Origin Bancorp Reports 23.5% Decline in Net Income, 3.9% Growth in Loans Held for Investment

Origin Bancorp, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting several key performance metrics and strategic developments.

For the three months ended September 30, 2024, net income was $18.6 million, a decrease of 23.5% from $24.3 million in the same period of 2023. Basic earnings per share fell to $0.60 from $0.79 year-over-year. For the nine months, net income totaled $62.2 million, down 11.6% from $70.4 million in the prior year. The decline in profitability was attributed to increased noninterest expenses and higher provisions for credit losses, which rose to $4.6 million from $3.5 million in the prior year.

Total interest income for the third quarter increased to $144.3 million, up from $135.5 million, while interest expense also rose significantly, leading to a net interest income of $74.8 million, a slight increase from $74.1 million in 2023. The net interest margin improved to 3.18%, up from 3.14% in the previous year, driven by higher yields on loans held for investment (LHFI), which increased by $11.9 million due to both higher rates and average balances.

Total loans held for investment reached $7.96 billion, marking a 3.9% increase from $7.66 billion at the end of 2023. The loan portfolio composition included a notable rise in commercial real estate loans, which increased to $2.52 billion, and residential real estate loans, which rose to $1.85 billion. Total deposits also grew by 2.9% to $8.49 billion, with significant contributions from money market and time deposits.

On the strategic front, the company faced challenges related to questioned loan activities involving a former banker, leading to increased provisions for credit losses and legal expenses. The allowance for loan credit losses to nonperforming loans decreased to 149.35% from 301.12% year-over-year, reflecting a rise in nonperforming loans primarily linked to five specific loan relationships.

The company’s total assets increased to $9.97 billion, up 2.5% from the previous year, with cash and cash equivalents rising to $321.2 million. Stockholders' equity also improved to $1.15 billion, a 7.8% increase from the start of the year.

Overall, while Origin Bancorp experienced growth in its loan and deposit portfolios, profitability was impacted by rising expenses and credit loss provisions, alongside ongoing scrutiny of certain loan relationships.