Company: OSBC
Filing Date: 2025-05-08
Form Type: 424B3
Source: 0001104659-25-046065
Chunk: 195

Company: OLD SECOND BANCORP INC
Filing Date: 2025-05-08
Form: 424B3
Chunk 195
---
 align='center'>F-14</div>

TABLE OF CONTENTS

#### Bancorp Financial, Inc. and Subsidiary

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

Loss — An asset, or portion thereof, classified as Loss is considered uncollectible and of such little value that its continuance on the Company’s books as an asset is not warranted. This classification does not necessarily mean that an asset has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery would occur. As such, it is not practical or desirable to defer the write-off.

Powersport loans are assessed for credit quality based upon the FICO score of the borrowers at origination in addition to the contractual aging status of the loan and payment activity. Such assessment is completed at the end of each reporting period.

On an annual basis, an independent loan review is completed on a sample of commercial and industrial, commercial real estate and construction and development loans. The reviews are completed in enough detail to, at a minimum, validate the risk rating. Additionally, the reviews determine whether any documentation exceptions exist, appropriate written analysis is included in the loan file, and whether credit policies have been properly adhered to.

Annually, an independent review is also conducted for a sample of residential real estate, home equity loans and lines of credit, powersport, and installment and other loans in order to assess underwriting quality and adherence to policy.

Unfunded commitment reserve: The unfunded commitment reserve represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments that are unconditionally cancellable by the Company. The unfunded commitment reserve is recognized as a liability and included in other liabilities on the consolidated balance sheets, with adjustments to the unfunded commitment reserve recognized as a provision for credit loss expense in the consolidated statements of income. The unfunded commitment reserve is determined by estimating expected future fundings, under each segment, and applying the expected loss rates. Expected future fundings are based on historical averages of the likelihood of draws on outstanding commitments. At December 31, 2024 and 2023, the unfunded commitment reserve was $7,000 and $10,314, respectively.

Foreclosed and repossessed assets: Foreclosed and repossessed assets include assets that have been recorded in satisfaction of debt and are initially recorded at fair