After spending much of 2011 watching its loans shrink, PrivateBancorp Inc. in Chicago increased its loans by nearly 4% during the fourth quarter. That boost was enough to lift analysts' confidence and estimates.
Quarterly earnings of 10 cents a share beat the analysts' consensus by a penny, according to Thomson Reuters.
But the loan growth and expanding net interest margin prompted Stephen Geyen, an analyst at Stifel, Nicolaus & Co., to raise his estimate for 2012 to 84 cents a share from 78 cents a share. Also, Brad Milsaps, an analyst at Sandler O'Neill & Partners LP, raised his 2012 estimate to 65 cents a share from 58 cents a.
The $12.4 billion-asset company launched an aggressive campaign in late 2007 to dominate its book with commercial and industrial loans. The company said in its earnings release on Tuesday that such loans made up 60% of total loans at yearend, compared to 54% a year earlier.
PrivateBancorp on Tuesday reported that its fourth-quarter earnings fell 10% from a year earlier, to $7.6 million. The company had a sizeable net securities gain in the fourth quarter of 2010.
The company's net interest income rose 2.6% from a year earlier, to $102.9 million. Its net interest margin shrank just 1 basis point from the third quarter but expanded 15 basis points from a year earlier, to 3.48%. The company attributed the year-over-year improvement with the increase in commercial and industrial, opposed to commercial real estate loans. On the liability side, the company said it benefited from more noninterest-bearing accounts and deposit repricing.
The loan-loss provision fell 13.6% from a year earlier, to $29.8 million. Nonperforming assets, which somewhat hindered the company's growth in past quarters, fell 15% from a year earlier, to $385.6 million, or 3.11% of total assets.