Old Second Bancorp

To be a local financial partner helping our community prosper by becoming the premier banking franchise in the Chicago market.

Old Second Bancorp SWOT Analysis

Updated: October 6, 2025 • 2025-Q4 Analysis

How to Use This Analysis

This analysis for Old Second Bancorp was created using Alignment.io™ methodology - a proven strategic planning system trusted in over 75,000 strategic planning projects. We've designed it as a helpful companion for your team's strategic process, leveraging leading AI models to analyze publicly available data.

While this represents what AI sees from public data, you know your company's true reality. That's why we recommend using Alignment.io and The System of Alignment™ to conduct your strategic planning—using these AI-generated insights as inspiration and reference points to blend with your team's invaluable knowledge.

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The Old Second Bancorp SWOT analysis reveals a pivotal moment for the institution. Its recent acquisition created significant scale and a powerful deposit franchise, positioning it as a formidable player in the Chicago market. However, this strength is tested by industry-wide Net Interest Margin compression and the critical need to realize promised expense synergies. The path to becoming the premier community franchise hinges on management's ability to execute flawlessly on operational efficiency while simultaneously leveraging its tenured commercial banking team to drive profitable, organic growth. The key priorities identified—margin protection, efficiency gains, and customer deepening—are precisely the right levers to pull to translate its newfound scale into sustainable, top-tier shareholder returns and solidify its market leadership for the long term.

Wintrust Financial First Midwest Bank (Old National) Byline Bancorp JPMorgan Chase BMO Harris Bank

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be a local financial partner helping our community prosper by becoming the premier banking franchise in the Chicago market.

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Strengths

DEPOSITS: Strong, stable core deposit base provides low-cost funding advantage
SCALE: Post-acquisition scale provides significant operating leverage potential
CREDIT: Excellent credit quality metrics with very low non-performing assets
LOANS: Solid commercial loan growth outpacing industry averages last 12 mos
LEADERSHIP: Experienced management team with a proven track record of M&A

Weaknesses

NIM: Net Interest Margin compression due to rising deposit costs in FY24
EFFICIENCY: Noninterest expense remains elevated post-merger integration
FEES: Modest noninterest income as a percentage of total revenue vs peers
DIGITAL: Mobile banking app ratings and features trail larger competitors
CONCENTRATION: Geographic concentration in the Chicago metro area economy

Opportunities

SYNERGIES: Realizing remaining cost saves from the West Suburban acquisition
CROSS-SELL: Deepening relationships with acquired customers (wealth, treasury)
TALENT: Recruiting bankers from larger, more bureaucratic competitors
PRICING: Opportunity to reprice loan portfolio in a higher rate environment
NICHES: Expanding into specialized lending verticals like healthcare finance

Threats

FUNDING: Intense competition for deposits driving up funding costs sharply
RECESSION: Economic slowdown could increase credit losses, especially in CRE
REGULATION: Heightened scrutiny on regional banks post-SVB failure event
CYBERSECURITY: Constant and evolving threat of sophisticated cyber attacks
FINTECH: Non-bank lenders eroding market share in small business lending

Key Priorities

MARGIN: Protect and expand Net Interest Margin through disciplined pricing
EFFICIENCY: Execute on cost synergies to improve the bank's efficiency ratio
GROWTH: Drive organic commercial loan growth by leveraging local expertise
INTEGRATION: Deepen relationships with acquired customers via cross-selling

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Old Second Bancorp OKR

Updated: October 6, 2025 • 2025-Q4 Analysis

This Old Second Bancorp OKR plan is a masterclass in focus and execution. It rightly targets the most critical levers identified in the strategic analysis: margin, efficiency, and growth. The objectives 'FORTIFY MARGINS' and 'DRIVE EFFICIENCY' are a direct and necessary response to current market headwinds and the need to deliver on merger promises. 'ACCELERATE GROWTH' and 'DEEPEN RELATIONSHIPS' correctly pivot from integration to offense, ensuring the franchise leverages its new scale to capture market share. The key results are specific, measurable, and strike an excellent balance between ambitious goals and achievable outcomes. This plan provides the clarity and alignment needed to navigate a challenging environment and emerge as a dominant force in the Chicago market.

Wintrust Financial First Midwest Bank (Old National) Byline Bancorp JPMorgan Chase BMO Harris Bank

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be a local financial partner helping our community prosper by becoming the premier banking franchise in the Chicago market.

FORTIFY MARGINS

Protect and expand our core profitability engine.

PRICING: Implement a new deposit pricing model to reduce interest expense by 5 basis points by year-end.
GROWTH: Originate $400M in high-quality, higher-yielding C&I loans with strong relationship components.
TREASURY: Increase treasury management fee income by 15% by deepening relationships with our top 100 clients.
PORTFOLIO: Shift $150M of the investment portfolio into higher-yielding securities without undue risk.

DRIVE EFFICIENCY

Achieve best-in-class operational leverage.

RATIO: Lower the non-interest expense to average assets ratio to below 2.00% for two consecutive quarters.
AUTOMATION: Deploy AI-powered underwriting to reduce commercial loan processing time from 20 days to 15 days.
VENDORS: Consolidate three major vendor contracts to achieve a minimum of $2M in annualized cost savings by Q4.
FOOTPRINT: Optimize our branch network by consolidating 5 locations, reinvesting savings into digital channels.

ACCELERATE GROWTH

Win profitable market share in our core business.

ORGANIC: Achieve 8% annualized organic loan growth, excluding acquired loans, focused on C&I relationships.
TEAMS: Hire two new commercial lending teams with established books of business in expansion markets by Q3.
LEADS: Generate 500 new qualified commercial leads through a targeted digital marketing campaign for SMBs.
REFERRALS: Launch a new internal referral program to increase wealth management referrals from banking by 25%.

DEEPEN RELATIONSHIPS

Become the primary bank for our acquired customers.

CROSS-SELL: Increase the average number of products per acquired commercial customer from 1.8 to 2.5.
ONBOARDING: Achieve a 90% satisfaction score on our new, proactive customer onboarding process post-acquisition.
WEALTH: Convert $50M in deposits from acquired high-net-worth households into wealth management assets.
ENGAGEMENT: Increase active mobile banking users from the acquired customer base by 30% through targeted outreach.

METRICS

Return on Average Assets (ROAA): 1.25%
Efficiency Ratio: <55%
Tangible Book Value (TBV) Per Share Growth: 10%

VALUES

Community Focus
Integrity
Exceptional Service
Teamwork

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Old Second Bancorp Retrospective

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GPT

Old Second Bancorp Q1 2024 Earnings Release & Investor Presentation
Old Second Bancorp Official Website (Investor Relations, Leadership)
SEC Filings (10-K, 10-Q) for OSBC
Financial data aggregators for market cap and peer comparisons

Wintrust Financial First Midwest Bank (Old National) Byline Bancorp JPMorgan Chase BMO Harris Bank

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be a local financial partner helping our community prosper by becoming the premier banking franchise in the Chicago market.

Toggle Theme

What Went Well

COMMERCIAL: C&I loan growth remained strong, exceeding internal targets
CREDIT: Credit quality metrics held up well with minimal net charge-offs
CAPITAL: Maintained robust capital levels well above regulatory minimums
INTEGRATION: Successfully completed systems conversion from acquisition
EXPENSE: Management demonstrated discipline on controllable expenses

Not So Well

DEPOSITS: Deposit costs increased faster than anticipated, squeezing margins
NIM: Net Interest Margin compressed sequentially due to funding pressures
FEES: Wealth management and mortgage banking income were soft
STOCK: Share price underperformed the regional bank index for the quarter
GUIDANCE: Outlook suggests continued pressure on Net Interest Margin

Learnings

FUNDING: The deposit market is more competitive than previously modeled
MARGINS: Asset sensitivity is not providing the expected lift in this cycle
DIVERSIFICATION: Need to grow noninterest income streams to buffer NIM swings
COMMUNICATION: Must clearly articulate long-term value beyond short-term headwinds
EFFICIENCY: Cost control is the most critical lever in a compressed margin world

Action Items

PRICING: Implement more disciplined deposit pricing strategies by segment
TREASURY: Proactively market treasury management services to lock in deposits
COSTS: Identify and execute on an additional $5M in non-personnel cost saves
WEALTH: Launch a targeted campaign to convert acquired bank customers to wealth
INVESTORS: Refine investor messaging to focus on franchise value and tangible book

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Organization	SWOT Analysis	OKR Plan	Top 6	Retrospective

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Old Second Bancorp Market

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Old Second Bancorp Q1 2024 Earnings Release & Investor Presentation
Old Second Bancorp Official Website (Investor Relations, Leadership)
SEC Filings (10-K, 10-Q) for OSBC
Financial data aggregators for market cap and peer comparisons

Founded: 1871
Market Share: Top 5 deposit share in key suburban Chicago counties like Kane, DuPage.
Customer Base: Small-to-medium businesses (SMBs), commercial real estate investors, affluent individuals.
Category:
Regional Banking
SIC Code: 6021 National Commercial Banks
NAICS Code: 522110 Commercial Banking
Location: Aurora, Illinois
Zip Code: 60506
Congressional District: IL-11 AURORA
Employees: 1100

Competitors

Wintrust Financial View Analysis

First Midwest Bank (Old National) Request Analysis

Byline Bancorp View Analysis

JPMorgan Chase View Analysis

BMO Harris Bank Request Analysis

Products & Services

No products or services data available

Distribution Channels

Old Second Bancorp Business Model Analysis

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Claude

Gemini

GPT

Old Second Bancorp Q1 2024 Earnings Release & Investor Presentation
Old Second Bancorp Official Website (Investor Relations, Leadership)
SEC Filings (10-K, 10-Q) for OSBC
Financial data aggregators for market cap and peer comparisons

Problem

SMBs need capital and treasury services
Lack of personal service from mega-banks
Slow loan decisions from large institutions

Solution

Commercial loans and treasury management
Dedicated relationship banker model
Local underwriting and decision-making

Key Metrics

Net Interest Margin (NIM)
Efficiency Ratio
Loan & Deposit Growth
Return on Average Assets (ROAA)

Unique

Scale of a large bank, service of a local one
Deep expertise in the Chicago metro economy
150+ year history of community commitment

Advantage

Low-cost core deposit franchise
Entrenched customer relationships
Strong market share in wealthy suburbs

Channels

Commercial Relationship Managers
Branch Network
Online & Mobile Banking Platform

Customer Segments

Small-to-medium sized businesses ($5-100M rev)
Commercial real estate investors
Affluent and high-net-worth individuals

Costs

Salaries and employee benefits
Interest expense on deposits
Technology and occupancy expenses

Old Second Bancorp Product Market Fit Analysis

Updated: October 6, 2025

Old Second Bank provides Chicago-area businesses the financial tools and capital of a large institution, but with the local expertise and responsive decision-making of a community partner. This unique combination helps clients seize opportunities and accelerate their growth, ensuring they have a dedicated partner invested in their success right here in their own neighborhood.

Local market expertise accelerates your growth

Responsive decision-making captures opportunity

Full-service capabilities with community focus

Before State

Feeling like a number at a large bank
Slow, bureaucratic loan decisions
Generic, one-size-fits-all products

After State

A personal relationship with your banker
Fast, local decision-making power
Tailored financial solutions for growth

Negative Impacts

Missed business growth opportunities
Frustration with impersonal service
Lack of a trusted financial advisor

Positive Outcomes

Capital to expand your business faster
Confidence in your financial partner
Simplified banking, more time for business

Key Metrics

Customer Retention Rates - Est. 90%+

Net Promoter Score (NPS) - Not publicly disclosed

User Growth Rate - Modest organic, high via M&A

Customer Feedback/Reviews - ~3.5 stars on Google

Repeat Purchase Rates) - High for core banking

Requirements

A desire for relationship-based banking
Operating business in Chicagoland
Need for commercial lending/treasury

Why Old Second Bancorp

Empowered local relationship managers
Streamlined credit approval processes
Investing in modern treasury management

Old Second Bancorp Competitive Advantage

Our bankers live in and know your market
We are sized to be nimble and responsive
150+ year history of community commitment

Proof Points

Funded thousands of local businesses
Top deposit share in our core counties
Consistent recognition as a top workplace

Old Second Bancorp Market Positioning

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Claude

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GPT

Old Second Bancorp Q1 2024 Earnings Release & Investor Presentation
Old Second Bancorp Official Website (Investor Relations, Leadership)
SEC Filings (10-K, 10-Q) for OSBC
Financial data aggregators for market cap and peer comparisons

Strategic pillars derived from our vision-focused SWOT analysis

Deepen market share in core suburban Chicago.

Expand middle-market commercial lending.

Achieve digital feature parity with larger rivals.

Drive efficiency through scale and tech.

What You Do

Provide commercial and retail banking services with local decision-making.

Target Market

Businesses and individuals in the Chicago metropolitan area.

Differentiation

Deep community roots and local expertise
Responsive service from experienced bankers

Revenue Streams

Net interest income from loans/securities
Noninterest income from fees and services

Old Second Bancorp Operations and Technology

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Claude

Gemini

GPT

Old Second Bancorp Q1 2024 Earnings Release & Investor Presentation
Old Second Bancorp Official Website (Investor Relations, Leadership)
SEC Filings (10-K, 10-Q) for OSBC
Financial data aggregators for market cap and peer comparisons

Company Operations

Organizational Structure: Traditional bank holding company structure with a focus on regional markets.
Supply Chain: Capital sourced from customer deposits and wholesale funding markets.
Tech Patents: Utilizes third-party core banking software (e.g., Fiserv, FIS).
Website: https://www.oldsecond.com/

Top Clients

Board Members

Old Second Bancorp Competitive Forces

Threat of New Entry

MODERATE: While regulatory hurdles are high, fintechs and digital-only banks have lowered the barriers to entry for specific services.

Supplier Power

MODERATE: Depositors (suppliers of capital) have power to demand higher rates, but switching costs create some stickiness.

Buyer Power

HIGH: Borrowers and depositors have many banking choices, leading to significant price sensitivity on loans and deposit rates.

Threat of Substitution

HIGH: Fintechs (SoFi, Square), online-only banks (Ally), and private credit funds offer compelling alternatives to traditional banking.

Competitive Rivalry

VERY HIGH: Intense competition from money-center banks (Chase), super-regionals (US Bank), community banks, and credit unions.

Analysis of AI Strategy

Updated: October 6, 2025 • 2025-Q4 Analysis

The Old Second Bancorp AI SWOT analysis underscores a critical imperative: AI is not a futuristic luxury but a near-term competitive necessity. While the bank possesses a valuable core asset in its rich customer data, it is hampered by legacy systems and a talent gap. The greatest opportunity lies in deploying AI for operational efficiency—automating underwriting, compliance, and service to drive down the efficiency ratio. This isn't about moonshot projects; it's about practical application to fortify the core business. The primary threat comes from fintechs and large banks that are already leveraging AI to offer superior experiences and pricing. The strategic path is clear: partner with established vendors to integrate proven AI tools that enhance risk management and drive efficiency, creating the capacity for future, more ambitious AI-driven growth initiatives.

Wintrust Financial First Midwest Bank (Old National) Byline Bancorp JPMorgan Chase BMO Harris Bank

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To be a local financial partner helping our community prosper by becoming the premier banking franchise in the Chicago market.

Strengths

DATA: Rich proprietary transaction data from a large, stable customer base
RELATIONSHIPS: High-touch model provides context for AI-driven insights
SCALE: Sufficient scale to justify investment in targeted AI solutions
PARTNERSHIPS: Existing relationships with core providers (Fiserv) for AI tools

Weaknesses

LEGACY: Core banking infrastructure may not be API-friendly for new AI tools
TALENT: Lack of in-house AI/ML engineering and data science expertise
BUDGET: Competing IT priorities may limit investment in speculative AI projects
CULTURE: Traditionally conservative, risk-averse culture may slow AI adoption

Opportunities

UNDERWRITING: AI models to automate credit analysis for faster loan decisions
MARKETING: Hyper-personalization of product offers based on spending patterns
FRAUD: Advanced AI/ML algorithms to detect and prevent fraudulent transactions
SERVICE: AI-powered chatbots to handle routine customer inquiries 24/7
COMPLIANCE: Automation of regulatory reporting and anti-money laundering (AML)

Threats

FINTECH: AI-native fintechs offering superior, data-driven user experiences
BIG_BANKS: Large national banks deploying massive AI budgets to gain an edge
BIAS: Risk of biased AI models leading to regulatory and reputational damage
SECURITY: AI systems creating new, complex cybersecurity vulnerabilities
COST: High cost of implementation and talent could yield negative ROI

Key Priorities

EFFICIENCY: Deploy AI to automate underwriting and back-office processes
RISK: Enhance fraud detection and compliance monitoring with ML models
PERSONALIZATION: Use customer data to power targeted cross-sell marketing
DECISIONS: Leverage AI for faster, more consistent credit decisioning

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Old Second Bancorp Financial Performance

AI-Powered Insights

Claude

Gemini

GPT

Old Second Bancorp Q1 2024 Earnings Release & Investor Presentation
Old Second Bancorp Official Website (Investor Relations, Leadership)
SEC Filings (10-K, 10-Q) for OSBC
Financial data aggregators for market cap and peer comparisons

Profit: $83.1 Million (Net Income TTM as of Q1 2024)

Market Cap: $750 Million (approx. as of mid-2024)

Stock Performance

Annual Report: Available on the Investor Relations section of the company website.

Debt: Utilizes FHLB borrowings and other wholesale funding sources.

ROI Impact: ROAA and ROATCE are key metrics for investor evaluation.

SWOT Index

Composite strategic assessment with 10-year outlook

/ 100

Market Leader

ICM Index

STRATEGIC ADVISOR ASSESSMENT

Old Second is a strong regional player with a clear strategy (CSQ=82.75) but operates in a highly competitive, low-margin industry, capping its ultimate ambition (Ambition=60). Its OKRs are well-aligned to solve key weaknesses (Achievability=0.65), but the bank faces significant external threats (Downside=74). The final index reflects a solid, well-run company poised for steady, defensible growth rather than exponential disruption. The low growth multiplier is realistic for the mature banking sector.

SWOT Factors

Upside: 70.0 Risk: 74.0

OKR Impact

AI Leverage

Top 3 Strategic Levers

Execute on M&A cost synergies to drive down efficiency ratio

Leverage AI for underwriting efficiency and fraud prevention

Recruit experienced lending teams to accelerate organic growth

AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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