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

As of June 30, 2012, 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 trust preferred securities (“Trust Preferred Securities”) to third-party investors and investing the proceeds from the sale of the Trust Preferred Securities solely in a series of junior subordinated debentures of the Company (“Debentures”). The Debentures held by the trusts, which in aggregate total $244.8 million, are the sole assets of each respective 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 the Trust Preferred Securities including on liquidation or redemption of the Trust Preferred Securities, but only to the extent of funds held by the respective trust. We have the right to redeem the Debentures held by PrivateBancorp Statutory Trust IV (the “Series IV Debentures”) in whole or in part, on or after June 13, 2013, subject to certain considerations. We may also have the right to redeem the Series IV Debentures prior to June 13, 2013, if future legislative or regulatory changes impact our capital treatment of the related Trust Preferred Securities. We currently have the right to redeem, in whole or in part, all the other Debentures, in each case at a redemption price specified in the indentures plus any accrued but unpaid interest to the redemption date. The repayment, redemption or repurchase of the Debentures would result in a corresponding repayment, redemption or repurchase of the related series of Trust Preferred Securities.

In connection with the issuance in 2008 of the Series IV Debentures, which rank junior to the other Debentures, we entered into a replacement capital covenant that relates to redemption of the Series IV Debentures and the related Trust Preferred Securities. Under the replacement capital covenant, we committed, for the benefit of certain debt holders, that we would not repay, redeem or repurchase the Series IV Debentures or the related Trust Preferred Securities prior to June 2048 unless we have (1) obtained regulatory approval, and (2) raised certain amounts of qualifying equity or equity-like replacement capital within the 180 day period prior to the date of repayment, redemption or repurchase. The replacement capital covenant benefits holders of our “covered debt” as specified under the terms of the replacement capital covenant. Currently, under the replacement capital covenant, the “covered debt” is the Debentures held by PrivateBancorp Statutory Trust II. We may amend or terminate the replacement capital covenant in certain circumstances without the consent of the holders of the covered debt.

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

(Dollars in thousands)


			Common		Trust Preferred					Earliest				Principal Amount of Debentures
	Issuance Date		Securities Issued		Securities Issued ⁽¹⁾		Coupon Rate ⁽²⁾			Redemption Date (on or after) ⁽³⁾		Maturity		June 30, 2012		December 31, 2011
Bloomfield Hills Statutory Trust I		May 2004	$	248	$	8,000		3.12	%		Jun. 17, 2009		Jun. 2034	$	8,248	$	8,248

PrivateBancorp Statutory Trust II		Jun. 2005		1,547		50,000		2.18	%		Sep. 15, 2010		Sep. 2035		51,547		51,547

PrivateBancorp Statutory Trust III		Dec. 2005		1,238		40,000		1.97	%		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 on and have a 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 June 30, 2012. The coupon rate for the Bloomfield Hills Statutory Trust I is a variable rate and is based on six-month LIBOR plus 2.65%. The coupon rates for the PrivateBancorp Statutory Trusts II and III are at a variable rate based on six-month LIBOR plus 1.71% for Trust II and six-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 ten years in the case of the Debentures held by Trust IV, and five years in the case of all other Debentures, without causing an event of default under the related indenture, 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 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 in the case of Trust IV earlier at our discretion if certain events occur. It is anticipated that adoption of currently proposed capital rules would constitute a capital treatment event that would allow us to redeem early if certain conditions are satisfied, including those set forth in the replacement capital covenant to the extent then applicable. In addition, in any event, we may redeem only after we have obtained Federal Reserve approval, if then required under applicable guidelines or regulations.