Origin Bank(US:OBK)2024-01-25 18:12Financial Data and Key Metrics Changes - In Q4, the company reported diluted earnings per share of $0.43, with adjusted EPS at $0.60 after excluding a $1.8 million write-down of mortgage servicing rights and a $4.6 million loss on securities sold [12] - The allowance for credit losses increased by $1.7 million to $96.9 million, maintaining a stable ratio of 1.26% of total loans held for investment [11] - Total deposits declined by 1.5% during the quarter, but increased by 1.3% when excluding brokered deposits [36] Business Line Data and Key Metrics Changes - Noninterest income for Q4 was reported at $8.2 million, with adjusted noninterest income at $14.6 million, down from $15.2 million in Q3 due to expected seasonality in the insurance business [16] - The company achieved a net interest margin (NIM) of 3.19%, reflecting a 5 basis point expansion during the quarter [37] Market Data and Key Metrics Changes - The company anticipates deposit growth in the mid-single-digit range for 2024, which will support loan growth in a similar range [8] - The Southeast market expansion is expected to drive profitable growth, with the new market projected to achieve breakeven within four quarters [15] Company Strategy and Development Direction - The company aims to remain under $10 billion in assets, finishing 2023 at $9.7 billion, while preparing for a new regulatory environment [5] - Investments in technology and processes are prioritized to enhance customer experience and drive market share growth [32] - The strategic investment in the Southeast market is seen as a significant growth opportunity, with a focus on relationship-driven banking [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic headwinds while maintaining sound credit quality [11] - The company is optimistic about future growth opportunities, particularly in Texas and the newly entered Southeast markets [42] - Management noted that the current economic environment presents opportunities for growth, emphasizing a proactive approach [111] Other Important Information - The company is exploring the sale of its mortgage servicing business, recognizing an impairment of $1.8 million on the associated asset [40] - The total capital ratio exceeded 9%, indicating strong capital flexibility for future growth initiatives [56] Q&A Session Summary Question: What types of customers will the new Southeast market team focus on? - The focus will be on diversifying and growing, particularly in C&I and operating companies, with an emphasis on building relationships in the new market [46][48] Question: How does the company view loan growth in relation to deposit growth? - Loan growth is governed by deposit growth, with a conservative estimate of 4% to 7% on the deposit side, which aligns with loan growth expectations [63] Question: What is the outlook for net interest margin (NIM) in the upcoming year? - NIM is expected to remain flat in the near term, with potential for expansion in the second half of the year due to fixed-rate loan repricing [67][68] Question: How does the company plan to deploy proceeds from the recent bond sale? - Proceeds will be used to fund loan growth in the new Southeast market and other existing markets, with quick deployment expected [108] Question: What are the company's thoughts on the insurance business? - The company remains committed to growing its insurance business, viewing it as a significant opportunity for enhancing noninterest income [90]