[Financial and Operating Performance](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Q1 2025 Financial Highlights](index=45&type=section&id=2025%20First%20Quarter%20Highlights) Origin Bancorp's Q1 2025 highlights include $22.4 million net income, improved net interest income, and strategic debenture redemption Key Financial Highlights | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $22.4 million | $22.6 million | | Diluted EPS | $0.71 | $0.73 | | Net Interest Income | $78.5 million | $73.3 million | | Net Interest Margin (FTE) | 3.44% | 3.19% | | Total Loans (LHFI) | $7.59 billion | - | | Total Deposits | $8.34 billion | - | | Book Value per Common Share | $37.77 | - | - Total subordinated debentures decreased by **$70.3 million** (**44.0%**) to **$89.6 million** at March 31, 2025, from **$159.9 million** at December 31, 2024, following the redemption of eligible debentures[201](index=201&type=chunk)[228](index=228&type=chunk) - The company announced a strategic initiative, "Optimize Origin," aimed at improving financial performance with a target of achieving a **>1% ROAA** run rate by Q4 2025, expected to drive approximately **$23.4 million** in annual pre-tax, pre-provision earnings improvement[195](index=195&type=chunk) [Results of Operations Analysis](index=45&type=section&id=Results%20of%20Operations) Q1 2025 results show increased net interest income driven by lower funding costs, alongside declines in noninterest income and rises in noninterest expense [Net Interest Income and Margin](index=45&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income increased to $78.5 million in Q1 2025, with the NIM-FTE expanding to 3.44% due to lower funding costs Net Interest Income and Margin Trends | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $78.5M | $73.3M | +$5.1M | | Net Interest Margin (FTE) | 3.44% | 3.19% | +25 bps | | Yield on Earning Assets | 5.79% | 5.99% | -20 bps | | Cost of Interest-Bearing Liabilities | 3.30% | 3.88% | -58 bps | - The decrease in interest income on loans held for investment (LHFI) was **$10.1 million**, primarily due to lower average balances and yields on commercial loans, partially offset by a **$2.8 million** increase in income from interest-earning bank deposits[200](index=200&type=chunk) - The decrease in interest expense was primarily driven by an **$11.1 million** reduction in interest on deposits, with **$8.9 million** of that attributable to lower interest rates[199](index=199&type=chunk) [Provision for Credit Losses](index=48&type=section&id=Provision%20for%20Credit%20Losses) Total provision for credit losses increased to $3.4 million in Q1 2025, driven by off-balance sheet items despite lower loan loss provisions - Total provision expense increased by **$432,000** YoY, primarily due to an **$805,000** increase in provision for off-balance sheet items, partially offset by a **$410,000** decrease in provision for loan credit losses[212](index=212&type=chunk) - The allowance for loan credit losses (ALCL) to nonperforming loans held for investment (LHFI) was **113.08%** at March 31, 2025, a significant decrease from **243.27%** a year prior, mainly due to a **$40.9 million** increase in nonperforming LHFI, of which **$28.7 million** is related to the previously disclosed questioned loan activity[213](index=213&type=chunk) [Noninterest Income](index=49&type=section&id=Noninterest%20Income) Noninterest income decreased by $1.7 million (9.6%) to $15.6 million in Q1 2025, primarily due to losses from limited partnership investments and lower mortgage banking revenue Noninterest Income Components | Noninterest Income Component | Q1 2025 ($ thousands) | Q1 2024 ($ thousands) | $ Change | | :--- | :--- | :--- | :--- | | Insurance commission and fee income | 7,927 | 7,725 | 202 | | Mortgage banking revenue | 915 | 2,398 | (1,483) | | Limited partnership investment (loss) income | (1,692) | 138 | (1,830) | | Swap fee income | 533 | 57 | 476 | | **Total Noninterest Income** | **15,602** | **17,255** | **(1,653)** | - The decrease in mortgage banking revenue was mainly due to the **sale of substantially all of the company's MSR asset** in Q1 2024, which eliminated servicing revenue and MSR valuation adjustments in Q1 2025[217](index=217&type=chunk) [Noninterest Expense](index=50&type=section&id=Noninterest%20Expense) Noninterest expense increased by $3.4 million (5.7%) to $62.1 million in Q1 2025, driven by higher salaries and occupancy costs from strategic initiatives Noninterest Expense Components | Noninterest Expense Component | Q1 2025 ($ thousands) | Q1 2024 ($ thousands) | $ Change | | :--- | :--- | :--- | :--- | | Salaries and employee benefits | 37,731 | 35,818 | 1,913 | | Occupancy and equipment, net | 8,544 | 6,645 | 1,899 | | Intangible asset amortization | 1,761 | 2,137 | (376) | | **Total Noninterest Expense** | **62,068** | **58,707** | **3,361** | - The increase in occupancy and equipment expense was primarily due to a **$1.5 million** expense associated with the strategic consolidation of **eight banking centers**, **six of which closed** during the quarter[221](index=221&type=chunk) [Financial Condition Analysis](index=51&type=section&id=Comparison%20of%20Financial%20Condition%20at%20March%2031,%202025,%20and%20December%2031,%202024) As of March 31, 2025, total assets grew to $9.75 billion, driven by securities and deposits, while the loan portfolio remained stable despite increased nonperforming loans [Loan Portfolio](index=51&type=section&id=Loan%20Portfolio) Total loans held for investment remained stable at $7.59 billion, with growth in residential real estate offset by declines in commercial real estate and construction loans Loan Portfolio Composition | Loan Category | Balance at Mar 31, 2025 ($M) | % of Total | Balance at Dec 31, 2024 ($M) | % Change | | :--- | :--- | :--- | :--- | :--- | | Commercial Real Estate | 2,383.8 | 31.4% | 2,477.4 | (3.8)% | | Construction/Land/Dev | 798.6 | 10.5% | 864.0 | (7.6)% | | Residential Real Estate | 1,955.0 | 25.8% | 1,857.6 | 5.2% | | Commercial & Industrial | 2,022.1 | 26.7% | 2,002.6 | 1.0% | | Mortgage Warehouse | 404.1 | 5.3% | 349.1 | 15.8% | | **Total LHFI** | **7,585.5** | **100.0%** | **7,573.7** | **0.2%** | - At March 31, 2025, **59.6%** of the loan portfolio (**$4.52 billion**) had variable interest rates, while **40.4%** (**$3.06 billion**) had fixed rates[237](index=237&type=chunk) [Asset Quality and Allowance for Credit Losses](index=53&type=section&id=Nonperforming%20Assets) Nonperforming assets increased to $83.4 million in Q1 2025, with NPLs rising to $81.4 million, while ALCL coverage of NPLs stood at 113.08% Asset Quality Metrics | Asset Quality Metric | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Nonperforming Assets | $83.4 million | $78.6 million | | Total Nonperforming LHFI | $81.4 million | $75.0 million | | Ratio of NPLs to Total LHFI | 1.07% | 0.99% | | ALCL | $92.0 million | $91.1 million | | ALCL / Total LHFI | 1.21% | 1.20% | | ALCL / NPLs | 113.08% | 121.41% | - Classified and nonperforming loans were **negatively impacted by litigation** related to **questioned activity involving a former banker**, with the company continuing to work toward a resolution[243](index=243&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) [Securities Portfolio](index=57&type=section&id=Securities) The securities portfolio grew by 5.3% to $1.18 billion, primarily in AFS securities, with a shortened weighted average effective duration - The increase in the securities portfolio was driven by **new purchases** and an **improvement in the unrealized loss position**, partially offset by principal paydowns and maturities[261](index=261&type=chunk) - The company **does not hold any Fannie Mae or Freddie Mac preferred stock, CDOs, CLOs, or securities directly backed by subprime or Alt-A mortgages**[263](index=263&type=chunk) [Deposits](index=58&type=section&id=Deposits) Total deposits increased by $115.3 million (1.4%) to $8.34 billion, driven by money market growth and a decrease in the average rate paid on deposits Deposit Composition | Deposit Category | Balance at Mar 31, 2025 ($M) | % of Total | Balance at Dec 31, 2024 ($M) | % Change | | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing demand | 1,888.8 | 22.7% | 1,900.7 | (0.6)% | | Money market | 3,209.6 | 38.5% | 2,930.7 | 9.5% | | Interest-bearing demand | 1,993.4 | 23.9% | 2,060.5 | (3.3)% | | Time deposits | 863.0 | 10.3% | 941.0 | (8.3)% | | **Total Deposits** | **8,338.4** | **100.0%** | **8,223.1** | **1.4%** | - Estimated uninsured deposits totaled **$3.72 billion** at March 31, 2025, which includes **$822.0 million** in public fund deposits collateralized by pledged assets[274](index=274&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity and capital, with stockholders' equity at $1.18 billion and all regulatory capital ratios well above 'well capitalized' thresholds Regulatory Capital Ratios | Regulatory Capital Ratios (Company) | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Common Equity Tier 1 (CET1) Ratio | 13.57% | 13.32% | | Tier 1 Capital Ratio | 13.77% | 13.52% | | Total Capital Ratio | 15.81% | 16.44% | | Tier 1 Leverage Ratio | 11.47% | 11.08% | - The company redeemed **$70.0 million** in subordinated debentures, recognizing **$681,000** of accelerated amortization of the original issue discount, expected to result in approximately **$2.1 million** in annualized future net interest expense savings[275](index=275&type=chunk) - Available liquidity at March 31, 2025 included **$2.15 billion** from the FHLB and **$1.39 billion** from the FRBD discount window, with no borrowings outstanding against these lines[276](index=276&type=chunk)[286](index=286&type=chunk) [Risk Management and Controls](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) [Market Risk Disclosures](index=63&type=section&id=Interest%20Rate%20Sensitivity%20and%20Market%20Risk) The company's primary market risk is interest rate volatility, with NII and fair value of equity sensitivity within policy limits under various rate shock scenarios Interest Rate Sensitivity Analysis | Change in Interest Rates (bps) | % Change in Net Interest Income | % Change in Fair Value of Equity | | :--- | :--- | :--- | | +400 | 15.9% | (6.6)% | | +200 | 8.3% | (2.6)% | | +100 | 4.3% | (1.1)% | | -100 | (5.1)% | 0.8% | | -200 | (8.2)% | 1.5% | - The company's internal policy limits the decline in estimated NII for a 100-basis point shift to no more than **10.0%**, with the current simulation showing a **5.1%** decline in a **-100 bps** scenario, which is well within this limit[300](index=300&type=chunk)[303](index=303&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of the end of the reporting period[307](index=307&type=chunk) - **No material changes** to internal control over financial reporting were identified during the first quarter of 2025[308](index=308&type=chunk) [Other Information](index=66&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings and Risk Factors](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company maintains a $2.8 million contingency reserve for legal proceedings related to a former banker, with no material changes to previously disclosed risk factors - A contingency reserve of **$2.8 million** was held at March 31, 2025, related to questioned activity by a former banker in the East Texas market, with total expenses associated with this matter being **$543,000** for Q1 2025[186](index=186&type=chunk) - There were **no material changes** to the risk factors disclosed in the company's 2024 Form 10-K during the quarter[312](index=312&type=chunk) [Equity Repurchases and Other Disclosures](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company has a $50 million stock repurchase program authorized, but no shares were repurchased during Q1 2025, and no Rule 10b5-1 trading arrangements were modified - The company has a **$50 million** stock repurchase program authorized in July 2022[313](index=313&type=chunk) - **No stock repurchases** were made during the quarter ended March 31, 2025[314](index=314&type=chunk)

Financial Performance Highlights - Origin Bancorp's annualized Return on Average Assets (ROAA) was 093% for 1Q25, an increase of 036% compared to 4Q24[35] - Pre-Tax, Pre-Provision (PTPP) annualized ROAA was 132% for 1Q25, up 082% from the previous quarter[35] - Net Interest Income (NII) reached $785 million in 1Q25, the highest level in eight quarters, reflecting a 01% increase compared to 4Q24[38] - Total deposits amounted to $834 billion in 1Q25, representing a $1153 million or 14% increase from 4Q24[38] Strategic Initiatives and Outlook - The company aims for a 1%+ ROAA run rate by 4Q25[17] - Production optimization is expected to yield ~$115 million in annualized pre-tax benefits[20] - Securities optimization is projected to generate ~$69 million in annualized pre-tax benefits[20] - Total estimated annualized benefit from optimization initiatives is ~$234 million[20] Loan Portfolio and Credit Quality - Total Loans Held for Investment (LHFI) were $7586 billion as of March 31, 2025[35,40] - Texas franchise represents 71% of LHFI and 55% of deposits as of March 31, 2025[49] - Nonperforming LHFI to LHFI ratio was 107%[61]

Financial Data and Key Metrics Changes - In Q1 2025, diluted earnings per share were reported at $0.71, with net interest margin expanding by 11 basis points to 3.44% [23][27] - Annualized return on assets (ROA) was 93 basis points, with a target of reaching a run rate of 1% or greater by Q4 2025 [9][7] - Deposits increased by 1.4% during the quarter, with core deposits growing 7.2% on an annualized basis [24][14] Business Line Data and Key Metrics Changes - The mortgage business is undergoing restructuring, expected to improve annual pre-tax earnings by approximately $1.5 million starting in the second half of the year [8] - Non-interest income increased to $15.6 million in Q1, driven by seasonal improvements in the insurance business [29] - Non-interest expense decreased to $62.1 million in Q1 from $65.4 million in Q4, benefiting from Optimize Origin efforts [30] Market Data and Key Metrics Changes - The company anticipates mid to high-single-digit loan growth in 2025, supported by deposit growth [13] - Past due loans held for investment increased to 0.96%, while classified loans rose to 1.68% of total loans [18][19] - Non-interest-bearing deposits were stable at about 23% of total deposits, with year-over-year growth noted for the first time since Q4 2022 [25] Company Strategy and Development Direction - The company is focused on the "Optimize Origin" initiative to achieve elite-level financial performance and improve operational efficiency [7][10] - A partnership model in the mortgage business is expected to enhance efficiency and profitability [8] - The company is committed to deepening customer relationships to drive long-term shareholder value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite macroeconomic uncertainties, citing strong customer relationships and market positioning [34][48] - The company is prepared to navigate potential market challenges and capitalize on opportunities, drawing on past experiences during economic downturns [34][108] - Management remains focused on maintaining a disciplined approach to loan growth and deposit management [27][59] Other Important Information - The tangible book value grew to $32.43, marking the tenth consecutive quarter of linked quarter growth [33] - The company has plans for share repurchase activity and capital deployment opportunities [88] Q&A Session Summary Question: Loan growth outlook amidst macro uncertainty - Management remains optimistic about loan growth, citing energized bankers and building pipelines despite some project delays due to macroeconomic factors [41][42][44] Question: Impact of mortgage restructuring on bottom line - The company anticipates a portion of savings from the Optimize Origin initiative will flow to the bottom line while still investing in growth opportunities [51][52] Question: Competition in deposit pricing and loan yields - Loan yields remain stable in the 7.3% to 7.5% range, with management pleased about the competitive landscape [93] Question: Update on hiring efforts and regional performance - The company is actively hiring productive commercial bankers and is optimistic about growth in the Southeast region [74] Question: Potential for share buybacks - Management views current share prices as attractive and plans to engage in share repurchase activity [88]

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $0.71 for Q1, with a net expense impact of $2,300,000 equivalent to $0.06 in EPS pressure [16][18] - Net interest margin expanded by 11 basis points to 3.44%, exceeding expectations due to better loan yields and deposit costs [18][19] - Annualized return on assets (ROA) was 93 basis points, with a target of reaching a run rate of 1% or greater by Q4 [6][7] Business Line Data and Key Metrics Changes - The mortgage business is undergoing restructuring, expected to improve annual pretax earnings by approximately $1,500,000 starting in the second half of the year [6][10] - Non-interest income for Q1 was reported at $15,600,000, an increase from $14,100,000 in Q4, primarily due to seasonal factors in the insurance business [18][19] - Non-interest expense decreased to $62,100,000 in Q1 from $65,400,000 in Q4, with further reductions anticipated due to the Optimize Origin initiative [18][19] Market Data and Key Metrics Changes - Deposits, excluding brokered deposits, grew by 7.2% on an annualized basis, setting the stage for anticipated loan growth [10][17] - Non-interest bearing deposits remained stable at about 23% of total deposits, with expectations to maintain this range through 2025 [17] - The loan-to-deposit ratio, excluding mortgage warehouse, was reported at 86.1%, below the 90% target [17] Company Strategy and Development Direction - The company is focused on the "Optimize Origin" initiative to achieve elite financial performance and improve operational efficiency [5][8] - A strategic goal is to maintain mid to high single-digit loan growth in 2025, supported by core deposit growth [10][18] - The company is exploring opportunities for share buybacks and capital deployment to enhance shareholder value [59][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite macroeconomic uncertainties, citing strong customer relationships and market positioning [21][75] - The company is adjusting loan growth expectations to the lower end of the previous guidance due to macroeconomic factors but remains confident in achieving growth [22][29] - Management highlighted the importance of maintaining a strong credit culture and proactive client selection to optimize the portfolio [11][30] Other Important Information - The company has successfully exited approximately $200,000,000 in client relationships that did not fit its selection criteria [12][30] - The tangible book value grew sequentially to $32.43, marking the tenth consecutive quarter of growth [20] - Regulatory capital levels remain above well-capitalized standards, providing flexibility for future growth initiatives [20] Q&A Session Summary Question: Loan growth outlook amidst macro uncertainty - Management acknowledged optimism in loan growth despite adjusting expectations to the lower end of the previous guidance, citing strong pipelines and customer engagement [22][24][29] Question: Impact of Optimize Origin initiative on bottom line - Management indicated that a portion of the savings from the Optimize Origin initiative would flow to the bottom line while also investing in growth opportunities [31][32] Question: Deposit pricing competition and loan yields - Management reported stable loan yields in the 7.3% to 7.5% range, with proactive communication with customers regarding deposit pricing [64][66] Question: Update on hiring efforts and team performance - Management confirmed ongoing strategic hiring efforts, particularly in North Texas and the Southeast, with positive performance reported from the Houston team [45][48] Question: Mortgage segment restructuring and revenue outlook - Management noted that restructuring the mortgage segment would lower expenses but also impact revenue, with expectations for some offsetting tailwinds [49][50]

Financial Performance - For the quarter ended March 2025, Origin Bancorp reported revenue of $94.06 million, an increase of 3.8% year-over-year [1] - EPS for the quarter was $0.71, down from $0.73 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $92.75 million, resulting in a surprise of +1.41% [1] - The company delivered an EPS surprise of +4.41%, with the consensus EPS estimate being $0.68 [1] Key Metrics - Efficiency Ratio was reported at 66%, slightly above the two-analyst average estimate of 65.9% [4] - Net Interest Margin (NIM) - FTE was 3.4%, matching the two-analyst average estimate [4] - Average Balance of Total interest-earning assets was $9.28 billion, consistent with the average estimate based on two analysts [4] - Total nonperforming loans amounted to $81.37 million, slightly higher than the estimated $80.77 million [4] - Total nonperforming assets were reported at $83.36 million, lower than the average estimate of $85.15 million [4] - Net charge-offs to total average LHFI (annualized) was 0.2%, in line with the estimated 0.2% [4] - Total Noninterest Income was $15.60 million, below the average estimate of $16.18 million [4] - Net Interest Income was reported at $78.46 million, exceeding the estimated $76.56 million [4] Stock Performance - Shares of Origin Bancorp have returned -13.1% over the past month, compared to the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Origin Bancorp, Inc. reported strong financial results for the first quarter of 2025, with significant increases in net income and pre-tax, pre-provision earnings, reflecting the effectiveness of its strategic initiatives aimed at enhancing financial performance and operational efficiency [1][2][5]. Financial Highlights - Net income for the quarter ended March 31, 2025, was $22.4 million, or $0.71 diluted EPS, up from $14.3 million, or $0.46 diluted EPS, in the previous quarter, marking a 57.0% increase [1][4]. - Pre-tax, pre-provision earnings were $32.0 million for the quarter, compared to $12.6 million for the linked quarter [1][4]. - Net interest income reached $78.5 million, a slight increase of $110,000, or 0.1%, from the previous quarter, the highest level in eight quarters [4][7]. - The fully tax equivalent net interest margin (NIM-FTE) expanded by 11 basis points to 3.44% for the quarter [4][13]. - Return on average assets (ROAA) was 0.93%, a 63.2% increase from 0.57% in the linked quarter [4][47]. Optimize Origin Initiative - The "Optimize Origin" initiative aims to drive elite financial performance through three pillars: Productivity, Delivery & Efficiency; Balance Sheet Optimization; and Culture & Employee Engagement [2][5]. - The initiative targets a return on average assets (ROAA) run rate of greater than 1% by Q4 2025, with expected annual earnings improvement of approximately $23.4 million on a pre-tax, pre-provision basis [5][39]. Loan and Deposit Performance - Total loans held for investment (LHFI) were $7.59 billion, reflecting a slight increase of $11.8 million, or 0.2%, from the previous quarter [4][31]. - Total deposits increased to $8.34 billion, up $115.3 million, or 1.4%, compared to the linked quarter [6][39]. - Noninterest-bearing deposits as a percentage of total deposits were 22.7%, a slight decrease from 23.1% in the previous quarter [39]. Credit Quality - Past due loans increased by $30.3 million compared to the linked quarter, primarily due to residential and commercial real estate loans [17]. - Nonperforming loans rose to 1.07% of LHFI, up from 0.99% in the previous quarter, driven by increases in residential real estate loans [18]. - The allowance for loan credit losses (ALCL) was $92.0 million, with a provision for credit losses of $3.4 million during the quarter [20][14]. Noninterest Income and Expense - Noninterest income for the quarter was $15.6 million, a significant increase from the linked quarter, primarily due to the absence of losses on sales of securities [23][24]. - Noninterest expense decreased by $3.4 million, or 5.1%, driven by reductions in various expense categories, despite an increase in salaries and employee benefits [25][26].

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) [First Quarter 2025 Performance Summary](index=1&type=section&id=First%20Quarter%202025%20Performance%20Summary) Origin Bancorp reported a strong first quarter of 2025, with significant growth in profitability compared to the previous quarter, driven by an expanded Net Interest Margin and progress on the 'Optimize Origin' initiative Q1 2025 Key Financial Metrics vs. Q4 2024 | Metric | Q1 2025 | Q4 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $22.4 million | $14.3 million | +57.0% | | Diluted EPS | $0.71 | $0.46 | +$0.25 | | PTPP Earnings | $32.0 million | $12.6 million | +154.0% | | Net Interest Margin (FTE) | 3.44% | 3.33% | +11 bps | | ROAA (annualized) | 0.93% | 0.57% | +36 bps | - Total loans held for investment (LHFI) increased slightly by **0.2%** to **$7.59 billion**, while total deposits grew by **1.4%** to **$8.34 billion** compared to the linked quarter[12](index=12&type=chunk) [Optimize Origin Initiative](index=1&type=section&id=Optimize%20Origin%20Initiative) Launched in January 2025, 'Optimize Origin' is a strategic initiative focused on productivity, balance sheet optimization, and culture, aiming to exceed a 1% ROAA run rate by Q4 2025 - The initiative is built on three primary pillars: Productivity, Delivery & Efficiency; Balance Sheet Optimization; and Culture & Employee Engagement[4](index=4&type=chunk) - Key actions include branch consolidation, headcount reduction, securities and capital optimization, and mortgage restructuring[4](index=4&type=chunk) - The company believes these actions will drive an estimated annual pre-tax pre-provision earnings improvement of approximately **$23.4 million**[4](index=4&type=chunk) [Results of Operations](index=2&type=section&id=Results%20of%20Operations%20for%20the%20Quarter%20Ended%20March%2031%2C%202025) [Net Interest Income and Net Interest Margin](index=2&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income for Q1 2025 slightly increased to $78.5 million, with the fully tax equivalent net interest margin expanding by 11 basis points to 3.44% due to reduced cost of liabilities - NII increased by **$110,000 QoQ**, primarily due to a **$7.7 million decrease** in interest expense on deposits, partially offset by a **$9.9 million decrease** in interest income from loans held for investment (LHFI)[6](index=6&type=chunk) - The average rate on interest-bearing deposits decreased by **38 basis points** to **3.23%** in Q1 2025 from **3.61%** in Q4 2024[7](index=7&type=chunk) - The decrease in LHFI interest income was driven by lower average loan balances, two fewer days in the quarter, and a **14 basis point decline** in the average loan yield to **6.33%**[10](index=10&type=chunk) - The Federal Reserve's rate reductions in late 2024, totaling **100 basis points**, have influenced market rates, with the target range holding at **4.25% to 4.50%** throughout Q1 2025[11](index=11&type=chunk) [Noninterest Income](index=4&type=section&id=Noninterest%20Income) Noninterest income significantly increased to $15.6 million, primarily due to the absence of a prior quarter's $14.6 million securities sale loss and a seasonal rise in insurance commission income - The **$15.9 million QoQ increase** was mainly driven by the absence of the prior quarter's **$14.6 million loss** on securities sales and a **$2.5 million increase** in insurance commission and fee income[22](index=22&type=chunk) - The increase in insurance income was driven by seasonal annual contingency fees recognized in the first quarter[23](index=23&type=chunk) - These gains were partially offset by a **$1.6 million decrease** in limited partnership investment income due to fair value adjustments[22](index=22&type=chunk)[23](index=23&type=chunk) [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Noninterest expense decreased by $3.4 million (5.1%) to $62.1 million, primarily due to the non-recurrence of a prior quarter's contingency expense and reduced professional services and marketing costs - The decrease was primarily driven by a **$3.1 million reduction** in other noninterest expense (due to a prior quarter contingency reserve), an **$814,000 decrease** in professional services, and a **$796,000 decrease** in advertising[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - Salaries and employee benefit expense increased by **$1.3 million**, mainly because the prior quarter included a **$1.7 million** Employee Retention Credit (ERC), which reduced that quarter's expense[27](index=27&type=chunk) [Credit Quality](index=3&type=section&id=Credit%20Quality) Credit quality metrics weakened in Q1 2025, with increases in past due loans, nonperforming loans, and classified loans, leading to a $3.4 million provision for credit losses Key Credit Quality Metrics (Q1 2025 vs. Q4 2024) | Metric | Q1 2025 | Q4 2024 | Change | | :--- | :--- | :--- | :--- | | Past due LHFI | $72.8M | $42.4M | +$30.4M | | Nonperforming LHFI | $81.4M | $75.0M | +$6.4M | | Classified loans | $127.7M | $118.8M | +$8.9M | | Provision (benefit) for credit losses | $3.4M | ($5.4M) | +$8.8M | | Net charge-offs (recoveries) | $2.7M | ($0.6M) | +$3.3M | | Nonperforming LHFI to LHFI | 1.07% | 0.99% | +0.08% | - The **$30.3 million increase** in past due loans was primarily attributed to **11 relationships** totaling **$39.8 million** across various real estate and commercial loan types[16](index=16&type=chunk) - The increase in nonperforming loans was mainly driven by **two relationships** totaling **$8.2 million**, primarily in residential real estate[17](index=17&type=chunk) - Classified and nonperforming loans continue to be negatively impacted by litigation related to a former banker in the East Texas market[18](index=18&type=chunk) [Financial Condition](index=4&type=section&id=Financial%20Condition) [Loans](index=4&type=section&id=Loans) Total loans held for investment (LHFI) at March 31, 2025, reached $7.59 billion, showing minimal growth driven by multi-family and mortgage warehouse loans, offset by commercial real estate and construction loan decreases - Total LHFI increased by **$11.8 million QoQ**[29](index=29&type=chunk) - Key growth areas were multi-family real estate (**+$64.3 million**) and mortgage warehouse (MW LOC) loans (**+$55.1 million**)[29](index=29&type=chunk) - These increases were offset by decreases in commercial real estate (**-$93.6 million**) and construction/land/land development loans (**-$65.4 million**)[29](index=29&type=chunk) [Securities](index=5&type=section&id=Securities) The total securities portfolio grew by $58.8 million (5.3%) to $1.18 billion, driven by purchases, with an improved unrealized loss position and shortened portfolio duration - Total securities increased by **5.3% QoQ**, driven by **$73.1 million in purchases**[35](index=35&type=chunk) - Accumulated other comprehensive loss (AOCI) decreased by **$15.6 million (14.7%)** to **$90.4 million**[35](index=35&type=chunk) - The weighted average effective duration of the portfolio decreased from **4.46 years to 4.10 years**[35](index=35&type=chunk) [Deposits](index=5&type=section&id=Deposits) Total deposits increased by $115.3 million (1.4%) to $8.34 billion, primarily due to a significant rise in money market deposits, despite declines in time and interest-bearing demand deposits - The **1.4% QoQ increase** in total deposits was mainly due to a **$278.9 million rise** in money market deposits[35](index=35&type=chunk) - This was partially offset by decreases in time deposits (**-$78.0 million**) and interest-bearing demand deposits (**-$67.1 million**)[35](index=35&type=chunk) - Noninterest-bearing deposits as a percentage of total deposits decreased to **22.7%** from **23.1%** in the prior quarter[35](index=35&type=chunk) [Subordinated Debentures](index=5&type=section&id=Subordinate%20debentures) As part of 'Optimize Origin,' the company redeemed $70.0 million in subordinated debentures, reducing the balance by 44.0% to $89.6 million and projecting $2.1 million in annualized interest expense savings - Total subordinated debentures decreased by **$70.3 million, or 44.0%**, from the linked quarter due to a **$70.0 million redemption**[35](index=35&type=chunk) - This redemption is projected to save approximately **$2.1 million in annualized interest expense**[35](index=35&type=chunk) [Financial Tables](index=9&type=section&id=Financial%20Tables) [Selected Quarterly Financial Data](index=9&type=section&id=Selected%20Quarterly%20Financial%20Data) This table provides a five-quarter summary of key financial data, including income statement highlights, balance sheet figures, and key performance and capital ratios, allowing for trend analysis [Consolidated Quarterly Statements of Income](index=10&type=section&id=Consolidated%20Quarterly%20Statements%20of%20Income) This table presents the company's detailed consolidated statements of income for the last five quarters, breaking down interest and noninterest income and expenses [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) This table shows the company's detailed consolidated balance sheets at the end of each of the last five quarters, itemizing assets, liabilities, and stockholders' equity [Loan Data](index=12&type=section&id=Loan%20Data) This section provides a detailed breakdown of the loan portfolio by category, nonperforming assets, past due loans, and a roll-forward of the allowance for loan credit losses over the past five quarters [Average Balances and Yields/Rates](index=13&type=section&id=Average%20Balances%20and%20Yields%2FRates) This table details the average balances for various asset and liability categories and their corresponding annualized yields and rates, providing insight into the components of net interest margin for the current, linked, and prior-year quarters [Notable Items](index=14&type=section&id=Notable%20Items) This table isolates and quantifies the pre-tax and EPS impact of specific significant or non-recurring items over the past five quarters, such as costs related to questioned banker activity, strategic initiatives, and gains/losses on securities [Non-GAAP Reconciliations](index=15&type=section&id=Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations for non-GAAP financial measures used in the report, such as PTPP earnings, tangible book value per common share, and ROATCE, to their most directly comparable GAAP measures [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This section cautions investors that the report contains forward-looking statements subject to numerous risks and uncertainties, including economic conditions, interest rate changes, and regulatory shifts, which could cause actual results to differ materially - The report contains forward-looking statements concerning future financial performance, growth strategies, and other projections which are inherently uncertain[40](index=40&type=chunk) - A comprehensive list of risk factors is provided, including economic conditions, interest rate volatility, asset quality deterioration, regulatory compliance, and operational risks, which could cause actual results to differ from projections[40](index=40&type=chunk) - The company advises against placing undue reliance on these statements and does not commit to updating them[42](index=42&type=chunk)

RUSTON, La., April 10, 2025 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (NYSE: OBK) (“Origin”), the financial holding company for Origin Bank, plans to issue first quarter 2025 results after the market closes on Wednesday, April 23, 2025, and hold a conference call to discuss such results on Thursday, April 24, 2025, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). The conference call will be hosted by Drake Mills, Chairman, President and CEO of Origin, William J. Wallace, IV, Chief Financial Officer of Ori ...

Core Viewpoint - Origin Bancorp, Inc. is reducing its Board of Directors from 16 to 11 members to enhance corporate governance and align with best practices [1][2][3] Board Composition Changes - Five directors will not stand for reelection at the 2025 Annual Meeting: Jay Dyer, Farrell Malone, Lori Sirman, Elizabeth Solender, and Steve Taylor [1][2] - The remaining directors nominated for election include Daniel Chu, James D'Agostino, Jr., James Davison, Jr., A. La'Verne Edney, Meryl Farr, Richard Gallot, Jr., Stacey Goff, Cecil Jones, Michael Jones, Gary Luffey, and Drake Mills [2] Governance Strategy - The decision to reduce the Board size is part of a strategic initiative to create a smaller, more efficient Board that supports the Company's growth and strategy [3] - The changes are not due to any disagreements between the departing directors and the Company, indicating a collaborative decision-making process [3] Company Background - Origin Bancorp, Inc. is headquartered in Ruston, Louisiana, and operates more than 55 locations across various regions, providing a wide range of financial services [4]

Financial Performance - As of December 31, 2024, total assets were $9.68 billion, total loans held for investment were $7.57 billion, total deposits were $8.22 billion, and total stockholders' equity was $1.15 billion[19]. - Net income for 2024 was $76,492 thousand, down from $83,800 thousand in 2023, representing a decrease of 8.3%[417]. - Total stockholders' equity increased to $1,145,245 thousand in 2024 from $1,062,905 thousand in 2023, an increase of 7.75%[414]. - Comprehensive income for 2024 was $91,486 thousand, down from $122,652 thousand in 2023, a decrease of 25.4%[419]. - Basic earnings per common share decreased to $2.46 in 2024 from $2.72 in 2023, a decline of 9.56%[417]. - Cash flows from operating activities for 2024 were $108,481,000, down from $129,921,000 in 2023, representing a decline of 16.6%[425]. - Noninterest income totaled $55,379 thousand in 2024, down from $58,335 thousand in 2023, a decrease of 5.03%[417]. - Total noninterest expense increased to $251,038 thousand in 2024, compared to $235,216 thousand in 2023, an increase of 6.73%[417]. - The company reported a stock-based compensation expense of $7,166,000 in 2024, up from $5,281,000 in 2023, indicating a rise of 34.8%[425]. Capital and Regulatory Compliance - The company raised over $589.6 million in new Tier 1 capital since 2006, including a merger valued at $307.8 million in 2022[22]. - The company is subject to the Volcker Rule, which may affect its activities once total consolidated assets exceed $10 billion[94]. - The Dodd-Frank Act mandates that financial institutions with over $1 billion in assets, like Origin Bank, must ensure incentive compensation does not encourage inappropriate risks[95]. - The Company and Origin Bank's regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer[104]. - The required minimum leverage ratio for all banks and bank holding companies is 4%[99]. - To be well-capitalized, Origin Bank must maintain a Tier 1 risk-based capital ratio of 6.0% or greater and a total risk-based capital ratio of 10.0% or greater[102]. - The capital conservation buffer required is 2.5%, comprised of CET1, above each of the minimum risk-based capital ratio requirements[100]. - The company is subject to various regulatory policies relating to the payment of dividends, including maintaining adequate capital above regulatory minimums[107]. - The Federal Reserve has indicated that a bank holding company should consult with them and potentially reduce dividends if it is in danger of not meeting minimum regulatory capital adequacy ratios[109]. Loan Portfolio and Credit Quality - The loan portfolio composition as of December 31, 2024, included 31.1% commercial and industrial loans and 44.1% commercial real estate loans[28]. - The Company’s loan portfolio totaled $7.57 billion as of December 31, 2024, with an allowance for credit losses on loans amounting to $91.1 million[409]. - The provision for credit losses decreased to $7,448 thousand in 2024 from $16,753 thousand in 2023, a reduction of 55.54%[417]. - Delinquency statistics are updated monthly, serving as a key indicator of credit quality for various loan types, including residential and consumer loans[457]. - Loans are placed on nonaccrual status when they are 90 days or more past due, impacting the recognition of interest income[454]. - The allowance for credit losses is calculated using historical loss rates adjusted for current conditions, with a focus on loans held for investment[456]. Interest Income and Rate Risk - Interest income from commercial real estate loans was $146.5 million for the year ended December 31, 2024, compared to $135.1 million in 2023[36]. - The commercial and industrial loans contributed interest income of $163.9 million for the year ended December 31, 2024, up from $155.8 million in 2023[38]. - Net interest income increased slightly to $300,366 thousand in 2024, compared to $299,557 thousand in 2023, reflecting a growth of 0.27%[417]. - Interest rate risk modeling indicates that for a 100-basis point shift, estimated net interest income at risk for the subsequent one-year period should not decline by more than 10.0%[393]. - Under the static model, a 400-basis point increase in interest rates would result in a 15.9% increase in net interest income, while a decrease of the same magnitude would lead to an 11.0% decline[395]. - The Company employs interest rate risk simulation models to assess the impact of interest rate fluctuations on net interest income and fair value of equity[392]. Market Expansion and Strategic Initiatives - The company entered the Southeast market in 2024 with two banking locations in South Alabama and the Florida Panhandle[22]. - The company plans to close six banking centers by the end of February 2025 as part of its strategic initiatives[19]. - Origin Bancorp, Inc. operates over 60 locations across multiple states, including Texas, Louisiana, Mississippi, Alabama, and Florida[430]. Diversity and Inclusion Efforts - The company has established a Diversity Council consisting of 17 diverse employees to advance its Diversity, Equity, and Inclusion efforts[56]. - The Diversity Council launched in 2023 aims to enhance workplace inclusion and community engagement, hosting events like Origin Connections Month[73]. - Employee survey results showed that 90% of responses exceeded benchmarks of Glint's top 10% of global companies, indicating strong inclusion and belonging[76]. - Origin Bank has been recognized as a "Best Bank to Work For" for twelve consecutive years, reflecting its commitment to corporate culture and employee development[78]. - The company is committed to ongoing training and development programs to foster inclusion and diversity within its workforce[77]. Regulatory and Compliance Challenges - The company reported that any reduction in interchange income due to the loss of the exemption for small issuers under the Durbin Amendment could significantly adversely affect its business starting in the second half of 2026[125]. - The revised CRA regulations, effective January 1, 2026, will likely make it more challenging for the company to receive a satisfactory rating on its CRA exam[127]. - The company is subject to a final rule from the CFPB that caps overdraft fees at $5 per transaction, effective October 1, 2025, which may impact its operations as it expects to exceed $10 billion in assets[132]. - The company has augmented its anti-money laundering compliance programs in response to regulatory scrutiny and potential sanctions for violations[120]. - The company must comply with the provisions of the Equal Credit Opportunity Act and the Fair Housing Act, which prohibit discrimination in lending practices[135].