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obnk-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

Commission file number 001-38487

Origin Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Louisiana						72-1192928
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

500 South Service Road East

Ruston, Louisiana 71270

(318) 255-2222

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Exchange on which registered
Common Stock, par value $5.00 per share	OBK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 30,906,716 shares of Common Stock, par value $5.00 per share, were issued and outstanding at October 31, 2023.

ORIGIN BANCORP, INC.

FORM 10-Q

SEPTEMBER 30, 2023

INDEX


			Page
PART I - FINANCIAL INFORMATION			6

Item 1. Financial Statements (Unaudited):			6

Consolidated Balance Sheets at September 30, 2023 (unaudited), and December 31, 2022			6
Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022, (unaudited)			7
Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022, (unaudited)			9
Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022, (unaudited)			10
Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022, (unaudited)			12

Condensed Notes to Consolidated Financial Statements			14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			53

Item 3. Quantitative and Qualitative Disclosures about Market Risk			77

Item 4. Controls and Procedures			79

Part II - OTHER INFORMATION			80

Item 1. Legal Proceedings			80

Item 1A. Risk Factors			80

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities			80

Item 3. Defaults Upon Senior Securities			80

Item 4. Mine Safety Disclosures			80

Item 5. Other Information			80

Item 6. Exhibits			81

SIGNATURE PAGE			82

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 or negatives of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in our forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

•economic uncertainty or a deterioration in economic conditions or slowdowns in economic growth in the United States generally, and particularly in the market areas in which we operate and in which our loans are concentrated, including declines in home sale volumes and financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment;

•adverse developments in the banking industry highlighted by high-profile bank failures and the impact of such developments on customer confidence, liquidity and regulatory responses to these developments (including increases in the cost of our deposit insurance assessments), our ability to effectively manage our liquidity risk and any growth plans and the availability of capital and funding;

•our ability to comply with applicable capital and liquidity requirements, including our ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets;

•fluctuating and/or volatile interest rates, capital markets and the impact of inflation on our business and financial results, as well as the impact on our customers (including the velocity of loan repayment);

•changes in the interest rate environment may reduce interest margins;

•prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions may vary substantially from period to period;

•global business and economic conditions and in the financial services industry, nationally and within our local market areas;

•an increase in unemployment levels, slowdowns in economic growth and threats of recession;

•customer income, creditworthiness and confidence, spending and savings that may affect customer bankruptcies, defaults, charge-offs and deposit activity;

•the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in our loan portfolio;

•the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs.

•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in merger/acquisition transactions;

•changes in the prices, values and sales volumes of residential and commercial real estate, especially as they relate to the value of collateral supporting the Company’s loans;

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•natural disasters and adverse weather events (including hurricanes), acts of terrorism, an outbreak of hostilities, (including the impacts related to or resulting from Russia’s military action in Ukraine, and the ongoing conflict in Israel and the surrounding region, including the imposition of additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments), regional or national protests and civil unrest (including any resulting branch closures or property damage), widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond our control;

•system failures, cybersecurity threats and/or security breaches and the cost of defending against them and any reputational or other financial risks following such a cybersecurity incident;

•the discontinuation of LIBOR (and its replacement with alternatives) could result in financial, operational, legal, reputational or compliance risks to us;

•deterioration of our asset quality;

•risks associated with widespread inflation or deflation;

•the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition or merger targets and successfully acquire and integrate desirable financial institutions;

•changes in the value of collateral securing our loans;

•our ability to anticipate interest rate changes and manage interest rate risk;

•the effectiveness of our risk management framework and quantitative models;

•our inability to receive dividends from our bank subsidiary and to service debt, pay dividends to our common stockholders, repurchase our shares of common stock and satisfy obligations as they become due;

•changes in our operation or expansion strategy or our ability to prudently manage our growth and execute our strategy;

•changes in management personnel;

•our ability to maintain important deposit customer relationships, our reputation or otherwise avoid liquidity risks;

•increasing costs as we grow and compete for deposits;

•operational risks associated with our business;

•increased competition in the financial services industry, particularly from regional and national institutions, as well as fintech companies, may accelerate due to the current economic environment;

•our level of nonperforming assets and the costs associated with resolving any problem loans, including litigation and other costs;

•potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings or enforcement actions;

•risks related to environmental, social and governance (“ESG”) strategies and initiatives, the scope and pace of which could alter our reputation and shareholder, associate, customer and third-party affiliations;

•changes in the utility of our non-GAAP measurements and their underlying assumptions or estimates;

•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, may change the treatment and recognition of critical financial line items and affect our profitability;

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•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;

•a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget;

• the risk that the regulatory environment may not be conducive to or may prohibit the consummation of future mergers and/or business combinations, may increase the length of time and amount of resources required to consummate such transactions, and may reduce the anticipated benefit; and

•our ability to manage the risks involved in the foregoing.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. In addition, as a result of these and other factors, our past financial performance should not be relied upon as an indication of future performance. 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 we do 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 emerge from time to time, and it is not possible for us to predict those events or how they may affect us. In addition, we cannot assess the impact of each factor on our 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.

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ORIGIN BANCORP, INC.

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)


	September 30, 2023		December 31, 2022
Assets	(Unaudited)
Cash and due from banks	$	141,705	$	150,180
Interest-bearing deposits in banks	163,573		208,792

Total cash and cash equivalents	305,278		358,972

Securities:
Available for sale	1,290,839		1,641,484
Held to maturity, net allowance for credit losses of $890 and $899 at September 30, 2023, and December 31, 2022, respectively (fair value of $11,005 and $11,970 at September 30, 2023, and December 31, 2022, respectively)	10,790		11,275
Securities carried at fair value through income	6,772		6,368
Total securities	1,308,401		1,659,127
Non-marketable equity securities held in other financial institutions	63,842		67,378
Loans held for sale ($14,944 and $25,389 at fair value at September 30, 2023, and December 31, 2022, respectively)	14,944		49,957
Loans, net of allowance for credit losses of $95,177 and $87,161 at September 30, 2023, and December 31, 2022, respectively	7,472,886		7,002,861
Premises and equipment, net	111,700		100,201
Mortgage servicing rights	19,189		20,824
Cash surrender value of bank-owned life insurance	39,688		39,040
Goodwill	128,679		128,679
Other intangible assets, net	42,460		49,829
Accrued interest receivable and other assets	226,236		209,199
Total assets	$	9,733,303	$	9,686,067
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits	$	2,008,671	$	2,482,475
Interest-bearing deposits	4,728,263		4,505,940
Time deposits	1,637,554		787,287
Total deposits	8,374,488		7,775,702

Federal Home Loan Bank (“FHLB”) advances, repurchase obligations and other borrowings	12,213		639,230
Subordinated indebtedness, net	196,825		201,765
Accrued expenses and other liabilities	150,832		119,427
Total liabilities	8,734,358		8,736,124

Stockholders’ equity:



Common stock ($5.00 par value; 50,000,000 shares authorized; 30,906,716 and 30,746,600 shares issued at September 30, 2023, and December 31, 2022, respectively)	154,534		153,733
Additional paid‑in capital	525,434		520,669
Retained earnings	491,706		435,416
Accumulated other comprehensive loss	(172,729)		(159,875)
Total stockholders’ equity	998,945		949,943
Total liabilities and stockholders’ equity	$	9,733,303	$	9,686,067

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Income

(Unaudited)

(Dollars in thousands, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest and dividend income
Interest and fees on loans	$	121,204	$	79,803	$	343,142	$	186,972
Investment securities-taxable	8,194		7,801		24,658		20,030
Investment securities-nontaxable	1,281		2,151		3,974		5,044
Interest and dividend income on assets held in other financial institutions	4,772		1,482		16,132		3,262
Total interest and dividend income	135,451		91,237		387,906		215,308
Interest expense
Interest-bearing deposits	55,599		7,734		136,686		13,689
FHLB advances and other borrowings	3,207		2,717		17,038		5,203
Subordinated indebtedness	2,515		2,263		7,614		5,887
Total interest expense	61,321		12,714		161,338		24,779
Net interest income	74,130		78,523		226,568		190,529
Provision for credit losses	3,515		16,942		14,018		20,067
Net interest income after provision for credit losses	70,615		61,581		212,550		170,462
Noninterest income
Insurance commission and fee income	6,443		5,666		19,639		17,815
Service charges and fees	4,621		4,734		13,914		13,006
Mortgage banking revenue (loss)	892		(929)		4,075		5,521
Other fee income	944		1,162		2,856		2,398
Swap fee income	366		25		1,081		165
(Loss) gain on sales of securities, net	(7,173)		1,664		(7,029)		1,664
Limited partnership investment (loss) income	(425)		112		(128)		31
Gain (loss) on sales and disposals of other assets, net	45		70		(3)		(209)

Other income	12,406		1,219		15,734		3,454
Total noninterest income	18,119		13,723		50,139		43,845

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Income - Continued

(Unaudited)

(Dollars in thousands, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Noninterest expense
Salaries and employee benefits	$	34,624	$	31,834	$	102,888	$	85,632
Occupancy and equipment, net	6,790		5,399		19,871		14,340
Data processing	2,775		2,689		8,528		7,588
Intangible asset amortization	2,264		1,872		7,369		2,934
Office and operations	2,868		2,121		7,887		5,843
Professional services	1,409		1,188		4,491		2,668
Loan-related expenses	1,220		1,599		3,941		4,421
Advertising and marketing	1,371		1,196		4,296		2,926
Electronic banking	1,384		1,087		3,609		2,900
Franchise tax expense	520		957		2,392		2,565
Regulatory assessments	1,913		877		4,596		2,305
Communications	390		279		1,181		812
Merger-related expense	—		3,614		—		4,992
Other expenses	1,135		1,529		3,261		3,239
Total noninterest expense	58,663		56,241		174,310		143,165
Income before income tax expense	30,071		19,063		88,379		71,142
Income tax expense	5,758		2,820		18,004		12,905
Net income	$	24,313	$	16,243	$	70,375	$	58,237




Basic earnings per common share	$	0.79	$	0.57	$	2.29	$	2.31
Diluted earnings per common share	0.79		0.57		2.28		2.30

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollars in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	24,313	$	16,243	$	70,375	$	58,237
Other comprehensive income (loss)
Securities available for sale and transferred securities:
Net unrealized holding gain (loss) arising during the period	(32,357)		(73,757)		(23,355)		(228,605)
Reclassification adjustment for net (gain) loss included in net income	7,173		(1,664)		7,029		(1,664)
Change in the net unrealized gain (loss) on available for sale investment securities, before tax	(25,184)		(75,421)		(16,326)		(230,269)
Net gain realized as a yield adjustment in interest on transferred investment securities	(3)		(3)		(8)		(9)
Change in the net unrealized gain (loss) on investment securities, before tax	(25,187)		(75,424)		(16,334)		(230,278)
Income tax expense (benefit) related to net unrealized gain (loss) arising during the period	(5,289)		(15,839)		(3,430)		(48,359)
Change in the net unrealized gain (loss) on investment securities, net of tax	(19,898)		(59,585)		(12,904)		(181,919)

Cash flow hedges:
Net unrealized gain arising during the period	167		438		1,078		1,167
Reclassification adjustment for net (gain) loss included in net income	(106)		19		(1,014)		(45)
Change in the net unrealized gain on cash flow hedges, before tax	61		419		64		1,212
Income tax expense related to net unrealized gain on cash flow hedges	13		88		14		255
Change in net unrealized net gain on cash flow hedges, net of tax	48		331		50		957

Other comprehensive income (loss), net of tax	(19,850)		(59,254)		(12,854)		(180,962)
Comprehensive income (loss)	$	4,463	$	(43,011)	$	57,521	$	(122,725)

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

(Dollars in thousands, except per share amounts)


	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance at January 1, 2022	23,746,502	$	118,733	$	242,114	$	363,635	$	5,729	$	730,211
Net income	—	—		—		20,683		—		20,683
Other comprehensive loss, net of tax	—	—		—		—		(71,619)		(71,619)
Stock based compensation expense	—	—		737		—		—		737

Exercise of stock options, net of shares withheld	2,246	11		(62)		—		—		(51)
Dividends declared - common stock ($0.13 per share)	—	—		—		(3,096)		—		(3,096)

Balance at March 31, 2022	23,748,748	118,744		242,789		381,222		(65,890)		676,865
Net income	—	—		—		21,311		—		21,311
Other comprehensive loss, net of tax	—	—		—		—		(50,089)		(50,089)
Stock based compensation expense	—	—		841		—		—		841
Stock based compensation shares vested and distributed, net of shares withheld	12,840	64		(64)		—		—		—
Exercise of stock options, net of shares withheld	20,000	100		65		—		—		165
Shares issued under employee stock purchase program	26,089	130		737		—		—		867
Dividends declared - common stock ($0.15 per share)	—	—		—		(3,587)		—		(3,587)
Balance at June 30, 2022	23,807,677	119,038		244,368		398,946		(115,979)		646,373
Net income	—	—		—		16,243		—		16,243
Other comprehensive loss, net of tax	—	—		—		—		(59,254)		(59,254)
Stock based compensation expense	—	—		970		—		—		970
Stock based compensation shares vested and distributed, net of shares withheld	23,260	116		(116)		—		—		—
Exercise of stock options, net of shares withheld	35,887	180		785		—		—		965
Options assumed - BTH Merger	—	—		13,687		—		—		13,687
Stock issuance - BTH Merger	6,794,910	33,975		258,682		—		—		292,657
Dividends declared - common stock ($0.15 per share)	—	—		—		(4,617)		—		(4,617)

Balance at September 30, 2022	30,661,734	$	153,309	$	518,376	$	410,572	$	(175,233)	$	907,024

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Changes in Stockholders' Equity - Continued

(unaudited)

(Dollars in thousands, except per share amounts)


	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
Balance at January 1, 2023	30,746,600	$	153,733	$	520,669	$	435,416	$	(159,875)	$	949,943
Net income	—	—		—		24,302		—		24,302
Other comprehensive income, net of tax	—	—		—		—		21,394		21,394
Stock based compensation expense	—	—		1,391		—		—		1,391
Stock based compensation shares vested and distributed, net of shares withheld	9,750	49		(138)		—		—		(89)
Exercise of stock options, net of shares withheld	24,503	122		202		—		—		324
Dividends declared - common stock ($0.15 per share)	—	—		—		(4,678)		—		(4,678)

Balance at March 31, 2023	30,780,853	153,904		522,124		455,040		(138,481)		992,587
Net income	—	—		—		21,760		—		21,760
Other comprehensive loss, net of tax	—	—		—		—		(14,398)		(14,398)
Stock based compensation expense	—	—		1,160		—		—		1,160
Stock based compensation shares vested and distributed, net of shares withheld	23,647	118		(118)		—		—		—
Exercise of stock options, net of shares withheld	15,492	78		249		—		—		327
Shares issued under employee stock purchase program	46,213	231		887		—		—		1,118
Dividends declared - common stock ($0.15 per share)	—	—		—		(4,695)		—		(4,695)

Balance at June 30, 2023	30,866,205	154,331		524,302		472,105		(152,879)		997,859
Net income	—	—		—		24,313		—		24,313
Other comprehensive loss, net of tax	—	—		—		—		(19,850)		(19,850)
Stock based compensation expense	—	—		1,335		—		—		1,335
Stock based compensation shares vested and distributed, net of shares withheld	27,388	137		(354)		—		—		(217)
Exercise of stock options, net of shares withheld	13,123	66		151		—		—		217
Dividends declared - common stock ($0.15 per share)	—	—		—		(4,712)		—		(4,712)

Balance at September 30, 2023	30,906,716	$	154,534	$	525,434	$	491,706	$	(172,729)	$	998,945

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)


	Nine Months Ended September 30,
Cash flows from operating activities:	2023		2022
Net income	$	70,375	$	58,237
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	14,018		20,067
Depreciation and amortization	13,333		7,809
Net amortization on securities	5,309		7,079
Accretion of net premium/discount on purchased loans	(2,067)		(1,187)
Amortization of investments in tax credit funds	1,368		951
Loss (gain) on sale of securities, net	7,029		(1,664)
Deferred income tax expense	14,499		11,356
Stock-based compensation expense	3,886		2,548
Originations of mortgage loans held for sale	(148,866)		(224,093)
Proceeds from mortgage loans held for sale	127,574		222,638
Gain on mortgage loans held for sale, including origination of mortgage servicing rights	(3,036)		(6,403)
Mortgage servicing rights valuation adjustment	485		(2,409)
Net loss on disposals of premises and equipment and sale of other real estate owned	2		3
Increase in the cash surrender value of life insurance	(648)		(533)
Gain on equity securities without a readily determinable fair value	(10,097)		—
Net losses on sales and write-downs of other real estate owned	1		206

Net change in operating leases	(793)		24
Increase in other assets	(8,718)		(7,535)
Increase in other liabilities	16,821		6,717
Net cash provided by operating activities	100,475		93,811
Cash flows from investing activities:
Cash acquired in business combination	—		69,953
Purchases of securities available for sale	(751)		(557,151)
Maturities and pay downs of securities available for sale	107,679		118,189
Proceeds from sales and calls of securities available for sale	214,302		484,421
Purchase of securities held to maturity	—		(7,000)
Maturities, pay downs and calls of securities held to maturity	486		17,750
Pay downs of securities carried at fair value	285		275
Net redemption (purchases) of non-marketable equity securities held in other financial institutions	15,025		(2,664)
Originations of mortgage warehouse loans	(5,048,595)		(7,638,507)
Proceeds from pay-offs of mortgage warehouse loans	5,047,169		7,846,760
Net increase in loans, excluding mortgage warehouse and loans held for sale	(449,804)		(609,608)

Return of capital and other distributions from limited partnership investments	1,591		6,657

Capital calls on limited partnership investments	(2,156)		(97)
Purchase of low-income housing tax credit investments	(538)		—
Purchases of premises and equipment	(17,514)		(5,636)
Proceeds from sales of premises and equipment	49		—

Net cash used in investing activities	(132,772)		(276,658)

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Cash Flows - Continued

(Unaudited)

(Dollars in thousands)


	Nine Months Ended September 30,
Cash flows from financing activities:	2023		2022
Net increase (decrease) in deposits	$	598,786	$	(359,825)

Repayments on long-term FHLB advances	(199)		(193)
Proceeds from short-term FHLB advances	5,890,000		5,960,000
Repayments on short-term FHLB advances	(6,440,000)		(5,810,000)
Repurchase of subordinated debentures, net	(4,729)		—
Net decrease in other short-term borrowings	(30,000)		—

Net decrease in securities sold under agreements to repurchase	(22,250)		(2,151)

Dividends paid	(13,912)		(11,263)
Cash received from exercise of stock options	907		1,131



Net cash used in financing activities	(21,397)		(222,301)
Net decrease in cash and cash equivalents	(53,694)		(405,148)
Cash and cash equivalents at beginning of period	358,972		705,618
Cash and cash equivalents at end of period	$	305,278	$	300,470

Interest paid	$	151,130	$	21,123
Income taxes paid	483		1,204
Significant non-cash transactions:

Real estate acquired in settlement of loans	3,243		665
Decrease in GNMA repurchase obligation	(24,569)		(17,134)
Recognition of operating right-of-use assets	16,225		14,009
Recognition of operating lease liabilities	16,187		14,213
Total assets acquired in BTH merger	—		1,840,340
Total liabilities assumed in BTH merger	—		1,635,196
Common stock issued in BTH merger as consideration	—		292,657

The accompanying condensed notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Note 1 — Significant Accounting Policies

Nature of Operations. Origin Bancorp, Inc. (“Company”) is a financial holding company headquartered in Ruston, Louisiana. The Company’s wholly-owned bank subsidiary, Origin Bank (“Bank”), was founded in 1912 in Choudrant, Louisiana. Deeply rooted in Origin’s history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities it serves. Origin provides a broad range of financial services and currently operates 60 banking centers located in Dallas/Fort Worth, East Texas, Houston, North Louisiana and Mississippi. The Company principally operates in one business segment, community banking.

Basis of Presentation. The consolidated financial statements in this quarterly report on Form 10-Q include the accounts of the Company and all other entities in which Origin Bancorp, Inc. has a controlling financial interest, including the Bank and Davison Insurance Agency, LLC, doing business as Lincoln Agency, LLC, Lincoln Agency Transportation Insurance, Pulley-White Insurance Agency, Reeves, Coon and Funderburg, Simoneaux & Wallace Agency and Thomas & Farr Agency. All significant intercompany balances and transactions have been eliminated in consolidation. The Company’s accounting and financial reporting policies conform, in all material respects, to generally accepted accounting principles in the United States (“U.S. GAAP”) and to general practices within the financial services industry. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these consolidated financial statements were issued.

The consolidated financial statements in this quarterly report on Form 10-Q have not been audited by an independent registered public accounting firm, excluding the figures as of December 31, 2022, but in the opinion of management, reflect all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the Company’s financial position and results of operations for the periods presented. These consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP and with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2022, included in the Company’s annual report on Form 10-K (“2022 Form 10-K”) filed with the SEC. Operating results for the interim periods disclosed herein are not necessarily indicative of results that may be expected for a full year. Certain prior period amounts have been reclassified to conform to the current year financial statement presentations. These reclassifications did not impact previously reported net income or comprehensive income (loss).

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions based on available information that affect the amounts reported in the financial statements and disclosures provided, including the accompanying notes, and actual results could differ. Material estimates that are particularly susceptible to change include the allowance for credit losses for loans, off-balance sheet commitments and available for sale securities; fair value measurements of assets and liabilities; and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the Company’s consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual results could differ from those estimates.

Allowance for Credit Losses. Accounting Standards Update (“ASU”) No. 2022-02 eliminated the accounting guidance for troubled debt restructurings (“TDRs”) and enhanced disclosure requirements for certain loan modifications. The Company may provide modifications to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reductions, other-than-insignificant payment delays, or term extensions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company may provide multiple types of concessions on one loan. The Company will evaluate whether the modification represents a new loan or a continuation of an existing loan. The Company assesses all loan modifications to determine whether they were made to borrowers experiencing financial difficulty.

Reclassifications. Certain amounts previously reported have been reclassified to conform to the current presentation. Such reclassifications had no effect on prior year net income or stockholders’ equity.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Effect of Recently Adopted Accounting Standards

ASU No. 2021-06, Presentation of Financial Statements (Topic 205), Financial Services —Depository and Lending (Topic 942), and Financial Services — Investment Companies (Topic 946) —Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants amends the Accounting Standards Codification (“ASC”) in order to codify to the new SEC releases 33-10786 and 33-10835 (the “Releases”). The Releases clearly define whether an acquired or disposed business subsidiary is significant; update, expand and eliminate certain disclosures; eliminate overlap with certain SEC and U.S. GAAP rules; and add a new subpart of Regulation S-K. The ASU is effective upon issuance; however, the SEC release on which the ASU is based is effective for registrants with the first fiscal year ending after December 15, 2021, while Guide 3 was rescinded effective January 1, 2023. Implementation of this ASU did not materially impact the Company’s financial statement disclosures.

ASU No. 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this Update affect accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures.

ASU No. 2022-01, Derivatives and Hedging (Topic 815) — Fair Value Hedging - Portfolio Layer Method. The amendments in this Update clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers. Additionally, this Update allows entities to elect to apply the portfolio layer method of hedge accounting in accordance with Topic 815. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures.

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326) — Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. For public business entities, the amendments in this Update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company’s financial statements or disclosures.

ASU No. 2022-06, Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 — The amendments in this Update provide temporary relief during the transition period in complying with Update No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The Board included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. At the time that Update 2020-04 was issued, the UK Financial Conduct Authority (FCA) had established its intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December 31, 2022 - 12 months after the expected cessation date of all currencies and tenors of LIBOR. In March 2021, the FCA announced that the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset date of Topic 848.

Because the relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The ASU is effective immediately. Implementation of this ASU did not materially impact the Company's financial statements or disclosures.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements