UPDATE 3-PrivateBancorp Q1 loss widens; shares slump

Mon Apr 26, 2010 2:00pm EDT

* Q1 loss $0.35/shr vs est loss $0.20/shr

* Provisions for loan losses rise four-fold

* Net charge-offs soar to $56.9 mln vs $3.5 mln last year

* Says looking at FDIC deals

* Shares down 16 pct (Adds analyst comments, conference call details, updates stock activity)

By Abhinav Sharma

BANGALORE, April 26 (Reuters) - PrivateBancorp Inc (PVTB.O) posted a wider-than-expected first-quarter loss as souring commercial real estate loans forced the lender to quadruple its provisioning, sending its shares down about 16 percent.

Shares of the Chicago-based lender were down $2.52 at $14.55 Monday afternoon on Nasdaq. They touched a low of $14.42 earlier in the session.

"Since PrivateBancorp had a strong rally on Friday, and reported lower than consensus estimates today, the stock price is reflecting that," Oppenheimer analyst Terry McEvoy said.

PrivateBancorp and other Chicago banks, including Wintrust Financial Corp (WTFC.O) and MB Financial Inc (MBFI.O), had risen on Friday after the news of the failure of seven banks in the area, McEvoy said.

On the conference call with analysts, the company declined to comment on whether it bid on any of the seven failed banks, but said "nothing in that group seems to fit."

The company said it continues to look for FDIC-assisted deals and will consider them if they are strategic and fit its business plan.

PrivateBancorp provides personalized financial services primarily to entrepreneurial and middle-market companies, affluent individuals, wealthy families, professionals, entrepreneurs and real estate investors.

For the first quarter, net charge-offs increased to $56.9 million from $3.5 million a year ago, while net charge-offs related to its commercial real estate and construction loans stood at $31.9 million.

"Unemployment continues to be high with no clear signs that it will change in the short term. As a result, demand for commercial real estate space remains low," Chief Executive Larry Richman said on a post-earnings call.

Commercial real estate will remain a "very illiquid" market, until rental rates go up, and financing resumes, the CEO added.

Net loss attributable to common shareholders was $24.3 million, or 35 cents a share, compared with a profit of $4.8 million, or 14 cents a share, a year ago.

Analysts on average had expected a loss of 20 cents a share, excluding items, according to Thomson Reuters I/B/E/S.

Provisions for loan losses were increased to $72.5 million from $17.8 million.

Net interest income rose to $98.3 million from $63.9 million. (Reporting by Abhinav Sharma and Jochelle Mendonca in Bangalore; Editing by Anne Pallivathuckal, Ratul Ray Chaudhuri)

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