Old Second Bancorp (OSBC) Q3 2026 Earnings Report

The call was predominantly positive. Management reported strong profitability, an exceptional net interest margin, improving classified and criticized loan metrics, solid operating performance, broad lending pipelines, a new Ducati partnership, continued capital returns, and expectations for deposit growth. These positives were partially offset by elevated charge-offs, ongoing powersports losses, loan prepayments, deposit and funding pressures, expected margin giveback, and higher operating costs.

Management expects loan growth in the fourth quarter of 2026 to be “in the low single level,” expense growth to “continue to be modest in the quarters ahead,” and deposit growth in the fourth quarter, with most post-acquisition attrition “largely behind us”; it expects to give back “5 basis points or so” on margin but remain “solidly above a 25 margin for the near and intermediate term,” assuming “high cost deposit attrition slows,” and expects “45% of our loan book” and “25% of our securities portfolio” to reprice in the “next 3 to 4 quarters.” Management said investors could reasonably expect to “take out 5% of shares a year,” reserve levels will “not run much lower from here,” near-term expenses around $51.5 million “makes perfect sense,” and annual expense growth in the “3 to 4% range” is expected, while the common dividend was increased “by 14%” in the fourth quarter of 2026.