In an effort to expand its niche in the land trust business, Cole Taylor Bank has acquired about 1,000 new accounts from Glenview State Bank for an undisclosed price.
The subsidiary of $1.7 billion-asset Cole Taylor Financial Group, Wheeling, Ill., has nearly 10,000 land trust accounts under management.
"We find that it's a very attractive business to us, and we're trying to gain a larger position in the marketplace," said Richard S. White Jr., executive vice president of the trust and investment sales division. "We, like so many other financial institutions, are trying to find those specialty areas where we can stand out and shine."
In a land trust account, property titles are placed in the bank's name as trustee. As one of the top five land trustees in the area, Cole Taylor increases fee income and strengthens its trust department by amassing the accounts, the company said.
Mr. White declined to disclose the dollar value of the land trusts or related fee income.
Cole Taylor Financial reported total trust fees of $2.9 million for 1993, which included about $150,000 related to its acquisition of about 3,600 land trust accounts from Harris Trust and Savings Bank.
That 1993 purchase initiated Cole Taylor's serious focus on the niche.
Once staff and systems are in place, a company can add substantial volume without additional overhead, said Robert C. Ollech, an analyst at Howe Barnes Investments Inc., Chicago. "Anytime you can add incremental fee income, that's good," he said.
Land trusts originated in Illinois around the turn of the century and currently are used in about six other states, Mr. White said.
People use land trusts to avoid probate expenses and delays, to insulate property from liens and judgments, and to ease multiple ownership management because the legal title is held by the trust, said Martin S. Edwards, a Cole Taylor vice president and manager of real estate trust services.
Land trusts could be risky to administer without proper expertise because of potential problems like environmental liability and litigation, Mr. Edwards said.
"Either people are going to specialize in it and put resources in it or get out," Mr. White said.
Eight Cole Taylor employees focus on the business, although some overlap into the company's related tax-deferred exchange business.
