Mortgages Boosted Taylor Capital in 4Q

Revenue from mortgage banking boosted profits at Taylor Capital Group (TAYC) in the fourth quarter.

The $5.8 billion-asset, Chicago company said Thursday that its earnings climbed more than 31% from three months earlier, to $19.7 million. Its earnings per share of 65 cents were 12 cents a share above the average analysts' estimate, according to Bloomberg.

Profits fell 72% year over year, but that was due only to one-time tax benefit it booked in the fourth quarter of 2011 that skewed earnings.

Excluding the impact of the 2011 tax gain, net interest income rose 16.4% from a year earlier, to $41 million, and its net interest margin increased two basis points from the fourth quarter of 2011, to 3.23%.

Noninterest income rose 213% from a year earlier, to $52 million, because of revenue from mortgage banking. Noninterest expense rose 73%, to $55.2 million, due to higher personnel costs. The company's efficiency ratio improved to 60.76% in the fourth quarter from 61.26% a year earlier.

Taylor Capital booked $3 billion in loans in the fourth quarter, an increase of 3.4% year over year. The company's allowance for loan losses fell 21.1% from a year earlier, to $82 million.

"Our results for 2012 have reinforced the value of our dual strategy of focusing on the fundamentals while continuing to diversify our revenue sources," Mark Hoppe, Taylor Capital's chief executive, said in a press release.

Taylor Capital's shares were up 3.5% in early trading Thursday, to $18.25.