Old Second Bancorp Reports $80.3 Million Net Income for Fiscal Year 2025

Old Second Bancorp Inc. reported a net income of $80.3 million for the fiscal year 2025, translating to $1.62 per diluted share. This represents a decrease from the $85.3 million net income, or $1.87 per diluted share, reported in 2024. The company's financial performance was impacted by costs associated with the acquisition of Bancorp Financial, Inc. Net interest and dividend income increased to $293.0 million in 2025, up from $241.6 million in 2024, driven by higher interest rates and the acquired loan portfolio from Bancorp Financial. The net interest margin also increased by 35 basis points to 4.96% in 2025.

A significant strategic development for Old Second in 2025 was the acquisition of Bancorp Financial, Inc., completed on July 1. The transaction involved the issuance of 7.9 million shares of Old Second common stock and $48.9 million in cash, totaling $189.4 million in consideration. This acquisition brought approximately $1.43 billion in total assets, $1.20 billion in total loans, and $1.23 billion in total deposits to Old Second. The systems conversion related to the acquisition was completed in October 2025. In December 2024, Old Second also completed a branch transaction with First Merchants Bank, assuming approximately $268.0 million in deposits and purchasing approximately $7.1 million in branch-related loans across five locations.

Operationally, Old Second experienced loan growth, with the total loan portfolio increasing by $1.27 billion to $5.25 billion in 2025. This growth was primarily attributed to the Bancorp Financial acquisition, which expanded the consumer lending portfolio and introduced the powersport portfolio. Commercial loans increased to $842.1 million, while commercial real estate loans constituted 36.5% of the total loan portfolio. The company's wealth management business also saw growth, with approximately $2.29 billion in assets under administration and/or management as of December 31, 2025. Employee headcount stood at 1,062 full-time equivalent employees at the end of 2025.

Looking ahead, Old Second faces potential risks and uncertainties, including negative economic conditions, changes in interest rates, competitive pressures, and cybersecurity threats. The company's ability to execute its growth strategy and integrate acquired businesses, particularly Bancorp Financial, will be crucial for its future financial performance. The company also acknowledges the increasing scrutiny and evolving expectations related to environmental, social, and governance (ESG) practices, which may impose additional costs and risks. The company's nonperforming loans increased to $52.8 million at December 31, 2025, and the company's allowance for credit losses on loans was $72.3 million, representing 1.38% of total loans.