Increase in revenues and an impressive credit quality drove
) to report yet another strong quarter. Fourth-quarter 2013
earnings per share of 43 cents outpaced the Zacks Consensus
Estimate by 3 cents. Moreover, earnings compared favorably with
the prior-year quarter figure of 26 cents.
For full-year 2013, PrivateBancorp's earnings per share of
$1.57 came ahead of both the Zacks Consensus Estimate of $1.48
and the prior-year figure of 88 cents. Notably, the company
witnessed a positive earning surprise in all four quarters of
Shares of PrivateBancorp witnessed negative price movement in
intraday trading, signifying that investors are not confident
with the company's results. However, this could also be fallout
of the negative sentiment running in the market.
PrivateBancorp's impressive results were driven by increased
net interest income, lower expenses and lesser provision for
credit losses. Further, improved profitability ratios and a
better asset quality were among other positives. However, a
decline in non-interest income acted as the headwind for the
The company's net income applicable to shareholders of $33.7
million in the reported quarter reflects a significant increase
of 68.5% from the year-ago quarter. Also, for 2013 it stood at
$122.9 million, marking a solid year-over-year increase of
Performance in Detail
PrivateBancorp's net revenue in the reported quarter was
$136.0 million, up 1% year over year. Moreover, the revenue
figure surpassed the Zacks Consensus Estimate of $134.0
For 2013, the company's net revenue stood at $538.3 billion,
up 1% year over year. Moreover, the revenue figure surpassed the
Zacks Consensus Estimate of $530.0 million.
PrivateBancorp's full-year operating profit increased 14% year
over year to 235.0 million owing to reduced costs related to net
foreclosed property and share-based compensation.
The company's net interest income (NII) stood $108.5 million,
up 3% from the prior-year quarter. Net interest margin (NIM)
improved 2 basis points (bps) to 3.18%.
The company's non-interest income dropped 9.2% year over year
to $26.7 million primarily due to decreased mortgage banking
income and syndication fee. Notably, the dismal mortgage market
scenario affected the company as well as it witnessed declining
mortgage revenue in all four quarters of 2013.
However, non-interest expenses at PrivateBancorp fell 7% year
over year to $75.8 million. The decline came on the back of lower
foreclosure expenses and share based compensation costs, partly
offset by a higher provision for unfunded commitments.
Efficiency rate was 55.7%, down from 60.2% in the year-ago
quarter. A decline in efficiency ratio reflects improved
Assets under management and administration (AUMA) increased
10% year over year to $5.7 billion.
As of Dec 31, 2013 net loans increased 5% year over year to
$10.5 billion. However, total deposits fell 1.3% year over year
to $12.0 billion.
Credit quality metrics exhibited a marked improvement with net
charge-offs declining 59% year over to $7.3 million in the
reported quarter. Provision for loan losses declined 61.1% year
over year to $4.9 million.
Further, non-performing assets stood at $122.8 million,
reflecting a solid decrease of 44% from the prior-year quarter,
while allowance for loan losses as a percentage of total loans
declined 25 bps to 1.34% from 1.59% in the year-ago quarter.
Capital Ratios & Profitability Ratios
PrivateBancorp's capital ratios continued to improve. As of
Dec 31, 2013, total risk-based capital increased 13 bps year over
year to 13.30% and tier 1 risk-based capital stood at 11.08%,
increasing 57 bps year over year.
Return on average common equity came in at 10.28%, an increase
of 364 bps from the prior-year quarter. Return on average assets
stood at 0.96%, rising 29 bps from 0.67% in the year-ago
PrivateBancorp's results reflect an impressive year for the
company. Alongside, this Midwest bank is expected to perform well
in the upcoming quarters, if it can sustain this trend.
However, we remain cautious as the stressed operating
environment, slow economic recovery and a low interest rate
environment can put considerable pressure on its top line in the
PrivateBancorp currently carries a Zacks Rank #3 (Hold).
State Street Corp.
) is scheduled to report fourth-quarter results on Jan 24, while
Fifth Third Bancorp
) are expected to release results on Jan 23.
FIFTH THIRD BK (FITB): Free Stock Analysis
KEYCORP NEW (KEY): Free Stock Analysis Report
PRIVATEBANCORP (PVTB): Free Stock Analysis
STATE ST CORP (STT): Free Stock Analysis
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