Old Second Bancorp, Inc. · NASDAQ:OSBC
Old Second Bancorp — Investor Presentation (November 2014)
25 slides from Old Second Bancorp's investor presentation, Nov 13, 2014
Slide 1: Old Second Bancorp, Inc.
Old Second Bancorp, Inc.
Slide 2: Presenters
William Skoglund Chairman President & CEO, OSBC wskoglund@oldsecond.com 630-906-5483 James Eccher Chief Operating Officer, OSBC President & CEO, OSNB jeccher@oldsecond.com 630-966-2433 Doug Cheatham Executive VP & Chief Financial Officer dcheatham@oldsecond.com 630-906-5484 NASDAQ: OSBC November 201
Slide 3: Forward-looking statements
Forward-looking statements In addition to historical information, this presentation contains forward-looking statements, which are subject to certain risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of Old Second’s operations. Forw
Slide 4: Corporate Profile
Corporate Profile Established in 1871 and headquartered in Aurora, IL Deposit market share leader in Aurora Community, #2 in Kendall County and Kane County $2.0 Billion in Assets $1.1 Billion in Loans $1.7 Billion in Deposits 26 Locations Source: SNL Financial, Management and Company filings. Note:
Slide 5: Participation in Regional Growth
Source: Population growth based on US Census data as provided in the Crane’s Chicago Business article Reversal of Fortune. http://www.chicagobusiness.com/assets/legacy/downloads/20130527reversaloffortune.htm Participation in Regional Growth 2000 – 2010 Population Growth: Top 5, 10, 15 2010 – 2012 Po
Slide 6: Footprint Demographics
Aurora, IL is the second largest city in Illinois, outside of Chicago Strong demographics and household income metrics, with unemployment rates below average for the Chicago MSA Market growth expected to continue to outpace regional and national averages Counties of Operation Population Change: 2013
Slide 7: Demographics Provide Opportunity
Population trends are increasing appetite for credit and deposit products in our markets Businesses beginning to shift focus and allocate resources to areas outside of downtown Chicago Rising household income in our primary markets Positive migration trends impacting key suburban Chicago counties (p
Slide 8: Where We Were Then & Are Now
Where We Were Then & Are Now Source: Company filings. Note: Cost of funds data is for the fiscal year ended 12/31/2006 . Gross Loans ($M) Total Deposits ($M) Cost of Funds $1.76B $1.14B $2.06B $1.66B
Slide 9: Recent Achievements
Continued reduction problem loans & assets without bulk sales Achieved consistent core profitability at both Bank & Bancorp Four consecutive quarters of loan growth Consent order & written agreement removed DTA recaptured Sustained improvement in deposit mix driven by customer loyalty Recent Achieve
Slide 10: Performance Summary
Performance Summary (Dollars in Thousands, Except Per Share Data) YTD Q3 2014 2013 2012 2011 Assets $2,033,099 $2,004,034 $2,045,799 $1,941,418 Loans $1,140,882 $1,101,256 $1,150,050 $1,368,985 Deposits $1,656,755 $1,682,128 $1,717,219 $1,740,781 (Release) provision for loan losses ($2,000) ($8,550)
Slide 11: Net Interest Margin
Net Interest Margin Source: Company filings. Note: AEA = “Average Earning Assets”.
Slide 12: Diverse Revenue Streams
$35M $29M $34M $31M Diverse Revenue Streams Total Fee Revenues: 30.5% 31.1% 36.4% 36.0% % of Total Revenues: Source: Company filings. Note: Fee revenue equals total noninterest income less securities gains/losses, increase in cash surrender value of BOLI, death benefit realized on BOLI and litigatio
Slide 13: Controlling Noninterest Expense
Controlling Noninterest Expense Source: Company filings. Note: OREO expense (net) equals OREO expense less lease revenue from OREO and net gain on sale of OREO.
Slide 14: Core Earnings Drivers
Revenue Drivers Maintain Q4 2013 and 2014 loan growth momentum Expense Reduction Drivers Reduced FDIC insurance expense Bank insurance premiums Legacy credit costs OREO maintenance expense OREO valuation adjustments Branch rationalization Core Earnings Drivers Stability and improvement in net intere
Slide 15: Capital Ratios
Capital Ratios Ratio September 30, 2014 December 31, 2013 Tier 1 Leverage Ratio 9.68% 6.96% Tier 1 Risk Based Capital Ratio 14.28% 10.65% Total Risk Based Capital Ratio 17.56% 15.88% Tier 1 Common to Risk Weighted Assets 6.50% 0.77%
Slide 16: Loan Portfolio Mix
(Dollars in Thousands) September 2014 CRE: Owner occupied $ 308,491 27.0% CRE: Non-owner occupied 292,158 25.6% Construction 41,936 3.7% Residential 1-4 family owner occupied 117,520 10.3% Residential 1-4 family nonowner occupied 57,849 5.1% HELOCs 117,796 10.3% Multi-family 72,437 6.3% C&I 114,990
Slide 17: Deposit Composition
2010 $1,908,528 Deposits 9/30/2014 $1,656,755 Difference: 2010 to 9/30/2014 (in millions) % Change Noninterest Bearing $49.8 15.1% Savings/NOW/MMA $66.3 8.5% CDs ($367.9) (46.2%) Net ($251.8) (13.2%) 42% 17% 41% 26% 23% 51% Non Interest Bearing Savings/NOW/MMA CDs Slide18.JPG
Slide 18: Classified Loans and Asset Trends
Classified Loans by Loan Type (1) Classified Asset Trends Source: Company filings. Classified loans are defined as loans rated substandard or worse, which closely reflects our regulator’s definition. Bank subsidiary level. Classified Assets / Tier 1 Capital + Reserves (2)
Slide 19: Nonperforming Loans and Asset Trends
Nonperforming Loans by Type (1) Nonperforming Asset Trends Source: Company filings. Nonperforming loans include nonaccrual loans, loans 90+ days past due and still accruing and accruing TDRs. Other Real Estate Owned
Slide 20: Significant Credit Cost Improvement
Provision & OREO Expense Net Charge-offs Significant Credit Cost Improvement Source: Company filings. Note: OREO expense (net) equals OREO expense less lease revenue from OREO and net gain on sale of OREO.
Slide 21: Renewed Focus on Loan Relationship Generation
Balance sheet stability allows renewed focus loan relationship generation Hired 11 new lenders since 1/1/2012 to bolster new business generation efforts New lenders average 10 years of in-market experience Commercial Loan Originations Returning Source: Management. (in Millions)
Slide 22: Strong Core Deposit Base
Long term customer relationship focus drives strong core deposit base Strong local market position provides pricing power Cost of deposits of less than 40 bps Cost of Deposits Cost of Deposits Source: Company filings.
Slide 23: Strong Long Term Customer Relationships
All Deposit Households – Length of Relationship Strong Long Term Customer Relationships Source: Management.
Slide 24: 2015 Objectives
2015 Objectives Accelerate core profitability. Stay focused on credit remediation. Strengthen balance sheet. Generate moderate loan growth. Increase noninterest income. Improve efficiency ratio.
Slide 25: Investment Highlights
Right size community banking franchise Strong market share in premier Chicagoland markets Attractive, long-term core deposit franchise Strong, profitable Wealth Management Group with >$1 billion in assets under management Greatly improved credit metrics Increased loan production Profitable Residenti
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