Old Second Bancorp, Inc.

OSBC

Financial ServicesBanks - RegionalNASDAQ

$21.28

Market Cap: $1.12B

Old Second Bancorp, Inc. (OSBC) Valuation Summary

Updated May 11, 2026 17:33

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$7.06 – $37.39	$14.71	-30.9%
Growth Exit 10Y	$52.29 – $197.93	$88.69	+316.8%
EBITDA Exit 5Y	$32.50 – $89.38	$58.55	+175.1%
EBITDA Exit 10Y	$57.14 – $159.10	$100.43	+371.9%
▸ Trading Multiples
P/E	$15.77 – $22.07	$20.51	-3.6%
EV/EBITDA	$12.19 – $32.83	$23.09	+8.5%
EV/Revenue	$8.92 – $19.92	$18.28	-14.1%
▸ PEG
PEG Fair Value	$43.67 – $43.67	$43.67	+105.2%
▸ Earnings Power Value
Earnings Power Value	$23.69 – $35.47	$28.55	+34.1%
▸ Dividend Discount
Dividend Discount	$3.84 – $10.29	$5.80	-72.7%

Valuation History

DCF Analysis

Fair Value

$14.71

Market Price

$21.28

Upside / Downside

-30.9%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Old Second Bancorp, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -3.9% to 29.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 454, DPO 30, DIO 60). At a 8.6% WACC with mid-year discounting, the terminal value (102% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $14.71 per share, suggesting OSBC is overvalued by 30.9% at the current price of $21.28.

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	152	155	201	260	336	345
(−) Net Interest	42	43	55	72	93	95
(+) D&A	7	8	9	9	10	10
EBITDA	201	206	265	340	438	449

(−) Tax	40	41	53	68	88	90
(−) CapEx	9	9	11	15	19	20
(−) ΔWC	479	11	144	186	240	246
Free Cash Flow (FCFF)	-327	146	58	72	91	93

Terminal Value						1,541
WACC / Discount Rate	8.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-314	129	47	54	63	1,022

Enterprise Value	1,002
Projection Period	-21	-2.1%
Terminal Value	1,022	102.1%

(−) Current Net Debt	215

Equity Value	787
(/) Outstanding Shares	53

Fair Price	$14.71

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.6%	$21	$24	$27	$32	$37
7.6%	$16	$18	$20	$22	$26
8.6%	$12	$13	$15	$16	$18
9.6%	$9	$10	$11	$12	$14
10.6%	$7	$8	$9	$9	$10

Current price: $21.28. Green = undervalued, Red = overvalued.

Fair Value

$88.69

Market Price

$21.28

Upside / Downside

+316.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Old Second Bancorp, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -3.9% to 7.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 454, DPO 30, DIO 60). At a 8.6% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $88.69 per share, suggesting OSBC is undervalued by 316.8% at the current price of $21.28.

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	152	155	201	260	336	420	506	588	658	706	724
(−) Net Interest	42	43	55	72	93	116	139	162	181	195	199
(+) D&A	7	8	9	9	10	13	16	20	24	29	29
EBITDA	201	206	265	340	438	548	662	770	863	929	952

(−) Tax	40	41	53	68	88	110	132	154	172	185	189
(−) CapEx	9	9	11	15	19	24	29	33	37	40	41
(−) ΔWC	479	11	144	186	240	264	272	258	218	153	157
Free Cash Flow (FCFF)	-327	146	58	72	91	150	228	325	435	551	565

Terminal Value											9,330
WACC / Discount Rate	8.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-314	129	47	54	63	96	134	175	216	253	4,105

Enterprise Value	4,958
Projection Period	853	17.2%
Terminal Value	4,105	82.8%

(−) Current Net Debt	215

Equity Value	4,743
(/) Outstanding Shares	53

Fair Price	$88.69

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.6%	$125	$138	$153	$172	$198
7.6%	$97	$105	$114	$125	$139
8.6%	$78	$83	$89	$96	$104
9.6%	$63	$67	$71	$75	$81
10.6%	$52	$55	$58	$61	$64

Current price: $21.28. Green = undervalued, Red = overvalued.

Fair Value

$58.53

Market Price

$21.28

Upside / Downside

+175.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Old Second Bancorp, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -3.9% to 29.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 454, DPO 30, DIO 60). At a 8.6% WACC with mid-year discounting, the terminal value (101% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $58.55 per share, suggesting OSBC is undervalued by 175.1% at the current price of $21.28.

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

EV/EBITDA Exit Multiple

11.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	152	155	201	260	336	345
(−) Net Interest	42	43	55	72	93	95
(+) D&A	7	8	9	9	10	10
EBITDA	201	206	265	340	438	449

(−) Tax	40	41	53	68	88	—
(−) CapEx	9	9	11	15	19	—
(−) ΔWC	479	11	144	186	240	—
Free Cash Flow (FCF)	-327	146	58	72	91	—

Peers' EBITDA Multiple						11.3x
Terminal Value						5,074
WACC / Discount Rate	8.56%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-314	129	47	54	63	3,366

Enterprise Value	3,345
Projection Period	-21	-0.6%
Terminal Value	3,366	100.6%

(−) Current Net Debt	215
Equity Value	3,130
(÷) Outstanding Shares	53M
Fair Price	$59	+175.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.3x	9.3x	11.3x	13.3x	15.3x
6.6%	$40	$53	$65	$77	$89
7.6%	$38	$50	$62	$73	$85
8.6%	$36	$47	$59	$70	$81
9.6%	$34	$45	$56	$66	$77
10.6%	$32	$43	$53	$63	$73

Current price: $21.28. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$100.40

Market Price

$21.28

Upside / Downside

+371.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Old Second Bancorp, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -3.9% to 7.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 454, DPO 30, DIO 60). At a 8.6% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.3x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $100.43 per share, suggesting OSBC is undervalued by 371.9% at the current price of $21.28.

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

EV/EBITDA Exit Multiple

11.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	152	155	201	260	336	420	506	588	658	706	724
(−) Net Interest	42	43	55	72	93	116	139	162	181	195	199
(+) D&A	7	8	9	9	10	13	16	20	24	29	29
EBITDA	201	206	265	340	438	548	662	770	863	929	952

(−) Tax	40	41	53	68	88	110	132	154	172	185	—
(−) CapEx	9	9	11	15	19	24	29	33	37	40	—
(−) ΔWC	479	11	144	186	240	264	272	258	218	153	—
Free Cash Flow (FCF)	-327	146	58	72	91	150	228	325	435	551	—

Peers' EBITDA Multiple											11.3x
Terminal Value											10,753
WACC / Discount Rate	8.56%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-314	129	47	54	63	96	134	175	216	253	4,731

Enterprise Value	5,585
Projection Period	853	15.3%
Terminal Value	4,731	84.7%

(−) Current Net Debt	215
Equity Value	5,370
(÷) Outstanding Shares	53M
Fair Price	$100	+371.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.3x	9.3x	11.3x	13.3x	15.3x
6.6%	$84	$102	$121	$140	$159
7.6%	$76	$93	$110	$128	$145
8.6%	$69	$85	$100	$116	$132
9.6%	$63	$77	$91	$106	$120
10.6%	$57	$70	$83	$96	$109

Current price: $21.28. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$20.51

Market Price

$21.28

Upside / Downside

-3.6%

Verdict

Overvalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Old Second Bancorp, Inc. (OSBC) has a fair value of $20.51 based on 10 comparable companies in the Banks - Regional industry.

P/E Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Old Second Bancorp, Inc.OSBC	1,138	13.1x	11.1x
Texas Capital Bancshares, Inc.TCBI	4,392	14.8x	108.0x
Merchants BancorpMBIN	2,129	12.3x	8.1x
Tompkins Financial CorporationTMP	1,236	7.6x	85.8x
Peoples Bancorp Inc.PEBO	1,231	11.5x	9.7x
First Mid Bancshares, Inc.FMBH	1,170	11.5x	14.0x
OceanFirst Financial Corp.OCFC	1,083	16.1x	11.9x
FirstSun Capital BancorpFSUN	1,032	10.5x	11.2x
Southside Bancshares, Inc.SBSI	1,001	14.7x	12.5x
Burke & Herbert Financial Services Corp.BHRB	960	8.2x	8.4x
Central Pacific Financial Corp.CPF	908	12.1x	16.6x
Industry Median		11.8x	12.2x
(*) Profit after tax		80	103
Equity Value		947	1,246
(/) Outstanding shares		53	53
Fair Price		$18	$23

Selected Fair Value (avg of trailing + forward)

$20.51

-3.6%

Fair Value

$23.09

Market Price

$21.28

Upside / Downside

+8.5%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Old Second Bancorp, Inc. (OSBC) has a fair value of $23.09 based on 10 comparable companies in the Banks - Regional industry.

EV/EBITDA Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Old Second Bancorp, Inc.OSBC	1,138	11.2x	16.8x
Texas Capital Bancshares, Inc.TCBI	4,392	7.2x	12.9x
Merchants BancorpMBIN	2,129	22.3x	47.6x
Tompkins Financial CorporationTMP	1,236	7.8x	20.6x
Peoples Bancorp Inc.PEBO	1,231	13.2x	18.8x
First Mid Bancshares, Inc.FMBH	1,170	12.6x	19.3x
OceanFirst Financial Corp.OCFC	1,083	27.7x	48.2x
FirstSun Capital BancorpFSUN	1,032	3.1x	5.2x
Southside Bancshares, Inc.SBSI	1,001	16.3x	28.4x
Burke & Herbert Financial Services Corp.BHRB	960	10.0x	14.2x
Central Pacific Financial Corp.CPF	908	6.3x	9.5x
Industry Median		11.3x	19.0x
(*) EBITDA		121	81
= Enterprise Value		1,365	1,535
(-) Net Debt		215	215
Equity Value		1,150	1,320
(/) Outstanding shares		53	53
Fair Price		$21	$25

Selected Fair Value (avg of trailing + forward)

$23.09

+8.5%

Fair Value

$18.28

Market Price

$21.28

Upside / Downside

-14.1%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Old Second Bancorp, Inc. (OSBC) has a fair value of $18.28 based on 10 comparable companies in the Banks - Regional industry.

EV/Revenue Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Old Second Bancorp, Inc.OSBC	1,138	3.4x	5.1x
Texas Capital Bancshares, Inc.TCBI	4,392	1.7x	3.1x
Merchants BancorpMBIN	2,129	4.4x	9.3x
Tompkins Financial CorporationTMP	1,236	3.0x	8.0x
Peoples Bancorp Inc.PEBO	1,231	2.9x	4.1x
First Mid Bancshares, Inc.FMBH	1,170	3.2x	4.8x
OceanFirst Financial Corp.OCFC	1,083	3.9x	6.9x
FirstSun Capital BancorpFSUN	1,032	0.7x	1.2x
Southside Bancshares, Inc.SBSI	1,001	3.2x	5.6x
Burke & Herbert Financial Services Corp.BHRB	960	2.9x	4.2x
Central Pacific Financial Corp.CPF	908	1.7x	2.7x
Industry Median		3.0x	4.5x
(*) Revenue		397	265
= Enterprise Value		1,188	1,196
(-) Net Debt		215	215
Equity Value		973	981
(/) Outstanding shares		53	53
Fair Price		$18	$18

Selected Fair Value (avg of trailing + forward)

$18.28

-14.1%

PEG Fair Value

Fair Value

$43.67

Market Price

$21.28

Upside / Downside

+105.2%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 20.1% plus 1.1% dividend yield, the company has a fair value of $43.67 based on NTM EPS (FY2026) of $2.17. The current PEG ratio is 0.49.

PEG Ratio

0.49Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 9.8 ÷ (19.0% + 1.1%) = 0.49

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG highly applicable

PEG is most informative for high-growth companies — the PEG sweet spot.

Fair Value Calculation

EPS Growth RateForward	19.0%
Dividend Yield	+1.1%
Adjusted Growth (clamped 8–25%)	20.1%
Fair P/E	20.1x
NTM EPS (FY2026)	$2.17
Fair Value	$43.67

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$1.62	—	—
FY2026E	$2.17	+33.8%	4
FY2027E	$2.30	+5.9%	4

2Y Forward EPS CAGR: 19.0%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$20.0M	$0.65	—
FY2022	$67.4M	$1.49	+129.2%
FY2023	$91.7M	$2.02	+35.6%
FY2024	$85.3M	$1.87	-7.4%
FY2025	$80.3M	$1.62	-13.4%

4Y Historical EPS CAGR: 25.6%

Earnings Power Value

Fair Value

$28.55

Market Price

$21.28

Upside / Downside

+34.1%

Verdict

Undervalued

Using the Earnings Power Value framework with a WACC of 8.6% and normalized earnings of $149.0M, the company has a fair value of $28.55 per share. The EPV range is $23.69 – $35.47 based on WACC sensitivity (7.1% – 10.1%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	149	149	149
(/) WACC	10.1%	8.6%	7.1%
Enterprise Value	1,482	1,741	2,112
(-) Net debt	215	215	215
Equity Value	1,267	1,527	1,897
(/) Outstanding shares	53	53	53
Fair Price	$23.69	$28.55	$35.47

Dividend Discount Model

Fair Value

$5.80

Market Price

$21.28

Upside / Downside

-72.7%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 7.8% and projected dividend growth of 8.6%, the fair value is $5.80 per share. The DDM range is $3.84 – $10.29 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.23

Dividend Yield

1.09%

Payout Ratio

15.2%

Dividend Coverage

6.56x

FCF Payout Ratio10.4%

DPS CAGR (4Y)11.1%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.23	15.2%	+11.0%
2024	$0.21	11.0%	+4.7%
2023	$0.20	9.8%	+0.4%
2022	$0.20	13.2%	+30.9%
2021	$0.15	23.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.25	8.6%	0.9280	$0.23
2027	$0.27	8.6%	0.8611	$0.23
2028	$0.29	8.6%	0.7991	$0.23
2029	$0.32	8.6%	0.7415	$0.24
2030	$0.35	8.6%	0.6881	$0.24
Terminal Value	$0.35 DPS	2.5%		$4.63

PV of Projected Dividends$1.17

PV of Terminal Value$4.63

Fair Value per Share$5.80

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	6.6%	7.6%	8.6%	9.6%	10.6%
5.8%	$9	$9	$9	$10	$10
6.8%	$7	$7	$7	$8	$8
7.8%	$5	$6	$6	$6	$6
8.8%	$4	$5	$5	$5	$5
9.8%	$4	$4	$4	$4	$5

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Old Second Bancorp, Inc. (OSBC) Valuation Summary

Updated May 11, 2026 17:33

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$7.06 – $37.39	$14.71	-30.9%
Growth Exit 10Y	$52.29 – $197.93	$88.69	+316.8%
EBITDA Exit 5Y	$32.50 – $89.38	$58.55	+175.1%
EBITDA Exit 10Y	$57.14 – $159.10	$100.43	+371.9%
▸ Trading Multiples
P/E	$15.77 – $22.07	$20.51	-3.6%
EV/EBITDA	$12.19 – $32.83	$23.09	+8.5%
EV/Revenue	$8.92 – $19.92	$18.28	-14.1%
▸ PEG
PEG Fair Value	$43.67 – $43.67	$43.67	+105.2%
▸ Earnings Power Value
Earnings Power Value	$23.69 – $35.47	$28.55	+34.1%
▸ Dividend Discount
Dividend Discount	$3.84 – $10.29	$5.80	-72.7%

Valuation History

DCF Analysis

Fair Value

$14.71

Market Price

$21.28

Upside / Downside

-30.9%

Verdict

Overvalued

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	152	155	201	260	336	345
(−) Net Interest	42	43	55	72	93	95
(+) D&A	7	8	9	9	10	10
EBITDA	201	206	265	340	438	449

(−) Tax	40	41	53	68	88	90
(−) CapEx	9	9	11	15	19	20
(−) ΔWC	479	11	144	186	240	246
Free Cash Flow (FCFF)	-327	146	58	72	91	93

Terminal Value						1,541
WACC / Discount Rate	8.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-314	129	47	54	63	1,022

Enterprise Value	1,002
Projection Period	-21	-2.1%
Terminal Value	1,022	102.1%

(−) Current Net Debt	215

Equity Value	787
(/) Outstanding Shares	53

Fair Price	$14.71

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.6%	$21	$24	$27	$32	$37
7.6%	$16	$18	$20	$22	$26
8.6%	$12	$13	$15	$16	$18
9.6%	$9	$10	$11	$12	$14
10.6%	$7	$8	$9	$9	$10

Current price: $21.28. Green = undervalued, Red = overvalued.

Fair Value

$88.69

Market Price

$21.28

Upside / Downside

+316.8%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	152	155	201	260	336	420	506	588	658	706	724
(−) Net Interest	42	43	55	72	93	116	139	162	181	195	199
(+) D&A	7	8	9	9	10	13	16	20	24	29	29
EBITDA	201	206	265	340	438	548	662	770	863	929	952

(−) Tax	40	41	53	68	88	110	132	154	172	185	189
(−) CapEx	9	9	11	15	19	24	29	33	37	40	41
(−) ΔWC	479	11	144	186	240	264	272	258	218	153	157
Free Cash Flow (FCFF)	-327	146	58	72	91	150	228	325	435	551	565

Terminal Value											9,330
WACC / Discount Rate	8.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-314	129	47	54	63	96	134	175	216	253	4,105

Enterprise Value	4,958
Projection Period	853	17.2%
Terminal Value	4,105	82.8%

(−) Current Net Debt	215

Equity Value	4,743
(/) Outstanding Shares	53

Fair Price	$88.69

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.6%	$125	$138	$153	$172	$198
7.6%	$97	$105	$114	$125	$139
8.6%	$78	$83	$89	$96	$104
9.6%	$63	$67	$71	$75	$81
10.6%	$52	$55	$58	$61	$64

Current price: $21.28. Green = undervalued, Red = overvalued.

Fair Value

$58.53

Market Price

$21.28

Upside / Downside

+175.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Old Second Bancorp, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -3.9% to 29.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 454, DPO 30, DIO 60). At a 8.6% WACC with mid-year discounting, the terminal value (101% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $58.55 per share, suggesting OSBC is undervalued by 175.1% at the current price of $21.28.

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

EV/EBITDA Exit Multiple

11.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	152	155	201	260	336	345
(−) Net Interest	42	43	55	72	93	95
(+) D&A	7	8	9	9	10	10
EBITDA	201	206	265	340	438	449

(−) Tax	40	41	53	68	88	—
(−) CapEx	9	9	11	15	19	—
(−) ΔWC	479	11	144	186	240	—
Free Cash Flow (FCF)	-327	146	58	72	91	—

Peers' EBITDA Multiple						11.3x
Terminal Value						5,074
WACC / Discount Rate	8.56%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	-314	129	47	54	63	3,366

Enterprise Value	3,345
Projection Period	-21	-0.6%
Terminal Value	3,366	100.6%

(−) Current Net Debt	215
Equity Value	3,130
(÷) Outstanding Shares	53M
Fair Price	$59	+175.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.3x	9.3x	11.3x	13.3x	15.3x
6.6%	$40	$53	$65	$77	$89
7.6%	$38	$50	$62	$73	$85
8.6%	$36	$47	$59	$70	$81
9.6%	$34	$45	$56	$66	$77
10.6%	$32	$43	$53	$63	$73

Current price: $21.28. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$100.40

Market Price

$21.28

Upside / Downside

+371.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Old Second Bancorp, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -3.9% to 7.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 454, DPO 30, DIO 60). At a 8.6% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.3x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $100.43 per share, suggesting OSBC is undervalued by 371.9% at the current price of $21.28.

FCFF Present Value Calculation

WACC

8.56%

3% – 20%

EV/EBITDA Exit Multiple

11.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	152	155	201	260	336	420	506	588	658	706	724
(−) Net Interest	42	43	55	72	93	116	139	162	181	195	199
(+) D&A	7	8	9	9	10	13	16	20	24	29	29
EBITDA	201	206	265	340	438	548	662	770	863	929	952

(−) Tax	40	41	53	68	88	110	132	154	172	185	—
(−) CapEx	9	9	11	15	19	24	29	33	37	40	—
(−) ΔWC	479	11	144	186	240	264	272	258	218	153	—
Free Cash Flow (FCF)	-327	146	58	72	91	150	228	325	435	551	—

Peers' EBITDA Multiple											11.3x
Terminal Value											10,753
WACC / Discount Rate	8.56%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	-314	129	47	54	63	96	134	175	216	253	4,731

Enterprise Value	5,585
Projection Period	853	15.3%
Terminal Value	4,731	84.7%

(−) Current Net Debt	215
Equity Value	5,370
(÷) Outstanding Shares	53M
Fair Price	$100	+371.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.3x	9.3x	11.3x	13.3x	15.3x
6.6%	$84	$102	$121	$140	$159
7.6%	$76	$93	$110	$128	$145
8.6%	$69	$85	$100	$116	$132
9.6%	$63	$77	$91	$106	$120
10.6%	$57	$70	$83	$96	$109

Current price: $21.28. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$20.51

Market Price

$21.28

Upside / Downside

-3.6%

Verdict

Overvalued

P/E Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Old Second Bancorp, Inc.OSBC	1,138	13.1x	11.1x
Texas Capital Bancshares, Inc.TCBI	4,392	14.8x	108.0x
Merchants BancorpMBIN	2,129	12.3x	8.1x
Tompkins Financial CorporationTMP	1,236	7.6x	85.8x
Peoples Bancorp Inc.PEBO	1,231	11.5x	9.7x
First Mid Bancshares, Inc.FMBH	1,170	11.5x	14.0x
OceanFirst Financial Corp.OCFC	1,083	16.1x	11.9x
FirstSun Capital BancorpFSUN	1,032	10.5x	11.2x
Southside Bancshares, Inc.SBSI	1,001	14.7x	12.5x
Burke & Herbert Financial Services Corp.BHRB	960	8.2x	8.4x
Central Pacific Financial Corp.CPF	908	12.1x	16.6x
Industry Median		11.8x	12.2x
(*) Profit after tax		80	103
Equity Value		947	1,246
(/) Outstanding shares		53	53
Fair Price		$18	$23

Selected Fair Value (avg of trailing + forward)

$20.51

-3.6%

Fair Value

$23.09

Market Price

$21.28

Upside / Downside

+8.5%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Old Second Bancorp, Inc. (OSBC) has a fair value of $23.09 based on 10 comparable companies in the Banks - Regional industry.

EV/EBITDA Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Old Second Bancorp, Inc.OSBC	1,138	11.2x	16.8x
Texas Capital Bancshares, Inc.TCBI	4,392	7.2x	12.9x
Merchants BancorpMBIN	2,129	22.3x	47.6x
Tompkins Financial CorporationTMP	1,236	7.8x	20.6x
Peoples Bancorp Inc.PEBO	1,231	13.2x	18.8x
First Mid Bancshares, Inc.FMBH	1,170	12.6x	19.3x
OceanFirst Financial Corp.OCFC	1,083	27.7x	48.2x
FirstSun Capital BancorpFSUN	1,032	3.1x	5.2x
Southside Bancshares, Inc.SBSI	1,001	16.3x	28.4x
Burke & Herbert Financial Services Corp.BHRB	960	10.0x	14.2x
Central Pacific Financial Corp.CPF	908	6.3x	9.5x
Industry Median		11.3x	19.0x
(*) EBITDA		121	81
= Enterprise Value		1,365	1,535
(-) Net Debt		215	215
Equity Value		1,150	1,320
(/) Outstanding shares		53	53
Fair Price		$21	$25

Selected Fair Value (avg of trailing + forward)

$23.09

+8.5%

Fair Value

$18.28

Market Price

$21.28

Upside / Downside

-14.1%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Old Second Bancorp, Inc. (OSBC) has a fair value of $18.28 based on 10 comparable companies in the Banks - Regional industry.

EV/Revenue Valuation — Banks - Regional

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Old Second Bancorp, Inc.OSBC	1,138	3.4x	5.1x
Texas Capital Bancshares, Inc.TCBI	4,392	1.7x	3.1x
Merchants BancorpMBIN	2,129	4.4x	9.3x
Tompkins Financial CorporationTMP	1,236	3.0x	8.0x
Peoples Bancorp Inc.PEBO	1,231	2.9x	4.1x
First Mid Bancshares, Inc.FMBH	1,170	3.2x	4.8x
OceanFirst Financial Corp.OCFC	1,083	3.9x	6.9x
FirstSun Capital BancorpFSUN	1,032	0.7x	1.2x
Southside Bancshares, Inc.SBSI	1,001	3.2x	5.6x
Burke & Herbert Financial Services Corp.BHRB	960	2.9x	4.2x
Central Pacific Financial Corp.CPF	908	1.7x	2.7x
Industry Median		3.0x	4.5x
(*) Revenue		397	265
= Enterprise Value		1,188	1,196
(-) Net Debt		215	215
Equity Value		973	981
(/) Outstanding shares		53	53
Fair Price		$18	$18

Selected Fair Value (avg of trailing + forward)

$18.28

-14.1%

PEG Fair Value

Fair Value

$43.67

Market Price

$21.28

Upside / Downside

+105.2%

Verdict

Undervalued

PEG Ratio

0.49Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 9.8 ÷ (19.0% + 1.1%) = 0.49

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG highly applicable

PEG is most informative for high-growth companies — the PEG sweet spot.

Fair Value Calculation

EPS Growth RateForward	19.0%
Dividend Yield	+1.1%
Adjusted Growth (clamped 8–25%)	20.1%
Fair P/E	20.1x
NTM EPS (FY2026)	$2.17
Fair Value	$43.67

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$1.62	—	—
FY2026E	$2.17	+33.8%	4
FY2027E	$2.30	+5.9%	4

2Y Forward EPS CAGR: 19.0%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$20.0M	$0.65	—
FY2022	$67.4M	$1.49	+129.2%
FY2023	$91.7M	$2.02	+35.6%
FY2024	$85.3M	$1.87	-7.4%
FY2025	$80.3M	$1.62	-13.4%

4Y Historical EPS CAGR: 25.6%

Earnings Power Value

Fair Value

$28.55

Market Price

$21.28

Upside / Downside

+34.1%

Verdict

Undervalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	149	149	149
(/) WACC	10.1%	8.6%	7.1%
Enterprise Value	1,482	1,741	2,112
(-) Net debt	215	215	215
Equity Value	1,267	1,527	1,897
(/) Outstanding shares	53	53	53
Fair Price	$23.69	$28.55	$35.47

Dividend Discount Model

Fair Value

$5.80

Market Price

$21.28

Upside / Downside

-72.7%

Verdict

Overvalued

Dividend Profile

Current DPS

$0.23

Dividend Yield

1.09%

Payout Ratio

15.2%

Dividend Coverage

6.56x

FCF Payout Ratio10.4%

DPS CAGR (4Y)11.1%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.23	15.2%	+11.0%
2024	$0.21	11.0%	+4.7%
2023	$0.20	9.8%	+0.4%
2022	$0.20	13.2%	+30.9%
2021	$0.15	23.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.25	8.6%	0.9280	$0.23
2027	$0.27	8.6%	0.8611	$0.23
2028	$0.29	8.6%	0.7991	$0.23
2029	$0.32	8.6%	0.7415	$0.24
2030	$0.35	8.6%	0.6881	$0.24
Terminal Value	$0.35 DPS	2.5%		$4.63

PV of Projected Dividends$1.17

PV of Terminal Value$4.63

Fair Value per Share$5.80

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	6.6%	7.6%	8.6%	9.6%	10.6%
5.8%	$9	$9	$9	$10	$10
6.8%	$7	$7	$7	$8	$8
7.8%	$5	$6	$6	$6	$6
8.8%	$4	$5	$5	$5	$5
9.8%	$4	$4	$4	$4	$5