CHICAGO — PrivateBancorp Inc. announced plans Wednesday to expand into Kansas City, Mo., by establishing PrivateBank-Kansas City, and has hired a former Gold Banc Corp. executive to run it.
Ralph B. Mandell, PrivateBancorp’s chairman, president, and chief executive, said the $3.9 billion-asset company is eyeing other markets as well.
“Certainly we are going to be looking at the Florida market, Phoenix, Scottsdale — Texas would be a great market — as well as other markets throughout the United States,” he said.
Calvin Kleinmann, who headed private banking at Gold Bank, was named PrivateBank-Kansas City’s chairman and CEO. Gold Bank is the main subsidiary of Gold Banc Corp., which is based in Leawood, Kan.
“We got to know Cal Kleinmann,” Mr. Mandell said. “He was able to bring a team together. They have been Kansas City bankers for a long time, and they’ve been known, respected, and involved in the community.”
(Marshall & Ilsley Corp. of Milwaukee bought the $4.2 billion-asset Gold Banc in April.)
This year, Mr. Kleinmann formed Midwest Financial Group with the idea of starting a bank. PrivateBancorp is providing Midwest Financial 82% of the capital needed — roughly $16 million — to start the bank. The remaining money will be put up by Mr. Kleinmann and other local investors.
The company will buy out that 18% stake within five years. The bank is expected to open by the second quarter. PrivateBancorp plans to open a loan production office next week and a full-service branch within a month. They will initially operate as units of the company’s St. Louis bank.
In August, PrivateBancorp announced it was buying the $217 million-asset Piedmont Bancshares Inc. of Atlanta for $46.6 million in cash and stock. That deal is expected to close this month.
Lana Chan, an analyst with Bank of Montreal’s BMO Capital Markets in New York, said the latest move is consistent with the company’s plans to expand its wealth management across the Midwest. In addition to Kansas City and Atlanta, it has bought a bank in Michigan and opened offices in St. Louis and Wisconsin.
“They’ve got a local management team that oversees each individual market. There is less risk with that strategy,” Ms. Chan said.
