Origin Bank(US:OBK)2025-04-24 19:06Financial 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]