10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number 001-34066

PRIVATEBANCORP, INC.

(Exact name of Registrant as specified in its charter)

Delaware	36-3681151
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
120 South LaSalle Street, Chicago, Illinois	60603
(Address of principal executive offices)	(zip code)

(312) 564-2000

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 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  þ    No  ¨

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  þ    No  ¨

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.

Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

As of November 2, 2011, there were 71,799,558 shares of the issuer’s voting and non-voting common stock, without par value, outstanding.

PRIVATEBANCORP, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
Part I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)		3
	Consolidated Statements of Financial Condition		3
	Consolidated Statements of Income		5
	Consolidated Statements of Changes in Equity		6
	Consolidated Statements of Cash Flows		7
	Notes to Consolidated Financial Statements		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		95
Item 4.	Controls and Procedures		96
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings		97
Item 1A.	Risk Factors		97
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		98
Item 3.	Defaults Upon Senior Securities		98
Item 4.	[Removed and Reserved]		98
Item 5.	Other Information		98
Item 6.	Exhibits		99
Signatures			101

2

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PRIVATEBANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Amounts in thousands)

	September 30, 2011			December 31, 2010
Assets		(Unaudited	)		(Audited	)
Cash and due from banks	$	171,268		$	112,772
Federal funds sold and other short-term investments		248,559			541,316
Loans held for sale		24,126			30,758
Securities available-for-sale, at fair value		1,872,587			1,881,786
Securities held-to-maturity, at amortized cost (fair value: $272.9 million – 2011)		273,200			—
Non-marketable equity investments		43,894			23,537
Loans – excluding covered assets, net of unearned fees		8,674,955			9,114,357
Allowance for loan losses		(200,041	)		(222,821	)
Loans, net of allowance for loan losses and unearned fees		8,474,914			8,891,536
Covered assets		318,973			397,210
Allowance for covered loan losses		(16,689	)		(15,334	)
Covered assets, net of allowance for covered loan losses		302,284			381,876
Other real estate owned, excluding covered assets		116,364			88,728
Premises, furniture, and equipment, net		39,069			40,975
Accrued interest receivable		32,686			33,854
Investment in bank owned life insurance		50,565			49,408
Goodwill		94,584			94,621
Other intangible assets		15,715			16,840
Capital markets derivative assets		111,248			100,250
Other assets		148,798			177,364
Total assets	$	12,019,861		$	12,465,621
Liabilities
Demand deposits:
Noninterest-bearing	$	2,832,481		$	2,253,661
Interest-bearing		611,293			616,761
Savings deposits and money market accounts		4,392,697			4,821,823
Brokered deposits		902,002			1,450,827
Time deposits		1,370,190			1,392,357
Total deposits		10,108,663			10,535,429
Short-term borrowings		59,154			118,561
Long-term debt		379,793			414,793
Accrued interest payable		5,841			5,968
Capital markets derivative liabilities		113,968			102,018
Other liabilities		66,266			60,942
Total liabilities		10,733,685			11,237,711
Equity
Preferred stock – Series B		240,020			238,903
Common stock:
Voting		67,684			67,436
Nonvoting		3,536			3,536
Treasury stock		(20,680	)		(20,054	)
Additional paid-in capital		965,640			954,977
Accumulated deficit		(16,075	)		(36,999	)
Accumulated other comprehensive income, net of tax		46,051			20,078
Total stockholders’ equity		1,286,176			1,227,877
Noncontrolling interests		—			33
Total equity		1,286,176			1,227,910
Total liabilities and equity	$	12,019,861		$	12,465,621

See accompanying notes to consolidated financial statements.

3

PRIVATEBANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION – (Continued)

(Amounts in thousands, except per share data)

	September 30, 2011						December 31, 2010
	Preferred		Common Stock				Preferred		Common Stock
	Stock-Series B		Voting		Nonvoting		Stock-Series B		Voting		Nonvoting
Per Share Data
Par value		None		None		None		None		None		None
Liquidation value	$	1,000		n/a		n/a	$	1,000		n/a		n/a
Stated value		None	$	1.00	$	1.00		None	$	1.00	$	1.00
Share Balances
Shares authorized		1,000		174,000		5,000		1,000		174,000		5,000
Shares issued		244		68,955		3,536		244		68,443		3,536
Shares outstanding		244		68,253		3,536		244		67,791		3,536
Treasury shares		—		702		—		—		652		—

n/a Not applicable

See accompanying notes to consolidated financial statements.

4

PRIVATEBANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

	Quarters Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Interest Income
Loans, including fees	$	102,174	$	105,608	$	310,212	$	329,509
Federal funds sold and other short-term investments		231		376		966		1,584
Securities:
Taxable		15,196		16,996		46,154		48,863
Exempt from Federal income taxes		1,293		1,661		4,166		5,131
Total interest income		118,894		124,641		361,498		385,087
Interest Expense
Interest-bearing demand deposits		625		675		1,854		2,446
Savings deposits and money market accounts		5,356		8,512		18,100		26,994
Brokered and time deposits		5,895		8,130		19,115		29,091
Short-term borrowings		466		1,297		1,859		4,126
Long-term debt		5,463		7,068		16,425		21,820
Total interest expense		17,805		25,682		57,353		84,477
Net interest income		101,089		98,959		304,145		300,610
Provision for loan and covered loan losses		32,615		41,435		101,286		159,375
Net interest income after provision for loan and covered loan losses		68,474		57,524		202,859		141,235
Non-interest Income
Trust and Investments		4,452		4,306		13,834		13,566
Mortgage banking		1,565		2,790		3,671		6,708
Capital markets products		5,510		3,104		13,870		7,495
Treasury management		5,016		4,406		14,640		12,295
Loan and credit related fees		5,413		4,236		16,601		11,817
Other income, service charges, and fees		1,309		1,489		4,831		3,627
Net securities gains		4,370		3,029		5,407		2,873
Total non-interest income		27,635		23,360		72,854		58,381
Non-interest Expense
Salaries and employee benefits		38,841		34,412		116,034		111,286
Net occupancy expense		7,515		7,508		22,592		22,550
Technology and related costs		2,856		2,310		8,246		7,777
Marketing		2,218		2,039		6,661		6,504
Professional services		2,434		2,708		7,080		9,911
Outsourced servicing costs		1,918		2,038		5,924		5,857
Net foreclosed property expenses		7,129		3,075		20,920		8,164
Postage, telephone, and delivery		944		779		2,763		2,610
Insurance		5,393		7,113		17,825		18,186
Loan and collection expense		2,931		3,405		9,731		10,594
Other expenses		2,855		2,690		8,271		14,011
Total non-interest expense		75,034		68,077		226,047		217,450
Income (loss) before income taxes		21,075		12,807		49,666		(17,834	)
Income tax provision (benefit)		7,593		4,786		16,192		(7,656	)
Net income (loss)		13,482		8,021		33,474		(10,178	)
Net income attributable to noncontrolling interests		33		71		163		217
Net income (loss) attributable to controlling interests		13,449		7,950		33,311		(10,395	)
Preferred stock dividends and discount accretion		3,426		3,405		10,260		10,198
Net income (loss) available to common stockholders	$	10,023	$	4,545	$	23,051	$	(20,593	)
Per Common Share Data
Basic	$	0.14	$	0.06	$	0.32	$	(0.29	)
Diluted	$	0.14	$	0.06	$	0.32	$	(0.29	)
Common dividends per share	$	0.01	$	0.01	$	0.03	$	0.03
Weighted-average common shares outstanding		70,479		70,067		70,418		69,999
Weighted-average diluted common shares outstanding		70,621		70,097		70,682		69,999

See accompanying notes to consolidated financial statements.

5

PRIVATEBANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands, except per share data)

(Unaudited)

	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Compre- hensive Income		Non- controlling Interests		Total
Balance at January 1, 2010	$	237,487	$	70,444	$	(18,489)	$	940,338	$	(22,093)	$	27,896	$	33	$	1,235,616
Comprehensive Income:
Net (loss) income		—		—		—		—		(10,395)		—		217		(10,178)
Other comprehensive income (1)		—		—		—		—		—		20,880		—		20,880
Total comprehensive income																10,702
Cash dividends:
Common stock ($0.03 per share)		—		—		—		—		(2,098)		—		—		(2,098)
Preferred stock		—		—		—		—		(9,143)		—		—		(9,143)
Issuance of common stock		—		—		—		(5)		—		—		—		(5)
Accretion of preferred stock discount		1,055		—		—		—		(1,055)		—		—		—
Common stock issued under benefit plans		—		208		—		2		—		—		—		210
Shortfall tax benefit from share-based compensation		—		—		—		(2,076)		—		—		—		(2,076)
Stock repurchased in connection with benefit plans		—		—		(534)		—		—		—		—		(534)
Share-based compensation expense		—		5		—		12,462		—		—		—		12,467
Balance at September 30, 2010	$	238,542	$	70,657	$	(19,023)	$	950,721	$	(44,784)	$	48,776	$	250	$	1,245,139
Balance at January 1, 2011	$	238,903	$	70,972	$	(20,054)	$	954,977	$	(36,999)	$	20,078	$	33	$	1,227,910
Comprehensive Income:
Net income		—		—		—		—		33,311		—		163		33,474
Other comprehensive income (1)		—		—		—		—		—		25,973		—		25,973
Total comprehensive income																59,447
Cash dividends:
Common stock ($0.03 per share)		—		—		—		—		(2,127)		—		—		(2,127)
Preferred stock		—		—		—		—		(9,143)		—		—		(9,143)
Issuance of common stock		—		—		—		32		—		—		—		32
Accretion of preferred stock discount		1,117		—		—		—		(1,117)		—		—		—
Common stock issued under benefit plans		—		213		—		872		—		—		—		1,085
Shortfall tax benefit from share-based compensation		—		—		—		(1,428)		—		—		—		(1,428)
Stock repurchased in connection with benefit plans		—		—		(626)		—		—		—		—		(626)
Share-based compensation expense		—		35		—		10,991		—		—		—		11,026
Noncontrolling interest activities		—		—		—		196		—		—		(196)		—
Balance at September 30, 2011	$	240,020	$	71,220	$	(20,680)	$	965,640	$	(16,075)	$	46,051	$	—	$	1,286,176

⁽¹⁾  Net of taxes and reclassification adjustments.

See accompanying notes to consolidated financial statements.

6

PRIVATEBANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2011			2010
Operating Activities
Net income (loss)	$	33,311		$	(10,395	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for loan and covered loan losses		101,286			159,375
Depreciation of premises, furniture, and equipment		6,437			5,795
Net amortization of premium on securities		9,176			5,114
Net gains on sale of securities		(5,407	)		(2,873	)
Net losses on sale of other real estate owned		6,832			1,028
Net accretion of discount on covered assets		(2,919	)		(17,410	)
Bank owned life insurance income		(1,157	)		(1,283	)
Net increase (decrease) in deferred loan fees		1,358			(730	)
Share-based compensation expense		11,223			12,793
Provision for deferred income tax expense (benefit)		5,731			(12,419	)
Net amortization of other intangibles		1,125			1,243
Change in loans held for sale		6,632			(15,908	)
Fair market value adjustments on derivatives		952			3,285
Net decrease in accrued interest receivable		1,168			865
Net decrease in accrued interest payable		(127	)		(2,070	)
Net decrease in other assets		17,611			23,773
Net increase (decrease) in other liabilities		4,829			(27,050	)
Net cash provided by operating activities		198,061			123,133
Investing Activities
Available-for-sale securities and non-marketable equity investments:
Proceeds from maturities, repayments, and calls		287,206			295,497
Proceeds from sales		280,082			197,841
Purchases		(540,047	)		(929,725	)
Held-to-maturity securities:
Proceeds from maturities, repayments, and calls		202			—
Purchases		(273,417	)		—
Net decrease (increase) in loans		217,292			(191,531	)
Net decrease in covered assets		81,997			107,103
Proceeds from sale of other real estate owned		51,813			45,733
Net purchases of premises, furniture, and equipment		(4,531	)		(6,798	)
Net cash provided by (used in) investing activities		100,597			(481,880	)
Financing Activities
Net (decrease) increase in deposit accounts		(426,766	)		638,558
Net decrease in short-term borrowings		(941	)		(2,324	)
Repayment of FHLB advances		(93,000	)		(126,000	)
Proceeds from (payments for) the issuance of common stock		32			(5	)
Stock repurchased in connection with benefit plans		(626	)		(534	)
Cash dividends paid		(11,275	)		(11,242	)
Exercise of stock options and restricted share activity		1,085			210
Shortfall tax benefit from exercise of stock options and release of restricted share activity		(1,428	)		(2,076	)
Net cash (used in) provided by financing activities		(532,919	)		496,587
Net (decrease) increase in cash and cash equivalents		(234,261	)		137,840
Cash and cash equivalents at beginning of year		654,088			539,095
Cash and cash equivalents at end of period	$	419,827		$	676,935
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	57,480		$	86,547
Cash paid for income taxes		18,272			6,552
Non-cash transfers of loans to other real estate		97,701			100,453

See accompanying notes to consolidated financial statements.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated interim financial statements of PrivateBancorp, Inc. (“PrivateBancorp” or the “Company”), a Delaware corporation, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include certain information and footnote disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete annual financial statements. Accordingly, these financial statements should be read in conjunction with the Company’s 2010 Annual Report on Form 10-K.

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with U.S. GAAP and reflect all adjustments that are, in the opinion of management, necessary for the fair presentation of the financial position and results of operations for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the quarter ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

The consolidated financial statements include the accounts and results of operations of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Certain reclassifications have been made to prior periods to conform to the current period presentation. U.S. GAAP requires management to make certain estimates and assumptions. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.

In preparing the consolidated financial statements, we have considered the impact of events occurring subsequent to September 30, 2011 for potential recognition or disclosure.

2. NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Pronouncements

Disclosures on Loan Credit Quality and Allowance for Credit Losses – On December 31, 2010, we adopted new accounting guidance issued by the Financial Accounting Standards Board (“FASB”) related to improving disclosures about an entity’s allowance for loan losses and the credit quality of its loans. The guidance requires additional disclosure to facilitate financial statement users’ evaluation of the following: (1) the nature of credit risk inherent in the entity’s loan portfolio, (2) how that risk is analyzed and assessed in arriving at the allowance for loan losses, and (3) the changes and reasons for those changes in the allowance for loan losses. This guidance was effective for the Company’s financial statements as of December 31, 2010, as it relates to disclosures required as of the end of a reporting period. Disclosures that relate to activity during a reporting period became effective for the Company’s financial statements beginning on January 1, 2011. Since the new guidance only affects disclosures, it did not impact our financial position and consolidated results of operations upon adoption.

Fair Value Measurement Disclosures – On January 1, 2011, we adopted the additional disclosure requirements that had a delayed effective date under the new accounting guidance issued by the FASB in January 2010 regarding separate presentation of information about purchases, sales, issuances and settlements for Level 3 fair value measurements. As this guidance only affects disclosures, the adoption of this guidance did not impact our financial position and consolidated results of operations.

Troubled Debt Restructurings – On July 1, 2011, we adopted new guidance related to a creditor’s accounting for troubled debt restructurings (“TDRs”), as well as new disclosure requirements related to TDRs. The guidance clarifies whether a modification of a loan receivable constitutes a concession to a borrower that is experiencing financial difficulty. The guidance and disclosures were effective for the Company’s financial statements that include periods beginning on or after July 1, 2011, with retrospective application to the Company’s annual reporting period beginning on January 1, 2011. The adoption of this guidance did not have a material impact on our financial position and consolidated results of operations.

Accounting Pronouncements Pending Adoption

Transfers and Servicing – On April 29, 2011, the FASB issued amendments to its accounting guidance on the effective control assessment for repurchase agreements that in part determines whether a transaction is accounted for as a sale or a secured borrowing. The amendments remove from the assessment of effective control: (1) the criterion requiring the

8

transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. In effect, these amendments will cause more repurchase agreements to be accounted for as secured borrowings rather than as sales. The guidance will be effective for the Company’s financial statements that include periods beginning on or after January 1, 2012. The adoption of this guidance is not expected to have a material impact on our financial position and consolidated results of operations.

Fair Value Measurement – On May 12, 2011, the FASB issued amendments to its fair value measurement guidance. The amendments substantially converge the principles for measuring fair value and the requirements for related disclosures under U.S. GAAP and International Financial Reporting Standards. The amendments include clarifications and/or new guidance related to the highest and best use and valuation premise, measuring the fair value of an instrument classified in shareholders’ equity, measuring the fair value of financial instruments that are managed within a portfolio, and the application of block discounts and other premiums and discounts in a fair value measurement. Additionally, the amendments require additional disclosures about fair value measurements. The guidance will be effective for the Company’s financial statements that include periods beginning on or after January 1, 2012. The adoption of this guidance is not expected to have a material impact on our financial position and consolidated results of operations.

Statement of Comprehensive Income – On June 16, 2011, the FASB issued guidance on the presentation of the statement of comprehensive income. This guidance provides the Company the option of presenting net income and other comprehensive income in one continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change what items are reported in other comprehensive income or the U.S. GAAP requirement to report reclassification of items from other comprehensive income to net income. The guidance will be effective for the Company’s financial statements that include periods beginning on or after January 1, 2012 and must be retrospectively applied. As this guidance affects only our presentation of the statement of comprehensive income, the adoption of this guidance will not have a material impact on our financial position and consolidated results of operations.

Testing Goodwill for Impairment – On September 15, 2011, the FASB issued guidance that permits the Company to perform a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying value before applying the existing two-step goodwill impairment test. If the Company concludes that this is the case, the Company would proceed with the existing two-step test, whereby the Company would quantitatively determine whether the fair value of a reporting unit is less than its carrying value, and if so, measure the amount of any goodwill impairment. Otherwise, the Company would be able to bypass the two-step test and conclude that goodwill is not impaired from a qualitative perspective. The guidance will be effective for the Company’s financial statements that include periods beginning on or after January 1, 2012. The adoption of this guidance will not have a material impact on our financial position and consolidated results of operations.

9

3. SECURITIES

Securities Portfolio

(Amounts in thousands)

	September 30, 2011									December 31, 2010
	Amortized Cost		Gross Unrealized					Fair Value		Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses							Gains		Losses
Securities Available-for-Sale
U.S. Treasury	$	35,844	$	562	$	—		$	36,406	$	—	$	—	$	—		$	—
U.S. Agencies		10,049		79		—			10,128		10,155		271		—			10,426
Collateralized mortgage obligations		369,081		14,656		(52	)		383,685		450,251		9,400		(7,930	)		451,721
Residential mortgage-backed securities		1,242,968		49,203		(3	)		1,292,168		1,222,642		31,701		(7,312	)		1,247,031
State and municipal		139,963		9,779		(42	)		149,700		166,209		6,433		(534	)		172,108
Foreign sovereign debt		500		—		—			500		500		—		—			500
Total	$	1,798,405	$	74,279	$	(97	)	$	1,872,587	$	1,849,757	$	47,805	$	(15,776	)	$	1,881,786
Securities Held-to-Maturity
Residential mortgage-backed securities	$	273,200	$	652	$	(988	)	$	272,864	$	—	$	—	$	—		$	—
Non-marketable Equity Securities
FHLB stock	$	40,909	$	—	$	—		$	40,909	$	20,694	$	—	$	—		$	20,694
Other		2,985		—		—			2,985		2,843		—		—			2,843
Total	$	43,894	$	—	$	—		$	43,894	$	23,537	$	—	$	—		$	23,537

Non-marketable equity securities primarily consist of Federal Home Loan Bank (“FHLB”) stock and represent amounts required to be invested in the common stock of the FHLB. This equity security is “restricted” in that it can only be sold to the FHLB or another member institution at par. Therefore, it is less liquid than other equity securities. The fair value is estimated to be cost, and no other-than-temporary impairments have been recorded on these securities during 2011 and 2010.

The carrying value of securities pledged to secure public deposits, trust deposits, derivative transactions with counterparty banks, standby letters of credit with counterparty banks and for other purposes as permitted or required by law, totaled $609.3 million at September 30, 2011 and $656.3 million at December 31, 2010.

Excluding securities issued or backed by the U.S. Government and its agencies and U.S. Government-sponsored enterprises, there were no investments in securities from one issuer that exceeded 10% of consolidated equity on September 30, 2011 or December 31, 2010.

The following table presents the aggregate amount of unrealized losses and the aggregate related fair values of securities with unrealized losses as of September 30, 2011 and December 31, 2010. The securities presented are grouped according to the time periods during which the securities have been in a continuous unrealized loss position.

10

Securities In Unrealized Loss Position

(Amounts in thousands)

	Less Than 12 Months					12 Months or Longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
As of September 30, 2011
Securities Available-for-Sale
Collateralized mortgage obligations	$	12,794	$	(52	)	$	—	$	—	$	12,794	$	(52	)
Residential mortgage-backed securities		185		(3	)		—		—		185		(3	)
State and municipal		13,229		(42	)		—		—		13,229		(42	)
Total	$	26,208	$	(97	)	$	—	$	—	$	26,208	$	(97	)
Securities Held-to-Maturity
Residential mortgage-backed securities	$	183,409	$	(988	)	$	—	$	—	$	183,409	$	(988	)
As of December 31, 2010
Securities Available-for-Sale
Collateralized mortgage obligations	$	148,643	$	(7,930	)	$	—	$	—	$	148,643	$	(7,930	)
Residential mortgage-backed securities		378,211		(7,312	)		—		—		378,211		(7,312	)
State and municipal		33,710		(534	)		—		—		33,710		(534	)
Total	$	560,564	$	(15,776	)	$	—	$	—	$	560,564	$	(15,776	)

There were no securities in an unrealized loss position for greater than 12 months at September 30, 2011 or December 31, 2010. The unrealized losses reported for collateralized mortgage obligations and residential mortgage-backed securities were caused primarily by changes in interest rates with the value of such securities also being affected by the guarantee of such investments’ contractual cash flows by either U.S. Government agencies or by U.S. Government-sponsored enterprises. The unrealized losses reported for state and municipal securities were caused primarily by changes in interest rates and spreads.

Since the declines in fair value on these securities are attributable to changes in interest rates, and because we do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2011.

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Remaining Contractual Maturity of Securities

(Amounts in thousands)

	September 30, 2011
	Available-For Sale				Held-To-Maturity and Non-Marketable Equity Securities
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasury, U.S. Agencies, state and municipals and foreign sovereign debt securities
One year or less	$	2,298	$	2,320	$	—	$	—
One year to five years		65,768		67,834		—		—
Five years to ten years		93,367		100,388		—		—
After ten years		24,923		26,192		—		—
All other securities
Collateralized mortgage obligations		369,081		383,685		—		—
Residential mortgage-backed securities		1,242,968		1,292,168		273,200		272,864
Non-marketable equity securities		—		—		43,894		43,894
Total	$	1,798,405	$	1,872,587	$	317,094	$	316,758

Securities Gains (Losses)

(Amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Proceeds from sales	$	219,589		$	167,946		$	280,082		$	197,841
Gross realized gains		4,658			3,215			5,930			4,154
Gross realized losses		(288	)		(186	)		(523	)		(1,281	)
Net realized gains	$	4,370		$	3,029		$	5,407		$	2,873
Income tax provision on net realized gains	$	1,740		$	1,161		$	2,150		$	1,097

Refer to Note 11 for additional details of the securities available-for-sale portfolio and the related impact of unrealized gains (losses) on other comprehensive income.

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4. LOANS

The following loan portfolio and credit quality disclosures exclude covered loans. Covered loans represent loans acquired through a Federal Deposit Insurance Corporation (“FDIC”) assisted transaction that are subject to a loss share agreement and are presented separately in the Consolidated Statement of Condition. Refer to Note 6 for a detailed discussion regarding covered loans.

Loan Portfolio

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Commercial and industrial	$	4,071,840	$	4,015,257
Commercial – owner-occupied commercial real estate		1,084,212		897,620
Total commercial		5,156,052		4,912,877
Commercial real estate		2,054,925		2,400,923
Commercial real estate – multi-family		421,045		457,246
Total commercial real estate		2,475,970		2,858,169
Construction		315,858		530,733
Residential real estate		307,705		319,146
Home equity		186,914		197,179
Personal		232,456		296,253
Total loans	$	8,674,955	$	9,114,357
Deferred loan fees included as a reduction in total loans	$	34,893	$	33,535
Overdrawn demand deposits included in total loans	$	1,151	$	3,197

We primarily lend to businesses and consumers in the market areas in which we have physical locations. We seek to diversify our loan portfolio by loan type, industry, and borrower.

Carrying Value of Loans Pledged

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Loans pledged to secure:
Federal Reserve Bank discount window borrowings	$	1,419,662	$	913,599
Federal Home Loan Bank advances		43,400		184,026
Total	$	1,463,062	$	1,097,625

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Loan Portfolio Aging

Loan Portfolio Aging

(Amounts in thousands)

			Delinquent
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due and Accruing		Total Accruing Loans		Nonaccrual		Total Loans
As of September 30, 2011
Commercial	$	5,083,733	$	3,529	$	101	$	—	$	5,087,363	$	68,689	$	5,156,052
Commercial real estate		2,300,497		5,884		8,801		—		2,315,182		160,788		2,475,970
Construction		285,519		342		—		—		285,861		29,997		315,858
Residential real estate		286,827		7		2,864		—		289,698		18,007		307,705
Home equity		171,788		761		925		—		173,474		13,440		186,914
Personal		218,524		15		91		—		218,630		13,826		232,456
Total loans	$	8,346,888	$	10,538	$	12,782	$	—	$	8,370,208	$	304,747	$	8,674,955

			Delinquent
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due and Accruing		Total Accruing Loans		Nonaccrual		Total Loans
As of December 31, 2010
Commercial	$	4,828,948	$	1,024	$	759	$	—	$	4,830,731	$	82,146	$	4,912,877
Commercial real estate		2,632,835		10,264		12,346		—		2,655,445		202,724		2,858,169
Construction		495,435		—		1,895		—		497,330		33,403		530,733
Residential real estate		300,027		180		4,098		—		304,305		14,841		319,146
Home equity		185,675		976		2,333		—		188,984		8,195		197,179
Personal		256,860		13,122		1,700		—		271,682		24,571		296,253
Total loans	$	8,699,780	$	25,566	$	23,131	$	—	$	8,748,477	$	365,880	$	9,114,357

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Impaired Loans

Impaired loans consist of nonaccrual loans (which include nonaccrual TDRs) and loans classified as accruing TDRs. A loan is considered nonaccrual when, based on current information and events, management believes that it is probable that we will be unable to collect all amounts due (both principal and interest) according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the amount of impairment is measured based on the loan’s observable fair value, fair value of the underlying collateral less selling costs if the loan is collateral dependent, or the present value of expected future cash flows discounted at the loan’s effective interest rate. If the measurement of the impaired loan is less than the recorded investment in the loan, impairment is recognized by creating a specific valuation reserve as a component of the allowance for loan losses. Impaired loans exceeding $500,000 are evaluated individually, while smaller loans are evaluated as pools using historical loss experience, as well as management’s loss expectations, for the respective asset class and product type.

Impaired Loans

(Amounts in thousands)

	Unpaid Contractual Principal Balance		Recorded Investment With No Specific Reserve		Recorded Investment With Specific Reserve		Total Recorded Investment		Specific Reserve
As of September 30, 2011
Commercial	$	127,933	$	85,084	$	33,758	$	118,842	$	17,842
Commercial real estate		229,360		85,012		116,859		201,871		38,091
Construction		39,639		—		29,997		29,997		7,647
Residential real estate		20,153		12,296		6,774		19,070		1,316
Home equity		15,133		1,814		11,802		13,616		2,345
Personal		39,978		16,896		10,785		27,681		4,950
Total impaired loans	$	472,196	$	201,102	$	209,975	$	411,077	$	72,191
As of December 31, 2010
Commercial	$	98,246	$	33,879	$	56,284	$	90,163	$	18,015
Commercial real estate		292,138		118,190		144,553		262,743		38,003
Construction		52,055		11,437		26,314		37,751		3,778
Residential real estate		17,186		4,413		11,226		15,639		1,046
Home equity		8,575		—		8,195		8,195		2,614
Personal		48,911		21,227		17,738		38,965		7,515
Total impaired loans	$	517,111	$	189,146	$	264,310	$	453,456	$	70,971

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Average Recorded Investment and Interest Income Recognized on Impaired Loans ⁽¹⁾

(Amounts in thousands)

	Quarter Ended				Nine Months Ended
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
September 30, 2011
Commercial	$	124,933	$	1,054	$	103,678	$	1,723
Commercial real estate		220,484		708		254,048		2,205
Construction		37,409		49		38,368		123
Residential real estate		19,923		14		18,646		33
Home equity		13,791		17		12,172		20
Personal		30,584		122		33,380		375
Total	$	447,124	$	1,964	$	460,292	$	4,479
September 30, 2010	$	400,237			$	411,052

⁽¹⁾ Represents amounts while classified as impaired for the periods presented.

Credit Quality Indicators

The Company has adopted an internal risk rating policy in which each loan is rated for credit quality with a numerical rating of 1 through 8. Loans rated 5 and better (1-5 ratings, inclusive) are credits that exhibit acceptable financial performance, cash flow, and leverage. We attempt to mitigate risk by structure, collateral, monitoring, or other meaningful controls. Credits rated 6 are considered special mention as these credits demonstrate potential weakness that if left unresolved, may result in deterioration in the Company’s credit position and/or the repayment prospects for the credit. Borrowers rated special mention may exhibit adverse operating trends, high leverage, tight liquidity or other credit concerns. Potential problem loans are loans that we have identified as performing in accordance with contractual terms, but for which management has some level of concern about the ability of the borrowers to meet existing repayment terms in future periods. These loans have a risk rating of 7 but are not classified as nonaccrual. The ultimate collection of these loans is questionable due to the same conditions that characterize a 6-rated credit. These credits may also be considered inadequately protected by the current net worth and/or paying capacity of the obligor or guarantors or the collateral pledged. These loans generally have a well-defined weakness or weaknesses that may jeopardize collection of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not resolved. Although these loans are generally identified as potential problem loans and require additional attention by management, they may never become nonperforming. Nonperforming loans include nonaccrual loans risk rated 7 or 8 and have all the weaknesses inherent in a 7-rated potential problem loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently-existing facts, conditions and values, highly questionable and improbable. Special mention, potential problem and nonperforming loans are reviewed at minimum on a quarterly basis, while all other rated credits over a certain dollar threshold, depending on product segment, are reviewed annually or as the situation warrants.

Credit Quality Indicators

(Dollars in thousands)

Product Segment	Special Mention		% of Portfolio Loan Type		Potential Problem Loans		% of Portfolio Loan Type		Non- Performing Loans		% of Portfolio Loan Type		Total Loans
As of September 30, 2011
Commercial	$	54,804		1.1	$	128,018		2.5	$	68,689		1.3	$	5,156,052
Commercial real estate		141,465		5.7		108,919		4.4		160,788		6.5		2,475,970
Construction		10,129		3.2		9,625		3.0		29,997		9.5		315,858
Residential real estate		5,427		1.8		20,375		6.6		18,007		5.9		307,705
Home equity		1,595		0.9		8,569		4.6		13,440		7.2		186,914
Personal		5,141		2.2		1,619		0.7		13,826		5.9		232,456
Total	$	218,561		2.5	$	277,125		3.2	$	304,747		3.5	$	8,674,955

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Product Segment	Special Mention		% of Portfolio Loan Type		Potential Problem Loans		% of Portfolio Loan Type		Non- Performing Loans		% of Portfolio Loan Type		Total Loans
As of December 31, 2010
Commercial	$	111,929		2.3	$	173,829		3.5	$	82,146		1.7	$	4,912,877
Commercial real estate		203,073		7.1		260,042		9.1		202,724		7.1		2,858,169
Construction		67,915		12.8		45,119		8.5		33,403		6.3		530,733
Residential real estate		9,962		3.1		15,101		4.7		14,841		4.7		319,146
Home equity		3,757		1.9		11,272		5.7		8,195		4.2		197,179
Personal		2,198		0.7		2,227		0.8		24,571		8.3		296,253
Total	$	398,834		4.4	$	507,590		5.6	$	365,880		4.0	$	9,114,357

Troubled Debt Restructured Loans

A loan is accounted for as a TDR when a borrower is experiencing financial difficulties that lead to a restructuring of the loan, and the Company grants concessions to the borrower in the restructuring that it would not otherwise consider. These concessions may include extensions of maturity dates beyond an insignificant delay, rate reductions, principal forgiveness, and other actions intended to minimize potential losses. We may also utilize a multiple note structure as a workout alternative for certain loans. The multiple note structure typically bifurcates a troubled loan into two separate notes, where the first note is reasonably assured of repayment and performance according to the modified terms, and the portion of the troubled loan that is not reasonably assured of repayment is charged-off. Restructured loans can involve loans remaining on nonaccrual, moving to nonaccrual, or continuing on accrual status, depending on the individual facts and circumstances of the borrower.

Generally, a nonaccrual loan that is restructured remains on nonaccrual for a period of at least six months to ensure that the borrower performs in accordance with the restructured terms including consistent and timely loan payments. However, the borrower’s performance prior to the restructuring or other significant events at the time of the restructuring may be considered in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status after a shorter performance period or concurrent with the restructuring. In such situations, the loan will be reported as a “restructured loan accruing interest.” If the borrower’s performance under the new terms is not reasonably assured, the loan remains classified as a nonaccrual loan.

Troubled Debt Restructured Loans Outstanding

(Amounts in thousands)

	September 30,		December 31,
	2011		2010
Accruing interest:
Commercial	$	50,153	$	8,017
Commercial real estate		41,083		60,019
Construction		—		4,348
Residential real estate		1,063		798
Personal		14,031		14,394
Total accruing	$	106,330	$	87,576
Nonaccrual:
Commercial	$	33,548	$	13,152
Commercial real estate		39,423		33,123
Construction		4,018		—
Residential real estate		3,613		1,350
Home equity		1,849		16,427
Personal		8,718		1,229
Total nonaccrual	$	91,169	$	65,281

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At September 30, 2011 and December 31, 2010, commitments to lend additional funds to debtors whose loan terms have been modified in a troubled debt restructuring (both accruing and nonaccruing) totaled $18.2 million and $3.7 million, respectively.

Additions to Troubled Debt Restructurings During the Period

(Amounts in thousands)

	Quarter Ended September 30, 2011						Nine Months Ended September 30, 2011
			Outstanding Recorded Investment (1)						Outstanding Recorded Investment (1)
	Number of Borrowers		Pre- Modification		Post- Modification		Number of Borrowers		Pre- Modification		Post- Modification
Accruing interest:
Commercial
Extension of maturity date (2)		2	$	294	$	191		15	$	45,280	$	45,177
Other concession (3)		1		7,237		7,951		5		19,402		20,115
Multiple note structuring		—		—		—		1		8,837		5,265
Total commercial		3		7,531		8,142		21		73,519		70,557
Commercial real estate
Extension of maturity date (2)		1		492		492		11		6,988		6,988
Multiple note structuring		—		—		—		2		9,990		5,344
Total commercial real estate		1		492		492		13		16,978		12,332
Residential real estate
Extension of maturity date (2)		—		—		—		2		374		374
Home equity
Extension of maturity date (2)		—		—		—		2		203		203
Personal
Extension of maturity date (2)		—		—		—		1		265		265
Other concession (3)		—		—		—		1		252		252
Total personal		—		—		—		2		517		517
Total accruing		4	$	8,023	$	8,634		40	$	91,591	$	83,983
Change in balance due to principal paydown at time of modification					$	103					$	103

⁽¹⁾  Represents amounts as of the date immediately prior to and immediately after the modification is effective.

⁽²⁾  Extension of maturity date also includes loans renewed at existing rate of interest which is considered a below market rate for that particular loan’s risk profile.

⁽³⁾  Other concessions primarily include interest rate reductions, loan increases, and deferral of principal.

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	Quarter Ended September 30, 2011						Nine Months Ended September 30, 2011
			Outstanding Recorded Investment (1)						Outstanding Recorded Investment (1)
	Number of Borrowers		Pre- Modification		Post- Modification		Number of Borrowers		Pre- Modification		Post- Modification
Nonaccrual:
Commercial
Extension of maturity date (2)		3	$	30,251	$	28,762		4	$	30,370	$	28,881
Other concession (3)		1		—		200		2		128		328
Total commercial		4		30,251		28,962		6		30,498		29,209
Commercial real estate
Extension of maturity date (2)		2		2,690		2,690		5		6,706		6,706
Other concession (3)		—		—		—		2		6,208		6,208
Total commercial real estate		2		2,690		2,690		7		12,914		12,914
Construction
Extension of maturity date (2)		—		—		—		1		179		179
Residential real estate
Extension of maturity date (2)		—		—		—		3		1,446		1,446
Other concession (3)		—		—		—		1		696		696
Total residential real estate		—		—		—		4		2,142		2,142
Home equity
Extension of maturity date (2)		—		—		—		1		147		147
Other concession (3)		—		—		—		1		490		490
Total home equity		—		—		—		2		637		637
Personal
Extension of maturity date (2)		1		362		362		3		487		473
Total nonaccrual		7	$	33,303	$	32,014		23	$	46,857	$	45,554
Change in balance due to principal paydown at time of modification					$	1,489					$	1,504

⁽¹⁾  Represents amounts as of the date immediately prior to and immediately after the modification is effective.

⁽²⁾  Extension of maturity date also includes loans renewed at existing rate of interest which is considered a below market rate for that particular loan’s risk profile.

⁽³⁾  Other concessions primarily include interest rate reductions, loan increases, and deferral of principal.

At the time an accruing loan becomes modified as a TDR, it is considered impaired and no longer included as part of the general loan loss reserve determination. However, our general reserve methodology may consider the amount and/or characteristics of the TDRs removed as one of many credit or portfolio considerations in establishing final reserve requirements.

Modified loans which meet the definition of a TDR (both accruing and nonaccruing), including those that have payment defaults, are considered impaired and, accordingly, the loans are specifically evaluated for impairment at the end of each accounting period with a specific valuation reserve created, if necessary, as a component of the allowance for loan

19

losses. Refer to the “Impaired Loan” section of this note for additional information regarding the Company’s policy for assessing potential impairment on such loans. At September 30, 2011, our allowance for loan losses included $26.5 million for nonaccrual TDRs. There were no specific reserves for accruing TDRs at September 30, 2011.

The following table presents the recorded investment and number of loans modified as a TDR during the previous 12 months which subsequently became nonperforming during the three- and nine-month periods ended September 30, 2011. A loan becomes nonperforming and placed on nonaccrual status typically when the principal or interest payments are 90 days past due based on contractual terms or when an individual analysis of a borrower’s creditworthiness indicates a loan should be placed on nonaccrual status earlier than when the loan becomes 90 days past due.

Troubled Debt Restructurings

That Became Nonperforming Within 12 Months of Restructuring

(Amounts in thousands)

	Quarter Ended September 30, 2011 (1)				Nine Months Ended September 30, 2011 (1)
	Number of Borrowers		Recorded Investment		Number of Borrowers		Recorded Investment
Commercial		1	$	1,281		4	$	4,419
Commercial real estate		—		—		10		10,030
Construction		1		3,058		3		4,294
Residential real estate		1		99		1		99
Home equity		1		26		1		26
Personal		1		252		1		252
Total		5	$	4,716		20	$	19,120

⁽¹⁾  Represents amounts as of the balance sheet date from the quarter the default was first reported.

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5. ALLOWANCE FOR LOAN LOSSES AND RESERVE FOR UNFUNDED COMMITMENTS

Allowance for Loan Losses (excluding covered assets) ⁽¹⁾

(Amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Allowance for Loan Losses
Balance at beginning of period	$	206,286		$	232,411		$	222,821		$	221,688
Loans charged-off		(41,986	)		(50,622	)		(129,594	)		(159,992	)
Recoveries on loans previously charged-off		3,400			1,572			6,042			4,207
Net charge-offs		(38,586	)		(49,050	)		(123,552	)		(155,785	)
Provision for loan losses		32,341			40,031			100,772			157,489
Balance at end of period	$	200,041		$	223,392		$	200,041		$	223,392
Ending balance, individually evaluated for impairment (2)	$	72,191		$	68,716
Ending balance, collectively evaluated for impairment	$	127,850		$	154,676
Recorded investment in Loans
Ending balance, individually evaluated for impairment (2)	$	411,077		$	431,815
Ending balance, collectively evaluated for impairment		8,263,878			8,560,314
Total recorded investment in loans	$	8,674,955		$	8,992,129

⁽¹⁾  Refer to Note 6 for a detailed discussion regarding covered assets.

⁽²⁾  Refer to Note 4 for additional information regarding impaired loans.

Additional detail on the allowance for loan losses and recorded investment in loans, by product segment, for the quarter and nine months ended September 30, 2011 is presented in the following table.

Allowance for Loan Losses and Recorded Investment in Loans (excluding covered assets) ⁽¹⁾

(Amounts in thousands)

	For the Quarter Ended September 30, 2011
	Commercial			Commercial Real Estate			Construction			Residential Real Estate			Home Equity			Personal			Total
Allowance for Loan Losses:
Balance at beginning of period	$	56,352		$	111,535		$	17,731		$	7,065		$	6,626		$	6,977		$	206,286
Loans charged-off		(5,039	)		(29,920	)		(1,419	)		(234	)		(3,291	)		(2,083	)		(41,986	)
Recoveries on loans previously charged-off		2,278			969			29			9			12			103			3,400
Net charge-offs		(2,761	)		(28,951	)		(1,390	)		(225	)		(3,279	)		(1,980	)		(38,586	)
Provision for loan losses		9,251			15,507			1,756			276			2,498			3,053			32,341
Balance at end of period	$	62,842		$	98,091		$	18,097		$	7,116		$	5,845		$	8,050		$	200,041

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	For the Nine Months Ended September 30, 2011
	Commercial			Commercial Real Estate			Construction			Residential Real Estate			Home Equity			Personal			Total
Allowance for Loan Losses:
Balance at beginning of year	$	70,115		$	110,853		$	19,778		$	5,321		$	5,764		$	10,990		$	222,821
Loans charged-off		(19,751	)		(84,731	)		(9,756	)		(806	)		(5,246	)		(9,304	)		(129,594	)
Recoveries on loans previously charged-off		3,450			1,752			182			51			37			570			6,042
Net charge-offs		(16,301	)		(82,979	)		(9,574	)		(755	)		(5,209	)		(8,734	)		(123,552	)
Provision for loan losses		9,028			70,217			7,893			2,550			5,290			5,794			100,772
Balance at end of period	$	62,842		$	98,091		$	18,097		$	7,116		$	5,845		$	8,050		$	200,041
Ending balance, individually evaluated for impairment (2)	$	17,842		$	38,091		$	7,647		$	1,316		$	2,345		$	4,950		$	72,191
Ending balance, collectively evaluated for impairment	$	45,000		$	60,000		$	10,450		$	5,800		$	3,500		$	3,100		$	127,850
Recorded Investment in Loans:
Ending balance, individually evaluated for impairment (2)	$	118,842		$	201,871		$	29,997		$	19,070		$	13,616		$	27,681		$	411,077
Ending balance, collectively evaluated for impairment		5,037,210			2,274,099			285,861			288,635			173,298			204,775			8,263,878
Total recorded investment in loans	$	5,156,052		$	2,475,970		$	315,858		$	307,705		$	186,914		$	232,456		$	8,674,955

⁽¹⁾  Refer to Note 6 for a detailed discussion regarding covered assets.

⁽²⁾  Refer to Note 4 for additional information regarding impaired loans.

Reserve for Unfunded Commitments ⁽¹⁾

(Amounts in thousands)

	Quarters Ended September 30,					Nine Months Ended September 30,
	2011		2010			2011			2010
Balance at beginning of period	$	6,986	$	5,817		$	8,119		$	1,452
(Release) provision for unfunded commitments		—		(550	)		(1,133	)		3,815
Balance at end of period	$	6,986	$	5,267		$	6,986		$	5,267
Unfunded commitments, excluding covered assets, at period end (1)	$	4,083,779	$	3,891,922

⁽¹⁾  Unfunded commitments include commitments to extend credit, standby letters of credit and commercial letters of credit.

Refer to Note 15 for additional details of commitments to extend credit, standby letters of credit and commercial letters of credit.

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6. COVERED ASSETS

Covered assets represent purchased loans and foreclosed loan collateral covered under loss sharing agreements with the FDIC and include an indemnification receivable that represents the present value of the expected reimbursement from the FDIC related to expected losses on the acquired loans and foreclosed real estate under such agreements.

In accordance with applicable authoritative accounting guidance, the purchased loans and related indemnification receivable are recorded at fair value at the date of purchase, and “carrying over” or creating a valuation allowance in the initial accounting for such loans acquired in a transfer is prohibited. At acquisition, we evaluated purchased loans for impairment in accordance with the applicable authoritative guidance and our internal policies. Purchased loans with evidence of credit deterioration at the time of acquisition for which it is probable that all contractually required payments will not be collected are considered impaired (“purchased impaired loans”). All other purchased loans are considered nonimpaired (“purchased nonimpaired loans”). The carrying amount of the covered assets consisting of purchased impaired loans, purchased nonimpaired loans and other assets is presented in the following table.

Covered Assets

(Amounts in thousands)

	September 30, 2011											December 31, 2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Other Assets		Total			Purchased Impaired Loans			Purchased Nonimpaired Loans			Other Assets		Total
Commercial loans	$	10,559		$	23,227		$	—	$	33,786		$	12,824		$	31,988		$	—	$	44,812
Commercial real estate loans		42,395			122,186			—		164,581			57,979			131,215			—		189,194
Residential mortgage loans		287			51,889			—		52,176			258			56,490			—		56,748
Consumer installment and other		281			5,661			306		6,248			197			8,624			308		9,129
Foreclosed real estate		—			—			28,344		28,344			—			—			32,155		32,155
Asset in lieu		—			—			—		—			—			—			469		469
Estimated loss reimbursement by the FDIC		—			—			33,838		33,838			—			—			64,703		64,703
Total covered assets		53,522			202,963			62,488		318,973			71,258			228,317			97,635		397,210
Allowance for covered loan losses		(7,548	)		(9,141	)		—		(16,689	)		(8,601	)		(6,733	)		—		(15,334	)
Net covered assets	$	45,974		$	193,822		$	62,488	$	302,284		$	62,657		$	221,584		$	97,635	$	381,876
Nonperforming covered loans (1)									$	21,677										$	16,357

⁽¹⁾  Excludes purchased impaired loans which are accounted for on a pool basis based on common risk characteristics as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Because we are recognizing interest income on each pool of loans, all purchased impaired loans are considered to be performing.

All purchased loans and the related indemnification asset were recorded at fair value at date of purchase. The initial valuation of these loans and the related indemnification asset required management to make subjective judgments concerning estimates about how the acquired loans would perform in the future using valuation methods including discounted cash flow analysis and independent third party appraisals. Factors that may significantly affect the initial valuation include, among others, market-based and industry data related to expected changes in interest rates, assumptions related to probability and severity of credit losses, estimated timing of credit losses including the foreclosure and liquidation of collateral, expected prepayment rates, required or anticipated loan modifications, unfunded loan commitments, the specific terms and provisions of any loss share agreements, and specific industry and market conditions that may impact independent third party appraisals.

On an ongoing basis, the accounting for purchased loans and the related indemnification asset follows applicable authoritative accounting guidance for purchased nonimpaired loans and purchased impaired loans. The amounts that we realize on these loans and the related indemnification asset could differ materially from the carrying value reflected in these financial statements, based upon the timing and amount of collections on the acquired loans in future periods. Our losses on these assets may be mitigated to the extent covered under the specific terms and provisions of any loss share agreements.

For purchased impaired loans, the excess of cash flows expected at the acquisition date over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan using the constant effective yield method when there is a reasonable expectation about amount and timing of such cash flows. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference. Subsequent decreases to the expected cash flows will generally result in a provision for loan losses, resulting in an increase to the allowance for covered loan losses, and a reclassification from accretable yield to nonaccretable differences. Subsequent increases in cash flows result in a recovery of any previously recorded allowance for covered loans, to the extent applicable, and a reclassification of the difference from nonaccretable to accretable yield with a positive impact on interest income prospectively.

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For purchased nonimpaired loans, differences between the purchase price and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loan using a constant effective yield method. Decreases in expected cash flows after the purchase date are recognized by recording an additional allowance for loan losses. For purposes of determining the appropriate allowance for loan losses, purchased nonimpaired loans are aggregated based on common risk characteristics, and measured for impairment on the basis of this aggregation. The allowance for covered loan losses is determined in a manner consistent with the Company’s policy for its originated loan portfolio. The following table presents changes in the allowance for covered loan losses for the periods presented.

Allowance for Covered Loan Losses

(Amounts in thousands)

	Quarters Ended September 30,
	2011									2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Total			Purchased Impaired Loans		Purchased Nonimpaired Loans			Total
Balance at beginning of period	$	8,817		$	8,087		$	16,904		$	805	$	4,371		$	5,176
Loans charged-off		(264	)		(66	)		(330	)		—		—			—
Recoveries on loans previously charged-off		24			27			51			—		—			—
Net (charge-offs) recoveries		(240	)		(39	)		(279	)		—		—			—
Provision (release) for covered loan losses (1)		(1,029	)		1,093			64			7,124		(126	)		6,998
Balance at end of period	$	7,548		$	9,141		$	16,689		$	7,929	$	4,245		$	12,174

⁽¹⁾  Includes a provision for credit losses of $274,000 and $1.4 million recorded in the Consolidated Statements of Income for the quarters ended September 30, 2011 and 2010, respectively, representing the Company’s 20% non-reimbursable portion under the loss share agreement.

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	Nine Months Ended September 30,
	2011									2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Total			Purchased Impaired Loans		Purchased Nonimpaired Loans		Total
Balance at beginning of year	$	8,601		$	6,733		$	15,334		$	755	$	2,009	$	2,764
Loans charged-off		(264	)		(67	)		(331	)		—		—		—
Recoveries on loans previously charged-off		352			72			424			—		—		—
Net recoveries		88			5			93			—		—		—
Provision (release) for covered loan losses (1)		(1,141	)		2,403			1,262			7,174		2,236		9,410
Balance at end of period	$	7,548		$	9,141		$	16,689		$	7,929	$	4,245	$	12,174

⁽¹⁾  Includes a provision for credit losses of $514,000 and $1.9 million recorded in the Consolidated Statements of Income for the nine months ended September 30, 2011 and 2010, respectively, representing the Company’s 20% non-reimbursable portion under the loss share agreement.

Disposals (including sales) of loans or foreclosed property result in removal of the asset from the covered asset portfolio at its carrying amount.

Changes in the carrying amount and accretable yield for purchased impaired loans that evidenced deterioration at the acquisition date are set forth in the following table.

Change in Purchased Impaired Loans Accretable Yield and Carrying Amount

(Amounts in thousands)

	2011						2010
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Quarters Ended September 30
Balance at beginning of period	$	9,615		$	62,541		$	38,797		$	91,302
Payments received		—			(3,461	)		—			(2,626	)
Charge-offs/disposals(1)		(6,357	)		(6,357	)		(2,990	)		(2,990	)
Reclassifications from (to) nonaccretable difference, net		4,261			—			(10,850	)		—
Accretion		(799	)		799			(2,201	)		2,201
Balance at end of period	$	6,720		$	53,522		$	22,756		$	87,887
Nine Months Ended September 30
Balance at beginning of period	$	13,253		$	71,258		$	34,790		$	94,140
Payments received		—			(11,848	)		—			(8,580	)
Charge-offs/disposals(1)		(9,471	)		(9,471	)		(5,517	)		(5,446	)
Reclassifications from nonaccretable difference, net		6,521			—			1,256			—
Accretion		(3,583	)		3,583			(7,773	)		7,773
Balance at end of period	$	6,720		$	53,522		$	22,756		$	87,887
Contractual amount outstanding at period end				$	81,985					$	170,942

⁽¹⁾ Includes transfers to covered foreclosed real estate.

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7. GOODWILL AND OTHER INTANGIBLE ASSETS

Carrying Amount of Goodwill by Operating Segment

(Amounts in thousands)

	September 30,		December 31,
	2011		2010
Banking	$	81,755	$	81,755
Trust and Investments		12,829		12,866
Holding Company Activities		—		—
Total goodwill	$	94,584	$	94,621

Goodwill is not amortized but, instead, is subject to impairment tests at least on an annual basis or more often if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. Our annual goodwill test was performed as of October 31, 2010, and it was determined that no impairment existed as of that date.

Our annual goodwill impairment test will be completed during the fourth quarter 2011. During third quarter 2011, no events or circumstances occurred that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Goodwill decreased by $37,000 during the first nine months of 2011 due to an adjustment for tax benefits associated with the goodwill attributable to Lodestar Investment Counsel, LLC (“Lodestar”), an investment management firm and wholly-owned subsidiary of the Company.

We have other intangible assets capitalized on the Consolidated Statements of Financial Condition in the form of core deposit premiums, client relationships and assembled workforce. These intangible assets are being amortized over their estimated useful lives, which range from 3 years to 15 years. We review intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. During third quarter 2011, there were no events or circumstances to indicate there may be impairment of intangible assets.

Other Intangible Assets

(Amounts in thousands)

	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
	September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010
Core deposit intangible	$	18,093	$	18,093	$	4,835	$	4,098	$	13,258	$	13,995
Client relationships		4,900		4,900		2,463		2,168		2,437		2,732
Assembled workforce		736		736		716		623		20		113
Total	$	23,729	$	23,729	$	8,014	$	6,889	$	15,715	$	16,840

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Additional Information – Other Intangible Assets

(Dollars in thousands)

	September 30, 2011
Weighted average remaining life at period-end (in years):
Core deposit intangible		5
Client relationships		8
Assembled workforce		Less than 1

Amortization expense for other intangible assets totaled $374,000 and $413,000 for the quarters ended September 30, 2011 and September 30, 2010, respectively. For the nine months ended September 30, 2011 and September 30, 2010, amortization expense totaled $1.1 million and $1.2 million, respectively.

Scheduled Amortization of Other Intangible Assets

(Amounts in thousands)

	Total
Year ending December 31,
2011:
Remaining three months	$	362
2012		2,673
2013		3,101
2014		3,190
2015		2,639
2016 and thereafter		3,750
Total	$	15,715

8. SHORT-TERM BORROWINGS

Summary of Short-Term Borrowings

(Dollars in thousands)

	September 30, 2011					December 31, 2010
	Amount		Rate			Amount		Rate
Federal Home Loan Bank (“FHLB”) advances	$	59,154		2.60	%	$	117,620		2.40	%
Other		—		—			941		—
Total short-term borrowings	$	59,154				$	118,561
Unused overnight federal funds availability (1)	$	200,000				$	95,000
Borrowing capacity through the Federal Reserve Bank’s (“FRB”) discount window primary credit program (2)	$	1,038,348				$	536,836
FHLB advances availability	$	427,842				$	—
Weighted average remaining maturity of FHLB advances at period-end (in months)		7.2					3.9

⁽¹⁾  Our total availability of overnight fed fund borrowings are not committed lines of credit and are dependent upon lender availability.

⁽²⁾  Includes federal term auction facilities. Our borrowing capacity changes each quarter subject to available collateral and FRB discount factors.

The amounts above include any unamortized premium or discount and fair value adjustments recognized in connection with debt acquired through acquisitions.

During the third quarter 2011, we became a member of the FHLB Chicago, establishing access to additional FHLB borrowings of $427.8 million at September 30, 2011. Prior to becoming a member of the FHLB Chicago, we merged into The PrivateBank and Trust Company (the “Bank”) former bank subsidiaries that were member banks of the FHLB system. Advances prior to the bank mergers, which as of September 30, 2011 comprise short-term and long-term advances of $59.2 million and $15.0 million, respectively, remain outstanding until maturity.

27

FHLB advances reported as short-term borrowings represent advances with a remaining maturity of one year or less. FHLB advances are secured by qualifying residential and multi-family mortgages, state and municipal bonds and mortgage-related securities.

9. LONG-TERM DEBT

Long-Term Debt

(Dollars in thousands)

	September 30, 2011			December 31, 2010
Parent Company:
3.00% junior subordinated debentures due 2034 (1)(a)	$	8,248		$	8,248
2.06% junior subordinated debentures due 2035 (2)(a)		51,547			51,547
1.85% junior subordinated debentures due 2035 (3)(a)		41,238			41,238
10.00% junior subordinated debentures due 2068 (a)		143,760			143,760
Subtotal		244,793			244,793
Subsidiaries:
Federal Home Loan Bank advances		15,000			50,000
3.87% subordinated debt facility due 2015 (4)(b)		120,000			120,000
Subtotal		135,000			170,000
Total long-term debt	$	379,793		$	414,793
Weighted average interest rate of FHLB long-term advances at period-end		4.42	%		4.39	%
Weighted average remaining maturity of FHLB long-term advances at period-end (in months)		52.2			37.5

⁽¹⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 2.65%.

⁽²⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.71%.

⁽³⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.50%.

⁽⁴⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 3.50%.

^(a)  Qualifies as Tier I capital for regulatory capital purposes; the capital qualification is grandfathered under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

^(b)  Effective in the third quarter 2010, Tier II capital qualification was reduced by 20% of the total balance outstanding and annually thereafter will be reduced by an additional 20%. As of September 30, 2011, 60% of the balance qualified as Tier II capital for regulatory capital purposes.

We have $244.8 million in junior subordinated debentures issued to four separate wholly-owned trusts for the purpose of issuing Company-obligated mandatorily redeemable preferred securities. Refer to Note 10 for further information on the nature and terms of these and previously issued debentures.

FHLB long-term advances, which had a combination of fixed and floating interest rates, were secured by qualifying residential and multi-family mortgages, state and municipal bonds and mortgage-related securities.

We have $120.0 million outstanding under a 7-year subordinated debt facility due September 2015. The debt facility has a variable rate of interest based on LIBOR plus 3.50%, per annum, payable quarterly and re-prices quarterly. The debt may be prepaid at any time prior to maturity without penalty and is subordinate to any future senior indebtedness.

We reclassify long-term debt to short-term borrowings when the remaining maturity becomes less than one year.

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Scheduled Maturities of Long-Term Debt

(Amounts in thousands)

	Total
Year ending December 31,
2012	$	—
2013		5,000
2014		2,000
2015		123,000
2016 and thereafter		249,793
Total	$	379,793

10. JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES HELD BY TRUSTS THAT ISSUED GUARANTEED CAPITAL DEBT SECURITIES

As of September 30, 2011, we sponsored, and wholly owned, 100% of the common equity of four trusts that were formed for the purpose of issuing Company-obligated mandatorily redeemable preferred securities (“Trust Preferred Securities”) to third party investors and investing the proceeds from the sale of the Trust Preferred Securities solely in junior subordinated debt securities of the Company (“Debentures”). The Debentures held by the trusts, which totaled $244.8 million, are the sole assets of each trust. Our obligations under the Debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company of the obligations of the trusts. The guarantee covers the distributions and payments on liquidation or redemption of the Trust Preferred Securities, but only to the extent of funds held by the trusts. We have the right to redeem the Debentures in whole or in part, on or after specific dates, at a redemption price specified in the indentures plus any accrued but unpaid interest to the redemption date. We may also have the right to redeem the Debentures at an earlier time, if future legislative or regulatory changes impact our capital treatment of the Trust Preferred Securities. We used the proceeds from the sales of the Debentures for general corporate purposes.

Under current accounting rules, the trusts qualify as variable interest entities for which we are not the primary beneficiary and therefore ineligible for consolidation. Accordingly, the trusts are not consolidated in our financial statements. The subordinated Debentures issued by us to the trusts are included in our Consolidated Statements of Financial Condition as “long-term debt” with the corresponding interest distributions recorded as interest expense. The common shares issued by the trusts are included in other assets in our Consolidated Statements of Financial Condition with the related dividend distributions recorded in other non-interest income.

Common Securities, Preferred Securities, and Related Debentures

(Amounts and number of shares in thousands)

														Principal Amount of Debentures (3)
	Issuance Date		Common Securities Issued		Trust Preferred Securities Issued (1)		Coupon Rate (2)			Earliest Redemption Date (on or after) (3)		Maturity		September 30, 2011		December 31, 2010
Bloomfield Hills Statutory Trust I		May 2004	$	248	$	8,000		3.00	%		Jun. 17, 2009		Jun. 2034	$	8,248	$	8,248
PrivateBancorp Statutory Trust II		Jun. 2005		1,547		50,000		2.06	%		Sep. 15, 2010		Sep. 2035		51,547		51,547
PrivateBancorp Statutory Trust III		Dec. 2005		1,238		40,000		1.85	%		Dec. 15, 2010		Dec. 2035		41,238		41,238
PrivateBancorp Statutory Trust IV		May 2008		10		143,750		10.00	%		Jun. 13, 2013		Jun. 2068		143,760		143,760
Total			$	3,043	$	241,750								$	244,793	$	244,793

⁽¹⁾  The trust preferred securities accrue distributions at a rate equal to the interest rate and maturity identical to that of the related Debentures. The trust preferred securities will be redeemed upon maturity of the related Debentures.

⁽²⁾  Reflects the coupon rate in effect at September 30, 2011. The coupon rate for the Bloomfield Hills Statutory Trust I is a variable rate and is based on three-month LIBOR plus 2.65%. The coupon rates for the PrivateBancorp Statutory Trusts II and III are at a variable rate based on three-month LIBOR plus 1.71% for Trust II and three-month LIBOR plus 1.50% for Trust III. The coupon rate for the PrivateBancorp Statutory Trust IV is fixed. Distributions for all of the Trusts are payable quarterly. We have the right to defer payment of interest on the Debentures at any time or from time to time for a period not exceeding five years provided no extension period may extend beyond the stated maturity of the Debentures. During such extension period, distributions on the trust preferred securities would also be deferred, and our ability to pay dividends on our common stock would be restricted. The Federal Reserve has the ability to prevent interest payments on the Debentures.

29

⁽³⁾ The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at maturity or their earlier redemption. Subject to restrictions relating to our participation in the U.S. Treasury’s Troubled Asset Relief Program’s Capital Purchase Program (“TARP CPP”), the Debentures are redeemable in whole or in part prior to maturity at any time after the dates shown in the table, and earlier at our discretion if certain conditions are met, and, in any event, only after we have obtained Federal Reserve approval, if then required under applicable guidelines or regulations.

11. EQUITY

Comprehensive Income

Accumulated other comprehensive income (“AOCI”) includes net income as well as certain other items that are reported directly within a separate component of equity that are not considered part of net income. Other comprehensive income consists of the unrealized gains (losses) on securities available-for-sale and changes in fair value of derivative instruments designated under cash flow hedges.

Components of Accumulated Other Comprehensive Income

(Amounts in thousands)

	Nine Months Ended September 30,
	2011									2010
	Unrealized Gain (Loss) on Available-for- Sale Securities			Accumulated Gain (Loss) on Effective Cash Flow Hedges			Total			Unrealized Gain (Loss) on Available-for- Sale Securities			Accumulated Gain (Loss) on Effective Cash Flow Hedges		Total
Balance at beginning of period	$	20,078		$	—		$	20,078		$	27,896		$	—	$	27,896
Unrealized gains on securities		47,601			—			47,601			37,719			—		37,719
Unrealized gains on cash flow hedges		—			1,162			1,162			—			—		—
Tax expense on unrealized gains		(18,953	)		(462	)		(19,415	)		(14,496	)		—		(14,496	)
Reclassification adjustment of net gains included in net income		(5,448	)		(156	)		(5,604	)		(3,801	)		—		(3,801	)
Reclassification adjustments for tax expense on realized net gains		2,167			62			2,229			1,458			—		1,458
Balance at end of period	$	45,445		$	606		$	46,051		$	48,776		$	—	$	48,776

12. EARNINGS PER COMMON SHARE

Basic income (loss) per common share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared (distributed earnings) and participation rights in undistributed earnings. Distributed and undistributed earnings are allocated between common and participating security stockholders based on their respective rights to receive dividends. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities (i.e., the Company’s deferred stock units and nonvested restricted stock awards and restricted stock units, excluding certain awards with forfeitable rights to dividends). Undistributed net losses are not allocated to holders of participating securities, as they do not have a contractual obligation to fund the losses incurred by the Company. Net income (loss) attributable to common shares is then divided by the weighted-average number of common shares outstanding during the period, net of participating securities.

Diluted income (loss) per common share considers common stock issuable under the assumed release of nonvested restricted stock awards and units with forfeitable dividend rights and the assumed exercise of stock options granted under the Company’s stock plans as well as the assumed exercise of warrants related to the U.S. Treasury Capital Purchase Program (potentially dilutive common stock equivalents). Diluted income (loss) attributable to common shares is then divided by the total of weighted-average number of common shares and common stock equivalents outstanding during the period, net of participating securities. Potentially dilutive common stock equivalents are excluded from the computation of diluted earnings per common share in periods in which the effect would reduce the loss per share or increase the income per share (i.e. antidilutive). Diluted earnings per common share is calculated under the more dilutive of either the treasury method or the two-class method.

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Basic and Diluted Earnings per Common Share

(Amounts in thousands, except per share data)

	Quarters Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Basic earnings per common share
Net income (loss) attributable to controlling interests	$	13,449	$	7,950	$	33,311	$	(10,395	)
Preferred dividends and discount accretion of preferred stock		3,426		3,405		10,260		10,198
Net income (loss) available to common stockholders		10,023		4,545		23,051		(20,593	)
Less: Earnings allocated to participating stockholders		127		99		268		47
Earnings allocated to common stockholders	$	9,896	$	4,446	$	22,783	$	(20,640	)
Weighted-average common shares outstanding		70,479		70,067		70,418		69,999
Basic earnings per common share	$	0.14	$	0.06	$	0.32	$	(0.29	)

	Quarters Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Diluted earnings per common share
Earnings allocated to common stockholders (1)	$	9,896	$	4,446	$	22,782	$	(20,640	)
Weighted-average common shares outstanding (2):
Weighted-average common shares outstanding		70,479		70,067		70,418		69,999
Dilutive effect of stock awards		142		30		264		—
Weighted-average diluted common shares outstanding		70,621		70,097		70,682		69,999
Diluted earnings per common share	$	0.14	$	0.06	$	0.32	$	(0.29	)
Antidilutive shares not included in diluted earnings per common share computation(2 )(3):
Stock options		3,579		3,342		3,514		3,481
Unvested stock/unit awards		272		757		156		1,548
Warrants related to the U.S. Treasury Capital Purchase Program		645		645		645		645
Total antidilutive shares		4,496		4,744		4,315		5,674

⁽¹⁾  Earnings allocated to common stockholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common stock equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate earnings to common stockholders and participating securities for the purposes of calculating diluted earnings per share.

⁽²⁾  Due to the net loss available to common stockholders reported for the nine months ended September 30, 2010, all potentially dilutive common stock equivalents were excluded from the diluted net loss per share computation as their inclusion would have been antidilutive.

⁽³⁾  For the quarter and nine months ended September 30, 2011 and quarter ended September 30, 2010, represents potentially dilutive common stock securities for which the exercise price for the stock options and warrants and fair value of non-vested restricted stock/units was greater than the average market price of our common stock during the period.

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13. INCOME TAXES

Income Tax Provision Analysis

(Dollars in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Income (loss) before income taxes	$	21,075		$	12,807		$	49,666		$	(17,834	)
Income tax provision (benefit):
Current income tax provision	$	4,441		$	9,923		$	10,461		$	4,763
Deferred income tax provision (benefit)		3,152			(5,137	)		5,731			(12,419	)
Total income tax provision (benefit)	$	7,593		$	4,786		$	16,192		$	(7,656	)
Effective tax rate		36.0	%		37.4	%		32.6	%		-42.9	%

Illinois Tax Legislation

In January 2011, the state of Illinois passed legislation that increases the corporate income tax rate from 7.3% to 9.5% (which includes a personal property replacement tax of 2.5%). The change is effective for tax years 2011 through 2014 with the rate declining to 7.75% in 2015 and returning to the pre-2011 rate of 7.3% in 2025. As a result of this change, income tax expense for the nine months ended September 30, 2011 was reduced by $2.8 million for a one-time adjustment to the valuation of the Company’s deferred tax asset.

Deferred Tax Assets

Net deferred tax assets totaled $103.2 million at September 30, 2011 and $126.3 million at December 31, 2010. Net deferred tax assets are included in other assets in the accompanying Consolidated Statements of Financial Condition and no valuation allowance is recorded.

We are in a cumulative pre-tax loss position for financial statement purposes for the trailing three-year period ended September 30, 2011. Under current accounting guidance, this represents significant negative evidence in the assessment of whether the deferred tax assets will be realized. However, we have concluded that based on the weight provided by the positive evidence, it is more likely than not that the deferred tax assets will be realized.

Taxable income in prior years and reversing deferred taxable income amounts provide sources from which deferred tax assets may be absorbed. Most significantly, however, we have relied on our ability to generate future federal taxable income, exclusive of reversing temporary differences, as the primary source from which deferred tax assets at September 30, 2011 will be absorbed.

In making the determination that it was more likely than not the deferred tax assets will be realized, we considered negative evidence associated with the cumulative book loss position, as well as continued challenging economic conditions.

We also considered the positive evidence associated with: (a) taxable income generated in 2010 and the first nine months of 2011; (b) reversing taxable temporary differences in future periods; (c) the decline in the cumulative book loss during the past several quarters and our expectations regarding the remainder of 2011; (d) our pre-tax, pre-loan loss provision earnings results during 2009, 2010 and year-to-date 2011, a core source for future taxable income; (e) our reporting of pre-tax profits in each of the past six quarters; (f) the concentration of credit losses in certain segments and vintages of our loan portfolio during the past three years and the relative stability of credit trends in recent quarters; (g) our excess capital position relative to “well capitalized” regulatory standards and other industry benchmarks; and (h) no history of federal net operating loss carryforwards and the availability of the 20-year federal net operating loss carryforward period.

In addition, we also considered both positive and negative evidence associated with: (a) our accuracy in forecasting operating income and credit costs; and (b) the estimated timing of reversals of deferred deductible and deferred taxable items and the level of such net reversal amounts relative to earnings run rate assumptions in future periods.

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Certain of the factors noted above support our expectation of generating future pre-tax book earnings in future periods. We believe this in turn should give rise to taxable income levels (exclusive of reversing temporary differences) that more likely than not would be sufficient to absorb the deferred tax assets.

As of September 30, 2011, there was $458,000 of unrecognized tax benefits relating to uncertain tax positions that would favorably impact the effective tax rate if recognized in future periods.

14. DERIVATIVE INSTRUMENTS

We utilize an overall risk management strategy that incorporates the use of derivative instruments to reduce certain risks related to interest rate risk, as it relates to mortgage loan commitments and planned sales, and foreign currency volatility. We also use these instruments for client accommodation as we provide derivatives risk management solutions for our clients. None of these end-user and client-related derivatives were designated as hedging instruments at September 30, 2011 and December 31, 2010.

In July 2011, we initiated the use of interest rate derivatives as part of our asset strategy to hedge interest rate risk in our loan portfolio which is comprised primarily of floating rate loans. These derivatives were designated as cash flow hedges.

Derivative assets and liabilities are recorded at fair value in the Consolidated Statements of Financial Condition, after taking into account the effects of master netting agreements as allowed under authoritative accounting guidance. Changes in the fair value of derivative instruments are either recorded in current earnings or in shareholders’ equity as a component of AOCI depending on whether the derivative instrument qualifies for hedge accounting and, if so, whether it qualifies as a fair value hedge or cash flow hedge.

Derivatives expose us to counterparty credit risk measured as replacement cost (current positive mark-to-market value plus potential future exposure from positive movements in mark-to-market). Credit risk is managed through our standard underwriting process. Actual exposures are monitored against various types of credit limits established to contain risk within parameters. Additionally, credit risk is managed through the use of collateral and netting agreements.

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Composition of Derivative Instruments

and Fair Value

(Amounts in thousands)

	Asset Derivatives										Liability Derivatives
	September 30, 2011					December 31, 2010					September 30, 2011					December 31, 2010
	Notional/					Notional/					Notional/					Notional/
	Contract		Fair			Contract		Fair			Contract		Fair			Contract		Fair
	Amount(1)		Value			Amount(1)		Value			Amount(1)		Value			Amount(1)		Value
Derivatives designated as hedging instruments(2):
Interest rate contracts	$	75,000	$	1,061		$	—	$	—		$	25,000	$	55		$	—	$	—
Less: netting adjustments(3)				(55	)				—					(55	)				—
Total			$	1,006				$	—				$	—				$	—
Derivatives not designated as hedging instruments:
Capital markets group derivatives(4):
Interest rate contracts	$	2,954,304	$	113,417		$	3,028,827	$	102,386		$	2,954,304	$	116,844		$	3,028,827	$	104,799
Foreign exchange contracts		155,262		7,300			109,956		4,069			155,262		6,600			109,956		3,416
Credit contracts(1)		43,249		12			4,523		1			62,698		15			68,945		9
Subtotal				120,729					106,456					123,459					108,224
Less: netting adjustments(3)				(9,481	)				(6,206	)				(9,491	)				(6,206	)
Total			$	111,248				$	100,250				$	113,968				$	102,018
Other derivatives(2):
Foreign exchange contracts	$	3,935	$	156		$	4,425	$	29		$	—	$	—		$	—	$	—
Mortgage banking derivatives				229					221					245					280
Subtotal				385					250					245					280
Total derivatives not designated as hedging instruments			$	111,633				$	100,500				$	114,213				$	102,298
Grand total derivatives			$	112,639				$	100,500				$	114,213				$	102,298

⁽¹⁾  The remaining average notional amounts are shown for credit contracts.

⁽²⁾  Derivative assets and liabilities designated as hedging instruments and other derivative assets and liabilities not designated as hedging instruments are reported in other assets and other liabilities on the Consolidated Statement of Financial Condition, respectively.

⁽³⁾  Represents netting of derivative asset and liability balances, and related cash collateral, with the same counterparty subject to master netting agreements. Authoritative accounting guidance permits the netting of derivative receivables and payables when a legally enforceable master netting agreement exists between the Company and a derivative counterparty. A master netting agreement is an agreement between two counterparties who have multiple derivative contracts with each other that provide for the net settlement of contracts through a single payment, in a single currency, in the event of default on or termination of any one contract.

⁽⁴⁾  Capital markets group asset and liability derivatives are reported separately on the Consolidated Statement of Financial Condition.

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Certain of our derivative contracts contain embedded credit risk contingent features that if triggered either allow the derivative counterparty to terminate the derivative or require additional collateral. These contingent features are triggered if we do not meet specified financial performance indicators such as minimum capital ratios under the federal banking agencies’ guidelines. Details on these derivative contracts are set forth in the following table.

Derivatives Subject to Credit Risk Contingency Features

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Fair value of derivatives with credit contingency features in a net liability position	$	68,634	$	66,649
Collateral posted for those transactions in a net liability position	$	72,845	$	70,334
If credit risk contingency features were triggered:
Additional collateral required to be posted to derivative counterparties	$	85	$	347
Outstanding derivative instruments that would be immediately settled	$	58,853	$	52,354

Derivatives Designated in Hedge Relationships

Our objectives in using interest rate derivatives are to add stability to interest income and to manage our exposure to interest rate movements.

Cash flow hedges – During the third quarter 2011, we entered into receive fixed/pay variable interest rate swaps to convert certain floating-rate commercial loans to fixed rate in order to substantially reduce the variability in forecasted interest cash flows due to market interest rate changes. We use regression analysis to assess the effectiveness of cash flow hedges at both the inception of the hedge relationship and on an ongoing basis. Ineffectiveness is generally measured as the amount by which the cumulative change in fair value of the hedging instrument exceeds the present value of the cumulative change in the hedged item’s expected cash flows. Measured ineffectiveness is recognized directly in other non-interest income in the Consolidated Statements of Income. The effective portion of the gains or losses on cash flow hedges are recorded in AOCI and are subsequently reclassified to interest income on loans in the period that the hedged interest receipts affect earnings. As of September 30, 2011 the maximum length of time over which forecasted interest cash flows are hedged is five years. There are no components of derivative gains or losses excluded from the assessment of hedge effectiveness related to our cash flow hedge strategy.

Change in Accumulated Other Comprehensive Income

Related to Interest Rate Swaps Designated as Cash Flow Hedge

(Dollars in thousands)

	September 30, 2011
	Quarter Ended			Nine Months Ended
Unrealized gain at beginning of period	$	—		$	—
Amount of gain recognized in AOCI		1,162			1,162
Amount reclassified from AOCI to interest income on loans		(156	)		(156	)
Unrealized gain at end of period	$	1,006		$	1,006

As of September 30, 2011, $573,000 in net deferred gains, net of tax, recorded in AOCI are expected to be reclassified into earnings during the next twelve months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to September 30, 2011.

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Gain Recorded in Consolidated Statements of Income

and Accumulated Other Comprehensive Income Related to

Interest Rate Swaps Designated as Cash Flow Hedge

(Amounts in thousands)

	September 30, 2011
	Quarter Ended		Nine Months Ended
Amount of gain, net of tax, recognized in AOCI (effective portion)	$	700	$	700
Amount of gain, pre-tax, reclassified from AOCI to interest income on loans		156		156
Amount of gain, pre-tax, recognized in other non-interest income (ineffective portion)		—		—

During the first nine months of 2011, there were no gains or losses from cash flow hedge derivatives related to ineffectiveness that were reclassified to current earnings. We are required to reclassify such gains or losses related to ineffectiveness in circumstances where the original forecasted transaction was no longer probable of occurring.

Derivatives Not Designated in Hedge Relationships

End-User Derivatives – We enter into derivatives that include commitments to fund certain mortgage loans to be sold into the secondary market and forward commitments for the future delivery of residential mortgage loans. It is our practice to enter into forward commitments for the future delivery of fixed-rate residential mortgage loans when customer interest rate lock commitments are entered into to economically hedge the effect of changes in interest rates on our commitments to fund the loans as well as on our portfolio of mortgage loans held-for-sale. At September 30, 2011, we had approximately $75.0 million of interest rate lock commitments and $99.2 million of forward commitments for the future delivery of residential mortgage loans with rate locks at rates consistent with the lock commitment.

We are also exposed at times to foreign exchange risk as a result of issuing loans in which the principal and interest are settled in a currency other than U.S. dollars. Currently our exposure is to the British pound on $3.9 million of loans and we manage this risk by using currency forward derivatives.

Client Related Derivatives – We offer, through our capital markets group, over-the-counter interest rate and foreign exchange derivatives to our clients, including but not limited to, interest rate swaps, options on interest rate swaps, interest rate options (also referred to as caps, floors, collars, etc.), foreign exchange forwards, and options as well as cash products such as foreign exchange spot transactions. When our clients enter into an interest rate or foreign exchange derivative transaction with us, we will generally mitigate our exposure to market risk through the execution of off-setting positions with inter-bank dealer counterparties. Although the off-setting nature of transactions originated by our capital markets group limit our market risk exposure, they do expose us to other risks including counterparty credit, settlement, and operational risk.

To accommodate our loan clients, we occasionally enter into risk participation agreements (“RPA”) with counterparty banks to either accept or transfer a portion of the credit risk related to their interest rate derivatives. This allows clients to execute an interest rate derivative with one bank while allowing for distribution of the credit risk among participating members. We have entered into written RPAs in which we accept a portion of the credit risk associated with a loan client’s interest rate derivative in exchange for a fee. We manage this credit risk through our loan underwriting process, and when appropriate, the RPA is backed by collateral provided by our clients under their loan agreement.

The current payment/performance risk of written RPAs is assessed using internal risk ratings which range from 1 to 8 with the latter representing the highest credit risk. The risk rating is based on several factors including the financial condition of the RPA’s underlying derivative counterparty, present economic conditions, performance trends, leverage, and liquidity.

The maximum potential amount of future undiscounted payments that we could be required to make under our written RPAs assumes that the underlying derivative counterparty defaults and that the floating interest rate index of the underlying derivative remains at zero percent. In the event that we would have to pay out any amounts under our RPAs, we will seek to recover these from assets that our clients pledged as collateral for the derivative and the related loan.

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Risk Participation Agreements

(Dollars in thousands)

	September 30, 2011			December 31, 2010
Fair value of written RPAs	$	(15	)	$	(9	)
Range of remaining terms to maturity (in years)		Less than 1 to 4			Less than 1 to 4
Range of assigned internal risk ratings		3 to 5			3 to 5
Maximum potential amount of future undiscounted payments	$	1,914		$	2,413
Percent of maximum potential amount of future undiscounted payments covered by proceeds from liquidation of pledged collateral		66	%		80	%

Gain (Loss) Recognized on Derivative Instruments

Not Designated in Hedging Relationship

(Amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011		2010
Gain on derivatives recognized in capital markets products income:
Interest rate contracts	$	3,577		$	1,924		$	9,372	$	4,075
Foreign exchange contracts		1,685			1,134			4,220		3,337
Credit contracts		248			46			278		83
Total capital markets group derivatives		5,510			3,104			13,870		7,495
Gain (loss) on other derivatives recognized in other income, service charges and fees:
Foreign exchange derivatives		42			(233	)		128		(6	)
Mortgage banking derivatives		(80	)		36			48		(3	)
Total other derivatives		(38	)		(197	)		176		(9	)
Total derivatives	$	5,472		$	2,907		$	14,046	$	7,486

15. COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES

Credit Extension Commitments and Guarantees

In the normal course of business, we enter into a variety of financial instruments with off-balance sheet risk to meet the financing needs of our clients and to conduct lending activities. These instruments principally include commitments to extend credit, standby letters of credit, and commercial letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount reflected in the Consolidated Statements of Financial Condition.

Contractual or Notional Amounts of Financial Instruments

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Commitments to extend credit:
Home equity lines	$	161,721	$	175,365
Residential 1-4 family construction - secured		24,909		15,600
Commercial real estate - secured		84,278		64,388
Commercial and industrial		3,001,902		2,929,215
All other commitments		520,472		686,469
Total commitments to extend credit	$	3,793,282	$	3,871,037

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	September 30, 2011		December 31, 2010
Letters of credit:
Financial standby	$	292,124	$	265,675
Performance standby		24,646		32,425
Commercial letters of credit		3,496		115
Total letters of credit	$	320,266	$	298,215

Commitments to extend credit are agreements to lend funds to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and variable interest rates tied to the prime rate or LIBOR and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash-flow requirements. As of September 30, 2011, we had a reserve for unfunded commitments of $7.0 million, which reflects our estimate of inherent losses associated with these commitment obligations. The reserve is recorded in other liabilities in the Consolidated Statements of Financial Condition.

Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a client to a third party. Standby letters of credit include performance and financial guarantees for clients in connection with contracts between our clients and third parties. Standby letters of credit are agreements where we are obligated to make payment to a third party on behalf of a client in the event the client fails to meet their contractual obligations. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the client and third party.

In the event of a client’s nonperformance, our credit loss exposure is equal to the contractual amount of those commitments. We manage this credit risk in a similar manner to evaluating credit risk in extending loans to clients under our credit policies. We use the same credit policies in making credit commitments as for on-balance sheet instruments, mitigating exposure to credit loss through various collateral requirements, if deemed necessary. In the event of nonperformance by the clients, we have rights to the underlying collateral, which could include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities.

The maximum potential future payments guaranteed by us under standby letters of credit arrangements are equal to the contractual amount of the commitment. The unamortized fees associated with standby letters of credit, which are included in other liabilities in the Consolidated Statements of Financial Condition, totaled $1.0 million as of September 30, 2011. We amortize these amounts into income over the commitment period. As of September 30, 2011, standby letters of credit had a remaining weighted-average term of approximately 14 months, with remaining actual lives ranging from less than 1 year to 18 years.

Credit Card Settlement Guarantees

Our third party vendor issues corporate purchase credit cards on behalf of our commercial clients. The corporate purchase credit cards are issued to employees of our commercial clients at the client’s direction and used for payment of business-related expenses. In most circumstances, these cards will be underwritten by our third party vendor. However, in certain circumstances, we may enter into a recourse agreement, which transfers the credit risk from the third party vendor to us in the event that the licensee fails to meet its financial payment obligation. In these circumstances, a total exposure amount is established for our corporate client. In addition to the obligations presented in the prior table, the maximum potential future payments guaranteed by us under this third party settlement guarantee is $2.6 million at September 30, 2011.

We believe that the estimated amounts of maximum potential future payments are not representative of our actual potential loss given our insignificant historical losses from this third party settlement guarantee program. As of September 30, 2011, we have not recorded any contingent liability in the consolidated financial statements for this settlement guarantee program, and management believes that the probability of any payments under this arrangement is remote.

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Mortgage Loans Sold with Recourse

Certain mortgage loans sold have limited recourse provisions. We recorded no losses for the quarter and nine months ended September 30, 2011 arising from limited recourse provisions. The losses for the quarter and nine months ended September 30, 2010 arising from limited recourse provisions were not material. In addition, the Company has not established any liability for potential future payments relating to mortgage loans sold in prior periods.

Legal Proceedings

On October 22, 2010, a lawsuit was filed in federal court in the Northern District of Illinois against the Company on behalf of a purported class of purchasers of our common stock between November 2, 2007 and October 23, 2009. Certain of our current and former executive officers and directors and firms that participated in the underwriting of our June 2008 and May 2009 public offerings of common stock were also named as defendants in the litigation. On January 25, 2011, the City of New Orleans Employees’ Retirement System and State-Boston Retirement System were together named as the lead plaintiff, and an amended complaint was filed on February 18, 2011. The amended complaint alleged various claims of securities law violations against certain of the named defendants relating to disclosures we made during the class period in filings under the Securities Act of 1933 and the Securities Exchange Act of 1934. The plaintiffs sought class certification, compensatory damages in an unspecified amount, costs and expenses, including attorneys’ fees, and rescission. The defendants filed a joint motion to dismiss seeking dismissal of all counts. On November 7, 2011, the court released its decision on defendants’ motion and dismissed all counts of the complaint with prejudice. The plaintiffs have 30 days from the date of this decision to file a notice of appeal, if any.

As of September 30, 2011, there were also various legal proceedings pending against the Company and its subsidiaries in the ordinary course of business. Management does not believe that the outcome of these proceedings will have, individually or in the aggregate, a material adverse effect on the Company’s results of operations, financial condition or cash flows.

16. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

We measure, monitor, and disclose certain of our assets and liabilities on a fair value basis. Fair value is used on a recurring basis to account for securities available-for-sale, mortgage loans held for sale, derivative assets, derivative liabilities, other assets, and other liabilities. In addition, fair value is used on a non-recurring basis to apply lower-of-cost-or-market accounting to foreclosed real estate and other loans held for sale, evaluate assets or liabilities for impairment, including collateral-dependent impaired loans, and for disclosure purposes. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, we use various valuation techniques and input assumptions when estimating fair value.

U.S. GAAP requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value into three broad levels based on the reliability of the input assumptions. The hierarchy gives the highest priority to level 1 measurements and the lowest priority to level 3 measurements. The three levels of the fair value hierarchy are defined as follows:

• Level 1 – Unadjusted quoted prices for identical assets or liabilities traded in active markets.

• Level 2 – Observable inputs other than level 1 prices, such as quoted prices for similar instruments; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of where an asset or liability falls within the hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Valuation Methodology

We believe our valuation methods are appropriate and consistent with other market participants. However, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value. Additionally, the methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

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The following describes the valuation methodologies we use for assets and liabilities measured at fair value, including the general classification of the assets and liabilities pursuant to the valuation hierarchy.

Securities Available-for-Sale – Securities available-for-sale include U.S. Treasury, collateralized mortgage obligations, residential mortgage-backed securities, state and municipal securities, and foreign sovereign debt. Substantially all available-for-sale securities are fixed income instruments that are not quoted on an exchange, but may be traded in active markets. The fair value of these securities is based on quoted market prices obtained from external pricing services or dealer market participants where trading in an active market exists. In obtaining such data from external pricing services, we have evaluated the methodologies used to develop the fair values in order to determine whether such valuations are representative of an exit price in our principal markets. The principal markets for our securities portfolio are the secondary institutional markets, with an exit price that is predominantly reflective of bid level pricing in those markets. U.S. Treasury securities have been classified in level 1 of the valuation hierarchy. Virtually all other remaining securities are classified in level 2 of the valuation hierarchy.

Mortgage Loans Held for Sale – Mortgage loans held for sale represent mortgage loan originations intended to be sold in the secondary market. On August 1, 2011, we elected the fair value option for mortgage loans originated with the intention of selling to a third party bank that are originated as of or subsequent to this date. The election of the fair value option aligns the accounting for these loans with the related mortgage banking derivatives used to economically hedge them. These mortgage loans are measured at fair value as of each reporting date, with changes in fair value recognized through mortgage banking non-interest income. The fair value for mortgage loans held for sale is determined based on a variety of factors, including quoted market rates and our judgment of other relevant market conditions. Mortgage loans originated with the intention of selling to a third party bank prior to August 1, 2011 were accounted for at the lower of cost or fair value. Mortgage loans held for sale are classified in level 3 of the valuation hierarchy.

Other Loans Held for Sale – Other loans held for sale represent other loans that management has an active plan to sell. Other loans held for sale are accounted for at the lower of cost or fair value, which is determined based on a variety of factors, including quoted market rates and our judgment of other relevant market conditions. Other loans held for sale are classified in level 3 of the valuation hierarchy.

Collateral-Dependent Impaired Loans – We do not record loans at fair value on a recurring basis. However, periodically, we record nonrecurring adjustments to reduce the carrying value of loans based on fair value measurement. Loans for which it is probable that payment of interest or principal will not be made in accordance with the contractual terms of the original loan agreement are considered impaired. Impaired loans for which repayment of the loan is expected to be provided solely by the underlying collateral requires classification in the fair value hierarchy. We measure the fair value of collateral-dependent impaired loans based on the fair value of the collateral securing these loans. Substantially all collateral-dependent impaired loans are secured by real estate with the fair value generally determined based upon appraisals performed by a certified or licensed appraiser using inputs such as absorption rates, capitalization rates and comparables. We also consider other factors or recent developments that could result in adjustments to the collateral value estimates indicated in the appraisals. Accordingly, fair value estimates for collateral-dependent impaired loans are classified in level 3 of the valuation hierarchy. The carrying value of impaired loans and the related valuation allowance are disclosed in Note 4.

Other Real Estate Owned (“OREO”) – OREO is valued on a nonrecurring basis using third party appraisals of each property and our judgment of other relevant market conditions and is classified in level 3 of the valuation hierarchy.

Covered Assets-Foreclosed Real Estate – Covered assets-foreclosed real estate is valued on a nonrecurring basis using third party appraisals of each property and our judgment of other relevant market conditions and is classified in level 3 of the valuation hierarchy.

Capital Market Derivative Assets and Derivative Liabilities – Client-related derivative instruments with positive fair values are reported as an asset and derivative instruments with negative fair value are reported as liabilities, in both cases after taking into account the effects of master netting agreements. The fair value of client-related derivative assets and liabilities is determined based on the fair market value as quoted by broker-dealers using standardized industry models or internally-generated models. Many factors affect derivative values, including the level of interest rates, the market’s perception of our nonperformance risk as reflected in our credit spread, and our assessment of counterparty nonperformance risk. The nonperformance risk assessment is based on our evaluation of credit risk, or if available, on observable external assessments of credit risk. Values of client-related derivative assets and liabilities are based on primarily observable inputs and are generally classified in level 2 of the valuation hierarchy. Level 3 derivatives include risk participation agreements and derivatives associated with clients whose loans are risk rated 6 or higher. Refer to “Credit Quality Indicators” above for further discussion on risk ratings.

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Other Assets and Other Liabilities – Included in other assets and other liabilities are cash flow hedges designated in a hedging relationship and end-user derivative instruments that we use to manage our foreign exchange and interest rate risk. Those derivative instruments with positive fair value are reported as an asset and those with a negative fair value are reported as liabilities. The fair value is determined based on the fair market value as quoted by broker-dealers using standardized industry models, third party advisors using standardized industry models, or internally generated models based primarily on observable inputs. These derivative assets and liabilities are classified in level 2 of the valuation hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the hierarchy level and fair value for each major category of assets and liabilities measured at fair value at September 30, 2011 and December 31, 2010 on a recurring basis.

Fair Value Measurements on a Recurring Basis

(Amounts in thousands)

	September 30, 2011								December 31, 2010
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserv- able Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserv- able Inputs (Level 3)		Total
Assets:
Securities available-for-sale
U.S. Treasury	$	36,406	$	—	$	—	$	36,406	$	—	$	—	$	—	$	—
U.S. Agencies		—		10,128		—		10,128		—		10,426		—		10,426
Collateralized mortgage obligations		—		383,685		—		383,685		—		451,721		—		451,721
Residential mortgage- backed securities		—		1,292,168		—		1,292,168		—		1,247,031		—		1,247,031
State and municipal		—		149,700		—		149,700		—		172,108		—		172,108
Foreign sovereign debt		—		500		—		500		—		500		—		500
Total securities available-for-sale		36,406		1,836,181		—		1,872,587		—		1,881,786		—		1,881,786
Mortgage loans held for sale		—		—		24,126		24,126		—		—		—		—
Capital market derivative assets(1)		—		110,203		1,002		111,205		—		95,596		4,654		100,250
Other assets(2)		—		385		—		385		—		250		—		250
Total assets	$	36,406	$	1,946,769	$	25,128	$	2,008,303	$	—	$	1,977,632	$	4,654	$	1,982,286
Liabilities:
Capital market derivative liabilities(1)	$	—	$	113,919	$	15	$	113,934	$	—	$	102,009	$	9	$	102,018
Other liabilities(2)		—		245		—		245		—		280		—		280
Total liabilities	$	—	$	114,164	$	15	$	114,179	$	—	$	102,289	$	9	$	102,298

⁽¹⁾  Capital market derivative assets and derivative liabilities include client-related derivatives.

⁽²⁾  Other assets and other liabilities include derivatives designated in hedging relationships, derivatives for commitments to fund certain mortgage loans held for sale and end-user foreign exchange derivatives.

If a change in valuation techniques or input assumptions for an asset or liability occurred between periods, we would consider whether this would result in a transfer between the three levels of the fair value hierarchy. There have been no significant transfers of assets or liabilities between level 1 and level 2 of the valuation hierarchy between December 31, 2010 and September 30, 2011.

Other than electing the fair value option for mortgage loans held for sale, there have been no other changes in the valuation techniques and related inputs we used for assets and liabilities measured at fair value on a recurring basis from December 31, 2010 to September 30, 2011.

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Reconciliation of Beginning and Ending Fair Value For Those

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

(Amounts in thousands)

	Quarters Ended September 30,
	2011									2010
	Mortgage Loans Held For Sale			Derivative Assets			Derivative (Liabilities)			Derivative Assets			Derivative (Liabilities)
Balance at beginning of period	$	—		$	2,369		$	(11	)	$	3,505		$	(76	)
Total gains (losses):
Included in earnings (1)		16			(38	)		238			822			46
Purchases, issuances, sales and settlements:
Purchases		—			—			—			—			—
Issuances		67,402			—			—			—			—
Sales		(43,292	)		—			—			—			—
Settlements		—			(705	)		(242	)		(901	)		—
Transfers in (out) of level 3		—			(624	)		—			2,583			—
Balance at end of period	$	24,126		$	1,002		$	(15	)	$	6,009		$	(30	)
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	$	16		$	(73	)	$	238		$	823		$	(41	)

	Nine Months Ended September 30,
	2011									2010
	Mortgage Loans Held For Sale			Derivative Assets			Derivative (Liabilities)			State and Municipal Securities Available- For-Sale			Derivative Assets			Derivative (Liabilities)
Balance at beginning of year	$	—		$	4,654		$	(9	)	$	3,615		$	1,468		$	(101	)
Total gains (losses):
Included in earnings (1)		16			(175	)		266			—			2,408			83
Purchases, issuances, sales and settlements:
Purchases		—			—			—			—			—			—
Issuances		67,402			42			(30	)		—			—			(12	)
Sales		(43,292	)		—			—			(3,615	)		—			—
Settlements		—			(3,216	)		(242	)		—			(2,498	)		—
Transfers in (out) of level 3		—			(303	)		—			—			4,631			—
Balance at end of period	$	24,126		$	1,002		$	(15	)	$	—		$	6,009		$	(30	)
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	$	16		$	(42	)	$	(266	)	$	—		$	1,192		$	(70	)

⁽¹⁾  Amounts disclosed in this line are included in capital markets products income in the Consolidated Statements of Income.

At September 30, 2010, $2.8 million of derivative assets were transferred from level 2 to level 3 of the valuation hierarchy due to a lack of observable market data, as there was deterioration in the credit risk of the derivative counterparty. No derivative assets were transferred from level 2 to level 3 of the valuation hierarchy at September 30, 2011. Also, at September 30, 2011 and 2010, respectively, $624,000 and $251,000 of derivative assets were transferred from level 3 to level 2 of the valuation hierarchy due to an improvement in the credit risk of the counterparty. We recognize transfers in and transfers out at the end of the reporting period.

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Financial Instruments Recorded Using the Fair Value Option

Difference Between Aggregate Fair Value and Aggregate Remaining Principal Balance

for Mortgage Loans Held For Sale Elected to be Carried at Fair Value

(Amounts in thousands)

	September 30, 2011
	Aggregate Fair Value		Difference		Aggregate Unpaid Principal Balance
Mortgage loans held for sale
Total (1)	$	24,126	$	16	$	24,110

⁽¹⁾  The change in fair value is reflected in mortgage banking non-interest income.

As of September 30, 2011, none of the mortgage loans held for sale were nonaccrual loans or 90 days or more past due and still accruing interest. Changes in fair value due to instrument-specific credit risk for the quarter and nine months ended September 30, 2011 were not material.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table provides the hierarchy level and fair value for each major category of assets measured at fair value at September 30, 2011 and December 31, 2010 on a nonrecurring basis.

Fair Value Measurements on a Nonrecurring Basis

(Amounts in thousands)

	September 30, 2011								December 31, 2010
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Loans held for sale	$	—	$	—	$	—	$	—	$	—	$	—	$	30,758	$	30,758
Collateral-dependent impaired loans net of reserve for loan losses		—		—		283,452		283,452		—		—		328,492		328,492
Covered assets- foreclosed real estate		—		—		28,344		28,344		—		—		32,155		32,155
OREO		—		—		116,364		116,364		—		—		88,728		88,728
Total assets	$	—	$	—	$	428,160	$	428,160	$	—	$	—	$	480,133	$	480,133

Collateral-Dependent Impaired Loans

(Amounts in thousands)

	September 30, 2011			December 31, 2010
Carrying value	$	353,343		$	398,015
Specific reserves		(69,891	)		(69,523	)
Fair value	$	283,452		$	328,492

There have been no changes in the valuation techniques and related inputs we used for assets and liabilities measured at fair value on a nonrecurring basis from December 31, 2010 to September 30, 2011 other than the previously discussed election of the fair value option for mortgage loans held for sale effective August 1, 2011. Accordingly, mortgage loans held for sale are reported in the fair value measurements on a recurring basis tables.

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Estimated Fair Value of Certain Financial Instruments

U.S. GAAP requires disclosure of the estimated fair values of certain financial instruments, both assets and liabilities, on and off-balance sheet, for which it is practical to estimate the fair value. Because the estimated fair values provided herein exclude disclosure of the fair value of certain other financial instruments and all non-financial instruments, any aggregation of the estimated fair value amounts presented would not represent total underlying value. Examples of non-financial instruments having significant value include the future earnings potential of significant customer relationships and the value of Trust and Investments’ operations and other fee-generating businesses. In addition, other significant assets including property, plant, and equipment and goodwill are not considered financial instruments and, therefore, have not been valued.

Various methodologies and assumptions have been utilized in management’s determination of the estimated fair value of our financial instruments, which are detailed below. The fair value estimates are made at a discrete point in time based on relevant market information. Because no market exists for a significant portion of these financial instruments, fair value estimates are based on judgments regarding future expected economic conditions, loss experience, and risk characteristics of the financial instruments. These estimates are subjective, involve uncertainties, and cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

In addition to the valuation methodology explained above for financial instruments recorded at fair value, the following methods and assumptions were used in estimating the fair value of financial instruments that are carried at cost in the Consolidated Statements of Financial Condition.

Short-term financial assets and liabilities – For financial instruments with a shorter-term or with no stated maturity, prevailing market rates, and limited credit risk, the carrying amounts approximate fair value. Those financial instruments include cash and due from banks, federal funds sold and other short-term investments, accrued interest receivable, and accrued interest payable.

Securities Held-to-Maturity – The fair value of securities held-to-maturity is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Non-marketable equity investments – Non-marketable equity investments include FHLB stock and other various equity securities. The carrying value of FHLB stock approximates fair value as the stock is non-marketable, but can only be sold to the FHLB or another member institution at par. The carrying value of all other equity investments approximates fair value.

Loans – The fair value of loans is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. The estimate of maturity is based on contractual terms and includes assumptions that reflect our and the industry’s historical experience with repayments for each loan classification. The estimation is modified, as required, by the effect of current economic and lending conditions, collateral, and other factors.

Covered assets – Covered assets include the acquired loans and foreclosed loan collateral (including the fair value of expected reimbursements from the FDIC). The fair value of covered assets is calculated by discounting expected cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the asset. The estimate of maturity is based on contractual terms and includes assumptions that reflect our and the industry’s historical experience with repayments for each asset classification. The estimate is modified, as required, by the effect of current economic and lending conditions, collateral, and other factors.

Investment in Bank Owned Life Insurance – The fair value of our investment in bank owned life insurance is equal to its cash surrender value.

Deposit liabilities – The fair values disclosed for noninterest-bearing demand deposits, savings deposits, interest-bearing deposits, and money market deposits are equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The fair value for certificate of deposits and brokered deposits were estimated using present value techniques by discounting the future cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Short-term borrowings – The fair value of repurchase agreements and FHLB advances with the remaining maturities of one year or less is estimated by discounting the obligations using the rates currently offered for repurchase agreements or borrowings of similar remaining maturities. The carrying amounts of funds purchased and other borrowed funds approximate their fair value due to their short-term nature.

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Long-term debt – The fair value of subordinated debt, FHLB advances with remaining maturities greater than one year, and the junior subordinated debentures are estimated by discounting future cash flows using current interest rates for similar financial instruments.

Commitments – Given the limited interest rate exposure posed by the commitments outstanding at period-end due to their variable rate structure, termination clauses provided in the agreements, and the market rate of fees charged, we have deemed the fair value of commitments outstanding to be immaterial.

Financial Instruments

(Amounts in thousands)

	As of
	September 30, 2011				December 31, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and due from banks	$	171,268	$	171,268	$	112,772	$	112,772
Federal funds sold and other short-term investments		248,559		248,559		541,316		541,316
Loans held for sale		24,126		24,126		30,758		30,758
Securities available-for-sale		1,872,587		1,872,587		1,881,786		1,881,786
Securities held-to-maturity		273,200		272,864		—		—
Non-marketable equity investments		43,894		43,894		23,537		23,537
Loans, net of allowance for loan losses and unearned fees		8,474,913		8,051,212		8,891,536		8,535,266
Covered assets, net of allowance for covered loan losses		302,284		319,714		381,875		400,783
Accrued interest receivable		32,686		32,686		33,854		33,854
Investment in bank owned life insurance		50,565		50,565		49,408		49,408
Capital markets derivative assets		111,248		111,248		100,250		100,250
Financial Liabilities:
Deposits	$	10,108,663	$	10,124,413	$	10,535,429	$	10,549,930
Short-term borrowings		59,154		59,423		118,561		120,522
Long-term debt		379,793		355,110		414,793		414,340
Accrued interest payable		5,841		5,841		5,968		5,968
Capital markets derivative liabilities		113,968		113,968		102,018		102,018

17. OPERATING SEGMENTS

We have three primary operating segments: Banking and Trust and Investments, each of which are delineated by the products and services that each segment offers, and the Holding Company. The Banking operating segment includes commercial and personal banking services, which includes mortgage originations. Commercial banking services are primarily provided to corporations and other business clients and include a wide array of lending and cash management products. Personal banking services offered to individuals, professionals, and entrepreneurs include direct lending and depository services. The Trust and Investments segment includes certain activities of our PrivateWealth group, including investment management, investment advisory, personal trust and estate administration, custodial and escrow, retirement account administration, and brokerage services. The activities of the third operating segment, the Holding Company, include the direct and indirect ownership of our banking and nonbanking subsidiaries, the issuance of debt and intersegment eliminations.

The accounting policies of the individual operating segments are the same as those of the Company as described in Note 1. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated from consolidated results of operations. Financial results for each segment are presented below. For segment reporting purposes, the statement of financial condition of Trust and Investments is included with the Banking segment.

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		0000000000		0000000000		0000000000		0000000000			0000000000			0000000000			0000000000		0000000000
	Quarters Ended September 30,
	Banking				Trust and Investments					Holding Company and Other Adjustments						Consolidated Company
	2011		2010		2011		2010			2011			2010			2011		2010
Net interest income	$	105,213	$	103,957	$	635	$	657		$	(4,759	)	$	(5,655	)	$	101,089	$	98,959
Provision for loan and covered loan losses		32,615		41,435		—		—			—			—			32,615		41,435
Non-interest income		23,162		19,023		4,457		4,295			16			42			27,635		23,360
Non-interest expense		65,157		56,481		4,680		4,844			5,197			6,752			75,034		68,077
Income (loss) before taxes		30,603		25,064		412		108			(9,940	)		(12,365	)		21,075		12,807
Income tax provision (benefit)		11,156		9,450		164		42			(3,727	)		(4,706	)		7,593		4,786
Net income (loss)		19,447		15,614		248		66			(6,213	)		(7,659	)		13,482		8,021
Noncontrolling interest expense		—		—		33		71			—			—			33		71
Net income (loss) attributable to controlling interests	$	19,447	$	15,614	$	215	$	(5	)	$	(6,213	)	$	(7,659	)	$	13,449	$	7,950

		0000000000		0000000000		0000000000		0000000000			0000000000			0000000000			0000000000		0000000000
	Nine Months Ended September 30,
	Banking				Trust and Investments					Holding Company and Other Adjustments						Consolidated Company
	2011		2010		2011		2010			2011			2010			2011		2010
Net interest income	$	316,521	$	315,765	$	1,899	$	1,976		$	(14,275	)	$	(17,131	)	$	304,145	$	300,610
Provision for loan and covered loan losses		101,286		159,375		—		—			—			—			101,286		159,375
Non-interest income		58,695		44,696		14,138		13,555			21			130			72,854		58,381
Non-interest expense		193,938		180,005		14,544		15,187			17,565			22,258			226,047		217,450
Income (loss) before taxes		79,992		21,081		1,493		344			(31,819	)		(39,259	)		49,666		(17,834	)
Income tax provision (benefit)		27,580		7,010		595		134			(11,983	)		(14,800	)		16,192		(7,656	)
Net income (loss)		52,412		14,071		898		210			(19,836	)		(24,459	)		33,474		(10,178	)
Noncontrolling interest expense		—		—		163		217			—			—			163		217
Net income (loss) attributable to controlling interests	$	52,412	$	14,071	$	735	$	(7	)	$	(19,836	)	$	(24,459	)	$	33,311	$	(10,395	)

Selected Balances	Banking				Holding Company and Other Adjustments (1)						Consolidated Company
	9/30/11		12/31/10		9/30/11			12/31/10			9/30/11		12/31/10
Assets	$	10,650,944	$	11,180,923	$	1,368,917		$	1,284,698		$	12,019,861	$	12,465,621
Total loans		8,674,955		9,114,357		—			—			8,674,955		9,114,357
Deposits		10,276,112		10,720,500		(167,449	)		(185,071	)		10,108,663		10,535,429

⁽¹⁾  Deposit amounts represent the elimination of Holding Company cash accounts included in total deposits of the Banking segment.

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18. VARIABLE INTEREST ENTITIES

A variable interest entity (“VIE”) is a partnership, limited liability company, trust, or other legal entity that does not have sufficient equity to permit it to finance its activities without additional subordinated financial support from other parties, or whose investors lack one of three characteristics associated with owning a controlling financial interest. Those characteristics are: (i) the power, through voting rights or similar rights, to direct the activities of an entity that most significantly impact the entity’s economic performance; (ii) the obligation to absorb the expected losses of an entity if they occur; and (iii) the right to receive the expected residual returns of the entity, if they occur.

U.S. GAAP requires VIEs to be consolidated by the party that has those characteristics associated with owning a controlling financial interest (i.e., the primary beneficiary). The following summarizes the VIEs in which we have a significant interest and discusses the accounting treatment applied for the consolidation of the VIEs.

As discussed in Note 10, we sponsor and wholly own 100% of the common equity of four trusts that were formed for the purpose of issuing trust preferred securities to third party investors and investing the proceeds from the sale of the trust preferred securities solely in debentures issued by the Company. The trusts’ only assets as of September 30, 2011 were the $244.8 million principal balance of the debentures and the related interest receivable. The trusts meet the definition of a VIE, but the Company is not the primary beneficiary of the trusts and accordingly, the trusts are not consolidated in our financial statements.

We hold certain investments in funds that make investments in accordance with the provisions of the Community Reinvestment Act. Such investments have a carrying amount of $2.7 million at September 30, 2011 and are included within non-marketable equity investments in our Consolidated Statements of Financial Condition. The investments meet the definition of a VIE, but the Company is not the primary beneficiary as we are a limited investor in those investment funds and do not have the power over their investment activities. Accordingly, we will continue to account for our interests in these investments using the cost method. Our maximum exposure to loss is limited to the carrying amount plus additional required future capital contributions of $1.6 million as of September 30, 2011.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

PrivateBancorp, Inc. (“PrivateBancorp” or the “Company”), was incorporated in Delaware in 1989 and became a holding company registered under the Bank Holding Company Act of 1956, as amended. The PrivateBank and Trust Company (the “Bank” or the “PrivateBank”), the sole bank subsidiary of PrivateBancorp, was opened in Chicago in 1991. The Bank provides customized business and personal financial services to middle-market companies and business owners, executives, entrepreneurs and families in all the markets and communities it serves.

Beginning in late 2007, we hired a team of experienced middle market commercial bankers and, under the leadership of our current chief executive officer, initiated a strategic plan to transform the organization into a leading middle market commercial bank. We have more than doubled our total assets from $5.0 billion at December 31, 2007 to $12.5 billion at December 31, 2010. We also increased total loans from $4.2 billion at December 31, 2007 to $9.1 billion at December 31, 2010. Total assets and total loans declined slightly from year end levels to $12.0 billion and $8.7 billion, respectively, at September 30, 2011, as new loan funding was offset by a disposition of problem assets and the exit from relationships no longer consistent with our strategy, primarily commercial real estate and construction loans, as we focus on building commercial loan balances consistent with our commercial middle market expertise.

Since the opening of our Chicago headquarters in 1991, we have expanded into multiple geographic markets through the creation of new banks and banking offices and the acquisition of existing banks. Today, we serve seven geographic markets in the Midwest, as well as Denver and Atlanta, although the majority of our business is conducted in the greater Chicago market. Effective October 31, 2010, we completed the consolidation of our banking operations into a single bank subsidiary. We offer a wide range of lending, treasury management, investment, capital markets products and trust and investments services to meet our clients’ commercial and personal needs. We also originate residential mortgage loans for sale into the secondary market with servicing released.

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Management’s discussion and analysis should be read in conjunction with the unaudited interim consolidated financial statements and accompanying notes presented elsewhere in this report, as well as our audited consolidated financial statements and accompanying notes included in our 2010 Annual Report on Form 10-K. Results of operations for the nine months ended September 30, 2011 are not necessarily indicative of results to be expected for the year ending December 31, 2011. Unless otherwise stated, all earnings per share data included in this section and throughout the remainder of this discussion are presented on a fully-diluted basis.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this report that are not historical facts may constitute forward-looking statements within the meaning of federal securities laws. Forward-looking statements represent management’s beliefs and expectations regarding future events, such as our anticipated future financial results, credit quality, revenues, expenses, or other financial items, and the impact of business plans and strategies or legislative or regulatory actions. Forward-looking statements are typically identified by words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” or “continue” and other comparable terminology.

Our ability to predict results or the actual effects of future plans, strategies or events is inherently uncertain. Factors which could cause actual results to differ from those reflected in forward-looking statements include, but are not limited to: unforeseen credit quality problems or further deterioration in asset quality that could result in charge-offs greater than we have anticipated in our allowance for loan losses; adverse developments impacting one or more large credits; the extent of further deterioration in real estate values in our market areas, particularly in Chicago; difficulties in resolving problem credits or slower than anticipated dispositions of OREO which may result in increased losses or higher credit costs; continued uncertainty regarding global economic recovery and economic outlook and ongoing volatility in market conditions that may impact asset quality or prolong weakness in demand for loans or other banking products and services; weakness in the commercial and industrial sector; unanticipated withdrawals of significant client deposits; lack of sufficient or cost-effective sources of liquidity or funding; the terms and availability of capital when and to the extent necessary or required to repay TARP or otherwise; loss of key personnel or an inability to recruit and retain appropriate talent; potential for significant charges if our deferred tax or goodwill assets suffer impairment; unanticipated changes in interest rates or significant tightening of credit spreads; competitive pricing pressures; uncertainty regarding implications of the Dodd-Frank Act and the rules and regulations to be adopted in connection with implementation of the legislation, including evolving regulatory capital standards; other legislative, regulatory or accounting changes affecting financial services companies and/or the products and services offered by financial services companies; uncertainties related to potential costs associated with pending litigation; or failures or disruptions to our data processing or other information or operational systems.

These forward-looking statements are subject to significant risks, assumptions and uncertainties, and could be affected by many factors including those set forth in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2010, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this Form 10-Q as well as those set forth in our subsequent periodic and current reports filed with the SEC. These factors should be considered in evaluating forward-looking statements and undue reliance should not be placed on our forward-looking statements. Forward-looking statements speak only as of the date they are made, and we assume no obligation to update any of these statements in public filings in light of future events unless required under the federal securities laws.

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements are prepared in accordance with U.S. GAAP, and our accounting policies are consistent with predominant practices in the financial services industry. Critical accounting policies are those policies that require management to make the most significant estimates, assumptions, and judgments based on information available at the date of the financial statements that affect the amounts reported in the financial statements and accompanying notes. Future changes in information may affect these estimates, assumptions, and judgments, which, in turn, may affect amounts reported in the consolidated financial statements.

Our most significant accounting policies are presented in Note 1, “Summary of Significant Accounting Policies,” to the Notes to Consolidated Financial Statements of our 2010 Annual Report on Form 10-K. These policies, along with the disclosures presented in the other consolidated financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the consolidated financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has determined that our accounting policies with respect to the allowance for loan losses, goodwill and intangible assets, and income taxes are the accounting areas requiring subjective or complex judgments that are most important to our financial position and results of operations, and, as such, are considered to be critical accounting policies, as discussed below.

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Allowance for Loan Losses

We maintain an allowance for loan losses at a level management believes is sufficient to absorb credit losses inherent in our loan portfolio. The allowance for loan losses is assessed quarterly and represents an accounting estimate of probable losses in the portfolio at each balance sheet date based on a review of available and relevant information at that time. The allowance consists of provisions for probable losses that have been identified relating to specific borrowing relationships that are individually evaluated for impairment (“the specific component”), as well as probable losses inherent in our loan portfolio that are not specifically identified (“the general allocated component”), which is determined using a methodology that is a function of quantitative and qualitative factors applied to segments of our loan portfolio as well as management’s judgment.

The specific component relates to impaired loans. Impaired loans consist of nonaccrual loans (which include nonaccrual TDRs) and loans classified as accruing troubled debt restructurings. A loan is considered nonaccrual when, based on current information and events, management believes that it is probable that we will be unable to collect all amounts due (both principal and interest) according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the amount of impairment is measured based on the loan’s observable fair value, fair value of the underlying collateral less selling costs if the loan is collateral dependent, or the present value of expected future cash flows discounted at the loan’s effective interest rate. If the measurement of the impaired loan is less than the recorded investment in the loan, impairment is recognized by creating a specific valuation reserve as a component of the allowance for loan losses. Impaired loans exceeding $500,000 are evaluated individually, while smaller loans are evaluated as pools using historical loss experience, as well as management’s loss expectations, for the respective asset class and product type.

At the time a collateral-dependent loan is initially determined to be impaired, we review the existing collateral appraisal. If the most recent appraisal is greater than a year old, a new appraisal is obtained on the underlying collateral. Appraisals on impaired collateral-dependent loans are reviewed as received and again at each succeeding six-month interval. If during the course of the six-month review period there are indications of the possibility of a significant decline in the value of collateral, a new appraisal is usually obtained to update the value of the collateral and, if necessary, any related reserve.

To determine the general allocated component of the allowance for loan losses, we segregate loans by originating line of business and vintage (“transformational” and “legacy”) for reserve purposes because of observable similarities in the performance experience of loans underwritten by these business units. In general, loans originated by the business units that existed prior to the strategic changes in 2007 are considered “legacy” loans. Loans originated by a business unit that was established in connection with or following the business transformation plan are considered “transformational” loans. Renewals or restructurings of legacy loans may continue to be evaluated as legacy loans depending on the structure or defining characteristics of the new transaction. The Company has implemented a line of business model that has reorganized the legacy business units so that after 2009, all new loan originations are considered transformational.

The methodology produces an estimated range of potential loss exposure for the product types within each originating line of business. We consider the appropriate balance of the general allocated component of the reserve within these ranges based on a variety of internal and external quantitative and qualitative factors to reflect data or timeframes not captured by the model as well as market and economic data and management judgment. In certain instances, these additional factors and judgments may lead to management’s conclusion that the appropriate level of the reserve is outside the range determined through the model.

Determination of the allowance is inherently subjective, as it requires significant estimates, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, risk ratings, product type, and vintage, as well as consideration of current economic trends and portfolio attributes, all of which may be susceptible to significant change.

Credit exposures deemed to be uncollectible are charged-off against the allowance, while recoveries of amounts previously charged-off are credited to the allowance. A provision for loan losses, which is a charge against earnings, is recorded to bring the allowance for loan losses to a level that, in management’s judgment, is appropriate to absorb probable losses in the loan portfolio as of the balance sheet date.

Goodwill and Intangible Assets

Goodwill represents the excess of purchase price over the fair value of net assets acquired using the acquisition method of accounting. Other intangible assets represent purchased assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset, or liability.

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Goodwill is allocated to reporting units at acquisition. Subsequently, goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis or more frequently if an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying amount. In the event that we conclude that all or a portion of our goodwill may be impaired, a noncash charge for the amount of such impairment would be recorded in earnings. Such a charge would have no impact on tangible or regulatory capital.

The impairment testing process is conducted by assigning net assets and goodwill to each reporting unit. In “step one,” the fair value of each reporting unit is compared to the recorded book value. Our step one calculation of each reporting unit’s fair value is based upon a simple average of two metrics: (1) a primary market approach, which measures fair value based upon trading multiples of independent publicly traded financial institutions of comparable size and character to the reporting units, and (2) an income approach, which estimates fair value based upon discounted cash flows (“DCF”) and terminal value (using the perpetuity growth method). If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of a reporting unit exceeds its fair value, the impairment test continues (“step two”) by comparing the carrying value of the reporting unit’s goodwill to the implied fair value of goodwill. The implied fair value of goodwill is determined using the residual approach, where the fair value of a reporting unit is allocated to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit, calculated in step one, is the price paid to acquire the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. An impairment charge is recognized to the extent the carrying value of goodwill exceeds the implied fair value of goodwill. We will complete our annual goodwill impairment test during the fourth quarter 2011.

Goodwill impairment testing is considered a “critical accounting estimate” as estimates and assumptions are made about future performance and cash flows, as well as other prevailing market factors. For our annual impairment testing, we engage an independent valuation firm to assist in the computation of the fair value estimates of each reporting unit as part of its impairment assessment. In connection with obtaining an independent third party valuation, management provides certain information and assumptions that are utilized in the DCF and implied fair value calculations. Assumptions critical to the process include: forecasted cash flows, which are developed for each segment by considering several key business drivers such as historical performance, forward interest rates (using forward interest rate curves to forecast future expected interest rates), anticipated loan and deposit growth, and industry and economic trends; discount rates; and credit quality assessments, among other considerations. We provide the best information available at the time to be used in these estimates and calculations.

Identified intangible assets that have a finite useful life are amortized over that life in a manner that reflects the estimated decline in the economic value of the identified intangible asset and are subject to impairment testing whenever events or changes in circumstances indicate that the carrying value may not be recoverable. During the third quarter 2011, there were no events or circumstances to indicate that there may be impairment of intangible assets. All of the other intangible assets have finite lives which are amortized over varying periods not exceeding 15 years and include core deposit premiums, client relationship, and assembled workforce intangibles, which are amortized on a straight line basis.

Income Taxes

The determination of income tax expense or benefit, and the amounts of current and deferred income tax assets and liabilities are based on complex analyses of many factors, including interpretation of federal and state income tax laws, current financial accounting standards, the difference between tax and financial reporting bases of assets and liabilities (temporary differences), assessments of the likelihood that the reversals of deferred deductible temporary differences will yield tax benefits, and estimates of reserves required for tax uncertainties. In addition, for interim reporting purposes, management generally determines its income tax provision, exclusive of any discrete items, based on its current best estimate of pre-tax income, permanent differences and the resulting effective tax rate expected for the full year.

We are subject to the federal income tax laws of the United States and the tax laws of the states and other jurisdictions where we conduct business. We periodically undergo examination by various governmental taxing authorities. Such authorities may require that changes in the amount of tax expense be recognized when their interpretations of tax law differ from those of management, based on their judgments about information available to them at the time of their examinations. There can be no assurance that future events, such as court decisions, new interpretations of existing law or positions by federal or state taxing authorities, will not result in tax liability amounts that differ from our current assessment of such amounts, the impact of which could be significant to future results.

Temporary differences may give rise to deferred tax assets or liabilities, which are recorded on our Consolidated Statements of Financial Condition. We assess the likelihood that deferred tax assets will be realized in future periods based on weighing both positive and negative evidence and establish a valuation allowance for those deferred tax assets for which recovery is unlikely, based on a standard of “more likely” than not. In making this assessment, we must make judgments and estimates

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regarding the ability to realize these assets through: (a) the future reversal of existing taxable temporary differences, (b) future taxable income, (c) the possible application of future tax planning strategies, and (d) carryback to taxable income in prior years. We have not established a valuation allowance relating to our deferred tax assets at September 30, 2011. However, there is no guarantee that the tax benefits associated with these deferred tax assets will be fully realized. We have concluded, as of September 30, 2011, that it is more likely than not that such tax benefits will be realized.

In the preparation of income tax returns, tax positions are taken based on interpretation of federal and state income tax laws for which the outcome of such positions may not be certain. We periodically review and evaluate the status of uncertain tax positions and may establish tax reserves for tax benefits that may not be realized. The amount of any such reserves are based on the standards for determining such reserves as set forth in current accounting guidance and our estimates of amounts that may ultimately be due or owed (including interest). These estimates may change from time to time based on our evaluation of developments subsequent to the filing of the income tax return, such as tax authority audits, court decisions or other tax law interpretations. There can be no assurance that any tax reserves will be sufficient to cover tax liabilities that may ultimately be determined to be owed. At September 30, 2011, we had $458,000 of tax reserves established relating to uncertain tax positions that would favorably affect the Company’s effective tax rate if recognized in future periods.

For additional discussion of income taxes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Note 13 of “Notes to Consolidated Financial Statements” in Item 1 of this Form 10-Q, and Notes 1 and 15 of “Notes to Consolidated Financial Statements” in our 2010 Annual Report on Form 10-K.

USE OF NON-U.S. GAAP FINANCIAL MEASURES

This report contains both U.S. GAAP and non-U.S. GAAP financial measures. We believe that these non-U.S. GAAP financial measures provide information useful to investors in understanding our underlying operational performance, business, and performance trends and facilitate comparisons with the performance of others in the banking industry. Where non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measure, as well as the reconciliation to the comparable U.S. GAAP financial measure, can be found in Table 31. These disclosures should not be viewed as a substitute for operating results determined in accordance with U.S. GAAP, nor are they necessarily comparable to non-U.S. GAAP performance measures that may be presented by other companies.

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THIRD QUARTER OVERVIEW

The following table presents selected quarterly financial data highlighting operating performance trends over the past year.

Table 1

Consolidated Financial Highlights

(Amounts in thousands, except per share data)

	Quarters Ended
	2011									2010
	September 30			June 30			March 31			December 31			September 30
Selected Operating Statistics
Net income	$	13,482		$	9,018		$	10,974		$	11,979		$	8,021
Net income available to common stockholders		10,023			5,541			7,487			8,503			4,545
Net interest income		101,089			100,503			102,553			100,347			98,959
Fee revenue (1)		23,265			20,922			23,260			25,556			20,331
Net revenue (2)		129,404			122,811			126,970			136,088			123,210
Operating profit (2)		54,370			47,147			51,621			53,940			55,133
Provision for loan losses (3)		32,341			31,725			36,706			34,535			40,031
Per Share Data
Basic earnings (loss) per share	$	0.14		$	0.08		$	0.10		$	0.12		$	0.06
Diluted earnings (loss) per share	$	0.14		$	0.08		$	0.10		$	0.12		$	0.06
Tangible book value at period end (2)(4)	$	13.04		$	12.68		$	12.43		$	12.30		$	12.53
Dividend payout ratio		7.14	%		12.50	%		10.00	%		8.33	%		16.67	%
Performance Ratios
Return on average common equity		3.80	%		2.18	%		3.03	%		3.31	%		1.77	%
Return on average assets		0.44	%		0.29	%		0.35	%		0.38	%		0.25	%
Net interest margin (2)		3.49	%		3.36	%		3.46	%		3.33	%		3.28	%
Efficiency ratio (2)(5)		57.98	%		61.61	%		59.34	%		60.36	%		55.25	%
Credit Quality(3)
Nonperforming loans at period end	$	304,747		$	330,448		$	356,932		$	365,880		$	371,156
OREO at period end		116,364			123,997			93,770			88,728			90,944
Total nonperforming assets at period end	$	421,111		$	454,445		$	450,702		$	454,608		$	462,100
Restructured loans accruing interest	$	106,330		$	124,614		$	100,895		$	87,576		$	53,397
Special mention loans (6)	$	218,561		$	227,413		$	275,519		$	398,834		$	558,757
Potential problem loans (6)	$	277,125		$	392,019		$	518,144		$	507,590		$	448,766
Net charge-offs	$	(38,586	)	$	(43,676	)	$	(41,290	)	$	(35,106	)	$	(49,050	)
Total nonperforming loans to total loans		3.51	%		3.81	%		3.95	%		4.01	%		4.13	%
Total nonperforming assets to total assets		3.50	%		3.75	%		3.61	%		3.65	%		3.67	%
Allowance for loan losses to total loans		2.31	%		2.38	%		2.41	%		2.44	%		2.48	%

Balance Sheet Highlights

	As of
	2011									2010
	September 30			June 30			March 31			December 31			September 30
Total assets	$	12,019,861		$	12,115,377		$	12,497,442		$	12,465,621		$	12,583,965
Average earning assets (for the quarter)		11,446,323			11,916,038			11,930,751			11,918,849			11,938,905
Loans (3)		8,674,955			8,672,642			9,037,067			9,114,357			8,992,129
Allowance for loan losses (3)		(200,041	)		(206,286	)		(218,237	)		(222,821	)		(223,392	)
Deposits		10,108,663			10,234,268			10,625,976			10,535,429			10,530,472
Client deposits (7)		10,047,998			9,847,940			10,047,456			9,937,060			10,117,614

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	As of
	2011									2010
	September 30			June 30			March 31			December 31			September 30
Capital Ratios
Total risk-based capital (2)		14.89	%		15.12	%		14.55	%		14.18	%		14.40	%
Tier 1 risk-based capital (2)		12.95	%		12.95	%		12.41	%		12.06	%		12.25	%
Tier 1 leverage ratio (2)		11.48	%		11.00	%		10.91	%		10.78	%		10.71	%
Tier 1 common capital (2)		8.38	%		8.34	%		7.97	%		7.69	%		7.79	%
Tangible common equity to tangible assets (2)(8)		7.86	%		7.58	%		7.17	%		7.10	%		7.17	%
Average equity to average assets		10.64	%		10.07	%		9.92	%		10.06	%		10.04	%

n/m    Not meaningful.

⁽¹⁾  Computed as total non-interest income less net securities gains (losses).

⁽²⁾  This is a non-U.S. GAAP financial measure. Refer to Table 31 for a reconciliation from non-U.S. GAAP to U.S. GAAP.

⁽³⁾  Excludes covered assets.

⁽⁴⁾  Computed as total equity less preferred stock, goodwill and other intangibles divided by outstanding shares of common stock at end of period.

⁽⁵⁾  Computed as non-interest expense divided by the sum of net interest income on a tax equivalent basis (assuming a federal income tax rate of 35%) and non-interest income.

⁽⁶⁾  Refer to the section entitled “Delinquent Loans, Special Mention and Potential Problem Loans and Nonperforming Assets” included in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Form 10-Q for additional discussion.

⁽⁷⁾  Total deposits net of traditional brokered deposits and non-client CDARS^®.

⁽⁸⁾  Computed as tangible common equity divided by tangible assets, where tangible common equity equals total equity less preferred stock, goodwill and other intangible assets and tangible assets equals total assets less goodwill and other intangible assets.

During the third quarter 2011, we continued to attract new middle market commercial clients and reshape our loan portfolio mix, growing commercial and industrial loans to 59% of the total portfolio at quarter end, up from 54% at December 31, 2010. Commercial real estate and construction loans were 32% of total loans at quarter end, compared to 37% at the prior year end. We were successful in adding over $500 million in funded new loan relationships in the third quarter despite overall low demand for credit in the slow-growth economy. Of total loans outstanding at September 30, 2011, more than $950 million were loans to new relationships added since the beginning of the year. However, due to paydowns and payoffs of loans in the normal course of business as well as asset quality management activities, total loans remained relatively flat compared to the prior quarter end. In addition, we are continuing to exit relationships no longer viewed as consistent with our middle market strategy as we focus on optimizing capital utilization and driving cross-sell opportunities to enhance revenue. Total loans were $8.7 billion at September 30, 2011, a decrease of 5% from December 31, 2010.

This reshaping of our loan portfolio coupled with our ongoing problem asset dispositions is strengthening the overall quality of our balance sheet. We disposed of $115 million of problem assets during the third quarter of 2011 and approximately $300 million since the beginning of the year. Special mention and potential problem loans have declined by 45% during the first nine months of the year, while total nonperforming loans decreased 17% to $304.7 million, or 3.51% of total loans, at September 30, 2011, from $365.9 million, or 4.01% of total loans, at December 31, 2010. We experienced a meaningful decline in new nonperforming loans during the quarter and expect that nonperforming loan inflows should continue to moderate with the decline in special mention and potential problem loans (i.e., early stage problem loans). Nonperforming asset levels may fluctuate depending on the timing of dispositions or other remediation actions.

Net income for the quarter ended September 30, 2011 was $13.5 million, up 68% from $8.0 million for the quarter ended September 30, 2010. The increase in net income was primarily due to a lower provision for loan and covered loan losses resulting from asset quality improvements. Net interest income was up despite lower loan balances due to significant reductions in interest expense and non-interest income increased mostly due to a higher level of securities gains compared to the year-ago quarter. The increased net revenue was more than offset by increases in non-interest expense, mostly from losses incurred in connection with the sale of OREO and higher salary and benefit costs in the third quarter of 2011 compared to the year ago quarter, which had lower incentive compensation expense.

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For the nine months ended September 30, 2011, net income was $33.5 million, compared to a net loss of $10.2 million for the comparable 2010 year to date period. The increase in net income for the year to date period was significantly driven by a $58.1 million reduction in the provision for loan and covered loan losses, partially offset by a $12.8 million increase in the net foreclosed property expenses, resulting from asset quality improvements and significant dispositions of problem assets, compared to the same period in the prior year.

Net revenue and operating profit were favorably impacted by an increase in non-interest income of 18% from the prior year quarter and 25% from the prior year to date period, with higher net securities gains, capital markets revenue and greater loan and credit-related fees. Compared to the third quarter 2010, net revenue increased 5% to $129.4 million for the third quarter 2011, while operating profit for the quarter was relatively flat compared to a year ago due to low incentive compensation expense in third quarter 2010. Operating profit increased 6% to $153.1 million for the nine months ended September 30, 2011 compared to the year ago period.

Comparing both the third quarters ended September 30, 2011 and 2010, as well as the nine month periods then ended, net interest margin benefitted from the favorable shift in portfolio mix toward higher-yielding commercial loans as well as from decreases in interest expense due to an increase in noninterest-bearing deposits and deposits pricing downward in the record low interest rate environment. Noninterest-bearing demand deposits increased steadily over the last six quarters and were 28% of total deposits at September 30, 2011. We have allowed maturing brokered deposits to continue to run off in 2011, as loan balances declined approximately 5% during the year. Net interest margin increased 21 basis points to 3.49% for the quarter ended September 30, 2011, compared to the year ago quarter of 3.28%. The current quarter’s net interest margin included seven basis points from one-time items recorded through interest income during the quarter relating to two transactions. Net interest margin increased ten basis points to 3.44% for the nine months ended September 30, 2011, compared to the prior year period of 3.34%. Refer to the section entitled “Net Interest Margin and Margin Analysis” included in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Form 10-Q for additional discussion of net interest margin.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income equals the excess of interest income (including discount accretion on covered loans) plus fees earned on interest-earning assets over interest expense incurred on interest-bearing liabilities. The level of interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities impact net interest income.

Interest rate spread and net interest margin are utilized to measure and explain changes in net interest income. Interest rate spread is the difference between the yield on interest-earning assets and the rate paid for interest-bearing liabilities that fund those assets. The net interest margin is expressed as the percentage of net interest income to average interest-earning assets. The net interest margin exceeds the interest rate spread because noninterest-bearing sources of funds, principally noninterest-bearing demand deposits and stockholders’ equity, also support interest-earning assets.

The accounting policies underlying the recognition of interest income on loans, securities, and other interest-earning assets are included in the “Notes to Consolidated Financial Statements” contained in our 2010 Annual Report on Form 10-K.

For purposes of this discussion, net interest income and any ratios or metrics that include net interest income as a component, such as for example, net interest margin, have been adjusted to a fully tax-equivalent basis to more appropriately compare the returns on certain tax-exempt securities to those on taxable interest-earning assets. The reconciliation of such adjustment is presented in the following table.

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Table 2

Effect of Tax-Equivalent Adjustment

(Dollars in thousands)

	Quarters Ended September 30,							Nine Months Ended September 30,
	2011		2010		% Change			2011		2010		% Change
Net interest income (U.S. GAAP)	$	101,089	$	98,959		2.2		$	304,145	$	300,610		1.2
Tax-equivalent adjustment		680		891		(23.7	)		2,187		2,700		(19.0	)
Tax-equivalent net interest income	$	101,769	$	99,850		1.9		$	306,332	$	303,310		1.0

Table 3 and 4 summarize the changes in our average interest-earning assets and interest-bearing liabilities as well as the average interest rates earned and paid on these assets and liabilities, respectively, for the quarters and nine months ended September 30, 2011 and 2010. The tables also detail increases and decreases in income and expense for each of the major categories of interest-earning assets and interest-bearing liabilities and indicate the extent to which such variances are attributable to volume and rate changes. Interest income and yields are presented on a tax-equivalent basis (assuming a federal income tax rate of 35%), through inclusion of the tax-equivalent adjustment presented in Table 2 above.

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Third quarter 2011 compared to third quarter 2010

Table 3

Net Interest Income and Margin Analysis

(Dollars in thousands)

	Quarters Ended September 30,																Attribution of Change in
	2011								2010								Net Interest Income (1)
	Average Balance			Interest (2)		Yield/ Rate (%)			Average Balance			Interest (2)		Yield/ Rate (%)			Volume			Yield/ Rate			Total
Assets:
Federal funds sold and other short-term investments	$	373,705		$	231		0.24	%	$	594,319		$	376		0.25	%	$	(136	)	$	(9	)	$	(145	)
Securities:
Taxable		1,935,653			15,196		3.14	%		1,809,969			16,996		3.76	%		1,123			(2,923	)		(1,800	)
Tax-exempt (3)		132,716			1,973		5.95	%		166,252			2,552		6.14	%		(501	)		(78	)		(579	)
Total securities		2,068,369			17,169		3.32	%		1,976,221			19,548		3.96	%		622			(3,001	)		(2,379	)
Loans, excluding covered assets:
Commercial		5,079,470			60,936		4.69	%		4,426,851			51,836		4.58	%		7,802			1,298			9,100
Commercial real estate		2,511,749			26,590		4.14	%		3,096,387			33,777		4.27	%		(6,215	)		(972	)		(7,187	)
Construction		361,764			3,492		3.78	%		580,692			5,551		3.74	%		(2,112	)		53			(2,059	)
Residential		315,244			3,411		4.33	%		352,179			4,205		4.78	%		(419	)		(375	)		(794	)
Personal and home equity		429,632			3,879		3.58	%		501,825			4,849		3.83	%		(666	)		(304	)		(970	)
Total loans, excluding covered assets(4)		8,697,859			98,308		4.43	%		8,957,934			100,218		4.38	%		(1,610	)		(300	)		(1,910	)
Total interest-earning assets before covered assets (3)		11,139,933			115,708		4.08	%		11,528,474			120,142		4.10	%		(1,124	)		(3,310	)		(4,434	)
Covered assets (5)		306,390			3,866		4.95	%		410,431			5,390		5.15	%		(1,320	)		(204	)		(1,524	)
Total interest-earning assets (3)		11,446,323			119,574		4.11	%		11,938,905			125,532		4.13	%		(2,444	)		(3,514	)		(5,958	)
Cash and due from banks		153,020								133,126
Allowance for loan and covered assets losses		(232,501	)							(245,204	)
Other assets		718,891								694,956
Total assets	$	12,085,733							$	12,521,783
Liabilities and Equity:
Interest-bearing demand deposits	$	597,741		$	625		0.42	%	$	655,028		$	675		0.41	%	$	(60	)	$	10		$	(50	)
Savings deposits		210,191			210		0.40	%		176,308			216		0.49	%		38			(44	)		(6	)
Money market accounts		4,183,937			5,146		0.49	%		4,889,762			8,296		0.67	%		(1,084	)		(2,066	)		(3,150	)
Time deposits		1,335,757			4,087		1.21	%		1,463,500			5,482		1.49	%		(451	)		(944	)		(1,395	)
Brokered deposits		1,083,815			1,808		0.66	%		1,095,932			2,648		0.96	%		(29	)		(811	)		(840	)
Total interest-bearing deposits		7,411,441			11,876		0.64	%		8,280,530			17,317		0.83	%		(1,586	)		(3,855	)		(5,441	)
Short-term borrowings		60,283			466		3.02	%		163,626			1,297		3.10	%		(800	)		(31	)		(831	)
Long-term debt		405,880			5,463		5.34	%		468,425			7,068		5.97	%		(888	)		(717	)		(1,605	)
Total interest-bearing liabilities		7,877,604			17,805		0.90	%		8,912,581			25,682		1.14	%		(3,274	)		(4,603	)		(7,877	)
Noninterest-bearing demand deposits		2,747,760								2,164,147
Other liabilities		174,937								187,570
Equity		1,285,432								1,257,485
Total liabilities and equity	$	12,085,733							$	12,521,783
Net interest spread							3.21	%							2.99	%
Effect of noninterest-bearing funds							0.28	%							0.29	%
Net interest income/margin (3)				$	101,769		3.49	%				$	99,850		3.28	%	$	830		$	1,089		$	1,919

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Quarterly Net Interest Margin Trend
	2011									2010
	Third			Second			First			Fourth			Third			Second			First
Yield on interest-earning assets (3)		4.11	%		4.01	%		4.15	%		4.08	%		4.13	%		4.32	%		4.37	%
Yield on interest-earning assets, before covered assets (3)		4.08	%		3.98	%		4.09	%		4.03	%		4.10	%		4.02	%		4.10	%
Cost of interest-bearing liabilities		0.90	%		0.90	%		0.93	%		1.01	%		1.14	%		1.21	%		1.34	%
Net interest margin (3)		3.49	%		3.36	%		3.46	%		3.33	%		3.28	%		3.39	%		3.33	%
Covered asset accretion contribution to net interest margin		0.03	%		0.03	%		0.05	%		0.05	%		0.03	%		0.28	%		0.25	%
Net interest margin, excluding impact of covered asset accretion (3)		3.46	%		3.33	%		3.41	%		3.28	%		3.25	%		3.11	%		3.08	%

⁽¹⁾  For purposes of this table, changes which are not due solely to volume changes or rate changes are allocated to such categories in proportion to the absolute amounts of the change in each.

⁽²⁾  Interest income includes $6.4 million and $5.4 million in loan fees for the quarters ended September 30, 2011 and 2010, respectively.

⁽³⁾  Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. See Table 2 for a reconciliation of the effect of the tax-equivalent adjustment.

⁽⁴⁾  Average loans on a nonaccrual basis for the recognition of interest income totaled $329.7 million and $379.4 million for the quarters ended September 30, 2011 and 2010, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonaccrual loans is estimated to be approximately $3.5 million and $4.2 million for the quarters ended September 30, 2011 and 2010, respectively, and is based on the average loan portfolio yield for the respective period.

⁽⁵⁾  Covered interest-earning assets consist of loans acquired through an FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset. Refer to the section entitled “Covered Assets” for a detailed discussion.

Note Prior period net interest margin computations were modified to conform with the current period presentation.

Net interest income on a tax-equivalent basis increased 2% to $101.8 million in the third quarter 2011 compared to third quarter 2010 and was largely due to lower cost of funds. Of the $7.9 million in lower interest expense, $3.9 million was attributable to an overall decrease in the average rate paid on interest-bearing deposits. Average interest-bearing deposits decreased $869.1 million and average noninterest-bearing liabilities increased $583.6 million from the third quarter 2010. Also, a reduction in the balances of average short-term borrowings and long-term debt due to maturing FHLB advances, along with a reduction in the average cost of these borrowings, decreased interest expense by $2.4 million. Net interest income continued to be impacted by the negative effect of nonaccrual loans.

Net interest margin was 3.49% for the third quarter 2011, an increase of 21 basis points from 3.28% for the third quarter 2010. The net interest margin increase was primarily due to the average rate on interest-bearing liabilities decreasing by 24 basis points as deposits and short and long-term borrowings repriced downward over the past year, as well as a $583.6 million, or 27% increase in noninterest-bearing deposits. Net interest margin also benefitted from an increase in the loan portfolio yield as a favorable shift in the portfolio mix with an increase in commercial loans over the year ago quarter led to an 11 basis point increase in the average interest received on such loans. A lower level of nonperforming loans compared to a year ago also contributed four basis points to the higher loan portfolio yield. In addition, third quarter 2011 net interest margin was positively impacted by a seven basis point increase due to one-time items on two transactions, resulting in higher loan revenue recorded through interest income, and a $705.8 million year-over-year decrease in average balances of money market accounts, along with an 18 basis point decrease in the average interest paid on such accounts. The lower interest rate environment negatively impacted the yield on the investment portfolio, however, resulting in a year-over-year reduction in interest income of $3.0 million despite a larger securities portfolio.

During the third quarter 2011, we entered into receive fixed/pay variable interest rate swaps to convert certain floating-rate commercial loans to fixed rate in order to substantially reduce the variability in forecasted interest cash flows due to market interest rate changes. The notional value of these cash flow hedges at September 30, 2011 was $100.0 million with a positive impact on quarterly net interest income of $156,000.

Average interest-earning assets declined $492.6 million compared to the prior year period, due to declines in average loan balances and fed funds sold and other short term investments from the quarter ended September 30, 2010. We have favorably shifted the mix of loans toward commercial loans, increasing average commercial loan balances by $652.6 million from the prior year quarter. This shift in the loan mix accompanied decreases in CRE and construction average loan balances of $803.6 million from the prior year period. Also, year-over-year, we reduced low-yielding average fed funds sold and other short term investments by $220.6 million and increased average securities by $92.1 million.

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Average interest-bearing liabilities decreased $1.0 billion compared to the prior year third quarter, primarily due to the decline in average interest-bearing deposits, as the deposit mix shifted from money market accounts and term deposits to noninterest-bearing deposits. Noninterest-bearing deposits were 28% of total deposits at September 30, 2011, an increase from 20% at September 30, 2010. Refer to the section entitled “Deposits” included in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Form 10-Q for additional discussion on client deposits.

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Nine months ended September 30, 2011 compared to nine months ended September 30, 2010

Table 4

Net Interest Income and Margin Analysis

(Dollars in thousands)

	Nine Months Ended September 30,																Attribution of Change in
	2011								2010								Net Interest Income (1)
	Average Balance			Interest (2)		Yield/ Rate (%)			Average Balance			Interest (2)		Yield/ Rate (%)			Volume			Yield/ Rate			Total
Assets:
Federal funds sold and other short-term investments	$	507,210		$	966		0.25	%	$	788,965		$	1,584		0.26	%	$	(541	)	$	(77	)	$	(618	)
Securities:
Taxable		1,832,916			46,154		3.36	%		1,633,502			48,863		3.99	%		5,554			(8,263	)		(2,709	)
Tax-exempt (3)		140,471			6,353		6.03	%		165,972			7,831		6.29	%		(1,164	)		(314	)		(1,478	)
Total securities		1,973,387			52,507		3.55	%		1,799,474			56,694		4.20	%		4,390			(8,577	)		(4,187	)
Loans, excluding covered assets:
Commercial		5,066,733			177,349		4.62	%		4,355,099			152,091		4.61	%		24,908			350			25,258
Commercial real estate		2,689,833			84,868		4.16	%		3,118,299			101,943		4.31	%		(13,618	)		(3,457	)		(17,075	)
Construction		429,968			12,017		3.69	%		645,183			16,785		3.43	%		(5,939	)		1,171			(4,768	)
Residential		319,377			10,619		4.43	%		343,879			12,307		4.77	%		(846	)		(842	)		(1,688	)
Personal and home equity		445,691			11,967		3.59	%		512,489			14,681		3.83	%		(1,833	)		(881	)		(2,714	)
Total loans, excluding covered assets(4)		8,951,602			296,820		4.38	%		8,974,949			297,807		4.38	%		2,672			(3,659	)		(987	)
Total interest-earning assets before covered assets (3)		11,432,199			350,293		4.05	%		11,563,388			356,085		4.07	%		6,521			(12,313	)		(5,792	)
Covered assets (5)		330,443			13,392		5.36	%		435,032			31,702		9.63	%		(6,433	)		(11,877	)		(18,310	)
Total interest-earning assets (3)		11,762,642			363,685		4.09	%		11,998,420			387,787		4.27	%		88			(24,190	)		(24,102	)
Cash and due from banks		160,169								155,119
Allowance for loan and covered assets losses		(242,659	)							(245,752	)
Other assets		681,592								670,419
Total assets	$	12,361,744							$	12,578,206
Liabilities and Equity:
Interest-bearing demand deposits	$	583,470		$	1,854		0.42	%	$	700,515		$	2,446		0.47	%	$	(385	)	$	(207	)	$	(592	)
Savings deposits		204,208			618		0.40	%		165,403			742		0.60	%		150			(274	)		(124	)
Money market accounts		4,467,903			17,482		0.52	%		4,648,720			26,252		0.76	%		(986	)		(7,784	)		(8,770	)
Time deposits		1,349,224			12,893		1.28	%		1,523,912			17,433		1.53	%		(1,863	)		(2,677	)		(4,540	)
Brokered deposits		1,317,105			6,222		0.63	%		1,400,581			11,658		1.11	%		(660	)		(4,778	)		(5,438	)
Total interest-bearing deposits		7,921,910			39,069		0.66	%		8,439,131			58,531		0.93	%		(3,744	)		(15,720	)		(19,464	)
Short-term borrowings		81,561			1,859		3.01	%		199,217			4,126		2.73	%		(2,646	)		379			(2,267	)
Long-term debt		409,189			16,425		5.31	%		491,273			21,820		5.87	%		(3,423	)		(1,972	)		(5,395	)
Total interest-bearing liabilities		8,412,660			57,353		0.91	%		9,129,621			84,477		1.23	%		(9,813	)		(17,313	)		(27,126	)
Noninterest-bearing demand deposits		2,524,607								2,036,380
Other liabilities		162,697								169,121
Equity		1,261,780								1,243,084
Total liabilities and equity	$	12,361,744							$	12,578,206
Net interest spread							3.18	%							3.04	%
Effect of noninterest-bearing funds							0.26	%							0.30	%
Net interest income/margin (3)				$	306,332		3.44	%				$	303,310		3.34	%	$	9,901		$	(6,877	)	$	3,024

⁽¹⁾  For purposes of this table, changes which are not due solely to volume changes or rate changes are allocated to such categories in proportion to the absolute amounts of the change in each.

⁽²⁾  Interest income includes $17.9 million and $16.3 million in loan fees for the nine months ended September 30, 2011 and 2010, respectively.

⁽³⁾  Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. See Table 2 for a reconciliation of the effect of the tax-equivalent adjustment.

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⁽⁴⁾  Average loans on a nonaccrual basis for the recognition of interest income totaled $356.9 million and $401.6 million for the nine months ended September 30, 2011 and 2010, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonaccrual loans is estimated to be approximately $11.3 million and $13.0 million for the nine months ended September 30, 2011 and 2010, respectively, and is based on the average loan portfolio yield for the respective period.

⁽⁵⁾  Covered interest-earning assets consist of loans acquired through an FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset. Refer to the section entitled “Covered Assets” for a detailed discussion.

Note Prior period net interest margin computations were modified to conform with the current period presentation.

As shown in Table 4, for the nine months ended September 30, 2011, net interest margin was 3.44%, an increase of ten basis points from 3.34% for the prior year period. The improvement results from the overall decrease in the average rate paid on interest-bearing deposits, as well as an increase in noninterest-bearing deposits and the shift in the mix of the loan portfolio toward higher-yielding commercial loans which had an increase in average interest rate. Along with the shift in the mix of the loan portfolio, the reduced level of nonperforming loans year-over-year has mitigated any pricing compression seen within the commercial loan portfolio. The lower interest rate environment negatively impacted the yield on the investment portfolio, however, resulting in a year-over-year reduction in interest income of $8.6 million despite the $173.9 million increase in the average balance of total securities.

We do not anticipate significant continued benefit to net interest margin in coming quarters from downward repricing of deposits. Heightened competition, in the face of limited middle market loan demand, could also pressure loan pricing and loan growth in the near term, although year to date we have been successful in maintaining overall yield on our commercial loan portfolio. This reflects higher lending yields in specialized areas that we have pursued. The continued reshaping of our loan mix and further reduction in nonperforming loans may help to mitigate the impact of loan pricing compression on net interest margin in future periods.

In July 2011, we initiated the use of interest rate derivatives as part of our asset liability management strategy to hedge interest rate risk in our primarily floating-rate loan portfolio and, depending on market conditions including the slope of the yield curve, we intend to enter into additional interest rate swaps through the remainder of the year. A description and analysis of our market risk and interest rate sensitivity profile and management policies is included in Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” of this Form 10-Q.

Provision for loan losses

The provision for loan losses, excluding the provision for covered loans, totaled $32.3 million for the quarter ended September 30, 2011 compared to $40.0 million for the same period in 2010. The provision for loan losses is a function of our allowance for loan loss methodology used to determine the appropriate level of the allowance for inherent loan losses after net charge-offs have been deducted. The provision for loan losses totaled $100.8 million for the nine months ended September 30, 2011 compared to $157.5 million for the same period in 2010. Net charge-offs were $38.6 million in the third quarter 2011 compared to $49.1 million for the same period in 2010. Net charge-offs were $123.6 million for the nine months ended September 30, 2011 compared to $155.8 million for the same period in 2010. For further analysis and information on how we determine the appropriate level for the allowance for loan losses and analysis of credit quality, see “Critical Accounting Policies” and “Credit Quality Management and Allowance for Loan Losses.”

Provision for covered loan losses

For the quarter ended September 30, 2011, we recognized $274,000 in provision for covered loan losses related to the loans purchased under the FDIC-assisted transaction loss share agreement, compared to an addition to our provision of $1.4 million in the prior year period. For the nine months ended September 30, 2011, we recognized $514,000 in provision for covered loan losses related to the loans purchased under the FDIC-assisted transaction loss share agreement, compared to $1.9 million in the prior year period. The provision for covered loan losses represents the 20% portion of expected losses on covered loans not reimbursed by the FDIC.

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Non-interest Income

Non-interest income is derived from a number of sources related to our banking activities, including loan-related fees, the sale of derivative products to clients through our capital markets division, treasury management services, and fees from our trust and investments business. The following table presents a break-out of these multiple sources of revenue.

Table 5

Non-interest Income Analysis

(Dollars in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011		2010		% Change		2011		2010		% Change
Trust and Investments	$	4,452	$	4,306		3.4	$	13,834	$	13,566		2.0
Mortgage banking		1,565		2,790		-43.9		3,671		6,708		-45.3
Capital markets products		5,510		3,104		77.5		13,870		7,495		85.1
Treasury management		5,016		4,406		13.8		14,640		12,295		19.1
Loan and credit-related fees		5,413		4,236		27.8		16,601		11,817		40.5
Other income, service charges and fees		1,309		1,489		-12.1		4,831		3,627		33.2
Subtotal fee revenue		23,265		20,331		14.4		67,447		55,508		21.5
Net securities gains		4,370		3,029		44.3		5,407		2,873		88.2
Total non-interest income	$	27,635	$	23,360		18.3	$	72,854	$	58,381		24.8

Third quarter 2011 compared to third quarter 2010

Total non-interest income for third quarter 2011 was $27.6 million, an increase of 18% from the $23.4 million in the third quarter 2010 with increases in capital markets products, treasury management, loan and credit-related fees, and net securities gains contributing to the year-over-year growth. These items more than offset a 44% decrease in mortgage banking income as well as a 12% decrease in other income, service charges and fees.

Trust and Investments income increased 3% from the third quarter 2010 due to progress in penetrating existing banking relationships via cross-sell that has increased assets under management and administration (“AUMA”) compared to a year ago. Growth was partially muted by decreases in value of AUMA due to market performance volatility.

Revenue from our mortgage banking business declined $1.2 million, or 44%, from the third quarter 2010. Both periods experienced increased refinancing activity as a result of low interest rate environments; however, the third quarter 2011 does not reflect a full quarter of refinance activity, unlike the prior period, as significant application volume did not begin until the drop in rates in August. We believe this positive trend will continue into the fourth quarter.

Capital markets income increased $2.4 million from the third quarter 2010 and included a $1.2 million negative credit valuation adjustment (“CVA”) compared to a negative CVA of $830,000 for the third quarter 2010. The CVA represents the credit component of fair value with regard to both client-based derivatives and the related matched derivatives with interbank dealer counterparties. Exclusive of CVA adjustments, year-over-year capital markets income increased to $6.7 million in the current period compared to $3.9 million in the third quarter 2010. Client interest rate derivative activity is sensitive to the pace of loan growth, the shape of the LIBOR curve, and our clients’ interest rate expectations. Origination and renewal activity, along with larger margin transactions, benefited the interest rate swap business during the current quarter. Capital markets revenues were also favorably impacted by a higher volume of foreign exchange activity, driven in part by volatility in the foreign exchange markets during third quarter 2011.

Our treasury management group offers a full range of receivables and payables services in addition to online banking and reporting. These products and services include remote capture, liquidity management, and lockbox services which are often linked to non-interest and interest-bearing deposits. Treasury management income increased $610,000, or 14%, from the third quarter 2010, reflecting ongoing cross-selling of these services to our new and existing commercial client base and a fee change that went into effect in the third quarter 2011.

Loan and credit-related fees include income generated from letters of credit, unused commitments, loan syndications and various other loan fees. Loan and credit related fees increased $1.2 million, or 28%, from the third quarter 2010 and is principally due to greater letter of credit, unused commitment and syndication fees.

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Net securities gains totaled $4.4 million for the third quarter 2011, compared to $3.0 million for the third quarter 2010. During the third quarter 2011, we sold $148.8 million of collateralized mortgage obligations and $66.3 million of residential mortgage-backed securities, resulting in the recognition of net securities gains of $4.5 million. In addition, we recognized $124,000 in losses on other non-marketable securities during the third quarter 2011. The sales assisted in managing prepayment risk and provided a measure of benefit to our capital position.

Nine months ended September 30, 2011 compared to nine months ended September 30, 2010

For the nine months ended September 30, 2011, non-interest income was $72.9 million, an increase of $14.5 million, or 25%, compared to the prior year period, with all major categories, excluding mortgage banking, contributing to the year-over-year growth.

Trust and Investments income increased 2% from the nine months ended September 30, 2010 as we continue to make progress in our strategic efforts to retool and enhance our wealth management business.

Revenue from our mortgage business was lower by $3.0 million, or 45%, from the nine months ended September 30, 2010, as the prior year period experienced an extended period of lower mortgage interest rates and higher refinancing activity as compared to the current year period.

Capital markets income increased $6.4 million from the first nine months of 2010 and included a $963,000 negative CVA compared to a negative CVA of $3.4 million for the nine months ended September 30, 2010. Exclusive of CVA adjustments, year-over-year capital markets income increased to $14.8 million in the current nine-month period compared to $10.9 million in the prior year comparative period. The current period increase is primarily attributable to increased client interest rate swap fees resulting from loan origination and renewal and larger margin transactions in the current year period.

Treasury management income from the first nine months of 2011 increased $2.3 million, or 19%, from the first nine months of 2010. This increase reflects ongoing success in cross-selling treasury management services to new and existing commercial clients.

Loan and credit related fees for the nine months ended September 30, 2011 increased $4.8 million, or 41%, from the prior year comparative period and is principally due to a higher volume of syndication deals, which we lead. Letter of credit and unused commitment fees were also higher in the current year period.

Other income, service charges, and fees for the first nine months of 2011 increased $1.2 million, or 33%, from the nine months ended September 30, 2010. The increase was primarily due to $564,000 in losses in the prior year period on loans held for sale, a $453,000 increase in Small Business Administration loan servicing fees in the current nine-month period, and a $300,000 gain on the first quarter 2011 sale of our land trust accounts.

Net securities gains totaled $5.4 million for the nine months ended September 30, 2011, compared to $2.9 million for the prior year period. During the first nine months of 2011, we sold $188.8 million of collateralized mortgage obligations, $66.3 million of residential mortgage-backed securities, and $19.5 million of state and municipal securities.

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Non-interest Expense

Table 6

Non-interest Expense Analysis

(Dollar amounts in thousands)

	Quarters Ended September 30,								Nine Months Ended September 30,
	2011			2010			% Change		2011			2010			% Change
Compensation expense:
Salaries and wages	$	23,901		$	22,667			5.4	$	70,874		$	67,791			4.5
Share-based costs		3,262			4,112			-20.7		11,026			12,467			-11.6
Incentive compensation, retirement costs and other employee benefits		11,678			7,633			53.0		34,134			31,028			10.0
Total compensation expense		38,841			34,412			12.9		116,034			111,286			4.3
Net occupancy expense		7,515			7,508			0.1		22,592			22,550			0.2
Technology and related costs		2,856			2,310			23.6		8,246			7,777			6.0
Marketing		2,218			2,039			8.8		6,661			6,504			2.4
Professional services		2,434			2,708			-10.1		7,080			9,911			-28.6
Outsourced servicing costs		1,918			2,038			-5.9		5,924			5,857			1.1
Net foreclosed property expense		7,129			3,075			131.8		20,920			8,164			156.2
Postage, telephone, and delivery		944			779			21.2		2,763			2,610			5.9
Insurance		5,393			7,113			-24.2		17,825			18,186			-2.0
Loan and collection		2,931			3,405			-13.9		9,731			10,594			-8.1
Other expenses		2,855			2,690			6.1		8,271			14,011			-41.0
Total non-interest expense		75,034			68,077			10.2	$	226,047		$	217,450			4.0
Operating efficiency ratios:
Non-interest expense to average assets		2.46	%		2.16	%				2.45	%		2.31	%
Net overhead ratio (1)		1.56	%		1.42	%				1.66	%		1.69	%
Efficiency ratio (2)		58.0	%		55.3	%				59.6	%		60.1	%

⁽¹⁾  Computed as the total of non-interest expense less non-interest income, annualized, divided by average total assets.

⁽²⁾  Computed as non-interest expense divided by the sum of net interest income on a tax equivalent basis and non-interest income. The efficiency ratio is presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. See Table 31, “Non-U.S. GAAP Measures” for a reconciliation of the effect of the tax-equivalent adjustment.

Third quarter 2011 compared to third quarter 2010

Non-interest expense increased for the third quarter 2011 by $7.0 million from the third quarter of 2010, primarily due to increases in compensation expense and net foreclosed property expense from the prior year period. The efficiency ratio was 58.0% compared to 55.3% for the prior year period.

Compensation expense increased overall by $4.4 million, or 12.9%, from the third quarter 2010. Salary and wages were up 5.4% largely due to annual compensation adjustments and lower deferred salary costs related to loan origination expenses on a comparative basis. Share-based payment costs were down $850,000 primarily due to a higher level of forfeitures on departed plan participants during the current period. Incentive compensation, retirement costs and other employee benefits were up by $4.0 million compared to third quarter 2010, reflecting higher incentive compensation expense as the prior interim period included the impact of a $2.7 million prior period reversal.

Technology and related costs were up $546,000 from the third quarter 2010, which is largely due to an upgrade in an items processing platform.

Professional services, which include fees paid for legal, accounting, and consulting services, decreased $274,000 from the third quarter 2010. The decrease is primarily due to lower audit fees and consultancy costs in the current period.

Third quarter 2011 net foreclosed property expenses, which include write-downs on foreclosed properties, gains and losses on sales of foreclosed properties, taxes, and other expenses associated with the maintenance of OREO, increased $4.1 million from the third quarter 2010. The increase in net foreclosed property expense is primarily due to higher net losses on sale of OREO which totaled $4.9 million for the third quarter of 2011 compared to $1.1 million in the prior year period. OREO writedown expense declined slightly at $1.2 million in the current quarter, compared to $1.4 million in the third quarter 2010. Over the

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next several quarters, we expect net foreclosed property expense to remain at elevated levels as we work out nonperforming loans and likely experience continued inflows of OREO. In evaluating opportunities to sell OREO, we seek to maximize our ultimate net recovery. The timing of dispositions will depend on a number of factors, including the pace and timing of the overall recovery of the economy, activity and pricing levels in the real estate market and real estate inventory coming into the market for sale.

Third quarter 2011 insurance costs decreased $1.7 million from third quarter 2010, primarily due to the expiration of the Transaction Account Guarantee (“TAG”) Program at the end of 2010 and the change in FDIC insurance assessment methodology. In February 2011, the FDIC adopted final rules amending the deposit insurance assessment regulations, modifying, among other provisions, the assessment base from one based on domestic deposits to one based on total assets less average tangible equity. The final rules took effect April 1, 2011, impacting assessments beginning in the second quarter 2011.

Loan and collection expense, which consists of certain non-reimbursable costs associated with performing loan activities and loan remediation costs of problem and nonperforming loans, decreased 14% for the third quarter 2011 compared to third quarter 2010. The current period reduction is due in part to lower mortgage refinance volumes in the current period. Although loan remediation costs were flat on a comparative basis, they are likely to remain elevated as we continue to address problem credits.

Nine months ended September 30, 2011 compared to nine months ended September 30, 2010

Non-interest expense was $226.0 million for the nine months ended September 30, 2011, an increase of $8.6 million, or 4%, from $217.5 million in the prior year period. The increase was primarily due to higher net foreclosed property expense and compensation expense, which were partially offset by decreases in other expenses and professional services costs.

Compensation expense increased overall by $4.7 million, or 4%, from the prior year period. Salary and wages were up 5% largely due to annual compensation adjustments and lower deferred salary costs related to origination expenses on a comparative basis. Share-based payment costs were down $1.4 million primarily due to a higher level of forfeiture-related expense reversals on departed plan participants during the period. Incentive compensation, retirement costs and other employee benefits were up by $3.1 million compared to third quarter 2010, reflecting higher incentive compensation expense.

Professional fees decreased $2.8 million, or 29%, from the nine months ended September 30, 2010. The decrease is primarily due to higher prior year period costs relating to risk management consultants, system conversion fees related to the FDIC-assisted acquisition of the former Founders Bank, and audit fees.

Net foreclosed property expenses increased $12.8 million, to $20.9 million, an increase of 156% compared to the prior year period. The increase in net foreclosed property expenses is primarily due to higher net losses on the sale of OREO resulting from the accelerated pace of sales, as well as higher valuation write-downs during the current year period as compared to the prior year period. We incurred $6.8 million in net losses on sale of OREO for the first nine months of 2011 compared to $1.0 million in net losses in the prior year period. Also, OREO writedowns totaled $11.4 million for the first nine months of 2011 compared to $4.6 million for the prior year period.

Loan and collection expense decreased $863,000, or 8%, compared to the prior year period largely due to lower refinance volumes. Overall levels remain elevated given the magnitude of problem asset remediation expense.

Other expenses decreased $5.7 million, or 41%, from the nine months ended September 30, 2010 in part due to a $1.1 million reduction of the reserve for unfunded commitments in the current year period, compared to a provision for unfunded commitments of $3.8 million recorded for the prior year period.

Income Taxes

Our provision for income taxes includes both federal and state income tax expense. For the quarter ended September 30, 2011, we recorded an income tax provision of $7.6 million on pre-tax income of $21.1 million (equal to a 36.0% effective tax rate) compared to an income tax provision of $4.8 million on pre-tax income of $12.8 million for the quarter ended September 30, 2010 (equal to a 37.4% effective tax rate).

For the nine months ended September 30, 2011, income tax expense totaled $16.2 million (equal to a 32.6% effective tax rate), compared to an income tax benefit of $7.7 million (equal to an effective tax benefit rate of 42.9%) for the nine months ended September 30, 2010.

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Generally, our effective income tax rate varies from the statutory federal income tax rate of 35% (federal income tax benefit rate for the nine months ended September 30, 2010) principally due to state income taxes, the effects of tax-exempt earnings from municipal securities and bank-owned life insurance, non-deductible compensation and business expenses, and tax credits.

For the nine months ended September 30, 2011, the effective tax rate was also impacted by a $2.8 million tax benefit associated with the repricing of our deferred tax asset due to a change in the Illinois corporate income tax rate that became effective during the first quarter. We expect the impact of this Illinois tax rate increase for 2011 will be to increase our normal effective tax rate by approximately one percentage point from pre-change levels.

In determining that realization of the deferred tax assets is more likely than not and no valuation allowance is needed at September 30, 2011, we considered negative evidence, including our cumulative pre-tax loss for financial statement purposes for the trailing three-year period, and the continuing challenging economic conditions.

We also considered a number of positive factors, including (a) taxable income generated in 2010 and year-to-date 2011, (b) reversing taxable temporary differences in future periods, (c) the decline in the cumulative book loss during the past several quarters and our expectations for the balance of 2011, (d) our pre-tax, pre-loan loss provision earnings results during 2009, 2010 and year-to-date 2011, a core source for future taxable income, (e) our reporting of pre-tax profits in each of the past six quarters, (f) the concentration of credit losses in certain segments and vintages of our loan portfolio during the past three years and the relative stability of credit trends in recent quarters, (g) our excess capital position relative to “well capitalized” regulatory standards and other industry benchmarks, and (h) no history of federal net operating loss carryforwards and the availability of the 20-year federal net operating loss carryforward period.

At September 30, 2011, we had approximately $15 million of deferred tax assets that relate to equity compensation awards that may not be fully realized, primarily due to a decline in our stock price since certain of the awards were granted. In such circumstances a valuation allowance is not recorded but when such awards vest, are exercised or expire, tax charges are incurred if there is a stock price “shortfall.” Such shortfall amounts are charged to stockholders’ equity if there is a sufficient level of “excess” tax benefits accumulated from prior years. We expect that the balance of cumulative prior year “excess” tax benefits will likely be reduced to $0 in the future due to additional “shortfall” charges, in which case any future charges may need to be recorded to income tax expense, resulting in an increase in the effective tax rate. The amount of such “shortfall” charges in future periods, the amount that may be charged to income tax expense and the timing of such charges cannot be reasonably estimated because it is largely dependent on changes in our stock price and other factors.

Operating Segments Results

We have three primary business segments: Banking, Trust and Investments, and Holding Company Activities.

Banking

The profitability of our Banking segment is dependent on net interest income, provision for loan losses, non-interest income and non-interest expense. The net income for the Banking segment for the quarter ended September 30, 2011 was $19.4 million, an increase of $3.8 million from net income of $15.6 million for the prior year period. The increase in net income resulted primarily from a $8.8 million decrease in the provision for loan losses. Non-interest income improved by $4.1 million, with increases in capital markets product income, loan and credit-related fees, treasury management, and net securities gains contributing to the year-over-year growth. For the nine months ended September 30, 2011, net income from our Banking segment increased $38.3 million to $52.4 million primarily due to a $58.1 million lower provision for loan losses offset by $13.9 million higher non-interest expense.

Total loans for the Banking segment decreased to $8.7 billion at September 30, 2011 compared to $9.1 billion at December 31, 2010. Total deposits decreased from December 31, 2010 levels of $10.7 billion to $10.3 billion at September 30, 2011.

Trust and Investments

The Trust and Investments segment includes investment management, investment advisory, personal trust and estate administration, custodial and escrow, retirement account administration, and brokerage services. Lodestar Investment Counsel, LLC (“Lodestar”), an investment management firm and wholly-owned subsidiary of the Bank, is included in our Trust and Investments segment. During the third quarter 2011, we purchased the remaining minority ownership interests of Lodestar held by certain members of Lodestar management, who remain with the Company in management roles.

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Net income attributable to controlling interests from Trust and Investments increased to $215,000 for the quarter ended September 30, 2011 from a net loss of $5,000 in the prior year period due to a decrease in non-interest expense and an increase in non-interest income. Net income attributable to controlling interests from Trusts and Investments increased to $735,000 for the nine months ended September 30, 2011 from a net loss of $7,000 in the prior year period. The Trust and Investments non-interest expense was $14.5 million for the nine months ended September 30, 2011, a 4% decrease year-over-year from $15.2 million for the nine months ended September 30, 2010. AUMA was $4.2 billion as of September 30, 2011 compared to $4.0 billion as of September 30, 2010.

Holding Company Activities

The Holding Company Activities segment consists of parent company-only activity and intersegment eliminations. The Holding Company’s most significant asset is its investment in its bank subsidiary. Undistributed earnings relating to this investment is not included in the Holding Company financial results. Holding Company financial results are represented primarily by interest expense on borrowings and operating expenses. Recurring operating expenses consist primarily of share-based compensation and professional fees. The Holding Company Activities segment reported a net loss of $6.2 million for the quarter ended September 30, 2011, compared to a net loss of $7.3 million for the prior year period. The year-over-year reduction in loss is due to lower interest expense on certain junior subordinated debt securities which have repriced downward from a year ago, as well as reduced professional fees.

FINANCIAL CONDITION

Investment Portfolio Management

We manage our investment portfolio to maximize the return on invested funds within acceptable risk guidelines, to meet pledging and liquidity requirements, and to adjust balance sheet interest rate sensitivity to attempt to serve as some protection of net interest income levels against the impact of changes in interest rates.

We may adjust the size and composition of our securities portfolio according to a number of factors, including expected liquidity needs, the current and forecasted interest rate environment, our actual and anticipated balance sheet growth rate, the relative value of various segments of the securities markets, and the broader economic and regulatory environment.

Investments are comprised of debt securities and non-marketable equity investments. Our debt securities portfolio is primarily comprised of residential mortgage-backed pools, collateralized mortgage obligations, U.S. Treasury and Agency securities, and state and municipal bonds.

Debt securities that are classified as available-for-sale are carried at fair value and may be sold as part of our asset/liability management strategy in response to changes in interest rates, liquidity needs or significant prepayment risk. Unrealized gains and losses on available-for-sale securities represent the difference between the aggregated cost and fair value of the portfolio and are reported, on an after-tax basis, as a separate component of equity in accumulated other comprehensive income. This balance sheet component will fluctuate as current market interest rates and conditions change, which changes affect the aggregate fair value of the portfolio. In periods of significant market volatility we may experience significant changes in accumulated other comprehensive income. Accumulated other comprehensive income is not included in the calculation of regulatory capital.

Debt securities that are classified as held-to-maturity are securities we have the ability and intent to hold until maturity and are accounted for using historical cost, adjusted for amortization of premiums and accretion of discounts.

Non-marketable equity investments include FHLB stock and various other equity securities. At September 30, 2011, our investment in FHLB stock was $40.9 million, compared to $20.7 million at December 31, 2010. To increase our sources of liquidity, during the third quarter 2011, we became a member of the FHLB Chicago and purchased $23.7 million of FHLB Chicago stock. FHLB stock holdings are necessary to maintain FHLB advances and availability. Also included in non-marketable equity investments are certain interests we have in investment funds that make qualifying investments for purposes of our compliance with the Community Reinvestment Act. Such investments had a carrying amount of $2.7 million at September 30, 2011.

We do not own any Freddie Mac or Fannie Mae preferred stock or subordinated debt obligations, bank trust preferred securities, or any sub-prime mortgage-backed securities.

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Table 7

Investment Securities Portfolio Valuation Summary

(Dollars in thousands)

	As of September 30, 2011						As of December 31, 2010
	Fair Value		Amortized Cost		% of Total		Fair Value		Amortized Cost		% of Total
Available-for-Sale
U.S. Treasury securities	$	36,406	$	35,844		1.7	$	—	$	—		—
U.S. Agency securities		10,128		10,049		0.5		10,426		10,155		0.6
Collateralized mortgage obligations		383,685		369,081		17.5		451,721		450,251		23.7
Residential mortgage-backed securities		1,292,168		1,242,968		59.0		1,247,031		1,222,642		65.5
State and municipal securities		149,700		139,963		6.8		172,108		166,209		9.0
Foreign sovereign debt		500		500		*		500		500		*
Total available-for-sale		1,872,587		1,798,405		85.5		1,881,786		1,849,757		98.8
Held-to-Maturity
Residential mortgage-backed securities		272,864		273,200		12.5		—		—		—
Non-marketable Equity Investments
FHLB stock		40,909		40,909		1.9		20,694		20,694		1.1
Other		2,985		2,985		0.1		2,843		2,843		0.1
Total non-marketable equity investments		43,894		43,894		2.0		23,537		23,537		1.2
Total securities	$	2,189,345	$	2,115,499		100.0	$	1,905,323	$	1,873,294		100.0

* Less than 0.1%

As of September 30, 2011, our securities portfolio totaled $2.2 billion, an increase from $1.9 billion at December 31, 2010. Since year end 2010, purchases in securities totaled $813.5 million with $515.9 million in the available for sale portfolio, $273.4 million in the held-to-maturity portfolio and the remaining $24.2 million in nonmarketable equity securities, primarily FHLB stock. The current year purchases in the available for sale portfolio primarily represented the reinvestment of proceeds from sales, maturities and paydowns in largely similar residential mortgage-backed securities and collateralized mortgage obligations with shorter durations.

During third quarter 2011, to mitigate the asymmetric risk/reward of adding bonds to the available-for-sale portfolio in a low interest rate environment, we established a held-to-maturity portfolio with the purchase of $273.4 million in residential mortgage-backed securities. We anticipate continuing to add opportunistically to the held-to-maturity portfolio.

Also, during the third quarter 2011, we sold $148.8 million of collateralized mortgage obligations and $66.3 million of residential mortgage-backed securities, resulting in a net securities gain of $4.5 million. The sales assisted in managing prepayment risk and provided a measure of benefit to our capital position. In addition, we recognized $124,000 in losses on other non-marketable securities during the third quarter 2011.

Investments in collateralized mortgage obligations and residential mortgage-backed securities comprise 89% of the securities portfolio at September 30, 2011. All of the mortgage securities are backed by U.S. Government agencies or issued by U.S. Government-sponsored enterprises. All mortgage securities are composed of fixed-rate, fully-amortizing collateral with final maturities of 30 years or less.

Investments in debt instruments of state and local municipalities comprised 7% of the total available-for-sale securities portfolio at September 30, 2011. This type of security has historically experienced very low default rates and provided a predictable cash flow since it generally is not subject to significant prepayment. Insurance companies regularly provide credit enhancement to improve the credit rating and liquidity of a municipal bond issuance. Management considers the credit enhancement and underlying municipality credit rating when evaluating a purchase or sale decision.

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At September 30, 2011, our reported equity reflected unrealized net securities gains on available-for-sale securities, net of tax, of $45.4 million, an increase of $25.4 million from December 31, 2010.

The following table presents the maturities of the different types of investments that we owned at September 30, 2011, and the corresponding interest rates.

Table 8

Repricing Distribution and Portfolio Yields

(Dollars in thousands)

	As of September 30, 2011
	One Year or Less					One Year to Five Years					Five Years to Ten Years					After 10 years
	Amortized Cost		Yield to Maturity			Amortized Cost		Yield to Maturity			Amortized Cost		Yield to Maturity			Amortized Cost		Yield to Maturity
Available-for-Sale
U.S. Treasury securities	$	—		—	%	$	35,844		1.07	%	$	—		—	%	$	—		—	%
U.S. Agency securities		—		—	%		10,049		2.51	%		—		—	%		—		—	%
Collateralized mortgage obligations (1)		85,010		3.15	%		218,942		3.28	%		60,769		3.17	%		4,360		3.31	%
Residential mortgage-backed securities (1)		344,953		3.23	%		669,211		3.25	%		197,991		3.25	%		30,813		3.19	%
State and municipal securities (2)		15,654		6.85	%		53,988		6.11	%		67,327		5.16	%		2,994		6.97	%
Foreign sovereign debt		500		1.30	%		—		—	%		—		—	%		—		—	%
Total available-for-sale		446,117		3.34	%		988,034		3.32	%		326,087		3.63	%		38,167		3.50	%
Held-to-Maturity
Residential mortgage-backed securities (1)		64,474		1.94	%		145,450		1.95	%		52,146		1.97	%		11,130		1.99	%
Non-marketable Equity investments
FHLB stock (3)		40,909		0.87	%		—		—	%		—		—	%		—		—	%
Other		2,985		n/a			—		—	%		—		—	%		—		—	%
Total non-marketable equity investments		43,894		0.81	%		—		—	%		—		—	%		—		—	%
Total securities	$	554,485		2.98	%	$	1,133,484		3.15	%	$	378,233		3.40	%	$	49,297		3.16	%

⁽¹⁾  The repricing distributions and yields to maturity of collateralized mortgage obligations and mortgage-backed securities are based on estimated future cash flows and prepayments. Actual repricings and yields of the securities may differ from those reflected in the table depending upon actual interest rates and prepayment speeds.

⁽²⁾  Yields on state and municipal securities are reflected on a tax-equivalent basis, assuming a federal income tax rate of 35%. The maturity date of state and municipal bonds is based on contractual maturity, unless the bond, based on current market prices, is deemed to have a high probability that a call right will be exercised, in which case the call date is used as the maturity date.

⁽³⁾  The yield on FHLB stock is based on dividend announcements.

LOAN PORTFOLIO AND CREDIT QUALITY (excluding covered assets)

Portfolio Composition

The following discussion of our loan portfolio and credit quality excludes covered assets. Covered assets represent assets acquired through an FDIC-assisted transaction that are subject to a loss share agreement and are presented separately on the Consolidated Statements of Condition. For additional discussion of covered assets, refer to Note 6 of “Notes to the Consolidated Financial Statements” and the “Covered Asset” section presented later in Management’s Discussion and Analysis.

Total loans, excluding covered assets, were $8.7 billion as of September 30, 2011, compared to $9.1 billion at December 31, 2010. We continue to strategically reshape our mix of loan products, focusing on commercial loan originations to build our portfolio (funding approximately $970 million in new client relationships since year end 2010) while simultaneously reducing the concentration of commercial real estate and construction loans. As a result of these ongoing efforts, commercial loans increased by $243.2 million during the nine-month period and increased as a proportion of total loans to 59% at September 30, 2011, compared to 54% at December 31, 2010. Commercial real estate and construction loans decreased by $597.1 million, or 18%, and represented 32% of total loans at September 30, 2011 compared to 37% at December 31, 2010. We may continue to actively seek to exit accounts that no longer align strategically or do not meet return or other performance hurdles.

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Within our commercial lending business, we have a specialized niche in the nursing and residential care segment of the healthcare industry. At September 30, 2011, approximately 20% of the commercial loan portfolio has been extended primarily to operators in this segment to finance the working capital needs and cost of facilities providing such services. These loans tend to be larger extensions of credit. To date, this portfolio segment has experienced minimal defaults and losses.

The following table provides an analysis of the composition of our loan portfolio at the dates shown.

Table 9

Loan Portfolio

(Dollars in thousands)

	September 30, 2011		% of Total		December 31, 2010		% of Total		% Change
Commercial and industrial	$	4,071,840		46.9	$	4,015,257		44.1		1.4
Owner-occupied commercial real estate		1,084,212		12.5		897,620		9.8		20.8
Total commercial		5,156,052		59.4		4,912,877		53.9		4.9
Commercial real estate		2,054,925		23.7		2,400,923		26.3		-14.4
Commercial real estate – multi-family		421,045		4.9		457,246		5.0		-7.9
Total commercial real estate		2,475,970		28.6		2,858,169		31.3		-13.4
Construction		315,858		3.6		530,733		5.8		-40.5
Total commercial real estate and construction		2,791,828		32.2		3,388,902		37.1		-17.6
Residential real estate		307,705		3.5		319,146		3.5		-3.6
Home equity		186,914		2.2		197,179		2.2		-5.2
Personal		232,456		2.7		296,253		3.3		-21.5
Total loans	$	8,674,955		100.0	$	9,114,357		100.0		-4.8

Commercial real estate decreased $382.2 million from year-end due to a combination of problem loan dispositions, fewer new originations, and transitional financing being repaid or refinanced as expected in the secondary market for long-term permanent financing or by other external sources. The collateral underlying our commercial real estate portfolio is principally located in and around our core markets and is significantly concentrated in the Chicago metropolitan area. Declines in the construction portfolio are partially due to projects reaching completion at which point they are reclassified into the commercial real estate category, as well as problem loan dispositions, payoffs or paydowns, and movements to OREO.

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The following table summarizes our commercial real estate and construction loan portfolios by collateral type at September 30, 2011 and December 31, 2010. The single largest category at September 30, 2011 was office real estate, which represented 20% of the combined portfolios. Our total exposure to land loans in the commercial real estate and construction loan portfolios declined to $291.2 million at September 30, 2011 from $357.5 million at December 31, 2010. Our longer-term goal is to reduce land loans as a percentage of the loan portfolio, although further meaningful reduction of our land loan exposure may be challenging in the near term due to the current illiquidity of this asset class. As a percentage of the total commercial real estate and construction portfolios, land loans declined from 11% at December 31, 2010 to 10% at September 30, 2011.

Table 10

Commercial Real Estate and Construction Loan Portfolios

by Collateral Type

(Dollars in thousands)

	September 30, 2011						December 31, 2010
	Amount		% of Total		% Non- performing (1)		Amount		% of Total		% Non- performing (1)
Commercial Real Estate
Land	$	239,778		10		9	$	311,464		11		17
Residential 1-4 family		116,007		5		23		139,689		5		20
Multi-family		421,045		17		1		457,246		16		7
Industrial/warehouse		340,968		14		6		391,694		14		2
Office		515,442		21		2		531,193		18		4
Retail		395,001		16		11		450,135		16		5
Health care		87,377		3		—		114,545		4		—
Mixed use/other		360,352		14		10		462,203		16		8
Total commercial real estate	$	2,475,970		100		6	$	2,858,169		100		7
Construction
Land	$	51,394		16		1	$	46,036		9		19
Residential 1-4 family		24,812		8		27		30,698		6		15
Multi-family		50,064		16		—		77,685		15		—
Industrial/warehouse		26,488		8		—		34,703		7		5
Office		41,253		13		1		92,369		17		2
Retail		60,035		19		26		92,268		17		10
Mixed use/other		61,812		20		11		156,974		29		5
Total construction	$	315,858		100		9	$	530,733		100		6

⁽¹⁾  Calculated as nonperforming loans in the respective collateral type divided by total loans of the corresponding collateral type presented above.

71

Maturity and Interest Rate Sensitivity of Loan Portfolio

The following table summarizes the maturity distribution of our loan portfolio as of September 30, 2011, by category, as well as the interest rate sensitivity of loans in these categories that have maturities in excess of one year.

Table 11

Maturities and Sensitivities of Loans

to Changes in Interest Rates

(Dollars in thousands)

	As of September 30, 2011
	Due in 1 year or less		Due after 1 year through 5 years		Due after 5 years		Total
Commercial	$	500,947	$	4,078,756	$	576,349	$	5,156,052
Commercial real estate		584,107		1,742,644		149,219		2,475,970
Construction		112,916		202,892		50		315,858
Residential real estate		11,044		39,984		256,677		307,705
Home equity		33,233		122,748		30,933		186,914
Personal		70,783		152,345		9,328		232,456
Total	$	1,313,030	$	6,339,369	$	1,022,556	$	8,674,955
Loans maturing after one year:
Predetermined (fixed) interest rates			$	787,949	$	78,636
Floating interest rates				5,551,420		943,920
Total			$	6,339,369	$	1,022,556

Of the $6.5 billion in loans maturing after one year with a floating interest rate, $1.8 billion are subject to interest rate floors under the loan agreement with $1.6 billion that have such floors in effect at September 30, 2011. On a number of occasions we have eliminated customers’ interest rate floors in consideration of their entering into interest rate swap transactions with us.

Delinquent Loans, Special Mention and Potential Problem Loans and Nonperforming Assets

Loans are reported delinquent if the required principal and interest payments have not been received as of the date such payment is due, generally 30 days or more past due. Delinquency can be driven by either failure of the borrower to make payments within the term of the loan or failure to make the final payment at maturity. The majority of our loans are not fully amortizing over the term. As a result, a sizeable final repayment is often required at maturity. If a borrower lacks refinancing options or the ability to pay, the loan may become delinquent at maturity. Of total commercial real estate and construction loans outstanding at September 30, 2011, $263 million are scheduled to mature in the fourth quarter of 2011, 92% of which were performing at September 30, 2011.

Loans considered special mention are performing in accordance with the contractual terms but demonstrate potential weakness that if left unresolved, may result in deterioration in the Company’s credit position and/or the repayment prospects for the credit. Borrowers rated special mention may exhibit adverse operating trends, high leverage, tight liquidity, or other credit concerns.

Potential problem loans are loans that we have identified as performing in accordance with contractual terms, but for which management has some level of concern (greater than that of special mention loans) about the ability of the borrowers to meet existing repayment terms in future periods. These loans continue to accrue interest but the ultimate collection of these loans is questionable due to the same conditions that characterize a special mention credit. These credits may also be considered inadequately protected by the current net worth and/or paying capacity of the obligor or guarantors or the collateral pledged. These loans generally have a well-defined weakness or weaknesses that may jeopardize collection of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not resolved. Although these loans are generally identified as potential problem loans and require additional attention by management, they may never become nonperforming.

72

Special mention and potential problem loans as of September 30, 2011 and December 31, 2010 are presented in Table 18.

Nonperforming assets include nonperforming loans and real estate that has been acquired primarily through foreclosure proceedings and are awaiting disposition (“OREO”). Nonperforming loans consist of nonaccrual loans, including restructured loans that remain on nonaccrual. We specifically exclude certain restructured loans that accrue interest from our definition of nonperforming loans if the borrower has demonstrated the ability to meet the new terms of the restructuring as evidenced by a minimum of at least six months of performance in compliance with the restructured terms or if the borrower’s performance prior to the restructuring or other significant events at the time of the restructuring supports returning or maintaining the loan on accrual status. All loans are placed on nonaccrual status when principal or interest payments become 90 days past due or earlier if management deems the collectability of the principal or interest to be in question rather than waiting until the loans become 90 days past due. When interest accruals are discontinued, accrued but uncollected interest is reversed reducing interest income. Subsequent receipts on nonaccrual loans are recorded in the financial statements as a reduction of principal, and interest income is only recorded on a cash basis after principal recovery is reasonably assured. Classification of a loan as nonaccrual does not necessarily preclude the ultimate collection of loan principal and/or interest.

Foreclosed assets represent property acquired as the result of borrower defaults on loans secured by a mortgage on real property. Foreclosed assets are recorded at the lesser of current carrying value or estimated fair value, less estimated selling costs at the time of foreclosure. Write-downs occurring at foreclosure are charged against the allowance for loan losses. On a periodic basis, the carrying values of these properties are adjusted based upon new appraisals and/or market indications. Write-downs are recorded for subsequent declines in net realizable value and are included in non-interest expense along with other expenses related to maintaining the properties. Nonperforming assets, including nonperforming loans, are presented in Tables 13, 14, and 16. Additional information on our OREO is presented in Tables 19 through 21.

As part of our ongoing risk management practices and in certain circumstances, we may extend or modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties. The modification may consist of concessionary reduction in interest rate, extension of the maturity date, reduction in the principal balance, or other action intended to minimize potential losses that would otherwise not be considered in order to improve our ultimate recovery on the loan. Such concessions as part of a modification are accounted for as troubled debt restructurings. Restructured loans can involve loans remaining on nonaccrual, moving to nonaccrual, or continuing on accrual status, depending on the individual facts and circumstances of the borrower. We may utilize a multiple note structure as a workout alternative for certain loans. The multiple note structure typically bifurcates a troubled loan into two separate notes, where the first note is reasonably assured of repayment and performance according to the prudently modified terms and the portion of the troubled loan that is not reasonably assured of repayment is charged-off. Troubled debt restructurings accrue interest as long as the borrower complies with the revised terms and conditions and has historically demonstrated repayment performance at a level commensurate with the modified terms; otherwise, the restructured loan will be classified as nonaccrual. The majority of troubled debt restructurings that are accruing interest modified during the nine months ended September 30, 2011 were modified to extend the maturity date. Restructured loans accruing interest were $106.3 million at September 30, 2011, compared to $87.6 million at December 31, 2010. Of the restructured loans accruing interest added during the third quarter of 2011, 94% were from commercial loan relationships. The composition of our restructured loans accruing interest by loan category and our recorded investment is presented in Tables 13 and 17.

Total nonperforming assets decreased by 7% to $421.1 million, from $454.4 million at June 30, 2011 and decreased by $33.5 million from $454.6 million at December 31, 2010, reflecting ongoing progress in resolution activity. Nonperforming loans declined 8% and OREO declined 6% from levels at June 30, 2011. During the nine-month period, total nonperforming loans decreased by $61.1 million, while total OREO increased $27.6 million. Nonperforming assets were 3.50% of total assets at September 30, 2011, compared to 3.65% at December 31, 2010.

Disposition activity and ongoing workout efforts drove a reduction in special mention and potential problem loans. Loans in these early stage problem loan categories were down 20% from the end of the second quarter 2011 and 45% from December 31, 2010. The third quarter 2011 disposition activity included the sale of $83.8 million in problem loans and $30.8 million in OREO at an 18% net incremental charge. Included in these amounts were $20.4 million related to nonperforming loans. On a year to date basis, we disposed of approximately $300 million in problem assets with a net incremental charge of 14%.

The amount of nonperforming loan inflows, which is primarily composed of potential problem loans moving through the workout process (i.e., moving from potential problem to nonperforming status), were $68.3 million for the third quarter 2011 compared to inflows averaging over $100.0 million for the last four quarters. Inflows to nonperforming loans were more than offset by problem loan resolutions and charge-offs during the first nine months of the year. Nonperforming loans were $304.7 million at September 30, 2011, down 17% from $365.9 million at December 31, 2010. As shown in Table 16 providing nonperforming loan stratification by size, six nonperforming loans in excess of $10.0 million comprised 28% of our total nonperforming loans at September 30, 2011. Commercial real estate and construction loans are 63% of our total nonperforming loans and are generally consistent with December 31, 2010.

As discussed above, our focused asset management activities have led to declines in special mention and potential problem loans over recent quarters as we have worked to improve overall credit quality. Since the majority of inflows to nonperforming loans have been migrating from the special mention or potential problem loan categories, we expect that future nonperforming loan inflows will likely continue to moderate. However, because many of our potential problem loans are commercial real estate-related, a highly-stressed loan sector, and because the potential problem loan population contains some larger-sized credits, our total nonperforming loans may fluctuate over the next several quarters as we continue to execute remediation plans and work through the credit cycle. In addition, credit quality trends may also be impacted by the uncertainty in global economic conditions and market turmoil that could disrupt workout plans, adversely affect clients, or negatively impact collateral valuations. Further, net nonperforming asset levels could fluctuate depending on the timing of dispositions or other remediation actions. Our efforts to continue to dispose of nonperforming and problem assets in future quarters may be impacted by a number of factors, including but not limited to, the pace and timing of the overall recovery of the economy, activity levels in the real estate market and real estate inventory coming into the market for sale. OREO is likely to remain elevated as nonperforming commercial real estate loans continue to move through the collection process.

73

Nonperforming loans were $304.7 million at September 30, 2011, down 17% from $365.9 million at December 31, 2010. As shown in Table 16 providing nonperforming loan stratification by size, six nonperforming loans in excess of $10.0 million comprised 28% of our total nonperforming loans at September 30, 2011. Commercial real estate and construction loans are 63% of our total nonperforming loans generally consistent with December 31, 2010.

The following table breaks down our loan portfolio at September 30, 2011 between performing, delinquent and nonperforming status.

Table 12

Delinquency Analysis

(Dollars in thousands)

				Delinquent
	Current			30 – 59 Days Past Due			60 – 89 Days Past Due			90 Days Past Due and Accruing		Nonaccrual			Total Loans
Loan Balances:
Commercial	$	5,083,733		$	3,529		$	101		$	—	$	68,689		$	5,156,052
Commercial real estate		2,300,497			5,884			8,801			—		160,788			2,475,970
Construction		285,519			342			—			—		29,997			315,858
Residential real estate		286,827			7			2,864			—		18,007			307,705
Personal and home equity		390,312			776			1,016			—		27,266			419,370
Total loans	$	8,346,888		$	10,538		$	12,782		$	—	$	304,747		$	8,674,955
% of Loan Balance:
Commercial		98.60	%		0.07	%		—			—		1.33	%		100.00	%
Commercial real estate		92.91	%		0.24	%		0.36	%		—		6.49	%		100.00	%
Construction		90.39	%		0.11	%		—			—		9.50	%		100.00	%
Residential real estate		93.22	%		—			0.93	%		—		5.85	%		100.00	%
Personal and home equity		93.07	%		0.19	%		0.24	%		—		6.50	%		100.00	%
Total loans		96.22	%		0.12	%		0.15	%		—		3.51	%		100.00	%

74

The following table provides a comparison of our nonperforming assets, restructured loans accruing interest, special mention, potential problem and past due loans for the past five periods.

Table 13

Nonperforming Assets, Restructured, Special Mention, Potential Problem and Past Due Loans

(Dollars in thousands)

	2011									2010
	September 30			June 30			March 31			December 31			September 30
Nonaccrual loans:
Commercial	$	68,689		$	61,397		$	78,031		$	82,146		$	87,800
Commercial real estate		160,788			183,015			191,334			202,724			213,975
Construction		29,997			37,140			41,643			33,403			33,589
Residential real estate		18,007			18,496			16,869			14,841			9,101
Personal and home equity		27,266			30,400			29,055			32,766			26,691
Total nonaccrual loans		304,747			330,448			356,932			365,880			371,156
90 days past due loans (still accruing interest)		—			—			—			—			—
Total nonperforming loans		304,747			330,448			356,932			365,880			371,156
Foreclosed real estate (“OREO”)		116,364			123,997			93,770			88,728			90,944
Total nonperforming assets	$	421,111		$	454,445		$	450,702		$	454,608		$	462,100
Restructured loans accruing interest:
Commercial	$	50,153		$	58,033		$	15,050		$	8,017		$	2,422
Commercial real estate		41,083			42,016			67,420			60,019			27,601
Construction		—			9,012			3,094			4,348			—
Residential real estate		1,063			1,167			796			798			—
Personal and home equity		14,031			14,386			14,535			14,394			23,374
Total restructured loans accruing interest	$	106,330		$	124,614		$	100,895		$	87,576		$	53,397
Special mention loans	$	218,561		$	227,413		$	275,519		$	398,834		$	558,757
Potential problem loans	$	277,125		$	392,019		$	518,144		$	507,590		$	448,766
30-89 days past due loans	$	23,320		$	24,860		$	45,167		$	48,697		$	47,700
Nonperforming loans to total loans (excluding covered assets)		3.51	%		3.81	%		3.95	%		4.01	%		4.13	%
Nonperforming loans to total assets		2.54	%		2.73	%		2.86	%		2.94	%		2.95	%
Nonperforming assets to total assets		3.50	%		3.75	%		3.61	%		3.65	%		3.67	%
Allowance for loan losses as a percent of nonperforming loans		66	%		62	%		61	%		61	%		60	%

75

The following two tables present changes in our nonperforming loans and loans classified as restructured loans accruing interest portfolio for the past five periods.

Table 14

Nonperforming Loans Rollforward

(Dollars in thousands)

	2011									2010
	September 30			June 30			March 31			December 31			September 30
Balance at beginning of year	$	330,448		$	356,932		$	365,880		$	371,156		$	370,179
Additions:
New nonaccrual loans (1)		68,298			110,438			95,275			108,526			123,557
Reductions:
Return to performing status		(1,608	)		(2,781	)		(11,059	)		(6,564	)		(5,969	)
Paydowns and payoffs, net of advances		(13,166	)		(7,941	)		(16,301	)		(18,852	)		(18,208	)
Net sales		(20,432	)		(38,129	)		(11,288	)		(10,595	)		(3,200	)
Transfer to OREO		(24,373	)		(49,667	)		(23,655	)		(39,795	)		(44,979	)
Charge-offs, net		(34,420	)		(38,404	)		(41,920	)		(37,996	)		(50,224	)
Total reductions		(93,999	)		(136,922	)		(104,223	)		(113,802	)		(122,580	)
Balance at end of period	$	304,747		$	330,448		$	365,932		$	365,880		$	371,156

⁽¹⁾ Amounts represent loan balances at period end.

Table 15

Restructured Loans Accruing Interest Rollforward

(Dollars in thousands)

	2011									2010
	September 30			June 30			March 31			December 31			September 30
Balance at beginning of year	$	124,614		$	100,895		$	87,576		$	53,397		$	4,030
Additions:
New restructured loans accruing interest		8,592			54,663			19,328			45,582			49,404
Restructured loans returned to accruing status		1,029			—			—			—			—
Reductions:
Paydowns and payoffs, net		(20,545	)		(7,915	)		(1,535	)		1,034			(37	)
Transferred to nonperforming loans		(4,716	)		(9,930	)		(4,474	)		(12,437	)		—
Net sales		(2,260	)		(9,600	)		—			—			—
Removal of restructured loan status (1)		(340	)		—			—			—			—
Charge-offs, net		(44	)		(3,499	)		—			—			—
Balance at end of period	$	106,330		$	124,614		$	100,895		$	87,576		$	53,397

⁽¹⁾ Loan was previously classified as a troubled debt restructuring (“TDR”) and subsequently re-underwritten as a pass rated credit (i.e., risk rated 5 or better). Per our TDR policy, the TDR classification is removed.

76

The following table presents the stratification of our nonperforming loans as of September 30, 2011 and December 31, 2010.

Table 16

Nonperforming Loans Stratification

(Dollars in thousands)

	Stratification
	$10.0 Million or More		$5.0 Million to $9.9 Million		$3.0 Million to $4.9 Million		$1.5 Million to $2.9 Million		Under $1.5 Million		Total
As of September 30, 2011
Amount:
Commercial	$	24,511	$	28,173	$	—	$	1,793	$	14,212	$	68,689
Commercial real estate		47,643		26,941		19,031		31,557		35,616		160,788
Construction		12,490		—		7,866		5,183		4,458		29,997
Residential real estate		—		—		7,789		—		10,218		18,007
Personal and home equity		—		7,869		—		2,165		17,232		27,266
Total nonperforming loans	$	84,644	$	62,983	$	34,686	$	40,698	$	81,736	$	304,747
Number of Borrowers:
Commercial		2		4		—		1		40		47
Commercial real estate		3		5		5		15		64		92
Construction		1		—		2		2		8		13
Residential real estate		—		—		2		—		21		23
Personal and home equity		—		1		—		1		37		39
Total		6		10		9		19		170		214
As of December 31, 2010
Amount:
Commercial	$	44,249	$	6,051	$	8,420	$	7,861	$	15,565	$	82,146
Commercial real estate		—		61,718		52,856		33,912		54,238		202,724
Construction		—		11,733		4,434		8,383		8,853		33,403
Residential real estate		—		—		4,790		—		10,051		14,841
Personal and home equity		15,491		—		4,419		1,932		10,924		32,766
Total nonperforming loans	$	59,740	$	79,502	$	74,919	$	52,088	$	99,631	$	365,880
Number of Borrowers:
Commercial		3		1		2		3		50		59
Commercial real estate		—		9		13		16		92		130
Construction		—		2		1		4		14		21
Residential real estate		—		—		1		—		17		18
Personal and home equity		1		—		1		1		28		31
Total		4		12		18		24		201		259

77

The following table presents the stratification of our restructured loans accruing interest as of September 30, 2011 and December 31, 2010.

Table 17

Restructured Loans Accruing Interest Stratification

(Dollars in thousands)

	Stratification
	$10.0 Million or More		$5.0 Million to $9.9 Million		$3.0 Million to $4.9 Million		$1.5 Million to $2.9 Million		Under $1.5 Million		Total
As of September 30, 2011
Amount:
Commercial	$	15,540	$	24,650	$	3,563	$	1,692	$	4,708	$	50,153
Commercial real estate		21,415		5,187		—		7,778		6,703		41,083
Construction		—		—		—		—		—		—
Residential real estate		—		—		—		—		1,063		1,063
Personal and home equity		12,788		—		—		—		1,243		14,031
Total restructured loans accruing interest	$	49,743	$	29,837	$	3,563	$	9,470	$	13,717	$	106,330
Number of Borrowers:
Commercial		1		4		1		1		14		21
Commercial real estate		1		1		—		3		11		16
Construction		—		—		—		—		—		—
Residential real estate		—		—		—		—		2		2
Personal and home equity		1		—		—		—		3		4
Total		3		5		1		4		30		43
As of December 31, 2010
Amount:
Commercial	$	—	$	—	$	—	$	4,553	$	3,464	$	8,017
Commercial real estate		36,409		5,250		7,064		4,662		6,634		60,019
Construction		—		—		3,112		—		1,236		4,348
Residential real estate		—		—		—		—		798		798
Personal and home equity		13,114		—		—		—		1,280		14,394
Total restructured loans accruing interest	$	49,523	$	5,250	$	10,176	$	9,215	$	13,412	$	87,576
Number of Borrowers:
Commercial		—		—		—		2		7		9
Commercial real estate		2		1		2		2		9		16
Construction		—		—		1		—		1		2
Residential real estate		—		—		—		—		1		1
Personal and home equity		1		—		—		—		1		2
Total		3		1		3		4		19		30

The following table presents the credit quality of our loan portfolio as of September 30, 2011 and December 31, 2010, segmented by our transformational and legacy portfolios. We have reduced the level of problem assets in every category, with an overall reduction of 37% from December 31, 2010. Legacy loans, which now represent approximately 25% of our total loan portfolio, decreased by $741.5 million from December 31, 2010, with a $207.0 million reduction in third quarter 2011.

78

Table 18

Credit Quality

(Dollars in thousands)

	Special Mention		% of Portfolio Loan Type		Potential Problem Loans		% of Portfolio Loan Type		Non- Performing Loans		% of Portfolio Loan Type		Total Loans
As of September 30, 2011
Transformational
Commercial	$	44,086		0.9	$	102,460		2.2	$	52,865		1.1	$	4,659,930
Commercial real estate		53,069		4.1		38,808		3.0		36,316		2.8		1,281,591
Construction		10,129		4.8		9,283		4.4		12,579		6.0		210,904
Residential real estate		—		—		8,212		6.7		403		0.3		121,913
Home equity		—		—		424		1.0		—		—		43,965
Personal		3,934		3.1		810		0.6		346		0.3		127,483
Total transformational	$	111,218		1.7	$	159,997		2.5	$	102,509		1.6	$	6,445,786
Legacy
Commercial	$	10,718		2.2	$	25,558		5.2	$	15,824		3.2	$	496,122
Commercial real estate		88,396		7.4		70,111		5.9		124,472		10.4		1,194,379
Construction		—		—		342		0.3		17,418		16.6		104,954
Residential real estate		5,427		2.9		12,163		6.5		17,604		9.5		185,792
Home equity		1,595		1.1		8,145		5.7		13,440		9.4		142,949
Personal		1,207		1.1		809		0.8		13,480		12.8		104,973
Total legacy	$	107,343		4.8	$	117,128		5.3	$	202,238		9.1	$	2,229,169
Total	$	218,561		2.5	$	277,125		3.2	$	304,747		3.5	$	8,674,955
As of December 31, 2010
Transformational
Commercial	$	85,039		2.0	$	121,816		2.8	$	51,097		1.2	$	4,280,467
Commercial real estate		87,495		6.8		125,497		9.7		10,309		0.8		1,295,380
Construction		37,590		11.7		21,774		6.8		105		*		320,151
Residential real estate		1,214		1.4		5,888		6.8		35		*		86,473
Home equity		—		—		346		1.2		—		—		28,356
Personal		—		—		1,280		1.0		—		—		132,813
Total transformational	$	211,338		3.4	$	276,601		4.5	$	61,546		1.0	$	6,143,640
Legacy
Commercial	$	26,891		4.3	$	52,013		8.2	$	31,049		4.9	$	632,410
Commercial real estate		115,577		7.4		134,545		8.6		192,415		12.3		1,562,789
Construction		30,325		14.4		23,345		11.1		33,298		15.8		210,582
Residential real estate		8,748		3.8		9,213		4.0		14,806		6.4		232,673
Home equity		3,757		2.2		10,926		6.5		8,195		4.9		168,823
Personal		2,198		1.3		947		0.6		24,571		15.0		163,440
Total legacy	$	187,496		6.3	$	230,989		7.8	$	304,334		10.2	$	2,970,717
Total	$	398,834		4.4	$	507,590		5.6	$	365,880		4.0	$	9,114,357

* Less than 0.1%

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Foreclosed real estate

Foreclosed real estate (“OREO”) totaled $116.4 million at September 30, 2011, compared to $88.7 million at December 31, 2010, and is comprised of 364 properties. The increase in OREO properties from year end 2010 reflects our efforts to move problem loans through the credit management collection process by means of foreclosure or other resolution strategy to gain control of the real estate collateral for ultimate sale. Given current economic conditions and the difficult real estate market, the time required to sell these properties in an orderly fashion has increased, and OREO is likely to remain elevated as nonperforming commercial real estate loans continue to move through the collection process. Table 19 presents a rollforward of OREO for the quarters and nine months ended September 30, 2011 and 2010. Table 20 presents the composition of OREO properties at September 30, 2011 and December 31, 2010 and Table 21 presents OREO property by geographic location at September 30, 2011 and December 31, 2010.

Table 19

OREO Rollforward

(Dollars in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Beginning balance	$	123,997		$	68,693		$	88,728		$	41,497
New foreclosed properties		24,373			44,979			97,701			100,802
Valuation adjustments		(1,175	)		(1,385	)		(11,420	)		(4,594	)
Disposals:
Sale proceeds		(25,921	)		(20,277	)		(51,813	)		(45,733	)
Net loss on sale		(4,910	)		(1,066	)		(6,832	)		(1,028	)
Ending balance	$	116,364		$	90,944		$	116,364		$	90,944

Table 20

OREO Properties by Type

(Dollars in thousands)

	September 30, 2011						December 31, 2010
	Number of Properties		Amount		% of Total		Number of Properties		Amount		% of Total
Single family home		75	$	22,821		19		24	$	21,534		24
Land parcels		243		55,998		48		320		34,122		38
Multi-family units		11		5,476		5		14		6,061		7
Office/industrial		28		24,243		21		20		26,511		30
Retail		7		7,826		7		1		500		1
Total OREO properties		364	$	116,364		100		379	$	88,728		100

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Table 21

OREO Property Type by Location

(Dollars in thousands)

	Illinois		Georgia		Michigan		South Eastern(1)		Other(2)		Total
As of September 30, 2011
Single family homes	$	19,240	$	1,259	$	1,408	$	—	$	914	$	22,821
Land parcels		35,409		2,951		2,874		9,568		5,196		55,998
Multi-family		3,202		—		1,702		—		572		5,476
Office/industrial		14,864		1,012		548		3,762		4,057		24,243
Retail		5,807		892		1,127		—		—		7,826
Total OREO properties	$	78,522	$	6,114	$	7,659	$	13,330	$	10,739	$	116,364
% of Total		68		5		7		11		9		100
As of December 31, 2010
Single family homes	$	14,943	$	139	$	6,194	$	—	$	258	$	21,534
Land parcels		10,874		4,772		3,626		10,396		4,454		34,122
Multi-family		5,166		—		895		—		—		6,061
Office/industrial		13,505		1,104		3,787		4,573		3,542		26,511
Retail		500		—		—		—		—		500
Total OREO properties	$	44,988	$	6,015	$	14,502	$	14,969	$	8,254	$	88,728
% of Total		51		7		16		17		9		100

⁽¹⁾ Represents the southeastern states of Arkansas and Florida.

⁽²⁾ Represents the midwestern states of Ohio, Indiana, Wisconsin and Missouri.

At September 30, 2011, OREO land parcels, currently a fairly illiquid asset class, consisted of 243 properties and represented the largest portion of OREO at 48% of the total OREO carrying value with two properties with a total value of $18.1 million. Office/industrial properties represented 21% of the total OREO carrying value and consisted of 28 properties. Single family homes represented 19% of the total OREO carrying value and consisted of 75 properties.

Credit Quality Management and Allowance for Loan Losses

We maintain an allowance for loan losses at a level management believes is sufficient to absorb credit losses inherent in the loan portfolio. The allowance for loan losses is assessed quarterly and represents an accounting estimate of probable losses in the portfolio at each balance sheet date based on a review of available and relevant information at that time. The allowance is not a prediction of our actual credit losses going forward based on current and available information. The allowance contains provisions for probable losses that have been identified relating to specific borrowing relationships that are considered to be impaired (the “specific component” of the allowance), as well as probable losses inherent in the loan portfolio that are not specifically identified (the “general allocated component” of the allowance), which is determined using a methodology that is a function of quantitative and qualitative factors and management judgment applied to defined segments of our loan portfolio.

The specific component of the allowance relates to impaired loans. Impaired loans consist of nonaccrual loans (which include nonaccrual TDRs) and loans classified as accruing TDRs. A loan is considered nonaccrual when, based on current information and events, management believes that it is probable that we will be unable to collect all amounts due (both principal and interest) according to the contractual terms of the loan agreement. All loans that are over 90 days past due in principal or interest are by definition considered “impaired” and placed on nonaccrual status. Management may also place some loans on nonaccrual status before they are 90 days past due if they meet the above definition of “impaired.” Once a loan is determined to be impaired, the amount of impairment is measured based on the loan’s observable fair value, the fair value of the underlying collateral less selling costs if the loan is collateral dependent, or the present value of expected future cash flows discounted at the loan’s effective interest rate. Impaired loans exceeding $500,000 are evaluated individually while smaller loans are evaluated as pools using historical loss experience as well as management’s loss expectations for the respective asset class and product type. If the estimated fair value of the impaired loan is less than the recorded investment in the loan (including accrued interest, net of deferred loan fees and costs and unamortized premium or discount), impairment is recognized by creating a specific reserve as a component of the allowance for loan losses. The recognition of any reserve required on new impaired loans is recorded in the same quarter in which the transfer of the loan to nonaccrual status occurred. All impaired loans are reviewed quarterly for any changes that would affect the specific reserve. Any impaired loan in which a determination has been made that the economic value is permanently reduced is charged-off against the allowance for loan losses to reflect its current economic value in the period in which the determination has been made.

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When collateral-dependent real estate loans are determined to be impaired, updated appraisals are typically obtained every twelve months and evaluated internally at least every six months. In addition, both borrower and market-specific factors are taken into consideration, which may result in obtaining more frequent appraisal updates or internal assessments. Appraisals are conducted by third party independent appraisers under internal direction and engagement. Any appraisal with a value in excess of $250,000 is subject to a compliance review. Appraisals received with a value in excess of $1.0 million are subject to a technical review. Appraisals are either reviewed internally or sent to an outside technical firm if appropriate. Both levels of review involve a scope appropriate for the complexity and risk associated with the loan and its collateral. We consider other factors or recent developments which could adjust the valuations indicated in the appraisals or internal reviews. As of September 30, 2011, the average appraisal age used in the impaired loan valuation process was approximately 174 days. The amount of impaired assets which, by policy, requires an independent appraisal, but does not have a current external appraisal at year-end due to the timing of the receipt of the appraisal is not material to the overall reserve. In situations such as this, we establish a probable impairment reserve for the account based on our experience in the related asset class and type.

The general allocated component of the allowance is determined using a methodology that is a function of quantitative and qualitative factors applied to segments of our loan portfolio. The methodology takes into account at a product level the originating line of business and vintage (transformational or legacy), the origination year, the risk rating migration of the note, and historical default and loss history of similar products. Using this information, the methodology produces a range of possible reserve amounts by product type. We consider the appropriate balance of the general allocated component of the reserve within these ranges based on a variety of internal and external quantitative and qualitative factors to reflect data or timeframes not captured by the model as well as market and economic data and management judgment. In certain instances, these additional factors and judgments may lead to management’s conclusion that the appropriate level of the reserve is outside the range determined through the framework. In our evaluation of the adequacy of the allowance at September 30, 2011, we considered a number of factors for each product that included, but were not limited to, the following: for the commercial portfolio, the pace of growth in the commercial loan sector, the existence of larger individual credits and specialized industry concentrations, and general macroeconomic indicators such as GDP employment trends, and manufacturing activity which, overall indicates a somewhat less optimistic economic outlook quarter over quarter; for the commercial real estate portfolio, the potential impact of general commercial real estate trends, particularly occupancy and leasing rate trends, charge-off severity and collateral value changes; for the construction portfolio, construction employment, industry experience on construction loan losses, construction spending rates, and for the residential, home equity, and personal portfolios, home price indices and sales volume, vacancy rates, delinquency rates and general economic conditions and interest rate trends which impact these products.

The establishment of the allowance for loan losses involves a high degree of judgment and includes an inherent level of imprecision given the difficulty of identifying all the factors impacting loan repayment and the timing of when losses actually occur. While management utilizes its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond our control, including, but not limited to, client performance, the economy, changes in interest rates and property values, and the interpretation by regulatory authorities of loan classifications.

Although we determine the amount of each element of the allowance separately and consider this process to be an important credit management tool, the entire allowance for loan losses is available for the entire loan portfolio.

Management evaluates the adequacy of the allowance for loan losses and reviews the allowance for loan losses and the underlying methodology with the Audit Committee of the Board of Directors quarterly. As of September 30, 2011, management concluded the allowance for loan losses was adequate (i.e., sufficient to absorb losses that are inherent in the portfolio at that date, including those not yet identifiable).

As an integral part of their examination process, various federal and state regulatory agencies also review the allowance for loan losses. These agencies may require that certain loan balances be classified differently or charged off when their credit evaluations differ from those of management, based on their judgments about information available to them at the time of their examination.

The accounting policies underlying the establishment and maintenance of the allowance for loan losses through provisions charged to operating expense are discussed in Note 1 to the Consolidated Financial Statements of our 2010 Annual Report on Form 10-K.

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Table 22

Quarterly Allowance for Loan Losses

and Summary of Loan Loss Experience

(Dollars in thousands)

	Quarters ended
	2011									2010
	September 30			June 30			March 31			December 31			September 30
Change in allowance for loan losses:
Balance at beginning of period	$	206,286		$	218,237		$	222,821		$	223,392		$	232,411
Loans charged-off:
Commercial		(5,039	)		(10,512	)		(4,200	)		(3,050	)		(2,541	)
Commercial real estate		(29,920	)		(25,402	)		(29,409	)		(21,909	)		(31,809	)
Construction		(1,419	)		(8,275	)		(62	)		(1,709	)		(4,882	)
Residential real estate		(234	)		(186	)		(386	)		(544	)		(1,715	)
Home equity		(3,291	)		(508	)		(1,447	)		(1,234	)		(736	)
Personal		(2,083	)		(434	)		(6,787	)		(8,602	)		(8,939	)
Total charge-offs		(41,986	)		(45,317	)		(42,291	)		(37,048	)		(50,622	)
Recoveries on loans previously charged-off:
Commercial		2,278			707			465			1,243			730
Commercial real estate		969			511			272			75			304
Construction		29			56			97			274			131
Residential real estate		9			40			2			12			4
Home equity		12			15			10			79			9
Personal		103			312			155			259			394
Total recoveries		3,400			1,641			1,001			1,942			1,572
Net charge-offs		(38,586	)		(43,676	)		(41,290	)		(35,106	)		(49,050	)
Provisions charged to operating expense		32,341			31,725			36,706			34,535			40,031
Balance at end of period	$	200,041		$	206,286		$	218,237		$	222,821		$	223,392
Total loans, excluding covered assets at period-end	$	8,674,955		$	8,672,642		$	9,037,067		$	9,114,357		$	8,992,129
Allowance as a percent of loans at period-end		2.31	%		2.38	%		2.41	%		2.44	%		2.48	%
Average loans, excluding covered assets	$	8,686,201		$	8,981,987		$	9,162,389		$	9,037,538		$	8,923,922
Ratio of net charge-offs (annualized) to average loans outstanding for the period		1.76	%		1.95	%		1.83	%		1.54	%		2.17	%

Our allowance for loan losses declined $22.8 million from $222.8 million at December 31, 2010 to $200.0 million at September 30, 2011. The decrease in the allowance is primarily the result of an improved credit risk profile for the performing portfolio as reflected in the reduced levels of special mention and potential problem loans and improving loan portfolio mix due to the reshaping activities previously discussed. The ratio of the allowance for loan losses to total loans (excluding covered assets) was 2.31% at September 30, 2011, down from 2.44% as of December 31, 2010. The loan loss allowance as a percentage of nonperforming loans was 66% compared to the December 31, 2010 level of 61%. The provision for loan losses was $100.8 million for the nine months ended September 30, 2011, compared to $157.5 million in the prior year period.

For the third quarter 2011, net charge-offs totaled $38.6 million as compared to $43.7 million in the second quarter 2011 and $49.1 million in the third quarter 2010. Continued high levels of charge-offs reflect real estate collateral values, particularly land values, which have remained low. Commercial real estate comprised 75% of net charge-offs in the third quarter, reflecting the challenging market conditions associated with these loan types.

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The following table presents our allocation of the allowance for loan losses by specific category at the dates shown.

Table 23

Allocation of Allowance for Loan Losses

(Dollars in thousands)

	As of September 30, 2011						As of December 31, 2010
	Amount		% of Total Allowance		% of Loan Balance		Amount		% of Total Allowance		% of Loan Balance
General allocated reserve:
Commercial	$	45,000		22		0.9	$	52,100		23		1.1
Commercial real estate		60,000		30		2.4		72,850		33		2.5
Construction		10,450		5		3.3		16,000		7		3.0
Residential real estate		5,800		3		1.9		4,275		2		1.3
Home equity		3,500		2		1.9		3,150		1		1.6
Personal		3,100		2		1.3		3,475		2		1.2
Total allocated		127,850		64		1.5		151,850		68		1.7
Specific reserve		72,191		36		n/m		70,971		32		n/m
Total	$	200,041		100		2.3	$	222,821		100		2.4

Under our methodology, the allowance for loan losses is comprised of the following components:

General Allocated Component of the Allowance

The general allocated component of the allowance decreased by $24.0 million during the first nine months of 2011, from $151.9 million at December 31, 2010 to $127.9 million at September 30, 2011. The reduction in the general allocated reserve was primarily influenced by the improved risk profile of the performing portfolio during the year, as exposure in special mention and potential problem loans declined, due in part to the sale of these problem credits. Also, the portfolio is becoming more weighted in transformational and commercial loans, where our historical credit performance has been better, and less weighted in legacy and commercial real estate loans, where historical performance has been weaker. This changing mix positively impacts reserve requirements, based on our historical loss experience.

The allocated reserve for our commercial real estate and construction portfolios, which represented 55% of our total allocated reserve at September 30, 2011, declined $18.4 million, or 21%, from December 31, 2010. The decrease in this allocation is primarily due to a lower balance of loans in the commercial real estate and construction sectors at the end of the third quarter as compared to December 31, 2010. The combined coverage ratio of the allocated reserve for these portfolios was 2.5% at September 30, 2011 and 2.6% at December 31, 2010.

Specific Component of the Allowance

At September 30, 2011, the specific component of the allowance increased slightly by $1.2 million to $72.2 million from $71.0 million at December 31, 2010. The specific reserve requirements are primarily influenced by new loan additions to nonperforming status, as well as changes to collateral values. Our impaired loans are primarily collateral-dependent with such loans totaling $353.3 million of the total $411.1 million in impaired loans at September 30, 2011.

Reserve for Unfunded Commitments

In addition to the allowance for loan losses, we maintain a reserve for unfunded commitments at a level we believe to be sufficient to absorb estimated probable losses related to unfunded credit facilities. At September 30, 2011, our reserve for unfunded commitments declined $1.1 million from December 31, 2010 to $7.0 million as a result of an improved risk profile of the portfolio. Net adjustments to the reserve for unfunded commitments are included in other non-interest expense in the Consolidated Statements of Income. Unfunded commitments, excluding covered assets, totaled $4.1 billion and $3.9 billion at September 30, 2011 and 2010, respectively.

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COVERED ASSETS

Covered assets represent purchased loans and foreclosed loan collateral covered under loss sharing agreements with the FDIC as a result of the 2009 FDIC-assisted acquisition of the former Founders Bank from the FDIC. Under the loss share agreements, the FDIC generally will assume 80% of the first $173 million of credit losses and 95% of the credit losses in excess of $173 million, in both cases relating to assets existing at the date of acquisition.

The carrying amounts of covered assets are presented in the following table:

Table 24

Covered Assets

(Amounts in thousands)

	September 30, 2011			December 31, 2010
Commercial loans	$	33,786		$	44,812
Commercial real estate loans		164,581			189,194
Residential mortgage loans		52,176			56,748
Consumer installment and other loans		6,248			9,129
Foreclosed real estate		28,344			32,155
Assets in lieu		—			469
Estimated loss reimbursement by the FDIC		33,838			64,703
Total covered assets		318,973			397,210
Allowance for covered asset losses		(16,689	)		(15,334	)
Net covered assets	$	302,284		$	381,876

Total covered assets decreased by $78.2 million, or 20%, from $397.2 million at December 31, 2010 to $319.0 million at September 30, 2011. The reduction is primarily attributable to $44.7 million in principal paydowns, net of advances, as well as the resulting impact of such on the evaluation of expected cash flows and discount accretion levels. In addition, the estimated loss reimbursement by the FDIC (“the FDIC indemnification receivable”) further contributed to the reduction as a result of loss claims paid by the FDIC. The allowance for covered loan losses increased by $1.4 million to $16.7 million at September 30, 2011 from $15.3 million at December 31, 2010, reflecting a further credit deterioration in expected cash flows on certain pools of covered loans since the date of acquisition. Of the total increase in the allowance for covered loan losses, 80% was offset through the FDIC indemnification receivable and the remaining 20% representing the non-reimbursable portion of the loss share agreement recognized as a charge to provision for loan and covered loan losses on the Consolidated Statements of Income. As of September 30, 2011, the FDIC had reimbursed the Company $88.6 million in losses under the loss share agreements.

85

The following table presents covered loan delinquencies and nonperforming covered assets as of September 30, 2011 and December 31, 2010 and excludes purchased impaired loans which are accounted for on a pool basis. Since each purchased impaired pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past due status of the pools, or that of individual loans within the pools, is not meaningful. Because we are recognizing interest income on each pool of such loans, they are all considered to be performing. Covered assets are excluded from the asset quality presentation of our originated loan portfolio, given the loss share indemnification from the FDIC.

Table 25

Past Due Covered Loans and Nonperforming Covered Assets

(Amounts in thousands)

	September 30, 2011		December 31, 2010
30-59 days past due	$	5,424	$	5,885
60-89 days past due		2,305		2,853
90 days or more past due and still accruing		—		—
Nonaccrual		21,677		16,357
Total past due and nonperforming covered loans		29,406		25,095
Foreclosed real estate		28,344		32,155
Total past due and nonperforming covered assets	$	57,750	$	57,250

FUNDING AND LIQUIDITY MANAGEMENT

We have implemented various policies to manage our liquidity position in order to meet our cash flow requirements and maintain sufficient capacity to meet our clients’ needs and accommodate fluctuations in asset and liability levels due to changes in our business operations as well as unanticipated events. We also have in place contingency funding plans designed to allow us to operate through a period of stress when access to normal sources of funding may be constrained. As part of our asset/liability management strategy, we utilize a variety of funding sources in an effort to optimize the balance of duration risk, cost, liquidity risk and contingency planning.

The Bank’s principal sources of funds are client deposits, including large institutional deposits, capital contributions by the parent company, and cash from operations. The Bank’s principal uses of funds include funding growth in the core asset portfolios, including loans, and to a lesser extent, our investment portfolio, which is used primarily to manage interest rate and liquidity risk. The primary sources of funding for the holding company include dividends when received from its bank subsidiary, intercompany tax reimbursements from the Bank, and proceeds from the issuance of senior, subordinated and convertible debt, as well as equity. Primary uses of funds for the parent company include repayment of maturing debt, interest paid to our debt holders, dividends paid to stockholders, and capital contributions to the Bank.

We consider client deposits our core funding source. At September 30, 2011, 84% of our total assets were funded by client deposits, compared to 80% at December 31, 2010. We define client deposits as all deposits other than traditional brokered deposits and non-client CDARS^® (as described in the footnotes to Table 26 below). Time deposits are included as client deposits since these deposits have historically not been volatile deposits for us. We have benefited in recent quarters from relatively high client liquidity levels. While we expect overall liquidity in the banking system to remain high until economic recovery and market factors improve, the level of our client deposits may fluctuate based on client needs, seasonality and other economic or market factors.

Given the commercial focus of our core business strategy, a majority of our deposit base is comprised of corporate accounts which are typically larger than retail accounts. We have built a suite of deposit and cash management products and services that support our efforts to attract and retain corporate client accounts. Client relationships with greater than $75 million in deposits represented more than 20% of our total deposits at September 30, 2011. A majority of the deposits greater than $75 million are from financial services and insurance related corporate clients. We take deposit concentration risk into account in managing our liquid asset levels. Liquid assets refer to cash on hand, federal funds sold, as well as unpledged securities. Net liquid assets represent the sum of the liquid asset categories less the amount of assets pledged to secure public funds and certain deposits that require collateral. Net liquid assets at the Bank were $1.6 billion and $1.8 billion at September 30, 2011 and December 31, 2010, respectively. We maintain liquidity at levels we believe sufficient to meet anticipated client liquidity needs, fund anticipated loan growth, selectively purchase securities and investments and opportunistically pay down wholesale funds.

86

While we first look toward internally generated deposits as our funding source, we utilize wholesale funding, including brokered deposits, as needed to enhance liquidity and to fund asset growth. Brokered deposits are deposits that are sourced from external and unrelated financial institutions by a third party. This funding requires advance notification to structure the type of deposit desired by the Bank. Brokered deposits can vary in term from one month to several years and have the benefit of being a source of longer-term funding. Our asset/liability management policy currently limits our use of brokered deposits, excluding reciprocal CDARS^®, to levels no more than 25% of total deposits, and total brokered deposits to levels no more than 40% of total deposits. At September 30, 2011, brokered deposits exclusive of reciprocal CDARS^® were less than 1% of total deposits while total brokered deposits were less than 9% of total deposits.

Our cash flows are comprised of three classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Cash flows from operating activities primarily include results of operations for the period, adjusted for items in net income that did not impact cash. Net cash provided by operating activities increased by $74.9 million to $198.1 million for the nine months ended September 30, 2011 from the nine months ended September 30, 2010, which was primarily due to an increase in net income from the prior year period. Cash flows from investing activities reflect the impact of loans and investments acquired for our interest-earning asset portfolios and asset sales. For the nine months ended September 30, 2011, net cash provided by investing activities was $100.6 million, compared to net cash used in investing activities of $481.9 million for the prior year period. This change in cash flows represents larger amounts of cash redeployed towards investments and loans in the prior year comparative period than the current period. Cash flows from financing activities include transactions and events whereby cash is obtained from depositors, creditors or investors. Net cash used in financing activities for the nine months ended September 30, 2011 was $532.9 million, compared to net cash provided by financing activities of $496.6 million for the prior year period. This change in cash flows represents the decrease in total deposits in the current year period as compared to the prior year comparative period.

For information regarding our investment portfolio, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Investment Portfolio Management.”

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Deposits

Middle-market commercial client relationships from a diversified industry base in our markets are the primary source of our deposit base. Due to our middle-market commercial banking focused business model, our client deposit base provides access to larger deposit balances that result in a concentrated deposit base. The deposits are held in different deposit products such as interest-bearing and noninterest-bearing demand deposits, CDARS^®, savings and money market accounts. The following table provides a comparison of deposits by category for the periods presented.

Table 26

Deposits

(Dollars in thousands)

	As of
	September 30, 2011		% of Total		December 31, 2010		% of Total		% Change
Noninterest-bearing deposits	$	2,832,481		28.0	$	2,253,661		21.4		25.7
Interest-bearing deposits		611,293		6.0		616,761		5.9		-0.9
Savings deposits		214,610		2.1		190,685		1.8		12.5
Money market accounts		4,178,087		41.2		4,631,138		43.9		-9.8
Brokered deposits:
Traditional		60,665		0.6		329,107		3.1		-81.6
Client CDARS® (1)		841,337		8.3		852,458		8.1		-1.3
Non-client CDARS® (1)		—		—		269,262		2.6		-100.0
Total brokered deposits		902,002		8.9		1,450,827		13.8		-37.8
Time deposits		1,370,190		13.6		1,392,357		13.2		-1.6
Total deposits	$	10,108,663		100.0	$	10,535,429		100.0		-4.1
Client deposits (2)	$	10,047,998		99.4	$	9,937,060		94.3		1.1

⁽¹⁾  The CDARS^® deposit program is a deposit services arrangement that effectively achieves FDIC deposit insurance for jumbo deposit relationships. These deposits are classified as brokered deposits for regulatory deposit purposes; however, we classify certain of these deposits as client CDARS^® due to the source being our client relationships and are, therefore, not traditional brokered deposits. We also participate in a non-client CDARS^® program that is more like a traditional brokered deposit program.

⁽²⁾  Total deposits, net of traditional brokered deposits and non-client CDARS^®.

Total deposits at September 30, 2011 decreased by $426.8 million from year-end 2010 as money market accounts, non-client CDARS^®, and traditional brokered deposits declined, partially offset by increased balances in noninterest-bearing deposits. Client deposits increased by $110.9 million from December 31, 2010 and client deposits as a percentage of total deposits also increased from 94% at December 31, 2010 to 99% at September 30, 2011. Noninterest-bearing deposits at September 30, 2011 were 28% of total deposits, an increase from 21% at December 31, 2010. We anticipate client deposits to fluctuate in line with client needs and usage of liquidity.

In response to the provision of the Dodd-Frank Act requiring repeal of the regulatory prohibition on payment of interest on commercial demand deposits effective in July 2011, we began offering an interest-bearing checking account for business customers in the third quarter of 2011. As anticipated, this change did not have a material effect on our deposit mix or our cost of funds in the low-rate environment.

Brokered deposits totaled $902.0 million at September 30, 2011, decreasing $548.9 million from December 31, 2010 due to a reduced reliance on traditional brokered deposits and non-client CDARS^® deposits. Brokered deposits included $841.3 million in client-related CDARS^®. Brokered deposits, excluding client CDARS^®, declined by $537.7 million from the prior year end and were 1% of total deposits at September 30, 2011 compared to 6% at December 31, 2010. Consistent with our funding needs, during the third quarter 2011, we elected not to replace certain maturing non-client CDARS^® and traditional brokered deposits as total loans remained relatively flat from the prior quarter and we continued to see client deposit inflows.

The following tables present our brokered and time deposits as of September 30, 2011, which are expected to mature during the period specified.

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Table 27

Scheduled Maturities of Brokered and Time Deposits

(Dollars in thousands)

	Brokered Deposits		Time Deposits		Total
Year ending December 31,
2011:
Fourth quarter	$	387,302	$	325,837	$	713,139
2012		477,490		716,466		1,193,956
2013		29,112		179,319		208,431
2014		6,537		31,272		37,809
2015		1,561		106,008		107,569
2016 and thereafter		—		11,288		11,288
Total	$	902,002	$	1,370,190	$	2,272,192

Table 28

Maturities of Time Deposits of $100,000 or More ⁽¹⁾

(Dollars in thousands)

	September 30, 2011
Maturing within 3 months	$	634,677
After 3 but within 6 months		472,865
After 6 but within 12 months		457,096
After 12 months		403,793
Total	$	1,968,431

⁽¹⁾  Includes brokered deposits.

Over the past several years in the generally low interest rate environment, our clients have tended to keep the maturities of their deposits short and short-term certificates of deposit have generally been renewed on terms and with maturities of similar duration. In the event that time deposits are not renewed, we expect to replace those deposits with traditional deposits, brokered deposits, or borrowed money sufficient to meet our funding needs.

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Short-term Borrowings and Long-term Debt

Short-term borrowings, which at September 30, 2011 consisted solely of FHLB advances that mature in one year or less, totaled $59.2 million, decreasing by $59.4 million from $118.6 million at year end 2010 as maturities were repaid. Scheduled maturities of short-term borrowings during the fourth quarter 2011 total $24.1 million. To increase our access to liquidity, we became a member of the FHLB Chicago in the third quarter 2011 and, as a result, established $427.8 million of additional FHLB borrowings availability as of September 30, 2011. We may also liquidate or borrow against unpledged investment securities and redeploy funds as needed. The following table provides a comparison of short-term borrowings by category for the periods presented.

Table 29

Summary of Short-term Borrowings

(Dollars in thousands)

	September 30, 2011					December 31, 2010
	Amount		Rate			Amount		Rate
Federal Home Loan Bank (“FHLB”) advances	$	59,154		2.60	%	$	117,620		2.40	%
Other		—					941		—
Total short-term borrowings	$	59,154				$	118,561
Unused overnight fed funds availability (1)	$	200,000				$	95,000
Borrowing capacity through the FRB discount window’s primary credit program (2)	$	1,038,348				$	536,836
FHLB advances availability	$	427,842				$	—
Weighted average remaining maturity of FHLB advances at quarter-end (in months)		7.2					3.9

⁽¹⁾  Our total availability of overnight fed fund borrowings is not a committed line of credit and is dependent upon lender availability.

⁽²⁾  Includes federal term auction facilities. Our borrowing capacity changes each quarter subject to available collateral and FRB discount factors.

Long-term debt which is comprised of junior subordinated debentures, a subordinated debt facility and the long-term portion of FHLB advances, decreased by $35.0 million to $379.8 million at September 30, 2011 from $414.8 million at December 31, 2010. The reduction in long-term debt was attributable to FHLB advance activity with $35.0 million of FHLB advances reclassified from long-term to short-term during the nine month period.

In addition to on-balance sheet funding and other liquid assets such as cash and investment securities, we maintain access to various external sources of funding, which assist in the prudent management of funding costs, interest rate risk, and anticipated funding needs or other considerations. Some sources of funding are accessible same-day while others require advance notice. Funds that are immediately accessible include Federal Fund counterparty lines, which are uncommitted lines of credit from other financial institutions, and the borrowing term is typically overnight. Availability of Federal Fund lines fluctuate based on market conditions and counterparty relationship strength. Unused overnight Fed Funds borrowings available for use totaled $200.0 million and $95.0 million, respectively, at September 30, 2011 and December 31, 2010. Repurchase agreements (“Repos”) are also an immediate source of funding in which we pledge assets to a counterparty against which we can borrow with the agreement to repurchase at a specified date in the future. Repos can vary in term, from overnight to longer, but are regarded as short-term in nature. An additional source of overnight funding is the discount window at the Federal Reserve Bank (“FRB”). We maintain access to the discount window by pledging loans as collateral to the FRB. Funding availability is primarily dictated by the amount of loans pledged, but also impacted by the margin applied to the loans by the FRB. The amount of loans pledged to the FRB can fluctuate due to the availability of loans eligible under the FRB’s criteria which include stipulations of documentation requirements, credit quality, payment status and other criteria. At September 30, 2011, we had $1.0 billion in borrowing capacity through the FRB discount window’s primary credit program compared to $536.8 million at December 31, 2010.

CAPITAL

Equity totaled $1.3 billion at September 30, 2011, increasing by $58.3 million from December 31, 2010 and was largely attributable to current year net income and higher net unrealized gains on available-for-sale securities included in accumulated other comprehensive income.

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Capital Management

Under applicable regulatory capital adequacy guidelines, the Company and the Bank are subject to various capital requirements adopted and administered by the federal banking agencies. These guidelines specify minimum capital ratios calculated in accordance with the definitions in the guidelines, including the leverage ratio which is Tier 1 capital as a percentage of adjusted average assets, and the Tier 1 capital ratio and the total capital ratio each as a percentage of risk-weighted assets and off-balance sheet items that have been weighted according to broad risk categories. These minimum ratios are shown in the table below.

To satisfy safety and soundness standards, banking institutions are expected to maintain capital levels in excess of the regulatory minimums depending on the risk inherent in the balance sheet, regulatory expectations and the changing risk profile of business activities and plans. Under our capital planning policy, we target capital ratios at levels we believe are appropriate based on such risk considerations, taking into account the current operating and economic environment, internal risk guidelines, and our strategic objectives as well as regulatory expectations. At the Bank, primarily due to our credit loss experience and recent levels of nonperforming loans, our policy currently calls for minimum capital ratios of 8.25% Tier 1 leverage and 12.0% total risk-based capital. We have no current plans to raise additional capital and have not set a timetable for repaying Troubled Asset Relief Program (“TARP”) funds.

The following table presents information about our capital measures and the related regulatory capital guidelines.

Table 30

Capital Measurements

(Dollars in thousands)

	Actual						FRB Guidelines For Minimum Regulatory Capital					Regulatory Minimum For “Well Capitalized” under FDICIA
	September 30, 2011			December 31, 2010			Ratio			Excess Over Regulatory Minimum at 9/30/11		Ratio			Excess Over Well Capitalized under FDICIA at 9/30/11
Regulatory capital ratios:
Total risk-based capital:
Consolidated		14.89	%		14.18	%		8.00	%	$	731,271		na
The PrivateBank		13.11			12.32			na					10.00	%	$	328,973
Tier 1 risk-based capital:
Consolidated		12.95			12.06			4.00			950,043		na
The PrivateBank		11.17			10.19			na					6.00			546,900
Tier 1 leverage:
Consolidated		11.48			10.78			4.00			895,602		na
The PrivateBank		9.89			9.11			na					5.00			584,632
Other capital ratios (consolidated) (1):
Tier 1 common equity to risk- weighted assets (2)		8.38			7.69
Tangible common equity to tangible assets (2)		7.86			7.10
Tangible equity to tangible assets (2)		9.87			9.04
Tangible equity to risk- weighted assets (2)		11.08			10.08
Total equity to total assets		10.70			9.85

⁽¹⁾  Ratios are not subject to formal FRB regulatory guidance.

⁽²⁾  Ratios are non-U.S. GAAP financial measures. Refer to Table 31, “Non-U.S. GAAP Measures” for a reconciliation to U.S. GAAP presentation.

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As of September 30, 2011, all of our $244.8 million of outstanding junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities (“Debentures”) are included in Tier 1 capital. The Tier 1 qualifying amount is limited to 25% of Tier 1 capital under FRB regulations. Further, of the $120.0 million in outstanding subordinated debt facility at September 30, 2011, 60% qualifies as Tier II capital and will be reduced by an additional 20% annually in the third quarter of each year until it reaches zero. For a full description of our Debentures and subordinated debt, refer to Notes 9 and 10 of “Notes to Consolidated Financial Statements” in Item 1 of this Form 10-Q.

Dividends

We declared dividends of $0.01 per common share during the third quarter of 2011, unchanged from the prior ten quarters. The dividend payout ratio for the quarter ended September 30, 2011 was 7.1%. Although we currently intend to continue to pay dividends on our common stock and our preferred stock at the current levels, there can be no assurance that we will continue to do so.

As a result of our participation in the TARP’s Capital Purchase Program (“TARP CPP”), we are subject to various restrictions on our ability to increase the cash dividends we pay on our common stock above the quarterly rate of $0.075 per share, the rate in effect when our participation in TARP CPP began. We currently provide notice to and obtain approval from the FRB before declaring or paying any dividends. For additional information regarding limitations and restrictions on our ability to pay dividends, refer to the “Supervision and Regulation” and “Risk Factors” sections of our 2010 Annual Report on Form 10-K.

NON-U.S. GAAP FINANCIAL MEASURES

This report contains both U.S. GAAP and non-U.S. GAAP based financial measures. These non-U.S. GAAP measures include net interest income, net interest margin, net revenue, operating profit, and efficiency ratio all on a fully taxable-equivalent basis, Tier 1 common equity to risk-weighted assets, tangible common equity to tangible assets, tangible equity to risk-weighted assets, tangible equity to tangible assets, and tangible book value. We believe that presenting these non-U.S. GAAP financial measures will provide information useful to investors in understanding our underlying operational performance, our business, and performance trends and facilitates comparisons with the performance of others in the banking industry.

We use net interest income on a taxable-equivalent basis in calculating various performance measures by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments assuming a 35% tax rate. Management believes this measure to be the preferred industry measurement of net interest income as it enhances comparability to net interest income arising from taxable and tax-exempt sources, and accordingly believes that providing this measure may be useful for peer comparison purposes.

In addition to capital ratios defined by banking regulators, we also consider various measures when evaluating capital utilization and adequacy, including Tier 1 common equity to risk-weighted assets, tangible common equity to tangible assets, tangible equity to tangible assets, and tangible equity to risk-weighted assets. These calculations are intended to complement the capital ratios defined by banking regulators for both absolute and comparative purposes. All of these measures exclude the ending balances of goodwill and other intangibles while certain of these ratios exclude preferred capital components. Because U.S. GAAP does not include capital ratio measures, we believe there are no comparable U.S. GAAP financial measures to these ratios. We believe these non-U.S. GAAP measures are relevant because they provide information that is helpful in assessing the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of our capitalization to other companies. However, because there are no standardized definitions for these ratios, our calculations may not be comparable with other companies, and the usefulness of these measures to investors may be limited.

Non-U.S. GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-U.S. GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation or as a substitute for analyses of results as reported under U.S. GAAP. As a result, we encourage readers to consider our Consolidated Financial Statements in their entirety and not to rely on any single financial measure.

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The following table reconciles Non-U.S. GAAP financial measures to U.S. GAAP:

Table 31

Non-U.S. GAAP Measures

(Amounts in thousands except per share data)

(Unaudited)

	Quarters ended
	2011									2010
	September 30			June 30			March 31			December 31			September 30
Taxable-equivalent interest income
U.S. GAAP net interest income	$	101,089		$	100,503		$	102,553		$	100,347		$	98,959
Taxable-equivalent adjustment		680			716			790			876			891
Taxable-equivalent net interest income (a)	$	101,769		$	101,219		$	103,343		$	101,223		$	99,850
Average Earnings Assets (b)	$	11,446,323		$	11,916,038		$	11,930,751		$	11,918,849		$	11,938,905
Net Interest Margin ((a)annualized) / (b)		3.49	%		3.36	%		3.46	%		3.33	%		3.28	%
Net Revenue
Taxable-equivalent net interest income (a)	$	101,769		$	101,219		$	103,343		$	101,223		$	99,850
U.S. GAAP non-interest income		27,635			21,592			23,627			34,865			23,360
Net revenue	$	129,404		$	122,811		$	126,970		$	136,088		$	123,210
Operating Profit
U.S. GAAP income before income taxes	$	21,075		$	15,338		$	13,253		$	17,898		$	12,807
Provision for loan and covered loan losses		32,615			31,093			37,578			35,166			41,435
Taxable-equivalent adjustment		680			716			790			876			891
Operating profit	$	54,370		$	47,147		$	51,621		$	53,940		$	55,133
Efficiency Ratio
U.S. GAAP non-interest expense (c)	$	75,034		$	75,664		$	75,349		$	82,148		$	68,077
Taxable-equivalent net interest income (a)	$	101,769		$	101,219		$	103,343		$	101,223		$	99,850
U.S. GAAP non-interest income		27,635			21,592			23,627			34,865			23,360
Net revenue (d)	$	129,404		$	122,811		$	126,970		$	136,088		$	123,210
Efficiency ratio (c) / (d)		57.98	%		61.61	%		59.34	%		60.36	%		55.25	%

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Non-U.S. GAAP Measures (cont.)

	Nine Months Ended September 30,
	2011			2010
Taxable-equivalent interest income
U.S. GAAP net interest income	$	304,145		$	300,610
Taxable-equivalent adjustment		2,187			2,700
Taxable-equivalent net interest income (a)	$	306,332		$	303,310
Average Earnings Assets (b)	$	11,762,642		$	11,998,420
Net Interest Margin ((a) annualized) / (b)		3.44	%		3.37	%
Net Revenue
Taxable-equivalent net interest income (a)	$	306,332		$	303,310
U.S. GAAP non-interest income		72,854			58,381
Net revenue	$	379,186		$	361,691
Operating Profit
U.S. GAAP income (loss) before income taxes	$	49,666		$	(17,834	)
Provision for loan and covered loan losses		101,286			159,375
Taxable-equivalent adjustment		2,187			2,700
Operating profit	$	153,139		$	144,241
Efficiency Ratio
U.S. GAAP non-interest expense (c)	$	226,047		$	217,450
Taxable-equivalent net interest income (a)	$	306,332		$	303,310
U.S. GAAP non-interest income		72,854			58,381
Net revenue (d)	$	379,186		$	361,691
Efficiency ratio (c) / (d)		59.61	%		60.12	%

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Non-U.S. GAAP Measures (cont.)

	2011									2010
	September 30			June 30			March 31			December 31			September 30
Tier 1 Common Capital
U.S. GAAP total equity	$	1,286,176		$	1,260,648		$	1,238,132		$	1,227,910		$	1,245,139
Trust preferred securities		244,793			244,793			244,793			244,793			244,793
Less: accumulated other comprehensive income, net of tax		46,051			32,535			19,121			20,078			48,776
Less: disallowed deferred tax assets		—			—			—			5,377			—
Less: goodwill		94,584			94,596			94,609			94,621			94,633
Less: other intangibles		15,715			16,089			16,464			16,840			17,242
Tier 1 risk-based capital		1,374,619			1,362,221			1,352,731			1,335,787			1,329,281
Less: preferred stock		240,020			239,642			239,270			238,903			238,542
Less: trust preferred securities		244,793			244,793			244,793			244,793			244,793
Less: noncontrolling interests		—			163			105			33			250
Tier 1 common capital (e)	$	889,806		$	877,623		$	868,563		$	852,058		$	845,696
Tangible Common Equity
U.S. GAAP total equity	$	1,286,176		$	1,260,648		$	1,238,132		$	1,227,910		$	1,245,139
Less: goodwill		94,584			94,596			94,609			94,621			94,633
Less: other intangibles		15,715			16,089			16,464			16,840			17,242
Tangible equity (f)		1,175,877			1,149,963			1,127,059			1,116,449			1,133,264
Less: preferred stock		240,020			239,642			239,270			238,903			238,542
Tangible common equity (g)	$	935,857		$	910,321		$	887,789		$	877,546		$	894,722
Tangible Assets
U.S. GAAP total assets	$	12,019,861		$	12,115,377		$	12,497,442		$	12,465,621		$	12,583,965
Less: goodwill		94,584			94,596			94,609			94,621			94,633
Less: other intangibles		15,715			16,089			16,464			16,840			17,242
Tangible assets (h)	$	11,909,562		$	12,004,692		$	12,386,369		$	12,354,160		$	12,472,090
Risk-weighted Assets (i)	$	10,614,411		$	10,518,850		$	10,903,625		$	11,080,051		$	10,850,399
Period-end Common Shares Outstanding (j)		71,789			71,808			71,428			71,327			71,386
Ratios:
Tier 1 common equity to risk-weighted assets (e) / (i)		8.38	%		8.34	%		7.97	%		7.69	%		7.79	%
Tangible equity to tangible assets (f) / (h)		9.87	%		9.58	%		9.10	%		9.04	%		9.09	%
Tangible equity to risk-weighted assets (f) / (i)		11.08	%		10.93	%		10.34	%		10.08	%		10.44	%
Tangible common equity to tangible assets (g) / (h)		7.86	%		7.58	%		7.17	%		7.10	%		7.17	%
Tangible book value (g) / (j)	$	13.04		$	12.68		$	12.43		$	12.30		$	12.53

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

As a continuing part of our financial strategy and in accordance with our asset/liability management policies, we attempt to manage the impact of fluctuations in market interest rates on our net interest income. This effort entails providing a reasonable balance between interest rate risk, credit risk, liquidity risk and maintenance of yield. Our asset/liability management policies also authorize us to enter into derivative instruments as a tool to further manage the interest rate exposure of the Bank’s balance sheet. We may manage interest rate risk by structuring the asset and liability characteristics of our balance sheet and/or by executing derivatives designated as accounting hedges.

Interest rate changes do not affect all categories of assets and liabilities equally or simultaneously. There are other factors that are difficult to measure and predict that would influence the effect of interest rate fluctuations on our Consolidated Statements of Income.

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In July 2011, we initiated the use of interest rate derivatives as part of our asset liability management strategy to hedge interest rate risk in our primarily floating-rate loan portfolio and, depending on market conditions, we may expand this program and enter into additional interest rate swaps.

The majority of our interest-earning assets are floating rate instruments. To manage the interest rate risk of our balance sheet, we have the ability to use a combination of financial instruments, including medium-term and short-term financings, variable-rate debt instruments, fixed rate loans and securities and interest rate swaps. Approximately 57% of the total loan portfolio is indexed to LIBOR, 23% of the total loan portfolio is indexed to the prime rate, and another 8% of the total loan portfolio otherwise adjusts with other reference interest rates. Of our floating-rate loans, 25% are subject to interest rate floors under the terms of the loan agreements, the majority of which are in effect at September 30, 2011 and are reflected in the interest sensitivity analysis below. Changes in market rates and the shape of the yield curve may give us the opportunity to make changes to our investment securities portfolio as part of our asset/liability management strategy.

We use a simulation model to estimate the potential impact of various interest rate changes on our income statement and our interest-earning asset and interest-bearing liability portfolios, assuming the size and nature of these portfolios remain constant throughout the twelve month measurement period. The simulation assumes that assets and liabilities accrue interest on their current pricing basis. Assets and liabilities then re-price based on current terms and assuming instantaneous parallel shifts in the applicable yield curves and remain at that new interest rate through the end of the measurement period. The model attempts to illustrate the potential change in annual net interest income if the foregoing occurred. The following table shows the estimated impact of an immediate change in interest rates as of September 30, 2011 and December 31, 2010.

Analysis of Net Interest Income Sensitivity

(Dollars in thousands)

	Immediate Change in Rates
	-50			+50			+100			+200			+300
September 30, 2011:
Dollar change	$	(12,025	)	$	16,000		$	32,154		$	64,363		$	99,696
Percent change		-3.3	%		4.4	%		8.8	%		17.7	%		27.4	%
December 31, 2010:
Dollar change	$	(8,800	)	$	12,245		$	25,144		$	53,152		$	84,492
Percent change		-2.3	%		3.1	%		6.5	%		13.7	%		21.7	%

The estimated impact to our net interest income over a one-year period is reflected in dollar terms and percentage change. As an example, this table illustrates that if there had been an instantaneous parallel shift in the yield curve of +100 basis points on September 30, 2011, net interest income would increase by $32.2 million or 8.8% over a twelve-month period, as compared to a net interest income increase of $25.1 million or 6.5% if there had been an instantaneous parallel shift of +100 basis points at December 31, 2010.

Changes in the effect on net interest income at September 30, 2011 compared to December 31, 2010 are due changes in the composition and nature of the repricing of interest rate-sensitive assets relative to rate-sensitive liabilities since year end. Interest rate sensitivity increased during the first nine months of 2011 due to several factors, primarily liability compositional changes. Non-interest sensitive deposits increased while rate sensitive deposits, such as money market deposits, decreased. Rate-sensitive liabilities mitigate rate-sensitive assets. Accordingly, as rate-sensitive liabilities decrease, less asset sensitivity is offset by the liabilities as a whole. Taken together, the asset composition was more rate sensitive than prior quarters, and less of the asset sensitivity was mitigated by rate-sensitive liabilities, producing an overall increase in asset sensitivity.

The preceding sensitivity analysis is based on numerous assumptions including: the nature and timing of interest rate levels including the shape of the yield curve, prepayments on loans and securities, pricing decisions on loans and deposits, reinvestment/replacement of asset and liability cash flows and others. While our assumptions are developed based upon current economic and local market conditions, we cannot make any assurances as to the predictive nature of these assumptions including how client preferences or competitor influences might change.

ITEM 4. CONTROLS AND PROCEDURES

At the end of the period covered by this report (the “Evaluation Date”), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and

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procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms.

There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2011, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On October 22, 2010, a lawsuit was filed in federal court in the Northern District of Illinois against the Company on behalf of a purported class of purchasers of our common stock between November 2, 2007 and October 23, 2009. Certain of our current and former executive officers and directors and firms that participated in the underwriting of our June 2008 and May 2009 public offerings of common stock were also named as defendants in the litigation. On January 25, 2011, the City of New Orleans Employees’ Retirement System and State-Boston Retirement System were together named as the lead plaintiff, and an amended complaint was filed on February 18, 2011. The amended complaint alleged various claims of securities law violations against certain of the named defendants relating to disclosures we made during the class period in filings under the Securities Act of 1933 and the Securities Exchange Act of 1934. The plaintiffs sought class certification, compensatory damages in an unspecified amount, costs and expenses, including attorneys’ fees, and rescission. The defendants filed a joint motion to dismiss seeking dismissal of all counts. On November 7, 2011, the court released its decision on defendants’ motion and dismissed all counts of the complaint with prejudice. The plaintiffs have 30 days from the date of this decision to file a notice of appeal, if any.

As of September 30, 2011, there were also various legal proceedings pending against the Company and its subsidiaries in the ordinary course of business. Management does not believe that the outcome of these proceedings will have, individually or in the aggregate, a material adverse effect on the Company’s results of operations, financial condition or cash flows.

ITEM 1A. RISK FACTORS

You should carefully consider the information discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010, regarding our business, financial condition or future results, together with the information set forth in this report. In addition to the “Risk Factors” disclosed in the Form 10-K, the cautionary statements regarding forward-looking statements, and other information set forth in this report, you should consider the following additional risks:

Downgrade of U.S. long-term credit rating and monetary and fiscal policy reactions may adversely affect the financial services industry and could negatively impact our results of operations and financial condition.

On August 5, 2011, Standard and Poor’s (“S&P”) downgraded the United States long-term credit rating from its AAA rating to AA+, with a negative outlook indicating that a further rating downgrade is possible. This downgrade, or further downgrades if they were to occur, could affect the market for securities issued or guaranteed by the federal government or its agencies, and we could suffer a loss in the fair value of our investment portfolio that we record through accumulated other comprehensive income on our balance sheet. The majority of our investment portfolio is classified as available-for-sale and is predominantly invested in U.S. Treasury securities, U.S. government agency securities and residential mortgage-backed securities issued or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. Deterioration in the valuation or liquidity of our investment securities could lead counterparties to require additional collateral for our borrowings or derivative obligations. Following the ratings downgrade by S&P, various federal banking agencies issued a joint release indicating that for regulatory purposes the downgrade does not affect the risk weightings assigned to securities issued or guaranteed by the U.S. Government, its agencies and U.S. Government-sponsored enterprises. At this time, we cannot assess the likelihood or severity of any further downgrade or the potential consequences these factors may have on our capital position, financial condition or future earnings of the Company.

97

Global economic uncertainty and the potential for a deterioration in the European sovereign debt crisis may adversely affect the financial services industry and could negatively impact our results of operations and financial condition.

Continuing uncertainty in the economic, political and financial markets and the ongoing sovereign debt crisis in Europe could impact our customers and could negatively affect our credit portfolio and liquidity position. There have been recent periods of extreme volatility in the global financial markets, and the financial turmoil and uncertainty with respect to the euro zone crisis could threaten the stability of the global banking system. Such disruption could impact the Company’s financial condition to the extent it causes stress on the United States financial services industry. At this time, we cannot predict the current or future impact this may have on our results of operations and financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

In connection with our participation in the TARP CPP, our ability to repurchase shares of our common stock is subject to the applicable restrictions of the CPP following the January 2009 sale of the preferred stock to the Treasury under the CPP. The restrictions on repurchases will not affect our ability to repurchase shares in connection with the administration of our employee benefit plans as such transactions are in the ordinary course and consistent with our past practice.

The following table summarizes purchases of our common stock we made during the quarter ended September 30, 2011 in the administration of our share-based compensation plans. Under the terms of these plans, we accept shares of common stock from plan participants if they elect to surrender previously-owned shares upon exercise of options to cover the exercise price or, in the case of both restricted shares of common stock or stock options, the withholding of shares to satisfy tax withholding obligations associated with the vesting of restricted shares or exercise of stock options.

Issuer Purchases of Equity Securities

	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plan or Programs
July 1 – July 31, 2011		238	$	14.08		—		—
August 1 – August 31, 2011		2,643		10.31		—		—
September 1 – September 30, 2011		10,252		7.78		—		—
Total		13,133	$	8.41		—		—

⁽¹⁾  Does not include any shares forfeited by departing employees that were surrendered pursuant to the terms of non-compete provisions.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [Removed and Reserved]

ITEM 5. OTHER INFORMATION

None.

98

ITEM 6. EXHIBITS

Exhibit Number	Description of Documents
3.1	Amended and Restated Certificate of Incorporation of PrivateBancorp, Inc., dated June 24, 1999, as amended, is incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q (File No. 000-25887) filed on May 14, 2003.
3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of PrivateBancorp, Inc., as amended, dated June 17, 2009, is incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-34066) filed on June 19, 2009.
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of PrivateBancorp, Inc., as amended, dated June 15, 2010, is incorporated herein by reference to Exhibit 3.3 to the Quarterly Report on Form 10-Q (File No. 001-34066) filed on August 9, 2010.
3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of PrivateBancorp, Inc., as amended, dated June 17, 2009, amending and restating the Certificate of Designations of the Series A Junior Non-Voting Preferred Stock of PrivateBancorp, Inc., is incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K (File No. 001-34066) filed on June 19, 2009.
3.5	Certificate of Designations of Fixed Rate Cumulative Perpetual Preferred Stock, Series B, dated January 28, 2009 is incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-34066) filed on February 3, 2009.
3.6	Amended and Restated By-laws of PrivateBancorp, Inc. are incorporated herein by reference to Exhibit 3.5 to the Annual Report on Form 10-K (File No. 001-34066) filed on March 1, 2010.
4.1	Certain instruments defining the rights of the holders of certain securities of PrivateBancorp, Inc. and certain of its subsidiaries, none of which authorize a total amount of securities in excess of 10% of the total assets of PrivateBancorp, Inc. and its subsidiaries on a consolidated basis, have not been filed as exhibits. PrivateBancorp, Inc. hereby agrees to furnish a copy of any of these agreements to the Securities and Exchange Commission upon request.
4.2	Form of Preemptive and Registration Rights Agreement dated as of November 26, 2007 is incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-34066) filed on November 27, 2007.
4.3	Amendment No. 1 to Preemptive and Registration Rights Agreement dated as of June 17, 2009 by and among PrivateBancorp, Inc., GTCR Fund IX/A, L.P., GTCR Fund IX/B, L.P., and GTCR Co-Invest III, L.P., is incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-34066) filed on June 19, 2009.
4.4	Warrant dated January 30, 2009, as amended, issued by PrivateBancorp, Inc. to the United States Department of the Treasury to purchase shares of common stock of PrivateBancorp, Inc. is herein incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 001-34066) filed on February 3, 2009.
10.1 (a)	Summary of Compensation Arrangement with Norman R. Bobins, adopted July 2011, effective as of January 1, 2011.
10.2 (a)	Employee Leasing Agreement by and between The PrivateBank and Trust Company and Norman Bobins Consulting LLC, entered into October 2011, effective as of January 1, 2011.
11	Statement re: Computation of Per Share Earnings - The computation of basic and diluted earnings per share is included in Note 12 of the Company’s Notes to Consolidated Financial Statements included in “Item 7. Financial Statements” of this report on Form 10-Q.
12  (a)	Statement re: Computation of Ratio of Earnings to Fixed Charges.

99

15.1 (a)	Acknowledgment of Independent Registered Public Accounting Firm.
31.1 (a)	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 (a)	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(1) (a) (b)	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1 (b)	Report of Independent Registered Public Accounting Firm.
101 (a) (c)	The following financial statements from the PrivateBancorp, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, filed on November 8, 2011, formatted in Extensive Business Reporting Language (XBRL): (i) consolidated statements of financial condition, (ii) consolidated statements of income, (iii) consolidated statement of changes in equity, (iv) consolidated statements of cash flows, and (v) the notes to consolidated financial statements.

^(a)  Filed herewith.

^(b)  This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

^(c)  As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

100

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

PrivateBancorp, Inc.

/s/    LARRY D. RICHMAN        

Larry D. Richman

President and Chief Executive Officer

/s/    KEVIN M. KILLIPS        

Kevin M. Killips

Chief Financial Officer and Principal Financial Officer

Date: November 8, 2011

101

EX-10.1

Exhibit 10.1

Revised July 2011

Norman R. Bobins

Revised Compensation Arrangement

To be Effective as of 1/1/2011

Existing positions	Director, PrivateBancorp, Inc. (since July 2008); Director and Chairman, The PrivateBank and Trust Company (since July 2008)
Duties	In addition to Board oversight responsibilities, generally available to provide advice and counsel to CEO on banking matters and strategies; participate in new business development and advise lending team regarding retention and expansion of client relationships; attend various Bank oversight committee meetings from time to time to stay abreast of business developments; participate in meetings with regulators; serve as chair of CRA Committee; representing Bank in civic, community and charitable activities; maintain a presence on behalf of the Bank in industry trade associations and participate from time to time in legislative or regulatory initiatives as requested; other duties commensurate with position of Chairman of the Bank as reasonably requested by Board or CEO.
Term of Arrangement	Current director terms expire at 2012 annual meeting of stockholders; Compensation arrangement to continue if re-elected so long as serving as Bank chair, subject to annual review (and adjustment as deemed appropriate) by Board in connection with annual review of director compensation
Cash Compensation	Annual cash compensation of $550,000 •    Components:        $50,000    director retainer          50,000    Bank chair retainer    +  450,000   annual fees, payable in equal monthly installments •    Total:     $550,000
Director Equity	Receives same annual grant as other outside directors ($50,000 annual RSU award currently)

Office Space	Office space available within company facilities to be made available for Bobins’ use for the convenience of the Bank and Bank executives to facilitate ease of interaction with team and Bank clients and prospects; beneficial to promote the association of Bobins with the Bank and helps maximize the value of the Bank relationship with Bobins. No commitment to provide current office space if alternative utilization desired; no commitment to provide office space outside of Bank facilities.
Other Benefits	No other perqs or benefits to be provided. Previous arrangement included Company paid country clubs dues, parking and three full-time staff plus a driver.
Employee Leasing Contract	Company to enter into employee leasing contract to be effective as of January 1, 2011, with Norman Bobins Consulting LLC providing for the lease to Bobins of services of three company-paid employees currently supporting him who would continue to be employed by the company in a similar capacity. Bobins will make lease payments to the company based on actual cost so that Company fully reimbursed for all related employee expense. Employees shall be eligible to participate in company benefit plans on same terms for similarly situated employees. Either party may terminate on 60 days notice.

2

EX-10.2

Exhibit 10.2

EMPLOYEE LEASING AGREEMENT

THIS AGREEMENT is entered into effective as of January 1, 2011, by and between The PrivateBank and Trust Company (“Bank”) and Norman Bobins Consulting LLC (“NBC”).

WHEREAS, Norman R. Bobins, the owner and manager of NBC, serves as chairman of the Bank and in connection therewith has been provided office space within existing Bank’s premises to facilitate his services to the Bank and availability and access to Bank management for the convenience of the Bank;

WHEREAS, NBC is engaged in the business of providing various consulting services, including services to the Bank, and desires to lease employees to perform administrative and other tasks in connection with the various business and other activities of NBC and its management; and

WHEREAS, Bank is willing to lease to NBC certain employees of the Bank under the terms specified herein; and

NOW, THEREFORE, IN CONSIDERATION of the mutual agreements and covenants contained herein, NBC and Bank agree as follows:

1. Lease of Employees. During the term of this Agreement:

(a) Bank will use commercially reasonable efforts to supply to NBC the services of the persons previously identified and mutually agreed upon, or other qualified personnel reasonably acceptable to NBC (hereafter “Assigned Personnel”). Assigned Personnel shall work in suitable office space conveniently located in existing Bank facilities while this Agreement is in effect.

(b) Bank will use commercially reasonable efforts to employ each of the Assigned Personnel for so long as NBC continues to desire such services hereunder, and shall maintain a personnel file and personnel records for Assigned Personnel. All Assigned Personnel shall be considered employees of Bank. Bank shall assume sole and exclusive responsibility for the payment of wages to Assigned Personnel. Bank shall, with respect to said personnel, be responsible for withholding federal, state and local income taxes, withholding and paying over the employee share, and paying the employer share, of Social Security and Medicare taxes, unemployment insurance contributions, and any other payroll-related taxes required by law. Bank shall be responsible for maintaining workers’ compensation insurance coverage for Assigned Personnel in an amount and under such terms as required by state law.

(c) Assigned Personnel will be employed by Bank upon terms substantially consistent with similarly situated employees, it being understood and agreed that Bank will have no obligation to provide raises or make any bonus or equity awards or other discretionary payments to the Assigned Personnel. Bank will consult with NBC in advance of any such awards or payments.

(d) NBC shall reimburse Bank for all payments and expenses incurred by Bank in connection with its employment of the Assigned Personnel, including payroll, bonus, overtime, severance, benefit and other payments or awards, as well as the employer share of Social Security and Medicare taxes, unemployment insurance contributions, and any other payroll-related taxes paid by the Bank with respect to the Assigned Personnel. In addition, NBC shall reimburse the Bank for any out-of-pocket expenses incurred by the Assigned Personnel on behalf of NBC. The Bank shall invoice NBC for such amounts on a monthly basis and NBC shall make prompt payment to the Bank of amounts owing through direct debit authorizations or other arrangements mutually agreed upon. NBC shall not pay Assigned Personnel directly without Bank’s prior written consent.

(e) NBC shall comply with all applicable federal, state and local laws in dealings with Assigned Personnel. Bank shall incur no liability for any violation or alleged violation of law or regulation by NBC.

2. Term of Agreement. Unless earlier terminated by mutual agreement of the parties, this Agreement shall continue so long as NBC serves as a director of the Bank and PrivateBancorp, Inc. In addition, either party may terminate this agreement upon 60 days prior notice to the other.

3. Entire Agreement. This Agreement constitutes and represents the entire Agreement between the parties hereto and supersedes any prior understandings or agreements, written or oral, between the parties hereto respecting the subject matter herein. This Agreement may only be amended by an agreement in writing executed by all of the parties hereto. The unenforceability, invalidity or illegality of any provision of this Agreement shall not render the other provisions unenforceable, invalid or illegal.

4. Assignment. Neither party shall assign any of its rights or obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld. Nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under this Agreement on any person or party other than the parties hereto and their respective successors and assigns.

5. Waiver. No waiver of any provision of this Agreement shall be effective unless it is in writing, signed by the party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which is related and shall not be deemed to be a continuing or further waiver.

6. Severability. Each and every covenant and agreement herein shall be separate and independent from any other and the breach of any covenant or agreement shall in no way or manner discharge or relieve the performance of any other covenant or agreement.

7. Headings. Captions and articles headings contained in this Agreement are for convenience and reference only and in now any define, describe, extend or limit the scope or intent of this Agreement nor the intent of any provision hereof.

8. Notice. Any and all notices or other communications required or permitted to be delivered hereunder will be deemed properly delivered if (a) delivered personally, (b) mailed by first class mail, postage prepaid, or (c) sent by next-day or overnight mail or delivery, to the parties as set forth below:

If to the Company, to:	The PrivateBank and Trust Company
	120 S. LaSalle Street
	Chicago, Illinois 60603
	Attention: Jennifer R. Evans, General Counsel
If to NBC, to:	Norman R. Bobins
	70 West Madison
	Chicago Illinois 60603

Either party may change the name and address of the designee to whom notice will be sent by giving written notice of such change to the other party.

12. Relationship. Both parties agree that this Agreement is not intended to create nor shall it be deemed or construed to create any relationship between the parties other than that of independent entities contracting with each other solely for the purpose of effecting the provisions of this Agreement. Neither the parties hereto, nor any of their respective employees, shall be construed to be the agent, employer, employee or representative of the other, nor will either party have any express or implied right of authority to assume or create any obligation or responsibility on behalf of or in the name of the other party.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

The PrivateBank and Trust Company		Norman Bobins Consulting, LLC
By:	/s/ Kevin Killips	/s/ Norman R. Bobins
Name:	Kevin Killips	Norman R. Bobins
Title:	CFO

EX-12

EXHIBIT 12

PrivateBancorp, Inc.

Computation of Earnings to Fixed Charges

(dollars in thousands)

	Three Months Ended
	September 30,		June 30,		March 31,		Year Ended December 31
	2011		2011		2011		2010		2009			2008			2007
Earnings:
Income (loss) before income taxes	$	21,075	$	15,338	$	13,253	$	64	$	(50,380	)	$	(153,993	)	$	13,969
Fixed charges, excluding interest on deposits		5,929		6,045		6,310		32,931		42,112			38,277			26,841
Earnings excluding interest on deposits	$	27,004	$	21,383	$	19,563	$	32,995	$	(8,268	)	$	(115,716	)	$	40,810
Interest on deposits		11,876		13,197		13,996		74,037		111,616			176,710			154,045
Earnings including interest on deposits	$	38,880	$	34,580	$	33.559	$	107,032	$	103,348		$	60,994		$	194,855
Fixed Charges:
Interest expense, excluding interest on deposits	$	5,929	$	6,045	$	6,310	$	32,931	$	42,112		$	38,277		$	26,841
Interest on deposits		11,876		13,197		13,996		74,037		111,616			176,710			154,045
Total fixed charges, including interest on deposits	$	17,805	$	19,242	$	20,306	$	106,968	$	153,728		$	214,987		$	180,886
Fixed Charges and Preferred Stock Dividends:
Interest expense, excluding interest on deposits	$	5,929	$	6,045	$	6,310	$	32,931	$	42,112		$	38,277		$	26,841
Preferred stock dividends		3,426		3,419		3,415		13,607		12,443			546			107
Total fixed charges and preferred stock dividends, excluding interest on deposits	$	9,355	$	9,464	$	9,725	$	46,538	$	54,555		$	38,823		$	26,948
Interest on deposits		11,876		13,197		13,996		74,037		111,616			176,710			154,045
Total fixed charges and preferred stock dividends, including interest on deposits	$	21,231	$	22,661	$	23,721	$	120,575	$	166,171		$	215,533		$	180,993

	Three Months Ended
	September 30,			June 30,			March 31,			Year Ended December 31
	2011			2011			2011			2010			2009				2008				2007
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits		4.55	X		3.54	X		3.10	X		1.00	X		(0.20	)	X		(3.02	)	X		1.52	X
Including interest on deposits		2.18	X		1.80	X		1.65	X		1.00	X		0.67		X		0.28		X		1.08	X
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends:
Excluding interest on deposits		2.89	X		2.26	X		2.01	X		0.71	X		(0.15	)	X		(2.98	)	X		1.51	X
Including interest on deposits		1.83	X		1.53	X		1.41	X		0.89	X		0.62		X		0.28		X		1.08	X

* The earnings for the years ended December 31, 2009 and December 31, 2008 (excluding deposit interest) were inadequate to cover total fixed charges for the year. The coverage deficiencies for 2009 and 2008 were $61.2 million and $22.7 million excluding preferred dividends, respectively, and $73.7 million and $23.3 million including preferred dividends, respectively.

EX-15.1

Exhibit 15.1

ACKNOWLEDGEMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

PrivateBancorp, Inc.

We are aware of the incorporation by reference in the following documents of our report dated November 8, 2011 relating to the unaudited consolidated interim financial statements of PrivateBancorp, Inc. that are included in its Form 10-Q for the period ended September 30, 2011:

• Registration Statement (Form S-8 No. 333-174840) pertaining to the PrivateBancorp, Inc. 2011 Incentive Compensation Plan, PrivateBancorp, Inc. 2007 Long-Term Incentive Compensation Plan, PrivateBancorp, Inc. Strategic Long-Term Incentive Compensation Plan, PrivateBancorp, Inc. Incentive Compensation Plan, PrivateBancorp, Inc. Amended and Restated Stock Incentive Plan and PrivateBancorp, Inc. Deferred Compensation Plan,

• Registration Statement (Form S-8 No. 333-166070) pertaining to the PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan, and

• Registration Statement (Form S-3 No. 333-174842) relating to the registration of debt securities, preferred stock, common stock, warrants, depository shares, purchase contracts, and units, and the related Prospectus and Prospectus Supplements.

/s/ Ernst & Young

ERNST & YOUNG LLP

Chicago, Illinois

November 8, 2011

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Larry D. Richman, President and Chief Executive Officer of PrivateBancorp, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of PrivateBancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2011

/s/ Larry D. Richman

Larry D. Richman

President and Chief Executive Officer

PrivateBancorp, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Kevin M. Killips, Chief Financial Officer of PrivateBancorp, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of PrivateBancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2011

/s/ Kevin M. Killips

Kevin M. Killips

Chief Financial Officer

PrivateBancorp, Inc.

EX-32.1

Exhibit 32.1

The following certification is provided by the undersigned Chief Executive Officer and Chief Financial Officer of PrivateBancorp, Inc. On the basis of such officer’s knowledge and belief for the sole purpose of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

CERTIFICATION

In connection with the Quarterly Report of PrivateBancorp, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2011 as filed with the Securities and Exchange Commission on November 8, 2011 (the “Report”), the undersigned, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Larry D. Richman
Name:	Larry D. Richman
Title:	President and Chief Executive Officer
Date:	November 8, 2011
By:	/s/ Kevin M. Killips
Name:	Kevin M. Killips
Title:	Chief Financial Officer
Date:	November 8, 2011

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request. This certification accompanies the Report and shall not be treated as having been filed as part of the Report.

EX-99.1

Exhibit 99.1

Report of Independent Registered Public Accounting Firm

The Board of Directors

PrivateBancorp, Inc.

We have reviewed the accompanying consolidated statement of financial condition of PrivateBancorp, Inc. and subsidiaries (“the Company”) as of September 30, 2011, the related consolidated statements of income for the three-month and nine-month periods ended September 30, 2011 and 2010, and the consolidated statements of changes in equity and cash flows for the nine-month periods ended September 30, 2011 and 2010. These consolidated financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquires of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition of PrivateBancorp, Inc. and subsidiaries as of December 31, 2010, and the related consolidated statements of income, changes in equity, and cash flows for the year then ended, not presented herein, and in our report dated March 1, 2011, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of financial condition as of December 31, 2010, is fairly stated, in all material respects, in relation to the consolidated statement of financial condition from which it has been derived.

/s/ Ernst & Young

ERNST & YOUNG LLP

Chicago, Illinois

November 8, 2011

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Derivative Instruments (Risk Participation Agreements) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2011	Dec. 31, 2010
Fair value of written RPAs	$ (15)	$ (9)
Range of remaining terms to maturity (in years)	Less than 1 to 4	Less than 1 to 4
Maximum potential amount of future undiscounted payments	$ 1,914	$ 2,413
Percent of maximum potential amount of future undiscounted payments covered by proceeds from liquidation of pledged collateral	66.00%	80.00%
Maximum [Member]
Range of remaining terms to maturity (in years)	4	4
Range of assigned internal risk ratings	5	5
Minimum [Member]
Range of remaining terms to maturity (in years)	1	1
Range of assigned internal risk ratings	3	3

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Loans (Schedule Of Impaired Loans Excluding Covered Assets) (Details) (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010	Sep. 30, 2010
Unpaid Contractual Principal Balance	$ 472,196		$ 517,111
Recorded Investment With No Specific Reserve	201,102		189,146
Recorded Investment With Specific Reserve	209,975		264,310
Total Recorded Investment	411,077	[1],[2]	453,456	431,815	[1],[2]
Specific Reserve	72,191	[1],[2]	70,971	68,716	[1],[2]
Commercial [Member]
Unpaid Contractual Principal Balance	127,933		98,246
Recorded Investment With No Specific Reserve	85,084		33,879
Recorded Investment With Specific Reserve	33,758		56,284
Total Recorded Investment	118,842		90,163
Specific Reserve	17,842		18,015
Commercial Real Estate [Member]
Unpaid Contractual Principal Balance	229,360		292,138
Recorded Investment With No Specific Reserve	85,012		118,190
Recorded Investment With Specific Reserve	116,859		144,553
Total Recorded Investment	201,871		262,743
Specific Reserve	38,091		38,003
Construction [Member]
Unpaid Contractual Principal Balance	39,639		52,055
Recorded Investment With No Specific Reserve			11,437
Recorded Investment With Specific Reserve	29,997		26,314
Total Recorded Investment	29,997		37,751
Specific Reserve	7,647		3,778
Residential Real Estate [Member]
Unpaid Contractual Principal Balance	20,153		17,186
Recorded Investment With No Specific Reserve	12,296		4,413
Recorded Investment With Specific Reserve	6,774		11,226
Total Recorded Investment	19,070		15,639
Specific Reserve	1,316		1,046
Home Equity [Member]
Unpaid Contractual Principal Balance	15,133		8,575
Recorded Investment With No Specific Reserve	1,814
Recorded Investment With Specific Reserve	11,802		8,195
Total Recorded Investment	13,616		8,195
Specific Reserve	2,345		2,614
Personal [Member]
Unpaid Contractual Principal Balance	39,978		48,911
Recorded Investment With No Specific Reserve	16,896		21,227
Recorded Investment With Specific Reserve	10,785		17,738
Total Recorded Investment	27,681		38,965
Specific Reserve	$ 4,950		$ 7,515

[1] Refer to Note 4 for additional information regarding impaired loans.

[2] Refer to Note 6 for a detailed discussion regarding covered assets.

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Consolidated Statements of Financial Condition (Parenthetical) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	Sep. 30, 2011	Dec. 31, 2010
Securities held-to-maturity, at fair value	$ 272.9
Series B Preferred Stock [Member]
Preferred stock, Shares authorized	1,000	1,000
Preferred stock, Liquidation value	$ 1,000	$ 1,000
Preferred stock, Shares issued	244	244
Preferred stock, Shares outstanding	244	244
Treasury shares
Common Stock [Member]
Common stock, Stated value per share	$ 1.00	$ 1.00
Common stock, Shares authorized	174,000	174,000
Common stock, Shares issued	68,955	68,443
Common stock, Shares outstanding	68,253	67,791
Treasury shares	702	652
Nonvoting Common Stock [Member]
Common stock, Stated value per share	$ 1.00	$ 1.00
Common stock, Shares authorized	5,000	5,000
Common stock, Shares issued	3,536	3,536
Common stock, Shares outstanding	3,536	3,536
Treasury shares

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010
Interest Income
Loans, including fees	$ 102,174		$ 105,608		$ 310,212		$ 329,509
Federal funds sold and other short-term investments	231		376		966		1,584
Securities:
Taxable	15,196		16,996		46,154		48,863
Exempt from Federal income taxes	1,293		1,661		4,166		5,131
Total interest income	118,894		124,641		361,498		385,087
Interest Expense
Interest-bearing demand deposits	625		675		1,854		2,446
Savings deposits and money market accounts	5,356		8,512		18,100		26,994
Brokered and time deposits	5,895		8,130		19,115		29,091
Short-term borrowings	466		1,297		1,859		4,126
Long-term debt	5,463		7,068		16,425		21,820
Total interest expense	17,805		25,682		57,353		84,477
Net interest income	101,089		98,959		304,145		300,610
Provision for loan and covered loan losses	32,615		41,435		101,286		159,375
Net interest income after provision for loan and covered loan losses	68,474		57,524		202,859		141,235
Non-interest Income
Trust and Investments	4,452		4,306		13,834		13,566
Mortgage banking	1,565		2,790		3,671		6,708
Capital markets products	5,510		3,104		13,870		7,495
Treasury management	5,016		4,406		14,640		12,295
Loan and credit related fees	5,413		4,236		16,601		11,817
Other income, service charges, and fees	1,309		1,489		4,831		3,627
Net securities gains	4,370		3,029		5,407		2,873
Total non-interest income	27,635		23,360		72,854		58,381
Non-interest Expense
Salaries and employee benefits	38,841		34,412		116,034		111,286
Net occupancy expense	7,515		7,508		22,592		22,550
Technology and related costs	2,856		2,310		8,246		7,777
Marketing	2,218		2,039		6,661		6,504
Professional services	2,434		2,708		7,080		9,911
Outsourced servicing costs	1,918		2,038		5,924		5,857
Net foreclosed property expenses	7,129		3,075		20,920		8,164
Postage, telephone, and delivery	944		779		2,763		2,610
Insurance	5,393		7,113		17,825		18,186
Loan and collection expense	2,931		3,405		9,731		10,594
Other expenses	2,855		2,690		8,271		14,011
Total non-interest expense	75,034		68,077		226,047		217,450
Income (loss) before income taxes	21,075		12,807		49,666		(17,834)
Income tax provision (benefit)	7,593		4,786		16,192		(7,656)
Net income (loss)	13,482		8,021		33,474		(10,178)
Net income attributable to noncontrolling interests	33		71		163		217
Net income (loss) attributable to controlling interests	13,449		7,950		33,311		(10,395)
Preferred stock dividends and discount accretion	3,426		3,405		10,260		10,198
Net income (loss) available to common stockholders	$ 10,023		$ 4,545		$ 23,051		$ (20,593)
Per Common Share Data
Basic	$ 0.14		$ 0.06		$ 0.32		$ (0.29)
Diluted	$ 0.14		$ 0.06		$ 0.32		$ (0.29)
Common dividends per share	$ 0.01		$ 0.01		$ 0.03		$ 0.03
Weighted-average common shares outstanding	70,479	[1]	70,067	[1]	70,418	[1]	69,999	[1]
Weighted-average diluted common shares outstanding	70,621	[1]	70,097	[1]	70,682	[1]	69,999	[1]

[1] Due to the net loss available to common stockholders reported for the nine months ended September 30, 2010, all potentially dilutive common stock equivalents were excluded from the diluted net loss per share computation as their inclusion would have been antidilutive.

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Junior Subordinated Deferrable Interest Debentures Held By Trusts That Issued Guaranteed Capital Debt Securities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011		Dec. 31, 2010
Ownership percentage	100.00%
Total of junior subordinated debentures held by the trusts	$ 244,800
Private Bancorp Statutory Trust II [Member]
Total of junior subordinated debentures held by the trusts	$ 51,547	[1]	$ 51,547	[1]

[1] The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at maturity or their earlier redemption. Subject to restrictions relating to our participation in the U.S. Treasury's Troubled Asset Relief Program's Capital Purchase Program ("TARP CPP"), the Debentures are redeemable in whole or in part prior to maturity at any time after the dates shown in the table, and earlier at our discretion if certain conditions are met, and, in any event, only after we have obtained Federal Reserve approval, if then required under applicable guidelines or regulations.

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Loans (Troubled Debt Restructured Loans Outstanding) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Accruing Interest [Member]
Troubled debt restructured loans outstanding	$ 106,330	$ 87,576
Accruing Interest [Member] | Commercial [Member]
Troubled debt restructured loans outstanding	50,153	8,017
Accruing Interest [Member] | Commercial Real Estate [Member]
Troubled debt restructured loans outstanding	41,083	60,019
Accruing Interest [Member] | Construction [Member]
Troubled debt restructured loans outstanding		4,348
Accruing Interest [Member] | Residential Real Estate [Member]
Troubled debt restructured loans outstanding	1,063	798
Accruing Interest [Member] | Personal [Member]
Troubled debt restructured loans outstanding	14,031	14,394
Nonaccrual [Member]
Troubled debt restructured loans outstanding	91,169	65,281
Nonaccrual [Member] | Commercial [Member]
Troubled debt restructured loans outstanding	33,548	13,152
Nonaccrual [Member] | Commercial Real Estate [Member]
Troubled debt restructured loans outstanding	39,423	33,123
Nonaccrual [Member] | Construction [Member]
Troubled debt restructured loans outstanding	4,018
Nonaccrual [Member] | Residential Real Estate [Member]
Troubled debt restructured loans outstanding	3,613	1,350
Nonaccrual [Member] | Personal [Member]
Troubled debt restructured loans outstanding	8,718	1,229
Home Equity [Member]
Troubled debt restructured loans outstanding	$ 1,849	$ 16,427

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Commitments, Guarantees, And Contingent Liabilities (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2011 months	Sep. 30, 2011 years months
Reserve for unfunded commitments, included in other liabilities	$ 7,000,000	$ 7,000,000
Unamortized fees associated with standby letters of credit, included in other liabilities	1,000,000	1,000,000
Remaining weighted-average term, standby letters of credit	14	14
Maximum potential future payments guaranteed, third-party settlement	2,600,000	2,600,000
Loss from limited recourse provisions	$ 0	$ 0
Maximum [Member]
Remaining actual lives, standby letters of credit	18	18
Minimum [Member]
Remaining actual lives, standby letters of credit	1	1

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Estimated Fair Value Of Financial Instruments (Summary Of The Difference Between The Aggregate Fair Value And Remaining Principle Balance In Mortgage Loans Held For Sale) (Details) (USD $) In Thousands	Sep. 30, 2011
Mortgage loans held for sale	$ 24,126
Aggregate Fair Value [Member]
Mortgage loans held for sale	24,126	[1]
Difference [Member]
Mortgage loans held for sale	16	[1]
Aggregate Unpaid Principal Balance [Member]
Mortgage loans held for sale	$ 24,110	[1]

[1] The change in fair value is reflected in mortgage banking non-interest income.

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Estimated Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2011

Estimated Fair Value Of Financial Instruments

Estimated Fair Value Of Financial Instruments

16. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

We measure, monitor, and disclose certain of our assets and liabilities on a fair value basis. Fair value is used on a recurring basis to account for securities available-for-sale, mortgage loans held for sale, derivative assets, derivative liabilities, other assets, and other liabilities. In addition, fair value is used on a non-recurring basis to apply lower-of-cost-or-market accounting to foreclosed real estate and other loans held for sale, evaluate assets or liabilities for impairment, including collateral-dependent impaired loans, and for disclosure purposes. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, we use various valuation techniques and input assumptions when estimating fair value.

U.S. GAAP requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value into three broad levels based on the reliability of the input assumptions. The hierarchy gives the highest priority to level 1 measurements and the lowest priority to level 3 measurements. The three levels of the fair value hierarchy are defined as follows:

• Level 1 – Unadjusted quoted prices for identical assets or liabilities traded in active markets.

• Level 2 – Observable inputs other than level 1 prices, such as quoted prices for similar instruments; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of where an asset or liability falls within the hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Valuation Methodology

We believe our valuation methods are appropriate and consistent with other market participants. However, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value. Additionally, the methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

The following describes the valuation methodologies we use for assets and liabilities measured at fair value, including the general classification of the assets and liabilities pursuant to the valuation hierarchy.

Securities Available-for-Sale – Securities available-for-sale include U.S. Treasury, collateralized mortgage obligations, residential mortgage-backed securities, state and municipal securities, and foreign sovereign debt. Substantially all available-for-sale securities are fixed income instruments that are not quoted on an exchange, but may be traded in active markets. The fair value of these securities is based on quoted market prices obtained from external pricing services or dealer market participants where trading in an active market exists. In obtaining such data from external pricing services, we have evaluated the methodologies used to develop the fair values in order to determine whether such valuations are representative of an exit price in our principal markets. The principal markets for our securities portfolio are the secondary institutional markets, with an exit price that is predominantly reflective of bid level pricing in those markets. U.S. Treasury securities have been classified in level 1 of the valuation hierarchy. Virtually all other remaining securities are classified in level 2 of the valuation hierarchy.

Mortgage Loans Held for Sale – Mortgage loans held for sale represent mortgage loan originations intended to be sold in the secondary market. On August 1, 2011, we elected the fair value option for mortgage loans originated with the intention of selling to a third party bank that are originated as of or subsequent to this date. The election of the fair value option aligns the accounting for these loans with the related mortgage banking derivatives used to economically hedge them. These mortgage loans are measured at fair value as of each reporting date, with changes in fair value recognized through mortgage banking non-interest income. The fair value for mortgage loans held for sale is determined based on a variety of factors, including quoted market rates and our judgment of other relevant market conditions. Mortgage loans originated with the intention of selling to a third party bank prior to August 1, 2011 were accounted for at the lower of cost or fair value. Mortgage loans held for sale are classified in level 3 of the valuation hierarchy.

Other Loans Held for Sale – Other loans held for sale represent other loans that management has an active plan to sell. Other loans held for sale are accounted for at the lower of cost or fair value, which is determined based on a variety of factors, including quoted market rates and our judgment of other relevant market conditions. Other loans held for sale are classified in level 3 of the valuation hierarchy.

Collateral-Dependent Impaired Loans – We do not record loans at fair value on a recurring basis. However, periodically, we record nonrecurring adjustments to reduce the carrying value of loans based on fair value measurement. Loans for which it is probable that payment of interest or principal will not be made in accordance with the contractual terms of the original loan agreement are considered impaired. Impaired loans for which repayment of the loan is expected to be provided solely by the underlying collateral requires classification in the fair value hierarchy. We measure the fair value of collateral-dependent impaired loans based on the fair value of the collateral securing these loans. Substantially all collateral-dependent impaired loans are secured by real estate with the fair value generally determined based upon appraisals performed by a certified or licensed appraiser using inputs such as absorption rates, capitalization rates and comparables. We also consider other factors or recent developments that could result in adjustments to the collateral value estimates indicated in the appraisals. Accordingly, fair value estimates for collateral-dependent impaired loans are classified in level 3 of the valuation hierarchy. The carrying value of impaired loans and the related valuation allowance are disclosed in Note 4.

Other Real Estate Owned ("OREO") – OREO is valued on a nonrecurring basis using third party appraisals of each property and our judgment of other relevant market conditions and is classified in level 3 of the valuation hierarchy.

Covered Assets-Foreclosed Real Estate – Covered assets-foreclosed real estate is valued on a nonrecurring basis using third party appraisals of each property and our judgment of other relevant market conditions and is classified in level 3 of the valuation hierarchy.

Capital Market Derivative Assets and Derivative Liabilities – Client-related derivative instruments with positive fair values are reported as an asset and derivative instruments with negative fair value are reported as liabilities, in both cases after taking into account the effects of master netting agreements. The fair value of client-related derivative assets and liabilities is determined based on the fair market value as quoted by broker-dealers using standardized industry models or internally-generated models. Many factors affect derivative values, including the level of interest rates, the market's perception of our nonperformance risk as reflected in our credit spread, and our assessment of counterparty nonperformance risk. The nonperformance risk assessment is based on our evaluation of credit risk, or if available, on observable external assessments of credit risk. Values of client-related derivative assets and liabilities are based on primarily observable inputs and are generally classified in level 2 of the valuation hierarchy. Level 3 derivatives include risk participation agreements and derivatives associated with clients whose loans are risk rated 6 or higher. Refer to "Credit Quality Indicators" above for further discussion on risk ratings.

Other Assets and Other Liabilities – Included in other assets and other liabilities are cash flow hedges designated in a hedging relationship and end-user derivative instruments that we use to manage our foreign exchange and interest rate risk. Those derivative instruments with positive fair value are reported as an asset and those with a negative fair value are reported as liabilities. The fair value is determined based on the fair market value as quoted by broker-dealers using standardized industry models, third party advisors using standardized industry models, or internally generated models based primarily on observable inputs. These derivative assets and liabilities are classified in level 2 of the valuation hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the hierarchy level and fair value for each major category of assets and liabilities measured at fair value at September 30, 2011 and December 31, 2010 on a recurring basis.

Fair Value Measurements on a Recurring Basis

(Amounts in thousands)

	September 30, 2011								December 31, 2010
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserv- able Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserv- able Inputs (Level 3)		Total
Assets:
Securities available-for-sale
U.S. Treasury	$	36,406	$	—	$	—	$	36,406	$	—	$	—	$	—	$	—
U.S. Agencies		—		10,128		—		10,128		—		10,426		—		10,426
Collateralized mortgage obligations		—		383,685		—		383,685		—		451,721		—		451,721
Residential mortgage- backed securities		—		1,292,168		—		1,292,168		—		1,247,031		—		1,247,031
State and municipal		—		149,700		—		149,700		—		172,108		—		172,108
Foreign sovereign debt		—		500		—		500		—		500		—		500
Total securities available-for-sale		36,406		1,836,181		—		1,872,587		—		1,881,786		—		1,881,786
Mortgage loans held for sale		—		—		24,126		24,126		—		—		—		—
Capital market derivative assets(1)		—		110,203		1,002		111,205		—		95,596		4,654		100,250
Other assets(2)		—		385		—		385		—		250		—		250
Total assets	$	36,406	$	1,946,769	$	25,128	$	2,008,303	$	—	$	1,977,632	$	4,654	$	1,982,286
Liabilities:
Capital market derivative liabilities(1)	$	—	$	113,919	$	15	$	113,934	$	—	$	102,009	$	9	$	102,018
Other liabilities(2)		—		245		—		245		—		280		—		280
Total liabilities	$	—	$	114,164	$	15	$	114,179	$	—	$	102,289	$	9	$	102,298

⁽¹⁾  Capital market derivative assets and derivative liabilities include client-related derivatives.

⁽²⁾  Other assets and other liabilities include derivatives designated in hedging relationships, derivatives for commitments to fund certain mortgage loans held for sale and end-user foreign exchange derivatives.

If a change in valuation techniques or input assumptions for an asset or liability occurred between periods, we would consider whether this would result in a transfer between the three levels of the fair value hierarchy. There have been no significant transfers of assets or liabilities between level 1 and level 2 of the valuation hierarchy between December 31, 2010 and September 30, 2011.

Other than electing the fair value option for mortgage loans held for sale, there have been no other changes in the valuation techniques and related inputs we used for assets and liabilities measured at fair value on a recurring basis from December 31, 2010 to September 30, 2011.

Reconciliation of Beginning and Ending Fair Value For Those

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

(Amounts in thousands)

	Quarters Ended September 30,
	2011									2010
	Mortgage Loans Held For Sale			Derivative Assets			Derivative (Liabilities)			Derivative Assets			Derivative (Liabilities)
Balance at beginning of period	$	—		$	2,369		$	(11	)	$	3,505		$	(76	)
Total gains (losses):
Included in earnings (1)		16			(38	)		238			822			46
Purchases, issuances, sales and settlements:
Purchases		—			—			—			—			—
Issuances		67,402			—			—			—			—
Sales		(43,292	)		—			—			—			—
Settlements		—			(705	)		(242	)		(901	)		—
Transfers in (out) of level 3		—			(624	)		—			2,583			—
Balance at end of period	$	24,126		$	1,002		$	(15	)	$	6,009		$	(30	)
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	$	16		$	(73	)	$	238		$	823		$	(41	)

	Nine Months Ended September 30,
	2011									2010
	Mortgage Loans Held For Sale			Derivative Assets			Derivative (Liabilities)			State and Municipal Securities Available- For-Sale			Derivative Assets			Derivative (Liabilities)
Balance at beginning of year	$	—		$	4,654		$	(9	)	$	3,615		$	1,468		$	(101	)
Total gains (losses):
Included in earnings (1)		16			(175	)		266			—			2,408			83
Purchases, issuances, sales and settlements:
Purchases		—			—			—			—			—			—
Issuances		67,402			42			(30	)		—			—			(12	)
Sales		(43,292	)		—			—			(3,615	)		—			—
Settlements		—			(3,216	)		(242	)		—			(2,498	)		—
Transfers in (out) of level 3		—			(303	)		—			—			4,631			—
Balance at end of period	$	24,126		$	1,002		$	(15	)	$	—		$	6,009		$	(30	)
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	$	16		$	(42	)	$	(266	)	$	—		$	1,192		$	(70	)

⁽¹⁾   Amounts disclosed in this line are included in capital markets products income in the Consolidated Statements of Income.

At September 30, 2010, $2.8 million of derivative assets were transferred from level 2 to level 3 of the valuation hierarchy due to a lack of observable market data, as there was deterioration in the credit risk of the derivative counterparty. No derivative assets were transferred from level 2 to level 3 of the valuation hierarchy at September 30, 2011. Also, at September 30, 2011 and 2010, respectively, $624,000 and $251,000 of derivative assets were transferred from level 3 to level 2 of the valuation hierarchy due to an improvement in the credit risk of the counterparty. We recognize transfers in and transfers out at the end of the reporting period.

Financial Instruments Recorded Using the Fair Value Option

Difference Between Aggregate Fair Value and Aggregate Remaining Principal Balance

for Mortgage Loans Held For Sale Elected to be Carried at Fair Value

(Amounts in thousands)

	September 30, 2011
	Aggregate Fair Value		Difference		Aggregate Unpaid Principal Balance
Mortgage loans held for sale
Total (1)	$	24,126	$	16	$	24,110

⁽¹⁾  The change in fair value is reflected in mortgage banking non-interest income.

As of September 30, 2011, none of the mortgage loans held for sale were nonaccrual loans or 90 days or more past due and still accruing interest. Changes in fair value due to instrument-specific credit risk for the quarter and nine months ended September 30, 2011 were not material.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table provides the hierarchy level and fair value for each major category of assets measured at fair value at September 30, 2011 and December 31, 2010 on a nonrecurring basis.

Fair Value Measurements on a Nonrecurring Basis

(Amounts in thousands)

	September 30, 2011								December 31, 2010
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Loans held for sale	$	—	$	—	$	—	$	—	$	—	$	—	$	30,758	$	30,758
Collateral-dependent impaired loans net of reserve for loan losses		—		—		283,452		283,452		—		—		328,492		328,492
Covered assets- foreclosed real estate		—		—		28,344		28,344		—		—		32,155		32,155
OREO		—		—		116,364		116,364		—		—		88,728		88,728
Total assets	$	—	$	—	$	428,160	$	428,160	$	—	$	—	$	480,133	$	480,133

Collateral-Dependent Impaired Loans

(Amounts in thousands)

	September 30, 2011			December 31, 2010
Carrying value	$	353,343		$	398,015
Specific reserves		(69,891	)		(69,523	)
Fair value	$	283,452		$	328,492

There have been no changes in the valuation techniques and related inputs we used for assets and liabilities measured at fair value on a nonrecurring basis from December 31, 2010 to September 30, 2011 other than the previously discussed election of the fair value option for mortgage loans held for sale effective August 1, 2011. Accordingly, mortgage loans held for sale are reported in the fair value measurements on a recurring basis tables.

Estimated Fair Value of Certain Financial Instruments

U.S. GAAP requires disclosure of the estimated fair values of certain financial instruments, both assets and liabilities, on and off-balance sheet, for which it is practical to estimate the fair value. Because the estimated fair values provided herein exclude disclosure of the fair value of certain other financial instruments and all non-financial instruments, any aggregation of the estimated fair value amounts presented would not represent total underlying value. Examples of non-financial instruments having significant value include the future earnings potential of significant customer relationships and the value of Trust and Investments' operations and other fee-generating businesses. In addition, other significant assets including property, plant, and equipment and goodwill are not considered financial instruments and, therefore, have not been valued.

Various methodologies and assumptions have been utilized in management's determination of the estimated fair value of our financial instruments, which are detailed below. The fair value estimates are made at a discrete point in time based on relevant market information. Because no market exists for a significant portion of these financial instruments, fair value estimates are based on judgments regarding future expected economic conditions, loss experience, and risk characteristics of the financial instruments. These estimates are subjective, involve uncertainties, and cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

In addition to the valuation methodology explained above for financial instruments recorded at fair value, the following methods and assumptions were used in estimating the fair value of financial instruments that are carried at cost in the Consolidated Statements of Financial Condition.

Short-term financial assets and liabilities – For financial instruments with a shorter-term or with no stated maturity, prevailing market rates, and limited credit risk, the carrying amounts approximate fair value. Those financial instruments include cash and due from banks, federal funds sold and other short-term investments, accrued interest receivable, and accrued interest payable.

Securities Held-to-Maturity – The fair value of securities held-to-maturity is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Non-marketable equity investments – Non-marketable equity investments include FHLB stock and other various equity securities. The carrying value of FHLB stock approximates fair value as the stock is non-marketable, but can only be sold to the FHLB or another member institution at par. The carrying value of all other equity investments approximates fair value.

Loans – The fair value of loans is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. The estimate of maturity is based on contractual terms and includes assumptions that reflect our and the industry's historical experience with repayments for each loan classification. The estimation is modified, as required, by the effect of current economic and lending conditions, collateral, and other factors.

Covered assets – Covered assets include the acquired loans and foreclosed loan collateral (including the fair value of expected reimbursements from the FDIC). The fair value of covered assets is calculated by discounting expected cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the asset. The estimate of maturity is based on contractual terms and includes assumptions that reflect our and the industry's historical experience with repayments for each asset classification. The estimate is modified, as required, by the effect of current economic and lending conditions, collateral, and other factors.

Investment in Bank Owned Life Insurance – The fair value of our investment in bank owned life insurance is equal to its cash surrender value.

Deposit liabilities – The fair values disclosed for noninterest-bearing demand deposits, savings deposits, interest-bearing deposits, and money market deposits are equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The fair value for certificate of deposits and brokered deposits were estimated using present value techniques by discounting the future cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Short-term borrowings – The fair value of repurchase agreements and FHLB advances with the remaining maturities of one year or less is estimated by discounting the obligations using the rates currently offered for repurchase agreements or borrowings of similar remaining maturities. The carrying amounts of funds purchased and other borrowed funds approximate their fair value due to their short-term nature.

Long-term debt – The fair value of subordinated debt, FHLB advances with remaining maturities greater than one year, and the junior subordinated debentures are estimated by discounting future cash flows using current interest rates for similar financial instruments.

Commitments – Given the limited interest rate exposure posed by the commitments outstanding at period-end due to their variable rate structure, termination clauses provided in the agreements, and the market rate of fees charged, we have deemed the fair value of commitments outstanding to be immaterial.

Financial Instruments

(Amounts in thousands)

	As of
	September 30, 2011				December 31, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and due from banks	$	171,268	$	171,268	$	112,772	$	112,772
Federal funds sold and other short-term investments		248,559		248,559		541,316		541,316
Loans held for sale		24,126		24,126		30,758		30,758
Securities available-for-sale		1,872,587		1,872,587		1,881,786		1,881,786
Securities held-to-maturity		273,200		272,864		—		—
Non-marketable equity investments		43,894		43,894		23,537		23,537
Loans, net of allowance for loan losses and unearned fees		8,474,913		8,051,212		8,891,536		8,535,266
Covered assets, net of allowance for covered loan losses		302,284		319,714		381,875		400,783
Accrued interest receivable		32,686		32,686		33,854		33,854
Investment in bank owned life insurance		50,565		50,565		49,408		49,408
Capital markets derivative assets		111,248		111,248		100,250		100,250
Financial Liabilities:
Deposits	$	10,108,663	$	10,124,413	$	10,535,429	$	10,549,930
Short-term borrowings		59,154		59,423		118,561		120,522
Long-term debt		379,793		355,110		414,793		414,340
Accrued interest payable		5,841		5,841		5,968		5,968
Capital markets derivative liabilities		113,968		113,968		102,018		102,018

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Derivative Instruments (Change In Accumulated Other Comprehensive Income Related To Interest Rate Swaps Designated as Cash Flow Hedge) (Details) (USD $) In Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011
Derivative Instruments
Unrealized gain at beginning of period
Amount of gain recognized in AOCI	1,162	1,162
Amount reclassified from AOCI to interest income on loans	(156)	(156)
Unrealized gain at end of period	$ 1,006	$ 1,006

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2011	Nov. 02, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Entity Registrant Name	PRIVATEBANCORP, INC
Entity Central Index Key	0000889936
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		71,799,558

XML

Loans (Schedule Of Carrying Value of Loans Pledged) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Loans
Federal Reserve Bank discount window borrowings	$ 1,419,662	$ 913,599
Federal Home Loan Bank advances	43,400	184,026
Total	$ 1,463,062	$ 1,097,625

XML

Securities (Tables)

9 Months Ended

Sep. 30, 2011

Securities

Securities Portfolio

	September 30, 2011									December 31, 2010
	Amortized Cost		Gross Unrealized					Fair Value		Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses							Gains		Losses
Securities Available-for-Sale
U.S. Treasury	$	35,844	$	562	$	—		$	36,406	$	—	$	—	$	—		$	—
U.S. Agencies		10,049		79		—			10,128		10,155		271		—			10,426
Collateralized mortgage obligations		369,081		14,656		(52	)		383,685		450,251		9,400		(7,930	)		451,721
Residential mortgage-backed securities		1,242,968		49,203		(3	)		1,292,168		1,222,642		31,701		(7,312	)		1,247,031
State and municipal		139,963		9,779		(42	)		149,700		166,209		6,433		(534	)		172,108
Foreign sovereign debt		500		—		—			500		500		—		—			500
Total	$	1,798,405	$	74,279	$	(97	)	$	1,872,587	$	1,849,757	$	47,805	$	(15,776	)	$	1,881,786
Securities Held-to-Maturity
Residential mortgage-backed securities	$	273,200	$	652	$	(988	)	$	272,864	$	—	$	—	$	—		$	—
Non-marketable Equity Securities
FHLB stock	$	40,909	$	—	$	—		$	40,909	$	20,694	$	—	$	—		$	20,694
Other		2,985		—		—			2,985		2,843		—		—			2,843
Total	$	43,894	$	—	$	—		$	43,894	$	23,537	$	—	$	—		$	23,537

Securities In Unrealized Loss Position

	Less Than 12 Months					12 Months or Longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
As of September 30, 2011
Securities Available-for-Sale
Collateralized mortgage obligations	$	12,794	$	(52	)	$	—	$	—	$	12,794	$	(52	)
Residential mortgage-backed securities		185		(3	)		—		—		185		(3	)
State and municipal		13,229		(42	)		—		—		13,229		(42	)
Total	$	26,208	$	(97	)	$	—	$	—	$	26,208	$	(97	)
Securities Held-to-Maturity
Residential mortgage-backed securities	$	183,409	$	(988	)	$	—	$	—	$	183,409	$	(988	)
As of December 31, 2010
Securities Available-for-Sale
Collateralized mortgage obligations	$	148,643	$	(7,930	)	$	—	$	—	$	148,643	$	(7,930	)
Residential mortgage-backed securities		378,211		(7,312	)		—		—		378,211		(7,312	)
State and municipal		33,710		(534	)		—		—		33,710		(534	)
Total	$	560,564	$	(15,776	)	$	—	$	—	$	560,564	$	(15,776	)

Remaining Contractual Maturity Of Securities

	September 30, 2011
	Available-For Sale				Held-To-Maturity and Non-Marketable Equity Securities
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasury, U.S. Agencies, state and municipals and foreign sovereign debt securities
One year or less	$	2,298	$	2,320	$	—	$	—
One year to five years		65,768		67,834		—		—
Five years to ten years		93,367		100,388		—		—
After ten years		24,923		26,192		—		—
All other securities
Collateralized mortgage obligations		369,081		383,685		—		—
Residential mortgage-backed securities		1,242,968		1,292,168		273,200		272,864
Non-marketable equity securities		—		—		43,894		43,894
Total	$	1,798,405	$	1,872,587	$	317,094	$	316,758

Securities Gains (Losses)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Proceeds from sales	$	219,589		$	167,946		$	280,082		$	197,841
Gross realized gains		4,658			3,215			5,930			4,154
Gross realized losses		(288	)		(186	)		(523	)		(1,281	)
Net realized gains	$	4,370		$	3,029		$	5,407		$	2,873
Income tax provision on net realized gains	$	1,740		$	1,161		$	2,150		$	1,097

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Loans (Schedule Of Loan Portfolio Excluding Covered Assets) (Details) (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010	Sep. 30, 2010
Loans
Commercial and industrial	$ 4,071,840		$ 4,015,257
Commercial - owner-occupied commercial real estate	1,084,212		897,620
Total commercial	5,156,052		4,912,877
Commercial real estate	2,054,925		2,400,923
Commercial real estate - multi-family	421,045		457,246
Total commercial real estate	2,475,970		2,858,169
Construction	315,858		530,733
Residential real estate	307,705		319,146
Home equity	186,914		197,179
Personal	232,456		296,253
Total loans	8,674,955	[1]	9,114,357	8,992,129	[1]
Deferred loan fees included as a reduction in total loans	34,893		33,535
Overdrawn demand deposits included in total loans	$ 1,151		$ 3,197

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

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Derivative Instruments (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011 Maximum [Member]	Dec. 31, 2010 Maximum [Member]	Sep. 30, 2011 Minimum [Member]	Dec. 31, 2010 Minimum [Member]	Sep. 30, 2011 Possible Minimum [Member]	Sep. 30, 2011 Possible Maximum [Member]
Interest rate lock commitments	$ 75,000,000
Forward commitments for the future delivery of residential mortgage loans	99,200,000
Foreign currency risk on loans	3,900,000
Maximum length of time hedged in interest rate cash flow hedge, years	five
Net deferred gains (losses), net of tax, recorded in AOCI expected to be reclassified into earnings during the next 12 months	$ 573,000,000
Range of Assigned Internal Risk Ratings		5	5	3	3	1	8

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Allowance For Loan Losses And Reserve For Unfunded Commitments

9 Months Ended

Sep. 30, 2011

Allowance For Loan Losses And Reserve For Unfunded Commitments

Allowance For Loan Losses And Reserve For Unfunded Commitments

5. ALLOWANCE FOR LOAN LOSSES AND RESERVE FOR UNFUNDED COMMITMENTS

Allowance for Loan Losses (excluding covered assets) ⁽¹⁾

(Amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Allowance for Loan Losses
Balance at beginning of period	$	206,286		$	232,411		$	222,821		$	221,688
Loans charged-off		(41,986	)		(50,622	)		(129,594	)		(159,992	)
Recoveries on loans previously charged-off		3,400			1,572			6,042			4,207
Net charge-offs		(38,586	)		(49,050	)		(123,552	)		(155,785	)
Provision for loan losses		32,341			40,031			100,772			157,489
Balance at end of period	$	200,041		$	223,392		$	200,041		$	223,392
Ending balance, individually evaluated for impairment (2)	$	72,191		$	68,716
Ending balance, collectively evaluated for impairment	$	127,850		$	154,676
Recorded investment in Loans
Ending balance, individually evaluated for impairment (2)	$	411,077		$	431,815
Ending balance, collectively evaluated for impairment		8,263,878			8,560,314
Total recorded investment in loans	$	8,674,955		$	8,992,129

⁽¹⁾  Refer to Note 6 for a detailed discussion regarding covered assets.

⁽²⁾  Refer to Note 4 for additional information regarding impaired loans.

Additional detail on the allowance for loan losses and recorded investment in loans, by product segment, for the quarter and nine months ended September 30, 2011 is presented in the following table.

Allowance for Loan Losses and Recorded Investment in Loans (excluding covered assets) ⁽¹⁾

(Amounts in thousands)

	For the Quarter Ended September 30, 2011
	Commercial			Commercial Real Estate			Construction			Residential Real Estate			Home Equity			Personal			Total
Allowance for Loan Losses:
Balance at beginning of period	$	56,352		$	111,535		$	17,731		$	7,065		$	6,626		$	6,977		$	206,286
Loans charged-off		(5,039	)		(29,920	)		(1,419	)		(234	)		(3,291	)		(2,083	)		(41,986	)
Recoveries on loans previously charged-off		2,278			969			29			9			12			103			3,400
Net charge-offs		(2,761	)		(28,951	)		(1,390	)		(225	)		(3,279	)		(1,980	)		(38,586	)
Provision for loan losses		9,251			15,507			1,756			276			2,498			3,053			32,341
Balance at end of period	$	62,842		$	98,091		$	18,097		$	7,116		$	5,845		$	8,050		$	200,041

	For the Nine Months Ended September 30, 2011
	Commercial			Commercial Real Estate			Construction			Residential Real Estate			Home Equity			Personal			Total
Allowance for Loan Losses:
Balance at beginning of year	$	70,115		$	110,853		$	19,778		$	5,321		$	5,764		$	10,990		$	222,821
Loans charged-off		(19,751	)		(84,731	)		(9,756	)		(806	)		(5,246	)		(9,304	)		(129,594	)
Recoveries on loans previously charged-off		3,450			1,752			182			51			37			570			6,042
Net charge-offs		(16,301	)		(82,979	)		(9,574	)		(755	)		(5,209	)		(8,734	)		(123,552	)
Provision for loan losses		9,028			70,217			7,893			2,550			5,290			5,794			100,772
Balance at end of period	$	62,842		$	98,091		$	18,097		$	7,116		$	5,845		$	8,050		$	200,041
Ending balance, individually evaluated for impairment (2)	$	17,842		$	38,091		$	7,647		$	1,316		$	2,345		$	4,950		$	72,191
Ending balance, collectively evaluated for impairment	$	45,000		$	60,000		$	10,450		$	5,800		$	3,500		$	3,100		$	127,850
Recorded Investment in Loans:
Ending balance, individually evaluated for impairment (2)	$	118,842		$	201,871		$	29,997		$	19,070		$	13,616		$	27,681		$	411,077
Ending balance, collectively evaluated for impairment		5,037,210			2,274,099			285,861			288,635			173,298			204,775			8,263,878
Total recorded investment in loans	$	5,156,052		$	2,475,970		$	315,858		$	307,705		$	186,914		$	232,456		$	8,674,955

⁽¹⁾  Refer to Note 6 for a detailed discussion regarding covered assets.

⁽²⁾  Refer to Note 4 for additional information regarding impaired loans.

Reserve for Unfunded Commitments ⁽¹⁾

(Amounts in thousands)

	Quarters Ended September 30,					Nine Months Ended September 30,
	2011		2010			2011			2010
Balance at beginning of period	$	6,986	$	5,817		$	8,119		$	1,452
(Release) provision for unfunded commitments		—		(550	)		(1,133	)		3,815
Balance at end of period	$	6,986	$	5,267		$	6,986		$	5,267
Unfunded commitments, excluding covered assets, at period end (1)	$	4,083,779	$	3,891,922

⁽¹⁾  Unfunded commitments include commitments to extend credit, standby letters of credit and commercial letters of credit.

Refer to Note 15 for additional details of commitments to extend credit, standby letters of credit and commercial letters of credit.

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Loans (Tables)

9 Months Ended

Sep. 30, 2011

Loans

Schedule Of Loan Portfolio Excluding Covered Assets

	September 30, 2011		December 31, 2010
Commercial and industrial	$	4,071,840	$	4,015,257
Commercial – owner-occupied commercial real estate		1,084,212		897,620
Total commercial		5,156,052		4,912,877
Commercial real estate		2,054,925		2,400,923
Commercial real estate – multi-family		421,045		457,246
Total commercial real estate		2,475,970		2,858,169
Construction		315,858		530,733
Residential real estate		307,705		319,146
Home equity		186,914		197,179
Personal		232,456		296,253
Total loans	$	8,674,955	$	9,114,357
Deferred loan fees included as a reduction in total loans	$	34,893	$	33,535
Overdrawn demand deposits included in total loans	$	1,151	$	3,197

Schedule Of Carrying Value Of Loans Pledged

	September 30, 2011		December 31, 2010
Loans pledged to secure:
Federal Reserve Bank discount window borrowings	$	1,419,662	$	913,599
Federal Home Loan Bank advances		43,400		184,026
Total	$	1,463,062	$	1,097,625

Schedule Of Loan Portfolio Aging Excluding Covered Assets

			Delinquent
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due and Accruing		Total Accruing Loans		Nonaccrual		Total Loans
As of September 30, 2011
Commercial	$	5,083,733	$	3,529	$	101	$	—	$	5,087,363	$	68,689	$	5,156,052
Commercial real estate		2,300,497		5,884		8,801		—		2,315,182		160,788		2,475,970
Construction		285,519		342		—		—		285,861		29,997		315,858
Residential real estate		286,827		7		2,864		—		289,698		18,007		307,705
Home equity		171,788		761		925		—		173,474		13,440		186,914
Personal		218,524		15		91		—		218,630		13,826		232,456
Total loans	$	8,346,888	$	10,538	$	12,782	$	—	$	8,370,208	$	304,747	$	8,674,955

			Delinquent
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due and Accruing		Total Accruing Loans		Nonaccrual		Total Loans
As of December 31, 2010
Commercial	$	4,828,948	$	1,024	$	759	$	—	$	4,830,731	$	82,146	$	4,912,877
Commercial real estate		2,632,835		10,264		12,346		—		2,655,445		202,724		2,858,169
Construction		495,435		—		1,895		—		497,330		33,403		530,733
Residential real estate		300,027		180		4,098		—		304,305		14,841		319,146
Home equity		185,675		976		2,333		—		188,984		8,195		197,179
Personal		256,860		13,122		1,700		—		271,682		24,571		296,253
Total loans	$	8,699,780	$	25,566	$	23,131	$	—	$	8,748,477	$	365,880	$	9,114,357

Schedule Of Impaired Loans Excluding Covered Assets

	Unpaid Contractual Principal Balance		Recorded Investment With No Specific Reserve		Recorded Investment With Specific Reserve		Total Recorded Investment		Specific Reserve
As of September 30, 2011
Commercial	$	127,933	$	85,084	$	33,758	$	118,842	$	17,842
Commercial real estate		229,360		85,012		116,859		201,871		38,091
Construction		39,639		—		29,997		29,997		7,647
Residential real estate		20,153		12,296		6,774		19,070		1,316
Home equity		15,133		1,814		11,802		13,616		2,345
Personal		39,978		16,896		10,785		27,681		4,950
Total impaired loans	$	472,196	$	201,102	$	209,975	$	411,077	$	72,191
As of December 31, 2010
Commercial	$	98,246	$	33,879	$	56,284	$	90,163	$	18,015
Commercial real estate		292,138		118,190		144,553		262,743		38,003
Construction		52,055		11,437		26,314		37,751		3,778
Residential real estate		17,186		4,413		11,226		15,639		1,046
Home equity		8,575		—		8,195		8,195		2,614
Personal		48,911		21,227		17,738		38,965		7,515
Total impaired loans	$	517,111	$	189,146	$	264,310	$	453,456	$	70,971

Average Recorded Investment And Interest Income Recognized On Impaired Loans

	Quarter Ended				Nine Months Ended
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
September 30, 2011
Commercial	$	124,933	$	1,054	$	103,678	$	1,723
Commercial real estate		220,484		708		254,048		2,205
Construction		37,409		49		38,368		123
Residential real estate		19,923		14		18,646		33
Home equity		13,791		17		12,172		20
Personal		30,584		122		33,380		375
Total	$	447,124	$	1,964	$	460,292	$	4,479
September 30, 2010	$	400,237			$	411,052

⁽¹⁾ Represents amounts while classified as impaired for the periods presented.

Schedule Of Credit Quality Indicators Excluding Covered Assets

Product Segment	Special Mention		% of Portfolio Loan Type		Potential Problem Loans		% of Portfolio Loan Type		Non- Performing Loans		% of Portfolio Loan Type		Total Loans
As of September 30, 2011
Commercial	$	54,804		1.1	$	128,018		2.5	$	68,689		1.3	$	5,156,052
Commercial real estate		141,465		5.7		108,919		4.4		160,788		6.5		2,475,970
Construction		10,129		3.2		9,625		3.0		29,997		9.5		315,858
Residential real estate		5,427		1.8		20,375		6.6		18,007		5.9		307,705
Home equity		1,595		0.9		8,569		4.6		13,440		7.2		186,914
Personal		5,141		2.2		1,619		0.7		13,826		5.9		232,456
Total	$	218,561		2.5	$	277,125		3.2	$	304,747		3.5	$	8,674,955
As of December 31, 2010
Commercial	$	111,929		2.3	$	173,829		3.5	$	82,146		1.7	$	4,912,877
Commercial real estate		203,073		7.1		260,042		9.1		202,724		7.1		2,858,169
Construction		67,915		12.8		45,119		8.5		33,403		6.3		530,733
Residential real estate		9,962		3.1		15,101		4.7		14,841		4.7		319,146
Home equity		3,757		1.9		11,272		5.7		8,195		4.2		197,179
Personal		2,198		0.7		2,227		0.8		24,571		8.3		296,253
Total	$	398,834		4.4	$	507,590		5.6	$	365,880		4.0	$	9,114,357

Troubled Debt Restructured Loans Outstanding

	September 30,		December 31,
	2011		2010
Accruing interest:
Commercial	$	50,153	$	8,017
Commercial real estate		41,083		60,019
Construction		—		4,348
Residential real estate		1,063		798
Personal		14,031		14,394
Total accruing	$	106,330	$	87,576
Nonaccrual:
Commercial	$	33,548	$	13,152
Commercial real estate		39,423		33,123
Construction		4,018		—
Residential real estate		3,613		1,350
Home equity		1,849		16,427
Personal		8,718		1,229
Total nonaccrual	$	91,169	$	65,281

Additions To Troubled Debt Restructurings During The Period

	Quarter Ended September 30, 2011						Nine Months Ended September 30, 2011
			Outstanding Recorded Investment (1)						Outstanding Recorded Investment (1)
	Number of Borrowers		Pre- Modification		Post- Modification		Number of Borrowers		Pre- Modification		Post- Modification
Accruing interest:
Commercial
Extension of maturity date (2)		2	$	294	$	191		15	$	45,280	$	45,177
Other concession (3)		1		7,237		7,951		5		19,402		20,115
Multiple note structuring		—		—		—		1		8,837		5,265
Total commercial		3		7,531		8,142		21		73,519		70,557
Commercial real estate
Extension of maturity date (2)		1		492		492		11		6,988		6,988
Multiple note structuring		—		—		—		2		9,990		5,344
Total commercial real estate		1		492		492		13		16,978		12,332
Residential real estate
Extension of maturity date (2)		—		—		—		2		374		374
Home equity
Extension of maturity date (2)		—		—		—		2		203		203
Personal
Extension of maturity date (2)		—		—		—		1		265		265
Other concession (3)		—		—		—		1		252		252
Total personal		—		—		—		2		517		517
Total accruing		4	$	8,023	$	8,634		40	$	91,591	$	83,983
Change in balance due to principal paydown at time of modification					$	103					$	103

⁽¹⁾  Represents amounts as of the date immediately prior to and immediately after the modification is effective.

⁽²⁾  Extension of maturity date also includes loans renewed at existing rate of interest which is considered a below market rate for that particular loan's risk profile.

⁽³⁾  Other concessions primarily include interest rate reductions, loan increases, and deferral of principal.

	Quarter Ended September 30, 2011						Nine Months Ended September 30, 2011
			Outstanding Recorded Investment (1)						Outstanding Recorded Investment (1)
	Number of Borrowers		Pre- Modification		Post- Modification		Number of Borrowers		Pre- Modification		Post- Modification
Nonaccrual:
Commercial
Extension of maturity date (2)		3	$	30,251	$	28,762		4	$	30,370	$	28,881
Other concession (3)		1		—		200		2		128		328
Total commercial		4		30,251		28,962		6		30,498		29,209
Commercial real estate
Extension of maturity date (2)		2		2,690		2,690		5		6,706		6,706
Other concession (3)		—		—		—		2		6,208		6,208
Total commercial real estate		2		2,690		2,690		7		12,914		12,914
Construction
Extension of maturity date (2)		—		—		—		1		179		179
Residential real estate
Extension of maturity date (2)		—		—		—		3		1,446		1,446
Other concession (3)		—		—		—		1		696		696
Total residential real estate		—		—		—		4		2,142		2,142
Home equity
Extension of maturity date (2)		—		—		—		1		147		147
Other concession (3)		—		—		—		1		490		490
Total home equity		—		—		—		2		637		637
Personal
Extension of maturity date (2)		1		362		362		3		487		473
Total nonaccrual		7	$	33,303	$	32,014		23	$	46,857	$	45,554
Change in balance due to principal paydown at time of modification					$	1,489					$	1,504

⁽¹⁾  Represents amounts as of the date immediately prior to and immediately after the modification is effective.

⁽²⁾  Extension of maturity date also includes loans renewed at existing rate of interest which is considered a below market rate for that particular loan's risk profile.

⁽³⁾  Other concessions primarily include interest rate reductions, loan increases, and deferral of principal.

Troubled Debt Restructuring That Became Nonperforming Within 12 Months of Restructuring

	Quarter Ended September 30, 2011 (1)				Nine Months Ended September 30, 2011 (1)
	Number of Borrowers		Recorded Investment		Number of Borrowers		Recorded Investment
Commercial		1	$	1,281		4	$	4,419
Commercial real estate		—		—		10		10,030
Construction		1		3,058		3		4,294
Residential real estate		1		99		1		99
Home equity		1		26		1		26
Personal		1		252		1		252
Total		5	$	4,716		20	$	19,120

⁽¹⁾  Represents amounts as of the balance sheet date from the quarter the default was first reported.

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Securities (Securities In Unrealized Loss Position) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 26,208	$ 560,564
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Unrealized Losses	(97)	(15,776)
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Fair Value
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Unrealized Losses
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	26,208	560,564
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses, Total	(97)	(15,776)
Collateralized Mortgage Obligations [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	12,794	148,643
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Unrealized Losses	(52)	(7,930)
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Fair Value
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Unrealized Losses
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	12,794	148,643
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses, Total	(52)	(7,930)
Residential Mortgage-Backed Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	185	378,211
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Unrealized Losses	(3)	(7,312)
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Fair Value
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Unrealized Losses
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	185	378,211
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses, Total	(3)	(7,312)
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	183,409
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Unrealized Losses	(988)
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Unrealized Losses
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	183,409
Held-to-maturity Securities, Continuous Unrealized Loss Position, Unrealized Losses	(988)
State and Municipal [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	13,229	33,710
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Unrealized Losses	(42)	(534)
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Fair Value
Available For Sale Securities Continuous Unrealized Loss Position Twelve Months Or Longer, Unrealized Losses
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	13,229	33,710
Available-for-sale Securities, Continuous Unrealized Loss Position, Unrealized Losses, Total	$ (42)	$ (534)

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Commitments, Guarantees, And Contingent Liabilities (Tables)

9 Months Ended

Sep. 30, 2011

Commitments, Guarantees, And Contingent Liabilities

Schedule of Commitments, Guarantees, And Contingent Liabilities

	September 30, 2011		December 31, 2010
Commitments to extend credit:
Home equity lines	$	161,721	$	175,365
Residential 1-4 family construction - secured		24,909		15,600
Commercial real estate - secured		84,278		64,388
Commercial and industrial		3,001,902		2,929,215
All other commitments		520,472		686,469
Total commitments to extend credit	$	3,793,282	$	3,871,037

	September 30, 2011		December 31, 2010
Letters of credit:
Financial standby	$	292,124	$	265,675
Performance standby		24,646		32,425
Commercial letters of credit		3,496		115
Total letters of credit	$	320,266	$	298,215

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Variable Interest Entities (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2011
Variable Interest Entities
Percentage of common equity of trusts	100.00%
Principal balance of the debentures and the related interest receivable	$ 244.8
Investments included within non-marketable equity investments	2.7
Maximum exposure to loss, carrying amount	$ 1.6

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Variable Interest Entities

9 Months Ended

Sep. 30, 2011

Variable Interest Entities

Variable Interest Entities

18. VARIABLE INTEREST ENTITIES

A variable interest entity ("VIE") is a partnership, limited liability company, trust, or other legal entity that does not have sufficient equity to permit it to finance its activities without additional subordinated financial support from other parties, or whose investors lack one of three characteristics associated with owning a controlling financial interest. Those characteristics are: (i) the power, through voting rights or similar rights, to direct the activities of an entity that most significantly impact the entity's economic performance; (ii) the obligation to absorb the expected losses of an entity if they occur; and (iii) the right to receive the expected residual returns of the entity, if they occur.

U.S. GAAP requires VIEs to be consolidated by the party that has those characteristics associated with owning a controlling financial interest (i.e., the primary beneficiary). The following summarizes the VIEs in which we have a significant interest and discusses the accounting treatment applied for the consolidation of the VIEs.

As discussed in Note 10, we sponsor and wholly own 100% of the common equity of four trusts that were formed for the purpose of issuing trust preferred securities to third party investors and investing the proceeds from the sale of the trust preferred securities solely in debentures issued by the Company. The trusts' only assets as of September 30, 2011 were the $244.8 million principal balance of the debentures and the related interest receivable. The trusts meet the definition of a VIE, but the Company is not the primary beneficiary of the trusts and accordingly, the trusts are not consolidated in our financial statements.

We hold certain investments in funds that make investments in accordance with the provisions of the Community Reinvestment Act. Such investments have a carrying amount of $2.7 million at September 30, 2011 and are included within non-marketable equity investments in our Consolidated Statements of Financial Condition. The investments meet the definition of a VIE, but the Company is not the primary beneficiary as we are a limited investor in those investment funds and do not have the power over their investment activities. Accordingly, we will continue to account for our interests in these investments using the cost method. Our maximum exposure to loss is limited to the carrying amount plus additional required future capital contributions of $1.6 million as of September 30, 2011.

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Junior Subordinated Deferrable Interest Debentures Held By Trusts That Issued Guaranteed Capital Debt Securities

9 Months Ended

Sep. 30, 2011

Junior Subordinated Deferrable Interest Debentures Held By Trusts That Issued Guaranteed Capital Debt Securities

Junior Subordinated Deferrable Interest Debentures Held By Trusts That Issued Guaranteed Capital Debt Securities

10. JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES HELD BY TRUSTS THAT ISSUED GUARANTEED CAPITAL DEBT SECURITIES

As of September 30, 2011, we sponsored, and wholly owned, 100% of the common equity of four trusts that were formed for the purpose of issuing Company-obligated mandatorily redeemable preferred securities ("Trust Preferred Securities") to third party investors and investing the proceeds from the sale of the Trust Preferred Securities solely in junior subordinated debt securities of the Company ("Debentures"). The Debentures held by the trusts, which totaled $244.8 million, are the sole assets of each trust. Our obligations under the Debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company of the obligations of the trusts. The guarantee covers the distributions and payments on liquidation or redemption of the Trust Preferred Securities, but only to the extent of funds held by the trusts. We have the right to redeem the Debentures in whole or in part, on or after specific dates, at a redemption price specified in the indentures plus any accrued but unpaid interest to the redemption date. We may also have the right to redeem the Debentures at an earlier time, if future legislative or regulatory changes impact our capital treatment of the Trust Preferred Securities. We used the proceeds from the sales of the Debentures for general corporate purposes.

Under current accounting rules, the trusts qualify as variable interest entities for which we are not the primary beneficiary and therefore ineligible for consolidation. Accordingly, the trusts are not consolidated in our financial statements. The subordinated Debentures issued by us to the trusts are included in our Consolidated Statements of Financial Condition as "long-term debt" with the corresponding interest distributions recorded as interest expense. The common shares issued by the trusts are included in other assets in our Consolidated Statements of Financial Condition with the related dividend distributions recorded in other non-interest income.

Common Securities, Preferred Securities, and Related Debentures

(Amounts and number of shares in thousands)

														Principal Amount of Debentures (3)
	Issuance Date		Common Securities Issued		Trust Preferred Securities Issued (1)		Coupon Rate (2)			Earliest Redemption Date (on or after) (3)		Maturity		September 30, 2011		December 31, 2010
Bloomfield Hills Statutory Trust I		May 2004	$	248	$	8,000		3.00	%		Jun. 17, 2009		Jun. 2034	$	8,248	$	8,248
PrivateBancorp Statutory Trust II		Jun. 2005		1,547		50,000		2.06	%		Sep. 15, 2010		Sep. 2035		51,547		51,547
PrivateBancorp Statutory Trust III		Dec. 2005		1,238		40,000		1.85	%		Dec. 15, 2010		Dec. 2035		41,238		41,238
PrivateBancorp Statutory Trust IV		May 2008		10		143,750		10.00	%		Jun. 13, 2013		Jun. 2068		143,760		143,760
Total			$	3,043	$	241,750								$	244,793	$	244,793

⁽¹⁾  The trust preferred securities accrue distributions at a rate equal to the interest rate and maturity identical to that of the related Debentures. The trust preferred securities will be redeemed upon maturity of the related Debentures.

⁽²⁾  Reflects the coupon rate in effect at September 30, 2011. The coupon rate for the Bloomfield Hills Statutory Trust I is a variable rate and is based on three-month LIBOR plus 2.65%. The coupon rates for the PrivateBancorp Statutory Trusts II and III are at a variable rate based on three-month LIBOR plus 1.71% for Trust II and three-month LIBOR plus 1.50% for Trust III. The coupon rate for the PrivateBancorp Statutory Trust IV is fixed. Distributions for all of the Trusts are payable quarterly. We have the right to defer payment of interest on the Debentures at any time or from time to time for a period not exceeding five years provided no extension period may extend beyond the stated maturity of the Debentures. During such extension period, distributions on the trust preferred securities would also be deferred, and our ability to pay dividends on our common stock would be restricted. The Federal Reserve has the ability to prevent interest payments on the Debentures.

⁽³⁾ The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at maturity or their earlier redemption. Subject to restrictions relating to our participation in the U.S. Treasury's Troubled Asset Relief Program's Capital Purchase Program ("TARP CPP"), the Debentures are redeemable in whole or in part prior to maturity at any time after the dates shown in the table, and earlier at our discretion if certain conditions are met, and, in any event, only after we have obtained Federal Reserve approval, if then required under applicable guidelines or regulations.

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Basis Of Presentation

9 Months Ended

Sep. 30, 2011

Basis Of Presentation

Basis Of Presentation

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated interim financial statements of PrivateBancorp, Inc. ("PrivateBancorp" or the "Company"), a Delaware corporation, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include certain information and footnote disclosures required by U.S. generally accepted accounting principles ("U.S. GAAP") for complete annual financial statements. Accordingly, these financial statements should be read in conjunction with the Company's 2010 Annual Report on Form 10-K.

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with U.S. GAAP and reflect all adjustments that are, in the opinion of management, necessary for the fair presentation of the financial position and results of operations for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the quarter ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

The consolidated financial statements include the accounts and results of operations of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Certain reclassifications have been made to prior periods to conform to the current period presentation. U.S. GAAP requires management to make certain estimates and assumptions. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.

In preparing the consolidated financial statements, we have considered the impact of events occurring subsequent to September 30, 2011 for potential recognition or disclosure.

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2011

Earnings Per Common Share

Basic And Diluted Earnings Per Common Share

Basic and Diluted Earnings per Common Share
(Amounts in thousands, except per share data)

	Quarters Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Basic earnings per common share
Net income (loss) attributable to controlling interests	$	13,449	$	7,950	$	33,311	$	(10,395	)
Preferred dividends and discount accretion of preferred stock		3,426		3,405		10,260		10,198
Net income (loss) available to common stockholders		10,023		4,545		23,051		(20,593	)
Less: Earnings allocated to participating stockholders		127		99		268		47
Earnings allocated to common stockholders	$	9,896	$	4,446	$	22,783	$	(20,640	)
Weighted-average common shares outstanding		70,479		70,067		70,418		69,999
Basic earnings per common share	$	0.14	$	0.06	$	0.32	$	(0.29	)

	Quarters Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Diluted earnings per common share
Earnings allocated to common stockholders (1)	$	9,896	$	4,446	$	22,782	$	(20,640	)
Weighted-average common shares outstanding (2):
Weighted-average common shares outstanding		70,479		70,067		70,418		69,999
Dilutive effect of stock awards		142		30		264		—
Weighted-average diluted common shares outstanding		70,621		70,097		70,682		69,999
Diluted earnings per common share	$	0.14	$	0.06	$	0.32	$	(0.29	)
Antidilutive shares not included in diluted earnings per common share computation(2)(3):
Stock options		3,579		3,342		3,514		3,481
Unvested stock/unit awards		272		757		156		1,548
Warrants related to the U.S. Treasury Capital Purchase Program		645		645		645		645
Total antidilutive shares		4,496		4,744		4,315		5,674

⁽¹⁾  Earnings allocated to common stockholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common stock equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate earnings to common stockholders and participating securities for the purposes of calculating diluted earnings per share.

⁽²⁾  Due to the net loss available to common stockholders reported for the nine months ended September 30, 2010, all potentially dilutive common stock equivalents were excluded from the diluted net loss per share computation as their inclusion would have been antidilutive.

⁽³⁾  For the quarter and nine months ended September 30, 2011 and quarter ended September 30, 2010, represents potentially dilutive common stock securities for which the exercise price for the stock options and warrants and fair value of non-vested restricted stock/units was greater than the average market price of our common stock during the period.

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Goodwill And Other Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill And Other Intangible Assets

Goodwill And Other Intangible Assets

7. GOODWILL AND OTHER INTANGIBLE ASSETS

Carrying Amount of Goodwill by Operating Segment

(Amounts in thousands)

	September 30,		December 31,
	2011		2010
Banking	$	81,755	$	81,755
Trust and Investments		12,829		12,866
Holding Company Activities		—		—
Total goodwill	$	94,584	$	94,621

Goodwill is not amortized but, instead, is subject to impairment tests at least on an annual basis or more often if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. Our annual goodwill test was performed as of October 31, 2010, and it was determined that no impairment existed as of that date.

Our annual goodwill impairment test will be completed during the fourth quarter 2011. During third quarter 2011, no events or circumstances occurred that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Goodwill decreased by $37,000 during the first nine months of 2011 due to an adjustment for tax benefits associated with the goodwill attributable to Lodestar Investment Counsel, LLC ("Lodestar"), an investment management firm and wholly-owned subsidiary of the Company.

We have other intangible assets capitalized on the Consolidated Statements of Financial Condition in the form of core deposit premiums, client relationships and assembled workforce. These intangible assets are being amortized over their estimated useful lives, which range from 3 years to 15 years. We review intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. During third quarter 2011, there were no events or circumstances to indicate there may be impairment of intangible assets.

                                                                             Other Intangible Assets  

(Amounts in thousands)

	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
	September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010
Core deposit intangible.	$	18,093	$	18,093	$	4,835	$	4,098	$	13,258	$	13,995
Client relationships		4,900		4,900		2,463		2,168		2,437		2,732
Assembled workforce		736		736		716		623		20		113
Total	$	23,729	$	23,729	$	8,014	$	6,889	$	15,715	$	16,840

Additional Information – Other Intangible Assets

(Dollars in thousands)

	September 30, 2011
Weighted average remaining life at period-end (in years):
Core deposit intangible		5
Client relationships		8
Assembled workforce		Less than 1

Amortization expense for other intangible assets totaled $374,000 and $413,000 for the quarters ended September 30, 2011 and September 30, 2010, respectively. For the nine months ended September 30, 2011 and September 30, 2010, amortization expense totaled $1.1 million and $1.2 million, respectively.

Scheduled Amortization of Other Intangible Assets

(Amounts in thousands)

	Total
Year ending December 31,
2011:
Remaining three months	$	362
2012		2,673
2013		3,101
2014		3,190
2015		2,639
2016 and thereafter		3,750
Total	$	15,715

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2011

Earnings Per Common Share

Earnings Per Common Share

12. EARNINGS PER COMMON SHARE

Basic income (loss) per common share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared (distributed earnings) and participation rights in undistributed earnings. Distributed and undistributed earnings are allocated between common and participating security stockholders based on their respective rights to receive dividends. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities (i.e., the Company's deferred stock units and nonvested restricted stock awards and restricted stock units, excluding certain awards with forfeitable rights to dividends). Undistributed net losses are not allocated to holders of participating securities, as they do not have a contractual obligation to fund the losses incurred by the Company. Net income (loss) attributable to common shares is then divided by the weighted-average number of common shares outstanding during the period, net of participating securities.

Diluted income (loss) per common share considers common stock issuable under the assumed release of nonvested restricted stock awards and units with forfeitable dividend rights and the assumed exercise of stock options granted under the Company's stock plans as well as the assumed exercise of warrants related to the U.S. Treasury Capital Purchase Program (potentially dilutive common stock equivalents). Diluted income (loss) attributable to common shares is then divided by the total of weighted-average number of common shares and common stock equivalents outstanding during the period, net of participating securities. Potentially dilutive common stock equivalents are excluded from the computation of diluted earnings per common share in periods in which the effect would reduce the loss per share or increase the income per share (i.e. antidilutive). Diluted earnings per common share is calculated under the more dilutive of either the treasury method or the two-class method.

Basic and Diluted Earnings per Common Share
(Amounts in thousands, except per share data)

	Quarters Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Basic earnings per common share
Net income (loss) attributable to controlling interests	$	13,449	$	7,950	$	33,311	$	(10,395	)
Preferred dividends and discount accretion of preferred stock		3,426		3,405		10,260		10,198
Net income (loss) available to common stockholders		10,023		4,545		23,051		(20,593	)
Less: Earnings allocated to participating stockholders		127		99		268		47
Earnings allocated to common stockholders	$	9,896	$	4,446	$	22,783	$	(20,640	)
Weighted-average common shares outstanding		70,479		70,067		70,418		69,999
Basic earnings per common share	$	0.14	$	0.06	$	0.32	$	(0.29	)

	Quarters Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Diluted earnings per common share
Earnings allocated to common stockholders (1)	$	9,896	$	4,446	$	22,782	$	(20,640	)
Weighted-average common shares outstanding (2):
Weighted-average common shares outstanding		70,479		70,067		70,418		69,999
Dilutive effect of stock awards		142		30		264		—
Weighted-average diluted common shares outstanding		70,621		70,097		70,682		69,999
Diluted earnings per common share	$	0.14	$	0.06	$	0.32	$	(0.29	)
Antidilutive shares not included in diluted earnings per common share computation(2)(3):
Stock options		3,579		3,342		3,514		3,481
Unvested stock/unit awards		272		757		156		1,548
Warrants related to the U.S. Treasury Capital Purchase Program		645		645		645		645
Total antidilutive shares		4,496		4,744		4,315		5,674

⁽¹⁾  Earnings allocated to common stockholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common stock equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate earnings to common stockholders and participating securities for the purposes of calculating diluted earnings per share.

⁽²⁾  Due to the net loss available to common stockholders reported for the nine months ended September 30, 2010, all potentially dilutive common stock equivalents were excluded from the diluted net loss per share computation as their inclusion would have been antidilutive.

⁽³⁾  For the quarter and nine months ended September 30, 2011 and quarter ended September 30, 2010, represents potentially dilutive common stock securities for which the exercise price for the stock options and warrants and fair value of non-vested restricted stock/units was greater than the average market price of our common stock during the period.

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Equity (Schedule Of Components Of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Balance at beginning of period	$ 20,078	$ 27,896
Unrealized gains on securities	47,601	37,719
Unrealized gains on cash flow hedges	1,162
Tax expense on unrealized gains	(19,415)	(14,496)
Reclassification adjustment of net gains included in net income	(5,604)	(3,801)
Reclassification adjustments for tax expense on realized net gains	2,229	1,458
Balance at end of period	46,051	48,776
Unrealized Gain (Loss) On Available-For-Sale Securities [Member]
Balance at beginning of period	20,078	27,896
Unrealized gains on securities	47,601	37,719
Unrealized gains on cash flow hedges
Tax expense on unrealized gains	(18,953)	(14,496)
Reclassification adjustment of net gains included in net income	(5,448)	(3,801)
Reclassification adjustments for tax expense on realized net gains	2,167	1,458
Balance at end of period	45,445	48,776
Accumulated Gain (Loss) On Effective Cash Flow Hedges [Member]
Balance at beginning of period
Unrealized gains on securities
Unrealized gains on cash flow hedges	1,162
Tax expense on unrealized gains	(462)
Reclassification adjustment of net gains included in net income	(156)
Reclassification adjustments for tax expense on realized net gains	62
Balance at end of period	$ 606

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Short-Term Borrowings

9 Months Ended

Sep. 30, 2011

Short-Term Borrowings

Short-Term Borrowings

8. SHORT-TERM BORROWINGS

Summary of Short-Term Borrowings

(Dollars in thousands)

	September 30, 2011					December 31, 2010
	Amount		Rate			Amount		Rate
Federal Home Loan Bank ("FHLB") advances	$	59,154		2.60	%	$	117,620		2.40	%
Other		—		—			941		—
Total short-term borrowings	$	59,154				$	118,561
Unused overnight federal funds availability (1)	$	200,000				$	95,000
Borrowing capacity through the Federal Reserve Bank's ("FRB") discount window primary credit program (2)	$	1,038,348				$	536,836
FHLB advances availability	$	427,842				$	—
Weighted average remaining maturity of FHLB advances at period-end (in months)		7.2					3.9

⁽¹⁾  Our total availability of overnight fed fund borrowings are not committed lines of credit and are dependent upon lender availability.

⁽²⁾  Includes federal term auction facilities. Our borrowing capacity changes each quarter subject to available collateral and FRB discount factors.

The amounts above include any unamortized premium or discount and fair value adjustments recognized in connection with debt acquired through acquisitions.

During the third quarter 2011, we became a member of the FHLB Chicago, establishing access to additional FHLB borrowings of $427.8 million at September 30, 2011. Prior to becoming a member of the FHLB Chicago, we merged into The PrivateBank and Trust Company (the "Bank") former bank subsidiaries that were member banks of the FHLB system. Advances prior to the bank mergers, which as of September 30, 2011 comprise short-term and long-term advances of $59.2 million and $15.0 million, respectively, remain outstanding until maturity.

FHLB advances reported as short-term borrowings represent advances with a remaining maturity of one year or less. FHLB advances are secured by qualifying residential and multi-family mortgages, state and municipal bonds and mortgage-related securities.

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Estimated Fair Value Of Financial Instruments (Reconciliation Of Beginning And Ending Fair Value For Those Fair Value Measurements Using Significant Unobservable Inputs - Level 3) (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010
Transfers in (out) of level 3	$ 0		$ 2,800
Mortgage Loans Held For Sale [Member]
Total gains (losses) included in earnings	16	[1]			16	[1]
Purchases
Issuances	67,402				67,402
Sales	(43,292)				(43,292)
Balance at end of period	24,126				24,126
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	16				16
State and Municipal Securities Available-For-Sale [Member]
Balance at beginning of period							3,615
Purchases
Sales							(3,615)
Settlements
Transfers in (out) of level 3
Derivative Assets [Member]
Balance at beginning of period	2,369		3,505		4,654		1,468
Total gains (losses) included in earnings	(38)	[1]	822	[1]	(175)	[1]	2,408	[1]
Purchases
Issuances					42
Sales
Settlements	(705)		(901)		(3,216)		(2,498)
Transfers in (out) of level 3	(624)		2,583		(303)		4,631
Balance at end of period	1,002		6,009		1,002		6,009
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	(73)		823		(42)		1,192
Derivative Liabilities [Member]
Balance at beginning of period	(11)		(76)		(9)		(101)
Total gains (losses) included in earnings	238	[1]	46	[1]	266	[1]	83	[1]
Purchases
Issuances					(30)		(12)
Sales
Settlements	(242)				(242)
Balance at end of period	(15)		(30)		(15)		(30)
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	$ 238		$ (41)		$ (266)		$ (70)

[1] Amounts disclosed in this line are included in capital markets products income in the Consolidated Statements of Income.

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Commitments, Guarantees, And Contingent Liabilities (Schedule of Commitments, Guarantees, And Contingent Liabilities) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Commitments, Guarantees, And Contingent Liabilities
Home equity lines	$ 161,721	$ 175,365
Residential 1-4 family construction - secured	24,909	15,600
Commercial real estate - secured	84,278	64,388
Commercial and industrial	3,001,902	2,929,215
All other commitments	520,472	686,469
Total commitments to extend credit	3,793,282	3,871,037
Financial standby	292,124	265,675
Performance standby	24,646	32,425
Commercial letters of credit	3,496	115
Total letters of credit	$ 320,266	$ 298,215

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2011

Long-Term Debt

Schedule Of Long-Term Debt

Long-Term Debt

(Dollars in thousands)

	September 30, 2011			December 31, 2010
Parent Company:
3.00% junior subordinated debentures due 2034 (1)(a)	$	8,248		$	8,248
2.06% junior subordinated debentures due 2035 (2)(a)		51,547			51,547
1.85% junior subordinated debentures due 2035 (3)(a)		41,238			41,238
10.00% junior subordinated debentures due 2068 (a)		143,760			143,760
Subtotal		244,793			244,793
Subsidiaries:
Federal Home Loan Bank advances		15,000			50,000
3.87% subordinated debt facility due 2015 (4)(b)		120,000			120,000
Subtotal		135,000			170,000
Total long-term debt	$	379,793		$	414,793
Weighted average interest rate of FHLB long-term advances at period-end		4.42	%		4.39	%
Weighted average remaining maturity of FHLB long-term advances at period-end (in months)		52.2			37.5

⁽¹⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 2.65%.

⁽²⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.71%.

⁽³⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.50%.

⁽⁴⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 3.50%.

^(a)  Qualifies as Tier I capital for regulatory capital purposes; the capital qualification is grandfathered under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

^(b)  Effective in the third quarter 2010, Tier II capital qualification was reduced by 20% of the total balance outstanding and annually thereafter will be reduced by an additional 20%. As of September 30, 2011, 60% of the balance qualified as Tier II capital for regulatory capital purposes.

Scheduled Maturities Of Long-Term Debt

	Total
Year ending December 31,
2012	$	—
2013		5,000
2014		2,000
2015		123,000
2016 and thereafter		249,793
Total	$	379,793

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Covered Assets

9 Months Ended

Sep. 30, 2011

Covered Assets

Covered Assets

6. COVERED ASSETS

Covered assets represent purchased loans and foreclosed loan collateral covered under loss sharing agreements with the FDIC and include an indemnification receivable that represents the present value of the expected reimbursement from the FDIC related to expected losses on the acquired loans and foreclosed real estate under such agreements.

In accordance with applicable authoritative accounting guidance, the purchased loans and related indemnification receivable are recorded at fair value at the date of purchase, and "carrying over" or creating a valuation allowance in the initial accounting for such loans acquired in a transfer is prohibited. At acquisition, we evaluated purchased loans for impairment in accordance with the applicable authoritative guidance and our internal policies. Purchased loans with evidence of credit deterioration at the time of acquisition for which it is probable that all contractually required payments will not be collected are considered impaired ("purchased impaired loans"). All other purchased loans are considered nonimpaired ("purchased nonimpaired loans"). The carrying amount of the covered assets consisting of purchased impaired loans, purchased nonimpaired loans and other assets is presented in the following table.

Covered Assets

(Amounts in thousands)

	September 30, 2011											December 31, 2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Other Assets		Total			Purchased Impaired Loans			Purchased Nonimpaired Loans			Other Assets		Total
Commercial loans	$	10,559		$	23,227		$	—	$	33,786		$	12,824		$	31,988		$	—	$	44,812
Commercial real estate loans		42,395			122,186			—		164,581			57,979			131,215			—		189,194
Residential mortgage loans		287			51,889			—		52,176			258			56,490			—		56,748
Consumer installment and other		281			5,661			306		6,248			197			8,624			308		9,129
Foreclosed real estate		—			—			28,344		28,344			—			—			32,155		32,155
Asset in lieu		—			—			—		—			—			—			469		469
Estimated loss reimbursement by the FDIC		—			—			33,838		33,838			—			—			64,703		64,703
Total covered assets		53,522			202,963			62,488		318,973			71,258			228,317			97,635		397,210
Allowance for covered loan losses		(7,548	)		(9,141	)		—		(16,689	)		(8,601	)		(6,733	)		—		(15,334	)
Net covered assets	$	45,974		$	193,822		$	62,488	$	302,284		$	62,657		$	221,584		$	97,635	$	381,876
Nonperforming covered loans (1)									$	21,677										$	16,357

⁽¹⁾  Excludes purchased impaired loans which are accounted for on a pool basis based on common risk characteristics as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Because we are recognizing interest income on each pool of loans, all purchased impaired loans are considered to be performing.

All purchased loans and the related indemnification asset were recorded at fair value at date of purchase. The initial valuation of these loans and the related indemnification asset required management to make subjective judgments concerning estimates about how the acquired loans would perform in the future using valuation methods including discounted cash flow analysis and independent third party appraisals. Factors that may significantly affect the initial valuation include, among others, market-based and industry data related to expected changes in interest rates, assumptions related to probability and severity of credit losses, estimated timing of credit losses including the foreclosure and liquidation of collateral, expected prepayment rates, required or anticipated loan modifications, unfunded loan commitments, the specific terms and provisions of any loss share agreements, and specific industry and market conditions that may impact independent third party appraisals.

On an ongoing basis, the accounting for purchased loans and the related indemnification asset follows applicable authoritative accounting guidance for purchased nonimpaired loans and purchased impaired loans. The amounts that we realize on these loans and the related indemnification asset could differ materially from the carrying value reflected in these financial statements, based upon the timing and amount of collections on the acquired loans in future periods. Our losses on these assets may be mitigated to the extent covered under the specific terms and provisions of any loss share agreements.

For purchased impaired loans, the excess of cash flows expected at the acquisition date over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan using the constant effective yield method when there is a reasonable expectation about amount and timing of such cash flows. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference. Subsequent decreases to the expected cash flows will generally result in a provision for loan losses, resulting in an increase to the allowance for covered loan losses, and a reclassification from accretable yield to nonaccretable differences. Subsequent increases in cash flows result in a recovery of any previously recorded allowance for covered loans, to the extent applicable, and a reclassification of the difference from nonaccretable to accretable yield with a positive impact on interest income prospectively.

For purchased nonimpaired loans, differences between the purchase price and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loan using a constant effective yield method. Decreases in expected cash flows after the purchase date are recognized by recording an additional allowance for loan losses. For purposes of determining the appropriate allowance for loan losses, purchased nonimpaired loans are aggregated based on common risk characteristics, and measured for impairment on the basis of this aggregation. The allowance for covered loan losses is determined in a manner consistent with the Company's policy for its originated loan portfolio. The following table presents changes in the allowance for covered loan losses for the periods presented.

Allowance for Covered Loan Losses

(Amounts in thousands)

	Quarters Ended September 30,
	2011									2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Total			Purchased Impaired Loans		Purchased Nonimpaired Loans			Total
Balance at beginning of period	$	8,817		$	8,087		$	16,904		$	805	$	4,371		$	5,176
Loans charged-off		(264	)		(66	)		(330	)		—		—			—
Recoveries on loans previously charged-off		24			27			51			—		—			—
Net (charge-offs) recoveries		(240	)		(39	)		(279	)		—		—			—
Provision (release) for covered loan losses (1)		(1,029	)		1,093			64			7,124		(126	)		6,998
Balance at end of period	$	7,548		$	9,141		$	16,689		$	7,929	$	4,245		$	12,174

⁽¹⁾  Includes a provision for credit losses of $274,000 and $1.4 million recorded in the Consolidated Statements of Income for the quarters ended September 30, 2011 and 2010, respectively, representing the Company's 20% non-reimbursable portion under the loss share agreement.

	Nine Months Ended September 30,
	2011									2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Total			Purchased Impaired Loans		Purchased Nonimpaired Loans		Total
Balance at beginning of year	$	8,601		$	6,733		$	15,334		$	755	$	2,009	$	2,764
Loans charged-off		(264	)		(67	)		(331	)		—		—		—
Recoveries on loans previously charged-off		352			72			424			—		—		—
Net recoveries		88			5			93			—		—		—
Provision (release) for covered loan losses (1)		(1,141	)		2,403			1,262			7,174		2,236		9,410
Balance at end of period	$	7,548		$	9,141		$	16,689		$	7,929	$	4,245	$	12,174

⁽¹⁾  Includes a provision for credit losses of $514,000 and $1.9 million recorded in the Consolidated Statements of Income for the nine months ended September 30, 2011 and 2010, respectively, representing the Company's 20% non-reimbursable portion under the loss share agreement.

Disposals (including sales) of loans or foreclosed property result in removal of the asset from the covered asset portfolio at its carrying amount.

Changes in the carrying amount and accretable yield for purchased impaired loans that evidenced deterioration at the acquisition date are set forth in the following table.

Change in Purchased Impaired Loans Accretable Yield and Carrying Amount

(Amounts in thousands)

	2011						2010
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Quarters Ended September 30
Balance at beginning of period	$	9,615		$	62,541		$	38,797		$	91,302
Payments received		—			(3,461	)		—			(2,626	)
Charge-offs/disposals(1)		(6,357	)		(6,357	)		(2,990	)		(2,990	)
Reclassifications from (to) nonaccretable difference, net		4,261			—			(10,850	)		—
Accretion		(799	)		799			(2,201	)		2,201
Balance at end of period	$	6,720		$	53,522		$	22,756		$	87,887
Nine Months Ended September 30
Balance at beginning of period	$	13,253		$	71,258		$	34,790		$	94,140
Payments received		—			(11,848	)		—			(8,580	)
Charge-offs/disposals(1)		(9,471	)		(9,471	)		(5,517	)		(5,446	)
Reclassifications from nonaccretable difference, net		6,521			—			1,256			—
Accretion		(3,583	)		3,583			(7,773	)		7,773
Balance at end of period	$	6,720		$	53,522		$	22,756		$	87,887
Contractual amount outstanding at period end				$	81,985					$	170,942

⁽¹⁾ Includes transfers to covered foreclosed real estate.

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Loans (Schedule Of Credit Quality Indicators Excluding Covered Assets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011		Dec. 31, 2010	Sep. 30, 2010
Special Mention	$ 218,561		$ 398,834
Percentage of Portfolio Loan Type	2.50%		4.40%
Potential Problem Loans	277,125		507,590
Percentage of Portfolio Loan Type	3.20%		5.60%
Non-Performing Loans	304,747		365,880
Percentage of Portfolio Loan Type	3.50%		4.00%
Total Loans	8,674,955	[1]	9,114,357	8,992,129	[1]
Commercial [Member]
Special Mention	54,804		111,929
Percentage of Portfolio Loan Type	1.10%		2.30%
Potential Problem Loans	128,018		173,829
Percentage of Portfolio Loan Type	2.50%		3.50%
Non-Performing Loans	68,689		82,146
Percentage of Portfolio Loan Type	1.30%		1.70%
Total Loans	5,156,052		4,912,877
Commercial Real Estate [Member]
Special Mention	141,465		203,073
Percentage of Portfolio Loan Type	5.70%		7.10%
Potential Problem Loans	108,919		260,042
Percentage of Portfolio Loan Type	4.40%		9.10%
Non-Performing Loans	160,788		202,724
Percentage of Portfolio Loan Type	6.50%		7.10%
Total Loans	2,475,970		2,858,169
Construction [Member]
Special Mention	10,129		67,915
Percentage of Portfolio Loan Type	3.20%		12.80%
Potential Problem Loans	9,625		45,119
Percentage of Portfolio Loan Type	3.00%		8.50%
Non-Performing Loans	29,997		33,403
Percentage of Portfolio Loan Type	9.50%		6.30%
Total Loans	315,858		530,733
Residential Real Estate [Member]
Special Mention	5,427		9,962
Percentage of Portfolio Loan Type	1.80%		3.10%
Potential Problem Loans	20,375		15,101
Percentage of Portfolio Loan Type	6.60%		4.70%
Non-Performing Loans	18,007		14,841
Percentage of Portfolio Loan Type	5.90%		4.70%
Total Loans	307,705		319,146
Home Equity [Member]
Special Mention	1,595		3,757
Percentage of Portfolio Loan Type	0.90%		1.90%
Potential Problem Loans	8,569		11,272
Percentage of Portfolio Loan Type	4.60%		5.70%
Non-Performing Loans	13,440		8,195
Percentage of Portfolio Loan Type	7.20%		4.20%
Total Loans	186,914		197,179
Personal [Member]
Special Mention	5,141		2,198
Percentage of Portfolio Loan Type	2.20%		0.70%
Potential Problem Loans	1,619		2,227
Percentage of Portfolio Loan Type	0.70%		0.80%
Non-Performing Loans	13,826		24,571
Percentage of Portfolio Loan Type	5.90%		8.30%
Total Loans	$ 232,456		$ 296,253

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

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Consolidated Statements of Changes in Equity (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Consolidated Statements of Changes in Equity
Common stock, dividends per share	$ 0.01	$ 0.01	$ 0.03	$ 0.03

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Derivative Instruments (Gain (Loss) Recognized on Derivative Instruments Not Designated in Hedging Relationship) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Total capital markets group derivatives	$ 5,510	$ 3,104	$ 13,870	$ 7,495
Total other derivatives	(38)	(197)	176	(9)
Total derivatives	5,472	2,907	14,046	7,486
Interest Rate Contracts [Member]
Total capital markets group derivatives	3,577	1,924	9,372	4,075
Foreign Exchange Contracts [Member]
Total capital markets group derivatives	1,685	1,134	4,220	3,337
Total other derivatives	42	(233)	128	(6)
Credit Contracts [Member]
Total capital markets group derivatives	248	46	278	83
Mortgage Banking Derivatives [Member]
Total other derivatives	$ (80)	$ 36	$ 48	$ (3)

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New Accounting Standards

9 Months Ended

Sep. 30, 2011

New Accounting Standards

New Accounting Standards

2. NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Pronouncements

Disclosures on Loan Credit Quality and Allowance for Credit Losses – On December 31, 2010, we adopted new accounting guidance issued by the Financial Accounting Standards Board ("FASB") related to improving disclosures about an entity's allowance for loan losses and the credit quality of its loans. The guidance requires additional disclosure to facilitate financial statement users' evaluation of the following: (1) the nature of credit risk inherent in the entity's loan portfolio, (2) how that risk is analyzed and assessed in arriving at the allowance for loan losses, and (3) the changes and reasons for those changes in the allowance for loan losses. This guidance was effective for the Company's financial statements as of December 31, 2010, as it relates to disclosures required as of the end of a reporting period. Disclosures that relate to activity during a reporting period became effective for the Company's financial statements beginning on January 1, 2011. Since the new guidance only affects disclosures, it did not impact our financial position and consolidated results of operations upon adoption.

Fair Value Measurement Disclosures – On January 1, 2011, we adopted the additional disclosure requirements that had a delayed effective date under the new accounting guidance issued by the FASB in January 2010 regarding separate presentation of information about purchases, sales, issuances and settlements for Level 3 fair value measurements. As this guidance only affects disclosures, the adoption of this guidance did not impact our financial position and consolidated results of operations.

Troubled Debt Restructurings – On July 1, 2011, we adopted new guidance related to a creditor's accounting for troubled debt restructurings ("TDRs"), as well as new disclosure requirements related to TDRs. The guidance clarifies whether a modification of a loan receivable constitutes a concession to a borrower that is experiencing financial difficulty. The guidance and disclosures were effective for the Company's financial statements that include periods beginning on or after July 1, 2011, with retrospective application to the Company's annual reporting period beginning on January 1, 2011. The adoption of this guidance did not have a material impact on our financial position and consolidated results of operations.

Accounting Pronouncements Pending Adoption

Transfers and Servicing – On April 29, 2011, the FASB issued amendments to its accounting guidance on the effective control assessment for repurchase agreements that in part determines whether a transaction is accounted for as a sale or a secured borrowing. The amendments remove from the assessment of effective control: (1) the criterion requiring the

transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. In effect, these amendments will cause more repurchase agreements to be accounted for as secured borrowings rather than as sales. The guidance will be effective for the Company's financial statements that include periods beginning on or after January 1, 2012. The adoption of this guidance is not expected to have a material impact on our financial position and consolidated results of operations.

Fair Value Measurement – On May 12, 2011, the FASB issued amendments to its fair value measurement guidance. The amendments substantially converge the principles for measuring fair value and the requirements for related disclosures under U.S. GAAP and International Financial Reporting Standards. The amendments include clarifications and/or new guidance related to the highest and best use and valuation premise, measuring the fair value of an instrument classified in shareholders' equity, measuring the fair value of financial instruments that are managed within a portfolio, and the application of block discounts and other premiums and discounts in a fair value measurement. Additionally, the amendments require additional disclosures about fair value measurements. The guidance will be effective for the Company's financial statements that include periods beginning on or after January 1, 2012. The adoption of this guidance is not expected to have a material impact on our financial position and consolidated results of operations.

Statement of Comprehensive Income – On June 16, 2011, the FASB issued guidance on the presentation of the statement of comprehensive income. This guidance provides the Company the option of presenting net income and other comprehensive income in one continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change what items are reported in other comprehensive income or the U.S. GAAP requirement to report reclassification of items from other comprehensive income to net income. The guidance will be effective for the Company's financial statements that include periods beginning on or after January 1, 2012 and must be retrospectively applied. As this guidance affects only our presentation of the statement of comprehensive income, the adoption of this guidance will not have a material impact on our financial position and consolidated results of operations.

Testing Goodwill for Impairment – On September 15, 2011, the FASB issued guidance that permits the Company to perform a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying value before applying the existing two-step goodwill impairment test. If the Company concludes that this is the case, the Company would proceed with the existing two-step test, whereby the Company would quantitatively determine whether the fair value of a reporting unit is less than its carrying value, and if so, measure the amount of any goodwill impairment. Otherwise, the Company would be able to bypass the two-step test and conclude that goodwill is not impaired from a qualitative perspective. The guidance will be effective for the Company's financial statements that include periods beginning on or after January 1, 2012. The adoption of this guidance will not have a material impact on our financial position and consolidated results of operations.

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Operating Segments (Tables)

9 Months Ended

Sep. 30, 2011

Operating Segments

Operating Segments Performance

		0000000000		0000000000		0000000000		0000000000			0000000000			0000000000			0000000000		0000000000
	Quarters Ended September 30,
	Banking				Trust and Investments					Holding Company and Other Adjustments						Consolidated Company
	2011		2010		2011		2010			2011			2010			2011		2010
Net interest income	$	105,213	$	103,957	$	635	$	657		$	(4,759	)	$	(5,655	)	$	101,089	$	98,959
Provision for loan and covered loan losses		32,615		41,435		—		—			—			—			32,615		41,435
Non-interest income		23,162		19,023		4,457		4,295			16			42			27,635		23,360
Non-interest expense		65,157		56,481		4,680		4,844			5,197			6,752			75,034		68,077
Income (loss) before taxes		30,603		25,064		412		108			(9,940	)		(12,365	)		21,075		12,807
Income tax provision (benefit)		11,156		9,450		164		42			(3,727	)		(4,706	)		7,593		4,786
Net income (loss)		19,447		15,614		248		66			(6,213	)		(7,659	)		13,482		8,021
Noncontrolling interest expense		—		—		33		71			—			—			33		71
Net income (loss) attributable to controlling interests	$	19,447	$	15,614	$	215	$	(5	)	$	(6,213	)	$	(7,659	)	$	13,449	$	7,950

		0000000000		0000000000		0000000000		0000000000			0000000000			0000000000			0000000000		0000000000
	Nine Months Ended September 30,
	Banking				Trust and Investments					Holding Company and Other Adjustments						Consolidated Company
	2011		2010		2011		2010			2011			2010			2011		2010
Net interest income	$	316,521	$	315,765	$	1,899	$	1,976		$	(14,275	)	$	(17,131	)	$	304,145	$	300,610
Provision for loan and covered loan losses		101,286		159,375		—		—			—			—			101,286		159,375
Non-interest income		58,695		44,696		14,138		13,555			21			130			72,854		58,381
Non-interest expense		193,938		180,005		14,544		15,187			17,565			22,258			226,047		217,450
Income (loss) before taxes		79,992		21,081		1,493		344			(31,819	)		(39,259	)		49,666		(17,834	)
Income tax provision (benefit)		27,580		7,010		595		134			(11,983	)		(14,800	)		16,192		(7,656	)
Net income (loss)		52,412		14,071		898		210			(19,836	)		(24,459	)		33,474		(10,178	)
Noncontrolling interest expense		—		—		163		217			—			—			163		217
Net income (loss) attributable to controlling interests	$	52,412	$	14,071	$	735	$	(7	)	$	(19,836	)	$	(24,459	)	$	33,311	$	(10,395	)

Selected Balances	Banking				Holding Company and Other Adjustments (1)						Consolidated Company
	9/30/11		12/31/10		9/30/11			12/31/10			9/30/11		12/31/10
Assets	$	10,650,944	$	11,180,923	$	1,368,917		$	1,284,698		$	12,019,861	$	12,465,621
Total loans		8,674,955		9,114,357		—			—			8,674,955		9,114,357
Deposits		10,276,112		10,720,500		(167,449	)		(185,071	)		10,108,663		10,535,429

⁽¹⁾  Deposit amounts represent the elimination of Holding Company cash accounts included in total deposits of the Banking segment.

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Short-Term Borrowings (Tables)

9 Months Ended

Sep. 30, 2011

Short-Term Borrowings

Summary Of Short-Term Borrowings

Summary of Short-Term Borrowings

(Dollars in thousands)

	September 30, 2011					December 31, 2010
	Amount		Rate			Amount		Rate
Federal Home Loan Bank ("FHLB") advances	$	59,154		2.60	%	$	117,620		2.40	%
Other		—		—			941		—
Total short-term borrowings	$	59,154				$	118,561
Unused overnight federal funds availability (1)	$	200,000				$	95,000
Borrowing capacity through the Federal Reserve Bank's ("FRB") discount window primary credit program (2)	$	1,038,348				$	536,836
FHLB advances availability	$	427,842				$	—
Weighted average remaining maturity of FHLB advances at period-end (in months)		7.2					3.9

⁽¹⁾  Our total availability of overnight fed fund borrowings are not committed lines of credit and are dependent upon lender availability.

⁽²⁾  Includes federal term auction facilities. Our borrowing capacity changes each quarter subject to available collateral and FRB discount factors.

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Operating Segments (Operating Segments Performance) (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010		Dec. 31, 2010
Net interest income	$ 101,089		$ 98,959		$ 304,145		$ 300,610
Provision for loan and covered loan losses	32,615		41,435		101,286		159,375
Non-interest income	27,635		23,360		72,854		58,381
Non-interest expense	75,034		68,077		226,047		217,450
Income (loss) before taxes	21,075		12,807		49,666		(17,834)
Income tax provision (benefit)	7,593		4,786		16,192		(7,656)
Net income (loss)	13,482		8,021		33,474		(10,178)
Noncontrolling interest expense	33		71		163		217
Net income (loss) attributable to controlling interests	13,449		7,950		33,311		(10,395)
Assets	12,019,861				12,019,861				12,465,621
Total Loans	8,674,955	[1]	8,992,129	[1]	8,674,955	[1]	8,992,129	[1]	9,114,357
Deposits	10,108,663				10,108,663				10,535,429
Banking [Member]
Net interest income	105,213		103,957		316,521		315,765
Provision for loan and covered loan losses	32,615		41,435		101,286		159,375
Non-interest income	23,162		19,023		58,695		44,696
Non-interest expense	65,157		56,481		193,938		180,005
Income (loss) before taxes	30,603		25,064		79,992		21,081
Income tax provision (benefit)	11,156		9,450		27,580		7,010
Net income (loss)	19,447		15,614		52,412		14,071
Net income (loss) attributable to controlling interests	19,447		15,614		52,412		14,071
Assets	10,650,944				10,650,944				11,180,923
Total Loans	8,674,955				8,674,955				9,114,357
Deposits	10,276,112				10,276,112				10,720,500
Trust And Investments [Member]
Net interest income	635		657		1,899		1,976
Provision for loan and covered loan losses
Non-interest income	4,457		4,295		14,138		13,555
Non-interest expense	4,680		4,844		14,544		15,187
Income (loss) before taxes	412		108		1,493		344
Income tax provision (benefit)	164		42		595		134
Net income (loss)	248		66		898		210
Noncontrolling interest expense	33		71		163		217
Net income (loss) attributable to controlling interests	215		(5)		735		(7)
Holding Company and Other Adjustments [Member]
Net interest income	(4,759)		(5,655)		(14,275)		(17,131)
Provision for loan and covered loan losses
Non-interest income	16		42		21		130
Non-interest expense	5,197		6,752		17,565		22,258
Income (loss) before taxes	(9,940)		(12,365)		(31,819)		(39,259)
Income tax provision (benefit)	(3,727)		(4,706)		(11,983)		(14,800)
Net income (loss)	(6,213)		(7,659)		(19,836)		(24,459)
Net income (loss) attributable to controlling interests	(6,213)		(7,659)		(19,836)		(24,459)
Assets	1,368,917	[2]			1,368,917	[2]			1,284,698	[2]
Total Loans		[2]				[2]				[2]
Deposits	$ (167,449)	[2]			$ (167,449)	[2]			$ (185,071)	[2]

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

[2] Deposit amounts represent the elimination of Holding Company cash accounts included in total deposits of the Banking segment.

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Allowance For Loan Losses And Reserve For Unfunded Commitments (Reserve For Unfunded Commitments) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010		Jun. 30, 2011
Allowance For Loan Losses And Reserve For Unfunded Commitments
Balance at beginning of year	$ 5,817	[1]	$ 8,119	[1]	$ 1,452	[1]	$ 6,986	[1]
(Release) provision for unfunded commitments	(550)	[1]	(1,133)	[1]	3,815	[1]
Balance at end of period year	5,267	[1]	6,986	[1]	5,267	[1]	6,986	[1]
Unfunded commitments, excluding covered assets, at period end	$ 3,891,922	[1]	$ 4,083,779	[1]	$ 3,891,922	[1]

[1] Unfunded commitments include commitments to extend credit, standby letters of credit and commercial letters of credit.

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Covered Assets (Changes in Allowance for Covered Loan Losses) (Details) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010
Balance at beginning of period					$ 15,334,000
Balance at end of period	16,689,000				16,689,000
Provision for credit losses	274,000		1,400,000		514,000,000		1,900,000
Non-reimbursable portion under the loss share agreement	20.00%		20.00%		20.00%		20.00%
Covered Assets [Member] | Purchased Impaired Loans [Member]
Balance at beginning of period	8,817,000		805,000		8,601,000		755,000
Loans charged-off	(264,000)				(264,000)
Recoveries on loans previously charged-off	24,000				352,000
Net (charge-offs) recoveries	(240,000)				88,000
Provision (release) for covered loan losses	(1,029,000)	[1]	7,124,000	[1]	(1,141,000)	[2]	7,174,000	[2]
Balance at end of period	7,548,000		7,929,000		7,548,000		7,929,000
Covered Assets [Member] | Purchased Nonimpaired Loans [Member]
Balance at beginning of period	8,087,000		4,371,000		6,733,000		2,009,000
Loans charged-off	(66,000)				(67,000)
Recoveries on loans previously charged-off	27,000				72,000
Net (charge-offs) recoveries	(39,000)				5,000
Provision (release) for covered loan losses	1,093,000	[1]	(126,000)	[1]	2,403,000	[2]	2,236,000	[2]
Balance at end of period	9,141,000		4,245,000		9,141,000		4,245,000
Covered Assets [Member]
Balance at beginning of period	16,904,000		5,176,000		15,334,000		2,764,000
Loans charged-off	(330,000)				(331,000)
Recoveries on loans previously charged-off	51,000				424,000
Net (charge-offs) recoveries	(279,000)				93,000
Provision (release) for covered loan losses	64,000	[1]	6,998,000	[1]	1,262,000	[2]	9,410,000	[2]
Balance at end of period	$ 16,689,000		$ 12,174,000		$ 16,689,000		$ 12,174,000

[1] Includes a provision for credit losses of $274,000 and $1.4 million recorded in the Consolidated Statements of Income for the quarters ended September 30, 2011 and 2010, respectively, representing the Company's 20% non-reimbursable portion under the loss share agreement.

[2] Includes a provision for credit losses of $514,000 and $1.9 million recorded in the Consolidated Statements of Income for the nine months ended September 30, 2011 and 2010, respectively, representing the Company's 20% non-reimbursable portion under the loss share agreement.

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Loans (Average Recorded Investment and Interest Income Recognized on Impaired Loans) (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010
Average Recorded Investment	$ 447,124	[1]	$ 400,237	[1]	$ 460,292	[1]	$ 411,052	[1]
Interest Income Recognized	1,964	[1]			4,479	[1]
Commercial [Member]
Average Recorded Investment	124,933	[1]			103,678	[1]
Interest Income Recognized	1,054	[1]			1,723	[1]
Commercial Real Estate [Member]
Average Recorded Investment	220,484	[1]			254,048	[1]
Interest Income Recognized	708	[1]			2,205	[1]
Construction [Member]
Average Recorded Investment	37,409	[1]			38,368	[1]
Interest Income Recognized	49	[1]			123	[1]
Residential Real Estate [Member]
Average Recorded Investment	19,923	[1]			18,646	[1]
Interest Income Recognized	14	[1]			33	[1]
Home Equity [Member]
Average Recorded Investment	13,791	[1]			12,172	[1]
Interest Income Recognized	17	[1]			20	[1]
Personal [Member]
Average Recorded Investment	30,584	[1]			33,380	[1]
Interest Income Recognized	$ 122	[1]			$ 375	[1]

[1] Represents amounts while classified as impaired for the periods presented.

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Goodwill And Other Intangible Assets (Other Intangible Assets) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Gross Carrying Amount - Other Intangible Assets	$ 23,729	$ 23,729
Accumulated Amortization - Other Intangible Assets	8,014	6,889
Net Carrying Amount - Other Intangible Assets	15,715	16,840
Core Deposit Intangible [Member]
Gross Carrying Amount - Other Intangible Assets	18,093	18,093
Accumulated Amortization - Other Intangible Assets	4,835	4,098
Net Carrying Amount - Other Intangible Assets	13,258	13,995
Client Relationships [Member]
Gross Carrying Amount - Other Intangible Assets	4,900	4,900
Accumulated Amortization - Other Intangible Assets	2,463	2,168
Net Carrying Amount - Other Intangible Assets	2,437	2,732
Assembled Workforce [Member]
Gross Carrying Amount - Other Intangible Assets	736	736
Accumulated Amortization - Other Intangible Assets	716	623
Net Carrying Amount - Other Intangible Assets	$ 20	$ 113

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Securities

9 Months Ended

Sep. 30, 2011

Securities

Securities

3. SECURITIES

Securities Portfolio

(Amounts in thousands)

	September 30, 2011									December 31, 2010
	Amortized Cost		Gross Unrealized					Fair Value		Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses							Gains		Losses
Securities Available-for-Sale
U.S. Treasury	$	35,844	$	562	$	—		$	36,406	$	—	$	—	$	—		$	—
U.S. Agencies		10,049		79		—			10,128		10,155		271		—			10,426
Collateralized mortgage obligations		369,081		14,656		(52	)		383,685		450,251		9,400		(7,930	)		451,721
Residential mortgage-backed securities		1,242,968		49,203		(3	)		1,292,168		1,222,642		31,701		(7,312	)		1,247,031
State and municipal		139,963		9,779		(42	)		149,700		166,209		6,433		(534	)		172,108
Foreign sovereign debt		500		—		—			500		500		—		—			500
Total	$	1,798,405	$	74,279	$	(97	)	$	1,872,587	$	1,849,757	$	47,805	$	(15,776	)	$	1,881,786
Securities Held-to-Maturity
Residential mortgage-backed securities	$	273,200	$	652	$	(988	)	$	272,864	$	—	$	—	$	—		$	—
Non-marketable Equity Securities
FHLB stock	$	40,909	$	—	$	—		$	40,909	$	20,694	$	—	$	—		$	20,694
Other		2,985		—		—			2,985		2,843		—		—			2,843
Total	$	43,894	$	—	$	—		$	43,894	$	23,537	$	—	$	—		$	23,537

Non-marketable equity securities primarily consist of Federal Home Loan Bank ("FHLB") stock and represent amounts required to be invested in the common stock of the FHLB. This equity security is "restricted" in that it can only be sold to the FHLB or another member institution at par. Therefore, it is less liquid than other equity securities. The fair value is estimated to be cost, and no other-than-temporary impairments have been recorded on these securities during 2011 and 2010.

The carrying value of securities pledged to secure public deposits, trust deposits, derivative transactions with counterparty banks, standby letters of credit with counterparty banks and for other purposes as permitted or required by law, totaled $609.3 million at September 30, 2011 and $656.3 million at December 31, 2010.

Excluding securities issued or backed by the U.S. Government and its agencies and U.S. Government-sponsored enterprises, there were no investments in securities from one issuer that exceeded 10% of consolidated equity on September 30, 2011 or December 31, 2010.

The following table presents the aggregate amount of unrealized losses and the aggregate related fair values of securities with unrealized losses as of September 30, 2011 and December 31, 2010. The securities presented are grouped according to the time periods during which the securities have been in a continuous unrealized loss position.

Securities In Unrealized Loss Position

(Amounts in thousands)

	Less Than 12 Months					12 Months or Longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
As of September 30, 2011
Securities Available-for-Sale
Collateralized mortgage obligations	$	12,794	$	(52	)	$	—	$	—	$	12,794	$	(52	)
Residential mortgage-backed securities		185		(3	)		—		—		185		(3	)
State and municipal		13,229		(42	)		—		—		13,229		(42	)
Total	$	26,208	$	(97	)	$	—	$	—	$	26,208	$	(97	)
Securities Held-to-Maturity
Residential mortgage-backed securities	$	183,409	$	(988	)	$	—	$	—	$	183,409	$	(988	)
As of December 31, 2010
Securities Available-for-Sale
Collateralized mortgage obligations	$	148,643	$	(7,930	)	$	—	$	—	$	148,643	$	(7,930	)
Residential mortgage-backed securities		378,211		(7,312	)		—		—		378,211		(7,312	)
State and municipal		33,710		(534	)		—		—		33,710		(534	)
Total	$	560,564	$	(15,776	)	$	—	$	—	$	560,564	$	(15,776	)

There were no securities in an unrealized loss position for greater than 12 months at September 30, 2011 or December 31, 2010. The unrealized losses reported for collateralized mortgage obligations and residential mortgage-backed securities were caused primarily by changes in interest rates with the value of such securities also being affected by the guarantee of such investments' contractual cash flows by either U.S. Government agencies or by U.S. Government-sponsored enterprises. The unrealized losses reported for state and municipal securities were caused primarily by changes in interest rates and spreads.

Since the declines in fair value on these securities are attributable to changes in interest rates, and because we do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2011.

Remaining Contractual Maturity of Securities

(Amounts in thousands)

	September 30, 2011
	Available-For Sale				Held-To-Maturity and Non-Marketable Equity Securities
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasury, U.S. Agencies, state and municipals and foreign sovereign debt securities
One year or less	$	2,298	$	2,320	$	—	$	—
One year to five years		65,768		67,834		—		—
Five years to ten years		93,367		100,388		—		—
After ten years		24,923		26,192		—		—
All other securities
Collateralized mortgage obligations		369,081		383,685		—		—
Residential mortgage-backed securities		1,242,968		1,292,168		273,200		272,864
Non-marketable equity securities		—		—		43,894		43,894
Total	$	1,798,405	$	1,872,587	$	317,094	$	316,758

Securities Gains (Losses)

(Amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Proceeds from sales	$	219,589		$	167,946		$	280,082		$	197,841
Gross realized gains		4,658			3,215			5,930			4,154
Gross realized losses		(288	)		(186	)		(523	)		(1,281	)
Net realized gains	$	4,370		$	3,029		$	5,407		$	2,873
Income tax provision on net realized gains	$	1,740		$	1,161		$	2,150		$	1,097

Refer to Note 11 for additional details of the securities available-for-sale portfolio and the related impact of unrealized gains (losses) on other comprehensive income.

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Income Taxes (Components of Income Taxes) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Income Taxes
Income (loss) before income taxes	$ 21,075	$ 12,807	$ 49,666	$ (17,834)
Current income tax provision	4,441	9,923	10,461	4,763
Deferred income tax provision (benefit)	3,152	(5,137)	5,731	(12,419)
Total income tax provision (benefit)	$ 7,593	$ 4,786	$ 16,192	$ (7,656)
Effective tax rate	36.00%	37.40%	32.60%	(42.90%)

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Securities (Securities Portfolio) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Securities available-for-sale, amortized cost	$ 1,798,405	$ 1,849,757
Securities available-for-sale, gross unrealized gains	74,279	47,805
Securities available-for-sale, gross unrealized losses	(97)	(15,776)
Securities available-for-sale, at fair value	1,872,587	1,881,786
Securities held-to-maturity, at fair value	273,200
Non-marketable equity securities, amortized cost	43,894	23,537
Non-marketable equity securities, gross unrealized gains
Non-marketable equity securities gross unrealized losses
Non-marketable equity securities, at fair value	43,894	23,537
U.S. Treasury [Member]
Securities available-for-sale, amortized cost	35,844
Securities available-for-sale, gross unrealized gains	562
Securities available-for-sale, gross unrealized losses
Securities available-for-sale, at fair value	36,406
U.S. Agencies [Member]
Securities available-for-sale, amortized cost	10,049	10,155
Securities available-for-sale, gross unrealized gains	79	271
Securities available-for-sale, gross unrealized losses
Securities available-for-sale, at fair value	10,128	10,426
Collateralized Mortgage Obligations [Member]
Securities available-for-sale, amortized cost	369,081	450,251
Securities available-for-sale, gross unrealized gains	14,656	9,400
Securities available-for-sale, gross unrealized losses	(52)	(7,930)
Securities available-for-sale, at fair value	383,685	451,721
Residential Mortgage-Backed Securities [Member]
Securities available-for-sale, amortized cost	1,242,968	1,222,642
Securities available-for-sale, gross unrealized gains	49,203	31,701
Securities available-for-sale, gross unrealized losses	(3)	(7,312)
Securities available-for-sale, at fair value	1,292,168	1,247,031
Securities held-to-maturity, amortized cost	273,200
Securities held-to-maturity, gross unrealized gains	652
Securities held-to-maturity, gross unrealized losses	(988)
Securities held-to-maturity, at fair value	272,864
State and Municipal [Member]
Securities available-for-sale, amortized cost	139,963	166,209
Securities available-for-sale, gross unrealized gains	9,779	6,433
Securities available-for-sale, gross unrealized losses	(42)	(534)
Securities available-for-sale, at fair value	149,700	172,108
Foreign Sovereign Debt [Member]
Securities available-for-sale, amortized cost	500	500
Securities available-for-sale, gross unrealized gains
Securities available-for-sale, gross unrealized losses
Securities available-for-sale, at fair value	500	500
FHLB Stock [Member]
Non-marketable equity securities, amortized cost	40,909	20,694
Non-marketable equity securities, gross unrealized gains
Non-marketable equity securities gross unrealized losses
Non-marketable equity securities, at fair value	40,909	20,694
Other Non-Marketable Equity Securities [Member]
Non-marketable equity securities, amortized cost	2,985	2,843
Non-marketable equity securities, gross unrealized gains
Non-marketable equity securities gross unrealized losses
Non-marketable equity securities, at fair value	$ 2,985	$ 2,843

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Allowance For Loan Losses And Reserve For Unfunded Commitments (Tables)

9 Months Ended

Sep. 30, 2011

Allowance For Loan Losses And Reserve For Unfunded Commitments

Allowance For Loan Losses And Recorded Investment In Loans

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Allowance for Loan Losses
Balance at beginning of period	$	206,286		$	232,411		$	222,821		$	221,688
Loans charged-off		(41,986	)		(50,622	)		(129,594	)		(159,992	)
Recoveries on loans previously charged-off		3,400			1,572			6,042			4,207
Net charge-offs		(38,586	)		(49,050	)		(123,552	)		(155,785	)
Provision for loan losses		32,341			40,031			100,772			157,489
Balance at end of period	$	200,041		$	223,392		$	200,041		$	223,392
Ending balance, individually evaluated for impairment (2)	$	72,191		$	68,716
Ending balance, collectively evaluated for impairment	$	127,850		$	154,676
Recorded investment in Loans
Ending balance, individually evaluated for impairment (2)	$	411,077		$	431,815
Ending balance, collectively evaluated for impairment		8,263,878			8,560,314
Total recorded investment in loans	$	8,674,955		$	8,992,129

⁽¹⁾  Refer to Note 6 for a detailed discussion regarding covered assets.

⁽²⁾  Refer to Note 4 for additional information regarding impaired loans.

	For the Quarter Ended September 30, 2011
	Commercial			Commercial Real Estate			Construction			Residential Real Estate			Home Equity			Personal			Total
Allowance for Loan Losses:
Balance at beginning of period	$	56,352		$	111,535		$	17,731		$	7,065		$	6,626		$	6,977		$	206,286
Loans charged-off		(5,039	)		(29,920	)		(1,419	)		(234	)		(3,291	)		(2,083	)		(41,986	)
Recoveries on loans previously charged-off		2,278			969			29			9			12			103			3,400
Net charge-offs		(2,761	)		(28,951	)		(1,390	)		(225	)		(3,279	)		(1,980	)		(38,586	)
Provision for loan losses		9,251			15,507			1,756			276			2,498			3,053			32,341
Balance at end of period	$	62,842		$	98,091		$	18,097		$	7,116		$	5,845		$	8,050		$	200,041

	For the Nine Months Ended September 30, 2011
	Commercial			Commercial Real Estate			Construction			Residential Real Estate			Home Equity			Personal			Total
Allowance for Loan Losses:
Balance at beginning of year	$	70,115		$	110,853		$	19,778		$	5,321		$	5,764		$	10,990		$	222,821
Loans charged-off		(19,751	)		(84,731	)		(9,756	)		(806	)		(5,246	)		(9,304	)		(129,594	)
Recoveries on loans previously charged-off		3,450			1,752			182			51			37			570			6,042
Net charge-offs		(16,301	)		(82,979	)		(9,574	)		(755	)		(5,209	)		(8,734	)		(123,552	)
Provision for loan losses		9,028			70,217			7,893			2,550			5,290			5,794			100,772
Balance at end of period	$	62,842		$	98,091		$	18,097		$	7,116		$	5,845		$	8,050		$	200,041
Ending balance, individually evaluated for impairment (2)	$	17,842		$	38,091		$	7,647		$	1,316		$	2,345		$	4,950		$	72,191
Ending balance, collectively evaluated for impairment	$	45,000		$	60,000		$	10,450		$	5,800		$	3,500		$	3,100		$	127,850
Recorded Investment in Loans:
Ending balance, individually evaluated for impairment (2)	$	118,842		$	201,871		$	29,997		$	19,070		$	13,616		$	27,681		$	411,077
Ending balance, collectively evaluated for impairment		5,037,210			2,274,099			285,861			288,635			173,298			204,775			8,263,878
Total recorded investment in loans	$	5,156,052		$	2,475,970		$	315,858		$	307,705		$	186,914		$	232,456		$	8,674,955

⁽¹⁾  Refer to Note 6 for a detailed discussion regarding covered assets.

⁽²⁾  Refer to Note 4 for additional information regarding impaired loans.

Reserve For Unfunded Commitments

	Quarters Ended September 30,					Nine Months Ended September 30,
	2011		2010			2011			2010
Balance at beginning of period	$	6,986	$	5,817		$	8,119		$	1,452
(Release) provision for unfunded commitments		—		(550	)		(1,133	)		3,815
Balance at end of period	$	6,986	$	5,267		$	6,986		$	5,267
Unfunded commitments, excluding covered assets, at period end (1)	$	4,083,779	$	3,891,922

⁽¹⁾  Unfunded commitments include commitments to extend credit, standby letters of credit and commercial letters of credit.

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Goodwill And Other Intangible Assets (Scheduled Amortization of Other Intangible Assets) (Details) (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011
Goodwill And Other Intangible Assets
2011: Remaining three months	$ 362
2012	2,673
2013	3,101
2014	3,190
2015	2,639
2016 and thereafter	3,750
Total	$ 15,715

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Estimated Fair Value Of Financial Instruments (Fair Value Measurements On A Recurring Basis) (Details) (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010
Total securities available-for-sale	$ 1,872,587		$ 1,881,786
Mortgage loans held for sale	24,126
Capital markets derivative assets	111,205	[1]	100,250	[1]
Capital markets derivative liabilities	113,934	[1]	102,018	[1]
Other assets	385	[2]	250	[2]
Other liabilities	245	[2]	280	[2]
Total assets	2,008,303		1,982,286
Total liabilities	114,179		102,298
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Total securities available-for-sale	36,406
Mortgage loans held for sale
Capital markets derivative assets				[1]
Capital markets derivative liabilities				[1]
Other assets				[2]
Other liabilities				[2]
Total assets	36,406
Total liabilities
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Treasury [Member]
Total securities available-for-sale	36,406
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Agencies [Member]
Total securities available-for-sale
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateralized Mortgage Obligations [Member]
Total securities available-for-sale
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Residential Mortgage-Backed Securities [Member]
Total securities available-for-sale
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | State and Municipal [Member]
Total securities available-for-sale
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Foreign Sovereign Debt [Member]
Total securities available-for-sale
Significant Other Observable Inputs (Level 2) [Member]
Total securities available-for-sale	1,836,181		1,881,786
Capital markets derivative assets	110,203	[1]	95,596	[1]
Capital markets derivative liabilities	113,919	[1]	102,009	[1]
Other assets	385	[2]	250	[2]
Other liabilities	245	[2]	280	[2]
Total assets	1,946,769		1,977,632
Total liabilities	114,164		102,289
Significant Other Observable Inputs (Level 2) [Member] | U.S. Agencies [Member]
Total securities available-for-sale	10,128		10,426
Significant Other Observable Inputs (Level 2) [Member] | Collateralized Mortgage Obligations [Member]
Total securities available-for-sale	383,685		451,721
Significant Other Observable Inputs (Level 2) [Member] | Residential Mortgage-Backed Securities [Member]
Total securities available-for-sale	1,292,168		1,247,031
Significant Other Observable Inputs (Level 2) [Member] | State and Municipal [Member]
Total securities available-for-sale	149,700		172,108
Significant Other Observable Inputs (Level 2) [Member] | Foreign Sovereign Debt [Member]
Total securities available-for-sale	500		500
Significant Unobservable Inputs (Level 3) [Member]
Mortgage loans held for sale	24,126
Capital markets derivative assets	1,002	[1]	4,654	[1]
Capital markets derivative liabilities	15	[1]	9	[1]
Total assets	25,128		4,654
Total liabilities	15		9
U.S. Treasury [Member]
Total securities available-for-sale	36,406
U.S. Agencies [Member]
Total securities available-for-sale	10,128		10,426
Collateralized Mortgage Obligations [Member]
Total securities available-for-sale	383,685		451,721
Residential Mortgage-Backed Securities [Member]
Total securities available-for-sale	1,292,168		1,247,031
State and Municipal [Member]
Total securities available-for-sale	149,700		172,108
Foreign Sovereign Debt [Member]
Total securities available-for-sale	$ 500		$ 500

[1] Capital market derivative assets and derivative liabilities include client-related derivatives.

[2] Other assets and other liabilities include derivatives designated in hedging relationships, derivatives for commitments to fund certain mortgage loans held for sale and end-user foreign exchange derivatives.

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Derivative Instruments (Composition of Derivative Instruments and Fair Value) (Details) (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010
Not Designated as Hedging Instrument [Member] | Capital Markets Group Derivatives [Member] | Liability Derivatives [Member]
Interest rate contracts, Notional/Contract Amount	$ 2,954,304	[1],[2]	$ 3,028,827	[1],[2]
Interest rate contracts, Fair Value	116,844	[1]	104,799	[1]
Foreign exchange contracts, Notional/Contract Amount	155,262	[1],[2]	109,956	[1],[2]
Foreign exchange contracts, Fair Value	6,600	[1]	3,416	[1]
Credit contracts, Notional/Contract Amount	62,698	[1],[2]	68,945	[1],[2]
Credit contracts, Fair Value	15	[1]	9	[1]
Capital markets group derivatives, Fair Value	123,459	[1]	108,224	[1]
Less: netting adjustments	(9,491)	[1]	(6,206)	[1]
Not Designated as Hedging Instrument [Member] | Capital Markets Group Derivatives [Member] | Asset Derivatives [Member]
Interest rate contracts, Notional/Contract Amount	2,954,304	[1],[2]	3,028,827	[1],[2]
Interest rate contracts, Fair Value	113,417	[1]	102,386	[1]
Foreign exchange contracts, Notional/Contract Amount	155,262	[1],[2]	109,956	[1],[2]
Foreign exchange contracts, Fair Value	7,300	[1]	4,069	[1]
Credit contracts, Notional/Contract Amount	43,249	[1],[2]	4,523	[1],[2]
Credit contracts, Fair Value	12	[1]	1	[1]
Capital markets group derivatives, Fair Value	120,729	[1]	106,456	[1]
Less: netting adjustments	(9,481)	[1]	(6,206)	[1]
Not Designated as Hedging Instrument [Member] | Other Derivatives [Member] | Liability Derivatives [Member]
Foreign exchange contracts, Notional/Contract Amount				[2],[3]
Foreign exchange contracts, Fair Value				[3]
Other derivatives subtotal, Fair Value	245	[3]	280	[3]
Mortgage banking derivatives, Fair Value	245	[3]	280	[3]
Not Designated as Hedging Instrument [Member] | Other Derivatives [Member] | Asset Derivatives [Member]
Foreign exchange contracts, Notional/Contract Amount	3,935	[2],[3]	4,425	[2],[3]
Foreign exchange contracts, Fair Value	156	[3]	29	[3]
Other derivatives subtotal, Fair Value	385	[3]	250	[3]
Mortgage banking derivatives, Fair Value	229	[3]	221	[3]
Not Designated as Hedging Instrument [Member] | Liability Derivatives [Member]
Total derivative liability	114,213	[3]	102,298	[3]
Not Designated as Hedging Instrument [Member] | Asset Derivatives [Member]
Total derivative assets	111,633	[3]	100,500	[3]
Designated as Hedging Instrument [Member] | Liability Derivatives [Member]
Interest rate contracts, Notional/Contract Amount	25,000	[2],[3]
Interest rate contracts, Fair Value	55	[3]
Less: netting adjustments	(55)	[3],[4]
Designated as Hedging Instrument [Member] | Asset Derivatives [Member]
Interest rate contracts, Notional/Contract Amount	75,000	[2],[3]
Interest rate contracts, Fair Value	1,061	[3]
Total derivative assets	1,006	[3]
Less: netting adjustments	(55)	[3],[4]
Liability Derivatives [Member]
Total derivative liability	113,968	[1]	102,018	[1]
Total derivatives, Fair Value	114,213		102,298
Asset Derivatives [Member]
Total derivative assets	111,248	[1]	100,250	[1]
Total derivatives, Fair Value	$ 112,639		$ 100,500

[1] Capital markets group asset and liability derivatives are reported separately on the Consolidated Statement of Financial Condition.

[2] The remaining average notional amounts are shown for credit contracts.

[3] Derivative assets and liabilities designated as hedging instruments and other derivative assets and liabilities not designated as hedging instruments are reported in other assets and other liabilities on the Consolidated Statement of Financial Condition, respectively.

[4] Represents netting of derivative asset and liability balances, and related cash collateral, with the same counterparty subject to master netting agreements. Authoritative accounting guidance permits the netting of derivative receivables and payables when a legally enforceable master netting agreement exists between the Company and a derivative counterparty. A master netting agreement is an agreement between two counterparties who have multiple derivative contracts with each other that provide for the net settlement of contracts through a single payment, in a single currency, in the event of default on or termination of any one contract.

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Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 31, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011 years	Sep. 30, 2010
Goodwill And Other Intangible Assets
Decrease in goodwill				$ 37,000
Amortization expense		374,000	413,000	1,100,000	1,200,000
Intangible assets amortized estimated useful lives, Minimum				3
Intangible assets amortized estimated useful lives, Maximum				15
Goodwill impairment charge	$ 0

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Junior Subordinated Deferrable Interest Debentures Held By Trusts That Issued Guaranteed Capital Debt Securities (Tables)

9 Months Ended

Sep. 30, 2011

Junior Subordinated Deferrable Interest Debentures Held By Trusts That Issued Guaranteed Capital Debt Securities

Common Securities, Preferred Securities, And Related Debentures

														Principal Amount of Debentures (3)
	Issuance Date		Common Securities Issued		Trust Preferred Securities Issued (1)		Coupon Rate (2)			Earliest Redemption Date (on or after) (3)		Maturity		September 30, 2011		December 31, 2010
Bloomfield Hills Statutory Trust I		May 2004	$	248	$	8,000		3.00	%		Jun. 17, 2009		Jun. 2034	$	8,248	$	8,248
PrivateBancorp Statutory Trust II		Jun. 2005		1,547		50,000		2.06	%		Sep. 15, 2010		Sep. 2035		51,547		51,547
PrivateBancorp Statutory Trust III		Dec. 2005		1,238		40,000		1.85	%		Dec. 15, 2010		Dec. 2035		41,238		41,238
PrivateBancorp Statutory Trust IV		May 2008		10		143,750		10.00	%		Jun. 13, 2013		Jun. 2068		143,760		143,760
Total			$	3,043	$	241,750								$	244,793	$	244,793

⁽¹⁾  The trust preferred securities accrue distributions at a rate equal to the interest rate and maturity identical to that of the related Debentures. The trust preferred securities will be redeemed upon maturity of the related Debentures.

⁽²⁾  Reflects the coupon rate in effect at September 30, 2011. The coupon rate for the Bloomfield Hills Statutory Trust I is a variable rate and is based on three-month LIBOR plus 2.65%. The coupon rates for the PrivateBancorp Statutory Trusts II and III are at a variable rate based on three-month LIBOR plus 1.71% for Trust II and three-month LIBOR plus 1.50% for Trust III. The coupon rate for the PrivateBancorp Statutory Trust IV is fixed. Distributions for all of the Trusts are payable quarterly. We have the right to defer payment of interest on the Debentures at any time or from time to time for a period not exceeding five years provided no extension period may extend beyond the stated maturity of the Debentures. During such extension period, distributions on the trust preferred securities would also be deferred, and our ability to pay dividends on our common stock would be restricted. The Federal Reserve has the ability to prevent interest payments on the Debentures.

⁽³⁾ The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at maturity or their earlier redemption. Subject to restrictions relating to our participation in the U.S. Treasury's Troubled Asset Relief Program's Capital Purchase Program ("TARP CPP"), the Debentures are redeemable in whole or in part prior to maturity at any time after the dates shown in the table, and earlier at our discretion if certain conditions are met, and, in any event, only after we have obtained Federal Reserve approval, if then required under applicable guidelines or regulations.

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Securities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2011	Dec. 31, 2010
Securities
Available-for-sale securities pledged carrying value	$ 609.3	$ 656.3
Percentage of securities portfolio from one issuer, maximum	10.00%

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Goodwill And Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2011

Goodwill And Other Intangible Assets

Changes In The Carrying Amount Of Goodwill By Operating Segment

	September 30,		December 31,
	2011		2010
Banking	$	81,755	$	81,755
Trust and Investments		12,829		12,866
Holding Company Activities		—		—
Total goodwill	$	94,584	$	94,621

Other Intangible Assets

	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
	September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010
Core deposit intangible.	$	18,093	$	18,093	$	4,835	$	4,098	$	13,258	$	13,995
Client relationships		4,900		4,900		2,463		2,168		2,437		2,732
Assembled workforce		736		736		716		623		20		113
Total	$	23,729	$	23,729	$	8,014	$	6,889	$	15,715	$	16,840

Additional Information - Other Intangible Assets

	September 30, 2011
Weighted average remaining life at period-end (in years):
Core deposit intangible		5
Client relationships		8
Assembled workforce		Less than 1

Scheduled Amortization Of Other Intangible Assets

	Total
Year ending December 31,
2011:
Remaining three months	$	362
2012		2,673
2013		3,101
2014		3,190
2015		2,639
2016 and thereafter		3,750
Total	$	15,715

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Equity

9 Months Ended

Sep. 30, 2011

Equity

Equity

11. EQUITY

Comprehensive Income

Accumulated other comprehensive income ("AOCI") includes net income as well as certain other items that are reported directly within a separate component of equity that are not considered part of net income. Other comprehensive income consists of the unrealized gains (losses) on securities available-for-sale and changes in fair value of derivative instruments designated under cash flow hedges.

Components of Accumulated Other Comprehensive Income

(Amounts in thousands)

	Nine Months Ended September 30,
	2011									2010
	Unrealized Gain (Loss) on Available-for- Sale Securities			Accumulated Gain (Loss) on Effective Cash Flow Hedges			Total			Unrealized Gain (Loss) on Available-for- Sale Securities			Accumulated Gain (Loss) on Effective Cash Flow Hedges		Total
Balance at beginning of period	$	20,078		$	—		$	20,078		$	27,896		$	—	$	27,896
Unrealized gains on securities		47,601			—			47,601			37,719			—		37,719
Unrealized gains on cash flow hedges		—			1,162			1,162			—			—		—
Tax expense on unrealized gains		(18,953	)		(462	)		(19,415	)		(14,496	)		—		(14,496	)
Reclassification adjustment of net gains included in net income		(5,448	)		(156	)		(5,604	)		(3,801	)		—		(3,801	)
Reclassification adjustments for tax expense on realized net gains		2,167			62			2,229			1,458			—		1,458
Balance at end of period	$	45,445		$	606		$	46,051		$	48,776		$	—	$	48,776

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Allowance For Loan Losses And Reserve For Unfunded Commitments (Allowance For Loan Losses) (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010		Dec. 31, 2010
Allowance For Loan Losses And Reserve For Unfunded Commitments
Balance at beginning of period	$ 206,286	[1]	$ 232,411	[1]	$ 222,821	[1]	$ 221,688	[1]
Loans charged-off	(41,986)	[1]	(50,622)	[1]	(129,594)	[1]	(159,992)	[1]
Recoveries on loans previously charged-off	3,400	[1]	1,572	[1]	6,042	[1]	4,207	[1]
Net charge-offs	(38,586)	[1]	(49,050)	[1]	(123,552)	[1]	(155,785)	[1]
Provision for loan losses	32,341	[1]	40,031	[1]	100,772	[1]	157,489	[1]
Balance at the end of period	200,041	[1]	223,392	[1]	200,041	[1]	223,392	[1]
Ending balance, individually evaluated for impairment	72,191	[1],[2]	68,716	[1],[2]	72,191	[1],[2]	68,716	[1],[2]	70,971
Ending balance, collectively evaluated for impairment	127,850	[1]	154,676	[1]	127,850	[1]	154,676	[1]
Ending balance, individually evaluated for impairment	411,077	[1],[2]	431,815	[1],[2]	411,077	[1],[2]	431,815	[1],[2]	453,456
Ending balance, collectively evaluated for impairment	8,263,878	[1]	8,560,314	[1]	8,263,878	[1]	8,560,314	[1]
Total Loans	$ 8,674,955	[1]	$ 8,992,129	[1]	$ 8,674,955	[1]	$ 8,992,129	[1]	$ 9,114,357

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

[2] Refer to Note 4 for additional information regarding impaired loans.

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Derivative Instruments (Gain (Loss) Recorded In Consolidated Statements of Income and Accumulated Other Comprehensive Income Related to Interest Rate Swaps Designated as Cash Flow Hedge) (Details) (USD $) In Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011
Derivative Instruments
Amount of gain, net of tax, recognized in AOCI (effective portion)	$ 700	$ 700
Amount of gain, pre-tax, reclassified from AOCI to interest income on loans	156	156
Amount of gain, pre-tax, recognized in other non-interest income (ineffective portion)

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Earnings Per Common Share (Basic and Diluted Earnings Per Common Share) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010
Net income (loss) attributable to controlling interests	$ 13,449		$ 7,950		$ 33,311		$ (10,395)
Preferred dividends and discount accretion of preferred stock	3,426		3,405		10,260		10,198
Net income (loss) available to common stockholders	10,023		4,545		23,051		(20,593)
Less: Earnings allocated to participating stockholders	127		99		268		47
Earnings allocated to common stockholders	9,896		4,446		22,783		(20,640)
Weighted-average common shares outstanding	70,479	[1]	70,067	[1]	70,418	[1]	69,999	[1]
Basic earnings per common share	$ 0.14		$ 0.06		$ 0.32		$ (0.29)
Earnings allocated to common stockholders	$ 9,896	[2]	$ 4,446	[2]	$ 22,782	[2]	$ (20,640)	[2]
Dilutive effect of stock awards	142	[1]	30	[1]	264	[1]
Weighted-average diluted common shares outstanding	70,621	[1]	70,097	[1]	70,682	[1]	69,999	[1]
Diluted earnings per common share	$ 0.14		$ 0.06		$ 0.32		$ (0.29)
Total antidilutive shares	4,496	[1],[3]	4,744	[1],[3]	4,315	[1],[3]	5,674	[1],[3]
Stock Options [Member]
Total antidilutive shares	3,579	[1],[3]	3,342	[1],[3]	3,514	[1],[3]	3,481	[1],[3]
Unvested Stock/Unit Awards [Member]
Total antidilutive shares	272	[1],[3]	757	[1],[3]	156	[1],[3]	1,548	[1],[3]
Warrants Related to the U.S. Treasury Capital Purchase Program [Member]
Total antidilutive shares	645	[1],[3]	645	[1],[3]	645	[1],[3]	645	[1],[3]

[1] Due to the net loss available to common stockholders reported for the nine months ended September 30, 2010, all potentially dilutive common stock equivalents were excluded from the diluted net loss per share computation as their inclusion would have been antidilutive.

[2] Earnings allocated to common stockholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common stock equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate earnings to common stockholders and participating securities for the purposes of calculating diluted earnings per share.

[3] For the quarter and nine months ended September 30, 2011 and quarter ended September 30, 2010, represents potentially dilutive common stock securities for which the exercise price for the stock options and warrants and fair value of non-vested restricted stock/units was greater than the average market price of our common stock during the period.

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Estimated Fair Value Of Financial Instruments (Fair Value Measurements On A Nonrecurring Basis) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Loans held for sale	$ 24,126	$ 30,758
Collateral-dependent impaired loans net of reserve for loan losses	283,452	328,492
Covered assets - foreclosed real estate	28,344	32,155
Foreclosed real estate	116,364	88,728
Total assets	428,160	480,133
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Loans held for sale
Collateral-dependent impaired loans net of reserve for loan losses
Covered assets - foreclosed real estate
Foreclosed real estate
Total assets
Significant Other Observable Inputs (Level 2) [Member]
Loans held for sale
Collateral-dependent impaired loans net of reserve for loan losses
Covered assets - foreclosed real estate
Foreclosed real estate
Total assets
Significant Unobservable Inputs (Level 3) [Member]
Loans held for sale		30,758
Collateral-dependent impaired loans net of reserve for loan losses	283,452	328,492
Covered assets - foreclosed real estate	28,344	32,155
Foreclosed real estate	116,364	88,728
Total assets	$ 428,160	$ 480,133

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Covered Assets (Schedule of Change in Purchased Impaired Loans Accretable Yield and Carrying Amount) (Details) (Covered Assets [Member], USD $) In Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010
Covered Assets [Member]
Balance at beginning of period, Accretable Yield	$ 9,615		$ 38,797		$ 13,253		$ 34,790
Charge-offs/disposals, Accretable Yield	(6,357)	[1]	(2,990)	[1]	(9,471)	[1]	(5,517)	[1]
Reclassifications from (to) nonaccretable difference, net, Accretable Yield	4,261		(10,850)		6,521		1,256
Accretion, Accretable Yield	(799)		(2,201)		(3,583)		(7,773)
Balance at end of period, Accretable Yield	6,720		22,756		6,720		22,756
Balance at beginning of period, Carrying Amount of Loans	62,541		91,302		71,258		94,140
Payments received, Carrying Amount of Loans	(3,461)		(2,626)		(11,848)		(8,580)
Charge-offs/disposals, Carrying Amount of Loans	(6,357)	[1]	(2,990)	[1]	(9,471)	[1]	(5,446)	[1]
Accretion, Carrying Amount of Loans	799		2,201		3,583		7,773
Balance at end of period, Carrying Amount of Loans	53,522		87,887		53,522		87,887
Contractual amount outstanding at period end	$ 81,985		$ 170,942		$ 81,985		$ 170,942

[1] Includes transfers to covered foreclosed real estate.

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Loans

9 Months Ended

Sep. 30, 2011

Loans

Loans

4. LOANS

The following loan portfolio and credit quality disclosures exclude covered loans. Covered loans represent loans acquired through a Federal Deposit Insurance Corporation ("FDIC") assisted transaction that are subject to a loss share agreement and are presented separately in the Consolidated Statement of Condition. Refer to Note 6 for a detailed discussion regarding covered loans.

Loan Portfolio

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Commercial and industrial	$	4,071,840	$	4,015,257
Commercial – owner-occupied commercial real estate		1,084,212		897,620
Total commercial		5,156,052		4,912,877
Commercial real estate		2,054,925		2,400,923
Commercial real estate – multi-family		421,045		457,246
Total commercial real estate		2,475,970		2,858,169
Construction		315,858		530,733
Residential real estate		307,705		319,146
Home equity		186,914		197,179
Personal		232,456		296,253
Total loans	$	8,674,955	$	9,114,357
Deferred loan fees included as a reduction in total loans	$	34,893	$	33,535
Overdrawn demand deposits included in total loans	$	1,151	$	3,197

We primarily lend to businesses and consumers in the market areas in which we have physical locations. We seek to diversify our loan portfolio by loan type, industry, and borrower.

Carrying Value of Loans Pledged

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Loans pledged to secure:
Federal Reserve Bank discount window borrowings	$	1,419,662	$	913,599
Federal Home Loan Bank advances		43,400		184,026
Total	$	1,463,062	$	1,097,625

Loan Portfolio Aging

Loan Portfolio Aging

(Amounts in thousands)

			Delinquent
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due and Accruing		Total Accruing Loans		Nonaccrual		Total Loans
As of September 30, 2011
Commercial	$	5,083,733	$	3,529	$	101	$	—	$	5,087,363	$	68,689	$	5,156,052
Commercial real estate		2,300,497		5,884		8,801		—		2,315,182		160,788		2,475,970
Construction		285,519		342		—		—		285,861		29,997		315,858
Residential real estate		286,827		7		2,864		—		289,698		18,007		307,705
Home equity		171,788		761		925		—		173,474		13,440		186,914
Personal		218,524		15		91		—		218,630		13,826		232,456
Total loans	$	8,346,888	$	10,538	$	12,782	$	—	$	8,370,208	$	304,747	$	8,674,955

			Delinquent
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due and Accruing		Total Accruing Loans		Nonaccrual		Total Loans
As of December 31, 2010
Commercial	$	4,828,948	$	1,024	$	759	$	—	$	4,830,731	$	82,146	$	4,912,877
Commercial real estate		2,632,835		10,264		12,346		—		2,655,445		202,724		2,858,169
Construction		495,435		—		1,895		—		497,330		33,403		530,733
Residential real estate		300,027		180		4,098		—		304,305		14,841		319,146
Home equity		185,675		976		2,333		—		188,984		8,195		197,179
Personal		256,860		13,122		1,700		—		271,682		24,571		296,253
Total loans	$	8,699,780	$	25,566	$	23,131	$	—	$	8,748,477	$	365,880	$	9,114,357

Impaired Loans

Impaired loans consist of nonaccrual loans (which include nonaccrual TDRs) and loans classified as accruing TDRs. A loan is considered nonaccrual when, based on current information and events, management believes that it is probable that we will be unable to collect all amounts due (both principal and interest) according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the amount of impairment is measured based on the loan's observable fair value, fair value of the underlying collateral less selling costs if the loan is collateral dependent, or the present value of expected future cash flows discounted at the loan's effective interest rate. If the measurement of the impaired loan is less than the recorded investment in the loan, impairment is recognized by creating a specific valuation reserve as a component of the allowance for loan losses. Impaired loans exceeding $500,000 are evaluated individually, while smaller loans are evaluated as pools using historical loss experience, as well as management's loss expectations, for the respective asset class and product type.

Impaired Loans

(Amounts in thousands)

	Unpaid Contractual Principal Balance		Recorded Investment With No Specific Reserve		Recorded Investment With Specific Reserve		Total Recorded Investment		Specific Reserve
As of September 30, 2011
Commercial	$	127,933	$	85,084	$	33,758	$	118,842	$	17,842
Commercial real estate		229,360		85,012		116,859		201,871		38,091
Construction		39,639		—		29,997		29,997		7,647
Residential real estate		20,153		12,296		6,774		19,070		1,316
Home equity		15,133		1,814		11,802		13,616		2,345
Personal		39,978		16,896		10,785		27,681		4,950
Total impaired loans	$	472,196	$	201,102	$	209,975	$	411,077	$	72,191
As of December 31, 2010
Commercial	$	98,246	$	33,879	$	56,284	$	90,163	$	18,015
Commercial real estate		292,138		118,190		144,553		262,743		38,003
Construction		52,055		11,437		26,314		37,751		3,778
Residential real estate		17,186		4,413		11,226		15,639		1,046
Home equity		8,575		—		8,195		8,195		2,614
Personal		48,911		21,227		17,738		38,965		7,515
Total impaired loans	$	517,111	$	189,146	$	264,310	$	453,456	$	70,971

Average Recorded Investment and Interest Income Recognized on Impaired Loans ⁽¹⁾

(Amounts in thousands)

	Quarter Ended				Nine Months Ended
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
September 30, 2011
Commercial	$	124,933	$	1,054	$	103,678	$	1,723
Commercial real estate		220,484		708		254,048		2,205
Construction		37,409		49		38,368		123
Residential real estate		19,923		14		18,646		33
Home equity		13,791		17		12,172		20
Personal		30,584		122		33,380		375
Total	$	447,124	$	1,964	$	460,292	$	4,479
September 30, 2010	$	400,237			$	411,052

⁽¹⁾ Represents amounts while classified as impaired for the periods presented.

Credit Quality Indicators  

The Company has adopted an internal risk rating policy in which each loan is rated for credit quality with a numerical rating of 1 through 8. Loans rated 5 and better (1-5 ratings, inclusive) are credits that exhibit acceptable financial performance, cash flow, and leverage. We attempt to mitigate risk by structure, collateral, monitoring, or other meaningful controls. Credits rated 6 are considered special mention as these credits demonstrate potential weakness that if left unresolved, may result in deterioration in the Company's credit position and/or the repayment prospects for the credit. Borrowers rated special mention may exhibit adverse operating trends, high leverage, tight liquidity or other credit concerns. Potential problem loans are loans that we have identified as performing in accordance with contractual terms, but for which management has some level of concern about the ability of the borrowers to meet existing repayment terms in future periods. These loans have a risk rating of 7 but are not classified as nonaccrual. The ultimate collection of these loans is questionable due to the same conditions that characterize a 6-rated credit. These credits may also be considered inadequately protected by the current net worth and/or paying capacity of the obligor or guarantors or the collateral pledged. These loans generally have a well-defined weakness or weaknesses that may jeopardize collection of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not resolved. Although these loans are generally identified as potential problem loans and require additional attention by management, they may never become nonperforming. Nonperforming loans include nonaccrual loans risk rated 7 or 8 and have all the weaknesses inherent in a 7-rated potential problem loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently-existing facts, conditions and values, highly questionable and improbable. Special mention, potential problem and nonperforming loans are reviewed at minimum on a quarterly basis, while all other rated credits over a certain dollar threshold, depending on product segment, are reviewed annually or as the situation warrants.

Credit Quality Indicators

(Dollars in thousands)

Product Segment	Special Mention		% of Portfolio Loan Type		Potential Problem Loans		% of Portfolio Loan Type		Non- Performing Loans		% of Portfolio Loan Type		Total Loans
As of September 30, 2011
Commercial	$	54,804		1.1	$	128,018		2.5	$	68,689		1.3	$	5,156,052
Commercial real estate		141,465		5.7		108,919		4.4		160,788		6.5		2,475,970
Construction		10,129		3.2		9,625		3.0		29,997		9.5		315,858
Residential real estate		5,427		1.8		20,375		6.6		18,007		5.9		307,705
Home equity		1,595		0.9		8,569		4.6		13,440		7.2		186,914
Personal		5,141		2.2		1,619		0.7		13,826		5.9		232,456
Total	$	218,561		2.5	$	277,125		3.2	$	304,747		3.5	$	8,674,955
As of December 31, 2010
Commercial	$	111,929		2.3	$	173,829		3.5	$	82,146		1.7	$	4,912,877
Commercial real estate		203,073		7.1		260,042		9.1		202,724		7.1		2,858,169
Construction		67,915		12.8		45,119		8.5		33,403		6.3		530,733
Residential real estate		9,962		3.1		15,101		4.7		14,841		4.7		319,146
Home equity		3,757		1.9		11,272		5.7		8,195		4.2		197,179
Personal		2,198		0.7		2,227		0.8		24,571		8.3		296,253
Total	$	398,834		4.4	$	507,590		5.6	$	365,880		4.0	$	9,114,357

Troubled Debt Restructured Loans

A loan is accounted for as a TDR when a borrower is experiencing financial difficulties that lead to a restructuring of the loan, and the Company grants concessions to the borrower in the restructuring that it would not otherwise consider. These concessions may include extensions of maturity dates beyond an insignificant delay, rate reductions, principal forgiveness, and other actions intended to minimize potential losses. We may also utilize a multiple note structure as a workout alternative for certain loans. The multiple note structure typically bifurcates a troubled loan into two separate notes, where the first note is reasonably assured of repayment and performance according to the modified terms, and the portion of the troubled loan that is not reasonably assured of repayment is charged-off. Restructured loans can involve loans remaining on nonaccrual, moving to nonaccrual, or continuing on accrual status, depending on the individual facts and circumstances of the borrower.

Generally, a nonaccrual loan that is restructured remains on nonaccrual for a period of at least six months to ensure that the borrower performs in accordance with the restructured terms including consistent and timely loan payments. However, the borrower's performance prior to the restructuring or other significant events at the time of the restructuring may be considered in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status after a shorter performance period or concurrent with the restructuring. In such situations, the loan will be reported as a "restructured loan accruing interest." If the borrower's performance under the new terms is not reasonably assured, the loan remains classified as a nonaccrual loan.

Troubled Debt Restructured Loans Outstanding

(Amounts in thousands)

	September 30,		December 31,
	2011		2010
Accruing interest:
Commercial	$	50,153	$	8,017
Commercial real estate		41,083		60,019
Construction		—		4,348
Residential real estate		1,063		798
Personal		14,031		14,394
Total accruing	$	106,330	$	87,576
Nonaccrual:
Commercial	$	33,548	$	13,152
Commercial real estate		39,423		33,123
Construction		4,018		—
Residential real estate		3,613		1,350
Home equity		1,849		16,427
Personal		8,718		1,229
Total nonaccrual	$	91,169	$	65,281

At September 30, 2011 and December 31, 2010, commitments to lend additional funds to debtors whose loan terms have been modified in a troubled debt restructuring (both accruing and nonaccruing) totaled $18.2 million and $3.7 million, respectively.

Additions to Troubled Debt Restructurings During the Period

(Amounts in thousands)

	Quarter Ended September 30, 2011						Nine Months Ended September 30, 2011
			Outstanding Recorded Investment (1)						Outstanding Recorded Investment (1)
	Number of Borrowers		Pre- Modification		Post- Modification		Number of Borrowers		Pre- Modification		Post- Modification
Accruing interest:
Commercial
Extension of maturity date (2)		2	$	294	$	191		15	$	45,280	$	45,177
Other concession (3)		1		7,237		7,951		5		19,402		20,115
Multiple note structuring		—		—		—		1		8,837		5,265
Total commercial		3		7,531		8,142		21		73,519		70,557
Commercial real estate
Extension of maturity date (2)		1		492		492		11		6,988		6,988
Multiple note structuring		—		—		—		2		9,990		5,344
Total commercial real estate		1		492		492		13		16,978		12,332
Residential real estate
Extension of maturity date (2)		—		—		—		2		374		374
Home equity
Extension of maturity date (2)		—		—		—		2		203		203
Personal
Extension of maturity date (2)		—		—		—		1		265		265
Other concession (3)		—		—		—		1		252		252
Total personal		—		—		—		2		517		517
Total accruing		4	$	8,023	$	8,634		40	$	91,591	$	83,983
Change in balance due to principal paydown at time of modification					$	103					$	103

⁽¹⁾  Represents amounts as of the date immediately prior to and immediately after the modification is effective.

⁽²⁾  Extension of maturity date also includes loans renewed at existing rate of interest which is considered a below market rate for that particular loan's risk profile.

⁽³⁾  Other concessions primarily include interest rate reductions, loan increases, and deferral of principal.

	Quarter Ended September 30, 2011						Nine Months Ended September 30, 2011
			Outstanding Recorded Investment (1)						Outstanding Recorded Investment (1)
	Number of Borrowers		Pre- Modification		Post- Modification		Number of Borrowers		Pre- Modification		Post- Modification
Nonaccrual:
Commercial
Extension of maturity date (2)		3	$	30,251	$	28,762		4	$	30,370	$	28,881
Other concession (3)		1		—		200		2		128		328
Total commercial		4		30,251		28,962		6		30,498		29,209
Commercial real estate
Extension of maturity date (2)		2		2,690		2,690		5		6,706		6,706
Other concession (3)		—		—		—		2		6,208		6,208
Total commercial real estate		2		2,690		2,690		7		12,914		12,914
Construction
Extension of maturity date (2)		—		—		—		1		179		179
Residential real estate
Extension of maturity date (2)		—		—		—		3		1,446		1,446
Other concession (3)		—		—		—		1		696		696
Total residential real estate		—		—		—		4		2,142		2,142
Home equity
Extension of maturity date (2)		—		—		—		1		147		147
Other concession (3)		—		—		—		1		490		490
Total home equity		—		—		—		2		637		637
Personal
Extension of maturity date (2)		1		362		362		3		487		473
Total nonaccrual		7	$	33,303	$	32,014		23	$	46,857	$	45,554
Change in balance due to principal paydown at time of modification					$	1,489					$	1,504

⁽¹⁾  Represents amounts as of the date immediately prior to and immediately after the modification is effective.

⁽²⁾  Extension of maturity date also includes loans renewed at existing rate of interest which is considered a below market rate for that particular loan's risk profile.

⁽³⁾  Other concessions primarily include interest rate reductions, loan increases, and deferral of principal.

At the time an accruing loan becomes modified as a TDR, it is considered impaired and no longer included as part of the general loan loss reserve determination. However, our general reserve methodology may consider the amount and/or characteristics of the TDRs removed as one of many credit or portfolio considerations in establishing final reserve requirements.

Modified loans which meet the definition of a TDR (both accruing and nonaccruing), including those that have payment defaults, are considered impaired and, accordingly, the loans are specifically evaluated for impairment at the end of each accounting period with a specific valuation reserve created, if necessary, as a component of the allowance for loan

losses. Refer to the "Impaired Loan" section of this note for additional information regarding the Company's policy for assessing potential impairment on such loans. At September 30, 2011, our allowance for loan losses included $26.5 million for nonaccrual TDRs. There were no specific reserves for accruing TDRs at September 30, 2011.

The following table presents the recorded investment and number of loans modified as a TDR during the previous 12 months which subsequently became nonperforming during the three- and nine-month periods ended September 30, 2011. A loan becomes nonperforming and placed on nonaccrual status typically when the principal or interest payments are 90 days past due based on contractual terms or when an individual analysis of a borrower's creditworthiness indicates a loan should be placed on nonaccrual status earlier than when the loan becomes 90 days past due.

Troubled Debt Restructurings

That Became Nonperforming Within 12 Months of Restructuring

(Amounts in thousands)

	Quarter Ended September 30, 2011 (1)				Nine Months Ended September 30, 2011 (1)
	Number of Borrowers		Recorded Investment		Number of Borrowers		Recorded Investment
Commercial		1	$	1,281		4	$	4,419
Commercial real estate		—		—		10		10,030
Construction		1		3,058		3		4,294
Residential real estate		1		99		1		99
Home equity		1		26		1		26
Personal		1		252		1		252
Total		5	$	4,716		20	$	19,120

⁽¹⁾  Represents amounts as of the balance sheet date from the quarter the default was first reported.

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Estimated Fair Value Of Financial Instruments (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Dec. 31, 2010
Estimated Fair Value Of Financial Instruments
Significant transfers of assets or liabilities between level 1 and level 2			$ 0	$ 0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	0	2,800,000
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	624,000	251,000
Valuation techniques and related inputs			0	0
Fair Value, Option, Loans Held as Assets, 90 Days or More Past Due	0		0
Fair Value, Option, Loans Held as Assets, Aggregate Amount in Nonaccrual Status	$ 0		$ 0

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Derivative Instruments

9 Months Ended

Sep. 30, 2011

Derivative Instruments

Derivative Instruments

14. DERIVATIVE INSTRUMENTS

We utilize an overall risk management strategy that incorporates the use of derivative instruments to reduce certain risks related to interest rate risk, as it relates to mortgage loan commitments and planned sales, and foreign currency volatility. We also use these instruments for client accommodation as we provide derivatives risk management solutions for our clients. None of these end-user and client-related derivatives were designated as hedging instruments at September 30, 2011 and December 31, 2010.

In July 2011, we initiated the use of interest rate derivatives as part of our asset strategy to hedge interest rate risk in our loan portfolio which is comprised primarily of floating rate loans. These derivatives were designated as cash flow hedges.

Derivative assets and liabilities are recorded at fair value in the Consolidated Statements of Financial Condition, after taking into account the effects of master netting agreements as allowed under authoritative accounting guidance. Changes in the fair value of derivative instruments are either recorded in current earnings or in shareholders' equity as a component of AOCI depending on whether the derivative instrument qualifies for hedge accounting and, if so, whether it qualifies as a fair value hedge or cash flow hedge.

Derivatives expose us to counterparty credit risk measured as replacement cost (current positive mark-to-market value plus potential future exposure from positive movements in mark-to-market). Credit risk is managed through our standard underwriting process. Actual exposures are monitored against various types of credit limits established to contain risk within parameters. Additionally, credit risk is managed through the use of collateral and netting agreements.

Composition of Derivative Instruments

and Fair Value

(Amounts in thousands)

	Asset Derivatives										Liability Derivatives
	September 30, 2011					December 31, 2010					September 30, 2011					December 31, 2010
	Notional/					Notional/					Notional/					Notional/
	Contract		Fair			Contract		Fair			Contract		Fair			Contract		Fair
	Amount(1)		Value			Amount(1)		Value			Amount(1)		Value			Amount(1)		Value
Derivatives designated as hedging instruments(2):
Interest rate contracts	$	75,000	$	1,061		$	—	$	—		$	25,000	$	55		$	—	$	—
Less: netting adjustments(3)				(55	)				—					(55	)				—
Total			$	1,006				$	—				$	—				$	—
Derivatives not designated as hedging instruments:
Capital markets group derivatives(4):
Interest rate contracts	$	2,954,304	$	113,417		$	3,028,827	$	102,386		$	2,954,304	$	116,844		$	3,028,827	$	104,799
Foreign exchange contracts		155,262		7,300			109,956		4,069			155,262		6,600			109,956		3,416
Credit contracts(1)		43,249		12			4,523		1			62,698		15			68,945		9
Subtotal				120,729					106,456					123,459					108,224
Less: netting adjustments(3)				(9,481	)				(6,206	)				(9,491	)				(6,206	)
Total			$	111,248				$	100,250				$	113,968				$	102,018
Other derivatives(2):
Foreign exchange contracts	$	3,935	$	156		$	4,425	$	29		$	—	$	—		$	—	$	—
Mortgage banking derivatives				229					221					245					280
Subtotal				385					250					245					280
Total derivatives not designated as hedging instruments			$	111,633				$	100,500				$	114,213				$	102,298
Grand total derivatives			$	112,639				$	100,500				$	114,213				$	102,298

⁽¹⁾  The remaining average notional amounts are shown for credit contracts.

⁽²⁾  Derivative assets and liabilities designated as hedging instruments and other derivative assets and liabilities not designated as hedging instruments are reported in other assets and other liabilities on the Consolidated Statement of Financial Condition, respectively.

⁽³⁾  Represents netting of derivative asset and liability balances, and related cash collateral, with the same counterparty subject to master netting agreements. Authoritative accounting guidance permits the netting of derivative receivables and payables when a legally enforceable master netting agreement exists between the Company and a derivative counterparty. A master netting agreement is an agreement between two counterparties who have multiple derivative contracts with each other that provide for the net settlement of contracts through a single payment, in a single currency, in the event of default on or termination of any one contract.

⁽⁴⁾  Capital markets group asset and liability derivatives are reported separately on the Consolidated Statement of Financial Condition.

Certain of our derivative contracts contain embedded credit risk contingent features that if triggered either allow the derivative counterparty to terminate the derivative or require additional collateral. These contingent features are triggered if we do not meet specified financial performance indicators such as minimum capital ratios under the federal banking agencies' guidelines. Details on these derivative contracts are set forth in the following table.

Derivatives Subject to Credit Risk Contingency Features

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Fair value of derivatives with credit contingency features in a net liability position	$	68,634	$	66,649
Collateral posted for those transactions in a net liability position	$	72,845	$	70,334
If credit risk contingency features were triggered:
Additional collateral required to be posted to derivative counterparties	$	85	$	347
Outstanding derivative instruments that would be immediately settled	$	58,853	$	52,354

Derivatives Designated in Hedge Relationships

Our objectives in using interest rate derivatives are to add stability to interest income and to manage our exposure to interest rate movements.

Cash flow hedges – During the third quarter 2011, we entered into receive fixed/pay variable interest rate swaps to convert certain floating-rate commercial loans to fixed rate in order to substantially reduce the variability in forecasted interest cash flows due to market interest rate changes. We use regression analysis to assess the effectiveness of cash flow hedges at both the inception of the hedge relationship and on an ongoing basis. Ineffectiveness is generally measured as the amount by which the cumulative change in fair value of the hedging instrument exceeds the present value of the cumulative change in the hedged item's expected cash flows. Measured ineffectiveness is recognized directly in other non-interest income in the Consolidated Statements of Income. The effective portion of the gains or losses on cash flow hedges are recorded in AOCI and are subsequently reclassified to interest income on loans in the period that the hedged interest receipts affect earnings. As of September 30, 2011 the maximum length of time over which forecasted interest cash flows are hedged is five years. There are no components of derivative gains or losses excluded from the assessment of hedge effectiveness related to our cash flow hedge strategy.

Change in Accumulated Other Comprehensive Income Related to Interest Rate Swaps Designated as Cash Flow Hedge

(Dollars in thousands)

	September 30, 2011
	Quarter Ended			Nine Months Ended
Unrealized gain at beginning of period	$	—		$	—
Amount of gain recognized in AOCI		1,162			1,162
Amount reclassified from AOCI to interest income on loans		(156	)		(156	)
Unrealized gain at end of period	$	1,006		$	1,006

As of September 30, 2011, $573,000 in net deferred gains, net of tax, recorded in AOCI are expected to be reclassified into earnings during the next twelve months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to September 30, 2011.

Gain Recorded in Consolidated Statements of Income

and Accumulated Other Comprehensive Income Related to

Interest Rate Swaps Designated as Cash Flow Hedge

(Amounts in thousands)

	September 30, 2011
	Quarter Ended		Nine Months Ended
Amount of gain, net of tax, recognized in AOCI (effective portion)	$	700	$	700
Amount of gain, pre-tax, reclassified from AOCI to interest income on loans		156		156
Amount of gain, pre-tax, recognized in other non-interest income (ineffective portion)		—		—

During the first nine months of 2011, there were no gains or losses from cash flow hedge derivatives related to ineffectiveness that were reclassified to current earnings. We are required to reclassify such gains or losses related to ineffectiveness in circumstances where the original forecasted transaction was no longer probable of occurring.

Derivatives Not Designated in Hedge Relationships

End-User Derivatives – We enter into derivatives that include commitments to fund certain mortgage loans to be sold into the secondary market and forward commitments for the future delivery of residential mortgage loans. It is our practice to enter into forward commitments for the future delivery of fixed-rate residential mortgage loans when customer interest rate lock commitments are entered into to economically hedge the effect of changes in interest rates on our commitments to fund the loans as well as on our portfolio of mortgage loans held-for-sale. At September 30, 2011, we had approximately $75.0 million of interest rate lock commitments and $99.2 million of forward commitments for the future delivery of residential mortgage loans with rate locks at rates consistent with the lock commitment.

We are also exposed at times to foreign exchange risk as a result of issuing loans in which the principal and interest are settled in a currency other than U.S. dollars. Currently our exposure is to the British pound on $3.9 million of loans and we manage this risk by using currency forward derivatives.

Client Related Derivatives – We offer, through our capital markets group, over-the-counter interest rate and foreign exchange derivatives to our clients, including but not limited to, interest rate swaps, options on interest rate swaps, interest rate options (also referred to as caps, floors, collars, etc.), foreign exchange forwards, and options as well as cash products such as foreign exchange spot transactions. When our clients enter into an interest rate or foreign exchange derivative transaction with us, we will generally mitigate our exposure to market risk through the execution of off-setting positions with inter-bank dealer counterparties. Although the off-setting nature of transactions originated by our capital markets group limit our market risk exposure, they do expose us to other risks including counterparty credit, settlement, and operational risk.

To accommodate our loan clients, we occasionally enter into risk participation agreements ("RPA") with counterparty banks to either accept or transfer a portion of the credit risk related to their interest rate derivatives. This allows clients to execute an interest rate derivative with one bank while allowing for distribution of the credit risk among participating members. We have entered into written RPAs in which we accept a portion of the credit risk associated with a loan client's interest rate derivative in exchange for a fee. We manage this credit risk through our loan underwriting process, and when appropriate, the RPA is backed by collateral provided by our clients under their loan agreement.

The current payment/performance risk of written RPAs is assessed using internal risk ratings which range from 1 to 8 with the latter representing the highest credit risk. The risk rating is based on several factors including the financial condition of the RPA's underlying derivative counterparty, present economic conditions, performance trends, leverage, and liquidity.

The maximum potential amount of future undiscounted payments that we could be required to make under our written RPAs assumes that the underlying derivative counterparty defaults and that the floating interest rate index of the underlying derivative remains at zero percent. In the event that we would have to pay out any amounts under our RPAs, we will seek to recover these from assets that our clients pledged as collateral for the derivative and the related loan.

Risk Participation Agreements

(Dollars in thousands)

	September 30, 2011			December 31, 2010
Fair value of written RPAs	$	(15	)	$	(9	)
Range of remaining terms to maturity (in years)		Less than 1 to 4			Less than 1 to 4
Range of assigned internal risk ratings		3 to 5			3 to 5
Maximum potential amount of future undiscounted payments	$	1,914		$	2,413
Percent of maximum potential amount of future undiscounted payments covered by proceeds from liquidation of pledged collateral		66	%		80	%

Gain (Loss) Recognized on Derivative Instruments

Not Designated in Hedging Relationship

(Amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011		2010
Gain on derivatives recognized in capital markets products income:
Interest rate contracts	$	3,577		$	1,924		$	9,372	$	4,075
Foreign exchange contracts		1,685			1,134			4,220		3,337
Credit contracts		248			46			278		83
Total capital markets group derivatives		5,510			3,104			13,870		7,495
Gain (loss) on other derivatives recognized in other income, service charges and fees:
Foreign exchange derivatives		42			(233	)		128		(6	)
Mortgage banking derivatives		(80	)		36			48		(3	)
Total other derivatives		(38	)		(197	)		176		(9	)
Total derivatives	$	5,472		$	2,907		$	14,046	$	7,486

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Goodwill And Other Intangible Assets (Additional Information - Other Intangible Assets) (Details)	9 Months Ended
	Sep. 30, 2011 years
Core Deposit Intangible [Member]
Weighted average remaining life at period-end (in years)	5
Client Relationships [Member]
Weighted average remaining life at period-end (in years)	8
Assembled Workforce [Member]
Weighted average remaining life at period-end (in years)	1

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Goodwill And Other Intangible Assets (Changes in the Carrying Amount of Goodwill by Operating Segment) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Goodwill	$ 94,584	$ 94,621
Banking [Member]
Goodwill	81,755	81,755
Trust And Investments [Member]
Goodwill	12,829	12,866
Holding Company Activities [Member]
Goodwill

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Estimated Fair Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2011

Estimated Fair Value Of Financial Instruments

Fair Value Measurements On A Recurring Basis

	September 30, 2011								December 31, 2010
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserv- able Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserv- able Inputs (Level 3)		Total
Assets:
Securities available-for-sale
U.S. Treasury	$	36,406	$	—	$	—	$	36,406	$	—	$	—	$	—	$	—
U.S. Agencies		—		10,128		—		10,128		—		10,426		—		10,426
Collateralized mortgage obligations		—		383,685		—		383,685		—		451,721		—		451,721
Residential mortgage- backed securities		—		1,292,168		—		1,292,168		—		1,247,031		—		1,247,031
State and municipal		—		149,700		—		149,700		—		172,108		—		172,108
Foreign sovereign debt		—		500		—		500		—		500		—		500
Total securities available-for-sale		36,406		1,836,181		—		1,872,587		—		1,881,786		—		1,881,786
Mortgage loans held for sale		—		—		24,126		24,126		—		—		—		—
Capital market derivative assets(1)		—		110,203		1,002		111,205		—		95,596		4,654		100,250
Other assets(2)		—		385		—		385		—		250		—		250
Total assets	$	36,406	$	1,946,769	$	25,128	$	2,008,303	$	—	$	1,977,632	$	4,654	$	1,982,286
Liabilities:
Capital market derivative liabilities(1)	$	—	$	113,919	$	15	$	113,934	$	—	$	102,009	$	9	$	102,018
Other liabilities(2)		—		245		—		245		—		280		—		280
Total liabilities	$	—	$	114,164	$	15	$	114,179	$	—	$	102,289	$	9	$	102,298

⁽¹⁾  Capital market derivative assets and derivative liabilities include client-related derivatives.

⁽²⁾  Other assets and other liabilities include derivatives designated in hedging relationships, derivatives for commitments to fund certain mortgage loans held for sale and end-user foreign exchange derivatives.

Reconciliation Of Beginning And Ending Fair Value For Those Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

	Quarters Ended September 30,
	2011									2010
	Mortgage Loans Held For Sale			Derivative Assets			Derivative (Liabilities)			Derivative Assets			Derivative (Liabilities)
Balance at beginning of period	$	—		$	2,369		$	(11	)	$	3,505		$	(76	)
Total gains (losses):
Included in earnings (1)		16			(38	)		238			822			46
Purchases, issuances, sales and settlements:
Purchases		—			—			—			—			—
Issuances		67,402			—			—			—			—
Sales		(43,292	)		—			—			—			—
Settlements		—			(705	)		(242	)		(901	)		—
Transfers in (out) of level 3		—			(624	)		—			2,583			—
Balance at end of period	$	24,126		$	1,002		$	(15	)	$	6,009		$	(30	)
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	$	16		$	(73	)	$	238		$	823		$	(41	)

	Nine Months Ended September 30,
	2011									2010
	Mortgage Loans Held For Sale			Derivative Assets			Derivative (Liabilities)			State and Municipal Securities Available- For-Sale			Derivative Assets			Derivative (Liabilities)
Balance at beginning of year	$	—		$	4,654		$	(9	)	$	3,615		$	1,468		$	(101	)
Total gains (losses):
Included in earnings (1)		16			(175	)		266			—			2,408			83
Purchases, issuances, sales and settlements:
Purchases		—			—			—			—			—			—
Issuances		67,402			42			(30	)		—			—			(12	)
Sales		(43,292	)		—			—			(3,615	)		—			—
Settlements		—			(3,216	)		(242	)		—			(2,498	)		—
Transfers in (out) of level 3		—			(303	)		—			—			4,631			—
Balance at end of period	$	24,126		$	1,002		$	(15	)	$	—		$	6,009		$	(30	)
Change in unrealized gains (losses) in earnings relating to assets and liabilities still held at end of period	$	16		$	(42	)	$	(266	)	$	—		$	1,192		$	(70	)

⁽¹⁾   Amounts disclosed in this line are included in capital markets products income in the Consolidated Statements of Income.

Summary Of The Difference Between The Aggregate Fair Value And Remaining Principle Balance In Mortgage Loans Held For Sale

	September 30, 2011
	Aggregate Fair Value		Difference		Aggregate Unpaid Principal Balance
Mortgage loans held for sale
Total (1)	$	24,126	$	16	$	24,110

⁽¹⁾  The change in fair value is reflected in mortgage banking non-interest income.

Fair Value Measurements On A Nonrecurring Basis

	September 30, 2011								December 31, 2010
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Loans held for sale	$	—	$	—	$	—	$	—	$	—	$	—	$	30,758	$	30,758
Collateral-dependent impaired loans net of reserve for loan losses		—		—		283,452		283,452		—		—		328,492		328,492
Covered assets- foreclosed real estate		—		—		28,344		28,344		—		—		32,155		32,155
OREO		—		—		116,364		116,364		—		—		88,728		88,728
Total assets	$	—	$	—	$	428,160	$	428,160	$	—	$	—	$	480,133	$	480,133

Collateral-Dependent Impaired Loans

	September 30, 2011			December 31, 2010
Carrying value	$	353,343		$	398,015
Specific reserves		(69,891	)		(69,523	)
Fair value	$	283,452		$	328,492

Financial Instruments

	As of
	September 30, 2011				December 31, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and due from banks	$	171,268	$	171,268	$	112,772	$	112,772
Federal funds sold and other short-term investments		248,559		248,559		541,316		541,316
Loans held for sale		24,126		24,126		30,758		30,758
Securities available-for-sale		1,872,587		1,872,587		1,881,786		1,881,786
Securities held-to-maturity		273,200		272,864		—		—
Non-marketable equity investments		43,894		43,894		23,537		23,537
Loans, net of allowance for loan losses and unearned fees		8,474,913		8,051,212		8,891,536		8,535,266
Covered assets, net of allowance for covered loan losses		302,284		319,714		381,875		400,783
Accrued interest receivable		32,686		32,686		33,854		33,854
Investment in bank owned life insurance		50,565		50,565		49,408		49,408
Capital markets derivative assets		111,248		111,248		100,250		100,250
Financial Liabilities:
Deposits	$	10,108,663	$	10,124,413	$	10,535,429	$	10,549,930
Short-term borrowings		59,154		59,423		118,561		120,522
Long-term debt		379,793		355,110		414,793		414,340
Accrued interest payable		5,841		5,841		5,968		5,968
Capital markets derivative liabilities		113,968		113,968		102,018		102,018

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Long-Term Debt (Scheduled Maturities of Long-Term Debt) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Long-Term Debt
2013	$ 5,000
2014	2,000
2015	123,000
2016 and thereafter	249,793
Total	$ 379,793	$ 414,793

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Covered Assets (Tables)

9 Months Ended

Sep. 30, 2011

Covered Assets

Carrying Amount Of Covered Assets

Covered Assets

(Amounts in thousands)

	September 30, 2011											December 31, 2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Other Assets		Total			Purchased Impaired Loans			Purchased Nonimpaired Loans			Other Assets		Total
Commercial loans	$	10,559		$	23,227		$	—	$	33,786		$	12,824		$	31,988		$	—	$	44,812
Commercial real estate loans		42,395			122,186			—		164,581			57,979			131,215			—		189,194
Residential mortgage loans		287			51,889			—		52,176			258			56,490			—		56,748
Consumer installment and other		281			5,661			306		6,248			197			8,624			308		9,129
Foreclosed real estate		—			—			28,344		28,344			—			—			32,155		32,155
Asset in lieu		—			—			—		—			—			—			469		469
Estimated loss reimbursement by the FDIC		—			—			33,838		33,838			—			—			64,703		64,703
Total covered assets		53,522			202,963			62,488		318,973			71,258			228,317			97,635		397,210
Allowance for covered loan losses		(7,548	)		(9,141	)		—		(16,689	)		(8,601	)		(6,733	)		—		(15,334	)
Net covered assets	$	45,974		$	193,822		$	62,488	$	302,284		$	62,657		$	221,584		$	97,635	$	381,876
Nonperforming covered loans (1)									$	21,677										$	16,357

⁽¹⁾  Excludes purchased impaired loans which are accounted for on a pool basis based on common risk characteristics as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Because we are recognizing interest income on each pool of loans, all purchased impaired loans are considered to be performing.

Changes In Allowance For Covered Loan Losses

Allowance for Covered Loan Losses

(Amounts in thousands)

	Quarters Ended September 30,
	2011									2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Total			Purchased Impaired Loans		Purchased Nonimpaired Loans			Total
Balance at beginning of period	$	8,817		$	8,087		$	16,904		$	805	$	4,371		$	5,176
Loans charged-off		(264	)		(66	)		(330	)		—		—			—
Recoveries on loans previously charged-off		24			27			51			—		—			—
Net (charge-offs) recoveries		(240	)		(39	)		(279	)		—		—			—
Provision (release) for covered loan losses (1)		(1,029	)		1,093			64			7,124		(126	)		6,998
Balance at end of period	$	7,548		$	9,141		$	16,689		$	7,929	$	4,245		$	12,174

⁽¹⁾  Includes a provision for credit losses of $274,000 and $1.4 million recorded in the Consolidated Statements of Income for the quarters ended September 30, 2011 and 2010, respectively, representing the Company's 20% non-reimbursable portion under the loss share agreement.

	Nine Months Ended September 30,
	2011									2010
	Purchased Impaired Loans			Purchased Nonimpaired Loans			Total			Purchased Impaired Loans		Purchased Nonimpaired Loans		Total
Balance at beginning of year	$	8,601		$	6,733		$	15,334		$	755	$	2,009	$	2,764
Loans charged-off		(264	)		(67	)		(331	)		—		—		—
Recoveries on loans previously charged-off		352			72			424			—		—		—
Net recoveries		88			5			93			—		—		—
Provision (release) for covered loan losses (1)		(1,141	)		2,403			1,262			7,174		2,236		9,410
Balance at end of period	$	7,548		$	9,141		$	16,689		$	7,929	$	4,245	$	12,174

⁽¹⁾  Includes a provision for credit losses of $514,000 and $1.9 million recorded in the Consolidated Statements of Income for the nine months ended September 30, 2011 and 2010, respectively, representing the Company's 20% non-reimbursable portion under the loss share agreement.

Schedule Of Change In Purchased Impaired Loans Accretable Yield And Carrying Amount

Change in Purchased Impaired Loans Accretable Yield and Carrying Amount

(Amounts in thousands)

	2011						2010
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Quarters Ended September 30
Balance at beginning of period	$	9,615		$	62,541		$	38,797		$	91,302
Payments received		—			(3,461	)		—			(2,626	)
Charge-offs/disposals(1)		(6,357	)		(6,357	)		(2,990	)		(2,990	)
Reclassifications from (to) nonaccretable difference, net		4,261			—			(10,850	)		—
Accretion		(799	)		799			(2,201	)		2,201
Balance at end of period	$	6,720		$	53,522		$	22,756		$	87,887
Nine Months Ended September 30
Balance at beginning of period	$	13,253		$	71,258		$	34,790		$	94,140
Payments received		—			(11,848	)		—			(8,580	)
Charge-offs/disposals(1)		(9,471	)		(9,471	)		(5,517	)		(5,446	)
Reclassifications from nonaccretable difference, net		6,521			—			1,256			—
Accretion		(3,583	)		3,583			(7,773	)		7,773
Balance at end of period	$	6,720		$	53,522		$	22,756		$	87,887
Contractual amount outstanding at period end				$	81,985					$	170,942

⁽¹⁾ Includes transfers to covered foreclosed real estate.

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Consolidated Statements of Changes in Equity (USD $) In Thousands		Preferred Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]	Non-Controlling Interests [Member]	Total
Balance at Dec. 31, 2009		$ 237,487	$ 70,444	$ (18,489)	$ 940,338	$ (22,093)	$ 27,896	$ 33	$ 1,235,616
Comprehensive Income:
Net (loss) income						(10,395)		217	(10,178)
Other comprehensive income	[1]						20,880		20,880
Total comprehensive income									10,702
Cash dividends:
Common stock						(2,098)			(2,098)
Preferred stock						(9,143)			(9,143)
Issuance of common stock					(5)				(5)
Accretion of preferred stock discount		1,055				(1,055)
Common stock issued under benefit plans			208		2				210
Shortfall tax benefit from shared-based compensation					(2,076)				(2,076)
Stock repurchased in connection with benefit plans				(534)					(534)
Share-based compensation expense			5		12,462				12,467
Balance at Sep. 30, 2010		238,542	70,657	(19,023)	950,721	(44,784)	48,776	250	1,245,139
Balance at Dec. 31, 2010		238,903	70,972	(20,054)	954,977	(36,999)	20,078	33	1,227,910
Comprehensive Income:
Net (loss) income						33,311		163	33,474
Other comprehensive income	[1]						25,973		25,973
Total comprehensive income									59,447
Cash dividends:
Common stock						(2,127)			(2,127)
Preferred stock						(9,143)			(9,143)
Issuance of common stock					32				32
Accretion of preferred stock discount		1,117				(1,117)
Common stock issued under benefit plans			213		872				1,085
Shortfall tax benefit from shared-based compensation					(1,428)				(1,428)
Stock repurchased in connection with benefit plans				(626)					(626)
Share-based compensation expense			35		10,991				11,026
Noncontrolling interest activities					196			(196)
Balance at Sep. 30, 2011		$ 240,020	$ 71,220	$ (20,680)	$ 965,640	$ (16,075)	$ 46,051		$ 1,286,176

[1] Net of taxes and reclassification adjustments.

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Commitments, Guarantees, And Contingent Liabilities

9 Months Ended

Sep. 30, 2011

Commitments, Guarantees, And Contingent Liabilities

Commitments, Guarantees, And Contingent Liabilities

15. COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES

Credit Extension Commitments and Guarantees

In the normal course of business, we enter into a variety of financial instruments with off-balance sheet risk to meet the financing needs of our clients and to conduct lending activities. These instruments principally include commitments to extend credit, standby letters of credit, and commercial letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount reflected in the Consolidated Statements of Financial Condition.

Contractual or Notional Amounts of Financial Instruments

(Amounts in thousands)

	September 30, 2011		December 31, 2010
Commitments to extend credit:
Home equity lines	$	161,721	$	175,365
Residential 1-4 family construction - secured		24,909		15,600
Commercial real estate - secured		84,278		64,388
Commercial and industrial		3,001,902		2,929,215
All other commitments		520,472		686,469
Total commitments to extend credit	$	3,793,282	$	3,871,037

	September 30, 2011		December 31, 2010
Letters of credit:
Financial standby	$	292,124	$	265,675
Performance standby		24,646		32,425
Commercial letters of credit		3,496		115
Total letters of credit	$	320,266	$	298,215

Commitments to extend credit are agreements to lend funds to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and variable interest rates tied to the prime rate or LIBOR and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash-flow requirements. As of September 30, 2011, we had a reserve for unfunded commitments of $7.0 million, which reflects our estimate of inherent losses associated with these commitment obligations. The reserve is recorded in other liabilities in the Consolidated Statements of Financial Condition.

Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a client to a third party. Standby letters of credit include performance and financial guarantees for clients in connection with contracts between our clients and third parties. Standby letters of credit are agreements where we are obligated to make payment to a third party on behalf of a client in the event the client fails to meet their contractual obligations. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the client and third party.

In the event of a client's nonperformance, our credit loss exposure is equal to the contractual amount of those commitments. We manage this credit risk in a similar manner to evaluating credit risk in extending loans to clients under our credit policies. We use the same credit policies in making credit commitments as for on-balance sheet instruments, mitigating exposure to credit loss through various collateral requirements, if deemed necessary. In the event of nonperformance by the clients, we have rights to the underlying collateral, which could include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities.

The maximum potential future payments guaranteed by us under standby letters of credit arrangements are equal to the contractual amount of the commitment. The unamortized fees associated with standby letters of credit, which are included in other liabilities in the Consolidated Statements of Financial Condition, totaled $1.0 million as of September 30, 2011. We amortize these amounts into income over the commitment period. As of September 30, 2011, standby letters of credit had a remaining weighted-average term of approximately 14 months, with remaining actual lives ranging from less than 1 year to 18 years.

Credit Card Settlement Guarantees

Our third party vendor issues corporate purchase credit cards on behalf of our commercial clients. The corporate purchase credit cards are issued to employees of our commercial clients at the client's direction and used for payment of business-related expenses. In most circumstances, these cards will be underwritten by our third party vendor. However, in certain circumstances, we may enter into a recourse agreement, which transfers the credit risk from the third party vendor to us in the event that the licensee fails to meet its financial payment obligation. In these circumstances, a total exposure amount is established for our corporate client. In addition to the obligations presented in the prior table, the maximum potential future payments guaranteed by us under this third party settlement guarantee is $2.6 million at September 30, 2011.

We believe that the estimated amounts of maximum potential future payments are not representative of our actual potential loss given our insignificant historical losses from this third party settlement guarantee program. As of September 30, 2011, we have not recorded any contingent liability in the consolidated financial statements for this settlement guarantee program, and management believes that the probability of any payments under this arrangement is remote.

Mortgage Loans Sold with Recourse

Certain mortgage loans sold have limited recourse provisions. We recorded no losses for the quarter and nine months ended September 30, 2011 arising from limited recourse provisions. The losses for the quarter and nine months ended September 30, 2010 arising from limited recourse provisions were not material. In addition, the Company has not established any liability for potential future payments relating to mortgage loans sold in prior periods.

Legal Proceedings

On October 22, 2010, a lawsuit was filed in federal court in the Northern District of Illinois against the Company on behalf of a purported class of purchasers of our common stock between November 2, 2007 and October 23, 2009. Certain of our current and former executive officers and directors and firms that participated in the underwriting of our June 2008 and May 2009 public offerings of common stock were also named as defendants in the litigation. On January 25, 2011, the City of New Orleans Employees' Retirement System and State-Boston Retirement System were together named as the lead plaintiff, and an amended complaint was filed on February 18, 2011. The amended complaint alleged various claims of securities law violations against certain of the named defendants relating to disclosures we made during the class period in filings under the Securities Act of 1933 and the Securities Exchange Act of 1934. The plaintiffs sought class certification, compensatory damages in an unspecified amount, costs and expenses, including attorneys' fees, and rescission. The defendants filed a joint motion to dismiss seeking dismissal of all counts. On November 7, 2011, the court released its decision on defendants' motion and dismissed all counts of the complaint with prejudice. The plaintiffs have 30 days from the date of this decision to file a notice of appeal, if any.

As of September 30, 2011, there were also various legal proceedings pending against the Company and its subsidiaries in the ordinary course of business. Management does not believe that the outcome of these proceedings will have, individually or in the aggregate, a material adverse effect on the Company's results of operations, financial condition or cash flows.

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Securities (Remaining Contractual Maturity of Securities) (Details) (USD $) In Thousands	Sep. 30, 2011
Available-for-sale securities, one year or less, amortized cost	$ 2,298
Available-for-sale securities, one year or less, fair value	2,320
Available-for-sale securities, one year to five years, amortized cost	65,768
Available-for-sale securities, one year to five years, fair value	67,834
Available-for-sale securities, five years to ten years, amortized costs	93,367
Available-for-sale securities, five years to ten years, fair value	100,388
Available-for-sale securities, after ten years, amortized cost	24,923
Available-for-sale securities, after ten years, fair value	26,192
Available-for-sale securities, total amortized cost	1,798,405
Available-for-sale securities, total fair value	1,872,587
Held-to-maturity and non-marketable equity securities, total amortized cost	317,094
Held-to-maturity and non-marketable equity securities, total fair value	316,758
Collateralized Mortgage Obligations [Member]
Available-for-sale securities, debt maturities, without single maturity date, amortized cost	369,081
Available-for-sale securities, debt maturities, without single maturity date, fair value	383,685
Residential Mortgage-Backed Securities [Member]
Available-for-sale securities, debt maturities, without single maturity date, amortized cost	1,242,968
Available-for-sale securities, debt maturities, without single maturity date, fair value	1,292,168
Held-to-maturity and non-marketable equity securities, debt maturities, without single maturity date, amortized cost	273,200
Held-to-maturity and non-marketable equity securities, debt maturities, without single maturity date, fair value	272,864
Non-Marketable Equity Securities [Member]
Held-to-maturity and non-marketable equity securities, debt maturities, without single maturity date, amortized cost	43,894
Held-to-maturity and non-marketable equity securities, debt maturities, without single maturity date, fair value	$ 43,894

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Estimated Fair Value Of Financial Instruments (Financial Instruments) (Details) (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010		Sep. 30, 2010
Cash and due from banks	$ 171,268		$ 112,772
Federal funds sold and other short-term investments	248,559		541,316
Loans held for sale	24,126		30,758
Securities available-for-sale	1,872,587		1,881,786
Securities held-to-maturity, at fair value	273,200
Non-marketable equity investments	43,894		23,537
Loans - excluding covered assets, net of unearned fees	8,674,955	[1]	9,114,357		8,992,129	[1]
Covered assets	318,973		397,210
Accrued interest receivable	32,686		33,854
Investment in bank owned life insurance	50,565		49,408
Capital markets derivative assets	111,205	[2]	100,250	[2]
Deposits	10,108,663		10,535,429
Short-term borrowings	59,154		118,561
Long-term debt	379,793		414,793
Accrued interest payable	5,841		5,968
Capital markets derivative liabilities	113,934	[2]	102,018	[2]
Carrying Amount [Member]
Cash and due from banks	171,268		112,772
Federal funds sold and other short-term investments	248,559		541,316
Loans held for sale	24,126		30,758
Securities available-for-sale	1,872,587		1,881,786
Securities held-to-maturity, at fair value	273,200
Non-marketable equity investments	43,894		23,537
Loans - excluding covered assets, net of unearned fees	8,474,913		8,891,536
Covered assets	302,284		381,875
Accrued interest receivable	32,686		33,854
Investment in bank owned life insurance	50,565		49,408
Capital markets derivative assets	111,248		100,250
Deposits	10,108,663		10,535,429
Short-term borrowings	59,154		118,561
Long-term debt	379,793		414,793
Accrued interest payable	5,841		5,968
Capital markets derivative liabilities	113,968		102,018
Estimated Fair Value [Member]
Cash and due from banks	171,268		112,772
Federal funds sold and other short-term investments	248,559		541,316
Loans held for sale	24,126		30,758
Securities available-for-sale	1,872,587		1,881,786
Securities held-to-maturity, at fair value	272,864
Non-marketable equity investments	43,894		23,537
Loans - excluding covered assets, net of unearned fees	8,051,212		8,535,266
Covered assets	319,714		400,783
Accrued interest receivable	32,686		33,854
Investment in bank owned life insurance	50,565		49,408
Capital markets derivative assets	111,248		100,250
Deposits	10,124,413		10,549,930
Short-term borrowings	59,423		120,522
Long-term debt	355,110		414,340
Accrued interest payable	5,841		5,968
Capital markets derivative liabilities	$ 113,968		$ 102,018

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

[2] Capital market derivative assets and derivative liabilities include client-related derivatives.

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Operating Segments

9 Months Ended

Sep. 30, 2011

Operating Segments

Operating Segments

17. OPERATING SEGMENTS

We have three primary operating segments: Banking and Trust and Investments, each of which are delineated by the products and services that each segment offers, and the Holding Company. The Banking operating segment includes commercial and personal banking services, which includes mortgage originations. Commercial banking services are primarily provided to corporations and other business clients and include a wide array of lending and cash management products. Personal banking services offered to individuals, professionals, and entrepreneurs include direct lending and depository services. The Trust and Investments segment includes certain activities of our PrivateWealth group, including investment management, investment advisory, personal trust and estate administration, custodial and escrow, retirement account administration, and brokerage services. The activities of the third operating segment, the Holding Company, include the direct and indirect ownership of our banking and nonbanking subsidiaries, the issuance of debt and intersegment eliminations.

The accounting policies of the individual operating segments are the same as those of the Company as described in Note 1. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated from consolidated results of operations. Financial results for each segment are presented below. For segment reporting purposes, the statement of financial condition of Trust and Investments is included with the Banking segment.

		0000000000		0000000000		0000000000		0000000000			0000000000			0000000000			0000000000		0000000000
	Quarters Ended September 30,
	Banking				Trust and Investments					Holding Company and Other Adjustments						Consolidated Company
	2011		2010		2011		2010			2011			2010			2011		2010
Net interest income	$	105,213	$	103,957	$	635	$	657		$	(4,759	)	$	(5,655	)	$	101,089	$	98,959
Provision for loan and covered loan losses		32,615		41,435		—		—			—			—			32,615		41,435
Non-interest income		23,162		19,023		4,457		4,295			16			42			27,635		23,360
Non-interest expense		65,157		56,481		4,680		4,844			5,197			6,752			75,034		68,077
Income (loss) before taxes		30,603		25,064		412		108			(9,940	)		(12,365	)		21,075		12,807
Income tax provision (benefit)		11,156		9,450		164		42			(3,727	)		(4,706	)		7,593		4,786
Net income (loss)		19,447		15,614		248		66			(6,213	)		(7,659	)		13,482		8,021
Noncontrolling interest expense		—		—		33		71			—			—			33		71
Net income (loss) attributable to controlling interests	$	19,447	$	15,614	$	215	$	(5	)	$	(6,213	)	$	(7,659	)	$	13,449	$	7,950

		0000000000		0000000000		0000000000		0000000000			0000000000			0000000000			0000000000		0000000000
	Nine Months Ended September 30,
	Banking				Trust and Investments					Holding Company and Other Adjustments						Consolidated Company
	2011		2010		2011		2010			2011			2010			2011		2010
Net interest income	$	316,521	$	315,765	$	1,899	$	1,976		$	(14,275	)	$	(17,131	)	$	304,145	$	300,610
Provision for loan and covered loan losses		101,286		159,375		—		—			—			—			101,286		159,375
Non-interest income		58,695		44,696		14,138		13,555			21			130			72,854		58,381
Non-interest expense		193,938		180,005		14,544		15,187			17,565			22,258			226,047		217,450
Income (loss) before taxes		79,992		21,081		1,493		344			(31,819	)		(39,259	)		49,666		(17,834	)
Income tax provision (benefit)		27,580		7,010		595		134			(11,983	)		(14,800	)		16,192		(7,656	)
Net income (loss)		52,412		14,071		898		210			(19,836	)		(24,459	)		33,474		(10,178	)
Noncontrolling interest expense		—		—		163		217			—			—			163		217
Net income (loss) attributable to controlling interests	$	52,412	$	14,071	$	735	$	(7	)	$	(19,836	)	$	(24,459	)	$	33,311	$	(10,395	)

Selected Balances	Banking				Holding Company and Other Adjustments (1)						Consolidated Company
	9/30/11		12/31/10		9/30/11			12/31/10			9/30/11		12/31/10
Assets	$	10,650,944	$	11,180,923	$	1,368,917		$	1,284,698		$	12,019,861	$	12,465,621
Total loans		8,674,955		9,114,357		—			—			8,674,955		9,114,357
Deposits		10,276,112		10,720,500		(167,449	)		(185,071	)		10,108,663		10,535,429

⁽¹⁾  Deposit amounts represent the elimination of Holding Company cash accounts included in total deposits of the Banking segment.

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Junior Subordinated Deferrable Interest Debentures Held By Trusts That Issued Guaranteed Capital Debt Securities (Common Securities, Preferred Securities, And Related Debentures) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2011		Dec. 31, 2010
Common Securities Issued	$ 3,043
Trust Preferred Securities Issued	241,750	[1]
Junior subordinated debentures	244,800
Three-Month LIBOR + 2.65% [Member]
Increment Over Libor Of Long Term Debt	2.65%
Three-Month LIBOR + 2.65% [Member] | Parent Company [Member]
Junior subordinated debentures	8,248	[2],[3]	8,248	[2],[3]
Three-Month LIBOR + 2.65% [Member] | Bloomfield Hills Statutory Trust I [Member]
Increment Over Libor Of Long Term Debt	2.65%
Three-Month LIBOR + 1.71% [Member]
Increment Over Libor Of Long Term Debt	1.71%
Three-Month LIBOR + 1.71% [Member] | Parent Company [Member]
Junior subordinated debentures	51,547	[2],[4]	51,547	[2],[4]
Three-Month LIBOR + 1.71% [Member] | Private Bancorp Statutory Trust II [Member]
Increment Over Libor Of Long Term Debt	1.71%
Three-Month LIBOR + 1.50% [Member]
Increment Over Libor Of Long Term Debt	1.50%
Three-Month LIBOR + 1.50% [Member] | Parent Company [Member]
Junior subordinated debentures	41,238	[2],[5]	41,238	[2],[5]
Three-Month LIBOR + 1.50% [Member] | Private Bancorp Statutory Trust III [Member]
Increment Over Libor Of Long Term Debt	1.50%
Bloomfield Hills Statutory Trust I [Member]
Issuance Date	May 2004
Common Securities Issued	248
Trust Preferred Securities Issued	8,000	[1]
Coupon Rate	3.00%	[6]
Earliest Redemption Date (on or after)	Jun. 17, 2009	[7]
Maturity	Jun. 2034
Junior subordinated debentures	8,248	[7]	8,248	[7]
Private Bancorp Statutory Trust II [Member]
Issuance Date	Jun. 2005
Common Securities Issued	1,547
Trust Preferred Securities Issued	50,000	[1]
Coupon Rate	2.06%	[6]
Earliest Redemption Date (on or after)	Sep. 15, 2010	[7]
Maturity	Sep. 2035
Junior subordinated debentures	51,547	[7]	51,547	[7]
Private Bancorp Statutory Trust III [Member]
Issuance Date	Dec. 2005
Common Securities Issued	1,238
Trust Preferred Securities Issued	40,000	[1]
Coupon Rate	1.85%	[6]
Earliest Redemption Date (on or after)	Dec. 15, 2010	[7]
Maturity	Dec. 2035
Junior subordinated debentures	41,238	[7]	41,238	[7]
Private Bancorp Statutory Trust IV [Member]
Issuance Date	May 2008
Common Securities Issued	10
Trust Preferred Securities Issued	143,750	[1]
Coupon Rate	10.00%	[6]
Earliest Redemption Date (on or after)	Jun. 13, 2013	[7]
Maturity	Jun. 2068
Junior subordinated debentures	143,760	[7]	143,760	[7]
Parent Company [Member]
Junior subordinated debentures	$ 244,793	[7]	$ 244,793	[7]

[1] The trust preferred securities accrue distributions at a rate equal to the interest rate and maturity identical to that of the related Debentures. The trust preferred securities will be redeemed upon maturity of the related Debentures.

[2] Qualifies as Tier I capital for regulatory capital purposes; the capital qualification is grandfathered under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

[3] Variable rate in effect at September 30, 2011, based on three-month LIBOR + 2.65%.

[4] Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.71%.

[5] Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.50%.

[6] Reflects the coupon rate in effect at September 30, 2011. The coupon rate for the Bloomfield Hills Statutory Trust I is a variable rate and is based on three-month LIBOR plus 2.65%. The coupon rates for the PrivateBancorp Statutory Trusts II and III are at a variable rate based on three-month LIBOR plus 1.71% for Trust II and three-month LIBOR plus 1.50% for Trust III. The coupon rate for the PrivateBancorp Statutory Trust IV is fixed. Distributions for all of the Trusts are payable quarterly. We have the right to defer payment of interest on the Debentures at any time or from time to time for a period not exceeding five years provided no extension period may extend beyond the stated maturity of the Debentures. During such extension period, distributions on the trust preferred securities would also be deferred, and our ability to pay dividends on our common stock would be restricted. The Federal Reserve has the ability to prevent interest payments on the Debentures.

[7] The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at maturity or their earlier redemption. Subject to restrictions relating to our participation in the U.S. Treasury's Troubled Asset Relief Program's Capital Purchase Program ("TARP CPP"), the Debentures are redeemable in whole or in part prior to maturity at any time after the dates shown in the table, and earlier at our discretion if certain conditions are met, and, in any event, only after we have obtained Federal Reserve approval, if then required under applicable guidelines or regulations.

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Long-Term Debt (Narrative) (Details) (USD $)	Sep. 30, 2011
Junior subordinated debentures issued	$ 244,800,000
Private Bank [Member]
Subordinated debt facility	$ 120,000,000
Variable interest rate of debt facility	3.50%

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Consolidated Statements of Cash Flows (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Operating Activities
Net income (loss)	$ 33,311	$ (10,395)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for loan and covered loan losses	101,286	159,375
Depreciation of premises, furniture, and equipment	6,437	5,795
Net amortization of premium on securities	9,176	5,114
Net gains on sale of securities	(5,407)	(2,873)
Net losses on sale of other real estate owned	6,832	1,028
Net accretion of discount on covered assets	(2,919)	(17,410)
Bank owned life insurance income	(1,157)	(1,283)
Net increase (decrease) in deferred loan fees	1,358	(730)
Share-based compensation expense	11,223	12,793
Provision for deferred income tax expense (benefit)	5,731	(12,419)
Net amortization of other intangibles	1,125	1,243
Change in loans held for sale	6,632	(15,908)
Fair market value adjustments on derivatives	952	3,285
Net decrease in accrued interest receivable	1,168	865
Net decrease in accrued interest payable	(127)	(2,070)
Net decrease in other assets	17,611	23,773
Net increase (decrease) in other liabilities	4,829	(27,050)
Net cash provided by operating activities	198,061	123,133
Investing Activities
Proceeds from maturities, repayments, and calls	287,206	295,497
Proceeds from sales	280,082	197,841
Purchases	(540,047)	(929,725)
Held-to-maturity securities:
Proceeds from maturities, repayments, and calls	202
Purchases	(273,417)
Net decrease (increase) in loans	217,292	(191,531)
Net decrease in covered assets	81,997	107,103
Proceeds from sale of other real estate owned	51,813	45,733
Net purchases of premises, furniture, and equipment	(4,531)	(6,798)
Net cash provided by (used in) investing activities	100,597	(481,880)
Financing Activities
Net (decrease) increase in deposit accounts	(426,766)	638,558
Net decrease in short-term borrowings	(941)	(2,324)
Repayment of FHLB advances	(93,000)	(126,000)
Proceeds from (payments for) the issuance of common stock	32	(5)
Stock repurchased in connection with benefit plans	(626)	(534)
Cash dividends paid	(11,275)	(11,242)
Exercise of stock options and restricted share activity	1,085	210
Shortfall tax benefit from exercise of stock options and release of restricted share activity	(1,428)	(2,076)
Net cash (used in) provided by financing activities	(532,919)	496,587
Net (decrease) increase in cash and cash equivalents	(234,261)	137,840
Cash and cash equivalents at beginning of year	654,088	539,095
Cash and cash equivalents at end of period	419,827	676,935
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	57,480	86,547
Cash paid for income taxes	18,272	6,552
Non-cash transfers of loans to other real estate	$ 97,701	$ 100,453

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Long-Term Debt

9 Months Ended

Sep. 30, 2011

Long-Term Debt

Long-Term Debt

9. LONG-TERM DEBT

Long-Term Debt

(Dollars in thousands)

	September 30, 2011			December 31, 2010
Parent Company:
3.00% junior subordinated debentures due 2034 (1)(a)	$	8,248		$	8,248
2.06% junior subordinated debentures due 2035 (2)(a)		51,547			51,547
1.85% junior subordinated debentures due 2035 (3)(a)		41,238			41,238
10.00% junior subordinated debentures due 2068 (a)		143,760			143,760
Subtotal		244,793			244,793
Subsidiaries:
Federal Home Loan Bank advances		15,000			50,000
3.87% subordinated debt facility due 2015 (4)(b)		120,000			120,000
Subtotal		135,000			170,000
Total long-term debt	$	379,793		$	414,793
Weighted average interest rate of FHLB long-term advances at period-end		4.42	%		4.39	%
Weighted average remaining maturity of FHLB long-term advances at period-end (in months)		52.2			37.5

⁽¹⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 2.65%.

⁽²⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.71%.

⁽³⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.50%.

⁽⁴⁾  Variable rate in effect at September 30, 2011, based on three-month LIBOR + 3.50%.

^(a)  Qualifies as Tier I capital for regulatory capital purposes; the capital qualification is grandfathered under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

^(b)  Effective in the third quarter 2010, Tier II capital qualification was reduced by 20% of the total balance outstanding and annually thereafter will be reduced by an additional 20%. As of September 30, 2011, 60% of the balance qualified as Tier II capital for regulatory capital purposes.

We have $244.8 million in junior subordinated debentures issued to four separate wholly-owned trusts for the purpose of issuing Company-obligated mandatorily redeemable preferred securities. Refer to Note 10 for further information on the nature and terms of these and previously issued debentures.

FHLB long-term advances, which had a combination of fixed and floating interest rates, were secured by qualifying residential and multi-family mortgages, state and municipal bonds and mortgage-related securities.

We have $120.0 million outstanding under a 7-year subordinated debt facility due September 2015. The debt facility has a variable rate of interest based on LIBOR plus 3.50%, per annum, payable quarterly and re-prices quarterly. The debt may be prepaid at any time prior to maturity without penalty and is subordinate to any future senior indebtedness.

We reclassify long-term debt to short-term borrowings when the remaining maturity becomes less than one year.

Scheduled Maturities of Long-Term Debt

(Amounts in thousands)

	Total
Year ending December 31,
2012	$	—
2013		5,000
2014		2,000
2015		123,000
2016 and thereafter		249,793
Total	$	379,793

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Loans (Troubled Debt Restructuring That Became Nonperforming Within 12 Months of Restructuring) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2011		Sep. 30, 2011
Number of Borrowers	5	[1]	20	[1]
Recorded Investment	$ 4,716	[1]	$ 19,120	[1]
Commercial [Member]
Number of Borrowers	1	[1]	4	[1]
Recorded Investment	1,281	[1]	4,419	[1]
Commercial Real Estate [Member]
Number of Borrowers			10	[1]
Recorded Investment			10,030	[1]
Construction [Member]
Number of Borrowers	1	[1]	3	[1]
Recorded Investment	3,058	[1]	4,294	[1]
Residential Real Estate [Member]
Number of Borrowers	1	[1]	1	[1]
Recorded Investment	99	[1]	99	[1]
Home Equity [Member]
Number of Borrowers	1	[1]	1	[1]
Recorded Investment	26	[1]	26	[1]
Personal [Member]
Number of Borrowers	1	[1]	1	[1]
Recorded Investment	$ 252	[1]	$ 252	[1]

[1] Represents amounts as of the balance sheet date from the quarter the default was first reported.

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Covered Assets (Carrying Amount of Covered Assets) (Details) (USD $) In Thousands	Sep. 30, 2011		Jun. 30, 2011	Dec. 31, 2010		Sep. 30, 2010	Jun. 30, 2010	Dec. 31, 2009
Commercial real estate loans	$ 2,054,925			$ 2,400,923
Foreclosed real estate	116,364			88,728
Total covered assets	318,973			397,210
Allowance for covered loan losses	(16,689)			(15,334)
Net covered assets	302,284			381,876
Covered Assets [Member]
Commercial loans	33,786			44,812
Commercial real estate loans	164,581			189,194
Residential mortgage loans	52,176			56,748
Consumer installment and other	6,248			9,129
Foreclosed real estate	28,344			32,155
Asset in lieu				469
Estimated loss reimbursement by the FDIC	33,838			64,703
Total covered assets	318,973			397,210
Allowance for covered loan losses	(16,689)		(16,904)	(15,334)		(12,174)	(5,176)	(2,764)
Net covered assets	302,284			381,876
Nonperforming covered loans	21,677	[1]		16,357	[1]
Covered Assets [Member] | Purchased Impaired Loans [Member]
Commercial loans	10,559			12,824
Commercial real estate loans	42,395			57,979
Residential mortgage loans	287			258
Consumer installment and other	281			197
Total covered assets	53,522			71,258
Allowance for covered loan losses	(7,548)		(8,817)	(8,601)		(7,929)	(805)	(755)
Net covered assets	45,974			62,657
Covered Assets [Member] | Purchased Nonimpaired Loans [Member]
Commercial loans	23,227			31,988
Commercial real estate loans	122,186			131,215
Residential mortgage loans	51,889			56,490
Consumer installment and other	5,661			8,624
Total covered assets	202,963			228,317
Allowance for covered loan losses	(9,141)		(8,087)	(6,733)		(4,245)	(4,371)	(2,009)
Net covered assets	193,822			221,584
Covered Assets [Member] | Other Assets [Member]
Consumer installment and other	306			308
Foreclosed real estate	28,344			32,155
Asset in lieu				469
Estimated loss reimbursement by the FDIC	33,838			64,703
Total covered assets	62,488			97,635
Net covered assets	$ 62,488			$ 97,635

[1] Excludes purchased impaired loans which are accounted for on a pool basis based on common risk characteristics as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Because we are recognizing interest income on each pool of loans, all purchased impaired loans are considered to be performing.

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Long-Term Debt (Schedule of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2011		Dec. 31, 2010
Junior subordinated debentures	$ 244,800
Federal Home Loan Bank advances	15,000
Total long-term debt	379,793		414,793
Weighted average interest rate of FHLB long-term advances at year end	4.42%		4.39%
Weighted average remaining maturity of FHLB long-term advances at year end (in months).	52.2		37.5
Percentage of balance qualified for Tier II capital	60.00%
Percentage of reduction in balance outstanding qualified for tier II capital	20.00%
Percentage of additional reduction in balance outstanding qualified for tier II capital	20.00%
10.00% Junior Subordinated Debentures Due 2068 [Member] | Parent Company [Member]
Subordinated borrowing, interest rate	10.00%
Subordinated borrowing, due date	Jun. 15, 2068
Junior subordinated debentures	143,760	[1]	143,760	[1]
3.87% Subordinated Debt Facility Due 2015 [Member] | Subsidiaries [Member]
Subordinated debt	120,000	[2],[3]	120,000	[2],[3]
Three-Month LIBOR + 2.65% [Member]
Variable interest rate	2.65%
Three-Month LIBOR + 2.65% [Member] | Parent Company [Member]
Subordinated borrowing, interest rate	3.00%
Subordinated borrowing, due date	Jun. 17, 2034
Junior subordinated debentures	8,248	[1],[4]	8,248	[1],[4]
Three-Month LIBOR + 1.71% [Member]
Variable interest rate	1.71%
Three-Month LIBOR + 1.71% [Member] | Parent Company [Member]
Subordinated borrowing, interest rate	2.06%
Subordinated borrowing, due date	Sep. 15, 2035
Junior subordinated debentures	51,547	[1],[5]	51,547	[1],[5]
Three-Month LIBOR + 1.50% [Member]
Variable interest rate	1.50%
Three-Month LIBOR + 1.50% [Member] | Parent Company [Member]
Subordinated borrowing, interest rate	1.85%
Subordinated borrowing, due date	Dec. 15, 2035
Junior subordinated debentures	41,238	[1],[6]	41,238	[1],[6]
Three-Month LIBOR + 3.50% [Member]
Variable interest rate	3.50%
Three-Month LIBOR + 3.50% [Member] | Subsidiaries [Member]
Subordinated borrowing, interest rate	3.87%
Subordinated borrowing, due date	Sep. 26, 2015
Parent Company [Member]
Junior subordinated debentures	244,793	[7]	244,793	[7]
Total long-term debt	244,793		244,793
Subsidiaries [Member]
Federal Home Loan Bank advances	15,000		50,000
Total long-term debt	$ 135,000		$ 170,000

[1] Qualifies as Tier I capital for regulatory capital purposes; the capital qualification is grandfathered under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

[2] Effective in the third quarter 2010, Tier II capital qualification was reduced by 20% of the total balance outstanding and annually thereafter will be reduced by an additional 20%. As of September 30, 2011, 60% of the balance qualified as Tier II capital for regulatory capital purposes.

[3] Variable rate in effect at September 30, 2011, based on three-month LIBOR + 3.50%.

[4] Variable rate in effect at September 30, 2011, based on three-month LIBOR + 2.65%.

[5] Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.71%.

[6] Variable rate in effect at September 30, 2011, based on three-month LIBOR + 1.50%.

[7] The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at maturity or their earlier redemption. Subject to restrictions relating to our participation in the U.S. Treasury's Troubled Asset Relief Program's Capital Purchase Program ("TARP CPP"), the Debentures are redeemable in whole or in part prior to maturity at any time after the dates shown in the table, and earlier at our discretion if certain conditions are met, and, in any event, only after we have obtained Federal Reserve approval, if then required under applicable guidelines or regulations.

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Equity (Tables)

9 Months Ended

Sep. 30, 2011

Equity

Schedule Of Components Of Accumulated Other Comprehensive Income

	Nine Months Ended September 30,
	2011									2010
	Unrealized Gain (Loss) on Available-for- Sale Securities			Accumulated Gain (Loss) on Effective Cash Flow Hedges			Total			Unrealized Gain (Loss) on Available-for- Sale Securities			Accumulated Gain (Loss) on Effective Cash Flow Hedges		Total
Balance at beginning of period	$	20,078		$	—		$	20,078		$	27,896		$	—	$	27,896
Unrealized gains on securities		47,601			—			47,601			37,719			—		37,719
Unrealized gains on cash flow hedges		—			1,162			1,162			—			—		—
Tax expense on unrealized gains		(18,953	)		(462	)		(19,415	)		(14,496	)		—		(14,496	)
Reclassification adjustment of net gains included in net income		(5,448	)		(156	)		(5,604	)		(3,801	)		—		(3,801	)
Reclassification adjustments for tax expense on realized net gains		2,167			62			2,229			1,458			—		1,458
Balance at end of period	$	45,445		$	606		$	46,051		$	48,776		$	—	$	48,776

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Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

13. INCOME TAXES

Income Tax Provision Analysis

(Dollars in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Income (loss) before income taxes	$	21,075		$	12,807		$	49,666		$	(17,834	)
Income tax provision (benefit):
Current income tax provision	$	4,441		$	9,923		$	10,461		$	4,763
Deferred income tax provision (benefit)		3,152			(5,137	)		5,731			(12,419	)
Total income tax provision (benefit)	$	7,593		$	4,786		$	16,192		$	(7,656	)
Effective tax rate		36.0	%		37.4	%		32.6	%		-42.9	%

Illinois Tax Legislation

In January 2011, the state of Illinois passed legislation that increases the corporate income tax rate from 7.3% to 9.5% (which includes a personal property replacement tax of 2.5%). The change is effective for tax years 2011 through 2014 with the rate declining to 7.75% in 2015 and returning to the pre-2011 rate of 7.3% in 2025. As a result of this change, income tax expense for the nine months ended September 30, 2011 was reduced by $2.8 million for a one-time adjustment to the valuation of the Company's deferred tax asset.

Deferred Tax Assets

Net deferred tax assets totaled $103.2 million at September 30, 2011 and $126.3 million at December 31, 2010. Net deferred tax assets are included in other assets in the accompanying Consolidated Statements of Financial Condition and no valuation allowance is recorded.

We are in a cumulative pre-tax loss position for financial statement purposes for the trailing three-year period ended September 30, 2011. Under current accounting guidance, this represents significant negative evidence in the assessment of whether the deferred tax assets will be realized. However, we have concluded that based on the weight provided by the positive evidence, it is more likely than not that the deferred tax assets will be realized.

Taxable income in prior years and reversing deferred taxable income amounts provide sources from which deferred tax assets may be absorbed. Most significantly, however, we have relied on our ability to generate future federal taxable income, exclusive of reversing temporary differences, as the primary source from which deferred tax assets at September 30, 2011 will be absorbed.

In making the determination that it was more likely than not the deferred tax assets will be realized, we considered negative evidence associated with the cumulative book loss position, as well as continued challenging economic conditions.

We also considered the positive evidence associated with: (a) taxable income generated in 2010 and the first nine months of 2011; (b) reversing taxable temporary differences in future periods; (c) the decline in the cumulative book loss during the past several quarters and our expectations regarding the remainder of 2011; (d) our pre-tax, pre-loan loss provision earnings results during 2009, 2010 and year-to-date 2011, a core source for future taxable income; (e) our reporting of pre-tax profits in each of the past six quarters; (f) the concentration of credit losses in certain segments and vintages of our loan portfolio during the past three years and the relative stability of credit trends in recent quarters; (g) our excess capital position relative to "well capitalized" regulatory standards and other industry benchmarks; and (h) no history of federal net operating loss carryforwards and the availability of the 20-year federal net operating loss carryforward period.

In addition, we also considered both positive and negative evidence associated with: (a) our accuracy in forecasting operating income and credit costs; and (b) the estimated timing of reversals of deferred deductible and deferred taxable items and the level of such net reversal amounts relative to earnings run rate assumptions in future periods.

Certain of the factors noted above support our expectation of generating future pre-tax book earnings in future periods. We believe this in turn should give rise to taxable income levels (exclusive of reversing temporary differences) that more likely than not would be sufficient to absorb the deferred tax assets.

As of September 30, 2011, there was $458,000 of unrecognized tax benefits relating to uncertain tax positions that would favorably impact the effective tax rate if recognized in future periods.

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Consolidated Statements of Financial Condition (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010
Assets
Cash and due from banks	$ 171,268		$ 112,772
Federal funds sold and other short-term investments	248,559		541,316
Loans held for sale	24,126		30,758
Securities available-for-sale, at fair value	1,872,587		1,881,786
Securities held-to-maturity, at amortized cost (fair value: $272.9 million - 2011)	273,200
Non-marketable equity investments	43,894		23,537
Loans - excluding covered assets, net of unearned fees	8,674,955	[1]	9,114,357
Allowance for loan losses	(200,041)	[1]	(222,821)	[1]
Loans, net of allowance for loan losses and unearned fees	8,474,914		8,891,536
Covered assets	318,973		397,210
Allowance for covered loan losses	(16,689)		(15,334)
Covered assets, net of allowance for covered loan losses	302,284		381,876
Other real estate owned, excluding covered assets	116,364		88,728
Premises, furniture, and equipment, net	39,069		40,975
Accrued interest receivable	32,686		33,854
Investment in bank owned life insurance	50,565		49,408
Goodwill	94,584		94,621
Other intangible assets	15,715		16,840
Capital market derivative assets	111,248		100,250
Other assets	148,798		177,364
Total assets	12,019,861		12,465,621
Liabilities
Noninterest-bearing	2,832,481		2,253,661
Interest-bearing	611,293		616,761
Savings deposits and money market accounts	4,392,697		4,821,823
Brokered deposits	902,002		1,450,827
Time deposits	1,370,190		1,392,357
Total deposits	10,108,663		10,535,429
Short-term borrowings	59,154		118,561
Long-term debt	379,793		414,793
Accrued interest payable	5,841		5,968
Capital markets derivative liabilities	113,968		102,018
Other liabilities	66,266		60,942
Total liabilities	10,733,685		11,237,711
Equity
Preferred stock	241,750	[2]
Common stock	3,043
Treasury stock	(20,680)		(20,054)
Additional paid-in capital	965,640		954,977
Accumulated deficit	(16,075)		(36,999)
Accumulated other comprehensive income, net of tax	46,051		20,078
Total stockholders' equity	1,286,176		1,227,877
Noncontrolling interests			33
Total equity	1,286,176		1,227,910
Total liabilities and equity	12,019,861		12,465,621
Series B Preferred Stock [Member]
Equity
Preferred stock	240,020		238,903
Common Stock [Member]
Equity
Common stock	67,684		67,436
Nonvoting Common Stock [Member]
Equity
Common stock	$ 3,536		$ 3,536

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

[2] The trust preferred securities accrue distributions at a rate equal to the interest rate and maturity identical to that of the related Debentures. The trust preferred securities will be redeemed upon maturity of the related Debentures.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2011

Income Taxes

Components Of Income Taxes

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Income (loss) before income taxes	$	21,075		$	12,807		$	49,666		$	(17,834	)
Income tax provision (benefit):
Current income tax provision	$	4,441		$	9,923		$	10,461		$	4,763
Deferred income tax provision (benefit)		3,152			(5,137	)		5,731			(12,419	)
Total income tax provision (benefit)	$	7,593		$	4,786		$	16,192		$	(7,656	)
Effective tax rate		36.0	%		37.4	%		32.6	%		-42.9	%

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Derivative Instruments (Derivatives Subject to Credit Risk Contingency Features) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Derivative Instruments
Fair value of derivatives with credit contingency features in a net liability position	$ 68,634	$ 66,649
Collateral posted for those transactions in a net liability position	72,845	70,334
Additional collateral required to be posted to derivative counterparties	85	347
Outstanding derivative instruments that would be immediately settled	$ 58,853	$ 52,354

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Estimated Fair Value Of Financial Instruments (Collateral-Dependent Impaired Loans) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Estimated Fair Value Of Financial Instruments
Carrying value	$ 353,343	$ 398,015
Specific reserves	(69,891)	(69,523)
Fair value	$ 283,452	$ 328,492

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Income Taxes (Narrative) (Details) (USD $)	1 Months Ended	9 Months Ended		1 Months Ended	12 Months Ended		1 Months Ended
	Jan. 31, 2011	Sep. 30, 2011	Dec. 31, 2010	Jan. 31, 2011 Maximum [Member]	Dec. 31, 2025 Maximum [Member]	Dec. 31, 2015 Maximum [Member]	Jan. 31, 2011 Minimum [Member]
Expiration date of operating loss carryforwards, years		20
Statutory corporate income tax rate				9.50%	7.30%	7.75%	7.30%
Personal Property replacement tax rate	2.50%
Tax years	2011 through 2014
Net deferred tax assets		$ 103,200,000	$ 126,300,000
Unrecognized tax benefits relating to uncertain tax positions		458,000
One-time adjustment revaluation of deferred tax asset		$ 2,800,000

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Loans (Schedule Of Loan Portfolio Aging Excluding Covered Assets) (Details) (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010	Sep. 30, 2010
Loan Portfolio Aging, Current	$ 8,346,888		$ 8,699,780
Loan Portfolio Aging, Total Accruing Loans	8,370,208		8,748,477
Loan Portfolio Aging, Nonaccrual	304,747		365,880
Loan Portfolio Aging, Total Loans	8,674,955	[1]	9,114,357	8,992,129	[1]
Delinquent [Member]
Loan Portfolio Aging, 30 - 59 Days Past Due	10,538		25,566
Loan Portfolio Aging, 60 - 89 Days Past Due	12,782		23,131
Delinquent [Member] | Commercial [Member]
Loan Portfolio Aging, 30 - 59 Days Past Due	3,529		1,024
Loan Portfolio Aging, 60 - 89 Days Past Due	101		759
Delinquent [Member] | Commercial Real Estate [Member]
Loan Portfolio Aging, 30 - 59 Days Past Due	5,884		10,264
Loan Portfolio Aging, 60 - 89 Days Past Due	8,801		12,346
Delinquent [Member] | Construction [Member]
Loan Portfolio Aging, 30 - 59 Days Past Due	342
Loan Portfolio Aging, 60 - 89 Days Past Due			1,895
Delinquent [Member] | Residential Real Estate [Member]
Loan Portfolio Aging, 30 - 59 Days Past Due	7		180
Loan Portfolio Aging, 60 - 89 Days Past Due	2,864		4,098
Delinquent [Member] | Personal [Member]
Loan Portfolio Aging, 30 - 59 Days Past Due	15		13,122
Loan Portfolio Aging, 60 - 89 Days Past Due	91		1,700
Delinquent [Member] | Home Equity [Member]
Loan Portfolio Aging, 30 - 59 Days Past Due	761		976
Loan Portfolio Aging, 60 - 89 Days Past Due	925		2,333
Commercial [Member]
Loan Portfolio Aging, Current	5,083,733		4,828,948
Loan Portfolio Aging, Total Accruing Loans	5,087,363		4,830,731
Loan Portfolio Aging, Nonaccrual	68,689		82,146
Loan Portfolio Aging, Total Loans	5,156,052		4,912,877
Commercial Real Estate [Member]
Loan Portfolio Aging, Current	2,300,497		2,632,835
Loan Portfolio Aging, Total Accruing Loans	2,315,182		2,655,445
Loan Portfolio Aging, Nonaccrual	160,788		202,724
Loan Portfolio Aging, Total Loans	2,475,970		2,858,169
Construction [Member]
Loan Portfolio Aging, Current	285,519		495,435
Loan Portfolio Aging, Total Accruing Loans	285,861		497,330
Loan Portfolio Aging, Nonaccrual	29,997		33,403
Loan Portfolio Aging, Total Loans	315,858		530,733
Residential Real Estate [Member]
Loan Portfolio Aging, Current	286,827		300,027
Loan Portfolio Aging, Total Accruing Loans	289,698		304,305
Loan Portfolio Aging, Nonaccrual	18,007		14,841
Loan Portfolio Aging, Total Loans	307,705		319,146
Personal [Member]
Loan Portfolio Aging, Current	218,524		256,860
Loan Portfolio Aging, Total Accruing Loans	218,630		271,682
Loan Portfolio Aging, Nonaccrual	13,826		24,571
Loan Portfolio Aging, Total Loans	232,456		296,253
Home Equity [Member]
Loan Portfolio Aging, Current	171,788		185,675
Loan Portfolio Aging, Total Accruing Loans	173,474		188,984
Loan Portfolio Aging, Nonaccrual	13,440		8,195
Loan Portfolio Aging, Total Loans	$ 186,914		$ 197,179

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

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Allowance For Loan Losses And Reserve For Unfunded Commitments (Allowance For Loan Losses And Recorded Investment In Loans) (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010		Dec. 31, 2010
Balance at beginning of period	$ 206,286	[1]	$ 232,411	[1]	$ 222,821	[1]	$ 221,688	[1]
Loans charged-off	(41,986)	[1]	(50,622)	[1]	(129,594)	[1]	(159,992)	[1]
Recoveries on loans previously charged-off	3,400	[1]	1,572	[1]	6,042	[1]	4,207	[1]
Net charge-offs	(38,586)	[1]	(49,050)	[1]	(123,552)	[1]	(155,785)	[1]
Provision for loan losses	32,341	[1]	40,031	[1]	100,772	[1]	157,489	[1]
Balance at the end of period	200,041	[1]	223,392	[1]	200,041	[1]	223,392	[1]
Ending balance, individually evaluated for impairment	72,191	[1],[2]	68,716	[1],[2]	72,191	[1],[2]	68,716	[1],[2]	70,971
Ending balance, collectively evaluated for impairment	127,850	[1]	154,676	[1]	127,850	[1]	154,676	[1]
Ending balance, individually evaluated for impairment	411,077	[1],[2]	431,815	[1],[2]	411,077	[1],[2]	431,815	[1],[2]	453,456
Ending balance, collectively evaluated for impairment	8,263,878	[1]	8,560,314	[1]	8,263,878	[1]	8,560,314	[1]
Total recorded investment in loans	8,674,955	[1]	8,992,129	[1]	8,674,955	[1]	8,992,129	[1]	9,114,357
Commercial [Member]
Balance at beginning of period	56,352	[1]			70,115	[1]
Loans charged-off	(5,039)	[1]			(19,751)	[1]
Recoveries on loans previously charged-off	2,278	[1]			3,450	[1]
Net charge-offs	(2,761)	[1]			(16,301)	[1]
Provision for loan losses	9,251	[1]			9,028	[1]
Balance at the end of period	62,842	[1]			62,842	[1]
Ending balance, individually evaluated for impairment	17,842	[1],[2]			17,842	[1],[2]
Ending balance, collectively evaluated for impairment	45,000	[1]			45,000	[1]
Ending balance, individually evaluated for impairment	118,842	[1],[2]			118,842	[1],[2]
Ending balance, collectively evaluated for impairment	5,037,210	[1]			5,037,210	[1]
Total recorded investment in loans	5,156,052	[1]			5,156,052	[1]
Commercial Real Estate [Member]
Balance at beginning of period	111,535	[1]			110,853	[1]
Loans charged-off	(29,920)	[1]			(84,731)	[1]
Recoveries on loans previously charged-off	969	[1]			1,752	[1]
Net charge-offs	(28,951)	[1]			(82,979)	[1]
Provision for loan losses	15,507	[1]			70,217	[1]
Balance at the end of period	98,091	[1]			98,091	[1]
Ending balance, individually evaluated for impairment	38,091	[1],[2]			38,091	[1],[2]
Ending balance, collectively evaluated for impairment	60,000	[1]			60,000	[1]
Ending balance, individually evaluated for impairment	201,871	[1],[2]			201,871	[1],[2]
Ending balance, collectively evaluated for impairment	2,274,099	[1]			2,274,099	[1]
Total recorded investment in loans	2,475,970	[1]			2,475,970	[1]
Construction [Member]
Balance at beginning of period	17,731	[1]			19,778	[1]
Loans charged-off	(1,419)	[1]			(9,756)	[1]
Recoveries on loans previously charged-off	29	[1]			182	[1]
Net charge-offs	(1,390)	[1]			(9,574)	[1]
Provision for loan losses	1,756	[1]			7,893	[1]
Balance at the end of period	18,097	[1]			18,097	[1]
Ending balance, individually evaluated for impairment	7,647	[1],[2]			7,647	[1],[2]
Ending balance, collectively evaluated for impairment	10,450	[1]			10,450	[1]
Ending balance, individually evaluated for impairment	29,997	[1],[2]			29,997	[1],[2]
Ending balance, collectively evaluated for impairment	285,861	[1]			285,861	[1]
Total recorded investment in loans	315,858	[1]			315,858	[1]
Residential Real Estate [Member]
Balance at beginning of period	7,065	[1]			5,321	[1]
Loans charged-off	(234)	[1]			(806)	[1]
Recoveries on loans previously charged-off	9	[1]			51	[1]
Net charge-offs	(225)	[1]			(755)	[1]
Provision for loan losses	276	[1]			2,550	[1]
Balance at the end of period	7,116	[1]			7,116	[1]
Ending balance, individually evaluated for impairment	1,316	[1],[2]			1,316	[1],[2]
Ending balance, collectively evaluated for impairment	5,800	[1]			5,800	[1]
Ending balance, individually evaluated for impairment	19,070	[1],[2]			19,070	[1],[2]
Ending balance, collectively evaluated for impairment	288,635	[1]			288,635	[1]
Total recorded investment in loans	307,705	[1]			307,705	[1]
Home Equity [Member]
Balance at beginning of period	6,626	[1]			5,764	[1]
Loans charged-off	(3,291)	[1]			(5,246)	[1]
Recoveries on loans previously charged-off	12	[1]			37	[1]
Net charge-offs	(3,279)	[1]			(5,209)	[1]
Provision for loan losses	2,498	[1]			5,290	[1]
Balance at the end of period	5,845	[1]			5,845	[1]
Ending balance, individually evaluated for impairment	2,345	[1],[2]			2,345	[1],[2]
Ending balance, collectively evaluated for impairment	3,500	[1]			3,500	[1]
Ending balance, individually evaluated for impairment	13,616	[1],[2]			13,616	[1],[2]
Ending balance, collectively evaluated for impairment	173,298	[1]			173,298	[1]
Total recorded investment in loans	186,914	[1]			186,914	[1]
Personal [Member]
Balance at beginning of period	6,977	[1]			10,990	[1]
Loans charged-off	(2,083)	[1]			(9,304)	[1]
Recoveries on loans previously charged-off	103	[1]			570	[1]
Net charge-offs	(1,980)	[1]			(8,734)	[1]
Provision for loan losses	3,053	[1]			5,794	[1]
Balance at the end of period	8,050	[1]			8,050	[1]
Ending balance, individually evaluated for impairment	4,950	[1],[2]			4,950	[1],[2]
Ending balance, collectively evaluated for impairment	3,100	[1]			3,100	[1]
Ending balance, individually evaluated for impairment	27,681	[1],[2]			27,681	[1],[2]
Ending balance, collectively evaluated for impairment	204,775	[1]			204,775	[1]
Total recorded investment in loans	$ 232,456	[1]			$ 232,456	[1]

[1] Refer to Note 6 for a detailed discussion regarding covered assets.

[2] Refer to Note 4 for additional information regarding impaired loans.

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Short-Term Borrowings (Summary Of Short-Term Borrowings) (Details) (USD $)					3 Months Ended
	Sep. 30, 2011 months		Dec. 31, 2010 months		Sep. 30, 2011 Federal Home Loan Bank Borrowings [Member]
Federal Home Loan Bank ("FHLB") advances	$ 59,154,000		$ 117,620,000
Federal Home Loan Bank ("FHLB") advances - Rate	2.60%		2.40%
Other			941,000
Other - Rate
Total short-term borrowings	59,154,000		118,561,000
Unused overnight federal funds availability	200,000,000	[1]	95,000,000	[1]
Borrowing capacity through the Federal Reserve Bank's ("FRB") discount window primary credit program	1,038,348,000	[2]	536,836,000	[2]
FHLB advances availability	427,842,000
Weighted average remaining maturity of FHLB advances at period-end (in months)	7.2		3.9
Additional borrowings					427,800,000
Long-term Federal Home Loan Bank Advances	$ 15,000,000

[1] Our total availability of overnight fed fund borrowings are not committed lines of credit and are dependent upon lender availability.

[2] Includes federal term auction facilities. Our borrowing capacity changes each quarter subject to available collateral and FRB discount factors.

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Securities (Securities Gains (Losses)) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Securities
Proceeds from sales	$ 219,589	$ 167,946	$ 280,082	$ 197,841
Gross realized gains	4,658	3,215	5,930	4,154
Gross realized losses	(288)	(186)	(523)	(1,281)
Net realized gains	4,370	3,029	5,407	2,873
Income tax provision on net realized gains	$ 1,740	$ 1,161	$ 2,150	$ 1,097

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Loans (Narrative) (Details) (USD $)			9 Months Ended								9 Months Ended
	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2011 Pass [Member] Maximum [Member]	Sep. 30, 2011 Pass [Member] Minimum [Member]	Sep. 30, 2011 Loan Rated Five [Member]	Sep. 30, 2011 Special Mention [Member]	Sep. 30, 2011 Potential Problem [Member]	Sep. 30, 2011 Nonperforming Financing Receivable [Member] Maximum [Member]	Sep. 30, 2011 Nonperforming Financing Receivable [Member] Minimum [Member]	Sep. 30, 2011 Doubtful [Member]	Sep. 30, 2011 Maximum [Member]	Sep. 30, 2011 Minimum [Member]
Loans and leases receivable, impaired, commitment to lend	$ 18,200,000	$ 3,700,000
Minimum limit for impaired loans to be evaluated individually	$ 500,000
Debt instrument, credit rating						6	7	8	7	6
Loans receivable risk rating			5	1	5						8	1

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Loans (Additions To Troubled Debt Restructurings During The Period) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2011		Sep. 30, 2011
Number of Borrowers	5	[1]	20	[1]
Accruing Interest [Member]
Number of Borrowers	4		40
Pre-Modification Outstanding Recorded Investment	$ 8,023	[2]	$ 91,591	[2]
Post-Modification Outstanding Recorded Investment	8,634	[2]	83,983	[2]
Change in balance due to principal paydown at time of modification	103	[2]	103	[2]
Accruing Interest [Member] | Commercial [Member]
Number of Borrowers	3		21
Pre-Modification Outstanding Recorded Investment	7,531	[2]	73,519	[2]
Post-Modification Outstanding Recorded Investment	8,142	[2]	70,557	[2]
Accruing Interest [Member] | Commercial [Member] | Extension Of Maturity Date [Member]
Number of Borrowers	2	[3]	15	[3]
Pre-Modification Outstanding Recorded Investment	294	[2],[3]	45,280	[2],[3]
Post-Modification Outstanding Recorded Investment	191	[2],[3]	45,177	[2],[3]
Accruing Interest [Member] | Commercial [Member] | Other Concession [Member]
Number of Borrowers	1	[4]	5	[4]
Pre-Modification Outstanding Recorded Investment	7,237	[2],[4]	19,402	[2],[4]
Post-Modification Outstanding Recorded Investment	7,951	[2],[4]	20,115	[2],[4]
Accruing Interest [Member] | Commercial [Member] | Multiple Note Structuring [Member]
Number of Borrowers			1
Pre-Modification Outstanding Recorded Investment			8,837	[2]
Post-Modification Outstanding Recorded Investment			5,265	[2]
Accruing Interest [Member] | Commercial Real Estate [Member]
Number of Borrowers	1		13
Pre-Modification Outstanding Recorded Investment	492	[2]	16,978	[2]
Post-Modification Outstanding Recorded Investment	492	[2]	12,332	[2]
Accruing Interest [Member] | Commercial Real Estate [Member] | Extension Of Maturity Date [Member]
Number of Borrowers	1	[3]	11	[3]
Pre-Modification Outstanding Recorded Investment	492	[2],[3]	6,988	[2],[3]
Post-Modification Outstanding Recorded Investment	492	[2],[3]	6,988	[2],[3]
Accruing Interest [Member] | Commercial Real Estate [Member] | Multiple Note Structuring [Member]
Number of Borrowers			2
Pre-Modification Outstanding Recorded Investment			9,990	[2]
Post-Modification Outstanding Recorded Investment			5,344	[2]
Accruing Interest [Member] | Residential Real Estate [Member] | Extension Of Maturity Date [Member]
Number of Borrowers			2	[3]
Pre-Modification Outstanding Recorded Investment			374	[2],[3]
Post-Modification Outstanding Recorded Investment			374	[2],[3]
Accruing Interest [Member] | Home Equity [Member] | Extension Of Maturity Date [Member]
Number of Borrowers			2	[3]
Pre-Modification Outstanding Recorded Investment			203	[2],[3]
Post-Modification Outstanding Recorded Investment			203	[2],[3]
Accruing Interest [Member] | Personal [Member]
Number of Borrowers			2
Pre-Modification Outstanding Recorded Investment			517	[2]
Post-Modification Outstanding Recorded Investment			517	[2]
Accruing Interest [Member] | Personal [Member] | Extension Of Maturity Date [Member]
Number of Borrowers			1	[3]
Pre-Modification Outstanding Recorded Investment			265	[2],[3]
Post-Modification Outstanding Recorded Investment			265	[2],[3]
Accruing Interest [Member] | Personal [Member] | Other Concession [Member]
Number of Borrowers			1	[4]
Pre-Modification Outstanding Recorded Investment			252	[2],[4]
Post-Modification Outstanding Recorded Investment			252	[2],[4]
Nonaccrual [Member]
Number of Borrowers	7		23
Pre-Modification Outstanding Recorded Investment	33,303	[2]	46,857	[2]
Post-Modification Outstanding Recorded Investment	32,014	[2]	45,554	[2]
Change in balance due to principal paydown at time of modification	1,489	[2]	1,504	[2]
Nonaccrual [Member] | Commercial [Member]
Number of Borrowers	4		6
Pre-Modification Outstanding Recorded Investment	30,251	[2]	30,498	[2]
Post-Modification Outstanding Recorded Investment	28,962	[2]	29,209	[2]
Nonaccrual [Member] | Commercial [Member] | Extension Of Maturity Date [Member]
Number of Borrowers	3	[3]	4	[3]
Pre-Modification Outstanding Recorded Investment	30,251	[2],[3]	30,370	[2],[3]
Post-Modification Outstanding Recorded Investment	28,762	[2],[3]	28,881	[2],[3]
Nonaccrual [Member] | Commercial [Member] | Other Concession [Member]
Number of Borrowers	1	[4]	2	[4]
Pre-Modification Outstanding Recorded Investment			128	[2],[4]
Post-Modification Outstanding Recorded Investment	200	[2],[4]	328	[2],[4]
Nonaccrual [Member] | Commercial Real Estate [Member]
Number of Borrowers	2		7
Pre-Modification Outstanding Recorded Investment	2,690	[2]	12,914	[2]
Post-Modification Outstanding Recorded Investment	2,690	[2]	12,914	[2]
Nonaccrual [Member] | Commercial Real Estate [Member] | Extension Of Maturity Date [Member]
Number of Borrowers	2	[3]	5	[3]
Pre-Modification Outstanding Recorded Investment	2,690	[2],[3]	6,706	[2],[3]
Post-Modification Outstanding Recorded Investment	2,690	[2],[3]	6,706	[2],[3]
Nonaccrual [Member] | Commercial Real Estate [Member] | Other Concession [Member]
Number of Borrowers			2	[4]
Pre-Modification Outstanding Recorded Investment			6,208	[2],[4]
Post-Modification Outstanding Recorded Investment			6,208	[2],[4]
Nonaccrual [Member] | Construction [Member] | Extension Of Maturity Date [Member]
Number of Borrowers			1	[3]
Pre-Modification Outstanding Recorded Investment			179	[2],[3]
Post-Modification Outstanding Recorded Investment			179	[2],[3]
Nonaccrual [Member] | Residential Real Estate [Member]
Number of Borrowers			4
Pre-Modification Outstanding Recorded Investment			2,142	[2]
Post-Modification Outstanding Recorded Investment			2,142	[2]
Nonaccrual [Member] | Residential Real Estate [Member] | Extension Of Maturity Date [Member]
Number of Borrowers			3	[3]
Pre-Modification Outstanding Recorded Investment			1,446	[2],[3]
Post-Modification Outstanding Recorded Investment			1,446	[2],[3]
Nonaccrual [Member] | Residential Real Estate [Member] | Other Concession [Member]
Number of Borrowers			1	[4]
Pre-Modification Outstanding Recorded Investment			696	[2],[4]
Post-Modification Outstanding Recorded Investment			696	[2],[4]
Nonaccrual [Member] | Home Equity [Member]
Number of Borrowers			2
Pre-Modification Outstanding Recorded Investment			637	[2]
Post-Modification Outstanding Recorded Investment			637	[2]
Nonaccrual [Member] | Home Equity [Member] | Extension Of Maturity Date [Member]
Number of Borrowers			1	[3]
Pre-Modification Outstanding Recorded Investment			147	[2],[3]
Post-Modification Outstanding Recorded Investment			147	[2],[3]
Nonaccrual [Member] | Home Equity [Member] | Other Concession [Member]
Number of Borrowers			1	[4]
Pre-Modification Outstanding Recorded Investment			490	[2],[4]
Post-Modification Outstanding Recorded Investment			490	[2],[4]
Nonaccrual [Member] | Personal [Member] | Extension Of Maturity Date [Member]
Number of Borrowers	1	[3]	3	[3]
Pre-Modification Outstanding Recorded Investment	362	[2],[3]	487	[2],[3]
Post-Modification Outstanding Recorded Investment	$ 362	[2],[3]	$ 473	[2],[3]

[1] Represents amounts as of the balance sheet date from the quarter the default was first reported.

[2] Represents amounts as of the date immediately prior to and immediately after the modification is effective.

[3] Extension of maturity date also includes loans renewed at existing rate of interest which is considered a below market rate for that particular loan's risk profile.

[4] Other concessions primarily include interest rate reductions, loan increases, and deferral of principal.

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2011

Derivative Instruments

Composition Of Derivative Instruments And Fair Value

Composition of Derivative Instruments

and Fair Value

(Amounts in thousands)

	Asset Derivatives										Liability Derivatives
	September 30, 2011					December 31, 2010					September 30, 2011					December 31, 2010
	Notional/					Notional/					Notional/					Notional/
	Contract		Fair			Contract		Fair			Contract		Fair			Contract		Fair
	Amount(1)		Value			Amount(1)		Value			Amount(1)		Value			Amount(1)		Value
Derivatives designated as hedging instruments(2):
Interest rate contracts	$	75,000	$	1,061		$	—	$	—		$	25,000	$	55		$	—	$	—
Less: netting adjustments(3)				(55	)				—					(55	)				—
Total			$	1,006				$	—				$	—				$	—
Derivatives not designated as hedging instruments:
Capital markets group derivatives(4):
Interest rate contracts	$	2,954,304	$	113,417		$	3,028,827	$	102,386		$	2,954,304	$	116,844		$	3,028,827	$	104,799
Foreign exchange contracts		155,262		7,300			109,956		4,069			155,262		6,600			109,956		3,416
Credit contracts(1)		43,249		12			4,523		1			62,698		15			68,945		9
Subtotal				120,729					106,456					123,459					108,224
Less: netting adjustments(3)				(9,481	)				(6,206	)				(9,491	)				(6,206	)
Total			$	111,248				$	100,250				$	113,968				$	102,018
Other derivatives(2):
Foreign exchange contracts	$	3,935	$	156		$	4,425	$	29		$	—	$	—		$	—	$	—
Mortgage banking derivatives				229					221					245					280
Subtotal				385					250					245					280
Total derivatives not designated as hedging instruments			$	111,633				$	100,500				$	114,213				$	102,298
Grand total derivatives			$	112,639				$	100,500				$	114,213				$	102,298

⁽¹⁾  The remaining average notional amounts are shown for credit contracts.

⁽²⁾  Derivative assets and liabilities designated as hedging instruments and other derivative assets and liabilities not designated as hedging instruments are reported in other assets and other liabilities on the Consolidated Statement of Financial Condition, respectively.

⁽³⁾  Represents netting of derivative asset and liability balances, and related cash collateral, with the same counterparty subject to master netting agreements. Authoritative accounting guidance permits the netting of derivative receivables and payables when a legally enforceable master netting agreement exists between the Company and a derivative counterparty. A master netting agreement is an agreement between two counterparties who have multiple derivative contracts with each other that provide for the net settlement of contracts through a single payment, in a single currency, in the event of default on or termination of any one contract.

⁽⁴⁾  Capital markets group asset and liability derivatives are reported separately on the Consolidated Statement of Financial Condition.

Derivatives Subject To Credit Risk Contingency Features

	September 30, 2011		December 31, 2010
Fair value of derivatives with credit contingency features in a net liability position	$	68,634	$	66,649
Collateral posted for those transactions in a net liability position	$	72,845	$	70,334
If credit risk contingency features were triggered:
Additional collateral required to be posted to derivative counterparties	$	85	$	347
Outstanding derivative instruments that would be immediately settled	$	58,853	$	52,354

Change In Accumulated Other Comprehensive Income Related To Interest Rate Swaps Designated As Cash Flow Hedge

	September 30, 2011
	Quarter Ended			Nine Months Ended
Unrealized gain at beginning of period	$	—		$	—
Amount of gain recognized in AOCI		1,162			1,162
Amount reclassified from AOCI to interest income on loans		(156	)		(156	)
Unrealized gain at end of period	$	1,006		$	1,006

Gain (Loss) Recorded In Consolidated Statements Of Income And Accumulated Other Comprehensive Income Related To Interest Rate Swaps Designated As Cash Flow Hedge

	September 30, 2011
	Quarter Ended		Nine Months Ended
Amount of gain, net of tax, recognized in AOCI (effective portion)	$	700	$	700
Amount of gain, pre-tax, reclassified from AOCI to interest income on loans		156		156
Amount of gain, pre-tax, recognized in other non-interest income (ineffective portion)		—		—

Risk Participation Agreements

	September 30, 2011			December 31, 2010
Fair value of written RPAs	$	(15	)	$	(9	)
Range of remaining terms to maturity (in years)		Less than 1 to 4			Less than 1 to 4
Range of assigned internal risk ratings		3 to 5			3 to 5
Maximum potential amount of future undiscounted payments	$	1,914		$	2,413
Percent of maximum potential amount of future undiscounted payments covered by proceeds from liquidation of pledged collateral		66	%		80	%

Gain (Loss) Recognized On Derivative Instruments Not Designated In Hedging Relationship

	Quarters Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011		2010
Gain on derivatives recognized in capital markets products income:
Interest rate contracts	$	3,577		$	1,924		$	9,372	$	4,075
Foreign exchange contracts		1,685			1,134			4,220		3,337
Credit contracts		248			46			278		83
Total capital markets group derivatives		5,510			3,104			13,870		7,495
Gain (loss) on other derivatives recognized in other income, service charges and fees:
Foreign exchange derivatives		42			(233	)		128		(6	)
Mortgage banking derivatives		(80	)		36			48		(3	)
Total other derivatives		(38	)		(197	)		176		(9	)
Total derivatives	$	5,472		$	2,907		$	14,046	$	7,486