UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-21923

WINTRUST FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Illinois		36-3873352
(State of incorporation or organization)		(I.R.S. Employer Identification No.)

727 North Bank Lane
Lake Forest, Illinois 60045

(Address of principal executive offices)

(847) 615-4096

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   þ    No   o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   o    No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   o    No   þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock — no par value, 31,075,534 shares, as of May 6, 2010

 

 

TABLE OF CONTENTS

				Page
		PART I. — FINANCIAL INFORMATION
ITEM 1.		Financial Statements.			1-35
ITEM 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations.			36-76
ITEM 3.		Quantitative and Qualitative Disclosures About Market Risk.			77
ITEM 4.		Controls and Procedures.			78
		PART II. — OTHER INFORMATION
ITEM 1.		Legal Proceedings.		NA
ITEM 1A.		Risk Factors.			78
ITEM 2.		Unregistered Sales of Equity Securities and Use of Proceeds.			78
ITEM 3.		Defaults Upon Senior Securities.		NA
ITEM 4.		Removed and Reserved.		NA
ITEM 5.		Other Information.		NA
ITEM 6.		Exhibits.			78
		Signatures.			79
EX-31.1
EX-31.2
EX-32.1

PART I

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

		(Unaudited)								(Unaudited)
		March 31,				December 31,				March 31,
(In thousands, except share data)		2010				2009				2009
Assets
Cash and due from banks		$	106,501			$	135,133			$	122,207
Federal funds sold and securities purchased under resale agreements			15,393				23,483				98,454
Interest bearing deposits with banks ($114,925 restricted for securitization investors at March 31, 2010)			1,222,323				1,025,663				266,512
Available-for-sale securities, at fair value			1,279,920				1,328,815				1,413,576
Trading account securities			39,938				33,774				13,815
Brokerage customer receivables			20,978				20,871				15,850
Loans held-for-sale, at fair value			149,897				265,786				207,107
Loans held-for-sale, at lower of cost or market			6,152				9,929				11,600
Loans, net of unearned income			9,070,562				8,411,771				7,841,447
Less: Allowance for loan losses			102,397				98,277				74,248
Net loans ($565,185 restricted for securitization investors at March 31, 2010)			8,968,165				8,313,494				7,767,199
Premises and equipment, net			348,182				350,345				349,245
Accrued interest receivable and other assets			363,676				416,678				263,145
Trade date securities receivable			27,850				—				—
Goodwill			278,025				278,025				276,310
Other intangible assets			12,978				13,624				13,921
Total assets		$	12,839,978			$	12,215,620			$	10,818,941
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing		$	871,830			$	864,306			$	745,194
Interest bearing			8,853,040				9,052,768				7,880,783
Total deposits			9,724,870				9,917,074				8,625,977
Notes payable			1,000				1,000				1,000
Federal Home Loan Bank advances			421,775				430,987				435,981
Other borrowings			218,079				247,437				250,488
Secured borrowings — owed to securitization investors			600,000				—				—
Subordinated notes			60,000				60,000				70,000
Junior subordinated debentures			249,493				249,493				249,502
Trade date securities payable			62,017				—				7,170
Accrued interest payable and other liabilities			137,912				170,990				115,596
Total liabilities			11,475,146				11,076,981				9,755,714
Shareholders’ equity:
Preferred stock, no par value; 20,000,000 shares authorized:
Series A — $1,000 liquidation value; 50,000 shares issued and outstanding at March 31, 2010, December 31, 2009 and March 31, 2009			49,379				49,379				49,379
Series B — $1,000 liquidation value; 250,000 shares issued and outstanding at March 31, 2010 and December 31, 2009 and March 31, 2009			236,263				235,445				233,283
Common stock, no par value; $1.00 stated value; 60,000,000 shares authorized; 31,044,449, 27,079,308 and 26,765,963 shares issued at March 31, 2010, December 31, 2009 and March 31, 2009, respectively			31,044				27,079				26,766
Surplus			677,090				589,939				575,166
Treasury stock, at cost, no shares at March 31, 2010 and 2,872,489 shares at December 31, 2009 and 2,854,980 shares at March 31, 2009			—				(122,733	)			(122,302	)
Retained earnings			373,903				366,152				315,855
Accumulated other comprehensive loss			(2,847	)			(6,622	)			(14,920	)
Total shareholders’ equity			1,364,832				1,138,639				1,063,227
Total liabilities and shareholders’ equity		$	12,839,978			$	12,215,620			$	10,818,941

See accompanying notes to unaudited consolidated financial statements

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

		Three Months Ended
		March 31,
(In thousands, except per share data)		2010				2009
Interest income
Interest and fees on loans		$	129,542			$	106,887
Interest bearing deposits with banks			1,274				660
Federal funds sold and securities purchased under resale agreements			49				61
Securities			11,471				14,327
Trading account securities			21				24
Brokerage customer receivables			139				120
Total interest income			142,496				122,079
Interest expense
Interest on deposits			33,212				45,953
Interest on Federal Home Loan Bank advances			4,346				4,453
Interest on notes payable and other borrowings			1,462				1,870
Interest on secured borrowings — owed to securitization investors			2,995				—
Interest on subordinated notes			241				580
Interest on junior subordinated debentures			4,375				4,441
Total interest expense			46,631				57,297
Net interest income			95,865				64,782
Provision for credit losses			29,044				14,473
Net interest income after provision for credit losses			66,821				50,309
Non-interest income
Wealth management			8,667				5,926
Mortgage banking			9,727				16,232
Service charges on deposit accounts			3,332				2,970
Gain on sales of premium finance receivables			—				322
Gains (losses) on available-for-sale securities, net			392				(2,038	)
Gain on bargain purchase			10,894				—
Trading income			5,973				8,744
Other			3,622				4,271
Total non-interest income			42,607				36,427
Non-interest expense
Salaries and employee benefits			49,072				44,820
Equipment			3,896				3,938
Occupancy, net			6,230				6,190
Data processing			3,407				3,136
Advertising and marketing			1,314				1,095
Professional fees			3,107				2,883
Amortization of other intangible assets			645				687
FDIC insurance			3,809				3,013
OREO expense, net			1,337				2,356
Other			11,121				8,844
Total non-interest expense			83,938				76,962
Income before taxes			25,490				9,774
Income tax expense			9,473				3,416
Net income		$	16,017			$	6,358
Preferred stock dividends and discount accretion			4,943				5,000
Net income applicable to common shares		$	11,074			$	1,358
Net income per common share — Basic		$	0.43			$	0.06
Net income per common share — Diluted		$	0.41			$	0.06
Cash dividends declared per common share		$	0.09			$	0.18
Weighted average common shares outstanding			25,942				23,855
Dilutive potential common shares			1,139				221
Average common shares and dilutive common shares			27,081				24,076

See accompanying notes to unaudited consolidated financial statements.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

																						Accumulated
																						other				Total
		Preferred				Common								Treasury				Retained				comprehensive				shareholders’
(In thousands)		stock				stock				Surplus				stock				earnings				income (loss)				equity
Balance at December 31, 2008		$	281,873			$	26,611			$	571,887			$	(122,290	)		$	318,793			$	(10,302	)		$	1,066,572
Comprehensive income:
Net income			—				—				—				—				6,358				—				6,358
Other comprehensive income, net of tax:
Unrealized gains on securities, net of reclassification adjustment			—				—				—				—				—				(5,694	)			(5,694	)
Unrealized gains on derivative Instruments			—				—				—				—				—				1,076				1,076
Comprehensive income																											1,740
Cash dividends declared on common stock			—				—				—				—				(4,296	)			—				(4,296	)
Dividends on preferred stock			—				—				—				—				(4,211	)			—				(4,211	)
Accretion on preferred stock			789				—				—				—				(789	)			—				—
Common stock repurchases			—				—				—				(12	)			—				—				(12	)
Stock-based compensation			—				—				1,772				—				—				—				1,772
Common stock issued for:
Exercise of stock options and warrants			—				46				575				—				—				—				621
Restricted stock awards			—				60				(705	)			—				—				—				(645	)
Director compensation plan			—				49				1,637				—				—				—				1,686
Balance at March 31, 2009		$	282,662			$	26,766			$	575,166			$	(122,302	)		$	315,855			$	(14,920	)		$	1,063,227
Balance at December 31, 2009		$	284,824			$	27,079			$	589,939			$	(122,733	)		$	366,152			$	(6,622	)		$	1,138,639
Comprehensive income:
Net income			—				—				—				—				16,017				—				16,017
Other comprehensive income, net of tax:
Unrealized gains on securities, net of reclassification adjustment			—				—				—				—				—				4,095				4,095
Unrealized gains on derivative instruments			—				—				—				—				—				(164	)			(164	)
Comprehensive income																											19,948
Cash dividends declared on common stock			—				—				—				—				(2,191	)			—				(2,191	)
Dividends on preferred stock			—				—				—				—				(4,125	)			—				(4,125	)
Accretion on preferred stock			818				—				—				—				(818	)			—				—
Common stock repurchases			—				—				—				(98	)			—				—				(98	)
Stock-based compensation			—				—				1,414				—				—				—				1,414
Cumulative effect of change in accounting for loan securitizations			—				—				—				—				(1,132	)			(156	)			(1,288	)
Common stock issued for:
New issuance, net of costs			—				3,795				83,919				122,831				—				—				210,545
Exercise of stock options and warrants			—				78				1,621				—				—				—				1,699
Restricted stock awards			—				31				(237	)			—				—				—				(206	)
Employee stock purchase plan			—				13				482				—				—				—				495
Director compensation plan			—				48				(48	)			—				—				—				—
Balance at March 31, 2010		$	285,642			$	31,044			$	677,090			$	—			$	373,903			$	(2,847	)		$	1,364,832

		Three Months Ended March 31,
Other Comprehensive Income (Loss):		2010				2009
Unrealized gains (losses) on available-for-sale securities arising during the period, net		$	6,798			$	(11,314	)
Unrealized (losses) gains on derivative instruments arising during the period, net			(267	)			1,751
Less: Reclassification adjustment for gains (losses) included in net income, net			392				(2,038	)
Less: Income tax expense (benefit)			2,364				(2,907	)
Other Comprehensive Income (Loss)		$	3,775			$	(4,618	)

See accompanying notes to unaudited consolidated financial statements.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Three Months Ended
		March 31,
(In thousands)		2010				2009
Operating Activities:
Net income		$	16,017			$	6,358
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for credit losses			29,044				14,473
Depreciation and amortization			5,130				5,109
Stock-based compensation expense			1,414				1,772
Tax (expense) benefit from stock-based compensation arrangements			396				(576	)
Excess tax benefits from stock-based compensation arrangements		(570		)			(68	)
Net amortization (accretion) of premium on securities			413				(158	)
Mortgage servicing rights fair value change and amortization, net			538				1,659
Originations and purchases of loans held-for-sale			(686,679	)			(1,245,129	)
Proceeds from sales of mortgage loans held-for-sale			816,427				1,099,747
Bank owned life insurance income, net of claims			(623	)			(286	)
Gain on sales of premium finance receivables			—				(322	)
Increase in trading securities, net			(6,164	)			(9,416	)
Net (increase) decrease in brokerage customer receivables			(107	)			2,051
Gain on mortgage loans sold			(10,081	)			(12,209	)
(Gain) loss on available-for-sale securities, net			(392	)			2,038
Gain on bargain purchase			(10,894	)			—
Loss on sales of premises and equipment, net			—				11
Decrease in accrued interest receivable and other assets, net			31,080				490
Decrease in accrued interest payable and other liabilities, net			(23,813	)			(2,004	)
Net Cash Provided by (Used for) Operating Activities			161,136				(136,460	)
Investing Activities:
Proceeds from maturities of available-for-sale securities			364,778				665,932
Proceeds from sales of available-for-sale securities			184,515				992,398
Purchases of available-for-sale securities			(507,544	)			(1,504,650	)
Net increase in interest-bearing deposits with banks			(81,735	)			(143,503	)
Net increase in loans			(131,153	)			(251,507	)
Purchases of premises and equipment, net			(2,148	)			(3,766	)
Net Cash Used for Investing Activities			(173,287	)			(245,096	)
Financing Activities:
(Decrease) increase in deposit accounts			(192,207	)			249,221
Decrease in other borrowings, net			(29,358	)			(86,276	)
Decrease in Federal Home Loan Bank advances, net			(9,300	)			—
Issuance of common stock, net of issuance costs			210,545				—
Excess tax benefits from stock-based compensation arrangements		570					68
Issuance of common shares resulting from exercise of stock options, employee stock purchase plan and conversion of common stock warrants			1,593				553
Common stock repurchases			(98	)			(12	)
Dividends paid			(6,316	)			(7,241	)
Net Cash (Used for) Provided by Financing Activities			(24,571	)			156,313
Net Decrease in Cash and Cash Equivalents			(36,722	)			(225,243	)
Cash and Cash Equivalents at Beginning of Period			158,616				445,904
Cash and Cash Equivalents at End of Period		$	121,894			$	220,661

See accompanying notes to unaudited consolidated financial statements.

WINTRUST FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation

The consolidated financial statements of Wintrust Financial Corporation and Subsidiaries (“Wintrust” or “the Company”) presented herein are unaudited, but in the opinion of management reflect all necessary adjustments of a normal or recurring nature for a fair presentation of results as of the dates and for the periods covered by the consolidated financial statements.

The accompanying consolidated financial statements are unaudited and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations or cash flows in accordance with generally accepted accounting principles. The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report and Form 10-K for the year ended December 31, 2009 (“2009 Form 10-K”). Operating results reported for the three-month period are not necessarily indicative of the results which may be expected for the entire year. Reclassifications of certain prior period amounts have been made to conform to the current period presentation.

The preparation of the financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities. Management believes that the estimates made are reasonable, however, changes in estimates may be required if economic or other conditions develop differently from management’s expectations. Certain policies and accounting principles inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Management views critical accounting policies to be those which are highly dependent on subjective or complex judgments, estimates and assumptions, and where changes in those estimates and assumptions could have a significant impact on the financial statements. Management currently views the determination of the allowance for loan losses and the allowance for losses on lending-related commitments, estimations of fair value, the valuations required for impairment testing of goodwill, the valuation and accounting for derivative instruments and income taxes as the accounting areas that require the most subjective and complex judgments, and as such could be the most subject to revision as new information becomes available. Descriptions of our significant accounting policies are included in Note 1 (Summary of Significant Accounting Policies) of the Company’s 2009 Form 10-K.

(2) Recent Accounting Developments

Accounting Standards Codification

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-01 (formerly FASB No. 168) “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“The Codification”). The Accounting Standards Codification (“ASC”) reorganized existing U.S. accounting and reporting standards issued by the FASB and other related private sector standard setters into a single source of authoritative accounting principles arranged by topic. The Codification superseded all existing U.S. accounting standards; all other accounting literature not included in the Codification (other than Securities and Exchange Commission guidance for publicly-traded companies) is considered non-authoritative. The Codification was effective on a prospective basis for interim and annual reporting periods ending after September 15, 2009. The adoption of the Codification changed the Company’s references to U.S. GAAP accounting standards but did not impact the Company’s financial statements.

Accounting for Transfers of Financial Assets and Variable Interest Entities

In December 2009, the FASB issued ASU No. 2009-16, “Transfers and Servicing (Topic 860) — Accounting for Transfers of Financial Assets,” amending the Codification for the issuance of FASB No. 166, “Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140” and ASU No. 2009-17, “Consolidation (Topic 810) — Improvements to Financial Reporting for Enterprises Involved with Variable Interest Entities,” amending the Codification to change how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. This guidance became effective for the Company on January 1, 2010.

ASU No. 2009-16 removed the concept of a qualifying special-purpose entity, changed the requirements for derecognizing financial assets and requires additional disclosures about a transferor’s continuing involvement in transferred financial assets. As a result of this amendment, the Company’s securitization transaction is accounted for as a secured borrowing rather than a sale and the Company’s securitization entity (FIFC Premium Funding, LLC) is no longer exempt from consolidation.

ASU No. 2009-17 requires an ongoing assessment of the Company’s involvement in the activities of Variable Interest Entities (“VIE’s”) and the Company’s rights or obligations to receive benefits or absorb losses that could be potentially significant in order to determine whether those VIE’s will be required to be consolidated in the Company’s financial statements. In accordance with this amendment, the Company concluded that it is the primary beneficiary of the Company’s securitization entity and began consolidating this entity on January 1, 2010. The impact of consolidating the Company’s securitization entity on January 1, 2010 resulted in a $587.1 million net increase in total assets, a $588.4 million net increase in total liabilities and a $1.3 million net decrease in stockholder’s equity (comprised of a $1.1 million decrease in retained earnings and a $200,000 decrease in accumulated other comprehensive income).

The assets of the consolidated securitization entity includes interest bearing deposits and premium finance receivables—commercial, which are restricted to settle the obligations of the securitization entity. Liabilities of the securitization entity include secured borrowings for which creditors or beneficial interest holders do not have recourse to the general credit of the Company.

The Company’s statement of income beginning with the three months ended March 31, 2010 no longer reflects securitization income, but instead reports interest income, net charge-offs and certain other income associated with the securitized loan receivables in the same line items in the Company’s statement of income as non-securitized premium finance receivables-commercial. Additionally, the Company no longer records initial gains on new securitization activity since the transferred loans no longer receive sale accounting treatment. Also, there are no gains or losses recorded on the revaluation of the interest-only strip receivable as that asset is not recognizable in a transaction accounted for as a secured borrowing.

The Company’s financial statements have not been retrospectively adjusted to reflect the adjustments to ASC 860. Therefore, current period results and balances may not be comparable to prior period amounts.

Subsequent Events

In February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements,” which amends certain provisions of the current guidance, including the elimination of the requirement for disclosure of the date through which an evaluation of subsequent events was performed in issued and revised financial statements. This guidance was effective for interim and annual financial periods ending after February 24, 2010, and has been applied with no material impact on the Company’s financial statements. See Note 18 — Subsequent Events, for disclosures relating to subsequent events.

Disclosures about Fair Value of Financial Instruments

In January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements,” which amends the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance became effective for the Company with the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for the Company with the reporting period beginning January 1, 2011. Other than requiring additional disclosures, the adoption of this new guidance did not have a material impact on our consolidated financial statements. See Note 15 — Fair Value of Assets and Liabilities.

In April 2009, the FASB issued new guidance related to the disclosure of the fair value of financial instruments. The new guidance, which is now part of ASC 825, “Financial Instruments”, requires disclosure of the fair value of financial instruments whenever a publicly traded company issues financial information in interim reporting periods in addition to the annual disclosure required at year-end. The provisions of the new guidance were effective for interim periods ending after June 15, 2009. The Company adopted the new guidance in the second quarter of 2009. See Note 5 — Available-for-sale Securities, for the required disclosures in accordance with this guidance.

Other-Than-Temporary Impairments

In April 2009, the FASB issued new guidance for the accounting for other-than temporary impairments. The new guidance, which is now part of ASC 320 “Investments — Debt and Equity Securities” (“ASC 320”), amended the other-than-temporary impairment (“OTTI”) guidance in GAAP for debt securities and the presentation and disclosure requirements of OTTI on debt and equity securities in the financial statements. This new guidance does not amend existing recognition and measurement guidance related to OTTI of equity securities. The new guidance requires separate display of losses related to credit deterioration and losses related to other market factors. When an entity does not intend to sell the security and it is more likely than not that an entity will not have to sell the security before recovery of its cost basis, it must recognize the credit component of OTTI in earnings and the remaining portion in other comprehensive income. The new guidance was effective for interim reporting periods ending after June 15, 2009, with early adoption permitted. The Company adopted the new guidance in the second quarter of 2009. See Note 5 — Available-for-sale Securities, for a further discussion on the adoption of the new guidance.

Additional Fair Value Measurement Guidance

In April 2009, the FASB issued new guidance for determining when a transaction is not orderly and for estimating fair value when there has been a significant decrease in the volume and level of activity for an asset or liability. The new guidance, which is now part of ASC 820, “Fair Value Measurements and Disclosures” (ASC 820), requires disclosure of the inputs and valuation techniques used, as well as any changes in valuation techniques and inputs used during the period, to measure fair value in interim and annual periods. In addition, the presentation of the fair value hierarchy is required to be presented by major security type as described in ASC 320. The provisions of the new guidance were effective for interim periods ending after June 15, 2009. The adoption of the new guidance in the second quarter of 2009 did not have a material effect on the Company’s financial statements.

Derivative Instruments and Hedging Activities

In March 2008, the FASB issued new guidance on the disclosure of derivative instruments and hedging activities. The new guidance, which is now a part of ASC 815, “Derivatives and Hedging Activities”, requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of, and gains and losses on, derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The provisions of the new guidance were effective for financial statements issued for fiscal years beginning after November 15, 2008. See Note 14 — Derivative Financial Instruments, for the required disclosures in accordance with this new guidance.

Noncontrolling Interests in Consolidated Financial Statements

In December 2007, the FASB issued new guidance for the accounting for noncontrolling interests. The new guidance, which is now part of ASC 810, “Consolidation”, establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance was effective for fiscal years beginning after December 15, 2008. The adoption of the new guidance did not have a material impact on the Company’s financial statements.

Business Combinations

In April 2009, the FASB issued revised guidance for recognizing and measuring pre-acquisition contingencies in a business combination. The revised guidance, which is now part of ASC 805, “Business Combinations”, revises the definition of a business and amends and clarifies prior guidance to address application issues on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. The revised guidance is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008. The adoption of the revised guidance did not have a material impact on the Company’s financial statements.

In December 2007, the FASB issued revised guidance for the accounting for business combinations. The revised guidance, which is now part of ASC 805, “Business Combinations” (ASC 805), requires the acquiring entity in a business combination to recognize the full fair value of the assets acquired and liabilities assumed in a transaction at the acquisition date; the immediate expense recognition of transaction costs; and accounting for restructuring plans separately from the business combination. The application of ASC 805 eliminates separate recognition of the acquired allowance for loan losses on the acquirer’s balance sheet as credit related factors will be incorporated directly into the fair value of the loans recorded at the acquisition date. The application of ASC 805 was effective for business combinations occurring after December 15, 2008. The Company applied ASC 805 to its July 28, 2009 acquisition of a portfolio of life insurance premium finance assets. See Note 3 — Business Combinations, for more information on ASC 805.

(3) Business Combinations

On July 28, 2009, FIFC, a wholly-owned subsidiary of the Company, purchased the majority of the U.S. life insurance premium finance assets of A.I. Credit Corp. and A.I. Credit Consumer Discount Company (“the sellers”), subsidiaries of American International Group, Inc. After giving effect to post-closing adjustments, an aggregate unpaid loan balance of $949.3 million was purchased for $685.3 million in cash. At closing, a portion of the portfolio, with an aggregate unpaid loan balance of $321.1 million, and a corresponding portion of the purchase price of $232.8 million were placed in escrow, pending the receipt of required third party consents. During the first quarter of 2010, based upon receipt of consents, the escrow was terminated and remaining funds released to the sellers and FIFC.

Also, as a part of the purchase, $84.4 million of additional life insurance premium finance assets were available for future purchase by FIFC subject to the satisfaction of certain conditions. On October 2, 2009, the conditions were satisfied in relation to the majority of the additional life insurance premium finance assets and FIFC purchased $83.4 million of the $84.4 million of life insurance premium finance assets available for an aggregate purchase price of $60.5 million in cash.

Both purchases were accounted for as a single business combination under the acquisition method of accounting as required by applicable accounting guidance. Accordingly, the impact related to this transaction is included in the Company’s financial statements only since the effective date of acquisition. The purchased assets and assumed liabilities were recorded at their respective acquisition date fair values, and identifiable intangible assets were recorded at fair value. Under ASC 805 a gain is recorded equal to the amount by which the fair value of assets purchased exceeded the fair value of liabilities assumed and consideration paid. As such, the Company recognized a $10.9 million bargain purchase gain in the first quarter of 2010, a $43.0 million bargain purchase gain in the fourth quarter of 2009 and a $113.1 million bargain purchase gain in the third quarter of 2009, relating to the loans acquired for which all contingencies were removed. As of March 31, 2010, the full amount of the bargain purchase gain has been recognized into income. This gain is shown as a component of non-interest income on the Company’s Consolidated Statement of Income.

The difference between the fair value of the loans acquired and the outstanding principal balance of these loans at the date of purchase represented a discount of $121.8 million and is comprised of two components, an accretable component totaling $80.5 million and a non-accretable component totaling $41.3 million. The accretable component is being recognized into interest income using the effective yield method over the estimated remaining life of the loans. The non-accretable portion will be evaluated each quarter and if the loans’ credit related conditions improve, a portion will be transferred to the accretable component and accreted over future periods. In the event a specific loan prepays in whole, any remaining accretable and non-accretable discount is recognized in income immediately. If credit related conditions deteriorate, an allowance related to these loans will be established as part of the provision for credit losses. See Note 4 — Loans, for more information on loans acquired with evidence of credit quality deterioration since origination.

The following table summarizes the fair value of assets acquired and the resulting bargain purchase gain at the date of acquisition:

(Dollars in thousands)
Assets:
Loans		$	910,873
Customer list intangible			1,800
Other assets			150
Total assets			912,823
Cash Paid			745,916
Total bargain purchase gain recognized		$	166,907

Calculation of the Fair Value of Loans Acquired

The Company determined the fair value of the loans acquired with the assistance of an independent third party valuation firm which utilized a discounted cash flow analysis to estimate the fair value of the loan portfolio. Primary factors impacting the estimated cash flows in the valuation model were certain income and expense items and changes in the estimated future balances of loans. The significant assumptions used in calculating the fair value of the loans acquired included estimating interest income, loan losses, servicing costs, costs of funding, and life of the loans.

Interest income on variable rate loans within the loan portfolio was determined based on the weighted average interest rate spread plus the contractual Libor rate. Interest income on fixed rate loans was based on the actual weighted average interest rate of the fixed rate loan portfolio.

Loan losses were estimated by first estimating the loan losses which would result from default by either the insurance carrier or the insured and, second, estimating the probability of default for both the insurance carrier and the insured.

Estimated losses upon default by the insurance carrier were estimated by assigning realization rates to each type of collateral underlying the loan portfolio. Realization rates on collateral after default by the insurance carrier were estimated for each type of collateral. Unsecured portions of the collateral were also assigned a loss rate.

Estimated losses upon default by the insured were similar to the estimated loss rates calculated upon default by the insurance carrier.

The probability of default of the insurance carrier was determined by assigning each insurance carrier holding collateral underlying the portfolio a default rate from a national rating agency and a study of historical cumulative default rates prepared by such agency.

The probability of default by individuals was estimated based upon consideration of the financial and demographic characteristics of the insured and the economic uncertainty present at the valuation date.

The estimated life of the loans was based on expected required fundings of life insurance premiums and the expected life of the insured based on the age of the insured and survival curves.

(4) Cash and Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, the Company considers cash and cash equivalents to include cash on hand, cash items in the process of collection, non-interest bearing amounts due from correspondent banks, federal funds sold and securities purchased under resale agreements with original maturities of three months or less.

(5)Available-for-sale Securities

The following tables are a summary of the available-for-sale securities portfolio as of the dates shown:

		March 31, 2010
						Gross				Gross
		Amortized				unrealized				unrealized				Fair
(Dollars in thousands)		cost				gains				losses				value
U.S. Treasury		$	121,026			$	—			$	(10,149	)		$	110,877
U.S. Government agencies			558,600				1,002				(1,464	)			558,138
Municipal			59,775				1,714				(66	)			61,423
Corporate notes and other:
Financial issuers (1)			40,366				1,287				(2,025	)			39,628
Other			38,698				1,224				(118	)			39,804
Mortgage-backed: (2)
Agency			194,010				11,683				—				205,693
Non-agency CMOs			97,445				7,436				—				104,881
Non-agency CMOs — Alt A			49,186				1,175				(502	)			49,859
Federal Reserve and FHLB stock			74,002				—				—				74,002
Other equity securities			35,509				106				—				35,615
Total available-for-sale securities		$	1,268,617			$	25,627			$	(14,324	)		$	1,279,920

		December 31, 2009
						Gross				Gross
		Amortized				unrealized				unrealized				Fair
(Dollars in thousands)		cost				gains				losses				value
U.S. Treasury		$	121,310			$	—			$	(10,494	)		$	110,816
U.S. Government agencies			579,249				550				(3,623	)			576,176
Municipal			63,344				2,195				(203	)			65,336
Corporate notes and other debt
Financial issuers (1)			42,241				1,518				(2,013	)			41,746
Retained subordinated securities			47,448				254				—				47,702
Other			—				—				—				—
Mortgage-backed (2)
Agency			205,257				11,287				—				216,544
Non-agency CMOs			102,045				6,133				(194	)			107,984
Non-agency CMOs — Alt A			51,306				1,025				(1,553	)			50,778
Federal Reserve/FHLB stock			73,749				—				—				73,749
Other equity securities			37,969				15				—				37,984
Total available-for-sale securities		$	1,323,918			$	22,977			$	(18,080	)		$	1,328,815

The following tables present the portion of the Company’s available-for-sale securities portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position at March 31, 2010:

		Continuous unrealized								Continuous unrealized
		losses existing for								losses existing for
		less than 12 months								greater than 12 months								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(Dollars in thousands)		value				losses				value				losses				value				losses
U.S. Treasury		$	—				—				110,877				(10,149	)			110,877				(10,149	)
U.S. Government agencies			171,073				(542	)			51,732				(922	)			222,805				(1,464	)
Municipal			215				(1	)			2,014				(65	)			2,229				(66	)
Corporate notes and other:
Financial issuers			18,253				(149	)			4,063				(1,876	)			22,316				(2,025	)
Other			20,163				(118	)			—				—				20,163				(118	)
Mortgage-backed:
Non-agency CMOs — Alt A			32,133				(502	)			—				—				32,133				(502	)
Total		$	241,837				(1,312	)			168,686				(13,012	)			410,523				(14,324	)

The Company conducts a regular assessment of its investment securities to determine whether securities are other-than-temporarily impaired considering, among other factors, the nature of the securities, credit ratings or financial condition of the issuer, the extent and duration of the unrealized loss, expected cash flows, market conditions and the Company’s ability to hold the securities through the anticipated recovery period.

The Company does not consider securities with unrealized losses at March 31, 2010 to be other-than-temporarily impaired. The Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost bases, which may be the maturity dates of the securities. The unrealized losses within each category have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase. Securities with continuous unrealized losses existing for more than twelve months were primarily U.S. Treasury securities and corporate securities of financial issuers. The corporate securities of financial issuers in this category were comprised of three trust-preferred securities with high investment grades. These obligations have interest rates significantly below the rates at which these types of obligations are currently issued, and have maturity dates in 2027 and 2031. Although they are currently callable by the issuers, it is unlikely that they will be called in the near future as the interest rates are very attractive to the issuers. A review of the issuers indicated that they have recently raised equity capital and/or have strong capital ratios. The Company does not own any pooled trust-preferred securities.

Effective April 1, 2009, the Company adopted new guidance for the measurement and recognition of other than temporary impairment for debt securities, which is now part of ASC 320. The new guidance provides that if an entity does not intend to sell, and it is more likely than not that the entity will not be required to sell a debt security before recovery of its cost basis, impairment should be separated into (a) the amount representing credit loss and (b) the amount related to all other factors. The amount of impairment related to credit loss is recognized in earnings and the impairment related to other factors is recognized in other comprehensive income (loss). To determine the amount related to credit loss, the Company applies a method similar to that described by ASC 310, using a single best estimate of expected cash flows. The Company’s adoption of this guidance for the measurement and changes in the amount of credit losses recognized in net income on these corporate debt securities are summarized as follows (in thousands):

		Three Months Ended
		March 31, 2010
Balance at December 31, 2009		$	(472	)
Credit losses recognized			—
Reductions for securities sold during the period			—
Balance at end of period		$	(472	)

During the first quarter of 2009, the Company recorded $2.1 million of other than temporary impairment on certain corporate debt securities. The following table provides information as to the amount of gross gains and gross losses realized and proceeds received through the sales of available-for-sale investment securities (in thousands):

		Three Months Ended March 31
		2010				2009
Realized gains		$	507				112
Realized losses			(115	)			(15	)
Net realized gains		$	392				97
Other than temporary impairment charges			—				2,135
(Losses) gains on available- for-sale securities, net		$	392				(2,038	)
Proceeds from sales of available-for-sale securities		$	184,515				992,398

The amortized cost and fair value of securities as of March 31, 2010 and December 31, 2009, by contractual maturity, are shown in the following table. Contractual maturities may differ from actual maturities as borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Mortgage-backed securities are not included in the maturity categories in the following maturity summary as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties (in thousands):

		March 31, 2010								December 31, 2009
		Amortized				Fair				Amortized				Fair
		cost				value				cost				value
Due in one year or less		$	149,128				149,202				111,380				111,860
Due in one to five years			251,153				251,750				221,294				222,152
Due in five to ten years			265,272				256,913				328,914				318,796
Due after ten years			152,912				152,005				192,004				188,968
Mortgage-backed			340,641				360,433				358,608				375,306
Federal Reserve/FHLB Stock			74,002				74,002				73,749				73,749
Other equity			35,509				35,615				37,969				37,984
Total available-for-sale securities		$	1,268,617				1,279,920				1,323,918				1,328,815

At March 31, 2010 and December 31, 2009, securities having a carrying value of $853 million and $865 million, respectively, which include securities traded but not yet settled, were pledged as collateral for public deposits, trust deposits, FHLB advances, securities sold under repurchase agreements and derivatives. At March 31, 2010, there were no securities of a single issuer, other than U.S. Government-sponsored agency securities, which exceeded 10% of shareholders’ equity.

(6) Loans

The following table shows the Company’s loan portfolio by category as of March 31, 2010, December 31, 2009 and March 31, 2009:

		March 31,				December 31,				March 31,
(Dollars in thousands)		2010				2009				2009
Balance:
Commercial and commercial real estate		$	5,083,052			$	5,039,906			$	4,933,355
Home equity			924,993				930,482				920,412
Residential real estate			322,984				306,296				280,808
Premium finance receivables — commercial			1,317,822				730,144				1,287,261
Premium finance receivables — life insurance			1,233,573				1,197,893				130,895
Indirect consumer loans			83,136				98,134				154,257
Other loans			105,002				108,916				134,459
Total loans, net of unearned income		$	9,070,562			$	8,411,771			$	7,841,447
Mix:
Commercial and commercial real estate			56	%			60	%			63	%
Home equity			10				11				12
Residential real estate			4				4				4
Premium finance receivables — commercial			14				9				16
Premium finance receivables — life insurance			14				14				2
Indirect consumer loans			1				1				2
Other loans			1				1				1
Total loans, net of unearned income			100	%			100	%			100	%

Certain premium finance receivables are recorded net of unearned income. The unearned income portions of such premium finance receivables were $37.1 million at March 31, 2010, $31.8 million at December 31, 2009 and $28.8 million at March 31, 2009. Certain life insurance premium finance receivables are also recorded net of credit discounts attributable to the life insurance premium finance loan acquisition in the third and fourth quarters of 2009. See “Acquired Loan Information at Acquisition”, below. The $587.7 million increase in commercial premium finance receivables at March 31, 2010 compared to December 31, 2009 is primarily due to the third quarter 2009 securitization transaction that is now accounted for as a secured borrowing.

Indirect consumer loans include auto, boat and other indirect consumer loans. Total loans, excluding loans acquired with evidence of credit quality deterioration since origination, include net deferred loan fees and costs and fair value purchase accounting adjustments totaling $11.9 million at March 31, 2010, $10.7 million at December 31, 2009 and $9.6 million at March 31, 2009.

The Company’s loan portfolio is generally comprised of loans to consumers and small to medium-sized businesses located within the geographic market areas that the Banks serve. The premium finance receivables portfolios are made to customers on a national basis and the majority of the indirect consumer loans were generated through a network of local automobile dealers. As a result, the Company strives to maintain a loan portfolio that is diverse in terms of loan type, industry, borrower and geographic concentrations. Such diversification reduces the exposure to economic downturns that may occur in different segments of the economy or in different industries.

It is the policy of the Company to review each prospective credit in order to determine the appropriateness and, when required, the adequacy of security or collateral necessary to obtain when making a loan. The type of collateral, when required, will vary from liquid assets to real estate. The Company seeks to assure access to collateral, in the event of default, through adherence to state lending laws and the Company’s credit monitoring procedures.

Acquired Loan Information at Acquisition — Loans with evidence of credit quality deterioration since origination

As part of our acquisition of a portfolio of life insurance premium finance loans in 2009, we acquired loans for which there was evidence of credit quality deterioration since origination and we determined that it was probable that the Company would be unable to collect all contractually required principal and interest payments. These loans had an unpaid principal balance of $1.0 billion and a carrying value of $896.3 million at acquisition. At March 31, 2010, the unpaid principal balance and carrying value of these loans were $959.0 million and $867.0 million, respectively.

The following table provides details on these loans at acquisition:

(Dollars in thousands)
Contractually required payments including interest		$	1,032,714
Less: Nonaccretable difference			41,281
Cash flows expected to be collected (1)			991,433
Less: Accretable yield			80,560
Fair value of loans acquired with evidence of credit quality deterioration since origination		$	910,873

The allowance for loan losses associated with this portfolio of loans was $607,000 at March 31, 2010 and $615,000 at December 31, 2009. This allowance represents deterioration to the portfolio subsequent to acquisition.

Accretable Yield Activity

The following table provides activity for the accretable yield of these loans:

		Three
		Months
		Ended
		March 31,
(Dollars in thousands)		2010
Accretable yield, balance at 12/31/09		$	65,026
Accretable yield amortized to interest income			(9,134	)
Reclassification from the non-accretable difference (1)			2,289
Reclassification to the non-accretable difference (2)			(144)
Accretable yield, balance at 3/31/10		$	58,037

(7) Allowance for Loan Losses, Allowance for Losses on Lending-Related Commitments and Impaired Loans

The following table presents a summary of the activity in the allowance for credit losses for the periods presented:

		Three Months Ended
		March 31,
(Dollars in thousands)		2010				2009
Allowance for loan losses at beginning of period		$	98,277			$	69,767
Provision for credit losses			29,044				14,473
Other adjustments — allowance for loan losses related to consolidation of securitization entity			1,943				—
Reclassification to allowance for losses on lending-related commitments			(99	)			—
Charge-offs			(27,992	)			(10,386	)
Recoveries			1,224				394
Allowance for loan losses at period end		$	102,397			$	74,248
Allowance for losses on lending-related commitments at period end			3,653				1,586
Allowance for credit losses at period end		$	106,050			$	75,834

A summary of non-accrual, impaired loans and loans past due greater than 90 days and still accruing interest are as follows:

		March 31,				December 31,				March 31,
(Dollars in thousands)		2010				2009				2009
Non-performing loans:
Loans past due greater than 90 days and still accruing interest		$	14,830			$	7,800			$	16,482
Non-accrual loans			126,130				124,004				159,384
Total non-performing loans		$	140,960			$	131,804			$	175,866
Impaired loans (included in Non-performing loans):
Impaired loans with an allowance for loan loss required (1)		$	68,805			$	58,222			$	101,686
Impaired loans with no allowance for loan loss required			17,123				14,914				12,113
Total impaired loans (included in Non-performing loans)		$	85,928			$	73,136			$	113,799
Allowance for loan losses related to impaired loans		$	17,995			$	17,567			$	23,476
Restructured loans		$	69,381			$	32,432			$	—

The average recorded investment in impaired loans was $79.5 million and $101.7 million for the three months ended March 31, 2010 and 2009, respectively.

(8) Loan Securitization

During the third quarter of 2009, the Company entered into an off-balance sheet revolving period securitization transaction sponsored by FIFC. In connection with the securitization, premium finance receivables — commercial were transferred to FIFC Premium Funding, LLC (the “securitization entity”). Provided that certain coverage test criteria continue to be met, principal collections on loans in the securitization entity are used to subsequently acquire and transfer additional loans into the securitization entity during the stated revolving period. Additionally, upon the occurrence of certain events established in the representations and warranties, FIFC may be required to repurchase ineligible loans that were transferred to the entity. As of March 31, 2010, no loans have been repurchased. The Company’s primary continuing involvement includes servicing the loans, retaining an undivided interest (the “seller’s interest”) in the loans, and holding certain retained interests.

Instruments issued by the securitization entity included $600 million Class A notes that bear an annual interest rate of one-month LIBOR plus 1.45% (the “Notes”) and have an expected average term of 2.93 years with any unpaid balance due and payable in full on February 17, 2014. At the time of issuance, the Notes were eligible collateral under the Federal Reserve Bank of New York’s Term Asset-Backed Securities Loan Facility (“TALF”). Class B and Class C notes (“Subordinated securities”), which are recorded in the form of zero coupon bonds, were also issued and were retained by the Company.

Subsequent to December 31, 2009, this securitization transaction is accounted for as a secured borrowing and the securitization entity is treated as a consolidated subsidiary of the Company under ASC 810 and ASC 860. See Note 2 to the Consolidated Financial Statements for a discussion of changes to the accounting for transfers and servicing of financial assets and consolidation of variable interest entities, including the elimination of qualifying SPEs. Accordingly, beginning on January 1, 2010, all of the assets and liabilities of the securitization entity are included directly on the Company’s Consolidated Statement of Condition. The securitization entity’s receivables underlying third-party investors’ interests are recorded in loans, net of unearned income—restricted for securitization investors, an allowance for loan losses was established and the related debt issued is reported in secured borrowings—owed to securitization investors. Additionally, beginning on January 1, 2010, certain other of the Company’s retained interests in the transaction, principally consisting of subordinated securities, cash collateral, and overcollateralization of loans, now constitute intercompany positions, which are eliminated in the preparation of the Company’s Consolidated Statement of Condition.

Upon transfer of premium finance receivables — commercial to the securitization entity, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the securitization entity’s creditors. The securitization entity has ownership of interest-bearing deposit balances that also have restrictions, the amounts of which are reported in interest-bearing deposits with other banks—restricted for securitization investors. Investment of the interest-bearing deposit balances is limited to investments that are permitted under the governing documents of the transaction. With the exception of the seller’s interest in the transferred receivables, the Company’s interests in the securitization entity’s assets are generally subordinate to the interests of third-party investors and, as such, may not be realized by the Company if needed to absorb deficiencies in cash flows that are allocated to the investors in the securitization entity’s debt.

The carrying values and classification of the restricted assets and liabilities relating to the securitization activities are shown in the table below.

		March 31,
(Dollars in thousands)		2010
Cash collateral accounts		$	1,759
Collections and interest funding accounts			113,166
Interest-bearing deposits with banks — restricted for securitization investors			114,925
Loans, net of unearned income — restricted for securitization investors			567,109
Allowance for loan losses			(1,924	)
Net loans — restricted for securitization investors			565,185
Other assets			1,819
Total assets		$	681,929
Secured borrowings — owed to securitization investors		$	600,000
Other liabilities			3,722
Total liabilities		$	603,722

The assets of the consolidated securitization entity are subject to credit, payment and interest rate risks on the transferred premium finance receivables — commercial. To protect investors, the securitization structure includes certain features that could result in earlier-than-expected repayment of the securities. Investors are allocated cash flows derived from activities related to the accounts comprising the securitized pool of receivables, the amounts of which reflect finance charges collected net of agent fees, certain fee assessments, and recoveries on charged-off accounts. From these cash flows, investors are reimbursed for charge-offs occurring within the securitized pool of receivables and receive the contractual rate of return and FIFC is paid a servicing fee as servicer. Any cash flows remaining in excess of these requirements are reported to investors as net yield and remitted to the Company. A net yield rate of less than 0% for a three month period would trigger an economic early amortization event. In addition to this performance measurement associated with the transferred loans, there are additional performance measurements and other events or conditions which could trigger an early amortization event. In such an event, the Company would be required to seek immediate sources of replacement funding. As of March 31, 2010, no economic or other early amortization events have occurred. Apart from the restricted assets related to securitization activities, the investors and the securitization entity have no recourse to the Company’s other assets or credit for a shortage in cash flows.

The Company continues to service the loan receivables held by the securitization entity. FIFC receives a monthly servicing fee from the securitization entity based on a percentage of the monthly investor principal balance outstanding. Although the fee income to FIFC offsets the fee expense to the securitization entity and thus is eliminated in consolidation, failure to service the transferred loan receivables in accordance with contractual requirements could lead to a termination of the servicing rights and the loss of future servicing income.

(9) Goodwill and Other Intangible Assets

A summary of the Company’s goodwill assets by business segment is presented in the following table:

		January 1,				Goodwill				Impairment				March 31,
(Dollars in thousands)		2010				Acquired				Losses				2010
Community banking		$	247,601			$	—			$	—			$	247,601
Specialty finance			16,095				—				—				16,095
Wealth management			14,329				—				—				14,329
Total		$	278,025			$	—			$	—			$	278,025

No adjustments were made to goodwill in the first three months of 2010. Pursuant to the acquisition of PMP in December 2008, Wintrust may be required to pay contingent consideration to the former owner of PMP as a result of attaining certain performance measures through December 2011. Any contingent payments made pursuant to this transaction would be reflected as increases in the Community banking segment’s goodwill.

A summary of finite-lived intangible assets as of March 31, 2010, December 31, 2009 and March 31, 2009 and the expected amortization as of March 31, 2010 is as follows:

		March 31,				December 31,				March 31,
(Dollars in thousands)		2010				2009				2009
Customer list intangibles:
Gross carrying amount		$	5,052			$	5,052			$	3,252
Accumulated amortization			(3,360	)			(3,307	)			(3,127	)
Net carrying amount			1,692				1,745				125
Core deposit intangibles:
Core deposit intangibles
Gross carrying amount			27,918				27,918				27,918
Accumulated amortization			(16,632	)			(16,039	)			(14,122	)
Net carrying amount			11,286				11,879				13,796
Total other intangible assets, net		$	12,978			$	13,624			$	13,921

Estimated amortization
Actual in 3 months ended March 31, 2010		$	645
Estimated remaining in 2010			1,920
Estimated — 2011			2,461
Estimated — 2012			2,436
Estimated — 2013			2,394
Estimated — 2014			2,074

The customer list intangibles recognized in connection with the purchase of U.S. life insurance premium finance assets in 2009 are being amortized over an 18-year period on an accelerated basis. The customer list intangibles recognized in connection with the acquisitions of Lake Forest Capital Management in 2003 and Wayne Hummer Asset Management Company in 2002, were being amortized over seven-year periods on an accelerated basis and were fully amortized in the first quarter of 2010 and first quarter of 2009, respectively.

The core deposit intangibles recognized in connection with the Company’s bank acquisitions are being amortized over ten-year periods on an accelerated basis.

Total amortization expense associated with finite-lived intangibles totaled approximately $645,000 and $687,000 for the three months ended March 31, 2010 and 2009, respectively.

(10) Depsits

The following table is a summary of deposits as of the dates shown:

		March 31,				December 31,				March 31,
(Dollars in thousands)		2010				2009				2009
Balance:
Non-interest bearing deposits		$	871,830			$	864,306			$	745,194
NOW accounts			1,448,857				1,415,856				1,064,663
Wealth management deposits			690,919				971,113				833,291
Money market accounts			1,586,830				1,534,632				1,313,157
Savings accounts			558,770				561,916				406,376
Time certificates of deposit			4,567,664				4,569,251				4,263,296
Total deposits		$	9,724,870			$	9,917,074			$	8,625,977
Mix:
Non-interest bearing deposits			9	%			9	%			9	%
NOW accounts			15				14				12
Wealth management deposits			7				10				10
Money market accounts			16				15				15
Savings accounts			6				6				5
Time certificates of deposit			47				46				49
Total deposits			100	%			100	%			100	%