Here's Why Origin Bancorp (OBK) is a Must-Buy Stock Now

Core Viewpoint - Origin Bancorp, Inc. (OBK) is positioned for growth due to strong loan and deposit balances, strategic initiatives, and a favorable high interest rate environment. Analysts are optimistic about the stock's earnings growth potential, with Zacks Consensus Estimates for 2024 and 2025 earnings increasing by 9.1% and 8% respectively. OBK holds a Zacks Rank 1 (Strong Buy) [1][4]. Earnings Growth - Origin Bancorp has experienced earnings growth of 14.62% over the past three to five years, significantly outperforming the industry average of 7.30%. This growth is attributed to solid top-line growth and effective expense management [3]. - The company has a strong earnings surprise history, surpassing the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 8.04%. Future earnings estimates indicate a slight increase in 2024 and a 7.6% rise in 2025 [4][6]. Revenue Strength - Origin Bancorp's revenues have shown a compound annual growth rate (CAGR) of 12.9% over the last four years (2019-2023), although there was a decline in the first quarter of 2024 due to lower net interest income (NII). The acquisition of BT Holdings, Inc. in 2022 has enhanced revenue growth, supported by organic growth measures and higher interest rates [5][6]. Strong Balance Sheet - As of March 31, 2024, OBK's total cash and cash equivalents were $291.5 million, with total debt at $147.4 million. Total loans and total deposits have shown a CAGR of 16.6% and 18.2% respectively over the last four years. This upward trend continued in the first quarter of 2024 [7][8]. - The strategic decision to sell mortgage servicing rights (MSR) assets has further strengthened the balance sheet by reducing volatility and regulatory risks. The company's debt/equity ratio stands at 0.16, lower than the industry average of 0.26, indicating a conservative approach to debt financing [8]. Stock Valuation - Origin Bancorp's stock appears undervalued, with price-to-book and price-to-sales ratios of 0.90 and 1.61 respectively, both below the industry averages of 0.95 and 1.76 [9].