PrivateBancorp logs large 3Q loss on loans
Fast-growing PrivateBancorp Inc., hurt by surging loan losses, reported Monday that it swung to a sizeable third-quarter loss.
The Chicago bank holding company had a loss in the latest quarter of $7.4 million, or 23 cents a diluted share, in sharp contrast to the year-ago net income of $9.2 million, or 42 cents a share. Per share results reflect an increase in shares outstanding to 31.6 million in the latest quarter from 21.2 million a year ago.
PrivateBancorp's net loss would have been even deeper without the help of a $5.2 million income-tax benefit: on a pretax basis, the holding company's loss was $12.5 million, compared to $12.6 million in pretax profit in last year's quarter.
That's principally because the company's provision for potential bad loans jumped dramatically, to $30.2 million from $2.4 million in the year-ago quarter. Bad-loan set-asides grew sequentially, as well, with the third quarter's provision topping than the 2008 second quarter's $23 million.
The increase is attributatle, PrivateBancorp said, "to an increase in non-performing loans and loans charged off during the quarter, the substantialllan growth the comany continues to experience and deteriorating market conditions."
The rise in non-performing loans is "primarily driven (by) deterioration deterioration in residential development loan exposures in various markets," the bank holding concern said, adding that to date PrivateBancorp "has not seen meaningful deterioration in credit quality in other loan types."
In spite of the "unprecedented times" in the financial industry, "PrivateBancorp continues to generate strong performance in key measurs, including revenue, loan and deposit growth," said President and Chief Executive Officer Larry Richman.
While acknolwedging that the "challenging growth environment" slowed progress, he said, "We remain confident in our ability to continue delivering on our Strategic Growth Plan."
Source:http://www.chicagotribune.com/business