Origin Bancorp, Inc. Q1 FY2025 earnings call

• Drake Mills highlighted the commitment to Optimize Origin and the progress made, aiming for an ROA run rate of 1% or greater by Q4 with the ultimate target of top quartile among peers.
• Lance Hall emphasized focus on Optimize Origin, strong employee engagement with high culture alignment, and deposit and loan growth priorities, with deposits excluding brokered growing 7.2% annualized.
• Jim Crotwell discussed credit portfolio optimization with $200 million in desired reductions over four quarters, past due loans at 0.96%, classified loans up, but net charge-offs better than expected, and ample capacity in ADC and CRE segments.
• Wally Wallace provided financial highlights, including diluted EPS of $0.71, margin guidance increased to 3.50% in Q4 2025 and 3.45% full year, and revised non-interest expense guidance.

In the first quarter, net interest income continued to improve quarter-over-quarter, with the net interest margin expanding 11 basis points to 3.44%. Deposits excluding brokered grew 7.2% on an annualized basis. Non-interest income was $15.6 million in Q1. Non-interest expense decreased to $62.1 million in Q1. The loan-to-deposit ratio excluding mortgage warehouse remained at 86.1%, below the 90% target. Tangible book value grew sequentially to $32.43, and the TCE ratio ended the quarter at 10.6%.

• Target ROA run rate of 1% or greater by Q4 2025.
• Net interest margin guidance increased to 3.50% in Q4 2025 and 3.45% full year, plus or minus 10 basis points.
• Non-interest expense guidance revised to low single digits in Q4 2025 and flat to down slightly for full year 2025.
• Anticipated annual pre-tax earnings improvement of approximately $1.5 million from mortgage business restructuring starting in the second half of the year.

• Macroeconomic uncertainty impacting market conditions.
• Competition affecting deposit costs, with some CD specials higher than expected.
• Potential delays or pullbacks in projects due to tariffs and cost inputs.
• Changes in mortgage business impacting non-interest income.

Q: Matt from Stephens asked about loan growth optimism, client selection process.

A: Lance Hall talked about pipelines building, Drake Mills mentioned opportunity in markets, Jim Crotwell said client selection project is in the seventh inning.

Q: Tim from Raymond James asked about loan growth, payoffs, hiring, fees.

A: Lance Hall discussed mixed bag in loan growth, hiring efforts, Wally Wallace talked about mortgage restructuring impact on fees.

Q: Mark from KBW asked about $10B threshold and share buyback.

A: Drake Mills said intentions to cross $10B if growth continues, and interest in share buyback and sub debt utilization.

Q: Manuel from D.A. Davidson asked about loan yields, deposit competition, Optimize Origin updates.

A: Lance Hall talked about loan yields, deposit competition focus, and updates on Argent and third-party benchmarking.