Old Second Bancorp, Inc. (NASDAQ:OSBC) Q1 2022 Earnings Conference Call April 28, 2022 11:00 AM ET

Company Participants

Jim Eccher - Chief Executive Officer

Brad Adams - Chief Financial Officer

Gary Collins - Vice Chairman

Conference Call Participants

Chris McGratty - KBW

Nathan Race - Piper Sandler

David Long - Raymond James

Manuel Navas - D.A. Davidson

Brian Martin - Janney Montgomery Scott

Operator

Good morning, everyone, and thank you for joining us today for Old Second Bancorp Inc.'s First Quarter 2022 Earnings Call. On the call today is Jim Eccher, the company's CEO; Gary Collins, the Vice Chairman of our Board; and the company's CFO, Brad Adams.

I will start with a reminder that Old Second Bank'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 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 under the Investor Relations tab.

Now I will turn it over to Jim Eccher.

Jim Eccher

Good morning and thank you for joining us. I have several prepared opening remarks and will give my overview of the quarter and then turn it over to Brad for additional detail. I will then conclude with some summary comments and thoughts about the future before we open it up to questions.

Net income was $12 million or $0.27 per diluted share in the first quarter. Net income adjusted to exclude West Suburban acquisition related costs was $16.1 million or $0.36 per share in the first quarter of 2022. On the same adjusted basis, return on assets was 1.05% returns on tangible common equity was 16.97% and the efficiency ratio was 61.38%. Earnings this quarter were favorably impacted by MSR valuation mark-to-market gain of $3 million and of course by the inclusion of a full quarter of legacy West Suburban net interest income.

The first quarter marks our first full quarter with the impact of the West Suburban acquisition in our financial statements. At this point we are far ahead of schedule on cost save realization and outperforming our own expectations on both fee and interest revenue that we had set for ourselves internally. We completed the systems conversions and signed changes this past weekend with no significant customer disruption. Overall, we could not be more pleased with where things stand today from both the balance sheet positioning and operational standpoint.