AURORA, IL / ACCESS Newswire / January 21, 2026 / 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 2025. Our net income was $28.8 million, or $0.54 per diluted share, for the fourth quarter of 2025, compared to net income of $9.9 million, or $0.18 per diluted share, for the third quarter of 2025, and net income of $19.1 million, or $0.42 per diluted share, for the fourth quarter of 2024.

Adjusted net income, a non-GAAP financial measure that excludes certain nonrecurring items, as applicable, was $30.8 million, or $0.58 per diluted share, for the fourth quarter of 2025, compared to $28.4 million, or $0.53 per diluted share, for the third quarter of 2025, and $20.0 million, or $0.44 per diluted share, for the fourth quarter of 2024. The pre-tax adjusting items impacting the fourth quarter of 2025 included the exclusion of $428,000 of mortgage servicing rights ("MSRs") mark to market losses, and $2.3 million of transaction-related expenses, net of gains on branch sales, primarily from our acquisition of Bancorp Financial, Inc ("Bancorp Financial"). The adjusting items impacting the third quarter of 2025 included the exclusion of $13.2 million of day two provision for credit losses recorded with our acquisition of Bancorp Financial, $389,000 of MSRs mark to market losses, $430,000 of death benefits realized on BOLI, and $11.5 million of transaction-related expenses, net of gains on branch sales, primarily from our acquisition of Bancorp Financial. The adjusting items impacting the fourth quarter of 2024 included the exclusion of $385,000 of MSRs mark to market gains and $1.5 million of transaction-related expenses, net of losses on branch sales, primarily from our purchase of five branches from First Merchants Bank ("FRME"). See the discussion entitled "Non-GAAP Presentations" below and the tables beginning on page 18 found at www.oldsecond.com under the Investor Relations page, that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

Net income increased $18.9 million in the fourth quarter of 2025 compared to the third quarter of 2025 driven by lower acquisition related costs. The increase was primarily due to a $16.7 million decrease in provision for credit losses, as $3.0 million of provision expense was recorded in the fourth quarter of 2025, compared to $13.2 million of a day two provision from our acquisition of Bancorp Financial and $6.5 million of provision expense in the prior linked quarter. In addition, there was a $2.0 million decrease in interest expense driven by the decrease in interest paid on deposits, and a $10.2 million decrease in noninterest expense in the fourth quarter of 2025, compared to the prior linked quarter, mainly due to the timing of costs incurred related to our acquisition of Bancorp Financial. The increases to the fourth quarter of 2025's net income, as compared to the prior quarter, were partially offset by a $1.8 million decrease in interest and dividend income, primarily due to declines in rates and volume on securities coupled with a decline on yields, partially offset by an increase in volume in the loan portfolio, a $955,000 decrease in noninterest income, and a $7.3 million increase in provision for income taxes. Net income increased $9.7 million in the fourth quarter of 2025 compared to the fourth quarter of 2024, primarily due to an increase of $27.0 million in interest and dividend income stemming from our acquisition of Bancorp Financial. The increase in net income compared to the prior year like quarter was partially offset by a $5.6 million increase in interest expense and an $8.6 million increase in noninterest expense, both of which were driven by the Bancorp Financial acquisition, as well as a $4.2 million increase in provision for income taxes due to higher pretax income.

Operating Results

• Fourth quarter 2025 net income was $28.8 million, reflecting an $18.9 million increase from the third quarter of 2025, and an increase of $9.7 million from the fourth quarter of 2024. Adjusted net income, as defined above, was $30.8 million for the fourth quarter of 2025, an increase of $2.4 million from adjusted net income for the third quarter of 2025, and an increase of $10.8 million from adjusted net income for the fourth quarter of 2024.

• Net interest and dividend income was $83.1 million for the fourth quarter of 2025, reflecting an increase of $276,000, or 0.3%, from the third quarter of 2025, and an increase of $21.5 million, or 34.9%, from the fourth quarter of 2024.

• We recorded a net provision for credit losses of $3.0 million in the fourth quarter of 2025 compared to a net provision for credit losses of $19.7 million in the third quarter of 2025 and net provision for credit losses of $3.5 million in the fourth quarter of 2024. Provision for credit loss expense in the third quarter of 2025 included the $13.2 million impact of the Bancorp Financial day two purchase accounting.

• Noninterest income was $12.2 million for the fourth quarter of 2025, a decrease of $955,000, or 7.3%, compared to $13.1 million for the third quarter of 2025, and an increase of $544,000, or 4.7%, compared to $11.6 million for the fourth quarter of 2024.

• Noninterest expense was $52.9 million for the fourth quarter of 2025, a decrease of $10.2 million, or 16.2%, compared to $63.2 million for the third quarter of 2025, and an increase of $8.6 million, or 19.4%, compared to $44.3 million for the fourth quarter of 2024.

• We had a provision for income tax of $10.5 million for the fourth quarter of 2025, compared to a provision for income tax of $3.2 million for the third quarter of 2025 and a provision for income tax of $6.3 million for the fourth quarter of 2024. The effective tax rate for each of the periods presented was 26.7%, 24.5%, and 24.7%, respectively. The effective tax rate for the fourth quarter 2025 exceeded both prior periods presented as we determined certain acquisition costs related to the Bancorp Financial transaction were not fully deductible.

• On January 20, 2026, our Board of Directors declared a cash dividend of $0.07 per share of common stock, payable on February 9, 2026, to stockholders of record as of January 30, 2026.

Financial Highlights

¹ See the discussion entitled "Non-GAAP Presentations" below and the table on page 19 that provides a reconciliation of this non-GAAP financial measure to the most comparable GAAP equivalent, found at www.oldsecond.com, under the Investor Relations page.
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 concluded a great year with an extremely strong fourth quarter. Core earnings have exhibited very strong growth in recent periods and profitability remains among the best in the industry with return on average assets of 1.75% and return on average tangible equity of 17.23%, both excluding acquisition related purchase accounting and deal costs. The tax equivalent net interest margin has remained resilient and impressive at 5.09% and the adjusted efficiency ratio was a very healthy 51.28%. This strong bottom-line performance and a well-positioned balance sheet drove an increase in the tangible common equity capital ratio to 11.02% from 10.04% last year end and tangible book value per share increased by 14% in 2025 despite the dilution associated with a meaningful acquisition."

"In summary, we are proud of the strength and sustainability of our performance, and with marginal spreads in loan and deposit markets improving, we are excited about the opportunities for additional growth in 2026. We believe we have exceptional balance sheet flexibility and the strategic positioning to capitalize on growth opportunities that may come our way in the near future. I would like to thank our team for their hard work and execution in 2025, including integrations and systems conversions and upgrades that have made us a much better Old Second. I could not be more excited about the things we can accomplish within the next year."

Asset Quality & Earning Assets

• Nonperforming loans, comprised of nonaccrual loans plus loans past due 90 days or more and still accruing, totaled $52.8 million at December 31, 2025, $48.0 million at September 30, 2025, and $30.3 million at December 31, 2024. Nonperforming loans, as a percent of total loans, was 1.0% at December 31, 2025, 0.9% at September 30, 2025, and 0.8% at December 31, 2024. The $4.8 million increase in the fourth quarter of 2025 for nonperforming loans is driven by a $13.8 million increase in nonaccrual loans due to inflows of $18.3 million, primarily related to two commercial real estate relationships totaling $14.9 million, partially offset by outflows of $4.5 million, which include $2.4 million of loans paid off and $2.1 million of partial principal reductions from payments and partial charge-offs on loans. The increase to nonaccrual loans was partially offset by a $9.0 million decrease to loans past due 90 days or more and still accruing, primarily comprised of two legacy relationships, one that was paid off in the fourth quarter of 2025 and another that was downgraded to nonaccrual.

• Total loans were $5.25 billion at December 31, 2025, reflecting a decrease of $12.4 million compared to September 30, 2025 and an increase of $1.27 billion compared to December 31, 2024. The significant increase from December 31, 2024 is primarily driven by the $1.19 billion of loans acquired in our acquisition of Bancorp Financial. The decline in loans from September 30, 2025 is influenced by the seasonal reductions within the powersport portfolio. Based on historical data, the powersport portfolio shows much higher origination volume from March through September as compared to the remainder of the year. Excluding loans purchased from the Bancorp Financial acquisition, organic loan growth, net of paydowns, totaled $76.1 million, or 1.9%, compared to December 31, 2024 total loans. Average loans (including loans held-for-sale) for the fourth quarter of 2025 totaled $5.28 billion, reflecting an increase of $61.3 million from the third quarter of 2025, and an increase of $1.28 billion from the fourth quarter of 2024.

• Available-for-sale securities totaled $1.09 billion at December 31, 2025, compared to $1.16 billion at September 30, 2025 and $1.16 billion at December 31, 2024. The unrealized mark to market loss on securities totaled $43.1 million as of December 31, 2025, compared to $47.7 million as of September 30, 2025, and $68.6 million as of December 31, 2024, 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, 2025, we had security purchases of $7.8 million and security maturities, calls and paydowns of $78.9 million, compared to security purchases of $20.6 million, security sales of $7.5 million, excluding the sale of Bancorp Financial's $117.6 million available-for-sale securities portfolio after the acquisition closed, and security maturities, calls and paydowns of $41.1 million during the quarter ended September 30, 2025. During the quarter ended December 31, 2024, we had security purchases of $84.9 million and $101.2 million of maturities, calls, and paydowns. We may continue to buy and sell strategically identified securities as opportunities arise.

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 8 found at www.oldsecond.com, under the Investor Relations page.

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 18 found at www.oldsecond.com, under the Investor Relations page, 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," "build," and "near" or other statements that indicate future periods, such as "positioning" or "integration". Examples of forward-looking statements include, but are not limited to, statements regarding the economic outlook, balance sheet growth, building capital, and statements regarding the anticipated strategic and financial benefits of our acquisition of Bancorp Financial, including integration progress and competitive positioning. 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 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 have 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 government shutdowns, trade disputes, 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 22, 2026, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss our fourth quarter 2025 financial results. Investors may listen to our earnings call via a live webcast by accessing the link provided below, or alternatively, on the Events section of the Old Second Investor Relations website (https://investors.oldsecond.com/events). Investors are encouraged to register at the webcast link at least 10 minutes prior to the scheduled start of the call.

Webcast URL: https://www.webcaster5.com/Webcast/Page/2239/53419

A replay of the webcast will be available under the Events section of the Old Second Investor Relations website (https://investors.oldsecond.com/events) for up to one year after the earnings call date.

SOURCE: Old Second Bancorp Inc.