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)
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) | ||
(318 ) 255-2222
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:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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 April 22, 2020, Origin Bancorp, Inc. (the "Registrant") issued a press release announcing its first quarter 2020 results of operations. A copy of the press release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.
On Thursday, April 23, 2020, at 8:00 a.m. Central Time, the Registrant will host an investor conference call and webcast to review its first quarter 2020 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 April 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 April 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 May 29, 2020, to stockholders of record as of the close of business on May 15, 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: April 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 FIRST QUARTER 2020
RUSTON, Louisiana (April 22, 2020) - Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $753,000 for the quarter ended March 31, 2020. This represents a decrease of $12.1 million from the quarter ended December 31, 2019, and a decrease of $13.4 million from the quarter ended March 31, 2019. Diluted earnings per share for the quarter ended March 31, 2020, was $0.03, down $0.52 from the linked quarter and down $0.57 from the quarter ended March 31, 2019. The decline was driven by increases in provision expense of $16.2 million and $17.5 million over the linked quarter and quarter ended March 31, 2019, respectively. Provision expense was elevated due to the forecasting nature of CECL and the economic uncertainty surrounding the impact of COVID-19. Pretax pre-provision earnings for the quarter was $18.9 million, a 2.6% increase on a linked quarter and 3.3% increase on prior year quarter basis. Diluted earnings per share was $0.03 for the quarter, and the efficiency ratio declined to 65.7%, an 84 basis point decrease from the linked quarter.
"At Origin we talk about being a company that is different, that is responsive, that is nimble, that delivers for our employees, customers, communities and shareholders, and prides itself on our culture." said Drake Mills, Chairman, President and CEO of Origin Bancorp, Inc. "Over the past 60 days those claims and statements have been tested like never before, and our team has delivered. I am proud to lead an incredible organization with incredible people who, in these very tough times, have not wavered in their commitment to our company, our culture, our customers and our core values."
Financial Highlights
• | Net income for the quarter ended March 31, 2020, was $753,000, compared to $12.8 million for the linked quarter and $14.2 million for the quarter ended March 31, 2019. |
• | Diluted earnings per share for the quarter ended March 31, 2020, were $0.03, compared to $0.55 for the linked quarter and $0.60 for the quarter end March 31, 2019. |
• | Net interest income was $42.8 million for the quarter ended March 31, 2020, compared to $44.1 million for the linked quarter and $42.0 million for the quarter ended March 31, 2019. The net interest margin, fully tax equivalent, was 3.44% for the quarter ended March 31, 2020, compared to 3.58% for the linked quarter and 3.80% for the quarter ended March 31, 2019. |
• | Provision expense was $18.5 million for the quarter ended March 31, 2020, compared to provision expense of $2.4 million for the linked quarter and $1.0 million for the quarter ended March 31, 2019. |
• | Pre-tax pre-provision earnings were $18.9 million for the quarter ended March 31, 2020, compared to $18.4 million for the linked quarter and $18.2 million for the quarter ended March 31, 2019. |
• | Book value per common share was $25.84 at March 31, 2020, compared to $25.52, at December 31, 2019. Tangible book value per common share was $24.51 at March 31, 2020, compared to $24.18 for the quarter ended December 31, 2019. |
• | Total loans held for investment were $4.48 billion, an increase of $338.0 million, or 8.2%, from December 31, 2019, and an increase of $642.8 million, or 16.7%, from March 31, 2019. |
• | Origin Bank completed its offering of $70 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes in February 2020, which qualifies as Tier 2 capital. |
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Coronavirus (COVID-19)
While the past month has been challenging, Origin continues to operate while keeping the safety and well-being of employees and customers as the Company's top priority. The Company continues to meet customers’ needs and has tried to minimize any inconvenience to its customers. All offices remain open, with all drive-thrus fully operational, while lobby access is by appointment only. Key operational initiatives implemented during the pandemic also include:
• | Activated the Pandemic Response Plan. |
• | Managing IT access for employees working off-site and supporting a seamless transition to working remotely. Currently, approximately 30% of the Company's employees are working off-site. |
• | Maintaining social distancing measures for employees working in the Company's offices and restricting lobby access. |
• | Daily monitoring of information from federal and state governments and the Centers for Disease Control. |
• | Coordinating medical grade sterilization of locations on an as-needed basis. |
• | Managing absenteeism to support work flows and customer needs. |
• | Implementing a hotline to assist employees. |
• | Implementing a temporary pandemic Paid Time Off ("PTO") Policy. |
• | Tracking personal travel. |
• | Providing timely internal and external communications in response to news events and new information. |
Origin is closely monitoring and reevaluating the ongoing economic effects of COVID-19 on the Company and its customers. From a financial perspective, although more current data has not yet fully emerged and it is not yet possible to predict the immediate or long-term impact of COVID-19, some of the items the Company is monitoring and actions it's taking include:
• | Established a SBA Paycheck Protection Program task force and approved over $480 million in loans under this program as a result of the Coronavirus Aid, Relief and Economic Security (CARES) Act. |
• | The implementation of Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"). |
• | Offering forbearance (90 day extensions) and modification agreements to the Company's customers due to COVID-19. |
• | Monitoring and evaluating potential Troubled Debt Restructures (TDR), none of which are COVID-19 related as of March 31, 2020. |
• | Tracking pandemic impacted relationships and general economic conditions in our markets. |
• | Increasing short term liquidity due to economic uncertainty, primarily through Federal Home Loan Bank ("FHLB") advances. |
• | Monitoring expectations/projections for growth in 2020, including the Company's expectations regarding loan growth, fee growth and other key business indicators. |
Additionally, the Company's leadership is pursuing:
• | Direct conversations with congressional leaders and banking associations related to pandemic induced legislation. |
• | Proactive conversations between bankers and customers to offer constructive solutions. |
Credit Quality
State and local governments have issued “stay-at-home” or “shelter-in-place” orders affecting more than 90% of Americans to curb the spread of COVID-19. The coronavirus outbreak has temporarily shuttered businesses across the Company's footprint, led to severe unemployment, and has caused a recession. Consequently, the Company's earnings for the first quarter of 2020 were significantly impacted by the COVID-19 pandemic. The deteriorating economic outlook caused the Company to build significant loan loss reserves during March 2020.
January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments, and recognized a one-time cumulative effect adjustment to the allowance for credit losses on loans of $1.2 million. CECL requires recording life-of-loan projected losses in the loan portfolio based on future economic events and related loan portfolio credit performance. The prior accounting standard recorded reserves based on incurred losses at the balance sheet date, generally resulting in lower reserve levels at the outset of an economic downturn. The Company recorded provision expense of $18.5 million for the quarter ended March 31, 2020, compared to provision expense of $2.4 million for the linked quarter and $1.0 million for the quarter ended March 31, 2019. The increase in provision expense from the linked quarter was primarily driven by an increase in the current estimate of expected credit losses within the loan portfolio primarily due to the impact of COVID-19 on key business sectors.
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The key sectors that appear to be hardest hit by COVID-19 include health care, retail businesses, transportation, restaurants, energy and hotels. At March 31, 2020, the Company had $992.7 million, or 22.2%, of its loans held for investment invested in these sectors. Nonperforming loans held for investment in these COVID-19 impacted sectors was $23.3 million at March 31, 2020, while past due loans held for investment in the COVID-19 impacted sectors, defined as loans 30 days or more past due, as a percentage of loans held for investment in the COVID-19 impacted sectors, was 2.0% at March 31, 2020.
During the quarter ended March 31, 2020, the Company had net charge-offs of $1.1 million compared to net charge-offs of $2.8 million for the linked quarter. The Company's net charge-off ratio for the quarter ended March 31, 2020, is 0.11%, compared to 0.26% for the quarter ended December 31, 2019. Total nonperforming loans held for investment were $33.0 million at March 31, 2020, compared to $31.1 million and $30.3 million at December 31, 2019, and March 31, 2019, respectively.
Allowance for credit losses on loans as a percentage of total loans held for investment was 1.25% at March 31, 2020, compared to 0.91% and 0.93% at December 31, 2019, and March 31, 2019, respectively. The allowance for credit losses on loans as a percentage of nonperforming loans held for investment was 169.72% at March 31, 2020, compared to 120.46% and 117.59% at December 31, 2019, and March 31, 2019, respectively. The increase in the allowance for credit losses was primarily due to the expected impact of COVID-19 on the Company's loan portfolio. The Company continues to gather the latest information available to perform and update its impairment analysis. As more information becomes available, including the economic impact of the COVID-19 pandemic, the Company will update the impairment analysis, which could lead to further increases to our allowance for credit losses on loans.
Total past due loans held for investment as a percentage of loans held for investment, was 1.14% at March 31, 2020, compared to 0.72% at December 31, 2019, and 0.99% at March 31, 2019.
Results of Operations for the Three Months Ended March 31, 2020
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended March 31, 2020, was $42.8 million, reflecting a decrease of $1.3 million, or 2.9%, compared to the linked quarter. A decline in yields earned on loans held for investment accounted for $1.7 million of the decrease, while a decline in average balance of loans held for investment accounted for $626,000 of the decline. These decreases were partially offset by a $1.3 million decrease in rates paid on interest-bearing deposits. Declining short term interest rates during the second half of the first quarter of 2020 have impacted the yields earned primarily on our commercial and industrial and commercial real estate loan portfolios.
Interest-bearing deposit expense decreased to $10.3 million during the current quarter, compared to $11.1 million for the quarter ended December 31, 2019. The $806,000 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 $196.1 million, or 8.7% and $424.5 million, or 21.0%, compared to the linked quarter and quarter ended March 31, 2019, respectively. Average subordinated debentures increased by $41.6 million, compared to the linked quarter and by $41.7 million, compared to March 31, 2019, largely driven by the $70 million subordinated notes offering completed by the Bank in February 2020. The notes qualify as Tier 2 capital.
The fully tax-equivalent net interest margin ("NIM") was 3.44% for the first quarter of 2020, a 14 basis point decrease from the fourth quarter of 2019 and a 36 basis point decrease from the first quarter of 2019. The yield earned on interest-earning assets decreased 19 basis points and 49 basis points compared to the linked quarter and the quarter ended March 31, 2019, respectively. The rate paid on total interest-bearing liabilities for the quarter ended March 31, 2020, was 1.37%, representing a decrease of nine basis points and 18 basis points compared to the linked quarter and the quarter ended March 31, 2019, respectively. The Company continues to experience margin compression on a linked quarter basis primarily caused by decreasing loan yields driven by consistently declining short-term interest rates experienced over the last several quarters. Interest rates may decline further and further decrease the Company’s loan yields, which may continue to put pressure on NIM due to our asset sensitive balance sheet.
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Noninterest Income
Noninterest income for the quarter ended March 31, 2020, was $12.1 million, an increase of $1.3 million, or 12.3%, from the linked quarter. The increase from the linked quarter was primarily driven by an increase of $1.3 million in insurance commission and fee income, a $525,000 in swap fee income, and an increase of $369,000 in other income, offset by a $590,000 decrease in mortgage banking income.
The increase in insurance commission and fee income was caused by the seasonality of policy renewals. Swap fee income during the first quarter was driven by the increased volume of new transactions compared to the linked quarter. The increase in other income was primarily driven by a $316,000 payout on a bank-owned life insurance policy.
The decrease in mortgage banking revenue compared to the linked quarter was primarily driven by a decrease in the mortgage servicing fair value valuation due to declining interest rates as well as uncertainty in the economy at quarter end and its related impact on the estimated future cash flows within our mortgage servicing portfolio.
Noninterest Expense
Noninterest expense for the quarter ended March 31, 2020, was primarily flat when compared to the linked quarter. Noninterest expense for the quarter ended March 31, 2020 was $36.1 million, a decrease of $437,000, or 1.2%, compared to the linked quarter. The decrease from the linked quarter was largely driven by decreases of $280,000 and $258,000 in advertising and marketing expenses, and loan related expense, respectively, partially offset by increases of $293,000 and $202,000 in professional fees and data processing, respectively.
Financial Condition
Loans
Total loans held for investment at March 31, 2020, were $4.48 billion, an increase of $338.0 million, or 8.2%, compared to $4.14 billion at December 31, 2019, and an increase of $642.8 million, or 16.7%, compared to $3.84 billion at March 31, 2019. The increase in loans held for investment when compared to December 31, 2019, was primarily reflected in Mortgage Warehouse Lines of Credit and Commercial and Industrial loans, which increased $162.6 million and $112.0 million, respectively. The increase in Mortgage Warehouse Lines of Credit is primarily due to increased refinance activity due the current low interest rate environment. The increase in Commercial and Industrial loans is primarily due to elevated draws on commercial lines of credit near the end of the quarter.
For the quarter ended March 31, 2020, average loans held for investment were $4.12 billion, a decrease of $49.8 million, or 1.2%, from $4.17 billion for the linked quarter.
Deposits
Total deposits at March 31, 2020, were $4.56 billion, an increase of $327.6 million, or 7.7%, compared to $4.23 billion at December 31, 2019, and an increase of $658.0 million, or 16.9%, compared to $3.90 billion, at March 31, 2019. Brokered deposits contributed an increase of $282.6 million when compared to the linked quarter, and an increase of $107.4 million when compared to March 31, 2019. Noninterest-bearing deposits had an increase of $38.1 million, or 3.5%, compared to the linked quarter and an increase of $137.9 million, or 14.1%, compared to the quarter ended March 31, 2019.
Average total deposits for the quarter ended March 31, 2020, increased by $121.9 million, or 2.9%, over the linked quarter primarily due to an increase of $104.3 million in average public fund deposits.
For the quarter ended March 31, 2020, average noninterest-bearing deposits as a percentage of total average deposits was 25.4%, compared to 27.4% for the quarter ended December 31, 2019, and 25.3% for the quarter ended March 31, 2019.
Borrowings
Origin Bank announced the completion of an offering of $70 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030 (the “Notes”) in February 2020. The Notes will initially bear interest at a fixed annual rate of 4.25% then adjust to the three-month LIBOR rate plus 282 basis points. The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes for Origin Bank.
Average FHLB advances and other borrowings for the quarter ended March 31, 2020, decreased by $44.0 million, or 12.9%, compared to the quarter ended December 31, 2019 and decreased by $38.2 million, or 11.4% over the quarter ended March 31, 2019. The Company entered into a new $300.0 million short-term FHLB advance with a fixed interest rate of 0.295%, late in March 2020, that due to the timing of the advance, did not have a significant impact on the average FHLB
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advances and other borrowings. The advance will mature in June 2020. The additional borrowings were used to bolster balance sheet liquidity due to projected draws on commercial lines of credit and to fund the Paycheck Protection Program ("PPP") loans associated with the CARES Act. The Company has approved $480.8 million, or 1,727 in PPP loans throughout the Company's markets until the program funds were exhausted in mid-April 2020.
Stockholders' Equity
Stockholders' equity was $606.6 million at March 31, 2020, an increase of $7.4 million, or 1.2%, compared to $599.3 million at December 31, 2019, and an increase of $38.5 million, or 6.8%, compared to $568.1 million at March 31, 2019.
Conference Call
Origin will hold a conference call to discuss its first quarter 2020 results on Thursday, April 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/obnk200423.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 "anticipates," "believes," "estimates," "expects," “foresees,” "intends," "plans," "projects," and similar expressions or future or conditional verbs such as "could," "may," “might,” "should," "will," and "would" or variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin's future results and cause actual results to differ materially from those indicated in the forward-looking statements include: the duration and impacts of the COVID-19 global pandemic and efforts to contain its transmission, including the effect of these factors on Origin’s business, customers and economic conditions generally; deterioration of Origin's asset quality; factors that can adversely impact the performance of Origin’s loan portfolio, including real estate values and liquidity in Origin's primary market areas; the financial health of Origin's commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin's loans; Origin’s ability to anticipate interest rate changes and manage interest rate risk; the effectiveness of Origin’s risk management framework and quantitative models; Origin’s inability to receive dividends from Origin Bank and to service debt, pay dividends to Origin’s common stockholders, repurchase Origin’s shares of common stock and satisfy obligations as they become due; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; changes in Origin’s operation or expansion strategy or Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important customer relationships, reputation or otherwise avoid liquidity risks; increasing costs as Origin grows deposits; operational risks associated with Origin’s business; volatility and direction of market interest rates; 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; an increase in unemployment levels and slowdowns in economic growth; Origin's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin's loan portfolio; changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, as well as tax, trade, monetary and fiscal matters; periodic changes to the extensive body of accounting rules and best practices; further government intervention in the U.S. financial system; compliance with governmental and regulatory requirements, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and others relating to banking, consumer protection, securities and tax matters; Origin's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin's non-GAAP liquidity measurements and its underlying assumptions or estimates; uncertainty regarding the future of the London Interbank Offered Rate and the impact of any replacement alternatives on Origin’s business; natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities, widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond Origin’s control; and system failures, cybersecurity threats and/or security breaches and the cost of defending against them. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("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. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the recent outbreak of the COVID-19 pandemic and the impact of varying governmental responses that affect our customers and the economies where they operate. All forward-looking statements, expressed or implied, included in this communication are
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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 | |||||||||||||||||||
March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||
Income statement and share amounts | (Dollars in thousands, except per share amounts, unaudited) | ||||||||||||||||||
Net interest income | $ | 42,810 | $ | 44,095 | $ | 44,622 | $ | 42,969 | $ | 42,026 | |||||||||
Provision for credit losses | 18,531 | 2,377 | 4,201 | 1,985 | 1,005 | ||||||||||||||
Noninterest income | 12,144 | 10,818 | 12,880 | 11,176 | 11,604 | ||||||||||||||
Noninterest expense | 36,097 | 36,534 | 35,064 | 37,095 | 35,381 | ||||||||||||||
Income before income tax expense | 326 | 16,002 | 18,237 | 15,065 | 17,244 | ||||||||||||||
Income tax (benefit) expense | (427 | ) | 3,175 | 3,620 | 2,782 | 3,089 | |||||||||||||
Net income | $ | 753 | $ | 12,827 | $ | 14,617 | $ | 12,283 | $ | 14,155 | |||||||||
Pre-tax, pre-provision earnings (1) | $ | 18,857 | $ | 18,379 | $ | 22,438 | $ | 17,050 | $ | 18,249 | |||||||||
Basic earnings per common share | $ | 0.03 | $ | 0.55 | $ | 0.62 | $ | 0.52 | $ | 0.60 | |||||||||
Diluted earnings per common share | 0.03 | 0.55 | 0.62 | 0.52 | 0.60 | ||||||||||||||
Dividends declared per common share | 0.0925 | 0.0925 | 0.0925 | 0.0325 | 0.0325 | ||||||||||||||
Weighted average common shares outstanding - basic | 23,353,601 | 23,323,292 | 23,408,499 | 23,585,040 | 23,569,576 | ||||||||||||||
Weighted average common shares outstanding - diluted | 23,530,212 | 23,529,862 | 23,606,956 | 23,786,646 | 23,776,349 | ||||||||||||||
Balance sheet data | |||||||||||||||||||
Total loans held for investment | $ | 4,481,185 | $ | 4,143,195 | $ | 4,188,497 | $ | 3,984,597 | $ | 3,838,343 | |||||||||
Total assets | 6,049,638 | 5,324,626 | 5,396,928 | 5,119,625 | 4,872,201 | ||||||||||||||
Total deposits | 4,556,246 | 4,228,612 | 4,284,317 | 3,855,012 | 3,898,248 | ||||||||||||||
Total stockholders' equity | 606,631 | 599,262 | 588,363 | 584,293 | 568,122 | ||||||||||||||
Performance metrics and capital ratios | |||||||||||||||||||
Yield on loans held for investment | 4.85 | % | 4.95 | % | 5.23 | % | 5.29 | % | 5.28 | % | |||||||||
Yield on interest earnings assets | 4.37 | 4.56 | 4.81 | 4.85 | 4.86 | ||||||||||||||
Rate on interest bearing deposits | 1.28 | 1.44 | 1.59 | 1.61 | 1.48 | ||||||||||||||
Rate on total deposits | 0.95 | 1.04 | 1.16 | 1.19 | 1.11 | ||||||||||||||
Net interest margin, fully tax equivalent | 3.44 | 3.58 | 3.69 | 3.70 | 3.80 | ||||||||||||||
Return on average stockholders' equity (annualized) | 0.50 | 8.51 | 9.85 | 8.54 | 10.25 | ||||||||||||||
Return on average assets (annualized) | 0.06 | 0.97 | 1.12 | 0.98 | 1.18 | ||||||||||||||
Efficiency ratio (2) | 65.69 | 66.53 | 60.98 | 68.51 | 65.97 | ||||||||||||||
Book value per common share | $ | 25.84 | $ | 25.52 | $ | 25.06 | $ | 24.58 | $ | 23.92 | |||||||||
Common equity tier 1 to risk-weighted assets (3) | 10.90 | % | 11.74 | % | 11.43 | % | 11.93 | % | 12.05 | % | |||||||||
Tier 1 capital to risk-weighted assets (3) | 11.08 | 11.94 | 11.63 | 12.13 | 12.26 | ||||||||||||||
Total capital to risk-weighted assets (3) | 13.42 | 12.76 | 12.45 | 12.97 | 13.10 | ||||||||||||||
Tier 1 leverage ratio (3) | 10.71 | 10.91 | 10.88 | 11.10 | 11.23 | ||||||||||||||
____________________________
(1) | Pre-tax, pre-provision earnings is a non-GAAP financial measure. For a reconciliation of this non-GAAP financial measure to its comparable GAAP measure, please see page 13. |
(2) | Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. |
(3) | March 31, 2020, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board. |
8
Origin Bancorp, Inc.
Consolidated Balance Sheets
(Dollars in thousands) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
Assets | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Cash and due from banks | $ | 91,104 | $ | 62,160 | $ | 79,005 | $ | 75,204 | $ | 66,312 | |||||||||
Interest-bearing deposits in banks | 469,075 | 229,358 | 229,757 | 124,356 | 44,928 | ||||||||||||||
Total cash and cash equivalents | 560,179 | 291,518 | 308,762 | 199,560 | 111,240 | ||||||||||||||
Securities: | |||||||||||||||||||
Available for sale | 601,637 | 501,070 | 492,461 | 548,980 | 563,826 | ||||||||||||||
Held to maturity, net of allowance for credit losses | 28,383 | 28,620 | 28,759 | 28,897 | 19,033 | ||||||||||||||
Securities carried at fair value through income | 12,242 | 11,513 | 11,745 | 11,615 | 11,510 | ||||||||||||||
Total securities | 642,262 | 541,203 | 532,965 | 589,492 | 594,369 | ||||||||||||||
Non-marketable equity securities held in other financial institutions | 52,267 | 39,808 | 49,205 | 49,008 | 42,314 | ||||||||||||||
Loans held for sale | 75,322 | 64,837 | 67,122 | 58,408 | 42,265 | ||||||||||||||
Loans | 4,481,185 | 4,143,195 | 4,188,497 | 3,984,597 | 3,838,343 | ||||||||||||||
Less: allowance for credit losses | 56,063 | 37,520 | 37,126 | 36,683 | 35,578 | ||||||||||||||
Loans, net of allowance for credit losses | 4,425,122 | 4,105,675 | 4,151,371 | 3,947,914 | 3,802,765 | ||||||||||||||
Premises and equipment, net | 80,193 | 80,457 | 80,921 | 80,672 | 78,684 | ||||||||||||||
Mortgage servicing rights | 16,122 | 20,697 | 19,866 | 21,529 | 23,407 | ||||||||||||||
Cash surrender value of bank-owned life insurance | 36,874 | 37,961 | 37,755 | 33,070 | 32,888 | ||||||||||||||
Goodwill and other intangible assets, net | 31,241 | 31,540 | 31,842 | 32,144 | 32,497 | ||||||||||||||
Accrued interest receivable and other assets | 130,056 | 110,930 | 117,119 | 107,828 | 111,772 | ||||||||||||||
Total assets | $ | 6,049,638 | $ | 5,324,626 | $ | 5,396,928 | $ | 5,119,625 | $ | 4,872,201 | |||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||
Noninterest-bearing deposits | $ | 1,115,811 | $ | 1,077,706 | $ | 1,154,660 | $ | 1,003,499 | $ | 977,919 | |||||||||
Interest-bearing deposits | 2,673,881 | 2,360,096 | 2,309,387 | 2,011,719 | 2,101,706 | ||||||||||||||
Time deposits | 766,554 | 790,810 | 820,270 | 839,794 | 818,623 | ||||||||||||||
Total deposits | 4,556,246 | 4,228,612 | 4,284,317 | 3,855,012 | 3,898,248 | ||||||||||||||
FHLB advances and other borrowings | 716,909 | 417,190 | 419,681 | 601,346 | 335,053 | ||||||||||||||
Subordinated debentures | 78,539 | 9,671 | 9,664 | 9,657 | 9,651 | ||||||||||||||
Accrued expenses and other liabilities | 91,313 | 69,891 | 94,903 | 69,317 | 61,127 | ||||||||||||||
Total liabilities | 5,443,007 | 4,725,364 | 4,808,565 | 4,535,332 | 4,304,079 | ||||||||||||||
Stockholders' equity | |||||||||||||||||||
Common stock | 117,380 | 117,405 | 117,409 | 118,871 | 118,730 | ||||||||||||||
Additional paid-in capital | 235,709 | 235,623 | 235,018 | 243,002 | 242,579 | ||||||||||||||
Retained earnings | 237,720 | 239,901 | 229,246 | 216,801 | 205,289 | ||||||||||||||
Accumulated other comprehensive income | 15,822 | 6,333 | 6,690 | 5,619 | 1,524 | ||||||||||||||
Total stockholders' equity | 606,631 | 599,262 | 588,363 | 584,293 | 568,122 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 6,049,638 | $ | 5,324,626 | $ | 5,396,928 | $ | 5,119,625 | $ | 4,872,201 | |||||||||
9
Origin Bancorp, Inc.
Consolidated Quarterly Statements of Income
Three months ended | |||||||||||||||||||
March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||
Interest and dividend income | (Dollars in thousands, except per share amounts, unaudited) | ||||||||||||||||||
Interest and fees on loans | $ | 50,049 | $ | 52,331 | $ | 53,932 | $ | 51,461 | $ | 49,175 | |||||||||
Investment securities-taxable | 2,712 | 2,640 | 2,786 | 3,208 | 3,341 | ||||||||||||||
Investment securities-nontaxable | 758 | 772 | 826 | 871 | 858 | ||||||||||||||
Interest and dividend income on assets held in other financial institutions | 1,497 | 976 | 1,262 | 1,523 | 1,120 | ||||||||||||||
Total interest and dividend income | 55,016 | 56,719 | 58,806 | 57,063 | 54,494 | ||||||||||||||
Interest expense | |||||||||||||||||||
Interest-bearing deposits | 10,250 | 11,056 | 11,623 | 11,540 | 10,497 | ||||||||||||||
FHLB advances and other borrowings | 1,351 | 1,428 | 2,420 | 2,415 | 1,834 | ||||||||||||||
Junior subordinated debentures | 605 | 140 | 141 | 139 | 137 | ||||||||||||||
Total interest expense | 12,206 | 12,624 | 14,184 | 14,094 | 12,468 | ||||||||||||||
Net interest income | 42,810 | 44,095 | 44,622 | 42,969 | 42,026 | ||||||||||||||
Provision for credit losses | 18,531 | 2,377 | 4,201 | 1,985 | 1,005 | ||||||||||||||
Net interest income after provision for credit losses | 24,279 | 41,718 | 40,421 | 40,984 | 41,021 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges and fees | 3,320 | 3,488 | 3,620 | 3,435 | 3,316 | ||||||||||||||
Mortgage banking revenue | 2,769 | 3,359 | 3,092 | 3,252 | 2,606 | ||||||||||||||
Insurance commission and fee income | 3,687 | 2,428 | 3,203 | 3,036 | 3,510 | ||||||||||||||
Gain on sales of securities, net | 54 | — | 20 | — | — | ||||||||||||||
(Loss) gain on sales and disposals of other assets, net | (25 | ) | (38 | ) | (132 | ) | (166 | ) | 3 | ||||||||||
Limited partnership investment (loss) income | (429 | ) | (267 | ) | 279 | (418 | ) | 400 | |||||||||||
Swap fee income | 676 | 151 | 1,351 | 172 | 511 | ||||||||||||||
Change in fair value of equity investments | — | — | — | 367 | — | ||||||||||||||
Other fee income | 466 | 440 | 414 | 360 | 276 | ||||||||||||||
Other income | 1,626 | 1,257 | 1,033 | 1,138 | 982 | ||||||||||||||
Total noninterest income | 12,144 | 10,818 | 12,880 | 11,176 | 11,604 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 21,988 | 22,074 | 21,523 | 22,764 | 22,613 | ||||||||||||||
Occupancy and equipment, net | 4,221 | 4,241 | 4,274 | 4,200 | 4,044 | ||||||||||||||
Data processing | 2,003 | 1,801 | 1,763 | 1,810 | 1,587 | ||||||||||||||
Electronic banking | 900 | 936 | 924 | 892 | 689 | ||||||||||||||
Communications | 477 | 454 | 411 | 647 | 586 | ||||||||||||||
Advertising and marketing | 711 | 991 | 930 | 1,089 | 798 | ||||||||||||||
Professional services | 1,171 | 878 | 956 | 839 | 904 | ||||||||||||||
Regulatory assessments | 615 | 679 | (387 | ) | 691 | 711 | |||||||||||||
Loan related expenses | 1,142 | 1,400 | 1,315 | 790 | 669 | ||||||||||||||
Office and operations | 1,441 | 1,632 | 1,712 | 1,849 | 1,481 | ||||||||||||||
Intangible asset amortization | 299 | 302 | 302 | 353 | 364 | ||||||||||||||
Franchise tax expense | 496 | 496 | 683 | 492 | 489 | ||||||||||||||
Other expenses | 633 | 650 | 658 | 679 | 446 | ||||||||||||||
Total noninterest expense | 36,097 | 36,534 | 35,064 | 37,095 | 35,381 | ||||||||||||||
Income before income tax expense | 326 | 16,002 | 18,237 | 15,065 | 17,244 | ||||||||||||||
Income tax (benefit) expense | (427 | ) | 3,175 | 3,620 | 2,782 | 3,089 | |||||||||||||
Net income | $ | 753 | $ | 12,827 | $ | 14,617 | $ | 12,283 | $ | 14,155 | |||||||||
Basic earnings per common share | $ | 0.03 | $ | 0.55 | $ | 0.62 | $ | 0.52 | $ | 0.60 | |||||||||
Diluted earnings per common share | 0.03 | 0.55 | 0.62 | 0.52 | 0.60 | ||||||||||||||
10
Origin Bancorp, Inc.
Loan Data
At and for the three months ended | |||||||||||||||||||
Loans held for investment | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
Loans secured by real estate: | (Dollars in thousands, unaudited) | ||||||||||||||||||
Commercial real estate | $ | 1,302,520 | $ | 1,296,847 | $ | 1,305,006 | $ | 1,219,470 | $ | 1,202,269 | |||||||||
Construction/land/land development | 563,820 | 517,688 | 509,905 | 524,999 | 488,167 | ||||||||||||||
Residential real estate | 703,263 | 689,555 | 680,803 | 651,988 | 638,064 | ||||||||||||||
Total real estate | 2,569,603 | 2,504,090 | 2,495,714 | 2,396,457 | 2,328,500 | ||||||||||||||
Commercial and industrial | 1,455,497 | 1,343,475 | 1,367,595 | 1,341,652 | 1,287,300 | ||||||||||||||
Mortgage warehouse lines of credit | 437,257 | 274,659 | 304,917 | 224,939 | 202,744 | ||||||||||||||
Consumer | 18,828 | 20,971 | 20,271 | 21,549 | 19,799 | ||||||||||||||
Total loans held for investment | 4,481,185 | 4,143,195 | 4,188,497 | 3,984,597 | 3,838,343 | ||||||||||||||
Less: allowance for credit losses | 56,063 | 37,520 | 37,126 | 36,683 | 35,578 | ||||||||||||||
Loans held for investment, net | $ | 4,425,122 | $ | 4,105,675 | $ | 4,151,371 | $ | 3,947,914 | $ | 3,802,765 | |||||||||
Nonperforming assets | |||||||||||||||||||
Nonperforming loans held for investment | |||||||||||||||||||
Commercial real estate | $ | 11,306 | $ | 6,994 | $ | 7,460 | $ | 9,423 | $ | 8,622 | |||||||||
Construction/land/land development | 3,850 | 4,337 | 860 | 1,111 | 922 | ||||||||||||||
Residential real estate | 4,076 | 5,132 | 5,254 | 4,978 | 5,196 | ||||||||||||||
Commercial and industrial | 13,619 | 14,520 | 17,745 | 14,810 | 15,309 | ||||||||||||||
Consumer | 181 | 163 | 153 | 156 | 206 | ||||||||||||||
Total nonperforming loans held for investment | 33,032 | 31,146 | 31,472 | 30,478 | 30,255 | ||||||||||||||
Nonperforming loans held for sale | 840 | 927 | 1,462 | 2,049 | 1,390 | ||||||||||||||
Total nonperforming loans | 33,872 | 32,073 | 32,934 | 32,527 | 31,645 | ||||||||||||||
Repossessed assets | 5,296 | 4,753 | 4,565 | 3,554 | 3,659 | ||||||||||||||
Total nonperforming assets | $ | 39,168 | $ | 36,826 | $ | 37,499 | $ | 36,081 | $ | 35,304 | |||||||||
Classified assets | $ | 79,980 | $ | 69,870 | $ | 73,516 | $ | 80,124 | $ | 77,619 | |||||||||
Past due loans held for investment (1) | 51,018 | 29,980 | 29,965 | 31,884 | 37,841 | ||||||||||||||
Allowance for credit losses | |||||||||||||||||||
Balance at beginning of period | $ | 37,520 | $ | 37,126 | $ | 36,683 | $ | 35,578 | $ | 34,203 | |||||||||
Impact of adopting ASC 326 | 1,247 | — | — | — | — | ||||||||||||||
Provision for loan credit losses | 18,397 | 3,167 | 3,435 | 1,782 | 823 | ||||||||||||||
Loans charged off | 1,425 | 3,268 | 5,415 | 840 | 608 | ||||||||||||||
Loan recoveries | 324 | 495 | 2,423 | 163 | 1,160 | ||||||||||||||
Net charge-offs (recoveries) | 1,101 | 2,773 | 2,992 | 677 | (552 | ) | |||||||||||||
Balance at end of period | $ | 56,063 | $ | 37,520 | $ | 37,126 | $ | 36,683 | $ | 35,578 | |||||||||
Credit quality ratios | |||||||||||||||||||
Total nonperforming assets to total assets | 0.65 | % | 0.69 | % | 0.69 | % | 0.70 | % | 0.72 | % | |||||||||
Total nonperforming loans to total loans | 0.74 | 0.76 | 0.77 | 0.80 | 0.82 | ||||||||||||||
Nonperforming loans held for investment to loans held for investment | 0.74 | 0.75 | 0.75 | 0.76 | 0.79 | ||||||||||||||
Past due loans held for investment to loans held for investment | 1.14 | 0.72 | 0.72 | 0.80 | 0.99 | ||||||||||||||
Allowance for credit losses to nonperforming loans held for investment | 169.72 | 120.46 | 117.97 | 120.36 | 117.59 | ||||||||||||||
Allowance for credit losses to total loans held for investment | 1.25 | 0.91 | 0.89 | 0.92 | 0.93 | ||||||||||||||
Net charge-offs (recoveries) to total average loans held for investment (annualized) | 0.11 | 0.26 | 0.29 | 0.07 | (0.06 | ) | |||||||||||||
(1) | Past due loans held for investment are defined as loans 30 days past due or more. |
11
Origin Bancorp, Inc.
Average Balances and Yields/Rates
Three months ended | ||||||||||||||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||||||||||||||
Average Balance | Yield/Rate | Average Balance | Yield/Rate | Average Balance | Yield/Rate | |||||||||||||||
Assets | (Dollars in thousands, unaudited) | |||||||||||||||||||
Commercial real estate | $ | 1,274,633 | 4.88 | % | $ | 1,307,023 | 5.03 | % | $ | 1,214,682 | 5.17 | % | ||||||||
Construction/land/land development | 545,076 | 5.21 | 526,494 | 5.20 | 457,175 | 5.74 | ||||||||||||||
Residential real estate | 695,040 | 4.76 | 694,436 | 4.95 | 634,287 | 4.81 | ||||||||||||||
Commercial and industrial | 1,372,801 | 4.74 | 1,356,316 | 4.88 | 1,287,461 | 5.35 | ||||||||||||||
Mortgage warehouse lines of credit | 210,480 | 4.46 | 262,392 | 4.47 | 147,453 | 5.63 | ||||||||||||||
Consumer | 19,687 | 6.74 | 20,889 | 6.68 | 20,482 | 6.83 | ||||||||||||||
Loans held for investment | 4,117,717 | 4.85 | 4,167,550 | 4.95 | 3,761,540 | 5.28 | ||||||||||||||
Loans held for sale | 33,288 | 4.86 | 42,873 | 2.63 | 17,687 | 4.05 | ||||||||||||||
Loans Receivable | 4,151,005 | 4.85 | 4,210,423 | 4.93 | 3,779,227 | 5.28 | ||||||||||||||
Investment securities-taxable | 450,576 | 2.41 | 437,626 | 2.41 | 498,733 | 2.68 | ||||||||||||||
Investment securities-nontaxable | 102,954 | 2.95 | 100,705 | 3.07 | 101,794 | 3.37 | ||||||||||||||
Non-marketable equity securities held in other financial institutions | 40,494 | 3.09 | 48,669 | 2.88 | 42,161 | 2.90 | ||||||||||||||
Interest-bearing balances due from banks | 319,953 | 1.49 | 139,508 | 1.77 | 123,326 | 2.69 | ||||||||||||||
Total interest-earning assets | 5,064,982 | 4.37 | % | 4,936,931 | 4.56 | % | 4,545,241 | 4.86 | % | |||||||||||
Noninterest-earning assets(1) | 335,722 | 335,048 | 325,807 | |||||||||||||||||
Total assets | $ | 5,400,704 | $ | 5,271,979 | $ | 4,871,048 | ||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||
Savings and interest-bearing transaction accounts | $ | 2,444,953 | 1.05 | % | $ | 2,248,863 | 1.21 | % | $ | 2,020,440 | 1.26 | % | ||||||||
Time deposits | 781,907 | 1.98 | 803,344 | 2.08 | 848,629 | 2.03 | ||||||||||||||
Total interest-bearing deposits | 3,226,860 | 1.28 | 3,052,207 | 1.44 | 2,869,069 | 1.48 | ||||||||||||||
FHLB advances and other borrowings | 297,750 | 1.80 | 342,000 | 1.62 | 335,910 | 2.05 | ||||||||||||||
Securities sold under agreements to repurchase | 16,866 | 0.45 | 18,198 | 0.65 | 39,757 | 1.39 | ||||||||||||||
Subordinated debentures | 51,308 | 4.72 | 9,668 | 5.67 | 9,647 | 5.28 | ||||||||||||||
Total interest-bearing liabilities | 3,592,784 | 1.37 | % | 3,422,073 | 1.46 | % | 3,254,383 | 1.55 | % | |||||||||||
Noninterest-bearing deposits | 1,097,646 | 1,150,381 | 972,617 | |||||||||||||||||
Other liabilities(1) | 99,112 | 101,600 | 83,957 | |||||||||||||||||
Total liabilities | 4,789,542 | 4,674,054 | 4,310,957 | |||||||||||||||||
Stockholders' Equity | 611,162 | 597,925 | 560,091 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 5,400,704 | $ | 5,271,979 | $ | 4,871,048 | ||||||||||||||
Net interest spread | 3.00 | % | 3.10 | % | 3.31 | % | ||||||||||||||
Net interest margin | 3.40 | % | 3.54 | % | 3.75 | % | ||||||||||||||
Net interest income margin - (tax- equivalent)(2) | 3.44 | % | 3.58 | % | 3.80 | % | ||||||||||||||
____________________________
(1) | Includes Government National Mortgage Association ("GNMA") repurchase average balances of $27.9 million, $24.5 million, and $30.1 million for the three months ended March 31, 2020, December 31, 2019, and March 31, 2019, 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. |
12
Origin Bancorp, Inc.
Non-GAAP Financial Measures
(Dollars in thousands, except per share amounts) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
Calculation of Tangible Common Equity: | |||||||||||||||||||
Total Common Stockholders' Equity | $ | 606,631 | $ | 599,262 | $ | 588,363 | $ | 584,293 | $ | 568,122 | |||||||||
Less: Goodwill and Other Intangible Assets, Net | 31,241 | 31,540 | 31,842 | 32,144 | 32,497 | ||||||||||||||
Tangible Common Equity | $ | 575,390 | $ | 567,722 | $ | 556,521 | $ | 552,149 | $ | 535,625 | |||||||||
Calculation of Tangible Book Value per Common Share: | |||||||||||||||||||
Common Shares Outstanding at the End of the Period | 23,475,948 | 23,480,945 | 23,481,781 | 23,774,238 | 23,745,985 | ||||||||||||||
Tangible Book Value per Common Share | $ | 24.51 | $ | 24.18 | $ | 23.70 | $ | 23.22 | $ | 22.56 | |||||||||
Pre-Tax Pre-Provision Earnings | |||||||||||||||||||
Net Income | $ | 753 | $ | 12,827 | $ | 14,617 | $ | 12,283 | $ | 14,155 | |||||||||
Provision for credit losses | 18,531 | 2,377 | 4,201 | 1,985 | 1,005 | ||||||||||||||
Income tax expense | (427 | ) | 3,175 | 3,620 | 2,782 | 3,089 | |||||||||||||
Pre-Tax Pre-Provision Earnings | $ | 18,857 | $ | 18,379 | $ | 22,438 | $ | 17,050 | $ | 18,249 | |||||||||
13
ORIGIN BANCORP, INC. 1Q TWENTY20 INVESTOR PRESENTATION ORIGIN BANCORP, INC. _______
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 and efforts to respond to the COVID-19 pandemic and interest rate cuts by the Federal Reserve and the impact of those cuts and responses 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" and variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect the Company's future results and cause actual results to differ materially from those expressed in the forward-looking statements include: the duration and impacts of the COVID-19 global pandemic and efforts to contain its transmission, including the effect of these factors on Origin's business, customers and economic conditions generally; 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 customer relationships; volatility and direction of market interest rates; 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; an increase in unemployment levels and slowdowns in economic growth; Origin's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin's loan portfolio; changes in laws, rules, regulations, interpretations or policies relating to financial institutions, and potential expenses associated with complying with such regulations; 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; the effects of weather and natural disasters such as widespread illnesses, public health outbreaks, floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters; and system failures, cybersecurity threats and/or security breaches and the cost of defending against them. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("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. Many of these risks and uncertainties are amplified by or may, in the future, be amplified by, the recent outbreak of the COVID-19 pandemic and the impact of varying social, economic and governmental responses that affect Origin, Origin's customers and the markets in which Origin operates. 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 book value per common share is determined by dividing tangible common equity by common shares outstanding at the end of the period • Pre-tax pre-provision earnings is net income before adjusting for income tax expense and provision expense 2 ORIGIN BANCORP, INC. _______
FINANCIAL RESULTS - FIRST QUARTER 2020 DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS March 31 December 31 March 31 Linked Qtr Linked Qtr YoY YoY Balance Sheet 2020 2019 2019 $ Δ % Δ $ Δ % Δ Total Loans Held For Investment ("LHFI") $ 4,481,185 $ 4,143,195 $ 3,838,343 $ 337,990 8.2 % $ 642,842 16.7 % Total Assets 6,049,638 5,324,626 4,872,201 725,012 13.6 % 1,177,437 24.2 % Total Deposits 4,556,246 4,228,612 3,898,248 327,634 7.7 % 657,998 16.9 % Tangible Common Equity(1) 575,390 567,722 535,625 7,668 1.4 % 39,765 7.4 % Book Value per Common Share $ 25.84 $ 25.52 $ 23.92 $ 0.32 1.3 % $ 1.92 8.0 % Tangible Book Value per Common Share(1) $ 24.51 $ 24.18 $ 22.56 $ 0.33 1.4 % $ 1.95 8.6 % Income Statement Net Interest Income $ 42,810 $ 44,095 $ 42,026 $ (1,285) (2.9)% $ 784 1.9 % Provision for Credit Losses 18,531 2,377 1,005 16,154 N/M 17,526 N/M Noninterest Income 12,144 10,818 11,604 1,326 12.3 % 540 4.7 % Noninterest Expense 36,097 36,534 35,381 (437) (1.2)% 716 2.0 % Net Income 753 12,827 14,155 (12,074) (94.1)% (13,402) (94.7)% Pre-Tax Pre-Provision Earnings(1) 18,857 18,379 18,249 478 2.6 % 608 3.3 % Diluted EPS $ 0.03 $ 0.55 $ 0.60 $ (0.52) (94.5)% $ (0.57) (95.0)% Dividends Declared per Common Share $ 0.0925 $ 0.0925 $ 0.0325 $ — — % $ 0.06 184.6 % Selected Ratios NIM - FTE 3.44% 3.58% 3.80% -14 bp (3.9)% -36 bp (9.5)% Efficiency Ratio 65.69% 66.53% 65.97% -84 bp (1.3)% -28 bp (0.4)% ROAA (annualized) 0.06% 0.97% 1.18% -91 bp (93.8)% -112 bp (94.9)% ROAE (annualized) 0.50% 8.51% 10.25% -801 bp (94.1)% -975 bp (95.1)% (1) As used in this presentation, tangible common equity, tangible book value per common share, and pre-tax pre-provision earnings are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, see slide 24 of this presentation. 3 ORIGIN BANCORP, INC. _______
Our LA As of 4/20/2020 Markets* State of LA Cases Reported 2,195 24,523 Deaths Reported 106 1,328 Source: Louisiana Department of Health * Our LA markets include Caddo, Bossier, Lincoln, Union, Ouachita and Morehouse parishes. 4 ORIGIN BANCORP, INC. _______
COVID - 19 RESPONSE* • In addition to having our employees work from home, our drive- thus remain open and our employees are accepting one-on-one “Challenging times create the appointments with customers on an as needed basis opportunity for our collective character, core values and vision to make a real • Activated our Pandemic Response Plan difference in the lives of our co- • Daily monitoring of information from federal and state workers, clients and communities. As governments and the Centers for Disease Control our friends and clients are stressed, • Providing timely internal and external communications in let’s serve them as trusted financial response to news events and new information advisors. Let’s be nimble, responsive, • Direct conversations with congressional leaders and banking flexible and loyal for our customers. associations related to pandemic induced legislation Let’s be pro-active in taking care of our • Proactive conversations between bankers and customers to offer clients so that they can experience the constructive solutions real difference of being with Origin. Let’s create long-term unwavering • Established a SBA Paycheck Protection Program ("PPP") task force and approved over $480 million in loans under this program loyalty by our actions and character as a result of the Coronavirus Aid, Relief and Economic Security during these challenging times." ("CARES") Act • Offering expanded SBA program as a result of the CARES Act --Lance Hall, President & CEO, Origin Bank • Tracking pandemic impacted relationships and general economic conditions in our markets • Offering forbearance/modification agreements due to COVID-19 * Please see the Coronavirus (COVID-19) section of the Origin Bancorp, Inc. earnings release dated April 22, 2020, for further key COVID-19 initiatives. 5 ORIGIN BANCORP, INC. _______
SUPPORTING OUR CUSTOMERS DOLLARS IN THOUSANDS COVID-19 LHFI Forbearances at 04/15/2020 SBA Paycheck Protection Program Activity Total Loan Avg Loan # of Total Loan Avg Loan # of Industry ($) ($) Loans Industry ($) ($) Loans Real estate rental/leasing $230,489 $674 342 Professional Services $57,830 $236 245 Healthcare 105,052 955 110 Construction 54,052 311 174 Restaurants 70,780 814 87 Healthcare 49,135 246 200 Hotels and Motels 60,525 3,363 18 Manufacturing 47,223 537 88 Retail and Wholesale 56,014 757 74 Hotels and Motels 45,811 1,309 35 Transportation/Warehousing 33,132 808 41 Finance/Insurance 37,346 526 71 Construction 22,297 378 59 Retail and Wholesale 33,528 192 175 Other 191,171 613 312 Restaurants 25,915 252 103 Total $769,460 $738 1,043 Other 130,005 204 636 Totals $480,845 $278 1,727 • Forbearances generally are 90 day extensions, and currently represent 17% of total LHFI Total $ Loan Origination Pool Applied For Expected Fees • PPP weighted average fee rate: 2.88% < $350,000 $119,910 $5,995 • Over 1,700 loans in PPP $350,000 - $2,000,000 211,658 6,350 • Over $477 million PPP funded as of April 20, 2020, > $2,000,000 149,277 1,493 with the remainder to be funded by April 22, 2020. Totals $480,845 $13,838 • Over 39,000 employees at companies receiving funds through the PPP 6 ORIGIN BANCORP, INC. _______
WELL DIVERSIFIED LOAN PORTFOLIO DOLLARS IN MILLIONS Loan Composition(1) at 03/31/2020: $4,481 C&I, Owner Occupied C&D and CRE, Mtg. Warehouse: $2,474 Mtg. Warehouse: 10% Finance & Insurance: 6% Real Estate & Transportation: 3% Construction: 10% Retail Shopping: 3% Owner Banks: 3% Occupied Commercial & Restaurants: 2% Industrial Construction/ Land/Land Energy: 2% ("C&I"): 32% Healthcare: 2% Development ("C&D"): 3% Owner Misc: 14% Residential Occupied CRE: Real Estate and 10% Consumer: 16% Mtg. Warehouse: Non-Owner Occupied C&D and CRE: $1,283 10% Non-Owner Non-Owner Occupied CRE: Occupied 19% C&D: 10% C&I, Owner Occupied C&D and CRE, Mtg. Warehouse: 55% Misc: 6% Finance & Insurance: 1% Non-Owner Occupied C&D and CRE: 29% Hotels: 1% Restaurants: 1% Real Estate & Multifamily: 2% Construction: 10% (1) Does not include loans held for sale. Retail Shopping: 2% Healthcare: 6% 7 ORIGIN BANCORP, INC. _______
DEEP DIVE - SELECTED SECTORS LHFI at 03/31/2020 All Other LHFI: 77.8% • LHFI ended the quarter at $4.48 billion, an increase of $338.0 million, or 8.2%, compared to the end of 2019. • Six sectors analyzed account for 22.2% Hotels: 1.4% of total LHFI. Energy: 1.9% Transportation: 2.7% • Approximately 55% of LHFI are Restaurants: 3.0% associated with C&I, Owner Occupied Retail: 4.7% CRE and Mortgage Warehouse. Healthcare: 8.5% LHFI-Sectors Outstanding Allowance Wtd. Avg. (dollars in thousands) Balance Amount Avg loan size Risk Rating Past Due NPL Selected sectors * $992,718 $19,550 $786 4.32 1.97% $23,281 All other LHFI 3,488,467 36,513 346 3.98 0.90 9,751 Total LHFI $4,481,185 $56,063 $395 4.06 1.14% $33,032 * Selected sectors include healthcare, retail, restaurants, transportation, energy and hotels. 8 ORIGIN BANCORP, INC. _______
HEALTHCARE SECTORS Healthcare Portfolio at 03/31/2020 All Other Healthcare: 9% Healthcare Stats: Offices of Assisted Healthcare Living • Balance represents 8.5% of total LHFI Professionals: Facilities: 31% 14% • Healthcare Sector DSCR: 1.51x $381.8M • Healthcare Sector LTV: 41% CRE Healthcare: 17% Nursing Care Facilities: 29% Healthcare Sub-Sectors # of Total Outstanding Avg. Loan Allowance Wtd. Avg. (dollars in thousands) Loans Commitment Balance Size Amount Risk Rating Past Due NPL Assisted Living (1) 16 $143,493 $118,790 $7,424 $5,837 4.82 8.58% $10,196 Nursing Care 38 111,398 109,554 2,961 1,256 4.49 — — CRE Healthcare 23 71,923 64,227 2,792 279 4.00 — — Offices of Healthcare Professionals 294 62,526 53,514 185 605 4.24 0.69 222 All Other Healthcare (2) 83 41,868 35,712 441 1,002 4.94 3.54 1,000 Total Healthcare 454 $431,208 $381,797 $854 $8,979 4.52 3.10% $11,418 (1) Past dues excluding NPLs for Assisted Living, which is one relationship, is 0%. (2) Past dues excluding NPLs for All Other Healthcare, which is one relationship, is 0.74%. 9 ORIGIN BANCORP, INC. _______
RETAIL SHOPPING SECTORS Retail Shopping Portfolio at 03/31/2020 Retail Shopping: 13% Retail Shopping Stats: • Balance represents 4.7% of total LHFI • Retail shopping sector DSCR: 1.41x • Retail shopping sector LTV: 36% CRE Retail $212.9M Stores: 28% National Credit Tenant: 59% Retail Shopping Sub-Sectors # of Total Outstanding Avg. Loan Allowance Wtd. Avg. (dollars in thousands) Loans Commitment Balance Size Amount Risk Rating Past Due NPL CRE Retail Stores 37 $62,165 $59,678 $1,613 $1,244 4.21 —% $4,150 National Credit Tenant 51 152,630 125,632 2,513 736 3.86 — — Retail Shopping 199 38,391 27,583 148 437 4.30 1.65 525 Total Retail 287 $253,186 $212,893 $777 $2,417 4.02 0.21% $4,675 10 ORIGIN BANCORP, INC. _______
RESTAURANT SECTORS Restaurant Portfolio at 03/31/2020 Restaurant Stats: Limited-Service Restaurant: 21% • Balance represents 3.0% of total LHFI Full Services • Restaurant sector DSCR: 1.40x Restaurant: $132.4M 43% • Restaurant sector LTV: 54% • Restaurant sector past due: 0% • Restaurant sector NPL: $0 CRE Restaurant: 36% Restaurant Sub-Sectors # of Total Outstanding Avg. Loan Allowance Wtd. Avg. (dollars in thousands) Loans Commitment Balance Size Amount Risk Rating Past Due NPL Full Service Restaurants 112 $68,645 $57,210 $561 $1,313 4.52 —% $— CRE Restaurant 48 50,565 47,161 983 289 4.06 — — Limited-Service Restaurant 41 28,451 28,059 684 431 4.42 — — Total Restaurant 201 $147,661 $132,430 $693 $2,033 4.34 —% $— 11 ORIGIN BANCORP, INC. _______
TRANSPORTATION SECTORS Transportation Portfolio at 03/31/2020 Airlines & Aircraft Transportation Stats: Operations: 17% • Balance represents 2.7% of total LHFI Trucking & All Other • Transportation sector DSCR: 4.11x Transportation: 41% $119.5M • Transportation sector LTV: 56% Barge Service: 42% Transportation Sub-Sectors # of Total Outstanding Avg. Loan Allowance Wtd. Avg. (dollars in thousands) Loans Commitment Balance Size Amount Risk Rating Past Due NPL Trucking & All Other Transportation 200 $82,200 $48,643 $266 $826 4.10 0.15% $11 Barge Service 15 51,925 50,490 3,366 700 3.31 — — Airlines and Aircraft Operations (1) 20 21,031 20,415 1,021 350 5.19 23.84 4,867 Total Transportation 235 $155,156 $119,548 $548 $1,876 3.95 4.13% $4,878 (1) Past dues excluding NPL's for Airlines & Aircraft Operations is 0%. 12 ORIGIN BANCORP, INC. _______
ENERGY SECTORS Energy Portfolio at 03/31/2020 Midstream: 15% Energy Stats: • Balance represents 1.9% of total LHFI • No Exploration & Production lending exposure $82.8M • Energy sector DSCR: 12.36x • Energy sector LTV: 78% Services: 85% Energy Sub-Sectors # of Total Outstanding Avg. Loan Allowance Wtd. Avg. (dollars in thousands) Loans Commitment Balance Size Amount Risk Rating Past Due NPL Midstream 27 $24,000 $12,830 $513 $314 4.00 —% $— Services (1) 85 103,969 69,956 972 3,514 4.90 3.30 2,311 Total Energy 112 $127,969 $82,786 $853 $3,828 4.76 2.79% $2,311 (1) Past dues excluding NPL's for Energy Services is 0%. 13 ORIGIN BANCORP, INC. _______
HOTEL SECTORS Hotel Portfolio at 03/31/2020 Bed-and-Breakfast Inns: 2% Boutique & Independent: 6% Hotel Stats: IHG: 5% • Balance represents 1.4% of total LHFI Hilton: 30% • Hotel sector DSCR: 1.40x Choice: 12% • Hotel sector LTV: 41% $63.3M • Hotel sector past due: 0% Hyatt: 18% • Hotel sector NPL: $0 Marriott: 27% • No conference center hotels Hotels & Motels (by flag): 98% Hotel Sub-Sectors # of Total Outstanding Avg. Loan Allowance Wtd. Avg. (dollars in thousands) Loans Commitment Balance Size Amount Risk Rating Past Due NPL Bed-and-Breakfast Inns 7 $1,054 $1,052 $150 $30 5.18 —% $— Hotels & Motels 31 64,585 62,212 2,145 387 4.15 — — Total Hotel 38 $65,639 $63,264 $1,757 $417 4.17 —% $— 14 ORIGIN BANCORP, INC. _______
ASSET QUALITY TRENDS LHFI 1.93% 1.92% 1.65% 1.57% 1.67% 1.14% 0.99% 0.79% 0.76% 0.80% 0.75% 0.72% 0.75% 0.72% 0.74% 0.29% 0.26% 0.11% (0.06)% 0.07% 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 Nonperforming LHFI / LHFI Past due LHFI / LHFI Net Charge-Offs / Average LHFI (annualized) Classified Loans / LHFI CECL CECL Economic Drivers: Adoption Reserve (dollars in thousands) 12/31/2019 Impact 01/01/2020 Build 03/31/2020 Commercial real estate $10,013 $(5,052) $4,961 $4,293 $9,254 • Shrinking U.S. economy in 2020 Construction/land/land development 3,711 1,141 4,852 202 5,054 Residential real estate 6,332 (2,526) 3,806 689 4,495 • Rapidly rising unemployment rate Commercial and industrial 16,960 7,296 24,256 11,567 35,823 • Key source: Moody's Analytics Mortgage warehouse lines of credit 262 29 291 488 779 Consumer 242 360 602 56 658 Total $37,520 $1,248 $38,768 $17,295 $56,063 % of LHFI 0.91% 0.94% 1.25% 15 ORIGIN BANCORP, INC. _______
NET INTEREST INCOME AND NIM TRENDS DOLLARS IN THOUSANDS • Net interest income decreased $1.3 million in 1Q2020 from 4Q2019, Yield on LHFI and increased $784 thousand in1Q2020 from 1Q2019. • Asset sensitive balance sheet lead to quarterly NIM compression of 5.50% 5.50% 14 bps in 1Q2020 from 4Q2019. 5.31% 4.95% 4.85% 5.28% 5.29% 5.23% • While the average 1M LIBOR and average Prime Rate both declined 4.83% 39 bps between 1Q2020 and 4Q2019, average yields on LHFI only 4.44% 2.50% 2.44% fell 10 bps during the same period. 2.18% 1.79% 1.40% • Cost of interest bearing deposits declined 16 bps during 1Q2020, while lower average NIB deposits during 1Q2020 led to a lesser decline in cost of total deposits (9 bps). 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 Yield on LHFI Avg. 1M LIBOR $44,622 $44,095 $42,969 $42,810 $42,026 Avg. Prime Rate Cost of Funds 3.80% 1.61% 1.59% 3.70% 3.69% 1.48% 1.44% 3.58% 1.29% 1.25% 1.28% 1.20% 3.44% 1.10% 1.05% 1.19% 1.16% 1.11% 1.04% 0.95% 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 Cost of Interest Bearing Deposits Net Interest Income NIM (FTE) Cost of Total Deposits Cost of Total Deposits & Borrowings 16 ORIGIN BANCORP, INC. _______
ASSET SENSITIVE PROFILE Interest Rate Shock Profile (03/31/2020) 22.2% 16.2% 10.9% 9.8% 7.3% 5.3% 6.4% 3.8% —% (2.8)% (4.9)% -100 bps 0 bps 100 bps 200 bps 300 bps 400 bps % Change in NII % Change in EVE LHFI: Fixed \ Variable (by Index) at 03/31/2020 Other indices: 1% • Variable rate LHFI make up 56% of total LHFI, with over 30% based on 1 month LIBOR. Prime: 24% • Fixed/variable make-up consistent with prior quarter, but slightly more variable loans due to the increase in mortgage Fixed: 44% warehouse lines. • $265 million in LIBOR ARMs included as fixed rate loans due to initial reset being in 2021 or later. 1m LIBOR: 31% 17 ORIGIN BANCORP, INC. _______
NET REVENUE DISTRIBUTION DOLLARS IN THOUSANDS Net Interest Income \ Noninterest Income Noninterest Income $12,880 $57,502 $53,630 $54,145 $54,913 $54,954 $12,144 $11,604 $1,614 $12,880 $11,176 $10,818 $1,692 $11,604 $11,176 $12,144 $10,818 $1,661 $1,281 $1,351 $1,392 $676 $511 $172 $151 $3,203 $3,036 $2,428 $44,622 $3,687 $42,026 $42,969 $44,095 $42,810 $3,510 $3,252 $3,092 $3,359 $2,606 $2,769 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 Net Interest Income Noninterest Income $3,316 $3,435 $3,620 $3,488 $3,320 • Noninterest income regularly accounts for approximately 20% of total net revenue. • The mortgage banking revenue decrease was primarily driven 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 a decrease in the mortgage servicing fair value valuation due to declining interest rates as well as uncertainty in the economy Service Charges & Fees at quarter end. Mortgage Banking Revenue • Swap fee income generation continues to be a focus in 2020. Increase in 1Q2020 from 12Q2019 was driven by increased Insurance Commission & Fee Income volume of new transactions. Swap Fee Income • Insurance commissions revenue increased in 1Q2020 Other compared to 4Q2019. 18 ORIGIN BANCORP, INC. _______
NONINTEREST EXPENSE COMPOSITION DOLLARS IN THOUSANDS $37,095 $36,534 $36,097 $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 2020. $6,472 $6,786 $5,656 $6,444 $5,792 • Efficiency improvements during year partially offset by declining interest $1,849 margin. $1,481 $1,632 $1,441 $1,712 $1,810 $1,587 $1,801 $2,003 $1,763 • Other noninterest expense decreased in 1Q2020 compared to 4Q2019 $4,200 $4,044 $4,241 by $342 thousand. $4,274 $4,221 • 2020 focus on technology strategy to build efficient scale to support additional organic growth. $22,613 $22,764 Operating Leverage $21,523 $22,074 $21,988 100% 3.5% ) % ( ) 2.95% 2.95% % 3.0% S ( 2.75% T E O 80% I 2.69% 2.69% S T S A 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 A R 68.51% E Y 66.53% 2.5% 65.69% G C A N R Salaries and Employee Benefits E 65.97% 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 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 Other 19 ORIGIN BANCORP, INC. _______
DEPOSITS DOLLARS IN MILLIONS Average Deposits Loans & Deposits by State at 03/31/2020 Loans Deposits $4,325 $4,203 $3,899 $3,977 $3,842 $782 $803 $827 29% $821 $847 $162 $162 44% $168 $242 $319 14% $2,088 $2,283 $1,906 $1,818 $1,703 15% $1,150 $973 $1,018 $1,076 $1,098 57% 41% 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 Noninterest-bearing Interest-bearing (1) Brokered Time Deposits (1) Average brokered time deposits are included in the brokered category. 20 ORIGIN BANCORP, INC. _______
DEPOSIT REPRICING AND STRATEGY DOLLARS IN MILLIONS Deposit Cost Trends (QTD Annualized) Time Deposit Repricing Schedule 2.13% 2.16% Maturity Balance WAR 2.04% 2.08% 1.98% 1.19% 1.16% 2Q2020 $153 1.96% 1.11% 1.04% 3Q2020 151 2.02 0.95% 4Q2020 142 1.88 0.92% 0.95% 0.82% 1Q2021 121 1.69 0.77% 0.80% 2Q2021+ 200 1.83 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 Total $767 1.88% Cost of Total Deposits Interest Bearing Deposits • Target time deposit rates 1% or less for new deposit customers. Time Deposits Non-Maturity Deposit Cost Migration Successfully decreased rates on non-tiered, non-maturity deposits through March 2020 in response to recent Federal Reserve rate cuts, with the most significant cuts coming in March. 06/30/2019 03/31/2020 % of Total Bps Contribution % of Total Bps Contribution • Since Fed rate cuts began in 2019, over 20 Account rate range Deposits* of Tot Dep Cost Deposits* of Tot Dep Cost bps of run-rate deposit cost has been 0 - 25 bps 41.10% 2 bps 45.30% 2 bps eliminated from more than 65% of our deposits. 25 - 50 bps 2.40 1 bps 3.70 2 bps 50-75 bps 1.10 1 bps 4.70 3 bps • Over $170 million of stable brokered deposits included at 03/31/2020 which repriced from 75 - 100 bps 0.70 1 bps 1.40 1 bps 151 bps to 54 bps on April 7, 2020, Greater than 100 bps 18.80 42 bps 11.10 18 bps contributing 4 bps reduction to total deposits going forward. Total 64.10% 47 bps 66.20% 26 bps * Total deposits excluding overnight brokered funds. 21 ORIGIN BANCORP, INC. _______
LIQUIDITY Primary and Secondary Liquidity Sources (dollars in thousands) 1Q2020 4Q2019 Cash and Equivalents $560,179 $291,518 • Pledged more public deposits with FHLB Letters of Credit during 1Q2020, shifting away from pledging securities. Unpledged Investment Securities 451,336 235,295 • Drew down additional short-term advances of $300 million Unsecured Lines of Credit 190,000 180,000 from FHLB in 1Q2020. Federal Reserve Discount Window Availability 896,373 855,066 • Purchased net $75 million in securities during 1Q2020. FHLB Borrowing Availability 140,250 601,912 Total Primary and Secondary Liquidity $2,238,138 $2,163,791 Significant 1Q2020 Liquidity Sources/Uses • Warehouse loans largest loan category growth during 1Q2020, (dollars in thousands) Source/(Use) followed by C&I line utilization. Brokered Deposits Increase $282,582 • Short-term brokered deposits usage at quarter end. FHLB Advances Drawn 300,000 • Seasonal increase in public funds deposits. Public Fund Deposits Increase 30,197 Subordinated Debt Issuance 68,868 • Opportunities to fund PPP loans with Paycheck Protection Program Liquidity Facility ("PPPLF") or discount window Investment Securities Increase (87,711) advances. Loan HFI Increase (337,989) On-hand Liquidity Generated by Sources $255,947 22 ORIGIN BANCORP, INC. _______
CAPITAL Tier 1 Capital to Risk-Weighted Assets Total Capital to Risk-Weighted Assets Bank Level Company Level Bank Level Company Level 12.3% 12.1% 13.1% 13.0% 13.1% 13.4% 11.9% 11.7% 11.6% 11.6% 11.9% 12.7% 12.5% 12.5% 12.4% 12.8% 11.3% 11.1% 12.1% 10.7% (1) 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 • Completion of $70 million Subordinated Notes Tier 1 Capital to Average Assets (Leverage Ratio) Offering Bank Level Company Level ◦ Origin Bank completed the $70 million offering of 4.25% fixed-to-floating rate subordinated notes due 2030 in February 2020, which qualifies as Tier 2 10.9% 11.2% 11.1% 10.9% 10.9% capital 10.7% 10.5% 10.6% 10.4% 10.7% • 2020 Return to Shareholders ◦ Return of $2.9 million ($723,000 in stock buyback and $2.2 million in common dividends) YTD, but 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 have since suspended buy-back activity based on current market conditions 23 ORIGIN BANCORP, INC. _______
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS Calculation of Tangible Common Equity: 1Q2020 4Q2019 3Q2019 2Q2019 1Q2019 Total Common Stockholders' Equity $606,631 $599,262 $588,363 $584,293 $568,122 Less: Goodwill and Other Intangible Assets, Net 31,241 31,540 31,842 32,144 32,497 Tangible Common Equity $575,390 $567,722 $556,521 $552,149 $535,625 Calculation of Book Value and Tangible Book Value per Common Share: Common Shares Outstanding at the End of the Period 23,475,948 23,480,945 23,481,781 23,774,238 23,745,985 Book Value per Common Share $25.84 $25.52 $25.06 $24.58 $23.92 Tangible Book Value per Common Share $24.51 $24.18 $23.70 $23.22 $22.56 Pre-Tax Pre-Provision Earnings: Net Income $753 $12,827 $14,617 $12,283 $14,155 Provision for credit losses 18,531 2,377 4,201 1,985 1,005 Income tax expense (427) 3,175 3,620 2,782 3,089 Pre-Tax Pre-Provision Earnings $18,857 $18,379 $22,438 $17,050 $18,249 24 ORIGIN BANCORP, INC. _______
Exhibit 99.3
FOR IMMEDIATE RELEASE
April 22, 2020
Origin Bancorp, Inc. Announces Declaration of Quarterly Cash Dividend
RUSTON, LOUISIANA (April 22, 2020) - Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin"), the holding company for Origin Bank, today announced that on April 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 May 29, 2020, to stockholders of record as of the close of business on May 15, 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; changes in economic conditions; the duration and impacts of the COVID-19 global pandemic and efforts to contain its transmission, including the effect of these factors on the Company's business, customers and economic conditions generally; 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