CIHICAGO - Cole Taylor Bank continued its drive to boost fee income by purchasing the land trust business of Harris Trust and Savings Bank last week.
Cole Taylor will acquire 3,600 land trust accounts from the downtown subsidiary of Harris Bankcorp, whose parent is Bank of Montreal. Terms of the deal were not disclosed.
The acquisition will make Cole Taylor one of the top five land trustees in the Chicago area, the company said. The Wheeling, Ill.-based bank currently manages 5,400 land trust accounts.
Noninterest Income Soars
"The steady fee income generated by trusts is very important to the financial growth of the bank," said Mark Neil, group executive of trust services.
Total noninterest income at Cole Taylor Financial Group rose by more than 50%, from $5.2 million in the first half of 1992, to $8.5 million at March 31, 1993, according to company reports.
Though much of the bank's gain in noninterest income came from a legal settlement, the bank expects fee income to increase by 30% this year
Land trusts allow estate holders to more easily transfer title ownership, and to avoid costly inheritance and other taxes, said Mr. Neil.
Cole Taylor also pushes annuities, brokerage services, and personal trust services at its nine offices in the Chicago area.
The privately owned bank. with $ 1.4 billion of assets. posted earnings of $4.7 million in the first half of the year, or a 0.67% return on average assets.
The deal, which is expected to close by November, will give Cole Taylor more than 9,000 land trust accounts, from which it generates fee income.
Separately, the bank announced that it had made the first mortgage loan through a branch it opened in an inner-city neighborhood on the South Side of Chicago.
Through the Woodlawn Affordable Mortgage Program, the bank made a 30-year adjustable 7.25% loan with a 5% down payment, and no closing costs or application fees.
The program is offered jointly with the Illinois Treasurer's Office, and is designed to qualify lower-income borrowers with their first home purchase.