Shareholders’ Equity

A summary of the Company’s common and preferred stock at December 31, 2015 and 2014 is as follows:



	2015		2014
Common Stock:
Shares authorized	100,000,000		100,000,000
Shares issued	48,468,894		46,881,108
Shares outstanding	48,383,279		46,805,055
Cash dividend per share	$	0.44	$	0.40
Preferred Stock:
Shares authorized	20,000,000		20,000,000
Shares issued	5,126,287		126,467
Shares outstanding	5,126,287		126,467

The Company reserves shares of its authorized common stock specifically for the 2007 Plan, the ESPP and the Directors Deferred Fee and Stock Plan ("the DDFS"). The reserved shares and these plans are detailed in Note 17 - Stock Compensation Plans and Other Employee Benefit Plans. The Company also reserves its authorized common stock for conversion of convertible preferred stock and common stock warrants.

Tangible Equity Units

In December 2010, the Company sold 4.6 million 7.50% TEU's at a public offering price of $50.00 per unit. The Company received net proceeds of $222.7 million after deducting underwriting discounts and commissions and estimated offering expenses. Each tangible equity unit was composed of a prepaid common stock purchase contract and a junior subordinated amortizing note due December 15, 2013. The prepaid stock purchase contracts were recorded as surplus (a component of shareholders’ equity), net of issuance costs, and the junior subordinated amortizing notes were recorded as debt within other borrowings. Issuance costs associated with the debt component were recorded as a discount within other borrowings and were amortized over the term of the instrument to December 15, 2013 at which time they were paid off in full. The Company allocated the proceeds from the issuance of the TEU to equity and debt based on the relative fair values of the respective components of each unit.

The aggregate fair values assigned to each component of the TEU offering at the issuance date were as follows:



(Dollars and units in thousands, except unit price)	Equity Component		Debt Component		TEU Total
Units issued ⁽¹⁾	4,600		4,600		4,600
Unit price	$	40.271818	$	9.728182	$	50.00
Gross proceeds	185,250		44,750		230,000
Issuance costs, including discount	5,934		1,419		7,353
Net proceeds	$	179,316	$	43,331	$	222,647

Balance sheet impact
Other borrowings	—		43,331		43,331
Surplus	179,316		—		179,316


(1)	TEUs consisted of two components: one unit of the equity component and one unit of the debt component.

The fair value of the debt component was determined using a discounted cash flow model using the following assumptions: (1) quarterly cash payments of 7.5%; (2) a maturity date of December 15, 2013; and (3) an assumed discount rate of 9.5%. The discount rate used for estimating the fair value was determined by obtaining yields for comparably-rated issuers trading in the market. The debt component was recorded at fair value, and the discount was amortized using the level yield method over the term of the instrument to the settlement date of December 15, 2013.

The fair value of the equity component was determined using Black-Scholes valuation models applied to the range of stock prices contemplated by the terms of the TEU and using the following assumptions: (1) risk-free interest rate of 0.95%; (2) expected stock price volatility in the range of 35%-45%; (3) dividend yield plus stock borrow cost of 0.85%; and (4) term of 3.02 years.

Each junior subordinated amortizing note, which had an initial principal amount of $9.728182, had a stated interest rate of 9.50% per annum, and had a scheduled final installment payment date of December 15, 2013. On each March 15, June 15, September 15 and December 15, the Company paid equal quarterly installments of $0.9375 on each amortizing note. The quarterly installment payable at March 15, 2011, however, was $0.989583. Each payment constituted a payment of interest and a partial repayment of principal. The issuance costs were amortized to interest expense using the effective-interest method.

Each prepaid common stock purchase contract automatically settled on December 15, 2013 and the Company delivered 1.3333 shares of its common stock based on the applicable market value at that time (the average of the volume weighted average price of Company common stock for the twenty (20) consecutive trading days ending on the third trading day immediately preceding December 15, 2013). Upon settlement, an amount equal to $1.00 per common share issued was reclassified from surplus to common stock.

Series A Preferred Stock

In August 2008, the Company issued and sold 50,000 shares of non-cumulative perpetual convertible preferred stock, Series A, liquidation preference $1,000 per share (the "Series A Preferred Stock") for $50 million in a private transaction. Dividends on the Series A Preferred Stock were payable quarterly in arrears at a rate of 8.00% per annum. The Series A Preferred Stock was convertible into common stock at the option of the holder at a conversion rate of 38.88 shares of common stock per share of Series A Preferred Stock. On July 19, 2013, pursuant to such terms, the holder of the Series A Preferred Stock elected to convert all 50,000 shares of Series A Preferred Stock into 1,944,000 shares of the Company's common stock, no par value.

Series C Preferred Stock

In March 2012, the Company issued and sold 126,500 shares of non-cumulative perpetual convertible preferred stock, Series C, liquidation preference $1,000 per share (the “Series C Preferred Stock”) for $126.5 million in a public offering. When, as and if declared, dividends on the Series C Preferred Stock are payable quarterly in arrears at a rate of 5.00% per annum. The Series C Preferred Stock is convertible into common stock at the option of the holder at a conversion rate of 24.3132 shares of common stock per share of Series C Preferred Stock subject to customary anti-dilution adjustments. In 2015, pursuant to such terms, 180 shares of the Series C Preferred Stock were converted at the option of the respective holders into 4,374 shares of the Company's common stock. In 2014, 10 shares of the Series C Preferred Stock were converted at the option of the respective holders into 244 shares of the Company's common stock. On and after April 15, 2017, the Company will have the right under certain circumstances to cause the Series C Preferred Stock to be converted into common stock if the closing price of the Company’s common stock exceeds a certain amount.

Series D Preferred Stock

In June 2015, the Company issued and sold 5,000,000 shares of fixed-to-floating non-cumulative perpetual preferred stock, Series D, liquidation preference $25 per share (the “Series D Preferred Stock”) for $125.0 million in a public offering. When, as and if declared, dividends on the Series D Preferred Stock are payable quarterly in arrears at a fixed rate of 6.50% per annum from the original issuance date to, but excluding, July 15, 2025, and from (and including) that date at a floating rate equal to three-month LIBOR plus a spread of 4.06% per annum.

Common Stock Warrants

Pursuant to the U.S. Department of the Treasury’s (the “U.S. Treasury”) Capital Purchase Program, on December 19, 2008, the Company issued to the U.S. Treasury a warrant to exercise 1,643,295 warrant shares of Wintrust common stock at a per share exercise price of $22.82, subject to customary anti-dilution adjustments, and with a term of 10 years. In February 2011, the U.S. Treasury sold all of its interest in the warrant issued to it in a secondary underwritten public offering. During 2015, certain holders of the interest in the warrant exercised 569,985 warrant shares, which resulted in 313,751 shares of common stock issued. At December 31, 2015, all remaining holders of the interest in the warrant were able to exercise 367,432 warrant shares.

Other

In July 2015, the Company issued 388,573 shares of its common stock in the acquisition of CFIS. In January 2015, the Company issued 422,122 shares of its common stock in the acquisition of Delavan. In May 2013, the Company issued 648,286 shares of its common stock in the acquisition of FNBI.

At the January 2016 Board of Directors meeting, a quarterly cash dividend of $0.12 per share ($0.48 on an annualized basis) was

declared. It was paid on February 25, 2016 to shareholders of record as of February 11, 2016.

The following tables summarize the components of other comprehensive income (loss), including the related income tax effects, for the years ending December 31, 2015, 2014 and 2013:



(In thousands)	Accumulated Unrealized Losses on Securities			Accumulated Unrealized Losses on Derivative Instruments			Accumulated Foreign Currency Translation Adjustments			Total Accumulated Other Comprehensive (Loss) Income
Balance at January 1, 2015	$	(9,533	)	$	(2,517	)	$	(25,282	)	$	(37,332	)
Other comprehensive loss during the period, net of tax, before reclassification	(8,023		)	(941		)	(17,559		)	(26,523		)
Amount reclassified from accumulated other comprehensive income into net income, net of tax	(196		)	1,265			—			1,069
Amount reclassified from accumulated other comprehensive income related to amortization of unrealized losses on investment securities transferred to held-to-maturity from available-for-sale	78			—			—			78
Net other comprehensive (loss) income during the period, net of tax	$	(8,141	)	$	324		$	(17,559	)	$	(25,376	)
Balance at December 31, 2015	$	(17,674	)	$	(2,193	)	$	(42,841	)	$	(62,708	)

Balance at January 1, 2014	$	(53,665	)	$	(2,462	)	$	(6,909	)	$	(63,036	)
Other comprehensive income (loss) during the period, net of tax, before reclassification	43,828			(1,244		)	(18,373		)	24,211
Amount reclassified from accumulated other comprehensive income, net of tax	304			1,189			—			1,493
Net other comprehensive income (loss) during the period, net of tax	$	44,132		$	(55	)	$	(18,373	)	$	25,704
Balance at December 31, 2014	$	(9,533	)	$	(2,517	)	$	(25,282	)	$	(37,332	)

Balance at January 1, 2013	$	6,710		$	(5,292	)	$	6,293		$	7,711
Other comprehensive loss during the period, net of tax, before reclassification	(62,182		)	(251		)	(13,202		)	(75,635		)
Amount reclassified from accumulated other comprehensive income, net of tax	1,807			3,081			—			4,888
Net other comprehensive (loss) income during the period, net of tax	$	(60,375	)	$	2,830		$	(13,202	)	$	(70,747	)
Balance at December 31, 2013	$	(53,665	)	$	(2,462	)	$	(6,909	)	$	(63,036	)



	Amount Reclassified from Accumulated Other Comprehensive Income for the Year Ended,

Details Regarding the Component of Accumulated Other Comprehensive Income	December 31,						Impacted Line on the Consolidated Statements of Income
	2015			2014			Impacted Line on the Consolidated Statements of Income
Accumulated unrealized losses on securities
Gains (losses) included in net income	$	323		$	(504	)	Gains (losses) on available-for-sale securities, net
	323			(504		)	Income before taxes
Tax effect	(127		)	200			Income tax expense
Net of tax	$	196		$	(304	)	Net income

Accumulated unrealized losses on derivative instruments
Amount reclassified to interest expense on deposits	$	252		$	—		Interest on deposits
Amount reclassified to interest expense on junior subordinated debentures	1,830			1,974			Interest on junior subordinated debentures
	(2,082		)	(1,974		)	Income before taxes
Tax effect	817			785			Income tax expense
Net of tax	$	(1,265	)	$	(1,189	)	Net income