In January 2009, the government bailed out Old Second with a $73 million investment in preferred stock and warrants. At the time, a glance at the bank’s books would not have revealed why that was necessary. The bank reported it was profitable in 2008, and its filings with federal regulators concluded that there was no need to charge off even $1 in construction or land development loans.

That may have reflected rose-colored glasses rather than reality. In due course, the losses did arrive as one land developer after another went broke. By 2010, the bank’s nonperforming assets were greater than its capital, which is not a recipe for survival. After those results were reported, the regulators stepped in and put the bank under close watch, requiring the board to report frequently on its progress in cleaning up its balance sheet. It appears, says Michael R. McKenzie of McKenzie Partners, a bank strategic consultant who formerly worked at Old Second, that the regulators feared the bank had understated its nonperforming assets.

The bank brought in a new chief credit officer, closed some branches, sold assets and laid off some employees. It expanded its money management business.

As recently as a year ago, it did not look as if these steps were working. As a result of the bailout, the government owned $73 million in preferred stock, which was supposed to pay a 5 percent dividend but had not done so since 2010.

When the government auctioned off the preferred stock last March, it received only 35 cents on the dollar, and even at that price could not sell it all.

But the bank reports it was profitable in the first nine months of 2013. In part, that was because of an accounting decision to reverse an earlier charge — a decision based on a conclusion that the bank will earn enough money in the future to take advantage of the ability to deduct past losses from current profits on its tax returns. But regulators seem convinced. Both the Office of the Comptroller of the Currency and the Federal Reserve lifted orders that restricted the bank’s operations.

Last month, the bank’s holding company filed with the Securities and Exchange Commission to sell common shares. If that offer, which is to be underwritten by Keefe, Bruyette & Woods, succeeds, the bank will be able to pay off its back bills. It will be well capitalized and back to the status of a normal bank. Its loan book, after shrinking for years, is growing again.