(NASDAQ:OSBC)		Exhibit 99.1
Contact:	Bradley S. Adams	For Immediate Release
	Chief Financial Officer	July 27, 2022
	(630) 906-5484

Old Second Bancorp, Inc. Reports Second Quarter 2022 Net Income of $12.2 Million,

or $0.27 per Diluted Share

AURORA, IL, July 27, 2022 – Old Second Bancorp, Inc. (the “Company,” “Old Second,” “we,” “us,” and “our”) (NASDAQ: OSBC), the parent company of Old Second National Bank (the “Bank”), today announced financial results for the second quarter of 2022.  Our net income was $12.2 million, or $0.27per diluted share, for the second quarter of 2022, compared to net income of $12.0 million, or $0.27 per diluted share, for the first quarter of 2022, and net income of $8.8 million, or $0.30 per diluted share, for the second quarter of 2021. Adjusted net income, a non-GAAP financial measure that excludes $2.1 million of pre-tax acquisition-related costs, net of gains on branch sales, related to our acquisition of West Suburban Bancorp, Inc. (“West Suburban”) on December 1, 2021, was $13.8 million, or $0.31 per diluted share, for the second quarter of 2022.  See the discussion entitled “Non-GAAP Presentations” below and the tables beginning on page 17 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

The increase in net income in the second quarter of 2022 was primarily due to net interest and dividend income of $45.3 million, which increased $4.0 million from the first quarter of 2022 primarily due to loan growth and market interest rate increases, and increased $23.3 million from the second quarter of 2021, as West Suburban loan and securities income, net of interest expense on acquired deposits, was included in the second quarter of 2022.  The second quarter of 2022 also included a $82,000 pre-tax mark to market gain on mortgage servicing rights (“MSRs”), compared to a $3.0 million pre-tax gain on MSRs in the first quarter of 2022, and a $1.0 million pre-tax loss on MSRs in the second quarter of 2021.

Operating Results

●Second quarter 2022 net income was $12.2 million, reflecting an increase in earnings of $227,000 from the first quarter of 2022, and an increase of $3.4 million from the second quarter of 2021.  Adjusted net income, a non-GAAP financial measure that excludes acquisition-related costs, net of gains on branch sales, was $13.8 million for the second quarter of 2022, a decrease of $2.1 million from adjusted net income for the first quarter of 2022.  There was no adjustment to net income for the period ending June 30, 2021.

●Net interest and dividend income was $45.3 million for the second quarter of 2022, an increase of $4.0 million, or 9.8%, from the first quarter of 2022, and an increase of $23.3 million, or 106.2%, from the second quarter of 2021.

●Interest and dividend income for the second quarter of 2022 was $47.4 million, an increase of $4.1 million from the first quarter of 2022, and an increase of $23.2 million from the second quarter 2021.  Growth in interest and dividend income in 2022 reflected the market interest rate increases in 2022, as well as full periods of West Suburban loan and securities income.  

●Interest expense for both the second and first quarters of 2022 totaled $2.1 million, compared to $2.2 million for the second quarter of 2021.  The year-over-year decrease in interest expense stems primarily from decreased interest bearing deposits and the pay down of $10.2 million of notes payable and other borrowings.

●We recorded a net provision for credit losses of $550,000 in the second quarter of 2022, compared to no provision in the first quarter of 2022, and a $3.5 million release of provision expense in the second quarter of

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2021.  The net provision in the second quarter of 2022 was driven by an increase in total loans, partially offset by a reduction of our allowance for unfunded commitments based on our analysis of funding rate utilization.      

● Noninterest income was $9.2 million for the second quarter of 2022, a decrease of $4.3 million, or 31.6%, compared to $13.5 million for the first quarter of 2022, and an increase of $1.3 million, or 16.3%, compared to $7.9 million for the second quarter of 2021.  Service charges on deposits increased for the second quarter of 2022 by $254,000 compared to the prior quarter, and increased by $1.1 million compared to the second quarter of 2021.  Card related income in the second quarter of 2022 was $3.0 million, an increase of $398,000 from the first quarter 2022, and increased $1.3 million over the second quarter 2021.  These increases were offset by a decrease in net mortgage banking income of $4.7 million from the first quarter of 2022, and $1.2 million from the second quarter of 2021, due to a significant decrease in originations for the secondary market in the second quarter of 2022, as well as the effect of interest rate changes on our mortgage banking derivatives.  

● Noninterest expense was $37.2 million for the second quarter of 2022, a decrease of $1.0 million, or 2.6% compared to $38.3 million for the first quarter of 2022, and an increase of $15.8 million, or 74.1%, compared to $21.4 million for the second quarter of 2021.  The decrease from the first quarter of 2022 is the result of less conversion-related data processing fees, partially offset by higher salary and employee benefits and card related expenses.  Contributing to the year over year increase was $3.3 million of acquisition costs in the second quarter of 2022 primarily in data processing and salaries, partially offset by the $1.1 million gain on branch sales. In addition, growth in salaries and employee benefits and occupancy, furniture and equipment expenses were recorded in the second quarter of 2022, primarily stemming from the additional employees and branches due to the West Suburban acquisition, as well as higher salary rates being paid in 2022.  

● We had a provision for income tax of $4.4 million for both the second quarter and first quarter of 2022, compared to a provision for income tax of $3.2 million for the second quarter of 2021.  The year over year increase in tax expense for the second quarter of 2022 was due to an increase in pre-tax income.  

● On July 19, 2022, our Board of Directors declared a cash dividend of $0.05 per share payable on August 8, 2022, to stockholders of record as of July 29, 2022.

President and Chief Executive Officer Jim Eccher said “We are very pleased with our core trends this quarter including strong loan growth, improving core operating leverage and steady asset quality.  We believe momentum remains across nearly all of our businesses with the exception of a disappointing quarter from mortgage banking due to a combination of higher interest rates, ineffective hedging and fallout within the locked pipeline.  We expected our mortgage banking expenses to decline meaningfully beginning next quarter and revenues are also expected to return to a more normalized run rate.  Loan originations remained strong across all commercial segments and drove $223 million in linked quarter loan growth with current lending pipelines remaining robust.  Net interest margin trends have begun to advance with the reported taxable equivalent net interest margin increasing by 30 basis points linked quarter to 3.18%.  We completed the systems conversions and integration activities related to the acquisition of West Suburban without significant disruptions to customers during the second quarter. We believe solid earnings trends will become less obscured by acquisition related noise over the remainder of the year as some remaining redundancies are eliminated. 

“Looking forward, I remain optimistic on loan growth trends in the near term and excited on what we can do over the intermediate term.  Loan yields should begin to expand more rapidly as rate increases take hold within the portfolio, which offers the potential for expanding margins and strong earnings growth in the near term. We are excited for the future and believe we have the resources and momentum to focus on growth and building a better Old Second for our stockholders and communities.”

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Capital Ratios

	Minimum Capital		Well Capitalized
	Adequacy with		Under Prompt
	Capital Conservation		Corrective Action		June 30,		March 31,		June 30,
	Buffer, if applicable1		Provisions2		2022		2022		2021
The Company
Common equity tier 1 capital ratio	7.00	%	N/A		9.35	%	9.73	%	12.72	%
Total risk-based capital ratio	10.50	%	N/A		12.27	%	12.85	%	17.60	%
Tier 1 risk-based capital ratio	8.50	%	N/A		9.91	%	10.33	%	13.83	%
Tier 1 leverage ratio	4.00	%	N/A		7.24	%	7.00	%	9.68	%
The Bank
Common equity tier 1 capital ratio	7.00	%	6.50	%	12.24	%	12.74	%	15.23	%
Total risk-based capital ratio	10.50	%	10.00	%	13.25	%	13.83	%	16.33	%
Tier 1 risk-based capital ratio	8.50	%	8.00	%	12.24	%	12.74	%	15.23	%
Tier 1 leverage ratio	4.00	%	5.00	%	8.94	%	8.61	%	10.63	%

¹Amounts are shown inclusive of a capital conservation buffer of 2.50%.

² The prompt corrective action provisions are only applicable at the Bank level.

The ratios shown above exceed levels required to be considered “well capitalized.”

Asset Quality & Earning Assets

● Nonperforming loans totaled $42.1 million at June 30, 2022, $38.0 million at March 31, 2022, and $23.1 million at June 30, 2021.  Nonperforming loans with a total net book value of $23.8 million were acquired with our acquisition of West Suburban in December 2021.  Credit metrics reflected increases in nonperforming loans due to the acquisition in the fourth quarter of 2021, and management is carefully monitoring loans considered to be in a classified status.  Nonperforming loans, as a percent of total loans were 1.2% at June 30, 2022, 1.1% at March 31, 2022, and 1.2% at June 30, 2021.

● OREO assets totaled $1.6 million at June 30, 2022, $2.4 million at March 31, 2022, and $1.9 million at June 30, 2021. In the second quarter of 2022 we had no transfers to OREO from loans, we wrote down $104,000 on two properties, and we sold three properties with a total net book value of $646,000.  Nonperforming assets, as a percent of total loans plus OREO, were 1.2% at both June 30, 2022 and March 31, 2022, compared to 1.3% at June 30, 2021.

● Total loans were $3.63 billion at June 30, 2022, reflecting an increase of $222.7 million compared to March 31, 2022, and an increase of $1.72 billion compared to June 30, 2021. The increase from the linked quarter was due to growth in commercial, leases and commercial real estate loans, net of paydowns, in the second quarter of 2022. Increases in the year over year quarter were due to the acquisition of $1.50 billion of loans in the West Suburban acquisition.  Average loans (including loans held-for-sale) for the second quarter of 2022 totaled $3.51 billion, reflecting an increase of $104.3 million from the first quarter of 2022 and an increase of $1.58 billion from the second quarter of 2021.  

● Available-for-sale securities totaled $1.73 billion at June 30, 2022, compared to $1.82 billion at March 31, 2022, and $580.0 million at June 30, 2021.  Total securities available-for-sale decreased compared to the linked quarter due to paydowns and maturities of $72.8 million and $40.5 million in unrealized losses, partially offset by purchases of $36.0 million during the quarter.  We sold one security at a loss of $33,000 in the second quarter of 2022. The growth in the year over year period is due to our acquisition of West Suburban in the fourth quarter of 2021.  The unrealized mark to market loss on securities totaled $89.8 million as of June 30, 2022, compared to $49.4 million as of March 31, 2022, and an unrealized mark to market gain of $22.7 million as of June 30, 2021, due to market interest rate fluctuations as well as changes year over year in the composition of the securities portfolio.

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Net Interest Income

Analysis of Average Balances,
Tax Equivalent Income / Expense and Rates
(Dollars in thousands - unaudited)
	Quarters Ended
	June 30, 2022						March 31, 2022						June 30, 2021
	Average			Income /		Rate	Average			Income /		Rate	Average			Income /		Rate
	Balance			Expense		%	Balance			Expense		%	Balance			Expense		%
Assets
Interest earning deposits with financial institutions	$	426,820		$	782	0.73	$	635,302		$	269	0.17	$	499,555		$	137	0.11
Securities:
Taxable		1,610,713			6,670	1.66		1,612,635			5,053	1.27		425,785			1,832	1.73
Non-taxable (TE)1		181,386			1,789	3.96		195,240			1,814	3.77		188,281			1,593	3.39
Total securities (TE)1		1,792,099			8,459	1.89		1,807,875			6,867	1.54		614,066			3,425	2.24
Dividends from FHLBC and FRBC		20,994			263	5.02		16,066			153	3.86		9,917			113	4.57
Loans and loans held-for-sale1, 2		3,508,856			38,267	4.37		3,404,534			36,428	4.34		1,930,965			20,856	4.33
Total interest earning assets		5,748,769			47,771	3.33		5,863,777			43,717	3.02		3,054,503			24,531	3.22
Cash and due from banks		53,371			-	-		42,972			-	-		29,985			-	-
Allowance for credit losses on loans		(44,354)			-	-		(44,341)			-	-		(31,024)			-	-
Other noninterest bearing assets		374,309			-	-		370,987			-	-		185,368			-	-
Total assets	$	6,132,095					$	6,233,395					$	3,238,832
Liabilities and Stockholders' Equity
NOW accounts	$	604,176		$	102	0.07	$	593,481		$	89	0.06	$	531,804		$	105	0.08
Money market accounts		1,054,552			155	0.06		1,098,941			170	0.06		330,536			59	0.07
Savings accounts		1,213,133			90	0.03		1,201,086			138	0.05		439,104			53	0.05
Time deposits		469,009			265	0.23		495,452			277	0.23		359,635			409	0.46
Interest bearing deposits		3,340,870			612	0.07		3,388,960			674	0.08		1,661,079			626	0.15
Securities sold under repurchase agreements		34,496			9	0.10		39,204			11	0.11		67,737			21	0.12
Other short-term borrowings		-			-	-		-			-	-		1			-	-
Junior subordinated debentures		25,773			284	4.42		25,773			280	4.41		25,773			284	4.42
Subordinated debentures		59,244			547	3.70		59,222			546	3.74		56,081			517	3.70
Senior notes		44,520			578	5.21		44,494			485	4.42		44,415			673	6.08
Notes payable and other borrowings		13,103			95	2.91		19,009			103	2.20		22,250			119	2.15
Total interest bearing liabilities		3,518,006			2,125	0.24		3,576,662			2,099	0.24		1,877,336			2,240	0.48
Noninterest bearing deposits		2,120,428			-	-		2,099,283			-	-		1,012,163			-	-
Other liabilities		32,636			-	-		60,818			-	-		36,553			-	-
Stockholders' equity		461,025			-	-		496,632			-	-		312,780			-	-
Total liabilities and stockholders' equity	$	6,132,095					$	6,233,395					$	3,238,832
Net interest income (GAAP)				$	45,264					$	41,232					$	21,954
Net interest margin (GAAP)						3.16						2.85						2.88
Net interest income (TE)1				$	45,646					$	41,618					$	22,291
Net interest margin (TE)1						3.18						2.88						2.93
Interest bearing liabilities to earning assets		61.20	%					61.00	%					61.46	%

¹ Tax equivalent (TE) basis is calculated using a marginal tax rate of 21% in 2022 and 2021. See the discussion entitled “Non-GAAP Presentations” below and the tables beginning on page 17 that provides a reconciliation of each non-GAAP measures to the most comparable GAAP equivalent.

²Interest income from loans is shown on a tax equivalent basis, which is a non-GAAP financial measure as discussed in the table on page 17, and includes fees of $588,000, $724,000 and $1.3 million for the second quarter of 2022, first quarter of 2022, and the second quarter of 2021, respectively. Nonaccrual loans are included in the above stated average balances.

Net interest income (TE) was $45.6 million for the second quarter of 2022, which reflects an increase of $4.0 million compared to the first quarter of 2022, and an increase of $23.4 million compared to the second quarter of 2021.  The tax equivalent adjustment for the second quarter of 2022 was $382,000 compared to $386,000 in the first quarter 2022, and $337,000 for the second quarter of 2021.  Average interest earning assets decreased $115.0 million to $5.75 billion for the second quarter of 2022, compared to the first quarter of 2022, due to decreases in interest earning deposits with financial institutions, securities, and loans held-for-sale.  Average interest earning assets increased $2.69 billion in the second quarter of 2022, compared to the second quarter of 2021, primarily due to the West Suburban acquisition. Average loans, including loans held-for-sale, increased $104.3 million for the second quarter of 2022, compared to the first quarter of 2022, and increased $1.58 billion compared to the second quarter of 2021.  The yield on

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loans for the second quarter of 2022 increased three basis points compared to the first quarter of 2022, and increased four basis points compared to the second quarter of 2021.  

A decrease of $15.8 million in the average balance of securities for the second quarter of 2022, compared to the first quarter of 2022, was offset by the increase in market interest rates, as increasing yields on our variable rate securities resulted in an increase of $1.6 million to interest income (TE).  Significantly higher average balances, partially offset by lower yields in the second quarter of 2021, resulted in a $5.0 million increase in interest income (TE) on securities in the second quarter of 2022 compared to the second quarter of 2021.  The average yield on total securities available-for-sale declined 35 basis points year over year.  We acquired $1.07 billion of securities with our acquisition of West Suburban in December 2021, and securities activity in the second quarter 2022 consisted of $36.0 million of purchases, offset by $76.1 million of paydowns, calls and maturities, and one sale.  Our overall yield on tax equivalent municipal securities was 3.96% for the second quarter of 2022, compared to 3.77% for the first quarter of 2022 and 3.39% for the second quarter of 2021.  

The yield on average earning assets increased 31 basis points in the second quarter of 2022, compared to the first quarter of 2022, and increased 11 basis points compared to the second quarter of 2021.  Changes in the interest rate environment impact the portfolio at varying intervals depending on the repricing timeline of loans, as well as the securities maturity and purchase activity.      

Average interest bearing liabilities decreased $58.7 million in the second quarter of 2022, compared to the first quarter of 2022, driven primarily by a $70.8 million decrease in money market accounts and time deposits.  Average interest bearing liabilities increased $1.64 billion in the second quarter of 2022, compared to the second quarter of 2021, primarily driven by a $1.68 billion increase in interest bearing deposits from the acquisition of West Suburban, partially offset by a $9.1 million decrease in notes payable and other borrowings.  The decrease in deposits since the first quarter of 2022 are attributable to customer usage of funds, and we paid down $7.0 million of notes payable in the second quarter of 2022.  The cost of interest bearing liabilities for the second quarter of 2022 remained at 24 basis points as compared to the first quarter of 2022, and decreased 24 basis points from 0.48% the second quarter of 2021. Growth in our average noninterest bearing demand deposits of $21.1 million from the linked quarter, and $1.11 billion in the year over year period has assisted us in controlling our cost of funds stemming from average interest bearing deposits and borrowings; cost of funds, which includes the impact of noninterest bearing deposits, totaled 0.15% for the second and first quarters of 2022, compared to 0.31% in the second quarter of 2021.

Our net interest margin (GAAP) increased 31 basis points to 3.16% for the second quarter of 2022, compared to 2.85% for the first quarter of 2022, and increased 28 basis points compared to 2.88% for the second quarter of 2021. Our net interest margin (TE) increased 30 basis points to 3.18% for the second quarter of 2022, compared to 2.88% for the first quarter 2022, and increased 25 basis points compared to 2.93% for the second quarter of 2021. The increases year over year were due primarily to the increased level of market interest rates over much of the past four months, the related rate resets on loans and securities during the past year, a decrease in our cost of funds. See the discussion entitled “Non-GAAP Presentations” and the tables beginning on page 17 that provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

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Noninterest Income

							2nd Quarter 2022
Noninterest Income	Three Months Ended						Percent Change From
(Dollars in thousands)	June 30,		March 31,		June 30,		March 31,	June 30,
	2022		2022		2021		2022	2021
Wealth management	$	2,506	$	2,698	$	2,389	(7.1)	4.9
Service charges on deposits		2,328		2,074		1,221	12.2	90.7
Residential mortgage banking revenue
Secondary mortgage fees		50		139		272	(64.0)	(81.6)
MSRs mark to market gain (loss)		82		2,978		(1,033)	(97.2)	(107.9)
Mortgage servicing income		579		519		507	11.6	14.2
Net (loss) gain on sales of mortgage loans		(262)		1,495		1,895	(117.5)	(113.8)
Total residential mortgage banking revenue		449		5,131		1,641	(91.2)	(72.6)
Securities (losses) gains, net		(33)		-		2	N/M	N/M
Change in cash surrender value of BOLI		72		124		423	(41.9)	(83.0)
Card related income		2,965		2,567		1,666	15.5	78.0
Other income		924		869		577	6.3	60.1
Total noninterest income	$	9,211	$	13,463	$	7,919	(31.6)	16.3

N/M - Not meaningful.

Noninterest income decreased $4.3 million, or 31.6%, in the second quarter of 2022, compared to the first quarter of 2022, and increased $1.3 million, or 16.3%, compared to the second quarter of 2021.  The decrease from the first quarter was primarily driven by a $4.7 million decline in residential mortgage banking revenue that is attributable to a decline in mark to market gain on MSRs of $2.9 million, as well as a net loss of $262,000 on the sale of mortgage loans, compared to a gain on the sale of mortgage loans of $1.5 million in the first quarter of 2022. The variance is due to a significant decrease in origination volume, as increasing interest rates during the rate lock period impacted both the mortgage banking derivative and the pull through rate in the form of increased denials and withdrawals after a rate lock.  The mark to market gain on MSRs decreased from the first quarter due to fluctuations in interest rates. These residential mortgage banking revenue decreases were partially offset by increased service charges on deposit accounts of $254,000, and an increase in card related income of $398,000 in the second quarter of 2022 offset by a reduction in wealth management fees of $192,000 and a decrease in the cash surrender value of BOLI of $52,000, as compared to the linked quarter.

The increase in noninterest income in the second quarter of 2022, compared to the second quarter of 2021, is primarily due to a $1.3 million increase in card related income, a $1.1 million increase in service charges on deposits, a $117,000 increase in wealth management fees, and a $347,000 increase in other income, stemming primarily from the inclusion of West Suburban related activity. Partially offsetting these increases was a $1.2 million decline in residential mortgage banking revenue, due to a decrease in mortgage origination volume in the second quarter of 2022, as well as changes in interest rates effecting the mortgage banking derivative, and a $351,000 decrease in the cash surrender value of BOLI, due to market interest rate fluctuations.

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Noninterest Expense

										2nd Quarter 2022
Noninterest Expense	Three Months Ended									Percent  Change From
(Dollars in thousands)	June 30,			March 31,			June 30,			March 31,	June 30,
	2022			2022			2021			2022	2021
Salaries	$	15,995		$	15,598		$	9,435		2.5	69.5
Officers incentive		1,662			994			1,194		67.2	39.2
Benefits and other		3,675			3,375			2,267		8.9	62.1
Total salaries and employee benefits		21,332			19,967			12,896		6.8	65.4
Occupancy, furniture and equipment expense		3,046			3,699			2,303		(17.7)	32.3
Computer and data processing		4,006			6,268			1,304		(36.1)	207.2
FDIC insurance		702			410			192		71.2	265.6
General bank insurance		351			315			277		11.4	26.7
Amortization of core deposit intangible asset		659			665			115		(0.9)	473.0
Advertising expense		194			182			95		6.6	104.2
Card related expense		1,057			534			626		97.9	68.8
Legal fees		179			257			135		(30.4)	32.6
Consulting & management fees		523			616			250		(15.1)	109.2
Other real estate owned expense (gain), net		87			(12)			77		(825.0)	13.0
Other expense		5,113			5,351			3,131		(4.4)	63.3
Total noninterest expense	$	37,249		$	38,252		$	21,401		(2.6)	74.1
Efficiency ratio (GAAP)1		67.07	%		72.70	%		68.63	%
Adjusted efficiency ratio (non-GAAP)2		62.69	%		61.89	%		67.65	%

¹ The efficiency ratio shown in the table above is a GAAP financial measure calculated as noninterest expense, excluding amortization of core deposits and OREO expenses, divided by the sum of net interest income and total noninterest income less net gains or losses on securities and mark to market gains or losses on MSRs.

² The adjusted efficiency ratio shown in the table above is a non-GAAP financial measure calculated as noninterest expense, excluding amortization of core deposits, OREO expenses, and acquisition-related costs, net of gain on branch sales, divided by the sum of net interest income on a fully tax equivalent basis, total noninterest income less net gains or losses on securities and mark to market gains or losses on MSRs, and includes a tax equivalent adjustment on the change in cash surrender value of BOLI.  See the discussion entitled “Non-GAAP Presentations” below and the table on page 18 that provides a reconciliation of this non-GAAP financial measure to the most comparable GAAP equivalent.

Noninterest expense for the second quarter of 2022 decreased $1.0 million, or 2.6%, compared to the first quarter of 2022, and increased $15.8 million, or 74.1%, compared to the second quarter of 2021.  The decrease in the second quarter of 2022 compared to the first quarter was primarily attributable to $3.2 million of West Suburban acquisition-related costs for the second quarter of 2022 compared to $5.6 million for the first quarter of 2022.  Acquisition-related costs in the second quarter of 2022 included $1.7 million in data processing expense, compared to $4.9 million in the first quarter of 2022, primarily due to acquisition-related core system conversion costs. Occupancy, furniture and equipment costs also decreased $850,000 in the second quarter of 2022, compared to the prior quarter, due to net gains on branch sales during the quarter.  These decreases were partially offset by a $1.4 million increase in salaries and employee benefits largely as the result of bonuses paid to non-officer employees for efforts during the acquisition and conversion period.  Finally, our card related expense increased in the second quarter of 2022, compared to the first quarter, due to growth in customer transactions and related volume charges, as well as certain credits recorded in the first quarter of 2022.

The year over year increase in noninterest expense is primarily attributable to an $8.4 million increase in salaries and employee benefits, a $743,000 increase in occupancy, furniture and equipment, a $2.7 million increase in computer and data processing expense, and a $2.0 million increase in other expense. Officer incentive compensation increased $468,000 in the second quarter of 2022, compared to the second quarter of 2021, as incentive accruals increased in the current year due to the acquisition of West Suburban, as well as growth in our commercial lending team.  Employee benefits expense increased $1.4 million in the second quarter of 2022, compared to the second quarter of 2021, due to increases stemming from additional employees from our acquisition of West Suburban and increases in employee insurance costs as more employees returned to more routine medical appointments, many of which were on hold during the COVID-19 pandemic in 2020 and part of 2021. The increase in occupancy, furniture and equipment expense year over year was due to the addition of 34 West Suburban branches in late 2021. The $2.7 million increase in computer and data processing expense was primarily due to core system conversion costs relating to the West Suburban acquisition.  

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Finally, the increase in other expense was due primarily to growth in net teller banking and bill paying fees of $642,000, which was due to acquisition-related costs in the second quarter of 2022.    

Earning Assets

							June 30, 2022
Loans	As of						Percent Change From
(dollars in thousands)	June 30,		March 31,		June 30,		March 31,	June 30,
	2022		2022		2021		2022	2021
Commercial	$	806,725	$	695,545	$	344,084	16.0	134.5
Leases		230,677		211,132		154,512	9.3	49.3
Commercial real estate – Investor		1,076,678		965,767		569,745	11.5	89.0
Commercial real estate – Owner occupied		627,898		655,792		318,259	(4.3)	97.3
Construction		170,037		165,558		100,544	2.7	69.1
Residential real estate – Investor		61,220		62,846		50,127	(2.6)	22.1
Residential real estate – Owner occupied		207,836		203,118		105,419	2.3	97.2
Multifamily		310,706		298,686		161,628	4.0	92.2
HELOC		111,072		110,688		72,475	0.3	53.3
HELOC – Purchased		9,066		9,553		14,436	(5.1)	(37.2)
Other1		13,155		23,685		12,137	(44.5)	8.4
Total loans	$	3,625,070	$	3,402,370	$	1,903,366	6.5	90.5

¹ Other class includes consumer and overdrafts.

Total loans increased by $222.7 million at June 30, 2022, compared to March 31, 2022, and increased $1.72 billion for the year over year period.  Loan growth of $1.50 billion in the year over year period was driven by the acquisition of West Suburban, as well as loan growth in 2022 which primarily consisted of commercial, leases, commercial real estate-investor, construction and multifamily loans.  As required by ASU 2016-13, per adoption of the Current Expected Credit Losses accounting standard (“CECL”), the balance (or amortized cost basis) of purchased credit deteriorated loans (or “PCD loans”) acquired in our acquisitions are carried on a gross basis (rather than net of the associated credit loss estimate), and the expected credit losses for PCD loans are estimated and separately recognized as part of the allowance for credit losses.

							June 30, 2022
Securities	As of						Percent Change From
(dollars in thousands)	June 30,		March 31,		June 30,		March 31,	June 30,
	2022		2022		2021		2022	2021
Securities available-for-sale, at fair value
U.S. Treasury	$	214,820	$	220,563	$	4,086	(2.6)	N/M
U.S. government agencies		57,896		59,036		6,038	(1.9)	858.9
U.S. government agency mortgage-backed		141,836		153,148		18,939	(7.4)	648.9
States and political subdivisions		233,652		236,408		242,748	(1.2)	(3.7)
Corporate bonds		9,543		9,683		31,715	(1.4)	(69.9)
Collateralized mortgage obligations		641,498		696,513		101,912	(7.9)	529.5
Asset-backed securities		259,622		274,941		145,356	(5.6)	78.6
Collateralized loan obligations		175,549		166,158		29,154	5.7	502.1
Total securities available-for-sale	$	1,734,416	$	1,816,450	$	579,948	(4.5)	199.1

N/M - Not meaningful.

Our securities portfolio totaled $1.73 billion as of June 30, 2022, a decrease of $82.0 million from $1.82 billion as of March 31, 2022, and an increase of $1.15 billion from $579.9 million as of June 30, 2021. The decrease in the portfolio during the second quarter of 2022, compared to the prior quarter, was driven primarily by $72.8 million of maturities, calls and pay downs on U.S. government agency mortgage-backed, collateralized mortgage obligations, and asset-backed securities, as well as the effect of rising interest rates and widening credit spreads, which decreased the market value in the portfolio. Purchases during the quarter totaled $36.0 million while sales totaled $3.3 million resulting in a loss on sale of $33,000. The increase in the securities portfolio in the year over year period was primarily due to $1.07 billion of securities acquired as part of the acquisition of West Suburban. The portfolio currently consists of high quality fixed-rate and floating-rate securities, with all except one rated AA or better, displaying an effective duration of approximately 2.8 years.

8

Asset Quality

										June 30, 2022
Nonperforming assets	As of									Percent Change From
(dollars in thousands)	June 30,			March 31,			June 30,			March 31,	June 30,
	2022			2022			2021			2022	2021
Nonaccrual loans	$	35,712		$	35,973		$	22,784		(0.7)	56.7
Performing troubled debt restructured loans accruing interest		1,108			1,242			201		(10.8)	451.2
Loans past due 90 days or more and still accruing interest		5,274			743			136		609.8	N/M
Total nonperforming loans		42,094			37,958			23,121		10.9	82.1
Other real estate owned		1,624			2,374			1,877		(31.6)	(13.5)
Total nonperforming assets	$	43,718		$	40,332		$	24,998		8.4	74.9
30-89 days past due loans and still accruing interest	$	24,681		$	20,835		$	8,654
Nonaccrual loans to total loans		1.0	%		1.1	%		1.2	%
Nonperforming loans to total loans		1.2	%		1.1	%		1.2	%
Nonperforming assets to total loans plus OREO		1.2	%		1.2	%		1.3	%
Purchased credit-deteriorated loans to total loans		2.3	%		3.1	%		0.5	%
Allowance for credit losses	$	45,388		$	44,308		$	28,639
Allowance for credit losses to total loans		1.3	%		1.3	%		1.5	%
Allowance for credit losses to nonaccrual loans		127.1	%		123.2	%		125.7	%

N/M - Not meaningful.

Nonperforming loans consist of nonaccrual loans, performing troubled debt restructured loans accruing interest and loans 90 days or more past due and still accruing interest.  PCD loans acquired in our acquisitions of West Suburban and ABC Bank totaled $82.3 million, net of purchase accounting adjustments, at June 30, 2022.  PCD loans that meet the definition of nonperforming loans are included in our nonperforming disclosures.  Nonperforming loans to total loans was 1.2% for the second quarter of 2022, 1.1% for the first quarter of 2022, and 1.2% for the second quarter of 2021. Nonperforming assets to total loans plus OREO was 1.2% for both the second quarter of 2022, and the first quarter of 2022, and 1.3% for the second quarter of 2021. Our allowance for credit losses to total loans was 1.3% for both the second quarter of 2022 and the first quarter of 2022, and 1.5% for the second quarter of 2021.  

The following table shows classified loans by segment, which include nonaccrual loans, performing troubled debt restructurings, PCD loans if the risk rating so indicates, and all other loans considered substandard, for the following periods.

							June 30, 2022
Classified loans	As of						Percent Change From
(dollars in thousands)	June 30,		March 31,		June 30,		March 31,	June 30,
	2022		2022		2021		2022	2021
Commercial	$	31,577	$	29,267	$	482	7.9	N/M
Leases		2,005		2,641		3,007	(24.1)	(33.3)
Commercial real estate – Investor		30,407		8,809		5,063	245.2	500.6
Commercial real estate – Owner occupied		28,715		13,259		8,702	116.6	230.0
Construction		1,238		3,185		5,393	(61.1)	(77.0)
Residential real estate – Investor		1,246		1,544		1,082	(19.3)	15.2
Residential real estate – Owner occupied		3,785		4,862		4,578	(22.2)	(17.3)
Multifamily		1,336		1,369		8,477	(2.4)	(84.2)
HELOC		2,681		1,496		1,090	79.2	146.0
HELOC – Purchased		172		173		-	(0.6)	-
Other1		2		3		2	(33.3)	-
Total classified loans	$	103,164	$	66,608	$	37,876	54.9	172.4

¹ Other class includes consumer and overdrafts.

N/M - Not meaningful.

Increases in classified loans since June 30, 2021, were driven by our acquisition of West Suburban and the resultant increase in total loans during the fourth quarter of 2021.  The $36.6 million increase from the linked quarter is due to five larger credits being moved from watch to problem accruing status.

9

Allowance for Credit Losses on Loans and Unfunded Commitments

At June 30, 2022, our allowance for credit losses (“ACL”) on loans totaled $45.4 million, and our ACL on unfunded commitments, included in other liabilities, totaled $4.7 million.  In the second quarter of 2022, we recorded provision expense of $550,000 based on our assessment of nonperforming loan metrics and trends and estimated future credit losses, comprised of $1.3 million of provision for credit losses on loans, less a reversal of $778,000 of allowance on unfunded commitments.  We recorded net charge-offs of $250,000 in the second quarter of 2022, which reduced the ACL. In the first quarter of 2022, we recorded provision for credit losses on loans of $320,000 based on our assessment of nonperforming loan metrics and trends and estimated future credit losses, which was offset by a reversal of $320,000 of provision for credit losses on unfunded commitments, based on line utilization review.  In the second quarter of 2021, a $3.5 million release of provision expense was recorded due to revised expectations of future credit losses after one year of the COVID-19 pandemic. Our ACL on loans to total loans was 1.3% as of June 30, 2022 and March 31, 2022, compared to 1.5% as of June 30, 2021.

The decrease in our ACL on unfunded commitments at June 30, 2022 compared to March 31, 2022 is driven by a $778,000 reversal of provision expense in the quarter due to adjustments in our funding rate assumptions based on our analysis of the last 12 months of utilization as well as $223,000 of accretion recorded during the quarter stemming from our acquisition of West Suburban.  The ACL on unfunded commitments totaled $4.7 million as of June 30, 2022, $5.7 million as of March 31, 2022, and $2.2 million as of June 30, 2021.

Net Charge-off Summary

Loan Charge–offs, net of recoveries	Quarters Ended
(dollars in thousands)	June 30,		% of	March 31,		% of	June 30,		% of
	2022		Total 2	2022		Total 2	2021		Total 2
Commercial	$	44	17.6	$	-	-	$	190	292.3
Leases		-	-		-	-		28	43.1
Commercial real estate – Investor		225	90.0		213	72.7		(20)	(30.8)
Commercial real estate – Owner occupied		(7)	(2.8)		113	38.6		21	32.3
Construction		-	-		-	-		-	-
Residential real estate – Investor		(5)	(2.0)		(10)	(3.4)		(10)	(15.4)
Residential real estate – Owner occupied		(22)	(8.8)		(83)	(28.3)		(61)	(93.8)
Multifamily		-	-		-	-		-	-
HELOC		(31)	(12.4)		(35)	(11.9)		(72)	(110.8)
HELOC – Purchased		-	-		-	-		-	-
Other 1		46	18.4		95	32.3		(11)	(16.9)
Net charge–offs / (recoveries)	$	250	100.0	$	293	100.0	$	65	100.0

¹ Other class includes consumer and overdrafts.

² Represents the percentage of net charge-offs attributable to each category of loans.

Gross charge-offs for the second quarter of 2022 were $386,000, compared to $514,000 for the first quarter of 2022 and $301,000 for the second quarter of 2021.  Gross recoveries were $136,000 for the second quarter of 2022, compared to $221,000 for the first quarter of 2022, and $236,000 for the second quarter of 2021.  Continued recoveries are indicative of the ongoing aggressive efforts by management to effectively manage and resolve prior charge-offs.  

Deposits

Total deposits were $5.34 billion at June 30, 2022, a decrease of $201.7 million compared to $5.54 billion at March 31, 2022, primarily due to declines in our savings, NOW, and money market accounts of $125.7 million, demand deposits of $59.8 million, and a decrease in time deposits of $16.2 million.  Total deposits increased $2.66 billion in the year over year period, driven primarily by the $2.69 billion of deposits acquired with our West Suburban acquisition in December 2021.

Borrowings

As of June 30, 2022, March 31, 2022 and June 30, 2021, we had no other short-term borrowings, primarily due to sufficient deposit levels to meet short-term funding needs.

We were indebted on senior notes totaling $44.5 million, net of deferred issuance costs, as of June 30, 2022.  We were also indebted on $25.8 million of junior subordinated debentures, net of deferred issuance costs, which is

10

related to the trust preferred securities issued by our statutory trust subsidiary, Old Second Capital Trust II.  Subordinated debt totaled $59.3 million as of June 30, 2022, consisting of $60.0 million in principal issued on April 6, 2021, net of debt issuance cost of $750,000.  As of June 30, 2022, compared to March 31, 2022, notes payable and other borrowings decreased $7.0 million and is comprised of $11.0 million outstanding on a $20.0 million term note we originated to facilitate the March 2020 redemption of our trust preferred securities and related junior subordinated debentures issued by Old Second Capital Trust I.  During the three month period ending June 30, 2022, we paid off the remaining $6.0 million long-term FHLBC advance acquired in our ABC Bank acquisition that was to mature on February 2, 2026.

Non-GAAP Presentations

Management has disclosed in this earnings release certain non-GAAP financial measures to evaluate and measure our performance, including the presentation of adjusted net income, net interest income and net interest margin on a fully taxable equivalent basis, and our efficiency ratio calculations on a taxable equivalent basis. The net interest margin fully taxable equivalent is calculated by dividing net interest income on a tax equivalent basis by average earning assets for the period.  Consistent with industry practice, management has disclosed the efficiency ratio including and excluding certain items, which is discussed in the noninterest expense presentation on page 7.  

We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons.  We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis.  We believe these measures provide investors with information regarding balance sheet profitability, and we believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures should not be considered as a substitute for GAAP financial measures, and we strongly encourage investors to review the GAAP financial measures included in this earnings release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this earnings release with other companies’ non-GAAP financial measures having the same or similar names. The tables beginning on page 17 provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP equivalent.  

Cautionary Note Regarding Forward-Looking Statements

This earnings release and statements by our management may contain forward-looking statements within the Private Securities Litigation Reform Act of 1995.  Forward looking statements can be identified by words such  as “should,” “anticipate,” “expect,” “intend,” “believe,” “may,” “likely,” “will,” “forecast,” “project,” “looking forward,” “optimistic,” “potential,” “progress,” “prospect,” “trend,” “momentum” or other statements that indicate future periods.  Examples of forward-looking statements include, but are not limited to, statements regarding the economic outlook, our expectations around our mortgage banking expenses and run rate, loan growth, pipelines and customer activity, statements regarding our expectations with respect to our recent merger with West Suburban, and statements regarding the potential for expanded margins and future growth. Such forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.  The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements, (1) the strength of the United States economy in general and the strength of the local economies in which we conduct our operations may be different than expected, including, but not limited to, due to the negative impacts and disruptions resulting from the COVID-19 pandemic on the economies and communities we serve, which has had and may continue to have an adverse impact on our business, operations and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally; (2) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (3) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action; (4) risks related to future acquisitions, if any, including execution and integration risks; (5) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on us; (6) changes in interest rates, which may affect our net income, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of our assets, including our investment securities;  (7) with respect to the merger with West Suburban, the possibility that the anticipated benefits of the transaction, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as

11

a result of the impact of, or problems arising from, the integration of the two companies or as a result of other unexpected factors or events; and (8) the adverse effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as epidemics and pandemics, war or terrorist activities, essential utility outages, deterioration in the global economy, instability in the credit markets, disruptions in our customers’ supply chains or disruption in transportation.  Additional risks and uncertainties are contained in the “Risk Factors” and forward-looking statements disclosure in our most recent Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q. The inclusion of this forward-looking information should not be construed as a representation by us or any person that future events, plans, or expectations contemplated by us will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Conference Call

We will host a call on Thursday, July 28, 2022, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss our second quarter 2022 financial results.  Investors may listen to our call via telephone by dialing 888-506-0062, using Entry Code 888472.  Investors should call into the dial-in number set forth above at least 10 minutes prior to the scheduled start of the call.

A replay of the call will be available until 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on August 4, 2022, by dialing 877-481-4010, using Conference ID: 45859.

12

Old Second Bancorp, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

	(unaudited)
	June 30,		December 31,
	2022		2021
Assets
Cash and due from banks	$	53,295	$	38,565
Interest earning deposits with financial institutions		228,040		713,542
Cash and cash equivalents		281,335		752,107
Securities available-for-sale, at fair value		1,734,416		1,693,632
Federal Home Loan Bank Chicago ("FHLBC") and Federal Reserve Bank Chicago ("FRBC") stock		20,413		13,257
Loans held-for-sale		1,707		4,737
Loans		3,625,070		3,420,804
Less: allowance for credit losses on loans		45,388		44,281
Net loans		3,579,682		3,376,523
Premises and equipment, net		81,901		88,005
Other real estate owned		1,624		2,356
Mortgage servicing rights, at fair value		10,722		7,097
Goodwill		86,332		86,332
Core deposit intangible		14,980		16,304
Bank-owned life insurance ("BOLI")		105,496		105,300
Deferred tax assets, net		32,481		6,100
Other assets		54,454		60,439
Total assets	$	6,005,543	$	6,212,189
Liabilities
Deposits:
Noninterest bearing demand	$	2,078,272	$	2,093,494
Interest bearing:
Savings, NOW, and money market		2,803,201		2,868,928
Time		461,382		503,810
Total deposits		5,342,855		5,466,232
Securities sold under repurchase agreements		37,599		50,337
Junior subordinated debentures		25,773		25,773
Subordinated debentures		59,254		59,212
Senior notes		44,533		44,480
Notes payable and other borrowings		11,000		19,074
Other liabilities		35,625		45,054
Total liabilities		5,556,639		5,710,162
Stockholders’ Equity
Common stock		44,705		44,705
Additional paid-in capital		201,282		202,443
Retained earnings		271,831		252,011
Accumulated other comprehensive (loss) income		(65,244)		8,768
Treasury stock		(3,670)		(5,900)
Total stockholders’ equity		448,904		502,027
Total liabilities and stockholders’ equity	$	6,005,543	$	6,212,189

13

Old Second Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands, except share data)

	(unaudited)				(unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Interest and dividend income
Loans, including fees	$	38,229	$	20,815	$	74,595	$	43,022
Loans held-for-sale		32		38		89		93
Securities:
Taxable		6,670		1,832		11,723		3,447
Tax exempt		1,413		1,259		2,846		2,566
Dividends from FHLBC and FRBC stock		263		113		416		228
Interest bearing deposits with financial institutions		782		137		1,051		229
Total interest and dividend income		47,389		24,194		90,720		49,585
Interest expense
Savings, NOW, and money market deposits		347		217		744		458
Time deposits		265		409		542		909
Securities sold under repurchase agreements		9		21		20		52
Junior subordinated debentures		284		284		564		564
Subordinated debentures		547		517		1,093		517
Senior notes		578		673		1,063		1,346
Notes payable and other borrowings		95		119		198		242
Total interest expense		2,125		2,240		4,224		4,088
Net interest and dividend income		45,264		21,954		86,496		45,497
Provision for (release of) credit losses		550		(3,500)		550		(6,500)
Net interest and dividend income after provision for (release of) credit losses		44,714		25,454		85,946		51,997
Noninterest income
Wealth management		2,506		2,389		5,204		4,540
Service charges on deposits		2,328		1,221		4,402		2,416
Secondary mortgage fees		50		272		189		594
Mortgage servicing rights mark to market gain (loss)		82		(1,033)		3,060		80
Mortgage servicing income		579		507		1,098		1,074
Net (loss) gain on sales of mortgage loans		(262)		1,895		1,233		5,616
Securities (losses) gains, net		(33)		2		(33)		2
Change in cash surrender value of BOLI		72		423		196		757
Card related income		2,965		1,666		5,532		3,113
Other income		924		577		1,793		1,027
Total noninterest income		9,211		7,919		22,674		19,219
Noninterest expense
Salaries and employee benefits		21,332		12,896		41,299		26,402
Occupancy, furniture and equipment		3,046		2,303		6,745		4,770
Computer and data processing		4,006		1,304		10,274		2,602
FDIC insurance		702		192		1,112		393
General bank insurance		351		277		666		553
Amortization of core deposit intangible		659		115		1,324		235
Advertising expense		194		95		376		155
Card related expense		1,057		626		1,591		1,219
Legal fees		179		135		436		190
Consulting & management fees		523		250		1,139		667
Other real estate expense, net		87		77		75		113
Other expense		5,113		3,131		10,464		5,840
Total noninterest expense		37,249		21,401		75,501		43,139
Income before income taxes		16,676		11,972		33,119		28,077
Provision for income taxes		4,429		3,152		8,852		7,378
Net income	$	12,247	$	8,820	$	24,267	$	20,699
Basic earnings per share	$	0.28	$	0.30	$	0.55	$	0.71
Diluted earnings per share		0.27		0.30		0.54		0.70
Dividends declared per share		0.05		0.05		0.10		0.06

Ending common shares outstanding	44,562,068	28,707,737	44,562,068	28,707,737
Weighted-average basic shares outstanding	44,499,395	28,849,015	44,480,326	29,036,354
Weighted-average diluted shares outstanding	45,246,736	29,367,472	45,204,460	29,574,962

14

Old Second Bancorp, Inc. and Subsidiaries

Quarterly Consolidated Average Balance

(In thousands, unaudited)

		2021							2022
Assets	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		1st Qtr		2nd Qtr
Cash and due from banks	$	28,461	$	29,985	$	29,760	$	34,225	$	42,972	$	53,371
Interest earning deposits with financial institutions		359,576		499,555		523,561		587,721		635,302		426,820
Cash and cash equivalents		388,037		529,540		553,321		621,946		678,274		480,191
Securities available-for-sale, at fair value		532,230		614,066		663,450		1,032,273		1,807,875		1,792,099
FHLBC and FRBC stock		9,917		9,917		9,917		11,042		16,066		20,994
Loans held-for-sale		8,616		4,860		4,908		4,271		6,707		3,050
Loans		2,006,157		1,926,105		1,884,788		2,388,746		3,397,827		3,505,806
Less: allowance for credit losses on loans		34,540		31,024		28,639		34,567		44,341		44,354
Net loans		1,971,617		1,895,081		1,856,149		2,354,179		3,353,486		3,461,452
Premises and equipment, net		45,378		44,847		44,451		59,796		87,564		84,599
Other real estate owned		2,213		2,053		1,930		1,954		2,399		1,850
Mortgage servicing rights, at fair value		4,814		5,499		5,020		5,555		8,218		10,525
Goodwill		18,604		18,604		18,604		19,340		86,332		86,332
Core deposit intangible		2,115		1,998		1,883		6,747		15,977		15,286
Bank-owned life insurance ("BOLI")		63,259		63,633		64,008		78,217		105,396		105,463
Deferred tax assets, net		8,228		7,782		6,487		9,273		10,689		27,154
Other assets		42,877		40,952		43,032		106,880		54,412		43,100
Total other assets		187,488		185,368		185,415		287,762		370,987		374,309
Total assets	$	3,097,905	$	3,238,832	$	3,273,160	$	4,311,473	$	6,233,395	$	6,132,095
Liabilities
Deposits:
Noninterest bearing demand	$	937,039	$	1,012,163	$	1,029,705	$	1,200,445	$	2,099,283	$	2,120,428
Interest bearing:
Savings, NOW, and money market		1,237,177		1,301,444		1,341,536		2,091,380		2,893,508		2,871,861
Time		399,310		359,635		331,482		370,919		495,452		469,009
Total deposits		2,573,526		2,673,242		2,702,723		3,662,744		5,488,243		5,461,298
Securities sold under repurchase agreements		82,475		67,737		46,339		47,571		39,204		34,496
Other short-term borrowings		-		1		-		-		-		-
Junior subordinated debentures		25,773		25,773		25,773		25,773		25,773		25,773
Subordinated debentures		-		56,081		59,180		59,201		59,222		59,244
Senior notes		44,389		44,415		44,441		44,468		44,494		44,520
Notes payable and other borrowings		23,330		22,250		21,171		20,090		19,009		13,103
Other liabilities		37,801		36,553		53,370		68,314		60,818		32,636
Total liabilities		2,787,294		2,926,052		2,952,997		3,928,161		5,736,763		5,671,070
Stockholders' equity
Common stock		34,957		34,957		34,958		38,248		44,705		44,705
Additional paid-in capital		121,578		120,359		120,857		148,528		202,828		202,544
Retained earnings		242,201		251,134		258,944		260,181		258,073		267,912
Accumulated other comprehensive income (loss)		14,496		13,971		14,965		10,986		(3,074)		(49,151)
Treasury stock		(102,621)		(107,641)		(109,561)		(74,631)		(5,900)		(4,985)
Total stockholders' equity		310,611		312,780		320,163		383,312		496,632		461,025
Total liabilities and stockholders' equity	$	3,097,905	$	3,238,832	$	3,273,160	$	4,311,473	$	6,233,395	$	6,132,095
Total Earning Assets	$	2,916,496	$	3,054,503	$	3,086,624	$	4,024,053	$	5,863,777	$	5,748,769
Total Interest Bearing Liabilities		1,812,454		1,877,336		1,869,922		2,659,402		3,576,662		3,518,006

15

Old Second Bancorp, Inc. and Subsidiaries

Quarterly Consolidated Statements of Income

(In thousands, except per share data, unaudited)

	2021								2022
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		1st Qtr		2nd Qtr
Interest and Dividend Income
Loans, including fees	$	22,207	$	20,815	$	21,315	$	26,328	$	36,366	$	38,229
Loans held-for-sale		55		38		39		33		57		32
Securities:
Taxable		1,615		1,832		1,835		2,817		5,053		6,670
Tax exempt		1,307		1,259		1,285		1,323		1,433		1,413
Dividends from FHLB and FRBC stock		115		113		114		114		153		263
Interest bearing deposits with financial institutions		92		137		203		224		269		782
Total interest and dividend income		25,391		24,194		24,791		30,839		43,331		47,389
Interest Expense
Savings, NOW, and money market deposits		241		217		209		294		397		347
Time deposits		500		409		330		271		277		265
Securities sold under repurchase agreements		31		21		15		15		11		9
Junior subordinated debentures		280		284		286		283		280		284
Subordinated debentures		-		517		547		546		546		547
Senior notes		673		673		673		673		485		578
Notes payable and other borrowings		123		119		113		108		103		95
Total interest expense		1,848		2,240		2,173		2,190		2,099		2,125
Net interest and dividend income		23,543		21,954		22,618		28,649		41,232		45,264
(Release of) provision for credit losses		(3,000)		(3,500)		(1,500)		12,326		-		550
Net interest and dividend income after (release of) provision for credit losses		26,543		25,454		24,118		16,323		41,232		44,714
Noninterest Income
Wealth management		2,151		2,389		2,372		2,421		2,698		2,506
Service charges on deposits		1,195		1,221		1,368		1,624		2,074		2,328
Secondary mortgage fees		322		272		240		210		139		50
Mortgage servicing rights mark to market gain (loss)		1,113		(1,033)		(282)		1,463		2,978		82
Mortgage servicing income		567		507		572		534		519		579
Net gain (loss) on sales of mortgage loans		3,721		1,895		2,186		1,498		1,495		(262)
Securities gains (losses), net		-		2		244		(14)		-		(33)
Change in cash surrender value of BOLI		334		423		406		227		124		72
Card related income		1,447		1,666		1,624		1,579		2,567		2,965
Other income		450		577		610		1,129		869		924
Total noninterest income		11,300		7,919		9,340		10,671		13,463		9,211
Noninterest Expense
Salaries and employee benefits		13,506		12,896		12,964		18,325		19,967		21,332
Occupancy, furniture and equipment		2,467		2,303		2,418		6,395		3,699		3,046
Computer and data processing		1,298		1,304		1,477		3,859		6,268		4,006
FDIC insurance		201		192		211		371		410		702
General bank insurance		276		277		301		360		315		351
Amortization of core deposit intangible		120		115		113		296		665		659
Advertising expense		60		95		107		81		182		194
Card related expense		593		626		662		657		534		1,057
Legal fees		55		135		455		460		257		179
Consulting & management fees		417		250		247		4,091		616		523
Other real estate expense (gain), net		36		77		25		29		(12)		87
Other expense		2,709		3,131		3,149		3,609		5,351		5,113
Total noninterest expense		21,738		21,401		22,129		38,533		38,252		37,249
Income (loss) before income taxes		16,105		11,972		11,329		(11,539)		16,443		16,676
Provision for (benefit from) income taxes		4,226		3,152		2,917		(2,472)		4,423		4,429
Net income (loss)	$	11,879	$	8,820	$	8,412	$	(9,067)	$	12,020	$	12,247
Basic earnings per share (GAAP)	$	0.41	$	0.30	$	0.30	$	(0.27)	$	0.27	$	0.28
Diluted earnings per share (GAAP)		0.40		0.30		0.29		(0.26)		0.27		0.27
Dividends paid per share		0.01		0.05		0.05		0.05		0.05		0.05

16

Reconciliation of Non-GAAP Financial Measures

The tables below provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the periods indicated. Dollar amounts below in thousands:

	Quarters Ended
	June 30,		March 31,		June 30,
	2022		2022		2021
Net Income
Income before income taxes (GAAP)	$	16,676	$	16,443	$	11,972
Pre-tax income adjustments:
Merger-related costs, net of gains on branch sales		2,131		5,335		-
Adjusted net income before taxes		18,807		21,778		11,972
Taxes on adjusted net income		4,995		5,858		3,152
Adjusted net income (non-GAAP)	$	13,812	$	15,920	$	8,820
Basic earnings per share (GAAP)	$	0.28	$	0.27	$	0.30
Diluted earnings per share (GAAP)		0.27		0.27		0.30
Adjusted basic earnings per share excluding acquisition-related costs (non-GAAP)		0.31		0.36		0.30
Adjusted diluted earnings per share excluding acquisition-related costs (non-GAAP)		0.31		0.35		0.30

	Quarters Ended
	June 30,			March 31,			June 30,
	2022			2022			2021
Net Interest Margin
Interest income (GAAP)	$	47,389		$	43,331		$	24,194
Taxable-equivalent adjustment:
Loans		6			5			3
Securities		376			381			334
Interest income (TE)		47,771			43,717			24,531
Interest expense (GAAP)		2,125			2,099			2,240
Net interest income (TE)	$	45,646		$	41,618		$	22,291
Net interest income (GAAP)	$	45,264		$	41,232		$	21,954
Average interest earning assets	$	5,748,823		$	5,863,777		$	3,054,503
Net interest margin (GAAP)		3.16	%		2.85	%		2.88	%
Net interest margin (TE)		3.18	%		2.88	%		2.93	%

17

	GAAP									Non-GAAP
		Three Months Ended									Three Months Ended
	June 30,			March 31,			June 30,			June 30,			March 31,			June 30,
	2022			2022			2021			2022			2022			2021
Efficiency Ratio / Adjusted Efficiency Ratio
Noninterest expense	$	37,249		$	38,252		$	21,401		$	37,249		$	38,252		$	21,401
Less amortization of core deposit		659			665			115			659			665			115
Less other real estate expense, net		87			(12)			77			87			(12)			77
Less merger related costs, net of gain on branch sales		N/A			N/A			N/A			2,132			5,334			-
Noninterest expense less adjustments	$	36,503		$	37,599		$	21,209		$	34,371		$	32,265		$	21,209
Net interest income	$	45,264		$	41,232		$	21,954		$	45,264		$	41,232		$	21,954
Taxable-equivalent adjustment:
Loans		N/A			N/A			N/A			6			5			3
Securities		N/A			N/A			N/A			376			381			334
Net interest income including adjustments		45,264			41,232			21,954			45,646			41,618			22,291
Noninterest income		9,211			13,463			7,919			9,211			13,463			7,919
Less securities losses (gains), net		(33)			-			2			(33)			-			2
Less MSRs mark to market gain (loss)		82			2,978			(1,033)			82			2,978			(1,033)
Taxable-equivalent adjustment:
Change in cash surrender value of BOLI		N/A			N/A			N/A			19			33			112
Noninterest income (less) / including adjustments		9,162			10,485			8,950			9,181			10,518			9,062
Net interest income including adjustments plus noninterest income (less) / including adjustments	$	54,426		$	51,717		$	30,904		$	54,827		$	52,136		$	31,353
Efficiency ratio / Adjusted efficiency ratio		67.07	%		72.70	%		68.63	%		62.69	%		61.89	%		67.65	%

18