Company: OSBC
Filing Date: 2025-05-08
Form Type: 424B3
Source: 0001104659-25-046065
Chunk: 86

Company: OLD SECOND BANCORP INC
Filing Date: 2025-05-08
Form: 424B3
Chunk 86
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 of the estimated excess capital available for dividends that Bancorp Financial could generate over the period from June 30, 2025 through December 31, 2029 as a standalone company, and (ii) the present value of Bancorp Financial’s implied terminal value at the end of such period. KBW assumed that Bancorp Financial would maintain a tangible common equity to tangible asset ratio of 10.0% and would retain sufficient earnings to maintain that level. KBW derived implied terminal values using two methodologies, one based on estimated 2030 earnings multiples and the other based on December 31, 2030, tangible book value multiples. Using implied terminal values for Bancorp Financial calculated by applying a terminal multiple range of 9.0x to 13.0x to Bancorp Financial’s estimated 2030 earnings, this dividend discount model analysis resulted in a range of implied values per share of Bancorp Financial common stock of $46.21 to $70.85. Using implied terminal values for Bancorp Financial calculated by applying a terminal multiple range of 1.0x to 1.4x to Bancorp Financial’s December 31, 2030 tangible book value, this dividend discount model analysis resulted in a range of implied values per share of Bancorp Financial common stock of $44.26 to $65.86. The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of Bancorp Financial. Old Second Dividend Discount Model Analysis. KBW performed a dividend discount model analysis of Old Second to estimate a range for the implied equity value of Old Second. In this analysis, KBW used publicly available consensus “street estimates” for Old Second and assumed long-term growth rates for Old Second provided by Old Second management, and assumed discount rates ranging from 11.0% to 15.0%. The range of values was derived by adding (i) the present value of the estimated excess capital available for dividends that Old Second could generate over the period from June 30, 2025 through December 31, 2029 as a standalone company, and (ii) the present value of Old Second’s implied terminal value at the end of such period. KBW assumed that Old Second would maintain a tangible common equity to tangible asset ratio of