AURORA, IL / ACCESSWIRE / January 20, 2016 / Old Second Bancorp, Inc. (the "Company" or "Old Second") (NASDAQ: OSBC), parent company of Old Second National Bank (the "Bank"), today announced financial results for the fourth quarter of 2015 and the year ended December 31, 2015. The Company reported net income of $3.8 million for the fourth quarter of 2015, compared to net income of $3.0 million in the fourth quarter of 2014 and $3.9 million in the third quarter of 2015. The Company's net income available to common stockholders of $3.8 million, or $0.13 per diluted share for the fourth quarter of 2015, compared to $1.9 million, or $0.06 per diluted share, in the fourth quarter of 2014. 2014 per share information reflects dividends on the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the "Series B Stock"). In 2015 the Company completed redemption of all remaining Series B Stock. The full year 2015 net income available to common stockholders of $13.5 million or $0.46 per diluted share compared to $11.9 million or $0.46 per diluted share in 2014.
Operating Results
- Fourth quarter 2015 net income before taxes increased by $1.3 million, or 27.2%, from the fourth quarter of 2014 but decreased approximately 4.0% from the third quarter of 2015. When compared to the fourth quarter of 2014, the quarter reflects slightly reduced net interest income, improved residential mortgage banking income, meaningfully lower compensation costs and other real estate owned ("OREO") valuation expense, and no loan loss reserve release. The net income before tax decrease from the third quarter of 2015 reflects improved residential mortgage banking operating revenue and reduced OREO valuation expense, with these improvements offset by no loan loss reserve release recorded in the fourth quarter. Third quarter 2015 noninterest income does include a $1.1 million writedown on the now closed branch in Batavia, Illinois. Fourth quarter 2015 net income available to common stockholders of $3.8 million compares to $3.6 million for the third quarter of 2015 where the third quarter reflects $339,000 of dividends paid in the quarter on the now fully redeemed Series B stock.
- Noninterest expense of $16.1 million for the fourth quarter of 2015 was 14.2% lower than the results in the fourth quarter of 2014. OREO expense, net for the fourth quarter of 2015 declined 79.0% from the fourth quarter of 2014.
Capital Ratios
December 31, | September 30, | June 30, | March 31, | |
2015 | 2015 | 2015 | 2015 | |
The Bank's common equity tier 1 capital ratio | 14.10% | 15.94% | 17.49% | 16.88% |
The Company's common equity tier 1 capital ratio | 10.55% | 10.26% | 9.82% | 9.44% |
The Bank's total capital ratio | 15.23% | 17.10% | 18.75% | 18.14% |
The Company's total capital ratio | 15.56% | 15.36% | 17.10% | 17.28% |
The Company's tier 1 leverage capital ratio | 8.69% | 8.46% | 10.02% | 9.82% |
- The Bank ratios shown above exceed levels required to be considered "well capitalized". Ratios for December 31, 2015 are estimated. Bank ratios for December 31, 2015 reflect a $30 million dividend paid to the Company in December, 2015.
Asset Quality & Earning Assets
- Nonperforming loans declined to $14.6 million at December 31, 2015, from $18.5 million at September 30, 2015, as nonaccrual loans were reduced.
- OREO assets decreased in the fourth quarter to end at $19.1 million on December 31, 2015, compared to $24.5 million at September 30, 2015. Valuation writedowns continued in the fourth quarter at a markedly lower level with a quarterly expense of $251,000 compared to $1.1 million in third quarter.
- Loans decreased from year end 2014 and are essentially unchanged compared to September 30, 2015. Fourth quarter 2015 average loans (including loans held-for-sale) decreased by $4.1 million from the third quarter of 2015 and by $5.1 million compared to the fourth quarter of 2014.
- Securities held-to-maturity at amortized cost total $247.7 million at December 31, 2015. This total compares to $250.0 million at September 30, 2015, and $259.7 million at December 31, 2014. December 31, 2015, available-for-sale securities at fair value totaled $456.1 million, which is an increase from $408.8 million at September 30, 2015, and $385.5 million at December 31, 2014.
Management review of the loan portfolio concluded that neither a loan loss reserve release nor a loan loss provision was appropriate in the fourth quarter.
Non-GAAP Presentations: Management has traditionally disclosed certain non-GAAP ratios to evaluate and measure the Company's performance, including a net interest margin calculation. 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 also disclosed other non-GAAP measures in the discussion above.
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 or cause actual results to differ substantially from those discussed or implied in forward looking statements contained in this release, please review our filings with the Securities and Exchange Commission.
Conference Call
The Company will also host an earnings call on Thursday, January 21, 2016, 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 877-407-8035. 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 11:59 p.m. Eastern Time (10:59 p.m. Central Time) on February 4, 2016, by dialing 877-660-6853, using Conference ID #: 13627760.
Contact:
J. Douglas Cheatham
Chief Financial Officer
(630) 906-5484
SOURCE: Old Second Bancorp, Inc.
