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Old Second Bancorp Inc (OSBC) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 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

January 27, 2021

(630) 906-5484

Old Second Reports Fourth Quarter Net Income of $8.0 million, or $0.27 per Diluted Share

AURORA, IL, January 27, 2021 – 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 fourth quarter of 2020.  Our net income was $8.0 million, or $0.27 per diluted share, for the fourth quarter of 2020, compared to net income of $10.3 million, or $0.34 per diluted share, for the third quarter of 2020, and net income of $9.5 million, or $0.31 per diluted share, for the fourth quarter of 2019. Net income for the fourth quarter of 2020 reflects a decrease in noninterest income year over year primarily due to an increase in mark to market losses on mortgage servicing rights (“MSRs”), a reduction in service charges on deposits stemming from a decline in customer spending during the COVID-19 pandemic, a decrease in the death benefit realized on BOLI, as a death claim of $872,000 was received in the prior year period which was not repeated in the current period, and an increase in noninterest expense of $1.4 million, primarily driven by growth in salaries and employee benefits expense. Partially offsetting this reduction to fourth quarter net income year over year was an increase in net interest income due to loan fees recorded on forgiven SBA Paycheck Protection Program (“PPP”) loans and a decrease in interest expense on deposits due to market interest rate reductions. In addition, growth in mortgage banking income due to an increase in mortgage originations and refinances stemming from the low interest rate environment contributed a positive $1.0 million pretax, or $0.03 per diluted share.

Operating Results

Fourth quarter 2020 net income was $8.0 million, reflecting a decrease in earnings of $2.2 million from the third quarter of 2020, and a decrease in earnings of $1.5 million from the fourth quarter of 2019.  
Net interest and dividend income was $23.9 million for the fourth quarter of 2020, an increase of $1.4 million, or 6.1%, from the third quarter of 2020, and an increase of $688,000, or 3.0%, from fourth quarter of 2019.  Net interest and dividend income in the year over year period was favorably impacted by loan fees earned on forgiven PPP loans during the fourth quarter of 2020, as well as a reduction in interest expense due to a decrease in market interest rates.  We originated 746 PPP loans totaling $136.7 million in 2020, and as of December 31, 2020, $74.1 million on 428 PPP loans remains outstanding.  Net loan fee income recorded year to date on PPP loans totaled $2.2 million, and approximately $420,000 of net PPP loan fees remain unearned as of December 31, 2020.
We recorded no provision for credit losses in the fourth quarter of 2020, compared to $300,000 in the third quarter of 2020, both under the current expected credit losses accounting standard (“CECL”), which was adopted on January 1, 2020, and considers potential credit losses related to the ongoing COVID-19 pandemic, compared to $150,000 in the fourth quarter of 2019, under the incurred loss model.  Allowance for credit losses on loans activity in the fourth quarter of 2020 consisted of a reclassification from the allowance on unfunded commitments of $993,000, as well as $55,000 of net charge-off activity for the quarter.  
Noninterest income was $8.8 million for the fourth quarter of 2020, a decrease of $2.9 million, or 24.8%, compared to $11.7 million for the third quarter of 2020, and a decrease of $457,000, or 4.9%, compared to $9.2 million for the fourth quarter of 2019.  The decrease from the linked quarter was primarily driven by a $3.1 million decline in residential mortgage banking revenue, attributable to a $1.9 million decrease in net gain on sales of mortgage loans and a $1.1 million increase in mark to market losses on MSRs in the fourth quarter of 2020, compared to the prior quarter.  The decrease in noninterest income in the fourth quarter of 2020, compared to the fourth quarter of 2019, was primarily due to a $1.5 million increase in mark to market losses on MSRs, a $530,000 reduction in service charges on deposits, and an $872,000 reduction in death benefit realized on

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The following information was filed by Old Second Bancorp Inc (OSBC) on Wednesday, January 27, 2021 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-K Annual 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-K Annual Report:

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Changes In Stockholders' Equity
Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical)
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Income
Borrowings
Borrowings (Tables)
Borrowings - Additional Information (Details)
Borrowings - Maturities And Weighted Average Rates (Details)
Borrowings - Summary (Details)
Cash And Due From Banks
Cash And Due From Banks (Details)
Commitments
Commitments (Tables)
Commitments - Lease Commitments And Legal Proceedings (Details)
Commitments - Summary Of Financial Instrument Commitments (Details)
Deposits
Deposits (Tables)
Deposits - Classifications Of Deposits (Details)
Deposits - Scheduled Maturities (Details)
Derivatives, Hedging Activities And Financial Instruments With Off-Balance Sheet Risk
Derivatives, Hedging Activities And Financial Instruments With Off-Balance Sheet Risk (Tables)
Derivatives, Hedging Activities And Financial Instruments With Off-Balance Sheet Risk - Commitments (Details)
Derivatives, Hedging Activities And Financial Instruments With Off-Balance Sheet Risk - Effect Of Fair Value (Details)
Derivatives, Hedging Activities And Financial Instruments With Off-Balance Sheet Risk - Fair Value Of Derivatives (Details)
Earnings Per Share
Earnings Per Share (Tables)
Earnings Per Share - Reconciliation (Details)
Employee Benefit Plans
Employee Benefit Plans (Details)
Equity Compensation Plans
Equity Compensation Plans (Tables)
Equity Compensation Plans - Options (Details)
Equity Compensation Plans - Restricted Stock And Rsus (Details)
Equity Compensation Plans - Summary Of Stock Option Activity (Details)
Fair Value Measurements
Fair Value Measurements (Details)
Fair Value Measurements (Tables)
Fair Value Measurements - Changes In Level 3 (Details)
Fair Value Measurements - Nonrecurring (Details)
Fair Value Measurements - Quantitative And Qualitative Information (Details)
Fair Value Measurements - Recurring (Details)
Fair Values Of Financial Instruments
Fair Values Of Financial Instruments (Details)
Fair Values Of Financial Instruments (Tables)
Income Taxes
Income Taxes (Tables)
Income Taxes - Carryforwards (Details)
Income Taxes - Components (Details)
Income Taxes - Components Of Deferred Income Tax Provision (Details)
Junior Subordinated Debentures
Junior Subordinated Debentures - Issuance (Details)
Loans And Allowance For Credit Losses On Loans
Loans And Allowance For Credit Losses On Loans (Details)
Loans And Allowance For Credit Losses On Loans (Tables)
Loans And Allowance For Credit Losses On Loans - Aging Analysis (Details)
Loans And Allowance For Credit Losses On Loans - Collateral Dependent Loans (Details)
Loans And Allowance For Credit Losses On Loans - Credit Quality (Details)
Loans And Allowance For Credit Losses On Loans - Loans In Active Deferral (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)
Loans And Allowance For Credit Losses On Loans - Related Parties (Details)
Loans And Allowance For Credit Losses On Loans - Tdr (Details)
Mortgage Banking Derivatives
Mortgage Banking Derivatives (Details)
Mortgage Banking Derivatives (Tables)
Other Real Estate Owned
Other Real Estate Owned (Details)
Other Real Estate Owned (Tables)
Parent Company Condensed Financial Information
Parent Company Condensed Financial Information (Tables)
Parent Company Condensed Financial Information - Condensed Balance Sheets (Details)
Parent Company Condensed Financial Information - Condensed Statements Of Income (Details)
Parent Company Condensed Financial Information -Condensed Statements Of Cash Flows (Details)
Preferred Stock
Preferred Stock (Details)
Premises And Equipment
Premises And Equipment (Details)
Premises And Equipment (Tables)
Regulatory &Amp; Capital Matters
Regulatory &Amp; Capital Matters (Details)
Regulatory &Amp; Capital Matters (Tables)
Regulatory &Amp; Capital Matters - Capital Levels And Industry Defined Regulatory Minimums (Details)
Regulatory &Amp; Capital Matters - Dividend Restrictions And Deferrals (Details)
Securities
Securities (Tables)
Securities - Amortized Cost And Fair Value (Details)
Securities - Contractural Maturities (Details)
Securities - Investment Portfolio (Details)
Securities - Realized Gain (Loss) (Details)
Securities - Unrealized Loss Positions (Details)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (Details)
Summary Of Significant Accounting Policies (Policies)
Summary Of Significant Accounting Policies - Accounting Pronouncement (Details)
Summary Of Significant Accounting Policies - Premises And Equipment (Details)
Ticker: OSBC
CIK: 357173
Form Type: 10-K Annual Report
Accession Number: 0000357173-21-000014
Submitted to the SEC: Mon Mar 08 2021 3:50:10 PM EST
Accepted by the SEC: Mon Mar 08 2021
Period: Thursday, December 31, 2020
Industry: State Commercial Banks

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