Old Second Bancorp, Inc. · NASDAQ:OSBC
Old Second Bancorp — Merger or Acquisition (February 2025)
21 slides from Old Second Bancorp's merger presentation, Feb 25, 2025
Slide 1: Acquisition of Bancorp Financial, Inc (Evergreen Bank Group)
@ Old Second BANCORP, INC. Acquisition of Bancorp Financial, Inc (Evergreen Bank Group) February 24, 2025
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Statements included in this presentation, which are not historical in nature are intended tobe, and hereby are identified as, forward-lookingstatements within the meaning of the Private Securities Litigation Reform Actof 1995. Examples of forward-
Slide 3: Cautionary Note Regarding Forward-Looking Statements (continued)
+ the impact of purchase accounting with respectto the transaction, orany change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value; + diversion of management's attention from ongoing business operationsand opportunities; + reputational risk
Slide 4: Additional Information
Additional Information ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT ‘This communication is being made in respect ofthe proposed merger transaction between Old Second and Bancorp Financial. In connection with the proposed merger, Old Second will file with the SEC a Registration Statem
Slide 5: Combining to Create a Leading Community Bank in Chicago
Combining to Create a Leading Community Bank in Chicago ENHANCED SCALE IN ATTRACTIVE MARKETS") $7.1B Assets $5.2B Gross Loans $6.0B Deposits IMPROVED PROFITABILITY IN 2026E 9 1.5% Returnon Avg. Assets 15+% Returnon Avg. Tangible Common Equity ‘Note: Market rankings pro forma for pending acquisitions
Slide 6: Strategic Rationale
Strategic Rationale COMPELLING POWERSPORTS LENDING BUSINESS LINE + Represents approximately 60% of outstanding loan balances with 88K accounts and a 2024 portfolio yield of 8.84% AS + Defensible, nationwide niche as established market leader in providing loans through tenured partnerships with origi
Slide 7: Overview of Evergreen Bank Group
EVERGREEN BANK Overview of Evergreen Bank Group * Headquartered in Oak Brook, IL, Evergreen operates two branches in the west and one CHICAGO MARKET RANKINGS) AND HIGHLIGHTS branch in the south Chicago suburbs and one loan production office in Reno, NV mstitation , + Average deposits per Bylnemanerp
Slide 8: Powersports Overview
Powersports Overview CONSUMER INDIRECTLENDING * Evergreen has two national powersport lending divisions doing business as FreedomRoad Financial and Performance Finance, both highly recognized names in national powersport financing space © Partners directly with original equipment manufacturers (“OEM
Slide 9: Powersports Originations and Customer Profiles
Powersports Originations and Customer Profiles POWERSPORT NEW ORIGINATIONS AND ACCOUNTS POWERSPORT PORTFOLIO BY GEOGRAPHY 2015 $246.8 2016 $249.8 2017 2018 mmm New Originations ($ Millions) New Accounts (# Thousands) 2019 2020 POWERSPORT PORTFOLIO COMPOSITION BY TIER 2021 5% eighted FICO 1 757 Tiers
Slide 10: Powersports Asset Yields and Credit Quality
race 10 Maintains high yieldsin low rate environments with 28% loan yield beta Powersports Asset Yields and Credit Quality |_i previous down cycle (3919-402) 10.00% 8.00% December 6.00% OnlyLoan LOAN YIELD naeie Waar s 9-48% 2.00% 0.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 evergreen Powerspo
Slide 11: Transaction Terms
pace 11 Transaction Terms AGGREGATE * $197 million) DEAL VALUE CONSIDER TION | + Evergreen shareholders to receive 2.5814x shares of Old Second common stock and $15.93 in cash per Evergreen share CONSIDERATION MIX PRO FORMA OWNERSHIP GOVERNANCE * Darin Campbell to join Old Second Bancorp Board of Di
Slide 12: Positioned for Significant Shareholder Value Creation
Positioned for Significant Shareholder Value Creation DELIVERING VALUE 2026E EPS Accretion Total Synergies to Old Second Identified Shareholders 16% $12M 2026E PROFITABILITY IMPROVEMENT ROBUST FUNDING & CAPITAL AT CLOSE Returnon Avg Assets ReturnonAvgEquity ReturnonAvgTangible Total Liquidity CRE /T
Slide 13: Diverse Loan and Deposit Portfolio
pace 13 Diverse Loan and Deposit Portfolio rc] Old Second EVERCHREN BANC PRO FORMA() pros = Muli Cost of Deposits: 0.88% Cost of Deposits: 3.97% Cost of Deposits: 1.54% ‘Note: Financial data as of the quarter ended December 31, 2024. (1) Excludes purchase accounting adjustments.
Slide 14: Key Merger Assumptions
pace 14 Key Merger Assumptions RETO n em - old Second: Based on consensus estimates AN ee * Evergreen: Projected $12.1 million net income in 2025 and $18.0 million net income in 2026, based on thorough due diligence * Aggregate fully phased-in cost savings of $12.0 million pre-tax ESTIMATED COST | i
Slide 15: Positioned for Significant Shareholder Value Creation
Positioned for Significant Shareholder Value Creation EXPECTED FINANCIAL IMPACT BENEFITS OF THE TRANSACTION GAAP EXCLUDING RATE CAPITAL RATIOS AT ‘glee REARS yy SANTOS ee Seema METRICS MARKS() CLOSING Evergreen shareholders: * Management accretive withstrongentrepreneurral track record of growthand
Slide 16: Thorough Due Diligence Review
Thorough Due Diligence Review DUE DILIGENCE SUMMARY * Comprehensive due diligence process over multiple months, involving senior leadership at both banks * Extensive credit diligence process © Review of loan files, underwriting practices, risk ratings, and loan administration * Detail risk managemen
Slide 17: Compelling Cost Savings Opportunity
Compelling Cost Savings Opportunity IDENTIFIED OPPORTUNITY ESTIMATED COST SAVINGS ($ in millions) Employee Expense $7.4 Occupancy Expense $1.0 General & Administrative Expense $2.3 Other Expense $13 Total Estimated Cost Sar * Identified expected net cost savings of $12.0 million with 50% achieved in
Slide 18: Appendix
Appendix
Slide 19: Pro Forma Balance Sheet
Pro Forma Balance Sheet As of December 31, 2024, Illustrative at Close’) 1 1 ($ in billions) ‘Old Second Evergreen 1"‘Old Second + Evergreen Assets i Total cash and securities $13 So.2 | $1.4 Net loans $3.9 $1.2 | $5.2 Total intangibles $0.1 $0.0 | $0.2 Other assets 0. 0.0! $0.4 Total assets $5.6 $1
Slide 20: Expected Earnings Per Share Accretion
Expected Earnings Per Share Accretion (Sand sharesin millions) 2025F (Stubbed) 2026E Old Second consensus net income $82.6 $83.0 Evergreen projected net income 63 38.0 After-tax transaction adjustments Fully phased in cost savings 48 304 Non-PCD loan credit mark accretion under CECL“? 22 43 Fair val
Slide 21: Purchase Accounting Summary
Purchase Accounting Summary Basic Shares r ($ and sharesin millions) Ganiilleees cae Goodwill Calculation (Old Second tangible book value as of December 31, 2024” $555.7 449 $12.98 | Merger consideration $1065 (+) Two quarters of consensus earnings prior to close 444 (© Two quarters of consensus per
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