Old Second Bancorp, Inc. (NASDAQ:OSBC) Q3 2024 Earnings Conference Call October 17, 2024 10:00 AM ET

Corporate Participants

Jim Eccher - Chairman, President and Chief Executive Officer
Brad Adams - Chief Operating Officer and Chief Financial Officer

Conference Call Participants

Terry McEvoy - Stephens
Chris McGratty - KBW
Nathan Race - Piper Sandler
David Long - Raymond James
Martin Friedman - FJ Capital
Jeff Rulis - D.A. Davidson
Brian Martin - Janney

Operator

Good morning, everyone, and thank you for joining us today for Old Second Bancorp Incorporated's 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 the investor relations tab.

Now, I will turn it over to Jim Eccher.

Jim Eccher

Good morning, everyone, and thank you for joining us. I have several prepared opening remarks and will give you my overview of the quarter and then turn it over to Brad for additional details. I will then conclude with certain summary comments and thoughts about the future before we open it up to our Q&A.

Net income was 23 million or $0.50 per diluted share in the third quarter of 2024 and return on assets is 1.63%. Third quarter 2024 return on average tangible common equity was 17.14%, and the tax equivalent efficiency ratio was 53.38%. Third quarter 2024 earnings were negatively impacted by $2 million of provision for credit losses in the absence of significant loan growth, which reduced after-tax earnings by $0.03 per diluted share.

However, despite this profitability, Old Second remains exceptionally strong, and balance sheet strengthening continues with our tangible equity ratio increasing by 75 basis points linked quarter to 10.14%. Common equity Tier-1 increased to 12.86% in the third quarter, and we feel very good both about profitability and our balance sheet positioning at this point. We are pleased to announce a 20% increase in the common dividend this quarter, reflective of continuing strong profitability and a well-capitalized balance sheet.