When Taylor Capital Group Inc. announced a management shuffle last month, it appeared to be demoting its longtime chairman and chief executive, Jeffrey W. Taylor.
But the new chairman and CEO, Bruce W. Taylor - Jeffrey's brother - said the Rosemont, Ill., company made the change to play to his brother's strengths.
As Taylor Capital's executive managing director of market development and new ventures, Jeffrey Taylor is now in charge of drumming up new business in the fiercely competitive Chicago banking market.
The $3.4 billion-asset company targets privately held companies with annual revenue of $5 million to $100 million, and Bruce Taylor, 51, said last week that courting such clients is the best use of Jeffrey Taylor's talents.
"It is important that we all spend a lot of time in the market expanding existing relationships as well as growing new ones," Bruce Taylor said. The new management structure "plays to Jeff's external focus and entrepreneurial nature."
The company said that Jeffrey Taylor has been on vacation and was not available for comment. But Kevin K. Reevey, an analyst with BankAtlantic Bancorp Inc.'s Ryan Beck & Co. Inc., agreed that the management shake-up makes sense.
"Jeff likes to be the rainmaker," he said. "I spent time with him on marketing trips. He likes to schmooze. My assumption is he would prefer to do that than be responsible for the day-to-day tactical aspects of the job."
At the same time, Mr. Reevey said that Bruce Taylor is well suited to his new role. "Bruce's strengths appear to be of a tactical bent rather than on the client relationship side of things."
Taylor Capital has been feeling the competitive pressure of late. Though its third-quarter earnings rose 155% from a year earlier, to $18.9 million, much of that rise resulted from tax set-asides that the company did not need to use to pay taxes. In three of the last four quarters its earnings have dropped from a year earlier.
Still, analysts were happy to see that the third-quarter core earnings had risen 11 cents from the second quarter, to 68 cents a share. Many took that increase as a sign that the company's performance was looking up.
With the commercial real estate market softening, Taylor Capital has been working to diversify its commercial business beyond real estate to include more commercial and industrial loans; in June it hired seven commercial lenders away from four of its competitors. It also is trying to sell more fee-based services, such as cash management, to small companies in the Chicago area, including its current customers.
Both of the Taylor brothers have been with Taylor Capital's Cole Taylor Bank since 1978. Jeffrey became the bank's CEO in 1991. He was the CEO of what was then Cole Taylor Financial Group when it went public in 1994, and in 1997 led a group of family members, friends, and employees in a buyout of the company, which led to the creation of Taylor Capital Group. That company went public in 2002.
Analysts said that putting a top executive who shares his name with the company in front of potential clients could give Taylor Capital a bit of an advantage over its competitors.
"Their important large commercial clients get to see and spend more time with the top dog, so to speak, which is not going to happen at a lot of their competitors, especially their large competitors," Mr. Reevey said.
Brian Martin, an analyst with Howe Barnes Hoefer & Arnett Inc. in Chicago, said the market "is ultracompetitive, and anything you can do to separate yourself from your peers is going to win you business."
