CHICAGO, April 28 /PRNewswire-FirstCall/ -- PrivateBancorp, Inc. ( NASDAQ:PVTB ) today reported a net loss for the first quarter 2008 of $8.9 million, or $0.34 per diluted share, compared to net income of $9.0 million, or $0.41 per diluted share, for the first quarter 2007. The net loss was primarily attributed to expected increases in expenses associated with implementation of our previously announced Strategic Growth Plan. During the quarter, the Company experienced substantial increases in revenue, client deposits and loans, and added a significant number of new clients.

   "The Strategic Growth Plan conceived last year has made PrivateBancorp a larger, more diversified company and puts us on course to become the premier middle-market commercial, commercial real estate, private banking and wealth management bank in all of our chosen markets. During the quarter, we added 46 talented, experienced bankers across our network of offices, bringing the total number of managing directors added since we first announced the Plan to 95," said Ralph B. Mandell, Chairman of the Board. "I am proud of the team we have assembled and its exceptional capabilities to serve the business needs of our clients."

   "As anticipated, first quarter earnings were negatively affected by costs associated with our Strategic Growth Plan and higher loan loss provision expenses. However, the growth in the first full quarter of the execution of the Plan exceeded our own expectations. The substantial increase in our client base, as evidenced by exceptionally strong loan and deposit growth and our strong pipeline of business, is a testament to our strong business development culture," said Larry D. Richman, President and CEO.

   "We now have in place the essential elements that I believe can substantially enhance the franchise value of PrivateBancorp. The positive reception among our new clients and prospects to PrivateBancorp's relationship-based client-service model, supported by our enhanced suite of products and services, translated into strong revenue and balance sheet growth during the first quarter, which is especially rewarding given the current economic environment. We continue to execute on our Strategic Growth Plan, building our network of clients and adding new deposit, treasury, cash management and capital markets products and services and substantially enhancing our infrastructure, including risk management capabilities," added Richman. "Looking forward, we will seek to expand the breadth of our relationships with our existing clients, while expanding our base of new clients in all the markets we serve. To accommodate the growth of our Company, we will move our executive officers, as well as a portion of The PrivateBank -- Chicago's commercial and private bankers, to a new headquarters located at 120 S. LaSalle Street in the heart of Chicago's financial district -- while continuing to maintain offices in our current location at 70 West Madison."

Execution of the Strategic Growth Plan

   As previously disclosed, the Company sought to accomplish several strategic goals in the execution of its Strategic Growth Plan - regain and exceed the Company's historical growth rate, diversify its business and acquire many new, middle-market clients. To achieve these goals, the Company made a substantial investment in people and infrastructure, laying the foundation for future growth. Although the Company continued to invest in people and infrastructure during the first quarter, going forward we anticipate operating expense growth will moderate. With much of that investment now made, management is focused on key performance indicators -- revenue, deposit and loan growth, operating efficiency and profitability, as well as client acquisition success -- in order to enhance stockholder value.

   In keeping with its Strategic Growth Plan during the first quarter 2008, the Company hired a net total of 34 new Managing Directors, bringing the total number of Managing Directors to 258 at March 31, 2008, compared to 224 at December 31, 2007, a 15% increase. These hires were made across the Company's offices, including the staffing of four new offices in Cleveland, Ohio, Des Moines, Iowa, Denver, Colorado and Minneapolis, Minnesota. Full-time equivalent (FTE) employees increased 10% to 657 from 597 at December 31, 2007. In total, pursuant to the Strategic Growth Plan, the Company has now completed the hiring of 98 commercial bankers and 52 additional personnel who support the Company's infrastructure and delivery of its products and services.

   During the first quarter 2008, sign-on bonus payments to newly hired employees were $3.7 million compared to $13.7 million in the fourth quarter 2007. The Transformation and Retention Equity Awards outstanding, which were granted by the Company from the time the Strategic Growth Plan was announced and through March 31, 2008, had a value of approximately $62 million at March 31, 2008 compared to approximately $50 million at December 31, 2007. The cost of these Awards will be expensed over the five-year period ending December 31, 2012. Compensation costs associated with these awards totaled $2.2 million for the first quarter 2008 compared to $2.0 million for the fourth quarter 2007.

Balance Sheet Growth

   The Company's investment in people and infrastructure has fueled strong balance sheet growth, which drove the Company's 18% revenue growth in the first quarter. Given the acceleration in loan growth since inception of the Plan, the Company is focused on balancing growth in its loan portfolio with an emphasis on appropriate sources of funding, including gathering client deposits and other alternative funding sources.

   Total assets increased 21% to $6.0 billion at March 31, 2008 from $5.0 billion at December 31, 2007. Total loans increased 23% to $5.1 billion at March 31, 2008 from $4.2 billion at December 31, 2007. The loan category that grew most substantially during the quarter was commercial loans (including both commercial and industrial and owner-occupied commercial real estate loans), which increased to $1.8 billion or 36% of our total loans from $1.3 billion or 32% of total loans at year-end 2007. During the quarter, commercial real estate loans grew to $2.0 billion or 39% of our total loans from $1.6 billion or 38% of total loans at year-end 2007.

   Total deposits increased 33% to $5.0 billion at March 31, 2008 from $3.8 billion at December 31, 2007. Approximately one-third of the increase in total deposits, or $398.9 million, came from an increase in client deposits, defined as total deposits less brokered deposits. The other two-thirds of the increase in total deposits came from a combination of increased CDARs(TM) deposits of $215.5 million and traditional brokered deposits of $639.0 million.

   During the quarter, the Company facilitated its deposit growth by aggressively pursuing deposits from existing and new clients, increasing institutional and municipal deposits, expanding its business DDA account balances due to its enhanced treasury management services, and implementation of a CDARs(TM) deposit program. The CDARs(TM) deposit program is a deposit services arrangement that effectively achieves FDIC deposit insurance for jumbo deposit relationships, which is an attractive feature to many of our middle-market and private banking clients. These deposits are classified as brokered deposits for regulatory deposit purposes; however, the source of the deposits is our existing and new client relationships and are, therefore, not traditional "brokered" deposits.

   As the Company attracts new clients, loan volume tends to lead client deposit volume associated with these new relationships. Longer term as client deposits grow, the Company expects to reduce its reliance on brokered deposits as a percentage of total deposits. The Company has enhanced its suite of deposit products and treasury management services in order to attract more client deposits going forward and is exploring a variety of other funding opportunities.

   Funds borrowed, which include federal funds purchased, FHLB advances, borrowings under the Company's credit facility, and convertible senior notes, decreased to $359.1 million at March 31, 2008 from $560.8 million at December 31, 2007, primarily as a result of the aforementioned increase in client deposits, CDARs(TM) deposits and traditional brokered deposits.

Credit Quality

   During the first quarter 2008, the provision for loan losses increased to $17.1 million, compared to $1.4 million in the first quarter 2007 and $10.2 million in the fourth quarter 2007 due to the substantial loan growth incurred and an increase in non-performing assets, coupled with current market conditions and loans charged off during the quarter.

   Non-performing assets to total assets were 1.10% at March 31, 2008, compared to 0.97% at December 31, 2007. Of $65.9 million in total non-performing assets at March 31, 2008, 33% are located in the Georgia market, 27% are located in the Chicago market, 24% are located in the St. Louis market, and 16% are in Michigan. Of total non-performing assets, 59% are construction, 23% are commercial real estate, 8% are commercial, and the remaining 10% are classified as residential real estate and personal. Of the $65.9 million in non-performing assets at March 31, 2008, $42.7 million or 65% relate to residential development loans.

   Net charge-offs totaled $4.1 million in the first quarter 2008, or an annualized rate of 0.35% of average total loans, versus net charge-offs of $582,000, or an annualized rate of 0.07% of average total loans, in the prior year first quarter, and net charge-offs of $3.4 million, or an annualized rate of 0.35% of average total loans, in the fourth quarter 2007. The allowance for loan losses as a percentage of total loans was increased to 1.21% at March 31, 2008, compared to 1.17% at December 31, 2007.

Net interest income

   The Company experienced net interest margin compression as a result of interest rate cuts by the Federal Reserve during the quarter and because of the increase in non-performing assets. Net interest income totaled $36.3 million in the first quarter 2008, compared to $32.0 million for the first quarter 2007, and $31.7 million for the fourth quarter 2007. Net interest margin (on a tax equivalent basis) decreased to 2.88% for the first quarter 2008, compared to 3.26% in the first quarter 2007, and 2.96% for the fourth quarter 2007. Yields on earning assets decreased by 107 basis points over the prior year quarter while the cost of funds decreased by 65 basis points. During the first quarter, the Company reversed approximately $1.1 million in accrued interest income due to loans that became non-performing, compared to $634,000 in the fourth quarter 2007. The interest reversal during the first quarter accounted for eight basis points of margin compression, which compares to six basis points of margin compression that occurred in the fourth quarter of 2007 as a result of interest reversals.

Non-interest income

   Consistent with the Strategic Growth Plan, the Company continues to pursue opportunities to diversify its revenue stream. The PrivateWealth Group fee revenue was $4.4 million during the first quarter 2008, an increase of 15% from $3.8 million in the first quarter 2007, and up 3% from $4.3 million in the fourth quarter 2007. The PrivateWealth Group's assets under management increased 12% to $3.3 billion at March 31, 2008, from $3.0 billion at March 31, 2007, and were unchanged from December 31, 2007. Fees paid to third-party investment managers were $968,000 in the first quarter 2008, compared to $782,000 in the prior year quarter, and $925,000 in the fourth quarter 2007. Mortgage banking income increased 85% over the prior quarter and 16% over the prior year quarter due to market demand. Other income, which includes banking fee income, income on our bank owned life insurance and other loan fees, increased 64% over the prior quarter and 56% over the prior year quarter. Other income grew primarily as a result of substantial growth in fee income from a variety of services provided to new middle-market banking clients. The Company also recognized $814,000 in securities gains during the first quarter 2008 compared to none in the prior quarter and $79,000 in the prior year quarter due to realized gains made in repositioning the investment portfolio.

   One of the goals of the Company's Strategic Growth Plan is to diversify the Company's non-interest income by generating new sources of fee income through the offering of new products and services to clients. To that end, the Company has enhanced or introduced a variety of new products and services including lockbox, control disbursement, virtual vault, interest-rate swaps, and foreign exchange services. The Company has begun to see success in accomplishing this goal, as other income was $1.75 million during the first quarter of 2008, an increase of 56% from $1.13 million in the first quarter 2007, and up 64% from $1.06 million in the fourth quarter of 2007.

Non-interest expense

   Non-interest expense was $42.9 million in the first quarter 2008, up from $23.4 million in the first quarter 2007 and down from $51.8 million at the fourth quarter 2007. The increase from the prior year quarter was primarily due to increased compensation and marketing expenses related to the investment in the Strategic Growth Plan. As expected, compensation expenses increased to $27.7 million in the first quarter of 2008 compared to $13.7 million during the first quarter of 2007. Included in other operating expenses for the quarter were $2.1 million in operating expenses and disposition costs related to OREO properties.

Capital Resources

   As of March 31, 2008, the Company remained well-capitalized for regulatory purposes with a total risk-based capital ratio of 11.5% and Tier 1 risk-based capital ratio of 9.0%, substantially exceeding the well-capitalized thresholds of 10% and 6%, respectively. The Company is committed to maintaining a strong capital position and plans to raise additional regulatory capital in the near future due to anticipated, substantial organic growth in the balance sheet.

   Additional information can be found in the Investor Relations section of PrivateBancorp, Inc.'s website at http://www.pvtb.com/ .

                           PrivateBancorp, Inc.
                 Quarterly Consolidated Income Statements
                                Unaudited
                          (dollars in thousands)

                      1Q08       4Q07       3Q07        2Q07       1Q07
  Summary Income
   Statement
  Interest Income
    Loans, including
     fees            $76,113    $71,062    $72,299     $70,732    $68,886
    Federal funds
     sold and
     interest bearing
     deposits            246        275        259         239        238
    Securities:
      Taxable          4,286      3,951      3,450       3,594      3,589
      Exempt from
       Federal income
       taxes           2,244      2,313      2,345       2,344      2,348
  Total Interest
   Income             82,889     77,601     78,353      76,909     75,061

  Interest Expense
    Deposits:
      Interest-bearing
       demand            422        451        475         437        596
      Savings and
       money market
       deposit
       accounts       13,221     16,813     17,904      16,667     17,062
      Brokered
       deposits
       and other
       time
       deposits       26,358     20,894     21,732      21,237     19,777
    Funds borrowed     4,996      6,087      4,350       4,872      4,084
    Junior
     Subordinated
     deferrable
     interest
     debentures held
     by trusts that
     issued
     guaranteed
     capital debt
     securities        1,572      1,608      1,604       1,585      1,567
  Total Interest
    Expense           46,569     45,853     46,065      44,798     43,086

  Net Interest
   Income             36,320     31,748     32,288      32,111     31,975
    Provision for
     loan losses      17,133     10,171      2,399       2,958      1,406
  Net Interest Income
   after Provision
   for Loan Losses    19,187     21,577     29,889      29,153     30,569

  Non-interest Income
    The PrivateWealth
     Group fee
     revenue           4,419      4,310      4,029       4,024      3,826
    Mortgage banking
     income            1,530        828      1,157       1,229      1,314
    Other income       1,753      1,066      1,214       1,803      1,126
    Net securities
     gains (losses)      814          -        366        (97)         79
  Total Non-interest
   Income              8,516      6,204      6,766       6,959      6,345

  Non-interest Expense
    Salaries and
     benefits         27,749     31,673     13,083      12,734     13,729
    Occupancy expense  3,845      3,918      3,336       3,160      2,790
    Professional fees  2,311      6,442      2,109       1,610      1,715
    Wealth management
     fees                968        925        857         868        782
    Marketing          2,828      2,422      1,058       1,330      1,289
    Data processing    1,220      1,282      1,039         984        901
    Amortization
     of intangibles      234        240        241         242        243
    Insurance            870        772        452         363        352
    Other non-interest
     expenses          2,907      4,136      1,749       2,019      1,564
  Total Non-interest
   Expense            42,932     51,810     23,924      23,310     23,365

    Minority interest
     expense              68         78        100          95         90
  Income Before
   Income Taxes     (15,297)   (24,107)     12,631      12,707     13,459
    Income tax
     (benefit)
     provision       (6,364)    (8,962)      3,466       3,956      4,423
  Net (Loss)
   Income           ($8,933)  ($15,145)     $9,165      $8,751     $9,036
    Preferred Stock
     Dividends           107        107          -           -          -
  Net (Loss) Income
   available to
   Common
   Shareholders     ($9,040)  ($15,252)     $9,165      $8,751      9,036

  Weighted Average
   Common Shares
   Outstanding    26,885,565 22,537,167 21,223,341  21,185,400 21,331,021
  Diluted Average
   Common Shares
   Outstanding    26,885,565 22,537,167 21,819,333  21,810,173 22,018,295

  Per Common Share
   Information
    Basic            $(0.34)    $(0.68)      $0.43       $0.41      $0.42
    Diluted          $(0.34)    $(0.68)      $0.42       $0.40      $0.41
    Dividends         $0.075     $0.075     $0.075      $0.075     $0.075


  Note 1:  Certain reclassifications have been made to prior period
  financial statements to place them on a basis comparable with the current
  period financial statements.

  Note 2: Diluted shares are equal to Basic shares for the first quarter
  2008 and the fourth quarter 2007 due to the net loss.  The calculation of
  diluted earnings per share results in anti-dilution.



                             PrivateBancorp, Inc.
                         Consolidated Balance Sheets
                            (dollars in thousands)


                    03/31/08   12/31/07   09/30/07    06/30/07   03/31/07
                   unaudited    audited  unaudited   unaudited  unaudited
  Assets
  Cash and due
   from banks        $54,576    $51,331    $52,922     $63,074    $73,736
  Fed funds sold and
   other short-term
   investments        22,226     13,220     22,117      19,672     17,535
    Total cash and
     cash
     equivalents      76,802     64,551     75,039      82,746     91,271
  Loans held
   for sale            9,659     19,358      4,262      20,905     14,928
  Equity investments  13,157     12,459     10,682      10,040      9,824
  Investment
   securities:
   available-
   for-sale          575,798    526,271    487,266     485,814    472,200

  Loans net of
   unearned
   discount        5,136,066  4,177,795  3,737,523   3,705,339  3,581,398
  Allowance for
   loan losses      (61,974)   (48,891)   (42,113)    (41,280)   (38,893)
  Net loans        5,074,092  4,128,904  3,695,410   3,664,059  3,542,505

  Goodwill            93,341     93,341     93,357      93,043     93,043
  Premises and
   equipment, net     26,356     25,600     24,844      23,415     21,674
  Accrued interest
   receivable         25,287     24,144     23,422      23,554     22,316
  Other assets       119,152     95,577     83,944      82,434     76,111
  Total Assets    $6,013,644 $4,990,205 $4,498,226  $4,486,010 $4,343,872

  Liabilities
  Demand deposits:
    Non-interest
     bearing        $341,779   $299,043   $285,003    $303,455   $312,648
    Interest
     bearing         159,003    157,761    134,428     150,324    144,812
  Savings and money
   market deposit
   accounts        1,663,275  1,594,172  1,577,930   1,505,303  1,485,783
  Brokered
   deposits        1,396,930    542,470    500,296     630,905    631,689
  Other time       1,453,479  1,167,692  1,090,405   1,048,558  1,007,889
  Total deposits   5,014,466  3,761,138  3,588,062   3,638,545  3,582,821

  Funds borrowed     359,099    560,809    464,021     407,696    334,128
  Junior
   Subordinated
   deferrable
   interest
   Debentures held
   by trusts
   that issued
   guaranteed
   capital debt
   securities        101,033    101,033    101,033     101,033    101,033
  Accrued interest
   payable            17,670     16,134     13,968      14,334     15,259
  Other liabilities   28,169     50,298     12,742      18,293     10,959
  Total
   Liabilities    $5,520,437 $4,489,412 $4,179,826  $4,179,901 $4,044,200

  Stockholders'
   Equity
  Preferred stock     41,000     41,000          -           -          -
  Common stock        27,289     27,225     21,612      21,568     21,531
  Treasury stock    (13,925)   (13,559)   (13,475)    (13,148)   (13,068)
  Additional
   paid-in-capital   314,961    311,989    160,178     157,960    155,729
  Retained earnings  115,016    126,204    143,585     136,057    128,904
  Accumulated other
   comprehensive
   income              8,866      7,934      6,500       3,672      6,576
  Total Stockholders'
   Equity           $493,207   $500,793   $318,400    $306,109   $299,672

  Total Liabilities
   and
   Stockholders'
   Equity         $6,013,644 $4,990,205 $4,498,226  $4,486,010 $4,343,872


  Note 1:  Certain reclassifications have been made to prior period
  financial statements to place them on a basis comparable with the current
  period financial statements.

Source: PrivateBancorp, Inc.