For PrivateBancorp Inc. in Chicago, hiring LaSalle Bank's former president and 56 managing directors was not cheap.
The $5.1 billion-asset company lost $15.1 million, or 68 cents per diluted share, in the fourth quarter, compared with a profit of $9.1 million, or 42 cents per diluted share, a year earlier.
On Monday, it attributed the loss to costs associated with hiring dozens of middle-market commercial bankers, most of whom came from LaSalle after Bank of America Corp. bought it in October from ABN Amro Holding NV.
PrivateBancorp reported $13.7 million of sign-up bonuses and $2.5 million of professional and legal fees for recruitment and hiring.
The added talent helped PrivateBancorp increase its loans by 12% in the quarter, but Terry McEvoy, an analyst at Oppenheimer & Co., said it also will need to focus its attention on deposit growth.
"The other side of the business needs to experience similar growth," Mr. McEvoy said. The unbalanced growth is "putting pressure on the margin."
Beyond the hype of the plan to capitalize on LaSalle-related market disruption, PrivateBancorp's fourth-quarter results were "reflective of any other Midwest bank" with increasing bad commercial real estate loans, he said.
The company raised its loan-loss provision for the quarter to $10.2 million, versus $707,000 a year earlier. The increase was driven mostly by the expanding loan portfolio, but it also was caused partially by an increase in nonperforming assets. For the year, nonperforming assets totaled $48.3 million, compared with $8.75 million for 2006.
By late Monday, PrivateBancorp's shares had risen 4.5% from Friday's close, to $34.06.
