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Sep 30, 2025
Old Second Q3 2025 Earnings Report
Old Second Bancorp reported lower Q3 2025 earnings due to higher noninterest expenses and credit loss provisions following its acquisition of Bancorp Financial.
Key Takeaways
Old Second Bancorp, Inc. posted net income of $9.9 million ($0.18 per diluted share) for Q3 2025, down from $23.0 million a year ago. Adjusted net income was $28.4 million ($0.53 per diluted share). The quarter was heavily influenced by the acquisition of Bancorp Financial, which increased loan balances and noninterest expenses while boosting interest income. The company maintained solid profitability and strong capital ratios, with a net interest margin of 5.05% and efficiency ratio of 64.46%.
Net income was $9.9 million, down from $23.0 million in Q3 2024 due to acquisition-related expenses.
Adjusted net income reached $28.4 million, up from $24.0 million a year earlier.
Net interest income rose 36.6% year-over-year to $82.8 million, driven by loan growth from the Bancorp Financial acquisition.
Nonperforming loans increased to $48.0 million, representing 0.9% of total loans.
Forward Guidance
Old Second expects continued integration benefits from the Bancorp Financial acquisition, stronger interest income from its expanded loan portfolio, and ongoing cost synergies into 2026.
Positive Outlook
- Asset yields exceeding expectations from acquired loan portfolio.
- Operational efficiencies from merger integration progressing ahead of plan.
- Strong balance sheet with CET1 capital ratio of 12.44%.
- Loan growth supported by new consumer and powersport lending segments.
- Dividend increased by 17%, reflecting confidence in financial stability.
Challenges Ahead
- Higher operating expenses linked to acquisition and integration costs.
- Increased nonperforming loans driven by two legacy relationships.
- Provision for credit losses elevated due to day two accounting from acquisition.
- Lower quarterly net income compared to prior periods despite strong adjusted performance.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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