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 10 — 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 2017 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, 2018			June 30, 2017			$ Change in Contribution			% Change in Contribution
Net interest income:
Community Banking	$	196,849		$	166,329		$	30,520		18	%
Specialty Finance	32,182			28,558			3,624			13
Wealth Management	4,240			4,919			(679		)	(14	)
Total Operating Segments	233,271			199,806			33,465			17
Intersegment Eliminations	4,899			4,603			296			6
Consolidated net interest income	$	238,170		$	204,409		$	33,761		17	%
Non-interest income:
Community Banking	$	65,705		$	65,007		$	698		1	%
Specialty Finance	16,317			13,721			2,596			19
Wealth Management	23,296			20,573			2,723			13
Total Operating Segments	105,318			99,301			6,017			6
Intersegment Eliminations	(10,085		)	(9,329		)	(756		)	(8	)
Consolidated non-interest income	$	95,233		$	89,972		$	5,261		6	%
Net revenue:
Community Banking	$	262,554		$	231,336		$	31,218		13	%
Specialty Finance	48,499			42,279			6,220			15
Wealth Management	27,536			25,492			2,044			8
Total Operating Segments	338,589			299,107			39,482			13
Intersegment Eliminations	(5,186		)	(4,726		)	(460		)	(10	)
Consolidated net revenue	$	333,403		$	294,381		$	39,022		13	%
Segment profit:
Community Banking	$	65,355		$	46,026		$	19,329		42	%
Specialty Finance	19,536			14,849			4,687			32
Wealth Management	4,689			4,022			667			17
Consolidated net income	$	89,580		$	64,897		$	24,683		38	%
Segment assets:
Community Banking	$	23,979,910		$	22,032,302		$	1,947,608		9	%
Specialty Finance	4,824,307			4,255,109			569,198			13
Wealth Management	660,371			641,854			18,517			3
Consolidated total assets	$	29,464,588		$	26,929,265		$	2,535,323		9	%



	Six months ended						$ Change in Contribution			% Change in Contribution
(Dollars in thousands)	June 30, 2018			June 30, 2017			$ Change in Contribution			% Change in Contribution
Net interest income:
Community Banking	$	381,491		$	322,609		$	58,882		18	%
Specialty Finance	63,706			55,370			8,336			15
Wealth Management	8,681			9,975			(1,294		)	(13	)
Total Operating Segments	453,878			387,954			65,924			17
Intersegment Eliminations	9,374			9,035			339			4
Consolidated net interest income	$	463,252		$	396,989		$	66,263		17	%
Non-interest income:
Community Banking	$	122,252		$	107,723		$	14,529		13	%
Specialty Finance	32,042			27,877			4,165			15
Wealth Management	46,254			41,375			4,879			12
Total Operating Segments	200,548			176,975			23,573			13
Intersegment Eliminations	(19,636		)	(18,238		)	(1,398		)	(8	)
Consolidated non-interest income	$	180,912		$	158,737		$	22,175		14	%
Net revenue:
Community Banking	$	503,743		$	430,332		$	73,411		17	%
Specialty Finance	95,748			83,247			12,501			15
Wealth Management	54,935			51,350			3,585			7
Total Operating Segments	654,426			564,929			89,497			16
Intersegment Eliminations	(10,262		)	(9,203		)	(1,059		)	(12	)
Consolidated net revenue	$	644,164		$	555,726		$	88,438		16	%
Segment profit:
Community Banking	$	123,660		$	83,703		$	39,957		48	%
Specialty Finance	38,511			30,947			7,564			24
Wealth Management	9,390			8,625			765			9
Consolidated net income	$	171,561		$	123,275		$	48,286		39	%