PrivateBancorp (PVTB) in Chicago reported first-quarter earnings of $10.8 million, up 44% from a year earlier, as credit costs fell and the company collected more fees.
The $12.6 billion-asset company said that its earnings per share climbed 50%, to 15 cents, three cents better than estimates of analysts polled by Thomson Reuters.
The provision for loan losses was $27.7 million, down 26% from a year earlier and 12% from the fourth quarter. Meanwhile, the company's nonperforming assets declined 21% from a year earlier to $356.7 million, or 2.83% of total assets. Such assets totaled $385.6 million at the end of 2011.
Brad Milsaps, an analyst at Sandler O'Neill, said that while nonperforming loans decreased, troubled debt restructurings increased. By his calculation, nonperforming assets plus troubled-debt restructurings totaled $493.2 million, up 1.44% from year-end. Still, he said he was pleased with the company's performance and put his estimates under review.
Investors were also happy with the results. In heavy trading, PrivateBancorp's shares were up nearly 7% late Tuesday, to $16.04.
"Overall it was a solid quarter for [PrivateBancorp] considering the upside surprise and improvement in pre-credit cost earnings," Milsaps wrote in a research note Tuesday. "We had hoped for more meaningful improvement in asset quality, but we are also encouraged that asset quality did not meaningfully deteriorate."
The company's earnings were also lifted by strong noninterest income, which totaled $27.5 million, up 16.5% from a year earlier: mortgage banking revenue increased 90% to $2.6 million; capital markets products made $7.3 million, up 63%; and treasury management fees totaled $5.2 million, up 19%.
Net interest income was up 2% to $104.4 million. It said in a press release that decreased funding costs and increased loans have managed to offset declining yields within its investment portfolio.
PrivateBancorp, which has focused primarily on commercial and industrial lending since late 2007, said in the release that it grew loans $213.7 million in the quarter, up 2.3% from year-end.