Old Second Bancorp, Inc. · NASDAQ:OSBC
Old Second Bancorp — Merger or Acquisition (July 2021)
19 slides from Old Second Bancorp's merger presentation, Jul 26, 2021
Slide 1: Old Second & West Suburban Combining to Create Chicago's Leading Community Bank
Old Second Old Second Bancorp, Inc. Old Second & West Suburban Combining to Create Chicago’s Leading Community Bank July 26, 2021
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Old Second Cautionary Note Regarding Forward-Looking Statements ‘Statements included in this presentation, which are not historical in nature are intended to be, and hereby are identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examp
Slide 3: Cautionary Note Regarding Forward-Looking Statements (continued)
Old Second + the integration of the businesses and operations of Old Second and West Suburban, which may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to Old Second’s and West Suburban’s existing businesses; + business disruptions foll
Slide 4: Additional Information About the Merger and Where to Find It
Old Second Additional Informa’ n Ad ional Inform: n About the Mergerand Whereto Findit This communication is being made in respect of the proposed merger transaction between Old Second and West Suburban. In connection with the proposed merger, Old Second will filewith the SEC a Registration Statemen
Slide 5: Combining to Create the Leading Community Bank in Chicago
Combining to Create the Leading Community Bank in Chicago Old Second Pro Forma Chicago MSA Footprint Enhanced Scale In Attractive Markets $6.2B $3.4B $5.3B Assets Gross Loans Deposits Improved Profitability & Operating Efficiency ~1.15% ~15% 0.13% 7 Return on Return on Cost of Kendal Assets Tangible
Slide 6: Transaction Rationale
Transaction Rationale Old Second = Significantly increases scale in the Chicago MSA — creating the second largest bank headquartered in the Chicago MSA and the largest community banking franchise!) = Meaningfully enhances strategic positioning and future optionality Compelling * Addition of a low co
Slide 7: Overview of West Suburban
Overview of West Suburban Old Second Rank Bank Branches = Headquartered in Lombard, IL, West Suburban operates 43 | Bankof Montreal oo branches throughout the western Chicago suburbs 2 JPMorgan Chase 315 ; ; 3 BankofAmerica 136 = West Suburban offers traditional community banking 4 Northern Trust 5
Slide 8: Transaction Terms
Transaction Terms Aggregate Deal Value Consideration West Suburban shareholders to receive 42.413 shares of Old Second common stock and $271.15 in cash Structure per West Suburban share } consiseraon a | . SS Sock 125% Cash Pro Forma . 64% Old Second / 36% West Suburban Ownership Board of Directors
Slide 9: Attractive, Low Cost Pro Forma Deposit Base
Attractive, Low Cost Pro Forma Deposit Base Old Second Estimated Pro Forma Relative to $5-10B Asset Banks") Fre bore, Franchise Highlights More attractive Best-in-class deposit base through combination of two low Cost of cost and low beta franchises Deposits 027% bated 0.43% Pro Forma Median ‘Chicag
Slide 10: Positioned for Significant Shareholder Value Creation
Positioned for Significa Profitability Improvement ~20bps Return on Assets ~300bps Return on Equity ~500bps Return on Tangible Equity (2) Represents 20228 operating EPS scration inclusive of fully phased-in cost savings. (2) Based on 100x after-tax value of fully phasedin cost savings lessaftr-taxme
Slide 11: Low Cost Deposits Funding Diverse Loan Portfolio
Low Cost Deposits Funding Diverse Loan Portfolio west Cora Second Uff Sittin Pro Forma” Se 9bn Loans Total Loan Yield 4.33% 3.88% 4.13% Old Second mice Investor CRE Hl owner-Occupied CRE Muttitamity mi L-4Family micep consumer & Other o \ 7 $2.6bn $5.3bn Cost of Deposits Deposits II MMDA & Savings W
Slide 12: Key Merger Assumptions
Old Second Old Second: Based on consensus estimates ‘West Suburban: Projected $17mm net income in 2022, based on thorough due diligence Aggregate cost savings of $20.7mm pre-tax Estimated Cost 37% of West Suburban 2022E non-interest expense base Savings in the first 12 months post-close, 100% phased
Slide 13: Financially Compelling Combination
ncially Compelling Combination © old Second Attractively Priced Transformational Sots Dea Peete 1.89: mae | (1.22 TRV | ies | ete a TBVPS Dilution ll 18% charges) (inclusive of restructuring and day2 13% 100% Stock Transaction’31*4) = | 10.5% (a)Reftectsaveragetor al deals involving a Chicago-based
Slide 14: Thorough Due Diligence Review
Thorough Due Diligence Review Old Second Due Diligence Summary Estimated Purchase Accounting Marks & CECL « ‘Coniprefiensve due Gross Credit Mark $ Amount $24.1mm iths, involvi monens, Involving $21 As a % of Gross Loans at close 1.87% = BStieeniescrodd ence process PCD Mark $ Amount $13.3mm. Non-PC
Slide 15: Compelling Cost Savings Opportunity
Compelling Cost Savings Oppor Identi Estimated Cost Savings d Opportuni (Sinmillions) Employee Expense $13.0 Occupancy Expense 24 Equipment Expense 0.7 General & Administrative Expense 42 Other Expense 0S [Total Estimated Cost Savings $20. = Identified expected net cost savings of $20.7mm with 50% a
Slide 16: Appendix
Old Second APPENDIX
Slide 17: Pro Forma Balance Sheet
Pro Forma Balance Sheet Old Second As of June 30, 2022 illustrative ot Close" (Sin millions) ‘Old Second. West Suburban (Old Second + West Suburban. Assets Total cash and securities, $1,173 $1,338 $2,081 Net loans 1.875 4518 3,130 Total intangibles 2 1 8 Other assets 183 us 329 Total assets $3,251 $
Slide 18: Expected Earnings Per Share Accretion
Expected Earnings Per Share Accretion Old Second (Sond shores in millions (Old Second 2002 consensusnet income $30 ‘West Suburban 2022 projected net income v7 After-tax transaction adjustments Fully phased-in cost savings sis Non-POD loan credit mark accretion under CECL"” 3 Fair value mark accretio
Slide 19: Purchase Accounting Summary
Purchase Accounting Summary Old Second BasicShares § ton ‘nlons, except per share daa Pershore coneeel Caleaet Oid Second tangible book value as of June 30, 2021" $295 287 $1027! Merger consideration $297 ( +)Two quarters of consensus earningspriorto close v SERS san thaGlibock line lame Sai {HUIS R
OLD Second Bancorp — Merger or Acquisition (July 2021) on 6ix