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obnk-20240331

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 March 31, 2024

☐ 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: 31,014,945 shares of Common Stock, par value $5.00 per share, were issued and outstanding at April 30, 2024.

ORIGIN BANCORP, INC.

FORM 10-Q

MARCH 31, 2024

INDEX


			Page
PART I - FINANCIAL INFORMATION			7

Item 1. Financial Statements (Unaudited):			7

Consolidated Balance Sheets at March 31, 2024 (unaudited), and December 31, 2023			7
Consolidated Statements of Income for the three months ended March 31, 2024 and 2023, (unaudited)			8
Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023, (unaudited)			9
Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023, (unaudited)			10
Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023, (unaudited)			11

Condensed Notes to Consolidated Financial Statements			13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			47

Item 3. Quantitative and Qualitative Disclosures about Market Risk			65

Item 4. Controls and Procedures			67

Part II - OTHER INFORMATION			68

Item 1. Legal Proceedings			68

Item 1A. Risk Factors			68

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities			68

Item 3. Defaults Upon Senior Securities			68

Item 4. Mine Safety Disclosures			68

Item 5. Other Information			68

Item 6. Exhibits			69

SIGNATURE PAGE			70

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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 and increased regulatory scrutiny), 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 and levels of deposit withdrawals and loan repayments);

•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;

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•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;

•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;

•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 the potential to reduce anticipated benefits from such mergers or combinations; 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)


	March 31, 2024		December 31, 2023
Assets	(Unaudited)
Cash and due from banks	$	98,147	$	127,278
Interest-bearing deposits in banks	193,365		153,163

Total cash and cash equivalents	291,512		280,441

Securities:
Available for sale	1,190,922		1,253,631
Held to maturity, net allowance for credit losses of $24 and $63 at March 31, 2024, and December 31, 2023, respectively (fair value of $10,956 and $10,848 at March 31, 2024, and December 31, 2023, respectively)	11,651		11,615
Securities carried at fair value through income	6,755		6,808
Total securities	1,209,328		1,272,054
Non-marketable equity securities held in other financial institutions	53,870		55,190
Loans held for sale at fair value	14,975		16,852
Loans, net of allowance for credit losses of $98,375 and $96,868 at March 31, 2024, and December 31, 2023, respectively	7,801,652		7,564,076
Premises and equipment, net	120,931		118,978
Mortgage servicing rights	—		15,637
Cash surrender value of bank-owned life insurance	40,134		39,905
Goodwill	128,679		128,679
Other intangible assets, net	43,314		45,452
Accrued interest receivable and other assets	187,984		185,320
Total assets	$	9,892,379	$	9,722,584
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits	$	1,887,066	$	1,919,638
Interest-bearing deposits	4,990,632		4,918,597
Time deposits	1,627,766		1,412,890
Total deposits	8,505,464		8,251,125

Federal Home Loan Bank (“FHLB”) advances, repurchase obligations and other borrowings	13,158		83,598
Subordinated indebtedness, net	160,684		194,279
Accrued expenses and other liabilities	134,220		130,677
Total liabilities	8,813,526		8,659,679
Commitments and contingencies - See Note 12 — Commitments and Contingencies	—		—
Stockholders’ equity:

Common stock ($5.00 par value; 50,000,000 shares authorized; 31,011,304 and 30,986,109 shares issued at March 31, 2024, and December 31, 2023, respectively)	155,057		154,931
Additional paid‑in capital	530,380		528,578
Retained earnings	518,325		500,419
Accumulated other comprehensive loss	(124,909)		(121,023)
Total stockholders’ equity	1,078,853		1,062,905
Total liabilities and stockholders’ equity	$	9,892,379	$	9,722,584

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 March 31,
	2024		2023
Interest and dividend income
Interest and fees on loans	$	127,186	$	106,496
Investment securities-taxable	6,849		8,161
Investment securities-nontaxable	910		1,410
Interest and dividend income on assets held in other financial institutions	3,756		4,074
Total interest and dividend income	138,701		120,141
Interest expense
Interest-bearing deposits	62,842		34,557
FHLB advances and other borrowings	518		5,880
Subordinated indebtedness	2,018		2,557
Total interest expense	65,378		42,994
Net interest income	73,323		77,147
Provision for credit losses	3,012		6,197
Net interest income after provision for credit losses	70,311		70,950
Noninterest income
Insurance commission and fee income	7,725		7,011
Service charges and fees	4,688		4,571
Other fee income	2,247		1,974
Mortgage banking revenue	2,398		1,781
Swap fee income	57		384
(Loss) gain on sales of securities, net	(403)		144

Other income	543		519
Total noninterest income	17,255		16,384
Noninterest expense
Salaries and employee benefits	35,818		33,731
Occupancy and equipment, net	6,645		6,503
Data processing	3,145		2,916
Office and operations	2,502		2,303
Intangible asset amortization	2,137		2,553
Regulatory assessments	1,734		951
Advertising and marketing	1,444		1,456
Professional services	1,231		1,525
Loan-related expense	905		1,465
Electronic banking	1,239		1,009
Franchise tax expense	477		975
Other expense	1,430		1,373
Total noninterest expense	58,707		56,760
Income before income tax expense	28,859		30,574
Income tax expense	6,227		6,272




Net income	$	22,632	$	24,302
Basic earnings per common share	$	0.73	$	0.79
Diluted earnings per common share	0.73		0.79

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

(Unaudited)

(Dollars in thousands)


	Three Months Ended March 31,
	2024		2023
Net income	$	22,632	$	24,302
Other comprehensive income (loss)
Securities available for sale and transferred securities:
Net unrealized holding (loss) gain arising during the period	(5,415)		27,400
Reclassification adjustment for net loss (gain) included in net income	403		(144)
Change in the net unrealized (loss) gain on available for sale investment securities, before tax	(5,012)		27,256
Net gain realized as a yield adjustment in interest on transferred investment securities	(3)		(3)
Change in the net unrealized (loss) gain on investment securities, before tax	(5,015)		27,253
Income tax (benefit) expense related to net unrealized gain (loss) arising during the period	(1,053)		5,724
Change in the net unrealized (loss) gain on investment securities, net of tax	(3,962)		21,529

Cash flow hedges:
Net unrealized gain arising during the period	204		643
Reclassification adjustment for net gain included in net income	(108)		(814)
Change in the net unrealized gain (loss) on cash flow hedges, before tax	96		(171)
Income tax expense (benefit) related to net unrealized gain (loss) on cash flow hedges	20		(36)
Change in net unrealized net gain (loss) on cash flow hedges, net of tax	76		(135)

Other comprehensive (loss) income, net of tax	(3,886)		21,394
Comprehensive income	$	18,746	$	45,696

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 (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 issued, 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





















	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance at January 1, 2024	30,986,109	$	154,931	$	528,578	$	500,419	$	(121,023)	$	1,062,905
Net income	—	—		—		22,632		—		22,632
Other comprehensive loss, net of tax	—	—		—		—		(3,886)		(3,886)
Stock-based compensation expense	—	—		2,079		—		—		2,079
Stock based compensation shares issued, net of shares withheld	20,108	101		(286)		—		—		(185)
Exercise of stock options, net of shares withheld	5,087	25		9		—		—		34
Dividends declared - common stock ($0.15 per share)	—	—		—		(4,726)		—		(4,726)

Balance at March 31, 2024	31,011,304	$	155,057	$	530,380	$	518,325	$	(124,909)	$	1,078,853

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)


	Three Months Ended March 31,
Cash flows from operating activities:	2024		2023
Net income	$	22,632	$	24,302
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	3,012		6,197
Depreciation and amortization	4,075		4,529
Net amortization on securities	1,218		1,744
Accretion of net premium/discount on purchased loans	(6)		(1,617)
Amortization of investments in tax credit funds	415		453
Loss (gain) on sale of securities, net	403		(144)
Deferred income tax (benefit) expense	(2,583)		12,310
Stock-based compensation expense	2,079		1,391
Originations of mortgage loans held for sale	(44,392)		(43,163)
Proceeds from mortgage loans held for sale	35,887		29,905
Gain on mortgage loans held for sale including, for the three months ended March 31, 2023, origination of mortgage servicing rights	(964)		(758)
Mortgage servicing rights valuation adjustment	(450)		906
Gain on sale of MSR	(410)		—
Net gain on disposals of premises and equipment	(2)		(63)
Increase in the cash surrender value of life insurance	(229)		(213)

Net losses on sales and write-downs of other real estate owned	21		—

Net change in operating leases	35		(80)
Decrease (increase) in other assets	4,835		(4,940)
Increase (decrease) in other liabilities	1,557		(3,180)
Net cash provided by operating activities	27,133		27,579
Cash flows from investing activities:

Purchases of securities available for sale	(7,194)		(751)
Maturities and pay downs of securities available for sale	42,046		36,610
Proceeds from sales and calls of securities available for sale	21,224		39,195



Redemption of non-marketable equity securities held in other financial institutions	5,556		—
Purchase of non-marketable equity securities held in other financial institutions	(4,016)		(9,306)
Originations of mortgage warehouse loans	(1,842,251)		(1,198,573)
Proceeds from pay-offs of mortgage warehouse loans	1,771,222		1,145,909
Net increase in loans, excluding mortgage warehouse and loans held for sale	(160,209)		(224,124)
Proceeds from sale of MSR	15,885		—

Return of capital and other distributions from limited partnership investments	275		802

Capital calls on limited partnership investments	(388)		(189)
Purchase of low-income housing tax credit investments	—		(411)
Purchases of premises and equipment	(3,906)		(5,790)
Proceeds from sales of premises and equipment	18		—
Proceeds from sales of other real estate owned	54		—

Net cash used in investing activities	(161,684)		(216,628)

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)


	Three Months Ended March 31,
Cash flows from financing activities:	2024		2023
Net increase in deposits	$	254,339	$	398,608

Repayments on long-term FHLB advances	(68)		(65)
Proceeds from short-term FHLB advances	670,000		3,561,901
Repayments on short-term FHLB advances	(740,000)		(3,260,000)
Redemption of subordinated debentures	(33,675)		—

Repayments on other short-term borrowings	—		(20,000)

Net decrease in securities sold under agreements to repurchase	(372)		(20,995)

Dividends paid	(4,670)		(4,623)
Cash received from exercise of stock options	68		362


Net cash provided by financing activities	145,622		655,188
Net increase in cash and cash equivalents	11,071		466,139
Cash and cash equivalents at beginning of period	280,441		358,972
Cash and cash equivalents at end of period	$	291,512	$	825,111

Interest paid	$	61,707	$	40,356
Income taxes (refund) paid	(2,069)		4
Significant non-cash transactions:


Decrease in Government National Mortgage Association (“GNMA”) repurchase obligation	—		(24,569)
Recognition of operating right-of-use assets	491		7,347
Recognition of operating lease liabilities	500		7,306

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” or ”Origin”) 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 has over 60 locations from Dallas/Fort Worth, East Texas and Houston, across North Louisiana and into Mississippi. Locations in South Alabama and the Florida panhandle are planned for 2024. 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 Forth Insurance, LLC. 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, 2023, 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, 2023, included in the Company’s annual report on Form 10-K (“2023 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.

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.

Investments in Tax Credit Entities. As part of its Community Reinvestment Act responsibilities and due to their favorable economic characteristics, the Company invests in tax credit-motivated projects primarily in the markets it serves. These projects are directed at tax credits issued under Low-Income Housing Tax Credits (“LIHTC”). The Company generates returns on tax credit motivated projects through the receipt of federal, and if applicable, state tax credits. The federal tax credits are recorded as an offset to the income tax provision in the year that they are earned under federal income tax law over 10 to 15 years beginning in the year in which rental activity commences. These credits, if not used in the tax return for the year of origination, can be carried forward for 20 years.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The Company invests in a tax credit entity, usually an LLC, which owns the real estate. The Company receives a nonvoting interest in the entity that must be retained during the compliance period for the credits (15 years for Low-Income Housing Tax Credit programs). Control of the tax credit entity rests in the 0.1% interest general partner, who has the power and authority to make decisions that impact economic performance of the project and is required to oversee and manage the project. Due to the lack of any voting, economic, or managerial control, and due to the contractual reduction in the investment, the Company accounts for its investment by amortizing the investment, beginning at the issuance of the certificate of occupancy of the project, over the compliance period, as management believes any potential residual value in the real estate will have limited value. Amortization is included as a component of income tax expense and for the three months ended March 31, 2024 and 2023, was $415,000 and $453,000, respectively. The income tax credits and other income tax benefits recognized for the three months ended March 31, 2024 and 2023, was $504,000 and $569,000, respectively, and was included as a component of income tax expense on the Consolidated Statements of Income.

The Company has the risk of credit recapture if the projects do not maintain compliance during the compliance period. No such events have occurred to date. At March 31, 2024 and 2023, the Company had investments in tax credit entities of $7.2 million and $9.0 million, respectively, which are included in accrued interest receivable and other assets in the accompanying Consolidated Balance Sheets.

Effect of Recently Adopted Accounting Standards

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.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

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.

ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method — The amendments in this Update allow entities to elect to account for equity investments made primarily for the purpose of receiving income tax credits using the proportional amortization method, regardless of the tax credit program through which the investment earns income tax credits, if certain conditions are met. The amendments in this Update also eliminate certain low income housing tax credits (“LIHTC”)-specific guidance to align the accounting more closely for LIHTCs with the accounting for other equity investments in tax credit structures and require that the delayed equity contribution guidance apply only to tax equity investments accounted for using the proportional amortization method. The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Implementation of this ASU did not materially impact the Company's financial statements or disclosures.

Effect of Newly Issued But Not Yet Effective Accounting Standards

ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures — The amendments in this Update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this Update:

1.Require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”).

2.Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss.

3.Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods.

4.Clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements. In other words, in addition to the measure that is most consistent with the measurement principles under generally accepted accounting principles (GAAP), a public entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources.

5.Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

6.Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this Update and all existing segment disclosures in Topic 280.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective application to all periods presented in the financial statements is required. The Company is evaluating the impact of this ASU on its consolidated financial statements and disclosures.

ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures — The amendments in this Update, on an annual basis, require that public business entities (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Specifically, public business entities are required to disclose a tabular reconciliation, using both percentages and reporting currency amounts, for specific listed categories.

The ASU is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The Company is evaluating the impact of this ASU on its consolidated financial statements and disclosures.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Note 2 — Earnings Per Share

Basic and diluted earnings per common share are calculated using the treasury method. Under the treasury method, basic earnings per share is calculated as net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares issuable under the Company’s stock and incentive compensation plans. Information regarding the Company’s basic and diluted earnings per common share is presented in the following table:


(Dollars in thousands, except per share amounts)	Three Months Ended March 31,
Numerator:	2024		2023
Net income	$	22,632	$	24,302



Denominator:





Weighted average common shares outstanding	30,981,333		30,742,902
Dilutive effect of stock-based awards	97,577		139,254
Weighted average diluted common shares outstanding	31,078,910		30,882,156

Basic earnings per common share	$	0.73	$	0.79
Diluted earnings per common share	0.73		0.79

There were 429,589 and 220,980 shares of anti-dilutive stock-based awards excluded from the calculation of earnings per share for the three months ended March 31, 2024 and 2023, respectively, primarily due to the stock price of the stock awards exceeding the average market price of the Company’s stock during the respective periods.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Note 3 — Securities

The following table is a summary of the amortized cost and estimated fair value, including the allowance for credit losses and gross unrealized gains and losses, of available for sale, held to maturity and securities carried at fair value through income for the dates indicated:


(Dollars in thousands) March 31, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses		Net Carrying Amount
Available for sale:
State and municipal securities	$	320,999	$	213	$	(43,615)	$	277,597	$	—	$	277,597
Corporate bonds	91,251		166		(8,170)		83,247		—		83,247
U.S. treasury and government agency securities	67,172		2		(4,736)		62,438		—		62,438
Commercial mortgage-backed securities	104,150		—		(11,410)		92,740		—		92,740
Residential mortgage-backed securities	552,647		—		(66,024)		486,623		—		486,623
Commercial collateralized mortgage obligations	45,874		—		(4,448)		41,426		—		41,426
Residential collateralized mortgage obligations	147,310		—		(20,977)		126,333		—		126,333
Asset-backed securities	20,576		23		(81)		20,518		—		20,518
Total	$	1,349,979	$	404	$	(159,461)	$	1,190,922	$	—	$	1,190,922
Held to maturity:
State and municipal securities	$	11,675	$	—	$	(719)	$	10,956	$	(24)	$	11,651
Securities carried at fair value through income:
State and municipal securities(1)	$	6,815	$	—	$	—	$	6,755	$	—	$	6,755


December 31, 2023
Available for sale:
State and municipal securities	$	323,356	$	210	$	(41,440)	$	282,126	$	—	$	282,126
Corporate bonds	92,244		80		(8,689)		83,635		—		83,635
U.S. treasury and government agency securities	84,377		3		(4,740)		79,640		—		79,640
Commercial mortgage-backed securities	104,459		—		(11,063)		93,396		—		93,396
Residential mortgage-backed securities	569,622		—		(63,120)		506,502		—		506,502
Commercial collateralized mortgage obligations	39,386		—		(4,203)		35,183		—		35,183
Residential collateralized mortgage obligations	150,710		—		(20,566)		130,144		—		130,144
Asset-backed securities	43,521		4		(520)		43,005		—		43,005
Total	$	1,407,675	$	297	$	(154,341)	$	1,253,631	$	—	$	1,253,631
Held to maturity:
State and municipal securities	$	11,678	$	—	$	(830)	$	10,848	$	(63)	$	11,615
Securities carried at fair value through income:
State and municipal securities(1)	$	6,815	$	—	$	—	$	6,808	$	—	$	6,808

________________________

(1)Securities carried at fair value through income have no unrealized gains or losses at the consolidated balance sheet dates as all changes in value have been recognized in the consolidated statements of income. See Note 5 — Fair Value of Financial Instruments for more information.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Securities with unrealized losses at March 31, 2024, and December 31, 2023, aggregated by investment category and those individual securities that have been in a continuous unrealized loss position for less than 12 months, and for 12 months or more, were as follows.


	Less than 12 Months				12 Months or More				Total
(Dollars in thousands) March 31, 2024	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available for sale:
State and municipal securities	$	25,235	$	(258)	$	246,037	$	(43,357)	$	271,272	$	(43,615)
Corporate bonds	800		(200)		73,213		(7,970)		74,013		(8,170)
U.S. treasury and government agency securities	—		—		58,922		(4,736)		58,922		(4,736)
Commercial mortgage-backed securities	—		—		92,740		(11,410)		92,740		(11,410)
Residential mortgage-backed securities	—		—		486,623		(66,024)		486,623		(66,024)
Commercial collateralized mortgage obligations	6,627		(64)		34,799		(4,384)		41,426		(4,448)
Residential collateralized mortgage obligations	—		—		126,333		(20,977)		126,333		(20,977)
Asset-backed securities	3,841		(2)		12,469		(79)		16,310		(81)
Total	$	36,503	$	(524)	$	1,131,136	$	(158,937)	$	1,167,639	$	(159,461)
Held to maturity:
State and municipal securities	$	4,833	$	(328)	$	6,123	$	(391)	$	10,956	$	(719)

December 31, 2023
Available for sale:
State and municipal securities	$	27,106	$	(266)	$	246,442	$	(41,174)	$	273,548	$	(41,440)
Corporate bonds	4,254		(53)		74,566		(8,636)		78,820		(8,689)
U.S. treasury and government agency securities	—		—		77,340		(4,740)		77,340		(4,740)
Commercial mortgage-backed securities	—		—		93,396		(11,063)		93,396		(11,063)
Residential mortgage-backed securities	60		(5)		506,442		(63,115)		506,502		(63,120)
Commercial collateralized mortgage obligations	—		—		35,183		(4,203)		35,183		(4,203)
Residential collateralized mortgage obligations	—		—		130,144		(20,566)		130,144		(20,566)
Asset-backed securities	7,350		(52)		31,618		(468)		38,968		(520)
Total	$	38,770	$	(376)	$	1,195,131	$	(153,965)	$	1,233,901	$	(154,341)
Held to maturity:
State and municipal securities	$	4,717	$	(447)	$	6,131	$	(383)	$	10,848	$	(830)

At March 31, 2024, the Company had 595 individual securities that were in an unrealized loss position. Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than the cost, and (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Management does not currently intend to sell any securities in an unrealized loss position and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, at March 31, 2024, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The following table presents the activity in the allowance for credit losses for held-to-maturity securities.


(Dollars in thousands)	Municipal Securities
Allowance for credit losses:	2024

Balance at January 1, 2024	$	63
Provision recovery for credit loss for held to maturity securities	(39)
Balance at March 31, 2024	$	24
Balance at January 1, 2023	$	899
Provision expense for credit loss for held to maturity securities	82
Balance at March 31, 2023	$	981

Accrued interest of $5.6 million and $7.5 million was not included in the calculation of the allowance or the amortized cost basis of the securities at March 31, 2024 or 2023, respectively. There were no past due or nonaccrual available for sale or held to maturity securities at March 31, 2024 or December 31, 2023.

Proceeds from sales and calls, and related gross gains and losses of securities available for sale, are shown below.


	Three Months Ended March 31,
(Dollars in thousands)	2024		2023
Proceeds from sales/calls	$	21,224	$	39,195
Gross realized gains	—		596
Gross realized losses	(403)		(452)

The following table presents the amortized cost and fair value of securities available for sale and held to maturity at March 31, 2024, grouped by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which do not have contractual payments due at a single maturity date, are shown separately. Actual maturities for mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities will differ from contractual maturities as a result of prepayments made on the underlying loans.


(Dollars in thousands)	Held to Maturity				Available for Sale
March 31, 2024	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	48,761	$	48,562
Due after one year through five years	—		—		86,572		79,665
Due after five years through ten years	5,161		4,833		177,058		156,673
Due after ten years	6,514		6,123		167,031