Taylor Capital Group Inc. in Chicago is looking to add up to $72 million in common equity that it says would strengthen its capital position and give it the flexibility to pursue growth opportunities.
The $4.5 billion-asset company announced late Wednesday that it has commenced a $35 million rights offering. Shareholders as of Nov. 21 have the right to buy 0.1671 shares of common stock at $7.91 for every share owned. Shareholders can exercise those rights until Dec. 14.
The company also announced that it will hold a special shareholder meeting on Dec. 27 where investors will be asked to consider a plan to convert $37 million of preferred stock into common stock. The preferred shares are largely owned by members of the Taylor family, including Chairman Bruce Taylor; board members Harrison Steans and Jennifer Steans; and two funds controlled by Prairie Capital LP, a Chicago-based private-equity firm.
The company said in a press release it wants to convert the preferred shares by year-end.
Taylor first announced its intention to pursue rights offering and preferred-stock conversion late October. At Sept. 30, the company had a tangible common equity ratio of 3.3%, well below the industry comfort zone of 6% to 7%.
Daniel Cardenas, an analyst at Raymond James & Associates, said in an interview that if completed, the rights offering and conversion would be incremental steps in the right direction.
"They have a good history of bringing in the capital they need right when they need it, so this will help them out," Cardenas said. "But they still will need additional capital if they want to continue to grow the asset-based lending and mortgage banking businesses."