Shares of Old Second Bancorp have experienced a decline following the company’s announcement of a drop in fourth quarter profit. The decline can be attributed to a higher provision for credit losses and increased expenses.
Stock Performance
As of 12:02 p.m. ET, the stock is down 8.9% to $14.01. This marks the largest percentage decrease since April 15, 2020, when the shares fell by 9.2%.
Financial Results
Old Second Bancorp, the parent company of Old Second National Bank, reported a net profit of $18.2 million, or 40 cents a share, for the fourth quarter. This is compared to $24.3 million, or 54 cents a share, for the same period in the previous year.
The company recorded a net provision of credit losses of $8 million in the fourth quarter, an increase from $3 million in the prior quarter and $1.5 million a year ago.
Balance-Sheet Strength
Old Second Bancorp ended the year with a common equity Tier 1 ratio of 12.32%, which reflects a measure of balance-sheet strength. This is slightly lower than the ratio of 12.49% reported in the prior quarter.
These financial results indicate areas of concern for Old Second Bancorp’s performance in the fourth quarter.