2. PrivateBancorp

Company Profile

Shares of PrivateBancorp ( PVTB) of Chicago closed at $12.49 Thursday, returning 23% over the previous year.

The company acquired the failed Founders Bank of Worth, Ill, in July 2009.

Income Statement

Net income available to common shareholders for the third quarter was $4.5 million, or 6 cents a share, following a loss of $818 thousand, or a penny a share, the previous quarter and a net loss to common shareholders of $31.2 million, or 68 cents a share, a year earlier.

The third-quarter provision for loan losses declined to $41.4 million from $45.4 million in the second quarter and $90 million during the third quarter of 2009. Third-quarter net charge-offs totaled $49.1 million, meaning the company released $7.7 million in loan loss reserves.

The net interest margin was 3.31% compared to 3.41% in the second quarter and 3.09% a year earlier.

Following the company's third-quarter earnings release, John Rodis lowed his rating on PrivateBancorp's shares to neutral, saying that loan quality remained "challenging and total NPAs (including restructured loans) increased 18%," adding that while his firm remains "constructive on the shares and think they still have some room to the upside our revised price target no longer warrants a buy rating."

Balance Sheet

Total assets were $12.6 billion as of September 30 and the nonperforming 3.67% of total assets, rising from 3.48% the previous quarter and 3.29% a year earlier. The third-quarter net charge-off ratio was 2.17% and reserves covered 2.48% of total loans.

PrivateBancorp owes $243.8 million in TARP money. The company reported a Tier 1 leverage ratio of 10.71%, a total risk-based capital ratio of 14.40% and a tangible common equity ratio of 7.17% as of September 30. Rodis said capital levels were solid, also saying "it does not appear the Company is in a hurry to repay TARP proceeds at this time."

Stock Ratios

The shares trade just below tangible book value according to SNL Financial and for 10.6 times the consensus earnings estimate of $1.14 for 2012.

Analyst Ratings

Out of 16 analysts covering PrivateBancorp, five rate the shares a buy, while the other 11 all recommend investors hold the shares. Based on the consensus target of $14.80 among analysts polled by Thomson Reuters, the shares have 16% upside potential.

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