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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 54.4GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
8.3%
Sector: 8.5%
Dividend Analysis audit
GROWTH
1.39%
Trailing Yield
$1.39
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
20%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, OLD SECOND BANCORP INC (OSBC) receives a "Hold" rating with a composite score of 52.6/100, ranked #291 out of 4446 stocks. Key factor scores: Quality 54/100, Value 71/100, Momentum 54/100. This is quantitative analysis only — not investment advice.
OLD SECOND BANCORP INC (OSBC) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does OLD SECOND BANCORP INC Do?
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. OLD SECOND BANCORP INC (OSBC) is classified as a small-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO James L. Eccher and employs approximately 890 people, headquartered in Aurora, Illinois. With a market capitalization of $1.1B, OSBC is one of the notable companies in the Financials sector.
OLD SECOND BANCORP INC (OSBC) Stock Rating — Hold (April 2026)
As of April 2026, OLD SECOND BANCORP INC receives a Hold rating with a composite score of 52.6/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.OSBC ranks #291 out of 4,446 stocks in our coverage universe. Within the Financials sector, OLD SECOND BANCORP INC ranks #107 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
OSBC Stock Price and 52-Week Range
OLD SECOND BANCORP INC (OSBC) currently trades at $21.31. The stock lost $0.16 (0.7%) in the most recent trading session. The 52-week high for OSBC is $22.00, which means the stock is currently trading -3.1% from its annual peak. The 52-week low is $14.14, putting the stock 50.7% above its annual trough. Recent trading volume was 406K shares, suggesting relatively thin trading activity.
Is OSBC Overvalued or Undervalued? — Valuation Analysis
OLD SECOND BANCORP INC (OSBC) carries a value factor score of 71/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 14.73x, compared to the Financials sector average of 14.88x — a discount of 1%. The price-to-book ratio stands at 1.22x, versus the sector average of 1.22x. The price-to-sales ratio is 3.34x, compared to 0.90x for the average Financials stock. On an enterprise value basis, OSBC trades at 11.16x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, OLD SECOND BANCORP INC appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
OLD SECOND BANCORP INC Profitability — ROE, Margins, and Quality Score
OLD SECOND BANCORP INC (OSBC) earns a quality factor score of 54/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 8.3%, compared to the Financials sector average of 8.5%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 1.1% versus the sector average of 1.2%.
On a margin basis, OLD SECOND BANCORP INC reports gross margins of 0.0%. The operating margin is 31.6% (sector: 21.8%). Net profit margin stands at 23.9%, versus 17.7% for the average Financials stock. Revenue growth is running at 42.1% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
OSBC Debt, Balance Sheet, and Financial Health
OLD SECOND BANCORP INC has a debt-to-equity ratio of 670.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.15x, suggesting adequate working capital coverage. Total debt on the balance sheet is $289M. Cash and equivalents stand at $53M.
OSBC has a beta of 0.78, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for OLD SECOND BANCORP INC is 83/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
OLD SECOND BANCORP INC Revenue and Earnings History — Quarterly Trend
In TTM 2026, OLD SECOND BANCORP INC reported revenue of $329M and earnings per share (EPS) of $1.64. Net income for the quarter was $74M. Gross margin was 0.0%. Operating income came in at $98M.
In FY 2025, OLD SECOND BANCORP INC reported revenue of $355M and earnings per share (EPS) of $1.64. Net income for the quarter was $80M. Revenue grew 19.2% year-over-year compared to FY 2024. Operating income came in at $108M.
In Q3 2025, OLD SECOND BANCORP INC reported revenue of $104M and earnings per share (EPS) of $0.19. Net income for the quarter was $10M. Revenue grew 36.8% year-over-year compared to Q3 2024. Operating income came in at $13M.
In Q2 2025, OLD SECOND BANCORP INC reported revenue of $75M and earnings per share (EPS) of $0.49. Net income for the quarter was $22M. Revenue grew 2.8% year-over-year compared to Q2 2024. Operating income came in at $29M.
Over the past 8 quarters, OLD SECOND BANCORP INC has demonstrated a growth trajectory, with revenue expanding from $73M to $329M. Investors analyzing OSBC stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
OSBC Dividend Yield and Income Analysis
OLD SECOND BANCORP INC (OSBC) currently pays a dividend yield of 1.4%. At this yield, a $10,000 investment in OSBC stock would generate approximately $$139.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning OSBC yields less than the typical sector peer. With a net margin of 23.9%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
OSBC Momentum and Technical Analysis Profile
OLD SECOND BANCORP INC (OSBC) has a momentum factor score of 54/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 23/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 16/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
OSBC vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing OSBC against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full OSBC vs S&P 500 (SPY) comparison to assess how OLD SECOND BANCORP INC stacks up against the broader market across all factor dimensions.
OSBC Next Earnings Date
No upcoming earnings date has been announced for OLD SECOND BANCORP INC (OSBC) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy OSBC? — Investment Thesis Summary
OLD SECOND BANCORP INC presents a balanced picture with arguments on both sides. The value score of 71/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 83/100) reduces downside risk.
In summary, OLD SECOND BANCORP INC (OSBC) earns a Hold rating with a composite score of 52.6/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on OSBC stock.
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Institutional Research Dossier
OLD SECOND BANCORP INC (OSBC) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Old Second Bancorp (OSBC) receives a Hold rating, driven by a mixed financial profile. While the company exhibits strong profitability metrics and revenue growth compared to its sector, concerns arise from its high debt-to-equity ratio and negative free cash flow. The current valuation appears attractive based on P/E and EV/EBITDA multiples, but these are tempered by the company's capital allocation challenges and reliance on a concentrated geographic market.
The primary takeaway is that OSBC presents a value proposition contingent on its ability to sustain its superior operating margins and revenue growth while addressing its debt burden and improving free cash flow generation. Investors should closely monitor the company's capital allocation decisions and its ability to navigate the competitive landscape of the Illinois banking market.
Business Strategy & Overview
Old Second Bancorp operates as a community bank, primarily serving the Illinois counties of Cook, DeKalb, DuPage, Kane, Kendall, LaSalle, and Will. Its core business revolves around providing traditional banking services, including deposit accounts (checking, savings, money market, CDs), and a diverse range of loan products (commercial, real estate, consumer). The bank differentiates itself through its focus on relationship banking, aiming to provide personalized service to local businesses and individuals. This strategy is evident in its emphasis on commercial lending and real estate loans, catering to the specific needs of its regional customer base.
A key element of OSBC's strategy is its expansion within its existing geographic footprint. The company has grown both organically and through acquisitions, increasing its banking center network to 63 locations. This expansion aims to increase market share and broaden its customer base, allowing it to capitalize on economies of scale and improve operational efficiency. The bank also invests in technology to enhance its online and mobile banking platforms, catering to the evolving preferences of its customers and improving accessibility to its services.
OSBC's revenue generation is primarily driven by net interest income, which is the difference between the interest earned on loans and investments and the interest paid on deposits. The bank also generates fee income from various services, including wealth management, trust services, and transaction-based fees. The company's strategic focus on commercial lending contributes significantly to its net interest income, as commercial loans typically carry higher interest rates compared to residential mortgages. The bank's ability to effectively manage its interest rate risk is crucial to maintaining its profitability in varying economic conditions.
The competitive landscape for OSBC is characterized by a mix of large national banks, regional players, and smaller community banks. OSBC competes on the basis of its local market knowledge, personalized service, and competitive pricing. The bank's ability to maintain strong relationships with its customers and provide tailored financial solutions is a key differentiator in this competitive environment. Furthermore, the company's investment in technology and its expansion strategy are aimed at enhancing its competitiveness and attracting new customers.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
42.1%
Sector: 9.4%
+349% VS SCTR
Economic Moat Analysis
Old Second Bancorp's economic moat can be classified as Narrow. The primary source of this narrow moat stems from its established presence and brand recognition within its specific geographic market in Illinois. Community banks often benefit from strong local relationships and customer loyalty, creating a barrier to entry for larger national banks that may lack the same level of personalized service and community involvement.
The company's network of 63 banking centers provides a physical presence that reinforces its local brand and facilitates customer interaction. This network effect, while not as powerful as those seen in technology or social media companies, contributes to customer retention and attracts new customers who value the convenience of local branches. The bank's focus on commercial lending also strengthens its relationships with local businesses, creating a sticky customer base that is less likely to switch to competitors.
However, the moat is narrow due to several factors. The banking industry is highly competitive, with numerous players offering similar products and services. Switching costs for customers are relatively low, as transferring accounts and loans is a straightforward process. Furthermore, the rise of online banking and fintech companies has eroded some of the advantages of traditional brick-and-mortar banks, as customers increasingly prefer digital channels for their banking needs.
While OSBC's local presence and customer relationships provide a degree of competitive advantage, it is not insurmountable. Larger banks with greater resources and broader product offerings can still compete effectively in the Illinois market. Fintech companies also pose a threat by offering innovative financial solutions that may appeal to younger, tech-savvy customers. Therefore, OSBC's moat is narrow and requires continuous investment in technology, customer service, and strategic expansion to maintain its competitive position.
The bank's intangible assets, such as its brand reputation and regulatory licenses, also contribute to its narrow moat. However, these assets are not unique to OSBC and are shared by many other banks. The company's cost advantages are limited, as it operates in a highly regulated industry with standardized pricing for many products and services. Efficient scale is not a significant factor, as the banking industry is not characterized by natural monopolies or economies of scale that favor a few dominant players.
Financial Health & Profitability
Old Second Bancorp demonstrates a mixed financial health profile. The company's revenue growth has been impressive, with a 42.1% increase compared to the sector average of 9.3%. This growth is reflected in the quarterly financial history, showing consistent revenue generation over the past several years. However, the net income has fluctuated, indicating potential challenges in maintaining profitability amidst revenue expansion. The operating margin, while strong at 31.6% compared to the sector average of 22.0%, has shown some variability in recent quarters, suggesting potential cost pressures or changes in revenue mix.
The company's profitability metrics, such as ROE (8.3%), are slightly below the sector average (8.5%). This suggests that OSBC is not generating as much profit from its equity as its peers. The net margin, however, is significantly higher at 23.9% compared to the sector average of 17.8%, indicating efficient cost management and a favorable revenue mix. The gross margin is reported as 0.0%, which is unusual for a bank and likely reflects the way interest income and expense are accounted for; it is not directly comparable to gross margins in other industries.
A significant concern is OSBC's high debt-to-equity ratio of 670.00, which is substantially higher than the sector average of 115.00. This indicates a high degree of leverage, which could increase the company's vulnerability to economic downturns and interest rate fluctuations. The company's total debt of $289.41 million compared to its total cash of $53.10 million further underscores its reliance on debt financing. The current ratio of 1.15 suggests that the company has sufficient liquid assets to cover its short-term liabilities, but the high debt level remains a concern.
The company's free cash flow is negative at $-10.75 million, indicating that it is not generating enough cash from its operations to cover its capital expenditures and other cash outflows. This could necessitate further borrowing or asset sales to fund its growth initiatives and maintain its operations. The absence of free cash flow data in the quarterly financial history makes it difficult to assess the trend in this metric. Overall, OSBC's financial health is characterized by strong revenue growth and profitability but is tempered by high leverage and negative free cash flow.
Valuation Assessment
Old Second Bancorp's valuation presents a mixed picture. The company's P/E ratio of 11.9x is lower than the sector average of 15.5x, suggesting that the stock may be undervalued relative to its earnings. Similarly, its EV/EBITDA ratio of 2.4x is significantly lower than the sector average of 3.5x, further indicating a potential undervaluation based on its enterprise value and operating profitability. These metrics suggest that OSBC is trading at a discount compared to its peers.
However, the valuation must be considered in the context of the company's financial health and growth prospects. While the P/E and EV/EBITDA ratios appear attractive, the company's high debt-to-equity ratio and negative free cash flow raise concerns about its long-term sustainability. These factors could justify a lower valuation compared to its peers. The company's strong revenue growth of 42.1% compared to the sector average of 9.3% could warrant a higher valuation, but this growth must be sustainable and translate into improved profitability and cash flow generation.
The BCR proprietary quant model assigns a Value score of 72/100, which supports the notion that the stock is relatively undervalued. However, the Investment score of 23/100 suggests that the company's capital allocation and growth initiatives are not viewed favorably by the model. This discrepancy highlights the need for investors to carefully assess the company's capital allocation decisions and its ability to generate sustainable growth.
Overall, OSBC's valuation appears to be a blend of attractive multiples and underlying concerns. The stock may be undervalued based on its P/E and EV/EBITDA ratios, but the high debt level and negative free cash flow warrant caution. Investors should carefully consider the company's financial health and growth prospects before making an investment decision. A fair valuation would likely be somewhere between the discounted multiples suggested by the financial risks and the premium warranted by the strong revenue growth.
Risk & Uncertainty
Old Second Bancorp faces several specific risks that could impact its financial performance and valuation. One of the primary risks is its high debt-to-equity ratio. This leverage increases the company's vulnerability to economic downturns and interest rate fluctuations. A significant increase in interest rates could increase the company's borrowing costs and reduce its profitability. A recession could lead to increased loan defaults and reduced demand for its banking services, further straining its financial resources.
Another risk is the company's concentration in the Illinois banking market. The company's operations are heavily reliant on the economic conditions and regulatory environment in this region. Any adverse changes in the Illinois economy or regulatory landscape could significantly impact the company's financial performance. Increased competition from larger banks or fintech companies in the Illinois market could also erode the company's market share and profitability.
Regulatory risk is also a significant concern for OSBC. The banking industry is heavily regulated, and changes in regulations could increase the company's compliance costs and restrict its business activities. The company is subject to various regulations related to capital adequacy, lending practices, and consumer protection. Any failure to comply with these regulations could result in fines, penalties, and reputational damage.
Credit risk is inherent in the banking business, as the company's loan portfolio is subject to the risk of default. Economic downturns or industry-specific challenges could lead to increased loan defaults and reduced asset quality. The company's ability to effectively manage its credit risk is crucial to maintaining its profitability and financial stability. Furthermore, cybersecurity risks pose a growing threat to the banking industry. A successful cyberattack could compromise the company's data, disrupt its operations, and damage its reputation.
Bulls Say / Bears Say
The Bull Case
BULL VIEWOSBC's superior operating margin and revenue growth relative to the sector demonstrate its efficient operations and ability to capture market share, justifying a higher valuation.
BULL VIEWThe bank's focus on relationship banking and local market expertise creates a sticky customer base and provides a competitive advantage that is not fully reflected in its current stock price.
BULL VIEWOSBC's management team has a proven track record of strategic acquisitions and organic growth, positioning the company for continued success in the Illinois banking market.
The Bear Case
BEAR VIEWOSBC's high debt-to-equity ratio and negative free cash flow raise serious concerns about its financial stability and ability to sustain its growth trajectory.
BEAR VIEWThe company's concentration in the Illinois banking market exposes it to significant regional economic risks and competitive pressures, limiting its long-term growth potential.
BEAR VIEWDespite attractive P/E and EV/EBITDA multiples, the market is correctly discounting OSBC due to its capital allocation challenges and the inherent risks associated with its leveraged balance sheet.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score OSBC and 4,400+ other equities.
OLD SECOND BANCORP INC exhibits a 128% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
1.1%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
31.6%
Sector: 21.8%
Net Margin
Bottom-line profitability
23.9%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta-44%
Income Projection audit
A $10,000 investment would generate approximately $139 annually in dividends at the current trailing rate.
