Origin Bank(US:OBK)2025-11-05 21:26Financial Performance - Net income decreased by $10.0 million, or 53.6%, to $8.6 million for Q3 2025 compared to $18.6 million for Q3 2024[244] - Net income for the nine months ended September 30, 2025, decreased by $16.5 million, or 26.6%, to $45.7 million from $62.2 million in the same period in 2024[272] - Noninterest income surged by $10.1 million, or 63.4%, to $26.1 million for the three months ended September 30, 2025, compared to $16.0 million in 2024[1] - Noninterest income decreased by $12.6 million, or 22.6%, to $43.1 million, primarily due to a $14.3 million increase in loss on sales of securities[4] Interest Income and Expenses - Net interest income for Q3 2025 was $83.7 million, an increase of $8.9 million, or 11.9%, compared to Q3 2024[245] - Net interest income increased to $83.7 million for the three months ended September 30, 2025, compared to $74.8 million for the same period in 2024, reflecting a margin increase from 3.16% to 3.62%[1] - Interest expense on total interest-bearing deposits decreased by $16.0 million, with $12.0 million of the decrease attributable to lower interest rates for Q3 2025[246] - Interest expense on total interest-bearing deposits decreased by $42.4 million, with a significant portion attributed to lower interest rates[274] - The average rate on interest-bearing deposits declined by 81 basis points to 3.20% for Q3 2025 from 4.01% for Q3 2024[246] - The average rate paid on interest-bearing deposits decreased to 3.21% for the nine months ended September 30, 2025, from 3.94% in the same period of 2024[341] Credit Losses and Provisions - Provision for credit losses increased by $32.2 million to $36.8 million for Q3 2025, primarily due to suspected borrower fraud[247] - Provision for credit losses rose significantly to $36.8 million for the three months ended September 30, 2025, up from $4.6 million in the same period of 2024, primarily due to suspected borrower fraud[1] - The company reported a $30.3 million increase in provision expense to $43.1 million for the nine months ended September 30, 2025, primarily due to suspected fraud[272] - Net charge-offs increased to $31.4 million for the three months ended September 30, 2025, from $9.5 million in the same period of 2024, largely due to fraud-related issues[1] - Net charge-offs rose by $21.4 million to $36.4 million, with a significant portion attributed to suspected borrower fraud impacting a specific loan relationship[3] Assets and Liabilities - Total assets decreased to $9,727.4 million as of September 30, 2025, from $9,985.8 million a year earlier[1] - Total interest-earning assets decreased to $9.21 billion for the nine months ended September 30, 2025, from $9.39 billion in the same period in 2024[278] - Total liabilities increased by $43.1 million, or 0.5%, to $8.58 billion at September 30, 2025, from $8.53 billion at December 31, 2024[300] - Total deposits were $8.33 billion at September 30, 2025, reflecting an increase of $108.7 million, or 1.3%, compared to December 31, 2024[247] - Total deposits increased by $108.7 million, or 1.3%, to $8.33 billion at September 30, 2025, from $8.22 billion at December 31, 2024[300] Equity and Capital - Book value per common share increased by $2.52, or 6.9%, to $39.23 at September 30, 2025, compared to December 31, 2024[247] - Stockholders' equity increased to $1.21 billion at September 30, 2025, from $1.15 billion at January 1, 2025, driven by net income of $45.7 million[360] - Common equity Tier 1 capital ratio for Origin Bancorp, Inc. increased to 13.59% as of September 30, 2025, up from 13.32% on December 31, 2024[363] - Total capital ratio for Origin Bancorp, Inc. decreased to 15.90% as of September 30, 2025, compared to 16.44% on December 31, 2024[363] Strategic Initiatives - The company executed various strategic initiatives as part of the Optimize Origin initiative, targeting a return on average assets (ROAA) of greater than 1% by Q4 2025[242] - The company’s interest rate risk management includes simulation models to assess the impact of interest rate changes on net interest income and fair value of equity[373] - The company’s stock repurchase program authorized up to $50 million for the next three years, following the completion of the previous program[363] Market and Economic Conditions - The Federal Reserve reduced the federal funds target rate by 25 basis points on September 17, 2025, and again on October 29, 2025, totaling a 150 basis point decrease from mid-2023[378] - Inflation impacts the company primarily through increased costs of goods and services, salaries, and occupancy expenses, rather than directly affecting monetary assets and liabilities[380]