8-K - OSBC - Equibles

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): January 22, 2025

(Exact name of registrant as specified in its charter)


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

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:

<br><br>
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	OSBC	The Nasdaq Stock Market

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. ☐

Item 2.02 Results of Operations and Financial Condition

On January 22, 2025, Old Second Bancorp, Inc. (the “Company’s”) issued a press release announcing its financial results for the fourth quarter ended December 31, 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.

Item 9.01 Financial Statements and Exhibits


Exhibit No.		Description
99.1		Press Release of Old Second Bancorp, Inc. dated January 22, 2025

99.2		Loan Portfolio Disclosures for Old Second Bancorp, Inc. dated December 31, 2024

104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

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.


	OLD SECOND BANCORP, INC.


Dated: January 22, 2025	By:	/s/ Bradley S. Adams
		Bradley S. Adams
		Executive Vice President,
		Chief Operating Officer and
		Chief Financial Officer

Old Second Bancorp, Inc



(NASDAQ:OSBC)		Exhibit 99.1

Contact:	Bradley S. Adams	For Immediate Release
	Chief Financial Officer	January 22, 2025
	(630) 906-5484

Old Second Bancorp, Inc. Reports Fourth Quarter 2024 Net Income of $19.1 Million,

or $0.42 per Diluted Share

AURORA, IL, January 22, 2025 – 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 fourth quarter of 2024. Our net income was $19.1 million, or $0.42 per diluted share, for the fourth quarter of 2024, compared to net income of $23.0 million, or $0.50 per diluted share, for the third quarter of 2024, and net income of $18.2 million, or $0.40 per diluted share, for the fourth quarter of 2023. Adjusted net income, a non-GAAP financial measure that excludes certain nonrecurring items, as applicable, was $20.3 million, or $0.44 per diluted share, for the fourth quarter of 2024, compared to $23.3 million, or $0.51 per diluted share, for the third quarter of 2024, and $19.1 million, or $0.42 per diluted share, for the fourth quarter of 2023. The adjusting item impacting the fourth quarter of 2024 included $1.5 million of transaction-related expenses due to the early December 2024 purchase of five branches from First Merchants Bank (“FRME”). The adjusting items impacting the third quarter of 2024 included $471,000 of FRME transaction-related expenses; the adjusting items impacting the fourth quarter of 2023 results included $1.2 million of nonrecurring litigation expense. 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.

Net income decreased $3.8 million in the fourth quarter of 2024 compared to the third quarter of 2024. The decrease was primarily due to a $1.5 million increase in provision for credit losses, as well as a $5.0 million increase in noninterest expense in the fourth quarter of 2024, compared to the prior linked quarter. These reductions to the current quarter’s net income were partially offset by a $1.0 million increase in net interest and dividend income and a $1.0 million increase in noninterest income. Net income increased $885,000 in the fourth quarter of 2024 compared to the fourth quarter of 2023, primarily due to a decrease of $4.5 million in provision for credit losses, an increase in noninterest income of $2.9 million, and an increase in net interest income of $349,000. The year over year fourth quarter increase is partially offset by a $7.3 million increase in noninterest expenses.

Operating Results

●	Fourth quarter 2024 net income was $19.1 million, reflecting a $3.8 million decrease from the third quarter of 2024, and an increase of $885,000 from the fourth quarter of 2023. Adjusted net income, as defined above, was $20.3 million for the fourth quarter of 2024, a decrease of $3.0 million from adjusted net income for the third quarter of 2024, and an increase of $1.2 million from adjusted net income for the fourth quarter of 2023.
●	Net interest and dividend income was $61.6 million for the fourth quarter of 2024, reflecting an increase of $1.0 million, or 1.7%, from the third quarter of 2024, and an increase of $349,000, or 0.6%, from the fourth quarter of 2023.
---	---
●	We recorded a net provision for credit losses of $3.5 million in the fourth quarter of 2024 compared to a net provision for credit losses of $2.0 million in the third quarter of 2024, and a net provision for credit losses of $8.0 million in the fourth quarter of 2023.
---	---
●	Noninterest income was $11.6 million for the fourth quarter of 2024, an increase of $1.0 million, or 9.7%, compared to $10.6 million for the third quarter of 2024, and an increase of $2.9 million, or 33.0%, compared to $8.7 million for the fourth quarter of 2023.
---	---
●	Noninterest expense was $44.3 million for the fourth quarter of 2024, an increase of $5.0 million, or 12.8%, compared to $39.3 million for the third quarter of 2024, and an increase of $7.3 million, or 19.7%, compared to $37.0 million for the fourth quarter of 2023.
---	---

●	We had a provision for income tax of $6.3 million for the fourth quarter of 2024, compared to a provision for income tax of $6.9 million for the third quarter of 2024 and a provision for income tax of $6.7 million for the fourth quarter of 2023. The effective tax rate for each of the periods presented was 24.7%, 23.1%, and 26.9%, respectively. The reduction in the effective tax rate in the third and fourth quarters of 2024, compared to the fourth quarter of 2023, reflects the new state ruling regarding tax rate apportionment factors related to income generated from securities or loans originated in other states.
●	On January 21, 2025, our Board of Directors declared a cash dividend of $0.06 per share of common stock, payable on February 10, 2025, to stockholders of record as of January 31, 2025.
---	---

●

We had a provision for income tax of $6.3 million for the fourth quarter of 2024, compared to a provision for income tax of $6.9 million for the third quarter of 2024 and a provision for income tax of $6.7 million for the fourth quarter of 2023. The effective tax rate for each of the periods presented was 24.7%, 23.1%, and 26.9%, respectively. The reduction in the effective tax rate in the third and fourth quarters of 2024, compared to the fourth quarter of 2023, reflects the new state ruling regarding tax rate apportionment factors related to income generated from securities or loans originated in other states.

●

On January 21, 2025, our Board of Directors declared a cash dividend of $0.06 per share of common stock, payable on February 10, 2025, to stockholders of record as of January 31, 2025.

---

Financial Highlights


	Quarters Ended
(Dollars in thousands)	December 31,			September 30,			December 31,
	2024			2024			2023
Balance sheet summary
Total assets	$	5,649,377		$	5,671,760		$	5,722,799
Total securities available-for-sale		1,161,701			1,190,854			1,192,829
Total loans		3,981,336			3,991,078			4,042,953
Total deposits		4,768,731			4,465,424			4,570,746
Total liabilities		4,978,343			5,010,370			5,145,518
Total equity		671,034			661,390			577,281

Total tangible assets	$	5,534,086		$	5,575,789		$	5,625,104
Total tangible equity		555,743			565,419			479,586

Income statement summary
Net interest income	$	61,584		$	60,578		$	61,235
Provision for credit losses		3,500			2,000			8,000
Noninterest income		11,610			10,581			8,729
Noninterest expense		44,322			39,308			37,026
Net income		19,110			22,951			18,225
Effective tax rate		24.68	%		23.11	%		26.92	%

Profitability ratios
Return on average assets (ROAA)		1.34	%		1.63	%		1.27	%
Return on average equity (ROAE)		11.38			14.29			13.18
Net interest margin (tax-equivalent)		4.68			4.64			4.62
Efficiency ratio		57.12			53.38			50.82
Return on average tangible common equity (ROATCE) ^1^		13.79			17.14			16.43
Tangible common equity to tangible assets (TCE/TA)		10.04			10.14			8.53

Per share data
Diluted earnings per share	$	0.42		$	0.50		$	0.40
Tangible book value per share		12.38			12.61			10.73

Company capital ratios^2^
Common equity tier 1 capital ratio		12.82	%		12.86	%		11.37	%
Tier 1 risk-based capital ratio		13.34			13.39			11.89
Total risk-based capital ratio		15.54			15.62			14.06
Tier 1 leverage ratio		11.30			11.38			10.06

Bank capital ratios ^2, 3^
Common equity tier 1 capital ratio		12.89	%		13.49	%		12.32	%
Tier 1 risk-based capital ratio		12.89			13.49			12.32
Total risk-based capital ratio		13.82			14.45			13.24
Tier 1 leverage ratio		10.90			11.46			10.41

^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.

^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.

^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.

Chairman, President and Chief Executive Officer Jim Eccher said “Old Second reported strong results in the fourth quarter of 2024 with exceptional profitability and positive trends in a number of verticals. Tangible book value per share increased by more than fifteen percent on a year over year basis inclusive of the dilution associated with a branch purchase transaction in the fourth quarter. We believe we are being proactive in addressing commercial loans facing deterioration from higher interest rates, declining appraisal values and cash flow pressures. Importantly, classified and criticized loans have declined meaningfully both year over year and linked quarter and are now at their lowest levels since June 2022. We have seen previously identified loans work toward resolution and the pace of upgrades relative to downgrades has improved dramatically. Losses realized in the fourth quarter in both the loan portfolio and in OREO write downs drive the expectation of further meaningful reduction in nonperforming assets early in 2025. Exceptional profitability has afforded Old Second the opportunity to aggressively address problem acquired credits and position us to deliver improved performance in 2025. Fourth quarter return on average assets and return on average tangible common equity were 1.34% and 13.79%, respectively, the tax equivalent net interest margin was stable at 4.68% and the efficiency ratio is a very healthy 57.12%. This strong bottom-line performance and a well-positioned balance sheet drove an increase in the tangible common equity capital ratio to 10.04% from 8.53% last year end, in light of the strength of the balance sheet and resilient income statement and margin trends. 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 we believe will come our way in the near future.”

Asset Quality & Earning Assets

●	Nonperforming loans, comprised of nonaccrual loans plus loans past due 90 days or more and still accruing, totaled $30.3 million at December 31, 2024, $52.3 million at September 30, 2024, and $68.8 million at December 31, 2023. Nonperforming loans, as a percent of total loans, were 0.8% at December 31, 2024, 1.3% at September 30, 2024, and 1.7% at December 31, 2023. The decrease in the fourth quarter of 2024 for nonperforming loans is driven by net nonaccrual loans outflows of $23.3 million, partially offset by $1.3 million of net inflows of loans past due 90 days or more and still accruing. Nonaccrual loan outflows consist of $8.9 million paid off, largely driven by one commercial real estate – investor loan of $6.6 million, a $13.0 million commercial real estate – owner occupied relationship transferred to OREO, $8.3 million of partial principal reductions from payments, and $3.2 million of upgrades. The nonaccrual outflows were partially offset by additions of $10.0 million, primarily driven by one large commercial real estate – owner occupied relationship.
●	Total loans were $3.98 billion at December 31, 2024, reflecting a decrease of $9.7 million compared to September 30, 2024, and a decrease of $61.6 million compared to December 31, 2023. The decrease year over year was largely driven by the declines in commercial, commercial real estate-owner occupied and multifamily portfolios. Average loans (including loans held-for-sale) for the fourth quarter of 2024 totaled $4.00 billion, reflecting an increase of $36.3 million from the third quarter of 2024, and a decrease of $13.4 million from the fourth quarter of 2023.
---	---
●	Available-for-sale securities totaled $1.16 billion at December 31, 2024, compared to $1.19 billion at September 30, 2024 and December 31, 2023. The unrealized mark to market loss on securities totaled $68.6 million as of December 31, 2024, compared to $56.2 million as of September 30, 2024, and $84.2 million as of December 31, 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 December 31, 2024, we had security purchases of $84.9 million, and security maturities, calls and paydowns of $101.2 million, compared to security purchases of $22.7 million and security calls and paydowns of $31.3 million during the quarter ended September 30, 2024. During the quarter ended December 31, 2023, we had security purchases of $9.2 million and $81.6 million of maturities, calls, and paydowns, which resulted in net realized losses of $2,000. We may continue to buy and sell strategically identified securities as opportunities arise.
---	---

Net Interest Income


Analysis of Average Balances,
Tax Equivalent Income / Expense and Rates
(Dollars in thousands - unaudited)

	Quarters Ended
	December 31, 2024						September 30, 2024						December 31, 2023
	Average			Income /		Rate	Average			Income /		Rate	Average			Income /		Rate
	Balance			Expense		%	Balance			Expense		%	Balance			Expense		%
Assets
Interest earning deposits with financial institutions	$	49,757		$	542	4.33	$	48,227		$	616	5.08	$	47,865		$	616	5.11
Securities:
Taxable		1,017,530			8,899	3.48		1,010,379			9,113	3.59		1,027,366			8,329	3.22
Non-taxable (TE)^1^		162,494			1,614	3.95		163,569			1,634	3.97		164,655			1,674	4.03
Total securities (TE)^1^		1,180,024			10,513	3.54		1,173,948			10,747	3.64		1,192,021			10,003	3.33
FHLBC and FRBC Stock		27,493			562	8.13		30,268			497	6.53		34,371			647	7.47
Loans and loans held-for-sale^1, 2^		4,003,041			64,012	6.36		3,966,717			64,566	6.48		4,016,480			62,793	6.20
Total interest earning assets		5,260,315			75,629	5.72		5,219,160			76,426	5.83		5,290,737			74,059	5.55
Cash and due from banks		54,340			-	-		54,279			-	-		57,723			-	-
Allowance for credit losses on loans		(45,040)			-	-		(42,683)			-	-		(50,023)			-	-
Other noninterest bearing assets		395,043			-	-		384,386			-	-		396,297			-	-
Total assets	$	5,664,658					$	5,615,142					$	5,694,734

Liabilities and Stockholders' Equity
NOW accounts	$	573,271		$	644	0.45	$	553,906		$	714	0.51	$	563,603		$	595	0.42
Money market accounts		722,491			3,128	1.72		693,315			3,260	1.87		692,720			2,200	1.26
Savings accounts		899,846			880	0.39		895,086			886	0.39		985,614			517	0.21
Time deposits		692,001			5,606	3.22		651,663			5,539	3.38		497,472			2,833	2.26
Interest bearing deposits		2,887,609			10,258	1.41		2,793,970			10,399	1.48		2,739,409			6,145	0.89
Securities sold under repurchase agreements		39,982			75	0.75		45,420			93	0.81		28,526			51	0.71
Other short-term borrowings		204,783			2,527	4.91		305,489			4,185	5.45		390,652			5,429	5.51
Junior subordinated debentures		25,773			289	4.46		25,773			270	4.17		25,773			290	4.46
Subordinated debentures		59,457			546	3.65		59,436			547	3.66		59,372			546	3.65
Senior notes		-			-	-		-			-	-		-			-	-
Notes payable and other borrowings		-			-	-		-			-	-		-			-	-
Total interest bearing liabilities		3,217,604			13,695	1.69		3,230,088			15,494	1.91		3,243,732			12,461	1.52
Noninterest bearing deposits		1,712,106			-	-		1,691,450			-	-		1,838,325			-	-
Other liabilities		67,067			-	-		54,453			-	-		63,971			-	-
Stockholders' equity		667,881			-	-		639,151			-	-		548,706			-	-
Total liabilities and stockholders' equity	$	5,664,658					$	5,615,142					$	5,694,734
Net interest income (GAAP)				$	61,584					$	60,578					$	61,235
Net interest margin (GAAP)						4.66						4.62						4.59

Net interest income (TE)^1^				$	61,934					$	60,932					$	61,598
Net interest margin (TE)^1^						4.68						4.64						4.62
Interest bearing liabilities to earning assets		61.17	%					61.89	%					61.31	%

^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 provide 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 income of $140,000 for the fourth quarter of 2024, loan fee expense of $155,000 for the third quarter of 2024, and loan fee expense of $922,000 for the fourth quarter of 2023. Nonaccrual loans are included in the above stated average balances.

The decreased yield of 11 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.

The year over year increase of 17 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 $12.0 million in the fourth quarter of 2024 compared to the prior year like quarter, while the tax equivalent yield on the securities available for sale portfolio increased 21 basis points year over year due to variable security rate resets.

Average balances of interest-bearing deposit accounts have increased moderately since the third quarter of 2024 through the fourth quarter of 2024, from $2.79 billion to $2.89 billion, as NOW, money market, savings, and time account average balances all increased due to the deposits acquired from the FRME branch purchase. We have continued to control the cost of funds over the periods reflected by slowing the pace of change with the rate of overall interest-bearing deposits decreasing to 141 basis points for the quarter ended December 31, 2024, from 148 basis points for the quarter ended September 30, 2024, but the cost of deposits increased from 89 basis points for the quarter ended December 31, 2023. A 15 basis point decrease in the cost of money market funds for the quarter ended December 31, 2024 compared to the prior linked quarter, and a 46 basis point increase compared to the prior year like quarter, drove a significant portion of the overall decrease from the prior linked quarter and the increase from the prior year like quarter. Although there was an increase in transactional account average balances from the prior year like quarter for NOW and savings accounts, average rates paid on these combined balances remained relatively steady. Average rates paid on time deposits for the quarter ended December 31, 2024 decreased by 16 basis points and increased 96 basis points in the quarter over linked quarter and year over year quarters, respectively, primarily due to CD rate specials that were offered.

Borrowing costs decreased in the fourth quarter of 2024, compared to the third quarter of 2024, primarily due to the $100.7 million decrease in average other short-term borrowings stemming from a decrease in average daily FHLB advances over the prior linked quarter as a majority of this borrowing was paid down in December 2024. The decrease of $185.9 million year over year of average FHLB advances was based on daily liquidity needs, and was the primary driver of the $2.9 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. Our net interest margin (GAAP) increased four basis points to 4.66% for the fourth quarter of 2024, compared to 4.62% for the third quarter of 2024, and increased seven basis points compared to 4.59% for the fourth quarter of 2023. Our net interest margin (TE) increased four basis points to 4.68% for the fourth quarter of 2024, compared to 4.64% for the third quarter of 2024, and increased six basis points compared to 4.62% for the fourth quarter of 2023. The increase in the fourth quarter of 2024, compared to the prior linked quarter, was driven by market interest rates as well as the composition of assets and liabilities. Although interest income and expense both decreased compared to the prior linked quarter, interest expense decreased at a higher rate leading to increased net interest income. The net interest margin increased in the fourth quarter of 2024, compared to the prior year like quarter, primarily due to higher security and loan yields on lower average balances, partially offset by the 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.

Noninterest Income


										4th Quarter 2024
Noninterest Income	Three Months Ended									Percent Change From
(Dollars in thousands)	December 31,			September 30,			December 31,			September 30,		December 31,
	2024		****	2024		****	2023		****	2024	****	2023
Wealth management	$	3,299		$	2,787		$	2,600		18.4		26.9
Service charges on deposits		2,657			2,646			2,527		0.4		5.1
Residential mortgage banking revenue
Secondary mortgage fees		88			84			58		4.8		51.7
MSRs mark to market gain (loss)		385			(964)			(1,277)		139.9		130.1
Mortgage servicing income		475			466			495		1.9		(4.0)
Net gain on sales of mortgage loans		516			507			366		1.8		41.0
Total residential mortgage banking revenue		1,464			93			(358)		N/M		(508.9)
Securities losses, net		-			(1)			(2)		(100.0)		(100.0)
Change in cash surrender value of BOLI		767			860			541		(10.8)		41.8
Death benefit realized on BOLI		-			12			-		(100.0)		N/M
Card related income		2,572			2,589			2,511		(0.7)		2.4
Other income		851			1,595			910		(46.6)		(6.5)
Total noninterest income	$	11,610		$	10,581		$	8,729		9.7		33.0

N/M - Not meaningful.

Noninterest income increased $1.0 million, or 9.7%, in the fourth quarter of 2024, compared to the third quarter of 2024, and increased $2.9 million, or 33.0%, compared to the fourth quarter of 2023. The increase from the third quarter of 2024 was primarily driven by a $1.4 million increase in residential mortgage banking revenue due to an increase of $1.3 million in MSRs mark to market valuation. Also contributing to the increase during the quarter was a $512,000 increase in wealth management income primarily due to growth in estate fees. Partially offsetting the increase in noninterest income from the prior quarter was a $744,000 decrease in other income primarily due to various refunds and incentive bonuses received in the third quarter of 2024.

The increase in noninterest income of $2.9 million in the fourth quarter of 2024, compared to the fourth quarter of 2023, is primarily due to a $1.8 million increase in residential mortgage banking revenue mainly due to a $1.7 million increase in MSRs mark to market valuations, a $699,000 increase in wealth management income primarily due to growth in advisory fees and estate fees, and a $226,000 increase in the cash surrender value of BOLI.

Noninterest Expense


										4th Quarter 2024
Noninterest Expense	Three Months Ended									Percent Change From
(Dollars in thousands)	December 31,			September 30,			December 31,			September 30,		December 31,
	2024		****	2024		****	2023		****	2024	****	2023
Salaries	$	18,130		$	17,665		$	16,738		2.6		8.3
Officers' incentive		3,089			2,993			1,450		3.2		113.0
Benefits and other		4,394			4,018			3,217		9.4		36.6
Total salaries and employee benefits		25,613			24,676			21,405		3.8		19.7
Occupancy, furniture and equipment expense		4,457			3,876			3,817		15.0		16.8
Computer and data processing		2,659			2,375			2,291		12.0		16.1
FDIC insurance		628			632			583		(0.6)		7.7
Net teller & bill paying		575			570			564		0.9		2.0
General bank insurance		327			320			301		2.2		8.6
Amortization of core deposit intangible asset		716			570			603		25.6		18.7
Advertising expense		280			299			383		(6.4)		(26.9)
Card related expense		1,497			1,458			1,338		2.7		11.9
Legal fees		660			202			228		226.7		189.5
Consulting & management fees		883			480			556		84.0		58.8
Other real estate owned expense, net		2,019			242			218		734.3		826.1
Other expense		4,008			3,608			4,739		11.1		(15.4)
Total noninterest expense	$	44,322		$	39,308		$	37,026		12.8		19.7
Efficiency ratio (GAAP)^1^		57.12	%		53.38	%		50.82	%
Adjusted efficiency ratio (non-GAAP)^2^		54.61	%		52.31	%		48.76	%

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, and acquisition expenses, 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 fourth quarter of 2024 increased $5.0 million, or 12.8%, compared to the third quarter of 2024, and increased $7.3 million, or 19.7%, compared to the fourth quarter of 2023. The increase in the fourth quarter of 2024 compared to the third quarter of 2024, was attributable to a $937,000 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 utilizing measures previously approved by our compensation committee, deferred executive compensation due to changes in market interest rates, and increases in salaries based on increased base salary rates. Also contributing to the increase in noninterest expense in the fourth quarter of 2024 was a $581,000 increase in occupancy, furniture and equipment, a $284,000 increase in computer and data processing expenses, a $403,000 increase in consulting & management fees, and a $400,000 increase in other expenses, all due to transaction-related costs incurred related to our purchase of five bank branches from FRME. Other notable increases during the quarter consisted of a $458,000 increase in legal fees due to loan related legal costs, and a $1.8 million increase in other real estate owned expense, net, as a $1.7 million OREO valuation reserve expense was recorded based on valuation write downs on two of our OREO properties.

The year over year increase in noninterest expense is primarily attributable to a $4.2 million increase in salaries and employee benefits, primarily due to increases in annual base salary rates, officers’ incentives, and deferred employee compensation due to market interest rate changes. Also contributing to the increase was a $640,000 increase in occupancy, furniture and equipment, a $368,000 increase in computer and data processing, and a $327,000 increase in consulting & management fees, all primarily due to transaction-related costs incurred related to our branch purchase from FRME. Other increases year over year were a $432,000 increase in legal fees due to loan related legal costs, and a $1.8 million increase in other real estate owned expense, net, as a $1.7 million OREO valuation reserve expense was recorded based on valuation write downs on two of our OREO properties. Partially offsetting the increases in noninterest expense in the fourth quarter of 2024, compared to the fourth quarter of 2023, was a $731,000 decrease in other expenses primarily due to a $1.2 million litigation expense recorded in the fourth quarter of 2023 related to an overdraft case, which was settled in 2025 at the total that was originally accrued in 2023.

Earning Assets


							December 31, 2024
Loans	As of						Percent Change From
(Dollars in thousands)	December 31,		September 30,		December 31,		September 30,		December 31,
	2024		2024		2023		2024	****	2023
Commercial	$	800,476	$	814,668	$	841,697	(1.7)		(4.9)
Leases		491,748		458,317		398,223	7.3		23.5
Commercial real estate – investor		1,078,829		1,045,060		1,034,424	3.2		4.3
Commercial real estate – owner occupied		683,283		718,265		796,538	(4.9)		(14.2)
Construction		201,716		206,458		165,380	(2.3)		22.0
Residential real estate – investor		49,598		50,332		52,595	(1.5)		(5.7)
Residential real estate – owner occupied		206,949		208,227		226,248	(0.6)		(8.5)
Multifamily		351,325		375,394		401,696	(6.4)		(12.5)
HELOC		103,388		102,611		103,237	0.8		0.1
Other^1^		14,024		11,746		22,915	19.4		(38.8)
Total loans	$	3,981,336	$	3,991,078	$	4,042,953	(0.2)		(1.5)

^1^Other class includes consumer loans and overdrafts.

Total loans decreased by $9.7 million at December 31, 2024, compared to September 30, 2024, and decreased $61.6 million for the year over year period. The decrease in total loans in the fourth quarter of 2024 compared to the prior linked quarter was due to increased paydowns, net of originations, over the fourth quarter, primarily in commercial real estate-owner occupied and multifamily loans, and increased transfers into OREO for $13.0 million. The year over year reduction in loans is primarily due to paydowns, net of originations, in commercial real estate – owner occupied of $113.3 million, commercial of $41.2 million, multifamily of $50.4 million, partially offset by lease originations, net of paydowns, of $93.5 million, commercial real estate – investor loan growth of $44.4 million and construction loan growth of $36.3 million. Increases were noted in the leases segment in the fourth 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.


										December 31, 2024
Securities		As of								Percent Change From
(Dollars in thousands)		December 31,			September 30,			December 31,		September 30,		December 31,
	****	2024		****	2024		****	2023		2024	****	2023
Securities available-for-sale, at fair value
U.S. Treasury		$	194,143		$	194,188		$	169,574	(0.0)		14.5
U.S. government agencies			37,814			37,976			56,959	(0.4)		(33.6)
U.S. government agency mortgage-backed			100,277			96,413			106,370	4.0		(5.7)
States and political subdivisions			215,456			224,795			227,065	(4.2)		(5.1)
Collateralized mortgage obligations			368,616			384,271			392,544	(4.1)		(6.1)
Asset-backed securities			62,303			63,947			68,436	(2.6)		(9.0)
Collateralized loan obligations			183,092			189,264			171,881	(3.3)		6.5
Total securities available-for-sale		$	1,161,701		$	1,190,854		$	1,192,829	(2.4)		(2.6)

Our securities available-for-sale portfolio totaled $1.16 billion as of December 31, 2024, reflecting a decrease of $29.2 million from September 30, 2024, and a decrease of $31.1 million since December 31, 2023. The portfolio’s decrease in the fourth quarter of 2024, compared to the prior quarter-end, was due to $101.2 million in maturities, calls, and paydowns, as well as an increase in unrealized losses of $12.4 million, partially offset by $84.9 million in purchases. Net unrealized losses at December 31, 2024 were $68.6 million, compared to $56.2 million at September 30, 2024 and $84.2 million at December 31, 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.

Asset Quality


										December 31, 2024
Nonperforming assets	As of									Percent Change From
(Dollars in thousands)	December 31,			September 30,			December 31,			September 30,	December 31,
	2024		****	2024		****	2023		****	2024	2023
Nonaccrual loans	$	28,851		$	52,171		$	67,583		(44.7)	(57.3)
Loans past due 90 days or more and still accruing interest		1,436			109			1,196		N/M	20.1
Total nonperforming loans		30,287			52,280			68,779		(42.1)	(56.0)
Other real estate owned		21,617			8,202			5,123		163.6	322.0
Total nonperforming assets	$	51,904		$	60,482		$	73,902		(14.2)	(29.8)



30-89 days past due loans and still accruing interest	$	11,702		$	28,480		$	13,668
Nonaccrual loans to total loans		0.7	%		1.3	%		1.7	%
Nonperforming loans to total loans		0.8	%		1.3	%		1.7	%
Nonperforming assets to total loans plus OREO		1.3	%		1.5	%		1.8	%
Purchased credit-deteriorated loans to total loans		0.4	%		0.4	%		1.4	%

Allowance for credit losses	$	43,619		$	44,422		$	44,264
Allowance for credit losses to total loans		1.1	%		1.1	%		1.1	%
Allowance for credit losses to nonaccrual loans		151.2	%		85.1	%		65.5	%

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 $15.0 million, net of purchase accounting adjustments, at December 31, 2024. No PCD loans were acquired with our FRME branch acquisition. PCD loans that meet the definition of nonperforming loans are included in our nonperforming disclosures. Nonperforming loans to total loans was 0.8% as of December 31, 2024, 1.3% as of September 30, 2024, and 1.7% as of December 31, 2023. Nonperforming assets to total loans plus OREO was 1.3% as of December 31, 2024, 1.5% as of September 30, 2024, and 1.8% as of December 31, 2023. Our allowance for credit losses to total loans was 1.1% as of December 31, 2024, September 30, 2024, and December 31, 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.


										December 31, 2024
Classified loans		As of								Percent Change From
(Dollars in thousands)		December 31,			September 30,			December 31,		September 30,		December 31,
	****	2024		****	2024		****	2023		2024	****	2023
Commercial		$	24,748		$	35,043		$	8,414	(29.4)		194.1
Leases			523			746			818	(29.9)		(36.1)
Commercial real estate – investor			14,489			21,652			43,798	(33.1)		(66.9)
Commercial real estate – owner occupied			27,619			41,820			54,613	(34.0)		(49.4)
Construction			19,351			5,765			17,155	235.7		12.8
Residential real estate – investor			1,690			1,180			1,331	43.2		27.0
Residential real estate – owner occupied			1,851			2,612			3,216	(29.1)		(42.4)
Multifamily			1,165			3,269			1,775	(64.4)		(34.4)
HELOC			547			736			1,664	(25.7)		(67.1)
Other^1^			10			-			-	N/M		N/M
Total classified loans		$	91,993		$	112,823		$	132,784	(18.5)		(30.7)

N/M - Not meaningful.

^1^Other class includes consumer loans and overdrafts.

Classified loans as of December 31, 2024 decreased by $20.8 million from September 30, 2024, and decreased by $40.8 million from December 31, 2023. The net decrease from the third quarter of 2024 was primarily driven by outflows of $9.4 million of paid off loans, $6.1 million of loans upgraded, $9.7 million of principal reductions from payments, and $13.0 million transferred to OREO. The decrease in classified loans in the fourth quarter of 2024 was partially offset by additions of $17.3 million, primarily driven by one construction loan totaling $13.6 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 December 31, 2024, our allowance for credit losses (“ACL”) on loans totaled $43.6 million, and our ACL on unfunded commitments, included in other liabilities, totaled $1.9 million. In the fourth quarter of 2024, we recorded provision expense of $3.5 million based on historical loss rate updates, our assessment of nonperforming loan metrics and trends, as well as estimated future credit losses. The fourth quarter’s provision expense consisted of a $4.1 million provision for credit losses on loans, and a $600,000 reversal of provision for credit losses on unfunded commitments. The decrease in ACL on unfunded commitments was primarily due to an adjustment to historical benchmark assumptions, such as funding rates and the period used to forecast those rates, within the ACL calculation. We recorded net charge offs of $4.9 million in the fourth quarter of 2024, primarily within the commercial portfolio. The third quarter 2024 provision expense of $2.0 million consisted of a $2.0 million provision for credit losses on loans, and an immaterial provision for credit losses on unfunded commitments. We recorded net recoveries of $155,000 in the third quarter of 2024. In the fourth quarter of 2023, we recorded a provision expense of $8.0 million, which consisted of an $8.0 million provision for credit losses on loans and an immaterial provision for credit losses on unfunded commitments. We recorded net charge-offs of $15.5 million in the fourth quarter of 2023. Our ACL on loans to total loans was 1.1% as of December 31, 2024, September 30, 2024, and December 31, 2023.

The ACL on unfunded commitments totaled $1.9 million as of December 31, 2024, $2.5 million as of September 30, 2024, and $2.7 million as of December 31, 2023.

Net Charge-off Summary


Loan charge–offs, net of recoveries	Quarters Ended
(Dollars in thousands)	December 31,		% of	September 30,		% of	December 31,		% of
	2024		Total ^2^	2024		Total ^2^	2023		Total ^2^
Commercial	$	8,621	176.1	$	(7)	4.5	$	71	0.5
Leases		(38)	(0.8)		43	(27.7)		(8)	(0.1)
Commercial real estate – Investor		(173)	(3.5)		(149)	96.1		4,951	32.0
Commercial real estate – Owner occupied		(3,739)	(76.4)		(44)	28.4		10,443	67.5
Construction		-	-		-	-		-	-
Residential real estate – Investor		(2)	-		(18)	11.6		(3)	-
Residential real estate – Owner occupied		234	4.8		(11)	7.1		(8)	(0.1)
Multifamily		-	-		-	-		-	-
HELOC		(45)	(0.9)		(14)	9.0		(17)	(0.1)
Other^1^		37	0.7		45	(29.0)		31	0.3
Net charge–offs / (recoveries)	$	4,895	100.0	$	(155)	100.0	$	15,460	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 fourth quarter of 2024 were $8.9 million, compared to $165,000 for the third quarter of 2024 and $16.0 million for the fourth quarter of 2023. Gross recoveries were $4.1 million for the fourth quarter of 2024, compared to $320,000 for the third quarter of 2024, and $491,000 for the fourth 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.

Deposits

Total deposits were $4.77 billion at December 31, 2024, an increase of $303.3 million, or 6.8%, compared to $4.47 billion at September 30, 2024, primarily due to increases in noninterest bearing deposits of $35.9 million, $46.3 million in savings, $72.5 million in NOW accounts, $70.7 million in money market accounts, and $77.9 million in time deposits. The overall increase in deposits was primarily due to the acquisition of FRME’s five Illinois branches. Average deposits for the quarter to date ending December 31, 2024 increased $114.3 million compared to September 30, 2024. Total quarterly average deposits for the year over year period increased $22.0 million, or 0.5%, driven by an increase in average time deposits of $194.5 million, and NOW and money markets combined of $39.4 million, partially offset by decreases in our average demand deposits of $126.2 million, and savings accounts of $85.8 million. The bulk of the increase in total deposits in the fourth quarter of 2024 occurred in December, driven primarily by the acquisition of the FRME branches.

Borrowings

As of December 31, 2024, we had $20.0 million in other short-term borrowings due to short-term FHLB advances, compared to $335.0 million as of September 30, 2024, and $405.0 million as of December 31, 2023. The large decrease in short-term FHLB advances at December 31, 2024 is due to an influx of cash resulting from the acquisition of the five FRME branches on December 6, 2024, which allowed us to utilize the purchased deposits for lower cost funding.

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 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, January 23, 2025, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss our fourth quarter 2024 financial results. Investors may listen to our call via telephone by dialing 888-506-0062, using Entry Code: 894547. 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 January 30, 2025, by dialing 877-481-4010, using Conference ID: 51807. 12

Old Second Bancorp, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)


		(unaudited)
		December 31,		December 31,
	****	2024		2023
Assets
Cash and due from banks		$	52,175	$	55,534
Interest earning deposits with financial institutions			47,154		44,611
Cash and cash equivalents			99,329		100,145
Securities available-for-sale, at fair value			1,161,701		1,192,829
Federal Home Loan Bank Chicago (“FHLBC”) and Federal Reserve Bank Chicago (“FRBC”) stock			19,441		33,355
Loans held-for-sale			1,556		1,322
Loans			3,981,336		4,042,953
Less: allowance for credit losses on loans			43,619		44,264
Net loans			3,937,717		3,998,689
Premises and equipment, net			87,311		79,310
Other real estate owned			21,617		5,123
Mortgage servicing rights, at fair value			10,374		10,344
Goodwill			93,260		86,478
Core deposit intangible			22,031		11,217
Bank-owned life insurance (“BOLI”)			112,751		109,318
Deferred tax assets, net			26,619		31,077
Other assets			55,670		63,592
Total assets		$	5,649,377	$	5,722,799

Liabilities
Deposits:
Noninterest bearing demand		$	1,704,920	$	1,834,891
Interest bearing:
Savings, NOW, and money market			2,315,134		2,207,949
Time			748,677		527,906
Total deposits			4,768,731		4,570,746
Securities sold under repurchase agreements			36,657		26,470
Other short-term borrowings			20,000		405,000
Junior subordinated debentures			25,773		25,773
Subordinated debentures			59,467		59,382
Other liabilities			67,715		58,147
Total liabilities			4,978,343		5,145,518

Stockholders’ Equity
Common stock			44,908		44,705
Additional paid-in capital			205,284		202,223
Retained earnings			469,165		393,311
Accumulated other comprehensive loss			(47,748)		(62,781)
Treasury stock			(575)		(177)
Total stockholders’ equity			671,034		577,281
Total liabilities and stockholders’ equity		$	5,649,377	$	5,722,799

Old Second Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands, except share data)


		(unaudited)						(unaudited)
		Three Months Ended December 31,						Year Ended December 31,
	****	2024		****	2023		****	2024		****	2023		****
Interest and dividend income
Loans, including fees		$	63,967		$	62,751		$	253,319		$	244,187
Loans held-for-sale			34			31			94			91
Securities:
Taxable			8,899			8,329			34,656			37,940
Tax exempt			1,275			1,322			5,164			5,329
Dividends from FHLBC and FRBC stock			562			647			2,278			1,920
Interest bearing deposits with financial institutions			542			616			2,393			2,503
Total interest and dividend income			75,279			73,696			297,904			291,970
Interest expense
Savings, NOW, and money market deposits			4,652			3,312			17,866			8,761
Time deposits			5,606			2,834			20,147			6,636
Securities sold under repurchase agreements			75			50			337			93
Other short-term borrowings			2,527			5,429			14,607			18,774
Junior subordinated debentures			289			290			1,127			1,095
Subordinated debentures			546			546			2,185			2,185
Senior notes			-			-			-			2,408
Notes payable and other borrowings			-			-			-			87
Total interest expense			13,695			12,461			56,269			40,039
Net interest and dividend income			61,584			61,235			241,635			251,931
Provision for credit losses			3,500			8,000			12,750			16,501
Net interest and dividend income after provision for credit losses			58,084			53,235			228,885			235,430
Noninterest income
Wealth management			3,299			2,600			11,426			9,803
Service charges on deposits			2,657			2,527			10,226			9,817
Secondary mortgage fees			88			58			287			259
Mortgage servicing rights mark to market gain (loss)			385			(1,277)			(723)			(1,425)
Mortgage servicing income			475			495			1,942			2,029
Net gain on sales of mortgage loans			516			366			1,805			1,477
Securities losses, net			-			(2)			-			(4,148)
Change in cash surrender value of BOLI			767			541			3,619			2,120
Death benefit realized on BOLI			-			-			905			-
Card related income			2,572			2,511			10,114			10,051
Other income			851			910			4,218			4,196
Total noninterest income			11,610			8,729			43,819			34,179
Noninterest expense
Salaries and employee benefits			25,613			21,405			98,025			88,566
Occupancy, furniture and equipment			4,457			3,817			16,159			14,437
Computer and data processing			2,659			2,291			9,473			7,277
FDIC insurance			628			583			2,543			2,705
Net teller & bill paying			575			564			2,244			2,115
General bank insurance			327			301			1,268			1,212
Amortization of core deposit intangible			716			603			2,440			2,461
Advertising expense			280			383			1,243			721
Card related expense			1,497			1,338			5,555			5,123
Legal fees			660			228			1,326			927
Consulting & management fees			883			556			2,496			2,415
Other real estate expense, net			2,019			218			2,220			399
Other expense			4,008			4,739			14,756			16,843
Total noninterest expense			44,322			37,026			159,748			145,201
Income before income taxes			25,372			24,938			112,956			124,408
Provision for income taxes			6,262			6,713			27,692			32,679
Net income		$	19,110		$	18,225		$	85,264		$	91,729

Basic earnings per share		$	0.42		$	0.40		$	1.90		$	2.05
Diluted earnings per share			0.42			0.40			1.87			2.02
Dividends declared per share			0.06			0.05			0.21			0.20


Ending common shares outstanding	44,873,467	44,697,917	44,873,467	44,697,917
Weighted-average basic shares outstanding	44,856,870	44,694,200	44,828,290	44,663,722
Weighted-average diluted shares outstanding	45,671,352	45,409,232	45,639,351	45,395,010

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		4th Qtr
Cash and due from banks		$	55,140		$	56,191		$	57,279		$	57,723		$	54,533	$	54,286		$	54,279	$	54,340
Interest earning deposits with financial institutions			49,310			50,309			49,737			47,865			48,088		50,740			48,227		49,757
Cash and cash equivalents			104,450			106,500			107,016			105,588			102,621		105,026			102,506		104,097

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		1,180,024
FHLBC and FRBC stock			24,905			34,029			35,954			34,371			31,800		27,574			30,268		27,493
Loans held-for-sale			813			1,150			1,641			1,709			746		1,050			1,557		2,027
Loans			3,931,679			4,039,052			4,009,218			4,014,771			4,018,631		3,957,454			3,965,160		4,001,014
Less: allowance for credit losses on loans			49,398			53,480			54,581			50,023			44,295		43,468			42,683		45,040
Net loans			3,882,281			3,985,572			3,954,637			3,964,748			3,974,336		3,913,986			3,922,477		3,955,974

Premises and equipment, net			72,649			72,903			74,707			78,472			80,493		82,332			82,977		84,364
Other real estate owned			1,508			1,132			472			2,004			5,123		4,657			7,471		20,136
Mortgage servicing rights, at fair value			11,127			10,741			11,066			11,317			10,455		10,754			10,137		10,060
Goodwill			86,477			86,477			86,477			86,477			86,477		86,477			86,477		88,320
Core deposit intangible			13,327			12,709			12,119			11,502			10,913		10,340			9,768		12,799
Bank-owned life insurance ("BOLI")			106,655			107,028			107,786			108,616			109,867		110,440			110,901		112,243
Deferred tax assets, net			42,237			37,774			39,072			42,754			31,323		32,969			25,666		23,549
Other assets			48,599			50,812			52,360			55,155			49,681		50,423			50,989		43,572
Total other assets			382,579			379,576			384,059			396,297			384,332		388,392			384,386		395,043
Total assets		$	5,898,647		$	5,911,491		$	5,778,518		$	5,694,734		$	5,676,723	$	5,615,458		$	5,615,142	$	5,664,658

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	$	1,712,106
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		2,195,608
Time			434,655			436,524			466,250			497,472			558,463		610,705			651,663		692,001
Total deposits			4,998,349			4,794,068			4,658,064			4,577,734			4,580,424		4,576,146			4,485,420		4,599,715

Securities sold under repurchase agreements			31,080			25,575			24,945			28,526			30,061		37,430			45,420		39,982
Other short-term borrowings			200,833			402,527			427,174			390,652			332,198		242,912			305,489		204,783
Junior subordinated debentures			25,773			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		59,457
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		67,067
Total liabilities			5,416,621			5,399,840			5,248,470			5,146,028			5,087,873		5,010,205			4,975,991		4,996,777

Stockholders' equity
Common stock			44,705			44,705			44,705			44,705			44,787		44,908			44,908		44,908
Additional paid-in capital			201,397			200,590			201,344			201,824			202,688		203,654			204,558		205,356
Retained earnings			324,785			346,042			368,732			389,776			405,201		424,262			443,435		462,631
Accumulated other comprehensive loss			(86,736)			(78,940)			(84,167)			(87,358)			(63,365)		(66,682)			(52,907)		(44,251)
Treasury stock			(2,125)			(746)			(566)			(241)			(461)		(889)			(843)		(763)
Total stockholders' equity			482,026			511,651			530,048			548,706			588,850		605,253			639,151		667,881
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	$	5,664,658

Total Earning Assets		$	5,510,326		$	5,529,204		$	5,391,761		$	5,290,737		$	5,282,153	$	5,216,248		$	5,219,160	$	5,260,315
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		3,217,604

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		4th Qtr
Interest and Dividend Income
Loans, including fees	$	57,210		$	61,561		$	62,665		$	62,751		$	62,673	$	62,151		$	64,528	$	63,967
Loans held-for-sale		12			19			29			31			14		19			27		34
Securities:
Taxable		10,735			9,930			8,946			8,329			8,092		8,552			9,113		8,899
Tax exempt		1,337			1,337			1,333			1,322			1,306		1,292			1,291		1,275
Dividends from FHLB and FRBC stock		280			396			597			647			635		584			497		562
Interest bearing deposits with financial institutions		585			643			659			616			610		625			616		542
Total interest and dividend income		70,159			73,886			74,229			73,696			73,330		73,223			76,072		75,279
Interest Expense
Savings, NOW, and money market deposits		1,149			1,742			2,558			3,312			4,037		4,317			4,860		4,652
Time deposits		664			1,156			1,982			2,834			4,041		4,961			5,539		5,606
Securities sold under repurchase agreements		9			7			27			50			86		83			93		75
Other short-term borrowings		2,345			5,160			5,840			5,429			4,557		3,338			4,185		2,527
Junior subordinated debentures		279			281			245			290			280		288			270		289
Subordinated debentures		546			546			547			546			546		546			547		546
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		13,695
Net interest and dividend income		64,086			63,580			63,030			61,235			59,783		59,690			60,578		61,584
Provision for credit losses		3,501			2,000			3,000			8,000			3,500		3,750			2,000		3,500
Net interest and dividend income after provision for credit losses		60,585			61,580			60,030			53,235			56,283		55,940			58,578		58,084
Noninterest Income
Wealth management		2,270			2,458			2,475			2,600			2,561		2,779			2,787		3,299
Service charges on deposits		2,424			2,362			2,504			2,527			2,415		2,508			2,646		2,657
Secondary mortgage fees		59			76			66			58			50		65			84		88
Mortgage servicing rights mark to market (loss) gain		(525)			96			281			(1,277)			94		(238)			(964)		385
Mortgage servicing income		516			499			519			495			488		513			466		475
Net gain on sales of mortgage loans		306			398			407			366			314		468			507		516
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		767
Death benefit realized on BOLI		-			-			-			-			-		893			12		-
Card related income		2,244			2,690			2,606			2,511			2,376		2,577			2,589		2,572
Other income		1,489			773			1,024			910			1,030		742			1,595		851
Total noninterest income		7,350			8,223			9,877			8,729			10,501		11,127			10,581		11,610
Noninterest Expense
Salaries and employee benefits		22,248			21,798			23,115			21,405			24,312		23,424			24,676		25,613
Occupancy, furniture and equipment		3,475			3,639			3,506			3,817			3,927		3,899			3,876		4,457
Computer and data processing		1,774			1,290			1,922			2,291			2,255		2,184			2,375		2,659
FDIC insurance		584			794			744			583			667		616			632		628
Net teller & bill paying		502			515			534			564			521		578			570		575
General bank insurance		305			306			300			301			309		312			320		327
Amortization of core deposit intangible		624			618			616			603			580		574			570		716
Advertising expense		142			103			93			383			192		472			299		280
Card related expense		1,216			1,222			1,347			1,338			1,277		1,323			1,458		1,497
Legal fees		319			283			97			228			226		238			202		660
Consulting & management fees		790			520			549			556			336		797			480		883
Other real estate expense, net		306			(98)			(27)			218			46		(87)			242		2,019
Other expense		3,637			3,840			4,627			4,739			3,593		3,547			3,608		4,008
Total noninterest expense		35,922			34,830			37,423			37,026			38,241		37,877			39,308		44,322
Income before income taxes		32,013			34,973			32,484			24,938			28,543		29,190			29,851		25,372
Provision for income taxes		8,406			9,411			8,149			6,713			7,231		7,299			6,900		6,262
Net income	$	23,607		$	25,562		$	24,335		$	18,225		$	21,312	$	21,891		$	22,951	$	19,110

Basic earnings per share (GAAP)	$	0.53		$	0.57		$	0.55		$	0.40		$	0.48	$	0.48		$	0.52	$	0.42
Diluted earnings per share (GAAP)		0.52			0.56			0.54			0.40			0.47		0.48			0.50		0.42
Dividends paid per share		0.05			0.05			0.05			0.05			0.05		0.05			0.05		0.06

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
	December 31,			September 30,		December 31,
	2024		****	2024		2023
Net Income
Income before income taxes (GAAP)	$	25,372		$	29,851	$	24,938
Pre-tax income adjustments:
Litigation related expenses		-			-		1,200
Death benefit related to BOLI		-			(12)		-
Merger related costs, net of losses on branch sales		1,521			471		19
Adjusted net income before taxes		26,893			30,310		26,157
Taxes on adjusted net income		6,637			7,009		7,041
Adjusted net income (non-GAAP)	$	20,256		$	23,301	$	19,116

Basic earnings per share (GAAP)	$	0.42		$	0.52	$	0.40
Diluted earnings per share (GAAP)		0.42			0.50		0.40
Adjusted basic earnings per share (non-GAAP)		0.46			0.52		0.43
Adjusted diluted earnings per share (non-GAAP)		0.44			0.51		0.42


	Quarters Ended
	December 31,			September 30,			December 31,
	2024		****	2024			2023
Net Interest Margin
Interest income (GAAP)	$	75,279		$	76,072		$	73,696
Taxable-equivalent adjustment:
Loans		11			11			11
Securities		339			343			352
Interest income (TE)		75,629			76,426			74,059
Interest expense (GAAP)		13,695			15,494			12,461
Net interest income (TE)	$	61,934		$	60,932		$	61,598
Net interest income (GAAP)	$	61,584		$	60,578		$	61,235
Average interest earning assets	$	5,260,315		$	5,219,160		$	5,290,737
Net interest margin (TE)		4.68	%		4.64	%		4.62	%
Net interest margin (GAAP)		4.66	%		4.62	%		4.59	%


	GAAP									Non-GAAP
		Three Months Ended									Three Months Ended
	December 31,			September 30,			December 31,			December 31,			September 30,			December 31,
	2024			2024			2023			2024			2024			2023
Efficiency Ratio / Adjusted Efficiency Ratio

Noninterest expense	$	44,322		$	39,308		$	37,026		$	44,322		$	39,308		$	37,026
Less amortization of core deposit		716			570			603			716			570			603
Less other real estate expense, net		2,019			242			218			2,019			242			218
Less litigation related expense		N/A			N/A			N/A			-			-			1,200
Less merger related costs, net of losses on branch sales		N/A			N/A			N/A			1,521			471			19
Noninterest expense less adjustments	$	41,587		$	38,496		$	36,205		$	40,066		$	38,025		$	34,986

Net interest income	$	61,584		$	60,578		$	61,235		$	61,584		$	60,578		$	61,235
Taxable-equivalent adjustment:
Loans		N/A			N/A			N/A			11			11			11
Securities		N/A			N/A			N/A			339			343			352
Net interest income including adjustments		61,584			60,578			61,235			61,934			60,932			61,598
Noninterest income		11,610			10,581			8,729			11,610			10,581			8,729
Less death benefit related to BOLI		-			12			-			-			12			-
Less securities losses		-			(1)			(2)			-			(1)			(2)
Less MSRs mark to market gains (losses)		385			(964)			(1,277)			385			(964)			(1,277)
Taxable-equivalent adjustment:
Change in cash surrender value of BOLI		N/A			N/A			N/A			203			232			144
Noninterest income (excluding) / including adjustments		11,225			11,534			10,008			11,428			11,766			10,152

Net interest income including adjustments plus noninterest income (excluding) / including adjustments	$	72,809		$	72,112		$	71,243		$	73,362		$	72,698		$	71,750
Efficiency ratio / Adjusted efficiency ratio		57.12	%		53.38	%		50.82	%		54.61	%		52.31	%		48.76	%

N/A - Not applicable.


	Quarters Ended
	December 31,			September 30,			December 31,
	2024			2024			2023
Return on Average Tangible Common Equity Ratio

Net income (GAAP)	$	19,110		$	22,951		$	18,225

Income before income taxes (GAAP)	$	25,372		$	29,851		$	24,938
Pre-tax income adjustments:
Amortization of core deposit intangibles		716			570			603
Net income, excluding intangibles amortization, before taxes		26,088			30,421			25,541
Taxes on net income, excluding intangible amortization, before taxes		6,439			7,032			6,875
Net income, excluding intangibles amortization (non-GAAP)	$	19,649		$	23,389		$	18,666


Total Average Common Equity	$	667,881			639,151		$	548,706
Less Average goodwill and intangible assets		101,119			96,245			97,979
Average tangible common equity (non-GAAP)	$	566,762		$	542,906		$	450,727


Return on average common equity (GAAP)		11.38	%		14.29	%		13.18	%
Return on average tangible common equity (non-GAAP)		13.79	%		17.14	%		16.43	%

Exhibit 99.2


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

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

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


	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

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


	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.

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.