Old Second Bancorp (OSBC) investor relations material

Executive summary

• Net income for Q2 2026 was $28.2 million ($0.54 per diluted share), up from $21.8 million ($0.48 per share) in Q2 2025 and $25.6 million ($0.48 per share) in Q1 2026; adjusted net income was $28.7 million ($0.55 per share), excluding MSR valuation and acquisition costs.

• The Bancorp Financial acquisition added $1.2 billion in loans and $1.23 billion in deposits, completed July 2025, with all related expenses recognized by June 2026.

• Return on assets was 1.65%, and return on average tangible common equity reached 15.58%.

• Tangible book value per share increased to $14.77 from $14.35 last quarter, with double-digit annualized growth.

• Board declared a $0.07 per share dividend, payable August 2026.

Financial highlights

• Net interest and dividend income rose to $83.3 million, up $19.1 million year-over-year and 2.69% quarter-over-quarter, primarily from acquired loan growth.

• Net interest margin (tax-equivalent) improved to 5.23%, up nine basis points sequentially and 38 basis points year-over-year.

• Noninterest income increased 5% quarter-over-quarter and 21.7% year-over-year to $13.3 million, led by wealth management, mortgage banking, and BOLI income.

• Noninterest expense increased 18% year-over-year to $51.3 million, mainly due to higher salaries, benefits, and consumer credit expense from the acquisition.

• Efficiency ratio improved to 51.72%; adjusted efficiency ratio at 50.80%.

Outlook and guidance

• Loan growth for 2026 is targeted at low to mid-single digits, with margin expected to remain elevated but possibly contract slightly in the second half.

• Fee income projected to grow at a low single-digit rate, with potential for mid-single digits if mortgage banking improves.

• Expense growth anticipated to be modest, with no major new investments planned and continued focus on expense management and liquidity.

• The balance sheet remains moderately asset-sensitive, positioned to benefit from rising rates.

• Management expects continued strong performance, citing a well-positioned balance sheet and adequate reserves for future losses.