Securities

12 Months Ended

Dec. 31, 2025

Note 4: Securities

The following table summarizes the amortized cost and fair value of the securities portfolio at December 31, 2025 and 2024 and the corresponding amounts of gross unrealized gains and losses were as follows:


					Gross			Gross
		Amortized			Unrealized			Unrealized		Fair
December 31, 2025		Cost¹			Gains			Losses		Value
Securities available-for-sale
U.S. Treasury		$	164,296		$	1,564		$	-	$	165,860
U.S. government agencies			29,421			-			(245)		29,176
U.S. government agencies mortgage-backed			95,899			-			(7,119)		88,780
States and political subdivisions			213,366			450			(7,441)		206,375
Collateralized mortgage obligations			388,774			1,102			(30,571)		359,305
Asset-backed securities			46,600			423			(1,207)		45,816
Collateralized loan obligations			194,552			151			(239)		194,464
Equity securities			684			63			-		747
Total securities available-for-sale		$	1,133,592		$	3,753		$	(46,822)	$	1,090,523


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2024	Cost¹		Gains		Losses		Value
Securities available-for-sale
U.S. Treasury	$	193,902	$	700	$	(459)	$	194,143
U.S. government agencies		39,202		-		(1,388)		37,814
U.S. government agencies mortgage-backed		112,241		-		(11,964)		100,277
States and political subdivisions		226,969		264		(11,777)		215,456
Collateralized mortgage obligations		411,170		647		(43,201)		368,616
Asset-backed securities		64,215		69		(1,981)		62,303
Collateralized loan obligations		182,629		472		(9)		183,092
Total securities available-for-sale	$	1,230,328	$	2,152	$	(70,779)	$	1,161,701

¹ Excludes interest receivable of $6.9 million and $7.1 million at December 31, 2025, and December 31, 2024, respectively, that is recorded in other assets on the Consolidated Balance Sheets.

FHLBC stock was $11.3 million and $4.5 million at December 31, 2025, and December 31, 2024, respectively. FRBC stock was $20.7 million and $14.9 million at December 31, 2025, and December 31, 2024, respectively. Our FHLBC stock is necessary to maintain access to FHLBC advances.

Securities valued at $679.5 million as of December 31, 2025, were pledged to secure deposits and borrowings, and for other purposes, a decrease from $717.5 million at year-end 2024.

The fair value, amortized cost and weighted average yield of debt securities at December 31, 2025, by contractual maturity, were as follows in the table below. Securities not due at a single maturity date are shown separately.


				Weighted
		Amortized		Average		Fair
Securities available-for-sale		Cost		Yield		Value
Due in one year or less		$	94,351	3.73	%	$	94,479
Due after one year through five years			132,952	4.00			133,506
Due after five years through ten years			92,466	2.94			88,875
Due after ten years			87,314	3.15			84,551
			407,083	3.51			401,411
Mortgage-backed and collateralized mortgage obligations			484,673	2.75			448,085
Asset-backed securities			46,600	3.71			45,816
Collateralized loan obligations			194,552	5.46			194,464
Equity securities			684	-			747
Total securities available-for-sale		$	1,133,592	3.53	%	$	1,090,523

As of December 31, 2025, the Company has no securities issued from one originator, other than the U.S. Government and its agencies, that individually amounted to over 10% of the Company’s stockholders’ equity.

Securities with unrealized losses with no corresponding allowance for credit losses at December 31, 2025 and 2024 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands except for number of securities):


	Less than 12 months					12 months or more
December 31, 2025	in an unrealized loss position					in an unrealized loss position					Total
	Number of	Unrealized		Fair		Number of	Unrealized		Fair		Number of	Unrealized		Fair
Securities available-for-sale	Securities	Losses		Value		Securities	Losses		Value		Securities	Losses		Value
U.S. government agencies	-	$	-	$	-	7	$	245	$	29,176	7	$	245	$	29,176
U.S. government agencies mortgage-backed	1		36		10,572	126		7,083		78,208	127		7,119		88,780
States and political subdivisions	1		4		5,046	29		7,437		104,483	30		7,441		109,529
Collateralized mortgage obligations	5		19		6,287	130		30,552		288,228	135		30,571		294,515
Asset-backed securities	7		139		14,927	7		1,068		20,164	14		1,207		35,091
Collateralized loan obligations	12		239		87,299	-		-		-	12		239		87,299
Total securities available-for-sale	26	$	437	$	124,131	299	$	46,385	$	520,259	325	$	46,822	$	644,390


	Less than 12 months					12 months or more
December 31, 2024	in an unrealized loss position					in an unrealized loss position					Total
	Number of	Unrealized			Fair	Number of	Unrealized			Fair	Number of	Unrealized			Fair
Securities available-for-sale	Securities	Losses			Value	Securities	Losses			Value	Securities	Losses			Value
U.S. Treasuries	4	$	72	$	49,788	1	$	387	$	49,547	5	$	459	$	99,335
U.S. government agencies	-		-		-	8		1,388		37,814	8		1,388		37,814
U.S. government agencies mortgage-backed	1		447		10,296	128		11,517		89,981	129		11,964		100,277
States and political subdivisions	31		455		85,457	27		11,322		111,308	58		11,777		196,765
Collateralized mortgage obligations	3		24		5,107	139		43,177		328,708	142		43,201		333,815
Asset-backed securities	2		4		1,068	13		1,977		50,198	15		1,981		51,266
Collateralized loan obligations	4		8		31,440	1		1		227	5		9		31,667
Total securities available-for-sale	45	$	1,010	$	183,156	317	$	69,769	$	667,783	362	$	70,779	$	850,939

Available-for-sale debt securities in unrealized loss positions are evaluated for allowance related to credit losses at least quarterly. The analysis consists of screening all securities to determine if the bonds have market value loss exceeding 5% of book value and if that loss exceeds $200,000. Two other aspects of each security are assessed. The first is whether a security carries a government guarantee. If the security is backed by a 100% U.S. Government or U.S. Agency guarantee, then no allowance for credit loss would be considered necessary, since ultimately principal and interest of the investment would be paid. For securities that carried a U.S. Government guarantee of less than 100%, an allowance for credit loss analysis is performed. In the case of a partial government guarantee, the loss amount is assumed to be the percentage not guaranteed multiplied by the gain or loss on the position. In addition, a calculation is performed to estimate the amount of value change attributable to movements in interest rates. If the devaluation of a security is due to rate changes, then no allowance would be considered necessary. Furthermore, for positions whose market valuations are not directly attributable to movements in interest rates, even if all scheduled payments have been received, credit analysis is performed on each position.

The following table presents net realized gains (losses) on securities available-for-sale for the years ended:


			Year Ended
			December 31,
Securities available-for-sale			2025			2024			2023
Proceeds from sales of securities ¹			$	125,941		$	5,331		$	205,738
Gross realized gains on securities				8			1			-
Gross realized losses on securities				(1)			(1)			(4,148)
Net realized gains (losses)			$	7		$	—		$	(4,148)
Income tax (expense) benefit on net realized gains (losses)			$	(2)		$	—		$	1,117
Effective tax rate applied				28.6	%		N/M	%		26.9	%

¹ 2025 includes $118.4 million of proceeds on the sale of securities acquired from Bancorp Financial, which is a reflection of the fair value on the acquisition date.

N/M – Not Meaningful

OLD SECOND BANCORP INC 10-K