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Origin Bancorp, Inc. Reports Earnings for First Quarter 2021
来源: Nasdaq GlobeNewswire / 28 4月 2021 16:30:01 America/New_York
RUSTON, La., April 28, 2021 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced record net income of $25.5 million for the quarter ended March 31, 2021. This represents an increase of $8.0 million from the quarter ended December 31, 2020, and an increase of $24.8 million from the quarter ended March 31, 2020. Diluted earnings per share for the quarter ended March 31, 2021, were $1.08, up $0.33 from the linked quarter and up $1.05 from the quarter ended March 31, 2020. Pre-tax, pre-provision earnings for the quarter were a record $32.9 million, an increase of 16.3% on a linked quarter basis, and a 74.7% increase on a prior year quarter basis, while the efficiency ratio improved to 54.5%, a 1,120 basis point improvement from the quarter ended March 31, 2020.
“Origin delivered strong first quarter results hitting another historic pre-tax, pre-provision earnings high and an all-time quarterly net income high,” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “Our employees remain focused on relationship development and our results for the quarter prove that focus. We will continue to provide shareholder value as we execute on our long-term strategic plan and capitalize on the opportunities before us.”
Financial Highlights
- Net income was $25.5 million for the quarter ended March 31, 2021, achieving an all-time quarterly high compared to $17.6 million for the linked quarter and $753,000 for the quarter ended March 31, 2020.
- Net interest income also achieved a historic quarterly high, reflecting $55.2 million for the quarter ended March 31, 2021, compared to $51.8 million for the linked quarter and $42.8 million for the quarter ended March 31, 2020.
- Provision expense was $1.4 million for the quarter ended March 31, 2021, compared to provision expense of $6.3 million for the linked quarter and $18.5 million for the quarter ended March 31, 2020.
- Total deposits at March 31, 2021, were $6.35 billion, an increase of $594.9 million, or 10.3%, from December 31, 2020, and an increase of $1.79 billion, or 39.3%, from March 31, 2020.
- Total LHFI were $5.85 billion at March 31, 2021, an increase of $125.0 million, or 2.2%, from December 31, 2020, and an increase of $1.37 billion, or 30.5%, from March 31, 2020.
Coronavirus (COVID-19)
Origin has continued to meet customers' needs while keeping the safety and well-being of its employees and customers as its top priority. While the Company allowed restricted access to its offices and branches during the height of the pandemic, the Company's offices and branches have been fully opened since March 15, 2021. Origin continues to maintain social distancing measures for its employees, including the requirement to wear face masks unless working in an office or other location that permits social distancing. The Company also continues to encourage its employees to wash their hands thoroughly and frequently and to sanitize work areas when necessary to promote the safety and health of its employees and customers. Thermal kiosks for temperature checks are in use at the entrance of each location and customers are encouraged to wear face masks when entering Origin bank facilities. The Company continues to provide pandemic Paid Time Off to employees and a dedicated hotline is available to quickly assist employees with any COVID-19 related questions or issues. Origin will continue to examine and evaluate its COVID-19 safety protocols in accordance with public health directives.
Credit Quality
The COVID-19 pandemic has had a severe impact on the U.S. economy leading to elevated unemployment levels and a recession. The Company's financial results for the first quarter of 2021 have improved from the results achieved during 2020, but there is still uncertainty surrounding the economic outlook.
The table below includes key credit quality information:
At and for the three months ended (Dollars in thousands) March 31,
2021December 31,
2020March 31,
2020Allowance for loan credit losses $ 85,136 $ 86,670 $ 56,063 Classified loans 95,321 107,781 74,684 Total nonperforming LHFI 33,358 26,149 33,032 Provision for credit losses 1,412 6,333 18,531 Net charge-offs 2,894 1,757 1,101 Credit quality ratios: Allowance for loan credit losses to nonperforming LHFI 255.22 % 331.45 % 169.72 % Allowance for loan credit losses to total LHFI 1.46 1.51 1.25 Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (1) 2.02 2.10 1.37 Nonperforming LHFI to LHFI 0.57 0.46 0.74 Net charge-offs to total average LHFI (annualized) 0.21 0.13 0.11 ____________________________
(1) Please see the Loan Data schedule at the back of this document for additional information.The decrease in provision expense compared to the quarter ended March 31, 2020, was primarily due to improvement in forecasted economic conditions including the passing of additional government stimulus, widespread vaccine availability and reduced levels of new virus cases, at March 31, 2021, as compared to forecasted worsening economic conditions and uncertainty at March 31, 2020. While there are some improvements in economic forecasts, uncertainty remains particularly related to the 2021 year and the deployment and effectiveness of COVID-19 vaccines.
The Company's net charge-offs increased $1.1 million compared to the quarter ended December 31, 2020, and $1.8 million compared to the quarter ended March 31, 2020. The increase in net charge-offs compared to the linked quarter was primarily due to five commercial and industrial loans, reflecting four loan relationships, that were written down during the quarter ended March 31, 2021, totaling $2.8 million. Annualized net charge-offs as a percentage of average LHFI were 0.21% for the quarter ending March 31, 2021, compared to 0.13% for the quarter ended December 31, 2020. For the year ended December 31, 2020, net charge-offs as a percentage of average LHFI was 0.22%.
Classified loans declined $12.5 million at March 31, 2021, compared to December 31, 2020, and represented 1.81% as a percentage of LHFI, excluding PPP loans, and 11.10% as a percentage of total risk-based capital (at the Origin Bancorp, Inc. level) compared to 2.08% and 12.88%, respectively, at December 31, 2020.
The Company continues to closely monitor those industry sectors that could experience a more protracted recovery from the current economic downturn, specifically the sectors of hotels, non-essential retail, restaurants, and assisted living ("selected sectors"). For more information on Origin’s COVID-19 selected sectors, please see the Investor Presentation furnished to the SEC on April 28, 2021, and on Origin's website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link.
The following table presents certain information on the selected sectors at the periods indicated:
March 31, 2021 March 31, 2020 (Dollars in thousands) Balance % of LHFI, excl.
PPP loansBalance % of LHFI, excl.
PPP loansLHFI, excluding PPP loans, in selected sectors $ 510,490 9.7 % $ 445,671 9.9 % Nonperforming LHFI in selected sectors 1,131 — 14,792 0.3 Loans in COVID-19 related forbearance 5,293 0.1 769,460 17.2 Results of Operations for the Three Months Ended March 31, 2021
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended March 31, 2021, was $55.2 million, an increase of $3.4 million, or 6.6%, compared to the linked quarter. The increase was primarily driven by a $2.8 million increase in accelerated PPP fee earnings earned through the forgiveness process and a $793,000 decrease in deposit costs. The yield on PPP loans was 4.40% during the quarter ended March 31, 2021, compared to 2.36% during the linked quarter ended December 31, 2020, driven almost exclusively by the accelerated recognition of deferred loan fees associated with the forgiveness of the underlying PPP loans by the U.S. Small Business Administration.
Interest-bearing deposit expense was $3.8 million during the current quarter, compared to $4.6 million for the quarter ended December 31, 2020, primarily due to a reduction in deposit rates. The average rate on time deposits decreased to 0.95% for the current quarter, down from 1.20% for the linked quarter, contributing $454,000 to the decrease in interest expense on interest-bearing deposits. The average rate on interest-bearing deposits was 0.37% for the current quarter, down from 0.43% for the linked quarter.
The fully tax-equivalent net interest margin ("NIM") was 3.22% for the current quarter, a 15 basis point increase from the linked quarter and a 22 basis point decrease from the quarter ended March 31, 2020. Excluding PPP loans, the fully tax-equivalent NIM was 3.15%, a two basis point decrease from the linked quarter. The impact on the fully tax-equivalent NIM of the recognition of deferred loan fees associated with the forgiveness of the underlying PPP loans during the quarter ended March 31, 2021, when compared to the fully tax-equivalent NIM for December 31, 2020, was 16 basis points. The yield earned on interest-earning assets was 3.58%, a 11 basis point increase and a 79 basis point decrease compared to the linked quarter and the quarter ended March 31, 2020, respectively. Excluding PPP loans, the yield earned on interest-earning assets was 3.51%, a six basis point decrease compared to the linked quarter. The rate paid on total interest-bearing liabilities for the quarter ended March 31, 2021, was 0.57%, representing a decrease of seven basis points and 80 basis points compared to the linked quarter and the quarter ended March 31, 2020, respectively.
Noninterest Income
Noninterest income for the quarter ended March 31, 2021, was $17.1 million, an increase of $1.8 million, or 11.4%, from the linked quarter. The increase from the linked quarter was primarily driven by increases of $1.4 million, $1.4 million and $1.0 million in gain on sales of securities, net, limited partnership investment income, and insurance commission and fee income, respectively, which was partially offset by a $2.0 million decrease in mortgage banking revenue.
The $1.4 million increase in the gain on sale of securities compared to the linked period was the result of the active management of the investment portfolio and the movement out of positions that were not performing in line with expectations.
The $1.4 million increase in the limited partnership investment income during the quarter ended March 31, 2021, compared to the linked quarter was primarily due to valuation increases as a result of investment performance in two funds.
The $1.0 million increase in insurance commission and fee income is attributed to seasonality, as there is typically higher insurance revenue in the first quarter of each year.
The $2.0 million decrease in mortgage banking revenue is mainly due to a decrease in the mortgage loan pipeline during the quarter ended March 31, 2021, when compared to the linked quarter in addition to an increase in 30 year mortgage rates causing the overall pipeline valuation to drop.
Noninterest Expense
Noninterest expense for the quarter ended March 31, 2021, was $39.4 million, an increase of $552,000, compared to the linked quarter. The increase from the linked quarter was largely driven by an increase of $1.5 million in other noninterest expense, which was partially offset by decreases of $428,000 and $203,000 in advertising and marketing expenses, and professional services fee, respectively.
The increase in other noninterest expense was due to prepayment fees of $1.6 million incurred related to the early termination of long-term FHLB advances during the quarter ended March 31, 2021. The Company terminated the advances early due to the relatively high cost of the advances, partially funding the payoff with the sale of lower yielding securities during the quarter.
The decrease in advertising and marketing expense was due to media related campaigns during the quarter ended December 31, 2020, which were not recurring in the current quarter.
The decrease in professional services fee was due to a $254,000 consulting fee paid to a loan sale advisor who assisted in the sale of a performing loan during the quarter ended December 31, 2020.
Financial Condition
Loans
- Total LHFI increased $125.0 million compared to the linked quarter and $1.37 billion compared to March 31, 2020.
- PPP loans, net of deferred fees and costs, totaled $584.1 million at March 31, 2021, an increase of $37.6 million compared to the linked quarter. Net deferred loan fees and costs on PPP loans were $11.5 million at March 31, 2021.
- Average LHFI increased $193.6 million, compared to the linked quarter, and $1.53 billion compared to March 31, 2020.
Total LHFI at March 31, 2021, were $5.85 billion, reflecting an increase of 2.2% compared to the linked quarter and an increase of 30.5%, compared to March 31, 2020. The increase in LHFI compared to March 31, 2020, was primarily driven by an increase in mortgage warehouse lines of credit and PPP loans. Mortgage warehouse lines of credit increased by $653.1 million primarily due to increased mortgage activity driven by the continued low interest rate environment, coupled with additional mortgage warehouse clients being onboarded during mid-2020 and funding loans over the last four quarters. Mortgage warehouse loan growth has eased during the current quarter as mortgage interest rates have broadly started to increase from previous levels.
Deposits
- Total deposits increased $594.9 million compared to the linked quarter and increased $1.79 billion compared to March 31, 2020.
- Business depositors drove an increase of $398.5 million and $1.12 billion compared to the linked quarter and March 31, 2020, respectively.
- Average total deposits for the quarter ended March 31, 2021, decreased by $14.2 million over the linked quarter and increased $1.55 billion over the quarter ended March 31, 2020.
Total deposits at March 31, 2021, were $6.35 billion, reflecting an increase of 10.3% compared to the linked quarter and an increase of 39.3% compared to March 31, 2020. Money market, brokered and noninterest-bearing deposits increased by $333.8 million, $140.5 million and $129.0 million, respectively, compared to the linked quarter. Brokered deposits increased in response to changes in funding costs and sources over the current quarter. Historically, from time to time, the Company has used noncore funding sources, including brokered deposits, to support the increase in mortgage warehouse lines of credit and has shifted primarily between brokered deposits and FHLB advances, which may impact the balances in brokered deposits as funding costs and sources change.
Increases of $549.9 million and $508.0 million in money market business and noninterest-bearing business accounts, respectively, drove the increase in total deposits compared to March 31, 2020, primarily due to funds from government stimulus, including PPP loan funds.
For the quarter ended March 31, 2021, average noninterest-bearing deposits as a percentage of total average deposits was 29.0%, compared to 28.7% for the quarter ended December 31, 2020, and 25.4% for the quarter ended March 31, 2020.
Borrowings
- Average FHLB advances and other borrowings for the quarter ended March 31, 2021, increased by $210.3 million, compared to the quarter ended December 31, 2020, and increased by $243.2 million over the quarter ended March 31, 2020.
Average FHLB advances and other borrowings increased 60.5% for the quarter ended March 31, 2021, compared to the quarter ended December 31, 2020, and increased 77.3% compared to the quarter ended March 31, 2020. During the quarter ended March 31, 2021, the Company increased its short-term average FHLB advances to $278.1 million from $64.9 million during the quarter ended December 31, 2020. The increase was primarily due to shifts in funding costs and sources as the Company supports the ongoing mortgage warehouse loan growth. The Company prepaid $13.1 million in long-term FHLB advances during the quarter ended March 31, 2021, and incurred related prepayment fees of $1.6 million.
Stockholders' equity was $656.4 million at March 31, 2021, an increase of $9.2 million compared to $647.2 million at December 31, 2020, and an increase of $49.7 million compared to $606.6 million at March 31, 2020. The increase from the linked quarter was primarily due to net income for the quarter of $25.5 million, which was partially offset by the quarterly dividend declared and other comprehensive loss during the quarter ended March 31, 2021. Additionally, during the first quarter of 2021, the Company repurchased a total of 37,568 shares of its common stock pursuant to its stock buyback program at an average price per share of $33.42, for an aggregate purchase price of $1.3 million. The increase from the March 31, 2020, quarter was primarily caused by retained earnings and other comprehensive income during the intervening period.
Conference Call
Origin will hold a conference call to discuss its first quarter 2021 results on Thursday, April 29, 2021, 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/obnk210429.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 headquartered in Ruston, Louisiana. Origin's wholly owned bank subsidiary, Origin Bank, was founded in 1912. Deeply rooted in Origin's history is a culture committed to providing personalized, relationship banking to its clients and communities. Origin provides a broad range of financial services to businesses, municipalities, high net-worth individuals and retail clients. Origin currently operates 44 banking centers located from Dallas/Fort Worth and Houston, Texas across North Louisiana and into Mississippi. For more information, visit 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 the Company’s loan loss reserves and allowance for credit losses related to the COVID-19 pandemic and any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including expectations regarding efforts to respond to the COVID-19 pandemic and changes to interest rates by the Federal Reserve and the resulting impact on Origin's results of operations, estimated forbearance amounts 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 or statistics preceded by, followed by or that otherwise include the words "anticipates," "believes," "estimates," "expects," “foresees,” "intends," "plans," "projects," and similar expressions or future or conditional verbs such as "could," "may," “might,” "should," "will," and "would" or variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin's future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: the continuing duration and impacts of the COVID-19 global pandemic and continuing development and distribution of COVID-19 vaccines, as well as other efforts to contain the virus's transmission, including the effect of these factors and developments on Origin’s business, customers and economic conditions generally, as well as the impact of the actions taken by governmental authorities to address the impact of COVID-19 on the United States economy, including, any economic stimulus legislation; deterioration of Origin's asset quality; factors that can impact the performance of Origin’s loan portfolio, including real estate values and liquidity in Origin's primary market areas; the financial health of Origin's commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin's loans; Origin’s ability to anticipate interest rate changes and manage interest rate risk; the effectiveness of Origin’s risk management framework and quantitative models; the risk of widespread inflation; Origin’s inability to receive dividends from Origin Bank and to service debt, pay dividends to Origin’s common stockholders, repurchase Origin’s shares of common stock and satisfy obligations as they become due; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; changes in Origin’s operation or expansion strategy or Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important customer relationships, reputation or otherwise avoid liquidity risks; increasing costs as Origin grows deposits; operational risks associated with Origin’s business; volatility and direction of market interest rates; increased competition in the financial services industry, particularly from regional and national institutions; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated; an increase in unemployment levels and slowdowns in economic growth; Origin's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin's loan portfolio; changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, and potential expenses associated with complying with such regulations, periodic changes to the extensive body of accounting rules and best practices; further government intervention in the U.S. financial system; compliance with governmental and regulatory requirements, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and others relating to banking, consumer protection, securities and tax matters; Origin's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin's non-GAAP liquidity measurements and its underlying assumptions or estimates; uncertainty regarding the future of the London Interbank Offered Rate and the impact of any replacement alternatives on Origin’s business; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies and similar organizations; natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities, 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 Origin’s control; and system failures, cybersecurity threats or security breaches and the cost of defending against them. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any updates to those sections set forth in Origin's subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin's underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the COVID-19 pandemic and the impact of varying governmental responses that affect Origin's customers and the economies where they operate. 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, adjusted, 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.bankOrigin Bancorp, Inc.
Selected Quarterly Financial DataAt and for the three months ended March 31,
2021December 31,
2020September 30,
2020June 30,
2020March 31,
2020Income statement and share amounts (Dollars in thousands, except per share amounts, unaudited) Net interest income $ 55,239 $ 51,819 $ 50,617 $ 46,290 $ 42,810 Provision for credit losses 1,412 6,333 13,633 21,403 18,531 Noninterest income 17,131 15,381 18,051 19,076 12,144 Noninterest expense 39,436 38,884 38,734 38,220 36,097 Income before income tax expense 31,522 21,983 16,301 5,743 326 Income tax (benefit) expense 6,009 4,431 3,206 786 (427 ) Net income $ 25,513 $ 17,552 $ 13,095 $ 4,957 $ 753 Pre-tax, pre-provision ("PTPP") earnings (1) $ 32,934 $ 28,316 $ 29,934 $ 27,146 $ 18,857 Basic earnings per common share 1.09 0.75 0.56 0.21 0.03 Diluted earnings per common share 1.08 0.75 0.56 0.21 0.03 Dividends declared per common share 0.10 0.10 0.0925 0.0925 0.0925 Weighted average common shares outstanding - basic 23,393,356 23,392,684 23,374,496 23,347,744 23,353,601 Weighted average common shares outstanding - diluted 23,590,430 23,543,917 23,500,596 23,466,326 23,530,212 Balance sheet data Total LHFI $ 5,849,760 $ 5,724,773 $ 5,612,666 $ 5,312,194 $ 4,481,185 Total assets 7,563,175 7,628,268 7,101,338 6,643,909 6,049,638 Total deposits 6,346,194 5,751,315 5,935,925 5,372,222 4,556,246 Total stockholders' equity 656,355 647,150 627,637 614,781 606,631 Performance metrics and capital ratios Yield on LHFI 4.03 % 3.89 % 4.02 % 4.09 % 4.85 % Yield on interest earnings assets 3.58 3.47 3.64 3.65 4.37 Cost of interest bearing deposits 0.37 0.43 0.61 0.79 1.28 Cost of total deposits 0.26 0.31 0.42 0.54 0.95 Net interest margin, fully tax equivalent 3.22 3.07 3.18 3.09 3.44 Net interest margin, excluding PPP loans, fully tax equivalent (2) 3.15 3.17 3.28 3.15 N/A Return on average stockholders' equity (annualized) 15.73 10.92 8.28 3.23 0.50 Return on average assets (annualized) 1.40 0.97 0.77 0.31 0.06 PTPP return on average stockholders' equity (annualized) (1) 20.30 17.61 18.92 17.67 12.41 PTPP return on average assets (annualized) (1) 1.81 1.57 1.77 1.69 1.40 Efficiency ratio (3) 54.49 57.86 56.41 58.47 65.69 Book value per common share $ 27.94 $ 27.53 $ 26.70 $ 26.16 $ 25.84 Tangible book value per common share (1) 26.66 26.23 25.39 24.84 24.51 Common equity tier 1 to risk-weighted assets (4) 10.16 % 9.95 % 9.93 % 10.35 % 10.86 % Tier 1 capital to risk-weighted assets (4) 10.32 10.11 10.09 10.52 11.04 Total capital to risk-weighted assets (4) 13.92 13.79 12.48 12.91 13.38 Tier 1 leverage ratio (4) 8.67 8.62 9.19 9.10 10.71 ____________________________
(1) PTPP earnings, PTPP return on average stockholders' equity, PTPP return on average assets and tangible book value per common share are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, please see page 14.
(2) Net interest margin, excluding PPP loans, fully tax equivalent is calculated by removing average PPP loans from average interest earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net interest income.
(3) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
(4) March 31, 2021, 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.
Consolidated Quarterly Statements of IncomeThree months ended March 31,
2021December 31,
2020September 30,
2020June 30,
2020March 31,
2020Interest and dividend income (Dollars in thousands, except per share amounts, unaudited) Interest and fees on loans $ 56,810 $ 54,193 $ 54,150 $ 50,722 $ 50,049 Investment securities-taxable 3,300 3,154 2,704 2,732 2,712 Investment securities-nontaxable 1,672 1,708 1,571 1,391 758 Interest and dividend income on assets held in other financial institutions 345 367 375 619 1,497 Total interest and dividend income 62,127 59,422 58,800 55,464 55,016 Interest expense Interest-bearing deposits 3,789 4,582 5,698 6,620 10,250 FHLB advances and other borrowings 1,269 1,339 1,564 1,641 1,351 Subordinated debentures 1,830 1,682 921 913 605 Total interest expense 6,888 7,603 8,183 9,174 12,206 Net interest income 55,239 51,819 50,617 46,290 42,810 Provision for credit losses 1,412 6,333 13,633 21,403 18,531 Net interest income after provision for credit losses 53,827 45,486 36,984 24,887 24,279 Noninterest income Service charges and fees 3,343 3,420 3,268 2,990 3,320 Mortgage banking revenue 4,577 6,594 9,523 10,717 2,769 Insurance commission and fee income 3,771 2,732 3,218 3,109 3,687 Gain on sales of securities, net 1,668 225 301 — 54 (Loss) on sales and disposals of other assets, net (38 ) (33 ) (247 ) (908 ) (25 ) Limited partnership investment income (loss) 1,772 368 130 9 (429 ) Swap fee income 348 233 110 1,527 676 Other fee income 771 604 576 607 466 Other income 919 1,238 1,172 1,025 1,626 Total noninterest income 17,131 15,381 18,051 19,076 12,144 Noninterest expense Salaries and employee benefits 22,325 22,475 22,597 24,045 21,988 Occupancy and equipment, net 4,339 4,271 4,263 4,267 4,221 Data processing 2,173 2,178 2,065 2,075 2,003 Electronic banking 961 942 954 890 900 Communications 415 449 422 419 477 Advertising and marketing 680 1,108 1,281 610 711 Professional services 973 1,176 785 843 1,171 Regulatory assessments 1,170 1,135 1,310 766 615 Loan related expenses 1,705 1,856 1,809 1,509 1,142 Office and operations 1,454 1,472 1,367 1,344 1,441 Intangible asset amortization 234 237 237 287 299 Franchise tax expense 619 665 511 514 496 Other expenses 2,388 920 1,133 651 633 Total noninterest expense 39,436 38,884 38,734 38,220 36,097 Income before income tax expense 31,522 21,983 16,301 5,743 326 Income tax expense (benefit) 6,009 4,431 3,206 786 (427 ) Net income $ 25,513 $ 17,552 $ 13,095 $ 4,957 $ 753 Basic earnings per common share $ 1.09 $ 0.75 $ 0.56 $ 0.21 $ 0.03 Diluted earnings per common share 1.08 0.75 0.56 0.21 0.03 Origin Bancorp, Inc.
Consolidated Balance Sheets(Dollars in thousands) March 31,
2021December 31,
2020September 30,
2020June 30,
2020March 31,
2020Assets (Unaudited) (Unaudited) (Unaudited) (Unaudited) Cash and due from banks $ 64,330 $ 60,544 $ 61,250 $ 57,054 $ 91,104 Interest-bearing deposits in banks 200,571 316,670 160,661 99,282 469,075 Total cash and cash equivalents 264,901 377,214 221,911 156,336 560,179 Securities: Available for sale 980,132 1,004,674 797,260 720,616 601,637 Held to maturity, net of allowance for credit losses 37,983 38,128 38,193 38,287 28,383 Securities carried at fair value through income 11,077 11,554 11,813 11,977 12,242 Total securities 1,029,192 1,054,356 847,266 770,880 642,262 Non-marketable equity securities held in other financial institutions 47,274 62,586 38,052 41,864 52,267 Loans held for sale 144,950 191,512 155,525 121,541 75,322 Loans 5,849,760 5,724,773 5,612,666 5,312,194 4,481,185 Less: allowance for loan credit losses 85,136 86,670 81,643 70,468 56,063 Loans, net of allowance for loan credit losses 5,764,624 5,638,103 5,531,023 5,241,726 4,425,122 Premises and equipment, net 81,064 81,763 79,254 80,025 80,193 Mortgage servicing rights 17,552 13,660 14,322 15,235 16,122 Cash surrender value of bank-owned life insurance 37,757 37,553 37,332 37,102 36,874 Goodwill and other intangible assets, net 30,246 30,480 30,717 30,953 31,241 Accrued interest receivable and other assets 145,615 141,041 145,936 148,247 130,056 Total assets $ 7,563,175 $ 7,628,268 $ 7,101,338 $ 6,643,909 $ 6,049,638 Liabilities and Stockholders' Equity Noninterest-bearing deposits $ 1,736,534 $ 1,607,564 $ 1,599,436 $ 1,584,746 $ 1,115,811 Interest-bearing deposits 3,962,082 3,478,985 3,640,587 3,041,859 2,673,881 Time deposits 647,578 664,766 695,902 745,617 766,554 Total deposits 6,346,194 5,751,315 5,935,925 5,372,222 4,556,246 FHLB advances and other borrowings 325,751 984,608 360,325 478,260 716,909 Subordinated debentures 157,239 157,181 78,596 78,567 78,539 Accrued expenses and other liabilities 77,636 88,014 98,855 100,079 91,313 Total liabilities 6,906,820 6,981,118 6,473,701 6,029,128 5,443,007 Stockholders' equity Common stock 117,444 117,532 117,533 117,506 117,380 Additional paid-in capital 236,934 237,341 236,679 236,156 235,709 Retained earnings 289,792 266,628 251,427 240,506 237,720 Accumulated other comprehensive income 12,185 25,649 21,998 20,613 15,822 Total stockholders' equity 656,355 647,150 627,637 614,781 606,631 Total liabilities and stockholders' equity $ 7,563,175 $ 7,628,268 $ 7,101,338 $ 6,643,909 $ 6,049,638 Origin Bancorp, Inc.
Loan DataAt and for the three months ended (Dollars in thousands, unaudited) March 31,
2021December 31,
2020September 30,
2020June 30,
2020March 31,
2020LHFI Commercial real estate $ 1,454,649 $ 1,387,939 $ 1,367,916 $ 1,323,754 $ 1,302,520 Construction/land/land development 548,236 531,860 560,857 570,032 563,820 Residential real estate 904,753 885,120 832,055 769,354 703,263 Total real estate loans 2,907,638 2,804,919 2,760,828 2,663,140 2,569,603 Paycheck Protection Program 584,148 546,519 552,329 549,129 — Commercial and industrial 1,250,350 1,271,343 1,263,279 1,313,405 1,455,497 Mortgage warehouse lines of credit 1,090,347 1,084,001 1,017,501 769,157 437,257 Consumer 17,277 17,991 18,729 17,363 18,828 Total LHFI 5,849,760 5,724,773 5,612,666 5,312,194 4,481,185 Less: allowance for loan credit losses 85,136 86,670 81,643 70,468 56,063 LHFI, net $ 5,764,624 $ 5,638,103 $ 5,531,023 $ 5,241,726 $ 4,425,122 Nonperforming assets Nonperforming LHFI Commercial real estate $ 1,085 $ 3,704 $ 4,669 $ 4,717 $ 11,306 Construction/land/land development 2,431 2,962 2,976 3,726 3,850 Residential real estate 10,692 6,530 8,259 6,713 4,076 Commercial and industrial 19,094 12,897 14,255 14,772 13,619 Consumer 56 56 69 119 181 Total nonperforming LHFI 33,358 26,149 30,228 30,047 33,032 Nonperforming loans held for sale 963 681 483 734 840 Total nonperforming loans 34,321 26,830 30,711 30,781 33,872 Repossessed assets 3,893 1,927 718 4,155 5,296 Total nonperforming assets $ 38,214 $ 28,757 $ 31,429 $ 34,936 $ 39,168 Classified assets $ 99,214 $ 109,708 $ 101,577 $ 100,299 $ 79,980 Past due LHFI (1) 26,574 25,763 29,194 23,751 51,018 Allowance for loan credit losses Balance at beginning of period $ 86,670 $ 81,643 $ 70,468 $ 56,063 $ 37,520 Impact of adopting ASC 326 — — — — 1,248 Provision for loan credit losses 1,360 6,784 12,970 20,878 18,396 Loans charged off 3,027 2,089 2,293 6,587 1,425 Loan recoveries 133 332 498 114 324 Net charge-offs 2,894 1,757 1,795 6,473 1,101 Balance at end of period $ 85,136 $ 86,670 $ 81,643 $ 70,468 $ 56,063 Credit quality ratios Total nonperforming assets to total assets 0.51 % 0.38 % 0.44 % 0.53 % 0.65 % Total nonperforming loans to total loans 0.57 0.45 0.53 0.57 0.74 Nonperforming LHFI to LHFI 0.57 0.46 0.54 0.57 0.74 Past due LHFI to LHFI 0.45 0.45 0.52 0.45 1.14 Allowance for loan credit losses to nonperforming LHFI 255.22 331.45 270.09 234.53 169.72 Allowance for loan credit losses to total LHFI 1.46 1.51 1.45 1.33 1.25 Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (2) 2.02 2.10 2.00 1.75 1.37 Net charge-offs to total average LHFI (annualized) 0.21 0.13 0.13 0.53 0.11 Net charge-offs (recoveries) to total average LHFI (annualized), excluding PPP loans 0.23 0.14 0.15 0.58 0.11 ____________________________
(1) Past due LHFI are defined as loans 30 days or more past due.
(2) The allowance for loan credit losses ("ACL") to total LHFI excluding PPP and warehouse loans is calculated by excluding the ACL for warehouse loans from the numerator and excluding the PPP and warehouse loans from the denominator. Mortgage warehouse loans increased significantly during the period, but, due to their low-risk profile, require a disproportionately low allocation of the allowance for loan credit losses.Origin Bancorp, Inc.
Average Balances and Yields/RatesThree months ended March 31, 2021 December 31, 2020 March 31, 2020 Average
BalanceYield/Rate Average
BalanceYield/Rate Average
BalanceYield/Rate Assets (Dollars in thousands, unaudited) Commercial real estate $ 1,421,819 4.16 % $ 1,362,025 4.27 % $ 1,274,633 4.88 % Construction/land/land development 541,782 4.09 533,756 4.21 545,076 5.21 Residential real estate 888,208 4.04 853,299 4.23 695,040 4.79 Paycheck Protection Program ("PPP") 565,653 4.40 551,325 2.36 — — Commercial and industrial excl. PPP 1,255,436 3.95 1,242,018 3.83 1,372,801 4.74 Mortgage warehouse lines of credit 961,808 3.67 897,716 3.81 210,480 4.46 Consumer 17,649 5.81 18,575 6.03 19,687 6.77 LHFI 5,652,355 4.03 5,458,714 3.89 4,117,717 4.85 Loans held for sale 87,177 2.71 114,196 2.73 33,288 4.89 Loans receivable 5,739,532 4.01 5,572,910 3.87 4,151,005 4.85 Investment securities-taxable 750,801 1.78 662,527 1.89 450,576 2.42 Investment securities-nontaxable 295,000 2.30 291,702 2.33 102,954 2.96 Non-marketable equity securities held in other financial institutions 60,326 1.45 39,763 1.99 40,494 3.09 Interest-bearing balances due from banks 196,616 0.27 236,772 0.28 319,953 1.49 Total interest-earning assets 7,042,275 3.58 6,803,674 3.47 5,064,982 4.37 Noninterest-earning assets(1) 340,220 360,354 335,722 Total assets $ 7,382,495 $ 7,164,028 $ 5,400,704 Liabilities and Stockholders' Equity Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 3,513,281 0.26 % $ 3,520,543 0.29 % $ 2,444,953 1.05 % Time deposits 656,255 0.95 677,651 1.20 781,907 1.98 Total interest-bearing deposits 4,169,536 0.37 4,198,194 0.43 3,226,860 1.28 FHLB advances and other borrowings 557,798 0.92 347,494 1.53 314,616 1.73 Subordinated debentures 157,221 4.72 144,475 4.63 51,308 4.74 Total interest-bearing liabilities 4,884,555 0.57 4,690,163 0.64 3,592,784 1.37 Noninterest-bearing liabilities Noninterest-bearing deposits 1,700,523 1,686,088 1,097,646 Other liabilities(1) 139,554 148,269 99,112 Total liabilities 6,724,632 6,524,520 4,789,542 Stockholders' Equity 657,863 639,508 611,162 Total liabilities and stockholders' equity $ 7,382,495 $ 7,164,028 $ 5,400,704 Net interest spread 3.01 % 2.83 % 3.00 % Net interest margin 3.18 3.03 3.40 Net interest margin - (tax- equivalent)(2) 3.22 3.07 3.44 Net interest margin excluding PPP loans - (tax- equivalent)(3) 3.15 3.17 3.44 ____________________________
(1) Includes Government National Mortgage Association ("GNMA") repurchase average balances of $59.0 million, $61.9 million, and $27.9 million for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020, 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.
(3) Net interest margin, excluding PPP loans, fully tax equivalent is calculated by removing average PPP loans from average interest earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net interest income.Origin Bancorp, Inc.
Non-GAAP Financial MeasuresAt and for the three months ended March 31,
2021December 31,
2020September 30,
2020June 30,
2020March 31,
2020Calculation of Tangible Common Equity: (Dollars in thousands, except per share amounts, unaudited) Total common stockholders' equity $ 656,355 $ 647,150 $ 627,637 $ 614,781 $ 606,631 Less: goodwill and other intangible assets, net 30,246 30,480 30,717 30,953 31,241 Tangible Common Equity $ 626,109 $ 616,670 $ 596,920 $ 583,828 $ 575,390 Calculation of Tangible Book Value per Common Share: Divided by common shares outstanding at the end of the period 23,488,884 23,506,312 23,506,586 23,501,233 23,475,948 Tangible Book Value per Common Share $ 26.66 $ 26.23 $ 25.39 $ 24.84 $ 24.51 Calculation of PTPP Earnings: Net Income $ 25,513 $ 17,552 $ 13,095 $ 4,957 $ 753 Plus: provision for credit losses 1,412 6,333 13,633 21,403 18,531 Plus: income tax expense 6,009 4,431 3,206 786 (427 ) PTPP Earnings $ 32,934 $ 28,316 $ 29,934 $ 27,146 $ 18,857 Calculation of PTPP ROAA and PTPP ROAE: PTPP Earnings $ 32,934 $ 28,316 $ 29,934 $ 27,146 $ 18,857 Divided by number of days in the quarter 90 92 92 91 91 Multiplied by the number of days in the year 365 366 366 366 366 Annualized PTPP Earnings $ 133,566 $ 112,648 $ 119,085 $ 109,181 $ 75,842 Divided by total average assets $ 7,382,495 $ 7,164,028 $ 6,746,585 $ 6,447,526 $ 5,400,704 PTPP ROAA (annualized) 1.81 % 1.57 % 1.77 % 1.69 % 1.40 % Divided by total average stockholder's equity $ 657,863 $ 639,508 $ 629,533 $ 617,898 $ 611,162 PTPP ROAE (annualized) 20.30 % 17.61 % 18.92 % 17.67 % 12.41 %