SURVeY ResULts | faLL 2013

About the Index
The Cole Taylor Business Owners Confidence Index is designed to gather feedback from Chicago area business leaders regarding their attitudes and perceptions of the economy, both nationally and within the local market. The semiannual survey was conducted online by Star Data Systems, Inc. from September 23, 2013 through October 11, 2013 and included 250 decision makers from midsized businesses in the Chicago area. Findings are significant to a 95% confidence level with a margin of error of +/-5%.

Local business leaders see U.S. and Chicago economic prospects brightening; offer perspectives on term limits and pension crisis
The fall 2013 Cole Taylor Business Owners Confidence Index survey reveals local middle-market business owners see economic conditions improving slightly. Nearly 44% reported higher sales volumes in the previous quarter and more than half of the business owners surveyed plan to expand their business in the next 12 months. Economic Assessment Business leaders are seeing signs of progress in the economic recovery, both locally and nationally, with 85% responding that the U.S. economy is in good or fair condition. Nearly 80% think the Chicago economy is in good or fair condition. The percentage of respondents who view the economy in poor condition is at its lowest level since the survey began in the spring of 2012. CURRENT STATE OF THE ECONOMY
40%

Sales and Expansion Plans Sales increased for many of the businesses surveyed, with 44% reporting higher sales volumes during the previous quarter. Only 16% reported lower sales volumes compared to 25% in the previous study. SALES VOLUMES - PREVIOUS QUARTER
50%
44 42

About Cole Taylor Bank
Cole Taylor Bank is a premier commercial bank headquartered in Chicago with assets of $6.0 billion as of September 30, 2013 and is a wholly-owned subsidiary of Taylor Capital Group., Inc. (NASDAQ: TAYC). For more than 80 years, Cole Taylor Bank has been successfully meeting the banking needs of closelyheld companies and the people who own and manage them by focusing on a relationship-based approach to business. Through its national businesses, Cole Taylor provides a full range of financial services, including asset based lending, commercial equipment financing, and residential mortgage lending.

Fall 2013 Spring 2013
40

U.S.
70% 60% 50% 40% 30% 20% 10% 0%
22 20 12 15 20 28 63

Chicago
70% 60% 50% 40% 30% 20% 10%
30 24 19 12 21 24 55 57 56

33

59 60

30%
25

20%
16

10%
Fair Poor

Good

Fair

Poor

0%

Good

Fall 2013

Spring 2013

Fall 2012

0%

Higher

Same

Lower

For questions, contact:
Erin A. Durkalski Director of Marketing 847-653-7535

Despite improving economic conditions, business leaders continue to criticize national and local economic policy. U.S. economic policy was rated poor by 58% of business leaders while the state of Illinois’ policies were rated poor by 85%.

Growing economic confidence and steady sales may be why more than half of business owners (56%) plan to expand their business in the next 12 months. In support of an improving local economy, more businesses expressed a desire to expand their business within Illinois, 61%, up from 47% in spring 2013.
(continued on the next page)

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SURVeY ResULts | faLL 2013 (continued from the previous page)

EXPANSION PLANS
70% 60% 50% 40% 30% 20%
14 61

ago, fewer respondents support casino gambling and reduced state employee staffing levels as solutions.
Fall 2013 Spring 2013

SOLUTIONS TO IL BUDGET DEFICIT
Reduce Public Worker Pension Benefits Reduce State Employee Staffing Levels Expand Casino and Other Gambling Reduce Health Care Funding Add a Tax on a Service Not Currently Taxed in IL
15 18 9 12 27 40 26 27 68 84 80 81

Fall 2013 Spring 2013
Multiple responses were allowed

47

46

46

10% 0%

7

Reduce Education Funding

Within IL Outside IL, within US Internationally

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Hiring and Finding Talent Nearly one quarter (24%) think filling job openings is harder than it was six months ago. Despite improved economic conditions and increased sales, the majority of business owners do not plan to increase staff in the next 3 months. Sixty-four percent of companies prefer to keep staffing levels flat. ANTICIPATED STAFFING - NEXT 3 MONTHS
70% 60% 50% 40% 30% 20% 10% 0%
9 11 6 29 30 64 65 59

Most business leaders (63%) are still undecided on the best candidate for Illinois Governor 2014, but Republican Bruce Rauner has the most support with 11%, followed by incumbent Democrat Pat Quinn (8%), and Republican Dan Rutherford (7%). Capital Expenditures Heading into 2014, businesses appear to be keeping a hold on capital expenses, as fewer owners plan to make major improvements or purchases in the next six months. CAPEX - NEXT 6 MONTHS
10 12 12 62

Fall 2013 Spring 2013 Fall 2012

Additional Buildings or Land

Fall 2013 Spring 2013 Fall 2012
68 70 28

Equipment/Technology

27

Furniture/Fixtures
16 18 21

32 30

Vehicles
Increase Same Decrease

30

None

23 22

When asked about leadership skills, as the economy continues to evolve and change, respondents cited critical thinking as the most important skill the next generation of leaders will need to drive their company’s success. Creativity and communication were a distant second and third. Political Landscape - Term Limits and Financial Woes Looking at politics on the local level, an overwhelming majority (82%) support amending the Illinois Constitution to impose term limits for elected officials. Leaders also continue to support reducing public worker pension benefits as the best solution to fixing the State’s budget deficit (80%). Compared to one year

0%

10% 20% 30% 40% 50% 60% 70% 80%

Businesses for Sale When asked about prospects for their business, 1 in 5 (19%) said they considered selling their business in the last six months. Forty percent of those who considered selling said they did so because they either received an offer to sell or the value of their business had risen. Another 40% said they considered selling due to retirement or lack of succession.

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