Raymond James raised its price objective on Old Second Bancorp (NASDAQ: OSBC) to $23.00 from $21.00 and kept a Strong Buy rating on the shares. The adjustment sits within the current analyst target range of $21 to $26 and is consistent with an overall analyst consensus rating of 1.67, which equates to Strong Buy.
The firm pointed to the community bank's fourth-quarter performance as the main justification for the higher target. Raymond James highlighted solid expansion in net interest margin - noting that this improvement came on top of what it described as an "already industry-leading NIM" - and credited disciplined control of operating expenses. Those factors, the analyst said, contributed to an aggregate revenue increase of 14.55% over the past twelve months.
Despite those positives, Raymond James acknowledged that loan growth during the quarter was disappointing. The report emphasized that this weakness in loan balances should be viewed in the context of a multi-year process to run off a purchased participation portfolio originating from Old Second's West Suburban acquisition. As that wind-down nears completion, the firm expects that increases in loan production will more meaningfully translate into higher reported loan balances.
Raymond James retained a bullish longer-term view on Old Second, stating its belief that the franchise will continue to expand and deliver profitability metrics that outpace peers. That conviction underpins the maintained Strong Buy opinion and the revised price target.
Separately, Old Second released fourth-quarter 2025 results that beat Wall Street estimates. The bank reported adjusted earnings per share of $0.58, topping the $0.50 consensus estimate - a 16% surprise. Revenue for the quarter came in at $95.2 million versus an expected $94.88 million. Those figures were followed by an increase in investor optimism, according to market reaction cited around the earnings announcement.
Taken together, the combination of margin expansion, expense control and revenue growth informed Raymond James' updated valuation and continued positive stance. At the same time, the trend in loan growth and the transition around the purchased participation portfolio remain material variables for near-term loan balance dynamics.