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Origin Bancorp, Inc. Reports Earnings for Third Quarter 2023
来源: Nasdaq GlobeNewswire / 25 10月 2023 15:15:02 America/Chicago
RUSTON, La., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (NYSE: OBK) (“Origin,” “we,” “our” or the “Company”), the holding company for Origin Bank (the “Bank”), today announced net income of $24.3 million, or $0.79 diluted earnings per share for the quarter ended September 30, 2023, compared to net income of $21.8 million, or $0.70 diluted earnings per share, for the quarter ended June 30, 2023. Adjusted pre-tax, pre-provision (“adjusted PTPP”)(1) earnings were $30.7 million for the quarter ended September 30, 2023.
“Origin reported strong earnings this quarter as our team remained focused on executing on our strategic plan and delivering for our customers and communities,” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “Economic activity remains strong throughout our markets, and our results reflect the continued strength and stability of our company."
(1) Adjusted PTPP earnings is a non-GAAP financial measure, please see the last few pages of this document for a reconciliation of this alternative financial measure to its comparable GAAP measure.
Financial Highlights
- Net income was $24.3 million for the quarter ended September 30, 2023, reflecting an increase of $2.6 million, or 11.7%, compared to the linked quarter. The adjusted net income(1) was $22.0 million for the quarter ended September 30, 2023, reflecting an increase of $616,000, or 2.9%, compared to the linked quarter.
- Diluted earnings per share (“EPS”) was $0.79 for the quarter ended September 30, 2023, reflecting an increase of $0.09, or 12.9%, compared to $0.70 for the linked quarter. The adjusted diluted earnings per share(1) was $0.71 for the quarter ended September 30, 2023, reflecting an increase of $0.02, or 2.9%, compared to $0.69 for the linked quarter.
- During September 2023, we sold $181.9 million of available-for-sale investment securities at a loss of $7.2 million, and used the proceeds to pay down Federal Home Loan Bank (“FHLB”) advances, which negatively impact our basic and diluted EPS by $0.18 for the quarter ended September 30, 2023.
- During September 2023, we recorded a $10.1 million positive valuation adjustment on one of our non-marketable equity securities, which positively impact our basic and diluted EPS by $0.26 for the quarter ended September 30, 2023.
- Loans held for investment (“LHFI”), excluding mortgage warehouse lines of credit, to deposits were 87.0% at September 30, 2023, compared to 83.5% at June 30, 2023. Cash and liquid securities as a percentage of total assets was 11.6% at September 30, 2023, compared to 11.1% at June 30, 2023.
- Book value per common share was $32.32 at September 30, 2023, reflecting a decrease of $0.01, compared to the linked quarter. Tangible book value per common share(1) was $26.78 at September 30, 2023, reflecting an increase of $0.07, or 0.3%, compared to the linked quarter.
- At September 30, 2023, and June 30, 2023, Company level common equity Tier 1 capital to risk-weighted assets was 11.45%, and 11.01%, respectively, the Tier 1 leverage ratio was 10.00% and 9.65%, respectively, and the total capital ratio was 14.60% and 14.11%, respectively. Tangible common equity to tangible assets(1) was 8.66% at September 30, 2023, compared to 8.25% at June 30, 2023.
(1) Adjusted net income, adjusted diluted earnings per share, tangible book value per common share and tangible common equity to tangible assets 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.
Results of Operations for the Three Months Ended September 30, 2023
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended September 30, 2023, was $74.1 million, a decrease of $1.2 million, or 1.5%, compared to the linked quarter, primarily due to a $4.3 million increase in total interest expense, partially offset by a $3.1 million increase in total interest income. Increases in interest rates drove a $7.0 million increase in total deposit interest expense, and higher average interest-bearing deposit balances drove another $2.1 million increase in total deposit interest expense, primarily due to higher average brokered and money market deposit balances. The increase in total deposit interest expense was partially offset by a $4.9 million decrease in total interest expense paid on FHLB advances and other borrowings due to lower average balances during the current quarter compared to the linked quarter. Increases in interest rates on average interest-earning assets drove a $5.4 million increase in total interest income, of which $4.7 million was due to higher interest rates on LHFI. The increase was partially offset by a $2.5 million decrease in interest income on interest-bearing balances due from banks due to lower average balances during the current quarter compared to the linked quarter.
The net purchase accounting amortization totaled $38,000 for the three months ended September 30, 2023, a decrease of $568,000 from a net purchase accounting accretion of $530,000 for the three months ended June 30, 2023.
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. On March 17, 2022, the Federal Reserve began an aggressive campaign to combat inflation with its first target rate range increase to 0.25% to 0.50%. Subsequently, it increased the target range six more times during 2022 and four more times through September 30, 2023, with the most recent and current Federal Funds target rate range being set on July 26, 2023, at 5.25% to 5.50%. By September 30, 2023, the Federal Funds target rate range had increased 500 basis points from March 17, 2022, and in order to remain competitive as market interest rates increased, we increased interest rates paid on our deposits.
The average rate on interest-bearing deposits increased to 3.47% for the quarter ended September 30, 2023, compared to 3.05% for the quarter ended June 30, 2023. The average interest-bearing deposit balances increased $235.5 million to $6.36 billion for the quarter ended September 30, 2023, from $6.12 billion for the linked quarter, of which $204.8 million and $78.5 million, respectively, were driven by higher average brokered and money market deposit balances. The average FHLB advances and other borrowings balance decreased to $230.8 million for the quarter ended September 30, 2023, compared to $606.1 million for the linked quarter, primarily due to the pay down of approximately $700.0 million in excess contingency liquidity during the linked quarter.
The yield on LHFI was 6.35% and 6.18% for the quarter ended September 30, 2023, and June 30, 2023, respectively, and average LHFI balances increased $86.8 million to $7.56 billion for the quarter ended September 30, 2023, compared to $7.47 billion for the linked quarter. The higher yield on LHFI was primarily driven by a $1.4 million increase in interest income earned on commercial real estate loans supported by interest rate increases on the loans during the quarter ended September 30, 2023, compared to the linked quarter.
The fully tax-equivalent net interest margin (“NIM”) was impacted by margin compression as rates on interest-bearing liabilities rose faster than yields on interest-earning assets during the last four quarters. The fully tax-equivalent NIM was 3.14% for the quarter ended September 30, 2023, representing a two and a 54 basis point decrease compared to the linked quarter and the prior year same quarter, respectively. The yield earned on interest-earning assets for the quarter ended September 30, 2023, was 5.69%, an increase of 19 and 146 basis points compared to the linked quarter and the prior year same quarter, respectively. The average rate paid on total interest-bearing liabilities for the quarter ended September 30, 2023, was 3.59%, representing a 29 and a 220 basis point increase compared to the linked quarter and the prior year same quarter, respectively. There was a minimal impact to the fully tax-equivalent NIM as a result of accretion income due to the BT Holdings, Inc. (“BTH”) merger for the current quarter and a two basis points increase for the linked quarter.
During the last few days of the quarter ended September 30, 2023, we made a strategic decision to sell available for sale investment securities with a book value of $181.9 million, and realized a loss of $7.2 million, in order to use the proceeds of $174.7 million to pay down FHLB advances. Due to the timing of this transaction, it had no impact on the fully tax-equivalent NIM for the quarter ended September 30, 2023. While the associated loss resulted in an $0.18 negative impact to diluted EPS for the quarter ended September 30, 2023, the difference between the relatively low yield on securities sold and the higher cost of FHLB advances was an attractive trade-off, with an estimated annualized positive forward impact to fully tax-equivalent NIM of 11 basis points, an estimated annualized forward diluted EPS benefit of approximately $0.11 and an estimated earn-back period of 1.7 years. The estimated metrics above use our annualized third quarter of 2023 net income, excluding non-operating items, plus the estimated annualized tax-effected net interest income using a weighted average tax-effected yield of 3.08% on the securities sold and an interest cost of 5.62% on the FHLB advances paid off.
Credit Quality
The table below includes key credit quality information:
At and For the Three Months Ended Change % Change (Dollars in thousands, unaudited) September 30,
2023June 30,
2023September 30,
2022Linked
QuarterLinked
QuarterPast due LHFI $ 20,347 $ 19,836 $ 10,866 $ 511 2.6 % Allowance for Loan Credit Losses (“ALCL”) 95,177 94,353 83,359 824 0.9 Classified loans 64,021 84,298 69,781 (20,277 ) (24.1 ) Total nonperforming LHFI 31,608 33,609 14,031 (2,001 ) (6.0 ) Provision for credit losses 3,515 4,306 16,942 (791 ) (18.4 ) Net charge-offs 2,686 1,919 1,078 767 40.0 Credit quality ratios(1): ALCL to nonperforming LHFI 301.12 % 280.74 % 594.11 % 2038 bp N/A ALCL to total LHFI 1.26 1.24 1.21 2 bp N/A ALCL to total LHFI, adjusted(2) 1.30 1.32 1.29 -2 bp N/A Nonperforming LHFI to LHFI 0.42 0.44 0.20 -2 bp N/A Net charge-offs to total average LHFI (annualized) 0.14 0.10 0.07 4 bp N/A ___________________________ (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 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. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the ALCL.
We recorded a credit loss provision of $3.5 million during the quarter ended September 30, 2023, compared to $4.3 million recorded during the linked quarter. The decrease is primarily due to an improvement in classified and nonperforming loans during the quarter ended September 30, 2023, compared to June 30, 2023.The ALCL to nonperforming LHFI increased to 301.1% at September 30, 2023, compared to 280.7% at June 30, 2023, driven primarily by a decrease of $2.0 million in our nonperforming LHFI. Nonperforming LHFI to LHFI decreased over the past quarter to 0.42% compared to 0.44% for the linked quarter. Quarterly net charge-offs increased to $2.7 million from $1.9 million for the linked quarter, primarily due to an increase in commercial and industrial charge-offs combined with a decrease in commercial and industrial loan recoveries compared to the linked quarter.
Classified loans decreased $20.3 million, or 24.1%, at September 30, 2023, compared to the linked quarter, and represented 0.85% of LHFI at September 30, 2023, compared to 1.11% at June 30, 2023. The decrease in classified loans was primarily due to payoffs and, to a lesser degree, upgrades in classified loans at September 30, 2023, compared to June 30, 2023.
Noninterest Income
Noninterest income for the quarter ended September 30, 2023, was $18.1 million, an increase of $2.5 million, or 15.9%, from the linked quarter. The increase from the linked quarter was primarily driven by a $10.5 million increase in other noninterest income, which was partially offset by a $7.2 million loss on sales of securities, a $656,000 decrease in limited partnership investment income and a $510,000 decrease in mortgage banking revenue.
The increase in other noninterest income was primarily due to a $10.1 million positive valuation adjustment recorded on one of our non-marketable equity securities, which qualified for the practical expedient under which we carry these securities at cost adjusted for any observable transactions during the period, less any impairment. During the three months ended September 30, 2023, we observed multiple orderly transactions for identical equity securities indicating a price change had occurred and adjusted our basis upwards accordingly.
The loss on sales of securities was due to the sale of available for sale investment securities with a current book value of $181.9 million, which realized a loss on sale of $7.2 million. We used the proceeds from the sale of $174.7 million to pay down FHLB advances. Please see the Net Interest Income and Net Interest Margin section above for more information on this transaction.
The decrease in limited partnership investment income was mainly due to a $628,000 decrease in fair value of investments in one of our limited partnership funds during the current quarter.
Noninterest Expense
Noninterest expense for the quarter ended September 30, 2023, was $58.7 million, slightly decreased from the linked quarter by $224,000, or 0.4%. The decrease from the linked quarter was primarily due to a $377,000 decrease in franchise tax expense, offset by several immaterial changes in noninterest expense line items.
Income Taxes
The effective tax rate was 19.1% during the quarter ended September 30, 2023, compared to 21.5% during the linked quarter primarily due to a decrease in the estimated state tax compared to the linked quarter.
Financial Condition
Loans
- Total LHFI at September 30, 2023, were $7.57 billion, a decrease of $54.6 million, or 0.7%, from $7.62 billion at June 30, 2023, and an increase of $685.4 million, or 10.0%, compared to September 30, 2022.
- Mortgage warehouse lines of credit totaled $286.3 million at September 30, 2023, a decrease of $251.3 million, or 46.7%, compared to the linked quarter.
- Total real estate loans were $5.20 billion at September 30, 2023, an increase of $116.8 million, or 2.3%, from the linked quarter, with construction/land/land development and residential real estate loan growth each contributing $54.5 million of the total real estate loan growth, respectively.
- Total commercial and industrial loans were $2.06 billion at September 30, 2023, an increase of $81.0 million, or 4.1%, compared to the linked quarter.
Securities
- Total securities at September 30, 2023, were $1.31 billion, a decrease of $244.6 million, or 15.8%, compared to the linked quarter and a decrease of $381.4 million, or 22.6%, compared to September 30, 2022.
- The decrease was primarily due to sales, maturities and calls, as well as normal principal payments. During the last few days of the quarter ended September 30, 2023, we made a strategic decision to sell available for sale investment securities with a book value of $181.9 million and realized a loss of $7.2 million, the proceeds of which were used to pay down FHLB advances.
- Accumulated other comprehensive loss, net of taxes, primarily associated with the available for sale (“AFS”) portfolio, was $172.7 million at September 30, 2023, an increase of $19.9 million, or 13.0%, from the linked quarter.
- The weighted average effective duration for the total securities portfolio was 4.49 years as of September 30, 2023, compared to 4.13 years as of June 30, 2023.
Deposits
- Total deposits at September 30, 2023, were $8.37 billion, a decrease of $115.6 million, or 1.4%, compared to the linked quarter, and represented an increase of $597.2 million, or 7.7%, from September 30, 2022.
- The decrease in the current quarter compared to the linked quarter was primarily due to a decrease of $115.0 million in noninterest-bearing deposits. Noninterest-bearing deposits continued to be impacted by the higher interest rate environment, as we saw a continuation of the declining trend in noninterest-bearing deposit balances that began in the fourth quarter of 2022.
- At September 30, 2023, noninterest-bearing deposits as a percentage of total deposits were 24.0%, compared to 25.0% and 34.3% at June 30, 2023, and September 30, 2022, respectively.
- Uninsured/uncollateralized deposits totaled $2.75 billion at September 30, 2023, compared to $2.84 billion at June 30, 2023, representing 32.8% and 33.4% of total deposits at September 30, 2023, and June 30, 2023, respectively.
Borrowings
- FHLB advances and other borrowings at September 30, 2023, were $12.2 million, a decrease of $330.6 million, or 96.4%, compared to the linked quarter and represented a decrease of $438.2 million, or 97.3%, from September 30, 2022.
- During the last few days of the quarter ended September 30, 2023, we made a strategic decision to sell available for sale investment securities to pay down FHLB advances.
Stockholders’ Equity
- Stockholders’ equity was $998.9 million at September 30, 2023, an increase of $1.1 million, or 0.1%, compared to $997.9 million at June 30, 2023, and an increase of $91.9 million, or 10.1%, compared to $907.0 million, at September 30, 2022.
- The increase in stockholders’ equity from the linked quarter is primarily due to net income of $24.3 million, partially offset by an increase in accumulated other comprehensive loss, net of tax, of $19.9 million and dividends declared of $4.7 million during the current quarter.
Conference Call
Origin will hold a conference call to discuss its third quarter 2023 results on Thursday, October 26, 2023, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial +1 (929) 272-1574 (U.S. Local / International 1); +1 (857) 999-3259 (U.S. Local / International 2); +1 (800) 528-1066 (U.S. Toll Free), enter Conference ID: 51465 and request to be joined into the Origin Bancorp, Inc. (OBK) 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://dealroadshow.com/e/ORIGINQ323.
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 60 banking centers located in Dallas/Fort Worth, East Texas, Houston, North Louisiana and Mississippi. For more information, visit www.origin.bank.
Non-GAAP Financial Measures
Origin reports its results in accordance with generally accepted accounting principles in the United States of America ("GAAP"). However, management believes that certain supplemental non-GAAP financial measures may provide meaningful information to investors that is useful in understanding Origin's results of operations and underlying trends in its business. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Origin's reported results prepared in accordance with GAAP. The following are the non-GAAP measures used in this release: adjusted net income, adjusted PTPP earnings, adjusted diluted EPS, NIM-FTE, adjusted, adjusted ROAA, adjusted PTPP ROAA, adjusted ROAE, adjusted PTPP ROAE, tangible book value per common share, adjusted tangible book value per common share, tangible common equity to tangible assets, ROATCE, adjusted ROATCE and adjusted efficiency ratio.
Please see the last few pages of this release for reconciliations of non-GAAP measures to the most directly comparable financial measures calculated in accordance with GAAP.
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 strategies, projected plans and objectives, and any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including 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: potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; the impact of current and future economic conditions generally and in the financial services industry, nationally and within Origin’s primary market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers and changes to customer and client behavior as a result of the foregoing; 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, competition, and the cost of doing business); 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; the impact of 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, as well as from fintech companies; 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; a deterioration of the credit rating for U.S. long-term sovereign debt or actions that the U.S. government may take to avoid exceeding the debt ceiling; 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 and the impact of any replacement alternatives such as the Secured Overnight Financing Rate 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 or the conflict in Israel and surrounding areas, 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; the impact of generative artificial intelligence; fraud or misconduct by internal or external actors, 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. 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 Data
(Unaudited)Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022Income statement and share amounts (Dollars in thousands, except per share amounts) Net interest income $ 74,130 $ 75,291 $ 77,147 $ 84,749 $ 78,523 Provision for credit losses 3,515 4,306 6,197 4,624 16,942 Noninterest income 18,119 15,636 16,384 13,429 13,723 Noninterest expense 58,663 58,887 56,760 57,254 56,241 Income before income tax expense 30,071 27,734 30,574 36,300 19,063 Income tax expense 5,758 5,974 6,272 6,822 2,820 Net income $ 24,313 $ 21,760 $ 24,302 $ 29,478 $ 16,243 Adjusted net income(1) $ 22,004 $ 21,388 $ 24,188 $ 30,409 $ 31,087 Adjusted PTPP earnings(1) 30,663 31,569 36,627 42,103 39,905 Basic earnings per common share 0.79 0.71 0.79 0.96 0.57 Diluted earnings per common share 0.79 0.70 0.79 0.95 0.57 Adjusted diluted earnings per common share(1) 0.71 0.69 0.78 0.99 1.09 Dividends declared per common share 0.15 0.15 0.15 0.15 0.15 Weighted average common shares outstanding - basic 30,856,649 30,791,397 30,742,902 30,674,389 28,298,984 Weighted average common shares outstanding - diluted 30,943,860 30,872,834 30,882,156 30,867,511 28,481,619 Balance sheet data Total LHFI $ 7,568,063 $ 7,622,689 $ 7,375,823 $ 7,090,022 $ 6,882,681 Total assets 9,733,303 10,165,163 10,358,516 9,686,067 9,462,639 Total deposits 8,374,488 8,490,043 8,174,310 7,775,702 7,777,327 Total stockholders’ equity 998,945 997,859 992,587 949,943 907,024 Performance metrics and capital ratios Yield on LHFI 6.35 % 6.18 % 6.03 % 5.63 % 4.94 % Yield on interest-earnings assets 5.69 5.50 5.31 4.96 4.23 Cost of interest-bearing deposits 3.47 3.05 2.49 1.54 0.64 Cost of total deposits 2.61 2.26 1.75 1.02 0.41 NIM - fully tax equivalent ("FTE") 3.14 3.16 3.44 3.81 3.68 NIM - FTE, adjusted(2) 3.14 3.14 3.36 3.73 3.61 Return on average assets (annualized) ("ROAA") 0.96 0.86 1.01 1.23 0.70 Adjusted ROAA (annualized)(1) 0.87 0.84 1.00 1.27 1.34 Adjusted PTPP ROAA (annualized)(1) 1.21 1.24 1.52 1.75 1.72 Return on average stockholders’ equity (annualized) ("ROAE") 9.52 8.76 10.10 12.80 6.86 Adjusted ROAE (annualized)(1) 8.62 8.61 10.05 13.20 13.14 Adjusted PTPP ROAE (annualized)(1) 12.01 12.70 15.22 18.28 16.86 Book value per common share(3) $ 32.32 $ 32.33 $ 32.25 $ 30.90 $ 29.58 Tangible book value per common share (1)(3) 26.78 26.71 26.53 25.09 23.41 Adjusted tangible book value per common share(1) 32.37 31.66 31.03 30.29 29.13 Return on average tangible common equity (annualized) ("ROATCE")(1) 11.48 % 10.62 % 12.34 % 16.00 % 8.03 % Adjusted return on average tangible common equity (annualized) ("adjusted ROATCE")(1) 10.39 10.44 12.29 16.50 15.38 Efficiency ratio(4) 63.59 64.76 60.69 58.32 60.97 Adjusted efficiency ratio(1) 62.71 61.17 58.64 53.06 52.16 Common equity tier 1 to risk-weighted assets(5) 11.45 % 11.01 % 11.08 % 10.93 % 10.51 % Tier 1 capital to risk-weighted assets(5) 11.63 11.19 11.27 11.12 10.70 Total capital to risk-weighted assets(5) 14.60 14.11 14.30 14.23 13.79 Tier 1 leverage ratio(5) 10.00 9.65 9.79 9.66 9.63 __________________________ (1) Adjusted net income, adjusted PTPP earnings, adjusted diluted earnings per common share, adjusted ROAA, adjusted PTPP ROAA, adjusted ROAE, adjusted PTPP ROAE, tangible book value per common share, adjusted tangible book value per common share, ROATCE, adjusted ROATCE and adjusted 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 by removing the net purchase accounting accretion from the net interest income. (3) An increase in accumulated other comprehensive loss negatively impacted total stockholders' equity, tangible common equity, book value and tangible book value per common share primarily due to the movement of the short end of the yield curve 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, 2023, 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 Data
(Unaudited)Nine Months Ended September 30, (Dollars in thousands, except per share amounts) 2023 2022 Income statement and share amounts Net interest income $ 226,568 $ 190,529 Provision for credit losses 14,018 20,067 Noninterest income 50,139 43,845 Noninterest expense 174,310 143,165 Income before income tax expense 88,379 71,142 Income tax expense 18,004 12,905 Net income $ 70,375 $ 58,237 Adjusted net income(1) $ 67,580 $ 74,170 Adjusted PTPP earnings(1) 98,859 96,487 Basic earnings per common share 2.29 2.31 Diluted earnings per common share 2.28 2.30 Adjusted diluted earnings per common share(1) 2.19 2.92 Dividends declared per common share 0.45 0.43 Weighted average common shares outstanding - basic 30,797,399 25,263,681 Weighted average common shares outstanding - diluted 30,903,222 25,366,807 Performance metrics Yield on LHFI 6.19 % 4.47 % Yield on interest-earning assets 5.50 3.66 Cost of interest-bearing deposits 3.03 0.40 Cost of total deposits 2.22 0.27 NIM, FTE 3.24 3.28 NIM - FTE, adjusted(2) 3.21 3.25 ROAA 0.94 0.93 Adjusted ROAA(1) 0.90 1.18 Adjusted PTPP ROAA(1) 1.32 1.54 ROAE 9.45 10.02 Adjusted ROAE(1) 9.08 12.76 Adjusted PTPP ROAE(1) 13.28 16.60 ROATCE(1) 11.47 11.17 Adjusted ROATCE(1) 11.01 14.22 Efficiency ratio(3) 62.99 61.08 Adjusted efficiency ratio(1) 60.81 54.64 ____________________________ (1) Adjusted net income, adjusted PTPP earnings, adjusted diluted earnings per common share, adjusted ROAA, adjusted PTPP ROAA, adjusted ROAE, adjusted PTPP ROAE, ROATCE, adjusted ROATCE and adjusted 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 by removing the net purchase accounting accretion from the net interest income. (3) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. Origin Bancorp, Inc.
Consolidated Quarterly Statements of Income
(Unaudited)Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022Interest and dividend income (Dollars in thousands, except per share amounts) Interest and fees on loans $ 121,204 $ 115,442 $ 106,496 $ 99,178 $ 79,803 Investment securities-taxable 8,194 8,303 8,161 7,765 7,801 Investment securities-nontaxable 1,281 1,283 1,410 2,128 2,151 Interest and dividend income on assets held in other financial institutions 4,772 7,286 4,074 2,225 1,482 Total interest and dividend income 135,451 132,314 120,141 111,296 91,237 Interest expense Interest-bearing deposits 55,599 46,530 34,557 19,820 7,734 FHLB advances and other borrowings 3,207 7,951 5,880 4,208 2,717 Subordinated indebtedness 2,515 2,542 2,557 2,519 2,263 Total interest expense 61,321 57,023 42,994 26,547 12,714 Net interest income 74,130 75,291 77,147 84,749 78,523 Provision for credit losses 3,515 4,306 6,197 4,624 16,942 Net interest income after provision for credit losses 70,615 70,985 70,950 80,125 61,581 Noninterest income Insurance commission and fee income 6,443 6,185 7,011 5,054 5,666 Service charges and fees 4,621 4,722 4,571 4,663 4,734 Mortgage banking revenue (loss) 892 1,402 1,781 1,201 (929 ) Other fee income 944 970 942 1,132 1,162 Swap fee income 366 331 384 292 25 (Loss) gain on sales of securities, net (7,173 ) — 144 — 1,664 Limited partnership investment (loss) income (425 ) 231 66 (230 ) 112 Gain (loss) on sales and disposals of other assets, net 45 (111 ) 63 34 70 Other income 12,406 1,906 1,422 1,283 1,219 Total noninterest income 18,119 15,636 16,384 13,429 13,723 Noninterest expense Salaries and employee benefits 34,624 34,533 33,731 33,339 31,834 Occupancy and equipment, net 6,790 6,578 6,503 5,863 5,399 Data processing 2,775 2,837 2,916 2,868 2,689 Intangible asset amortization 2,264 2,552 2,553 2,554 1,872 Office and operations 2,868 2,716 2,303 2,277 2,121 Professional services 1,409 1,557 1,525 1,145 1,188 Loan-related expenses 1,220 1,256 1,465 1,676 1,599 Advertising and marketing 1,371 1,469 1,456 1,505 1,196 Electronic banking 1,384 1,216 1,009 1,058 1,087 Franchise tax expense 520 897 975 1,017 957 Regulatory assessments 1,913 1,732 951 1,242 877 Communications 390 407 384 434 279 Merger-related expense — — — 1,179 3,614 Other expenses 1,135 1,137 989 1,097 1,529 Total noninterest expense 58,663 58,887 56,760 57,254 56,241 Income before income tax expense 30,071 27,734 30,574 36,300 19,063 Income tax expense 5,758 5,974 6,272 6,822 2,820 Net income $ 24,313 $ 21,760 $ 24,302 $ 29,478 $ 16,243 Basic earnings per common share $ 0.79 $ 0.71 $ 0.79 $ 0.96 $ 0.57 Diluted earnings per common share 0.79 0.70 0.79 0.95 0.57 Origin Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)(Dollars in thousands) September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022Assets Cash and due from banks $ 141,705 $ 127,576 $ 117,309 $ 150,180 $ 118,505 Interest-bearing deposits in banks 163,573 338,414 707,802 208,792 181,965 Total cash and cash equivalents 305,278 465,990 825,111 358,972 300,470 Securities: AFS 1,290,839 1,535,702 1,591,334 1,641,484 1,672,170 Held to maturity, net of allowance for credit losses 10,790 11,234 11,191 11,275 11,285 Securities carried at fair value through income 6,772 6,106 6,413 6,368 6,347 Total securities 1,308,401 1,553,042 1,608,938 1,659,127 1,689,802 Non-marketable equity securities held in other financial institutions 63,842 58,446 77,036 67,378 53,899 Loans held for sale 14,944 15,198 29,143 49,957 59,714 Loans 7,568,063 7,622,689 7,375,823 7,090,022 6,882,681 Less: ALCL 95,177 94,353 92,008 87,161 83,359 Loans, net of ALCL 7,472,886 7,528,336 7,283,815 7,002,861 6,799,322 Premises and equipment, net 111,700 105,501 104,047 100,201 99,291 Mortgage servicing rights 19,189 19,086 18,261 20,824 21,654 Cash surrender value of bank-owned life insurance 39,688 39,467 39,253 39,040 38,885 Goodwill 128,679 128,679 128,679 128,679 136,793 Other intangible assets, net 42,460 44,724 47,277 49,829 52,384 Accrued interest receivable and other assets 226,236 206,694 196,956 209,199 210,425 Total assets $ 9,733,303 $ 10,165,163 $ 10,358,516 $ 9,686,067 $ 9,462,639 Liabilities and Stockholders’ Equity Noninterest-bearing deposits $ 2,008,671 $ 2,123,699 $ 2,247,782 $ 2,482,475 $ 2,667,489 Interest-bearing deposits 4,728,263 4,738,460 4,779,023 4,505,940 4,361,423 Time deposits 1,637,554 1,627,884 1,147,505 787,287 748,415 Total deposits 8,374,488 8,490,043 8,174,310 7,775,702 7,777,327 FHLB advances and other borrowings 12,213 342,861 875,502 639,230 450,456 Subordinated indebtedness 196,825 196,746 201,845 201,765 201,687 Accrued expenses and other liabilities 150,832 137,654 114,272 119,427 126,145 Total liabilities 8,734,358 9,167,304 9,365,929 8,736,124 8,555,615 Stockholders’ equity: Common stock 154,534 154,331 153,904 153,733 153,309 Additional paid-in capital 525,434 524,302 522,124 520,669 518,376 Retained earnings 491,706 472,105 455,040 435,416 410,572 Accumulated other comprehensive loss (172,729 ) (152,879 ) (138,481 ) (159,875 ) (175,233 ) Total stockholders’ equity 998,945 997,859 992,587 949,943 907,024 Total liabilities and stockholders’ equity $ 9,733,303 $ 10,165,163 $ 10,358,516 $ 9,686,067 $ 9,462,639 Origin Bancorp, Inc.
Loan Data
(Unaudited)At and For the Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022LHFI (Dollars in thousands) Owner occupied commercial real estate $ 932,109 $ 915,861 $ 855,887 $ 843,006 $ 800,981 Non-owner occupied commercial real estate 1,503,782 1,512,303 1,529,513 1,461,672 1,373,366 Owner occupied construction/land/land development 252,168 259,984 252,617 265,838 248,602 Non-owner occupied construction/land/land development 824,588 762,255 696,009 679,787 604,709 Residential real estate - single family 1,338,382 1,284,955 1,231,022 1,173,316 1,104,277 Residential real estate - multi-family 349,787 348,703 357,469 304,222 294,905 Total real estate loans 5,200,816 5,084,061 4,922,517 4,727,841 4,426,840 Commercial and industrial 2,058,073 1,977,028 2,091,093 2,051,161 1,967,037 Mortgage warehouse lines of credit 286,293 537,627 337,529 284,867 460,573 Consumer 22,881 23,973 24,684 26,153 28,231 Total LHFI 7,568,063 7,622,689 7,375,823 7,090,022 6,882,681 Less: allowance for loan credit losses ("ALCL") 95,177 94,353 92,008 87,161 83,359 LHFI, net $ 7,472,886 $ 7,528,336 $ 7,283,815 $ 7,002,861 $ 6,799,322 Nonperforming assets Nonperforming LHFI Commercial real estate $ 942 $ 3,510 $ 3,100 $ 526 $ 431 Construction/land/land development 235 183 226 270 366 Residential real estate 13,236 16,345 8,969 7,712 7,641 Commercial and industrial 17,072 13,480 4,730 1,383 5,134 Mortgage warehouse lines of credit — — — — 385 Consumer 123 91 53 49 74 Total nonperforming LHFI 31,608 33,609 17,078 9,940 14,031 Nonperforming loans held for sale — — 4,646 3,933 2,698 Total nonperforming loans 31,608 33,609 21,724 13,873 16,729 Repossessed assets 3,939 908 806 806 1,781 Total nonperforming assets $ 35,547 $ 34,517 $ 22,530 $ 14,679 $ 18,510 Classified assets $ 67,960 $ 85,206 $ 86,975 $ 75,009 $ 71,562 Past due LHFI(1) 20,347 19,836 11,498 10,932 10,866 Allowance for loan credit losses Balance at beginning of period $ 94,353 $ 92,008 $ 87,161 $ 83,359 $ 63,123 Provision for loan credit losses 3,510 4,264 6,158 3,982 15,787 ALCL - BTH merger — — — — 5,527 Loans charged off 3,202 2,751 2,293 2,537 1,628 Loan recoveries 516 832 982 2,357 550 Net charge-offs 2,686 1,919 1,311 180 1,078 Balance at end of period $ 95,177 $ 94,353 $ 92,008 $ 87,161 $ 83,359 Credit quality ratios Total nonperforming assets to total assets 0.37 % 0.34 % 0.22 % 0.15 % 0.20 % Total nonperforming loans to total loans 0.42 0.44 0.29 0.19 0.24 Nonperforming LHFI to LHFI 0.42 0.44 0.23 0.14 0.20 Past due LHFI to LHFI 0.27 0.26 0.16 0.15 0.16 ALCL to nonperforming LHFI 301.12 280.74 538.75 876.87 594.11 ALCL to total LHFI 1.26 1.24 1.25 1.23 1.21 ALCL to total LHFI, adjusted(2) 1.30 1.32 1.30 1.28 1.29 Net charge-offs to total average LHFI (annualized) 0.14 0.10 0.07 0.01 0.07 ____________________________ (1) Past due LHFI are defined as loans 30 days or more past due. (2) The ALCL to total LHFI, adjusted is calculated 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. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the ALCL. Origin Bancorp, Inc.
Average Balances and Yields/Rates
(Unaudited)Three Months Ended September 30, 2023 June 30, 2023 September 30, 2022 Average Balance Yield/Rate Average Balance Yield/Rate Average Balance Yield/Rate Assets (Dollars in thousands) Commercial real estate $ 2,428,969 5.73 % $ 2,406,625 5.56 % $ 2,046,411 4.64 % Construction/land/land development 1,044,180 7.04 972,032 6.70 760,682 5.20 Residential real estate 1,663,291 5.06 1,615,211 4.91 1,249,746 4.36 Commercial and industrial ("C&I") 2,024,675 7.62 2,059,285 7.59 1,816,912 5.64 Mortgage warehouse lines of credit 376,275 7.21 396,348 6.49 491,584 4.53 Consumer 23,704 7.74 24,812 7.26 24,137 6.80 LHFI 7,561,094 6.35 7,474,313 6.18 6,389,472 4.94 Loans held for sale 11,829 5.81 22,504 4.28 29,927 4.12 Loans receivable 7,572,923 6.35 7,496,817 6.18 6,419,399 4.93 Investment securities-taxable 1,310,459 2.48 1,371,361 2.43 1,547,848 2.00 Investment securities-nontaxable 216,700 2.35 220,345 2.33 317,175 2.69 Non-marketable equity securities held in other financial institutions 58,421 6.47 79,143 5.92 73,819 2.10 Interest-bearing balances due from banks 279,383 5.42 476,555 5.15 206,781 2.09 Total interest-earning assets 9,437,886 5.69 9,644,221 5.50 8,565,022 4.23 Noninterest-earning assets(1) 597,678 546,135 637,399 Total assets $ 10,035,564 $ 10,190,356 $ 9,202,421 Liabilities and Stockholders’ Equity Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 4,728,211 3.28 % $ 4,740,963 2.90 % $ 4,157,092 0.66 % Time deposits 1,626,935 4.04 1,378,659 3.56 669,900 0.51 Total interest-bearing deposits 6,355,146 3.47 6,119,622 3.05 4,826,992 0.64 FHLB advances and other borrowings 230,815 5.51 606,148 5.26 538,020 2.00 Subordinated indebtedness 196,792 5.07 200,160 5.09 186,803 4.81 Total interest-bearing liabilities 6,782,753 3.59 6,925,930 3.30 5,551,815 0.91 Noninterest-bearing liabilities Noninterest-bearing deposits 2,088,183 2,139,973 2,582,500 Other liabilities(1) 151,716 127,630 129,354 Total liabilities 9,022,652 9,193,533 8,263,669 Stockholders’ Equity 1,012,912 996,823 938,752 Total liabilities and stockholders’ equity $ 10,035,564 $ 10,190,356 $ 9,202,421 Net interest spread 2.10 % 2.20 % 3.32 % NIM 3.12 3.13 3.64 NIM - FTE(2) 3.14 3.16 3.68 NIM - FTE, adjusted(3) 3.14 3.14 3.61 ____________________________ (1) Includes Government National Mortgage Association (“GNMA”) repurchase average balances of $29.1 million for the three months ended September 30, 2022. There were no GNMA average repurchase balances at either September 30, 2023, or June 30, 2023. 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. During the quarter ended December 31, 2022, the Company entered into a contract to sell the servicing of these GNMA loans to a third party which closed during the quarter ended March 31, 2023. (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 by removing the net purchase accounting accretion from the net interest income. Origin Bancorp, Inc.
Non-GAAP Financial Measures
(Unaudited)At and For the Three Months Ended September 30,
2023June 30,
2023March 31,
2023December 31,
2022September 30,
2022(Dollars in thousands, except per share amounts) Calculation of adjusted net income: Net interest income after provision for credit losses $ 70,615 $ 70,985 $ 70,950 $ 80,125 $ 61,581 Add: CECL provision for non-PCD loans — — — — 14,890 Adjusted net interest income after provision for credit losses 70,615 70,985 70,950 80,125 76,471 Total noninterest income $ 18,119 $ 15,636 $ 16,384 $ 13,429 $ 13,723 Less: GNMA MSR impairment — — — — (1,950 ) Less: (loss) gain on sales of securities, net (7,173 ) — 144 — 1,664 Less: gain on sub-debt repurchase — 471 — — — Less: positive valuation adjustment on non-marketable equity securities 10,096 — — — — Adjusted total noninterest income 15,196 15,165 16,240 13,429 14,009 Total noninterest expense $ 58,663 $ 58,887 $ 56,760 $ 57,254 $ 56,241 Less: merger-related expenses — — — 1,179 3,614 Adjusted total noninterest expense 58,663 58,887 56,760 56,075 52,627 Income tax expense $ 5,758 $ 5,974 $ 6,272 $ 6,822 $ 2,820 Add: income tax expense on adjustment items (614 ) (99 ) (30 ) 248 3,946 Adjusted income tax expense 5,144 5,875 6,242 7,070 6,766 Net income $ 24,313 $ 21,760 $ 24,302 $ 29,478 $ 16,243 Adjusted net income $ 22,004 $ 21,388 $ 24,188 $ 30,409 $ 31,087 Calculation of adjusted PTPP earnings: Provision for credit losses $ 3,515 $ 4,306 $ 6,197 $ 4,624 $ 16,942 Less: CECL provision for non-PCD loans — — — — 14,890 Adjusted provision for credit losses $ 3,515 $ 4,306 $ 6,197 $ 4,624 $ 2,052 Adjusted net income $ 22,004 $ 21,388 $ 24,188 $ 30,409 $ 31,087 Add: adjusted provision for credit losses 3,515 4,306 6,197 4,624 2,052 Add: adjusted income tax expense 5,144 5,875 6,242 7,070 6,766 Adjusted PTPP Earnings $ 30,663 $ 31,569 $ 36,627 $ 42,103 $ 39,905 Calculation of adjusted dilutive EPS: Numerator: Adjusted net income $ 22,004 $ 21,388 $ 24,188 $ 30,409 $ 31,087 Denominator: Weighted average diluted common shares outstanding 30,943,860 30,872,834 30,882,156 30,867,511 28,481,619 Diluted earnings per share $ 0.79 $ 0.70 $ 0.79 $ 0.95 $ 0.57 Adjusted diluted earnings per share 0.71 0.69 0.78 0.99 1.09 Calculation of adjusted ROAA and adjusted ROAE: Adjusted net income $ 22,004 $ 21,388 $ 24,188 $ 30,409 $ 31,087 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 $ 87,298 $ 85,787 $ 98,096 $ 120,644 $ 123,334 Divided by total average assets 10,035,564 10,190,356 9,783,602 9,530,543 9,202,421 ROAA (annualized) 0.96 % 0.86 % 1.01 % 1.23 % 0.70 % Adjusted ROAA (annualized) 0.87 0.84 1.00 1.27 1.34 Divided by total average stockholders' equity $ 1,012,912 $ 996,823 $ 976,044 $ 913,850 $ 938,752 ROAE (annualized) 9.52 % 8.76 % 10.10 % 12.80 % 6.86 % Adjusted ROAE (annualized) 8.62 8.61 10.05 13.20 13.14 Calculation of adjusted PTPP ROAA and adjusted PTPP ROAE: Adjusted PTPP earnings $ 30,663 $ 31,569 $ 36,627 $ 42,103 $ 39,905 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 Adjusted PTPP earnings, annualized $ 121,652 $ 126,623 $ 148,543 $ 167,039 $ 158,319 Divided by total average assets $ 10,035,564 $ 10,190,356 $ 9,783,602 $ 9,530,543 $ 9,202,421 Adjusted PTPP ROAA(annualized) 1.21 % 1.24 % 1.52 % 1.75 % 1.72 % Divided by total average stockholders' equity $ 1,012,912 $ 996,823 $ 976,044 $ 913,850 $ 938,752 Adjusted PTPP ROAE (annualized) 12.01 % 12.70 % 15.22 % 18.28 % 16.86 % Calculation of tangible common equity to tangible common assets, book value per common share and adjusted tangible book value per common share: Total assets $ 9,733,303 $ 10,165,163 $ 10,358,516 $ 9,686,067 $ 9,462,639 Less: goodwill 128,679 128,679 128,679 128,679 136,793 Less: other intangible assets, net 42,460 44,724 47,277 49,829 52,384 Tangible assets 9,562,164 9,991,760 10,182,560 9,507,559 9,273,462 Total common stockholders’ equity $ 998,945 $ 997,859 $ 992,587 $ 949,943 $ 907,024 Less: goodwill 128,679 128,679 128,679 128,679 136,793 Less: other intangible assets, net 42,460 44,724 47,277 49,829 52,384 Tangible common equity 827,806 824,456 816,631 771,435 717,847 Less: accumulated other comprehensive loss (172,729 ) (152,879 ) (138,481 ) (159,875 ) (175,233 ) Adjusted tangible common equity 1,000,535 977,335 955,112 931,310 893,080 Divided by common shares outstanding at the end of the period 30,906,716 30,866,205 30,780,853 30,746,600 30,661,734 Book value per common share $ 32.32 $ 32.33 $ 32.25 $ 30.90 $ 29.58 Tangible book value per common share 26.78 26.71 26.53 25.09 23.41 Adjusted tangible book value per common share 32.37 31.66 31.03 30.29 29.13 Tangible common equity to tangible assets 8.66 % 8.25 % 8.02 % 8.11 % 7.74 % Calculation of ROATCE and adjusted ROATCE: Net income $ 24,313 $ 21,760 $ 24,302 $ 29,478 $ 16,243 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 net income $ 96,459 $ 87,279 $ 98,558 $ 116,951 $ 64,442 Adjusted net income $ 22,004 $ 21,388 $ 24,188 $ 30,409 $ 31,087 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 $ 87,298 $ 85,787 $ 98,096 $ 120,644 $ 123,334 Total average common stockholders’ equity $ 1,012,912 $ 996,823 $ 976,044 $ 913,850 $ 938,752 Less: average goodwill 128,679 128,679 128,679 131,302 95,696 Less: average other intangible assets, net 43,901 46,379 48,950 51,495 40,918 Average tangible common equity 840,332 821,765 798,415 731,053 802,138 ROATCE 11.48 % 10.62 % 12.34 % 16.00 % 8.03 % Adjusted ROATCE 10.39 10.44 12.29 16.50 15.38 Calculation of adjusted efficiency ratio: Total noninterest expense $ 58,663 $ 58,887 $ 56,760 $ 57,254 $ 56,241 Less: insurance and mortgage noninterest expense 8,579 9,156 8,033 8,031 8,479 Less: merger-related expenses — — — 1,179 3,614 Adjusted total noninterest expense 50,084 49,731 48,727 48,044 44,148 Net interest income $ 74,130 $ 75,291 $ 77,147 $ 84,749 $ 78,523 Less: insurance and mortgage net interest income 2,120 1,574 1,493 1,376 1,208 Add: Total noninterest income 18,119 15,636 16,384 13,429 13,723 Less: insurance and mortgage noninterest income 7,335 7,587 8,792 6,255 4,737 Less: positive valuation adjustment on non-marketable equity securities 10,096 — — — — Less: (loss) gain on sale of securities, net (7,173 ) — 144 — 1,664 Less: gain on sub-debt repurchase — 471 — — — Adjusted total revenue 79,871 81,295 83,102 90,547 84,637 Efficiency ratio 63.59 % 64.76 % 60.69 % 58.32 % 60.97 % Adjusted efficiency ratio 62.71 61.17 58.64 53.06 52.16 Origin Bancorp, Inc.
Non-GAAP Financial Measures - Continued
(Unaudited)Nine Months Ended September 30, 2023 2022 (Dollars in thousands, except per share amounts) Calculation of adjusted net income: Net interest income after provision for credit losses $ 212,550 $ 170,462 Add: CECL provision for non-PCD loans — 14,890 Adjusted net interest income after provision for credit losses 212,550 185,352 Total noninterest income $ 50,139 $ 43,845 Less: GNMA MSR impairment — (1,950 ) Less: (loss) gain on sales of securities, net (7,029 ) 1,664 Less: gain on sub-debt repurchase 471 — Less: positive valuation adjustment on non-marketable equity securities 10,096 — Adjusted total noninterest income 46,601 44,131 Total noninterest expense $ 174,310 $ 143,165 Less: merger-related expense — 4,992 Adjusted total noninterest expense 174,310 138,173 Income tax expense $ 18,004 $ 12,905 Add: income tax expense on adjustment items (743 ) 4,235 Adjusted income tax expense 17,261 17,140 Net Income $ 70,375 $ 58,237 Adjusted net income $ 67,580 $ 74,170 Calculation of adjusted PTPP earnings: Provision for credit losses $ 14,018 $ 20,067 Less: CECL provision for non-PCD loans — 14,890 Adjusted provision for credit losses $ 14,018 $ 5,177 Adjusted net income $ 67,580 $ 74,170 Add: provision for credit losses 14,018 5,177 Add: adjusted income tax expense 17,261 17,140 Adjusted PTPP earnings $ 98,859 $ 96,487 Calculation of adjusted dilutive EPS: Numerator: Adjusted net income $ 67,580 $ 74,170 Denominator: Weighted average diluted common shares outstanding 30,903,222 25,366,807 Diluted earnings per share $ 2.28 $ 2.30 Adjusted diluted earnings per share 2.19 2.92 Calculation of adjusted ROAA and adjusted ROAE: Adjusted net income $ 67,580 $ 74,170 Divided by the year-to-date number of days 273 273 Multiplied by number of days in the year 365 365 Annualized adjusted net income $ 90,354 $ 99,165 Divided by total average assets $ 10,004,097 $ 8,401,701 ROAA (annualized) 0.94 % 0.93 % Adjusted ROAA (annualized) 0.90 1.18 Divided by total average stockholders' equity $ 995,395 $ 776,985 ROAE (annualized) 9.45 % 10.02 % Adjusted ROAE (annualized) 9.08 12.76 Calculation of adjusted PTPP ROAA and adjusted PTPP ROAE: Adjusted PTPP Earnings $ 98,859 $ 96,487 Divided by the year-to-date number of days 273 273 Multiplied by number of days in the year 365 365 Annualized adjusted PTPP Earnings $ 132,174 $ 129,003 Divided by total average assets $ 10,004,097 $ 8,401,701 Adjusted PTPP ROAA (annualized) 1.32 % 1.54 % Divided by total average stockholders' equity $ 995,395 $ 776,985 Adjusted PTPP ROAE (annualized) 13.28 % 16.60 % Calculation of ROATCE and adjusted ROATCE: Net income $ 70,375 $ 58,237 Divided by the year-to-date number of days 273 273 Multiplied by number of days in the year 365 365 Annualized net income $ 94,091 $ 77,863 Adjusted net income $ 67,580 $ 74,170 Divided by the year-to-date number of days 273 273 Multiplied by number of days in the year 365 365 Annualized adjusted net income $ 90,354 $ 99,165 Total average common stockholders’ equity $ 995,395 $ 776,985 Less: average goodwill 128,679 54,963 Less: average other intangible assets, net 46,391 24,733 Average tangible common equity 820,325 697,289 ROATCE 11.47 % 11.17 % Adjusted ROATCE 11.01 14.22 Calculation of adjusted efficiency ratio: Total noninterest expense $ 174,310 $ 143,165 Less: insurance and mortgage noninterest expense 25,768 25,502 Less: merger-related expenses — 4,992 Adjusted total noninterest expense 148,542 112,671 Net interest income $ 226,568 $ 190,529 Less: insurance and mortgage net interest income 5,187 3,165 Add: total noninterest income 50,139 43,845 Less: insurance and mortgage noninterest income 23,714 23,336 Less: (loss) gain on sales of securities, net (7,029 ) 1,664 Less: gain on sub-debt repurchase 471 — Less: positive valuation adjustment on non-marketable equity securities 10,096 — Adjusted total revenue 244,268 206,209 Efficiency ratio 62.99 % 61.08 % Adjusted efficiency ratio 60.81 54.64