial Officer
Section 906 Certification

PART I

ITEM 1. FINANCIAL STATEMENTS

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION


	(Unaudited)						(Unaudited)
	June 30,			December 31,			June 30,
(In thousands)	2006			2005			2005

Assets
Cash and due from banks	$	164,396		$	158,136		$	212,419
Federal funds sold and securities purchased under resale agreements		106,588			183,229			355,382
Interest bearing deposits with banks		11,850			12,240			5,034
Available-for-sale securities, at fair value		1,952,433			1,799,384			924,616
Trading account securities		1,349			1,610			2,815
Brokerage customer receivables		31,293			27,900			29,212
Mortgage loans held-for-sale		112,955			85,985			142,798
Loans, net of unearned income		6,055,140			5,213,871			5,023,087
Less: Allowance for loan losses		44,596			40,283			39,722

Net loans		6,010,544			5,173,588			4,983,365
Premises and equipment, net		280,892			247,875			228,550
Accrued interest receivable and other assets		207,499			272,772			669,599
Goodwill		270,774			196,716			195,827
Other intangible assets, net		22,211			17,607			19,376

Total assets	$	9,172,784		$	8,177,042		$	7,768,993


Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing	$	686,869		$	620,091		$	638,843
Interest bearing		6,875,752			6,109,343			5,660,207

Total deposits		7,562,621			6,729,434			6,299,050

Notes payable		30,000			1,000			4,000
Federal Home Loan Bank advances		379,649			349,317			351,888
Other borrowings		80,097			95,796			152,401
Subordinated notes		83,000			50,000			50,000
Long-term debt — trust preferred securities		230,375			230,458			209,921
Accrued interest payable and other liabilities		85,239			93,126			104,680

Total liabilities		8,450,981			7,549,131			7,171,940


Shareholders’ equity:
Preferred stock		—			—			—
Common stock		25,619			23,941			23,568
Surplus		507,928			420,426			411,115
Common stock warrants		697			744			780
Retained earnings		235,453			201,133			165,602
Accumulated other comprehensive loss		(47,894	)		(18,333	)		(4,012	)

Total shareholders’ equity		721,803			627,911			597,053


Total liabilities and shareholders’ equity	$	9,172,784		$	8,177,042		$	7,768,993

See accompanying notes to unaudited consolidated financial statements.

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


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share data)	2006			2005			2006			2005

Interest income
Interest and fees on loans	$	109,420		$	80,890		$	206,071		$	153,169
Interest bearing deposits with banks		141			44			265			72
Federal funds sold and securities purchased under resale agreements		434			351			1,954			501
Securities		24,561			16,921			46,092			31,350
Trading account securities		17			24			23			46
Brokerage customer receivables		543			447			1,008			861

Total interest income		135,116			98,677			255,413			185,999

Interest expense
Interest on deposits		62,069			36,288			116,351			65,259
Interest on Federal Home Loan Bank advances		3,714			3,048			6,994			5,617
Interest on notes payable and other borrowings		2,687			905			3,341			2,684
Interest on subordinated notes		1,056			745			1,857			1,424
Interest on long-term debt — trust preferred securities		4,348			3,809			8,464			7,219

Total interest expense		73,874			44,795			137,007			82,203

Net interest income		61,242			53,882			118,406			103,796
Provision for credit losses		1,743			1,294			3,279			2,525

Net interest income after provision for credit losses		59,499			52,588			115,127			101,271

Non-interest income
Wealth management		7,531			7,817			17,668			15,761
Mortgage banking		5,860			5,555			10,970			12,083
Service charges on deposit accounts		1,746			1,594			3,444			2,933
Gain on sales of premium finance receivables		1,451			1,726			2,446			3,382
Administrative services		1,204			1,124			2,358			2,138
Gains (losses) on available-for-sale securities, net		(95	)		978			(15	)		978
Other		6,596			(2,253	)		16,147			3,646

Total non-interest income		24,293			16,541			53,018			40,921

Non-interest expense
Salaries and employee benefits		33,351			29,181			66,829			58,644
Equipment		3,293			2,977			6,467			5,726
Occupancy, net		4,845			3,862			9,513			7,701
Data processing		2,025			1,743			3,884			3,458
Advertising and marketing		1,249			1,216			2,369			2,210
Professional fees		1,682			1,505			3,118			2,974
Amortization of other intangible assets		823			869			1,566			1,625
Other		8,639			7,663			16,621			14,982

Total non-interest expense		55,907			49,016			110,367			97,320

Income before income taxes		27,885			20,113			57,778			44,872
Income tax expense		10,274			7,134			21,154			16,220

Net income	$	17,611		$	12,979		$	36,624		$	28,652


Net income per common share – Basic	$	0.71		$	0.55		$	1.50		$	1.26


Net income per common share – Diluted	$	0.69		$	0.53		$	1.45		$	1.20


Cash dividends declared per common share	$	—		$	—		$	0.14		$	0.12

Weighted average common shares outstanding		24,729			23,504			24,395			22,672
Dilutive potential common shares		894			1,125			917			1,166

Average common shares and dilutive common shares		25,623			24,629			25,312			23,838

See accompanying notes to unaudited consolidated financial statements.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)


															Accumulated
															Other
	Compre-								Common						Compre -			Total
	hensive			Common					Stock			Retained			hensive			Shareholders’
(In thousands)	Income			Stock		Surplus			Warrants			Earnings			Income (Loss)			Equity

Balance at December 31, 2004				$	21,729	$	319,147		$	828		$	139,566		$	(7,358	)	$	473,912

Comprehensive income:
Net income	$	28,652			—		—			—			28,652			—			28,652
Other comprehensive income, net of tax:

Unrealized gains on securities, net of reclassification adjustment		3,240			—		—			—			—			3,240			3,240
Unrealized gains on derivative instruments		106			—		—			—			—			106			106

Comprehensive income	$	31,998


Cash dividends declared					—		—			—			(2,616	)		—			(2,616	)

Common stock issued for:
New issuance, net of costs					1,000		54,872			—			—			—			55,872
Business combinations					598		29,834			—			—			—			30,432
Exercise of common stock warrants					3		136			(48	)		—			—			91
Director compensation plan					8		310			—			—			—			318
Employee stock purchase plan and exercises of stock options					211		5,984			—			—			—			6,195
Restricted stock awards					19		832			—			—			—			851

Balance at June 30, 2005				$	23,568	$	411,115		$	780		$	165,602		$	(4,012	)	$	597,053


Balance at December 31, 2005				$	23,941	$	420,426		$	744		$	201,133		$	(18,333	)	$	627,911

Comprehensive income:
Net income	$	36,624			—		—			—			36,624			—			36,624
Other comprehensive income, net of tax:
Unrealized losses on securities, net of reclassification adjustment		(29,561	)		—		—			—			—			(29,561	)		(29,561	)

Comprehensive income	$	7,063


Cash dividends declared					—		—			—			(3,373	)		—			(3,373	)

Cumulative effect of change in accounting for servicing rights					—		—			—			1,069			—			1,069

Stock-based compensation					—		11,084			—			—			—			11,084

Common stock issued for:
New issuance, net of costs					200		11,384			—			—			—			11,584
Business combinations					1,123		55,965			—			—			—			57,088
Exercise of common stock warrants					13		431			(47	)		—			—			397
Director compensation plan					13		569			—			—			—			582
Employee stock purchase plan and exercises of stock options					260		8,138			—			—			—			8,398
Restricted stock awards					69		(69	)		—			—			—			—

Balance at June 30, 2006				$	25,619	$	507,928		$	697		$	235,453		$	(47,894	)	$	721,803


	Six Months Ended June 30,
	2006			2005

Disclosure of reclassification amount and income tax impact:
Unrealized holding gains (losses) on available-for-sale securities arising during the period, net	$	(47,899	)	$	6,250
Unrealized holding gains on derivative instruments arising during the period, net		—			172
Less: Reclassification adjustment for gains (losses) included in net income, net		(15	)		978
Less: Income tax expense (benefit)		(18,323	)		2,098

Net unrealized gains (losses) on available-for-sale securities and derivative instruments	$	(29,561	)	$	3,346

See accompanying notes to unaudited consolidated financial statements.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Six Months Ended
	June 30,
(In thousands)	2006			2005

Operating Activities:
Net income	$	36,624		$	28,652
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		3,279			2,525
Depreciation and amortization		7,904			6,685
Share-based compensation expense		5,944			1,335
Tax benefit from stock-based compensation arrangements		3,278			2,572
Excess tax benefits from stock-based compensation arrangements		(2,780	)		—
Net amortization of premium on securities		143			2,856
Fair market value change of interest rate swaps		(7,591	)		5,719
Originations and purchases of mortgage loans held-for-sale		(912,080	)		(1,057,767	)
Proceeds from sales of mortgage loans held-for-sale		890,819			1,026,272
Gain on sales of premium finance receivables		(2,446	)		(3,382	)
Decrease in trading securities, net		261			784
Net (increase) decrease in brokerage customer receivables		(3,393	)		2,635
Gain on mortgage loans sold		(5,709	)		(6,374	)
(Gains) losses on available-for-sale securities, net		15			(978	)
(Gain) loss on sales of premises and equipment, net		(27	)		42
Decrease in accrued interest receivable and other assets, net		106,928			3,450
(Decrease) increase in accrued interest payable and other liabilities, net		(4,673	)		18,283

Net Cash Provided by Operating Activities		116,496			33,309


Investing Activities:
Proceeds from maturities of available-for-sale securities		423,454			63,004
Proceeds from sales of available-for-sale securities		86,480			485,719
Purchases of available-for-sale securities		(633,344	)		( 448,922	)
Proceeds from sales of premium finance receivables		202,882			284,415
Net cash paid for acquisitions		(51,282	)		(78,644	)
Net decrease in interest-bearing deposits with banks		590			15
Net increase in loans		(669,006	)		(536,558	)
Purchases of premises and equipment, net		(26,922	)		(21,451	)

Net Cash Used for Investing Activities		(667,148	)		(252,422	)


Financing Activities:
Increase in deposit accounts		410,263			607,645
Decrease in other borrowings, net		(18,499	)		(77,150	)
Increase (decrease) in notes payable, net		29,000			(2,000	)
Increase in Federal Home Loan Bank advances, net		18,000			25,300
Proceeds from issuance of subordinated note		25,000			—
Excess tax benefits from stock–based compensation arrangements		2,780			—
Issuance of common stock, net of issuance costs		11,584			55,872
Issuance of common shares resulting from exercise of stock options, employee stock purchase plan and conversion of common stock warrants		5,516			3,837
Dividends paid		(3,373	)		(2,616	)

Net Cash Provided by Financing Activities		480,271			610,888

Net Increase (Decrease) in Cash and Cash Equivalents		(70,381	)		391,775
Cash and Cash Equivalents at Beginning of Period		341,365			176,026

Cash and Cash Equivalents at End of Period	$	270,984		$	567,801

See accompanying notes to unaudited consolidated financial statements.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation

The consolidated financial statements of Wintrust Financial Corporation and Subsidiaries (“Wintrust” or “Company”) presented herein are unaudited, but in the opinion of management reflect all necessary adjustments of a normal or recurring nature for a fair presentation of results as of the dates and for the periods covered by the consolidated financial statements.

Wintrust is a financial holding company currently engaged in the business of providing traditional community banking services to customers in the Chicago metropolitan area and southern Wisconsin. Additionally, the Company operates various non-bank subsidiaries.

As of June 30, 2006, Wintrust had 15 wholly-owned bank subsidiaries (collectively, “Banks”), nine of which the Company started as de novo institutions, including Lake Forest Bank & Trust Company (“Lake Forest Bank”), Hinsdale Bank & Trust Company (“Hinsdale Bank”), North Shore Community Bank & Trust Company (“North Shore Bank”), Libertyville Bank & Trust Company (“Libertyville Bank”), Barrington Bank & Trust Company, N.A. (“Barrington Bank”), Crystal Lake Bank & Trust Company, N.A. (“Crystal Lake Bank”), Northbrook Bank & Trust Company (“Northbrook Bank”), Beverly Bank & Trust Company, N.A. (“Beverly Bank”) and Old Plank Trail Community Bank, N.A. (“Old Plank Trail Bank”). The Company acquired Advantage National Bank (“Advantage Bank”) in October 2003, Village Bank & Trust (“Village Bank”) in December 2003, Northview Bank and Trust (“Northview Bank”) in September 2004, Town Bank in October 2004, State Bank of The Lakes in January 2005, First Northwest Bank on March 31, 2005 and Hinsbrook Bank and Trust (“Hinsbrook Bank”) in May 2006. In December 2004, Northview Bank’s Wheaton branch became its main office, it was renamed Wheaton Bank & Trust (“Wheaton Bank”) and its two Northfield locations became branches of Northbrook Bank and its Mundelein location became a branch of Libertyville Bank. In May 2005, First Northwest Bank was merged into Village Bank.

The Company provides, on a national basis, loans to businesses to finance insurance premiums on their commercial insurance policies (“premium finance receivables”) through First Insurance Funding Corporation (“FIFC”). FIFC is a wholly-owned subsidiary of Crabtree Capital Corporation (“Crabtree”) which is a wholly-owned subsidiary of Lake Forest Bank.

Wintrust, through Tricom, Inc. of Milwaukee (“Tricom”), provides high-yielding short-term accounts receivable financing (“Tricom finance receivables”) and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, to the temporary staffing industry, with clients located throughout the United States. Tricom is a wholly-owned subsidiary of Hinsdale Bank.

The Company provides a full range of wealth management services through its trust, asset management and broker-dealer subsidiaries. Trust and investment services are provided at each of the Banks through the Company’s wholly-owned subsidiary, Wayne Hummer Trust Company, N.A. (“WHTC”), a de novo company started in 1998. Wayne Hummer Investments, LLC (“WHI”) is a broker-dealer providing a full range of private client and securities brokerage services to clients located primarily in the Midwest and is a wholly-owned subsidiary of North Shore Bank. Focused Investments, LLC (“Focused”) is a broker-dealer that provides a full range of investment services to individuals through a network of relationships with community-based financial institutions primarily in Illinois. Focused is a wholly-owned subsidiary of WHI. Wayne Hummer Asset Management Company (“WHAMC”) provides money management services and advisory services to individuals, institutions and municipal and tax-exempt organizations, in addition to portfolio management and financial supervision for a wide range of pension and profit-sharing plans. WHAMC is a wholly-owned subsidiary of Wintrust. WHI, WHAMC and Focused were acquired in 2002, and are collectively referred to as the “Wayne Hummer Companies”. In February 2003, the Company acquired Lake Forest Capital Management (“LFCM”), a registered investment advisor, which was merged into WHAMC.

In May 2004, the Company acquired SGB Corporation d/b/a WestAmerica Mortgage Company (“WestAmerica”) and its affiliate, Guardian Real Estate Services, Inc. (“Guardian”). WestAmerica engages primarily in the origination and purchase of residential mortgages for sale into the secondary market, and Guardian provides document preparation and other loan closing services to WestAmerica and a network of mortgage brokers. WestAmerica maintains principal origination offices in eleven states, including Illinois, and originates loans in other states through wholesale and correspondent offices. WestAmerica and Guardian are wholly-owned subsidiaries of Barrington Bank.

Wintrust Information Technology Services Company provides information technology support, item capture, imaging and statement preparation services to the Wintrust subsidiaries and is a wholly-owned subsidiary of Wintrust.

The accompanying consolidated financial statements are unaudited and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations or cash flows in accordance with generally accepted accounting principles. The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report and Form 10-K for the year ended December 31, 2005. Operating results reported for the three-month and year-to-date periods are not necessarily indicative of the results which may be expected for the entire year. Reclassifications of certain prior period amounts have been made to conform to the current period presentation.

The preparation of the financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities. Management believes that the estimates made are reasonable, however, changes in estimates may be required if economic or other conditions develop differently from management’s expectations. Certain policies and accounting principles inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Management views critical accounting policies to be those which are highly complex or dependent on subjective or complex judgments, estimates and assumptions, and where changes in those estimates and assumptions could have a significant impact on the financial statements. Management currently views the determination of the allowance for loan losses and the allowance for losses on lending-related commitments, the valuation of the retained interest in the premium finance receivables sold, the valuations required for impairment testing of goodwill, the valuation and accounting for derivative instruments and the accounting for income taxes as the areas that are most complex and require the most subjective and complex judgments and as such could be the most subject to revision as new information becomes available.

(2) Cash and Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, the Company considers cash and cash equivalents to include cash on hand, cash items in the process of collection, non-interest bearing amounts due from correspondent banks, federal funds sold and securities purchased under resale agreements with original maturities of three months or less.

(3) Available-for-sale Securities

The following table is a summary of the available-for-sale securities portfolio as of the dates shown:


	June 30, 2006				December 31, 2005				June 30, 2005
	Amortized		Fair		Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value		Cost		Value

U.S. Treasury	$	36,068	$	32,912	$	36,577	$	34,586	$	38,586	$	38,050
U.S. Government agencies		680,153		663,445		724,273		714,715		438,077		435,055
Municipal		53,660		52,568		48,853		48,397		52,229		52,073
Corporate notes and other debt		109,317		105,223		8,467		8,358		8,454		8,347
Mortgage-backed		1,049,603		996,787		891,799		874,067		296,371		293,534
Federal Reserve/FHLB stock and other equity securities		101,203		101,498		119,103		119,261		97,427		97,557

Total available-for-sale securities	$	2,030,004	$	1,952,433	$	1,829,072	$	1,799,384	$	931,144	$	924,616

The increase in Corporate notes and other debt as of June 30, 2006 compared to December 31, 2005 and June 30, 2005 is related to purchases made with available liquidity which resulted from lower than expected loan growth in recent quarters. In general, the available-for-sale securities portfolio consists of fixed-rate investments with temporary impairment resulting from increases in interest rates since the purchase of the investments. The Company performed an analysis on continuous unrealized losses existing for greater than twelve months and determined there was not a significant change since December 31, 2005. The Company has the ability to hold these investments until such time as the values recover or maturity.

(4) Loans

The following table is a summary of the loan portfolio as of the dates shown:


	June 30,			December 31,			June 30,
(Dollars in thousands)	2006			2005			2005

Balance:
Commercial and commercial real estate	$	3,798,303		$	3,161,734		$	2,978,816
Home equity		643,859			624,337			634,607
Residential real estate		295,242			275,729			274,459
Premium finance receivables		935,635			814,681			793,153
Indirect consumer loans		235,025			203,002			192,311
Tricom finance receivables		36,877			49,453			39,886
Other loans		110,199			84,935			109,855

Total loans, net of unearned income	$	6,055,140		$	5,213,871		$	5,023,087


Mix:
Commercial and commercial real estate		62.7	%		60.6	%		59.3	%
Home equity		10.6			12.0			12.6
Residential real estate		4.9			5.3			5.5
Premium finance receivables		15.5			15.6			15.8
Indirect consumer loans		3.9			3.9			3.8
Tricom finance receivables		0.6			1.0			0.8
Other loans		1.8			1.6			2.2

Total loans, net of unearned income		100.0	%		100.0	%		100.0	%

Indirect consumer loans include auto, boat, snowmobile and other indirect consumer loans. Premium finance receivables are recorded net of unearned income of $20.7 million at June 30, 2006, $16.0 million at December 31, 2005 and $18.8 million at June 30, 2005. Total loans include net deferred loan fees and costs and purchase accounting adjustments totaling $(2.1) million at June 30, 2006, $2.6 million at December 31, 2005 and $2.3 million at June 30, 2005.

(5) Deposits

The following table is a summary of deposits as of the dates shown:


	June 30,			December 31,			June 30,
(Dollars in thousands)	2006			2005			2005

Balance:
Non-interest bearing	$	686,869		$	620,091		$	638,843
NOW accounts		799,685			704,640			729,083
Wealth management deposits		436,196			421,301			404,721
Money market accounts		676,352			610,554			677,180
Savings accounts		318,694			308,323			309,859
Time certificates of deposit		4,644,825			4,064,525			3,539,364

Total deposits	$	7,562,621		$	6,729,434		$	6,299,050


Mix:
Non-interest bearing		9.1	%		9.2	%		10.1	%
NOW accounts		10.6			10.5			11.6
Wealth management deposits		5.8			6.3			6.4
Money market accounts		8.9			9.0			10.8
Savings accounts		4.2			4.6			4.9
Time certificates of deposit		61.4			60.4			56.2

Total deposits		100.0	%		100.0	%		100.0	%

Wealth management deposits represent FDIC-insured deposits at the Banks from brokerage customers of WHI and trust and asset management customers of WHTC.

(6) Notes Payable, Federal Home Loan Bank Advances, Other Borrowings and Subordinated Notes:

The following table is a summary of notes payable, Federal Home Loan Bank advances, other borrowings and subordinated notes as of the dates shown:


	June 30,		December 31,		June 30,
(Dollars in thousands)	2006		2005		2005

Notes payable	$	30,000	$	1,000	$	4,000
Federal Home Loan Bank advances		379,649		349,317		351,888

Other borrowings:
Federal funds purchased		—		235		1,923
Securities sold under repurchase agreements		78,168		93,312		148,203
Other		1,929		2,249		2,275

Total other borrowings		80,097		95,796		152,401


Subordinated notes		83,000		50,000		50,000


Total notes payable, Federal Home Loan Bank advances, other borrowings and subordinated notes	$	572,746	$	496,113	$	558,289

The notes payable balance is $30.0 million. The increase in notes payable since December 31, 2005 is attributable to $22.0 million used to meet the capitalization requirements for the Banks and the remainder for general corporate purposes. The total amount of the agreement is $51.0 million consisting of a $50 million revolving note, which matures on September 1, 2006 pursuant to the loan agreement and $1.0 million note that matures on June 1, 2015. The loan agreement provides the Company with borrowing capacity to support further growth, including possible acquisitions, and other corporate purposes. Interest is calculated, at the Company’s option, at a floating rate equal to either: (1) LIBOR plus 140 basis points or (2) the greater of the lender’s prime rate or the Federal Funds Rate plus 50 basis points. The loan agreement is secured by the stock of the Company’s bank subsidiaries.

Federal Home Loan Bank advances consist of fixed rate obligations of the Banks and are collateralized by qualifying residential real estate loans.

At June 30, 2006, securities sold under repurchase agreements represent $78.0 million of customer balances in sweep accounts in connection with master repurchase agreements at the Banks and $209,000 of short-term borrowings from brokers.

At June 30, 2006, other includes a mortgage that matures on May 1, 2010, related to the Company’s Northfield banking office.

The subordinated notes represent three $25.0 million notes, issued in October 2002, April 2003 and October 2005 (funded in May 2006) and two notes totaling $8.0 million assumed in connection with the acquisition of Hinsbrook Bank. The $25.0 million notes require annual principal payments of $5.0 million beginning in the sixth year, with final maturities in the tenth year. The Company may redeem the subordinated notes at any time prior to maturity. The interest rate on each note is equal to LIBOR plus 160 basis points. The Hinsbrook Bank subordinated notes mature in 2012 and 2013, are redeemable at any time prior to their maturity dates and have interest rates equal to prime plus 225 basis points.

(7) Long-term Debt – Trust Preferred Securities

As of June 30, 2006, the Company owned 100% of the Common Securities of nine trusts, Wintrust Capital Trust I, Wintrust Capital Trust III, Wintrust Statutory Trust IV, Wintrust Statutory Trust V, Wintrust Capital Trust VII, Wintrust Capital Trust VIII, Northview Capital Trust I, Town Bankshares Capital Trust I, and First Northwest Capital Trust I (the “Trusts”) set up to provide long-term financing. The Northview, Town and First Northwest capital trusts were acquired as part of the acquisitions of Northview Financial Corporation, Town Bankshares, Ltd., and First Northwest Bancorp, Inc., respectively. The Trusts were formed for purposes of issuing Trust Preferred Securities to third-party investors and investing the proceeds from the issuance of the Trust Preferred Securities and Common Securities solely in Subordinated Debentures (“Debentures”) issued by the Company (or assumed by the Company in connection with an acquisition), with the same maturities and interest rates as the Trust Preferred Securities. The Debentures are the sole assets of the Trusts. In each Trust the Common Securities represent approximately 3% of the Debentures and the Trust Preferred Securities represent approximately 97% of the Debentures.

The Trusts are reported in the Company’s consolidated financial statements as unconsolidated subsidiaries. Accordingly, the Debentures, which include the Company’s ownership interest in the Common Securities of the Trusts, are reflected as “Long-term debt – trust preferred securities” and the Common Securities are included in available-for-sale securities in the Company’s Consolidated Statements of Condition.

The following table provides a summary of the Company’s Long-term debt — trust preferred securities as of June 30, 2006. The Debentures represent the par value of the obligations owed to the Trusts and basis adjustments for unamortized fair value adjustments recognized at the respective acquisition dates for the Northview, Town and First Northwest obligations.

Earliest

Trust Preferred

Rate

Rate at

Issue

Maturity

Redemption

(Dollars in thousands)

Securities

Debentures

Structure

6/30/2006

Date

Wintrust Capital Trust I

31,050

32,010

Fixed

9.00%

09/1998

09/2028

09/2003

Wintrust Capital Trust III

25,000

25,774

L+3.25

8.32%

04/2003

04/2033

04/2008

Wintrust Statutory Trust IV

20,000

20,619

L+2.80

8.30%

12/2003

12/2033

12/2008

Wintrust Statutory Trust V

40,000

41,238

L+2.60

8.10%

05/2004

05/2034

06/2009

Wintrust Capital Trust VII

50,000

51,550

L+1.95

7.28%

12/2004

03/2035

03/2010

Wintrust Capital Trust VIII

40,000

41,238

L+1.45

6.95%

08/2005

09/2035

09/2010

Northview Capital Trust I

6,000

6,305

Fixed

6.35%

08/2003

11/2033

08/2008

Town Bankshares Capital Trust I

6,000

6,333

L+3.00

8.15%

08/2003

11/2033

08/2008

First Northwest Capital Trust I

5,000

5,308

L+3.00

8.50%

05/2004

05/2034

05/2009

Total

230,375

The interest rates on the variable rate debentures are based on the three-month LIBOR rate and reset on a quarterly basis. The interest rate on the Northview Capital Trust I changes to a variable rate equal to three-month LIBOR plus 3.00% effective February 8, 2008. Distributions on all issues are payable on a quarterly basis. See Note 15 for discussion on the redemption of the 9.0% Cumulative Trust Preferred Securities (the “Preferred Securities”) issued by Wintrust Capital Trust I.

The Company has guaranteed the payment of distributions and payments upon liquidation or redemption of the Trust Preferred Securities, in each case to the extent of funds held by the Trusts. The Company and the Trusts believe that, taken together, the obligations of the Company under the guarantees, the Debentures, and other related agreements provide, in the aggregate, a full, irrevocable and unconditional guarantee, on a subordinated basis, of all of the obligations of the Trusts under the Trust Preferred Securities. Subject to certain limitations, the Company has the right to defer the payment of interest on the Debentures at any time, or from time to time, for a period not to exceed 20 consecutive quarters. The Trust Preferred Securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at maturity or their earlier redemption. The Debentures are redeemable in whole or in part prior to maturity at any time after the dates shown in the table, and earlier at the discretion of the Company if certain conditions are met, and, in any event, only after the Company has obtained Federal Reserve approval, if then required under applicable guidelines or regulations.

The Trust Preferred Securities, subject to certain limitations, qualify as Tier 1 capital of the Company for regulatory purposes. On February 28, 2005, the Federal Reserve issued a final rule that retains Tier 1 capital treatment for trust preferred securities but with stricter limits. Under the new rule, which is effective on March 31, 2009, and has a transition period until then, the aggregate amount of the trust preferred securities and certain other capital elements is limited to 25%

of Tier 1 capital elements (including trust preferred securities), net of goodwill less any associated deferred tax liability. The amount of trust preferred securities and certain other capital elements in excess of the limit could be included in Tier 2 capital, subject to restrictions. Applying the final rule at June 30, 2006, the Company would still be considered well-capitalized under regulatory capital guidelines.

(8) Segment Information

The segment financial information provided in the following tables has been derived from the internal profitability reporting system used by management to monitor and manage the financial performance of the Company. The Company evaluates segment performance based on after-tax profit or loss and other appropriate profitability measures common to each segment. Certain indirect expenses have been allocated based on actual volume measurements and other criteria, as appropriate. Inter-segment revenue and transfers are generally accounted for at current market prices. The net interest income and segment profit of the banking segment includes income and related interest costs from portfolio loans that were purchased from the premium finance segment. For purposes of internal segment profitability analysis, management reviews the results of its premium finance segment as if all loans originated and sold to the banking segment were retained within that segment’s operations, thereby causing inter-segment eliminations. Similarly, for purposes of analyzing the contribution from the wealth management segment, management allocates a portion of the net interest income earned by the Banking segment on deposits balances of customers of the wealth management segment to the wealth management segment. (See “Wealth management deposits” discussion in Deposits section of this report for more information on these deposits.) The following table presents a summary of certain operating information for each reportable segment for the three months ended for the period shown:


	Three Months Ended
	June 30,						$ Change in			% Change in
(Dollars in thousands)	2006			2005			Contribution			Contribution
Net interest income:
Banking	$	60,147		$	52,458		$	7,689			14.7	%
Premium finance		10,014			10,160			(146	)		(1.4	)
Tricom		934			987			(53	)		(5.4	)
Wealth management		272			418			(146	)		(34.9	)
Parent and inter-segment eliminations		(10,125	)		(10,141	)		16			0.2

Total net interest income	$	61,242		$	53,882		$	7,360			13.7	%


Non-interest income:
Banking	$	10,296		$	12,305		$	(2,009	)		(16.3	)%
Premium finance		1,451			1,881			(430	)		(22.9	)
Tricom		1,204			1,124			80			7.1
Wealth management		8,866			9,291			(425	)		(4.6	)
Parent and inter-segment eliminations		2,476			(8,060	)		10,536			130.7

Total non-interest income	$	24,293		$	16,541		$	7,752			46.9	%


Segment profit (loss):
Banking	$	16,899		$	17,378		$	(479	)		(2.8	)%
Premium finance		5,035			5,619			(584	)		(10.4	)
Tricom		453			407			46			11.3
Wealth management		(433	)		(264	)		(169	)		(64.0	)
Parent and inter-segment eliminations		(4,343	)		(10,161	)		5,818			57.3

Total segment profit	$	17,611		$	12,979		$	4,632			35.7	%


Segment assets:
Banking	$	9,103,871		$	7,613,019		$	1,490,852			19.6	%
Premium finance		959,403			809,976			149,427			18.4
Tricom		50,938			54,523			(3,585	)		(6.6	)
Wealth management		65,235			65,154			81			0.1
Parent and inter-segment eliminations		(1,006,663	)		(773,679	)		(232,984	)		30.1

Total segment assets	$	9,172,784		$	7,768,993		$	1,403,791			18.1	%

The following table presents a summary of certain operating information for each reportable segment for six months ended for the period shown:


	Six Months Ended
	June 30,						$ Change in			% Change in
(Dollars in thousands)	2006			2005			Contribution			Contribution
Net interest income:
Banking	$	116,382		$	100,403		$	15,979			15.9	%
Premium finance		19,644			21,087			(1,443	)		(6.8	)
Tricom		1,853			1,929			(76	)		(3.9	)
Wealth management		641			1,064			(423	)		(39.8	)
Parent and inter-segment eliminations		(20,114	)		(20,687	)		573			2.8

Total net interest income	$	118,406		$	103,796		$	14,610			14.1	%


Non-interest income:
Banking	$	20,794		$	24,429		$	(3,635	)		(14.9	)%
Premium finance		2,446			3,692			(1,246	)		(33.7	)
Tricom		2,358			2,139			219			10.2
Wealth management		20,602			18,107			2,495			13.8
Parent and inter-segment eliminations		6,818			(7,446	)		14,264			191.6

Total non-interest income	$	53,018		$	40,921		$	12,097			29.6	%


Segment profit (loss):
Banking	$	33,098		$	32,521		$	577			1.8	%
Premium finance		9,684			11,643			(1,959	)		(16.8	)
Tricom		825			801			24			3.0
Wealth management		654			(688	)		1,342			195.1
Parent and inter-segment eliminations		(7,637	)		(15,625	)		7,988			51.1

Total segment profit	$	36,624		$	28,652		$	7,972			27.8	%

(9) Derivative Financial Instruments

Management uses derivative financial instruments to protect against the risk of interest rate movements on the value of certain assets and liabilities and on future cash flows. The instruments that have been used by the Company include interest rate swaps and interest rate caps with indices that relate to the pricing of specific liabilities and covered call and put options that relate to specific investment securities. In addition, interest rate lock commitments provided to customers for the origination of mortgage loans that will be sold into the secondary market as well as forward agreements the Company enters into to sell such loans to protect itself against adverse changes in interest rates are deemed to be derivative instruments.

Derivative instruments have inherent risks, primarily market risk and credit risk. Market risk is associated with changes in interest rates and credit risk relates to the risk that the counterparty will fail to perform according to the terms of the agreement. The amounts potentially subject to market and credit risks are the streams of interest payments under the contracts and the market value of the derivative instrument which is determined based on the interaction of the notional amount of the contract with the underlying, and not the notional principal amounts used to express the volume of the transactions. Management monitors the market risk and credit risk associated with derivative financial instruments as part of its overall Asset/Liability management process.

In accordance with SFAS 133, the Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Derivative financial instruments are included in other assets or other liabilities, as appropriate, on the Consolidated Statements of Condition. Changes in the fair value of derivative financial instruments are either recognized periodically in income or in shareholders’ equity as a component of other comprehensive income depending on whether the derivative financial instrument qualifies for hedge accounting, and if so, whether it qualifies as a fair value hedge or cash flow hedge. Generally, changes in fair values of derivatives accounted for as fair value hedges are recorded in income in the same period and in the same income statement line as changes in the fair values of the hedged items that relate to the hedged risk(s). Changes in fair values of derivative financial instruments accounted for as cash flow hedges, to the extent they are effective hedges, are recorded as a component of other comprehensive income, net of deferred taxes. Changes in fair values of derivative financial instruments not qualifying as hedges pursuant to SFAS 133 are reported in non-interest income. Derivative contracts are valued using the average fair values provided by the respective counterparties as well as two independent sources.

Interest Rate Swaps

The tables below identify the Company’s interest rate swaps at June 30, 2006 and December 31, 2005, which were entered into to economically hedge certain interest-bearing liabilities (dollars in thousands).

June 30, 2006

Issue

Notional

Fair

Receive

Pay

Maturity

Counterparty

Date

Amount

Value

Rate

Date

Call Option

Pay fixed, receive variable:

February 2005

25,000

807

8.32

6.71

April 2033

April 2008

February 2005

20,000

623

8.30

6.40

December 2033

December 2008

February 2005

40,000

1,343

8.10

6.27

May 2034

June 2009

February 2005

50,000

1,949

7.28

5.68

March 2035

March 2010

November 2002

25,000

1,290

5.23

4.23

October 2012

None

August 2005

40,000

1,604

6.95

5.27

September 2035

September 2010

Total

200,000

7,616

Receive fixed, pay variable:

November 2002

31,050

(1,766

)

9.00

8.36

September 2028

Any time

Total

231,050

5,850


December 31, 2005
Issue	Notional		Fair			Receive			Pay			Maturity	Counterparty
Date	Amount		Value			Rate			Rate			Date	Call Option


*Pay fixed, receive variable:*
February 2005	$	25,000	$	(75	)		7.40	%		6.71	%	April 2033	April 2008
February 2005		20,000		(362	)		7.33	%		6.40	%	December 2033	December 2008
February 2005		40,000		(264	)		7.13	%		6.27	%	May 2034	June 2009
February 2005		50,000		(671	)		6.44	%		5.68	%	March 2035	March 2010
November 2002		25,000		598			4.41	%		4.23	%	October 2012	None
August 2005		40,000		(664	)		5.98	%		5.27	%	September 2035	September 2010

Total		200,000		(1,438	)


*Receive fixed, pay variable:*
November 2002		31,050		(371	)		9.00	%		6.35	%	September 2028	Any time


Total	$	231,050	$	(1,809	)

The Company does not enter into derivatives for purely speculative purposes. These interest rate swaps were entered into to economically hedge certain funding liabilities and were not accounted for as hedges pursuant to the requirements of SFAS 133. The changes in fair value as well as the quarterly cash settlements are recognized in non-interest income. In the second quarter of 2006, the Company recognized $3.3 million of gains, compared to $6.8 million of losses in the second quarter of 2005. These swaps resulted in $8.8 million in gains and $5.7 million in losses for the first six months of 2006 and 2005, respectively. The Company terminated its position in all of these interest rate swaps in July 2006 at an aggregate fair value that approximated the aggregate fair value as of June 30, 2006.

The Company’s banking subsidiaries sometimes enter into interest rate swaps to change a specific loan yield from fixed to variable or vice versa. As of June 30, 2006, these swaps had an aggregate notional value of $12.3 million, aggregate positive fair values of $114,000 and aggregate negative fair values of $112,000. These interest rate swaps are not reflected in the preceding table.

Mortgage Banking Derivatives

The Company’s mortgage banking derivatives have not been designated in SFAS 133 hedge relationships. These derivatives include commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of residential mortgage loans. It is the Company’s practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates on its commitments to fund the loans as well as on its portfolio of mortgage loans held-for-sale. At June 30, 2006, the Company had approximately $148 million of interest rate lock commitments and $257 million of forward commitments for the future delivery of residential mortgage loans. The estimated fair values of these mortgage banking derivatives are reflected by a derivative asset of $642,000 and a derivative liability of $439,000. The fair values were estimated based on changes in mortgage rates from the dates of the commitments. Changes in the fair value of these mortgage banking derivatives are included in mortgage banking revenue.

Other Derivatives

The Company has also used interest rate caps to hedge cash flow variability of certain deposit products. However, no interest rate cap contracts were entered into in 2005 or in 2006 to date, and the Company had no interest rate cap contracts outstanding at June 30, 2006, December 31, 2005 or June 30, 2005.

Periodically, the Company will sell options to a bank or dealer for the right to purchase certain securities held within the Banks’ investment portfolios (covered call options). These option transactions are designed primarily to increase the total return associated with the investment securities portfolio. These options do not qualify as hedges pursuant to SFAS 133, and accordingly, changes in fair values of these contracts are recognized as other non-interest income. The Company recognized premium income from these call option transactions of $684,000 and $2.6 million in the second quarters of 2006 and 2005, respectively and $2.5 million and $5.4 million for the first six months of 2006 and 2005, respectively. There were no covered call options outstanding as of June 30, 2006, December 31, 2005 or June 30, 2005.

(10) Business Combinations

The Company completed one business combination in the second quarter of 2006 and two business combinations in the first quarter of 2005. All were accounted for under the purchase method of accounting; thus the results of operations prior to their respective dates were not included in the accompanying consolidated financial statements. Goodwill, core deposit intangibles and other fair value purchase accounting adjustments were recorded upon the completion of each acquisition.

On May 31, 2006, Wintrust completed the acquisition of Hinsbrook Bancshares, Inc. (“HBI”) and its wholly-owned subsidiary, Hinsbrook Bank & Trust. HBI was acquired for a total purchase price of $115.1 million, consisting of $58.2 million cash, the issuance of 1,120,033 shares of Wintrust’s common stock (then valued at $56.8 million) and vested stock options valued at $65,000. HBI’s results of operations have been included in Wintrust’s results of operations since June 1, 2006. Certain purchase price allocations, such as the core deposit intangibles valuation, are preliminary. The final allocation is not expected to result in material changes.

On March 31, 2005, Wintrust completed the acquisition of First Northwest Bancorp, Inc. (“FNBI”) and its wholly-owned subsidiary, First Northwest Bank. FNBI was acquired for a total purchase price of $44.7 million, consisting of $14.5 million cash, the issuance of 595,123 shares of Wintrust’s common stock (then valued at $30.0 million) and vested stock options valued at $238,000. FNBI’s results of operations have been included in Wintrust’s results of operations since April 1, 2005. In May 2005, First Northwest Bank was merged into Village Bank.

In January 2005, Wintrust completed the acquisition of Antioch Holding Company (“Antioch”) and its wholly-owned subsidiary, State Bank of The Lakes. Antioch was acquired for a total purchase price of $95.4 million of cash. Antioch’s results of operations have been included in Wintrust’s consolidated financial statements since January 1, 2005, the effective date of the acquisition.

(11) Goodwill and Other Intangible Assets

A summary of the Company’s goodwill assets by business segment is presented in the following table:


	January 1,		Goodwill		Impairment		June 30,
(Dollars in thousands)	2006		Acquired		Losses		2006
Banking	$	173,640	$	74,002	$	—	$	247,642
Premium finance		—		—		—		—
Tricom		8,958		—		—		8,958
Wealth management		14,118		56		—		14,174
Parent and other		—		—		—		—

Total	$	196,716	$	74,058	$	—	$	270,774

The increase in the Banking segment’s goodwill in the first six months of 2006 primarily relates to $73.8 million recorded in connection with the acquisition of Hinsbrook Bank. The remaining increase relates to contingent consideration earned by the former owners of Guardian as a result of attaining certain performance measures pursuant to the terms of the Guardian purchase agreement as well as adjustments of prior estimates of fair values associated with other Bank acquisitions. Wintrust could pay additional consideration pursuant to the Guardian transaction through June 2009.

The increase in goodwill in the wealth management segment represents additional contingent consideration earned by the former owners of LFCM as a result of attaining certain performance measures pursuant to the terms of the LFCM purchase agreement. Wintrust could pay additional consideration pursuant to this transaction through January 2007. LFCM was merged into WHAMCO.

A summary of finite-lived intangible assets as of June 30, 2006, December 31, 2005 and June 30, 2005 and the expected amortization as of June 30, 2006 is as follows (in thousands):


	June 30,			December 31,			June 30,
	2006			2005			2005
Wealth management segment:
Customer list intangibles
Gross carrying amount	$	3,252			3,252			3,252
Accumulated amortization		(2,270	)		(2,071	)		(1,845	)

Net carrying amount		982			1,181			1,407


Banking segment:
Core deposit intangibles
Gross carrying amount		26,158			19,988			19,988
Accumulated amortization		(4,929	)		(3,562	)		(2,019	)

Net carrying amount		21,229			16,426			17,969


Total other intangible assets, net	$	22,211			17,607			19,376


Estimated amortization
Actual in 6 months ended June 30, 2006	$	1,566
Estimated remaining in 2006		1,985
Estimated – 2007		3,287
Estimated – 2008		2,732
Estimated – 2009		2,444
Estimated – 2010		2,263

The customer list intangibles recognized in connection with the acquisitions of LFCM in 2003 and WHAMC in 2002 are being amortized over seven-year periods on an accelerated basis. The core deposit intangibles recognized in connection with the Company’s seven bank acquisitions since 2003 are being amortized over ten-year periods on an accelerated basis. Amortization expense associated with finite-lived intangibles totaled approximately $1.6 million for each of the six months ended June 30, 2006 and 2005.

(12) Stock-Based Compensation Plans

On January 1, 2006, the Company adopted provisions of FASB Statement No. 123(R), “Share-Based Payment” (“SFAS 123R”), using the modified prospective transition method. Under this transition method, compensation cost is recognized in the financial statements beginning January 1, 2006, based on the requirements of SFAS 123R for all share-based payments granted after that date and for all share-based payments granted prior to, but not yet vested as of December 31, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, “Accounting for Stock-Based Compensation.” Results for prior periods have not been restated.

Prior to 2006, the Company accounted for stock-based compensation using the intrinsic value method set forth in APB 25, as permitted by SFAS 123. The intrinsic value method provides that compensation expense for employee stock options is generally not recognized if the exercise price of the option equals or exceeds the fair value of the stock on the date of grant. As a result, for periods prior to 2006, compensation expense was generally not recognized in the Consolidated Statements of Income for stock options. Compensation expense has always been recognized for restricted share awards ratably over the period of service, usually the restricted period, based on the fair value of the stock on the date of grant. Compensation cost charged against income related to restricted share awards was $1.5 million ($955,000 net of tax) and $1.0 million ($638,000 net of tax) for the second quarters of 2006 and 2005, respectively. On a year-to-date basis, compensation cost charged against income related to restricted share awards was $3.1 million ($1.9 million net of tax) and $1.8 million ($1.1 million net of tax) for 2006 and 2005, respectively. On January 1, 2006, the Company reclassified $5.2 million of liabilities related to previously recognized compensation cost for restricted share awards that had not been vested as of that date to surplus as these awards represent equity awards as defined in SFAS 123R.

As a result of adopting SFAS 123R on January 1, 2006, the Company’s income before income taxes and net income for the three months ended June 30, 2006, are $1.4 million and $878,000 lower, respectively, than if it had continued to account for share-based compensation under APB 25. On a year-to-date basis, the Company’s income before income taxes and net income are $2.9 million and $1.8 million lower, respectively, than if it had continued to account for share-based compensation under APB 25. Basic and diluted EPS for the three months ended June 30, 2006, are $0.04 and $0.03 lower, respectively, than if the Company had continued to account for share-based payments under APB 25. On a year-to-date basis, basic and diluted EPS are both $0.07 lower.

SFAS 123R requires the recognition of stock based compensation for the number of awards that are ultimately expected to vest. As a result, recognized stock compensation expense was reduced for estimated forfeitures prior to vesting primarily based on historical annual forfeiture rates of approximately 8.4%. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances. Prior to January 1, 2006, actual forfeitures were accounted for as they occurred for purposes of required pro forma stock compensation disclosures.

The following table reflects the Company’s pro forma net income and earnings per share as if compensation expense for the Company’s stock options, determined based on the fair value at the date of grant consistent with the method of SFAS 123, had been included in the determination of the Company’s net income for the three and six months ended June 30, 2005.


	Three			Six
	Months Ended			Months Ended
(Dollars in thousands, except share data)	June 30, 2005			June 30, 2005
Net income
As reported	$	12,979		$	28,652
Compensation cost of stock options based on fair value, net of related tax effect		(771	)		(1,500	)

Pro forma	$	12,208		$	27,152


Earnings per share – Basic
As reported	$	0.55		$	1.26
Compensation cost of stock options based on fair value, net of related tax effect		(0.03	)		(0.07	)

Pro forma	$	0.52		$	1.19


Earnings per share – Diluted
As reported	$	0.53		$	1.20
Compensation cost of stock options based on fair value, net of related tax effect		(0.03	)		(0.06	)

Pro forma	$	0.50		$	1.14

The Company estimates the fair value of stock options at the date of grant using a Black-Scholes option-pricing model that utilizes the assumptions outlined in the following table. These assumptions are consistent with the provisions of SFAS 123R and the Company’s prior period pro forma disclosures of net income and earnings per share, including stock option expense. Option-pricing models require the input of highly subjective assumptions and are sensitive to changes in the option’s expected life and the price volatility of the underlying stock, which can materially affect the fair value estimate. Expected life is based on historical exercise and termination behavior, and expected stock price volatility is based on historical volatility of the Company’s common stock, which correlates with the expected life of the options. The risk-free interest rate is based on the U.S. Treasury curve. Management reviews and adjusts the assumptions used to calculate the fair value of an option on a periodic basis to better reflect expected trends.


	For the Six Months Ended
	June 30, 2006			June 30, 2005
Expected dividend yield		0.5	%		0.5	%
Expected volatility		24.2	%		23.6	%
Risk-free rate		4.64	%		4.20	%
Expected option life (in years)		8.22			8.50

In general, the Company awards stock based compensation in the form of stock options and restricted shares, both pursuant to the Wintrust Financial Corporation 1997 Stock Incentive Plan (“the Plan”). A summary of option activity under the Plan as of June 30, 2006, and changes for the six months then ended is presented below:


				Weighted		Remaining		Intrinsic
	Common			Average		Contractual		Value ⁽²⁾
Stock Options	Shares			Strike Price		Term ⁽¹⁾		($000)

Outstanding at January 1, 2006		3,019,482		$	29.63
Granted		166,600			52.07
Exercised		(242,174	)		16.77
Forfeited or canceled		(29,849	)		49.50

Outstanding at June 30, 2006		2,914,059		$	31.76		6.03	$	58,457


Vested or expected to vest at June 30, 2006		2,776,229		$	31.01		6.01	$	57,639


Exercisable at June 30, 2006		1,745,975		$	21.41		4.62	$	51,974


⁽¹⁾		Represents the weighted average contractual life remaining in years.

⁽²⁾		Aggregate intrinsic value represents the total pretax intrinsic value (i.e., the difference between the Company’s average of the high and low stock price on the last trading day of the second quarter of 2006 and the option exercise price, multiplied by the number of shares) that would have been received by the option holders if they had exercised their options on June 30, 2006. This amount will change based on the fair market value of the Company’s stock.

The weighted average per share grant date fair value of options granted during the six months ended June 30, 2006 and 2005 was $20.07 and $20.27 respectively. The total intrinsic value of options exercised during the six months ended June 30, 2006 and 2005, was $8.9 million and $7.0 million, respectively.

A summary of the restricted share award activity under the Plan as of June 30, 2006, and changes for the six months then ended is presented below:


				Weighted
				Average
	Common			Grant-Date
Restricted Shares	Shares			Fair Value

Outstanding at January 1, 2006		206,157		$	53.55
Granted		145,403			51.85
Vested (shares issued)		(69,487	)		53.63
Forfeited		(1,709	)		51.89

Outstanding at June 30, 2006		280,364		$	52.66

The fair value of restricted shares is determined based on the average of the high and low trading prices on the grant date. The weighted-average grant-date fair value of shares granted during the six months ended June 30, 2006 and 2005 was $51.85 and $54.00, respectively.

As of June 30, 2006, there was $26.3 million of total unrecognized compensation cost related to non-vested share based arrangements under the Plan. That cost is expected to be recognized over a weighted average period of 1.7 years. The total fair value of shares vested during the six months ended June 30, 2006 and 2005, was $6.2 million and $2.3 million, respectively.

Cash received from option exercises under the Plan for the six months ended June 30, 2006 and 2005 was $4.1 million and $3.0 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $3.3 million and $2.4 million for the six months ended June 30, 2006 and 2005, respectively.

The Company issues new shares to satisfy option exercises and vesting of restricted shares.

(13) Earnings Per Share

The following table shows the computation of basic and diluted EPS for the periods indicated:


	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
(In thousands, except per share data)	2006		2005		2006		2005
Net income	$	17,611	$	12,979	$	36,624	$	28,652


Average common shares outstanding		24,729		23,504		24,395		22,672
Effect of dilutive potential common shares		894		1,125		917		1,166

Weighted average common shares and effect of dilutive potential common shares		25,623		24,629		25,312		23,838


Net income per common share:
Basic	$	0.71	$	0.55	$	1.50	$	1.26

Diluted	$	0.69	$	0.53	$	1.45	$	1.20

The effect of dilutive common shares outstanding results from stock options, restricted stock unit awards, stock warrants, and shares to be issued under the Employee Stock Purchase Plan and the Directors Deferred Fee and Stock Plan, all being treated as if they had been either exercised or issued, computed by application of the treasury stock method.

(14) Recent Accounting Developments

Effective January 1, 2006, the Company early-adopted Statement of Financial Accounting Standards 156, “Accounting for Servicing of Financial Assets — An Amendment of FASB Statement No. 140” (“SFAS 156”). SFAS 156 requires separately recognized servicing assets to be recorded at fair value upon the purchase of a servicing right or selling of a loan with servicing retained. SFAS 156 also permits entities to choose to either subsequently measure servicing rights at fair value and report changes in the fair value in earnings or amortize servicing rights in proportion to and over the estimated net servicing income and assess them for impairment. The latter method results in recording servicing rights at lower of amortized cost or fair value. The Company elected to subsequently measure its mortgage servicing rights at fair value. The adoption of SFAS 156 resulted in an increase in the beginning balance of retained earnings by $1.1 million to reflect the excess of the fair value over the carrying value of the servicing rights as of the date of adoption, net of tax, as a cumulative-effect adjustment of the change in accounting.

In June 2006, the FASB issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes,” effective for the Company beginning on January 1, 2007. FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is currently assessing the impact of this guidance on its financial statements.

(15) Subsequent Events

On July 31, 2006, the Company announced that its Board of Directors has authorized the Company to repurchase up to 2 million shares of common stock over the next 18 months. The Company may repurchase such shares from time to time for cash in open market or privately negotiated transactions in accordance with applicable securities laws.

On August 4, 2006, the Company announced that all 1,242,000 of the Preferred Securities issued by Wintrust Capital Trust I will be redeemed on September 5, 2006 (the “Redemption Date”), at a redemption price for each Preferred Security equal to the $25.00 liquidation amount, plus any accrued and unpaid distributions to the Redemption Date. Distributions will cease to accrue on the Preferred Securities effective on the Redemption Date.

ITEM 2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition as of June 30, 2006, compared with December 31, 2005, and June 30, 2005, and the results of operations for the three and six-month periods ended June 30, 2006 and 2005 should be read in conjunction with the Company’s unaudited consolidated financial statements and notes contained in this report. This discussion contains forward-looking statements that involve risks and uncertainties and, as such, future results could differ significantly from management’s current expectations. See the last section of this discussion for further information on forward-looking statements.

Overview and Strategy

Wintrust is a financial holding company providing traditional community banking services as well as a full array of wealth management services to customers in the Chicago metropolitan area and southern Wisconsin. Additionally, the Company operates other financing businesses on a national basis through several non-bank subsidiaries.

Community Banking

As of June 30, 2006, the Company’s community banking franchise consisted of 15 community banks (the “Banks”) with 72 locations. The Company developed its banking franchise through the de novo organization of nine banks (50 locations) and the purchase of seven banks, one of which was merged into another of our banks, with 22 locations. In May 2006, the Company completed its acquisition of Hinsbrook Bank, which has five Illinois banking locations, and in March 2006, the Company opened its newest de novo bank, Old Plank Trail Bank. Wintrust’s first bank was organized in December 1991, as a highly personal service-oriented community bank. Each of the banks organized or acquired since then share that same commitment to community banking. The Company has grown to $9.17 billion in total assets at June 30, 2006 from $7.77 billion in total assets at June 30, 2005, an increase of 18%. The historical financial performance of the Company has been affected by costs associated with growing market share in deposits and loans, establishing and acquiring banks, opening new branch facilities and building an experienced management team. The Company’s financial performance generally reflects the improved profitability of its banking subsidiaries as they mature, offset by the costs of establishing and acquiring banks and opening new branch facilities. The Company’s experience has been that it generally takes 13 to 24 months for new banks to achieve operational profitability depending on the number and timing of branch facilities added.

The following table presents the Banks in chronological order based on the date in which they joined Wintrust. Each of the Banks has established additional full-service banking facilities subsequent to their initial openings.


	De novo / Acquired	Date
Lake Forest Bank	De novo	December, 1991
Hinsdale Bank	De novo	October, 1993
North Shore Bank	De novo	September, 1994
Libertyville Bank	De novo	October, 1995
Barrington Bank	De novo	December, 1996
Crystal Lake Bank	De novo	December, 1997
Northbrook Bank	De novo	November, 2000
Advantage Bank (organized 2001)	Acquired	October, 2003
Village Bank (organized 1995)	Acquired	December, 2003
Beverly Bank	De novo	April, 2004
Wheaton Bank (formerly Northview Bank; organized 1993)	Acquired	September, 2004
Town Bank (organized 1998)	Acquired	October, 2004
State Bank of The Lakes (organized 1894)	Acquired	January, 2005
First Northwest Bank (organized 1995; merged into Village Bank in May 2005)	Acquired	March, 2005
Old Plank Trail Bank	De novo	March, 2006
Hinsbrook Bank (organized 1987)	Acquired	May, 2006

Following is a summary of the activity related to the expansion of the Company’s banking franchise since June 30, 2005:

2006 Banking Expansion Activity

•

Acquisitions:

Hinsbrook Bank, with locations in Willowbrook, Downers Grove, Glen Ellyn, Darien and Geneva, Illinois

•

De Novo bank opening:

New Lenox, Illinois – de novo opening of Old Plank Trail Bank

•

New branch locations:

	Ø		Gurnee, Illinois – permanent location with drive-through replacing temporary location, a branch of Libertyville Bank

	Ø		Algonquin, Illlinois – branch location of Crystal Lake Bank

	Ø		Mokena, Illinois – branch location of Old Plank Trail Bank

	Ø		Elm Grove, Wisconsin – branch of Town Bank

	Ø		Frankfort, Illinois – branch location of Old Plank Trail Bank

2005 Banking Expansion Activity

•

New branch locations:

	Ø		Downers Grove, Illinois – permanent location with drive-through replacing temporary location, a branch of Hinsdale Bank.

	Ø		Wales, Wisconsin – a branch of Town Bank

	Ø		Glen Ellyn, Illinois – a temporary branch location for Glen Ellyn Bank & Trust, a branch of Wheaton Bank

	Ø		Northbrook, Illinois – in West Northbrook, a branch of Northbrook Bank

	Ø		Beverly neighborhood of Chicago, Illinois – main bank permanent location with drive-through for Beverly Bank

	Ø		Buffalo Grove, Illinois – Buffalo Grove Bank & Trust, a branch of Northbrook Bank

	Ø		Lake Bluff, Illinois – drive-through facility added to existing bank office; a branch of Lake Forest Bank

While committed to a continuing growth strategy, management’s ongoing focus is to balance further asset growth with earnings growth by seeking to more fully leverage the existing capacity within each of the operating subsidiaries. One aspect of this strategy is to continue to pursue specialized earning asset niches in order to maintain the mix of earning assets in higher-yielding loans as well as diversify the loan portfolio. Another aspect of this strategy is a continued focus on less aggressive deposit pricing at the Banks with significant market share and more established customer bases.

Specialty Lending

First Insurance Funding Corporation (“FIFC”) is the Company’s most significant specialized earning asset niche, originating $777 million in loan (premium finance receivables) volume in the second quarter of 2006, $1.5 billion in the first six months of 2006 and $2.7 billion in the calendar year 2005. FIFC makes loans to businesses to finance the insurance premiums they pay on their commercial insurance policies. The loans are originated by FIFC working through independent medium and large insurance agents and brokers located throughout the United States. The insurance premiums financed are primarily for commercial customers’ purchases of liability, property and casualty and other commercial insurance. This lending involves relatively rapid turnover of the loan portfolio and high volume of loan originations. Because of the indirect nature of this lending and because the borrowers are located nationwide, this segment may be more susceptible to third party fraud than relationship lending; however, management established various control procedures to mitigate the risks associated with this lending. The majority of these loans are purchased by the Banks in order to more fully utilize their lending capacity as these loans generally provide the Banks with higher yields than alternative investments. FIFC sold approximately $203 million, or 26%, of the receivables generated in the second quarter of 2006 to an unrelated third party while retaining servicing rights. On a year-to-date basis, FIFC sold approximately $303 million, or 20%, of its loan originations. The Company began selling premium finance receivables to a third party in 1999. The Company’s strategy is to maintain its average loan-to-deposit ratio in the range of 85-90% as well as to be asset-

driven. The sale of premium finance receivables provides the Company with a means to achieve both of these objectives. During the second quarter of 2006, the Company’s average loan-to-deposit ratio was 82%, below the target range. This was due to deposit growth at recently opened de novo locations exceeding expectations coupled with strong but slower loan origination growth at the Banks. These sales provide the Company with an additional source of liquidity in addition to the recognition of gains. Consistent with the Company’s strategy to be asset-driven, it is probable that similar sales of these receivables will occur in the future; however, future sales of these receivables depend on the level of new volume growth in relation to the capacity to retain such loans within the Banks’ loan portfolios.

As part of its continuing strategy to enhance and diversify its earning asset base and revenue stream, in May 2004, the Company acquired SGB Corporation d/b/a WestAmerica Mortgage Company (“WestAmerica”) and WestAmerica’s affiliate, Guardian Real Estate Services, Inc. (“Guardian”). WestAmerica engages primarily in the origination and purchase of residential mortgages for sale into the secondary market, and Guardian provides the document preparation and other loan closing services to WestAmerica and a network of mortgage brokers. WestAmerica sells its loans with servicing released and does not currently engage in servicing loans for others. WestAmerica maintains principal origination offices in ten states, including Illinois, and originates loans in other states through wholesale and correspondent offices. WestAmerica provides the Banks with the ability to use an enhanced loan origination and documentation system which allows WestAmerica and the Banks to better utilize existing operational capacity and expand the mortgage products offered to the Banks’ customers. WestAmerica’s production of adjustable rate mortgage loan products and other variable rate mortgage loan products may be purchased by the Banks for their loan portfolios resulting in additional earning assets to the combined organization, thus adding further desired diversification to the Company’s earning asset base.

In October 1999, the Company acquired Tricom as part of its continuing strategy to pursue specialized earning asset niches. Tricom is a company based in the Milwaukee area that has been in business since 1989 and specializes in providing 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 clients in the temporary staffing industry. Tricom’s clients, located throughout the United States, provide staffing services to businesses in diversified industries. These receivables may involve greater credit risks than generally associated with the loan portfolios of more traditional community banks depending on the marketability of the collateral. The principal sources of repayments on the receivables are payments to borrowers from their customers who are located throughout the United States. The Company mitigates this risk by employing lockboxes and other cash management techniques to protect its interests. By virtue of the Company’s funding resources, this acquisition has provided Tricom with additional capital necessary to expand its financing services in a national market. Tricom’s revenue principally consists of interest income from financing activities and fee-based revenues from administrative services.

In addition to the earning asset niches provided by the Company’s non-bank subsidiaries, several earning asset niches operate within the Banks, including indirect auto lending which is conducted through Hinsdale Bank and Barrington Bank’s Community Advantage program that provides lending, deposit and cash management services to condominium, homeowner and community associations. In addition, Hinsdale Bank operates a mortgage warehouse lending program that provides loan and deposit services to mortgage brokerage companies located predominantly in the Chicago metropolitan area, and Crystal Lake Bank has developed a specialty in small aircraft lending which is operated through its North American Aviation Financing division. The Company continues to pursue the development and/or acquisition of other specialty lending businesses that generate assets suitable for bank investment and/or secondary market sales.

Wealth Management

Wintrust’s strategy also includes building and growing its wealth management business, which includes trust, asset management and securities brokerage services marketed primarily under the Wayne Hummer name. In February 2002, the Company completed its acquisition of the Wayne Hummer Companies, comprised of Wayne Hummer Investments LLC (“WHI”), Wayne Hummer Management Company (subsequently renamed Wayne Hummer Asset Management Company (“WHAMC”) and Focused Investments LLC (“Focused”), each based in the Chicago area. To further augment its wealth management business, in February 2003, the Company acquired Lake Forest Capital Management (“LFCM”), a registered investment advisor. LFCM was merged into WHAMC.

WHAMC, a registered investment advisor, provides money management and advisory services to individuals and institutional municipal and tax-exempt organizations. WHAMC also provides portfolio management and financial

supervision for a wide-range of pension and profit sharing plans. In addition, WHAMC is investment advisor for the PathMaster Domestic Equity Fund a mutual fund that became effective in December 2005. The PathMaster Fund is a quantitatively based fund that employs a variety of fundamental investment analytical factors in allocating its holdings of exchange traded funds according to the underlying securities’ size and style categorization.

WHI, a registered broker-dealer, provides a full-range of investment products and services tailored to meet the specific needs of individual investors throughout the country, primarily in the Midwest. Although headquartered in downtown Chicago, WHI also operates an office in Appleton, Wisconsin as well as in 18 of the Company’s banking locations in Illinois and Wisconsin. Focused, a NASD member broker/dealer, is a wholly-owned subsidiary of WHI and provides a full range of investment services to clients through a network of relationships with unaffiliated community-based financial institutions located primarily in Illinois.

In September 1998, the Company formed a trust subsidiary to expand the trust and investment management services that were previously provided through the trust department of Lake Forest Bank. The trust subsidiary, originally named Wintrust Asset Management Company, was renamed Wayne Hummer Trust Company (“WHTC”) in May 2002, to bring together the Company’s wealth management subsidiaries under a common brand name. In addition to offering trust administrative services to existing bank customers at each of the Banks, the Company believes WHTC can successfully compete for trust business by targeting small to mid-size businesses and affluent individuals whose needs command the personalized attention offered by WHTC’s experienced trust professionals. WHAMC serves as the investment advisor to WHTC’s clients.

The following table presents a summary of the approximate amount of assets under administration and/or management in the Company’s wealth management operating subsidiaries as of the dates shown:


	June 30,		December 31,		June 30,
(Dollars in thousands)	2006		2005		2005

WHTC	$	680,711	$	658,753	$	638,957
WHAMC ⁽¹⁾		528,346		823,409		868,708
WHAMC’s proprietary mutual funds		10,872		161,568		168,705
WHI – brokerage assets in custody		5,300,000		5,300,000		5,100,000


⁽¹⁾		Excludes the proprietary mutual funds managed by WHAMC

At the time of the Company’s acquisition of the Wayne Hummer Companies, WHAMC was advisor to a family of mutual funds known as the Wayne Hummer funds. In the first quarter of 2006 WHAMC sold the last of these funds, the Wayne Hummer Growth Fund, and realized a gain of approximately $2.4 million on the sale. Wayne Hummer will focus its mutual fund efforts on the PathMaster Fund and similar funds and separately managed mutual fund products currently under consideration. In the second quarter of 2006, WHAMC ceased managing a low-margin institutional account with assets totaling approximately $240 million.

RESULTS OF OPERATIONS

Earnings Summary

The Company’s key operating measures for 2006, as compared to the same periods last year, are shown below:


	Three Months			Three Months			Percentage (%)/
	Ended			Ended			Basis Point (bp)
(Dollars in thousands, except per share data)	June 30, 2006			June 30, 2005			Change
Net income	$	17,611		$	12,979			36	%
Net income per common share – Diluted		0.69			0.53			30

Net revenue ⁽¹⁾		85,535			70,423			21
Net interest income		61,242			53,882			14

Net interest margin ⁽⁶⁾		3.10	%		3.19	%	(9		) bp
Core net interest margin ^{(2) (6)}		3.32			3.41			(9	)
Net overhead ratio ⁽³⁾		1.44			1.73			(29	)
Efficiency ratio ^{(4) (6)}		65.01			70.22			(521	)
Return on average assets		0.80			0.69			11
Return on average equity		10.48			9.03			145


	Six Months			Six Months			Percentage (%)/
	Ended			Ended			Basis Point (bp)
	June 30, 2006			June 30, 2005			Change
Net income	$	36,624		$	28,652			28	%
Net income per common share – Diluted		1.45			1.20			21

Net revenue ⁽¹⁾		171,424			144,717			18
Net interest income		118,406			103,796			14

Net interest margin ⁽⁶⁾		3.11	%		3.20	%	(9		) bp
Core net interest margin ^{(2) (6)}		3.32			3.41			(9	)
Net overhead ratio ⁽³⁾		1.36			1.56			(20	)
Efficiency ratio ^{(4) (6)}		64.08			67.40			(332	)
Return on average assets		0.87			0.79			8
Return on average equity		11.26			10.93			33

At end of period
Total assets	$	9,172,784		$	7,768,993			18	%
Total loans, net of unearned income		6,055,140			5,023,087			21
Total deposits		7,562,621			6,299,050			20
Long-term debt – trust preferred securities		230,375			209,921			10
Total shareholders’ equity		721,803			597,053			21

Book value per common share		28.17			25.33			11
Market price per common share		50.85			52.35			(3	)

Allowance for credit losses to total loans ⁽⁵⁾		0.74	%		0.79	%	(5		) bp
Non-performing assets to total assets		0.33			0.28			5


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

(2)		The core net interest margin excludes the net interest expense associated with Wintrust’s Long-term debt – trust preferred securities.

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

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

(5)		The allowance for credit losses includes both the allowance for loan losses and the allowance for lending related commitments.

(6)		See following section titled, “Supplemental Financial Measures/Ratios” for additional information on this performance measure/ratio.

Certain returns, yields, performance ratios, and quarterly growth rates are “annualized” in this presentation and throughout this report to represent an annual time period. This is done for analytical purposes to better discern for decision-making purposes underlying performance trends when compared to full-year or year-over-year amounts. For example, balance sheet growth rates are most often expressed in terms of an annual rate. As such, 5% growth during a quarter would represent an annualized growth rate of 20%.

Supplemental Financial Measures/Ratios

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

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent (“FTE”) basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a FTE basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses), measures how much it costs to produce one dollar of revenue. Securities gains or losses are excluded from this calculation to better match revenue from daily operations to operational expenses.

Management also evaluates the net interest margin excluding the net interest expense associated with the Company’s Long-term debt – trust preferred securities (“Core Net Interest Margin”). Because these instruments are utilized by the Company primarily as capital instruments, management finds it useful to view the net interest margin excluding this expense and deems it to be a more meaningful view of the operational net interest margin of the Company.

A reconciliation of certain non-GAAP performance measures and ratios used by the Company to evaluate and measure the Company’s performance to the most directly comparable GAAP financial measures is shown below:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2006			2005			2006			2005
(A) Interest income (GAAP)	$	135,116		$	98,677		$	255,413		$	185,999
Taxable-equivalent adjustment:
– Loans		105			152			235			305
– Liquidity management assets		261			194			542			333
– Other earning assets		6			8			7			13

Interest income – FTE	$	135,488		$	99,031		$	256,197		$	186,650
(B) Interest expense (GAAP)		73,874			44,795			137,007			82,203

Net interest income – FTE	$	61,614		$	54,236		$	119,190		$	104,447


(C) Net interest income (GAAP) (A minus B)	$	61,242		$	53,882		$	118,406		$	103,796

Net interest income – FTE	$	61,614		$	54,236		$	119,190		$	104,447
Add: Interest expense on long-term debt – trust preferred securities, net ⁽¹⁾		4,238			3,704			8,232			7,018

Core net interest income – FTE ⁽²⁾	$	65,852		$	57,940		$	127,422		$	111,465


(D) Net interest margin (GAAP)		3.08	%		3.17	%		3.09	%		3.17	%
Net interest margin – FTE		3.10	%		3.19	%		3.11	%		3.20	%
Core net interest margin — FTE ⁽²⁾		3.32	%		3.41	%		3.32	%		3.41	%

(E) Efficiency ratio (GAAP)		65.29	%		70.58	%		64.38	%		67.71	%
Efficiency ratio – FTE		65.01	%		70.22	%		64.08	%		67.40	%


⁽¹⁾		Interest expense from the Long-term debt – trust preferred securities is net of the interest income on the Common Securities owned by the Trusts and included in interest income.

⁽²⁾		Core net interest income and core net interest margin are by definition non-GAAP measures/ratios. The GAAP equivalents are the net interest income and net interest margin determined in accordance with GAAP (lines C and D in the table).

Critical Accounting Policies

The preparation of the financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities. Critical accounting policies inherently have greater complexity and greater reliance on the use of estimates, assumptions and judgments than other accounting policies, and as such have a greater possibility that changes in those estimates and assumptions could produce financial results that are materially different than originally reported. Estimates, assumptions and judgments are based on information available as of the date of the financial statements; accordingly, as information changes, the financial statements could reflect different estimates and assumptions. Management currently views critical accounting policies to include the determination of the allowance for loan losses and the allowance for lending-related commitments, the valuation of the retained interest in the premium finance receivables sold, the valuations required for impairment testing of goodwill, the valuation and accounting for derivative instruments and the accounting for income taxes as the areas that are most complex and require the most subjective and complex judgments, and as such could be most subject to revision as new information becomes available. For a more detailed discussion on these critical accounting policies, see “Summary of Critical Accounting Policies” beginning on page 72 of the Company’s Annual Report to shareholders for the year ended December 31, 2005.

Net Income

Net income for the quarter ended June 30, 2006 totaled $17.6 million, an increase of $4.6 million, or 36%, over the $13.0 million recorded in the second quarter of 2005. On a per share basis, net income for the second quarter of 2006 totaled $0.69 per diluted common share, an increase of $0.16 per share, or 30%, as compared to the 2005 second quarter total of $0.53 per diluted common share. The return on average equity for the second quarter of 2006 was 10.48%, compared to 9.03% for the prior year quarter.

Net income for the first six months of 2006, totaled $36.6 million, an increase of $8.0 million, or 28%, compared to $28.7 million for the same period in 2005. On a per share basis, net income per diluted common share was $1.45 for the first six months of 2006, an increase of $0.25 per share, or 21%, compared to $1.20 for the first six months of 2005. Return on average equity for the first six months of 2006 was 11.26% versus 10.93% for the same period of 2005.

Net Interest Income

Net interest income, which is the difference between interest income and fees on earning assets and interest expense on deposits and borrowings, is the major source of earnings for Wintrust. Tax-equivalent net interest income for the quarter ended June 30, 2006 totaled $61.6 million, an increase of $7.4 million, or 14%, as compared to the $54.2 million recorded in the same quarter of 2005. Average loans in the second quarter of 2006 increased $782 million, or 15%, over the second quarter of 2005 ($658 million, or 13%, excluding the impact of the acquisition of Hinsbrook Bank) and $442 million, or 33%, on an annualized basis, over the first quarter of 2006.

The following table presents a summary of the Company’s net interest income and related net interest margins, calculated on a fully taxable equivalent basis, for the second quarter of 2006 as compared to the second quarter of 2005 (linked quarters):


	For the Three Months Ended								For the Three Months Ended
	June 30, 2006								June 30, 2005
(Dollars in thousands)	Average			Interest		Rate			Average			Interest		Rate

Liquidity management assets ^{(1) (2) (8)}	$	2,090,691		$	25,397		4.87	%	$	1,723,855		$	17,510		4.07	%
Other earning assets ^{(2) (3)(8)}		32,304			566		7.00			31,382			479		6.12
Loans, net of unearned income ^{(2) (4) (8)}		5,849,916			109,525		7.51			5,067,904			81,042		6.41

Total earning assets ⁽⁸⁾	$	7,972,911		$	135,488		6.82	%	$	6,823,141		$	99,031		5.82	%

Allowance for loan losses		(43,137	)							(40,671	)
Cash and due from banks		123,842								139,587
Other assets		731,765								612,667

Total assets	$	8,785,381							$	7,534,724


Interest-bearing deposits	$	6,494,473		$	62,069		3.83	%	$	5,523,215		$	36,288		2.64	%
Federal Home Loan Bank advances		371,369			3,714		4.01			341,361			3,048		3.58
Notes payable and other borrowings		233,430			2,687		4.62			165,014			905		2.20
Subordinated notes		61,242			1,056		6.82			50,000			745		5.89
Long-term debt – trust preferred securities		230,389			4,348		7.47			209,939			3,809		7.18

Total interest-bearing liabilities	$	7,390,903		$	73,874		4.01	%	$	6,289,529		$	44,795		2.85	%

Non-interest bearing deposits		633,500								597,953
Other liabilities		87,221								70,491
Equity		673,757								576,751

Total liabilities and shareholders’ equity	$	8,785,381							$	7,534,724


Interest rate spread ^{(5) (8)}							2.81	%							2.97	%
Net free funds/contribution ⁽⁶⁾	$	582,008					0.29		$	533,612					0.22

Net interest income/Net interest margin ⁽⁸⁾				$	61,614		3.10	%				$	54,236		3.19	%

Core net interest margin ^{(7) (8)}							3.32	%							3.41	%


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

(2)		Interest income on tax-advantaged loans, trading account securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the quarters ended June 30, 2006 and 2005 were $372,000 and $354,000, respectively.

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

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

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

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

(7)		The core net interest margin excludes the effect of the net interest expense associated with Wintrust’s Long-term debt — trust preferred securities.

(8)		See “Supplemental Financial Measures/Ratios” section of this report for additional information on this performance measure/ratio .


	For the Three Months Ended								For the Three Months Ended
	June 30, 2006								March 31, 2006
(Dollars in thousands)	Average			Interest		Rate			Average			Interest		Rate

Liquidity management assets ^{(1) (2) (8)}	$	2,090,691		$	25,397		4.87	%	$	2,060,242		$	23,456		4.62	%
Other earning assets ^{(2) (3)(8)}		32,304			566		7.00			31,818			473		5.94
Loans, net of unearned income ^{(2) (4) (8)}		5,849,916			109,525		7.51			5,408,010			96,781		7.26

Total earning assets ⁽⁸⁾	$	7,972,911		$	135,488		6.82	%	$	7,500,070		$	120,710		6.53	%

Allowance for loan losses		(43,137	)							(41,629	)
Cash and due from banks		123,842								127,868
Other assets		731,765								653,568

Total assets	$	8,785,381							$	8,239,877


Interest-bearing deposits	$	6,494,473		$	62,069		3.83	%	$	6,202,123		$	54,282		3.55	%
Federal Home Loan Bank advances		371,369			3,714		4.01			356,655			3,280		3.73
Notes payable and other borrowings		233,430			2,687		4.62			85,889			654		3.09
Subordinated notes		61,242			1,056		6.82			50,000			801		6.41
Long-term debt – trust preferred securities		230,389			4,348		7.47			230,431			4,116		7.15

Total interest-bearing liabilities	$	7,390,903		$	73,874		4.01	%	$	6,925,098		$	63,133		3.69	%

Non-interest bearing deposits		633,500								595,322
Other liabilities		87,221								81,189
Equity		673,757								638,268

Total liabilities and shareholders’ equity	$	8,785,381							$	8,239,877


Interest rate spread ^{(5) (8)}							2.81	%							2.84	%
Net free funds/contribution ⁽⁶⁾	$	582,008					0.29		$	574,972					0.28

Net interest income/Net interest margin ⁽⁸⁾				$	61,614		3.10	%				$	57,577		3.12	%

Core net interest margin ^{(7) (8)}							3.32	%							3.33	%


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

(2)		Interest income on tax-advantaged loans, trading account securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the quarter ended June 30, 2006 was $372,000 and for the quarter ended March 31, 2006 was $413,000.

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

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

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

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

(7)		The core net interest margin excludes the effect of the net interest expense associated with Wintrust’s Long-term debt — trust preferred securities.

(8)		See “Supplemental Financial Measures/Ratios” section of this report for additional information on this performance measure/ratio .

Net interest margin represents tax-equivalent net interest income as a percentage of the average earning assets during the period. For the second quarter of 2006 the net interest margin was 3.10%, a decrease of two basis points when compared to the net interest margin of 3.12% in first quarter of 2006 and a decrease of nine basis points when compared to the second quarter of 2005. The core net interest margin, which excludes the net interest expense related to Wintrust’s Long-term debt — trust preferred securities, was 3.32% for the second quarter of 2006, 3.33% for the first quarter of 2006 and 3.41% for the second quarter of 2005.

The net interest margin declined nine basis points in the second quarter of 2006 compared to the second quarter of 2005 as the yield on earning assets increased by 100 basis points, the rate paid on interest-bearing liabilities increased by 116 basis points and the contribution from net free funds increased by seven basis points. The earning asset yield improvement in the second quarter of 2006 compared to the second quarter of 2005 was primarily attributable to a 110 basis point increase

in the yield on loans. The higher loan yield is reflective of the interest rate increases effected by the Federal Reserve Bank offset by continued competitive loan pricing pressures. The interest-bearing liability rate increase of 116 basis points was due to higher costs of retail deposits as rates have generally risen in the past 12 months, continued competitive pricing pressures on fixed-maturity time deposits in most markets and the promotional pricing activities associated with opening additional de novo branches and branches acquired through acquisition. The net interest margin in the second quarter of 2006 declined slightly to 3.10% when compared to the 3.12% recorded in the first quarter of 2006 as the net interest margin in the last five quarters has been hampered by both the loan-to-deposit ratio falling below the Company’s targeted range of 85% to 90% and competitive loan pricing pressures in all lending areas. The competitive lending market has restricted anticipated improvements in the Company’s net interest margin in a rising rate environment due to loan portfolio yields increasing slower on loans than the rate on deposits.

The yield on total earning assets for the second quarter of 2006 was 6.82% as compared to 5.82% in the second quarter of 2005. The increase of 100 basis points from the second quarter of 2005 resulted primarily from the rising short-term interest rate environment in the last 24 months offset by the effects of a flattening yield curve and highly competitive pricing in all lending areas. The second quarter 2006 yield on loans was 7.51%, a 110 basis point increase when compared to the prior year second quarter yield of 6.41%. Compared to the first quarter of 2006, the yield on earning assets increased 29 basis points primarily as a result of a 25 basis point increase in the yield on total loans and a 25 basis point increase in the yield on liquidity management assets. The average loan-to-average deposit ratio was 82.1% in the second quarter of 2006, 82.8% in the second quarter of 2005 and 79.6% in the first quarter of 2006. Solid internal loan growth in the second quarter of 2006 helped improve this ratio.

The rate paid on interest-bearing deposits increased to 3.83% in the second quarter of 2006 as compared to 2.64% in the second quarter of 2005. The rate paid on wholesale funding, consisting of Federal Home Loan Bank of Chicago advances, notes payable, subordinated notes, other borrowings and trust preferred securities, increased to 5.25% in the second quarter of 2006 compared to 4.42% in the second quarter of 2005 and 4.93% in the first quarter of 2006 as a result of higher short-term funding and trust preferred borrowings costs. The Company utilizes certain borrowing sources to fund the additional capital requirements of the subsidiary banks, manage its capital, manage its interest rate risk position and for general corporate purposes.

The following table presents a summary of the Company’s net interest income and related net interest margins, calculated on a fully taxable equivalent basis, for the six months ended June 30, 2006 and 2005.


	For the Six Months Ended								For the Six Months Ended
	June 30, 2006								June30, 2005
(Dollars in thousands)	Average			Interest		Rate			Average			Interest		Rate

Liquidity management assets ^{(1) (2) (8)}	$	2,075,572		$	48,853		4.75	%	$	1,613,378		$	32,256		4.03	%
Other earning assets ^{(2) (3)(8)}		32,062			1,038		6.48			32,743			920		5.66
Loans, net of unearned income ^{(2) (4) (8)}		5,630,511			206,306		7.39			4,953,408			153,474		6.25

Total earning assets ⁽⁸⁾	$	7,738,145		$	256,197		6.68	%	$	6,599,529		$	186,650		5.70	%

Allowance for loan losses		(42,421	)							(39,473	)
Cash and due from banks		125,661								136,584
Other assets		682,908								577,794

Total assets	$	8,504,293							$	7,274,434


Interest-bearing deposits	$	6,348,873		$	116,351		3.70	%	$	5,266,607		$	65,259		2.50	%
Federal Home Loan Bank advances		364,043			6,994		3.87			319,667			5,617		3.54
Notes payable and other borrowings		159,822			3,341		4.21			231,606			2,684		2.34
Subordinated notes		55,652			1,857		6.64			50,000			1,424		5.66
Long-term debt – trust preferred securities		230,410			8,464		7.31			207,313			7,219		6.93

Total interest-bearing liabilities	$	7,158,800		$	137,007		3.86	%	$	6,075,193		$	82,203		2.72	%

Non-interest bearing deposits		614,136								566,768
Other liabilities		75,409								103,817
Equity		655,948								528,656

Total liabilities and shareholders’ equity	$	8,504,293							$	7,274,434


Interest rate spread ^{(5) (8)}							2.82	%							2.98	%
Net free funds/contribution ⁽⁶⁾	$	579,345					0.29		$	524,336					0.22

Net interest income/Net interest margin ⁽⁸⁾				$	119,190		3.11	%				$	104,447		3.20	%

Core net interest margin ^{(7) (8)}							3.32	%							3.41	%


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

(2)		Interest income on tax-advantaged loans, trading account securities and securities reflects a tax-equivalent adjustment based on a marginal federal corporate tax rate of 35%. The total adjustments for the six months ended June 30, 2006 and 2005 were $784,000 and $651,000, respectively.

(3)		Other earning assets include brokerage customer receivables and trading account securities. (4) Loans, net of unearned income, include mortgages held-for-sale and non-accrual loans.

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

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

(7)		The core net interest margin excludes the effect of the net interest expense associated with Wintrust’s Long-term debt — trust preferred securities.

(8)		See “Supplemental Financial Measures/Ratios” section of this report for additional information on this performance measure/ratio .

The tax-equivalent net interest income for the six months ending June 30, 2006 totaled $119.2 million, an increase of $14.7 million, or 14%, compared to the $104.4 million recorded for the same period in 2005. Growth in the Company’s earning asset base was the primary contributor to this increase. Average earning assets increased $1.1 billion, or 17%, in the first six months of 2006 compared to the same period of 2005. The 2006 year-to-date net interest margin was 3.11%, compared to 3.20% for the prior year period. The nine basis point decrease in net interest margin resulted from the yield on earning assets increasing by 98 basis points, the rate paid on interest-bearing liabilities increasing by 114 basis points and the contribution from net free funds increasing by seven basis points. The loan yield increased by 114 basis points while the rate paid on interest-bearing deposits increased 120 basis points in 2006 compared to 2005. The competitive lending markets described above in the quarterly results have impacted the year-to-date results in a similar manner. Loan yields increasing faster than interest-bearing deposit rates in a rising rate environment have not occurred as anticipated.

The yield on total earning assets for the first six months of 2006 was 6.68% compared to 5.70% in 2005, an increase of 98 basis points resulting primarily from the effect of higher yields on loans. Average loans, the highest yielding component of the earning asset base, increased $677 million, or 14%, in the first six months of 2006 compared to the prior year period. The average yield on loans during the six months ended June 30, 2006, was 7.39%, an increase of 114 basis points compared to 6.25% for the same period of 2005.

The rate paid on interest-bearing liabilities for the first six months of 2006 was 3.86% compared to 2.72% in the first six months of 2005, an increase of 114 basis points. Deposits accounted for 89% of total interest bearing liabilities in the first six months of 2006 and 87% in the same period of 2005. The average rate paid on deposits was 3.70% in the first six months of 2006, an increase of 120 basis points compared to the average rate of 2.50% in the first six months of 2005.

The following table presents an analysis of the changes in the Company’s tax-equivalent net interest income comparing the three-month periods ended June 30, 2006 and March 31, 2006, the six-month periods ended June 30, 2006 and June 30, 2005 and the three-month periods ended June 30, 2006 and June 30, 2005. The reconciliations set forth the changes in the tax-equivalent net interest income as a result of changes in volumes, changes in rates and differing number of days in each period.


	Second Quarter			First Six Months			Second Quarter
	of 2006			of 2006			of 2006
	Compared to			Compared to			Compared to
	First Quarter			First Six Months			Second Quarter
(Dollars in thousands)	of 2006			of 2005			of 2005
Tax-equivalent net interest income for comparative period	$	57,577		$	104,447		$	54,236
Change due to mix and growth of earning assets and interest-bearing liabilities (volume)		3,647			17,494			8,815
Change due to interest rate fluctuations (rate)		(243	)		(2,751	)		(1,437	)
Change due to number of days in each period		633			—			—

Tax-equivalent net interest income for the period ended June 30, 2006	$	61,614		$	119,190		$	61,614

Non-interest Income

For the second quarter of 2006, non-interest income totaled $24.3 million and increased $7.8 million, or 47%, compared to the second quarter of 2005. For the six months ended June 30, 2006, non-interest income totaled $53.0 million, an increase of $12.1 million, or 30%, compared to the same period of 2005. The increases in both the quarterly and the year-to-date periods were significantly impacted by higher levels of trading income recognized related to changes in fair values of interest rate swaps.

The following tables present non-interest income by category for the periods presented:


	Three Months Ended
	June 30,						$			%
(Dollars in thousands)	2006			2005			Change			Change
Brokerage	$	5,086		$	5,393		$	(307	)		(5.7)	%
Trust and asset management		2,445			2,424			21			0.9

Total wealth management		7,531			7,817			(286	)		(3.7	)


Mortgage banking		5,860			5,555			305			5.5
Service charges on deposit accounts		1,746			1,594			152			9.5
Gain on sales of premium finance receivables		1,451			1,726			(275	)		(15.9	)
Administrative services		1,204			1,124			80			7.1
Gains (losses) on available-for-sale securities, net		(95	)		978			(1,073	)		(109.7	)
Other:
Fees from covered call and put options		684			2,624			(1,940	)		(73.9	)
Trading income (loss) – net cash settlement of swaps		709			(31	)		740		NM
Trading income (loss) – change in fair market value		2,609			(6,789	)		9,398		NM
Bank Owned Life Insurance		676			550			126			22.9
Miscellaneous		1,918			1,393			525			37.7

Total other		6,596			(2,253	)		8,849		NM


Total non-interest income	$	24,293		$	16,541		$	7,752			46.9	%


	Six Months Ended
	June 30,						$			%
(Dollars in thousands)	2006			2005			Change			Change
Brokerage	$	10,261		$	10,914		$	(653	)		(6.0)	%
Trust and asset management		7,407			4,847			2,560			52.8

Total wealth management		17,668			15,761			1,907			12.1


Mortgage banking		10,970			12,083			(1,113	)		(9.2	)
Service charges on deposit accounts		3,444			2,933			511			17.4
Gain on sales of premium finance receivables		2,446			3,382			(936	)		(27.7	)
Administrative services		2,358			2,138			220			10.3
Gains (losses) on available-for-sale securities, net		(15	)		978			(993	)		(101.5	)
Other:
Fees from covered call and put options		2,489			5,377			(2,888	)		(53.7	)
Trading income – net cash settlement of swaps		1,231			43			1,188		NM
Trading income (loss) – change in fair market value		7,524			(5,719	)		13,243		NM
Bank Owned Life Insurance		1,306			1,148			158			13.8
Miscellaneous		3,597			2,797			800			28.6

Total other		16,147			3,646			12,501			342.9


Total non-interest income	$	53,018		$	40,921		$	12,097			29.6	%


NM — data not meaningful

Wealth management is comprised of the trust and asset management revenue of WHTC and the asset management fees, brokerage commissions, trading commissions and insurance product commissions at WHI, WHAMC and Focused Investments. Wealth management totaled $7.5 million in the second quarter of 2006, a $286,000 decrease from the $7.8 million recorded in the second quarter of 2005. For the six months ended June 30, 2006, wealth management fees increased $1.9 million, or 12%, compared to the same period last year. Trust and asset management revenue in the year-to-date period includes a $2.4 million gain recognized as a result of the sale of the Wayne Hummer Growth Fund in the first quarter of 2006. While revenue from retail brokerage trading in the debt and equity markets decreased $307,000 compared to the second quarter of 2005, this revenue source was essentially the same as recorded in the first quarter of 2006. The Company anticipates continued recognition of revenue enhancement capabilities and cost saving opportunities as a result of the conversion to an out-sourced securities clearing platform completed by Wayne Hummer Investments in the third quarter of 2005 and continued growth of the wealth management platform throughout its banking locations. Wealth management growth generated in the banking locations is significantly outpacing the growth derived from the traditional Wayne Hummer Investments downtown Chicago sources.

Brokerage fees are impacted by trading volumes and trust and asset management fees are affected by the valuations of the equity securities under management. Wintrust’s strategy is to grow the wealth management business in order to better service its customers and create a more diversified revenue stream. Total assets under management and/or administration by WHTC and WHAMC were $1.2 billion at June 30, 2006, $1.6 billion at December 31, 2005 and $1.7 billion at June 30, 2005. The Wayne Hummer Growth Fund, which was managed by WHAMC and sold during the first quarter of 2006, had total assets of $162 million at December 31, 2005. In addition, during the second quarter of 2006 WHAMC ceased managing a low-margin institutional account with assets totaling approximately $240 million.

Mortgage banking includes revenue from activities related to originating, selling and servicing residential real estate loans for the secondary market. For the quarter ended June 30, 2006, this revenue source totaled $5.9 million, an increase of $305,000 when compared to the second quarter of 2005, attributable to a $1.1 million increase between the comparable periods in the income recorded to recognize the fair market value of mortgage banking derivatives (primarily rate lock commitments and commitments to sell loans to end investors) offset by lower levels of traditional mortgage banking revenue. For the six months ended June 30, 2006, mortgage banking revenue decreased $1.1 million when compared to the first half of 2005. This decrease is attributable to a $1.5 million decrease from traditional mortgage banking revenue partially offset by an increase of $753,000 in the income recorded to recognize the mortgage banking derivatives. Mortgage banking revenue was negatively impacted by the current interest rate environment and will continue to be dependent upon the relative level of long-term interest rates. A continuation of the existing rate environment may further negatively impact mortgage banking production and revenue. The Company adopted Statement of Financial Accounting Standards 156: Accounting for Servicing of Financial Assets — An Amendment of FASB Statement No. 140 (“SFAS 156”) as of January 1, 2006. SFAS 156 requires separately recognized servicing assets, in the Company’s case capitalized mortgage servicing rights (“MSRs”), to be recorded at fair value upon the purchase of a servicing right or selling of a loan with servicing retained. SFAS 156 also permits entities to choose to either subsequently measure MSRs at fair value and report changes in the fair value in earnings or amortize MSRs in proportion to and over the estimated net servicing income and assess them for impairment. The latter method results in recording MSRs at lower of amortized cost or fair value. The Company has elected to subsequently measure MSRs at fair value. In connection with the adoption of SFAS 156 the Company recorded an increase in the beginning balance of retained earnings by $1.1 million (to reflect the excess of the fair value over the carrying value of the MSRs at the date of adoption, net of tax, as a cumulative-effect adjustment of the change in accounting.) At June 30, 2006, the Company serviced approximately $508 million of mortgage loans for others. The fair value of the MSRs related to such loans totaled $5.6 million and is included in “accrued interest receivable and other assets” on the Consolidated Statements of Condition.

Service charges on deposit accounts totaled $1.7 million for the second quarter of 2006, an increase of $152,000, or 10%, when compared to the same quarter of 2005. On a year-to-date basis, service charges on deposit accounts totaled $3.4 million, an increase of $511,000, or 17%, compared to the same period of 2005. Deposit service charges primarily relate to customary fees on overdrawn accounts and returned items. The level of service charges received is substantially below peer group levels, as management believes in the philosophy of providing high quality service without encumbering that service with numerous activity charges.

Gain on sales of premium finance receivables results from the Company’s sales of premium finance receivables to an unrelated third party. The majority of the receivables originated by FIFC are purchased by the Banks to more fully utilize their lending capacity. However, the company has been selling premium finance receivables to an unrelated third party, with servicing retained, since 1999. Having a program in place to sell premium finance receivables to a third party allows the Company to execute its strategy to be asset-driven while providing the benefits of additional sources of liquidity and revenue.

In the second quarter of 2006, the Company sold $203 million of premium finance receivables to an unrelated third party and recognized gains of $1.5 million related to this activity, compared with $1.7 million of recognized gains in the second quarter of 2005 on sales of $138 million. On a year-to-date basis, the Company recognized gains of $2.4 million in 2006 on sales of $303 million, compared to gains of $3.4 million in 2005 on sales of $284 million of receivables. Recognized gains related to this activity are significantly influenced by the spread between the yield on the loans sold and the rate passed on to the purchaser. The yield on the loans sold and the rate passed on to the purchaser typically do not react in a parallel fashion, therefore causing the spreads to vary from period to period. This spread ranged from 2.62% to 3.24% in the first six months of 2006, compared to a range of 3.46% to 3.74% in the first six months of 2005. The spreads narrowed as yields on the premium finance receivables have not risen commensurately with increases in short term rates. The lower amount of gain recognized in the second quarter of 2006 compared to the prior year quarter, was primarily due to the lower interest rate spread on the loans sold offset by a higher volume of loans sold. The Company continues to maintain an interest in the loans sold and establishes a servicing asset, interest only strip and a recourse obligation upon each sale. Recognized gains, recorded in accordance with SFAS 140, as well as the Company’s retained interests in these loans are based on the Company’s projection of cash flows that will be generated from the loans. The cash flow model incorporates the amounts contractually due from customers, including an estimate of late fees, the amounts due to the purchaser of the loans, commissions paid to agents as well as estimates of the terms of the loans and credit losses. Significant differences in actual cash flows and the projected cash flows can cause impairment to the servicing asset and interest only strip as well as adjustments to the recourse obligation. The Company typically makes a clean up call by repurchasing the remaining loans in the pools sold after approximately 10 months from the sale date. Upon repurchase, the loans are recorded in the Company’s premium finance receivables portfolio and any remaining balance of the Company’s retained interest is recorded as an adjustment to the gain on sale of premium finance receivables. The Company continuously monitors the performance of the loan pools to the projections and adjusts the assumptions in its cash flow model when warranted. In the second quarter of 2006, clean up calls resulted in a charge of approximately $7,000 compared to gains of $79,000 (primarily from reversing the remaining balances of the related liability for the Company’s recourse obligation related to the loans) in the second quarter of 2005. Credit losses were estimated at 0.15% of the estimated average balance for loans sold in the second quarter of 2006 and 2005. (See “Allowance for Credit Losses” section later in this report for more details.) The estimated average terms of the loans during the second quarters of 2006 and 2005 were approximately 9 months. The applicable discount rate used in determining gains related to this activity was unchanged during 2005 and 2006.

At June 30, 2006, premium finance receivables sold and serviced for others for which the Company retains a recourse obligation related to credit losses totaled approximately $302 million. The recourse obligation is estimated in computing the net gain on the sale of the premium finance receivables. At June 30, 2006, the recourse obligation carried in other liabilities was approximately $271,000.

Credit losses incurred on loans sold are applied against the recourse obligation liability that is established at the date of sale. Credit losses, net of recoveries, in the first six months of 2006 and 2005 for premium finance receivables sold and serviced for others, totaled $118,000 and $81,000, respectively. At June 30, 2006, non-performing loans related to this sold portfolio were approximately $1.7 million, or 0.56% of the sold loans. Ultimate losses on premium finance receivables are substantially less than the non-performing loans for the reasons noted in the “Non-performing Premium Finance Receivables” portion of the “Asset Quality” section of this report.

Wintrust has a strategy of targeting its average loan-to-deposit ratio in the range of 85-90%. During the second quarter of 2006, the ratio was approximately 82%. In the short-term, the ratio was below the targeted range as deposit growth at recently opened de novo branches and acquired banks was very strong and loan originations at the Banks were slower than expected as the Company chose not to compromise on underwriting standards when competing for loan balances. Consistent with the Company’s strategy to be asset-driven and the liquidity benefits of selling a portion of the premium finance receivables originated, it is probable that similar sales of premium finance receivables will occur in the future.

The administrative services revenue contributed by Tricom added $1.2 million to total non-interest income in the second quarter of 2006, an increase of $80,000 compared to the second quarter of 2005. This revenue comprises income from administrative services, such as data processing of payrolls, billing and cash management services, to temporary staffing service clients located throughout the United States. Tricom also earns interest and fee income from providing high-yielding, short-term accounts receivable financing to this same client base, which is included in the net interest income category. On a year-to-date basis, administrative service revenue increased $220,000, or 10%.

Fees from covered call option transactions were $684,000 in the second quarter of 2006, reflecting a decrease of $1.9 million from the $2.6 million recognized in the second quarter of 2005. On a year-to-date basis the Company recognized fee income of $2.5 million in 2006 and $5.4 million in 2005. As the Company strives to write these call options at strike prices near the historical cost basis of the underlying securities, adjusted for amortization/accretion, the increase in market interest rates in the first six months of 2006 resulted in unrealized losses in the securities and the ability to realize less premium income for covered call options written against such securities. During the first six months of 2006, call option contracts were written against $1.1 billion of underlying securities compared to $1.6 billion in the first six months of 2005. The same security may be included in this total more than once to the extent that multiple option contracts were written against it if the initial option contracts were not exercised. The Company routinely enters into these transactions with the goal of enhancing its overall return on its investment portfolio. The Company writes call options with terms of less than three months against certain U.S. Treasury and agency securities held in its portfolio for liquidity and other purposes. These call option transactions are designed to increase the total return associated with the investment securities portfolio and do not qualify as hedges pursuant to SFAS 133. There were no outstanding call options at June 30, 2006, December 31, 2005 or June 30, 2005.

The Company recognized trading income related to interest rate swaps not designated in hedge relationships and the trading account assets of its broker-dealers. Trading income recognized for the net cash settlement of swaps is income that would have been recognized regardless of whether the swaps were designated in hedging relationships. However, in the absence of hedge accounting, the net cash settlement of the swaps is included in trading income rather than net interest income. Total trading income in the second quarter of 2006 totaled $3.3 million compared to a loss of $6.8 million the second quarter of 2005. On a year-to-date basis trading income totaled $8.8 million, compared to a loss of $5.7 million in the same period of 2005. The trading income is almost entirely related to the appreciation in the interest rate swaps as the fair market value of the rate swaps increased as rates have risen since June 30, 2005. In July 2006, the Company settled its position in these interest rate swap contracts by selling them to third parties at prices similar to the fair values recorded as of June 30, 2006. The Company realized approximately $5.8 million from the settlement of these swaps and eliminated any further earnings volatility due to the changes in fair values. These interest rate swaps were initially entered into to hedge the Company’s variable rate trust-preferred securities and subordinated notes and were determined to not qualify for hedge accounting. Management is currently reviewing various alternative derivative products to hedge these debt instruments.

Bank Owned Life Insurance (“BOLI”) income totaled $676,000 in the second quarter of 2006 and $550,000 in the same period of 2005. This income represents adjustments to the cash surrender value of BOLI policies. The Company originally purchased $41.1 million of BOLI in 2002 to consolidate existing term life insurance contracts of executive officers and to mitigate the mortality risk associated with death benefits provided for in executives’ employment contracts. The Company has purchased additional BOLI since then, including $8.9 million of BOLI that was owned by State Bank of The Lakes and $8.4 million owned by Hinsbrook Bank when Wintrust acquired these banks. As of June 30, 2006, the Company’s recorded investment in BOLI was $80.4 million. Income attributable to changes in cash surrender value of the BOLI policies was $1.3 million for the first six months of 2006 and $1.1 million for the same period of 2005.

Miscellaneous other non-interest income includes service charges and fees and miscellaneous income and totaled $1.9 million in the second quarter of 2006 and $1.4 million in the second quarter of 2005. On a year-to-date basis, miscellaneous other non-interest income totaled $3.6 million in 2006 and $2.8 million in 2005.

Non-interest Expense

Non-interest expense for the second quarter of 2006 totaled $55.9 million and increased $6.9 million, or 14%, from the second quarter 2005 total of $49.0 million. For the first six months of 2006, non-interest expense totaled $110.4 million and increased $13.0 million, or 13%, from the $97.3 million reported for the first six months of 2005. Most categories of non-interest expense increased in these quarterly and year-to-date periods as a result of the acquisition of Hinsbrook Bank in May 2006, the continued expansion of the Banks with new branch locations and the opening of the Company’s newest de novo bank at the end of the first quarter of 2006. The acquisition of Hinsbrook Bank added $900,000 to total non-interest expense in the second quarter of 2006. Including Hinsbrook Bank’s five banking locations, Wintrust added or expanded 19 locations in the past 12 months that increased most categories of non-interest expense. Salary and employee benefits, equipment, occupancy and marketing are directly impacted by the addition of new locations and the expansion of existing locations. Since June 30, 2005, total loans and total deposits increased 21% and 20%, respectively, requiring higher levels of staffing and resulting in other costs in order to both attract and service a larger customer base.

The following tables present non-interest expense by category for the periods presented:


	Three Months Ended
	June 30,		June 30,		$			%
(Dollars in thousands)	2006		2005		Change			Change
Salaries and employee benefits	$	33,351	$	29,181	$	4,170			14.3	%
Equipment		3,293		2,977		316			10.6
Occupancy, net		4,845		3,862		983			25.5
Data processing		2,025		1,743		282			16.2
Advertising and marketing		1,249		1,216		33			2.7
Professional fees		1,682		1,505		177			11.8
Amortization of other intangible assets		823		869		(46	)		(5.3	)
Other:
Commissions – 3 ^rd party brokers		999		902		97			10.8
Postage		992		994		(2	)		(0.2	)
Stationery and supplies		789		811		(22	)		(2.7	)
Miscellaneous		5,859		4,956		903			18.2

Total other		8,639		7,663		976			12.7


Total non-interest expense	$	55,907	$	49,016	$	6,891			14.1	%


	Six Months Ended
	June 30,		June 30,		$			%
(Dollars in thousands)	2006		2005		Change			Change
Salaries and employee benefits	$	66,829	$	58,644	$	8,185			14.0	%
Equipment		6,467		5,726		741			12.9
Occupancy, net		9,513		7,701		1,812			23.5
Data processing		3,884		3,458		426			12.3
Advertising and marketing		2,369		2,210		159			7.2
Professional fees		3,118		2,974		144			4.8
Amortization of other intangible assets		1,566		1,625		(59	)		(3.6	)
Other:
Commissions – 3 ^rd party brokers		2,091		1,915		176			9.2
Postage		1,878		1,899		(21	)		(1.1	)
Stationery and supplies		1,578		1,642		(64	)		(3.9	)
Miscellaneous		11,074		9,526		1,548			16.3

Total other		16,621		14,982		1,639			10.9


Total non-interest expense	$	110,367	$	97,320	$	13,047			13.4	%

Salaries and employee benefits comprised 60% of total non-interest expense in the second quarter of 2006 and in the second quarter of 2005. Salaries and employee benefits totaled $33.4 million for the second quarter of 2006, an increase of $4.2 million, or 14%, compared to the prior year’s second quarter total of $29.2 million. On a year-to-date basis, salaries and employee benefits totaled $66.8 million, an increase of $8.2 million, or 14%, as compared to the prior year amount. Hinsbrook Bank contributed $449,000 to salaries and employee benefits expense since May 31, 2006. The adoption of SFAS 123R on January 1, 2006, accounted for $1.3 million of the increase in the quarterly period and $2.7 million of the increase in the year-to-date period. See Note 12, Stock-Based Compensation Plans, of the Financial Statements presented under Item 1 of this report for additional information on the adoption of SFAS 123R. The balance of the increase was attributable to annual salary adjustments, increases in employee benefits expense and the general growth and development of the banking franchise.

Occupancy expense for the second quarter of 2006 was $4.8 million, an increase of $983,000, or 26%, compared to the same period of 2005. On a year-to-date basis, occupancy expense totaled $9.5 million, an increase of $1.8 million, or 24%, compared to the $7.7 million recorded for the same period of 2005. Occupancy expense increased primarily as a result of the Company’s continued banking expansion.

Commissions paid to third party brokers primarily represent the commissions paid on revenue generated by Focused through its network of unaffiliated banks.

Other categories of non-interest expense, including equipment expense, data processing, advertising and marketing and other, increased in the second quarter of 2006 over the second quarter of 2005 as well as in the first six months of 2006 relative to the same period last year. These increases are noted in the preceding tables of non-interest expense and are due primarily to the general growth and expansion of the banking franchise. The percentage increase in each of these categories is in line with the 21% increase in total loans and 20% increase in total deposits over the last twelve months.

Income Taxes

The Company recorded income tax expense of $10.3 million for the three months ended June 30, 2006 compared to $7.1 million for the same period of 2005. On a year-to-date basis, income tax expense was $21.2 million in 2006 and $16.2 million in 2005. The effective tax rate was 36.8% and 35.5% in the second quarter of 2006 and 2005, respectively, and 36.6% and 36.1% on a year-to-date basis for 2006 and 2005, respectively.

Operating Segment Results

As described in Note 8 to the Consolidated Financial Statements, the Company’s operations consist of four primary segments: banking, premium finance, Tricom and wealth management. The Company’s profitability is primarily dependent on the net interest income, provision for loan losses, non-interest income and operating expenses of its banking segment. The net interest income of the banking segment includes income and related interest costs from portfolio loans that were purchased from the premium finance segment. For purposes of internal segment profitability analysis, management reviews the results of its premium finance segment as if all loans originated and sold to the banking segment were retained within that segment’s operations. Similarly, for purposes of analyzing the contribution from the wealth management segment, management allocates a portion of the net interest income earned by the Banking segment on deposits balances of customers of the wealth management segment to the wealth management segment. (See “Wealth management deposits” discussion in Deposits section of this report for more information on these deposits.)

The banking segment’s net interest income for the quarter ended June 30, 2006 totaled $60.1 million as compared to $52.4 million for the same period in 2005, an increase of $7.7 million, or 15%. This increase resulted from average total earning asset growth of $1.1 billion offset by the effect of a 9 basis point decrease in net interest margin. The banking segment’s non-interest income totaled $10.3 million in the second quarter of 2006, a decrease of $2.0 million, or 16%, when compared to the second quarter of 2005 total of $12.3 million. The decrease in non-interest income is primarily a result of a lower level of fees from covered call options. The banking segment’s net income for the quarter ended June 30, 2006 totaled $16.9 million, a decrease of $479,000, or 3%, as compared to the second quarter of 2005 total of $17.4 million. On a year-to-date basis, net interest income totaled $116.4 million for the first six months of 2006, an increase of $16.0 million, or 16%, as compared to the $100.4 million recorded in the same period last year. This increase resulted from average total earning asset growth of $1.1 billion. Non-interest income decreased $3.6 million to $20.8 million in the first six months of 2006 compared to the second quarter of 2005. The banking segment’s after-tax profit for the six months ended June 30, 2006, totaled $33.1 million, an increase of $577,000, or 2%, as compared to the prior year total of $32.5 million. The banking segment accounted for the majority of the Company’s total asset growth since June 30, 2005, increasing by $1.5 billion.

Net interest income for the premium finance segment totaled $10.0 million for the quarter ended June 30, 2006, a decrease of $146,000, or 1%, compared to the $10.2 million in the same period in 2005. This segment was negatively impacted by both competitive asset pricing pressures and higher variable funding costs over the last twelve months. The premium finance segment’s non-interest income totaled $1.5 million and $1.9 million for the quarters ended June 30, 2006, and 2005, respectively. Non-interest income for this segment primarily reflects the gains from the sale of premium finance receivables to an unrelated third party. Wintrust sold $203 million of premium finance receivables to an unrelated third party financial institution in the second quarter of 2006 and $138 million in the second quarter of 2005. Net after-tax profit of the premium finance segment totaled $5.0 million and $5.6 million for the quarters ended June 30, 2006 and 2005, respectively. On a year-to-date basis, net interest income totaled $19.6 million for the first six months of 2006, a decrease of $1.4 million, or 7%, as compared to the $21.1 million recorded last year. Non-interest income decreased $1.2 million to $2.4 million in the first six months of 2006 as a result of lower interest rate spread realized on the loans sold to an unrelated third party partially offset by a larger volume of premium finance receivables sold to an unrelated third party in the first six months of 2006 ($303 million) than in the first six months of 2005 ($284 million). The premium finance segment’s after-tax profit for the six months ended June 30, 2006, totaled $9.7 million, a decrease of $1.9 million, or 17%, as compared to the prior year total of $11.6 million.

The Tricom segment data reflects the business associated with short-term accounts receivable financing and value-added out-sourced administrative services, such as data processing of payrolls, billing and cash management services, which Tricom provides to its clients in the temporary staffing industry. The segment’s net interest income was $934,000 in the second quarter of 2006, down approximately $53,000 when compared to the $987,000 reported for the same period in 2005. Increasing sales penetration helped offset the effects of competitive pricing pressures, causing the administrative services revenues in the second quarter of 2006 to increase $80,000 over the second quarter of 2005. The segment’s net income was $453,000 in the second quarter of 2006 compared to $407,000 in the same quarter in 2005. On a year-to-date basis, net interest income totaled $1.9 million for each of the first six months of 2006 and 2005. Non-interest income increased $219,000 to $2.4 million in the first six months of 2006. The Tricom segment’s after-tax profit for the six months ended June 30, 2006, totaled $825,000, an increase of $24,000, or 3%, as compared to $801,000 in the first six months of 2005.

The wealth management segment reported net interest income of $272,000 for the second quarter of 2006 compared to $418,000 in the same quarter of 2005. Net interest income is comprised of the net interest earned on brokerage customer receivables at WHI and an allocation of a portion of the net interest income earned by the Banking segment on non-interest bearing and interest-bearing wealth management customer account balances on deposit at the Banks. The allocated net interest income included in this segment’s profitability was $28,000 ($17,000 after tax) in the second quarter of 2006 and $25,000 ($15,000 after tax) in the second quarter of 2005. This segment recorded non-interest income of $8.9 million for the second quarter of 2006 as compared to $9.3 million for the second quarter of 2005, a decrease of $425,000 or 5%. The wealth management segment’s net loss totaled $433,000 for the second quarter of 2006 compared to a loss of $264,000 for the second quarter of 2005. In the second quarter of 2006, WHAMC ceased managing a low-margin institutional account with assets totaling approximately $240 million. On a year-to-date basis, net interest income totaled $641,000 for the first six months of 2006, a decrease of $423,000, or 40%, as compared to the $1.1 million recorded last year. The allocated net interest income included in this segment’s profitability was $120,000 ($74,000 after tax) in the first six months of 2006 and $327,000 ($201,000 after tax) in the first six months of 2005. Rising short-term interest rates, coupled with the flattening of the yield curve, have diminished the portion of the contribution from these funds allocated to the wealth management segment. Non-interest income increased $2.5 million to $20.6 million in the first six months of 2006. This increase was primarily related to a $2.4 million gain recognized as a result of the sale of the Wayne Hummer Growth Fund. This segment’s after-tax profit for the six months ended June 30, 2006, totaled $654,000 compared to the prior year loss of $688,000, an increase of $1.3 million. The bulk of this increase is attributable to the $2.4 million gain on the sale of the Wayne Hummer Growth Fund.

FINANCIAL CONDITION

Total assets were $9.2 billion at June 30, 2006, representing an increase of $1.4 billion, or 18%, over $7.8 billion at June 30, 2005. Approximately $563 million of the increase in total assets in this period is a result of the acquisition of Hinsbrook Bank while the remaining increase is primarily a result of the addition of other new Bank locations and the expansion of existing locations. Total assets at June 30, 2006, increased $791 million, or 38% on an annualized basis, since March 31, 2006. Total funding, which includes deposits, all notes and advances, including the Long-term debt-trust preferred securities, was $8.5 billion at June 30, 2006, representing an increase of $1.3 billion, or 18%, over the June 30, 2005 reported amounts. Total funding at June 30, 2006, increased $722 million, or 37% on an annualized basis, since December 31, 2005. See Notes 3-7 of the Financial Statements presented under Item 1 of this report for additional period-end detail on the Company’s interest-earning assets and funding liabilities.

Interest-Earning Assets

The following table sets forth, by category, the composition of average earning asset balances and the relative percentage of total average earning assets for the periods presented:


	Three Months Ended
	June 30, 2006					March 31, 2006					June 30, 2005
(Dollars in thousands)	Balance		Percent			Balance		Percent			Balance		Percent
Loans:
Commercial and commercial real estate	$	3,499,902		44	%	$	3,193,336		43	%	$	2,890,876		42	%
Home equity		630,806		8			621,154		8			638,139		9
Residential real estate ⁽¹⁾		369,721		5			347,163		5			398,616		6
Premium finance receivables		986,160		12			913,198		12			808,490		12
Indirect consumer loans		224,715		3			205,102		3			189,974		3
Tricom finance receivables		40,173		1			43,567		—			33,726		—
Other loans		98,439		1			84,490		1			108,083		2

Total loans, net of unearned income	$	5,849,916		74	%	$	5,408,010		72	%	$	5,067,904		74	%
Liquidity management assets ⁽²⁾		2,090,691		26			2,060,242		28			1,723,855		25
Other earning assets ⁽³⁾		32,304		—			31,818		—			31,382		1

Total average earning assets	$	7,972,911		100	%	$	7,500,070		100	%	$	6,823,141		100	%


Total average assets	$	8,785,381				$	8,239,877				$	7,534,724


Total average earning assets to total average assets				91	%				91	%				91	%


(1)		Residential real estate loans include mortgage loans held-for-sale.

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

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

Total average earning assets for the second quarter of 2006 increased $1.1 billion, or 17%, to $8.0 billion, compared to the second quarter of 2005. The ratio of total average earning assets as a percent of total average assets remained consistent at 91% for each of the quarterly periods shown in the above table.

Total average loans during the second quarter of 2006 increased $782 million, or 15%, over the previous year second quarter. Average commercial and commercial real estate loans increased 21%, premium finance receivable increased 22% and Tricom finance receivables increased 19% in the second quarter of 2006 compared to the average balances in the second quarter of 2005. Average total loans increased $442 million, or 33% on an annualized basis, over the average balance in the first quarter of 2006. The acquisition of Hinsbrook Bank (effective May 31, 2006), contributed approximately $124 million to average total loans in the second quarter of 2006.

Liquidity management assets include available-for-sale securities, interest earning deposits with banks, federal funds sold and securities purchased under resale agreements. The balances of these assets can fluctuate based on deposit inflows and outflows, the level of other funding sources and loan demand.

Other earning assets in the table include brokerage customer receivables and trading account securities at WHI. In the normal course of business, WHI activities involve the execution, settlement, and financing of various securities transactions. WHI’s customer securities activities are transacted on either a cash or margin basis. In margin transactions, WHI, under an agreement with the out-sourced securities firm, extends credit to its customers, subject to various regulatory and internal margin requirements, collateralized by cash and securities in customer’s accounts. In connection with these activities, WHI executes and the out-sourced firm clears customer transactions relating to the sale of securities not yet purchased, substantially all of which are transacted on a margin basis subject to individual exchange regulations. Such transactions may expose WHI to off-balance-sheet risk, particularly in volatile trading markets, in the event margin requirements are not sufficient to fully cover losses that customers may incur. In the event a customer fails to satisfy its obligations, WHI under an agreement with the outsourced securities firm, may be required to purchase or sell financial instruments at prevailing market prices to fulfill the customer’s obligations. WHI seeks to control the risks associated with its customers’ activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. WHI monitors required margin levels daily and, pursuant to such guidelines, requires customers to deposit additional collateral or to reduce positions when necessary.


	Average Balances for the
	Six Months Ended
	June 30, 2006					June 30, 2005
(Dollars in thousands)	Balance		Percent			Balance		Percent
Loans:
Commercial and commercial real estate	$	3,347,496		43	%	$	2,774,934		42	%
Home equity		626,041		8			620,224		9
Residential real estate ⁽¹⁾		358,415		5			388,764		6
Premium finance receivables		949,900		12			842,388		13
Indirect consumer loans		214,989		3			189,677		3
Tricom finance receivables		41,861		1			31,662		—
Other loans		91,809		1			105,759		2

Total loans, net of unearned income		5,630,511		73			4,953,408		75
Liquidity management assets ⁽²⁾		2,075,572		27			1,613,378		24
Other earning assets ⁽³⁾		32,062		—			32,743		1

Total average earning assets	$	7,738,145		100	%	$	6,599,529		100	%


Total average assets	$	8,504,293				$	7,274,434


Total average earning assets to total average assets				91	%				91	%


(1)		Residential real estate loans include mortgage loans held-for-sale.

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

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

Average earning assets for the six months ended June 30, 2006 increased $1.1 billion, or 17%, over the first six months of 2005. The ratio of year-to-date total average earning assets as a percent of total average assets remained consistent at 91% for each reporting period shown in the above table, consistent with this ratio on a quarterly basis. Total average loans increased by $677 million in the first six months of 2006 compared to the same period of 2005. Average commercial and commercial real estate loans increased 21%, Tricom finance receivables increased 32% and indirect auto loans increased 13% in the first six months of 2006 compared to the first six months of 2005.

Deposits

Total deposits at June 30, 2006, were $7.6 billion and increased $1.3 billion, or 20%, compared to total deposits at June 30, 2005. See Note 5 to the financials statements of Item 1 of this report for a summary of period end deposit balances.

The following table sets forth, by category, the composition of average deposit balances and the relative percentage of total average deposits for the periods presented:


	Three Months Ended
	June 30, 2006					March 31, 2006					June 30, 2005
(Dollars in thousands)	Balance		Percent			Balance		Percent			Balance		Percent
Non-interest bearing	$	633,500		9	%	$	595,322		9	%	$	597,953		10	%
NOW accounts		772,420		11			714,361		11			717,873		12
Wealth management deposits		441,665		6			425,528		6			403,326		6
Money market accounts		623,646		9			602,217		9			663,005		11
Savings accounts		308,540		4			306,545		4			304,082		5
Time certificates of deposit		4,348,202		61			4,153,472		61			3,434,929		56

Total average deposits	$	7,127,973		100	%	$	6,797,445		100	%	$	6,121,168		100	%

Total average deposits for the second quarter of 2006 were $7.1 billion, an increase of $1.0 billion, or 16%, over the second quarter of 2005 and an increase of $331 million, or 20% on an annualized basis, over the first quarter of 2006. The acquisition of Hinsbrook Bank (effective May 31, 2006), contributed approximately $141 million to average deposits in the second quarter of 2006.

Wealth management deposits represent balances from brokerage customers of WHI and trust and asset management customers of WHTC on deposit at the Company’s Banks. Consistent with reasonable interest rate risk parameters, the funds have generally been invested in loan production of the Banks as well as other investments suitable for banks.

Other Funding Sources

Although deposits are the Company’s primary source of funding its interest-earning assets, the Company’s ability to manage the types and terms of deposits is somewhat limited by customer preferences and market competition. As a result, the Company uses several other funding sources to support its interest-earning asset growth. These sources include short-term borrowings, notes payable, Federal Home Loan Bank advances, subordinated notes, trust preferred securities, the issuance of equity securities and the retention of earnings.

Average total interest-bearing funding, from sources other than deposits and including the long-term debt — trust preferred securities, totaled $896 million in the second quarter of 2006, an increase of $130 million compared to the second quarter of 2005 average balance of $766 million, and an increase of $173 million compared to the first quarter 2006 average balance of $723 million.

The following table sets forth, by category, the composition of average other funding sources for the periods presented:


	Three Months Ended
	June 30,		March 31,		June 30,
(Dollars in thousands)	2006		2006		2005
Notes payable	$	4,615	$	1,000	$	6,985
Federal Home Loan Bank advances		371,369		356,655		341,361

Other borrowings:
Federal funds purchased		68,514		2,980		5,239
Securities sold under repurchase agreements		158,209		79,664		149,670
Other		2,092		2,245		3,120

Total other borrowings		228,815		84,889		158,029


Subordinated notes		61,242		50,000		50,000
Long-term debt — trust preferred securities		230,389		230,431		209,939


Total other funding sources	$	896,430	$	722,975	$	766,314

Notes payable represents the average amount outstanding on the Company’s $51.0 million loan agreement with an unaffiliated bank. In the second quarter of 2006, the Company used this borrowing facility to add capital to the Banks and for other general corporate purposes. The balance of notes payable as of June 30, 2006, was $30.0 million.

In May 2006, in connection with the acquisition of Hinsbrook Bank, the Company increased its outstanding subordinated notes with the funding of a $25.0 million subordinated note with the holder of the other subordinated notes with substantially similar terms as the other subordinated notes. The Company also acquired $8.0 million of subordinated debt that was on Hinsbrook’s balance sheet. Subordinated notes totaled $83.0 million as of June 30, 2006.

In August 2005, the Company issued $40.0 million of trust preferred securities through Wintrust Capital Trust VIII and redeemed $20.0 million of trust preferred securities previously issued through Wintrust Capital Trust II, resulting in an increase in average long-term debt — trust preferred securities in the first and second quarters of 2006 as compared to the second quarter of 2005.

See Notes 6 and 7 of the Financial Statements presented under Item 1 of this report for details of period end balances of these various funding sources.

There were no material changes outside the ordinary course of business in the Company’s contractual obligations during the second quarter of 2006 as compared to December 31, 2005.

Shareholders’ Equity

Total shareholders’ equity was $721.8 million at June 30, 2006 and increased $124.8 million since June 30, 2005 and $93.9 million since the end of 2005. Significant increases from December 31, 2005, include the retention of $33.2 million of earnings (net income of $36.6 million less dividends of $3.4 million), $57.1 million from the issuance of 1.1 million shares of the Company’s common stock in connection with business combinations, $11.6 million from the issuance of new shares of the Company’s common stock in settlement of the forward sale agreement of common stock, $11.1 million for SFAS 123(R), $5.7 million from the issuance of shares of the Company’s common stock and related tax benefit pursuant to various stock compensation plans and $1.1 million from the cumulative-effect adjustment of the change in accounting for MSRs pursuant to SFAS 156. Increases in unrealized net losses from available-for-sale securities, net of tax, decreased shareholders’ equity $29.6 million from December 31, 2005. The annualized return on average equity for the three months ended June 30, 2006 was 10.48%, compared to 9.03% for the second quarter of 2005.

The following tables reflect various consolidated measures of capital as of the dates presented and the capital guidelines established by the Federal Reserve Bank for a bank holding company:


	June 30,			March 31,			June 30,
	2006			2006			2005
Leverage ratio		8.2	%		8.6	%		8.1	%
Tier 1 capital to risk-weighted assets		9.5			10.5			9.8
Total capital to risk-weighted assets		11.3			11.9			11.4
Total average equity-to-total average assets *		7.7			7.7			7.7


*		based on quarterly average balances


	Minimum
	Capital			Adequately			Well
	Requirements			Capitalized			Capitalized
Leverage ratio		3.0	%		4.0	%		5.0	%
Tier 1 capital to risk-weighted assets		4.0			4.0			6.0
Total capital to risk-weighted assets		8.0			8.0			10.0

The Company attempts to maintain an efficient capital structure in order to provide higher returns on equity. Additional capital is required from time to time, however, to support the growth of the organization. The issuance of additional common stock, additional trust preferred securities or subordinated debt are the primary forms of capital that are considered as the Company evaluates its capital position. The Company’s goal is to support the continued growth of the Company and to meet the well-capitalized total capital to risk-weighted assets ratio with these new issuances of regulatory capital. As indicated in Note 7 to the Financial Statements presented under Item 1 of this report, in August 2005, the Company issued $40.0 million of additional trust preferred securities and redeemed $20.0 million of 10.50% fixed rate trust preferred securities. In addition, on October 25, 2005, the Company signed a $25.0 million subordinated note agreement, which was funded in the second quarter of 2006. See Note 6 to the financial statements presented under Item 1 of this report for further information on the terms of this note.

In January and July 2006, Wintrust declared semi-annual cash dividends of $0.14 per common share. In January and July 2005, Wintrust declared semi-annual cash dividends of $0.12 per common share. The dividend payout ratio (annualized) was 9.6% for the first six months of 2006 and 9.9% for the first six months of 2005. The Company continues to target an earnings retention ratio of approximately 90% to support continued growth.

In December 2004, the Company completed an underwritten public offering of 1.2 million shares of its common stock at $59.50 per share. The offering was made under the Company’s current shelf registration statement filed with the SEC in October 2004. In connection with the public offering, the Company entered into a forward sale agreement relating to 1.2 million shares of its common stock. The use of the forward sale agreement allowed the Company to deliver common stock and receive cash at the Company’s election, to the extent provided by the forward sale agreement. Management believes this flexibility allowed a more timely and efficient use of capital resources. The Company’s objective with the use of the forward sale agreement was to efficiently provide funding for the acquisitions of Antioch and FNBI and for general corporate purposes. The Company issued 1.0 million shares of common stock in March 2005 in partial settlement of the forward sale agreement and received net proceeds of approximately $55.9 million. In May 2006, the Company issued the remaining 200,000 shares of common stock under this forward sale agreement and received net proceeds of approximately $11.6 million to provide funding for the acquisition of HBI.

ASSET QUALITY

Allowance for Credit Losses

The following table presents a summary of the activity in the allowance for credit losses for the periods presented:


	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
(Dollars in thousands)	2006			2005			2006			2005

Balance at beginning of period	$	40,367		$	39,337		$	40,283		$	34,227

Provision for credit losses		1,743			1,294			3,279			2,525

Allowance acquired in business combinations		3,852			—			3,852			4,793

Reclassification to allowance for unfunded loan commitments		—			—			—			—

Charge-offs:
Commercial and commercial real estate loans		967			554			2,077			1,217
Home equity loans		—			—			22			—
Residential real estate loans		5			—			32			44
Consumer and other loans		79			92			190			139
Premium finance receivables		577			416			1,023			859
Indirect consumer loans		95			121			172			234
Tricom finance receivables		—			—			—			—

Total charge-offs		1,723			1,183			3,516			2,493


Recoveries:
Commercial and commercial real estate loans		117			46			237			243
Home equity loans		22			—			22			—
Residential real estate loans		—			—			—			—
Consumer and other loans		58			9			83			15
Premium finance receivables		136			172			273			312
Indirect consumer loans		24			47			83			100
Tricom finance receivables		—			—			—			—

Total recoveries		357			274			698			670

Net charge-offs		(1,366	)		(909	)		(2,818	)		(1,823	)


Allowance for loan losses at period-end	$	44,596		$	39,722		$	44,596		$	39,722

Allowance for lending-related commitments at period-end	$	491		$	—		$	491		$	—

Allowance for credit losses at period-end	$	45,087		$	39,722		$	45,087		$	39,722


Annualized net charge-offs (recoveries) by category as a percentage of its own respective category’s average:
Commercial and commercial real estate loans		0.10	%		0.07	%		0.11	%		0.07	%
Home equity loans		(0.01	)		—			—			—
Residential real estate loans		0.01			—			0.02			0.02
Consumer and other loans		0.09			0.31			0.24			0.24
Premium finance receivables		0.18			0.12			0.16			0.13
Indirect consumer loans		0.13			0.16			0.08			0.14
Tricom finance receivables		—			—			—			—

Total loans, net of unearned income		0.09	%		0.07	%		0.10	%		0.07	%


Net charge-offs as a percentage of the provision for credit losses		78.37	%		70.25	%		85.94	%		72.20	%

Loans at period-end							$	6,055,140		$	5,023,087
Allowance for loan losses as a percentage of loans at period-end								0.74	%		0.79	%
Allowance for credit losses as a percentage of loans at period-end								0.74	%		0.79	%

Management believes that the loan portfolio is well diversified and well secured, without undue concentration in any specific risk area. Loan quality is continually monitored by management and is reviewed by the Banks’ Boards of Directors and their Credit Committees on a monthly basis. Independent external reviews of the loan portfolio are provided by the examinations conducted by regulatory authorities and an independent loan review performed by an entity engaged by the Board of Directors. The amount of additions to the allowance for loan losses, which is charged to earnings through the provision for credit losses, is determined based on management’s assessment of the adequacy of the allowance for loan losses. Management evaluates on a quarterly basis a variety of factors, including actual charge-offs during the year, historical loss experience, delinquent and other potential problem loans, and economic conditions and trends in the market area in assessing the adequacy of the allowance for loan losses.

The Company allocates the entire allowance for loan losses to specific loan portfolio groups and maintains its allowance for loan losses at a level believed adequate by management to absorb probable losses inherent in the loan portfolio and is based on the size and current risk characteristics of the loan portfolio, an assessment of Problem Loan Report loans and actual loss experience, industry concentration, geographical concentrations, levels of delinquencies, historical loss experience including an analysis of the seasoning of the loan portfolio, changes in trends in risk ratings assigned to loans, changes in underwriting standards and other pertinent factors, including regulatory guidance and general economic conditions. The allowance for loan losses also includes an element for estimated probable but undetected losses and for imprecision in the credit risk models used to calculate the allowance. The Company reviews Problem Loan Report loans on a case-by-case basis to allocate a specific dollar amount of reserves, whereas all other loans are reserved for based on assigned reserve percentages evaluated by loan groupings. The loan groupings utilized by the Company are commercial, commercial real estate, residential real estate, home equity, premium finance receivables, indirect consumer, Tricom finance receivables and consumer. Determination of the allowance is inherently subjective as it requires significant estimates, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of current environmental factors and economic trends, all of which may be susceptible to significant change. The allowance for lending-related commitments is computed using a methodology similar to that used to determine the allowance for loan losses. Loan losses are charged off against the allowance, while recoveries are credited to the allowance. A provision for credit losses is charged to operations based on management’s periodic evaluation of the factors previously mentioned, as well as other pertinent factors. Evaluations are conducted on a monthly basis.

The provision for credit losses totaled $1.7 million for the second quarter of 2006, compared to $1.3 million for the second quarter of 2005. For the quarter ended June 30, 2006 net charge-offs totaled $1.4 million, compared to $909,000 for the same period of 2005. On a ratio basis, annualized net charge-offs as a percentage of average loans were 0.09% in the second quarter of 2006 and 0.07% in the same period in 2005. The increase in the provision for credit losses in the second quarter of 2006 is primarily a result of a higher level of net charge-offs recorded.

On a year-to-date basis, the provision for credit losses totaled $3.3 million for the first six months of 2006, compared to $2.5 million for the first six months of 2005. Net charge-offs for the first six months of 2006 totaled $2.8 million, compared to $1.8 million for the first six months of 2005. On a ratio basis, annualized net charge-offs as a percentage of average loans were 0.10% for the six months of 2006 and 0.07% in the same period in 2005. The increase in the provision for credit losses for the first six months of 2006 is primarily a result of a higher level of net charge-offs recorded.

During the fourth quarter of 2005, the Company reclassified a portion of its allowance for loan losses to a separate liability account. The reclassification totaled $491,000 and represents the portion of the allowance for loan losses that was associated with lending-related commitments, specifically unfunded loan commitments and letters of credit. The allowance for loan losses is a reserve against loan amounts that are actually funded and outstanding while the allowance for lending-related commitments relates to certain amounts that the Company is committed to lend but for which funds have not yet been disbursed. The allowance for credit losses is comprised of the allowance for loan losses and the allowance for lending-related commitments. In future periods, the provision for credit losses may contain both a component related to funded loans (provision for loan losses) and a component related to lending-related commitments (provision for unfunded loan commitments and letters of credit).

Management believes the allowance for loan losses is adequate to provide for inherent losses in the portfolio. There can be no assurances however, that future losses will not exceed the amounts provided for, thereby affecting future results of

operations. The amount of future additions to the allowance for loan losses will be dependent upon management’s assessment of the adequacy of the allowance based on its evaluation of economic conditions, changes in real estate values, interest rates, the regulatory environment, the level of past-due, non-performing loans, and other factors.

Past Due Loans and Non-performing Assets

The following table sets forth Wintrust’s non-performing assets at the dates indicated. The information in the table should be read in conjunction with the detailed discussion following the table.


	June 30,			March 31,			December 31,			June 30,
(Dollars in thousands)	2006			2006			2005			2005


Loans past due greater than 90 days and still accruing:
Residential real estate and home equity	$	505		$	507		$	159		$	315
Commercial, consumer and other		4,399			2,891			1,898			1,381
Premium finance receivables		3,024			3,738			5,211			3,282
Indirect consumer loans		113			247			228			258
Tricom finance receivables		—			—			—			—

Total past due greater than 90 days and still accruing		8,041			7,383			7,496			5,236


Non-accrual loans:
Residential real estate and home equity		1,326			234			457			843
Commercial, consumer and other		11,586			10,358			11,712			9,599
Premium finance receivables		6,180			6,402			6,189			6,088
Indirect consumer loans		214			216			335			145
Tricom finance receivables		—			—			—			—

Total non-accrual		19,306			17,210			18,693			16,675


Total non-performing loans:
Residential real estate and home equity		1,831			741			616			1,158
Commercial, consumer and other		15,985			13,249			13,610			10,980
Premium finance receivables		9,204			10,140			11,400			9,370
Indirect consumer loans		327			463			563			403
Tricom finance receivables		—			—			—			—

Total non-performing loans		27,347			24,593			26,189			21,911

Other real estate owned		2,519			1,952			1,400			—

Total non-performing assets	$	29,866		$	26,545		$	27,589		$	21,911


Total non-performing loans by category as a percent of its own respective category’s period end balance:
Residential real estate and home equity		0.19	%		0.08	%		0.07	%		0.13	%
Commercial, consumer and other		0.41			0.39			0.42			0.36
Premium finance receivables		0.98			1.12			1.40			1.18
Indirect consumer loans		0.14			0.22			0.28			0.21
Tricom finance receivables		—			—			—			—

Total non-performing loans		0.45	%		0.45	%		0.50	%		0.44	%


Total non-performing assets as a percentage of total assets		0.33	%		0.32	%		0.34	%		0.28	%


Allowance for loan losses as a percentage of non-performing loans		163.08	%		164.15	%		153.82	%		181.28	%

Non-performing Residential Real Estate and Home Equity

The non-performing residential real estate and home equity loans totaled $1.8 million at June 30, 2006. The balance increased $673,000 from June 30, 2005 and $1.1 million from March 31, 2006. The acquisition of Hinsbrook Bank accounted for $414,000 of the increase. Each non-performing credit is well secured and in the process of collection. Management believes that the current reserves against these credits are appropriate to cover any potential losses.

Non-performing Commercial, Consumer and Other

The commercial, consumer and other non-performing loan category totaled $16.0 million as of June 30, 2006. The balance in this category increased $5.0 million from June 30, 2005 and $2.7 million from March 31, 2006. The acquisition of Hinsbrook Bank accounted for $2.8 million of increase. Management believes that the current reserves against these credits are appropriate to cover any potential losses on any of the relatively small number of credits in this category.

Non-performing Premium Finance Receivables

The following table presents the level of non-performing premium finance receivables as of the dates indicated, and the amount of net charge-offs for the quarterly periods then ended.


	June 30,			March 31,			June 30,
(Dollars in thousands)	2006			2006			2005

Non-performing premium finance receivables	$	9,204		$	10,140		$	9,370
- as a percent of premium finance receivables outstanding		0.98	%		1.12	%		1.18	%

Net charge-offs of premium finance receivables	$	441		$	309		$	244
- annualized as a percent of average premium finance receivables		0.18	%		0.14	%		0.12	%

The level of non-performing premium finance receivables as a percent of total premium finance receivables improved from the levels reported at March 31, 2006 and June 30, 2005. As noted below, fluctuations in this category may occur due to timing and nature of account collections from insurance carriers. Management is comfortable with administering the collections at this level of non-performing premium finance receivables and expects that such ratios will remain at relatively low levels.

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

Non-performing Indirect Consumer Loans

Total non-performing indirect consumer loans were $327,000 at June 30, 2006, compared to $403,000 at June 30, 2005 and $463,000 at March 31, 2006. The ratio of these non-performing loans to total indirect consumer loans was 0.14% at June 30, 2006, compared to 0.21% at June 30, 2005 and 0.22% at March 31, 2006. As noted in the Allowance for Credit Losses table, net charge-offs (annualized) as a percent of total indirect consumer loans were 0.13% for the quarter ended June 30, 2006 compared to 0.16% for the quarter ended June 30, 2005. The levels of non-performing and net charge-offs of indirect consumer loans continue to be below standard industry ratios for this type of lending.

Credit Quality Review Procedures

The Company utilizes a loan rating system to assign risk to loans and utilizes that risk rating system to assist in developing an internal problem loan identification system (“Problem Loan Report”) as a means of reporting non-performing and potential problem loans. At each scheduled meeting of the Boards of Directors of the Banks’ and Wintrust’s Risk Management committees, a Problem Loan Report is presented, showing all loans that are non-performing and loans that may warrant additional monitoring. Accordingly, in addition to those loans disclosed under “Past Due Loans and Non-performing Assets,” there are certain loans in the portfolio which management has identified, through its Problem Loan Report, which exhibit a higher than normal credit risk. These Problem Loan Report credits are reviewed individually by management to determine whether any specific reserve amount should be allocated for each respective credit. However, these loans are still performing and, accordingly, are not included in non-performing loans. Management’s philosophy is to be proactive and conservative in assigning risk ratings to loans and identifying loans to be included on the Problem Loan Report. The principal amount of loans on the Company’s Problem Loan Report (exclusive of those loans reported as non-performing) as of June 30, 2006, March 31, 2006, and June 30, 2005 totaled $99.9 million, $71.7 million and $72.0 million, respectively. The acquisition of Hinsbrook Bank accounted for $23.4 million of the

increase in Problem Loan Report loans from March 31, 2006 to June 30, 2006. Management believes these loans are performing and, accordingly, does not have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms.

LIQUIDITY

Wintrust manages the liquidity position of its banking operations to ensure that sufficient funds are available to meet customers’ needs for loans and deposit withdrawals. The liquidity to meet these demands is provided by maturing assets, sales of premium finance receivables, liquid assets that can be converted to cash and the ability to attract funds from external sources. Liquid assets refer to federal funds sold and to marketable, unpledged securities, which can be quickly sold without material loss of principal.

Please refer to the Interest-Earning Assets, Deposits, Other Funding Sources and Shareholders’ Equity discussions of this report for additional information regarding the Company’s liquidity position.

INFLATION

A banking organization’s assets and liabilities are primarily monetary. Changes in the rate of inflation do not have as great an impact on the financial condition of a bank as do changes in interest rates. Moreover, interest rates do not necessarily change at the same percentage as does inflation. Accordingly, changes in inflation are not expected to have a material impact on the Company. An analysis of the Company’s asset and liability structure provides the best indication of how the organization is positioned to respond to changing interest rates. See “Quantitative and Qualitative Disclosure About Market Risks” section of this report.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of federal securities laws. Forward-looking information in this document can be identified through the use of words such as “may,” “will,” “intend,” “plan,” “project,” “expect,” “anticipate,” “should,” “would,” “believe,” “estimate,” “contemplate,” “possible,” and “point.” The forward-looking information is premised on many factors, some of which are outlined below. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Such forward-looking statements may be deemed to include, among other things , statements relating to the Company’s projected growth, anticipated improvements in earnings, earnings per share and other financial performance measures, and management’s long-term performance goals, as well as statements relating to the anticipated effects on financial results of condition from expected developments or events, the Company’s business and growth strategies, including anticipated internal growth, plans to form additional de novo banks and to open new branch offices, and to pursue additional potential development or acquisitions of banks, wealth management entities or specialty finance businesses. Actual results could differ materially from those addressed in the forward-looking statements as a result of numerous factors, including the following:

	•		Competitive pressures in the financial services business which may affect the pricing of the Company’s loan and deposit products as well as its services (including wealth management services).

	•		Changes in the interest rate environment, which may influence, among other things, the growth of loans and deposits, the quality of the Company’s loan portfolio, the pricing of loans and deposits and net interest income.

	•		The extent of defaults and losses on our loan portfolio.

	•		Unexpected difficulties or unanticipated developments related to the Company’s strategy of de novo bank formations and openings. De novo banks typically require 13 to 24 months of operations before becoming profitable, due to the impact of organizational and overhead expenses, the startup phase of generating deposits and the time lag typically involved in redeploying deposits into attractively priced loans and other higher yielding earning assets.

	•		The ability of the Company to obtain liquidity and income from the sale of premium finance receivables in the future and the unique collection and delinquency risks associated with such loans.

	•		Failure to identify and complete acquisitions in the future or unexpected difficulties or unanticipated developments related to the integration of acquired entities with the Company.

	•		Legislative or regulatory changes or actions, or significant litigation involving the Company.

	•		Changes in general economic conditions in the markets in which the Company operates.

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

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

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

The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this filing.

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

As a continuing part of its financial strategy, the Company attempts to manage the impact of fluctuations in market interest rates on net interest income. This effort entails providing a reasonable balance between interest rate risk, credit risk, liquidity risk and maintenance of yield. Asset-liability management policies are established and monitored by management in conjunction with the boards of directors of the Banks, subject to general oversight by the Risk Management Committee of the Company’s Board of Directors. The policies establish guidelines for acceptable limits on the sensitivity of the market value of assets and liabilities to changes in interest rates.

Interest rate risk arises when the maturity or repricing periods and interest rate indices of the interest earning assets, interest bearing liabilities, and derivative financial instruments are different. It is the risk that changes in the level of market interest rates will result in disproportionate changes in the value of, and the net earnings generated from, the Company’s interest earning assets, interest bearing liabilities and derivative financial instruments. The Company continuously monitors not only the organization’s current net interest margin, but also the historical trends of these margins. In addition, management attempts to identify potential adverse changes in net interest income in future years as a result interest rates fluctuations by performing simulation analysis of various interest rate environments. If a potential adverse change in net interest margin and/or net income is identified, management would take appropriate actions with its asset-liability structure to mitigate these potentially adverse situations. Please refer to Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of the net interest margin.

Since the Company’s primary source of interest bearing liabilities is customer deposits, the Company’s ability to manage the types and terms of such deposits may be somewhat limited by customer preferences and local competition in the market areas in which the Banks operate. The rates, terms and interest rate indices of the Company’s interest earning assets result primarily from the Company’s strategy of investing in loans and securities that permit the Company to limit its exposure to interest rate risk, together with credit risk, while at the same time achieving an acceptable interest rate spread.

The Company’s exposure to interest rate risk is reviewed on a regular basis by management and the Risk Management Committees of the Boards of Directors of the Banks and the Company. The objective is to measure the effect of interest rates on net income and to adjust balance sheet and derivative financial instruments to minimize the inherent risk while at the same time maximize net interest income. Tools used by management include a standard gap analysis and a rate simulation model whereby changes in net interest income are measured in the event of various changes in interest rate indices. An institution with more assets than liabilities re-pricing over a given time frame is considered asset sensitive and will generally benefit from rising rates, and conversely, a higher level of re-pricing liabilities versus assets would generally be beneficial in a declining rate environment.

Standard gap analysis starts with contractual re-pricing information for assets, liabilities and derivative financial instruments. These items are then combined with re-pricing estimations for administered rate (NOW, savings and money market accounts) and non-rate related products (demand deposit accounts, other assets, other liabilities). These estimations recognize the relative insensitivity of these accounts to changes in market interest rates, as demonstrated through current and historical experiences. Also included are estimates for those items that are likely to materially change their payment structures in different rate environments, including residential loan products, certain commercial and commercial real estate loans and certain mortgage-related securities. Estimates for these sensitivities are based on industry assessments and are substantially driven by the differential between contractual rates and current market rates for similar products.

The following table illustrates the Company’s estimated interest rate sensitivity and periodic and cumulative gap positions as of June 30, 2006:


	Time to Maturity or Repricing
	0-90			91-365			1-5			Over 5
(Dollars in thousands)	Days			Days			Years			Years			Total

Assets:
Federal funds sold and securities purchased under resale agreements	$	106,588			—			—			—			106,588
Interest-bearing deposits with banks		11,850			—			—			—			11,850
Available-for-sale securities		274,085			334,744			518,467			825,137			1,952,433

Total liquidity management assets		392,523			334,744			518,467			825,137			2,070,871
Loans, net of unearned income ⁽¹⁾		3,791,645			1,001,897			1,199,122			175,431			6,168,095
Other earning assets		32,642			—			—			—			32,642

Total earning assets		4,216,810			1,336,641			1,717,589			1,000,568			8,271,608
Other non-earning assets		—			—			—			901,176			901,176

Total assets (RSA)	$	4,216,810			1,336,641			1,717,589			1,901,744			9,172,784


Liabilities and Shareholders’ Equity:
Interest-bearing deposits ⁽²⁾	$	3,355,754			2,410,337			979,654			130,007			6,875,752
Federal Home Loan Bank advances		14,770			44,130			152,738			168,011			379,649
Notes payable and other borrowings		110,097			—			—			—			110,097
Subordinated notes		83,000			—			—			—			83,000
Long-term debt — trust preferred securities		192,061			—			6,304			32,010			230,375

Total interest-bearing liabilities		3,755,682			2,454,467			1,138,696			330,028			7,678,873
Demand deposits		—			—			—			686,869			686,869
Other liabilities		—			—			—			85,239			85,239
Shareholders’ equity		—			—			—			721,803			721,803

Effect of derivative financial instruments:
Interest rate swaps (Company pays fixed, receives floating)		(208,497	)		—			20,504			187,993			—
Interest rate swap (Company pays floating, receives fixed)		34,854			(1,292	)		(2,512	)		(31,050	)		—

Total liabilities and shareholders’ equity including effect of derivative financial instruments (RSL)	$	3,582,039			2,453,175			1,156,688			1,980,882			9,172,784

Repricing gap (RSA — RSL)	$	634,771			(1,116,534	)		560,901			(79,138	)
Cumulative repricing gap	$	634,771			(481,763	)		79,138			—

Cumulative RSA/Cumulative RSL		118	%		92	%		101	%
Cumulative RSA/Total assets		46	%		61	%		79	%
Cumulative RSL/Total assets		39	%		66	%		78	%

Cumulative GAP/Total assets		7	%		(5	)%		1	%
Cumulative GAP/Cumulative RSA		15	%		(9	)%		1	%


(1)		Loans, net of unearned income, include mortgage loans held-for-sale and nonaccrual loans.

(2)		Non-contractual interest-bearing deposits are subject to immediate withdrawal and are included in 0-90 days.

While the gap position and related ratios illustrated in the table are useful tools that management can use to assess the general positioning of the Company’s and its subsidiaries’ balance sheets, it is only as of a point in time. As a result of the static position and inherent limitations of gap analysis, management uses an additional measurement tool to evaluate its asset-liability sensitivity that determines exposure to changes in interest rates by measuring the percentage change in net interest income due to changes in interest rates over a two-year time horizon. Management measures its exposure to changes in interest rates using several interest rate scenarios.

One interest rate scenario utilized is to measure the percentage change in net interest income assuming an instantaneous permanent parallel shift in the yield curve of 100 and 200 basis points, both upward and downward. Utilizing this measurement concept, the interest rate risk of the Company, expressed as a percentage change in net interest income over a two-year time horizon due to changes in interest rates, at June 30, 2006, December 31, 2005 and June 30, 2005, is as follows:



	+ 200			+ 100			- 100			- 200
	Basis			Basis			Basis			Basis
	Points			Points			Points			Points

Percentage change in net interest income due to an immediate 100 and 200 basis point shift in the yield curve:
June 30, 2006		0.9	%		0.4	%		(1.8	)%		(5.0	)%
December 31, 2005		1.4	%		1.1	%		(3.9	)%		(8.7	)%
June 30, 2005		8.5	%		1.9	%		(5.9	)%		(12.9	)%

These results are based solely on an instantaneous permanent parallel shift in the yield curve and do not reflect the net interest income sensitivity that may arise from other factors, such as changes in the shape of the yield curve or the change in spread between key market rates. The above results are conservative estimates due to the fact that no management actions to mitigate potential changes in net interest income are included in this simulation process. These management actions could include, but would not be limited to, delaying a change in deposit rates, extending the maturities of liabilities, the use of derivative financial instruments, changing the pricing characteristics of loans or modifying the growth rate of certain types of assets or liabilities.

One method utilized by financial institutions to manage interest rate risk is to enter into derivative financial instruments. A derivative financial instrument includes interest rate swaps, interest rate caps and floors, futures, forwards, option contracts and other financial instruments with similar characteristics. As of June 30, 2006, the Company had $243 million of interest rate swaps outstanding. See Note 9 of the Financial Statements presented under Item 1 of this report for further information on the Company’s derivative financial instruments.

During the first six months of 2006, the Company also entered into certain covered call option transactions related to certain securities held by the Company. The Company uses the covered call option transactions (rather than entering into other derivative interest rate contracts, such as interest rate floors) to mitigate the effects of net interest margin compression and increase the total return associated with the related securities. Although the revenue received from the covered call options is recorded as non-interest income rather than interest income, the increased return attributable to the related securities from these covered call options contributes to the Company’s overall profitability. The Company’s exposure to interest rate risk may be impacted by these transactions as the call options may expire without being exercised, and the Company would continue to own the underlying fixed rate securities. To mitigate this risk, the Company may acquire fixed rate term debt or use financial derivative instruments. There were no covered call options outstanding as of June 30, 2006.

ITEM 4
CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer carried out an evaluation under their supervision, with the participation of other members of management as they deemed appropriate, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as contemplated by Exchange Act Rule 13a-15. Based upon, and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective, in all material respects, in timely alerting them to material information relating to the Company (and its consolidated subsidiaries) required to be included in the periodic reports the Company is required to file and submit to the SEC under the Exchange Act.

There were no changes in the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – Other Information

Item 1A: Risk factors

There were no material changes from the risk factors set forth under Part I, Item 1A “Risk Factors” in the Company’s 2005 Form 10-K.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s Board of Directors approved the repurchase of up to an aggregate of 450,000 shares of its common stock pursuant to the repurchase agreement that was publicly announced on January 27, 2000. No shares were repurchased in the first six months of 2006, and as of June 30, 2006, 85,950 shares were available for repurchase. On July 31, 2006, the Company’s Board of Directors approved the repurchase of up to 2,000,000 shares of its outstanding common stock over the next 18 months. This repurchase plan supercedes the previously announced share repurchase plan.

Item 4: Submission of Matters to a Vote of Security Holders.

(a) The Annual Meeting of Shareholders was held on May 25, 2006.

(b) At the Annual Meeting of Shareholders, the following matters were submitted to a vote of the shareholders:

To elect four Class I Directores to hold office for a three year term, unless the proposal in paragraph (3) below is adopted, in which case such Directors shall serve until the Annual Meeting of Shareholders in 2007:


	Votes		Withheld
Director Nominees	For		Authority
James B. McCarthy		21,809,849		556,568
Thomas J. Neis		22,057,610		308,807
J. Christopher Reyes		22,134,004		232,413
Edward J. Wehmer		22,148,752		217,665

To elect one Class II Director to hold office until the Annual Meeting of Shareholders in 2007:


	Votes		Withheld
Director Nominees	For		Authority
Allan E. Bulley, Jr.		22,046,606		319,811

All director nominees were elected at the Annual Meeting. The following Class II and Class III directors continued to serve after the Annual Meeting:


Continuing Director	Director Class		Term Expires

Bruce K. Crowther		Class II		2007
Bert A. Getz, Jr.		Class II		2007
Albin F. Moschner		Class II		2007
Ingrid S. Stafford		Class II		2007
Peter D. Crist		Class III		2008
Joseph F. Damico		Class III		2008
John S. Lillard		Class III		2008
Hollis W. Rademacher		Class III		2008
John J. Schornack		Class III		2008

A proposal to adopt an amendment to the Company’s Amended and Restated Articles of Incorporation to provide for the annual election of all Directors, to be phased in over three years:


Votes For	Votes Against		Abstentions		Broker Non-Votes

21,622,950		695,375		48,092		125,923

			This proposal received the requisite votes of at least 85% of the voting power of the outstanding shares of stock of the Company entitled to vote at the 2006 Annual Meeting to pass.

	4.		Ratification of the appointment of Ernst & Young LLP to serve as the independent registered public accounting firm for the year 2006:


Votes For	Votes Against		Abstentions		Broker Non-Votes

21,929,713		407,217		29,487		125,923

Item 6: Exhibits.

(Exhibits marked with a “*” denote management contracts or compensatory plans or arrangements)

(a) Exhibits

3.1		Amended and Restated Articles of Incorporation of Wintrust Financial Corporation, as amended.

3.2		Amended and Restated By-laws of Wintrust Financial Corporation, as amended.

3.3		Statement of Resolution Establishing Series of Junior Serial Preferred Stock A of Wintrust Financial Corporation (incorporated by reference to Exhibit 3.2 of the Company’s Form 10-K for the year ended December 31, 1998).

4.1		Certain instruments defining the rights of holders of long-term debt of the Company and certain of its subsidiaries, none of which authorize a total amount of indebtedness in excess of 10% of the total assets of the Company and its subsidiaries on a consolidated basis, have not been filed as Exhibits. The Company hereby agrees to furnish a copy of any of these agreements to the Commission upon request.

10.1		Employment Agreement entered into between Wintrust Financial Corporation and Thomas P. Zidar, Executive Vice President.*

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of President and Chief Executive Officer and Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	WINTRUST FINANCIAL CORPORATION
		(Registrant)

Date: August 9, 2006		/s/ DAVID L. STOEHR David L. Stoehr
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 3.1

AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
WINTRUST FINANCIAL CORPORATION
AS AMENDED

Wintrust Financial Corporation (the “Corporation”) was incorporated on December 30, 1992 under the name Wintrust Investment Corporation. On March 18, 1993, the name of the Corporation was changed to Wintrust Investments, Inc. On May 27, 1994, the name of the Corporation was changed to North Shore Community Bancorp, Inc. The Articles of Incorporation be and the same hereby are amended and restated to read as follows:

** ARTICLE ONE : The name of the Corporation is Wintrust Financial Corporation.

* ARTICLE TWO : The name and address of the registered agent and registered office are:


Registered Agent	—	John F. Purtill, Esq.

Registered Office	—	1515 East Woodfield Road
		Suite 250
		Schaumburg, Illinois 60173-5431

** ARTICLE THREE : Purpose or purposes for which the Corporation is organized: The transaction of any or all lawful businesses for which corporations may be incorporated under the Illinois Business Corporation Act of 1983, as amended (the “BCA”).

** ARTICLE FOUR, Paragraph 1 : Authorized Shares, Issued Shares and Consideration Received. The class, number of shares, and the par value, if any, of each class of stock which the Corporation shall have authority to issue shall be as follows:


		Number of	Number of
Class	Par Value Per Share	Shares Authorized	Shares Issued
Common	no par value	60,000,000	23,529,518
Preferred	no par value	20,000,000	0

The Paid-In Capital is: $12,513,980

Shares of the Corporation may be issued from time to time in such manner, amounts and proportions and for such consideration as shall be fixed by the Board of Directors of the Corporation.

Paragraph 2 : The preferences, qualifications, limitations, restrictions and the special or relative rights in respect of the shares of each class are as follows:

COMMON STOCK

(a) Dividends . Subject to any rights to receive dividends to which the holders of the shares of the Preferred Stock may be entitled, the holders of shares of Common Stock shall be entitled to receive dividends, if and when declared payable from time to time by the Board of Directors from any funds legally available therefor.

(b) Liquidation . In the event of any dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, after there shall have been paid to the holders of shares of Preferred Stock the full amounts to which they shall be entitled, the holders of the then outstanding shares of Common Stock shall be entitled to receive, pro rata, all of the remaining assets of the Corporation available for distribution to its shareholders. The Board of Directors may distribute in kind to the holders of the shares of Common Stock such remaining assets of the Corporation or may sell, transfer or otherwise dispose of all or any part of such remaining assets to any other corporation, trust or other entity and receive payment therefor in cash, stock or obligations of such other corporation,

trust or entity, or any combination thereof, and may sell all or any part of the consideration so received and distribute any balance thereof in kind to holders of the shares of Common Stock. The merger or consolidation of the Corporation into or with any other corporation, or the merger of any other corporation into it, or any purchase or redemption of shares of stock of the Corporation of any class, shall not be deemed to be a dissolution, liquidation or winding up of the Corporation for the purpose of this paragraph (b).

(c) Voting . Each outstanding share of Common Stock of the Corporation shall entitle the holder thereof to one vote on each matter submitted to a vote at a meeting of the shareholders.

PREFERRED STOCK

The Board of Directors is expressly authorized to adopt, from time to time, a resolution or resolutions providing for the issuance of Preferred Stock in one or more series, to fix the number of shares in each such series and to fix the designations and powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof, of each such series. The authority of the Board of Directors with respect to each such series shall include a determination of the following (which may vary as between the different series of Preferred Stock):

(a) The number of shares constituting the series and the distinctive designation of the series;

(b) The dividend rate on the shares of the series, the conditions and dates upon which dividends thereon shall be payable, the extent, if any, to which dividends thereon shall be cumulative, and the relative rights of preference, if any, of payment of dividends thereon;

(c) Whether or not the shares of the series are redeemable and, if redeemable, including the times during which they shall be redeemable and the amount per share payable in case of redemption, which amount may, but need not, vary according to the time and circumstances of such action;

(d) The amount payable in respect of the shares of the series, in the event of any liquidation, dissolution or winding up of the Corporation, which amount may, but need not, vary according to the time or circumstances of such action, and the relative rights of preference, if any, of payment of such amount;

(e) Any requirement as to a sinking fund for the shares of the series, or any requirement as to the redemption, purchase or other retirement by the Corporation of the shares of the series;

(f) The right, if any, to exchange or convert shares of the series into shares of any other series or class of stock of the Corporation and the rate or basis, time, manner and condition of exchange or conversion;

(g) The voting rights, if any, to which the holders of shares of the series shall be entitled in addition to the voting rights provided by law; and

(h) Any other term, condition or provision with respect to the series not inconsistent with the provisions of this Article Four or any resolution adopted by the Board of Directors pursuant thereto.

** ARTICLE FIVE : No holder of any class of shares of the Corporation shall have any cumulative voting rights in the election of directors or in any other circumstances.

** ARTICLE SIX : No holder of any class of shares of the Corporation shall be entitled as such as a matter of right to subscribe for or purchase any part (a) of any shares of any class of the Corporation whether now authorized or hereafter created, or (b) of any securities whether non-convertible, or convertible into or evidencing the right to purchase or acquire shares of any class of the Corporation, whether now authorized or hereafter created and whether in either case issued or sold for cash, property, services or otherwise.

** ARTICLE SEVEN : Any action required or permitted to be taken by the holders of any class of shares of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders.

** ARTICLE EIGHT : No director of the Corporation shall be liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director except for liability (a) for any breach of the director’s duty of loyalty to the Corporation or its shareholders, (b) for acts or omissions not in good faith or that involve intentional misconduct of a knowing violation of law, (c) under Section 8.65 of the BCA, as the same exists or hereafter may be amended, or (d) for any transaction from which the director derived an improper personal benefit.

** ARTICLE NINE, Paragraph 1 : The Corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against liabilities and expenses reasonably incurred or paid by such person in connection with such action, suit or proceeding. The Corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against liabilities and expenses reasonably incurred or paid by such person in connection with such action, suit or proceeding. The words “liabilities” and “expenses” shall include, without limitation: liabilities, losses, damages, judgments, fines, penalties, amounts paid in settlement, expenses, attorneys’ fees and costs. Expenses incurred in defending a civil, criminal, administrative, investigative or other action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding in accordance with the provisions of Section 8.75 of the BCA.

The indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which any person indemnified may be entitled under any statute, by-law, agreement, vote of shareholders, or disinterested directors or otherwise, both as to action in his official capacity and as to action in any other capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

Paragraph 2 : The Corporation may purchase and maintain insurance on behalf of any person referred to in the preceding paragraph against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article or otherwise.

Paragraph 3 : For purposes of this Article, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

Paragraph 4 : The provisions of this Article shall be deemed to be a contract between the Corporation and each director or officer who serves in any such capacity at any time while this Article and the relevant provisions of the BCA, or other applicable law, if any, are in effect, and any repeal or modification of any such law or of this Article shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts.

Paragraph 5 : For purposes of this Article, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to any employee benefit plan, its participants, or beneficiaries; and a person who

acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the Corporation.

** ARTICLE TEN : The number of directors of the Corporation shall be that number set forth in the By-laws, as may be increased or decreased from time to time; provided , however, that such number shall never be less than six (6).

Paragraph 1 : At the 2006 annual meeting of shareholders, the successors of the directors whose terms expire at that meeting shall be elected for a term expiring at the 2007 annual meeting of shareholders and until such director’s successor shall have been elected and qualified. At the 2007 annual meeting of shareholders, the successors of the directors whose terms expire at that meeting shall be elected for a term expiring at the 2008 annual meeting of shareholders and until such director’s successor shall have been elected and qualified. At each annual meeting of shareholders in 2008 and thereafter, all directors shall be elected to hold office for a term expiring at the next annual meeting of shareholders and until such director’s successor shall have been elected and qualified.

Paragraph 2 : Directors need not be residents of Illinois or shareholders of the Corporation.

** ARTICLE ELEVEN : The Corporation expressly elects to be governed by Section 7.85 of the BCA as may be amended from time to time.

** ARTICLE TWELVE : The Corporation expressly elects not to be governed by Section 11.75 of the BCA.

** ARTICLE THIRTEEN : Notwithstanding any other provision of these Articles of Incorporation or the By-laws of the Corporation (and not withstanding the fact that a lessor percentage may be specified by law, these Articles of Incorporation or the By-laws of the Corporation), the affirmative vote of the holders of 85% or more of the voting power of the then-outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend or repeal, or adopt any provision inconsistent with Articles Five, Six, Seven, Eight, Nine, Ten, Eleven, Twelve and this Article Thirteen.


*		Restated only

**		Amended and Restated

EXHIBIT -3.2

AMENDED AND RESTATED BY-LAWS

WINTRUST FINANCIAL CORPORATION

(AN ILLINOIS CORPORATION)

AS AMENDED

ARTICLE I

OFFICES

Wintrust Financial Corporation (the “corporation”) shall continuously maintain in the State of Illinois a registered office and a registered agent whose office is identical with such registered office, and may have other offices within or without the state.

ARTICLE II

SHAREHOLDERS

SECTION 2.1 ANNUAL MEETING. An annual meeting of the shareholders shall be held on the fourth Thursday in May of each year, or such other date as designated by the board of directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the directors shall not be elected at the annual meeting, or at any adjournment thereof, the board of directors shall cause the election to be held as soon thereafter as practicable.

SECTION 2.2 SPECIAL MEETINGS. Special meetings of the shareholders may be called by the board of directors, the president or by the holders of not less than one-fifth of all the outstanding shares entitled to vote on the matter for which the meeting is called, for the purpose or purposes stated in the call of the meeting.

SECTION 2.3 PLACE OF MEETING. The board of directors may designate any place as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be at the office of the registered agent of the corporation in the State of Illinois.

SECTION 2.4 NOTICE OF MEETINGS. Written notice stating the place, date, and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than ten nor more than sixty days before the date of the meeting, or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange or assets, not less than twenty nor more than sixty days before the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officer or persons calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder’s address as it appears on the records of the corporation, with postage thereon prepaid. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken.

SECTION 2.5 NOTIFICATION OF SHAREHOLDER PROPOSED BUSINESS. At an annual or special meeting of shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To properly bring business before an annual or special meeting of shareholders, written notice of such shareholder’s intent to make such proposal or proposals, including the nomination for election of a director, must be given either by personal delivery or by United States mail postage prepaid and received by the Secretary of the corporation not later than the following dates: (i) with respect to an annual meeting of shareholders, 60 days in advance of such meeting if such meeting is to be held on a day which is within 30 days preceding the anniversary date of the previous year’s annual meeting or 90 days in advance of such meeting if such meeting is to be held on or after the anniversary of the previous year’s annual meeting; and (ii) with respect to any other annual or special meeting of shareholders, the close of business on the tenth day following the date of public disclosure of the date of such meeting. A shareholder’s notice to the Secretary shall set forth as to each item of business the shareholder proposes to bring before such meeting: (a) a brief description of the business desired to be brought before the meeting, and in the case of a nomination for election of director, such nominee’s name and qualifications, and the reasons for conducting the business at the meeting; (b) the name and record address of the shareholder who proposes such business; (c) the number of shares of stock of the Corporation beneficially owned by such shareholder; and (d) a description of all arrangements or understandings between the shareholder and any other person or persons (naming such person or persons) pursuant to which the proposal or proposals are to be made by the shareholder and any material interest of the shareholder in the business being proposed. The chairman of the meeting may refuse to acknowledge the proposal of any shareholder not made in compliance with this Section 2.5.

Notwithstanding anything in the by-laws to the contrary, no business shall be brought before or conducted at an annual or special meeting by a shareholder except in accordance with the procedures set forth in this Section 2.5; provided, however, that nothing in this Section 2.5 shall be deemed to preclude discussion by any shareholder of any business properly brought before a shareholder meeting.

SECTION 2.6 POSTPONEMENT AND ADJOURNMENT OF MEETINGS. Prior to any annual or special meeting of shareholders being called to order, the board of directors may postpone such previously scheduled annual or special meeting of shareholders at any time whether or not a quorum is present without further notice. The board of directors may adjourn any previously scheduled annual or special meeting of shareholders at any time whether or not a quorum is present without further notice.

SECTION 2.7 FIXING OF RECORD DATE. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to receive payment of any dividend, or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action, the board of directors of the corporation may fix in advance a record date which shall not be more than sixty days, and for a meeting of shareholders, not less than ten days, or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than twenty days, before the date of such meeting. If no record date is fixed, the record date for the determination of shareholders shall be the date on which the notice of the meeting is mailed, and the record date for the determination of shareholders for any other purpose shall be the date on which the board of directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting.

SECTION 2.8 VOTING LISTS. The officer or agent having charge of the transfer books for shares of the corporation shall make, within twenty days after the record date for a meeting of shareholders or ten days before such meeting, whichever is earlier, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of the shareholder, which list, for a period of ten days prior to such meeting,

shall be kept on file at the registered office of the corporation and shall be open to inspection by any shareholder for any purpose germane to the meeting, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and may be inspected by any shareholder during the whole time of the meeting. The original share ledger or transfer books, or a duplicate thereof kept in this State, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book or to vote at any meeting of shareholders.

SECTION 2.9 QUORUM. The holders of a majority of the votes of shares of the corporation entitled to vote on a matter, present in person or represented by proxy, shall constitute a quorum at any meeting of shareholders; provided that if less than a majority of the outstanding shares are represented at said meeting, a majority of the shares so represented may adjourn the meeting at any time without further notice. If a quorum is present, the affirmative vote of the majority of the votes of the shares represented at the meeting and entitled to vote shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by The Business Corporation Act of the State of Illinois (the “BCA”), the articles of incorporation or these by-laws. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. Withdrawal of shareholders from any meeting shall not cause failure of a duly constituted quorum at that meeting.

SECTION 2.10 PROXIES. Each shareholder entitled to vote at a meeting of shareholders or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such shareholder by proxy executed in writing by such shareholder or his or her duly authorized attorney-in-fact, but no such proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.

SECTION 2.11 VOTING OF SHARES. Each outstanding common share shall be entitled to one vote upon each matter submitted to vote at a meeting of shareholders. Any preferred stock shall have such rights, voting or otherwise, as shall be determined by the board of directors and as set forth in a certificate of designation filed with the Illinois Secretary of State.

SECTION 2.12 VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of another corporation, domestic or foreign, may be voted by any officer, agent, proxy or other legal representative authorized to vote such shares under the law of incorporation of such corporation.

Shares standing in the name of a deceased person, a minor ward or a person under legal disability, may be voted by the administrator, executor or court appointed guardian of such person or such person’s estate, either in person or by proxy without a transfer of such shares into the name of such administrator, executor or court appointed guardian. Shares standing in the name of a trustee may be voted by the trustee, either in person or by proxy.

Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into the receiver’s name if authority so to do be contained in the appropriate order of the court by which such receiver was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred.

One or more shareholders may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote or otherwise represent their shares, for a stated duration, which may be perpetual or for a fixed period or may be determined by the occurrence of a stated condition or conditions, by

entering into a written voting trust agreement specifying the terms and conditions of the voting trust, and by transferring the subject shares to such trustee or trustees pursuant to the agreement. If the agreement or any amendment thereto does not contain a stated duration, the trust shall terminate ten years after the agreement first became effective, No voting trust agreement shall be effective until a counterpart of the agreement is deposited with the corporation at its registered office. The counterpart of the voting trust agreement so deposited with the corporation shall be subject to the same right of examination by a shareholder of the corporation, in person or by agent or attorney, as are the books and records of the corporation, and shall be subject to examination by any holder of a beneficial interest in the voting trust, either in person or by agent or attorney, at any reasonable time for any proper purpose.

Shares of its own stock belonging to the corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time, but shares of its own stock held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares at any given time.

SECTION 2.13 ELIMINATION OF CUMULATIVE VOTING RIGHTS. The holders of all shares of stock having a right to vote in the corporation shall not be entitled to cumulative voting rights in the election of directors of the corporation, or for any other reason or purpose whatsoever.

SECTION 2.14 INSPECTORS. At any meeting of shareholders, the presiding officer may, or upon the request of any shareholder shall, appoint one or more persons as inspectors for such meeting.

Such inspectors shall ascertain and report the number of shares represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the shareholders.

Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there be more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

SECTION 2.15 ACTION BY SHAREHOLDERS. Any action required or permitted to be taken at a meeting of the shareholders must be effected at a duly called annual or special meeting and may not be effected by any consent in writing by such holders.

SECTION 2.16 VOTING BY BALLOT. Voting on any question or in any election may be by voice unless the presiding officer shall order or any shareholder shall demand that voting be by ballot.

ARTICLE III

DIRECTORS

SECTION 3.1 GENERAL POWERS. The business of the corporation shall be managed by its board of directors.

SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. T The number of directors of the corporation shall be fourteen (14). The number of directors may be increased or decreased (provided, however, that such number shall never be less than nine (9)) from time to time by the amendment of this Section 3.2 by the shareholders or by a resolution adopted by the majority of members of the board of

directors as provided in this Section 3.2; but no decrease shall have the effect of shortening the term of any incumbent director.

Directors need not be residents of Illinois or shareholders of the corporation.

Advance notice of shareholder nominations for the election of directors and of business to be brought by shareholders before any meeting of the shareholders of the corporation shall be given in the manner provided in these by-laws.

SECTION 3.3 REGULAR MEETINGS. A regular meeting of the board of directors shall be held without other notice than this by-law, either immediately before or after the annual meeting of shareholders, or at such time as may be determined by the board of directors. The board of directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution.

SECTION 3.4 SPECIAL MEETINGS. Special meetings of the board of directors may be called by or at the request of the chairman of the board of directors, president or a majority of the then acting directors. The person or persons authorized to call special meetings of the board of directors may fix any place as the place for holding any special meeting of the board of directors called by them.

SECTION 3.5 NOTICE. Notice of any special meeting shall be given at least two (2) days previous thereto by written notice to each director at his or her business address. If mailed, notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegram company. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.

SECTION 3.6 QUORUM. A majority of the number of directors then in office, but in no event less than a majority of the minimum number of directors fixed by these by-laws, shall constitute a quorum for the transaction of business at any meeting of the board of directors; provided that if less than a majority of such number of directors are present at said meeting, a majority of the directors present may adjourn the meeting at any time without further notice.

SECTION 3.7 MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the act of a greater number is required by statute, these by-laws, or the articles of incorporation.

SECTION 3.8 VACANCIES. Any vacancy occurring in the board of directors and any directorship to be filled by reason of an increase in the authorized number of directors may be filled at an annual or special meeting of shareholders called for that purposes or, if such vacancy arises between meetings of shareholders, such vacancy may only be filled by a majority vote of the directors then in office, though less than a quorum. A director elected by the shareholders to fill a vacancy shall hold office for the balance of the term for which he or she was elected. A director appointed to fill a vacancy shall serve until the next meeting of shareholders at which directors are to be elected.

SECTION 3.9 ACTION WITHOUT A MEETING. Any action required to be taken at a meeting of the board of directors, or any other action which may be taken at a meeting of the board of directors, or of any committee thereof may be taken without a meeting if a consent in writing, setting forth the action

so taken, shall be signed by all the directors entitled to vote with respect to the subject matter thereof, or by all the members of such committee, as the case may be. Any such consent signed by all the directors or all the members of the committee shall have the same effect as a unanimous vote, and may be stated as such in any document filed with the Secretary of State or with anyone else.

SECTION 3.10 COMPENSATION. The board of directors, by the affirmative vote of a majority of directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all directors for services to the corporation as directors, officers, or otherwise. By resolution of the board of directors the directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and of committees thereof. No such payment previously mentioned in this section shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

SECTION 3.11 COMMITTEES. The board of directors, by resolution, may create one or more committees and appoint members of the board of directors to serve on the committee or committees. Each committee shall have two or more members, who shall serve at the pleasure of the board of directors. Unless the appointment by the board of directors requires a greater number, a majority of any committee shall constitute a quorum and a majority of a quorum is necessary for committee action. A committee may act by unanimous consent in writing without a meeting and, subject to the provisions of these by-laws or action by the board of directors, the committee by majority vote of its members shall determine the time and place of meetings and the notice required therefor. To the extent specified by the board of directors, each committee may exercise all the authority of the board of directors in the management of the corporation as permitted by the BCA. Each committee shall keep regular minutes of its proceedings and report the same to the board of directors.

ARTICLE IV

OFFICERS

SECTION 4.1 NUMBER. The officers of the corporation shall be the president, one or more executive vice-presidents, senior vice-presidents and vice-presidents (the number thereof to be determined by the board of directors), a treasurer, a secretary, and such assistant treasurers, assistant secretaries or other officers as may be elected by the board of directors. Any two or more offices may be held by the same person, except the offices of president and secretary; provided, however, that in cases where all of the shares of the corporation are owned of record by one shareholder and these by-laws provide that the number of directors shall be one, the offices of president and secretary may be held by the same person.

SECTION 4.2 ELECTION AND TERM OF OFFICE. The officers of the corporation shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor shall have been duly elected and shall have qualified or until the death, resignation, or removal (in the manner hereinafter provided) of such officer. Election of an officer shall not of itself create contract rights.

SECTION 4.3 REMOVAL. Any officer elected or appointed by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

SECTION 4.4 [RESERVED]

SECTION 4.5 PRESIDENT. The president shall be the chief executive officer of the corporation. Subject to the control of the board of directors, he shall in general supervise the business and affairs of the corporation and he shall see that resolutions and directions of the board of directors are carried into effect except when that responsibility is specifically assigned to some other person by the board of directors. Unless there is a chairman of the board elected by the board from among its members who is present and who has the duty to preside, the president shall preside at all meetings of the shareholders and, if a director, at all meetings of the board of directors. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws or where otherwise required by law, the president may execute for the corporation any contracts, deeds, mortgages, bonds or other instruments which the board of directors has authorized to be executed or the execution of which is in the ordinary course of the corporation’s business, and he may accomplish such execution either under or without the seal of the corporation and either alone or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors or these by-laws. In general, he shall perform all duties incident to the office of president and such other duties as from time to time may be prescribed by the board of directors.

SECTION 4.6 THE VICE-PRESIDENTS. The executive vice-president, senior vice-president, or vice-president (or in the event there be more than one executive vice-president, senior vice-president or vice-president, each of the executive vice-presidents, senior vice-presidents or vice-presidents (collectively the “vice-presidents”)) shall assist the president in the discharge of the president’s duties as the president may direct and shall perform such other duties as from time to time may be assigned by the president or by the board of directors. In the president’s absence, inability or refusal to act, the executive vice-president, senior vice-president or vice-president (or in the event there be more than one executive vice-president, senior vice-president or vice-president, each of the executive vice-presidents, senior vice-presidents or vice-presidents in the order designated by the board of directors, or by the president if the board of directors has not made such a designation, or in the absence of any designation, then in the order of seniority of tenure of the executive vice-president, the senior vice-president or vice-president) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions on the president. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, the vice-presidents (or each of them if there is more than one) may execute for the corporation certificates for its shares and any contracts, deeds, mortgages, bonds or other instruments which the board of directors has authorized to be executed, and may further accomplish such execution either under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors according to the requirements of the form of the instrument.

SECTION 4.7 THE TREASURER. The treasurer shall have charge and custody of all funds and securities of the corporation, and be responsible therefor and for the receipt and disbursement thereof; and perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned by the president or by the board of directors. If required by the board of directors, the treasurer shall give a bond for the faithful discharge of all duties in such sum and with such surety or sureties as the board of directors may determine.

SECTION 4.8 THE SECRETARY. The secretary shall: (a) record the minutes of the shareholders’ and of the board of directors’ meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation; (d) keep a register of the post-office address of each shareholder which shall be furnished to the secretary by such shareholder; (e)

sign with the president, or a vice-president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these by-laws; (f) have general charge of the stock transfer books of the corporation; and (g) perform all duties incident to the office of secretary and such other duties as from time to time may be assigned by the president or by the board of directors.

SECTION 4.9 ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant treasurers and assistant secretaries shall perform such duties as shall be assigned to them by the treasurer or the secretary, respectively, or by the president or the board of directors. The assistant secretaries may sign with the president, or a vice-president, or any other officer thereunto authorized by the board of directors, certificates or shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, according to the requirements of the form of the instrument except when a different mode of execution is expressly prescribed by the board of directors or these by-laws. The assistant treasurers shall, if required by the board of directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the board of directors shall determine.

SECTION 4.10 SALARIES. The salaries of the officers shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such salary by reason of the fact that such officer is also a director of the corporation.

ARTICLE V

CONTRACTS, LOANS, CHECKS DEPOSITS

SECTION 5.1 CONTRACTS. The board of directors may authorize any officer, officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

SECTION 5.2 LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the board of directors. Such authority may be general or confined to specific instances.

SECTION 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the board of directors.

SECTION 5.4 DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the board of directors may select.

ARTICLE VI

INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS

SECTION 6.1 GENERALLY. The corporation shall have power to indemnify any persons who were or are parties or are threatened to be made parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that they are or were directors, officers, employees or agents of the corporation, or are or were serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with such action, suit or proceeding if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. The corporation shall have the power to indemnify any persons who were or are parties or are threatened to be made parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that they are or were directors, officers, employees or agents of any subsidiary corporation or corporations (individually the “subsidiary” and collectively the “subsidiaries”) against expenses, (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with such action, suit or proceeding if they acted in good faith and in a manner that they reasonably believed to be in or not opposed to the best interests of the corporation and/or the respective subsidiary or subsidiaries, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the persons did not act in good faith and in a manner which they reasonably believed to be in or not opposed to the best interests of the corporation, a subsidiary or the subsidiaries, as the case may be, and with respect to any criminal action or proceeding, had reasonable cause to believe that their conduct was unlawful.

SECTION 6.2 DERIVATIVE ACTIONS. The corporation shall have power to indemnify any persons who were or are parties or are threatened to be made parties to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that they are or were directors, officers, employees or agents of the corporation, or are or were serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with the defense or settlement of such action or suit if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such persons shall have been adjudged to be liable for negligence or misconduct in the performance of their duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability but in view of all the circumstances of the case, such persons are fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. The corporation shall have the power to indemnify any person or persons who were or are parties or are threatened to be made parties to any threatened, pending or completed action or suit by or in the or right of any of the subsidiaries to procure a judgment in its favor by reason of the fact that such persons are or were directors, officers, employees or agents of any one or more of the subsidiaries, or are or were serving at the request of the corporation as directors, officer, employees or agents of such subsidiary or subsidiaries, against expenses (including attorneys’ fees), actually and reasonably incurred by them in connection with the defense or settlement of such action or suit if they acted in good faith and in a matter they reasonably believe to be in or not opposed to the best interests of the subsidiary or subsidiaries, as the case may be, except that no indemnification shall be made with respect to any claim, issue or matter as to which such persons shall have been adjudged to be liable for negligence or misconduct in the performance of their duty to the subsidiary or subsidiaries, as the case may be, unless and only to the extent that the court in which such action or suit was brought

shall determine upon application that despite the adjudication of liability but in view of all of the circumstances of the case, such persons are fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

SECTION 6.3 MANDATORY INDEMNIFICATION. To the extent that a present or former director, officer or employee of the corporation, or any subsidiary or subsidiaries, as the case may be, has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation.

SECTION 6.4 FIDUCIARY DUTY. A director of the corporation shall not be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the director’s duty of loyalty to the corporation or its shareholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 8.65 of the BCA, as the same exists or hereafter may be amended, or (d) for any transaction from which the director derived an improper personal benefit.

SECTION 6.5 AUTHORIZATION. Any indemnification under Sections 6.1 and 6.2 (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standards of conduct set forth in Sections 6.1 and 6.2. Such determination shall be made (a) by the board of directors by a majority vote of directors who are not parties to such action, suit or proceeding, even though less than a quorum, (b) by a committee of directors designated by a majority vote of the directors, even though less than a quorum, (c) if there are no such directors, or if the directors so direct, by independent legal counsel in a written opinion, or (d) by the shareholders.

SECTION 6.6 EXPENSES. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the board of directors in the specific case, upon receipt of an undertaking by or on behalf of the director or officer, to repay such amount, if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the corporation as authorized in these by-laws.

SECTION 6.7 NONEXCLUSIVE. The indemnification provided by this article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by him or her in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of this article.

ARTICLE VII

CERTIFICATES FOR SHARES
AND THEIR TRANSFER

SECTION 7.1 CERTIFICATES FOR SHARES. Certificates representing shares of the corporation shall be signed by the chairman of the board of directors, if any, or the president or a vice president and by the treasurer or an assistant treasurer or the secretary or an assistant secretary and may be sealed with the seal, or a facsimile of seal, of the corporation. If a certificate is countersigned by a transfer agent or a registrar, other than the corporation itself or its employee, any other signatures or countersignature on the certificate may be facsimile.

If the corporation is authorized and does issue shares of more than one class, every certificate representing shares issued by the corporation shall set forth on the face or back of the certificate a full summary or statement of all of the designations, preferences, qualifications, limitations, restrictions, and special or relative rights of the shares of each class authorized to be issued. If the corporation is authorized to issue any preferred or special class in series, every certificate representing such shares issued by the corporation shall set forth on the face or back of the certificate a full summary or statement of all of the variations in the relative rights and preferences between the shares of each such series so far as the same have been fixed and determined and the authority of the board of directors to fix and determine the relative rights and preferences of subsequent series. Such statement may be omitted from the certificate if it shall be set forth upon the face or back of the certificate that such statement, in full, will be furnished by the corporation to any shareholder upon request and without charge.

Each certificate representing shares shall also state that the corporation is organized under the laws of the State of Illinois; the name of the person to whom issued; the number and class of shares and the designation of the series, if any, which such certificate represents; the par value of each share represented by such certificate, or a statement that such shares are without par value. Each certificate representing shares shall be consecutively numbered or otherwise identified.

The name and address of each shareholder, the number and class of shares held and the date on which the certificates for shares were issued shall be entered on the books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation. No certificate shall be issued for any share until such share is fully paid.

SECTION 7.2 LOST CERTIFICATES. If a certificate representing shares of the corporation is alleged to have been lost, stolen or destroyed, the board of directors may in its discretion, except as may be required by law, direct that a new certificate be issued. In connection with the issuance of any such new certificate, the board of directors may require the owner of the lost, stolen or destroyed certificate or his or her legal representative to provide such indemnification, and may impose such other reasonable requirements, as the shall deem necessary or desirable.

SECTION 7.3 TRANSFERS OF SHARES. Upon surrender to the corporation or the transfer agent of the corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, a new certificate shall be issued to the person entitled thereto, and the old certificate shall be cancelled and the transaction recorded upon the books of the corporation.

ARTICLE VIII

FISCAL YEAR

The fiscal year of the corporation shall begin on January 1 and end on December 31 of each year.

ARTICLE IX

DIVIDENDS

The board of directors may from time to time declare, and the corporation may pay, dividends on its outstanding and treasury shares in such manner and upon such terms and conditions as provided by law and the articles of incorporation.

ARTICLE X

SEAL

The corporate seal, if any, shall have inscribed thereon the name of the corporation and the words “Corporate Seal, Illinois.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.

ARTICLE XI

WAIVER OF NOTICE

Whenever any notice is required to be given under these by-laws or under the provisions of the articles of incorporation or under the provisions of the BCA, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

ARTICLE XII

AMENDMENTS

The power to make, alter, amend, or repeal the by-laws of the corporation shall be vested in the shareholders or the board of directors by a resolution adopted by a majority of the board of directors. The by-laws may contain any provisions for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation.

ARTICLE XIII

REPAYMENT OF DISALLOWED REIMBURSEMENTS
OR EXCESS COMPENSATION

Any payments made to a director, officer or employee of the corporation, including but not limited to, salary, commission, bonus, interest, rent, travel, or entertainment expense incurred by such director, officer or employee, which shall be disallowed in whole or in part as a deductible expense by the Internal Revenue Service, shall be reimbursed by such person to the corporation to the full extent of such disallowance.

It shall be the duty of the board of directors to enforce payment of all such amounts disallowed. In lieu of payment by such person, subject to the determination of the board of directors, proportional amounts may be withheld from the future compensation payments of such person until the amount owed to the corporation has been recovered.

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made by and between WINTRUST FINANCIAL CORPORATION (“Employer” or “Wintrust” ), a bank holding company, and THOMAS P. ZIDAR, an individual resident in the State of Illinois (“Executive”) as of June 6, 2006.

WITNESSETH THAT:

WHEREAS, Employer is engaged in the business of general banking;

WHEREAS, Executive has particular expertise and knowledge concerning the business of Employer and its operations and is a valued member of Employer’s senior management;

WHEREAS, by virtue of Executive’s employment with Employer, Executive will become acquainted with certain confidential information regarding the services, customers, methods of doing business, strategic plans, marketing, and other aspects of the business of Employer, Wintrust or its Affiliates;

WHEREAS, Employer and Executive desire to state and set forth in this Agreement the terms, conditions and obligations of the parties with respect to such employment effective as of the date first written above (the “Effective Date”) and this Agreement is intended by the parties to supersede all previous agreements and understanding, whether written or oral, concerning such employment.

NOW THEREFORE, in consideration of the covenants and agreements contained herein, of Executive’s employment, of the compensation to be paid by Employer for Executive’s services, and of Employer’s other undertakings in this Agreement, the parties hereto do hereby agree as follows:

1. Scope of Employment . Executive will be employed as Executive Vice President/Market Head-Wealth Management of Employer and shall perform such duties as may be assigned to Executive by the Chief Executive Officer of and the Board of Directors of Employer in such position. Executive agrees that during Executive’s employment Executive will be subject to and abide by the written policies and practices of Employer and Wintrust. Executive also agrees to assume such new or additional positions and responsibilities as Executive may from time to time be assigned for or on behalf of Employer, Wintrust, or any Affiliate of Wintrust. Notwithstanding the foregoing, during the Term (as defined in Section 8 herein) of this Agreement, Executive will not be required without Executive’s consent to move Executive’s principal business location to another location more than a 35 mile radius from Executive’s principal business location. For purposes of this Agreement, the term “Affiliate” shall include but not be limited to the entities listed in Exhibit A to this Agreement and any subsidiary of any of such entities and shall further include any present or future affiliate of any of them as defined by the rules and regulations of the Federal Reserve Board. In the event Executive shall perform services for Wintrust or any Affiliate in addition to serving as Executive Vice President/Market Head-Wealth Management of Employer, the provisions of this Agreement

shall also apply to the performance of such services by Executive on behalf of Wintrust or any Affiliate.

2. Compensation and Benefits . Executive will be paid such base salary as may from time to time be agreed upon between Executive and Employer. Executive will be entitled to coverage under such compensation plans, insurance plans and other fringe benefit plans and programs as may from time to time be established for employees of Wintrust and its Affiliates in accordance with the terms and conditions of such plans and programs. Executive shall also be eligible to participate in the Wintrust 1997 Stock Incentive Plan or any successor Plan thereto.

3. Extent of Service . Executive shall devote Executive’s entire time, attention and energies to the business of Employer during the Term of this Agreement; but this shall not be construed as preventing Executive from (a) investing Executive’s personal assets in such form or manner as will not require any services on the part of Executive in the operation or the affairs of the corporations, partnerships and other entities in which such investments are made and in which Executive’s participation is solely that of an investor (subject to any and all rules and regulations of applicable banking regulators or policies of the Employer governing transactions with affiliates and ownership interests in customers); (b) engaging (whether or not during normal business hours) in any other business, professional or civic activities provided that the Board of Directors of Employer approves of such activities and Executive’s engagement does not result in a violation of Executive’s covenants under this Section or Sections 4 or 5 hereof; or (c) accepting appointments to the boards of directors of other companies provided that the Board of Directors of Employer approves of such appointments and Executive’s performance of Executive’s duties on such boards does not result in a violation of Executive’s covenants under this Section or Sections 4 and 5 hereof.

4. Competition . Other than in connection with Executive’s performance of Executive’s duties hereunder, (i) during the period in which Executive performs services for Employer and (ii) for a period of six months after termination of the Agreement as a result of either Wintrust or the Executive not extending the contract as provided in Section 8 or (iii) for a period of two years after termination of Executive’s employment with Employer, regardless of the reason other than for termination in conjunction with a Change-of-Control as outlined in Section 9(f) or non-extension of this Agreement by either Wintrust or the Executive, Executive shall not directly or indirectly, either alone or in conjunction with any other person, firm, association, company or corporation:

(a) serve as an owner, principal, senior manager, or in a position comparable to that held by Executive at any time during Executive’s employment with Employer, for a bank or other financial institution (or any branch or affiliate thereof) which offers to its customers commercial and community banking and/or trust and investment services, and which is located within ten miles of the principal office or any branch office of the Employer;

(b) solicit or conduct business which involves commercial and community banking and/or trust and investment services with any person, corporation or other entity which was (i) a customer of the Employer, Wintrust or any other Affiliate of Wintrust with whom Executive had direct or indirect contact while employed by Employer or about whom Executive obtained Confidential Information during the fifteen months prior to the termination of

Executive’s employment with Employer, or (ii) a potential customer with whom Employer, Wintrust, or any Affiliate has, at the time of Executive’s termination of employment with Employer, an outstanding oral or written proposal to provide commercial and community banking and/or trust and investment services and with whom Executive had direct or indirect contact while employed by Employer;

(c) request, advise or directly or indirectly invite any of the existing customers, suppliers or service providers of Employer, Wintrust or any other Affiliate of Wintrust to withdraw, curtail or cancel its business with Employer, Wintrust or any other Affiliate of Wintrust, other than through mass mailings or general advertisements not specifically directed at customers of Employer, Wintrust or any Affiliate;

(d) hire, solicit, induce or attempt to solicit or induce any employee, consultant, or agent of Employer, Wintrust or any other Affiliate of Wintrust (i) to terminate his employment or association with Employer or (ii) to become employed by or serve in any capacity by a bank or other financial institution which operates or is planned to operate at any facility which is located within a ten mile radius of the principal office or any branch office of the Employer; or

(e) in any way participate in planning or opening a bank or other financial institution which is located or will be located within a ten mile radius of the principal office or any branch office of the Employer. For the purposes of this Agreement, in the event Executive’s geographic area of responsibility as specified herein shall change during employment with Employer, or as the result of performing services for Wintrust or any Affiliate of Wintrust, the Executive’s obligation stated in Sections 4(a), 4(d)(ii) and 4(e) shall apply to a ten mile radius of Executive’s revised geographic area of responsibility.

Notwithstanding the foregoing, (a) Executive shall not be prevented from: (i) investing or owning shares of stock of any corporation engaged in any business provided that such shares are regularly traded on a national securities exchange or any over-the-counter market; (ii) retaining any shares of stock in any corporation which Executive owned prior to the date of Executive’s employment with Employer (subject to any and all rules and regulations of applicable banking regulators or policies of the Employer governing transactions with affiliates and ownership interests in customers); or (iii) investing as a limited partner (without decision-making authority) in any private equity fund, provided that Executive’s involvement in such investment is solely that of a passive investor (subject to any and all rules and regulations of applicable banking regulators or policies of the Employer governing transactions with affiliates and ownership interests in customers), and (b) Executive shall not be in violation of Sections 4(a) or 4(e) of this Agreement if, during the two-year period following termination of employment Executive accepts employment or invests in a bank or other financial institution which is within a 10 mile radius of the principal offices or any branch office of Wintrust or any Affiliate of Wintrust (other than Employer) as long as such facility is not within a ten mile radius of the principal office or any branch office of the Employer.

5. Confidential Information . Executive acknowledges that, during Executive’s employment with Employer, Executive has and will obtain access to Confidential Information of and for Employer, Wintrust or its Affiliates. For purposes of this Agreement, “Confidential

Information” shall mean information not generally known or available without restriction to the trade or industry, including, without limitation, the following categories of information and documentation: (a) documentation and information relating to lending customers of Employer, Wintrust or any Affiliate, including, but not limited to, lists of lending clients with their addresses and account numbers, credit analysis reports and other credit files, outstanding loan amounts, repayment dates and instructions, information regarding the use of the loan proceeds, and loan maturity and renewal dates; (b) documentation and information relating to depositors of Employer, Wintrust or any Affiliate, including, but not limited to, lists of depositors with their addresses and account numbers, amounts held on deposit, types of depository products used and the number of accounts per customer; (c) documentation and information relating to trust customers of Employer, Wintrust or any Affiliate, including, but not limited to, lists of trust customers with their addresses and account numbers, trust investment management contracts, identity of investment managers, trust corpus amounts, and grantor and beneficiary information; (d) documentation and information relating to investment management clients of Employer, Wintrust or any Affiliate, including, but not limited to, lists of investors with their addresses, account numbers and beneficiary information, investment management contracts, amount of assets held for management, and the nature of the investment products used; (e) the identity of actual or potential customers of Employer, Wintrust or any Affiliate, including lists of the same; (f) the identity of suppliers and service providers of Employer, Wintrust or any Affiliate, including lists of the same and the material terms of any supply or service contracts; (g) marketing materials and information regarding the products and services offered by Employer, Wintrust or any Affiliate and the nature and scope of use of such marketing materials and product information; (h) policy and procedure manuals and other materials used by Employer, Wintrust or any Affiliate in the training and development of its employees; (i) identity and contents of all computer systems, programs and software utilized by Employer, Wintrust or any Affiliate to conduct its operations and manuals or other instructions for their use; (j) minutes or other summaries of Board of Directors or other department or committee meetings held by Employer, Wintrust or any Affiliate; (k) the business and strategic growth plans of Employer, Wintrust or any Affiliate; and (l) confidential communication materials provided for shareholders of Employer, Wintrust or any Affiliate. Absent prior authorization by Employer or as required in Executive’s duties for Employer, Executive will not at any time, directly or indirectly, use, permit the use of, disclose or permit the disclosure to any third party of any such Confidential Information to which Executive will be provided access. These obligations apply both during Executive’s employment with Employer and shall continue beyond the termination of Executive’s employment and this Agreement.

6. Inventions . All discoveries, designs, improvements, ideas, and inventions, whether patentable or not, relating to (or suggested by or resulting from) products, services, or other technology of Employer, Wintrust or any Affiliate or relating to (or suggested by or resulting from) methods or processes used or usable in connection with the business of Employer, Wintrust or any Affiliate that may be conceived, developed, or made by Executive during employment with Employer (hereinafter “Inventions”), either solely or jointly with others, shall automatically become the sole property of Employer, Wintrust or an Affiliate. Executive shall immediately disclose to Employer all such Inventions and shall, without additional compensation, execute all assignments and other documents deemed necessary to perfect the property rights of Employer, Wintrust or any Affiliate therein. These obligations shall continue beyond the termination of Executive’s employment with respect to Inventions

conceived, developed, or made by Executive during employment with Employer. The provisions of this Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade secret information of Employer, Wintrust or any Affiliate is used by Executive and which is developed entirely on Executive’s own time, unless (a) such Invention relates (i) to the business of Employer, Wintrust or an Affiliate or (ii) to the actual or demonstrably anticipated research or development of Employer, Wintrust or an Affiliate, or (b) such Invention results from work performed by Executive for Employer.

7. Remedies . Executive acknowledges that compliance with the terms of this Agreement is necessary to protect the Confidential Information and goodwill of Employer, Wintrust and its Affiliates and that any breach by Executive of this Agreement will cause continuing and irreparable injury to Employer, Wintrust and its Affiliates for which money damages would not be an adequate remedy. Executive acknowledges that Wintrust and all other Affiliates are and are intended to be third party beneficiaries of this Agreement. Executive acknowledges that Employer, Wintrust and any Affiliate shall, in addition to any other rights or remedies they may have, be entitled to injunctive relief for any breach by Executive of any part of this Agreement. This Agreement shall not in any way limit the remedies in law or equity otherwise available to Employer, Wintrust and its Affiliates.

8. Term of Agreement . Unless terminated sooner as provided in Section 9, the initial term of Executive’s employment pursuant to this Agreement (“Initial Term”) shall be three years , commencing on the date of this Agreement. After such Initial Term, this Agreement shall be extended automatically for successive one-year terms, unless either Executive or Employer gives contrary written notice not less than 60 days in advance of the expiration of the Initial Term or any succeeding term of this Agreement or unless terminated sooner as provided in Section 9. Notwithstanding the foregoing, if at any time during the Initial Term or any successive one-year term there is a Change in Control of Employer (as defined in Section 9(f)), then upon the first occurrence of such a Change in Control, the Initial Term or the successive one-year term of this Agreement (whichever is in effect as of the date of the Change in Control) shall automatically extend for the greater of: (a) the amount of time remaining on Executive’s Initial Term of employment if such first occurrence of a Change in Control occurs during the Initial Term, or (b) two years from the date of such first occurrence of a Change in Control. In the event that Executive’s Initial Term or successive one-year term is extended due to such a Change in Control, such extension shall further be extended automatically for successive one-year terms unless either Executive or Employer gives contrary written notice not less than 60 days in advance of the expiration of the extension of this Agreement or unless terminated sooner as provided in Section 9. The Initial Term, together with any extension thereof in accordance with this Section 8, shall be referred to herein as the “Term.”

9. Termination of Employment.

(a) General Provisions . Executive’s employment may be terminated by Employer at any time for any reason, with or without cause, and, except as otherwise provided in this Section 9, any and all of Employer’s obligations under this Agreement shall terminate, other than Employer’s obligation to pay Executive, within 30 days of Executive’s termination of employment, the full amount of any earned but unpaid base salary and accrued but unpaid vacation pay earned by Executive pursuant to this Agreement through and including the date of termination and to observe the terms and conditions of any plan or benefit arrangement which, by its terms, survives such termination of Executive’s employment. The payments to be made under this Section 9(a) shall be made to Executive, or in the event of Executive’s death, to such beneficiary as Executive may designate in writing to Employer for that purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to the estate of Executive. Notwithstanding the foregoing, termination of employment shall not affect the obligations of Executive that, pursuant to the express provisions of this Agreement, continue in effect.

(b) Termination Due to Death .

(i) Payment. If Executive should die during the Term of this Agreement, which event shall result in the termination of Executive’s employment, Employer shall pay Executive an amount equal to two times (2x) the sum of (A) Executive’s base annual salary in effect at the time of Executive’s death plus (B) an amount equal to any Cash Bonus amounts paid to Executive during the twelve-month period prior to Executive’s death and any Stock Bonus amounts awarded or granted to Executive during the twelve-month period prior to Executive’s death, in a lump sum within 30 days following the date of Executive’s death. For the purposes of this Agreement, “Cash Bonus” shall mean any cash bonus amounts that are included in Executive’s annual bonus plan, as approved in writing by Employer’s Board of Directors or the Compensation Committee or any successor committee of Employer’s Board of Directors. For the purposes of this Agreement, “Stock Bonus” shall mean any restricted shares that are included in Executive’s annual bonus plan, as approved in writing by the Employer’s Board of Directors or the Compensation Committee or any successor committee of Employer’s Board of Directors. Any bonuses (whether in cash or in the form of restricted shares) that are not included in such annual bonus plan shall not be considered to be Cash Bonus amounts or Stock Bonus awards for purposes of this Agreement. The value of the Stock Bonus amounts shall be determined as of the date they are awarded or granted to Executive.

(ii) Reduction of Payment Due To Life Insurance Benefits. The amount to be paid to Executive pursuant to this Section 9(b) shall be reduced by the amount of any life insurance benefit payments paid or payable to Executive from policies of insurance maintained and/or paid for by Employer or Wintrust; provided that in the event the life insurance benefits exceed the amount to be paid to Executive pursuant to this Section 9(b), Executive shall remain entitled to receive the excess life insurance payments. The Executive will cooperate with the Employer or Wintrust in order to enable the Employer or Wintrust to pay for a policy or policies of life insurance on the life of the Executive. To the extent that the Executive is not insurable or a life insurance policy is not reasonably obtainable, then the payments due under this Section 9(b) shall be reduced by 50%.

(iii) Beneficiary. The payments to be made under this Section 9(b) shall be made to such beneficiary as Executive may designate in writing to Employer for that purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to the estate of Executive.

(i) Payment. If Executive should suffer a permanent disability during the Term of this Agreement, Employer shall have the right to terminate Executive’s employment. In such event, Employer shall pay Executive an amount equal to two times (2x) the sum of (A) Executive’s base annual salary in effect at the time of Executive’s permanent disability plus (B) an amount equal to any Cash Bonus amounts paid to Executive during the twelve-month period prior to Executive’s permanent disability and any Stock Bonus amounts awarded or granted to Executive during the twelve-month period prior to Executive’s permanent disability. Such amount shall be paid to Executive ratably over a 24-month period beginning on the first payroll period following such termination and on each payroll period thereafter during the 24-month period. For the purposes of this Agreement, “permanent disability” means any mental or physical illness, disability or incapacity that renders Executive unable to perform Executive’s duties hereunder where (x) such permanent disability has been determined to exist by a physician selected by Employer or (y) Employer has reasonably determined, based on such physician’s advice, that such disability will continue for 180 days or more within any 365-day period, of which at least 90 days are consecutive. Executive shall cooperate in all respects with Employer if a question arises as to whether he has become disabled (including, without limitation, submitting to an examination by a physician or other health care specialist selected by Employer and authorizing such physician or other health care specialist to discuss Executive’s condition with Employer).

(ii) Reduction of Payment Due To Long Term Disability Insurance Benefits. The amount to be paid to Executive pursuant to this Section 9(c) shall be reduced by the amount of any long-term disability benefit payments paid or payable to Executive during such payment period from policies of insurance maintained and/or paid for by Employer or Wintrust; provided that in the event the long-term disability benefits exceed the amount to be paid to Executive pursuant to this Section 9(c), Executive shall remain entitled to receive the excess long-term disability insurance payments.

(iii) Reduction of Payment Due To Earned Income. The amount to be paid to Executive under this Section 9(c) shall also be reduced by any income earned by Executive, whether paid to Executive immediately or deferred until a later date, during the applicable Severance Pay period from employment of any sort, including without limitation full, part time or temporary employment or work as an independent contractor or as a consultant; provided that, if Executive was a member of the board of directors of another company at the time of Executive’s termination, the amount of Severance Pay under this Section 9(c) shall not be reduced by any income earned by Executive during the applicable Severance Pay period due to Executive’s continued service in such capacity. Notwithstanding the foregoing, Executive’s Severance Pay to be paid under this Section 9(c) shall be not less than an amount to provide Executive with a gross monthly payment of $8,333.34 during the 24-month Severance Pay

period. Executive agrees to promptly notify Employer if Executive obtains employment of any sort during the applicable Severance Pay period and to provide Employer with a copy of any W-2 or 1099 forms or other payroll or income records and a summary of contributions received under any deferred compensation arrangement.

(iv) Continued Participation In Benefit Plans. In the event of termination due to a permanent disability, Executive’s or Executive’s dependents’ participation in any medical, health, accident, disability, death, life insurance or similar plan in which Executive was participating immediately prior to termination shall continue (to the extent Executive and Executive’s dependents are eligible to participate in such plans pursuant to the terms of such plans) for the period in which payments are being made under this Section 9(c) at Employer’s or Wintrust’s expense (subject to any normal employee contributions, if any), although any continuation of health coverage shall count toward the “COBRA” continuation of coverage period.

(d) Termination Without Cause .

(i) Payment. In the event Executive’s employment is terminated without Cause (as such term is defined in Section 9(h) hereof) by Employer during the Term of this Agreement, other than upon the expiration of the Term of this Agreement, Employer shall pay Severance Pay to Executive in the amount equal to two times (2x) the sum of (A) Executive’s base annual salary in effect at the time of Executive’s termination plus (B) an amount equal to any Cash Bonus amounts paid to Executive during the twelve-month period prior to termination and any Stock Bonus amounts awarded or granted to Executive during the twelve-month period prior to termination. Severance Pay under this Section 9(d) shall be paid ratably over a 24-month period beginning on the first payroll period following such termination and on each payroll period thereafter during such Severance Pay period. In addition to the payment due to the Executive as outlined in the prior sentences of this Section 9(d), the Executive will be entitled to a payment of his annual performance bonus on a prorated basis for the period of the fiscal year for which the Executive performed services prior to termination with such payment to be made in a lump sum within 30 days following the date of Executive’s termination; however, notwithstanding any other provisions of this Agreement, this prorated bonus will not be included in the Cash Bonus or Stock Bonus calculation for purposes of the payment outlined elsewhere in this Section 9(d).

(ii) Reduction of Payment Due To Earned Income. The amount of Severance Pay under this Section 9(d) shall also be reduced by any income earned by Executive, whether paid to Executive immediately or deferred until a later date, during the applicable Severance Pay period from employment of any sort, including without limitation full, part time or temporary employment or work as an independent contractor or as a consultant; provided that, if Executive was a member of the board of directors of another company at the time of Executive’s termination, the amount of Severance Pay under this Section 9(d) shall not be reduced by any income earned by Executive during the applicable Severance Pay period due to Executive’s continued service in such capacity. Notwithstanding the foregoing, Executive’s Severance Pay to be paid under this Section 9(d) shall not be less than an amount to provide Executive with a gross monthly payment of $8,333.34 during the 24-month Severance Pay period. Executive agrees to promptly notify Employer if Executive obtains employment of any

sort during the applicable Severance Pay period and to provide Employer with a copy of any W-2 or 1099 forms or other payroll or income records and a summary of any contributions received under any deferred compensation arrangement.

(iii) Company-Paid Health Insurance. In the event of Executive’s termination pursuant to this Section 9(d), from the termination date through the earliest of (A) the expiration of the maximum period of COBRA coverage, (B) the date on which Executive becomes eligible for coverage under another group health insurance plan with no pre-existing condition limitation or exclusion, or (C) the date on which Executive becomes entitled to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to group health insurance coverage under the Employer’s group health insurance plan for employees (as such plan is then in effect and as it may be amended at any time and from time to time during the period of coverage) in which Executive was participating immediately prior to termination, at Employer’s expense, subject to any normal employee contributions, if any. The period during which Executive is being provided with health insurance under this Agreement shall be credited against Executive’s period of COBRA coverage, if any. Executive shall promptly notify Employer if, prior to the expiration of the maximum period of COBRA coverage, Executive becomes eligible for coverage under another group health plan with no pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under Medicare.

(e) Constructive Termination .

(i) Payment. If Executive suffers a Constructive Termination during the Term of this Agreement, other than upon the expiration of the Term of this Agreement, Employer shall pay Severance Pay to Executive in the amounts and at the times described in Section 9(d) hereof. For the purposes of this Agreement, “Constructive Termination” means (A) a material reduction by Employer in the duties and responsibilities of Executive or (B) a reduction by Employer of Executive’s “Adjusted Total Compensation” (as hereinafter defined), to (1) less than seventy-five percent (75%) of the Adjusted Total Compensation of Executive for the twelve-month period ending as of the last day of the month immediately preceding the month in which the Constructive Termination occurs; or (2) less than seventy-five percent (75%) of the Executive’s Adjusted Total Compensation for the twelve-month period ending as of the last day of the month preceding the Effective Date, whichever is greater. A Constructive Termination does not include termination for Cause as defined in Section 9(h), termination without Cause as defined in Section 9(d), or termination due to a permanent disability as defined in Section 9(c). In addition to the payment due to the Executive as outlined in the prior sentences of this Section 9(e), the Executive will be entitled to a payment of his annual performance bonus on a prorated basis for the period of the fiscal year for which the Executive performed services prior to termination with such payment to be made in a lump sum within 30 days following the date of Executive’s termination; however, notwithstanding any other provisions of this Agreement, this prorated bonus will not be included in the Cash Bonus or Stock Bonus calculation for purposes of the payment outlined elsewhere in this Section 9(e).

(ii) Reduction of Payment Due To Earned Income. The amount of Severance Pay under this Section 9(e) shall be reduced by any income earned by Executive, whether paid to Executive immediately or deferred until a later date, during such Severance Pay period from employment of any sort, including without limitation full, part time or temporary

employment or work as an independent contractor or as a consultant; provided that, if Executive was a member of the board of directors of another company at the time of Executive’s termination, the amount of Severance Pay under this Section 9(e) shall not be reduced by any income earned by Executive during the applicable Severance Pay period due to Executive’s continued service in such capacity. Notwithstanding the foregoing, Executive’s Severance Pay to be paid under this Section 9(e) shall not be less than an amount to provide Executive with a gross monthly payment of $ 8,333.34 during the 24-month Severance Pay period. Executive agrees to promptly notify Employer if Executive obtains employment of any sort during the applicable Severance Pay period and to provide Employer with a copy of any W-2 or 1099 forms or other payroll or income records and a summary of any contributions received under any deferred compensation arrangement.

(iii) Company-Paid Health Insurance. In the event of Executive’s termination pursuant to this Section 9(e), from the termination date through the earliest of (A) the expiration of the maximum period of COBRA coverage, (B) the date on which Executive becomes eligible for coverage under another group health insurance plan with no pre-existing condition limitation or exclusion, or (C) the date on which Executive becomes entitled to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to group health insurance coverage under the Employer’s group health insurance plan for employees (as such plan is then in effect and as it may be amended at any time and from time to time during the period of coverage) in which Executive was participating immediately prior to termination, at Employer’s expense, subject to any normal employee contributions, if any. The period during which Executive is being provided with health insurance under this Agreement shall be credited against Executive’s period of COBRA coverage, if any. Executive shall promptly notify Employer if, prior to the expiration of the maximum period of COBRA coverage, Executive becomes eligible for coverage under another group health plan with no pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under Medicare.

(iv) Definitions.

(A) For the purposes of this Agreement, “Adjusted Total Compensation” means the aggregate base salary earned by the Executive plus the dollar value of all perquisites (i.e. Employer provided car, club dues and supplemental life insurance) as estimated by Employer in respect of the Executive for the relevant twelve-month period. Adjusted Total Compensation shall exclude any Cash Bonus, Stock Bonus, or other bonus payments paid or earned by the Executive.

(B) For the purposes of this Section 9(e), the Executive will not be deemed to have incurred a reduction by Employer of Executive’s Adjusted Total Compensation if there is a general reduction in base salaries and/or perquisites applicable to the President, Chief Executive Officer and all Vice Presidents of Employer.

(f) Termination Upon Change In Control.

(i) Payment. In the event that within eighteen months after a Change in Control (as defined below) of Employer or Wintrust (A) Executive’s employment is terminated without Cause (as such term is defined in Section 9(h) hereof) prior to the expiration

of the Term of this Agreement or (B) Executive suffers a Constructive Termination prior to the expiration of the Term of this Agreement, Employer (or the successor thereto) shall pay Severance Pay to Executive in the amount that is equivalent to the amount described in Section 9(d) hereof in a lump sum within 30 days following the date of Executive’s termination or Constructive Termination. In addition to the payment due to the Executive as outlined in the prior sentences of this Section 9(f), the Executive will be entitled to a payment of his annual performance bonus on a prorated basis for the period of the fiscal year for which the Executive performed services prior to termination with such payment to be made in a lump sum within 30 days following the date of Executive’s termination; however, notwithstanding any other provisions of this Agreement, this prorated bonus will not be included in the Cash Bonus or Stock Bonus calculation for purposes of the payment outlined elsewhere in this Section 9(f).

(ii) Change In Control. For the purposes of this Agreement, a “Change in Control” of Employer means (A) the acquisition by any person of 50% or more of Employer’s then outstanding capital stock; or (B) approval by the stockholders of Employer of a merger or consolidation effecting a change in ownership of 50% or more of the voting power of the outstanding capital stock of Employer or a sale for cash of all or substantially all of the assets of Employer; in each case, the acquiring persons in such merger, consolidation or sale shall be persons other than the stockholders of Employer, Wintrust or any Affiliate immediately prior to such transaction. For the purposes of this Agreement, a “Change in Control” of Wintrust shall have the same meaning as provided in Section 12(b) of the Wintrust 1997 Stock Incentive Plan.

(iii) Section 280G. Notwithstanding the foregoing, if the payment required to be paid under this Section 9(f), when considered either alone or with other payments paid or imputed to the Executive from Wintrust or an Affiliate that would be deemed “excess parachute payments” under Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), is deemed by Wintrust to be a “parachute payment” under Section 280G(b)(2) of Code, then the amount of Severance Pay required to be paid under this Section 9(f) shall be automatically reduced to an amount equal to $1.00 less than three times (3x) the “base amount” (as defined in Section 280G(3) of the Code) (the “Reduced Amount”). Provided , however , the preceding sentence shall not apply if the sum of (A) the amount of Severance Pay described in this Section 9(f) less (B) the amount of excise tax payable by the Executive under Section 4999 of the Code with respect to the amount of such Severance Pay and any other payments paid or imputed to the Executive from Wintrust or an Affiliate that would be deemed to be “excess parachute payments” under Section 280G(b)(1) of the Code, is greater than the Reduced Amount. The decision of Wintrust (based upon the recommendations of its tax counsel and accountants) as to the characterization of payments as parachute payments, the value of parachute payments, the amount of excess parachute payments, and the payment of the Reduced Amount shall be final.

(iv) Company-Paid Health Insurance. In the event Executive becomes entitled to payments under this Section 9(f), from the termination date through the earliest of (A) the expiration of the maximum period of COBRA coverage, (B) the date on which Executive becomes eligible for coverage under another group health insurance plan with no pre-existing condition limitation or exclusion, or (C) the date on which Executive becomes entitled to benefits under Medicare, Executive (and any qualified dependents) shall be entitled to group health insurance coverage under the Employer’s group health insurance plan for employees (as

such plan is then in effect and as it may be amended at any time and from time to time during the period of coverage) in which Executive was participating immediately prior to termination, at Employer’s expense, subject to any normal employee contributions, if any. The period during which Executive is being provided with health insurance under this Agreement shall be credited against Executive’s period of COBRA coverage, if any. Executive shall promptly notify Employer if, prior to the expiration of the maximum period of COBRA coverage, Executive becomes eligible for coverage under another group health plan with no pre-existing condition limitation or exclusion or Executive becomes entitled to benefits under Medicare.

(v) Definitions. For the purposes of this Section 9(f), the term “Constructive Termination” shall have the same meaning as such term is defined in Section 9(e) with the following modifications:

(A) A Constructive Termination shall be deemed to have occurred if after a Change in Control, the Executive’s Adjusted Total Compensation is reduced to less than (1) 100% of the Adjusted Total Compensation of Executive for the twelve-month period ending as of the last day of the month immediately preceding the month in which the Constructive Termination occurs or (2) 100% percent of the Executive’s Adjusted Total Compensation for the twelve-month period ending as of the last day of the month preceding the Effective Date, whichever is greater.

(B) A Constructive Termination shall also be deemed to have occurred if after a Change in Control, Employer (or the successor thereto) delivers written notice to Executive that it will continue to employ Executive but will reject this Agreement (other than due to the expiration of the Term of this Agreement).

(vi) Competition and Solicitation. Notwithstanding the first paragraph of Section 4 of this Agreement, in the event of Executive’s termination pursuant to this Section 9(f), for a period of two years after termination of Executive’s employment with Employer, Executive shall not directly or indirectly, either alone or in conjunction with any other person, firm, association, company or corporation violate any of the provisions set forth in Sections 4(b), 4(c), 4(d) of this Agreement.

(g) Voluntary Termination . Executive may voluntarily terminate employment during the Term of this Agreement by a delivery to Employer of a written notice at least 60 days in advance of the termination date. If Executive voluntarily terminates employment prior to the expiration of the Term of this Agreement, any and all of the Employer’s obligations under this Agreement shall terminate immediately except for the Employer’s obligations contained in Section 9(a) hereof. Notwithstanding the foregoing, termination of employment shall not affect the obligations of Executive that, pursuant to the express provisions of this Agreement, continue in effect.

(h) Termination For Cause . If Executive is terminated for Cause as determined by the written resolution of Employer’s Board of Directors or the Compensation

Committee or any successor committee of Employer’s Board of Directors, all obligations of the Employer shall terminate immediately except for Employer’s obligations described in Section 9(a) hereof. Notwithstanding the foregoing, termination of employment shall not affect the obligations of Executive that, pursuant to the express provisions of this Agreement, continue in effect. For purposes of this Agreement, termination for “Cause” means:

(i) Executive’s failure or refusal, after written notice thereof and after reasonable opportunity to cure, to perform specific directives approved by a majority of the Employer’s or Wintrust’s Board of Directors which are consistent with the scope and nature of Executive’s duties and responsibilities as provided in Section 1 of this Agreement;

(ii) Habitual drunkenness or illegal use of drugs which interferes with the performance of Executive’s duties and obligations under this Agreement;

(iii) Executive’s conviction of a felony;

(iv) Any defalcation or acts of gross or willful misconduct of Executive resulting in or potentially resulting in economic loss to Employer or Wintrust or substantial damage to Employer’s or Wintrust’s reputation;

(v) Any breach of Executive’s covenants contained in Sections 4 through 6 hereof;

(vi) A written order requiring termination of Executive from Executive’s position with Employer by any regulatory agency or body; or

(vii) Executive’s engagement, during the performance of Executive’s duties hereunder, in acts or omissions constituting fraud, intentional breach of fiduciary obligation, intentional wrongdoing or malfeasance, or intentional and material violation of applicable banking laws, rules, or regulations.

(i) Executive’s right to receive Severance Pay per Sections 9(c) through 9(f) hereof is contingent upon (i) Executive having executed and delivered to Employer a release in such form as provided by Employer and (ii) Executive not violating any of Executive’s on-going obligations under this Agreement.

(j) The payment of Severance Pay to Executive pursuant to Sections 9(c) through 9(f) hereof shall be liquidated damages for and in full satisfaction of any and all claims Executive may have relating to or arising out of Executive’s employment and termination of employment by Employer, any and all claims Executive may have relating to or arising out of this Agreement and the termination thereof and any and all claims Executive may have arising under any statute, ordinance or regulation or under common law. Executive expressly acknowledges and agrees that, except for whatever claim Executive may have to Severance Pay, Executive shall not have any claim for damages or other relief of any sort relating to or arising out of Executive’s employment or termination of employment by Employer or relating to or arising out of this Agreement and the termination thereof.

(k) Upon termination of employment with Employer for any reason, Executive shall promptly deliver to Employer all writings, records, data, memoranda, contracts, orders, sales literature, price lists, client lists, data processing materials, and other documents, whether or not obtained from Employer, Wintrust or any Affiliate, which pertain to or were used by Executive in connection with Executive’s employment by Employer or which pertain to Wintrust or any other Affiliate, including, but not limited to, Confidential Information, as well as any automobiles, computers or other equipment which were purchased or leased by Employer for Executive.

10. Resolution of Disputes . Except as otherwise provided herein, any disputes arising under or in connection with this Agreement or in any way arising out of, relating to or associated with the Executive’s employment with Employer or the termination of such employment (“Claims”), that Executive may have against Employer, Wintrust or any Affiliate of Wintrust, or the officers, directors, employees or agents of Employer, Wintrust, or any Affiliate of Wintrust in their capacity as such or otherwise, or that Employer, Wintrust, or any Affiliate of Wintrust may have against Executive, shall be resolved by binding arbitration, to be held in Chicago, Illinois, in accordance with the rules and procedures of the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (the “AAA”) and the parties hereby agree to expedite such arbitration proceedings to the extent permitted by the AAA. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The Claims covered by this Agreement include, but are not limited to: claims for wages or other compensation due; claims for breach of any contract or covenant, express or implied; tort claims; claims for discrimination, including but not limited to discrimination based on race, sex, sexual orientation, religion, national origin, age, marital status, handicap, disability or medical condition or harassment on any of the foregoing bases; claims for benefits, except as excluded in the following paragraph; and claims for violation of any federal, state or other governmental constitution, statute, ordinance, regulation, or public policy. The Claims covered by this Agreement do not include claims for workers’ compensation benefits or compensation; claims for unemployment compensation benefits; claims based upon an employee pension or benefit plan, the terms of which contain an arbitration or other non-judicial resolution procedure, in which case the provisions of such plan shall apply; and claims made by either Employer or the Executive for injunctive and/or other equitable relief regarding the covenants set forth in Sections 3, 4, 5 and 6 of this Agreement. Each party shall initially bear their own costs of the arbitration or litigation, except that, if Employer is found to have violated any material terms of this Agreement, Employer shall reimburse Executive for the entire amount of reasonable attorneys’ fees incurred by Executive as a result of the dispute hereunder in addition to the payment of any damages awarded to Executive.

11. General Provisions .

(a) All provisions of this Agreement are intended to be interpreted and construed in a manner to make such provisions valid, legal, and enforceable. To the extent that any Section of this Agreement or any word, phrase, clause, or sentence hereof shall be deemed by any court to be illegal or unenforceable, such word, clause, phrase, sentence, or Section shall be deemed modified, restricted, or omitted to the extent necessary to make this Agreement enforceable. Without limiting the generality of the foregoing, if the scope of any covenant in this Agreement is too broad to permit enforcement to its full extent, such covenant shall be

enforced to the maximum extent provided by law; and Executive agrees that such scope may be judicially modified accordingly.

(b) This Agreement may be assigned by Employer. This Agreement and the covenants set forth herein shall inure to the benefit of and shall be binding upon the successors and assigns of Employer and Wintrust.

(c) This Agreement may not be assigned by Executive, but shall be binding upon Executive’s executors, administrators, heirs, and legal representatives.

(d) No waiver by either party of any breach by the other party of any of the obligations, covenants, or representations under this Agreement shall constitute a waiver of any prior or subsequent breach.

(e) Where in this Agreement the masculine gender is used, it shall include the feminine if the sense so requires.

(f) Employer may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state, or local law.

(g) This instrument constitutes the entire agreement of the parties with respect to its subject matter. This Agreement may not be changed or amended orally but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought. Any other understandings and agreements, oral or written, respecting the subject matter hereof are hereby superseded and canceled.

(h) The provisions of Sections 4, 5, 6, 7, 9(i), 9(j), 10, 11, and 12 of this Agreement shall survive the termination of Executive’s employment with Employer and the expiration or termination of this Agreement.

12. Governing Law . The parties agree that this Agreement shall be construed and governed by the laws of the State of Illinois, excepting its conflict of laws principles. Further, the parties acknowledge and specifically agree to the jurisdiction of the courts of the State of Illinois in the event of any dispute regarding Sections 3, 4, 5, or 6 of this Agreement.

13. Notice of Termination . Subject to the provisions of Section 8, in the event that Employer desires to terminate the employment of the Executive during the Term of this Agreement, Employer shall deliver to Executive a written notice of termination, stating whether the termination constitutes a termination in accordance with Section 9(c), 9(d), 9(e), 9(f), or 9(h). In the event that Executive determines in good faith that Executive has experienced a Constructive Termination, Executive shall deliver to Employer a written notice stating the circumstances that constitute such Constructive Termination. In the event that the Executive desires to effect a voluntary termination of Executive’s employment in accordance with Section 9(g), Executive shall deliver a written notice of such voluntary termination to Employer.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date written opposite their signatures.



WINTRUST FINANCIAL CORPORATION

By:

	Edward J. Wehmer	Thomas P. Zidar
Its:	President and Chief Executive Officer

Dated:		Dated:

EXHIBIT A

Advantage National Bank
Barrington Bank & Trust Company, N.A.
Beverly Bank & Trust Company, N.A.
Crystal Lake Bank & Trust Company, N.A.
First Insurance Funding Corporation
Focused Investments LLC
Hinsdale Bank & Trust Company
Lake Forest Bank & Trust Company
Libertyville Bank & Trust Company
North Shore Community Bank & Trust Company
Northbrook Bank & Trust Company
Old Plank Trail Community Bank, N.A.
State Bank of the Lakes
Town Bank (Wisconsin)
Tricom, Inc. of Milwaukee
Village Bank & Trust-Arlington Heights
Wayne Hummer Asset Management Company
Wayne Hummer Investments, LLC
Wayne Hummer Trust Company, N.A.
Wheaton Bank & Trust Company
Wintrust Information Technology Services Company

Exhibit 31.1

CERTIFICATION

I, Edward J. Wehmer, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Wintrust Financial Corporation;

2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

	a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounted principles;

	c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

	d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date: August 9, 2006
	/s/ EDWARD J. WEHMER

	Name:	Edward J. Wehmer
	Title:	President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, David L. Stoehr, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Wintrust Financial Corporation;

2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

	a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounted principles;

	c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

	d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: August 9, 2006
	/s/ DAVID L. STOEHR

	Name:	David L. Stoehr
	Title:	Executive Vice President and
		Chief Financial Officer

Exhibit 32.1

CERTIFICATIONS
SARBANES-OXLEY ACT SECTION 906

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, the undersigned Chief Executive Officer and Chief Financial Officer of Wintrust Financial Corporation (“the Company”) certify, on the basis of such officers’ knowledge and belief that:

	(1)		The Quarterly Report of the Company on Form 10-Q for the period ended June 30, as filed with the Securities and Exchange Commission on August 9, 2006, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

	(2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



		/s/ EDWARD J. WEHMER

		Name:		Edward J. Wehmer
		Title:		President and Chief Executive Officer
		Date:		August 9, 2006

		/s/ DAVID L. STOEHR

		Name:		David L. Stoehr
		Title:		Executive Vice President and
				Chief Financial Officer
		Date:		August 9, 2006

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request. This certification accompanies the Report and shall not be treated as having been filed as part of this Report.