Edward J. Wehmer - President and Chief Executive Officer David A. Dykstra - Chief Operating Officer, Senior Executive Vice President David L. Stoehr - Chief Financial Officer, Executive Vice President

Jon Arfstrom - RBC Capital Markets John Pancari - J.P. Morgan Brad Milsaps - Sandler O'Neill & Partners L.P. [Carl Busca - D&R] Kenneth James - Robert W. Baird & Co. Ben Crabtree - Stifel Nicolaus & Company Peyton Green - Ftn Midwest Securities Corp.

Welcome to the Wintrust Financial Corporations Second Quarter Earnings Conference Call. (Operator Instructions) 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 following forward-looking assumptions are detailed in the second quarter’s earnings press release and in the company’s Form 10-K report on file with the SEC. I will now turn the conference over to Mr. Edward Wehmer.

With me, as usual, are Dave Dykstra, Senior VP and Chief Operating Officer and Dave Stoehr our Chief Financial Officer. As is our custom, I’ll begin with some general remarks about the quarter and Dave Dykstra will follow with a more detailed comparative analysis of the operating numbers. For the second quarter in a row we experienced strong yet measured balance sheet growth; both core loans and core deposits growth were again good. Pipelines remains strong and we are disciplined on the type of business we will take and the pricing we will accept. I will note here that our growth strategy has really been pushed out to our younger banks. I think you may all recall, if you are familiar with us, back in 2005 where we put the breaks on growth and tried to position ourselves for this storm that we’re in right now, we had a number of under utilized, very young, branches and banks and when we put the breaks on that, because we have been growing, we’ve been growing in those smaller entities while maintaining share in the larger entities. This is a very effective way for us to grow in that number one there is no cannibalization in the growth; number two we’re picking up full deposit relationships; and number three the growth basically comes with no overhead as the overhead is already embedded in the branches that we have. During the quarter we experienced net interest margin compression. This is a direct result of the precipitous drop in rates orchestrated by the Fed in the first quarter. We expect the margin to recover through the remainder of 2008. This decline was more than effectively offset by our covered call-hedging program. This is a strategy that we have employed since our very early days; we’ve been doing for almost 16, 17 years and have done that previously in prior lives. Many of you have struggled with the strategy and how to model it and how to categorize it, is this core income or is it non-core income. To assist you in showing the effectiveness of this hedging strategy over time, we added a page to our press release this time it is page 34. The analysis takes our call option premium and it puts it in the margin as if it were where we actually look at it internally and it puts the call option premium up in the margins. We’ve showed the analysis for five years and for the past five calendar quarters. I think that if you look at that you’ll see that this is a very effective and core hedge for us in terms of stabilizing the net interest margin in falling rate environments. Hopefully in the future this will allow all of you to do a bit of modeling and understand how this hedge actually works. We are available during the call or even after the call to take you through this, but I think you see maybe a 10 or 12 basis point swing in the margin over the periods that are included on the reported result of this very, very effective hedge. Not with standing these previous comments, the margin was also affected for this quarter by our desire to make our balance sheet a little bit more rate sensitive. We have been very proactive about flipping fixed rate loans into floating rate loans to get ourselves to a positively GAAP position. We believe that the probability of rates going up as opposed to going down over the long term is probably more probable and I know this hurts us a little bit in the short run, but over the long run rates do increase we’ll get the double whammy of rate decompression as well as a balance sheet that moves accordingly and this should serve us well over time. With the events transpiring in the banking market, liquidity has become a topic that has become front and center. Wintrust banks have extremely core retail and commercial deposit basis. Because of the high network markets that we serve, we probably have more of a large balance accounts than other banks of our size. A couple of Screen-Scraper reports that came out in the last few weeks have suggested that this fact might make us more vulnerable than others in terms of liquidity issues. We think it’s quite the contrary, our relationship are extremely strong, two, three, four accounts per household, but it also is augmented by the fact that we can use our 15 charters and have done so, to create a product called our max safe account and through that max safe account to a single investor we can offer $1.5 million of FID insurance in house single stock with banks that they know. We do this by seamlessly spreading the deposits over our 15 banks and our max safe CD and soon to be max safe money market account. In fact if you look at this and you use the titling gain joint account holders can actually get almost $16 million in coverage by coming into just one of our banks. That being said all of our banks and the holding company remain well capitalized and we have not, nor do we anticipate any liquidity related events. Finally our credit quality non-performers remained relatively stable for the quarter. Other than the $35 million related to the three large Hinsbrook related deals we had very good velocity in clearing up problem credits, but that doesn’t mean in this environment there is not more washing up on shore and we do have good velocity in pushing these things out of the system. Our plan for that $35 million of those three larger non-performings and we’re working on that right now. We have interviewed a couple of very well known joint venture partners. We believe that there is money to be made in these things over time and we intend to look at all of our options for exit, but also we’re not going to just give money away to push them off the balance sheet. Our joint venture partners have come up with a number of very good ideas that we can work through these things and we’re very confident that we can actually come out of these and make some money. Again, we will look at all aspects in terms of cleaning them up though. Charge-offs a little higher than our normal range by 6 basis points, but I think it’s fair to say that this current economic environment is a little bit deeper than any of us ever anticipated, so still at 36 basis points I think is still pretty good. Again, we increased the level of the reserve; the reserves were supported by our continuous and detailed analysis of our credit portfolio. Maybe one more thing that I’d like to mention, we didn’t put in the press release, but we are a little over $200 million in indirect auto, an indirect auto portfolio that we have generated here from local bankers. We have done it for 14 years. We have decided strategically just to exit that market. Our two senior buyers were retiring. The portfolio is acting fine, its delinquencies are still around 1%, but we felt the $200 million rather than restarting that organization we can put that money to better use. That portfolio will run off over time and quite frankly is more profitable as it runs off, as we are able to eliminate a lot of the overhead related to putting new loans on the books. So, that’s just an aside I’d like to get off to you. In summary, we think we’re in the middle year of this three-year cycle such as this is the drags right now. This is the most challenging year for us and for the industry. It’s a period of substantial risks, yet of substantial opportunity for banks that are disciplined and position themselves appropriately. Although no one is bigger than the market, we remain cautiously optimistic about our prospects here. I’ll tell you that there’s a great line from Apollo 13 where the guy says “I feel like I’m driving a toaster through a car wash” and that’s what it is right now to maneuver the bank through this period of time. Again we are working on a balanced approach of growth, yet being very conservative and trying to take advantage of opportunities that are presenting themselves in a really measured and disciplined way. This is what we anticipated to occur, but it’s not in 2005 when we pulled back, but quite frankly this is a little bit deeper than I think any of us thought it would be, but we remain cautiously optimistic. Now I’m going to turn it over to Dave to go through some of the numbers.

: Well management income remained relatively stable in the first quarter, really no significant changes either in our brokerage or asset management revenues from the prior quarter, pretty much in our normal range. Mortgage banking revenue posted strong results; we were up about $1.4 million over the first quarter of this year. Approximately $162,000 of that amount related to positive evaluation adjustments on our mortgage servicing rights. Service charges on deposit accounts continued to grow, were up 8% over the first quarter of 2008 or 32% on an annualized basis. The tri-com [ph] administrative services revenue grew slightly in the first quarter and this is an area where pricing is still very competitive in the marketplace and we’re looking at increasing sales there, but as we do increase sales the margin compression is having some offsetting effects there so it’s still a business that has significant growth potential, but the margin compressions in that business as well as on the interest side for that business. Premium finance loan sales, we had gains on the sale of premium advance receivables so $566,000 in the second quarter as a result of $69 million worth of our premium finance loans that we sold. In previous quarters we talked about securitizing a portion of that portfolio and we do believe that market is open. We know a number of parties that are willing to offer us a securitization facility or a conduit facility, but we’re on hold at pursing that path right now, pending the financial accounting standard boards evaluation of changes because of rules surrounding the securitization. As we monitor that on an ongoing basis we’ll keep you informed, but it looks like the current proposed rules will require those assets to be held on the balance sheet; so although we could get funding from securitizing those loans, the capital relief looks like it could be in jeopardy, so we’ll keep you posted on that as the FASB comes around on it’s conclusions. In the meantime we anticipate that we’ll continue to sell these assets for the remainder of 2008. Securities losses of $140,000 are primarily represented by an other than temporary impairment charge of approximately $200,000.00 on certain corporate debt securities that we own and other miscellaneous income is primarily related to the covered call revenue that Ed mentioned earlier in his comments. As to non-interest expenses salaries and employee benefits increased $304,000 over the first quarter of this year. Excluding the impact of about $0.5 million for a one-time charge related to a long-term disability payment due to a former officer, this expense category actually decreased slightly compared to the prior quarter. Advertising and marketing increased $369,000 but simply returned to a more normal level for us. The first quarter was abnormally low. We continue to market our commercial capabilities as well as our traditional retail community banking products. Professional fees and miscellaneous non-interest expenses were up slightly due to the additional costs associated with resolving non-performing loans and other real estate owned. Other than that the remaining categories of expenses had no material changes for unusual fluctuations involved. With that I’ll turn it back over to Ed and then we’ll go to questions.

I think we can go right to questions.

(Operator Instructions) Your first question comes from Jon Arfstrom with RBC Capital Markets. Jon Arfstrom - RBC Capital Markets : I have a question on the margin that was the one piece of the equation that we were a little bit surprised on. I appreciate the covered call addition and that table in the back, I think that’s helpful, but the question is are you seeing the margin improve at this point or was it improving as the quarter progressed? I’m just trying to understand what happened to it and how we might think about it going forward.

Well I think towards the end of the quarter we saw a plateauing out a little bit. Our projections indicate that as we have our CD portfolio repriced here, if we don’t have any further cuts by the Feds and remember there as a 75 basis point cut close to the end of the first quarter and another r25 in the second quarter. Our projections are showing that as the CD portfolio reprices we will begin to show increases in the margin over the latter part of the year; so we expect to see an increase in the third quarter and continuing to see increases further out. As Ed mentioned, part of the decline is that we’ve been proactive in the pricing of the loans and you could go along on some of these loans out there with our customers and fix the rates and get a little bit more yield out of that loan portfolio, but we’ve been focusing on keeping these more on the variable side and we’ve had some customers that have come in that invest also actually are repriced out of a fixed note into a variable and so it’s put a little pressure on the market from that perspective, but we think long term that is going to help us with the interest rate sensitivity in a rising rate environment and we have a bias to be in position for rising rates generally.

Over the next 90 days there is close to $1 ½ billion repricing and that coupled with growth, we think, will bring the margin back and again there will be less reliance on covered call income as that goes forward. In this rate environment, if you look at it on a combined basis and you see where the core margin over the last quarters has been running between 342 and 358 with the calls in it I think that you can expect to be in that range when looking at the two of them and that’s why we included this, is to allow you to, it’s always been out there. No one knows well how do I model this, how do I know what you’re going to do and I think this should give you a better idea. We’ve been able to manage this pretty effectively through the use of that technique so we really like to see you concentrate on looking at it in that perspective. Jon Arfstrom - RBC Capital Markets : Any reason why, I know this causes you a lot of headaches in the sense of explaining this, but is there any reason why you wouldn’t entertain us some loss rather than mess around with this? I know you’ve done it for a long time, but it seems to cause a lot of problems for you.

Jon, we are both CPAs I think and if you would like to come out and try to tell me how I could get this under 133, trying to do hedges inside the balance sheet and deal with that nightmare God bless you, but we have used this for so long and it is very, very effective for us. I think it helps you because you’ve got to have those securities on the books anyhow. It is our liquidity portfolio that we work with and I think that if you look back over time, a lot of the questions that were raised by this you could end up with a security that’s lower, but they pay off so fast that it doesn’t, this just works so well for us and it’s so simple to use as opposed to trying to find an effective swap out there that actually from a reporting mechanism will give you what you want. You can find a swap that could give you what you’re looking for, but nine times out of ten the reporting will be absolutely the opposite of what you’re trying to do given the FAS 133 and that sort of thing. We’re very comfortable with this, it is tried, true and effective and I don’t see us moving away from it. That doesn’t mean that we would not and do not always look at positioning our interest rate sensitivity and working our margin through the use of floors, caps and swaps. We talk about it in every ElCO [ph] meeting every month is there some way we could do this or that and we keep tripping over the accounting rules, but we continue to look for that and we’ll do swaps, caps and floors on an individual transaction basis, but this is a very important tool for our arsenal.

Your next question comes from John Pancari with J.P. Morgan. John Pancari - J.P. Morgan: Can you give us a bit more color on outlook here when it comes to credit I know you have been pretty vocal about your charge-off expectations and I know you had exceeded that level marginally, but I just want to see, are you refining your expectations there, do you expect that given the pressure in the economy that it is weaker than you had expected, as you mentioned in your prepared remarks, that this ratio could trend up in the 40 basis point range and also in light of that where do you think non-performers could trend as well?

Well $64,000 question is it? The charge-offs are, we’re trying to be very aggressive in terms of just dealing with our problems and not being in denial, so we’ve said in the past we went back and looked and said well to all cycles where our underwriting parameters even in tougher times took us into that 20 to 30 basis point range. This is deeper than we thought it would be. The housing side is deeper than we thought it would be and you start to see it trickle on into some of the area, CMI and some other places that, some stress building up, but again; so I am hesitant to give you a range now, but I do believe that we will be less than peer group we’ve always operated at 30% to 50% of peer group in terms of charge-offs and I still think that given what we’ve done I would expect us to be well within those ranges and we’re still looking at it all the time and we don’t see any huge mushrooming out of this, but like I said we’re driving a toaster through a car wash right now and we are all over it, we’re looking at it all the time. From the charge-off standpoint I can’t give you much more other than to try and bring you in on a relative basis and I think I’m still comfortable with that relative basis. In terms of non-performings, the 35 is going to be here for a little while. We don’t own those properties yet, there’s not a lot you can do as you’ve got to work your way through the system and the courts and that sort of thing. They will be with us for awhile, but we believe we have a pretty good exit strategy that could be augmented by other affects that take place in the market. It’s a very versatile exit strategy and we’ve got very strong joint venture partners who are willing to join us in this and we feel very confident that from an economic standpoint our strategy is going to play out very nicely. On the other non-performing side of things we have had very good velocity of the rest of it working problems out, identifying and really getting them out of here. We still see that taking place. Those $35 million, those are the blocks of ice right now. The others we are working very hard to push them through the system and get them out, because there will be others coming down the pipe. Relatively speaking I expect this to be less than our peer groups and this sort of thing, just because of the way that we pulled back and because of our underwriting standards that we employed in the past and I don’t see a train coming at me right now, but these are interesting times that it’s hard to predict anything these days, other than the fact that we’re working them very hard and we’re not in denial. John Pancari - J.P. Morgan: In terms of your delinquencies, give us an idea of your 30 to 89 delinquencies what they did in the quarter?

We don’t typically disclose those, but one thing I would say about that is that out of the 30 to 60 and 61 to 90 days categories, we’ve got probably $23 to $24 million what we have in NPAs is in those categories. We have had a little bit of increase, but that increase is actually reflected in the non-performing numbers that are in our table. There is a little bit of an increase, but as I said, it is not in addition to the $87 million that we have and total Op there is NPLs, it is part of that number, because we don’t wait for it to get to 90 days to put in on non-accrual if the condition warrants.

That being said I think your question is how is your migration going and if you back that out we don’t see abnormal migration.

We have actually got some loans that are current that we put on non-accrual status and that goes to Ed’s point of being proactive and aggressive and identifying problems and then working on them. John Pancari - J.P. Morgan: Okay so in light of that, Ed I know you had indicated that on some of the reserve perspective you’re comfortable with adding a few basis points in reserve each quarter and then in terms of that’s the trajectory you’ve been doing and that’s what you did this quarter, but do you see a need to get a bit more aggressive here in light of the loss pressures exceeding your initial expectations and then what you’re seeing on non-performers right now?

Well as I said in the past also, this is problematically driven right now. It is driven off what’s going on in the markets coupled with our loan risk rating system. Our loan risk rating system is constantly under review. We have outside people come in and audit it. Every quarter they look at it. Given we have 15 banks its fair to say that at any point in time there is a regulator someplace in this organization. It’s like real time regulatory involvement; so people are challenging the basis of this and the outside accounts and challenging the basis of this build up all the time. In the old days you probably would just say take a bath, fill the tub and move on. Which would make you happy and everybody happy, but you can’t do that now there are two phone books worth of information that you have to go through to build this reserve up and it gets really down to the granular detailed level and is built up from there. That’s how we do it. We build it up, we test ourselves all the time on the risk rating systems, we challenge ourselves and we try not to be in denial. When in doubt, downgrade it. The one nice thing about credit is that at the end of the day it is going to work out one way or the other. Somebody is going to be right and somebody is going to be wrong. That’s the philosophy we take towards it. We don’t try to build a consensus out it of it. If somebody says, boy I don’t think — okay, we’ll go with you, we’ll go with a conservative approach. So, we’re not adverse to building it up, but there is a whole process here that you go through based on the rules that we all have to live by to build this reserve up. We look at it all the time. As I have said many times in the past and a couple of times I had to put paddles on our accountants, I said, “can I just build this up so this just goes away” and they’d fall over and we’d put the paddles on them to revive them and bring them out, but we think right now and through this constant exhaustive work that we do that it’s fine. That’s the world we live in and those are the accounting rules that we live by.

And John, we look at the reserve, we build it up on a loan by loan basis, so we are building that reserve based on an exhaustive analysis and we’re looking at our problems and we’re looking at what we think potential losses are and we’re looking at the risk ratings and we’re looking at migration, we’re looking at all those things and we still, quite frankly, think the reserve is adequate. Our losses are substantially less than the peer group and they’ve always been substantially less than the peer group and although our reserves a little less. Our losses may be akin to 30% to 50% of what the peer group is generally and the fact that we think we’ve been more conservative over the last two years would lead us to believe we think our losses will be much better on a relative basis than the peer groups going forward. Our reserve is less than the peer group, but it’s not less like those percentages. We’re not 30% of reserves on the peer group, we’re not 50% of the peer group on reserves, we’re higher than that. We are comfortable with where our reserves at based upon our analysis and we look at it all the time, but we do it loan by loan, risk rate by risk rate, loss potential by loss potential and we don’t see anything that would say that our reserve set is inadequate.

If this economic environment continues and worsens even with current loans you will see more downgrades just take place in the portfolio which in and of itself will increase the reserve.

Regardless of whether there is loss potential on it.

Yes regardless of whether there is loss potential in them. That is how this system is going to work so I think you can safely say that over time if this thing stays and continues to deteriorate that the reserves will continue to grow. I think that should make pretty good sense. Again, except for the reserves and non-performings it’s interesting during this period of time, because of the way that accountants and regulators look at the things now, your non-performings could increase, but charge-offs might not increase in this day and age. It’s very interesting the dynamics that are taking place with the rules here. So, we will continue to monitor this as we do all the time and if this thing continues to spiral downwards there will be a lot more downgrades and the reserves will be moved up.

Your next question comes from Brad Milsaps with Sandler O'Neill & Partners L.P. Brad Milsaps - Sandler O'Neill & Partners L.P. : Any update on the line of credit that you were in the process of renewing with LaSalle that you got an extension on, I think, through the end of August?

As we went through the process there was just some administrative time out there that we needed to get a 90-day renewal. We are in the process of that, we see no issues with it. If you look at it, it was just an extension of the dates, there wasn’t any change in terms or interest rate, and there was just some time with the conversion of the team over there where we just needed a little bit more time to get them through the process. We’re in the middle of that and we see absolutely no issues with that. Brad Milsaps - Sandler O'Neill & Partners L.P. : I wanted to ask, included in the $1.5 billion that you have repricing in the next 90-days, some of your Federal Home Loan Bank advances would they be in that bucket? I just noticed the cost there is still above 4% and I’m just curious if you think you’ll get some additional relief and if you might rely on those a little bit more?

No we use wholesale funding and particularly Federal Home Loan Bank funding from an asset liability standpoint only. We would much rather be building our deposit base or our funding base on core relationships and core deposits, but the client always wants what you don’t want to give them. We would love to see clients take 5-year CDs but they want to stay short when rates are low and long when rates are high. We have used the Federal Home Loan Bank financing to work to help us on an interest rate sensitivity and asset liability standpoint. My recollection is and I’m just talking off the top of my head, that over the next 6 months there may only be $0.5 million or so of that reprices most of it is longer term, two or three years. Although that pricing is what it is for longer term I think that, it is what it is if you look at it on a daily basis, from a long-term standpoint it’s not too unfavorable.

We actually put in our footnote disclosure on our annual reports all the advances with all the rates and all the maturity dates, so you can get a feel for the ones that are maturing if you just go to our annual report. Brad Milsaps - Sandler O'Neill & Partners L.P. : Then the swing notes you added this quarter, is that interest rate related?

Clearly volatility was down this quarter relative to last quarter. There are some interest rate related and some volatility related. Brad Milsaps - Sandler O'Neill & Partners L.P. : Do you happen to have the total risk-based capital number at June 30?

We haven’t disclosed that but what I can tell you is that we’re well capitalized on all categories. Brad Milsaps - Sandler O'Neill & Partners L.P. : Within the loan portfolio I noticed you had a fair amount of growth in the home equity bucket. I’m just curious if you’re running a special there and picking up good customers as other banks just back out of that area, just your thoughts on what was going on in that category?

Two points to make on that. One we haven’t seen an increase in draws on lines, our line draws still remain between 40% and 50%/ What we’re seeing in the home equity side is absolutely new customers. We offer now in the markets that we’re in there is not a big market for jumbo loans out there where people can go, so we’re offering both like a 7% two year ARM and a piggy back program where you can, they did not raise the dollar limit for conventional mortgages in the Chicago area, so we’ve been doing conventional mortgages in place with the home equity loan behind it. Again, these are under writ at our normal procedures at lower market values than were a year or two ago. We are picking up new customers through this, but I would say the majority of that are piggyback deals related to acquisitions of homes in our high network areas.

Your next question comes from [Carl Busca - D&R] [Carl Busca - D&R]: Carl and Dave I hope you won’t be offended by this question but as a long time Wintrust shareholder I get the feeling that your traditional business model is broken at this time. There were no De Novo business expansions last year, minimal branch expansion and I get no evidence of market share gains of any significance. Am I being too judgmental on what’s happened just in the last year or is this the new interest that we have to deal with?

Absolutely not, in 2005 we saw a storm on the horizon forming and we put the brakes on We were at a period of time where you could not get profitable growth. We were in an inverted yield environment and you were in a period of time where people were going crazy in terms of pricing loans and we said you can’t make any money. We do not want to deploy any capital right now to go out and not make any money on it by opening new branches and that sort of things. So what we said was we’ve just got to hunker down here for a couple of years until this market rights itself. Quite the contrary I think our model works extremely well and I think it’s evidenced by the very measured growth we started working out. In 2005 we had about 14 of our branches that were pretty much brand new that had not grown themselves and we put the brakes on them; that was painful for us, but we couldn’t see deploying capital in a position where you couldn’t make any money on it. Right now our strategy is the growth that you’re seeing is predominately coming from those banks, so we’re starting up that engine again. We have not broken away from the model, it is just the environment wasn’t giving us profitability with the model that we had, so we hunkered down. Right now we’re in a period of time where you’ve got to be very, very careful. Again we see there are substantial opportunities out there and there are also substantial risks out here. We are being very careful as we start this engine up again and we think we’re in the second year of a three-year cycle. If you get through this year relatively well, we think there will be greater opportunities to grow. We did open a couple of branches last year. We just opened in Vernon Hills probably about a month ago as part of our Libertyville Bank and that bank is doing extremely well, but your point is well taken and it is right on point with our strategy. We did stop building and growing at the previous pace, but we did it for economic reasons. Our model, we think, still works extremely well.

And on top of that Carl if you look back O Point Trail [ph] opened up in 2006 and that was a De Novo bank and we also really had an effective De Novo bank in the St Charles market as a spin off from the Hinsbrook acquisition which is a very small bank out there. Our branch out there had made it into its own separate charter, so in 2006 we really did two De Novo’s. That was an indication that we’re still in that business. We typically don’t do De Novo’s every year, we’ve looked at doing every couple years; so we did two in 2006, that was enough of the bite out of the apple in this environment right now. [Carl Busca - D&R]: About a year ago I visited with the two of you in your office. Ed you said that you didn’t think your shareholders were going to stand still for very long with the stock at $40.00 a share. Are you getting pressure from major shareholders to do something with the stock at roughly half the price it was a year ago? Edward Wehmer : I think that all of our shareholders realize that we’re all being painted with the same brush right now. That all financials are in the tank, there is a lot of uncertainty out there. There was a period of time, I told this to somebody the other day, I said, if I announced today that I found oil on all of our bank properties somebody would tell me I have a pollution problem. The issue right now is that all financials are in the tank and they are going to be in the tank until such time as some of the uncertainty works out of the market in terms of what’s on people’s balance sheets and things can become more predictable. This is a cycle. It is usually a ten-year cycle and this one is really 15 years from the last cycle. It was delayed by 911 and the amount of money that the Fed pushed into the market at that point in time; so this one’s a little bigger and deeper, but if you go back to the 1990s, go back to 1980s go back, you have gone through these cycles where all financials are down in the tank and I think most of our shareholders realize it and understand this situation. Nobody is happy, 98% of my net worth is tied up in Wintrust stocks. Well I am a shareholder too, so we understand the situation, but nobody is bigger than the market. We have to prepare ourselves to take advantage of it as it goes forward, get through this and hopefully we’ll be back in the high life again.

Your next question comes from Kenneth James with Robert W. Baird & Co. Kenneth James - Robert W. Baird & Co., Inc. : I have a bit of a mundane question here on the deposit growth this quarter and the composition of it; had quite a bit of sequential growth across a number of categories, including CDs, which you had been backing off of a little bit. Just given that your loan to deposit ratio was towards the top end of your comfort range, I was just wondering if you got a little bit more aggressive on pricing to get some of those deposits in and whether that had something to do with the margin this quarter.

We didn’t get more aggressive on the pricing if you look at it on a relative basis. What we’re trying to do is to grow these under utilized branches that we stopped growing in. If you look at the overall pricing in terms of marginal growth in other words we didn’t have a lot of cannibalizations or smaller branches that we could go out and offer a little bit of a premium rate, but we didn’t have any cannibalizations that would make your marginal rate higher and we didn’t have any overhead related to it. Your point is a good one, it probably did affect us a little bit on the cost of funds and brining it down, but on an overall basis, in terms of looking at overall growth, it actually was cheaper. Does that make sense? I don’t know if it does or not, but your point is right, it probably did hurt the margin, but on an overall economic basis it actually was good funding for us. Kenneth James - Robert W. Baird & Co., Inc. : I know you gave some outlook in terms of how to think about the margin in terms of the combined option income and net interest income numbers. If I could just focus on the option income number, can you give me any insight on how the change in the bond markets are the way they’re performing so far this quarter relative to the last quarter will affect that number? That number last quarter was actually more than you put up in your previous high years. It seems like it could stand to see a pretty substantial drop off and it could drop off faster than your core lending deposit margin would recover.

I said earlier that the volatility in the first quarter was extraordinarily high and the rate environment was beneficial so the two things that generally affect call option income is the movement of rates. If rate go up, the longer rates go up we can only get less call income. But, as rates go up our balance sheet position [indiscernible] so we can only make more in the margin. As volatility goes up you’ll get more call option income on those instruments and if volatility increases you get less. Those two factors are aware of rates and aware of volatility. We are at somewhere around $3 million thus far this quarter. Last quarter at this time we were at $11 million. It doesn’t mean that we don’t have more coming during the quarter, but just as a point of reference where we stand now we are at about $3 million.

I think if you look at the chart on page 34 and you look at the core net interest margin for the quarters and you see them running 342, 343, 345, 357, 358, we anticipate the margin over the course of the year, the margin element of it, not the call option, moving back to where it was so there may be some detriment in the third quarter but by the fourth quarter we think we’ll be back in those levels. You are dealing with a 10 basis point range, a swing here that we think that that’s a reasonable number to work with, as we let’s call income, but more interest at more of that margin. Kenneth James - Robert W. Baird & Co., Inc. : Then in terms lf long growth and specifically your commercial growth you referenced a pretty good pipeline. You had decent sequential growth this quarter, a little slower than the previous two. Can you talk about how the demand environment is developing? Are you seeing any drop off there, is your pipeline primarily new business and do you think we’ll see annualized growth more in this mid single-digit range or more closer to the double-digit or higher range in the back half of the year?

I think you should probably see it in the mid single-digit range I think makes some sense. There are a ton of deals we look at. They have to pass credit first, which we’ve always been very stringent on and then, more importantly, they have to pass pricing. We probably toss out 35% or 40% of good credit deals just on pricing right now. A lot of the larger banks have, as is normally the case this time of the cycle, are pulling back in the market and we’re seeing some good pricing relief out there. There are still some people doing some things that they think that life is like it was a couple years ago, but I think that that is a reasonable number. Again, we are balancing the environment, we are balancing it with our capital, and we are balancing it with our earnings, so that we can continue to put good solid, very profitable growth on the books. I do not anticipate, in this environment, double-digit growth in those categories as we marshal our capital and really drive that closer through the car wash. Kenneth James - Robert W. Baird & Co., Inc. : Can you give us just a brief update on the premium finance business in general I know that’s obviously been tough for you as well, for anyone on the pricing side? Can you just talk about the pricing and the ticket sizes and give us an update on some of the things you’ve talked about previously there.

Ticket sizes remained relatively where they were last quarter; we are in a very soft market. We are seeing a little bit of pick up in the professional liability stuff as Beck said that other financial institutions have some problems, so we have seen a little bit of a pick up there; just in the market itself, we don’t do a lot of banks and financial institutions, but it has hardened the market, but it’s still relatively soft out there in terms of average ticket prices, so still in that $26, $27,000 dollar range is a good number. Pricing remains competitive. All of our larger competitors are all working through very aggressively priced securitizations. Having gone now through the securitization process ourselves, as we were looking at doing that ourselves, you get an understanding that that pricing is going to change for those folks; so we believe that pricing is still not where we would like it to be, but what we believe is that their deals will have to change due to the market; that will bring some of the pricing back into the industry itself. Hopefully the competitors are going to get, we have competitors doing some of the larger deals at coupons in the 2% and yields in the 3% because all they want to do is make 1% on this, because the average ticket sizes are down they are trying to make it up with volume. We won’t play that game, we don’t chase that, but that type of pricing philosophy has worked its way through some to the more regular $27,000 average ticket size deals. But, that will have to change in and of itself given, I think, their funding costs are going to go up. Our units’ processes still are growing and the business itself is growing nicely so we are very happy with the way that business is working. Delinquencies, charge-offs, quite frankly, we like to see delinquencies go up a little bit more because that brings more money in to the late fee side of the business which can be very lucrative for us.

Your next question comes from Ben Crabtree with Stifel Nicolaus & Company, Inc Ben Crabtree - Stifel Nicolaus & Company, Inc: In the insurance premium finance business, you broadened your strategy a year ago into the smaller case market. I’m just looking for an update on that in terms of how that’s going in terms of volume and profitability relative to your expectations.

Well we think its going fine, along with our expectations. They’re business is growing, they’ve hired new sales people, it is going as expected. We are not going for hyper growth there; we just want them to work within their system and increase volumes generally and try to hold the margin. They are doing all of that; so we are pleased with the acquisition and see good things to come out of it. Ben Crabtree - Stifel Nicolaus & Company, Inc: You’re emphasizing growth coming out of your newer branches. If you’re cautious wouldn’t it make more sense to generate the growth out of the older more well established branches where you would know the market better?

What’s so good is we’ve got bifurcate growth. The younger branches we need to develop and work into their overhead just on a market share standpoint and again we are predominantly retail funded out of those and we have not really had the penetration to move us to one or two market share in those markets because we basically stopped the growth. From the deposits side that is the cheapest way for us to grow and for us to build up, because again, no cannibalization and really no overhead related to growing it. On the lending side, the loans, it is not coming out proportionally. Our larger banks, where we’re not pushing deposits, are still generating a good deal of loans of those loans are being placed with these deposits that we’re putting in the other banks; so we are right on with you there. We are not asking these young people to go out and lend like crazy, we are relying on the expertise of our older banks and their ability to generate credit and we are utilizing the funding sources in the other banks. Again, one of the benefits of our multi-branded, multi-chartered approach. Ben Crabtree - Stifel Nicolaus & Company, Inc: One question about the scene in Chicago, certainly we have all been talking about regulatory pressures on capital and things like that and particular emphasis or attention being paid to a lot of smaller banks making it more uncomfortable for them to be in business. With the expectations that you would be getting more calls of people looking to sell, I’m just wondering if in fact that is happening at all.

On a relative basis, yes, given that over the last year there really was nothing going on, but on a relative basis there is more movement in that area, but quite frankly I think that next year and the year after those opportunities will still be there. After some time you will be able to figure out what cancer and how much of it maybe some of these guys have may be a better time to be dealing with them, also in a time where — we don’t have a lot of currency right now. Our stock is trading where it is and we have got enough to do here in just building out our branches and building it up, so we’re basically, unless something was extremely compelling, we’re not in the market right now, but there has been an increase in chatter. Ben Crabtree - Stifel Nicolaus & Company, Inc: Would I be wrong to assume that since you have all the individual charters and in fact you have a steady stream of regulatory exams rather than just like one big one, so you just get them as you go through the year?

That’s how our life’s been. Yes. We live with a mall here, I feel like I am at a teaching hospital half the time. Somebody is always poking and prodding me somewhere.

You’re right with 50 different charters it’s a constant flow and that is fine. Ben Crabtree - Stifel Nicolaus & Company, Inc: So you don’t have one great big event during the year.

No.

Your last question comes from Peyton Green with Ftn Midwest Securities. Peyton Green - Ftn Midwest Securities Corp. : : Is it all deposit mix, is there still too much pressure on the loan side, and is it a combination of things?

Number one, keep the positive sloping yield curve; number two get a little bit of a higher rate. We are dealing with a very depressed, we are in the red zone right now, there is not a lot of room to maneuver given where rates are. We would love to see higher rates that would be very, very helpful for us. Secondly loan spreads are coming back. We need to work those through the portfolio which is going to take time and also make sure we employ them on our new assets that we’re bringing on the books. Thirdly if you were to look at our margin versus some of our competitor’s margins the difference between our core margins, without the cover calls in, and their margin is they get a much better contribution from free funds. We continue to push our C&I initiative, very cautiously mind you. The market in Chicago to do that has been a little bit; some of the competitors are still buying business. Some of the fellows that the offshoots where all of the sale got exempted up, they are still pricing at all the sale pricing to get deals and so the pricing on that market has not caught up yet because of competitive issues. The fourth element really is, we have got to grow into the overhead that we have put in place that had not been fully utilized yet; that’s what we are trying to do with our growth strategy now is to build those banks up, lift them up with good production from the other banks and first insurance loans, we spread those out through the system; so we need to work through it, but it literally is a rate environment issue right now and get through this credit cycle, because that is still the wild card out there. How long and deep is this going to be. While management’s side of the business is progressing nicely, the mortgage side of the business is really progressing very nicely for us, those still need to grow and become more profitable, but again, we were caught at the wrong time for a growth company where you couldn’t get profitable growth. We have got to catch up to that and then we can turn the engines on full speed again. Hopefully that will be when we’re through this environment, but it literally is margin and growth driven. Peyton Green - Ftn Midwest Securities Corp. : Okay and then on the growth cycle, we are pretty early in saying that it was coming, but do you see any signs of migration from just residential oriented credit issues into more commercial?

A little bit, there is some trickle down.

Not anything to write home about, but if a bank had one or zero, you might have one now. It’s a little bit, but you can feel it a little. Peyton Green - Ftn Midwest Securities Corp. : In terms of regulatory climate change, are you all seeing that as they visit you all or are you starting to hear more stories about it?

No, they are doing their job, they come in loaded for bear and that’s okay. That is what they should do. Maybe they should have done it a couple years ago, but they come in now. We are very open. I will tell you one thing, anything that anybody has ever come up with, like a regulator who comes in, they might come in and say boy we want to down grade this credit. That’s fine. They have never surprised us with anything. They have never come in and said, “Hey you’ve to a problem with this loan and we went, whoa what’s that? I hope that that tells you that we’re on top of it. I think they take some comfort in the fact that we are on top of it, we are very aggressive and progressive in trying to solve these things, but again the real issue is if this gets bigger and deeper that it will cause ratings changes, that will cause provision increases. It just depends on how long and deep this thing is. Regulators are regulators and again, we have them in all the time, so we’ve gotten used to them.

We’ve been talking to them. We talk to them all the time, so it’s not like they came in last April and they came back this April and said well okay we’ve changed. We talk to them all the time because they’re in all the time, so there are no surprises on our end out there. What we are hearing is that they do have some banks in the system where people have their head in the sand and haven’t gotten updated appraisals, haven’t reviewed the cash flow of their borrowers, haven’t gone through and updated underwriting of their credits and said look, they had lots of collateral what’s the problem. Those are the banks that they’re.

Their banks, not our bank.

No, other banks outside the system, those are the types of banks where we’re hearing that‘s where the scrutiny is getting much, much tougher. But for us, we have had discussions with them on going all the time. We think we are on the same page, we understand where they’re coming from, and we want to be proactive on our credits too. Our entire net worth is tied up in this organization and we need to be proactive and that’s the reason a few years ago we took the strategy that we did. So, are they a little tougher in their tone now? Yes, absolutely, they should be. Peyton Green - Ftn Midwest Securities Corp. : To what degree do you have opportunity to reprice CDs down over the back half of the year?

Well we said over the next 90 days there is about $1.5 billion that will be being repriced.

To put it in context the most popular CD term that we have is 12 months so you can look at it at a fair amount of that portfolio repricing every month. :