PrivateBancorp reports wider loss; shares fall

PrivateBancorp says loan losses widened loss in third quarter; shares tumble

• On 2:48 pm EDT, Monday October 26, 2009

NEW YORK (AP) -- Shares of PrivateBancorp Inc. tumbled Monday after the community bank said its loss widened in the third quarter as a result of its deteriorating credit portfolio, especially its commercial real estate.

PrivateBancorp stock fell $6.18, or 32 percent, to $12.85. The company, based in Milwaukee, also announced a $175 million public offering of its common stock. Proceeds will be used to capitalize the company's banks and for general corporate purposes, PrivateBancorp said.

For the three months ending Sept. 30, the company lost $31.2 million, or 68 cents per share. That compared with a loss of $7.8 million, or 25 cents per share, in the year-ago period.

Quarterly revenue was $101.2 million, up 55 percent from $65.2 million a year ago. Analysts polled by Thomson Reuters expected a loss of 8 cents per share on revenue of $98.4 million.

Net charge-offs on its loans increased to $37.3 million in the third quarter, compared with $12.6 million the same time a year ago.

As a result of the continuing deterioration of credit quality, the company's third-quarter provision for loan losses was $90 million, compared with $30.2 million a year ago. The total allowance for loan losses of $192.8 million translated to 2.14 percent of total loans. A year ago, that figure was 1.37 percent of loans.

The company said it expects increasing levels of non-performing assets for the next several quarters. The trends in the credit portfolio will remain weak due to the underperforming commercial real estate sector and the generally soft economic environment, it said.

PrivateBancorp also named C. Brant Ahrens its chief operating officer. Ahrens replaces John B. Williams, who continues as chairman of The PrivateBank Milwaukee.

Ahrens most recently served as chief strategy and marketing officer. He will continue overseeing those departments and will add oversight of the human resources, operations and information technology groups to his responsibilities.

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