Origin Bank(US:OBK)2025-10-23 14:00Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $0.27 for Q3 2025, with a net expense of $23.3 million from notable items impacting EPS by $0.59 [15] - Total revenue, excluding notable items, increased by 10%, while noninterest expense decreased by 3% [9][19] - The pretax pre-provision return on assets (ROA) rose by 48 basis points to 1.63% compared to 1.15% in 2024 [8] Business Line Data and Key Metrics Changes - Loan originations increased by 19.2% year-to-date compared to the same period last year, with business loan production under $2.5 million up by 22.9% [9] - Treasury management fee income grew by 7% year-over-year, while loan and swap fees surged by 62% during the same period [9] - Noninterest-bearing deposits rose by $158.6 million or 8.6% quarter-over-quarter [10] Market Data and Key Metrics Changes - The company experienced a strong build on the deposit side, with total deposits increasing by 2.6% during the quarter [15] - Loans past due 30 to 89 days decreased from 0.16% last quarter to 0.1% as of September 30 [13] - Classified loans increased by $10.7 million, representing 1.84% of total loans at quarter-end, compared to 1.66% as of June 30 [13] Company Strategy and Development Direction - The company is focused on the "Optimize Origin" initiative, aiming to enhance ROA and capitalize on M&A-driven disruptions in the market [7][21] - The management expressed confidence in achieving top quartile performance through strategic relationship building and market opportunities [7][21] - The company plans to continue enhancing processes and controls to mitigate risks and improve credit management [44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the Tricolor fraud incident but emphasized that it is an isolated event and does not define the company [6][12] - The outlook for loan growth in Q4 is optimistic, with expectations of a return to growth after a period of paydowns [17][39] - The company anticipates maintaining deposit growth guidance in low single digits for the year, supported by seasonal inflows [17] Other Important Information - The company charged off the entire outstanding debt related to Tricolor, totaling $28.4 million, and fully reserved $1.5 million in unfunded letters of credit [12] - The tangible book value grew to $33.95, marking the twelfth consecutive quarter of growth [20] - The company repurchased 265,248 shares at an average price of $35.85 during the quarter [20] Q&A Session Summary Question: Can you talk about your NDFI exposure and any trends in subprime credits? - The subprime portfolio was approximately $92 million, representing 1.2% of total loans, with no past dues or non-performing loans in the NDFI segment [31][32] Question: What insurance could offset some of the charge-offs related to Tricolor? - Management is pursuing recovery avenues but cannot quantify the potential recovery at this time due to the complexities of the bankruptcy process [33][34] Question: Can you provide insights on loan growth guidance for 2026? - The company expects mid to high single-digit growth in 2026, driven by strong origination trends and a robust pipeline [39][40] Question: Will there be any impact on expense run rate due to the Tricolor incident? - Management does not anticipate significant additional expenses but is enhancing internal processes for credit management [44][45] Question: What are the priorities for capital deployment? - The primary focus is on organic balance sheet growth, with stock buybacks and potential M&A opportunities considered secondary [59][60]