8-K

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United States

Securities And Exchange Commission Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 16, 2024

(Exact name of registrant as specified in its charter)

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Delaware	000-10537	36-3143493
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

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37 South River Street Aurora , Illinois **** 60507 (Address of principal executive offices) (Zip code)

(630) 892-0202(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ **** Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	OSBC	The Nasdaq Stock Market
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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Item 2.02 Results of Operations and Financial Condition

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On October 16, 2024, Old Second Bancorp, Inc. (the “Company’s”) issued a press release announcing its financial results for the third quarter ended September 30, 2024, along with certain other financial information. Copies of the Company’s press release and loan portfolio disclosures are attached as Exhibits 99.1 and 99.2, respectively.

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Item 9.01 Financial Statements and Exhibits

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Exhibit No.	​	Description
99.1	​	Press Release of Old Second Bancorp, Inc. dated October 16, 2024
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99.2	​	Loan Portfolio Disclosures for Old Second Bancorp, Inc. dated September 30, 2024
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104	​	Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

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2

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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​	OLD SECOND BANCORP, INC.
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Dated: October 16, 2024	By:	/s/ Bradley S. Adams
​	​	Bradley S. Adams
​	​	Executive Vice President,
​	​	Chief Operating Officer and
​	​	Chief Financial Officer

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Old Second Bancorp, Inc

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(NASDAQ:OSBC)		Exhibit 99.1
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Contact:	Bradley S. Adams	For Immediate Release
​	Chief Financial Officer	October 16, 2024
​	(630) 906-5484	​

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Old Second Bancorp, Inc. Reports Third Quarter 2024 Net Income of $23.0 Million,

or $0.50 per Diluted Share

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AURORA, IL, October 16, 2024 – Old Second Bancorp, Inc. (the “Company,” “Old Second,” “we,” “us,” and “our”) (NASDAQ: OSBC), the parent company of Old Second National Bank (the “Bank”), today announced financial results for the third quarter of 2024.  Our net income was $23.0 million, or $0.50 per diluted share, for the third quarter of 2024, compared to net income of $21.9 million, or $0.48 per diluted share, for the second quarter of 2024, and net income of $24.3 million, or $0.54 per diluted share, for the third quarter of 2023. Adjusted net income, a non-GAAP financial measure that excludes certain nonrecurring items, as applicable, was $23.3 million, or $0.51 per diluted share, for the third quarter of 2024, compared to $21.0 million, or $0.46 per diluted share, for the second quarter of 2024, and $24.8 million, or $0.55 per share, for the third quarter of 2023. Adjusting items impacting the third quarter of 2024 included $471,000 of transaction-related expenses due to the pending purchase of five branches from First Merchants Bank (“FRME”), which is expected to close near year-end 2024. The adjusting item impacting the second quarter of 2024 was an $893,000 death benefit related to BOLI; the adjusting item impacting the third quarter of 2023 results included $629,000 of deconversion and liquidation costs from the 2022 sale of our Visa credit card portfolio.  See the discussion entitled “Non-GAAP Presentations” below and the tables beginning on page 17 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

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Net income increased $1.1 million in the third quarter of 2024 compared to the second quarter of 2024. The increase was primarily due to a $1.8 million decrease in provision for credit losses. Credit quality stabilized this quarter and we recorded net recoveries of $155,000, compared to net charge-offs of $5.8 million in the second quarter of 2024, and $6.6 million in the prior year like quarter. In addition, net interest and dividend income increased $888,000 in the third quarter of 2024, compared to the prior linked quarter, and a $399,000 decrease in provision for income taxes was recorded, partially offset by a $546,000 decrease in noninterest income and a $1.4 million increase in noninterest expense. Net income decreased $1.4 million in the third quarter of 2024 compared to the third quarter of 2023, primarily due to a decrease in net interest income of $2.5 million year over year driven by a $4.3 million increase to interest expense as a result of higher interest rates offered on deposits, partially offset by a $1.8 million increase in interest and dividend income.

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Operating Results

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●	Third quarter 2024 net income was $23.0 million, reflecting a $1.1 million increase from the second quarter of 2024, and a decrease of $1.4 million from the third quarter of 2023.  Adjusted net income, as defined above, was $23.3 million for the third quarter of 2024, an increase of $2.3 million from adjusted net income for the second quarter of 2024, and a decrease of $1.5 million from adjusted net income for the third quarter of 2023.
●	Net interest and dividend income was $60.6 million for the third quarter of 2024, reflecting an increase of $888,000, or 1.5%, from the second quarter of 2024, and a decrease of $2.5 million, or 3.9%, from the third quarter of 2023.
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●	We recorded a net provision for credit losses of $2.0 million in the third quarter of 2024 compared to a net provision for credit losses of $3.8 million in the second quarter of 2024, and a net provision for credit losses of $3.0 million in the third quarter of 2023.
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●	Noninterest income was $10.6 million for the third quarter of 2024, a decrease of $546,000, or 4.9%, compared to $11.1 million for the second quarter of 2024, and an increase of $704,000, or 7.1%, compared to $9.9 million for the third quarter of 2023.  A $12,000 adjustment to the death benefit on a BOLI contract was recorded in the third quarter of 2024; the majority of these proceeds were received in the second quarter of 2024. Also, a $1,000 loss on the call of a security was recorded in the third quarter of 2024, compared to $924,000 of securities losses, net, recorded in the third quarter of 2023.
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1

●	Noninterest expense was $39.3 million for the third quarter of 2024, an increase of $1.4 million, or 3.8%, compared to $37.9 million for the second quarter of 2024, and an increase of $1.9 million, or 5.0%, compared to $37.4 million for the third quarter of 2023.
●	We had a provision for income tax of $6.9 million for the third quarter of 2024, compared to a provision for income tax of $7.3 million for the second quarter of 2024 and a provision of $8.1 million for the third quarter of 2023. The effective tax rate for each of the periods presented was 23.1%, 25.0%, and 25.1%, respectively. The reduction in the effective tax rate in the third quarter of 2024 reflects the new state ruling regarding tax rate apportionment factors related to income generated from securities or loans originated in other states.
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●	On October 15, 2024, our Board of Directors declared a cash dividend of $0.06 per share of common stock, payable on November 4, 2024, to stockholders of record as of October 25, 2024.
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Financial Highlights

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​	​	​	​	​	​	​	​	​	​	​
​	​	Quarters Ended								​
(Dollars in thousands)	​	September 30,		​	June 30,		​	September 30,		​
​	​	2024		​	2024		​	2023		​
Balance sheet summary	​	​	​	​	​	​	​	​	​	​
Total assets	​	$	5,671,760	​	$	5,662,700	​	$	5,758,156	​
Total securities available-for-sale	​	​	1,190,854	​	​	1,173,661	​	​	1,229,618	​
Total loans	​	​	3,991,078	​	​	3,976,595	​	​	4,029,543	​
Total deposits	​	​	4,465,424	​	​	4,521,728	​	​	4,614,320	​
Total liabilities	​	​	5,010,370	​	​	5,043,365	​	​	5,225,598	​
Total equity	​	​	661,390	​	​	619,335	​	​	532,558	​
​	​	​	​	​	​	​	​	​	​	​
Total tangible assets	​	$	5,575,789	​	$	5,566,159	​	$	5,659,858	​
Total tangible equity	​	​	565,419	​	​	522,794	​	​	434,260	​
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Income statement summary	​	​	​	​	​	​	​	​	​	​
Net interest income	​	$	60,578	​	$	59,690	​	$	63,030	​
Provision for credit losses	​	​	2,000	​	​	3,750	​	​	3,000	​
Noninterest income	​	​	10,581	​	​	11,127	​	​	9,877	​
Noninterest expense	​	​	39,308	​	​	37,877	​	​	37,423	​
Net income	​	​	22,951	​	​	21,891	​	​	24,335	​
Effective tax rate	​	​	23.11	%	​	25.01	%	​	25.09	%
​	​	​	​	​	​	​	​	​	​	​
Profitability ratios	​	​	​	​	​	​	​	​	​	​
Return on average assets (ROAA)	​	​	1.63	%	​	1.57	%	​	1.67	%
Return on average equity (ROAE)	​	​	14.29	​	​	14.55	​	​	18.21	​
Net interest margin (tax-equivalent)	​	​	4.64	​	​	4.63	​	​	4.66	​
Efficiency ratio	​	​	53.38	​	​	53.29	​	​	50.08	​
Return on average tangible common equity (ROATCE) ^1^	​	​	17.14	​	​	17.66	​	​	22.80	​
Tangible common equity to tangible assets (TCE/TA)	​	​	10.14	​	​	9.39	​	​	7.67	​
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Per share data	​	​	​	​	​	​	​	​	​	​
Diluted earnings per share	​	$	0.50	​	$	0.48	​	$	0.54	​
Tangible book value per share	​	​	12.61	​	​	11.66	​	​	9.72	​
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Company capital ratios^2^	​	​	​	​	​	​	​	​	​	​
Common equity tier 1 capital ratio	​	​	12.86	%	​	12.41	%	​	11.00	%
Tier 1 risk-based capital ratio	​	​	13.39	​	​	12.94	​	​	11.52	​
Total risk-based capital ratio	​	​	15.62	​	​	15.12	​	​	13.84	​
Tier 1 leverage ratio	​	​	11.38	​	​	10.96	​	​	9.62	​
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Bank capital ratios ^2, 3^	​	​	​	​	​	​	​	​	​	​
Common equity tier 1 capital ratio	​	​	13.49	%	​	13.50	%	​	12.49	%
Tier 1 risk-based capital ratio	​	​	13.49	​	​	13.50	​	​	12.49	​
Total risk-based capital ratio	​	​	14.45	​	​	14.42	​	​	13.57	​
Tier 1 leverage ratio	​	​	11.46	​	​	11.43	​	​	10.43	​

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^1^^^See the discussion entitled “Non-GAAP Presentations” below and the table on page 18 that provides a reconciliation of this non-GAAP financial measure to the most comparable GAAP equivalent.

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^2^^^Both the Company and the Bank ratios are inclusive of a capital conservation buffer of 2.50%, and both are subject to the minimum capital adequacy guidelines of 7.00%, 8.50%, 10.50%, and 4.00% for the Common equity tier 1, Tier 1 risk-based, Total risk-based and Tier 1 leverage ratios, respectively.

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^3^The prompt corrective action provisions are applicable only at the Bank level, and are 6.50%, 8.00%, 10.00%, and 5.00% for the Common equity tier 1, Tier 1 risk-based, Total risk-based and Tier 1 leverage ratios, respectively. 2

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Chairman, President and Chief Executive Officer Jim Eccher said “Old Second reported strong results in the third quarter of 2024 with exceptional profitability and positive trends in a number of verticals. Tangible book value per share increased by more than thirty percent on both a year over year and linked quarter annualized basis. Problem loan levels are continuing to trend in the right direction and we remain pleased with the progress thus far in resolving a number of loans identified in prior periods despite ongoing stress in a number of real estate focused lending verticals.  On an overall basis, Old Second continues to perform exceptionally well with peer-leading performance in our net interest margin and profitability. Third quarter return on average assets and return on average tangible common equity were 1.63% and 17.14%, respectively, the net interest margin was stable at 4.64% and the efficiency ratio is a very healthy 53.38%. This strong bottom-line performance and a well-positioned balance sheet drove an increase in the tangible common equity capital ratio to 10.14% from 9.39% last quarter. In light of the strength of the balance sheet and resilient income statement trends, Old Second elected in the fourth quarter of 2024 to increase the common dividend by 20%, and we will strive to continue to regularly deliver dividend growth commensurate with the strength and growth of the bank. In summary, we are proud of the sustainability of our performance this year and believe we are well positioned to capitalize on growth opportunities that may come our way in the near future.”

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Asset Quality & Earning Assets

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●	Nonperforming loans, comprised of nonaccrual loans plus loans past due 90 days or more and still accruing, totaled $52.3 million at September 30, 2024, $46.9 million at June 30, 2024, and $63.3 million at September 30, 2023.  Nonperforming loans, as a percent of total loans, were 1.3% at September 30, 2024, 1.2% at June 30, 2024, and 1.6% at September 30, 2023.  The increase in the third quarter of 2024 is driven by inflows of $18.7 million, $13.8 million of which was from one commercial relationship.  These inflows were partially offset by $13.3 million of outflows. Nonaccrual loans had $8.5 million of outflows, which consists of $6.2 million paid off, $1.3 million transferred to OREO, $912,000 of partial principal reductions from payments, and $99,000 was charged-off. Outflows for loans past due 90 days or more and still accruing were $4.8 million, due to a loan which paid off.
●	Total loans were $3.99 billion at September 30, 2024, reflecting an increase of $14.5 million compared to June 30, 2024, and a decrease of $38.5 million compared to September 30, 2023. The decrease year over year was largely driven by the declines in commercial, commercial real estate-investor and residential real estate-owner occupied portfolios.  Average loans (including loans held-for-sale) for the third quarter of 2024 totaled $3.97 billion, reflecting an increase of $8.2 million from the second quarter of 2024 and a decrease of $44.1 million from the third quarter of 2023.
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●	Available-for-sale securities totaled $1.19 billion at September 30, 2024, compared to $1.17 billion at June 30, 2024 and $1.23 billion at September 30, 2023.  The unrealized mark to market loss on securities totaled $56.2 million as of September 30, 2024, compared to $82.6 million as of June 30, 2024, and $120.5 million as of September 30, 2023, due to market interest rate fluctuations as well as changes year over year in the composition of the securities portfolio. During the quarter ended September 30, 2024, we had security purchases of $22.7 million, and security calls and paydowns of $31.3 million, compared to security purchases of $142.2 million, security maturities of $95.0 million, and paydowns of $44.0 million during the quarter ended June 30, 2024.  During the quarter ended September 30, 2023, we had no security purchases, $30.5 million of security paydowns, calls and maturities, and security sales of $65.6 million, which resulted in net realized losses of $924,000.  We may continue to buy and sell strategically identified securities as opportunities arise.
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Net Interest Income

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Analysis of Average Balances,
Tax Equivalent Income / Expense and Rates
(Dollars in thousands - unaudited)
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​	​	Quarters Ended
​	​	September 30, 2024							​	June 30, 2024							​	September 30, 2023
​	​	Average		​	Income /		​	Rate	​	Average		​	Income /		​	Rate	​	Average		​	Income /		​	Rate
​	​	Balance		​	Expense		​	%	​	Balance		​	Expense		​	%	​	Balance		​	Expense		​	%
Assets	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest earning deposits with financial institutions	​	$	48,227	​	$	616	​	5.08	​	$	50,740	​	$	625	​	4.95	​	$	49,737	​	$	659	​	5.26
Securities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Taxable	​	​	1,010,379	​	​	9,113	​	3.59	​	​	1,016,187	​	​	8,552	​	3.38	​	​	1,125,688	​	​	8,946	​	3.15
Non-taxable (TE)^1^	​	​	163,569	​	​	1,634	​	3.97	​	​	163,243	​	​	1,636	​	4.03	​	​	169,523	​	​	1,687	​	3.95
Total securities (TE)^1^	​	​	1,173,948	​	​	10,747	​	3.64	​	​	1,179,430	​	​	10,188	​	3.47	​	​	1,295,211	​	​	10,633	​	3.26
FHLBC and FRBC Stock	​	​	30,268	​	​	497	​	6.53	​	​	27,574	​	​	584	​	8.52	​	​	35,954	​	​	597	​	6.59
Loans and loans held-for-sale^1, 2^	​	​	3,966,717	​	​	64,566	​	6.48	​	​	3,958,504	​	​	62,180	​	6.32	​	​	4,010,859	​	​	62,705	​	6.20
Total interest earning assets	​	​	5,219,160	​	​	76,426	​	5.83	​	​	5,216,248	​	​	73,577	​	5.67	​	​	5,391,761	​	​	74,594	​	5.49
Cash and due from banks	​	​	54,279	​	​	-	​	-	​	​	54,286	​	​	-	​	-	​	​	57,279	​	​	-	​	-
Allowance for credit losses on loans	​	​	(42,683)	​	​	-	​	-	​	​	(43,468)	​	​	-	​	-	​	​	(54,581)	​	​	-	​	-
Other noninterest bearing assets	​	​	384,386	​	​	-	​	-	​	​	388,392	​	​	-	​	-	​	​	384,059	​	​	-	​	-
Total assets	​	$	5,615,142	​	​	​	​	​	​	$	5,615,458	​	​	​	​	​	​	$	5,778,518	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities and Stockholders' Equity	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
NOW accounts	​	$	553,906	​	$	714	​	0.51	​	$	570,523	​	$	639	​	0.45	​	$	576,138	​	$	440	​	0.30
Money market accounts	​	​	693,315	​	​	3,260	​	1.87	​	​	691,214	​	​	2,915	​	1.70	​	​	720,488	​	​	1,767	​	0.97
Savings accounts	​	​	895,086	​	​	886	​	0.39	​	​	934,161	​	​	763	​	0.33	​	​	1,027,987	​	​	351	​	0.14
Time deposits	​	​	651,663	​	​	5,539	​	3.38	​	​	610,705	​	​	4,961	​	3.27	​	​	466,250	​	​	1,982	​	1.69
Interest bearing deposits	​	​	2,793,970	​	​	10,399	​	1.48	​	​	2,806,603	​	​	9,278	​	1.33	​	​	2,790,863	​	​	4,540	​	0.65
Securities sold under repurchase agreements	​	​	45,420	​	​	93	​	0.81	​	​	37,430	​	​	83	​	0.89	​	​	24,945	​	​	27	​	0.43
Other short-term borrowings	​	​	305,489	​	​	4,185	​	5.45	​	​	242,912	​	​	3,338	​	5.53	​	​	427,174	​	​	5,840	​	5.42
Junior subordinated debentures	​	​	25,773	​	​	270	​	4.17	​	​	25,773	​	​	288	​	4.49	​	​	25,773	​	​	245	​	3.77
Subordinated debentures	​	​	59,436	​	​	547	​	3.66	​	​	59,414	​	​	546	​	3.70	​	​	59,350	​	​	547	​	3.66
Senior notes	​	​	-	​	​	-	​	-	​	​	-	​	​	-	​	-	​	​	-	​	​	-	​	-
Notes payable and other borrowings	​	​	-	​	​	-	​	-	​	​	-	​	​	-	​	-	​	​	-	​	​	-	​	-
Total interest bearing liabilities	​	​	3,230,088	​	​	15,494	​	1.91	​	​	3,172,132	​	​	13,533	​	1.72	​	​	3,328,105	​	​	11,199	​	1.34
Noninterest bearing deposits	​	​	1,691,450	​	​	-	​	-	​	​	1,769,543	​	​	-	​	-	​	​	1,867,201	​	​	-	​	-
Other liabilities	​	​	54,453	​	​	-	​	-	​	​	68,530	​	​	-	​	-	​	​	53,164	​	​	-	​	-
Stockholders' equity	​	​	639,151	​	​	-	​	-	​	​	605,253	​	​	-	​	-	​	​	530,048	​	​	-	​	-
Total liabilities and stockholders' equity	​	$	5,615,142	​	​	​	​	​	​	$	5,615,458	​	​	​	​	​	​	$	5,778,518	​	​	​	​	​
Net interest income (GAAP)	​	​	​	​	$	60,578	​	​	​	​	​	​	$	59,690	​	​	​	​	​	​	$	63,030	​	​
Net interest margin (GAAP)	​	​	​	​	​	​	​	4.62	​	​	​	​	​	​	​	4.60	​	​	​	​	​	​	​	4.64
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income (TE)^1^	​	​	​	​	$	60,932	​	​	​	​	​	​	$	60,044	​	​	​	​	​	​	$	63,395	​	​
Net interest margin (TE)^1^	​	​	​	​	​	​	​	4.64	​	​	​	​	​	​	​	4.63	​	​	​	​	​	​	​	4.66
Interest bearing liabilities to earning assets	​	​	61.89	%	​	​	​	​	​	​	60.81	%	​	​	​	​	​	​	61.73	%	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

^1^ Tax equivalent (TE) basis is calculated using a marginal tax rate of 21% in 2024 and 2023. See the discussion entitled “Non-GAAP Presentations” below and the tables beginning on page 17 that provides a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

^2^ Interest income from loans is shown on a tax equivalent basis, which is a non-GAAP financial measure as discussed in the table on page 17, and includes loan fee expense of $155,000 for the third quarter of 2024, loan fee expense of $936,000 for the second quarter of 2024, and loan fee expense of $780,000 for the third quarter of 2023. Nonaccrual loans are included in the above stated average balances.

The increased yield of 16 basis points on interest earning assets compared to the linked period was driven by repricing within the loan and taxable securities portfolios. Changes in the market interest rate environment impact earning assets at varying intervals depending on the repricing timeline of loans, as well as the securities maturity, paydown and purchase activities.

​ 4

The year over year increase of 34 basis points on interest earning assets was primarily driven by overall increases to benchmark interest rates over the past twelve months, primarily impacting variable rate loans and securities. Average balances of securities available for sale decreased $121.3 million in the third quarter of 2024 compared to the prior year like quarter, while the tax equivalent yield on the securities available for sale portfolio increased 38 basis points year over year due to variable security rate resets.

Average balances of interest-bearing deposit accounts have decreased steadily since the second quarter of 2024 through the third quarter of 2024, from $2.81 billion to $2.79 billion, as NOW, money market, and savings account average balances decreased while time deposits average balances increased due to CD rate specials. We have continued to control the cost of funds over the periods reflected by slowing the pace of change, however the rate of overall interest-bearing deposits increased to 148 basis points for the quarter ended September 30, 2024, from 133 basis points for the quarter ended June 30, 2024, and from 65 basis points for the quarter ended September 30, 2023. A 17 basis point increase in the cost of money market funds for the quarter ended September 30, 2024 compared to the prior linked quarter, and a 90 basis point increase compared to the prior year like quarter were both due to select deposit account exception pricing, and drove a significant portion of the overall increase. Although there was a decrease in transactional account average balances from the prior year like quarter for NOW, and savings accounts, average rates paid on these balances increased. Average rates paid on time deposits for the quarter ended September 30, 2024 increased by 11 basis points and 169 basis points in the quarter over linked quarter and year over year quarters, respectively, primarily due to CD rate specials we offered.

Borrowing costs increased in the third quarter of 2024, compared to the second quarter of 2024, primarily due to the $62.6 million increase in average other short-term borrowings stemming from an increase in average daily FHLB advances over the prior quarter. The decrease of $121.7 million year over year of average FHLB advances was based on daily liquidity needs, and was the primary driver of the $1.7 million decrease to interest expense on other short-term borrowings. Subordinated and junior subordinated debt interest expense were essentially flat over each of the periods presented.

Our net interest margin, for both GAAP and TE presentations, was relatively static over the periods presented above.  The impact of the Federal Reserve Bank (Federal Open Market Committee, or “FOMC”) fed funds rate reduction made in mid-September 2024 will not have a material impact on our financials until 30-, 60-, and 90-day rate resets are reached on our securities and loans, and deposit exception pricing is lowered. Our net interest margin (GAAP) increased two basis points to 4.62% for the third quarter of 2024, compared to 4.60% for the second quarter of 2024, and decreased two basis point compared to 4.64% for the third quarter of 2023.  Our net interest margin (TE) increased one basis point to 4.64% for the third quarter of 2024, compared to 4.63% for the second quarter of 2024, and decreased two basis points compared to 4.66% for the third quarter of 2023.  The increase in the third quarter of 2024, compared to the prior quarter, was driven by market interest rates as well as the composition of assets and liabilities as interest income and expense both increased compared to the prior quarter while there was only a $2.9 million increase in interest earning assets. The net interest margin decrease in the third quarter of 2024, compared to the prior year like quarter, is primarily due to an increase in market interest rates, and the related increase in costs of interest-bearing deposits. See the discussion entitled “Non-GAAP Presentations” and the tables beginning on page 17 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

​ 5

​

Noninterest Income

​

​	​	​	​	​	​	​	​	​	​		​		​	​	​		​
​	​	​	​	​	​	​	​	​	​		​		3rd Quarter 2024				​
Noninterest Income	​	Three Months Ended								​		Percent Change From				​
(Dollars in thousands)	​	September 30,		​	June 30,		​	September 30,			​		June 30,	​	September 30,		​
​		2024		****	2024		****	2023			****		2024	****	2023
Wealth management	​	$	2,787	​	$	2,779	​	$	2,475		​		0.3	​	12.6		​
Service charges on deposits	​	​	2,646	​	​	2,508	​	​	2,504		​		5.5	​	5.7		​
Residential mortgage banking revenue	​	​	​	​	​	​	​	​	​		​		​	​	​		​
Secondary mortgage fees	​	​	84	​	​	65	​	​	66		​		29.2	​	27.3		​
MSRs mark to market (loss) gain	​	​	(964)	​	​	(238)	​	​	281		​		(305.0)	​	(443.1)		​
Mortgage servicing income	​	​	466	​	​	513	​	​	519		​		(9.2)	​	(10.2)		​
Net gain on sales of mortgage loans	​	​	507	​	​	468	​	​	407		​		8.3	​	24.6		​
Total residential mortgage banking revenue	​	​	93	​	​	808	​	​	1,273		​		(88.5)	​	(92.7)		​
Securities losses, net	​	​	(1)	​	​	-	​	​	(924)		​		N/M	​	N/M		​
Change in cash surrender value of BOLI	​	​	860	​	​	820	​	​	919		​		4.9	​	(6.4)		​
Death benefit realized on BOLI	​	​	12	​	​	893	​	​	-		​		(98.7)	​	N/M		​
Card related income	​	​	2,589	​	​	2,577	​	​	2,606		​		0.5	​	(0.7)		​
Other income	​	​	1,595	​	​	742	​	​	1,024		​		115.0	​	55.8		​
Total noninterest income	​	$	10,581	​	$	11,127	​	$	9,877		​		(4.9)	​	7.1		​

​

N/M - Not meaningful.

​

Noninterest income decreased $546,000, or 4.9%, in the third quarter of 2024, compared to the second quarter of 2024, and increased $704,000, or 7.1%, compared to the third quarter of 2023.  The decrease from the second quarter of 2024 was primarily driven by a $715,000 decrease in residential mortgage banking revenue primarily due to a decrease of $726,000 in MSRs mark to market valuation. Also contributing to the decrease during the quarter was the $893,000 death benefit realized on BOLI that was recorded in the second quarter of 2024; the third quarter BOLI death benefit of $12,000 reflected a minor true-up to proceeds actually received. Partially offsetting the decrease in noninterest income from the prior quarter was a $138,000 increase in service charges on deposits, a $40,000 increase in the cash surrender value of BOLI, and an $853,000 increase in other income primarily due to a $245,000 refund received from a vendor with whom we cancelled services, a $155,000 recognition of a refund related to the advance reserves held for our VISA card portfolio which was sold in 2023, and a $78,000 incentive bonus from a vendor for certain transactional levels being attained.

The increase in noninterest income of $704,000 in the third quarter of 2024, compared to the third quarter of 2023, is primarily due to a $312,000 increase in wealth management income primarily due to growth in advisory fees, a $142,000 increase in service charges on deposits, a $1,000 loss on the call of securities in the third quarter of 2024 compared to losses on the sale of securities of $924,000 in the third quarter of 2023 and a $571,000 increase in other income due to a $245,000 refund received from a vendor due to cancellation of services, a $155,000 recognition of a refund related to the sold VISA credit card advance reserves, and a $78,000 incentive bonus from a vendor based on certain transactional levels which were attained. These increases were partially offset by a $1.2 million decrease in residential mortgage banking revenue mainly due to a decrease of $1.2 million in MSRs mark to market valuation, and a $59,000 decrease in the cash surrender value of BOLI due to changes in market interest rates.

​ 6

Noninterest Expense

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	3rd Quarter 2024			​
Noninterest Expense	​	Three Months Ended								​	Percent Change From			​
(Dollars in thousands)	​	September 30,		​	June 30,		​	September 30,		​	June 30,	​	September 30,	​
​		2024		****	2024		****	2023		****	2024	****	2023
Salaries	​	$	17,665	​	$	17,997	​	$	17,279	​	(1.8)	​	2.2	​
Officers' incentive	​	​	2,993	​	​	1,482	​	​	2,773	​	102.0	​	7.9	​
Benefits and other	​	​	4,018	​	​	3,945	​	​	3,063	​	1.9	​	31.2	​
Total salaries and employee benefits	​	​	24,676	​	​	23,424	​	​	23,115	​	5.3	​	6.8	​
Occupancy, furniture and equipment expense	​	​	3,876	​	​	3,899	​	​	3,506	​	(0.6)	​	10.6	​
Computer and data processing	​	​	2,375	​	​	2,184	​	​	1,922	​	8.7	​	23.6	​
FDIC insurance	​	​	632	​	​	616	​	​	744	​	2.6	​	(15.1)	​
Net teller & bill paying	​	​	570	​	​	578	​	​	534	​	(1.4)	​	6.7	​
General bank insurance	​	​	320	​	​	312	​	​	300	​	2.6	​	6.7	​
Amortization of core deposit intangible asset	​	​	570	​	​	574	​	​	616	​	(0.7)	​	(7.5)	​
Advertising expense	​	​	299	​	​	472	​	​	93	​	(36.7)	​	221.5	​
Card related expense	​	​	1,458	​	​	1,323	​	​	1,347	​	10.2	​	8.2	​
Legal fees	​	​	202	​	​	238	​	​	97	​	(15.1)	​	108.2	​
Consulting & management fees	​	​	480	​	​	797	​	​	549	​	(39.8)	​	(12.6)	​
Other real estate owned expense, net	​	​	242	​	​	(87)	​	​	(27)	​	N/M	​	N/M	​
Other expense	​	​	3,608	​	​	3,547	​	​	4,627	​	1.7	​	(22.0)	​
Total noninterest expense	​	$	39,308	​	$	37,877	​	$	37,423	​	3.8	​	5.0	​
Efficiency ratio (GAAP)^1^	​	​	53.38	%	​	53.29	%	​	50.08	%	​	​	​	​
Adjusted efficiency ratio (non-GAAP)^2^	​	​	52.31	%	​	52.68	%	​	48.82	%	​	​	​	​

​

N/M - Not meaningful.

​

^1^The efficiency ratio shown in the table above is a GAAP financial measure calculated as noninterest expense, excluding amortization of core deposits and OREO expenses, divided by the sum of net interest income and total noninterest income less net gains or losses on securities, death benefit realized on BOLI, and mark to market gains or losses on MSRs.

​

^2^ The adjusted efficiency ratio shown in the table above is a non-GAAP financial measure calculated as noninterest expense, excluding amortization of core deposits, OREO expenses, acquisition expense, and liquidation and deconversion costs of the sold Visa card portfolio, if applicable, divided by the sum of net interest income on a fully tax equivalent basis, total noninterest income less net gains or losses on securities, death benefit realized on BOLI, mark to market gains or losses on MSRs, and includes a tax equivalent adjustment on the change in cash surrender value of BOLI.  See the discussion entitled “Non-GAAP Presentations” below and the table on page 17 that provides a reconciliation of this non-GAAP financial measure to the most comparable GAAP equivalent.

​

Noninterest expense for the third quarter of 2024 increased $1.4 million, or 3.8%, compared to the second quarter of 2024, and increased $1.9 million, or 5.0%, compared to the third quarter of 2023.  The increase in the third quarter of 2024 compared to the second quarter of 2024 was attributable to a $1.3 million increase in salaries and employee benefits, with increases reflected primarily in officers’ incentives due to a higher projection of year end accruals based on our bank’s performance, and deferred executive compensation due to changes in market interest rates.  Also contributing to the growth in noninterest expense in the third quarter of 2024 was a $191,000 increase in computer and data processing expenses due to transaction-related costs incurred related to our pending purchase of five bank branches from FRME, a $135,000 increase in card related expenses, and a $329,000 increase in other real estate owned expense, net, as a gain of $259,000 was recorded on an OREO sale in the second quarter of 2024; no like gain was recorded in the third quarter of 2024. Partially offsetting the increases in noninterest expense in the third quarter of 2024 compared to the second quarter of 2024 was a $173,000 decrease in advertising expense primarily due to an overdraft disclosure mailed to retail deposit customers during the second quarter of 2024, a $36,000 decrease in legal fees, and a $317,000 decrease in consulting & management fees as the second quarter of 2024 included costs of a one-time compliance review project.

​

The year over year increase in noninterest expense is primarily attributable to a $1.6 million increase in salaries and employee benefits, primarily due to increases in annual base salary rates, restricted stock expense, and deferred employee compensation due to market interest rate changes.  Also contributing to the increase was a $370,000 increase in occupancy, furniture and equipment due to facilities improvements year over year, a $453,000 increase in computer and data processing primarily due to transaction-related costs incurred related to our pending branch purchase from FRME, a $206,000 increase in advertising expense, a $111,000 increase in card related expense, a $105,000 increase in legal fees mainly due to FRME merger-related costs, and a $269,000 increase in OREO related expenses. Partially offsetting the increases in noninterest expense in the third quarter of 2024, compared to the third quarter of 2023, was a $112,000 decrease in FDIC insurance, and a $1.0 million decrease in other expenses primarily due to $629,000 of liquidation costs recorded in the third quarter of 2023 from the September 2023 Visa credit card portfolio servicing deconversion. 7

Earning Assets

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	September 30, 2024			​
Loans	​	As of								​	Percent Change From			​
(Dollars in thousands)	​	September 30,		​	June 30,		​	September 30,		​	June 30,	​	September 30,	​
​		2024			2024			2023			2024	****	2023
Commercial	​	$	814,668	​	$	809,443	​	$	834,877	​	0.6	​	(2.4)	​
Leases	​	​	458,317	​	​	452,957	​	​	354,827	​	1.2	​	29.2	​
Commercial real estate – investor	​	​	1,045,060	​	​	1,014,345	​	​	1,047,122	​	3.0	​	(0.2)	​
Commercial real estate – owner occupied	​	​	718,265	​	​	745,938	​	​	809,050	​	(3.7)	​	(11.2)	​
Construction	​	​	206,458	​	​	185,634	​	​	202,546	​	11.2	​	1.9	​
Residential real estate – investor	​	​	50,332	​	​	50,371	​	​	53,762	​	(0.1)	​	(6.4)	​
Residential real estate – owner occupied	​	​	208,227	​	​	218,974	​	​	227,446	​	(4.9)	​	(8.4)	​
Multifamily	​	​	375,394	​	​	388,743	​	​	372,020	​	(3.4)	​	0.9	​
HELOC	​	​	102,611	​	​	99,037	​	​	102,055	​	3.6	​	0.5	​
Other^1^	​	​	11,746	​	​	11,153	​	​	25,838	​	5.3	​	(54.5)	​
Total loans	​	$	3,991,078	​	$	3,976,595	​	$	4,029,543	​	0.4	​	(1.0)	​

​

^1^Other class includes consumer loans and overdrafts.

​

Total loans increased by $14.5 million at September 30, 2024, compared to June 30, 2024, and decreased $38.5 million for the year over year period.  The increase in total loans in the third quarter of 2024 compared to the prior linked quarter was due to increased originations, net of paydowns, over the third quarter, primarily in commercial real estate-investor and construction loans. The year over year reductions in loans is primarily due to paydowns, net of originations, in commercial real estate – owner occupied of $90.8 million, commercial of $20.2 million, real estate – owner occupied of $19.2 million, offset by lease originations, net of paydowns, of $103.5 million and a slower pace origination in the portfolio. Increases were noted in the leases segment in the third quarter of 2024 compared to the prior linked quarter and compared to the prior year like period primarily due to an expansion of this product line over the past year.

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	September 30, 2024
Securities	​	As of								​	Percent Change From
(Dollars in thousands)	​	September 30,		​	June 30,		​	September 30,		​	June 30,	​	September 30,
​	****	2024		****	2024		****	2023			2024	****	2023
Securities available-for-sale, at fair value	​	​	​	​	​	​	​	​	​	​	​	​	​
U.S. Treasury	​	$	194,188	​	$	191,274	​	$	216,777	​	1.5	​	(10.4)
U.S. government agencies	​	​	37,976	​	​	37,298	​	​	55,821	​	1.8	​	(32.0)
U.S. government agency mortgage-backed	​	​	96,413	​	​	96,872	​	​	104,569	​	(0.5)	​	(7.8)
States and political subdivisions	​	​	224,795	​	​	220,265	​	​	218,254	​	2.1	​	3.0
Corporate bonds	​	​	-	​	​	-	​	​	4,961	​	-	​	(100.0)
Collateralized mortgage obligations	​	​	384,271	​	​	386,055	​	​	386,679	​	(0.5)	​	(0.6)
Asset-backed securities	​	​	63,947	​	​	64,877	​	​	68,762	​	(1.4)	​	(7.0)
Collateralized loan obligations	​	​	189,264	​	​	177,020	​	​	173,795	​	6.9	​	8.9
Total securities available-for-sale	​	$	1,190,854	​	$	1,173,661	​	$	1,229,618	​	1.5	​	(3.2)
​	​	​	​	​	​	​	​	​	​	​	​	​	​

​

Our securities available-for-sale portfolio totaled $1.19 billion as of September 30, 2024, reflecting an increase of $17.2 million from June 30, 2024, and a decrease of $38.8 million since September 30, 2023. The portfolio’s increase  in the third quarter of 2024, compared to the prior quarter-end, was due to purchases of $22.7 million, primarily consisting of collateralized loan obligations and collateralized mortgage obligations, as well as a decrease in unrealized loss of $26.4 million, partially offset by $31.3 million in paydowns and calls. Net unrealized losses at September 30, 2024 were $56.2 million, compared to $82.6 million at June 30, 2024 and $120.5 million at September 30, 2023. The year over year decrease in net unrealized losses is due to changes in the market interest rate environment as well as the impact of security paydowns and purchases undertaken to further reduce the portfolio’s interest rate sensitivity. The portfolio continues to consist of high quality fixed-rate and floating-rate securities, with more than 99% of publicly issued securities rated AA or better.

​ 8

Asset Quality

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	September 30, 2024
Nonperforming assets	​	As of								​	Percent Change From
(Dollars in thousands)	​	September 30,		​	June 30,		​	September 30,		​	June 30,	​	September 30,
​		2024		****	2024		****	2023		****	2024	​	2023
Nonaccrual loans	​	$	52,171	​	$	41,957	​	$	62,116	​	24.3	​	(16.0)
Loans past due 90 days or more and still accruing interest	​		109	​		4,909	​		1,209	​	(97.8)	​	(91.0)
Total nonperforming loans	​		52,280	​		46,866	​		63,325	​	11.6	​	(17.4)
Other real estate owned	​		8,202	​		6,920	​		407	​	18.5	​	N/M
Total nonperforming assets	​	$	60,482	​	$	53,786	​	$	63,732	​	12.4	​	(5.1)
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
30-89 days past due loans and still accruing interest	​	$	28,480	​	$	16,728	​	$	28,486	​	​	​	​
Nonaccrual loans to total loans	​	​	1.3	%	​	1.1	%	​	1.5	%	​	​	​
Nonperforming loans to total loans	​	​	1.3	%	​	1.2	%	​	1.6	%	​	​	​
Nonperforming assets to total loans plus OREO	​	​	1.5	%	​	1.4	%	​	1.6	%	​	​	​
Purchased credit-deteriorated loans to total loans	​	​	0.4	%	​	0.8	%	​	1.5	%	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Allowance for credit losses	​	$	44,422	​	$	42,269	​	$	51,729	​	​	​	​
Allowance for credit losses to total loans	​	​	1.1	%	​	1.1	%	​	1.3	%	​	​	​
Allowance for credit losses to nonaccrual loans	​	​	85.1	%	​	100.7	%	​	83.3	%	​	​	​

​

N/M - Not meaningful.

​

Nonperforming loans consist of nonaccrual loans and loans 90 days or more past due and still accruing interest.  Purchased credit-deteriorated (“PCD”) loans acquired in our acquisitions of West Suburban and ABC Bank totaled $17.9 million, net of purchase accounting adjustments, at September 30, 2024.  PCD loans that meet the definition of nonperforming loans are included in our nonperforming disclosures.  Nonperforming loans to total loans was 1.3% as of September 30, 2024, 1.2% as of June 30, 2024, and 1.6% as of September 30, 2023. Nonperforming assets to total loans plus OREO was 1.5% as of September 30, 2024, 1.4% as of June 30, 2024, and 1.6% as of September 30, 2023. Our allowance for credit losses to total loans was 1.1% as of September 30, 2024 and June 30, 2024, and 1.3% as of September 30, 2023.

The following table shows classified loans by segment, which include nonaccrual loans, PCD loans if the risk rating so indicates, and all other loans considered substandard, for the following periods.

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	September 30, 2024			​
Classified loans	​	As of								​	Percent Change From			​
(Dollars in thousands)	​	September 30,		​	June 30,		​	September 30,		​	June 30,	​	September 30,	​
​	****	2024		****	2024		****	2023			2024	****	2023	​
Commercial	​	$	35,043	​	$	19,142	​	$	18,298	​	83.1	​	91.5	​
Leases	​	​	746	​	​	284	​	​	574	​	162.7	​	30.0	​
Commercial real estate – investor	​	​	21,652	​	​	36,939	​	​	54,126	​	(41.4)	​	(60.0)	​
Commercial real estate – owner occupied	​	​	41,820	​	​	48,387	​	​	55,292	​	(13.6)	​	(24.4)	​
Construction	​	​	5,765	​	​	5,740	​	​	17,263	​	0.4	​	(66.6)	​
Residential real estate – investor	​	​	1,180	​	​	1,343	​	​	1,502	​	(12.1)	​	(21.4)	​
Residential real estate – owner occupied	​	​	2,612	​	​	2,734	​	​	3,627	​	(4.5)	​	(28.0)	​
Multifamily	​	​	3,269	​	​	6,810	​	​	1,141	​	(52.0)	​	186.5	​
HELOC	​	​	736	​	​	1,025	​	​	1,434	​	(28.2)	​	(48.7)	​
Other^1^	​	​	-	​	​	1	​	​	-	​	(100.0)	​	N/M	​
Total classified loans	​	$	112,823	​	$	122,405	​	$	153,257	​	(7.8)	​	(26.4)	​

​

N/M - Not meaningful.

​

^1^Other class includes consumer loans and overdrafts.

​

​ 9

Classified loans as of September 30, 2024 decreased by $9.6 million from June 30, 2024, and decreased by $40.4 million from September 30, 2023. The net decrease from the second quarter of 2024 was primarily driven by outflows of $20.8 million of loan upgrades, $20.7 million of paid off loans, $2.5 million of principal reductions from payments, $1.3 million transferred to OREO, and $99,000 of loan charge offs. The decrease in classified loans in the third quarter was offset by additions of $35.6 million, primarily consisting of nine separate relationships, totaling $19.8 million, and five commercial real estate – owner occupied loans totaling $14.2 million. Remediation work continues on these credits, with the goal of cash flow improvements with increased tenancy.

​

Allowance for Credit Losses on Loans and Unfunded Commitments

​

At September 30, 2024, our allowance for credit losses (“ACL”) on loans totaled $44.4 million, and our ACL on unfunded commitments, included in other liabilities, totaled $2.5 million.  In the third quarter of 2024, we recorded provision expense of $2.0 million based on historical loss rate updates, our assessment of nonperforming loan metrics and trends, as well as estimated future credit losses. The third quarter’s provision expense consisted of a $2.0 million provision for credit losses on loans, and a $2,000 provision for credit losses on unfunded commitments.  The increase in ACL on unfunded commitments was primarily due to an adjustment of historical benchmark assumptions, such as funding rates and the period used to forecast those rates, within the ACL calculation.  We recorded net recoveries of $155,000 in the third quarter of 2024 primarily within the commercial real estate portfolio. The second quarter 2024 provision expense of $3.8 million consisted of a $3.9 million provision for credit losses on loans, and a $199,000 reversal of provision for credit losses on unfunded commitments. We recorded net charge-offs of $5.8 million in the second quarter of 2024. In the third quarter of 2023, we recorded provision expense of $3.0 million, which consisted of a $3.0 million provision for credit losses on loans and a $11,000 reversal of provision for credit losses on unfunded commitments. We recorded net charge-offs of $6.6 million in the third quarter of 2023. Our ACL on loans to total loans was 1.1% as of September 30, 2024 and June 30, 2024, and 1.3% as of September 30, 2023.

​

The ACL on unfunded commitments totaled $2.5 million as of September 30, 2024 and June 30, 2024, and $2.9 million as of September 30, 2023.

​

Net Charge-off Summary

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loan charge–offs, net of recoveries	Quarters Ended
(Dollars in thousands)	September 30,		​	% of	​	June 30,		​	% of	​	September 30,		​	% of
​	2024		​	Total ^2^	​	2024		​	Total ^2^	​	2023		​	Total ^2^
Commercial	$	(7)	​	4.5	​	$	(19)	​	(0.3)	​	$	8	​	0.1
Leases	​	53	​	(34.2)	​	​	81	​	1.4	​	​	(95)	​	(1.4)
Commercial real estate – Investor	​	(149)	​	96.1	​	​	4,560	​	78.7	​	​	6,754	​	102.4
Commercial real estate – Owner occupied	​	(44)	​	28.4	​	​	1,162	​	20.1	​	​	23	​	0.3
Construction	​	-	​	-	​	​	-	​	-	​	​	(100)	​	(1.5)
Residential real estate – Investor	​	(18)	​	11.6	​	​	(3)	​	(0.1)	​	​	(3)	​	-
Residential real estate – Owner occupied	​	(11)	​	7.1	​	​	(9)	​	(0.2)	​	​	(25)	​	(0.4)
HELOC	​	(14)	​	9.0	​	​	(15)	​	(0.3)	​	​	(35)	​	(0.5)
Other^1^	​	35	​	(22.5)	​	​	37	​	0.7	​	​	70	​	1.0
Net charge–offs / (recoveries)	$	(155)	​	100.0	​	$	5,794	​	100.0	​	$	6,597	​	100.0
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

^1^Other class includes consumer loans and overdrafts.

^2^^^Represents the percentage of net charge-offs attributable to each category of loans.

​

Gross charge-offs for the third quarter of 2024 were $165,000, compared to $6.0 million for the second quarter of 2024 and $6.9 million for the third quarter of 2023.  Gross recoveries were $320,000 for the third quarter of 2024, compared to $217,000 for the second quarter of 2024, and $339,000 for the third quarter of 2023.  Continued recoveries are indicative of the ongoing aggressive efforts by management to effectively manage and resolve prior charge-offs, however recoveries cannot be forecasted or expected at the same pace in the future.

​ 10

​

Deposits

​

Total deposits were $4.47 billion at September 30, 2024, a decrease of $56.3 million, or 1.2%, compared to $4.52 billion at June 30, 2024, primarily due to a decrease in noninterest bearing deposits of $59.5 million driven by a few larger customers, a decrease of $22.9 million in savings, and a decrease of $12.8 million in NOW and money market accounts. These declines were partially offset by an increase in time deposits of $38.9 million, primarily due to CD specials offered. Total quarterly average deposits for the year over year period decreased $172.6 million, or 3.7%, driven by declines in our average demand deposits of $175.8 million, and savings, NOW and money markets combined of $182.3 million, partially offset by an increase of $185.4 in average time deposits. The decline in total deposits in the third quarter of 2024 was less than the decline in the third quarter of 2023, and third quarter declines in deposit balances for both 2024 and 2023 were primarily due to depositor real estate tax payments and other seasonal reductions.

​

Borrowings

​

As of September 30, 2024, we had $335.0 million in other short-term borrowings due to short-term FHLB advances, compared to $330.0 million at June 30, 2024, and $435.0 million as of September 30, 2023.

​

Non-GAAP Presentations

​

Management has disclosed in this earnings release certain non-GAAP financial measures to evaluate and measure our performance, including the presentation of adjusted net income, net interest income and net interest margin on a fully taxable equivalent basis, and our efficiency ratio calculations on a taxable equivalent basis. The net interest margin fully taxable equivalent is calculated by dividing net interest income on a tax equivalent basis by average earning assets for the period.  Consistent with industry practice, management has disclosed the efficiency ratio including and excluding certain items, which is discussed in the noninterest expense presentation on page 7.

We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons.  We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis.  We believe these measures provide investors with information regarding balance sheet profitability, and we believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing, and comparing past, present and future periods.

These non-GAAP financial measures should not be considered as a substitute for GAAP financial measures, and we strongly encourage investors to review the GAAP financial measures included in this earnings release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this earnings release with other companies’ non-GAAP financial measures having the same or similar names. The tables beginning on page 17 provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP equivalent.

Cautionary Note Regarding Forward-Looking Statements

​

**** This earnings release and statements by our management may contain forward-looking statements within the Private Securities Litigation Reform Act of 1995.  Forward looking statements can be identified by words such as “should,” “anticipate,” “expect,” “estimate,” “intend,” “believe,” “may,” “likely,” “will,” “forecast,” “project,” “looking forward,” “optimistic,” “hopeful,” “potential,” “progress,” “prospect,” “remain,” “deliver,” “continue,” “trend,” “momentum,” “remainder,” “beyond,” “and “near” or other statements that indicate future periods.  Examples of forward-looking statements include, but are not limited to, statements regarding the economic outlook, loan growth, deposit trends and funding, asset-quality trends, balance sheet growth, and building capital. Such forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.  The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements, (1) the strength of the United States economy in general and the strength of the local economies in which we conduct our operations may be different than expected; (2) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (3) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action; (4) risks related to pending or future acquisitions, if any, including execution and integration risks; (5) adverse conditions in the stock market, the 11

public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on us; (6) changes in interest rates, which has and may continue to affect our deposit and funding costs, net income, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of our assets, including our investment securities; (7) elevated inflation which causes adverse risk to the overall economy, and could indirectly pose challenges to our clients and to our business; and (8) the adverse effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as epidemics and pandemics, war or terrorist activities, essential utility outages, deterioration in the global economy, instability in the credit markets, disruptions in our customers’ supply chains or disruption in transportation, and disruptions caused from widespread cybersecurity incidents. Additional risks and uncertainties are contained in the “Risk Factors” and forward-looking statements disclosure in our most recent Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q. The inclusion of this forward-looking information should not be construed as a representation by us or any person that future events, plans, or expectations contemplated by us will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

​

Conference Call

​

We will host a call on Thursday, October 17, 2024, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss our third quarter 2024 financial results.  Investors may listen to our call via telephone by dialing 888-506-0062, using Entry Code: 232873.  Investors should call into the dial-in number set forth above at least 10 minutes prior to the scheduled start of the call.

​

A replay of the call will be available until 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on October 24, 2024, by dialing 877-481-4010, using Conference ID: 51325. 12

​

Old Second Bancorp, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

​

​	​	​	​	​	​	​
​	​	(unaudited)		​	​	​
​	​	September 30,		​	December 31,
​	****	2024			2023
Assets	​	​	​	​	​	​
Cash and due from banks	​	$	63,298	​	$	55,534
Interest earning deposits with financial institutions	​	​	52,469	​	​	44,611
Cash and cash equivalents	​	​	115,767	​	​	100,145
Securities available-for-sale, at fair value	​	​	1,190,854	​	​	1,192,829
Federal Home Loan Bank Chicago (“FHLBC”) and Federal Reserve Bank Chicago (“FRBC”) stock	​	​	30,205	​	​	33,355
Loans held-for-sale	​	​	2,447	​	​	1,322
Loans	​	​	3,991,078	​	​	4,042,953
Less: allowance for credit losses on loans	​	​	44,422	​	​	44,264
Net loans	​	​	3,946,656	​	​	3,998,689
Premises and equipment, net	​	​	82,768	​	​	79,310
Other real estate owned	​	​	8,202	​	​	5,123
Mortgage servicing rights, at fair value	​	​	9,726	​	​	10,344
Goodwill	​	​	86,478	​	​	86,478
Core deposit intangible	​	​	9,493	​	​	11,217
Bank-owned life insurance (“BOLI”)	​	​	111,394	​	​	109,318
Deferred tax assets, net	​	​	22,032	​	​	31,077
Other assets	​	​	55,738	​	​	63,592
Total assets	​	$	5,671,760	​	$	5,722,799
​	​	​	​	​	​	​
Liabilities	​	​	​	​	​	​
Deposits:	​	​	​	​	​	​
Noninterest bearing demand	​	$	1,669,000	​	$	1,834,891
Interest bearing:	​	​	​	​	​	​
Savings, NOW, and money market	​	​	2,125,696	​	​	2,207,949
Time	​	​	670,728	​	​	527,906
Total deposits	​	​	4,465,424	​	​	4,570,746
Securities sold under repurchase agreements	​	​	53,866	​	​	26,470
Other short-term borrowings	​	​	335,000	​	​	405,000
Junior subordinated debentures	​	​	25,773	​	​	25,773
Subordinated debentures	​	​	59,446	​	​	59,382
Other liabilities	​	​	70,861	​	​	58,147
Total liabilities	​	​	5,010,370	​	​	5,145,518
​	​	​	​	​	​	​
Stockholders’ Equity	​	​	​	​	​	​
Common stock	​	​	44,908	​	​	44,705
Additional paid-in capital	​	​	204,969	​	​	202,223
Retained earnings	​	​	452,745	​	​	393,311
Accumulated other comprehensive loss	​	​	(40,400)	​	​	(62,781)
Treasury stock	​	​	(832)	​	​	(177)
Total stockholders’ equity	​	​	661,390	​	​	577,281
Total liabilities and stockholders’ equity	​	$	5,671,760	​	$	5,722,799
​	​	​	​	​	​	​

​ 13

​

​

Old Second Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands, except share data)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	(unaudited)					​	(unaudited)					​
​	​	Three Months Ended September 30,					​	Nine Months Ended September 30,
​	****	2024		****	2023		****	2024		****	2023		****
Interest and dividend income	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans, including fees	​	$	64,528	​	$	62,665	​	$	189,352	​	$	181,436	​
Loans held-for-sale	​	​	27	​	​	29	​	​	60	​	​	60	​
Securities:	​	​	​	​	​	​	​	​	​	​	​	​	​
Taxable	​	​	9,113	​	​	8,946	​	​	25,757	​	​	29,611	​
Tax exempt	​	​	1,291	​	​	1,333	​	​	3,889	​	​	4,007	​
Dividends from FHLBC and FRBC stock	​	​	497	​	​	597	​	​	1,716	​	​	1,273	​
Interest bearing deposits with financial institutions	​	​	616	​	​	659	​	​	1,851	​	​	1,887	​
Total interest and dividend income	​	​	76,072	​	​	74,229	​	​	222,625	​	​	218,274	​
Interest expense	​	​	​	​	​	​	​	​	​	​	​	​	​
Savings, NOW, and money market deposits	​	​	4,860	​	​	2,558	​	​	13,214	​	​	5,449	​
Time deposits	​	​	5,539	​	​	1,982	​	​	14,541	​	​	3,802	​
Securities sold under repurchase agreements	​	​	93	​	​	27	​	​	262	​	​	43	​
Other short-term borrowings	​	​	4,185	​	​	5,840	​	​	12,080	​	​	13,345	​
Junior subordinated debentures	​	​	270	​	​	245	​	​	838	​	​	805	​
Subordinated debentures	​	​	547	​	​	547	​	​	1,639	​	​	1,639	​
Senior notes	​	​	-	​	​	-	​	​	-	​	​	2,408	​
Notes payable and other borrowings	​	​	-	​	​	-	​	​	-	​	​	87	​
Total interest expense	​	​	15,494	​	​	11,199	​	​	42,574	​	​	27,578	​
Net interest and dividend income	​	​	60,578	​	​	63,030	​	​	180,051	​	​	190,696	​
Provision for credit losses	​	​	2,000	​	​	3,000	​	​	9,250	​	​	8,501	​
Net interest and dividend income after provision for credit losses	​	​	58,578	​	​	60,030	​	​	170,801	​	​	182,195	​
Noninterest income	​	​	​	​	​	​	​	​	​	​	​	​	​
Wealth management	​	​	2,787	​	​	2,475	​	​	8,127	​	​	7,203	​
Service charges on deposits	​	​	2,646	​	​	2,504	​	​	7,569	​	​	7,290	​
Secondary mortgage fees	​	​	84	​	​	66	​	​	199	​	​	201	​
Mortgage servicing rights mark to market (loss) gain	​	​	(964)	​	​	281	​	​	(1,108)	​	​	(148)	​
Mortgage servicing income	​	​	466	​	​	519	​	​	1,467	​	​	1,534	​
Net gain on sales of mortgage loans	​	​	507	​	​	407	​	​	1,289	​	​	1,111	​
Securities losses, net	​	​	(1)	​	​	(924)	​	​	-	​	​	(4,146)	​
Change in cash surrender value of BOLI	​	​	860	​	​	919	​	​	2,852	​	​	1,579	​
Death benefit realized on BOLI	​	​	12	​	​	-	​	​	905	​	​	-	​
Card related income	​	​	2,589	​	​	2,606	​	​	7,542	​	​	7,540	​
Other income	​	​	1,595	​	​	1,024	​	​	3,367	​	​	3,286	​
Total noninterest income	​	​	10,581	​	​	9,877	​	​	32,209	​	​	25,450	​
Noninterest expense	​	​	​	​	​	​	​	​	​	​	​	​	​
Salaries and employee benefits	​	​	24,676	​	​	23,115	​	​	72,412	​	​	67,161	​
Occupancy, furniture and equipment	​	​	3,876	​	​	3,506	​	​	11,702	​	​	10,620	​
Computer and data processing	​	​	2,375	​	​	1,922	​	​	6,814	​	​	4,986	​
FDIC insurance	​	​	632	​	​	744	​	​	1,915	​	​	2,122	​
Net teller & bill paying	​	​	570	​	​	534	​	​	1,669	​	​	1,551	​
General bank insurance	​	​	320	​	​	300	​	​	941	​	​	911	​
Amortization of core deposit intangible	​	​	570	​	​	616	​	​	1,724	​	​	1,858	​
Advertising expense	​	​	299	​	​	93	​	​	963	​	​	338	​
Card related expense	​	​	1,458	​	​	1,347	​	​	4,058	​	​	3,785	​
Legal fees	​	​	202	​	​	97	​	​	666	​	​	699	​
Consulting & management fees	​	​	480	​	​	549	​	​	1,613	​	​	1,859	​
Other real estate expense, net	​	​	242	​	​	(27)	​	​	201	​	​	181	​
Other expense	​	​	3,608	​	​	4,627	​	​	10,748	​	​	12,104	​
Total noninterest expense	​	​	39,308	​	​	37,423	​	​	115,426	​	​	108,175	​
Income before income taxes	​	​	29,851	​	​	32,484	​	​	87,584	​	​	99,470	​
Provision for income taxes	​	​	6,900	​	​	8,149	​	​	21,430	​	​	25,966	​
Net income	​	$	22,951	​	$	24,335	​	$	66,154	​	$	73,504	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Basic earnings per share	​	$	0.52	​	$	0.55	​	$	1.48	​	$	1.65	​
Diluted earnings per share	​	​	0.50	​	​	0.54	​	​	1.45	​	​	1.62	​
Dividends declared per share	​	​	0.05	​	​	0.05	​	​	0.15	​	​	0.15	​

​

​

​

​	​	​	​	​	​	​	​	​
Ending common shares outstanding	​	44,851,091	​	44,684,987	​	44,851,091	​	44,684,987
Weighted-average basic shares outstanding	​	44,850,325	​	44,675,489	​	44,818,693	​	44,653,451
Weighted-average diluted shares outstanding	​	45,679,140	​	45,428,409	​	45,628,606	​	45,390,218

​

​ 14

Old Second Bancorp, Inc. and Subsidiaries

Quarterly Consolidated Average Balance

(In thousands, unaudited)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	2023										​	​	2024
Assets	****	1st Qtr		****	2nd Qtr		****	3rd Qtr		****	4th Qtr		****	1st Qtr		​	2nd Qtr		****	3rd Qtr
Cash and due from banks	​	$	55,140	​	$	56,191	​	$	57,279	​	$	57,723	​	$	54,533	​	$	54,286	​	$	54,279
Interest earning deposits with financial institutions	​	​	49,310	​	​	50,309	​	​	49,737	​	​	47,865	​	​	48,088	​	​	50,740	​	​	48,227
Cash and cash equivalents	​	​	104,450	​	​	106,500	​	​	107,016	​	​	105,588	​	​	102,621	​	​	105,026	​	​	102,506
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Securities available-for-sale, at fair value	​	​	1,503,619	​	​	1,404,664	​	​	1,295,211	​	​	1,192,021	​	​	1,182,888	​	​	1,179,430	​	​	1,173,948
FHLBC and FRBC stock	​	​	24,905	​	​	34,029	​	​	35,954	​	​	34,371	​	​	31,800	​	​	27,574	​	​	30,268
Loans held-for-sale	​	​	813	​	​	1,150	​	​	1,641	​	​	1,709	​	​	746	​	​	1,050	​	​	1,557
Loans	​	​	3,931,679	​	​	4,039,052	​	​	4,009,218	​	​	4,014,771	​	​	4,018,631	​	​	3,957,454	​	​	3,965,160
Less: allowance for credit losses on loans	​	​	49,398	​	​	53,480	​	​	54,581	​	​	50,023	​	​	44,295	​	​	43,468	​	​	42,683
Net loans	​	​	3,882,281	​	​	3,985,572	​	​	3,954,637	​	​	3,964,748	​	​	3,974,336	​	​	3,913,986	​	​	3,922,477
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Premises and equipment, net	​	​	72,649	​	​	72,903	​	​	74,707	​	​	78,472	​	​	80,493	​	​	82,332	​	​	82,977
Other real estate owned	​	​	1,508	​	​	1,132	​	​	472	​	​	2,004	​	​	5,123	​	​	4,657	​	​	7,471
Mortgage servicing rights, at fair value	​	​	11,127	​	​	10,741	​	​	11,066	​	​	11,317	​	​	10,455	​	​	10,754	​	​	10,137
Goodwill	​	​	86,477	​	​	86,477	​	​	86,477	​	​	86,477	​	​	86,477	​	​	86,477	​	​	86,477
Core deposit intangible	​	​	13,327	​	​	12,709	​	​	12,119	​	​	11,502	​	​	10,913	​	​	10,340	​	​	9,768
Bank-owned life insurance ("BOLI")	​	​	106,655	​	​	107,028	​	​	107,786	​	​	108,616	​	​	109,867	​	​	110,440	​	​	110,901
Deferred tax assets, net	​	​	42,237	​	​	37,774	​	​	39,072	​	​	42,754	​	​	31,323	​	​	32,969	​	​	25,666
Other assets	​	​	48,599	​	​	50,812	​	​	52,360	​	​	55,155	​	​	49,681	​	​	50,423	​	​	50,989
Total other assets	​	​	382,579	​	​	379,576	​	​	384,059	​	​	396,297	​	​	384,332	​	​	388,392	​	​	384,386
Total assets	​	$	5,898,647	​	$	5,911,491	​	$	5,778,518	​	$	5,694,734	​	$	5,676,723	​	$	5,615,458	​	$	5,615,142
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Deposits:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Noninterest bearing demand	​	$	2,002,801	​	$	1,920,448	​	$	1,867,201	​	$	1,838,325	​	$	1,819,476	​	$	1,769,543	​	$	1,691,450
Interest bearing:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Savings, NOW, and money market	​	​	2,560,893	​	​	2,437,096	​	​	2,324,613	​	​	2,241,937	​	​	2,202,485	​	​	2,195,898	​	​	2,142,307
Time	​	​	434,655	​	​	436,524	​	​	466,250	​	​	497,472	​	​	558,463	​	​	610,705	​	​	651,663
Total deposits	​	​	4,998,349	​	​	4,794,068	​	​	4,658,064	​	​	4,577,734	​	​	4,580,424	​	​	4,576,146	​	​	4,485,420
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Securities sold under repurchase agreements	​	​	31,080	​	​	25,575	​	​	24,945	​	​	28,526	​	​	30,061	​	​	37,430	​	​	45,420
Other short-term borrowings	​	​	200,833	​	​	402,527	​	​	427,174	​	​	390,652	​	​	332,198	​	​	242,912	​	​	305,489
Junior subordinated debentures	​	​	25,773	​	​	25,773	​	​	25,773	​	​	25,773	​	​	25,773	​	​	25,773	​	​	25,773
Subordinated debentures	​	​	59,308	​	​	59,329	​	​	59,350	​	​	59,372	​	​	59,393	​	​	59,414	​	​	59,436
Senior notes	​	​	44,599	​	​	44,134	​	​	-	​	​	-	​	​	-	​	​	-	​	​	-
Notes payable and other borrowings	​	​	5,400	​	​	-	​	​	-	​	​	-	​	​	-	​	​	-	​	​	-
Other liabilities	​	​	51,279	​	​	48,434	​	​	53,164	​	​	63,971	​	​	60,024	​	​	68,530	​	​	54,453
Total liabilities	​	​	5,416,621	​	​	5,399,840	​	​	5,248,470	​	​	5,146,028	​	​	5,087,873	​	​	5,010,205	​	​	4,975,991
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Stockholders' equity	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Common stock	​	​	44,705	​	​	44,705	​	​	44,705	​	​	44,705	​	​	44,787	​	​	44,908	​	​	44,908
Additional paid-in capital	​	​	201,397	​	​	200,590	​	​	201,344	​	​	201,824	​	​	202,688	​	​	203,654	​	​	204,558
Retained earnings	​	​	324,785	​	​	346,042	​	​	368,732	​	​	389,776	​	​	405,201	​	​	424,262	​	​	443,435
Accumulated other comprehensive loss	​	​	(86,736)	​	​	(78,940)	​	​	(84,167)	​	​	(87,358)	​	​	(63,365)	​	​	(66,682)	​	​	(52,907)
Treasury stock	​	​	(2,125)	​	​	(746)	​	​	(566)	​	​	(241)	​	​	(461)	​	​	(889)	​	​	(843)
Total stockholders' equity	​	​	482,026	​	​	511,651	​	​	530,048	​	​	548,706	​	​	588,850	​	​	605,253	​	​	639,151
Total liabilities and stockholders' equity	​	$	5,898,647	​	$	5,911,491	​	$	5,778,518	​	$	5,694,734	​	$	5,676,723	​	$	5,615,458	​	$	5,615,142
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Earning Assets	​	$	5,510,326	​	$	5,529,204	​	$	5,391,761	​	$	5,290,737	​	$	5,282,153	​	$	5,216,248	​	$	5,219,160
Total Interest Bearing Liabilities	​	​	3,362,541	​	​	3,430,958	​	​	3,328,105	​	​	3,243,732	​	​	3,208,373	​	​	3,172,132	​	​	3,230,088

​

​ 15

​

​

Old Second Bancorp, Inc. and Subsidiaries

Quarterly Consolidated Statements of Income

(In thousands, except per share data, unaudited)

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	2023											​	2024
​		1st Qtr		****	2nd Qtr		****	3rd Qtr		****	4th Qtr		****	1st Qtr		​	2nd Qtr		****	3rd Qtr
Interest and Dividend Income	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans, including fees	​	$	57,210	​	$	61,561	​	$	62,665	​	$	62,751	​	$	62,673	​	$	62,151	​	$	64,528
Loans held-for-sale	​	​	12	​	​	19	​	​	29	​	​	31	​	​	14	​	​	19	​	​	27
Securities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Taxable	​	​	10,735	​	​	9,930	​	​	8,946	​	​	8,329	​	​	8,092	​	​	8,552	​	​	9,113
Tax exempt	​	​	1,337	​	​	1,337	​	​	1,333	​	​	1,322	​	​	1,306	​	​	1,292	​	​	1,291
Dividends from FHLB and FRBC stock	​	​	280	​	​	396	​	​	597	​	​	647	​	​	635	​	​	584	​	​	497
Interest bearing deposits with financial institutions	​	​	585	​	​	643	​	​	659	​	​	616	​	​	610	​	​	625	​	​	616
Total interest and dividend income	​	​	70,159	​	​	73,886	​	​	74,229	​	​	73,696	​	​	73,330	​	​	73,223	​	​	76,072
Interest Expense	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Savings, NOW, and money market deposits	​	​	1,149	​	​	1,742	​	​	2,558	​	​	3,312	​	​	4,037	​	​	4,317	​	​	4,860
Time deposits	​	​	664	​	​	1,156	​	​	1,982	​	​	2,834	​	​	4,041	​	​	4,961	​	​	5,539
Securities sold under repurchase agreements	​	​	9	​	​	7	​	​	27	​	​	50	​	​	86	​	​	83	​	​	93
Other short-term borrowings	​	​	2,345	​	​	5,160	​	​	5,840	​	​	5,429	​	​	4,557	​	​	3,338	​	​	4,185
Junior subordinated debentures	​	​	279	​	​	281	​	​	245	​	​	290	​	​	280	​	​	288	​	​	270
Subordinated debentures	​	​	546	​	​	546	​	​	547	​	​	546	​	​	546	​	​	546	​	​	547
Senior notes	​	​	994	​	​	1,414	​	​	-	​	​	-	​	​	-	​	​	-	​	​	-
Notes payable and other borrowings	​	​	87	​	​	-	​	​	-	​	​	-	​	​	-	​	​	-	​	​	-
Total interest expense	​	​	6,073	​	​	10,306	​	​	11,199	​	​	12,461	​	​	13,547	​	​	13,533	​	​	15,494
Net interest and dividend income	​	​	64,086	​	​	63,580	​	​	63,030	​	​	61,235	​	​	59,783	​	​	59,690	​	​	60,578
Provision for credit losses	​	​	3,501	​	​	2,000	​	​	3,000	​	​	8,000	​	​	3,500	​	​	3,750	​	​	2,000
Net interest and dividend income after provision for credit losses	​	​	60,585	​	​	61,580	​	​	60,030	​	​	53,235	​	​	56,283	​	​	55,940	​	​	58,578
Noninterest Income	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Wealth management	​	​	2,270	​	​	2,458	​	​	2,475	​	​	2,600	​	​	2,561	​	​	2,779	​	​	2,787
Service charges on deposits	​	​	2,424	​	​	2,362	​	​	2,504	​	​	2,527	​	​	2,415	​	​	2,508	​	​	2,646
Secondary mortgage fees	​	​	59	​	​	76	​	​	66	​	​	58	​	​	50	​	​	65	​	​	84
Mortgage servicing rights mark to market (loss) gain	​	​	(525)	​	​	96	​	​	281	​	​	(1,277)	​	​	94	​	​	(238)	​	​	(964)
Mortgage servicing income	​	​	516	​	​	499	​	​	519	​	​	495	​	​	488	​	​	513	​	​	466
Net gain on sales of mortgage loans	​	​	306	​	​	398	​	​	407	​	​	366	​	​	314	​	​	468	​	​	507
Securities (losses) gains, net	​	​	(1,675)	​	​	(1,547)	​	​	(924)	​	​	(2)	​	​	1	​	​	-	​	​	(1)
Change in cash surrender value of BOLI	​	​	242	​	​	418	​	​	919	​	​	541	​	​	1,172	​	​	820	​	​	860
Death benefit realized on BOLI	​	​	-	​	​	-	​	​	-	​	​	-	​	​	-	​	​	893	​	​	12
Card related income	​	​	2,244	​	​	2,690	​	​	2,606	​	​	2,511	​	​	2,376	​	​	2,577	​	​	2,589
Other income	​	​	1,489	​	​	773	​	​	1,024	​	​	910	​	​	1,030	​	​	742	​	​	1,595
Total noninterest income	​	​	7,350	​	​	8,223	​	​	9,877	​	​	8,729	​	​	10,501	​	​	11,127	​	​	10,581
Noninterest Expense	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Salaries and employee benefits	​	​	22,248	​	​	21,798	​	​	23,115	​	​	21,405	​	​	24,312	​	​	23,424	​	​	24,676
Occupancy, furniture and equipment	​	​	3,475	​	​	3,639	​	​	3,506	​	​	3,817	​	​	3,927	​	​	3,899	​	​	3,876
Computer and data processing	​	​	1,774	​	​	1,290	​	​	1,922	​	​	2,291	​	​	2,255	​	​	2,184	​	​	2,375
FDIC insurance	​	​	584	​	​	794	​	​	744	​	​	583	​	​	667	​	​	616	​	​	632
Net teller & bill paying	​	​	502	​	​	515	​	​	534	​	​	564	​	​	521	​	​	578	​	​	570
General bank insurance	​	​	305	​	​	306	​	​	300	​	​	301	​	​	309	​	​	312	​	​	320
Amortization of core deposit intangible	​	​	624	​	​	618	​	​	616	​	​	603	​	​	580	​	​	574	​	​	570
Advertising expense	​	​	142	​	​	103	​	​	93	​	​	383	​	​	192	​	​	472	​	​	299
Card related expense	​	​	1,216	​	​	1,222	​	​	1,347	​	​	1,338	​	​	1,277	​	​	1,323	​	​	1,458
Legal fees	​	​	319	​	​	283	​	​	97	​	​	228	​	​	226	​	​	238	​	​	202
Consulting & management fees	​	​	790	​	​	520	​	​	549	​	​	556	​	​	336	​	​	797	​	​	480
Other real estate expense, net	​	​	306	​	​	(98)	​	​	(27)	​	​	218	​	​	46	​	​	(87)	​	​	242
Other expense	​	​	3,637	​	​	3,840	​	​	4,627	​	​	4,739	​	​	3,593	​	​	3,547	​	​	3,608
Total noninterest expense	​	​	35,922	​	​	34,830	​	​	37,423	​	​	37,026	​	​	38,241	​	​	37,877	​	​	39,308
Income before income taxes	​	​	32,013	​	​	34,973	​	​	32,484	​	​	24,938	​	​	28,543	​	​	29,190	​	​	29,851
Provision for income taxes	​	​	8,406	​	​	9,411	​	​	8,149	​	​	6,713	​	​	7,231	​	​	7,299	​	​	6,900
Net income	​	$	23,607	​	$	25,562	​	$	24,335	​	$	18,225	​	$	21,312	​	$	21,891	​	$	22,951
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Basic earnings per share (GAAP)	​	$	0.53	​	$	0.57	​	$	0.55	​	$	0.40	​	$	0.48	​	$	0.48	​	$	0.52
Diluted earnings per share (GAAP)	​	​	0.52	​	​	0.56	​	​	0.54	​	​	0.40	​	​	0.47	​	​	0.48	​	​	0.50
Dividends paid per share	​	​	0.05	​	​	0.05	​	​	0.05	​	​	0.05	​	​	0.05	​	​	0.05	​	​	0.05

​

​ 16

​

Reconciliation of Non-GAAP Financial Measures

The tables below provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the periods indicated. Dollar amounts below in thousands:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Quarters Ended								​
​	​	September 30,		​	June 30,		​	September 30,		​
​		2024		****	2024		​	2023		​
Net Income	​	​	​	​	​	​	​	​	​	​
Income before income taxes (GAAP)	​	$	29,851	​	$	29,190	​	$	32,484	​
Pre-tax income adjustments:	​	​	​	​	​	​	​	​	​	​
Death benefit related to BOLI	​	​	(12)	​	​	(893)	​	​	-	​
Merger related costs, net of gains on branch sales	​	​	471	​	​	-	​	​	-	​
Liquidation and deconversion costs on Visa credit card portfolio	​	​	-	​	​	-	​	​	629	​
Adjusted net income before taxes	​	​	30,310	​	​	28,297	​	​	33,113	​
Taxes on adjusted net income	​	​	7,009	​	​	7,299	​	​	8,307	​
Adjusted net income (non-GAAP)	​	$	23,301	​	$	20,998	​	$	24,806	​
​	​	​	​	​	​	​	​	​	​	​
Basic earnings per share (GAAP)	​	$	0.52	​	$	0.48	​	$	0.55	​
Diluted earnings per share (GAAP)	​	​	0.50	​	​	0.48	​	​	0.54	​
Adjusted basic earnings per share (non-GAAP)	​	​	0.52	​	​	0.46	​	​	0.55	​
Adjusted diluted earnings per share (non-GAAP)	​	​	0.51	​	​	0.46	​	​	0.55	​

​

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Quarters Ended								​
​	​	September 30,		​	June 30,		​	September 30,		​
​		2024		****	2024		​	2023		​
Net Interest Margin	​	​	​	​	​	​	​	​	​	​
Interest income (GAAP)	​	$	76,072	​	$	73,223	​	$	74,229	​
Taxable-equivalent adjustment:	​	​	​	​	​	​	​	​	​	​
Loans	​	​	11	​	​	10	​	​	11	​
Securities	​	​	343	​	​	344	​	​	354	​
Interest income (TE)	​	​	76,426	​	​	73,577	​	​	74,594	​
Interest expense (GAAP)	​	​	15,494	​	​	13,533	​	​	11,199	​
Net interest income (TE)	​	$	60,932	​	$	60,044	​	$	63,395	​
Net interest income (GAAP)	​	$	60,578	​	$	59,690	​	$	63,030	​
Average interest earning assets	​	$	5,219,160	​	$	5,216,248	​	$	5,391,761	​
Net interest margin (TE)	​	​	4.64	%	​	4.63	%	​	4.66	%
Net interest margin (GAAP)	​	​	4.62	%	​	4.60	%	​	4.64	%

​

​ 17

​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	GAAP								​	Non-GAAP								​
​	​	​	Three Months Ended							​	​	Three Months Ended							​
​	​	September 30,		​	June 30,		​	September 30,		​	September 30,		​	June 30,		​	September 30,		​
​	​	2024		​	2024		​	2023		​	2024		​	2024		​	2023		​
Efficiency Ratio / Adjusted Efficiency Ratio	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Noninterest expense	​	$	39,308	​	$	37,877	​	$	37,423	​	$	39,308	​	$	37,877	​	$	37,423	​
Less amortization of core deposit	​	​	570	​	​	574	​	​	616	​	​	570	​	​	574	​	​	616	​
Less other real estate expense, net	​	​	242	​	​	(87)	​	​	(27)	​	​	242	​	​	(87)	​	​	(27)	​
Less merger related costs, net of gains on branch sales	​	​	N/A	​	​	N/A	​	​	N/A	​	​	471	​	​	-	​	​	-	​
Less liquidation and deconversion costs on Visa credit card portfolio	​	​	N/A	​	​	N/A	​	​	N/A	​	​	-	​	​	-	​	​	629	​
Noninterest expense less adjustments	​	$	38,496	​	$	37,390	​	$	36,834	​	$	38,025	​	$	37,390	​	$	36,205	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income	​	$	60,578	​	$	59,690	​	$	63,030	​	$	60,578	​	$	59,690	​	$	63,030	​
Taxable-equivalent adjustment:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans	​	​	N/A	​	​	N/A	​	​	N/A	​	​	11	​	​	10	​	​	11	​
Securities	​	​	N/A	​	​	N/A	​	​	N/A	​	​	343	​	​	344	​	​	354	​
Net interest income including adjustments	​	​	60,578	​	​	59,690	​	​	63,030	​	​	60,932	​	​	60,044	​	​	63,395	​
Noninterest income	​	​	10,581	​	​	11,127	​	​	9,877	​	​	10,581	​	​	11,127	​	​	9,877	​
Less death benefit related to BOLI	​	​	12	​	​	893	​	​	-	​	​	12	​	​	893	​	​	-	​
Less securities losses	​	​	(1)	​	​	-	​	​	(924)	​	​	(1)	​	​	-	​	​	(924)	​
Less MSRs mark to market (losses) gains	​	​	(964)	​	​	(238)	​	​	281	​	​	(964)	​	​	(238)	​	​	281	​
Taxable-equivalent adjustment:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Change in cash surrender value of BOLI	​	​	N/A	​	​	N/A	​	​	N/A	​	​	232	​	​	456	​	​	245	​
Noninterest income (excluding) / including adjustments	​	​	11,534	​	​	10,472	​	​	10,520	​	​	11,766	​	​	10,928	​	​	10,765	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income including adjustments plus noninterest income (excluding) / including adjustments	​	$	72,112	​	$	70,162	​	$	73,550	​	$	72,698	​	$	70,972	​	$	74,160	​
Efficiency ratio / Adjusted efficiency ratio	​	​	53.38	%	​	53.29	%	​	50.08	%	​	52.31	%	​	52.68	%	​	48.82	%

​

N/A - Not applicable.

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Quarters Ended								​
​	​	September 30,		​	June 30,		​	September 30,		​
​	​	2024			2024		​	2023		​
Return on Average Tangible Common Equity Ratio	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Net income (GAAP)	​	$	22,951	​	$	21,891	​	$	24,335	​
​	​	​	​	​	​	​	​	​	​	​
Income before income taxes (GAAP)	​	$	29,851	​	$	29,190	​	$	32,484	​
Pre-tax income adjustments:	​	​	​	​	​	​	​	​	​	​
Amortization of core deposit intangibles	​	​	570	​	​	574	​	​	616	​
Net income, excluding intangibles amortization, before taxes	​	​	30,421	​	​	29,764	​	​	33,100	​
Taxes on net income, excluding intangible amortization, before taxes	​	​	7,032	​	​	7,443	​	​	8,304	​
Net income, excluding intangibles amortization (non-GAAP)	​	$	23,389	​	$	22,321	​	$	24,796	​
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​	​	​	​	​	​	​	​	​	​	​
Total Average Common Equity	​	$	639,151	​	​	605,253	​	$	530,048	​
Less Average goodwill and intangible assets	​	​	96,245	​	​	96,817	​	​	98,596	​
Average tangible common equity (non-GAAP)	​	$	542,906	​	$	508,436	​	$	431,452	​
​	​	​	​	​	​	​	​	​	​	​
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Return on average common equity (GAAP)	​	​	14.29	%	​	14.55	%	​	18.21	%
Return on average tangible common equity (non-GAAP)	​	​	17.14	%	​	17.66	%	​	22.80	%

​ 18

Exhibit 99.2

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	Old Second Bancorp, Inc. Loan Portfolio Disclosures As of June 30, 2020

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Loan Portfolio Composition Loan Portfolio Characteristics Balance Outstanding (000’s) $2,052,336 Total Commitment (000’s) $2,539,355 Average Loan Commitment $352,024 Number of Payment Deferrals /Modifications 449 Payment Modification Rate (% of Total Commitment)* 9.03% Loan Portfolio Characteristics • Lending focused on full relationship, small and middle market businesses • Well diversified by industry with minimal exposure to high risk industries • Repayment analysis based on primary operating cash flow, supported by secondary and tertiary repayment sources • Full global cash flow and sensitivity analysis performed on all relationships over $1 million in exposure • Dedicated Leasing, C&I, CRE, Healthcare and Professional Service lending teams Commercial & Industrial 28% Construction 6% CRE Investor 21% CRE Owner- Occupied Farm Land 13% 1% Residential Investor 3% Residential Owner-Occupied 5% HELOC 10% Leasing 5% Multifamily 8% Loan Type IL 81% CA 2% NY 2% WI 4% MI 2% MA 1% Other States 8% Geography* *Based on primary property collateral if available, otherwise borrower address. *Excludes $133.89 million in PPP loans

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Commercial and Industrial (includes Leasing) Commercial and Industrial Portfolio Characteristics Balance Outstanding (000’s) $574,935 Total Commitment (000’s) $838,075 Average Loan Commitment $351,247 Number of Payment Deferrals /Modifications 164 Payment Modification Rate (% of Total Commitment)* 6.16%* Weighted Average Seasoning 3.50 years Commercial and Industrial Portfolio Characteristics • Lending focused on full relationship, small and middle market businesses • Well diversified by industry with limited exposure to Accommodation and Food Services and Entertainment industries • Repayment analysis based on primary operating cash flow, supported by secondary and tertiary repayment sources • Full global cash flow and sensitivity analysis performed on all relationships over $1 million in exposure • Dedicated Leasing, C&I, Healthcare and Professional Service lending teams • Modest exposure to syndicated or leveraged loans DuPage County (IL) 11% Kane County (IL) 26% Kendall County (IL) 2% Cook County (IL) 23% Will County (IL) 7% IL Other 2% CA 2% MA 3% MI 3% NY 6% TX 2% WI 2% Other States 11% Geography* *Based on primary property collateral if available, otherwise borrower address. Accomodation and Food Services 2% Agriculture 3% Health Care 8% Information and Finance 13% Manufacturing 18% Administration and Support 2% Construction 15% Other Services 2% Professional Services 6% Rental and Leasing 7% Retail Trade 4% Transportation and Warehousing 6% Wholesale Trade 13% Industry *Excludes $133.89 million in PPP loans

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CRE Owner-Occupied CRE Owner-Occupied Portfolio Characteristics Balance Outstanding (000’s) $343,982 Total Commitment (000’s) $357,453 Average Loan Commitment $549,928 Number of Payment Deferrals /Modifications 72 Payment Modification Rate (% of Total Commitment) 15.97% Weighted Average Seasoning 6.13 years Commercial and Industrial Portfolio Characteristics • Lending focused on full relationship, small and middle market businesses • Well diversified by industry with limited exposure to the Accommodation and Food Service and Entertainment industries • Repayment analysis based on primary operating cash flow, supported by secondary and tertiary repayment sources • Full global cash flow and sensitivity analysis performed on all relationships over $1 million in exposure • Dedicated C&I, Healthcare and Professional Service lending teams DuPage County (IL) 14% Kane County (IL) 28% Kendall County (IL) 5% Cook County (IL) 32% Will County (IL) 17% IL Other 2% Out of State 2% Geography* *Based on primary property collateral if available, otherwise borrower address. Accomodation and Food Services 3% Agriculture 3% Entertainment 7% Education 3% Health Care 9% Information and Finance 1% Manufacturing 10% Administration and Support 1% Construction 4% Other Services 23% Professional Services 4% Rental and Leasing 9% Retail Trade 18% Transportation and Warehousing 1% Wholesale Trade 3% Industry

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CRE Investor (includes Multifamily) CRE Investor Portfolio Characteristics Balance Outstanding (000’s) $723,235 Total Commitment (000’s) $735,069 Average Loan Commitment $1,287,336 Number of Payment Deferrals /Modifications 56 Payment Modification Rate (% of Total Commitment) 11.22% Weighted Average Seasoning 4.41 years CRE Investor Portfolio Characteristics • Lending focused on full relationship and strong sponsorship • Well diversified by property type with limited exposure to high-risk real estate sectors (Hotel, Restaurant, Recreational and “Big Box” Retail) • Repayment analysis based on strong net operating income, supported by secondary and tertiary repayment sources • Full global cash flow and sensitivity analysis performed on all relationships over $1 million in exposure • Secured by seasoned properties with stabilized cash flow • Dedicated CRE and Healthcare lending teams Hotel 2% Industrial 13% Medical Office 2% Mini Storage 2% Mixed-Use 3% Office 16% Restaurant 2% Retail 15% Senior Housing 14% Multifamily 27% National Drugstore Chain 4% CRE Type DuPage County (IL) 12% Kane County (IL) 8% Cook County (IL) 47% Will County (IL) 7% IL Other 5% WI 8% MI 3% OH 2% CA 2% Other States 6% Geography* *Based on primary property collateral if available, otherwise borrower address.

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