Welcome to the Wintrust Financial Corporation's 2014 Second Quarter Earnings Conference Call. Following a review of the results by Edward Wehmer, Chief Executive Officer and President; and David Dykstra, Senior Executive Vice President and Chief Operating Officer, there will be a formal question-and-answer session. The company's forward-looking assumptions are detailed in the second quarter's earnings press release and in the company's most recent Form 10-K on file with the SEC. As a reminder this conference call is being recorded. I will now turn the conference call over to Mr. Edward Wehmer. Sir, you may begin.

Thank you. Good morning everybody and welcome to our second quarter earnings call. With me as always are David Dykstra, our Chief Operating Officer; Dave Stoehr, Chief Financial Officer and Lisa Pattis, our General Counsel. We will have the same protocol as we’ve had on all of our previous calls. I will give you some general comments on the quarter, Dave Dykstra will give you detail of the other income and other expense items. He will turn it back to me for summary and -- some summary comments and thoughts about the future and then we will as always have time for questions. All in all the second quarter was pretty clean and solid quarter, not a lot of noise in the numbers. The closet door is open, the lights are on, and not much hiding in there. You can see everything in these numbers. Good progress was made in all areas of our business evidencing that our slow and steady approach is working very well. For the quarter ended June 30th, we recorded net income of $38.5 million, and year-to-date income of $73 million, up 12% and 10% respectively, earnings per share was $0.76 for the quarter and a $1.44 for the year-to-date, up 10% and 7.5% respectively and ROA moved up to 84 basis points as we continued that climb to a slow and steady approach. The margins held steady. They're actually up one basis point to 3.62% versus the first quarter as we continued to maintain our very efficient balance sheet with loan to deposit ratios at the top of our desired range of 85% to 90%. Other income; in total other income was up $8.6 million versus quarter one. The main component of that was a $7.4 million increase in mortgage banking revenue versus a dismal…

Thanks, Ed. As normal I will briefly touch on the non-interest income and non-interest expense sections. As Ed mentioned all-in-all it was a pretty clean quarter but I'll go through the major categories. In the non-interest income section our wealth management revenue as Ed mentioned increased nicely to $18.2 million for the second quarter from $16.8 million in the prior quarter and improved by $2.3 million when compared to the year ago quarter total of $15.9 million. Brokerage revenue showed an increase of $8.3 million from $7.1 million in the prior quarter and our trust and asset management revenue showed a slight increase to $10 million from $9.7 million in the prior quarter. The increase in both categories has been attributed primarily to growth in assets under management due to new customer acquisition as-well-as market appreciation. On the mortgage banking side, mortgage banking revenue increased by 45% to $23.8 million in the second quarter from $16.4 million recorded in the prior quarter and was down from the $31.7 million recorded in the second quarter of last year. Now the company originated and sold $912 million in mortgage loans in the second quarter of 2014 compared to $527 million of mortgage loans originated in the prior quarter and $1.1 billion originated in the year ago quarter. Also the second quarter continued to show relatively strong mix of volume related to purchased home activity which represented approximately three-quarters of the second quarter volume which was slightly higher than the purchased volume in the prior quarter. The value of the company's mortgage servicing rights portfolio declined slightly to $8.2 million as of the end of the second quarter compared to $8.7 million in the prior quarter as the portfolio was valued at 89 basis points at June 30th versus 92 basis points at…

Thanks Dave. Some summary thoughts for you. It was an active quarter in a lot of ways not just the balance sheet growth and the like but we also raised a $140 million in sub debt during the quarter. That cash will be used for general corporate purposes, some of it was used over the weekend when we close down our acquisition of the National Bank branch in Milwaukee which added $90 million of loans and about $37 million of deposits to the balance sheet. Third quarter we’ll also be closing on the Talmer acquisition which again is in southern Wisconsin. That’s a deposit-only acquisition but we believe that the loans will follow as those customers would want their loans locally and not in Michigan. So we think that there’ll be some good loan growth out of that once we get that closed. The acquisition market remains very active. We’re talking to a lot of people but again the gestation period for these deals was a lot longer than it was a couple of years ago but it's -- you know the market is, is still very active. We like where we are positioned in that market as most of these banks are community-oriented banks and our cultures fit very well with us. You can be assured of our continued discipline in looking at these transactions. It’s not just on the bank side but we are seeing other transactions really in all areas of our business. So we are very active there but again we will maintain our disciplined approach. Right now these deals are working very well for us because when we get them they actually bring liquidity on to the balance sheet as many of the deals are deposit-only or have loans, loan-to-deposit ratios in the 50s and…

Thank you. (Operator Instructions). Our first question comes from the line of Jon Arfstrom from RBC Capital Markets. Your line is open.

Good morning.

Hello, Jon.

Question, I guess first question on mortgage, you obviously had a nice bounce back there and curious what your outlook is for mortgage? Maybe some of this was pulled through from Q1 and are you expecting a bit of a pullback or do you see volumes that can be consistent with what you saw in Q2?

You know for Q2 our projections look pretty good, it's hard to say, rates move, you can have -- you will have quarters where hopefully not as bad as the first quarter, but you will have quarters where it’s a little slower. And that’s just part of [being diversified] [ph]. But all I can do is project where we are looking at Q2 and that looks pretty good. We continue to look to expand in that area as the whole mortgage industry is contracting. We believe that this is an opportunity for us to get more end points and people always are going to need mortgages. And we were coming in pretty extraordinary times right now. So there will be a period of time where there is some volatility but I think once rates move up and things get back to normal it will be a little bit steadier then the roller coaster ride that we have had.

And you are still in expansionary mode in this business and you see opportunities to add more production in the business?

Yes.

Okay. And you were saying Q2, I am assuming you mean Q3, is that right?

Yes.

Yeah, okay.

Thank you.

Okay, good. And then in terms of the margins and you touched a little bit on funding but you don’t really expect that to be an issue in a couple of years. Just curious how you are feeling about margin sustainability and then maybe overall asset sensitivity of the company, is it still the beach ball scenario or is there anything different in your mind?

Well, you know in this rate environment if we can maintain the upper end of our desired range of loan to deposits we should be at the upper end of that margin range that we discussed, that we have laid out to you before. If you get down to 85% loan deposit you are probably 345-350 on the margin. So it’s very dependent on the amount of liquidity you have on your books not making any money. So we’re trying and have over the last few quarters been very efficient at how we fund ourselves and how we work that margin, and its effect on the margin. Going forward yeah, we are positively GAAP and I think the one thing that’s lost is the lag of -- some companies are funded a lot with institutional money and you don’t get the spread differential when rates go up. You’ve got savings accounts, and [null] [ph] accounts and the like. They don’t go point-for-point when rates go up. So you lag them a bit and then there is built-in caps on a lot of those. Certainly there will be a little bit of deposit shift when that occurs at the money markets, maybe back in the CDs. I mean our CDs are falling off the planet. We are not chasing them, we can always give them back but between the rate sensitivity and the way we’re funded and the spread relationship there we believe that nothing has changed in terms of where we would be at the end of -- if we have four point parallel shift in the yield curve where we would be at the end of the two -- over two years, where we’d be at the end of that two years. And that’s a margin in the 4.5%…

Okay, that makes sense. Thanks.

Thank you. Our next question comes from the line of Terry McEvoy with Sterne Agee. Your line is open. Terry McEvoy - Sterne Agee & Leach: Thanks, good morning.

Hi, Terry. Terry McEvoy - Sterne Agee & Leach: Hi. I just was look at the accretion to interest income jumped up about $1.5 million and the covered deals on the covered loans was the highest in five quarters here, almost to 10%. Could you just talk about the outlook for covered loans? And then as part of that question it looks like you have another $16 million from the FDIC indemnification asset that will come in to interest income. Talk about maybe what time frame you see that happening and any thoughts on some sort of earnings headwind when you lose that asset and particularly given the yield on that asset?

Well, we will talk about covered loans first. On the covered loans side that portfolio is running off very nicely and I think it's becoming less and less of a component of our earnings than it was earlier. Some of the loss share agreements will start running off next year and over the next three years after that. All our railroad tracks are lining up very nicely in that regard, indem assets actually goes against earnings as we accrete that down for the losses. But we review that and manage that very nicely. We think the railroad tracks will come together, that those yields will be consistent but are running on a portfolio that runs off. So you can take the -- as it relates to covered assets from a modeling standpoint if I were you I would just take the runoff that we've experienced and just keep that trend going at about the same yield and with our assurance that the railroad track and the indem asset are coming together and that should give you what you need. Does that make sense? Terry McEvoy - Sterne Agee & Leach: It does thanks.

And on the other side, we've done four deals that were not assisted deals and again there is number of those that are in the [inaudible] three pools and those are all performing better than anticipated also. So that's part of that accretion that does come in and again those yields should be consistent but they should be around maybe a little bit longer because those deals were done later, but those yields should also be consistent. And the third element is the AIG portfolio that's running off also; there basically we're not allowed prepayments in that portfolio in the second quarter. So there wasn't any sort of pickup in those yields. So I think you just have to look at it as a running off portfolio that's running off at yields consistent with what they are right now and is becoming a lesser and lesser part of what we're doing barring another acquisition that may come along where we add additional pools. Terry McEvoy - Sterne Agee & Leach: Just on the mortgage business, all your business I am guessing is conforming mortgages, any desire at all to move into different credit boxes to capture growth and increase market share?

Funny, you should ask that. Yeah, most -- all the mortgage number you have -- everything we do is so, we sell everything, all the conventional, all the conforming stuff we sell. And prior to 2004, '05, '06 when you basically could put any product out there and sell in the secondary market, we've a very vibrant portfolio of ARM lots, two-three, one-three and 5 year ARMS that were for non-conforming loans and they would -- we charged a little bit of a premium for that but they go out on the market and we would book those and usually within a year or two the condition that caused the non-qualified state of that loan would go away and then we place that loan in the secondary market. But from 2005 and until last, really the beginning of this year there has been no need for that. But we have re-embarked on that portfolio. There is a need for that sort of thing. We believe we can build a $400 million to $500 million over a two year period on the base that we have right now -- the base assets that we have right now and that will churn and finally we have an opportunity to do that. So it is an initiative that we're embarking on. I don't know the actual number that we have to-date. Mr. Stoehr do you know that, off hand? I think it's in $70 million to $80 million range somewhere around there but slow and steady will win that and we believe that we can build that up $400 million to $500 million and it fits nicely into our asset liability management situation also. Terry McEvoy - Sterne Agee & Leach: I appreciate it. Thanks.

Thank you. Our next question comes from the line of David Long with Raymond James. Your line is open.

Good morning guys.

Good morning.

A couple of things, the first one, looking at the C&I loan growth and the commercial loan growth in the quarter, almost 24% annualized. What was the driver there, was that more line usage or just adding clients?

Adding clients.

Line usage is still, hasn't really moved.

Okay, and as far as the yields that you're putting on versus the yields that are coming off there in the C&I, how does that compare?

Basically bottomed out, I mean I think we're -- Dave you want to comment on that.

Yes. For the total loan portfolio, I think we're still as we talked about before probably averaging out around 4%. Obviously C&I is one of the lower yielding classes, but the CRE portfolios a little higher and clearly the C&I premium finance portfolio is higher, but the overall blend is pretty close to the 4% that they are coming and the portfolios is just a little bit higher than that. So, it's a dilutive to the margin right now, but now terribly dilutive.

It's hard David, I mean while I say we’ve bottomed out, we have lost -- I mentioned about, we've lost a number of deals to some really irrational rates in our opinion, but our profitability model, you can't get bunched, you were right where we need to be there and if we get a lot lower, we're not going to do those deals. So the fact of the matter is, we’ve kind of bottomed out on that C&I business, you're not seeing a lot of ups and down, churns where we're losing stuff at higher rates or having to rebook them at lower rates, it's kind of -- it is what it is right now, does that make sense?

Yes. And then specifically to the premium finance business in April you closed an acquisition a couple of small acquisitions. Any impact -- did those have any impact on the growth that we saw in the quarter?

No.

No. They're very small.

Very small. Just to give you a little background, the first quarter, our -- we -- this year we processed 48,620 contracts at an average ticket size of 24,470. In the second quarter, we processed 50,880 at an average ticket size of 24,311. So no change in the ticket size again, just picking up market share in that business. So that business continues to grow and as we've often told you $27,000 is kind of always been the average in a normal market. So there is still some upside there that the market gets a little bit higher or harder for us in that portfolio, but that's just been slow and steady market share growth every year.

And what about the spreads in that business specifically?

They are holding in pretty steady. They've actually been relatively stable for the last couple of years now, so our pricing has been fairly rational in that business. It's actually probably ticked up a little bit since last year, but not anything dramatic, so pretty steady.

Okay, great. Thanks guys.

Thank you. Our next question comes from the line of Emlen Harmon with Jefferies. Your line is open. Emlen Briggs Harmon - Jefferies & Co.: Hi. Good morning guys.

Good morning, Harmon. Emlen Briggs Harmon - Jefferies & Co.: I was hoping you could talk a little bit about the trajectory for charge-offs from here. I think you guys have made very good progress over the course of the past year. I think you're at kind of what many would consider to be the lower end of normal levels for the industry. Do you feel like you can continue to push those lower kind of from the levels they're at in the second quarter here?

You know, they are what they are. So I hate saying, where we could push them lower because then guys try to manage that expectation. It is what it is, your first loss is your best loss, but historically we've always operated at a third to half of what peer group is, 25 basis points, I think in the low point we're eight or nine or 10 basis points. I still think we can bring that lower, but lot depends on the economy, but it'll have little blips in it here and there because they are still low right now, but I don't think it's anything to get excited about. I think if you rely on past history and rely on our underwriting standards and how we've gotten through previous cycles and the like, you can see that we're kind of back to where we were prior to the cycle and certainly will try to continue to push them lower, but it is what it is. But I would expect that we would still operate at a third to a half of our peer group in charge-offs. Emlen Briggs Harmon - Jefferies & Co.: Got it. Thanks. And then just kind of a follow on to that, as you noted in your prepared remarks, the coverage ratios on NPL continue to get better and you guys actually, you guys did match the charge-offs this quarter just based on loan growth. How do you think about what the provision is against that kind of incremental dollar loan growth and actually how do you differentiate between just kind of held for investment portfolio as a whole and the premium finance portfolio?

All right, probably the best way to look at that is we put a page in the press release that details out what our allowance is relative to each of the portfolios and I think if you look at that and sort of look at what the reserve ratios are probably be a good indicator of how we’ll provide for them going forward. So the premium finance portfolios on the life side are losses and virtually nothing knocking on wood. But some minor losses here and there but very close to zero and even if you go back with the AIG portfolio that we bought seven years before that losses were less than five basis points. So if that portfolio grows we would expect losses to continue to be low and you don’t have to provide much for it. And then on the premium finance commercial side it’s sort of the same way you can look in the press release and what we provide for those. So as we get growth in those, those are may be running plus or minus 25 basis points is where the reserve levels are. So we get good growth in that third of the niche portfolio and some of those other portfolios, like our community advantage, home owners association product and our franchise lending products they tend to be a little bit less than what you would see for the commercial and residential construction on land and the like and so if the portfolio grows with those, the niche portfolios it’s going to be a lower reserve. So I think it’s going to depend on the mix of where we get it, C&I and commercial real estate are obviously higher than the other third of the portfolio but before the crisis we’re running basically where our reserve back loans are right now and if we keep the mix the same I would expect it to stay relatively consistent with those levels.

And another way to look at it is barring some blow up in one of these categories, you know you will about grow about 1% on the core portfolio and about 20 basis points on the niche portfolio, barring any sort of trend that maxes out but that’s kind of a good way to look at it I think. Emlen Briggs Harmon - Jefferies & Co.: Got it, thanks, that’s helpful, appreciate it guys.

Thank you. Our next question comes from the line of Chris McGratty with KBW. Your line is open. Christopher McGratty - Keefe, Bruyette & Woods Inc.: Hey good morning guys.

Good morning. Christopher McGratty - Keefe, Bruyette & Woods Inc.: Ed, on the mortgage business I want to make sure I'm hearing your guidance or your outlook the right way. I'm thinking about the revenue $24 million in the quarter, obviously up considerably from last quarter, are you assuming that volumes in Q3 are consistent with kind of the 900 plus that occurred the second quarter and kind of consistent margins?

That’s what our projections show right now, yes. Christopher McGratty - Keefe, Bruyette & Woods Inc.: Okay and how much of the improvement in the quarter was legacy Wintrust versus the investment you made late last year?

The surety was about a quarter of what our buying has always been. It probably is relatively the same percentages. Christopher McGratty - Keefe, Bruyette & Woods Inc.: Okay and in terms of loan growth you have seen the headlines about regulators in [leveraged lending] can you just remind us what the size of this check book is for you guys and then maybe how much of the growth if there was any was in the second quarter?

I'm sorry you broke up there. I didn’t understand the question. Christopher McGratty - Keefe, Bruyette & Woods Inc.: The shared national credit portfolio at the bank, how large is it? I know the regulators are pushing on this as an industry this year.

We only have a -- we don’t go out and do SNC as a normal course of the business, if there happens to be a larger credit that’s got a [Chicago and Nexus] that we have a relationship, if we do them. But we’ve really got a handful of credits and it’s nothing that is the normal course of business for us. So SNC is not a product line that we really pursue unless we happen to have a customer that falls in to that category and we generally like to be the lead on them and probably very few, very few where we would be -- into our credit where we’re not the lead and that’s the SNC and there’s a couple but they have a Chicago and Nexus to them and a company that we need a relationship with.

If the total SNC portfolio was about a $150 million I'd be very surprised. I think it is probably closer to $80 million to $100 million but we…

And they are all local main companies around here where we have ancillary business with them also. So it's we don't play the -- we don't like being the beast of burden, just jumping in a deal, SNC deal just to get outstanding. There has to be some sort of relationship there that we can garner extra income from. Christopher McGratty - Keefe, Bruyette & Woods Inc.: Just one last on the Talmer opportunity which the loan that may or may not come, can you help size up what the potential opportunity might be over the next six months to 12 months?

I am sort of hesitant to do that right now since the deal hasn't been closed and we haven't had that discussion publicly with Talmer right now and they are a public company and we're a public company. So I'd rather not discuss that until we close the deal. Christopher McGratty - Keefe, Bruyette & Woods Inc.: Fair enough. Thanks.

(Operator Instructions). Our next question comes from the line of Stephen Geyen with D.A. Davidson. Your line is open.

Just, I guess most of my questions have been answered but just Ed if you could just give your overall thoughts on the economy, it seems like maybe a quarter doesn't go by where there is some economic data that gives the people a pause about what the -- where the economy may go? What are you hearing from customers?

Customers feel very good about -- all our customers feel that they have all survived the cycle. Many of them have been able to add lines very inexpensively as they have picked over the bones of the competitors that haven't been able to -- that weren’t able get through it. Our customers are feeling very good about where they are right now. Even the construction industry is picking up. It's funny I am hearing a lot of they can't -- nobody can get good labor which is really kind of an interesting situation. The employment rate that even the construction guys say a lot of the guys left the industry and we can't get qualified people back. So you kind of feel that you are right on the edge, that manufacturing is good, guys were running extra shifts around here and our customer are and so people are feeling very good but still measured. They are still maintaining fortress balance sheets. The private equity side we're seeing a lot of deals with big multiples on them. I think a lot of the established PE guys are selling everything that isn't nailed down right now and it's one of the scary parts from the banking side is that you are seeing seven year and 10 year air balls being financed. We don't do that but you are seeing deals go out into financing, it's like they are getting five and six offers again from different banks. So yeah that's a little scary that that's going on. But all-in-all the biggest issue in our market obviously, at least in the Illinois market is what's going on with the state and the like. And that still scares people, it scares us a little bit that many of the people we talk, they are…

Okay. Thank you.

I'm showing no further questions at this time. I would like to turn the call back to Edward Wehmer for further remarks.

Great and thanks everybody. We will talk to you at the end of the third quarter. Everybody have a wonderful summer. Always call Dave or me or Dave Stoehr, if you have any questions. So thanks very much for listening and thanks for being shareholders.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a wonderful day.