PrivateBancorp Returns To Profitability In 1Q

Non-interest income, or money derived from fees and other charges, more than doubled to $23.6 million in the first quarter, from $8.5 million during the same quarter last year. Non-interest income surged thanks to growth in income from capital markets products, which increased to $11.2 million from $391,000 last year. The growth was due to clients increasing their use of derivatives for interest rate management, the company said .

Despite the improved performance, PrivateBancorp's president and chief executive Larry Richman cautioned that 2009 will continue to present challenges because of the weak economy. In particular, credit quality will remain a challenge, Richman said in a statement. Credit quality has been a challenge for nearly all banks as unemployment rates continue to rise and customers continue to fall behind on repaying loans.

While most banks are still sharply increasing loan-loss provisions, PrivateBancorp's moved only slightly higher in the first quarter. The Chicago-based bank's provision for loan losses increased to $17.8 million, from $17.1 million during the first quarter last year. The bank, however, took $119.3 million in provisions during the fourth quarter because of mounting loan losses.

In premarket activity, shares of PrivateBancorp climbed $1.20, or 7 percent, to $18.30. The stock has ranged from $9.08 to $49.50 over the past year.