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Old Second Bancorp (OSBC)
NASDAQ:OSBC
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Old Second Bancorp
(NASDAQ:OSBC)
63Neutral
Positive Factors
Credit Management
OSBC has successfully reduced non-performing assets by nearly 30% and narrowed net charge-offs since peak levels.
Net Interest Margin
OSBC's current net interest margin of 4.63% is over 100 basis points above small and mid-cap peers, indicating margin strength despite headwinds.
Negative Factors
Earnings Outlook
Lowering earnings outlook for OSBC to reflect added NIM pressure tied to the Fed's more aggressive rate cut path.
Old Second Bancorp (OSBC) vs. S&P 500 (SPY)
Market Cap
$734.27M
Dividend Yield1.35%
Average Volume (3M)223.30K
Price to Earnings (P/E)8.7
Beta (1Y)0.83
Revenue Growth4.19%
EPS Growth-7.40%
CountryUS
Employees834
SectorFinancial
Sector Strength81
IndustryBanking
Share Statistics
EPS (TTM)1.87
Shares Outstanding45,047,150
10 Day Avg. Volume225,879
30 Day Avg. Volume223,304
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.64
Price to Cash Flow (P/CF)7.70
P/FCF Ratio5.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.00Price Target Upside42.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Old Second Bancorp Business Overview & Revenue Model
Company DescriptionOld Second Bancorp, Inc. is a bank holding company, which engages in the provision of traditional retail and commercial banking services through its wholly owned subsidiaries. Its services includes personal banking, loans, business banking, and wealth management. The company was founded in 1981 and is headquartered in Aurora, IL.
How the Company Makes MoneyOld Second Bancorp generates revenue primarily through the interest income earned from its lending activities. The bank provides various types of loans, including commercial and industrial loans, commercial real estate loans, construction loans, residential real estate loans, and consumer loans. Interest on these loans constitutes a significant portion of the company's income. In addition to interest income, Old Second Bancorp earns revenue from fees and service charges associated with its deposit accounts and other banking services. The bank also generates non-interest income from wealth management and trust services, which include investment advisory and estate planning services. Furthermore, Old Second Bancorp has partnerships and relationships with financial institutions and service providers that enhance its product offerings and contribute to its earnings.
Old Second Bancorp Financial Statement Overview
Summary
Old Second Bancorp exhibits strong financial performance with consistent revenue and net income growth, a solid equity base, and effective cash flow management. While there are some concerns regarding the variability of balance sheet components and potential cash flow volatility, the company's financial health appears robust, positioning it well within the banking industry.Income Statement
Old Second Bancorp has shown consistent revenue growth over the years, with a substantial increase in total revenue from 2020 to 2024. The net profit margin has been robust, averaging above 20% in recent years. However, the EBIT and EBITDA margins are not available for the latest year, which slightly limits the analysis. Nevertheless, the strong net income growth trajectory suggests solid profitability.78
Positive
Balance Sheet
The balance sheet of Old Second Bancorp is marked by a strong equity base, with the equity ratio consistently above 10% over the years. The debt-to-equity ratio is notably low for 2024, indicating a conservative leverage approach. The return on equity is commendable, reflecting effective utilization of equity capital. However, fluctuations in total assets and liabilities suggest some variability in balance sheet stability.72
Positive
Cash Flow
Operating cash flow has shown a healthy increase in 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio is above 1, highlighting efficient cash conversion. Despite positive free cash flow growth, the large swings in investing and financing cash flows could indicate potential volatility in cash management strategies.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 297.90M | 291.97M | 244.92M | 133.46M | 127.04M | Gross Profit |
| 297.90M | 291.97M | 244.92M | 133.46M | 127.04M | EBIT |
| -178.38M | 124.41M | 105.95M | 27.87M | 37.41M | EBITDA |
| 0.00 | 131.35M | 98.26M | 31.66M | 40.70M | Net Income Common Stockholders |
| 85.26M | 91.73M | 67.41M | 20.04M | 27.82M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.21B | 1.29B | 1.65B | 2.44B | 826.08M | Total Assets |
| 5.65B | 5.72B | 5.89B | 6.21B | 3.04B | Total Debt |
| 20.00M | 490.15M | 228.66M | 148.54M | 93.54M | Net Debt |
| -32.17M | 390.01M | 113.48M | -603.57M | -236.36M | Total Liabilities |
| 4.98B | 5.15B | 5.43B | 148.54M | 93.54M | Stockholders Equity |
| 671.03M | 577.28M | 461.14M | 502.02M | 307.09M |
| Cash Flow | Free Cash Flow | |||
| 131.53M | 104.03M | 93.01M | 29.01M | 22.07M | Operating Cash Flow |
| 131.53M | 116.40M | 97.34M | 31.05M | 25.99M | Investing Cash Flow |
| 322.70M | 161.56M | -432.78M | 132.92M | -103.81M | Financing Cash Flow |
| -455.05M | -292.99M | -301.50M | 258.24M | 357.09M |
Old Second Bancorp Technical Analysis
Negative
16.18
Price Trends
18.17
Negative
17.97
Negative
16.67
Negative
Market Momentum
-0.52
Positive
26.49
Positive
6.88
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSBC, the sentiment is Negative. The current price of 16.18 is below the 20-day moving average (MA) of 17.95, below the 50-day MA of 18.17, and below the 200-day MA of 16.67, indicating a bearish trend. The MACD of -0.52 indicates Positive momentum. The RSI at 26.49 is Positive, neither overbought nor oversold. The STOCH value of 6.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OSBC.
Old Second Bancorp Risk Analysis
Old Second Bancorp disclosed 47 risk factors in its most recent earnings report. Old Second Bancorp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Old Second Bancorp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $4.98B | 7.15 | 13.21% | 3.69% | 23.25% | 4.64% | |
70 Outperform | $1.66B | 5.75 | 16.25% | 0.99% | 23.69% | 11.97% | |
69 Neutral | $2.32B | 10.12 | 9.72% | 3.87% | 9.95% | -11.02% | |
68 Neutral | $2.86B | 37.40 | 3.98% | 1.85% | -2.94% | -62.30% | |
63 Neutral | $13.85B | 10.47 | 9.22% | 4.23% | 17.31% | -7.79% | |
63 Neutral | $734.27M | 8.72 | 13.66% | 1.35% | 4.19% | -7.40% | |
62 Neutral | $3.14B | 10.97 | 9.69% | 4.00% | 21.10% | -4.20% |
* Financial Sector Average
Performance Comparison
OSBC
Old Second Bancorp
16.18
3.31
25.72%
OZK
Bank OZK
42.94
2.36
5.82%
FFBC
First Financial Bancorp
24.25
3.94
19.40%
FULT
Fulton Financial
17.50
3.27
22.98%
HTLF
Heartland Financial USA
64.67
32.80
102.92%
MBIN
Merchants Bancorp
36.63
-3.62
-8.99%
Old Second Bancorp Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: -13.10% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a generally strong financial performance with stable net interest margins and significant improvements in loan quality and profitability metrics. However, challenges such as credit loss provisions, loan contractions, and significant charge-offs present notable concerns.Highlights
Strong Profitability Metrics
Net income was $19.1 million or $0.42 per diluted share, with a return on assets of 1.34% and a return on average tangible common equity of 13.79%.
Balance Sheet Strength
The tangible equity ratio increased by 151 basis points over the past year to 10.04%, and the Common Equity Tier 1 ratio was 12.82%.
Net Interest Margin Stability
Tax equivalent net interest margin increased by 4 basis points to 4.68%, reflecting stability despite market interest rate changes.
Improvement in Criticized Loans
Substandard and criticized loans decreased by 31% in the fourth quarter and 56% from peak levels over the past 2.5 years.
Strong Noninterest Income Growth
Noninterest income showed growth in wealth management fees, service charges, and mortgage banking income.
Deposit Growth
Average deposits increased by $114 million or 2.5%, with period end total deposits increasing by $303 million or 6.8% from the prior quarter.
Lowlights
Credit Loss Provisions
A $3.5 million provision for credit losses impacted earnings, reducing after-tax earnings by $0.06 per diluted share.
OREO Write-Downs and Expenses
Old Second recorded $1.7 million in OREO write-downs, impacting earnings by $0.03 per diluted share.
Significant Charge-Off
An $8.6 million charge-off on a C&I loan due to bankruptcy declarations was recorded, highlighting credit challenges.
Loan Contraction
Total loans decreased by $9.7 million from the prior linked quarter, primarily due to paydowns in commercial real estate.
Merger-Related Expenses
Merger-related expenses amounted to $1.5 million, affecting earnings slightly.
Company Guidance
During the Old Second Bancorp, Inc. Fourth Quarter 2024 Earnings Call, the company provided detailed guidance and metrics reflecting their financial performance and strategic outlook. Net income for Q4 2024 was reported at $19.1 million, equating to $0.42 per diluted share, with a return on assets of 1.34%. The return on average tangible common equity was 13.79%, and the tax equivalent efficiency ratio stood at 54.61%. The tangible equity ratio increased by 151 basis points over the year, ending at 10.04%. The bank's Common Equity Tier 1 capital ratio was 12.82%. Despite a $3.5 million provision for credit losses and $1.7 million in OREO write-downs, management expressed confidence in their profitability and balance sheet position. The loan-to-deposit ratio was 84% as of December 31, 2024. The tax equivalent net interest margin slightly increased to 4.68%, driven by high interest rates on variable securities and loans. The bank recorded an $8.6 million charge-off on a C&I loan, but substandard and criticized loans decreased by 31% from the previous quarter. For 2025, Old Second Bancorp aims for mid-single-digit loan growth, maintaining stable margins with potential slight decreases if interest rates are cut further. The bank is also actively exploring M&A opportunities and may consider share repurchases, reflecting strong capital and liquidity positions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.