TAYLOR CAPITAL GROUP INC 
By CHICAGO, Jan. 24, 2013 /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 2012 and for the full year 2012.
FULL YEAR 2012 HIGHLIGHTS
Reported income before taxes of $103.6 million for 2012, up from $18.0 million in 2011
-- Net income for 2012 was $61.9 million, compared to $91.1 million for
2011. The 2011 results included after tax income of $73.2 million
resulting from the reversal of a valuation allowance on the Company's
net deferred tax asset
-- Earnings per diluted share were $1.79 for 2012 compared to $3.45 per
diluted share for 2011. Excluding the favorable impact of the reversal
of the valuation allowance, 2011 loss per diluted share was $0.08
-- Revenue(1) increased to $299.6 million for 2012, up $119.4 million or
66%
-- Net interest margin on a tax equivalent basis increased by nine basis
points to 3.25% for 2012 from 3.16% for 2011
-- Mortgage banking revenue increased to $125.5 million, up $105.1 million
or 516%
-- Commercial and industrial loans grew $164.4 million, or 11.5% for the
year
-- Core deposits grew $714.3 million, or 39% for the year
-- Service charges increased 18%
Credit quality indicators improved in 2012, including a 42.3% reduction in nonperforming loans
-- Nonperforming loans were $59.5 million and 1.88% of total loans at
December 31, 2012, down from $103.1 million and 3.52% of total loans at
December 31, 2011
-- The allowance for loan losses as a percent of nonperforming loans was
138.1% at December 31, 2012, up from 100.7% at December 31, 2011
-- At December 31, 2012, commercial criticized and classified loans(2)
totaled $131.6 million, down from $182.6 million at December 31, 2011
FOURTH QUARTER 2012 HIGHLIGHTS
Reported earnings per diluted share of $0.65 in the fourth quarter of 2012, up from $0.49 per diluted share in the third quarter of 2012
-- Revenue increased to a record $91.0 million for the fourth quarter of
2012, up $6.5 million or 8% from the third quarter of 2012
-- Net interest margin on a tax equivalent basis increased by seven basis
points to 3.28% for the fourth quarter of 2012 from 3.21% for the third
quarter
-- Mortgage banking revenue increased to $44.3 million, up $3.6 million or
9% over the third quarter
-- Mortgage origination volume increased to $1.95 billion, up 41% from the
third quarter
-- Commercial and industrial loans grew $53.3 million, or 3.5% in the
fourth quarter
-- Core deposits grew by $95.2 million in the fourth quarter of 2012 to
$2.54 billion
-- A $100 million preferred stock offering was completed
Key credit quality indicators for the fourth quarter of 2012 were as follows:
-- Nonperforming loans were $59.5 million and 1.88% of total loans at
December 31, 2012, down 4.1% from $62.1 million and 2.01% of total loans
at September 30, 2012
-- The allowance for loan losses as a percent of nonperforming loans was
138.1% at December 31, 2012, up from 128.3% at September 30, 2012
-- At December 31, 2012, commercial criticized and classified loans totaled
$131.6 million, up from $114.7 million at September 30, 2012
"Our results for 2012 have reinforced the value of our dual strategy of focusing on the fundamentals while continuing to diversify our revenue sources," said Mark A. Hoppe, President and Chief Executive Officer of Taylor Capital Group. "Pre-tax, pre-provision operating earnings of $120.5 million for the year were up 66% from 2011, and were at a record level for the fourth quarter. Cole Taylor Mortgage had an outstanding year and quarter. Fourth quarter origination volume of nearly $2 billion was up 41% from the third quarter, while the mortgage servicing portfolio increased 37% to $8.5 billion. Our efforts in the banking segment to add new commercial business were also very successful during 2012, as commercial and industrial loans increased more than 11% for the year and core deposits increased 39%."
"As we grow and diversify the business, we have continued our emphasis on improving asset quality and further strengthening our capital. The ratio of nonperforming assets to total assets at the end of the year improved to 1.44%, down from 2.96% a year ago, while the Company's Tier 1 capital ratio at year end increased by approximately 300 basis points from the end of 2011. The Company's strong performance in 2012 enabled us to make investments for further diversification and expansion in our lines of business and facilitated the completion of a $100 million preferred stock offering in the fourth quarter, which will help to support our growth in 2013 and beyond." Hoppe concluded.
FULL YEAR 2012 AND FOURTH QUARTER 2012 PERFORMANCE OVERVIEW
Results of Operations - Full Year 2012
Revenue
For 2012, revenue was $299.6 million, up 66.3% from $180.2 million for 2011.
Net interest income was $149.9 million for 2012, up 11.5% from $134.4 million for 2011. The increase in net interest income was the result of lower funding costs driven by deposit repricing and favorable shifts in the funding mix and increased balances of loans held for sale, partially offset by lower yields on investment securities. Net interest margin on a tax equivalent basis was 3.25% for 2012, up from 3.16% for 2011. The increase in net interest margin was the result of reduced funding costs, partially offset by lower earning asset yields.
Noninterest income, excluding gains and losses on investment securities and derivative termination expense, was $149.7 million for 2012, up 227% from $45.8 million for 2011. This increase was due primarily to higher mortgage banking revenue, which increased from $20.4 million in 2011 to $125.5 million in 2012 resulting from growth in mortgage originations and increased mortgage servicing. Service charges increased 18% from $11.5 million in 2011 to $13.5 million in 2012 due to pricing adjustments which began in the first quarter of 2012, the introduction of new products and new customers. Other derivative income decreased from $7.0 million in 2011 to $4.3 million in 2012 primarily due to a decrease in the volume of customer swap transactions and related fee income.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and early extinguishment of debt expense, was $179.1 million in 2012, up from $107.7 million for 2011. Salaries and employee benefits increased from $64.7 million in 2011 to $124.9 million in 2012 due to an increase of 300 headcount or 47% in 2012 and an increase in performance-based incentive compensation both primarily related to growth of Cole Taylor Mortgage. Loan expense increased from $3.0 million in 2011 to $6.8 million in 2012 primarily due to an increase in mortgage originations at Cole Taylor Mortgage. Outside services increased from $2.1 million in 2011 to $3.9 million in 2012 primarily due to an increase in sub-servicing expense resulting from growth in the mortgage servicing portfolio.
Income Tax Expense
Income tax expense was $41.7 million for 2012, compared to an income tax benefit of $73.1 million in 2011. The income tax benefit in 2011 was almost entirely due to the income tax benefit that resulted from the reversal of the $73.2 million valuation allowance on the Company's net deferred tax asset.
Results of Operations - Fourth Quarter 2012
Revenue
Revenue totaled $91.0 million for the fourth quarter of 2012, compared to $84.4 million for the third quarter of 2012, a 7.8% increase.
Net interest income increased to $40.5 million for the fourth quarter of 2012, up from $37.2 million for the third quarter of 2012, due to interest income from an increase in loans held for sale and lower interest costs on subordinated notes as a result of the prepayment of $60 million of the Bank's 10% subordinated notes in the third quarter. The tax equivalent net interest margin increased seven basis points, from 3.21% for the third quarter of 2012 to 3.28% for the fourth quarter of 2012, primarily as a result of lower interest costs on the subordinated notes, partially offset by an increase in the lower-yielding held for sale portfolio.
Noninterest income, excluding investment security gains and losses, was $50.5 million for the fourth quarter of 2012, compared to $47.3 million for the third quarter of 2012. The increase was primarily due to a $3.6 million increase in mortgage banking revenue driven by an increase in net servicing revenue as the mortgage servicing portfolio increased 37% and an increase in loan originations of 41% in the fourth quarter of 2012.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and early extinguishment of debt expense, was $52.4 million for the fourth quarter of 2012, compared to $51.6 million for the third quarter of 2012. The increase is primarily due to volume-related loan and sub-servicing expense at Cole Taylor Mortgage. Partially offsetting these increases, salaries and employee benefits decreased from $37.0 million in the third quarter of 2012 to $36.0 million. The decrease in these expenses was primarily due to lower performance-based incentive compensation expense, partially offset by an increase in salary costs related to an increase of 46 headcount or 11% at Cole Taylor Mortgage.
Credit Quality - Full Year 2012
Loan Portfolio Performance and Credit Quality
Significant asset quality improvement was achieved during 2012. Nonperforming loans declined by $43.6 million, or 42.3%, from $103.1 million at year end 2011 to $59.5 million at year end 2012. The two largest reductions were a $26.2 million decrease in nonperforming commercial and industrial nonaccrual loans and a $20.6 million decline in secured commercial real estate nonaccrual loans primarily due to payoffs and other remediation efforts.
Other real estate owned ("OREO") was $24.3 million at December 31, 2012, compared to $35.6 million at December 31, 2011. Total nonperforming assets were $83.8 million at December 31, 2012, down from $138.7 million at December 31, 2011 as sales and write downs exceeded new additions. The amount of nonperforming loans declined due to payoffs, loan workouts and other remediation efforts. Nonperforming assets to total assets were 1.44% at December 31, 2012, down from 2.96% at December 31, 2011.
Commercial criticized and classified loans were $131.6 million at December 31, 2012, down 27.9% from $182.6 million at December 31, 2011. These improvements are the result of significant nonperforming asset resolutions, combined with a slowdown in both migrations to nonperforming status and inflows to criticized and classified status.
Allowance and Provision for Loan Losses
The allowance for loan losses declined to $82.2 million at December 31, 2012, from $103.7 million at December 31, 2011, as credit quality trends continued to improve as demonstrated by declines in nonperforming loans. The decline in the allowance for loan losses resulted from net charge-offs exceeding the provision for loan losses. The allowance for loan losses as a percent of nonperforming loans increased to 138.1% at December 31, 2012, from 100.7% at December 31, 2011. For 2012, the provision for loan losses was $9.6 million, down from $49.3 million in 2011.
Credit Quality - Fourth Quarter 2012
Loan Portfolio Performance and Credit Quality
Total commercial criticized and classified loans increased $16.9 million to $131.6 million at December 31, 2012, compared to $114.7 million at September 30, 2012, primarily due to an increase in loans classified as special mention.
Nonperforming loans declined to $59.5 million at December 31, 2012, compared to $62.1 million at September 30, 2012, primarily due to paydowns and other resolutions partially offset by one commercial construction and land loan migrating to nonperforming status.
OREO and repossessed assets decreased by $4.6 million to $24.3 million at December 31, 2012, compared to $28.9 million at September 30, 2012, primarily due to portfolio write-downs and two asset sales.
Nonperforming assets were $83.8 million at December 31, 2012, down from $91.0 million at September 30, 2012. Nonperforming assets to total assets were 1.44% at December 31, 2012, compared to 1.77% at September 30, 2012.
Allowance and Provision for Loan Losses
The allowance for loan losses was $82.2 million at December 31, 2012, up from $79.7 million at September 30, 2012, primarily due to recoveries exceeding charge-offs by $1.3 million and the $1.2 million provision for loan losses. The allowance for loan losses as a percent of nonperforming loans was 138.1% at December 31, 2012, compared to 128.3% at September 30, 2012. The provision for loan losses was $1.2 million for the fourth quarter of 2012, compared to $900,000 for the third quarter of 2012.
Balance Sheet - Full Year 2012
Assets
Total assets at December 31, 2012, were $5.80 billion, up from $4.69 billion at December 31, 2011.
Cash and cash equivalents increased to $166.4 million at December 31, 2012, from $121.2 million at December 31, 2011, primarily to cover increased transactional needs for cash as a result of an increase in noninterest-bearing deposits.
Loans held for sale were $938.4 million at December 31, 2012, up from $186.0 million at December 31, 2011. The increase in loans held for sale is a result of continued growth in mortgage originations in 2012 and the timing of loan sales.
Net loans, excluding loans held for sale, at December 31, 2012, were $3.09 billion, up from $2.82 billion at December 31, 2011. Commercial loans were $2.76 billion at December 31, 2012, up from $2.63 billion at December 31, 2011, primarily due to increased commercial and industrial loans and new loans and leases closed by Cole Taylor Equipment Finance. Consumer-oriented loans were $416.6 million at December 31, 2012, up from $300.3 million at December 31, 2011, primarily the result of certain mortgages originated by Cole Taylor Mortgage being held in the loan portfolio.
Investment in Federal Home Loan Bank and Federal Reserve Bank stock was $75.0 million at December 31, 2012, up from $56.8 million at December 31, 2011. The increase in these investments is related to balance sheet growth and an increase in Federal Home Loan Bank advances.
Mortgage servicing rights increased to $78.9 million as of December 31, 2012, compared to $8.7 million at December 31, 2011. The increase in the servicing portfolio is part of our diversification strategy to build a full service mortgage business and includes both self originated and acquired servicing.
Liabilities and Stockholders' Equity
Total liabilities at December 31, 2012, of $5.24 billion increased from the December 31, 2011, total of $4.28 billion.
Total deposits were $3.53 billion at December 31, 2012, compared to $3.12 billion at December 31, 2011. The largest changes in deposits during 2012 were in core funding categories, including increases in noninterest-bearing deposits of $377.2 million, NOW accounts of $248.3 million and money market accounts of $87.3 million. Partially offsetting these increases were declines during 2012 in time deposits of $337.0 million, due to planned runoff of higher-priced deposits.
Accrued interest, taxes and other liabilities increased from $61.2 million at December 31, 2011, to $131.5 million at December 31, 2012, primarily due to accrued operating expenses, including incentive costs, and a $27.7 million increase in accrued liabilities primarily for the purchase of securities that had not settled at year end.
Short-term borrowings, comprised primarily of Federal Home Loan Bank advances and purchased fed funds, increased from $768.1 million at December 31, 2011, to $1.46 billion at December 31, 2012, and provided funding for the growth in loans held for sale.
Long-term borrowings were zero at December 31, 2012, down from $147.5 million at December 31, 2011. The decrease is due to maturities and early extinguishments as the Bank's need for longer-term borrowings from a duration perspective decreased.
Subordinated notes decreased from $89.6 million at December 31, 2011, to $33.4 million at December 31, 2012, due to the prepayment of the Bank's $60.0 million of 10% subordinated notes during the third quarter of 2012, which reduced interest costs.
Total stockholders' equity increased to $559.6 million at December 31, 2012, from $409.5 million at December 31, 2011. The increase was primarily due to the issuance and sale of $100 million of preferred stock in the fourth quarter of 2012 and net income of $61.9 million for the year.
Balance Sheet - Fourth Quarter 2012
Assets
Total assets at December 31, 2012, increased to $5.80 billion, compared to $5.14 billion at September 30, 2012.
Investment securities were $1.27 billion at December 31, 2012, an increase of $55.6 million compared to September 30, 2012, primarily due to an increase in available for sale municipal bonds as we have increased our holdings of certain tax-exempt securities that offer attractive risk-adjusted yields.
Loans held for sale were $938.4 million at December 31, 2012, compared to $422.6 million at September 30, 2012. The increase in loans held for sale is a result of continued growth in mortgage originations in the fourth quarter of 2012 and the timing of loan sales.
Net loans at December 31, 2012, excluding loans held for sale, were $3.09 billion, compared to $3.01 billion at September 30, 2012. Commercial loans were $2.76 billion at December 31, 2012, compared to $2.67 billion at September 30, 2012. The increase of $85.9 million was primarily due to new loans and leases closed by Cole Taylor Equipment Finance as well as additional commercial and industrial loans.
Investment in Federal Home Loan Bank and Federal Reserve Bank stock was $75.0 million at December 31, 2012 up from $52.8 million at September 30, 2012. The increase in these investments is related to balance sheet growth and an increase in Federal Home Loan Bank advances.
Mortgage servicing rights increased $25.7 million in the fourth quarter to $78.9 million as of December 31, 2012, primarily due to an increase in the principal balance of loans serviced to $8.53 billion as of December 31, 2012, from $6.24 billion as of September 30, 2012.
Other assets decreased $37.2 million in the fourth quarter to $149.6 million as of December 31, 2012, primarily due to a decrease in the fair value of mortgage derivatives for the mortgage pipeline.
Liabilities and Stockholders' Equity
Total liabilities at December 31, 2012, increased to $5.24 billion, compared to $4.69 billion at September 30, 2012.
Total deposits decreased to $3.53 billion at December 31, 2012, compared to $3.56 billion at September 30, 2012. The decrease was primarily due to runoff of time deposit balances of $136.1 million. In addition, noninterest-bearing deposits decreased $94.9 million primarily due to a seasonal impact on certain balances. Partially offsetting these decreases was a $155.4 million increase in NOW accounts from new customers and increased balances from existing customers.
Short-term borrowings increased $592.6 million in the fourth quarter to $1.46 billion as of December 31, 2012, primarily due to an increase in short term Federal Home Loan Bank advances and purchased fed funds, which were used to fund loan growth.
Total stockholders' equity increased from $447.6 million at September 30, 2012, to $559.6 million at December 31, 2012, primarily due to the issuance and sale of $100 million of preferred stock in the fourth quarter and net income of $21.5 million generated during the period.
Capital
At December 31, 2012, the Company's Tier I Risk Based Capital ratio was 14.21%, while its Total Risk Based Capital ratio was 16.27% and its Tier I Capital to Average Assets leverage ratio was 11.14%.
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.
Conference Call and Slide Presentation
A conference call hosted by Taylor Capital Group President & CEO Mark A. Hoppe will be held on Thursday, January 24, 2013, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). Investors, news media and others may access the call by telephone at 877-883-0383 (toll-free) or 412-902-6506 and entering the code 2767436. Participants are encouraged to dial into the call approximately 10 minutes prior to the start time.
This call is being webcast and can be accessed via a live Internet audio broadcast at Taylor Capital Group's website at www.taylorcapitalgroup.com.
Presentation slides to be addressed by management during the call will be available for download on the Company's Investor Relations web page at www.taylorcapitalgroup.com.
A replay of the conference call will be made available after approximately 1:00 p.m. Central Time (2:00 p.m. Eastern Time) on January 24, 2013, through February 15, 2013, and the instructions for accessing the replay will be available on the Company's website during that period.
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
-- 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 $5.8 billion as of December 31, 2012. The Bank specializes in serving the banking needs of closely held businesses and the people who manage them. With its national businesses, Cole Taylor Business Capital, Cole Taylor Equipment Finance and Cole Taylor Mortgage, the Bank also provides asset based lending, commercial equipment leasing and residential mortgage lending through a growing network of offices throughout the United States. Cole Taylor is a member of the FDIC and is an Equal Housing Lender.
Endnotes:
(1) Revenue is defined as net interest income plus noninterest income adjusted by investment securities gains and losses, derivative termination fees and impairment of investment securities. Schedules reconciling earnings in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") to non-GAAP measurement of pre-tax, pre-provision operating earnings and revenue are provided in the attached tables.
(2) Commercial criticized and classified loans (special mention, substandard, and nonaccrual loans) in commercial and industrial, commercial real estate, residential construction and land, and commercial construction and land, excludes consumer loans.
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", "prudent", "potential", "should", "will," "expect," "anticipate," "believe," "intend," "could" and "estimate" and similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities in 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:
-- Our business may be adversely affected by the highly regulated
environment in which we operate.
-- Competition from financial institutions and other financial services
providers may adversely affect our growth and profitability.
-- Our business is subject to the conditions of the local economy in which
we operate and continued weakness in the local economy and the real
estate markets may 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 adversely affect our business.
-- The preparation of our consolidated financial statements requires us to
make estimates and judgments, which are subject to an inherent degree of
uncertainty and which may differ from actual results.
-- Our allowance for loan losses may prove to be insufficient to absorb
losses in our loan portfolio.
-- Our mortgage loan repurchase reserve for losses could be insufficient.
-- We are subject to interest rate risk, including interest rate
fluctuations that could reduce our profitability.
-- Increasing our mortgage servicing rights ("MSR") portfolio may increase
the volatility of our earnings, and certain hedging strategies that we
use to manage investment in MSRs may be ineffective to offset any
adverse changes in the fair value of these assets due to changes in
interest rates and market liquidity.
-- If we are required to reduce the carrying value of the asset relating to
our MSRs, our financial condition and results of operations would be
negatively affected.
-- 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 resell a high volume of mortgage loans.
-- We have counterparty risk and therefore we may be adversely affected by
the soundness of other financial institutions.
-- 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 upon 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 are subject to lending concentration risks.
-- 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 recent 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 our credit ratings 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, we are dependent on the ability of our
banking subsidiary to make dividends and distributions to us, and our
other sources of funds are limited.
-- 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 or new products and services may subject us to
certain additional risks.
-- We may experience difficulties in managing our future growth.
-- We are subject to changes in federal and state tax laws and changes in
interpretation of existing laws.
-- Regulatory requirements including rules jointly proposed (and recently
indefinitely delayed) 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 second quarter
of 2008. In addition, regulatory restrictions and liquidity constraints
at the holding company level could impair our ability to make
distributions on our 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, 2011 Annual Report on Form 10-K filed with the SEC on March 9, 2012 as updated by our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings we have made with the Securities and Exchange Commission. 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited) (Unaudited) Sept. 30, Dec. 31,
Dec. 31, 2012 2011
2012
----
ASSETS
Cash and cash equivalents $166,385 $159,007 $121,164
Investment securities 1,267,757 1,212,139 1,279,676
Loans held for sale 938,379 422,621 185,984
Loans, net of allowance for loan losses of
$82,191 at December 31, 2012, $79,667 at
September 30, 2012 and $103,744 at
December 31, 2011 3,086,112 3,006,026 2,824,555
Premises, leasehold improvements and
equipment, net 16,062 15,516 14,882
Investment in Federal Home Loan Bank and
Federal Reserve Bank stock 74,950 52,813 56,781
Mortgage servicing rights 78,917 53,218 8,742
Other real estate and repossessed assets,
net 24,259 28,859 35,622
Other assets 149,589 186,776 158,404
------- ------- -------
Total assets $5,802,410 $5,136,975 $4,685,810
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $1,179,724 $1,274,610 $802,480
Interest-bearing 2,348,618 2,284,072 2,320,731
--------- --------- ---------
Total deposits 3,528,342 3,558,682 3,123,211
Accrued interest, taxes and other
liabilities 131,473 120,404 61,183
Short-term borrowings 1,463,019 870,434 768,133
Long-term borrowings -- 20,000 147,500
Junior subordinated debentures 86,607 86,607 86,607
Subordinated notes, net 33,366 33,274 89,648
------
Total liabilities 5,242,807 4,689,401 4,276,282
--------- --------- ---------
Stockholders' equity:
Preferred stock, Series A 100,000 -- --
Preferred stock, Series B 103,813 103,359 102,042
Preferred stock, Series D -- -- 4
Preferred stock, Series G -- -- 9
Nonvoting preferred stock 13 13 --
Common stock 302 301 297
Surplus 412,391 414,899 423,674
Accumulated deficit (63,537) (83,230) (118,426)
Accumulated other comprehensive income,
net 36,206 41,817 31,513
Treasury stock (29,585) (29,585) (29,585)
------- -------
Total stockholders' equity 559,603 447,574 409,528
------- ------- -------
Total liabilities and stockholders' equity $5,802,410 $5,136,975 $4,685,810
========== ========== ==========
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(dollars in thousands, except per share data)
For the Three Months Ended For the Twelve Months Ended
-------------------------- ---------------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, 2012 Dec. 31, 2011
2012 2012 2011
---- ---- ----
Interest income:
Interest and fees on loans $38,696 $36,561 $35,395 $145,962 $140,307
Interest and dividends on investment securities:
Taxable 7,974 8,897 10,268 37,078 44,864
Tax-exempt 1,013 733 677 3,100 2,874
Interest on cash equivalents 1 1 5 8 15
--- --- --- --- ---
Total interest income 47,684 46,192 46,345 186,148 188,060
------ ------ ------ ------- -------
Interest expense:
Deposits 4,352 4,399 5,990 19,100 29,147
Short-term borrowings 492 564 556 2,248 2,852
Long-term borrowings 11 32 563 612 5,851
Junior subordinated debentures 1,457 1,466 1,458 5,859 5,792
Subordinated notes 862 2,535 2,512 8,443 10,004
--- ----- ----- ----- ------
Total interest expense 7,174 8,996 11,079 36,262 53,646
----- ----- ------ ------ ------
Net interest income 40,510 37,196 35,266 149,886 134,414
Provision for loan losses 1,200 900 10,955 9,550 49,258
----- --- ------ ----- ------
Net interest income after provision for loan losses 39,310 36,296 24,311 140,336 85,156
------ ------ ------ ------- ------
Noninterest income:
Service charges 3,461 3,423 2,998 13,530 11,481
Mortgage banking revenue 44,285 40,676 9,053 125,505 20,384
Gain on sales of investment securities 1,488 -- 6 5,464 4,944
Other derivative income 1,156 1,790 3,344 4,322 7,026
Other noninterest income 1,572 1,361 1,137 6,226 5,407
----- ----- ----- ----- -----
Total noninterest income 51,962 47,250 16,538 155,047 49,242
------ ------ ------ ------- ------
Noninterest expense:
Salaries and employee benefits 35,991 37,024 19,402 124,930 64,736
Occupancy of premises, furniture and equipment 3,426 3,246 2,565 12,384 10,765
Nonperforming asset expense 2,816 613 1,622 4,951 5,264
Early extinguishment of debt 63 3,670 -- 7,721 3,444
FDIC assessment 1,830 1,766 1,632 6,795 6,705
Legal fees, net 780 1,020 920 3,413 3,821
Loan expense, net 2,410 1,862 970 6,815 3,005
Outside services 1,545 1,082 490 3,914 2,058
Other noninterest expense 6,423 5,616 4,245 20,814 16,595
----- ----- ----- ------ ------
Total noninterest expense 55,284 55,899 31,846 191,737 116,393
------ ------ ------ ------- -------
Income before income taxes 35,988 27,647 9,003 103,646 18,005
Income tax expense (benefit) 14,530 10,898 (73,317) 41,745 (73,110)
------ ------ ------- ------ -------
Net income 21,458 16,749 82,320 61,901 91,115
Preferred dividends and discounts (1,765) (1,757) (1,734) (7,012) (9,145)
Implied non-cash preferred dividend -- -- (10,501) -- (10,501)
--- --- ------- --- -------
Net income applicable to common stockholders $19,693 $14,992 $70,085 $54,889 $71,469
======= ======= ======= ======= =======
Basic income per common share $0.66 $0.50 $3.20 $1.84 $3.45
Diluted income per common share 0.65 0.49 3.20 1.79 3.45
Weighted-average common shares outstanding 28,515,040 28,430,871 20,684,652 28,294,884 19,474,273
Weighted-average diluted common shares outstanding 28,895,719 28,931,235 20,709,071 29,016,717 19,499,275
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(dollars in thousands)
Unaudited
---------
2012 2011
---- ----
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- -------
Condensed Income Data:
----------------------
Net interest income $40,510 $37,196 $36,378 $35,802 $35,266
Provision for loan losses 1,200 900 100 7,350 10,955
Total noninterest income 51,962 47,250 31,889 23,946 16,538
Total noninterest expense 55,284 55,899 43,986 36,568 31,846
Income before income taxes 35,988 27,647 24,181 15,830 9,003
Income tax expense (benefit) 14,530 10,898 9,956 6,361 (73,317)
Net income 21,458 16,749 14,225 9,469 82,320
Preferred dividends and discounts (1,765) (1,757) (1,748) (1,742) (1,734)
Implied non-cash preferred
dividend - - - - (10,501)
Net income applicable to common
stockholders $19,693 $14,992 $12,477 $7,727 $70,085
======= ======= ======= ====== =======
Non-GAAP Measures of Performance
(1)
--------------------------------
Revenue $90,984 $84,446 $65,247 $58,917 $51,988
Pre-tax, pre-provision
operating earnings 38,579 32,830 25,076 24,044 21,764
Per Share Data:
---------------
Basic earnings per common share $0.66 $0.50 $0.42 $0.26 $3.20
Diluted earnings per common share 0.65 0.49 0.41 0.26 3.20
Tangible book value per common
share 12.36 11.97 11.66 11.06 10.84
Weighted average common shares -
basic 28,515,040 28,430,871 28,158,304 28,071,406 20,684,652
Weighted average common shares -
diluted 28,895,719 28,931,235 29,093,447 28,622,798 20,709,071
Common shares outstanding -end
of period 28,792,042 28,756,717 28,602,394 28,428,015 28,360,076
Performance Ratios (annualized):
--------------------------------
Return on average assets 1.59% 1.33% 1.17% 0.81% 7.26%
Return on average equity 17.14% 15.19% 13.64% 9.32% 112.63%
Return on average common equity 22.40% 17.62% 15.86% 10.15% 182.46%
Efficiency ratio (2) 60.76% 66.19% 67.41% 62.07% 61.26%
Average Balance Sheet Data (3):
-------------------------------
Total assets $5,389,566 $5,026,706 $4,867,810 $4,660,021 $4,533,916
Investments 1,213,422 1,230,953 1,292,129 1,281,445 1,299,059
Cash equivalents 985 304 709 960 1,651
Loans held for sale 689,787 443,287 329,878 192,037 150,771
Loans 3,090,248 2,997,562 2,947,233 2,937,185 2,915,858
Total interest-earning assets 4,994,442 4,672,106 4,569,949 4,411,627 4,367,339
Interest-bearing deposits 2,282,290 2,193,790 2,260,395 2,286,294 2,365,451
Borrowings 1,241,905 1,224,884 1,214,391 1,151,240 1,080,583
Total interest-bearing
liabilities 3,524,195 3,418,674 3,474,786 3,437,534 3,446,034
Noninterest-bearing deposits 1,257,811 1,081,568 892,945 753,995 738,371
Total stockholders' equity 500,727 441,133 417,261 406,559 292,356
Tax Equivalent Net Interest
Margin:
---------------------------
Net interest income as stated $40,510 $37,196 $36,378 $35,802 $35,266
Add: Tax equivalent adjust. -
investment (4) 545 395 372 357 365
Tax equivalent adjust. -
loans (4) 30 30 32 32 32
Tax equivalent net interest
income $41,085 $37,621 $36,782 $36,191 $35,663
======= ======= ======= ======= =======
Net interest margin without tax
adjust. 3.23% 3.17% 3.20% 3.26% 3.21%
Net interest margin -tax
equivalent (4) 3.28% 3.21% 3.23% 3.29% 3.25%
Yield on earning assets without
tax adjust. 3.81% 3.94% 4.04% 4.21% 4.22%
Yield on earning assets -tax
equivalent (4) 3.85% 3.98% 4.08% 4.25% 4.26%
Yield on interest-bearing
liabilities 0.81% 1.05% 1.11% 1.22% 1.28%
Net interest spread without tax
adjust. 3.00% 2.89% 2.93% 2.99% 2.94%
Net interest spread -tax
equivalent (4) 3.04% 2.93% 2.97% 3.02% 2.98%
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%.
SUMMARY OF KEY YEAR-TO-DATE FINANCIAL DATA
(dollars in thousands)
Unaudited
---------
Year To Date
December 31,
------------
2012 2011
---- ----
Condensed Income
Data:
----------------
Net interest income $149,886 $134,414
Provision for loan
losses 9,550 49,258
Total noninterest
income 155,047 49,242
Total noninterest
expense 191,737 116,393
Income before
income taxes 103,646 18,005
Income tax expense
(benefit) 41,745 (73,110)
Net income 61,901 91,115
Preferred dividends
and discounts (7,012) (9,145)
Implied non-cash
prefered dividend - (10,501)
Net income
applicable to
common
stockholders $54,889 $71,469
======= =======
Non-GAAP Measures
of Performance (1)
-------------------
Revenue $299,594 $180,179
Pre-tax, pre-
provision
operating earnings $120,529 72,494
Per Share Data:
---------------
Basic earnings per
common share $1.84 $3.45
Diluted earnings
per common share 1.79 3.45
Tangible book value
per common share 12.36 10.84
Weighted average
common shares -
basic 28,294,884 19,474,273
Weighted average
common shares -
diluted 29,016,717 19,499,275
Common shares
outstanding -end
of period 28,792,042 28,360,076
Performance Ratios:
-------------------
Return on average
assets 1.24% 2.06%
Return on average
equity 14.02% 36.73%
Return on average
common equity 16.76% 65.19%
Efficiency ratio
(2) 64.00% 64.60%
Average Balance
Sheet Data (3):
----------------
Total assets $4,987,240 $4,417,002
Investments 1,254,310 1,347,734
Cash equivalents 739 1,570
Loans held for sale 414,582 106,939
Loans 2,993,335 2,845,013
Total interest-
earning assets 4,662,966 4,301,256
Interest-bearing
deposits 2,255,596 2,373,644
Borrowings 1,208,243 1,089,973
Total interest-
bearing
liabilities 3,463,839 3,463,617
Noninterest-
bearing deposits 997,526 650,679
Total stockholders'
equity 441,581 248,077
Tax Equivalent Net
Interest Margin:
------------------
Net interest income
as stated $149,886 $134,414
Add: Tax equivalent adjust. -
investment (4) 1,669 1,547
Tax equivalent adjust. -
loans (4) 123 137
Tax equivalent net
interest income $151,678 $136,098
======== ========
Net interest margin
without tax
adjust. 3.21% 3.12%
Net interest margin
-tax equivalent
(4) 3.25% 3.16%
Yield on earning
assets without tax
adjust. 3.99% 4.37%
Yield on earning
assets -tax
equivalent (4) 4.03% 4.41%
Yield on interest-
bearing
liabilities 1.05% 1.30%
Net interest spread
-without tax
adjust. 2.94% 2.82%
Net interest spread
-tax equivalent
(4) 2.98% 2.86%
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%.
SUMMARY OF KEY PERIOD-END FINANCIAL DATA
(dollars in thousands)
Unaudited
---------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2012 2012 2012 2012 2011
---- ---- ---- ---- ----
Condensed Balance Sheet Data:
-----------------------------
Investment securities $1,267,757 $1,212,139 $1,240,405 $1,299,572 $1,279,676
Loans held for sale 938,379 422,621 255,693 210,040 185,984
Loans 3,168,303 3,085,693 2,981,827 2,903,797 2,928,299
Allowance for loan losses 82,191 79,667 86,992 93,509 103,744
Total assets 5,802,410 5,136,975 4,797,101 4,695,069 4,685,810
Total deposits 3,528,342 3,558,682 3,184,610 2,989,639 3,123,211
Total borrowings 1,582,992 1,010,315 1,097,836 1,186,115 1,091,888
Total stockholders' equity 559,603 447,574 436,408 416,766 409,528
Asset Quality Ratios:
---------------------
Nonperforming loans $59,537 $62,096 $74,104 $93,498 $103,061
Nonperforming assets 83,796 90,955 106,731 130,439 138,683
Allowance for loan losses to total
loans
2.59% 2.58% 2.92% 3.22% 3.54%
(excluding loans held for sale)
Allowance for loan losses to
nonperforming loans 138.05% 128.30% 117.39% 100.01% 100.66%
Nonperforming assets to total loans
plus
repossessed property (1)
2.62% 2.92% 3.54% 4.44% 4.68%
Capital Resources (Taylor Capital
Group, Inc.):
---------------------------------
Total Capital (to Risk Weighted
Assets) 16.27% 14.41% 16.03% 15.46% 14.72%
Tier I Capital (to Risk Weighted
Assets) 14.21% 12.29% 12.59% 11.95% 11.22%
Leverage (to average assets) 11.14% 9.43% 9.41% 9.08% 8.84%
Total Capital $685,998 $553,977 $579,618 $541,423 $517,706
Tier I Capital 599,504 472,221 455,144 418,460 394,630
(1) During fourth quarter 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:
December 31, 2012 September 30, 2012 December 31, 2011
----------------- ------------------ -----------------
Loans Balance Percent of Gross Loans Balance Percent of Gross Loans Balance Percent of Gross Loans
----- ---------------------- ------- ---------------------- ------- ----------------------
Commercial and industrial $1,590,587 50.1% $1,537,316 49.8% $1,426,221 48.8%
Commercial real estate secured 965,978 30.4 979,004 31.7 1,037,976 35.4
Residential construction & land 45,903 1.5 47,184 1.5 64,824 2.2
Commercial construction & land 103,715 3.3 95,618 3.1 99,021 3.4
Lease receivables 50,803 1.6 11,979 0.4 -- --
Total commercial loans 2,756,986 86.9 2,671,101 86.5 2,628,042 89.8
Consumer-oriented loans 416,635 13.1 415,334 13.5 300,257 10.2
------- ---- ------- ---- ------- ----
Gross loans 3,173,621 100.0% 3,086,435 100.0% 2,928,299 100.0%
===== ===== =====
Less: Unearned discount (5,318) (742) --
------ ---- ---
Total loans 3,168,303 3,085,693 2,928,299
Less: Loan loss allowance (82,191) (79,667) (103,744)
------- ------- --------
Net loans $3,086,112 $3,006,026 $2,824,555
========== ========== ==========
Loans Held for Sale $938,379 $422,621 $185,984
======== ======== ========
The following table provides details of the Company's commercial real estate portfolio:
December 31, 2012 September 30, 2012 December 31, 2011
----------------- ------------------ -----------------
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 $109,266 11.3% $116,461 11.9% $143,052 13.8%
Office/mixed use property 113,216 11.7 115,193 11.8 113,429 10.9
Commercial properties 111,852 11.6 101,428 10.4 129,921 12.5
Specialized - other 69,827 7.2 77,996 7.9 80,971 7.8
Other commercial properties. 28,870 3.0 25,771 2.6 40,270 3.9
------ --- ------ --- ------ ---
Subtotal commercial non-owner occupied 433,031 44.8 436,849 44.6 507,643 48.9
Commercial owner-occupied 425,723 44.1 437,796 44.7 446,259 43.0
Multi-family properties 107,224 11.1 104,359 10.7 84,074 8.1
------- ---- ------- ---- ------ ---
Total commercial real estate secured $965,978 100.0% $979,004 100.0% $1,037,976 100.0%
======== ===== ======== ===== ========== =====
CREDIT QUALITY (unaudited)
(dollars in thousands)
At or for the Three Months Ended
--------------------------------
Dec. 31, Sept. 30, Dec. 31,
2012 2012 2011
---- ----
Nonperforming Assets:
---------------------
Loans contractually past due
90 days or more but still
accruing interest $ -- $ -- $ --
Nonaccrual loans:
Commercial and industrial 16,705 19,712 42,909
Commercial real estate
secured 14,530 23,684 35,159
Residential construction and
land 4,495 4,595 7,810
Commercial construction and
land 15,220 4,194 5,279
Consumer 8,587 9,911 11,904
-----
Total nonaccrual loans 59,537 62,096 103,061
------
Total nonperforming loans 59,537 62,096 103,061
Other real estate owned and
repossessed assets 24,259 28,859 35,622
------ ------ ------
Total nonperforming assets $83,796 $90,955 $138,683
======= ======= ========
Other Credit Quality
Information:
--------------------
Commercial criticized and
classified loans (1)
Special mention $58,025 $41,621 $42,697
Substandard 22,608 20,861 48,716
Nonaccrual 50,950 52,185 91,157
------ ------ ------
Total commercial criticized
and classified loans $131,583 $114,667 $182,570
======== ======== ========
Loans contractually past due
30 through 89 days and
still accruing $6,111 $5,808 $7,409
Performing restructured
loans 17,456 17,394 14,176
Recorded balance of impaired
loans 70,343 71,671 108,535
Allowance for loan losses
related to impaired loans. 12,057 11,748 32,044
Allowance for Loan Losses
Summary:
-------------------------
Allowance at beginning of
period $79,667 $86,992 $105,805
(Charge-offs), net of
recoveries:
Commercial and commercial
real estate 1,793 (5,288) (10,898)
Real estate - construction
and land 125 (2,353) (1,498)
Consumer (594) (584) (620)
---- ---- ----
Total net (charge-offs)
recoveries 1,324 (8,225) (13,016)
Provision for loan losses 1,200 900 10,955
----- --- ------
Allowance at end of period $82,191 $79,667 $103,744
======= ======= ========
Key Credit Ratios:
------------------
Nonperforming loans to total
loans (2) 1.88% 2.01% 3.52%
Nonperforming assets to
total loans plus
repossessed property (2) 2.62% 2.92% 4.68%
Nonperforming assets to
total assets 1.44% 1.77% 2.96%
Annualized net charge-offs
to average total loans (2) (0.17)% 1.10% 1.79%
Allowance to total loans at
end of period (excluding
loans held for sale) 2.59% 2.58% 3.54%
Allowance to nonperforming
loans 138.05% 128.30% 100.66%
30 - 89 days past due to
total loans (2) 0.19% 0.19% 0.25%
(1) Commercial criticized and
classified loans excludes
consumer loans.
(2) During fourth quarter 2012, the
Company revised its methodology
for calculating these metrics
to exclude loans held for sale
from total loans. Prior period
ratios have been adjusted to
reflect this change.
LOAN PORTFOLIO AGING (unaudited)
(dollars in thousands)
As of December 31, 2012
-----------------------
30-89 Days Past Due >90 Days Past Due and Still Nonaccrual Current Total Loans % of Allowance
Accruing Total for Loan
Loans Loss
Allocation
------------------- --------------------------- ---------- ------- ----------- ----- ----------
Commercial and industrial $ -- $ -- $16,705 $1,573,882 $1,590,587 50% $35,946
Commercial real estate secured:
Commercial non-owner
occupied:
Retail strip centers or malls -- -- 5,163 104,103 109,266 3% 3,414
Office/mixed use property -- -- 1,913 111,303 113,216 4% 2,223
Commercial properties -- -- 75 111,777 111,852 4% 2,332
Specialized - other -- -- 1,673 68,154 69,827 2% 1,225
Other commercial properties -- -- -- 28,870 28,870 1% 519
--- --- --- ------ ------ --- ---
Subtotal commercial non-owner occupied -- -- 8,824 424,207 433,031 14% 9,713
Commercial owner-occupied -- -- 992 424,731 425,723 13% 8,253
Multi-family properties -- -- 4,714 102,510 107,224 3% 2,576
--- --- ----- ------- ------- --- -----
Total commercial real estate secured -- -- 14,530 951,448 965,978 30% 20,542
Residential construction & land:
Residential construction -- -- 4,495 26,088 30,583 1% 4,185
Land -- -- -- 15,320 15,320 1% 2,457
--- --- --- ------ ------ --- -----
Total residential construction and land -- -- 4,495 41,408 45,903 2% 6,642
Commercial construction and land -- -- 15,220 88,495 103,715 3% 8,928
Lease receivables -- -- -- 45,485 45,485 2% 273
--- --- --- ------ ------ --- ---
Total commercial loans -- -- 50,950 2,700,718 2,751,668 87% 72,331
Consumer loans 6,111 -- 8,587 401,937 416,635 13% 9,860
----- --- ----- ------- ------- --- -----
Total loans $6,111 $ -- $59,537 $3,102,655 $3,168,303 100% $82,191
====== ==== ======= ========== ========== === =======
FUNDING LIABILITIES (unaudited)
(dollars in thousands)
The following table presents the distribution of the Company's average deposit account balances for the periods indicated:
For the Quarter Ended
---------------------
December 31, 2012 September 30, 2012 December 31, 2011
----------------- ------------------ -----------------
Average Balance Percent of Deposits Average Balance Percent of Deposits Average Balance Percent of Deposits
--------------- ------------------- --------------- ------------------- --------------- -------------------
Noninterest-bearing deposits $1,257,811 35.5% $1,081,568 33.0% $738,371 23.8%
Interest-bearing deposits:
NOW accounts 460,187 13.0 376,980 11.5 302,516 9.8
Savings deposits 39,874 1.1 39,690 1.2 38,337 1.2
Money market accounts 743,479 21.0 700,357 21.4 632,451 20.4
Brokered money market deposits 24,036 0.7 32,365 1.0 -- --
Certificates of deposit 568,549 16.1 560,962 17.1 712,900 23.0
Brokered certificates of deposit 215,189 6.1 255,219 7.8 432,071 13.9
CDARS time deposits 211,865 6.0 206,674 6.3 189,546 6.1
Public time deposits 19,111 0.5 21,543 0.7 57,630 1.8
------ --- ------ --- ------ ---
Total interest-bearing deposits 2,282,290 64.5 2,193,790 67.0 2,365,451 76.2
--------- ---- --------- ---- --------- ----
Total deposits $3,540,101 100.0% $3,275,358 100.0% $3,103,822 100.0%
========== ===== ========== ===== ========== =====
The following table sets forth the period end balances of total deposits as of each of the dates indicated below.
Dec. 31, Sept. 30, Dec. 31,
2012 2012 2011
---- ---- ----
Noninterest-bearing
deposits $1,179,724 $1,274,610 $802,480
Interest-bearing
deposits:
NOW accounts 573,133 417,774 324,877
Savings accounts 39,915 39,426 38,370
Money market accounts 744,791 710,562 657,500
Brokered money market
deposits 27,840 17,229 --
Certificates of
deposit 561,998 600,682 694,712
Brokered certificates
of deposit 199,604 230,802 407,068
CDARS time deposits 186,187 241,001 144,118
Public time deposits 15,150 26,596 54,086
------ ------ ------
Total interest-
bearing deposits 2,348,618 2,284,072 2,320,731
--------- --------- ---------
Total deposits $3,528,342 $3,558,682 $3,123,211
========== ========== ==========
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, 2012 Sept. 30, June 30, Mar. 31, Dec. 31,
2012 2012 2012 2011
---- ---- ---- ----
Income before income taxes $35,988 $27,647 $24,181 $15,830 $9,003
Add back (subtract):
Credit costs:
Provision for loan losses 1,200 900 100 7,350 10,955
Nonperforming asset expense 2,816 613 828 694 1,622
----- --- --- --- -----
Credit costs subtotal 4,016 1,513 928 8,044 12,577
Other:
Gain on sales of investment
securities (1,488) -- (3,020) (956) (6)
Early extinguishment of debt 63 3,670 2,987 1,001 --
Impairment of investment
securities -- -- -- 125 190
--- --- --- --- ---
Other subtotal (1,425) 3,670 (33) 170 184
------ ----- --- --- ---
Pre-tax, pre-provision
operating earnings $38,579 $32,830 $25,076 $24,044 $21,764
======= ======= ======= ======= =======
The following, as of the dates indicated, details the components of revenue.
For the Three Months Ended
--------------------------
Dec. 31, Sept. 30, 2012 June 30, 2012 Mar. 31, Dec. 31,
2012 2012 2011
---- ---- ----
Net interest
income $40,510 $37,196 $36,378 $35,802 $35,266
Noninterest
income 51,962 47,250 31,889 23,946 16,538
Add back
(subtract):
Gain on sales of
investment
securities (1,488) -- (3,020) (956) (6)
Impairment of
investment
securities -- -- -- 125 190
--- --- ---
Revenue $90,984 $84,446 $65,247 $58,917 $51,988
======= ======= ======= ======= =======
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, derivative termination
fees, early extinguishment of debt
and impairment of investment
securities 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,
derivative termination fees and
impairment of investment
securities. 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.
