Origin Bank(US:OBK)2025-10-22 20:17Financial Performance - Net income for the quarter ended September 30, 2025, was $8.6 million, a decrease of $6.0 million, or 41.1%, compared to the linked quarter [4] - Net income for the three months ended September 30, 2025, was $8,623,000, down from $18,601,000 in the same period last year, reflecting a decrease of 53.7% [37] - Net income for Q3 2025 was $8,623,000, down from $14,647,000 in Q2 2025, representing a decline of 41.2% [42] - The annualized net income for the nine months ended September 30, 2025, was $61,075,000, down from $83,114,000 in the previous year, reflecting a decrease of 26.5% [64] Earnings and Income Metrics - Pre-tax, pre-provision earnings (PTPP) were $47.8 million for the quarter ended September 30, 2025, reflecting an increase of $26.3 million, or 122%, compared to the linked quarter [4] - PTPP earnings (non-GAAP) for the same period were $47,804,000, significantly up from $21,521,000 in the prior quarter, marking a 121.5% increase [59] - Basic earnings per common share decreased to $0.28 from $0.60 year-over-year, reflecting a decline of 53.3% [37] - The core efficiency ratio (non-GAAP) improved to 54.70% for the quarter ended September 30, 2025, down from 73.77% in the previous quarter, indicating better cost management [61] Credit Losses and Provisions - The provision for credit losses was $36.8 million for the quarter ended September 30, 2025, compared to $2.9 million for the linked quarter, primarily due to suspected borrower fraud [12] - Provision for credit losses increased significantly to $36,820,000 compared to a benefit of $(5,398,000) in the prior year, indicating a shift in credit quality assessment [37] - Provision for credit losses increased to $36,820,000 in Q3 2025 compared to $2,862,000 in Q2 2025, indicating a substantial rise in expected credit losses [42] - The provision for credit losses for the nine months ended September 30, 2025, was $43,126,000, compared to $12,846,000 in the previous year, highlighting increased credit risk [64] Deposits and Loans - Total deposits increased by $208.8 million, or 2.6%, to $8.33 billion at September 30, 2025, with noninterest-bearing deposits rising by $158.6 million, or 8.6% [9] - Total deposits at September 30, 2025, were $8.33 billion, an increase of $208.8 million, or 2.6%, compared to June 30, 2025 [26] - Total loans held for investment (LHFI) decreased by $147.3 million, or 1.9%, to $7.54 billion at September 30, 2025 [20] - Loans held for investment (LHFI) decreased to $7,537,099,000 in Q3 2025 from $7,684,446,000 in Q2 2025, a decline of 1.9% [44] Interest Income and Margin - Net interest income was $83.7 million for the quarter ended September 30, 2025, an increase of $1.6 million, or 1.9%, compared to the linked quarter [5] - Net interest income for the three months ended September 30, 2025, was $83,704,000, an increase from $74,804,000 in the same period last year, representing a growth of 11.5% [37] - Net interest income after provision for credit losses decreased to $46,884,000 in Q3 2025 from $79,274,000 in Q2 2025, reflecting a significant drop of 40.8% [42] - The net interest margin (NIM-FTE) expanded four basis points to 3.65% for the quarter ended September 30, 2025, the highest level in the previous ten quarters [9] Securities and Investments - Total securities as of September 30, 2025, were $1.12 billion, a decrease of $22.5 million, or 2.0%, from $1.14 billion at June 30, 2025, and a decrease of $57.0 million, or 4.8%, compared to September 30, 2024 [26] - The fair value adjustment gain from the investment in Argent Financial was $7.0 million for the quarter, following an increase in ownership to over 20% [9] - Equity method securities increased to $65.6 million, an increase of $49.8 million, or 313.8%, compared to June 30, 2025, driven by a change in presentation due to the Optimize Origin initiative [26] Operational Metrics - The company operates more than 56 locations across multiple states, providing a broad range of financial services [27] - The efficiency ratio improved to 56.48% from 68.86% in the same quarter last year, indicating better cost management [37] - The weighted average effective duration for the total securities portfolio was 4.31 years as of September 30, 2025, compared to 4.52 years as of June 30, 2025 [26] Notable Items and Adjustments - The total notable items for the three months ended September 30, 2025, amounted to $(23,346,000), with a diluted EPS impact of $(0.59) [52] - The positive valuation adjustment on non-marketable equity securities for the nine months ended September 30, 2025, was $6,972,000, contributing $0.18 to EPS [55] - The loss on sales of securities for the nine months ended September 30, 2025, was $(14,448,000), affecting EPS by $(0.36) [55]