The net loss for the fiscal year ended
"We knew that 2008 would be a challenging year but we could not predict
the magnitude of the impact from the unprecedented downturn in the economy,"
said
"Throughout 2008 we strengthened our capital base and made substantial
progress implementing our Strategic Growth Plan," Richman added. "We added a
large number of new client relationships that resulted in almost
Comprehensive Loan Review and Credit Quality
As a result of the rapid deterioration in economic conditions, in the
fourth quarter the Company undertook a comprehensive review of all residential
development loans and all underperforming assets. The intent of the review
was to identify inherent losses where cash flow and guarantor support
indicated likely non-performance and where losses from deteriorating asset
values were evident. The Company believes the review was prudent in light of
market conditions, particularly in the residential sector in
The fourth quarter loan loss provision was
None of the losses reported were from loans originated as part of the Strategic Growth Plan. These loans continue to perform as expected with no significant payment past dues.
In addition, the Company strengthened its allowance for loan losses in
recognition of the weakened credit climate expected to remain through at least
2009. The allowance for loan losses as a percentage of total loans was 1.40
percent at
After giving effect to these charge-offs, as of
The Company made a strategic decision in early 2008 to curtail any new production in the residential development sector and will allow a substantial portion of this portfolio to wind down as residential development lending is not a core component of the Strategic Growth Plan.
Non-performing assets to total assets were 1.55 percent at
Delinquencies (loans 30-89 days past due and still accruing) were
Execution of the Strategic Growth Plan
During the fourth quarter, the Company continued to execute on fundamental elements of its Strategic Growth Plan:
-- The Company's loan portfolio increased in the fourth quarter by more than $700 million, or $595.7 million after net charges of $108.8 million, compared to an increase of $1.0 billion in the third quarter, through continued selective strategic growth. -- Client deposits grew $1.0 billion, or 20 percent, during the fourth quarter, compared to $615.4 million, or 14 percent, in the third quarter 2008, once again supporting the Company's goal to fund a substantial portion of loan growth with client deposits. Quarterly average balances of business DDA accounts, an important measure of new client growth, grew by 26 percent over the third quarter. -- Revenue grew 9 percent to $71.7 million in the fourth quarter from $65.8 million in the third quarter, with continued strong new fee revenue from the Treasury Management and Capital Markets groups. -- After a year of significant investment in personnel for client development and support infrastructure, hiring related to the Strategic Growth Plan is largely complete.
Progress against Strategic Growth Plan objectives is measured by key performance indicators including revenue, deposit and loan growth, asset quality, operating efficiency and profitability, as well as selective client acquisition. Despite the current economic challenges, the Company believes attractive market opportunities continue to exist, and it will selectively pursue those that drive long-term growth.
The Company makes loans based on relationships that are well-tested and analyzed. All loans are subject to a selective screening and approval process including downside stress testing and consideration of the economic climate. All production is originated to hold on the balance sheet.
Balance Sheet
Total assets increased over 100 percent to
Total deposits increased 113 percent to
Funds borrowed, which include federal funds purchased, FHLB advances,
borrowings under the Company's credit facility, and convertible senior notes,
increased to
The Company's investment securities portfolio increased to
Revenue Growth
Revenue grew 9 percent over the third quarter 2008 to
Net interest income totaled
Non-interest income, excluding securities gains and losses, was
The PrivateWealth Group's assets under management were
Expenses
Non-interest expense was
Capital Resources and Liquidity
The Company today announced it has received preliminary approval of a
As of
The Company experienced strong deposit growth of 7 percent during the fourth quarter that improved its overall liquidity. Additionally, the Company increased the size of its securities portfolio to 14 percent of total assets.
About PrivateBancorp, Inc.
PrivateBancorp, Inc. is a growing diversified financial services company
with 23 offices in nine states and more than
Additional information can be found in the Investor Relations section of PrivateBancorp, Inc.'s website at http://www.pvtb.com.
Forward-Looking Statements: Statements contained in this news release that are not historical facts may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to, unforeseen difficulties and higher than expected costs associated with the continued implementation of our Strategic Growth Plan, fluctuations in market rates of interest and loan and deposit pricing in the Company's market areas; the effect of continued margin pressure on the Company's earnings; further deterioration in asset quality; the failure to obtain on terms acceptable to us, or at all, the capital necessary to fund our growth and maintain our regulatory capital ratios above the "well-capitalized" threshold; the need to continue to increase our allowance for loan losses; additional charges related to asset impairments; insufficient liquidity/funding sources or the inability to obtain on terms acceptable to the Company the funding necessary to fund its loan growth; legislative or regulatory changes, particularly changes in the regulation of financial services companies and/or the products and services offered by financial services companies; adverse developments in the Company's loan or investment portfolios; slower than anticipated growth of the Company's business or unanticipated business declines, including as a result of continual negative economic conditions; competition; unforeseen difficulties in integrating new hires; failure to improve operating efficiencies through expense controls; and the possible dilutive effect of potential acquisitions, expansion or future capital raises. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update publicly any of these statements in light of future events unless required under the federal securities laws.
Editor's Note: Financial highlights attached. PrivateBancorp, Inc. Consolidated Income Statements Unaudited (amounts in thousands except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2008 2007 2008 2007 Interest Income Loans, including fees $107,370 $71,062 $367,104 $282,979 Federal funds sold and interest- bearing deposits 488 275 1,145 1,011 Securities: Taxable 10,754 3,951 28,657 14,584 Exempt from federal income taxes 2,025 2,313 8,477 9,350 Total Interest Income 120,637 77,601 405,383 307,924 Interest Expense Deposits: Interest-bearing demand 285 451 1,515 1,959 Savings and money market 11,579 16,813 48,880 68,446 Brokered and other time 36,405 20,894 126,316 83,640 Funds borrowed 8,064 6,087 22,205 19,393 Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities 5,122 1,608 14,710 6,364 Total Interest Expense 61,455 45,853 213,626 179,802 Net Interest Income 59,182 31,748 191,757 128,122 Provision for loan losses 119,250 10,171 189,579 16,934 Net Interest Income after Provision for Loan Losses (60,068) 21,577 2,178 111,188 Non-interest Income The PrivateWealth Group fee revenue 4,140 4,310 16,968 16,188 Mortgage banking income 622 828 4,158 4,528 Capital markets product income 4,767 - 11,049 - Treasury management income 1,086 151 2,369 579 Bank owned life insurance 501 431 1,809 1,656 Banking and other services 1,297 484 4,453 2,975 Net securities (loss) gain (770) - 510 348 Total Non-interest Income 11,643 6,204 41,316 26,274 Non-interest Expense Salaries and employee benefits 27,219 31,673 115,678 71,219 Occupancy expense, net 4,543 3,918 17,098 13,204 Professional fees 5,766 6,442 16,450 11,876 Investment manager expenses 690 925 3,299 3,432 Marketing 2,781 2,422 10,395 6,099 Data processing 1,634 1,282 5,576 4,206 Postage, telephone, and delivery 563 483 2,226 1,706 Office supplies and printing 405 362 1,392 1,084 Amortization of intangibles 267 240 1,164 966 Insurance 2,341 772 7,408 1,937 Other non-interest expense 7,694 3,291 14,439 6,680 Total Non-interest Expense 53,903 51,810 195,125 122,409 Minority interest expense 53 78 309 363 (Loss) Income Before Income Taxes (102,381) (24,107) (151,940) 14,690 Income tax (benefit) provision (40,370) (8,962) (60,439) 2,883 Net (loss) income (62,011) ($15,145) (91,501) 11,807 Preferred stock dividends 146 107 546 107 Net (loss) income available to Common Shareholders (62,157) ($15,252) ($92,047) $11,700 Weighted Average Common Shares Outstanding 31,733 22,537 29,553 21,572 Diluted Average Common Shares Outstanding 31,733 22,537 29,553 22,286 Per Common Share Information Basic $(1.96) $(0.68) $(3.11) $0.54 Diluted $(1.96) $(0.68) $(3.11) $0.53 Dividends $0.075 $0.075 $0.300 $0.300 Note 1: Certain reclassifications have been made to prior period financial statements to place them on a basis comparable with the current period financial statements. Note 2: Diluted shares are equal to Basic shares for the three and twelve months ended December 31, 2008 and the three months ended December 31, 2007 due to the net loss. The calculation of diluted earnings per share results in anti-dilution. PrivateBancorp, Inc. Quarterly Consolidated Income Statements Unaudited (amounts in thousands except per share data) 4Q08 3Q08 2Q08 1Q08 4Q07 Interest Income Loans, including fees $107,370 $99,408 $84,231 $76,113 $71,062 Federal funds sold and interest-bearing deposits 488 217 207 246 275 Securities: Taxable 10,754 8,161 5,456 4,286 3,951 Exempt from federal income taxes 2,025 2,027 2,181 2,244 2,313 Total Interest Income 120,637 109,813 92,075 82,889 77,601 Interest Expense Deposits: Interest-bearing demand 285 383 425 422 451 Savings and money market 11,579 12,785 11,303 13,221 16,813 Brokered and other time 36,405 33,598 29,950 26,358 20,894 Funds borrowed 8,064 4,634 4,523 4,996 6,087 Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities 5,122 5,258 2,758 1,572 1,608 Total Interest Expense 61,455 56,658 48,959 46,569 45,853 Net Interest Income 59,182 53,155 43,116 36,320 31,748 Provision for loan losses 119,250 30,173 23,024 17,133 10,171 Net Interest Income after Provision for Loan Losses (60,068) 22,982 20,092 19,187 21,577 Non-interest Income The PrivateWealth Group fee revenue 4,140 4,059 4,350 4,419 4,310 Mortgage banking income 622 776 997 1,530 828 Capital markets product income 4,767 3,932 1,959 391 - Treasury management income 1,086 600 279 184 151 Bank owned life insurance 501 439 437 432 431 Banking and other services 1,297 1,728 1,119 746 484 Net securities (loss) gain (770) 180 286 814 - Total Non-interest Income 11,643 11,714 9,427 8,516 6,204 Non-interest Expense Salaries and employee benefits 27,219 28,895 31,817 27,749 31,673 Occupancy expense, net 4,543 4,364 4,338 3,845 3,918 Professional fees 5,766 3,374 5,005 2,311 6,442 Investment manager expenses 690 829 812 968 925 Marketing 2,781 2,083 2,700 2,828 2,422 Data processing 1,634 1,554 1,168 1,220 1,282 Postage, telephone, and delivery 563 575 546 541 483 Office supplies and printing 405 275 371 350 362 Amortization of intangibles 267 241 422 234 240 Insurance 2,341 2,460 1,627 870 772 Other non-interest expenses 7,694 2,435 2,401 2,016 3,291 Total Non-interest Expense 53,903 47,085 51,207 42,932 51,810 Minority interest expense 53 86 101 68 78 Loss Before Income Taxes (102,381) (12,475) (21,789) (15,297) (24,107) Income tax benefit (40,370) (5,211) (8,494) (6,364) (8,962) Net loss ($62,011) ($7,264) ($13,295) ($8,933) ($15,145) Preferred stock dividends 146 146 146 107 107 Net loss available to Common Shareholders ($62,157) ($7,410) ($13,441) ($9,040) ($15,252) Weighted Average Common Shares Outstanding 31,733 31,634 27,914 26,886 22,537 Diluted Average Common Shares Outstanding 31,733 31,634 27,914 26,886 22,537 Per Common Share Information Basic $(1.96) $(0.23) $(0.48) $(0.34) $(0.68) Diluted $(1.96) $(0.23) $(0.48) $(0.34) $(0.68) Dividends $0.075 $0.075 $0.075 $0.075 $0.075 Note 1: Certain reclassifications have been made to prior period financial statements to place them on a basis comparable with the current period financial statements. Note 2: Diluted shares are equal to Basic shares for the first, second, third and fourth quarter 2008 and the fourth quarter 2007 due to the net loss. The calculation of diluted earnings per share results in anti- dilution. PrivateBancorp, Inc. Consolidated Balance Sheets (dollars in thousands) 12/31/08 09/30/08 06/30/08 03/31/08 12/31/07 unaudited unaudited unaudited unaudited audited Assets Cash and due from banks $131,848 $76,314 $76,924 $54,576 $51,331 Fed funds sold and other short-term investments 98,387 363,991 41,034 22,226 13,220 Total cash and cash equivalents 230,235 440,305 117,958 76,802 64,551 Available-for-sale securities, at fair value 1,425,564 899,301 712,158 575,798 526,271 Non-marketable equity investments 27,213 18,958 13,807 13,157 12,459 Loans held for sale 17,082 6,736 10,988 9,659 19,358 Loans net of unearned discount 8,036,807 7,441,137 6,417,026 5,136,066 4,177,795 Allowance for loan losses (112,672) (102,223) (79,021) (61,974) (48,891) Net loans 7,924,135 7,338,914 6,338,005 5,074,092 4,128,904 Goodwill 95,045 95,045 95,045 93,341 93,341 Premises and equipment, net 34,201 29,650 27,513 26,356 25,600 Accrued interest receivable 34,282 32,466 27,809 25,287 24,144 Bank owned life insurance 45,938 45,438 44,999 44,561 44,129 Other assets 206,647 104,650 90,656 74,591 51,448 Total Assets $10,040,342 $9,011,463 $7,478,938 $6,013,644 $4,990,205 Liabilities Demand deposits: Non-interest bearing $711,693 $601,653 $548,710 $341,779 $299,043 Interest bearing 232,099 164,318 164,541 159,003 157,761 Savings and money market deposit accounts 2,798,882 2,407,641 2,086,929 1,663,275 1,594,172 Brokered deposits 2,654,768 2,749,735 1,889,401 1,396,930 542,470 Other time deposits 1,599,014 1,526,601 1,466,369 1,453,479 1,167,692 Total deposits 7,996,456 7,449,948 6,155,950 5,014,466 3,761,138 Funds borrowed 1,029,085 592,194 369,570 359,099 560,809 Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities 244,793 244,793 244,793 101,033 101,033 Accrued interest payable 37,809 31,959 30,039 17,670 16,134 Other liabilities 126,367 52,449 33,087 28,169 50,298 Total Liabilities $9,434,510 $8,371,343 $6,833,439 $5,520,437 $4,489,412 Stockholders' Equity Preferred stock 58,070 58,070 58,070 41,000 41,000 Common stock 32,468 32,147 31,944 27,289 27,225 Treasury stock (17,285) (15,626) (14,150) (13,925) (13,559) Additional paid-in-capital 480,529 474,354 467,294 314,961 311,989 Retained earnings 24,482 89,248 99,177 115,016 126,204 Accumulated other comprehensive income 27,568 1,927 3,164 8,866 7,934 Total Stockholders' Equity $605,832 $640,120 $645,499 $493,207 $500,793 Total Liabilities and Stockholders' Equity $10,040,342 $9,011,463 $7,478,938 $6,013,644 $4,990,205 Note 1: Certain reclassifications have been made to prior period financial statements to place them on a basis comparable with the current period financial statements. PrivateBancorp, Inc. Key Financial Data Unaudited (amounts in thousands except per share data) 4Q08 3Q08 2Q08 1Q08 4Q07 Selected Statement of Income Data: Net interest income $59,182 $53,155 $43,116 $36,320 $31,748 Net revenue (1) $71,742 $65,787 $53,535 $45,862 $39,009 Loss before taxes ($102,381) ($12,475) ($21,789) ($15,297) ($24,107) Net loss ($62,011) ($7,264) ($13,295) ($8,933) ($15,145) Per Common Share Data: Basic earnings per share ($1.96) ($0.23) ($0.48) ($0.34) ($0.68) Diluted earnings per share (2) ($1.96) ($0.23) ($0.48) ($0.34) ($0.68) Dividends $0.075 $0.075 $0.075 $0.075 $0.075 Book value (period end) $16.32 $17.32 $17.65 $15.97 $16.38 Tangible book value (period end) (3) $13.29 $14.31 $14.61 $12.46 $12.82 Market value (close) $32.46 $41.66 $30.38 $31.47 $32.65 Diluted earnings multiple (4) (4.18)x (44.83)x (15.78)x (23.08)x (12.10)x Book value multiple 1.99 x 2.41 x 1.72 x 1.97 x 1.93 x Share Data: Weighted Average Common Shares Outstanding 31,733 31,634 27,914 26,886 22,537 Diluted Average Common Shares Outstanding (2) 31,733 31,634 27,914 26,886 22,537 Common shares issued (at period end) 34,043 34,028 33,656 28,686 28,439 Common shares outstanding (at period end) 33,568 33,604 33,275 28,311 28,075 Performance Ratios: Return on average assets -2.61% -0.35% -0.80% -0.66% -1.30% Return on average total equity -40.37% -4.59% -9.89% -7.81% -16.61% Dividend payout ratio -4.28% -35.24% -18.93% -24.23% -14.30% Fee revenue as a percent of total revenue (5) 17.34% 17.83% 17.49% 17.49% 16.35% Non-interest income to average assets 0.49% 0.57% 0.57% 0.63% 0.53% Non-interest expense to average assets 2.27% 2.28% 3.07% 3.18% 4.45% Net overhead ratio (6) 1.78% 1.71% 2.50% 2.55% 3.92% Efficiency ratio (7) 75.13% 71.57% 95.65% 93.61% 132.81% Selected Financial Condition Data: Client deposits (8) $6,020,646 $5,006,397 $4,390,998 $3,697,598 $3,220,464 The Private Wealth Group assets under management $3,261,061 $3,354,212 $3,305,477 $3,314,461 $3,361,171 Balance Sheet Ratios: Loans to Deposits (period end) 100.50% 99.88% 104.24% 102.42% 111.08% Average interest- earning assets to average interest- bearing liabilities 112.12% 113.28% 111.69% 112.86% 111.32% Capital Ratios (period end): Total equity to total assets 6.03% 7.10% 8.63% 8.20% 10.04% Total risk-based capital ratio 10.32% 12.09% 13.47% 11.54% 14.20% Tier-1 risk- based capital ratio 7.25% 9.22% 10.82% 9.00% 11.39% Leverage ratio 7.18% 9.28% 11.46% 9.13% 10.93% Tangible capital ratio 5.08% 6.05% 7.38% 6.66% 8.20% (1) The sum of net interest income, on a tax equivalent basis, plus non-interest income. (2) Diluted shares are equal to Basic shares due to the net loss. The calculation of diluted earnings per share results in anti-dilution. (3) Tangible book value is total capital less goodwill and other intangibles divided by outstanding shares at end of period. (4) Period end closing stock price divided by annualized quarterly earnings for the quarter then ended. (5) Represents non-interest income less securities gains as a percentage of the sum of net interest income and non-interest income less securities gains. (6) Non-interest expense less non-interest income divided by average total assets. (7) Non-interest expense divided by the sum of net interest income, on a tax equivalent basis, plus non-interest income. (8) Client deposits are equal to total deposits less brokered deposits plus client CDARS(TM).
SOURCE PrivateBancorp, Inc.