EXHIBIT 99.1
[LOGO]
FOR FURTHER INFORMATION:
Dennis Klaeser, CFO
PrivateBancorp, Inc.
312-683-7100
For Immediate Release
PRIVATEBANCORP ANNOUNCES PRELIMINARY
EARNINGS RESULTS FOR THE SECOND QUARTER OF 2003
Chicago, IL, July 1, 2003-- PrivateBancorp, Inc. (NASDAQ: PVTB) today
announced that it expects to report earnings per diluted share between $0.53 to
$0.56 for the second quarter 2003. Management expects that net securities gains,
offset by trading losses and the recognition of a previously disclosed fraud
loss, will account for approximately $0.06 per diluted share for the second
quarter 2003.
On May 23, 2003, the Company realized a gain of $2.4 million on the
sale of a single corporate bond from its available-for-sale investment
securities portfolio. The value of the security increased as a result of
declines in interest rates during the quarter. The proceeds from the sale have
been invested in assets that management believes will be impacted to a lesser
degree by rising interest rates. Securities gains and losses for the second
quarter 2003 will also include a permanent impairment write-down of $210,000 on
the Company's interest-only collateralized mortgage obligation ("CMO")
investments. Continued low levels of market interest rates during the second
quarter 2003 have resulted in accelerated mortgage prepayments, which have
further impaired the fair value of its interest-only CMO securities. The
Company's remaining investment in interest-only CMO securities was approximately
$120,000 as of June 30, 2003.
The Company will record a second quarter 2003 trading loss of
approximately $1.1 million to reflect the fair market value adjustment on an
interest rate swap. This interest rate swap was entered into during the third
quarter of 2002 in order to hedge a portion of the Company's investment in
long-term municipal bonds. The change in the fair market value of the swap is
recognized in earnings and results in a loss because of continued declines in
market rates of interest since the end of the first quarter 2003.
In May 2003, the Company reported that in April 2003, The PrivateBank
(Chicago) suffered a potential loss of $400,000 in a check fraud scheme
involving a new account deposit. On June 27, 2003, the Company received a letter
from its insurance carrier declining coverage for the loss. As a result, the
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Company will record a second quarter 2003 charge of $400,000. The Company is
continuing to pursue recovery of the fraud loss in excess of the $150,000
deductible from its insurance carrier.
Management expects growth in net interest income as compared to the
first quarter 2003. Loans increased by approximately $48.0 million or 4.7% to
approximately $1.066 billion at June 30, 2003 as compared to $1.018 billion at
March 31, 2003. Total deposits increased by approximately $81.0 million or 5.9%
to approximately $1.446 billion as compared to $1.365 billion at March 31, 2003.
The second quarter net interest margin is expected to decline as compared to the
first quarter 2003, due primarily to the purchase of additional Federal Home
Loan Bank ("FHLB") stock of $45 million in May 2003. Recognition of dividends on
the recently acquired FHLB stock lag the purchase date due to the timing of the
FHLB dividend declaration.
The Company plans to release its second quarter 2003 earnings prior to
the opening of trading on July 21, 2003. The earnings release will be posted on
the Company's website. The Company plans to webcast live its quarterly
conference call with financial analysts on July 21, 2003 at 10:00 a.m. Eastern
time (9:00 a.m. Central time). Access to the call will be available via a link
called "Second Quarter 2003 Earnings Call" on the investor relations page of
PrivateBancorp, Inc.'s Internet site at www.privatebankandtrust.com.
PrivateBancorp, Inc. was organized in 1989 to provide highly
personalized financial services primarily to affluent individuals,
professionals, owners of closely-held businesses and commercial real estate
investors. The Company operates two banking subsidiaries, The PrivateBank and
Trust Company and The PrivateBank (St. Louis). The PrivateBank and Trust Company
subsidiary has a controlling interest in a Chicago-based investment advisor,
Lodestar Investment Counsel, LLC. The Company, which had assets of $1.6 billion
at March 31, 2003, currently has banking offices in Chicago, Wilmette, Oak
Brook, St. Charles, Lake Forest, Winnetka, and Geneva, Illinois, and in St.
Louis, Missouri.
Additional information can be found in the Investor Relations section
of PrivateBancorp, Inc.'s website at www.privatebankandtrust.com
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Forward-Looking Statements: Statements contained in this news release that are
not historical facts may constitute forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The
Company's ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors which could cause actual results for
the period ended June 30, 2003 to differ from those estimated in the preliminary
results reflected in this press release include higher than expected expense
accruals, changes in estimated prepayment speeds on mortgage loans that affect
the amount of impairment charges on the Company's interest-only CMO securities
and the interest accruals on mortgage-backed securities, changes in the
estimated loan loss provision based on the Company's ultimate assessment of the
adequacy of its allowance for loan losses as of June 30, 2003, and other
potential changes in the estimates and accruals the Company is required to make
to present interim financial statements in accordance with GAAP. These risks and
uncertainties should be considered in evaluating forward- looking statements and
undue reliance should not be placed on such statements.
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