Edward Joseph Wehmer - Chief Executive Officer, President, Director and Member of Executive Committee David Alan Dykstra - Chief Operating Officer, Senior Executive Vice President and Treasurer David L. Stoehr - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division Emlen B. Harmon - Jefferies LLC, Research Division Brad J. Milsaps - Sandler O'Neill + Partners, L.P., Research Division Christopher McGratty - Keefe, Bruyette, & Woods, Inc., Research Division Stephen G. Geyen - D.A. Davidson & Co., Research Division

Welcome to Wintrust Financial Corporation's 2014 Third 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 forward-looking assumptions are detailed in the third quarter's earnings press release and in the company's most recent Form 10-K on file with the SEC. I will now turn the conference call over to Mr. Edward Wehmer.

Thank you. Good morning, everybody. With me is, as always, Dave Dykstra; Dave Stoehr, our Chief Financial Officer. Lisa Pattis, our General Counsel, is not with us today. She's out following her son, who's playing in the state golf tournament. So good luck to him. We'll follow our usual protocol for the call. I'm going to give some general comments on the quarter. Dave will get into some specific details on the other income and other expense categories. Back to me to summarize and provide some thoughts about the future. And then, as always, we'll have time for some questions. All in all, we're very pleased with the results in the third quarter and for year-to-date. Record quarterly earnings of $40.2 million or 13% over the third quarter 2013. Record net income for the 9 months of $113.3 million was up 11% over the same period in 2013. Earnings per share year-to-date of $2.23, a return on tangible common equity approaching 11%. All in all, we continue our plan of slow and steady earnings and operating metric improvements. We continue to believe that this is the best course of action in this unique and somewhat goofy environment that we're doing business in right now. Start off with the net interest margin, I know that on everybody's mind. That did go down 16 basis points this quarter. I'll give you some of the details of that. But however, the net interest income is actually up $2.5 million over the second quarter. So good earnings coming out of the portfolio, and we're very happy with that. The margin was affected, first of all, by -- and this is somewhat of a permanent thing, I guess, $140 million of sub debt expense, $140 million of sub debt. The interest expense on that provided a 6-basis-point decrease in the margin. That's good cash, cheap cash for us to continue on our approach of taking advantage of what the market is giving us, which is the acquisitions, of which we closed 2 last quarter and announced another 1 just this week. Excess liquidity brought down [ph] by these acquisitions of about $300 million for the quarter, was a little over 3-basis-point decrease in the margin. As you know, we've been operating, trying to optimize the balance sheet, operating a little over 90% loan-to-deposit, at the high end of our range. And we have told you earlier, we expected the margin to fluctuate 10 basis points, up or down, off of 3.50%, depending on the amount of liquidity we had. It'll take another quarter to absorb this liquidity. But we continue to work optimize the balance sheet in that regard. Covered asset yield was off 4 basis points, as that portfolio continues to decline. If you asked if that was kind of a permanent decline, theoretically, this is a level yield portfolio, but it's not one portfolio. There's actually 75 pools of different loans out there that have been picked up throughout the course of the many acquisitions, failed -- bank acquisitions that we took part in. And just this quarter, we had some of the higher-yielding pools pay off faster and -- but that doesn't mean that the next quarter, we won't have some of the low-yielding pools perform a little bit better. So all in all, you're going to play in a range here. But that portfolio is decreasing, and I don't expect to see many more, if any, failed opportunities coming our way. However, there is the opportunity if we continue to acquire other institutions, you get the same accounting -- although you might not be covered losses, you still get the same accounting on any troubled asset you pick up. So hopefully, we'll be able to continue on that road and get good deals out of other people's bad assets that we pick up. And finally, 4 basis points of decrease can be attributed to the overall competitive environment. And what I mean by that is, during the quarter -- and I'll talk about this a little bit later -- we had a pretty good loan growth quarter, but it actually was better than anticipated. The market is kind of frothy right now, as you all know, and it's a good time for us to cull our portfolio. We pushed out a little over $200 million, about $211 million of rated credits, 5s, 6s and 7s, but a little bit higher-yielding credits during the period. Other people, there's a lot of Mikeys out there that will eat anything, and it's a good time to just -- credit quality and maintaining credit quality is a constant management issue for us. And that means getting things out before they -- if they get a little bit sour, and we're taking advantage of this opportunity to do that. So actually, when we talk about loan growth a little bit later, you can see that the numbers actually were, in terms of new business booked on our terms, is pretty darn good. But it's a great opportunity to, and it's part of our culture, to continue to push out bad credit. On the other income, other expense, Dave is going to go through that in detail. But I will say that the mortgage area continues to do very well for us. And our projections now for the rest of the year and for the foreseeable future say it should continue to do well. The drop in rates just occurred during the course of this week. I mean, we're almost 2.5x our normal application process during this last week. So the mortgage business for the foreseeable future still looks pretty good, and we're committed to that business. We anticipate, at some point in time, there will be a quarter or 2 where things slow down a little bit. And again, it's going to be dependent on our ability to recording in [ph] expenses, but let's take advantage what the market has given us. People are always going to need mortgages, and that's a good place for us to be. Wealth Management continues to grow very nicely for us, although fees were down a little bit. But the assets under administration now approaching $20 billion. And really, they're up over $2.3 billion over the same period last year. So that area is growing nicely. And what we liked about that is that the margins are going to continue to improve on that as more of the revenue that we are picking up will fall to the bottom line. So there's significant momentum in that area. We intend to maintain that momentum going forward. Credit quality. Our metrics continue to improve, although they really, throughout the course of the cycle, were never really that high. But they continue to improve, pretty much at pre-crisis levels. We're not going to stop until we clear the balance sheet of the bad assets that we have. And we'll continue the process of culling any marginal assets that are on the books right now. As I said, there's a lot of Mikeys out there that will eat anything, and it's good to maintain a clean portfolio for if and when the next -- well, why don't we just say when the next issues come along in the environment. But it's always going to be part of our DNA to do that. Nonperforming loans are 58 basis points. Reserved covered is over 113% of nonperforming loans. And nonperforming assets stand at 69 basis points. And we'll continue to push those down. On the balance sheet side, total assets of 19 point -- almost $2 billion. We're up $274 million from the second quarter and almost $1.5 billion from 1 year ago. Total loans grew at $302 million in the quarter. $120 million of those loans were acquired in the acquisitions that we closed in Wisconsin during the third quarter. Loans are up $1.4 billion or 10% over 9/30/13 balances. Loan growth has occurred in all categories of the portfolio. We are -- we maintain a very, very diversified portfolio, as all of you know. We're not a one-trick pony. We don't do a lot of big SNCs or other big deals. We're building this one brick at a time based on our parameters and our pricing parameters and our loan policy. We're still seeing good growth in all the areas. We're moving into more diversity. Our leasing portfolio, we started as a leasing company earlier this year. It's only got about $20 million outstanding right now, but all the pieces are now in place. That pipeline and the leasing pipeline standalone has moved up to over $120 million. And that will be -- we see -- figure we can grow that portfolio over the next year to $500 million, $400 million or $500 million, if we can maintain this. So that will be good loan growth for us going forward and a diversified nature. Also, our portfolio mortgage product is starting to get some traction also. We probably should have sent something to Ben Bernanke when he got turned down because -- for his mortgage, because our product is perfect for those types of situations. And again, those are 1-, 3-, 5-, maybe 7-year ARMs. The beauty of those is we've got some premium pricing on them. But they usually pay off in 1 year or 2, when the condition which caused them not to be qualified has been cleared. So again, another aspect of the portfolio we expect to grow going forward, and we're looking forward to that. On the commercial and the commercial real estate side, our loan pipelines remain extremely strong, and they're really at their highest levels that they've been in the last 9 months. They're gross, about $1.2 billion; weighted, about $800 million. So loan growth is still pretty good. We're able to get deals on our terms, which is important to us. The market remains competitive, but that doesn't mean that -- I have made some comments earlier regarding how we would not be afraid to go into another rope-a-dope strategy, but that doesn't seem to be the case right now. As I've indicated, our pipeline is still very strong from a diversity standpoint. We continue to find other areas where we can grow loans and grow the balance sheet and grow earnings during this period of time. But again, we wouldn't be afraid to go into it. If, in fact, the market got really stupid, we're not going to follow that over the cliff. Again, with the loans up $302 million, we were very, very happy to push out those $211 million worth of rated credits. So it really was a very good loan growth quarter for us, and we expect that to continue. Deposits increased by $309 million -- $509 million, I'm sorry, 13%. $400 million of that was acquired in the 2 Wisconsin deals which we closed. DDA increased $181 million. Again, an indication of our ability to pick up the commercial accounts and really -- and then DDA is now over 20%. If you recall, 5 years ago, we were at 9%. So slowly but surely, we're diversifying our funding sources and when rates move, that will be pretty cheap money for us. The deposit growth, we try to maintain this efficient balance sheet. So a lot of CDs that really run out the door, and we let them run out. But I thought I'd give you some indication of really the growth of the franchise itself and how well our core base is doing. We're core funded 96% through our retail and our commercial bases. Those are our individual customers. Our growth in households has been absolutely terrific. Overall, retail household growth is up 16%. We went from 143,000 to 166,000 households in the last year. It's a 23,000 household increase. These are households that when we move out of the acquisition mode, when that market moves away, we'll be able to cross-sell lots of things into them. And again, CDs can always come back when you want to pay the rates, and that will happen when probably rates are higher. So we have lots of opportunity to continue to cross-sell. I sound like I'm from Wells Fargo, but we -- and they talk about cross sales of products into households. We're building that base and should be able to do that going forward. On the commercial side. Total commercial accounts have moved up 11%, 2,200 new commercial accounts in the last year, up 11%. And small business accounts have moved up 5,000 accounts for us, up 20% year-over-year. So little by little, this franchise is gaining more and more customers, more and more accounts, more and more diversity and very strong. We build this one brick at a time. We're not relying on institutional funding. We're not relying on brokered funds. We're not relying on elephant deposits. We're building this 1 house, one brick at a time, a very sturdy base of which to build off of and a very diversified portfolio of which to build off of also. Just another comment I'd like to make. We put in an additional disclosure on our interest rate sensitivity and our asset liability management. It's come to our attention, and looking at a lot of reports out there and looking at how other people disclose, that there's a lot of apples and oranges flying around. Some people disclose on a 200-basis-point shock basis. Some people disclose on a ramping basis, which is what we always did as we considered that the most probable rate increase. But we put in a chart on Page, I think, 23 of the release that shows both our shock position, which is close to 14% interest rate sensitivity; and our ramping position, the one we've always disclosed. So hopefully, that will allow all of you out there who followed us to do an apples-and-apples comparison to some of our peers, and to also understand how positioned we are for rising rates. Used to say when they occur, now I'm like, who knows if they are ever going to occur. But we believe that's the appropriate thing. We continue to try to increase our interest rate sensitivity going forward because eventually they will go up and again, we'd refer to that as the beach ball under water. So all in all, very -- balance sheet remains extremely strong. Capital remains good. Credits getting better. And we're doing -- taking actions to make it even better. Loan growth appears very good. And we feel very good about where we stand right now. So I'm going to turn it over to Dave now to talk about other income and other expense.

Thank you, Ed. As I have done in the past, we'll start off talking a little bit about the noninterest income and move on to the noninterest expense sections. In the noninterest income section, our wealth management revenue, as Ed alluded to, totaled $17.7 million for the third quarter, which was down slightly from the $18.2 million that we recorded in the second quarter of this year, and improved by $1.6 million when you compare it to the year ago quarter. The trust and asset management component of this revenue category continued to show consistent growth, increasing to $10.5 million from $10.0 million in the prior quarter. As Ed mentioned, the increase is attributable to the growth in assets under management due to new customers, as well as some market appreciation. Brokerage revenue was down a little, but can fluctuate based on customer trading activities and moved to $7.2 million this quarter from $8.3 million in the prior quarter. Although it was down this quarter, it is actually relatively consistent with the levels of revenue reported in the prior 4 quarters. The second quarter this year was just a little bit unusually high relative to the prior quarters. So still a nice trading environment for us and continues to be strong. Mortgage banking revenue increased to $26.7 million in the third quarter from $23.8 million recorded in the prior quarter, and was also higher than the $25.7 million recorded in the third quarter of last year. The company originated and sold approximately $905 million of mortgage loans in the third quarter compared to $841 million of mortgage loans originated in prior quarter and $941 million originated in the year ago quarter. The third quarter continued to show a relatively strong mix of volume related to purchased home activity, which still represents about 3/4 of our volume in the third quarter. And that's about the same as it was in the prior quarter. The value of the company's mortgage servicing rights portfolio stayed relatively consistent, but declined $100,000 to $8.1 million in the third quarter, and was valued at 91 basis points versus 89 basis points in the prior quarter. Fees from our covered call option program increased slightly to $2.1 million compared to $1.2 million in the previous quarter and only $285,000 recorded in the year ago quarter. As we have said before, we consistently utilize these fees from covered calls to supplement the total return on our treasury and agency securities in order to provide an economic hedge to margin pressures caused during periods of low interest rates. Trading gains totaled $293,000 during the third quarter of this year. This compares to trading losses of $743,000 in the prior quarter and $1.7 million in the year ago quarter. As we've said before, the trading losses and gains are primarily a result of fair value adjustments related to interest rate contracts that we don't designate as hedges, and these are primarily interest rate cap positions that the company has used to manage interest rate risks associated with rising rates. Switching over to the noninterest expense categories. Total noninterest expense equaled $138.5 million in the third quarter of 2014. This has increased by $4.9 million compared to the prior quarter. And the primary drivers for the increase was increased variable compensation expense of $2.5 million and approximately $1.2 million of noninterest expenses related to the operating cost of the branches acquired during the quarter. If we turn to the details, I'll talk about the salaries and employee benefit section first. This category increased $4 million in the third quarter compared to the second quarter of 2014. The increase in this category was primarily due to $2.5 million of increase in the commissions and incentive compensation expense category. And this was primarily a result of increased accruals for both long-term and short-term incentive compensation plans. As the earnings performance of the company continues to improve, the accruals are likewise increasing. And as -- while as to a lesser extent, increased commissions expense related to higher mortgage loan production. The base salary expense increased as a result of approximately $0.5 million related to the acquisitions during the quarter, slight increases related to the increased mortgage production, some additional compliance-related positions and the general growth of the company. Offsetting the aforementioned increases, employee benefits expenses were approximately $600,000 lower in the third quarter compared to the second quarter, and that's predominantly due to lower payroll taxes. The remaining categories of noninterest expense, that is excluding the salary employee benefits, were up only approximately $300,000 in the aggregate if the costs related to the acquired branches are excluded. So although certain of the categories fluctuated up and down, in aggregate the changes were relatively consistent with the prior quarter if you exclude the branch acquisition costs. So although they were relatively flat, I will go through a few of the categories in detail. Occupancy expenses increased by $596,000 in the third quarter to $10.4 million from $9.9 million in the second quarter of the year. And the current quarter results saw increases related to the recent branch acquisitions and also, increased property taxes. Professional fees remained flat at $4.0 million compared to the second quarter and a slight increase of $657,000 from the year-ago quarter. The current quarter included some legal costs associated with the 2 recent branch acquisitions in Wisconsin. Professional fees can fluctuate on a quarterly basis, as you know, based upon the level of acquisition and problem loan work-out activity. With that being said, the professional fees incurred in the current quarter are certainly within the range that we've experienced over the past 5 quarters. The third quarter also saw a decrease of $1.9 million in net OREO expenses compared to the prior quarter, resulting in net OREO expense of $581,000. This compares to $2.5 million in the prior quarter. The current quarter expense was comprised of approximately $1.3 million related to operating expenses, offset by approximately $700,000 related to valuation adjustments and net gains on the sale of OREO. Page 41 of our earnings release provides additional detail on the activity and on the composition of our non-covered OREO portfolio, which decreased to $50.4 million at September 30, 2014, from $59.6 million at the end of the prior quarter. So those are the major categories. And as I said, other than the salaries and fully benefits costs and the acquisition-related costs, really, the rest of the categories remain, in the aggregate, relatively flat. And so with that, I will turn it back over to Ed.

Thanks, Dave. So to summarize, we're very pleased with record results. I don't know how you couldn't be? We have good progress in all fronts, except maybe the net interest margin, but really, 6 basis points of that is kind of permanent with our funding costs. But -- with the sub debt, but other than that, we will strive to maintain in that range that we have talked about before. A lot of it will be utilizing liquidity, et cetera. In the quarter, we completed 2 acquisitions and announced 1 more. We have talked about, right now, the market giving us opportunities on the acquisition front to expand and build this franchise. We expect that to continue for some time. And then, at some point in time, it will go away or prices will move beyond that point of equilibrium where core growth makes more sense. But in the meantime, we are very active on the acquisition front in all areas of our business. And you've seen by the household numbers and the commercial account numbers that read throughout earlier, that we continue to grow organically. It's a little bit offset by our letting CDs runoff. But again, we can always pull that type of funding back in and we're trying to maintain that perfectly balanced balance sheet. Prospects for loan growth remain good. Our pipelines are strong, plus our new products are gaining good momentum. And although it is tough out there, sometimes it's going through a stack a needles to find a needle, where -- our guys are doing a great job. Our momentum is good. Our brand is good. Our reputation is good, and we're getting lots of at-bats. And it's so far, so good. Everything is working well. The franchise just continues to get stronger, built on a very strong foundation. Our interest rate sensitivity, we think, is in a good position and can get better. Credit is getting better and it's still a priority for us to make it better. Mortgage and wealth management business continue to go well. And as I said, acquisition pipeline remains very active. Our goal is to -- short-term, is to continue to optimize the balance sheet, run it close to the high end of our range of 90% loan-to-deposits, maintain discipline on credit, take what the market gives us now with the new acquisitions and don't try to be something that we are not and hang out over our skis. We're positioned for organic growth when the time comes, I talked about this earlier. There's a lot of, what we call, kinetic leverage in the system. So we can grow organically without a commensurate increase in expenses. So we like where we stand from that perspective. We continue to identify and push out bad assets, or marginal assets. We think now is the time to do that. We continue to cull the portfolio. It's hard to do sometimes because loan growth is important to us and it's the only place you can make money right now, but that's where the discipline comes in and that's part of our DNA. And that's why, we always put up much get better credit results than our peer group. And we're going to continue to work on interest rate sensitivity positions. So I really like where we stand right now, where we sit. It's a tough environment. I don't think we've had a not tough environment since 9/11. But that's what we get paid for, is to put up double-digit earnings growth in periods of time, tough or not tough. So we like where we stand, slow and steady is going to win this race. And with that, I'll turn it over for questions.

[Operator Instructions] And our first question comes from Jon Arfstrom from RBC Capital Markets. Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division: Just a couple of things. You covered a lot here, but just on lending, if you could touch on that. Where are you seeing the best lending opportunities? Maybe profile what's in the pipeline. And then on the other side of it, you talked about some banks taking some credits away from you. Give us an idea of what you're letting go. Is that credit specific? Or is that a type or a geography or something like that?

Last part first, it's credit specific. Our risk rating system is very robust, it's monitored, and it's -- we take it very seriously. And these are credit-specific deals that start showing some air, some cracks. And we gently show the customer the door, and there are plenty of takers out there to pick them up right now. So it's not -- and they get them at lesser rates than maybe we were charging them. So there's $211 million ran out. We're at higher rates than the portfolio. So that hurt us a little bit on that core portfolio going down, but that's okay. It'll be easy to stick with them, but that's a fool's game. You'll lose your money on credit, and that's what we are in the business of doing, maintaining safe credit. If you didn't learn in that in the past few years, I don't know what you learned at all. You see where our pipeline is. The $1.2 billion pipeline really is lines and -- lines of credit and terms -- term loans, grand total about $700 million. Real estate, about $465 million. Other loans, about $25 million. So that's about $1.2 billion there. The leasing pipeline is around $120 million. I will qualify that by saying we don't have evidence of the pull-through rate on the leasing pipeline right now. The salesmen are in place. The thing is starting to get lots of traction. But we don't have empirical history on what our pull-through will be there. So I will qualify that statement. And I just gave you a gross pipeline number there, but that's where that stands. The premium finance business continues to do very well. You can see those balances increase. Our life insurance business is doing very well. You know that industry. A lot of competitors will pulse in and pulse out of that market looking for outstandings. We have such a value-added proposition that we continue to grow that business. And I don't have the numbers in hand, but their pipelines are also the largest than, I think, in a couple of years. So that business is very good for us. And the other premium finance business, the commercial premium finance business, the average ticket sizes are stuck around $23,000, $24,000. In the old days, normal was $27,000. But we continue to pick up market share there, as evidenced by the growth in those balances. So that business goes very well. A little surprising in that business is how clean that portfolio is, Jon. It's the non -- we used to, in the old days, get late fees of 2%, 2.25%. And, Dave Stoehr, this quarter, they were? David L. Stoehr: 1.25%.

1.25%. So people are paying. They're paying faster. So that's hurt us a little bit on the yield. But again, that's probably our most profitable business right now, and that continues to grow. So when I said where are we seeing the growth, where are the pipelines, it's across the board throughout our entire diversified portfolio. Jon G. Arfstrom - RBC Capital Markets, LLC, Research Division: Okay, good. And then you and Dave both touched on this on the expense thing, but just maybe bigger picture. Aside from some of the variable comp or maybe the mortgage comp that would move around, any pressure on expenses that we need to think about for Q4 or for 2015? Or is this kind of more of the same, letting the business model run?

Yes, no, I think it's probably more of the same. Hopefully, we'll continue to see lower OREO costs as that gets down. But, in this quarter, as I said, we had about $1.2 million worth of costs associated with the branches. Now we had those branches for just a portion of the quarter. So there'll be a little bit more going forward in the fourth quarter, since they'll be on for a full quarter. But other than that, it should -- we should be able to hold the line pretty good. And as we do additional acquisitions, hopefully, we'll be able to lever those and, at least from an overhead ratio perspective, be able to bring those ratios down as we lever the -- these smaller acquisitions that we keep layering in.

Yes. Jon, the efficiency ratio is a nice barometer to look at, but you can never manage your bank off an efficiency ratio. And we -- I'll just give you an idea of our goal. We were -- I think, 1.67 was our net overhead ratio this quarter. Our goal is to get that below 1.50. And -- through acquisitions and some cost saves and hopefully, we can do that. It was always, in the old days, if you're under 1.50 in the net overhead ratio, you're running a pretty good high-performing bank on that side. So the efficiency ratio, when you look at it and you go, what would you manage? If the margins down, your efficiency ratio is down, are you're really less efficient? And you're not. You really have to look at it component-by-component. Our goal is always to get that below 1.50. We have some of our banks operating at like 50 basis points in that area, 60 basis points. So there is room then -- and a lot of that -- some of that is that kinetic leverage we talked about. When we want to turn on the organic jets to grow, we should be able to take advantage of that, too. So we're in a growth -- market has given us -- we're a growth company. Our goal is to increase earnings double digits every year, continue to build the franchise and take what the market has given us. Sometimes, the expenses will be -- we do a deal and the expenses will be up, and then they'll come down. Life isn't linear when you're a growth company.

Our next question comes from Emlen Harmon of Jefferies. Emlen B. Harmon - Jefferies LLC, Research Division: So a question on the loan yield. I mean, outside of the covered assets, we did see the loan yields come down 5 or 6 basis points. And I guess, a couple of questions on that. First, how should we think about kind of incremental loan yield coming on the books? Given you got so many businesses, it's just hard for us to kind of wrap our arms around that. And then second, just does it move up in quality in terms of the loan portfolio, imply yields may have some room to come down?

I think as we've said before, we were at 4.25%, we went down to 4.19%. Ed talked about some of that reason is some of the loans that paid off were higher yielding. But the new loans that we're getting on sort of in the aggregate are still sort of in the low 4s. So probably less than the 4.19% on average, but still generally above 4%. So there might be a little bit of pressure there. A lot of it comes down to mix. Our premium finance portfolio generally yields at prime, close to or higher, so if -- on the commercial side. So if you have growth in that area, that's a little bit stronger than, say, the C&I side, then you'll be able to hold those yields up a little bit better. And the leasing business generally is going to be a little bit higher-yielding asset for us relative to this -- in the C&I portfolio. Commercial real estate generally is doing okay. But it's still early for us, it's really more of a mix. But over the last year or so, we've been able to keep the new loan yields above 4%, but in the low 4s. So I think we will see a little bit of pressure there. But it really it's more where is the volume going to come from and what's the mix going to be.

The leasing portfolio, that pipeline, again, qualifying it for unknown pull-through, without residuals sort of things, that pipeline is about 5.5%. So the mix will help us. And you can get in the 4s on our adjustable-rate mortgages that we're throwing out there. So it does depend a lot on the mix. Obviously, the commercial side is getting beat up pretty good. But again, you have to look at treasury management and wealth management, all the other opportunities that come with those in terms of overall profitably. So it's just as hard for us as it is for you to determine -- project out where it's going to be just because of the mix issues that Dave talked about. But we like a diversified portfolio because you do get the benefits of up-and-down and you're not relying on one asset class to pull the lighting [ph]. Emlen B. Harmon - Jefferies LLC, Research Division: Got you. That's helpful. And then, I know it's early in some of those new markets in Wisconsin. But just would be curious for an update on how you guys are doing selling loans into some of those new markets that you've acquired.

Yes. Well, I think we're doing fine. As you know, in the branch we bought in Pewaukee, we did get loans, and that was about $90 million or so of the loan growth in the quarter. And that came with the transaction. The remainder of that growth, that was really loans that we've pulled in from the Talmer acquisition now. As you recall, on Talmer, we just bought deposits. But we just started to bring some of those customers in and we hope to continue that trend for the -- in the fourth quarter.

Yes, you imagine, Emlen, that they don't want their loans over Michigan and their deposits here in Wisconsin. So that will be slow and steady to repatriate those loans. And I'm sure Talmer isn't going to mind because they probably got big discounts on them. I'm just guessing, I don't know that for a fact. So I would imagine those would migrate back over time, over the next 6 months, as either they mature or they're taken out. So we would expect to recover a lot of those loans that were in that franchise over the next 6 months, plus grow the franchise, too. Now we'll be -- the deal we just announced will be the largest bank in Walworth County around Lake Geneva. And I think we'll have great momentum there. That's a wonderful little area. People think of it as a resort area, but all around there are little businesses, manufacturing plants and the like that we can actually bring some muscle to in turn [ph] that those banks didn't have. One of the complaints that they had is that some of their companies up there got too big and these smaller banks couldn't handle them. We can handle them now. So we think that there'll be not just the migration of the old Talmer stuff, but there will be good opportunities [indiscernible] also, so slow and steady will win that race, too.

Our next question comes from Brad Milsaps of Sandler O'Neill. Brad J. Milsaps - Sandler O'Neill + Partners, L.P., Research Division: Just to kind of follow-up on the branch discussion. Were the branches that you bought, were they fairly light on fee income? I know you guys aren't a big nuisance kind of fee bank anyway. But just kind of was curious if more of that -- you expect more of that to flow-through over the next couple of quarters as you kind of get them up and running on your platforms and the way you guys do business?

Yes. They're probably lighter than us. We do have a wealth management person that came over with the Talmer branches. And so he's bringing his customers over. And so we expect that to grow. Obviously, relative to the entire wealth management business, it is not going to be material, but it is going to be helpful as those customers come in. We also have mortgage producers that are up there working for us now. And so that should gain some traction also. On the transaction we just announced, they've got the same -- they've got a person that deals with the wealth management for their customers and a mortgage production staff. And we're hopeful that once we put them on our platform, we certainly have more products and probably better pricing on the mortgage side because of the volume we do. So we think, we'll be able to give them some ability to grow their customer base and bring in more production as they go. So both of those, you're right, lighter on fee income probably than Wintrust as a whole, relative to the size, but we should be able to grow it going forward. Brad J. Milsaps - Sandler O'Neill + Partners, L.P., Research Division: And Dave, since it was a branch purchase, there probably aren't a lot in the way of material cost savings. Is that fair?

No. I mean, we certainly can lever it a little bit on the operating side with Talmer. We didn't need all of their back-office people. But the thing with the branch acquisitions up there, we did retain the majority of the lending staff with Talmer because we wanted to bring those loans over. So right now, we're probably a little bit heavier salary-wise relative to the balance sheet side, because we've got to bring those loans in and we've got the lenders, but we don't have all of their portfolios yet. So there's some leverage to go there as far as bringing the revenue to match off on the expenses. But that's an investment by us, and they have good lending teams and we like their lenders, and we kept them because we want to grow in that market area and retain their customers and bring the loans onto the books. So we're probably a little heavy, expense-wise, relative to the revenue generation there right now, but we expect that to catch up very quickly.

Yes. And as Dave said, back rooms all get consolidated. So there are -- plus data processing stays. We pay less in DP and all the operating saves from those branches will come through. So -- and when -- the Delavan deal, which we just announced, is a contiguous market, same market as some of those branches, so there'll be some savings there also. But it's important to us that we take care of those people there, too. And we're a big enough organization now that we can do it, so there will be some migration to the empty holes also in the organization. So we don't go in and slash and burn right out of the box. We believe we're -- this is a people business, that's the way we run it. We don't cut a lot of customer-facing people, if any. They know the customers. They are the face there that makes us -- that's kind of our secret sauce there. But the operating people will be moving and we will get some significant savings on that side of the equation.

[Operator Instructions] And our next question comes from Chris McGratty from KBW. Christopher McGratty - Keefe, Bruyette, & Woods, Inc., Research Division: Ed or Dave, the $200 million costs that was pushed out in the quarter, can you speak to -- is there any more that you, I mean, look to in the fourth quarter to kind of push out of the bank? And if so, I guess can you comment on what your expectations are for kind of net loan growth? I think in the past, you talked around the $300 million run rate per quarter. I wonder if this impacts -- this decision, near term, impacts growth a bit.

No. I think, our expectations still are the $250 million to $300 million a quarter for net loan growth. Obviously, there are still some deals that we would like out of the bank. We still do have some nonperforming loans and some 6-rated credits out there that we would like to leave the bank. But as I've said, we're going to be diligent in cleaning those up. But all in all, the nonperforming loan number is dwindling and it's not that big of a number anymore. So we'll probably still have some -- well, it's hard to project that, but we still have full expectations that, that level of growth is our goal. There's no guarantees that we'll get it or that we won't exceed it. But we do expect to pull in more from Southeastern Wisconsin this quarter. And the pipelines, as I've said, are really at a very high level, and we would expect to continue to do what we thought, or what we've said before, as far as net loan growth.

And we will continue to push out 6s -- 5s, 6s and 7s. I can't give you the exact amount because we are working with them. And -- but to me, it's just the right time to do that. Why? It's just playing the game of chicken if you hang on to them, especially when there's banks out there that, as I said, need anything right now. And it's kind of fun to watch some of the logic that's being employed to get these loans booked on some of these other banks. You just shake your head and go, what the hell. But I would imagine that we will continue to push these things out. But net-net, I think Dave's right, $250 million to $350 million is a good solid number for us just to think about, and especially with pipelines where they are at year end, it's kind of always a pretty good push for us seasonally speaking. And then, January and February, we all go into hibernation. So I think there's a big push to get everything we can done before year end and continue to repopulate the pipeline and take advantage of opportunities. Christopher McGratty - Keefe, Bruyette, & Woods, Inc., Research Division: Great. Just one follow-up on the balance sheet. Dave, the $2.8 billion of kind of securities and cash, given the timing of when everything kind of came over in the quarter, is the expectation for this -- the earnings assets, in terms of securities and cash, to grow a bit in the fourth quarter and then over the early part of '15 deploy them? I'm just trying to get a sense of kind of the balance sheet size.

A lot of that liquidity came in from the Wisconsin branch acquisition. I think we noted in there, that was about $300 million of net liquidity. So that's deposit plus loans that we took. And so, as we bring some of those loans in from Southeastern Wisconsin and get the pull-through on the rest of the portfolio, we'd actually expect to utilize some of that liquidity this quarter. Now we actually have to execute, but we expect to utilize some of that liquidity.

It was good in our past, Chris. We've been able -- these banks that we acquired have been very liquid, and we've been able to utilize that liquidity very, very quickly with our own loan growth. In this situation, we picked up a lot of liquidity, and it will take us probably a quarter to get that absorbed. And that's one reason we don't mind to see some of these higher price fees continue to run out the door. Again, we think we can always get those back. But the optimization of the balance sheet is extremely important. Hopefully, by year end, we'll pick up. I don't know whether we'll close the Delavan deal in the fourth quarter or the first quarter. But again, that will bring some extra liquidity that we hope to lend up. And that what's makes these deals so accretive right now is that we can pick up a very low-cost deposit base and optimize the balance sheet of that -- of the acquired institution in very short order and take the cost saves out in very short order. And they're -- these little deals, $0.03, $0.04, once they're up and running and everything's assimilated, those all add up and these get executed, as Dave said. Christopher McGratty - Keefe, Bruyette, & Woods, Inc., Research Division: Understood. One last one, Dave, on M&A. You guys are still doing -- still looking at some of the smaller stuff. Are there more -- how do you characterize kind of the M&A environment in Chicago? Are there more -- with Chicago and Wisconsin, are there more larger banks being shopped? Any color there will be helpful.

No. We're not seeing many larger -- 5, 6, 7 that are really over $1 billion around here, notwithstanding the 4 -- the bigger institutions, independent bigger institutions. We're not seeing those -- most of the stuff is -- it's the banks under $1 billion that are finding a real hard time to deal not with just the regulatory environment and the costs associated with it, but to generate assets. Everybody's digging a little bit deeper, moving into those areas and buying them. And the frothy market makes it very hard for these smaller banks to generate assets. Especially on the real estate side, where they're heavy already and the regulators don't want them to get heavier. So they're just finding it harder and harder to compete. So the majority of what we're seeing is really under $1 billion right now, and that's it.

The market -- the pipeline for these smaller deals is probably as full as it's been. And we've probably signed 4 NDAs in the last week, so they still continue to flow in. Now as you know, we look at a lot of these deals and we don't close on many. So we are very particular about which ones we'd like to do, but we're happy to do these smaller deals. You just got to find the ones where you can get the right cultural fit and the right pricing, where you can have a meeting of the minds with the sellers. But very, very active right now as far as discussions and due diligence are going.

And our last question comes from Stephen Geyen of D.A. Davidson. Stephen G. Geyen - D.A. Davidson & Co., Research Division: Dave, you mentioned something about the salary and commission, or just salary in general about the mortgage banking. And I just wanted to confirm. In the chart -- the table that you provide on noninterest expense, does it include -- does the salary include both mortgage as kind of a fixed -- or a base comp and then the commission incentive is kind of the variable piece of that pie for the mortgage?

Yes, that'd be correct. Just the commissions are in the commission and incentive comp line. Base salaries are in the salaries. Stephen G. Geyen - D.A. Davidson & Co., Research Division: Got it, got it. Okay. And you mentioned the paydown in loans that were pushed out this quarter. And just curious about the impact of the yield on both the core -- or did that impact the yield on both the core and covered loans?

Yes. Not covered loans. I mean, covered loans -- the $211 million did not include any covered loans that we talked about. That was just out of our portfolio. The covered loan portfolio went down because we had higher pay pools paying down faster -- higher-yielding pools paying down faster. Again, there's 75 pools there. So next quarter, who knows? We could have one of the lower-yielding pools perform better and move it up and down. So that's one. The $211 million was out of our core portfolio. And the yields there, I don't have specific numbers as to how they affected it. But the yields, it was part of that -- probably, I would say, half of that 4-basis-point decrease in the overall yields was probably related to that. So -- because they were -- 5s, 6s or 7s you get better yields on. So it did have an effect on that yield. I don't have specific numbers for it.

And I'm showing no further questions at this time. I'd like to turn it back to Mr. Edward Wehmer for closing comments.

Thanks. Thanks, everybody. Have a great weekend. Look forward to talking to you at year-end, if not before. Thank you.

Ladies and gentlemen, this does conclude today's conference. Thank you for your attendance. You may now disconnect. Everyone, have a great day.