OSBC Insiders Cash Out as Short Sellers Build Positions

Old Second Bancorp is a Chicagoland community bank reporting third-quarter results today, October 22, and the most distinctive signal heading into the print is not on the options desk but in the SEC filings: insiders have been selling.

Over the 90 days to September 30, insiders recorded a net sale of 170,000 shares worth roughly $4.3 million, according to ORTEX's first-party EDGAR data. The largest transactions came from Director Hugh McLean, who sold 50,000 shares across two trades in early September at prices around $25.63 to $25.73, and Vice Chairman Gary Collins, who added a further 21,000 shares to his sales at similar levels. None of these were flagged as pre-arranged 10b5-1 plan sales, making them discretionary disposals. The September 30 filings also show small share acquisitions by the CEO, CFO, and two EVPs, though at token sizes of fewer than 100 shares each, likely dividend reinvestment rather than conviction buying.

Short sellers have been moving in the same direction as the insiders. Shares short rose 37% over the past month to reach 5.2% of the free float, with the bulk of that build happening in early October. The weekly pace has since slowed to less than 0.1%, suggesting the position is consolidating rather than accelerating. Borrow conditions offer no particular constraint on either side: the cost to borrow is just 0.51%, and availability is exceptionally loose at roughly 1,400% of outstanding short interest, so the lending market is placing no stress on existing shorts and presents no friction for anyone looking to add. Against that, options positioning has tilted toward calls. The put/call ratio has eased to 0.10, below its 20-day average of 0.12, a shift that has continued through this week and contrasts with the more defensive posture seen in late September when the ratio ran above 0.20.

Analyst sentiment has been moving in OSBC's favour over the past year. Raymond James upgraded the stock to Strong Buy and raised its target to $30 in early October, and Piper Sandler has raised its target twice in 2026, most recently to $30 after last quarter's results. DA Davidson sits on the other side, maintaining a Neutral rating with a $25 target that sits just above the current price of $24.87. The mean target across coverage is $28.33, implying roughly 14% upside from here. Forward earnings momentum is strong, with the 12-month EPS estimate ranking in the 91st percentile for year-on-year growth, though the stock's price-to-earnings multiple of around 10.4 times keeps it in modest-valuation territory. FDIC call report data for the bank's insured charters showed net loans and leases up 31% on the same quarter a year earlier as of June 2026, and total deposits have fallen for three consecutive quarters, a tension between loan growth and funding that the third-quarter results will update directly.

OSBC rose just 1% over the past week while its closest regional-bank peers gained a median of around 2%, a mild underperformance that sits against a backdrop where insiders sold at prices above the current level and short interest has rebuilt from a lower base. The print will test whether loan growth momentum has been sustained, and whether the deposit trend has stabilised enough to shift the balance of the bear case.