Old Second Bancorp Reports $25.6 Million Net Income in Q1 2026, Driven by Bancorp Financial Acquisition

Old Second Bancorp, Inc. reported a net income of $25.6 million, or $0.48 per diluted share, for the first quarter of 2026, marking an increase from $19.8 million, or $0.43 per diluted share, in the same period last year. This growth is attributed primarily to the acquisition of Bancorp Financial, which significantly boosted net interest income. Total interest and dividend income rose to $98.3 million, up from $73.6 million a year earlier, while interest expense also increased to $17.2 million from $10.7 million, reflecting higher costs associated with deposits and borrowings.

The company's total assets decreased to $6.85 billion as of March 31, 2026, down from $6.90 billion at the end of 2025. This decline was primarily driven by a $66.9 million reduction in total loans, which totaled $5.19 billion at the end of the quarter. However, this figure represents a substantial increase of $1.25 billion compared to the same period last year, largely due to the loans acquired from Bancorp Financial. The allowance for credit losses on loans stood at $72.1 million, reflecting a provision expense of $9.6 million for the quarter, driven by increased charge-offs and the downgrade of certain commercial loans.

Operationally, Old Second Bancorp has continued to expand its footprint, now operating 55 banking centers across several counties in Illinois. The acquisition of Bancorp Financial, completed in July 2025, has enhanced the company's market presence and product offerings. The integration of Bancorp Financial's operations has been successful, with systems conversion completed in October 2025. The company reported a total of 51.7 million shares outstanding as of March 31, 2026, a decrease from 52.7 million shares at the end of 2025, largely due to share repurchases.

Looking ahead, Old Second Bancorp remains focused on managing its interest rate risk and maintaining a strong liquidity position. The company has indicated that it is well-capitalized, with capital ratios exceeding regulatory requirements. The outlook for the remainder of 2026 suggests continued growth in net interest income, driven by the integration of Bancorp Financial and a focus on expanding its loan portfolio. However, management acknowledges potential challenges from economic conditions and credit quality, particularly in light of rising interest rates and inflationary pressures.