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 2018, 2017 and 2016, cash dividends totaling $111.0 million, $122.0 million and $59.0 million, respectively, were paid to Wintrust by the banks and other subsidiaries. As of January 1, 2019, the banks had approximately $350.4 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 FRB and are based on the average daily deposit balances and statutory reserve ratios prescribed by the type of deposit account. At December 31, 2018 and 2017, reserve balances of approximately $611.1 million and $557.7 million, respectively, were required to be maintained at the FRB.

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, 2018 and 2017:



	2018		2017
Total capital to risk weighted assets	11.6	%	12.0	%
Tier 1 capital to risk weighted assets	9.7		9.9
Common Equity Tier 1 capital to risk weighted assets	9.3		9.4
Tier 1 leverage Ratio	9.1		9.3

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, 2018, 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, 2018 and 2017 are presented in the following table:



(Dollars in thousands)	December 31, 2018								December 31, 2017
	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	$	424,872	12.5	%	$	338,823	10.0	%	$	366,407	11.6	%	$	317,180	10.0	%
Hinsdale Bank	256,166		11.9		220,004		10.0		224,577		11.5		195,125		10.0
Wintrust Bank	613,037		11.5		533,154		10.0		512,581		11.2		456,230		10.0
Libertyville Bank	161,453		11.9		135,262		10.0		141,723		11.4		124,637		10.0
Barrington Bank	258,301		11.1		231,871		10.0		234,930		12.0		195,409		10.0
Crystal Lake Bank	107,041		11.6		92,542		10.0		95,532		11.3		84,664		10.0
Northbrook Bank	236,201		11.1		213,524		10.0		222,441		11.4		194,764		10.0
Schaumburg Bank	113,797		11.4		100,151		10.0		111,772		11.9		93,752		10.0
Village Bank	151,653		11.2		135,695		10.0		145,517		11.9		121,867		10.0
Beverly Bank	146,054		11.8		123,618		10.0		132,516		11.7		112,810		10.0
Town Bank	208,479		11.3		184,825		10.0		188,987		11.4		166,253		10.0
Wheaton Bank	165,798		11.3		147,354		10.0		151,141		11.4		132,211		10.0
State Bank of the Lakes	111,530		11.1		100,654		10.0		105,770		11.4		92,518		10.0
Old Plank Trail Bank	151,889		11.4		132,842		10.0		145,272		11.6		125,642		10.0
St. Charles Bank	115,607		11.4		101,337		10.0		105,778		11.4		92,582		10.0
Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	402,156	11.9	%	$	271,058	8.0	%	$	347,924	11.0	%	$	253,744	8.0	%
Hinsdale Bank	244,036		11.3		176,003		8.0		214,061		11.0		156,100		8.0
Wintrust Bank	545,649		10.2		426,523		8.0		439,061		9.6		364,984		8.0
Libertyville Bank	152,939		11.3		108,209		8.0		134,310		10.8		99,709		8.0
Barrington Bank	252,189		10.9		185,497		8.0		229,311		11.7		156,327		8.0
Crystal Lake Bank	102,404		11.1		74,033		8.0		91,273		10.8		67,731		8.0
Northbrook Bank	223,849		10.5		170,819		8.0		198,628		10.2		155,811		8.0
Schaumburg Bank	108,338		10.8		80,120		8.0		105,733		11.3		75,001		8.0
Village Bank	142,333		10.5		108,556		8.0		136,807		11.2		97,494		8.0
Beverly Bank	141,140		11.4		98,894		8.0		127,561		11.3		90,248		8.0
Town Bank	199,982		10.8		147,860		8.0		180,943		10.9		133,003		8.0
Wheaton Bank	159,718		10.8		117,883		8.0		135,009		10.2		105,769		8.0
State Bank of the Lakes	107,234		10.7		80,523		8.0		95,520		10.3		74,014		8.0
Old Plank Trail Bank	145,779		11.0		106,273		8.0		139,366		11.1		100,514		8.0
St. Charles Bank	111,454		11.0		81,069		8.0		102,251		11.0		74,066		8.0
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	402,156	11.9	%	$	220,235	6.5	%	$	347,924	11.0	%	$	206,167	6.5	%
Hinsdale Bank	244,036		11.3		143,002		6.5		214,061		11.0		126,831		6.5
Wintrust Bank	545,649		10.2		346,550		6.5		439,061		9.6		296,549		6.5
Libertyville Bank	152,939		11.3		87,920		6.5		134,310		10.8		81,014		6.5
Barrington Bank	252,189		10.9		150,716		6.5		229,311		11.7		127,016		6.5
Crystal Lake Bank	102,404		11.1		60,152		6.5		91,273		10.8		55,031		6.5
Northbrook Bank	223,849		10.5		138,791		6.5		198,628		10.2		126,597		6.5
Schaumburg Bank	108,338		10.8		65,098		6.5		105,733		11.3		60,939		6.5
Village Bank	142,333		10.5		88,201		6.5		136,807		11.2		79,214		6.5
Beverly Bank	141,140		11.4		80,352		6.5		127,561		11.3		73,327		6.5
Town Bank	199,982		10.8		120,136		6.5		180,943		10.9		108,065		6.5
Wheaton Bank	159,718		10.8		95,780		6.5		135,009		10.2		85,937		6.5
State Bank of the Lakes	107,234		10.7		65,425		6.5		95,520		10.3		60,137		6.5
Old Plank Trail Bank	145,779		11.0		86,347		6.5		139,366		11.1		81,667		6.5
St. Charles Bank	111,454		11.0		65,869		6.5		102,251		11.0		60,178		6.5




(Dollars in thousands)	December 31, 2018								December 31, 2017
	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	$	402,156	10.7	%	$	187,634	5.0	%	$	347,924	10.3	%	$	168,865	5.0	%
Hinsdale Bank	244,036		10.4		117,308		5.0		214,061		10.2		105,086		5.0
Wintrust Bank	545,649		9.7		281,090		5.0		439,061		9.2		237,782		5.0
Libertyville Bank	152,939		10.0		76,247		5.0		134,310		9.8		68,404		5.0
Barrington Bank	252,189		12.9		97,759		5.0		229,311		11.8		97,007		5.0
Crystal Lake Bank	102,404		9.9		51,974		5.0		91,273		9.5		48,069		5.0
Northbrook Bank	223,849		9.8		114,125		5.0		198,628		9.5		104,377		5.0
Schaumburg Bank	108,338		9.5		57,111		5.0		105,733		10.1		52,171		5.0
Village Bank	142,333		9.5		75,197		5.0		136,807		9.7		70,182		5.0
Beverly Bank	141,140		10.7		66,109		5.0		127,561		10.8		59,140		5.0
Town Bank	199,982		10.0		100,257		5.0		180,943		10.1		89,617		5.0
Wheaton Bank	159,718		9.8		81,767		5.0		135,009		9.4		72,152		5.0
State Bank of the Lakes	107,234		9.2		58,068		5.0		95,520		9.2		51,681		5.0
Old Plank Trail Bank	145,779		9.6		76,096		5.0		139,366		9.9		70,735		5.0
St. Charles Bank	111,454		9.8		56,915		5.0		102,251		9.8		51,907		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, 2018, these business units met their minimum net worth capital requirements.