Midwest regional bank Old Second Bancorp (NASDAQ: OSBC) fell short of the market’s revenue expectations in Q3 2026, with sales flat year on year at $97.12 million. Its non-GAAP profit of $0.55 per share was 5.2% below analysts’ consensus estimates.
Is now the time to buy Old Second Bancorp? Find out by accessing our full research report, it’s free.
Old Second Bancorp (OSBC) Q3 2026 highlights:
- Net Interest Income: $84.05 million vs analyst estimates of $84.76 million (1.5% year-on-year growth, 0.8% miss)
- Net Interest Margin: 5.3% vs analyst estimates of 5.2% (5.8 basis point beat)
- Revenue: $97.12 million vs analyst estimates of $98.18 million (flat year on year, 1.1% miss)
- Efficiency Ratio: 52.3% vs analyst estimates of 52% (29.2 basis point miss)
- Adjusted EPS: $0.55 vs analyst expectations of $0.58 (5.2% miss)
- Tangible Book Value per Share: $14.75 vs analyst estimates of $15.16 (9.2% year-on-year growth, 2.7% miss)
- Market Capitalization: $1.28 billion
Company overview
Dating back to 1871 as one of the Chicago area's longest-standing financial institutions, Old Second Bancorp (NASDAQ: OSBC) is an Illinois-based community bank offering deposit services, commercial and consumer loans, wealth management, and mortgage products through its 53 branch locations.
Sales growth
Net interest income and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Thankfully, Old Second Bancorp’s 24% annualized revenue growth over the last five years was incredible. Its growth beat the average banking company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Old Second Bancorp’s annualized revenue growth of 16.3% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Old Second Bancorp’s $97.12 million of revenue was flat year on year, falling short of Wall Street’s estimates.
Net interest income made up 84.5% of the company’s total revenue during the last five years, meaning Old Second Bancorp barely relies on non-interest income to drive its overall growth.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
Tangible book value per share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
Old Second Bancorp’s TBVPS grew at an impressive 7.1% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 8.2% annually over the last two years from $12.61 to $14.75 per share.
Over the next 12 months, Consensus estimates call for Old Second Bancorp’s TBVPS to grow by 16.8% to $17.23, solid growth rate.
Key takeaways from Old Second Bancorp’s Q3 results
We struggled to find many positives in these results. Its EPS missed and its tangible book value per share fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $24.86 immediately after reporting.
Old Second Bancorp underperformed this quarter, but does that create an opportunity to invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
