UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 24, 2019
ORIGIN BANCORP, INC.
(Exact name of Registrant as specified in its charter)
Louisiana | 001-38487 | 72-1192928 | ||
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) | ||
500 South Service Road East, Ruston, Louisiana | 71270 | |||
(Address of principal executive offices) | (Zip Code) | |||
Registrant's telephone number, including area code: (318) 255-2222 | ||||
Not Applicable | ||||
(Former name or former address, if changed since last report) | ||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14A-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $5.00 per share | OBNK | Nasdaq Global Select Market | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
Emerging growth company ☒ | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒ | |
ITEM 2.02 | Results of Operations and Financial Condition |
On July 24, 2019, Origin Bancorp, Inc. (the "Registrant") issued a press release announcing its second quarter 2019 results of operations. A copy of the press release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.
On Thursday, July 25, 2019, at 8:00 a.m. Central Time, the Registrant will host an investor conference call and webcast to review its second quarter 2019 financial results. The webcast will include presentation materials which consist of information regarding the Registrant's operating and growth strategies and financial performance. The presentation materials will be posted on the Registrant's website on July 24, 2019. The presentation materials are attached hereto as Exhibit 99.2, which is incorporated herein by reference.
As provided in General Instructions B.2 to Form 8-K, the information furnished in Item 2.02, Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 8.01 | Other Events |
Quarterly Cash Dividend
On July 24, 2019, the Registrant issued a press release announcing that the Board of Directors of the Registrant declared a quarterly cash dividend of $0.0925 per share of common stock. The cash dividend will be paid on August 30, 2019, to stockholders of record as of the close of business on August 16, 2019. The press release is attached to this report as Exhibit 99.3, which is incorporated herein by reference.
Initiation of Stock Buyback Program
The Board of Directors of the Registrant authorized a stock buyback program pursuant to which the Registrant may, from time to time, purchase up to $40 million of its outstanding common stock. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the Securities and Exchange Commission. The stock buyback program is intended to expire in three years but may be terminated or amended by the Board of Directors at any time. The stock buyback program does not obligate the Registrant to purchase any shares at any time.
ITEM 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. |
Exhibit 99.1 | |
Exhibit 99.2 | |
Exhibit 99.3 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: July 24, 2019 | ORIGIN BANCORP, INC. | |
By: /s/ Stephen H. Brolly | ||
Stephen H. Brolly | ||
Chief Financial Officer | ||
Exhibit 99.1
For Immediate Release
ORIGIN BANCORP, INC. REPORTS EARNINGS FOR SECOND QUARTER 2019
RUSTON, Louisiana (July 24, 2019) - Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $12.3 million for the quarter ended June 30, 2019. This represents a decrease of $1.9 million from the quarter ended March 31, 2019, and a decrease of $419,000 from the quarter ended June 30, 2018. Diluted earnings per share for the quarter ended June 30, 2019, was $0.52, down $0.08 from the linked quarter and down $0.01 from the quarter ended June 30, 2018.
"We are pleased to report solid second quarter results which include double digit loan growth year over year, while maintaining sound credit quality, evidenced by stable nonperforming assets and low charge-offs in our loan portfolio," said Drake Mills, Chairman, President and CEO of Origin Bancorp, Inc. "Our team continues to execute on our strategies to drive loan and deposit growth, develop trusted relationships and leverage operational efficiencies. As we look forward to the remainder of 2019, we believe a strong loan pipeline and our strategy to attract low cost deposits helps position us for success."
Second Quarter 2019 Summary
• | Net interest income reached a historical quarterly high of $43.0 million for the quarter ended June 30, 2019, compared to $42.0 million for the quarter ended March 31, 2019, and $37.2 million for the quarter ended June 30, 2018. |
• | Net income was $12.3 million for the quarter ended June 30, 2019 compared to $14.2 million for the linked quarter and $12.7 million for the quarter ended June 30, 2018. |
• | Total loans held for investment were $3.98 billion, an increase of $146.3 million, or 3.8%, from March 31, 2019, and an increase of $612.5 million, or 18.2%, from June 30, 2018. The yield earned on total loans held for investment during the quarter ended June 30, 2019, was 5.29%, compared to 5.28% for the linked quarter and 4.89% for the quarter ended June 30, 2018. |
• | Noninterest-bearing deposits increased by $25.6 million, or 2.6%, compared to the linked quarter, and increased by $53.4 million, or 5.6%, from June 30, 2018. Total deposits decreased by $43.2 million, or 1.1%, from March 31, 2019, primarily related to the strategic decision to replace certain brokered deposits with FHLB advances, and increased by $182.9 million, or 5.0%, from June 30, 2018. The average rate paid on interest-bearing deposits was 1.61% compared to 1.48% for the linked quarter and 1.01% for the quarter ended June 30, 2018. |
• | Nonperforming loans held for investment to total loans held for investment was 0.76% at June 30, 2019, compared to 0.79% at both March 31, 2019, and June 30, 2018. |
• | The Company opened two full service branches on April 1, 2019, and July 1, 2019. |
• | The board of directors of the Company authorized a $40 million stock buyback program. |
• | The Company increased its quarterly cash dividend by $0.06, from $0.0325 to $0.0925, payable in August 2019. |
Results of Operations for the Three Months Ended June 30, 2019
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended June 30, 2019, was $43.0 million, reflecting an increase of $943,000, or 2.2%, compared to the linked quarter. The increase was largely driven by increases in the average balance of loans held for investment and partially by the fact that the second quarter of 2019 had 91 days in the period compared to 90 days in the linked
1
quarter. Interest-bearing deposit expense increased by $1.0 million compared to the quarter ended March 31, 2019, driven primarily by increases in rates on interest-bearing deposits. Average noninterest-bearing deposits increased by $45.5 million, or 4.7%, compared to the linked quarter and average interest-bearing deposits increased by $11.4 million, or 0.4%, compared to March 31, 2019.
The fully tax-equivalent net interest margin ("NIM") was 3.70% for the second quarter of 2019, a ten basis point decrease from the first quarter of 2019 and a four basis point decrease from the second quarter of 2018. The net interest spread was reduced by 14 basis points and 19 basis points, respectively, when compared to the three months ended March 31, 2019, and the three months ended June 30, 2018, primarily due to deposit pricing pressures, increases in Federal Home Loan Bank ("FHLB") borrowings and higher interest-bearing balances due from banks. The rate paid on total interest-bearing liabilities for the quarter ended June 30, 2019, was 1.68%, representing an increase of 13 basis points and 61 basis points compared to the linked quarter and the quarter ended June 30, 2018, respectively. The yield earned on interest-earning assets decreased one basis point and increased 42 basis points compared to the linked quarter and the quarter ended June 30, 2018, respectively. Our increase in interest-bearing balances due from banks was $41.4 million at June 30, 2019, or a 33.5% increase from March 31, 2019. Had we invested these funds in higher yielding assets, such as loans held for investment, we estimate that our NIM would have been approximately three basis points higher than currently reported.
Noninterest Income
Noninterest income for the quarter ended June 30, 2019, was $11.2 million, a decrease of $428,000, or 3.7%, from the linked quarter. The decrease in noninterest income over the linked quarter was primarily driven by decreases of $634,000 and $474,000 in other income and insurance commission and fee income, respectively. These decreases were partially offset by a $646,000 increase in mortgage banking revenue.
The decrease in other income was largely driven by a decrease in the fair value of a non-marketable equity investment. The decrease in insurance commission and fee income was primarily driven by seasonal fluctuations as contingency income and renewal income typically experience a seasonal increase during the first quarter of each year. The increase in mortgage banking revenue compared to the linked quarter was primarily driven by increased volume in mortgage loan fundings, sales and growth in our mortgage pipeline.
Noninterest Expense
Noninterest expense for the quarter ended June 30, 2019, was $37.1 million, an increase of $1.7 million, or 4.8%, compared to the linked quarter. The increase over the linked quarter included increases of $368,000, $291,000, $225,000, and $223,000, in office and operations, advertising and marketing, other expense, and data processing expense, respectively. The increase in office and operations expense was primarily driven by a $223,000 increase in seasonal business development expenses. The increase in advertising and marketing expense was primarily due to promotions of our recently opened banking centers and the launch of a marketing campaign to promote a new deposit product. The increase in other expense was driven by expenditures that were not individually significant. The increase in data processing expense from the linked quarter was largely driven by system conversion costs and amortization expense incurred with the implementation of new lending software in the second quarter of 2019 which had been in process since the middle of 2018.
Financial Condition
Loans
Total loans held for investment at June 30, 2019, were $3.98 billion, an increase of $146.3 million, or 3.8%, compared to $3.84 billion at March 31, 2019, and an increase of $612.5 million, or 18.2%, compared to $3.37 billion at June 30, 2018.
For the quarter ended June 30, 2019, average loans held for investment were $3.89 billion, an increase of $128.4 million, or 3.4%, from $3.76 billion for the linked quarter. The quarter over quarter change primarily reflected increases of $56.1 million in mortgage warehouse loans driven by seasonality and higher refinancings during the period and $47.9 million in construction/land/land development loans reflecting increased funding for existing projects.
Deposits
Total deposits at June 30, 2019, were $3.86 billion, a decrease of $43.2 million, or 1.1%, compared to $3.90 billion at March 31, 2019, and an increase of $182.9 million, or 5.0%, compared to $3.67 billion, at June 30, 2018. The decrease in total deposits was primarily due to a strategic funding decision to replace certain brokered deposits with lower rate short-term advances from the FHLB. Absent our strategic decision to replace brokered deposits with short-term FHLB advances, total deposit growth would have been $143.8 million, or 3.7%, compared to March 31, 2019.
2
Average total deposits for the quarter ended June 30, 2019, increased by $56.9 million, or 1.5%, over the linked quarter, led by increases of $97.3 million, $43.0 million and $30.0 million in average money market business deposits, average noninterest-bearing business deposits and average money market consumer deposits, respectively. These increases were partially offset by declines of $85.5 million and $49.9 million in average brokered deposits as mentioned above and the seasonality of interest-bearing public fund deposits, respectively.
For the quarter ended June 30, 2019, average noninterest-bearing deposits as a percentage of total average deposits was 26.1%, compared to 25.3% for the quarter ended March 31, 2019, and 25.8% for the quarter ended June 30, 2018. The increase in noninterest-bearing deposits as a percentage of total deposits compared to the linked quarter was primarily driven by the reallocation of certain brokered deposits to short-term FHLB advances.
Borrowings
Average borrowings for the quarter ended June 30, 2019, increased by $100.3 million, or 29.8%, over the quarter ended March 31, 2019, and increased by $361.0 million over the quarter ended June 30, 2018. As discussed above, the increase in average borrowings in the second quarter of 2019 compared to the linked quarter was driven primarily by short-term FHLB advances totaling $270.0 million due to a strategic funding decision to replace certain brokered deposits with lower rate short-term advances from the FHLB.
Stockholders' Equity
Stockholders' equity was $584.3 million at June 30, 2019, compared to $568.1 million and $519.4 million at March 31, 2019, and June 30, 2018, respectively. Net income of $12.3 million and other comprehensive income of $4.1 million for the three months ended June 30, 2019, were the primary drivers of the increase in stockholders' equity compared to March 31, 2019.
Credit Quality
The Company recorded provision expense of $2.0 million for the quarter ended June 30, 2019, compared to provision expense of $1.0 million for the linked quarter and $311,000 for the quarter ended June 30, 2018. The increase in provision expense from the linked quarter was primarily due to loan growth of $146.3 million, or 3.8%, during the three months ended June 30, 2019, and to a lesser extent, net recoveries in the linked quarter, which offset the amount of provision expense needed to establish the allowance for loan losses at March 31, 2019. During the quarter ended June 30, 2019, we had net charge offs of $677,000 compared to net recoveries of $552,000 for the linked quarter. Total nonperforming loans held for investment were $30.5 million at June 30, 2019, compared to $30.3 million and $26.8 million at March 31, 2019 and June 30, 2018, respectively.
Allowance for loan losses as a percentage of total loans held for investment was 0.92% at June 30, 2019, compared to 0.93% and 1.01% at March 31, 2019, and June 30, 2018, respectively. Allowance for loan losses as a percentage of nonperforming loans held for investment was 120.36% at June 30, 2019, compared to 117.59% and 127.46% at March 31, 2019, and June 30, 2018, respectively.
Total past due loans held for investment, defined as loans 30 days past due or more, decreased by $6.0 million, or 15.7%, compared to the linked quarter. Commercial and industrial and residential real estate loans had the most significant improvements, reflecting decreases of $3.9 million and $1.2 million, respectively. Total past due loans held for investment as a percentage of loans held for investment was 0.80% at June 30, 2019, compared to 0.99% at March 31, 2019, and 1.22% at June 30, 2018.
Conference Call
Origin will hold a conference call to discuss its second quarter 2019 results on Thursday, July 25, 2019, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (844) 695-5516; International: (412) 902-6750 and request to be joined into the Origin Bancorp Inc. (OBNK) 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://services.choruscall.com/links/obnk190725.html.
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.
3
About Origin Bancorp, Inc.
Origin is a financial holding company for Origin Bank, headquartered in Ruston, Louisiana, which provides a broad range of financial services to small and medium-sized businesses, municipalities, high net-worth individuals and retail clients from 43 banking centers, located from Dallas/Fort Worth, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. For more information, visit www.origin.bank.
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 strategy, projected plans and objectives, including any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, 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 preceded by, followed by or that otherwise include the words "assuming," "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" 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: deterioration of Origin's asset quality; changes in 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; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important deposit customer relationships; volatility and direction of market interest rates, which may increase funding costs or reduce interest-earning asset yields thus reducing margin; increased competition in the financial services industry, particularly from regional and national institutions; 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, including the effects of declines in housing markets; 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; the extensive federal and state regulation, supervision and examination governing almost every aspect of Origin's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; 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 our non-GAAP liquidity measurements and our underlying assumptions or estimates related to the impact on our net interest margin from changes in the average interest-bearing balances due from banks or other factors; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; and the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters. 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 ("SEC") 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, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
4
Contact:
Chris Reigelman, Origin Bancorp, Inc.
318-497-3177 / chris@origin.bank
5
Origin Bancorp, Inc.
Selected Financial Data
At and for the three months ended | |||||||||||||||||||
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||
Income statement and share amounts | (Dollars in thousands, except per share amounts, unaudited) | ||||||||||||||||||
Net interest income | $ | 42,969 | $ | 42,026 | $ | 42,061 | $ | 39,497 | $ | 37,170 | |||||||||
Provision for credit losses | 1,985 | 1,005 | 1,723 | 504 | 311 | ||||||||||||||
Noninterest income | 11,176 | 11,604 | 10,588 | 10,237 | 10,615 | ||||||||||||||
Noninterest expense | 37,095 | 35,381 | 35,023 | 34,344 | 32,012 | ||||||||||||||
Income before income tax expense | 15,065 | 17,244 | 15,903 | 14,886 | 15,462 | ||||||||||||||
Income tax expense | 2,782 | 3,089 | 2,725 | 2,568 | 2,760 | ||||||||||||||
Net income | $ | 12,283 | $ | 14,155 | $ | 13,178 | $ | 12,318 | $ | 12,702 | |||||||||
Basic earnings per common share | $ | 0.52 | $ | 0.60 | $ | 0.56 | $ | 0.52 | $ | 0.54 | |||||||||
Diluted earnings per common share | 0.52 | 0.60 | 0.55 | 0.52 | 0.53 | ||||||||||||||
Dividends declared per common share | 0.0325 | 0.0325 | 0.0325 | 0.0325 | 0.0325 | ||||||||||||||
Weighted average common shares outstanding - basic | 23,585,040 | 23,569,576 | 23,519,778 | 23,493,065 | 22,107,489 | ||||||||||||||
Weighted average common shares outstanding - diluted | 23,786,646 | 23,776,349 | 23,715,919 | 23,716,779 | 22,382,003 | ||||||||||||||
Balance sheet data | |||||||||||||||||||
Total loans held for investment | $ | 3,984,597 | $ | 3,838,343 | $ | 3,789,105 | $ | 3,601,081 | $ | 3,372,096 | |||||||||
Total assets | 5,119,625 | 4,872,201 | 4,821,576 | 4,667,564 | 4,371,792 | ||||||||||||||
Total deposits | 3,855,012 | 3,898,248 | 3,783,138 | 3,727,158 | 3,672,097 | ||||||||||||||
Total stockholders' equity | 584,293 | 568,122 | 549,779 | 531,919 | 519,356 | ||||||||||||||
Performance metrics and capital ratios | |||||||||||||||||||
Yield on loans held for investment | 5.29 | % | 5.28 | % | 5.17 | % | 5.00 | % | 4.89 | % | |||||||||
Yield on interest earnings assets | 4.85 | 4.86 | 4.75 | 4.58 | 4.43 | ||||||||||||||
Rate on interest bearing deposits | 1.61 | 1.48 | 1.31 | 1.16 | 1.01 | ||||||||||||||
Rate on total deposits | 1.19 | 1.11 | 0.96 | 0.85 | 0.75 | ||||||||||||||
Net interest margin, fully tax equivalent | 3.70 | 3.80 | 3.82 | 3.76 | 3.74 | ||||||||||||||
Return on average stockholders' equity (annualized) | 8.54 | 10.25 | 9.66 | 9.15 | 9.94 | ||||||||||||||
Return on average assets (annualized) | 0.98 | 1.18 | 1.10 | 1.08 | 1.17 | ||||||||||||||
Efficiency ratio (1) | 68.51 | 65.97 | 66.52 | 69.06 | 66.99 | ||||||||||||||
Book value per common share | $ | 24.58 | $ | 23.92 | $ | 23.17 | $ | 22.52 | $ | 22.10 | |||||||||
Common equity tier 1 to risk-weighted assets (2) | 11.93 | % | 12.05 | % | 11.94 | % | 11.79 | % | 12.35 | % | |||||||||
Tier 1 capital to risk-weighted assets (2) | 12.13 | 12.26 | 12.16 | 12.01 | 12.58 | ||||||||||||||
Total capital to risk-weighted assets (2) | 12.97 | 13.10 | 12.98 | 12.88 | 13.48 | ||||||||||||||
Tier 1 leverage ratio (2) | 11.10 | 11.23 | 11.21 | 11.34 | 11.63 | ||||||||||||||
____________________________
(1) | Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. |
(2) | June 30, 2019, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board. |
6
Origin Bancorp, Inc.
Selected Financial Data
Six months ended June 30, | |||||||
(Dollars in thousands, except per share amounts) | 2019 | 2018 | |||||
Income statement and share amounts | (Unaudited) | (Unaudited) | |||||
Net interest income | $ | 84,995 | $ | 71,894 | |||
Provision (benefit)for credit losses | 2,990 | (1,213 | ) | ||||
Noninterest income | 22,780 | 20,415 | |||||
Noninterest expense | 72,476 | 61,869 | |||||
Income before income tax expense | 32,309 | 31,653 | |||||
Income tax expense | 5,871 | 5,544 | |||||
Net income | $ | 26,438 | $ | 26,109 | |||
Basic earnings per common share (1) | $ | 1.12 | $ | 1.14 | |||
Diluted earnings per common share(1) | 1.11 | 1.13 | |||||
Dividends declared per common share | 0.065 | 0.065 | |||||
Weighted average common shares outstanding - basic | 23,577,335 | 20,451,960 | |||||
Weighted average common shares outstanding - diluted | 23,781,358 | 20,726,474 | |||||
Performance metrics and capital ratios | |||||||
Return on average stockholders' equity | 9.38 | % | 10.83 | % | |||
Return on average assets | 1.08 | 1.23 | |||||
Efficiency ratio (2) | 67.25 | 67.02 | |||||
____________________________
(1) | Due to the impact of average preferred shares outstanding on the calculation of earnings per share, the sum of quarterly periods may not agree to the amount disclosed for the year-to-date period. |
(2) | Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. |
7
Origin Bancorp, Inc.
Consolidated Balance Sheets
(Dollars in thousands) | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||
Assets | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Cash and due from banks | $ | 75,204 | $ | 66,312 | $ | 71,008 | $ | 60,716 | $ | 71,709 | |||||||||
Interest-bearing deposits in banks | 124,356 | 44,928 | 45,670 | 59,721 | 97,865 | ||||||||||||||
Federal funds sold | — | — | — | 20,000 | — | ||||||||||||||
Total cash and cash equivalents | 199,560 | 111,240 | 116,678 | 140,437 | 169,574 | ||||||||||||||
Securities: | |||||||||||||||||||
Available for sale | 548,980 | 563,826 | 575,644 | 585,788 | 507,513 | ||||||||||||||
Held to maturity | 28,897 | 19,033 | 19,169 | 19,602 | 19,731 | ||||||||||||||
Securities carried at fair value through income | 11,615 | 11,510 | 11,361 | 11,273 | 11,413 | ||||||||||||||
Total securities | 589,492 | 594,369 | 606,174 | 616,663 | 538,657 | ||||||||||||||
Non-marketable equity securities held in other financial institutions | 49,008 | 42,314 | 42,149 | 39,283 | 25,005 | ||||||||||||||
Loans held for sale | 58,408 | 42,265 | 52,210 | 50,658 | 62,072 | ||||||||||||||
Loans | 3,984,597 | 3,838,343 | 3,789,105 | 3,601,081 | 3,372,096 | ||||||||||||||
Less: allowance for loan losses | 36,683 | 35,578 | 34,203 | 35,727 | 34,151 | ||||||||||||||
Loans, net of allowance for loan losses | 3,947,914 | 3,802,765 | 3,754,902 | 3,565,354 | 3,337,945 | ||||||||||||||
Premises and equipment, net | 80,672 | 78,684 | 75,014 | 74,936 | 77,064 | ||||||||||||||
Mortgage servicing rights | 21,529 | 23,407 | 25,114 | 26,163 | 25,738 | ||||||||||||||
Cash surrender value of bank-owned life insurance | 33,070 | 32,888 | 32,706 | 32,487 | 28,326 | ||||||||||||||
Goodwill and other intangible assets, net | 32,144 | 32,497 | 32,861 | 33,228 | 24,113 | ||||||||||||||
Accrued interest receivable and other assets | 107,828 | 111,772 | 83,768 | 88,355 | 83,298 | ||||||||||||||
Total assets | $ | 5,119,625 | $ | 4,872,201 | $ | 4,821,576 | $ | 4,667,564 | $ | 4,371,792 | |||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||
Noninterest-bearing deposits | $ | 1,003,499 | $ | 977,919 | $ | 951,015 | $ | 976,260 | $ | 950,080 | |||||||||
Interest-bearing deposits | 2,011,719 | 2,101,706 | 2,027,720 | 1,985,757 | 1,995,798 | ||||||||||||||
Time deposits | 839,794 | 818,623 | 804,403 | 765,141 | 726,219 | ||||||||||||||
Total deposits | 3,855,012 | 3,898,248 | 3,783,138 | 3,727,158 | 3,672,097 | ||||||||||||||
FHLB advances and other borrowings | 601,346 | 335,053 | 445,224 | 358,532 | 139,092 | ||||||||||||||
Junior subordinated debentures | 9,657 | 9,651 | 9,644 | 9,637 | 9,631 | ||||||||||||||
Accrued expenses and other liabilities | 69,317 | 61,127 | 33,791 | 40,318 | 31,616 | ||||||||||||||
Total liabilities | 4,535,332 | 4,304,079 | 4,271,797 | 4,135,645 | 3,852,436 | ||||||||||||||
Commitments and contingencies | — | — | — | — | — | ||||||||||||||
Stockholders' equity | |||||||||||||||||||
Common stock | 118,871 | 118,730 | 118,633 | 118,106 | 117,520 | ||||||||||||||
Additional paid-in capital | 243,002 | 242,579 | 242,041 | 240,832 | 238,260 | ||||||||||||||
Retained earnings | 216,801 | 205,289 | 191,585 | 179,178 | 167,628 | ||||||||||||||
Accumulated other comprehensive income (loss) | 5,619 | 1,524 | (2,480 | ) | (6,197 | ) | (4,052 | ) | |||||||||||
Total stockholders' equity | 584,293 | 568,122 | 549,779 | 531,919 | 519,356 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 5,119,625 | $ | 4,872,201 | $ | 4,821,576 | $ | 4,667,564 | $ | 4,371,792 | |||||||||
8
Origin Bancorp, Inc.
Consolidated Quarterly Statements of Income
Three months ended | |||||||||||||||||||
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||
Interest and dividend income | (Dollars in thousands, except per share amounts, unaudited) | ||||||||||||||||||
Interest and fees on loans | $ | 51,461 | $ | 49,175 | $ | 47,819 | $ | 43,872 | $ | 40,219 | |||||||||
Investment securities-taxable | 3,208 | 3,341 | 3,292 | 2,754 | 2,057 | ||||||||||||||
Investment securities-nontaxable | 871 | 858 | 996 | 1,129 | 1,156 | ||||||||||||||
Interest and dividend income on assets held in other financial institutions | 1,523 | 1,120 | 950 | 1,080 | 1,320 | ||||||||||||||
Federal funds sold | — | — | 1 | 7 | — | ||||||||||||||
Total interest and dividend income | 57,063 | 54,494 | 53,058 | 48,842 | 44,752 | ||||||||||||||
Interest expense | |||||||||||||||||||
Interest-bearing deposits | 11,540 | 10,497 | 8,980 | 7,891 | 6,820 | ||||||||||||||
FHLB advances and other borrowings | 2,415 | 1,834 | 1,878 | 1,314 | 624 | ||||||||||||||
Subordinated debentures | 139 | 137 | 139 | 140 | 138 | ||||||||||||||
Total interest expense | 14,094 | 12,468 | 10,997 | 9,345 | 7,582 | ||||||||||||||
Net interest income | 42,969 | 42,026 | 42,061 | 39,497 | 37,170 | ||||||||||||||
Provision for credit losses | 1,985 | 1,005 | 1,723 | 504 | 311 | ||||||||||||||
Net interest income after provision for credit losses | 40,984 | 41,021 | 40,338 | 38,993 | 36,859 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges and fees | 3,435 | 3,316 | 3,349 | 3,234 | 3,157 | ||||||||||||||
Mortgage banking revenue | 3,252 | 2,606 | 2,288 | 2,621 | 2,317 | ||||||||||||||
Insurance commission and fee income | 3,036 | 3,510 | 2,481 | 3,306 | 1,826 | ||||||||||||||
Loss on sales of securities, net | — | — | (8 | ) | — | — | |||||||||||||
(Loss) gain on sales and disposals of other assets, net | (166 | ) | 3 | (23 | ) | (207 | ) | 121 | |||||||||||
Other fee income | 360 | 276 | 592 | 364 | 403 | ||||||||||||||
Other income | 1,259 | 1,893 | 1,909 | 919 | 2,791 | ||||||||||||||
Total noninterest income | 11,176 | 11,604 | 10,588 | 10,237 | 10,615 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 22,764 | 22,613 | 21,333 | 21,054 | 19,859 | ||||||||||||||
Occupancy and equipment, net | 4,200 | 4,044 | 3,830 | 4,169 | 3,793 | ||||||||||||||
Data processing | 1,810 | 1,587 | 1,839 | 1,523 | 1,347 | ||||||||||||||
Electronic banking | 892 | 689 | 699 | 761 | 680 | ||||||||||||||
Communications | 647 | 586 | 513 | 490 | 510 | ||||||||||||||
Advertising and marketing | 1,089 | 798 | 1,351 | 1,245 | 1,022 | ||||||||||||||
Professional services | 839 | 904 | 1,024 | 982 | 598 | ||||||||||||||
Regulatory assessments | 691 | 711 | 666 | 411 | 660 | ||||||||||||||
Loan related expenses | 790 | 669 | 810 | 718 | 798 | ||||||||||||||
Office and operations | 1,849 | 1,481 | 1,516 | 1,499 | 1,588 | ||||||||||||||
Other expenses | 1,524 | 1,299 | 1,442 | 1,492 | 1,157 | ||||||||||||||
Total noninterest expense | 37,095 | 35,381 | 35,023 | 34,344 | 32,012 | ||||||||||||||
Income before income tax expense | 15,065 | 17,244 | 15,903 | 14,886 | 15,462 | ||||||||||||||
Income tax expense | 2,782 | 3,089 | 2,725 | 2,568 | 2,760 | ||||||||||||||
Net income | $ | 12,283 | $ | 14,155 | $ | 13,178 | $ | 12,318 | $ | 12,702 | |||||||||
Basic earnings per common share | $ | 0.52 | $ | 0.60 | $ | 0.56 | $ | 0.52 | $ | 0.54 | |||||||||
Diluted earnings per common share | 0.52 | 0.60 | 0.55 | 0.52 | 0.53 | ||||||||||||||
9
Origin Bancorp, Inc.
Loan Data
At and for the three months ended | |||||||||||||||||||
Loans held for investment | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||
Loans secured by real estate: | (Dollars in thousands, unaudited) | ||||||||||||||||||
Commercial real estate | $ | 1,219,470 | $ | 1,202,269 | $ | 1,228,402 | $ | 1,162,274 | $ | 1,091,581 | |||||||||
Construction/land/land development | 524,999 | 488,167 | 429,660 | 406,249 | 380,869 | ||||||||||||||
Residential real estate | 651,988 | 638,064 | 629,714 | 585,931 | 563,016 | ||||||||||||||
Total real estate | 2,396,457 | 2,328,500 | 2,287,776 | 2,154,454 | 2,035,466 | ||||||||||||||
Commercial and industrial | 1,341,652 | 1,287,300 | 1,272,566 | 1,193,035 | 1,046,488 | ||||||||||||||
Mortgage warehouse lines of credit | 224,939 | 202,744 | 207,871 | 233,325 | 270,494 | ||||||||||||||
Consumer | 21,549 | 19,799 | 20,892 | 20,267 | 19,648 | ||||||||||||||
Total loans held for investment | 3,984,597 | 3,838,343 | 3,789,105 | 3,601,081 | 3,372,096 | ||||||||||||||
Less: Allowance for loan losses | 36,683 | 35,578 | 34,203 | 35,727 | 34,151 | ||||||||||||||
Loans held for investment, net | $ | 3,947,914 | $ | 3,802,765 | $ | 3,754,902 | $ | 3,565,354 | $ | 3,337,945 | |||||||||
Nonperforming assets | |||||||||||||||||||
Nonperforming loans held for investment | |||||||||||||||||||
Commercial real estate | $ | 9,423 | $ | 8,622 | $ | 8,281 | $ | 8,851 | $ | 8,712 | |||||||||
Construction/land/land development | 1,111 | 922 | 935 | 960 | 1,197 | ||||||||||||||
Residential real estate | 4,978 | 5,196 | 6,668 | 7,220 | 7,713 | ||||||||||||||
Commercial and industrial | 14,810 | 15,309 | 15,792 | 9,285 | 8,831 | ||||||||||||||
Consumer | 156 | 206 | 180 | 238 | 340 | ||||||||||||||
Total nonperforming loans held for investment | 30,478 | 30,255 | 31,856 | 26,554 | 26,793 | ||||||||||||||
Nonperforming loans held for sale | 2,049 | 1,390 | 741 | 1,391 | 1,949 | ||||||||||||||
Total nonperforming loans | 32,527 | 31,645 | 32,597 | 27,945 | 28,742 | ||||||||||||||
Repossessed assets | 3,554 | 3,659 | 3,739 | 3,306 | 654 | ||||||||||||||
Total nonperforming assets | $ | 36,081 | $ | 35,304 | $ | 36,336 | $ | 31,251 | $ | 29,396 | |||||||||
Classified assets | $ | 80,124 | $ | 77,619 | $ | 82,914 | $ | 80,092 | $ | 87,289 | |||||||||
Past due loans held for investment (1) | 31,884 | 37,841 | 34,085 | 24,846 | 13,112 | ||||||||||||||
Allowance for loan losses | |||||||||||||||||||
Balance at beginning of period | $ | 35,578 | $ | 34,203 | $ | 35,727 | $ | 34,151 | $ | 34,132 | |||||||||
Provision (benefit) for loan losses | 1,782 | 823 | 1,886 | 1,113 | 140 | ||||||||||||||
Loans charged off | 840 | 608 | 3,583 | 1,009 | 794 | ||||||||||||||
Loan recoveries | 163 | 1,160 | 173 | 1,472 | 673 | ||||||||||||||
Net (recoveries) charge offs | 677 | (552 | ) | 3,410 | (463 | ) | 121 | ||||||||||||
Balance at end of period | $ | 36,683 | $ | 35,578 | $ | 34,203 | $ | 35,727 | $ | 34,151 | |||||||||
Credit quality ratios | |||||||||||||||||||
Total nonperforming assets to total assets | 0.70 | % | 0.72 | % | 0.75 | % | 0.67 | % | 0.67 | % | |||||||||
Total nonperforming loans to total loans | 0.80 | 0.82 | 0.85 | 0.77 | 0.84 | ||||||||||||||
Nonperforming loans held for investment to loans held for investment | 0.76 | 0.79 | 0.84 | 0.74 | 0.79 | ||||||||||||||
Past due loans held for investment to loans held for investment | 0.80 | 0.99 | 0.90 | 0.69 | 0.39 | ||||||||||||||
Allowance for loan losses to nonperforming loans held for investment | 120.36 | 117.59 | 107.37 | 134.54 | 127.46 | ||||||||||||||
Allowance for loan losses to total loans held for investment | 0.92 | 0.93 | 0.90 | 0.99 | 1.01 | ||||||||||||||
Net charge offs (recoveries) to total average loans held for investment (annualized) | 0.07 | (0.06 | ) | 0.37 | (0.05 | ) | 0.01 | ||||||||||||
(1) | Past due loans held for investment are defined as loans 30 days past due or more. |
10
Origin Bancorp, Inc.
Average Balances and Yields/Rates
Three months ended | ||||||||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||||||||||
Average Balance | Yield/Rate | Average Balance | Yield/Rate | Average Balance | Yield/Rate | |||||||||||||||
Assets | (Dollars in thousands, unaudited) | |||||||||||||||||||
Commercial real estate | $ | 1,209,645 | 5.16 | % | $ | 1,214,682 | 5.17 | % | $ | 1,090,888 | 4.82 | % | ||||||||
Construction/land/land development | 505,119 | 5.70 | 457,175 | 5.74 | 351,342 | 5.33 | ||||||||||||||
Residential real estate | 640,123 | 4.90 | 634,287 | 4.81 | 586,956 | 4.57 | ||||||||||||||
Commercial and industrial | 1,310,611 | 5.36 | 1,287,461 | 5.35 | 1,024,981 | 4.85 | ||||||||||||||
Mortgage warehouse lines of credit | 203,524 | 5.45 | 147,453 | 5.63 | 208,809 | 5.33 | ||||||||||||||
Consumer | 20,902 | 7.01 | 20,482 | 6.83 | 20,774 | 6.83 | ||||||||||||||
Loans held for investment | 3,889,924 | 5.29 | 3,761,540 | 5.28 | 3,283,750 | 4.89 | ||||||||||||||
Loans held for sale | 23,927 | 3.45 | 17,687 | 4.05 | 20,491 | 3.88 | ||||||||||||||
Loans Receivable | 3,913,851 | 5.27 | 3,779,227 | 5.28 | 3,304,241 | 4.88 | ||||||||||||||
Investment securities-taxable | 492,169 | 2.61 | 498,733 | 2.68 | 363,960 | 2.26 | ||||||||||||||
Investment securities-nontaxable | 103,485 | 3.37 | 101,794 | 3.37 | 128,504 | 3.60 | ||||||||||||||
Non-marketable equity securities held in other financial institutions | 44,974 | 3.80 | 42,161 | 2.90 | 23,040 | 4.80 | ||||||||||||||
Interest-bearing balances due from banks | 164,686 | 2.67 | 123,326 | 2.69 | 235,299 | 1.78 | ||||||||||||||
Total interest-earning assets | 4,719,165 | 4.85 | 4,545,241 | 4.86 | 4,055,044 | 4.43 | ||||||||||||||
Noninterest-earning assets(1) | 324,786 | 325,807 | 311,279 | |||||||||||||||||
Total assets | $ | 5,043,951 | $ | 4,871,048 | $ | 4,366,323 | ||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||
Savings and interest-bearing transaction accounts | $ | 2,050,058 | 1.39 | % | $ | 2,020,440 | 1.26 | % | $ | 2,017,453 | 0.88 | % | ||||||||
Time deposits | 830,399 | 2.13 | 848,629 | 2.03 | 699,765 | 1.36 | ||||||||||||||
Total interest-bearing deposits | 2,880,457 | 1.61 | 2,869,069 | 1.48 | 2,717,218 | 1.01 | ||||||||||||||
Federal funds purchased | 118 | 2.89 | 19 | 2.89 | — | — | ||||||||||||||
FHLB advances | 436,142 | 2.11 | 335,891 | 2.05 | 75,189 | 3.04 | ||||||||||||||
Securities sold under agreements to repurchase | 34,049 | 1.36 | 39,757 | 1.39 | 30,233 | 0.71 | ||||||||||||||
Subordinated debentures | 9,654 | 5.69 | 9,647 | 5.78 | 9,628 | 5.67 | ||||||||||||||
Total interest-bearing liabilities | 3,360,420 | 1.68 | 3,254,383 | 1.55 | 2,832,268 | 1.07 | ||||||||||||||
Noninterest-bearing deposits | 1,018,081 | 972,617 | 942,533 | |||||||||||||||||
Other liabilities(1) | 88,689 | 83,957 | 79,141 | |||||||||||||||||
Total liabilities | 4,467,190 | 4,310,957 | 3,853,942 | |||||||||||||||||
Stockholders' Equity | 576,761 | 560,091 | 512,381 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 5,043,951 | $ | 4,871,048 | $ | 4,366,323 | ||||||||||||||
Net interest spread | 3.17 | % | 3.31 | % | 3.36 | % | ||||||||||||||
Net interest margin | 3.65 | % | 3.75 | % | 3.68 | % | ||||||||||||||
Net interest income margin - (tax- equivalent)(2) | 3.70 | % | 3.80 | % | 3.74 | % | ||||||||||||||
____________________________
(1) | Includes Government National Mortgage Association ("GNMA") repurchase average balances of $25.8 million, $30.1 million and $29.3 million for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018, respectively. 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. |
(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. |
11
2Q TWENTY19 EARNINGS PRESENTATION
Forward-Looking Statements and Non-GAAP Information This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin Bancorp, Inc.'s ("Origin" or the "Company") future financial performance, business and growth strategy, projected plans and objectives, and related transactions, and other projections based on macroeconomic and industry trends, 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 preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" 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 the Company's future results and cause actual results to differ materially from those expressed in the forward-looking statements include: deterioration of Origin's asset quality; changes in 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; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important deposit customer relationships; volatility and direction of market interest rates, which may increase funding costs or reduce interest earning asset yields thus reducing margin; increased competition in the financial services industry, particularly from regional and national institutions; 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, including the effects of declines in housing markets; 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; the extensive federal and state regulation, supervision and examination governing almost every aspect of Origin's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; 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; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; and the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters. 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 ("SEC") and any updates to those sections set forth in Origin's subsequent Quarterly Reports on Form 10-Q or 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, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Origin reports its results in accordance with United States generally accepted accounting principles ("GAAP"). However, management believes that certain supplemental non-GAAP financial measures used in managing its business may provide meaningful information to investors about underlying trends in its business and management uses these non-GAAP measures to evaluate the Company's operating performance and believes that these non-GAAP measures provide information that is important to investors and that is useful in understanding Origin's results of operations. 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 presentation: • Tangible common equity is defined as total common stockholders' equity less goodwill and other intangible assets, net • Tangible assets is defined as total assets less goodwill and other intangible assets, net • Tangible common equity to tangible assets is a ratio that is determined by dividing tangible common equity by tangible assets • Tangible book value per common share is determined by dividing tangible common equity by common shares outstanding at the end of the period 2
COMPANY SNAPSHOT • Origin Bank was founded in 1912 • OBNK is headquartered in Ruston, LA 9 • 43 banking centers operating across Texas, 19 6 Louisiana & Mississippi • Strong commercial focus with 40% C&I and 43% CRE lending mix across our footprint FINANCIAL HIGHLIGHTS 9 2Q2019 DOLLARS IN MILLIONS TOTAL ASSETS $5,120 TOTAL LOANS HELD FOR INVESTMENT $3,985 TOTAL DEPOSITS $3,855 TOTAL STOCKHOLDERS' EQUITY $584 DOLLARS IN MILLIONS TANGIBLE COMMON EQUITY (1) DALLAS - FORT WORTH $552 HOUSTON Entry: 2008 Entry: 2013 Loans: $1,386 TANGIBLE COMMON EQUITY/ TANGIBLE ASSETS (1) Loans: $741 Deposits: $892 10.85% Deposits: $725 Banking Centers: 9 Banking Centers: 9 TOTAL CAPITAL TO RISK-WEIGHTED ASSETS (2) 12.97% NORTH LOUISIANA CENTRAL MISSISSIPPI Entry: 1912 Entry: 2010 Note: All financial information and other Origin Bank data is as of 06/30/19. Loans: $1,213 Loans: $645 (1) As used in this presentation, tangible common equity and tangible Deposits: $1,772 common equity/tangible assets are non-GAAP financial measures. For a Deposits: $466 reconciliation of these non-GAAP financial measures to their comparable Banking Centers: 19 Banking Centers: 6 GAAP measures, see slide 15 of this presentation (2) Ratio is estimated and calculated at the Company level, which is subject 3 to the capital adequacy requirements of the Federal Reserve Board.
SECOND QUARTER FINANCIAL HIGHLIGHTS 2019 HIGHLIGHTS DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS Linked 2Q2019 1Q2019 2Q2018 Q Δ YoY Δ • Net interest income increased by Balance Sheet $943,000, or 2.2%, over the previous Total Loans Held For Investment $ 3,984,597 $ 3,838,343 $ 3,372,096 3.8 % 18.2 % quarter Total Assets 5,119,625 4,872,201 4,371,792 5.1 % 17.1 % Total Deposits 3,855,012 3,898,248 3,672,097 (1.1)% 5.0 % • Yield earned on total loans held for Tangible Common Equity(1) 552,149 535,625 495,243 3.1 % 11.5 % investment during 2Q2019 was 5.29%, Book Value per Common Share 24.58 23.92 22.10 2.8 % 11.2 % up one basis point from the previous Tangible Book Value Per Common Share(1) 23.22 22.56 21.07 2.9 % 10.2 % quarter. Cost of total deposits increased eight basis points in the same period Income Statement • Net interest margin was 3.70% (FTE), Net Interest Income $ 42,969 $ 42,026 $ 37,170 2.2 % 15.6 % representing a decrease of ten basis Provision for Credit Losses 1,985 1,005 311 97.5 % 538.3 % points over the previous quarter Noninterest Income 11,176 11,604 10,615 (3.7)% 5.3 % Noninterest Expense 37,095 35,381 32,012 4.8 % 15.9 % • Made strategic funding decision to Net Income 12,283 14,155 12,702 (13.2)% (3.3)% reduce certain brokered deposits and Diluted EPS $ 0.52 $ 0.60 $ 0.53 (13.3)% (1.9)% replace with short-term FHLB Dividends Declared Per Common Share $ 0.0325 $ 0.0325 $ 0.0325 N/C N/C advances. (N/C: No change) Selected Ratios Net Interest Margin (FTE) 3.70% 3.80% 3.74% Efficiency Ratio 68.51% 65.97% 66.99% Return on Average Assets (annualized) 0.98% 1.18% 1.17% (1) As used in this presentation, tangible common Return on Average Equity (annualized) 8.54% 10.25% 9.94% equity and tangible book value per common share are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, see slide 15 of this presentation. 4
HISTORICAL AVERAGE INTEREST EARNING ASSETS & NIM (FTE) GROWTH & PROFITABILITY DOLLARS IN MILLIONS 4.70% $4,800 $4,719 ) $ ( S ) T E E • Consistent increase in average T $4,545 $4,600 F S ( 4.40% S N interest-earning assets A I $4,433 G G N R $4,400 I A N M • Strong growth in average loan R A T 4.10% $4,230 E S balances E $4,200 T R S E E T 3.82% $4,055 3.80% R N E • Pressure on NIM from deposit I 3.80% T T $4,000 N I costs E 3.76% . N 3.74% 3.70% G V A 3.50% $3,800 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 AVERAGE LOANS HELD FOR INVESTMENT & YIELDS DOLLARS IN MILLIONS 6.00% $4,000 $3,890 5.80% $3,762 $3,800 ) $ 5.60% $3,650 ( S N ) $3,600 A % ( 5.40% O L D $3,459 L E E G I 5.20% 5.28% 5.29% A Y $3,400 $3,284 5.17% R E 5.00% V 5.00% A $3,200 4.80% 4.89% 4.60% $3,000 5 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019
ABILITY TO LEVERAGE OPERATING EFFICIENCY INFRASTRUCTURE 110.00% 3.50% • Cost-effective, centralized back office functions are performed in our North Louisiana operations 3.19% center 2.97% 2.95% 2.94% 2.95% 3.00% • Infrastructure exists to support asset growth and increasing 90.00% profitability S T E O I S T S A 81.93% A • Investments in systems, R E Y G technology, digital banking and C 2.50% A N R E enterprise risk management E C I V F A / F E E • Opportunity to enhance ROAA I N through team lift-outs in our 70.00% 71.80% 68.51% footprint 68.92% 67.41% 2.00% 50.00% 1.50% 2015 2016 2017 2018 2Q2019 YTD 6
DIVERSIFIED & GROWING NET REVENUE DISTRIBUTION – 2Q2019 REVENUE STREAMS Service Charges & Fees: 6% Mortgage Banking Revenue: 6% • Meaningful noninterest income supplements interest-related Insurance Commission & Fee Income: 6% revenue Other: 3% • Comprehensive product suite delivered with high quality, responsive customer service Net Interest Income: 79% • Other revenue streams include insurance and mortgage products • We believe these products Noninterest Income 21% provide revenue stream diversification and enhance client NET REVENUE TREND relationships 22% 21% 20% 22% 21% 78% 79% 80% 78% 79% 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 Net Interest Income Noninterest Income 7
OUR MARKETS AVERAGE DEPOSITS & DEPOSIT COST DOLLARS IN MILLIONS 200 bps $3,870 $3,658 $3,458 170 bps $3,235 $3,337 • DIVERSE GEOGRAPHIC t s o 140 bps FOOTPRINT C t i 110 bps s o p • Attractive combination of stable, e 80 bps D low cost markets and markets 50 bps experiencing metropolitan growth 20 bps • Expansion through organic growth 2015 2016 2017 2018 2Q2019 YTD and strategic M&A opportunities LA TX MS LA TX MS • TRACK RECORD OF GROWTH IN NEW MARKETS LOANS HFI • Success in growing loans and DOLLARS IN MILLIONS $3,985 deposits organically in diverse, $3,789 $3,241 new markets $3,013 $3,112 • Culture and brand are unique, enabling Origin to attract talented bankers and banking relationships across markets 2015 2016 2017 2018 2Q2019 LA TX MS 8
DIVERSIFIED COMMERCIAL LOAN COMPOSITION – 2Q2019 LOAN PORTFOLIO DOLLARS IN MILLIONS • Focus on commercial lending to Other: 1% middle market and small businesses as well as their owners and executives C&D: 13% • Commercial loans represented an Residential: 16% Owner Occupied aggregate of 83% of our loan CRE: 11% portfolio as of 06/30/19 • Loan growth potential enhanced by diverse portfolio Non-Owner C&I: 34% Occupied CRE: 19% • Commercial real estate loan concentrations remain below regulatory guidelines Mortgage Warehouse: 6% Total Ending Loans HFI at 06/30/19: $3,985 9
GROWING CORE DEPOSIT DEPOSIT COMPOSITION – 2Q2019 FRANCHISE Savings: 4% Brokered: 4% • Continued success in growing Noninterest- core deposits, especially bearing Time deposits: demand: 26% noninterest-bearing deposits 22% Interest- • Low cost deposits driven by bearing legacy North Louisiana franchise demand: Money market: 19% 25% • Ranked 1st in deposit market share in Ruston, LA and 2Q2019 Cost of Deposits: 1.19% Monroe, LA MSAs AVERAGE NONINTEREST-BEARING DEPOSITS S • Relationship bankers motivated to $1,100 30.0% T I S grow core deposits O $995 P $1,000 E $949 28.0% D • Builds and strengthens client E G $900 A relationships and provides R $841 25.9% 25.7% 26.0% E stable funding for growth V A $800 $759 L A T 24.0% O • Expansion markets generating $694 24.3% T $700 F further growth in noninterest- O T bearing deposits 22.7% 22.0% N $600 E C 21.4% R E $500 20.0% P 2015 2016 2017 2018 2Q2019 YTD 10
LIQUIDITY MEASURES Total Loans / Total Deposits 104.88% 106% • A key priority for our markets is to 101.54% deliver strong, high quality loan 99.55% 100% growth while focusing on core 97.98% deposit growth. 93.52% 94% • Stable deposit sources are primarily used to fund our loans 88% held for investment 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 • Replaced certain brokered LHFI excl. Warehouse / Total Deposits and Repos deposits with lower cost short term advances from the FHLB during the second quarter of 96.68% 98% 93.66% 2019, which increased our loan to 92.45% deposit ratio. 89.54% 90% 83.68% 82% 74% 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 11
UNDERWRITING & CREDIT NPLs(1) / LOANS HFI CULTURE 0.84% 0.79% 0.79% • Excellent track record of credit 0.74% 0.76% quality across core commercial lending portfolio • Seasoned lenders with strong credit backgrounds and significant experience in our markets 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 • Centralized underwriting with strong guidelines including global (2) cash flow analysis and secondary NCOs / AVERAGE LOANS HFI sources of repayment 0.37% • Total past due loans HFI as a percentage of HFI: 0.80% 0.07% 0.01% (0.05)% (0.06)% (1) NPLs do not include nonperforming loans held for sale 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 (2) Based on annualized quarterly net charge-offs 12
STRONG CAPITAL POSITION TOTAL RISK-BASED CAPITAL DOLLARS IN MILLIONS $39 $35 • Robust capital levels with $47 $39 opportunity for deployment $44 through organic growth and strategic acquisitions $529 $556 $433 $379 $423 • Management focused on effectively deploying capital to enhance returns 2015 2016 2017 2018 2Q2019 Tier 1 Capital Tier 2 Capital CAPITAL RATIOS 15.0% 14.0% 13.5% 12.9% 13.0% 13.1% 13.0% 13.0% 12.4% 12.1% 11.8% 11.9% 11.9% 12.0% 11.0% 11.4% 11.1% 10.8% 10.8% 10.9% 10.0% (1) As used in this presentation, tangible common equity 9.0% to tangible assets is a non-GAAP financial measure. For 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 a reconciliation of non-GAAP financial measures to their comparable GAAP measures, see slide 15 of this presentation. (1) CET1 Total RBC TCE/TA 13
Increase scale across the franchise, and particularly in Houston Improve operational efficiency and increase profitability Focused effort to improve margin and risk-adjusted returns Grow client base and continue capturing Continue our disciplined approach to market share organic loan and deposit growth Successfully recruit experienced lenders and teams Continue to evaluate potential M&A Focus on existing and contiguous opportunities markets 14
Reconciliation of Non-GAAP Financial Measures DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS 2Q2019 1Q2019 4Q2018 3Q2018 2Q2018 Calculation of Tangible Common Equity: Total Common Stockholders' Equity $ 584,293 $ 568,122 $ 549,779 $ 531,919 $ 519,356 Less: Goodwill and Other Intangible Assets, Net 32,144 32,497 32,861 33,228 24,113 Tangible Common Equity $ 552,149 $ 535,625 $ 516,918 $ 498,691 $ 495,243 Common Shares Outstanding at the End of the Period 23,774,238 23,745,985 23,726,559 23,621,235 23,504,063 Book Value per Common Share $ 24.58 $ 23.92 $ 23.17 $ 22.52 $ 22.10 Calculation of Tangible Assets: Total Assets $ 5,119,625 $ 4,872,201 $ 4,821,576 $ 4,667,564 $ 4,371,792 Less: Goodwill and Other Intangible Assets, Net 32,144 32,497 32,861 33,228 24,113 Tangible Assets $ 5,087,481 $ 4,839,704 $ 4,788,715 $ 4,634,336 $ 4,347,679 Tangible Common Equity to Tangible Assets 10.85% 11.07% 10.79% 10.76% 11.39% Calculation of Tangible Book Value per Common Share: Common Shares Outstanding at the End of the Period 23,774,238 23,745,985 23,726,559 23,621,235 23,504,063 Tangible Book Value per Common Share $ 23.22 $ 22.56 $ 21.79 $ 21.11 $ 21.07 15
Exhibit 99.3
FOR IMMEDIATE RELEASE
July 24, 2019
Origin Bancorp, Inc. Announces Declaration of Quarterly Cash Dividend
RUSTON, LOUISIANA (July 24, 2019) - Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin"), the holding company for Origin Bank, today announced that on July 24, 2019, its Board of Directors declared a quarterly cash dividend of $0.0925 per share of its common stock. The cash dividend will be paid on August 30, 2019, to stockholders of record as of the close of business on August 16, 2019.
About Origin Bancorp, Inc.
Origin is a financial holding company for Origin Bank, headquartered in Ruston, Louisiana, which provides a broad range of financial services to small and medium-sized businesses, municipalities, high net-worth individuals and retail clients from 43 banking centers, located from Dallas/Fort Worth, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. For more information, visit www.origin.bank.
When used in filings by Origin Bancorp, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), in the Company's press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "will," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Factors that might cause such a difference include among other things: the expected payment date of its quarterly cash dividend; the expected cost savings, synergies and other financial benefits from acquisition or disposition transactions might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters might be greater than expected; changes in economic conditions; legislative changes; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; competition; changes in management’s business strategies and other factors set forth in the Company's filings with the SEC.
The Company does not undertake - and specifically declines any obligation - to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Contact Information
Investor Relations
Chris Reigelman
318-497-3177
chris@origin.bank
Media Contact
Ryan Kilpatrick
318-232-7472
rkilpatrick@origin.bank