EX-99.1 2 a12312018obnkexhibit991er.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1
For Immediate Release

obnklogoa01.jpg

ORIGIN BANCORP, INC. REPORTS EARNINGS FOR FOURTH QUARTER AND 2018 FULL YEAR

RUSTON, Louisiana, January 23, 2019 -- Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $13.2 million for the quarter ended December 31, 2018. This represents an increase of $860,000 from the quarter ended September 30, 2018, and an increase of $7.4 million from the quarter ended December 31, 2017. Diluted earnings per share for the quarter ended December 31, 2018, was $0.55, up $0.03 from the linked quarter and an increase of $0.32 from the quarter ended December 31, 2017.

Net income for the year ended December 31, 2018, was $51.6 million, representing an increase of $36.9 million, compared to the year ended December 31, 2017. Diluted earnings per share for the year ended December 31, 2018, was $2.20, representing an increase of $1.70 from diluted earnings per share of $0.50 for the year ended December 31, 2017.

"We are pleased to report a strong finish for 2018 with solid fourth quarter results,” said Drake Mills, Chairman, President and CEO of Origin Bancorp, Inc. “We remain committed to developing our relationships with our stakeholders as we continue to grow market share and strengthen our brand value. We are also committed to leveraging efficiencies to support continued growth and maximize shareholder value. Our organization is well positioned to take advantage of market opportunities and we believe our recent efforts position us for success in 2019."

Fourth Quarter 2018 Highlights

•
Net interest income of $42.1 million reached a historical quarterly high, increasing by $2.6 million, or 6.5%, over the linked quarter and by $7.8 million, or 22.9%, over the quarter ended December 31, 2017.

•
Net interest margin for the quarter ended December 31, 2018, was at 3.76% (3.82% fully tax equivalent), an increase of six basis points from the linked quarter and an increase of 23 basis points over the quarter ended December 31, 2017.

•
Total loans held for investment were $3.79 billion, an increase of $188.0 million, or 5.2%, from September 30, 2018, and an increase of $548.1 million, or 16.9%, from December 31, 2017. The yield earned on total loans held for investment during the quarter ended December 31, 2018, was 5.17%, compared to 5.00% for the linked quarter and 4.53% for the quarter ended December 31, 2017.

•
Total deposits increased by $56.0 million, or 1.5%, from September 30, 2018, and increased by $271.1 million, or 7.7%, from December 31, 2017. The average rate paid on our interest-bearing deposits was 1.31% compared to 1.16% for the linked quarter and 0.83% for the quarter ended December 31, 2017.

•
The Company's efficiency ratio improved to 66.52% for the quarter ended December 31, 2018, compared to 69.06% for the quarter ended September 30, 2018, and 74.00% for the quarter ended December 31, 2017.

Full Year 2018 Highlights

•
Net income and diluted earnings per share for the year ended December 31, 2018, increased by $36.9 million and $1.70, respectively, compared to the year ended December 31, 2017. Net interest margin of 3.69% (3.75% fully tax equivalent) achieved a near record high for the year ended December 31, 2018, reflecting an increase of 27 basis points from the year ended December 31, 2017.


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•
Net revenue (consisting of net interest income plus noninterest income) for the year ended December 31, 2018, was $194.7 million, an increase of $35.2 million, or 22.1%, from $159.5 million for the year ended December 31, 2017.

•
Total loans held for investment increased by $548.1 million, or 16.9%, to $3.79 billion from $3.24 billion at December 31, 2017. The yield earned on total loans held for investment for the year ended December 31, 2018, was 4.96%, compared to 4.38% for the year ended December 31, 2017.

•
In connection with the successful completion of the Initial Public Offering of the Company's common stock, the Company received net proceeds, before expenses, of approximately $96.3 million and issued 3,045,426 shares. A portion of the net proceeds was used to redeem all 48,260 shares of the Company's Senior Non-Cumulative Perpetual Preferred Stock, Series SBLF, at an aggregate redemption price of $49.1 million.

•
To complement its organic growth model, a lift-out strategy was executed in the Company's Houston market and lending teams within its Dallas and Shreveport markets were augmented with seasoned lending professionals.

•
Completed acquisition of Reeves, Coon & Funderburg ("RCF") insurance agency, solidifying the Company's presence as one of the larger independent insurance agencies in North Louisiana.

•
For the sixth consecutive year Origin Bank was named one of the best banks to work for in the U.S. by American Banker and Best Companies Group, which identifies U.S. banks for outstanding employee satisfaction.

Results of Operations for the Three Months Ended December 31, 2018

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended December 31, 2018, was $42.1 million, a $2.6 million increase over the linked quarter, primarily due to a $3.9 million increase in interest income earned on loans, reflecting increases in both average balances and rates, which was partially offset by an increase in cost of borrowings. Average loan balances increased during the quarter ended December 31, 2018, compared to the third quarter of 2018, in all categories except mortgage warehouse loans, primarily as a result of the Company's relationship-driven organic growth and recent investment within its growth markets. Interest income on commercial and industrial and commercial real estate loans accounted for $3.5 million, or 89.7%, of the increase in interest income earned on loans during the linked quarter.

Net interest income increased $7.8 million, or 22.9%, compared to the quarter ended December 31, 2017, primarily due to a $10.9 million increase in interest income earned on loans. Average loan balances, except for mortgage warehouse loans, increased during the fourth quarter of 2018 compared to the same quarter in 2017. Interest income on commercial and industrial and commercial real estate loans increased by $8.2 million compared to the quarter ended December 31, 2017. Also contributing to the increase in net interest income was a $1.5 million increase in income earned on investment securities. The increase in net interest income was partially offset by higher costs of funding, which was also primarily driven by increases in market interest rates.

The rate paid on total interest-bearing liabilities for the quarter ended December 31, 2018, was 1.39%, representing an increase of 13 basis points and 49 basis points compared to the linked quarter and the quarter ended December 31, 2017, respectively. Additionally, average balances of total interest-bearing liabilities increased by $175.1 million and $393.7 million compared to the linked quarter and the quarter ended December 31, 2017, respectively. The primary drivers of the increase in the average balance of interest-bearing liabilities were borrowings and interest-bearing deposits which increased by $154.2 million and $18.1 million, respectively, compared to the linked quarter and $282.8 million and $104.7 million, respectively, compared to the quarter ended December 31, 2017. The average rate paid on interest-bearing deposits was 1.31% for the quarter ended December 31, 2018, representing an increase of 15 basis points compared to the linked quarter and an increase of 48 basis points compared to the quarter ended December 31, 2017. The increase in average balances in borrowings in the current period compared to the linked quarter and the quarter ended 2017 was largely due to a $250.0 million FHLB advance obtained in the third quarter of 2018.

2


Noninterest Income

Noninterest income for the quarter ended December 31, 2018, was $10.6 million, an increase of $351,000, or 3.4%, from the linked quarter. The increase in noninterest income over the linked quarter was primarily driven by an increase of $990,000 in other income as well as an increase in other fee income and a decrease in (loss) gain on sale and disposals of other assets, net of $228,000 and $184,000, respectively. The increase in other income was driven by an increase of $1.3 million in our limited partnership investment income, and was partially offset by a decrease of $219,000 in swap fee income. The increase in noninterest income was partially offset by decreases in insurance commission and fee income and mortgage banking revenue of $825,000 and $333,000, respectively. The decrease in insurance commission and fee income was largely due to a decrease in agency billed commissions caused by the timing and seasonality of policy renewals.

Noninterest income for the quarter ended December 31, 2018, increased by $1.9 million, or 21.5%, compared to the quarter ended December 31, 2017. The overall increase was driven by increases in insurance commission and fee income and other income of $1.1 million and $831,000, respectively. The increase in insurance commission and fee income was primarily driven by the RCF acquisition in July 2018, which significantly expanded the Company's insurance presence in the North Louisiana market. The increase in other income was driven largely by an increase in the Company's limited partnership income of $444,000. Partially offsetting the increase in total noninterest income from the quarter ended December 31, 2017, was a decrease in mortgage banking revenue of $818,000 primarily due to a decline in the volume of mortgage loans sold.

Noninterest Expense

Noninterest expense for the quarter ended December 31, 2018, was $35.0 million, an increase of $679,000, or 2.0%, compared to the linked quarter. The increase was largely driven by increases in data processing expenses of $316,000, salaries and employee benefit expenses of $279,000 and regulatory assessments of $255,000. The increase in data processing expenses was largely driven by the implementation of a new loan origination platform during the fourth quarter of 2018. Regulatory assessments increased in the current quarter due partially to the increase in assessable assets during the period. The increase in total noninterest expense was partially offset by a $339,000 decrease in occupancy and equipment expenses.

Noninterest expense for the quarter ended December 31, 2018, increased by $3.3 million, or 10.2%, from the quarter ended December 31, 2017, driven primarily by increases of $2.9 million in salaries and employee benefits and $414,000 in data processing expenses. The increase in salaries and employee benefit expenses was largely driven by the addition of the Houston lift-out team, Dallas and Shreveport lending professionals and the RCF acquisition in July 2018. The increase in data processing expenses in the current quarter compared to the quarter ended December 31, 2017, was largely due to the implementation of a new loan origination platform in 2018. The total increase in noninterest expense was partially offset by a $649,000 decrease in loan related expenses, largely due to significant expenses incurred during 2017 as part of the Company's strategic reduction of its energy loan portfolio, which expenses were not incurred again in 2018.

Financial Condition

Loans
    
Loans held for investment at December 31, 2018, were $3.79 billion, an increase of $188.0 million, or 5.2%, compared to $3.60 billion at September 30, 2018, and an increase of $548.1 million, or 16.9%, compared to $3.24 billion at December 31, 2017.

For the quarter ended December 31, 2018, average loans held for investment were $3.65 billion, an increase of $190.9 million, or 5.5%, from $3.46 billion for the quarter ended September 30, 2018. This increase was driven by the execution of our recent lift-out strategy as well as continued efforts to pursue quality lending opportunities and included increases of $131.5 million and $97.9 million in average commercial and industrial loans and real estate loans, respectively. Average mortgage warehouse loans decreased $40.2 million, or 17.6%, to $187.8 million at December 31, 2018, from September 30, 2018, primarily due to the seasonality of these loans.

Compared to the quarter ended December 31, 2017, average loans held for investment increased by $449.2 million, or 14.0%. This increase included average growth of $249.6 million and $232.7 million within real estate and commercial and industrial loans, respectively. The overall growth was partially offset by an average balance decrease of $33.9 million in mortgage warehouse loans.
    

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Deposits

Total deposits at December 31, 2018, were $3.78 billion, an increase of $56.0 million, or 1.5%, compared to $3.73 billion at September 30, 2018, and an increase of $271.1 million, or 7.7%, compared to $3.51 billion, at December 31, 2017.
    
Average deposits for the quarter ended December 31, 2018, increased by $34.8 million, or 0.9%, over the linked quarter, driven by increases of $34.9 million and $32.2 million in average consumer time and average brokered deposits, respectively. The increases were partially offset by a $51.5 million decline in average consumer interest-bearing savings and demand deposits. Overall, average interest-bearing deposits increased by $18.1 million, or 0.7%, and average noninterest-bearing deposits increased by $16.7 million, or 1.7% over the linked quarter.

Average deposits for the quarter ended December 31, 2018, increased by $222.1 million, or 6.3%, over the quarter ended December 31, 2017. Increases of $111.7 million, $73.8 million and $70.6 million in average noninterest-bearing commercial, consumer time and commercial time deposits, respectively, were offset by a $78.3 million decrease in commercial money market deposits when comparing the year over year quarterly periods.
    
Average noninterest-bearing deposits represented 26.9% of total average deposits for the quarter ended December 31, 2018, compared to 26.7% of total average deposits for the quarter ended September 30, 2018, and 25.2% of total average deposits for the quarter ended December 31, 2017.

Borrowings

Average borrowings for the quarter ended December 31, 2018, increased by $154.2 million, or 75.4%, over the quarter ended September 30, 2018, and $282.8 million over the quarter ended December 31, 2017. The increase in the average borrowings in the fourth quarter of 2018 compared to the linked quarter and same quarter of 2017 was largely due to a $250.0 million FHLB advance obtained in the third quarter of 2018 which has been re-deployed into higher yielding interest-earning assets, such as higher yielding loans, investment securities and interest-bearing cash accounts, and replaced higher rate FHLB advances.

Stockholders' Equity

Stockholders' equity was $549.8 million at December 31, 2018, compared to $531.9 million and $455.3 million at September 30, 2018, and December 31, 2017, respectively. Net income of $13.2 million and other comprehensive income of $3.7 million for the three months ended December 31, 2018, largely resulting from a decrease in unrealized loss on securities available for sale, was the primary driver of the increase in stockholders' equity compared to September 30, 2018.

The $94.5 million increase in stockholders' equity for the quarter ended December 31, 2018, when compared to the same quarter in 2017, was largely due to net income of $51.6 million, offset by an other comprehensive loss of $4.1 million, for the year ended December 31, 2018, and to the completion of the Company's Initial Public Offering in May 2018. In connection with the offering, the Company issued 3,045,426 shares and received net proceeds, before expenses, totaling $96.3 million, a portion of which was used to redeem all outstanding shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series SBLF at an aggregate redemption price of $49.1 million. Also, during the quarter ended June 30, 2018, all of the 901,644 shares of the Company's outstanding Series D preferred stock were converted into shares of its common stock, on a one-for-one basis. As a result, no shares of Series D preferred stock were outstanding at December 31, 2018.

Credit Quality

The Company recorded provision expense of $1.7 million for the quarter ended December 31, 2018, compared to provision expense of $504,000 and $242,000 for the linked quarter and the quarter ended December 31, 2017, respectively. The increase in provision expense from the linked quarter and the quarter ended December 31, 2017, was primarily due to recent loan growth.

At December 31, 2018, nonperforming loans were $32.6 million, representing an increase of $4.7 million, or 16.6%, from the linked quarter. Nonperforming loans increased by $8.8 million, or 37.0%, from $23.8 million at December 31, 2017, primarily due to downgrades associated with three commercial lending relationships.

Allowance for loan losses as a percentage of total loans held for investment was 0.90% at December 31, 2018, compared to 0.99% and 1.14% at September 30, 2018, and December 31, 2017, respectively. Allowance for loan losses as a percentage of nonperforming loans held for investment was 107.37% at December 31, 2018, compared to 134.54% and 155.80% at September 30, 2018, and December 31, 2017, respectively.


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Non-GAAP Financial Measures

Origin reports its results in accordance with United States generally accepted accounting principles ("GAAP"). However, management believes that certain supplemental non-GAAP financial measures used in managing its business may provide meaningful information to investors about underlying trends in its business and management uses these non-GAAP measures to evaluate the Company’s operating performance and believes that these non-GAAP measures provide information that is important to investors and that is useful in understanding Origin's results of operations. 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. Specifically, the Company reviews and reports tangible book value per common share. For a reconciliation of this non-GAAP measure to its most commonly used GAAP measure, see page 13 of this press release.

Conference Call

Origin will hold a conference call to discuss its fourth quarter and full year 2018 results on Thursday, January 24, 2019, at 8:00 a.m. Central (9:00 a.m. Eastern). To participate in the live conference call, please dial (877) 270-2148; International: (412) 902-6510 and request to be joined into the Origin Bancorp Inc. (OBNK) call. A simultaneous audio-only webcast may be accessed via Origin’s website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link or directly by visiting https://services.choruscall.com/links/obnk190124.html.

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

About Origin Bancorp, Inc.

Origin is a financial holding company for Origin Bank, headquartered in Ruston, Louisiana, which provides a broad range of financial services to small and medium-sized businesses, municipalities, high net-worth individuals and retail clients from 41 banking centers located from Dallas/Fort Worth, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. For more information, visit www.origin.bank.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are all subject to change and may be inherently unreliable due to the multiple factors that impact economic 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 preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" 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: deterioration of Origin’s asset quality; changes in 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, including any loans acquired in acquisition transactions; changes in the value of collateral securing Origin’s loans; business and economic conditions generally and in the financial services industry, nationally and within Origin’s local market area; Origin’s ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin’s ability to maintain important deposit customer relationships; volatility and direction of market interest rates, which may increase funding costs or reduce interest-earning asset yields thus reducing margin; 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, including the effects of declines in housing markets; 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; the extensive federal and state regulation, supervision and examination governing almost every aspect of Origin’s operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; 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

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continued access to the debt and equity capital markets; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; and the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters including terrorist attack. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-Looking Statements" in Origin’s most recent Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission ("SEC") on November 7, 2018, and "Risk Factors", in Origin’s prospectus filed with the SEC on May 9, 2018, pursuant to Section 424(b) of the Securities Act of 1933, as amended, and any updates to those risk factors set forth in Origin’s subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or 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, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
    

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



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Origin Bancorp, Inc.
Selected Financial Data

 
 
At and for the three months ended
 
December 31,
 2018
 
September 30,
 2018
 
June 30,
 2018
 
March 31,
 2018
 
December 31,
 2017
 
 
 
 
 
 
 
 
 
 
Income statement and share amounts
(Dollars in thousands, except per share amounts, unaudited)
Net interest income
$
42,061

 
$
39,497

 
$
37,170

 
$
34,724

 
$
34,218

Provision (benefit) for credit losses
1,723

 
504

 
311

 
(1,524
)
 
242

Noninterest income
10,588

 
10,237

 
10,615

 
9,800

 
8,715

Noninterest expense
35,023

 
34,344

 
32,012

 
29,857

 
31,771

Income before income tax expense
15,903

 
14,886

 
15,462

 
16,191

 
10,920

Income tax expense
2,725

 
2,568

 
2,760

 
2,784

 
5,148

Net income
$
13,178

 
$
12,318

 
$
12,702

 
$
13,407

 
$
5,772

Basic earnings per common share
$
0.56

 
$
0.52

 
$
0.54

 
$
0.60

 
$
0.23

Diluted earnings per common share
0.55

 
0.52

 
0.53

 
0.60

 
0.23

Dividends declared per common share
0.0325

 
0.0325

 
0.0325

 
0.0325

 
0.0325

Weighted average common shares outstanding - basic
23,519,778

 
23,493,065

 
22,107,489

 
19,459,278

 
19,437,663

Weighted average common shares outstanding - diluted
23,715,919

 
23,716,779

 
22,382,003

 
19,675,473

 
19,653,797

 
 
 
 
 
 
 
 
 
 
Balance sheet data

 
 
 
 
 
 
 
 
Total loans held for investment
$
3,789,105

 
$
3,601,081

 
$
3,372,096

 
$
3,245,992

 
$
3,241,031

Total assets
4,821,576

 
4,667,564

 
4,371,792

 
4,214,899

 
4,153,995

Total deposits
3,783,138

 
3,727,158

 
3,672,097

 
3,580,738

 
3,512,014

Total stockholders' equity
549,779

 
531,919

 
519,356

 
462,824

 
455,342

 
 
 
 
 
 
 
 
 
 
Performance metrics and capital ratios
 
 
 
 
 
 
 
 
 
Yield on loans held for investment
5.17
%
 
5.00
%
 
4.89
%
 
4.73
%
 
4.53
%
Yield on interest earnings assets
4.75

 
4.58

 
4.43

 
4.31

 
4.16

Rate on interest bearing deposits
1.31

 
1.16

 
1.01

 
0.90

 
0.83

Rate on total deposits
0.96

 
0.85

 
0.75

 
0.68

 
0.62

Net interest margin, fully tax equivalent
3.82

 
3.76

 
3.74

 
3.68

 
3.62

Return on average stockholders' equity (annualized)
9.66

 
9.15

 
9.94

 
11.82

 
5.00

Return on average assets (annualized)
1.10

 
1.08

 
1.17

 
1.30


0.55

Efficiency ratio (1)
66.52

 
69.06

 
66.99

 
67.06

 
74.00

Book value per common share
$
23.17

 
$
22.52

 
$
22.10

 
$
20.36

 
$
19.99

Tangible book value per common share (2)
21.79

 
21.11

 
21.07

 
19.12

 
18.74

Common equity tier 1 to risk-weighted assets (3)
11.95
%
 
11.79
%
 
12.35
%
 
9.64
%
 
9.35
%
Tier 1 capital to risk-weighted assets (3)
12.16

 
12.01

 
12.58

 
11.59

 
11.25

Total capital to risk-weighted assets (3)
12.98

 
12.88

 
13.48

 
12.53

 
12.26

Tier 1 leverage ratio (3)
11.21

 
11.34

 
11.63

 
10.65

 
10.53

____________________________
(1) 
Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
(2)  
Tangible book value per common share is a non-GAAP financial measure. For a reconciliation of this measure to the most comparable GAAP measure, see page 13 of this press release.
(3) 
December 31, 2018, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board.


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Origin Bancorp, Inc.
Selected Financial Data

 
Twelve months ended
(Dollars in thousands, except per share amounts)
December 31, 2018
 
December 31, 2017
 
 
 
 
Income statement and share amounts
(Unaudited)
 
 
Net interest income
$
153,452

 
$
130,305

Provision for credit losses
1,014

 
8,336

Noninterest income
41,240

 
29,187

Noninterest expense
131,236

 
130,674

Income before income tax expense
62,442

 
20,482

Income tax expense
10,837

 
5,813

Net income
$
51,605

 
$
14,669

Basic earnings per common share (1)
$
2.21

 
$
0.51

Diluted earnings per common share(1)
2.20

 
0.50

Dividends declared per common share
0.13

 
0.13

Weighted average common shares outstanding - basic
21,995,990

 
19,418,278

Weighted average common shares outstanding - diluted
22,194,429

 
19,634,412

 
 
 
 
Performance metrics and capital ratios
 
 
 
Return on average stockholders' equity
10.07
%
 
3.19
%
Return on average assets
1.16

 
0.36

Efficiency ratio (2)
67.41

 
81.93

____________________________
(1) 
Due to the impact of average preferred shares outstanding on the calculation of earnings per share, the sum of quarterly periods may not agree to the sum of the annual periods presented.
(2) 
Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.




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Origin Bancorp, Inc.
Consolidated Balance Sheets

(Dollars in thousands)
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
 
 
 
 
 
 
 
 
 
Assets
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
Cash and due from banks
$
71,008

 
$
60,716

 
$
71,709

 
$
52,989

 
$
78,489

Interest-bearing deposits in banks
45,670

 
59,721

 
97,865

 
194,268

 
108,698

Federal funds sold
—

 
20,000

 
—

 
—

 
—

Total cash and cash equivalents
116,678

 
140,437

 
169,574

 
247,257

 
187,187

Securities:
 
 
 
 
 
 
 
 
 
Available for sale
575,644

 
585,788

 
507,513

 
414,157

 
404,532

Held to maturity
19,169

 
19,602

 
19,731

 
19,860

 
20,188

Securities carried at fair value through income
11,361

 
11,273

 
11,413

 
11,723

 
12,033

Total securities
606,174

 
616,663

 
538,657

 
445,740

 
436,753

Non-marketable equity securities held in other financial institutions
42,149

 
39,283

 
25,005

 
22,995

 
22,967

Loans held for sale
52,210

 
50,658

 
62,072

 
48,988

 
65,343

Loans
3,789,105

 
3,601,081

 
3,372,096

 
3,245,992

 
3,241,031

Less: allowance for loan losses
34,203

 
35,727

 
34,151

 
34,132

 
37,083

Loans, net of allowance for loan losses
3,754,902

 
3,565,354

 
3,337,945

 
3,211,860

 
3,203,948

Premises and equipment, net
75,014

 
74,936

 
77,064

 
76,648

 
77,408

Mortgage servicing rights
25,114

 
26,163

 
25,738

 
25,999

 
24,182

Cash surrender value of bank-owned life insurance
32,706

 
32,487

 
28,326

 
28,185

 
27,993

Goodwill and other intangible assets, net
32,861

 
33,228

 
24,113

 
24,219

 
24,336

Accrued interest receivable and other assets
83,768

 
88,355

 
83,298

 
83,008

 
83,878

Total assets
$
4,821,576

 
$
4,667,564

 
$
4,371,792

 
$
4,214,899

 
$
4,153,995

Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
951,015

 
$
976,260

 
$
950,080

 
$
885,883

 
$
832,853

Interest-bearing deposits
2,027,720

 
1,985,757

 
1,995,798

 
2,071,626

 
2,060,068

Time deposits
804,403

 
765,141

 
726,219

 
623,229

 
619,093

Total deposits
3,783,138

 
3,727,158

 
3,672,097

 
3,580,738

 
3,512,014

FHLB advances and other borrowings
445,224

 
358,532

 
139,092

 
132,224

 
144,357

Junior subordinated debentures
9,644

 
9,637

 
9,631

 
9,625

 
9,619

Accrued expenses and other liabilities
33,791

 
40,318

 
31,616

 
29,488

 
32,663

Total liabilities
4,271,797

 
4,135,645

 
3,852,436

 
3,752,075

 
3,698,653

Commitments and contingencies
—

 
—

 
—

 
34,991

 
34,991

Stockholders' equity
 
 
 
 
 
 
 
 
 
Preferred stock - series SBLF
—

 
—

 
—

 
48,260

 
48,260

Preferred stock - series D
—

 
—

 
—

 
16,998

 
16,998

Common stock
118,633

 
118,106

 
117,520

 
97,626

 
97,594

Additional paid-in capital
242,041

 
240,832

 
238,260

 
146,201

 
146,061

Retained earnings
191,585

 
179,178

 
167,628

 
156,498

 
145,122

Accumulated other comprehensive (loss) income
(2,480
)
 
(6,197
)
 
(4,052
)
 
(2,759
)
 
1,307


549,779

 
531,919

 
519,356

 
462,824

 
455,342

Less: Retirement Plan-owned shares
—

 
—

 
—

 
34,991

 
34,991

Total stockholders' equity
549,779

 
531,919

 
519,356

 
427,833

 
420,351

Total liabilities and stockholders' equity
$
4,821,576

 
$
4,667,564

 
$
4,371,792

 
$
4,214,899

 
$
4,153,995



9
Origin Bancorp, Inc.
Consolidated Quarterly Statements of Income


 
Three months ended
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
 
 
 
 
 
 
 
 
 
Interest and dividend income
(Dollars in thousands, except per share amounts, unaudited)
Interest and fees on loans
$
47,819

 
$
43,872

 
$
40,219

 
$
37,474

 
$
36,923

Investment securities-taxable
3,292

 
2,754

 
2,057

 
1,740

 
1,619

Investment securities-nontaxable
996

 
1,129

 
1,156

 
1,184

 
1,187

Interest and dividend income on assets held in other financial institutions
950

 
1,080

 
1,320

 
1,046

 
679

Federal funds sold
1

 
7

 
—

 
—

 
—

Total interest and dividend income
53,058

 
48,842

 
44,752

 
41,444

 
40,408

Interest expense
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
8,980

 
7,891

 
6,820

 
5,980

 
5,447

FHLB advances and other borrowings
1,878

 
1,314

 
624

 
604

 
605

Subordinated debentures
139

 
140

 
138

 
136

 
138

Total interest expense
10,997

 
9,345

 
7,582

 
6,720

 
6,190

Net interest income
42,061

 
39,497

 
37,170

 
34,724

 
34,218

Provision (benefit) for credit losses
1,723

 
504

 
311

 
(1,524
)
 
242

Net interest income after provision (benefit) for credit losses
40,338

 
38,993

 
36,859

 
36,248

 
33,976

Noninterest income
 
 
 
 
 
 
 
 
 
Service charges and fees
3,349

 
3,234

 
3,157

 
3,014

 
3,032

Mortgage banking revenue
2,288

 
2,621

 
2,317

 
2,394

 
3,106

Insurance commission and fee income
2,481

 
3,306

 
1,826

 
2,107

 
1,419

Loss on sales of securities, net
(8
)
 
—

 
—

 
—

 
—

(Loss) gain on sales and disposals of other assets, net
(23
)
 
(207
)
 
121

 
(61
)
 
(336
)
Other fee income
592

 
364

 
403

 
452

 
416

Other income
1,909

 
919

 
2,791

 
1,894

 
1,078

Total noninterest income
10,588

 
10,237

 
10,615

 
9,800

 
8,715

Noninterest expense
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
21,333

 
21,054

 
19,859

 
18,241

 
18,444

Occupancy and equipment, net
3,830

 
4,169

 
3,793

 
3,653

 
3,999

Data processing
1,839

 
1,523

 
1,347

 
1,473

 
1,425

Electronic banking
699

 
761

 
680

 
743

 
558

Communications
513

 
490

 
510

 
515

 
493

Advertising and marketing
1,351

 
1,245

 
1,022

 
657

 
1,065

Professional services
1,024

 
982

 
598

 
665

 
1,167

Regulatory assessments
666

 
411

 
660

 
720

 
739

Loan related expenses
810

 
718

 
798

 
713

 
1,459

Office and operations
1,516

 
1,499

 
1,588

 
1,278

 
1,389

Other expenses
1,442

 
1,492

 
1,157

 
1,199

 
1,033

Total noninterest expense
35,023

 
34,344

 
32,012

 
29,857

 
31,771

Income before income tax expense
15,903

 
14,886

 
15,462

 
16,191

 
10,920

Income tax expense
2,725

 
2,568

 
2,760

 
2,784

 
5,148

Net income
$
13,178

 
$
12,318

 
$
12,702

 
$
13,407

 
$
5,772

Basic earnings per common share
$
0.56

 
$
0.52

 
$
0.54

 
$
0.60

 
$
0.23

Diluted earnings per common share
0.55

 
0.52

 
0.53

 
0.60

 
0.23



10
Origin Bancorp, Inc.
Loan Data


 
At and for the three months ended
Loans held for investment
December 31,
 2018
 
September 30,
 2018
 
June 30,
 2018
 
March 31,
2018
 
December 31,
2017
 
 
 
 
 
 
 
 
 
 
Loans secured by real estate:
(Dollars in thousands, unaudited)
Commercial real estate
$
1,228,402

 
$
1,162,274

 
$
1,091,581

 
$
1,096,948

 
$
1,083,275

Construction/land/land development
429,660

 
406,249

 
380,869

 
340,684

 
322,404

Residential real estate
629,714

 
585,931

 
563,016

 
583,461

 
570,583

Total real estate
2,287,776

 
2,154,454

 
2,035,466

 
2,021,093

 
1,976,262

Commercial and industrial
1,272,566

 
1,193,035

 
1,046,488

 
1,012,760

 
989,220

Mortgage warehouse lines of credit
207,871

 
233,325

 
270,494

 
191,154

 
255,044

Consumer
20,892

 
20,267

 
19,648

 
20,985

 
20,505

Total loans held for investment
3,789,105

 
3,601,081

 
3,372,096

 
3,245,992

 
3,241,031

Less: Allowance for loan losses
34,203

 
35,727

 
34,151

 
34,132

 
37,083

Loans held for investment, net
$
3,754,902

 
$
3,565,354

 
$
3,337,945

 
$
3,211,860

 
$
3,203,948

 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
 
 
 
 
 
 
 
 
Nonperforming loans held for investment
 
 
 
 
 
 
 
 
 
Commercial real estate
$
8,281

 
$
8,851

 
$
8,712

 
$
8,851

 
$
1,745

Construction/land/land development
935

 
960

 
1,197

 
1,272

 
1,097

Residential real estate
6,668

 
7,220

 
7,713

 
7,226

 
7,166

Commercial and industrial
15,792

 
9,285

 
8,831

 
9,312

 
13,512

Consumer
180

 
238

 
340

 
349

 
282

Total nonperforming loans held for investment
31,856

 
26,554

 
26,793

 
27,010

 
23,802

Nonperforming loans held for sale
741

 
1,391

 
1,949

 
246

 
—

Total nonperforming loans
32,597

 
27,945

 
28,742

 
27,256

 
23,802

Repossessed assets
3,739

 
3,306

 
654

 
722

 
574

Total nonperforming assets
$
36,336

 
$
31,251

 
$
29,396

 
$
27,978

 
$
24,376

Classified assets
$
82,914

 
$
80,092

 
$
87,289

 
$
91,760

 
$
91,869

 
 
 
 
 
 
 
 
 
 
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
35,727

 
$
34,151

 
$
34,132

 
$
37,083

 
$
39,445

Provision (benefit) for loan losses
1,886

 
1,113

 
140

 
(1,558
)
 
504

Loans charged off
3,583

 
1,009

 
794

 
1,738

 
4,180

Loan recoveries
173

 
1,472

 
673

 
345

 
1,314

Net charge offs
3,410

 
(463
)
 
121

 
1,393

 
2,866

Balance at end of period
$
34,203

 
$
35,727

 
$
34,151

 
$
34,132

 
$
37,083

 
 
 
 
 
 
 
 
 
 
Credit quality ratios
 
 
 
 
 
 
 
 
 
Total nonperforming assets to total assets
0.75
%
 
0.67
 %
 
0.67
%
 
0.66
%
 
0.59
%
Total nonperforming loans to total loans
0.85

 
0.77

 
0.84

 
0.83

 
0.72

Nonperforming loans held for investment to loans held for investment
0.84

 
0.74

 
0.79

 
0.83

 
0.73

Allowance for loan losses to nonperforming loans held for investment
107.37

 
134.54

 
127.46

 
126.37

 
155.80

Allowance for loan losses to total loans held for investment
0.90

 
0.99

 
1.01

 
1.05

 
1.14

Net charge offs (recoveries) to total average loans held for investment (annualized)
0.37

 
(0.05
)
 
0.01

 
0.18

 
0.36



11
Origin Bancorp, Inc.
Average Balances and Yields/Rates


 
Three months ended
 
December 31, 2018
 
September 30, 2018
 
December 31, 2017
 
Average Balance
 
Yield/Rate
 
Average Balance
 
Yield/Rate
 
Average Balance
 
Yield/Rate
 
 
 
 
 
 
 
 
 
 
 
 
Assets
(Dollars in thousands, unaudited)
Commercial real estate
$
1,176,837

 
5.07
%
 
$
1,122,377

 
4.96
%
 
$
1,054,041

 
4.57
%
Construction/land/land development
407,120

 
5.55

 
392,936

 
5.34

 
331,139

 
4.82

Residential real estate
604,383

 
4.87

 
575,126

 
4.75

 
553,536

 
4.54

Commercial and industrial
1,251,969

 
5.22

 
1,120,431

 
4.96

 
1,019,238

 
4.35

Mortgage warehouse lines of credit
187,801

 
5.54

 
228,031

 
5.37

 
221,722

 
4.58

Consumer
21,809

 
6.76

 
20,129

 
6.91

 
21,042

 
6.39

Loans held for investment
3,649,919

 
5.17

 
3,459,030

 
5.00

 
3,200,718

 
4.53

Loans held for sale
22,168

 
4.70

 
22,157

 
5.20

 
37,733

 
4.11

Loans Receivable
3,672,087

 
5.17

 
3,481,187

 
5.00

 
3,238,451

 
4.52

Investment securities-taxable
499,489

 
2.64

 
440,676

 
2.50

 
301,587

 
2.15

Investment securities-nontaxable
113,183

 
3.52

 
125,489

 
3.60

 
134,771

 
3.52

Non-marketable equity securities held in other financial institutions
40,176

 
2.64

 
32,058

 
2.31

 
22,942

 
3.28

Interest-bearing balances due from banks
108,126

 
2.51

 
148,853

 
2.38

 
152,512

 
1.27

Federal funds sold
—

 
—

 
1,304

 
2.03

 
—

 
—

Total interest-earning assets
4,433,061

 
4.75
%
 
4,229,567

 
4.58
%
 
3,850,263

 
4.16
%
Noninterest-earning assets(1)
308,125

 
 
 
310,804

 
 
 
299,044

 
 
Total assets
$
4,741,186

 
 
 
$
4,540,371

 
 
 
$
4,149,307

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
Savings and interest-bearing transaction accounts
$
1,932,958

 
1.10
%
 
$
1,963,821

 
1.01
%
 
$
2,005,788

 
0.74
%
Time deposits
789,816

 
1.81

 
740,893

 
1.54

 
612,264

 
1.10

Total interest-bearing deposits
2,722,774

 
1.31

 
2,704,714

 
1.16

 
2,618,052

 
0.83

Borrowings
358,810

 
1.95

 
204,607

 
2.40

 
75,995

 
3.04

Securities sold under agreements to repurchase
37,075

 
1.23

 
34,284

 
0.92

 
30,904

 
0.29

Subordinated debentures
9,641

 
5.66

 
9,633

 
5.67

 
9,615

 
5.71

Total interest-bearing liabilities
3,128,300

 
1.39

 
2,953,238

 
1.26

 
2,734,566

 
0.90

Noninterest-bearing deposits
1,001,033

 
 
 
984,330

 
 
 
883,703

 
 
Other liabilities(1)
70,648

 
 
 
68,553

 
 
 
72,598

 
 
Total liabilities
4,199,981

 
 
 
4,006,121

 
 
 
3,690,867

 
 
Stockholders' Equity
541,205

 
 
 
534,250

 
 
 
458,440

 
 
Total liabilities and stockholders' equity
$
4,741,186

 
 
 
$
4,540,371

 
 
 
$
4,149,307

 
 
Net interest spread
 
 
3.36
%
 
 
 
3.32
%
 
 
 
3.26
%
Net interest margin
 
 
3.76
%
 
 
 
3.70
%
 
 
 
3.53
%
Net interest income margin - (tax- equivalent)(2)
 
 
3.82
%
 
 
 
3.76
%
 
 
 
3.62
%
__________________________
(1) 
Includes Government National Mortgage Association ("GNMA") repurchase average balances of $29.2 million, $29.9 million and $30.0 million for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017, 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. Income from tax-exempt investments and tax credits were computed using a Federal income tax rate of 21% for the three months ended December 31, 2018, and September 30, 2018, and 35% for the three months ended December 31, 2017. The tax-equivalent net interest margin would have been 3.59% for the three months ended December 31, 2017, if the Company had been subject to the 21% Federal income tax rate enacted in the Tax Cuts and Jobs Act.


12
Origin Bancorp, Inc.
Non-GAAP
Reconciliation

Tangible book value per common share is a non-GAAP financial measure and is determined by dividing total stockholders' equity, less preferred stock series SBLF and series D, less goodwill and other intangible assets, net, by common shares outstanding. The most comparable GAAP financial measure is book value per common share.

The following table reconciles, at the dates set forth below, the non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP.
 
December 31,
 2018
 
September 30,
 2018
 
June 30,
2018
 
March 31,
 2018
 
December 31,
2017
 
 
 
 
 
 
 
 
 
 
Calculation of book value per common share
(Dollars in thousands, except per share amounts, unaudited)
Total stockholders' equity(1)
$
549,779

 
$
531,919

 
$
519,356

 
$
462,824

 
$
455,342

Less: preferred stock - series SBLF
—

 
—

 
—

 
48,260

 
48,260

Less: preferred stock - series D
—

 
—

 
—

 
16,998

 
16,998

Common stockholders' equity
$
549,779

 
$
531,919

 
$
519,356

 
$
397,566

 
$
390,084

 
 
 
 
 
 
 
 
 
 
Common shares outstanding at end of period
23,726,559

 
23,621,235

 
23,504,063

 
19,525,241

 
19,518,752

Book value per common share
$
23.17

 
$
22.52

 
$
22.10

 
$
20.36

 
$
19.99

 
 
 
 
 
 
 
 
 
 
Calculation of tangible book value per common share
 
 
 
 
 
 
 
 
 
Total stockholders' equity(1)
$
549,779

 
$
531,919

 
$
519,356

 
$
462,824

 
$
455,342

Less: preferred stock - series SBLF
—

 
—

 
—

 
48,260

 
48,260

Less: preferred stock - series D
—

 
—

 
—

 
16,998

 
16,998

Less: goodwill and other intangible assets, net
32,861

 
33,228

 
24,113

 
24,219

 
24,336

Total tangible common stockholders' equity
$
516,918

 
$
498,691

 
$
495,243

 
$
373,347

 
$
365,748

 
 
 
 
 
 
 
 
 
 
Common shares outstanding at end of period
23,726,559

 
23,621,235

 
23,504,063

 
19,525,241

 
19,518,752

Tangible book value per common share
$
21.79

 
$
21.11

 
$
21.07

 
$
19.12

 
$
18.74

 
 
 
 
 
 
 
 
 
 
____________________________
(1)    Includes Retirement Plan-owned shares for all periods prior to June 30, 2018.


13