Q3 2024 Old Second Bancorp Inc Earnings Call Transcript
Key Points
- Old Second Bancorp Inc (OSBC) reported a strong net income of $23 million or $0.50 per diluted share for the third quarter of 2024.
- The company announced a 20% increase in the common dividend, reflecting strong profitability and a well-capitalized balance sheet.
- The tangible equity ratio increased by 75 basis points to 10.14%, indicating a strengthening balance sheet.
- Asset quality metrics improved with a significant reduction in substandard and criticized loans, down more than 40% from peak levels.
- Net interest margin remained stable at 4.64%, supported by higher rates on variable securities and loans.
- Earnings were negatively impacted by a $2 million provision for credit losses, reducing after-tax earnings by $0.03 per diluted share.
- Interest expense on average interest-bearing liabilities increased by $4.3 million or 38.4%, driven by market pricing on commercial deposits.
- Loan growth was modest, with a $14.5 million increase primarily due to commercial lease and construction portfolios, reflecting cautious customer behavior.
- Non-interest expense increased by $1.4 million from the previous quarter, partly due to acquisition-related costs and incentive accruals.
- The company faces challenges in maintaining loan growth due to market volatility and uncertain economic conditions, impacting future provisioning and reserve trajectory.
Thank you for joining us today for Old Second Bank Corp Incorporated third-quarter 2024 earnings call. On the call today are Jim Eccher, the company's Chairman, President and CEO; Brad Adams, the company's COO and CFO; and Gary Collins, the Vice Chairman of our Board.
I will start with a reminder that Old Second's comments today will contain forward-looking statements about the company's business, strategies and prospects which are based on management's existing expectations in the current economic environment.
These statements are not a guarantee of future performance and results may differ materially from those projected. Management would ask you to refer to the company's SEC filings for a full discussion of the company's risk factors.
The company does not undertake any duty to update such forward-looking statements. On today's call, we will also be discussing certain non-GAAP financial measures. These non-GAAP measures are described and reconciled to their GAAP counterparts in our earnings release, which is available on our website at oldsecond.com on the home page and under
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