CHICAGO, Jan. 22, 2014 /PRNewswire/ -- 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 2013.
Net income for the fourth quarter was $15.0 million, compared to $14.2 million for the third quarter of
2013. Net income for the full year 2013 was $62.0 million, compared to $61.9 million for the full year 2012. Net
income applicable to common stockholders for the quarter was
$10.1 million, or $0.33 per diluted share, compared to $10.6 million, or $0.34 per diluted share, for the third quarter of
2013. The results for the fourth and third quarters of 2013
included $4.5 million and
$2.0 million, respectively, of
pre-tax expense, relating to the previously announced pending
merger with MB Financial, Inc. and other strategic initiatives,
totaling $6.5 million for the
year. The following table compares selected financial
information for the periods indicated:
(dollars in
millions)
|
4Q13
|
|
3Q13
|
|
Change from 3Q13
to 4Q13
|
|
Full Year
2013
|
|
Full Year
2012
|
Change from 2012
to 2013
|
Total commercial
loans (period end)
|
$3,359.4
|
|
$3,290.4
|
|
2.1
|
%
|
|
$3,359.4
|
|
$2,757.0
|
|
21.8
|
%
|
Average total
deposits
|
$3,867.4
|
|
$3,829.2
|
|
1.0
|
%
|
|
$3,786.8
|
|
$3,253.1
|
|
16.4
|
%
|
Net interest
income
|
$45.2
|
|
$46.0
|
|
(1.8)
|
%
|
|
$173.0
|
|
$149.9
|
|
15.4
|
%
|
Net interest
margin
|
3.41 %
|
|
3.41 %
|
|
—
|
%
|
|
3.29 %
|
|
3.26 %
|
|
0.03
|
%
|
Mortgage banking
revenue
|
$27.2
|
|
$25.1
|
|
8.0
|
%
|
|
$122.9
|
|
$125.5
|
|
(2.1)
|
%
|
Loan loss
provision
|
$1.1
|
|
$0.3
|
|
266.7
|
%
|
|
$2.4
|
|
$9.6
|
|
(74.9)
|
%
|
Net income
|
$15.0
|
|
$14.2
|
|
5.6
|
%
|
|
$62.0
|
|
$61.9
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"The fourth quarter of 2013 capped off a strong year of growth
for Cole Taylor," said Mark A Hoppe,
President and Chief Executive Officer of the Company. "Our
banking segment continued to expand in the fourth quarter, and for
the full year achieved a 22% increase in loans outstanding.
This commercial loan growth demonstrated a broad geographical and
product line diversification, with all of our commercial lending
businesses experiencing double-digit growth for the year.
Reflecting on the quality of our loan portfolio, our 2013 loan loss
provision of $2.4 million was the
lowest since becoming a public company in 2002. Our strong
earnings over the last two years allowed us to continue to reduce
our higher-cost funding, which is reflected in interest expense for
the year being down 32% from 2012."
"Despite an ongoing industry-wide slowdown in mortgage refinance
activity, particularly in the second half of the year, our mortgage
business demonstrated its adaptability by growing origination
volume over 26% in 2013 and increasing market share," Hoppe
added. "The benefits of having a balanced mortgage banking
operation were apparent as servicing revenue increased over 68% in
the fourth quarter of 2013 from the third quarter."
Hoppe concluded, "Our integration planning with MB Financial,
Inc. continues as anticipated with a dedicated team focused on the
transition. But it's important to note that during this
period of change, our customers are, and always will be, our
primary focus. I am very grateful for the commitment our
valued customers and our dedicated employees have demonstrated,
particularly during this transition, which enabled us to grow
relationships, to have a successful year and to be well positioned
for the future."
FOURTH QUARTER 2013 HIGHLIGHTS - COMPARISON TO THIRD QUARTER
2013
- Total commercial loans grew $69.0
million, or 2.1%, from September 30,
2013
- Net interest income was $45.2
million for the fourth quarter of 2013, as compared to
$46.0 million for the third quarter
of 2013
- Mortgage banking revenue was $27.2
million for the fourth quarter of 2013, up $2.0 million, or 8.0%, from the third quarter of
2013.
- Mortgage origination volume was $1.2
billion for the fourth quarter of 2013, as compared to
$1.6 billion from the third quarter
of 2013
- Gain on sale of investment securities increased $5.8 million from the third quarter of 2013
- The Company accelerated the declaration of the $2.0 million February 17,
2014 Series A Preferred dividend into the fourth quarter of
2013
- As of December 31, 2013, the
Company's Tier I Risk Based Capital ratio was 11.40%, its Total
Risk Based Capital ratio was 12.65% and its Tier I Capital to
Average Assets leverage ratio was 9.18%
- Return on Average Common Equity was 10.84% for the fourth
quarter of 2013, as compared to 11.69% for the third quarter of
2013
- Return on Average Assets was 1.09% for the fourth quarter of
2013, as compared to 0.96% for the third quarter of 2013
Credit quality indicators as compared to the third quarter of
2013
- Nonperforming loans were $81.8
million and 2.24% of total loans at December 31, 2013, compared to $86.0 million and 2.37% of total loans at
September 30, 2013
- At December 31, 2013, commercial
criticized and classified loans(1) totaled $188.0 million, compared to $151.7 million at September 30, 2013
- Other real estate owned ("OREO") and repossessed assets were
$10.0 million at December 31, 2013, down from $14.4 million at September
30, 2013
- The allowance for loan losses as a percent of nonperforming
loans was 100.05% at December 31,
2013, compared to 98.80% at September
30, 2013
- Credit costs(2) were $3.3
million for the fourth quarter of 2013, compared to a
negative $536,000 for the third
quarter of 2013
FULL YEAR 2013 HIGHLIGHTS - COMPARISON TO FULL YEAR
2012
- Total commercial loans increased to $3.36 billion at December
31, 2013, up $602.4 million,
or 21.8%, from December 31, 2012
- Core deposits grew to $2.73
billion at December 31, 2013,
up $193.9 million, or 7.6%, from
December 31, 2012
- Net interest income increased to $173.0
million for 2013, up $23.1
million, or 15.4%, from 2012
- OREO and repossessed assets decreased to $10.0 million at December
31, 2013, down $14.2 million,
or 58.6%, from December 31, 2012
- Net income for the Banking Segment increased to $51.0 million for 2013, up 35.2% from 2012
- Net income for the Mortgage Banking Segment was $24.4 million for 2013, down 35.1% from 2012
- Mortgage origination volume increased to $6.55 billion for 2013, up $1.36 billion, or 26.2%,from 2012
- Pre-tax, pre-provision operating earnings(3) were
$102.5 million for 2013, down 15.0%
as compared to 2012
- Repaid in full the $104.8 million
of Series B Preferred Stock
- Prepaid in full the $37.5 million
outstanding 8.0% subordinated notes
FULL YEAR 2013 AND FOURTH QUARTER 2013 PERFORMANCE
OVERVIEW
Results of Operations - Comparisons to Third Quarter
2013
Net income for the fourth quarter of 2013 was $15.0 million, compared to $14.2 million for the third quarter of 2013, an
increase of 5.6%. Net income applicable to common
stockholders for the fourth quarter of 2013 was $10.1 million, compared to $10.6 million for the third quarter of
2013. In the fourth quarter of 2013, there were two quarterly
dividends of $2.0 million each
recorded on the Series A Preferred Stock, as compared to only one
quarterly dividend recorded in the third quarter of 2013.
Income before income taxes was $21.7
million for the fourth quarter of 2013, compared to
$23.7 million for the third quarter
of 2013, a decrease of 8.4%. The decrease was primarily due
to a $3.3 million increase in
occupancy expense related to the pending merger with MB Financial,
Inc., a $3.1 million increase in
nonperforming asset expense primarily due to resolutions of certain
other real estate owned properties and a $800,000 increase in the loan loss
provision. These increases in expense were partially offset
by a $5.8 million increase in gain on
sales of investment securities as part of a planned reduction in
the investment portfolio.
Pre-tax, pre-provision operating earnings totaled $19.1 million for the fourth quarter of 2013,
compared to $23.1 million for the
third quarter of 2013, a decrease of 17.3%. The decrease was
primarily due to an increase in costs related to the pending merger
with MB Financial, Inc.
Income tax expense was $6.7
million for the fourth quarter of 2013, compared to
$9.5 million for the third quarter of
2013, a decrease of 29.5%. The quarter over quarter decrease
in income tax expense is the result of a reduction in income before
income taxes and the year-to-date impact of changes in the
applicable statutory state income tax rates combined with
fluctuations in the levels of income earned in the states where
income tax returns are required to be filed.
Revenue(4)
Revenue totaled $79.0 million for
the fourth quarter of 2013, compared to $78.4 million for the third quarter of 2013, an
increase of 0.8%.
Net interest income was $45.2
million for the fourth quarter of 2013, as compared to
$46.0 million for the third quarter
of 2013. The decrease in net interest income reflected a
decrease in interest income, which was primarily the result of a
volume-related reduction in consumer mortgage loans held for sale
and a planned reduction in the investment securities
portfolio. Partially offsetting the decrease in interest
income was reduced interest expense primarily due to lower rates
paid on deposit balances and a reduction in short-term
borrowings.
Noninterest income, excluding investment security gains and
losses, was $33.7 million for the
fourth quarter of 2013, compared to $32.4
million for the third quarter of 2013, an increase of
4.0%. The increase was primarily due to a $2.0 million increase in mortgage banking revenue
driven by increased servicing revenue partially offset by lower
origination income. Servicing revenue increased $5.3 million in the fourth quarter of 2013, due
to growth in the mortgage servicing right ("MSR") assets due to the
combination of retention of MSR's on loans originated by Cole
Taylor Mortgage, purchases of MSR's and an increase in the
valuation of the MSR asset primarily due to an increase in interest
rates during the fourth quarter. Partially offsetting these
increases was a volume-related decrease in mortgage origination
income of $3.3 million. Total
mortgage originations were $1.17
billion in the fourth quarter of 2013, down 26.8% from the
third quarter.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense, was
$59.8 million for the fourth quarter
of 2013, compared to $55.4 million
for the third quarter of 2013, an increase of $4.4 million, or 7.9%. The increase was
primarily due to $3.3 million in
early lease termination expense and other costs related to the
pending merger with MB Financial, Inc.
Results of Operations - Full Year 2013
Net income for 2013 was $62.0
million, compared to $61.9
million for 2012, an increase of 0.2%. Net income
applicable to common stockholders for 2013 was $46.1 million, compared to $54.9 million for 2012.
Income before income taxes was $99.9
million for 2013, compared to $103.6
million for 2013, a decrease of 3.6%. The decrease was
primarily due to a $36.9 million
increase in noninterest expense, partially offset by a $23.1 million increase in net interest income and
a $7.2 million decrease in provision
for loan losses.
Pre-tax, pre-provision operating earnings totaled $102.5 million for 2013, compared to $120.5 million for 2012, a decrease of
14.9%. The decrease was primarily due to a $43.4 million increase in noninterest expense,
excluding nonperforming asset expense and early extinguishment of
debt expense, partially offset by a $23.1
million increase in net interest
income.
Revenue
Revenue totaled $325.0 million for
2013, compared to $299.6 million for
2012, an increase of 8.5%.
Net interest income was $173.0
million for 2013, as compared to $149.9 million for 2012, an increase of
$23.1 million or 15.4% due to both
increased interest income and lower interest expense.
Interest income increased $11.5
million in 2013 primarily due to growth in average earning
assets for the year including loans of $385.5 million, loans held for sale of
$188.7 million and investment
securities of $169.1 million.
The tax equivalent yield on earning assets decreased 29 basis
points to 3.75% in 2013, which partially offset the increase in
average asset balances. Interest expense decreased
$11.6 million in 2013 primarily due
the retirement of the 10% subordinated notes in September 2012 and the 8% subordinated notes in
June 2013 and lower average rates and
balances on time deposits. The total yield on
interest-bearing liabilities fell 43 basis points to 0.62% in
2013.
Noninterest income, excluding investment security gains and
losses, was $152.0 million for 2013,
compared to $149.6 million for 2012,
an increase of $2.4 million or
1.6%. The increase was primarily due to a $2.2 million increase in other derivative income
due to customer swap fees and a $2.2
million increase in other noninterest income partially
offset by a $2.6 million decrease in
mortgage banking revenue due to lower mortgage origination
income.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and
early extinguishment of debt expense, was $222.5 million for 2013, compared to $179.1 million for 2012 an increase of
$43.4 million, or 24.2%. The
increase in noninterest expense consisted of a $17.6 million increase in salaries and employee
benefits, a $8.2 million increase in
outside services, a $6.3 million
increase in other noninterest expense and a $5.4 million increase in occupancy of premises,
furniture and equipment expense.
The $17.6 million increase in
salaries and employee benefits in 2013 was comprised of a
$25.4 million increase in salaries,
taxes and benefits primarily due to additional employees added to
Cole Taylor Mortgage to support increased origination volume and
the establishment of its in-house servicing platform, partially
offset by an $8.6 million decrease in
performance-based incentive compensation expense.
Outside service expense increased $8.2
million in 2013 primarily due to increased mortgage loan
origination volume at Cole Taylor Mortgage along with increased
subservice fees and other volume driven servicing-related expenses
as a result of the increased size of the servicing
platform.
Other noninterest expense increased $6.3
million in 2013 primarily related to an increase in volume
driven expenses from the growth of mortgage originations, the
expansion of mortgage retail offices and the creation of the new
in-house servicing operation.
Preferred Dividends and Discounts
As the table below indicates, the increase in preferred
dividends and discounts in 2013 was primarily due to the issuance
of the Series A Preferred stock in November 2012. In
addition, the quarterly dividend on the Series A Preferred stock of
$2.0 million, which typically would
have been recorded in the first quarter of 2014, was instead
declared and recorded in the fourth quarter of 2013, as required by
the Series A Preferred terms and in connection with the repurchase
of the Series B Preferred stock. The Series B Preferred stock
was fully repaid in 2013 and has been cancelled.
(in
thousands)
|
2013
|
|
2012
|
|
Change from 2012
to 2013
|
Series A Preferred
dividends
|
$9,889
|
|
$0
|
|
$9,889
|
Series B Preferred
dividends and discounts
|
6,011
|
|
7,012
|
|
(1,001)
|
Total Preferred
dividends and discounts
|
$15,900
|
|
$7,012
|
|
$8,888
|
|
Credit Quality
Loan Portfolio Performance and Credit Quality
Total commercial criticized and classified loans were
$188.0 million at December 31, 2013, as compared to $151.7 million at September 30, 2013 and $131.6 million at December
31, 2012. The increase in criticized and classified
loans in the fourth quarter of 2013 was largely attributable to
downgrades in the commercial and industrial loan
portfolio.
Nonperforming loans were $81.8
million at December 31, 2013,
as compared to $86.0 million at
September 30, 2013, and $59.5 million at December
31, 2012. The decrease in the fourth quarter of 2013
was due to charge-offs and pay downs of certain nonperforming
loans.
OREO and repossessed assets were $10.0
million at December 31, 2013,
down from $14.4 million at
September 30, 2013 and $24.3 million at December
31, 2012. The decrease was primarily due to sales as
we continue to actively manage the resolution
process.
Total nonperforming assets were $91.9
million at December 31, 2013,
compared to $100.4 million at
September 30, 2013 and $83.8 million at December
31, 2012. Nonperforming assets to total assets were
1.62% at December 31, 2013, compared
to 1.67% at September 30, 2013 and
1.44% at December 31,
2012.
Allowance and Provision for Loan Losses
The allowance for loan losses was $81.9
million at December 31, 2013,
compared to $85.0 million at
September 30, 2013 and $82.2 million at December
31, 2012. The decrease from September 30, 2013 was primarily due to
charge-offs of loans which had specific reserves. The
allowance for loan losses as a percent of nonperforming loans was
100.05% at December 31, 2013, as
compared to 98.80% at September 30,
2013 and 138.05% at December
31, 2012.
The provision for loan losses was $1.1
million for the fourth quarter of 2013, compared to
$300,000 for the third quarter of
2013 and $1.2 million in the fourth
quarter of
2012.
Balance Sheet
Assets
Total assets at December 31, 2013
were $5.69 billion, compared to
$6.01 billion at September 30, 2013.
Investment securities were $1.12
billion at December 31, 2013,
down $300.2 million from $1.42 billion at September
30, 2013 as a result of planned
sales.
Loans held for sale were $473.9
million at December 31, 2013,
a decrease of 4.9% from September 30,
2013. The decrease was primarily the result of reduced
mortgage origination volume for the fourth quarter by Cole Taylor
Mortgage.
Net loans at December 31, 2013
were $3.57 billion, up $22.9 million from $3.54
billion at September 30,
2013. Commercial and Industrial loans were $1.94 billion at December
31, 2013, an increase of 1.7% from $1.90 billion at September
30, 2013. This increase was driven primarily by an
increase in new loans from the Cole Taylor Equipment Finance
business line. Commercial real estate secured loans were
$1.12 billion at December 31, 2013, an increase of 1.0% from
September 30, 2013. Consumer
loans, which consist primarily of residential mortgages, were
$301.4 million at December 31, 2013, down $47.0 million from September 30, 2013, as a portion of the
residential mortgage portfolio was reclassified as held for
sale.
The MSR asset increased $31.9
million in the fourth quarter to $216.1 million as of December 31, 2013. The unpaid principal
balance of loans serviced was $18.5
billion as of December 31,
2013, up 12.6% from September
30, 2013. The Company invests in MSR's 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 December 31,
2013 were $5.22 billion, as
compared to $5.47 billion at
September 30, 2013.
Total deposits were $3.65 billion
at December 31, 2013, compared to
$3.70 billion at September 30, 2013. Total deposits
decreased in the fourth quarter primarily due to the on-going
planned reduction in time deposits.
Average total deposits for the fourth quarter of 2013 increased
slightly to $3.87 billion from
$3.83 billion in the third quarter of
2013, primarily due to growth in commercial interest-bearing demand
deposits.
Short-term borrowings decreased $187.3
million in the fourth quarter to $1.38 billion as of December 31, 2013, which was attributable to
reduced funding needs as a result of the planned reduction in the
investment portfolio.
Total stockholders' equity decreased $80.2 million from $544.7
million at September 30, 2013
to $464.6 million at December 31, 2013, primarily due to the
repurchase and redemption of all the remaining outstanding Series B
Preferred shares in the fourth quarter, which totaled $78.6 million for the fourth quarter of 2013,
including accrued dividends to the date of repurchase or
redemption, as applicable, and was planned in conjunction with the
pending merger with MB Financial, Inc. In addition,
accumulated other comprehensive income decreased $11.6 million resulting from a reduction in the
unrealized gain on available for sale securities due to an increase
in interest rates in the fourth quarter and the realized gains on
sale of investment securities. These declines were partially
offset by retaining the net income available to common stockholders
earned in the fourth quarter.
Capital
At December 31, 2013, the
Company's Tier I Risk Based Capital ratio was 11.40%, its Total
Risk Based Capital ratio was 12.65% and its Tier I Capital to
Average Assets leverage ratio was 9.18%.
Each of these 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 $5.7 billion as of
December 31, 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 2014 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 may 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 MSR
portfolio, which may increase the volatility of our earnings.
- Certain hedging strategies that we use to manage investment in
MSR's, 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 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 may not be able to access sufficient and cost-effective
sources of liquidity.
- We are subject to liquidity risk, including unanticipated
deposit volatility.
- 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 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 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
fourth 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"), which was declared effective by
the SEC on January 14, 2014. The
registration statement includes a joint proxy statement of MB
Financial and Taylor Capital that also constitutes a prospectus of
MB Financial, which, was mailed in definitive form to the
stockholders of MB Financial and Taylor Capital on or about
January 21, 2104. Stockholders are
advised to read 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)
|
|
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Dec. 31,
2012
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
90,817
|
|
|
$
|
122,407
|
|
|
$
|
166,385
|
|
Investment
securities
|
1,120,731
|
|
|
1,420,906
|
|
|
1,267,757
|
|
Loans held for
sale
|
473,890
|
|
|
498,276
|
|
|
938,379
|
|
Loans, net of
allowance for loan losses of $81,864 at December 31, 2013, $85,013
at September 30, 2013 and $82,191 at December 31, 2012
|
3,566,511
|
|
|
3,543,645
|
|
|
3,086,112
|
|
Premises, leasehold
improvements and equipment, net
|
26,919
|
|
|
25,391
|
|
|
16,062
|
|
Investment in Federal
Home Loan Bank and Federal Reserve Bank stock
|
64,612
|
|
|
74,342
|
|
|
74,950
|
|
Mortgage servicing
rights
|
216,111
|
|
|
184,237
|
|
|
78,917
|
|
Other real estate and
repossessed assets, net
|
10,049
|
|
|
14,389
|
|
|
24,259
|
|
Other
assets
|
116,178
|
|
|
131,101
|
|
|
149,589
|
|
Total
assets
|
$
|
5,685,818
|
|
|
$
|
6,014,694
|
|
|
$
|
5,802,410
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Noninterest-bearing
|
$
|
1,048,946
|
|
|
$
|
1,010,789
|
|
|
$
|
1,179,724
|
|
Interest-bearing
|
2,602,037
|
|
|
2,686,407
|
|
|
2,348,618
|
|
Total
deposits
|
3,650,983
|
|
|
3,697,196
|
|
|
3,528,342
|
|
Accrued interest,
taxes and other liabilities
|
105,350
|
|
|
120,521
|
|
|
131,473
|
|
Short-term
borrowings
|
1,378,327
|
|
|
1,565,651
|
|
|
1,463,019
|
|
Junior subordinated
debentures
|
86,607
|
|
|
86,607
|
|
|
86,607
|
|
Subordinated notes,
net
|
—
|
|
|
—
|
|
|
33,366
|
|
Total
liabilities
|
5,221,267
|
|
|
5,469,975
|
|
|
5,242,807
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock,
Series A
|
100,000
|
|
|
100,000
|
|
|
100,000
|
|
Preferred stock,
Series B
|
—
|
|
|
78,927
|
|
|
103,813
|
|
Nonvoting preferred
stock
|
13
|
|
|
13
|
|
|
13
|
|
Common
stock
|
307
|
|
|
307
|
|
|
302
|
|
Surplus
|
417,429
|
|
|
417,202
|
|
|
412,391
|
|
Accumulated
deficit
|
(17,430)
|
|
|
(27,518)
|
|
|
(63,537)
|
|
Accumulated other
comprehensive income (loss), net
|
(6,183)
|
|
|
5,373
|
|
|
36,206
|
|
Treasury
stock
|
(29,585)
|
|
|
(29,585)
|
|
|
(29,585)
|
|
Total
stockholders' equity
|
464,551
|
|
|
544,719
|
|
|
559,603
|
|
Total
liabilities and stockholders' equity
|
$
|
5,685,818
|
|
|
$
|
6,014,694
|
|
|
$
|
5,802,410
|
|
CONSOLIDATED
STATEMENTS OF INCOME (unaudited)
|
(dollars in
thousands, except per share data)
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Dec. 31,
2012
|
|
Dec. 31,
2013
|
|
Dec. 31,
2012
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
39,835
|
|
|
$
|
40,501
|
|
|
$
|
38,696
|
|
|
$
|
155,464
|
|
|
$
|
145,962
|
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
|
|
|
|
Taxable
|
7,670
|
|
|
8,332
|
|
|
7,974
|
|
|
33,017
|
|
|
37,078
|
|
Tax-exempt
|
2,875
|
|
|
2,826
|
|
|
1,013
|
|
|
9,205
|
|
|
3,100
|
|
Interest on cash
equivalents
|
—
|
|
|
2
|
|
|
1
|
|
|
4
|
|
|
8
|
|
Total
interest income
|
50,380
|
|
|
51,661
|
|
|
47,684
|
|
|
197,690
|
|
|
186,148
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
Deposits
|
3,324
|
|
|
3,697
|
|
|
4,352
|
|
|
15,498
|
|
|
19,100
|
|
Short-term
borrowings
|
408
|
|
|
491
|
|
|
492
|
|
|
1,792
|
|
|
2,248
|
|
Long-term
borrowings
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
612
|
|
Junior subordinated
debentures
|
1,444
|
|
|
1,446
|
|
|
1,457
|
|
|
5,777
|
|
|
5,859
|
|
Subordinated
notes
|
—
|
|
|
—
|
|
|
862
|
|
|
1,627
|
|
|
8,443
|
|
Total
interest expense
|
5,176
|
|
|
5,634
|
|
|
7,174
|
|
|
24,694
|
|
|
36,262
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
45,204
|
|
|
46,027
|
|
|
40,510
|
|
|
172,996
|
|
|
149,886
|
|
Provision for loan
losses
|
1,100
|
|
|
300
|
|
|
1,200
|
|
|
2,400
|
|
|
9,550
|
|
Net interest income
after provision for loan losses
|
44,104
|
|
|
45,727
|
|
|
39,310
|
|
|
170,596
|
|
|
140,336
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
Service
charges
|
3,571
|
|
|
3,572
|
|
|
3,461
|
|
|
14,139
|
|
|
13,530
|
|
Mortgage banking
revenue
|
27,171
|
|
|
25,148
|
|
|
44,285
|
|
|
122,882
|
|
|
125,505
|
|
Gain on sales of
investment securities, net
|
5,891
|
|
|
61
|
|
|
1,488
|
|
|
5,959
|
|
|
5,464
|
|
Other derivative
income
|
1,427
|
|
|
1,855
|
|
|
1,156
|
|
|
6,546
|
|
|
4,322
|
|
Other noninterest
income
|
1,580
|
|
|
1,836
|
|
|
1,572
|
|
|
8,406
|
|
|
6,226
|
|
Total
noninterest income
|
39,640
|
|
|
32,472
|
|
|
51,962
|
|
|
157,932
|
|
|
155,047
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
36,099
|
|
|
35,100
|
|
|
35,991
|
|
|
142,549
|
|
|
124,930
|
|
Occupancy of
premises, furniture and equipment
|
7,239
|
|
|
3,703
|
|
|
3,426
|
|
|
17,766
|
|
|
12,384
|
|
Nonperforming asset
expense
|
2,246
|
|
|
(836)
|
|
|
2,816
|
|
|
771
|
|
|
4,951
|
|
Early extinguishment
of debt
|
—
|
|
|
—
|
|
|
63
|
|
|
5,380
|
|
|
7,721
|
|
FDIC
assessment
|
1,946
|
|
|
1,963
|
|
|
1,830
|
|
|
7,692
|
|
|
6,795
|
|
Legal fees,
net
|
1,746
|
|
|
2,001
|
|
|
780
|
|
|
5,722
|
|
|
3,413
|
|
Loan expense,
net
|
2,081
|
|
|
2,195
|
|
|
2,410
|
|
|
9,542
|
|
|
6,815
|
|
Outside
services
|
3,300
|
|
|
3,535
|
|
|
1,545
|
|
|
12,149
|
|
|
3,914
|
|
Other noninterest
expense
|
7,422
|
|
|
6,881
|
|
|
6,423
|
|
|
27,076
|
|
|
20,814
|
|
Total
noninterest expense
|
62,079
|
|
|
54,542
|
|
|
55,284
|
|
|
228,647
|
|
|
191,737
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
21,665
|
|
|
23,657
|
|
|
35,988
|
|
|
99,881
|
|
|
103,646
|
|
Income tax
expense
|
6,701
|
|
|
9,488
|
|
|
14,530
|
|
|
37,874
|
|
|
41,745
|
|
Net income
|
14,964
|
|
|
14,169
|
|
|
21,458
|
|
|
62,007
|
|
|
61,901
|
|
Preferred dividends
and discounts
|
(4,876)
|
|
|
(3,583)
|
|
|
(1,765)
|
|
|
(15,900)
|
|
|
(7,012)
|
|
Net income applicable
to common stockholders
|
$
|
10,088
|
|
|
$
|
10,586
|
|
|
$
|
19,693
|
|
|
$
|
46,107
|
|
|
$
|
54,889
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
common share
|
$
|
0.33
|
|
|
$
|
0.35
|
|
|
$
|
0.66
|
|
|
$
|
1.51
|
|
|
$
|
1.84
|
|
Diluted income per
common share
|
0.33
|
|
|
0.34
|
|
|
0.65
|
|
|
1.50
|
|
|
1.79
|
|
Weighted-average
common shares outstanding
|
29,004,826
|
|
|
28,936,361
|
|
|
28,515,040
|
|
|
28,807,517
|
|
|
28,294,884
|
|
Weighted-average
diluted common shares outstanding
|
29,266,098
|
|
|
29,176,070
|
|
|
28,895,719
|
|
|
29,110,289
|
|
|
29,016,717
|
|
SUMMARY OF KEY
QUARTERLY FINANCIAL DATA
|
(dollars in
thousands)
|
Unaudited
|
|
|
2013
|
|
2012
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
|
Fourth
Quarter
|
Condensed Income
Data:
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
45,204
|
|
|
$
|
46,027
|
|
|
$
|
41,082
|
|
|
$
|
40,683
|
|
|
$
|
40,510
|
|
Provision for loan
losses
|
1,100
|
|
|
300
|
|
|
700
|
|
|
300
|
|
|
1,200
|
|
Total noninterest
income
|
39,640
|
|
|
32,472
|
|
|
46,101
|
|
|
39,719
|
|
|
51,962
|
|
Total noninterest
expense
|
62,079
|
|
|
54,542
|
|
|
60,271
|
|
|
51,755
|
|
|
55,284
|
|
Income before income
taxes
|
21,665
|
|
|
23,657
|
|
|
26,212
|
|
|
28,347
|
|
|
35,988
|
|
Income tax
expense
|
6,701
|
|
|
9,488
|
|
|
10,595
|
|
|
11,090
|
|
|
14,530
|
|
Net income
|
14,964
|
|
|
14,169
|
|
|
15,617
|
|
|
17,257
|
|
|
21,458
|
|
Preferred dividends
and discounts
|
(4,876)
|
|
|
(3,583)
|
|
|
(3,780)
|
|
|
(3,661)
|
|
|
(1,765)
|
|
Net income applicable
to common stockholders
|
$
|
10,088
|
|
|
$
|
10,586
|
|
|
$
|
11,837
|
|
|
$
|
13,596
|
|
|
$
|
19,693
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
of Performance: (1)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
78,953
|
|
|
$
|
78,438
|
|
|
$
|
87,177
|
|
|
$
|
80,401
|
|
|
$
|
90,984
|
|
Pre-tax,
pre-provision operating earnings
|
19,120
|
|
|
23,060
|
|
|
31,088
|
|
|
29,205
|
|
|
38,579
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
Basic income per
common share
|
$
|
0.33
|
|
|
$
|
0.35
|
|
|
$
|
0.39
|
|
|
$
|
0.45
|
|
|
$
|
0.66
|
|
Diluted income per
common share
|
0.33
|
|
|
0.34
|
|
|
0.39
|
|
|
0.44
|
|
|
0.65
|
|
Tangible book value
per common share
|
12.43
|
|
|
12.47
|
|
|
12.22
|
|
|
12.69
|
|
|
12.36
|
|
Weighted average
common shares-basic
|
29,004,826
|
|
|
28,936,361
|
|
|
28,687,406
|
|
|
28,595,562
|
|
|
28,515,040
|
|
Weighted average
common shares-diluted
|
29,266,098
|
|
|
29,176,070
|
|
|
28,995,753
|
|
|
28,961,395
|
|
|
28,895,719
|
|
Common shares
outstanding-end of period
|
29,329,530
|
|
|
29,333,540
|
|
|
29,098,639
|
|
|
29,088,735
|
|
|
28,792,042
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios
(annualized):
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
1.09
|
%
|
|
0.96
|
%
|
|
1.09
|
%
|
|
1.22
|
%
|
|
1.59
|
%
|
Return on average
common equity
|
10.84
|
%
|
|
11.69
|
%
|
|
12.66
|
%
|
|
14.82
|
%
|
|
22.40
|
%
|
Efficiency ratio
(2)
|
78.63
|
%
|
|
69.54
|
%
|
|
69.14
|
%
|
|
64.37
|
%
|
|
60.76
|
%
|
|
|
|
|
|
|
|
|
|
|
Average Balance
Sheet Data: (3)
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
5,827,825
|
|
|
$
|
5,893,140
|
|
|
$
|
5,747,219
|
|
|
$
|
5,642,192
|
|
|
$
|
5,389,566
|
|
Investments
|
1,368,550
|
|
|
1,491,554
|
|
|
1,472,316
|
|
|
1,360,213
|
|
|
1,213,422
|
|
Cash
equivalents
|
160
|
|
|
541
|
|
|
237
|
|
|
555
|
|
|
985
|
|
Loans held for
sale
|
463,756
|
|
|
626,043
|
|
|
634,327
|
|
|
691,134
|
|
|
663,759
|
|
Loans
|
3,633,969
|
|
|
3,442,999
|
|
|
3,254,918
|
|
|
3,177,615
|
|
|
3,090,019
|
|
Total
interest-earning assets
|
5,466,435
|
|
|
5,561,137
|
|
|
5,361,798
|
|
|
5,229,517
|
|
|
4,968,185
|
|
Interest-bearing
deposits
|
2,786,288
|
|
|
2,767,265
|
|
|
2,494,537
|
|
|
2,424,772
|
|
|
2,282,290
|
|
Borrowings
|
1,330,934
|
|
|
1,425,545
|
|
|
1,397,300
|
|
|
1,219,977
|
|
|
1,241,905
|
|
Total
interest-bearing liabilities
|
4,117,222
|
|
|
4,192,810
|
|
|
3,891,837
|
|
|
3,644,749
|
|
|
3,524,195
|
|
Noninterest-bearing
deposits
|
1,081,148
|
|
|
1,061,917
|
|
|
1,195,709
|
|
|
1,333,958
|
|
|
1,257,811
|
|
Total stockholders'
equity
|
526,313
|
|
|
545,391
|
|
|
578,142
|
|
|
570,652
|
|
|
500,727
|
|
|
|
|
|
|
|
|
|
|
|
Tax Equivalent Net
Interest Margin:
|
|
|
|
|
|
|
|
|
|
Net interest income
as stated
|
$
|
45,204
|
|
|
$
|
46,027
|
|
|
$
|
41,082
|
|
|
$
|
40,683
|
|
|
$
|
40,510
|
|
Add: Tax
equivalent adjust. - investment (4)
|
1,548
|
|
|
1,522
|
|
|
1,119
|
|
|
769
|
|
|
545
|
|
Tax equivalent adjust. - loans (4)
|
26
|
|
|
27
|
|
|
29
|
|
|
29
|
|
|
30
|
|
Tax equivalent net
interest income
|
$
|
46,778
|
|
|
$
|
47,576
|
|
|
$
|
42,230
|
|
|
$
|
41.481
|
|
|
$
|
41.085
|
|
Net interest margin
without tax adjust. (5)
|
3.29
|
%
|
|
3.29
|
%
|
|
3.07
|
%
|
|
3.14
|
%
|
|
3.25
|
%
|
Net interest margin -
tax equivalent (4) (5)
|
3.41
|
%
|
|
3.41
|
%
|
|
3.16
|
%
|
|
3.20
|
%
|
|
3.30
|
%
|
Yield on earning
assets without tax adjust. (5)
|
3.67
|
%
|
|
3.70
|
%
|
|
3.59
|
%
|
|
3.68
|
%
|
|
3.83
|
%
|
Yield on earning
assets - tax equivalent (4) (5)
|
3.79
|
%
|
|
3.81
|
%
|
|
3.67
|
%
|
|
3.74
|
%
|
|
3.87
|
%
|
Yield on
interest-bearing liabilities (5)
|
0.50
|
%
|
|
0.53
|
%
|
|
0.71
|
%
|
|
0.78
|
%
|
|
0.81
|
%
|
Net interest spread
without tax adjust. (5)
|
3.17
|
%
|
|
3.17
|
%
|
|
2.88
|
%
|
|
2.90
|
%
|
|
3.02
|
%
|
Net interest spread -
tax equivalent (4) (5)
|
3.29
|
%
|
|
3.28
|
%
|
|
2.96
|
%
|
|
2.96
|
%
|
|
3.06
|
%
|
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 Twelve
Months Ended December 31,
|
|
|
2013
|
|
2012
|
Condensed Income
Data:
|
|
|
|
|
Net interest
income
|
|
$
|
172,996
|
|
|
$
|
149,886
|
|
Provision for loan
losses
|
|
2,400
|
|
|
9,550
|
|
Total noninterest
income
|
|
157,932
|
|
|
155,047
|
|
Total noninterest
expense
|
|
228,647
|
|
|
191,737
|
|
Income before income
taxes
|
|
99,881
|
|
|
103,646
|
|
Income tax
expense
|
|
37,874
|
|
|
41,745
|
|
Net income
|
|
62,007
|
|
|
61,901
|
|
Preferred dividends
and discounts
|
|
(15,900)
|
|
|
(7,012)
|
|
Net income applicable
to common stockholders
|
|
$
|
46,107
|
|
|
$
|
54,889
|
|
|
|
|
|
|
Non-GAAP Measures
of Performance: (1)
|
|
|
|
|
Revenue
|
|
$
|
324,969
|
|
|
$
|
299,594
|
|
Pre-tax,
pre-provision operating earnings
|
|
102,473
|
|
|
120,529
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
Basic income per
common share
|
|
$
|
1.51
|
|
|
$
|
1.84
|
|
Diluted income per
common share
|
|
1.50
|
|
|
1.79
|
|
Tangible book value
per common share
|
|
12.43
|
|
|
12.36
|
|
Weighted average
common shares-basic
|
|
28,807,517
|
|
|
29,294,884
|
|
Weighted average
common shares-diluted
|
|
29,110,289
|
|
|
29,016,717
|
|
Common shares
outstanding-end of period
|
|
29,329,530
|
|
|
28,792,042
|
|
|
|
|
|
|
Performance Ratios
(Annualized):
|
|
|
|
|
Return on average
assets
|
|
1.07
|
%
|
|
1.24
|
%
|
Return on average
common equity
|
|
12.50
|
%
|
|
16.76
|
%
|
Efficiency ratio
(2)
|
|
70.36
|
%
|
|
64.00
|
%
|
|
|
|
|
|
Average Balance
Sheet Data: (3)
|
|
|
|
|
Total
assets
|
|
$
|
5,778,419
|
|
|
$
|
4,987,240
|
|
Investments
|
|
1,423,370
|
|
|
1,254,310
|
|
Cash
equivalents
|
|
373
|
|
|
739
|
|
Loans held for
sale
|
|
603,253
|
|
|
414,582
|
|
Loans
|
|
3,378,806
|
|
|
2,993,335
|
|
Total
interest-earning assets
|
|
5,405,802
|
|
|
4,662,966
|
|
Interest-bearing
deposits
|
|
2,619,615
|
|
|
2,255,596
|
|
Borrowings
|
|
1,343,968
|
|
|
1,208,243
|
|
Total
interest-bearing liabilities
|
|
3,963,583
|
|
|
3,463,839
|
|
Noninterest-bearing
deposits
|
|
1,167,199
|
|
|
997,526
|
|
Total stockholders'
equity
|
|
554,976
|
|
|
441,581
|
|
|
|
|
|
|
Tax Equivalent Net
Interest Margin:
|
|
|
|
|
Net interest income
as stated
|
|
$
|
172,996
|
|
|
$
|
149,886
|
|
Add: Tax
equivalent adjust. - investment (4)
|
|
4,957
|
|
|
1,669
|
|
Tax equivalent adjust. - loans (4)
|
|
111
|
|
|
123
|
|
Tax equivalent net
interest income
|
|
$
|
178,064
|
|
|
$
|
151,678
|
|
Net interest margin
without tax adjust. (5)
|
|
3.20
|
%
|
|
3.22
|
%
|
Net interest margin -
tax equivalent (4) (5)
|
|
3.29
|
%
|
|
3.26
|
%
|
Yield on earning
assets without tax adjust. (5)
|
|
3.65
|
%
|
|
4.00
|
%
|
Yield on earning
assets - tax equivalent (4) (5)
|
|
3.75
|
%
|
|
4.04
|
%
|
Yield on
interest-bearing liabilities (5)
|
|
0.62
|
%
|
|
1.05
|
%
|
Net interest spread -
without tax adjust. (5)
|
|
3.03
|
%
|
|
2.96
|
%
|
Net interest spread -
tax equivalent (4) (5)
|
|
3.13
|
%
|
|
2.99
|
%
|
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
|
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Jun. 30,
2013
|
|
Mar. 31,
2013
|
|
Dec. 31,
2012
|
Condensed Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
$
|
1,120,731
|
|
|
$
|
1,420,906
|
|
|
$
|
1,434,326
|
|
|
$
|
1,429,971
|
|
|
$
|
1,267,757
|
|
Loans held for
sale
|
473,890
|
|
|
498,276
|
|
|
693,937
|
|
|
668,937
|
|
|
938,379
|
|
Loans
|
3,648,375
|
|
|
3,628,658
|
|
|
3,302,548
|
|
|
3,222,794
|
|
|
3,168,303
|
|
Allowance for loan
losses
|
81,864
|
|
|
85,013
|
|
|
83,576
|
|
|
82,150
|
|
|
82,191
|
|
Total
assets
|
5,685,818
|
|
|
6,014,694
|
|
|
5,901,370
|
|
|
5,770,432
|
|
|
5,802,410
|
|
Total
deposits
|
3,650,983
|
|
|
3,697,196
|
|
|
3,692,426
|
|
|
3,794,394
|
|
|
3,528,342
|
|
Total
borrowings
|
1,464,934
|
|
|
1,652,258
|
|
|
1,515,462
|
|
|
1,256,653
|
|
|
1,582,992
|
|
Total stockholders'
equity
|
464,551
|
|
|
544,719
|
|
|
560,274
|
|
|
573,332
|
|
|
559,603
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
$
|
81,825
|
|
|
$
|
86,045
|
|
|
$
|
69,539
|
|
|
$
|
71,404
|
|
|
$
|
59,537
|
|
Nonperforming
assets
|
91,874
|
|
|
100,434
|
|
|
89,333
|
|
|
98,622
|
|
|
83,796
|
|
Allowance for loan
losses to total loans (excluding loans held for sale)
|
2.24
|
%
|
|
2.34
|
%
|
|
2.53
|
%
|
|
2.55
|
%
|
|
2.59
|
%
|
Allowance for loan
losses to nonperforming loans
|
100.05
|
%
|
|
98.80
|
%
|
|
120.19
|
%
|
|
115.05
|
%
|
|
138.05
|
%
|
Nonperforming assets
to total loans plus repossessed property
|
2.51
|
%
|
|
2.76
|
%
|
|
2.69
|
%
|
|
3.03
|
%
|
|
2.62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Resources
(Taylor Capital Group, Inc.):
|
|
|
|
|
|
|
|
|
|
Total Capital (to
Risk Weighted Assets)
|
12.65
|
%
|
|
14.15
|
%
|
|
15.22
|
%
|
|
16.50
|
%
|
|
16.27
|
%
|
Tier I Capital (to
Risk Weighted Assets)
|
11.40
|
%
|
|
12.89
|
%
|
|
13.96
|
%
|
|
14.45
|
%
|
|
14.21
|
%
|
Leverage (to average
assets)
|
9.18
|
%
|
|
10.30
|
%
|
|
10.87
|
%
|
|
10.91
|
%
|
|
11.14
|
%
|
Total
Capital
|
$
|
591,908
|
|
|
$
|
663,917
|
|
|
$
|
679,379
|
|
|
$
|
701,381
|
|
|
$
|
685,998
|
|
Tier I
Capital
|
533,123
|
|
|
604,920
|
|
|
623,221
|
|
|
614,382
|
|
|
599,504
|
|
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,
2013
|
|
|
September 30,
2013
|
|
|
December 31,
2012
|
|
Loans
|
|
Balance
|
|
Percent of Gross
Loans
|
|
Balance
|
|
Percent of Gross
Loans
|
|
Balance
|
|
Percent of Gross
Loans
|
Commercial and
industrial
|
|
$
|
1,935,377
|
|
|
52.9
|
%
|
|
$
|
1,902,572
|
|
|
52.3
|
%
|
|
$
|
1,590,587
|
|
|
50.1
|
%
|
Commercial real
estate secured
|
|
1,124,227
|
|
|
30.7
|
|
|
1,113,533
|
|
|
30.6
|
|
|
965,978
|
|
|
30.4
|
|
Residential
construction and land
|
|
46,079
|
|
|
1.3
|
|
|
49,796
|
|
|
1.3
|
|
|
45,903
|
|
|
1.5
|
|
Commercial
construction and land
|
|
121,682
|
|
|
3.3
|
|
|
115,698
|
|
|
3.2
|
|
|
103,715
|
|
|
3.3
|
|
Lease
receivables
|
|
132,013
|
|
|
3.6
|
|
|
108,808
|
|
|
3.0
|
|
|
50,803
|
|
|
1.6
|
|
Total commercial
loans
|
|
3,359,378
|
|
|
91.8
|
|
|
3,290,407
|
|
|
90.4
|
|
|
2,756,986
|
|
|
86.9
|
|
Consumer
|
|
301,377
|
|
|
8.2
|
|
|
348,362
|
|
|
9.6
|
|
|
416,635
|
|
|
13.1
|
|
Gross
loans
|
|
3,660,755
|
|
|
100.0
|
%
|
|
3,638,769
|
|
|
100.0
|
%
|
|
3,173,621
|
|
|
100.0
|
%
|
Less: Unearned
discount
|
|
(12,380)
|
|
|
|
|
(10,111)
|
|
|
|
|
(5,318)
|
|
|
|
Total
loans
|
|
3,648,375
|
|
|
|
|
3,628,658
|
|
|
|
|
3,168,303
|
|
|
|
Less: Loan loss
allowance
|
|
(81,864)
|
|
|
|
|
(85,013)
|
|
|
|
|
(82,191)
|
|
|
|
Net loans
|
|
$
|
3,566,511
|
|
|
|
|
$
|
3,543,645
|
|
|
|
|
$
|
3,086,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Held for
Sale
|
|
$
|
473,890
|
|
|
|
|
$
|
498,276
|
|
|
|
|
$
|
938,379
|
|
|
|
The following table
provides details of the Company's commercial real estate
portfolio:
|
|
|
|
December 31,
2013
|
|
|
September 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
|
|
$
|
102,195
|
|
|
9.1
|
%
|
|
$
|
104,595
|
|
|
9.4
|
%
|
|
$
|
109,266
|
|
|
11.3
|
%
|
Office/mixed use
property
|
|
126,662
|
|
|
11.3
|
|
|
121,683
|
|
|
10.9
|
|
|
113,216
|
|
|
11.7
|
|
Commercial
properties
|
|
126,608
|
|
|
11.3
|
|
|
102,683
|
|
|
9.2
|
|
|
111,852
|
|
|
11.6
|
|
Specialized –
other
|
|
101,813
|
|
|
9.1
|
|
|
99,409
|
|
|
8.9
|
|
|
69,827
|
|
|
7.2
|
|
Other commercial
properties
|
|
25,483
|
|
|
2.3
|
|
|
20,739
|
|
|
1.9
|
|
|
28,870
|
|
|
3.0
|
|
Farmland
|
|
2,256
|
|
|
0.2
|
|
|
2,285
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
Subtotal commercial
non-owner occupied
|
|
485,017
|
|
|
43.3
|
|
|
451,394
|
|
|
40.6
|
|
|
433,031
|
|
|
44.8
|
|
Commercial
owner-occupied
|
|
513,126
|
|
|
45.5
|
|
|
537,208
|
|
|
48.2
|
|
|
425,723
|
|
|
44.1
|
|
Multi-family
properties
|
|
126,084
|
|
|
11.2
|
|
|
124,931
|
|
|
11.2
|
|
|
107,224
|
|
|
11.1
|
|
Total commercial real
estate secured
|
|
$
|
1,124,227
|
|
|
100.0
|
%
|
|
$
|
1,113,533
|
|
|
100.0
|
%
|
|
$
|
965,978
|
|
|
100.0
|
%
|
CREDIT QUALITY
(unaudited)
|
(dollars in
thousands)
|
|
|
At or for the
Three Months Ended
|
|
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Dec. 31,
2012
|
Nonperforming
Assets:
|
|
|
|
|
|
|
Loans contractually
past due 90 days or more but still accruing interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Nonaccrual
loans:
|
|
|
|
|
|
|
Commercial and
industrial
|
|
$
|
15,879
|
|
|
$
|
19,893
|
|
|
$
|
16,705
|
|
Commercial real
estate secured
|
|
37,474
|
|
|
34,584
|
|
|
14,530
|
|
Residential
construction and land
|
|
—
|
|
|
—
|
|
|
4,495
|
|
Commercial
construction and land
|
|
22,550
|
|
|
25,746
|
|
|
15,220
|
|
Consumer
|
|
5,922
|
|
|
5,822
|
|
|
8,587
|
|
Total nonaccrual
loans
|
|
81,825
|
|
|
86,045
|
|
|
59,537
|
|
Total nonperforming
loans
|
|
81,825
|
|
|
86,045
|
|
|
59,537
|
|
Other real estate
owned and repossessed assets
|
|
10,049
|
|
|
14,389
|
|
|
24,259
|
|
Total nonperforming
assets
|
|
$
|
91,874
|
|
|
$
|
100,434
|
|
|
$
|
83,796
|
|
|
|
|
|
|
|
|
Other Credit
Quality Information:
|
|
|
|
|
|
|
Commercial criticized
and classified loans (1)
|
|
|
|
|
|
|
Special
mention
|
|
$
|
73,093
|
|
|
$
|
47,919
|
|
|
$
|
58,025
|
|
Substandard
|
|
39,012
|
|
|
23,547
|
|
|
22,608
|
|
Nonaccrual
|
|
75,903
|
|
|
80,223
|
|
|
50,950
|
|
Total commercial
criticized and classified loans
|
|
$
|
188,008
|
|
|
$
|
151,689
|
|
|
$
|
131,583
|
|
Loans contractually
past due 30 – 89 days and still accruing
|
|
$
|
5,189
|
|
|
$
|
5,658
|
|
|
$
|
6,111
|
|
Performing
restructured loans
|
|
20,736
|
|
|
20,031
|
|
|
17,456
|
|
Recorded balance of
impaired loans
|
|
96,451
|
|
|
100,464
|
|
|
70,343
|
|
Allowance for loan
losses related to impaired loans
|
|
13,687
|
|
|
16,169
|
|
|
12,057
|
|
|
|
|
|
|
|
|
Allowance for Loan
Losses Summary:
|
|
|
|
|
|
|
Allowance at
beginning of period
|
|
$
|
85,013
|
|
|
$
|
83,576
|
|
|
$
|
79,667
|
|
(Charge-offs), net of
recoveries:
|
|
|
|
|
|
|
Commercial and
commercial real estate
|
|
(1,713)
|
|
|
1,291
|
|
|
1,793
|
|
Real estate –
construction and land
|
|
(2,232)
|
|
|
—
|
|
|
125
|
|
Consumer
|
|
(304)
|
|
|
(154)
|
|
|
(594)
|
|
Total net
(charge-offs) recoveries
|
|
(4,249)
|
|
|
1,137
|
|
|
1,324
|
|
Provision for loan
losses
|
|
1,100
|
|
|
300
|
|
|
1,200
|
|
Allowance at end of
period
|
|
$
|
81,864
|
|
|
$
|
85,013
|
|
|
$
|
82,191
|
|
|
|
|
|
|
|
|
Key Credit
Ratios:
|
|
|
|
|
|
|
Nonperforming loans
to total loans
|
|
2.24
|
%
|
|
2.37
|
%
|
|
1.88
|
%
|
Nonperforming assets
to total loans plus repossessed property
|
|
2.51
|
%
|
|
2.76
|
%
|
|
2.62
|
%
|
Nonperforming assets
to total assets
|
|
1.62
|
%
|
|
1.67
|
%
|
|
1.44
|
%
|
Annualized net
charge-offs (recoveries) to average total loans
|
|
0.08
|
%
|
|
(0.13)
|
%
|
|
(0.17)
|
%
|
Allowance to total
loans at end of period (excluding loans held for sale)
|
|
2.24
|
%
|
|
2.34
|
%
|
|
2.59
|
%
|
Allowance to
nonperforming loans
|
|
100.05
|
%
|
|
98.80
|
%
|
|
138.05
|
%
|
30 – 89 days past due
to total loans
|
|
0.14
|
%
|
|
0.16
|
%
|
|
0.19
|
%
|
(1) Commercial
criticized and classified loans excludes consumer loans.
|
LOAN PORTFOLIO AGING
(unaudited)
|
(dollars in
thousands)
|
|
|
As of December 31,
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
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,879
|
|
|
$
|
1,919,498
|
|
|
$
|
1,935,377
|
|
|
53
|
%
|
|
$
|
37,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate secured:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial non-owner
occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail strip centers
or malls
|
|
—
|
|
|
—
|
|
|
17,033
|
|
|
85,162
|
|
|
102,195
|
|
|
3
|
%
|
|
3,753
|
|
Office/mixed use
property
|
|
301
|
|
|
—
|
|
|
1,143
|
|
|
125,218
|
|
|
126,662
|
|
|
4
|
%
|
|
2,165
|
|
Commercial
properties
|
|
—
|
|
|
—
|
|
|
2,254
|
|
|
124,354
|
|
|
126,608
|
|
|
4
|
%
|
|
3,037
|
|
Specialized –
other
|
|
—
|
|
|
—
|
|
|
4,541
|
|
|
97,272
|
|
|
101,813
|
|
|
3
|
%
|
|
1,456
|
|
Other commercial
properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,483
|
|
|
25,483
|
|
|
1
|
%
|
|
381
|
|
Farmland
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,256
|
|
|
2,256
|
|
|
—
|
%
|
|
34
|
|
Subtotal commercial
non-owner occupied
|
|
301
|
|
|
—
|
|
|
24,971
|
|
|
459,745
|
|
|
485,017
|
|
|
15
|
%
|
|
10,826
|
|
Commercial
owner-occupied
|
|
288
|
|
|
—
|
|
|
12,330
|
|
|
500,508
|
|
|
513,126
|
|
|
14
|
%
|
|
9,435
|
|
Multi-family
properties
|
|
155
|
|
|
—
|
|
|
173
|
|
|
125,756
|
|
|
126,084
|
|
|
3
|
%
|
|
2,123
|
|
Total commercial real
estate
secured
|
|
744
|
|
|
—
|
|
|
37,474
|
|
|
1,086,009
|
|
|
1,124,227
|
|
|
32
|
%
|
|
22,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
construction and land:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,956
|
|
|
29,956
|
|
|
1
|
%
|
|
3,582
|
|
Land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,123
|
|
|
16,123
|
|
|
—
|
%
|
|
2,072
|
|
Total residential
construction and
land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,079
|
|
|
46,079
|
|
|
1
|
%
|
|
5,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction and land
|
|
—
|
|
|
—
|
|
|
22,550
|
|
|
99,132
|
|
|
121,682
|
|
|
3
|
%
|
|
7,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease receivables,
net of unearned discount
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119,633
|
|
|
119,633
|
|
|
3
|
%
|
|
718
|
|
Total commercial
loans
|
|
744
|
|
|
—
|
|
|
75,903
|
|
|
3,270,351
|
|
|
3,346,998
|
|
|
92
|
%
|
|
74,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
|
4,445
|
|
|
—
|
|
|
5,922
|
|
|
291,010
|
|
|
301,377
|
|
|
8
|
%
|
|
7,813
|
|
Total
loans
|
|
$
|
5,189
|
|
|
$
|
—
|
|
|
$
|
81,825
|
|
|
$
|
3,561,361
|
|
|
$
|
3,648,375
|
|
|
100
|
%
|
|
$
|
81,864
|
|
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
|
|
|
December 31,
2013
|
|
September 30,
2013
|
|
December 31,
2012
|
|
Average
Balance
|
|
Percent of
Deposits
|
|
Average
Balance
|
|
Percent of
Deposits
|
|
Average
Balance
|
|
Percent of
Deposits
|
Noninterest-bearing
deposits
|
$
|
1,081,148
|
|
|
28.0 %
|
|
$
|
1,061,917
|
|
|
27.7 %
|
|
$
|
1,257,811
|
|
|
35.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial interest
checking
|
360,476
|
|
|
9.3
|
|
315,722
|
|
|
8.2
|
|
—
|
|
|
—
|
NOW
accounts
|
597,373
|
|
|
15.4
|
|
597,461
|
|
|
15.6
|
|
460,187
|
|
|
13.0
|
Savings
deposits
|
40,355
|
|
|
1.0
|
|
41,236
|
|
|
1.1
|
|
39,874
|
|
|
1.1
|
Money market
accounts
|
728,419
|
|
|
18.8
|
|
783,974
|
|
|
20.5
|
|
743,479
|
|
|
21.0
|
Brokered money market
deposits
|
37,874
|
|
|
1.0
|
|
—
|
|
|
—
|
|
24,036
|
|
|
0.7
|
Certificates of
deposit
|
493,291
|
|
|
12.8
|
|
546,152
|
|
|
14.3
|
|
568,549
|
|
|
16.1
|
Brokered certificates
of deposit
|
268,982
|
|
|
7.0
|
|
220,323
|
|
|
5.8
|
|
215,189
|
|
|
6.1
|
CDARS time
deposits
|
205,088
|
|
|
5.3
|
|
224,083
|
|
|
5.9
|
|
211,865
|
|
|
6.0
|
Public time
deposits
|
54,430
|
|
|
1.4
|
|
38,315
|
|
|
0.9
|
|
19,111
|
|
|
0.5
|
Total
interest-bearing deposits
|
2,786,288
|
|
|
72.0
|
|
2,767,266
|
|
|
72.3
|
|
2,282,290
|
|
|
64.5
|
Total
deposits
|
$
|
3,867,436
|
|
|
100.0 %
|
|
$
|
3,829,183
|
|
|
100.0 %
|
|
$
|
3,540,101
|
|
|
100.0 %
|
The following table
sets forth the period end balances of total deposits as of each of
the dates indicated below.
|
|
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Dec. 31.
2012
|
Noninterest-bearing
deposits
|
|
$
|
1,048,946
|
|
|
$
|
1,010,789
|
|
|
$
|
1,179,724
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
Commercial interest
checking
|
|
377,631
|
|
|
305,111
|
|
|
—
|
NOW
accounts
|
|
566,269
|
|
|
632,105
|
|
|
573,133
|
Savings
accounts
|
|
40,357
|
|
|
40,166
|
|
|
39,915
|
Money market
accounts
|
|
698,302
|
|
|
761,590
|
|
|
744,791
|
Brokered money market
deposits
|
|
51,124
|
|
|
—
|
|
|
27,840
|
Certificates of
deposit
|
|
472,222
|
|
|
522,433
|
|
|
561,998
|
Brokered certificates
of deposit
|
|
203,715
|
|
|
235,405
|
|
|
199,604
|
CDARS time
deposits
|
|
142,835
|
|
|
135,013
|
|
|
186,187
|
Public time
deposits
|
|
49,582
|
|
|
54,584
|
|
|
15,150
|
Total
interest-bearing deposits
|
|
2,602,037
|
|
|
2,686,407
|
|
|
2,348,618
|
Total
deposits
|
|
$
|
3,650,983
|
|
|
$
|
3,697,196
|
|
|
$
|
3,528,342
|
SUMMARY OF QUARTERLY
SEGMENT FINANCIAL DATA (unaudited)
|
(dollars in
thousands)
|
|
|
For the Three
Months Ended
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Jun. 30,
2013
|
|
Mar. 31,
2013
|
|
Dec. 31,
2012
|
BANKING:
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
40,975
|
|
|
$
|
40,780
|
|
|
$
|
37,175
|
|
|
$
|
36,181
|
|
|
$
|
36,696
|
Provision for loan
losses
|
|
1,210
|
|
|
233
|
|
|
946
|
|
|
292
|
|
|
1,200
|
Total noninterest
income
|
|
12,428
|
|
|
7,284
|
|
|
7,528
|
|
|
7,647
|
|
|
7,518
|
Total noninterest
expense
|
|
28,363
|
|
|
23,473
|
|
|
25,770
|
|
|
25,468
|
|
|
25,817
|
Income before income
taxes
|
|
23,830
|
|
|
24,358
|
|
|
17,987
|
|
|
18,068
|
|
|
17,197
|
Income tax
expense
|
|
9,413
|
|
|
9,621
|
|
|
7,105
|
|
|
7,136
|
|
|
6,793
|
Net income
|
|
$
|
14,417
|
|
|
$
|
14,737
|
|
|
$
|
10,882
|
|
|
$
|
10,932
|
|
|
$
|
10,404
|
|
|
|
For the Three
Months Ended
|
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Jun. 30,
2013
|
|
Mar. 31,
2013
|
|
Dec. 31,
2012
|
|
MORTGAGE
BANKING:
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
5,517
|
|
|
$
|
6,499
|
|
|
$
|
5,742
|
|
|
$
|
6,414
|
|
|
$
|
5,902
|
|
Provision for loan
losses
|
|
(110)
|
|
|
67
|
|
|
(246)
|
|
|
8
|
|
|
—
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
Loan origination
income
|
|
13,943
|
|
|
17,249
|
|
|
29,355
|
|
|
26,430
|
|
|
38,906
|
|
Net servicing
income
|
|
13,226
|
|
|
7,896
|
|
|
9,176
|
|
|
5,600
|
|
|
5,495
|
|
Total noninterest
income
|
|
27,169
|
|
|
25,145
|
|
|
38,531
|
|
|
32,030
|
|
|
44,401
|
|
Total noninterest
expense
|
|
29,222
|
|
|
29,063
|
|
|
29,086
|
|
|
26,287
|
|
|
29,466
|
|
Income before income
taxes
|
|
3,574
|
|
|
2,514
|
|
|
15,433
|
|
|
12,149
|
|
|
20,837
|
|
Income tax expense
(benefit)
|
|
1,033
|
|
|
(19)
|
|
|
4,928
|
|
|
3,375
|
|
|
7,540
|
|
Net income
|
|
$
|
2,541
|
|
|
$
|
2,533
|
|
|
$
|
10,505
|
|
|
$
|
8,774
|
|
|
$
|
13,297
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination
Volume
|
|
$
|
1,169,098
|
|
|
$
|
1,596,431
|
|
|
$
|
1,874,248
|
|
|
$
|
1,907,642
|
|
|
$
|
1,947,356
|
|
Refinance
%
|
|
40
|
%
|
|
37
|
%
|
|
62
|
%
|
|
77
|
%
|
|
77
|
%
|
Purchase %
|
|
60
|
%
|
|
63
|
%
|
|
38
|
%
|
|
23
|
%
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Balances
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Jun. 30,
2013
|
|
Mar. 31,
2013
|
|
Dec. 31,
2012
|
|
Mortgage servicing
book
|
|
$
|
18,496,230
|
|
|
$
|
16,431,269
|
|
|
$
|
12,740,176
|
|
|
$
|
10,506,034
|
|
|
$
|
8,533,785
|
|
Mortgage servicing
rights
|
|
216,111
|
|
|
184,237
|
|
|
145,729
|
|
|
106,576
|
|
|
78,917
|
|
|
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 third party 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 subordinated debt expense, certain parent company
activities, expenses related to the pending merger with MB
Financial, 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
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Jun. 30,
2013
|
|
Mar. 31,
2013
|
|
Dec. 31,
2012
|
Income before income
taxes
|
|
$
|
21,665
|
|
|
$
|
23,657
|
|
|
$
|
26,212
|
|
|
$
|
28,347
|
|
|
$
|
35,988
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
|
|
Credit
costs:
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
|
1,100
|
|
|
300
|
|
|
700
|
|
|
300
|
|
|
1,200
|
Nonperforming asset
expense
|
|
2,246
|
|
|
(836)
|
|
|
(1,198)
|
|
|
559
|
|
|
2,816
|
Credit costs
subtotal
|
|
3,346
|
|
|
(536)
|
|
|
(498)
|
|
|
859
|
|
|
4,016
|
Other:
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of
investment securities
|
|
(5,891)
|
|
|
(61)
|
|
|
(6)
|
|
|
(1)
|
|
|
(1,488)
|
Early extinguishment
of debt
|
|
—
|
|
|
—
|
|
|
5,380
|
|
|
—
|
|
|
63
|
Other
subtotal
|
|
(5,891)
|
|
|
(61)
|
|
|
5,374
|
|
|
(1)
|
|
|
(1,425)
|
Pre-tax,
pre-provision operating earnings
|
|
$
|
19,120
|
|
|
$
|
23,060
|
|
|
$
|
31,088
|
|
|
$
|
29,205
|
|
|
$
|
38,579
|
The following, as of
the dates indicated, details the components of revenue.
|
|
|
For the Three
Months Ended
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
Jun. 30,
2013
|
|
Mar. 31,
2013
|
|
Dec. 31,
2012
|
Net interest
income
|
|
$
|
45,204
|
|
|
$
|
46,027
|
|
|
$
|
41,082
|
|
|
$
|
40,683
|
|
|
$
|
40,510
|
Noninterest
income
|
|
39,640
|
|
|
32,472
|
|
|
46,101
|
|
|
39,719
|
|
|
51,962
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of
investment securities
|
|
(5,891)
|
|
|
(61)
|
|
|
(6)
|
|
|
(1)
|
|
|
(1,488)
|
Revenue
|
|
$
|
78,953
|
|
|
$
|
78,438
|
|
|
$
|
87,177
|
|
|
$
|
80,401
|
|
|
$
|
90,984
|
|
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.