Old Second Bancorp Inc (OSBC) Reports Q3 2023 Net Income of $24.3 Million
Old Second Bancorp Inc (NASDAQ:OSBC) reported a net income of $24.3 million for Q3 2023, a decrease from Q2 2023 but an increase from Q3 2022.
The company's net income was impacted by an increase in provision for credit losses and noninterest expense.
OSBC's total assets stood at $5.76 billion as of September 30, 2023.
The company's CEO highlighted strong results and a focus on risk assessment and optimizing the earning asset mix.
Old Second Bancorp Inc (NASDAQ:OSBC) released its earnings report for the third quarter of 2023 on October 18, 2023. The company reported a net income of $24.3 million, or $0.54 per diluted share, a decrease from the net income of $25.6 million, or $0.56 per diluted share, for the second quarter of 2023. However, this represents an increase from the net income of $19.5 million, or $0.43 per diluted share, for the third quarter of 2022.
Financial Performance and Challenges
The decrease in net income in Q3 2023 compared to Q2 2023 was primarily due to an increase of $1.0 million in provision for credit losses, and an increase in noninterest expense of $2.6 million. These were partially offset by a $1.7 million increase in noninterest income and a $1.3 million decrease in provision for income taxes. Compared to Q3 2022, the net income increased by $4.8 million, primarily due to an increase in net interest income of $7.5 million year over year due to rising market interest rates and a $1.5 million decrease in provision for credit losses.
Financial Achievements
Old Second Bancorp Inc's total assets amounted to $5.76 billion as of September 30, 2023. The company's total loans stood at $4.03 billion, while total deposits were $4.61 billion. The company's total equity was $532.6 million. The company's return on average assets (ROAA) was 1.67%, and the return on average equity (ROAE) was 18.21%.
CEO Commentary
Chairman, President and Chief Executive Officer Jim Eccher said Old Second reported strong results in the third quarter as we earned $24.3 million in net income, ROAA of 1.67% and ROATCE of 22.80%. Our focus over the near term will continue to be on assessing risks both within the loan portfolio and more broadly and optimizing the earning asset mix while reducing our overall sensitivity to interest rates. We believe the ability to deliver exceptional returns and compound book value, at a time when marginal spreads in deposit and lending markets are tight, illustrates the quality of the franchise we have built. With a strong balance sheet, low-cost granular funding and continuing excellent overall profitability, Old Second is well positioned for the remainder of 2023 and beyond.
Looking Forward
Old Second Bancorp Inc (NASDAQ:OSBC) remains focused on assessing risks within the loan portfolio and optimizing the earning asset mix. The company is well-positioned for the remainder of 2023 and beyond, with a strong balance sheet, low-cost granular funding, and continuing excellent overall profitability.
This article first appeared on GuruFocus.
