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                                                                    EXHIBIT 10.3

                      SECURITY AGREEMENT AND ASSIGNMENT OF
                   EUROPEAN AMERICAN BANK SAFEKEEPING ACCOUNT


To:     
LaSalle National Bank Chicago, Illinois 60674

Ladies and Gentlemen:

The undersigned hereby expressly assigns, grants, transfers and pledges to
LASALLE NATIONAL BANK (the "Bank"), as security for the payment to the Bank of
all of its obligations to the Bank, howsoever created, arising or evidenced,
whether direct or indirect, joint, several or joint and several, absolute or
contingent, now or hereafter existing, or due or to become due under that
certain Loan Agreement (as amended, the "Agreement"), dated as of February 12,
1997, between the undersigned and the Bank (the "Obligations"), a security
interest in the 1,500,000 shares of common stock of Cole Taylor Bank (the
"Pledged Shares") deposited in a safekeeping account (the "Account") with
EUROPEAN AMERICAN BANK (the "Custodian") pursuant to that certain Third Party
Safekeeping Agreement dated as of December 29, 1997 (as amended, the
"Safekeeping Agreement") among the undersigned, the Bank and the Custodian,
together with all substitutions or replacements of the Pledged Shares, as well
as all additions to, and income, interest and dividends on the Pledged Shares
and also including all stock received by the Custodian as the result of any
stock splits and stock dividends declared on the Pledged Shares (collectively,
the "Collateral"). The undersigned represents and warrants to the Bank that it
is the owner of the Collateral and has full power and authority to enter into
this Agreement and no other consents of any other persons are required to be
obtained in connection with the execution and delivery of this Agreement, and
that the Collateral is subject to no existing security agreement or lien.

It is agreed that the Collateral may be held, dealt with, and disposed of by the
Bank, in accordance with the terms, conditions and powers contained in the
instrument or instruments evidencing said Obligations as if the Collateral were
specifically described therein and stated to be collateral therefore, and that
this Agreement shall in no way be construed as limiting or modifying in any
respect the terms of the instrument or instruments evidencing such Obligations.

It is further agreed that, as long as any such Obligations shall remain unpaid
(i) the Custodian shall hold possession of the Collateral, as security for the
payment of all such Obligations and the undersigned will be unable to transfer,
withdraw, or assign any of the Collateral, or any interest therein, or take any
other action with respect thereto without the Bank's prior written consent; (ii)
the Custodian shall deliver all or any part of the Collateral, or the proceeds
from the sale thereof, to the Bank on the Banks request therefor in whatever
form the Bank requests, and without any further agreement or consent from the
undersigned; (iii) the Bank's receipt to the Custodian of such Collateral so
delivered by the Custodian shall be a full and complete receipt and acquittance
to the Custodian, as fiduciary under the Account; and (iv) the agreement and
instructions governing the Account are hereby modified to effectuate all the
provisions hereof.



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If at any time hereafter, the undersigned receives or is entitled to receive
into its possession any payments, checks, instruments, chattel paper, dividends
on account, or in respect, of the Collateral, or any proceeds thereof, such
additional property shall also be deemed Collateral and the undersigned shall
accept such property as the Bank's agent, in trust for the Bank without
commingling such Collateral with any other property of the undersigned and
shall, upon receipt, promptly deliver such Collateral to the Custodian for the
benefit of the Bank in the exact form so received, with any necessary
endorsements or stock powers executed by the undersigned in blank; provided,
however, that Borrower shall be entitled to receive and retain all cash
dividends issued prior to the occurrence of an Event of Default (an "Event of
Default" as defined in the Agreement).

Until the occurrence of an Event of Default, the Borrower may direct the
Custodian in writing to vote, give consents, waivers or ratifications in respect
of its ownership of the Collateral. Upon the occurrence of an Event of Default,
the Bank may direct the Custodian in writing to sell, assign, or otherwise
dispose (collectively, a "Disposition") of the Collateral in exchange for cash
or credit subject to the terms hereof and of the Safekeeping Agreement. The
Custodian shall effect any Disposition of Collateral in accordance with the
terms of the Safekeeping Agreement.

The undersigned hereby appoints the Bank as its proxy and attorney-in-fact;
provided, that the Bank shall not be entitled to exercise any rights as proxy
and attorney-in-fact unless an Event of Default has occurred and is continuing.
As proxy and attorney-in-fact and subject to the terms hereof and of the
Safekeeping Agreement, the Bank is authorized to take any action regarding the
Collateral deemed necessary by the Bank to protect the security interest of the
Bank in the Collateral. The undersigned and the Bank acknowledge that the
constitution and appointment of such proxy and attorney-in-fact are coupled with
an interest and are irrevocable.

The undersigned agrees to take all actions reasonably deemed necessary by the
Bank, and, after the occurrence and during the continuance of an Event of
Default, authorizes the Bank to take all such actions in its place and stead, to
establish and maintain a valid, perfected first priority security interest in
the Collateral in favor of the Bank to secure the payment of the Obligations and
to indemnity and reimburse the Bank for all cost and expenses incurred by the
Bank in connection therewith.

 The undersigned further agrees to defend the Collateral against any and all
claims of any person or party whose claims are adverse to the claims, rights or
interest of the Bank and the undersigned shall indemnify and hold the Bank
harmless from and against any and all such adverse claims. The undersigned
agrees that it shall bear all risk of loss, damage and diminution in value with
respect to the Collateral, and that the Bank shall have no liability or
obligation to the undersigned with respect to monitoring the value o the
property or for ascertaining any maturities, call, conversions, exchanges,
offers, tenders or similar matters relating to any of the Collateral or for
informing the undersigned with respect to any of such matters (irrespective of
whether the Bank actually has, or may be deemed to have, knowledge thereof). The
Bank shall not be liable for its failure to give notice to the undersigned of a
default under any agreement or document evidencing any of the Obligations,
unless specifically provided for therein, nor shall 


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the Bank be liable for its failure to use due diligence to collect any amount
payable in respect to the Collateral, but shall be liable only to account to the
undersigned for what the Bank may actually collect and receive thereon. The
foregoing provisions of this paragraph shall be fully applicable to all
securities or similar property held in pledge hereunder, irrespective of whether
the Bank may have exercised any right to have such securities or similar
property registered in its name or in the name of a nominee, and the Bank is
hereby released from any liability resulting from any of the foregoing.

This Agreement and the rights and obligations of the parties hereunder shall be
contested and interpreted in accordance with the laws of the State of Illinois
applicable to agreements made and to be wholly performed in such state.

The Bank is hereby authorized to deliver a copy of this Agreement to the
Custodian, and such delivery shall constitute the undersigned's direction to the
Bank to effectuate the provisions of this Agreement.




Dated as of September 1, 1998



TAYLOR CAPITAL GROUP, INC.


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