Old Second Bancorp, Inc. (OSBC) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Old Second Bancorp, Inc. (OSBC) Financial Services Profile

Old Second Bancorp, Inc., a regional bank holding company, provides community banking services throughout Illinois, offering diverse deposit and loan products, trust and wealth management, and digital banking solutions. With a focus on commercial and residential lending, OSBC caters to individuals, businesses, and not-for-profit organizations.

What Is the Investment Thesis for OSBC?

Old Second Bancorp, Inc. presents a stable investment opportunity within the regional banking sector. With a market capitalization of $1.31B and a P/E ratio of 14.34, the company demonstrates solid financial performance. A profit margin of 20.2% and a gross margin of 76.4% indicate efficient operations. The dividend yield of 1.27% provides a modest income stream for investors. Growth catalysts include expanding digital banking services and strategic expansion within its existing Illinois footprint. Potential risks include interest rate fluctuations and increased competition from larger regional and national banks. The company's beta of 0.74 suggests lower volatility compared to the broader market.

Based on FMP financials and quantitative analysis

OSBC Key Highlights

Market capitalization of $1.31B indicates a strong regional presence.

• P/E ratio of 14.34 suggests a reasonable valuation compared to earnings.
• Profit margin of 20.2% demonstrates efficient profitability.
• Gross margin of 76.4% reflects effective cost management.
• Dividend yield of 1.27% provides a steady income stream for investors.

Who Are OSBC's Competitors?

OSBC is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are OSBC's Key Strengths?

Strong presence in the Illinois market.

• Diversified product and service offerings.
• Experienced management team.
• Solid financial performance.

What Are OSBC's Weaknesses?

Limited geographic diversification.

• Reliance on traditional banking services.
• Smaller scale compared to larger regional and national banks.
• Exposure to interest rate risk.

What Could Drive OSBC Stock Higher?

Continued expansion of digital banking platforms to attract and retain tech-savvy customers.

• Strategic branch expansion within existing Illinois markets to increase deposit and loan growth.
• Focus on commercial lending to support local businesses and drive revenue growth.

What Are the Key Risks for OSBC?

Financial-distress signal — its Altman Z-Score of 0.31 sits in the distress zone (elevated bankruptcy risk).

• Inconsistent delivery — missed Wall Street EPS estimates in 5 of the last 8 reported quarters.
• Insider selling — insiders were net sellers of roughly $5.4M recently.
• Interest rate fluctuations impacting net interest margin and profitability.
• Increased competition from larger regional and national banks.
• Economic downturn in the Illinois market affecting loan quality and credit losses.
• Regulatory changes and compliance costs impacting operational efficiency.

What Are the Growth Opportunities for OSBC?

• Expansion of Digital Banking Services: Old Second can capitalize on the growing demand for digital banking by enhancing its online and mobile platforms. Investing in user-friendly interfaces and advanced features such as mobile deposit capture and online account management can attract and retain customers. The market for digital banking is projected to reach $9 trillion by 2028, presenting a significant growth opportunity for OSBC. Timeline: Ongoing.
• Strategic Branch Expansion: Expanding its branch network within its existing Illinois footprint can increase Old Second's market share and customer base. Identifying underserved communities and establishing new banking centers can drive deposit growth and loan origination. The Illinois banking market is valued at $500 billion in deposits, providing ample opportunity for expansion. Timeline: Ongoing.
• Enhancement of Wealth Management Services: Growing its trust and wealth management services can generate additional revenue streams and diversify its business model. Offering personalized financial planning, investment management, and estate planning services can attract high-net-worth individuals and families. The wealth management market in Illinois is estimated at $2 trillion, offering significant growth potential. Timeline: Ongoing.
• Focus on Commercial Lending: Expanding its commercial lending portfolio can drive revenue growth and support local businesses. Offering tailored financing solutions to small and medium-sized enterprises (SMEs) can foster strong relationships and increase loan volume. The market for commercial loans in Illinois is valued at $100 billion. Timeline: Ongoing.
• Acquisition Opportunities: Pursuing strategic acquisitions of smaller community banks can accelerate Old Second's growth and expand its market presence. Identifying complementary institutions with strong local relationships and similar business models can create synergies and increase profitability. The consolidation trend in the banking industry presents opportunities for OSBC to grow through acquisitions. Timeline: Ongoing.

What Are OSBC's Competitive Advantages?

• Strong local presence and established relationships in the Illinois market.
• Comprehensive suite of banking products and services.
• Experienced management team with a deep understanding of the regional banking sector.
• Commitment to community involvement and customer service.

What Does OSBC Do?

Old Second Bancorp, Inc., incorporated in 1981 and headquartered in Aurora, Illinois, is the bank holding company for Old Second National Bank. The bank provides a comprehensive suite of community banking services to individuals, businesses, and not-for-profit organizations. Its history is rooted in serving the financial needs of the communities within its Illinois footprint. The company's core offerings include a variety of deposit accounts such as demand, NOW, money market, savings, time deposit, individual retirement, and checking accounts, as well as certificates of deposit. Old Second also provides a wide array of lending products, including commercial loans, lease financing receivables, commercial real estate loans, construction loans, residential real estate loans (first and second mortgages), home equity lines of credit, consumer loans (motor vehicle, home improvement, and signature loans), installment and agricultural loans, and residential mortgages. Beyond traditional banking services, Old Second offers safe deposit services, trust and wealth management, money orders, cashier's checks, foreign currency exchange, direct deposits, discount brokerage, debit and credit cards. The company also provides advanced online and mobile banking platforms and corporate cash management products, including remote and mobile deposit capture, investment sweep accounts, zero balance accounts, and automated tax payments. Old Second operates 63 banking centers across several counties in Illinois, including Cook, DeKalb, DuPage, Kane, Kendall, LaSalle, and Will counties.

What Products and Services Does OSBC Offer?

• Provides a range of deposit accounts, including checking, savings, and money market accounts.
• Offers commercial loans to businesses for various purposes.
• Provides residential real estate loans, including mortgages and home equity lines of credit.
• Offers consumer loans for vehicles, home improvements, and personal needs.
• Provides trust and wealth management services to individuals and families.
• Offers online and mobile banking services for convenient account access.
• Provides corporate cash management products for businesses.
• Offers safe deposit services for secure storage.

How Does OSBC Make Money?

• Generates revenue from interest income on loans.
• Earns fees from deposit accounts and other banking services.
• Provides trust and wealth management services for a fee.
• Acquires U.S. Treasury notes and bonds for investment income.

What Industry Does OSBC Operate In?

Old Second Bancorp, Inc. operates in the regional banking sector, which is characterized by increasing competition and evolving customer expectations. The industry is undergoing digital transformation, with customers demanding more sophisticated online and mobile banking solutions. The competitive landscape includes both large national banks and smaller community banks. Old Second differentiates itself through its focus on community banking services and its strong presence in the Illinois market. The regional banking sector is expected to grow moderately, driven by increasing economic activity and population growth in the Midwest.

Who Are OSBC's Key Customers?

• Individuals seeking personal banking services.
• Small and medium-sized businesses requiring commercial loans and cash management solutions.
• High-net-worth individuals and families seeking wealth management services.
• Not-for-profit organizations requiring banking and investment services.

Old Second Bancorp, Inc. (OSBC) Valuation Context

Valued at $1.31B, OSBC is classified as a small-cap stock. Analyst price targets span from $23.00 to $30.00, with a consensus of $26.33. At the current price of $25.53, that implies approximately 3% upside potential. Relative to its peer group, OSBC's quantitative score of 74/100 is below the peer average of 92/100.

OSBC Revenue & Earnings Trend

In Q2 FY2026, OSBC generated $88.8M in top-line revenue, marking a sequential decrease of 20.1%. The company recorded net income of $28.2M, with diluted EPS of $0.54. Revenue has contracted over three consecutive quarters, which investors in this small-cap Financial Services stock should monitor closely. Across the four most recent quarters, OSBC averaged $0.44 in diluted EPS.

Company Profile

Old Second Bancorp, Inc. operates in the Banks - Regional industry within the Financial Services sector. It is headquartered in Aurora, US. The company is led by CEO James L. Eccher. OSBC has traded publicly since 1993.

Return on equity for Old Second Bancorp, Inc. stands at 10.2%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 1.3%, showing how much profit it generates from its asset base. OSBC trades at a trailing price-to-earnings ratio of 14.34, below the Financial Services sector average of ~17.50x. Its free cash flow yield is 11.5%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.22 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 6.9%, the inverse of the P/E and a quick read on earnings relative to price.

Old Second Bancorp, Inc.'s Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 0.31 places it in the distress zone, a signal of elevated financial risk.

Old Second Bancorp, Inc. has missed Wall Street's EPS estimate in 5 of its last 8 reported quarters — a mixed record worth weighing. Reported results have landed about 7.9% below estimates on average.

Over the past six months, Old Second Bancorp, Inc. insiders filed 27 SEC Form 4 transactions — 11 sales and 16 purchases. On net that is roughly 225K shares disposed (about $5.4M), a signal worth weighing alongside the fundamentals.

OSBC Financials

OSBC Latest News

OSBC Analyst Consensus

OSBC MoonshotScore

What Investors Ask About Old Second Bancorp, Inc. (OSBC) — Financial Services

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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