Company: OSBC
Filing Date: 2025-04-23
Form Type: S-4
Source: 0001104659-25-037832
Chunk: 188

Company: OLD SECOND BANCORP INC
Filing Date: 2025-04-23
Form: S-4
Chunk 188
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 recognizing any incremental impairment through earnings. If the Company neither intends to sell the security, nor believes it more likely than not that it will be required to sell the security, before the fair value recovers to the amortized cost basis, the Company must determine whether any of the decline in fair value has resulted from a credit loss, or if it is entirely the result of noncredit factors.

<div align='center'>F-10</div>

TABLE OF CONTENTS

#### Bancorp Financial, Inc. and Subsidiary

### Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)

The Company considers the following factors in assessing whether the decline is due to a credit loss:

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Extent to which the fair value is less than the amortized cost basis

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Adverse conditions specifically related to the security, an industry, or geographic area (for example, changes in the financial condition of the issuer of the security, or in the case of an asset backed debt security, in the financial condition of the underlying loan obligors)

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Payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future

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Failure of the issuer of the security to make scheduled interest or principal payments

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Any changes to the rating of the security by a rating agency

Impairment related to a credit loss must be measured using the discounted cash flow method. Credit loss recognition is limited to the fair value of the security. Impairment is recognized by establishing an allowance for credit losses (ACL) through provision for credit losses. Impairment related to noncredit factors is recognized in other comprehensive income (OCI), net of applicable taxes. The Company did not recognize any impairment in 2024 or 2023.

Federal Home Loan Bank stock: The Company, as a member of the Federal Home Loan Bank of Chicago (FHLB), is required to maintain an investment in capital stock of the FHLB. The stock does not have a readily determinable fair value as ownership is restricted and it lacks a ready market. As a result, this stock is carried at cost and evaluated periodically for impairment.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for credit losses, and net deferred origination fees. Interest income is accrued on the unpaid principal balance. Net deferred origination fees are recognized as an adjustment of the related loan yield