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Origin Bancorp, Inc. Reports Earnings For Second Quarter 2021
Источник: Nasdaq GlobeNewswire / 28 июл 2021 15:15:01 America/Chicago
RUSTON, La., July 28, 2021 (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 $27.7 million for the quarter ended June 30, 2021. This represents an increase of $2.2 million from the quarter ended March 31, 2021, and an increase of $22.8 million from the quarter ended June 30, 2020. Diluted earnings per share for the quarter ended June 30, 2021, were $1.17, up $0.09 from the linked quarter and up $0.96 from the quarter ended June 30, 2020. Pre-tax, pre-provision earnings for the quarter were $28.9 million, a decrease of 12.3% on a linked quarter basis, and a 6.5% increase on a prior year quarter basis.
“Origin delivered strong second quarter results hitting another all-time quarterly net income high” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “Our capital and reserve levels reflect a very strong balance sheet and our employees remain focused on continuing to build long-term value for all of our stakeholders."
Financial Highlights
- Net income was $27.7 million for the quarter ended June 30, 2021, achieving another all-time quarterly high compared to $25.5 million for the linked quarter and $5.0 million for the quarter ended June 30, 2020.
- Net interest income was $54.3 million for the quarter ended June 30, 2021, compared to $55.2 million for the linked quarter and $46.3 million for the quarter ended June 30, 2020.
- Credit loss provision was a net benefit of $5.6 million for the quarter ended June 30, 2021, compared to a provision expense of $1.4 million for the linked quarter and $21.4 million for the quarter ended June 30, 2020.
- Cost of total deposits was 0.22% for the quarter ended June 30, 2021, compared to 0.26% for the linked quarter and 0.54% for the quarter ended June 30, 2020.
- Annualized returns on average equity and average assets were 16.54% and 1.49%, respectively, for the quarter ended June 30, 2021, compared to 15.73% and 1.40%, respectively for the quarter ended March 31, 2021, and 3.23% and 0.31%, respectively, for the quarter ended June 30, 2020.
Results of Operations for the Three Months Ended June 30, 2021
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended June 30, 2021, was $54.3 million, a decrease of $947,000, or 1.7%, compared to the linked quarter. The decrease was primarily due to a $1.3 million decrease in interest income earned on the total loan portfolio offset by a $372,000 decrease in deposit costs. The decrease in interest income earned on the total loan portfolio was primarily driven by a $161.1 million decrease in the average balance of total loans caused primarily by a $142.6 million decrease in average mortgage warehouse lines of credit loan balances. The decrease in deposit costs was primarily due to a reduction in deposit rates. The average rate on time deposits decreased to 0.78% for the current quarter, down from 0.95% for the linked quarter. The average rate on interest-bearing deposits was 0.31% for the current quarter, down from 0.37% for the linked quarter.
The yield earned on interest-earning assets was 3.44%, a decrease of 14 basis points compared to the linked quarter and a 21 basis point decrease compared to the quarter ended June 30, 2020. Excluding PPP loans, the yield earned on interest-earning assets was 3.37%, a 14 basis point decrease compared to the linked quarter. The rate paid on total interest-bearing liabilities for the quarter ended June 30, 2021, was 0.53%, representing a decrease of four basis points and 36 basis points compared to the linked quarter and the quarter ended June 30, 2020, respectively.
The fully tax-equivalent net interest margin ("NIM") was 3.12% for the current quarter, a 10 basis point decrease from the linked quarter and a three basis point increase from the quarter ended June 30, 2020. Excluding PPP loans, the fully tax-equivalent NIM was 3.06%, a nine basis point decrease from the linked quarter. The primary driver of the NIM decrease was an increase in liquidity due to a shift in balance sheet composition. The average balance of interest-bearing balances due from banks increased $221.2 million during the quarter ended June 30, 2021, while the yield decreased by 11 basis points from the linked quarter.
Credit Quality
The table below includes key credit quality information:
At and for the three months ended (Dollars in thousands) June 30,
2021March 31,
2021$ Change % Change Allowance for loan credit losses $ 77,104 $ 85,136 $ (8,032 ) (9.4 )% Classified loans 83,427 95,321 (11,894 ) (12.5 ) Total nonperforming LHFI 30,502 33,358 (2,856 ) (8.6 ) Provision for credit losses (5,609 ) 1,412 (7,021 ) (497.2 ) Net charge-offs 2,808 2,894 (86 ) (3.0 ) Credit quality ratios: Allowance for loan credit losses to nonperforming LHFI 252.78 % 255.22 % N/A -244 bp Allowance for loan credit losses to total LHFI 1.43 1.46 N/A -3 bp Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (1) 1.84 2.02 N/A -18 bp Nonperforming LHFI to LHFI 0.57 0.57 N/A 0 bp Net charge-offs to total average LHFI (annualized) 0.20 0.21 N/A -1 bp ___________________________
(1) Please see the Loan Data schedule at the back of this document for additional information.The credit loss provision net benefit compared to the provision expense for the quarter ended March 31, 2021, was primarily due to a release of allowance of $5.6 million during the current quarter driven by continued improvement in forecasted economic conditions, at June 30, 2021. While economic forecasts have improved, uncertainty remains for the remainder of the 2021 year due to risks related to the resurgence or lingering effects of COVID-19, inflationary and labor pressures as well as continued supply-chain disruptions.
The Company's quarterly net charge-offs were stable with the linked quarter, and decreased $3.7 million compared to the quarter ended June 30, 2020. Classified loans declined $11.9 million at June 30, 2021, compared to March 31, 2021, and represented 1.66% as a percentage of LHFI, excluding PPP loans, and 9.53% as a percentage of total risk-based capital (at the Origin Bancorp, Inc. level) compared to 1.81% and 11.10%, respectively, at March 31, 2021.
Noninterest Income
Noninterest income for the quarter ended June 30, 2021, was $12.4 million, a decrease of $4.7 million, or 27.4%, from the linked quarter. The decrease from the linked quarter was primarily driven by decreases of $1.8 million, $1.7 million, $971,000 and $721,000 in mortgage banking revenue, gain on sales of securities, net, limited partnership investment income, and insurance commission and fee income, respectively, which was partially offset by a $554,000 increase in other noninterest income. The decreases in gain on sales of securities, net, limited partnership investment income, and insurance commission and fee income were primarily driven by linked quarter recorded income that was higher than the quarterly trends typically experienced.
The $1.8 million decrease in mortgage banking revenue is mainly due to a lower gain on sales of $2.7 million, due to a 25.3% decrease in sales volume and an 17.4% decrease in sales margin. This decline was partially offset by a $1.2 million increase in the impact of the mortgage pipeline valuation due to the increased market interest rates.
The $554,000 increase in other noninterest income was driven by a $349,000 increase in fair value option loans, securities and related swaps during the current quarter compared to the linked quarter. At June 30, 2021, the Company had $28.4 million of fair value option loans and securities, and swings in value quarter to quarter can be caused by changes in benchmark interest rates and curves, such as United States Treasury rates.
Noninterest Expense
Noninterest expense for the quarter ended June 30, 2021, was $37.8 million, a decrease of $1.6 million, compared to the linked quarter. The decrease from the linked quarter was largely driven by decreases of $1.7 million and $626,000 in other noninterest expense and regulatory assessments, respectively, which was partially offset by an increase of $449,000 in loan related expenses.
The $1.7 million decrease in other noninterest expense was due to a $1.6 million payment related to the early termination of long-term Federal Home Loan Bank ("FHLB") advances last quarter with no similar transaction during the quarter ended June 30, 2021.
The $626,000 decrease in regulatory assessments compared to the linked quarter was due to a $280,000 accrual release from the first quarter 2021 as a result of FDIC assessments.
The increase in loan related expenses was primarily due to an increase of $330,000 in loan-related legal fees and repossession costs recorded in conjunction with workout credits.
Financial Condition
Loans
- Total LHFI decreased $453.5 million compared to the linked quarter and increased $84.1 million compared to June 30, 2020.
- Mortgage warehouse lines of credit decreased $225.1 million compared to the linked quarter and increased $96.1 million compared to June 30, 2020.
- PPP loans, net of deferred fees and costs, totaled $369.9 million at June 30, 2021, a decrease of $214.2 million compared to the linked quarter. Net deferred loan fees and costs on PPP loans were $9.3 million at June 30, 2021.
- Average LHFI decreased $142.8 million, compared to the linked quarter, and increased $588.0 million compared to June 30, 2020.
Total LHFI at June 30, 2021, were $5.40 billion, reflecting a decrease of 7.8% compared to the linked quarter and an increase of 1.6%, compared to June 30, 2020. The decrease in LHFI compared to the linked quarter, was primarily driven by decreases in mortgage warehouse lines of credit and PPP loans, respectively. Higher mortgage interest rates during the period and a decline in mortgage refinancing activity were the largest drivers of the lower mortgage warehouse volumes from the abnormally high levels seen in the recent past. PPP loans have decreased primarily due to $230.2 million in PPP loan principal forgiveness experienced during the quarter. Total LHFI at June 30, 2021, excluding PPP and mortgage warehouse lines of credit, were $4.16 billion, reflecting a $14.1 million or 0.3% decrease compared to the linked quarter and an increase of $167.2 million, or 4.2% compared to June 30, 2020. During the quarter ended June 30, 2021, we proactively reduced $47.0 million of outstanding loan balances that were previously identified as work out credits.
Deposits
- Total deposits decreased $317.8 million compared to the linked quarter and increased $656.1 million compared to June 30, 2020.
- Brokered deposits decreased by $571.7 million and $490.9 million compared to the linked quarter and June 30, 2020, respectively.
- Average total deposits for the quarter ended June 30, 2021, increased by $373.9 million and $1.28 billion over the linked quarter and the quarter ended June 30, 2020, respectively.
Total deposits at June 30, 2021, were $6.03 billion, reflecting a decrease of 5.0% compared to the linked quarter and an increase of 12.2% compared to June 30, 2020. The decrease from the linked quarter was caused by a decrease in brokered deposits in response to funding needs during the quarter. The decrease was partially offset by a $187.2 million increase in deposits from business depositors.
Increases of $730.3 million and $267.7 million in deposits from business depositors and public funds, respectively, drove the increase in total deposits compared to June 30, 2020, which was offset by a $490.9 million decrease in brokered deposits.
For the quarter ended June 30, 2021, average noninterest-bearing deposits as a percentage of total average deposits was 29.4%, compared to 29.0% for the quarter ended March 31, 2021, and 31.8% for the quarter ended June 30, 2020.
Borrowings
- Average FHLB advances and other borrowings for the quarter ended June 30, 2021, decreased by $295.0 million and $408.3 million compared to the quarter ended March 31, 2021 and the quarter ended June 30, 2020, respectively.
PPP forgiveness payments continued, non-brokered deposits increased and warehouse loans declined during the quarter ended June 30, 2021, driving an increase in overall liquidity and reducing reliance on borrowings. Average FHLB advances and other borrowings decreased 52.9% and 60.8% for the quarter ended June 30, 2021, compared to the quarter ended March 31, 2021 and to the quarter ended June 30, 2020, respectively. During the quarter ended June 30, 2021, the Company decreased its short-term average FHLB advances to near zero from $278.1 million during the quarter ended March 31, 2021, primarily due to shifts in the composition of the balance sheet.
Stockholders' equity was $688.2 million at June 30, 2021, an increase of $31.9 million compared to $656.4 million at March 31, 2021, and an increase of $73.5 million compared to $614.8 million at June 30, 2020. The increase from the linked quarter was primarily due to net income and other comprehensive income, net of tax for the quarter of $27.7 million and $6.7 million, respectively, which was partially offset by the quarterly dividend declared during the quarter ended June 30, 2021. The increase from the June 30, 2020, quarter was primarily caused by net income retained during the intervening period.
Conference Call
Origin will hold a conference call to discuss its second quarter 2021 results on Thursday, July 29, 2021, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (844) 695-5516; International: (412) 902-6750 and request to be joined into the Origin Bancorp, Inc. (OBNK) call. A simultaneous audio-only webcast may be accessed via Origin's website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link or directly by visiting: https://services.choruscall.com/mediaframe/webcast.html?webcastid=agVFdi1L.
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 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 "anticipates," "believes," "estimates," "expects," “foresees,” "intends," "plans," "projects," and similar expressions or future or conditional verbs such as "could," "may," “might,” "should," "will," and "would" or variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin's future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: the continuing duration and impacts of the COVID-19 global pandemic and continuing development and distribution of COVID-19 vaccines, as well as other efforts to contain the virus's transmission, including the effect of these factors and developments on Origin’s business, customers and economic conditions generally, as well as the impact of the actions taken by governmental authorities to address the impact of COVID-19 on the United States economy, including, 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 the laws, rules, regulations, interpretations or policies relating to financial institutions, and potential expenses associated with complying with such regulations, periodic changes to the extensive body of accounting rules and best practices; further government intervention in the U.S. financial system; compliance with governmental and regulatory requirements, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and others relating to banking, consumer protection, securities and tax matters; Origin's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin's non-GAAP liquidity measurements and its underlying assumptions or estimates; uncertainty regarding the future of the London Interbank Offered Rate and the impact of any replacement alternatives on Origin’s business; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies and similar organizations; natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities, regional or national protests and civil unrest (including any resulting branch closures or property damage), widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond Origin’s control; and system failures, cybersecurity threats or security breaches and the cost of defending against them. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any updates to those sections set forth in Origin's subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin's underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the 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 purpose only, are not forecasts and may not reflect actual results.
Contact:
Chris Reigelman, Origin Bancorp, Inc.
318-497-3177 / chris@origin.bankOrigin Bancorp, Inc.
Selected Quarterly Financial DataAt and for the three months ended June 30,
2021March 31,
2021December 31,
2020September 30,
2020June 30,
2020Income statement and share amounts (Dollars in thousands, except per share amounts, unaudited) Net interest income $ 54,292 $ 55,239 $ 51,819 $ 50,617 $ 46,290 Provision for credit losses (5,609 ) 1,412 6,333 13,633 21,403 Noninterest income 12,438 17,131 15,381 18,051 19,076 Noninterest expense 37,832 39,436 38,884 38,734 38,220 Income before income tax expense 34,507 31,522 21,983 16,301 5,743 Income tax expense 6,774 6,009 4,431 3,206 786 Net income $ 27,733 $ 25,513 $ 17,552 $ 13,095 $ 4,957 Pre-tax, pre-provision ("PTPP") earnings (1) $ 28,898 $ 32,934 $ 28,316 $ 29,934 $ 27,146 Basic earnings per common share 1.18 1.09 0.75 0.56 0.21 Diluted earnings per common share 1.17 1.08 0.75 0.56 0.21 Dividends declared per common share 0.13 0.10 0.10 0.0925 0.0925 Weighted average common shares outstanding - basic 23,410,693 23,393,356 23,392,684 23,374,496 23,347,744 Weighted average common shares outstanding - diluted 23,604,566 23,590,430 23,543,917 23,500,596 23,466,326 Balance sheet data Total LHFI $ 5,396,306 $ 5,849,760 $ 5,724,773 $ 5,612,666 $ 5,312,194 Total assets 7,268,068 7,563,175 7,628,268 7,101,338 6,643,909 Total deposits 6,028,352 6,346,194 5,751,315 5,935,925 5,372,222 Total stockholders' equity 688,235 656,355 647,150 627,637 614,781 Performance metrics and capital ratios Yield on LHFI 4.00 % 4.03 % 3.89 % 4.02 % 4.09 % Yield on interest earnings assets 3.44 3.58 3.47 3.64 3.65 Cost of interest bearing deposits 0.31 0.37 0.43 0.61 0.79 Cost of total deposits 0.22 0.26 0.31 0.42 0.54 Net interest margin, fully tax equivalent 3.12 3.22 3.07 3.18 3.09 Net interest margin, excluding PPP loans, fully tax equivalent (2) 3.06 3.15 3.17 3.28 3.15 Return on average stockholders' equity (annualized) 16.54 15.73 10.92 8.28 3.23 Return on average assets (annualized) 1.49 1.40 0.97 0.77 0.31 PTPP return on average stockholders' equity (annualized) (1) 17.23 20.30 17.61 18.92 17.67 PTPP return on average assets (annualized) (1) 1.55 1.81 1.57 1.77 1.69 Efficiency ratio (3) 56.69 54.49 57.86 56.41 58.47 Book value per common share $ 29.28 $ 27.94 $ 27.53 $ 26.70 $ 26.16 Tangible book value per common share (1) 28.01 26.66 26.23 25.39 24.84 Common equity tier 1 to risk-weighted assets (4) 11.03 % 10.16 % 9.95 % 9.93 % 10.35 % Tier 1 capital to risk-weighted assets (4) 11.19 10.32 10.11 10.09 10.52 Total capital to risk-weighted assets (4) 14.85 13.92 13.79 12.48 12.91 Tier 1 leverage ratio (4) 8.87 8.67 8.62 9.19 9.10 ____________________________
(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 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) June 30, 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 IncomeThree months ended June 30,
2021March 31,
2021December 31,
2020September 30,
2020June 30,
2020Interest and dividend income (Dollars in thousands, except per share amounts, unaudited) Interest and fees on loans $ 55,529 $ 56,810 $ 54,193 $ 54,150 $ 50,722 Investment securities-taxable 3,115 3,300 3,154 2,704 2,732 Investment securities-nontaxable 1,590 1,672 1,708 1,571 1,391 Interest and dividend income on assets held in other financial institutions 414 345 367 375 619 Total interest and dividend income 60,648 62,127 59,422 58,800 55,464 Interest expense Interest-bearing deposits 3,417 3,789 4,582 5,698 6,620 FHLB advances and other borrowings 1,106 1,269 1,339 1,564 1,641 Subordinated debentures 1,833 1,830 1,682 921 913 Total interest expense 6,356 6,888 7,603 8,183 9,174 Net interest income 54,292 55,239 51,819 50,617 46,290 Provision for credit losses (5,609 ) 1,412 6,333 13,633 21,403 Net interest income after provision for credit losses 59,901 53,827 45,486 36,984 24,887 Noninterest income Service charges and fees 3,739 3,343 3,420 3,268 2,990 Mortgage banking revenue 2,765 4,577 6,594 9,523 10,717 Insurance commission and fee income 3,050 3,771 2,732 3,218 3,109 Gain on sales of securities, net 5 1,668 225 301 — Loss on sales and disposals of other assets, net (42 ) (38 ) (33 ) (247 ) (908 ) Limited partnership investment income 801 1,772 368 130 9 Swap fee income 24 348 233 110 1,527 Other fee income 623 771 604 576 607 Other income 1,473 919 1,238 1,172 1,025 Total noninterest income 12,438 17,131 15,381 18,051 19,076 Noninterest expense Salaries and employee benefits 22,354 22,325 22,475 22,597 24,045 Occupancy and equipment, net 4,349 4,339 4,271 4,263 4,267 Data processing 2,313 2,173 2,178 2,065 2,075 Electronic banking 989 961 942 954 890 Communications 514 415 449 422 419 Advertising and marketing 748 680 1,108 1,281 610 Professional services 836 973 1,176 785 843 Regulatory assessments 544 1,170 1,135 1,310 766 Loan related expenses 2,154 1,705 1,856 1,809 1,509 Office and operations 1,498 1,454 1,472 1,367 1,344 Intangible asset amortization 222 234 237 237 287 Franchise tax expense 629 619 665 511 514 Other expenses 682 2,388 920 1,133 651 Total noninterest expense 37,832 39,436 38,884 38,734 38,220 Income before income tax expense 34,507 31,522 21,983 16,301 5,743 Income tax expense 6,774 6,009 4,431 3,206 786 Net income $ 27,733 $ 25,513 $ 17,552 $ 13,095 $ 4,957 Basic earnings per common share $ 1.18 $ 1.09 $ 0.75 $ 0.56 $ 0.21 Diluted earnings per common share 1.17 1.08 0.75 0.56 0.21 Origin Bancorp, Inc.
Selected Year-to-Date Financial DataSix Months Ended June 30, (Dollars in thousands, except per share amounts) 2021 2020 Income statement and share amounts (Unaudited) (Unaudited) Net interest income $ 109,531 $ 89,100 Provision for credit losses (4,197 ) 39,934 Noninterest income 29,569 31,220 Noninterest expense 77,268 74,317 Income before income tax expense 66,029 6,069 Income tax expense 12,783 359 Net income $ 53,246 $ 5,710 PTPP earnings (1) $ 61,832 $ 46,003 Basic earnings per common share (2) 2.28 0.24 Diluted earnings per common share(2) 2.26 0.24 Dividends declared per common share 0.23 0.185 Weighted average common shares outstanding - basic 23,402,073 23,350,673 Weighted average common shares outstanding - diluted 23,597,291 23,498,910 Performance metrics Yield on LHFI 4.02 % 4.43 % Yield on interest earning assets 3.51 3.98 Cost of interest bearing deposits 0.34 1.03 Cost of total deposits 0.24 0.73 Net interest margin, fully tax equivalent 3.17 3.25 Net interest margin, excluding PPP loans, fully tax equivalent (3) 3.10 3.28 Return on average stockholders' equity (annualized) 16.14 1.87 Return on average assets (annualized) 1.45 0.19 PTPP return on average stockholders' equity (annualized) (1) 18.74 15.05 PTPP return on average assets (annualized) (1) 1.68 1.56 Efficiency ratio (4) 55.55 61.77 ____________________________
(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 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) June 30,
2021March 31,
2021December 31,
2020September 30,
2020June 30,
2020Assets (Unaudited) (Unaudited) (Unaudited) (Unaudited) Cash and due from banks $ 155,311 $ 64,330 $ 60,544 $ 61,250 $ 57,054 Interest-bearing deposits in banks 289,421 200,571 316,670 160,661 99,282 Total cash and cash equivalents 444,732 264,901 377,214 221,911 156,336 Securities: Available for sale 973,948 980,132 1,004,674 797,260 720,616 Held to maturity, net of allowance for credit losses 37,835 37,983 38,128 38,193 38,287 Securities carried at fair value through income 10,973 11,077 11,554 11,813 11,977 Total securities 1,022,756 1,029,192 1,054,356 847,266 770,880 Non-marketable equity securities held in other financial institutions 41,468 47,274 62,586 38,052 41,864 Loans held for sale 124,710 144,950 191,512 155,525 121,541 Loans 5,396,306 5,849,760 5,724,773 5,612,666 5,312,194 Less: allowance for loan credit losses 77,104 85,136 86,670 81,643 70,468 Loans, net of allowance for loan credit losses 5,319,202 5,764,624 5,638,103 5,531,023 5,241,726 Premises and equipment, net 80,133 81,064 81,763 79,254 80,025 Mortgage servicing rights 16,081 17,552 13,660 14,322 15,235 Cash surrender value of bank-owned life insurance 37,959 37,757 37,553 37,332 37,102 Goodwill and other intangible assets, net 30,024 30,246 30,480 30,717 30,953 Accrued interest receivable and other assets 151,003 145,615 141,041 145,936 148,247 Total assets $ 7,268,068 $ 7,563,175 $ 7,628,268 $ 7,101,338 $ 6,643,909 Liabilities and Stockholders' Equity Noninterest-bearing deposits $ 1,861,016 $ 1,736,534 $ 1,607,564 $ 1,599,436 $ 1,584,746 Interest-bearing deposits 3,554,427 3,962,082 3,478,985 3,640,587 3,041,859 Time deposits 612,909 647,578 664,766 695,902 745,617 Total deposits 6,028,352 6,346,194 5,751,315 5,935,925 5,372,222 FHLB advances and other borrowings 314,123 325,751 984,608 360,325 478,260 Subordinated debentures 157,298 157,239 157,181 78,596 78,567 Accrued expenses and other liabilities 80,060 77,636 88,014 98,855 100,079 Total liabilities 6,579,833 6,906,820 6,981,118 6,473,701 6,029,128 Stockholders' equity Common stock 117,511 117,444 117,532 117,533 117,506 Additional paid-in capital 237,338 236,934 237,341 236,679 236,156 Retained earnings 314,472 289,792 266,628 251,427 240,506 Accumulated other comprehensive income 18,914 12,185 25,649 21,998 20,613 Total stockholders' equity 688,235 656,355 647,150 627,637 614,781 Total liabilities and stockholders' equity $ 7,268,068 $ 7,563,175 $ 7,628,268 $ 7,101,338 $ 6,643,909 Origin Bancorp, Inc.
Loan DataAt and for the three months ended (Dollars in thousands, unaudited) June 30,
2021March 31,
2021December 31,
2020September 30,
2020June 30,
2020LHFI Commercial real estate $ 1,480,536 $ 1,454,649 $ 1,387,939 $ 1,367,916 $ 1,323,754 Construction/land/land development 497,170 548,236 531,860 560,857 570,032 Residential real estate 966,301 904,753 885,120 832,055 769,354 Total real estate loans 2,944,007 2,907,638 2,804,919 2,760,828 2,663,140 Paycheck Protection Program 369,910 584,148 546,519 552,329 549,129 Commercial and industrial 1,200,881 1,250,350 1,271,343 1,263,279 1,313,405 Mortgage warehouse lines of credit 865,255 1,090,347 1,084,001 1,017,501 769,157 Consumer 16,253 17,277 17,991 18,729 17,363 Total LHFI 5,396,306 5,849,760 5,724,773 5,612,666 5,312,194 Less: allowance for loan credit losses 77,104 85,136 86,670 81,643 70,468 LHFI, net $ 5,319,202 $ 5,764,624 $ 5,638,103 $ 5,531,023 $ 5,241,726 Nonperforming assets Nonperforming LHFI Commercial real estate $ 1,544 $ 1,085 $ 3,704 $ 4,669 $ 4,717 Construction/land/land development 621 2,431 2,962 2,976 3,726 Residential real estate 10,571 10,692 6,530 8,259 6,713 Commercial and industrial 17,723 19,094 12,897 14,255 14,772 Consumer 43 56 56 69 119 Total nonperforming LHFI 30,502 33,358 26,149 30,228 30,047 Nonperforming loans held for sale 1,606 963 681 483 734 Total nonperforming loans 32,108 34,321 26,830 30,711 30,781 Repossessed assets 4,723 3,893 1,927 718 4,155 Total nonperforming assets $ 36,831 $ 38,214 $ 28,757 $ 31,429 $ 34,936 Classified assets $ 88,150 $ 99,214 $ 109,708 $ 101,577 $ 100,299 Past due LHFI (1) 30,446 26,574 25,763 29,194 23,751 Allowance for loan credit losses Balance at beginning of period $ 85,136 $ 86,670 $ 81,643 $ 70,468 $ 56,063 Provision for loan credit losses (5,224 ) 1,360 6,784 12,970 20,878 Loans charged off 3,010 3,027 2,089 2,293 6,587 Loan recoveries 202 133 332 498 114 Net charge-offs 2,808 2,894 1,757 1,795 6,473 Balance at end of period $ 77,104 $ 85,136 $ 86,670 $ 81,643 $ 70,468 Credit quality ratios Total nonperforming assets to total assets 0.51 % 0.51 % 0.38 % 0.44 % 0.53 % Total nonperforming loans to total loans 0.58 0.57 0.45 0.53 0.57 Nonperforming LHFI to LHFI 0.57 0.57 0.46 0.54 0.57 Past due LHFI to LHFI 0.56 0.45 0.45 0.52 0.45 Allowance for loan credit losses to nonperforming LHFI 252.78 255.22 331.45 270.09 234.53 Allowance for loan credit losses to total LHFI 1.43 1.46 1.51 1.45 1.33 Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (2) 1.84 2.02 2.10 2.00 1.75 Net charge-offs to total average LHFI (annualized) 0.20 0.21 0.13 0.13 0.53 Net charge-offs to total average LHFI (annualized), excluding PPP loans 0.23 0.23 0.14 0.15 0.58 ____________________________
(1) Past due LHFI are defined as loans 30 days or more past due.
(2) The allowance for loan credit losses ("ACL") to total LHFI excluding PPP and warehouse loans is calculated by excluding the ACL for warehouse loans from the numerator and excluding the PPP and warehouse loans from the denominator. 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/RatesThree months ended June 30, 2021 March 31, 2021 June 30, 2020 Average Balance Yield/Rate Average Balance Yield/Rate Average Balance Yield/Rate Assets (Dollars in thousands, unaudited) Commercial real estate $ 1,465,799 4.12 % $ 1,421,819 4.16 % $ 1,307,715 4.45 % Construction/land/land development 516,794 4.18 541,782 4.09 562,233 4.40 Residential real estate 929,332 4.11 888,208 4.04 742,657 4.47 Paycheck Protection Program ("PPP") 521,551 4.27 565,653 4.40 449,680 2.73 Commercial and industrial excl. PPP 1,240,252 3.80 1,255,436 3.95 1,378,898 3.92 Mortgage warehouse lines of credit 819,233 3.63 961,808 3.67 462,088 3.79 Consumer 16,632 5.83 17,649 5.81 18,362 6.49 LHFI 5,509,593 4.00 5,652,355 4.03 4,921,633 4.09 Loans held for sale 68,797 3.51 87,177 2.71 91,991 3.11 Loans receivable 5,578,390 3.99 5,739,532 4.01 5,013,624 4.07 Investment securities-taxable 749,538 1.67 750,801 1.78 492,752 2.23 Investment securities-nontaxable 280,504 2.27 295,000 2.30 208,667 2.68 Non-marketable equity securities held in other financial institutions 46,898 2.12 60,326 1.45 51,713 2.29 Interest-bearing balances due from banks 417,782 0.16 196,616 0.27 345,906 0.38 Total interest-earning assets 7,073,112 3.44 7,042,275 3.58 6,112,662 3.65 Noninterest-earning assets(1) 401,839 340,220 334,864 Total assets $ 7,474,951 $ 7,382,495 $ 6,447,526 Liabilities and Stockholders' Equity Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 3,774,529 0.23 % $ 3,513,281 0.26 % $ 2,633,520 0.51 % Time deposits 631,654 0.78 656,255 0.95 751,607 1.75 Total interest-bearing deposits 4,406,183 0.31 4,169,536 0.37 3,385,127 0.79 FHLB advances and other borrowings 262,806 1.69 557,798 0.92 671,108 0.98 Subordinated debentures 157,276 4.67 157,221 4.72 78,557 4.68 Total interest-bearing liabilities 4,826,265 0.53 4,884,555 0.57 4,134,792 0.89 Noninterest-bearing liabilities Noninterest-bearing deposits 1,837,823 1,700,523 1,578,987 Other liabilities(1) 138,165 139,554 115,849 Total liabilities 6,802,253 6,724,632 5,829,628 Stockholders' Equity 672,698 657,863 617,898 Total liabilities and stockholders' equity $ 7,474,951 $ 7,382,495 $ 6,447,526 Net interest spread 2.91 % 3.01 % 2.76 % Net interest margin 3.08 3.18 3.05 Net interest margin - (tax- equivalent)(2) 3.12 3.22 3.09 Net interest margin excluding PPP loans - (tax- equivalent)(3) 3.06 3.15 3.15 ____________________________
(1) Includes Government National Mortgage Association ("GNMA") repurchase average balances of $60.3 million, $59.0 million, and $29.0 million for the three months ended June 30, 2021, March 31, 2021, and June 30, 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 MeasuresAt and for the three months ended June 30,
2021March 31,
2021December 31,
2020September 30,
2020June 30,
2020Calculation of Tangible Common Equity: (Dollars in thousands, except per share amounts, unaudited) Total common stockholders' equity $ 688,235 $ 656,355 $ 647,150 $ 627,637 $ 614,781 Less: goodwill and other intangible assets, net 30,024 30,246 30,480 30,717 30,953 Tangible Common Equity $ 658,211 $ 626,109 $ 616,670 $ 596,920 $ 583,828 Calculation of Tangible Book Value per Common Share: Divided by common shares outstanding at the end of the period 23,502,215 23,488,884 23,506,312 23,506,586 23,501,233 Tangible Book Value per Common Share $ 28.01 $ 26.66 $ 26.23 $ 25.39 $ 24.84 Calculation of PTPP Earnings: Net Income $ 27,733 $ 25,513 $ 17,552 $ 13,095 $ 4,957 Plus: provision for credit losses (5,609 ) 1,412 6,333 13,633 21,403 Plus: income tax expense 6,774 6,009 4,431 3,206 786 PTPP Earnings $ 28,898 $ 32,934 $ 28,316 $ 29,934 $ 27,146 Calculation of PTPP ROAA and PTPP ROAE: PTPP Earnings $ 28,898 $ 32,934 $ 28,316 $ 29,934 $ 27,146 Divided by number of days in the quarter 91 90 92 92 91 Multiplied by the number of days in the year 365 365 366 366 366 Annualized PTPP Earnings $ 115,910 $ 133,566 $ 112,648 $ 119,085 $ 109,181 Divided by total average assets $ 7,474,951 $ 7,382,495 $ 7,164,028 $ 6,746,585 $ 6,447,526 PTPP ROAA (annualized) 1.55 % 1.81 % 1.57 % 1.77 % 1.69 % Divided by total average stockholder's equity $ 672,698 $ 657,863 $ 639,508 $ 629,533 $ 617,898 PTPP ROAE (annualized) 17.23 % 20.30 % 17.61 % 18.92 % 17.67 % Origin Bancorp, Inc.
Non-GAAP Financial MeasuresSix Months Ended June 30, (Dollars in thousands, except per share amounts, unaudited) 2021 2020 Calculation of PTPP Earnings: Net Income $ 53,246 $ 5,710 Plus: provision for credit losses (4,197 ) 39,934 Plus: income tax expense 12,783 359 PTPP Earnings $ 61,832 $ 46,003 Calculation of PTPP ROAA and PTPP ROAE: PTPP Earnings $ 61,832 $ 46,003 Divided by number of days in this period 181 182 Multiplied by the number of days in the year 365 366 Annualized PTPP Earnings $ 124,689 $ 92,512 Divided by total average assets $ 7,428,978 $ 5,924,115 PTPP ROAA 1.68 % 1.56 % Divided by total average stockholder's equity $ 665,322 $ 614,530 PTPP ROAE 18.74 % 15.05 %