Regulatory Matters

12 Months Ended

Dec. 31, 2022

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 2022, 2021 and 2020, cash dividends totaling $52.0 million, $145.0 million and $253.0 million, respectively, were paid to Wintrust by the banks and other subsidiaries. As of December 31, 2022, the banks had approximately $703.8 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. In March 2020, the FRB adopted a rule to amend its reserve regulation which included lowering the reserve requirement to zero percent. As a result, at December 31, 2022, 2021, and 2020 there were no reserve balances 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 average 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, 2022 and 2021:

	2022		2021
Total capital to risk weighted assets	11.9	%	11.6	%
Tier 1 capital to risk weighted assets	10.0		9.6
Common Equity Tier 1 capital to risk weighted assets	9.1		8.6
Tier 1 Leverage Ratio	8.8		8.0

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, 2022, 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, 2022 and 2021 are presented in the following table:

	December 31, 2022								December 31, 2021
	Actual				To Be Well Capitalized by Regulatory Definition				Actual				To Be Well Capitalized by Regulatory Definition
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets):
Lake Forest Bank	$	725,384	11.4	%	$	638,871	10.0	%	$	614,942	11.1	%	$	552,325	10.0	%
Hinsdale Bank	441,317		11.7		378,007		10.0		370,363		11.3		327,716		10.0
Wintrust Bank	1,084,435		12.0		907,101		10.0		905,629		11.2		810,711		10.0
Libertyville Bank	242,482		12.0		201,695		10.0		203,893		11.4		179,719		10.0
Barrington Bank	387,113		11.5		337,499		10.0		362,019		11.6		313,373		10.0
Crystal Lake Bank	154,891		11.4		136,419		10.0		139,059		11.4		121,722		10.0
Northbrook Bank	409,571		11.3		362,342		10.0		338,912		11.2		303,915		10.0
Schaumburg Bank	169,428		11.3		149,425		10.0		148,108		11.0		134,208		10.0
Village Bank	256,537		11.3		226,399		10.0		219,017		11.0		198,923		10.0
Beverly Bank	223,808		11.5		195,237		10.0		189,349		11.4		166,645		10.0
Town Bank	314,351		11.3		278,704		10.0		273,185		11.3		241,598		10.0
Wheaton Bank	285,606		11.6		247,015		10.0		245,045		11.4		215,507		10.0
State Bank of the Lakes	167,023		11.3		147,369		10.0		145,438		11.3		129,304		10.0
Old Plank Trail Bank	211,437		11.5		183,269		10.0		190,402		11.5		165,493		10.0
St. Charles Bank	211,132		11.3		186,623		10.0		183,726		11.4		161,563		10.0
Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	689,320	10.8	%	$	511,097	8.0	%	$	586,701	10.6	%	$	441,860	8.0	%
Hinsdale Bank	416,762		11.0		302,406		8.0		352,916		10.8		262,173		8.0
Wintrust Bank	1,004,271		11.1		725,681		8.0		844,613		10.4		648,569		8.0
Libertyville Bank	225,766		11.2		161,356		8.0		191,716		10.7		143,775		8.0
Barrington Bank	373,830		11.1		269,999		8.0		353,629		11.3		250,698		8.0
Crystal Lake Bank	145,514		10.7		109,135		8.0		131,730		10.8		97,378		8.0
Northbrook Bank	383,691		10.6		289,874		8.0		320,243		10.5		243,132		8.0
Schaumburg Bank	160,061		10.7		119,540		8.0		141,228		10.5		107,367		8.0
Village Bank	238,246		10.5		181,120		8.0		206,828		10.4		159,138		8.0
Beverly Bank	206,714		10.6		156,189		8.0		179,487		10.8		133,316		8.0
Town Bank	297,499		10.7		222,963		8.0		262,859		10.9		193,278		8.0
Wheaton Bank	269,366		10.9		197,612		8.0		234,218		10.9		172,405		8.0
State Bank of the Lakes	159,399		10.8		117,895		8.0		138,266		10.7		103,443		8.0
Old Plank Trail Bank	201,864		11.0		146,615		8.0		177,956		10.8		132,394		8.0
St. Charles Bank	200,910		10.8		149,299		8.0		174,516		10.8		129,250		8.0
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Lake Forest Bank	$	689,320	10.8	%	$	415,266	6.5	%	$	586,701	10.6	%	$	359,011	6.5	%
Hinsdale Bank	416,762		11.0		245,705		6.5		352,916		10.8		213,015		6.5
Wintrust Bank	1,004,271		11.1		589,616		6.5		844,613		10.4		526,962		6.5
Libertyville Bank	225,766		11.2		131,102		6.5		191,716		10.7		116,817		6.5
Barrington Bank	373,830		11.1		219,374		6.5		353,629		11.3		203,692		6.5
Crystal Lake Bank	145,514		10.7		88,673		6.5		131,730		10.8		79,119		6.5
Northbrook Bank	383,691		10.6		235,522		6.5		320,243		10.5		197,545		6.5
Schaumburg Bank	160,061		10.7		97,126		6.5		141,228		10.5		87,235		6.5
Village Bank	238,246		10.5		147,160		6.5		206,828		10.4		129,300		6.5
Beverly Bank	206,714		10.6		126,904		6.5		179,487		10.8		108,319		6.5
Town Bank	297,499		10.7		181,157		6.5		262,859		10.9		157,039		6.5
Wheaton Bank	269,366		10.9		160,559		6.5		234,218		10.9		140,079		6.5
State Bank of the Lakes	159,399		10.8		95,790		6.5		138,266		10.7		84,048		6.5
Old Plank Trail Bank	201,864		11.0		119,125		6.5		177,956		10.8		107,571		6.5
St. Charles Bank	200,910		10.8		121,305		6.5		174,516		10.8		105,016		6.5

	December 31, 2022								December 31, 2021
	Actual				To Be Well Capitalized by Regulatory Definition				Actual				To Be Well Capitalized by Regulatory Definition
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Leverage Ratio:
Lake Forest Bank	$	689,320	8.8	%	$	391,452	5.0	%	$	586,701	8.3	%	$	353,846	5.0	%
Hinsdale Bank	416,762		9.5		220,373		5.0		352,916		8.8		200,228		5.0
Wintrust Bank	1,004,271		10.7		469,415		5.0		844,613		9.2		461,082		5.0
Libertyville Bank	225,766		9.3		121,475		5.0		191,716		8.5		112,448		5.0
Barrington Bank	373,830		10.3		181,212		5.0		353,629		10.9		162,392		5.0
Crystal Lake Bank	145,514		9.5		76,780		5.0		131,730		9.7		67,711		5.0
Northbrook Bank	383,691		9.1		211,521		5.0		320,243		8.5		188,424		5.0
Schaumburg Bank	160,061		9.3		86,409		5.0		141,228		9.0		78,938		5.0
Village Bank	238,246		9.7		123,484		5.0		206,828		9.2		111,885		5.0
Beverly Bank	206,714		10.0		103,759		5.0		179,487		9.9		90,265		5.0
Town Bank	297,499		8.4		176,660		5.0		262,859		7.9		166,487		5.0
Wheaton Bank	269,366		9.0		148,942		5.0		234,218		8.1		144,949		5.0
State Bank of the Lakes	159,399		9.1		88,065		5.0		138,266		8.5		81,475		5.0
Old Plank Trail Bank	201,864		8.7		115,692		5.0		177,956		8.2		108,332		5.0
St. Charles Bank	200,910		9.6		104,431		5.0		174,516		9.1		95,638		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, 2022, these business units met their minimum net worth capital requirements.