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    Is Old Second Bancorp (OSBC) Undervalued After Q2 Earnings And Higher Charge Offs?

    Simply Wall St·07/30/2026 09:20:13
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    Old Second Bancorp (OSBC) shares are in focus after second quarter results paired higher net interest income and net income with a sharp rise in net charge offs and a maintained quarterly dividend.

    See our latest analysis for Old Second Bancorp.

    The second quarter update and higher net charge offs come after a period of strong momentum for Old Second Bancorp, with the share price up 22.71% over 90 days and a 1 year total shareholder return of 47.94%. This suggests recent earnings and buyback activity have supported sentiment despite rising credit losses.

    If you are reassessing bank exposure after Old Second Bancorp's results, it can help to broaden the watchlist using a focused screener such as 19 top founder-led companies

    Old Second Bancorp now appears to be a stronger profit engine on one side and a bank absorbing much higher credit losses on the other. After a sharp share price move, the question is whether that mix is already fully priced in or not.

    Most Popular Narrative: 20% Undervalued

    Old Second Bancorp's most followed narrative points to a fair value of $25.33, which sits slightly above the latest $25.29 close and frames the recent run in the context of earnings power and risk.

    The successful integration of acquisitions and technology upgrades is driving revenue growth, operating efficiency, and higher margins across core banking services. Expanding wealth management and potential further acquisitions diversify income, increase scale, and support long-term stable earnings growth.

    Read the complete narrative.

    Curious what sits behind that fair value for Old Second Bancorp. The narrative leans heavily on earnings growth, margin expansion, and a future profit multiple that is lower than many investors might expect.

    Result: Fair Value of $25.33 (UNDERVALUED)

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

    However, if conditions soften, Old Second Bancorp's heavy focus on Illinois and exposure to commercial real estate credit trends could quickly challenge this fair value narrative.

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

    Another View on Old Second Bancorp's Valuation

    The fair value narrative points to Old Second Bancorp trading at about a 20% discount to $25.33. Yet on a simple P/E, OSBC sits at 13.9x compared with 12.1x for the US Banks industry and a fair ratio of 13.5x. That indicates a smaller margin of safety than the story suggests.

    See what the numbers say about this price — find out in our valuation breakdown.

    NasdaqGS:OSBC P/E Ratio as at Jul 2026
    NasdaqGS:OSBC P/E Ratio as at Jul 2026

    Next Steps

    With Old Second Bancorp presenting a mix of supportive signals and clear pressure points, the sentiment is understandably split, so move quickly to review the 3 key rewards and 1 important warning sign.

    Looking for more investment ideas beyond Old Second Bancorp?

    If Old Second Bancorp has sharpened your focus on banks and valuation, do not stop there. Broaden your opportunity set with a few targeted ideas that many investors overlook.

    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.