Old Second Bancorp (OSBC) investor relations material

Executive summary

• Net income for Q1 2026 was $25.6 million ($0.48 per diluted share), with adjusted net income at $26 million ($0.49 per share) excluding MSR valuation and acquisition costs, down from $28.8 million ($0.54 per share) in Q4 2025.

• Tangible book value per share rose to $14.35, increasing 1.63% sequentially despite $23.1 million in share repurchases.

• Return on assets was 1.51%, and return on average tangible common equity was 14.2%.

• Net interest margin (NIM) reached 5.14%, up 5 bps from last quarter and 26 bps year-over-year.

• Board declared a $0.07 per share dividend, payable May 11, 2026.

Financial highlights

• Net loan charge-offs totaled $9.8 million, mainly from Powersports ($3.9M), commercial real estate ($3.9M), and C&I ($1.3M).

• Allowance for credit losses on loans was $72.1 million (1.39% of total loans), nearly flat from year-end.

• Provision for credit losses increased by $6.5 million to $9.5 million, reflecting isolated charge-offs in commercial and powersport loans.

• Noninterest income rose $476,000 quarter-over-quarter and $2.4 million year-over-year, with mortgage banking and powersport loan servicing fees contributing.

• Total non-interest expense declined $2.7 million from the prior quarter to $50.2 million, with acquisition costs dropping significantly.

Outlook and guidance

• Loan growth for the remainder of 2026 is targeted in the mid-single-digit range.

• Expense growth is expected to remain modest at 3%-4% for the year.

• Net charge-offs in Powersports expected to trend lower due to seasonality, but remain elevated versus historical norms.

• Margin expected to remain strong near 5%, with some compression possible later in the year.

• Management expects continued strong margin performance and disciplined operating efficiency.