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1. Company Snapshot

1.a. Company Description

Old Second Bancorp, Inc.operates as the bank holding company for Old Second National Bank that provides community banking services.It provides demand, NOW, money market, savings, time deposit, individual retirement, and checking accounts, as well as certificate of deposit accounts.


The company also offers commercial loans; lease financing receivables; commercial real estate loans; construction loans; residential real estate loans, such as residential first mortgage and second mortgage loans; home equity line of credit; consumer loans, including motor vehicle, home improvement, and signature loans; installment and agricultural loans; residential mortgages; and overdraft checking.Further, it provides safe deposit services; trust and wealth management services; and money orders, cashier's checks, foreign currency, direct deposits, discount brokerage, debit and credit cards, and other services, as well as acquires the U.S. treasury notes and bonds.In addition, the company offers online and mobile banking; corporate cash management products, including remote and mobile deposits capture, investment sweep accounts, zero balance accounts, automated tax payments, automatic teller machines access, telephone banking, lockbox accounts, automated clearing house transactions, account reconciliation, controlled disbursement, detail and general information reporting, foreign and domestic wire transfers, and vault services for currency and coin; and investment, agency, and custodial services for individual, corporate, and not-for-profit clients.


It operates through 63 banking centers in Cook, DeKalb, DuPage, Kane, Kendall, LaSalle, and Will counties in Illinois.Old Second Bancorp, Inc.was incorporated in 1981 and is headquartered in Aurora, Illinois.

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1.b. Last Insights on OSBC

Old Second Bancorp, Inc.'s recent performance was driven by strategic expansion and improved financials. The company completed its merger with Bancorp Financial, Inc. on July 1, 2025, expanding its presence. Additionally, Q2 2025 earnings showed a net income of $21.8 million, or $0.48 per diluted share, representing a sequential increase from Q1 2025. The company's solid financial performance and growth initiatives position it for future success. Its recent earnings release highlighted stability.

1.c. Company Highlights

2. Old Second Bancorp's Q3 2025 Earnings: A Strong Performance

Old Second Bancorp, Inc. reported a net income of $28.4 million, or $0.53 per diluted share, after adjusting for acquisition-related costs and other items. The company's financial performance was robust, with a return on assets of 0.56% and a return on average tangible common equity of 6.16%. The tax-equivalent efficiency ratio was 64.46%. The actual EPS came out at $0.53, beating estimates of $0.51. The net interest margin was 5.05%, a 20-basis-point improvement from the previous quarter and a 41-basis-point increase from the same quarter last year.

Publication Date: Oct -28

📋 Highlights
  • Adjusted Net Income Surge: Adjusted net income rose to $28.4 million ($0.53/share), up from $9.9 million ($0.18/share), reflecting acquisition synergies.
  • Loan Growth from Acquisition: Evergreen Bank added $1.19 billion in loans, boosting total loans by $1.27 billion and increasing the loan-to-deposit ratio to 91.4%.
  • Net Interest Margin Expansion: NIM reached 5.05%, improving 41 bps YoY and 20 bps QoQ, driven by higher asset yields and deposit repricing.
  • Dividend Increase: Quarterly dividend hiked 17% to $0.07/share, signaling confidence in capital strength and earnings resilience.
  • Shortened Earn-Back Period: Management expects the Evergreen acquisition’s earn-back period to shrink from 3 years, citing faster integration and cost synergies.

Acquisition Impact

The acquisition of Evergreen Bank added $1.19 billion in loans, resulting in a $1.27 billion increase in total loans. The loan-to-deposit ratio was 91.4% as of September 30, 2025. The company's tangible equity ratio declined by 42 basis points from the previous quarter but remains 27 basis points higher than the same quarter last year. Management expects the earn-back period associated with the Evergreen acquisition to be significantly shortened from the initial estimate of three years.

Asset Quality and Credit Loss

The allowance for credit losses on loans increased to $75 million, or 1.43% of total loans, with $30.7 million of the increase associated with the acquired loans. Provision levels increased by $6.5 million, excluding the impact of the acquisition. Nonperforming loans increased modestly, and classified assets increased by $38.4 million. The company recorded $5.1 million in net loan charge-offs, primarily from the Powersport portfolio. Bradley Adams stated that the 30 basis points charge-off rate feels right for both the near and long-term loss rate.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.13, the stock appears to be reasonably valued. The Net Interest Margin (NIM) of 5.05% is a strong indicator of the company's profitability. The Dividend Yield is 1.29%, and analysts estimate next year's revenue growth at 12.4%. Given the better-than-expected performance since the deal, Bradley Adams confirmed that the profitability for Old Second could be higher than the previously expected 150 ROA level for next year.

Future Prospects

The company is focused on integrating Evergreen Bank and optimizing its balance sheet. Systems conversions related to the acquisition are complete, and the company is reducing its reliance on wholesale funding. The net interest margin is expected to remain strong, and capital is expected to build quickly. The company announced a 17% increase in its quarterly dividend to $0.07 per share, reflecting its confidence in its performance.

3. NewsRoom

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Elizabeth Park Capital Advisors Ltd. Has $2.68 Million Position in Old Second Bancorp, Inc. $OSBC

Dec -07

Source: defenseworld.net

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O2 Sponsor Finance provides Senior Secured Credit Facilities to Support Paceline Equity Partners and Serata Capital Partners in their Acquisition of EventLink Group

Dec -01

Source: accessnewswire.com

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Old Second Bancorp, Inc. $OSBC Shares Sold by Intech Investment Management LLC

Dec -01

Source: defenseworld.net

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Old Second Bancorp, Inc. $OSBC Shares Purchased by Envestnet Asset Management Inc.

Nov -25

Source: defenseworld.net

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Old Second Bancorp, Inc. (NASDAQ:OSBC) Given Consensus Recommendation of “Buy” by Analysts

Nov -25

Source: defenseworld.net

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Old Second Bancorp, Inc. $OSBC Shares Sold by Connor Clark & Lunn Investment Management Ltd.

Nov -21

Source: defenseworld.net

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Bailard Inc. Sells 4,050 Shares of Old Second Bancorp, Inc. $OSBC

Nov -15

Source: defenseworld.net

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Old Second Bancorp, Inc. (NASDAQ:OSBC) Given Consensus Recommendation of “Buy” by Brokerages

Oct -31

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.77%)

6. Segments

Community Banking

Expected Growth: 4.77%

Old Second Bancorp's 4.77% community banking growth is driven by strategic branch expansion, increased commercial lending, and a focus on customer relationships. Additionally, the bank's investment in digital banking platforms and mobile banking apps has enhanced customer experience, contributing to deposit growth and market share gains.

7. Detailed Products

Personal Banking

Old Second Bancorp, Inc. offers a range of personal banking services, including checking and savings accounts, credit cards, loans, and investment products.

Business Banking

The company provides business banking services, including commercial loans, cash management, and treasury management solutions.

Wealth Management

Old Second Bancorp, Inc. offers wealth management services, including investment management, trust services, and financial planning.

Mortgage Lending

The company provides mortgage lending services, including residential and commercial mortgage loans.

Treasury Management

Old Second Bancorp, Inc. offers treasury management services, including cash management, wire transfers, and account reconciliation.

Online Banking

The company provides online banking services, including online account access, bill pay, and mobile banking.

8. Old Second Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Old Second Bancorp, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the complexity and regulation of the banking industry.

Bargaining Power Of Customers

Old Second Bancorp, Inc. has a diverse customer base, and no single customer has significant bargaining power.

Bargaining Power Of Suppliers

Old Second Bancorp, Inc. has a diverse supplier base, and no single supplier has significant bargaining power.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and capital requirements, making it difficult for new entrants to join the market.

Intensity Of Rivalry

Old Second Bancorp, Inc. operates in a highly competitive industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.23%
Debt Cost 6.44%
Equity Weight 52.77%
Equity Cost 9.33%
WACC 7.97%
Leverage 89.49%

11. Quality Control: Old Second Bancorp, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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MVB Financial

A-Score: 6.3/10

Value: 6.3

Growth: 4.9

Quality: 6.6

Yield: 5.0

Momentum: 8.0

Volatility: 7.0

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Civista Bancshares

A-Score: 6.1/10

Value: 5.7

Growth: 5.7

Quality: 5.8

Yield: 6.0

Momentum: 7.0

Volatility: 6.3

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United Bancorp

A-Score: 6.0/10

Value: 4.4

Growth: 4.9

Quality: 4.5

Yield: 10.0

Momentum: 6.5

Volatility: 6.0

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Old Second Bancorp

A-Score: 6.0/10

Value: 5.8

Growth: 7.6

Quality: 5.9

Yield: 2.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

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Brookline Bancorp

A-Score: 5.7/10

Value: 6.1

Growth: 4.2

Quality: 4.4

Yield: 9.0

Momentum: 10.0

Volatility: 0.3

1-Year Total Return ->

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Sound Financial Bancorp

A-Score: 5.3/10

Value: 5.6

Growth: 3.9

Quality: 6.9

Yield: 4.0

Momentum: 1.5

Volatility: 9.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.5$

Current Price

20.5$

Potential

-0.00%

Expected Cash-Flows