RUSTON, La., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (NYSE: OBK) (“Origin,” “we,” “our” or the “Company”), the holding company for Origin Bank (the “Bank”), today announced net income of $24.3 million, or $0.79 diluted earnings per share for the quarter ended September 30, 2023, compared to net income of $21.8 million, or $0.70 diluted earnings per share, for the quarter ended June 30, 2023. Adjusted pre-tax, pre-provision (“adjusted PTPP”)⁽¹⁾ earnings were $30.7 million for the quarter ended September 30, 2023.

“Origin reported strong earnings this quarter as our team remained focused on executing on our strategic plan and delivering for our customers and communities,” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “Economic activity remains strong throughout our markets, and our results reflect the continued strength and stability of our company."

⁽¹⁾ Adjusted PTPP earnings is a non-GAAP financial measure, please see the last few pages of this document for a reconciliation of this alternative financial measure to its comparable GAAP measure.

Financial Highlights

• Net income was $24.3 million for the quarter ended September 30, 2023, reflecting an increase of $2.6 million, or 11.7%, compared to the linked quarter. The adjusted net income⁽¹⁾ was $22.0 million for the quarter ended September 30, 2023, reflecting an increase of $616,000, or 2.9%, compared to the linked quarter.
• Diluted earnings per share (“EPS”) was $0.79 for the quarter ended September 30, 2023, reflecting an increase of $0.09, or 12.9%, compared to $0.70 for the linked quarter. The adjusted diluted earnings per share⁽¹⁾ was $0.71 for the quarter ended September 30, 2023, reflecting an increase of $0.02, or 2.9%, compared to $0.69 for the linked quarter.
• During September 2023, we sold $181.9 million of available-for-sale investment securities at a loss of $7.2 million, and used the proceeds to pay down Federal Home Loan Bank (“FHLB”) advances, which negatively impact our basic and diluted EPS by $0.18 for the quarter ended September 30, 2023.
• During September 2023, we recorded a $10.1 million positive valuation adjustment on one of our non-marketable equity securities, which positively impact our basic and diluted EPS by $0.26 for the quarter ended September 30, 2023.
• Loans held for investment (“LHFI”), excluding mortgage warehouse lines of credit, to deposits were 87.0% at September 30, 2023, compared to 83.5% at June 30, 2023. Cash and liquid securities as a percentage of total assets was 11.6% at September 30, 2023, compared to 11.1% at June 30, 2023.
• Book value per common share was $32.32 at September 30, 2023, reflecting a decrease of $0.01, compared to the linked quarter. Tangible book value per common share⁽¹⁾ was $26.78 at September 30, 2023, reflecting an increase of $0.07, or 0.3%, compared to the linked quarter.
• At September 30, 2023, and June 30, 2023, Company level common equity Tier 1 capital to risk-weighted assets was 11.45%, and 11.01%, respectively, the Tier 1 leverage ratio was 10.00% and 9.65%, respectively, and the total capital ratio was 14.60% and 14.11%, respectively. Tangible common equity to tangible assets⁽¹⁾ was 8.66% at September 30, 2023, compared to 8.25% at June 30, 2023.
  

⁽¹⁾ Adjusted net income, adjusted diluted earnings per share, tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures. Please see the last few pages of this document for a reconciliation of these alternative financial measures to their comparable GAAP measures.

Results of Operations for the Three Months Ended September 30, 2023

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended September 30, 2023, was $74.1 million, a decrease of $1.2 million, or 1.5%, compared to the linked quarter, primarily due to a $4.3 million increase in total interest expense, partially offset by a $3.1 million increase in total interest income. Increases in interest rates drove a $7.0 million increase in total deposit interest expense, and higher average interest-bearing deposit balances drove another $2.1 million increase in total deposit interest expense, primarily due to higher average brokered and money market deposit balances. The increase in total deposit interest expense was partially offset by a $4.9 million decrease in total interest expense paid on FHLB advances and other borrowings due to lower average balances during the current quarter compared to the linked quarter. Increases in interest rates on average interest-earning assets drove a $5.4 million increase in total interest income, of which $4.7 million was due to higher interest rates on LHFI. The increase was partially offset by a $2.5 million decrease in interest income on interest-bearing balances due from banks due to lower average balances during the current quarter compared to the linked quarter.

The net purchase accounting amortization totaled $38,000 for the three months ended September 30, 2023, a decrease of $568,000 from a net purchase accounting accretion of $530,000 for the three months ended June 30, 2023.

The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions. On March 17, 2022, the Federal Reserve began an aggressive campaign to combat inflation with its first target rate range increase to 0.25% to 0.50%. Subsequently, it increased the target range six more times during 2022 and four more times through September 30, 2023, with the most recent and current Federal Funds target rate range being set on July 26, 2023, at 5.25% to 5.50%. By September 30, 2023, the Federal Funds target rate range had increased 500 basis points from March 17, 2022, and in order to remain competitive as market interest rates increased, we increased interest rates paid on our deposits.

The average rate on interest-bearing deposits increased to 3.47% for the quarter ended September 30, 2023, compared to 3.05% for the quarter ended June 30, 2023. The average interest-bearing deposit balances increased $235.5 million to $6.36 billion for the quarter ended September 30, 2023, from $6.12 billion for the linked quarter, of which $204.8 million and $78.5 million, respectively, were driven by higher average brokered and money market deposit balances. The average FHLB advances and other borrowings balance decreased to $230.8 million for the quarter ended September 30, 2023, compared to $606.1 million for the linked quarter, primarily due to the pay down of approximately $700.0 million in excess contingency liquidity during the linked quarter.

The yield on LHFI was 6.35% and 6.18% for the quarter ended September 30, 2023, and June 30, 2023, respectively, and average LHFI balances increased $86.8 million to $7.56 billion for the quarter ended September 30, 2023, compared to $7.47 billion for the linked quarter. The higher yield on LHFI was primarily driven by a $1.4 million increase in interest income earned on commercial real estate loans supported by interest rate increases on the loans during the quarter ended September 30, 2023, compared to the linked quarter.

The fully tax-equivalent net interest margin (“NIM”) was impacted by margin compression as rates on interest-bearing liabilities rose faster than yields on interest-earning assets during the last four quarters. The fully tax-equivalent NIM was 3.14% for the quarter ended September 30, 2023, representing a two and a 54 basis point decrease compared to the linked quarter and the prior year same quarter, respectively. The yield earned on interest-earning assets for the quarter ended September 30, 2023, was 5.69%, an increase of 19 and 146 basis points compared to the linked quarter and the prior year same quarter, respectively. The average rate paid on total interest-bearing liabilities for the quarter ended September 30, 2023, was 3.59%, representing a 29 and a 220 basis point increase compared to the linked quarter and the prior year same quarter, respectively. There was a minimal impact to the fully tax-equivalent NIM as a result of accretion income due to the BT Holdings, Inc. (“BTH”) merger for the current quarter and a two basis points increase for the linked quarter.

During the last few days of the quarter ended September 30, 2023, we made a strategic decision to sell available for sale investment securities with a book value of $181.9 million, and realized a loss of $7.2 million, in order to use the proceeds of $174.7 million to pay down FHLB advances. Due to the timing of this transaction, it had no impact on the fully tax-equivalent NIM for the quarter ended September 30, 2023. While the associated loss resulted in an $0.18 negative impact to diluted EPS for the quarter ended September 30, 2023, the difference between the relatively low yield on securities sold and the higher cost of FHLB advances was an attractive trade-off, with an estimated annualized positive forward impact to fully tax-equivalent NIM of 11 basis points, an estimated annualized forward diluted EPS benefit of approximately $0.11 and an estimated earn-back period of 1.7 years. The estimated metrics above use our annualized third quarter of 2023 net income, excluding non-operating items, plus the estimated annualized tax-effected net interest income using a weighted average tax-effected yield of 3.08% on the securities sold and an interest cost of 5.62% on the FHLB advances paid off.

Credit Quality

The table below includes key credit quality information:

	At and For the Three Months Ended												Change				% Change
(Dollars in thousands, unaudited)	September 30, 2023				June 30, 2023				September 30, 2022				Linked Quarter				Linked Quarter
Past due LHFI	$	20,347			$	19,836			$	10,866			$	511			2.6	%
Allowance for Loan Credit Losses (“ALCL”)		95,177				94,353				83,359				824			0.9
Classified loans		64,021				84,298				69,781				(20,277	)		(24.1	)
Total nonperforming LHFI		31,608				33,609				14,031				(2,001	)		(6.0	)
Provision for credit losses		3,515				4,306				16,942				(791	)		(18.4	)
Net charge-offs		2,686				1,919				1,078				767			40.0
Credit quality ratios(1):
ALCL to nonperforming LHFI		301.12	%			280.74	%			594.11	%		2038 bp				N/A
ALCL to total LHFI		1.26				1.24				1.21			2 bp				N/A
ALCL to total LHFI, adjusted(2)		1.30				1.32				1.29			-2 bp				N/A
Nonperforming LHFI to LHFI		0.42				0.44				0.20			-2 bp				N/A
Net charge-offs to total average LHFI (annualized)		0.14				0.10				0.07			4 bp				N/A

___________________________
(1)	Please see the Loan Data schedule at the back of this document for additional information.
(2)	The ALCL to total LHFI, adjusted, is calculated by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the warehouse loans from the LHFI in the denominator. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the ALCL.

We recorded a credit loss provision of $3.5 million during the quarter ended September 30, 2023, compared to $4.3 million recorded during the linked quarter. The decrease is primarily due to an improvement in classified and nonperforming loans during the quarter ended September 30, 2023, compared to June 30, 2023.

The ALCL to nonperforming LHFI increased to 301.1% at September 30, 2023, compared to 280.7% at June 30, 2023, driven primarily by a decrease of $2.0 million in our nonperforming LHFI. Nonperforming LHFI to LHFI decreased over the past quarter to 0.42% compared to 0.44% for the linked quarter. Quarterly net charge-offs increased to $2.7 million from $1.9 million for the linked quarter, primarily due to an increase in commercial and industrial charge-offs combined with a decrease in commercial and industrial loan recoveries compared to the linked quarter.

Classified loans decreased $20.3 million, or 24.1%, at September 30, 2023, compared to the linked quarter, and represented 0.85% of LHFI at September 30, 2023, compared to 1.11% at June 30, 2023. The decrease in classified loans was primarily due to payoffs and, to a lesser degree, upgrades in classified loans at September 30, 2023, compared to June 30, 2023.

Noninterest Income

Noninterest income for the quarter ended September 30, 2023, was $18.1 million, an increase of $2.5 million, or 15.9%, from the linked quarter. The increase from the linked quarter was primarily driven by a $10.5 million increase in other noninterest income, which was partially offset by a $7.2 million loss on sales of securities, a $656,000 decrease in limited partnership investment income and a $510,000 decrease in mortgage banking revenue.

The increase in other noninterest income was primarily due to a $10.1 million positive valuation adjustment recorded on one of our non-marketable equity securities, which qualified for the practical expedient under which we carry these securities at cost adjusted for any observable transactions during the period, less any impairment. During the three months ended September 30, 2023, we observed multiple orderly transactions for identical equity securities indicating a price change had occurred and adjusted our basis upwards accordingly.

The loss on sales of securities was due to the sale of available for sale investment securities with a current book value of $181.9 million, which realized a loss on sale of $7.2 million. We used the proceeds from the sale of $174.7 million to pay down FHLB advances. Please see the Net Interest Income and Net Interest Margin section above for more information on this transaction.

The decrease in limited partnership investment income was mainly due to a $628,000 decrease in fair value of investments in one of our limited partnership funds during the current quarter.

Noninterest Expense

Noninterest expense for the quarter ended September 30, 2023, was $58.7 million, slightly decreased from the linked quarter by $224,000, or 0.4%. The decrease from the linked quarter was primarily due to a $377,000 decrease in franchise tax expense, offset by several immaterial changes in noninterest expense line items.

Income Taxes

The effective tax rate was 19.1% during the quarter ended September 30, 2023, compared to 21.5% during the linked quarter primarily due to a decrease in the estimated state tax compared to the linked quarter.

Financial Condition

Loans

• Total LHFI at September 30, 2023, were $7.57 billion, a decrease of $54.6 million, or 0.7%, from $7.62 billion at June 30, 2023, and an increase of $685.4 million, or 10.0%, compared to September 30, 2022.
• Mortgage warehouse lines of credit totaled $286.3 million at September 30, 2023, a decrease of $251.3 million, or 46.7%, compared to the linked quarter.
• Total real estate loans were $5.20 billion at September 30, 2023, an increase of $116.8 million, or 2.3%, from the linked quarter, with construction/land/land development and residential real estate loan growth each contributing $54.5 million of the total real estate loan growth, respectively.
• Total commercial and industrial loans were $2.06 billion at September 30, 2023, an increase of $81.0 million, or 4.1%, compared to the linked quarter.

Securities

• Total securities at September 30, 2023, were $1.31 billion, a decrease of $244.6 million, or 15.8%, compared to the linked quarter and a decrease of $381.4 million, or 22.6%, compared to September 30, 2022.
• The decrease was primarily due to sales, maturities and calls, as well as normal principal payments. During the last few days of the quarter ended September 30, 2023, we made a strategic decision to sell available for sale investment securities with a book value of $181.9 million and realized a loss of $7.2 million, the proceeds of which were used to pay down FHLB advances.
• Accumulated other comprehensive loss, net of taxes, primarily associated with the available for sale (“AFS”) portfolio, was $172.7 million at September 30, 2023, an increase of $19.9 million, or 13.0%, from the linked quarter.
• The weighted average effective duration for the total securities portfolio was 4.49 years as of September 30, 2023, compared to 4.13 years as of June 30, 2023.

Deposits

• Total deposits at September 30, 2023, were $8.37 billion, a decrease of $115.6 million, or 1.4%, compared to the linked quarter, and represented an increase of $597.2 million, or 7.7%, from September 30, 2022.
• The decrease in the current quarter compared to the linked quarter was primarily due to a decrease of $115.0 million in noninterest-bearing deposits. Noninterest-bearing deposits continued to be impacted by the higher interest rate environment, as we saw a continuation of the declining trend in noninterest-bearing deposit balances that began in the fourth quarter of 2022.
• At September 30, 2023, noninterest-bearing deposits as a percentage of total deposits were 24.0%, compared to 25.0% and 34.3% at June 30, 2023, and September 30, 2022, respectively.
• Uninsured/uncollateralized deposits totaled $2.75 billion at September 30, 2023, compared to $2.84 billion at June 30, 2023, representing 32.8% and 33.4% of total deposits at September 30, 2023, and June 30, 2023, respectively.

Borrowings

• FHLB advances and other borrowings at September 30, 2023, were $12.2 million, a decrease of $330.6 million, or 96.4%, compared to the linked quarter and represented a decrease of $438.2 million, or 97.3%, from September 30, 2022.
• During the last few days of the quarter ended September 30, 2023, we made a strategic decision to sell available for sale investment securities to pay down FHLB advances.

Stockholders’ Equity

• Stockholders’ equity was $998.9 million at September 30, 2023, an increase of $1.1 million, or 0.1%, compared to $997.9 million at June 30, 2023, and an increase of $91.9 million, or 10.1%, compared to $907.0 million, at September 30, 2022.
• The increase in stockholders’ equity from the linked quarter is primarily due to net income of $24.3 million, partially offset by an increase in accumulated other comprehensive loss, net of tax, of $19.9 million and dividends declared of $4.7 million during the current quarter.

Conference Call

Origin will hold a conference call to discuss its third quarter 2023 results on Thursday, October 26, 2023, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial +1 (929) 272-1574 (U.S. Local / International 1); +1 (857) 999-3259 (U.S. Local / International 2); +1 (800) 528-1066 (U.S. Toll Free), enter Conference ID: 51465 and request to be joined into the Origin Bancorp, Inc. (OBK) call. A simultaneous audio-only webcast may be accessed via Origin’s website at www.origin.bank under the investor relations, News & Events, Events & Presentations link or directly by visiting https://dealroadshow.com/e/ORIGINQ323.

If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Origin’s website at www.origin.bank, under Investor Relations, News & Events, Events & Presentations.

About Origin

Origin Bancorp, Inc. is a financial holding company headquartered in Ruston, Louisiana. Origin’s wholly owned bank subsidiary, Origin Bank, was founded in 1912 in Choudrant, Louisiana. Deeply rooted in Origin’s history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities it serves. Origin provides a broad range of financial services and currently operates 60 banking centers located in Dallas/Fort Worth, East Texas, Houston, North Louisiana and Mississippi. For more information, visit www.origin.bank.

Non-GAAP Financial Measures

Origin reports its results in accordance with generally accepted accounting principles in the United States of America ("GAAP"). However, management believes that certain supplemental non-GAAP financial measures may provide meaningful information to investors that is useful in understanding Origin's results of operations and underlying trends in its business. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Origin's reported results prepared in accordance with GAAP. The following are the non-GAAP measures used in this release: adjusted net income, adjusted PTPP earnings, adjusted diluted EPS, NIM-FTE, adjusted, adjusted ROAA, adjusted PTPP ROAA, adjusted ROAE, adjusted PTPP ROAE, tangible book value per common share, adjusted tangible book value per common share, tangible common equity to tangible assets, ROATCE, adjusted ROATCE and adjusted efficiency ratio.

Please see the last few pages of this release for reconciliations of non-GAAP measures to the most directly comparable financial measures calculated in accordance with GAAP.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin’s future financial performance, business and growth strategies, projected plans and objectives, and any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including changes to interest rates by the Federal Reserve and the resulting impact on Origin’s results of operations, estimated forbearance amounts and expectations regarding the Company’s liquidity, including in connection with advances obtained from the FHLB, which are all subject to change and may be inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such changes may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions and current expectations, estimates and projections about Origin and its subsidiaries, any of which may change over time and some of which may be beyond Origin’s control. Statements or statistics preceded by, followed by or that otherwise include the words “assumes,” “anticipates,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” “projects,” and similar expressions or future or conditional verbs such as “could,” “may,” “might,” “should,” “will,” and “would” and variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin’s future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; the impact of current and future economic conditions generally and in the financial services industry, nationally and within Origin’s primary market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers and changes to customer and client behavior as a result of the foregoing; deterioration of Origin’s asset quality; factors that can impact the performance of Origin’s loan portfolio, including real estate values and liquidity in Origin’s primary market areas; the financial health of Origin’s commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin’s loans; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; Origin’s ability to anticipate interest rate changes and manage interest rate risk, (including the impact of higher interest rates on macroeconomic conditions, competition, and the cost of doing business); the effectiveness of Origin’s risk management framework and quantitative models; Origin’s inability to receive dividends from Origin Bank and to service debt, pay dividends to Origin’s common stockholders, repurchase Origin’s shares of common stock and satisfy obligations as they become due; the impact of labor pressures; changes in Origin’s operation or expansion strategy or Origin’s ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin’s ability to maintain important customer relationships, reputation or otherwise avoid liquidity risks; increasing costs as Origin grows deposits; operational risks associated with Origin’s business; volatility and direction of market interest rates; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; increased competition in the financial services industry, particularly from regional and national institutions, as well as from fintech companies; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated; an increase in unemployment levels and slowdowns in economic growth; Origin’s level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin’s loan portfolio; changes in laws, rules, regulations, interpretations or policies relating to financial institutions, and potential expenses associated with complying with such regulations; periodic changes to the extensive body of accounting rules and best practices; further government intervention in the U.S. financial system; a deterioration of the credit rating for U.S. long-term sovereign debt or actions that the U.S. government may take to avoid exceeding the debt ceiling; compliance with governmental and regulatory requirements, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and others relating to banking, consumer protection, securities, and tax matters; Origin’s ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin’s non-GAAP liquidity measurements and its underlying assumptions or estimates; uncertainty regarding the transition away from the London Interbank Offered Rate and the impact of any replacement alternatives such as the Secured Overnight Financing Rate on Origin’s business; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies and similar organizations; natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities (including the impacts related to or resulting from Russia's military action in Ukraine or the conflict in Israel and surrounding areas, including the imposition of additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments), regional or national protests and civil unrest (including any resulting branch closures or property damage), widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond Origin’s control; the impact of generative artificial intelligence; fraud or misconduct by internal or external actors, system failures, cybersecurity threats or security breaches and the cost of defending against them. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Origin’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any updates to those sections set forth in Origin’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin’s underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin’s behalf may issue. Annualized, pro forma, adjusted, projected, and estimated numbers are used for illustrative purposes only, are not forecasts, and may not reflect actual results.

Contact:

Investor Relations
Chris Reigelman
318-497-3177
chris@origin.bank

Media Contact
Ryan Kilpatrick
318-232-7472
rkilpatrick@origin.bank

Origin Bancorp, Inc. Selected Quarterly Financial Data (Unaudited)
	Three Months Ended
	September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022
Income statement and share amounts	(Dollars in thousands, except per share amounts)
Net interest income	$	74,130			$	75,291			$	77,147			$	84,749			$	78,523
Provision for credit losses		3,515				4,306				6,197				4,624				16,942
Noninterest income		18,119				15,636				16,384				13,429				13,723
Noninterest expense		58,663				58,887				56,760				57,254				56,241
Income before income tax expense		30,071				27,734				30,574				36,300				19,063
Income tax expense		5,758				5,974				6,272				6,822				2,820
Net income	$	24,313			$	21,760			$	24,302			$	29,478			$	16,243
Adjusted net income(1)	$	22,004			$	21,388			$	24,188			$	30,409			$	31,087
Adjusted PTPP earnings(1)		30,663				31,569				36,627				42,103				39,905
Basic earnings per common share		0.79				0.71				0.79				0.96				0.57
Diluted earnings per common share		0.79				0.70				0.79				0.95				0.57
Adjusted diluted earnings per common share(1)		0.71				0.69				0.78				0.99				1.09
Dividends declared per common share		0.15				0.15				0.15				0.15				0.15
Weighted average common shares outstanding - basic		30,856,649				30,791,397				30,742,902				30,674,389				28,298,984
Weighted average common shares outstanding - diluted		30,943,860				30,872,834				30,882,156				30,867,511				28,481,619
Balance sheet data
Total LHFI	$	7,568,063			$	7,622,689			$	7,375,823			$	7,090,022			$	6,882,681
Total assets		9,733,303				10,165,163				10,358,516				9,686,067				9,462,639
Total deposits		8,374,488				8,490,043				8,174,310				7,775,702				7,777,327
Total stockholders’ equity		998,945				997,859				992,587				949,943				907,024
Performance metrics and capital ratios
Yield on LHFI		6.35	%			6.18	%			6.03	%			5.63	%			4.94	%
Yield on interest-earnings assets		5.69				5.50				5.31				4.96				4.23
Cost of interest-bearing deposits		3.47				3.05				2.49				1.54				0.64
Cost of total deposits		2.61				2.26				1.75				1.02				0.41
NIM - fully tax equivalent ("FTE")		3.14				3.16				3.44				3.81				3.68
NIM - FTE, adjusted(2)		3.14				3.14				3.36				3.73				3.61
Return on average assets (annualized) ("ROAA")		0.96				0.86				1.01				1.23				0.70
Adjusted ROAA (annualized)(1)		0.87				0.84				1.00				1.27				1.34
Adjusted PTPP ROAA (annualized)(1)		1.21				1.24				1.52				1.75				1.72
Return on average stockholders’ equity (annualized) ("ROAE")		9.52				8.76				10.10				12.80				6.86
Adjusted ROAE (annualized)(1)		8.62				8.61				10.05				13.20				13.14
Adjusted PTPP ROAE (annualized)(1)		12.01				12.70				15.22				18.28				16.86
Book value per common share(3)	$	32.32			$	32.33			$	32.25			$	30.90			$	29.58
Tangible book value per common share (1)(3)		26.78				26.71				26.53				25.09				23.41
Adjusted tangible book value per common share(1)		32.37				31.66				31.03				30.29				29.13
Return on average tangible common equity (annualized) ("ROATCE")(1)		11.48	%			10.62	%			12.34	%			16.00	%			8.03	%
Adjusted return on average tangible common equity (annualized) ("adjusted ROATCE")(1)		10.39				10.44				12.29				16.50				15.38
Efficiency ratio(4)		63.59				64.76				60.69				58.32				60.97
Adjusted efficiency ratio(1)		62.71				61.17				58.64				53.06				52.16
Common equity tier 1 to risk-weighted assets(5)		11.45	%			11.01	%			11.08	%			10.93	%			10.51	%
Tier 1 capital to risk-weighted assets(5)		11.63				11.19				11.27				11.12				10.70
Total capital to risk-weighted assets(5)		14.60				14.11				14.30				14.23				13.79
Tier 1 leverage ratio(5)		10.00				9.65				9.79				9.66				9.63

__________________________
(1)	Adjusted net income, adjusted PTPP earnings, adjusted diluted earnings per common share, adjusted ROAA, adjusted PTPP ROAA, adjusted ROAE, adjusted PTPP ROAE, tangible book value per common share, adjusted tangible book value per common share, ROATCE, adjusted ROATCE and adjusted efficiency ratio are either non-GAAP financial measures or use a non-GAAP contributor in the formula. For a reconciliation of these alternative financial measures to their comparable GAAP measures, please see the last few pages of this release.
(2)	NIM - FTE, adjusted, is a non-GAAP financial measure and is calculated by removing the net purchase accounting accretion from the net interest income.
(3)	An increase in accumulated other comprehensive loss negatively impacted total stockholders' equity, tangible common equity, book value and tangible book value per common share primarily due to the movement of the short end of the yield curve and its impact on our investment portfolio.
(4)	Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
(5)	September 30, 2023, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board.

Origin Bancorp, Inc. Selected Year-to-Date Financial Data (Unaudited)
	Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)		2023				2022
Income statement and share amounts
Net interest income	$	226,568			$	190,529
Provision for credit losses		14,018				20,067
Noninterest income		50,139				43,845
Noninterest expense		174,310				143,165
Income before income tax expense		88,379				71,142
Income tax expense		18,004				12,905
Net income	$	70,375			$	58,237
Adjusted net income(1)	$	67,580			$	74,170
Adjusted PTPP earnings(1)		98,859				96,487
Basic earnings per common share		2.29				2.31
Diluted earnings per common share		2.28				2.30
Adjusted diluted earnings per common share(1)		2.19				2.92
Dividends declared per common share		0.45				0.43
Weighted average common shares outstanding - basic		30,797,399				25,263,681
Weighted average common shares outstanding - diluted		30,903,222				25,366,807
Performance metrics
Yield on LHFI		6.19	%			4.47	%
Yield on interest-earning assets		5.50				3.66
Cost of interest-bearing deposits		3.03				0.40
Cost of total deposits		2.22				0.27
NIM, FTE		3.24				3.28
NIM - FTE, adjusted(2)		3.21				3.25
ROAA		0.94				0.93
Adjusted ROAA(1)		0.90				1.18
Adjusted PTPP ROAA(1)		1.32				1.54
ROAE		9.45				10.02
Adjusted ROAE(1)		9.08				12.76
Adjusted PTPP ROAE(1)		13.28				16.60
ROATCE(1)		11.47				11.17
Adjusted ROATCE(1)		11.01				14.22
Efficiency ratio(3)		62.99				61.08
Adjusted efficiency ratio(1)		60.81				54.64

____________________________
(1)	Adjusted net income, adjusted PTPP earnings, adjusted diluted earnings per common share, adjusted ROAA, adjusted PTPP ROAA, adjusted ROAE, adjusted PTPP ROAE, ROATCE, adjusted ROATCE and adjusted efficiency ratio are either non-GAAP financial measures or use a non-GAAP contributor in the formula. For a reconciliation of these alternative financial measures to their comparable GAAP measures, please see the last few pages of this release.
(2)	NIM - FTE, adjusted, is a non-GAAP financial measure and is calculated by removing the net purchase accounting accretion from the net interest income.
(3)	Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.

 

Origin Bancorp, Inc. Consolidated Quarterly Statements of Income (Unaudited)
	Three Months Ended
	September 30, 2023				June 30, 2023				March 31, 2023			December 31, 2022				September 30, 2022
Interest and dividend income	(Dollars in thousands, except per share amounts)
Interest and fees on loans	$	121,204			$	115,442			$	106,496		$	99,178			$	79,803
Investment securities-taxable		8,194				8,303				8,161			7,765				7,801
Investment securities-nontaxable		1,281				1,283				1,410			2,128				2,151
Interest and dividend income on assets held in other financial institutions		4,772				7,286				4,074			2,225				1,482
Total interest and dividend income		135,451				132,314				120,141			111,296				91,237
Interest expense
Interest-bearing deposits		55,599				46,530				34,557			19,820				7,734
FHLB advances and other borrowings		3,207				7,951				5,880			4,208				2,717
Subordinated indebtedness		2,515				2,542				2,557			2,519				2,263
Total interest expense		61,321				57,023				42,994			26,547				12,714
Net interest income		74,130				75,291				77,147			84,749				78,523
Provision for credit losses		3,515				4,306				6,197			4,624				16,942
Net interest income after provision for credit losses		70,615				70,985				70,950			80,125				61,581
Noninterest income
Insurance commission and fee income		6,443				6,185				7,011			5,054				5,666
Service charges and fees		4,621				4,722				4,571			4,663				4,734
Mortgage banking revenue (loss)		892				1,402				1,781			1,201				(929	)
Other fee income		944				970				942			1,132				1,162
Swap fee income		366				331				384			292				25
(Loss) gain on sales of securities, net		(7,173	)			—				144			—				1,664
Limited partnership investment (loss) income		(425	)			231				66			(230	)			112
Gain (loss) on sales and disposals of other assets, net		45				(111	)			63			34				70
Other income		12,406				1,906				1,422			1,283				1,219
Total noninterest income		18,119				15,636				16,384			13,429				13,723
Noninterest expense
Salaries and employee benefits		34,624				34,533				33,731			33,339				31,834
Occupancy and equipment, net		6,790				6,578				6,503			5,863				5,399
Data processing		2,775				2,837				2,916			2,868				2,689
Intangible asset amortization		2,264				2,552				2,553			2,554				1,872
Office and operations		2,868				2,716				2,303			2,277				2,121
Professional services		1,409				1,557				1,525			1,145				1,188
Loan-related expenses		1,220				1,256				1,465			1,676				1,599
Advertising and marketing		1,371				1,469				1,456			1,505				1,196
Electronic banking		1,384				1,216				1,009			1,058				1,087
Franchise tax expense		520				897				975			1,017				957
Regulatory assessments		1,913				1,732				951			1,242				877
Communications		390				407				384			434				279
Merger-related expense		—				—				—			1,179				3,614
Other expenses		1,135				1,137				989			1,097				1,529
Total noninterest expense		58,663				58,887				56,760			57,254				56,241
Income before income tax expense		30,071				27,734				30,574			36,300				19,063
Income tax expense		5,758				5,974				6,272			6,822				2,820
Net income	$	24,313			$	21,760			$	24,302		$	29,478			$	16,243
Basic earnings per common share	$	0.79			$	0.71			$	0.79		$	0.96			$	0.57
Diluted earnings per common share		0.79				0.70				0.79			0.95				0.57

Origin Bancorp, Inc. Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)	September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022
Assets
Cash and due from banks	$	141,705			$	127,576			$	117,309			$	150,180			$	118,505
Interest-bearing deposits in banks		163,573				338,414				707,802				208,792				181,965
Total cash and cash equivalents		305,278				465,990				825,111				358,972				300,470
Securities:
AFS		1,290,839				1,535,702				1,591,334				1,641,484				1,672,170
Held to maturity, net of allowance for credit losses		10,790				11,234				11,191				11,275				11,285
Securities carried at fair value through income		6,772				6,106				6,413				6,368				6,347
Total securities		1,308,401				1,553,042				1,608,938				1,659,127				1,689,802
Non-marketable equity securities held in other financial institutions		63,842				58,446				77,036				67,378				53,899
Loans held for sale		14,944				15,198				29,143				49,957				59,714
Loans		7,568,063				7,622,689				7,375,823				7,090,022				6,882,681
Less: ALCL		95,177				94,353				92,008				87,161				83,359
Loans, net of ALCL		7,472,886				7,528,336				7,283,815				7,002,861				6,799,322
Premises and equipment, net		111,700				105,501				104,047				100,201				99,291
Mortgage servicing rights		19,189				19,086				18,261				20,824				21,654
Cash surrender value of bank-owned life insurance		39,688				39,467				39,253				39,040				38,885
Goodwill		128,679				128,679				128,679				128,679				136,793
Other intangible assets, net		42,460				44,724				47,277				49,829				52,384
Accrued interest receivable and other assets		226,236				206,694				196,956				209,199				210,425
Total assets	$	9,733,303			$	10,165,163			$	10,358,516			$	9,686,067			$	9,462,639
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits	$	2,008,671			$	2,123,699			$	2,247,782			$	2,482,475			$	2,667,489
Interest-bearing deposits		4,728,263				4,738,460				4,779,023				4,505,940				4,361,423
Time deposits		1,637,554				1,627,884				1,147,505				787,287				748,415
Total deposits		8,374,488				8,490,043				8,174,310				7,775,702				7,777,327
FHLB advances and other borrowings		12,213				342,861				875,502				639,230				450,456
Subordinated indebtedness		196,825				196,746				201,845				201,765				201,687
Accrued expenses and other liabilities		150,832				137,654				114,272				119,427				126,145
Total liabilities		8,734,358				9,167,304				9,365,929				8,736,124				8,555,615
Stockholders’ equity:
Common stock		154,534				154,331				153,904				153,733				153,309
Additional paid-in capital		525,434				524,302				522,124				520,669				518,376
Retained earnings		491,706				472,105				455,040				435,416				410,572
Accumulated other comprehensive loss		(172,729	)			(152,879	)			(138,481	)			(159,875	)			(175,233	)
Total stockholders’ equity		998,945				997,859				992,587				949,943				907,024
Total liabilities and stockholders’ equity	$	9,733,303			$	10,165,163			$	10,358,516			$	9,686,067			$	9,462,639

Origin Bancorp, Inc. Loan Data (Unaudited)
	At and For the Three Months Ended
	September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022
LHFI	(Dollars in thousands)
Owner occupied commercial real estate	$	932,109			$	915,861			$	855,887			$	843,006			$	800,981
Non-owner occupied commercial real estate		1,503,782				1,512,303				1,529,513				1,461,672				1,373,366
Owner occupied construction/land/land development		252,168				259,984				252,617				265,838				248,602
Non-owner occupied construction/land/land development		824,588				762,255				696,009				679,787				604,709
Residential real estate - single family		1,338,382				1,284,955				1,231,022				1,173,316				1,104,277
Residential real estate - multi-family		349,787				348,703				357,469				304,222				294,905
Total real estate loans		5,200,816				5,084,061				4,922,517				4,727,841				4,426,840
Commercial and industrial		2,058,073				1,977,028				2,091,093				2,051,161				1,967,037
Mortgage warehouse lines of credit		286,293				537,627				337,529				284,867				460,573
Consumer		22,881				23,973				24,684				26,153				28,231
Total LHFI		7,568,063				7,622,689				7,375,823				7,090,022				6,882,681
Less: allowance for loan credit losses ("ALCL")		95,177				94,353				92,008				87,161				83,359
LHFI, net	$	7,472,886			$	7,528,336			$	7,283,815			$	7,002,861			$	6,799,322
Nonperforming assets
Nonperforming LHFI
Commercial real estate	$	942			$	3,510			$	3,100			$	526			$	431
Construction/land/land development		235				183				226				270				366
Residential real estate		13,236				16,345				8,969				7,712				7,641
Commercial and industrial		17,072				13,480				4,730				1,383				5,134
Mortgage warehouse lines of credit		—				—				—				—				385
Consumer		123				91				53				49				74
Total nonperforming LHFI		31,608				33,609				17,078				9,940				14,031
Nonperforming loans held for sale		—				—				4,646				3,933				2,698
Total nonperforming loans		31,608				33,609				21,724				13,873				16,729
Repossessed assets		3,939				908				806				806				1,781
Total nonperforming assets	$	35,547			$	34,517			$	22,530			$	14,679			$	18,510
Classified assets	$	67,960			$	85,206			$	86,975			$	75,009			$	71,562
Past due LHFI(1)		20,347				19,836				11,498				10,932				10,866
Allowance for loan credit losses
Balance at beginning of period	$	94,353			$	92,008			$	87,161			$	83,359			$	63,123
Provision for loan credit losses		3,510				4,264				6,158				3,982				15,787
ALCL - BTH merger		—				—				—				—				5,527
Loans charged off		3,202				2,751				2,293				2,537				1,628
Loan recoveries		516				832				982				2,357				550
Net charge-offs		2,686				1,919				1,311				180				1,078
Balance at end of period	$	95,177			$	94,353			$	92,008			$	87,161			$	83,359
Credit quality ratios
Total nonperforming assets to total assets		0.37	%			0.34	%			0.22	%			0.15	%			0.20	%
Total nonperforming loans to total loans		0.42				0.44				0.29				0.19				0.24
Nonperforming LHFI to LHFI		0.42				0.44				0.23				0.14				0.20
Past due LHFI to LHFI		0.27				0.26				0.16				0.15				0.16
ALCL to nonperforming LHFI		301.12				280.74				538.75				876.87				594.11
ALCL to total LHFI		1.26				1.24				1.25				1.23				1.21
ALCL to total LHFI, adjusted(2)		1.30				1.32				1.30				1.28				1.29
Net charge-offs to total average LHFI (annualized)		0.14				0.10				0.07				0.01				0.07

____________________________
(1)	Past due LHFI are defined as loans 30 days or more past due.
(2)	The ALCL to total LHFI, adjusted is calculated by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the warehouse loans from the LHFI in the denominator. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the ALCL.

Origin Bancorp, Inc. Average Balances and Yields/Rates (Unaudited)
	Three Months Ended
	September 30, 2023						June 30, 2023						September 30, 2022
	Average Balance			Yield/Rate			Average Balance			Yield/Rate			Average Balance			Yield/Rate
Assets	(Dollars in thousands)
Commercial real estate	$	2,428,969		5.73	%		$	2,406,625		5.56	%		$	2,046,411		4.64	%
Construction/land/land development		1,044,180		7.04				972,032		6.70				760,682		5.20
Residential real estate		1,663,291		5.06				1,615,211		4.91				1,249,746		4.36
Commercial and industrial ("C&I")		2,024,675		7.62				2,059,285		7.59				1,816,912		5.64
Mortgage warehouse lines of credit		376,275		7.21				396,348		6.49				491,584		4.53
Consumer		23,704		7.74				24,812		7.26				24,137		6.80
LHFI		7,561,094		6.35				7,474,313		6.18				6,389,472		4.94
Loans held for sale		11,829		5.81				22,504		4.28				29,927		4.12
Loans receivable		7,572,923		6.35				7,496,817		6.18				6,419,399		4.93
Investment securities-taxable		1,310,459		2.48				1,371,361		2.43				1,547,848		2.00
Investment securities-nontaxable		216,700		2.35				220,345		2.33				317,175		2.69
Non-marketable equity securities held in other financial institutions		58,421		6.47				79,143		5.92				73,819		2.10
Interest-bearing balances due from banks		279,383		5.42				476,555		5.15				206,781		2.09
Total interest-earning assets		9,437,886		5.69				9,644,221		5.50				8,565,022		4.23
Noninterest-earning assets(1)		597,678						546,135						637,399
Total assets	$	10,035,564					$	10,190,356					$	9,202,421
Liabilities and Stockholders’ Equity
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts	$	4,728,211		3.28	%		$	4,740,963		2.90	%		$	4,157,092		0.66	%
Time deposits		1,626,935		4.04				1,378,659		3.56				669,900		0.51
Total interest-bearing deposits		6,355,146		3.47				6,119,622		3.05				4,826,992		0.64
FHLB advances and other borrowings		230,815		5.51				606,148		5.26				538,020		2.00
Subordinated indebtedness		196,792		5.07				200,160		5.09				186,803		4.81
Total interest-bearing liabilities		6,782,753		3.59				6,925,930		3.30				5,551,815		0.91
Noninterest-bearing liabilities
Noninterest-bearing deposits		2,088,183						2,139,973						2,582,500
Other liabilities(1)		151,716						127,630						129,354
Total liabilities		9,022,652						9,193,533						8,263,669
Stockholders’ Equity		1,012,912						996,823						938,752
Total liabilities and stockholders’ equity	$	10,035,564					$	10,190,356					$	9,202,421
Net interest spread				2.10	%					2.20	%					3.32	%
NIM				3.12						3.13						3.64
NIM - FTE(2)				3.14						3.16						3.68
NIM - FTE, adjusted(3)				3.14						3.14						3.61

____________________________
(1)	Includes Government National Mortgage Association (“GNMA”) repurchase average balances of $29.1 million for the three months ended September 30, 2022. There were no GNMA average repurchase balances at either September 30, 2023, or June 30, 2023. The GNMA repurchase asset and liability are recorded as equal offsetting amounts in the consolidated balance sheets, with the asset included in Loans held for sale and the liability included in FHLB advances and other borrowings. During the quarter ended December 31, 2022, the Company entered into a contract to sell the servicing of these GNMA loans to a third party which closed during the quarter ended March 31, 2023.
(2)	In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds.
(3)	NIM - FTE, adjusted, is calculated by removing the net purchase accounting accretion from the net interest income.

 

Origin Bancorp, Inc. Non-GAAP Financial Measures (Unaudited)
	At and For the Three Months Ended
	September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022
	(Dollars in thousands, except per share amounts)
Calculation of adjusted net income:
Net interest income after provision for credit losses	$	70,615			$	70,985			$	70,950			$	80,125			$	61,581
Add: CECL provision for non-PCD loans		—				—				—				—				14,890
Adjusted net interest income after provision for credit losses		70,615				70,985				70,950				80,125				76,471
Total noninterest income	$	18,119			$	15,636			$	16,384			$	13,429			$	13,723
Less: GNMA MSR impairment		—				—				—				—				(1,950	)
Less: (loss) gain on sales of securities, net		(7,173	)			—				144				—				1,664
Less: gain on sub-debt repurchase		—				471				—				—				—
Less: positive valuation adjustment on non-marketable equity securities		10,096				—				—				—				—
Adjusted total noninterest income		15,196				15,165				16,240				13,429				14,009
Total noninterest expense	$	58,663			$	58,887			$	56,760			$	57,254			$	56,241
Less: merger-related expenses		—				—				—				1,179				3,614
Adjusted total noninterest expense		58,663				58,887				56,760				56,075				52,627
Income tax expense	$	5,758			$	5,974			$	6,272			$	6,822			$	2,820
Add: income tax expense on adjustment items		(614	)			(99	)			(30	)			248				3,946
Adjusted income tax expense		5,144				5,875				6,242				7,070				6,766
Net income	$	24,313			$	21,760			$	24,302			$	29,478			$	16,243
Adjusted net income	$	22,004			$	21,388			$	24,188			$	30,409			$	31,087
Calculation of adjusted PTPP earnings:
Provision for credit losses	$	3,515			$	4,306			$	6,197			$	4,624			$	16,942
Less: CECL provision for non-PCD loans		—				—				—				—				14,890
Adjusted provision for credit losses	$	3,515			$	4,306			$	6,197			$	4,624			$	2,052
Adjusted net income	$	22,004			$	21,388			$	24,188			$	30,409			$	31,087
Add: adjusted provision for credit losses		3,515				4,306				6,197				4,624				2,052
Add: adjusted income tax expense		5,144				5,875				6,242				7,070				6,766
Adjusted PTPP Earnings	$	30,663			$	31,569			$	36,627			$	42,103			$	39,905
Calculation of adjusted dilutive EPS:
Numerator:
Adjusted net income	$	22,004			$	21,388			$	24,188			$	30,409			$	31,087
Denominator:
Weighted average diluted common shares outstanding		30,943,860				30,872,834				30,882,156				30,867,511				28,481,619
Diluted earnings per share	$	0.79			$	0.70			$	0.79			$	0.95			$	0.57
Adjusted diluted earnings per share		0.71				0.69				0.78				0.99				1.09
Calculation of adjusted ROAA and adjusted ROAE:
Adjusted net income	$	22,004			$	21,388			$	24,188			$	30,409			$	31,087
Divided by number of days in the quarter		92				91				90				92				92
Multiplied by number of days in the year		365				365				365				365				365
Annualized adjusted net income	$	87,298			$	85,787			$	98,096			$	120,644			$	123,334
Divided by total average assets		10,035,564				10,190,356				9,783,602				9,530,543				9,202,421
ROAA (annualized)		0.96	%			0.86	%			1.01	%			1.23	%			0.70	%
Adjusted ROAA (annualized)		0.87				0.84				1.00				1.27				1.34
Divided by total average stockholders' equity	$	1,012,912			$	996,823			$	976,044			$	913,850			$	938,752
ROAE (annualized)		9.52	%			8.76	%			10.10	%			12.80	%			6.86	%
Adjusted ROAE (annualized)		8.62				8.61				10.05				13.20				13.14
Calculation of adjusted PTPP ROAA and adjusted PTPP ROAE:
Adjusted PTPP earnings	$	30,663			$	31,569			$	36,627			$	42,103			$	39,905
Divided by number of days in the quarter		92				91				90				92				92
Multiplied by the number of days in the year		365				365				365				365				365
Adjusted PTPP earnings, annualized	$	121,652			$	126,623			$	148,543			$	167,039			$	158,319
Divided by total average assets	$	10,035,564			$	10,190,356			$	9,783,602			$	9,530,543			$	9,202,421
Adjusted PTPP ROAA(annualized)		1.21	%			1.24	%			1.52	%			1.75	%			1.72	%
Divided by total average stockholders' equity	$	1,012,912			$	996,823			$	976,044			$	913,850			$	938,752
Adjusted PTPP ROAE (annualized)		12.01	%			12.70	%			15.22	%			18.28	%			16.86	%
Calculation of tangible common equity to tangible common assets, book value per common share and adjusted tangible book value per common share:
Total assets	$	9,733,303			$	10,165,163			$	10,358,516			$	9,686,067			$	9,462,639
Less: goodwill		128,679				128,679				128,679				128,679				136,793
Less: other intangible assets, net		42,460				44,724				47,277				49,829				52,384
Tangible assets		9,562,164				9,991,760				10,182,560				9,507,559				9,273,462
Total common stockholders’ equity	$	998,945			$	997,859			$	992,587			$	949,943			$	907,024
Less: goodwill		128,679				128,679				128,679				128,679				136,793
Less: other intangible assets, net		42,460				44,724				47,277				49,829				52,384
Tangible common equity		827,806				824,456				816,631				771,435				717,847
Less: accumulated other comprehensive loss		(172,729	)			(152,879	)			(138,481	)			(159,875	)			(175,233	)
Adjusted tangible common equity		1,000,535				977,335				955,112				931,310				893,080
Divided by common shares outstanding at the end of the period		30,906,716				30,866,205				30,780,853				30,746,600				30,661,734
Book value per common share	$	32.32			$	32.33			$	32.25			$	30.90			$	29.58
Tangible book value per common share		26.78				26.71				26.53				25.09				23.41
Adjusted tangible book value per common share		32.37				31.66				31.03				30.29				29.13
Tangible common equity to tangible assets		8.66	%			8.25	%			8.02	%			8.11	%			7.74	%
Calculation of ROATCE and adjusted ROATCE:
Net income	$	24,313			$	21,760			$	24,302			$	29,478			$	16,243
Divided by number of days in the quarter		92				91				90				92				92
Multiplied by number of days in the year		365				365				365				365				365
Annualized net income	$	96,459			$	87,279			$	98,558			$	116,951			$	64,442
Adjusted net income	$	22,004			$	21,388			$	24,188			$	30,409			$	31,087
Divided by number of days in the quarter		92				91				90				92				92
Multiplied by number of days in the year		365				365				365				365				365
Annualized adjusted net income	$	87,298			$	85,787			$	98,096			$	120,644			$	123,334
Total average common stockholders’ equity	$	1,012,912			$	996,823			$	976,044			$	913,850			$	938,752
Less: average goodwill		128,679				128,679				128,679				131,302				95,696
Less: average other intangible assets, net		43,901				46,379				48,950				51,495				40,918
Average tangible common equity		840,332				821,765				798,415				731,053				802,138
ROATCE		11.48	%			10.62	%			12.34	%			16.00	%			8.03	%
Adjusted ROATCE		10.39				10.44				12.29				16.50				15.38
Calculation of adjusted efficiency ratio:
Total noninterest expense	$	58,663			$	58,887			$	56,760			$	57,254			$	56,241
Less: insurance and mortgage noninterest expense		8,579				9,156				8,033				8,031				8,479
Less: merger-related expenses		—				—				—				1,179				3,614
Adjusted total noninterest expense		50,084				49,731				48,727				48,044				44,148
Net interest income	$	74,130			$	75,291			$	77,147			$	84,749			$	78,523
Less: insurance and mortgage net interest income		2,120				1,574				1,493				1,376				1,208
Add: Total noninterest income		18,119				15,636				16,384				13,429				13,723
Less: insurance and mortgage noninterest income		7,335				7,587				8,792				6,255				4,737
Less: positive valuation adjustment on non-marketable equity securities		10,096				—				—				—				—
Less: (loss) gain on sale of securities, net		(7,173	)			—				144				—				1,664
Less: gain on sub-debt repurchase		—				471				—				—				—
Adjusted total revenue		79,871				81,295				83,102				90,547				84,637
Efficiency ratio		63.59	%			64.76	%			60.69	%			58.32	%			60.97	%
Adjusted efficiency ratio		62.71				61.17				58.64				53.06				52.16

Origin Bancorp, Inc. Non-GAAP Financial Measures - Continued (Unaudited)
	Nine Months Ended September 30,
		2023				2022
	(Dollars in thousands, except per share amounts)
Calculation of adjusted net income:
Net interest income after provision for credit losses	$	212,550			$	170,462
Add: CECL provision for non-PCD loans		—				14,890
Adjusted net interest income after provision for credit losses		212,550				185,352
Total noninterest income	$	50,139			$	43,845
Less: GNMA MSR impairment		—				(1,950	)
Less: (loss) gain on sales of securities, net		(7,029	)			1,664
Less: gain on sub-debt repurchase		471				—
Less: positive valuation adjustment on non-marketable equity securities		10,096				—
Adjusted total noninterest income		46,601				44,131
Total noninterest expense	$	174,310			$	143,165
Less: merger-related expense		—				4,992
Adjusted total noninterest expense		174,310				138,173
Income tax expense	$	18,004			$	12,905
Add: income tax expense on adjustment items		(743	)			4,235
Adjusted income tax expense		17,261				17,140
Net Income	$	70,375			$	58,237
Adjusted net income	$	67,580			$	74,170
Calculation of adjusted PTPP earnings:
Provision for credit losses	$	14,018			$	20,067
Less: CECL provision for non-PCD loans		—				14,890
Adjusted provision for credit losses	$	14,018			$	5,177
Adjusted net income	$	67,580			$	74,170
Add: provision for credit losses		14,018				5,177
Add: adjusted income tax expense		17,261				17,140
Adjusted PTPP earnings	$	98,859			$	96,487
Calculation of adjusted dilutive EPS:
Numerator:
Adjusted net income	$	67,580			$	74,170
Denominator:
Weighted average diluted common shares outstanding		30,903,222				25,366,807
Diluted earnings per share	$	2.28			$	2.30
Adjusted diluted earnings per share		2.19				2.92
Calculation of adjusted ROAA and adjusted ROAE:
Adjusted net income	$	67,580			$	74,170
Divided by the year-to-date number of days		273				273
Multiplied by number of days in the year		365				365
Annualized adjusted net income	$	90,354			$	99,165
Divided by total average assets	$	10,004,097			$	8,401,701
ROAA (annualized)		0.94	%			0.93	%
Adjusted ROAA (annualized)		0.90				1.18
Divided by total average stockholders' equity	$	995,395			$	776,985
ROAE (annualized)		9.45	%			10.02	%
Adjusted ROAE (annualized)		9.08				12.76
Calculation of adjusted PTPP ROAA and adjusted PTPP ROAE:
Adjusted PTPP Earnings	$	98,859			$	96,487
Divided by the year-to-date number of days		273				273
Multiplied by number of days in the year		365				365
Annualized adjusted PTPP Earnings	$	132,174			$	129,003
Divided by total average assets	$	10,004,097			$	8,401,701
Adjusted PTPP ROAA (annualized)		1.32	%			1.54	%
Divided by total average stockholders' equity	$	995,395			$	776,985
Adjusted PTPP ROAE (annualized)		13.28	%			16.60	%
Calculation of ROATCE and adjusted ROATCE:
Net income	$	70,375			$	58,237
Divided by the year-to-date number of days		273				273
Multiplied by number of days in the year		365				365
Annualized net income	$	94,091			$	77,863
Adjusted net income	$	67,580			$	74,170
Divided by the year-to-date number of days		273				273
Multiplied by number of days in the year		365				365
Annualized adjusted net income	$	90,354			$	99,165
Total average common stockholders’ equity	$	995,395			$	776,985
Less: average goodwill		128,679				54,963
Less: average other intangible assets, net		46,391				24,733
Average tangible common equity		820,325				697,289
ROATCE		11.47	%			11.17	%
Adjusted ROATCE		11.01				14.22
Calculation of adjusted efficiency ratio:
Total noninterest expense	$	174,310			$	143,165
Less: insurance and mortgage noninterest expense		25,768				25,502
Less: merger-related expenses		—				4,992
Adjusted total noninterest expense		148,542				112,671
Net interest income	$	226,568			$	190,529
Less: insurance and mortgage net interest income		5,187				3,165
Add: total noninterest income		50,139				43,845
Less: insurance and mortgage noninterest income		23,714				23,336
Less: (loss) gain on sales of securities, net		(7,029	)			1,664
Less: gain on sub-debt repurchase		471				—
Less: positive valuation adjustment on non-marketable equity securities		10,096				—
Adjusted total revenue		244,268				206,209
Efficiency ratio		62.99	%			61.08	%
Adjusted efficiency ratio		60.81				54.64

Source: Origin Bancorp, Inc.