Old Second vs PennantPark Floating Rate Capital
This page compares Old Second (OLD SECOND BANCORP INC) and PennantPark Floating Rate Capital Ltd., examining their business models, financial performance, and market context. It offers neutral, accessible explanations of how each organisation approaches risk, growth, and capital management in their sectors. Educational content, not financial advice.
This page compares Old Second (OLD SECOND BANCORP INC) and PennantPark Floating Rate Capital Ltd., examining their business models, financial performance, and market context. It offers neutral, access...
Investment Analysis
Old Second
OSBC
Pros
- Strong second quarter 2025 performance with a return on average tangible common equity of 15.29% and a tax-equivalent net interest margin of 4.85%.
- Healthy efficiency ratio at 55.99% and a robust balance sheet with a common equity tier 1 ratio of 13.77% and a loan to deposit ratio of 83%.
- Strategic growth supported by acquisition of Bancorp Financial, expanding scale and market presence in Illinois, with consistent dividend increases and a solid dividend history.
Considerations
- Third quarter 2025 earnings per share missed analyst expectations by approximately 31%, impacting short-term investor confidence.
- Stock price showed volatility post-earnings with a decline of over 2%, reflecting some market concerns about profitability consistency.
- Market capitalization under $1 billion and a modest trailing dividend yield of around 1.5%, which might limit appeal to income-focused investors.
Pros
- Focuses on floating rate loans to U.S. middle-market companies, providing attractive risk-reward potential amid rising interest rates.
- Diverse investment portfolio with at least 80% in floating rate loans and senior secured loans, targeting yield enhancement and capital preservation.
- Market capitalization near $900 million with a price-to-earnings ratio of 11.28 and price-to-book value below 1, indicating potential valuation appeal.
Considerations
- Externally managed, non-diversified closed-end investment structure may expose investors to management and liquidity risks.
- Portfolio includes up to 30% non-qualifying assets, which may introduce additional volatility and credit risk.
- Limited public information on short-term earnings performance and absence of readily available liquidity or interest coverage ratios.
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