Shareholders’ Equity and Earnings Per Share

Common Stock Offering

In June 2016, the Company issued through a public offering a total of 3,000,000 shares of its common stock. Net proceeds to the Company totaled approximately $152.8 million.

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.

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 current conversion rate of 24.5569 shares of common stock per share of Series C Preferred Stock subject to customary anti-dilution adjustments. In the first nine months of 2016, pursuant to such terms, 30 shares of the Series C Preferred Stock were converted at the option of the respective holders into 729 shares of the Company's common stock. 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. 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.

Common Stock Warrant

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 the first nine months of 2016, 1,603 warrant shares were exercised, which resulted in 944 shares of common stock issued. At September 30, 2016, all remaining holders of the interest in the warrant were able to exercise 365,829 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.

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. At the April 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 May 26, 2016 to shareholders of record as of May 12, 2016. At the July 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 August 25, 2016 to shareholders of record as of August 11, 2016.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the components of other comprehensive income (loss), including the related income tax effects, and the related amount reclassified to net income for the periods presented (in thousands).



	Accumulated Unrealized Gains (Losses) on Securities			Accumulated Unrealized Losses on Derivative Instruments			Accumulated Foreign Currency Translation Adjustments			Total Accumulated Other Comprehensive Loss
Balance at July 1, 2016	$	3,971		$	(2,220	)	$	(36,191	)	$	(34,440	)
Other comprehensive income (loss) during the period, net of tax, before reclassifications	1,532			1,037			(1,644		)	925
Amount reclassified from accumulated other comprehensive income (loss) into net income, net of tax	(2,005		)	646			—			(1,359		)
Amount reclassified from accumulated other comprehensive income (loss) related to amortization of unrealized losses on investment securities transferred to held-to-maturity from available-for-sale, net of tax	2,295			—			—			2,295
Net other comprehensive income (loss) during the period, net of tax	$	1,822		$	1,683		$	(1,644	)	$	1,861
Balance at September 30, 2016	$	5,793		$	(537	)	$	(37,835	)	$	(32,579	)

Balance at January 1, 2016	$	(17,674	)	$	(2,193	)	$	(42,841	)	$	(62,708	)
Other comprehensive income during the period, net of tax, before reclassifications	20,444			66			5,006			25,516
Amount reclassified from accumulated other comprehensive income (loss) into net income, net of tax	(3,684		)	1,590			—			(2,094		)
Amount reclassified from accumulated other comprehensive income (loss) related to amortization of unrealized losses on investment securities transferred to held-to-maturity from available-for-sale, net of tax	$	6,707		$	—		$	—		$	6,707
Net other comprehensive income during the period, net of tax	$	23,467		$	1,656		$	5,006		$	30,129
Balance at September 30, 2016	$	5,793		$	(537	)	$	(37,835	)	$	(32,579	)

Balance at July 1, 2015	$	(26,333	)	$	(2,727	)	$	(32,811	)	$	(61,871	)
Other comprehensive income (loss) during the period, net of tax, before reclassifications	18,995			(287		)	(6,337		)	12,371
Amount reclassified from accumulated other comprehensive (loss) income into net income, net of tax	60			347			—			407
Amount reclassified from accumulated other comprehensive (loss) income related to amortization of unrealized losses on investment securities transferred to held-to-maturity from available-for-sale, net of tax	—			—			—			—
Net other comprehensive income (loss) during the period, net of tax	$	19,055		$	60		$	(6,337	)	$	12,778
Balance at September 30, 2015	$	(7,278	)	$	(2,667	)	$	(39,148	)	$	(49,093	)



	Accumulated Unrealized Gains (Losses) on Securities			Accumulated Unrealized Losses on Derivative Instruments			Accumulated Foreign Currency Translation Adjustments			Total Accumulated Other Comprehensive Loss
Balance at January 1, 2015	$	(9,533	)	$	(2,517	)	$	(25,282	)	$	(37,332	)
Other comprehensive income (loss) during the period, net of tax, before reclassifications	2,499			(1,027		)	(13,866		)	(12,394		)
Amount reclassified from accumulated other comprehensive loss into net income, net of tax	(244		)	877			—			633
Amount reclassified from accumulated other comprehensive loss related to amortization of unrealized losses on investment securities transferred to held-to-maturity from available-for-sale, net of tax	—			—			—			—
Net other comprehensive income (loss) during the period, net of tax	$	2,255		$	(150	)	$	(13,866	)	$	(11,761	)
Balance at September 30, 2015	$	(7,278	)	$	(2,667	)	$	(39,148	)	$	(49,093	)



	Amount Reclassified from Accumulated Other Comprehensive Income for the
Details Regarding the Component of Accumulated Other Comprehensive Income	Three Months Ended						Nine Months Ended						Impacted Line on the Consolidated Statements of Income
	September 30,						September 30,
	2016			2015			2016			2015
Accumulated unrealized losses on securities
Gains (losses) included in net income	$	3,305		$	(98	)	$	6,070		$	402		Gains (losses) on investment securities, net
	3,305			(98		)	6,070			402			Income before taxes
Tax effect	$	(1,300	)	$	38		$	(2,386	)	$	(158	)	Income tax expense
Net of tax	$	2,005		$	(60	)	$	3,684		$	244		Net income

Accumulated unrealized losses on derivative instruments
Amount reclassified to interest expense on deposits	$	528		$	92		$	1,121		$	92		Interest on deposits
Amount reclassified to interest expense on junior subordinated debentures	537			479			$	1,499		$	1,350		Interest on junior subordinated debentures
	(1,065		)	(571		)	(2,620		)	(1,442		)	Income before taxes
Tax effect	$	419		$	224		$	1,030		$	565		Income tax expense
Net of tax	$	(646	)	$	(347	)	$	(1,590	)	$	(877	)	Net income

Earnings per Share

The following table shows the computation of basic and diluted earnings per share for the periods indicated:



		Three Months Ended				Nine Months Ended
(In thousands, except per share data)		September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Net income		$	53,115	$	38,355	$	152,267	$	121,238
Less: Preferred stock dividends and discount accretion		3,628		4,079		10,884		7,240
Net income applicable to common shares—Basic	(A)	49,487		34,276		141,383		113,998
Add: Dividends on convertible preferred stock, if dilutive		1,578		1,579		4,735		4,740
Net income applicable to common shares—Diluted	(B)	51,065		35,855		146,118		118,738
Weighted average common shares outstanding	(C)	51,679		48,158		49,763		47,658
Effect of dilutive potential common shares
Common stock equivalents		938		978		822		1,070
Convertible preferred stock, if dilutive		3,109		3,071		3,109		3,071
Total dilutive potential common shares		4,047		4,049		3,931		4,141
Weighted average common shares and effect of dilutive potential common shares	(D)	55,726		52,207		53,694		51,799
Net income per common share:
Basic	(A/C)	$	0.96	$	0.71	$	2.84	$	2.39
Diluted	(B/D)	$	0.92	$	0.69	$	2.72	$	2.29

Potentially dilutive common shares can result from stock options, restricted stock unit awards, stock warrants, the Company’s convertible preferred stock and shares to be issued under the Employee Stock Purchase Plan and the Directors Deferred Fee and Stock Plan, being treated as if they had been either exercised or issued, computed by application of the treasury stock method. While potentially dilutive common shares are typically included in the computation of diluted earnings per share, potentially dilutive common shares are excluded from this computation in periods in which the effect would reduce the loss per share or increase the income per share. For diluted earnings per share, net income applicable to common shares can be affected by the conversion of the Company’s convertible preferred stock. Where the effect of this conversion would reduce the loss per share or increase the income per share, net income applicable to common shares is not adjusted by the associated preferred dividends.