ITEM 1A. RISK FACTORS
An investment in Wintrust’s common stock is subject to risks inherent to Wintrust’s business. The material risks and uncertainties that management believes affect Wintrust are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included or incorporated by reference in this report. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair Wintrust’s business operations. This report is qualified in its entirety by these risk factors. If any of the following risks actually occur, Wintrust’s financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of Wintrust’s common stock could decline significantly, and you could lose all or part of your investment.
The financial services industry is very competitive.
We face competition in attracting and retaining deposits, making loans, and providing other financial services (including wealth management services) throughout our market area. Our competitors include other community banks, larger banking institutions, and a wide range of other financial institutions such as credit unions, government-sponsored enterprises, mutual fund companies, insurance companies and other nonbank businesses. Many of these competitors have substantially greater resources. If we are unable to compete effectively, we will lose market share and income from deposits, loans, and other products may be reduced. The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Banks, securities firms and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking. Also, technology has lowered barriers to entry and made it possible for nonbanks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems. Wintrust’s ability to compete successfully depends on a number of factors, including, among other things:
•
the ability to develop, maintain and build upon longterm customer relationships based on top quality service and high ethical standards;
•
the scope, relevance and pricing of products and services offered to meet customer needs and demands;
•
the rate at which the Company introduces new products and services relative to its competitors;
•
customer satisfaction with the Company’s level of service; and
•
industry and general economic trends.
Failure to perform in any of these areas could significantly weaken the Company’s competitive position, which could adversely affect the Company’s growth and profitability, which, in turn, could have a material adverse effect on the Company’s financial condition and results of operations.
Wintrust may be adversely affected by interest rate changes.
Wintrust’s interest income and interest expense are affected by general economic conditions and by the policies of regulatory authorities, including the monetary policies of the Federal Reserve. Changes in interest rates may influence the growth rate of loans and deposits, the quality of the loan portfolio, loan and deposit pricing, the volume of loan originations in Wintrust’s mortgage banking business and the value that Wintrust can recognize on the sale of mortgage loans in the secondary market. Wintrust expects the results of its mortgage banking business in selling loans into the secondary market will be negatively impacted during periods of rising interest rates.
With the relatively low interest rates that prevailed from 2002 through 2005, Wintrust had been able to augment the total return of its investment securities portfolio by selling call options on fixed-income securities it owns. However, as a result of rising interest rates, Wintrust’s ability to engage in such transactions has been greatly limited. During 2007 and 2006, Wintrust recorded fee income of approximately $2.6 million and $3.2 million, respectively, from premiums earned on these option transactions, compared to approximately $11.4 million in 2005. Wintrust’s opportunities to sell covered call options may be limited in the future if rates rise. The loss of such premium income or changes in the growth rate, quality and pricing of Wintrust’s loan and deposit portfolio caused by changes in interest rates could have a material adverse effect on Wintrust’s financial condition and results of operations.
Wintrust is subject to lending risk.
There are inherent risks associated with the Company’s lending activities. Increases in interest rates and/or weakening economic conditions could adversely impact the ability of borrowers to repay outstanding loans or the value of the collateral securing these loans. A significant portion of the Company’s loan portfolio consisted of commercial and commercial real estate loans. These types of loans are generally viewed as having more risk of default than residential real estate loans or consumer loans. These types of loans are also typically larger than residential real estate loans and consumer loans. Because the Company’s loan portfolio contains a significant number of commercial and commercial real estate loans, the deterioration of these loans could cause a significant increase in non-performing loans. An increase in non-performing loans could result in a net loss of earnings from these loans, an increase in the provision for credit losses and an increase in loan charge-
2007 Annual Report
offs, all of which could have a material adverse effect on the Company’s financial condition and results of operations.
Wintrust’s allowance for loan losses may prove to be insufficient to absorb losses that may occur in its loan portfolio.
Wintrust’s allowance for loan losses is established in consultation with management of its operating subsidiaries and is maintained at a level considered adequate by management to absorb loan losses that are inherent in the portfolios. At December 31, 2007, Wintrust’s allowance for loan losses was 70.1% of total nonperforming loans and 0.74% of total loans. The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond its control, and such losses may exceed current estimates. Estimating loan loss allowances for Wintrust’s newer banks is more difficult because rapidly growing and de novo bank loan portfolios are, by their nature, unseasoned. Therefore, the Banks may be more susceptible to changes in estimates, and to losses exceeding estimates, than banks with more seasoned loan portfolios. There can be no assurance that the allowance for loan losses will prove sufficient to cover actual loan or lease losses in the future, which could result in a material adverse effect on Wintrust’s financial condition and results of operations.
De novo operations and branch openings impact Wintrust’s profitability.
Wintrust’s financial results have been and will continue to be impacted by its strategy of de novo bank formations and branch openings. Wintrust expects to undertake additional de novo bank formations or branch openings. Based on Wintrust’s experience, its management believes that it generally takes from 13 to 24 months for de novo banks to first achieve operational profitability, depending on the number of banking facilities opened, the impact of organizational and overhead expenses, the start-up phase of generating deposits and the time lag typically involved in redeploying deposits into attractively priced loans and other higher yielding earning assets. However, it may take longer than expected or than the amount of time Wintrust has historically experienced for new banks and/or banking facilities to reach profitability, and there can be no guarantee that these new banks or branches will ever be profitable. To the extent Wintrust undertakes additional de novo bank, branch and business formations, its level of reported net income, return on average equity and return on average assets will be impacted by start-up costs associated with such operations, and it is likely to continue to experience the effects of higher expenses relative to operating income from the new operations. These expenses may be higher than Wintrust expected or than its experience has shown, which could have a material adverse effect on Wintrust’s financial condition and results of operations.
Wintrust’s premium finance business involves unique operational risks and could expose it to significant losses.
Of Wintrust’s total loans at December 31, 2007, 16%, or approximately $1.1 billion, were comprised of commercial insurance premium finance receivables that it generates through FIFC and Broadway. These loans involve a different, and possibly higher, level of risk of delinquency or collection than generally associated with loan portfolios of more traditional community banks because Wintrust conducts lending in this segment primarily through relationships with a large number of unaffiliated insurance agents and because the borrowers are located nationwide. FIFC and Broadway also face unique operational and internal control challenges due to the relatively rapid turnover of the premium finance loan portfolio and high volume of new loan originations. As a result, risk management and general supervisory oversight may be more difficult than in the Banks. FIFC and Broadway may also be more susceptible to third party fraud. Acts of fraud are difficult to detect and deter, and Wintrust cannot assure investors that its risk management procedures and controls will prevent losses from fraudulent activity. For example, in the third quarter of 2000, FIFC recorded a non-recurring after-tax charge of $2.6 million in connection with a series of fraudulent loan transactions perpetrated against FIFC by one independent insurance agency located in Florida. Although Wintrust has since enhanced its internal controls system at FIFC, it may continue to be exposed to the risk of significant loss in its premium finance business, which could result in a material adverse effect on Wintrust’s financial condition and results of operations. Additionally, to the extent that affiliates of insurance carriers, banks, and other lending institutions add greater service and flexibility to their financing practices in the future, the Company’s operations could be adversely affected. There can be no assurance that FIFC and Broadway will be able to continue to compete successfully in its markets.
Wintrust may not be able to obtain liquidity and income from the sale of premium finance receivables in the future.
Wintrust has sold some of the loans FIFC originates to unrelated third parties. Wintrust recognized gains on the sales of these receivables, and the proceeds of such sales have provided Wintrust with additional liquidity. However, Wintrust did not sell any of these loans in the second half of 2006 or the first three quarters of 2007 due to capacity to retain such loans with the Banks. In the fourth quarter of 2007, Wintrust sold $230 million of premium finance receivables to unrelated third parties. Consistent with its strategy to be asset driven, Wintrust may pursue similar sales of premium finance receivables in the future; however, it cannot assure you that there will continue to be a market for the sale of these loans and the extent of Wintrust’s future sales of these loans will depend on the level of new volume growth in relation to its capacity to maintain the loans
Wintrust Financial Corporation
within the Banks’ loan portfolios. Because Wintrust has a recourse obligation to the purchaser of premium finance loans that it sells, it could incur losses in connection with the loans sold if collections on the underlying loans prove to be insufficient to repay to the purchaser the principal amount of the loans sold plus interest at the negotiated buy-rate and if the collection shortfall on the loans sold exceeds Wintrust’s estimate of losses at the time of sale. An inability to sell premium finance receivables in the future or the failure of collections on the underlying loans to be sufficient to repay the principal amount of such loans could result in a material adverse effect on Wintrust’s financial condition and results of operations.
Wintrust historically has engaged in numerous acquisitions. Wintrust may not be able to continue to implement such an acquisition strategy in the future and there are risks associated with such acquisitions.
In the past several years, Wintrust has completed numerous acquisitions of banks and other financial service related companies and may continue to make such acquisitions in the future. Wintrust seeks merger or acquisition partners that are culturally similar and have experienced management and possess either significant market presence or have potential for improved profitability through financial management, economies of scale or expanded services. Failure to successfully identify and complete acquisitions likely will result in Wintrust achieving slower growth. Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things:
•
potential exposure to unknown or contingent liabilities or asset quality issues of the target company;
•
difficulty and expense of integrating the operations and personnel of the target company;
•
potential disruption to Wintrust’s business, including diversion of Wintrust’s management’s time and attention;
•
the possible loss of key employees and customers of the target company;
•
difficulty in estimating the value of the target company; and
•
potential changes in banking or tax laws or regulations that may affect the target company.
Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of Wintrust’s tangible book value and net income per common share may occur in connection with any future transaction. Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition could have a material adverse effect on Wintrust’s financial condition and results of operations.
Wintrust is subject to extensive government regulation and supervision.
The Company and its subsidiaries are subject to extensive federal and state regulation and supervision. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. These regulations affect the Company’s lending practices, capital structure, investment practices, dividend policy and growth, among other things. Changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could affect Wintrust in substantial and unpredictable ways. Failure to comply with laws, regulations or policies could result in sanctions by regulatory agencies, civil money penalties and/or reputation damage, which could have a material adverse effect on the Company’s business, financial condition and results of operations. See the section captioned “Supervision and Regulation” in Item 1. Business for additional information.
Wintrust’s profitability depends significantly on economic conditions in the state of Illinois.
Wintrust’s success depends primarily on the general economic conditions of the State of Illinois and the specific local markets in which the Company operates. Unlike larger national or other regional banks that are more geographically diversified, Wintrust provides banking and financial services to customers primarily in the greater Chicago and southeast Wisconsin metropolitan areas. The local economic conditions in these areas have a significant impact on the demand for Wintrust’s products and services as well as the ability of Wintrust’s customers to repay loans, the value of the collateral securing loans and the stability of Wintrust’s deposit funding sources. A significant decline in economic conditions, caused by inflation, recession, acts of terrorism, outbreak of hostilities or other international or domestic occurrences, unemployment, changes in securities markets or other factors with impact on these local markets could, in turn, have a material adverse effect on our financial condition and results of operations.
Wintrust relies on dividends from its subsidiaries for most of its revenue.
Wintrust is a separate and distinct legal entity from its subsidiaries. It receives substantially all of its revenue from dividends from its subsidiaries. These dividends are the principal source of funds to pay dividends on the Company’s common stock and interest and principal on its debt. Various federal and
2007 Annual Report
state laws and regulations limit the amount of dividends that the Banks and certain non-bank subsidiaries may pay to Wintrust. In the event that the Banks are unable to pay dividends to Wintrust, it may not be able to service debt, pay obligations or pay dividends on the Company’s common stock. The inability to receive dividends from the Banks could have a material adverse effect on the Company’s business, financial condition and results of operations. See the section captioned “Supervision and Regulation” in Item 1. - Business for more information.
Wintrust’s information systems may experience an interruption or breach in security.
Wintrust relies heavily on communications and information systems to conduct its business. Any failure, interruption, or breach in security of these systems could result in failures or disruptions in customer relationship management, general ledger, deposit, loan or other systems. While Wintrust has policies and procedures designed to prevent or limit the effect of such a failure, interruption, or security breach of its information systems, there can be no assurance that any such failures, interruptions or security breaches will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures, interruptions or security breaches of our information systems could damage Wintrust’s reputation, result in a loss of customer business, subject Wintrust to additional regulatory scrutiny or civil litigation and possible financial liability, any of which could have a material and adverse effect on Wintrust’s financial condition and results of operations.
Wintrust may issue additional securities, which could dilute the ownership percentage of holders of Wintrust’s common stock.
The Company may issue additional securities to raise additional capital or finance acquisitions or upon the exercise or conversion of outstanding equity awards, and if it does, the ownership percentage of holders of our common stock could be diluted.
Consumers may decide not to use banks to complete their financial transactions.
Technology and other changes are allowing parties to complete financial transactions that historically have involved banks through alternative methods. For example, consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts or mutual funds. Consumers can also complete transactions such as paying bills and transferring funds directly without the assistance of banks. The process of eliminating banks as intermediaries could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on the Company’s financial condition and results of operations.
Wintrust’s future success depends, in part, on its ability to attract and retain experienced and qualified personnel.
Wintrust believes that its future success depends, in part, on its ability to attract and retain experienced personnel, including its senior management and other key personnel. The loss of any of its senior managers or other key personnel, or its inability to identify, recruit and retain such personnel, could materially and adversely affect Wintrust’s business, operating results and financial condition.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
ITEM 2. PROPERTIES
The Company’s executive offices are located in the banking facilities of Lake Forest Bank. Certain corporate functions are also located at the various Bank subsidiaries.
The Company’s Banks operate through 77 banking facilities, the majority of which are owned. The Company owns 110 Automatic Teller Machines, the majority of which are housed at banking locations. The banking facilities are located in communities throughout the Chicago metropolitan area and southern Wisconsin. The Banks also own two locations that are used as operations centers. Excess space in certain properties is leased to third parties.
WHI has two locations, one in downtown Chicago and one in Appleton, Wisconsin, both of which are leased, as well as office locations at various Banks. WestAmerica has 18 locations in 9 states, all of which are leased, as well as office locations at various Banks. FIFC and Tricom each has one location, both of which are owned. WITS has one location which is owned and one which is leased. Broadway has one location in New York, which is leased. In addition, the Company owns other real estate acquired for further expansion that, when considered in the aggregate, is not material to the Company’s financial position.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries, from time to time, are subject to pending and threatened legal action and proceedings arising in the ordinary course of business. Any such litigation currently pending against the Company or its subsidiaries is incidental to the Company’s business and, based on information currently available to management, management believes the outcome of such actions or proceedings will not have a material adverse effect on the operations or financial position of the Company.
Wintrust Financial Corporation
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of 2007.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Company’s common stock is traded on The Nasdaq Stock Market under the symbol WTFC. The following table sets forth the high and low sales prices reported on Nasdaq for the common stock by fiscal quarter during 2007 and 2006.
Performance Graph
The following performance graph compares the five-year percentage change in the Company’s cumulative shareholder return on common stock compared with the cumulative total return on composites of (1) all Nasdaq National Market stocks for United States companies (broad market index) and (2) all Nasdaq National Market bank stocks (peer group index). Cumulative total return is computed by dividing the sum of the cumulative amount of dividends for the measurement period and the difference between the Company’s share price at the end and the beginning of the measurement period by the share price at the beginning of the measurement period. The Nasdaq National Market for United States companies’ index comprises all domestic common shares traded on the Nasdaq National Market and the Nasdaq Small-Cap Market. The Nasdaq National Market bank stocks index comprises all banks traded on the Nasdaq National Market and the Nasdaq Small- Cap Market.
This graph and other information furnished in the section titled “Performance Graph” under this Part II, Item 5 of this Form 10-K shall not be deemed to be “soliciting” materials or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.
2007 Annual Report
Approximate Number of Equity Security Holders
As of February 25, 2008 there were approximately 1,636 shareholders of record of the Company’s common stock.
Dividends on Common Stock
The Company’s Board of Directors approved the first semiannual cash dividend on its common stock in January 2000 and has continued to approve a semi-annual dividend since that time.
Following is a summary of the cash dividends paid in 2006 and 2007:
In January 2008, the Company’s Board of Directors approved a 12.5% increase in its semi-annual dividend to $0.18 per share. The dividend was paid on February 21, 2008 to shareholders of record as of February 7, 2008.
The final determination of timing, amount and payment of dividends is at the discretion of the Company’s Board of Directors and will depend upon the Company’s earnings, financial condition, capital requirements and other relevant factors. Additionally, the payment of dividends is also subject to statutory restrictions and restrictions arising under the terms of the Company’s Trust Preferred Securities offerings and under certain financial covenants in the Company’s revolving line of credit.
Because the Company’s consolidated net income consists largely of net income of the Banks, WestAmerica, FIFC, Broadway, Tricom, WHTC and the Wayne Hummer Companies, the Company’s ability to pay dividends depends upon its receipt of dividends from these entities. The Banks’ ability to pay dividends is regulated by banking statutes. See “Financial Institution Regulation Generally - Dividends” on page 106 of this Form 10-K. During 2007, 2006 and 2005, the Banks paid $105.9 million, $76.8 million and $45.1 million, respectively, in dividends to the Company. De novo banks are prohibited from paying dividends during their first three years of operations. As of January 1, 2008, Old Plank Trail Bank, which began operations in March 2006, was subject to this additional dividend restriction. The de novo period for Old Plank Trail Bank will end in March 2009.
Reference is made to Note 19 to the Consolidated Financial Statements and “Liquidity and Capital Resources” contained in this Annual Report for a description of the restrictions on the ability of certain subsidiaries to transfer funds to the Company in the form of dividends.
Recent Sales of Unregistered Securities
None.
Wintrust Financial Corporation
Issuer Purchases of Equity Securities
On April 30, 2007, the Company’s Board of Directors authorized the repurchase of up to an additional 1.0 million shares of its outstanding common stock over the next 12 months. This repurchase authorization replaced the 2.0 million share repurchase authorization that was announced in July 2006. Following is a summary of the stock repurchases made during the fourth quarter of 2007:
ISSUER PURCHASES OF EQUITY SECURITIES
All shares repurchased were made in open market trades except for 1,059 shares which were repurchased in connection with the issuance of shares pursuant to the Company’s Stock Incentive Plan.
On January 24, 2008, the Company’s Board of Directors authorized the Company to repurchase up to 1.0 million shares of its outstanding common stock over the next 12 months.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Certain information required in response to this item is contained in this Annual Report under the caption “Selected Financial Highlights” which appears on page 3 of this Annual Report .
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required in response to this item is contained in this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which appears on pages 24-57 of this Annual Report. This discussion and analysis of financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in this Annual Report.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Certain information required in response to this item is contained in this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Asset-Liability Management,” which appears on pages 52-54 of this Annual Report. That information should be read in conjunction with the Consolidated Financial Statements and notes thereto included in this Annual Report.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required in response to this item is contained in this Annual Report under the caption “Consolidated Financial Statements,” which is included on pages 58-94 of this Annual Report.
2007 Annual Report
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company made no changes in or had any disagreements with its independent accountants during the two most recent fiscal years or any subsequent interim period.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report, management of the Company, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). 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 were effective, in ensuring the information relating to the Company (and its consolidated subsidiaries) required to be disclosed by the Company in the reports it files or submits under the Exchange Act was recorded, processed, summarized and reported in a timely manner.
Internal Control Over Financial Reporting
Management’s responsibilities relating to establishing and maintaining effective disclosure controls and procedures include establishing and maintaining effective internal control over financial reporting that is designed to produce reliable financial statements in accordance with accounting principles generally accepted in the United States. As disclosed in the Report on Management’s Assessment of Internal Control Over Financial Reporting, on page 95 of this Annual Report, management, with the participation of the Chief Executive Officer and Chief Financial Officer assessed the effectiveness of the Company’s system of internal control over financial reporting as of December 31, 2007, in relation to criteria for the effective internal control over financial reporting as described in “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of December 31, 2007, the Company’s system of internal control over financial reporting met those criteria and is effective.
The Company’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2007, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears on page 96 of this Annual Report.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2007 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required in response to this item will be contained in the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held May 22, 2008 (the “Proxy Statement”) under the captions “Election of Directors,” “Executive Officers of the Company,” “Board of Directors’ Committees and Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” and is incorporated herein by reference.
The Company has adopted a Corporate Code of Ethics which complies with the rules of the SEC and the listing standards of the Nasdaq National Market. The code applies to all of the Company’s directors, officers and employees and is included as Exhibit 14.1 and posted on the Company’s website (www.wintrust.com). The Company will post on its website any amendments to, or waivers from, its Corporate Code of Ethics as the code applies to its directors or executive officers.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information required in response to this item will be contained in the Company’s Proxy Statement under the caption “Executive Compensation,” “Director Compensation” and “Compensation Committee Report” and is incorporated herein by reference. The information included under the heading “Compensation Committee Report” in the Proxy Statement shall not be deemed “soliciting” materials or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.
Wintrust Financial Corporation
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to security ownership of certain beneficial owners and management is incorporated by reference to the section “Security Ownership of Certain Beneficial Owners, Directors and Management” that will be included in the Company’s Proxy Statement.
The following table summarizes information as of December 31, 2007, relating to the Company’s equity compensation plans pursuant to which common stock is authorized for issuance:
Equity Compensation Plan Information
(1)
Excludes 124,132 shares of the Company’s common stock issuable pursuant to the exercise of options previously granted under the plans of Advantage National Bancorp, Inc., Village Bancorp, Inc., Northview Financial Corporation, Town Bankshares, Ltd., First Northwest Bancorp, Inc. and Hinsbrook Bancshares, Inc. The weighted average exercise price of those options is $24.92. No additional awards will be made under these plans.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required in response to this item will be contained in the Company’s Proxy Statement under the sub-caption “Related Party Transactions” and is incorporated herein by reference.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required in response to this item will be contained in the Company’s Proxy Statement under the caption “Audit and Non-Audit Fees Paid” and is incorporated herein by reference.
2007 Annual Report
PART IV
ITEM 15.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)
Documents filed as part of this Report.
Financial statement schedules have been omitted as they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.
3. Exhibits (Exhibits marked with a “*” denote management contracts or compensatory plans or arrangements)
Wintrust Financial Corporated
2007 Annual Report
Wintrust Financial Corporation
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
John S. Lillard
/s/ JOHN S. LILLARD
February 29, 2008
Chairman of the Board of Directors
Edward J. Wehmer
/s/ EDWARD J. WEHMER
February 29, 2008
President and CEO and Director
Allan E. Bulley, Jr.
/s/ ALLAN E. BULLEY, JR.
February 29, 2008
Director
Peter D. Crist
/s/ PETER D. CRIST
February 29, 2008
Director
Bruce K. Crowther
/s/ BRUCE K. CROWTHER
February 29, 2008
Director
Joseph F. Damico
/s/ JOSEPH F. DAMICO
February 29, 2008
Director
Bert A. Getz, Jr.
/s/ BERT A. GETZ, JR.
February 29, 2008
Director
Charles H. James III
/s/ CHARLES H. JAMES III
February 29, 2008
Director
Albin F. Moschner
/s/ ALBIN F. MOSCHNER
February 29, 2008
Director
Thomas J. Neis
/s/ THOMAS J. NEIS
February 29, 2008
Director
Hollis W. Rademacher
/s/ HOLLIS W. RADEMACHER
February 29, 2008
Director
John J. Schornack
/s/ JOHN J. SCHORNACK
February 29, 2008
Director
Ingrid S. Stafford
/s/ INGRID S. STAFFORD
February 29, 2008
Director
2007 Annual Report
Corporate Locations
Corporate Headquarters
Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, IL 60045
847-615-4096
Illinois Banking Locations
ALGONQUIN
Algonquin Bank & Trust
4049 W. Algonquin Rd.
Algonquin, IL 60102
847-669-7500
ANTIOCH
State Bank of The Lakes
440 Lake St.
Antioch, IL 60002
847-395-2700
ARLINGTON HEIGHTS
Village Bank & Trust
234 W. Northwest Hwy.
Arlington Heights, IL 60004
847-670-1000
Village Bank & Trust
150 E. Rand Rd.
Arlington Heights, IL 60004
847-870-5000
Village Bank & Trust
311 S. Arlington Heights Rd.
Arlington Heights, IL 60005
847-483-6000
Village Bank & Trust
1845 E. Rand Rd.
Arlington Heights, IL 60004
847-483-6000
BARRINGTON
Barrington Bank & Trust Company
201 S. Hough St.
Barrington, IL 60010
847-842-4500
Barrington Bank & Trust Company
233 W. Northwest Hwy.
Barrington, IL 60010
847-381-1715
BLOOMINGDALE
Old Town Bank & Trust of Bloomingdale
165 W. Lake St.
Bloomingdale, IL 60108
630-295-9111
BUFFALO GROVE
Buffalo Grove Bank & Trust
200 N. Buffalo Grove Rd.
Buffalo Grove, IL 60089
847-634-8400
CARY
Cary Bank & Trust
60 E. Main St.
Cary, IL 60013
847-462-8881
CHICAGO
Beverly Bank & Trust Company
10258 S. Western Ave.
Chicago, IL 60643
773-239-2265
Beverly Bank & Trust Company
1908 W. 103rd St.
Chicago, IL 60643
773-239-2265
North Shore Community Bank & Trust Co.
4343 W. Peterson Ave.
Chicago, IL 60646
773-545-5700
CLARENDON HILLS
Clarendon Hills Bank
200 W. Burlington Ave.
Clarendon Hills, IL 60514
630-323-1240
CRYSTAL LAKE
Crystal Lake Bank & Trust Company
70 N. Williams St.
Crystal Lake, IL 60014
815-479-5200
Crystal Lake Bank & Trust Company
27 N. Main St.
Crystal Lake, IL 60014
Crystal Lake Bank & Trust Company
1000 McHenry Ave.
Crystal Lake, IL 60014
815-479-5715
DARIEN
Hinsbrook Bank & Trust
6700 S. Route 83
Darien, IL 60561
DEERFIELD
Deerfield Bank & Trust
660 Deerfield Rd.
Deerfield, IL 60015
847-945-8660
DOWNERS GROVE
Community Bank of Downers Grove
1111 Warren Ave.
Downers Grove, IL 60515
630-968-4700
Community Bank of Downers Grove
718 Ogden Ave.
Downers Grove, IL 60515
630-435-3600
ELK GROVE VILLAGE
Elk Grove Village Bank & Trust
75 E. Turner Ave.
Elk Grove Village, IL 60007
847-364-0100
FRANKFORT
Old Plank Trail Community Bank
37 Old Frankfort Way
Frankfort, IL 60423
815-464-6888
GENEVA
St. Charles Bank & Trust Company
2401 Kaneville Rd.
Geneva, IL 60134
630-845-4800
GLEN ELLYN
Glen Ellyn Bank & Trust
500 Roosevelt Rd.
Glen Ellyn, IL 60137
630-469-3000
GLENCOE
North Shore Community Bank & Trust Co.
362 Park Ave.
Glencoe, IL 60022
847-835-1700
North Shore Community Bank & Trust Co.
633 Vernon Ave.
Glencoe, IL 60022
GRAYSLAKE
State Bank of The Lakes
50 Commerce Dr.
Grayslake, IL 60030
847-548-2700
GURNEE
Gurnee Community Bank
675 N. O’Plaine Rd.
Gurnee, IL 60031
847-625-3800
Wintrust Financial Corporation
HIGHLAND PARK
Highland Park Bank & Trust
1949 St. Johns Ave.
Highland Park, IL 60035
847-432-9988
Highland Park Bank & Trust
643 Roger Williams Ave.
Highland Park, IL 60035
847-266-0300
HIGHWOOD
Bank of Highwood - Fort Sheridan
507 Sheridan Rd.
Highwood, IL 60040
847-266-7600
HINSDALE
Hinsdale Bank & Trust Company
25 E. First St.
Hinsdale, IL 60521
630-323-4404
Hinsdale Bank & Trust Company
130 W. Chestnut
Hinsdale, IL 60521
630-655-8025
HOFFMAN ESTATES
Hoffman Estates Community Bank
1375 Palatine Rd.
Hoffman Estates, IL 60192
847-963-9500
Hoffman Estates Community Bank
2497 W. Golf Rd.
Hoffman Estates, IL 60169
847-884-0500
ISLAND LAKE
Island Lake Community Bank
229 E. State Rd.
Island Lake, IL 60042
847-487-3777
LAKE BLUFF
Lake Forest Bank & Trust Company
103 E. Scranton Ave.
Lake Bluff, IL 60044
847-615-4060
LAKE FOREST
Lake Forest Bank & Trust Company
727 N. Bank Ln.
Lake Forest, IL 60045
847-234-2882
Lake Forest Bank & Trust Company
780 N. Bank Ln.
Lake Forest, IL 60045
847-615-4022
Lake Forest Bank & Trust Company
911 S. Telegraph Rd.
Lake Forest, IL 60045
847-615-4098
Lake Forest Bank & Trust Company
810 S. Waukegan Rd.
Lake Forest, IL 60045
847-615-4080
LAKE VILLA
Lake Villa Community Bank
345 S. Milwaukee Ave.
Lake Villa, IL 60046
847-265-0300
LIBERTYVILLE
Libertyville Bank & Trust Company
507 N. Milwaukee Ave.
Libertyville, IL 60048
847-367-6800
Libertyville Bank & Trust Company
201 E. Hurlburt Court
Libertyville, IL 60048
847-247-4045
Libertyville Bank & Trust Company
1200 S. Milwaukee Ave.
Libertyville, IL 60048
847-367-6800
LINDENHURST
State Bank of The Lakes
2031 Grand Ave.
Lindenhurst, IL 60046
847-356-5700
McHENRY
McHenry Bank & Trust
2205 N. Richmond Rd.
McHenry, IL 60050
815-344-6600
State Bank of The Lakes
2730 W. Route 120
McHenry, IL 60050
815-344-5100
MOKENA
Old Plank Trail Community Bank
20012 Wolf Rd.
Mokena, IL 60448
708-478-4447
MUNDELEIN
Mundelein Community Bank
1110 W. Maple Ave.
Mundelein, IL 60060
847-837-1110
NEW LENOX
Old Plank Trail Community Bank
280 Veterans Pkwy.
New Lenox, IL 60451
815-485-0001
NORTH CHICAGO
North Chicago Community Bank
1801 Sheridan Rd.
North Chicago, IL 60064
847-473-3006
NORTHBROOK
Northbrook Bank & Trust Company
1100 Waukegan Rd.
Northbrook, IL 60062
847-418-2800
Northbrook Bank & Trust Company
875 Sanders Rd.
Northbrook, IL 60062
847-418-2850
NORTHFIELD
Northview Bank & Trust
245 Waukegan Rd.
Northfield, IL 60093
847-446-0245
Northview Bank & Trust
1751 Orchard Ln.
Northfield, IL 60093
847-441-1751
PALATINE
Palatine Bank & Trust
110 W. Palatine Rd.
Palatine, IL 60067
847-963-0047
RIVERSIDE
Riverside Bank
17 E. Burlington
Riverside, IL 60546
708-447-3222
ROSELLE
Advantage National Bank
1350 W. Lake St.
Roselle, IL 60172
630-529-0100
2007 Annual Report
SKOKIE
North Shore Community Bank & Trust Co.
7800 Lincoln Ave.
Skokie, IL 60077
847-933-1900
SPRING GROVE
State Bank of The Lakes
1906 Holian Dr.
Spring Grove, IL 60081
815-675-3700
ST. CHARLES
St. Charles Bank & Trust Company
311 N. Second St.
St. Charles, IL 60174
630-377-9500
WAUCONDA
Wauconda Community Bank
495 W. Liberty St.
Wauconda, IL 60084
847-487-2500
Wauconda Community Bank
1180 Dato Ln.
Wauconda, IL 60084
847-487-3770
WESTERN SPRINGS
The Community Bank of Western Springs
1000 Hillgrove Ave.
Western Springs, IL 60558
708-246-7100
WHEATON
Wheaton Bank & Trust Company
211 S. Wheaton Ave.
Wheaton, IL 60187
630-690-1800
WILLOWBROOK
Hinsbrook Bank & Trust
6262 S. Route 83
Willowbrook, IL 60527
630-920-2700
WILMETTE
North Shore Community Bank & Trust Co.
1145 Wilmette Ave.
Wilmette, IL 60091
847-853-1145
North Shore Community Bank & Trust Co.
720 12th St.
Wilmette, IL 60091
North Shore Community Bank & Trust Co.
351 Linden Ave
Wilmette, IL 60091
WINNETKA
North Shore Community Bank & Trust Co.
576 Lincoln Ave.
Winnetka, IL 60093
847-441-2265
Wisconsin Banking Locations
DELAFIELD
Town Bank of Delafield
400 Genesee St.
Delafield, WI 53018
262-646-6888
ELM GROVE
Town Bank of Elm Grove
13150 Watertown Plank Rd.
Elm Grove, WI 53122
262-789-8696
HARTLAND
Town Bank
850 W. North Shore Dr.
Hartland, WI 53029
262-367-1900
MADISON
Town Bank of Madison
10 W. Mifflin St.
Madison, WI 53703
608-282-4840
WALES
Town Bank of Wales
200 W. Summit Ave.
Wales, WI 53183
262-968-1740
Wintrust Financial Corporation
Wayne Hummer Wealth Management
Wayne Hummer Investments, L.L.C.
Wayne Hummer Trust Company
Wayne Hummer Asset Management Co.
Headquarters
222 South Riverside Plaza
28th Floor
Chicago, IL 60606
312-431-1700
Branch Offices
4049 West Algonquin Road
Algonquin, IL 60102
815-479-1710
440 Lake Street
Antioch, IL 60002
847-838-7060
311 South Arlington Heights Road
Arlington Heights, IL 60005
847-483-6039
201 South Hough Street
Barrington, IL 60010
847-842-2607
165 West Lake Street
Bloomingdale, IL 60108
847-879-7935
4343 West Peterson Avenue
Chicago, IL 60646
847-251-4385
10258 South Western Avenue
Chicago, IL 60643
773-298-6228
1111 Warren Avenue
Downers Grove, IL 60515
630-325-6571
500 Roosevelt Road
Glen Ellyn, IL 60137
630-588-4093
50 Commerce Drive
Grayslake, IL 60030
847-838-7608
675 North O’Plaine Road
Gurnee, IL 60031
847-549-1578
25 East First Street
Hinsdale, IL 60521
630-655-8485
727 North Bank Lane
Lake Forest, IL 60045
847-615-4054
810 South Waukegan Avenue
Lake Forest, IL 60045
847-482-8469
1200 South Milwaukee Avenue
Libertyville, IL 60048
847-573-1633
20012 Wolf Road
Mokena, IL 60448
815-462-5510
245 Waukegan Road
Northfield, IL 60093
847-446-4378
110 W. Palatine Rd.
Palatine, IL 60067
847-842-2637
1000 Hillgrove Avenue
Western Springs, IL 60558
708-784-2549
211 South Wheaton Avenue
Wheaton, IL 60187
630-588-4090
720 12th Street
Wilmette, IL 60091
847-853-2093
200 East Washington Street
Appleton, WI 54911
920-734-1474
850 W. North Shore Drive
Hartland, WI 53029
262-646-3157
FIRST Insurance Funding Corp.
450 Skokie Blvd., Suite 1000
Northbrook, IL 60062
847-374-3000
Broadway Premium Funding Corporation
100 Broadway
New York, NY 10005
212-791-7099
Tricom, Inc. of Milwaukee
N48 W16866 Lisbon Road
Menomonee Falls, WI 53051
262-509-6200
WestAmerica Mortgage Company
Colorado Corporate Headquarters
5655 South Yosemite Street, Suite 460
Greenwood Village, Colorado 80111
303-771-2800
Illinois Corporate Headquarters
1 South 660 Midwest Rd., Suite 100
Oakbrook Terrace, Illinois 60181
630-916-9299
Branch Offices
Phoenix, AZ
Scottsdale, AZ
Walnut Creek, CA
Fort Myers, FL
Chicago, IL
Matteson, IL
Oakbrook Terrace, IL
Schaumburg, IL
Tinley Park, IL
Warsaw, IN
Overland Park, KS
Charlotte, NC
Ocean, NJ
2007 Annual Report
Corporate Information
Directors
Allan E. Bulley, Jr.
Peter D. Crist
Bruce K. Crowther
Joseph F. Damico
Bert A. Getz, Jr.
Charles H. James, III
John S. Lillard (Chairman)
Albin F. Moschner
Thomas J. Neis
Hollis W. Rademacher
John J. Schornack
Ingrid S. Stafford
Edward J. Wehmer
Public Listing and Market Symbol
The Company’s Common Stock is traded on The Nasdaq Stock Market® under the symbol WTFC.
Website Location
The Company maintains a financial relations internet website at the following location: www.wintrust.com
Annual Meeting of Shareholders
May 22, 2008
10:00 a.m.
Deerpath Inn
255 East Illinois Road
Lake Forest, Illinois
Form 10-K
The Annual Report on Form 10-K to the Securities and Exchange Commission is contained herein this document. The information is also available on the Internet at the Securities and Exchange Commission’s website. The address for the web site is: http://www.sec.gov.
Transfer Agent
Illinois Stock Transfer Company
209 West Jackson Boulevard
Suite 903
Chicago, Illinois 60606
Telephone: 312-427-2953
Facsimile: 312-427-2879
Wintrust Financial Corporation