Discounted Cash Flow (DCF) Analysis Levered

Old Second Bancorp, Inc. (OSBC)

$17.24

-0.39 (-2.21%)

All numbers are in Millions, Currency in USD

Stock DCF: 48.20 | 17.24 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	103.91	121.35	131.55	127.04	133.46	142.40	151.94	162.13	172.99	184.59
Revenue (%)
Operating Cash Flow	37.10	54.91	52.64	25.99	31.05	46.90	50.05	53.40	56.98	60.80
Operating Cash Flow (%)
Capital Expenditure	-1.05	-1.90	-4.38	-3.92	-2.03	-2.99	-3.20	-3.41	-3.64	-3.88
Capital Expenditure (%)
Free Cash Flow	36.05	53.01	48.26	22.07	29.01	43.91	46.85	49.99	53.34	56.92

Weighted Average Cost Of Capital

Share price	$ 17.24
Beta	1.120
Diluted Shares Outstanding	30.74
Cost of Debt
Tax Rate	28.07
After-tax Cost of Debt	4.09%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.922
Total Debt	148.54
Total Equity	529.92
Total Capital	678.46
Debt Weighting	21.89
Equity Weighting	78.11
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	103.91	121.35	131.55	127.04	133.46	142.40	151.94	162.13	172.99	184.59
Operating Cash Flow	37.10	54.91	52.64	25.99	31.05	46.90	50.05	53.40	56.98	60.80
Capital Expenditure	-1.05	-1.90	-4.38	-3.92	-2.03	-2.99	-3.20	-3.41	-3.64	-3.88
Free Cash Flow	36.05	53.01	48.26	22.07	29.01	43.91	46.85	49.99	53.34	56.92
WACC
PV LFCF						40.71	40.27	39.84	39.41	38.99
SUM PV LFCF										199.22

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.86
Free cash flow (t + 1)	58.06
Terminal Value	990.71
Present Value of Terminal Value	678.64

Intrinsic Value

Enterprise Value	877.87
Net Debt	-603.57
Equity Value	1,481.43
Shares Outstanding	30.74
Equity Value Per Share	48.20