Old Second Bancorp reported third quarter 2026 net income of $28.9 million, or $0.56 per diluted share, supported by stable net interest income and a significant reduction in criticized loan levels. While the bank saw a slight contraction in total deposits as high-rate brokered funds rolled off, operating efficiency remained disciplined with an efficiency ratio of 52.34%.
Key Highlights
- Net interest margin on a tax-equivalent basis expanded to 5.27%, up four basis points linked-quarter as loan yields outweighed rising funding costs.
- Credit quality metrics improved significantly, with criticized loans falling to 1.88% of total loans from 3.05% in the previous quarter.
- Asset quality trends were positive despite concentrated charge-offs, as nonperforming loans declined 30% linked-quarter to $39.6 million.
- Capital return remained aggressive as the company repurchased 1.5 million shares (3% of outstanding) and increased its common dividend by 14%.