Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $0.47 for Q2, with notable items impacting EPS by $0.39 [18] - Loans increased by 1.3% sequentially but decreased by 1% when excluding mortgage warehouse [18] - Total deposits declined by 2.6% during the quarter, with non-interest bearing deposits stable at about 23% of total deposits [19] - Net interest margin expanded by 17 basis points to 3.61%, benefiting from Argent's annual shareholder dividend [20] - Tangible book value grew sequentially to $33.33, marking the eleventh consecutive quarter of growth [22] Business Line Data and Key Metrics Changes - The commercial banking team saw an 18% reduction in FTE headcount, focusing on profitability models and alignment around key bankers [8] - C and I loans grew at an annualized rate of nearly 13% in Q2, despite large paydowns in the last two weeks of the quarter [9] - Treasury management revenue reached record levels, contributing to strong C and I production [10] Market Data and Key Metrics Changes - The company experienced a reduction in loan utilization rates from 53% to 50%, impacting cash utilization [38] - Economic uncertainty around tariffs and interest rates has slowed expectations for loan growth, but the company remains optimistic about origination volumes [10][36] Company Strategy and Development Direction - The company introduced "Optimize Origin," aiming for a 1% ROA run rate by 2025 and targeting top quartile performance among peers [4] - Increased ownership of Argent Financial to 20% is expected to drive additional income of approximately $6 million next year [5] - Focus areas include product delivery, streamlined organizational structure, enhanced data management, and improved expense management [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainty but expressed confidence in the actions taken to position the company for success [6] - The company anticipates mid to high single-digit loan growth in 2026, driven by market consolidation opportunities [36] - Management emphasized a disciplined approach to growth, focusing on the right industries and credit profiles [37] Other Important Information - The company repurchased 136,399 shares at an average price of $31.84 and announced a new $50 million repurchase plan effective through July 2028 [22] - The allowance for credit losses increased to $92.4 million, reflecting a stable credit environment [16] Q&A Session Summary Question: Expectations for net interest margin in Q3 - Management indicated that the second quarter benefited from an annual dividend from Argent and expects continued tailwinds from loan repricing [28] Question: Details on loan growth and customer paydowns - Management noted that economic uncertainty around tariffs has led some customers to reduce cash balances and utilize loans less [34] Question: Capital utilization and M&A appetite - Management expressed comfort with capital utilization and indicated ongoing conversations regarding potential M&A opportunities [46] Question: Update on Argent Financial and potential write-up - Management confirmed a write-up of approximately $7 million in the third quarter due to recent transactions involving Argent [70]

Core Insights - Origin Bancorp, Inc. reported a net income of $14.6 million, or $0.47 diluted EPS for Q2 2025, a decrease from $22.4 million, or $0.71 diluted EPS in Q1 2025 [1][38] - The company’s PTPP earnings were $21.5 million for Q2 2025, down from $32.0 million in the previous quarter [1][38] - The CEO emphasized the successful execution of the "Optimize Origin" plan aimed at enhancing financial performance and operational efficiency [2] Financial Performance - Net interest income for Q2 2025 was $82.1 million, an increase of $3.7 million, or 4.7%, compared to Q1 2025 [6][38] - The net interest margin (NIM-FTE) expanded by 17 basis points to 3.61% for Q2 2025, driven by an increase in yield on interest-earning assets [11][13] - Total loans held for investment (LHFI) increased by $98.9 million, or 1.3%, to $7.68 billion at June 30, 2025 [33][38] Balance Sheet and Capital Management - Total deposits decreased by $215.4 million, or 2.6%, to $8.12 billion compared to Q1 2025, influenced by seasonal factors [33][38] - The company repurchased 136,399 shares at an average price of $31.84 per share during the quarter [11][38] - Book value per common share increased to $38.62, reflecting a 2.3% increase from the previous quarter [11][38] Credit Quality - Past due LHFI decreased to $67.6 million, a reduction of 7.1% from the previous quarter [15][18] - Nonperforming LHFI increased to $85.3 million, representing a 4.9% increase compared to the linked quarter [15][18] - The allowance for loan credit losses (ALCL) was $92.4 million, showing a slight increase of 0.5% from the previous quarter [15][18] Noninterest Income and Expenses - Noninterest income for Q2 2025 was $1.4 million, a significant decrease of $14.2 million, or 91.2%, primarily due to a loss on sales of securities [20][21] - Noninterest expense remained relatively stable at $62.0 million, a slight decrease of 0.1% from the previous quarter [23][26] - The efficiency ratio was reported at 74.23%, indicating a decline in operational efficiency compared to the previous quarter [39]

Financial Data and Key Metrics Changes - In Q1 2025, diluted earnings per share were reported at $0.71, with net interest margin expanding by 11 basis points to 3.44% [23][27] - Annualized return on assets (ROA) was 93 basis points, with a target of reaching a run rate of 1% or greater by Q4 2025 [9][7] - Deposits increased by 1.4% during the quarter, with core deposits growing 7.2% on an annualized basis [24][14] Business Line Data and Key Metrics Changes - The mortgage business is undergoing restructuring, expected to improve annual pre-tax earnings by approximately $1.5 million starting in the second half of the year [8] - Non-interest income increased to $15.6 million in Q1, driven by seasonal improvements in the insurance business [29] - Non-interest expense decreased to $62.1 million in Q1 from $65.4 million in Q4, benefiting from Optimize Origin efforts [30] Market Data and Key Metrics Changes - The company anticipates mid to high-single-digit loan growth in 2025, supported by deposit growth [13] - Past due loans held for investment increased to 0.96%, while classified loans rose to 1.68% of total loans [18][19] - Non-interest-bearing deposits were stable at about 23% of total deposits, with year-over-year growth noted for the first time since Q4 2022 [25] Company Strategy and Development Direction - The company is focused on the "Optimize Origin" initiative to achieve elite-level financial performance and improve operational efficiency [7][10] - A partnership model in the mortgage business is expected to enhance efficiency and profitability [8] - The company is committed to deepening customer relationships to drive long-term shareholder value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite macroeconomic uncertainties, citing strong customer relationships and market positioning [34][48] - The company is prepared to navigate potential market challenges and capitalize on opportunities, drawing on past experiences during economic downturns [34][108] - Management remains focused on maintaining a disciplined approach to loan growth and deposit management [27][59] Other Important Information - The tangible book value grew to $32.43, marking the tenth consecutive quarter of linked quarter growth [33] - The company has plans for share repurchase activity and capital deployment opportunities [88] Q&A Session Summary Question: Loan growth outlook amidst macro uncertainty - Management remains optimistic about loan growth, citing energized bankers and building pipelines despite some project delays due to macroeconomic factors [41][42][44] Question: Impact of mortgage restructuring on bottom line - The company anticipates a portion of savings from the Optimize Origin initiative will flow to the bottom line while still investing in growth opportunities [51][52] Question: Competition in deposit pricing and loan yields - Loan yields remain stable in the 7.3% to 7.5% range, with management pleased about the competitive landscape [93] Question: Update on hiring efforts and regional performance - The company is actively hiring productive commercial bankers and is optimistic about growth in the Southeast region [74] Question: Potential for share buybacks - Management views current share prices as attractive and plans to engage in share repurchase activity [88]

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $0.71 for Q1, with a net expense impact of $2,300,000 equivalent to $0.06 in EPS pressure [16][18] - Net interest margin expanded by 11 basis points to 3.44%, exceeding expectations due to better loan yields and deposit costs [18][19] - Annualized return on assets (ROA) was 93 basis points, with a target of reaching a run rate of 1% or greater by Q4 [6][7] Business Line Data and Key Metrics Changes - The mortgage business is undergoing restructuring, expected to improve annual pretax earnings by approximately $1,500,000 starting in the second half of the year [6][10] - Non-interest income for Q1 was reported at $15,600,000, an increase from $14,100,000 in Q4, primarily due to seasonal factors in the insurance business [18][19] - Non-interest expense decreased to $62,100,000 in Q1 from $65,400,000 in Q4, with further reductions anticipated due to the Optimize Origin initiative [18][19] Market Data and Key Metrics Changes - Deposits, excluding brokered deposits, grew by 7.2% on an annualized basis, setting the stage for anticipated loan growth [10][17] - Non-interest bearing deposits remained stable at about 23% of total deposits, with expectations to maintain this range through 2025 [17] - The loan-to-deposit ratio, excluding mortgage warehouse, was reported at 86.1%, below the 90% target [17] Company Strategy and Development Direction - The company is focused on the "Optimize Origin" initiative to achieve elite financial performance and improve operational efficiency [5][8] - A strategic goal is to maintain mid to high single-digit loan growth in 2025, supported by core deposit growth [10][18] - The company is exploring opportunities for share buybacks and capital deployment to enhance shareholder value [59][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite macroeconomic uncertainties, citing strong customer relationships and market positioning [21][75] - The company is adjusting loan growth expectations to the lower end of the previous guidance due to macroeconomic factors but remains confident in achieving growth [22][29] - Management highlighted the importance of maintaining a strong credit culture and proactive client selection to optimize the portfolio [11][30] Other Important Information - The company has successfully exited approximately $200,000,000 in client relationships that did not fit its selection criteria [12][30] - The tangible book value grew sequentially to $32.43, marking the tenth consecutive quarter of growth [20] - Regulatory capital levels remain above well-capitalized standards, providing flexibility for future growth initiatives [20] Q&A Session Summary Question: Loan growth outlook amidst macro uncertainty - Management acknowledged optimism in loan growth despite adjusting expectations to the lower end of the previous guidance, citing strong pipelines and customer engagement [22][24][29] Question: Impact of Optimize Origin initiative on bottom line - Management indicated that a portion of the savings from the Optimize Origin initiative would flow to the bottom line while also investing in growth opportunities [31][32] Question: Deposit pricing competition and loan yields - Management reported stable loan yields in the 7.3% to 7.5% range, with proactive communication with customers regarding deposit pricing [64][66] Question: Update on hiring efforts and team performance - Management confirmed ongoing strategic hiring efforts, particularly in North Texas and the Southeast, with positive performance reported from the Houston team [45][48] Question: Mortgage segment restructuring and revenue outlook - Management noted that restructuring the mortgage segment would lower expenses but also impact revenue, with expectations for some offsetting tailwinds [49][50]

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].