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Acquisition | 3 Months Ended
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Mar. 31, 2025
Acquisition |
Acquisition | Note 2 – Acquisition ​ Completed Acquisitions ​ On December 6, 2024, the Company completed its purchase of five Illinois branch locations in the southeast Chicago metropolitan statistical area from First Merchants Bank (“FRME”), the wholly owned subsidiary of First Merchants Corporation. This acquisition brought increased scale as the Company expanded its current branch network in the Chicago market. At closing, the Company recorded $24.8 million of assets, including $7.1 million of loans and $3.9 million of premises and equipment, and $268.0 million of deposits, net of fair value adjustments. ​ The Company recorded the estimate of fair value based on initial valuations available at December 6, 2024. Estimated fair values are subject to adjustment for up to one year after December 6, 2024. Based on current valuations, $13.3 million of core deposit intangible was recorded. Goodwill of $6.8 million was ultimately recorded from the branch purchase transaction. None of the $6.8 million of goodwill recorded is expected to be deductible for income tax purposes. ​ The following table provides the purchase price allocation as of the December 6, 2024, branch purchase transaction with FRME, including the assets acquired and liabilities assumed at their estimated fair values as of that date, as recorded by the Company. ​
​ | ​ | ​ | ​
First Merchants Transaction Summary
As of Date of Transaction
​ | ​ | ​ | ​
​ | ​ | December 6, 2024
Assets | ​ | ​ | ​
Cash and due from banks | ​ | $ | 419
Loans, net of purchase accounting adjustments | ​ | ​ | 7,149
Premises and equipment | ​ | ​ | 3,934
Core deposit intangible | ​ | ​ | 13,254
Other assets | ​ | ​ | 19
Total assets | ​ | $ | 24,775
​ | ​ | ​ | ​
Liabilities | ​ | ​ | ​
Noninterest bearing demand | ​ | $ | 26,497
Savings, NOW and money market | ​ | ​ | 157,126
Time | ​ | ​ | 84,344
Total deposits | ​ | ​ | 267,967
Other liabilities | ​ | ​ | 585
Total liabilities | ​ | ​ | 268,552
​ | ​ | ​ | ​
Cash consideration received | ​ | ​ | (237,023)
Total liabilities assumed and cash consideration received for transaction | ​ | $ | 31,529
Goodwill | ​ | $ | 6,754
​ Expenses related to the FRME branch transaction totaled $168,000 and $1.9 million during the three months ended March 31, 2025, and the year ended December 31, 2024, respectively. The expenses related to the transaction are reported within noninterest expense based on the line items impacted, which are primarily salaries and employee benefits, computer and data processing, legal fees, and other expense in the Consolidated Statements of Income. ​ All acquired loans are considered non-PCD as none of the loans met the definition of a purchase credit deteriorated loan. ​ ​ ​ Pending Acquisitions ​ On February 24, 2025, Old Second and Bancorp Financial, Inc. entered into an Agreement and Plan of Merger (the “merger agreement”). The merger agreement provides that, upon the terms and subject to the conditions set forth therein, Bancorp Financial will merge with and into Old Second, with Old Second continuing as the surviving entity (the “merger”). Immediately following the merger, Evergreen Bank Group (“Evergreen Bank”), an Illinois state-chartered bank and wholly-owned subsidiary of Bancorp Financial, will merge with and into Old Second National Bank, a national banking association and wholly-owned subsidiary of Old Second, with Old Second National Bank continuing as the surviving bank (the “bank merger”). ​ Subject to the terms and conditions of the merger agreement, at the effective time of the merger, each Bancorp Financial stockholder will receive 2.5814 shares of Old Second common stock and $15.93 in cash for each share of Bancorp Financial common stock owned by the stockholder. Holders of Bancorp Financial common stock, subject to certain exceptions, will also be entitled to receive cash in lieu of fractional shares of Old Second common stock. ​ The parties expect to complete the merger in the third quarter of 2025, subject to satisfaction of closing conditions, including receipt of customary required regulatory approvals and the approval of the merger agreement by the Bancorp Financial stockholders.

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