is Origin Bank Safe?
ORIGIN BANCORP, INC. (OBK)
RUSTON, LOUISIANA
TABLE OF CONTENTS
Deposits and Other Sources of Funds 6
Risks Related to Origin Bancorp, Inc.. 8
Statement of Stockholders’ Equity 30
Snapshot
Company Overview
Origin Bancorp, Inc. is a financial holding company headquartered in Ruston, Louisiana. Origin Bank, Origin Bancorp, Inc.’s wholly owned subsidiary, was founded in 1912 in Choudrant, Louisiana. Deeply rooted in the company’s history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities they serve. They provide a broad range of financial services and currently operate 59 banking centers located in Dallas/Fort Worth, East Texas, Houston, North Louisiana and Mississippi. At December 31, 2022, they had total assets of $9.69 billion, total loans held for investment (“LHFI”) of $7.09 billion, total deposits of $7.78 billion and total stockholders’ equity of $949.9 million.
In May 2018, the company completed an initial public offering of its common stock. The success of the business has thus far revolved around (1) a talented team of relationship bankers, executives and directors; (2) a diverse footprint with stable and growth-oriented markets; (3) differentiated and customized delivery and service; (4) their core deposit franchise and (5) an ability to significantly leverage their infrastructure and technology. These pillars of success and strategic execution of business have produced significant growth in the franchise. Since 2005, they have enhanced growth by integrating four bank acquisitions, entering de novo into several expansion markets, and expanding product offerings in mortgage lending and servicing as well as in insurance and private banking. To support this growth, Origin Bancorp, Inc. has raised over $589.6 million of new Tier 1 capital since 2006, including proceeds from their IPO, issued subordinated notes that are treated as Tier 2 capital for regulatory purposes in 2020, and completed an all stock merger valued at $307.8 million in 2022. Through these efforts, the company has successfully increased its market share in its key geographic markets.
On August 1, 2022, Origin Bancorp, Inc. completed its merger with BT Holdings, Inc. (“BTH”), a Texas corporation and the registered bank holding company of BTH Bank. This merger facilitated the merger of two companies that have been passionately committed to community banking for more than 100 years and are each deeply rooted in their communities. At the merger’s completion, Origin Bancorp, Inc. acquired 100% of the voting equity interests. They issued 6,794,910 shares of their common stock, and all outstanding BTH common stock options were converted into options to purchase an aggregate of 611,676 shares of Origin common stock. Based on the closing price of Origin’s common stock on July 29, 2022, of $43.07 per share, the aggregate consideration paid to holders of BTH common stock in connection with the merger was approximately $307.8 million. Goodwill of $94.5 million was recorded as a result of the transaction. Including the effects of known purchase accounting adjustments, as of the merger date, BTH had approximately $1.85 billion in assets, $1.23 billion in net loans and $1.57 billion in deposits. BTH formerly operated its banking business from 13 locations in East Texas, Dallas and Fort Worth, each of which now operates as a banking location of Origin Bank.
Strategy
Origin Bancorp, Inc. has historically been able to demonstrate their ability to grow loans and deposits organically. The company attributes its team of seasoned bankers as an important driver of this organic growth as they further develop banking relationships with current and potential clients. To promote organic growth, Origin Bancorp, Inc. strategically locates banking centers within its markets and employs highly experienced relationship bankers who proactively develop valuable relationships within the communities that the company serves. Through these relationships, their bankers are able to meet customers’ needs and capitalize on loan demand across a wide range of industries. This in turn provides for diversification of the company’s loan portfolio and allows it to focus on loans with quality credit characteristics.
The company focuses on generating and retaining core deposits and, in particular, non-interest-bearing deposits, as its primary funding source to support loan growth. Origin Bancorp, Inc. intends to continue pursuing selective acquisition opportunities that it expects will enhance its business model within its attractive geographic footprint and other complementary markets.
Origin Bancorp, Inc. values asset quality as a key to long-term financial success. The company seeks to maintain sound asset quality by moderating credit risk, adhering to prudent lending practices and promoting a relationship-based approach to commercial and consumer banking.
Origin Bancorp, Inc.’s offerings include traditional retail deposits, treasury management, commercial deposits, commercial and consumer loans, mortgage origination and servicing, insurance, mobile banking and online banking. Its client-base values the bank’s ability to provide the sophisticated products and services of larger banks, but with a local and agile decision-making process, a focus on building personal relationships, and a commitment to investing in the local economy and community. This allows the company to build Origin Bank by focusing on low-cost core deposit relationships, high credit quality loans, and fee income generated by value-added services. It also allows for the development of strong relationships across industries, creating a diverse commercial loan portfolio.
At December 31, 2022, Origin Bancorp, Inc.’s loans held for investment (“LHFI”) portfolio consisted of 32.9% commercial and industrial loans including mortgage warehouse loans, and 45.8% commercial real estate loans, including construction/land/land development loans. 34.1% of our total commercial real estate and construction/land/land development is owner occupied and 65.9% non-owner occupied. At December 31, 2022, approximately 32.0% of its deposits were noninterest-bearing demand deposits, and its cost of total deposits was 0.47% for the year ended December 31, 2022.
Markets of Operation
Origin Bancorp, Inc. currently operates in the markets of Dallas/Fort Worth, Houston, East Texas, North Louisiana and Mississippi.
The Dallas/Fort Worth and Houston markets represent two of the largest and fastest-growing metropolitan areas in the country. These markets provide attractive economic environments and offer significant deposit and lending opportunities as they are home to many large and mid-size corporations across a wide range of industries that include healthcare, manufacturing, higher education, agriculture, energy, transportation and technology.
Origin Bancorp, Inc.’s merger with BTH facilitated the company’s expansion into the East Texas market. The merger also bolstered the bank’s presence in the Dallas/ Fort Worth market.
The North Louisiana markets offer a stable economic climate with lower costs associated with deposit gathering and the company’s operational platform. Origin’s footprint in Mississippi comprises areas of significant commercial investment and additional growth opportunities.
Lending Activities
Origin Bancorp, Inc. originates loans primarily secured by single and multi-family real estate, residential construction and commercial buildings. Additionally, the bank makes loans to small and mid-sized businesses, as well as to consumers for a variety of purposes. The company’s loan portfolio at the dates indicated was comprised as follows:
Deposits and Other Sources of Funds
At December 31, 2022, Origin Bancorp, Inc. held $7.78 billion of total deposits and has grown deposits at a compound annual growth rate of 18.8% since December 31, 2003. At December 31, 2022, 95.8% of the company’s total deposits were core deposits (defined as total deposits excluding time deposits greater than $250,000 and brokered deposits). Origin Bancorp, Inc. obtains most of its deposits from individuals, small businesses and municipalities in its market areas. At December 31, 2022, 54.2% of Origin’s deposits were business deposits, 35.6% were consumer deposits and 10.2% were public fund deposits. One area of focus for the company has been to create a deposit-focused sales force of business development bankers who have extensive contacts and connections with targeted clients and centers of influence throughout our communities. The bank also has access to secondary sources of funding, including advances from the Federal Home Loan Bank of Dallas, borrowings at the Federal Reserve Discount Window and other borrowings.
Mortgage Banking
Origin Bancorp, Inc. is also engaged in the residential mortgage banking business, which primarily generates income from the sale of mortgage loans as well as the servicing of residential mortgage loans for others. They originate residential mortgage loans in their markets as a service to our existing customers and as a way to develop relationships with new customers in order to support our core banking strategy. Revenue from mortgage banking activities was $6.7 million, $12.9 million and $29.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Insurance
Origin Bancorp, Inc. offers a wide variety of commercial and personal property and casualty insurance products through its wholly-owned insurance subsidiary, Davison Insurance Agency, LLC, which conducts business under the trade names Lincoln Agency, LLC, Lincoln Agency Transportation Insurance, Pulley-White Insurance Agency, Reeves, Coon & Funderburg, Simoneaux & Wallace Agency and Thomas & Farr Agency. With over 30 years of growth in the insurance industry, the agency has primary market locations across Louisiana, but also serves customers in Texas, Mississippi, Arkansas and other states across the United States. In December 2021, the company acquired the remaining 62% interest in the Lincoln Agency, bringing its total ownership to 100% ownership. In addition, in December 2021, the company acquired Pulley-White located in Bossier City, Louisiana, thereby solidifying its presence as one of the larger independent insurance agencies in North Louisiana. Insurance commission and fee income was $22.9 million, $13.1 million and $12.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Risk Factors
Risks Related to Origin Bancorp, Inc.
The current uncertain economic conditions pose challenges and maintain the potential to adversely affect Origin Bancorp, Inc., its financial condition, and its operations. Furthmore, Origin Bancorp, Inc. and its operations, which primarily consist of lending in the form of loans, borrowing in the form of deposits, in addition, investing in securities, are sensitive to general business and economic conditions in the U.S. Origin Bancorp, Inc. decreased the expense for credit losses over the fiscal year 2021 as the economy began to recover; however, deteriorating conditions in the regional economies that the company serves, or in certain sectors of those economies, could drive losses beyond that which is provided for in Origin’s allowance for credit losses. Origin Bancorp, Inc. also could face the following risks in connection with the following events:
- the elevated inflationary pressures that remained throughout 2022, the beginning of 2023 and are likely to continue for the foreseeable future;
- economic stagnation or slowdown may affect consumer confidence levels and could resultingly cause cause adverse changes in payment patterns, resulting in increased delinquencies and default rates on loans and other credit facilities;
- ineffective monetary policy or other market conditions could cause rapid changes in interest rates and asset values that would have a materially adverse impact on the profitability and overall financial condition of the company;
- erosion in the fiscal condition of the U.S. Treasury could lead to new taxes that would limit the company’s ability to pursue growth and return profits to shareholders; and
Overall, if these conditions or those similar continue to exist or worsen in extremity, Origin Bancorp, Inc. could experience adverse effects on its financial condition.
On changes in interest rates:
Significant increases in market interest rates on loans, or the expectation that an increase may occur, could adversely affect Origin Bancorp, Inc.’s ability to generate new loans and, thus, its ability to grow. Starting in early 2022, the Federal Reserve responded to signs of inflation by rapidly increasing interest rates. They also expressed their future intention to take further actions to address inflationary pressures. These swift changes in interest rates may pose challenges in managing Origin Bancorp, Inc.’s loan and deposit portfolios, potentially impacting the company’s financial results. For instance, it could reduce the yields or spreads on the company’s assets and have other negative effects on the business. On the other hand, if interest rates decrease, it could lead to an increase in loan prepayments. The higher market interest rates may also make it difficult for Origin’s borrowers with floating-rate loans to meet their increased payment obligations. In such a scenario, it could result in a rise in non performing assets and charge-offs, which too would have an adverse impact on the business.
Further, Origin Bancorp, Inc.’s earnings and financial condition are largely dependent upon net interest income, which is the spread between interest earned on interest-earning assets and interest paid on interest-bearing liabilities. When interest-bearing liabilities mature or reprice more quickly, or to a greater degree than interest-earning assets in the same period, an increase in interest rates could reduce net interest income. Similarly, when interest-earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income. As of December 31, 2022, Origin Bancorp, Inc.’s net interest income simulations projected that 100 and 200 basis points (bps) increases in interest rates would result in a positive variance in net interest income of 3.64% and 7.10%, respectively, relative to the base case over the next 12 months, while decreases in interest rates of 100 and 200 bps would result in a negative variance in net interest income of 2.26% and 6.72%, respectively, relative to the base case over the next 12 months.
Additionally, an increase in interest rates may reduce the demand for loans and Origin Bancorp, Inc.’s ability to originate loans and decrease loan repayment rates. Conversely, a decrease in interest rates may affect the Bank through increased prepayments on the company’s loan portfolio and increased competition for deposits.
Origin Bancorp, Inc. also originates residential mortgage loans for sale and for its portfolio. The origination of residential mortgage loans is highly dependent upon the local real estate market and the level of interest rates.
On the effects of inflationary pressures and rising prices:
Inflation rose in 2022 at levels not seen for over 40 years. Such pressures continued throughout the start of 2023. Increased costs caused by inflation could make it more difficult for customers to repay their loans or meet other obligations which increases Origin Bancorp, Inc.’s credit risk. Sustained higher interest rates by the Federal Reserve may be needed to tame persistent inflationary price pressures, which could push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for Origin Bancorp, Inc.’s products and services, all of which, in turn, would adversely affect the business.
On unstable global economic conditions:
The global credit and financial markets have experienced extreme volatility and disruption, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, high rates of inflation, and uncertainty about economic stability. The general business strategy of Origin Bancorp, Inc. may be adversely affected by any such economic downturn, volatile business environment, hostile third-party action or continued unpredictable and unstable market conditions.
On real estate loans:
Because a significant portion of Origin Bancorp, Inc.’s loan portfolio consists of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing Origin’s loans and result in loan and other losses. Real estate values in many Texas, Louisiana and Mississippi markets have experienced periods of fluctuation over the last several years, and the market value of real estate can fluctuate significantly in a short period of time. At December 31, 2022, $4.73 billion, 66.7%, of the company’s total loans held for investment (LHFI) was loans with real estate as a primary component of collateral. Adverse changes affecting real estate values and the liquidity of real estate in one or more of the company’s markets could increase the credit risk associated with its loan portfolio, and could result in losses and adverse effects. Negative changes in the economy affecting real estate values and liquidity in these market areas could significantly impair the value of property pledged as collateral on loans and affect Origin’s ability to sell the collateral upon foreclosure without loss(es). Collateral may have to be sold for less than the outstanding balance of the loan, which could result in losses on such loans. Such declines and losses could have an adverse effect on business.
Origin Bancorp, Inc.’s loan portfolio includes non-owner-occupied commercial real estate loans for individuals and businesses for various purposes, which are secured by commercial properties, as well as real estate construction and development loans. At December 31, 2022, Origin Bancorp, Inc.’s non-owner-occupied commercial real estate loans totaled $1.46 billion, 20.6%, of the company’s total loan portfolio. These loans typically involve repayment dependent upon income generated, or expected to be generated, by the property securing the loan in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions. Such loans expose Origin Bancorp, Inc. to greater credit risk than loans secured by residential real estate because the collateral securing these loans typically cannot be liquidated as easily as residential real estate because there are fewer potential purchasers of the collateral. Unexpected deterioration in the credit quality of Origin’s commercial real estate loan portfolio would require the company to increase its provision for loan losses, which would reduce the Bank’s profitability, and could materially adversely affect the business.
A large portion of Origin Bancorp, Inc.’s loan portfolio consists of commercial loans secured by receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could increase exposure to credit losses. At December 31, 2022, approximately $2.05 billion, 28.9%, of the Bank’s total loans were commercial and industrial loans to businesses. These commercial loans are typically larger in amount than loans to individuals and, therefore, have the potential for larger losses on a single loan basis. Additionally, the repayment of commercial loans is subject to the ongoing business operations of the borrower. The collateral securing such loans generally includes movable property, such as equipment and inventory, which may decline in value more rapidly than anticipated, ultimately increasing exposure to increased credit risk. Additionally, negative changes in commodity prices and real estate values and liquidity could impair the value of the collateral securing these loans. Significant adverse changes in the economy or local market conditions in which Origin’s commercial lending customers operate could cause rapid declines in loan collectability and the values associated with general business assets resulting in inadequate collateral coverage that may result in credit losses. `
On the discontinuation of LIBOR:
On March 5, 2021, the United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates the London Interbank Offered Rate, announced that (i) 24 LIBOR settings would cease to exist immediately after December 31, 2021 (all seven euro LIBOR settings; all seven Swiss franc LIBOR settings; the Spot Next, 1-week, 2-month, and 12-month Japanese yen LIBOR settings; the overnight, 1-week, 2-month, and 12-month sterling LIBOR settings; and the 1-week and 2-month US dollar LIBOR settings); (ii) the 1-month, 3-month, 6-month and 12-month US LIBOR settings would cease to exist after June 30, 2023; and (iii) the FCA would consult on whether the remaining nine LIBOR settings should continue to be published on a synthetic basis for a certain period using the FCA’s proposed new powers that the UK government is legislating to grant to them.Central banks and regulators in a number of major jurisdictions (for example, United States, United Kingdom, European Union, Switzerland and Japan) have convened working groups to find, and implement the transition to, suitable replacements for interbank offered rates. Regardless, the federal banking agencies issued guidance on November 30, 2020, encouraging banks to (i) stop using LIBOR in new financial contracts no later than December 31, 2021; and (ii) either use a rate other than LIBOR or include clear language defining the alternative rate that will be applicable after LIBOR’s discontinuation. Origin Bancorp, Inc. suspended the utilization of LIBOR as an index for new and renewed loans and instrument contracts as of December 31, 2021.
To address the problem created by legacy financial contracts that incorporate LIBOR as their reference interest rate, but extend beyond the date after which LIBOR will be published, on March 15, 2022, Congress enacted the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”). On December 16, 2022, the Federal Reserve adopted a final rule implementing the LIBOR Act by adopting benchmark rates based on the Secured Overnight Financing Rate (“SOFR”) that will replace LIBOR in certain financial contracts after June 30, 2023.
Given LIBOR’s extensive use across financial markets, the transition away from LIBOR presents various risks and challenges to financial markets and institutions and could have a range of adverse effects. Origin Bancorp, Inc.’s commercial and consumer businesses issue, trade, and hold various products that are currently indexed to LIBOR. At December 31, 2022, Origin had approximately $1.07 billion of loans indexed to LIBOR. Such products that are indexed to LIBOR are significant, and if not sufficiently planned for, the discontinuation of LIBOR could result in financial, operational, legal, litigation, reputational or compliance risks to Origin Bancorp, Inc.
The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, swaps and other financial obligations or extensions of credit held by or due to Origin Bancorp, Inc. or on the company’s overall financial condition or results of operations. All Origin’s notes contain fallback language that allows us to replace the index in the event LIBOR becomes unavailable, or unascertainable, ceases to be published or is otherwise unreliable. Origin Bancorp, Inc. established that it determines the replacement index in its sole discretion and can include an effective adjustment to the spread. In addition, any inadequate fallback language may result in issues establishing an alternative index and adjusting the margin as applicable. In addition, in light of the FCA’s announced schedule for the cessation of LIBOR, Origin announced that the company will continue to renegotiate credit agreements executed prior to the addition of the LIBOR fallback language and extending beyond June 30, 2023 that utilize LIBOR as a factor in determining the interest rate, in order to replace LIBOR with SOFR or another new standard that is established. . Following the replacement of LIBOR, some or all of these credit agreements may bear interest at a lower interest rate, which could have an adverse impact on Origin’s results of operations.
On asset growth and heightened regulatory requirements:
As of December 31, 2022, Origin Bancorp, Inc.’s total assets amounted to $9.69 billion. In addition to the Bank’s current regulatory requirements, banks with $10 billion or more in total assets are, among other things: examined directly by the CFPB with respect to various federal consumer financial laws; subject to limits on debit interchange fees pursuant to Section 1075 of the Dodd-Frank Act, known as the Durbin Amendment; eligible for potentially a smaller dividend on holdings of Federal Reserve Bank stock; subject to the Volcker Rule’s limitations on proprietary trading and investments or sponsorship in covered funds; subject to the large bank assessment methodology for calculating FDIC insurance premiums; and no longer eligible to elect to be subject to the CBLR. Compliance with these additional ongoing requirements may necessitate additional personnel, the design and implementation of additional internal controls, or the incurrence of other significant expenses, among other things, any of which could have a significant adverse effect on Origin’s business.
Stock Performance
The following graph depicts a comparison between the cumulative total stockholder return on Origin Bancorp, Inc.’s common stock to the cumulative total stockholder return for the Nasdaq Composite Index, the Nasdaq U.S. Benchmark Banks TR Index and the Nasdaq OMX ABA Community Bank TR index for the period beginning on May 9, 2018, the first day of trading of our common stock on the Nasdaq Global Select Market under the symbol “OBK”, through December 31, 2022.
Quote
Overview
Last Price: $29.14 As of July 10, 2023
Year Range: $25.59 – $47.28
Investment Style: Small Value
Market Cap: 916.9646 Mil
Price/Sales: 2.46
Price/Book: 0.93
Forward Div Yield: 2.05%
Trailing Div Yield: 2.03%
Analysis
Summary
Valuation, as of July 10, 2023:
OBK is trading at a 31% discount. Its estimated fair value is $43.63, with an uncertainty rating of very high, while it is currently trading at $29.89. Any value less than $24.97 is the price which analysts consider the stock significantly undervalued. While analysts consider the stock significantly overvalued at any value greater than $76.23.
Competitor Breakdown
The banking business is highly competitive and the profitability of individual banks is dependent upon the entity’s ability to compete with other banks and nonbank financial service companies located in specific markets for lending opportunities, deposit funds, financial products, bankers and acquisition targets.
Origin Bancorp, Inc. is subject to vigorous competition in all aspects of our business from banks, savings banks, savings and loan associations, finance companies, credit unions, technology companies, and other financial service providers, such as money market funds, fintech companies, brokerage firms, consumer finance companies, asset-based nonbank lenders, insurance companies and certain other non-financial entities, including retail stores which may maintain their own credit programs and certain governmental organizations which may offer more favorable financing than Origin can.
Many other commercial banks, savings institutions and credit unions have offices in Origin Bancorp, Inc.’s primary market areas. The company’s competitors often have greater resources, broader geographic markets, higher lending limits, offer various services that the company may not currently offer and make broader use of media advertising, support services and electronic technology than Origin does. To offset these competitive disadvantages, Origin Bancorp, Inc. depends on its personal service, consistency, flexibility and the ability to make credit and other business decisions quickly.
| Origin Bancorp, Inc.OBK | Jeffersonville BancorpJFBC | TGR Financial IncTGRF | TriCo BancsharesTCBK |
| Last Price: 29.89 | Last Price: 19.00 | Last Price: 15.55 | Last Price: 33.97 |
| Fair Value: 43.63 | Fair Value: 24.57 | Fair Value: 16.57 | Fair Value: 51.31 |
| Price: 29.52 | Price: 19.00 | Price: 15.55 | Price: 33.53 |
| Change: ↓ 0.38 | 1.25% | Change: ↓ 1.00 | 5.00% | Change: — | Change: ↓ 0.44 | 1.30% |
| Undervalue Price: < 24.97 | Undervalue Price: < 16.01 | Undervalue Price: < 11.87 | Undervalue Price: < 29.66 |
| Overvalue Price: >76.23 | Overvalue Price: > 37.69 | Overvalue Price: > 23.12 | Overvalue Price: > 88.75 |
| Assessment: 31% Discount | Assessment: 23% Discount | Assessment: 6% Discount | Assessment: 34% Discount |
| Price/Fair Value: 0.69 | Price/Fair Value: 0.77 | Price/Fair Value: 0.94 | Price/Fair Value: 0.66 |
| Price/Sales: 2.46 | Price/Sales: 2.97 | Price/Sales: 5.09 | Price/Sales: 2.67 |
| Price/Book: 0.93 | Price/Book: 1.17 | Price/Book: 1.53 | Price/Book: 1.03 |
| Price/Earning: 8.89 | Price/Earning: 8.64 | Price/Earning: 13.39 | Price/Earning: 8.01 |
Sustainability
The ESG risk ratings measure the degree to which Origin’s economic value at risk is driven by environmental, social, and governance factors. In other words, ESG risk ratings measure the unmanaged ESG Risks represented as a quantitative score. Unmanaged Risk is measured on an open-ended scale starting at zero (no risk) with lower scores representing less unmanaged risk.
Risk Rating Assessment
Origin Bancorp, Inc. has an ESG Risk Rating Assessment of 2 out of 5. Its Risk Rating is 30.64, which is high.
Risk Rating Breakdown
Overall, the Origin’s level of exposure is rated as a 46.0, which correlates to a medium level of exposure. Exposure represents a company’s vulnerability to ESG risks driven by their business model. Exposure is assessed at the subindustry level and then specified at the company level. Scoring ranges from 0-55+ with categories of low, medium, and high-risk exposure.
Management measures a company’s ability to manage ESG risks through its commitments and actions. Management assesses a company’s efficiency on ESG programs, practices, and policies. Management score ranges from 0-100% showing how much manageable risk a company is managing. 35.6% of Origin’s manageable risk is deemed managed, while 64.5% is deemed unmanaged.
Trailing Returns
Key Statistics
Overview
Valuation, As of July 10, 2023
Price/Book: 0.93
Price/Cash Flow: 5.40
Price/Sales: 2.46
Price/Earnings: 9.34
Financial Health, As of March 31, 2023
Debt/Equity: 1.08
Growth (3-Year Annualized), As of Dec 31, 2022
Revenue %: 14.93
Net Income %: 17.64
Diluted EPS %: 12.89
Profitability, As of March 31, 2023
Return on Assets %: 0.99
Return on Equity %: 10.94
Net Margin %: 26.31
Growth
| Revenue % | 2017-12 | 2018-12 | 2019-12 | 2020-12 | 2021-12 | 2022-12 | Latest Qtr. |
| Year Over Year | -2.11 | 23.37 | 12.61 | 15.77 | 6.25 | 23.41 | 36.73 |
| 3-Year Average | – | – | 10.79 | 17.16 | 11.47 | 14.93 | – |
| 5-Year Average | – | – | – | – | 10.84 | 16.09 | – |
| Net Income % | 2017-12 | 2018-12 | 2019-12 | 2020-12 | 2021-12 | 2022-12 | Latest Qtr. |
| Year Over Year | 14.16 | 251.8 | 4.41 | -32.52 | 198.56 | -19.19 | 17.5 |
| 3-Year Average | – | – | 61.26 | 35.33 | 28.13 | 17.64 | – |
| 5-Year Average | – | – | – | – | 53.23 | 43 | – |
| EPS % | 2017-12 | 2018-12 | 2019-12 | 2020-12 | 2021-12 | 2022-12 | Latest Qtr. |
| Year Over Year | 26.15 | 372.1 | 3.64 | -32.02 | 196.77 | -28.7 | -9.2 |
| 3-Year Average | – | – | 83.44 | 49.27 | 27.87 | 12.89 | – |
| 5-Year Average | – | – | – | – | 65.6 | 47.74 | – |
Operating and Efficiency
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | Current | |
| Net Margin % | 5.2 | 6.42 | 25.77 | 25.35 | 14.77 | 41.51 | 27.18 | 26.31 |
| Tax Rate % | 18.5 | 28.38 | 17.36 | 19.03 | 18.03 | 18.04 | 18.36 | 18.49 |
| Return on Asset % | 0.2 | 0.24 | 1.08 | 1.06 | 0.56 | 1.4 | 1 | 0.99 |
| Return on Equity % | 2.29 | 2.77 | 10.75 | 9.38 | 5.83 | 15.76 | 10.44 | 10.94 |
| Fixed Assets Turnover | 1.8 | 1.86 | 2.48 | 2.73 | 3.03 | 3.22 | 3.57 | 3.76 |
| Asset Turnover | 0.04 | 0.04 | 0.04 | 0.04 | 0.04 | 0.03 | 0.04 | 0.04 |
As of March 31, 2023
Financial Health
| Liquidity/Financial Health | 2016-12 | 2017-12 | 2018-12 | 2019-12 | 2020-12 | 2021-12 | 2022-12 | Latest Qtr. |
| Financial Leverage | 11.47 | 11.7 | 8.77 | 8.89 | 11.79 | 10.77 | 10.2 | 10.44 |
| Debt/Equity | 0.34 | 0.34 | 0.83 | 0.71 | 0.66 | 0.57 | 0.25 | 0.22 |
| Book Value/Share | – | – | 22.42 | 25.06 | 26.7 | 29.72 | 29.5 | 30.86 |
As of March 31, 2023
Cash Flow
| Cash Flow Ratios | 2016-12 | 2017-12 | 2018-12 | 2019-12 | 2020-12 | 2021-12 | 2022-12 | TTM |
| Operating Cash Flow Growth % | – | 11.14 | 28.31 | -20.91 | -98.56 | 19.233.15 | -15.07 | – |
| Free Cash Flow Growth % YOY | – | 23.52 | 25.54 | -30.33 | – | – | -17.59 | – |
| Cap Ex as a % of Sales | 5.07 | 1.98 | 2.9 | 5.25 | 2.92 | 1.92 | 2.62 | 3.75 |
| Free Cash Flow/Sales % | 29.85 | 37.66 | 38.32 | 23.71 | -2.56 | 63.66 | 42.51 | 41.79 |
| Free Cash Flow/Net Income | 3.63 | 3.93 | 1.4 | 0.94 | -0.17 | 1.53 | 1.56 | 1.59 |
| Free Cash Flow/Share | – | – | 2.75 | 1.74 | 1.13 | 5.51 | 4.55 | 5.13 |
As of March 31, 2023
Financials
Profitability
| DEC ’22 | DEC ’21 | DEC ’20 | DEC ’19 | DEC ’18 | DEC ’17 | DEC ’16 | |
| Net Income | 87.7 | 108.5 | 36.4 | 53.9 | 52.6 | 15.0 | 8.1 |
| Pretax Income | 107.4 | 132.4 | 44.4 | 66.5 | 62.4 | 20.5 | 15.8 |
| Revenue | 340.2 | 280.8 | 235.3 | 217.0 | 198.2 | 169.5 | 172.0 |
Ratios
| DEC ’22 | DEC ’21 | DEC ’20 | DEC ’19 | DEC ’18 | DEC ’17 | DEC ’16 | |
| Return on Equity | 10.44 | 15.76 | 5.83 | 9.38 | 10.85 | 3.58 | – |
| Return on Common Equity | 10.44 | 15.76 | 5.83 | 9.38 | 11.21 | 2.98 | – |
| Return on Assets | 1.00 | 1.40 | 0.56 | 1.06 | 1.17 | 0.36 | – |
| Return on Earning Assets | 1.07 | 1.48 | 0.59 | 1.13 | 1.26 | 0.39 | – |
| Net Interest Margin | 3.39 | 3.06 | 3.14 | 3.69 | 3.75 | 3.49 | 3.37 |
| Efficiency Ratio | 60.27 | 56.31 | 59.31 | 65.43 | 67.41 | 81.93 | 71.86 |
| Non-Interest Income / Revenue | 17.44 | 19.10 | 16.79 | 17.70 | 19.21 | 20.10 | 26.19 |
| Net Income / Employee (actual) | 86,761 | 136,193 | 48,541 | 71,747 | 69,164 | 21,933 | 11,757 |
All figures in millions of U.S. Dollars except labeled items.
Loans & Deposits
| DEC ’22 | DEC ’21 | DEC ’20 | DEC ’19 | DEC ’18 | DEC ’17 | DEC ’16 | |
| Loans & Leases | |||||||
| Real Estate Mortgage Loans | 5013 | 3760 | 3889 | 2779 | 2496 | 2231 | 1954 |
| Commercial & Industrial Loans | 2051 | 1454 | 1818 | 1343 | 1273 | 989 | 1136 |
| Consumer & Installment Loans | 26 | 17 | 18 | 21 | 21 | 21 | 22 |
| Percent of Total Loans (%) | |||||||
| Real Estate Mortgage Loans | 70.70 | 71.88 | 67.93 | 67.07 | 65.86 | 68.85 | 62.80 |
| Deposits | |||||||
| Demand Deposits and Other Transaction Accounts | 6662 | 5780 | 4450 | 3131 | 2506 | 2472 | 2362 |
| Savings and Time Deposits | 1114 | 791 | 870 | 945 | 945 | 764 | 786 |
| Other/Unspecified Deposits | – | – | 431 | 153 | 332 | 276 | 295 |
| Total Deposits | 7776 | 6571 | 5751 | 4229 | 3783 | 3512 | 3443 |
| Percent of Total Deposits (%) | |||||||
| Demand Deposits and Other Transaction Accounts | 85.68 | 87.96 | 77.38 | 74.04 | 66.23 | 70.38 | 68.60 |
| Other/Unspecified Deposits | – | – | 7.50 | 3.61 | 8.78 | 7.86 | 8.58 |
All figures in millions of U.S. Dollars.
Valuation
| DEC ’22 | DEC ’21 | DEC ’20 | DEC ’19 | DEC ’18 | DEC ’17 | DEC ’16 | |
| Per Share | |||||||
| EPS (recurring) | 3.44 | 4.60 | 1.55 | 2.28 | 2.20 | 0.75 | 0.36 |
| EPS (diluted) | 3.28 | 4.60 | 1.55 | 2.28 | 2.20 | 0.44 | 0.36 |
| Dividends per Share | 0.58 | 0.49 | 0.38 | 0.25 | 0.10 | – | – |
| Book Value per Share | 30.90 | 30.75 | 27.53 | 25.52 | 23.17 | 15.73 | 15.72 |
| Tangible Book Value per Share | 25.09 | 28.59 | 26.23 | 24.18 | 21.79 | 14.65 | 14.62 |
| Shares | |||||||
| Diluted Shares Outstanding | 26.8 | 23.6 | 23.5 | 23.7 | 22.2 | 22.6 | 22.6 |
| Basic Shares Outstanding | 26.6 | 23.4 | 23.4 | 23.5 | 22.0 | 22.6 | 22.6 |
| Total Shares Outstanding | 30.7 | 23.7 | 23.5 | 23.5 | 23.7 | 22.6 | 22.6 |
| Ratios | |||||||
| Price / Earnings | 11.20 | 9.34 | 17.96 | 16.63 | 15.49 | – | – |
| Price / Book Value | 1.19 | 1.40 | 1.01 | 1.48 | 1.47 | – | – |
| Price/Tangible Book Value | 1.46 | 1.50 | 1.06 | 1.57 | 1.56 | – | – |
| Dividend Yield (%) | 1.58 | 1.14 | 1.36 | 0.66 | 0.29 | – | – |
All figures in millions of U.S. Dollars except per share items.
Income Statement
Summary:
| DEC ’22 | DEC ’21 | DEC ’20 | DEC ’19 | DEC ’18 | DEC ’17 | DEC ’16 | |
| Interest Income | 326.6 | 241.7 | 228.702 | 227.1 | 188.1 | 152.6 | 139.2 |
| Total Interest Expense | -51.3 | -25.4 | -37.2 | -53.4 | -34.6 | -22.3 | -18.5 |
| Loan Loss Provision | -24.7 | 10.8 | -59.9 | -9.6 | -1.0 | -8.3 | -30.1 |
| Revenue | 332.6 | 278.4 | 256.188 | 220.2 | 194.7 | 159.5 | 162.6 |
| Net Interest Income | 275.3 | 216.3 | 191.536 | 173.7 | 153.5 | 130.3 | 120.7 |
| Net Int. Inc. after Loan Loss Provision | 250.6 | 227.0 | 131.636 | 164.1 | 152.4 | 122.0 | 90.6 |
| Pre-Provision Net Revenue | 132.1 | 121.7 | 104.253 | 76.1 | 63.5 | 28.8 | 45.8 |
| Net Income | 87.7 | 108.5 | 36.357 | 53.9 | 51.6 | 14.7 | 12.9 |
GAAP/IFRS Income Statement:
Balance Sheet
Securities
Origin Bancorp, Inc.’s securities portfolio is the second largest component of earning assets and provides a significant source of revenue. Securities within the portfolio are classified as either held-to-maturity, available-for-sale or at fair value through income, based on the intent and objective of the investment and the ability to hold to maturity. The Bank’s securities portfolio totaled $1.66 billion at December 31, 2022, representing an 8.1% increase of $124.1 million from December 31. 2021. On August 1, 2022, Origin Bancorp, Inc. acquired $456.8 million of available for sale securities from BTH, $447.5 million of which were sold during Q3 of 2022, and majority of the funds were used to pay down Federal Home Loan Bank Advances.
The following table presents the composition of Origin Bancorp, Inc.’s securities portfolio:
Deposits
Deposits are the primary funding source used to fund Origin’s loans, investments, and operating needs. The Bank offers a variety of products including non-interest and interest-bearing checking accounts, savings deposits, money market accounts and time deposits.
Origin Bancorp, Inc.’s deposit balances were impacted by the company’s merger with BTH. At the merger date, Origin assumed BTH deposits of $758.4 million in interest-bearing demand deposits, $398.1 million in noninterest-bearing demand deposits, $302.5 million in time deposits and $107.5 million in savings deposits, resulting in an overall $1.57 billion increase to the company’s deposit balances at the merger date.
The following table sets forth the deposit mix:
Statement of Stockholders’ Equity
Statement of Cash Flows
Institutional Ownership
Institutional investors purchased a net $689.2 thousand shares of OBK during the quarter ended June 2019. This may signal that the smart money is gaining interest in this company as the 53.96% of shares outstanding that institutional investors hold is actually below the Regional Banks industry average.
Top Ten Owners of Origin Bancorp, Inc.
| Stockholder | Stake | Shares Owned | Total Value ($) | Shares Bought/Sold | Total Change |
| T. Rowe Price | 12.38% | 3,811,273 | 108,430,717 | +399,973 | +11.72% |
| BlackRock | 6.15% | 1,893,230 | 53,862,394 | -8,116 | -0.43% |
| The Vanguard Group, Inc. | 4.89% | 1,505,568 | 42,833,410 | +15,940 | +1.07% |
| American Century | 3.59% | 1,106,074 | 31,467,805 | +133,834 | +13.77% |
| SSgA Funds Management, Inc. | 2.16% | 665,974 | 18,946,960 | +38,858 | +6.20% |
| Goldman Sachs Asset Management LP | 1.74% | 536,819 | 15,272,501 | +34,422 | +6.85% |
| Geode Capital Management LLC | 1.64% | 503,174 | 14,315,300 | +17,998 | +3.71% |
| Dimensional Fund Advisors LP | 1.57% | 483,846 | 13,765,419 | +116,089 | +31.57% |
| Royce & Associates LP | 1.54% | 474,199 | 13,490,962 | +71,958 | +17.89% |
| Tributary Capital Management LLC | 1.00% | 307,921 | 8,760,352 | +68,661 | +28.70% |
Top Ten Mutual Funds Holding Origin Bancorp, Inc.
| Mutual Fund | Stake | Shares Owned | Total Value ($) | Shares Bought/Sold | Total Change |
| T. Rowe Price Small Cap Stock Fund | 3.42% | 1,052,296 | 29,937,821 | +121,900 | +13.10% |
| Vanguard Total Stock Market ETF | 2.98% | 915,781 | 26,053,969 | +3,630 | +0.40% |
| T Rowe Price Small Cap Value Fund | 2.93% | 903,049 | 25,691,744 | +97,700 | +12.13% |
| American Century Small Cap Value Fund | 2.52% | 775,000 | 22,048,750 | +75,731 | +10.83% |
| iShares Russell 2000 ETF | 1.67% | 515,102 | 14,654,652 | +5,429 | +1.07% |
| T Rowe Price Institutional Small-Cap Stock Fund | 1.67% | 514,766 | 14,645,093 | +24,127 | +4.92% |
| Vanguard Extended Market Index Fund | 1.32% | 405,980 | 11,550,131 | -3,231 | -0.79% |
| Royce Small-Cap Total Return Fund | 1.11% | 343,028 | 9,759,147 | +35,700 | +11.62% |
| RMB Mendon Financial Services Fund | 0.80% | 245,000 | 6,970,250 | +10,000 | +4.26% |
| iShares Russell 2000 Value ETF | 0.76% | 232,550 | 6,616,048 | 0 | 0.00% |
References
FactSet. “Origin Bancorp, Inc.” FactSet, https://my.apps.factset.com/navigator/company-security/snapshot/OBK-US. Accessed 11 July 2023.
Morningstar Investment Research Center. “Origin Bancorp, Inc.” Morningstar, https://ar-morningstar-com.eu1.proxy.openathens.net/mirc/equity/sal.aspx?s=0P0001D7BI#Morningstar_Report. Accessed 11 July 2023.
Origin Bancorp, Inc. Form 10-K. 31 December 2022. Origin Bank, https://ir.origin.bank/node/8781/html.
Origin Bancorp, Inc. Form 10-Q. 31 March 2023. Origin Bank, https://ir.origin.bank/node/8966/html.
is Origin Bank Safe?
is Origin Bank Safe?
