In many respects, PrivateBancorp Inc.'s 15-month-old initiative to transform itself into the Chicago region's premier middle-market lender is working. Client deposits grew by $1 billion in the fourth quarter alone, total loans have roughly doubled in the last year, and fee income is soaring.

But after reporting a much-larger-than-expected $62 million fourth-quarter loss Monday — mostly on soured loans to residential developers — the $10 billion-asset company is starting to tap the brakes.

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