Magazine article American Banker

3Q Earnings: Taylor Sends Its Investors Letter to Convey Optimism

Magazine article American Banker

3Q Earnings: Taylor Sends Its Investors Letter to Convey Optimism

Article excerpt

Byline: Robert Barba

Rarely do banking companies feel the need to write their shareholders to explain quarterly results.

But executives at Taylor Capital Group Inc. in Rosemont, Ill., said Wednesday that they wanted to go beyond the usual conference call to offer some perspective on its $80.5 million net loss, the largest of four straight quarterly losses.

The residential construction portfolio continued to weaken, causing a rise in nonperforming loans and chargeoffs, but the exposure to that sector is shrinking, Bruce W. Taylor, the $4 billion-asset company's chairman, said in an interview.

And with a slew of hirings and fresh capital, Taylor Capital is poised to grow, he said. On top of the $120 million of capital it raised during the quarter, it recently applied for $105 million under the Treasury Department's Capital Purchase Program.

"There are a lot of good things happening, despite the economic turmoil, and we want to highlight the progress that has been made in our strategic growth initiative," Mr. Taylor said. "That gets lost occasionally."

The letter Taylor Capital sent to its shareholders also pointed out that $64 million of its loss came from two one-time charges. The company wrote off $47.3 million of deferred tax assets, which executives said it expects to recover eventually. It also had a $16.7 million accounting adjustment related to preferred stock it issued in the quarter.

Taylor Capital, which had earned $7.2 million a year earlier, swung to a loss largely because of a loan-loss provision that increased 1,450% from a year earlier and 6.8% from the second quarter, to $52.7 million.

Eileen Rooney, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., had projected a $13.5 million provision, following the second quarter's "unusually high" $49.4 million provision.

"I expected it to come down, but some new credits have moved on to nonperforming," Ms. …

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