OSBC Stock Forecast & Price Target

Old Second Bancorp is expected to experience strong loan growth starting in the second half of 2025, projected at 4% to 6% on a loan-to-asset basis, driven by enhanced production in the newly acquired powersport lending sector and increased commercial market share in the Chicago metropolitan area. Additionally, the bank's opportunity for revenue growth is bolstered by potential expansions in treasury management and card services, as it continues to capture market share and leverage a broader range of products offered to its client base. The acquisition of EBG introduces a promising powersport lending niche, enhancing Old Second Bancorp's competitive positioning and growth potential in this specialized financial segment.

Old Second Bancorp has recently experienced a significant decline in non-performing assets (NPAs), which dropped by 27% quarter-over-quarter to $37.7 million; however, this improvement is largely attributed to the resolution and sale of its largest other real estate owned (OREO) properties, indicating potential underlying issues in asset quality. Elevated operating expenses associated with OREO costs have been a persistent burden, although a projected decrease in these expenses by 8% in the upcoming quarter may not sufficiently address ongoing financial pressures. Furthermore, the bank faces numerous risks, including asset quality deterioration, slow growth in loans, deposits, and core fee income, as well as the challenges posed by macroeconomic factors, all contributing to a negative outlook for the future.