Old Second Bancorp Reports Q1 2026 Earnings with Increased Credit Losses and Share Repurchases
OSBC sits 44% above its 52-week low of $14.7.
Summary
Old Second Bancorp reported Q1 2026 earnings with a decline in net income and EPS, alongside a significant increase in credit loss provisions and nonperforming loans, partially offset by improved net interest margin and substantial share repurchases.
Key Events · Earnings and Guidance · OSBC
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Q1 2026 Net Income and EPS Decline
Net income for the first quarter of 2026 was $25.6 million, or $0.48 per diluted share, down from $28.8 million, or $0.54 per diluted share, in Q4 2025.
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Significant Increase in Credit Loss Provision
The provision for credit losses surged to $9.5 million in Q1 2026, a substantial increase from $3.0 million in Q4 2025.
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Rise in Nonperforming Loans
Nonperforming loans increased to $75.5 million from $52.8 million in the prior quarter, with the nonperforming loans to total loans ratio rising to 1.46% from 1.01%.
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Substantial Share Repurchase Program Execution
The company repurchased 1.2 million shares for $23.1 million during the quarter, executing on its existing share repurchase authorization.
Analysis · OSBC · Finance
Old Second Bancorp reported a decline in net income and diluted EPS for Q1 2026 compared to the previous quarter, primarily driven by a significant increase in the provision for credit losses and a rise in nonperforming loans. This credit quality deterioration, attributed to a few larger commercial relationships, presents a notable concern for the bank's asset quality. However, the company demonstrated strong net interest margin expansion and improved operating efficiency. Additionally, the execution of a substantial share repurchase program, buying back $23.1 million in stock, signals a commitment to returning capital to shareholders despite the credit headwinds. Investors should monitor future trends in credit quality and the impact of these specific loan relationships.
At the time of this filing, OSBC was trading at $21.21 on NASDAQ in the Finance sector, with a market capitalization of approximately $1.1B. The 52-week trading range was $14.70 to $22.43. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.