Strong Deposit Growth Amid Margin … #UKFinance

• Diluted Earnings Per Share (EPS): $0.60 for Q3.

• Total Deposits Growth (Excluding Brokered): Up 2.3% quarter over quarter.

• Noninterest-Bearing Deposits Growth: Up 1.5% for the quarter.

• Net Charge-Offs: $9.5 million for the quarter, 0.48% of loans.

• Allowance for Loan Losses: Decreased to $96 million, 1.21% of total loans.

• Net Interest Margin (NIM): Expanded by 1 basis point to 3.18%.

• Noninterest Income: $16.0 million for Q3.

• Noninterest Expense: Declined to $62.5 million in Q3.

• Tangible Common Equity (TCE) Ratio: Ended Q3 at 10.0%.

• Tangible Book Value Per Share Growth: 5% quarter over quarter, 17% year over year.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Origin Bancorp Inc (NYSE:OBK) reported a 2.3% increase in total deposits, excluding brokered deposits, marking the strongest growth in two years.

• Noninterest-bearing deposits grew by 1.5% for the quarter, maintaining a stable mix at 22% of total deposits.

• The company has made significant investments in technology and data analysis to enhance strategic decision-making and risk management capabilities.

• Origin Bancorp Inc (NYSE:OBK) has successfully reduced past dues, classified loans, and nonperforming loans during the quarter.

• The company reported a 5% quarter-over-quarter and 17% year-over-year growth in tangible book value per share, indicating strong capital management.

• Net interest margin expanded by only 1 basis point, below the expected mid-single-digit expansion, due to higher-than-anticipated deposit costs.

• Net charge-offs for the quarter increased to $9.5 million from $2.9 million in the prior quarter.

• The company experienced a decrease in noninterest income, primarily due to normal seasonality in the mortgage business.

• Origin Bancorp Inc (NYSE:OBK) anticipates a brief period of net interest margin compression due to the lag in asset repricing benefits following Fed rate cuts.

• The company is facing challenges in achieving near-term profitability levels in line with peers, with plans to address this by the end of next year.

Q: Can you elaborate on the factors affecting net interest margin, particularly regarding deposit costs and future expectations? A: William Wallace, CFO, explained that deposit growth was higher than anticipated, particularly in interest-bearing accounts, which added pressure to deposit costs. Despite this, the trends in pricing remained consistent with expectations. The company is modeling a zero beta for Fed rate cuts, but actual deposit betas have been around 40%, which is better than expected. Margin compression of about 10 basis points is expected in Q4, but margin expansion is anticipated in the future, even without a Fed pause, due to asset repricing benefits.

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