Regulatory Matters

12 Months Ended

Dec. 31, 2019

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Regulatory Matters

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 2019, 2018 and 2017, cash dividends totaling $139.0 million, $111.0 million and $122.0 million, respectively, were paid to Wintrust by the banks and other subsidiaries. As of December 31, 2019, before considering the impact of ASU No. 2016-13 and all subsequent updates issued to clarify and improve specific areas of this ASU, the banks had approximately $542.0 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, 2019 and 2018, reserve balances of approximately $750.0 million and $611.1 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, 2019 and 2018:

	2019		2018
Total capital to risk weighted assets	12.2	%	11.6	%
Tier 1 capital to risk weighted assets	9.6		9.7
Common Equity Tier 1 capital to risk weighted assets	9.2		9.3
Tier 1 leverage Ratio	8.7		9.1

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, 2019, 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, 2019 and 2018 are presented in the following table:

(Dollars in thousands)	December 31, 2019								December 31, 2018
	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	$	461,643	12.0	%	$	386,358	10.0	%	$	424,872	12.5	%	$	338,823	10.0	%
Hinsdale Bank	339,158		12.6		268,915		10.0		256,166		11.9		220,004		10.0
Wintrust Bank	709,328		11.8		602,969		10.0		613,037		11.5		533,154		10.0
Libertyville Bank	173,298		11.7		148,745		10.0		161,453		11.9		135,262		10.0
Barrington Bank	320,347		12.1		263,235		10.0		258,301		11.1		231,871		10.0
Crystal Lake Bank	124,373		12.1		102,488		10.0		107,041		11.6		92,542		10.0
Northbrook Bank	273,571		12.5		213,524		10.0		236,201		11.1		213,524		10.0
Schaumburg Bank	123,145		12.0		102,250		10.0		113,797		11.4		100,151		10.0
Village Bank	171,084		11.4		149,803		10.0		151,653		11.2		135,695		10.0
Beverly Bank	170,716		11.5		148,838		10.0		146,054		11.8		123,618		10.0
Town Bank	226,252		11.5		197,639		10.0		208,479		11.3		184,825		10.0
Wheaton Bank	187,518		11.4		165,019		10.0		165,798		11.3		147,354		10.0
State Bank of the Lakes	127,003		11.5		110,369		10.0		111,530		11.1		100,654		10.0
Old Plank Trail Bank	161,899		11.6		139,529		10.0		151,889		11.4		132,842		10.0
St. Charles Bank	156,023		11.7		133,119		10.0		115,607		11.4		101,337		10.0
Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	440,585	11.4	%	$	309,087	8.0	%	$	402,156	11.9	%	$	271,058	8.0	%
Hinsdale Bank	328,046		12.2		215,132		8.0		244,036		11.3		176,003		8.0
Wintrust Bank	668,922		11.1		482,375		8.0		545,649		10.2		426,523		8.0
Libertyville Bank	164,915		11.1		118,996		8.0		152,939		11.3		108,209		8.0
Barrington Bank	313,195		11.9		210,588		8.0		252,189		10.9		185,497		8.0
Crystal Lake Bank	119,374		11.7		81,991		8.0		102,404		11.1		74,033		8.0
Northbrook Bank	260,577		11.9		170,819		8.0		223,849		10.5		170,819		8.0
Schaumburg Bank	118,260		11.6		81,800		8.0		108,338		10.8		80,120		8.0
Village Bank	161,666		10.8		119,842		8.0		142,333		10.5		108,556		8.0
Beverly Bank	164,827		11.1		119,071		8.0		141,140		11.4		98,894		8.0
Town Bank	217,958		11.0		158,111		8.0		199,982		10.8		147,860		8.0
Wheaton Bank	181,195		11.0		132,015		8.0		159,718		10.8		117,883		8.0
State Bank of the Lakes	119,740		10.9		88,295		8.0		107,234		10.7		80,523		8.0
Old Plank Trail Bank	155,975		11.2		111,623		8.0		145,779		11.0		106,273		8.0
St. Charles Bank	151,665		11.4		106,495		8.0		111,454		11.0		81,069		8.0
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	440,585	11.4	%	$	251,133	6.5	%	$	402,156	11.9	%	$	220,235	6.5	%
Hinsdale Bank	328,046		12.2		174,795		6.5		244,036		11.3		143,002		6.5
Wintrust Bank	668,922		11.1		391,930		6.5		545,649		10.2		346,550		6.5
Libertyville Bank	164,915		11.1		96,684		6.5		152,939		11.3		87,920		6.5
Barrington Bank	313,195		11.9		171,102		6.5		252,189		10.9		150,716		6.5
Crystal Lake Bank	119,374		11.7		66,617		6.5		102,404		11.1		60,152		6.5
Northbrook Bank	260,577		11.9		138,791		6.5		223,849		10.5		138,791		6.5
Schaumburg Bank	118,260		11.6		66,463		6.5		108,338		10.8		65,098		6.5
Village Bank	161,666		10.8		97,372		6.5		142,333		10.5		88,201		6.5
Beverly Bank	164,827		11.1		96,745		6.5		141,140		11.4		80,352		6.5
Town Bank	217,958		11.0		128,465		6.5		199,982		10.8		120,136		6.5
Wheaton Bank	181,195		11.0		107,262		6.5		159,718		10.8		95,780		6.5
State Bank of the Lakes	119,740		10.9		71,740		6.5		107,234		10.7		65,425		6.5
Old Plank Trail Bank	155,975		11.2		90,694		6.5		145,779		11.0		86,347		6.5
St. Charles Bank	151,665		11.4		86,528		6.5		111,454		11.0		65,869		6.5

(Dollars in thousands)	December 31, 2019								December 31, 2018
	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	$	440,585	10.7	%	$	223,497	5.0	%	$	402,156	10.7	%	$	187,634	5.0	%
Hinsdale Bank	328,046		10.4		147,512		5.0		244,036		10.4		117,308		5.0
Wintrust Bank	668,922		9.7		324,017		5.0		545,649		9.7		281,090		5.0
Libertyville Bank	164,915		10.0		82,848		5.0		152,939		10.0		76,247		5.0
Barrington Bank	313,195		12.9		115,309		5.0		252,189		12.9		97,759		5.0
Crystal Lake Bank	119,374		9.9		58,613		5.0		102,404		9.9		51,974		5.0
Northbrook Bank	260,577		9.8		132,394		5.0		223,849		9.8		114,125		5.0
Schaumburg Bank	118,260		9.5		60,266		5.0		108,338		9.5		57,111		5.0
Village Bank	161,666		9.5		89,945		5.0		142,333		9.5		75,197		5.0
Beverly Bank	164,827		10.7		79,777		5.0		141,140		10.7		66,109		5.0
Town Bank	217,958		10.0		116,750		5.0		199,982		10.0		100,257		5.0
Wheaton Bank	181,195		9.8		98,039		5.0		159,718		9.8		81,767		5.0
State Bank of the Lakes	119,740		9.2		63,078		5.0		107,234		9.2		58,068		5.0
Old Plank Trail Bank	155,975		9.6		80,708		5.0		145,779		9.6		76,096		5.0
St. Charles Bank	151,665		9.8		74,348		5.0		111,454		9.8		56,915		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, 2019, these business units met their minimum net worth capital requirements.