Full Description

PrivateBancorp, Inc. (PrivateBancorp), incorporated in 1989, is a bank holding company. PrivateBancorp, through its PrivateBank subsidiaries (the Bank), provides business and personal financial services to middle-market commercial and commercial real estate companies, as well as business owners, executives, entrepreneurs and wealthy families. The Banks offers a suite of credit and non-credit solutions, including lending, treasury management, investment products, capital markets products and wealth management and trust services. The clients also have access to mortgage loans offered through The PrivateBank Mortgage Company, a subsidiary of PrivateBancorp. In December 2008, the Company completed the acquisition of Midwest Financial Services, Inc (MFS).

PrivateBancorp manages its activities along five lines of business: Illinois Commercial and Specialty Banking, National Commercial Banking, Commercial Real Estate, The PrivateClients Group and The PrivateWealth Group. The Illinois Commercial and Specialty Banking group targets primarily Illinois-based clients and includes its Specialty Banking Groups - Healthcare, Construction & Engineering, and Security Alarm Finance. Its middle market commercial banking efforts in Atlanta, Detroit, Cleveland, St. Louis, Minneapolis, Des Moines, Milwaukee and Denver are managed as part of National Commercial Banking. The Commercial Real Estate group serves commercial real estate developers and investors nationwide, generating commercial construction, retail, industrial, and office loans. The PrivateClients Group serves the banking needs of privately held businesses, affluent individuals, wealthy families, entrepreneurs and real estate investors. The PrivateWealth Group serves high net worth clients, trust and investment agency services. It also provides custody, escrow and tax deferred exchange services.

Lending Activities

PrivateBancorp provides a range of commercial, real estate and personal lending products and services to clients. Its commercial loan portfolio comprises of lines of credit to businesses for working capital needs, term loans for equipment and expansion, letters of credit and owner-occupied commercial real estate loans. Its commercial real estate portfolio comprises of loans secured by various types of collateral, including one- to-four-family non- owner occupied housing units located primarily in the banks’ target market areas, other non-owner occupied multi-family real estate, office buildings, warehouses, retail space, mixed use buildings and vacant land. The Company’s construction loan portfolio consists of single-family residential properties, multi-family properties, and commercial projects, and includes both investment properties and properties that will be owner-occupied.

Investment Activities

PrivateBancorp invests primarily in mortgage-backed securities and collateralized mortgage obligations (CMOs) backed by United States agencies, such as Fannie Mae and Freddie Mac, and bank-qualified tax-exempt obligations of state and local political subdivisions. At December 31, 2008, the Company’s consolidated investment in Federal Home Loan Bank (FHLB) stock was $23.7 million. It did not own any Freddie Mac or Fannie Mae preferred stock or sub-debt obligations, bank trust preferred securities, or any sub-prime mortgage-backed securities as of December 31, 2008.

Sources of Fund

The Bank subsidiaries’ principal sources of funds are client deposits, wholesale market-based borrowings and capital contributions by the Company. The Bank accepts deposits from a variety of municipal entities.