UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): APRIL 24, 2000
PRIVATEBANCORP, INC.
(Exact name of Registrant as specified in its charter)
-----------------------------
DELAWARE 000-25887 36-3681151
(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification no.)
TEN NORTH DEARBORN 60602
CHICAGO, ILLINOIS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (312) 683-7100
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
------------
On April 24, 2000, PrivateBancorp, Inc. (the "Company") announced its
earnings results for the quarter ended March 31, 2000. Attached as Exhibit 99.1
is a copy of the press release relating to the Company's earnings results, which
is incorporated herein by reference.
ITEM 7(c). EXHIBITS.
--------
Exhibit 99.1 Press Release dated April 24, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRIVATEBANCORP, INC.
Date: April 24, 2000 By: /s/ RALPH B. MANDELL
--------------------
Ralph B. Mandell
Chairman of the Board and Chief
Executive Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit
- -------
99.1 Press Release dated April 24, 2000.
EXHIBIT 99.1
------------
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION:
Donald A. Roubitchek, CFO
PrivateBancorp, Inc.
312-683-7126
For Immediate Release
PRIVATEBANCORP REPORTS FIRST QUARTER EARNINGS
Chicago, IL, April 24, 2000 --- PrivateBancorp, Inc. (NASDAQ: PVTB) today
reported that net income for the first quarter ended March 31, 2000, was
$849,000, or $0.18 per diluted share, compared to first quarter 1999 net income
of $1,027,000, or $0.28 per diluted share. At March 31, 2000, shares outstanding
increased to 4,590,332 compared to 3,451,824 outstanding at March 31, 1999. The
increase in shares outstanding is due primarily to the Company's initial public
offering in June 1999. First quarter 2000 net income includes the financial
results of the former Johnson Bank Illinois locations subsequent to their
acquisition on February 11, 2000. The consolidated balance sheet at March 31,
2000 also reflects the Johnson acquisition.
According to Ralph B. Mandell, Chairman, President and CEO, the decrease in
earnings is primarily attributable to higher costs associated with the continued
implementation of the Company's growth strategies.
"During the quarter, we closed the Johnson Bank Illinois acquisition,
opened the St. Charles office, and continued the development of our start-up St.
Louis operations, all key initiatives in our expansion plans. Expenses
associated with these expansion activities adversely impacted first quarter
earnings. These additional expenses included vendor charges in conjunction with
the Johnson Bank Illinois data processing systems conversion, and start-up costs
for both our new St. Charles facility and our entry into the St. Louis market.
While net interest margin was largely unchanged from the first quarter 1999, our
net interest margin was down 26 basis points from the fourth quarter of 1999.
This reduction is the result of the impact of the financing costs of the Johnson
acquisition as well as a general tightness in margins resulting from an unstable
interest rate market and competitive pressures. We expect pressure on our
margins to continue into the remainder of 2000.
"Although these factors had a negative impact on the first quarter results,
earnings from our core private banking operations remain strong. We expect that
this strength will be reflected in future results. In a year-to-year quarterly
comparison, even when excluding the effect of the Johnson acquisition, we
continued to experience double-digit growth in loans, deposits, and fee income,"
said Mandell.
Net interest income totaled $4.9 million in the first quarter of 2000, an
increase of 43 percent over the first quarter of 1999. Average earning assets
during the period were $572.5 million, an increase of 41 percent over the prior
year first quarter. Net interest margin averaged 3.59 percent in the first
quarter of 2000, versus 3.57 percent in the prior year first quarter. Although
rising interest rates have improved the yield on average earning assets,
interest expense on deposits and other borrowed funds has correspondingly
increased, resulting in relatively unchanged net interest margin levels between
quarters.
Non-interest income for the quarter grew to $722,000, reflecting an
increase of $280,000 or 63 percent higher than in the first quarter of 1999. The
increase year over year is partially attributable to the recognition of $92,000
of gains related to the sale of investment securities during the first quarter
of 2000. The sale was driven by the Company's realignment of its available for
sale investment securities portfolio following the acquisition of Johnson Bank
Illinois. Additionally, trust assets under administration increased to $799.0
million at March 31, 2000 compared to $637.4 million at March 31, 1999, an
increase of 25 percent. Trust income increased by $123,000 to $539,000 for the
quarter ended March 31, 2000, reflecting an increase of 30 percent over the
prior year quarter.
At March 31, 2000, nonperforming loans as a percentage of total loans were
0.30 percent, versus 0.12 percent at March 31, 1999. Charge-offs totaled $15,000
in the quarter ended March 31, 2000 versus
<PAGE>
zero in the year-earlier period. The provision for loan losses was $311,000 in
the first quarter of 2000, versus $285,000 in the first quarter of 1999.
On January 31, 2000, PrivateBancorp, Inc. opened its St. Charles office
located in the Fox Valley. On February 11, 2000, PrivateBancorp, Inc.
completed the acquisition of Johnson Bank Illinois and recorded $12.3 million of
goodwill with a useful life of 15 years. At closing, Johnson Bank Illinois had
assets of $113.0 million. The merger of Johnson Bank Illinois into The Private
Bank and Trust Company added bank offices in Lake Forest and Winnetka.
Additionally, PrivateBancorp, Inc. has applied to charter a new federal savings
bank in St. Louis to be known as The PrivateBank (St. Louis). The charter
application is under review by the Office of Thrift Supervision. Pending
regulatory approval of the new subsidiary, PrivateBancorp Inc.'s existing bank
subsidiary, The PrivateBank and Trust Company, is operating a loan production
office in St. Louis in order to develop credit business.
PrivateBancorp, Inc. was organized in 1989 to provide highly personalized
financial services primarily to affluent individuals, professionals, owners of
closely held businesses and commercial real estate investors through its bank
subsidiary, The PrivateBank and Trust Company. The Company, which has assets of
$657.0 million at March 31, 2000, currently operates offices in Chicago, Oak
Brook, Wilmette, St. Charles, Lake Forest, and Winnetka, Illinois in addition to
a loan production office in St. Louis, Missouri.
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, fluctuations in market rates of interest and loan and deposit
pricing, general economic conditions in the greater Chicago metropolitan area,
legislative or regulatory changes, adverse developments in the Company's loan or
investment portfolios, competition, lower than expected business levels or
higher than anticipated costs relating to the Company's establishment of the St.
Charles, Illinois and St. Louis, Missouri offices and the possible dilutive
effect of potential acquisitions or expansion. These risks and uncertainties
should be considered in evaluating forward-looking statements and undue reliance
should not be placed on such statements.
Editor's Note: Financial highlights attached.
2
<PAGE>
PRIVATEBANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
2000 1999
------- ------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans............ $ 9,475 $5,636
Interest on short term investments.... 387 48
Interest on investment securities..... 1,385 1,570
------- ------
Total interest income.............. $11,247 $7,254
------- ------
INTEREST EXPENSE
Interest on deposits.................. $ 6,055 $3,694
Interest on borrowings................ 296 144
------- ------
Total interest expense............. $ 6,351 $3,838
------- ------
Net interest income................... $ 4,896 $3,416
Provision for loan losses............. 311 285
------- ------
Net interest income after
provision........................ $ 4,585 $3,131
------- ------
NON INTEREST INCOME
Banking and trust services............ $ 627 $ 442
Securities (losses) gains............. 95 --
------- ------
Total non interest income.......... $ 722 $ 442
------- ------
NON INTEREST EXPENSE
Salaries and benefits................. $ 1,877 $1,115
Other operating expenses.............. 2,047 1,140
Amortization of goodwill.............. 113 --
------- ------
Total non interest expense......... $ 4,037 $2,255
------- ------
Income before income taxes............ $ 1,270 $1,318
Income tax expense.................... 421 291
------- ------
Net income......................... $ 849 $1,027
======= ======
Weighted average shares
outstanding........................ 4,590,332 3,436,524
Diluted average shares
outstanding........................ 4,777,351 3,683,388
EARNINGS PER SHARE
Basic................................. $ 0.18 $ 0.30
Diluted............................... $ 0.18 $ 0.28
</TABLE>
4
<PAGE>
PRIVATEBANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31,
---------------------------
2000 1999
-------- --------
<S> <C> <C>
ASSETS
Cash and due from banks.......................... $ 16,629 $ 8,220
Short term investments........................... 10,632 7,759
Investment securities--available-for-sale......... 89,924 105,136
Loans, net of unearned income.................... 521,188 307,766
Allowance for loan losses........................ (5,670) (3,695)
-------- --------
Net loans..................................... $515,518 $304,071
Premises and equipment........................... $ 3,211 $ 1,528
Goodwill......................................... 12,237 --
Other assets..................................... 8,830 4,341
-------- --------
Total assets.................................. $656,981 $431,055
======== ========
LIABILITIES
Non-interest bearing deposits.................... $ 51,451 $ 28,178
Interest bearing deposits........................ 527,106 356,276
-------- --------
Total deposits................................ $578,557 $384,454
-------- --------
Borrowings....................................... $ 23,328 $ 10,000
Other liabilities................................ 6,598 6,547
-------- --------
Total liabilities............................. $608,483 $401,001
======== ========
STOCKHOLDERS' EQUITY
Common stock and surplus......................... $ 44,351 $ 26,052
Retained earnings................................ 8,159 5,853
Accumulated other comprehensive income........... (2,292) (58)
Deferred compensation............................ (695) (843)
Loans to executive officers...................... (1,025) (950)
-------- --------
Total stockholders' equity.................... $ 48,498 $ 30,054
======== ========
Total liabilities and stockholders' equity.... $656,981 $431,055
======== ========
Book value per share............................. $ 10.57 $ 8.71
</TABLE>
5
<PAGE>
PRIVATEBANCORP, INC.
KEY FINANCIAL DATA
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1Q00 4Q99 3Q99 2Q99 1Q99
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
KEY STATISTICS
Earnings before special charges (1)........... $ 849 $ 1,191 $ 1,180 $1,112 $1,027
Special charges (net of tax).................. -- $ 214 $ 1,382 -- --
Net income.................................... $ 849 $ 977 $ (201) $1,112 $1,027
Earnings before special charges per fully
diluted share.............................. $ 0.18 $ 0.25 $ 0.25 $ 0.30 $ 0.28
Special charges (per fully diluted share)..... -- $ (0.05) $ (0.29) -- --
Basic earnings per share...................... $ 0.18 $ 0.21 $ (0.05) $ 0.32 $ 0.30
Diluted earnings per share.................... $ 0.18 $ 0.20 $ (0.05) $ 0.30 $ 0.28
Return on average total assets (before
special charges)........................... 0.57% 0.98% 1.04% 1.02% 0.97%
Return on average total equity (before
special charges)........................... 7.20% 10.06% 10.17% 14.82% 13.84%
Non-interest income to average assets......... 0.49% 0.44% 0.45% 0.48% 0.43%
Non-interest expense to average assets........ 2.72% 2.65% 3.70% 2.19% 2.18%
Net overhead ratio............................ 2.23% 2.21% 3.25% 1.72% 1.75%
Efficiency ratio excluding special charges
(tea)...................................... 69.2% 57.5% 57.5% 57.2% 54.9%
Net interest margin........................... 3.59% 3.85% 3.87% 3.61% 3.57%
Yield on average earning assets............... 8.06% 7.83% 7.63% 7.39% 7.40%
Cost of average paying liabilities............ 5.09% 4.72% 4.46% 4.31% 4.38%
Net interest spread........................... 2.97% 3.11% 3.17% 3.08% 3.02%
Dividend payout ratio......................... 13.52% 11.75% NM 7.76% 8.40%
BALANCE SHEET RATIOS
Loans to deposits (period end)................ 90.08% 87.68% 91.22% 89.41% 80.05%
Average interest-earning assets to average
interest-bearing liabilities............... 114.0% 116.7% 115.6% 115.3% 114.2%
PER SHARE DATA
Dividends..................................... $ 0.025 $ 0.025 $ 0.025 $0.025 $0.025
Book value (period end)....................... $ 10.57 $ 10.26 $ 10.11 $ 8.68 $ 8.71
Tangible book value (period end).............. $ 7.90 $ 10.26 $ 10.11 $ 8.68 $ 8.71
Closing price (period end).................... $10.500 $13.375 $17.750 -- --
Diluted earnings multiple..................... 14.69x 16.32x NM -- --
Diluted earnings multiple before special
charges.................................... 14.69x 13.30x 17.65x -- --
Book value multiple........................... 0.99x 1.30x 1.76x -- --
COMMON STOCK INFORMATION
Outstanding shares at end of period........... 4,590,332 4,590,332 4,584,092 3,451,824 3,451,824
NUMBER OF SHARES USED TO COMPUTE:
Basic earnings per share................... 4,590,332 4,585,109 4,460,280 3,451,824 3,436,524
Diluted earnings per share................. 4,777,351 4,794,770 4,717,660 3,705,116 3,683,388
CAPITAL RATIOS (PERIOD END)
Total equity to total assets.................. 7.38% 9.08% 10.30% 6.83% 6.97%
Total risk-based capital ratio................ 9.56% 13.96% 15.22% 10.77% 11.21%
Tier-1 risk based capital ratio............... 7.56% 12.84% 14.09% 9.63% 10.05%
Leverage ratio................................ 6.76% 10.77% 11.19% 7.63% 7.53%
- ---------------
(1) Special charges represent one time costs associated with the 1999 third quarter acquisition of Towne Square and the 1999
fourth quarter start-up costs for St. Louis.
</TABLE>
6
<PAGE>
PRIVATEBANCORP, INC.
KEY FINANCIAL DATA
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1Q00 4Q99 3Q99 2Q99 1Q99
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SUMMARY INCOME STATEMENT
INTEREST INCOME
Loans, including fees...................... $ 9,475 $7,737 $7,006 $6,218 $5,636
Federal funds sold and interest bearing
deposits................................. 387 115 134 33 48
Securities................................. 1,385 1,088 1,189 1,294 1,570
------- ------ ------ ------ ------
Total interest income.................... 11,247 8,940 8,329 7,545 7,254
Interest expense........................... 6,351 4,653 4,166 3,948 3,838
------- ------ ------ ------ ------
Net interest income........................ 4,896 4,287 4,163 3,597 3,416
Provision for loan loss.................. 311 437 273 213 285
------- ------ ------ ------ ------
Net interest income after provision for
loan loss................................ 4,585 3,850 3,890 3,384 3,131
------- ------ ------ ------ ------
NON-INTEREST INCOME
Banking and trust services.................... 627 535 504 512 396
Securities (losses) gains..................... 95 (1) 8 4 46
------- ------ ------ ------ ------
Total non-interest income.................. 722 534 512 516 442
------- ------ ------ ------ ------
NON-INTEREST EXPENSE
Salaries and employee benefits................ 1,877 1,753 1,309 1,088 1,115
Towne Square acquisition...................... -- -- 1,300 -- --
Goodwill...................................... 113 -- -- -- --
Occupancy expense............................. 613 437 401 373 352
Other non-interest expense.................... 1,434 1,026 1,227 918 788
------- ------ ------ ------ ------
Total non-interest expense................. 4,037 3,216 4,237 2,379 2,255
------- ------ ------ ------ ------
Income before income taxes.................... 1,270 1,168 165 1,521 1,318
Provision for income taxes.................... 421 191 366 409 291
------- ------ ------ ------ ------
Net income (loss)................................ $ 849 $ 977 $ (201) $1,112 $1,027
======= ====== ====== ====== ======
</TABLE>
7
<PAGE>
PRIVATEBANCORP, INC.
KEY FINANCIAL DATA
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1Q00 4Q99 3Q99 2Q99 1Q99
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
CREDIT QUALITY
Ending allowance for loan losses.............. $5,670 $4,510 $4,079 $3,903 $3,695
Non-performing assets:
Loans delinquent over 90 days.............. 355 223 135 710 361
Nonaccrual loans........................... 1,222 600 569 94 --
Other real estate.......................... -- -- -- -- --
------ ------ ------ ------ ------
Total non-performing assets.............. $1,577 $ 823 $ 704 $ 804 $ 361
====== ====== ====== ====== ======
Loans charged off............................. $ 20 $ 6 $ 97 $ 5 --
Recoveries.................................... 5 -- -- -- --
------ ------ ------ ------ ------
Net charge-offs............................... $ 15 $ 6 $ 97 $ 5 --
====== ====== ====== ====== ======
Provision for loan losses..................... $ 311 $ 437 $ 273 $ 213 $ 285
====== ====== ====== ====== ======
KEY RATIOS
Net charge-offs to average loans.............. 0.003% 0.002% 0.11% 0.002% --
Total non-performing loans to total loans..... 0.30% 0.21% 0.20% 0.24% 0.12%
Total non-performing assets to total assets... 0.24% 0.16% 0.16% 0.18% 0.08%
LOAN LOSS RESERVE SUMMARY
Balance at beginning of period................ $4,510 $4,079 $3,903 $3,695 $3,410
Johnson Bank acquisition -- loan loss
reserve.................................... 864 -- -- -- --
Provision..................................... 311 437 273 213 285
Net charge-offs............................... 15 6 97 5 --
------ ------ ------ ------ ------
Ending allowance.............................. $5,670 $4,510 $4,079 $3,903 $3,695
====== ====== ====== ====== ======
NET LOAN CHARGE-OFFS:
Commercial real estate........................ -- -- -- -- --
Residential real estate....................... -- -- -- -- --
Commercial.................................... $ 8 -- -- -- --
Personal...................................... $ 7 $ 6 $ 97 $ 5 --
Home equity................................... -- -- -- -- --
Construction.................................. -- -- -- -- --
------ ------ ------ ------ ------
Total net loan charge-offs................. $ 15 $ 6 $ 97 $ 5 --
====== ====== ====== ====== ======
</TABLE>
8
<PAGE>
PRIVATEBANCORP, INC.
AVERAGE QUARTERLY BALANCE SHEETS
(UNAUDITED, DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE PERIODS ENDING MARCH 31,
--------------------------------
2000 1999
-------- --------
<S> <C> <C>
AVERAGE ASSETS
Cash and due from banks........................... $ 15,986 $ 11,664
Short term investments............................ 27,376 4,167
Investment securities............................. 87,189 112,724
Loans, net of unearned discount................... 453,604 288,322
Less: Allowance for loan losses.................. (5,075) (3,470)
-------- --------
Net loans......................................... 448,529 284,852
-------- --------
Premises and equipment............................ 3,093 1,569
Goodwill.......................................... 6,636 --
Other assets...................................... 7,221 4,898
-------- --------
Total average assets........................... $596,030 $419,874
======== ========
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits..................... $ 41,692 $ 32,990
Interest bearing demand deposits.................. 33,146 27,199
Savings and money market deposits................. 255,241 177,600
Time deposits..................................... 197,628 139,512
-------- --------
Total average deposits............................ 527,707 377,301
Funds borrowed.................................... 16,201 10,485
Other liabilities................................. 4,724 3,487
-------- --------
Total average liabilities...................... 548,632 391,273
Average stockholders' equity...................... 47,398 28,601
-------- --------
Average total liabilities and stockholders'
equity....................................... $596,030 $419,874
======== ========
</TABLE>
9
<PAGE>
PRIVATEBANCORP, INC.
BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31,
2000 1999 1999 1999 1999
---------- ------------ ------------- ----------- ----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks......... $ 16,629 $ 14,940 $ 14,284 $ 9,896 $ 8,220
Federal funds sold.............. 10,632 29,243 1,911 995 7,759
Investment securities........... 89,924 71,134 77,269 89,026 105,136
Loans, net of unearned
discount..................... 521,188 397,277 352,236 335,306 307,766
Less: Allowance for loan
losses..................... (5,670) (4,510) (4,079) (3,903) (3,695)
-------- -------- -------- -------- --------
Net loans.................... $515,518 $392,767 $348,157 $331,403 $304,071
-------- -------- -------- -------- --------
Premises and equipment.......... 3,211 2,028 1,462 1,477 1,528
Goodwill........................ 12,237 -- -- -- --
Other assets.................... 8,830 8,585 6,755 5,372 4,341
-------- -------- -------- -------- --------
Total assets................. $656,981 $518,697 $449,838 $438,169 $431,055
======== ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Non-interest bearing
deposits..................... $ 51,451 $ 36,771 $ 35,939 $ 34,267 $ 28,177
Interest bearing demand
deposits..................... 36,926 33,400 26,456 26,286 31,795
Savings and money market
deposits..................... 277,747 204,068 187,410 176,482 180,871
Time deposits................... 212,433 178,853 136,352 137,997 143,611
-------- -------- -------- -------- --------
Total deposits............... $578,557 $453,092 $386,157 $375,032 $384,454
Funds borrowed.................. 23,328 15,000 15,000 31,000 10,000
Other liabilities............... 6,598 3,525 2,330 2,171 6,547
-------- -------- -------- -------- --------
Total liabilities............ $608,483 $471,617 $403,487 $408,203 $401,001
Stockholders' equity............ 48,498 47,080 46,351 29,966 30,054
-------- -------- -------- -------- --------
Total liabilities and
stockholders' equity....... $656,981 $518,697 $449,838 $438,169 $431,055
======== ======== ======== ======== ========
</TABLE>
10
