Taylor Capital Continues Search for Growth Beyond Chicago

Taylor Capital Group in Chicago is expanding into Wisconsin where it hopes to make loans with a little less competition.

The $4.7 billion-asset company said on Monday that it had opened a commercial loan production office in Franklin, Wis., which is about 90 miles north of Chicago. The relatively natural move became even more logical after Taylor hired Russ Weyers, the former president and chief executive of Johnson Bank in Racine, Wis. Weyers is also a past chairman of the Wisconsin Bankers Association and a former board member of the Federal Home Loan Bank of Chicago.  

"We had been looking to enter the market for some time and Russ was an acquaintance of one of our senior lenders," says Mark Hoppe, Taylor's president and CEO. Weyers "is a high-powered guy and we expect to have some real growth up there."

Hoppe says he doesn't have a particular amount he is expecting the Wisconsin office to produce in loans over the next few years, though he expects the office to have a major presence. It will focus on commercial and industrial lending to companies with annual revenue of $5 million to $100 million, the same sweet spot that Taylor has in Chicago.

"In the next three to five years, I'd expect us to be in a situation where we are a respected financial institution in the market that gets a look at any meaningful financing opportunity," Hoppe says.

Loan production offices are often a test run for banks before they commit to opening full-service branches, but Hoppe says that is not necessarily the plan. "Anything is possible, but we need to walk before we run," he says. "If we never open up an office with deposit capabilities in Wisconsin, but are still able to service the customers very well, I'll be perfectly happy."

Taylor's Cole Taylor Business Capital also has an office in Wisconsin.

Analysts says the move north is part of a larger trend by Taylor to augment the stiff competition it faces for C&I loans in Chicago with other lines of business across the country. The company has done well with its mortgage business, which it launched in 2010, and last week it announced the creation of a national equipment finance division.

"They have been more willing to do things outside of their market than others. They are certainly looking for ways to deploy capital in what they would deem as a less competitive market," says Brad Milsaps, an analyst at Sandler O'Neill. "Everything is competitive, but maybe not as competitive as Chicago."