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5 Chicago Banks: How Our Picks Fared

Stocks in this article: JPM PVTB FMBI MBFI WTFC TAYC

Taylor Capital Group

Shares of Taylor Capital Group (TAYC) of Rosemont, Ill., closed at $9.45 Wednesday, down 28% year-to-date.

The company owes $104.8 million in federal bailout funds received in November 2008, through the Troubled Assets Relief Program, or TARP.

On Dec. 19, the company announced the successful completion of a rights offering, raising $35 million in common equity, with rights holders paying $7.91 a share.

After the company's announcement, KBW analyst Christopher McGratty reiterated his "Underperform" rating for Taylor Capital, with a price target of $6.50, saying that although he viewed the rights offering "favorably as it was fully subscribed and improves the company's capital position," he continued to believe that another capital raise was possible for the company, "to bring its ratios more in-line with peers and to support future growth opportunities."

FIG Partners analyst Brian Martin has the opposite view of Taylor Capital, reiterating his "Outperform" rating on the shares, with a $10 price target, in late October, after the rights offering had been announced, and after the company reported third-quarter net income available to common shareholders of $7.3 million, or 35 cents a share.

Looking ahead Martin said he expected "sustained profitability for the foreseeable future as TAYC is fundamentally stronger on all fronts than a year ago. The analyst estimates that Taylor Capital will earn $2.87 a share in 2012, driven by a deferred tax allowance valuation recovery of roughly $79 million, or $2.65 a share. Martin expects the company to eventually achieve "normalized" annual earnings of a dollar a share.

The shares trade for 1.3 times their Sept. 30 tangible book value of $7.37, and for six times the consensus 2012 earnings estimate of $1.58 a share, among analysts polled by FactSet.

The three analysts covering Taylor Capital Group are evenly split between buy, hold and sell ratings.

Interested in more on Taylor Capital Group? See TheStreet Ratings' report card for this stock.

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