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Jun 30, 2022
Old Second Q2 2022 Earnings Report
Reported net income of $12.2 million, or $0.27 per diluted share.
Key Takeaways
Old Second Bancorp, Inc. reported a net income of $12.2 million, or $0.27 per diluted share, for the second quarter of 2022. The increase in net income was primarily due to the increase in net interest and dividend income.
Second quarter 2022 net income was $12.2 million, reflecting an increase in earnings of $227,000 from the first quarter of 2022, and an increase of $3.4 million from the second quarter of 2021.
Net interest and dividend income was $45.3 million for the second quarter of 2022, an increase of $4.0 million, or 9.8%, from the first quarter of 2022, and an increase of $23.3 million, or 106.2%, from the second quarter of 2021.
Noninterest income was $9.2 million for the second quarter of 2022, a decrease of $4.3 million, or 31.6%, compared to $13.5 million for the first quarter of 2022, and an increase of $1.3 million, or 16.3%, compared to $7.9 million for the second quarter of 2021.
Noninterest expense was $37.2 million for the second quarter of 2022, a decrease of $1.0 million, or 2.6% compared to $38.3 million for the first quarter of 2022, and an increase of $15.8 million, or 74.1%, compared to $21.4 million for the second quarter of 2021.
Old Second
Old Second
Old Second Revenue by Segment
Revenue by Segment
Wealth management Revenue
CapyFin.comService charges on deposits Revenue
CapyFin.comCard related income Revenue
CapyFin.comOther income Revenue
CapyFin.com Forward Guidance
Old Second remains optimistic on loan growth trends in the near term. Loan yields should begin to expand more rapidly as rate increases take hold within the portfolio, which offers the potential for expanding margins and strong earnings growth in the near term.
Positive Outlook
- Strong loan growth
- Improving core operating leverage
- Steady asset quality
- Loan originations remained strong across all commercial segments and drove $223 million in linked quarter loan growth with current lending pipelines remaining robust.
- Net interest margin trends have begun to advance with the reported taxable equivalent net interest margin increasing by 30 basis points linked quarter to 3.18%.
Challenges Ahead
- Disappointing quarter from mortgage banking due to a combination of higher interest rates, ineffective hedging and fallout within the locked pipeline.
- Mortgage banking expenses are expected to decline meaningfully beginning next quarter and revenues are also expected to return to a more normalized run rate.
- Average interest earning assets decreased $115.0 million to $5.75 billion for the second quarter of 2022, compared to the first quarter of 2022, due to decreases in interest earning deposits with financial institutions, securities, and loans held-for-sale.
- The decrease in deposits since the first quarter of 2022 are attributable to customer usage of funds, and Old Second paid down $7.0 million of notes payable in the second quarter of 2022.
- Increases in classified loans since June 30, 2021, were driven by our acquisition of West Suburban and the resultant increase in total loans during the fourth quarter of 2021.