Ottawa Bancorp, Inc. Announces 2026 Third Quarter Results

Nine-month earnings increased despite a quarterly loss and higher expenses associated with the planned Pontiac Bancorp merger.

Rhea-AI Summary

Ottawa Bancorp (OTTW) reported a third-quarter 2026 net loss of $0.1 million, reversing a profit in the prior-year quarter. Basic and diluted loss per share was $0.04, versus earnings of $0.18 a year earlier. The company attributed higher legal, professional services and data processing costs almost entirely to its planned merger with Pontiac Bancorp; total other expenses rose to $3.4 million from $2.3 million.

Quarterly net interest income increased 13.6%, and net interest margin expanded 30 basis points to 3.39%. Nine-month net income rose to $1.5 million, or $0.62 per share, from $1.4 million, or $0.57 per share. At September 30, net loans reached $313.5 million, up 2.5% from year-end, while non-performing loans fell to 0.33% of gross loans from 0.38%. Deposits declined to $297.6 million from $298.1 million, and cash and cash equivalents fell to $17.2 million from $24.3 million.

15 points · 0 major

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0 major · 13 points

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Positive

• Moderate pointNine-month net income rose to $1.5 million, or $0.62 per share, from $1.4 million, or $0.57.
• Moderate pointThird-quarter net interest income increased 13.6% year over year; net interest margin expanded 30 basis points to 3.39%.
• Moderate pointNet loans increased 2.5% to $313.5 million from December 31, 2025.
• Minor pointNine-month net interest income increased to $8.6 million from $7.6 million a year earlier.
• Minor pointAverage funding costs fell to 2.14% from 2.29% quarterly and 2.11% from 2.20% for nine months.

10 minor points

• Minor pointAverage earning-asset yields improved to 5.34% from 5.20% quarterly and 5.26% from 5.15% for nine months.
• Minor pointThird-quarter other income increased to $0.4 million from $0.3 million a year earlier.
• Minor pointNine-month other income rose to $1.5 million from $0.9 million, primarily reflecting insurance-related gains and mortgage-servicing valuation adjustments.
• Minor pointNon-residential real estate loans increased $8.3 million during the first nine months of 2026.
• Minor pointMulti-family loans increased $3.2 million during the first nine months of 2026.
• Minor pointCommercial loans increased $0.6 million during the first nine months of 2026.
• Minor pointNon-performing loans fell to $1.0 million, or 0.33% of gross loans, from $1.2 million, or 0.38%, at year-end.
• Minor pointThird-quarter credit-loss recovery increased to approximately $51 thousand from approximately $22 thousand a year earlier.
• Minor pointStockholders’ equity increased to $39.3 million from $39.0 million at December 31, 2025.
• Minor pointLong-term debt declined to $1,126,233 from $1,238,661 at December 31, 2025.

Negative

• Moderate pointThird-quarter results reversed to a $0.1 million loss from $0.4 million profit a year earlier.
• Moderate pointThird-quarter other expenses rose to $3.4 million from $2.3 million, almost entirely reflecting merger-related cost increases.
• Moderate pointCash and cash equivalents fell to $17.2 million from $24.3 million at December 31, 2025.
• Minor pointNine-month other expenses rose to $8.1 million from $6.7 million, primarily reflecting merger-related cost increases.
• Minor pointNine-month loan expenses included a one-time corrective adjustment to the Freddie Mac settlement account.

8 minor points

• Minor pointTotal assets declined 0.7% to $360.1 million from $362.6 million at December 31, 2025.
• Minor pointDeposits declined 0.2% to $297.6 million from $298.1 million at December 31, 2025.
• Minor pointOne-to-four family loans decreased $3.9 million during the first nine months of 2026.
• Minor pointConsumer loans decreased $0.6 million during the first nine months of 2026.
• Minor pointNine-month net charge-offs rose to approximately $44 thousand from approximately $38 thousand a year earlier.
• Minor pointNine-month credit-loss recovery decreased to $148 thousand from $165 thousand a year earlier.
• Minor pointNine-month income tax expense increased to approximately $653 thousand from $594 thousand a year earlier.
• Minor pointAccumulated other comprehensive loss increased $0.5 million as available-for-sale securities declined in fair value.

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OTTAWA, Ill., Nov. 10, 2026 (GLOBE NEWSWIRE) -- Ottawa Bancorp, Inc. (the “Company”) (OTCQX: OTTW), the holding company for OSB Community Bank (the “Bank”), announced a net loss of $(0.1) million, or $(0.04) per basic and diluted common share, for the three months ended September 30, 2026, compared to net income of $0.4 million, or $0.18 per basic and diluted common share, for the three months ended September 30, 2025. For the nine months ended September 30, 2026, the Company announced net income of $1.5 million, or $0.62 per basic and diluted common share, compared to net income of $1.4 million, or $0.57 per basic and diluted common share for the nine months ended September 30, 2025. The loan portfolio, net of allowance, increased to $313.5 million as of September 30, 2026 from $305.8 million as of December 31, 2025 as originations and fundings exceeded payments and payoffs during the nine month period. Non-performing loans decreased to $1.0 million at September 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 0.33% at September 30, 2026.

“Our core banking operations continued to perform well in the third quarter,” said Craig Hepner, President and Chief Executive Officer. “Our net interest income increased 13.6% over the third quarter of last year, and our net interest margin expanded by 30 basis points to 3.39%, as the yield on our interest-earning assets continued to improve and our cost of funds continued to decline.”

“The net loss for the quarter reflects a $1.1 million increase in other expenses, driven primarily by higher legal, professional services and data processing costs. These increases were attributable almost entirely to expenses associated with our previously announced merger with Pontiac Bancorp, Inc.”

“Our balance sheet remains sound,” Mr. Hepner continued. “Net loans grew 2.5% since year-end to $313.5 million, non-performing loans declined to 0.33% of gross loans, and the Bank’s capital ratios remain strong. As always, we appreciate the ongoing support of our shareholders, customers and team members.”

Comparison of Results of Operations for the Three Months Ended September 30, 2026 and September 30, 2025

Net loss for the three months ended September 30, 2026 was ($0.1) million compared to net income of $0.4 million for the three months ended September 30, 2025. Total interest and dividend income was $4.6 million for the three months ended September 30, 2026 compared to $4.4 million for the three months ended September 30, 2025. This increase was due to a $12.2 million dollar increase in interest-earning assets and an increase in the average yield on interest-earning assets which improved by 0.14% to 5.34%. Interest expense was $1.7 million for the three months ended September 30, 2026 as compared to $1.8 million for the three months ended September 30, 2025. Our average cost of funds decreased to 2.14% for the three months ended September 30, 2026 from 2.29% for the three months ended September 30, 2025. Net interest income after recovery of credit losses increased by $0.4 million to $3.0 million for the three months ended September 30, 2026 as compared to $2.6 million for the three months ended September 30, 2025. Total other income was $0.4 million for the three months ended September 30, 2026 compared to $0.3 million for the three months ended September 30, 2025. The net origination (amortization) of mortgage servicing rights increased by approximately $45,000 based on an independent third-party valuation conducted during the quarter, and loan origination and servicing income increased by approximately $63,000. Total other expenses were $3.4 million for the three months ended September 30, 2026 compared to $2.3 million for the three months ended September 30, 2025. Higher legal and professional services and data processing expenses accounted for the majority of this increase. These higher costs were attributable almost entirely to expenses associated with the previously announced plan of merger with Pontiac Bancorp, Inc.

The Company recorded a recovery of approximately $51 thousand for the three months ended September 30, 2026 compared to a recovery of approximately $22 thousand for the three months ended September 30, 2025 which decreased the Allowance for Credit Losses (ACL) position. The ACL on loans was $4.0 million, or 1.26% of total gross loans, at September 30, 2026 compared to $4.2 million, or 1.35% of gross loans, at December 31, 2025. Net recoveries during the third quarter of 2026 were approximately $5 thousand compared to net recoveries of $6 thousand during the third 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 September 30, 2026 decreased by approximately $60 thousand compared to the required reserves as of September 30, 2025.

The Company recorded income tax expense of $0.1 million for the three-month period ended September 30, 2026 as compared to income tax expense of $0.2 million for the three months ended September 30, 2025 due to lower pretax income during the period.

Comparison of Results of Operations for the Nine Months Ended September 30, 2026 and September 30, 2025

Net income was $1.5 million for the nine months ended September 30, 2026 compared to $1.4 million for the nine months ended September 30, 2025. Total interest and dividend income was $13.6 million for the nine months ended September 30, 2026 compared to $12.8 million for the nine months ended September 30, 2025 as interest-earning assets grew by $10.1 million and the average yield on interest-earning assets improved to 5.26% from 5.15%. Interest expense was $5.0 million for the nine months ended which is lower than the $5.1 million for the nine months ended September 30, 2025. Our average cost of funds continued to decline, falling from 2.20% to 2.11%. Due to the increase in yield on interest-earning assets and the decline in cost of funds, our net interest income for the nine months ended September 30, 2026 increased to $8.6 million as compared to $7.6 million for the nine months ended September 30, 2025. Total other income was $1.5 million during the nine months ended September 30, 2026 compared to $0.9 million for the nine months ended September 30, 2025. The increase is due primarily to the BOLI-related gain recorded in the previous quarter and the adjustment to the value of our mortgage servicing rights in previous quarters. Other expense levels were $1.4 million higher, increasing to $8.1 million for the nine months ended September 30, 2026 as compared to $6.7 million for the nine months ended September 30, 2025. Higher legal and professional services and data processing expenses accounted for the majority of this increase. These higher costs were attributable primarily to expenses associated with the previously announced plan of merger with Pontiac Bancorp, Inc. 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 $148 thousand for the nine-month period ended September 30, 2026 to decrease the ACL position. This compares to a recovery of $165 thousand for the nine-month period ended September 30, 2025. Net charge-offs during the nine months ended September 30, 2026 were approximately $44 thousand compared to net charge-offs of approximately $38 thousand during the nine months ended September 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 $653 thousand for the nine months ended September 30, 2026 compared to an income tax expense of $594 thousand for the nine months ended September 30, 2025. This increase is due primarily to higher pre-tax earnings in 2026 as compared to 2025.

Comparison of Financial Condition at September 30, 2026 and December 31, 2025

Total consolidated assets as of September 30, 2026 were $360.1 million, a decrease of $2.5 million, or 0.7%, from $362.6 million at December 31, 2025. The decrease was due primarily to a decrease of $7.2 million in cash and cash equivalents, a $0.2 million decrease in accrued interest receivable, a $0.2 million decrease in premises and equipment, net, a decrease of $2.0 million in securities available for sale, a decrease of $0.5 million in cash surrender value of life insurance, a decrease of $0.4 million in deferred tax assets, and a decrease of $0.1 million in other assets. These decreases were partially offset by an increase of $0.2 million in the value of our mortgage servicing rights and an increase of $7.8 million in loans, net of allowance.

Cash and cash equivalents decreased $7.2 million, or 29.4%, to $17.2 million at September 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 $1.4 million and cash used in investing activities of $6.5 million exceeding cash provided by operating activities of $0.7 million.

Securities available for sale decreased $2.0 million, or 12.4%, to $14.0 million at September 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 increased $7.8 million, or 2.5%, to $313.5 million at September 30, 2026 compared to $305.8 million at December 31, 2025 primarily due to an increase of $8.3 million in non-residential real estate loans, an increase of $0.6 million in commercial loans and an increase of $3.2 million in multi-family loans. These increases were partially offset by a decrease of $3.9 million in one-to-four family loans and a decrease of $0.6 million in consumer loans. The ACL on loans decreased by $0.2 million at September 30, 2026 as compared to December 31, 2025.

Total deposits decreased $0.5 million, or 0.2%, to $297.6 million at September 30, 2026 from $298.1 million at December 31, 2025. During the nine months ended September 30, 2026 certificate of deposit accounts decreased by $15.4 million. Offsetting these decreases were increases in savings accounts of $0.4 million, non-interest bearing DDA accounts of $2.3 million, interest bearing DDA’s of $11.2 million and money market accounts of $1.0 million.

FHLB advances totaled $15.9 million at both September 30, 2026 and December 31, 2025.

Stockholders’ equity increased to $39.3 million at September 30, 2026 as compared to $39.0 million at December 31, 2025. The increase reflects net income of $1.5 million for the nine months ended September 30, 2026 and other items totaling $0.1 million. This increase was partially offset by a $0.5 million increase in accumulated other comprehensive loss due to a decrease in fair value of securities available for sale during the period and cash dividends of $0.75 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
September 30, 2026 and December 31, 2025
(Unaudited)
	September 30,				December 31,
		2026				2025
Assets
Cash and due from banks	$	6,998,906			$	14,340,734
Interest bearing deposits		4,462,000				6,719,709
Federal funds sold		5,704,551				3,259,000
Total cash and cash equivalents		17,165,457				24,319,443
Securities available for sale, at fair value		14,017,845				16,002,114
Loans, net of allowance for credit losses of $4,006,929 and $4,190,140
at September 30, 2026 and December 31, 2025, respectively		313,528,255				305,758,202
Mortgage servicing rights		1,302,273				1,075,957
Premises and equipment, net		5,721,406				5,887,528
Accrued interest receivable		1,221,594				1,413,551
Deferred tax assets, net		1,721,183				2,133,620
Federal Home Loan Bank stock		1,380,798				1,380,798
Cash value of life insurance		48,104				528,464
Goodwill		649,869				649,869
Other assets		3,369,038				3,442,607
Total assets	$	360,125,822			$	362,592,153
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest bearing	$	25,391,310			$	23,086,883
Interest bearing		272,208,990				275,026,699
Total deposits		297,600,300				298,113,582
Accrued interest payable		488,240				545,766
FHLB advances		15,860,000				15,860,000
Long term debt		1,126,233				1,238,661
Allowance for credit losses on off-balance sheet credit exposures		75,642				83,629
Other liabilities		3,028,257				5,047,185
Total liabilities		318,178,672				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 September 30, 2026 and December 31, 2025, respectively		23,012				22,928
Additional paid-in-capital		21,180,253				21,060,890
Retained earnings		22,863,583				22,166,573
Unallocated ESOP shares		(162,974	)			(162,974	)
Unallocated management recognition plan shares		(122,863	)			(46,375	)
Accumulated other comprehensive loss		(1,833,861	)			(1,337,712	)
		41,947,150				41,703,330
Less:
ESOP Owned Shares		(2,672,922	)			(2,672,922	)
Total stockholders' equity		39,274,228				39,030,408
Total liabilities and stockholders' equity	$	360,125,822			$	362,592,153

Ottawa Bancorp, Inc. & Subsidiary
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2026 and 2025
(Unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
			2026				2025				2026				2025
Interest and dividend income:
Interest and fees on loans		$	4,327,838			$	4,030,799			$	12,638,085			$	11,747,702
Securities:
Residential mortgage-backed and related securities			85,643				98,746				266,405				303,333
State and municipal securities			17,957				24,901				52,403				68,881
Dividends on non-marketable equity securities			68,011				35,000				174,819				92,000
Interest-bearing deposits			147,003				180,567				460,016				539,717
Total interest and dividend income			4,646,452				4,370,013				13,591,728				12,751,633
Interest expense:
Deposits			1,564,575				1,612,262				4,592,650				4,595,718
Borrowings			152,619				179,886				448,922				526,514
Total interest expense			1,717,194				1,792,148				5,041,572				5,122,232
Net interest income			2,929,258				2,577,865				8,550,156				7,629,401
Recovery of credit losses - loans			(45,795	)			(29,485	)			(139,707	)			(168,562	)
Provision for (recovery of) credit losses – off-balance sheet credit exposures			(5,087	)			7,000				(7,987	)			4,430
Net interest income after net recovery of credit losses			2,980,140				2,600,350				8,697,850				7,793,533
Other income:
Gain on sale of loans			33,570				56,142				109,775				135,571
Loan origination and servicing income			215,420				152,829				491,935				437,922
Net origination (amortization) of mortgage servicing rights			3,821				(40,602	)			221,316				(61,243	)
Customer service fees			135,643				131,111				395,818				367,413
Death benefit in excess of cash surrender value			-				-				275,238				-
Other			6,486				1,365				23,854				3,434
Total other income			394,940				300,845				1,517,936				883,097
Other expenses:
Salaries and employee benefits			1,347,557				1,308,504				4,092,622				3,809,357
Directors’ fees			25,500				45,000				102,000				135,000
Occupancy			142,129				156,227				434,316				479,002
Deposit insurance premium			39,500				39,500				122,482				117,500
Legal and professional services			774,235				97,724				1,028,268				279,300
Data processing			724,288				292,564				1,335,231				896,176
Advertising			12,843				34,505				51,307				88,051
Loan expense			77,198				78,054				401,447				211,862
Other			208,366				200,391				545,061				699,724
Total other expenses			3,351,616				2,252,469				8,112,734				6,715,972
Income before income tax			23,464				648,726				2,103,052				1,960,658
Income tax expense			118,401				203,655				652,901				593,594
Net income (loss)		$	(94,937	)		$	445,071			$	1,450,151			$	1,367,064
Basic earnings (losses) per share		$	(0.04	)		$	0.18			$	0.62			$	0.57
Diluted earnings (losses) per share		$	(0.04	)		$	0.18			$	0.62			$	0.57
Dividends per share		$	0.11			$	0.10			$	0.32			$	0.32

Ottawa Bancorp, Inc. & Subsidiary Selected Financial Data and Ratios (Unaudited)
		At or for the						At or for the
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2026			2025			2026			2025
Performance Ratios:
Return on average assets (5)		(0.11	)%		0.51	%		0.81	%		0.52	%
Return on average stockholders' equity (5)		(0.94	)		4.51			7.31			4.59
Average stockholders' equity to average assets		11.36			11.24			11.08			11.24
Stockholders' equity to total assets at end of period		10.91			11.07			10.91			11.07
Net interest rate spread (1) (5)		3.21			2.92			3.15			2.96
Net interest margin (2) (5)		3.39			3.09			3.33			3.13
Other expense to average assets		0.94			0.64			2.27			1.91
Efficiency ratio (3)		100.84			78.22			80.58			78.89
Dividend payout ratio		(275.0	)		55.87			56.68			55.34

	At or for the				At or for the
	Nine Months Ended				Twelve Months Ended
	September 30,				December 31,
	2026				2025
Regulatory Capital Ratios (4):
Total risk-based capital (to risk-weighted assets)		17.06	%			16.78	%
Tier 1 core capital (to risk-weighted assets)		15.80				15.52
Common equity Tier 1 (to risk-weighted assets)		15.80				15.52
Tier 1 leverage (to adjusted total assets)		11.68				11.49
Asset Quality Ratios:
Net charge-offs to average gross loans outstanding		0.01				0.01
Allowance for credit losses on loans to gross loans outstanding		1.26				1.35
Non-performing loans to gross loans (6)		0.33				0.38
Non-performing assets to total assets (6)		0.29				0.33
Other Data:
Book Value per common share	$	17.07			$	17.27
Tangible Book Value per common share (7)	$	16.78			$	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

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Ottawa Bancorp’s third-quarter 2026 earnings?

Ottawa Bancorp reported a $0.1 million net loss, or $0.04 per basic and diluted common share, for the three months ended September 30, 2026. A year earlier, it earned $0.4 million, or $0.18 per basic and diluted common share.

How did Ottawa Bancorp’s earnings change for the first nine months of 2026?

Net income increased to $1.5 million, or $0.62 per basic and diluted common share, for the nine months ended September 30, 2026. That compared with $1.4 million, or $0.57 per basic and diluted common share, for the same period in 2025.