Financial Performance - Net income for the three months ended March 31, 2025, decreased by $221,000, or 1.0%, to $22.4 million compared to $22.6 million for the same period in 2024[197]. - Noninterest income decreased by $1.7 million, or 9.6%, to $15.6 million for the three months ended March 31, 2025, primarily due to a decrease in limited partnership investment (loss) income and mortgage banking revenue[215]. - Net charge-offs for the three months ended March 31, 2025, were $2.73 million, compared to $2.58 million for the same period in 2024[260]. Interest Income and Expenses - Net interest income increased by $5.1 million, or 7.0%, to $78.5 million for the three months ended March 31, 2025, primarily due to an $11.3 million decrease in interest expense[198]. - The average rate on interest-bearing deposits declined by 62 basis points to 3.23% for the three months ended March 31, 2025, from 3.85% for the same period in 2024[199]. - The fully tax equivalent net interest margin (NIM-FTE) increased by 25 basis points to 3.44% for the three months ended March 31, 2025, compared to 3.19% for the same period in 2024[203]. Loans and Deposits - Total loans held for investment (LHFI) were $7.59 billion at March 31, 2025, reflecting an increase of $11.8 million, or 0.2%, compared to December 31, 2024[201]. - Total deposits increased by $115.3 million, or 1.4%, to $8.34 billion at March 31, 2025, compared to December 31, 2024[201]. - The loan portfolio held for investment increased by $11.8 million, or 0.2%, to $7.59 billion at March 31, 2025, with significant growth in residential real estate loans and mortgage warehouse lines of credit[232]. Asset and Liability Management - Total assets amounted to $9.808 billion as of March 31, 2025, compared to $9.861 billion as of March 31, 2024[206]. - Total liabilities were $8.641 billion as of March 31, 2025, compared to $8.798 billion as of March 31, 2024[206]. - The total amount of purchased credit deteriorated (PCD) loans was approximately $8.0 million at March 31, 2025, down from $12.3 million at December 31, 2024[240]. Nonperforming Loans and Credit Losses - Nonperforming LHFI increased by $6.4 million to $81,368 thousand at March 31, 2025, resulting in a nonperforming LHFI ratio of 1.07%, up from 0.99% at the end of 2024[244]. - The allowance for loan credit losses (ALCL) to nonperforming LHFI decreased to 113.08% at March 31, 2025, from 121.41% at December 31, 2024, primarily due to the increase in nonperforming loans[257]. - Provision for credit losses increased by $432,000 to $3.4 million for the three months ended March 31, 2025, primarily due to an $805,000 increase in provisions for off-balance-sheet items[212]. Equity and Capital - Stockholders' equity increased by $34.9 million, or 3.1%, to $1.18 billion at March 31, 2025, compared to December 31, 2024[201]. - Common equity Tier 1 capital to risk-weighted assets improved to 13.57% as of March 31, 2025, up from 13.32% at December 31, 2024[291]. - Regulatory capital ratios showed compliance with all applicable requirements, with the Bank classified as "well capitalized" as of March 31, 2025[290]. Operational Efficiency - The company anticipates earnings improvement of approximately $23.4 million annually on a pre-tax pre-provision basis due to various efficiency optimizations[195]. - Noninterest expense for the three months ended March 31, 2025, increased by $3.4 million, or 5.7%, to $62.1 million, driven by increases in salaries and employee benefits and occupancy expenses[219]. - The increase in occupancy and equipment expenses was primarily due to a $1.5 million increase related to the consolidation of eight banking centers[221]. Market and Economic Conditions - The steep increase in interest rates has negatively impacted borrowers with variable rate loans, contributing to higher nonperforming loans[245]. - Interest rate sensitivity analysis indicated a 15.9% increase in net interest income with a 400 basis point increase in interest rates[303]. - The company continues to monitor the quality of its lending portfolio through disciplined underwriting and ongoing performance assessments[241].
ORIGIN BANCORP(OBNK) - 2025 Q1 - Quarterly Report