Old Second Bancorp (OSBC) reported solid fourth-quarter results, with GAAP net income reaching $28.8 million, or $0.54 per diluted share, and a return on average assets (ROA) of 1.64%. Adjusted net income, excluding certain losses, was $30.8 million, or $0.58 per share. The bank’s net interest margin (NIM) improved to 5.09%, reflecting a strategic shift away from high-cost wholesale funding, while total loans decreased slightly by $12.4 million.
The results underscore a resilient balance sheet amid a declining rate environment, with management confirming that integration of recent acquisitions is complete and cost-saving measures are in place. Notably, the Powersport portfolio, despite higher-than-expected losses, is contributing positively to margins. The bank’s loan-to-deposit ratio increased to 93.9%, indicating robust demand for credit, which supports a mid-single-digit loan growth target for 2026.
A key takeaway for investors is the anticipated resumption of share buybacks, signaling confidence in capital management and ongoing profitability, alongside a stable outlook for net interest margins in the near future.
Source: fool.com