Company: OSBC
Filing Date: 2025-05-06
Form Type: S-4/A
Source: 0001104659-25-045103
Chunk: 152

Company: OLD SECOND BANCORP INC
Filing Date: 2025-05-06
Form: S-4/A
Chunk 152
---
sequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the ACL in future periods.

<div align='center'>104</div>

TABLE OF CONTENTS

The ACL involves critical accounting estimates because:

•

changes in the provision for credit losses can materially affect our financial results;

•

estimates relating to the ACL require us to project future borrower performance, including delinquency and charge-offs, along with, when applicable, collateral values, based on a reasonable and supportable forecast period utilizing forward-looking economic scenarios in order to estimate probability of default and loss given default;

•

the ACL is influenced by factors outside of our control such as industry and business trends, geopolitical events and the effects of laws and regulations as well as economic conditions such as unemployment, interest rates, inflation, housing prices and GDP;

•

considerable judgment is required to determine whether the model used to generate the ACL produces an estimate that is sufficient to encompass the current view of lifetime expected credit losses.

Because our estimates of the ACL involve judgments and are influenced by factors outside of our control, there is uncertainty inherent in these estimates. Changes in such estimates could significantly impact our ACL and provision for credit losses. A discussion of the factors driving changes in the amount of the ACL is included in the “Allowance for Credit Losses” section below.

#### Fair Value Measurements
Bancorp Financial determines the fair value of its assets and liabilities in accordance with accounting guidance that establishes a standard framework for measuring and disclosing fair value under GAAP. The use of fair values is required in determining the carrying values of certain assets and liabilities, as well as for specific disclosures. Fair value is an estimate of the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is based on the assumptions market participants would use when pricing an asset or liability.

In determining the fair value of financial instruments, market prices of the same or similar instruments are used whenever such prices are available. If observable market prices are unavailable or impracticable to obtain, Bancorp Financial is required to make judgments about assumptions market participants would use in estimating the fair value of the financial instrument. Fair value is estimated using modeling techniques and incorporates assumptions about interest rates, duration, prepayment speeds, risks inherent in a particular valuation technique and the risk of nonperformance. These assumptions are inherently subjective as they require material estimates, all of which may be susceptible to significant change.

### Results of operations

#### Net interest income