Privatebancorp (PVTB) in Chicago is in no rush to boost its dividend, preferring instead to use any excess capital to grow earning assets and invest in new products.
Speaking at an investor conference in New York Tuesday, Chief Financial Officer Kevin Killips also said that the $12.6 billion-asset company is closer to exiting the Troubled Asset Relief Program than it was nine months ago but still has not set a timetable.
The parent company of PrivateBank received $244 million from the Treasury Department in January 2009 and the interest rate on its quarterly payment to the Treasury is scheduled to rise from 5% to 9% in about 19 months. Asked by one analyst about its repayment plans, Killips suggested that the company would exit the program before the interest rate re-sets.
"We want to maintain patience but we don't want to be stubborn about it," he said at the conference hosted by Morgan Stanley.
Killips was similarly vague about when Privatebancorp would increase its dividend from the penny a share it has been paying since the first quarter of 2009. Though the company is very well capitalized, growth is its first priority, he said. He noted, for example, that fee income generates roughly 21% of Privatebancorp's overall revenues and that its goal is for that figure to be closer to its peers' average of around 30%.
"The best use of capital is to continue to build out the business in the bank," he said.