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Taylor Capital Group, Inc. (TAYC) |
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CEOCFO Current
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This is a printer friendly page! Family-run
Cole Taylor Bank, Chicago’s business bank, serves the financial needs of
Chicago’s small- and mid-corporate market and leverages its own expertise in the
arena of owner-operated business to add value to their business customer relationships BIO: CEOCFOinterviews: Mr.
Taylor, tell us about Cole Taylor Bank and how you became its Chairman. Mr. Taylor: “Cole Taylor Bank is a family business that was originally started by my grandfather, then run by my father, and now run by my brother Bruce and me. Today, we control and own 60% of the stock of the public parent company, Taylor Capital Group, Inc. One of the greatest strengths of a family-managed business is that your leadership shares the same guiding interest and commitment: the success of your business. Although in some family businesses there are rivalries and other dysfunctional relationships, which can distract you from achieving your business and financial goals, at Cole Taylor, we really depend on each other, support each other, and value what the other brings to the table. As partners in running our business, my brother and I each offer unique yet complementary skills – and we are each other’s best champions.” CEOCFOinterviews: Please tell us about your customer base. Mr. Taylor: “We focus on Chicago area owned and operated businesses. Our customer segments include businesses up to about $50 MM in sales, although some of our largest customers have sales of hundreds of millions. We also target commercial real estate developers, as well as the owners and managers of the businesses that bank with us.” CEOCFOinterviews: How is Chicago faring economically these days? How does that affect Cole Taylor Bank? Mr. Taylor: “In Chicago, we are blessed to be in a diverse economy, where many different industries are represented, along with a strong service economy. We have specialty niche manufacturers and distributors, wholesalers, different kinds of retail operations and a strong professional service sector. I think not being dependent on any one industry has served Chicago well. Our customer base reflects the diversity of the Chicago area. While we have experienced the general down-turn and slow-down of the economy overall, we are very fortunate to be executing our business strategy in Chicago. I do not think there is a more robust market place in the country for the owner-operated business. Also, I have noticed in recent conversations with customers that they are starting to get more optimistic about the prospects for their businesses.” CEOCFOinterviews: Your bank is reputed to provide superior service. What does that mean and what are you providing for your customers? Mr.
Taylor: “We provide superior service on multiple levels. First, we
constantly review our customers’ day-to-day banking experience with us. We
survey our customers to see how we are doing, and we work proactively with our
relationship officers to act on that feedback. Second, we strive to ensure
that a live person answers all incoming phone calls. Despite this era of high technology,
we know this human touch is what our customers want. When it’s just not
possible to answer a call directly, we return all calls within the same business day. We
also make sure that when we need to re-direct a call, we are getting the caller to the
right person. Finally, if there is a loan request on the table, we are committed to
processing it as quickly as possible so that we can let the customer know right away
whether we are able to provide the loan.” “We could have the best relationships in the world and understand strategically how the bank could help our customers’ business, but if our employees did not execute our strategy well, then there would be a breakdown of service. Therefore, we want to reach out to our customers across all points of contact within the bank and the customer. That to me is the backbone of the level of high-quality service that we strive to achieve.” “We do not hesitate to make introductions between customers if we think there is an opportunity for them to do business together. There is a situation right now where I made an introduction of a trucking company to a large consumer product company and I think our customer in the trucking business will be able to get that piece of business. That creates an endearment between our customer and us. There are basic banking services that encompass our core product set, but then there is so much more we do to add value to our customer relationships. We really try to help customers build their businesses by making appropriate introductions of key people and resources.” CEOCFOinterviews: How do you reach potential customers? Mr. Taylor: “We reach potential customers in a myriad of ways. We get many referrals from satisfied customers. Even though Chicago is a big city, it seems small because many people know each other and relationships matter. If I have a satisfied customer, he or she frequently may know many other people who happen to be in an owner/operator situation themselves. We have an active network of professionals such as accountants and attorneys, and we have mutual opportunities that we share. In addition, our board of directors represents a good mix of businesses in the Chicago area, and they actively prospect for us. We also ask all of our employees to help us attract new business. Every Cole Taylor employee has the mindset that he or she is a business-generating officer, even if they are not in a sales position. Our relationship managers, the people that have the primary interface with our customers, are focused because they have the responsibility for business development. In addition, our marketing department develops lists of companies that fit our profile, and we target those. All of these factors working together are what builds our business.” CEOCFOinterviews: Do many of your customers do their personal banking with you? Mr. Taylor: “Many of the owners and managers of the companies that bank with us do their personal banking with us through our Wealth Management Group. Through this group, we provide lending, financial planning services, insurance and more." CEOCFOinterviews: What areas of services are growing fastest for you and are there areas of service that you would like to add? Mr. Taylor: “A very important lead product is cash management, which involves real-time information reporting on cash in-flows and out-flows. Customers can validate that a check has been issued and payment is appropriate. When interest rates are higher than they are today, it becomes much more important for them to take excess balances and put them to work by reducing their outstanding loan or in some kind of investment account. As far as diversification of financial services, some banks have been successful in providing insurance and investment banking, while others have not. A lot of banks that were focused on capital markets activity have either closed down those operations or split them up because they have not been successful. Given our mid-market customer base, these services are not as applicable as they would be to the large corporate market. However, if some of our larger customers needed capital markets services, we would explore providing those to them through a financial partner.” CEOCFOinterviews: You have ten banking centers now; do you see the need for additional? Mr. Taylor: “Unlike many of the banks in the Chicago area that have made huge increases in the number of branches, that is not our business model. We are revalidating our current locations and deciding where else we need to be in order to most strategically expand our footprint in Chicagoland. Our banking strategy is a wholesale business-to-business strategy and is not dependent on numerous banking locations; however, it is dependent on having branches in the right locations.” CEOCFOinterviews: The population of many cities has changed as far as the make-up of the people. Do you need to address that as a banking organization? Mr. Taylor: “Although we do not focus on selling consumer financial services, we are still very aware of the communities we serve and the various ethnicities that make up Chicago’s landscape. We pride ourselves in being very responsive to the unique needs of the various communities that we serve. We make sure that we have customer representatives who speak the languages of our diverse customer groups, and we are very active in community-based programs that target community development. In fact, the government has consistently given us outstanding ratings on our community reinvestment efforts. Compared to many banks, we really are in touch with our communities and their changing needs.” CEOCFOinterviews: Will
you please tell us more about the outstanding ratings for community reinvestment? CEOCFOinterviews: What is the current financial position of the bank? Mr. Taylor: “Our bank is a margin-driven bank; our earnings are driven by the difference between what we earn on our assets and what we pay on our liabilities. With this historically low-interest environment, that spread has been compressed. Any fees we earn on cash management products and services offset some of that, but we also have many other tools available to mitigate the interest rate margin compression.” CEOCFOinterviews: Why should potential investors be interested in your company, and what should they know that they might not realize when they first look at the company? Mr. Taylor: “The opportunity for us to grow our market share and improve our financial results significantly is real. Speaking as a 60% owner of Cole Taylor, I think the version of relationship banking that we practice works. We relate to a business owner in a way that other banks cannot, and that resonates with our customer base and the marketplace. Also, the marketplace in Chicago has changed; huge money-center banks have swallowed up most banks of our size. Employee turnover, strategic shifts, and decreasing service levels in these big banks have left business owners very unsatisfied. Business owners want consistency, they want high quality, and they want a personal relationship with their bank – and that is what Cole Taylor delivers.” “In addition, we are very
focused on our strategy. In the last few years we have elected to discontinue some
activities that although profitable, were diverting our attention away from an exclusive
focus on Chicago business banking.” “I feel fortunate to be
an owner of this company and to have the opportunity each day to influence our success by
being out in the marketplace and talking about our approach to business banking. We
deliver a depth of understanding that other banks cannot. As I often explain to both
our officers and our customers, we are more than just a loan maker and deposit taker.
Because we understand the complexities of operating a business ourselves, we can
share our experiences, our advisors, and our resources with our business customers.
In this way, we can help these business owners deal with issues they may be facing or
opportunities they may be embarking upon. This is the “value added”
component that Cole Taylor delivers to our customers — and you just can’t get
that from the larger banks.” CEOCFOinterviews: Are there any final thoughts that you would like people to remember about Cole Taylor Bank? Mr. Taylor: “Our success as an organization is completely reflective of the success of each of our employees. We can only execute on the strategy because of the people that we have in our organization. Narrowing our focus two years ago to being Chicago’s business bank has allowed us to attract very good banking personnel, some of whom were put on the sidelines by some of the larger banks. They are talented people who were drawn to our business-focus strategy because they know this strategy works. It really is clarifying and energizing to be more focused. We are fortunate because what we want to do is very relevant and needed, as long as people want to pursue the American dream. We are doing business for entrepreneurs, whether they are first, second or third generation. We have a relevant niche in a marketplace that is expanding. For all of these reasons, I think our prospects are bright.” disclaimers |
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