CHICAGO, Oct. 17, 2013 /PRNewswire/ -- Taylor Capital
Group, Inc. (the "Company") (NASDAQ: TAYC), the parent company of
Cole Taylor Bank (the "Bank"), today
reported results for the third quarter of 2013.
Net income for the third quarter was $14.2 million, compared to $15.6 million for the second quarter of 2013. Net
income applicable to common stockholders for the quarter was
$10.6 million, or $0.34 per diluted share, compared to $11.8 million, or $0.39 per diluted share, for the second quarter
of 2013. The results for the third quarter included
$2.0 million of expenses, pre-tax,
relating to various corporate initiatives, including the previously
announced pending merger with MB Financial, Inc. The
following table compares selected financial information for the
periods indicated:
(dollars in thousands)
|
3Q13
|
|
2Q13
|
|
Change from 2Q13
to 3Q13
|
|
3Q12
|
|
Change from 3Q12
to 3Q13
|
Total commercial
loans (period end)
|
$3,290,407
|
|
$3,000,249
|
|
9.7
|
%
|
|
$2,671,101
|
|
23.2
|
%
|
Average total
deposits
|
$3,829,183
|
|
$3,690,246
|
|
3.8
|
%
|
|
$3,275,358
|
|
16.9
|
%
|
Net interest
income
|
$46,027
|
|
$41,082
|
|
12.0
|
%
|
|
$37,196
|
|
23.7
|
%
|
Net interest
margin
|
3.41
|
%
|
|
3.16
|
%
|
|
0.25
|
%
|
|
3.22
|
%
|
|
0.19
|
%
|
Mortgage banking
revenue
|
$25,148
|
|
$38,533
|
|
(34.7)%
|
|
|
$40,676
|
|
(38.2)%
|
|
Loan loss
provision
|
$300
|
|
$700
|
|
(57.1)%
|
|
|
$900
|
|
(66.7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"Our results for the third quarter of 2013 continue to validate
our strategy of diversification and core line of business focus,"
said Mark A. Hoppe, President and
Chief Executive Officer of the Company. "Our banking segment
achieved strong results across many areas highlighted by robust 10%
quarter-over-quarter growth in commercial loans and a broad
expansion in net interest margin. Credit costs
continued to be low this quarter, despite an increase in
nonperforming loans that was the result of two relationships where
we expect outcomes consistent with what we have experienced
recently from our disciplined credit resolution process. The
commercial loan growth, with substantial contributions from all of
our lending groups, reflects both new customer relationships and
increased activity by existing customers and is our sixth quarter
in a row of commercial loan growth. Moreover, the loan
growth, combined with improving yields on the investment portfolio
and reduced funding costs, drove a solid 25 basis point improvement
in our net interest margin."
"While our results for the quarter were impacted by the slowdown
in mortgage refinancing, our mortgage segment continued on its path
of becoming a full service mortgage banking operation as it began
servicing loans this quarter on its in-house platform based out of
Wilmington, Ohio," Hoppe
commented. "It is worth noting that despite the recent
dramatic interest rate swings, our mortgage team has more than
doubled its mortgage origination activity for home purchases since
the first quarter of 2013 to over $1
billion this quarter highlighting a shift in mix from
refinancing. Amid the uncertainty of the near term outlook
for mortgage refinancing, we have developed a diverse and adaptive
mortgage business with 30 retail locations, originations in 44
states and a mortgage servicing book over $16 billion."
Hoppe continued, "In July we announced the signing of a
definitive merger agreement with MB Financial, Inc. to create the
Chicago area's premier commercial
bank. We are excited about the opportunities this merger
presents to all of our stakeholders. In the interim, we
remain focused on serving our clients and executing our strategic
priorities. Our third quarter results continue to reflect the
value of our diversified model and the contributions of our
dedicated bankers."
THIRD QUARTER 2013 HIGHLIGHTS - COMPARISON TO SECOND QUARTER
2013
- Net interest income was $46.0
million for the third quarter of 2013, up $4.9 million, or 12.0%, from the second quarter
of 2013
- Mortgage banking revenue was $25.1
million for the third quarter of 2013, down $13.4 million, or 34.7%, from the second quarter
of 2013
- Mortgages for home purchases increased to 63% of total
originations for the third quarter of 2013
- Net interest margin on a tax equivalent basis increased by 25
basis points to 3.41% for the third quarter of 2013 from 3.16% for
the second quarter of 2013
- Total commercial loans grew $290.2
million, or 9.7%, from June 30,
2013
- In July, the Company repurchased $26.2
million of its outstanding Fixed Rate Cumulative Perpetual
Preferred Stock, Series B, in a privately negotiated
transaction
- As of September 30, 2013, the
Company's Tier I Risk Based Capital ratio was 12.89%, its Total
Risk Based Capital ratio was 14.15% and its Tier I Capital to
Average Assets leverage ratio was 10.30%
- Return on Average Common Equity was 11.69% for the third
quarter of 2013 as compared to 12.66% for the second quarter of
2013
Credit quality indicators as compared to the second quarter
of 2013
- Nonperforming loans were $86.0
million and 2.37% of total loans at September 30, 2013, compared to $69.5 million and 2.11% of total loans at
June 30, 2013
- At September 30, 2013, commercial
criticized and classified loans(1) totaled $151.7 million, up from $134.2 million at June 30,
2013
- The allowance for loan losses as a percent of nonperforming
loans was 98.80% at September 30,
2013, compared to 120.19% at June 30,
2013
- Credit costs(2) were a negative $536,000 for the third quarter of 2013, compared
to a negative $498,000 for the second
quarter of 2013
THIRD QUARTER 2013 - COMPARISON TO THIRD QUARTER 2012
- Net interest income increased to $46.0
million for the third quarter of 2013, up $8.8 million, or 23.7%, from the third quarter of
2012
- Net interest margin on a tax equivalent basis increased by 19
basis points to 3.41% for the third quarter of 2013 from 3.22% for
the third quarter of 2012
- Pre-tax, pre-provision operating earnings(3) decreased to
$23.1 million for the third quarter
of 2013, down $9.8 million, or 29.8%,
as compared to the third quarter of 2012
- Total commercial loans increased to $3.29 billion at September
30, 2013, up $619.3 million,
or 23.2%, from September 30,
2012
- Core deposits grew to $2.75
billion at September 30, 2013,
up $307.4 million, or 12.6%, from
September 30, 2012
- Return on Average Common Equity was 11.69% for the third
quarter of 2013 as compared to 17.62% for the third quarter of
2012
THIRD QUARTER 2013 PERFORMANCE OVERVIEW
Results of Operations - Comparisons to Second Quarter
2013
Net income for the third quarter of 2013 was $14.2 million, compared to $15.6 million for the second quarter of 2013, a
decrease of 9.0%. Net income applicable to common
stockholders for the third quarter of 2013 was $10.6 million, compared to $11.8 million for the second quarter of
2013.
Income before income taxes was $23.7
million for the third quarter of 2013, compared to
$26.2 million for the second quarter
of 2013, a decrease of 9.5%. The decrease was primarily due
to a $13.4 million decline in
mortgage banking revenue partially offset by a $5.4 million decline in early extinguishment of
debt expense and a $4.9 million
increase in net interest income. The decrease in mortgage
banking revenue was due to an industry-wide slowdown in mortgage
refinancing from the robust pace achieved over the prior few
quarters and gain on sale margin
compression.
Pre-tax, pre-provision operating earnings totaled $23.1 million for the third quarter of 2013,
compared to $31.1 million for the
second quarter of 2013, a decrease of 25.7%. The decrease was
primarily due to a $13.4 million
decline in mortgage banking revenue, partially offset by a
$4.9 million increase in net interest
income.
Revenue(4)
Revenue totaled $78.4 million for
the third quarter of 2013, compared to $87.2
million for the second quarter of 2013, a decrease of
10.1%.
Net interest income was $46.0
million for the third quarter of 2013, as compared to
$41.1 million for the second quarter
of 2013. The increase was primarily due to growth in
commercial loan balances, higher municipal bond yields within the
tax-exempt investment portfolio and lower cost of interest bearing
liabilities, primarily as a result of the prepayment of
$37.5 million of the Company's 8%
subordinated notes in June 2013 and
even with growth in overall interest-bearing deposits, the deposit
interest expense decreased due to a 15 basis point reduction in the
cost of deposits. The overall tax equivalent net interest
margin increased 25 basis points, from 3.16% for the second quarter
of 2013 to 3.41% for the third quarter of 2013 due to commercial
loan growth, higher yields on both the investment portfolio and
loans held for sale, lower funding costs and one-time interest
recoveries of approximately 6 basis
points.
Noninterest income, excluding investment security gains and
losses, was $32.4 million for the
third quarter of 2013, compared to $46.1
million for the second quarter of 2013, a decrease of
29.7%. The decrease was primarily due to a $13.4 million decrease in mortgage banking
revenue due to a slowdown in mortgage refinancing and lower gain on
sale margins. Total mortgage originations were $1.60 billion in the third quarter of 2013 down
14.8% from the second quarter. Approximately 63% of the
Company's mortgage originations in the third quarter of 2013 were
for home purchases as compared to 38% in the second quarter,
highlighting the decline in refinance activity and the growth in
purchase activity.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and
early extinguishment of debt expense, was $55.4 million for the third quarter of 2013,
compared to $56.1 million for the
second quarter of 2013. The decrease of $711,000, or 1.3%, was primarily the result of a
$4.6 million decrease in
performance-based incentives attributable to the decline in
mortgage banking revenue, partially offset by a $2.4 million increase in employee salaries and
benefits. Salary expense increased as employees were added at
Cole Taylor Mortgage to establish its in-house servicing platform
in Wilmington. Certain expenses at Cole Taylor Mortgage are
variable in nature and will likely change with loan production
volume in the future. In addition, Cole Taylor Mortgage
continuously evaluates its staffing levels relative to expected
loan production. Besides employee salaries and benefits
expense, legal fees also increased mainly due to the proposed
merger with MB Financial and other strategic corporate
initiatives.
Results of Operations - Comparisons to Third Quarter
2012
Net income for the third quarter of 2013 was $14.2 million, compared to $16.7 million for the third quarter of 2012, a
decrease of 15.0%. Net income applicable to common
stockholders for the third quarter of 2013 was $10.6 million, compared to $15.0 million for the third quarter of 2012.
Income before income taxes was $23.7
million for the third quarter of 2013, compared to
$27.6 million for the third quarter
of 2012, a decrease of 14.1%. The $3.9
million decrease was primarily due to a $15.5 million decline in mortgage banking revenue
partially offset by a $8.8 million
increase in net interest income. The decline in mortgage
banking revenue was primarily due to lower gain on sale margins for
mortgage originations from the elevated levels seen in the second
half of 2012. The decline in mortgage origination income was
partially offset by an increase in servicing revenue. The
Company has grown mortgage servicing as part of its strategy to
build a complete mortgage operation with diverse revenue
sources.
Pre-tax, pre-provision operating earnings totaled $23.1 million for the third quarter of 2013, as
compared to $32.8 million in the
third quarter of 2012, a decrease of 29.6%, primarily due to the
previously mentioned decline in mortgage banking
revenue.
Revenue
Revenue totaled $78.4 million for
the third quarter of 2013, compared to $84.4
million in the third quarter of 2012, a decrease of
7.1%.
Net interest income was $46.0
million for the third quarter of 2013, compared to
$37.2 million for the third quarter
of 2012, an increase of 23.7%. The increase was primarily due
to growth in commercial loan balances, higher yields and growth in
the investment portfolio, the repayment of the Bank's $60.0 million of 10% subordinated notes in the
third quarter of 2012 and of the Company's $37.5 million of 8% subordinated notes in the
second quarter of 2013 and lower deposit funding
costs.
Noninterest income, excluding investment security gains and
losses, was $32.4 million for the
third quarter of 2013, compared to $47.3
million for the third quarter of 2012, a decrease of
31.5%. The decrease was primarily due to a $15.5 million decrease in mortgage banking
revenue due to lower gain on sale margins for mortgage originations
from the elevated margins seen in the second half of 2012,
partially offset by an increase in mortgage servicing
revenue. The increase in servicing revenue was the result of
growth in the Company's mortgage servicing rights ("MSR") portfolio
resulting from both purchased as well as self-originated MSR.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and
early extinguishment of debt expense, was $55.4 million for the third quarter of 2013,
compared to $51.6 million in the
third quarter of 2012, an increase of 7.4%. The net increase
of $3.8 million was due to the
combination of a $6.2 million
increase in employee salary and benefit costs primarily due to
headcount growth at Cole Taylor Mortgage, a $2.5 million increase in outside services
primarily due to growth in mortgage servicing, a $1.3 million increase in other noninterest
expense primarily due to mortgage volume-related costs, a
$1.0 million increase in legal fees
primarily related to the proposed merger with MB Financial, and a
$457,000 increase in occupancy,
furniture and equipment costs due to office expansion.
Partially offsetting these increases was a $8.1 million decrease in performance-related
incentive expense due to declines in mortgage banking
revenue.
Credit Quality
Loan Portfolio Performance and Credit Quality
Total commercial criticized and classified loans were
$151.7 million at September 30, 2013, up from $134.2 million at June 30,
2013 and $114.7 million at
September 30, 2012. The
increase in criticized and classified loans was largely
attributable to two relationships migrating to nonaccrual status
during the third quarter of 2013 partially offset by paydowns of
several previously criticized and classified
loans.
Nonperforming loans were $86.0
million at September 30, 2013,
up from $69.5 million at June 30, 2013, and $62.1
million at September 30,
2012. The increase in nonperforming loans was due to the
previously mentioned relationships moving to nonaccrual status in
the third quarter of
2013.
Other real estate owned ("OREO") and repossessed assets were
$14.4 million at September 30, 2013, down from $19.8 million at June 30,
2013 and $28.9 million at
September 30, 2012. The
decrease in OREO assets was primarily due to sales as we continue
to actively manage the resolution process.
Total nonperforming assets were $100.4
million at September 30, 2013,
up from $89.3 million at June 30, 2013 and $91.0
million at September 30,
2012. Nonperforming assets to total assets were 1.67% at
September 30, 2013, compared to 1.51%
at June 30, 2013 and 1.77% at
September 30,
2012.
Allowance and Provision for Loan Losses
The allowance for loan losses was $85.0
million at September 30, 2013
compared to $83.6 million at
June 30, 2013 and $79.7 million at September
30, 2012 with the increase primarily due to growth in the
loan portfolio. The allowance for loan losses as a percent of
nonperforming loans was 98.80% at September
30, 2013, as compared to 120.19% at June 30, 2013 and 128.30% at September 30, 2012.
The provision for loan losses was $300,000 for the third quarter of 2013, compared
to $700,000 for the second quarter of
2013 and $900,000 in the third
quarter of 2012. The $300,000
loan loss provision in the third quarter of 2013 reflects an
increase in the general reserve primarily due to loan growth,
partially offset by net recoveries and a decrease in required
specific
reserves.
Balance Sheet
Assets
Total assets at September 30, 2013
were $6.01 billion, compared to
$5.90 billion at June 30, 2013.
Investment securities were $1.42
billion at September 30, 2013,
down slightly from $1.43 billion at
June 30,
2013.
Loans held for sale were $498.3
million at September 30, 2013,
a decrease of 28.2% from June 30,
2013. The decrease was primarily the result of a slowdown in
mortgage refinance activity.
Net loans at September 30, 2013
were $3.54 billion, up $324.7 million from $3.22
billion at June 30,
2013. Commercial and Industrial loans were $1.90 billion at September
30, 2013, an increase of 11.4% from $1.71 billion at June
30, 2013. This increase was broadly distributed across
the Company's Chicago-based middle
market lending, asset based lending and equipment financing
groups. Commercial real estate secured loans were
$1.11 billion at September 30, 2013, an increase of 7.5% from
June 30, 2013. Consumer loans,
which consist primarily of residential mortgages, were $348.4 million at September 30, 2013, up $37.2 million from June
30, 2013, as a portion of mortgage originations in the third
quarter was retained in portfolio for investment
purposes.
MSR increased $38.5 million in the
third quarter to $184.2 million as of
September 30, 2013. The unpaid
principal balance of loans serviced was $16.43 billion as of September 30, 2013, up 29.0% from June 30, 2013. The Company invests in MSR
and retains servicing on most mortgage loans originated as part of
its strategy to diversify the revenue streams of Cole Taylor
Mortgage.
Liabilities and Stockholders' Equity
Total liabilities at September 30,
2013 were $5.47 billion, as
compared to $5.34 billion at
June 30, 2013.
Total deposits were $3.70 billion
at September 30, 2013, compared to
$3.69 billion at June 30, 2013. Total deposits increased in
the third quarter, despite the end of a deposit relationship with
an organization that provides financial services to the higher
education industry, through growth in both interest-bearing demand
and time deposits as part of the Company's on-going deposit
gathering efforts.
Average total deposits for the third quarter of 2013 increased
to $3.83 billion from $3.69 billion in the second quarter of 2013,
primarily due to growth in both interest-bearing demand and time
deposits, partially offset by a decrease in noninterest-bearing
deposits.
Short-term borrowings increased $136.8
million in the third quarter to $1.57
billion as of September 30,
2013, due to increased funding needs to support commercial
loan growth.
Total stockholders' equity decreased $15.6 million from $560.3
million at June 30, 2013, to
$544.7 million at September 30, 2013, primarily due to the
repurchase of $26.2 million of the
Series B preferred in the third quarter. The decline was
partially offset by retaining the net income available to common
stockholders earned in the third quarter.
Capital
At September 30, 2013, the
Company's Tier I Risk Based Capital ratio was 12.89%, its Total
Risk Based Capital ratio was 14.15% and its Tier I Capital to
Average Assets leverage ratio was 10.30%.
Each of these Company ratios exceeded the regulatory
requirements for well-capitalized banks of 6.00% for the Tier I
Risk Based Capital ratio, 10.00% for the Total Risk Based Capital
ratio and 5.00% for the Tier I Capital to Average Assets leverage
ratio.
Accompanying Financial Statements and Tables
This
press release is accompanied by the following unaudited financial
information:
- Condensed Consolidated Balance Sheets
- Consolidated Statements of Income
- Summary of Key Quarterly Financial Data
- Summary of Key Year-to-Date Financial Data
- Summary of Key Period-End Financial Data
- Composition of Loan Portfolio
- Credit Quality
- Loan Portfolio Aging
- Funding Liabilities
- Summary of Quarterly Segment Financial Data
- Reconciliation of U.S. GAAP Financial Measures
About Taylor Capital Group, Inc. (NASDAQ: TAYC)
Taylor Capital Group, Inc. is the holding company of
Cole Taylor Bank, a commercial bank
headquartered in Chicago with
assets of $6.0 billion as of
September 30, 2013. For more than 80
years, Cole Taylor Bank has been
successfully meeting the banking needs of closely-held companies
and the people who own and manage them by focusing on a
relationship-based approach to business. Through its national
businesses, Cole Taylor provides a
full range of financial services, including asset based lending,
commercial equipment financing, and residential mortgage
lending.
Endnotes:
(1) Commercial criticized and
classified loans are defined as special mention, substandard, and
nonaccrual loans in commercial and industrial, commercial real
estate, residential construction and land, and commercial
construction and land, excluding consumer loans.
(2) Credit costs are defined as provision for loan losses
plus nonperforming asset expense.
(3) Schedules reconciling earnings in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP") to the non-GAAP
measurement of revenue and pre-tax, pre-provision operating
earnings are provided in the attached tables.
(4) Revenue is defined as net interest income plus
noninterest income less investment securities gains and losses and
impairment of investment securities.
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," "contemplate," "plan," "predict," "potential,"
"should," "will," "expect," "anticipate," "believe," "intend,"
"could," "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 2013 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 Agreement and Plan of Merger (the "Merger Agreement") with
MB Financial, Inc. ("MB") may be terminated in accordance with its
terms, and the merger contemplated thereby (the "Merger") may not
be completed.
- Termination of the Merger Agreement could negatively impact
us.
- We will be subject to business uncertainties and contractual
restrictions while the Merger is pending.
- Two stockholder actions have been filed against us, our Board
of Directors and MB challenging the Merger, and additional suits
may be filed in the future. An adverse ruling in any of these
lawsuits may prevent the Merger from being completed or from being
completed within the expected timeframe.
- The Merger Agreement limits our ability to pursue an
alternative acquisition proposal and requires us to pay a
termination fee of $20.0 million
under limited circumstances relating to alternative acquisition
proposals.
- We may be materially and adversely affected by the highly
regulated environment in which we operate.
- Increasing dependence on our mortgage business may increase
volatility in our consolidated revenues and earnings, and our
residential mortgage lending profitability could be significantly
reduced if we are not able to originate and sell mortgage loans at
profitable margins.
- Changes in interest rates may change the value of our mortgage
servicing rights ("MSRs") portfolio, which may increase the
volatility of our earnings.
- Certain hedging strategies that we use to manage investment in
MSR, mortgage loans held for sale and interest rate lock
commitments may be ineffective to offset any adverse changes in the
fair value of these assets due to changes in interest rates and
market liquidity.
- Our mortgage loan repurchase reserve for losses could be
insufficient.
- A significant increase in certain loan balances associated with
our mortgage business may result in liquidity risk related to the
funding of these loans.
- We are subject to interest rate risk, including interest rate
fluctuations that could have a material adverse effect on us.
- Competition from financial institutions and other financial
services providers may adversely affect our growth and
profitability and have a material adverse effect on us.
- Our business is subject to the conditions of the economies in
which we operate and continued weakness in those economies and the
real estate markets may materially and adversely affect us.
- Our business is subject to domestic and, to a lesser extent,
international economic conditions and other factors, many of which
are beyond our control and could materially and adversely affect
us.
- The preparation of our consolidated financial statements
requires us to make estimates and judgments, including the use of
models, which are subject to an inherent degree of uncertainty and
which may differ from actual results.
- We must manage credit risk and, if we are unable to do so, our
allowance for loan losses may prove to be insufficient to absorb
losses in our loan portfolio, which could have a material adverse
effect on us.
- We may not be able to access sufficient and cost-effective
sources of liquidity.
- We are subject to liquidity risk, including unanticipated
deposit volatility.
- The repeal of federal prohibitions on payment of interest on
business demand deposits could increase our interest expense and
have a material adverse effect on us.
- Changes in certain ratings related to us or our credit could
increase our financing costs or make it more difficult for us to
obtain funding or capital on commercially acceptable terms.
- As a bank holding company, our sources of funds are
limited.
- We are subject to certain operational risks, including, but not
limited to, data processing system failures and errors and customer
or employee fraud. Our controls and procedures may fail or be
circumvented.
- We are dependent on outside third parties for processing and
handling of our records and data.
- System failure or breaches of our network security, including
with respect to our internet banking activities, could subject us
to increased operating costs as well as litigation and other
liabilities.
- We have counterparty risk and therefore we may be materially
and adversely affected by the soundness of other financial
institutions.
- We are subject to lending concentration risks.
- We are subject to mortgage asset concentration risks.
- Our business strategy is dependent on our continued ability to
attract, develop and retain highly qualified and experienced
personnel in senior management and customer relationship
positions.
- Our reputation could be damaged by negative publicity.
- New lines of business, new products and services or new
customer relationships may subject us to certain additional
risks.
- We may experience difficulties in managing our future
growth.
- We and our subsidiaries are subject to changes in federal and
state tax laws and changes in interpretation of existing laws.
- Regulatory requirements, including rules recently adopted by
the U.S. federal bank regulatory agencies to implement Basel III,
growth plans or operating results may require us to raise
additional capital, which may not be available on favorable terms
or at all.
- We have not paid a dividend on our common stock since the third
quarter of 2008. In addition, regulatory restrictions and liquidity
constraints at the holding company level could impair our ability
to make distributions on our outstanding securities.
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, 2012 Annual Report on Form 10-K
filed with the Securities and Exchange Commission ("SEC") on
March 8, 2013, as updated by our
quarterly reports on Form 10-Q, Current Reports on Form 8-K and
other filings we have made with the SEC. 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.
Additional Information
This document does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed merger
between MB Financial, Inc. ("MB Financial") and Taylor Capital
Group, Inc. ("Taylor Capital"), MB Financial has filed a
registration statement on Form S-4 with the Securities and
Exchange Commission (the "SEC"). The registration statement
includes a preliminary joint proxy statement of MB Financial and
Taylor Capital that also constitutes a preliminary prospectus of MB
Financial, which, when finalized, will be sent to the stockholders
of MB Financial and Taylor Capital. Stockholders are advised to
read the preliminary joint proxy statement/prospectus regarding the
proposed merger, the definitive joint proxy statement/prospectus
(when it becomes available) and any other relevant documents filed
with the SEC, as well as any amendments or supplements to those
documents, because they contain, or will contain, as the case may
be, important information about MB Financial, Taylor Capital and
the proposed transaction. Copies of all documents relating to the
merger filed by MB Financial and Taylor Capital can be obtained
free of charge from the SEC's website at www.sec.gov. These
documents also can be obtained free of charge by accessing MB
Financial's website at www.mbfinancial.com under the tab "Investor
Relations" and then under "SEC Filings" or by accessing Taylor
Capital's website at www.taylorcapitalgroup.com under the tab "SEC
Filings" and then under "Documents." Alternatively, these documents
can be obtained free of charge from MB Financial upon written
request to MB Financial, Inc., Secretary, 6111 North River
Road, Rosemont, Illinois 60018 or by calling (847) 653-1992,
or from Taylor Capital, upon written request to Taylor Capital
Group, Inc., Investor Relations, 9550 West Higgins Road,
Rosemont, Illinois 60018 or by calling (847) 653-7978.
Participants in this Transaction
MB Financial, Taylor Capital and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from stockholders in connection with
the proposed transaction under the rules of the SEC.
Information about these participants may be found in the definitive
proxy statement of MB Financial relating to its 2013 Annual Meeting
of Stockholders filed with the SEC by MB Financial on
April 12, 2013 and the definitive proxy statement of Taylor
Capital relating to its 2013 Annual Meeting of Stockholders filed
with the SEC on April 24, 2013. These definitive proxy
statements can be obtained free of charge from the sources
indicated above. Additional information regarding the interests of
these participants can be found in the joint proxy
statement/prospectus regarding the proposed transaction, copies of
which may also be obtained free of charge from the sources
indicated above.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in
thousands)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
September 30,
2013
|
|
June 30,
2013
|
|
December 31,
2012
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
122,407
|
|
$
|
97,832
|
|
$
|
166,385
|
Investment
securities
|
1,420,906
|
|
1,434,326
|
|
1,267,757
|
Loans held for
sale
|
498,276
|
|
693,937
|
|
938,379
|
Loans, net of
allowance for loan losses of $85,013 at September 30, 2013, $83,576
at June 30, 2013 and $82,191 at December 31, 2012
|
3,543,645
|
|
3,218,972
|
|
3,086,112
|
Premises, leasehold
improvements and equipment, net
|
25,391
|
|
23,941
|
|
16,062
|
Investment in Federal
Home Loan Bank and Federal Reserve Bank stock
|
74,342
|
|
79,726
|
|
74,950
|
Mortgage servicing
rights
|
184,237
|
|
145,729
|
|
78,917
|
Other real estate and
repossessed assets, net
|
14,389
|
|
19,794
|
|
24,259
|
Other
assets
|
131,101
|
|
187,113
|
|
149,589
|
Total
assets
|
$
|
6,014,694
|
|
$
|
5,901,370
|
|
$
|
5,802,410
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Noninterest-bearing
|
$
|
1,010,789
|
|
$
|
1,138,839
|
|
$
|
1,179,724
|
Interest-bearing
|
2,686,407
|
|
2,553,587
|
|
2,348,618
|
Total
deposits
|
3,697,196
|
|
3,692,426
|
|
3,528,342
|
Accrued interest,
taxes and other liabilities
|
120,521
|
|
133,208
|
|
131,473
|
Short-term
borrowings
|
1,565,651
|
|
1,428,855
|
|
1,463,019
|
Long-term
borrowings
|
—
|
|
—
|
|
—
|
Junior subordinated
debentures
|
86,607
|
|
86,607
|
|
86,607
|
Subordinated notes,
net
|
—
|
|
—
|
|
33,366
|
Total
liabilities
|
5,469,975
|
|
5,341,096
|
|
5,242,807
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock,
Series A
|
100,000
|
|
100,000
|
|
100,000
|
Preferred stock,
Series B
|
78,927
|
|
104,745
|
|
103,813
|
Nonvoting preferred
stock
|
13
|
|
13
|
|
13
|
Common
stock
|
307
|
|
305
|
|
302
|
Surplus
|
417,202
|
|
416,420
|
|
412,391
|
Accumulated
deficit
|
(27,518)
|
|
(38,104)
|
|
(63,537)
|
Accumulated other
comprehensive income, net
|
5,373
|
|
6,480
|
|
36,206
|
Treasury
stock
|
(29,585)
|
|
(29,585)
|
|
(29,585)
|
Total stockholders'
equity
|
544,719
|
|
560,274
|
|
559,603
|
Total liabilities and
stockholders' equity
|
$
|
6,014,694
|
|
$
|
5,901,370
|
|
$
|
5,802,410
|
CONSOLIDATED
STATEMENTS OF INCOME (unaudited)
(dollars in
thousands, except per share data)
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
Sep 30,
2013
|
|
Jun 30,
2013
|
|
Sep 30,
2012
|
|
Sep 30,
2013
|
|
Sep
30,
2012
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
Interest and
fees on loans
|
$
|
40,501
|
|
$
|
37,499
|
|
$
|
36,561
|
|
$
|
115,629
|
|
$
|
107,266
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
8,332
|
|
8,398
|
|
8,897
|
|
25,347
|
|
29,104
|
Tax-exempt
|
2,826
|
|
2,077
|
|
733
|
|
6,330
|
|
2,087
|
Interest on
cash equivalents
|
2
|
|
1
|
|
1
|
|
4
|
|
7
|
Total interest
income
|
51,661
|
|
47,975
|
|
46,192
|
|
147,310
|
|
138,464
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
Deposits
|
3,697
|
|
4,213
|
|
4,399
|
|
12,174
|
|
14,748
|
Short-term
borrowings
|
491
|
|
473
|
|
564
|
|
1,384
|
|
1,756
|
Long-term
borrowings
|
—
|
|
—
|
|
32
|
|
—
|
|
601
|
Junior
subordinated debentures
|
1,446
|
|
1,444
|
|
1,466
|
|
4,333
|
|
4,402
|
Subordinated
notes
|
—
|
|
763
|
|
2,535
|
|
1,627
|
|
7,581
|
Total interest
expense
|
5,634
|
|
6,893
|
|
8,996
|
|
19,518
|
|
29,088
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
46,027
|
|
41,082
|
|
37,196
|
|
127,792
|
|
109,376
|
Provision for loan
losses
|
300
|
|
700
|
|
900
|
|
1,300
|
|
8,350
|
Net interest
income after provision for loan losses
|
45,727
|
|
40,382
|
|
36,296
|
|
126,492
|
|
101,026
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
Service
charges
|
3,572
|
|
3,505
|
|
3,423
|
|
10,568
|
|
10,069
|
Mortgage banking
revenue
|
25,148
|
|
38,533
|
|
40,676
|
|
95,711
|
|
81,220
|
Gain on sales of
investment securities
|
61
|
|
6
|
|
—
|
|
68
|
|
3,976
|
Other
derivative income
|
1,855
|
|
1,704
|
|
1,790
|
|
5,119
|
|
3,166
|
Other
noninterest income
|
1,836
|
|
2,353
|
|
1,361
|
|
6,826
|
|
4,654
|
Total
noninterest income
|
32,472
|
|
46,101
|
|
47,250
|
|
118,292
|
|
103,085
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and
employee benefits
|
35,100
|
|
37,322
|
|
37,024
|
|
106,450
|
|
88,939
|
Occupancy of
premises, furniture and equipment
|
3,703
|
|
3,519
|
|
3,246
|
|
10,527
|
|
8,958
|
Nonperforming
asset expense
|
(836)
|
|
(1,198)
|
|
613
|
|
(1,475)
|
|
2,135
|
Early
extinguishment of debt
|
—
|
|
5,380
|
|
3,670
|
|
5,380
|
|
7,658
|
FDIC
assessment
|
1,963
|
|
1,759
|
|
1,766
|
|
5,746
|
|
4,965
|
Legal fees,
net
|
2,001
|
|
1,117
|
|
1,020
|
|
3,976
|
|
2,633
|
Loan expense,
net
|
2,195
|
|
2,895
|
|
1,862
|
|
7,461
|
|
4,405
|
Outside
services
|
3,535
|
|
2,818
|
|
1,082
|
|
8,849
|
|
2,369
|
Other
noninterest expense
|
6,881
|
|
6,659
|
|
5,616
|
|
19,654
|
|
14,391
|
Total
noninterest expense
|
54,542
|
|
60,271
|
|
55,899
|
|
166,568
|
|
136,453
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
23,657
|
|
26,212
|
|
27,647
|
|
78,216
|
|
67,658
|
Income tax
expense
|
9,488
|
|
10,595
|
|
10,898
|
|
31,173
|
|
27,215
|
Net
income
|
14,169
|
|
15,617
|
|
16,749
|
|
47,043
|
|
40,443
|
Preferred dividends
and discounts
|
(3,583)
|
|
(3,780)
|
|
(1,757)
|
|
(11,024)
|
|
(5,247)
|
Net income
applicable to common stockholders
|
$
|
10,586
|
|
$
|
11,837
|
|
$
|
14,992
|
|
$
|
36,019
|
|
$
|
35,196
|
|
|
|
|
|
|
|
|
|
|
Basic income per
common share
|
$
|
0.35
|
|
$
|
0.39
|
|
$
|
0.50
|
|
$
|
1.19
|
|
$
|
1.18
|
Diluted income per
common share
|
0.34
|
|
0.39
|
|
0.49
|
|
1.17
|
|
1.15
|
Weighted-average
common shares outstanding
|
28,936,361
|
|
28,687,406
|
|
28,430,871
|
|
28,741,025
|
|
28,220,962
|
Weighted-average
diluted common shares outstanding
|
29,176,070
|
|
28,995,753
|
|
28,931,235
|
|
29,062,538
|
|
28,989,066
|
SUMMARY OF KEY
QUARTERLY FINANCIAL DATA
(dollars in
thousands)
Unaudited
|
|
|
2013
|
|
2012
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
|
Fourth
Quarter
|
|
Third
Quarter
|
Condensed Income
Data:
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
46,027
|
|
|
$
|
41,082
|
|
|
$
|
40,683
|
|
|
$
|
40,510
|
|
|
$
|
37,196
|
|
Provision for loan
losses
|
300
|
|
|
700
|
|
|
300
|
|
|
1,200
|
|
|
900
|
|
Total noninterest
income
|
32,472
|
|
|
46,101
|
|
|
39,719
|
|
|
51,962
|
|
|
47,250
|
|
Total noninterest
expense
|
54,542
|
|
|
60,271
|
|
|
51,755
|
|
|
55,284
|
|
|
55,899
|
|
Income before income
taxes
|
23,657
|
|
|
26,212
|
|
|
28,347
|
|
|
35,988
|
|
|
27,647
|
|
Income tax
expense
|
9,488
|
|
|
10,595
|
|
|
11,090
|
|
|
14,530
|
|
|
10,898
|
|
Net income
|
14,169
|
|
|
15,617
|
|
|
17,257
|
|
|
21,458
|
|
|
16,749
|
|
Preferred dividends
and discounts
|
(3,583)
|
|
|
(3,780)
|
|
|
(3,661)
|
|
|
(1,765)
|
|
|
(1,757)
|
|
Net income applicable
to common stockholders
|
$
|
10,586
|
|
|
$
|
11,837
|
|
|
$
|
13,596
|
|
|
$
|
19,693
|
|
|
$
|
14,992
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
of Performance: (1)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
78,438
|
|
|
$
|
87,177
|
|
|
$
|
80,401
|
|
|
$
|
90,984
|
|
|
$
|
84,446
|
|
Pre-tax,
pre-provision operating earnings
|
23,060
|
|
|
31,088
|
|
|
29,205
|
|
|
38,579
|
|
|
32,830
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
Basic income per
common share
|
$
|
0.35
|
|
|
$
|
0.39
|
|
|
$
|
0.45
|
|
|
$
|
0.66
|
|
|
$
|
0.50
|
|
Diluted income per
common share
|
0.34
|
|
|
0.39
|
|
|
0.44
|
|
|
0.65
|
|
|
0.49
|
|
Tangible book value
per common share
|
12.47
|
|
|
12.22
|
|
|
12.69
|
|
|
12.36
|
|
|
11.97
|
|
Weighted average
common shares-basic
|
28,936,361
|
|
|
28,687,406
|
|
|
28,595,562
|
|
|
28,515,040
|
|
|
28,430,871
|
|
Weighted average
common shares-diluted
|
29,176,070
|
|
|
28,995,753
|
|
|
28,961,395
|
|
|
28,895,719
|
|
|
28,931,235
|
|
Common shares
outstanding-end of period
|
29,333,540
|
|
|
29,098,639
|
|
|
29,088,735
|
|
|
28,792,042
|
|
|
28,756,717
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios
(annualized):
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
0.96
|
%
|
|
1.09
|
%
|
|
1.22
|
%
|
|
1.59
|
%
|
|
1.33
|
%
|
Return on average
common equity
|
11.69
|
%
|
|
12.66
|
%
|
|
14.82
|
%
|
|
22.40
|
%
|
|
17.62
|
%
|
Efficiency ratio
(2)
|
69.54
|
%
|
|
69.14
|
%
|
|
64.37
|
%
|
|
60.76
|
%
|
|
66.19
|
%
|
|
|
|
|
|
|
|
|
|
|
Average Balance
Sheet Data: (3)
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
5,893,140
|
|
|
$
|
5,747,219
|
|
|
$
|
5,642,192
|
|
|
$
|
5,389,566
|
|
|
$
|
5,026,706
|
|
Investments
|
1,491,554
|
|
|
1,472,316
|
|
|
1,360,213
|
|
|
1,213,422
|
|
|
1,230,953
|
|
Cash
equivalents
|
541
|
|
|
237
|
|
|
555
|
|
|
985
|
|
|
304
|
|
Loans held for
sale
|
626,043
|
|
|
634,327
|
|
|
691,134
|
|
|
663,759
|
|
|
424,508
|
|
Loans
|
3,442,999
|
|
|
3,254,918
|
|
|
3,177,615
|
|
|
3,090,019
|
|
|
2,997,346
|
|
Total
interest-earning assets
|
5,561,137
|
|
|
5,361,798
|
|
|
5,229,517
|
|
|
4,968,185
|
|
|
4,653,111
|
|
Interest-bearing
deposits
|
2,767,265
|
|
|
2,494,537
|
|
|
2,424,772
|
|
|
2,282,290
|
|
|
2,193,790
|
|
Borrowings
|
1,425,545
|
|
|
1,397,300
|
|
|
1,219,977
|
|
|
1,241,905
|
|
|
1,224,884
|
|
Total
interest-bearing liabilities
|
4,192,810
|
|
|
3,891,837
|
|
|
3,644,749
|
|
|
3,524,195
|
|
|
3,418,674
|
|
Noninterest-bearing
deposits
|
1,061,917
|
|
|
1,195,709
|
|
|
1,333,958
|
|
|
1,257,811
|
|
|
1,081,568
|
|
Total stockholders'
equity
|
545,391
|
|
|
578,142
|
|
|
570,652
|
|
|
500,727
|
|
|
441,133
|
|
|
|
|
|
|
|
|
|
|
|
Tax Equivalent Net
Interest Margin:
|
|
|
|
|
|
|
|
|
|
Net interest income
as stated
|
$
|
46,027
|
|
|
$
|
41,082
|
|
|
$
|
40,683
|
|
|
$
|
40,510
|
|
|
$
|
37,196
|
|
Add: Tax
equivalent adjust. - investment (4)
|
1,522
|
|
|
1,119
|
|
|
769
|
|
|
545
|
|
|
395
|
|
Tax equivalent adjust. - loans (4)
|
27
|
|
|
29
|
|
|
29
|
|
|
30
|
|
|
30
|
|
Tax equivalent net
interest income
|
$
|
47,576
|
|
|
$
|
42,230
|
|
|
$
|
41,481
|
|
|
$
|
41,085
|
|
|
$
|
37,621
|
|
Net interest margin
without tax adjust. (5)
|
3.29
|
%
|
|
3.07
|
%
|
|
3.14
|
%
|
|
3.25
|
%
|
|
3.19
|
%
|
Net interest margin -
tax equivalent (4) (5)
|
3.41
|
%
|
|
3.16
|
%
|
|
3.20
|
%
|
|
3.30
|
%
|
|
3.22
|
%
|
Yield on earning
assets without tax adjust. (5)
|
3.70
|
%
|
|
3.59
|
%
|
|
3.68
|
%
|
|
3.83
|
%
|
|
3.96
|
%
|
Yield on earning
assets - tax equivalent (4) (5)
|
3.81
|
%
|
|
3.67
|
%
|
|
3.74
|
%
|
|
3.87
|
%
|
|
3.99
|
%
|
Yield on
interest-bearing liabilities (5)
|
0.53
|
%
|
|
0.71
|
%
|
|
0.78
|
%
|
|
0.81
|
%
|
|
1.05
|
%
|
Net interest spread
without tax adjust. (5)
|
3.17
|
%
|
|
2.88
|
%
|
|
2.90
|
%
|
|
3.02
|
%
|
|
2.91
|
%
|
Net interest spread -
tax equivalent (4) (5)
|
3.28
|
%
|
|
2.96
|
%
|
|
2.96
|
%
|
|
3.06
|
%
|
|
2.95
|
%
|
Footnotes:
|
|
(1)
|
Refer to
Reconciliation of U.S. GAAP Financial Measures for a reconciliation
to GAAP.
|
(2)
|
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.
|
(3)
|
Average balances are
daily averages.
|
(4)
|
Adjustment reflects
tax-exempt interest income on an equivalent before-tax basis
assuming a tax rate of 35.0%
|
(5)
|
During the second
quarter 2013, the Company revised its methodology for calculating
these metrics to exclude the valuation adjustment on mortgages held
at fair value. Prior period ratios have been adjusted to
reflect this change.
|
SUMMARY OF KEY
YEAR-TO-DATE FINANCIAL DATA
(dollars in
thousands)
Unaudited
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
2013
|
|
2012
|
Condensed Income
Data:
|
|
|
|
|
Net interest
income
|
|
$
|
127,792
|
|
|
$
|
109,376
|
|
Provision for loan
losses
|
|
1,300
|
|
|
8,350
|
|
Total noninterest
income
|
|
118,292
|
|
|
103,085
|
|
Total noninterest
expense
|
|
166,568
|
|
|
136,453
|
|
Income before income
taxes
|
|
78,216
|
|
|
67,658
|
|
Income tax
expense
|
|
31,173
|
|
|
27,215
|
|
Net income
|
|
47,043
|
|
|
40,443
|
|
Preferred dividends
and discounts
|
|
(11,024)
|
|
|
(5,247)
|
|
Net income applicable
to common stockholders
|
|
$
|
36,019
|
|
|
$
|
35,196
|
|
|
|
|
|
|
Non-GAAP Measures
of Performance: (1)
|
|
|
|
|
Revenue
|
|
$
|
246,016
|
|
|
$
|
208,610
|
|
Pre-tax,
pre-provision operating earnings
|
|
83,353
|
|
|
81,950
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
Basic income per
common share
|
|
$
|
1.19
|
|
|
$
|
1.18
|
|
Diluted income per
common share
|
|
1.17
|
|
|
1.15
|
|
Tangible book value
per common share
|
|
12.47
|
|
|
11.97
|
|
Weighted average
common shares-basic
|
|
28,741,025
|
|
|
28,220,962
|
|
Weighted average
common shares-diluted
|
|
29,062,538
|
|
|
28,989,066
|
|
Common shares
outstanding-end of period
|
|
29,333,540
|
|
|
28,727,580
|
|
|
|
|
|
|
Performance Ratios
(Annualized):
|
|
|
|
|
Return on average
assets
|
|
1.09
|
%
|
|
1.11
|
%
|
Return on average
common equity
|
|
13.06
|
%
|
|
14.66
|
%
|
Efficiency ratio
(2)
|
|
67.71
|
%
|
|
65.41
|
%
|
|
|
|
|
|
Average Balance
Sheet Data: (3)
|
|
|
|
|
Total
assets
|
|
$
|
5,761,770
|
|
|
$
|
4,852,152
|
|
Investments
|
|
1,441,842
|
|
|
1,268,040
|
|
Cash
equivalents
|
|
444
|
|
|
657
|
|
Loans held for
sale
|
|
650,263
|
|
|
313,827
|
|
Loans
|
|
3,292,817
|
|
|
2,960,691
|
|
Total
interest-earning assets
|
|
5,385,366
|
|
|
4,543,215
|
|
Interest-bearing
deposits
|
|
2,563,447
|
|
|
2,246,633
|
|
Borrowings
|
|
1,348,360
|
|
|
1,196,942
|
|
Total
interest-bearing liabilities
|
|
3,911,807
|
|
|
3,443,575
|
|
Noninterest-bearing
deposits
|
|
1,196,198
|
|
|
910,131
|
|
Total stockholders'
equity
|
|
564,636
|
|
|
421,722
|
|
|
|
|
|
|
Tax Equivalent Net
Interest Margin:
|
|
|
|
|
Net interest income
as stated
|
|
$
|
127,792
|
|
|
$
|
109,376
|
|
Add: Tax
equivalent adjust. - investment (4)
|
|
3,409
|
|
|
1,124
|
|
Tax equivalent adjust. - loans (4)
|
|
85
|
|
|
94
|
|
Tax equivalent net
interest income
|
|
$
|
131,286
|
|
|
$
|
110,594
|
|
Net interest margin
without tax adjust. (5)
|
|
3.17
|
%
|
|
3.21
|
%
|
Net interest margin -
tax equivalent (4) (5)
|
|
3.26
|
%
|
|
3.25
|
%
|
Yield on earning
assets without tax adjust. (5)
|
|
3.65
|
%
|
|
4.07
|
%
|
Yield on earning
assets - tax equivalent (4) (5)
|
|
3.74
|
%
|
|
4.10
|
%
|
Yield on
interest-bearing liabilities (5)
|
|
0.67
|
%
|
|
1.13
|
%
|
Net interest spread -
without tax adjust. (5)
|
|
2.98
|
%
|
|
2.94
|
%
|
Net interest spread -
tax equivalent (4) (5)
|
|
3.07
|
%
|
|
2.97
|
%
|
Footnotes:
|
(1)
|
Refer to
Reconciliation of U.S. GAAP Financial Measures for a reconciliation
to GAAP.
|
(2)
|
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.
|
(3)
|
Average balances are
daily averages.
|
(4)
|
Adjustment reflects
tax-exempt interest income on an equivalent before-tax basis
assuming a tax rate of 35.0%
|
(5)
|
During the second
quarter 2013, the Company revised its methodology for calculating
these metrics to exclude the valuation adjustment on mortgages held
at fair value. Prior period ratios have been adjusted to
reflect this change.
|
SUMMARY OF KEY
PERIOD-END FINANCIAL DATA
(dollars in
thousands)
Unaudited
|
|
|
Sep 30,
2013
|
|
Jun
30,
2013
|
|
Mar
31,
2013
|
|
Dec
31,
2012
|
|
Sep
30,
2012
|
Condensed Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
$
|
1,420,906
|
|
|
$
|
1,434,326
|
|
|
$
|
1,429,971
|
|
|
$
|
1,267,757
|
|
|
$
|
1,212,139
|
|
Loans held for
sale
|
498,276
|
|
|
693,937
|
|
|
668,937
|
|
|
938,379
|
|
|
422,621
|
|
Loans
|
3,628,658
|
|
|
3,302,548
|
|
|
3,222,794
|
|
|
3,168,303
|
|
|
3,085,693
|
|
Allowance for loan
losses
|
85,013
|
|
|
83,576
|
|
|
82,150
|
|
|
82,191
|
|
|
79,667
|
|
Total
assets
|
6,014,694
|
|
|
5,901,370
|
|
|
5,770,432
|
|
|
5,802,410
|
|
|
5,136,975
|
|
Total
deposits
|
3,697,196
|
|
|
3,692,426
|
|
|
3,794,394
|
|
|
3,528,342
|
|
|
3,558,682
|
|
Total
borrowings
|
1,652,258
|
|
|
1,515,462
|
|
|
1,256,653
|
|
|
1,582,992
|
|
|
1,010,315
|
|
Total stockholders'
equity
|
544,719
|
|
|
560,274
|
|
|
573,332
|
|
|
559,603
|
|
|
447,574
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
$
|
86,045
|
|
|
$
|
69,539
|
|
|
$
|
71,404
|
|
|
$
|
59,537
|
|
|
$
|
62,096
|
|
Nonperforming
assets
|
100,434
|
|
|
89,333
|
|
|
98,622
|
|
|
83,796
|
|
|
90,955
|
|
Allowance for loan
losses to total loans (excluding loans held for sale)
|
2.34
|
%
|
|
2.53
|
%
|
|
2.55
|
%
|
|
2.59
|
%
|
|
2.58
|
%
|
Allowance for loan
losses to nonperforming loans
|
98.80
|
%
|
|
120.19
|
%
|
|
115.05
|
%
|
|
138.05
|
%
|
|
128.30
|
%
|
Nonperforming assets
to total loans plus repossessed property (1)
|
2.76
|
%
|
|
2.69
|
%
|
|
3.03
|
%
|
|
2.62
|
%
|
|
2.92
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Resources
(Taylor Capital Group, Inc.):
|
|
|
|
|
|
|
|
|
|
Total Capital (to
Risk Weighted Assets)
|
14.15
|
%
|
|
15.22
|
%
|
|
16.50
|
%
|
|
16.27
|
%
|
|
14.41
|
%
|
Tier I Capital (to
Risk Weighted Assets)
|
12.89
|
%
|
|
13.96
|
%
|
|
14.45
|
%
|
|
14.21
|
%
|
|
12.29
|
%
|
Leverage (to average
assets)
|
10.30
|
%
|
|
10.87
|
%
|
|
10.91
|
%
|
|
11.14
|
%
|
|
9.43
|
%
|
Total
Capital
|
$
|
663,917
|
|
|
$
|
679,379
|
|
|
$
|
701,381
|
|
|
$
|
685,998
|
|
|
$
|
553,977
|
|
Tier I
Capital
|
604,920
|
|
|
623,221
|
|
|
614,382
|
|
|
599,504
|
|
|
472,221
|
|
|
|
(1)
|
During the fourth
quarter of 2012, the Company revised its methodology for
calculating this metric to exclude loans held for sale from total
loans. Prior period ratios have been adjusted to reflect this
change.
|
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:
|
|
|
|
|
September 30,
2013
|
|
|
June 30, 2013
|
|
|
December 31,
2012
|
|
Loans
|
|
Balance
|
|
Percent of Gross
Loans
|
|
Balance
|
|
Percent of Gross
Loans
|
|
Balance
|
|
Percent of Gross
Loans
|
Commercial and
industrial
|
|
$
|
1,902,572
|
|
|
52.3
|
%
|
|
$
|
1,707,502
|
|
|
51.6
|
%
|
|
$
|
1,590,587
|
|
|
50.1
|
%
|
Commercial real
estate secured
|
|
1,113,533
|
|
|
30.6
|
|
|
1,036,303
|
|
|
31.3
|
|
|
965,978
|
|
|
30.4
|
|
Residential
construction and land
|
|
49,796
|
|
|
1.3
|
|
|
42,606
|
|
|
1.3
|
|
|
45,903
|
|
|
1.5
|
|
Commercial
construction and land
|
|
115,698
|
|
|
3.2
|
|
|
119,839
|
|
|
3.6
|
|
|
103,715
|
|
|
3.3
|
|
Lease
receivables
|
|
108,808
|
|
|
3.0
|
|
|
93,999
|
|
|
2.8
|
|
|
50,803
|
|
|
1.6
|
|
Total commercial
loans
|
|
3,290,407
|
|
|
90.4
|
|
|
3,000,249
|
|
|
90.6
|
|
|
2,756,986
|
|
|
86.9
|
|
Consumer
|
|
348,362
|
|
|
9.6
|
|
|
311,115
|
|
|
9.4
|
|
|
416,635
|
|
|
13.1
|
|
Gross
loans
|
|
3,638,769
|
|
|
100.0
|
%
|
|
3,311,364
|
|
|
100.0
|
%
|
|
3,173,621
|
|
|
100.0
|
%
|
Less: Unearned
discount
|
|
(10,111)
|
|
|
|
|
(8,816)
|
|
|
|
|
(5,318)
|
|
|
|
Total
loans
|
|
3,628,658
|
|
|
|
|
3,302,548
|
|
|
|
|
3,168,303
|
|
|
|
Less: Loan loss
allowance
|
|
(85,013)
|
|
|
|
|
(83,576)
|
|
|
|
|
(82,191)
|
|
|
|
Net loans
|
|
$
|
3,543,645
|
|
|
|
|
$
|
3,218,972
|
|
|
|
|
$
|
3,086,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Held for
Sale
|
|
$
|
498,276
|
|
|
|
|
$
|
693,937
|
|
|
|
|
$
|
938,379
|
|
|
|
|
The following table provides details of the Company's commercial
real estate portfolio:
|
|
|
|
September 30,
2013
|
|
|
June 30, 2013
|
|
|
December 31,
2012
|
|
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
|
|
$
|
104,595
|
|
|
9.4
|
%
|
|
$
|
105,305
|
|
|
10.2
|
%
|
|
$
|
109,266
|
|
|
11.3
|
%
|
Office/mixed use
property
|
|
121,683
|
|
|
10.9
|
|
|
110,174
|
|
|
10.6
|
|
|
113,216
|
|
|
11.7
|
|
Commercial
properties
|
|
102,683
|
|
|
9.2
|
|
|
99,855
|
|
|
9.6
|
|
|
111,852
|
|
|
11.6
|
|
Specialized –
other
|
|
99,409
|
|
|
8.9
|
|
|
73,133
|
|
|
7.1
|
|
|
69,827
|
|
|
7.2
|
|
Other commercial
properties
|
|
20,739
|
|
|
1.9
|
|
|
24,806
|
|
|
2.4
|
|
|
28,870
|
|
|
3.0
|
|
Farmland
|
|
2,285
|
|
|
0.3
|
|
|
2,314
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
Subtotal commercial
non-owner occupied
|
|
451,394
|
|
|
40.6
|
|
|
415,587
|
|
|
40.1
|
|
|
433,031
|
|
|
44.8
|
|
Commercial
owner-occupied
|
|
537,208
|
|
|
48.2
|
|
|
498,057
|
|
|
48.1
|
|
|
425,723
|
|
|
44.1
|
|
Multi-family
properties
|
|
124,931
|
|
|
11.2
|
|
|
122,659
|
|
|
11.8
|
|
|
107,224
|
|
|
11.1
|
|
Total commercial real
estate
secured
|
|
$
|
1,113,533
|
|
|
100.0
|
%
|
|
$
|
1,036,303
|
|
|
100.0
|
%
|
|
$
|
965,978
|
|
|
100.0
|
%
|
CREDIT QUALITY
(unaudited)
(dollars in
thousands)
|
|
|
|
At or for the
Three Months Ended
|
|
|
September 30,
2013
|
|
June 30,
2013
|
|
December 31,
2012
|
Nonperforming
Assets:
|
|
|
|
|
|
|
Loans contractually
past due 90 days or more but still accruing interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Nonaccrual
loans:
|
|
|
|
|
|
|
Commercial and
industrial
|
|
$
|
19,893
|
|
|
$
|
16,577
|
|
|
$
|
16,705
|
|
Commercial real
estate secured
|
|
34,584
|
|
|
20,900
|
|
|
14,530
|
|
Residential
construction and land
|
|
—
|
|
|
—
|
|
|
4,495
|
|
Commercial
construction and land
|
|
25,746
|
|
|
26,272
|
|
|
15,220
|
|
Consumer
|
|
5,822
|
|
|
5,790
|
|
|
8,587
|
|
Total nonaccrual
loans
|
|
86,045
|
|
|
69,539
|
|
|
59,537
|
|
Total nonperforming
loans
|
|
86,045
|
|
|
69,539
|
|
|
59,537
|
|
Other real estate
owned and repossessed assets
|
|
14,389
|
|
|
19,794
|
|
|
24,259
|
|
Total nonperforming
assets
|
|
$
|
100,434
|
|
|
$
|
89,333
|
|
|
$
|
83,796
|
|
|
|
|
|
|
|
|
Other Credit
Quality Information:
|
|
|
|
|
|
|
Commercial criticized
and classified loans (1)
|
|
|
|
|
|
|
Special
mention
|
|
$
|
47,919
|
|
|
$
|
43,938
|
|
|
$
|
58,025
|
|
Substandard
|
|
23,547
|
|
|
26,514
|
|
|
22,608
|
|
Nonaccrual
|
|
80,223
|
|
|
63,749
|
|
|
50,950
|
|
Total commercial
criticized and classified loans
|
|
$
|
151,689
|
|
|
$
|
134,201
|
|
|
$
|
131,583
|
|
Loans contractually
past due 30 – 89 days and still accruing
|
|
$
|
5,658
|
|
|
$
|
4,522
|
|
|
$
|
6,111
|
|
Performing
restructured loans
|
|
20,031
|
|
|
21,928
|
|
|
17,456
|
|
Recorded balance of
impaired loans
|
|
100,464
|
|
|
86,700
|
|
|
70,343
|
|
Allowance for loan
losses related to impaired loans
|
|
16,169
|
|
|
16,330
|
|
|
12,057
|
|
|
|
|
|
|
|
|
Allowance for Loan
Losses Summary:
|
|
|
|
|
|
|
Allowance at
beginning of period
|
|
$
|
83,576
|
|
|
$
|
82,150
|
|
|
$
|
79,667
|
|
(Charge-offs), net of
recoveries:
|
|
|
|
|
|
|
Commercial and
commercial real estate
|
|
1,291
|
|
|
870
|
|
|
1,793
|
|
Real estate –
construction and land
|
|
—
|
|
|
48
|
|
|
125
|
|
Consumer
|
|
(154)
|
|
|
(192)
|
|
|
(594)
|
|
Total net
(charge-offs) recoveries
|
|
1,137
|
|
|
726
|
|
|
1,324
|
|
Provision for loan
losses
|
|
300
|
|
|
700
|
|
|
1,200
|
|
Allowance at end of
period
|
|
$
|
85,013
|
|
|
$
|
83,576
|
|
|
$
|
82,191
|
|
|
|
|
|
|
|
|
Key Credit
Ratios:
|
|
|
|
|
|
|
Nonperforming loans
to total loans (2)
|
|
2.37
|
%
|
|
2.11
|
%
|
|
1.88
|
%
|
Nonperforming assets
to total loans plus repossessed property (2)
|
|
2.76
|
%
|
|
2.69
|
%
|
|
2.62
|
%
|
Nonperforming assets
to total assets
|
|
1.67
|
%
|
|
1.51
|
%
|
|
1.44
|
%
|
Annualized net
charge-offs (recoveries) to average total loans
(2)
|
|
(0.13)
|
%
|
|
(0.09)
|
%
|
|
(0.17)%
|
|
Allowance to total
loans at end of period (excluding loans held for sale)
|
|
2.34
|
%
|
|
2.53
|
%
|
|
2.59
|
%
|
Allowance to
nonperforming loans
|
|
98.80
|
%
|
|
120.19
|
%
|
|
138.05
|
%
|
30 – 89 days past due
to total loans (2)
|
|
0.16
|
%
|
|
0.14
|
%
|
|
0.19
|
%
|
(1)
|
Commercial criticized
and classified loans excludes consumer loans.
|
(2)
|
During the fourth
quarter 2012, the Company revised its methodology for calculating
these metrics to exclude loans held for sale from total
loans.
|
LOAN PORTFOLIO AGING
(unaudited)
(dollars in
thousands)
|
|
|
|
As of September 30,
2013
|
|
|
30-89 Days Past
Due
|
|
>90 Days Past
Due and Still Accruing
|
|
Nonaccrual
|
|
Current
|
|
Total
Loans
|
|
% of Total
Loans
|
|
Allowance for Loan
Loss Allocation
|
Commercial and
industrial
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,893
|
|
|
$
|
1,882,679
|
|
|
$
|
1,902,572
|
|
|
52
|
%
|
|
$
|
38,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate secured:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial non-owner
occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail strip centers
or malls
|
|
—
|
|
|
—
|
|
|
15,854
|
|
|
88,741
|
|
|
104,595
|
|
|
3
|
%
|
|
4,428
|
|
Office/mixed use
property
|
|
—
|
|
|
—
|
|
|
1,177
|
|
|
120,506
|
|
|
121,683
|
|
|
3
|
%
|
|
2,166
|
|
Commercial
properties
|
|
—
|
|
|
—
|
|
|
408
|
|
|
102,275
|
|
|
102,683
|
|
|
3
|
%
|
|
2,113
|
|
Specialized –
other
|
|
—
|
|
|
—
|
|
|
4,541
|
|
|
94,868
|
|
|
99,409
|
|
|
3
|
%
|
|
1,489
|
|
Other commercial
properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,739
|
|
|
20,739
|
|
|
1
|
%
|
|
326
|
|
Farmland
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,285
|
|
|
2,285
|
|
|
—
|
%
|
|
36
|
|
Subtotal commercial
non-owner occupied
|
|
—
|
|
|
—
|
|
|
21,980
|
|
|
429,414
|
|
|
451,394
|
|
|
13
|
%
|
|
10,558
|
|
Commercial
owner-occupied
|
|
290
|
|
|
—
|
|
|
12,355
|
|
|
524,563
|
|
|
537,208
|
|
|
15
|
%
|
|
8,918
|
|
Multi-family
properties
|
|
156
|
|
|
—
|
|
|
249
|
|
|
124,526
|
|
|
124,931
|
|
|
3
|
%
|
|
2,195
|
|
Total commercial
real
estate
secured
|
|
446
|
|
|
—
|
|
|
34,584
|
|
|
1,078,503
|
|
|
1,113,533
|
|
|
31
|
%
|
|
21,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
construction and land:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,680
|
|
|
33,680
|
|
|
1
|
%
|
|
4,366
|
|
Land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,116
|
|
|
16,116
|
|
|
—
|
%
|
|
2,088
|
|
Total residential
construction and
land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,796
|
|
|
49,796
|
|
|
1
|
%
|
|
6,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction and land
|
|
—
|
|
|
—
|
|
|
25,746
|
|
|
89,952
|
|
|
115,698
|
|
|
3
|
%
|
|
10,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease receivables,
net of unearned discount
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,697
|
|
|
98,697
|
|
|
3
|
%
|
|
592
|
|
Total commercial
loans
|
|
446
|
|
|
—
|
|
|
80,223
|
|
|
3,199,627
|
|
|
3,280,296
|
|
|
90
|
%
|
|
77,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
|
5,212
|
|
|
—
|
|
|
5,822
|
|
|
337,328
|
|
|
348,362
|
|
|
10
|
%
|
|
7,953
|
|
Total
loans
|
|
$
|
5,658
|
|
|
$
|
—
|
|
|
$
|
86,045
|
|
|
$
|
3,536,955
|
|
|
$
|
3,628,658
|
|
|
100
|
%
|
|
$
|
85,013
|
|
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 Three
Months Ended
|
|
|
September 30,
2013
|
|
|
June 30, 2013
|
|
|
September 30,
2012
|
|
|
Average
Balance
|
|
Percent of
Deposits
|
|
Average
Balance
|
|
Percent of
Deposits
|
|
Average
Balance
|
|
Percent of
Deposits
|
Noninterest-bearing
deposits
|
$
|
1,061,917
|
|
|
27.7
|
%
|
|
$
|
1,195,709
|
|
|
32.4
|
%
|
|
$
|
1,081,568
|
|
|
33.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial interest
checking
|
315,722
|
|
|
8.2
|
|
|
159,627
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
NOW
accounts
|
597,461
|
|
|
15.6
|
|
|
674,375
|
|
|
18.3
|
|
|
376,980
|
|
|
11.5
|
|
Savings
deposits
|
41,236
|
|
|
1.1
|
|
|
40,920
|
|
|
1.1
|
|
|
39,690
|
|
|
1.2
|
|
Money market
accounts
|
783,974
|
|
|
20.5
|
|
|
768,425
|
|
|
20.8
|
|
|
700,357
|
|
|
21.4
|
|
Brokered money market
deposits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,365
|
|
|
1.0
|
|
Certificates of
deposit
|
546,152
|
|
|
14.3
|
|
|
550,454
|
|
|
14.9
|
|
|
560,962
|
|
|
17.1
|
|
Brokered certificates
of deposit
|
220,323
|
|
|
5.8
|
|
|
162,299
|
|
|
4.4
|
|
|
255,219
|
|
|
7.8
|
|
CDARS time
deposits
|
224,083
|
|
|
5.9
|
|
|
127,802
|
|
|
3.5
|
|
|
206,674
|
|
|
6.3
|
|
Public time
deposits
|
38,315
|
|
|
0.9
|
|
|
10,635
|
|
|
0.3
|
|
|
21,543
|
|
|
0.7
|
|
Total
interest-bearing deposits
|
2,767,266
|
|
|
72.3
|
|
|
2,494,537
|
|
|
67.6
|
|
|
2,193,790
|
|
|
67.0
|
|
Total
deposits
|
$
|
3,829,183
|
|
|
100.0
|
%
|
|
$
|
3,690,246
|
|
|
100.0
|
%
|
|
$
|
3,275,358
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth the period end balances of total
deposits as of each of the dates indicated below.
|
|
|
|
September 30,
2013
|
|
June 30,
2013
|
|
December 31,
2012
|
Noninterest-bearing
deposits
|
|
$
|
1,010,789
|
|
|
$
|
1,138,839
|
|
|
$
|
1,179,724
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
Commercial interest
checking
|
|
305,111
|
|
|
336,903
|
|
|
—
|
|
NOW
accounts
|
|
632,105
|
|
|
537,103
|
|
|
573,133
|
|
Savings
accounts
|
|
40,166
|
|
|
41,576
|
|
|
39,915
|
|
Money market
accounts
|
|
761,590
|
|
|
771,382
|
|
|
744,791
|
|
Brokered money market
deposits
|
|
—
|
|
|
—
|
|
|
27,840
|
|
Certificates of
deposit
|
|
522,433
|
|
|
557,656
|
|
|
561,998
|
|
Brokered certificates
of deposit
|
|
235,405
|
|
|
160,408
|
|
|
199,604
|
|
CDARS time
deposits
|
|
135,013
|
|
|
132,552
|
|
|
186,187
|
|
Public time
deposits
|
|
54,584
|
|
|
16,007
|
|
|
15,150
|
|
Total
interest-bearing deposits
|
|
2,686,407
|
|
|
2,553,587
|
|
|
2,348,618
|
|
Total
deposits
|
|
$
|
3,697,196
|
|
|
$
|
3,692,426
|
|
|
$
|
3,528,342
|
|
SUMMARY OF QUARTERLY
SEGMENT FINANCIAL DATA (unaudited)
(dollars in
thousands)
|
|
|
|
|
For the Three
Months Ended
|
|
|
Sep
30,
2013
|
|
Jun
30,
2013
|
|
Mar
31,
2013
|
|
Dec
31,
2012
|
|
Sep
30,
2012
|
BANKING:
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
40,780
|
|
|
$
|
37,175
|
|
|
$
|
36,181
|
|
|
$
|
36,696
|
|
|
$
|
36,530
|
|
Provision for loan
losses
|
|
233
|
|
|
946
|
|
|
292
|
|
|
1,200
|
|
|
805
|
|
Total noninterest
income
|
|
7,284
|
|
|
7,528
|
|
|
7,647
|
|
|
7,518
|
|
|
6,527
|
|
Total noninterest
expense
|
|
23,473
|
|
|
25,770
|
|
|
25,468
|
|
|
25,817
|
|
|
26,389
|
|
Income before income
taxes
|
|
24,358
|
|
|
17,987
|
|
|
18,068
|
|
|
17,197
|
|
|
15,863
|
|
Income tax
expense
|
|
9,621
|
|
|
7,105
|
|
|
7,136
|
|
|
6,793
|
|
|
6,266
|
|
Net income
|
|
$
|
14,737
|
|
|
$
|
10,882
|
|
|
$
|
10,932
|
|
|
$
|
10,404
|
|
|
$
|
9,597
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
Sep
30,
2013
|
|
Jun
30,
2013
|
|
Mar
31,
2013
|
|
Dec
31,
2012
|
|
Sep
30,
2012
|
MORTGAGE
BANKING:
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
6,499
|
|
|
$
|
5,742
|
|
|
$
|
6,414
|
|
|
$
|
5,902
|
|
|
$
|
4,575
|
|
Provision for loan
losses
|
|
67
|
|
|
(246)
|
|
|
8
|
|
|
—
|
|
|
95
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
Loan origination
income
|
|
17,249
|
|
|
29,355
|
|
|
26,430
|
|
|
38,906
|
|
|
39,640
|
|
Net servicing
income
|
|
7,896
|
|
|
9,176
|
|
|
5,600
|
|
|
5,495
|
|
|
1,040
|
|
Total noninterest
income
|
|
25,145
|
|
|
38,531
|
|
|
32,030
|
|
|
44,401
|
|
|
40,680
|
|
Total noninterest
expense
|
|
29,063
|
|
|
29,086
|
|
|
26,287
|
|
|
29,466
|
|
|
25,840
|
|
Income before income
taxes
|
|
2,514
|
|
|
15,433
|
|
|
12,149
|
|
|
20,837
|
|
|
19,320
|
|
Income tax expense
(benefit)
|
|
(19)
|
|
|
4,928
|
|
|
3,375
|
|
|
7,540
|
|
|
7,060
|
|
Net income
|
|
$
|
2,533
|
|
|
$
|
10,505
|
|
|
$
|
8,774
|
|
|
$
|
13,297
|
|
|
$
|
12,260
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination
Volume
|
|
$
|
1,596,431
|
|
|
$
|
1,874,248
|
|
|
$
|
1,907,642
|
|
|
$
|
1,947,356
|
|
|
$
|
1,384,726
|
|
Refinance
%
|
|
37
|
%
|
|
62
|
%
|
|
77
|
%
|
|
77
|
%
|
|
69
|
%
|
Purchase %
|
|
63
|
%
|
|
38
|
%
|
|
23
|
%
|
|
23
|
%
|
|
31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Balances
|
|
|
Sep
30,
2013
|
|
Jun
30,
2013
|
|
Mar
31,
2013
|
|
Dec
31,
2012
|
|
Sep
30,
2012
|
Mortgage servicing
book
|
|
$
|
16,431,269
|
|
|
$
|
12,740,176
|
|
|
$
|
10,506,034
|
|
|
$
|
8,533,785
|
|
|
$
|
6,237,912
|
|
Mortgage servicing
rights
|
|
184,237
|
|
|
145,729
|
|
|
106,576
|
|
|
78,917
|
|
|
53,218
|
|
The Company has identified two operating segments for purposes
of financial reporting: Banking and Mortgage Banking. The
Banking operating segment includes commercial banking, asset-based
lending, equipment finance, retail banking and all other functions
that support those units. The Mortgage Banking operating
segment originates mortgage loans for sale to investors and for the
Company's portfolio through its retail and broker channels.
This segment also services mortgage loans for various investors and
for loans owned by the Company. Segment results are presented
based on our management accounting practices. The information
presented in our segment reporting is based on internal
allocations, which involve management judgment and is subject to
periodic adjustments and enhancements. In addition, the
Company utilizes an Other category that includes certain parent
company activities and residual income tax expense or benefit.
RECONCILIATION OF
U.S. GAAP FINANCIAL MEASURES (unaudited)
(dollars in
thousands)
|
|
The following, as of the dates indicated, reconciles the income
before income taxes to pre-tax, pre-provision operating
earnings.
|
|
|
|
For the Three
Months Ended
|
|
|
September 30,
2013
|
|
June
30,
2013
|
|
March
31,
2013
|
|
December
31,
2012
|
|
September
30,
2012
|
Income before income
taxes
|
|
$
|
23,657
|
|
$
|
26,212
|
|
$
|
28,347
|
|
$
|
35,988
|
|
$
|
27,647
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
|
|
Credit
costs:
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
|
300
|
|
700
|
|
300
|
|
1,200
|
|
900
|
Nonperforming asset expense
|
|
(836)
|
|
(1,198)
|
|
559
|
|
2,816
|
|
613
|
Credit costs
subtotal
|
|
(536)
|
|
(498)
|
|
859
|
|
4,016
|
|
1,513
|
Other:
|
|
|
|
|
|
|
|
|
|
|
Gain on
sales of investment securities
|
|
(61)
|
|
(6)
|
|
(1)
|
|
(1,488)
|
|
—
|
Early
extinguishment of debt
|
|
—
|
|
5,380
|
|
—
|
|
63
|
|
3,670
|
Other
subtotal
|
|
(61)
|
|
5,374
|
|
(1)
|
|
(1,425)
|
|
3,670
|
Pre-tax,
pre-provision operating earnings
|
|
$
|
23,060
|
|
$
|
31,088
|
|
$
|
29,205
|
|
$
|
38,579
|
|
$
|
32,830
|
|
The following, as of the dates indicated, details the components of
revenue.
|
|
|
|
For the Three
Months Ended
|
|
|
September 30,
2013
|
|
June
30,
2013
|
|
March
31,
2013
|
|
December
31,
2012
|
|
September
30,
2012
|
Net interest
income
|
|
$
|
46,027
|
|
$
|
41,082
|
|
$
|
40,683
|
|
$
|
40,510
|
|
$
|
37,196
|
Noninterest
income
|
|
32,472
|
|
46,101
|
|
39,719
|
|
51,962
|
|
47,250
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of
investment securities
|
|
(61)
|
|
(6)
|
|
(1)
|
|
(1,488)
|
|
—
|
Revenue
|
|
$
|
78,438
|
|
$
|
87,177
|
|
$
|
80,401
|
|
$
|
90,984
|
|
$
|
84,446
|
The Company's accounting and reporting policies conform to U.S.
generally accepted accounting principles ("GAAP") and general
practice within the banking industry. Management uses certain
non-GAAP financial measures to evaluate the Company's financial
performance and has provided the non-GAAP measures of pre-tax,
pre-provision operating earnings and of revenue. In the
pre-tax, pre-provision operating earnings non-GAAP financial
measure, the provision for loan losses, nonperforming asset expense
and certain non-recurring items, such as gains and losses on
investment securities and early extinguishment of debt are excluded
from the determination of operating results. The non-GAAP
measure of revenue is calculated as the sum of net interest income
and noninterest income adjusted by investment securities gains and
losses. Management believes that these measures are useful
because they provide a more comparable basis for evaluating
financial performance from period to period.
SOURCE Taylor Capital Group, Inc.