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(NASDAQ:OSBC) | Exhibit 99.1 | |
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Contact: | Bradley S. Adams | For Immediate Release |
| Chief Financial Officer | April 24, 2019 |
| (630) 906-5484 |
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Old Second Reports First Quarter 2019 Net Income of $8.5 million
AURORA, IL, April 24, 2019 – 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 first quarter of 2019. The Company’s net income was $8.5 million, or $0.28 per diluted share, for the first quarter of 2019, compared to net income of $8.6 million, or $0.28 per diluted share, in the fourth quarter of 2018, and net income of $9.5 million, or $0.31 per diluted share, for the first quarter of 2018.
Operating Results
· | First quarter 2019 net income was $8.5 million, reflecting a decrease in earnings of $152,000 from the fourth quarter of 2018, and a decrease in earnings of $1.0 million from the first quarter of 2018. First quarter 2019 financial results were negatively impacted by an $819,000 mark to market loss on mortgage servicing rights, of which $642,000 related solely to movements in interest rates, compared to a $923,000 loss in the fourth quarter of 2018, of which $683,000 related to movements in interest rates. |
· | Adjusted net income, a non-GAAP financial measure, was $8.5 million, or $0.28 per diluted share, for the first quarter of 2019, compared to adjusted net income of $8.7 million, or $0.29 per diluted share, for the fourth quarter of 2018, and adjusted net income of $8.1 million, or $0.27 per diluted share, for the first quarter of 2018. |
o | First quarter 2018 adjusted net income excluded a $1.0 million bank owned life insurance (“BOLI”) death claim, $596,000 of insurance proceeds, after tax, recovered on a previously charged off credit that was taken as a release to the provision for loan and lease losses, and $203,000 in costs, after tax, related to our acquisition of Greater Chicago Financial Corp. and its wholly owned subsidiary, ABC Bank, which was completed on April 20, 2018. |
See the discussion entitled “Non-GAAP Presentations” below and the table on page 15 that provides a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
· | Net interest and dividend income was $24.0 million for the first quarter of 2019, a decrease of $304,000, or 1.2%, from $24.3 million for the fourth quarter of 2018, and an increase of $4.4 million, or 22.5%, from $19.6 million for first quarter of 2018. Net interest and dividend income in the first quarter of 2019 was favorably impacted by loan growth over the past year, as well as the December 2018 increase in interest rates and $379,000 of purchase accounting accretion, compared to $662,000 of purchase accounting accretion in the fourth quarter of 2018, and $148,000 in the first quarter of 2018. Purchase accounting accretion income realized before the second quarter of 2018 was due to our 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 our acquisition of ABC Bank on April 20, 2018. |
1
· | Noninterest income was $6.5 million for the first quarter of 2019, compared to $6.5 million for the fourth quarter of 2018 and $8.5 million for the first quarter of 2018. Total noninterest income remained steady in the first quarter of 2019, compared to the fourth quarter of 2018, as reductions in trust income, service charges on deposit accounts and debit card interchange income in the first quarter of 2019 were largely offset by growth in total residential mortgage banking revenue and an increase in the cash surrender value of BOLI. The decrease in noninterest income for the first quarter of 2019, compared to the first quarter of 2018, was driven primarily by the death benefit received on a BOLI claim in the first quarter of 2018, as well as a decline in the mortgage servicing rights carrying value of $819,000 in the first quarter of 2019, compared to a $305,000 increase in the mortgage servicing rights carrying value in the first quarter of 2019. |
· | Noninterest expense was $19.2 million for the first quarter of 2019, reflecting an increase of $417,000, or 2.2%, compared to $18.8 million for the fourth quarter of 2018, and an increase of $1.8 million, or 10.6%, from $17.4 million for the first quarter of 2018. The increase in noninterest expense in the first quarter of 2019, compared to the fourth quarter of 2018, was primarily attributable to growth in salaries and employee benefits expense primarily due to higher payroll taxes and deferred compensation expense. The increase in noninterest expense in the first quarter of 2019, compared to the first quarter of 2018, is attributable to the ABC Bank acquisition in April 2018, which resulted in an increase in salaries and employee benefits expense, occupancy, furniture and equipment expenses, and amortization of core deposit intangibles. |
· | The provision for income taxes totaled $2.4 million for the first quarter of 2019, compared to $2.9 million for the fourth quarter of 2018 and $2.0 million for the first quarter of 2018. The linked quarter reduction of $539,000 was primarily due to a decrease of $691,000 in pretax income in the first quarter of 2019, compared to the fourth quarter of 2018, as well as income tax credits in the first quarter of 2019 stemming from vested stock awards. The $406,000 increase in provision for income taxes for the year over year quarter was primarily due to the $1.0 million nontaxable death benefit realized on BOLI in the first quarter of 2018. |
· | On April 16, 2019, the Company’s Board of Directors declared a cash dividend of $0.01 per share payable on May 6, 2019, to stockholders of record as of April 26, 2019. |
Capital Ratios
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| March 31, |
| December 31, |
| March 31, | |||
| Well-Capitalized 1 |
| 2019 |
| 2018 |
| 2018 | ||||
The Company |
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Common equity tier 1 capital ratio | N/A |
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| 9.75 | % |
| 9.29 | % |
| 9.82 | % |
Total risk-based capital ratio | N/A |
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| 13.17 | % |
| 12.63 | % |
| 13.58 | % |
Tier 1 risk-based capital ratio | N/A |
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| 12.30 | % |
| 11.78 | % |
| 12.63 | % |
Tier 1 leverage ratio | N/A |
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| 10.44 | % |
| 10.08 | % |
| 10.44 | % |
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The Bank |
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Common equity tier 1 capital ratio | 6.50 | % |
| 13.60 | % |
| 13.29 | % |
| 13.56 | % |
Total risk-based capital ratio | 10.00 | % |
| 14.47 | % |
| 14.14 | % |
| 14.51 | % |
Tier 1 risk-based capital ratio | 8.00 | % |
| 13.60 | % |
| 13.29 | % |
| 13.56 | % |
Tier 1 leverage ratio | 5.00 | % |
| 11.54 | % |
| 11.36 | % |
| 11.19 | % |
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.” |
2
Asset Quality & Earning Assets
· | Nonperforming loans totaled $14.9 million at March 31, 2019, compared to $16.3 million at December 31, 2018, and $12.8 million at March 31, 2018. 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 0.8% at March 31, 2019, 0.9% at December 31, 2018, and 0.8% at March 31, 2018. Purchased credit impaired (“PCI”) loans, which are not considered nonperforming loans due to their accretable yield, from our acquisition of ABC Bank totaled $10.9 million, net of purchase accounting adjustments, at March 31, 2019. |
· | OREO assets totaled $6.4 million at March 31, 2019, compared to $7.2 million at December 31, 2018, and $7.1 million at March 31, 2018. No valuation writedowns were recorded in the first quarter of 2019, compared to $96,000 recorded in the fourth quarter of 2018 and $112,000 in the first quarter of 2018. Nonperforming assets, as a percent of total loans plus OREO, was 1.1% at March 31, 2019, and 1.2% at both December 31, 2018, and March 31, 2018. |
· | Total loans were $1.90 billion at March 31, 2019, reflecting an increase of $6.1 million compared to December 31, 2018, due primarily to growth in the commercial, leases, and real estate-commercial portfolios. Average loans (including loans held-for-sale) for the first quarter of 2019 were $1.90 billion, reflecting an increase of $37.6 million from the fourth quarter of 2018, and an increase of $292.6 million from the first quarter of 2018. Growth in the year over year period is primarily due to our acquisition of ABC Bank, which included $227.6 million of loans recorded, net of purchase accounting adjustments. |
· | Available-for-sale securities totaled $509.1 million at March 31, 2019, compared to $541.2 million at December 31, 2018, and $550.9 million at March 31, 2018. Pretax net security gains of $27,000 were recorded in the first quarter of 2019, compared to no gains or losses in the fourth quarter of 2018, and pretax net security gains of $35,000 in the first quarter of 2018. |
3
Net Interest Income
ANALYSIS OF AVERAGE BALANCES,
TAX EQUIVALENT INCOME / EXPENSE AND RATES
(Dollars in thousands - unaudited)
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| Quarters Ended | ||||||||||||||||||||||
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2018 | ||||||||||||||||||
| Average |
| Income / |
| Rate |
| Average |
| Income / |
| Rate |
| Average |
| Income / |
| Rate | ||||||
| Balance |
| Expense |
| % |
| Balance |
| Expense |
| % |
| Balance |
| Expense |
| % | ||||||
Assets |
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Interest earning deposits with financial institutions | $ | 18,842 |
| $ | 114 |
| 2.45 |
| $ | 19,142 |
| $ | 104 |
| 2.16 |
| $ | 13,819 |
| $ | 49 |
| 1.44 |
Securities: |
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Taxable |
| 236,882 |
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| 2,414 |
| 4.13 |
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| 269,236 |
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| 2,524 |
| 3.72 |
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| 269,330 |
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| 2,170 |
| 3.27 |
Non-taxable (TE) |
| 276,609 |
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| 2,656 |
| 3.89 |
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| 269,646 |
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| 2,661 |
| 3.92 |
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| 279,831 |
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| 2,609 |
| 3.78 |
Total securities |
| 513,491 |
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| 5,070 |
| 4.00 |
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| 538,882 |
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| 5,185 |
| 3.82 |
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| 549,161 |
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| 4,779 |
| 3.53 |
Dividends from FHLBC and FRBC |
| 11,463 |
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| 149 |
| 5.27 |
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| 10,758 |
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| 131 |
| 4.83 |
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| 8,920 |
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| 106 |
| 4.82 |
Loans and loans held-for-sale 1, 2 |
| 1,895,512 |
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| 24,126 |
| 5.16 |
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| 1,857,900 |
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| 24,182 |
| 5.16 |
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| 1,602,947 |
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| 18,767 |
| 4.75 |
Total interest earning assets |
| 2,439,308 |
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| 29,459 |
| 4.90 |
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| 2,426,682 |
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| 29,602 |
| 4.84 |
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| 2,174,847 |
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| 23,701 |
| 4.42 |
Cash and due from banks |
| 33,749 |
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| - |
| - |
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| 34,915 |
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| - |
| - |
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| 29,776 |
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| - |
| - |
Allowance for loan and lease losses |
| (19,235) |
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| - |
| - |
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| (19,247) |
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| - |
| - |
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| (18,263) |
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| - |
| - |
Other noninterest bearing assets |
| 181,767 |
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| - |
| - |
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| 187,355 |
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| - |
| - |
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| 166,507 |
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| - |
| - |
Total assets | $ | 2,635,589 |
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| $ | 2,629,705 |
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| $ | 2,352,867 |
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Liabilities and Stockholders' Equity |
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NOW accounts | $ | 448,518 |
| $ | 379 |
| 0.34 |
| $ | 429,042 |
| $ | 263 |
| 0.24 |
| $ | 429,301 |
| $ | 176 |
| 0.17 |
Money market accounts |
| 299,305 |
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| 270 |
| 0.37 |
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| 315,857 |
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| 292 |
| 0.37 |
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| 275,334 |
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| 109 |
| 0.16 |
Savings accounts |
| 307,740 |
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| 122 |
| 0.16 |
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| 300,845 |
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| 115 |
| 0.15 |
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| 266,363 |
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| 59 |
| 0.09 |
Time deposits |
| 445,076 |
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| 1,618 |
| 1.47 |
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| 461,677 |
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| 1,643 |
| 1.41 |
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| 382,422 |
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| 1,175 |
| 1.25 |
Interest bearing deposits |
| 1,500,639 |
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| 2,389 |
| 0.65 |
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| 1,507,421 |
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| 2,313 |
| 0.61 |
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| 1,353,420 |
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| 1,519 |
| 0.46 |
Securities sold under repurchase agreements |
| 45,157 |
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| 149 |
| 1.34 |
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| 44,628 |
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| 138 |
| 1.23 |
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| 40,275 |
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| 79 |
| 0.80 |
Other short-term borrowings |
| 98,328 |
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| 606 |
| 2.50 |
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| 83,588 |
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| 512 |
| 2.43 |
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| 87,444 |
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| 329 |
| 1.53 |
Junior subordinated debentures |
| 57,692 |
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| 927 |
| 6.52 |
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| 57,681 |
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| 933 |
| 6.42 |
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| 57,645 |
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| 927 |
| 6.52 |
Senior notes |
| 44,171 |
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| 672 |
| 6.17 |
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| 44,146 |
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| 672 |
| 6.04 |
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| 44,071 |
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| 672 |
| 6.18 |
Notes payable and other borrowings |
| 15,273 |
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| 116 |
| 3.08 |
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| 17,987 |
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| 130 |
| 2.87 |
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| - |
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| - |
| - |
Total interest bearing liabilities |
| 1,761,260 |
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| 4,859 |
| 1.12 |
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| 1,755,451 |
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| 4,698 |
| 1.06 |
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| 1,582,855 |
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| 3,526 |
| 0.90 |
Noninterest bearing deposits |
| 625,423 |
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| - |
| - |
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| 634,611 |
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| - |
| - |
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| 554,624 |
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| - |
| - |
Other liabilities |
| 13,750 |
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| - |
| - |
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| 17,108 |
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| - |
| - |
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| 13,969 |
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| - |
| - |
Stockholders' equity |
| 235,156 |
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| - |
| - |
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| 222,535 |
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| - |
| - |
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| 201,419 |
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| - |
| - |
Total liabilities and stockholders' equity | $ | 2,635,589 |
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| $ | 2,629,705 |
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| $ | 2,352,867 |
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Net interest income (TE) 2 |
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| $ | 24,600 |
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| $ | 24,904 |
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| $ | 20,175 |
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Net interest margin (TE) 2 |
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| 4.09 |
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| 4.07 |
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| 3.76 |
Interest bearing liabilities to earning assets |
| 72.20 | % |
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| 72.34 | % |
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| 72.78 | % |
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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 $229,000 for the first quarter of 2019, $508,000 for the fourth quarter of 2018, and $182,000 for the first quarter of 2018. Nonaccrual loans are included in the above stated average balances.
2 Tax equivalent basis is calculated using a marginal tax rate of 21% in 2019 and 2018. See the discussion entitled “Non-GAAP Presentations” below and the table on page 15 that provides a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Tax equivalent net interest income was $24.6 million for the quarter ended March 31, 2019, which reflects a decrease of $304,000 compared to the fourth quarter of 2018, and an increase of $4.4 million compared to the first quarter of 2018. The tax equivalent adjustment for the first quarter of 2019 was $563,000, compared to $564,000 for the fourth quarter of 2018, and $559,000 for the first quarter of 2018. Growth in interest earning assets in the first quarter of 2019, compared to the fourth quarter of 2018, was primarily due to organic loan growth, while growth in both the first quarter of 2019 and fourth quarter of 2018, compared to the first quarter of 2018, was primarily due to our acquisition of ABC Bank in April 2018, which resulted in the addition of $227.6 million of loans recorded, net of purchase accounting adjustments. Quarterly average earning assets increased $12.6 million to $2.44 billion for the quarter ended March 31, 2019, compared to $2.43 billion for the fourth quarter of 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 $37.6 million for the quarter ended March 31, 2019, compared to the quarter ended December 31, 2018, while the year over year growth in first quarter average loans, including loans held-for-sale, was $292.6 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 primarily by commercial loan and lease portfolio originations, as well as a home equity loan (“HELOC”) portfolio purchase of $20.7 million in the fourth quarter of 2018.
4
Tax equivalent securities income decreased $115,000 in the first quarter of 2019 compared to the fourth quarter of 2018, but increased by $291,000 in the first quarter of 2019, compared to the first quarter of 2018, due primarily to higher yielding taxable securities held. Our securities portfolio has been repositioned in the last year into higher yielding taxable and tax exempt securities, while lower yielding securities were sold or called. This has resulted in a lower security volume, but a higher yield overall. The rising interest rate environment drove a 41 basis point increase for taxable securities income in the first quarter of 2019, compared to the fourth quarter of 2018, and an 86 basis point increase from the first quarter of 2018.
The cost of interest bearing liabilities for the first quarter of 2019 increased by six basis points from the fourth quarter of 2018, and increased by 22 basis points from the first quarter of 2018. Average interest bearing liabilities increased $5.8 million in the first quarter of 2019, compared to the fourth quarter of 2018, primarily driven by an increase in other short-term borrowings. Due to the decline in funding available from average deposits and average loan growth, average short-term borrowings increased $14.7 million in the first quarter of 2019, compared to the fourth quarter of 2018. Total average interest bearing liabilities increased $178.4 million in the first quarter of 2019, compared to the first quarter of 2018, due to the ABC Bank acquisition, which resulted in the addition of $248.5 million of deposits and $40.0 million of borrowings, net of purchase accounting adjustments. Growth in average demand deposits in the year over year period of $70.8 million has assisted the Company in controlling the cost of funds stemming from average interest bearing deposits, which totaled 0.65% for the first quarter of 2019. 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 March 31, 2019, average other short-term borrowings, which consisted solely of FHLBC advances at period end, increased to $98.3 million compared to $83.6 million for the quarter ended December 31, 2018, and $87.4 million for the quarter ended March 31, 2018. Average rates paid on short-term FHLBC advances have increased from 1.53% in the first quarter of 2018 to 2.50% for the first quarter of 2019, reflecting the rising interest rate environment. The Company’s junior subordinated debt issuances and senior debt issuance reflected no material change in rates or volume from the linked quarter or year over year quarter. Finally, average notes payable and other borrowings included $15.3 million and $18.0 million of long-term FHLBC advances acquired in our acquisition of ABC Bank for the first quarter of 2019 and fourth quarter of 2018, respectively.
The net interest margin (TE) increased two basis points to 4.09% for the first quarter of 2019 compared to 4.07% for the fourth quarter of 2018 due primarily to the rising interest rate environment, which increased income from average earning assets more significantly than expenses related to average interest bearing liabilities, as well as growth in interest earning assets. The net interest margin (TE) in the first quarter of 2019 was 33 basis points higher than the first quarter of 2018, due primarily to increases in total interest earning assets and purchase accounting accretion stemming from our acquisition of ABC Bank, as well as the rising interest rate environment, which increased income from average earning assets more significantly than expenses on average interest bearing liabilities.
Noninterest Income
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| 1st Quarter 2019 |
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Noninterest Income |
| Three Months Ended |
| Percent Change From |
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(dollars in thousands) |
| March 31, |
| December 31, |
| March 31, |
| December 31, |
| March 31, |
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| 2019 |
| 2018 |
| 2018 |
| 2018 |
| 2018 |
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Trust income |
| $ | 1,486 |
| $ | 1,633 |
| $ | 1,495 |
| (9.0) |
| (0.6) |
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Service charges on deposits |
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| 1,862 |
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| 2,044 |
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| 1,592 |
| (8.9) |
| 17.0 |
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Residential mortgage banking revenue |
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Secondary mortgage fees |
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| 136 |
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| 140 |
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| 162 |
| (2.9) |
| (16.0) |
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Mortgage servicing rights mark to market (loss) |
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| (819) |
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| (923) |
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| 305 |
| 11.3 |
| (368.5) |
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Mortgage servicing income |
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| 457 |
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| 389 |
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| 452 |
| 17.5 |
| 1.1 |
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Net gain on sales of mortgage loans |
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| 762 |
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| 669 |
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| 917 |
| 13.9 |
| (16.9) |
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Total residential mortgage banking revenue |
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| 536 |
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| 275 |
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| 1,836 |
| 94.9 |
| (70.8) |
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Securities gain, net |
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| 27 |
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| - |
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| 35 |
| N/M |
| (22.9) |
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Increase in cash surrender value of BOLI |
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| 458 |
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| 38 |
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| 248 |
| N/M |
| 84.7 |
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Death benefit realized on BOLI |
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| - |
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| - |
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| 1,026 |
| - |
| (100.0) |
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Debit card interchange income |
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| 987 |
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| 1,141 |
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| 1,012 |
| (13.5) |
| (2.5) |
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Other income |
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| 1,126 |
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| 1,371 |
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| 1,261 |
| (17.9) |
| (10.7) |
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Total noninterest income |
| $ | 6,482 |
| $ | 6,502 |
| $ | 8,505 |
| (0.3) |
| (23.8) |
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The nominal decrease in noninterest income in the first quarter of 2019, compared to the fourth quarter of 2018, was driven primarily by reductions in trust income, service charges on deposits, debit card interchange income
5
and other income which reduced net income by an aggregate of $728,000. These reductions were largely offset by aggregate increases of $708,000 resulting from growth in total residential mortgage banking revenue, securities gain, net, and an increase in the cash surrender value of BOLI.
The decrease in noninterest income for the year over year period of $2.0 million was primarily driven by a $1.3 million reduction in total residential mortgage banking revenue stemming from rising interest rates and the resultant mark to market loss on mortgage servicing rights. In addition, the first quarter of 2018 included a death benefit received on a BOLI claim of $1.0 million which was not repeated in 2019. These reductions were partially offset by aggregate increases of $480,000 resulting from growth in service charges on deposits and the cash surrender value of BOLI. The decrease in other income for the first quarter of 2019, compared to the first quarter of 2018, was primarily attributable to commercial swap fee income which decreased $56,000, and legal fee recoveries of $215,000 recorded in the first quarter of 2018.
Noninterest Expense
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| 1st Quarter 2019 |
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Noninterest Expense |
| Three Months Ended |
| Percent Change From |
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(dollars in thousands) |
| March 31, |
| December 31, |
| March 31, |
| December 31, |
| March 31, |
| |||
|
| 2019 |
| 2018 |
| 2018 |
| 2018 |
| 2018 |
| |||
Salaries |
| $ | 8,634 |
| $ | 8,484 |
| $ | 7,335 |
| 1.8 |
| 17.7 |
|
Officers incentive |
|
| 882 |
|
| 784 |
|
| 787 |
| 12.5 |
| 12.1 |
|
Benefits and other |
|
| 2,096 |
|
| 1,167 |
|
| 2,085 |
| 79.6 |
| 0.5 |
|
Total salaries and employee benefits |
|
| 11,612 |
|
| 10,435 |
|
| 10,207 |
| 11.3 |
| 13.8 |
|
Occupancy, furniture and equipment expense |
|
| 1,989 |
|
| 1,922 |
|
| 1,558 |
| 3.5 |
| 27.7 |
|
Computer and data processing |
|
| 1,332 |
|
| 1,413 |
|
| 1,344 |
| (5.7) |
| (0.9) |
|
FDIC insurance |
|
| 174 |
|
| 170 |
|
| 156 |
| 2.4 |
| 11.5 |
|
General bank insurance |
|
| 250 |
|
| 259 |
|
| 251 |
| (3.5) |
| (0.4) |
|
Amortization of core deposit intangible asset |
|
| 132 |
|
| 133 |
|
| 21 |
| (0.8) |
| 528.6 |
|
Advertising expense |
|
| 234 |
|
| 242 |
|
| 341 |
| (3.3) |
| (31.4) |
|
Debit card interchange expense |
|
| 147 |
|
| 38 |
|
| 281 |
| 286.8 |
| (47.7) |
|
Legal fees |
|
| 126 |
|
| 147 |
|
| 159 |
| (14.3) |
| (20.8) |
|
Other real estate owned expense, net |
|
| 50 |
|
| 165 |
|
| 173 |
| (69.7) |
| (71.1) |
|
Other expense |
|
| 3,148 |
|
| 3,853 |
|
| 2,863 |
| (18.3) |
| 10.0 |
|
Total noninterest expense |
| $ | 19,194 |
| $ | 18,777 |
| $ | 17,354 |
| 2.2 |
| 10.6 |
|
Efficiency ratio (GAAP) |
|
| 62.35 | % |
| 59.92 | % |
| 63.41 | % |
|
|
|
|
Adjusted efficiency ratio (non-GAAP)1 |
|
| 60.98 | % |
| 58.44 | % |
| 61.10 | % |
|
|
|
|
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 BOLI. See the discussion entitled “Non-GAAP Presentations” below and the table on page 15 that provides a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
Noninterest expense for the first quarter of 2019 increased $417,000, or 2.2%, compared to the fourth quarter of 2018, and increased $1.8 million, or 10.6%, compared to the first quarter of 2018. The linked quarter increase is primarily attributable to a $1.2 million increase in salaries and employee benefits, as the fourth quarter of 2018 reflected various accrual reversals and lower levels of payroll taxes. This increase was partially offset by a $705,000 decrease in other expense in the first quarter of 2019, compared to the fourth quarter of 2018, due to an accrual recorded in late 2018 for a commercial mortgage loan escrow, as well as other year-end accruals for appraisals and consulting expenses. The year over year variance is primarily attributable to our ABC Bank acquisition, which resulted in an increase in salaries and employee benefits expense of $1.4 million, occupancy, furniture and equipment expenses of $431,000, and amortization of core deposit intangibles of $111,000 for the first quarter of 2019, compared to the first quarter of 2018. Partially offsetting the year over year increases were reductions to debit card interchange expense of $134,000 in the first quarter of 2019 due to an accrual reduction regarding a discontinued debit card points program, a reduction in OREO valuation reserve expense of $112,000, and a decrease in advertising expense of $107,000. Other expense increased in the first quarter of 2019, compared to the first quarter of 2018, due to director’s fees, external audit fees, and growth in ATM operating expenses attributable to additional ATMs acquired from our ABC Bank acquisition.
6
Earning Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| March 31, 2019 |
| ||
Loans |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| March 31, |
| December 31, |
| March 31, |
| December 31, |
| March 31, |
| |||
|
| 2019 |
| 2018 |
| 2018 |
| 2018 |
| 2018 |
| |||
Commercial |
| $ | 324,450 |
| $ | 314,323 |
| $ | 281,134 |
| 3.2 |
| 15.4 |
|
Leases |
|
| 87,730 |
|
| 78,806 |
|
| 66,344 |
| 11.3 |
| 32.2 |
|
Real estate - commercial |
|
| 835,904 |
|
| 820,941 |
|
| 713,422 |
| 1.8 |
| 17.2 |
|
Real estate - construction |
|
| 94,787 |
|
| 108,390 |
|
| 91,479 |
| (12.6) |
| 3.6 |
|
Real estate - residential |
|
| 399,866 |
|
| 407,068 |
|
| 309,376 |
| (1.8) |
| 29.2 |
|
Home equity line of credit "HELOC" |
|
| 133,859 |
|
| 140,442 |
|
| 129,234 |
| (4.7) |
| 3.6 |
|
Other1 |
|
| 14,018 |
|
| 14,439 |
|
| 9,845 |
| (2.9) |
| 42.4 |
|
Total loans, excluding deferred loan costs and PCI |
|
| 1,890,614 |
|
| 1,884,409 |
|
| 1,600,834 |
| 0.3 |
| 18.1 |
|
Net deferred loan costs |
|
| 1,681 |
|
| 1,653 |
|
| 978 |
| 1.7 |
| 71.9 |
|
Total loans, excluding PCI |
|
| 1,892,295 |
|
| 1,886,062 |
|
| 1,601,812 |
| 0.3 |
| 18.1 |
|
PCI loans, net of purchase accounting adjustments |
|
| 10,851 |
|
| 10,965 |
|
| - |
| (1.0) |
| N/M |
|
Total loans |
| $ | 1,903,146 |
| $ | 1,897,027 |
| $ | 1,601,812 |
| 0.3 |
| 18.8 |
|
N/M - Not meaningful.
1 Other class includes consumer and overdrafts.
Total loans increased by $6.1 million at the end of the first quarter of 2019 compared to December 31, 2018, and increased $301.3 million year over year. The majority of the year over year increase is due to $227.6 million of loans recorded, net of purchase accounting adjustments, from our acquisition of ABC Bank in April 2018. In addition, the Company experienced organic commercial loan and lease growth in the year over year period, and also made purchases of HELOCs totaling $20.7 million in the fourth quarter of 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| March 31, 2019 |
| ||
Securities |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| March 31, |
| December 31, |
| March 31, |
| December 31, |
| March 31, |
| |||
|
| 2019 |
| 2018 |
| 2018 |
| 2018 |
| 2018 |
| |||
Securities available-for-sale, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury |
| $ | 3,960 |
| $ | 3,923 |
| $ | 3,895 |
| 0.9 |
| 1.7 |
|
U.S. government agencies |
|
| 10,360 |
|
| 10,951 |
|
| 12,730 |
| (5.4) |
| (18.6) |
|
U.S. government agency mortgage-backed |
|
| 15,306 |
|
| 14,075 |
|
| 13,844 |
| 8.7 |
| 10.6 |
|
States and political subdivisions |
|
| 281,172 |
|
| 274,067 |
|
| 285,540 |
| 2.6 |
| (1.5) |
|
Corporate bonds |
|
| - |
|
| - |
|
| 703 |
| - |
| (100.0) |
|
Collateralized mortgage obligations |
|
| 64,330 |
|
| 64,429 |
|
| 63,744 |
| (0.2) |
| 0.9 |
|
Asset-backed securities |
|
| 70,811 |
|
| 109,514 |
|
| 110,870 |
| (35.3) |
| (36.1) |
|
Collateralized loan obligations |
|
| 63,151 |
|
| 64,289 |
|
| 59,616 |
| (1.8) |
| 5.9 |
|
Total securities available-for-sale |
| $ | 509,090 |
| $ | 541,248 |
| $ | 550,942 |
| (5.9) | �� | (7.6) |
|
The investment portfolio was $509.1 million as of March 31, 2019, a decrease of $32.2 million from $541.2 million as of December 31, 2018, and a decrease of $41.9 million from March 31, 2018. The portfolio composition has remained relatively static over the most recent quarter, with the one exception being a decline in asset-backed securities of $38.7 million. The largely consistent 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 activity that did occur in the first quarter of 2019 resulted in net securities gains of $27,000, compared to no security gains or losses in the fourth quarter of 2018, and $35,000 of net security gains in the first quarter of 2018.
7
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| March 31, 2019 | ||
Nonperforming assets |
| As of |
| Percent Change From | |||||||||
(dollars in thousands) |
| March 31, |
| December 31, |
| March 31, |
| December 31, |
| March 31, | |||
|
| 2019 |
| 2018 |
| 2018 |
| 2018 |
| 2018 | |||
Nonaccrual loans |
| $ | 13,383 |
| $ | 13,741 |
| $ | 11,059 |
| (2.6) |
| 21.0 |
Performing troubled debt restructured loans accruing interest |
|
| 1,550 |
|
| 1,683 |
|
| 1,332 |
| (7.9) |
| 16.4 |
Loans past due 90 days or more and still accruing interest |
|
| 4 |
|
| 917 |
|
| 401 |
| (99.6) |
| (99.0) |
Total nonperforming loans |
|
| 14,937 |
|
| 16,341 |
|
| 12,792 |
| (8.6) |
| 16.8 |
Other real estate owned |
|
| 6,365 |
|
| 7,175 |
|
| 7,063 |
| (11.3) |
| (9.9) |
Total nonperforming assets |
| $ | 21,302 |
| $ | 23,516 |
| $ | 19,855 |
| (9.4) |
| 7.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans, net of purchase accounting adjustments |
| $ | 10,851 |
| $ | 10,965 |
| $ | - |
| (1.0) |
| N/M |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-89 days past due loans |
| $ | 7,544 |
| $ | 10,989 |
| $ | 3,001 |
|
|
|
|
Nonaccrual loans to total loans |
|
| 0.7 | % |
| 0.7 | % |
| 0.7 | % |
|
|
|
Nonperforming loans to total loans |
|
| 0.8 | % |
| 0.9 | % |
| 0.8 | % |
|
|
|
Nonperforming assets to total loans plus OREO |
|
| 1.1 | % |
| 1.2 | % |
| 1.2 | % |
|
|
|
Purchased credit-impaired loans to total loans |
|
| 0.6 | % |
| 0.6 | % |
| - | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses |
| $ | 19,316 |
| $ | 19,006 |
| $ | 18,188 |
|
|
|
|
Allowance for loan and lease losses to total loans |
|
| 1.0 | % |
| 1.0 | % |
| 1.1 | % |
|
|
|
Allowance for loan and lease losses to nonaccrual loans |
|
| 144.3 | % |
| 138.3 | % |
| 164.5 | % |
|
|
|
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. We do not consider PCI loans, which showed evidence of deteriorated credit quality at acquisition, to be nonperforming assets as long as their cash flows and the timing of such cash flows continue to be estimable and probable of collection. Nonperforming loans to total loans was 0.8% in the first quarter of 2019, 0.9% in the fourth quarter of 2018, and 0.8% for the first quarter of 2018. Nonperforming assets to total loans plus OREO ended at 1.1% in the first quarter of 2019 compared to 1.2% in the fourth quarter of 2018, and 1.2% for the first quarter of 2018, reflecting stable nonperforming metrics as loan portfolio growth occurred over the last year, as well as continued OREO liquidations over the past year and write-downs recorded in 2018. Finally, the allowance for loan and lease losses to total loans was 1.0% as of March 31, 2019, and December 31, 2018, which is a slight decrease from 1.1% for the first quarter of 2018.
The following tables detail the accretable discount on all of our purchased loans as of March 31, 2019 and December 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accretable Discount - Non-PCI Loans |
| Accretable Discount - PCI Loans |
| Non-Accretable Discount - PCI Loans |
| Total | ||||
Beginning balance, January 1, 2019 |
| $ | 1,867 |
| $ | 1,099 |
| $ | 5,969 |
| $ | 8,935 |
Purchases |
|
| - |
|
| - |
|
| - |
|
| - |
Accretion |
|
| (365) |
|
| (14) |
|
| - |
|
| (379) |
Ending balance, March 31, 2019 |
| $ | 1,502 |
| $ | 1,085 |
| $ | 5,969 |
| $ | 8,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accretable Discount - Non-PCI Loans |
| Accretable Discount - PCI Loans |
| Non-Accretable Discount - PCI Loans |
| Total | ||||
Beginning balance, October 1, 2018 |
| $ | 2,310 |
| $ | 1,218 |
| $ | 6,069 |
| $ | 9,597 |
Purchases |
|
| - |
|
| - |
|
| - |
|
| - |
Accretion |
|
| (443) |
|
| (119) |
|
| (100) |
|
| (662) |
Ending balance, December 31, 2018 |
| $ | 1,867 |
| $ | 1,099 |
| $ | 5,969 |
| $ | 8,935 |
.
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| March 31, 2019 |
| ||
Classified loans |
| As of |
| Percent Change From |
| |||||||||
(dollars in thousands) |
| March 31, |
| December 31, |
| March 31, |
| December 31, |
| March 31, |
| |||
|
| 2019 |
| 2018 |
| 2018 |
| 2018 |
| 2018 |
| |||
Commercial |
| $ | 7,075 |
| $ | 137 |
| $ | - |
| N/M |
| N/M |
|
Leases |
|
| 114 |
|
| - |
|
| 610 |
| N/M |
| (81.3) |
|
Real estate-commercial, nonfarm |
|
| 22,079 |
|
| 22,661 |
|
| 6,098 |
| (2.6) |
| 262.1 |
|
Real estate-commercial, farm |
|
| 1,222 |
|
| 1,222 |
|
| 2,439 |
| - |
| (49.9) |
|
Real estate-construction |
|
| 2,589 |
|
| 2,610 |
|
| 371 |
| (0.8) |
| 597.8 |
|
Real estate-residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor |
|
| 991 |
|
| 1,216 |
|
| 436 |
| (18.5) |
| 127.3 |
|
Multi-Family |
|
| 487 |
|
| 979 |
|
| - |
| (50.3) |
| N/M |
|
Owner occupied |
|
| 4,728 |
|
| 4,524 |
|
| 5,476 |
| 4.5 |
| (13.7) |
|
HELOC |
|
| 1,966 |
|
| 1,889 |
|
| 2,038 |
| 4.1 |
| (3.5) |
|
Other1 |
|
| 28 |
|
| 31 |
|
| 18 |
| (9.7) |
| 55.6 |
|
Total classified loans, excluding PCI |
|
| 41,279 |
|
| 35,269 |
|
| 17,486 |
| 17.0 |
| 136.1 |
|
PCI loans, net of purchase accounting adjustments |
|
| 10,851 |
|
| 10,965 |
|
| - |
| (1.0) |
| N/M |
|
Total classified loans |
| $ | 52,130 |
| $ | 46,234 |
| $ | 17,486 |
| 12.8 |
| 198.1 |
|
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 $52.1 million as of March 31, 2019, an increase of $5.9 million, or 12.8%, from the prior quarter, and an increase of $34.6 million, or 198.1%, from the like quarter of 2018. The $10.9 million of PCI loans as of March 31, 2019, and $11.0 million as of December 31, 2018, stems from our acquisition of ABC Bank.
Net Charge-off Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan Charge-offs, net of recoveries | Quarters Ended | |||||||||||||
(dollars in thousands) | March 31, |
| % of |
| December 31, |
| % of |
| March 31, |
| % of | |||
| 2019 |
| Total 2 |
| 2018 |
| Total 2 |
| 2018 |
| Total 2 | |||
Commercial | $ | (18) |
| (12.9) |
| $ | (13) |
| (1.6) |
| $ | (1) |
| 0.1 |
Leases |
| - |
| - |
|
| - |
| - |
|
| 5 |
| (0.3) |
Real estate-commercial, nonfarm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner general purpose |
| 87 |
| 62.1 |
|
| 14 |
| 1.7 |
|
| (41) |
| 2.8 |
Owner special purpose |
| (3) |
| (2.1) |
|
| - |
| - |
|
| (21) |
| 1.4 |
Non-owner general purpose |
| (15) |
| (10.7) |
|
| 903 |
| 109.9 |
|
| (313) |
| 21.6 |
Non-owner special purpose |
| 139 |
| 99.3 |
|
| - |
| - |
|
| (1) |
| 0.1 |
Retail properties |
| - |
| - |
|
| - |
| - |
|
| (87) |
| 6.0 |
Total real estate-commercial, nonfarm |
| 208 |
| 148.6 |
|
| 917 |
| 111.6 |
|
| (463) |
| 31.9 |
Real estate-construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilder |
| (1) |
| (0.7) |
|
| - |
| - |
|
| 2 |
| (0.1) |
Land |
| - |
| - |
|
| - |
| - |
|
| (4) |
| 0.3 |
Commercial speculative |
| 2 |
| 1.4 |
|
| - |
| - |
|
| (18) |
| 1.2 |
All other |
| - |
| - |
|
| - |
| - |
|
| 1 |
| (0.1) |
Total real estate-construction |
| 1 |
| 0.7 |
|
| - |
| - |
|
| (19) |
| 1.3 |
Real estate-residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor |
| (10) |
| (7.1) |
|
| (11) |
| (1.3) |
|
| (30) |
| 2.1 |
Multi-Family |
| (8) |
| (5.7) |
|
| (15) |
| (1.8) |
|
| (175) |
| 12.1 |
Owner occupied |
| (14) |
| (10.0) |
|
| (11) |
| (1.3) |
|
| (766) |
| 52.9 |
Total real estate-residential |
| (32) |
| (22.8) |
|
| (37) |
| (4.4) |
|
| (971) |
| 67.1 |
HELOC |
| (46) |
| (32.9) |
|
| (81) |
| (9.9) |
|
| (20) |
| 1.4 |
Other1 |
| 27 |
| 19.3 |
|
| 36 |
| 4.3 |
|
| 20 |
| (1.5) |
Net charge-offs / (recoveries) | $ | 140 |
| 100.0 |
| $ | 822 |
| 100.0 |
| $ | (1,449) |
| 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 March 31, 2019, were $345,000 compared to $1.1 million for the quarter ended December 31, 2018, and a minimal level for the quarter ended March 31, 2018. Gross recoveries were $205,000 for the quarter ended March 31, 2019, compared to $229,000 for the quarter ended December 31, 2018, and
9
$1.4 million for the first quarter of 2018. Continued recoveries are indicative of the ongoing aggressive efforts by management to effectively manage and resolve prior charge-offs.
Deposits
Total deposits were $2.12 billion at March 31, 2019, which reflects an increase of $6.8 million compared to December 31, 2018, stemming from aggregate growth in demand, savings and NOW accounts of $49.6 million, which was partially offset by decreases in money market and time deposits of $43.0 million. Year over year, total deposits increased $161.5 million reflecting increases in all major deposit categories, due primarily to $248.5 million of deposits purchased in our ABC Bank acquisition in April 2018.
Borrowings
As of March 31, 2019, we had $85.0 million outstanding in other short-term borrowings compared to $149.5 million as of December 31, 2018, and $45.0 million as of March 31, 2018.
The Company is indebted on senior notes totaling $44.2 million, net of deferred issuance costs, as of March 31, 2019. 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. Notes payable and other borrowings is comprised of $13.2 million of long-term FHLBC advances acquired with our ABC Bank acquisition, with terms ranging from June 29, 2020, to February 2, 2026.
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 basis, 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 6. 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.
Conference Call
The Company will host an earnings call on Thursday, April 25, 2019, 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 844-602-0380. 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 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on May 2, 2019, by dialing 877-481-4010, using Conference ID: 45525.
10
Old Second Bancorp, Inc. and Subsidiaries
(In thousands)
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
| |
|
| March 31, |
| December 31, | ||
|
| 2019 |
| 2018 | ||
Assets |
|
|
|
|
|
|
Cash and due from banks |
| $ | 28,898 |
| $ | 38,599 |
Interest earning deposits with financial institutions |
|
| 11,438 |
|
| 16,636 |
Cash and cash equivalents |
|
| 40,336 |
|
| 55,235 |
Securities available-for-sale, at fair value |
|
| 509,090 |
|
| 541,248 |
Federal Home Loan Bank Chicago ("FHLBC") and Federal Reserve Bank Chicago ("FRBC") stock |
|
| 11,179 |
|
| 13,433 |
Loans held-for-sale |
|
| 2,134 |
|
| 2,984 |
Loans |
|
| 1,903,146 |
|
| 1,897,027 |
Less: allowance for loan and lease losses |
|
| 19,316 |
|
| 19,006 |
Net loans |
|
| 1,883,830 |
|
| 1,878,021 |
Premises and equipment, net |
|
| 42,025 |
|
| 42,439 |
Other real estate owned |
|
| 6,365 |
|
| 7,175 |
Mortgage servicing rights, net |
|
| 6,715 |
|
| 7,357 |
Goodwill and core deposit intangible |
|
| 21,682 |
|
| 21,814 |
Bank-owned life insurance ("BOLI") |
|
| 62,002 |
|
| 61,544 |
Deferred tax assets, net |
|
| 17,271 |
|
| 21,280 |
Other assets |
|
| 20,902 |
|
| 23,473 |
Total assets |
| $ | 2,623,531 |
| $ | 2,676,003 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 629,909 |
| $ | 618,830 |
Interest bearing: |
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 1,061,216 |
|
| 1,040,668 |
Time |
|
| 432,387 |
|
| 457,175 |
Total deposits |
|
| 2,123,512 |
|
| 2,116,673 |
Securities sold under repurchase agreements |
|
| 42,361 |
|
| 46,632 |
Other short-term borrowings |
|
| 85,000 |
|
| 149,500 |
Junior subordinated debentures |
|
| 57,698 |
|
| 57,686 |
Senior notes |
|
| 44,183 |
|
| 44,158 |
Notes payable and other borrowings |
|
| 13,207 |
|
| 15,379 |
Other liabilities |
|
| 14,315 |
|
| 16,894 |
Total liabilities |
|
| 2,380,276 |
|
| 2,446,922 |
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
Common stock |
|
| 34,825 |
|
| 34,720 |
Additional paid-in capital |
|
| 119,126 |
|
| 119,081 |
Retained earnings |
|
| 183,634 |
|
| 175,463 |
Accumulated other comprehensive (loss) income |
|
| 1,736 |
|
| (4,079) |
Treasury stock |
|
| (96,066) |
|
| (96,104) |
Total stockholders’ equity |
|
| 243,255 |
|
| 229,081 |
Total liabilities and stockholders’ equity |
| $ | 2,623,531 |
| $ | 2,676,003 |
11
Old Second Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except share data)
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| |||
|
| Three Months Ended March 31, |
| ||||
|
| 2019 |
| 2018 |
| ||
Interest and dividend income |
|
|
|
|
|
|
|
Loans, including fees |
| $ | 24,099 |
| $ | 18,732 |
|
Loans held-for-sale |
|
| 22 |
|
| 24 |
|
Securities: |
|
|
|
|
|
|
|
Taxable |
|
| 2,414 |
|
| 2,170 |
|
Tax exempt |
|
| 2,098 |
|
| 2,061 |
|
Dividends from FHLBC and FRBC stock |
|
| 149 |
|
| 106 |
|
Interest bearing deposits with financial institutions |
|
| 114 |
|
| 49 |
|
Total interest and dividend income |
|
| 28,896 |
|
| 23,142 |
|
Interest expense |
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 771 |
|
| 344 |
|
Time deposits |
|
| 1,618 |
|
| 1,175 |
|
Securities sold under repurchase agreements |
|
| 149 |
|
| 79 |
|
Other short-term borrowings |
|
| 606 |
|
| 329 |
|
Junior subordinated debentures |
|
| 927 |
|
| 927 |
|
Senior notes |
|
| 672 |
|
| 672 |
|
Notes payable and other borrowings |
|
| 116 |
|
| - |
|
Total interest expense |
|
| 4,859 |
|
| 3,526 |
|
Net interest and dividend income |
|
| 24,036 |
|
| 19,616 |
|
Provision (release) for loan and lease losses |
|
| 450 |
|
| (722) |
|
Net interest and dividend income after provision for loan and lease losses |
|
| 23,586 |
|
| 20,338 |
|
Noninterest income |
|
|
|
|
|
|
|
Trust income |
|
| 1,486 |
|
| 1,495 |
|
Service charges on deposits |
|
| 1,862 |
|
| 1,592 |
|
Secondary mortgage fees |
|
| 136 |
|
| 162 |
|
Mortgage servicing rights mark to market (loss) |
|
| (819) |
|
| 305 |
|
Mortgage servicing income |
|
| 457 |
|
| 452 |
|
Net gain on sales of mortgage loans |
|
| 762 |
|
| 917 |
|
Securities gains (losses), net |
|
| 27 |
|
| 35 |
|
Increase in cash surrender value of BOLI |
|
| 458 |
|
| 248 |
|
Death benefit realized on bank-owned life insurance |
|
| - |
|
| 1,026 |
|
Debit card interchange income |
|
| 987 |
|
| 1,012 |
|
Other income |
|
| 1,126 |
|
| 1,261 |
|
Total noninterest income |
|
| 6,482 |
|
| 8,505 |
|
Noninterest expense |
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 11,612 |
|
| 10,207 |
|
Occupancy, furniture and equipment |
|
| 1,989 |
|
| 1,558 |
|
Computer and data processing |
|
| 1,332 |
|
| 1,344 |
|
FDIC insurance |
|
| 174 |
|
| 156 |
|
General bank insurance |
|
| 250 |
|
| 251 |
|
Amortization of core deposit intangible |
|
| 132 |
|
| 21 |
|
Advertising expense |
|
| 234 |
|
| 341 |
|
Debit card interchange expense |
|
| 147 |
|
| 281 |
|
Legal fees |
|
| 126 |
|
| 159 |
|
Other real estate expense, net |
|
| 50 |
|
| 173 |
|
Other expense |
|
| 3,148 |
|
| 2,863 |
|
Total noninterest expense |
|
| 19,194 |
|
| 17,354 |
|
Income before income taxes |
|
| 10,874 |
|
| 11,489 |
|
Provision for income taxes |
|
| 2,406 |
|
| 2,000 |
|
Net income available to common stockholders |
| $ | 8,468 |
| $ | 9,489 |
|
|
|
|
|
|
|
|
|
Basic earnings per share |
| $ | 0.28 |
| $ | 0.32 |
|
Diluted earnings per share |
|
| 0.28 |
|
| 0.31 |
|
Dividends declared per share |
|
| 0.01 |
|
| 0.01 |
|
|
|
|
|
|
|
Ending common shares outstanding |
| 29,895,022 |
| 29,747,078 |
|
Weighted-average basic shares outstanding |
| 29,845,653 |
| 29,659,454 |
|
Weighted-average diluted shares outstanding |
| 30,343,631 |
| 30,168,748 |
|
12
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Average Balance
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2018 |
| 2019 | ||||||||||
Assets |
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr | |||||
Cash and due from banks |
| $ | 29,776 |
| $ | 36,720 |
| $ | 34,608 |
| $ | 34,915 |
| $ | 33,749 |
Interest earning deposits with financial institutions |
|
| 13,819 |
|
| 19,161 |
|
| 17,975 |
|
| 19,142 |
|
| 18,842 |
Cash and cash equivalents |
|
| 43,595 |
|
| 55,881 |
|
| 52,583 |
|
| 54,057 |
|
| 52,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available-for-sale, at fair value |
|
| 549,161 |
|
| 555,202 |
|
| 542,297 |
|
| 538,882 |
|
| 513,491 |
FHLBC and FRBC stock |
|
| 8,920 |
|
| 8,619 |
|
| 8,905 |
|
| 10,758 |
|
| 11,463 |
Loans held-for-sale |
|
| 2,353 |
|
| 2,868 |
|
| 3,220 |
|
| 2,617 |
|
| 1,853 |
Loans |
|
| 1,600,594 |
|
| 1,806,209 |
|
| 1,839,341 |
|
| 1,855,283 |
|
| 1,893,659 |
Less: allowance for loan and lease losses |
|
| 18,263 |
|
| 18,494 |
|
| 19,696 |
|
| 19,247 |
|
| 19,235 |
Net loans |
|
| 1,582,331 |
|
| 1,787,715 |
|
| 1,819,645 |
|
| 1,836,036 |
|
| 1,874,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment, net |
|
| 37,472 |
|
| 41,796 |
|
| 42,651 |
|
| 42,731 |
|
| 42,270 |
Other real estate owned |
|
| 7,884 |
|
| 7,951 |
|
| 7,801 |
|
| 7,159 |
|
| 6,779 |
Mortgage servicing rights, net |
|
| 7,347 |
|
| 7,697 |
|
| 7,915 |
|
| 8,130 |
|
| 7,334 |
Goodwill and core deposit intangible |
|
| 8,911 |
|
| 9,035 |
|
| 21,990 |
|
| 21,879 |
|
| 21,747 |
Bank-owned life insurance ("BOLI") |
|
| 61,273 |
|
| 60,920 |
|
| 61,283 |
|
| 61,616 |
|
| 61,661 |
Deferred tax assets, net |
|
| 26,739 |
|
| 26,825 |
|
| 27,680 |
|
| 25,531 |
|
| 20,878 |
Other assets |
|
| 16,881 |
|
| 22,384 |
|
| 21,976 |
|
| 20,309 |
|
| 21,098 |
Total other assets |
|
| 166,507 |
|
| 176,608 |
|
| 191,296 |
|
| 187,355 |
|
| 181,767 |
Total assets |
| $ | 2,352,867 |
| $ | 2,586,893 |
| $ | 2,617,946 |
| $ | 2,629,705 |
| $ | 2,635,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing demand |
| $ | 554,624 |
| $ | 618,765 |
| $ | 625,982 |
| $ | 634,611 |
| $ | 625,423 |
Interest bearing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market |
|
| 970,998 |
|
| 1,059,601 |
|
| 1,064,801 |
|
| 1,045,744 |
|
| 1,055,563 |
Time |
|
| 382,422 |
|
| 460,909 |
|
| 467,933 |
|
| 461,677 |
|
| 445,076 |
Total deposits |
|
| 1,908,044 |
|
| 2,139,275 |
|
| 2,158,716 |
|
| 2,142,032 |
|
| 2,126,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under repurchase agreements |
|
| 40,275 |
|
| 44,655 |
|
| 46,850 |
|
| 44,628 |
|
| 45,157 |
Other short-term borrowings |
|
| 87,444 |
|
| 58,199 |
|
| 55,119 |
|
| 83,588 |
|
| 98,328 |
Junior subordinated debentures |
|
| 57,645 |
|
| 57,657 |
|
| 57,669 |
|
| 57,681 |
|
| 57,692 |
Senior Notes |
|
| 44,071 |
|
| 44,096 |
|
| 44,121 |
|
| 44,146 |
|
| 44,171 |
Notes payable and other borrowings |
|
| - |
|
| 19,795 |
|
| 20,768 |
|
| 17,987 |
|
| 15,273 |
Other liabilities |
|
| 13,969 |
|
| 15,679 |
|
| 20,142 |
|
| 17,108 |
|
| 13,750 |
Total liabilities |
|
| 2,151,448 |
|
| 2,379,356 |
|
| 2,403,385 |
|
| 2,407,170 |
|
| 2,400,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
| 34,647 |
|
| 34,717 |
|
| 34,717 |
|
| 34,717 |
|
| 34,775 |
Additional paid-in capital |
|
| 117,734 |
|
| 117,793 |
|
| 118,366 |
|
| 118,800 |
|
| 119,051 |
Retained earnings |
|
| 147,309 |
|
| 155,553 |
|
| 162,486 |
|
| 172,363 |
|
| 180,398 |
Accumulated other comprehensive loss |
|
| (1,871) |
|
| (4,232) |
|
| (4,714) |
|
| (7,204) |
|
| (3,102) |
Treasury stock |
|
| (96,400) |
|
| (96,294) |
|
| (96,294) |
|
| (96,141) |
|
| (95,966) |
Total stockholders' equity |
|
| 201,419 |
|
| 207,537 |
|
| 214,561 |
|
| 222,535 |
|
| 235,156 |
Total liabilities and stockholders' equity |
| $ | 2,352,867 |
| $ | 2,586,893 |
| $ | 2,617,946 |
| $ | 2,629,705 |
| $ | 2,635,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Earning Assets |
| $ | 2,174,847 |
| $ | 2,392,059 |
| $ | 2,411,738 |
| $ | 2,426,682 |
| $ | 2,439,308 |
Total Interest Bearing Liabilities |
|
| 1,582,855 |
|
| 1,744,912 |
|
| 1,757,261 |
|
| 1,755,451 |
|
| 1,761,260 |
13
Old Second Bancorp, Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2018 |
| 2019 | |||||||||||
|
| 1st Qtr |
| 2nd Qtr |
| 3rd Qtr |
| 4th Qtr |
| 1st Qtr | |||||
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
| $ | 18,732 |
| $ | 22,512 |
| $ | 23,377 |
| $ | 24,144 |
| $ | 24,099 |
Loans held-for-sale |
|
| 24 |
|
| 35 |
|
| 39 |
|
| 33 |
|
| 22 |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
| 2,170 |
|
| 2,392 |
|
| 2,491 |
|
| 2,524 |
|
| 2,414 |
Tax exempt |
|
| 2,061 |
|
| 2,114 |
|
| 2,064 |
|
| 2,102 |
|
| 2,098 |
Dividends from FHLB and FRBC stock |
|
| 106 |
|
| 111 |
|
| 121 |
|
| 131 |
|
| 149 |
Interest bearing deposits with financial institutions |
|
| 49 |
|
| 97 |
|
| 84 |
|
| 104 |
|
| 114 |
Total interest and dividend income |
|
| 23,142 |
|
| 27,261 |
|
| 28,176 |
|
| 29,038 |
|
| 28,896 |
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, and money market deposits |
|
| 344 |
|
| 501 |
|
| 642 |
|
| 670 |
|
| 771 |
Time deposits |
|
| 1,175 |
|
| 1,444 |
|
| 1,568 |
|
| 1,643 |
|
| 1,618 |
Securities sold under repurchase agreements |
|
| 79 |
|
| 104 |
|
| 140 |
|
| 138 |
|
| 149 |
Other short-term borrowings |
|
| 329 |
|
| 276 |
|
| 311 |
|
| 512 |
|
| 606 |
Junior subordinated debentures |
|
| 927 |
|
| 927 |
|
| 930 |
|
| 933 |
|
| 927 |
Senior notes |
|
| 672 |
|
| 672 |
|
| 672 |
|
| 672 |
|
| 672 |
Notes payable and other borrowings |
|
| - |
|
| 95 |
|
| 173 |
|
| 130 |
|
| 116 |
Total interest expense |
|
| 3,526 |
|
| 4,019 |
|
| 4,436 |
|
| 4,698 |
|
| 4,859 |
Net interest and dividend income |
|
| 19,616 |
|
| 23,242 |
|
| 23,740 |
|
| 24,340 |
|
| 24,036 |
Provision (release) for loan and lease losses |
|
| (722) |
|
| 1,450 |
|
| - |
|
| 500 |
|
| 450 |
Net interest and dividend income after provision (release) for loan and lease losses |
|
| 20,338 |
|
| 21,792 |
|
| 23,740 |
|
| 23,840 |
|
| 23,586 |
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust income |
|
| 1,495 |
|
| 1,645 |
|
| 1,644 |
|
| 1,633 |
|
| 1,486 |
Service charges on deposits |
|
| 1,592 |
|
| 1,769 |
|
| 1,923 |
|
| 2,044 |
|
| 1,862 |
Secondary mortgage fees |
|
| 162 |
|
| 195 |
|
| 199 |
|
| 140 |
|
| 136 |
Mortgage servicing rights mark to market (loss) gain |
|
| 305 |
|
| (105) |
|
| (11) |
|
| (923) |
|
| (819) |
Mortgage servicing income |
|
| 452 |
|
| 627 |
|
| 471 |
|
| 389 |
|
| 457 |
Net gain on sales of mortgage loans |
|
| 917 |
|
| 1,240 |
|
| 965 |
|
| 669 |
|
| 762 |
Securities (loss) gain, net |
|
| 35 |
|
| 312 |
|
| 13 |
|
| - |
|
| 27 |
Increase in cash surrender value of BOLI |
|
| 248 |
|
| 351 |
|
| 347 |
|
| 38 |
|
| 458 |
Death benefit realized on bank-owned life insurance |
|
| 1,026 |
|
| - |
|
| - |
|
| - |
|
| - |
Debit card interchange income |
|
| 1,012 |
|
| 1,132 |
|
| 1,135 |
|
| 1,141 |
|
| 987 |
Other income |
|
| 1,261 |
|
| 1,366 |
|
| 1,128 |
|
| 1,371 |
|
| 1,126 |
Total noninterest income |
|
| 8,505 |
|
| 8,532 |
|
| 7,814 |
|
| 6,502 |
|
| 6,482 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
| 10,207 |
|
| 12,355 |
|
| 11,165 |
|
| 10,435 |
|
| 11,612 |
Occupancy, furniture and equipment |
|
| 1,558 |
|
| 1,652 |
|
| 1,782 |
|
| 1,922 |
|
| 1,989 |
Computer and data processing |
|
| 1,344 |
|
| 2,741 |
|
| 1,247 |
|
| 1,413 |
|
| 1,332 |
FDIC insurance |
|
| 156 |
|
| 165 |
|
| 162 |
|
| 170 |
|
| 174 |
General bank insurance |
|
| 251 |
|
| 299 |
|
| 230 |
|
| 259 |
|
| 250 |
Amortization of core deposit intangible |
|
| 21 |
|
| 97 |
|
| 136 |
|
| 133 |
|
| 132 |
Advertising expense |
|
| 341 |
|
| 492 |
|
| 492 |
|
| 242 |
|
| 234 |
Debit card interchange expense |
|
| 281 |
|
| 301 |
|
| 320 |
|
| 38 |
|
| 147 |
Legal fees |
|
| 159 |
|
| 286 |
|
| 243 |
|
| 147 |
|
| 126 |
Other real estate expense, net |
|
| 173 |
|
| 429 |
|
| (370) |
|
| 165 |
|
| 50 |
Other expense |
|
| 2,863 |
|
| 3,469 |
|
| 3,304 |
|
| 3,853 |
|
| 3,148 |
Total noninterest expense |
|
| 17,354 |
|
| 22,286 |
|
| 18,711 |
|
| 18,777 |
|
| 19,194 |
Income before income taxes |
|
| 11,489 |
|
| 8,038 |
|
| 12,843 |
|
| 11,565 |
|
| 10,874 |
Provision for income taxes |
|
| 2,000 |
|
| 1,777 |
|
| 3,201 |
|
| 2,945 |
|
| 2,406 |
Net income (loss) |
| $ | 9,489 |
| $ | 6,261 |
| $ | 9,642 |
| $ | 8,620 |
| $ | 8,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
| $ | 0.32 |
| $ | 0.21 |
| $ | 0.32 |
| $ | 0.29 |
| $ | 0.28 |
Diluted earnings (loss) per share |
|
| 0.31 |
|
| 0.21 |
|
| 0.32 |
|
| 0.28 |
|
| 0.28 |
Dividends paid per share |
|
| 0.01 |
|
| 0.01 |
|
| 0.01 |
|
| 0.01 |
|
| 0.01 |
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 | ||||||||||||||||
|
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2018 | ||||||||||||
|
| 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) |
| $ | 8,468 |
| $ | 0.28 |
| $ | 8,620 |
| $ | 0.28 |
| $ | 9,489 |
| $ | 0.31 |
(Less) / Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related costs, net, after tax |
|
| - |
|
| - |
|
| 89 |
|
| 0.01 |
|
| 203 |
|
| 0.01 |
Impact of BOLI death claim |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (1,026) |
|
| (0.03) |
Provision for loan loss release due to insurance recovery, after tax |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (596) |
|
| (0.02) |
Adjusted net income, excluding certain items |
| $ | 8,468 |
| $ | 0.28 |
| $ | 8,709 |
| $ | 0.29 |
| $ | 8,070 |
| $ | 0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
| Quarters Ended |
| |||||||
|
| March 31, |
| December 31, |
| March 31, |
| |||
|
| 2019 |
| 2018 |
| 2018 |
| |||
Net Interest Margin |
|
|
|
|
|
|
|
|
|
|
Interest income (GAAP) |
| $ | 28,896 |
| $ | 29,038 |
| $ | 23,142 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 5 |
|
| 5 |
|
| 11 |
|
Securities |
|
| 558 |
|
| 559 |
|
| 548 |
|
Interest income (TE) |
|
| 29,459 |
|
| 29,602 |
|
| 23,701 |
|
Interest expense (GAAP) |
|
| 4,859 |
|
| 4,698 |
|
| 3,526 |
|
Net interest income (TE) |
| $ | 24,600 |
| $ | 24,904 |
| $ | 20,175 |
|
Net interest income (GAAP) |
| $ | 24,037 |
| $ | 24,340 |
| $ | 19,616 |
|
Average interest earning assets |
| $ | 2,439,308 |
| $ | 2,426,682 |
| $ | 2,174,847 |
|
Net interest margin (GAAP) |
|
| 4.00 | % |
| 3.98 | % |
| 3.66 | % |
Net interest margin (TE) |
|
| 4.09 | % |
| 4.07 | % |
| 3.76 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| ||||||
|
| March 31, |
| December 31, |
| March 31, |
| |||
|
| 2019 |
| 2018 |
| 2018 |
| |||
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
Noninterest expense (GAAP) |
| $ | 19,194 |
| $ | 18,777 |
| $ | 17,354 |
|
Less amortization of core deposit (GAAP) |
|
| 132 |
|
| 133 |
|
| 21 |
|
Less other real estate expense, net (GAAP) |
|
| 50 |
|
| 165 |
|
| 173 |
|
Less acquisition related costs |
|
| - |
|
| 119 |
|
| 246 |
|
Adjusted noninterest expense |
| $ | 19,012 |
| $ | 18,360 |
| $ | 16,914 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
| $ | 24,036 |
| $ | 24,340 |
| $ | 19,616 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Loans |
|
| 5 |
|
| 5 |
|
| 11 |
|
Securities |
|
| 558 |
|
| 559 |
|
| 548 |
|
Net interest income (TE) |
|
| 24,599 |
|
| 24,904 |
|
| 20,175 |
|
Noninterest income (GAAP) |
|
| 6,482 |
|
| 6,502 |
|
| 8,505 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Increase in cash surrender value of BOLI (TE) |
|
| 122 |
|
| 10 |
|
| 66 |
|
Noninterest income (TE) |
|
| 6,604 |
|
| 6,512 |
|
| 8,571 |
|
Less death benefit related to BOLI (GAAP) |
|
| - |
|
| - |
|
| 1,026 |
|
Less securities gain (loss), net (GAAP) |
|
| 27 |
|
| - |
|
| 35 |
|
Adjusted noninterest income, plus net interest income (TE) |
| $ | 31,176 |
| $ | 31,416 |
| $ | 27,685 |
|
Efficiency ratio (GAAP) |
|
| 62.35 | % |
| 59.92 | % |
| 63.41 | % |
Adjusted efficiency ratio (non-GAAP) |
|
| 60.98 | % |
| 58.44 | % |
| 61.10 | % |
15