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Origin Bancorp, Inc. Reports Earnings For Third Quarter 2022
来源: Nasdaq GlobeNewswire / 26 10月 2022 16:10:01 America/New_York
RUSTON, La., Oct. 26, 2022 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (Nasdaq: OBNK) (“Origin” or the “Company”), the holding company for Origin Bank (the “Bank”), today announced net income of $16.2 million, or $0.57 diluted earnings per share for the quarter ended September 30, 2022, compared to $21.3 million, or $0.90 diluted earnings per share, for the quarter ended June 30, 2022, and compared to net income of $27.0 million, or $1.14 diluted earnings per share for the quarter ended September 30, 2021. Adjusted net income(1) for the quarter ended September 30, 2022, was $31.1 million, or $1.09 adjusted diluted earnings per share(1). Pre-tax, pre-provision net income ("PTPP")(1) was $36.0 million.
"This was a significant and exciting quarter for Origin as we showed strong core profitability and completed the merger with BT Holdings,” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “Origin now has meaningful expansion across the I-20 corridor in East Texas and adds impressive depth in Dallas and Fort Worth.”
(1) Adjusted net income, adjusted diluted earnings per share and PTPP are non-GAAP financial measures, please see the last few pages of this document for a reconciliation of these alternative financial measures to their comparable GAAP measures.
Third Quarter Financial Highlights
- On August 1, 2022, the Company completed its previously announced merger with BT Holdings, Inc., (“BTH”). As a result of the merger with BTH, the Company recorded a $14.9 million provision expense for loan credit losses for the Current Expected Credit Loss ("CECL") requirement on non-Purchased Credit Deteriorated ("PCD") loans, along with a $5.5 million allowance for loan credit losses on PCD loans. In total, the Company incurred $18.5 million in merger-related expenses during the quarter ended September 30, 2022, which includes the $14.9 million provision expense for loan credit losses.
- The Company's annualized returns on average assets ("ROA") and average equity ("ROE") were 0.70% and 6.86%, respectively, for the quarter ended September 30, 2022. Additionally, the Company's annualized adjusted returns on average assets ("Adjusted ROA") and adjusted return on average equity ("Adjusted ROE") were 1.34% and 13.14%, respectively, for the quarter ended September 30, 2022.
- Net interest income for the quarter ended September 30, 2022, was $78.5 million, reflecting a $19.0 million, or 32.0% increase, compared to the linked quarter, and a $26.0 million, or 49.5% increase, compared to the prior year quarter.
- The fully tax-equivalent net interest margin (“NIM”) was 3.68% for the quarter ended September 30, 2022, reflecting a 45 basis point increase from the linked quarter and a 66 basis point increase from the quarter ended September 30, 2021. The fully tax-equivalent NIM, excluding the net purchase accounting accretion (“PAA”) from the net interest income for the quarter ended September 30, 2022, was 3.61%.
- Total loans held for investment (“LHFI”) at September 30, 2022, were $6.88 billion. Adjusting for the impact of the BTH merger, and excluding mortgage warehouse lines of credit, loan growth during the quarter was $215.3 million, or 3.5%.
- Provision for credit losses was a net expense of $16.9 million for the quarter ended September 30, 2022, compared to a net expense of $3.5 million and a net benefit of $3.9 million for the linked quarter and the quarter ended September 30, 2021, respectively. The increase was primarily due to the merger with BTH, which required a Day 1 CECL loan provision of $14.9 million.
- The allowance for loan credit losses ("ALCL") to LHFI was 1.21% at September 30, 2022, compared to 1.14% at June 30, 2022. The ALCL to LHFI, adjusted(2) was 1.29% at September 30, 2022, compared to 1.25% at June 30, 2022.
- Total nonperforming LHFI to total LHFI was 0.20% at September 30, 2022, compared to 0.25% at June 30, 2022, and 0.47% at September 30, 2021, reflecting a 20.0% and 57.4% decrease in the ratio when compared to the linked quarter and prior year quarter, respectively. The ALCL to nonperforming LHFI was 594.1% at September 30, 2022, compared to 448.2% and 284.9% at the linked quarter and prior year quarter, respectively.
(2) The ALCL to total LHFI, adjusted, is calculated at September 30, 2022, by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the warehouse loans from the LHFI in the denominator. For the periods prior to September 30, 2022, it is calculated by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the PPP and warehouse loans from the LHFI in the denominator. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the ALCL and PPP loans are fully guaranteed by the Small Business Administration ("SBA").
Results of Operations for the Three Months Ended September 30, 2022
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended September 30, 2022, was $78.5 million, an increase of $19.0 million, or 32.0%, compared to the linked quarter. Purchase accounting accretion on acquired loans was $1.2 million during the current quarter, with remaining purchase accounting net loan discounts totaling $3.9 million at September 30, 2022. Net purchase accounting accretion income on deposits and sub-debt totaled $228,000, bringing the total impact from purchase accounting treatment on net interest income to $1.4 million for the three months ended September 30, 2022. Excluding the net purchase accounting accretion, the increase in net interest income was almost equally due to increases in average interest-earning assets and increases in market interest rates, partially offset by higher interest expense primarily due to rate increases on average savings and interest-bearing deposit balances and borrowings, as explained further in the paragraph below.
The table below presents the estimated loan and deposit accretion and sub-debt amortization schedule resulting from the BTH merger purchase accounting adjustments for the periods shown.
Loan
Accretion
IncomeDeposit
Accretion
IncomeSub-Debt
Amortization
ExpenseTotal Expected
Impact to Net
Interest Income3Q2022 (actual, realized) $ 1,187 $ 238 $ (10 ) $ 1,415 4Q2022 (estimated) $ 1,653 $ 250 $ (15 ) $ 1,888 For the years ending (estimated): 2023 2,023 218 (62 ) 2,179 Thereafter 223 23 (706 ) (460 ) Total remaining purchase accounting adjustment at September 30, 2022 $ 3,899 $ 491 $ (783 ) $ 3,607 The increase in net interest income for the three-month period ended September 30, 2022, was the result of a $25.4 million increase in total interest income partially offset by a $6.4 million increase in interest expense. Increases in market interest rates drove a $13.6 million increase in total interest income, while increases in average interest-earning assets drove an $11.8 million increase in total interest income. The increase in interest expense was primarily due to market rate increases, which drove a $4.2 million increase in interest expense on deposits and a $1.0 million increase in interest expense on FHLB advances and subordinated debt.
The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions. In early 2020, the Federal Reserve lowered the target rate range to 0.00% to 0.25%. These rates remained in effect throughout all of 2021. On March 17, 2022, the target rate range was increased to 0.25% to 0.50%, then subsequently increased four more times during 2022, with the most recent and current Federal Funds target rate range being set at September 21, 2022, to 3.00% to 3.25%. At September 30, 2022, the Federal Funds target rate range had increased 300 basis points on a year-to-date basis. Increases in market interest rates contributed $11.6 million to the total increase in interest income earned on total LHFI, while market interest rates increased our total deposit interest expense by $4.2 million during the current quarter compared to the linked quarter.
The yield on LHFI was 4.94% and 4.26% for the three months ended September 30, 2022, and June 30, 2022, respectively, and average LHFI balances increased to $6.39 billion for the quarter ended September 30, 2022, compared to $5.24 billion for the linked quarter. The yield on total investment securities was 2.12% for the three months ended September 30, 2022, compared to 1.85% for the linked quarter. Additionally, the rate on interest-bearing deposits increased to 0.64% for the quarter ended September 30, 2022, compared to 0.29% for the quarter ended June 30, 2022, and average interest-bearing deposit balances increased to $4.83 billion from $4.27 billion for the linked quarter. Average balances of subordinated debentures also increased to $186.8 million for the quarter ended September 30, 2022, compared to $157.5 million for the linked quarter due to subordinated indebtedness assumed in the merger, and reflected a rate of 4.81% for the current quarter compared to 4.64% for the linked quarter.
The fully tax-equivalent NIM was 3.68% for the quarter ended September 30, 2022, a 45 basis point increase and a 66 basis point increase compared to the linked quarter and the prior year quarter, respectively. The yield earned on interest-earning assets for the quarter ended September 30, 2022, was 4.23%, an increase of 70 basis points and an increase of 90 basis points compared to the linked quarter and the prior year quarter, respectively. The rate paid on total deposits for the quarter ended September 30, 2022, was 0.41%, representing a 22 basis point increase from the linked quarter and a 20 basis point increase compared to the prior year quarter. The rate paid on subordinated debentures also increased to 4.81%, reflecting a 17 and an 18 basis point increase compared to the linked quarter and prior year quarter, respectively. The net increase in accretion income due to the BTH merger increased the fully tax-equivalent NIM by approximately seven basis points during the current quarter.
Credit Quality
The table below includes key credit quality information:
At and For the Three Months Ended $ Change % Change (Dollars in thousands) September 30,
2022June 30,
2022Linked
QuarterLinked
QuarterPast due LHFI $ 10,866 $ 7,186 $ 3,680 51.2 % ALCL 83,359 63,123 20,236 32.1 Classified loans 69,781 52,115 17,666 33.9 Total nonperforming LHFI 14,031 14,085 (54 ) (0.4 ) Provision for credit losses 16,942 3,452 13,490 390.8 Net charge-offs 1,078 1,553 (475 ) (30.6 ) Credit quality ratios(1): ALCL to nonperforming LHFI 594.11 % 448.16 % N/A 14595 bp ALCL to total LHFI 1.21 1.14 N/A 7 bp ALCL to total LHFI, adjusted(2) 1.29 1.25 N/A 4 bp Nonperforming LHFI to LHFI 0.20 0.25 N/A -5 bp Net charge-offs to total average LHFI (annualized) 0.07 0.12 N/A -5 bp _____________________________________________________ (1) Please see the Loan Data schedule at the back of this document for additional information. (2) The ALCL to total LHFI, adjusted, is calculated at September 30, 2022, by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the warehouse loans from the LHFI in the denominator. For the periods prior to September 30, 2022, it is calculated by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the PPP and warehouse loans from the LHFI in the denominator. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the ALCL and PPP loans are fully guaranteed by the SBA. The Company recorded a credit loss provision of $16.9 million during the quarter ended September 30, 2022, compared to a credit loss provision of $3.5 million recorded during the linked quarter. The increase is primarily due to the merger with BTH, completed on August 1, 2022, which required a Day 1 CECL loan provision of $14.9 million. The remaining $2.1 million provision for credit losses in excess of the loan credit loss provision recorded in conjunction with the BTH merger was primarily due to a $1.2 million provision expense for off-balance sheet items due to an increase in unfunded loan commitments unrelated to those acquired in the BTH merger.
Overall, absent the impact of the BTH merger and its effect on the following: provision of $14.9 million, classified loans of $17.5 million, past due loans of $3.1 million, and nonperforming LHFI of $3.0 million, most credit metrics improved at September 30, 2022, when compared to the linked quarter. The ALCL to nonperforming LHFI increased to 594.1% at September 30, 2022, compared to 448.2% at June 30, 2022, driven by the $20.2 million increase in the Company’s ALCL for the quarter, which was predominately driven by the BTH merger. Quarterly net charge-offs decreased to $1.1 million from $1.6 million for the linked quarter, decreasing to 0.07% (annualized) to total average LHFI for the quarter ending September 30, 2022, compared to 0.12% (annualized) for the quarter ending June 30, 2022. Also, primarily due to the BTH merger, classified loans increased $17.7 million at September 30, 2022, compared to the linked quarter and represented 1.01% of LHFI, at September 30, 2022, compared to 0.94% at June 30, 2022. The ALCL to total LHFI increased to 1.21% at September 30, 2022, compared to 1.14% at June 30, 2022.
Noninterest Income
Noninterest income for the quarter ended September 30, 2022, was $13.7 million, a decrease of $493,000, or 3.5%, from the linked quarter. The decrease from the linked quarter was primarily driven by decreases of $3.3 million in mortgage banking revenue, offset by an increase of $1.7 million in gain on sales of securities, net.
The $3.3 million decrease in mortgage banking revenue compared to the linked quarter was primarily driven by an 11% reduction in origination volume, a 30% reduction in sales volume and a 45% reduction in sales margin experienced in the current quarter. Also contributing to the decline was a $2.0 million impairment of the GNMA MSR portfolio.
The gain on sales of securities, net, increased $1.7 million when compared to the quarter ended June 30, 2022, due to the sale of primarily legacy BTH securities during the current quarter as a result of investment strategy and liquidity management. The proceeds from the sale were primarily used to pay down our short-term FHLB borrowings.
Noninterest Expense
Noninterest expense for the quarter ended September 30, 2022, was $56.2 million, an increase of $12.1 million compared to the linked quarter. The increase from the linked quarter was primarily driven by increases of $4.5 million, $2.8 million and $1.3 million in salaries and employee benefits expense, merger-related expenses, and intangible asset amortization expense, respectively.
The $4.5 million increase in salaries and employee benefits expense was primarily driven by the addition of 123 full-time equivalent employees due to the BTH merger, which contributed $2.3 million to the total increase. Additionally, incentive accruals increased by $995,000 due to exceeding performance metrics during the period. We made the decision last quarter to implement inflationary raises for a large segment of our employees.
Merger-related expenses associated with the BTH merger were $3.6 million during the current quarter.
The $1.3 million increase in intangible asset amortization expense was due to the core deposit intangible established in conjunction with the BTH merger.
Income Taxes
The effective tax rate was 14.8% during the quarter ended September 30, 2022, compared to 18.4% during the linked quarter and 18.8% during the quarter ended September 30, 2021. The effective tax rate for the quarter ended September 30, 2022, was lower due to tax-exempt items having a larger than proportional effect on the Company's effective income tax rate as income before taxes was lower for the quarter ended September 30, 2022, compared to both the linked quarter and same quarter last year primarily due to merger-related expense during the current quarter.
Financial Condition
Loans
- Total LHFI increased $1.35 billion compared to the linked quarter and $1.70 billion compared to September 30, 2021.
- On August 1, 2022, we acquired $1.24 billion in loans, net of fair value adjustments, from BTH.
- Adjusting for the impact of BTH and excluding mortgage warehouse loans, loan growth during the current quarter totaled $215.3 million, or 3.5%, when compared to the linked quarter.
- Mortgage warehouse lines of credit totaled $460.6 million at September 30, 2022, a decrease of $71.3 million, or 13.4%, compared to the linked quarter and a decrease of $252.8 million, or 35.4%, compared to September 30, 2021.
- Total LHFI at September 30, 2022, were $6.88 billion, reflecting an increase of 24.5% compared to the linked quarter and 32.7% compared to September 30, 2021.
Securities
- Total securities at September 30, 2022, were $1.69 billion, a decrease of $125.5 million, or 6.9%, compared to the linked quarter and an increase of $154.7 million, or 10.1%, compared to September 30, 2021.
- The fair value of acquired BTH securities totaled $456.8 million.
- The Company sold $447.5 million of primarily legacy BTH available for sale ("AFS") securities during the quarter ended September 30, 2022, and used the majority of the funds to pay down short-term Federal Home Loan Bank ("FHLB") advances.
- The steepening of the short end of the yield curve during the year-to-date 2022 period negatively impacted the fair value of the AFS portfolio and caused an accumulated other comprehensive loss of $175.2 million, $59.3 million of which was recorded during the current quarter.
- The total securities portfolio effective duration was 5.2 years as of September 30, 2022, compared to 4.4 years as of June 30, 2022.
Deposits
- Total deposits increased $1.47 billion compared to the linked quarter and increased $1.62 billion compared to September 30, 2021, respectively.
- The merger with BTH reflected the addition of $1.57 billion of deposits, net of fair value adjustments, at August 1, 2022, and contributed $865.9 million in interest-bearing demand, $398.1 million in noninterest-bearing and $302.5 million in time deposits.
- Adjusting for the impact of BTH, deposits decreased $139.7 million during the quarter ended September 30, 2022, compared to June 30, 2022, and grew $4.7 million compared to September 30, 2021. The quarterly decrease was due in large part to one customer moving deposits out of the bank due to a business transaction combined with our strategic decision to allow some non-core funding to leave the bank.
- For both the quarter ended September 30, 2022, and the linked quarter, average noninterest-bearing deposits as a percentage of total average deposits were 34.9% compared to 31.7% for the quarter ended September 30, 2021.
Borrowings
- The Company assumed $37.6 million of subordinated promissory notes ("Notes") from BTH in conjunction with the merger, $10.1 million in repurchase agreements with former BTH depositors and $7.2 million in junior subordinated debt.
- During the quarter ended September 30, 2022, short-term FHLB advances decreased from $600.0 million to $150.0 million. As mentioned above, the Company sold primarily legacy BTH AFS securities during the quarter ended September 30, 2022, and used the majority of the funds to pay down short-term FHLB advances.
Stockholders’ Equity
- Stockholders’ equity was $907.0 million at September 30, 2022, an increase of $260.7 million compared to $646.4 million at June 30, 2022, and an increase of $201.4 million compared to $705.7 million at September 30, 2021.
- The increase in stockholders’ equity is primarily associated with the BTH merger, which drove a $306.3 million increase in stockholders' equity and net income for the quarter of $16.2 million. These increases were partially offset by a $59.3 million other comprehensive loss, net of tax, and dividend during the current quarter of $4.6 million.
- Book value and tangible book value were negatively impacted by an accumulated other comprehensive loss, net of tax, experienced primarily on the Company's AFS securities portfolio of $175.2 million at September 30, 2022, with $59.3 million of the loss recorded during the current quarter.
Conference Call
Origin will hold a conference call to discuss its third quarter 2022 results on Thursday, October 27, 2022, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (888) 437-3179 (U.S. and Canada); and (862) 298-0702 (International), 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://www.webcaster4.com/Webcast/Page/2864/46747.
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
Origin Bancorp, Inc. is a financial holding company headquartered in Ruston, Louisiana. Origin’s wholly owned bank subsidiary, Origin Bank, was founded in 1912 in Choudrant, Louisiana. Deeply rooted in Origin’s history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities it serves. Origin provides a broad range of financial services and currently operates 59 banking centers located from Dallas/Fort Worth, East Texas and Houston, 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 and 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 “assumes,” “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” and 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: 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; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; Origin’s ability to anticipate interest rate changes and manage interest rate risk, (including the impact of higher interest rates on macroeconomic conditions, and customer and client behavior); 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, including the impact of supply-chain disruptions and labor pressures; 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; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; 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 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 transition away from the London Interbank Offered Rate (“LIBOR”) and the impact of any replacement alternatives such as the Secured Overnight Financing Rate (“SOFR”) 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 (including the impacts related to or resulting from Russia's military action in Ukraine, including the imposition of additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, regional or national protests and civil unrest (including any resulting branch closures or property damage), widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond 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 (“SEC”) and any updates to those sections set forth in Origin’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin’s underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin’s behalf may issue. Annualized, pro forma, adjusted, projected, and estimated numbers are used for illustrative purposes only, are not forecasts, and may not reflect actual results.
Contact:
Investor Relations
Chris Reigelman
318-497-3177
chris@origin.bankMedia Contact
Ryan Kilpatrick
318-232-7472
rkilpatrick@origin.bankOrigin Bancorp, Inc.
Selected Quarterly Financial DataThree Months Ended September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Income statement and share amounts (Dollars in thousands, except per share amounts, unaudited) Net interest income $ 78,523 $ 59,504 $ 52,502 $ 54,180 $ 52,541 Provision for credit losses 16,942 3,452 (327 ) (2,647 ) (3,921 ) Noninterest income 13,723 14,216 15,906 16,701 15,923 Noninterest expense 56,241 44,150 42,774 40,346 39,165 Income before income tax expense 19,063 26,118 25,961 33,182 33,220 Income tax expense 2,820 4,807 5,278 4,860 6,242 Net income $ 16,243 $ 21,311 $ 20,683 $ 28,322 $ 26,978 Adjusted net income(1) $ 31,087 $ 21,949 $ 21,134 $ 24,155 $ 26,978 PTPP(1) 36,005 29,570 25,634 30,535 29,299 Basic earnings per common share 0.57 0.90 0.87 1.21 1.15 Diluted earnings per common share 0.57 0.90 0.87 1.20 1.14 Adjusted diluted earnings per common share(1) 1.09 0.92 0.89 1.02 1.14 Dividends declared per common share 0.15 0.15 0.13 0.13 0.13 Weighted average common shares outstanding - basic 28,298,984 23,740,611 23,700,550 23,484,056 23,429,705 Weighted average common shares outstanding - diluted 28,481,619 23,788,164 23,770,791 23,609,874 23,613,010 Balance sheet data Total LHFI $ 6,882,681 $ 5,528,093 $ 5,194,406 $ 5,231,331 $ 5,187,288 Total assets 9,462,639 8,111,524 8,112,295 7,861,285 7,470,478 Total deposits 7,777,327 6,303,158 6,767,179 6,570,693 6,158,768 Total stockholders’ equity 907,024 646,373 676,865 730,211 705,667 Performance metrics and capital ratios Yield on LHFI 4.94 % 4.26 % 4.08 % 4.11 % 4.05 % Yield on interest-earnings assets 4.23 3.53 3.13 3.35 3.33 Cost of interest-bearing deposits 0.64 0.29 0.26 0.28 0.30 Cost of total deposits 0.41 0.19 0.17 0.19 0.21 NIM - fully tax equivalent ("FTE") 3.68 3.23 2.86 3.06 3.02 NIM - FTE, adjusted (2) 3.61 3.20 2.76 2.92 2.94 Return on average assets (annualized) ("ROA") 0.70 1.08 1.04 1.49 1.43 Adjusted ROA (annualized) (1) 1.34 1.11 1.07 1.27 1.43 PTPP ROA (1) 1.55 1.49 1.29 1.60 1.56 Return on average stockholders’ equity (annualized) ("ROE") 6.86 12.81 11.61 15.70 15.21 Adjusted ROE (annualized) (1) 13.14 13.19 11.86 13.39 15.21 PTPP ROE (1) 15.22 17.77 14.39 16.93 16.52 Book value per common share $ 29.58 $ 27.15 $ 28.50 $ 30.75 $ 30.03 Tangible book value per common share (1)(3) 23.41 25.05 26.37 28.59 28.76 Adjusted tangible book value per common share (1) 29.13 29.92 29.15 28.35 28.26 Efficiency ratio (4) 60.97 % 59.89 % 62.53 % 56.92 % 57.21 % Core efficiency ratio(1) 52.16 54.10 58.93 57.25 53.03 Common equity tier 1 to risk-weighted assets (5) 10.51 10.82 11.20 11.20 11.27 Tier 1 capital to risk-weighted assets (5) 10.70 10.96 11.35 11.36 11.42 Total capital to risk-weighted assets (5) 13.98 14.09 14.64 14.77 14.95 Tier 1 leverage ratio (5) 9.63 9.09 8.84 9.20 9.20 _____________________________________________________ (1) Adjusted net income, PTPP earnings, adjusted diluted earnings per common share, adjusted ROA, PTPP ROA, adjusted ROE, PTPP ROE, tangible book value per common share, adjusted tangible book value per common share and core efficiency ratio are either non-GAAP financial measures or use a non-GAAP contributor in the formula. For a reconciliation of these alternative financial measures to their comparable GAAP measures, please see the last few pages of this release. (2) NIM - FTE, adjusted, is a non-GAAP financial measure, and is calculated for the quarter ended September 30, 2022, by removing the net Purchase Accounting ("PAA") accretion from the net interest income. For periods prior to September 30, 2022, it 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) A decline in accumulated other comprehensive loss during the YTD period ended September 30, 2022, negatively impacted total stockholders' equity and tangible common equity and caused tangible book value per common share to decline primarily due to the steepening of the short end of the yield curve that occurred during 2022 and its impact on our investment portfolio. (4) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. (5) September 30, 2022, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board. Origin Bancorp, Inc.
Selected Year-to-Date Financial DataNine Months Ended September 30, (Dollars in thousands, except per share amounts) 2022 2021 Income statement and share amounts (Unaudited) Net interest income $ 190,529 $ 162,072 Provision for credit losses 20,067 (8,118 ) Noninterest income 43,845 45,492 Noninterest expense 143,165 116,433 Income before income tax expense 71,142 99,249 Income tax expense 12,905 19,025 Net income $ 58,237 $ 80,224 Adjusted net income(1) $ 74,170 $ 78,902 PTPP earnings(1) 91,209 91,131 Basic earnings per common share (2) 2.31 3.43 Diluted earnings per common share(2) 2.30 3.40 Adjusted diluted earnings per common share(1) 2.92 3.34 Dividends declared per common share 0.43 0.36 Weighted average common shares outstanding - basic 25,263,681 23,413,794 Weighted average common shares outstanding - diluted 25,366,807 23,606,597 Performance metrics Yield on LHFI 4.47 % 4.03 % Yield on interest-earning assets 3.66 3.45 Cost of interest-bearing deposits 0.40 0.33 Cost of total deposits 0.27 0.23 NIM, FTE 3.28 3.12 NIM - FTE, adjusted (3) 3.25 3.05 ROA (annualized) 0.93 1.44 Adjusted ROA (annualized)(1) 1.18 1.42 PTPP ROA (annualized)(1) 1.45 1.64 ROE (annualized) 10.02 15.81 Adjusted ROE (annualized)(1) 12.76 15.55 PTPP ROE (annualized)(1) 15.69 17.96 Efficiency ratio (4) 61.08 56.09 Core efficiency ratio(1) 54.64 51.46 _____________________________________________________ (1) Adjusted net income, PTPP earnings, adjusted diluted earnings per common share, adjusted ROA, PTPP ROA, adjusted ROE, PTPP ROE, and core efficiency ratio are either non-GAAP financial measures or use a non-GAAP contributor in the formula. For a reconciliation of these alternative financial measures to their comparable GAAP measures, please see the last few pages of this release. (2) Due to the combined impact of the issuance of common stock shares due to the BTH merger on the quarterly average common shares outstanding calculation compared to the impact of the issuance of common stock shares due to the BTH merger 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) NIM - FTE, adjusted, is a non-GAAP financial measure and is calculated for the nine months ended September 30, 2022, by removing the net PAA accretion from the net interest income. For the nine months ended September 30, 2021, it 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 Quarterly Statements of IncomeThree Months Ended September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Interest and dividend income (Dollars in thousands, except per share amounts, unaudited) Interest and fees on loans $ 79,803 $ 55,986 $ 51,183 $ 53,260 $ 53,182 Investment securities-taxable 7,801 7,116 5,113 4,691 3,449 Investment securities-nontaxable 2,151 1,493 1,400 1,493 1,582 Interest and dividend income on assets held in other financial institutions 1,482 1,193 587 686 538 Total interest and dividend income 91,237 65,788 58,283 60,130 58,751 Interest expense Interest-bearing deposits 7,734 3,069 2,886 2,957 3,255 FHLB advances and other borrowings 2,717 1,392 1,094 1,161 1,118 Subordinated debentures 2,263 1,823 1,801 1,832 1,837 Total interest expense 12,714 6,284 5,781 5,950 6,210 Net interest income 78,523 59,504 52,502 54,180 52,541 Provision for credit losses 16,942 3,452 (327 ) (2,647 ) (3,921 ) Net interest income after provision for credit losses 61,581 56,052 52,829 56,827 56,462 Noninterest income Service charges and fees 4,734 4,274 3,998 3,994 3,973 Insurance commission and fee income 5,666 5,693 6,456 2,826 3,451 Mortgage banking (loss) revenue (929 ) 2,354 4,096 2,857 2,728 Other fee income 1,162 638 598 702 783 Gain on sales of securities, net 1,664 — — 75 — Gain (loss) on sales and disposals of other assets, net 70 (279 ) — (97 ) (8 ) Limited partnership investment income (loss) 112 282 (363 ) 50 3,078 Swap fee income (loss) 25 1 139 (285 ) 727 Other income 1,219 1,253 982 6,579 1,191 Total noninterest income 13,723 14,216 15,906 16,701 15,923 Noninterest expense Salaries and employee benefits 31,834 27,310 26,488 24,718 23,629 Occupancy and equipment, net 5,399 4,514 4,427 4,306 4,353 Data processing 2,689 2,413 2,486 2,302 2,329 Office and operations 2,121 2,162 1,560 1,849 1,598 Loan related expenses 1,599 1,517 1,305 1,880 1,949 Professional services 1,188 420 1,060 923 912 Electronic banking 1,087 896 917 616 997 Advertising and marketing 1,196 859 871 1,147 863 Franchise tax expense 957 838 770 692 598 Regulatory assessments 877 802 626 526 664 Intangible asset amortization 1,872 525 537 194 194 Communications 279 252 281 286 359 Merger-related expense 3,614 807 571 — — Other expenses 1,529 835 875 907 720 Total noninterest expense 56,241 44,150 42,774 40,346 39,165 Income before income tax expense 19,063 26,118 25,961 33,182 33,220 Income tax expense 2,820 4,807 5,278 4,860 6,242 Net income $ 16,243 $ 21,311 $ 20,683 $ 28,322 $ 26,978 Basic earnings per common share $ 0.57 $ 0.90 $ 0.87 $ 1.21 $ 1.15 Diluted earnings per common share 0.57 0.90 0.87 1.20 1.14 Origin Bancorp, Inc.
Consolidated Balance Sheets(Dollars in thousands) September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Assets (Unaudited) (Unaudited) (Unaudited) (Unaudited) Cash and due from banks $ 118,505 $ 123,499 $ 129,825 $ 133,334 $ 124,515 Interest-bearing deposits in banks 181,965 200,421 454,619 572,284 227,450 Total cash and cash equivalents 300,470 323,920 584,444 705,618 351,965 Securities: AFS 1,672,170 1,804,370 1,905,687 1,504,728 1,486,543 Held to maturity, net of allowance for credit losses 11,285 4,288 4,831 22,767 37,702 Securities carried at fair value through income 6,347 6,630 7,058 7,497 10,876 Total securities 1,689,802 1,815,288 1,917,576 1,534,992 1,535,121 Non-marketable equity securities held in other financial institutions 53,899 76,822 45,242 45,192 45,144 Loans held for sale 59,714 62,493 80,295 80,387 109,956 Loans 6,882,681 5,528,093 5,194,406 5,231,331 5,187,288 Less: ALCL 83,359 63,123 62,173 64,586 69,947 Loans, net of ALCL 6,799,322 5,464,970 5,132,233 5,166,745 5,117,341 Premises and equipment, net 99,291 81,950 80,421 80,691 80,740 Mortgage servicing rights 21,654 22,127 21,187 16,220 16,000 Cash surrender value of bank-owned life insurance 38,885 38,742 38,547 38,352 38,162 Goodwill 136,793 34,153 34,153 34,368 26,741 Other intangible assets, net 52,384 15,900 16,425 16,962 3,089 Accrued interest receivable and other assets 210,425 175,159 161,772 141,758 146,219 Total assets $ 9,462,639 $ 8,111,524 $ 8,112,295 $ 7,861,285 $ 7,470,478 Liabilities and Stockholders’ Equity Noninterest-bearing deposits $ 2,667,489 $ 2,214,919 $ 2,295,682 $ 2,163,507 $ 1,980,107 Interest-bearing deposits 4,361,423 3,598,417 3,947,714 3,864,058 3,600,654 Time deposits 748,415 489,822 523,783 543,128 578,007 Total deposits 7,777,327 6,303,158 6,767,179 6,570,693 6,158,768 FHLB advances and other borrowings 450,456 894,581 305,560 309,801 309,152 Subordinated debentures 201,687 157,540 157,478 157,417 157,357 Accrued expenses and other liabilities 126,145 109,872 205,213 93,163 139,534 Total liabilities 8,555,615 7,465,151 7,435,430 7,131,074 6,764,811 Stockholders’ equity: Common stock 153,309 119,038 118,744 118,733 117,480 Additional paid-in capital 518,376 244,368 242,789 242,114 237,928 Retained earnings 410,572 398,946 381,222 363,635 338,387 Accumulated other comprehensive (loss) income (175,233 ) (115,979 ) (65,890 ) 5,729 11,872 Total stockholders’ equity 907,024 646,373 676,865 730,211 705,667 Total liabilities and stockholders’ equity $ 9,462,639 $ 8,111,524 $ 8,112,295 $ 7,861,285 $ 7,470,478 Origin Bancorp, Inc.
Loan DataAt and For the Three Months Ended September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021LHFI (Dollars in thousands, unaudited) Commercial real estate $ 2,174,347 $ 1,909,054 $ 1,801,382 $ 1,693,512 $ 1,590,519 Construction/land/land development 853,311 635,556 593,350 530,083 518,920 Residential real estate 1,399,182 1,005,623 922,054 909,739 913,411 Total real estate loans 4,426,840 3,550,233 3,316,786 3,133,334 3,022,850 Commercial and industrial 1,967,037 1,430,239 1,358,597 1,454,235 1,435,203 Mortgage warehouse lines of credit 460,573 531,888 503,249 627,078 713,339 Consumer 28,231 15,733 15,774 16,684 15,896 Total LHFI 6,882,681 5,528,093 5,194,406 5,231,331 5,187,288 Less: allowance for loan credit losses ("ALCL") 83,359 63,123 62,173 64,586 69,947 LHFI, net $ 6,799,322 $ 5,464,970 $ 5,132,233 $ 5,166,745 $ 5,117,341 Nonperforming assets Nonperforming LHFI Commercial real estate $ 431 $ 224 $ 233 $ 512 $ 672 Construction/land/land development 366 373 256 338 592 Residential real estate 7,641 7,478 11,609 11,647 9,377 Commercial and industrial 5,134 5,930 8,987 12,306 13,873 Mortgage warehouse lines of credit 385 — — — — Consumer 74 80 96 100 41 Total nonperforming LHFI 14,031 14,085 21,181 24,903 24,555 Nonperforming loans held for sale 2,698 2,461 2,698 1,754 2,074 Total nonperforming loans 16,729 16,546 23,879 26,657 26,629 Repossessed assets 1,781 2,009 1,703 1,860 4,574 Total nonperforming assets $ 18,510 $ 18,555 $ 25,582 $ 28,517 $ 31,203 Classified assets $ 71,562 $ 54,124 $ 72,082 $ 71,232 $ 80,165 Past due LHFI (1) 10,866 7,186 21,753 25,615 25,954 Allowance for loan credit losses Balance at beginning of period $ 63,123 $ 62,173 $ 64,586 $ 69,947 $ 77,104 Provision for loan credit losses 15,787 2,503 (659 ) (2,668 ) (4,266 ) ALCL - BTH merger 5,527 — — — — Loans charged off 1,628 2,192 2,402 3,162 3,035 Loan recoveries 550 639 648 469 144 Net charge-offs 1,078 1,553 1,754 2,693 2,891 Balance at end of period $ 83,359 $ 63,123 $ 62,173 $ 64,586 $ 69,947 Credit quality ratios (Dollars in thousands, unaudited) Total nonperforming assets to total assets 0.20 % 0.23 % 0.32 % 0.36 % 0.42 % Total nonperforming loans to total loans 0.24 0.30 0.45 0.50 0.50 Nonperforming LHFI to LHFI 0.20 0.25 0.41 0.48 0.47 Past due LHFI to LHFI 0.16 0.13 0.42 0.49 0.50 ALCL to nonperforming LHFI 594.11 448.16 293.53 259.35 284.86 ALCL to total LHFI 1.21 1.14 1.20 1.23 1.35 ALCL to total LHFI, adjusted (2) 1.29 1.25 1.33 1.43 1.63 Net charge-offs to total average LHFI (annualized) 0.07 0.12 0.14 0.21 0.22 _____________________________________________________ (1) Past due LHFI are defined as loans 30 days or more past due. (2) The ALCL to total LHFI, adjusted is calculated at September 30, 2022, by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the warehouse loans from the LHFI in the denominator. For the periods prior to September 30, 2022, it is calculated by excluding the ALCL for warehouse loans from the total LHFI ALCL in the numerator and excluding the PPP and warehouse loans from the LHFI in the denominator. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the ALCL and PPP loans are fully guaranteed by the SBA. Origin Bancorp, Inc.
Average Balances and Yields/RatesThree Months Ended September 30, 2022 June 30, 2022 September 30, 2021 Average
BalanceYield/Rate Average
BalanceYield/Rate Average
BalanceYield/Rate Assets (Dollars in thousands, unaudited) Commercial real estate $ 2,046,411 4.64 % $ 1,828,700 4.17 % $ 1,505,731 4.08 % Construction/land/land development 760,682 5.20 587,872 4.52 527,881 4.10 Residential real estate 1,249,746 4.36 966,363 4.30 936,375 4.14 Commercial and industrial ("C&I") 1,816,912 5.64 1,398,802 4.26 1,492,375 4.14 Mortgage warehouse lines of credit 491,584 4.53 444,851 4.10 660,715 3.58 Consumer 24,137 6.80 15,979 6.03 16,222 5.81 LHFI 6,389,472 4.94 5,242,567 4.26 5,139,299 4.05 Loans held for sale 29,927 4.12 37,678 3.69 72,739 3.85 Loans receivable 6,419,399 4.93 5,280,245 4.25 5,212,038 4.05 Investment securities-taxable 1,547,848 2.00 1,610,400 1.77 853,277 1.60 Investment securities-nontaxable 317,175 2.69 258,178 2.32 280,189 2.24 Non-marketable equity securities held in other financial institutions 73,819 2.10 51,052 4.79 43,725 2.22 Interest-bearing balances due from banks 206,781 2.09 277,800 0.84 610,863 0.19 Total interest-earning assets 8,565,022 4.23 7,477,675 3.53 7,000,092 3.33 Noninterest-earning assets(1) 637,399 467,045 464,721 Total assets $ 9,202,421 $ 7,944,720 $ 7,464,813 Liabilities and Stockholders’ Equity Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 4,157,092 0.66 % $ 3,767,275 0.26 % $ 3,657,625 0.25 % Time deposits 669,900 0.51 503,325 0.49 582,384 0.67 Total interest-bearing deposits 4,826,992 0.64 4,270,600 0.29 4,240,009 0.30 FHLB advances and other borrowings 538,020 2.00 417,121 1.34 263,956 1.68 Subordinated debentures 186,803 4.81 157,517 4.64 157,321 4.63 Total interest-bearing liabilities 5,551,815 0.91 4,845,238 0.52 4,661,286 0.53 Noninterest-bearing liabilities Noninterest-bearing deposits 2,582,500 2,288,732 1,965,843 Other liabilities(1) 129,354 143,427 134,079 Total liabilities 8,263,669 7,277,397 6,761,208 Stockholders’ Equity 938,752 667,323 703,605 Total liabilities and stockholders’ equity $ 9,202,421 $ 7,944,720 $ 7,464,813 Net interest spread 3.32 % 3.01 % 2.80 % NIM 3.64 3.19 2.98 NIM - (FTE)(2) 3.68 3.23 3.02 NIM - FTE, adjusted (3) 3.61 3.20 2.94 _____________________________________________________ (1) Includes Government National Mortgage Association (“GNMA”) repurchase average balances of $29.1 million, $35.8 million, and $51.3 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, 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) NIM - FTE, adjusted, is calculated for the quarter ended September 30, 2022, by removing the net PAA accretion from the net interest income. For periods prior to September 30, 2022, it 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 September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Calculation of PTPP earnings: (Dollars in thousands, except per share amounts, unaudited) Net income $ 16,243 $ 21,311 $ 20,683 $ 28,322 $ 26,978 Plus: provision for credit losses 16,942 3,452 (327 ) (2,647 ) (3,921 ) Plus: income tax expense 2,820 4,807 5,278 4,860 6,242 PTPP Earnings $ 36,005 $ 29,570 $ 25,634 $ 30,535 $ 29,299 Calculation of PTPP ROA and PTPP ROE: PTPP earnings $ 36,005 $ 29,570 $ 25,634 $ 30,535 $ 29,299 Divided by number of days in the quarter 92 91 90 92 92 Multiplied by the number of days in the year 365 365 365 365 365 PTPP earnings, annualized $ 142,846 $ 118,605 $ 103,960 $ 121,144 $ 116,241 Divided by total average assets 9,202,421 7,944,720 8,045,246 7,559,570 7,464,813 PTPP ROA (annualized) 1.55 % 1.49 % 1.29 % 1.60 % 1.56 % Divided by total average stockholder’s equity $ 938,752 $ 667,323 $ 722,504 $ 715,614 $ 703,605 PTPP ROE (annualized) 15.22 % 17.77 % 14.39 % 16.93 % 16.52 % Calculation of core efficiency ratio: Net interest income $ 78,523 $ 59,504 $ 52,502 $ 54,180 $ 52,541 Less: insurance and mortgage net interest income 1,208 1,082 875 946 1,048 Total noninterest income 13,723 14,216 15,906 16,701 15,923 Less: insurance and mortgage noninterest income 4,737 8,047 10,552 5,683 6,179 Less: gain on fair value of the Lincoln Agency — — — 5,200 — Less: gain on sale of securities, net 1,664 — — 75 — Adjusted total revenue $ 84,637 $ 64,591 $ 56,981 $ 58,977 $ 61,237 Total noninterest expense $ 56,241 $ 44,150 $ 42,774 $ 40,346 $ 39,165 Less: insurance and mortgage noninterest expense 8,479 8,397 8,626 6,580 6,688 Less: merger-related expenses 3,614 807 571 — — Adjusted total noninterest expense 44,148 34,946 33,577 33,766 32,477 Efficiency ratio 60.97 % 59.89 % 62.53 % 56.92 % 57.21 % Core efficiency ratio 52.16 54.10 58.93 57.25 53.03 Calculation of tangible book value per common share and adjusted tangible book value per common share: Total common stockholders’ equity $ 907,024 $ 646,373 $ 676,865 $ 730,211 $ 705,667 Less: goodwill 136,793 34,153 34,153 34,368 26,741 Less: other intangible assets, net 52,384 15,900 16,425 16,962 3,089 Tangible common equity 717,847 596,320 626,287 678,881 675,837 Less: accumulated other comprehensive (loss) income (175,233 ) (115,979 ) (65,890 ) 5,729 11,872 Adjusted tangible common equity 893,080 712,299 692,177 673,152 663,965 Divided by common shares outstanding at the end of the period 30,661,734 23,807,677 23,748,748 23,746,502 23,496,058 Tangible book value per common share $ 23.41 $ 25.05 $ 26.37 $ 28.59 $ 28.76 Adjusted tangible book value per common share $ 29.13 $ 29.92 $ 29.15 $ 28.35 $ 28.26 At and For the Three Months Ended September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Calculation of adjusted net income: Net interest income after provision for credit losses $ 61,581 $ 56,052 $ 52,829 $ 56,827 $ 56,462 Add: CECL provision for non-PCD loans 14,890 — — — — Adjusted net interest income after provision for credit losses 76,471 56,052 52,829 56,827 56,462 Total noninterest income 13,723 14,216 15,906 16,701 15,923 Less: GNMA MSR impairment (1,950 ) — — — — Less: gain on sales of securities, net 1,664 — — 75 — Less: Gain on fair value of the Lincoln Agency — — — 5,200 — Adjusted total noninterest income 14,009 14,216 15,906 11,426 15,923 Total noninterest expense 56,241 44,150 42,774 40,346 39,165 Less: merger-related expenses 3,614 807 571 — — Adjusted total noninterest expense 52,627 43,343 42,203 40,346 39,165 Income tax expense 2,820 4,807 5,278 4,860 6,242 Add: income tax expense 3,946 169 120 (1,108 ) — Adjusted income tax expense 6,766 4,976 5,398 3,752 6,242 Adjusted net income $ 31,087 $ 21,949 $ 21,134 $ 24,155 $ 26,978 Calculation of adjusted ROA and adjusted ROE: Adjusted net income $ 31,087 $ 21,949 $ 21,134 $ 24,155 $ 26,978 Divided by number of days in the quarter 92 91 90 92 92 Multiplied by number of days in the year 365 365 365 365 365 Annualized adjusted net income $ 123,334 $ 88,037 $ 85,710 $ 95,832 $ 107,032 Divided by total average assets $ 9,202,421 $ 7,944,720 $ 8,045,246 $ 7,559,570 $ 7,464,813 Adjusted ROA (annualized) 1.34 % 1.11 % 1.07 % 1.27 % 1.43 % Divided by total average stockholders equity $ 938,752 $ 667,323 $ 722,504 $ 715,614 $ 703,605 Adjusted ROE (annualized) 13.14 % 13.19 % 11.86 % 13.39 % 15.21 % Calculation of adjusted EPS and adjusted dilutive EPS: Numerator: Adjusted net income $ 31,087 $ 21,949 $ 21,134 $ 24,155 $ 26,978 Denominator: Weighted average common shares outstanding 28,298,984 23,740,611 23,700,550 23,484,056 23,429,705 Weighted average diluted common shares outstanding 28,481,619 23,788,164 23,770,791 23,609,874 23,613,010 Adjusted basic earnings per share $ 1.10 $ 0.92 $ 0.89 $ 1.03 $ 1.15 Adjusted diluted earnings per share 1.09 0.92 0.89 1.02 1.14 Origin Bancorp, Inc.
Non-GAAP Financial MeasuresNine Months Ended September 30, (Dollars in thousands, except per share amounts, unaudited) 2022 2021 Calculation of PTPP earnings: Net income $ 58,237 $ 80,224 Plus: provision for credit losses 20,067 (8,118 ) Plus: income tax expense 12,905 19,025 PTPP earnings $ 91,209 $ 91,131 Calculation of PTPP ROA and PTPP ROE: PTPP earnings $ 91,209 $ 91,131 Divided by number of days in this period 273 273 Multiplied by the number of days in the year 365 365 PTPP earnings, annualized $ 121,946 $ 121,842 Divided by total average assets $ 8,401,701 $ 7,441,055 PTPP ROA 1.45 % 1.64 % Divided by total average stockholder’s equity $ 776,985 $ 678,223 PTPP ROE 15.69 % 17.96 % Calculation of core efficiency ratio: Net interest income $ 190,529 $ 162,072 Less: insurance and mortgage net interest income 3,165 3,030 Total noninterest income 43,845 45,492 Less: insurance and mortgage noninterest income 23,336 20,342 Less: gain on sale of securities, net 1,664 1,673 Adjusted total revenue $ 206,209 $ 182,519 Total noninterest expense $ 143,165 $ 116,433 Less: insurance and mortgage noninterest expense 25,502 20,904 Less: merger-related expenses 4,992 — Less: other noninterest expense — 1,613 Adjusted total expense $ 112,671 $ 93,916 Efficiency ratio 61.08 % 56.09 % Core efficiency ratio 54.64 % 51.46 % Nine Months Ended September 30, (Dollars in thousands, except per share amounts, unaudited) 2022 2021 Calculation of adjusted net income: Net interest income after provision for credit losses $ 170,462 $ 170,190 Add: CECL provision for non-PCD loans 14,890 — Adjusted net interest income after provision for credit losses 185,352 170,190 Total noninterest income 43,845 45,492 Less: GNMA MSR impairment (1,950 ) — Less: gain on sales of securities, net 1,664 1,673 Adjusted total noninterest income 44,131 43,819 Total noninterest expense 143,165 116,433 Less: merger-related expense 4,992 — Adjusted total noninterest expense 138,173 116,433 Income tax expense 12,905 19,025 Add: income tax expense 4,235 (351 ) Adjusted income tax expense 17,140 18,674 Adjusted net income $ 74,170 $ 78,902 Calculation of adjusted ROA and adjusted ROE: Adjusted net income $ 74,170 $ 78,902 Divided by number of days in the quarter 273 273 Multiplied by number of days in the year 365 365 Annualized adjusted net income $ 99,165 $ 105,492 Divided by total average assets $ 8,401,701 $ 7,441,055 Adjusted ROA (annualized) 1.18 % 1.42 % Divided by total average stockholders equity $ 776,985 $ 678,223 Adjusted ROE (annualized) 12.76 % 15.55 % Calculation of adjusted EPS and Dilutive EPS: Numerator: Adjusted net income $ 74,170 $ 78,902 Denominator: Weighted average common shares outstanding 25,263,681 23,413,794 Weighted average diluted common shares outstanding 25,366,807 23,606,597 Adjusted basic earnings per share $ 2.94 $ 3.37 Adjusted diluted earnings per share 2.92 3.34