UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDED FORM 10-Q
Quarterly Report Pursuant To Section 13 Or 15(d)
Of The Securities Exchange Act Of 1934
For the quarterly period ended June 30, 1997
Commission file No. 0-10537
Old Second Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3143493
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
37 South River Street, Aurora, Illinois 60507
(Address of principal executive offices) (Zip Code)
(630) 892-0202
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject
to such filing requirements for the past 91 days.
Yes [X] No[ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable
date.
3,049,292 shares of no par value common stock are outstanding
as of August 13, 1997.
There are no exhibits with this Form 10-Q.
Page 1 of 12
<PAGE>
Part I - Financial Information
Item 1 - Financial Statements
<TABLE>
OLD SECOND BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE DATA)
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
- - - - - - - - - - - -------- -----------
<S> <C> <C>
Cash and Due from Banks, Non-
Interest Bearing $32,354 $40,132
Interest Bearing Deposits With Banks 350 200
Federal Funds Sold 49,175 40,675
-------- -------
Total Cash and Cash Equivalents 81,879 81,007
Available-for-Sale Securities 255,339 287,064
Loans Held for Sale 12,127 6,137
Loans 514,628 482,304
Less: Allowance For Possible Loan
Losses 6,603 6,968
Unearned Income 384 390
-------- -------
Loans, Net 519,768 481,083
Bank Premises and Equipment, Net 21,123 19,410
Other Assets 23,833 21,280
-------- --------
TOTAL ASSETS $901,942 $889,844
======== ========
LIABILITIES
- - - - - - - - - - -
Deposits:
Demand $113,388 $118,336
Savings 289,803 305,272
Time 377,058 366,361
-------- --------
Total Deposits 780,249 789,969
Federal Funds Purchased and Securities
Sold Under Agreements to Repurchase 18,892 1,838
Other Short-Term Borrowings 5,455 4,401
Note Payable 0 1,017
Other Liabilities 10,487 8,419
-------- --------
Total Liabilities 815,083 805,644
STOCKHOLDERS' EQUITY
- - - - - - - - - - -
Preferred Stock, no par value, 300,000 shares
authorized, none issued
Common Stock, no par value
shares authorized: 6,000,000
shares issued: 2,937,706 15,844 15,844
Retained Earnings 70,702 68,052
Net Unrealized Gain on Investments 313 304
-------- --------
Total Stockholders' Equity 86,859 84,200
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $901,942 $889,844
======== ========
</TABLE>
[FN]
See accompanying notes.
Page 2
<PAGE>
<TABLE>
OLD SECOND BANCORP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<CAPTION>
Three Months Ended
June 30,
1997 1996
---------- ----------
INTEREST INCOME:
- ------------------
<S> <C> <C>
Interest and Fees on Loans $11,141 $9,984
Interest and Dividends on
Available-for-Sale Securities:
Taxable 3,193 3,162
Exempt From Federal Income Tax 865 939
Interest on Federal Funds Sold 446 542
Interest on Interest Bear. Dep. 2 6
------- -------
Total Interest Income 15,647 14,633
INTEREST EXPENSE:
- ----------------
Savings Deposits 1,882 1,942
Time Deposits 5,361 4,749
Other Short-Term Borrowings 200 40
------- -------
Total Interest Expense 7,443 6,731
Net Interest Income 8,204 7,902
Provision for Possible
Loan Losses 350 140
Net Interest Income After -------- -------
Provision for Possible
Loan Losses 7,854 7,762
OTHER INCOME:
- - - - - - - - - -
Trust Fees 1,003 991
Service Charges on Deposit Accounts 792 692
Gain on Sale of Loans 553 692
Other Income 755 1,094
------- -------
Total Other Income 3,103 3,469
------- -------
OTHER EXPENSES:
- --------------
Salaries and Employee Benefits 4,455 4,573
Net Occupancy of Bank Premises 532 558
Furniture and Equipment 776 746
FDIC Insurance 60 67
Marketing 334 164
Stationery and Supplies 261 309
Amortization of Intangible Assets 281 227
Other 1,938 1,553
------- -------
Total Other Expenses 8,637 8,197
------- -------
Income Before Income Taxes 2,320 3,036
Income Tax Expense 825 971
------- -------
Net Income $1,495 $2,063
======= =======
Per Share Amounts:
- - - - - - - - - -
Net Income $0.49 $0.68
Dividends Declared 0.39 0.35
Average Shares Outstanding 3,049,190 3,049,412
</TABLE>
[FN]
See accompanying notes.
Page 3
<PAGE>
<TABLE>
OLD SECOND BANCORP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<CAPTION>
Six Months Ended
June 30,
1997 1996
-------- -------
INTEREST INCOME:
- ------------------
<S> <C> <C>
Interest and Fees on Loans $22,037 20,094
Interest and Dividends on
Available-for-Sale Securities:
Taxable 6,565 6,344
Exempt From Federal Income Tax 1,683 1,893
Interest on Federal Funds Sold 887 1,170
Interest on Interest Bear. Dep. 7 11
-------- --------
Total Interest Income 31,179 29,512
--------- --------
INTEREST EXPENSE:
- ----------------
Savings Deposits 3,782 3,852
Time Deposits 10,552 9,630
Other Short-Term Borrowings 356 288
--------- --------
Total Interest Expense 14,690 13,770
--------- --------
Net Interest Income 16,489 15,742
Provision for Possible
Loan Losses 545 279
Net Interest Income After --------- --------
Provision for Possible
Loan Losses 15,944 15,463
OTHER INCOME:
- - - - - - - - - -
Trust Fees 2,022 1,967
Service Charges on Deposit Accounts 1,505 1,353
Gain on Sale of Loans 1,220 1,876
Other Income 1,397 2,162
-------- -------
Total Other Income 6,144 7,358
-------- --------
OTHER EXPENSES:
- --------------
Salaries and Employee Benefits 8,780 9,074
Net Occupancy of Bank Premises 1,059 1,053
Furniture and Equipment 1,593 1,503
FDIC Insurance 114 109
Marketing 535 400
Stationery and Supplies 488 542
Amortization of Intangible Assets 568 452
Other 3,360 3,170
-------- --------
Total Other Expenses 16,497 16,303
-------- --------
Income Before Income Taxes 5,591 6,518
Income Tax Expense 1,822 2,080
-------- --------
Net Income $3,769 $4,438
======== ========
Per Share Amounts:
- - - - - - - - - -
Net Income $1.24 $1.46
Dividends Declared 0.86 0.73
Average Shares Outstanding 3,049,190 3,049,412
</TABLE>
[FN]
See accompanying notes.
Page 4
<PAGE>
<TABLE>
OLD SECOND BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
For the Six Months
Ended June 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES : ---------- ----------
- --------------------------------------
<S> <C> <C>
Interest Received 30,708 29,560
Interest Paid (14,764) (14,187)
Paid to Suppliers and Employees (14,369) (12,727)
Trust Fees Received 2,022 1,967
Income Taxes Paid (1,612) (3,068)
Service Charges Received on Deposit Accounts 1,505 1,353
Net Increase in Mortgage Loans Held For Sale (5,990) 24,151
Other Income Received 1,396 2,165
--------- ---------
Net Cash Provided (Used) By Operating
Activities (1,104) 29,214
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Net (Increase) Decrease in Loans (32,850) (13,267)
Purchases of Available for Sale Securities (14,470) (33,505)
Proceeds from Maturities of Available
for Sale Securities 45,955 26,246
Capital Expenditures (2,719) (425)
Purchase of Mortgage Servicing Rights (37) (552)
Other, Net (223) 371
--------- ---------
Net Cash Provided (Used) By Investing
Activities (4,344) (21,132)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Net Decrease in Deposits (9,720) (7,972)
Net Increase (Decrease) in Other
Short-term Borrowings 18,108 (9,611)
Decrease in Note Payable (1,017) (20)
Dividends Paid (1,469) (1,294)
Other, Net 417 (74)
--------- ---------
Net Cash Provided (Used) in Financing
Activities 6,319 (18,971)
--------- ---------
Net Decrease in Cash & Cash Equivalents 871 (10,889)
Cash and Cash Equivalents at Beginning of
Period 81,007 86,921
--------- ---------
Cash & Cash Equivalents at End of Period 81,878 76,032
========= =========
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
- -----------------------------------
Net Income 3,769 4,438
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 1,006 843
Provision for Possible Loan Losses 545 279
Increase in Taxes Payable 210 (988)
Increase in Interest Receivable (735) (2)
Decrease in Interest Payable (73) (392)
Net Premium Amortization
(Discount Accretion) 264 50
Amortization of Intangible Assets 568 452
(Increase) Decrease in Mortgages Held
for Sale (5,990) 24,151
Gains on Sale of Loans (1,220) (1,874)
Decrease in Accrued Expenses 2,268 (1,034)
(Increase) Decrease in Prepaid Expenses (1,716) 3,291
-------- ---------
Total Adjustments (4,873) 24,776
-------- ---------
Net Cash (Used) Provided by Operating
Activities (1,104) 29,214
======== =========
</TABLE>
[FN]
See accompanying notes.
Page 5
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed in the preparation of interim
financial statements are consistent with those used in the
preparation of annual financial information. The interim
financial statements reflect all adjustments, which are normal
and recurring in nature, necessary in the opinion of management
to a fair statement of results for the interim periods presented.
Results for the six months ended June 30, 1997 are not
necessarily indicative of the results that may be expected for
the year ended December 31, 1997.
NOTE 2 - ACCOUNTING FOR EARNING PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard (SFAS) No. 128
"Earning Per Share" which prescribes the calculation of earnings
per share for both interim and annual financial statements.
Adoption of this standard is required for periods ending after
December 15, 1997 and is not expected to have a material effect
on the Corporation's earnings per share computation.
NOTE 3 - BUSINESS COMBINATIONS
On May 13, 1997 Old Second issued 111,706 shares of common stock
to acquire 100% of the outstanding common stock of Maple Park
Bancshares, Inc. The acquistion of Maple Park Bancshares, Inc. was
accounted for as a pooling-of-interest; accordingly, the
financial statements have been restated for all periods presented
to include the accounts and results of operation of Maple Park
Bancshares, Inc.
Operating results of Old Second and Maple Park Bancshares for the
three months and six months ended June 30, 1997 and 1996, prior
to restatement are as follows:
Page 6
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended June 30,
1997 1996
---- ----
(In thousands)
<S> <C> <C>
Old Second
Net Interest Income 7,899 7,313
Net Income 1,967 2,543
Maple Park Bancshares
Net Interest Income 305 589
Net Income (472) (480)
Combined
Net Interest Income 8,204 7,902
Net Income 1,495 2,063
Six Months Ended June 30,
1997 1996
---- ----
(In thousands)
Old Second
Net Interest Income 15,768 14,696
Net Income 4,382 5,025
Maple Park Bancshares
Net Interest Income 721 1,046
Net Income (613) (587)
Combined
Net Interest Income 16,489 15,742
Net Income 3,769 4,438
</TABLE>
Page 7
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 2
OLD SECOND BANCORP, INC. AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion analyzes the consolidated financial
condition and results of operations of Old Second Bancorp, Inc.
and its subsidiaries.
FINANCIAL CONDITION
Total assets at June 30, 1997 of $901,942,000 were up 1.4% from
the 1996 year-end total of $889,844,000. Total investment
securities of $255,339,000 were down $31,725,000 (11.0%). Net
loans of $519,768,000 were up $38,685,000 (8.0%).
Total deposits of $780,249,000 were down 1.2% from the 1996
year-end total of $789,969,000 and includes declines of
$4,948,000 in demand and $15,469,000 in savings deposits.
Total stockholders' equity of $86,859,000 increased by $2,659,000
from the 1996 year-end total of $84,200,000. The increase was
primarily the result of net income less dividends paid.
Page 8
<PAGE>
RESULTS OF OPERATIONS
Operating results include net income for Old Second Bancorp, Inc.
and its subsidiaries for the six months ended June 30, 1997 and
1996.
Net interest income for the six months ended June 30, 1997 of
$16,489,000 was up $747,000 (4.7%) over the same period of 1996.
Total interest income for the six months of $31,179,000 was
higher than 1996 by $1,667,000 (5.6%). Total interest expense of
$14,690,000 for the six months increased $920,000 (6.7%) from the
same period in 1996.
Total other income for the six months ending June 30, 1997 of
$6,144,000 was down $1,214,000 (19.7%) from the same period a
year ago. Trust fees increased $55,000 (2.87%) for the six months
while service charges on deposit accounts increased $152,000
(11.2%). Other income decreased $765,000 (35.3%) from the same
period in 1996 primarily due to a decline in secondary
mortgage fees which were higher in 1996 as customers took
advantage of declining interest rates by refinanced their mortgages.
Total other expenses for the six months of 1997 increased
$194,000 (1.2%) from the same period in 1996 due primarily to
additional costs of establishing new locations and the costs
related to the acquisition of Maple Park Bancshares, Inc. Salaries and
employee benefits were down $294,000 (3.2%). Furniture and
equipment expense increased $90,000 (6.0%), while marketing expense
increased $135,000 (33.8%); and, stationery and supplies expense decreased
$54,000 (10.0%). Other expenses were $190,000 (6.0%) higher than the same
period in 1996.
Page 9
<PAGE>
LIQUIDITY
Liquidity is generally defined as the ability to meet cash flow
requirements which, for a bank means having funds available to
satisfy customer credit needs as well as having funds available to
meet depositor withdrawal requests. For the Corporation, liquidity
means having funds available to pay cash dividends, debt service and
operating expenses. Liquid assets consist primarily of non-interest
bearing and interest bearing deposits, overnight federal funds sold and
unpledged investment securities. The Consolidated Statements of Cash Flows
included with the financial statements herein set forth the cash
flows from operating, investing and financing activities for the
various time periods.
Net cash disbursed as a result of operating activities was
$1,104,000 for the six months ended June 30, 1997. Net cash
provided by operating activities for the six months ended June
30, 1996 was $29,214,000.
Net cash disbursed as a result of investing activities was
$4,344,000 for the six months in 1997; in 1996 net cash disbursed
as a result of investing activities totaled $21,132,000. The
primary components of cash flows from investing activities are
funding and repayment of customer loans and purchases and sales
of investment securities. The increase in cash flows from
investing activities was primarily attributable to the net
increase in loans offset by increased investment securities
purchase and proceeds activity.
Cash flows from financing activites are primarily attributable to
changes in deposit levels, short-term borrowings and notes
payable, and the payment of dividends to stockholders. For the
six months ended June 30, 1997, financing activities provided
$6,319,000 of net cash. For the six months ended June 30, 1996,
financing activities used $18,971,000 of net cash. A decrease in
deposits generated cash outflows of $9,720,000 and $7,972,000 for
the six months of 1997 and 1996, respectively.
Page 10
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
Information contained in Item 5 of Bancorp's Form
8-K Current Report dated May 20, 1997 regarding
the acquisition of Maple Park Bancshares is
incorporated by reference in this Form 10-Q
Page 11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
OLD SECOND BANCORP, INC.
/s/ R. J. Carlson
By: R.J. Carlson,
President, Chief Financial Officer,
Chief Operating Officer, Secretary
and Director
Date: 09/10/97
Page 12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 32354
<INT-BEARING-DEPOSITS> 350
<FED-FUNDS-SOLD> 49175
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 255339
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 526755
<ALLOWANCE> 6603
<TOTAL-ASSETS> 901942
<DEPOSITS> 780249
<SHORT-TERM> 5455
<LIABILITIES-OTHER> 10487
<LONG-TERM> 0
<COMMON> 15844
0
0
<OTHER-SE> 70702
<TOTAL-LIABILITIES-AND-EQUITY> 901942
<INTEREST-LOAN> 20037
<INTEREST-INVEST> 8248
<INTEREST-OTHER> 356
<INTEREST-TOTAL> 31179
<INTEREST-DEPOSIT> 14334
<INTEREST-EXPENSE> 14690
<INTEREST-INCOME-NET> 16489
<LOAN-LOSSES> 545
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 16497
<INCOME-PRETAX> 5591
<INCOME-PRE-EXTRAORDINARY> 5591
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3769
<EPS-PRIMARY> 1.24
<EPS-DILUTED> .84
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
