Segment Information

The Company’s operations consist of three primary segments: community banking, specialty finance and wealth management.

The three reportable segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies. In addition, each segment’s customer base has varying characteristics and each segment has a different regulatory environment. While the Company’s management monitors each of the fifteen bank subsidiaries’ operations and profitability separately, these subsidiaries have been aggregated into one reportable operating segment due to the similarities in products and services, customer base, operations, profitability measures, and economic characteristics.

For purposes of internal segment profitability, management allocates certain intersegment and parent company balances. Management allocates a portion of revenues to the specialty finance segment related to loans and leases originated by the specialty finance segment and sold or assigned to the community banking segment. Similarly, for purposes of analyzing the contribution from the wealth management segment, management allocates a portion of the net interest income earned by the community banking segment on deposit balances of customers of the wealth management segment to the wealth management segment. See Note 9 — Deposits, for more information on these deposits. Finally, expenses incurred at the Wintrust parent company are allocated to each segment based on each segment's risk-weighted assets.

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 accounting policies of the segments are substantially similar to those described in “Summary of Significant Accounting Policies” in Note 1 of the Company’s 2016 Form 10-K. The Company evaluates segment performance based on after-tax profit or loss and other appropriate profitability measures common to each segment.

The following is a summary of certain operating information for reportable segments:



	Three months ended						$ Change in Contribution			% Change in Contribution
(Dollars in thousands)	June 30, 2017			June 30, 2016			$ Change in Contribution			% Change in Contribution
Net interest income:
Community Banking	$	166,329		$	142,251		$	24,078		17	%
Specialty Finance	28,558			24,352			4,206			17
Wealth Management	4,919			4,383			536			12
Total Operating Segments	199,806			170,986			28,820			17
Intersegment Eliminations	4,603			4,284			319			7
Consolidated net interest income	$	204,409		$	175,270		$	29,139		17	%
Non-interest income:
Community Banking	$	65,007		$	60,813		$	4,194		7	%
Specialty Finance	13,721			12,482			1,239			10
Wealth Management	20,573			19,863			710			4
Total Operating Segments	99,301			93,158			6,143			7
Intersegment Eliminations	(9,329		)	(8,359		)	(970		)	(12	)
Consolidated non-interest income	$	89,972		$	84,799		$	5,173		6	%
Net revenue:
Community Banking	$	231,336		$	203,064		$	28,272		14	%
Specialty Finance	42,279			36,834			5,445			15
Wealth Management	25,492			24,246			1,246			5
Total Operating Segments	299,107			264,144			34,963			13
Intersegment Eliminations	(4,726		)	(4,075		)	(651		)	(16	)
Consolidated net revenue	$	294,381		$	260,069		$	34,312		13	%
Segment profit:
Community Banking	$	46,026		$	34,576		$	11,450		33	%
Specialty Finance	14,849			12,044			2,805			23
Wealth Management	4,022			3,421			601			18
Consolidated net income	$	64,897		$	50,041		$	14,856		30	%
Segment assets:
Community Banking	$	22,032,302		$	20,190,707		$	1,841,595		9	%
Specialty Finance	4,255,109			3,645,077			610,032			17
Wealth Management	641,854			584,832			57,022			10
Consolidated total assets	$	26,929,265		$	24,420,616		$	2,508,649		10	%



	Six months ended						$ Change in Contribution			% Change in Contribution
(Dollars in thousands)	June 30, 2017			June 30, 2016			$ Change in Contribution			% Change in Contribution
Net interest income:
Community Banking	$	322,609		$	283,949		$	38,660		14	%
Specialty Finance	55,370			45,532			9,838			22
Wealth Management	9,975			8,866			1,109			13
Total Operating Segments	387,954			338,347			49,607			15
Intersegment Eliminations	9,035			8,432			603			7
Consolidated net interest income	$	396,989		$	346,779		$	50,210		14	%
Non-interest income:
Community Banking	$	107,723		$	106,480		$	1,243		1	%
Specialty Finance	27,877			24,885			2,992			12
Wealth Management	41,375			38,615			2,760			7
Total Operating Segments	176,975			169,980			6,995			4
Intersegment Eliminations	(18,238		)	(16,429		)	(1,809		)	(11	)
Consolidated non-interest income	$	158,737		$	153,551		$	5,186		3	%
Net revenue:
Community Banking	$	430,332		$	390,429		$	39,903		10	%
Specialty Finance	83,247			70,417			12,830			18
Wealth Management	51,350			47,481			3,869			8
Total Operating Segments	564,929			508,327			56,602			11
Intersegment Eliminations	(9,203		)	(7,997		)	(1,206		)	(15	)
Consolidated net revenue	$	555,726		$	500,330		$	55,396		11	%
Segment profit:
Community Banking	$	83,703		$	69,333		$	14,370		21	%
Specialty Finance	30,947			23,516			7,431			32
Wealth Management	8,625			6,303			2,322			37
Consolidated net income	$	123,275		$	99,152		$	24,123		24	%