Origin Bancorp Q1 Earnings Call Highlights

Key Points

• Management says the “Optimize Origin” program is driving momentum with a Q1 return on assets of 1.11%; loans held for investment rose about $200M (2.8%) and deposits increased roughly $234M (2.8%), led by Texas and the Southeast with a Q2 pipeline of ~$150–$160M.
• Credit quality remained stable, with past dues 30–89 days at 0.22%, net charge-offs of $2.8M (annualized 0.15%), and the allowance for credit losses rising modestly to $99M (1.34% of loans).
• Capital returns and margin outlook strengthened: the board raised the quarterly dividend to $0.25 from $0.15 and repurchased 165,500 shares while tangible book value reached $35.61; management expects NIM to rebound ~10 bps in Q2 and finish the year around 3.7–3.8% assuming two 25‑bp Fed cuts.

Origin Bancorp NYSE: OBK executives emphasized what they described as improving momentum in the first quarter of 2026, pointing to disciplined loan and deposit growth, stable credit quality metrics, and updated capital return actions, including a higher dividend.

Management highlights “Optimize Origin” momentum

Chairman, President, and CEO Drake Mills said the company’s recent results reflect progress from its “Optimize Origin” initiative, which management framed as a long-term operating approach rather than a one-time project. Mills highlighted return on assets of 1.11% in the first quarter, saying the company is “on pace to achieve our target run rate by year-end.”

Mills also pointed to what he called “generational dislocation” in the banking industry, particularly in Texas and the Southeast, saying the disruption is creating opportunities to add relationships and hire talent. President and CEO of Origin Bank Lance Hall echoed that view, saying the interest from bankers looking to join the company has been “exceptional.” Hall said Origin added 15 bankers to its production teams since the start of the year.

Hall also said the company hired Brad Waldhoff as Chief Technology and Innovation Officer during the quarter. Hall said Waldhoff is focused on aligning “technology, data, and AI more directly with business outcomes,” with goals including improved productivity, faster decision-making, and better client experiences.

Loan and deposit growth led by Texas and the Southeast

Hall said first-quarter growth was driven primarily by Houston, Dallas-Fort Worth, and the Southeast markets and emphasized that the company is balancing loan growth with core deposit generation and pricing discipline. Loans held for investment (excluding mortgage warehouse) increased $200 million, or 2.8%, from the prior quarter, he said. Total deposits, adjusted for deposits sold at the end of 2025, increased $234 million, or 2.8%.

In response to analyst questions, Hall provided additional detail on the composition of loan growth. He said approximately $184 million of the growth came from C&I lending and that production was concentrated in Texas and the Southeast. He said the company is seeing competitive pricing pressure in certain C&I categories, but added that Origin remained disciplined, with new loan pricing “between about 6.3% and 6.5%.”

Hall described first-quarter growth as broad-based across industries, citing examples including industrial services, transportation, construction equipment, and “a little bit of clean energy, renewable stuff.”

On pipeline commentary, Hall said the company had referenced a $190 million pipeline for the first quarter and ended up “kind of right at that level.” For the second quarter, he said the company is seeing “about $150-$160 million” in pipeline activity.

Asked whether first-quarter C&I growth was more driven by new customers or existing relationships, Hall said he did not have an exact figure but believed “the vast majority of it was more business from existing customers.” He also said he believed incentives tied to the current administration are “paying off” in driving business activity.

Credit metrics remained stable, allowance increased modestly

Chief Risk Officer Jim Crotwell reported what he called “continued sound credit metrics” in the first quarter. He said total past dues 30-89 days rose to 0.22%, which he noted compared favorably to the prior four-quarter average of 0.25%.

Net charge-offs were $2.8 million, down from $3.2 million in the previous quarter, representing an annualized charge-off rate of 0.15%, Crotwell said. Non-performing assets increased to $6.4 million, and the ratio increased from 1.07% of loans to 1.12%, remaining below the 1.18% reported in the third quarter of 2025, he added.

Classified assets increased modestly to 1.97% of total loans from 1.93%, an increase of $6.3 million, driven “primarily by the downgrade of non-relationships,” partially offset by reductions in six relationships, Crotwell said. The allowance for credit losses increased $2.2 million to $99 million, remaining stable at 1.34% of total loans net of mortgage warehouse, he said.

Crotwell added that the company did not make significant changes to CECL model assumptions and said Origin continues to have “ample capacity” in its ADC and CRE lending, citing funding-to-risk-based capital levels of 48% for ADC and 233% for CRE.

Margin outlook and fee income drivers

CFO Wally Wallace said the company reported diluted earnings per share of $0.89 in the first quarter. He said notable items resulted in a combined net expense of $577,000, which he quantified as $0.01 of EPS pressure.

On profitability metrics, Wallace said pre-tax, pre-provision earnings were $40.2 million in the quarter. Excluding notable items, he said pre-tax, pre-provision earnings were $40.8 million, with an annualized pre-tax, pre-provision ROA of 1.61%.

Wallace said net interest margin contracted two basis points to 3.71%, consistent with guidance for slight compression. Looking ahead, he said the company expects margin to “bounce back in Q2 by about 10 basis points, plus or minus,” attributing the expected improvement to excess liquidity from seasonal public funds balances running off. By the fourth quarter, Wallace said Origin continues to anticipate NIM in the 3.7% to 3.8% range, with a “bias remaining at the higher end.”

Wallace said the company’s outlook now includes 25-basis-point Federal Reserve rate cuts in July and December. In response to a question about a scenario without rate cuts, he said approximately $350 million of loans are maturing for the rest of the year at an average rate around 5%, while new loans were being priced in the 6.30% to 6.50% range. If the July cut does not occur, he said it could provide “a little bit of extra boost” from repricing, though he characterized the impact as “not hugely material.”

On noninterest income, Wallace said Origin reported $16.8 million in the first quarter. Excluding notable items, he said noninterest income increased slightly to $16.4 million from $16.3 million in the fourth quarter, as $3.3 million in net losses on limited partnership investments offset seasonal strength in the company’s insurance business. Wallace maintained his outlook for full-year noninterest income growth in the mid- to high-single digits, but said the company was “currently tracking on the lower end.”

Noninterest expense was $63.8 million, Wallace said. Excluding notable items, he said noninterest expense increased to $62.8 million from $61.5 million in the prior quarter, while the company maintained its outlook for mid-single-digit expense growth for the year.

Capital actions: dividend increase and share repurchases

Wallace said tangible book value per share increased to $35.61, marking the fourteenth consecutive quarter of growth, and tangible common equity ended the quarter at 11%.

During the first quarter, Origin repurchased 165,500 shares, Wallace said. He also noted the board approved an increase in the quarterly dividend to $0.25 from $0.15. Wallace said management views the dividend increase, alongside repurchases, as reflecting capital strength and “a more consistent earnings stream to support dividend payout levels closer to peers.”

In the Q&A, Mills said the company’s capital deployment approach remains focused on organic growth while also becoming “more peer-like” in returning excess capital. On M&A, Mills said, “M&A is just not on the table at this point,” citing the company’s organic growth opportunities, culture, and emphasis on credit quality.

In closing remarks, Mills said Origin is seeing “an acceleration of high quality production” across its markets and emphasized that the company intends to remain disciplined on growth, pricing, and credit as it seeks to build earnings momentum.

About Origin Bancorp NYSE: OBK

Origin Bancorp, Inc NYSE: OBK is a bank holding company based in Atlanta, Georgia, and is the parent of Origin Bank, a full-service commercial banking franchise. The company provides a broad range of financial products and services to individuals, small and middle-market businesses, and institutional clients across the southeastern United States.

Through Origin Bank, the company offers a variety of deposit products, including checking and savings accounts, money market accounts, and certificates of deposit.

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