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Old Second Bancorp, Inc. (NASDAQ: OSBC) is a bank holding company headquartered in Aurora, Illinois, with a storied history dating back to 1871. Through its principal subsidiary, Old Second National Bank, the company offers a comprehensive suite of consumer and commercial banking services tailored to meet the diverse needs of individuals, businesses, and institutions. Operating across multiple counties in the Chicago metropolitan area, Old Second is deeply rooted in its communities, blending modern banking solutions with a steadfast commitment to local economic growth.
Core Business Areas
Old Second Bancorp operates across several key business segments, providing:
- Retail Banking: Services include checking and savings accounts, money market accounts, certificates of deposit, and individual retirement accounts.
- Lending Solutions: The company offers a wide array of lending products, including commercial loans, industrial loans, real estate financing, agricultural loans, installment loans, and lines of credit. Specialized lending services, such as sponsor finance, further diversify its portfolio.
- Wealth Management and Trust Services: Old Second provides estate planning, investment management, and fiduciary services, catering to high-net-worth individuals and institutional clients.
- Additional Services: The bank also offers safe deposit boxes, treasury management, merchant services, and remote deposit capture, alongside digital banking solutions for personal and business use.
Market Position and Competitive Edge
Old Second Bancorp is strategically positioned as a leading community-focused institution in northern Illinois. Its competitive advantages include:
- Community Commitment: With a history spanning over 150 years, the company has built strong, lasting relationships with its customers and communities.
- Diversified Revenue Streams: The bank generates income through interest, fees, and other non-interest earnings, ensuring financial stability across economic cycles.
- Resilient Balance Sheet: Fiscal discipline and a strong credit rating underscore its ability to navigate challenging economic conditions.
- Innovative Financing Solutions: Through its O2 Sponsor Finance division, Old Second supports private equity sponsors and family offices, showcasing its expertise in cash flow-based lending for lower middle-market businesses.
Industry Context and Challenges
Operating within the highly competitive financial services sector, Old Second faces challenges such as fluctuating interest rates, regulatory compliance, and evolving customer expectations. However, its robust capital position, diversified offerings, and local expertise enable it to adapt and thrive amidst these challenges.
Commitment to Excellence
Old Second Bancorp's enduring legacy is a testament to its unwavering focus on financial responsibility, community engagement, and customer-centric innovation. By blending traditional banking values with modern technologies, the company continues to deliver exceptional value to its stakeholders.
Old Second Bancorp (NASDAQ: OSBC) reported first quarter 2023 net income of $23.6 million, or $0.52 per diluted share, unchanged from the previous quarter but a notable increase from $12.0 million, or $0.27 per diluted share, a year earlier.
Adjusted net income was $23.4 million, a slight decrease from the prior quarter. The increase in annual net income is attributed to a $22.9 million rise in net interest and dividend income, despite a $1.6 million drop in noninterest income. The company declared a cash dividend of $0.05 per share, payable on May 8, 2023. Key metrics include a net provision for credit losses of $3.5 million and nonperforming loans totaling 1.6% of total loans.
O2 Sponsor Finance, part of Old Second National Bank, announced on April 13, 2023, the provision of senior secured credit facilities to facilitate Hastings Equity Partners' acquisition of TERRA Staffing Group. TERRA, a staffing services provider based in Everett, Washington, operates 18 offices across five states, specializing in industrial, administrative, and technical staffing. In 2022, TERRA received the Best of Staffing award for client and talent satisfaction. The financial backing includes subordinated debt financing and equity co-investment from NorthCoast Mezzanine. O2 Sponsor Finance focuses on supporting lower middle-market businesses and enhancing operations through strategic partnerships.
Old Second Bancorp announced that its division O2 Sponsor Finance arranged over $44 million in senior secured credit facilities to support Soundcore Capital Partners in their acquisitions of ACI Asphalt & Concrete, LLC and ACS Asphalt Concrete Solutions. This financing positions the combined entity as a market leader in the Minneapolis area for asphalt and concrete services. The acquisitions are part of Soundcore’s growth strategy, with ACI and ACS servicing large commercial clients and homeowner associations. Co-lender financing was provided by Old National Bank, with Northstar Capital offering subordinated debt.
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