Old Second Bancorp, Inc. (NASDAQ:OSBC) Q4 2022 Earnings Conference Call January 26, 2023 11:00 AM ET
Company Representatives
Jim Eccher - Chief Executive Officer
Brad Adams - Chief Financial Officer
Gary Collins - Vice Chairman of the Board
Conference Call Participants
Jeff Rulis - D.A. Davidson
Chris McGratty - KBW
David Long - Raymond James
Operator
Good morning, everyone, and thank you for joining us today for Old Second Bancorp, Inc.'s Fourth Quarter 2022 Earnings Call. On the call today is Jim Eccher, the company's CEO; Brad Adams, the Company’s CFO; and Gary Collins the Vice Chairman of our Board.
I will start with a reminder that Old Second's comments today may 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.
On today's call, we will 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 homepage and under the Investor Relations tab.
Now I will turn it over to Mr. Jim Eccher.
Jim Eccher
Good morning and thank you for joining us today. Same format as prior quarters. I have several prepared opening remarks. Give my overview of the quarter and then I’ll turn it over to Brad for more additional details. We’ll then conclude with some summary comments and thoughts about the future and then open up for some questions.
Net income was $23.6 million or $0.52 per diluted share in the fourth quarter. Net income adjusted to exclude West Suburban acquisition related costs, less net gains for brand sales was $24.1 million or $0.53 per diluted share in the fourth quarter.
On the same adjusted basis, return on assets was 1.61%. Return on tangible equity was 28.33% and the tax equivalent efficiency ratio was 51.29%. Fourth quarter earnings were also negatively impacted by a combined $1.3 million in pre-tax security losses and fair value adjustments for mortgage servicing rights.
In aggregate, obviously an exceptionally strong quarter with more than 20% earnings growth linked quarter on annualized. Our financials continue to be favorably impacted by the increase in market interest rates with a 15% increase in the net interest income or $8.5 million over the third quarter of 2022 due to relatively stable funding costs and increasing asset yields across the balance sheet.