OSBC Stock Forecast & Price Target

Old Second Bancorp Inc. is positioned for a positive growth trajectory with anticipated loan growth of 4%-6% commencing in the second half of 2025, driven by the integration of new national powersport lending capabilities and increased market share in the Chicago Metropolitan Statistical Area (MSA). The addition of these powersport divisions is expected to enhance the company's product offerings significantly, thus broadening its appeal to a diverse customer base. Furthermore, there is potential for accelerated revenue growth in treasury management and card services, as the company continues to expand its market presence and diversify its financial service offerings.

Old Second Bancorp has seen some improvement in its non-performing assets (NPAs), which decreased by 27% quarter-over-quarter in 1Q25, reflecting the successful resolution and sale of its two largest other real estate owned (OREO) properties. Despite this positive trend, the bank is projected to continue facing elevated operating expenses, with expectations of an 8% decline in overall run-rate expenses to $40.6 million in 2Q25, primarily due to ongoing costs associated with OREO. Furthermore, persistent risks such as asset quality deterioration, disappointing growth in loan and deposit income, and elevated operating costs cast uncertainty over the bank's financial stability and growth prospects.