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Origin Bancorp, Inc. Reports Earnings for Fourth Quarter And 2019 Full Year

RUSTON, La., Jan. 22, 2020 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $12.8 million for the quarter ended December 31, 2019. This represents a decrease of $1.8 million from the quarter ended September 30, 2019, and a decrease of $351,000 from the quarter ended December 31, 2018. Diluted earnings per share for the quarter ended December 31, 2019, was $0.55, down $0.07 from the linked quarter and flat compared to the quarter ended December 31, 2018.

Net income for the year ended December 31, 2019, was $53.9 million, representing an increase of $2.3 million compared to the year ended December 31, 2018, reflecting a year-over-year increase in net interest income, offset by higher provision and noninterest expense. Diluted earnings per share for the year ended December 31, 2019, was $2.28, representing an increase of $0.08 from diluted earnings per share of $2.20 for the year ended December 31, 2018.

"We are pleased with what we have accomplished in 2019, and are proud of how our team was able to adapt to a changing rate environment, grow deposits and loans in a meaningful way and manage our company to build long-term value," said Drake Mills, Chairman, President and CEO of Origin Bancorp, Inc. "We remain committed to the successful execution of our strategy by driving deposit and loan growth, leveraging operational efficiencies and delivering shareholder value in 2020."

Financial Highlights

  • Diluted earnings per share for the quarter ended December 31, 2019, was $0.55, and $2.28 for the year ended December 31, 2019.

  • Net interest income was $44.1 million for the quarter ended December 31, 2019, compared to $44.6 million for linked quarter and $42.1 million for the quarter ended December 31, 2018. The net interest margin, fully tax equivalent, was 3.58% for the quarter ended December 31, 2019, compared to 3.69% for the linked quarter and 3.82% for the quarter ended December 31, 2018.

  • Tangible book value per common share was $24.18 at December 31, 2019, an 11.0% increase from $21.79 at December 31, 2018.

  • Total loans held for investment were $4.14 billion, a decrease of $45.3 million, or 1.1%, from September 30, 2019, and an increase of $354.1 million, or 9.3%, from December 31, 2018.

  • Total deposits decreased by $55.7 million, or 1.3%, from September 30, 2019, and increased by $445.5 million, or 11.8%, from December 31, 2018. Total deposits without brokered deposits increased $122.1 million, or 3.1%, from September 30, 2019, and increased $625.3 million, or 18.1%, from December 31, 2018.

  • For the seventh consecutive year Origin Bank was named one of the best banks to work for in the U.S. by American Banker and Best Companies Group, which identifies U.S. banks for outstanding employee satisfaction.

Results of Operations for the Three Months Ended December 31, 2019

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended December 31, 2019, was $44.1 million, reflecting a decrease of $527,000, or 1.2%, compared to the linked quarter. The decrease was primarily driven by a decline in yields earned on loans held for investment, and was partially offset by a decrease in rates paid on interest-bearing liabilities and an increase in the overall average balance of loans held for investment. The aggregate 75 basis point decrease in the Federal Reserve target fed funds rate during the second half of 2019 have impacted the yields earned on our commercial and industrial and residential real estate loan portfolios.

Interest-bearing deposit expense decreased to $11.1 million during the current quarter, compared to $11.6 million for the quarter ended September 30, 2019. The $567,000 decrease in interest-bearing deposit expense was primarily driven by falling interest rates and was partially offset by an increase in the average balance of savings and interest-bearing deposit accounts. Average savings and interest-bearing deposit transaction accounts increased by $176.9 million, or 8.5% and $315.9 million, or 16.3%, compared to the linked quarter and quarter ended December 31, 2018, respectively. Average noninterest-bearing deposits increased by $74.0 million, or 6.9%, compared to the linked quarter and by $149.3 million, or 14.9%, compared to December 31, 2018.

The fully tax-equivalent net interest margin ("NIM") was 3.58% for the fourth quarter of 2019, an 11 basis point decrease from the third quarter of 2019 and a 24 basis point decrease from the fourth quarter of 2018. The decline in the NIM was primarily caused by rate partially offset by a change in the mix of earning asset types. The rate paid on total interest-bearing liabilities for the quarter ended December 31, 2019, was 1.46%, representing a decrease of 19 basis points and an increase of seven basis points compared to the linked quarter and the quarter ended December 31, 2018, respectively. The yield earned on interest-earning assets decreased 25 basis points and 19 basis points compared to the linked quarter and the quarter ended December 31, 2018, respectively. The margin compression the Company experienced on a linked quarter basis was primarily caused by declining loan yields driven by interest rate cuts by the Federal Reserve in the second half of 2019 that were more fully reflected in loan yields during the fourth quarter of 2019 than during the third quarter of 2019, causing a linked quarter decline in NIM.

Noninterest Income

Noninterest income for the quarter ended December 31, 2019, was $10.8 million, a decrease of $2.1 million, or 16.0%, from the linked quarter. The decrease from the linked quarter was primarily driven by decreases of $1.2 million and $775,000 in swap fee income and insurance commission and fee income, respectively.

Lower transaction volume during the current quarter drove the decline in swap fee income compared to the linked quarter. The decrease in insurance commission and fee income was caused by the seasonality of policy renewals.

Noninterest Expense

Noninterest expense for the quarter ended December 31, 2019, was $36.5 million, an increase of $1.5 million, or 4.2%, compared to the linked quarter. The increase from the linked quarter was largely driven by increases of $1.1 million and $551,000 in regulatory assessments and salaries and employee benefits, respectively. During the linked quarter the Company received a FDIC assessment credit of approximately $1.0 million from the FDIC insurance fund, without the receipt of a comparable credit in the current quarter. The increase in salaries and employee benefits expense over the linked quarter was largely driven by a $755,000 increase in self-insured medical expense, partially offset by a decrease in incentive compensation expense.

Financial Condition

Loans

Total loans held for investment at December 31, 2019, were $4.14 billion, a decrease of $45.3 million, or 1.1%, compared to $4.19 billion at September 30, 2019, and an increase of $354.1 million, or 9.3%, compared to $3.79 billion at December 31, 2018. The decrease in loans held for investment when compared to September 30, 2019, was primarily reflected in Mortgage Warehouse Lines of Credit and Commercial and Industrial loans, which decreased $30.3 million and $24.1 million, respectively. The decrease in Mortgage Warehouse Lines of Credit is primarily due to the seasonality of these loans.

For the quarter ended December 31, 2019, average loans held for investment were $4.17 billion, an increase of $100.6 million, or 2.5%, from $4.07 billion for the linked quarter.

Deposits

Total deposits at December 31, 2019, were $4.23 billion, a decrease of $55.7 million, or 1.3%, compared to $4.28 billion at September 30, 2019, and an increase of $445.5 million, or 11.8%, compared to $3.78 billion, at December 31, 2018. Brokered deposits contributed a decrease of $177.8 million when compared to the linked quarter, and a decrease of $179.8 million when compared to December 31, 2018. The decreases were partially offset by increases in money market deposits of $126.7 million when compared to the linked quarter and $461.1 million when compared to December 31, 2018. Noninterest-bearing deposits decreased $77.0 million, or 6.7%, compared to the linked quarter and increased $126.7 million, or 13.3%, compared to the quarter ended December 31, 2018.

Average total deposits for the quarter ended December 31, 2019, increased by $225.3 million, or 5.7%, over the linked quarter, led by increases of $212.1 million in average business deposits.

For the quarter ended December 31, 2019, average noninterest-bearing deposits as a percentage of total average deposits was 27.4%, compared to 27.1% for the quarter ended September 30, 2019, and 26.9% for the quarter ended December 31, 2018.

Borrowings

Average borrowings for the quarter ended December 31, 2019, decreased by $133.9 million, or 28.1%, compared to the quarter ended September 30, 2019, and decreased by $16.8 million, or 4.7% over the quarter ended December 31, 2018. The decrease in average borrowings in the fourth quarter of 2019 compared to the linked quarter was due to the calling of the $100.0 million long-term Federal Home Loan Bank advance in the fourth quarter.

Stockholders' Equity

Stockholders' equity was $599.3 million at December 31, 2019, an increase of $10.9 million, or 1.9%, compared to $588.4 million at September 30, 2019, and an increase of $49.5 million, or 9.0%, compared to $549.8 million at December 31, 2018.

Credit Quality

The Company recorded provision expense of $2.4 million for the quarter ended December 31, 2019, compared to provision expense of $4.2 million for the linked quarter and $1.7 million for the quarter ended December 31, 2018. The decrease in provision expense from the linked quarter was primarily driven by a decrease in charge-offs and, to a lesser extent, a decrease in the general reserve due to the decrease in the loan portfolio. During the quarter ended December 31, 2019, the Company had net charge-offs of $2.8 million compared to net charge-offs of $3.0 million for the linked quarter.

The Company's net charge-off ratio for the year ended December 31, 2019, is 0.15%, compared to 0.13% for the year ended December 31, 2018. Total nonperforming loans held for investment were $31.1 million at December 31, 2019, compared to $31.5 million and $31.9 million at September 30, 2019, and December 31, 2018, respectively.

Allowance for loan losses as a percentage of total loans held for investment was 0.91% at December 31, 2019, compared to 0.89% and 0.90% at September 30, 2019, and December 31, 2018, respectively. Allowance for loan losses as a percentage of nonperforming loans held for investment was 120.46% at December 31, 2019, compared to 117.97% and 107.37% at September 30, 2019, and December 31, 2018, respectively.

Total past due loans held for investment, defined as loans 30 days past due or more, as a percentage of loans held for investment, was 0.72% at both December 31, 2019, and September 30, 2019, and 0.90% at December 31, 2018.

Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses at the beginning of the first quarter of 2020 due to the adoption of Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, increasing the allowance for credit losses by approximately $1.1 million. The Company does not expect its held-to-maturity or available for sale securities to be materially affected by the adoption of this ASU due to the nature of the portfolios. Our adjustment to the allowance for credit losses at the transition date may vary from our estimate due to refinements in the loss estimation models or factors.

Conference Call

Origin will hold a conference call to discuss its fourth quarter 2019 results on Thursday, January 23, 2020, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (844) 695-5516; International: (412) 902-6750 and request to be joined into the Origin Bancorp, Inc. (OBNK) call. A simultaneous audio-only webcast may be accessed via Origin's website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link or directly by visiting https://services.choruscall.com/links/obnk200123.html.

If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Origin's website at www.origin.bank, under Investor Relations, News & Events, Events & Presentations.

About Origin Bancorp, Inc.

Origin is a financial holding company for Origin Bank, headquartered in Ruston, Louisiana, which provides a broad range of financial services to small and medium-sized businesses, municipalities, high net-worth individuals and retail clients from 43 banking centers, located from Dallas/Fort Worth, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. For more information, www.origin.bank.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin's future financial performance, business and growth strategy, projected plans and objectives, including any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including expectations regarding interest rate cuts by the Federal Reserve and the impact of those cuts on Origin's results of operations, and expectations regarding the Company's liquidity, including in connection with advances obtained from the FHLB, which are all subject to change and may be inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such changes may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions and current expectations, estimates and projections about Origin and its subsidiaries, any of which may change over time and some of which may be beyond Origin's control. Statements preceded by, followed by or that otherwise include the words "assuming," "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin's future results and cause actual results to differ materially from those expressed in the forward-looking statements include: deterioration of Origin's asset quality; changes in real estate values and liquidity in Origin's primary market areas; the financial health of Origin's commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin's loans; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important deposit customer relationships; volatility and direction of market interest rates, which may increase funding costs or reduce interest-earning asset yields thus reducing margin; increased competition in the financial services industry, particularly from regional and national institutions; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated, including the effects of declines in housing markets; an increase in unemployment levels and slowdowns in economic growth; Origin's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin's loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of Origin's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; Origin's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin's non-GAAP liquidity measurements and its underlying assumptions or estimates; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; and the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") and any updates to those sections set forth in Origin's subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin's underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin's behalf may issue. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Contact:
Chris Reigelman, Origin Bancorp, Inc.
318-497-3177 / chris@origin.bank

 
Origin Bancorp, Inc.
Selected Financial Data
 
  At and for the three months ended
  December 31,
 2019
  September 30,
 2019
  June 30,
2019
  March 31,
2019
  December 31,
 2018
                   
Income statement and share amounts (Dollars in thousands, except per share amounts, unaudited)
Net interest income $ 44,095     $ 44,622     $ 42,969     $ 42,026     $ 42,061  
Provision for credit losses 2,377     4,201     1,985     1,005     1,723  
Noninterest income 10,818     12,880     11,176     11,604     10,588  
Noninterest expense 36,534     35,064     37,095     35,381     35,023  
Income before income tax expense 16,002     18,237     15,065     17,244     15,903  
Income tax expense 3,175     3,620     2,782     3,089     2,725  
Net income $ 12,827     $ 14,617     $ 12,283     $ 14,155     $ 13,178  
Basic earnings per common share $ 0.55     $ 0.62     $ 0.52     $ 0.60     $ 0.56  
Diluted earnings per common share 0.55     0.62     0.52     0.60     0.55  
Dividends declared per common share 0.0925     0.0925     0.0325     0.0325     0.0325  
Weighted average common shares outstanding - basic 23,323,292     23,408,499     23,585,040     23,569,576     23,519,778  
Weighted average common shares outstanding - diluted 23,529,862     23,606,956     23,786,646     23,776,349     23,715,919  
                   
Balance sheet data                  
Total loans held for investment $ 4,143,195     $ 4,188,497     $ 3,984,597     $ 3,838,343     $ 3,789,105  
Total assets 5,324,626     5,396,928     5,119,625     4,872,201     4,821,576  
Total deposits 4,228,612     4,284,317     3,855,012     3,898,248     3,783,138  
Total stockholders' equity 599,262     588,363     584,293     568,122     549,779  
                   
Performance metrics and capital ratios                  
Yield on loans held for investment 4.95 %   5.23 %   5.29 %   5.28 %   5.17 %
Yield on interest earnings assets 4.56     4.81     4.85     4.86     4.75  
Rate on interest bearing deposits 1.44     1.59     1.61     1.48     1.31  
Rate on total deposits 1.04     1.16     1.19     1.11     0.96  
Net interest margin, fully tax equivalent 3.58     3.69     3.70     3.80     3.82  
Return on average stockholders' equity (annualized) 8.51     9.85     8.54     10.25     9.66  
Return on average assets (annualized) 0.97     1.12     0.98     1.18     1.10  
Efficiency ratio (1) 66.53     60.98     68.51     65.97     66.52  
Book value per common share $ 25.52     $ 25.06     $ 24.58     $ 23.92     $ 23.17  
Common equity tier 1 to risk-weighted assets (2) 11.75 %   11.43 %   11.93 %   12.05 %   11.94 %
Tier 1 capital to risk-weighted assets (2) 11.95     11.63     12.13     12.26     12.16  
Total capital to risk-weighted assets (2) 12.77     12.45     12.97     13.10     12.98  
Tier 1 leverage ratio (2) 10.91     10.88     11.10     11.23     11.21  

____________________________
(1) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
(2) December 31, 2019, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board.


 
Origin Bancorp, Inc.
Selected Financial Data
 
  Twelve Months Ended December 31,
(Dollars in thousands, except per share amounts) 2019   2018
Income statement and share amounts (Unaudited)    
Net interest income $ 173,712     $ 153,452  
Provision (benefit) for credit losses 9,568     1,014  
Noninterest income 46,478     41,240  
Noninterest expense 144,074     131,236  
Income before income tax expense 66,548     62,442  
Income tax expense 12,666     10,837  
Net income $ 53,882     $ 51,605  
Basic earnings per common share (1) $ 2.30     $ 2.21  
Diluted earnings per common share(1) 2.28     2.20  
Dividends declared per common share 0.25     0.13  
Weighted average common shares outstanding - basic 23,470,746     21,995,990  
Weighted average common shares outstanding - diluted 23,674,065     22,194,429  
       
Performance metrics      
Yield on loans held for investment 5.18 %   4.96 %
Yield on interest earnings assets 4.77     4.53  
Rate on interest bearing deposits 1.53     1.10  
Rate on total deposits 1.12     0.81  
Net interest margin, fully tax equivalent 3.69     3.75  
Return on average stockholders' equity 9.27     10.07  
Return on average assets 1.06     1.16  
Efficiency ratio (2) 65.43     67.41  

____________________________
(1) Due to the combined impact of the repurchase of common stock on the quarterly average common shares outstanding calculation compared to the impact of the repurchase of common stock shares on the year-to-date average common outstanding calculation, and the effect of rounding, the sum of the 2019 quarterly earnings per common share will not equal the 2019 year-to-date earnings per common share amount. Additionally, due to the impact of average preferred shares outstanding on the calculation of earnings per share for the 2018 period, the sum of quarterly periods may not agree to the amount disclosed for the 2018 year-to-date period.
(2) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.


 
Origin Bancorp, Inc.
Consolidated Balance Sheets
 
(Dollars in thousands) December 31,
 2019
  September 30,
 2019
  June 30,
 2019
  March 31,
 2019
  December 31,
 2018
Assets (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)    
Cash and due from banks $ 62,160     $ 79,005     $ 75,204     $ 66,312     $ 71,008  
Interest-bearing deposits in banks 229,358     229,757     124,356     44,928     45,670  
Total cash and cash equivalents 291,518     308,762     199,560     111,240     116,678  
Securities:                  
Available for sale 501,070     492,461     548,980     563,826     575,644  
Held to maturity 28,620     28,759     28,897     19,033     19,169  
Securities carried at fair value through income 11,513     11,745     11,615     11,510     11,361  
Total securities 541,203     532,965     589,492     594,369     606,174  
Non-marketable equity securities held in other financial institutions 39,808     49,205     49,008     42,314     42,149  
Loans held for sale 64,837     67,122     58,408     42,265     52,210  
Loans 4,143,195     4,188,497     3,984,597     3,838,343     3,789,105  
Less: allowance for loan losses 37,520     37,126     36,683     35,578     34,203  
Loans, net of allowance for loan losses 4,105,675     4,151,371     3,947,914     3,802,765     3,754,902  
Premises and equipment, net 80,457     80,921     80,672     78,684     75,014  
Mortgage servicing rights 20,697     19,866     21,529     23,407     25,114  
Cash surrender value of bank-owned life insurance 37,961     37,755     33,070     32,888     32,706  
Goodwill and other intangible assets, net 31,540     31,842     32,144     32,497     32,861  
Accrued interest receivable and other assets 110,930     117,119     107,828     111,772     83,768  
Total assets $ 5,324,626     $ 5,396,928     $ 5,119,625     $ 4,872,201     $ 4,821,576  
Liabilities and Stockholders' Equity                  
Noninterest-bearing deposits $ 1,077,706     $ 1,154,660     $ 1,003,499     $ 977,919     $ 951,015  
Interest-bearing deposits 2,360,096     2,309,387     2,011,719     2,101,706     2,027,720  
Time deposits 790,810     820,270     839,794     818,623     804,403  
Total deposits 4,228,612     4,284,317     3,855,012     3,898,248     3,783,138  
FHLB advances and other borrowings 417,190     419,681     601,346     335,053     445,224  
Junior subordinated debentures 9,671     9,664     9,657     9,651     9,644  
Accrued expenses and other liabilities 69,891     94,903     69,317     61,127     33,791  
Total liabilities 4,725,364     4,808,565     4,535,332     4,304,079     4,271,797  
Commitments and contingencies                  
Stockholders' equity                  
Common stock 117,405     117,409     118,871     118,730     118,633  
Additional paid-in capital 235,623     235,018     243,002     242,579     242,041  
Retained earnings 239,901     229,246     216,801     205,289     191,585  
Accumulated other comprehensive income (loss) 6,333     6,690     5,619     1,524     (2,480 )
Total stockholders' equity 599,262     588,363     584,293     568,122     549,779  
Total liabilities and stockholders' equity $ 5,324,626     $ 5,396,928     $ 5,119,625     $ 4,872,201     $ 4,821,576  


 
Origin Bancorp, Inc.
Consolidated Quarterly Statements of Income
 
  Three months ended
  December 31,
 2019
  September 30,
 2019
  June 30,
2019
  March 31,
2019
  December 31,
 2018
                   
Interest and dividend income (Dollars in thousands, except per share amounts, unaudited)
Interest and fees on loans $ 52,331     $ 53,932     $ 51,461     $ 49,175     $ 47,819  
Investment securities-taxable 2,640     2,786     3,208     3,341     3,292  
Investment securities-nontaxable 772     826     871     858     996  
Interest and dividend income on assets held in other financial institutions 976     1,262     1,523     1,120     951  
Total interest and dividend income 56,719     58,806     57,063     54,494     53,058  
Interest expense                  
Interest-bearing deposits 11,056     11,623     11,540     10,497     8,980  
FHLB advances and other borrowings 1,428     2,420     2,415     1,834     1,878  
Junior subordinated debentures 140     141     139     137     139  
Total interest expense 12,624     14,184     14,094     12,468     10,997  
Net interest income 44,095     44,622     42,969     42,026     42,061  
Provision for credit losses 2,377     4,201     1,985     1,005     1,723  
Net interest income after provision for credit losses 41,718     40,421     40,984     41,021     40,338  
Noninterest income                  
Service charges and fees 3,488     3,620     3,435     3,316     3,349  
Mortgage banking revenue 3,359     3,092     3,252     2,606     2,288  
Insurance commission and fee income 2,428     3,203     3,036     3,510     2,481  
Gain (loss) on sales of securities, net     20             (8 )
Gain (loss) on sales and disposals of other assets, net (38 )   (132 )   (166 )   3     (23 )
Limited partnership investment (loss) income (267 )   279     (418 )   400     745  
Swap fee income 151     1,351     172     511     299  
Change in fair value of equity investments         367          
Other fee income 440     414     360     276     592  
Other income 1,257     1,033     1,138     982     865  
Total noninterest income 10,818     12,880     11,176     11,604     10,588  
Noninterest expense                  
Salaries and employee benefits 22,074     21,523     22,764     22,613     21,333  
Occupancy and equipment, net 4,241     4,274     4,200     4,044     3,830  
Data processing 1,801     1,763     1,810     1,587     1,839  
Electronic banking 936     924     892     689     699  
Communications 454     411     647     586     513  
Advertising and marketing 991     930     1,089     798     1,351  
Professional services 878     956     839     904     1,024  
Regulatory assessments 679     (387 )   691     711     666  
Loan related expenses 1,400     1,315     790     669     810  
Office and operations 1,632     1,712     1,849     1,481     1,516  
Intangible asset amortization 302     302     353     364     367  
Franchise tax expense 496     683     492     489     309  
Other expenses 650     658     679     446     766  
Total noninterest expense 36,534     35,064     37,095     35,381     35,023  
Income before income tax expense 16,002     18,237     15,065     17,244     15,903  
Income tax expense 3,175     3,620     2,782     3,089     2,725  
Net income $ 12,827     $ 14,617     $ 12,283     $ 14,155     $ 13,178  
Basic earnings per common share $ 0.55     $ 0.62     $ 0.52     $ 0.60     $ 0.56  
Diluted earnings per common share 0.55     0.62     0.52     0.60     0.55  


 
Origin Bancorp, Inc.
Loan Data
 
  At and for the three months ended
Loans held for investment December 31,
 2019
  September 30,
 2019
  June 30,
 2019
  March 31,
 2019
  December 31,
 2018
                   
Loans secured by real estate: (Dollars in thousands, unaudited)
Commercial real estate $ 1,296,847     $ 1,305,006     $ 1,219,470     $ 1,202,269     $ 1,228,402  
Construction/land/land development 517,688     509,905     524,999     488,167     429,660  
Residential real estate 689,555     680,803     651,988     638,064     629,714  
Total real estate 2,504,090     2,495,714     2,396,457     2,328,500     2,287,776  
Commercial and industrial 1,343,475     1,367,595     1,341,652     1,287,300     1,272,566  
Mortgage warehouse lines of credit 274,659     304,917     224,939     202,744     207,871  
Consumer 20,971     20,271     21,549     19,799     20,892  
Total loans held for investment 4,143,195     4,188,497     3,984,597     3,838,343     3,789,105  
Less: Allowance for loan losses 37,520     37,126     36,683     35,578     34,203  
Loans held for investment, net $ 4,105,675     $ 4,151,371     $ 3,947,914     $ 3,802,765     $ 3,754,902  
                   
Nonperforming assets                  
Nonperforming loans held for investment                  
Commercial real estate $ 6,994     $ 7,460     $ 9,423     $ 8,622     $ 8,281  
Construction/land/land development 4,337     860     1,111     922     935  
Residential real estate 5,132     5,254     4,978     5,196     6,668  
Commercial and industrial 14,520     17,745     14,810     15,309     15,792  
Consumer 163     153     156     206     180  
Total nonperforming loans held for investment 31,146     31,472     30,478     30,255     31,856  
Nonperforming loans held for sale 927     1,462     2,049     1,390     741  
Total nonperforming loans 32,073     32,934     32,527     31,645     32,597  
Repossessed assets 4,753     4,565     3,554     3,659     3,739  
Total nonperforming assets $ 36,826     $ 37,499     $ 36,081     $ 35,304     $ 36,336  
Classified assets $ 69,870     $ 73,516     $ 80,124     $ 77,619     $ 82,914  
Past due loans held for investment (1) 29,980     29,965     31,884     37,841     34,085  
                   
Allowance for loan losses                  
Balance at beginning of period $ 37,126     $ 36,683     $ 35,578     $ 34,203     $ 35,727  
Provision for loan losses 3,167     3,435     1,782     823     1,886  
Loans charged off 3,268     5,415     840     608     3,583  
Loan recoveries 495     2,423     163     1,160     173  
Net charge-offs (recoveries) 2,773     2,992     677     (552 )   3,410  
Balance at end of period $ 37,520     $ 37,126     $ 36,683     $ 35,578     $ 34,203  
                   
Credit quality ratios                  
Total nonperforming assets to total assets 0.69 %   0.69 %   0.70 %   0.72 %   0.75 %
Total nonperforming loans to total loans 0.76     0.77     0.80     0.82     0.85  
Nonperforming loans held for investment to loans held for investment 0.75     0.75     0.76     0.79     0.84  
Past due loans held for investment to loans held for investment 0.72     0.72     0.80     0.99     0.90  
Allowance for loan losses to nonperforming loans held for investment 120.46     117.97     120.36     117.59     107.37  
Allowance for loan losses to total loans held for investment 0.91     0.89     0.92     0.93     0.90  
Net charge-offs (recoveries) to total average loans held for investment (annualized) 0.26     0.29     0.07     (0.06 )   0.37  

____________________________
(1) Past due loans held for investment are defined as loans 30 days past due or more.


 
Origin Bancorp, Inc.
Average Balances and Yields/Rates
 
  Three months ended
  December 31, 2019   September 30, 2019   December 31, 2018
  Average
Balance
  Yield/Rate   Average
Balance
  Yield/Rate   Average
Balance
  Yield/Rate
                       
Assets (Dollars in thousands, unaudited)
Commercial real estate $ 1,307,023     5.03 %   $ 1,259,274     5.22 %   $ 1,176,837     5.07 %
Construction/land/land development 526,494     5.20     533,328     5.48     407,120     5.55  
Residential real estate 694,436     4.95     676,650     5.07     604,383     4.87  
Commercial and industrial 1,356,316     4.88     1,340,684     5.26     1,251,969     5.22  
Mortgage warehouse lines of credit 262,392     4.47     236,042     4.92     187,801     5.54  
Consumer 20,889     6.68     20,959     6.90     21,809     6.76  
Loans held for investment 4,167,550     4.95     4,066,937     5.23     3,649,919     5.17  
Loans held for sale 42,873     2.63     33,814     4.15     22,168     4.70  
Loans Receivable 4,210,423     4.93     4,100,751     5.22     3,672,087     5.17  
Investment securities-taxable 437,626     2.41     448,766     2.48     499,489     2.64  
Investment securities-nontaxable 100,705     3.07     103,053     3.21     113,183     3.52  
Non-marketable equity securities held in other financial institutions 48,669     2.88     49,025     2.76     40,176     2.64  
Interest-bearing balances due from banks 139,508     1.77     152,580     2.39     108,126     2.51  
Total interest-earning assets 4,936,931     4.56 %   4,854,175     4.81 %   4,433,061     4.75 %
Noninterest-earning assets(1) 335,048         325,374         308,125      
Total assets $ 5,271,979         $ 5,179,549         $ 4,741,186      
                       
Liabilities and Stockholders' Equity                      
Liabilities                      
Interest-bearing liabilities                      
Savings and interest-bearing transaction accounts $ 2,248,863     1.21 %   $ 2,071,990     1.36 %   $ 1,932,958     1.10 %
Time deposits 803,344     2.08     828,993     2.16     789,816     1.81  
Total interest-bearing deposits 3,052,207     1.44     2,900,983     1.59     2,722,774     1.31  
FHLB advances and other borrowings 342,000     1.62     475,860     1.96     358,810     1.95  
Securities sold under agreements to repurchase 18,198     0.65     25,302     1.09     37,075     1.23  
Junior subordinated debentures 9,668     5.67     9,661     5.69     9,641     5.66  
Total interest-bearing liabilities 3,422,073     1.46 %   3,411,806     1.65 %   3,128,300     1.39 %
Noninterest-bearing deposits 1,150,381         1,076,344         1,001,033      
Other liabilities(1) 101,600         102,895         70,648      
Total liabilities 4,674,054         4,591,045         4,199,981      
Stockholders' Equity 597,925         588,504         541,205      
Total liabilities and stockholders' equity $ 5,271,979         $ 5,179,549         $ 4,741,186      
Net interest spread     3.10 %       3.16 %       3.36 %
Net interest margin     3.54 %       3.65 %       3.76 %
Net interest income margin - (tax- equivalent)(2)     3.58 %       3.69 %       3.82 %

____________________________
(1) Includes Government National Mortgage Association ("GNMA") repurchase average balances of $24.5 million, $23.7 million and $29.2 million for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively. The GNMA repurchase asset and liability are recorded as equal offsetting amounts in the consolidated balance sheets, with the asset included in Loans held for sale and the liability included in FHLB advances and other borrowings.
(2) In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds.

 
Origin Bancorp, Inc.
Non-GAAP Financial Measures
 
(Dollars in thousands, except per share amounts) December 31,
 2019
  September 30,
 2019
  June 30,
2019
  March 31,
 2019
  December 31,
 2018
Calculation of Tangible Common Equity:                  
Total Common Stockholders' Equity $ 599,262     $ 588,363     $ 584,293     $ 568,122     $ 549,779  
Less: Goodwill and Other Intangible Assets, Net 31,540     31,842     32,144     32,497     32,861  
Tangible Common Equity $ 567,722     $ 556,521     $ 552,149     $ 535,625     $ 516,918  
                   
Calculation of Tangible Book Value per Common Share:                  
Common Shares Outstanding at the End of the Period 23,480,945     23,481,781     23,774,238     23,745,985     23,726,559  
Tangible Book Value per Common Share $ 24.18     $ 23.70     $ 23.22     $ 22.56     $ 21.79