Old Second Bancorp, Inc. (NASDAQ:OSBC) Q4 2021 Earnings Conference Call January 27, 2022 11:00 AM ET Company Participants Jim Eccher – Chief Executive Officer Brad Adams – Chief Financial Officer Conference Call Participants David Long – Raymond James Nathan Race – Piper Sandler Chris McGratty – KBW Brian Martin – Janney Montgomery Scott Operator Good morning, everyone and thank you for joining us today for Old Second Bancorp, Inc's Fourth Quarter 2021 Earnings Call. On the call today is Jim Eccher, the com ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 000-10537 (Exact name of Registrant as specified in its charter) of incorporation or organization) Indicate by check mark whe ...

Old Second Bancorp, Inc. (NASDAQ:OSBC) Q3 2021 Earnings Conference Call October 21, 2021 11:00 AM ET CorporateParticipants Jim Eccher - Chief Executive Officer Brad Adams - Chief Financial Officer ConferenceCall Participants David Long - Raymond James Nathan Race - Piper Sandler Chris McGratty - KBW Brian Martin - Janney Montgomery Scott Operator Good morning, everyone, and thank you for joining us today for Old Second Bancorp Inc's Third Quarter 2021 Earnings Call. On the call today is Jim Eccher, the comp ...

Dividends and Mergers - The Company declared a cash dividend of $0.05 per share, totaling $1.4 million, payable on August 9, 2021[34]. - The Company announced a merger agreement with West Suburban Bancorp, Inc., where each West Suburban shareholder will receive 42.413 shares of the Company's common stock and $271.15 in cash per share[35][36]. - The merger transaction is expected to close in the fourth quarter of 2021, pending regulatory approvals and shareholder approvals[37]. Investment Portfolio - As of June 30, 2021, the total securities available-for-sale amounted to $579.948 million, with gross unrealized gains of $24.111 million and losses of $1.370 million[43]. - The investment portfolio includes $109.3 million in asset-backed securities backed by student loans under the Federal Family Education Loan program, with a guarantee from the U.S. Department of Education of at least 97%[46]. - The weighted average yield of total securities available-for-sale is 2.16% as of June 30, 2021[45]. - The amortized cost of U.S. Treasury securities was $4.016 million with a fair value of $4.086 million as of June 30, 2021[43]. - The Company’s investment portfolio reflects liquidity needs, loan demand, and interest income objectives, with adjustments made as necessary[38]. - As of June 30, 2021, the Company had invested $32.957 million in securities from Towd Point Mortgage Trust, with a fair value of $34.661 million[47]. - The total unrealized losses on securities available-for-sale were $102.349 million, with 24 securities in an unrealized loss position[47]. - For the three months ended June 30, 2021, the Company reported proceeds from sales of securities at $8.202 million, with net realized gains of $2, compared to a net loss of $24 in the same period of 2020[50]. Loans and Credit Quality - Total loans as of June 30, 2021, amounted to $1.903 billion, a decrease from $2.035 billion at December 31, 2020[51]. - The allowance for credit losses on loans was $28.639 million as of June 30, 2021, down from $33.855 million at the end of 2020[51]. - Real estate-related loans represented 73.2% of the loan portfolio as of June 30, 2021[53]. - Securities valued at $324.1 million were pledged to secure deposits and borrowings, a decrease from $335.8 million at year-end 2020[50]. - The Company held $70.2 million in Paycheck Protection Program (PPP) loans as of June 30, 2021[51]. - No credit losses were determined to be present as of June 30, 2021, indicating no credit quality deterioration noted[47]. - The allowance for credit losses (ACL) for loans as of June 30, 2021, was $28,639,000, down from $30,967,000 at the beginning of the period, reflecting a decrease of $2,263,000[54]. - The provision for credit losses for the three months ended June 30, 2021, included a charge-off of $301,000 and recoveries of $236,000[54]. - The total ACL on loans excludes $2,200,000 of allowance for unfunded commitments as of June 30, 2021[56]. - The total collateral dependent loans as of June 30, 2021, amounted to $33,990,000, with an allocated ACL of $4,550,000[57]. - Total past due loans amounted to $19.964 million, with 90 days or greater past due loans at $8.567 million, as of June 30, 2021[58]. - Nonaccrual loans totaled $22.784 million as of June 30, 2021, compared to $22.280 million on December 31, 2020[60]. - The company recognized $28,000 of interest on nonaccrual loans during the three months ended June 30, 2021[60]. - Loans classified as substandard indicate a distinct possibility of loss if deficiencies are not corrected, impacting overall credit quality[62]. - The company categorizes loans into credit risk categories based on financial information and economic trends, with quarterly reviews for classified risk ratings[61]. Financial Performance - The Company had a net income of $8.8 million for the three months ended June 30, 2021, resulting in basic earnings per share of $0.30, compared to $9.2 million and $0.31 for the same period in 2020[99]. - The weighted-average common shares outstanding decreased to 28,849,015 for the three months ended June 30, 2021, from 29,637,567 in the prior year[99]. - The effective tax rate applied to net realized gains was 0.0% for the three months ended June 30, 2021[50]. - Net interest and dividend income for Q2 2021 was $22.0 million, down from $22.7 million in Q2 2020, primarily due to a $1.5 million decline in interest income from loans[163]. - Noninterest income for Q2 2021 was $7.9 million, down from $10.7 million in Q2 2020, primarily due to a $3.5 million decrease in mortgage banking revenue[163]. - The provision for credit losses resulted in a $3.5 million net benefit in Q2 2021, compared to a provision of $2.1 million in Q2 2020, driven by a reserve release[163]. - For the six months ended June 30, 2021, net income was $20.7 million, or $0.70 per diluted share, compared to $9.5 million, or $0.31 per diluted share, for the same period in 2020[174]. - Net interest and dividend income for the six months ended June 30, 2021, was $45.5 million, relatively flat compared to $45.4 million for the same period in 2020[175]. Capital and Regulatory Compliance - The Company maintained a Tier 1 leverage capital ratio above 8% and a total risk-based capital ratio above 12% as of June 30, 2021, exceeding regulatory requirements[100]. - The Bank's total capital ratio was 16.33%, an increase of 133 basis points from December 31, 2020, exceeding the 12.00% objective[101]. - The Company is expected to no longer be considered a "small bank holding company" in March 2022 due to total assets exceeding $3.0 billion[103]. - The Bank must maintain a capital conservation buffer of 2.50% above the new regulatory minimum capital requirements to avoid additional limitations on capital distributions[108]. - The cumulative amount not recognized in regulatory capital due to the CECL transition adjustment was $4.5 million as of June 30, 2021[107]. - The Company exceeded the general minimum regulatory requirements to be considered "well capitalized" under current capital ratios[106]. Asset Quality and Nonperforming Loans - Asset quality remained stable, with nonperforming loans as a percentage of total loans at 1.2% as of June 30, 2021, compared to 1.1% at December 31, 2020[169]. - Nonperforming loans increased slightly to $23.1 million as of June 30, 2021, from $23.0 million at December 31, 2020, with a nonperforming loans ratio of 1.2%[220]. - The allowance for credit losses was $28.6 million, representing 1.5% of total loans as of June 30, 2021[224]. - Total nonperforming assets decreased by 2.0% to $25.0 million as of June 30, 2021, compared to $25.5 million at December 31, 2020[224]. Other Financial Metrics - Total deposits increased to $2,682,001,000 as of June 30, 2021, compared to $2,537,073,000 at the end of 2020, reflecting a growth of approximately 5.7%[81]. - Total assets increased to $3,238,832 million as of June 30, 2021, compared to $3,097,905 million in the previous quarter, reflecting a growth of 4.6%[193]. - The average balance of interest earning deposits with financial institutions was $499,555 million, yielding an interest expense of $137 million at a rate of 0.11%[193]. - Total securities (tax equivalent) increased to $614,066 million, with an interest income of $3,426 million at a rate of 2.24%[193]. - The total fair value of loans held-for-sale was $6,814,000 as of June 30, 2021[115].

Old Second Bancorp, Inc. (NASDAQ:OSBC) Q2 2021 Results Conference Call July 22, 2021 11:00 AM ET Company Participants Jim Eccher - Chief Executive Officer Brad Adams - Chief Financial Officer Gary Collins - Vice Chairman Conference Call Participants Chris McGratty - KBW Nathan Race - Piper Sandler David Long - Raymond James Brian Martin - Janney Montgomery Scott Operator Good morning, everyone, and thank you for joining us today for Old Second Bancorp's Second Quarter 2021 Earnings Call. On the call today i ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 0-10537 (Exact name of Registrant as specified in its charter) of incorporation or organization) Delaware 36-3143493 (State or ot ...

Old Second Bancorp, Inc. (NASDAQ:OSBC) Q1 2021 Earnings Conference Call April 22, 2021 11:00 AM ET Company Participants Jim Eccher – Chief Executive Officer Brad Adams – Chief Financial Officer Gary Collins – Vice Chairman Conference Call Participants Chris McGratty – KBW Nathan Race – Piper Sandler David Long – Raymond James Brian Martin – Janney Montgomery Scott Operator Good morning, everyone, and thank you for joining us today for Old Second Bancorp, Inc.'s First Quarter 2021 Earnings Call. On the call ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (630) 892-0202 (Registrant's telephone number, including Area Code) Title of Class Trading Common Stock, $1.00 par value OSBC The Nasdaq Stock Market Sec ...

Financial Data and Key Metrics Changes - Net income for Q4 2020 was $8 million, or $0.27 per diluted share, impacted by $1.3 million in MSR valuation mark-to-market losses despite strong mortgage banking performance [6] - Net interest income increased by $1.4 million from the previous quarter and $700,000 from Q4 2019, positively influenced by the forgiveness of $62.6 million in PPP loans [19][20] - The loan to deposit ratio was slightly over 80% at year-end, stable compared to the previous quarter and significantly improved from 90.8% a year ago [7] Business Line Data and Key Metrics Changes - Fee income declined from the previous quarter due to a seasonal slowdown in mortgage banking revenues and higher mark-to-market losses on MSRs [6][20] - Non-performing and classified assets saw slight increases, but overall asset quality trends remained stable [9] - Loans under modification accounted for approximately 1.4% of the loan book, with 86% of COVID-19 related deferrals returning to payment status or paid off by year-end 2020 [10] Market Data and Key Metrics Changes - Approximately $63 million of PPP loans were forgiven during the quarter, contributing to an increase in net interest margin [7] - The economic outlook remains cautious, with expectations of a prolonged recession and an unemployment rate around 7% through September 2021 [23] Company Strategy and Development Direction - The company is focused on maintaining expense discipline while cautiously deploying excess liquidity into short-dated assets [19][27] - Management is optimistic about potential M&A opportunities and is open to repurchasing stock, given the strong capital position [27][78] - The strategy includes enhancing Chicago distribution and maintaining a disciplined credit culture [80][102] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the underlying economy improving, while acknowledging potential risks from high unemployment and changing consumer demand [12][16] - The company is closely monitoring trends in retail and office commercial real estate, indicating a cautious but proactive approach to new lending relationships [16] - Overall, management remains encouraged by trends in several areas and confident in the strength of the balance sheet [29] Other Important Information - The company has minimal exposure to the hardest-hit industries and has seen marked improvements in credit trends [24][25] - The reserve level stands at 1.73% of total loans, with a focus on maintaining adequate reserves under various economic scenarios [11][12] Q&A Session Summary Question: Capital and Buyback Strategy - Inquiry about the potential for aggressive stock buybacks given high capital levels, with management indicating it is a consideration but with caution due to economic uncertainties [36][38] Question: Revenue Outlook - Discussion on net interest income growth excluding PPP loans, with management expressing confidence in offsetting PPP runoff with better yields from new loans [44][46] Question: Expense Growth and Hiring - Questions regarding expense growth expectations for 2021, with management anticipating a 3% to 4% increase primarily due to returning healthcare claims [55] Question: Loan Growth Drivers - Inquiry about loan growth drivers excluding PPP, with management highlighting successful closures in large relationships and sectors like healthcare [56] Question: M&A Activity - Questions about ongoing M&A conversations and the tone from potential partners, with management noting rational expectations from sellers in the current environment [77][78]

Financial Data and Key Metrics Changes - Net income for Q3 2020 was $10.3 million, or $0.34 per diluted share, positively impacted by higher volumes of mortgage banking activity and net gains on the sale of mortgage loans [6] - Net interest income declined slightly due to reductions in interest rates on variable rate loans, with a reported taxable equivalent margin reduction of 31 basis points [6][16] - The loan to deposit ratio decreased from 84% to 82% due to increased liquidity [6] Business Line Data and Key Metrics Changes - Mortgage banking income increased by $950,000 primarily due to net gains on the sale of mortgage loans [18] - Loans under modification stand at approximately 2.4% of the loan book, with 76% of COVID-19 related deferrals returning to payment status [8][9] - Total loans decreased by $22 million from the previous quarter due to continuing payoff activity and softer origination volume [13] Market Data and Key Metrics Changes - The company has minimal exposure to the hardest-hit industries, with zero direct energy or aircraft exposure and limited hotel and restaurant lending [11] - The overall economic forecast remains cautious, projecting significant economic stress and elevated unemployment rates [12] Company Strategy and Development Direction - The company is focused on protecting employees and customers while seeking new lending relationships [10][12] - Management is optimistic about future opportunities to improve the franchise, emphasizing the importance of timing and liquidity [24] Management's Comments on Operating Environment and Future Outlook - Management remains cautious but encouraged by current trends, confident in the balance sheet, and believes the portfolio is well diversified [12][23] - The company expects to face losses but believes its capital and liquidity position is strong enough to withstand economic challenges [12][20] Other Important Information - The company announced two new additions to its Board of Directors, enhancing its governance and strategic direction [25] - The provision for loan loss totaled $300,000 in Q3, reflecting a cautious approach to potential future losses [19] Q&A Session Summary Question: Loan growth outlook and unfunded commitment ACL - Management sees a pipeline starting to build again and expects to stabilize the portfolio with potential growth in Q4 [27] Question: Core NIM outlook and compression expectations - Management indicated that core NIM is expected to experience some compression due to elevated excess liquidity [29][31] Question: Credit performance and classified loans - A modest uptick in classified loans was noted, with proactive measures in place to manage credit quality [32] Question: Expected losses and risk areas - The leasing portfolio, particularly in the motor coach industry, is identified as having the highest risk for potential losses [36] Question: Reserve assumptions and stimulus package - Management does not currently have expectations built into reserves for a stimulus package [40] Question: Expense management and efficiency - The company has maintained a sub-60% efficiency ratio and plans to continue managing expenses tightly [44] Question: Capital return and buyback expectations - Management indicated a willingness to continue returning capital through buybacks if visibility improves [45] Question: Updates on retail and office portfolios - The retail portfolio shows some concern in smaller retail strips, while the office portfolio remains stable with no loans on deferral [59][61]