Old Second Bancorp Reports Q1 2025 Financial Results with $19.8 Million Net Income

Old Second Bancorp, Inc. reported its financial results for the first quarter of 2025, revealing a net income of $19.8 million, or $0.43 per diluted share, compared to $21.3 million, or $0.47 per diluted share, in the same period last year. The decrease in net income was attributed to a $6.3 million increase in noninterest expenses and a $300,000 decline in noninterest income. However, net interest and dividend income rose to $62.9 million, up from $59.8 million year-over-year, primarily due to a reduction in interest expenses and an increase in interest income from loans and securities.

Total assets increased to $5.73 billion as of March 31, 2025, up from $5.65 billion at the end of 2024, largely driven by a $156.8 million increase in cash following the acquisition of five branches from First Merchants Bank in December 2024. Total loans decreased by $41.1 million during the quarter, while total deposits rose to $4.85 billion, reflecting an increase of $84.1 million from the previous quarter. The growth in deposits was primarily due to increases in noninterest-bearing demand deposits and savings accounts.

The company also announced a pending merger with Bancorp Financial, Inc., expected to close in the third quarter of 2025, subject to regulatory approvals. This strategic move aims to enhance Old Second's market presence and operational scale. The merger will see Bancorp Financial stockholders receive shares of Old Second common stock and cash for their shares, further expanding Old Second's footprint in the Illinois banking market.

Operationally, Old Second's nonperforming loans increased to $34.8 million, up from $30.3 million at the end of 2024, but decreased significantly from $65.1 million a year earlier. The allowance for credit losses on loans stood at $41.6 million, reflecting a provision expense of $2.4 million for the quarter, driven by net charge-offs primarily in the commercial loan segment. The company continues to monitor its loan portfolio closely, particularly in light of economic uncertainties.

Looking ahead, Old Second Bancorp remains optimistic about its growth prospects, despite a softer outlook for loan growth in 2025. The company plans to leverage its increased liquidity and branch network to enhance customer relationships and capitalize on new banking opportunities while maintaining a focus on safety and soundness in its operations.