PrivateBancorp’s stock up on smaller 2Q loss

By Becky Yerak
Posted July 27, 2010 at 11:47 a.m.

PrivateBancorp Inc. stock is up 12.6 percent, to $11.94 a share, in mid-day trading as the Chicago-based parent of PrivateBank posted a narrower-than-expected second-quarter loss and sounded slightly more positive about the economy than one of its rivals did last week.

“The economy is growing but the recovery will be slow and uneven,” Chief Executive Larry Richman said in an earnings conference call. But “I do believe the real estate portion of the economy remains very slow and weak.”
Last week, Mitch Feiger, chief executive of MB Financial, which reported lower-than-expected profits, said the economy will remain weak and volatile well into 2011 and possibly into 2012.

MB, which has been the most aggressive Chicago bank about buying failed institutions, also said last week that there’ll continue to be a high rate of bank failures, and that it can do more deals.

PrivateBancorp has done just one –¬† Founders Bank about a year ago.

PrivateBancorp continues to look at failed-bank deals brokered by the Federal Deposit Insurance Corp., but said its strategy is mostly focused on “organic” growth, or opportunities through its existing business.

Richman also noted that pricing was getting more competitive in the market, and reiterated that PrivateBancorp is in no rush to repay the money it borrowed under the Treasury’s Troubled Asset Relief Program until it becomes more confident that the economy is stabilizing and until regulators’ capital demands on banks becomes more¬† certain.

PrivateBancorp went on a growth spurt starting in late 2007 after dozens of former LaSalle Bank lenders joined the company after LaSalle was bought by Bank of America.

PrivateBancorp’s growth has cooled since it began hitting a rough patch on credit quality in the second half of 2009. Total assets were $12.6 billion at June 30, down from $11 billion at June 30, 2009, and $12.8 billion at March 31, 2010.

Total loans remained effectively flat at $8.9 billion at the end of the second quarter 2010, compared to $8.7 billion at the end of the second quarter 2009 and $8.9 billion at March 31, 2010.

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