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(NASDAQ:OSBC) | Exhibit 99.1 | |
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Contact: | J. Douglas Cheatham | For Immediate Release |
| Chief Financial Officer | January 20, 2016 |
| (630) 906-5484 |
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Old Second Reports Fourth Quarter 2015 Net Income of $3.8 million
AURORA, IL, January 20, 2016 – Old Second Bancorp, Inc. (the “Company” or “Old Second”) (NASDAQ: OSBC), parent company of Old Second National Bank (the “Bank”), today announced financial results for the fourth quarter of 2015 and the year ended December 31, 2015. The Company reported net income of $3.8 million for the fourth quarter of 2015, compared to net income of $3.0 million in the fourth quarter of 2014 and $3.9 million in the third quarter of 2015. The Company’s net income available to common stockholders of $3.8 million, or $0.13 per diluted share for the fourth quarter of 2015, compared to $1.9 million, or $0.06 per diluted share, in the fourth quarter of 2014. 2014 per share information reflects dividends on the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the “Series B Stock”). In 2015 the Company completed redemption of all remaining Series B Stock. The full year 2015 net income available to common stockholders of $13.5 million or $0.46 per diluted share compared to $11.9 million or $0.46 per diluted share in 2014.
Operating Results
· | Fourth quarter 2015 net income before taxes increased by $1.3 million, or 27.2%, from the fourth quarter of 2014 but decreased approximately 4.0% from the third quarter of 2015. When compared to the fourth quarter of 2014, the quarter reflects slightly reduced net interest income, improved residential mortgage banking income, meaningfully lower compensation costs and other real estate owned (“OREO”) valuation expense, and no loan loss reserve release. The net income before tax decrease from the third quarter of 2015 reflects improved residential mortgage banking operating revenue and reduced OREO valuation expense, with these improvements offset by no loan loss reserve release recorded in the fourth quarter. Third quarter 2015 noninterest income does include a $1.1 million writedown on the now closed branch in Batavia, Illinois. Fourth quarter 2015 net income available to common stockholders of $3.8 million compares to $3.6 million for the third quarter of 2015 where the third quarter reflects $339,000 of dividends paid in the quarter on the now fully redeemed Series B stock. |
· | Noninterest expense of $16.1 million for the fourth quarter of 2015 was 14.2% lower than the results in the fourth quarter of 2014. OREO expense, net for the fourth quarter of 2015 declined 79.0% from the fourth quarter of 2014. |
Capital Ratios
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| December 31, |
| September 30, |
| June 30, |
| March 31, | ||||
| 2015 |
| 2015 |
| 2015 |
| 2015 | ||||
The Bank's common equity tier 1 capital ratio | 14.10 | % |
| 15.94 | % |
| 17.49 | % |
| 16.88 | % |
The Company's common equity tier 1 capital ratio | 10.55 | % |
| 10.26 | % |
| 9.82 | % |
| 9.44 | % |
The Bank's total capital ratio | 15.23 | % |
| 17.10 | % |
| 18.75 | % |
| 18.14 | % |
The Company's total capital ratio | 15.56 | % |
| 15.36 | % |
| 17.10 | % |
| 17.28 | % |
The Company's tier 1 leverage capital ratio | 8.69 | % |
| 8.46 | % |
| 10.02 | % |
| 9.82 | % |
1
· | The Bank ratios shown above exceed levels required to be considered “well capitalized”. Ratios for December 31, 2015 are estimated. Bank ratios for December 31, 2015 reflect a $30 million dividend paid to the Company in December, 2015. |
Asset Quality & Earning Assets
· | Nonperforming loans declined to $14.6 million at December 31, 2015, from $18.5 million at September 30, 2015, as nonaccrual loans were reduced. |
· | OREO assets decreased in the fourth quarter to end at $19.1 million on December 31, 2015, compared to $24.5 million at September 30, 2015. Valuation writedowns continued in the fourth quarter at a markedly lower level with a quarterly expense of $251,000 compared to $1.1 million in third quarter. |
· | Loans decreased from year end 2014 and are essentially unchanged compared to September 30, 2015. Fourth quarter 2015 average loans (including loans held-for-sale) decreased by $4.1 million from the third quarter of 2015 and by $5.1 million compared to the fourth quarter of 2014. |
· | Securities held-to-maturity at amortized cost total $247.7 million at December 31, 2015. This total compares to $250.0 million at September 30, 2015, and $259.7 million at December 31, 2014. December 31, 2015, available-for-sale securities at fair value totaled $456.1 million, which is an increase from $408.8 million at September 30, 2015, and $385.5 million at December 31, 2014. |
Management review of the loan portfolio concluded that neither a loan loss reserve release nor a loan loss provision was appropriate in the fourth quarter.
2
Net Interest Income1
ANALYSIS OF AVERAGE BALANCES,
TAX EQUIVALENT INTEREST AND RATES
(In thousands - unaudited)
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| Quarters Ended | ||||||||||||||||||||||
| December 31, 2015 |
| September 30, 2015 |
| December 31, 2014 | ||||||||||||||||||
| Average |
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| Rate |
| Average |
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| Rate |
| Average |
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| Rate | |||
| Balance |
| Interest |
| % |
| Balance |
| Interest |
| % |
| Balance |
| Interest |
| % | ||||||
Assets |
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Interest bearing deposits with financial institutions | $ | 13,859 |
| $ | 12 |
| 0.34 |
| $ | 18,563 |
| $ | 12 |
| 0.25 |
| $ | 19,643 |
| $ | 13 |
| 0.26 |
Securities: |
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Taxable |
| 674,690 |
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| 3,819 |
| 2.26 |
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| 642,413 |
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| 3,471 |
| 2.16 |
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| 619,307 |
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| 3,691 |
| 2.38 |
Non-taxable (TE) |
| 17,090 |
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| 179 |
| 4.19 |
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| 19,318 |
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| 187 |
| 3.87 |
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| 11,412 |
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| 148 |
| 5.19 |
Total securities |
| 691,780 |
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| 3,998 |
| 2.31 |
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| 661,731 |
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| 3,658 |
| 2.21 |
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| 630,719 |
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| 3,839 |
| 2.43 |
Dividends from Reserve Bank and FHLBC stock |
| 8,451 |
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| 76 |
| 3.60 |
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| 8,271 |
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| 76 |
| 3.68 |
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| 9,058 |
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| 77 |
| 3.40 |
Loans and loans held-for-sale1 |
| 1,140,308 |
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| 13,057 |
| 4.48 |
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| 1,144,413 |
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| 13,415 |
| 4.59 |
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| 1,145,362 |
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| 13,649 |
| 4.66 |
Total interest earning assets |
| 1,854,398 |
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| 17,143 |
| 3.64 |
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| 1,832,978 |
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| 17,161 |
| 3.68 |
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| 1,804,782 |
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| 17,578 |
| 3.83 |
Cash and due from banks |
| 28,781 |
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| - |
| - |
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| 28,999 |
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| - |
| - |
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| 31,314 |
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| - |
| - |
Allowance for loan losses |
| (16,598) |
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| - |
| - |
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| (18,607) |
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| - |
| - |
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| (23,231) |
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| - |
| - |
Other noninterest bearing assets |
| 202,855 |
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| - |
| - |
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| 211,646 |
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| - |
| - |
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| 227,729 |
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| - |
| - |
Total assets | $ | 2,069,436 |
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| $ | 2,055,016 |
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| $ | 2,040,594 |
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Liabilities and Stockholders' Equity |
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NOW accounts | $ | 360,786 |
| $ | 79 |
| 0.09 |
| $ | 347,754 |
| $ | 76 |
| 0.09 |
| $ | 321,662 |
| $ | 69 |
| 0.09 |
Money market accounts |
| 284,209 |
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| 70 |
| 0.10 |
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| 291,663 |
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| 71 |
| 0.10 |
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| 298,134 |
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| 70 |
| 0.09 |
Savings accounts |
| 248,952 |
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| 38 |
| 0.06 |
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| 250,031 |
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| 38 |
| 0.06 |
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| 237,870 |
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| 37 |
| 0.06 |
Time deposits |
| 409,353 |
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| 824 |
| 0.80 |
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| 404,896 |
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| 799 |
| 0.78 |
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| 421,584 |
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| 896 |
| 0.84 |
Interest bearing deposits |
| 1,303,300 |
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| 1,011 |
| 0.31 |
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| 1,294,344 |
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| 984 |
| 0.30 |
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| 1,279,250 |
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| 1,072 |
| 0.33 |
Securities sold under repurchase agreements |
| 26,569 |
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| 1 |
| 0.01 |
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| 31,466 |
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| 1 |
| 0.01 |
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| 27,298 |
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| 1 |
| 0.01 |
Other short-term borrowings |
| 24,837 |
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| 10 |
| 0.16 |
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| 14,674 |
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| 5 |
| 0.13 |
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| 24,946 |
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| 8 |
| 0.13 |
Junior subordinated debentures |
| 58,378 |
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| 1,072 |
| 7.35 |
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| 58,378 |
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| 1,072 |
| 7.35 |
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| 58,378 |
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| 1,072 |
| 7.35 |
Subordinated debt |
| 45,000 |
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| 210 |
| 1.83 |
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| 45,000 |
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| 205 |
| 1.78 |
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| 45,000 |
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| 199 |
| 1.73 |
Notes payable and other borrowings |
| 500 |
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| 2 |
| 1.57 |
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| 500 |
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| 1 |
| 0.78 |
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| 500 |
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| 4 |
| 3.13 |
Total interest bearing liabilities |
| 1,458,584 |
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| 2,306 |
| 0.63 |
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| 1,444,362 |
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| 2,268 |
| 0.62 |
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| 1,435,372 |
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| 2,356 |
| 0.65 |
Noninterest bearing deposits |
| 445,083 |
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| - |
| - |
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| 431,052 |
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| - |
| - |
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| 400,001 |
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| - |
| - |
Other liabilities |
| 10,488 |
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| - |
| - |
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| 9,782 |
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| - |
| - |
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| 12,177 |
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| - |
| - |
Stockholders' equity |
| 155,281 |
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| - |
| - |
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| 169,820 |
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| - |
| - |
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| 193,044 |
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| - |
| - |
Total liabilities and stockholders' equity | $ | 2,069,436 |
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| $ | 2,055,016 |
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| $ | 2,040,594 |
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Net interest income (TE) |
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| $ | 14,837 |
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| $ | 14,893 |
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| $ | 15,222 |
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Net interest income (TE) |
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to total earning assets |
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| 3.17 |
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| 3.22 |
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| 3.35 |
Interest bearing liabilities to earning assets |
| 78.66 | % |
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| 78.80 | % |
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| 79.53 | % |
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1 Interest income from loans is shown on a tax equivalent basis as discussed in the table on page 12 and includes fees of $430,000, $459,000 and $572,000 for the fourth quarter of 2015, the third quarter of 2015 and the fourth quarter of 2014, respectively. Nonaccrual loans are included in the above stated average balances.
Note: Tax equivalent basis is calculated using a marginal tax rate of 35%.
Net interest and dividend income on a linked quarter basis decreased $54,000. Quarterly average earning assets increased $21.4 million from the third quarter of 2015 for a total of $1.85 billion, while yield on earning assets declined slightly. Year over year fourth quarter average loans, including loans held-for-sale, decreased.
3
Noninterest Income
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| 4th Qtr 2015 |
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| Three Months Ended |
| Percent Change From |
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(in thousands) |
| 4th Qtr |
| 3rd Qtr |
| 4th Qtr |
| 3rd Qtr |
| 4th Qtr |
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| 2015 |
| 2015 |
| 2014 |
| 2015 |
| 2014 |
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Trust income |
| $ | 1,427 |
| $ | 1,444 |
| $ | 1,579 |
| (1.2) |
| (9.6) |
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Service charges on deposits |
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| 1,734 |
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| 1,766 |
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| 1,725 |
| (1.8) |
| 0.5 |
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Residential mortgage banking revenue |
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| 1,759 |
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| 1,275 |
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| 1,100 |
| 38.0 |
| 59.9 |
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Securities (loss) gains, net |
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| - |
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| (57) |
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| 262 |
| 100.0 |
| (100.0) |
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Increase in cash surrender value of bank-owned life insurance |
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| 381 |
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| 203 |
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| 369 |
| 87.7 |
| 3.3 |
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Debit card interchange income |
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| 1,015 |
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| 1,004 |
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| 1,035 |
| 1.1 |
| (1.9) |
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Loss on disposal and transfer of fixed assets |
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| 24 |
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| (1,143) |
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| - |
| N/A |
| N/A |
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Other income |
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| 1,069 |
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| 1,156 |
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| 1,021 |
| (7.5) |
| 4.7 |
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Total noninterest income |
| $ | 7,409 |
| $ | 5,648 |
| $ | 7,091 |
| 31.2 |
| 4.5 |
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Among operating noninterest income categories, residential mortgage banking income shows a solid linked quarter and year over year improvement. The Company continued to experience good mortgage loan origination results in the quarter by operating effectively in a favorable market environment. Also, valuation adjustments improved compared to third quarter results. Cash surrender value of bank-owned life insurance returned to historical levels after third quarter market declines in investment value. Total noninterest income for the third quarter of 2015 is impacted by the impairment charge related to the closing of a Bank branch in Batavia, Illinois. Year over year quarterly total noninterest income is modestly improved with stronger residential mortgage banking income being largely offset by lower trust income and deposit service charges.
Noninterest Expense
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| 4th Qtr 2015 |
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| Three Months Ended |
| Percent Change From |
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(in thousands) |
| 4th Qtr |
| 3rd Qtr |
| 4th Qtr |
| 3rd Qtr |
| 4th Qtr |
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| 2015 |
| 2015 |
| 2014 |
| 2015 |
| 2014 |
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Salaries |
| $ | 6,881 |
| $ | 6,843 |
| $ | 7,299 |
| 0.6 |
| (5.7) |
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Bonus |
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| 211 |
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| 238 |
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| 180 |
| (11.3) |
| 17.2 |
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Benefits and other |
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| 1,305 |
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| 1,179 |
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| 1,548 |
| 10.7 |
| (15.7) |
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Total salaries and employee benefits |
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| 8,397 |
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| 8,260 |
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| 9,027 |
| 1.7 |
| (7.0) |
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Occupancy expense, net |
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| 1,228 |
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| 1,156 |
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| 1,154 |
| 6.2 |
| 6.4 |
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Furniture and equipment expense |
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| 1,254 |
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| 1,110 |
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| 1,016 |
| 13.0 |
| 23.4 |
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FDIC insurance |
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| 311 |
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| 373 |
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| 615 |
| (16.6) |
| (49.4) |
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General bank insurance |
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| 298 |
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| 308 |
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| 358 |
| (3.2) |
| (16.8) |
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Advertising expense |
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| 348 |
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| 434 |
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| 225 |
| (19.8) |
| 54.7 |
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Debit card interchange expense |
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| 383 |
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| 379 |
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| 423 |
| 1.1 |
| (9.5) |
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Legal fees |
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| 253 |
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| 279 |
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| 335 |
| (9.3) |
| (24.5) |
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Other real estate owned expense, net |
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| 474 |
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| 977 |
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| 2,252 |
| (51.5) |
| (79.0) |
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Other expense |
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| 3,151 |
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| 2,968 |
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| 3,362 |
| 6.2 |
| (6.3) |
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Total noninterest expense |
| $ | 16,097 |
| $ | 16,244 |
| $ | 18,767 |
| (0.9) |
| (14.2) |
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Efficiency ratio (defined below) |
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| 69.59 | % |
| 73.73 | % |
| 74.22 | % |
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The efficiency ratio shown in the table above is calculated as noninterest expense, excluding core deposit intangible amortization and OREO expenses, divided by the sum of net interest income on a fully tax equivalent basis, total noninterest income less net gains and losses on securities and with a tax equivalent adjustment on the increase in cash surrender value of bank-owned life insurance.
Noninterest expense decreased on a linked quarter basis reflecting sharply lower OREO valuation expense included in OREO expense, net above. Major expense categories were flat or down in the fourth quarter 2015 compared to the same period in 2014 most notably in salaries, bonus, benefits and FDIC insurance expense. Fourth quarter 2015 total noninterest expense was 14.2% lower than the 2014 fourth quarter.
4
Earning Assets
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| December 31, 2015 |
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| Major Classification of Loans as of |
| Percent Change From |
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(in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, |
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| 2015 |
| 2015 |
| 2014 |
| 2015 |
| 2014 |
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Commercial |
| $ | 130,362 |
| $ | 120,036 |
| $ | 119,158 |
| 8.6 |
| 9.4 |
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Real estate - commercial |
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| 605,721 |
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| 609,937 |
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| 600,629 |
| (0.7) |
| 0.8 |
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Real estate - construction |
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| 19,806 |
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| 23,461 |
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| 44,795 |
| (15.6) |
| (55.8) |
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Real estate - residential |
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| 351,007 |
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| 354,106 |
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| 370,191 |
| (0.9) |
| (5.2) |
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Consumer |
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| 4,216 |
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| 4,005 |
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| 3,504 |
| 5.3 |
| 20.3 |
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Overdraft |
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| 483 |
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| 423 |
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| 649 |
| 14.2 |
| (25.6) |
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Lease financing receivables |
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| 10,953 |
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| 9,697 |
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| 8,038 |
| 13.0 |
| 36.3 |
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Other |
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| 10,130 |
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| 10,345 |
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| 11,630 |
| (2.1) |
| (12.9) |
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| 1,132,678 |
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| 1,132,010 |
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| 1,158,594 |
| 0.1 |
| (2.2) |
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Net deferred loan costs |
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| 1,037 |
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| 902 |
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| 738 |
| 15.0 |
| 40.5 |
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| $ | 1,133,715 |
| $ | 1,132,912 |
| $ | 1,159,332 |
| 0.1 |
| (2.2) |
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Fourth quarter loan production continued at the reduced pace previously seen in 2015 leading to essentially unchanged total loans at December 31, 2015 when compared to total loans at September 30, 2015. A volume increase in Commercial for the quarter is offset by decreases in other categories, most notably in real estate. Total loans are down $25.6 million from year end 2014. Management continued to encounter limited loan demand in our core market areas while emphasizing loan quality and transactions that the Company expects will develop as long-term relationships.
The investment portfolio ended the fourth quarter of 2015 at $703.8 million, an increase from $658.9 million at September 30, 2015 and up from $645.2 million at year end 2014. Available-for-sale purchases during the fourth quarter included additional student loan asset backed securities as well as municipals and a tax anticipation warrant issued by local school districts. During the fourth quarter there were sales that resulted in an immaterial realized loss for the quarter.
Asset Quality
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| As Of |
| Percent Change From | |||||||||
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| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, | |||
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| 2015 |
| 2015 |
| 2014 |
| 2015 |
| 2014 | |||
Nonaccrual loans |
| $ | 14,389 |
| $ | 18,224 |
| $ | 26,926 |
| (21.0) |
| (46.6) |
Nonperforming troubled debt restructured loans accruing interest |
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| 165 |
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| 307 |
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| 154 |
| (46.3) |
| 7.1 |
Loans past due 90 days or more and still accruing interest |
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| 65 |
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| - |
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| - |
| - |
| - |
Total nonperforming loans |
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| 14,619 |
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| 18,531 |
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| 27,080 |
| (21.1) |
| (46.0) |
Other real estate owned |
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| 19,141 |
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| 24,451 |
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| 31,982 |
| (21.7) |
| (40.2) |
Total nonperforming assets |
| $ | 33,760 |
| $ | 42,982 |
| $ | 59,062 |
| (21.5) |
| (42.8) |
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30-89 days past due loans |
| $ | 3,652 |
| $ | 3,358 |
| $ | 2,965 |
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Nonaccrual loans to total loans |
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| 1.3 | % |
| 1.6 | % |
| 2.3 | % |
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Nonperforming loans to total loans |
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| 1.3 | % |
| 1.6 | % |
| 2.3 | % |
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|
|
Nonperforming assets to total loans plus OREO |
|
| 2.9 | % |
| 3.7 | % |
| 5.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
| $ | 16,223 |
| $ | 16,613 |
| $ | 21,637 |
|
|
|
|
Allowance for loan losses to loans |
|
| 1.4 | % |
| 1.5 | % |
| 1.9 | % |
|
|
|
Allowance for loan losses to nonaccrual loans |
|
| 112.7 | % |
| 91.2 | % |
| 80.4 | % |
|
|
|
Nonperforming loans consist of nonaccrual loans, nonperforming restructured accruing loans and loans 90 days or greater past due but still accruing. Total nonperforming loans were $14.6 million at December 31, 2015 compared to $18.5 million at September 30, 2015, and $27.1 million at December 31, 2014.
Classified loans include nonaccrual, performing troubled debt restructurings and all other loans considered substandard, as shown below. While decreased by 38.4% from year end 2014, classified loans show a 2.4% increase
5
from September 30, 2015. Management review of the loan portfolio concluded neither a loan loss provision nor a reserve release was appropriate in the fourth quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, 2015 |
| ||
|
| Classified loans as of |
| Percent Change From |
| |||||||||
(in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2015 |
| 2015 |
| 2014 |
| 2015 |
| 2014 |
| |||
Real estate-construction |
| $ | 83 |
| $ | 3,803 |
| $ | 4,045 |
| (97.8) |
| (97.9) |
|
Real estate-residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor |
|
| 1,136 |
|
| 806 |
|
| 2,263 |
| 40.9 |
| (49.8) |
|
Owner occupied |
|
| 7,079 |
|
| 7,179 |
|
| 7,343 |
| (1.4) |
| (3.6) |
|
Revolving and junior liens |
|
| 3,055 |
|
| 3,599 |
|
| 3,713 |
| (15.1) |
| (17.7) |
|
Real estate-commercial, nonfarm |
|
| 10,568 |
|
| 7,354 |
|
| 19,170 |
| 43.7 |
| (44.9) |
|
Real estate-commercial, farm |
|
| 1,272 |
|
| 1,272 |
|
| - |
| - |
| - |
|
Commercial |
|
| 2,029 |
|
| 616 |
|
| 4,403 |
| 229.4 |
| (53.9) |
|
Other |
|
| 1 |
|
| 1 |
|
| 1 |
| - |
| - |
|
|
| $ | 25,223 |
| $ | 24,630 |
| $ | 40,938 |
| 2.4 |
| (38.4) |
|
Net Charge-off Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan Charge-offs, net of recoveries | Three Months Ended | |||||||||||||
(in thousands) | December 31, |
| % of |
| September 30, |
| % of |
| December 31, |
| % of | |||
| 2015 |
| Total |
| 2015 |
| Total |
| 2014 |
| Total | |||
Real estate-construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilder | $ | (3) |
| (0.8) |
| $ | (9) |
| 2.3 |
| $ | (109) |
| (27.7) |
Land |
| (2) |
| (0.5) |
|
| (4) |
| 1.0 |
|
| (14) |
| (3.6) |
Commercial speculative |
| (1) |
| (0.3) |
|
| (190) |
| 48.5 |
|
| - |
| - |
All other |
| - |
| - |
|
| (1) |
| 0.3 |
|
| (3) |
| (0.8) |
Total real estate-construction |
| (6) |
| (1.6) |
|
| (204) |
| 52.1 |
|
| (126) |
| (32.1) |
Real estate-residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor |
| 97 |
| 24.9 |
|
| (10) |
| 2.6 |
|
| (23) |
| (5.9) |
Owner occupied |
| (91) |
| (23.3) |
|
| 163 |
| (41.6) |
|
| (9) |
| (2.3) |
Revolving and junior liens |
| 258 |
| 66.2 |
|
| (3) |
| 0.8 |
|
| 416 |
| 105.9 |
Total real estate-residential |
| 264 |
| 67.8 |
|
| 150 |
| (38.2) |
|
| 384 |
| 97.7 |
Real estate-commercial, nonfarm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner general purpose |
| (2) |
| (0.5) |
|
| 20 |
| (5.1) |
|
| 14 |
| 3.6 |
Owner special purpose |
| (4) |
| (1.0) |
|
| (126) |
| 32.1 |
|
| 111 |
| 28.2 |
Non-owner general purpose |
| 87 |
| 22.3 |
|
| (9) |
| 2.3 |
|
| (34) |
| (8.6) |
Non-owner special purpose |
| - |
| - |
|
| (139) |
| 35.5 |
|
| 10 |
| 2.5 |
Retail properties |
| - |
| - |
|
| - |
| - |
|
| (3) |
| (0.8) |
Total real estate-commercial, nonfarm |
| 81 |
| 20.8 |
|
| (254) |
| 64.8 |
|
| 98 |
| 24.9 |
Real estate-commercial, farm |
| - |
| - |
|
| - |
| - |
|
| - |
| - |
Commercial |
| (12) |
| (3.1) |
|
| (112) |
| 28.5 |
|
| 57 |
| 14.5 |
Other |
| 63 |
| 16.1 |
|
| 28 |
| (7.2) |
|
| (20) |
| (5.0) |
Net (recovery)/charge-off | $ | 390 |
| 100.0 |
| $ | (392) |
| 100.0 |
| $ | 393 |
| 100.0 |
Net charge-offs for the quarter are essentially unchanged from the fourth quarter of 2014.
Deposits
Total deposits were $1.76 billion at December 31, 2015. That amount reflects an increase from total deposits of $1.72 billion at September 30, 2015 and compares to $1.69 billion at year end 2014. Demand /Savings / NOW / Money Market balances experienced good increases in volume during in the fourth quarter while time deposits or certificates of deposit reflect a modest decrease for the period.
Borrowings
The Bank’s borrowing at the Federal Home Loan Bank of Chicago (the “FHLBC”) requires the Bank to be a member and invest in the stock of the FHLBC. As of December 31, 2015, the Bank had $15.0 million outstanding
6
under FHLBC advances compared to $35.0 million and $45.0 million outstanding in advances at September 30, 2015, and December 31, 2014, respectively. Management borrowed overnight funds under the advance program virtually every day in fourth quarter.
The Company is also indebted on $58.4 million of junior subordinated debentures related to the trust preferred securities issued by its two statutory trust subsidiaries, Old Second Capital Trust I and Old Second Capital Trust II. As of the date hereof, the Company continues to be current on the payments due on these securities.
Capital
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, |
| September 30, |
| June 30, |
| March 31, | ||||
| 2015 |
| 2015 |
| 2015 |
| 2015 | ||||
The Company's common equity tier 1 capital ratio | 10.55 | % |
| 10.26 | % |
| 9.82 | % |
| 9.44 | % |
(minimum 4.5% for adequately capitalized) |
|
|
|
|
|
|
|
|
|
|
|
The Company's tier 1 capital ratio | 12.30 | % |
| 11.96 | % |
| 14.21 | % |
| 13.65 | % |
(minimum 6.0% for adequately capitalized) |
|
|
|
|
|
|
|
|
|
|
|
The Company's total capital ratio | 15.56 | % |
| 15.36 | % |
| 17.10 | % |
| 17.28 | % |
(minimum 8.0% for adequately capitalized) |
|
|
|
|
|
|
|
|
|
|
|
The Company's tier 1 leverage capital ratio | 8.69 | % |
| 8.46 | % |
| 10.02 | % |
| 9.82 | % |
(minimum 4.0% for adequately capitalized) |
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015, the Bank’s common equity tier 1 capital ratio of 14.10% and total capital ratio of 15.23% exceeded the minimum capital ratios to be deemed “well capitalized”. All December 31, 2015 ratios are estimated. Bank ratios for December 31, 2015 reflect a $30 million dividend paid by the Bank to the Company in December, 2015.
Non-GAAP Presentations: Management has traditionally disclosed certain non-GAAP ratios to evaluate and measure the Company’s performance, including a net interest margin calculation. The net interest margin is calculated by dividing net interest income on a tax equivalent basis by average earning assets for the period. Management believes this measure provides investors with information regarding balance sheet profitability. Consistent with industry practice, management also disclosed other non-GAAP measures in the discussion above and in the following tables. The efficiency ratio is discussed in the noninterest expense presentation on page 4. The tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Forward Looking Statements: This report may contain forward-looking statements. Forward looking statements are identifiable by the inclusion of such qualifications as expects, intends, believes, may, likely or other indications that the particular statements are not based upon facts but are rather based upon the Company’s beliefs as of the date of this release. Actual events and results may differ significantly from those described in such forward-looking statements, due to changes in the economy, interest rates or other factors. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. For additional information concerning the Company and its business, including other factors that could materially affect the Company’s financial results or cause actual results to differ substantially from those discussed or implied in forward looking statements contained in this release, please review our filings with the Securities and Exchange Commission.
Conference Call
The Company will also host an earnings call on Thursday, January 21, 2016, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). Investors may listen to the Company’s earnings call via telephone by dialing 877-407-8035. Investors should call into the dial-in number set forth above at least 10 minutes prior to the scheduled start of the call.
A replay of the earnings call will be available until 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on February 4, 2016, by dialing 877-660-6853, using Conference ID #: 13627760.
7
Old Second Bancorp, Inc. and Subsidiaries
(In thousands, except share data)
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
| |
|
| December 31, |
| December 31, | ||
|
| 2015 |
| 2014 | ||
Assets |
|
|
|
|
|
|
Cash and due from banks |
| $ | 26,975 |
| $ | 30,101 |
Interest bearing deposits with financial institutions |
|
| 13,363 |
|
| 14,096 |
Cash and cash equivalents |
|
| 40,338 |
|
| 44,197 |
Securities available-for-sale, at fair value |
|
| 456,066 |
|
| 385,486 |
Securities held-to-maturity, at amortized cost |
|
| 247,746 |
|
| 259,670 |
Federal Home Loan Bank and Federal Reserve Bank stock |
|
| 8,518 |
|
| 9,058 |
Loans held-for-sale |
|
| 2,849 |
|
| 5,072 |
Loans |
|
| 1,133,715 |
|
| 1,159,332 |
Less: allowance for loan losses |
|
| 16,223 |
|
| 21,637 |
Net loans |
|
| 1,117,492 |
|
| 1,137,695 |
Premises and equipment, net |
|
| 39,612 |
|
| 42,335 |
Other real estate owned |
|
| 19,141 |
|
| 31,982 |
Mortgage servicing rights, net |
|
| 5,847 |
|
| 5,462 |
Bank-owned life insurance (BOLI) |
|
| 58,028 |
|
| 56,807 |
Deferred tax assets, net |
|
| 64,552 |
|
| 70,141 |
Other assets |
|
| 17,674 |
|
| 13,882 |
Total assets |
| $ | 2,077,863 |
| $ | 2,061,787 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 442,639 |
| $ | 400,447 |
Interest bearing: |
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 908,598 |
|
| 865,103 |
Time |
|
| 407,849 |
|
| 419,505 |
Total deposits |
|
| 1,759,086 |
|
| 1,685,055 |
Securities sold under repurchase agreements |
|
| 34,070 |
|
| 21,036 |
Other short-term borrowings |
|
| 15,000 |
|
| 45,000 |
Junior subordinated debentures |
|
| 58,378 |
|
| 58,378 |
Subordinated debt |
|
| 45,000 |
|
| 45,000 |
Notes payable and other borrowings |
|
| 500 |
|
| 500 |
Other liabilities |
|
| 9,900 |
|
| 12,655 |
Total liabilities |
|
| 1,921,934 |
|
| 1,867,624 |
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
Preferred stock |
|
| - |
|
| 47,331 |
Common stock |
|
| 34,427 |
|
| 34,365 |
Additional paid-in capital |
|
| 115,918 |
|
| 115,332 |
Retained earnings |
|
| 114,209 |
|
| 100,697 |
Accumulated other comprehensive loss |
|
| (12,659) |
|
| (7,713) |
Treasury stock |
|
| (95,966) |
|
| (95,849) |
Total stockholders’ equity |
|
| 155,929 |
|
| 194,163 |
Total liabilities and stockholders’ equity |
| $ | 2,077,863 |
| $ | 2,061,787 |
8
Old Second Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| (unaudited) | ||||||||
|
| Three Months Ended |
| Year Ended | ||||||||
|
| December 31, |
| December 31, | ||||||||
|
| 2015 |
| 2014 |
| 2015 |
| 2014 | ||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 12,997 |
| $ | 13,580 |
| $ | 53,035 |
| $ | 52,926 |
Loans held-for-sale |
|
| 36 |
|
| 41 |
|
| 189 |
|
| 133 |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
| 3,819 |
|
| 3,691 |
|
| 14,037 |
|
| 14,131 |
Tax exempt |
|
| 116 |
|
| 96 |
|
| 542 |
|
| 472 |
Dividends from Federal Reserve Bank and Federal Home Loan Bank stock |
|
| 76 |
|
| 77 |
|
| 306 |
|
| 309 |
Interest bearing deposits with financial institutions |
|
| 12 |
|
| 13 |
|
| 55 |
|
| 73 |
Total interest and dividend income |
|
| 17,056 |
|
| 17,498 |
|
| 68,164 |
|
| 68,044 |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 187 |
|
| 176 |
|
| 734 |
|
| 738 |
Time deposits |
|
| 824 |
|
| 896 |
|
| 3,201 |
|
| 4,500 |
Other short-term borrowings |
|
| 11 |
|
| 9 |
|
| 33 |
|
| 19 |
Junior subordinated debentures |
|
| 1,072 |
|
| 1,072 |
|
| 4,287 |
|
| 4,919 |
Subordinated debt |
|
| 210 |
|
| 199 |
|
| 814 |
|
| 792 |
Notes payable and other borrowings |
|
| 2 |
|
| 4 |
|
| 7 |
|
| 16 |
Total interest expense |
|
| 2,306 |
|
| 2,356 |
|
| 9,076 |
|
| 10,984 |
Net interest and dividend income |
|
| 14,750 |
|
| 15,142 |
|
| 59,088 |
|
| 57,060 |
Loan loss reserve release |
|
| - |
|
| (1,300) |
|
| (4,400) |
|
| (3,300) |
Net interest and dividend income after provision for loan losses |
|
| 14,750 |
|
| 16,442 |
|
| 63,488 |
|
| 60,360 |
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
Trust income |
|
| 1,427 |
|
| 1,579 |
|
| 5,953 |
|
| 6,198 |
Service charges on deposits |
|
| 1,734 |
|
| 1,725 |
|
| 6,820 |
|
| 7,079 |
Secondary mortgage fees |
|
| 192 |
|
| 180 |
|
| 907 |
|
| 621 |
Mortgage servicing (loss) gain, net of changes in fair value |
|
| 469 |
|
| (60) |
|
| 487 |
|
| 209 |
Net gain on sales of mortgage loans |
|
| 1,098 |
|
| 980 |
|
| 5,775 |
|
| 3,594 |
Securities (loss) gain, net |
|
| - |
|
| 262 |
|
| (178) |
|
| 1,719 |
Increase in cash surrender value of bank-owned life insurance |
|
| 381 |
|
| 369 |
|
| 1,221 |
|
| 1,397 |
Death benefit realized on bank-owned life insurance |
|
| - |
|
| - |
|
| - |
|
| - |
Debit card interchange income |
|
| 1,015 |
|
| 1,035 |
|
| 4,028 |
|
| 3,806 |
Loss on disposal and transfer of fixed assets |
|
| 24 |
|
| - |
|
| (1,119) |
|
| (121) |
Other income |
|
| 1,069 |
|
| 1,021 |
|
| 5,400 |
|
| 4,714 |
Total noninterest income |
|
| 7,409 |
|
| 7,091 |
|
| 29,294 |
|
| 29,216 |
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 8,397 |
|
| 9,027 |
|
| 35,061 |
|
| 36,167 |
Occupancy expense, net |
|
| 1,228 |
|
| 1,154 |
|
| 4,749 |
|
| 4,963 |
Furniture and equipment expense |
|
| 1,254 |
|
| 1,016 |
|
| 4,430 |
|
| 3,972 |
FDIC insurance |
|
| 311 |
|
| 615 |
|
| 1,334 |
|
| 2,170 |
General bank insurance |
|
| 298 |
|
| 358 |
|
| 1,273 |
|
| 1,561 |
Amortization of core deposit |
|
| - |
|
| - |
|
| - |
|
| 1,177 |
Advertising expense |
|
| 348 |
|
| 225 |
|
| 1,340 |
|
| 1,278 |
Debit card interchange expense |
|
| 383 |
|
| 423 |
|
| 1,514 |
|
| 1,631 |
Legal fees |
|
| 253 |
|
| 335 |
|
| 1,175 |
|
| 1,333 |
Other real estate expense, net |
|
| 474 |
|
| 2,252 |
|
| 5,191 |
|
| 6,917 |
Other expense |
|
| 3,151 |
|
| 3,362 |
|
| 12,354 |
|
| 12,510 |
Total noninterest expense |
|
| 16,097 |
|
| 18,767 |
|
| 68,421 |
|
| 73,679 |
Income before income taxes |
|
| 6,062 |
|
| 4,766 |
|
| 24,361 |
|
| 15,897 |
Provision for income taxes |
|
| 2,229 |
|
| 1,777 |
|
| 8,976 |
|
| 5,761 |
Net income |
| $ | 3,833 |
| $ | 2,989 |
| $ | 15,385 |
| $ | 10,136 |
Preferred stock dividends and accretion of discount |
|
| - |
|
| 1,077 |
|
| 1,873 |
|
| 5,062 |
Dividends waived upon preferred stock redemption |
|
| - |
|
| - |
|
| - |
|
| (5,433) |
Gain on preferred stock redemption |
|
| - |
|
| - |
|
| - |
|
| (1,348) |
Net income available to common stockholders |
| $ | 3,833 |
| $ | 1,912 |
| $ | 13,512 |
| $ | 11,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
| $ | 0.13 |
| $ | 0.06 |
| $ | 0.46 |
| $ | 0.46 |
Diluted earnings per share |
|
| 0.13 |
|
| 0.06 |
|
| 0.46 |
|
| 0.46 |
|
|
|
|
|
|
|
|
|
Ending common shares outstanding |
| 29,483,429 |
| 29,442,508 |
| 29,483,429 |
| 29,442,508 |
Weighted-average common shares outstanding |
| 29,482,722 |
| 29,442,508 |
| 29,476,821 |
| 25,300,909 |
Diluted average common shares outstanding |
| 29,748,028 |
| 29,767,508 |
| 29,730,074 |
| 25,549,193 |
9
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Average Balance
(In thousands, except share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
|
|
| 2014 |
|
| 2015 | ||||||||||||||||||
Assets |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr | ||||||||
Cash and due from banks |
| $ | 29,901 |
| $ | 36,827 |
| $ | 32,459 |
| $ | 31,314 |
| $ | 31,744 |
| $ | 29,153 |
| $ | 28,999 |
| $ | 28,781 |
Interest bearing deposits with financial institutions |
|
| 23,775 |
|
| 30,333 |
|
| 38,603 |
|
| 19,643 |
|
| 18,022 |
|
| 29,880 |
|
| 18,563 |
|
| 13,859 |
Cash and cash equivalents |
|
| 53,676 |
|
| 67,160 |
|
| 71,062 |
|
| 50,957 |
|
| 49,766 |
|
| 59,033 |
|
| 47,562 |
|
| 42,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
| 371,229 |
|
| 388,309 |
|
| 348,791 |
|
| 368,944 |
|
| 380,180 |
|
| 409,600 |
|
| 410,083 |
|
| 442,909 |
Securities held-to-maturity, at amortized cost |
|
| 263,765 |
|
| 264,070 |
|
| 263,832 |
|
| 261,775 |
|
| 258,637 |
|
| 255,293 |
|
| 251,648 |
|
| 248,871 |
Federal Home Loan Bank and Federal Reserve Bank stock |
|
| 10,292 |
|
| 10,292 |
|
| 9,085 |
|
| 9,058 |
|
| 9,058 |
|
| 8,409 |
|
| 8,271 |
|
| 8,451 |
Loans held-for-sale |
|
| 2,344 |
|
| 2,829 |
|
| 3,758 |
|
| 4,065 |
|
| 4,782 |
|
| 7,880 |
|
| 3,789 |
|
| 3,465 |
Loans |
|
| 1,104,065 |
|
| 1,118,089 |
|
| 1,133,379 |
|
| 1,141,297 |
|
| 1,156,662 |
|
| 1,144,605 |
|
| 1,140,624 |
|
| 1,136,843 |
Less : allowance for loan losses |
|
| 27,102 |
|
| 25,146 |
|
| 24,492 |
|
| 23,231 |
|
| 21,605 |
|
| 20,546 |
|
| 18,607 |
|
| 16,598 |
Net loans |
|
| 1,076,963 |
|
| 1,092,943 |
|
| 1,108,887 |
|
| 1,118,066 |
|
| 1,135,057 |
|
| 1,124,059 |
|
| 1,122,017 |
|
| 1,120,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment, net |
|
| 45,972 |
|
| 45,575 |
|
| 45,116 |
|
| 42,516 |
|
| 42,306 |
|
| 41,937 |
|
| 41,572 |
|
| 39,767 |
Other real estate owned |
|
| 39,971 |
|
| 39,094 |
|
| 38,757 |
|
| 39,566 |
|
| 32,392 |
|
| 34,637 |
|
| 29,049 |
|
| 22,760 |
Mortgage servicing rights, net |
|
| 5,569 |
|
| 5,527 |
|
| 5,522 |
|
| 5,468 |
|
| 5,202 |
|
| 5,416 |
|
| 5,776 |
|
| 5,596 |
Core deposit intangible, net |
|
| 916 |
|
| 399 |
|
| 23 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
Bank-owned life insurance (BOLI) |
|
| 55,551 |
|
| 55,894 |
|
| 56,262 |
|
| 56,566 |
|
| 56,927 |
|
| 57,283 |
|
| 57,561 |
|
| 57,775 |
Deferred tax assets, net |
|
| 75,387 |
|
| 74,082 |
|
| 71,937 |
|
| 71,628 |
|
| 69,936 |
|
| 67,657 |
|
| 66,174 |
|
| 65,916 |
Other assets |
|
| 12,990 |
|
| 12,798 |
|
| 12,615 |
|
| 11,985 |
|
| 11,781 |
|
| 12,309 |
|
| 11,514 |
|
| 11,041 |
Total other assets |
|
| 236,356 |
|
| 233,369 |
|
| 230,232 |
|
| 227,729 |
|
| 218,544 |
|
| 219,239 |
|
| 211,646 |
|
| 202,855 |
Total assets |
| $ | 2,014,625 |
| $ | 2,058,972 |
| $ | 2,035,647 |
| $ | 2,040,594 |
| $ | 2,056,024 |
| $ | 2,083,513 |
| $ | 2,055,016 |
| $ | 2,069,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 373,711 |
| $ | 389,926 |
| $ | 389,246 |
| $ | 400,001 |
| $ | 405,933 |
| $ | 435,093 |
| $ | 431,052 |
| $ | 445,083 |
Interest bearing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 852,709 |
|
| 861,735 |
|
| 860,342 |
|
| 857,666 |
|
| 881,714 |
|
| 885,809 |
|
| 889,448 |
|
| 893,947 |
Time |
|
| 468,138 |
|
| 457,818 |
|
| 437,597 |
|
| 421,584 |
|
| 418,615 |
|
| 410,066 |
|
| 404,896 |
|
| 409,353 |
Total deposits |
|
| 1,694,558 |
|
| 1,709,479 |
|
| 1,687,185 |
|
| 1,679,251 |
|
| 1,706,262 |
|
| 1,730,968 |
|
| 1,725,396 |
|
| 1,748,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under repurchase agreements |
|
| 24,539 |
|
| 25,224 |
|
| 27,266 |
|
| 27,298 |
|
| 23,437 |
|
| 31,234 |
|
| 31,466 |
|
| 26,569 |
Other short-term borrowings |
|
| 4,111 |
|
| 8,681 |
|
| 12,174 |
|
| 24,946 |
|
| 25,722 |
|
| 22,638 |
|
| 14,674 |
|
| 24,837 |
Junior subordinated debentures |
|
| 58,378 |
|
| 58,378 |
|
| 58,378 |
|
| 58,378 |
|
| 58,378 |
|
| 58,378 |
|
| 58,378 |
|
| 58,378 |
Subordinated debt |
|
| 45,000 |
|
| 45,000 |
|
| 45,000 |
|
| 45,000 |
|
| 45,000 |
|
| 45,000 |
|
| 45,000 |
|
| 45,000 |
Notes payable and other borrowings |
|
| 500 |
|
| 500 |
|
| 500 |
|
| 500 |
|
| 500 |
|
| 500 |
|
| 500 |
|
| 500 |
Other liabilities |
|
| 38,966 |
|
| 19,210 |
|
| 11,416 |
|
| 12,177 |
|
| 11,734 |
|
| 10,962 |
|
| 9,782 |
|
| 10,488 |
Total liabilities |
|
| 1,866,052 |
|
| 1,866,472 |
|
| 1,841,919 |
|
| 1,847,550 |
|
| 1,871,033 |
|
| 1,899,680 |
|
| 1,885,196 |
|
| 1,914,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
| 72,991 |
|
| 54,947 |
|
| 47,331 |
|
| 47,331 |
|
| 36,637 |
|
| 31,553 |
|
| 15,091 |
|
| - |
Common stock |
|
| 18,840 |
|
| 33,104 |
|
| 34,365 |
|
| 34,365 |
|
| 34,414 |
|
| 34,419 |
|
| 34,422 |
|
| 34,426 |
Additional paid-in capital |
|
| 66,241 |
|
| 111,279 |
|
| 115,220 |
|
| 115,263 |
|
| 115,413 |
|
| 115,553 |
|
| 115,692 |
|
| 115,827 |
Retained earnings |
|
| 93,508 |
|
| 96,002 |
|
| 98,256 |
|
| 99,553 |
|
| 102,050 |
|
| 105,208 |
|
| 108,858 |
|
| 112,584 |
Accumulated other comprehensive loss |
|
| (7,177) |
|
| (6,982) |
|
| (5,594) |
|
| (7,618) |
|
| (7,558) |
|
| (6,935) |
|
| (8,277) |
|
| (11,590) |
Treasury stock |
|
| (95,830) |
|
| (95,850) |
|
| (95,850) |
|
| (95,850) |
|
| (95,965) |
|
| (95,965) |
|
| (95,966) |
|
| (95,966) |
Total stockholders' equity |
|
| 148,573 |
|
| 192,500 |
|
| 193,728 |
|
| 193,044 |
|
| 184,991 |
|
| 183,833 |
|
| 169,820 |
|
| 155,281 |
Total liabilities and stockholder's equity |
| $ | 2,014,625 |
| $ | 2,058,972 |
| $ | 2,035,647 |
| $ | 2,040,594 |
| $ | 2,056,024 |
| $ | 2,083,513 |
| $ | 2,055,016 |
| $ | 2,069,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Earning Assets |
| $ | 1,775,470 |
| $ | 1,813,922 |
| $ | 1,797,448 |
| $ | 1,804,782 |
| $ | 1,827,341 |
| $ | 1,855,667 |
| $ | 1,832,978 |
| $ | 1,854,398 |
Total Interest Bearing Liabilities |
|
| 1,453,375 |
|
| 1,457,336 |
|
| 1,441,257 |
|
| 1,435,372 |
|
| 1,453,366 |
|
| 1,453,625 |
|
| 1,444,362 |
|
| 1,458,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(In thousands, except share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2014 |
| 2015 | ||||||||||||||||||||
|
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr | ||||||||
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 12,938 |
| $ | 13,046 |
| $ | 13,362 |
| $ | 13,580 |
| $ | 13,218 |
| $ | 13,467 |
| $ | 13,353 |
| $ | 12,997 |
Loans held-for-sale |
|
| 25 |
|
| 29 |
|
| 38 |
|
| 41 |
|
| 43 |
|
| 72 |
|
| 38 |
|
| 36 |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
| 3,502 |
|
| 3,352 |
|
| 3,586 |
|
| 3,691 |
|
| 3,375 |
|
| 3,372 |
|
| 3,471 |
|
| 3,819 |
Tax exempt |
|
| 148 |
|
| 118 |
|
| 110 |
|
| 96 |
|
| 141 |
|
| 163 |
|
| 122 |
|
| 116 |
Dividends from Federal Reserve Bank and Federal Home Loan Bank stock |
|
| 76 |
|
| 78 |
|
| 78 |
|
| 77 |
|
| 77 |
|
| 77 |
|
| 76 |
|
| 76 |
Interest bearing deposits with financial institutions |
|
| 15 |
|
| 20 |
|
| 25 |
|
| 13 |
|
| 12 |
|
| 19 |
|
| 12 |
|
| 12 |
Total interest and dividend income |
|
| 16,704 |
|
| 16,643 |
|
| 17,199 |
|
| 17,498 |
|
| 16,866 |
|
| 17,170 |
|
| 17,072 |
|
| 17,056 |
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 199 |
|
| 188 |
|
| 175 |
|
| 176 |
|
| 179 |
|
| 183 |
|
| 185 |
|
| 187 |
Time deposits |
|
| 1,321 |
|
| 1,210 |
|
| 1,073 |
|
| 896 |
|
| 807 |
|
| 771 |
|
| 799 |
|
| 824 |
Other short-term borrowings |
|
| 2 |
|
| 3 |
|
| 5 |
|
| 9 |
|
| 9 |
|
| 7 |
|
| 6 |
|
| 11 |
Junior subordinated debentures |
|
| 1,387 |
|
| 1,388 |
|
| 1,072 |
|
| 1,072 |
|
| 1,072 |
|
| 1,071 |
|
| 1,072 |
|
| 1,072 |
Subordinated debt |
|
| 196 |
|
| 198 |
|
| 199 |
|
| 199 |
|
| 197 |
|
| 202 |
|
| 205 |
|
| 210 |
Notes payable and other borrowings |
|
| 4 |
|
| 4 |
|
| 4 |
|
| 4 |
|
| 4 |
|
| - |
|
| 1 |
|
| 2 |
Total interest expense |
|
| 3,109 |
|
| 2,991 |
|
| 2,528 |
|
| 2,356 |
|
| 2,268 |
|
| 2,234 |
|
| 2,268 |
|
| 2,306 |
Net interest and dividend income |
|
| 13,595 |
|
| 13,652 |
|
| 14,671 |
|
| 15,142 |
|
| 14,598 |
|
| 14,936 |
|
| 14,804 |
|
| 14,750 |
Loan loss reserve release |
|
| (1,000) |
|
| (1,000) |
|
| - |
|
| (1,300) |
|
| - |
|
| (2,300) |
|
| (2,100) |
|
| - |
Net interest and dividend income after provision for loan losses |
|
| 14,595 |
|
| 14,652 |
|
| 14,671 |
|
| 16,442 |
|
| 14,598 |
|
| 17,236 |
|
| 16,904 |
|
| 14,750 |
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust income |
|
| 1,459 |
|
| 1,677 |
|
| 1,483 |
|
| 1,579 |
|
| 1,486 |
|
| 1,596 |
|
| 1,444 |
|
| 1,427 |
Service charges on deposits |
|
| 1,720 |
|
| 1,796 |
|
| 1,838 |
|
| 1,725 |
|
| 1,541 |
|
| 1,779 |
|
| 1,766 |
|
| 1,734 |
Secondary mortgage fees |
|
| 112 |
|
| 155 |
|
| 174 |
|
| 180 |
|
| 244 |
|
| 281 |
|
| 190 |
|
| 192 |
Mortgage servicing (loss) gain, net of changes in fair value |
|
| (47) |
|
| 64 |
|
| 252 |
|
| (60) |
|
| (208) |
|
| 500 |
|
| (274) |
|
| 469 |
Net gain on sales of mortgage loans |
|
| 662 |
|
| 1,038 |
|
| 914 |
|
| 980 |
|
| 1,623 |
|
| 1,695 |
|
| 1,359 |
|
| 1,098 |
Securities (losses) gains, net |
|
| (69) |
|
| 295 |
|
| 1,231 |
|
| 262 |
|
| (109) |
|
| (12) |
|
| (57) |
|
| - |
Increase in cash surrender value of bank-owned life insurance |
|
| 358 |
|
| 366 |
|
| 304 |
|
| 369 |
|
| 354 |
|
| 283 |
|
| 203 |
|
| 381 |
Debit card interchange income |
|
| 830 |
|
| 930 |
|
| 1,011 |
|
| 1,035 |
|
| 959 |
|
| 1,050 |
|
| 1,004 |
|
| 1,015 |
Loss on disposal and transfer of fixed assets |
|
| - |
|
| - |
|
| (121) |
|
| - |
|
| - |
|
| - |
|
| (1,143) |
|
| 24 |
Other income |
|
| 1,296 |
|
| 1,160 |
|
| 1,237 |
|
| 1,021 |
|
| 2,083 |
|
| 1,092 |
|
| 1,156 |
|
| 1,069 |
Total noninterest income |
|
| 6,321 |
|
| 7,481 |
|
| 8,323 |
|
| 7,091 |
|
| 7,973 |
|
| 8,264 |
|
| 5,648 |
|
| 7,409 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 9,101 |
|
| 9,183 |
|
| 8,856 |
|
| 9,027 |
|
| 9,255 |
|
| 9,149 |
|
| 8,260 |
|
| 8,397 |
Occupancy expense, net |
|
| 1,481 |
|
| 1,185 |
|
| 1,143 |
|
| 1,154 |
|
| 1,271 |
|
| 1,094 |
|
| 1,156 |
|
| 1,228 |
Furniture and equipment expense |
|
| 983 |
|
| 984 |
|
| 989 |
|
| 1,016 |
|
| 1,001 |
|
| 1,065 |
|
| 1,110 |
|
| 1,254 |
FDIC insurance |
|
| 279 |
|
| 627 |
|
| 649 |
|
| 615 |
|
| 273 |
|
| 377 |
|
| 373 |
|
| 311 |
General bank insurance |
|
| 489 |
|
| 343 |
|
| 371 |
|
| 358 |
|
| 357 |
|
| 310 |
|
| 308 |
|
| 298 |
Amortization of core deposit |
|
| 512 |
|
| 511 |
|
| 154 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
Advertising expense |
|
| 303 |
|
| 459 |
|
| 291 |
|
| 225 |
|
| 205 |
|
| 353 |
|
| 434 |
|
| 348 |
Debit card interchange expense |
|
| 378 |
|
| 412 |
|
| 418 |
|
| 423 |
|
| 352 |
|
| 400 |
|
| 379 |
|
| 383 |
Legal fees |
|
| 257 |
|
| 409 |
|
| 332 |
|
| 335 |
|
| 223 |
|
| 420 |
|
| 279 |
|
| 253 |
Other real estate expense, net |
|
| 1,008 |
|
| 1,650 |
|
| 2,007 |
|
| 2,252 |
|
| 1,352 |
|
| 2,388 |
|
| 977 |
|
| 474 |
Other expense |
|
| 2,725 |
|
| 3,289 |
|
| 3,134 |
|
| 3,362 |
|
| 2,864 |
|
| 3,371 |
|
| 2,968 |
|
| 3,151 |
Total noninterest expense |
|
| 17,516 |
|
| 19,052 |
|
| 18,344 |
|
| 18,767 |
|
| 17,153 |
|
| 18,927 |
|
| 16,244 |
|
| 16,097 |
Income before income taxes |
|
| 3,400 |
|
| 3,081 |
|
| 4,650 |
|
| 4,766 |
|
| 5,418 |
|
| 6,573 |
|
| 6,308 |
|
| 6,062 |
Provision for income taxes |
|
| 1,198 |
|
| 1,060 |
|
| 1,726 |
|
| 1,777 |
|
| 1,919 |
|
| 2,444 |
|
| 2,384 |
|
| 2,229 |
Net income |
|
| 2,202 |
|
| 2,021 |
|
| 2,924 |
|
| 2,989 |
|
| 3,499 |
|
| 4,129 |
|
| 3,924 |
|
| 3,833 |
Preferred stock dividends and accretion of discount |
|
| 1,572 |
|
| 1,348 |
|
| 1,065 |
|
| 1,077 |
|
| 824 |
|
| 710 |
|
| 339 |
|
| - |
Dividends waived upon preferred stock redemption |
|
| - |
|
| (5,433) |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
Gain on preferred stock redemption |
|
| - |
|
| (1,348) |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
Net income available to common stockholders |
| $ | 630 |
| $ | 7,454 |
| $ | 1,859 |
| $ | 1,912 |
| $ | 2,675 |
| $ | 3,419 |
| $ | 3,585 |
| $ | 3,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
| $ | 0.04 |
| $ | 0.26 |
| $ | 0.06 |
| $ | 0.06 |
| $ | 0.09 |
| $ | 0.12 |
| $ | 0.12 |
| $ | 0.13 |
Diluted earnings per share |
|
| 0.04 |
|
| 0.26 |
|
| 0.06 |
|
| 0.06 |
|
| 0.09 |
|
| 0.12 |
|
| 0.12 |
|
| 0.13 |
11
The table below provides a reconciliation of each non-GAAP tax equivalent measure to the most comparable GAAP measure for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
|
| Year Ended |
| |||||||||||
|
| December 31, |
| September 30, |
| December 31, |
|
| December 31, |
| |||||||
|
| 2015 |
| 2015 |
| 2014 |
|
| 2015 |
| 2014 |
| |||||
Net Interest Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (GAAP) |
| $ | 17,056 |
| $ | 17,072 |
| $ | 17,498 |
|
| $ | 68,164 |
| $ | 68,044 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 24 |
|
| 24 |
|
| 28 |
|
|
| 103 |
|
| 111 |
|
Securities |
|
| 63 |
|
| 65 |
|
| 52 |
|
|
| 292 |
|
| 255 |
|
Interest income - TE |
|
| 17,143 |
|
| 17,161 |
|
| 17,578 |
|
|
| 68,559 |
|
| 68,410 |
|
Interest expense (GAAP) |
|
| 2,306 |
|
| 2,268 |
|
| 2,356 |
|
|
| 9,076 |
|
| 10,984 |
|
Net interest income -TE |
| $ | 14,837 |
| $ | 14,893 |
| $ | 15,222 |
|
| $ | 59,483 |
| $ | 57,426 |
|
Net interest income (GAAP) |
| $ | 14,750 |
| $ | 14,804 |
| $ | 15,142 |
|
| $ | 59,088 |
| $ | 57,060 |
|
Average interest earning assets |
| $ | 1,854,398 |
| $ | 1,832,978 |
| $ | 1,804,782 |
|
| $ | 1,842,644 |
| $ | 1,797,985 |
|
Net interest margin (GAAP) |
|
| 3.16 | % |
| 3.20 | % |
| 3.33 | % |
|
| 3.21 | % |
| 3.17 | % |
Net interest margin - TE |
|
| 3.17 | % |
| 3.22 | % |
| 3.35 | % |
|
| 3.23 | % |
| 3.19 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| ||||||
|
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2015 |
| 2015 |
| 2014 |
| |||
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
| $ | 16,097 |
| $ | 16,244 |
| $ | 18,767 |
|
Less amortization of core deposit, net |
|
| - |
|
| - |
|
| - |
|
Less other real estate expense, net |
|
| 474 |
|
| 977 |
|
| 2,252 |
|
Adjusted noninterest expense |
|
| 15,623 |
|
| 15,267 |
|
| 16,515 |
|
Net interest income (GAAP) |
|
| 14,750 |
|
| 14,804 |
|
| 15,142 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 24 |
|
| 24 |
|
| 28 |
|
Securities |
|
| 63 |
|
| 65 |
|
| 52 |
|
Net interest income (TE) |
|
| 14,837 |
|
| 14,893 |
|
| 15,222 |
|
Noninterest income |
|
| 7,409 |
|
| 5,648 |
|
| 7,091 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Increase in cash surrender value of BOLI - (TE) |
|
| 205 |
|
| 109 |
|
| 199 |
|
Noninterest income - (TE) |
|
| 7,614 |
|
| 5,757 |
|
| 7,290 |
|
Less securities (losses) gain, net |
|
| - |
|
| (57) |
|
| 262 |
|
Adjusted noninterest income, plus net interest income (TE) |
| $ | 22,451 |
| $ | 20,707 |
| $ | 22,250 |
|
Efficiency ratio |
|
| 69.59 | % |
| 73.73 | % |
| 74.22 | % |
12