PrivateBancorp (PVTB) in Chicago posted higher quarterly earnings because of improved credit quality and lower expenses.
The $14.1 billion-asset company's earnings rose 69% from a year earlier, to $33.7 million. Earnings per share of 43 cents beat the average estimate of analysts polled by Bloomberg by 2 cents.
Noninterest expense fell 7% from a year earlier, to $75.8 million. PrivateBancorp trimmed nearly $6 million from expenses by cutting costs tied to foreclosures and compensation.
Improved loan recoveries and credit quality also played a big role in increasing the company's quarterly profits. PrivateBancorp slashed its loan-loss provision by 61% from a year earlier, to $4.9 million. Net chargeoffs fell 59% from the fourth quarter of 2012, to $7.3 million.
Net interest income climbed 3% from a year earlier, to $108.5 million, because of higher revenue from loans and securities. The company's net interest margin expanded 2 basis points from a year earlier, to 3.18%. PrivateBancorp benefited by repaying $120 million in subordinated debt during the quarter.
A 10% decline in noninterest income from a year earlier, to $26.7 million, partially offset gains elsewhere. The company attributed the decrease to a dip in mortgage financing activity.