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)
January 22, 2020
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 January 22, 2020, Origin Bancorp, Inc. (the "Registrant") issued a press release announcing its fourth 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, January 23, 2020, at 8:00 a.m. Central Time, the Registrant will host an investor conference call and webcast to review its fourth 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 January 22, 2020. 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 |
On January 22, 2020, 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 its common stock. The cash dividend will be paid on February 28, 2020, to stockholders of record as of the close of business on February 14, 2020. The press release is attached to this report as Exhibit 99.3, which is incorporated herein by reference.
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: | January 22, 2020 | 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 FOURTH QUARTER AND 2019 FULL YEAR
RUSTON, Louisiana (January 22, 2020) - Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $12.8 million for the quarter ended December 31, 2019. This represents a decrease of $1.8 million from the quarter ended September 30, 2019, and a decrease of $351,000 from the quarter ended December 31, 2018. Diluted earnings per share for the quarter ended December 31, 2019, was $0.55, down $0.07 from the linked quarter and flat compared to the quarter ended December 31, 2018.
Net income for the year ended December 31, 2019, was $53.9 million, representing an increase of $2.3 million compared to the year ended December 31, 2018, reflecting a year-over-year increase in net interest income, offset by higher provision and noninterest expense. Diluted earnings per share for the year ended December 31, 2019, was $2.28, representing an increase of $0.08 from diluted earnings per share of $2.20 for the year ended December 31, 2018.
"We are pleased with what we have accomplished in 2019, and are proud of how our team was able to adapt to a changing rate environment, grow deposits and loans in a meaningful way and manage our company to build long-term value," said Drake Mills, Chairman, President and CEO of Origin Bancorp, Inc. "We remain committed to the successful execution of our strategy by driving deposit and loan growth, leveraging operational efficiencies and delivering shareholder value in 2020."
Financial Highlights
• | Diluted earnings per share for the quarter ended December 31, 2019, was $0.55, and $2.28 for the year ended December 31, 2019. |
• | Net interest income was $44.1 million for the quarter ended December 31, 2019, compared to $44.6 million for linked quarter and $42.1 million for the quarter ended December 31, 2018. The net interest margin, fully tax equivalent, was 3.58% for the quarter ended December 31, 2019, compared to 3.69% for the linked quarter and 3.82% for the quarter ended December 31, 2018. |
• | Tangible book value per common share was $24.18 at December 31, 2019, an 11.0% increase from $21.79 at December 31, 2018. |
• | Total loans held for investment were $4.14 billion, a decrease of $45.3 million, or 1.1%, from September 30, 2019, and an increase of $354.1 million, or 9.3%, from December 31, 2018. |
• | Total deposits decreased by $55.7 million, or 1.3%, from September 30, 2019, and increased by $445.5 million, or 11.8%, from December 31, 2018. Total deposits without brokered deposits increased $122.1 million, or 3.1%, from September 30, 2019, and increased $625.3 million, or 18.1%, from December 31, 2018. |
• | For the seventh consecutive year Origin Bank was named one of the best banks to work for in the U.S. by American Banker and Best Companies Group, which identifies U.S. banks for outstanding employee satisfaction. |
Results of Operations for the Three Months Ended December 31, 2019
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended December 31, 2019, was $44.1 million, reflecting a decrease of $527,000, or 1.2%, compared to the linked quarter. The decrease was primarily driven by a decline in yields earned on loans held for investment, and was partially offset by a decrease in rates paid on interest-bearing liabilities and an increase in the overall average balance of loans held for investment. The aggregate 75 basis point decrease in the Federal Reserve target fed funds rate
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during the second half of 2019 have impacted the yields earned on our commercial and industrial and residential real estate loan portfolios.
Interest-bearing deposit expense decreased to $11.1 million during the current quarter, compared to $11.6 million for the quarter ended September 30, 2019. The $567,000 decrease in interest-bearing deposit expense was primarily driven by falling interest rates and was partially offset by an increase in the average balance of savings and interest-bearing deposit accounts. Average savings and interest-bearing deposit transaction accounts increased by $176.9 million, or 8.5% and $315.9 million, or 16.3%, compared to the linked quarter and quarter ended December 31, 2018, respectively. Average noninterest-bearing deposits increased by $74.0 million, or 6.9%, compared to the linked quarter and by $149.3 million, or 14.9%, compared to December 31, 2018.
The fully tax-equivalent net interest margin ("NIM") was 3.58% for the fourth quarter of 2019, an 11 basis point decrease from the third quarter of 2019 and a 24 basis point decrease from the fourth quarter of 2018. The decline in the NIM was primarily caused by rate partially offset by a change in the mix of earning asset types. The rate paid on total interest-bearing liabilities for the quarter ended December 31, 2019, was 1.46%, representing a decrease of 19 basis points and an increase of seven basis points compared to the linked quarter and the quarter ended December 31, 2018, respectively. The yield earned on interest-earning assets decreased 25 basis points and 19 basis points compared to the linked quarter and the quarter ended December 31, 2018, respectively. The margin compression the Company experienced on a linked quarter basis was primarily caused by declining loan yields driven by interest rate cuts by the Federal Reserve in the second half of 2019 that were more fully reflected in loan yields during the fourth quarter of 2019 than during the third quarter of 2019, causing a linked quarter decline in NIM.
Noninterest Income
Noninterest income for the quarter ended December 31, 2019, was $10.8 million, a decrease of $2.1 million, or 16.0%, from the linked quarter. The decrease from the linked quarter was primarily driven by decreases of $1.2 million and $775,000 in swap fee income and insurance commission and fee income, respectively.
Lower transaction volume during the current quarter drove the decline in swap fee income compared to the linked quarter. The decrease in insurance commission and fee income was caused by the seasonality of policy renewals.
Noninterest Expense
Noninterest expense for the quarter ended December 31, 2019, was $36.5 million, an increase of $1.5 million, or 4.2%, compared to the linked quarter. The increase from the linked quarter was largely driven by increases of $1.1 million and $551,000 in regulatory assessments and salaries and employee benefits, respectively. During the linked quarter the Company received a FDIC assessment credit of approximately $1.0 million from the FDIC insurance fund, without the receipt of a comparable credit in the current quarter. The increase in salaries and employee benefits expense over the linked quarter was largely driven by a $755,000 increase in self-insured medical expense, partially offset by a decrease in incentive compensation expense.
Financial Condition
Loans
Total loans held for investment at December 31, 2019, were $4.14 billion, a decrease of $45.3 million, or 1.1%, compared to $4.19 billion at September 30, 2019, and an increase of $354.1 million, or 9.3%, compared to $3.79 billion at December 31, 2018. The decrease in loans held for investment when compared to September 30, 2019, was primarily reflected in Mortgage Warehouse Lines of Credit and Commercial and Industrial loans, which decreased $30.3 million and $24.1 million, respectively. The decrease in Mortgage Warehouse Lines of Credit is primarily due to the seasonality of these loans.
For the quarter ended December 31, 2019, average loans held for investment were $4.17 billion, an increase of $100.6 million, or 2.5%, from $4.07 billion for the linked quarter.
Deposits
Total deposits at December 31, 2019, were $4.23 billion, a decrease of $55.7 million, or 1.3%, compared to $4.28 billion at September 30, 2019, and an increase of $445.5 million, or 11.8%, compared to $3.78 billion, at December 31, 2018. Brokered deposits contributed a decrease of $177.8 million when compared to the linked quarter, and a decrease of $179.8 million when
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compared to December 31, 2018. The decreases were partially offset by increases in money market deposits of $126.7 million when compared to the linked quarter and $461.1 million when compared to December 31, 2018. Noninterest-bearing deposits decreased $77.0 million, or 6.7%, compared to the linked quarter and increased $126.7 million, or 13.3%, compared to the quarter ended December 31, 2018.
Average total deposits for the quarter ended December 31, 2019, increased by $225.3 million, or 5.7%, over the linked quarter, led by increases of $212.1 million in average business deposits.
For the quarter ended December 31, 2019, average noninterest-bearing deposits as a percentage of total average deposits was 27.4%, compared to 27.1% for the quarter ended September 30, 2019, and 26.9% for the quarter ended December 31, 2018.
Borrowings
Average borrowings for the quarter ended December 31, 2019, decreased by $133.9 million, or 28.1%, compared to the quarter ended September 30, 2019, and decreased by $16.8 million, or 4.7% over the quarter ended December 31, 2018. The decrease in average borrowings in the fourth quarter of 2019 compared to the linked quarter was due to the calling of the $100.0 million long-term Federal Home Loan Bank advance in the fourth quarter.
Stockholders' Equity
Stockholders' equity was $599.3 million at December 31, 2019, an increase of $10.9 million, or 1.9%, compared to $588.4 million at September 30, 2019, and an increase of $49.5 million, or 9.0%, compared to $549.8 million at December 31, 2018.
Credit Quality
The Company recorded provision expense of $2.4 million for the quarter ended December 31, 2019, compared to provision expense of $4.2 million for the linked quarter and $1.7 million for the quarter ended December 31, 2018. The decrease in provision expense from the linked quarter was primarily driven by a decrease in charge-offs and, to a lesser extent, a decrease in the general reserve due to the decrease in the loan portfolio. During the quarter ended December 31, 2019, the Company had net charge-offs of $2.8 million compared to net charge-offs of $3.0 million for the linked quarter.
The Company's net charge-off ratio for the year ended December 31, 2019, is 0.15%, compared to 0.13% for the year ended December 31, 2018. Total nonperforming loans held for investment were $31.1 million at December 31, 2019, compared to $31.5 million and $31.9 million at September 30, 2019, and December 31, 2018, respectively.
Allowance for loan losses as a percentage of total loans held for investment was 0.91% at December 31, 2019, compared to 0.89% and 0.90% at September 30, 2019, and December 31, 2018, respectively. Allowance for loan losses as a percentage of nonperforming loans held for investment was 120.46% at December 31, 2019, compared to 117.97% and 107.37% at September 30, 2019, and December 31, 2018, respectively.
Total past due loans held for investment, defined as loans 30 days past due or more, as a percentage of loans held for investment, was 0.72% at both December 31, 2019, and September 30, 2019, and 0.90% at December 31, 2018.
Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses at the beginning of the first quarter of 2020 due to the adoption of Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, increasing the allowance for credit losses by approximately $1.1 million. The Company does not expect its held-to-maturity or available for sale securities to be materially affected by the adoption of this ASU due to the nature of the portfolios. Our adjustment to the allowance for credit losses at the transition date may vary from our estimate due to refinements in the loss estimation models or factors.
Conference Call
Origin will hold a conference call to discuss its fourth quarter 2019 results on Thursday, January 23, 2020, 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/obnk200123.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.
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.
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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, including expectations regarding interest rate cuts by the Federal Reserve and the impact of those cuts on Origin's results of operations, 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 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 Origin's non-GAAP liquidity measurements and its underlying assumptions or estimates; 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.
Contact:
Chris Reigelman, Origin Bancorp, Inc.
318-497-3177 / chris@origin.bank
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Origin Bancorp, Inc.
Selected Financial Data
At and for the three months ended | |||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Income statement and share amounts | (Dollars in thousands, except per share amounts, unaudited) | ||||||||||||||||||
Net interest income | $ | 44,095 | $ | 44,622 | $ | 42,969 | $ | 42,026 | $ | 42,061 | |||||||||
Provision for credit losses | 2,377 | 4,201 | 1,985 | 1,005 | 1,723 | ||||||||||||||
Noninterest income | 10,818 | 12,880 | 11,176 | 11,604 | 10,588 | ||||||||||||||
Noninterest expense | 36,534 | 35,064 | 37,095 | 35,381 | 35,023 | ||||||||||||||
Income before income tax expense | 16,002 | 18,237 | 15,065 | 17,244 | 15,903 | ||||||||||||||
Income tax expense | 3,175 | 3,620 | 2,782 | 3,089 | 2,725 | ||||||||||||||
Net income | $ | 12,827 | $ | 14,617 | $ | 12,283 | $ | 14,155 | $ | 13,178 | |||||||||
Basic earnings per common share | $ | 0.55 | $ | 0.62 | $ | 0.52 | $ | 0.60 | $ | 0.56 | |||||||||
Diluted earnings per common share | 0.55 | 0.62 | 0.52 | 0.60 | 0.55 | ||||||||||||||
Dividends declared per common share | 0.0925 | 0.0925 | 0.0325 | 0.0325 | 0.0325 | ||||||||||||||
Weighted average common shares outstanding - basic | 23,323,292 | 23,408,499 | 23,585,040 | 23,569,576 | 23,519,778 | ||||||||||||||
Weighted average common shares outstanding - diluted | 23,529,862 | 23,606,956 | 23,786,646 | 23,776,349 | 23,715,919 | ||||||||||||||
Balance sheet data | |||||||||||||||||||
Total loans held for investment | $ | 4,143,195 | $ | 4,188,497 | $ | 3,984,597 | $ | 3,838,343 | $ | 3,789,105 | |||||||||
Total assets | 5,324,626 | 5,396,928 | 5,119,625 | 4,872,201 | 4,821,576 | ||||||||||||||
Total deposits | 4,228,612 | 4,284,317 | 3,855,012 | 3,898,248 | 3,783,138 | ||||||||||||||
Total stockholders' equity | 599,262 | 588,363 | 584,293 | 568,122 | 549,779 | ||||||||||||||
Performance metrics and capital ratios | |||||||||||||||||||
Yield on loans held for investment | 4.95 | % | 5.23 | % | 5.29 | % | 5.28 | % | 5.17 | % | |||||||||
Yield on interest earnings assets | 4.56 | 4.81 | 4.85 | 4.86 | 4.75 | ||||||||||||||
Rate on interest bearing deposits | 1.44 | 1.59 | 1.61 | 1.48 | 1.31 | ||||||||||||||
Rate on total deposits | 1.04 | 1.16 | 1.19 | 1.11 | 0.96 | ||||||||||||||
Net interest margin, fully tax equivalent | 3.58 | 3.69 | 3.70 | 3.80 | 3.82 | ||||||||||||||
Return on average stockholders' equity (annualized) | 8.51 | 9.85 | 8.54 | 10.25 | 9.66 | ||||||||||||||
Return on average assets (annualized) | 0.97 | 1.12 | 0.98 | 1.18 | 1.10 | ||||||||||||||
Efficiency ratio (1) | 66.53 | 60.98 | 68.51 | 65.97 | 66.52 | ||||||||||||||
Book value per common share | $ | 25.52 | $ | 25.06 | $ | 24.58 | $ | 23.92 | $ | 23.17 | |||||||||
Common equity tier 1 to risk-weighted assets (2) | 11.75 | % | 11.43 | % | 11.93 | % | 12.05 | % | 11.94 | % | |||||||||
Tier 1 capital to risk-weighted assets (2) | 11.95 | 11.63 | 12.13 | 12.26 | 12.16 | ||||||||||||||
Total capital to risk-weighted assets (2) | 12.77 | 12.45 | 12.97 | 13.10 | 12.98 | ||||||||||||||
Tier 1 leverage ratio (2) | 10.91 | 10.88 | 11.10 | 11.23 | 11.21 | ||||||||||||||
____________________________
(1) | Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. |
(2) | December 31, 2019, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board. |
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Origin Bancorp, Inc.
Selected Financial Data
Twelve Months Ended December 31, | |||||||
(Dollars in thousands, except per share amounts) | 2019 | 2018 | |||||
Income statement and share amounts | (Unaudited) | ||||||
Net interest income | $ | 173,712 | $ | 153,452 | |||
Provision (benefit) for credit losses | 9,568 | 1,014 | |||||
Noninterest income | 46,478 | 41,240 | |||||
Noninterest expense | 144,074 | 131,236 | |||||
Income before income tax expense | 66,548 | 62,442 | |||||
Income tax expense | 12,666 | 10,837 | |||||
Net income | $ | 53,882 | $ | 51,605 | |||
Basic earnings per common share (1) | $ | 2.30 | $ | 2.21 | |||
Diluted earnings per common share(1) | 2.28 | 2.20 | |||||
Dividends declared per common share | 0.25 | 0.13 | |||||
Weighted average common shares outstanding - basic | 23,470,746 | 21,995,990 | |||||
Weighted average common shares outstanding - diluted | 23,674,065 | 22,194,429 | |||||
Performance metrics | |||||||
Yield on loans held for investment | 5.18 | % | 4.96 | % | |||
Yield on interest earnings assets | 4.77 | 4.53 | |||||
Rate on interest bearing deposits | 1.53 | 1.10 | |||||
Rate on total deposits | 1.12 | 0.81 | |||||
Net interest margin, fully tax equivalent | 3.69 | 3.75 | |||||
Return on average stockholders' equity | 9.27 | 10.07 | |||||
Return on average assets | 1.06 | 1.16 | |||||
Efficiency ratio (2) | 65.43 | 67.41 | |||||
____________________________
(1) | Due to the combined impact of the repurchase of common stock on the quarterly average common shares outstanding calculation compared to the impact of the repurchase of common stock shares on the year-to-date average common outstanding calculation, and the effect of rounding, the sum of the 2019 quarterly earnings per common share will not equal the 2019 year-to-date earnings per common share amount. Additionally, due to the impact of average preferred shares outstanding on the calculation of earnings per share for the 2018 period, the sum of quarterly periods may not agree to the amount disclosed for the 2018 year-to-date period. |
(2) | Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. |
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Origin Bancorp, Inc.
Consolidated Balance Sheets
(Dollars in thousands) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Assets | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Cash and due from banks | $ | 62,160 | $ | 79,005 | $ | 75,204 | $ | 66,312 | $ | 71,008 | |||||||||
Interest-bearing deposits in banks | 229,358 | 229,757 | 124,356 | 44,928 | 45,670 | ||||||||||||||
Total cash and cash equivalents | 291,518 | 308,762 | 199,560 | 111,240 | 116,678 | ||||||||||||||
Securities: | |||||||||||||||||||
Available for sale | 501,070 | 492,461 | 548,980 | 563,826 | 575,644 | ||||||||||||||
Held to maturity | 28,620 | 28,759 | 28,897 | 19,033 | 19,169 | ||||||||||||||
Securities carried at fair value through income | 11,513 | 11,745 | 11,615 | 11,510 | 11,361 | ||||||||||||||
Total securities | 541,203 | 532,965 | 589,492 | 594,369 | 606,174 | ||||||||||||||
Non-marketable equity securities held in other financial institutions | 39,808 | 49,205 | 49,008 | 42,314 | 42,149 | ||||||||||||||
Loans held for sale | 64,837 | 67,122 | 58,408 | 42,265 | 52,210 | ||||||||||||||
Loans | 4,143,195 | 4,188,497 | 3,984,597 | 3,838,343 | 3,789,105 | ||||||||||||||
Less: allowance for loan losses | 37,520 | 37,126 | 36,683 | 35,578 | 34,203 | ||||||||||||||
Loans, net of allowance for loan losses | 4,105,675 | 4,151,371 | 3,947,914 | 3,802,765 | 3,754,902 | ||||||||||||||
Premises and equipment, net | 80,457 | 80,921 | 80,672 | 78,684 | 75,014 | ||||||||||||||
Mortgage servicing rights | 20,697 | 19,866 | 21,529 | 23,407 | 25,114 | ||||||||||||||
Cash surrender value of bank-owned life insurance | 37,961 | 37,755 | 33,070 | 32,888 | 32,706 | ||||||||||||||
Goodwill and other intangible assets, net | 31,540 | 31,842 | 32,144 | 32,497 | 32,861 | ||||||||||||||
Accrued interest receivable and other assets | 110,930 | 117,119 | 107,828 | 111,772 | 83,768 | ||||||||||||||
Total assets | $ | 5,324,626 | $ | 5,396,928 | $ | 5,119,625 | $ | 4,872,201 | $ | 4,821,576 | |||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||
Noninterest-bearing deposits | $ | 1,077,706 | $ | 1,154,660 | $ | 1,003,499 | $ | 977,919 | $ | 951,015 | |||||||||
Interest-bearing deposits | 2,360,096 | 2,309,387 | 2,011,719 | 2,101,706 | 2,027,720 | ||||||||||||||
Time deposits | 790,810 | 820,270 | 839,794 | 818,623 | 804,403 | ||||||||||||||
Total deposits | 4,228,612 | 4,284,317 | 3,855,012 | 3,898,248 | 3,783,138 | ||||||||||||||
FHLB advances and other borrowings | 417,190 | 419,681 | 601,346 | 335,053 | 445,224 | ||||||||||||||
Junior subordinated debentures | 9,671 | 9,664 | 9,657 | 9,651 | 9,644 | ||||||||||||||
Accrued expenses and other liabilities | 69,891 | 94,903 | 69,317 | 61,127 | 33,791 | ||||||||||||||
Total liabilities | 4,725,364 | 4,808,565 | 4,535,332 | 4,304,079 | 4,271,797 | ||||||||||||||
Commitments and contingencies | — | — | — | — | — | ||||||||||||||
Stockholders' equity | |||||||||||||||||||
Common stock | 117,405 | 117,409 | 118,871 | 118,730 | 118,633 | ||||||||||||||
Additional paid-in capital | 235,623 | 235,018 | 243,002 | 242,579 | 242,041 | ||||||||||||||
Retained earnings | 239,901 | 229,246 | 216,801 | 205,289 | 191,585 | ||||||||||||||
Accumulated other comprehensive income (loss) | 6,333 | 6,690 | 5,619 | 1,524 | (2,480 | ) | |||||||||||||
Total stockholders' equity | 599,262 | 588,363 | 584,293 | 568,122 | 549,779 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 5,324,626 | $ | 5,396,928 | $ | 5,119,625 | $ | 4,872,201 | $ | 4,821,576 | |||||||||
7
Origin Bancorp, Inc.
Consolidated Quarterly Statements of Income
Three months ended | |||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Interest and dividend income | (Dollars in thousands, except per share amounts, unaudited) | ||||||||||||||||||
Interest and fees on loans | $ | 52,331 | $ | 53,932 | $ | 51,461 | $ | 49,175 | $ | 47,819 | |||||||||
Investment securities-taxable | 2,640 | 2,786 | 3,208 | 3,341 | 3,292 | ||||||||||||||
Investment securities-nontaxable | 772 | 826 | 871 | 858 | 996 | ||||||||||||||
Interest and dividend income on assets held in other financial institutions | 976 | 1,262 | 1,523 | 1,120 | 951 | ||||||||||||||
Total interest and dividend income | 56,719 | 58,806 | 57,063 | 54,494 | 53,058 | ||||||||||||||
Interest expense | |||||||||||||||||||
Interest-bearing deposits | 11,056 | 11,623 | 11,540 | 10,497 | 8,980 | ||||||||||||||
FHLB advances and other borrowings | 1,428 | 2,420 | 2,415 | 1,834 | 1,878 | ||||||||||||||
Junior subordinated debentures | 140 | 141 | 139 | 137 | 139 | ||||||||||||||
Total interest expense | 12,624 | 14,184 | 14,094 | 12,468 | 10,997 | ||||||||||||||
Net interest income | 44,095 | 44,622 | 42,969 | 42,026 | 42,061 | ||||||||||||||
Provision for credit losses | 2,377 | 4,201 | 1,985 | 1,005 | 1,723 | ||||||||||||||
Net interest income after provision for credit losses | 41,718 | 40,421 | 40,984 | 41,021 | 40,338 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges and fees | 3,488 | 3,620 | 3,435 | 3,316 | 3,349 | ||||||||||||||
Mortgage banking revenue | 3,359 | 3,092 | 3,252 | 2,606 | 2,288 | ||||||||||||||
Insurance commission and fee income | 2,428 | 3,203 | 3,036 | 3,510 | 2,481 | ||||||||||||||
Gain (loss) on sales of securities, net | — | 20 | — | — | (8 | ) | |||||||||||||
Gain (loss) on sales and disposals of other assets, net | (38 | ) | (132 | ) | (166 | ) | 3 | (23 | ) | ||||||||||
Limited partnership investment (loss) income | (267 | ) | 279 | (418 | ) | 400 | 745 | ||||||||||||
Swap fee income | 151 | 1,351 | 172 | 511 | 299 | ||||||||||||||
Change in fair value of equity investments | — | — | 367 | — | — | ||||||||||||||
Other fee income | 440 | 414 | 360 | 276 | 592 | ||||||||||||||
Other income | 1,257 | 1,033 | 1,138 | 982 | 865 | ||||||||||||||
Total noninterest income | 10,818 | 12,880 | 11,176 | 11,604 | 10,588 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 22,074 | 21,523 | 22,764 | 22,613 | 21,333 | ||||||||||||||
Occupancy and equipment, net | 4,241 | 4,274 | 4,200 | 4,044 | 3,830 | ||||||||||||||
Data processing | 1,801 | 1,763 | 1,810 | 1,587 | 1,839 | ||||||||||||||
Electronic banking | 936 | 924 | 892 | 689 | 699 | ||||||||||||||
Communications | 454 | 411 | 647 | 586 | 513 | ||||||||||||||
Advertising and marketing | 991 | 930 | 1,089 | 798 | 1,351 | ||||||||||||||
Professional services | 878 | 956 | 839 | 904 | 1,024 | ||||||||||||||
Regulatory assessments | 679 | (387 | ) | 691 | 711 | 666 | |||||||||||||
Loan related expenses | 1,400 | 1,315 | 790 | 669 | 810 | ||||||||||||||
Office and operations | 1,632 | 1,712 | 1,849 | 1,481 | 1,516 | ||||||||||||||
Intangible asset amortization | 302 | 302 | 353 | 364 | 367 | ||||||||||||||
Franchise tax expense | 496 | 683 | 492 | 489 | 309 | ||||||||||||||
Other expenses | 650 | 658 | 679 | 446 | 766 | ||||||||||||||
Total noninterest expense | 36,534 | 35,064 | 37,095 | 35,381 | 35,023 | ||||||||||||||
Income before income tax expense | 16,002 | 18,237 | 15,065 | 17,244 | 15,903 | ||||||||||||||
Income tax expense | 3,175 | 3,620 | 2,782 | 3,089 | 2,725 | ||||||||||||||
Net income | $ | 12,827 | $ | 14,617 | $ | 12,283 | $ | 14,155 | $ | 13,178 | |||||||||
Basic earnings per common share | $ | 0.55 | $ | 0.62 | $ | 0.52 | $ | 0.60 | $ | 0.56 | |||||||||
Diluted earnings per common share | 0.55 | 0.62 | 0.52 | 0.60 | 0.55 | ||||||||||||||
8
Origin Bancorp, Inc.
Loan Data
At and for the three months ended | |||||||||||||||||||
Loans held for investment | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Loans secured by real estate: | (Dollars in thousands, unaudited) | ||||||||||||||||||
Commercial real estate | $ | 1,296,847 | $ | 1,305,006 | $ | 1,219,470 | $ | 1,202,269 | $ | 1,228,402 | |||||||||
Construction/land/land development | 517,688 | 509,905 | 524,999 | 488,167 | 429,660 | ||||||||||||||
Residential real estate | 689,555 | 680,803 | 651,988 | 638,064 | 629,714 | ||||||||||||||
Total real estate | 2,504,090 | 2,495,714 | 2,396,457 | 2,328,500 | 2,287,776 | ||||||||||||||
Commercial and industrial | 1,343,475 | 1,367,595 | 1,341,652 | 1,287,300 | 1,272,566 | ||||||||||||||
Mortgage warehouse lines of credit | 274,659 | 304,917 | 224,939 | 202,744 | 207,871 | ||||||||||||||
Consumer | 20,971 | 20,271 | 21,549 | 19,799 | 20,892 | ||||||||||||||
Total loans held for investment | 4,143,195 | 4,188,497 | 3,984,597 | 3,838,343 | 3,789,105 | ||||||||||||||
Less: Allowance for loan losses | 37,520 | 37,126 | 36,683 | 35,578 | 34,203 | ||||||||||||||
Loans held for investment, net | $ | 4,105,675 | $ | 4,151,371 | $ | 3,947,914 | $ | 3,802,765 | $ | 3,754,902 | |||||||||
Nonperforming assets | |||||||||||||||||||
Nonperforming loans held for investment | |||||||||||||||||||
Commercial real estate | $ | 6,994 | $ | 7,460 | $ | 9,423 | $ | 8,622 | $ | 8,281 | |||||||||
Construction/land/land development | 4,337 | 860 | 1,111 | 922 | 935 | ||||||||||||||
Residential real estate | 5,132 | 5,254 | 4,978 | 5,196 | 6,668 | ||||||||||||||
Commercial and industrial | 14,520 | 17,745 | 14,810 | 15,309 | 15,792 | ||||||||||||||
Consumer | 163 | 153 | 156 | 206 | 180 | ||||||||||||||
Total nonperforming loans held for investment | 31,146 | 31,472 | 30,478 | 30,255 | 31,856 | ||||||||||||||
Nonperforming loans held for sale | 927 | 1,462 | 2,049 | 1,390 | 741 | ||||||||||||||
Total nonperforming loans | 32,073 | 32,934 | 32,527 | 31,645 | 32,597 | ||||||||||||||
Repossessed assets | 4,753 | 4,565 | 3,554 | 3,659 | 3,739 | ||||||||||||||
Total nonperforming assets | $ | 36,826 | $ | 37,499 | $ | 36,081 | $ | 35,304 | $ | 36,336 | |||||||||
Classified assets | $ | 69,870 | $ | 73,516 | $ | 80,124 | $ | 77,619 | $ | 82,914 | |||||||||
Past due loans held for investment (1) | 29,980 | 29,965 | 31,884 | 37,841 | 34,085 | ||||||||||||||
Allowance for loan losses | |||||||||||||||||||
Balance at beginning of period | $ | 37,126 | $ | 36,683 | $ | 35,578 | $ | 34,203 | $ | 35,727 | |||||||||
Provision for loan losses | 3,167 | 3,435 | 1,782 | 823 | 1,886 | ||||||||||||||
Loans charged off | 3,268 | 5,415 | 840 | 608 | 3,583 | ||||||||||||||
Loan recoveries | 495 | 2,423 | 163 | 1,160 | 173 | ||||||||||||||
Net charge-offs (recoveries) | 2,773 | 2,992 | 677 | (552 | ) | 3,410 | |||||||||||||
Balance at end of period | $ | 37,520 | $ | 37,126 | $ | 36,683 | $ | 35,578 | $ | 34,203 | |||||||||
Credit quality ratios | |||||||||||||||||||
Total nonperforming assets to total assets | 0.69 | % | 0.69 | % | 0.70 | % | 0.72 | % | 0.75 | % | |||||||||
Total nonperforming loans to total loans | 0.76 | 0.77 | 0.80 | 0.82 | 0.85 | ||||||||||||||
Nonperforming loans held for investment to loans held for investment | 0.75 | 0.75 | 0.76 | 0.79 | 0.84 | ||||||||||||||
Past due loans held for investment to loans held for investment | 0.72 | 0.72 | 0.80 | 0.99 | 0.90 | ||||||||||||||
Allowance for loan losses to nonperforming loans held for investment | 120.46 | 117.97 | 120.36 | 117.59 | 107.37 | ||||||||||||||
Allowance for loan losses to total loans held for investment | 0.91 | 0.89 | 0.92 | 0.93 | 0.90 | ||||||||||||||
Net charge-offs (recoveries) to total average loans held for investment (annualized) | 0.26 | 0.29 | 0.07 | (0.06 | ) | 0.37 | |||||||||||||
(1) | Past due loans held for investment are defined as loans 30 days past due or more. |
9
Origin Bancorp, Inc.
Average Balances and Yields/Rates
Three months ended | ||||||||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | ||||||||||||||||||
Average Balance | Yield/Rate | Average Balance | Yield/Rate | Average Balance | Yield/Rate | |||||||||||||||
Assets | (Dollars in thousands, unaudited) | |||||||||||||||||||
Commercial real estate | $ | 1,307,023 | 5.03 | % | $ | 1,259,274 | 5.22 | % | $ | 1,176,837 | 5.07 | % | ||||||||
Construction/land/land development | 526,494 | 5.20 | 533,328 | 5.48 | 407,120 | 5.55 | ||||||||||||||
Residential real estate | 694,436 | 4.95 | 676,650 | 5.07 | 604,383 | 4.87 | ||||||||||||||
Commercial and industrial | 1,356,316 | 4.88 | 1,340,684 | 5.26 | 1,251,969 | 5.22 | ||||||||||||||
Mortgage warehouse lines of credit | 262,392 | 4.47 | 236,042 | 4.92 | 187,801 | 5.54 | ||||||||||||||
Consumer | 20,889 | 6.68 | 20,959 | 6.90 | 21,809 | 6.76 | ||||||||||||||
Loans held for investment | 4,167,550 | 4.95 | 4,066,937 | 5.23 | 3,649,919 | 5.17 | ||||||||||||||
Loans held for sale | 42,873 | 2.63 | 33,814 | 4.15 | 22,168 | 4.70 | ||||||||||||||
Loans Receivable | 4,210,423 | 4.93 | 4,100,751 | 5.22 | 3,672,087 | 5.17 | ||||||||||||||
Investment securities-taxable | 437,626 | 2.41 | 448,766 | 2.48 | 499,489 | 2.64 | ||||||||||||||
Investment securities-nontaxable | 100,705 | 3.07 | 103,053 | 3.21 | 113,183 | 3.52 | ||||||||||||||
Non-marketable equity securities held in other financial institutions | 48,669 | 2.88 | 49,025 | 2.76 | 40,176 | 2.64 | ||||||||||||||
Interest-bearing balances due from banks | 139,508 | 1.77 | 152,580 | 2.39 | 108,126 | 2.51 | ||||||||||||||
Total interest-earning assets | 4,936,931 | 4.56 | % | 4,854,175 | 4.81 | % | 4,433,061 | 4.75 | % | |||||||||||
Noninterest-earning assets(1) | 335,048 | 325,374 | 308,125 | |||||||||||||||||
Total assets | $ | 5,271,979 | $ | 5,179,549 | $ | 4,741,186 | ||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||
Savings and interest-bearing transaction accounts | $ | 2,248,863 | 1.21 | % | $ | 2,071,990 | 1.36 | % | $ | 1,932,958 | 1.10 | % | ||||||||
Time deposits | 803,344 | 2.08 | 828,993 | 2.16 | 789,816 | 1.81 | ||||||||||||||
Total interest-bearing deposits | 3,052,207 | 1.44 | 2,900,983 | 1.59 | 2,722,774 | 1.31 | ||||||||||||||
FHLB advances and other borrowings | 342,000 | 1.62 | 475,860 | 1.96 | 358,810 | 1.95 | ||||||||||||||
Securities sold under agreements to repurchase | 18,198 | 0.65 | 25,302 | 1.09 | 37,075 | 1.23 | ||||||||||||||
Junior subordinated debentures | 9,668 | 5.67 | 9,661 | 5.69 | 9,641 | 5.66 | ||||||||||||||
Total interest-bearing liabilities | 3,422,073 | 1.46 | % | 3,411,806 | 1.65 | % | 3,128,300 | 1.39 | % | |||||||||||
Noninterest-bearing deposits | 1,150,381 | 1,076,344 | 1,001,033 | |||||||||||||||||
Other liabilities(1) | 101,600 | 102,895 | 70,648 | |||||||||||||||||
Total liabilities | 4,674,054 | 4,591,045 | 4,199,981 | |||||||||||||||||
Stockholders' Equity | 597,925 | 588,504 | 541,205 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 5,271,979 | $ | 5,179,549 | $ | 4,741,186 | ||||||||||||||
Net interest spread | 3.10 | % | 3.16 | % | 3.36 | % | ||||||||||||||
Net interest margin | 3.54 | % | 3.65 | % | 3.76 | % | ||||||||||||||
Net interest income margin - (tax- equivalent)(2) | 3.58 | % | 3.69 | % | 3.82 | % | ||||||||||||||
____________________________
(1) | Includes Government National Mortgage Association ("GNMA") repurchase average balances of $24.5 million, $23.7 million and $29.2 million for the three months ended December 31, 2019, September 30, 2019, and December 31, 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. |
10
Origin Bancorp, Inc.
Non-GAAP Financial Measures
(Dollars in thousands, except per share amounts) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Calculation of Tangible Common Equity: | |||||||||||||||||||
Total Common Stockholders' Equity | $ | 599,262 | $ | 588,363 | $ | 584,293 | $ | 568,122 | $ | 549,779 | |||||||||
Less: Goodwill and Other Intangible Assets, Net | 31,540 | 31,842 | 32,144 | 32,497 | 32,861 | ||||||||||||||
Tangible Common Equity | $ | 567,722 | $ | 556,521 | $ | 552,149 | $ | 535,625 | $ | 516,918 | |||||||||
Calculation of Tangible Book Value per Common Share: | |||||||||||||||||||
Common Shares Outstanding at the End of the Period | 23,480,945 | 23,481,781 | 23,774,238 | 23,745,985 | 23,726,559 | ||||||||||||||
Tangible Book Value per Common Share | $ | 24.18 | $ | 23.70 | $ | 23.22 | $ | 22.56 | $ | 21.79 | |||||||||
11
4Q AND FULL YEAR TWENTY19 INVESTOR 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, including any expected purchases of its outstanding common stock, and related transactions, and other projections based on macroeconomic and industry trends, including expectations regarding interest rate cuts by the Federal Reserve and the impact of those cuts on Origin's results of operations, 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 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 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 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. 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. 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 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 ORIGIN BANCORP, INC. _______
FINANCIAL RESULTS - FOURTH QUARTER 2019 DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS Linked 4Q2019 3Q2019 4Q2018 Q Δ YoY Δ Income Statement Net Interest Income $ 44,095 $ 44,622 $ 42,061 (1.2)% 4.8 % Provision for Credit Losses 2,377 4,201 1,723 (43.4)% 38.0 % Noninterest Income 10,818 12,880 10,588 (16.0)% 2.2 % Noninterest Expense 36,534 35,064 35,023 4.2 % 4.3 % Net Income 12,827 14,617 13,178 (12.2)% (2.7)% Diluted EPS $ 0.55 $ 0.62 $ 0.55 (11.3)% — % Dividends Declared per Common Share $ 0.0925 $ 0.0925 $ 0.0325 — % 184.6 % Key Drivers/Ratios Average Loans Held for Investment $ 4,167,550 $ 4,066,937 $ 3,649,919 2.5 % 14.2 % Average Deposits 4,202,588 3,977,327 3,723,807 5.7 % 12.9 % Net Interest Margin ("NIM") - fully tax equivalent ("FTE") 3.58% 3.69% 3.82% -11 bp -24 bp Efficiency Ratio 66.53% 60.98% 66.52% 555 bp 1 bp Return on Average Assets ("ROAA") (annualized) 0.97% 1.12% 1.10% -15 bp -13 bp Return on Average Equity ("ROAE") (annualized) 8.51% 9.85% 9.66% -134 bp -115 bp 3 ORIGIN BANCORP, INC. _______
FINANCIAL RESULTS - FULL YEAR 2019 DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS As of and Years Ended December 31, YoY $ Δ YoY % Δ Balance Sheet 2019 2018 Total Loans Held For Investment ("LHFI") $ 4,143,195 $ 3,789,105 $ 354,090 9.3 % Total Assets 5,324,626 4,821,576 503,050 10.4 % Total Deposits 4,228,612 3,783,138 445,474 11.8 % Tangible Common Equity1 567,722 516,918 50,804 9.8 % Book Value per Common Share $ 25.52 $ 23.17 $ 2.35 10.1 % Tangible Book Value per Common Share1 $ 24.18 $ 21.79 $ 2.39 11.0 % Income Statement Net Interest Income $ 173,712 $ 153,452 $ 20,260 13.2 % Provision for Credit Losses 9,568 1,014 8,554 843.6 % Noninterest Income 46,478 41,240 5,238 12.7 % Noninterest Expense 144,074 131,236 12,838 9.8 % Net Income 53,882 51,605 2,277 4.4 % Diluted EPS $ 2.28 $ 2.20 $ 0.08 3.6 % Dividends Declared per Common Share $ 0.25 $ 0.13 $ 0.12 92.3 % Selected Ratios NIM - FTE 3.69% 3.75% -6 bp (1.6)% Efficiency Ratio 65.43% 67.41% -198 bp (2.9)% ROAA 1.06% 1.16% -10 bp (8.6)% ROAE 9.27% 10.07% -80 bp (7.9)% 1As used in this presentation, tangible common 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 13 of this presentation. 4 ORIGIN BANCORP, INC. _______
NET INTEREST INCOME AND NIM TRENDS DOLLARS IN THOUSANDS • Net interest income increased $2.0 million from 4Q18 to 4Q19, Yield on LHFI and decreased $500 thousand from 3Q19 to 4Q19. 5.50% 5.50% • Asset sensitive balance sheet throughout 2019 lead to quarterly 5.28% 5.31% NIM compression of 24 bps from 4Q18 to 4Q19. 4.95% 5.17% 5.28% 5.29% 5.23% 4.83% • While the average 1M LIBOR and average Prime Rate declined 2.50% 2.44% 56 bps and 45 bps, respectively, from 4Q18 to 4Q19, average 2.35% 2.18% yields on LHFI only fell 22 bps during the same period. 1.79% • Noninterest bearing deposits reduced total cost of deposits by 40 bps during 4Q19, compared to 35 bps during 4Q18. 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 $44,622 $44,095 $42,061 $42,026 $42,969 Yield on LHFI Avg. 1M LIBOR Avg. Prime Rate Cost of Funds 3.82% 3.80% 1.61% 1.59% 3.70% 3.69% 1.48% 1.44% 1.31% 3.58% 1.29% 1.25% 1.20% 1.06% 1.10% 1.19% 1.16% 1.11% 1.04% 0.96% 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 Quarter-To-Date Cost of Interest Bearing Deposits Net Interest Income NIM (FTE) Cost of Total Deposits Cost of Total Deposits & Borrowings 5 ORIGIN BANCORP, INC. _______
NET REVENUE DISTRIBUTION DOLLARS IN THOUSANDS Net Interest Income \ Noninterest Income Noninterest Income $12,880 $57,502 $54,913 $11,604 $1,614 $53,630 $54,145 $11,176 $52,649 $10,818 $12,880 $10,588 $1,661 $1,281 $1,351 $11,176 $10,818 $10,588 $11,604 $1,392 $511 $172 $2,171 $151 $3,203 $299 $3,036 $2,428 $3,510 $2,481 $44,622 $42,061 $42,026 $42,969 $44,095 $3,252 $3,092 $3,359 $2,288 $2,606 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 $3,349 $3,316 $3,435 $3,620 $3,488 Net Interest Income Noninterest Income 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 • Noninterest income regularly accounts for approximately 20% Service Charges & Fees of total net revenue. Mortgage Banking Revenue • Mortgage banking revenue has trended upwards with our continued focus on enhancing a community banking mortgage Insurance Commission & Fee Income model. Swap Fee Income • Swap fee income declined in 4Q19 from 3Q19 due to fewer Other customer swaps originated, but swap fee income generation continues to be a focus into 2020. • Insurance commissions revenue was seasonably low in 4Q19. 6 ORIGIN BANCORP, INC. _______
NONINTEREST EXPENSE COMPOSITION DOLLARS IN THOUSANDS $37,095 $36,534 $35,023 $35,381 $35,064 • Improving trend in efficiency ratio, coupled with a decline in the ratio of NIE to average assets as a result of expense stabilization in $6,472 $6,786 $5,656 2019. $6,505 $5,792 $1,849 • Efficiency improvements during year partially offset by declining $1,481 $1,632 $1,712 $1,516 $1,810 interest margin. $1,587 $1,801 $1,763 $1,839 $4,200 $4,044 $4,241 • Other noninterest expense increased in 4Q19 compared to 3Q19 $4,274 $3,830 by $1.0 million, driven largely by 3Q19 FDIC insurance fund credit. • 2020 focus on technology strategy to build efficient scale to support additional organic growth. $22,613 $22,764 Efficiency Ratio $21,333 $21,523 $22,074 100% 3.5% ) % ( ) 2.93% 2.95% 2.95% % 3.0% S ( 2.75% T E O 80% I 2.69% S T S A 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 A R 68.51% E Y 2.5% G C A N R Salaries and Employee Benefits E 66.52% 65.97% 66.53% E C I 60% V F 60.98% A / F 2.0% Occupancy and Equipment, net E E I N Data Processing 40% 1.5% Office and Operations 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 Other 7 ORIGIN BANCORP, INC. _______
DEPOSITS Deposits Loans & Deposits by State at 12/31/19 DOLLARS IN MILLIONS Loans Deposits $4,284 $4,229 $3,783 $3,898 $3,855 30% 45% $820 $791 $819 $840 $796 $330 $153 $332 $328 $139 $1,979 $2,207 $1,704 $1,773 $1,873 16% $1,155 $951 $978 $1,003 $1,078 54% 11% 44% 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 Noninterest-bearing Interest-bearing Brokered Time Deposits Deposit Change by Region DOLLARS IN MILLIONS As of December 31, • Increased total deposits of $446 million or 11.8%, while 2018 2019 simultaneously reducing brokered deposits by $179 million LA $ 1,678 $ 1,765 during 2019, creating core deposit increase of 18.1% during TX 1,393 1,851 2019. MS 380 460 • Noninterest bearing growth accounted for over 28% of total Brokered 332 153 deposit growth during 2019. Total $ 3,783 $ 4,229 2018 Growth 2019 Growth • Louisiana continues to be an important source of low-cost deposits (87 bps total cost in 2019) redeployed into higher loan LA — % 5.2 % growth markets in Texas. TX 18.9 % 32.9 % MS (1.6)% 21.1 % • Continued focus on lowering deposit costs as rate guarantees Brokered 20.3 % (53.9)% mature in growth markets in early 2020. Total Growth 7.7 % 11.8 % 8 ORIGIN BANCORP, INC. _______
WELL DIVERSIFIED LOAN PORTFOLIO LHFI at 12/31/19 LHFI: Fixed \ Variable (by Index) at 12/31/19 DOLLARS IN MILLIONS Amounts % of Total Residential & Other: 17% Fixed $ 1,661 40% Commercial & Industrial ("C&I"): 1 month LIBOR 1,117 27% 32% 12 month LIBOR 254 6% Construction/ Land/Land Prime 1,047 25% Development ("C&D"): 12% Other 64 2% Total LHFI $ 4,143 100% Average LHFI Non-Owner Owner Occupied CRE: Occupied CRE: 11% 21% Mortgage Warehouse: 7% $4,168 14.2% $4,067 • LHFI ended the year at $4.14 billion, an increase of $354.1 million, or 9.3%, compared to the end of 2018. $3,890 • Average loans held for investment increased $517.6 million (14.2%) $3,762 from 4Q18 to 4Q19. $3,650 • Approximately 50% of LHFI are associated with C&I, Owner Occupied CRE and Mortgage Warehouse. • Variable rate LHFI make up 60% of total LHFI, with over 25% resetting monthly based on LIBOR. • Loan make-up consistent with prior year. 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 9 ORIGIN BANCORP, INC. _______
ASSET QUALITY TRENDS 0.99% 0.90% 0.84% 0.80% 0.79% 0.76% 0.75% 0.72% 0.75% 0.72% 0.37% 0.29% 0.26% 0.07% (0.06)% 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 Nonperforming LHFI / LHFI Past due LHFI / LHFI Net Charge-Off s 1/ Average LHFI (annualized) 1 Based on annualized quarterly net charge-offs. Year-to-date net charge-offs were $5.9 million (0.15% net charge-offs/average LHFI) and $4.5 million (0.13% net charge-offs/ average LHFI) at December 31, 2019 and 2018, respectively. 10 ORIGIN BANCORP, INC. _______
CAPITAL RATIOS Company Level Bank Level 3Q2019 4Q2019 3Q2019 4Q2019 12.8% 12.5% 12.1% 12.4% 11.6% 11.9% 11.3% 11.6% 10.4% 10.7% 10.9% 10.9% 10.5% 10.6% 1 TCE/TA Tier 1 Tier 1 Capital to Total Capital to Tier 1 Tier 1 Capital to Total Capital to Leverage Risk-Weighted Risk-Weighted Leverage Risk-Weighted Risk-Weighted Ratio Assets Ratio Assets Ratio Ratio Assets Ratio Assets Ratio • Stock Buyback Program Authorized a $40.0 million stock buyback program 2019 Repurchased $10.1 million in common stock (300,000 shares) Capital Actions • 2019 Return to Shareholders Return of $16.0 million ($10.1 million in stock buyback and $5.9 million in common dividends) YTD 1 As used in this presentation, tangible common equity (TCE) and tangible common equity to tangible assets (TA) are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, see slide 13 of this presentation 11 ORIGIN BANCORP, INC. _______
OUR STRATEGIC FOCUS STRATEGIC FOCUS KEY ACTION ITEMS Increase scale across the franchise, Improve operational efficiency and particularly in Houston increase profitability Focused effort to defend 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 12 ORIGIN BANCORP, INC. _______
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS 4Q2019 3Q2019 2Q2019 1Q2019 4Q2018 Calculation of Tangible Common Equity: Total Common Stockholders' Equity $ 599,262 $ 588,363 $ 584,293 $ 568,122 $ 549,779 Less: Goodwill and Other Intangible Assets, Net 31,540 31,842 32,144 32,497 32,861 Tangible Common Equity $ 567,722 $ 556,521 $ 552,149 $ 535,625 $ 516,918 Common Shares Outstanding at the End of the Period 23,480,945 23,481,781 23,774,238 23,745,985 23,726,559 Book Value per Common Share $ 25.52 $ 25.06 $ 24.58 $ 23.92 $ 23.17 Calculation of Tangible Assets: Total Assets $ 5,324,626 $ 5,396,928 $ 5,119,625 $ 4,872,201 $ 4,821,576 Less: Goodwill and Other Intangible Assets, Net 31,540 31,842 32,144 32,497 32,861 Tangible Assets $ 5,293,086 $ 5,365,086 $ 5,087,481 $ 4,839,704 $ 4,788,715 Tangible Common Equity to Tangible Assets 10.73% 10.37% 10.85% 11.07% 10.79% Calculation of Tangible Book Value per Common Share: Common Shares Outstanding at the End of the Period 23,480,945 23,481,781 23,774,238 23,745,985 23,726,559 Tangible Book Value per Common Share $ 24.18 $ 23.70 $ 23.22 $ 22.56 $ 21.79 13 ORIGIN BANCORP, INC. _______
Exhibit 99.3
FOR IMMEDIATE RELEASE
January 22, 2020
Origin Bancorp, Inc. Announces Declaration of Quarterly Cash Dividend
RUSTON, LOUISIANA (January 22, 2020) - Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin"), the holding company for Origin Bank, today announced that on January 22, 2020, 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 February 28, 2020, to stockholders of record as of the close of business on February 14, 2020.
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