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Fitch Affirms Wintrust Financial at 'BBB/F2' Following Mid-Tier Regional Peer Review; Outlook Stable

  Fitch Affirms Wintrust Financial at 'BBB/F2' Following Mid-Tier Regional
  Peer Review; Outlook Stable

Business Wire

NEW YORK -- February 5, 2014

Fitch Ratings affirms Wintrust Financial Corp.'s (WTFC) ratings at 'BBB'/'F2'.
The Rating Outlook remains Stable. A full list of rating actions is provided
at the end of this rating action commentary.

KEY RATING DRIVERS - IDRS, VRs, AND SENIOR DEBT

WTFC's ratings were affirmed at 'BBB' reflecting its consistent and
conservative management through the credit cycle leading to superior asset
quality performance relative to similarly rated and similarly sized
institutions. Further, Fitch believes WTFC's loan portfolio structure provides
the company unique credit diversification relative to peers, especially when
considering the loss history of its premium finance loan portfolio.

Fitch recognizes WTFC's relatively strong asset quality compared to similarly
rated peers and believes it is a reflection of management's credit risk
management philosophy. Nonperforming assets (NPAs) have remained somewhat
elevated relative to historical norms at 1.72% as of the fourth quarter of
2013 (4Q'13) but have dropped 61 basis points (bps) year-over-year and compare
favourably to similarly rated peers. Fitch also views the company's premium
finance loan book as generally positive given its relative size to the overall
loan portfolio and the low credit losses generated out of it.

Fitch believes that WTFC is constrained at its current rating given the
company's fairly tepid earnings performance relative to higher rated peers.
The company's year-to-date (YTD) 2013 return on assets (ROA) of 79 bps is
lower than similarly rated institutions but is also taken in the context of
WTFC's overall risk profile. Fitch believes that going forward earnings will
continue to be challenged by the expected prolonged period of low interest
rates coupled with the company's short-term balance sheet. At year-end 2012,
70% of WTFC's loans were either variable or repriced within 12 months.
However, Fitch expects this to be advantageous when interest rates do begin to
rise.

RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT

Negative trends in earnings or a reversal in current AQ trends leading to
earnings and capital deterioration could lead to negative rating action.
Further, if the company growth (either through acquisition or organic) were to
exceed Fitch's comfort level and capital levels fell materially below their
current levels, ratings could be adversely impacted. While Fitch sees little
upside to the company's rating in the near term, if earnings performance
improves and comes in line with higher rated peers while AQ trends maintain
their positive course and risk management practices remain conservative, Fitch
could take positive rating action.

KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Subordinated debt and other hybrid capital issued by WTFC, and its
subsidiaries are all notched down from WTFC's Viability Rating (VR) of 'bbb'
in accordance with Fitch's assessment of each instrument's respective
non-performance and relative Loss Severity risk profiles, which vary
considerably.

RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

WTFC's subordinated debt and other hybrid capital ratings are sensitive to
changes in WTFC's VR. Rating sensitivities for the VR are listed above.

SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS

The below ratings factor in a high probability of support from the parent to
its subsidiary. This reflects the fact that performing parent banks have very
rarely allowed subsidiaries to default. It also considers the high level of
integration, brand, management, financial and reputational incentives to avoid
subsidiary defaults.

SUBSIDIARY AND AFFILIATED COMPANY RATING SENSITIVITIES

All 15 subsidiary banks' ratings are linked together and equalized due to
cross-collateralization conditions found in Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (FIRREA). Consequently, any movement in
the parent's VR would equally impact all related subsidiary banks. Rating
sensitivities for the VR are listed above.

KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR

WTFC's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's
view that the company is unlikely to procure extraordinary support should such
support be needed.

KEY RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR

WTFC's Support Rating and Support Rating Floor are sensitive to Fitch's
assumption around capacity to procure extraordinary support in case of need.

Fitch Ratings reviewed WTFC's ratings as part of the mid-tier regional bank
review. The 19 banks in today's review include: Associated Banc-Corp (ASBC),
BOK Financial Corp (BOKF), Cathay General Bancorp (CATY), City National
Bancorp (CYN), Cullen/Frost Bankers, Inc. (CFR), East West Bancorp, Inc.
(EWBC), First Horizon National Corp. (FHN), First National of Nebraska, Inc.
(FNNI), First Niagara Financial Group, Inc. (FNFG), First Republic Bank (FRC),
First Merit (FMER), Fulton Financial Corp. (FULT), Hancock Holding Company
(HBHC), People's United Financial, Inc. (PBCT), Synovus Financial Corp. (SNV),
TCF Financial Corp (TCB), UMB Financial Corporation (UMB), Webster Financial
Corp. (WBS), Wintrust (WTFC).

Fitch has affirmed the following ratings with a Stable Outlook:

Wintrust Financial Corporation

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Subordinated Debt at 'BBB-';

Preferred Stock at 'B+';

Support at '5';

Support Rating Floor at 'NF'.

Lake Forest Bank and Trust Company

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating at 'NF'.

Hinsdale Bank and Trust Company

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

North Shore Community Bank and Trust Company

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Libertyville Bank and Trust Company

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Barrington Bank and Trust Company, NA

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Crystal Lake Bank and Trust Company, NA

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Northbrook Bank and Trust Company

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Schaumburg Bank and Trust Company, NA

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Village Bank and Trust

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Beverly Bank and Trust Company, NA

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Town Bank

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Wheaton Bank and Trust

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

State Bank of the Lakes

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Old Plank Trail Community Bank, NA

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

St. Charles Bank and Trust Company

Long-Term IDR at 'BBB';

Short-Term IDR at 'F2';

Viability Rating at 'bbb';

Long-Term Deposits at 'BBB+';

Short-Term Deposits at 'F2';

Support at '5';

Support Rating Floor at 'NF'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--2014 Outlook: U.S. Banks (Nov. 21, 2013);

--U.S. Banks: Liquidity and Deposit Funding (Aug. 08, 2013);

--U.S. Banks: Interest Rate Risks (What Happens When Rates Rise) (June 18,
2013)

--U.S. Bank Mergers and Acquisitions -- When Will The Catalysts Kick In? (July
11, 2013);

--Global Trading and Universal Banks - Periodic Review (Dec. 12, 2013);

--Fitch Fundamentals Index - U.S.; Index Trend Analysis 4Q13 (Jan. 15, 2014);

--Risk Radar Global - Q313 (Sept 05, 2013);

--Fitch Global Corporate Rating Activity - Third Quarter 2013 (Dec. 5, 2013);

--U.S. Banking Quarterly Comment: 4Q13 (Earnings Continue to Tick Up, but
Challenges Remain) (Jan. 27, 2014);

--Global Financial Institutions Rating Criteria (Jan. 31, 2014;)

--Assessing and Rating Bank Subordinated and Hybrid Securities (Jan. 31,
2014).

Applicable Criteria and Related Research:

2014 Outlook: U.S. Banks

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=723989

U.S. Banks: Liquidity and Deposit Funding

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=714196

U.S. Banks: Interest Rate Risks (What Happens When Rates Rise)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710875

U.S. Bank Mergers and Acquisitions -- When Will The Catalysts Kick In?

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=712539

Global Trading and Universal Banks - Periodic Review

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726150

Fitch Fundamentals Index

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=729196

Risk Radar Global - Q313

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=717023

Fitch Global Corporate Rating Activity ¬タヤThird-Quarter 2013

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720480

U.S. Banking Quarterly Comment: 4Q13 (Earnings Continue to Tick Up, but
Challenges Remain)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732295

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Assessing and Rating Bank Subordinated and Hybrid Securities Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732137

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=819705

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Contact:

Fitch Ratings
Primary Analyst
Bain Rumohr, CFA
Associate Director
+1-312-368-3153
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Julie Solar
Senior Director
+1-312-368-5472
or
Committee Chairperson
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Managing Director
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or
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brian.bertsch@fitchratings.com
 
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