Old Second Bancorp, Inc. (OSBC): History, Ownership, Mission, How It Works & Makes Money

When you look at community banking in the Midwest, do you really understand the strategic moves that turn a regional player into a growth story like Old Second Bancorp, Inc. (OSBC)? This bank holding company, headquartered in Aurora, Illinois, recently solidified its position with a major acquisition, pushing its proforma total assets to approximately $6.98 billion as of March 31, 2025, a clear sign of its scaling ambition. The third quarter of 2025 showed this strategy paying off, with the company reporting adjusted net income of $28.4 million, or $0.53 per diluted share, beating analyst expectations and demonstrating strong execution in a tough rate environment. If you're looking for precision on how a bank leverages a core deposit franchise to drive a diversified loan portfolio-including a new push into powersport lending-you need to see the mechanics behind this performance.

Old Second Bancorp, Inc. (OSBC) History

You're looking for the foundational story of Old Second Bancorp, Inc., and honestly, you have to look further back than the holding company's start. The current entity, Old Second Bancorp, Inc., is a bank holding company (BHC) that was a strategic move to enable broader expansion, but its roots are in a community bank that's over a century old. The BHC structure allowed the company to move beyond its original footprint in the Fox Valley area of Illinois.

The key takeaway is that Old Second Bancorp's evolution is a story of a local institution using a modern corporate structure to scale through strategic acquisitions, culminating in a significant expansion in 2025. This dual history-deep local roots and aggressive modern growth-is what defines its trajectory.

Given Company's Founding Timeline

Year established

The predecessor, Old Second National Bank, was founded in 1871, but the current bank holding company, Old Second Bancorp, Inc., was formally incorporated in Delaware in 1981.

Original location

The company is headquartered in Aurora, Illinois, which is also the location of the original bank's founding.

Founding team members

While the original 1871 founders are not detailed in recent public filings, James E. Benson was elected as the first President and CEO of the newly formed Old Second Bancorp in 1982, guiding its transition into a multi-bank holding company.

Initial capital/funding

The initial capital for the predecessor institution, Second National Bank (later Old Second National Bank), was $100,000 when it commenced operations in 1871. A significant later capital raise was an underwritten public offering in 2014 that generated gross proceeds of $59.4 million.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The biggest transformative moments for Old Second Bancorp, Inc. have always been centered on strategic expansion and capital deployment, moving from a single-city bank to a regional player. Frankly, the 2025 merger with Bancorp Financial is the most significant near-term event, fundamentally reshaping the company's size and competitive position.

• The BHC Formation (1981/1982): This was a quiet but essential structural change. It allowed the organization to eventually acquire other banks, which was impossible under the old single-bank charter. This foresight set the stage for all future growth.
• The 2025 Bancorp Financial Merger: This deal immediately increased the company's scale, giving it pro forma assets of approximately $6.98 billion and deposits of $5.95 billion as of March 31, 2025. This wasn't just about size; it improved the company's interest rate sensitivity and profitability, with the acquired loan portfolio having an average yield of 8.65% prior to accretion.
• Post-Merger Financial Impact: The third quarter of 2025 saw net income of $9.9 million, but the adjusted net income, which excludes one-time transaction costs, was a much healthier $28.4 million, or $0.53 per diluted share. That's the real number to watch. The acquisition added $1.19 billion in loans, bringing the total loan portfolio to $5.27 billion as of September 30, 2025.

This is a classic community bank growth story: use a holding company structure to consolidate and gain scale in a fragmented market. If you want to dig deeper into the current shareholder base and why they are buying into this growth story, you should check out Exploring Old Second Bancorp, Inc. (OSBC) Investor Profile: Who's Buying and Why?

Old Second Bancorp, Inc. (OSBC) Ownership Structure

Old Second Bancorp, Inc. (OSBC) is a publicly traded financial services holding company primarily controlled by large institutional investors, a common structure for regional banks, while management and directors hold a small but meaningful stake that aligns their interests with shareholders. This dispersed ownership means strategic decisions are heavily influenced by the fiduciary duties of major asset managers like BlackRock, Inc. and Vanguard Group Inc.

Old Second Bancorp, Inc.'s Current Status

Old Second Bancorp, Inc. is a public entity, trading its common stock on the Nasdaq Stock Market (Nasdaq-GS) under the ticker symbol OSBC. As of November 2025, the company commands a market capitalization of approximately $978.07 million, reflecting its position as a solid regional bank holding company. Its public status subjects it to the rigorous reporting and transparency requirements of the U.S. Securities and Exchange Commission (SEC), providing investors with detailed financial data, including the Q3 2025 adjusted net income of $28.4 million. The company's total annual revenue is recorded at approximately $311.24 million. You can dive deeper into the market's view of this structure by Exploring Old Second Bancorp, Inc. (OSBC) Investor Profile: Who's Buying and Why?

Old Second Bancorp, Inc.'s Ownership Breakdown

The ownership structure is dominated by institutional money-mutual funds, pension funds, and major asset managers-which is typical for a mid-cap financial services firm. Institutional investors hold the clear majority, a signal of market trust in the company's long-term strategy, despite a recent uptick in insider selling activity. Here's the quick math on who owns the shares as of late 2025:

Institutional ownership sits at a substantial 67.76%. This concentration means that a handful of large firms hold significant voting power, so you defintely need to track their movements. Insider ownership, held by executives and directors, is a modest 3.80%, which is still enough to align their interests with maximizing shareholder value.

Old Second Bancorp, Inc.'s Leadership

The company is steered by a seasoned management team with an average tenure of 6.7 years, providing stability in a volatile industry. The leadership is focused on balance sheet optimization, especially after the July 2025 acquisition of Bancorp Financial, Inc. The core executive team, as of November 2025, includes:

• James L. Eccher: Chairman and Chief Executive Officer (CEO). He has served as CEO since January 2015, demonstrating a long-term commitment to the firm.
• Bradley S. Adams: Executive Vice President (EVP), Chief Operating Officer (COO), and Chief Financial Officer (CFO). He manages both the operational and financial health of the company.
• Gary S. Collins: Vice Chairman. He provides high-level strategic oversight and is a key figure on the Board.

CEO James Eccher's total yearly compensation is approximately $2.69 million, which is about average for a CEO in a company of this size in the US market. This compensation structure, comprised of salary and bonuses including company stock, ties his personal wealth to the company's performance, a critical factor for any investor to consider.

Old Second Bancorp, Inc. (OSBC) Mission and Values

Old Second Bancorp, Inc. (OSBC) centers its mission on community growth and customer priority, aiming to be a full-service financial partner that helps individuals and businesses grow first. This deep-seated commitment is the cultural backbone that drives its financial performance, which included a Second Quarter 2025 Net Income of $21.8 Million, or $0.48 per Diluted Share.

You're not just looking at a balance sheet; you're looking at a 150-year-plus history of building up communities, primarily across Illinois. The company's core values are what translate this long-term aspiration into daily action, ensuring that even as the bank expands-like its strategic merger activity in 2025-the foundational focus remains local. To be fair, this local focus is a key differentiator in a crowded financial services market.

Old Second Bancorp, Inc.'s Core Purpose

The company's core purpose is to be the indispensable financial partner for its customers, grounding its growth in the prosperity of the communities it serves. This means designing products, from commercial loans to wealth management services, with the client's best interests at heart, not just the bank's bottom line. For instance, the bank's commitment to diversity and inclusion is viewed as a 'Business Imperative,' recognizing that diverse markets require diverse perspectives to be the 'Financial Services Provider of Choice.'

Official Mission Statement

While Old Second Bancorp, Inc. does not publish a single, rigid mission statement, its operating philosophy is clear: to grow its business by helping its customers and communities grow first. This is a pragmatic, community-banking approach to value creation.

• Build up individuals and businesses in their communities.
• Provide full-service banking businesses, including commercial and retail products, and wealth management solutions.
• Strive to be the Bank of choice in the workplace, marketplace, and community.

Here's the quick math: a community-first approach leads to stable deposit funding, which in turn supports a strong equity position, a key factor in the bank's stability. For a deeper dive into the numbers, you can check out Breaking Down Old Second Bancorp, Inc. (OSBC) Financial Health: Key Insights for Investors.

Vision Statement and Core Values

The vision for Old Second Bancorp, Inc. is to be the 'Employer and Financial Services Provider of Choice' in the markets they serve, which span counties in Illinois like Kane, DuPage, and Will. This vision is supported by core values that focus on employee empowerment and continuous improvement, which is defintely necessary to stay competitive.

• Empowered Ownership: Encouraging employees to take accountability and drive results.
• Creativity to Innovate: Using collective ideas and input to enhance service and performance.
• Continuous Development: Fostering growth through ongoing training and development.

This commitment to internal development is a direct play to maintain service quality, especially as the company navigates the integration of acquisitions, a process that can be messy and feature acquisition-related expenses, as seen in the latter half of 2025.

Old Second Bancorp, Inc. Slogan/Tagline

The company's primary slogan perfectly encapsulates its customer-first culture and long-term operating philosophy.

• We're Old Second because you're first.

It's a clean one-liner that tells you everything you need to know about where their priorities lie. This focus is what helps them deliver stable results, even with a Third Quarter 2025 Net Income of $9.9 Million, a natural fluctuation after a strong Q2.

Old Second Bancorp, Inc. (OSBC) How It Works

Old Second Bancorp, Inc. operates as a community-focused financial holding company, primarily generating revenue by taking in local deposits and deploying that capital through a diverse loan portfolio, which totaled $5.27 billion as of the third quarter of 2025. Their model blends traditional relationship banking in the greater Chicago area with a high-yield, national consumer lending platform to drive profitability.

Old Second Bancorp, Inc.'s Product/Service Portfolio

Old Second Bancorp, Inc.'s Operational Framework

The company's operational framework centers on efficient capital deployment and the seamless integration of strategic acquisitions, which is defintely the big story for 2025.

The core process starts with gathering low-cost deposits from their established branch network in Illinois. This funding base then supports two distinct lending engines: the local, relationship-based commercial lending and the national, higher-yield specialty consumer lending business acquired from Bancorp Financial, Inc. in Q3 2025. After the acquisition, the company immediately focused on balance sheet optimization, selling the bulk of the acquired securities portfolio and reducing reliance on expensive wholesale funding. That's a quick way to boost the margin.

• Gather core deposits to maintain a low cost of funds.
• Underwrite and originate commercial loans, totaling $5.27 billion at September 30, 2025, to drive net interest income.
• Manage noninterest income streams like wealth management and card-related fees, which totaled $13.11 million in Q3 2025.
• Control operating expenses to maintain a low efficiency ratio (tax equivalent adjusted of 52.1% in Q3 2025).

You can see the full strategic intent behind this structure in their Mission Statement, Vision, & Core Values of Old Second Bancorp, Inc. (OSBC).

Old Second Bancorp, Inc.'s Strategic Advantages

Old Second Bancorp, Inc.'s market success is grounded in its dual-engine strategy and its disciplined approach to expense management, which gives it a clear edge over regional peers.

• Enhanced Scale and Market Position: The Bancorp Financial acquisition significantly increased the company's size, creating the second largest community bank under $10 billion in assets in the Chicago market, with pro forma assets of approximately $7.1 billion.
• Superior Profitability Metrics: The company maintains a strong return profile, with a return on average tangible common equity of 15.29% in Q2 2025, well above many competitors.
• High-Yield Loan Portfolio: The addition of the powersport lending segment provides a stable source of high-interest-rate consumer credits, boosting the overall net interest margin (NIM) to 5.05% (TE) in the third quarter of 2025. Here's the quick math: that 5.05% NIM is 41 basis points higher than the same quarter last year.
• Operational Efficiency: A consistently low adjusted efficiency ratio of 52.1% demonstrates strong expense discipline, allowing more revenue to flow to the bottom line.

Old Second Bancorp, Inc. (OSBC) How It Makes Money

Old Second Bancorp, Inc., the holding company for Old Second National Bank, primarily makes money like any successful bank: by borrowing funds cheaply (deposits) and lending them out at a higher rate (loans), a process known as generating net interest income (NII). This core banking activity is supplemented by fees from wealth management, deposit services, and mortgage banking.

Old Second Bancorp, Inc.'s Revenue Breakdown

For the third quarter of 2025, the company's revenue structure shows a strong reliance on its traditional lending business, though noninterest income is growing quickly, especially following the July 1, 2025, acquisition of Bancorp Financial, Inc.. Here is the breakdown of the $95.9 million in total revenue (net of interest expense) for Q3 2025.

Business Economics

The core economic engine is the spread between what they pay for deposits and what they earn on loans and securities-the net interest margin (NIM). The recent acquisition of Bancorp Financial, Inc. and its subsidiary, Evergreen Bank Group, was a major strategic move that immediately changed the economics.

• Loan Portfolio Yield: The acquired loan portfolio from Bancorp Financial, Inc. had an average yield of 8.65% prior to accretion, which boosted the yield on Old Second Bancorp, Inc.'s overall interest-earning assets by 66 basis points compared to the prior quarter.
• Funding Strategy: The bank's ability to maintain a strong loan-to-deposit ratio, which stood at 91.4% as of September 30, 2025, shows they are effectively deploying customer deposits into higher-yielding loans. That's a key metric for a bank's profit efficiency.
• Fee Income Diversification: While Net Interest Income dominates, the noninterest income stream is important for stability. Wealth management fees, a component of noninterest income, increased by 26.1% year-over-year in Q3 2025, showing success in cross-selling services beyond basic banking.
• Cost Control: The tax equivalent efficiency ratio was 64.46% in Q3 2025. Banks aim for a lower number here, but this figure was significantly impacted by the $11.5 million in transaction-related expenses from the Bancorp Financial, Inc. acquisition.

The acquisition noise is temporary, but the higher-yielding assets are a defintely long-term structural change.

Old Second Bancorp, Inc.'s Financial Performance

The Q3 2025 financial results, reported on October 22, 2025, reflect a period of significant integration, which is why the GAAP net income of $9.9 million or $0.18 per diluted share looks low. You need to look at the adjusted numbers to see the true operating health.

• Adjusted Profitability: Adjusted net income, which excludes non-recurring items like the day-two provision for credit losses from the acquisition, was much stronger at $28.4 million, or $0.53 per diluted share for Q3 2025.
• Asset Quality and Growth: Total loans increased by $1.27 billion in Q3 2025, with $1.19 billion coming directly from the Bancorp Financial, Inc. acquisition. This growth is significant, but it also led to a net provision for credit losses of $19.7 million in the quarter, including $13.2 million in day-two provision related to the acquired loans.
• Return on Assets (ROA): The reported GAAP ROA for Q3 2025 was 0.56%. This is low for a high-performing bank, but again, the merger-related charges are distorting the figure.

For a deeper dive into the metrics that matter post-merger, check out Breaking Down Old Second Bancorp, Inc. (OSBC) Financial Health: Key Insights for Investors. Your next step should be to track the Q4 2025 earnings call for management's guidance on synergy realization and a cleaner, less-adjusted ROA figure.

Old Second Bancorp, Inc. (OSBC) Market Position & Future Outlook

Old Second Bancorp is positioned for a significant shift in its operating profile, leveraging the July 2025 acquisition of Bancorp Financial to pivot from a smaller regional player to the second largest community bank under $10 billion in assets in the competitive Chicago market. The immediate outlook is strong profitability, evidenced by a Q3 2025 adjusted net income of $28.4 million, but this comes with the near-term challenge of integrating a major acquisition.

Competitive Landscape

In the Chicago Metropolitan Statistical Area (MSA), Old Second Bancorp competes on two fronts: against national giants and against other strong regional banks. The merger significantly boosted its scale, but the company remains a niche player in a market dominated by money-center banks.

To be fair, this 0.9% market share is a pro forma estimate based on the combined entity's $6.0 billion in deposits against the total Illinois deposit market, which shows the scale challenge. The real win is becoming a top-tier community bank, not competing with the 1,000-pound gorillas like JPMorgan Chase & Co.

Opportunities & Challenges

The strategic combination with Bancorp Financial is the primary driver for both near-term opportunities and risks as we head into 2026. The goal is to realize the expected 16% earnings per share (EPS) accretion in the first full year.

The Q3 2025 GAAP net income of $9.9 million was suppressed by $11.5 million in transaction-related expenses and a $13.2 million day two provision for credit losses from the merger. That's just the cost of doing business when you grow this fast.

Industry Position

Old Second Bancorp's industry standing is defined by its strong capital and operational efficiency, especially for a bank its size. The merger has fundamentally changed its competitive profile from a small-cap regional bank to a mid-tier community bank with a diversified asset base.

• Scale and Reach: Pro forma total assets now stand at approximately $7.1 billion, operating 56 branches across the Chicago-area markets.
• Capital Strength: The Common Equity Tier 1 ratio was a robust 13.77% in Q2 2025, providing a significant cushion against potential losses.
• Diversification: The acquisition introduced a new, high-yielding powersport loan segment, which diversifies the loan portfolio beyond traditional commercial real estate.
• Analyst Sentiment: Wall Street analysts maintain a consensus Buy rating, with an average 12-month price target of $21.63.

This is a defintely a growth story built on M&A, not just organic growth. For a deeper look at who is backing this growth, you can read Exploring Old Second Bancorp, Inc. (OSBC) Investor Profile: Who's Buying and Why?

Next Step: Management: Finalize the integration timeline and cost-saving targets for Q1 2026.