Ottawa Bancorp, Inc. Announces 2026 Second Quarter Results
OTTAWA, Ill., July 29, 2026 (GLOBE NEWSWIRE) — Ottawa Bancorp, Inc. (the “Company”) (OTCQX: OTTW), the holding company for OSB Community Bank (the “Bank”), announced net income of $1.0 million, or $0.42 per basic and diluted common share, for the three months ended June 30, 2026, compared to net income of $0.5 million, or $0.21 per basic and diluted common share, for the three months ended June 30, 2025. For the six months ended June 30, 2026, the Company announced net income of $1.5 million, or $0.66 per basic and diluted common share, compared to net income of $0.9 million, or $0.39 per basic and diluted common share for the six months ended June 30, 2025. The loan portfolio, net of allowance, decreased to $305.3 million as of June 30, 2026 from $305.8 million as of December 31, 2025 as payments and payoffs during the six month period exceeded originations. Non-performing loans decreased to $1.1 million at June 30, 2026 from $1.2 million at December 31, 2025. As a result, the ratio of non-performing loans to gross loans decreased from 0.38% at December 31, 2025 to 0.36% at June 30, 2026.
Through June 30, 2026, the Company has repurchased a total of 1,202,370 shares of its common stock under all of its stock repurchase programs at an average price of $13.68 per share.
“We are very pleased with our second quarter results, which reflected meaningful year-over-year growth in net income and earnings per share,” said Craig M. Hepner, President and Chief Executive Officer. “Aside from the one-time BOLI gain, the results of our core banking operations continued to improve driven by increased yields on earning-assets, disciplined funding-cost management and our continued attention to asset quality.”
Mr. Hepner went on to say, “Although loan balances have remained relatively stable during the first six months of the year, we remain committed to responsible capital management and long-term value enhancement for our shareholders. We appreciate the continued dedication of our team, whose efforts have contributed to the improved results of operations.
Comparison of Results of Operations for the Three Months Ended June 30, 2026 and June 30, 2025
Net income for the three months ended June 30, 2026 was $1.0 million compared to $0.5 million for the three months ended June 30, 2025. Total interest and dividend income was $4.5 million for the three months ended June 30, 2026 compared to $4.2 million for the three months ended June 30, 2025. This increase was due to a $7.6 million dollar increase in interest-earning assets and an increase in the average yield on interest-earning assets which improved by 0.15% to 5.24%. Interest expense was $1.6 million for both the three months ended June 30, 2026 and 2025. Our average cost of funds decreased to 2.07% for the three months ended June 30, 2026 from 2.13% for the three months ended June 30, 2025. Net interest income after recovery of credit losses increased by $0.2 million to $2.9 million for the three months ended June 30, 2026 as compared to $2.7 million for the three months ended June 30, 2025. Total other income was $0.8 million for the three months ended June 30, 2026 compared to $0.4 million for the three months ended June 30, 2025, due mainly to the recognition of a one-time, non-taxable gain of $0.3 million from the settlement of a Bank-owned Life Insurance (BOLI) policy, reflecting the death benefit in excess of the policy’s cash surrender value. Additionally, the net origination (amortization) of mortgage servicing rights increased by approximately $135,000 based on an independent third-party valuation conducted during the quarter. Total other expenses were $2.4 million for the three months ended June 30, 2026 compared to $2.3 million for the three months ended June 30, 2025. Increases in salaries and employee benefits expenses as well as higher legal and professional services expenses accounted for most of this increase.
The Company recorded a recovery of approximately $16 thousand for the three months ended June 30, 2026 compared to a recovery of approximately $49 thousand for the three months ended June 30, 2025 to decrease the Allowance for Credit Losses (ACL) position. The ACL on loans was $4.0 million, or 1.31% of total gross loans, at June 30, 2026 compared to $4.2 million, or 1.35% of gross loans, at December 31, 2025. Net recoveries during the second quarter of 2026 were approximately $2 thousand compared to net recoveries of $84 thousand during the second quarter of 2025. The current period adjustment to the ACL is the result of the quarterly calculation of Current Expected Credit Losses (CECL). The required reserves on non-performing loans as of June 30, 2026 decreased by approximately $31 thousand compared to the required reserves as of June 30, 2025.
The Company recorded income tax expense of $0.3 million for the three-month period ended June 30, 2026 as compared to income tax expense of $0.2 million for the three months ended June 30, 2025 due to higher pretax income during the period.
Comparison of Results of Operations for the Six Months Ended June 30, 2026 and June 30, 2025
Net income was $1.5 million for the six months ended June 30, 2026 compared to $0.9 million for the six months ended June 30, 2025. Total interest and dividend income was $8.9 million for the six months ended June 30, 2026 compared to $8.4 million for the six months ended June 30, 2025 as the average yield on interest-earning assets improved to 5.21% from 5.02%. Interest expense was $3.3 million for the six months ended which is comparable to the $3.3 million as of June 30, 2025. Our average cost of funds continued to decline, falling from 2.15% to 2.09%. Due to the increase in yield on earning assets and the decline in cost of funds, our net interest income for the six months ended June 30, 2026 increased to $5.7 million as compared to $5.2 million for the six months ended June 30, 2025. Total other income was $1.1 million during the six months ended June 30, 2026 compared to $0.6 million for the six months ended June 30, 2025. The increase is due primarily to the BOLI-related gain and the adjustment to the value of our mortgage servicing rights discussed above. Other expense levels were $0.3 million higher, increasing to $4.8 million for the six months ended June 30, 2026 as compared to $4.5 million for the six months ended June 30, 2025. The increase was primarily related to an increase in salary and employee benefit costs. Additionally, loan expenses increased due to a one-time corrective adjustment to our Freddie Mac settlement account during the first quarter of 2026.
The Company recorded a recovery of $97 thousand for the six-month period ended June 30, 2026 to decrease the ACL position. This compares to a recovery of $142 thousand for the six-month period ended June 30, 2025. Net charge-offs during the six months ended June 30, 2026 were approximately $49 thousand compared to net charge-offs of approximately $44 thousand during the six months ended June 30, 2025. The current period adjustment to the ACL is the result of the quarterly calculation of CECL.
We recorded an income tax expense of approximately $535 thousand for the six months ended June 30, 2026 compared to an income tax expense of $390 thousand for the six months ended June 30, 2025. This increase is due primarily to higher pre-tax earnings in 2026 as compared to 2025.
Comparison of Financial Condition at June 30, 2026 and December 31, 2025
Total consolidated assets as of June 30, 2026 were $355.7 million, a decrease of $6.9 million, or 1.9%, from $362.6 million at December 31, 2025. The decrease was due primarily to a decrease of $4.9 million in cash and cash equivalents, a $0.2 million decrease in accrued interest receivable, a decrease of $0.9 million in securities available for sale, a decrease of $0.5 million in cash surrender value of life insurance, a decrease of $0.5 million in loans, net of allowance, and a decrease of $0.2 million in other assets. These decreases were partially offset by an increase of $0.2 million in mortgage servicing rights and an increase of $0.3 million in loans held for sale.
Cash and cash equivalents decreased $4.9 million, or 20.1%, to $19.4 million at June 30, 2026 from $24.3 million at December 31, 2025. The decrease in cash and cash equivalents was primarily the result of cash used in financing activities of $8.5 million exceeding cash provided by investing activities of $1.1 million and cash provided by operating activities of $2.5 million.
Securities available for sale decreased $0.9 million, or 5.7%, to $15.1 million at June 30, 2026 from $16.0 million at December 31, 2025 as payments, calls and maturities during the period exceeded purchases and market value fluctuations.
Net loans decreased $0.5 million, or 0.2%, to $305.3 million at June 30, 2026 compared to $305.8 million at December 31, 2025 primarily due to a decrease of $5.7 million in one-to-four family residential mortgages, a decrease of $2.0 million in commercial loans and a decrease of $0.5 million in consumer loans. These decreases were partially offset by an increase of $2.3 million in multi-family residential loans and an increase of $5.2 million in non-residential real estate loans. The ACL on loans decreased by $0.2 million at June 30, 2026 as compared to December 31, 2025.
Total deposits decreased $7.9 million, or 2.7%, to $290.2 million at June 30, 2026 from $298.1 million at December 31, 2025. During the six months ended June 30, 2026 certificate of deposit accounts decreased by $7.3 million and interest bearing DDA accounts decreased by $6.3 million. Partially offsetting these decreases were increases in savings accounts of $1.6 million, non-interest bearing DDA accounts of $1.3 million and money market accounts of $2.7 million.
FHLB advances totaled $15.9 million at both June 30, 2026 and December 31, 2025.
Stockholders’ equity increased to $39.9 million at June 30, 2026 as compared to $39.0 million at December 31, 2025. The increase reflects net income of $1.5 million for the six months ended June 30, 2026 and other items totaling $0.1 million. This increase was partially offset by a $0.2 million decrease in other comprehensive loss due to a decrease in fair value of securities available for sale during the period and cash dividends of $0.5 million paid to shareholders.
About Ottawa Bancorp, Inc.
Ottawa Bancorp, Inc. is the holding company for OSB Community Bank which provides various financial services to individual and corporate customers in the United States. The Bank offers various deposit accounts, including checking, money market, regular savings, club savings, certificates of deposit, and various retirement accounts. Its loan portfolio includes one-to-four family residential mortgage, multi-family and non-residential real estate, commercial, and construction loans as well as auto loans and home equity lines of credit. OSB Community Bank was founded in 1871 and is headquartered in Ottawa, Illinois. For more information about the Company and the Bank, please visit www.myosb.bank.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as “will,” “expected,” “believe,” and “prospects,” involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, market disruptions, our ability to pay future dividends and if so at what level, our ability to receive any required regulatory approval or non-objection for the payment of dividends from the Bank to the Company or from the Company to stockholders, and our efforts to maximize stockholder value, including our ability to execute any capital management strategies, such as the repurchase of shares of the Company’s common stock, and our ability to execute any controlled growth and balance sheet strategies designed to lower the cost of funds and enhance earnings and liquidity. Ottawa Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under applicable law.
| Ottawa Bancorp, Inc. & Subsidiary | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
| June 30, 2026 and December 31, 2025 | ||||||||||||
| (Unaudited) | ||||||||||||
| June 30, | December 31, | |||||||||||
| 2026 | 2025 | |||||||||||
| Assets | ||||||||||||
| Cash and due from banks | $ | 9,382,780 | $ | 14,340,734 | ||||||||
| Interest bearing deposits | 3,992,795 | 6,719,709 | ||||||||||
| Federal funds sold | 6,060,000 | 3,259,000 | ||||||||||
| Total cash and cash equivalents | 19,435,575 | 24,319,443 | ||||||||||
| Securities available for sale, at fair value | 15,092,254 | 16,002,114 | ||||||||||
| Loans, net of allowance for credit losses of $4,047,211 and $4,190,140 at June 30, 2026 and December 31, 2025, respectively | 305,286,628 | 305,758,202 | ||||||||||
| Loans held for sale | 279,500 | – | ||||||||||
| Mortgage servicing rights | 1,293,452 | 1,075,957 | ||||||||||
| Premises and equipment, net | 5,767,659 | 5,887,528 | ||||||||||
| Accrued interest receivable | 1,197,194 | 1,413,551 | ||||||||||
| Deferred tax assets, net | 1,940,723 | 2,133,620 | ||||||||||
| Federal Home Loan Bank stock | 1,380,798 | 1,380,798 | ||||||||||
| Cash value of life insurance | 48,124 | 528,464 | ||||||||||
| Goodwill | 649,869 | 649,869 | ||||||||||
| Other assets | 3,281,854 | 3,442,607 | ||||||||||
| Total assets | $ | 355,653,630 | $ | 362,592,153 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||
| Liabilities | ||||||||||||
| Deposits: | ||||||||||||
| Non-interest bearing | $ | 24,404,340 | $ | 23,086,883 | ||||||||
| Interest bearing | 265,762,311 | 275,026,699 | ||||||||||
| Total deposits | 290,166,651 | 298,113,582 | ||||||||||
| Accrued interest payable | 476,565 | 545,766 | ||||||||||
| FHLB advances | 15,860,000 | 15,860,000 | ||||||||||
| Long term debt | 1,164,256 | 1,238,661 | ||||||||||
| Allowance for credit losses on off-balance sheet credit exposures | 80,729 | 83,629 | ||||||||||
| Other liabilities | 5,334,486 | 5,047,185 | ||||||||||
| Total liabilities | 313,082,687 | 320,888,823 | ||||||||||
| Commitments and contingencies | ||||||||||||
| ESOP Repurchase Obligation | 2,672,922 | 2,672,922 | ||||||||||
| Stockholders’ Equity | ||||||||||||
| Common stock, $.01 par value, 12,000,000 shares authorized; 2,301,195 and 2,292,784 shares issued at June 30, 2026 and December 31, 2025, respectively | 23,012 | 22,928 | ||||||||||
| Additional paid-in-capital | 21,180,254 | 21,060,890 | ||||||||||
| Retained earnings | 23,209,880 | 22,166,573 | ||||||||||
| Unallocated ESOP shares | (162,974 | ) | (162,974 | ) | ||||||||
| Unallocated management recognition plan shares | (139,794 | ) | (46,375 | ) | ||||||||
| Accumulated other comprehensive loss | (1,539,435 | ) | (1,337,712 | ) | ||||||||
| 42,570,943 | 41,703,330 | |||||||||||
| Less: | ||||||||||||
| ESOP Owned Shares | (2,672,922 | ) | (2,672,922 | ) | ||||||||
| Total stockholders’ equity | 39,898,021 | 39,030,408 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 355,653,630 | $ | 362,592,153 | ||||||||
| Ottawa Bancorp, Inc. & Subsidiary | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| Three and Six Months Ended June 30, 2026 and 2025 | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Interest and fees on loans | $ | 4,174,909 | $ | 3,925,744 | $ | 8,310,248 | $ | 7,716,904 | ||||||||
| Securities: | ||||||||||||||||
| Residential mortgage-backed and related securities | 88,341 | 101,287 | 180,762 | 204,587 | ||||||||||||
| State and municipal securities | 18,326 | 24,952 | 34,446 | 43,980 | ||||||||||||
| Dividends on non-marketable equity securities | 52,718 | 28,500 | 106,807 | 57,000 | ||||||||||||
| Interest-bearing deposits | 135,745 | 166,628 | 313,013 | 359,150 | ||||||||||||
| Total interest and dividend income | 4,470,039 | 4,247,111 | 8,945,276 | 8,381,621 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 1,481,339 | 1,464,485 | 3,028,075 | 2,983,457 | ||||||||||||
| Borrowings | 151,209 | 177,208 | 296,303 | 346,628 | ||||||||||||
| Total interest expense | 1,632,548 | 1,641,693 | 3,324,378 | 3,330,085 | ||||||||||||
| Net interest income | 2,837,491 | 2,605,418 | 5,620,898 | 5,051,536 | ||||||||||||
| Recovery of credit losses – loans | (16,270 | ) | (49,179 | ) | (93,912 | ) | (139,077 | ) | ||||||||
| Recovery of credit losses – off-balance sheet credit exposures | – | – | (2,900 | ) | (2,570 | ) | ||||||||||
| Net interest income after recovery of credit losses | 2,853,761 | 2,654,597 | 5,717,710 | 5,193,183 | ||||||||||||
| Other income: | ||||||||||||||||
| Gain on sale of loans | 44,871 | 58,190 | 76,205 | 79,429 | ||||||||||||
| Loan origination and servicing income | 136,930 | 158,200 | 276,516 | 285,093 | ||||||||||||
| Net origination (amortization) of mortgage servicing rights | 151,374 | 17,167 | 217,495 | (20,641 | ) | |||||||||||
| Customer service fees | 136,169 | 119,079 | 260,174 | 224,335 | ||||||||||||
| Death benefit in excess of cash surrender value | 275,238 | – | 275,238 | – | ||||||||||||
| Other | 9,599 | 5,458 | 17,368 | 14,036 | ||||||||||||
| Total other income | 754,181 | 358,094 | 1,122,996 | 582,252 | ||||||||||||
| Other expenses: | ||||||||||||||||
| Salaries and employee benefits | 1,387,897 | 1,292,896 | 2,745,065 | 2,500,853 | ||||||||||||
| Directors’ fees | 37,500 | 45,000 | 76,500 | 90,000 | ||||||||||||
| Occupancy | 152,365 | 162,646 | 292,187 | 322,774 | ||||||||||||
| Deposit insurance premium | 41,567 | 33,000 | 82,982 | 78,000 | ||||||||||||
| Legal and professional services | 140,318 | 90,398 | 254,032 | 173,243 | ||||||||||||
| Data processing | 314,452 | 302,151 | 610,942 | 603,612 | ||||||||||||
| Advertising | 18,356 | 29,037 | 38,464 | 53,545 | ||||||||||||
| Loan expense | 74,646 | 70,279 | 324,249 | 133,808 | ||||||||||||
| Other | 196,664 | 279,517 | 336,695 | 499,336 | ||||||||||||
| Total other expenses | 2,363,765 | 2,304,924 | 4,761,116 | 4,455,171 | ||||||||||||
| Income before income tax | 1,244,177 | 707,767 | 2,079,590 | 1,320,264 | ||||||||||||
| Income tax expense | 281,816 | 212,961 | 534,500 | 389,938 | ||||||||||||
| Net income | $ | 962,361 | $ | 494,806 | $ | 1,545,090 | $ | 930,326 | ||||||||
| Basic earnings per share | $ | 0.42 | $ | 0.21 | $ | 0.66 | $ | 0.39 | ||||||||
| Diluted earnings per share | $ | 0.42 | $ | 0.21 | $ | 0.66 | $ | 0.39 | ||||||||
| Dividends per share | $ | 0.11 | $ | 0.11 | $ | 0.21 | $ | 0.22 | ||||||||
| Ottawa Bancorp, Inc. & Subsidiary Selected Financial Data and Ratios (Unaudited) | |||||||||||||
| At or for the Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||
| Performance Ratios: | |||||||||||||
| Return on average assets (5) | 1.08 | % | 0.56 | % | 0.86 | % | 0.53 | % | |||||
| Return on average stockholders’ equity (5) | 9.51 | 5.02 | 7.79 | 4.72 | |||||||||
| Average stockholders’ equity to average assets | 11.36 | 11.24 | 11.08 | 11.24 | |||||||||
| Stockholders’ equity to total assets at end of period | 10.88 | 11.37 | 10.88 | 11.37 | |||||||||
| Net interest rate spread (1) (5) | 3.17 | 2.97 | 3.12 | 2.86 | |||||||||
| Net interest margin (2) (5) | 3.35 | 3.14 | 3.30 | 3.02 | |||||||||
| Other expense to average assets | 0.66 | 0.66 | 1.33 | 1.27 | |||||||||
| Efficiency ratio (3) | 65.83 | 77.77 | 70.60 | 79.07 | |||||||||
| Dividend payout ratio | 26.19 | 52.38 | 43.20 | 64.14 | |||||||||
| At or for the Six Months Ended June 30, 2026 | At or for the Twelve Months Ended December 31, 2025 | |||||||
| Regulatory Capital Ratios (4): | ||||||||
| Total risk-based capital (to risk-weighted assets) | 17.04 | % | 16.78 | % | ||||
| Tier 1 core capital (to risk-weighted assets) | 15.79 | 15.52 | ||||||
| Common equity Tier 1 (to risk-weighted assets) | 15.79 | 15.52 | ||||||
| Tier 1 leverage (to adjusted total assets) | 11.64 | 11.49 | ||||||
| Asset Quality Ratios: | ||||||||
| Net charge-offs to average gross loans outstanding | 0.02 | 0.01 | ||||||
| Allowance for credit losses on loans to gross loans outstanding | 1.31 | 1.35 | ||||||
| Non-performing loans to gross loans (6) | 0.36 | 0.38 | ||||||
| Non-performing assets to total assets (6) | 0.31 | 0.33 | ||||||
| Other Data: | ||||||||
| Book Value per common share | $ | 17.34 | $ | 17.27 | ||||
| Tangible Book Value per common share (7) | $ | 17.06 | $ | 16.99 | ||||
| Number of full-service offices | 3 | 3 | ||||||
| (1) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of funds on average interest-bearing liabilities. | ||||||||
| (2) Represents net interest income as a percent of average interest-earning assets. | ||||||||
| (3) Represents total other expenses divided by the sum of net interest income and total other income. | ||||||||
| (4) Ratios are for OSB Community Bank. | ||||||||
| (5) Annualized. | ||||||||
| (6) Non-performing assets consist of non-performing loans, foreclosed real estate and other foreclosed assets. Non-performing loans consist of all loans 90 days or more past due and all loans no longer accruing interest. | ||||||||
| (7) Non-GAAP measure. Excludes goodwill. | ||||||||
Contact: Craig Hepner President and Chief Executive Officer (815) 366-5437
