Origin Bancorp, Inc Reports Earnings for Second Quarter 2023.

RUSTON, La: Origin Bancorp, Inc. (NYSE: OBK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $21.8 million, or $0.70 diluted earnings per share for the quarter ended June 30, 2023, compared to net income of $24.3 million, or $0.79 diluted earnings per share, for the quarter ended March 31, 2023. Adjusted pre-tax, pre-provision ("adjusted PTPP")(1) earnings were $31.6 million, for the quarter ended June 30, 2023.

"As we enter the second half of the year, Origin is operating from a position of strength as we continue to execute on our long-term strategy," said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. "While we are mindful of the challenges facing the entire industry, this company has proven that we can maximize the opportunities before us, and come out of economic cycles a stronger, more efficient company."

(1) Adjusted PTPP earnings is a non-GAAP financial measure, please see the last few pages of this document for a reconciliation of this alternative financial measure to its comparable GAAP measure.

Financial Highlights

Total loans held for investment ("LHFI"), excluding mortgage warehouse lines of credit, were $7.09 billion at June 30, 2023, reflecting an increase of $46.8 million, or 0.7%, compared to March 31, 2023.

Total deposits were $8.49 billion at June 30, 2023, reflecting an increase of $315.7 million, or 3.9%, compared to March 31, 2023.

Net interest income was $75.3 million for the quarter ended June 30, 2023, reflecting a decrease of $1.9 million, or 2.4%, compared to the linked quarter.

Book value per common share was $32.33 at June 30, 2023, reflecting an increase of $0.08, or 0.2%, compared to the linked quarter. Tangible book value per common share(1) was $26.71 at June 30, 2023, reflecting an increase of $0.18, or 0.7%, compared to the linked quarter.

At June 30, 2023, and March 31, 2023, Company level common equity Tier 1 capital to risk-weighted assets was 11.01%, and 11.08%, respectively, the Tier 1 leverage ratio was 9.65% and 9.79%, respectively, and the total capital ratio was 14.11% and 14.30%, respectively. Tangible common equity to tangible assets(1) was 8.25% at June 30, 2023, compared to 8.02% at March 31, 2023.

LHFI, excluding mortgage warehouse lines of credit, to deposits were 83.5% at June 30, 2023, compared to 86.1% at March 31, 2023. Cash and liquid securities as a percentage of total assets was 11.1% at June 30, 2023, compared to 14.3% at March 31, 2023.

(1) Tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures. Please see the last few pages of this document for a reconciliation of these alternative financial measures to their comparable GAAP measures.

Results of Operations for the Three Months Ended June 30, 2023

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended June 30, 2023, was $75.3 million, a decrease of $1.9 million, or 2.4%, compared to the linked quarter, due primarily to a $14.0 million increase in total interest expense, partially offset by a $12.2 million increase in total interest income. Increases in interest rates drove an $8.9 million increase in total deposit interest expense, and higher average interest-bearing deposit balances drove another $3.1 million increase in total deposit interest expense, primarily due to higher average brokered and time deposit balances. An additional $1.9 million increase in total interest expense was due to higher average balances of FHLB advances and other borrowings during the current quarter compared to the linked quarter. Increases in average interest-earning asset balances drove a $6.1 million increase in total interest income, of which $4.3 million was due to higher average LHFI balances, while increases in interest rates on average interest-earning assets drove another $6.1 million increase in total interest income, of which $4.7 million was due to higher interest rates on LHFI.

The net purchase accounting accretion declined to $530,000, a decrease of $1.2 million, for the three months ended June 30, 2023, compared to the three months ended March 31, 2023. The table below presents the estimated loan and deposit accretion and subordinated indebtedness amortization resulting from merger purchase accounting adjustments for the periods shown.

Loan

Accretion Income

Deposit Accretion Income

Subordinated Indebtedness

Amortization Expense

Total...