PrivateBancorp back in black for 1Q

PrivateBancorp Inc., which provides financial services to commercial firms, business owners, executives and individuals, said Monday it returned to profitability during the first quarter and easily topped analysts' expectations.
APR 27, 2009
By  D Hampton
PrivateBancorp Inc., which provides financial services to commercial firms, business owners, executives and individuals, said Monday it returned to profitability during the first quarter and easily topped analysts' expectations. The bank earned $4.8 million, or 14 cents per share, after paying preferred dividends. It lost $9.3 million, or 34 cents per share, during the same quarter last year. Analysts polled by Thomson Reuters, on average, forecast a loss of 2 cents per share. PrivateBancorp returned to profitability because of increases in interest income from taxable securities and loans and a surge in income from capital markets products. Net interest income, or the difference between how much it costs a bank to borrow money and how much it receives from lending money, increased to $63.9 million from $36 million. Net interest income was boosted as the bank's interest on taxable securities increased to $14.5 million from $4.3 million during the first quarter last year. Interest income from loans also swelled, increasing 22 percent to $92.9 million from $76.1 million during the first quarter a year ago. Non-interest income, or money derived from fees and other charges, more than doubled to $23.6 million in the first quarter, from $8.5 million during the same quarter last year. Non-interest income surged thanks to growth in income from capital markets products, which increased to $11.2 million from $391,000 last year. The growth was due to clients increasing their use of derivatives for interest rate management, the company said . Despite the improved performance, PrivateBancorp's president and chief executive Larry Richman cautioned that 2009 will continue to present challenges because of the weak economy. In particular, credit quality will remain a challenge, Richman said in a statement. Credit quality has been a challenge for nearly all banks as unemployment rates continue to rise and customers continue to fall behind on repaying loans. While most banks are still sharply increasing loan-loss provisions, PrivateBancorp's moved only slightly higher in the first quarter. The Chicago-based bank's provision for loan losses increased to $17.8 million, from $17.1 million during the first quarter last year. The bank, however, took $119.3 million in provisions during the fourth quarter because of mounting loan losses. In premarket activity, shares of PrivateBancorp climbed $1.20, or 7 percent, to $18.30. The stock has ranged from $9.08 to $49.50 over the past year.

Latest News

Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households
Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households

Pew survey reveals slight majority consensus on tax rates, but views splinter based on political alignment and income levels.

The Fed's going to cut rates
The Fed's going to cut rates

While the Federal Reserve's decision to hold interest rates steady in March was widely expected, it's the reactions from financial professionals that provide a more nuanced picture of the central bank's approach.

Ontario Pension Fund revamps PE business in light of global risk
Ontario Pension Fund revamps PE business in light of global risk

The pioneering member of Canada's Maple Eight is stepping back from its go-it-alone private equity approach as a drought in deals and Trump's trade war prompt a rethink.

Raymond James, RBC reel in UBS advisors managing over $690M in assets
Raymond James, RBC reel in UBS advisors managing over $690M in assets

The firms' latest additions in Florida and Nevada come as a strategic change at UBS raises risk of advisor defections.

Assetmark debuts new advisor succession planning program
Assetmark debuts new advisor succession planning program

The new program offers opportunities and events structured for rookies, next-gen advisor leaders, and soon-to-exit veterans.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies