The stock of $2.12 billion-asset Old Second Bancorp Inc. was down 16.6 percent in late morning trading as the troubled Aurora-based lender reported a fourth-quarter loss of $76.6 million, or $5.48 a share.

“No one likes to see a $5 (a share) loss,” one investor told management on an earnings conference call late Thursday morning. The investor also asked about the disclosure that one borrower had accounted for 18.8 percent of 2010 commercial real estate charge-offs, which occur when a loan is deemed uncollectible.

Another caller asked whether a bank with such a high level of bad assets, consisting mostly of loans, can survive. As of Dec. 31, nonperforming assets were $308 million, or 14.5 percent of total assets. For comparison’s sake, at the end of the third quarter, Illinois lenders on average reported that 2.97 percent of assets were nonperforming.

“We don’t see banks being closed because of non-performing loan levels,” management responded.

Although another caller remarked that one of the bank holding company’s capital ratios was “pretty low,” management said two of its other capital measures were nowhere near low enough to cause the bank — which has halted its dividend payments to the U.S. Treasury Department’s Troubled Asset Relief Program — to be seized by regulators.

“We know we still have a lot of problems,” the bank said. It cited a “significant reduction” in new loans migrating to a “watch” list and a drop in loans that are 30- to 89-days past due.

The bank also said that the real estate markets appear to be stabilizing, which should make it easier to dispose of some of the bad assets on its books.

Bank executives repeatedly said they were “cautiously optimistic” that its financial picture would improve in 2011.

The bank points out that, excluding a charge related to a valuation allowance on deferred tax assets, its loss would have been only $11.6 million in the fourth quarter.

To see the SEC filing, click here.