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Taylor Capital Group Inc. Reports Operating Results (10-Q)

November 12, 2009 | About:
10qk

10qk

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Taylor Capital Group Inc. (TAYC) filed Quarterly Report for the period ended 2009-09-30.

Taylor Capital Group is a bank holding company which derives virtually all of its revenue from its subsidiary, Cole Taylor Bank. Taylor Capital provides a range of products and services concentrating in four primary banking areas: middle-market business banking, small business banking, commercial real estate lending and wealth management. Taylor Capital Group Inc. has a market cap of $70.4 million; its shares were traded at around $6.35 with and P/S ratio of 0.3.

Highlight of Business Operations:

We reported a net loss applicable to common stockholders of $5.3 million, or $0.51 per diluted common share outstanding, for the third quarter of 2009, compared to a net loss applicable to common stockholders of $97.2 million, or $9.30 per diluted common share, in the third quarter of 2008. The lower net loss applicable to common stockholders in the third quarter of 2009 was due to a $37.2 million decrease in the provision for loan losses and $25.5 million decrease in income tax expense, largely due to a $47.3 million non-cash charge recorded in the third quarter of 2008 to establish a valuation allowance against our deferred tax asset. In addition, in connection with the completion of our private placement of 8% non-cumulative convertible perpetual preferred stock, Series A, in the third quarter of 2008, we recorded a $16.7 million implied non-cash dividend to the holders of this preferred stock to reflect the beneficial conversion feature, as the market value of our common stock at the date of the stock purchase agreement exceeded the $10.00 conversion price per share. In addition, a $10.5 million increase in net interest income and a $4.8 million decrease in noninterest expense also contributed to the lower net loss applicable to common stockholders during the third quarter of 2009.

For the first nine months of 2009, we reported a net loss applicable to common stockholders of $37.1 million, or $3.54 per diluted common share, compared to a net loss applicable to common stockholders of $126.4 million, or $12.10 per diluted share, during the first nine months of 2008. The lower net loss applicable to common stockholders resulted from a $43.2 million decrease in the provision for loan losses, a $22.2 million increase in net interest income, a $9.5 million increase in noninterest income, and a decrease in noninterest expense of $4.4 million.

Net interest income was $32.4 million for the third quarter of 2009, an increase of $10.5 million, or 47.8%, from $21.9 million of net interest income in the third quarter of 2008. With an adjustment for tax-exempt income, our consolidated net interest income for the third quarter of 2009 was $33.1 million, compared to $22.7 million for the same quarter a year ago. This non-GAAP presentation is discussed in a following section captioned “Tax-Equivalent Adjustments to Yields and Margins”. Net interest income for the third quarter of 2009 increased due to higher interest-earning asset levels and an increase in net interest margin.

Our average interest-earning assets during the third quarter of 2009 were $4.51 billion, an increase of $648.8 million, or 16.8%, as compared to the same quarter in 2008. A $496.5 million, or 59.9%, increase in average investment portfolio and a $271.2 million or 9.3% increase in average loan balances combined to produce the higher interest-earning assets. The higher average investment securities primarily resulted from the purchase of mortgage-related investment securities during the past twelve months as we increased the size of the investment portfolio to take advantage of higher yields on longer duration securities. Average loans outstanding increased to $3.18 billion during the third quarter of 2009, compared to $2.91 billion during the third quarter of 2008. The increase in loans is a result of a growth strategy implemented in 2008 in which we hired a new management team, increased our lending staff, and enhanced certain of our credit support functions.

Net interest income was $90.1 million for the first nine months of 2009, compared to $67.9 million during the same nine month period a year ago, an increase of $22.2 million, or 32.6%. With an adjustment for tax-exempt income, our consolidated net interest income for the first nine months of 2009 was $92.5 million, compared to $70.4 million for the first nine months of 2008. This non-GAAP presentation is discussed in a following section captioned “Tax-Equivalent Adjustments to Yields and Margins”. Net interest income for the first nine months of 2009 benefited from both an $894.1 million increase in average interest-earning assets and a 14 basis point increase in the net interest margin.

Our average interest-earning assets during the first nine months of 2009 were $4.47 billion, an increase of $894.1 million, or 25.0%, as compared to the $3.58 billion of average interest-earning assets during the first nine months of 2008. The growth strategy implemented in 2008 caused the $550.2 million, or 20.7%, increase in average loan balances between the two year-to-date periods. In addition, the increase in the size of the investment portfolio that occurred during the last twelve months caused average investment securities to increase by $422.1 million, or 49.6%, in the first nine months of 2009 as compared to the same nine month period a year ago. This increase in investment securities was largely funded with additional short-term borrowings.

Read the The complete Report

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