Old Second Bancorp Reports $28.2 Million Net Income in Q2 2026, Driven by Bancorp Financial Acquisition

Old Second Bancorp, Inc. reported a net income of $28.2 million, or $0.54 per diluted share, for the second quarter of 2026, marking an increase from $21.8 million, or $0.48 per diluted share, in the same quarter of 2025. The company's total revenue for the quarter was driven by a significant rise in interest and dividend income, which reached $101.2 million, up from $75.2 million year-over-year. This increase was primarily attributed to the acquisition of Bancorp Financial, which added approximately $1.20 billion in loans and $1.23 billion in deposits to Old Second's balance sheet. However, the company also faced a $7.5 million provision for credit losses, reflecting increased charge-offs and a downgrade in one commercial relationship.

In comparison to the previous fiscal period, total assets decreased slightly to $6.87 billion as of June 30, 2026, down from $6.90 billion at the end of 2025. This decline was largely due to a $49.8 million reduction in securities available-for-sale and a $6.3 million decrease in total loans. Total deposits also fell by $151.4 million, primarily due to a decrease in time deposits as higher-rate brokered deposits from the Bancorp Financial acquisition rolled off. Despite this, total deposits increased by $646.2 million compared to the same quarter last year, reflecting the impact of the acquisition.

Operationally, Old Second Bancorp has expanded its footprint through the acquisition of Bancorp Financial, which has enhanced its market presence in Illinois and introduced new product offerings. The company now operates 54 banking centers across several counties, focusing on community banking services, including commercial and consumer lending, as well as wealth management services. The acquisition has also led to an increase in employee headcount, contributing to higher salaries and employee benefits, which rose to $59.8 million for the first half of 2026, compared to $53.9 million in the same period of 2025.

The company reported a total loan portfolio of $5.25 billion as of June 30, 2026, which reflects a slight decrease from the previous quarter but a significant increase from the prior year, primarily due to the loans acquired from Bancorp Financial. The quality of the loan portfolio has been under scrutiny, with nonperforming loans increasing to $56.5 million, or 1.1% of total loans, as of June 30, 2026. This increase was driven by several larger commercial loans moving to nonaccrual status. The allowance for credit losses on loans stood at $70.4 million, representing 1.3% of total loans.

Looking ahead, Old Second Bancorp remains cautiously optimistic about its financial outlook. The company is focused on managing its interest rate risk and maintaining a strong liquidity position, with cash and cash equivalents totaling $143.3 million as of June 30, 2026. The management is also committed to monitoring credit quality closely, especially in light of the economic uncertainties and potential impacts from inflation and interest rate fluctuations. The company’s capital ratios remain strong, exceeding regulatory requirements, which positions it well for future growth and stability.