UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
Commission File No. 0-50034
TAYLOR CAPITAL GROUP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 36-4108550 | |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification Number) |
9550 West Higgins Road
Rosemont, IL 60018
(Address, including zip code, of principal executive offices)
(847) 653-7978
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of outstanding shares of each of the issuer’s classes of common stock, as of the latest practicable date: At April 30, 2004, there were 9,497,909 shares of Common Stock, $0.01 par value, outstanding.
TAYLOR CAPITAL GROUP, INC.
TAYLOR CAPITAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share and per share data)
| March 31, 2004 |
December 31, 2003 |
|||||||
| ASSETS |
||||||||
| Cash and cash equivalents: |
||||||||
| Cash and due from banks |
$ | 55,825 | $ | 53,254 | ||||
| Short-term investments |
550 | 3,550 | ||||||
| Federal funds sold |
— | 31,700 | ||||||
| Total cash and cash equivalents |
56,375 | 88,504 | ||||||
| Investment securities: |
||||||||
| Available-for-sale, at fair value |
576,955 | 487,777 | ||||||
| Held-to-maturity, at amortized cost (fair value of $561 and $564 at March 31, 2004 and December 31, 2003, respectively) |
525 | 525 | ||||||
| Loans, net of allowance for loan losses of $35,225 and $34,356 at March 31, 2004 and December 31, 2003, respectively |
1,982,491 | 1,927,652 | ||||||
| Premises, leasehold improvements and equipment, net |
19,868 | 20,548 | ||||||
| Investment in Federal Home Loan Bank and Federal Reserve Bank stock, at cost |
12,175 | 12,058 | ||||||
| Other real estate and repossessed assets, net |
1,596 | 164 | ||||||
| Goodwill, net of amortization of $11,696 at March 31, 2004 and December 31, 2003 |
23,354 | 23,354 | ||||||
| Other assets |
44,515 | 43,074 | ||||||
| Total assets |
$ | 2,717,854 | $ | 2,603,656 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Deposits: |
||||||||
| Noninterest-bearing |
$ | 429,452 | $ | 445,193 | ||||
| Interest-bearing |
1,652,618 | 1,567,891 | ||||||
| Total deposits |
2,082,070 | 2,013,084 | ||||||
| Short-term borrowings |
273,397 | 219,108 | ||||||
| Accrued interest, taxes and other liabilities |
38,825 | 39,479 | ||||||
| Notes payable and FHLB advances |
95,500 | 110,500 | ||||||
| Junior subordinated debentures |
46,400 | 45,000 | ||||||
| Total liabilities |
2,536,192 | 2,427,171 | ||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $.01 par value, 5,000,000 shares authorized, Series A 9% noncumulative perpetual, 1,530,000 shares issued and outstanding, $25 stated and redemption value |
38,250 | 38,250 | ||||||
| Common stock, $.01 par value; 25,000,000 shares authorized; 9,820,796 and 9,809,731 shares issued at March 31, 2004 and December 31, 2003, respectively; 9,497,789 and 9,486,724 shares outstanding at March 31, 2004 and December 31, 2003, respectively |
98 | 98 | ||||||
| Surplus |
144,165 | 143,918 | ||||||
| Unearned compensation - stock grants |
(1,113 | ) | (1,138 | ) | ||||
| Retained earnings (deficit) |
599 | (2,106 | ) | |||||
| Accumulated other comprehensive income |
6,720 | 4,520 | ||||||
| Treasury stock, at cost, 323,007 shares at March 31, 2004 and December 31, 2003 |
(7,057 | ) | (7,057 | ) | ||||
| Total stockholders’ equity |
181,662 | 176,485 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,717,854 | $ | 2,603,656 | ||||
See accompanying notes to consolidated financial statements
1
TAYLOR CAPITAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(in thousands, except per share data)
| For the Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Interest income: |
||||||||
| Interest and fees on loans |
$ | 26,999 | $ | 28,328 | ||||
| Interest and dividends on investment securities: |
||||||||
| Taxable |
4,980 | 5,782 | ||||||
| Tax-exempt |
513 | 597 | ||||||
| Interest on cash equivalents |
18 | 80 | ||||||
| Total interest income |
32,510 | 34,787 | ||||||
| Interest expense: |
||||||||
| Deposits |
6,527 | 7,608 | ||||||
| Short-term borrowings |
499 | 589 | ||||||
| Notes payable and FHLB advances |
1,094 | 1,201 | ||||||
| Junior subordinated debentures |
1,288 | 1,210 | ||||||
| Total interest expense |
9,408 | 10,608 | ||||||
| Net interest income |
23,102 | 24,179 | ||||||
| Provision for loan losses |
2,750 | 2,300 | ||||||
| Net interest income after provision for loan losses |
20,352 | 21,879 | ||||||
| Noninterest income: |
||||||||
| Service charges |
2,783 | 3,148 | ||||||
| Trust and investment management fees |
1,238 | 1,063 | ||||||
| Other noninterest income |
654 | 324 | ||||||
| Total noninterest income |
4,675 | 4,535 | ||||||
| Noninterest expense: |
||||||||
| Salaries and employee benefits |
10,731 | 10,839 | ||||||
| Occupancy of premises |
1,807 | 1,583 | ||||||
| Furniture and equipment |
1,135 | 807 | ||||||
| Legal fees, net |
329 | (1,016 | ) | |||||
| Advertising and public relations |
422 | 1,330 | ||||||
| Corporate insurance |
622 | 833 | ||||||
| Computer processing |
434 | 498 | ||||||
| Other noninterest expense |
3,303 | 3,576 | ||||||
| Total noninterest expense |
18,783 | 18,450 | ||||||
| Income before income taxes |
6,244 | 7,964 | ||||||
| Income taxes |
2,108 | 2,839 | ||||||
| Net income |
$ | 4,136 | $ | 5,125 | ||||
| Preferred dividend requirements |
(861 | ) | (861 | ) | ||||
| Net income applicable to common stockholders |
$ | 3,275 | $ | 4,264 | ||||
| Basic earnings per common share |
$ | 0.35 | $ | 0.45 | ||||
| Diluted earnings per common share |
0.34 | 0.45 | ||||||
See accompanying notes to consolidated financial statements
2
TAYLOR CAPITAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited)
(in thousands, except per share data)
| Series A 9% Noncumulative Perpetual Preferred Stock |
Common Stock |
Surplus |
Unearned Compensation - Stock Grants |
Retained Earnings (Deficit) |
Accumulated Other Comprehensive Income |
Treasury Stock |
Total |
|||||||||||||||||||||||
| Balance at December 31, 2003 |
$ | 38,250 | $ | 98 | $ | 143,918 | $ | (1,138 | ) | $ | (2,106 | ) | $ | 4,520 | $ | (7,057 | ) | $ | 176,485 | |||||||||||
| Issuance of stock grants |
— | — | 100 | (100 | ) | — | — | — | — | |||||||||||||||||||||
| Amortization of stock grants |
— | — | — | 125 | — | — | — | 125 | ||||||||||||||||||||||
| Exercise of stock options |
— | — | 118 | — | — | — | — | 118 | ||||||||||||||||||||||
| Tax benefit on stock options exercised and stock awards |
— | — | 29 | — | — | — | — | 29 | ||||||||||||||||||||||
| Comprehensive income: |
||||||||||||||||||||||||||||||
| Net income |
— | — | — | — | 4,136 | — | — | 4,136 | ||||||||||||||||||||||
| Change in unrealized gains on available-for-sale investment securities, net of income taxes |
— | — | — | — | — | 2,243 | — | 2,243 | ||||||||||||||||||||||
| Changes in deferred gain from termination of cash flow hedging instruments, net of income taxes |
— | — | — | — | — | (43 | ) | — | (43 | ) | ||||||||||||||||||||
| Total comprehensive income |
6,336 | |||||||||||||||||||||||||||||
| Dividends: |
||||||||||||||||||||||||||||||
| Preferred — $0.5625 per share |
— | — | — | — | (861 | ) | — | — | ||||||||||||||||||||||