Company: OSBC
Filing Date: 2025-04-23
Form Type: S-4
Source: 0001104659-25-037832
Chunk: 156

Company: OLD SECOND BANCORP INC
Filing Date: 2025-04-23
Form: S-4
Chunk 156
---
 ​ | ​ |

Net interest income decreased by $1.7 million, or 3.0%, to $54.2 million for the year ended December 31, 2024, as compared to $55.9 million for 2023, primarily due to the higher interest rate environment throughout much of 2024, which resulted in higher cost of funds. Our net interest margin was 3.74% for 2024 as compared to 3.88% for 2023, a decrease of 14 basis points. Average interest earning assets increased $8.8 million during 2024, primarily in CRA mortgage-backed securities as part of our CRA strategic plan, partially offset by a reduction in interest-earning deposits with banks and a slight reduction in average loans as we tightened underwriting and focused on quality growth in the powersport business during this macro-economic cycle. The overall yield on earning assets increased 71 basis points to 7.46% for 2024, from 6.75% in 2023, primarily from the higher rate powersport portfolio. Interest-bearing liabilities increased $11.4 million while overall cost of funds increased 98 basis points to 4.34% as a result of the higher rate environment in all funding costs as compared to 2023. The change in the deposit mix reflects a significant increase in online savings deposits as a result of the success of our national digital deposit strategy and a decrease in reliance on fixed rate CD funding and wholesale funding. This strategy is expected to be favorable in a declining interest rate environment. The following table allocates the changes in net interest income to changes in either average balances or average rates for interest earning assets and interest-bearing liabilities.

106

TABLE OF CONTENTS

Analysis of Year-to-Year Changes in Net Interest Income

| ​                                  
 ​                                  
 (In thousands)                     
 Interest and dividend Income       | ​ 
 ​ 
 ​ 
 ​ | ​ 
 ​ 
 ​ 
 ​ | 2024 Compared to 2023 
 Change Due to         
 AverageRate           
 ​                     | ​ |      ​ | ​ | ​ 
 ​ | ​ 
 ​ | AverageVolume 
 ​             | ​ |      ​ | ​ | ​ 
 ​ 
 ​ | ​ 
 ​ 
 ​ | ​           
 TotalChange 
 ​           | ​ 
 ​ |      ​ 
      ​ | ​ 
 ​ | ​ 
 ​ 
 ​ 
 ​ |
|:-----------------------------------|:--|:--|:----------------------|:--|-------:|:--