Origin Bancorp, Inc. Reports Earnings for Fourth Quarter and 2021 Full Year

Wednesday, 26. January 2022 22:17

RUSTON, La., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (Nasdaq: OBNK) (“Origin” or the “Company”), the holding company for Origin Bank (the “Bank”), today announced record net income of $28.3 million, or $1.20 diluted earnings per share for the quarter ended December 31, 2021, compared to net income of $27.0 million, or $1.14 diluted earnings per share for the quarter ended September 30, 2021, and net income of $17.6 million, or $0.75 diluted earnings per share for the quarter ended December 31, 2020. Pre-tax, pre-provision (“PTPP”) earnings for the quarter were $30.5 million, a 4.2% increase from the quarter ended September 30, 2021, and a 7.8% increase from the fourth quarter of 2020. Net income for the year ended December 31, 2021, was at a record high of $108.5 million, reflecting diluted earnings per share for the year ended December 31, 2021, of $4.60, representing an increase of $3.05, or 196.8%, from diluted earnings per share of $1.55 for the year ended December 31, 2020.

“Origin Bancorp delivered another strong quarter and closed out a very dynamic year,” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “We remain focused on core, organic growth and our team performed well with 23% annualized growth on loans excluding PPP and mortgage warehouse this quarter. We have been and will continue to be purposeful in our strategy and efforts to provide value to our employees, customers, communities, and shareholders.”

Financial Highlights

  • Net income was $28.3 million for the quarter ended December 31, 2021, achieving a historic high compared to $27.0 million for the linked quarter and $17.6 million for the quarter ended December 31, 2020.
  • Total loans held for investment (“LHFI”) at December 31, 2021, excluding PPP and mortgage warehouse lines of credit, were $4.50 billion, reflecting a $241.5 million, or 5.7% increase, compared to the linked quarter, and a $404.2 million, or 9.9% increase compared to December 31, 2020.
  • Total deposits grew $411.9 million, or 6.7%, to $6.57 billion at December 31, 2021, compared to $6.16 billion at September 30, 2021, and increased $819.4 million, or 14.2%, compared to December 31, 2020. Noninterest-bearing deposits grew $183.4 million, or 9.3%, compared to September 30, 2021, and $555.9 million, or 34.6%, compared to December 31, 2020, and represented 32.9% of total deposits at December 31, 2021.
  • Average balances of total securities for the quarter ended December 31, 2021, were $1.50 billion, reflecting a $371.4 million, or 32.8% increase compared to the linked quarter, and a $550.7 million, or 57.7% increase, compared to the quarter ended December 31, 2020. Total securities were $1.53 billion at December 31, 2021, compared to $1.54 billion at September 30, 2021, and increased $480.6 million, or 45.6%, compared to December 31, 2020.
  • Provision for credit losses was a net benefit of $2.6 million for the quarter ended December 31, 2021, compared to a net benefit of $3.9 million for the linked quarter and a provision expense of $6.3 million for the quarter ended December 31, 2020.
  • Annualized returns on average stockholder’s equity and average assets were 15.70% and 1.49%, respectively, for the quarter ended December 31, 2021, compared to 15.21% and 1.43%, respectively for the linked quarter, and 10.92% and 0.97%, respectively, for the quarter ended December 31, 2020.
  • On December 31, 2021, the Company acquired the remaining 62% equity interest in The Lincoln Agency bringing the Company’s total ownership to 100%. Additionally, the Company acquired substantially all assets of the Pulley-White Insurance Agency, Inc. on December 31, 2021, for $2.2 million in cash and $2.2 million in Company common stock.

Results of Operations for the Three Months Ended December 31, 2021

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended December 31, 2021, was $54.2 million, an increase of $1.6 million, or 3.1%, compared to the linked quarter. The increase was primarily due to a $1.2 million increase in interest income earned on total investment securities and a $1.2 million increase in interest income earned on commercial real estate loans, offset by decreases of $873,000 and $577,000 in interest earned on residential real estate loans and mortgage warehouse lines of credit, respectively. The increase in interest income earned on total securities was primarily due to a $371.4 million increase in the average balance of total securities caused by a shift in balance sheet composition. The increase in interest income earned on commercial real estate loans was primarily driven by a $106.3 million increase in the average balance of total commercial real estate loans. The decrease in interest earned on residential real estate loans was primarily due to a decline in interest rates, which contributed $595,000 to the $873,000 decline in interest income on residential real estate loans. The decrease in interest earned on mortgage warehouse lines of credit was caused primarily by a decrease of $82.9 million in average mortgage warehouse lines of credit loan balances, as the outstanding balances of mortgage warehouse lines of credit continued to normalize.

The yield earned on interest-earning assets for the quarter ended December 31, 2021, was 3.35%, an increase of two basis points compared to the linked quarter and a decrease of 12 basis points compared to the quarter ended December 31, 2020. Excluding PPP loans, the yield earned on interest-earning assets was 3.21%, a four basis point decrease compared to the linked quarter. The rate paid on total interest-bearing liabilities for the quarter ended December 31, 2021, was 0.51%, representing a two basis point decrease from the linked quarter, and a 13 basis point decrease compared to the quarter ended December 31, 2020.

The fully tax-equivalent net interest margin (“NIM”) was 3.06% for the quarter ended December 31, 2021, a four basis point increase and a one basis point decrease from the linked quarter and the quarter ended December 31, 2020, respectively. Excluding PPP loans, the fully tax-equivalent NIM was 2.92%, a two basis point decrease and a 25 basis point decrease from the linked quarter and the quarter ended December 31, 2020, respectively. The decrease in fully tax-equivalent NIM, excluding PPP loans, was primarily due to a shift in balance sheet composition as PPP loan balances continued to be forgiven by the Small Business Administration (“SBA”) and mortgage warehouse loan volume continued to normalize, along with the increase in deposits, causing a surge in liquidity which was primarily invested in comparatively lower-yielding securities.

Credit Quality

The table below includes key credit quality information:

 At and for the three months ended $ Change % Change
(Dollars in thousands)December 31,
2021
 September 30,
2021
 December 31,
2020
 Linked
Quarter
 Linked
Quarter
Allowance for loan credit losses$64,586  $69,947  $86,670  $(5,361) (7.7)%
Classified loans 69,372   75,591   107,781   (6,219) (8.2)
Total nonperforming LHFI 24,903   24,555   26,149   348  1.4 
Provision for credit losses (2,647)  (3,921)  6,333   1,274  (32.5)
Net charge-offs 2,693   2,891   1,757   (198) (6.8)
Credit quality ratios:         
Allowance for loan credit losses to nonperforming LHFI 259.35%  284.86%  331.45% N/A -2551 bp
Allowance for loan credit losses to total LHFI 1.23   1.35   1.51  N/A -12 bp
Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (1) 1.43   1.63   2.10  N/A -20 bp
Nonperforming LHFI to LHFI 0.48   0.47   0.46  N/A 1 bp
Net charge-offs to total average LHFI (annualized) 0.21   0.22   0.13  N/A -1 bp

___________________________
(1)   Please see the Loan Data schedule at the back of this document for additional information.

The Company recorded a credit loss provision net benefit of $2.6 million during the quarter ended December 31, 2021, compared to a credit loss provision net benefit of $3.9 million recorded during the linked quarter. The release of credit loss provision reflects the continued improvement in forecasted economic conditions at December 31, 2021, and stable credit loss metrics. While economic forecasts have improved, uncertainty remains due to risks related to the resurgence or lingering effects of COVID-19, rising inflation and labor pressures, as well as continued global supply-chain disruptions.

Credit metrics remained stable for the quarter ended December 31, 2021, compared to the linked quarter. The allowance for loan credit losses to nonperforming LHFI decreased to 259.35% at December 31, 2021, compared to 284.86% at September 30, 2021. The Company’s nonperforming LHFI and quarterly net charge-offs were stable, compared to the linked quarter. Classified loans declined $6.2 million at December 31, 2021, compared to September 30, 2021, and represented 1.35% of LHFI, excluding PPP loans, at December 31, 2021, compared to 1.52% at September 30, 2021.

Noninterest Income

Noninterest income for the quarter ended December 31, 2021, was $16.7 million, an increase of $778,000, or 4.9%, from the linked quarter. The increase from the linked quarter was primarily driven by an increase of $5.4 million in other noninterest income, offset by decreases of $3.0 million, $1.0 million, and $625,000 in limited partnership investment income, swap fee income, and insurance commission and fee income, respectively.

The $5.4 million increase in other noninterest income was primarily due to the Company’s acquisition of the remaining 62% equity interest in The Lincoln Agency. The Company remeasured the previously held equity method investment to its fair value, resulting in recognition of a gain of $5.2 million in other noninterest income. The $3.0 million decrease in limited partnership investment income was primarily due to a $3.1 million valuation increase of the investments in two of the limited partnership funds during the quarter ended September 30, 2021, with no such increase during the current quarter. The $1.0 million decrease in swap fee income was primarily driven by $727,000 in swap commission fees earned on one new swap contract executed during the quarter ended September 30, 2021, combined with an early termination fee incurred during the quarter ended December 31, 2021. To benefit future income, the Company elected to unwind a one-way swap during the quarter ended December 31, 2021, and paid an early termination fee of $296,000. The decrease in insurance commission and fee income was caused by the seasonality of policy renewals.

Noninterest Expense

Noninterest expense for the quarter ended December 31, 2021, was $40.3 million, an increase of $1.2 million, compared to the linked quarter. This increase was primarily driven by an increase of $1.1 million in salaries and employee benefit expenses, primarily due to a $893,000 increase in our incentive compensation bonus during the quarter ended December 31, 2021, primarily due to the growth in loan production.

Income Taxes

The effective tax rate was 14.6% during the quarter ended December 31, 2021, compared to 18.8% during the linked quarter and 20.2% during the quarter ended December 31, 2020. The decline was primarily due the tax impact of the exercise of stock options and vesting of stock awards during the period.

Financial Condition

Loans

  • Total LHFI increased $44.0 million compared to the linked quarter and decreased $493.4 million compared to December 31, 2020.
  • Total LHFI at December 31, 2021, were $4.50 billion, excluding PPP and mortgage warehouse lines of credit, reflecting a $241.5 million, or 5.7% increase, compared to the linked quarter and a $404.2 million, or 9.9% increase, compared to December 31, 2020.
  • PPP loans, net of deferred fees and costs, totaled $105.8 million at December 31, 2021, a decrease of $111.2 million compared to the linked quarter and a decrease of $440.8 million compared to December 31, 2020. Net deferred loan fees and costs on PPP loans were $3.0 million, $6.3 million, and $9.6 million, at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.
  • Mortgage warehouse lines of credit totaled $627.1 million at December 31, 2021, a decrease of $86.3 million compared to the linked quarter and a decrease of $456.9 million compared to December 31, 2020, falling within the expected range of 10% to 12% of total LHFI by year-end 2021.
  • Average LHFI decreased $56.1 million, compared to the linked quarter, and decreased $375.6 million compared to the quarter ended December 31, 2020.
  • Average LHFI, excluding PPP and mortgage warehouse lines of credit, increased $144.0 million, compared to the linked quarter, and increased $333.3 million compared to the quarter ended December 31, 2020.

Total LHFI at December 31, 2021, were $5.23 billion, reflecting an increase of 0.8%, compared to the linked quarter and a decrease of 8.6%, compared to December 31, 2020. The increase in LHFI compared to the linked quarter, was primarily driven by increases in commercial and industrial loans excluding PPP and commercial real estate loans, offset by decreases in PPP loans and mortgage warehouse lines of credit, respectively. PPP outstanding loan balances continued to decline primarily through the SBA’s forgiveness process and outstanding balances of mortgage warehouse lines of credit continued to normalize during the current period.

Securities

  • Total securities remained relatively unchanged compared to the linked quarter and increased $480.6 million, compared to December 31, 2020.
  • Average securities increased $371.4 million, compared to the linked quarter, and increased $550.7 million compared to the quarter ended December 31, 2020.

Total securities at December 31, 2021, were $1.53 billion, decreasing slightly from the linked quarter, and increasing 45.6%, compared to December 31, 2020. The increase in securities during 2021 reflects a shift in balance sheet composition as liquidity surged due to declines in PPP and mortgage warehouse lines of credit loan balances, as a result of the SBA’s forgiveness process and the normalization of mortgage warehouse lines of credit balances, along with the increase in deposits.

Goodwill & Intangibles

On December 31, 2021, the Company acquired the remaining 62% equity interest in The Lincoln Agency for $5.3 million in cash and $5.3 million in Company common stock, bringing the Company’s total ownership to 100%. Additionally, the Company acquired substantially all assets of the Pulley-White Insurance Agency, Inc. on December 31, 2021, for $2.2 million in cash and $2.2 million in Company common stock.

  • The Company recognized a $14.1 million and $7.6 million increase, respectively, in intangible assets and goodwill in conjunction with the acquisitions.

Deposits

  • Total deposits increased $411.9 million and $819.4 million compared to the linked quarter and December 31, 2020, respectively.
  • Interest-bearing deposits grew $263.4 million, or 7.3%, compared to September 30, 2021, and $385.1 million, or 11.1%, compared to December 31, 2020.
  • Noninterest-bearing deposits grew $183.4 million, or 9.3%, compared to September 30, 2021, and $555.9 million, or 34.6%, compared to December 31, 2020.

Business depositors drove increases of $168.1 million and $142.2 million in noninterest-bearing demand and money market deposits compared to the linked quarter. Consumer depositors drove an additional increase of $104.6 million in total deposits compared to the linked quarter. Business depositors drove an increase of $890.8 million in total deposits compared to December 31, 2020.

For the quarter ended December 31, 2021, average noninterest-bearing deposits as a percentage of total average deposits were 33.6%, compared to 31.7% for the linked quarter, and 28.7% for the quarter ended December 31, 2020.

Borrowings

  • Average Federal Home Loan Bank (“FHLB”) advances and other borrowings for the quarter ended December 31, 2021, increased by $3.8 million or 1.4%, compared to the linked quarter, and decreased by $79.8 million or 23.0%, compared to the quarter ended December 31, 2020.

The changes in average FHLB advances and other borrowings from both the linked quarter and from the quarter ended December 31, 2020, were driven by short-term borrowing variations during the respective periods as a result of liquidity management.

Stockholder’s Equity

Stockholders’ equity was $730.2 million at December 31, 2021, an increase of $24.5 million compared to $705.7 million at September 30, 2021, and an increase of $83.1 million compared to $647.2 million at December 31, 2020. The increase from the linked quarter was primarily due to net income for the quarter of $28.3 million, combined with a $7.5 million stock issuance for the insurance agency acquisitions, discussed earlier. These increases were partially offset by other comprehensive loss, net of tax and the quarterly dividend declared during the quarter ended December 31, 2021. The increase from December 31, 2020, was primarily driven by net income retained during the intervening period, and partially offset by the other comprehensive loss, net of tax.

Conference Call

Origin will hold a conference call to discuss its fourth quarter and 2021 full year results on Thursday, January 27, 2022, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (844) 695-5516; International: (412) 902-6750 and request to be joined into the Origin Bancorp, Inc. (OBNK) call. A simultaneous audio-only webcast may be accessed via Origin’s website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link or directly by visiting: https://services.choruscall.com/mediaframe/webcast.html?webcastid=yG9FTkGk.

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

About Origin Bancorp, Inc.

Origin is a financial holding company headquartered in Ruston, Louisiana. Origin’s wholly-owned bank subsidiary, Origin Bank, was founded in 1912. Deeply rooted in Origin’s history is a culture committed to providing personalized, relationship banking to its clients and communities. Origin provides a broad range of financial services to businesses, municipalities, high net-worth individuals and retail clients. Origin currently operates 44 banking centers located from Dallas/Fort Worth and Houston, Texas across North Louisiana and into Mississippi. For more information, visit www.origin.bank.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin’s future financial performance, business and growth strategy, projected plans and objectives, including the Company’s loan loss reserves and allowance for credit losses related to the COVID-19 pandemic and any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including expectations regarding 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: the continuing duration and impacts of the COVID-19 global pandemic and continuing development and distribution of COVID-19 vaccines, as well as other efforts to contain the virus’s transmission, including the effect of these factors and developments on Origin’s business, customers, and economic conditions generally, as well as the impact of the actions taken by governmental authorities to address the impact of COVID-19 on the United States economy, including any economic stimulus legislation; deterioration of Origin’s asset quality; factors that can impact the performance of Origin’s loan portfolio, including real estate values and liquidity in Origin’s primary market areas; the financial health of Origin’s commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin’s loans; Origin’s ability to anticipate interest rate changes and manage interest rate risk; the effectiveness of Origin’s risk management framework and quantitative models; the risk of widespread inflation; Origin’s inability to receive dividends from Origin Bank and to service debt, pay dividends to Origin’s common stockholders, repurchase Origin’s shares of common stock and satisfy obligations as they become due; business and economic conditions generally and in the financial services industry, nationally and within Origin’s primary market areas; changes in Origin’s operation or expansion strategy or Origin’s ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin’s ability to maintain important customer relationships, reputation or otherwise avoid liquidity risks; increasing costs as Origin grows deposits; operational risks associated with Origin’s business; volatility and direction of market interest rates; increased competition in the financial services industry, particularly from regional and national institutions; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated; an increase in unemployment levels and slowdowns in economic growth; Origin’s level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin’s loan portfolio; changes in 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, 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. Furthermore, many of these risks and uncertainties are currently amplified by, may continue to be amplified by or may, in the future, be amplified by the COVID-19 pandemic and the impact of varying governmental responses that affect Origin’s customers and the economies where they operate. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin’s behalf may issue. Annualized, pro forma, adjusted, projected, and estimated numbers are used for illustrative purposes only, are not forecasts, and may not reflect actual results.

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


Origin Bancorp, Inc.
Selected Quarterly Financial Data

 At and for the three months ended
 December 31,
2021
 September 30,
2021
 June 30,
2021
 March 31,
2021
 December 31,
2020
          
Income statement and share amounts(Dollars in thousands, except per share amounts, unaudited)
Net interest income$54,180  $52,541  $54,292  $55,239  $51,819 
Provision for credit losses (2,647)  (3,921)  (5,609)  1,412   6,333 
Noninterest income 16,701   15,923   12,438   17,131   15,381 
Noninterest expense 40,346   39,165   37,832   39,436   38,884 
Income before income tax expense 33,182   33,220   34,507   31,522   21,983 
Income tax expense 4,860   6,242   6,774   6,009   4,431 
Net income$28,322  $26,978  $27,733  $25,513  $17,552 
PTPP earnings (1)$30,535  $29,299  $28,898  $32,934  $28,316 
Basic earnings per common share 1.21   1.15   1.18   1.09   0.75 
Diluted earnings per common share 1.20   1.14   1.17   1.08   0.75 
Dividends declared per common share 0.13   0.13   0.13   0.10   0.10 
Weighted average common shares outstanding - basic 23,484,056   23,429,705   23,410,693   23,393,356   23,392,684 
Weighted average common shares outstanding - diluted 23,609,874   23,613,010   23,604,566   23,590,430   23,543,917 
          
Balance sheet data         
Total LHFI$5,231,331  $5,187,288  $5,396,306  $5,849,760  $5,724,773 
Total assets 7,861,285   7,470,478   7,268,068   7,563,175   7,628,268 
Total deposits 6,570,693   6,158,768   6,028,352   6,346,194   5,751,315 
Total stockholders’ equity 730,211   705,667   688,235   656,355   647,150 
          
Performance metrics and capital ratios         
Yield on LHFI 4.11%  4.05%  4.00%  4.03%  3.89%
Yield on interest-earnings assets 3.35   3.33   3.44   3.58   3.47 
Cost of interest-bearing deposits 0.28   0.30   0.31   0.37   0.43 
Cost of total deposits 0.19   0.21   0.22   0.26   0.31 
Net interest margin, fully tax equivalent 3.06   3.02   3.12   3.22   3.07 
Net interest margin, excluding PPP loans, fully tax equivalent (2) 2.92   2.94   3.06   3.15   3.17 
Return on average stockholders’ equity (annualized) 15.70   15.21   16.54   15.73   10.92 
Return on average assets (annualized) 1.49   1.43   1.49   1.40   0.97 
PTPP return on average stockholders’ equity (annualized) (1) 16.93   16.52   17.23   20.30   17.61 
PTPP return on average assets (annualized) (1) 1.60   1.56   1.55   1.81   1.57 
Efficiency ratio (3) 56.92   57.21   56.69   54.49   57.86 
Book value per common share$30.75  $30.03  $29.28  $27.94  $27.53 
Tangible book value per common share (1) 28.59   28.76   28.01   26.66   26.23 
Common equity tier 1 to risk-weighted assets (4) 11.20%  11.27%  11.03%  10.16%  9.95%
Tier 1 capital to risk-weighted assets (4) 11.36   11.42   11.19   10.32   10.11 
Total capital to risk-weighted assets (4) 14.76   14.95   14.85   13.92   13.79 
Tier 1 leverage ratio (4) 9.20   9.20   8.87   8.67   8.62 

____________________________
(1) PTPP earnings, PTPP return on average stockholders’ equity, PTPP return on average assets and tangible book value per common share are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, please see the last two pages.
(2) Net interest margin, excluding PPP loans, fully tax-equivalent is calculated by removing average PPP loans from average interest-earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net interest income.
(3) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
(4) December 31, 2021, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board.  

Origin Bancorp, Inc.
Consolidated Quarterly Statements of Income

 Three months ended
 December 31,
2021
 September 30,
2021
 June 30,
2021
 March 31,
2021
 December 31,
2020
          
Interest and dividend income(Dollars in thousands, except per share amounts, unaudited)
Interest and fees on loans$53,260  $53,182  $55,529  $56,810  $54,193 
Investment securities-taxable 4,691   3,449   3,115   3,300   3,154 
Investment securities-nontaxable 1,493   1,582   1,590   1,672   1,708 
Interest and dividend income on assets held in other financial institutions 686   538   414   345   367 
Total interest and dividend income 60,130   58,751   60,648   62,127   59,422 
Interest expense         
Interest-bearing deposits 2,957   3,255   3,417   3,789   4,582 
FHLB advances and other borrowings 1,161   1,118   1,106   1,269   1,339 
Subordinated debentures 1,832   1,837   1,833   1,830   1,682 
Total interest expense 5,950   6,210   6,356   6,888   7,603 
Net interest income  54,180   52,541   54,292   55,239   51,819 
Provision for credit losses (2,647)  (3,921)  (5,609)  1,412   6,333 
Net interest income after provision for credit losses 56,827   56,462   59,901   53,827   45,486 
Noninterest income         
Service charges and fees 3,994   3,973   3,739   3,343   3,420 
Mortgage banking revenue 2,857   2,728   2,765   4,577   6,594 
Insurance commission and fee income 2,826   3,451   3,050   3,771   2,732 
Gain on sales of securities, net 75      5   1,668   225 
Loss on sales and disposals of other assets, net (97)  (8)  (42)  (38)  (33)
Limited partnership investment income 50   3,078   801   1,772   368 
Swap fee (loss) income (285)  727   24   348   233 
Change in fair value of equity investments    19          
Other fee income 702   783   623   771   604 
Other income 6,579   1,172   1,473   919   1,238 
Total noninterest income 16,701   15,923   12,438   17,131   15,381 
Noninterest expense         
Salaries and employee benefits 24,718   23,629   22,354   22,325   22,475 
Occupancy and equipment, net 4,306   4,353   4,349   4,339   4,271 
Data processing 2,302   2,329   2,313   2,173   2,178 
Electronic banking 616   997   989   961   942 
Communications 286   359   514   415   449 
Advertising and marketing 1,147   863   748   680   1,108 
Professional services 923   912   836   973   1,176 
Regulatory assessments 526   664   544   1,170   1,135 
Loan-related expenses 1,880   1,949   2,154   1,705   1,856 
Office and operations 1,849   1,598   1,498   1,454   1,472 
Intangible asset amortization 194   194   222   234   237 
Franchise tax expense 692   598   629   619   665 
Other expenses 907   720   682   2,388   920 
Total noninterest expense 40,346   39,165   37,832   39,436   38,884 
Income before income tax expense 33,182   33,220   34,507   31,522   21,983 
Income tax expense 4,860   6,242   6,774   6,009   4,431 
Net income$28,322  $26,978  $27,733  $25,513  $17,552 
Basic earnings per common share$1.21  $1.15  $1.18  $1.09  $0.75 
Diluted earnings per common share 1.20   1.14   1.17   1.08   0.75 

Origin Bancorp, Inc.
Selected Year-to-Date Financial Data

 Year Ended December 31,
(Dollars in thousands, except per share amounts) 2021   2020 
Income statement and share amounts(Unaudited)  
Net interest income$216,252  $191,536 
Provision for credit losses (10,765)  59,900 
Noninterest income 62,193   64,652 
Noninterest expense 156,779   151,935 
Income before income tax expense 132,431   44,353 
Income tax expense 23,885   7,996 
Net income$108,546  $36,357 
PTPP earnings (1)$121,666  $104,253 
Basic earnings per common share (2) 4.63   1.56 
Diluted earnings per common share(2) 4.60   1.55 
Dividends declared per common share 0.49   0.3775 
Weighted average common shares outstanding - basic 23,431,504   23,367,221 
Weighted average common shares outstanding - diluted 23,608,586   23,511,952 
    
Performance metrics   
Yield on LHFI 4.05%  4.17%
Yield on interest-earning assets 3.42   3.75 
Cost of interest-bearing deposits 0.32   0.75 
Cost of total deposits 0.22   0.53 
Net interest margin, fully tax equivalent 3.10   3.18 
Net interest margin, excluding PPP loans, fully tax equivalent (3) 3.01   3.25 
Return on average stockholders’ equity 15.79   5.82 
Return on average assets 1.45   0.56 
PTPP return on average stockholders’ equity (1) 17.69   16.69 
PTPP return on average assets (1) 1.63   1.62 
Efficiency ratio (4) 56.31   59.31 

____________________________
(1) PTPP earnings, PTPP return on average stockholders’ equity, and PTPP return on average assets are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, please see the last two pages.
(2) Due to the combined impact of the repurchase of common stock on the quarterly average common shares outstanding calculation compared to the impact of the repurchase of common stock shares on the year-to-date average common outstanding calculation, and the effect of rounding, the sum of the quarterly earnings per common share may not equal the year-to-date earnings per common share amount.
(3) Net interest margin, excluding PPP loans, fully tax-equivalent is calculated by removing average PPP loans from average interest-earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net interest income.
(4) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.   

Origin Bancorp, Inc.
Consolidated Balance Sheets

(Dollars in thousands)December 31,
2021
 September 30,
2021
 June 30,
2021
 March 31,
2021
 December 31,
2020
Assets(Unaudited) (Unaudited) (Unaudited) (Unaudited)  
Cash and due from banks$133,334 $124,515 $155,311 $64,330 $60,544
Interest-bearing deposits in banks 572,284  227,450  289,421  200,571  316,670
Total cash and cash equivalents 705,618  351,965  444,732  264,901  377,214
Securities:         
Available for sale 1,504,728  1,486,543  973,948  980,132  1,004,674
Held to maturity, net of allowance for credit losses 22,767  37,702  37,835  37,983  38,128
Securities carried at fair value through income 7,497  10,876  10,973  11,077  11,554
Total securities 1,534,992  1,535,121  1,022,756  1,029,192  1,054,356
Non-marketable equity securities held in other financial institutions 45,192  45,144  41,468  47,274  62,586
Loans held for sale 80,387  109,956  124,710  144,950  191,512
Loans 5,231,331  5,187,288  5,396,306  5,849,760  5,724,773
Less: allowance for loan credit losses 64,586  69,947  77,104  85,136  86,670
Loans, net of allowance for loan credit losses 5,166,745  5,117,341  5,319,202  5,764,624  5,638,103
Premises and equipment, net 80,691  80,740  80,133  81,064  81,763
Mortgage servicing rights 16,220  16,000  16,081  17,552  13,660
Cash surrender value of bank-owned life insurance 38,352  38,162  37,959  37,757  37,553
Goodwill and other intangible assets, net 51,330  29,830  30,024  30,246  30,480
Accrued interest receivable and other assets 141,758  146,219  151,003  145,615  141,041
Total assets$7,861,285 $7,470,478 $7,268,068 $7,563,175 $7,628,268
Liabilities and Stockholders’ Equity         
Noninterest-bearing deposits$2,163,507 $1,980,107 $1,861,016 $1,736,534 $1,607,564
Interest-bearing deposits 3,864,058  3,600,654  3,554,427  3,962,082  3,478,985
Time deposits 543,128  578,007  612,909  647,578  664,766
Total deposits 6,570,693  6,158,768  6,028,352  6,346,194  5,751,315
FHLB advances and other borrowings 309,801  309,152  314,123  325,751  984,608
Subordinated debentures 157,417  157,357  157,298  157,239  157,181
Accrued expenses and other liabilities 93,163  139,534  80,060  77,636  88,014
Total liabilities 7,131,074  6,764,811  6,579,833  6,906,820  6,981,118
Stockholders’ equity         
Common stock 118,733  117,480  117,511  117,444  117,532
Additional paid-in capital 242,114  237,928  237,338  236,934  237,341
Retained earnings 363,635  338,387  314,472  289,792  266,628
Accumulated other comprehensive income 5,729  11,872  18,914  12,185  25,649
Total stockholders’ equity 730,211  705,667  688,235  656,355  647,150
Total liabilities and stockholders’ equity$7,861,285 $7,470,478 $7,268,068 $7,563,175 $7,628,268


Origin Bancorp, Inc.
Loan Data

 At and for the three months ended
(Dollars in thousands, unaudited)December 31,
2021
 September 30,
2021
 June 30,
2021
 March 31,
2021
 December 31,
2020
LHFI         
Commercial real estate$1,693,512  $1,590,519  $1,480,536  $1,454,649  $1,387,939 
Construction/land/land development 530,083   518,920   497,170   548,236   531,860 
Residential real estate 909,739   913,411   966,301   904,753   885,120 
Total real estate loans 3,133,334   3,022,850   2,944,007   2,907,638   2,804,919 
PPP 105,761   216,957   369,910   584,148   546,519 
Commercial and industrial 1,348,474   1,218,246   1,200,881   1,250,350   1,271,343 
Mortgage warehouse lines of credit 627,078   713,339   865,255   1,090,347   1,084,001 
Consumer 16,684   15,896   16,253   17,277   17,991 
Total LHFI 5,231,331   5,187,288   5,396,306   5,849,760   5,724,773 
Less: allowance for loan credit losses 64,586   69,947   77,104   85,136   86,670 
LHFI, net$5,166,745  $5,117,341  $5,319,202  $5,764,624  $5,638,103 
          
Nonperforming assets         
Nonperforming LHFI         
Commercial real estate$512  $672  $1,544  $1,085  $3,704 
Construction/land/land development 338   592   621   2,431   2,962 
Residential real estate 11,647   9,377   10,571   10,692   6,530 
Commercial and industrial 12,306   13,873   17,723   19,094   12,897 
Consumer 100   41   43   56   56 
Total nonperforming LHFI 24,903   24,555   30,502   33,358   26,149 
Nonperforming loans held for sale 1,754   2,074   1,606   963   681 
Total nonperforming loans 26,657   26,629   32,108   34,321   26,830 
Repossessed assets 1,860   4,574   4,723   3,893   1,927 
Total nonperforming assets$28,517  $31,203  $36,831  $38,214  $28,757 
Classified assets$71,232  $80,165  $88,150  $99,214  $109,708 
Past due LHFI (1) 25,615   25,954   30,446   26,574   25,763 
          
Allowance for loan credit losses         
Balance at beginning of period$69,947  $77,104  $85,136  $86,670  $81,643 
Provision for loan credit losses (2,668)  (4,266)  (5,224)  1,360   6,784 
Loans charged off 3,162   3,035   3,010   3,027   2,089 
Loan recoveries 469   144   202   133   332 
Net charge-offs 2,693   2,891   2,808   2,894   1,757 
Balance at end of period$64,586  $69,947  $77,104  $85,136  $86,670 
          
Credit quality ratios         
Total nonperforming assets to total assets 0.36%  0.42%  0.51%  0.51%  0.38%
Total nonperforming loans to total loans 0.50   0.50   0.58   0.57   0.45 
Nonperforming LHFI to LHFI 0.48   0.47   0.57   0.57   0.46 
Past due LHFI to LHFI 0.49   0.50   0.56   0.45   0.45 
Allowance for loan credit losses to nonperforming LHFI 259.35   284.86   252.78   255.22   331.45 
Allowance for loan credit losses to total LHFI 1.23   1.35   1.43   1.46   1.51 
Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (2) 1.43   1.63   1.84   2.02   2.10 
Net charge-offs to total average LHFI (annualized) 0.21   0.22
   0.20   0.21   0.13 
Net charge-offs to total average LHFI (annualized), excluding PPP loans 0.22   0.24   0.23   0.23   0.14 

____________________________
(1)   Past due LHFI are defined as loans 30 days or more past due. There were $266,000 of past due PPP loans at September 30, 2021, that are fully guaranteed by the SBA. There were no past due PPP loans for the other disclosed quarterly period end dates included in this release.
(2)   The allowance for loan credit losses (“ACL”) to total LHFI excluding PPP and warehouse loans is calculated by excluding the ACL for warehouse loans from the numerator and excluding the PPP and warehouse loans from the denominator. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the allowance for loan credit losses.

Origin Bancorp, Inc.
Average Balances and Yields/Rates

 Three months ended
 December 31, 2021 September 30, 2021 December 31, 2020
 Average Balance Yield/Rate Average Balance Yield/Rate Average Balance Yield/Rate
            
Assets(Dollars in thousands, unaudited)
Commercial real estate$1,612,078 4.10% $1,505,731 4.08% $1,362,025 4.27%
Construction/land/land development 528,172 4.21   527,881 4.10   533,756 4.21 
Residential real estate 909,778 3.88   936,375 4.14   853,299 4.23 
PPP 162,340 9.19   279,578 5.24   551,325 2.36 
Commercial and industrial 1,276,386 3.76   1,212,797 3.88   1,242,018 3.83 
Mortgage warehouse lines of credit 577,835 3.70   660,715 3.58   897,716 3.81 
Consumer 16,572 5.74   16,222 5.81   18,575 6.03 
LHFI 5,083,161 4.11   5,139,299 4.05   5,458,714 3.89 
Loans held for sale 47,352 5.20   72,739 3.85   114,196 2.73 
Loans receivable 5,130,513 4.12   5,212,038 4.05   5,572,910 3.87 
Investment securities-taxable 1,239,648 1.50   853,277 1.60   662,527 1.89 
Investment securities-nontaxable 265,261 2.23   280,189 2.24   291,702 2.33 
Non-marketable equity securities held in other financial institutions 45,153 4.16   43,725 2.22   39,763 1.99 
Interest-bearing balances due from banks 442,060 0.19   610,863 0.19   236,772 0.28 
Total interest-earning assets 7,122,635 3.35   7,000,092 3.33   6,803,674 3.47 
Noninterest-earning assets(1) 436,935    464,721    360,354  
Total assets$7,559,570   $7,464,813   $7,164,028  
            
Liabilities and Stockholders’ Equity           
Liabilities           
Interest-bearing liabilities           
Savings and interest-bearing transaction accounts$3,616,101 0.23% $3,657,625 0.25% $3,520,543 0.29%
Time deposits 561,990 0.59   582,384 0.67   677,651 1.20 
Total interest-bearing deposits 4,178,091 0.28   4,240,009 0.30   4,198,194 0.43 
FHLB advances and other borrowings 267,737 1.72   263,956 1.68   347,494 1.53 
Subordinated debentures 157,395 4.62   157,321 4.63   144,475 4.63 
Total interest-bearing liabilities 4,603,223 0.51   4,661,286 0.53   4,690,163 0.64 
Noninterest-bearing liabilities           
Noninterest-bearing deposits 2,110,816    1,965,843    1,686,088  
Other liabilities(1) 129,917    134,079    148,269  
Total liabilities 6,843,956    6,761,208    6,524,520  
Stockholders’ Equity 715,614    703,605    639,508  
Total liabilities and stockholders’ equity$7,559,570   $7,464,813   $7,164,028  
Net interest spread  2.84%   2.80%   2.83%
Net interest margin  3.02    2.98    3.03 
Net interest margin - (tax-equivalent)(2)  3.06    3.02    3.07 
Net interest margin excluding PPP loans - (tax-equivalent)(3)  2.92%   2.94%   3.17%

____________________________
(1) Includes Government National Mortgage Association (“GNMA”) repurchase average balances of $45.2 million, $51.3 million, and $61.9 million for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively. The GNMA repurchase asset and liability are recorded as equal offsetting amounts in the consolidated balance sheets, with the asset included in Loans held for sale and the liability included in FHLB advances and other borrowings.
(2) In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds.
(3) Net interest margin, excluding PPP loans, fully tax-equivalent is calculated by removing average PPP loans from average interest-earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net interest income. 


Origin Bancorp, Inc.
Non-GAAP Financial Measures

 At and for the three months ended
 December 31,
2021
 September 30,
2021
 June 30,
2021
 March 31,
2021
 December 31,
2020
          
Calculation of Tangible Common Equity:(Dollars in thousands, except per share amounts, unaudited)
Total common stockholders’ equity$730,211  $705,667  $688,235  $656,355  $647,150 
Less: goodwill and other intangible assets, net 51,330   29,830   30,024   30,246   30,480 
Tangible Common Equity$678,881  $675,837  $658,211  $626,109  $616,670 
          
Calculation of Tangible Book Value per Common Share:        
Divided by common shares outstanding at the end of the period 23,746,502   23,496,058   23,502,215   23,488,884   23,506,312 
Tangible Book Value per Common Share$28.59  $28.76  $28.01  $26.66  $26.23 
          
Calculation of PTPP Earnings:         
Net Income$28,322  $26,978  $27,733  $25,513  $17,552 
Plus: provision for credit losses (2,647)  (3,921)  (5,609)  1,412   6,333 
Plus: income tax expense 4,860   6,242   6,774   6,009   4,431 
PTPP Earnings$30,535  $29,299  $28,898  $32,934  $28,316 
          
Calculation of PTPP ROAA and PTPP ROAE:         
PTPP Earnings$30,535  $29,299  $28,898  $32,934  $28,316 
Divided by number of days in the quarter 92   92   91   90   92 
Multiplied by the number of days in the year 365   365   365   365   366 
Annualized PTPP Earnings$121,144  $116,241  $115,910  $133,566  $112,648 
          
Divided by total average assets$7,559,570  $7,464,813  $7,474,951  $7,382,495  $7,164,028 
PTPP ROAA (annualized) 1.60%  1.56%  1.55%  1.81%  1.57%
          
Divided by total average stockholder’s equity$715,614  $703,605  $672,698  $657,863  $639,508 
PTPP ROAE (annualized) 16.93%  16.52%  17.23%  20.30%  17.61%


Origin Bancorp, Inc.

Non-GAAP Financial Measures

 Year Ended December 31,
(Dollars in thousands, except per share amounts, unaudited) 2021   2020 
Calculation of PTPP Earnings:  
Net Income$108,546  $36,357 
Plus: provision for credit losses (10,765)  59,900 
Plus: income tax expense 23,885   7,996 
PTPP Earnings$121,666  $104,253 
    
Calculation of PTPP ROAA and PTPP ROAE:  
Divided by total average assets$7,470,927  $6,442,528 
PTPP ROAA 1.63%  1.62%
    
Divided by total average stockholder’s equity$687,648  $624,580 
PTPP ROAE
 17.69%  16.69%



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