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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-Q
 
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2004
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For transition period from ________ to ________
 
Commission File Number: 000-25887

PRIVATEBANCORP, INC.
(Exact name of Registrant as specified in its charter.)
 
Delaware
(State or other jurisdiction of incorporation or organization)
36-3681151
(I.R.S. Employer Identification Number)
 
Ten North Dearborn Street
Chicago, Illinois
(Address of principal executive offices)
 
60602
(Zip Code)

(312) 683-7100
(Registrant’s telephone number, including area code)
 
Indicate by checkmark 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 for 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 x    No o
 
Indicate by checkmark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x    No o
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Class
Outstanding as of October 26, 2004
Common, no par value
20,308,150


  
 

PRIVATEBANCORP, INC.
 
FORM 10-Q Quarterly Report
 
Table of Contents
 
 
Page
Number
   
Selected Financial Data
2
Part I
      
 
Item 1.
Financial Statements
4
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
17
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
36
 
Item 4.
Controls and Procedures
39
Part II
    
40
 
Item 1.
Legal Proceedings
40
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
40
 
Item 3.
Defaults upon Senior Securities
40
 
Item 4.
Submission of Matters to a Vote of Security Holders
40
 
Item 5.
Other Information
40
 
Item 6.
Exhibits 
40
Signatures
41
 
  
 
 

 
1
 

  
 
 
  SELECTED FINANCIAL DATA
 
The following table summarizes certain selected unaudited consolidated financial information of PrivateBancorp, Inc. at or for the periods indicated. This information should be read in conjunction with the unaudited consolidated financial statements and related notes included pursuant to Item 1 of this report.
 
 
Quarter Ended
 
09/30/04
06/30/04
03/31/04
12/31/03
09/30/03
 
(dollars in thousands, except per share data)
 
Selected Statement of Income Data:
          
Interest income:
          
Loans, including fees
$     20,315
$     18,702
$     17,680
$     16,588
$     15,830
Securities
        8,436
         7,820
         7,929
     7,773
        6,333
Federal funds sold and interest-bearing deposits
18
4
6
6
6
Total interest income
       28,769
       26,526
       25,615
   24,367
      22,169
 
Interest expense:
          
Interest-bearing demand deposits
156
66
147
143
134
Savings and money market deposit accounts
3,471
2,541
1,874
1,697
1,375
Brokered deposits and other time deposits
4,600
4,548
4,072
4,300
4,346
Funds borrowed
1,572
1,552
1,486
970
1,016
Long-term debt --trust preferred securities
            485
            485
            485
485
           485
Total interest expense
       10,284
         9,192
         8,064
    7,595
        7,356
Net interest income (8)
18,485
17,334
17,551
16,772
14,813
Provision for loan losses
851
724
1,326
    1,595
1,092
Net interest income after provision for loan losses
       17,634
       16,610
       16,225
  15,177
      13,721
 
Non-interest income:
          
Wealth management income
2,117
2,129
1,957
1,856
1,710
Mortgage banking income
776
782
464
451
1,204
Other income
1,006
561
559
582
743
Securities gains (losses), net
1,259
(1,166)
998
(163)
(333)
Trading (losses) gains on interest rate swap
   (1,118)
     1,325
    (1,066)
280 
       765
Total non-interest income
        4,040
        3,631
        2,912
    3,006
        4,089
 
Non-interest expense:
          
Salaries and employee benefits
6,811
6,057
6,035
5,670
5,338
Occupancy expense
1,394
1,350
1,360
1,472
1,403
Professional fees
1,407
1,451
1,114
1,189
1,130
Marketing
628
703
495
678
855
Data processing
520
513
446
391
376
Insurance
221
207
215
200
186
Amortization of intangibles
42
42
42
42
42
Other operating expenses
          860
          897
          832
724
        1,273
Total non-interest expense
  11,883
  11,220
  10,539
    10,366
  10,603
Minority interest expense
74
65
67
52
59
Income before income taxes
  9,717
  8,956
  8,531
      7,765
  7,148
Income tax expense
         2,654
         2,500
         2,581
      2,042
        2,018
Net income
$    7,063
$    6,456
$    5,950
$    5,723
$    5,130
 
Per Share Data:
          
Basic earnings
$      0.35
$      0.33
$      0.31
$         0.30
$      0.28
Diluted earnings
0.34
0.31
0.29
0.28
0.27
Dividends
0.03
0.03
0.03
0.02
0.02
Book value (at end of period)
9.19
8.54
8.72
8.47
8.19

All previously reported share and per share data has been restated to reflect
the 2-for-1 stock split which occurred on May 31, 2004

  
2
 


 
Quarter Ended
 
09/30/04
06/30/04
03/31/04
12/31/03
09/30/03
 
Selected Financial Data (at end of period):
        
Total securities(1)
$  759,328
$  722,582
$  692,678
$  699,262
$  647,433
Total loans
1,471,083
1,407,586
1,344,707
1,224,657
1,131,706
Total assets
2,352,366
2,199,170
2,139,095
1,984,923
1,857,103
Total deposits
1,808,532
1,673,404
1,622,899
1,547,359
1,476,047
Funds borrowed
301,558
306,447
297,537
219,563
164,491
Long-term debt—trust preferred securities
20,000
20,000
20,000
20,000
20,000
Total stockholders’ equity
187,035
173,669
174,041
166,956
161,105
Wealth management assets under management
1,620,487
1,590,119
1,576,218
1,494,881
1,320,175
 
Selected Financial Ratios and Other Data:
        
Performance Ratios:
          
Net interest margin(2)(8)
3.58%
3.51%
3.80%
3.82%
3.64%
Net interest spread(3)
3.32
3.24
3.57
3.60
3.43
Non-interest income to average assets
0.71
0.67
0.57
0.63
0.92
Non-interest expense to average assets
2.08
2.08
2.08
2.16
2.38
Net overhead ratio(4)
1.37
1.41
1.51
1.53
1.46
Efficiency ratio(5), (8)
50.0
50.8
49.1
50.1
53.9