-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WJTrhVu71HZHjSlXFH4NEbCbBFwQlT2ePGrPDGxkwLystsbxoDyvVZ4zqh++cCzh HiCldH3EDcjnDStJdazzXA== 0000913849-05-000712.txt : 20051017 0000913849-05-000712.hdr.sgml : 20051017 20051017060134 ACCESSION NUMBER: 0000913849-05-000712 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051017 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20051017 DATE AS OF CHANGE: 20051017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIVATEBANCORP INC CENTRAL INDEX KEY: 0000889936 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 363681151 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25887 FILM NUMBER: 051140019 BUSINESS ADDRESS: STREET 1: TEN NORTH DEARBORN SUITE 900 CITY: CHICAGO STATE: IL ZIP: 60602 BUSINESS PHONE: 3126837100 MAIL ADDRESS: STREET 1: TEN NORTH DEARBORN STREET CITY: CHICAGO STATE: IL ZIP: 60602 8-K 1 f8k_101305.txt FORM 8-K 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): OCTOBER 17, 2005 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2 below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. --------------------------------------------- On October 17, 2005, PrivateBancorp, Inc. (the "Company") announced its earnings results for the quarter ended September 30, 2005. 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. Certain supplemental information relating to non-GAAP financial measures reported in the attached press release is included on page 8 of Exhibit 99.1. 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. Date: October 17, 2005 PRIVATEBANCORP, INC. By: /s/ Ralph B. Mandell -------------------------------- Ralph B. Mandell Chairman of the Board and Chief Executive Officer EXHIBIT INDEX NUMBER DESCRIPTION - ------ ----------- Exhibit 99.1 Press Release dated October 17, 2005. EX-99.1 2 ex99-1_101305.txt PRESS RELEASE DATED OCTOBER 17, 2005 EXHIBIT 99.1 [PRIVATEBANCORP, INC. LETTERHEAD] FOR FURTHER INFORMATION: Dennis Klaeser, CFO PrivateBancorp, Inc. 312-683-7100 FOR IMMEDIATE RELEASE PRIVATEBANCORP REPORTS RECORD EARNINGS PER SHARE OF $0.41 Earnings per share up 21 percent over third quarter 2004 Chicago, IL, October 17, 2005---PrivateBancorp, Inc. (NASDAQ: PVTB) today reported earnings of $0.41 per diluted share for the third quarter 2005 compared to third quarter 2004 earnings per diluted share of $0.34, reflecting an increase of 21 percent. Net income for the third quarter 2005 was $8.9 million compared to third quarter 2004 net income of $7.1 million. For the nine months ended September 30, 2005, net income was $24.6 million, or $1.17 per diluted share, compared to net income of $19.5 million, or $0.94 per diluted share for the nine months ended September 30, 2004, reflecting a 24 percent increase in diluted earnings per share between periods. Financial results for the three-month and nine-month periods ended September 30, 2005 include full quarter financial results of The PrivateBank - Michigan, which was acquired on June 20, 2005. "PrivateBancorp continued its trend of generating record earnings based on solid operating progress during the quarter. We experienced exceptionally strong loan growth and we remain confident about our credit quality. We are also pleased that net interest margin remained stable and fee income from wealth management and mortgage banking increased. Further momentum is being provided by our recent growth initiatives, including the acquisition of The PrivateBank - Michigan, and the opening of the new Milwaukee and Chicago Gold Coast offices," said Ralph B. Mandell, Chairman, President and CEO. "During the third quarter, we announced that The PrivateBank - St. Louis would be expanding by opening a new office in suburban Chesterfield, Missouri, which is scheduled to open during the first quarter 2006. Also, our Oak Brook, Illinois office will be relocating into an expanded facility during the second quarter 2006, reflecting the opportunity for further growth in both of these markets," Mandell said. For the third quarter 2005, net interest income totaled $26.3 million compared to third quarter 2004 net interest income of $18.5 million, primarily due to growth in earning assets compared to the year earlier period. Net interest income for The PrivateBank - Michigan was $3.8 million for the third quarter 2005. Net interest margin (on a tax equivalent basis) was 3.53 percent in the third quarter 2005, down from 3.58 percent in the prior year third quarter and unchanged from the second quarter 2005. During third quarter 2005, the yield on average interest earning assets increased by 28 basis points while total cost of funds increased by 27 basis points from second quarter 2005 due primarily to increases in the prime rate and other short-term interest rates. The provision for loan losses was $2.0 million in the third quarter 2005, compared to $0.9 million in the prior year third quarter and $1.9 million in the second quarter 2005. The increase in the provision for loan losses reflects the impact of continued strong loan growth offset by net recoveries of $686,000 in the third quarter 2005, primarily due to the recovery of a single-family residential real estate credit. Net charge offs of $404,000 were recognized in the prior year quarter and net charge offs of $310,000 were recognized in the second quarter 2005. The allowance for loan losses as a percentage of total loans was 1.15 percent as of September 30, 2005, unchanged from June 30, 2005 and down from 1.21 percent at September 30, 2004. At September 30, 2005, nonperforming loans as a percentage of total loans were 0.05 percent, down from 0.15 percent at June 30, 2005 and 0.17 percent at September 30, 2004. Non interest income increased to $5.5 million in third quarter 2005 from $4.0 million in third quarter 2004, an increase of 35 percent. The growth in non interest income during the third quarter 2005 as compared to the prior year third quarter was driven primarily by growth in 2 wealth management income and mortgage banking income, as well as the net effect of an interest rate swap gain offset by securities losses. Wealth management fee income increased to $2.6 million for the third quarter 2005, up from $2.1 million in the third quarter 2004 and up from $2.4 million in the second quarter 2005. The PrivateBank - Michigan wealth management fee income and mortgage banking income were $333,000 and $265,000 for the third quarter 2005, respectively. Wealth management assets under management increased 27 percent to $2.1 billion at September 30, 2005 compared to $1.6 billion at September 30, 2004 and up $77.1 million from $2.0 billion at June 30, 2005. Excluding Michigan, wealth management assets under management increased by 12 percent year over year. Mortgage banking income grew 65 percent to $1.3 million for the third quarter 2005 compared to $0.8 million for the third quarter 2004 and up 19 percent compared to $1.1 million during the second quarter 2005. For the third quarter 2005, a $644,000 gain from an interest rate swap combined with securities losses of $249,000 resulted in $395,000 of other income, compared to $141,000 in the third quarter 2004 and $73,000 in the second quarter 2005. Non interest expense increased to $16.6 million in the third quarter 2005 from $11.9 million in the prior year quarter and $12.8 million in the second quarter 2005. The increase in non interest expense as compared to the third quarter 2004 is primarily attributable to the acquisition of The PrivateBank - Michigan, which had non interest expense of $2.4 million for the quarter. Non interest expense excluding the impact of The PrivateBank - Michigan was $14.2 million for the third quarter 2005, reflecting a 19 percent increase from the prior year quarter, primarily due to increases in personnel, occupancy and marketing costs. The second quarter 2005 results included 11 days of The PrivateBank - Michigan expenses. The Company continues to add experienced managing directors to support continued growth. Full-time equivalent employees at quarter's end increased to 366 from 253 at September 30, 2004 and from 362 at June 30, 2005 reflecting 73 people added in connection with the acquisition of The PrivateBank - Michigan. At September 30, 2005, the Company had 109 managing directors compared to 72 at September 30, 2004 and 105 managing directors at June 30, 2005. The efficiency ratio was 50 percent in the third quarter 2005 compared to 50 percent in the prior year quarter and 47 percent in the second quarter 2005. 3 Total assets were $3.3 billion at September 30, 2005, an increase of 42 percent from $2.4 billion at September 30, 2004, and an increase of 4 percent from $3.2 billion at June 30, 2005. Total assets of The PrivateBank - Michigan were $430.6 million at September 30, 2005. At September 30, 2005, total loans were $2.4 billion, versus $1.5 billion at September 30, 2004 and $2.2 billion at June 30, 2005. Total loans of The PrivateBank - Michigan were $362.4 million at September 30, 2005. Investment securities were $720.1 million at September 30, 2005, down from $769.2 million at June 30, 2005 and $759.3 million at September 30, 2004. The decrease in the investment portfolio was due to the combined effect of run-off of mortgage-related securities and continued redemption of Federal Home Loan Bank of Chicago ("FHLB Chicago") stock. During the third quarter 2005, the Company redeemed $20.0 million of FHLB Chicago stock, reducing the investment to $147.0 million from $167.0 million at June 30, 2005. Early in the fourth quarter 2005 an additional $10.0 million of FHLB stock was redeemed further reducing the investment to $137.0 million. During the third quarter 2005, the annualized yield paid by the FHLB Chicago was reduced to 5.0 percent from 5.5 percent yield paid during the second quarter 2005. Total deposits were $2.6 billion at September 30, 2005, up from $1.8 billion at September 30, 2004 and up from $2.4 billion at June 30, 2005. The PrivateBank - Michigan contributed deposits of $306.3 million to the consolidated total at September 30, 2005. Core deposits, defined as total deposits less brokered deposits, increased 41 percent to $2.0 billion compared to $1.5 billion at September 30, 2004, and were up $22.0 million, or 1 percent, from $2.0 billion at June 30, 2005. Brokered deposits were $528.7 million at September 30, 2005, up 48 percent from $356.4 million at September 30, 2004 and up $142.9 million, or 37 percent, from $385.7 million at June 30, 2005. Funds borrowed, which include Federal Home Loan Bank advances, increased 39 percent to $417.7 million at September 30, 2005 from $301.6 million at September 30, 2004, and decreased 10 percent from $464.8 million at June 30, 2005. At September 30, 2005, the Company had $327.1 million in outstanding FHLB advances. PrivateBancorp, Inc. was organized in 1989 to provide highly personalized financial 4 services primarily to affluent individuals, professionals, owners of closely-held businesses and commercial real estate investors. The Company uses a European tradition of "private banking" as a model to develop lifetime relationships with its clients. Utilizing a team of highly qualified managing directors, The PrivateBank tailors products and services to meet each client's needs in personal and commercial banking services and wealth management services. The Company, which had assets of $3.3 billion as of September 30, 2005, has 13 offices located in the Chicago, Detroit, Milwaukee, and St. Louis metropolitan areas. 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, fluctuations in market rates of interest and loan and deposit pricing, greater than anticipated deterioration in asset quality due to a prolonged economic downturn in the greater Chicago, Detroit, Milwaukee, and St. Louis metropolitan areas, legislative or regulatory changes, adverse developments in the Company's loan or investment portfolios, changes in the current redemption practices of the FHLB Chicago relating to its stock, slower than anticipated growth of the Company's business or unanticipated business declines, unforeseen difficulties in the continued integration of The PrivateBank - Michigan or higher than expected operational costs, unexpected difficulties in the continued integration of or in operating our mortgage banking business, unanticipated construction or other delays relating to our new office to be located in Milwaukee, Wisconsin, competition 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. Editor's Note: Financial highlights attached. 5 [LOGO] CONSOLIDATED STATEMENTS OF INCOME (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2005 2004 2005 2004 ----------- ------------ ------------ ------------ UNAUDITED UNAUDITED UNAUDITED UNAUDITED INTEREST INCOME Interest and fees on loans........... $ 39,580 $ 20,315 $ 94,369 $ 56,697 Interest on investment securities.... 9,093 8,436 27,734 24,185 Interest on short-term investments... 166 18 293 28 ----------- ------------ ------------ ------------ TOTAL INTEREST INCOME 48,839 28,769 122,396 80,910 ----------- ------------ ------------ ------------ INTEREST EXPENSE Interest on deposits................. 16,811 8,227 41,649 21,475 Interest on borrowings............... 4,387 1,572 9,611 4,610 Interest on long-term debt - trust preferred securities.............. 1,377 485 2,453 1,455 ----------- ------------ ------------ ------------ TOTAL INTEREST EXPENSE 22,575 10,284 53,713 27,540 ----------- ------------ ------------ ------------ NET INTEREST INCOME 26,264 18,485 68,683 53,370 Provision for loan losses............ 2,046 851 4,848 2,901 ----------- ------------ ------------ ------------ NET INTEREST INCOME AFTER PROVISION 24,218 17,634 63,835 50,469 ----------- ------------ ------------ ------------ NON INTEREST INCOME Wealth management income............. 2,627 2,117 7,174 6,204 Mortgage banking income.............. 1,284 776 3,102 2,022 Other income......................... 1,165 1,006 2,915 2,125 Net securities (losses) gains ....... (249) 1,259 691 1,091 Gains (losses) on interest rate swap. 644 (1,118) 152 (859) ----------- ------------ ------------ ------------ TOTAL NON INTEREST INCOME 5,471 4,040 14,034 10,583 ----------- ------------ ------------ ------------ NON INTEREST EXPENSE Salaries and benefits................ 9,408 6,811 23,584 18,903 Occupancy expense.................... 1,963 1,394 5,505 4,104 Professional fees.................... 1,580 1,407 4,020 3,972 Marketing............................ 1,150 628 2,409 1,825 Data processing...................... 803 520 2,012 1,480 Amortization of intangibles.......... 156 42 255 126 Insurance............................ 275 221 808 642 Other operating expenses............. 1,221 860 3,209 2,590 ----------- ------------ ------------ ------------ TOTAL NON INTEREST EXPENSE 16,556 11,883 41,802 33,642 ----------- ------------ ------------ ------------ Minority interest expense............ 82 74 231 206 ----------- ------------ ------------ ------------ INCOME BEFORE INCOME TAXES........... 13,051 9,717 35,836 27,204 ----------- ------------ ------------ ------------ Income tax expense................... 4,186 2,654 11,266 7,735 ----------- ------------ ------------ ------------ NET INCOME $ 8,865 $ 7,063 $ 24,570 $ 19,469 =========== ============ ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING 20,408,238 19,921,465 20,129,908 19,684,867 DILUTED AVERAGE SHARES OUTSTANDING 21,373,287 20,947,078 21,037,915 20,660,588 EARNINGS PER SHARE Basic................................ $ 0.43 $ 0.35 $ 1.22 $ 0.99 Diluted.............................. $ 0.41 $ 0.34 $ 1.17 $ 0.94
NOTE 1: Certain reclassifications have been made to prior period statements to place them on a basis comparable with the current period financial statements. 6 [LOGO] CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
09/30/05 12/31/04 09/30/04 ---------- ---------- ---------- UNAUDITED AUDITED UNAUDITED ASSETS Cash and due from banks..................... $43,246 $49,534 $44,814 Short-term investments...................... 11,179 1,120 11,004 Investment securities: available-for-sale... 720,055 763,985 759,328 Loans held for sale......................... 9,104 7,200 8,014 Loans....................................... 2,421,725 1,653,363 1,471,083 Allowance for loan losses................... (27,884) (18,986) (17,751) ---------- ---------- ---------- Net loans................................... 2,393,841 1,634,377 1,453,332 Premises and equipment, net................. 9,798 6,486 6,013 Goodwill.................................... 63,160 20,547 20,547 Other assets................................ 75,315 52,568 49,314 ---------- ---------- ---------- TOTAL ASSETS................................ $3,325,698 $2,535,817 $2,352,366 ========== ========== ========== LIABILITIES Non-interest bearing deposits............... $ 261,808 $ 165,170 $ 170,315 Interest bearing deposits................... 2,310,426 1,707,465 1,638,217 ---------- ---------- ---------- Total deposits.............................. 2,572,234 1,872,635 1,808,532 ---------- ---------- ---------- Funds borrowed.............................. 417,664 414,519 301,558 Long-term debt - trust preferred securities. 78,000 20,000 20,000 Other liabilities........................... 29,995 34,590 35,241 ---------- ---------- ---------- TOTAL LIABILITIES........................... 3,097,893 2,341,744 2,165,331 ---------- ---------- ---------- STOCKHOLDERS' EQUITY Common stock and additional paid-in-capital. 133,858 120,491 119,528 Treasury stock.............................. (2,635) (2,207) (1,875) Retained earnings........................... 96,783 73,789 64,136 Accumulated other comprehensive income...... 8,161 7,056 9,842 Deferred compensation....................... (8,362) (5,056) (4,596) ---------- ---------- ---------- TOTAL STOCKHOLDERS' EQUITY.................. 227,805 194,073 187,035 ---------- ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.. $3,325,698 $2,535,817 $2,352,366 ========== ========== ========== BOOK VALUE PER SHARE........................ $ 10.86 $ 9.51 $ 9.19
NOTE 1: Certain reclassifications have been made to prior period statements to place them on a basis comparable with the current period financial statements. 7 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
3Q05 2Q05 1Q05 4Q04 3Q04 ---------- ---------- ---------- ---------- ---------- KEY STATISTICS Net income.................... $ 8,865 $ 7,899 $ 7,806 $ 7,526 $ 7,063 Basic earnings per share...... $ 0.43 $ 0.39 $ 0.39 $ 0.38 $ 0.35 Diluted earnings per share.... $ 0.41 $ 0.38 $ 0.37 $ 0.36 $ 0.34 Return on average total assets..................... 1.09% 1.18% 1.24% 1.24% 1.23% Return on average total equity..................... 15.94% 15.45% 15.81% 15.65% 15.29% Dividend payout ratio......... 10.62% 11.73% 11.77% 8.11% 8.63% Fee revenue as a percent of total revenue (1).......... 16.20% 16.89% 15.98% 16.03% 17.41% Wealth management assets under management........... 2,061,510 1,984,371 1,735,292 1,727,479 1,620,487 Non-interest income to average assets............. 0.67% 0.67% 0.68% 0.61% 0.71% Non-interest expense to average assets............. 2.03% 1.92% 2.01% 1.98% 2.08% Net overhead ratio (2)........ 1.36% 1.25% 1.32% 1.37% 1.37% Efficiency ratio (3).......... 50.4% 46.8% 48.1% 48.3% 50.0% NET INTEREST MARGIN Fed funds sold & other short-term investments..... 3.59% 2.89% 3.21% 2.49% 1.79% Investment Securities (taxable).................. 4.96% 5.05% 5.07% 4.94% 4.50% Investment Securities (non-taxable).............. 6.96% 6.96% 6.95% 6.85% 6.81% Loans, net of unearned discount................... 6.76% 6.43% 6.09% 5.83% 5.57% ---------- ---------- ---------- ---------- ---------- Yield on average earning assets..................... 6.44% 6.16% 5.93% 5.70% 5.46% ---------- ---------- ---------- ---------- ---------- Interest bearing deposits..... 3.04% 2.88% 2.58% 2.28% 2.05% Funds borrowed................ 3.66% 3.12% 2.76% 2.34% 2.09% Trust preferred securities.... 7.06% 8.69% 9.70% 9.70% 9.70% ---------- ---------- ---------- ---------- ---------- Cost of average interest-bearing liabilities................ 3.26% 2.99% 2.68% 2.36% 2.14% ---------- ---------- ---------- ---------- ---------- Net interest spread (4)....... 3.18% 3.17% 3.25% 3.34% 3.32% Net interest margin (5)....... 3.53% 3.53% 3.57% 3.63% 3.58% Tax equivalent adjustment to net interest income (6). $ 1,132 $ 1,125 $ 1,107 $ 1,040 $ 1,224 (1) Represents wealth management, mortgage banking and other income as a percentage of the sum of net interest income and wealth management, mortgage banking and other income. (2) Non-interest expense less non-interest income divided by average total assets. (3) Non-interest expense divided by the sum of net interest income, on a tax equivalent basis, plus non-interest income. (4) Yield on average interest-earning assets less rate on average interest-bearing liabilities. (5) Net interest income, on a tax equivalent basis, divided by average interest-earning assets. (6) The company adjusts GAAP reported net interest income by the tax equivalent adjustment amount to account for the tax attributes on federally tax exempt municipal securities. For GAAP purposes, tax benefits associated with federally tax exempt municipal securities are recorded as a benefit in income tax expense. The following table reconciles reported net interest income to net interest income on a tax equivalent basis for the periods presented:
RECONCILIATION OF NET INTEREST INCOME TO NET INTEREST INCOME ON A TAX EQUIVALENT BASIS
3Q05 2Q05 1Q05 4Q04 3Q04 ------- ------- ------- ------- ------- Net interest income............................... $26,264 $21,792 $20,627 $20,172 $18,485 Tax equivalent adjustment to net interest income.. 1,132 1,125 1,107 1,040 1,224 ------- ------- ------- ------- ------- Net interest income, tax equivalent basis......... $27,396 $22,917 $21,734 $21,212 $19,709 ------- ------- ------- ------- -------
8 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
3Q05 2Q05 1Q05 4Q04 3Q04 ----------- ----------- ----------- ----------- ----------- BALANCE SHEET RATIOS Loans to Deposits (period end)................ 94.15% 91.08% 86.35% 88.29% 81.34% Average interest-earning assets to average interest-bearing liabilities............... 111.7 113.6 113.5 114.1 114.0 PER SHARE DATA Dividends..................................... $ 0.045 $ 0.045 $ 0.045 $ 0.030 $ 0.030 Book value (period end)....................... $ 10.86 $ 10.51 $ 9.79 $ 9.51 $ 9.19 Tangible book value (period end)(1)........... $ 7.58 $ 7.22 $ 8.68 $ 8.40 $ 8.07 SHARE PRICE DATA (PERIOD END) Closing Price................................. $ 34.28 $ 35.38 $ 31.41 $ 32.23 $ 26.96 Diluted earnings multiple(2).................. 21.07x 23.21x 20.93x 22.57x 19.99x Book value multiple........................... 3.16x 3.37x 3.21x 3.39x 2.93x COMMON STOCK INFORMATION Outstanding shares at end of period........... 20,978,119 20,928,869 20,467,143 20,400,103 20,346,303 NUMBER OF SHARES USED TO COMPUTE: Basic earnings per share...................... 20,408,238 20,065,931 19,973,853 19,911,662 19,921,465 Diluted earnings per share.................... 21,373,287 20,971,907 20,998,095 20,992,893 20,947,078 CAPITAL RATIOS (PERIOD END)(3): Total equity to total assets.................. 6.85% 6.87% 7.70% 7.65% 7.95% Total risk-based capital ratio................ 10.13% 10.60% 11.07% 11.29% 11.80% Tier-1 risk-based capital ratio............... 8.67% 9.18% 10.03% 10.24% 10.71% Leverage ratio................................ 7.07% 7.94% 7.61% 7.71% 7.74% (1) Tangible book value is total capital less goodwill and other intangibles divided by outstanding shares at end of period. (2) Period end closing stock price divided by annualized quarterly earnings for the quarter then ended. (3) Capital ratios for the most recent period presented in the press release are based on preliminary data.
9 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS)
3Q05 2Q05 1Q05 4Q04 3Q04 ------- ------- ------- ------- ------- SUMMARY INCOME STATEMENT INTEREST INCOME Interest and fees on loans............ $39,580 $29,198 $25,591 $22,802 $20,315 Interest on investment securities..... 9,093 9,428 9,213 9,386 8,436 Interest on short-term investments.... 166 93 34 12 18 ------- ------- ------- ------- ------- TOTAL INTEREST INCOME.................... 48,839 38,719 34,838 32,200 28,769 INTEREST EXPENSE......................... 22,575 16,927 14,211 12,028 10,284 ------- ------- ------- ------- ------- NET INTEREST INCOME...................... 26,264 21,792 20,627 20,172 18,485 Provision for loan losses............. 2,046 1,900 902 1,498 851 ------- ------- ------- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES....................... 24,218 19,892 19,725 18,674 17,634 ------- ------- ------- ------- ------- NON INTEREST INCOME Wealth management income.............. 2,627 2,350 2,198 2,113 2,117 Mortgage banking income............... 1,284 1,076 742 834 776 Other income.......................... 1,165 885 865 903 1,006 Net securities (losses) gains......... (249) 1,045 (105) (123) 1,259 Gains (losses) on interest rate swap 644 (972) 479 (11) (1,118) ------- ------- ------- ------- ------- TOTAL NON INTEREST INCOME................ 5,471 4,384 4,179 3,716 4,040 ------- ------- ------- ------- ------- NON INTEREST EXPENSE Salaries and benefits................. 9,408 7,158 7,018 7,124 6,811 Occupancy expense..................... 1,963 1,804 1,738 1,567 1,394 Professional fees..................... 1,580 1,225 1,215 1,082 1,407 Marketing............................. 1,150 645 614 695 628 Data processing....................... 803 627 582 529 520 Insurance............................. 275 270 263 276 221 Amortization of intangibles........... 156 57 42 42 42 Other operating expenses.............. 1,221 995 993 717 860 ------- ------- ------- ------- ------- TOTAL NON INTEREST EXPENSE............... 16,556 12,781 12,465 12,032 11,883 ------- ------- ------- ------- ------- Minority interest expense............. 82 73 76 64 74 ------- ------- ------- ------- ------- INCOME BEFORE INCOME TAXES............... 13,051 11,422 11,363 10,294 9,717 Income tax expense.................... 4,186 3,523 3,557 2,768 2,654 ------- ------- ------- ------- ------- NET INCOME .............................. $ 8,865 $ 7,899 $ 7,806 $ 7,526 $ 7,063 ======= ======= ======= ======= =======
10 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS)
3Q05 2Q05 1Q05 4Q04 3Q04 ------- ------- ------- ------- ------- CREDIT QUALITY KEY RATIOS Net charge-offs (recoveries) to average loans..................................... -0.12% 0.07% -0.01% 0.07% 0.11% Total non-performing loans to total loans.... 0.05% 0.15% 0.16% 0.15% 0.17% Total non-performing assets to total assets.. 0.04% 0.11% 0.11% 0.10% 0.10% Nonaccrual loans to: total loans............................... 0.02% 0.06% 0.08% 0.07% 0.05% total assets.............................. 0.01% 0.04% 0.06% 0.04% 0.03% Allowance for loan losses to: total loans............................... 1.15% 1.15% 1.15% 1.15% 1.21% non-performing loans...................... 1954% 689% 717% 751% 729% nonaccrual loans.......................... 5908% 2076% 1377% 1742% 2228% NON-PERFORMING ASSETS: Loans delinquent over 90 days............. $ 744 $ 2,026 $ 1,335 $ 1,438 $ 1,638 Nonaccrual loans.......................... 472 1,212 1,448 1,090 797 OREO...................................... 211 413 - - - ------- ------- ------- ------- ------- Total non-performing assets.................. $ 1,427 $ 3,651 $ 2,783 $ 2,528 $ 2,435 ======= ======= ======= ======= ======= NET LOAN CHARGE-OFFS (RECOVERIES): Loans charged off............................ $19 $ 328 $ 3 $ 330 $ 831 (Recoveries)................................. (705) (18) (63) (67) (427) ------- ------- ------- ------- ------- Net charge-offs (recoveries)................. ($ 686) $ 310 ($ 60) $ 263 $ 404 ======= ======= ======= ======= ======= PROVISION FOR LOAN LOSSES....................... $ 2,046 $ 1,900 $ 902 $ 1,498 $ 851 ======= ======= ======= ======= ======= ALLOWANCE FOR LOAN LOSSES SUMMARY Balance at beginning of period (1)........... $25,152 $23,562 $18,986 $17,751 $17,304 Provision.................................... 2,046 1,900 902 1,498 851 Net charge-offs (recoveries)................. (686) 310 (60) 263 404 ------- ------- ------- ------- ------- Balance at end of period..................... $27,884 $25,152 $19,948 $18,986 $17,751 ======= ======= ======= ======= ======= NET LOAN CHARGE-OFFS (RECOVERIES): Commercial real estate....................... - - - - - Residential real estate...................... - - - - - Commercial................................... ($ 115) $ 270 ($ 60) $ 184 ($ 314) Personal..................................... ($ 571) $ 40 - 79 718 Home equity.................................. - - - - - Construction................................. - - - - - ------- ------- ------- ------- ------- Total net loan charge-offs (recoveries)...... ($ 686) $ 310 ($ 60) $ 263 $ 404 ======= ======= ======= ======= ======= (1) The 2Q05 beginning balance includes The PrivateBank - Michigan allowance at acquisition date June 20, 2005.
11 [LOGO] BALANCE SHEETS (DOLLARS IN THOUSANDS)
UNAUDITED UNAUDITED UNAUDITED AUDITED UNAUDITED 09/30/05 06/30/05 03/31/05 12/31/04 09/30/04 ---------- ---------- ---------- ---------- ---------- ASSETS - ------ Cash and due from banks...................... $ 43,246 $ 33,359 $ 29,943 $ 49,534 $ 44,814 Short-term investments....................... 11,179 74,873 5,047 1,120 11,004 Investment securities: available-for-sale.... 720,055 769,218 764,917 763,985 759,328 Loans held for sale.......................... 9,104 12,532 8,678 7,200 8,014 Loans........................................ 2,421,725 2,192,542 1,729,882 1,653,363 1,471,083 Less: Allowance for loan losses.......... (27,884) (25,152) (19,948) (18,986) (17,751) ---------- ---------- ---------- ---------- ---------- Net loans................................. 2,393,841 2,167,390 1,709,934 1,634,377 1,453,332 ---------- ---------- ---------- ---------- ---------- Premises and equipment, net.................. 9,798 8,580 6,990 6,486 6,013 Goodwill..................................... 63,160 62,981 20,547 20,547 20,547 Other assets................................. 75,315 73,139 55,634 52,568 49,314 ---------- ---------- ---------- ---------- ---------- Total Assets........................... $3,325,698 $3,202,072 $2,601,690 $2,535,817 $2,352,366 ========== ========== ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Non-interest bearing deposits................ $ 261,808 $ 245,019 $ 173,558 $ 165,170 $ 170,315 Interest bearing demand deposits............. 121,696 118,089 100,598 106,846 89,538 Savings and money market deposits............ 1,108,299 1,153,918 1,016,876 854,163 864,794 Time deposits................................ 1,080,431 890,315 712,207 746,456 683,885 ---------- ---------- ---------- ---------- ---------- Total deposits............................ 2,572,234 2,407,341 2,003,239 1,872,635 1,808,532 Funds borrowed............................... 417,664 464,799 340,737 414,519 301,558 Long-term debt - Trust Preferred Securities.. 78,000 78,000 20,000 20,000 20,000 Other liabilities............................ 29,995 32,026 37,342 34,590 35,241 ---------- ---------- ---------- ---------- ---------- Total liabilities......................... 3,097,893 2,982,166 2,401,318 2,341,744 2,165,331 Stockholders' equity ........................ 227,805 219,906 200,372 194,073 187,035 ---------- ---------- ---------- ---------- ---------- Total Liabilities and Stockholders' Equity............................... $3,325,698 $3,202,072 $2,601,690 $2,535,817 $2,352,366 ========== ========== ========== ========== ==========
12 [LOGO] AVERAGE QUARTERLY BALANCE SHEETS (UNAUDITED, DOLLARS IN THOUSANDS)
09/30/05 06/30/05 03/31/05 12/31/04 09/30/04 ---------- ---------- ---------- ---------- ---------- ASSETS - ------ Cash and due from banks...................... $ 34,513 $ 28,483 $ 32,559 $ 27,459 $ 26,706 Short-term investments....................... 18,234 12,643 4,245 1,878 3,949 Investment securities: available-for-sale.... 749,461 768,523 752,794 775,602 744,446 Loans held for sale.......................... 9,644 8,517 7,339 6,324 4,704 Loans........................................ 2,305,517 1,803,580 1,686,713 1,535,642 1,432,003 Less: Allowance for loan losses.......... (26,271) (20,665) (19,360) (18,167) (17,781) ---------- ---------- ---------- ---------- ---------- Net loans................................. 2,279,246 1,782,915 1,667,353 1,517,475 1,414,222 ---------- ---------- ---------- ---------- ---------- Premises and equipment, net.................. 9,248 7,241 6,966 6,251 5,788 Goodwill..................................... 62,982 25,486 20,547 20,547 20,547 Other assets................................. 74,293 62,007 53,770 52,493 51,115 ---------- ---------- ---------- ---------- ---------- Total Assets........................... $3,237,621 $2,695,815 $2,545,573 $2,408,029 $2,271,477 ========== ========== ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Non-interest bearing deposits................ $ 238,632 $ 190,477 $ 171,845 $ 168,942 $ 157,312 Interest bearing demand deposits............. 119,060 110,956 100,843 99,758 89,754 Savings and money market deposits............ 1,120,336 1,038,059 918,113 867,787 780,746 Time deposits................................ 957,640 743,221 748,909 688,156 719,528 ---------- ---------- ---------- ---------- ---------- Total deposits............................ 2,435,668 2,082,713 1,939,710 1,824,643 1,747,340 Funds borrowed............................... 468,681 348,216 357,712 342,184 293,942 Long-term debt - Trust Preferred Securities.. 78,000 27,229 20,000 20,000 20,000 Other liabilities............................ 34,645 32,583 28,046 30,412 26,901 ---------- ---------- ---------- ---------- ---------- Total liabilities......................... 3,016,994 2,490,741 2,345,468 2,217,239 2,088,183 Stockholders' equity ........................ 220,627 205,074 200,105 190,790 183,294 ---------- ---------- ---------- ---------- ---------- Total Liabilities and Stockholders' Equity............................... $3,237,621 $2,695,815 $2,545,573 $2,408,029 $2,271,477 ========== ========== ========== ========== ==========
13 [LOGO] AVERAGE YEAR-TO-DATE BALANCE SHEETS (UNAUDITED, DOLLARS IN THOUSANDS)
09/30/05 06/30/05 03/31/05 12/31/04 09/30/04 ---------- ---------- ---------- ---------- ---------- ASSETS - ------ Cash and due from banks...................... $ 31,856 $ 30,370 $ 32,559 $ 30,387 $ 31,557 Short-term investments....................... 10,824 8,540 4,245 2,358 2,468 Investment securities: available-for-sale.... 756,915 760,700 752,794 731,152 727,466 Loans held for sale.......................... 8,431 8,710 7,339 7,028 5,350 Loans........................................ 1,934,324 1,744,754 1,686,713 1,399,849 1,365,261 Less: Allowance for loan losses.......... (22,124) (20,016) (19,360) (17,087) (16,844) ---------- ---------- ---------- ---------- ---------- Net loans................................. 1,912,200 1,724,738 1,667,353 1,382,762 1,348,417 ---------- ---------- ---------- ---------- ---------- Premises and equipment, net.................. 7,827 7,104 6,966 6,013 5,895 Goodwill..................................... 36,557 23,116 20,547 20,850 20,917 Other assets................................. 64,050 58,612 53,770 39,735 35,278 ---------- ---------- ---------- ---------- ---------- Total Assets........................... $2,828,660 $2,621,890 $2,545,573 $2,220,285 $2,177,348 ========== ========== ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Non-interest bearing deposits................ $ 200,704 $ 181,274 $ 171,845 $ 151,588 $ 147,818 Interest bearing demand deposits............. 110,353 105,927 100,843 90,888 87,906 Savings and money market deposits............ 1,026,205 978,402 918,113 722,923 683,121 Time deposits................................ 817,344 746,049 748,909 712,399 734,053 ---------- ---------- ---------- ---------- ---------- Total deposits............................ 2,154,606 2,011,652 1,939,710 1,677,798 1,652,898 Funds borrowed............................... 390,919 352,931 357,712 315,719 302,291 Long-term debt - Trust Preferred Securities.. 41,743 23,615 20,000 20,000 20,000 Other liabilities............................ 32,347 30,963 28,046 26,370 24,646 ---------- ---------- ---------- ---------- ---------- Total liabilities......................... 2,619,615 2,419,161 2,345,468 2,039,887 1,999,835 Stockholders' equity ........................ 209,045 202,729 200,105 180,398 177,513 ---------- ---------- ---------- ---------- ---------- Total Liabilities and Stockholders' Equity............................... $2,828,660 $2,621,890 $2,545,573 $2,220,285 $2,177,348 ========== ========== ========== ========== ==========
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