Origin Bancorp, Inc. Reports Earnings For First Quarter 2025

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].