Origin Bank(US:OBK)2025-07-24 14:00Financial 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]