1. A method of operation of an image processing system comprising: generating a binarized image of a source image; detecting character targets within the binarized image, the character targets covering contiguous portions of the binarized image; forming connected neighbors by grouping the character targets having bounding boxes with a horizontal overlap greater than a horizontal overlap threshold; forming a text unit by grouping the character targets of the connected neighbors, the character targets having a character vertical overlap greater than a character vertical overlap threshold, each of the character targets having a character feature within a feature threshold, and the text unit a portion of the source image; calculating a text unit baseline angle for rotating the text unit to the horizontal; and detecting an output text of the text unit for display on a device, wherein forming the text unit includes expanding each of the bounding boxes of the character targets horizontally by an extra border distance, the extra border distance calculated by a value α multiplied by the character height plus a border offset.