8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report	January 19, 2007
(Date of earliest event reported)	January 19, 2007

Old Second Bancorp, Inc.

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

0-10537	36-3143493
(Commission File Number)	(I.R.S. Employer Identification Number)
37 South River Street, Aurora, Illinois	60507
(Address of principal executive offices)	(Zip Code)

(630) 892-0202
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On January 19, 2007, Old Second Bancorp, Inc. issued a press release announcing its earnings for the fourth quarter ended December 31, 2006. The press release is attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits
99.1		Press release dated January 19, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

				OLD SECOND BANCORP, INC.
Dated: January 19, 2007	By:	/s/ J. Douglas Cheatham
			J. Douglas Cheatham
			Senior Vice President and
			Chief Financial Officer

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EX-99.1

Exhibit 99.1

Old Second Bancorp, Inc. (Nasdaq: OSBC)		For Immediate Release January 19, 2007
Contact:	J. Douglas Cheatham Chief Financial Officer (630) 906-5484

Old Second Bancorp, Inc. Announces Fourth Quarter Earnings

AURORA, Illinois — Old Second Bancorp, Inc. (Nasdaq: OSBC) today announced fourth quarter earnings of $0.41 per diluted share, on earnings of $5.5 million. Diluted earnings per share were down from the fourth quarter of 2005, in which the Company earned $0.57 per diluted share on net income of $7.7 million. Earnings per diluted share for 2006 were $1.69 on $22.9 million in net income, compared with $2.03 per diluted share in 2005, on $27.7 million in net income. The 2006 operating results included balance sheet growth and increases in noninterest income, but these items were offset by a lower net interest margin, a higher provision for loan losses, a decline in mortgage banking activity, and increased facility and related costs associated with five new branches.

Additionally, a verdict for approximately $2.0 million was entered in the Circuit Court of LaSalle County on January 17, 2007 in favor of Old Second Bank — Yorkville, a wholly owned subsidiary of the Company, and against an insurance company.  The liable insurance company has the right to appeal the judgment. As a result, the Company will not record any amount of the judgment as income until all appeals have been exhausted and the matter has been concluded in the Company’s favor.

Net interest income decreased from $74.0 million in 2005 to $70.2 million in 2006. Fourth quarter net interest income declined from $19.0 million in 2005, to $16.7 million in 2006. The growth in earning assets for both the quarter and year to date periods were offset by a lower net interest margin. Average earning assets grew $111.0 million or 5.3% from December 31, 2005 to end of year 2006. Similarly, average earning assets in the fourth quarter of 2006 were $62.4 million, or 2.9%, higher than in the same period in 2005. Despite that growth, the net interest margin (tax equivalent basis) was 3.09% in the fourth quarter of 2006 and 3.30% for 2006. This compares with 3.60% in the fourth quarter of 2005 and 3.64% for 2005.

On a year-to-year comparative basis, the average tax-equivalent yield on earning assets increased from 5.84% in 2005 to 6.53% in 2006, which was a 69 basis point increase. However, during the same period the cost of funds increased from 2.53% to 3.68%, or 115 basis points. Changes in deposit funding composition continued to have the effect of increasing interest costs and lowering the net interest margin in 2006. The average balances of lower-cost sources of funds such as interest-bearing transaction accounts and savings accounts declined $20.3 million, or 2.5%, from December 31, 2005 to December 31, 2006. At the same time, noninterest-bearing deposits increased by a nominal amount while higher-cost sources of funds such as time deposits increased $128.2 million, or 15.7%. Average non-deposit funding costs also increased for the year as other short-term borrowings and notes payable increased $14.3 million, or 12.5%, and $5.0 million, or 171.6%, respectively.

The Company recorded no provision for loan losses in the fourth quarter of 2006, leaving the year-to-date provision at $1,244,000. The Company recorded a negative provision of $460,000 in

the fourth quarter of 2005, which resulted in a total provision expense of $353,000 for that year. Provisions for loan losses are made to provide for probable and estimable losses inherent in the loan portfolio. Management determines the amount to provide for in the allowance for loan losses based upon a number of factors including loan growth, the quality of the loan portfolio and loan loss experience. Net charge offs in 2006 and 2005 were $380,000 and $519,000 respectively. Non-performing assets decreased from $6.8 million at year-end 2005 to $2.3 million at year-end 2006. Total loans increased from $1.70 billion at year-end 2005 to $1.76 billion at year-end 2006. This loan growth was one of the factors considered when determining the amount provided in 2006.

Noninterest income was $7.4 million during the fourth quarter of 2006, an increase of $194,000, or 2.7%, compared to the fourth quarter of 2005. Non-interest income was $28.7 million during 2006, an increase of $557,000, or 2.0%, compared to 2005. Trust income increased to $2.1 million during the fourth quarter of 2006 and to $7.6 million for the year. These are increases of $315,000 and $951,000, respectively, from the prior year. The increases in trust income for both the quarter and the year were primarily associated with higher estate fees and increased levels of assets under management. Assets under management were $1.0 billion and $959.5 million at December 31, 2006 and 2005, respectively.

Aggregate mortgage banking income included gains on sales of mortgage loans, secondary market fees, and servicing income, and as a category declined $236,000, or 16.0%, from the fourth quarter of 2005 to the fourth quarter of 2006. For the year 2006, mortgage-banking income was down $1,850,000, or 27.6%, from 2005 levels. In general, the higher borrowing costs associated with an increased interest rate environment through much of 2006 resulted in a decline in mortgage loan demand and related mortgage banking income.

There were no securities sales in the fourth quarter of 2006 and a small loss of $9,000 was recorded in the same period of 2005. In 2006, securities gains totaled $418,000 compared with a $14,000 loss in 2005. Bank owned life insurance (“BOLI”) income increased from $305,000 to $493,000 in the fourth quarter of 2006, and from $957,000 to $1,937,000 for the year 2006 because of additional BOLI purchases made late in 2005. Other income decreased $81,000, or 5.6%, from the fourth quarter of 2005, but remained substantially unchanged for 2006 from 2005.

Noninterest expense was $16.2 million during the fourth quarter of 2006, an increase of $1.2 million, or 8.0%, from $15.0 million in the fourth quarter of 2005. Noninterest expense was $65.2 million during the year 2006, an increase of $4.7 million, or 7.8%, from $60.5 million in the prior year.

Salaries and benefits expense was $8.7 million during the fourth quarter of 2006, a decrease of $65,000 from the fourth quarter of 2005. For the year 2006, salaries and benefits were $36.0 million compared to $35.7 million in 2005, an increase of $348,000 or 1.0%. The full time equivalent employee count increased from 548 at December 31, 2005 to 582 at December 31, 2006 as staffing requirements were fulfilled at five new banking locations. The amount of change in this category should be viewed in the context of recent changes in the Company’s benefit structure. The Company completed the distribution of assets from its defined benefit pension plan in December 2006 after terminating the plan in December of 2005. In addition to the December 2005 pension plan termination, the Company paid all amounts due to participants of the supplemental retirement plan (SERP) in 2005. The combined pension and SERP expense

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for the fourth quarter and year 2005 were $716,000 and $2.4 million, respectively, and were included in the salaries and employee benefits category for that year. As noted separately, the loss on settlement of the benefit obligation relating to the termination was $109,000 in the fourth quarter of 2006 and $1,467,000 for the year. A reduction in estimated accrual for bonus programs was also recorded in 2006.

Net occupancy and furniture and equipment expenses increased $171,000 from the fourth quarter of 2005 to the fourth quarter of 2006, or 7.4%. For the year 2006, net occupancy and furniture and equipment expenses increased $1.1 million, or 12.1% from 2005. The Company expanded its market presence in 2006, which also increased the related facility expenses. There were thirty-two branches in operation at December 31, 2006 compared to twenty-seven banking locations at December 31, 2005. Other expense increased $807,000, or 23.4%, from the fourth quarter of 2005, to $4.3 million in the fourth quarter of 2006. Other expenses increased $1.5 million, or 10.8%, in the year 2006, to $15.5 million. Increases in other expense for the year were primarily due to costs associated with the amortization and valuation of mortgage servicing rights, increased audit and compliance related to Sarbanes-Oxley mandates, loan production related expenditures, rising costs associated with automatic teller machine operations and new employee recruitment fees.

The provision for income tax as a percentage of pretax income decreased from 33.6% as of the fourth quarter of 2005 to 30.1% as of the fourth quarter of 2006. Income tax as a percentage of pretax income decreased from 33.0% for the year 2005 to 29.5% for 2006. The reduction in effective tax rate was primarily due to additional tax-exempt BOLI income and the formation of a real estate investment trust (REIT) in the third quarter of 2006. In addition to income tax benefits, which lowered the effective tax rate, the REIT ownership structure also provides the Company with an alternate vehicle for raising future capital as desired.

Total assets were $2.46 billion as of December 31, 2006, an increase of $90.7 million, or 3.8%, from $2.37 billion as of December 31, 2005. Total loans were $1.76 billion as of December 31, 2006, an increase of $59.5 million, or 3.5%, from $1.70 billion as of December 31, 2005. The largest increase was in residential real estate loans, which rose $36.1 million, or 6.6%, since December 31, 2005. Commercial real estate and construction and development loans increased $14.8 million and $12.8 million, respectively, since December 31, 2005. These changes reflected the continuing loan demand in the Company’s markets. The loan portfolio generally reflects the economic profile of the communities in which the Company operates. Because the Company is located in growing areas, real estate lending (including commercial, residential, and construction) is a significant portion of the portfolio. These categories comprised 88.8% of the portfolio as of December 31, 2006 compared to 88.2% of the portfolio as of December 31, 2005.

Total deposits increased $127.4 million, or 6.6%, during 2006. Noninterest-bearing deposits increased $16.5 million, or 6.2%, while savings deposits decreased $13.6 million, or 11.6%. At the same time, NOW and money market accounts increased $12.8 million, or 5.2%, and $13.8 million, or 3.2%, respectively. In 2006, time deposits increased $98.0 million, or 11.2%. Pricing and sales strategies targeted the 2006 growth in NOW and money market accounts and capitalized on depositor preference for check accessibility. Depositors also continued to favor certificates of deposits to lock in rates during the rising interest rate environment. The increases in interest-bearing transaction account pricing and the continued shift into certificates of deposit resulted in a higher cost of funds, which adversely impacted the net interest margin. At the same time, however, these successful sales efforts resulted in an increase in core funding sources and

3

new account relationships, provided funding for loan growth and allowed the Company to reduce reliance on other short-term borrowings, which typically have a higher interest rate.

Non-GAAP Presentations: Management uses certain non-GAAP ratios to evaluate and measure the Company’s performance. Management presents 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. Management also presents an efficiency ratio that is non-GAAP. The efficiency ratio is calculated by dividing adjusted non-interest expense by the sum of net interest income on a tax equivalent basis and non-interest income. Management believes this measure provides investors with information regarding the Company’s operating efficiency and how management evaluates performance internally. The tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

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, please review our filings with the Securities and Exchange Commission, including the Company’s Form 10-K for 2005.

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Financial Highlights (unaudited)

In thousands, except share data

	Quarter Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
Summary Income Statement:
Net interest income	$	16,714		$	19,040		$	70,238		$	73,999
Provision for loan losses	—			(460		)	1,244			353
Noninterest income	7,392			7,198			28,706			28,149
Noninterest expense	16,248			15,041			65,220			60,500
Income taxes	2,368			3,915			9,571			13,612
Net income	5,490			7,742			22,909			27,683
Key Ratios (annualized):
Return on average assets	0.91		%	1.33		%	0.96		%	1.24		%
Return on average equity	13.94		%	20.35		%	14.81		%	19.11		%
Net interest margin (tax equivalent)	3.09		%	3.60		%	3.30		%	3.64		%
Efficiency ratio	65.41		%	55.81		%	64.02		%	57.65		%
Tangible capital to tangible assets	6.31		%	6.33		%	6.31		%	6.33		%
Total capital to risk weighted assets	10.83		%	10.91		%	10.83		%	10.91		%
Tier 1 capital to risk weighted assets	9.97		%	10.08		%	9.97		%	10.08		%
Tier 1 capital to average assets	7.90		%	8.02		%	7.90		%	8.02		%
Per Share Data:
Basic earnings per share	$0.42			$0.57			$1.71			$2.05
Diluted earnings per share	$0.41			$0.57			$1.69			$2.03
Dividends declared per share	$0.14			$0.13			$0.55			$0.51
Book value per share	$11.96			$11.26			$11.96			$11.26
Tangible book value per share	$11.80			$11.08			$11.80			$11.08
Ending number of shares outstanding	13,127,292			13,520,073			13,127,292			13,520,073
Average number of shares outstanding	13,139,745			13,499,232			13,367,062			13,486,598
Diluted average shares outstanding	13,292,060			13,675,909			13,526,602			13,661,024
End of Period Balances:
Loans	$	1,763,912		$	1,704,382		$	1,763,912		$	1,704,382
Deposits	2,062,693			1,935,278			2,062,693			1,935,278
Stockholders’ equity	157,022			152,262			157,022			152,262
Total earning assets	2,264,158			2,194,733			2,264,158			2,194,733
Total assets	2,458,522			2,367,830			2,458,522			2,367,830
Average Balances:
Loans	$	1,769,383		$	1,677,614		$	1,748,328		$	1,617,557
Deposits	2,034,917			1,946,157			1,992,249			1,883,351
Stockholders’ equity	156,288			150,950			154,686			144,843
Total earning assets	2,237,149			2,174,789			2,218,989			2,107,496
Total assets	2,400,631			2,317,849			2,377,769			2,239,334

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Financial Highlights, continued (unaudited)

In thousands, except share data

	Year Ended
	December 31,
	2006			2005
Asset Quality
Charge-offs	$	888		$	1,049
Recoveries	508			530
Net charge-offs	$	380		$	519
Provision for loan losses	1,244			353
Allowance for loan losses to loans	0.92		%	0.90		%
Nonaccrual loans	$	1,632		$	3,845
Restructured loans	—			—
Loans past due 90 days	583			2,752
Nonperforming loans	2,215			6,597
Other real estate	48			251
Nonperforming assets	$	2,263		$	6,848

Major Classifications of Loans

	December 31,
	2006			2005
Commercial and industrial	$	175,621		$	168,314
Real estate - commercial	605,098			590,328
Real estate - construction	374,654			361,859
Real estate - residential	586,959			550,823
Installment	23,326			35,236
	1,765,658			1,706,560
Unearned origination fees	(1,746		)	(2,178		)
	$	1,763,912		$	1,704,382

Major Classifications of Deposits

	December 31,
	2006		2005
Noninterest bearing	$	280,630	$	264,124
Savings	104,229		117,849
NOW accounts	257,505		244,727
Money market accounts	446,215		432,452
Certificates of deposits of less than $100,000	591,941		554,618
Certificates of deposits of $100,000 or more	382,173		321,508
	$	2,062,693	$	1,935,278

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Old Second Bancorp, Inc.
Consolidated Balance Sheets
(In thousands)

	(Unaudited)
	December 31,			December 31,
	2006			2005
Assets
Cash and due from banks	$	80,727		$	65,010
Interest bearing balances with banks	5,493			105
Federal funds sold	2,305			—
Cash and cash equivalents	88,525			65,115
Securities available for sale	471,592			470,431
Federal Home Loan Bank and Federal Reserve Bank Stock	8,783			8,418
Loans held for sale	14,378			11,397
Loans	1,763,912			1,704,382
Allowance for loan losses	16,193			15,329
Net loans	1,747,719			1,689,053
Premises and equipment, net	48,385			42,485
Other real estate owned	48			251
Mortgage servicing rights, net	2,882			2,271
Goodwill, net	2,130			2,130
Core deposit intangible assets, net	—			355
Bank owned life insurance	43,564			41,627
Accrued interest and other assets	30,516			34,297
Total assets	$	2,458,522		$	2,367,830
Liabilities
Deposits:
Demand	$	280,630		$	264,124
Savings, NOW, and money market	807,949			795,028
Time	974,114			876,126
Total deposits	2,062,693			1,935,278
Securities sold under repurchase agreements	38,218			57,625
Other short-term borrowings	127,090			171,825
Junior subordinated debentures	31,625			31,625
Notes payable	16,425			3,200
Accrued interest and other liabilities	25,449			16,015
Total liabilities	2,301,500			2,215,568
Stockholders’ Equity
Common stock	16,635			16,592
Additional paid-in capital	14,814			13,746
Retained earnings	192,423			176,824
Accumulated other comprehensive (loss)	(3,331		)	(4,562		)
Treasury stock	(63,519		)	(50,338		)
Total stockholders’ equity	157,022			152,262
Total liabilities and stockholders’ equity	$	2,458,522		$	2,367,830

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Old Second Bancorp, Inc.

Consolidated Statements of Income

(In thousands, except share data)

	Three Months Ended					Year to Date
	December 31,					December 31,
	(unaudited)		(unaudited)			(unaudited)
	2006		2005			2006		2005
Interest Income
Loans, including fees	$	32,070	$	28,276		$	123,614	$	102,649
Loans held for sale	134		143			487		690
Securities:
Taxable	3,319		3,279			12,837		12,064
Tax-exempt	1,262		1,213			5,011		4,810
Federal funds sold	37		—			42		7
Interest bearing deposits	35		1			38		3
Total interest and dividend income	36,857		32,912			142,029		120,223
Interest Expense
Savings, NOW, and money market deposits	5,710		3,761			18,571		11,988
Time deposits	11,485		7,660			40,965		26,052
Repurchase agreements	519		406			2,030		1,303
Other short-term borrowings	1,567		1,388			7,269		4,308
Junior subordinated debentures	617		617			2,467		2,448
Notes Payable	245		40			489		125
Total interest expense	20,143		13,872			71,791		46,224
Net interest and dividend income	16,714		19,040			70,238		73,999
Provision for loan losses	—		(460		)	1,244		353
Net interest income after provision for loan losses	16,714		19,500			68,994		73,646
Noninterest Income
Trust income	2,101		1,786			7,595		6,644
Service charges on deposits	2,187		2,188			8,336		8,291
Gain on sale of loans	892		1,176			3,647		5,535
Secondary mortgage fees	202		214			715		973
Mortgage servicing income	144		84			492		196
Securities (losses) gains, net	—		(9		)	418		(14		)
Bank owned life insurance	493		305			1,937		957
Other income	1,373		1,454			5,566		5,567
Total noninterest income	7,392		7,198			28,706		28,149
Noninterest Expense
Salaries and employee benefits	8,700		8,765			35,993		35,645
Loss on settlement of benefit obligation	109		—			1,467		—
Occupancy expense, net	1,179		1,086			4,548		3,695
Furniture and equipment expense	1,317		1,239			5,275		5,066
Amortization of core deposit intangible assets	89		89			355		355
Advertising expense	593		408			2,054		1,719
Other expense	4,261		3,454			15,528		14,020
Total noninterest expense	16,248		15,041			65,220		60,500
Income before income taxes	7,858		11,657			32,480		41,295
Provision for income taxes	2,368		3,915			9,571		13,612
Net income	$	5,490	$	7,742		$	22,909	$	27,683
Basic earnings per share	$	0.42	$	0.57		$	1.71	$	2.05
Diluted earnings per share	$	0.41	$	0.57		$	1.69	$	2.03
Dividends declared per share	$	0.14	$	0.13		$	0.55	$	0.51

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ANALYSIS OF AVERAGE BALANCES,
TAX EQUIVALENT INTEREST AND RATES
Quarters ended December 31, 2006 and 2005
(Dollar amounts in thousands- unaudited)

	2006							2005
	Average							Average
	Balance			Interest		Rate		Balance			Interest		Rate
Assets
Interest bearing deposits with banks	$	2,261		$	35	6.06		$	119		$	1	3.29
Federal funds sold	2,787			37		5.19		—			—		—
Securities:
Taxable	312,284			3,319		4.25		346,019			3,279		3.79
Non-taxable (tax equivalent)	141,634			1,942		5.48		141,457			1,867		5.28
Total securities	453,918			5,261		4.64		487,476			5,146		4.22
Loans and loans held for sale	1,778,183			32,260		7.10		1,687,194			28,476		6.60
Total interest earning assets	2,237,149			37,593		6.60		2,174,789			33,623		6.07
Cash and due from banks	55,737			—		—		54,269			—		—
Allowance for loan losses	(16,383		)	—		—		(15,343		)	—		—
Other noninterest-bearing assets	124,128			—		—		104,134			—		—
Total assets	$	2,400,631						$	2,317,849
Liabilities and Stockholders’ Equity
Interest bearing transaction accounts	$	264,685		1,153		1.73		$	242,716		561		0.92
Money market accounts	449,141			4,348		3.84		461,297			3,061		2.63
Savings accounts	106,151			209		0.78		118,953			139		0.46
Time deposits	957,249			11,485		4.76		863,707			7,660		3.52
Interest bearing deposits	1,777,226			17,195		3.84		1,686,673			11,421		2.69
Repurchase agreements	43,378			519		4.75		46,213			406		3.49
Other short-term borrowings	100,457			1,567		6.10		121,815			1,388		4.46
Junior subordinated debentures	31,625			617		7.80		31,625			617		7.80
Notes payable	15,260			245		6.28		3,200			40		4.89
Total interest bearing liabilities	1,967,946			20,143		4.06		1,889,526			13,872		2.91
Noninterest bearing deposits	257,691			—		—		259,484			—		—
Accrued interest and other liabilities	18,706			—		—		17,889			—		—
Stockholders’ equity	156,288			—		—		150,950			—		—
Total liabilities and stockholders’ equity	$	2,400,631						$	2,317,849
Net interest income (tax equivalent)				$	17,450						$	19,751
Net interest income (tax equivalent) to total earning assets						3.09	%						3.60	%
Interest bearing liabilities to earnings assets	87.97		%					86.88		%

Notes:Nonaccrual loans are included in the above stated average balances.
Tax equivalent basis is calculated using a marginal tax rate of 35%.

9

ANALYSIS OF AVERAGE BALANCES,
TAX EQUIVALENT INTEREST AND RATES
Years ended December 31, 2006 and 2005
(Dollar amounts in thousands- unaudited)

	2006							2005
	Average							Average
	Balance			Interest		Rate		Balance			Interest		Rate
Assets
Interest bearing deposits with banks	$	968		$	38	0.04	%	$	361		$	3	0.01	%
Federal funds sold	809			42		5.19		216			7		3.24
Securities:
Taxable	319,992			12,837		4.01		338,167			12,064		3.57
Non-taxable (tax equivalent)	140,860			7,709		5.47		139,137			7,400		5.32
Total securities	460,852			20,546		4.46		477,304			19,464		4.08
Loans and loans held for sale	1,756,360			124,327		7.08		1,629,615			103,551		6.35
Total interest earning assets	2,218,989			144,953		6.53		2,107,496			123,025		5.84
Cash and due from banks	53,114			—		—		55,063			—		—
Allowance for loan losses	(16,085		)	—		—		(15,522		)	—		—
Other noninterest-bearing assets	121,751			—		—		92,297			—		—
Total assets	$	2,377,769						$	2,239,334
Liabilities and Stockholders’ Equity
Interest bearing transaction accounts	$	259,666		3,944		1.52		$	243,908		1,824		0.75
Money market accounts	415,610			13,980		3.36		442,837			9,633		2.18
Savings accounts	114,787			647		0.56		123,616			531		0.43
Time deposits	947,577			40,965		4.32		819,341			26,052		3.18
Interest bearing deposits	1,737,640			59,536		3.43		1,629,702			38,040		2.33
Repurchase agreements	46,461			2,030		4.37		45,993			1,303		2.83
Other short-term borrowings	128,861			7,269		5.64		114,560			4,308		3.76
Junior subordinated debentures	31,625			2,467		7.80		31,625			2,448		7.74
Notes payable	7,905			489		6.19		2,910			125		4.30
Total interest bearing liabilities	1,952,492			71,791		3.68		1,824,790			46,224		2.53
Noninterest bearing deposits	254,609			—		—		253,649			—		—
Accrued interest and other liabilities	15,982			—		—		16,052			—		—
Stockholders’ equity	154,686			—		—		144,843			—		—
Total liabilities and stockholders’ equity	$	2,377,769						$	2,239,334
Net interest income (tax equivalent)				$	73,162						$	76,801
Net interest income (tax equivalent) to total earning assets						3.30	%						3.64	%
Interest bearing liabilities to earnings assets	87.99		%					86.59		%

Notes:Nonaccrual loans are included in the above stated average balances.
Tax equivalent basis is calculated using a marginal tax rate of 35%.

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The following unaudited tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent

	Three Months Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
Net Interest Margin
Interest income (GAAP)	$	36,857		$	32,912		$	142,029		$	120,223
Taxable-equivalent adjustment:
Loans	56			57			226			212
Investments	680			654			2,698			2,590
Interest income - FTE	37,593			33,623			144,953			123,025
Interest expense (GAAP)	20,143			13,872			71,791			46,224
Net interest income - FTE	$	17,450		$	19,751		$	73,162		$	76,801
Net interest income - (GAAP)	$	16,714		$	19,040		$	70,238		$	73,999
Average interest earning assets	$	2,237,149		$	2,174,789		$	2,218,989		$	2,107,496
Net interest margin (GAAP)	2.96		%	3.47		%	3.17		%	3.51		%
Net interest margin - FTE	3.09		%	3.60		%	3.30		%	3.64		%
Efficiency ratio
Noninterest expense	$	16,248		$	15,041		$	65,220		$	60,500
Noninterest income	7,392			7,198			28,706			28,149
Net interest income (GAAP)	16,714			19,040			70,238			73,999
Taxable-equivalent adjustment:
Loans	56			57			226			212
Investments	680			654			2,698			2,590
Net interest income - FTE	17,450			19,751			73,162			76,801
Noninterest income
plus net interest income - FTE	24,842			26,949			101,868			104,950
Efficiency ratio	65.41		%	55.81		%	64.02		%	57.65		%

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