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Origin Bancorp, Inc. Reports Earnings for Fourth Quarter and 2020 Full Year
来源: Nasdaq GlobeNewswire / 27 1月 2021 15:15:01 America/Chicago
RUSTON, La., Jan. 27, 2021 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $17.6 million for the quarter ended December 31, 2020. This represents an increase of $4.5 million from the quarter ended September 30, 2020, and an increase of $4.7 million from the quarter ended December 31, 2019. Diluted earnings per share for the quarter ended December 31, 2020, were $0.75, up $0.19 from the linked quarter and up $0.20 from the quarter ended December 31, 2019. Pre-tax pre-provision earnings for the quarter were $28.3 million, a decrease of 5.4% on a linked quarter basis, and a 54.1% increase on a prior year quarter basis, while the efficiency ratio improved to 57.9%, an 867 basis point decrease from the quarter ended December 31, 2019.
Net income for the year ended December 31, 2020, was $36.4 million, representing a decrease of $17.5 million compared to the year ended December 31, 2019, primarily reflecting a year-over-year increase in provision expense, offset by higher net interest income and noninterest income. Diluted earnings per share for the year ended December 31, 2020, was $1.55, representing a decrease of $0.73 from diluted earnings per share of $2.28 for the year ended December 31, 2019.
“I am extremely proud that our employees continue to remain committed to our culture and creating opportunities out of challenges to better serve our customers and communities," said Drake Mills, Chairman, President, and CEO of Origin Bancorp, Inc. “We believe our company has shown amazing resiliency, and we are strategically positioned to build sustainable, long term value for our stakeholders and continue to help the economic recovery across our footprint.”
Financial Highlights
- Net income was $17.6 million for the quarter ended December 31, 2020, achieving a historic high compared to $13.1 million for the linked quarter and $12.8 million for the quarter end December 31, 2019.
- Net interest income also achieved a historic high, reflecting $51.8 million for the quarter ended December 31, 2020, compared to $50.6 million for the linked quarter and $44.1 million for the quarter ended December 31, 2019.
- Diluted earnings per share for the quarter ended December 31, 2020 were $0.75, compared to $0.56 for the linked quarter and $0.55 for the quarter ended December 31, 2019.
- Provision expense was $6.3 million for the quarter ended December 31, 2020, compared to provision expense of $13.6 million for the linked quarter and $2.4 million for the quarter ended December 31, 2019.
- Total LHFI were $5.72 billion at December 31, 2020, an increase of $112.1 million, or 2.0%, from September 30, 2020, and an increase of $1.58 billion, or 38.2%, from December 31, 2019.
- Total deposits at December 31, 2020, were $5.75 billion, a decrease of $184.6 million, or 3.1%, from September 30, 2020, and an increase of $1.52 billion, or 36.0%, from December 31, 2019.
- The Company completed an offering of $80 million in aggregate principal amount of subordinated notes due 2030 in October 2020. The notes qualify as Tier 2 capital for the Company and approximately $51.0 million was contributed to the Bank and qualifies as Tier 1 capital for regulatory capital purposes for Origin Bank.
Coronavirus (COVID-19)
Origin has continued to meet customers' needs while keeping the safety and well-being of the Company's employees and customers as its top priority. The Company implemented a COVID-19 hotline and a temporary pandemic Paid Time Off policy to assist employees. The Company's offices and all branches remained open with all drive-thrus fully operational. The Company has maintained social distancing measures for its employees working in the Company's offices, including appointment-only restricted lobby access and requiring employees to wear face masks unless working in an office or other location that permits social distancing. The Company has also enhanced its sanitation protocols, implemented return-to-work screening protocols following potential exposures, as well as other measures consistent with applicable federal, state, and local guidelines to promote the safety and health of its employees and customers. To allow for more normalized customer operations, the Company has installed thermal kiosks for temperature checks at the entrance of each location and will evaluate any additional safety protocols to allow unrestricted lobby access in the future, if the circumstances allow.
Credit Quality
The COVID-19 pandemic has continued to have a severe impact on the U.S. economy leading to elevated unemployment levels and a recession. The Company's results for 2020 have been impacted by higher provision expense resulting in an increase in the allowance for credit losses due to the COVID-19 pandemic and the uncertainty surrounding the economic outlook.
The table below includes key credit quality information:
At and for the three months ended December 31,
2020September 30,
2020December 31,
2019Allowance for loan credit losses $ 86,670 $ 81,643 $ 37,520 Classified loans 107,781 100,859 65,117 Total nonperforming LHFI 26,149 30,228 31,146 Provision expense 6,333 13,633 2,377 Net charge-offs 1,757 1,795 2,773 Credit quality ratios: Allowance for loan credit losses to nonperforming LHFI 331.45 % 270.09 % 120.46 % Allowance for loan credit losses to total LHFI 1.51 1.45 0.91 Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (1) 2.10 2.00 0.96 Nonperforming LHFI to LHFI 0.46 0.54 0.75 Net charge-offs to total average LHFI (annualized) 0.13 0.13 0.26 ____________________________
(1) Please see the Loan Data schedule at the back of this document for additional information.The decrease in provision expense compared to the linked quarter reflects an improvement in forecasted economic conditions. While we are seeing some improvements in economic forecasts, there remains a heightened level of uncertainty, particularly related to the first half of 2021, regarding the economic impact of increasing COVID-19 cases and the deployment of a vaccine. The increase from December 31, 2019, was primarily due to the decline in overall economic conditions as a result of the aforementioned uncertainty resulting from the pandemic and the change in accounting methods from incurred loss to expected loss under the implementation of Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL").
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, energy, non-essential retail, restaurants, and assisted living. Excluding PPP loans, at December 31, 2020, the Company had $538.6 million, or 10.4%, of its LHFI invested in these sectors and, while the Company has increased its allowance for loan credit losses related to these sectors, the allowance is a current estimate and may be subject to change. Nonperforming LHFI in these sectors were $5.9 million at December 31, 2020, while past due LHFI, defined as loans 30 days or more past due, as a percentage of LHFI in these sectors, excluding PPP loans, was 1.0% at December 31, 2020. Loans in COVID-19 related forbearance totaled $97.7 million and represented 1.9% of LHFI, excluding PPP loans, at December 31, 2020. For more information on Origin’s COVID-19 impacted sectors, please see the Investor Presentation furnished to the SEC on January 27, 2021, and on Origin's website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link.
The estimated impact and uncertain outcome of the COVID-19 pandemic led to an increase in classified assets as well as an increase in the allowance for loan credit losses. Classified loans as a percentage of LHFI, excluding PPP loans, and as a percentage of total risk-based capital (at the Origin Bancorp, Inc. level) were 2.08% and 12.88%, respectively, at December 31, 2020, reflecting an increase from 1.57% and 10.67%, respectively, at December 31, 2019.
Results of Operations for the Three Months Ended December 31, 2020
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended December 31, 2020, was $51.8 million, an increase of $1.2 million, or 2.4%, compared to the linked quarter. The increase was primarily due to a $1.5 million increase in income from mortgage warehouse lines of credit coupled with a $1.1 million reduction in total interest-bearing deposit expenses, offset by a $1.4 million decrease in interest earned on commercial and industrial loans and a $761,000 increase in subordinated debenture interest expense during the current quarter compared to the linked quarter.
Interest income on mortgage warehouse lines of credit increased by $1.5 million during the quarter ended December 31, 2020, compared to the linked quarter due to higher mortgage activity driven by the continued low interest rate environment, coupled with additional mortgage warehouse clients being onboarded and funding loans during 2020. Interest income earned on commercial and industrial loans, excluding PPP loans, decreased by $1.4 million during the quarter ended December 31, 2020, compared to the linked quarter due to a combination of the impact of lower interest rates and lower average balances, which contributed $883,000 and $478,000, respectively, to the decrease.
Interest-bearing deposit expense was $4.6 million during the current quarter, compared to $5.7 million for the quarter ended September 30, 2020, primarily due to a reduction in deposit rates. The average rate on savings and interest-bearing transaction accounts was 0.29% for the current quarter, down from 0.39% for the linked quarter, accounting for $900,000 of the decrease in interest expense from the linked quarter. The average rate on time deposits decreased to 1.20% for the current quarter, down from 1.50% for the linked quarter, providing an additional decrease of $511,000 in interest expense. These two interest expense declines were offset by a $496,000 increase in interest expense due to an increase in the average balances of savings and interest-bearing transaction accounts when comparing the December 31, 2020, quarter to the linked quarter.
The fully tax-equivalent net interest margin ("NIM") was 3.07% for the current quarter, an 11 basis point decrease from the linked quarter and a 51 basis point decrease from the quarter ended December 31, 2019. Excluding PPP loans, the fully tax-equivalent NIM was 3.17%, also an 11 basis point decrease from the linked quarter. The yield earned on interest-earning assets was 3.47%, a 17 basis point and a 109 basis point decrease compared to the linked quarter and the quarter ended December 31, 2019, respectively. Excluding PPP loans, the yield earned on interest-earning assets was 3.57%, an 18 basis point decrease compared to the linked quarter. The rate paid on total interest-bearing liabilities for the quarter ended December 31, 2020, was 0.64%, representing a decrease of 11 basis points and 82 basis points compared to the linked quarter and the quarter ended December 31, 2019, respectively. The Company has experienced margin compression since the quarter ended December 31, 2019, primarily caused by decreasing loan yields driven by declining short-term interest rates over the last several quarters.
Noninterest Income
Noninterest income for the quarter ended December 31, 2020, was $15.4 million, a decrease of $2.7 million, or 14.8%, from the linked quarter. The decrease from the linked quarter was primarily driven by a decrease of $2.9 million in mortgage banking revenue.
Mortgage banking revenue decreased primarily due to a $1.6 million decrease in volume-related gains and income and a $1.3 million decrease in hedge effectiveness. Mortgage servicing revenue hedge performance was lower during the quarter ended December 31, 2020, compared to the linked quarter, with only $68,000 net hedge effectiveness during the quarter ended December 31, 2020, compared to $1.4 million in net hedge effectiveness during the quarter ended September 30, 2020. Mortgage banking revenue increased $3.2 million, or 96.3%, from the quarter ended December 31, 2019.
Noninterest Expense
Noninterest expense for the quarter ended December 31, 2020, was $38.9 million, a slight increase of $150,000, compared to the linked quarter. The increase from the linked quarter was largely driven by an increase of $391,000 in professional services expense, which was offset by a decrease of $213,000 in other noninterest expense.
The increase in professional services expense was primarily driven by fees paid to a loan sale advisor who assisted in the sale of a performing loan during the quarter.
The decrease in other noninterest expense was largely due to a litigation accrual of $475,000 that was recorded during the quarter ended September 30, 2020, not recurring in the current quarter.
Financial Condition
Loans
- Total LHFI increased $112.1 million compared to the linked quarter and $1.58 billion compared to December 31, 2019.
- PPP loans, net of deferred fees and costs, totaled $546.5 million at December 31, 2020, and decreased $5.8 million compared to the linked quarter.
- Average LHFI increased $164.0 million, compared to the linked quarter, and $1.29 billion compared to December 31, 2019.
Total LHFI at December 31, 2020, were $5.72 billion, reflecting an increase of 2.0% compared to the linked quarter and an increase of 38.2%, compared to December 31, 2019. The increase in LHFI was primarily driven by an increase in mortgage warehouse lines of credit and PPP loans when compared to December 31, 2019. Mortgage warehouse lines of credit increased by $809.3 million primarily due to increased mortgage activity driven by the continued low interest rate environment, coupled with additional mortgage warehouse clients being onboarded and funding loans during 2020.
Deposits
- Total deposits decreased $184.6 million compared to the linked quarter and increased $1.52 billion compared to December 31, 2019.
- Business depositors drove an increase of $691.0 million compared to the quarter ended December 31, 2019.
- Average brokered deposits for the quarter ended December 31, 2020, increased by $344.2 million over the linked quarter and $489.6 million over the quarter ended December 31, 2019. Brokered deposits at December 31, 2020, decreased by $404.7 million compared to the linked quarter and increased $278.6 million compared to December 31, 2019.
- Average total deposits for the quarter ended December 31, 2020, increased by $508.7 million over the linked quarter and $1.68 billion over the quarter ended December 31, 2019.
Total deposits at December 31, 2020, were $5.75 billion, reflecting a decrease of 3.1% compared to the linked quarter and an increase of 36.0% compared to December 31, 2019. Brokered deposits declined by $404.7 million, offset by increases in interest-bearing demand and money market deposits of $145.7 million and $88.6 million, respectively, compared to the linked quarter. The Company has used noncore funding sources, including brokered deposits, to support the increase in mortgage warehouse lines of credit during 2020. In December 2020, due to changing rates on noncore funding options, the Company shifted some noncore funding from brokered deposits to FHLB advances, which has caused a decline in brokered deposit balances at December 31, 2020, when compared to September 30, 2020. Also, the Company was able to increase other deposits which contributed to the reduction in brokered deposits at December 31, 2020. Increases of $529.9 million, $512.9 million and $278.6 million in noninterest-bearing, money market and brokered deposits, respectively, drove the increase in total deposits compared to December 31, 2019, partially due to depositors moving into a statistically higher percentage of personal savings rates.
For the quarter ended December 31, 2020, average noninterest-bearing deposits as a percentage of total average deposits was 28.7%, compared to 30.4% for the quarter ended September 30, 2020, and 27.4% for the quarter ended December 31, 2019.
Borrowings
- Average FHLB advances and other borrowings for the quarter ended December 31, 2020, decreased by $193.7 million, compared to the quarter ended September 30, 2020, and decreased by $3.0 million over the quarter ended December 31, 2019.
- Average subordinated debentures increased $65.9 million for the quarter ended December 31, 2020, compared to the linked quarter and $134.8 million compared to the quarter ended December 31, 2019.
Average FHLB advances and other borrowings decreased 36.4% for the quarter ended December 31, 2020, compared to the quarter ended September 30, 2020, and decreased 0.9% compared to the quarter ended December 31, 2019. During the quarter ended September 30, 2020, the Company repaid $319.3 million of advances under the Federal Reserve's PPP Lending Facility which caused a decrease in average borrowings of $209.3 million during the quarter ended December 31, 2020.
In October 2020, the Company completed of an offering of $80.0 million in aggregate principal amount of 4.50% fixed-to floating rate subordinated notes due 2030. Additionally, in February 2020, Origin Bank completed an offering of $70.0 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030.
Stockholders' equity was $647.2 million at December 31, 2020, an increase of $19.5 million compared to $627.6 million at September 30, 2020, and an increase of $47.9 million compared to $599.3 million at December 31, 2019. The increase from the linked quarter was primarily due to net income for the quarter of $17.6 million. The increase from the December 31, 2019, 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 fourth quarter and 2020 full year results on Thursday, January 28, 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/obnk210128.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, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. 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 continued low interest rates or interest rate cuts 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, without limitation, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and any related future 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; 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 outbreak of the COVID-19 pandemic and the impact of varying governmental responses, including the CARES Act, 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 December 31,
2020September 30,
2020June 30,
2020March 31,
2020December 31,
2019Income statement and share amounts (Dollars in thousands, except per share amounts, unaudited) Net interest income $ 51,819 $ 50,617 $ 46,290 $ 42,810 $ 44,095 Provision for credit losses 6,333 13,633 21,403 18,531 2,377 Noninterest income 15,381 18,051 19,076 12,144 10,818 Noninterest expense 38,884 38,734 38,220 36,097 36,534 Income before income tax expense 21,983 16,301 5,743 326 16,002 Income tax (benefit) expense 4,431 3,206 786 (427 ) 3,175 Net income $ 17,552 $ 13,095 $ 4,957 $ 753 $ 12,827 Pre-tax, pre-provision ("PTPP") earnings (1) $ 28,316 $ 29,934 $ 27,146 $ 18,857 $ 18,379 Basic earnings per common share 0.75 0.56 0.21 0.03 0.55 Diluted earnings per common share 0.75 0.56 0.21 0.03 0.55 Dividends declared per common share 0.10 0.0925 0.0925 0.0925 0.0925 Weighted average common shares outstanding - basic 23,392,684 23,374,496 23,347,744 23,353,601 23,323,292 Weighted average common shares outstanding - diluted 23,543,917 23,500,596 23,466,326 23,530,212 23,529,862 Balance sheet data Total LHFI $ 5,724,773 $ 5,612,666 $ 5,312,194 $ 4,481,185 $ 4,143,195 Total assets 7,628,268 7,101,338 6,643,909 6,049,638 5,324,626 Total deposits 5,751,315 5,935,925 5,372,222 4,556,246 4,228,612 Total stockholders' equity 647,150 627,637 614,781 606,631 599,262 Performance metrics and capital ratios Yield on LHFI 3.89 % 4.02 % 4.09 % 4.85 % 4.95 % Yield on interest earnings assets 3.47 3.64 3.65 4.37 4.56 Cost of interest bearing deposits 0.43 0.61 0.79 1.28 1.44 Cost of total deposits 0.31 0.42 0.54 0.95 1.04 Net interest margin, fully tax equivalent 3.07 3.18 3.09 3.44 3.58 Net interest margin, excluding PPP loans, fully tax equivalent (2) 3.17 3.28 3.15 N/A N/A Return on average stockholders' equity (annualized) 10.92 8.28 3.23 0.50 8.51 Return on average assets (annualized) 0.97 0.77 0.31 0.06 0.97 PTPP return on average stockholders' equity (annualized) (1) 17.61 18.92 17.67 12.41 12.19 PTPP return on average assets (annualized) (1) 1.57 1.77 1.69 1.40 1.38 Efficiency ratio (3) 57.86 56.41 58.47 65.69 66.53 Book value per common share $ 27.53 $ 26.70 $ 26.16 $ 25.84 $ 25.52 Tangible book value per common share (1) 26.23 25.39 24.84 24.51 24.18 Common equity tier 1 to risk-weighted assets (4) 9.96 % 9.93 % 10.35 % 10.86 % 11.74 % Tier 1 capital to risk-weighted assets (4) 10.12 10.09 10.52 11.04 11.94 Total capital to risk-weighted assets (4) 13.80 12.48 12.91 13.38 12.76 Tier 1 leverage ratio (4) 8.62 9.19 9.10 10.71 10.91 ____________________________
(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 15.
(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) December 31, 2020, 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 December 31,
2020September 30,
2020June 30,
2020March 31,
2020December 31,
2019Interest and dividend income (Dollars in thousands, except per share amounts, unaudited) Interest and fees on loans $ 54,193 $ 54,150 $ 50,722 $ 50,049 $ 52,331 Investment securities-taxable 3,154 2,704 2,732 2,712 2,640 Investment securities-nontaxable 1,708 1,571 1,391 758 772 Interest and dividend income on assets held in other financial institutions 367 375 619 1,497 976 Total interest and dividend income 59,422 58,800 55,464 55,016 56,719 Interest expense Interest-bearing deposits 4,582 5,698 6,620 10,250 11,056 FHLB advances and other borrowings 1,339 1,564 1,641 1,351 1,428 Junior subordinated debentures 1,682 921 913 605 140 Total interest expense 7,603 8,183 9,174 12,206 12,624 Net interest income 51,819 50,617 46,290 42,810 44,095 Provision for credit losses 6,333 13,633 21,403 18,531 2,377 Net interest income after provision for credit losses 45,486 36,984 24,887 24,279 41,718 Noninterest income Service charges and fees 3,420 3,268 2,990 3,320 3,488 Mortgage banking revenue 6,594 9,523 10,717 2,769 3,359 Insurance commission and fee income 2,732 3,218 3,109 3,687 2,428 Gain on sales of securities, net 225 301 — 54 — (Loss) on sales and disposals of other assets, net (33 ) (247 ) (908 ) (25 ) (38 ) Limited partnership investment income (loss) 368 130 9 (429 ) (267 ) Swap fee income 233 110 1,527 676 151 Other fee income 604 576 607 466 440 Other income 1,238 1,172 1,025 1,626 1,257 Total noninterest income 15,381 18,051 19,076 12,144 10,818 Origin Bancorp, Inc.
Consolidated Quarterly Statements of IncomeThree months ended December 31,
2020September 30,
2020June 30,
2020March 31,
2020December 31,
2019(Dollars in thousands, except per share amounts, unaudited) Noninterest expense Salaries and employee benefits 22,475 22,597 24,045 21,988 22,074 Occupancy and equipment, net 4,271 4,263 4,267 4,221 4,241 Data processing 2,178 2,065 2,075 2,003 1,801 Electronic banking 942 954 890 900 936 Communications 449 422 419 477 454 Advertising and marketing 1,108 1,281 610 711 991 Professional services 1,176 785 843 1,171 878 Regulatory assessments 1,135 1,310 766 615 679 Loan related expenses 1,856 1,809 1,509 1,142 1,400 Office and operations 1,472 1,367 1,344 1,441 1,632 Intangible asset amortization 237 237 287 299 302 Franchise tax expense 665 511 514 496 496 Other expenses 920 1,133 651 633 650 Total noninterest expense 38,884 38,734 38,220 36,097 36,534 Income before income tax expense 21,983 16,301 5,743 326 16,002 Income tax expense (benefit) 4,431 3,206 786 (427 ) 3,175 Net income $ 17,552 $ 13,095 $ 4,957 $ 753 $ 12,827 Basic earnings per common share $ 0.75 $ 0.56 $ 0.21 $ 0.03 $ 0.55 Diluted earnings per common share 0.75 0.56 0.21 0.03 0.55 Origin Bancorp, Inc.
Selected Annual Financial DataYear Ended December 31, (Dollars in thousands, except per share amounts) 2020 2019 Income statement and share amounts (Unaudited) Net interest income $ 191,536 $ 173,712 Provision for credit losses 59,900 9,568 Noninterest income 64,652 46,478 Noninterest expense 151,935 144,074 Income before income tax expense 44,353 66,548 Income tax expense 7,996 12,666 Net income $ 36,357 $ 53,882 PTPP earnings (1) $ 104,253 $ 76,116 Basic earnings per common share (2) 1.56 2.30 Diluted earnings per common share(2) 1.55 2.28 Dividends declared per common share 0.3775 0.25 Weighted average common shares outstanding - basic 23,367,221 23,470,746 Weighted average common shares outstanding - diluted 23,511,952 23,674,065 Performance metrics Yield on LHFI 4.17 % 5.18 % Yield on interest earning assets 3.75 4.77 Cost of interest bearing deposits 0.75 1.53 Cost of total deposits 0.53 1.12 Net interest margin, fully tax equivalent 3.18 3.69 Net interest margin, excluding PPP loans, fully tax equivalent (3) 3.25 N/A Return on average stockholders' equity 5.82 9.27 Return on average assets 0.56 1.06 PTPP return on average stockholders' equity (1) 16.69 13.10 PTPP return on average assets (1) 1.62 1.49 Efficiency ratio (4) 59.31 65.43 ____________________________
(1) PTPP earnings, PTPP return on average stockholders' equity, and PTPP return on average assets are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, please see page 15.
(2) 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 quarterly earnings per common share may not equal the year-to-date earnings per common share amount.
(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.
(4) 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,
2020September 30,
2020June 30,
2020March 31,
2020December 31,
2019Assets (Unaudited) (Unaudited) (Unaudited) (Unaudited) Cash and due from banks $ 60,544 $ 61,250 $ 57,054 $ 91,104 $ 62,160 Interest-bearing deposits in banks 316,670 160,661 99,282 469,075 229,358 Total cash and cash equivalents 377,214 221,911 156,336 560,179 291,518 Securities: Available for sale 1,004,674 797,260 720,616 601,637 501,070 Held to maturity, net of allowance for credit losses 38,128 38,193 38,287 28,383 28,620 Securities carried at fair value through income 11,554 11,813 11,977 12,242 11,513 Total securities 1,054,356 847,266 770,880 642,262 541,203 Non-marketable equity securities held in other financial institutions 62,586 38,052 41,864 52,267 39,808 Loans held for sale 191,512 155,525 121,541 75,322 64,837 Loans 5,724,773 5,612,666 5,312,194 4,481,185 4,143,195 Less: allowance for loan credit losses 86,670 81,643 70,468 56,063 37,520 Loans, net of allowance for loan credit losses 5,638,103 5,531,023 5,241,726 4,425,122 4,105,675 Premises and equipment, net 81,763 79,254 80,025 80,193 80,457 Mortgage servicing rights 13,660 14,322 15,235 16,122 20,697 Cash surrender value of bank-owned life insurance 37,553 37,332 37,102 36,874 37,961 Goodwill and other intangible assets, net 30,480 30,717 30,953 31,241 31,540 Accrued interest receivable and other assets 141,041 145,936 148,247 130,056 110,930 Total assets $ 7,628,268 $ 7,101,338 $ 6,643,909 $ 6,049,638 $ 5,324,626 Liabilities and Stockholders' Equity Noninterest-bearing deposits $ 1,607,564 $ 1,599,436 $ 1,584,746 $ 1,115,811 $ 1,077,706 Interest-bearing deposits 3,478,985 3,640,587 3,041,859 2,673,881 2,360,096 Time deposits 664,766 695,902 745,617 766,554 790,810 Total deposits 5,751,315 5,935,925 5,372,222 4,556,246 4,228,612 FHLB advances and other borrowings 984,608 360,325 478,260 716,909 417,190 Subordinated debentures 157,181 78,596 78,567 78,539 9,671 Accrued expenses and other liabilities 88,014 98,855 100,079 91,313 69,891 Total liabilities 6,981,118 6,473,701 6,029,128 5,443,007 4,725,364 Stockholders' equity Common stock 117,532 117,533 117,506 117,380 117,405 Additional paid-in capital 237,341 236,679 236,156 235,709 235,623 Retained earnings 266,628 251,427 240,506 237,720 239,901 Accumulated other comprehensive income 25,649 21,998 20,613 15,822 6,333 Total stockholders' equity 647,150 627,637 614,781 606,631 599,262 Total liabilities and stockholders' equity $ 7,628,268 $ 7,101,338 $ 6,643,909 $ 6,049,638 $ 5,324,626 Origin Bancorp, Inc.
Loan DataAt and for the three months ended (Dollars in thousands, unaudited) December 31,
2020September 30,
2020June 30,
2020March 31,
2020December 31,
2019LHFI Commercial real estate $ 1,387,939 $ 1,367,916 $ 1,323,754 $ 1,302,520 $ 1,296,847 Construction/land/land development 531,860 560,857 570,032 563,820 517,688 Residential real estate 885,120 832,055 769,354 703,263 689,555 Total real estate loans 2,804,919 2,760,828 2,663,140 2,569,603 2,504,090 Paycheck Protection Program 546,519 552,329 549,129 — — Commercial and industrial 1,271,343 1,263,279 1,313,405 1,455,497 1,343,475 Mortgage warehouse lines of credit 1,084,001 1,017,501 769,157 437,257 274,659 Consumer 17,991 18,729 17,363 18,828 20,971 Total LHFI 5,724,773 5,612,666 5,312,194 4,481,185 4,143,195 Less: allowance for loan credit losses 86,670 81,643 70,468 56,063 37,520 LHFI, net $ 5,638,103 $ 5,531,023 $ 5,241,726 $ 4,425,122 $ 4,105,675 Nonperforming assets Nonperforming LHFI Commercial real estate $ 3,704 $ 4,669 $ 4,717 $ 11,306 $ 6,994 Construction/land/land development 2,962 2,976 3,726 3,850 4,337 Residential real estate 6,530 8,259 6,713 4,076 5,132 Commercial and industrial 12,897 14,255 14,772 13,619 14,520 Consumer 56 69 119 181 163 Total nonperforming LHFI 26,149 30,228 30,047 33,032 31,146 Nonperforming loans held for sale 681 483 734 840 927 Total nonperforming loans 26,830 30,711 30,781 33,872 32,073 Repossessed assets 1,927 718 4,155 5,296 4,753 Total nonperforming assets $ 28,757 $ 31,429 $ 34,936 $ 39,168 $ 36,826 Classified assets $ 109,708 $ 101,577 $ 100,299 $ 79,980 $ 69,870 Past due LHFI (1) 25,763 29,194 23,751 51,018 29,980 Allowance for loan credit losses Balance at beginning of period $ 81,643 $ 70,468 $ 56,063 $ 37,520 $ 37,126 Impact of adopting ASC 326 — — — 1,248 — Provision for loan credit losses 6,784 12,970 20,878 18,396 3,167 Loans charged off 2,089 2,293 6,587 1,425 3,268 Loan recoveries 332 498 114 324 495 Net charge-offs 1,757 1,795 6,473 1,101 2,773 Balance at end of period $ 86,670 $ 81,643 $ 70,468 $ 56,063 $ 37,520 Origin Bancorp, Inc.
Loan Data - Continued(Unaudited) December 31,
2020September 30,
2020June 30,
2020March 31,
2020December 31,
2019Credit quality ratios Total nonperforming assets to total assets 0.38 % 0.44 % 0.53 % 0.65 % 0.69 % Total nonperforming loans to total loans 0.45 0.53 0.57 0.74 0.76 Nonperforming LHFI to LHFI 0.46 0.54 0.57 0.74 0.75 Past due LHFI to LHFI 0.45 0.52 0.45 1.14 0.72 Allowance for loan credit losses to nonperforming LHFI 331.45 270.09 234.53 169.72 120.46 Allowance for loan credit losses to total LHFI 1.51 1.45 1.33 1.25 0.91 Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (2) 2.10 2.00 1.75 1.37 0.96 Net charge-offs to total average LHFI (annualized) 0.13 0.13 0.53 0.11 0.26 ____________________________
(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 December 31, 2020 September 30, 2020 December 31, 2019 Average Balance Yield/Rate Average Balance Yield/Rate Average Balance Yield/Rate Assets (Dollars in thousands, unaudited) Commercial real estate $ 1,362,025 4.27 % $ 1,344,853 4.29 % $ 1,307,023 5.03 % Construction/land/land development 533,756 4.21 575,080 4.42 526,494 5.20 Residential real estate 853,299 4.25 787,247 4.35 694,436 4.95 Paycheck Protection Program ("PPP") 551,325 2.38 550,377 2.49 — — Commercial and industrial excl. PPP 1,242,018 3.83 1,295,105 4.09 1,356,316 4.88 Mortgage warehouse lines of credit 897,716 3.81 723,876 3.87 262,392 4.47 Consumer 18,575 6.06 18,209 6.27 20,889 6.68 LHFI 5,458,714 3.89 5,294,747 4.02 4,167,550 4.95 Loans held for sale 114,196 2.74 88,811 2.79 42,873 2.63 Loans receivable 5,572,910 3.87 5,383,558 4.00 4,210,423 4.93 Investment securities-taxable 662,527 1.90 539,993 2.00 437,626 2.41 Investment securities-nontaxable 291,702 2.34 252,304 2.49 100,705 3.07 Non-marketable equity securities held in other financial institutions 39,763 1.99 39,229 2.53 48,669 2.88 Interest-bearing balances due from banks 236,772 0.28 204,288 0.24 139,508 1.77 Total interest-earning assets 6,803,674 3.47 % 6,419,372 3.64 % 4,936,931 4.56 % Noninterest-earning assets(1) 360,354 327,213 335,048 Total assets $ 7,164,028 $ 6,746,585 $ 5,271,979 Liabilities and Stockholders' Equity Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 3,520,543 0.29 % $ 3,011,389 0.39 % $ 2,248,863 1.21 % Time deposits 677,651 1.20 730,705 1.50 803,344 2.08 Total interest-bearing deposits 4,198,194 0.43 3,742,094 0.61 3,052,207 1.44 FHLB advances and other borrowings 339,027 1.57 532,689 1.17 342,000 1.62 Securities sold under agreements to repurchase 8,467 0.09 10,506 0.10 18,198 0.65 Subordinated debentures 144,475 4.66 78,585 4.69 9,668 5.67 Total interest-bearing liabilities 4,690,163 0.64 % 4,363,874 0.75 % 3,422,073 1.46 % Noninterest-bearing liabilities Noninterest-bearing deposits 1,686,088 1,633,510 1,150,381 Other liabilities(1) 148,269 119,668 101,600 Total liabilities 6,524,520 6,117,052 4,674,054 Stockholders' Equity 639,508 629,533 597,925 Total liabilities and stockholders' equity $ 7,164,028 $ 6,746,585 $ 5,271,979 Net interest spread 2.83 % 2.89 % 3.10 % Net interest margin 3.03 % 3.14 % 3.54 % Net interest margin - (tax- equivalent)(2) 3.07 % 3.18 % 3.58 % Net interest margin excluding PPP loans - (tax- equivalent)(3) 3.17 % 3.28 % N/A ____________________________
(1) Includes Government National Mortgage Association ("GNMA") repurchase average balances of $61.9 million, $31.7 million, and $24.5 million for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. The GNMA repurchase asset and liability are recorded as equal offsetting amounts in the consolidated balance sheets, with the asset included in Loans held for sale and the liability included in FHLB advances and other borrowings.
(2) In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds.
(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 Measures(Dollars in thousands, except per share amounts, unaudited) December 31,
2020September 30,
2020June 30,
2020March 31,
2020December 31,
2019Calculation of Tangible Common Equity: Total common stockholders' equity $ 647,150 $ 627,637 $ 614,781 $ 606,631 $ 599,262 Less: goodwill and other intangible assets, net 30,480 30,717 30,953 31,241 31,540 Tangible Common Equity $ 616,670 $ 596,920 $ 583,828 $ 575,390 $ 567,722 Calculation of Tangible Book Value per Common Share: Divided by common shares outstanding at the end of the period 23,506,312 23,506,586 23,501,233 23,475,948 23,480,945 Tangible Book Value per Common Share $ 26.23 $ 25.39 $ 24.84 $ 24.51 $ 24.18 Calculation of PTPP Earnings: Net Income $ 17,552 $ 13,095 $ 4,957 $ 753 $ 12,827 Plus: provision for credit losses 6,333 13,633 21,403 18,531 2,377 Plus: income tax expense 4,431 3,206 786 (427 ) 3,175 PTPP Earnings $ 28,316 $ 29,934 $ 27,146 $ 18,857 $ 18,379 Calculation of PTPP ROAA and PTPP ROAE: PTPP Earnings $ 28,316 $ 29,934 $ 27,146 $ 18,857 $ 18,379 Divided by number of days in the quarter 92 92 91 91 92 Multiplied by the number of days in the year 366 366 366 366 365 Annualized PTPP Earnings $ 112,648 $ 119,085 $ 109,181 $ 75,842 $ 72,917 Divided by total average assets $ 7,164,028 $ 6,746,585 $ 6,447,526 $ 5,400,704 $ 5,271,979 PTPP ROAA (annualized) 1.57 % 1.77 % 1.69 % 1.40 % 1.38 % Divided by total average stockholder's equity $ 639,508 $ 629,533 $ 617,898 $ 611,162 $ 597,925 PTPP ROAE (annualized) 17.61 % 18.92 % 17.67 % 12.41 % 12.19 % Origin Bancorp, Inc.
Non-GAAP Financial MeasuresYear Ended December 31, (Dollars in thousands, except per share amounts, unaudited) 2020 2019 Calculation of PTPP Earnings: Net Income $ 36,357 $ 53,882 Plus: provision for credit losses 59,900 9,568 Plus: income tax expense 7,996 12,666 PTPP Earnings $ 104,253 $ 76,116 Calculation of PTPP ROAA and PTPP ROAE: PTPP Earnings $ 104,253 $ 76,116 Divided by total average assets $ 6,442,528 $ 5,092,971 PTPP ROAA 1.62 % 1.49 % Divided by total average stockholder's equity $ 624,580 $ 580,945 PTPP ROAE 16.69 % 13.10 %