Taylor Capital Mortgage Revenue Up 20% in 2Q13

Taylor Capital Group Inc., Chicago, reported its mortgage banking revenue increased 20% to $38.5 million in 2Q13 from $32 million in 1Q13. This included a quarter-to-quarter increase of $2.9 million in mortgage origination revenue and $3.6 million in mortgage servicing revenue. Revenue from Cole Taylor Mortgage in 2Q12 was $23 million.

President and chief executive Mark Hoppe commented, “This accomplishment reflects the ability of our mortgage team to adapt to the significant interest rate volatility we saw this quarter. Our second-quarter results demonstrate the success of our diversified model and the significant opportunities for future growth. We are extremely fortunate to have the right team in place to implement our strategy and achieve continuing strong results."

Hoppe’s comments notwithstanding, Taylor Capital has agreed to be acquired by MB Financial, also of Chicago, in a deal valued at $680 million.

A slide presentation accompanying the press release said the “mortgage business provides an additional fee revenue source for MB Financial, even when modeled under highly conservative assumptions.”

Taylor Capital had net income of $15.6 million for the quarter, up from $14.2 million in 2Q12.

Mortgage servicing rights on Taylor Capital’s balance sheet totaled $145.7 million, a gain of $39.2 million. The gain includes $5.6 million of MSRs it purchased from Liberty Savings Bank FSB, Wilmington, Ohio. The loans its services have an unpaid principal balance of $12.7 billion, up from $8.5 billion at the start of this year.

It nearly doubled its origination volume when compared with 2Q12, to $1.87 billion from $914 million.