Company: OSBC
Filing Date: 2025-04-01
Form Type: PRE 14A
Source: 0001558370-25-004277
Chunk: 35

Company: OLD SECOND BANCORP INC
Filing Date: 2025-04-01
Form: PRE 14A
Chunk 35
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 model requires experienced leaders with banking and operational expertise who are capable of taking on high levels of personal responsibility in an ever-evolving banking industry and economy.

21

Financial and Operational Performance.During 2024, we continued our emphasis on sustaining profitability and growth. Some accomplishments in 2024 included:

| ● | Net Income of $85.3 million; and |

| ● | An Efficiency Ratio (GAAP) of 54.36%. |

Overview of Certain Compensation-Related Performance Metrics .In 2024, our Compensation Committee selected, among others, corporate performance metrics for our annual incentive plan based on our:

| ● | Adjusted Net Income, which excluded after-tax on mortgage servicing rights (“MSR”) losses, after-tax net security losses, death benefits realized on BOLI, after-tax net gains on branch sales, and acquisition related costs, as applicable. See page 50 for the reconciliation of this non-GAAP measure to GAAP Net Income. Adjusted Net Income was earned at 130.0% of target based on our 2024 Adjusted Net Income (non-GAAP) of $86.4 million, which was above our peer group median for return on average assets; and |

| ● | Adjusted Efficiency Ratio, which is noninterest expense excluding core deposit intangible amortization and net OREO expenses, divided by the sum of net interest income on a fully tax equivalent basis, total noninterest income less net losses on securities, and MSR losses, plus a tax equivalent adjustment on the increase in cash surrender value of BOLI during the applicable period. Efficiency Ratio results may also be adjusted by the Committee in its sole discretion to prevent dilution or enlargement of an award as a result of extraordinary, unusual or non-recurring items, such as acquisition related costs recorded in 2024. Adjusted Efficiency Ratio was earned at 90.68% of target based on our 2024 Adjusted Efficiency Ratio (tax-exempt, non-GAAP) of 53.18%. |

Overview of Our Executive Compensation Programs.The Company and the Bank share an executive management team. The compensation packages of our named executive officers are determined and approved by our Compensation Committee based on their performance and roles for both the Company and the Bank. We are committed to paying for performance. This commitment is reflected by the significant portion of our named executive officers’ compensation that is provided through performance-based programs. Our executive compensation programs evolve and are adjusted over time to support our business goals and to promote both near- and long