Monday, October 27, 2014

Private Bancorp, Inc. Achieves 7th Consecutive Earnings Beat with Q3 2014 Results

The Private Bank recorded EPS of $0.51, beating estimates by $0.03­, with 21% in EPS YoY.  The stock reacted positively and increased by 3.94% on the day. Net revenue grew 10% YoY, mostly driven by sustained growth in earning assets and non-interest income but partially offset by increasing expenses. Operating profit for the quarter was $70.4 MM, up 11% YoY and up 4% from the prior quarter.  President and CEO, Larry D. Richman, announced the reason for Private Bancorp’s impressive net income of 40.5 million was due in part to “building quality client relationships”.

Net-interest income grew to 116.8MM (up 10% YoY), a result of higher average loan balances, especially in the commercial real estate area.  The amount of total loans increased to 11.5 billion, specifically from growth seen within the commercial real estate and industrial area of lending.  Private Bancorp’s net interest margin improved 5 bps to 3.23%.
Non-interest income for the quarter was 30.7MM, driven by growth in treasury management income, syndication fees, and deposit service charges. These increases were partially offset by growing employee salaries and compensation benefits, marketing, insurance, and loan and collection expenses. Total non-interest expenses for the quarter totaled $77.8MM.

Improving credit quality is positively reflected in the earnings report with net charge-offs decreasing to $88,000 for the quarter, down from $2.3MM in 2Q14. Non-performing assets decreased 39% YoY.  Overall, it was a strong quarter for Private Bancorp demonstrated through continued growth in their top line in addition to a strengthening balance sheet. However, concern over weak global economic growth and persistent low interest rates may continue to restrict the company’s future financial performance.

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