Regulatory Matters

Banking laws place restrictions upon the amount of dividends that can be paid to Wintrust by the banks. Based on these laws, the banks could, subject to minimum capital requirements, declare dividends to Wintrust without obtaining regulatory approval in an amount not exceeding (a) undivided profits, and (b) the amount of net income reduced by dividends paid for the current and prior two years. During 2015, 2014 and 2013, cash dividends totaling $22.2 million, $77.0 million and $112.8 million, respectively, were paid to Wintrust by the banks and other subsidiaries. As of January 1, 2016, the banks had approximately $70.2 million available to be paid as dividends to Wintrust without prior regulatory approval and without reducing their capital below the well-capitalized level.

The banks are also required by the Federal Reserve Act to maintain reserves against deposits. Reserves are held either in the form of vault cash or balances maintained with the Federal Reserve Bank and are based on the average daily deposit balances and statutory reserve ratios prescribed by the type of deposit account. At December 31, 2015 and 2014, reserve balances of approximately $412.7 million and $291.0 million, respectively, were required to be maintained at the Federal Reserve Bank.

The Company and the banks are subject to various regulatory capital requirements established by the federal banking agencies that take into account risk attributable to balance sheet and off-balance sheet activities. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly discretionary — actions by regulators, that if undertaken could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the banks must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the banks to maintain minimum amounts and ratios of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and Tier 1 leverage capital (as defined) to average quarterly assets (as defined). The Federal Reserve’s capital guidelines require bank holding companies to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.0%, of which at least 4.50% must be in the form of common equity Tier 1 capital and 6.0% must be in the form of Tier 1 capital. The Federal Reserve also requires a minimum leverage ratio of Tier 1 capital to total assets of 4.0%. In addition the Federal Reserve continues to consider the Tier 1 leverage ratio in evaluating proposals for expansion or new activities. As reflected in the following table, the Company met all minimum capital requirements at December 31, 2015 and 2014:



	2015		2014
Total capital to risk weighted assets	12.2	%	13.0	%
Tier 1 capital to risk weighted assets	10.0		11.6
Common equity Tier 1 capital to risk weighted assets	8.4		N/A
Tier 1 leverage Ratio	9.1		10.2

Wintrust is designated as a financial holding company. Bank holding companies approved as financial holding companies may engage in an expanded range of activities, including the businesses conducted by its wealth management subsidiaries. As a financial holding company, Wintrust’s banks are required to maintain their capital positions at the “well-capitalized” level. As of December 31, 2015, the banks were categorized as well capitalized under the regulatory framework for prompt corrective action. The ratios required for the banks to be “well capitalized” by regulatory definition are 10.0%, 8.0%, 6.5% and 5.0% for Total capital to risk-weighted assets, Tier 1 capital to risk-weighted assets, Common equity Tier 1 capital to risk weighted assets and Tier 1 leverage ratio, respectively.

The banks’ actual capital amounts and ratios as of December 31, 2015 and 2014 are presented in the following table:



(Dollars in thousands)	December 31, 2015								December 31, 2014
	Actual				To Be Well Capitalized by Regulatory Definition				Actual				To Be Well Capitalized by Regulatory Definition
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets):
Lake Forest Bank	$	282,921	11.3	%	$	251,560	10.0	%	$	245,248	10.9	%	$	224,354	10.0	%
Hinsdale Bank	200,436		12.1		165,157		10.0		155,797		11.4		136,415		10.0
Wintrust Bank	377,015		11.3		334,596		10.0		312,223		11.2		279,295		10.0
Libertyville Bank	124,665		11.5		108,619		10.0		113,513		11.4		99,999		10.0
Barrington Bank	187,062		11.3		165,810		10.0		163,162		11.9		137,527		10.0
Crystal Lake Bank	89,476		11.9		75,314		10.0		87,138		12.9		67,482		10.0
Northbrook Bank	145,390		11.0		132,200		10.0		126,325		11.1		114,042		10.0
Schaumburg Bank	87,182		11.4		76,422		10.0		73,999		11.3		65,485		10.0
Village Bank	117,543		11.2		105,027		10.0		103,148		11.2		92,110		10.0
Beverly Bank	92,843		11.1		83,442		10.0		73,808		11.3		65,229		10.0
Town Bank	159,508		12.0		133,344		10.0		130,699		12.1		108,434		10.0
Wheaton Bank	117,373		11.5		102,479		10.0		77,366		11.6		66,920		10.0
State Bank of the Lakes	89,488		11.1		80,923		10.0		78,048		11.6		67,272		10.0
Old Plank Trail Bank	110,058		11.3		97,223		10.0		100,082		12.4		80,420		10.0
St. Charles Bank	81,524		11.2		72,812		10.0		71,123		11.1		63,912		10.0
Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	256,126	10.2	%	$	201,248	8.0	%	$	231,448	10.3	%	$	134,612	6.0	%
Hinsdale Bank	191,553		11.6		132,125		8.0		146,290		10.7		81,849		6.0
Wintrust Bank	311,322		9.3		267,677		8.0		222,845		8.0		167,577		6.0
Libertyville Bank	117,965		10.9		86,895		8.0		107,649		10.8		59,999		6.0
Barrington Bank	176,489		10.6		132,648		8.0		150,705		11.0		82,516		6.0
Crystal Lake Bank	85,521		11.4		60,251		8.0		83,788		12.4		40,489		6.0
Northbrook Bank	129,514		9.8		105,760		8.0		116,808		10.2		68,425		6.0
Schaumburg Bank	71,958		9.4		61,137		8.0		67,427		10.3		39,291		6.0
Village Bank	108,221		10.3		84,021		8.0		97,684		10.6		55,266		6.0
Beverly Bank	76,708		9.2		66,754		8.0		71,197		10.9		39,137		6.0
Town Bank	153,902		11.5		106,675		8.0		125,716		11.6		65,061		6.0
Wheaton Bank	96,799		9.5		81,983		8.0		70,632		10.6		40,152		6.0
State Bank of the Lakes	76,609		9.5		64,738		8.0		69,176		10.3		40,363		6.0
Old Plank Trail Bank	100,506		10.3		77,778		8.0		96,689		12.0		48,252		6.0
St. Charles Bank	75,348		10.4		58,250		8.0		67,588		10.6		38,347		6.0
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	256,126	10.2	%	$	163,514	6.5	%	N/A		N/A		N/A		N/A
Hinsdale Bank	191,553		11.6		107,352		6.5		N/A		N/A		N/A		N/A
Wintrust Bank	311,322		9.3		217,488		6.5		N/A		N/A		N/A		N/A
Libertyville Bank	117,965		10.9		70,603		6.5		N/A		N/A		N/A		N/A
Barrington Bank	176,489		10.6		107,777		6.5		N/A		N/A		N/A		N/A
Crystal Lake Bank	85,521		11.4		48,954		6.5		N/A		N/A		N/A		N/A
Northbrook Bank	129,514		9.8		85,930		6.5		N/A		N/A		N/A		N/A
Schaumburg Bank	71,958		9.4		49,674		6.5		N/A		N/A		N/A		N/A
Village Bank	108,221		10.3		68,267		6.5		N/A		N/A		N/A		N/A
Beverly Bank	76,708		9.2		54,237		6.5		N/A		N/A		N/A		N/A
Town Bank	153,902		11.5		86,674		6.5		N/A		N/A		N/A		N/A
Wheaton Bank	96,799		9.5		66,611		6.5		N/A		N/A		N/A		N/A
State Bank of the Lakes	76,609		9.5		52,600		6.5		N/A		N/A		N/A		N/A
Old Plank Trail Bank	100,506		10.3		63,195		6.5		N/A		N/A		N/A		N/A
St. Charles Bank	75,348		10.4		47,328		6.5		N/A		N/A		N/A		N/A




(Dollars in thousands)	December 31, 2015								December 31, 2014
	Actual				To Be Well Capitalized by Regulatory Definition				Actual				To Be Well Capitalized by Regulatory Definition
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Leverage Ratio:
Lake Forest Bank	$	256,126	9.1	%	$	140,541	5.0	%	$	231,448	9.0	%	$	128,590	5.0	%
Hinsdale Bank	191,553		9.9		97,023		5.0		146,290		9.7		75,509		5.0
Wintrust Bank	311,322		8.9		174,117		5.0		222,845		7.4		149,925		5.0
Libertyville Bank	117,965		9.6		61,320		5.0		107,649		9.3		58,032		5.0
Barrington Bank	176,489		9.8		90,168		5.0		150,705		9.4		80,086		5.0
Crystal Lake Bank	85,521		9.4		45,445		5.0		83,788		10.3		40,502		5.0
Northbrook Bank	129,514		8.6		75,287		5.0		116,808		8.9		65,626		5.0
Schaumburg Bank	71,958		8.4		42,707		5.0		67,427		8.9		37,930		5.0
Village Bank	108,221		9.2		58,817		5.0		97,684		9.4		51,753		5.0
Beverly Bank	76,708		8.4		45,757		5.0		71,197		9.3		38,304		5.0
Town Bank	153,902		10.3		74,452		5.0		125,716		10.1		62,283		5.0
Wheaton Bank	96,799		8.1		59,482		5.0		70,632		8.8		40,152		5.0
State Bank of the Lakes	76,609		8.3		46,001		5.0		69,176		8.4		41,382		5.0
Old Plank Trail Bank	100,506		8.5		59,383		5.0		96,689		8.4		57,717		5.0
St. Charles Bank	75,348		9.4		39,942		5.0		67,588		9.8		34,504		5.0

Wintrust’s mortgage banking division and broker/dealer subsidiary are also required to maintain minimum net worth capital requirements with various governmental agencies. The mortgage banking division’s net worth requirements are governed by the Department of Housing and Urban Development and the broker/dealer’s net worth requirements are governed by the SEC. As of December 31, 2015, these business units met their minimum net worth capital requirements.