Old Second Bancorp(US:OSBC)2025-01-22 21:05Financial Performance - Net income for the fourth quarter of 2024 was $19.1 million, a decrease of $3.8 million from the third quarter of 2024, but an increase of $885,000 from the fourth quarter of 2023[1]. - Adjusted net income for the fourth quarter of 2024 was $20.3 million, down $3.0 million from the previous quarter, and up $1.2 million year-over-year[4]. - Net income for the year ended December 31, 2024, was $85,264 thousand, compared to $91,729 thousand in 2023, a decline of approximately 7.1%[57]. - Basic earnings per share for Q4 2024 was $0.42, up from $0.40 in Q4 2023, representing a growth of 5%[57]. - Basic earnings per share (GAAP) for Q4 2024 was $0.42, compared to $0.55 in Q3 2023, a decline of approximately 23.6%[61]. - Adjusted diluted earnings per share (non-GAAP) for Q4 2024 was $0.44, compared to $0.51 in Q3 2024 and $0.42 in Q4 2023[63]. Income and Revenue - Net interest and dividend income increased to $61.6 million in the fourth quarter of 2024, reflecting a 1.7% increase from the third quarter of 2024 and a 0.6% increase from the fourth quarter of 2023[4]. - Noninterest income rose to $11.6 million, a 9.7% increase from the third quarter of 2024 and a 33.0% increase from the fourth quarter of 2023[4]. - Total noninterest income increased to $11,610 thousand in Q4 2024 from $8,729 thousand in Q4 2023, a rise of approximately 33.5%[57]. - Noninterest income increased by $2.9 million, or 33.0%, in Q4 2024 compared to Q4 2023, primarily due to a rise in residential mortgage banking revenue[21][22]. Expenses - Noninterest expense was $44.3 million, an increase of 12.8% from the third quarter of 2024 and 19.7% from the fourth quarter of 2023[4]. - Total noninterest expense rose to $44,322 thousand in Q4 2024, compared to $37,026 thousand in Q4 2023, an increase of about 19.7%[57]. - The increase in noninterest expense in Q4 2024 was driven by a $937,000 increase in salaries and employee benefits, primarily due to higher year-end accruals[27]. - Legal fees increased by $458,000 in Q4 2024 due to loan-related legal costs, contributing to the overall rise in noninterest expenses[27]. Loans and Credit Quality - The provision for credit losses was $3.5 million in the fourth quarter of 2024, compared to $2.0 million in the third quarter of 2024 and $8.0 million in the fourth quarter of 2023[4]. - Nonperforming loans decreased to $30.3 million at December 31, 2024, down from $52.3 million at September 30, 2024, and $68.8 million at December 31, 2023[9]. - Total loans were $3.98 billion at December 31, 2024, a decrease of $9.7 million from the previous quarter and $61.6 million year-over-year[9]. - The allowance for credit losses on loans was $43.6 million as of December 31, 2024, representing 1.1% of total loans, consistent with the previous quarters[38]. - Nonperforming loans to total loans ratio improved to 0.8% as of December 31, 2024, down from 1.3% at September 30, 2024, and 1.7% at December 31, 2023[33]. Assets and Deposits - Total assets increased to $5,664.7 million as of December 31, 2024, compared to $5,615.1 million in the previous quarter[11]. - Total deposits increased by $303.3 million, or 6.8%, to $4.77 billion as of December 31, 2024, primarily due to the acquisition of FRME's five Illinois branches[45]. - Total deposits increased to $4,768,731 thousand, up from $4,570,746 thousand, reflecting a growth of approximately 4.33%[55]. - The securities available-for-sale portfolio totaled $1.16 billion as of December 31, 2024, a decrease of $29.2 million from Q3 2024 and $31.1 million from Q4 2023[31]. Tax and Efficiency - The effective tax rate for the fourth quarter of 2024 was 24.68%, compared to 23.11% in the third quarter of 2024 and 26.92% in the fourth quarter of 2023[7]. - The efficiency ratio (GAAP) for Q4 2024 was 57.12%, up from 53.38% in Q3 2024 and 50.82% in Q4 2023[27]. - Efficiency ratio for Q4 2024 was 57.12%, compared to 53.38% in Q3 2024 and 50.82% in Q4 2023, indicating a decline in operational efficiency[64]. Other Notable Points - The company recorded a $1.7 million OREO valuation reserve expense in Q4 2024 based on valuation write-downs on two OREO properties[28]. - The company declared dividends of $0.06 per share in Q4 2024, up from $0.05 per share in Q4 2023, reflecting a 20% increase[57]. - The company experienced a significant increase in construction classified loans, which rose by 235.7% to $19.4 million from September 30, 2024[35].