Origin Bank(US:OBK)2022-10-29 17:45Financial Data and Key Metrics Changes - The company reported an adjusted ROA of 1.34% and adjusted ROE of 13.14% for the quarter [10] - The estimated tangible book value earn-back period was lowered to 1.6 years following the merger with BTH [8] - Net interest margin improved by approximately 40 basis points for the second consecutive quarter [10] Business Line Data and Key Metrics Changes - Organic loan growth for the quarter was strong, with loans growing by $215.3 million or 3.5% compared to the linked quarter, equating to a 14% annualized growth rate [13] - Non-interest-bearing deposits increased by $91.2 million or 3.5%, representing a 14% annualized growth [15] - Total deposits declined for the quarter due to a significant customer transaction and a strategic decision to allow some non-core funding to leave the bank [15] Market Data and Key Metrics Changes - The company enhanced its core presence in East Texas and the Dallas-Fort Worth markets following the BTH merger [9] - The cumulative total deposit beta was reported at 16%, while the cumulative NIM beta was at 40% [15] Company Strategy and Development Direction - The company aims to build long-term value and has taken major steps to strengthen its position moving forward [11] - The focus remains on relationship-based banking and capitalizing on growth opportunities in Texas, Louisiana, and Mississippi [13] - The company is committed to maintaining a unique corporate culture while pursuing profitable growth [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about core profitability and loan growth, despite potential economic headwinds [10][21] - The company anticipates additional net interest margin expansion, loan and deposit growth, and stability in credit metrics for the fourth quarter [33] - Management is closely monitoring the impact of inflation and potential recession on the loan portfolio [20][21] Other Important Information - The company reported total non-interest expense of $56.2 million, an increase of $12.1 million primarily due to merger-related expenses and increased salaries [27] - The company remains well-capitalized and is positioned to take advantage of future growth opportunities [28] Q&A Session Summary Question: Thoughts on the acquisition and changes in marks - Management noted that the deal metrics improved post-merger despite changes in the interest rate environment affecting EPS accretion [39][41] Question: Pipeline of deposit growth and expectations for the fourth quarter - Management indicated strong growth in non-interest-bearing deposits and a strategic focus on core deposits, particularly in East Texas [54] Question: Loan growth expectations for the fourth quarter and next year - Management expects low-double digit growth in loans for the fourth quarter and high-single digit growth for 2023, emphasizing strict underwriting standards [56][57] Question: Stability of the balance sheet and adjustments - Management anticipates ending the year around $9.8 billion in assets, with a focus on maintaining balance sheet stability [66] Question: Expense trajectory and cost savings - Management expects non-interest expenses to be between $57 million and $58 million for the fourth quarter, with mid-single digit increases anticipated for 2023 [67]