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(NASDAQ:OSBC) | Exhibit 99.1 | |
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Contact: | Bradley S. Adams | For Immediate Release |
| Chief Financial Officer | January 24, 2018 |
| (630) 906-5484 |
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Old Second Reports Fourth Quarter 2017 Net Loss of $2.5 million
AURORA, IL, January 24, 2018 – Old Second Bancorp, Inc. (the “Company” or “Old Second”) (NASDAQ: OSBC), the parent company of Old Second National Bank (the “Bank”), today announced financial results for the fourth quarter of 2017. The Company’s net loss was $2.5 million, or $0.08 per diluted share, for the fourth quarter of 2017, as compared to net income of $5.0 million, or $0.17 per diluted share, for the fourth quarter of 2016.
Operating Results
· | Fourth quarter 2017 net loss was $2.5 million, reflecting a decrease in earnings of $10.6 million, or 131.1%, from the third quarter of 2017, and a decrease in earnings of $7.5 million, or 150.1%, from the fourth quarter of 2016. |
· | A nonrecurring, noncash charge of $9.5 million, or $0.31 per diluted share, was recorded as tax expense in the fourth quarter of 2017, stemming from the late December 2017 enactment of the “Tax Cuts and Jobs Act.” The act lowered the Federal corporate income tax rate, which caused the Company to record a valuation allowance with respect to its deferred tax asset. Adjusted earnings for the fourth quarter of 2017, a non-GAAP financial measure, which excludes this nonrecurring tax expense, were $7.0 million, or $0.23 per diluted share. See the discussion entitled “Non-GAAP Presentations” below and the tables on page 14 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent. |
· | Net interest and dividend income was $19.4 million for the fourth quarter of 2017, reflecting an increase of $103,000, or 0.5%, from the $19.3 million recorded in the third quarter of 2017, and an increase of $1.9 million, or 10.7%, over the fourth quarter of 2016. Net interest income continued to be favorably impacted in the fourth quarter of 2017 by the Company’s fourth quarter 2016 acquisition of $221.0 million of loans from the purchase of the Chicago branch of Talmer Bank and Trust (“Talmer”). Purchase accounting accretion income realized in the fourth quarter of 2017 with respect to such acquisition totaled $213,000, as compared to $265,000 in the third quarter of 2017, and $604,000 in the fourth quarter of 2016. |
· | The Company recorded provision for loan losses expense of $750,000 in the fourth quarter of 2017, compared to $300,000 in the third quarter of 2017, and $750,000 in the fourth quarter of 2016. |
· | Noninterest income was $8.2 million for the fourth quarter of 2017, which reflects growth of $341,000, or 4.3%, over the third quarter of 2017, and a decrease of $244,000, or 2.9%, compared to the fourth quarter of 2016. The current year linked quarter growth was primarily driven by increases in gains on securities. The decline in the fourth quarter 2017 compared to the prior year like period was due to reductions in residential mortgage banking revenues, partially offset by increases in gains on securities. |
· | Noninterest expense was $16.2 million for the fourth quarter of 2017 which reflects a decrease of $727,000, or 4.3%, as compared to the third quarter of 2017, and a decrease of $1.0 million, or 5.9%, from the fourth quarter of 2016. The decrease in the current year linked quarter expense is primarily due to reductions in salaries and employee benefits and OREO related costs, partially offset by increased advertising expense. The year over year decrease is primarily due to reductions in salaries and employee benefits and OREO related costs. |
· | On December 26, 2017, the Company announced the signing of a definitive agreement and plan of merger to acquire Greater Chicago Financial Corp. and its wholly-owned bank subsidiary, ABC Bank, in an all cash |
1
transaction valued at approximately $41.1 million. ABC Bank had total assets of $350.4 million as of September 30, 2017, including $246.3 million of total loans. This transaction is anticipated to close in the second quarter of 2018, and is subject to regulatory approval and customary closing conditions. |
· | On January 17 2018, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on February 5, 2018, to stockholders of record as of January 26, 2018. |
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Capital Ratios
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| December 31, |
| September 30, |
| December 31, | |||
| 2017 |
| 2017 |
| 2016 | |||
The Company |
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Common equity tier 1 capital ratio | 9.25 | % |
| 8.88 | % |
| 8.76 | % |
Total risk-based capital ratio | 12.93 | % |
| 12.46 | % |
| 12.29 | % |
Tier 1 risk-based capital ratio | 12.03 | % |
| 11.54 | % |
| 10.88 | % |
Tier 1 leverage ratio | 10.08 | % |
| 9.69 | % |
| 8.90 | % |
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The Bank |
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Common equity tier 1 capital ratio | 12.88 | % |
| 12.67 | % |
| 12.53 | % |
Total risk-based capital ratio | 13.78 | % |
| 13.52 | % |
| 13.45 | % |
Tier 1 risk-based capital ratio | 12.88 | % |
| 12.67 | % |
| 12.53 | % |
Tier 1 leverage ratio | 10.79 | % |
| 10.63 | % |
| 10.24 | % |
· | The ratios shown above exceed levels required to be considered “well capitalized.” |
Asset Quality & Earning Assets
· | Nonperforming loans totaled $15.6 million at December 31, 2017, compared to $16.3 million at September 30, 2017, and $16.0 million at December 31, 2016. Credit metrics continue to be relatively stable regarding nonperforming loan levels, and management is carefully monitoring loans considered to be in a classified status. Nonperforming loans as a percent of total loans remained the same at 1.0% as of December 31, 2017 and September 30, 2017, and was 1.1% as of December 31, 2016. |
· | OREO assets totaled $8.4 million as of December 31, 2017, compared to $9.0 million at September 30, 2017, and $11.9 million at December 31, 2016. Valuation writedowns continued in the fourth quarter of 2017 with expense of $78,000 compared to $920,000 in the third quarter of 2017 and $265,000 in the fourth quarter of 2016. Nonperforming assets as a percent of total loans plus OREO decreased to 1.5% as of December 31, 2017, as compared to 1.6% as of September 30, 2017 and 1.9% as of December 31, 2016. |
· | Total loans were $1.62 billion at December 31, 2017, reflecting an increase of $23.4 million compared to September 30, 2017, and an increase of $138.8 million compared to December 31, 2016. Average loans (including loans held-for-sale) for the fourth quarter of 2017 were $1.60 billion, reflecting an increase of $46.2 million from quarterly average loans for the third quarter of 2017, and an increase of $209.1 million from quarterly average loans for the fourth quarter of 2016. |
· | Available-for-sale securities at fair value totaled $541.4 million at December 31, 2017, compared to $533.5 million at September 30, 2017, and $531.8 million at December 31, 2016. Pretax net gains of $639,000 on the sale of securities were realized in the fourth quarter of 2017, compared to gains of $102,000 in the third quarter of 2017 and losses of $193,000 in the fourth quarter of 2016. |
2
Net Interest Income
ANALYSIS OF AVERAGE BALANCES,
TAX EQUIVALENT INTEREST AND RATES
(Dollars in thousands - unaudited)
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| Quarters Ended | ||||||||||||||||||||||
| December 31, 2017 |
| September 30, 2017 |
| December 31, 2016 | ||||||||||||||||||
| Average |
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| Rate |
| Average |
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| Rate |
| Average |
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| Rate | |||
| Balance |
| Interest |
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| Balance |
| Interest |
| % |
| Balance |
| Interest |
| % | ||||||
Assets |
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Interest bearing deposits with financial institutions | $ | 13,147 |
| $ | 43 |
| 1.28 |
| $ | 11,685 |
| $ | 37 |
| 1.24 |
| $ | 54,865 |
| $ | 71 |
| 0.51 |
Securities: |
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Taxable |
| 281,096 |
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| 2,208 |
| 3.14 |
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| 327,892 |
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| 2,424 |
| 2.96 |
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| 495,687 |
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| 3,318 |
| 2.68 |
Non-taxable (TE) |
| 243,813 |
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| 2,694 |
| 4.42 |
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| 220,540 |
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| 2,504 |
| 4.54 |
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| 37,546 |
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| 404 |
| 4.30 |
Total securities |
| 524,909 |
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| 4,902 |
| 3.74 |
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| 548,432 |
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| 4,928 |
| 3.59 |
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| 533,233 |
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| 3,722 |
| 2.79 |
Dividends from FHLBC and FRBC |
| 8,842 |
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| 99 |
| 4.48 |
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| 8,339 |
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| 94 |
| 4.51 |
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| 7,911 |
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| 82 |
| 4.15 |
Loans and loans held-for-sale1 |
| 1,599,672 |
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| 18,585 |
| 4.55 |
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| 1,553,473 |
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| 18,265 |
| 4.60 |
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| 1,390,537 |
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| 16,485 |
| 4.64 |
Total interest earning assets |
| 2,146,570 |
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| 23,629 |
| 4.33 |
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| 2,121,929 |
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| 23,324 |
| 4.32 |
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| 1,986,546 |
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| 20,360 |
| 4.03 |
Cash and due from banks |
| 30,972 |
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| - |
| - |
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| 31,028 |
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| - |
| - |
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| 28,928 |
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| - |
| - |
Allowance for loan losses |
| (17,002) |
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| - |
| - |
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| (16,478) |
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| - |
| - |
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| (15,388) |
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| - |
| - |
Other noninterest bearing assets |
| 181,484 |
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| - |
| - |
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| 185,906 |
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| - |
| - |
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| 197,072 |
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| - |
| - |
Total assets | $ | 2,342,024 |
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| $ | 2,322,385 |
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| $ | 2,197,158 |
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Liabilities and Stockholders' Equity |
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NOW accounts | $ | 420,073 |
| $ | 108 |
| 0.10 |
| $ | 422,913 |
| $ | 108 |
| 0.10 |
| $ | 405,338 |
| $ | 97 |
| 0.10 |
Money market accounts |
| 277,883 |
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| 95 |
| 0.14 |
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| 273,440 |
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| 85 |
| 0.12 |
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| 274,423 |
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| 76 |
| 0.11 |
Savings accounts |
| 260,852 |
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| 52 |
| 0.08 |
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| 262,573 |
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| 46 |
| 0.07 |
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| 253,461 |
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| 39 |
| 0.06 |
Time deposits |
| 383,011 |
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| 1,146 |
| 1.19 |
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| 389,037 |
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| 1,077 |
| 1.10 |
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| 404,507 |
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| 1,018 |
| 1.00 |
Interest bearing deposits |
| 1,341,819 |
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| 1,401 |
| 0.41 |
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| 1,347,963 |
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| 1,316 |
| 0.39 |
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| 1,337,729 |
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| 1,230 |
| 0.37 |
Securities sold under repurchase agreements |
| 27,664 |
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| 7 |
| 0.10 |
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| 32,800 |
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| 4 |
| 0.05 |
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| 31,019 |
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| 1 |
| 0.01 |
Other short-term borrowings |
| 84,728 |
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| 269 |
| 1.24 |
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| 72,065 |
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| 220 |
| 1.19 |
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| 27,940 |
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| 36 |
| 0.50 |
Junior subordinated debentures |
| 57,633 |
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| 929 |
| 6.45 |
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| 57,621 |
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| 930 |
| 6.46 |
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| 57,585 |
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| 1,083 |
| 7.52 |
Senior notes |
| 44,046 |
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| 672 |
| 6.10 |
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| 44,021 |
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| 672 |
| 6.11 |
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| 8,155 |
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| 112 |
| 5.49 |
Subordinated debt |
| - |
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| - |
| - |
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| - |
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| - |
| - |
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| 36,685 |
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| 222 |
| 2.37 |
Notes payable and other borrowings |
| - |
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| - |
| - |
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| - |
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| - |
| - |
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| 408 |
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| 2 |
| 1.92 |
Total interest bearing liabilities |
| 1,555,890 |
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| 3,278 |
| 0.84 |
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| 1,554,470 |
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| 3,142 |
| 0.80 |
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| 1,499,521 |
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| 2,686 |
| 0.71 |
Noninterest bearing deposits |
| 556,010 |
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| - |
| - |
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| 551,768 |
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| - |
| - |
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| 510,161 |
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| - |
| - |
Other liabilities |
| 26,037 |
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| - |
| - |
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| 19,395 |
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| - |
| - |
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| 12,609 |
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| - |
| - |
Stockholders' equity |
| 204,087 |
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| - |
| - |
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| 196,752 |
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| - |
| - |
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| 174,867 |
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| - |
| - |
Total liabilities and stockholders' equity | $ | 2,342,024 |
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| $ | 2,322,385 |
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| $ | 2,197,158 |
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Net interest income (TE) |
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| $ | 20,351 |
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| $ | 20,182 |
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| $ | 17,674 |
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Net interest income (TE) |
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to total earning assets |
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| 3.76 |
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| 3.77 |
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| 3.54 |
Interest bearing liabilities to earning assets |
| 72.48 | % |
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| 73.26 | % |
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| 75.48 | % |
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1 Interest income from loans is shown on a tax equivalent basis as discussed in the table on page 14 and includes fees of $636,000, $772,000 and $731,000 for the fourth quarter of 2017, the third quarter of 2017 and the fourth quarter of 2016, respectively. Nonaccrual loans are included in the above stated average balances. Tax equivalent basis is calculated using a marginal tax rate of 35%. See the discussion entitled “Non-GAAP Presentations” below and the tables on page 14 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Tax equivalent net interest income was $20.4 million for the quarter ended December 31, 2017, which reflects growth of $169,000 compared to the third quarter of 2017, and growth of $2.7 million compared to the fourth quarter of 2016. Quarterly average earning assets increased $24.6 million from the third quarter of 2017 to $2.15 billion for the quarter ended December 31, 2017, while yield on earning assets increased 1 basis point over the same period. Average loan growth, including loans held-for-sale, was $46.2 million for the quarter ended December 31, 2017, as compared to the quarter ended September 30, 2017, while the year over year growth in fourth quarter average loans, including loans held-for-sale, was $209.1 million. This year over year growth was primarily due to organic loan growth over the last twelve months, driven by commercial portfolio originations, as well as a home equity loan portfolio purchase of $16.7 million. In addition, the Company’s acquisition of the Talmer branch in October 2016 added $221.0 million of purchased loans, which increased 2017’s average loans.
Growth in securities income in 2017 stemmed from repositioning the Company’s securities portfolio into higher yielding tax exempt securities, while lower yielding securities were sold or called. Deposit growth was utilized to fund the higher yielding securities purchases. These securities purchases, as well as a rising interest rate
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environment, drove a 15 basis point increase for total securities income in the fourth quarter of 2017, compared to the third quarter of 2017, and a 95 basis point increase from the like 2016 quarter.
The cost of interest bearing liabilities for the fourth quarter of 2017 increased by 4 basis points from the third quarter of 2017, and increased by 13 basis points from the fourth quarter of 2016. Total average deposits increased during the fourth quarter of 2017 compared to the third quarter of 2017, driven primarily by an increase in money market accounts, partially offset by decreases in NOW accounts, savings accounts and time deposits. This shift in deposits stems from growth in commercial loan relationships, which often result in an increase in commercial money market and checking accounts. Significant growth in demand deposits in the year over year period as compared to interest bearing deposits has resulted in the Company maintaining a lower cost of funds stemming from average total deposits. The slight increase in the overall cost of funds is due to higher balances of Federal Home Loan Bank Chicago (“FHLBC”) borrowings and the Company’s senior debt issuance.
For the quarter ended December 31, 2017, average other short-term borrowings, which are FHLBC advances, increased by $12.7 million compared to the quarter ended September 30, 2017, and by $56.8 million compared to the quarter ended December 31, 2016. The retirement of subordinated and senior debt due in 2018, and simultaneously offering of senior notes in the fourth quarter of 2016, which pay at a higher rate, resulted in an overall increase to the cost of funds in the year over year period. However, the growth in the yield on average earning assets more than offset this increase in the cost of funds, resulting in an overall increase of 22 basis points in the Company’s net interest margin in the year over year period.
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| 4th Quarter 2017 |
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Noninterest Income |
| Quarters Ended |
| Percent Change From |
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(dollars in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, |
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| 2017 |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
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Trust income |
| $ | 1,639 |
| $ | 1,468 |
| $ | 1,396 |
| 11.6 |
| 17.4 |
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Service charges on deposits |
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| 1,765 |
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| 1,722 |
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| 1,723 |
| 2.5 |
| 2.4 |
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Residential mortgage banking revenue |
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| 1,672 |
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| 1,547 |
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| 3,001 |
| 8.1 |
| (44.3) |
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Securities gain (loss), net |
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| 639 |
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| 102 |
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| (193) |
| 526.5 |
| 431.1 |
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Increase in cash surrender value of BOLI |
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| 361 |
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| 362 |
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| 296 |
| (0.3) |
| 22.0 |
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Debit card interchange income |
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| 1,069 |
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| 1,075 |
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| 1,018 |
| (0.6) |
| 5.0 |
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Other income |
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| 1,039 |
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| 1,567 |
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| 1,187 |
| (33.7) |
| (12.5) |
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Total noninterest income |
| $ | 8,184 |
| $ | 7,843 |
| $ | 8,428 |
| 4.3 |
| (2.9) |
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Of the noninterest income categories listed above, securities gain experienced the largest increases on both a linked quarter and year over year basis, as shown above. The Company realized gains in securities in the third and the fourth quarter of 2017, compared to losses in the fourth quarter of 2016. Losses recorded in the fourth quarter of 2016 reflect security portfolio sales to fund the Talmer branch acquisition. Residential mortgage banking revenue continued to be negatively impacted by the rising interest rate environment in 2017 resulting in a decline in origination volumes year over year. The decrease in other income as compared to the prior linked quarter is attributable to a decrease in commercial swap fee income in the fourth quarter of 2017.
4
Noninterest Expense
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| 4th Quarter 2017 |
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Noninterest Expense |
| Quarters Ended |
| Percent Change From |
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(dollars in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, |
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| 2017 |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
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Salaries |
| $ | 7,363 |
| $ | 7,704 |
| $ | 7,718 |
| (4.4) |
| (4.6) |
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Officers incentive |
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| 204 |
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| 1,114 |
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| 339 |
| (81.7) |
| (39.8) |
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Benefits and other |
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| 1,346 |
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| 1,231 |
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| 1,323 |
| 9.3 |
| 1.7 |
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Total salaries and employee benefits |
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| 8,913 |
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| 10,049 |
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| 9,380 |
| (11.3) |
| (5.0) |
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Occupancy, furniture and equipment expense |
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| 1,441 |
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| 1,482 |
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| 1,636 |
| (2.8) |
| (11.9) |
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Computer and data processing |
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| 1,104 |
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| 1,081 |
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| 1,256 |
| 2.1 |
| (12.1) |
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FDIC insurance |
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| 146 |
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| 199 |
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| 72 |
| (26.6) |
| 102.8 |
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General bank insurance |
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| 251 |
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| 246 |
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| 270 |
| 2.0 |
| (7.0) |
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Amortization of core deposit intangible asset |
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| 22 |
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| 24 |
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| 16 |
| (8.3) |
| 37.5 |
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Advertising expense |
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| 412 |
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| 255 |
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| 421 |
| 61.6 |
| (2.1) |
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Debit card interchange expense |
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| 296 |
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| 285 |
|
| 269 |
| 3.9 |
| 10.0 |
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Legal fees |
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| 200 |
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| 162 |
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| 206 |
| 23.5 |
| (2.9) |
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Other real estate owned expense, net |
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| 237 |
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| 680 |
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| 700 |
| (65.1) |
| (66.1) |
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Other expense |
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| 3,169 |
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| 2,455 |
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| 2,989 |
| 29.1 |
| 6.0 |
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Total noninterest expense |
| $ | 16,191 |
| $ | 16,918 |
| $ | 17,215 |
| (4.3) |
| (5.9) |
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Efficiency ratio (excluding nonrecurring item) |
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| 56.49 | % |
| 57.66 | % |
| 61.78 | % |
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Efficiency ratio (GAAP) |
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| 56.72 | % |
| 57.66 | % |
| 62.37 | % |
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The efficiency ratio shown in the table above is a non-GAAP financial measure calculated as noninterest expense, excluding OREO expenses, amortization of core deposits and acquisition related costs 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 includes a tax equivalent adjustment on the increase in cash surrender value of bank-owned life insurance. See the discussion entitled “Non-GAAP Presentations” below and the tables on page 14 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Noninterest expense for the fourth quarter of 2017 decreased $727,000, or 4.3%, on a linked quarter basis and decreased $1.0 million or 5.9%, year over year. The linked quarter decrease is primarily attributable to reductions in salaries and officer incentive expense as well as reduced OREO related costs as the OREO portfolio balance declined, partially offset by increased advertising expense. The year over year variance is primarily due to reductions in salaries, officer incentive and OREO related costs. Variability noted in other expense was partially due to costs on commercial loan remediation and appraisal fees.
Earning Assets
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| December 31, 2017 |
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Loans |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2017 |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| |||
Commercial |
| $ | 272,851 |
| $ | 257,356 |
| $ | 228,113 |
| 6.0 |
| 19.6 |
|
Leases |
|
| 68,325 |
|
| 69,305 |
|
| 55,451 |
| (1.4) |
| 23.2 |
|
Real estate - commercial |
|
| 750,991 |
|
| 739,136 |
|
| 736,247 |
| 1.6 |
| 2.0 |
|
Real estate - construction |
|
| 85,162 |
|
| 94,868 |
|
| 64,720 |
| (10.2) |
| 31.6 |
|
Real estate - residential |
|
| 426,230 |
|
| 419,583 |
|
| 377,851 |
| 1.6 |
| 12.8 |
|
Consumer |
|
| 2,774 |
|
| 2,770 |
|
| 3,237 |
| 0.1 |
| (14.3) |
|
Other1 |
|
| 10,609 |
|
| 10,550 |
|
| 11,973 |
| 0.6 |
| (11.4) |
|
|
|
| 1,616,942 |
|
| 1,593,568 |
|
| 1,477,592 |
| 1.5 |
| 9.4 |
|
Net deferred loan costs |
|
| 680 |
|
| 623 |
|
| 1,217 |
| 9.1 |
| (44.1) |
|
Total loans |
| $ | 1,617,622 |
| $ | 1,594,191 |
| $ | 1,478,809 |
| 1.5 |
| 9.4 |
|
1 Other class includes overdrafts.
5
Total loans increased by $23.4 million at the end of the fourth quarter of 2017 as compared to September 30, 2017, and increased by $138.8 million year over year. Year over year loan growth was primarily due to organic loan growth in commercial, real estate-construction and real estate-residential loans, growth in lease financing receivables, and the Company’s purchase of $16.7 million of home equity loans in the second quarter of 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, 2017 |
| ||
Securities |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2017 |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| |||
Securities available-for-sale, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury |
| $ | 3,947 |
| $ | 3,990 |
| $ | - |
| (1.1) |
| N/M |
|
U.S. government agencies |
|
| 13,061 |
|
| 13,451 |
|
| - |
| (2.9) |
| N/M |
|
U.S. government agency mortgage-backed |
|
| 12,214 |
|
| 11,030 |
|
| 41,534 |
| 10.7 |
| (70.6) |
|
States and political subdivisions |
|
| 278,092 |
|
| 229,032 |
|
| 68,703 |
| 21.4 |
| 304.8 |
|
Corporate bonds |
|
| 833 |
|
| 10,577 |
|
| 10,630 |
| (92.1) |
| (92.2) |
|
Collateralized mortgage obligations |
|
| 65,939 |
|
| 80,386 |
|
| 170,927 |
| (18.0) |
| (61.4) |
|
Asset-backed securities |
|
| 112,932 |
|
| 131,759 |
|
| 138,407 |
| (14.3) |
| (18.4) |
|
Collateralized loan obligations |
|
| 54,421 |
|
| 53,259 |
|
| 101,637 |
| 2.2 |
| (46.5) |
|
Total securities available-for-sale |
| $ | 541,439 |
| $ | 533,484 |
| $ | 531,838 |
| 1.5 |
| 1.8 |
|
N/M - Not Meaningful
The investment portfolio was $541.4 million as of December 31, 2017, an increase of $8.0 million from $533.5 million as of September 30, 2017, and an increase of $9.6 million from $531.8 million as of December 31, 2016. During the fourth quarter of 2016 and during the 2017 year to date period, select collateralized mortgage obligations, mortgage-backed securities, corporate bonds and asset-backed securities were liquidated to allow for portfolio repositioning in favor of high quality state and municipal securities. These sales resulted in $474,000 of net security gains in the year 2017, but the resultant security purchases with the funds from security sales and deposit growth impacted the net interest margin favorably as the funds were invested in higher yielding assets. In addition, there was a significant decline in collateralized loan obligations (“CLOs”) during 2017 due to calls of a number of issues held by the Company. This call activity occurred because the contractual spreads of the securities held in the portfolio were materially higher than those for newly-issued CLOs, which created a financial incentive for issuers to call existing CLO’s and re-use the underlying loan collateral for newly-created issues.
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| December 31, 2017 | ||
Nonperforming assets |
| As of |
| Percent Change From | |||||||||
(dollars in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, | |||
|
| 2017 |
| 2017 |
| 2016 |
| 2017 |
| 2016 | |||
Nonaccrual loans |
| $ | 14,388 |
| $ | 14,124 |
| $ | 15,283 |
| 1.9 |
| (5.9) |
Nonperforming troubled debt restructured loans accruing interest |
|
| 988 |
|
| 978 |
|
| 718 |
| 1.0 |
| 37.6 |
Loans past due 90 days or more and still accruing interest |
|
| 248 |
|
| 1,169 |
|
| - |
| (78.8) |
| N/M |
Total nonperforming loans |
|
| 15,624 |
|
| 16,271 |
|
| 16,001 |
| (4.0) |
| (2.4) |
Other real estate owned |
|
| 8,371 |
|
| 9,024 |
|
| 11,916 |
| (7.2) |
| (29.7) |
Total nonperforming assets |
| $ | 23,995 |
| $ | 25,295 |
| $ | 27,917 |
| (5.1) |
| (14.0) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-89 days past due loans |
| $ | 5,358 |
| $ | 3,297 |
| $ | 5,139 |
|
|
|
|
Nonaccrual loans to total loans |
|
| 0.9 | % |
| 0.9 | % |
| 1.0 | % |
|
|
|
Nonperforming loans to total loans |
|
| 1.0 | % |
| 1.0 | % |
| 1.1 | % |
|
|
|
Nonperforming assets to total loans plus OREO |
|
| 1.5 | % |
| 1.6 | % |
| 1.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
| $ | 17,461 |
| $ | 16,465 |
| $ | 16,158 |
|
|
|
|
Allowance for loan losses to total loans |
|
| 1.1 | % |
| 1.0 | % |
| 1.1 | % |
|
|
|
Allowance for loan losses to nonaccrual loans |
|
| 121.4 | % |
| 116.6 | % |
| 105.7 | % |
|
|
|
N/M - Not Meaningful
6
Nonperforming loans consist of nonaccrual loans, nonperforming restructured accruing loans and loans 90 days or more past due but still accruing interest. Nonperforming loans to total loans of 1.0% remained unchanged in the fourth and third quarter of 2017 and decreased from 1.1% in the fourth quarter of 2016, primarily due to the transfer of certain nonaccrual loans to OREO in 2017. Nonperforming assets to total loans plus OREO decreased to 1.5% from 1.6% in the third quarter of 2017, and 1.9% in the fourth quarter of 2016, as a result of the Talmer branch purchase, as well as continued OREO liquidations and write-downs recorded in 2016 and 2017. Finally, the allowance for loan losses to total loans was 1.1% as of December 31, 2017, which is unchanged from the fourth quarter 2016, and a 0.1% increase compared to the third quarter of 2017. The allowance excludes the remaining $527,000 of purchase accounting credit marks recorded on the Talmer branch purchased loans as of December 31, 2017. The total remaining accretable discount on the Talmer portfolio was $835,000 at year end compared to $1.05 million at the prior quarter end.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, 2017 |
| ||
Classified loans |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| December 31, |
| September 30, |
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2017 |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| |||
Real estate-construction |
| $ | 376 |
| $ | 380 |
| $ | 458 |
| (1.1) |
| (17.9) |
|
Real estate-residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor |
|
| 448 |
|
| 648 |
|
| 1,096 |
| (30.9) |
| (59.1) |
|
Multifamily |
|
| 4,723 |
|
| 4,757 |
|
| - |
| (0.7) |
| N/M |
|
Owner occupied |
|
| 5,266 |
|
| 4,418 |
|
| 7,225 |
| 19.2 |
| (27.1) |
|
Revolving and junior liens |
|
| 1,899 |
|
| 1,977 |
|
| 2,340 |
| (3.9) |
| (18.8) |
|
Real estate-commercial, nonfarm |
|
| 7,262 |
|
| 7,633 |
|
| 9,946 |
| (4.9) |
| (27.0) |
|
Real estate-commercial, farm |
|
| 2,486 |
|
| 2,495 |
|
| 1,782 |
| (0.4) |
| 39.5 |
|
Commercial |
|
| - |
|
| 382 |
|
| 2,527 |
| N/M |
| N/M |
|
Leases |
|
| 825 |
|
| 1,031 |
|
| 1,109 |
| (20.0) |
| (25.6) |
|
Consumer |
|
| 20 |
|
| 8 |
|
| 1 |
| 150.0 |
| N/M |
|
Total classified loans |
| $ | 23,305 |
| $ | 23,729 |
| $ | 26,484 |
| (1.8) |
| (12.0) |
|
N/M - Not Meaningful
Classified loans include nonaccrual, performing troubled debt restructurings and all other loans considered substandard, as shown above. Classified loans totaled $23.3 million as of December 31, 2017, a decrease of $424,000, or 1.8%, from the prior quarter, and a decrease of $3.2 million, or 12.0%, from the like quarter of 2016. This reduction is primarily due to success in remediating a number of classified loans.
7
Net Charge-off Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan Charge-offs, net of recoveries | Quarters Ended | |||||||||||||
(dollars in thousands) | December 31, |
| % of |
| September 30, |
| % of |
| December 31, |
| % of | |||
| 2017 |
| Total1 |
| 2017 |
| Total1 |
| 2016 |
| Total1 | |||
Real estate-construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilder | $ | (93) |
| 37.8 |
| $ | - |
| - |
| $ | (5) |
| 1.2 |
Land |
| (1) |
| 0.4 |
|
| - |
| - |
|
| - |
| - |
All other |
| (194) |
| 78.9 |
|
| 8 |
| (2.4) |
|
| (6) |
| 1.4 |
Total real estate-construction |
| (288) |
| 117.1 |
|
| 8 |
| (2.4) |
|
| (11) |
| 2.6 |
Real estate-residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor |
| 64 |
| (26.0) |
|
| (28) |
| 8.5 |
|
| 106 |
| (24.9) |
Multifamily |
| (13) |
| 5.3 |
|
| (17) |
| 5.2 |
|
| (15) |
| 3.5 |
Owner occupied |
| 18 |
| (7.3) |
|
| (40) |
| 12.2 |
|
| (58) |
| 13.6 |
Revolving and junior liens |
| (30) |
| 12.2 |
|
| (367) |
| 111.5 |
|
| (231) |
| 54.4 |
Total real estate-residential |
| 39 |
| (15.8) |
|
| (452) |
| 137.4 |
|
| (198) |
| 46.6 |
Real estate-commercial, nonfarm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner general purpose |
| - |
| - |
|
| - |
| - |
|
| (1) |
| 0.2 |
Owner special purpose |
| - |
| - |
|
| - |
| - |
|
| (5) |
| 1.2 |
Non-owner general purpose |
| (37) |
| 15.0 |
|
| (43) |
| 13.1 |
|
| 56 |
| (13.2) |
Non-owner special purpose |
| - |
| - |
|
| - |
| - |
|
| - |
| - |
Retail properties |
| 9 |
| (3.7) |
|
| 22 |
| (6.8) |
|
| (286) |
| 67.3 |
Total real estate-commercial, nonfarm |
| (28) |
| 11.3 |
|
| (21) |
| 6.3 |
|
| (236) |
| 55.5 |
Commercial |
| (12) |
| 4.9 |
|
| 7 |
| (2.1) |
|
| (10) |
| 2.4 |
Leases |
| - |
| - |
|
| 98 |
| (29.8) |
|
| 5 |
| (1.2) |
Consumer |
| 47 |
| (19.1) |
|
| 37 |
| (11.2) |
|
| 25 |
| (5.9) |
Other |
| (4) |
| 1.6 |
|
| (6) |
| 1.8 |
|
| - |
| - |
Net (recoveries) / charge-offs | $ | (246) |
| 100.0 |
| $ | (329) |
| 100.0 |
| $ | (425) |
| 100.0 |
1 Represents the percentage of net charge-offs attributable to each category of loans.
Gross charge-offs were $308,000 for the quarter ended December 31, 2017, compared to $241,000 for the quarter ended September 30, 2017, and $682,000 for the quarter ended December 31, 2016. Gross recoveries were $554,000 for the quarter ended December 31, 2017, compared to $570,000 for the quarter ended September 30, 2017 and $1.1 million for the like quarter of 2016. Continued recoveries are indicative of the ongoing aggressive efforts by management to effectively manage and resolve prior charge-offs.
Deposits
Total deposits were $1.92 billion at December 31, 2017, which reflects an increase of $33.8 million compared to September 30, 2017, and an increase of $56.1 million from total deposits of $1.87 billion at December 31, 2016. Demand deposits increased by $15.5 million and money markets, savings, and NOW accounts also increased by $19.8 million for the quarter, while time deposit balances decreased by $1.5 million. Total time deposits or certificates of deposit reflected a decrease of $19.5 million for the full year 2017. Growth in the commercial loan portfolio has driven commercial demand deposits to a higher level in the fourth quarter of 2017.
Borrowings
As of December 31, 2017, the Bank had $115.0 million in FHLBC advances outstanding as compared to $70.0 million in FHLBC advances at December 31, 2016.
The Company is indebted on senior notes totaling $44.0 million, net of deferred issuance costs, as of December 31, 2017. The Company is also indebted on $57.6 million, net of deferred issuance costs, of junior subordinated debentures, which are related to the trust preferred securities issued by its two statutory trust subsidiaries, Old Second Capital Trust I and Old Second Capital Trust II. The Trust II issuance converted from fixed to floating rate at three month LIBOR plus 150 basis points on June 15, 2017. Upon conversion to a floating rate, a cash flow hedge was initiated which resulted in the total interest rate paid on the debt of 4.30% for the fourth quarter 2017, inclusive of debt issuance costs. This compared to the Trust II issuance rate paid prior to June 15, 2017, of 6.77%.
8
Non-GAAP Presentations: Management has disclosed in this earnings release certain non-GAAP financial measures to evaluate and measure the Company’s performance, including earning per share, net interest margin, and efficiency ratio calculations. Management believes the earnings per share data is more informative for the user if the per share impact of certain nonrecurring activity is excluded for quarterly comparative purposes. 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 has disclosed the efficiency ratio including and excluding certain nonrecurring items, which is discussed in the noninterest expense presentation on page 5. These non-GAAP financial measures should not be considered as a substitute for GAAP financial measures, and we strongly encourage investors to review the GAAP financial measures included in this earnings release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this earnings release with other companies’ non-GAAP financial measures having the same or similar names. The tables on page 14 provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Forward-Looking Statements: This earnings release contains forward-looking statements. Forward looking statements can be identified by words such as “anticipated,” “expects,” “intends,” “believes,” “may,” “likely,” “will” or other that indicate future periods. Examples of forward-looking statements include, but are not limited to, statements relating to the expected timing of the closing of the Greater Chicago Financial Corp. transaction. Such forward-looking statements are subject to risks, uncertainties, and other factors, including a downturn in the economy, particularly in the Company’s markets, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate values, regulatory changes and excessive loan losses, the inability to obtain the requisite regulatory approvals and Greater Chicago Financial Corp. shareholder approval for the proposed transaction and meet other closing terms and conditions, as well as additional risks and uncertainties contained in the “Risk Factors” and forward-looking statements disclosure contained in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, any or all of which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that future events, plans, or expectations contemplated by the Company will be achieved. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Conference Call
The Company will host an earnings call on Thursday, January 25, 2018, 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 1, 2018, by dialing 877-481-4010, using Conference ID: 23230.
9
Old Second Bancorp, Inc. and Subsidiaries
(In thousands)
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
| |
|
| December 31, |
| December 31, | ||
|
| 2017 |
| 2016 | ||
Assets |
|
|
|
|
|
|
Cash and due from banks |
| $ | 37,444 |
| $ | 33,805 |
Interest bearing deposits with financial institutions |
|
| 18,389 |
|
| 13,529 |
Cash and cash equivalents |
|
| 55,833 |
|
| 47,334 |
Securities available-for-sale, at fair value |
|
| 541,439 |
|
| 531,838 |
Federal Home Loan Bank Chicago ("FHLBC") and Federal Reserve Bank Chicago ("FRBC") stock |
|
| 10,168 |
|
| 7,918 |
Loans held-for-sale |
|
| 4,067 |
|
| 4,918 |
Loans |
|
| 1,617,622 |
|
| 1,478,809 |
Less: allowance for loan losses |
|
| 17,461 |
|
| 16,158 |
Net loans |
|
| 1,600,161 |
|
| 1,462,651 |
Premises and equipment, net |
|
| 37,628 |
|
| 38,977 |
Other real estate owned |
|
| 8,371 |
|
| 11,916 |
Mortgage servicing rights, net |
|
| 6,944 |
|
| 6,489 |
Goodwill and core deposit intangible |
|
| 8,922 |
|
| 9,018 |
Bank-owned life insurance ("BOLI") |
|
| 61,764 |
|
| 60,332 |
Deferred tax assets, net |
|
| 25,356 |
|
| 53,464 |
Other assets |
|
| 22,776 |
|
| 16,333 |
Total assets |
| $ | 2,383,429 |
| $ | 2,251,188 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 572,404 |
| $ | 513,688 |
Interest bearing: |
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 967,750 |
|
| 950,849 |
Time |
|
| 382,771 |
|
| 402,248 |
Total deposits |
|
| 1,922,925 |
|
| 1,866,785 |
Securities sold under repurchase agreements |
|
| 29,918 |
|
| 25,715 |
Other short-term borrowings |
|
| 115,000 |
|
| 70,000 |
Junior subordinated debentures |
|
| 57,639 |
|
| 57,591 |
Senior notes |
|
| 44,058 |
|
| 43,998 |
Other liabilities |
|
| 13,539 |
|
| 11,889 |
Total liabilities |
|
| 2,183,079 |
|
| 2,075,978 |
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
Common stock |
|
| 34,626 |
|
| 34,534 |
Additional paid-in capital |
|
| 117,742 |
|
| 116,653 |
Retained earnings |
|
| 142,959 |
|
| 129,005 |
Accumulated other comprehensive loss |
|
| 1,479 |
|
| (8,762) |
Treasury stock |
|
| (96,456) |
|
| (96,220) |
Total stockholders’ equity |
|
| 200,350 |
|
| 175,210 |
Total liabilities and stockholders’ equity |
| $ | 2,383,429 |
| $ | 2,251,188 |
10
Old Second Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| (unaudited) |
| ||||||||
|
| Quarters Ended December 31, |
| Year Ended December 31, | |||||||||
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 18,535 |
| $ | 16,426 |
| $ | 70,737 |
| $ | 56,019 |
|
Loans held-for-sale |
|
| 28 |
|
| 36 |
|
| 123 |
|
| 151 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
| 2,208 |
|
| 3,318 |
|
| 10,202 |
|
| 15,865 |
|
Tax exempt |
|
| 1,751 |
|
| 263 |
|
| 5,939 |
|
| 842 |
|
Dividends from FHLBC and FRBC stock |
|
| 99 |
|
| 82 |
|
| 370 |
|
| 333 |
|
Interest bearing deposits with financial institutions |
|
| 43 |
|
| 71 |
|
| 134 |
|
| 169 |
|
Total interest and dividend income |
|
| 22,664 |
|
| 20,196 |
|
| 87,505 |
|
| 73,379 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 255 |
|
| 212 |
|
| 950 |
|
| 789 |
|
Time deposits |
|
| 1,146 |
|
| 1,018 |
|
| 4,227 |
|
| 3,640 |
|
Other short-term borrowings |
|
| 276 |
|
| 37 |
|
| 758 |
|
| 106 |
|
Junior subordinated debentures |
|
| 929 |
|
| 1,083 |
|
| 4,002 |
|
| 4,334 |
|
Senior notes |
|
| 672 |
|
| 112 |
|
| 2,689 |
|
| 112 |
|
Subordinated debt |
|
| - |
|
| 222 |
|
| - |
|
| 949 |
|
Notes payable and other borrowings |
|
| - |
|
| 2 |
|
| - |
|
| 8 |
|
Total interest expense |
|
| 3,278 |
|
| 2,686 |
|
| 12,626 |
|
| 9,938 |
|
Net interest and dividend income |
|
| 19,386 |
|
| 17,510 |
|
| 74,879 |
|
| 63,441 |
|
Provision for loan losses |
|
| 750 |
|
| 750 |
|
| 1,800 |
|
| 750 |
|
Net interest and dividend income after provision for loan losses |
|
| 18,636 |
|
| 16,760 |
|
| 73,079 |
|
| 62,691 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust income |
|
| 1,639 |
|
| 1,396 |
|
| 6,203 |
|
| 5,670 |
|
Service charges on deposits |
|
| 1,765 |
|
| 1,723 |
|
| 6,720 |
|
| 6,684 |
|
Secondary mortgage fees |
|
| 182 |
|
| 243 |
|
| 776 |
|
| 1,038 |
|
Mortgage servicing rights mark to market (loss) gain |
|
| (46) |
|
| 1,002 |
|
| (802) |
|
| (919) |
|
Mortgage servicing income |
|
| 448 |
|
| 444 |
|
| 1,778 |
|
| 1,724 |
|
Net gain on sales of mortgage loans |
|
| 1,088 |
|
| 1,312 |
|
| 4,803 |
|
| 6,343 |
|
Securities gain (loss), net |
|
| 639 |
|
| (193) |
|
| 474 |
|
| (2,213) |
|
Increase in cash surrender value of BOLI |
|
| 361 |
|
| 296 |
|
| 1,432 |
|
| 1,283 |
|
Debit card interchange income |
|
| 1,069 |
|
| 1,018 |
|
| 4,200 |
|
| 4,027 |
|
Gain (loss) on disposal and transfer of fixed assets, net |
|
| - |
|
| - |
|
| 10 |
|
| (1) |
|
Other income |
|
| 1,039 |
|
| 1,187 |
|
| 4,778 |
|
| 4,938 |
|
Total noninterest income |
|
| 8,184 |
|
| 8,428 |
|
| 30,372 |
|
| 28,574 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 8,913 |
|
| 9,380 |
|
| 40,080 |
|
| 36,234 |
|
Occupancy, furniture and equipment |
|
| 1,441 |
|
| 1,636 |
|
| 5,951 |
|
| 6,063 |
|
Computer and data processing |
|
| 1,104 |
|
| 1,256 |
|
| 4,387 |
|
| 4,349 |
|
FDIC insurance |
|
| 146 |
|
| 72 |
|
| 658 |
|
| 865 |
|
General bank insurance |
|
| 251 |
|
| 270 |
|
| 1,031 |
|
| 1,109 |
|
Amortization of core deposit intangible |
|
| 22 |
|
| 16 |
|
| 96 |
|
| 16 |
|
Advertising expense |
|
| 412 |
|
| 421 |
|
| 1,505 |
|
| 1,633 |
|
Debit card interchange expense |
|
| 296 |
|
| 269 |
|
| 1,329 |
|
| 1,455 |
|
Legal fees |
|
| 200 |
|
| 206 |
|
| 650 |
|
| 800 |
|
Other real estate expense, net |
|
| 237 |
|
| 700 |
|
| 2,165 |
|
| 2,743 |
|
Other expense |
|
| 3,169 |
|
| 2,989 |
|
| 11,297 |
|
| 11,494 |
|
Total noninterest expense |
|
| 16,191 |
|
| 17,215 |
|
| 69,149 |
|
| 66,761 |
|
Income before income taxes |
|
| 10,629 |
|
| 7,973 |
|
| 34,302 |
|
| 24,504 |
|
Provision for income taxes |
|
| 13,141 |
|
| 2,955 |
|
| 19,164 |
|
| 8,820 |
|
Net (loss) income |
| $ | (2,512) |
| $ | 5,018 |
| $ | 15,138 |
| $ | 15,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share |
| $ | (0.08) |
| $ | 0.17 |
| $ | 0.51 |
| $ | 0.53 |
|
Diluted (loss) earnings per share |
|
| (0.08) |
|
| 0.17 |
|
| 0.50 |
|
| 0.53 |
|
|
|
|
|
|
|
|
|
|
Ending common shares outstanding |
| 29,627,086 |
| 29,556,216 |
| 29,627,086 |
| 29,556,216 |
Weighted-average basic shares outstanding |
| 29,627,086 |
| 29,555,482 |
| 29,600,702 |
| 29,532,510 |
Weighted-average diluted shares outstanding |
| 30,094,960 |
| 29,870,978 |
| 30,038,417 |
| 29,838,931 |
11
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Average Balance
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2016 |
| 2017 |
|
|
| ||||||||||||||||
Assets |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr | ||||||||
Cash and due from banks |
| $ | 27,813 |
| $ | 28,597 |
| $ | 41,344 |
| $ | 28,928 |
| $ | 33,585 |
| $ | 39,425 |
| $ | 31,028 |
| $ | 30,972 |
Interest bearing deposits with financial institutions |
|
| 15,513 |
|
| 12,048 |
|
| 50,054 |
|
| 54,865 |
|
| 12,121 |
|
| 11,938 |
|
| 11,685 |
|
| 13,147 |
Cash and cash equivalents |
|
| 43,326 |
|
| 40,645 |
|
| 91,398 |
|
| 83,793 |
|
| 45,706 |
|
| 51,363 |
|
| 42,713 |
|
| 44,119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
| 486,924 |
|
| 684,179 |
|
| 659,890 |
|
| 533,233 |
|
| 563,897 |
|
| 586,686 |
|
| 548,432 |
|
| 524,909 |
Securities held-to-maturity, at amortized cost |
|
| 246,772 |
|
| 80,899 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
FHLBC and FRBC stock |
|
| 8,518 |
|
| 7,431 |
|
| 7,918 |
|
| 7,911 |
|
| 7,614 |
|
| 7,699 |
|
| 8,339 |
|
| 8,842 |
Loans held-for-sale |
|
| 2,912 |
|
| 4,238 |
|
| 5,295 |
|
| 4,050 |
|
| 2,670 |
|
| 3,616 |
|
| 3,244 |
|
| 2,744 |
Loans |
|
| 1,138,985 |
|
| 1,145,892 |
|
| 1,186,279 |
|
| 1,386,487 |
|
| 1,484,556 |
|
| 1,505,572 |
|
| 1,550,229 |
|
| 1,596,928 |
Less: allowance for loan losses |
|
| 16,257 |
|
| 16,415 |
|
| 15,767 |
|
| 15,388 |
|
| 16,292 |
|
| 15,779 |
|
| 16,478 |
|
| 17,002 |
Net loans |
|
| 1,122,728 |
|
| 1,129,477 |
|
| 1,170,512 |
|
| 1,371,099 |
|
| 1,468,264 |
|
| 1,489,793 |
|
| 1,533,751 |
|
| 1,579,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment, net |
|
| 39,416 |
|
| 39,143 |
|
| 39,191 |
|
| 39,129 |
|
| 38,917 |
|
| 38,395 |
|
| 38,098 |
|
| 37,825 |
Other real estate owned |
|
| 18,760 |
|
| 16,906 |
|
| 14,888 |
|
| 14,008 |
|
| 13,464 |
|
| 12,596 |
|
| 10,688 |
|
| 8,601 |
Mortgage servicing rights, net |
|
| 5,347 |
|
| 5,151 |
|
| 4,822 |
|
| 5,618 |
|
| 6,543 |
|
| 6,464 |
|
| 6,464 |
|
| 6,821 |
Goodwill and core deposit intangible |
|
| - |
|
| - |
|
| - |
|
| 3,195 |
|
| 9,005 |
|
| 8,981 |
|
| 8,956 |
|
| 8,932 |
Bank-owned life insurance ("BOLI") |
|
| 59,178 |
|
| 59,459 |
|
| 59,787 |
|
| 60,153 |
|
| 60,446 |
|
| 60,806 |
|
| 61,165 |
|
| 61,527 |
Deferred tax assets, net |
|
| 65,210 |
|
| 61,768 |
|
| 57,692 |
|
| 55,902 |
|
| 52,747 |
|
| 48,459 |
|
| 45,635 |
|
| 41,335 |
Other assets |
|
| 9,346 |
|
| 10,469 |
|
| 13,833 |
|
| 19,067 |
|
| 11,714 |
|
| 14,227 |
|
| 14,900 |
|
| 16,443 |
Total other assets |
|
| 197,257 |
|
| 192,896 |
|
| 190,213 |
|
| 197,072 |
|
| 192,836 |
|
| 189,928 |
|
| 185,906 |
|
| 181,484 |
Total assets |
| $ | 2,108,437 |
| $ | 2,139,765 |
| $ | 2,125,226 |
| $ | 2,197,158 |
| $ | 2,280,987 |
| $ | 2,329,085 |
| $ | 2,322,385 |
| $ | 2,342,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 450,150 |
| $ | 472,450 |
| $ | 472,599 |
| $ | 510,161 |
| $ | 525,454 |
| $ | 557,265 |
| $ | 551,768 |
| $ | 556,010 |
Interest bearing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 915,924 |
|
| 920,389 |
|
| 907,531 |
|
| 933,222 |
|
| 969,609 |
|
| 977,796 |
|
| 958,926 |
|
| 958,808 |
Time |
|
| 407,743 |
|
| 402,912 |
|
| 401,999 |
|
| 404,507 |
|
| 394,388 |
|
| 392,779 |
|
| 389,037 |
|
| 383,011 |
Total deposits |
|
| 1,773,817 |
|
| 1,795,751 |
|
| 1,782,129 |
|
| 1,847,890 |
|
| 1,889,451 |
|
| 1,927,840 |
|
| 1,899,731 |
|
| 1,897,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under repurchase agreements |
|
| 35,776 |
|
| 37,433 |
|
| 31,892 |
|
| 31,019 |
|
| 29,805 |
|
| 35,652 |
|
| 32,800 |
|
| 27,664 |
Other short-term borrowings |
|
| 27,802 |
|
| 28,187 |
|
| 22,174 |
|
| 27,940 |
|
| 56,111 |
|
| 58,572 |
|
| 72,065 |
|
| 84,728 |
Junior subordinated debentures |
|
| 57,549 |
|
| 57,561 |
|
| 57,573 |
|
| 57,585 |
|
| 57,597 |
|
| 57,609 |
|
| 57,621 |
|
| 57,633 |
Senior Notes |
|
| - |
|
| - |
|
| - |
|
| 8,155 |
|
| 43,978 |
|
| 43,995 |
|
| 44,021 |
|
| 44,046 |
Subordinated debt |
|
| 45,000 |
|
| 45,000 |
|
| 45,000 |
|
| 36,685 |
|
| - |
|
| - |
|
| - |
|
| - |
Notes payable and other borrowings |
|
| 500 |
|
| 500 |
|
| 500 |
|
| 408 |
|
| - |
|
| - |
|
| - |
|
| - |
Other liabilities |
|
| 11,033 |
|
| 12,511 |
|
| 15,539 |
|
| 12,609 |
|
| 25,061 |
|
| 18,047 |
|
| 19,395 |
|
| 26,037 |
Total liabilities |
|
| 1,951,477 |
|
| 1,976,943 |
|
| 1,954,807 |
|
| 2,022,291 |
|
| 2,102,003 |
|
| 2,141,715 |
|
| 2,125,633 |
|
| 2,137,937 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
| 34,427 |
|
| 34,505 |
|
| 34,533 |
|
| 34,533 |
|
| 34,451 |
|
| 34,577 |
|
| 34,626 |
|
| 34,626 |
Additional paid-in capital |
|
| 115,945 |
|
| 116,065 |
|
| 116,365 |
|
| 116,537 |
|
| 116,747 |
|
| 117,077 |
|
| 117,340 |
|
| 117,607 |
Retained earnings |
|
| 116,231 |
|
| 119,640 |
|
| 123,771 |
|
| 128,017 |
|
| 131,631 |
|
| 136,384 |
|
| 142,657 |
|
| 148,863 |
Accumulated other comprehensive loss |
|
| (13,677) |
|
| (11,241) |
|
| (8,030) |
|
| (8,000) |
|
| (7,692) |
|
| (4,310) |
|
| (1,415) |
|
| (553) |
Treasury stock |
|
| (95,966) |
|
| (96,147) |
|
| (96,220) |
|
| (96,220) |
|
| (96,243) |
|
| (96,358) |
|
| (96,456) |
|
| (96,456) |
Total stockholders' equity |
|
| 156,960 |
|
| 162,822 |
|
| 170,419 |
|
| 174,867 |
|
| 178,894 |
|
| 187,370 |
|
| 196,752 |
|
| 204,087 |
Total liabilities and stockholders' equity |
| $ | 2,108,437 |
| $ | 2,139,765 |
| $ | 2,125,226 |
| $ | 2,197,158 |
| $ | 2,280,897 |
| $ | 2,329,085 |
| $ | 2,322,385 |
| $ | 2,342,024 |
12
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2016 |
| 2017 | ||||||||||||||||||||
|
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr | ||||||||
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 13,058 |
| $ | 13,039 |
| $ | 13,496 |
| $ | 16,426 |
| $ | 16,609 |
| $ | 17,385 |
| $ | 18,208 |
| $ | 18,535 |
Loans held-for-sale |
|
| 28 |
|
| 39 |
|
| 48 |
|
| 36 |
|
| 24 |
|
| 37 |
|
| 34 |
|
| 28 |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
| 4,211 |
|
| 4,382 |
|
| 3,954 |
|
| 3,318 |
|
| 2,963 |
|
| 2,607 |
|
| 2,424 |
|
| 2,208 |
Tax exempt |
|
| 179 |
|
| 220 |
|
| 180 |
|
| 263 |
|
| 912 |
|
| 1,648 |
|
| 1,628 |
|
| 1,751 |
Dividends from FHLB and FRBC stock |
|
| 84 |
|
| 84 |
|
| 83 |
|
| 82 |
|
| 85 |
|
| 92 |
|
| 94 |
|
| 99 |
Interest bearing deposits with financial institutions |
|
| 19 |
|
| 15 |
|
| 64 |
|
| 71 |
|
| 23 |
|
| 31 |
|
| 37 |
|
| 43 |
Total interest and dividend income |
|
| 17,579 |
|
| 17,779 |
|
| 17,825 |
|
| 20,196 |
|
| 20,616 |
|
| 21,800 |
|
| 22,425 |
|
| 22,664 |
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 191 |
|
| 193 |
|
| 193 |
|
| 212 |
|
| 223 |
|
| 233 |
|
| 239 |
|
| 255 |
Time deposits |
|
| 822 |
|
| 869 |
|
| 931 |
|
| 1,018 |
|
| 979 |
|
| 1,025 |
|
| 1,077 |
|
| 1,146 |
Other short-term borrowings |
|
| 20 |
|
| 26 |
|
| 23 |
|
| 37 |
|
| 108 |
|
| 150 |
|
| 224 |
|
| 276 |
Junior subordinated debentures |
|
| 1,084 |
|
| 1,083 |
|
| 1,084 |
|
| 1,083 |
|
| 1,084 |
|
| 1,059 |
|
| 930 |
|
| 929 |
Senior notes |
|
| - |
|
| - |
|
| - |
|
| 112 |
|
| 673 |
|
| 672 |
|
| 672 |
|
| 672 |
Subordinated debt |
|
| 239 |
|
| 243 |
|
| 245 |
|
| 222 |
|
| - |
|
| - |
|
| - |
|
| - |
Notes payable and other borrowings |
|
| 2 |
|
| 2 |
|
| 2 |
|
| 2 |
|
| - |
|
| - |
|
| - |
|
| - |
Total interest expense |
|
| 2,358 |
|
| 2,416 |
|
| 2,478 |
|
| 2,686 |
|
| 3,067 |
|
| 3,139 |
|
| 3,142 |
|
| 3,278 |
Net interest and dividend income |
|
| 15,221 |
|
| 15,363 |
|
| 15,347 |
|
| 17,510 |
|
| 17,549 |
|
| 18,661 |
|
| 19,283 |
|
| 19,386 |
Provision for loan losses |
|
| - |
|
| - |
|
| - |
|
| 750 |
|
| - |
|
| 750 |
|
| 300 |
|
| 750 |
Net interest and dividend income after reserve for loan losses |
|
| 15,221 |
|
| 15,363 |
|
| 15,347 |
|
| 16,760 |
|
| 17,549 |
|
| 17,911 |
|
| 18,983 |
|
| 18,636 |
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust income |
|
| 1,369 |
|
| 1,502 |
|
| 1,403 |
|
| 1,396 |
|
| 1,458 |
|
| 1,638 |
|
| 1,468 |
|
| 1,639 |
Service charges on deposits |
|
| 1,559 |
|
| 1,646 |
|
| 1,756 |
|
| 1,723 |
|
| 1,618 |
|
| 1,615 |
|
| 1,722 |
|
| 1,765 |
Secondary mortgage fees |
|
| 193 |
|
| 280 |
|
| 322 |
|
| 243 |
|
| 176 |
|
| 223 |
|
| 195 |
|
| 182 |
Mortgage servicing rights mark to market (loss) gain |
|
| (1,041) |
|
| (733) |
|
| (147) |
|
| 1,002 |
|
| (133) |
|
| (429) |
|
| (194) |
|
| (46) |
Mortgage servicing income |
|
| 421 |
|
| 422 |
|
| 437 |
|
| 444 |
|
| 435 |
|
| 444 |
|
| 451 |
|
| 448 |
Net gain on sales of mortgage loans |
|
| 1,212 |
|
| 1,642 |
|
| 2,177 |
|
| 1,312 |
|
| 1,147 |
|
| 1,473 |
|
| 1,095 |
|
| 1,088 |
Securities (loss) gain, net |
|
| (61) |
|
| - |
|
| (1,959) |
|
| (193) |
|
| (136) |
|
| (131) |
|
| 102 |
|
| 639 |
Increase in cash surrender value of BOLI |
|
| 285 |
|
| 319 |
|
| 383 |
|
| 296 |
|
| 359 |
|
| 350 |
|
| 362 |
|
| 361 |
Debit card interchange income |
|
| 947 |
|
| 1,049 |
|
| 1,013 |
|
| 1,018 |
|
| 975 |
|
| 1,081 |
|
| 1,075 |
|
| 1,069 |
(Loss) gain on disposal and transfer of fixed assets |
|
| (1) |
|
| - |
|
| - |
|
| - |
|
| (2) |
|
| 12 |
|
| - |
|
| - |
Other income |
|
| 1,392 |
|
| 1,150 |
|
| 1,209 |
|
| 1,187 |
|
| 1,131 |
|
| 1,041 |
|
| 1,567 |
|
| 1,039 |
Total noninterest income |
|
| 6,275 |
|
| 7,277 |
|
| 6,594 |
|
| 8,428 |
|
| 7,028 |
|
| 7,317 |
|
| 7,843 |
|
| 8,184 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 9,026 |
|
| 8,814 |
|
| 9,014 |
|
| 9,380 |
|
| 10,573 |
|
| 10,545 |
|
| 10,049 |
|
| 8,913 |
Occupancy, furniture and equipment |
|
| 1,581 |
|
| 1,346 |
|
| 1,500 |
|
| 1,636 |
|
| 1,566 |
|
| 1,462 |
|
| 1,482 |
|
| 1,441 |
Computer and data processing |
|
| 925 |
|
| 1,063 |
|
| 1,105 |
|
| 1,256 |
|
| 1,090 |
|
| 1,112 |
|
| 1,081 |
|
| 1,104 |
FDIC insurance |
|
| 203 |
|
| 362 |
|
| 228 |
|
| 72 |
|
| 148 |
|
| 165 |
|
| 199 |
|
| 146 |
General bank insurance |
|
| 298 |
|
| 272 |
|
| 269 |
|
| 270 |
|
| 270 |
|
| 264 |
|
| 246 |
|
| 251 |
Amortization of core deposit intangible |
|
| - |
|
| - |
|
| - |
|
| 16 |
|
| 25 |
|
| 25 |
|
| 24 |
|
| 22 |
Advertising expense |
|
| 347 |
|
| 435 |
|
| 430 |
|
| 421 |
|
| 386 |
|
| 452 |
|
| 255 |
|
| 412 |
Debit card interchange expense |
|
| 203 |
|
| 620 |
|
| 363 |
|
| 269 |
|
| 349 |
|
| 399 |
|
| 285 |
|
| 296 |
Legal fees |
|
| 161 |
|
| 191 |
|
| 242 |
|
| 206 |
|
| 104 |
|
| 184 |
|
| 162 |
|
| 200 |
Other real estate expense, net |
|
| 738 |
|
| 879 |
|
| 426 |
|
| 700 |
|
| 709 |
|
| 539 |
|
| 680 |
|
| 237 |
Other expense |
|
| 2,782 |
|
| 2,718 |
|
| 3,005 |
|
| 2,989 |
|
| 2,834 |
|
| 2,839 |
|
| 2,455 |
|
| 3,169 |
Total noninterest expense |
|
| 16,264 |
|
| 16,700 |
|
| 16,582 |
|
| 17,215 |
|
| 18,054 |
|
| 17,986 |
|
| 16,918 |
|
| 16,191 |
Income before income taxes |
|
| 5,232 |
|
| 5,940 |
|
| 5,359 |
|
| 7,973 |
|
| 6,523 |
|
| 7,242 |
|
| 9,908 |
|
| 10,629 |
Provision for income taxes |
|
| 1,910 |
|
| 2,095 |
|
| 1,860 |
|
| 2,955 |
|
| 2,096 |
|
| 2,096 |
|
| 1,831 |
|
| 13,141 |
Net income (loss) |
| $ | 3,322 |
| $ | 3,845 |
| $ | 3,499 |
| $ | 5,018 |
| $ | 4,427 |
| $ | 5,146 |
| $ | 8,077 |
| $ | (2,512) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
| $ | 0.11 |
| $ | 0.13 |
| $ | 0.12 |
| $ | 0.17 |
| $ | 0.15 |
| $ | 0.17 |
| $ | 0.27 |
| $ | (0.08) |
Diluted earnings (loss) per share |
|
| 0.11 |
|
| 0.13 |
|
| 0.12 |
|
| 0.17 |
|
| 0.15 |
|
| 0.17 |
|
| 0.27 |
|
| (0.08) |
13
Reconciliation of Non-GAAP Financial Measures
The tables below provide a reconciliation of each non-GAAP tax equivalent measure to the most comparable GAAP measure for the periods indicated. Dollar amounts below in thousands, except per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Quarters Ended | ||||||||||||||||
|
| December 31, 2017 |
| September 30, 2017 |
| December 31, 2016 | ||||||||||||
|
| Amount |
| Per share |
| Amount |
| Per Share |
| Amount |
| Per Share | ||||||
Earnings per share (EPS) excluding nonrecurring items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (GAAP) |
| $ | (2,512) |
| $ | (0.08) |
| $ | 8,077 |
| $ | 0.27 |
| $ | 5,018 |
| $ | 0.17 |
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of state tax rate change |
|
| - |
|
| - |
|
| 1,566 |
|
| 0.05 |
|
| - |
|
| - |
Impact of federal tax reform |
|
| 9,475 |
|
| 0.31 |
|
| - |
|
| - |
|
| - |
|
| - |
Earnings, excluding nonrecurring items |
| $ | 6,963 |
| $ | 0.23 |
| $ | 6,511 |
| $ | 0.22 |
| $ | 5,018 |
| $ | 0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Quarters Ended |
| |||||||
|
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2017 |
| 2017 |
| 2016 |
| |||
Net Interest Margin |
|
|
|
|
|
|
|
|
|
|
Interest income (GAAP) |
| $ | 22,664 |
| $ | 22,425 |
| $ | 20,196 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 22 |
|
| 23 |
|
| 23 |
|
Securities |
|
| 943 |
|
| 876 |
|
| 141 |
|
Interest income (TE) |
|
| 23,629 |
|
| 23,324 |
|
| 20,360 |
|
Interest expense (GAAP) |
|
| 3,278 |
|
| 3,142 |
|
| 2,686 |
|
Net interest income (TE) |
| $ | 20,351 |
| $ | 20,182 |
| $ | 17,674 |
|
Net interest income (GAAP) |
| $ | 19,386 |
| $ | 19,283 |
| $ | 17,510 |
|
Average interest earning assets |
| $ | 2,146,570 |
| $ | 2,121,929 |
| $ | 1,986,546 |
|
Net interest margin (GAAP) |
|
| 3.58 | % |
| 3.61 | % |
| 3.51 | % |
Net interest margin (TE) |
|
| 3.76 | % |
| 3.77 | % |
| 3.54 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Quarters Ended |
| ||||||
|
| December 31, |
| September 30, |
| December 31, |
| |||
|
| 2017 |
| 2017 |
| 2016 |
| |||
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
| $ | 16,191 |
| $ | 16,918 |
| $ | 17,215 |
|
Less amortization of core deposit |
|
| 22 |
|
| 24 |
|
| 16 |
|
Less other real estate expense, net |
|
| 237 |
|
| 680 |
|
| 700 |
|
Less acquisition related costs |
|
| 65 |
|
| - |
|
| 154 |
|
Adjusted noninterest expense |
|
| 15,867 |
|
| 16,214 |
|
| 16,345 |
|
Net interest income (GAAP) |
|
| 19,386 |
|
| 19,283 |
|
| 17,510 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 22 |
|
| 23 |
|
| 23 |
|
Securities |
|
| 943 |
|
| 876 |
|
| 141 |
|
Net interest income (TE) |
|
| 20,351 |
|
| 20,182 |
|
| 17,674 |
|
Noninterest income |
|
| 8,184 |
|
| 7,843 |
|
| 8,428 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Increase in cash surrender value of BOLI (TE) |
|
| 194 |
|
| 195 |
|
| 160 |
|
Noninterest income (TE) |
|
| 8,378 |
|
| 8,038 |
|
| 8,588 |
|
Less securities gain (loss), net |
|
| 639 |
|
| 102 |
|
| (193) |
|
Adjusted noninterest income, plus net interest income (TE) |
| $ | 28,090 |
| $ | 28,118 |
| $ | 26,455 |
|
Efficiency ratio (excluding nonrecurring items) |
|
| 56.49 | % |
| 57.66 | % |
| 61.78 | % |
Efficiency ratio (GAAP) |
|
| 56.72 | % |
| 57.66 | % |
| 62.37 | % |
14