Old Second Bancorp (OSBC) AI Stock Analysis

• Market Cap: $665.80M
• Dividend Yield: 1.49%
• Average Volume (3M): 231.58K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.80
• Revenue Growth: 4.19%
• EPS Growth: -7.40%
• Country: US
• Employees: 877
• Sector: Financial
• Sector Strength: 85
• Industry: Banks - Regional
• EPS (TTM): 1.87
• Shares Outstanding: 45,047,150
• 10 Day Avg. Volume: 269,809
• 30 Day Avg. Volume: 231,578
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.74
• Price to Cash Flow (P/CF): 7.90
• P/FCF Ratio: 5.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $23.00
• Price Target Upside: 55.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Old Second Bancorp's strong financial foundation, with consistent growth in revenue and net income, is a primary strength. The stock is attractively valued with a low P/E ratio and a modest dividend yield. However, technical indicators suggest bearish momentum, and recent earnings call insights highlight challenges such as credit losses and loan contractions, which could impact future performance.

Positive Factors

Asset Quality

OSBC has successfully reduced non-performing assets by nearly 30% and narrowed net charge-offs since peak levels.

Net Interest Margin

OSBC's current NIM of 4.63% is over 100bp above small and mid cap peers, so despite greater than previously assumed NIM headwinds, margin at OSBC is still a relative strength.

Profitability Metrics

The bank's conservative credit approach, superior deposit franchise and above peer profitability metrics remain intact.

Negative Factors

Asset Sensitivity

Downgrading shares of OSBC to NEUTRAL, predominantly based on the bank's less favorable asset sensitive balance sheet position.

Credit Environment

Credit progress and deposit strength catalysts are likely to be overlooked or minimized should the market's attention turn to 'risk-on' credit names and/or banks with a greater ability to lower deposit costs.

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 Business Overview & Revenue Model

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.

How the Company Makes Money

Old 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. However, the variability in balance sheet components and potential cash flow volatility pose some concerns.

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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 14.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 14.76 is below the 20-day moving average (MA) of 15.82, below the 50-day MA of 17.09, and below the 200-day MA of 16.92, indicating a bearish trend. The MACD of -0.71 indicates Positive momentum. The RSI at 33.48 is Neutral, neither overbought nor oversold. The STOCH value of 29.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OSBC.

Old Second Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NBN	77 Outperform	$697.41M	10.18	17.77%	0.04%	23.69%	21.19%
HBT	76 Outperform	$693.04M	9.68	13.88%	3.56%	8.55%	9.52%
OSBC	73 Outperform	$665.80M	7.91	13.66%	1.49%	4.19%	-7.40%
FCBC	73 Outperform	$698.43M	13.61	10.02%	3.20%	6.25%	5.16%
CPF	65 Neutral	$660.27M	12.38	10.25%	4.23%	6.13%	-9.06%
MCBS	64 Neutral	$664.28M	10.37	16.07%	3.29%	11.80%	24.53%
Sector *	63 Neutral	$12.75B	9.36	8.64%	84.32%	13.82%	-3.89%