Taylor Capital Reports Fourth Quarter and Full Year Results

Reduction in Nonperforming Loans, Increased Revenue, Launches Residential Mortgage Business

Jan 27, 2010, 08:00 ET from Taylor Capital Group, Inc.

ROSEMONT, Ill., Jan. 27 /PRNewswire-FirstCall/ -- Taylor Capital Group, Inc. (the “Company”) (Nasdaq: TAYC), the parent company of Cole Taylor Bank (the “Bank”), today reported results for the fourth quarter of 2009 and the year ended December 31, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060605/CGM055LOGO)

For the three months ended December 31, 2009, the Company reported a net loss applicable to common stockholders of $5.9 million, or $0.56 per diluted common share, compared to a net loss applicable to common stockholders of $5.3 million, or $0.51 per diluted share common share, for the third quarter of 2009.  

For the year ended December 31, 2009, the Company reported a net loss applicable to common stockholders of $43.0 million, or $4.10 per diluted common share, compared to a net loss applicable to common stockholders of $143.4 million, or $13.72 per diluted common share, for the year ended December 31, 2008.

Financial Highlights

  • Total revenue (net interest income plus noninterest income excluding securities gains or losses) for the fourth quarter of 2009 was $36.6 million, up from $35.4 million for the third quarter of 2009.  For the full year 2009, the Company’s total revenue was $138.9 million as compared with $107.2 million for 2008.
  • Net interest income for the fourth quarter rose to $32.8 million, up from $32.4 million in the third quarter. The Company’s net interest margin for the fourth quarter was 3.10%, up from 2.92% for the third quarter.  Net interest income for the full year 2009 totaled $122.9 million as compared with $92.4 million for 2008.  The net interest margin for the year ended December 31, 2009 was 2.84%, up from 2.55% in 2008.
  • In-market deposits totaled $2.4 billion at December 31, 2009, up $393.3 million from $2.0 billion at December 31, 2008.  Out-of-market deposits declined to $570.4 million at year end 2009, down 49% from the December 31, 2008, total of $1.12 billion.  As a percent of total deposits, in-market deposits represented 81% of year end 2009 deposits, up from 64% at December 31, 2008.
  • The Company’s asset quality indicators continued to show improvement:
    • Nonperforming loans declined to $141.5 million at year end, down $34.6 million, or 20%, from the $176.0 million reported at September 30, 2009, and down $58.9 million, or 29%, from $200.4 million balance on December 31, 2008.
    • Nonperforming assets were $167.7 million at December 31, 2009, down $28.6 million from the $196.3 million reported at September 30, 2009, and down $45.9 million from the December 31, 2008 total of $213.6 million.
    • The allowance for loan losses as a percent of total loans increased to 3.50% at year end, up from 3.44% at September 30, 2009, but down from 3.98% at December 31, 2008.
    • The allowance for loan losses as a percent of nonperforming loans rose to 75.06% at December 31, 2009, up from 60.86% at September 30, 2009, and up from 64.15% at December 31, 2008.
  • The fourth quarter provision for loan losses rose to $19.0 million, up from $15.5 million for the third quarter of 2009.  For the full year 2009, the loan loss provision was $89.6 million, down $54.5 million from the 2008 full year total of $144.2 million.
  • The Company’s capital ratios remain substantially above all regulatory requirements for well-capitalized banks.

“In the face of the most challenging period for our industry in two generations, our Company has gone through a remarkable transformation,” said Taylor Capital Group Chairman Bruce W. Taylor. “The effects of the changes that we have made, and the efforts of our staff, have been clearly positive in 2009.  As a result, we enter 2010 with a solid platform for growth.”

“I’m encouraged by many aspects of our 2009 performance, but disappointed with the high levels of loan loss provisions which led to a loss for the year,” said Mark A. Hoppe, President and Chief Executive Officer of Cole Taylor Bank.  “Total revenue increased every quarter of this past year.  Our service charge and fee income is up as a direct result of the growth in new commercial banking clients over the past two years.  Our focus on expense control is paying off, and we expect that the addition of our new residential mortgage origination unit will serve to increase fee income and contribute to the Company’s growth. We’ve also seen a continuation of positive trends in asset quality, including reductions in nonperforming loans.  While there are positive signs that the economy is improving, we expect continued market challenges for the coming year.  We remain confident that our strategy of becoming a leader in Chicago area business banking is still the right one for our organization and we will continue to execute against that strategy.”

Revenue

For the fourth quarter of 2009, the Company’s net interest income increased to $32.8 million, up from $32.4 million reported for the third quarter of 2009.  For the year ended December 31, 2009, net interest income was $122.9 million, up 33% from $92.4 million reported for the year ended December 31, 2008.

The tax equivalent net interest margin was 3.10% for the fourth quarter of 2009, up from 2.92% in the third quarter of 2009.  For the full year 2009, the net interest margin was 2.84%, up from 2.55% for 2008.  While the Company’s yield on earning assets declined during the year, that decline was more than offset by a lower cost of funds as the Company increased its noninterest bearing deposits (primarily commercial relationship demand deposits) and decreased its balances of brokered and other out-of-market deposits.

Noninterest income for the fourth quarter of 2009 totaled $12.7 million, up from $3.4 million in the prior quarter, primarily attributable to an $8.6 million increase in gains on sales of investment securities in the fourth quarter.  For the year ended December 31, 2009, noninterest income totaled $33.6 million, up from $12.4 million for the year ended December 31, 2008.  The full year increase was due to $17.6 million in securities gains in 2009 as compared with securities losses of $2.4 million for 2008 as the Company repositioned its balance sheet and took advantage of changes in the rate environment.  Service charge income increased from $9.1 million in full year 2008 to $11.3 million for full year 2009, primarily due to increased commercial account activity.  For 2009, the Company recorded a $2.0 million loss on mortgage banking activities as a result of losses on hedges placed on single-family mortgages held for sale.

Expense

Noninterest expense totaled $30.2 million for the fourth quarter of 2009 as compared to $22.5 million for the third quarter of 2009.  The higher level of noninterest expense was primarily attributable to a $6.2 million rise in non-performing asset expense which was caused by additional write-downs on loans held for sale and other loan-related assets.  For the year ended December 31, 2009, noninterest expense totaled $97.6 million, up from $93.4 million for the twelve months ended December 31, 2008.  The 2009 increase in noninterest expense was limited to $4.2 million despite increases of $7.7 million in FDIC assessments and $8.2 million in non-performing asset expenses and related legal fees.

Balance Sheet

At December 31, 2009, the Company’s assets totaled $4.4 billion, as compared with $4.5 billion at September 30, 2009 and $4.4 billion at December 31, 2008.  

In 2009, the Company continued to reposition its loan portfolio.  Total loans at December 31, 2009, declined to $2.9 billion from $3.0 billion at September 30, 2009 and $3.1 billion at December 31, 2008.  As the result of ongoing new business development efforts, the Company added over 200 new commercial client relationships and funded $654 million in new loans in 2009.  That growth was offset as the Company reduced its exposure in industries and sectors it no longer considered economically desirable.  The loan portfolio also declined as a result of charge–offs and the historically low line usage by its customers, the result of continued ongoing difficult economic conditions.  Loans held for sale at December 31, 2009, totaled $81.9 million, down from $102.8 million at September 30, 2009, with the reduction primarily due to loan sales and additional write-downs during the quarter.

At December 31, 2009, the Company’s total deposits were $3.0 billion, down from $3.1 billion at both September 30, 2009 and December 31, 2008.  For the fourth quarter of 2009, average noninterest bearing deposits (primarily commercial demand deposits) rose $193.9 million, or 43%, from the fourth quarter of 2008.  Average in-market deposits increased by $336.8 million, or 17%, from the fourth quarter of 2008 to the fourth quarter of 2009.  The Company’s ongoing efforts to reduce its reliance on out-of-market and brokered deposits resulted in a decline in average out-of-market deposits of $561.1 million, or 46%, from the fourth quarter of 2008 to the fourth quarter of 2009.

Credit Quality

At December 31, 2009, total non-performing assets decreased to $167.7 million from the $196.3 million reported at September 30, 2009, and down from the December 31, 2008, total of $213.6 million.  

Nonaccrual loans decreased to $141.4 million at December 31, 2009, from $163.8 million at September 30, 2009, and down from $200.2 million at December 31, 2008.  The reduction in nonaccrual loans in both the fourth quarter and full year 2009 primarily resulted from declines in commercial and industrial nonaccruals as well as residential construction and land nonaccruals.  These declines were attributable to a combination of repayments, charge-offs and transfers to other real estate owned along with reduced levels of loans moving to nonaccrual status.  Loans past due 90 days or more but still accruing interest declined to $59,000 at December 31, 2009, down from $12.2 million at September 30, 2009, and $153,000 at December 31, 2008.  The September 30, 2009, amount was largely the result of one large commercial loan that was past due at that date.  Other real estate owned rose to $26.2 million at December 31, 2009, up from $20.3 million at the end of the third quarter 2009 and up from $13.2 million at year end 2008.  Loans contractually past due 30 through 89 days at December 31, 2009 were $13.2 million, down from $18.3 million at September 30, 2009 and $25.3 million at December 31, 2008.

The provision for loan losses for the fourth quarter of 2009 was $19.0 million, up from $15.5 million recorded for the third quarter of 2009.  For the full year 2009, the provision for loan losses was $89.6 million, down from $144.2 million for 2008.

The allowance for loan losses was $106.2 million at December 31, 2009, compared to $107.1 million at September 30, 2009 and $128.5 million at December 31, 2008.  As a percent of loans, the allowance increased to 3.50% at December 31, 2009, up from 3.44% at September 30, 2009, but down from 3.98% at December 31, 2008.  As a percent of nonperforming loans, the allowance was 75.06% at December 31, 2009, up from 60.86% at September 30, 2009 and 64.15% at December 31, 2008.

Capital

At December 31, 2009, the Company’s Tier I Risk Based Capital ratio was 9.79%, while its Total Risk Based Capital ratio was 12.72%.  Both ratios substantially exceed all regulatory requirements for well-capitalized banks, which are 6.00% for Tier I Risk Based Capital and 10.00% for Total Risk Based Capital.  The Company’s Tier I Capital to Average Assets leverage ratio at December 31, 2009 was 7.60%.

About Taylor Capital Group, Inc.  (NASDAQ:  TAYC)

Taylor Capital Group, Inc. is a $4.4 billion bank holding company for Cole Taylor Bank, a Chicago-based commercial bank specializing in serving the banking needs of closely held businesses and the people who own and manage them. Cole Taylor is a member of the FDIC and an Equal Housing Lender.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements that reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using words including "may," “might”, “plan”, “prudent”, “potential”, “should”, "will," "expect," "anticipate," "believe," "intend," "could" and "estimate" and similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities in 2010 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation: the effect on our profitability if interest rates fluctuate as well as the effect of our customers’ changing use of our deposit products; the possibility that our wholesale funding sources may prove insufficient to replace deposits at maturity and support our growth; the risk that our allowance for loan losses may prove insufficient to absorb probable losses in our loan portfolio; possible volatility in loan charge-offs and recoveries between periods; the decline in residential real estate sales volume and the likely potential for continuing illiquidity in the real estate market, including within the Chicago metropolitan area; the risks associated with the high concentration of commercial real estate loans in our portfolio; the uncertainties in estimating the fair value of developed real estate and undeveloped land in light of declining demand for such assets and continuing illiquidity in the real estate market; the risks associated with management changes, employee turnover and our commercial banking growth initiative, including our expansion of our asset-based lending operations and our entry into new geographical markets; negative developments and disruptions in the credit and lending markets, including the impact of the ongoing credit crisis on our business and on the businesses of our customers as well as other banks and lending institutions with which we have commercial relationships; a continuation of the recent unprecedented volatility in the capital markets; the effectiveness of our hedging transactions and their impact on our future results of operations; the risks associated with implementing our business strategy and managing our growth effectively, including our ability to preserve and access sufficient capital to execute on our strategy; changes in general economic and capital market conditions, interest rates, our debt credit ratings, deposit flows, loan demand, including loan syndication opportunities and competition; changes in legislation or regulatory and accounting principles, policies or guidelines affecting our business; and other economic, competitive, governmental, regulatory and technological factors impacting our operations.

For further information about these and other risks, uncertainties and factors, please review the disclosure included in the section captioned "Risk Factors” in our December 31, 2008 Annual Report on Form 10-K filed with the SEC on March 11, 2009. You should not place undue reliance on any forward-looking statements.  We undertake no obligation to publicly update or revise any forward-looking statements or risk factors, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release.

TAYLOR CAPITAL GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(Unaudited)

Dec. 31,

2009

(Unaudited)  Sept. 30,

2009

Dec. 31,

2008

ASSETS

Cash and cash equivalents                               

$48,469 

$47,533 

$53,012 

Investment securities                                   

1,271,271 

1,306,098 

1,094,594 

Loans held for sale, at lower of cost or market                 

81,853 

102,765 

-- 

Loans, net of allowance for loan losses of  $106,185, $107,132 and $128,548 at December 31, 2009, September 30, 2009 and December 31, 2008, respectively

2,847,290 

2,904,357 

3,104,713 

Premises, leasehold improvements and equipment, net         

15,515 

15,742 

17,124 

Investment in Federal Home Loan Bank and Federal Reserve Bank stock

31,210 

35,741 

29,630 

Other real estate and repossessed assets, net                 

26,231 

20,313 

13,179 

Other assets                                          

81,663 

52,532 

76,637 

Total assets                                             

$4,403,502 

$4,485,081 

$4,388,889 

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Noninterest-bearing                                     

$659,146 

$615,590 

$470,990 

Interest-bearing                                       

2,317,654 

2,437,139 

2,660,056 

Total deposits                                         

2,976,800 

3,052,729 

3,131,046 

Other borrowings                                      

337,669 

327,692 

275,560 

Accrued interest, taxes and other liabilities                   

60,925 

56,440 

71,286 

Notes payable and other advances                         

627,000 

617,000 

462,000 

Junior subordinated debentures                           

86,607 

86,607 

86,607 

Subordinated notes, net                                 

55,695 

55,593 

55,303 

Total liabilities                                        

4,144,696 

4,196,061 

4,081,802 

Stockholders' equity:

Preferred stock, Series A                                

60,000 

60,000 

60,000 

Preferred stock, Series B                                

98,844 

98,474 

97,314 

Common stock                                       

120 

120 

121 

Surplus                                             

226,398 

225,951 

224,872 

Accumulated deficit                                    

(110,617)

(104,708)

(69,294)

Accumulated other comprehensive income, net               

8,697 

33,819 

18,710 

Treasury stock                                       

(24,636)

(24,636)

(24,636)

Total stockholders' equity                               

258,806 

289,020 

307,087 

Total liabilities and stockholders' equity                    

$4,403,502 

$4,485,081 

$4,388,889 

TAYLOR CAPITAL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

For the Three Months Ended

For the Twelve Months Ended

Dec. 31, 2009

Sept. 30, 2009

Dec. 31, 2008

Dec. 31, 2009

Dec. 31, 2008

Interest income:

Interest and fees on loans        

$40,180 

$40,749 

$41,517 

$159,848 

$158,564 

Interest and dividends on investment securities:

Taxable                      

12,515 

13,921 

11,614 

54,694 

38,633 

Tax-exempt                    

1,265 

1,360 

1,443 

5,468 

5,830 

Interest on cash equivalents       

50 

20 

1,421 

Total interest income 

53,965 

56,033 

54,624 

220,030 

204,448 

Interest expense:

Deposits                      

14,253 

16,629 

23,244 

69,164 

88,279 

Other borrowings               

2,226 

2,210 

2,194 

8,844 

9,648 

Notes payable and other advances  

1,601 

1,718 

1,466 

6,557 

5,511 

Junior subordinated debentures     

1,448 

1,477 

1,693 

6,066 

7,013 

Subordinated notes              

1,627 

1,624 

1,613 

6,488 

1,646 

Total interest expense 

21,155 

23,658 

30,210 

97,119 

112,097 

Net interest income  

32,810 

32,375 

24,414 

122,911 

92,351 

Provision for loan losses             

19,002 

15,539 

30,353 

89,611 

144,158 

Net interest income (loss) after provision for loan losses

13,808 

16,836 

(5,939)

33,300 

(51,807)

Noninterest income:

Service charges                 

2,825 

2,892 

2,459 

11,306 

9,136 

Trust and investment management fees

356 

332 

842 

1,697 

3,578 

Mortgage banking activities         

(656)

(1,351)

-- 

(1,961)

23 

Gain (loss) on investment securities   

8,958 

378 

(2,399)

17,595 

(2,399)

Other derivative income          

19 

108 

830 

1,399 

1,936 

Other noninterest income         

1,233 

1,017 

(647)

3,555 

163 

Total noninterest income   

12,735 

3,376 

1,085 

33,591 

12,437 

Noninterest expense:

Salaries and employee benefits     

10,938 

10,440 

10,108 

42,914 

47,855 

Occupancy of premises           

2,067 

2,017 

2,039 

8,146 

7,812 

Furniture and equipment         

605 

531 

596 

2,230 

3,094 

Non–performing asset expense     

8,453 

2,295 

(166)

11,726 

4,711 

FDIC assessment               

2,167 

2,314 

796 

10,380 

2,687 

Legal fees, net                  

1,736 

1,430 

1,821 

5,961 

5,016 

Early extinguishment of debt 

-- 

-- 

894 

527 

2,500 

Other noninterest expense        

4,253 

3,489 

5,542 

15,723 

19,695 

Total noninterest expense   

30,219 

22,516 

21,630 

97,607 

93,370 

Loss before income taxes            

(3,676)

(2,304)

(26,484)

(30,716)

(132,740)

Income tax expense (benefit)          

(647)

144 

(11,648)

834 

(8,212)

                              Net loss           

(3,029)

(2,448)

(14,836)

(31,550)

(124,528)

Preferred dividends and discounts       

(2,880)

(2,873)

(2,150)

(11,483)

(2,150)

Implied non-cash preferred dividend     

-- 

-- 

-- 

-- 

(16,680)

Net loss applicable to common stockholders

$(5,909)

$(5,321)

$(16,986)

$(43,033)

$(143,358)

Basic loss per common share          

$(0.56)

$(0.51)

$(1.62)

$(4.10)

$(13.72)

Diluted loss per common share         

(0.56)

(0.51)

(1.62)

(4.10)

(13.72)

TAYLOR CAPITAL GROUP, INC.

COMPOSITION OF LOAN PORTFOLIO (unaudited)

(dollars in thousands)

The following table presents the composition of the Company's loan portfolio as of the dates indicated:

December 31, 2009

September 30, 2009

December 31, 2008

Loans:

Balance

Percent of Gross Loans

Balance

Percent of Gross Loans

Balance

Percent of Gross Loans

Commercial and industrial   

$1,264,369 

42.8%

$1,292,091   

42.9%

$1,485,673   

45.9%

Commercial real estate secured

1,171,777 

39.7   

1,156,114   

38.4   

1,058,930   

32.8   

Residential construction & land

221,859 

7.5   

247,386   

8.2   

349,998   

10.8   

Commercial construction & land

142,584 

4.8   

160,534   

5.3   

181,454   

5.6   

     Total commercial loans

2,800,589 

94.8   

2,856,125   

94.8   

3,076,055   

95.1   

Consumer-oriented loans   

152,892 

5.2   

155,372   

5.2   

157,222   

4.9   

Gross loans 

2,953,481 

100.0%

3,011,497   

100.0%

3,233,277   

100.0%

Less:  Unearned discount   

(6)

(8)  

(16)  

Total loans 

2,953,475 

3,011,489   

3,233,261   

Less:  Loan loss allowance  

(106,185)

(107,132)  

(128,548)  

Net loans   

$2,847,290 

$2,904,357   

$3,104,713   

Loans Held for Sale        

$81,853 

$102,765   

--   

The following tables provide details of the Company's commercial real estate and residential construction and land portfolios:

December 31, 2009

September 30, 2009

December 31, 2008

Commercial real estate secured:

Balance

Percent of Total

Balance

Percent of Total

Balance

Percent of Total

Commercial non-owner occupied:

 Retail strip centers or malls   

$211,817   

18.1%

$212,011   

18.3%

$206,637   

19.5%

 Office/mixed use property    

149,951   

12.8   

153,333   

13.3   

145,978   

13.8   

 Commercial properties       

144,745   

12.3   

134,785   

11.7   

130,227   

12.3   

 Specialized – other          

121,530   

10.4   

121,983   

10.6   

92,193   

8.7   

 Other commercial properties  

64,602   

5.5   

70,670   

6.1   

61,478   

5.8   

Commercial non-owner  occupied

692,645   

59.1   

692,782   

60.0   

636,513   

60.1   

Commercial owner-occupied 

334,744   

28.6   

316,124   

27.3   

270,346   

25.5   

Multi-family properties     

144,388   

12.3   

147,208   

12.7   

152,071   

14.4   

    Total commercial real estate

       secured              

$1,171,777 

100.0%

$1,156,114   

100.0%

$1,058,930   

100.0%

Residential construction & land:

Residential construction       

$173,432   

78.2%

$189,361   

76.5%

$275,556

78.7%

Land                         

48,427   

21.8   

58,025   

23.5   

74,442

21.3   

  Total residential construction  

      and land               

$221,859   

100.0%

$247,386   

100.0%

$349,998

100.0%

TAYLOR CAPITAL GROUP, INC.

CREDIT QUALITY (unaudited)

(dollars in thousands)

At or for the Three Months Ended

Dec. 31,

2009

Sept. 30,

2009

Dec. 31,

2008

Nonperforming Assets:

Loans contractually past due 90 days or more but still accruing interest

$59   

$12,190   

$153   

Nonaccrual loans:

Commercial and industrial                         

26,687   

31,191   

42,263   

Commercial real estate secured                    

36,420   

36,824   

23,068   

Residential construction and land                 

62,795   

78,224   

114,160   

Commercial construction and land                 

4,245   

7,854   

14,934   

All other loan types                             

11,256   

9,737   

5,802   

Total nonaccrual loans                           

141,403   

163,830   

200,227   

    Total nonperforming loans                     

141,462   

176,020   

200,380   

Other real estate owned and repossessed assets     

26,231   

20,313   

13,179   

Total nonperforming assets                       

$167,693   

$196,333   

$213,559   

Other Credit Quality Information:

Loans contractually past due 30 through 89 days and still accruing

$13,206   

$18,339   

$25,272   

Restructured loans not included in nonperforming assets

1,196   

4,825   

--   

Recorded balance of impaired loans                

141,697   

162,986   

206,705   

Allowance for loan losses related to impaired loans  

33,640   

35,453   

41,451   

Allowance for Loan Losses Summary:

Allowance at beginning of period                

$107,132   

$132,927   

$117,967   

Net (charge-offs) recoveries:

Commercial and commercial real estate              

(7,983)  

(14,091)  

(357)  

Real estate – construction and land                 

(10,384)  

(27,091)  

(19,050)  

Total consumer-oriented loans                     

(1,582)  

(152)  

(365)  

Total net charge-offs                           

(19,949)  

(41,334)  

(19,772)  

Provision for loan losses                       

19,002   

15,539   

30,353   

Allowance at end of period                     

$106,185   

$107,132   

$128,548   

Key Credit Ratios:

Nonperforming loans to total loans                 

4.66%

5.65%

6.20%

Nonperforming assets to total loans plus repossessed property

5.48%

6.26%

6.58%

Nonperforming assets to total assets               

3.81%

4.38%

4.87%

Annualized net charge-offs to average total loans    

2.59%

5.20%

2.47%

Allowance to total loans at end of period           

3.50%

3.44%

3.98%

Allowance to nonperforming loans                 

75.06%

60.86%

64.15%

30 – 89 days past due to total loans                

0.44%

0.58%

0.78%

TAYLOR CAPITAL GROUP, INC.

FUNDING LIABILITIES (unaudited)

(dollars in thousands)

The following table presents the distribution of the Company's average deposit account balances for the periods indicated:

For the Quarter Ended

December 31, 2009

September 30, 2009

December 31, 2008

Average Balance

Percent of Deposits

Average Balance

Percent of Deposits

Average Balance

Percent of Deposits

In-market deposits:

    Noninterest-bearing deposits   

$640,590   

21.5%

$598,760   

19.2%

$446,693   

14.0%

    NOW accounts               

224,787   

7.5   

223,386   

7.2   

215,449   

6.7   

    Savings deposits              

41,198   

1.4   

41,839   

1.3   

42,459   

1.3   

    Money market accounts        

451,953   

15.2   

407,298   

13.0   

339,518   

10.6   

    Customer certificates of deposit

768,733   

25.8   

826,911   

26.4   

863,775   

27.0   

    CDARS time deposits         

132,231   

4.4   

154,979   

5.0   

4,229   

0.1   

    Public time deposits         

73,916   

2.5   

76,625   

2.4   

84,532   

2.6   

Total in-market deposits         

2,333,408   

78.3   

2,329,798   

74.5   

1,996,655   

62.3   

Out-of-market deposits:

Brokered money market deposits   

8,601   

0.3   

9,390   

0.3   

86,958   

2.7   

Out-of-local-market certificates of deposit

89,480   

3.0   

99,665   

3.2   

145,679   

4.5   

Brokered certificates of deposit    

549,588   

18.4   

686,868   

22.0   

976,104   

30.5   

Total out-of-market deposits      

647,669   

21.7   

795,923   

25.5   

1,208,741   

37.7   

Total deposits                   

$2,981,077   

100.0%

$3,125,721   

100.0%

$3,205,396   

100.0%

The following table sets forth the period end balances of total deposits as of each of the dates indicated below, as well as categorizes the Company's deposits as "in-market" and "out-of-market" deposits:

Dec. 31, 2009

Sept. 30, 2009

Dec. 31, 2008

In-market deposits:

Noninterest-bearing deposits                

$659,146

$615,590

$470,990

NOW accounts                            

307,025

213,668

218,451

Savings accounts                          

41,479

41,534

42,275

Money market accounts                     

438,080

456,795

320,691

Customer certificates of deposit              

775,663

774,082

870,183

CDARS time deposits                       

116,256

145,889

5,670

Public time deposits                        

68,763

78,090

84,831

 Total in-market deposits                 

2,406,412

2,325,648

2,013,091

Out-of-market deposits:

Brokered money market deposits             

7,338

9,052

73,352

Out-of-local-market certificates of deposit     

79,015

95,990

136,470

Brokered certificates of deposit               

484,035

622,039

908,133

Total out-of-market deposits              

570,388

727,081

1,117,955

Total deposits                             

$2,976,800

$3,052,729

$3,131,046

Taylor Capital Group, Inc.

Summary of Key Financial Data

Dollars in Thousands

Unaudited

2009

2008

Year To Date

Fourth

Third

Second

First

Fourth

Dec. 31,

Quarter

Quarter

Quarter

Quarter

Quarter

2009

2008

Condensed Income Data:

Net interest income

$           32,810 

$                32,375   

$             30,380   

$                27,346   

$             24,414   

$       122,911   

$         92,351   

Provision for loan losses

19,002   

15,539   

39,507   

15,563   

30,353   

89,611   

144,158   

Total noninterest income

12,735   

3,376   

12,137   

5,343   

1,085   

33,591   

12,437   

Total noninterest expense

30,219   

22,516   

23,707   

21,165   

21,630   

97,607   

93,370   

Loss before income taxes

(3,676)  

(2,304)  

(20,697)  

(4,039)  

(26,484)  

(30,716)  

(132,740)  

Income tax expense (benefit)

(647)  

144   

2,558   

(1,221)  

(11,648)  

834   

(8,212)  

Net loss

(3,029)  

(2,448)  

(23,255)  

(2,818)  

(14,836)  

(31,550)  

(124,528)  

Preferred dividends and discounts

(2,880)  

(2,873)  

(2,868)  

(2,862)  

(2,150)  

(11,483)  

(18,830)  

Net loss applicable to common shareholders

$           (5,909) 

$                (5,321)  

$            (26,123)  

$                (5,680)  

$            (16,986)  

$        (43,033)  

$      (143,358)  

Per Share Data:

Basic loss per common share

$             (0.56) 

$                  (0.51)  

$                (2.49)  

$                  (0.54)  

$                (1.62)  

$            (4.10)  

$          (13.72)  

Diluted loss per common share

(0.56)  

(0.51)  

(2.49)  

(0.54)  

(1.62)  

(4.10)  

(13.72)  

Cash dividends per common share

-   

-   

-   

-   

-   

-   

0.10   

Book value per common share

9.02   

11.78   

10.24   

13.85   

13.47   

-   

13.47   

Weighted average shares-basic

10,504,027   

10,502,844   

10,492,789   

10,471,516   

10,458,851   

10,492,911   

10,450,177   

Weighted average shares-diluted

10,504,027   

10,502,844   

10,492,789   

10,471,516   

10,458,851   

10,492,911   

10,450,177   

Shares outstanding-end of period

11,076,707   

11,078,011   

11,081,429   

11,093,349   

11,115,936   

11,076,707   

11,115,936   

Performance Ratios (annualized):

Loss on average assets

-0.28%

-0.22%

-2.04%

-0.25%

-1.39%

-0.70%

-3.27%

Loss on average equity

-4.19%

-3.58%

-30.20%

-3.69%

-24.14%

-10.74%

-51.01%

Efficiency ratio (1)

82.59%

63.65%

67.89%

66.09%

77.53%

70.27%

87.11%

Average Balance Sheet Data (2):

Total assets

$      4,390,123 

$           4,543,191   

$        4,570,534   

$           4,434,293   

$        4,267,048   

$    4,484,575   

$    3,810,987   

Investments

1,220,768   

1,325,722   

1,341,763   

1,150,587   

1,026,848   

1,260,083   

895,361   

Cash equivalents

1,118   

2,637   

527   

2,473   

16,224   

1,688   

64,025   

Loans

3,079,862   

3,180,992   

3,187,740   

3,238,537   

3,203,811   

3,171,373   

2,790,723   

Total interest-earning assets

4,301,748   

4,509,351   

4,530,030   

4,391,597   

4,246,883   

4,433,144   

3,750,109   

Interest-bearing deposits

2,340,487   

2,526,961   

2,580,403   

2,632,961   

2,758,703   

2,519,420   

2,511,820   

Borrowings

1,058,628   

1,074,533   

1,027,010   

909,565   

753,070   

1,017,999   

596,215   

Total interest-bearing liabilities

3,399,115   

3,601,494   

3,607,413   

3,542,526   

3,511,774   

3,537,419   

3,108,035   

Noninterest-bearing deposits

640,590   

598,760   

578,020   

519,187   

446,693   

584,512   

409,322   

Total stockholders' equity

289,178   

273,504   

307,977   

305,111   

245,836   

293,843   

244,147   

Tax Equivalent Net Interest Margin:

Net interest income as stated

$           32,810 

$                32,375   

$             30,380   

$                27,346   

$             24,414   

$       122,911   

$         92,351   

Add: Tax equivalent adjust.-investment (3)

681   

732   

763   

768   

777   

2,944   

3,140   

          Tax equivalent adjust.-loans (3)

29   

29   

29   

29   

32   

115   

126   

Tax equivalent net interest income

$           33,520 

$                33,136   

$             31,172   

$                28,143   

$             25,223   

$       125,970   

$         95,617   

Net interest margin without tax adjust.

3.03%

2.86%

2.69%

2.51%

2.29%

2.77%

2.46%

Net interest margin - tax equivalent (3)

3.10%

2.92%

2.76%

2.58%

2.37%

2.84%

2.55%

Yield on earning assets without tax adjust.

4.99%

4.94%

4.93%

5.00%

5.12%

4.96%

5.45%

Yield on earning assets - tax equivalent (3)

5.05%

5.01%

5.00%

5.07%

5.20%

5.03%

5.54%

Yield on interest-bearing liabilities

2.47%

2.61%

2.82%

3.09%

3.42%

2.75%

3.61%

Net interest spread - without tax adjust.

2.52%

2.34%

2.11%

1.91%

1.70%

2.21%

1.84%

Net interest spread - tax equivalent (3)

2.58%

2.40%

2.18%

1.98%

1.78%

2.28%

1.93%

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2009

2009

2009

2009

2008

Condensed Balance Sheet Data:

Investment securities

$    1,271,271   

$           1,306,098   

$        1,306,174   

$           1,321,605   

$        1,094,594   

Loans

3,035,328   

3,114,254   

3,177,739   

3,214,096   

3,233,261   

Allowance for loan losses

106,185   

107,132   

132,927   

130,282   

128,548   

Total assets

4,403,502   

4,485,081   

4,548,325   

4,596,701   

4,388,889   

Total deposits

2,976,800   

3,052,729   

3,204,574   

3,147,653   

3,131,046   

Total borrowings

1,106,971   

1,086,892   

974,344   

1,060,212   

879,470   

Total stockholders' equity

258,806   

289,020   

271,635   

311,425   

307,087   

Asset Quality Ratios:

Nonperforming loans

$          141,462   

$              176,020   

$           189,816   

$              184,297   

$           200,380   

Nonperforming assets

167,693   

196,333   

212,886   

202,529   

213,559   

Allowance for loan losses to total loans

3.50%

3.44%

4.18%

4.05%

3.98%

Allowance for loan losses to nonperforming loans

75.06%

60.86%

70.03%

70.69%

64.15%

Nonperforming assets to total loans plus

repossessed property

5.48%

6.26%

6.65%

6.27%

6.58%

Capital Ratios (Taylor Capital Group, Inc.):

Total Capital (to Risk Weighted Assets)

12.72%

12.75%

12.51%

12.87%

13.02%

Tier I Capital (to Risk Weighted Assets).

9.79%

9.86%

9.67%

10.07%

10.22%

Leverage (to average assets)

7.60%

7.47%

7.52%

8.29%

8.73%

Footnotes:

(1)  Efficiency ratio is determined by dividing noninterest expense by an amount equal to net interest income plus    

 noninterest income, adjusted for gains or losses from  investment securities.  

(2)  Average balances are daily averages.  

(3)  Adjustment reflects tax-exempt interest income on an equivalent before-tax basis assuming a tax rate of 35.0%.  

SOURCE Taylor Capital Group, Inc.



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