Old Second Bancorp (OSBC) Valuation Check After Q1 2026 Earnings And Higher Credit Costs

Q1 2026 earnings event reshapes the story

Old Second Bancorp (OSBC) just posted Q1 2026 results that combine higher net income, a completed acquisition that expanded assets and footprint, and a clear rise in credit costs tied to problem loans.

See our latest analysis for Old Second Bancorp.

At a share price of $21.08, Old Second Bancorp has a year to date share price return of 8.21%. Its 1 year total shareholder return of 27.57% and 3 year total shareholder return of 95.98% point to momentum that has been building over time.

If these earnings have you thinking more broadly about where growth and income could come from next, it may be worth scanning 18 top founder-led companies

With Q1 bringing higher net income, a larger balance sheet and sharply higher credit costs, the stock now sits about 10% below one analyst target. Is OSBC still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 9.9% Undervalued

The most followed narrative pegs Old Second Bancorp’s fair value at $23.40, a touch above the recent $21.08 close, and ties that gap to earnings quality and modelled cash flows using a 6.98% discount rate.

Ongoing economic growth in suburban and exurban Midwest markets, paired with company commentary around loan origination momentum and deposit growth, is likely to support sustained mid single digit loan and deposit growth, expanding both revenue and earnings potential over the next few years.

Read the complete narrative.

Want to see what sits behind that growth story and fair value gap? The narrative leans on a specific blend of revenue, margin and earnings assumptions that are not obvious from the headline numbers.

Result: Fair Value of $23.40 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this depends on OSBC managing its concentrated Illinois exposure and any deterioration in commercial real estate credit, which could pressure earnings, capital, and that valuation gap.

Find out about the key risks to this Old Second Bancorp narrative.

Next Steps

With sentiment clearly mixed, and with both risks and rewards in play, it makes sense to move quickly, review the data for yourself, and weigh the 3 key rewards and 2 important warning signs

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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