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Old Second Bancorp Inc (OSBC) SEC Filing 10-Q Quarterly report for the period ending Tuesday, June 30, 2020

Old Second Bancorp Inc

CIK: 357173 Ticker: OSBC

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(NASDAQ:OSBC)

Exhibit 99.1

Contact:

Bradley S. Adams

For Immediate Release

Chief Financial Officer

July 22, 2020

(630) 906-5484

Old Second Reports Second Quarter Net Income of $9.2 million, or $0.31 per Diluted Share

AURORA, IL, July 22, 2020 – Old Second Bancorp, Inc. (the “Company,” “we,” “us,” and “our”) (NASDAQ: OSBC), the parent company of Old Second National Bank (the “Bank”), today announced financial results for the second quarter of 2020.  Our net income was $9.2 million, or $0.31 per diluted share, for the second quarter of 2020, compared to net income of $275,000, or $0.01 per diluted share, for the first quarter of 2020, and net income of $9.3 million, or $0.31 per diluted share, for the second quarter of 2019. Net income for the second quarter of 2020 includes a ($0.05) per diluted share impact of additional provisions for credit losses for loans and unfunded commitments due to changes in economic conditions and market interest rates related to the COVID-19 pandemic.

Operating Results

Second quarter 2020 net income was $9.2 million, reflecting an increase in earnings of $9.0 million from the first quarter of 2020, and a decrease in earnings of $40,000 from the second quarter of 2019.  We recorded a provision for credit losses of $2.1 million in the second quarter of 2020, compared to $8.0 million in the first quarter of 2020, both due to the assessment of potential credit losses related to the COVID-19 pandemic under the new current expected credit losses accounting standard (“CECL”).  Also contributing to the increase in net income in the second quarter of 2020 compared to the prior quarter was growth in net gain on sales of mortgage loans of $2.4 million due to the reduction of interest rates, a reduction of $1.7 million of mark to market losses on MSRs, and the recognition of $635,000 in deferred issuance costs due to the redemption of our 7.80% cumulative trust preferred securities issued by Old Second Capital Trust I and related junior subordinated debentures, resulting in $32.6 million of debt retirement, in the first quarter of 2020.
Net interest and dividend income was $22.7 million for the second quarter of 2020, a decrease of $49,000, or 0.2%, from the first quarter of 2020, and a decrease of $2.0 million, or 8.3%, from the second quarter of 2019.  Net interest and dividend income in the year over year period was negatively impacted by interest rate reductions related to COVID-19, which more than offset increases in interest income due to loan growth in the same period.  The recognition of $635,000 in deferred issuance costs due to the redemption of trust preferred securities issued by Old Second Capital Trust I and related junior subordinated debentures also reduced net interest and dividend income in the first quarter of 2020.
Provision for credit losses was $2.1 million for the second quarter of 2020, consisting of $1.4 million related to loans and $734,000 related to unfunded commitments, compared to a provision for credit losses of $8.0 million for the first quarter of 2020, consisting of $5.5 million related to loans and $2.5 million related to unfunded commitments, and a provision for loan losses of $450,000 in the second quarter of 2019.  We adopted the new CECL accounting standard effective January 1, 2020, which measures the allowance based on management’s best estimate of lifetime expected credit losses inherent in our lending activities, resulting in a $5.9 million allowance related to loans and a $1.7 million allowance related to unfunded commitments in the first quarter of 2020.  Provision expense in 2020 was impacted by both the adoption of the new CECL methodology and the expected impact, as of June 30, 2020, of the COVID-19 pandemic on future losses.
Noninterest income was $10.7 million for the second quarter of 2020, an increase of $4.4 million, or 69.2%, compared to $6.3 million for the first quarter of 2020, and an increase of $2.6 million, or 31.3%, compared to $8.1 million for the second quarter of 2019.  The increase compared to the linked quarter and year over year quarter was primarily due to growth in net gains on sales of mortgage loans, due to an increase in volumes of originations and renewals in the lower interest rate environment.  In addition, mark to market losses on MSRs

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The following information was filed by Old Second Bancorp Inc (OSBC) on Wednesday, July 22, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Old Second Bancorp Inc's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

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Consolidated Balance Sheets
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Junior Subordinated Debentures
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Loans And Allowance For Credit Losses On Loans
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Loans And Allowance For Credit Losses On Loans - Aging Analysis (Details)
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Loans And Allowance For Credit Losses On Loans - Credit Quality (Details)
Loans And Allowance For Credit Losses On Loans - Major Classifications (Details)
Loans And Allowance For Credit Losses On Loans - Major Classifications - Loan Concentrations (Details)
Loans And Allowance For Credit Losses On Loans - Nonaccruals (Details)
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Old Second Bancorp Inc provided additional information to their SEC Filing as exhibits

Ticker: OSBC
CIK: 357173
Form Type: 10-Q Quarterly Report
Accession Number: 0000357173-20-000050
Submitted to the SEC: Fri Aug 07 2020 8:41:43 PM EST
Accepted by the SEC: Mon Aug 10 2020
Period: Tuesday, June 30, 2020
Industry: State Commercial Banks

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