Company: OSBC
Filing Date: 2025-04-23
Form Type: S-4
Source: 0001104659-25-037832
Chunk: 192

Company: OLD SECOND BANCORP INC
Filing Date: 2025-04-23
Form: S-4
Chunk 192
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 segment, based on origination year utilizing historical charge off percentages. The net-charge off percentage is applied to the outstanding balances to use in the calculation of the ACL for each loan segment.

Credit quality indicators, specifically the Company’s internal risk rating systems, reflect how the Company monitors credit losses and represent factors used by the Company when measuring the allowance for credit losses. Historical credit loss history is adjusted to incorporate reasonable and supportable third party economic forecasts on a qualitative basis. Reasonable and supportable forecasts consider the macroeconomic factors that are most relevant to evaluating and predicting expected credit losses in the Company’s financial assets.

Qualitative factors assessed by management include the following:

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Economic factors;

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Changes in lending policies and procedures, including changes in underwriting standards and collections, charge-offs, and recovery practices;

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Changes in the experience, depth, and ability of lending management;

<div align='center'>F-13</div>

TABLE OF CONTENTS

#### Bancorp Financial, Inc. and Subsidiary

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

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Changes in the nature and volume of the portfolio and terms of loans;

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Changes in the quality of the organization’s loan review system;

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Changes in the value of underlying collateral for collateral dependent loans;

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Changes in the volume and severity of past due loans and other similar conditions;

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The effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses; and

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The existence and effect of any concentrations of credit and changes in the levels of such concentrations.

Individually evaluated loans are based on Criticized Asset Reports prepared for all watch list commercial loans, watch list Home Equity loans greater than $100,000, loans on non-accrual status, and loans delinquent 90 days or greater. No powersport loans are individually evaluated for impairment. These Criticized Asset Reports evaluate the collateral held and document if any specific reserve needs to be made for each individual loan.

The Company categorizes commercial and industrial, commercial real estate, construction and development, and consumer watch list loans into the following risk categories based on relevant information about the ability of borrowers to service their debt:

Pass — A Pass asset is well protected by the current worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Pass assets also