Old Second Bancorp reported first‑quarter 2026 net income of $25.6 million, translating to $0.48 per diluted share. The figure represents a decline from the $28.8 million, or $0.54 per diluted share, reported in the fourth quarter of 2025, and falls short of the consensus estimate of $0.52 per share, a miss of $0.04 or 7.7%. The adjusted diluted earnings per share of $0.49 also missed the consensus of $0.51.
Total revenue for the quarter reached $93.8 million, a figure that includes $81.1 million of net interest income and $12.7 million of non‑interest income. The revenue beat analysts’ expectations of $93.5 million by $0.3 million, or 0.3%, and the net interest income beat the $93.5 million estimate for net interest income alone by $12 million.
Net interest margin expanded to 5.14%, up 5 basis points sequentially and 26 basis points year‑over‑year. The improvement reflects higher net interest income relative to interest‑bearing liabilities, driven by a mix shift toward higher‑margin loan products and disciplined cost management that kept operating expenses from rising in line with revenue growth.
Provision for credit losses increased to $9.5 million from $3.0 million in the prior quarter, a jump of $6.5 million. Charge‑offs in the powersports and commercial real‑estate portfolios, including a downtown Chicago office property, were the primary contributors to the higher provision. The increase in credit losses weighed on profitability and contributed to the earnings miss.
Loan balances declined by $66.9 million compared with the previous quarter, reflecting a contraction in lending activity. Management projected mid‑single‑digit loan growth for the remainder of the year, and the powersports segment reported an all‑time high net contribution margin of 8.3% after charge‑offs, indicating that the segment remains a strong driver of profitability despite the higher loss experience.
James L. Eccher, President and Chief Executive Officer, said, "Old Second reported strong results in the first quarter of 2026 led by exceptional margin performance and disciplined operating efficiency." He also noted that the company was "disappointed in the level of charge‑offs in the quarter."
For the second quarter of 2026, Old Second Bancorp forecast earnings per share of $0.56 and expects mid‑single‑digit loan growth. The company also indicated that it anticipates maintaining a net interest margin around 5.0% for the year.
Investors reacted negatively to the earnings release, citing the earnings miss and the higher credit losses as key concerns.
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