UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
(Mark One):
| x | ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2010
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 000-25887
PRIVATEBANCORP, INC.
SAVINGS, RETIREMENT AND EMPLOYEE STOCK OWNERSHIP PLAN
(Full title of the plan)
PrivateBancorp, Inc.
120 S. LaSalle Street
Chicago, Illinois 60603
(Name of the issuer of the securities held pursuant to the plan and
the address of its principal executive office)
REQUIRED INFORMATION
| | |
| Item 4. | | The PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan (the “Plan”) is subject to ERISA and files Plan financial statements and schedules prepared in accordance with the financial requirements of ERISA. |
| |
| | Financial Statements. Listed below are the financial statements and schedules filed as a part of the annual report. |
| |
| | (a) Statements of Net Assets Available for Benefits as of December 31, 2010 and 2009, and the related Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2010 and 2009. |
| |
| | These Statements of Net Assets Available for Benefits as of December 31, 2010 and 2009 and the related Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2010 and 2009, respectively, included herein, are hereby incorporated by reference into the Registration Statements on Form S-8 filed with the Securities and Exchange Commission by the PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan on April 14, 2010 (File No. 333-166070). |
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TABLE OF CONTENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KSOP Committee
PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan
Chicago, Illinois
We have audited the accompanying statements of net assets available for benefits of PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan (the “Plan”) as of December 31, 2010 and 2009, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2010 and 2009, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are presented fairly, in all material respects in relation to the basic financial statements taken as a whole.
/s/ Clifton Gunderson
Oak Brook, Illinois
June 27, 2011
1
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2010 and 2009
| | | | | | | | |
| | | 2010 | | | 2009 | |
ASSETS | | | | | | | | |
Participant-directed investments, at fair value: | | | | | | | | |
Principal Life Insurance Company pooled-separate accounts | | $ | 15,081,263 | | | $ | 14,063,191 | |
American Funds registered investment companies | | | 7,580,329 | | | | 4,112,850 | |
Dodge & Cox registered investment company | | | 4,114,059 | | | | 3,458,697 | |
Pioneer registered investment company | | | — | | | | 758,326 | |
Vanguard Group registered investment company | | | 1,924,555 | | | | 2,007,777 | |
PIMCO registered investment company | | | 2,340,705 | | | | 1,819,739 | |
Buffalo Funds registered investment company | | | 625,110 | | | | 548,666 | |
COLUMBIA registered investment company | | | 748,025 | | | | 546,508 | |
Janus International Holding, LLC registered investment company | | | 609,574 | | | | 456,173 | |
Dimensional Funds registered investment company | | | 2,058,556 | | | | 548,177 | |
Water Island Capital, LLC registered investment company | | | 9,603 | | | | — | |
Franklin Templeton registered investment company | | | 79,352 | | | | — | |
PrivateBancorp, Inc. common stock | | | 6,681,375 | | | | 3,838,672 | |
Guaranteed interest account, Principal Life Insurance Company | | | 3,352 | | | | 18,913 | |
| | | | | | | | |
| | |
Total participant-directed investments, at fair value | | | 41,855,858 | | | | 32,177,689 | |
| | | | | | | | |
| | |
Receivables: | | | | | | | | |
Notes receivable from participants | | | 920,426 | | | | 704,699 | |
Participant contributions | | | 1,014 | | | | — | |
Employer contributions | | | 1,976 | | | | — | |
| | | | | | | | |
| | |
Total receivables | | | 923,416 | | | | 704,699 | |
| | | | | | | | |
| | |
NET ASSETS AVAILABLE FOR BENEFITS | | $ | 42,779,274 | | | $ | 32,882,388 | |
| | | | | | | | |
The accompanying notes are an integral part of the financial statements.
2
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years Ended December 31, 2010 and 2009
| | | | | | | | |
| | | 2010 | | | 2009 | |
ADDITIONS TO NET ASSETS ATTRIBUTED TO | | | | | | | | |
Contributions from employer | | $ | 1,796,425 | | | $ | 1,618,487 | |
Contributions from participants | | | 6,417,387 | | | | 5,852,125 | |
Rollovers | | | 1,379,381 | | | | 3,162,984 | |
Interest income from notes receivable from participants | | | 39,002 | | | | 35,814 | |
Interest income from guaranteed investment contract | | | 394 | | | | 976 | |
Dividend income | | | 319,103 | | | | 226,226 | |
Net realized and unrealized gains (losses) of PrivateBancorp, Inc. stock | | | 2,478,239 | | | | (5,442,889 | ) |
Net realized and unrealized gains in fair value of registered investment companies | | | 1,877,347 | | | | 2,314,666 | |
Net realized and unrealized gains in fair value of pooled-separate accounts | | | 1,894,397 | | | | 2,412,667 | |
Miscellaneous income | | | 2,242 | | | | 8 | |
| | | | | | | | |
| | |
Total additions | | | 16,203,917 | | | | 10,181,064 | |
| | | | | | | | |
| | |
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO | | | | | | | | |
Withdrawals by participants | | | (6,150,475 | ) | | | (3,863,713 | ) |
Administrative expenses | | | (156,556 | ) | | | (98,385 | ) |
| | | | | | | | |
| | |
Total deductions | | | (6,307,031 | ) | | | (3,962,098 | ) |
| | | | | | | | |
| | |
Net increase | | | 9,896,886 | | | | 6,218,966 | |
| | |
NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR | | | 32,882,388 | | | | 26,663,422 | |
| | | | | | | | |
| | |
NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR | | $ | 42,779,274 | | | $ | 32,882,388 | |
| | | | | | | | |
The accompanying notes are an integral part of the financial statements.
3
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
The following description of the PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General - The Plan is a defined contribution plan covering employees of PrivateBancorp, Inc. and its subsidiaries (PrivateBancorp Inc. and its subsidiaries, the “Company”). At December 31, 2010, the Company’s subsidiaries included The PrivateBank and Trust Company, Lodestar Investment Counsel, LLC, The PrivateBank Securities, LLC, The PrivateBank Mortgage Company, and The PrivateBank Mortgage Company, LLC. In the second quarter of 2011, The PrivateBank Securities, LLC, The PrivateBank Mortgage Company and The PrivateBank Mortgage Company, LLC were liquidated and dissolved. The dissolutions had no impact to the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
During the fourth quarter of 2010, The PrivateBank, N.A. (in Wisconsin) was merged into The PrivateBank and Trust Company. The merger had no impact on the Plan as The PrivateBank, N.A. employees were eligible participants in the Plan. In 2010, one Principal Life Insurance Company pooled separate account was closed and one mutual fund was closed. There were five additions to the funds available for investment.
During 2009, The PrivateBank St. Louis and The PrivateBank Michigan were merged into The PrivateBank and Trust Company. In addition, The PrivateBank and Trust Company participated in an FDIC assisted transaction involving the former Founders Bank (see Note 6). In 2009, there were changes to the existing funds available for investment in the Plan. Three Principal Life Insurance Company pooled separate accounts were closed and replaced with mutual funds and one mutual fund was added to the investment options for Plan participants.
Contributions - Participants may contribute up to the maximum percentage of compensation, as defined in the Plan document and dollar amounts permissible by the Internal Revenue Code (IRC). Company-paid cash bonuses are included in the definition of compensation. Participants may also transfer amounts representing distributions from other qualified defined benefit or contribution plans. Company matching contributions are discretionary and based on a percentage of employee contributions. The Company may make qualified matching contributions, corrective non-elective contributions and an additional discretionary contribution, all based on formulas determined by the Company.
Participant accounts - Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution and (b) investment earnings and losses and is charged with participant withdrawals or distributions and administrative fees and expenses. Allocations are based on employee contributions, eligible compensation or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
4
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (1) | Description of plan (continued) |
Eligibility - An employee is eligible to participate in the Plan after completing one hour of service, as defined. Participants who are at least 18 years old are eligible for the Company’s contributions after one year of employment.
Vesting - Participants are immediately vested in their contributions and the Company’s qualified matching contributions and corrective non-elective contributions plus actual earnings thereon. Vesting in the Company’s matching and discretionary contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 20% vested after one year of credited service and vest 20% per year thereafter, until becoming fully vested after five years of credited service.
Investment options - Currently, participants are able to direct employee contributions into pooled-separate accounts (PSAs) (maintained by an insurance carrier), mutual funds, a guaranteed investment contract and PrivateBancorp, Inc. common stock. Participants are able to transfer funds among all investment options.
Notes receivable from participants - Participants may borrow from their own account a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan repayment terms are determined by the Company. The loans are secured by the balance in the participant’s account and bear interest at the prime rate (3.25% as of December 31, 2010 and 2009) in effect on the loan acquisition date plus 100 basis points. Interest rates ranged from 4.25% to 9.25% on all participant loans outstanding as of December 31, 2010. Principal and interest are paid ratably through payroll deductions.
Payment of benefits - Participants are eligible to receive the vested portion of their plan account upon retirement, termination of employment, disability or death. Payment will generally be made in a lump-sum. Hardship withdrawals are also available to participants who demonstrate financial need in certain circumstances, as defined.
Forfeited accounts - As of December 31, 2010 and 2009, forfeited nonvested accounts totaled $39,816 and $24,898, respectively. These accounts are used to reduce future Company’s contributions. During the plan years ended December 31, 2010 and 2009, forfeitures in the amount of $70,057 and $33,075, respectively, were used to reduce the Company’s contributions.
| (2) | Summary of significant accounting policies |
Basis of accounting - The accompanying financial statements are prepared on the accrual basis of accounting.
5
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (2) | Summary of significant accounting policies (continued) |
Use of estimates - The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.
Investment valuation and income recognition - The Plan is invested in PSAs, PrivateBancorp, Inc. common stock, a guaranteed investment contract, and mutual funds, which are stated at fair value using methodologies described in Note 5.
Security transactions are accounted for on the date securities are purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Interest income is recognized when earned. Net realized and unrealized gains and losses are recorded in the accompanying financial statements as net realized and unrealized gains (losses) in fair value of investments. Contributions are recognized based on payroll dates and accrued if applicable.
Notes receivable from participants - Notes receivable from participants are uncollateralized obligations and are stated at the amount of unpaid principal balance plus any accrued but unpaid interest. Payments of notes receivable from participants are applied to the specific accounts comprising the balance. Delinquent participant loans are reclassified as distributions based upon terms of the Plan document.
There is no allowance for uncollectible notes receivable from participants recorded at December 31, 2010 and 2009 since all balances are deemed collectible.
Change in accounting principles - The Plan adopted a new accounting standard, Reporting Loans to Participants by Defined Contribution Pension Plans, which provides clarification of how loans to participants should be classified and measured by defined contribution pension benefit plans. This guidance requires that loans to participants be reported as notes receivable from participants in the Statements of Net Assets Available for Benefits and be measured at their unpaid principal balance plus any accrued but unpaid interest. The Plan adopted this standard in its December 31, 2010 financial statements and has reclassified loans from participants of $920,426 and $704,699 from participant-directed investments to notes receivable from participants as of December 31, 2010 and 2009, respectively. The Plan also reclassified interest income from participant loans of $39,002 and $35,814 from investment income to interest income from notes receivable from participants for the years ended December 31, 2010 and 2009, respectively. Net assets for the Plan were not affected by the adoption of this standard.
Payment of benefits - Benefits are recorded when paid.
6
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (2) | Summary of significant accounting policies (continued) |
Administrative expenses - The administrative expenses of the Plan are paid by the Plan sponsor (PrivateBancorp, Inc.) and by the Plan participants. The expenses that are paid by the Plan sponsor are not included in the Statements of Changes in Net Assets Available for Benefits.
The following table presents the investments that represent 5% or more of the Plan’s net assets as of December 31, 2010 and 2009.
| | | | | | | | |
| | | 2010 | | | 2009 | |
Pooled-separate accounts Contract #6-11219: | | | | | | | | |
Principal Money Market Sep Acct | | $ | 2,539,888 | | | $ | 2,793,920 | |
Principal Lg Cp Stk Idx | | | * | | | | 1,813,900 | |
Principal Ptr International | | | * | | | | 2,019,290 | |
Principal Lifetime 2020 | | | 2,156,639 | | | | * | |
| | |
Common stock: PrivateBancorp, Inc. | | | 6,681,375 | | | | 3,838,672 | |
| | |
Registered investment companies: | | | | | | | | |
American Funds Growth Fund of America R5 | | | 3,375,146 | | | | 2,556,534 | |
American Funds Euro Pacific Growth Fund R5 | | | 2,394,404 | | | | * | |
Dodge & Cox Stock Fund | | | 4,114,059 | | | | 3,458,697 | |
Vanguard St Bond Index Inv. Fund | | | * | | | | 2,007,777 | |
PIMCO Total Return Instl Fund | | | 2,340,705 | | | | 1,819,739 | |
| | |
* Below 5% threshold in the Plan. | | | | | | | | |
The amount of appreciation (depreciation) of the value of the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) for the years ended December 31, 2010 and 2009, are as follows:
| | | | | | | | |
| | | 2010 | | | 2009 | |
| | |
Mutual funds | | $ | 1,877,347 | | | $ | 2,314,666 | |
Pooled-separate accounts | | | 1,894,397 | | | | 2,412,667 | |
Common stock | | | 2,478,239 | | | | (5,442,889 | ) |
| | | | | | | | |
| | |
Total | | $ | 6,249,983 | | | $ | (715,556 | ) |
| | | | | | | | |
Interest and dividends realized on the Plan’s investments for the years ended December 31, 2010 and 2009, were $319,497 and $227,202, respectively.
7
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (4) | Related party transactions |
Substantially all assets of the Plan are held in trust by Delaware Charter Guarantee & Trust Company, a Delaware corporation conducting business under the trade name of Principal Trust Company, Trustee for the Plan. Administrative fees in the amounts of $24,975 and $24,664 were paid to Principal Financial Group during the years ended December 31, 2010 and 2009, respectively, by PrivateBancorp, Inc. These transactions qualify as party-in-interest transactions.
| (5) | Fair value measurements |
The Plan measures, monitors and discloses its assets on a fair value basis in accordance with Financial Accounting Standards Board Accounting Standards Codification 820 (FASB ASC 820) Fair Value Measurements and Disclosures. FASB ASC 820 establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
| | | | |
| Level 1: | | Inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. |
| |
| Level 2: | | Inputs to the valuation methodology include: |
| | |
| | • • • • | | Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in inactive markets; Inputs other than quoted prices that are observable for the asset or liability; Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| |
| Level 3: | | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value:
PrivateBancorp, Inc. common stock - Valued at the closing price reported on the active market on which the security is traded.
8
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (5) | Fair value measurements (continued) |
Mutual funds - Valued at the net asset value, based on quoted market prices in active markets, of shares held by the Plan at year end.
Pooled-separate accounts - Valued at the net asset value, based on quoted market prices in active markets, of shares of the underlying assets held by the Plan at year end. The pooled-separate accounts do not have finite lives, unfunded commitments relating to these types of investments, or significant restrictions on redemptions.
Guaranteed interest account - Guaranteed investment contract valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the creditworthiness of the issuer.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. Furthermore, while the Plan’s administrator (the Plan committee) believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Following is a description of the nature and risks of the categories of assets by major security type.
Small/mid U.S. equity: This asset class is generally composed of investment options that invest in stocks, or shares of ownership in small to medium-sized U.S. companies. These investment options typically carry more risk than larger U.S. equity investment options but have the potential for higher returns. They may be an appropriate choice for long-term investors who are seeking the potential for growth.
Large U.S. equity: This asset class is generally composed of investment options that invest in stocks, or shares of ownership in large, well-established, U.S. companies. These investment options typically carry more risk than fixed income investment options but have the potential for higher returns over longer time periods. They may be an appropriate choice for long-term investors who are seeking the potential for growth.
Balanced/asset allocation: This asset class is generally composed of a combination of fixed income and equity investment options. These investment options may include balanced, asset allocation, target-date, and target-risk investment options. They are typically lower risk than investment options that invest solely in equities.
9
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (5) | Fair value measurements (continued) |
Short-term fixed income: This asset class is generally composed of short-term, fixed-income investment options that are largely liquid and are designed to not lose much value. These investment options may include stable value, money market, short-term bond, and guaranteed interest accounts. They are considered to be among the least risky forms of investment options. However, they typically have a lower rate of return than equities or longer-term fixed income investment options over long periods of time.
International equity: This asset class is composed of investment options that invest in stocks, or shares of ownership in companies with their principal place of business or office outside the United States. These investment options often carry more risk than U.S. equity investment options but may have the potential for higher returns. They may be an appropriate choice for long-term investors who are seeking the potential for growth.
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at the fair value as of December 31, 2010:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
Financial institution common stock | | $ | 6,681,375 | | | $ | — | | | $ | — | | | $ | 6,681,375 | |
Mutual funds: | | | | | | | | | | | | | | | | |
Small/mid U.S. equity | | | 1,982,709 | | | | — | | | | — | | | | 1,982,709 | |
Fixed income | | | 2,420,057 | | | | — | | | | — | | | | 2,420,057 | |
Large U.S. equity | | | 7,489,205 | | | | — | | | | — | | | | 7,489,205 | |
Balanced/asset allocation | | | 1,810,779 | | | | — | | | | — | | | | 1,810,779 | |
Short-term fixed income | | | 1,859,357 | | | | — | | | | — | | | | 1,859,357 | |
International equity | | | 4,518,158 | | | | — | | | | — | | | | 4,518,158 | |
Other, market neutral | | | 9,603 | | | | — | | | | — | | | | 9,603 | |
Pooled-separate accounts: | | | | | | | | | | | | | | | | |
Small/mid U.S. equity | | | — | | | | 4,126,423 | | | | — | | | | 4,126,423 | |
Large U.S. equity | | | — | | | | 2,100,553 | | | | — | | | | 2,100,553 | |
Balanced/asset allocation | | | — | | | | 6,314,398 | | | | — | | | | 6,314,398 | |
Short-term fixed income | | | — | | | | 2,539,889 | | | | — | | | | 2,539,889 | |
Guaranteed interest account | | | — | | | | — | | | | 3,352 | | | | 3,352 | |
| | | | | | | | | | | | | | | | |
| | | | |
Total assets at fair value | | $ | 26,771,243 | | | $ | 15,081,263 | | | $ | 3,352 | | | $ | 41,855,858 | |
| | | | | | | | | | | | | | | | |
10
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (5) | Fair value measurements (continued) |
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at the fair value as of December 31, 2009:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Financial institution common stock | | $ | 3,838,672 | | | $ | — | | | $ | — | | | $ | 3,838,672 | |
Mutual funds: | | | | | | | | | | | | | | | | |
Small/mid U.S. equity | | | 1,551,347 | | | | — | | | | — | | | | 1,551,347 | |
Fixed income | | | 1,819,739 | | | | — | | | | — | | | | 1,819,739 | |
Large U.S. equity | | | 6,025,231 | | | | — | | | | — | | | | 6,025,231 | |
Balanced/asset allocation | | | 1,546,316 | | | | — | | | | — | | | | 1,546,316 | |
Short-term fixed income | | | 2,007,777 | | | | — | | | | — | | | | 2,007,777 | |
International equity | | | 1,306,503 | | | | — | | | | — | | | | 1,306,503 | |
Pooled-separate accounts: | | | | | | | | | | | | | | | | |
Small/mid U.S. equity | | | — | | | | 3,041,608 | | | | — | | | | 3,041,608 | |
Large U.S. equity | | | — | | | | 1,813,900 | | | | — | | | | 1,813,900 | |
Balanced/asset allocation | | | — | | | | 4,394,473 | | | | — | | | | 4,394,473 | |
Short-term fixed income | | | — | | | | 2,793,920 | | | | — | | | | 2,793,920 | |
International equity | | | — | | | | 2,019,290 | | | | — | | | | 2,019,290 | |
Guaranteed interest account | | | — | | | | — | | | | 18,913 | | | | 18,913 | |
| | | | | | | | | | | | | | | | |
| | | | |
Total assets at fair value | | $ | 18,095,585 | | | $ | 14,063,191 | | | $ | 18,913 | | | $ | 32,177,689 | |
| | | | | | | | | | | | | | | | |
The following table sets forth a summary of changes in the fair value of the Plan’s Level 3 assets for the years ended December 31, 2010 and 2009:
| | | | | | | | |
| | | 2010 | | | 2009 | |
| | | Guaranteed
Interest
Account | | | Guaranteed
Interest
Account | |
Balance, beginning of year | | $ | 18,913 | | | $ | 42,274 | |
Interest credited | | | 394 | | | | 977 | |
Purchases, sales, issuances and settlements (net) | | | (15,955 | ) | | | (24,338 | ) |
| | | | | | | | |
| | |
Balance, end of year | | $ | 3,352 | | | $ | 18,913 | |
| | | | | | | | |
11
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
On July 2, 2009, The PrivateBank and Trust Company participated in an FDIC assisted transaction involving the former Founders Bank. Although there was no merger of the former Founders Group Inc. Profit Sharing Plan into PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan, the former Founders Bank employees who were hired by the Company were able to rollover their funds into the Plan.
On January 22, 2007, PrivateBancorp, Inc. applied for a determination letter from the Internal Revenue Service (IRS) regarding the initial qualification of the amended and restated Plan. On July 21, 2008, the IRS issued a favorable determination letter on the Plan. The Plan has been amended since receiving the determination letter. However, the Plan trustees and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC.
Although they have not expressed any intent to do so, the Company and its subsidiaries have the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in the Company contributions.
| (9) | Risks and uncertainties |
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.
| (10) | Prohibited transactions |
Defined contribution plans are required to remit employee contributions to the Plan as soon as they can be reasonably segregated from the employer’s general assets, but no later than the 15th business day of the month following the month in which the participant contributions are withheld by the employer.
12
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
| (10) | Prohibited transactions (continued) |
For the Plan year ended December 31, 2010, the Company did not remit one employee’s contribution timely to the Plan in the amount of $1,014. For the Plan year ended December 31, 2009, the Company did not remit one employee’s contribution timely to the Plan in the amount of $500. The Company calculated and remitted lost earnings to the Plan participants during the 2011 and 2009 Plan years, respectively.
Effective January 1, 2010, the Plan was amended to incorporate changes in the laws. In addition, there were discretionary changes made to definition of Plan beneficiaries, a provision for employees who die on military leave, the composition of committee members, and to slightly change the definition of the specific designation group.
Effective January 1, 2009, the Plan was amended to establish a specific designation group for those individuals that become employees through an acquisition. The amendment establishes special eligibility procedures and entry dates for the specific group and allows service credit to be granted to former employees of Founders Bank who joined the Company.
Management evaluated subsequent events through the date the financial statements were issued. Events or transactions occurring after December 31, 2010, but prior to the financial statements being issued, that provided additional evidence about conditions that existed at December 31, 2010, have been recognized in the financial statements for the year ended December 31, 2010. Events or transactions that provided evidence about conditions that did not exist at December 31, 2010, but arose before the financial statements were issued have not been recognized in the financial statements for the year ended December 31, 2010.
This information is an integral part of the accompanying financial statements.
13
SUPPLEMENTAL SCHEDULES
14
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
FORM 5500, SCHEDULE H, LINE 4(i) -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2010
EIN: 36-3681151
Plan Number: 001
| | | | | | | | | | |
(a) | | (b) Identity of issue, borrower, lessor or similar party | | (c) Description of investments including maturity date, rate of interest, collateral, par or maturity value | | (d)
Cost | | (e)
Current value | |
| | | | |
| * | | Principal Money Market Sep Acct | | Pooled separate account | | (1) | | $ | 2,539,888 | |
| * | | Principal Lg Cap Stk Idx | | Pooled separate account | | (1) | | | 2,100,553 | |
| * | | Principal Mid Cap Value | | Pooled separate account | | (1) | | | 1,367,153 | |
| * | | Principal Sm Cap S&P 600 Index | | Pooled separate account | | (1) | | | 917,855 | |
| * | | Principal Mid Cap S&P 400 Index | | Pooled separate account | | (1) | | | 1,357,978 | |
| * | | Principal LifeTm 2010 | | Pooled separate account | | (1) | | | 522,227 | |
| * | | Principal LifeTm 2020 | | Pooled separate account | | (1) | | | 2,156,639 | |
| * | | Principal LifeTm 2030 | | Pooled separate account | | (1) | | | 1,580,984 | |
| * | | Principal LifeTm 2040 | | Pooled separate account | | (1) | | | 1,127,461 | |
| * | | Principal LifeTm 2050 | | Pooled separate account | | (1) | | | 753,351 | |
| * | | Principal LifeTm Str Inc | | Pooled separate account | | (1) | | | 173,737 | |
| * | | Principal Real Estate Secs | | Pooled separate account | | (1) | | | 483,437 | |
| * | | PrivateBancorp, Inc. | | Common stock | | (1) | | | 6,681,375 | |
| | American Funds Growth Fund of America R5 | | Registered investment company | | (1) | | | 3,375,146 | |
| | American Funds American Balanced Fund R5 | | Registered investment company | | (1) | | | 1,810,779 | |
| | American Funds Europacific Growth Fund | | Registered investment company | | (1) | | | 2,394,404 | |
| | Dodge & Cox Stock Fund | | Registered investment company | | (1) | | | 4,114,059 | |
| | Buffalo Small Cap Fund | | Registered investment company | | (1) | | | 625,110 | |
| | Columbia Acorn Z Fund | | Registered investment company | | (1) | | | 748,025 | |
| | Perkins Small Cap Value I Fund | | Registered investment company | | (1) | | | 609,574 | |
| | Dimensional Fund DFA Int’l Small Cap Value I Fund | | Registered investment company | | (1) | | | 843,344 | |
| | Dimensional Fund DFA Emerging Mkts Value I Fund | | Registered investment company | | (1) | | | 1,215,212 | |
15
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
FORM 5500, SCHEDULE H, LINE 4(i) -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2010
| | | | | | | | | | | | |
(a) | | (b) Identity of issue, borrower, lessor or similar party | | (c) Description of investments including maturity date, rate of interest, collateral, par or maturity value | | (d)
Cost | | | (e)
Current value | |
| | | | |
| | Vanguard ST Bond Index Inv Fund | | Registered investment company | | | (1) | | | | 1,859,356 | |
| | Vanguard Devel Markets | | Registered investment company | | | (1) | | | | 65,199 | |
| | Templeton Global Bond Adv. Fund | | Registered investment company | | | (1) | | | | 79,352 | |
| | Water Island Arbitrage I Fund | | Registered investment company | | | (1) | | | | 9,603 | |
| | PIMCO Total Return Instl Fund | | Registered investment company | | | (1) | | | | 2,340,705 | |
| * | | Guaranteed interest account, Principal Life Insurance Company | | Insurance company general fund account | | | (1) | | | | 3,352 | |
| | Notes receivable from participants | | Participant loans - 4.25% -9.25%, with various maturities | | | | | | | 920,426 | |
| | | | | | | | | | | | |
| | | | |
| | | | | | | | | | $ | 42,776,284 | |
| | | | | | | | | | | | |
| * | Party-in-interest as defined by ERISA. |
| (1) | Cost information may be omitted as the investments are participant-directed. |
16
PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND
EMPLOYEE STOCK OWNERSHIP PLAN
FORM 5500, SCHEDULE H, LINE 4a -
SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
Year Ended December 31, 2010
EIN: 36-3681151
Plan Number: 001
| | | | | | | | |
Participant contributions transferred late to the plan: $1,014 | | Total that constitute non-exempt prohibited transactions: $1,014 | | Total fully corrected under VFCP and PTE 2002-51 $0 |
Check here if late participant loan contributions are included ¨ | | Contributions not corrected: $0 | | Contributions corrected outside VFCP: $1,014 | | Contributions pending correction in VFCP: $0 | |
17
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | |
| Dated: June 27, 2011 | | PRIVATEBANCORP, INC. SAVINGS, RETIREMENT AND EMPLOYEE STOCK OWNERSHIP PLAN |
| |
| | By: PrivateBancorp, Inc. Savings, Retirement and Employee Stock Ownership Plan Committee |
| | |
| | By: | | /s/ David J. Hesselbein |
| | Name: | | David J. Hesselbein |
| | Title: | | Committee Member |
18
EXHIBIT INDEX
| | |
Exhibit
No. | | Description |
| |
| 23.1 | | Consent of Clifton Gunderson |
19
