Exhibit 99.1
OLD SECOND BANCORP, INC.
Traded: NASDAQ National Market System
Symbol: OSBC
For Immediate Release
August 2, 2004
For additional information contact:
William Skoglund, Chairman, President & CEO
(630) 906-5483
Doug Cheatham, Sr. Vice President and CFO
(630) 906-5484
OLD SECOND BANCORP, INC. ANNOUNCES SETTLEMENT OF LITIGATION AND
RELATED INCREASE IN SECOND QUARTER EARNINGS
Old Second Bancorp, Inc. announced today the settlement of a lawsuit filed in 2001 against a subsidiary of the Company. The Company agreed to settle a recent $2.2 million judgment in the case for a payment of $1.75 million and to discontinue its appeal. Because of the timing of the settlement, the Company has revised its second quarter earnings, which increased $271,000, or $.04 per share, above the earnings previously announced for the second quarter. This increase relates to the tax effected difference between the settlement and the charge relating to the judgment taken before the settlement was reached.
After taking effect of the settlement, the Company earned $1.71 diluted earnings per share in the first half of 2004, a 17.9% increase over the $1.45 in the first half of 2003. Net income was $11.59 million in the first half of 2004 compared with $10.9 million in the first half of 2003. Old Second earned $.81 diluted earnings per share in the second quarter of 2004, a 6.75% increase over the $.75 in the second quarter of 2003. Net income was $5.5 million in the second quarter of 2004, compared with $5.6 million in the second quarter of 2003. As previously announced in the Company’s July 16, 2004 press release, the Company planned to take a $2.2 million pre-tax charge ($1.47 million net of taxes) on its second quarter earnings. As a result of the settlement, that charge is no longer necessary and the Company has taken a $1.75 million ($1.17 million net of taxes) charge for the settlement and earnings per share increased $271,000, or $.04 per share, over the earnings previously announced.
Net-interest income increased from $30.3 million in the first half of 2003 to $33.7 million in the first half of 2004, an 11.2% increase. Non-interest income decreased from $15.3 million in the first half of 2003 to $12.2 million in the first half of 2004, a 20.3% decrease. This was due to the decrease in the gains on sales of loans resulting from the lower volume in residential mortgage originations associated with changes in interest rates and the litigation settlement.
Growth in loans and deposits has continued through the second quarter of 2004. Total loans increased to $1.43 billion as of June 30, 2004, an increase of $105.8 million, or 8.95% from $1.32 billion as of December 31, 2003. This represents an increase of $242.7 million, or 20.5% over the $1.18 billion at the end of the second quarter of 2003. At the same time, deposits increased to $1.71 billion at June 30, 2004, an increase of $184.6 million from December 31, 2003 and an increase of $225.0 million or 15.16% over the total at June 30, 2003.
Net recoveries during the first half of 2004 were $13,000 compared to net charge-offs of $603,000 in the first half of 2003. The Company did not make a provision for loan losses during the first half of 2004 compared to a provision of $1.7 million during the first half of the previous year. The determination by management to maintain the level of the allowance for loan losses at the year-end level was based on a number of factors, including the quality of the loan portfolio and past favorable loan loss experience. Non-performing assets decreased from $3.3 million at year-end 2003 to $2.4 million at June 30, 2004.
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Forward Looking Statements: This report may contain forward-looking statements. Forward looking statements are identifiable by the inclusion of such qualifications as expects, intends, believes, may, likely or other indications that the particular statements are not based upon facts but are rather based upon the company’s beliefs as of the date of this release. Actual events and results may differ significantly from those described in such forward looking statements, due to changes in the economy, interest rates or other factors. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. For additional information concerning the Company and its business, including other factors that could materially affect the Company’s financial results, please review our filings with the Securities and Exchange Commission.
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Old Second Bancorp, Inc.
Financial Highlights (Unaudited)
(Dollars in thousands except per share data)
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| Quarter Ended |
| Year to Date |
| Year to Date |
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| 2004 |
| 2003 |
| 2004 |
| 2003 |
| 2003 |
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Income Statement: |
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Net interest income |
| $ | 16,902 |
| $ | 15,635 |
| $ | 33,744 |
| $ | 30,259 |
| $ | 62,376 |
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Provision for loan losses |
| 0 |
| 863 |
| 0 |
| 1,718 |
| 3,251 |
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Non-interest income |
| 6,678 |
| 7,923 |
| 12,249 |
| 15,299 |
| 29,087 |
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Gain on sale of securities |
| (251 | ) | 5 |
| 389 |
| 39 |
| 140 |
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Non-interest expense. |
| 15,246 |
| 13,854 |
| 29,015 |
| 27,010 |
| 54,175 |
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Income taxes |
| 2,562 |
| 3,207 |
| 5,776 |
| 6,023 |
| 12,069 |
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Net income. |
| 5,521 |
| 5,639 |
| 11,591 |
| 10,846 |
| 22,108 |
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End of Period Balances: |
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Loans, net of unearned income. |
| $ | 1,425,361 |
| $ | 1,182,639 |
| $ | 1,425,361 |
| $ | 1,182,639 |
| $ | 1,319,538 |
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Deposits |
| 1,709,195 |
| 1,484,172 |
| 1,709,195 |
| 1,484,172 |
| 1,524,634 |
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Stockholders’ equity |
| 122,485 |
| 110,966 |
| 122,485 |
| 110,966 |
| 116,994 |
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Total earning assets |
| 1,890,792 |
| 1,613,294 |
| 1,890,792 |
| 1,613,294 |
| 1,745,498 |
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Total assets |
| 2,001,071 |
| 1,709,229 |
| 2,001,071 |
| 1,709,229 |
| 1,838,844 |
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Average Balances: |
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Loans, net of unearned income |
| $ | 1,406,134 |
| $ | 1,151,509 |
| $ | 1,381,850 |
| $ | 1,115,380 |
| $ | 1,183,290 |
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Deposits |
| 1,620,592 |
| 1,412,185 |
| 1,582,067 |
| 1,401,038 |
| 1,465,726 |
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Stockholders’ equity |
| 123,736 |
| 139,827 |
| 122,229 |
| 137,725 |
| 125,253 |
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Total earning assets |
| 1,830,917 |
| 1,578,126 |
| 1,804,757 |
| 1,550,536 |
| 1,617,848 |
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Total assets |
| 1,939,168 |
| 1,657,292 |
| 1,899,830 |
| 1,628,751 |
| 1,699,605 |
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Per Share Data: |
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Basic earnings per share |
| $ | 0.82 |
| $ | 0.76 |
| $ | 1.73 |
| $ | 1.46 |
| $ | 3.14 |
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Diluted earnings per share |
| $ | 0.81 |
| $ | 0.75 |
| $ | 1.71 |
| $ | 1.45 |
| $ | 3.11 |
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Dividends declared per share |
| $ | 0.24 |
| $ | 0.20 |
| $ | 0.44 |
| $ | 0.40 |
| $ | 0.80 |
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Book value per share |
| $ | 18.26 |
| $ | 16.57 |
| $ | 18.26 |
| $ | 16.57 |
| $ | 17.48 |
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Tangible book value per share |
| $ | 17.81 |
| $ | 16.06 |
| $ | 17.81 |
| $ | 16.06 |
| $ | 17.00 |
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Average number of shares outstanding |
| 6,706,588 |
| 7,412,559 |
| 6,703,315 |
| 7,413,451 |
| 7,048,122 |
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Ending number of shares outstanding |
| 6,708,840 |
| 6,697,452 |
| 6,708,840 |
| 6,697,452 |
| 6,693,740 |
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Profitability Ratios (annualized): |
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Return on average assets |
| 1.15 | % | 1.36 | % | 1.23 | % | 1.34 | % | 1.30 | % | |||||
Return on average equity |
| 17.95 | % | 16.18 | % | 19.07 | % | 15.88 | % | 17.65 | % | |||||
Net interest margin (tax equivalent) |
| 3.81 | % | 4.07 | % | 3.86 | % | 4.03 | % | 3.95 | % | |||||
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Asset Quality: |
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Nonperforming assets |
| $ | 2,425 |
| $ | 3,168 |
| $ | 2,425 |
| $ | 3,168 |
| $ | 3,309 |
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Net charge offs |
| (3 | ) | 234 |
| (13 | ) | 603 |
| 719 |
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Allowance for loan losses |
| 18,314 |
| 16,884 |
| 18,314 |
| 16,884 |
| 18,301 |
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Allowance for loan losses to loans |
| 1.28 | % | 1.43 | % | 1.28 | % | 1.43 | % | 1.39 | % | |||||
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