Harrison Steans with daughter Jennifer Steans in September 2008. (Phil Velazquez/Chicago Tribune)

By Becky Yerak | Chicago banker Harrison Steans, who in September 2008 led a group that invested $120
million in Rosemont-based Taylor Capital Group Inc., said he’s leading a
new $60 million capital raise along with other existing managers and
investors.

The parent of Cole Taylor Bank, which late Monday announced that it
plans to boost its capital by $60 million during the second quarter “to
better align its capital position to its peers and to support the
company’s and the bank’s future growth plans,” also said it’s talking to
institutional investors and wealthy individuals.

The private placement will consist of $30 million of a new series of convertible preferred stock and $30 million of subordinated notes.

“We’re going to lead it,” Steans said Tuesday morning. “We’re going to be doing as much as we did the last time as a family and include some management. It’s substantially spoken for already, but we’ll be talking to a few institutional sources.”

In September 2008, an investor group led by the Steans family invested $120 million in the bank. Harrison Steans has been a Taylor Capital director and chairman of the executive committee since then.

“We remain enthused but we wish there was a better economic environment” for the housing market and commercial real estate, he said.

Steans is a former LaSalle Bank chairman who later ran a banking company that was folded into JPMorgan Chase & Co.

Separately, Taylor Chairman Bruce Taylor said he has agreed to have his base salary cut by 20 percent, according to a November 2009 letter filed Monday with the Securities and Exchange Commission.

“As you know, we have engaged in aggressive cost-cutting efforts at all levels of our organization in response to the continuing challenging economic conditions,” he said in the letter. “These initiatives have led to significant savings and thereby enhanced our ability to preserve capital and execute on our growth strategy.”

He said he has agreed in a cut in base salary from $525,200 to $420,000 and to forego his auto allowance and reimbursements for country club expenditures, except for expenses directly associated with customer events.

“I am requesting that you re-evaluate these voluntary reductions of compensation each fiscal quarter after Taylor Capital Group achieves a positive net income available to common shareholders,” he said in a letter.

Meanwhile, Chief Executive Mark Hoppe said he is foregoing his auto allowance and reimbursements for country club expenditures.

Taylor announced the capital raise after the market closed on Monday. As of mid-Tuesday morning, its stock was trading at $12.43 a share, down 0.5 percent, but near the high end of a 52-week trading range of $2.64 to $12.76.

The terms of both offerings will be announced when they’re finalized.

It also plans to begin an offering to issue up to 1.2 million additional shares of the company’s common stock to encourage holders of the existing $60 million of series A preferred stock to voluntarily convert their preferred stock into shares of the company’s common stock.

To read a copy of the press release, click here.

For previous coverage of Cole Taylor Bank from the Tribune archives, click here.