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(NASDAQ:OSBC) | Exhibit 99.1 | |
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Contact: | Bradley S. Adams | For Immediate Release |
| Chief Financial Officer | October 24, 2018 |
| (630) 906-5484 |
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Old Second Reports Third Quarter 2018 Net Income of $9.6 million
AURORA, IL, October 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 third quarter of 2018. The Company’s net income was $9.6 million, or $0.32 per diluted share, for the third quarter of 2018, compared to net income of $6.3 million, or $0.21 per diluted share, in the second quarter of 2018, and net income of $8.1 million, or $0.27 per diluted share, for the third quarter of 2017.
Operating Results
· | Third quarter 2018 net income was $9.6 million, reflecting an increase in earnings of $3.4 million from the second quarter of 2018, and an increase in earnings of $1.6 million from the third quarter of 2017. |
· | Adjusted net income, a non-GAAP financial measure, was $9.6 million, or $0.32 per diluted share, compared to $8.7 million, or $0.29 per diluted share, for the second quarter of 2018, and $6.5 million, or $0.22 per diluted share, for the third quarter of 2017. |
o | Second quarter 2018 adjusted net income excluded $2.5 million in costs, after tax, related to our acquisition of ABC Bank. |
o | Third quarter 2017 adjusted net income excluded a $1.6 million tax benefit related to the Illinois income tax increase, effective July 1, 2017, which resulted in a remeasurement of the Company’s net deferred tax asset. |
See the discussion entitled “Non-GAAP Presentations” below and the tables on pages 14-15 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
· | Net interest and dividend income was $23.7 million for the third quarter of 2018, an increase of $498,000, or 2.1%, from the $23.2 million recorded in the second quarter of 2018, and an increase of $4.5 million, or 23.1%, over the third quarter of 2017. Net interest income in the third quarter of 2018 was favorably impacted by the rising interest rate environment, as well as $722,000 of purchase accounting accretion, compared to $1.1 million of purchase accounting accretion in the second quarter of 2018, and $265,000 in the third quarter of 2017. Purchase accounting accretion income realized prior to the second quarter of 2018 was due to the Company’s purchase of the Chicago branch of Talmer Bank and Trust in late 2016. Beginning in the second quarter of 2018, purchase accounting accretion income also included the impact of the ABC Bank purchase on April 20, 2018. |
· | Noninterest income was $7.8 million for the third quarter of 2018, compared to $8.5 million in the second quarter of 2018 and $7.8 million in the third quarter of 2017. The decrease in noninterest income in the third quarter of 2018 compared to the second quarter of 2018 was driven primarily by reductions in total residential mortgage banking revenue of $333,000, security gains, net, of $299,000, and commercial swap fee income of $235,000, which is recorded within other income. Trust income remained steady from the second to third quarter of 2018, and reflected $176,000 of growth over the third quarter of 2017. |
· | Noninterest expense was $18.7 million for the third quarter of 2018, a decrease of $3.6 million, or 16.0%, compared to the second quarter of 2018, and an increase of $1.8 million, or 10.6%, from the third quarter of 2017. The decrease in noninterest expense in the third quarter of 2018, compared to second quarter of 2018 was primarily due to decreases in salaries and employee benefits costs, as well as computer and data |
1
processing expenses stemming from costs incurred related to the Company’s acquisition of ABC Bank in the second quarter of 2018. The increase in noninterest expense in the third quarter of 2018 compared to the third quarter of 2017 was primarily due to increases in salaries and employee benefits, occupancy, furniture and equipment expenses, computer and data processing expense, and amortization of core deposit intangibles related to our acquisition of ABC Bank, partially offset by net gains on OREO sales in the third quarter of 2018. The year over year increase in noninterest expense was partially offset by net gains on OREO sales in the third quarter of 2018 as well as a decrease in OREO related operating costs due to a decline in OREO assets in 2018. |
· | On October 16, 2018, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on November 5, 2018, to stockholders of record as of October 26, 2018. |
Capital Ratios
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| September 30, |
| June 30, |
| September 30, | |||
| Well-Capitalized 1 |
| 2018 |
| 2018 |
| 2017 | ||||
The Company |
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Common equity tier 1 capital ratio | N/A |
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| 9.12 | % |
| 8.49 | % |
| 8.88 | % |
Total risk-based capital ratio | N/A |
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| 12.57 | % |
| 11.87 | % |
| 12.46 | % |
Tier 1 risk-based capital ratio | N/A |
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| 11.67 | % |
| 10.99 | % |
| 11.54 | % |
Tier 1 leverage ratio | N/A |
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| 9.72 | % |
| 9.37 | % |
| 9.69 | % |
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The Bank |
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Common equity tier 1 capital ratio | 6.50 | % |
| 13.26 | % |
| 12.62 | % |
| 12.67 | % |
Total risk-based capital ratio | 10.00 | % |
| 14.16 | % |
| 13.51 | % |
| 13.52 | % |
Tier 1 risk-based capital ratio | 8.00 | % |
| 13.26 | % |
| 12.62 | % |
| 12.67 | % |
Tier 1 leverage ratio | 5.00 | % |
| 11.05 | % |
| 10.75 | % |
| 10.63 | % |
1 Represents ratios required to be considered well capitalized under prompt corrective action provisions. The prompt corrective action provisions are only applicable at the bank level.
· | The ratios shown above exceed levels required to be considered “well capitalized.” |
Asset Quality & Earning Assets
· | Nonperforming loans totaled $11.8 million at September 30, 2018, compared to $11.9 million at June 30, 2018, and $16.3 million at September 30, 2017. 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 were 0.6% at both September 30, 2018, and June 30, 2018, and 1.0% at September 30, 2017. Purchase credit impaired (“PCI”) loans from the Company’s acquisition of ABC Bank totaled $10.9 million, net of purchase accounting adjustments, at September 30, 2018. |
· | OREO assets totaled $7.0 million at September 30, 2018, compared to $8.9 million at June 30, 2018, and $9.0 million at September 30, 2017. Net gains on the sale of OREO totaled $612,000 in the third quarter of 2018, and valuation writedowns totaled $119,000. Net gains on the sale of OREO totaled $24,000 in the second quarter of 2018, and valuation writedowns totaled $254,000. Nonperforming assets as a percent of total loans plus OREO decreased to 1.0% as of September 30, 2018, as compared to 1.1% as of June 30, 2018 and 1.6% as of September 30, 2017. |
· | Total loans were $1.83 billion at September 30, 2018, reflecting a decrease of $14.2 million compared to June 30, 2018, but an increase of $240.8 million from September 30, 2017, primarily due to the Company’s acquisition of ABC Bank, which included $227.6 million of loans recorded, net of purchase accounting adjustments. Average loans (including loans held-for-sale) for the third quarter of 2018 were $1.84 billion, reflecting an increase of $33.5 million from quarterly average loans for the second quarter of 2018, and an increase of $289.1 million from quarterly average loans for the third quarter of 2017. |
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· | Available-for-sale securities totaled $542.3 million at September 30, 2018, compared to $543.6 million at June 30, 2018, and $533.5 million at September 30, 2017. Pretax net gains of $13,000 on the sale of securities were realized in the third quarter of 2018, compared to pretax net security gains of $312,000 in the second quarter of 2018 and pretax net security gains of $102,000 in the third quarter of 2017. |
Net Interest Income
ANALYSIS OF AVERAGE BALANCES,
TAX EQUIVALENT INTEREST AND RATES
(Dollars in thousands - unaudited)
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| Quarters Ended | ||||||||||||||||||||||
| September 30, 2018 |
| June 30, 2018 |
| September 30, 2017 | ||||||||||||||||||
| 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 | $ | 17,975 |
| $ | 84 |
| 1.85 |
| $ | 19,161 |
| $ | 97 |
| 2.03 |
| $ | 11,685 |
| $ | 37 |
| 1.24 |
Securities: |
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Taxable |
| 268,015 |
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| 2,491 |
| 3.69 |
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| 268,591 |
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| 2,392 |
| 3.57 |
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| 327,892 |
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| 2,424 |
| 2.96 |
Non-taxable (TE) |
| 274,282 |
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| 2,612 |
| 3.78 |
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| 286,611 |
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| 2,676 |
| 3.74 |
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| 220,540 |
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| 2,504 |
| 4.54 |
Total securities |
| 542,297 |
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| 5,103 |
| 3.73 |
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| 555,202 |
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| 5,068 |
| 3.66 |
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| 548,432 |
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| 4,928 |
| 3.59 |
Dividends from FHLBC and FRBC |
| 8,905 |
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| 121 |
| 5.39 |
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| 8,619 |
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| 111 |
| 5.17 |
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| 8,339 |
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| 94 |
| 4.51 |
Loans and loans held-for-sale 1, 2 |
| 1,842,561 |
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| 23,421 |
| 5.04 |
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| 1,809,077 |
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| 22,552 |
| 5.00 |
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| 1,553,473 |
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| 18,265 |
| 4.60 |
Total interest earning assets |
| 2,411,738 |
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| 28,729 |
| 4.73 |
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| 2,392,059 |
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| 27,828 |
| 4.67 |
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| 2,121,929 |
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| 23,324 |
| 4.32 |
Cash and due from banks |
| 34,608 |
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| - |
| - |
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| 36,720 |
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| - |
| - |
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| 31,028 |
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| - |
| - |
Allowance for loan and lease losses |
| (19,696) |
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| - |
| - |
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| (18,494) |
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| - |
| - |
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| (16,478) |
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| - |
| - |
Other noninterest bearing assets |
| 191,296 |
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| - |
| - |
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| 176,608 |
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| - |
| - |
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| 185,906 |
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| - |
| - |
Total assets | $ | 2,617,946 |
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| $ | 2,586,893 |
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| $ | 2,322,385 |
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Liabilities and Stockholders' Equity |
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NOW accounts | $ | 444,790 |
| $ | 301 |
| 0.27 |
| $ | 443,586 |
| $ | 238 |
| 0.22 |
| $ | 422,913 |
| $ | 108 |
| 0.10 |
Money market accounts |
| 319,492 |
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| 250 |
| 0.31 |
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| 317,775 |
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| 193 |
| 0.24 |
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| 273,440 |
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| 85 |
| 0.12 |
Savings accounts |
| 300,519 |
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| 91 |
| 0.12 |
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| 298,240 |
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| 70 |
| 0.09 |
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| 262,573 |
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| 46 |
| 0.07 |
Time deposits |
| 467,933 |
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| 1,568 |
| 1.33 |
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| 460,909 |
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| 1,444 |
| 1.26 |
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| 389,037 |
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| 1,077 |
| 1.10 |
Interest bearing deposits |
| 1,532,734 |
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| 2,210 |
| 0.57 |
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| 1,520,510 |
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| 1,945 |
| 0.51 |
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| 1,347,963 |
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| 1,316 |
| 0.39 |
Securities sold under repurchase agreements |
| 46,850 |
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| 140 |
| 1.19 |
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| 44,655 |
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| 104 |
| 0.93 |
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| 32,800 |
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| 4 |
| 0.05 |
Other short-term borrowings |
| 55,119 |
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| 311 |
| 2.24 |
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| 58,199 |
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| 276 |
| 1.90 |
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| 72,065 |
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| 220 |
| 1.19 |
Junior subordinated debentures |
| 57,669 |
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| 930 |
| 6.40 |
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| 57,657 |
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| 927 |
| 6.45 |
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| 57,621 |
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| 930 |
| 6.46 |
Senior notes |
| 44,121 |
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| 672 |
| 6.04 |
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| 44,096 |
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| 672 |
| 6.11 |
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| 44,021 |
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| 672 |
| 6.11 |
Notes payable and other borrowings |
| 20,768 |
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| 173 |
| 3.30 |
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| 19,795 |
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| 95 |
| 1.92 |
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| - |
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| - |
| - |
Total interest bearing liabilities |
| 1,757,261 |
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| 4,436 |
| 1.00 |
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| 1,744,912 |
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| 4,019 |
| 0.92 |
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| 1,554,470 |
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| 3,142 |
| 0.80 |
Noninterest bearing deposits |
| 625,982 |
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| - |
| - |
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| 618,765 |
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| - |
| - |
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| 551,768 |
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| - |
| - |
Other liabilities |
| 20,142 |
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| - |
| - |
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| 15,679 |
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| - |
| - |
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| 19,395 |
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| - |
| - |
Stockholders' equity |
| 214,561 |
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| - |
| - |
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| 207,537 |
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| - |
| - |
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| 196,752 |
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| - |
| - |
Total liabilities and stockholders' equity | $ | 2,617,946 |
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| $ | 2,586,893 |
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| $ | 2,322,385 |
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Net interest income (TE) 2 |
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| $ | 24,293 |
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| $ | 23,809 |
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| $ | 20,182 |
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Net interest margin (TE) 2 |
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| 4.00 |
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| 3.99 |
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| 3.77 |
Interest bearing liabilities to earning assets |
| 72.86 | % |
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| 72.95 | % |
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| 73.26 | % |
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1 Interest income from loans is shown on a tax equivalent basis, which is a non-GAAP financial measure as discussed in the table on page 15, and includes fees of $197,000, $233,000 and $722,000 for the third quarter of 2018, the second quarter of 2018, and the third quarter of 2017, respectively. Nonaccrual loans are included in the above stated average balances.
2 Tax equivalent basis is calculated using a marginal tax rate of 21% in 2018 and 35% in 2017. See the discussion entitled “Non-GAAP Presentations” below and the tables on page 15 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Tax equivalent net interest income was $24.3 million for the quarter ended September 30, 2018, which reflects an increase of $484,000 compared to the second quarter of 2018, and growth of $4.1 million compared to the third quarter of 2017. The tax equivalent adjustment for the third quarter of 2018 was $553,000, compared to the tax equivalent adjustments of $567,000 for the second quarter of 2018, and $899,000 for the third quarter of 2017, reflecting the reduction of the federal tax rate in 2018 due to the “Tax Cuts and Jobs Act” that became effective on January 1, 2018, and lowered the Federal corporate income tax rate to 21%. Growth in interest earning assets in the third quarter of 2018 was primarily due to the Company’s acquisition of ABC Bank, which resulted in the addition of
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$227.6 million of loans recorded, net of purchase accounting adjustments. Quarterly average earning assets increased $19.7 million from $2.39 billion for the quarter ended June 30, 2018, to $2.41 billion for the quarter ended September 30, 2018, while the yield on average earning assets increased six basis points over the same period. Average loan growth, including loans held-for-sale, was $33.5 million for the quarter ended September 30, 2018, compared to the quarter ended June 30, 2018, while the year over year growth in third quarter average loans, including loans held-for-sale, was $289.1 million. In addition to the ABC Bank acquisition in the second quarter of 2018, the year over year growth was also due to organic loan growth over the last twelve months, driven by commercial loan portfolio originations, as well as two home equity loan (“HELOC”) portfolio purchases, which included $20.0 million of HELOCs purchased in the first quarter of 2018.
Tax equivalent securities income decreased $14,000 in the third quarter of 2018 compared to the second quarter of 2018, and decreased by $328,000 in the third quarter of 2018 compared to the third quarter of 2017, in spite of the reduction in the federal income tax rates . The Company’s securities portfolio has been repositioned in the last year into higher yielding tax exempt securities, while lower yielding securities were sold or called. The securities portfolio acquired with the Company’s acquisition of ABC Bank was immediately liquidated as the holdings were not consistent with the Company’s investment strategies. This liquidation resulted in cash inflows of approximately $72.1 million. The rising interest rate environment drove a 12 basis point increase for taxable securities income in the third quarter of 2018, compared to the second quarter of 2018, and a 73 basis point increase from the third quarter of 2017.
The cost of interest bearing liabilities for the third quarter of 2018 increased by eight basis points from the second quarter of 2018, and increased by 20 basis points from the third quarter of 2017. Growth in average interest bearing liabilities in the third quarter of 2018 was primarily due to a full period of ABC Bank balances. The ABC Bank acquisition, which occurred on April 20, 2018, resulted in the addition of $248.5 million of deposits and $40.0 million of borrowings, net of purchase accounting adjustments. Total average deposits increased $12.2 million during the third quarter of 2018 compared to the second quarter of 2018 in all categories due to the ABC Bank acquisition. Average interest bearing deposit balances attributable to the ABC Bank acquisition totaled $160.7 million in the third quarter of 2018, and the cost of funds related to those deposits was 0.68%, compared to a legacy Company deposit cost of 0.55% for the same period. Continued growth in demand deposits in the year over year period has assisted the Company in controlling the cost of funds stemming from average interest bearing deposits, which totaled 0.57% for the third quarter of 2018. In addition to the ABC acquisition, the increase in the overall cost of funds is also due to the rising rate environment.
For the quarter ended September 30, 2018, average other short-term borrowings, which are primarily FHLBC advances, decreased to $55.1 million compared to $58.2 million for the quarter ended June 30, 2018, and decreased by $16.9 million compared to the quarter ended September 30, 2017. The junior subordinated debt issuances and senior debt issuance reflected no material change in rates or volumes over the three quarters presented. Finally, the third quarter 2018 average notes payable and other borrowings included $16.8 million of long-term FHLBC advances acquired in the Company’s purchase of ABC Bank.
The net interest margin (TE) increased one basis point for the third quarter of 2018 compared to the second quarter of 2018, ending at 4.00% compared to 3.99%, respectively, due primarily to the rising interest rate environment, which impacted income from average earning assets more significantly than expenses related to average interest bearing liabilities. The growth in the yield on average earning assets more than offset the increase in the cost of funds for the third quarter of 2018 compared to the second quarter of 2018. The net interest margin (TE) in the third quarter of 2018 was 23 basis points higher than the like quarter one year ago due primarily to purchase accounting accretion stemming from the Company’s acquisition of ABC Bank as well as the rising interest rate environment.
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| 3rd Quarter 2018 |
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Noninterest Income |
| Three Months Ended |
| Percent Change From |
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(dollars in thousands) |
| September 30, |
| June 30, |
| September 30, |
| June 30, |
| September 30, |
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| 2018 |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
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Trust income |
| $ | 1,644 |
| $ | 1,645 |
| $ | 1,468 |
| (0.1) |
| 12.0 |
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Service charges on deposits |
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| 1,923 |
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| 1,769 |
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| 1,722 |
| 8.7 |
| 11.7 |
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Residential mortgage banking revenue |
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Secondary mortgage fees |
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| 199 |
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| 195 |
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| 195 |
| 2.1 |
| 2.1 |
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Mortgage servicing rights mark to market (loss) gain |
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| (11) |
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| (105) |
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| (194) |
| 89.5 |
| 94.3 |
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Mortgage servicing income |
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| 471 |
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| 627 |
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| 451 |
| (24.9) |
| 4.4 |
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Net gain on sales of mortgage loans |
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| 965 |
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| 1,240 |
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| 1,095 |
| (22.2) |
| (11.9) |
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Total residential mortgage banking revenue |
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| 1,624 |
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| 1,957 |
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| 1,547 |
| (17.0) |
| 5.0 |
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Securities gain (loss), net |
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| 13 |
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| 312 |
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| 102 |
| (95.8) |
| (87.3) |
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Increase in cash surrender value of BOLI |
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| 347 |
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| 351 |
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| 362 |
| (1.1) |
| (4.1) |
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Debit card interchange income |
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| 1,135 |
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| 1,132 |
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| 1,075 |
| 0.3 |
| 5.6 |
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Other income |
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| 1,128 |
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| 1,366 |
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| 1,567 |
| (17.4) |
| (28.0) |
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Total noninterest income |
| $ | 7,814 |
| $ | 8,532 |
| $ | 7,843 |
| (8.4) |
| (0.4) |
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The decrease in noninterest income in the third quarter of 2018 compared to the second quarter of 2018 was driven primarily by a $333,000 reduction in total residential mortgage banking revenue stemming from rising interest rates, a $299,000 reduction in security gain (loss), net, and a $235,000 reduction in commercial loan swap fee income, which is recorded within other income. An increase in service charges on deposits of $154,000 partially offset the noted reductions for the linked quarter comparison. Year over year total noninterest income reflected minimal change, with increases noted in trust income, service charges on deposits, and total residential mortgage banking revenue, and reductions in security gain (loss), net, and other income due primarily to a $545,000 decline in commercial swap fee income.
Noninterest Expense
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| 3rd Quarter 2018 |
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Noninterest Expense |
| Three Months Ended |
| Percent Change From |
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(dollars in thousands) |
| September 30, |
| June 30, |
| September 30, |
| June 30, |
| September 30, |
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| 2018 |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| |||
Salaries |
| $ | 8,509 |
| $ | 9,703 |
| $ | 7,704 |
| (12.3) |
| 10.4 |
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Officers incentive |
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| 820 |
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| 740 |
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| 1,114 |
| 10.8 |
| (26.4) |
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Benefits and other |
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| 1,836 |
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| 1,912 |
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| 1,231 |
| (4.0) |
| 49.1 |
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Total salaries and employee benefits |
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| 11,165 |
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| 12,355 |
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| 10,049 |
| (9.6) |
| 11.1 |
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Occupancy, furniture and equipment expense |
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| 1,782 |
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| 1,652 |
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| 1,482 |
| 7.9 |
| 20.2 |
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Computer and data processing |
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| 1,247 |
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| 2,741 |
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| 1,081 |
| (54.5) |
| 15.4 |
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FDIC insurance |
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| 162 |
|
| 165 |
|
| 199 |
| (1.8) |
| (18.6) |
|
General bank insurance |
|
| 230 |
|
| 299 |
|
| 246 |
| (23.1) |
| (6.5) |
|
Amortization of core deposit intangible asset |
|
| 136 |
|
| 97 |
|
| 24 |
| 40.2 |
| 466.7 |
|
Advertising expense |
|
| 492 |
|
| 492 |
|
| 255 |
| - |
| 92.9 |
|
Debit card interchange expense |
|
| 320 |
|
| 301 |
|
| 285 |
| 6.3 |
| 12.3 |
|
Legal fees |
|
| 243 |
|
| 286 |
|
| 162 |
| (15.0) |
| 50.0 |
|
Other real estate owned expense, net |
|
| (370) |
|
| 429 |
|
| 680 |
| (186.2) |
| (154.4) |
|
Other expense |
|
| 3,304 |
|
| 3,469 |
|
| 2,455 |
| (4.8) |
| 34.6 |
|
Total noninterest expense |
| $ | 18,711 |
| $ | 22,286 |
| $ | 16,918 |
| (16.0) |
| 10.6 |
|
Efficiency ratio (GAAP) |
|
| 60.06 | % |
| 69.16 | % |
| 60.00 | % |
|
|
|
|
Adjusted efficiency ratio (non-GAAP)1 |
|
| 59.11 | % |
| 57.88 | % |
| 57.66 | % |
|
|
|
|
1 The adjusted 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
5
discussion entitled “Non-GAAP Presentations” below and the table on page 15 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Noninterest expense for the third quarter of 2018 decreased $3.6 million, or 16.0%, compared to the second quarter of 2018 and increased $1.8 million, or 10.6%, compared to the third quarter of 2017. The linked quarter decrease is primarily attributable to ABC Bank acquisition-related costs recorded in the second quarter of 2018, which included $1.2 million of salaries and employee benefit expense and $1.6 million of computer and data processing expense. The year over year variance is also primarily attributable to ABC Bank acquisition-related costs, including salaries and employee benefits expense, computer and data processing expense, amortization of core deposit intangibles, and legal fees. Partially offsetting the year over year increases noted was a reduction in OREO expense, net, as the OREO portfolio balances have declined over the past twelve months, and dispositions in the third quarter of 2018 resulted in net gains on OREO sales of $612,000 compared to net gains of $276,000 in the like 2017 quarter.
Earning Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| September 30, 2018 |
| ||
Loans |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| September 30, |
| June 30, |
| September 30, |
| June 30, |
| September 30, |
| |||
|
| 2018 |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| |||
Commercial |
| $ | 306,407 |
| $ | 299,536 |
| $ | 257,356 |
| 2.3 |
| 19.1 |
|
Leases |
|
| 70,661 |
|
| 66,687 |
|
| 69,305 |
| 6.0 |
| 2.0 |
|
Real estate - commercial |
|
| 804,184 |
|
| 808,264 |
|
| 739,136 |
| (0.5) |
| 8.8 |
|
Real estate - construction |
|
| 112,873 |
|
| 115,486 |
|
| 94,868 |
| (2.3) |
| 19.0 |
|
Real estate - residential |
|
| 393,598 |
|
| 404,908 |
|
| 303,080 |
| (2.8) |
| 29.9 |
|
Home equity line of credit "HELOC" |
|
| 122,022 |
|
| 127,986 |
|
| 116,503 |
| (4.7) |
| 4.7 |
|
Other1 |
|
| 12,969 |
|
| 13,969 |
|
| 13,320 |
| (7.2) |
| (2.6) |
|
Total loans, excluding deferred loan costs and PCI |
|
| 1,822,714 |
|
| 1,836,836 |
|
| 1,593,568 |
| (0.8) |
| 14.4 |
|
Net deferred loan costs |
|
| 1,348 |
|
| 1,112 |
|
| 623 |
| 21.2 |
| 116.4 |
|
Total loans, excluding PCI |
|
| 1,824,062 |
|
| 1,837,948 |
|
| 1,594,191 |
| (0.8) |
| 14.4 |
|
PCI loans, net of purchase accounting adjustments |
|
| 10,887 |
|
| 11,214 |
|
| - |
| (2.9) |
| N/M |
|
Total loans |
| $ | 1,834,949 |
| $ | 1,849,162 |
| $ | 1,594,191 |
| (0.8) |
| 15.1 |
|
N/M - Not meaningful.
1 Other class includes consumer and overdrafts.
Total loans decreased by $14.2 million at the end of the third quarter of 2018 compared to June 30, 2018, and increased $240.8 million year over year. The majority of the increase is due to $227.6 million of loans recorded, net of purchase accounting adjustments, from the Company’s acquisition of ABC Bank. In addition, the Company has made select lease and HELOC purchases and experienced organic loan growth in the year over year period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| September 30, 2018 |
| ||
Securities |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| September 30, |
| June 30, |
| September 30, |
| June 30, |
| September 30, |
| |||
|
| 2018 |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| |||
Securities available-for-sale, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury |
| $ | 3,854 |
| $ | 3,876 |
| $ | 3,990 |
| (0.6) |
| (3.4) |
|
U.S. government agencies |
|
| 11,703 |
|
| 12,216 |
|
| 13,451 |
| (4.2) |
| (13.0) |
|
U.S. government agency mortgage-backed |
|
| 14,766 |
|
| 13,407 |
|
| 11,030 |
| 10.1 |
| 33.9 |
|
States and political subdivisions |
|
| 272,264 |
|
| 276,112 |
|
| 229,032 |
| (1.4) |
| 18.9 |
|
Corporate bonds |
|
| - |
|
| 700 |
|
| 10,577 |
| (100.0) |
| (100.0) |
|
Collateralized mortgage obligations |
|
| 64,960 |
|
| 61,432 |
|
| 80,386 |
| 5.7 |
| (19.2) |
|
Asset-backed securities |
|
| 109,173 |
|
| 109,263 |
|
| 131,759 |
| (0.1) |
| (17.1) |
|
Collateralized loan obligations |
|
| 65,618 |
|
| 66,638 |
|
| 53,259 |
| (1.5) |
| 23.2 |
|
Total securities available-for-sale |
| $ | 542,338 |
| $ | 543,644 |
| $ | 533,484 |
| (0.2) |
| 1.7 |
|
The investment portfolio was $542.3 million as of September 30, 2018, a decrease of $1.3 million from $543.6 million as of June 30, 2018, and an increase of $8.9 million from September 30, 2017. The portfolio composition has remained relatively static over the most recent quarter and has experienced a modest shift from collateralized mortgage obligations to issuances of states and political subdivisions since third quarter of 2017. The largely unchanged portfolio composition is due to lack of relative value among possible investment sectors and consequent opportunities to shift allocation of investments from lower return sectors to those with higher returns. The small degree of activity that did occur in the third quarter of 2018 resulted in net securities gains of $13,000, compared to $312,000 in the second quarter of 2018 and $102,000 in net securities gains for the third quarter of 2017.
6
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| September 30, 2018 | ||
Nonperforming assets |
| As of |
| Percent Change From | |||||||||
(dollars in thousands) |
| September 30, |
| June 30, |
| September 30, |
| June 30, |
| September 30, | |||
|
| 2018 |
| 2018 |
| 2017 |
| 2018 |
| 2017 | |||
Nonaccrual loans |
| $ | 9,981 |
| $ | 9,421 |
| $ | 14,124 |
| 5.9 |
| (29.3) |
Performing troubled debt restructured loans accruing interest |
|
| 1,719 |
|
| 1,300 |
|
| 978 |
| 32.2 |
| 75.8 |
Loans past due 90 days or more and still accruing interest |
|
| 79 |
|
| 1,153 |
|
| 1,169 |
| (93.1) |
| (93.2) |
Total nonperforming loans |
|
| 11,779 |
|
| 11,874 |
|
| 16,271 |
| (0.8) |
| (27.6) |
Other real estate owned |
|
| 6,964 |
|
| 8,912 |
|
| 9,024 |
| (21.9) |
| (22.8) |
Total nonperforming assets |
| $ | 18,743 |
| $ | 20,786 |
| $ | 25,295 |
| (9.8) |
| (25.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans, net of purchase accounting adjustments |
| $ | 10,887 |
| $ | 11,214 |
| $ | - |
| (2.9) |
| N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-89 days past due loans |
| $ | 16,802 |
| $ | 9,617 |
| $ | 3,297 |
|
|
|
|
Nonaccrual loans to total loans |
|
| 0.5 | % |
| 0.5 | % |
| 0.9 | % |
|
|
|
Nonperforming loans to total loans |
|
| 0.6 | % |
| 0.6 | % |
| 1.0 | % |
|
|
|
Nonperforming assets to total loans plus OREO |
|
| 1.0 | % |
| 1.1 | % |
| 1.6 | % |
|
|
|
Purchased credit-impaired loans to total loans |
|
| 0.6 | % |
| 0.6 | % |
| - | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
| $ | 19,328 |
| $ | 19,321 |
| $ | 16,465 |
|
|
|
|
Allowance for loan losses to total loans |
|
| 1.1 | % |
| 1.0 | % |
| 1.0 | % |
|
|
|
Allowance for loan losses to nonaccrual loans |
|
| 193.7 | % |
| 205.1 | % |
| 116.6 | % |
|
|
|
N/M - Not meaningful.
Nonperforming loans consist of nonaccrual loans, performing troubled debt restructured loans accruing interest and loans 90 days or more past due and still accruing interest. Nonperforming loans to total loans was 0.6% in both the third and second quarters of 2018, and 1.0% in the third quarter of 2017. Nonperforming assets to total loans plus OREO decreased to 1.0% in the third quarter of 2018 from 1.1% in the second quarter of 2018, and from 1.6% in the third quarter of 2017, as a result of loan growth over the last year, as well as continued OREO liquidations and write-downs recorded in 2017 and 2018. Finally, the allowance for loan and lease losses to total loans was 1.1% as of September 30, 2018, which is a slight increase from 1.0% for the second quarter 2018 and the third quarter of 2017.
The following table details the accretable discount on all of the Company’s purchased loans as of September 30, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accretable Discount - Non-PCI Loans |
| Accretable Discount - PCI Loans |
| Non-Accretable Discount - PCI Loans |
| Total | ||||
Beginning balance, July 1, 2018 |
| $ | 2,995 |
| $ | 1,373 |
| $ | 6,403 |
| $ | 10,771 |
Purchases |
|
| - |
|
| - |
|
| - |
|
| - |
Accretion |
|
| (312) |
|
| (129) |
|
| (334) |
|
| (775) |
Transfer1 |
|
| (373) |
|
| (26) |
|
| - |
|
| (399) |
Ending balance, September 30, 2018 |
| $ | 2,310 |
| $ | 1,218 |
| $ | 6,069 |
| $ | 9,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Transfer was due to loans moved to OREO.
The allowance for loan and lease losses excludes the remaining purchase accounting credit marks recorded on the ABC Bank and Talmer branch purchased loans; the expected total remaining accretable discount on the purchased loans was $3.5 million as of September 30, 2018, compared to $4.4 million as of June 30, 2018, and the non-accretable discount on PCI loans was $6.1 million as of September 30, 2018, compared to $6.4 million as of June 30, 2018.
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| September 30, 2018 |
| ||
Classified loans |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| September 30, |
| June 30, |
| September 30, |
| June 30, |
| September 30, |
| |||
|
| 2018 |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| |||
Commercial |
| $ | 353 |
| $ | 393 |
| $ | 380 |
| (10.2) |
| (7.1) |
|
Leases |
|
| - |
|
| 539 |
|
| 648 |
| (100.0) |
| (100.0) |
|
Real estate-commercial, nonfarm |
|
| 21,008 |
|
| 12,362 |
|
| 4,757 |
| 69.9 |
| 341.6 |
|
Real estate-commercial, farm |
|
| 1,241 |
|
| 1,248 |
|
| 4,418 |
| (0.6) |
| (71.9) |
|
Real estate-construction |
|
| 282 |
|
| 366 |
|
| 1,977 |
| (23.0) |
| (85.7) |
|
Real estate-residential: |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
Investor |
|
| 1,103 |
|
| 1,029 |
|
| 7,633 |
| 7.2 |
| (85.5) |
|
Multifamily |
|
| 3,177 |
|
| 3,302 |
|
| 2,495 |
| (3.8) |
| 27.3 |
|
Owner occupied |
|
| 5,022 |
|
| 5,428 |
|
| 382 |
| (7.5) |
| N/M |
|
HELOC |
|
| 1,829 |
|
| 1,633 |
|
| 1,031 |
| 12.0 |
| 77.4 |
|
Other1 |
|
| 55 |
|
| 18 |
|
| 8 |
| 205.6 |
| 587.5 |
|
Total classified loans, excluding PCI |
|
| 34,070 |
|
| 26,318 |
|
| 23,729 |
| 29.5 |
| 43.6 |
|
PCI loans, net of purchase accounting adjustments |
|
| 10,887 |
|
| 11,214 |
|
| - |
| (2.9) |
| N/M |
|
Total classified loans |
| $ | 44,957 |
| $ | 37,532 |
| $ | 23,729 |
| 19.8 |
| 89.5 |
|
N/M - Not meaningful.
1 Other class includes consumer and overdrafts.
Classified loans include nonaccrual, performing troubled debt restructurings, PCI loans, and all other loans considered substandard, as shown above. Classified loans totaled $45.0 million as of September 30, 2018, an increase of $7.4 million, or 19.8%, from the prior quarter, and an increase of $21.2 million, or 89.5%, from the like quarter of 2017. The $10.9 million of PCI loans as of September 30, 2018, stems from the Company’s acquisition of ABC Bank.
Net Charge-off Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan Charge-offs, net of recoveries | Quarters Ended | |||||||||||||
(dollars in thousands) | September 30, |
| % of |
| June 30, |
| % of |
| September 30, |
| % of | |||
| 2018 |
| Total 2 |
| 2018 |
| Total 2 |
| 2017 |
| Total 2 | |||
Commercial | $ | (25) |
| 357.1 |
| $ | (77) |
| (24.3) |
| $ | 7 |
| (2.1) |
Leases |
| - |
| - |
|
| 8 |
| 2.5 |
|
| 98 |
| (29.8) |
Real estate-commercial, nonfarm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner general purpose |
| (6) |
| 85.7 |
|
| 27 |
| 8.5 |
|
| - |
| - |
Owner special purpose |
| 192 |
| (2,742.9) |
|
| - |
| - |
|
| - |
| - |
Non-owner general purpose |
| (22) |
| 314.3 |
|
| (20) |
| (6.3) |
|
| (43) |
| 13.1 |
Non-owner special purpose |
| - |
| - |
|
| 476 |
| 150.2 |
|
| - |
| - |
Retail properties |
| - |
| - |
|
| - |
| - |
|
| 22 |
| (6.7) |
Total real estate-commercial, nonfarm |
| 164 |
| (2,342.9) |
|
| 483 |
| 152.4 |
|
| (21) |
| 6.4 |
Real estate-construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilder |
| - |
| - |
|
| - |
| - |
|
| - |
| - |
Land |
| (23) |
| 328.6 |
|
| (2) |
| (0.6) |
|
| - |
| - |
Commercial speculative |
| - |
| - |
|
| - |
| - |
|
| - |
| - |
All other |
| (9) |
| 128.6 |
|
| 2 |
| 0.6 |
|
| 8 |
| (2.4) |
Total real estate-construction |
| (32) |
| 457.2 |
|
| - |
| - |
|
| 8 |
| (2.4) |
Real estate-residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor |
| (18) |
| 257.1 |
|
| (63) |
| (19.9) |
|
| (28) |
| 8.5 |
Multifamily |
| (11) |
| 157.1 |
|
| (11) |
| (3.5) |
|
| (17) |
| 5.2 |
Owner occupied |
| (54) |
| 771.4 |
|
| (26) |
| (8.2) |
|
| (40) |
| 12.2 |
Total real estate-residential |
| (83) |
| 1,185.6 |
|
| (100) |
| (31.6) |
|
| (85) |
| 25.9 |
HELOC |
| (90) |
| 1,285.7 |
|
| (26) |
| (8.2) |
|
| (367) |
| 111.6 |
Other1 |
| 59 |
| (842.7) |
|
| 29 |
| 9.2 |
|
| 31 |
| (9.6) |
Net charge-offs / (recoveries) | $ | (7) |
| 100.0 |
| $ | 317 |
| 100.0 |
| $ | (329) |
| 100.0 |
1 Other class includes consumer and overdrafts.
2 Represents the percentage of net charge-offs attributable to each category of loans.
Gross charge-offs for the quarter ended September 30, 2018, were $372,000 compared to $699,000 for the quarter ended June 30, 2018, and $241,000 for the quarter ended September 30, 2017. Gross recoveries were
8
$379,000 for the quarter ended September 30, 2018, compared to $382,000 for the quarter ended June 30, 2018 and $570,000 for the like quarter of 2017. Continued recoveries are indicative of the ongoing aggressive efforts by management to effectively manage and resolve prior charge-offs.
Deposits
Total deposits were $2.13 billion at September 30, 2018, which reflects a decrease of $29.5 million compared to June 30, 2018, stemming from reductions in savings, NOW and money market accounts of $12.4 million, and time deposits of $17.8 million. Growth in all deposit categories for 2018 compared to the 2017 like period was driven by the Company’s acquisition of ABC Bank, which resulted in additional deposits recorded in the second quarter of 2018 of $248.5 million.
Borrowings
As of September 30, 2018, the Bank had $81.9 million outstanding in other short-term borrowings, which were primarily FHLBC advances, compared to $76.6 million in other short-term borrowings outstanding as of June 30, 2018, and $125.0 million of FHLBC advances outstanding as of September 30, 2017.
The Company is indebted on senior notes totaling $44.1 million, net of deferred issuance costs, as of September 30, 2018. The Company is also indebted on $57.7 million of junior subordinated debentures, net of deferred issuance costs, 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 4.34% for the third quarter of 2018, inclusive of debt issuance costs. This compared to the Trust II issuance fixed rate paid prior to June 15, 2017, of 6.77%.
Non-GAAP Presentations: Management has disclosed in this earnings release certain non-GAAP financial measures to evaluate and measure the Company’s performance, including adjusted net income, adjusted earnings per share, the presentation of net interest income and net interest margin on a fully taxable equivalent, and efficiency ratio calculations. Management believes the adjusted earnings per share data is more informative for the user if the per share impact of certain 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 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 15 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. 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, 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.
9
Conference Call
The Company will host an earnings call on Thursday, October 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 November 1, 2018, by dialing 877-481-4010, using Conference ID: 37653.
10
Old Second Bancorp, Inc. and Subsidiaries
(In thousands)
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
| |
|
| September 30, |
| December 31, | ||
|
| 2018 |
| 2017 | ||
Assets |
|
|
|
|
|
|
Cash and due from banks |
| $ | 34,366 |
| $ | 37,444 |
Interest bearing deposits with financial institutions |
|
| 15,956 |
|
| 18,389 |
Cash and cash equivalents |
|
| 50,322 |
|
| 55,833 |
Securities available-for-sale, at fair value |
|
| 542,338 |
|
| 541,439 |
Federal Home Loan Bank Chicago ("FHLBC") and Federal Reserve Bank Chicago ("FRBC") stock |
|
| 10,511 |
|
| 10,168 |
Loans held-for-sale |
|
| 2,911 |
|
| 4,067 |
Loans |
|
| 1,834,949 |
|
| 1,617,622 |
Less: allowance for loan and lease losses |
|
| 19,328 |
|
| 17,461 |
Net loans |
|
| 1,815,621 |
|
| 1,600,161 |
Premises and equipment, net |
|
| 42,752 |
|
| 37,628 |
Other real estate owned |
|
| 6,964 |
|
| 8,371 |
Mortgage servicing rights, net |
|
| 8,131 |
|
| 6,944 |
Goodwill and core deposit intangible |
|
| 21,947 |
|
| 8,922 |
Bank-owned life insurance ("BOLI") |
|
| 61,506 |
|
| 61,764 |
Deferred tax assets, net |
|
| 25,116 |
|
| 25,356 |
Other assets |
|
| 24,354 |
|
| 22,776 |
Total assets |
| $ | 2,612,473 |
| $ | 2,383,429 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 621,580 |
| $ | 572,404 |
Interest bearing: |
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 1,045,886 |
|
| 967,750 |
Time |
|
| 464,904 |
|
| 382,771 |
Total deposits |
|
| 2,132,370 |
|
| 1,922,925 |
Securities sold under repurchase agreements |
|
| 44,333 |
|
| 29,918 |
Other short-term borrowings |
|
| 81,875 |
|
| 115,000 |
Junior subordinated debentures |
|
| 57,674 |
|
| 57,639 |
Senior notes |
|
| 44,133 |
|
| 44,058 |
Notes payable and other borrowings |
|
| 18,050 |
|
| - |
Other liabilities |
|
| 15,908 |
|
| 13,539 |
Total liabilities |
|
| 2,394,343 |
|
| 2,183,079 |
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
Common stock |
|
| 34,717 |
|
| 34,626 |
Additional paid-in capital |
|
| 118,625 |
|
| 117,742 |
Retained earnings |
|
| 167,140 |
|
| 142,959 |
Accumulated other comprehensive (loss) income |
|
| (6,058) |
|
| 1,479 |
Treasury stock |
|
| (96,294) |
|
| (96,456) |
Total stockholders’ equity |
|
| 218,130 |
|
| 200,350 |
Total liabilities and stockholders’ equity |
| $ | 2,612,473 |
| $ | 2,383,429 |
11
Old Second Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| (unaudited) |
| ||||||||
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
|
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| ||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 23,377 |
| $ | 18,208 |
| $ | 64,625 |
| $ | 52,202 |
|
Loans held-for-sale |
|
| 39 |
|
| 34 |
|
| 94 |
|
| 95 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
| 2,491 |
|
| 2,424 |
|
| 7,053 |
|
| 7,994 |
|
Tax exempt |
|
| 2,064 |
|
| 1,628 |
|
| 6,239 |
|
| 4,188 |
|
Dividends from FHLBC and FRBC stock |
|
| 121 |
|
| 94 |
|
| 338 |
|
| 271 |
|
Interest bearing deposits with financial institutions |
|
| 84 |
|
| 37 |
|
| 230 |
|
| 91 |
|
Total interest and dividend income |
|
| 28,176 |
|
| 22,425 |
|
| 78,579 |
|
| 64,841 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 642 |
|
| 239 |
|
| 1,487 |
|
| 695 |
|
Time deposits |
|
| 1,568 |
|
| 1,077 |
|
| 4,187 |
|
| 3,081 |
|
Securities sold under repurchase agreements |
|
| 140 |
|
| 4 |
|
| 323 |
|
| 10 |
|
Other short-term borrowings |
|
| 311 |
|
| 220 |
|
| 916 |
|
| 472 |
|
Junior subordinated debentures |
|
| 930 |
|
| 930 |
|
| 2,784 |
|
| 3,073 |
|
Senior notes |
|
| 672 |
|
| 672 |
|
| 2,016 |
|
| 2,017 |
|
Notes payable and other borrowings |
|
| 173 |
|
| - |
|
| 268 |
|
| - |
|
Total interest expense | �� |
| 4,436 |
|
| 3,142 |
|
| 11,981 |
|
| 9,348 |
|
Net interest and dividend income |
|
| 23,740 |
|
| 19,283 |
|
| 66,598 |
|
| 55,493 |
|
Provision for loan and lease losses |
|
| - |
|
| 300 |
|
| 728 |
|
| 1,050 |
|
Net interest and dividend income after provision for loan and lease losses |
|
| 23,740 |
|
| 18,983 |
|
| 65,870 |
|
| 54,443 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust income |
|
| 1,644 |
|
| 1,468 |
|
| 4,784 |
|
| 4,564 |
|
Service charges on deposits |
|
| 1,923 |
|
| 1,722 |
|
| 5,284 |
|
| 4,955 |
|
Secondary mortgage fees |
|
| 199 |
|
| 195 |
|
| 556 |
|
| 594 |
|
Mortgage servicing rights mark to market (loss) gain |
|
| (11) |
|
| (194) |
|
| 189 |
|
| (756) |
|
Mortgage servicing income |
|
| 471 |
|
| 451 |
|
| 1,550 |
|
| 1,330 |
|
Net gain on sales of mortgage loans |
|
| 965 |
|
| 1,095 |
|
| 3,122 |
|
| 3,715 |
|
Securities gains (losses), net |
|
| 13 |
|
| 102 |
|
| 360 |
|
| (165) |
|
Increase in cash surrender value of BOLI |
|
| 347 |
|
| 362 |
|
| 946 |
|
| 1,071 |
|
Death benefit realized on bank-owned life insurance |
|
| - |
|
| - |
|
| 1,026 |
|
| - |
|
Debit card interchange income |
|
| 1,135 |
|
| 1,075 |
|
| 3,279 |
|
| 3,131 |
|
Gain on disposal and transfer of fixed assets, net |
|
| - |
|
| - |
|
| - |
|
| 10 |
|
Other income |
|
| 1,128 |
|
| 1,567 |
|
| 3,755 |
|
| 3,739 |
|
Total noninterest income |
|
| 7,814 |
|
| 7,843 |
|
| 24,851 |
|
| 22,188 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 11,165 |
|
| 10,049 |
|
| 33,727 |
|
| 31,167 |
|
Occupancy, furniture and equipment |
|
| 1,782 |
|
| 1,482 |
|
| 4,992 |
|
| 4,510 |
|
Computer and data processing |
|
| 1,247 |
|
| 1,081 |
|
| 5,332 |
|
| 3,283 |
|
FDIC insurance |
|
| 162 |
|
| 199 |
|
| 483 |
|
| 512 |
|
General bank insurance |
|
| 230 |
|
| 246 |
|
| 780 |
|
| 780 |
|
Amortization of core deposit intangible |
|
| 136 |
|
| 24 |
|
| 254 |
|
| 74 |
|
Advertising expense |
|
| 492 |
|
| 255 |
|
| 1,325 |
|
| 1,093 |
|
Debit card interchange expense |
|
| 320 |
|
| 285 |
|
| 902 |
|
| 1,033 |
|
Legal fees |
|
| 243 |
|
| 162 |
|
| 688 |
|
| 450 |
|
Other real estate expense, net |
|
| (370) |
|
| 680 |
|
| 232 |
|
| 1,928 |
|
Other expense |
|
| 3,304 |
|
| 2,455 |
|
| 9,636 |
|
| 8,128 |
|
Total noninterest expense |
|
| 18,711 |
|
| 16,918 |
|
| 58,351 |
|
| 52,958 |
|
Income before income taxes |
|
| 12,843 |
|
| 9,908 |
|
| 32,370 |
|
| 23,673 |
|
Provision for income taxes |
|
| 3,201 |
|
| 1,831 |
|
| 6,978 |
|
| 6,023 |
|
Net income available to common stockholders |
| $ | 9,642 |
| $ | 8,077 |
| $ | 25,392 |
| $ | 17,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
| $ | 0.32 |
| $ | 0.27 |
| $ | 0.85 |
| $ | 0.60 |
|
Diluted earnings per share |
|
| 0.32 |
|
| 0.27 |
|
| 0.84 |
|
| 0.59 |
|
|
|
|
|
|
|
|
|
|
Ending common shares outstanding |
| 29,747,078 |
| 29,627,086 |
| 29,747,078 |
| 29,627,086 |
Weighted-average basic shares outstanding |
| 29,747,078 |
| 29,627,086 |
| 29,718,191 |
| 29,591,811 |
Weighted-average diluted shares outstanding |
| 30,383,891 |
| 30,103,609 |
| 30,297,294 |
| 30,019,365 |
12
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Average Balance
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2017 |
| 2018 | ||||||||||||||||
Assets |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr | |||||||
Cash and due from banks |
| $ | 33,585 |
| $ | 39,425 |
| $ | 31,028 |
| $ | 30,972 |
| $ | 29,776 |
| $ | 36,720 |
| $ | 34,608 |
Interest bearing deposits with financial institutions |
|
| 12,121 |
|
| 11,938 |
|
| 11,685 |
|
| 13,147 |
|
| 13,819 |
|
| 19,161 |
|
| 17,975 |
Cash and cash equivalents |
|
| 45,706 |
|
| 51,363 |
|
| 42,713 |
|
| 44,119 |
|
| 43,595 |
|
| 55,881 |
|
| 52,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
| 563,897 |
|
| 586,686 |
|
| 548,432 |
|
| 524,909 |
|
| 549,161 |
|
| 555,202 |
|
| 542,297 |
FHLBC and FRBC stock |
|
| 7,614 |
|
| 7,699 |
|
| 8,339 |
|
| 8,842 |
|
| 8,920 |
|
| 8,619 |
|
| 8,905 |
Loans held-for-sale |
|
| 2,670 |
|
| 3,616 |
|
| 3,244 |
|
| 2,744 |
|
| 2,353 |
|
| 2,868 |
|
| 3,220 |
Loans |
|
| 1,484,556 |
|
| 1,505,572 |
|
| 1,550,229 |
|
| 1,596,928 |
|
| 1,600,594 |
|
| 1,806,209 |
|
| 1,839,341 |
Less: allowance for loan and lease losses |
|
| 16,292 |
|
| 15,779 |
|
| 16,478 |
|
| 17,002 |
|
| 18,263 |
|
| 18,494 |
|
| 19,696 |
Net loans |
|
| 1,468,264 |
|
| 1,489,793 |
|
| 1,533,751 |
|
| 1,579,926 |
|
| 1,582,331 |
|
| 1,787,715 |
|
| 1,819,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment, net |
|
| 38,917 |
|
| 38,395 |
|
| 38,098 |
|
| 37,825 |
|
| 37,472 |
|
| 41,796 |
|
| 42,651 |
Other real estate owned |
|
| 13,464 |
|
| 12,596 |
|
| 10,688 |
|
| 8,601 |
|
| 7,884 |
|
| 7,951 |
|
| 7,801 |
Mortgage servicing rights, net |
|
| 6,543 |
|
| 6,464 |
|
| 6,464 |
|
| 6,821 |
|
| 7,347 |
|
| 7,697 |
|
| 7,915 |
Goodwill and core deposit intangible |
|
| 9,005 |
|
| 8,981 |
|
| 8,956 |
|
| 8,932 |
|
| 8,911 |
|
| 9,035 |
|
| 21,990 |
Bank-owned life insurance ("BOLI") |
|
| 60,446 |
|
| 60,806 |
|
| 61,165 |
|
| 61,527 |
|
| 61,273 |
|
| 60,920 |
|
| 61,283 |
Deferred tax assets, net |
|
| 52,747 |
|
| 48,459 |
|
| 45,635 |
|
| 41,335 |
|
| 26,739 |
|
| 26,825 |
|
| 27,680 |
Other assets |
|
| 11,714 |
|
| 14,227 |
|
| 14,900 |
|
| 16,443 |
|
| 16,881 |
|
| 22,384 |
|
| 21,976 |
Total other assets |
|
| 192,836 |
|
| 189,928 |
|
| 185,906 |
|
| 181,484 |
|
| 166,507 |
|
| 176,608 |
|
| 191,296 |
Total assets |
| $ | 2,280,987 |
| $ | 2,329,085 |
| $ | 2,322,385 |
| $ | 2,342,024 |
| $ | 2,352,867 |
| $ | 2,586,893 |
| $ | 2,617,946 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 525,454 |
| $ | 557,265 |
| $ | 551,768 |
| $ | 556,010 |
| $ | 554,624 |
| $ | 618,765 |
| $ | 625,982 |
Interest bearing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 969,609 |
|
| 977,796 |
|
| 958,926 |
|
| 958,808 |
|
| 970,998 |
|
| 1,059,601 |
|
| 1,064,801 |
Time |
|
| 394,388 |
|
| 392,779 |
|
| 389,037 |
|
| 383,011 |
|
| 382,422 |
|
| 460,909 |
|
| 467,933 |
Total deposits |
|
| 1,889,451 |
|
| 1,927,840 |
|
| 1,899,731 |
|
| 1,897,829 |
|
| 1,908,044 |
|
| 2,139,275 |
|
| 2,158,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under repurchase agreements |
|
| 29,805 |
|
| 35,652 |
|
| 32,800 |
|
| 27,664 |
|
| 40,275 |
|
| 44,655 |
|
| 46,850 |
Other short-term borrowings |
|
| 56,111 |
|
| 58,572 |
|
| 72,065 |
|
| 84,728 |
|
| 87,444 |
|
| 58,199 |
|
| 55,119 |
Junior subordinated debentures |
|
| 57,597 |
|
| 57,609 |
|
| 57,621 |
|
| 57,633 |
|
| 57,645 |
|
| 57,657 |
|
| 57,669 |
Senior Notes |
|
| 43,978 |
|
| 43,995 |
|
| 44,021 |
|
| 44,046 |
|
| 44,071 |
|
| 44,096 |
|
| 44,121 |
Notes payable and other borrowings |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 19,795 |
|
| 20,768 |
Other liabilities |
|
| 25,061 |
|
| 18,047 |
|
| 19,395 |
|
| 26,037 |
|
| 13,969 |
|
| 15,679 |
|
| 20,142 |
Total liabilities |
|
| 2,102,003 |
|
| 2,141,715 |
|
| 2,125,633 |
|
| 2,137,937 |
|
| 2,151,448 |
|
| 2,379,356 |
|
| 2,403,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
| 34,451 |
|
| 34,577 |
|
| 34,626 |
|
| 34,626 |
|
| 34,647 |
|
| 34,717 |
|
| 34,717 |
Additional paid-in capital |
|
| 116,747 |
|
| 117,077 |
|
| 117,340 |
|
| 117,607 |
|
| 117,734 |
|
| 117,793 |
|
| 118,366 |
Retained earnings |
|
| 131,631 |
|
| 136,384 |
|
| 142,657 |
|
| 148,863 |
|
| 147,309 |
|
| 155,553 |
|
| 162,486 |
Accumulated other comprehensive loss |
|
| (7,692) |
|
| (4,310) |
|
| (1,415) |
|
| (553) |
|
| (1,871) |
|
| (4,232) |
|
| (4,714) |
Treasury stock |
|
| (96,243) |
|
| (96,358) |
|
| (96,456) |
|
| (96,456) |
|
| (96,400) |
|
| (96,294) |
|
| (96,294) |
Total stockholders' equity |
|
| 178,894 |
|
| 187,370 |
|
| 196,752 |
|
| 204,087 |
|
| 201,419 |
|
| 207,537 |
|
| 214,561 |
Total liabilities and stockholders' equity |
| $ | 2,280,897 |
| $ | 2,329,085 |
| $ | 2,322,385 |
| $ | 2,342,024 |
| $ | 2,352,867 |
| $ | 2,586,893 |
| $ | 2,617,946 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Earning Assets |
| $ | 2,070,858 |
| $ | 2,115,511 |
| $ | 2,121,929 |
| $ | 2,146,570 |
| $ | 2,174,847 |
| $ | 2,392,059 |
| $ | 2,411,738 |
Total Interest Bearing Liabilities |
|
| 1,551,488 |
|
| 1,566,403 |
|
| 1,554,470 |
|
| 1,555,890 |
|
| 1,582,855 |
|
| 1,744,912 |
|
| 1,757,261 |
13
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2017 |
| 2018 | |||||||||||||||||
|
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr | |||||||
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 16,609 |
| $ | 17,385 |
| $ | 18,208 |
| $ | 18,535 |
| $ | 18,732 |
| $ | 22,512 |
| $ | 23,377 |
Loans held-for-sale |
|
| 24 |
|
| 37 |
|
| 34 |
|
| 28 |
|
| 24 |
|
| 35 |
|
| 39 |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
| 2,963 |
|
| 2,607 |
|
| 2,424 |
|
| 2,208 |
|
| 2,170 |
|
| 2,392 |
|
| 2,491 |
Tax exempt |
|
| 912 |
|
| 1,648 |
|
| 1,628 |
|
| 1,751 |
|
| 2,061 |
|
| 2,114 |
|
| 2,064 |
Dividends from FHLB and FRBC stock |
|
| 85 |
|
| 92 |
|
| 94 |
|
| 99 |
|
| 106 |
|
| 111 |
|
| 121 |
Interest bearing deposits with financial institutions |
|
| 23 |
|
| 31 |
|
| 37 |
|
| 43 |
|
| 49 |
|
| 97 |
|
| 84 |
Total interest and dividend income |
|
| 20,616 |
|
| 21,800 |
|
| 22,425 |
|
| 22,664 |
|
| 23,142 |
|
| 27,261 |
|
| 28,176 |
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 223 |
|
| 233 |
|
| 239 |
|
| 255 |
|
| 344 |
|
| 501 |
|
| 642 |
Time deposits |
|
| 979 |
|
| 1,025 |
|
| 1,077 |
|
| 1,146 |
|
| 1,175 |
|
| 1,444 |
|
| 1,568 |
Securities sold under repurchase agreements |
|
| 2 |
|
| 4 |
|
| 4 |
|
| 7 |
|
| 79 |
|
| 104 |
|
| 140 |
Other short-term borrowings |
|
| 106 |
|
| 146 |
|
| 220 |
|
| 269 |
|
| 329 |
|
| 276 |
|
| 311 |
Junior subordinated debentures |
|
| 1,084 |
|
| 1,059 |
|
| 930 |
|
| 929 |
|
| 927 |
|
| 927 |
|
| 930 |
Senior notes |
|
| 673 |
|
| 672 |
|
| 672 |
|
| 672 |
|
| 672 |
|
| 672 |
|
| 672 |
Notes payable and other borrowings |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 95 |
|
| 173 |
Total interest expense |
|
| 3,067 |
|
| 3,139 |
|
| 3,142 |
|
| 3,278 |
|
| 3,526 |
|
| 4,019 |
|
| 4,436 |
Net interest and dividend income |
|
| 17,549 |
|
| 18,661 |
|
| 19,283 |
|
| 19,386 |
|
| 19,616 |
|
| 23,242 |
|
| 23,740 |
Provision (release) for loan and lease losses |
|
| - |
|
| 750 |
|
| 300 |
|
| 750 |
|
| (722) |
|
| 1,450 |
|
| - |
Net interest and dividend income after provision (release) for loan and lease losses |
|
| 17,549 |
|
| 17,911 |
|
| 18,983 |
|
| 18,636 |
|
| 20,338 |
|
| 21,792 |
|
| 23,740 |
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust income |
|
| 1,458 |
|
| 1,638 |
|
| 1,468 |
|
| 1,639 |
|
| 1,495 |
|
| 1,645 |
|
| 1,644 |
Service charges on deposits |
|
| 1,618 |
|
| 1,615 |
|
| 1,722 |
|
| 1,765 |
|
| 1,592 |
|
| 1,769 |
|
| 1,923 |
Secondary mortgage fees |
|
| 176 |
|
| 223 |
|
| 195 |
|
| 182 |
|
| 162 |
|
| 195 |
|
| 199 |
Mortgage servicing rights mark to market (loss) gain |
|
| (133) |
|
| (429) |
|
| (194) |
|
| (46) |
|
| 305 |
|
| (105) |
|
| (11) |
Mortgage servicing income |
|
| 435 |
|
| 444 |
|
| 451 |
|
| 448 |
|
| 452 |
|
| 627 |
|
| 471 |
Net gain on sales of mortgage loans |
|
| 1,147 |
|
| 1,473 |
|
| 1,095 |
|
| 1,088 |
|
| 917 |
|
| 1,240 |
|
| 965 |
Securities (loss) gain, net |
|
| (136) |
|
| (131) |
|
| 102 |
|
| 639 |
|
| 35 |
|
| 312 |
|
| 13 |
Increase in cash surrender value of BOLI |
|
| 359 |
|
| 350 |
|
| 362 |
|
| 361 |
|
| 248 |
|
| 351 |
|
| 347 |
Death benefit realized on bank-owned life insurance |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,026 |
|
| - |
|
| - |
Debit card interchange income |
|
| 975 |
|
| 1,081 |
|
| 1,075 |
|
| 1,069 |
|
| 1,012 |
|
| 1,132 |
|
| 1,135 |
(Loss) gain on disposal and transfer of fixed assets |
|
| (2) |
|
| 12 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
Other income |
|
| 1,131 |
|
| 1,041 |
|
| 1,567 |
|
| 1,039 |
|
| 1,261 |
|
| 1,366 |
|
| 1,128 |
Total noninterest income |
|
| 7,028 |
|
| 7,317 |
|
| 7,843 |
|
| 8,184 |
|
| 8,505 |
|
| 8,532 |
|
| 7,814 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 10,573 |
|
| 10,545 |
|
| 10,049 |
|
| 8,913 |
|
| 10,207 |
|
| 12,355 |
|
| 11,165 |
Occupancy, furniture and equipment |
|
| 1,566 |
|
| 1,462 |
|
| 1,482 |
|
| 1,441 |
|
| 1,558 |
|
| 1,652 |
|
| 1,782 |
Computer and data processing |
|
| 1,090 |
|
| 1,112 |
|
| 1,081 |
|
| 1,104 |
|
| 1,344 |
|
| 2,741 |
|
| 1,247 |
FDIC insurance |
|
| 148 |
|
| 165 |
|
| 199 |
|
| 146 |
|
| 156 |
|
| 165 |
|
| 162 |
General bank insurance |
|
| 270 |
|
| 264 |
|
| 246 |
|
| 251 |
|
| 251 |
|
| 299 |
|
| 230 |
Amortization of core deposit intangible |
|
| 25 |
|
| 25 |
|
| 24 |
|
| 22 |
|
| 21 |
|
| 97 |
|
| 136 |
Advertising expense |
|
| 386 |
|
| 452 |
|
| 255 |
|
| 412 |
|
| 341 |
|
| 492 |
|
| 492 |
Debit card interchange expense |
|
| 349 |
|
| 399 |
|
| 285 |
|
| 296 |
|
| 281 |
|
| 301 |
|
| 320 |
Legal fees |
|
| 104 |
|
| 184 |
|
| 162 |
|
| 200 |
|
| 159 |
|
| 286 |
|
| 243 |
Other real estate expense, net |
|
| 709 |
|
| 539 |
|
| 680 |
|
| 237 |
|
| 173 |
|
| 429 |
|
| (370) |
Other expense |
|
| 2,834 |
|
| 2,839 |
|
| 2,455 |
|
| 3,169 |
|
| 2,863 |
|
| 3,469 |
|
| 3,304 |
Total noninterest expense |
|
| 18,054 |
|
| 17,986 |
|
| 16,918 |
|
| 16,191 |
|
| 17,354 |
|
| 22,286 |
|
| 18,711 |
Income before income taxes |
|
| 6,523 |
|
| 7,242 |
|
| 9,908 |
|
| 10,629 |
|
| 11,489 |
|
| 8,038 |
|
| 12,843 |
Provision for income taxes |
|
| 2,096 |
|
| 2,096 |
|
| 1,831 |
|
| 13,141 |
|
| 2,000 |
|
| 1,777 |
|
| 3,201 |
Net income (loss) |
| $ | 4,427 |
| $ | 5,146 |
| $ | 8,077 |
| $ | (2,512) |
| $ | 9,489 |
| $ | 6,261 |
| $ | 9,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
| $ | 0.15 |
| $ | 0.17 |
| $ | 0.27 |
| $ | (0.08) |
| $ | 0.32 |
| $ | 0.21 |
| $ | 0.32 |
Diluted earnings (loss) per share |
|
| 0.15 |
|
| 0.17 |
|
| 0.27 |
|
| (0.08) |
|
| 0.31 |
|
| 0.21 |
|
| 0.32 |
14
Reconciliation of Non-GAAP Financial Measures
The tables below provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the periods indicated. Dollar amounts below in thousands, except per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Quarters Ended | ||||||||||||||||
|
| September 30, 2018 |
| June 30, 2018 |
| September 30, 2017 | ||||||||||||
|
| Amount |
| Per share |
| Amount |
| Per Share |
| Amount |
| Per Share | ||||||
Adjusted Net Income and adjusted diluted earnings per share (EPS), excluding certain items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
| $ | 9,642 |
| $ | 0.32 |
| $ | 6,261 |
| $ | 0.21 |
| $ | 8,077 |
| $ | 0.27 |
(Less) / Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related costs, net, after tax |
|
| (61) |
|
| (0.00) |
|
| 2,468 |
|
| 0.08 |
|
| - |
|
| - |
Impact of state tax rate change |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (1,566) |
|
| (0.05) |
Adjusted net income, excluding certain items |
| $ | 9,581 |
| $ | 0.32 |
| $ | 8,729 |
| $ | 0.29 |
| $ | 6,511 |
| $ | 0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Quarters Ended |
|
| Nine Months Ended |
| |||||||||||
|
| September 30, |
| June 30, |
| September 30, |
|
| September 30, |
| |||||||
|
| 2018 |
| 2018 |
| 2017 |
|
| 2018 |
| 2017 |
| |||||
Net Interest Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (GAAP) |
| $ | 28,176 |
| $ | 27,261 |
| $ | 22,425 |
|
| $ | 78,579 |
| $ | 64,841 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 5 |
|
| 5 |
|
| 23 |
|
|
| 21 |
|
| 68 |
|
Securities |
|
| 548 |
|
| 562 |
|
| 876 |
|
|
| 1,658 |
|
| 2,255 |
|
Interest income (TE) |
|
| 28,729 |
|
| 27,828 |
|
| 23,324 |
|
|
| 80,258 |
|
| 67,164 |
|
Interest expense (GAAP) |
|
| 4,436 |
|
| 4,019 |
|
| 3,142 |
|
|
| 11,981 |
|
| 9,348 |
|
Net interest income (TE) |
| $ | 24,293 |
| $ | 23,809 |
| $ | 20,182 |
|
| $ | 68,277 |
| $ | 57,816 |
|
Net interest income (GAAP) |
| $ | 23,740 |
| $ | 23,242 |
| $ | 19,283 |
|
| $ | 66,598 |
| $ | 55,493 |
|
Average interest earning assets |
| $ | 2,411,738 |
| $ | 2,392,059 |
| $ | 2,121,929 |
|
| $ | 2,327,082 |
| $ | 2,102,952 |
|
Net interest margin (GAAP) |
|
| 3.91 | % |
| 3.90 | % |
| 3.61 | % |
|
| 3.83 | % |
| 3.53 | % |
Net interest margin (TE) |
|
| 4.00 | % |
| 3.99 | % |
| 3.77 | % |
|
| 3.92 | % |
| 3.68 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| ||||||
|
| September 30, |
| June 30, |
| September 30, |
| |||
|
| 2018 |
| 2018 |
| 2017 |
| |||
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
| $ | 18,711 |
| $ | 22,286 |
| $ | 16,918 |
|
Less amortization of core deposit |
|
| 136 |
|
| 97 |
|
| 24 |
|
Less other real estate expense, net |
|
| (370) |
|
| 429 |
|
| 680 |
|
Less acquisition related costs |
|
| (82) |
|
| 3,168 |
|
| - |
|
Adjusted noninterest expense |
| $ | 19,027 |
| $ | 18,592 |
| $ | 16,214 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
| $ | 23,740 |
| $ | 23,242 |
| $ | 19,283 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 5 |
|
| 5 |
|
| 23 |
|
Securities |
|
| 548 |
|
| 562 |
|
| 876 |
|
Net interest income (TE) |
|
| 24,293 |
|
| 23,809 |
|
| 20,182 |
|
Noninterest income |
|
| 7,814 |
|
| 8,532 |
|
| 7,843 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Increase in cash surrender value of BOLI (TE) |
|
| 92 |
|
| 93 |
|
| 195 |
|
Noninterest income (TE) |
|
| 7,906 |
|
| 8,625 |
|
| 8,038 |
|
Less securities gain (loss), net |
|
| 13 |
|
| 312 |
|
| 102 |
|
Adjusted noninterest income, plus net interest income (TE) |
| $ | 32,186 |
| $ | 32,122 |
| $ | 28,118 |
|
Efficiency ratio (GAAP) |
|
| 60.06 | % |
| 69.16 | % |
| 60.00 | % |
Adjusted efficiency ratio (non-GAAP) |
|
| 59.11 | % |
| 57.88 | % |
| 57.66 | % |
15