10q10k10q10k.net

What changed in Origin Bancorp, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Origin Bancorp, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+473 added−485 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in Origin Bancorp, Inc.'s 2024 10-K

473 paragraphs added · 485 removed · 356 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

120 edited+54 added−26 removed127 unchanged
Biggest changeThese laws and regulations include, among numerous other things, provisions that: • limit the interest and other charges collected or contracted for by Origin Bank, including rules respecting the terms of credit cards and of debit card overdrafts; • govern Origin Bank’s disclosures of credit terms to consumer borrowers; • require Origin Bank to provide information to enable the public and public officials to determine whether it is fulfilling its obligation to help meet the housing needs of the communities it serves; • prohibit Origin Bank from discriminating on the basis of race, creed or other prohibited factors when it makes decisions to extend credit; • govern the manner in which Origin Bank may collect consumer debts; and • prohibit unfair, deceptive or abusive acts or practices in the provision of consumer financial products and services. 23 Table of Contents Mortgage Regulation The Consumer Financial Protection Bureau (“CFPB”) adopted a rule that implements the ability-to-repay and qualified mortgage provisions of the Dodd-Frank Act (the “ATR/QM rule”), which requires lenders to consider, among other things, income, employment status, assets, payment amounts, and credit history before approving a mortgage, and provides a compliance “safe harbor” for lenders that issue certain “qualified mortgages.” The ATR/QM rule defines a “qualified mortgage” to have certain specified characteristics, and generally prohibits loans with negative amortization, interest-only payments, balloon payments, or terms exceeding 30 years from being qualified mortgages.
Biggest changeThese laws and regulations include, among numerous other things, provisions that: • limit the interest and other charges collected or contracted for by Origin Bank, including rules respecting the terms of credit cards and of debit card overdrafts; • govern Origin Bank’s disclosures of credit terms to consumer borrowers; • require Origin Bank to provide information to enable the public and public officials to determine whether it is fulfilling its obligation to help meet the housing needs of the communities it serves; • prohibit Origin Bank from discriminating on the basis of race, creed or other prohibited factors when it makes decisions to extend credit; • govern the manner in which Origin Bank may collect consumer debts; and • prohibit unfair, deceptive or abusive acts or practices in the provision of consumer financial products and services.
To support our growth, we have raised over $589.6 million of new Tier 1 capital since 2006, including proceeds from our initial public offering completed in May 2018, we 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.
To support our growth, we have raised over $589.6 million of new Tier 1 capital since 2006, including proceeds from our initial public offering completed in May 2018, we issued subordinated notes that are treated as Tier 2 capital for regulatory purposes in 2020, and we completed an all stock merger valued at $307.8 million in 2022.
A bank may, however, offer combined-balance products and may otherwise offer more favorable terms if a client obtains two or more traditional bank products. The law also expressly permits banks to engage in other forms of tying and authorizes the Federal Reserve Board to grant additional exceptions by regulation or order.
A bank may, however, offer combined-balance products and may otherwise offer more favorable terms if a client obtains two or more traditional bank products. The law also expressly permits banks to engage in other forms of tying and authorizes the Federal Reserve Board (“FRB”) to grant additional exceptions by regulation or order.
The final rule identifies replacement benchmark rates based on SOFR to replace overnight, one-month, three-month, six-month, and 12-month LIBOR in contracts subject to the LIBOR Act. The Company and the Bank have fully transitioned its LIBOR-based contracts to other indices, primarily SOFR, as of December 31, 2023. Federal Home Loan Bank System.
The final rule identifies replacement benchmark rates based on SOFR to replace overnight, one-month, three-month, six-month, and 12-month LIBOR in contracts subject to the LIBOR Act. The Company and the Bank fully transitioned its LIBOR-based contracts to other indices, primarily SOFR, as of December 31, 2023. Federal Home Loan Bank System.
Upon receipt of such notice, the Federal Reserve may approve or disapprove the acquisition. The Change in Bank Control Act creates a rebuttable presumption of control if a person or group acquires the power to vote 10% or more of our outstanding common stock.
Upon receipt of such notice, the Federal Reserve may approve or disapprove the acquisition. The Change in Bank Control Act creates a rebuttable presumption of control if a person, entity or group acquires the power to vote 10% or more of our outstanding common stock.
Under the Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to the Federal Reserve before acquiring control of any bank holding company, such as the Company, or before acquiring control of any FDIC-insured bank, such as Origin Bank.
Under the Change in Bank Control Act and the regulations thereunder, a person, entity or group must give advance notice to the Federal Reserve before acquiring control of any bank holding company, such as the Company, or before acquiring control of any FDIC-insured bank, such as Origin Bank.
Origin Bank is subject to certain legal lending limits under the Louisiana Banking Law and Federal Reserve Regulation O. At December 31, 2023, we had established a general in-house lending limit ranging between $30.0 million and $35.0 million to any one borrower, excluding mortgage warehouse lines of credit, based upon our internal risk rating of the relationship.
Origin Bank is subject to certain legal lending limits under the Louisiana Banking Law and Federal Reserve Regulation O. At December 31, 2024, we had established a general in-house lending limit ranging between $30.0 million and $35.0 million to any one borrower, excluding mortgage warehouse lines of credit, based upon our internal risk rating of the relationship.
Under a Federal Reserve policy adopted in 2009, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to maintaining a strong financial position, and is not based on overly optimistic earnings scenarios, such as potential events that could affect its ability to pay, while still maintaining a strong financial position.
Under a Federal Reserve policy adopted in 2009 and revised in 2020, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to maintaining a strong financial position, and is not based on overly optimistic earnings scenarios, such as potential events that could affect its ability to pay, while still maintaining a strong financial position.
We have evaluated our controls, including compliance with the SEC rules on internal controls, and have and expect to continue to spend significant amounts of time and money on compliance with these rules.
We have evaluated our controls, including compliance with the SEC rules on internal controls, and have spent, and expect to continue to spend significant amounts of time and money on compliance with these rules.
Origin has been recognized as a “Best Bank to Work For” by American Banker magazine for 11 consecutive years, which we believe is attributable to our deep commitment to corporate culture, and our focus on initiatives to support and develop our employees. This ranking is based on feedback from surveys given directly to the American Banker magazine from our employees.
Origin has been recognized as a “Best Bank to Work For” by American Banker magazine for twelve consecutive years, which we believe is attributable to our deep commitment to corporate culture, and our focus on initiatives to support and develop our employees. This ranking is based on feedback from surveys given directly to the American Banker magazine from our employees.
Due to multiple sources of repayment, mortgage warehouse lines of credit have a general in-house lending limit ranging between $30.0 million and $75.0 million to any one borrower. Deposits and Other Sources of Funds An important aspect of our business franchise is the ability to gather deposits.
Due to multiple sources of repayment, mortgage warehouse lines of credit have a general in-house lending limit ranging between $75.0 million and $100.0 million to any one borrower. Deposits and Other Sources of Funds An important aspect of our business franchise is the ability to gather deposits.
Concentrations in Lending During 2006, the federal bank regulatory agencies released guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) and advised financial institutions of the risks posed by CRE lending concentrations. The Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations.
Concentrations in Lending During 2006, the federal bank regulatory agencies released guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) and advised financial institutions of the risks posed by commercial real estate (“CRE”) lending concentrations. The Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations.
We have also established a corporate loan committee with authority to approve loans up to the legal lending limit of Origin Bank. During 2023, credit relationships of $8.0 million or greater were generally presented to the corporate loan committee for approval or ratification of approval prior to committing to the loan.
We have also established a corporate loan committee with authority to approve loans up to the legal lending limit of Origin Bank. During 2024, credit relationships of $8.0 million or greater were generally presented to the corporate loan committee for approval or ratification of approval prior to committing to the loan.
Please see Note 17 — Capital and Regulatory Matters in the notes to the consolidated financial statements for consolidated capital ratios of the Company and Origin Bank as of December 31, 2023. Payment of Dividends We are a legal entity separate and distinct from Origin Bank and our other subsidiaries.
Please see Note 17 — Capital and Regulatory Matters in the notes to the consolidated financial statements for consolidated capital ratios of the Company and Origin Bank as of December 31, 2024. Payment of Dividends We are a legal entity separate and distinct from Origin Bank and our other subsidiaries.
Consumer Loans and Residential Real Estate Loans. Our consumer loan portfolio is primarily composed of secured and unsecured loans that we originate. The largest component of our consumer loan portfolio is for residential real estate purposes. We originate one-to-four family, owner-occupied residential mortgage loans generally secured by property located in our primary market areas.
Consumer Loans and Residential Real Estate Loans. Our consumer loan portfolio is primarily composed of secured and unsecured loans that we originate. The largest component of our consumer loan portfolio is for residential real estate purposes. We originate one-to-four family residential mortgage loans generally secured by property located in our primary market areas.
In 2023, Origin Bank announced the formation of the Diversity Council, which consists of 18 diverse employees that collectively advance our Diversity, Equity, and Inclusion efforts in a way that makes a difference within our workplace and in the communities we serve.
In 2023, Origin Bank announced the formation of the Diversity Council , which consists of 17 diverse employees that collectively advance our Diversity, Equity, and Inclusion efforts in a way that makes a difference within our workplace and in the communities we serve.
As further described below, each of the Company and Origin Bank is well-capitalized under applicable regulatory standards as of December 31, 2023, and Origin Bank has an overall rating of “Satisfactory” in its most recent CRA evaluation.
As further described below, each of the Company and Origin Bank is well-capitalized under applicable regulatory standards as of December 31, 2024, and Origin Bank has an overall rating of “Satisfactory” in its most recent CRA evaluation.
Tier 2 capital consists of instruments disqualified from Tier 1 capital, including qualifying subordinated debt and a limited amount of loan loss reserves up to a maximum of 1.25% of risk-weighted assets, subject to certain eligibility criteria.
Tier 2 capital consists of instruments disqualified from Tier 1 capital, including qualifying subordinated debt and a limited amount of credit loss reserves up to a maximum of 1.25% of risk-weighted assets, subject to certain eligibility criteria.
We make available at this address, free of charge, our Annual Report on Form 10-K, our annual reports to stockholders, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC").
We make available at this address, free of charge, our Annual Report on Form 10-K, our annual reports to stockholders, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).
Change in Control Federal law restricts the amount of voting stock of a bank holding company or a bank that a person may acquire without the prior approval of banking regulators.
Change in Control Federal law restricts the amount of voting stock of a bank holding company or a bank that a person, entity or group may acquire without the prior approval of banking regulators.
In addition, we are also subject to federal regulatory capital requirements that effectively limit the amount of cash dividends that we may pay. 18 Table of Contents The primary sources of funds for our payment of dividends to our shareholders are cash on hand and dividends from Origin Bank and our non-bank subsidiaries.
In addition, we are also subject to federal regulatory capital requirements that effectively limit the amount of cash dividends that we may pay. The primary sources of funds for our payment of dividends to our shareholders are cash on hand and dividends from Origin Bank and our non-bank subsidiaries.
The FDIC could further increase the deposit insurance assessments for certain insured depository institutions, including Origin Bank, if the DIF reserve ratio is not restored as projected. In November 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the DIF associated with several bank failures that occurred during early 2023.
The FDIC could further increase the deposit insurance assessments for certain insured depository institutions, including Origin Bank, if the DIF reserve ratio is not restored as projected. 21 Table of Contents In November 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the DIF associated with several bank failures that occurred during early 2023.
On December 16, 2022, the FRB adopted a final rule to implement the LIBOR Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023.
On December 16, 2022, the Federal Reserve adopted a final rule to implement the LIBOR Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023.
Human Capital Management At December 31, 2023, we had 1,041 full-time equivalent employees, who benefit from a variety of initiatives designed to retain, grow, and develop them in becoming the best versions of themselves. At Origin, our culture has always been the foundation of our success. We work to define our culture in everything we do.
Human Capital Management At December 31, 2024, we had 1,031 full-time equivalent employees, who benefit from a variety of initiatives designed to retain, grow, and develop them in becoming the best versions of themselves. At Origin, our culture has always been the foundation of our success. We work to define our culture in everything we do.
Additionally, our independent registered public accounting firm, FORVIS, LLP, is required to comply with rules established by the Public Company Accounting Oversight Board ("PCAOB") as they related to the completion of the audit of our consolidated financial statements.
Additionally, our independent registered public accounting firm, Forvis Mazars, LLP, is required to comply with rules established by the Public Company Accounting Oversight Board (“PCAOB”) as they related to the completion of the audit of our consolidated financial statements.
Some of the instruments of monetary policy available to the Federal Reserve include changes in the discount rate on member bank borrowings, the fluctuating availability of borrowings at the "discount window" and open market operations as directed by the Federal Open Market Committee.
Some of the instruments of monetary policy available to the Federal Reserve include changes in the discount rate on member bank borrowings, the fluctuating availability of borrowings at the “discount window” and open market operations as directed by the Federal Open Market Committee.
The bank is required to obtain the approval of the Louisiana Office of Financial Institutions for any amount in excess of this threshold. Additionally, to pay dividends to us, under Louisiana law Origin Bank must have unimpaired surplus that equals or exceeds fifty percent of its outstanding capital stock.
The Bank is required to obtain the approval of the OFI for any amount in excess of this threshold. Additionally, to pay dividends to us, under Louisiana law Origin Bank must have unimpaired surplus that equals or exceeds fifty percent of its outstanding capital stock.
Member banks do not have any control over the Federal Reserve System as a result of owning the stock and the stock cannot be sold or traded. The annual dividend rate for member banks with $12.517 billion or less in total assets is fixed at 6%, which currently applies to us.
Member banks do not have any control over the Federal Reserve System as a result of owning the stock and the stock cannot be sold or traded. As of January 27, 2025, the annual dividend rate for member banks with $12.841 billion or less in total assets is fixed at 6%, which currently applies to us.
The Guidance is triggered when CRE loan concentrations exceed either: • Total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk-based capital; or • Total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total risk-based capital.
The Guidance is triggered when CRE loan concentrations exceed either: • Total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk-based capital; or • Total reported loans secured by multifamily and nonowner-occupied, nonfarm nonresidential properties and loans for construction, land development, and other land (excluding loans secured by farmland) of 300% or more of a bank’s total risk-based capital.
We believe all of our markets throughout Texas, Louisiana and Mississippi provide favorable business climates and continued opportunity for growth, and now with our expansion into southern Alabama and the Florida panhandle we have further grown our presence across the lower half of the United States.
We believe all of our markets provide favorable business climates and continued opportunity for growth, and now with our expansion into Southern Alabama and the Florida Panhandle we have further grown our presence across the lower half of the United States.
The Department of Justice has increased its efforts to prosecute what it regards as violations of the Equal Credit Opportunity Act and the FHA. Effect of Governmental Monetary Policies. The commercial banking business is affected not only by general economic conditions but also by U.S. fiscal policy and the monetary policies of the Federal Reserve.
The Department of Justice has increased its efforts to prosecute what it regards as violations of the ECOA and the FHA. Effect of Governmental Monetary Policies. The commercial banking business is affected not only by general economic conditions but also by U.S. fiscal policy and the monetary policies of the Federal Reserve.
This allows us 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 us to develop strong relationships across industries, creating a diverse commercial loan portfolio. We believe we have an attractive mix of loans and deposits.
This allows us to build Origin Bank by focusing on stable core deposit relationships, high credit quality loans, and fee income generated by value-added services. It also allows us to develop strong relationships across industries, creating a diverse commercial loan portfolio. 7 Table of Contents We believe we have an attractive mix of loans and deposits.
On October 25, 2023, the Federal Reserve Bank (“FRB”) proposed to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction. The proposal would also establish a regular process for updating the maximum amount every other year going forward.
On October 25, 2023, the Federal Reserve proposed to lower the maximum interchange fee that a non-exempt issuer can receive for a debit card transaction. The proposal would also establish a regular process for updating the maximum amount every other year going forward.
In general, Origin Bank may pay dividends to us without the approval of the Louisiana Office of Financial Institutions so long as the amount of the dividend does not exceed the bank’s net profits earned during the current year combined with its retained net profits of the immediately preceding year.
In general, Origin Bank may pay dividends to us without the approval of the OFI so long as the amount of the dividend does not exceed the Bank’s net profits earned during the current year combined with its retained net profits of the immediately preceding year.
In addition, as discussed in more detail below, Origin Bank and any other of our subsidiaries that offer consumer financial products and services are subject to regulation by the CFPB.
In addition, as discussed in more detail below, Origin Bank and any other of our subsidiaries that offer consumer financial products and services are subject to regulation by the Consumer Financial Protection Bureau (“CFPB”).
We believe motivating our relationship bankers to generate strong deposit growth enhances our ability to build and strengthen client relationships and provide stable funding for future growth. We also intend to continue pursuing selective acquisition opportunities that we expect will enhance our business model within our attractive geographic footprint and other complementary markets.
We believe motivating our relationship bankers to generate strong deposit growth enhances our ability to build and strengthen client relationships and provide stable funding for future growth. We will continue to evaluate selective acquisition opportunities that we believe could enhance our business model within our attractive geographic footprint and other complementary markets.
Other Banking Services Given customer demand for increased convenience and account access, we offer a wide range of products and services, including 24-hour internet banking and voice response information, mobile applications, cash management, overdraft protection, direct deposit, safe deposit boxes, U.S. savings bonds, automatic account transfers, peer-to-peer electronic pay solutions and personal financial management solutions.
Other Banking Services Given customer demand for increased convenience and account access, we offer a wide range of products and services, including 24-hour internet banking and voice response information, mobile applications, cash management, business credit cards, overdraft protection, direct deposit, safe deposit boxes, automatic account transfers, peer-to-peer electronic pay solutions and personal financial management solutions.
FinCEN has adopted rules that require financial institutions to obtain beneficial ownership information with respect to legal entities with which such institutions conduct business, subject to certain exclusions and exemptions. Bank regulators are focusing their examinations on anti-money laundering compliance, and we continue to monitor and augment, where necessary, our anti-money laundering compliance programs.
The federal Financial Crimes Enforcement Network (“FinCEN”) has adopted rules that require financial institutions to obtain beneficial ownership information with respect to legal entities with which such institutions conduct business, subject to certain exclusions and exemptions. Bank regulators are focusing their examinations on anti-money laundering compliance, and we continue to monitor and augment, where necessary, our anti-money laundering compliance programs.
Commercial and industrial loans have contributed interest income of $155.8 million, $90.5 million and $67.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. 9 Table of Contents Mortgage Warehouse Loans. Mortgage warehouse loans are extended to mortgage companies and secured by loan participations in mortgages that are typically sold within 15 to 25 days.
Commercial and industrial loans have contributed interest income of $163.9 million, $155.8 million and $90.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. Mortgage Warehouse Loans. Mortgage warehouse loans are extended to mortgage companies and secured by loan participations in mortgages that are typically sold within 15 to 25 days.
We are 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 we can. 11 Table of Contents Many other commercial banks, savings institutions and credit unions have offices in our primary market areas.
We are 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 we can.
Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of any guarantor, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions, industry specific trends and collateral.
The terms for commercial loans are generally one to seven years. Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of any guarantor, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions, industry specific trends and collateral.
With over 30 years of growth in the insurance industry and approximately 125 experienced professionals, our agency has primary market locations across Louisiana, but also serves customers in Texas, Mississippi, Arkansas and other states across the United States.
With over 35 years of growth in the insurance industry and over 130 experienced professionals, our agency has primary market locations across Louisiana, but also serves customers in Texas, Mississippi, Arkansas and other states across the United States.
However, the annual dividend rate for member banks with total assets in excess of $12.517 billion, is based on a floating dividend rate tied to10-year U.S. Treasuries with the maximum dividend rate capped at 6%.
However, the annual dividend rate for member banks with total assets in excess of $12.841 billion, is based on a floating dividend rate tied to 10-year U.S. Treasuries with the maximum dividend rate capped at 6%.
Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System. In addition, undercapitalized depository institutions may not accept brokered deposits absent a waiver from the FDIC, are subject to growth limitations and are required to submit capital restoration plans for regulatory approval.
In addition, undercapitalized depository institutions may not accept brokered deposits absent a waiver from the FDIC, are subject to growth limitations and are required to submit capital restoration plans for regulatory approval.
As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce the bank holding company’s dividends if: • its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; • its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or • it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce the bank holding company’s dividends if: • its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; • its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or • it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. 20 Table of Contents Regulation of the Bank Origin Bank, which is a member of the Federal Reserve System, is subject to comprehensive supervision and regulation by the Federal Reserve, and is subject to its regulatory reporting requirements, as well as supervision and regulation by the OFI.
Commercial real estate loans have contributed interest income of $135.1 million, $88.2 million and $61.8 million for the years ended December 31, 2023, 2022 and 2021, respectively, while construction/land/land development loans have contributed interest income of $69.6 million, $36.4 million and $21.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Commercial real estate loans have contributed interest income of $146.5 million, $135.1 million and $88.2 million for the years ended December 31, 2024, 2023 and 2022, respectively, while construction/land/land development loans have contributed interest income of $73.9 million, $69.6 million and $36.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Insurance commission and fee income was $25.1 million, $22.9 million and $13.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Insurance commission and fee income was $26.8 million, $25.1 million and $22.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
We believe our long-term experience in CRE lending, underwriting policies, internal controls, and other policies currently in place, as well as our loan and credit monitoring and administration procedures, are generally appropriate to managing our concentrations as required under the Guidance.
We believe our long-term experience in CRE lending, underwriting policies, internal controls, and other policies currently in place, as well as our loan and credit monitoring and administration procedures, are generally appropriate to managing our concentrations as required under the Guidance. As of December 31, 2024, our CRE loan concentrations were below the Guidance thresholds discussed above.
We are committed to building unique client experiences through a strong culture, experienced leadership team and a focus on delivering unmatched customer service throughout Texas, Louisiana and Mississippi.
We are committed to building unique client experiences through a strong culture, experienced leadership team and a focus on delivering unmatched customer service throughout Texas, Louisiana, Mississippi and now in South Alabama and the Florida Panhandle.
We offer a wide range of deposit services, including checking, savings, money market accounts and time deposits. We obtain most of our deposits from individuals, small businesses and municipalities in our market areas. At December 31, 2023, 52.3% of our deposits were business deposits, 31.7% were consumer deposits and 10.7% were public fund deposits.
We offer a wide range of deposit services, including checking, savings, money market accounts and time deposits. We obtain most of our deposits from individuals, small businesses and municipalities in our market areas. At December 31, 2024, 54.8% of our deposits were business deposits, 32.6% were consumer deposits and 11.7% were public fund deposits.
Item 1. Business Our Company Unless the context otherwise requires, references in this Annual Report on Form 10-K to "we," "us," "our," "our company," "the Company" or "Origin" refer to Origin Bancorp, Inc., a Louisiana corporation, and its consolidated subsidiaries. All references to "Origin Bank" or "the Bank" refer to Origin Bank, our wholly-owned bank subsidiary.
Item 1. Business Our Company Unless the context otherwise requires, references in this Annual Report on Form 10-K to “we,” “us,” “our,” “our company,” “the Company” or “Origin” refer to Origin Bancorp, Inc., a Louisiana corporation, and its consolidated subsidiaries. All references to “Origin Bank” or “the Bank” refer to Origin Bank, our wholly-owned bank subsidiary.
In addition, the FDIC provides that any insured depository institution generally will be liable for any loss incurred by the FDIC in connection with the default of, or any assistance provided by the FDIC to, a commonly controlled insured depository institution.
In addition, the FDIC provides that any insured depository institution generally will be liable for any loss incurred by the FDIC in connection with the default of, or any assistance provided by the FDIC to, a commonly controlled insured depository institution. Origin Bank is an FDIC-insured depository institution and thus subject to these requirements.
Due to our adoption rate, we won a national award in 2021 from the Dave Ramsey Foundation called the “Vision” award. Also in 2021, we hired a certified Holistic Health Coach to spearhead our Health & Wellness initiatives.
Due to our adoption rate, we won a national award in 2021 from the Dave Ramsey Foundation called the “Vision” award. We employ a full-time certified Holistic Health Coach who spearheads our Health & Wellness initiatives.
Consequently, shareholders of the Company may be less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to acquire control of other companies. Investors should be aware of these requirements when acquiring shares of our stock.
Consequently, shareholders of the Company may be less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to acquire control of other companies.
At December 31, 2023, we held $8.25 billion of total deposits and have grown deposits at a compound annual growth rate of 18.1% since December 31, 2003. At December 31, 2023, 89.0% of our total deposits were core deposits (defined as total deposits excluding time deposits greater than $250,000, brokered and Certificate of Deposit Account Registry Service deposits).
At December 31, 2024, we held $8.22 billion of total deposits and have grown deposits at a compound annual growth rate of 17.2% since December 31, 2003. At December 31, 2024, 93.4% of our total deposits were core deposits (defined as total deposits excluding time deposits greater than $250,000, brokered and Certificate of Deposit Account Registry Service deposits).
Origin Bank is an FDIC-insured depository institution and thus subject to these requirements. 15 Table of Contents Acquisitions The BHC Act permits acquisitions of banks by bank holding companies, such that we and any other bank holding company, whether located in Louisiana or elsewhere, may acquire a bank located in any other state, subject to certain deposit-percentage, age of bank charter requirements, and other restrictions.
Acquisitions The BHC Act permits acquisitions of banks by bank holding companies, such that we and any other bank holding company, whether located in Louisiana or elsewhere, may acquire a bank located in any other state, subject to certain deposit-percentage, age of bank charter requirements, and other restrictions.
Diversity & Inclusion At Origin, one of our core values is, genuine respect for yourself and others . This value makes the support of diversity, equity and inclusion a natural fit for our culture and essential to the way we conduct business, foster individual and team enrichment, and participate in our communities.
This value makes the support of diversity, equity and inclusion a natural fit for our culture and essential to the way we conduct business, foster individual and team enrichment, and participate in our communities.
We launched a nationally-recognized financial wellness program (“SmartDollar”) during 2021 that is designed to assist our employees in becoming debt-free and saving money for emergencies and retirement, empowering them to become better financially prepared for their future, which during 2023, had an over 40% participation rate.
Over 300 employees have participated in this program since 2019. We also offer a nationally-recognized financial wellness program (“SmartDollar”) that is designed to assist our employees in becoming debt-free and in saving money for emergencies and retirement, empowering them to become better financially prepared for their future, which during 2024, had an over 46% participation rate.
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, construction, higher education, agriculture, energy, transportation and technology.
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, construction, higher education, agriculture, energy, transportation and technology.
Governance and Financial Reporting Obligations We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC and the New York Stock Exchange.
Investors should be aware of these requirements when acquiring shares of our stock. 17 Table of Contents Governance and Financial Reporting Obligations We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC and the New York Stock Exchange.
Failure to meet minimum capital requirements could also result in restrictions on the Company’s or Origin Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth. In 2023, the Company’s and Origin Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer.
Failure to meet minimum capital requirements could also result in restrictions on the Company’s or Origin Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth.
Our merger with BTH allowed us to enter the East Texas market and expand our footprint across the I-20 corridor. The merger also bolstered our presence in the Dallas/ Fort Worth market. We believe the strong reputation and commitment of both banks will provide growth in both markets and allow us to strengthen relationships in the communities we serve.
In 2022, we entered the East Texas market and expanded our footprint across the I-20 corridor. The BT Holdings, Inc., (“BTH”) merger solidified our presence in the Dallas/ Fort Worth market. We believe the strong reputation and commitment of both banks will provide growth in both markets and allow us to strengthen relationships in the communities we serve.
Anti-Tying Restrictions In general, a bank may not extend credit, lease, sell property, or furnish any services or fix or vary the consideration for them on the condition that (1) the client obtain or provide some additional credit, property, or services from or to the bank or bank holding company or their subsidiaries or (2) the client not obtain some other credit, property, or services from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of the credit extended.
We expect this trend of state-level activity in those areas to continue and are continually monitoring developments in the states in which our clients are located. 24 Table of Contents Anti-Tying Restrictions In general, a bank may not extend credit, lease, sell property, or furnish any services or fix or vary the consideration for them on the condition that (1) the client obtain or provide some additional credit, property, or services from or to the bank or bank holding company or their subsidiaries or (2) the client not obtain some other credit, property, or services from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of the credit extended.
These institutions include many of the largest banks operating in Texas, Louisiana and Mississippi, including various national banks. Our competitors often have greater resources, have broader geographic markets, have higher lending limits, offer various services that we may not currently offer and make broader use of media advertising, support services and electronic technology than we do.
Our competitors often have greater resources, have broader geographic markets, have higher lending limits, offer various services that we may not currently offer and make broader use of media advertising, support services and electronic technology than we do.
Based on current estimates, we believe that the Company and Origin Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer in 2024.
Throughout and as of December 31, 2024, the Company’s and Origin Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer. Based on current estimates, we believe that the Company and Origin Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer in 2025.
Subject to Federal Reserve approval and certain state filing requirements, Origin Bank is permitted under federal law to branch on a de novo basis across state lines wherever the laws of that state would permit a bank chartered by that state to establish a branch. 19 Table of Contents Transactions with Affiliates and Insiders Origin Bank is subject to restrictions on extensions of credit and certain other transactions between Origin Bank and the Company or any nonbank affiliate.
Subject to Federal Reserve approval and certain state filing requirements, Origin Bank is permitted under federal law to branch on a de novo basis across state lines wherever the laws of that state would permit a bank chartered by that state to establish a branch.
At December 31, 2023, we had total assets of $9.72 billion and our expectation is that we will exceed $10 billion in total consolidated assets during 2024. 16 Table of Contents Incentive Compensation The Dodd-Frank Act required the federal banking agencies and the SEC to establish joint rules or guidelines for financial institutions with more than $1 billion in assets, such as us and Origin Bank, which prohibit incentive compensation arrangements that the agencies determine to encourage inappropriate risks by the institution.
Incentive Compensation The Dodd-Frank Act required the federal banking agencies and the SEC to establish joint rules or guidelines for financial institutions with more than $1 billion in assets, such as us and Origin Bank, which prohibit incentive compensation arrangements that the agencies determine to encourage inappropriate risks by the institution.
In addition to base pay and stock awards, we have several incentive programs that are designed to link performance to pay and drive results towards the achievement of overall corporate goals. We also provide a myriad of benefits through programs such as DreamManager®, Health and Wellness coaching, Leadership Academies, Financial Wellness Initiatives, and Project Enrich, as detailed below.
In addition to base pay and stock awards, we administer several incentive programs that are designed to link performance to pay and drive results towards the achievement of overall corporate goals. We offer robust health, wellness and financial benefits as detailed below.
In addition to providing health and wellness information on a regular basis to all employees, we currently have approximately 10% of our employees working directly with our Health Coach on a personalized basis to meet their desire to be healthier.
In addition to providing health and wellness information on a regular basis to all employees, we currently have approximately 10% of our employees working individually with our Health Coach to meet their desire to be healthier, physically and mentally. As of December 31, 2024, participants have lost a total of 4,560 pounds.
Online banking services and other public-facing web services are performed using third-party service providers. We strive to follow all recommendations outlined by the Federal Financial Institutions Examination Council and we perform regular tests of the adequacy of our contingency plans for key functions and systems.
We strive to follow all recommendations outlined by the Federal Financial Institutions Examination Council and we perform regular tests of the adequacy of our contingency plans for key functions and systems.
At December 31, 2022, our estimated uninsured deposits totaled $4.19 billion, which is below the threshold for assessment.
At December 31, 2022, our estimated uninsured deposits were below the threshold for assessment.
Our core data processing platform is from a nationally-recognized bank processing vendor and we leverage the capabilities of a third-party service provider in developing our network design and architecture. We also actively manage our business continuity plan. The majority of our other systems, including electronic funds transfer and transaction processing, are operated in-house.
Our core data processing platform is from a nationally-recognized bank processing vendor, and we leverage the capabilities of a third-party service provider in developing our network design and architecture. We also actively manage our business continuity plan and utilize top tier cybersecurity solutions within our networks.
We believe it is only with a diverse, equitable, and inclusive workplace that the organization can truly perform at its best, carry out its vision, and make a difference in the communities we serve. We believe all employees should be given opportunities to perform to their full potential, knowing their performance will be measured and rewarded fairly.
We believe it is only with a diverse, equitable, and inclusive workplace that the organization can truly perform at its best, carry out its vision, and make a difference in the communities we serve.
CRA agreements with private parties must be disclosed and annual CRA reports must be made to the Federal Reserve.
The Federal Reserve’s assessment of Origin Bank’s CRA record is made available to the public. CRA agreements with private parties must be disclosed and annual CRA reports must be made to the Federal Reserve.
We cannot predict the nature of future fiscal and monetary policies or the effect of these policies on our operations and activities, financial condition, results of operations, growth plans or future prospects. 24 Table of Contents LIBOR On March 15, 2022, Congress enacted the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) to address references to LIBOR in contracts that (i) are governed by U.S. law; (ii) will not mature before June 30, 2023; and (iii) lack fallback provisions providing for a clearly defined and practicable replacement for LIBOR.
LIBOR On March 15, 2022, Congress enacted the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) to address references to LIBOR in contracts that (i) are governed by U.S. law; (ii) did not mature before June 30, 2023; and (iii) lack fallback provisions providing for a clearly defined and practicable replacement for LIBOR.
Under the regulations, if a regulator determines that a bank fails to meet any standards prescribed by the guidelines, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans. 20 Table of Contents Anti-Money Laundering A continued focus of governmental policy relating to financial institutions in recent years has been combating money laundering and terrorist financing.
Under the regulations, if a regulator determines that a bank fails to meet any standards prescribed by the guidelines, the regulator may require the Bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans.
Additionally, in one specific initiative designed to help the communities we serve, our Project Enrich program provides employees with up to twenty hours of paid time off to volunteer in their communities.
Additionally, in one specific initiative designed to help the communities we serve, our Project Enrich program provides employees with up to twenty hours of paid time off per year to volunteer in their communities. In 2024, the employees of Origin volunteered 4,615 hours in the community during working hours, not including 1,487 hours of personal time outside of working hours.
If Origin Bank ceases to be “well capitalized” or “well managed” under applicable regulatory standards, or if Origin Bank receives a rating of less than satisfactory under the Community Reinvestment Act, the Federal Reserve may, among other things, place limitations on our ability to conduct these broader financial activities or, if the deficiencies persist, require us to divest the banking subsidiary or the businesses engaged in activities permissible only for financial holding companies.
If Origin Bank ceases to be “well capitalized” or “well managed” under applicable regulatory standards, or if Origin Bank receives a rating of less than satisfactory under the Community Reinvestment Act (“CRA”), the Federal Reserve may, among other things, place limitations on our ability to conduct these broader financial activities or, if the deficiencies persist, require us to divest the banking subsidiary or the businesses engaged in activities permissible only for financial holding companies. 16 Table of Contents In addition, the Federal Reserve has the power to order a bank holding company or its subsidiaries to terminate any nonbanking activity or terminate its ownership or control of any nonbank subsidiary, when it has reasonable cause to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any bank subsidiary of that bank holding company.
As of December 31, 2023, our CRE loan concentrations were below the Guidance thresholds discussed above. 21 Table of Contents Debit Interchange Fees Debit card interchange fee restrictions set forth in the Durbin Amendment, as implemented by regulations of the Federal Reserve, cap the maximum debit interchange fee that a debit card issuer may receive per transaction.
Debit Interchange Fees Debit card interchange fee restrictions set forth in the Durbin Amendment, as implemented by regulations of the Federal Reserve, cap the maximum debit interchange fee that a debit card issuer may receive per transaction.
Non-Discrimination Policies Origin Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act and the Fair Housing Act, both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction.
These rules also address initial rate adjustment notices for adjustable-rate mortgages, periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts. 25 Table of Contents Non-Discrimination Policies Origin Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act (“ECOA”) and the Fair Housing Act (“FHA”), both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction.

… 120 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

89 edited+18 added−28 removed183 unchanged
Biggest changeThese risks are discussed more fully after the summary, and risks include, but are not limited to, the following: • Current uncertain economic conditions (both domestic and international) pose challenges, and could adversely affect our business, financial condition and results of operations; • Changes in interest rates could have an adverse impact on our results of operations and financial condition including decreased net interest margin, impact on loan demand, competition for, and increased cost of funding, deposits, and the value of our securities portfolio (including any losses recognized); • We are subject to risks related to inflation, rising prices and the government and Federal Reserve response to the same; • We may not be able to adequately measure and limit our credit risk; • Our allowance for loan credit losses may prove to be insufficient to absorb losses inherent in our loan portfolio and our earnings could decrease; 25 Table of Contents • Negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing certain of our loans; • The deterioration in value of receivables, inventory, equipment or other commercial collateral could expose us to credit losses; • The geographic concentration of our markets in Texas, Louisiana and Mississippi makes us more sensitive than our more geographically diversified competitors to adverse changes in the local economy; • Our loan portfolio contains a number of large loans to certain borrowers, and deterioration in the financial condition of these borrowers could have a significant adverse impact on our asset quality; • The loss of executive management or other key employees, as well as our ability to attract and retain profitable bankers, could adversely impact our business or reputation; • Fraud, unauthorized access, cyber-crime and other threats to data security has impacted and may cause harm to our business; • We may have exposure to tax liabilities that are larger than we anticipate; • The small to medium-sized businesses that we lend to may have fewer resources to weather adverse business developments, which may impair our borrowers’ ability to repay loans; • We face significant competition to attract and retain customers, which could impair our growth, decrease our profitability or result in loss of market share; • Our ability to maintain our reputation is critical to the success of our business; • Risks related to environmental, social and governance ("ESG") strategies and initiatives, the scope and pace of which could alter our reputation and shareholder, associate, customer and third-party affiliations; • Our business has grown rapidly, and we may not be able to maintain our historical rate of growth, which could have an adverse effect on our ability to successfully implement our business strategy; • We may pursue acquisitions or new lines of business in the future, which could expose us to financial, execution and operational risks; • We are susceptible to environmental risks, such as hurricanes and other natural disasters, adverse weather and climate change effects; • We have a continuing need for technological change, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology; • The effectiveness of derivative financial instruments and hedging activities to manage risks; • We are subject to various liquidity risks, credit, and market risks; • Risks related to the extensive use, reliability, disruption, and accuracy of the models and data we rely on; • Our ability to maintain adequate internal controls over financial reporting; • Our reliance on third parties to provide key components of our business infrastructure; • Risks related to potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; • We operate in a highly regulated environment and the laws and regulations that govern our operations, including accounting policies, standards, and interpretations, could subject us to regulatory consequences; • We are subject to stringent capital requirements, which may result in lower returns on equity, require us to raise additional capital, limit growth opportunities or result in regulatory restrictions; 26 Table of Contents • The market price of our common stock may be subject to substantial fluctuations and is subject to risk of loss; and • Other factors and risks described under “Risk Factors” herein and in any of our subsequent reports filed with the SEC and available on our website at www.sec.gov .
Biggest changeThese risks are discussed more fully after the summary, and risks include, but are not limited to, the following: • Current uncertain economic conditions (both domestic and international) pose challenges, and could adversely affect our business, financial condition and results of operations; • Changes in interest rates could have an adverse impact on our results of operations and financial condition including decreased net interest margin, impact on loan demand, competition for, and increased cost of funding, deposits, and the value of our securities portfolio (including any losses recognized); • We are subject to risks related to inflation, rising prices and the government and Federal Reserve response to the same; • The failure to maintain an effective system of controls and procedures, including internal control over financial and non-financial reporting; • We may not be able to adequately measure and limit our credit risk; • Our allowance for loan credit losses may prove to be insufficient to absorb losses inherent in our loan portfolio and our earnings could decrease; • Negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing certain of our loans; • The deterioration in value of receivables, inventory, equipment or other commercial collateral could expose us to credit losses; • The geographic concentration of our markets in Texas, Louisiana, Mississippi, South Alabama and the Florida Panhandle makes us more sensitive than our more geographically diversified competitors to adverse changes in the local economy; • Our loan portfolio contains a number of large loans to certain borrowers, and deterioration in the financial condition of these borrowers could have a significant adverse impact on our asset quality; • The loss of executive management or other key employees, as well as our ability to attract and retain profitable bankers, could adversely impact our business or reputation; • Fraud, unauthorized access, cyber-crime and other threats to data security has impacted and may cause harm to our business, additionally, the impact of fraud or misconduct by internal or external parties which we may not be able to prevent, detect or mitigate; • We may have exposure to tax liabilities that are larger than we anticipate; • The small to medium-sized businesses that we lend to may have fewer resources to weather adverse business developments, which may impair our borrowers’ ability to repay loans; • We face significant competition to attract and retain customers, which could impair our growth, decrease our profitability or result in loss of market share; • Our ability to maintain our reputation is critical to the success of our business; • Risks related to ESG strategies and initiatives, the scope and pace of which could alter our reputation and shareholder, associate, customer and third-party affiliations; • Our business has grown rapidly, and we may not be able to maintain our historical rate of growth, which could have an adverse effect on our ability to successfully implement our business strategy; 27 Table of Contents • We may pursue acquisitions or new lines of business in the future, which could expose us to financial, execution and operational risks; • We are susceptible to environmental risks, such as hurricanes and other natural disasters, adverse weather and climate change effects; • We have a continuing need for technological change, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology; • The rapid advancement and integration of artificial intelligence in financial services present risks related to data security, regulatory compliance, algorithmic biases, and operational reliability, which could impact our business, reputation, and regulatory obligations; • The effectiveness of derivative financial instruments and hedging activities to manage risks; • We are subject to various liquidity risks, credit, and market risks; • Risks related to the extensive use, reliability, disruption, and accuracy of the models and data we rely on; • Our ability to maintain adequate internal controls over financial reporting; • Our reliance on third parties to provide key components of our business infrastructure; • Risks related to potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; • We operate in a highly regulated environment and the laws and regulations that govern our operations, including accounting policies, standards, and interpretations, could subject us to regulatory consequences; • We are subject to stringent capital requirements, which may result in lower returns on equity, require us to raise additional capital, limit growth opportunities or result in regulatory restrictions; • The market price of our common stock may be subject to substantial fluctuations and is subject to risk of loss; and • Other factors and risks described under “Risk Factors” herein and in any of our subsequent reports filed with the SEC and available on our website at www.sec.gov .
There are many factors that may impact the market price and trading volume of our common stock, including, without limitation: • actual or anticipated fluctuations in our operating results, financial condition or asset quality; • changes in economic or business conditions; • the effects of, and changes in, trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve, or in laws or regulations affecting us; • the public reaction to our press releases, our other public announcements and our filings with the SEC; 44 Table of Contents • changes in accounting standards, policies, guidance, interpretations or principles; • the number (if any) of securities analysts covering us; • publication of research reports about us, our competitors, or the financial services industry generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage; • changes in market valuations or earnings of companies that investors deem comparable to us; • the trading volume of our common stock; • future issuances of our common stock or other securities; • future sales of our common stock by us or our directors, executive officers or significant stockholders; • additions or departures of key personnel; • perceptions in the marketplace regarding our competitors and us; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; • other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services; and • other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core market or the financial services industry.
There are many factors that may impact the market price and trading volume of our common stock, including, without limitation: • actual or anticipated fluctuations in our operating results, financial condition or asset quality; • changes in economic or business conditions; • the effects of, and changes in, trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve, or in laws or regulations affecting us; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • changes in accounting standards, policies, guidance, interpretations or principles; • the number (if any) of securities analysts covering us; • publication of research reports about us, our competitors, or the financial services industry generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage; • changes in market valuations or earnings of companies that investors deem comparable to us; • the trading volume of our common stock; • future issuances of our common stock or other securities; • future sales of our common stock by us or our directors, executive officers or significant stockholders; • additions or departures of key personnel; 46 Table of Contents • perceptions in the marketplace regarding our competitors and us; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; • other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services; and • other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core market or the financial services industry.
Unlike larger financial institutions that are more geographically diversified, we are a regional bank concentrated in the Interstate 20 Corridor between the Dallas/Fort Worth metropolitan area, East Texas, North Louisiana and Jackson, Mississippi, as well as in Houston, Texas. Recently, we expanded our presence into Mobile, Alabama and Fort Walton Beach, Florida.
Unlike larger financial institutions that are more geographically diversified, we are a regional bank concentrated in the Interstate 20 corridor between the Dallas/Fort Worth metropolitan area, East Texas, North Louisiana and Jackson, Mississippi, as well as in Houston, Texas and Oxford, Mississippi. Recently, we expanded our presence into Mobile, Alabama and Fort Walton Beach, Florida.
Continued economic uncertainty and an inflationary, recessionary or stagnant economy could result in financial stress on our borrowers, which could adversely affect our business, financial condition and results of operations. Deteriorating conditions in the regional economies we serve, or in certain sectors of those economies, could drive losses beyond that which is provided for in our allowance for credit losses.
Economic uncertainty and an inflationary, recessionary or stagnant economy could result in financial stress on our borrowers, which could adversely affect our business, financial condition and results of operations. Deteriorating conditions in the regional economies we serve, or in certain sectors of those economies, could drive losses beyond that which is provided for in our allowance for credit losses.
Further, if actual charge-offs in future periods exceed our estimation of charge-offs, we may need additional provision for loan losses to restore the adequacy of our allowance for loan losses.
Further, if actual charge-offs in future periods exceed our estimation of charge-offs, we may need additional provision for loan credit losses to restore the adequacy of our allowance for loan credit losses.
Compliance with current or future privacy, data protection and information security laws to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could materially and adversely affect our profitability. 33 Table of Contents Our business is susceptible to fraud.
Compliance with current or future privacy, data protection and information security laws to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could materially and adversely affect our profitability. 34 Table of Contents Our business is susceptible to fraud.
We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as diversity, equity and inclusion ("DEI"), environmental stewardship, human capital management, support for our local communities, corporate governance and transparency, or fail to consider ESG factors in our business operations.
We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as diversity, equity and inclusion (“DEI”), environmental stewardship, human capital management, support for our local communities, corporate governance and transparency, or fail to consider ESG factors in our business operations.
If Origin Bank received an overall CRA rating of less than "Satisfactory", the Federal Reserve would not re-evaluate its rating until its next CRA examination, which may not occur for several more years, and it is possible that a low CRA rating would not improve in the future.
If Origin Bank received an overall CRA rating of less than “Satisfactory”, the Federal Reserve would not re-evaluate its rating until its next CRA examination, which may not occur for several more years, and it is possible that a low CRA rating would not improve in the future.
Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty, and other relationships.
We may be adversely affected by the soundness of other financial institutions. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty, and other relationships.
It is difficult or impossible to defend against every risk being posed by changing technologies or criminals intent on committing cyber-crime. Our controls and protections and those of our vendors could prove inadequate.
It is difficult or impossible to defend against every risk being posed by changing technologies or criminals’ intent on committing cyber-crime. Our controls and protections and those of our vendors could prove inadequate.
Our financial condition and results of operations may be adversely affected by changes in accounting policies, standards and interpretations. The Financial Accounting Standards Board ("FASB") and other bodies that establish accounting standards periodically change the financial accounting and reporting standards governing the preparation of our financial statements.
Our financial condition and results of operations may be adversely affected by changes in accounting policies, standards and interpretations. The Financial Accounting Standards Board (“FASB”) and other bodies that establish accounting standards periodically change the financial accounting and reporting standards governing the preparation of our financial statements.
A disaster could, therefore, result in decreased revenue and loan losses that could have an adverse effect on our business, financial condition and results of operations. We have a continuing need for technological change, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology.
A disaster could, therefore, result in decreased revenue and loan losses that could have an adverse effect on our business, financial condition and results of operations. 39 Table of Contents We have a continuing need for technological change, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology.
If Origin Bank is unable to maintain at least a "Satisfactory" CRA rating, our ability to complete the acquisition of another financial institution or open a new branch will be adversely impacted.
If Origin Bank is unable to maintain at least a “Satisfactory” CRA rating, our ability to complete the acquisition of another financial institution or open a new branch will be adversely impacted.
Further, such losses could be realized into earnings should liquidity and/or business strategy necessitate the sales of securities in a loss position. Additionally, further increases in interest rates may, among other things, reduce the demand for loans and our ability to originate loans and decrease loan repayment rates.
Further, such losses could be realized into earnings should liquidity and/or business strategy necessitate the sales of securities in a loss position. 29 Table of Contents Additionally, further increases in interest rates may, among other things, reduce the demand for loans and our ability to originate loans and decrease loan repayment rates.
The existence of credit and market risk associated with our derivative instruments could adversely affect our net interest income and, therefore, could have an adverse effect on our business, financial condition and results of operations. The fair value of our investment securities can fluctuate due to factors outside of our control.
The existence of credit and market risk associated with our derivative instruments could adversely affect our net interest income and, therefore, could have an adverse effect on our business, financial condition and results of operations. 42 Table of Contents The fair value of our investment securities can fluctuate due to factors outside of our control.
As a result, our inability to successfully manage credit risk could have an adverse effect on our business, financial condition and results of operations. 30 Table of Contents Our allowance for loan credit losses may prove to be insufficient to absorb losses inherent in our loan portfolio and our earnings could decrease.
As a result, our inability to successfully manage credit risk could have an adverse effect on our business, financial condition and results of operations. Our allowance for loan credit losses may prove to be insufficient to absorb losses inherent in our loan portfolio and our earnings could decrease.
Cyber-security risks are growing and, as a result, the cyber-resilience of banking organizations is of increased importance to federal and state banking agencies and other regulators.
Cybersecurity risks are growing and, as a result, the cyber-resilience of banking organizations is of increased importance to federal and state banking agencies and other regulators.
In addition, the Louisiana Office of Financial Institutions or the Federal Reserve may direct us to restrain our growth. 36 Table of Contents We may not be able to manage the risks associated with our anticipated growth and expansion through de novo branching.
In addition, the Louisiana Office of Financial Institutions or the Federal Reserve may direct us to restrain our growth. We may not be able to manage the risks associated with our anticipated growth and expansion through de novo branching.
Such estimates rely upon complex modeling inputs and judgments, including forecasts of economic conditions, which may be rendered inaccurate and/or no longer subject to accurate forecasting; • our ability to assess the creditworthiness of our borrowers may be impaired if the models and approaches we use to select, manage, and underwrite loans become less predictive of future charge-offs; • regulatory scrutiny of the industry has increased and could continue to increase, leading to increased regulation of the industry that could lead to a higher cost of compliance, limit our ability to pursue business opportunities and increase our exposure to litigation or fines; • 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 our profitability and overall financial condition; • erosion in the fiscal condition of the U.S.
Such estimates rely upon complex modeling inputs and judgments, including forecasts of economic conditions, which may be rendered inaccurate and/or no longer subject to accurate forecasting; 28 Table of Contents • our ability to assess the creditworthiness of our borrowers may be impaired if the models and approaches we use to select, manage, and underwrite loans become less predictive of future charge-offs; • regulatory scrutiny of the industry has increased and could continue to increase, leading to increased regulation of the industry that could lead to a higher cost of compliance, limit our ability to pursue business opportunities and increase our exposure to litigation or fines; • monetary policy or other market conditions could cause rapid changes in interest rates and asset values that would have a materially adverse impact on our profitability and overall financial condition; • increased taxes would limit our ability to pursue growth and return profits to shareholders; and • erosion in the fiscal condition of the U.S.
These laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which we can engage, limit the dividends or distributions that Origin Bank can pay to us, and that we can pay to our stockholders, and impose certain specific accounting requirements on us that may be more restrictive and may result in greater or earlier charges to earnings or reductions in our capital than U.S.
These laws and regulations, among other matters, prescribe minimum capital requirements, limit the magnitude of fees we can charge our customers, impose limitations on the business activities in which we can engage, limit the dividends or distributions that Origin Bank can pay to us, and that we can pay to our stockholders, and impose certain specific accounting requirements on us that may be more restrictive and may result in greater or earlier charges to earnings or reductions in our capital than U.S.
Accordingly, we may lose customers seeking new technology-driven products and services to the extent we are unable to provide such products and services. 38 Table of Contents New lines of business, products, product enhancements or services may subject us to additional risks.
Accordingly, we may lose customers seeking new technology-driven products and services to the extent we are unable to provide such products and services. New lines of business, products, product enhancements or services may subject us to additional risks.
Real estate values in our 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, 2023, $5.25 billion, or 68.5%, of our total LHFI was comprised of loans with real estate as a primary component of collateral.
Real estate values in our 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, 2024, $5.20 billion, or 68.6%, of our total LHFI was comprised of loans with real estate as a primary component of collateral.
In particular, the realization of any of the risks described in this "Risk Factors" section of this report or other unknown risks could have a material adverse effect on the market price of our common stock and cause the value of your investment to decline.
In particular, the realization of any of the risks described in this “Risk Factors” section of this report or other unknown risks could have a material adverse effect on the market price of our common stock and cause the value of your investment to decline.
We could also face the following risks in connection with the following events: • inflationary pressures remained elevated throughout 2022 and 2023, and may to continue into 2024; • market developments and economic stagnation or slowdown may affect consumer confidence levels and may cause adverse changes in payment patterns, resulting in increased delinquencies and default rates on loans and other credit facilities; • the processes we use to estimate the allowance for credit losses and other reserves may prove to be unreliable.
We could also face the following risks in connection with the following events: • inflationary pressures remained elevated throughout 2023 and 2024, and may to continue into 2025; • market developments, economic stagnation or slowdowns, and tariffs are expected to affect consumer confidence levels and may cause adverse changes in payment patterns, resulting in increased delinquencies and default rates on loans and other credit facilities; • the processes we use to estimate the allowance for credit losses and other reserves may prove to be unreliable.
These activities strongly influence our rate of return on certain investments, our hedge effectiveness for mortgage servicing and our mortgage origination pipeline, as well as our costs of funds for lending and investing, all of which may adversely impact our liquidity, results of operations, financial condition and capital position. 29 Table of Contents Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations.
These activities strongly influence our rate of return on certain investments, our mortgage origination pipeline, as well as our costs of funds for lending and investing, all of which may adversely impact our liquidity, results of operations, financial condition and capital position. Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations.
We will be subject to heightened regulatory requirements if our total assets grow in excess of $10 billion as of December 31 of any calendar year. As of December 31, 2023, our total assets were $9.72 billion and we expect our total assets to grow in excess of $10 billion during the 2024 year.
We will be subject to heightened regulatory requirements if our total assets exceed $10 billion as of December 31 of any calendar year. As of December 31, 2024, our total assets were $9.68 billion, and we expect our total assets to grow in excess of $10 billion during the 2025 year.
If we are unable to efficiently replace ineffective service providers, or if we experience a significant, sustained or repeated, system failure or service denial, it could compromise our ability to operate effectively, damage our reputation, result in a loss of customer business, and subject us to additional regulatory scrutiny and possible financial liability, any of which could have an adverse effect on our business, financial condition and results of operations. 41 Table of Contents We are subject to environmental liability risk associated with our lending activities.
If we are unable to efficiently replace ineffective service providers, or if we experience a significant, sustained or repeated, system failure or service denial, it could compromise our ability to operate effectively, damage our reputation, result in a loss of customer business, and subject us to additional regulatory scrutiny and possible financial liability, any of which could have an adverse effect on our business, financial condition and results of operations.
Our acquisition activities could be material to our business and involve a number of risks, including those associated with: • the identification of suitable institutions or assets for acquisition; • the diversion of management attention from the operation of our existing business to identify, evaluate and negotiate potential transactions; • the ability to attract funding to support additional growth within acceptable risk tolerances; • the use of inaccurate estimates and judgments to evaluate credit, operations, management and market risks with respect to the target institution or assets; • the ability to maintain asset quality; • the adequacy of due diligence and the potential exposure to unknown or contingent liabilities related to the acquisition; • the retention of customers and key personnel, including bankers; • the timing and uncertainty associated with obtaining necessary regulatory approvals; • the incurrence of an impairment of goodwill associated with an acquisition and adverse effects on our results of operations; • the ability to successfully integrate acquired businesses; • litigation risk; and • the maintenance of adequate regulatory capital. 37 Table of Contents The market for acquisition targets is highly competitive, which may adversely affect our ability to find acquisition candidates that fit our strategy and standards at acceptable prices.
Our acquisition activities could be material to our business and involve a number of risks, including those associated with: • the identification of suitable institutions or assets for acquisition; • the diversion of management attention from the operation of our existing business to identify, evaluate and negotiate potential transactions; • the ability to attract funding to support additional growth within acceptable risk tolerances; • the use of inaccurate estimates and judgments to evaluate credit, operations, management and market risks with respect to the target institution or assets; • the ability to maintain asset quality; 38 Table of Contents • the adequacy of due diligence and the potential exposure to unknown or contingent liabilities related to the acquisition; • the retention of customers and key personnel, including bankers; • the timing and uncertainty associated with obtaining necessary regulatory approvals; • the incurrence of an impairment of goodwill associated with an acquisition and adverse effects on our results of operations; • the ability to successfully integrate acquired businesses; • litigation risk; and • the maintenance of adequate regulatory capital.
Conversely, decreases in interest rates could result in an acceleration of loan prepayments. The increased market interest rates could also adversely affect the ability of our floating-rate borrowers to meet their higher payment obligations. If this occurred, it could cause an increase in nonperforming assets and charge offs, which could adversely affect our business.
Continued increased market interest rates could also adversely affect the ability of our floating-rate borrowers to meet their higher payment obligations. If this occurred, it could cause an increase in nonperforming assets and charge offs, which could adversely affect our business.
In the course of our business, we may purchase real estate, or we may foreclose on and take title to real estate. As a result, we could be subject to environmental liabilities with respect to these properties.
We are subject to environmental liability risk associated with our lending activities. In the course of our business, we may purchase real estate, or we may foreclose on and take title to real estate. As a result, we could be subject to environmental liabilities with respect to these properties.
The federal Financial Crimes Enforcement Network, established by the Treasury to administer the Bank Secrecy Act, is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the individual federal bank regulatory agencies, as well as the U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service.
The federal Financial Crimes Enforcement Network, or FinCEN, established by the Treasury to administer the Bank Secrecy Act, is authorized to impose significant civil money penalties for violations of those requirements and may coordinate enforcement efforts with the individual federal bank regulatory agencies, as well as the U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service.
Federal bank regulatory agencies and state bank regulators also have begun to focus on compliance with Bank Secrecy Act and anti-money laundering regulations.
Federal bank regulatory agencies and state bank regulators also have increased their focus on compliance with Bank Secrecy Act and anti-money laundering regulations.
However, if a court rules adversely to our defense of any class action lawsuits, or if we enter into a settlement agreement in connection with any class action lawsuit, we could be exposed to monetary damages, reputational harm, or subject to limits on our ability to operate our business, which could have an adverse effect on our financial condition and operating results. 42 Table of Contents We may be adversely affected by the soundness of other financial institutions.
However, if a court rules adversely to our defense of any class action lawsuits, or if we enter into a settlement agreement in connection with any class action lawsuit, we could be exposed to monetary damages, reputational harm, or subject to limits on our ability to operate our business, which could have an adverse effect on our financial condition and operating results.
Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, hostile third-party action or continued unpredictable and unstable market conditions. We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses. Our business depends on our ability to successfully measure and manage credit risk.
Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, hostile third-party action or continued unpredictable and unstable market conditions. 30 Table of Contents We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses.
As a lender, we are exposed to the risk that the principal of, or interest on, a loan will not be repaid timely or at all or that the value of any collateral supporting a loan will be insufficient to cover our outstanding exposure.
Our business depends on our ability to successfully measure and manage credit risk. As a lender, we are exposed to the risk that the principal of, or interest on, a loan will not be repaid timely or at all or that the value of any collateral supporting a loan will be insufficient to cover our outstanding exposure.
Our ability to compete successfully will depend on a number of factors, including, among other things: • our ability to develop, maintain and build long-term customer relationships based on top quality service, high ethical standards and safe, sound assets; • our scope, relevance and pricing of products and services offered to meet customer needs and demands; • the rate at which we introduce new products and services relative to our competitors; • customer satisfaction with our level of service; • our ability to expand our market position; • industry and general economic trends; and • our ability to keep pace with technological advances and to invest in new technology. 35 Table of Contents Increased competition could require us to increase the rates we pay on deposits or lower the rates we offer on loans, which could reduce our profitability.
Our ability to compete successfully will depend on a number of factors, including, among other things: • our ability to develop, maintain and build long-term customer relationships based on top quality service, high ethical standards and safe, sound assets; • our scope, relevance and pricing of products and services offered to meet customer needs and demands; • the rate at which we introduce new products and services relative to our competitors; • customer satisfaction with our level of service; • our ability to expand our market position; • industry and general economic trends; and • our ability to keep pace with technological advances and to invest in new technology.
Our ability to retain and grow our loans, deposits and fee income depends upon the business generation capabilities, reputation and relationship management skills of our bankers.
Our ability to attract and retain profitable bankers is critical to the success of our business strategy. Our ability to retain and grow our loans, deposits and fee income depends upon the business generation capabilities, reputation and relationship management skills of our bankers.
We face a risk of noncompliance with the Bank Secrecy Act and other anti-money laundering statutes and regulations. The federal Bank Secrecy Act, USA Patriot Act of 2001 and other laws and regulations require financial institutions, among other duties, to institute and maintain effective anti-money laundering programs and file suspicious activity and currency transaction reports as appropriate.
The federal Bank Secrecy Act, USA Patriot Act and other laws and regulations require financial institutions, among other duties, to institute and maintain effective anti-money laundering programs and file suspicious activity and currency transaction reports as appropriate.
At December 31, 2023, the size of our average loan held for investment was approximately $538,170. Further, at December 31, 2023, our 20 largest borrowing relationships, excluding mortgage loans held for sale, represented 10.6% of our outstanding loan portfolio, and 11.2% of our total commitments to extend credit.
At December 31, 2024, the size of our average loan held for investment was approximately $567,242. Further, at December 31, 2024, our 20 largest borrowing relationships, excluding mortgage loans held for sale, represented 11.3% of our outstanding loan portfolio, and 10.1% of our total commitments to extend credit.
At December 31, 2023, the fair value of our portfolio of available for sale investment securities was approximately $1.25 billion, which included a net unrealized loss of approximately $154.0 million, before taxes.
At December 31, 2024, the fair value of our portfolio of available for sale investment securities was approximately $1.10 billion, which included a net unrealized loss of approximately $134.9 million, before taxes.
Any reduction in interchange income as a result of the loss of the exemption for small issuers under the Durbin Amendment could have a significant adverse effect on our business, financial condition and results of operations.
Any reduction in interchange income as a result of the loss of the exemption for small issuers under the Durbin Amendment could have a significant adverse effect on our business, financial condition and results of operations. Our interchange fees for the year ended December 31, 2024, were $8.3 million.
Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities.
The unrealized loss negatively impacted total stockholders’ equity. Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities.
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 we anticipate, exposing us to increased credit risk.
The collateral securing such loans generally includes movable property, such as equipment and inventory, which may decline in value more rapidly than we anticipate, exposing us to increased credit risk.
From time to time, legislative initiatives, such as corporate tax rate changes, which may impact our effective tax rate and could adversely affect our deferred tax assets or our tax positions or liabilities, may be enacted.
The tax laws applicable to our business activities are subject to interpretation and may change over time. From time to time, legislative initiatives, such as corporate tax rate changes, which may impact our effective tax rate and could adversely affect our deferred tax assets or our tax positions or liabilities, may be enacted.
If general economic conditions negatively impact the markets in which we operate and small to medium-sized businesses are adversely affected or our borrowers are otherwise harmed by adverse business developments, this, in turn, could have an adverse effect on our business, financial condition and results of operations.
If general economic conditions negatively impact the markets in which we operate and small to medium-sized businesses are adversely affected or our borrowers are otherwise harmed by adverse business developments, this, in turn, could have an adverse effect on our business, financial condition and results of operations. 36 Table of Contents We face significant competition to attract and retain customers, which could impair our growth, decrease our profitability or result in loss of market share.
Liquidity is essential to our business, and we monitor our liquidity and manage our liquidity risk at the holding company and bank levels daily. We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans and investment securities, respectively, to ensure that we have adequate liquidity to fund our operations.
We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans and investment securities, respectively, to ensure that we have adequate liquidity to fund our operations.
Risks Related to the Regulation of Our Industry We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, could subject us to regulatory action or penalties.
These problems, losses or defaults could have an adverse effect on our business, financial condition and results of operations. 44 Table of Contents Risks Related to the Regulation of Our Industry We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, could subject us to regulatory action or penalties.
We have benefited from strong relationships with and among our customers. As a result, our reputation is one of the most valuable components of our business.
Our ability to maintain our reputation is critical to the success of our business. Our business plan emphasizes relationship focused banking. We have benefited from strong relationships with and among our customers. As a result, our reputation is one of the most valuable components of our business.
As a consequence of these various limitations and restrictions, we may not be able to make, or may have to reduce or eliminate, the payment of dividends on our common stock.
As a consequence of these various limitations and restrictions, we may not be able to make, or may have to reduce or eliminate, the payment of dividends on our common stock. Any change in the level of our dividends or the suspension of the payment thereof could have a material adverse effect on the market price of our common stock.
At December 31, 2023, 67.9% of our total loans (by dollar amount), excluding mortgage warehouse lines of credit, were made to borrowers who reside or conduct business in Texas, 19.2% attributable to Louisiana and 6.5% attributable to Mississippi, and majority of our real estate loans are secured by properties located in these states.
At December 31, 2024, 69.2% of our total loans (by dollar amount), excluding mortgage warehouse lines of credit, were made to borrowers who reside or conduct business in Texas, 18.4% attributable to Louisiana and 7.1% attributable, in total, to Mississippi, Mobile, Alabama and Fort Walton Beach, Florida and majority of our real estate loans are secured by properties located in these states.
Your investment in our common stock will not be a bank deposit and will not be insured or guaranteed by the FDIC or any other government agency. Your investment will be subject to investment risk, and you must be capable of affording the loss of your entire investment. Item 1B. Unresolved Staff Comments None.
An investment in our common stock is not an insured deposit and is subject to risk of loss. Your investment in our common stock will not be a bank deposit and will not be insured or guaranteed by the FDIC or any other government agency.
Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses, or to fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity and could, in turn, have an adverse effect on our business, financial condition and results of operations.
In addition, our access to deposits may be affected by the liquidity and/or cash flow needs of depositors, which may be exacerbated in an inflationary, recessionary, or elevated rate environment. 41 Table of Contents Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses, or to fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity and could, in turn, have an adverse effect on our business, financial condition and results of operations.
If Origin Bank does not meet minimum capital requirements, it will be subject to prompt corrective action by the Federal Reserve. Prompt corrective action can include progressively more restrictive constraints on operations, management and capital distributions.
If Origin Bank does not meet minimum capital requirements, it will be subject to prompt corrective action by the Federal Reserve. Prompt corrective action can include progressively more restrictive constraints on operations, management and capital distributions. Failure to exceed the capital conservation buffer will result in certain limitations on dividends, capital repurchases, and discretionary bonus payments to executive officers.
If any of our largest borrowers become unable to repay their loan obligations as a result of economic or market conditions or personal circumstances, our nonperforming loans and our provision for loan losses could increase significantly, which could have an adverse effect on our business, financial condition and results of operations. 32 Table of Contents We rely heavily on our executive management team and other key employees, and the loss of any of these individuals could adversely impact our business or reputation.
If any of our largest borrowers become unable to repay their loan obligations as a result of economic or market conditions or personal circumstances, our nonperforming loans and our provision for loan credit losses could increase significantly, which could have an adverse effect on our business, financial condition and results of operations.
Further, the Federal Reserve announced an intention to take further actions to mitigate inflationary pressures. Rapid changes in interest rates may make it difficult for us to balance our loan and deposit portfolios, which may adversely affect our results of operations by, for example, reducing asset yields or spreads, or having other adverse impacts on our business.
Future rapid changes in interest rates, in either direction, may make it difficult for us to balance our loan and deposit portfolios, which may adversely affect our results of operations by, for example, reducing asset yields or spreads, or having other adverse impacts on our business. Decreases in interest rates could result in an acceleration of loan prepayments.
Such claims may increase in the future as the financial services sector becomes more reliant on information technology vendors. The plaintiffs in these actions frequently seek injunctions and substantial damages.
Such claims may increase in the future as the financial services sector becomes more reliant on information technology vendors.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, which would negatively impact our business, financial condition and results of operations.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, which would negatively impact our business, financial condition and results of operations. 45 Table of Contents Failure by Origin Bank to perform satisfactorily on its Community Reinvestment Act (“CRA”) evaluations could make it more difficult for our business to grow.
If we are found to infringe one or more patents or other intellectual property rights, we may be required to pay substantial damages or royalties to a third party.
Such litigation is often expensive, time-consuming, disruptive to our operations and distracting to management. If we are found to infringe one or more patents or other intellectual property rights, we may be required to pay substantial damages or royalties to a third party.
The Company’s and its customers’ exposure to fraud may increase the Company’s financial risk and reputation risk as it may result in unexpected loan losses that exceed those that have been provided for in the allowance for credit losses. Our ability to attract and retain profitable bankers is critical to the success of our business strategy.
The Company’s and its customers’ exposure to fraud may increase the Company’s financial risk and reputation risk as it may result in unexpected litigation expense, other costs and loan losses that exceed those that have been provided for in the allowance for credit losses.
Unexpected deterioration in the credit quality of our commercial real estate loan portfolio would require us to increase our provision for loan losses, which would reduce our profitability, and could materially adversely affect our business, financial condition and results of operations.
Unexpected deterioration in the credit quality of our commercial real estate loan portfolio would require us to increase our provision for loan credit losses, which would reduce our profitability, and could materially adversely affect our business, financial condition and results of operations. 32 Table of Contents A large portion of our loan portfolio is comprised of commercial loans secured by receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could expose us to credit losses.
We and other financial institutions have been the subject of litigation, investigations and other proceedings which could result in legal liability and damage to our reputation. We and certain of our directors, officers and subsidiaries are named from time to time as defendants in litigation and are the subject of investigations and other proceedings relating to our business and activities.
We and other financial institutions have been the subject of litigation, investigations and other proceedings which could result in legal liability and damage to our reputation.
We were not required to repurchase any material amount of mortgage loans sold into the secondary market during 2023, 2022 or 2021. 39 Table of Contents A lack of liquidity could impair our ability to fund operations.
We were not required to repurchase any material amount of mortgage loans sold into the secondary market during 2024, 2023 or 2022. A lack of liquidity could impair our ability to fund operations. Liquidity is essential to our business, and we monitor our liquidity and manage our liquidity risk at the holding company and bank levels daily.
Further, to the extent that any of the information in this report constitutes forward-looking statements, the risk factors below also are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf.
Further, to the extent that any of the information in this report constitutes forward-looking statements, the risk factors below also are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. 26 Table of Contents Summary Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects.
Furthermore, our primary strategy focuses on organic growth, supplemented by acquisitions of banking teams or other financial institutions. We may be unable to execute on aspects of our growth strategy to sustain our historical rate of growth or we may be unable to grow at all.
We may be unable to execute on aspects of our growth strategy to sustain our historical rate of growth or we may be unable to grow at all.
Additionally, investors and shareholder advocates are placing ever increasing emphasis on how corporations address ESG issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations. We may incur meaningful costs with respect to our ESG efforts and if such efforts are negatively perceived, our reputation and stock price may suffer.
Additionally, investors and shareholder advocates are placing ever increasing emphasis on how corporations address ESG issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations.
Accordingly, changes in levels of market interest rates could materially and adversely affect our net interest income and our net interest margin, asset quality, loan and lease origination volume, liquidity, and overall profitability.
Accordingly, changes in levels of market interest rates could materially and adversely affect our net interest income and our net interest margin, asset quality, loan and lease origination volume, liquidity, and overall profitability. We cannot assure you that we can minimize our interest rate risk. In addition, we originate residential mortgage loans for sale and for our portfolio.
Our interchange fees for the year ended December 31, 2023, were $8.4 million. 34 Table of Contents Moreover, our loss of eligibility under the exemption for small issuers could adversely affect or reduce our ability to maintain certain of our fee-sharing prepaid card partnerships, which have the right to terminate our agreement with respect to certain financial services under such circumstances.
Moreover, our loss of eligibility under the exemption for small issuers could adversely affect or reduce our ability to maintain certain of our fee-sharing prepaid card partnerships, which have the right to terminate our agreement with respect to certain financial services under such circumstances. We may have exposure to tax liabilities that are larger than we anticipate.
Risks Related to Our Business Current uncertain economic conditions pose challenges, and could adversely affect our business, financial condition and results of operations. We are operating in an uncertain economic environment. The COVID-19 pandemic caused a global economic slowdown, and while we have seen economic recovery, labor shortages and inflation risk are affecting the continued recovery.
Risks Related to Our Business Current uncertain economic conditions pose challenges, and could adversely affect our business, financial condition and results of operations. We are operating in an uncertain economic environment.
Significant increases in market interest rates on loans, or the perception that an increase may occur, could adversely affect both our ability to originate new loans and our ability to grow. Beginning early in 2022, in response to growing signs of inflation, the Federal Reserve has increased interest rates rapidly.
Changes in interest rates could have an adverse impact on our results of operations and financial condition. Significant increases in market interest rates on loans, or the perception that an increase may occur, could adversely affect both our ability to originate new loans and our ability to grow.
Regardless of the scope or validity of such patents or other intellectual property rights, or the merits of any claims by potential or actual litigants, we may have to engage in protracted litigation. Such litigation is often expensive, time-consuming, disruptive to our operations and distracting to management.
The plaintiffs in these actions frequently seek injunctions and substantial damages. 43 Table of Contents Regardless of the scope or validity of such patents or other intellectual property rights, or the merits of any claims by potential or actual litigants, we may have to engage in protracted litigation.
If we fail to maintain capital to meet regulatory requirements, we could be subject to enforcement actions or other regulatory consequences, which could have an adverse effect on our business, financial condition and results of operation. 40 Table of Contents By engaging in derivative transactions, we are exposed to additional credit and market risk.
Accordingly, we cannot assure you that we will be able to raise additional capital if needed or on terms acceptable to us. If we fail to maintain capital to meet regulatory requirements, we could be subject to enforcement actions or other regulatory consequences, which could have an adverse effect on our business, financial condition and results of operation.
While we are not currently subject to annual Dodd-Frank Act stress testing and the Comprehensive Capital Analysis and Review submissions, we currently utilize stress testing for capital, credit and liquidity purposes and anticipate that model-derived testing may become more extensively implemented by regulators in the future.
While we are not currently subject to annual Dodd-Frank Act stress testing and the Comprehensive Capital Analysis and Review submissions, we currently utilize stress testing for capital, credit and liquidity purposes and anticipate that model-derived testing may become more extensively implemented by regulators in the future. 40 Table of Contents We anticipate data-based modeling will penetrate further into bank decision-making, particularly risk management efforts, as the capacities developed to meet rigorous stress testing requirements are able to be employed more widely and in differing applications.
Treasury could lead to new taxes that would limit our ability to pursue growth and return profits to shareholders; and • the U.S. government’s decisions regarding its debt ceiling and the possibility that the U.S. could default on its debt obligations may cause further interest rate increases, disrupt access to capital markets and deepen recessionary conditions.
Treasury, the U.S. government’s decisions regarding its debt ceiling and the possibility that the U.S. could default on its debt obligations may cause further interest rate increases, disrupt access to capital markets, result in new taxes and trigger recessionary conditions. If these conditions or similar ones continue to exist or worsen, we could experience adverse effects on our financial condition.
Adverse reputational impacts or events may also increase our litigation risk. Our business faces increasing public scrutiny related to environmental, social and governance ("ESG") activities.
Adverse reputational impacts or events may also increase our litigation risk. Over recent years we have faced increased public scrutiny related to ESG activities.
We will become subject to reduced debit interchange income and could face related adverse business consequences if our total assets grow in excess of $10 billion as of December 31 of any calendar year.
Our regulators may also consider our preparation for compliance with these regulatory requirements in the course of examining our operations generally or when considering any request from us or the Bank. 35 Table of Contents We will become subject to reduced debit interchange income and overdraft income and could face related adverse business consequences if our total assets grow in excess of $10 billion as of December 31 of any calendar year.
If the population, employment or income growth in one of our markets is negative or slower than projected, income levels, deposits and real estate development could be adversely impacted.
If the population, employment or income growth in one of our markets is negative or slower than projected, income levels, deposits and real estate development could be adversely impacted. Some of our larger competitors that are more geographically diverse may be better able to manage and mitigate risks posed by adverse conditions impacting only local or regional markets.
We face significant competition in pursuing acquisition targets from other banks and financial institutions, many of which possess greater financial, human, technical and other resources than we do.
The market for acquisition targets is highly competitive, which may adversely affect our ability to find acquisition candidates that fit our strategy and standards at acceptable prices. We face significant competition in pursuing acquisition targets from other banks and financial institutions, many of which possess greater financial, human, technical and other resources than we do.
The decline in the fair value of our available for sale investment securities portfolio during the year ended December 31, 2022, and continuing into the year ended December 31, 2023, negatively impacted total stockholders’ equity, primarily due to the steepening of the short end of the yield curve.
The unrealized loss resulted from the decline in fair value of our available for sale investment securities portfolio starting during the year ended December 31, 2022, and continuing through the year ended December 31, 2024, which decline was primarily due to the steepening of the short end of the yield curve as a result of the rapid increase in interest rates intended to reduce inflation.
If we are required to materially increase our level of allowance for loan credit losses for any reason, such increases could have an adverse effect on our business, financial condition and results of operations.
If we are required to materially increase our level of allowance for loan credit losses for any reason, such increases could have an adverse effect on our business, financial condition and results of operations. 31 Table of Contents Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing certain of our loans and result in loan and other losses.
In general, these loans are collateralized by general business assets, including, among other things, accounts receivable, inventory and equipment and many are backed by a personal guaranty of the borrower or principal. 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.
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.

… 55 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−1 removed8 unchanged
Biggest changeOrigin follows FFIEC guidance in protecting its network and information assets with industry-tested security products and processes. Our Network and Information Security teams actively monitor company networks and systems to detect suspicious or malicious events. The Company evaluates potential cyber risks, as appropriate, in its regular risk assessments.
Biggest changeAssessing, identifying and managing cybersecurity related risks are integrated into our overall enterprise risk management process. 47 Table of Contents Cybersecurity Risk Management and Strategy Origin follows FFIEC guidance in protecting its network and information assets with industry-tested security products and processes. Our Network and Information Security teams actively monitor company networks and systems to detect suspicious or malicious events.
As part of our information security program, we have adopted an Information and Cybersecurity Incident Response Plan (Incident Response Plan), which is primarily overseen by our Vice President, Information Security Officer (“ISO”).
As part of our information security program, we have adopted an Information and Cybersecurity Incident Response Plan (Incident Response Plan), which is primarily overseen by our Senior Vice President, Information Security Officer (“ISO”).
Additionally, we have engaged the former Chief Information Officer of a Fortune 500 global technology company to consult with our Board of Directors, management, and management-level Cyber Risk and Information Technology Committees on cybersecurity and data privacy matters. Our Information Security Officer (“ISO”) is responsible for the Company’s information security program.
Additionally, we have engaged the former Chief Information Officer of a Fortune 500 global technology company to consult with our Board of Directors, management, and management-level Cyber Risk and Information Technology Committees on cybersecurity and data privacy matters. Our ISO is responsible for the Company’s information security program.
The Incident Response Plan includes procedures for escalation and reporting of potentially significant cybersecurity incidents to our Chief Operating Officer, Chief Financial Officer, Chief Risk Officer, Chief Legal Counsel, and other executives as needed. 46 Table of Contents To date, we have not experienced a cybersecurity incident that has materially impacted our business strategy, results of operations, or financial condition.
The Incident Response Plan includes procedures for escalation and reporting of potentially significant cybersecurity incidents to our Chief Operating Officer, Chief Financial Officer, Chief Risk Officer, Chief Legal Counsel, and other executives as needed. To date, we have not experienced a cybersecurity incident that has materially impacted our business strategy, results of operations, or financial condition.
Please see Part I, Item 1A. Risk Factors for further discussion of the risks associated with an interruption or breach in our information systems or infrastructure. Cybersecurity Governance Our Board of Directors is responsible for overseeing our business and affairs, including risks associated with cybersecurity threats.
Please see Part I, Item 1A. Risk Factors for further discussion of the risks associated with an interruption or breach in our information systems or infrastructure. 48 Table of Contents Cybersecurity Governance Our Board of Directors is responsible for overseeing our business and affairs, including risks associated with cybersecurity threats.
Our ISO holds a degree in Computer Information Systems and is a graduate of Louisiana Tech University. He possesses over 15 years of experience in diverse technology and information security roles within the financial services sector, with four years experience in the ISO role.
Our ISO holds a degree in Computer Information Systems and is a graduate of Louisiana Tech University. He possesses over 18 years of experience in diverse technology and information security roles within the financial services sector, with five years’ experience in the ISO role.
We require each employee to complete training to protect the confidentiality of client information at the time of hire and during each year of employment. Employees must successfully pass a test to demonstrate understanding of these requirements and provide acknowledgement of their responsibilities.
We communicate this responsibility to employees upon hiring, and regularly throughout their employment. We require each employee to complete training to protect the confidentiality of client information at the time of hire and during each year of employment. Employees must successfully pass a test to demonstrate understanding of these requirements and provide acknowledgement of their responsibilities.
The Board oversees our corporate risk governance processes primarily through its committees, and oversight of cybersecurity threats is delegated primarily to our Risk Committee. We created management-level Cyber Risk and Information Technology Committees to govern and oversee the information security program on a day-to-day basis.
The Board oversees our corporate risk governance processes primarily through its committees, and oversight of cybersecurity threats is delegated primarily to our Risk Committee. Management also participates in Cyber Risk and Information Technology Committees used to govern and oversee the information security program.
Third party service providers processing sensitive client data are contractually required to meet applicable legal and regulatory obligations to protect sensitive data against cyber security threats and unauthorized access to the sensitive data. After contract executions, third-party service providers undergo ongoing monitoring to ensure they continue to meet their security obligations and other potential cybersecurity threats.
Third party service providers processing sensitive client data are contractually required to meet applicable legal and regulatory obligations to protect sensitive data against cyber security threats and unauthorized access to the sensitive data.
This process is led by the Operational Risk Management team and includes participation of dedicated information security resources. Risk assessments are performed using Service Organization Controls (“SOC”) reports and other tools.
Before engaging third-party service providers, we perform due diligence in order to identify and evaluate their cyber risks. This process is led by the Operational Risk Management team and includes participation of dedicated information security resources. Risk assessments are performed using Service Organization Controls (“SOC”) reports and other tools.
Additionally, we conduct vulnerability scans, and contract with third-party vendors to perform penetration tests against the Company’s network. The Company also engages expert cyber consultants, as necessary and appropriate. Before engaging third-party service providers, we perform due diligence in order to identify and evaluate their cyber risks.
The Company evaluates potential cyber risks, as appropriate, in its regular risk assessments. Additionally, we conduct vulnerability scans, and contract with third-party vendors to perform penetration tests against the Company’s network. The Company also engages expert cyber consultants, as necessary and appropriate. At Origin, we expect each employee to be responsible for the security and confidentiality of client information.
Removed
Assessing, identifying and managing cybersecurity related risks are integrated into our overall enterprise risk management process. Cybersecurity Risk Management and Strategy At Origin, we expect each employee to be responsible for the security and confidentiality of client information. We communicate this responsibility to employees upon hiring, and regularly throughout their employment.
Added
After contract executions, third-party service providers undergo ongoing monitoring to ensure they continue to maintain internal controls and protocols designed to manage cybersecurity risk to systems, assets, data, and capabilities.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeAt December 31, 2023, Origin Bank owned its main office building and 31 of its banking centers, as well as a controlling interest in its operations center. The remaining facilities were occupied under lease agreements, the terms of which range from month to month to 30 years.
Biggest changeWe expect to close six of these banking centers at the end of February 2025, four in the Dallas-Fort Worth market, and one each in the Louisiana and Mississippi markets. At December 31, 2024, Origin Bank owned its main office building and 30 of its banking centers, as well as a controlling interest in its operations center.
Item 2. Properties At December 31, 2023, our executive offices and those of Origin Bank were located at 500 South Service Road East, Ruston, Louisiana 71270 and we operated through over 60 locations in Texas, Louisiana and Mississippi, including loan production offices.
Item 2. Properties At December 31, 2024, our executive offices and those of Origin Bank were located at 500 South Service Road East, Ruston, Louisiana 71270 and we operated through over 60 locations in Texas, Louisiana, Mississippi, South Alabama, and the Florida Panhandle, including loan production offices.
At December 31, 2023, we had 18 banking centers in North Louisiana, 16 banking centers in the Dallas-Fort Worth metroplex area, nine banking centers in East Texas, ten banking centers in the Houston metroplex, and six banking centers in the Ridgeland, Mississippi area.
At December 31, 2024, we had 18 banking centers in North Louisiana, 15 banking centers in the Dallas-Fort Worth metroplex area, nine banking centers in East Texas, nine banking centers in the Houston metroplex, seven banking centers in the Ridgeland, Mississippi area, and one banking center each in South Alabama and the Florida Panhandle.
We believe that our banking and other offices are in good condition and are suitable and adequate to our needs. At December 31, 2023, our insurance holdings operated through 12 leased offices primarily located in Louisiana.
The remaining facilities were occupied under lease agreements, the terms of which range from month to month to 29 years. We believe that our banking and other offices are in good condition and are suitable and adequate to our needs. At December 31, 2024, our insurance holdings operated through 12 leased offices primarily located in Louisiana.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed3 unchanged
Biggest changeMine Safety Disclosures Not applicable. 47 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 49 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 47 PART II 48 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 48 Item 6. [Reserved] 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 50 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 75 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 49 PART II 50 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 50 Item 6. [Reserved] 51 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 52 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 75 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−1 removed3 unchanged
Biggest changeAfter careful consideration of industry, average asset size, market capitalization, constituents within the indices, and overall comparability to our compensation peer group, we have determined the most comparable index is represented by the Nasdaq OMX ABA Community Bank TR Index.
Biggest changeAfter careful consideration of industry, average asset size, market capitalization, constituents within the indices, and overall comparability to our compensation peer group, we have determined the most comparable index is represented by the Nasdaq OMX ABA Community Bank TR Index. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Origin Bancorp, Inc. $ 100.00 $ 74.55 $ 116.63 $ 101.12 $ 99.86 $ 95.23 Nasdaq Composite Index 100.00 143.64 174.36 116.65 167.30 215.22 Nasdaq OMX ABA Community Bank TR Index 100.00 89.64 121.03 111.12 108.99 125.60 Stock Repurchases In July 2022, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company may, from time to time, purchase up to $50 million of its outstanding common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol "OBK". Our common stock began trading on the Nasdaq Global Select Market on May 9, 2018. Prior to that date, there was no public trading market for our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange under the symbol “OBK”. Our common stock began trading on the Nasdaq Global Select Market on May 9, 2018. Prior to that date, there was no public trading market for our common stock.
The stock repurchase program is intended to expire in three years but may be terminated or amended by the Board of Directors at any time. The stock repurchase program does not obligate the Company to purchase any shares at any time. At December 31, 2023, there remained $50.0 million of capacity under the stock repurchase program.
The stock repurchase program is intended to expire in three years but may be terminated or amended by the Board of Directors at any time. The stock repurchase program does not obligate the Company to purchase any shares at any time. At December 31, 2024, there remained $50.0 million of capacity under the stock repurchase program.
The primary source for dividends paid to stockholders are dividends or capital distributions paid to the Company from the Bank. There are regulatory restrictions on the ability of the Bank to pay dividends. Therefore, there can be no assurance that we will pay any dividends to holders of our stock or the amount of any such dividends. See "Item 1.
The primary source for dividends paid to stockholders are dividends or capital distributions paid to the Company from the Bank. There are regulatory restrictions on the ability of the Bank to pay dividends. Therefore, there can be no assurance that we will pay any dividends to holders of our stock or the amount of any such dividends. See “Item 1.
Business - Regulation and Supervision" above and see Note 17 — Capital and Regulatory Matters contained in Part II, Item 8 of this report. Equity Compensation Plans See "Item 12.
Business - Regulation and Supervision” above and see Note 17 — Capital and Regulatory Matters contained in Part II, Item 8 of this report. Equity Compensation Plans See “Item 12.
At February 15, 2024, there were approximately 7,247 holders of record of our common stock as reported by our transfer agent. We intend to pay quarterly cash dividends on our common stock, subject to approval by our board of directors. Although we expect to pay dividends according to our dividend policy, we may elect not to pay dividends.
At February 15, 2025, there were approximately 9,389 holders of record of our common stock as reported by our transfer agent. We intend to pay quarterly cash dividends on our common stock, subject to approval by our board of directors. Although we expect to pay dividends according to our dividend policy, we may elect not to pay dividends.
There were no stock repurchases during the year ended December 31, 2023.
There were no stock repurchases during the year ended December 31, 2024.
Our stock was previously traded on Nasdaq under the symbol "OBNK", and is currently listed on the New York Stock Exchange under the symbol “OBK”. The following reflects index values as of close of trading, assumes $100.00 invested on May 9, 2018, in our common stock, and the Indices and assumes the reinvestment of dividends, if any.
Our stock was previously traded on Nasdaq under the symbol “OBNK” and is currently listed on the New York Stock Exchange under the symbol “OBK”. The following reflects index values as of close of trading, assumes $100.00 invested on December 31, 2019, in our common stock, and the Indices and assumes the reinvestment of dividends, if any.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" 48 Table of Contents Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock to the cumulative total stockholder return for the Nasdaq Composite Index and the Nasdaq OMX ABA Community Bank TR index (collectively the "Indices") for the period beginning on May 9, 2018, the first day of trading of our common stock, through December 31, 2023.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”. 50 Table of Contents Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock to the cumulative total stockholder return for the Nasdaq Composite Index and the Nasdaq OMX ABA Community Bank TR index (collectively the “Indices”) for the period beginning on December 31, 2019, through December 31, 2024.
Removed
May 9, 2018 Jun 30, 2018 Dec 31, 2018 Jun 30, 2019 Dec 31, 2019 Jun 30, 2020 Dec 31, 2020 Jun 30, 2021 Dec 31, 2021 Jun 30, 2022 Dec 31, 2022 Jun 30, 2023 Dec 31, 2023 Origin Bancorp, Inc. $ 100.00 $ 120.51 $ 100.48 $ 97.49 $ 112.41 $ 65.87 $ 83.80 $ 128.80 $ 131.00 $ 119.25 $ 113.57 $ 91.54 $ 112.16 Nasdaq Composite Index 100.00 102.32 90.40 109.08 122.24 137.04 175.34 197.60 213.15 150.26 142.60 187.85 204.52 Nasdaq OMX ABA Community Bank TR Index 100.00 99.32 79.43 89.43 98.17 68.32 88.00 109.88 118.81 101.64 109.08 83.20 106.99 Stock Repurchases In July 2022, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company may, from time to time, purchase up to $50 million of its outstanding common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

110 edited+43 added−61 removed72 unchanged
Biggest changeYears Ended December 31, 2023 2022 2021 (Dollars in thousands) Assets Average Balance (1) Income/Expense Yield/Rate Average Balance (1) Income/Expense Yield/Rate Average Balance (1) Income/Expense Yield/Rate Commercial real estate $ 2,404,530 $ 135,117 5.62 % $ 1,951,246 $ 88,175 4.52 % $ 1,501,890 $ 61,804 4.12 % Construction/land/land development 1,015,178 69,630 6.86 708,758 36,352 5.13 528,618 21,914 4.15 Residential real estate 1,629,589 81,964 5.03 1,143,190 49,635 4.34 916,039 37,045 4.04 Commercial and industrial 2,054,081 155,842 7.59 1,675,719 90,499 5.40 1,627,077 67,064 4.12 Mortgage warehouse lines of credit 314,079 21,476 6.84 420,639 18,732 4.45 753,588 27,470 3.65 Consumer 24,627 1,918 7.79 20,913 1,444 6.91 16,764 972 5.80 LHFI 7,442,084 465,947 6.26 5,920,465 284,837 4.81 5,343,976 216,269 4.05 Loans held for sale 18,055 868 4.81 32,272 1,313 4.07 68,917 2,512 3.65 Loans receivable 7,460,139 466,815 6.26 5,952,737 286,150 4.81 5,412,893 218,781 4.04 Investment securities-taxable 1,295,871 31,682 2.44 1,497,226 27,795 1.86 899,532 14,555 1.62 Investment securities-non-taxable 214,232 5,098 2.38 270,701 7,172 2.65 280,157 6,337 2.26 Non-marketable equity securities held in other financial institutions 67,956 3,408 5.01 58,441 1,802 3.08 48,970 1,181 2.41 Interest-bearing deposits in banks 318,559 16,388 5.14 349,484 3,685 1.05 418,034 802 0.19 Total interest-earning assets 9,356,757 523,391 5.59 8,128,589 326,604 4.02 7,059,586 241,656 3.42 Noninterest-earning assets (2) 584,263 557,642 411,341 Total assets $ 9,941,020 $ 8,686,231 $ 7,470,927 Liabilities and Stockholders’ Equity Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 4,725,929 $ 144,324 3.05 % $ 4,066,981 $ 29,025 0.71 % $ 3,640,713 $ 8,842 0.24 % Time deposits 1,398,734 52,133 3.73 616,197 4,484 0.73 607,742 4,576 0.75 Total interest-bearing deposits 6,124,663 196,457 3.21 4,683,178 33,509 0.72 4,248,455 13,418 0.32 FHLB advances & other borrowings 327,792 17,258 5.26 444,426 9,411 2.12 337,076 4,654 1.38 Subordinated indebtedness 198,856 10,119 5.09 176,028 8,406 4.78 157,304 7,332 4.66 Total interest-bearing liabilities 6,651,311 223,834 3.37 5,303,632 51,326 0.97 4,742,835 25,404 0.54 Noninterest-bearing liabilities Noninterest-bearing deposits 2,147,019 2,422,132 1,905,045 Other liabilities (2) 142,786 148,984 135,399 Total liabilities 8,941,116 7,874,748 6,783,279 Stockholders’ Equity 999,904 811,483 687,648 Total liabilities and stockholders’ equity $ 9,941,020 $ 8,686,231 $ 7,470,927 Net interest spread 2.22 % 3.05 % 2.88 % Net interest income and margin $ 299,557 3.20 $ 275,278 3.39 $ 216,252 3.06 Net interest income and margin - (tax equivalent) (3) $ 302,132 3.23 $ 278,403 3.42 $ 219,155 3.10 ____________________________ (1) Nonaccrual loans are included in their respective loan category for the purpose of calculating the yield earned.
Biggest changeYears Ended December 31, 2024 2023 2022 (Dollars in thousands) Assets Average Balance (1) Income/Expense Yield/Rate Average Balance (1) Income/Expense Yield/Rate Average Balance (1) Income/Expense Yield/Rate Commercial real estate $ 2,485,800 $ 146,507 5.89 % $ 2,404,530 $ 135,117 5.62 % $ 1,951,246 $ 88,175 4.52 % Construction/land/land development 1,035,871 73,910 7.14 1,015,178 69,630 6.86 708,758 36,352 5.13 Residential real estate 1,799,963 98,732 5.49 1,629,589 81,964 5.03 1,143,190 49,635 4.34 Commercial and industrial 2,087,361 163,868 7.85 2,054,081 155,842 7.59 1,675,719 90,499 5.40 Mortgage warehouse lines of credit 420,665 31,587 7.51 314,079 21,476 6.84 420,639 18,732 4.45 Consumer 22,962 1,819 7.92 24,627 1,918 7.79 20,913 1,444 6.91 LHFI 7,852,622 516,423 6.58 7,442,084 465,947 6.26 5,920,465 284,837 4.81 Loans held for sale 13,306 858 6.45 18,055 868 4.81 32,272 1,313 4.07 Loans receivable 7,865,928 517,281 6.58 7,460,139 466,815 6.26 5,952,737 286,150 4.81 Investment securities-taxable 1,045,520 26,642 2.55 1,295,871 31,682 2.44 1,497,226 27,795 1.86 Investment securities-non-taxable 146,815 3,672 2.50 214,232 5,098 2.38 270,701 7,172 2.65 Non-marketable equity securities held in other financial institutions 62,579 2,417 3.86 67,956 3,408 5.01 58,441 1,802 3.08 Interest-earning deposits in banks 279,945 14,573 5.21 318,559 16,388 5.14 349,484 3,685 1.05 Total interest-earning assets 9,400,787 564,585 6.01 9,356,757 523,391 5.59 8,128,589 326,604 4.02 Noninterest-earning assets 557,803 584,263 557,642 Total assets $ 9,958,590 $ 9,941,020 $ 8,686,231 Liabilities and Stockholders’ Equity Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 5,164,991 $ 191,620 3.71 % $ 4,725,929 $ 144,324 3.05 % $ 4,066,981 $ 29,025 0.71 % Time deposits 1,444,954 63,253 4.38 1,398,734 52,133 3.73 616,197 4,484 0.73 Total interest-bearing deposits 6,609,945 254,873 3.86 6,124,663 196,457 3.21 4,683,178 33,509 0.72 FHLB advances & other borrowings 34,203 1,602 4.68 327,792 17,258 5.26 444,426 9,411 2.12 Subordinated indebtedness 161,232 7,744 4.80 198,856 10,119 5.09 176,028 8,406 4.78 Total interest-bearing liabilities 6,805,380 264,219 3.88 6,651,311 223,834 3.37 5,303,632 51,326 0.97 Noninterest-bearing liabilities Noninterest-bearing deposits 1,887,884 2,147,019 2,422,132 Other liabilities 159,676 142,786 148,984 Total liabilities 8,852,940 8,941,116 7,874,748 Stockholders’ Equity 1,105,650 999,904 811,483 Total liabilities and stockholders’ equity $ 9,958,590 $ 9,941,020 $ 8,686,231 Net interest spread 2.13 % 2.22 % 3.05 % Net interest income and margin $ 300,366 3.20 $ 299,557 3.20 $ 275,278 3.39 Net interest income and margin - (tax equivalent) (2) $ 302,405 3.22 $ 302,132 3.23 $ 278,403 3.42 ____________________________ (1) Nonaccrual loans are included in their respective loan category for the purpose of calculating the yield earned.
Typically, higher interest rates and sustained inflation will cause customers to move liquid asset balances into higher interest-earning vehicles such as money market funds.
Typically, higher market interest rates and sustained inflation will cause customers to move liquid asset balances into higher interest-earning vehicles such as money market funds.
Expected losses are calculated using relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We evaluate loans held for investment ("LHFI") on a pool basis with pools of loans characterized by loan type, collateral, industry, internal credit risk rating and FICO score.
Expected losses are calculated using relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We evaluate loans held for investment (“LHFI”) on a pool basis with pools of loans characterized by loan type, collateral, industry, internal credit risk rating and FICO score.
Such loans can involve high principal loan amounts, and the repayment of these loans is dependent, in large part, on a borrower’s ongoing business operations or on income generated from the properties that are leased to third parties. The table below sets forth the CRE loan portfolio, by portfolio industry sector and collateral location as of December 31, 2023.
Such loans can involve high principal loan amounts, and the repayment of these loans is dependent, in large part, on a borrower’s ongoing business operations or on income generated from the properties that are leased to third parties. The table below sets forth the CRE loan portfolio, by portfolio industry sector and collateral location as of December 31, 2024.
The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions.
The Federal Reserve Board (“FRB”) sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions.
This adjustment also includes income tax credits received on Qualified School Construction Bonds and income from tax-exempt investments, and tax credits were computed using a federal income tax rate of 21%. 54 Table of Contents Rate/Volume Analysis The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
This adjustment also includes income tax credits received on Qualified School Construction Bonds and income from tax-exempt investments, and tax credits were computed using a federal income tax rate of 21%. 56 Table of Contents Rate/Volume Analysis The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
Loans classified as loss are charged-off and we have low expectations for the recovery of any payments in respect to loans rated as loss. Information regarding the internal risk ratings of our loans at December 31, 2023, is included in Note 4 — Loans to our consolidated financial statements contained in Part II, Item 8 of this report.
Loans classified as loss are charged-off and we have low expectations for the recovery of any payments in respect to loans rated as loss. Information regarding the internal risk ratings of our loans at December 31, 2024, is included in Note 4 — Loans to our consolidated financial statements contained in Part II, Item 8 of this report.
Subsequent changes to the ALCL are recorded through the provision for credit losses. 64 Table of Contents As a general rule, when it becomes evident that the full principal and accrued interest of a loan may not be collected, or at 90 days past due, we will reflect that loan as nonperforming.
Subsequent changes to the ALCL are recorded through the provision for credit losses. 65 Table of Contents As a general rule, when it becomes evident that the full principal and accrued interest of a loan may not be collected, or at 90 days past due, we will reflect that loan as nonperforming.
All of our mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities. Other than securities issued by government agencies or government sponsored enterprises, we did not own securities of any one issuer for which aggregate cost exceeded 10.0% of consolidated stockholders’ equity at December 31, 2023 or 2022.
All of our mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities. Other than securities issued by government agencies or government sponsored enterprises, we did not own securities of any one issuer for which aggregate cost exceeded 10.0% of our consolidated stockholders’ equity at December 31, 2024 or 2023.
At December 31, 2023 and 2022, we and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was classified as “well capitalized” for purposes of the prompt corrective action regulations of the Federal Reserve. As we deploy capital and continue to grow operations, regulatory capital levels may decrease depending on the level of earnings.
At December 31, 2024 and 2023, we and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was classified as “well capitalized” for purposes of the prompt corrective action regulations of the Federal Reserve. As we deploy capital and continue to grow operations, regulatory capital levels may decrease depending on the level of earnings.
The stock repurchase program is intended to expire in three years but may be terminated or amended by the Board of Directors at any time. The stock repurchase program does not obligate the Company to purchase any shares at any time. There were no stock repurchases during the year ended December 31, 2023 or 2022.
The stock repurchase program is intended to expire in three years but may be terminated or amended by the Board of Directors at any time. The stock repurchase program does not obligate the Company to purchase any shares at any time. There were no stock repurchases during the year ended December 31, 2024 or 2023.
This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Credit losses are charged against the ALCL when management believes the loss is confirmed. 50 Table of Contents Loan Acquisition Accounting.
This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Credit losses are charged against the ALCL when management believes the loss is confirmed. 52 Table of Contents Loan Acquisition Accounting.
We also had unsecured federal funds lines of credit available to us, with no amounts outstanding at either December 31, 2023 or 2022. These lines of credit primarily provide short-term liquidity and in order to ensure availability of these funds, we test these lines of credit at least annually.
We also had unsecured federal funds lines of credit available to us, with no amounts outstanding at either December 31, 2024 or 2023. These lines of credit primarily provide short-term liquidity and in order to ensure availability of these funds, we test these lines of credit at least annually.
We evaluate LHFI on a pool basis with pools of loans characterized by loan type, collateral, industry, internal credit risk rating and FICO score. We applied a probability of default, loss given default loss methodology to the loan pools at December 31, 2023.
We evaluate LHFI on a pool basis with pools of loans characterized by loan type, collateral, industry, internal credit risk rating and FICO score. We applied a probability of default, loss given default loss methodology to the loan pools at December 31, 2024.
Acquisition Accounting and Acquired Loans . We account for our mergers/acquisitions under Financial Accounting Standards Board ("FASB") ASC Topic 805, Business Combinations , which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value.
Acquisition Accounting and Acquired Loans . We account for our mergers/acquisitions under Financial Accounting Standards Board (“FASB”) ASC Topic 805, Business Combinations , which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value.
These commitments are discussed in more detail in Note 18 — Commitments and Contingencies to our consolidated financial statements contained in Part II, Item 8 of this report. 73 Table of Contents Stockholders’ Equity Stockholders’ equity provides a source of permanent funding, allows for future growth and provides a degree of protection to withstand unforeseen adverse developments.
These commitments are discussed in more detail in Note 18 — Commitments and Contingencies to our consolidated financial statements contained in Part II, Item 8 of this report. Stockholders’ Equity Stockholders’ equity provides a source of permanent funding, allows for future growth and provides a degree of protection to withstand unforeseen adverse developments.
Our available for sale portfolio totaled $1.25 billion at December 31, 2023, and represented 98.6% of our total security portfolio and is comprised of 47.8% mortgage-backed, 22.5% municipal, 6.4% treasury/agency, 13.2% collateralized mortgage obligations and 10.1% corporate/asset-backed securities.
Our available for sale portfolio totaled $1.25 billion at December 31, 2023, which represented 98.6% of our total security portfolio, and was comprised of 47.8% mortgage-backed, 22.5% municipal, 6.4% treasury/agency, 13.2% collateralized mortgage obligations and 10.1% corporate/asset-backed securities.
The following table presents our regulatory capital ratios, as well as those of the Bank, at the dates indicated: (Dollars in thousands) December 31, 2023 December 31, 2022 Origin Bancorp, Inc.
The following table presents our regulatory capital ratios, as well as those of the Bank, at the dates indicated: (Dollars in thousands) December 31, 2024 December 31, 2023 Origin Bancorp, Inc.
There was no impact to our financial condition or result of operations as a result of this tax. Regulatory Capital Requirements Together with the Bank, we are subject to various regulatory capital requirements administered by federal banking agencies.
There was no impact to our financial condition or result of operations as a result of this tax. 74 Table of Contents Regulatory Capital Requirements Together with the Bank, we are subject to various regulatory capital requirements administered by federal banking agencies.
For discussion on results of operations and financial condition pertaining to 2022 and 2021 and year-over-year comparisons between 2022 and 2021, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 22, 2023.
For discussion on results of operations and financial condition pertaining to 2023 and 2022 and year-over-year comparisons between 2023 and 2022, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.
Additionally, we do not hold any Fannie Mae or Freddie Mac preferred stock, collateralized debt obligations, structured investment vehicles or second lien elements in the investment portfolio, nor does the investment portfolio contain any securities that are directly backed by subprime or Alt-A mortgages. 68 Table of Contents Securities Carried at Fair Value through Income At December 31, 2023 and 2022, we held one fixed rate community investment bond of $6.8 million and $6.4 million, respectively.
Additionally, we do not hold any Fannie Mae or Freddie Mac preferred stock, collateralized debt obligations, structured investment vehicles or second lien elements in the investment portfolio, nor does the investment portfolio contain any securities that are directly backed by subprime or Alt-A mortgages. 69 Table of Contents Securities Carried at Fair Value through Income At December 31, 2024 and 2023, we held one fixed rate community investment bond of $6.5 million and $6.8 million, respectively.
The securities portfolio had a weighted average effective duration of 4.28 years at December 31, 2023, compared to 4.24 years at December 31, 2022. For additional information regarding our securities portfolio, please see Note 3 — Securities to our consolidated financial statements contained in Part II, Item 8 of this report.
The securities portfolio had a weighted average effective duration of 4.46 years at December 31, 2024, compared to 4.28 years at December 31, 2023. For additional information regarding our securities portfolio, please see Note 3 — Securities to our consolidated financial statements contained in Part II, Item 8 of this report.
Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances. Additionally, we had the ability to borrow at the discount window of the FRB using our commercial and industrial loans as collateral. There were no borrowings against this line at December 31, 2023.
Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances. Additionally, we had the ability to borrow at the Federal Reserve discount window using our commercial and industrial loans as collateral. There were no borrowings against this line at December 31, 2024.
The increase in the average cost of our deposits was primarily the result of the rapidly rising interest rate environment experienced since March 17, 2022, when the Federal Reserve Board started a series of eleven Federal Funds target range rate increases cumulating in a 525 basis point increase to the current target range of 5.25% to 5.50%.
The increase in the average cost of our deposits was primarily the result of the rapidly rising interest rate environment experienced since March 2022, when the FRB started a series of eleven federal funds target range rate increases cumulating in a 525-basis point increase to a target range of 5.25% to 5.50%.
Year Ended December 31, 2022 (Dollars in thousands) Interest-earning assets Increase (Decrease) due to Change in Loans: Volume Yield/Rate Total Change Commercial real estate $ 20,483 $ 26,459 $ 46,942 Construction/land/land development 15,716 17,562 33,278 Residential real estate 21,118 11,211 32,329 Commercial and industrial 20,434 44,909 65,343 Mortgage warehouse lines of credit (4,745) 7,489 2,744 Consumer 256 218 474 Loans held for sale (578) 133 (445) Loans receivable 72,684 107,981 180,665 Investment securities-taxable (3,738) 7,625 3,887 Investment securities-non-taxable (1,496) (578) (2,074) Non-marketable equity securities held in other financial institutions 293 1,313 1,606 Interest-bearing deposits in banks (326) 13,029 12,703 Total interest-earning assets 67,417 129,370 196,787 Interest-bearing liabilities Savings and interest-bearing transaction accounts 4,703 110,596 115,299 Time deposits 5,694 41,955 47,649 FHLB advances & other borrowings (2,470) 10,317 7,847 Subordinated indebtedness 1,090 623 1,713 Total interest-bearing liabilities 9,017 163,491 172,508 Net interest income $ 58,400 $ (34,121) $ 24,279 55 Table of Contents Year Ended December 31, 2022 vs.
Year Ended December 31, 2022 (Dollars in thousands) Interest-earning assets Increase (Decrease) due to Change in Loans: Volume Yield/Rate Total Change Commercial real estate $ 20,483 $ 26,459 $ 46,942 Construction/land/land development 15,716 17,562 33,278 Residential real estate 21,118 11,211 32,329 Commercial and industrial 20,434 44,909 65,343 Mortgage warehouse lines of credit (4,745) 7,489 2,744 Consumer 256 218 474 Loans held for sale (578) 133 (445) Loans receivable 72,684 107,981 180,665 Investment securities-taxable (3,738) 7,625 3,887 Investment securities-non-taxable (1,496) (578) (2,074) Non-marketable equity securities held in other financial institutions 293 1,313 1,606 Interest-earning deposits in banks (326) 13,029 12,703 Total interest-earning assets 67,417 129,370 196,787 Interest-bearing liabilities Savings and interest-bearing transaction accounts 4,703 110,596 115,299 Time deposits 5,694 41,955 47,649 FHLB advances & other borrowings (2,470) 10,317 7,847 Subordinated indebtedness 1,090 623 1,713 Total interest-bearing liabilities 9,017 163,491 172,508 Net interest income $ 58,400 $ (34,121) $ 24,279 Provision for Credit Losses We recorded a provision expense of $7.4 million for the year ended December 31, 2024, a $9.3 million decrease from $16.8 million for the year ended December 31, 2023, primarily driven by a $8.8 million decrease in the provision for loan credit losses.
Interest income earned on LHFI during the year ended December 31, 2023, increased in all loan categories when compared to the year ended December 31, 2022.
Interest income earned on LHFI during the year ended December 31, 2024, increased in substantially all loan categories when compared to the year ended December 31, 2023.
An allowance for credit losses is determined using the same methodology as other individually evaluated loans. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. We held approximately $34.8 million of unpaid principal balance PCD loans at December 31, 2023, and $48.1 million of unpaid principal balance PCD loans at December 31, 2022.
An allowance for credit losses is determined using the same methodology as other individually evaluated loans. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. We held approximately $12.3 million of unpaid principal balance PCD loans at December 31, 2024, and $34.8 million of unpaid principal balance PCD loans at December 31, 2023.
The table below shows the liquidity measures for the Company at the dates indicated: (Dollars in thousands) December 31, 2023 December 31, 2022 Available cash balances at the holding company (unconsolidated) $ 87,698 $ 99,810 Cash and liquid securities as a percentage of total assets 10.9 % 12.1 % There are regulatory restrictions on the ability of the Bank to pay dividends under federal and state laws, regulations and policies.
The table below shows the liquidity measures for the Company at the dates indicated: (Dollars in thousands) December 31, 2024 December 31, 2023 Available cash balances at the holding company (unconsolidated) $ 47,876 $ 87,698 Cash and liquid securities as a percentage of total assets 10.6 % 10.9 % There are regulatory restrictions on the ability of the Bank to pay dividends under federal and state laws, regulations and policies.
Factors that could cause such differences are discussed in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors." We assume no obligation to update any of these forward-looking statements. Discussion in this Form 10-K includes results of operations and financial condition for 2023 and 2022 and year-over-year comparisons between 2023 and 2022.
Factors that could cause such differences are discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors.” We assume no obligation to update any of these forward-looking statements. Discussion in this Form 10-K includes results of operations and financial condition for 2024 and 2023 and year-over-year comparisons between 2024 and 2023.
We may also use the discount window at the FRB as a source of short-term funding. Core deposits, which are total deposits excluding time deposits greater than $250,000 and brokered deposits, are a major source of funds used to meet cash flow needs.
We may also use the Federal Reserve discount window as a source of short-term funding. 73 Table of Contents Core deposits, which are total deposits excluding time deposits greater than $250,000 and brokered deposits, are a major source of funds used to meet cash flow needs.
For additional information regarding our holding company line of credit, subordinated indebtedness, including the junior subordinated debentures underlying the issuance of trust preferred securities, please see Note 11 — Borrowings in the notes to our consolidated financial statements contained in Part II, Item 8 of this report.
For information regarding our junior subordinated debentures underlying the issuance of trust preferred securities, please see Note 11 — Borrowings in the notes to our consolidated financial statements contained in Part II, Item 8 of this report.
For further discussion of the valuation components and classification of investment securities, see Note 1 — Significant Accounting Policies to our consolidated financial statements contained in Part II, Item 8 of this report. Our securities portfolio totaled $1.27 billion at December 31, 2023, representing a decrease of $387.1 million, or 23.3%, from $1.66 billion at December 31, 2022.
For further discussion of the valuation components and classification of investment securities, see Note 1 — Significant Accounting Policies to our consolidated financial statements contained in Part II, Item 8 of this report. Our securities portfolio totaled $1.12 billion at December 31, 2024, representing a decrease of $151.9 million, or 11.9%, from $1.27 billion at December 31, 2023.
Net interest income is the difference between interest income on interest-earning assets, such as loans, securities and interest-bearing cash, and interest expense on interest-bearing liabilities, such as deposits and borrowings.
Net interest income is the difference between interest income on interest-earning assets, such as loans, securities and interest-bearing cash, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities. 51 Table of Contents Changes in market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as in the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and stockholders’ equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income.
Changes in market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as in the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and stockholders’ equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income.
The net amounts available under our borrowing capacity from the FHLB at December 31, 2023 and 2022, were $2.01 billion and $1.29 billion, respectively.
The net amounts available under our borrowing capacity from the FHLB at December 31, 2024 and 2023, were $2.15 billion and $2.01 billion, respectively.
The steep incline in the interest rate environment driven by the Federal Reserve Board’s Federal Funds rate setting policy, as outlined in the Results of Operations section above, has negatively impacted borrowers with variable or floating rate loans causing their cost of borrowings to increase significantly over the last eighteen months.
The steep incline in the interest rate environment over the last several years driven by the FRB’s federal funds rate setting policy, as outlined in the Results of Operations section above, has negatively impacted borrowers with variable or floating rate loans causing their cost of borrowings to increase significantly since mid-2022.
Income Tax Expense For the year ended December 31, 2023, we recognized income tax expense of $22.1 million, compared to $19.7 million for the year ended December 31, 2022. Our effective tax rate was 20.9% for the year ended December 31, 2023, compared to 18.4% for the year ended December 31, 2022.
Income Tax Expense For the year ended December 31, 2024, we recognized income tax expense of $20.8 million, compared to $22.1 million for the year ended December 31, 2023. Our effective tax rate was 21.4% for the year ended December 31, 2024, compared to 20.9% for the year ended December 31, 2023.
The average annualized rate paid on our interest-bearing deposits for the year ended December 31, 2023, was 3.21%, compared to 0.72% for the year ended December 31, 2022.
The average rate paid on our interest-bearing deposits for the year ended December 31, 2024, was 3.86%, compared to 3.21% for the year ended December 31, 2023.
Changes in stockholders’ equity is reflected below: (Dollars in thousands) Total Stockholders’ Equity Balance at January 1, 2023 $ 949,943 Net income 83,800 Other comprehensive income, net of tax 38,852 Dividends declared - common stock ($0.60 per share) (18,797) Other 9,107 Balance at December 31, 2023 $ 1,062,905 Stock Repurchases In July 2022, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company may, from time to time, purchase up to $50 million of its outstanding common stock.
Changes in stockholders’ equity is reflected below: (Dollars in thousands) Total Stockholders’ Equity Balance at January 1, 2024 $ 1,062,905 Net income 76,492 Other comprehensive income, net of tax 14,994 Dividends declared - common stock ($0.60 per share) (18,991) Other 9,845 Balance at December 31, 2024 $ 1,145,245 Stock Repurchases In July 2022, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company may, from time to time, purchase up to $50 million of its outstanding common stock.
At December 31, 2023, 77.1% of the loan portfolio held for investment was comprised of commercial and industrial loans, including mortgage warehouse lines of credit, commercial real estate and construction/land/land development loans, which were primarily originated within our legacy market areas of Texas, North Louisiana, and Mississippi, compared to 78.8% at December 31, 2022.
At December 31, 2024, 75.2% of the loan portfolio held for investment was comprised of commercial and industrial loans, including mortgage warehouse lines of credit, commercial real estate and construction/land/land development loans, which were primarily originated within our legacy market areas of Texas, North Louisiana, and Mississippi, compared to 77.1% at December 31, 2023. 61 Table of Contents The following table presents the ending balance of our loan portfolio held for investment at the dates indicated.
Some of the risk elements we consider include: • for commercial real estate loans, the debt service coverage ratio, operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral and the volatility of income, property value and future operating results typical of properties of that type; • for construction, land and land development loans, the perceived feasibility of the project, including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, experience and ability of the developer and loan to value ratio; • for residential mortgage loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral; and • for commercial and industrial loans, the debt service coverage ratio (income from the business in excess of operating expenses compared to loan repayment requirements), the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category and the value, nature and marketability of collateral.
Some of the risk elements we consider include: • for commercial real estate loans, the debt service coverage ratio, operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral and the volatility of income, property value and future operating results typical of properties of that type; • for construction, land and land development loans, the perceived feasibility of the project, including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, experience and ability of the developer and loan to value ratio; • for residential mortgage loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral; and • for commercial and industrial loans, the debt service coverage ratio (income from the business in excess of operating expenses compared to loan repayment requirements), the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category and the value, nature and marketability of collateral. • for mortgage warehouse loans, the borrower’s adherence to agency or investor underwriting guidelines, while the risk associated with the underlying consumer mortgage loan repayments, similar to other consumer loans, depends on the borrower’s financial stability and are more likely than commercial loans to be adversely affected by divorce, job loss, illness and other personal hardships.
Average noninterest-bearing deposits during the year ended December 31, 2023, were $2.15 billion, compared to $2.42 billion at December 31, 2022, a decrease of $275.1 million, or 11.4%, and represented 26.0% and 34.1% of average total deposits for the year ended December 31, 2023 and 2022, respectively.
Average noninterest-bearing deposits during the year ended December 31, 2024, were $1.89 billion, compared to $2.15 billion at December 31, 2023, a decrease of $259.1 million, or 12.1%, and represented 22.2% and 26.0% of average total deposits for the year ended December 31, 2024 and 2023, respectively.
Our available for sale portfolio totaled $1.64 billion at December 31, 2022, and represented 98.9% of our total security portfolio and was comprised of 40.5% mortgage-backed, 23.7% municipal, 15.1% treasury/agency, 11.3% collateralized mortgage obligations and 9.4% corporate/asset-backed securities.
Our available for sale portfolio totaled $1.10 billion at December 31, 2024, which represented 98.4% of our total security portfolio and is comprised of 53.0% mortgage-backed, 23.2% municipal, 1.3% treasury/agency, 15.4% collateralized mortgage obligations and 7.1% corporate/asset-backed securities.
The loss on sales of securities was due to the sale of available for sale investment securities with a book value of $260.8 million, which realized a loss on sale of $11.8 million during the second half of 2023. We used the proceeds from the sales to pay down FHLB advances and support loan growth in our markets.
During the second half of 2023, we sold available for sale investment securities with total book value of $260.8 million and realized total loss of $11.8 million, the proceeds of which were used to pay down FHLB advances and support loan operations.
The following table presents the allowance for credit loss by loan category: December 31, (Dollars in thousands) 2023 2022 Loans secured by real estate: Amount % (1) Amount % (1) Commercial real estate $ 19,625 31.9 % $ 19,772 32.6 % Construction/land/land development 9,990 14.0 7,776 13.3 Residential real estate 10,619 22.6 8,230 20.8 Commercial and industrial 55,330 26.9 50,148 28.9 Mortgage warehouse lines of credit 529 4.3 379 4.0 Consumer 775 0.3 856 0.4 Total $ 96,868 100.0 % $ 87,161 100.0 % ___________________________ (1) Represents the ratio of each loan type to total LHFI.
The following table presents the allowance for credit loss by loan category: December 31, (Dollars in thousands) 2024 2023 Loans secured by real estate: Amount % (1) Amount % (1) Commercial real estate $ 16,546 32.7 % $ 19,625 31.9 % Construction/land/land development 7,398 11.4 9,990 14.0 Residential real estate 12,454 24.5 10,619 22.6 Commercial and industrial 53,449 26.5 55,330 26.9 Mortgage warehouse lines of credit 501 4.6 529 4.3 Consumer 712 0.3 775 0.3 Total $ 91,060 100.0 % $ 96,868 100.0 % ___________________________ (1) Represents the ratio of each loan type to total LHFI.
(Dollars in thousands) Years Ended December 31, ALCL 2023 2022 Balance at beginning of period $ 87,161 $ 64,586 ALCL - BTH merger — 5,527 Provision for loan credit losses 17,514 21,613 Charge-offs: Commercial real estate 42 166 Residential real estate 27 91 Commercial and industrial 11,833 8,459 Consumer 147 43 Total charge-offs 12,049 8,759 Recoveries: Commercial real estate 140 40 Construction/land/land development 3 211 Residential real estate 17 102 Commercial and industrial 4,068 3,825 Consumer 14 16 Total recoveries 4,242 4,194 Net charge-offs 7,807 4,565 Balance at end of period $ 96,868 $ 87,161 Ratio of ALCL to: Nonperforming LHFI 321.66 % 876.87 % LHFI 1.26 1.23 Net charge-offs as a percentage of: Provision for loan credit losses 44.58 21.12 ALCL 8.06 5.24 Average LHFI 0.10 0.08 The ALCL to nonperforming LHFI decreased to 321.66% at December 31, 2023, compared to 876.87% at December 31, 2022, primarily driven by a $20.2 million increase in nonperforming LHFI at December 31, 2023.
(Dollars in thousands) Years Ended December 31, ALCL 2024 2023 Balance at beginning of year $ 96,868 $ 87,161 Provision for loan credit losses 8,680 17,514 Charge-offs: Commercial real estate 480 42 Residential real estate 11 27 Commercial and industrial 22,787 11,833 Consumer 362 147 Total charge-offs 23,640 12,049 Recoveries: Commercial real estate 530 140 Construction/land/land development — 3 Residential real estate 16 17 Commercial and industrial 8,583 4,068 Consumer 23 14 Total recoveries 9,152 4,242 Net charge-offs 14,488 7,807 Balance at end of year $ 91,060 $ 96,868 Ratio of ALCL to: Nonperforming LHFI 121.41 % 321.66 % LHFI 1.20 1.26 Net charge-offs as a percentage of: Provision for loan credit losses 166.91 44.58 ALCL 15.91 8.06 Average LHFI 0.18 0.10 The ALCL to nonperforming LHFI decreased to 121.41% at December 31, 2024, compared to 321.66% at December 31, 2023, primarily driven by a $44.9 million increase in nonperforming LHFI at December 31, 2024.
In February 2020, Origin Bank completed an offering of $70.0 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030 (the “4.25% Notes”) to certain investors in a transaction exempt from registration under Section 3(a)(2) of the Securities Act of 1933, as amended.
Primarily due to the declining Tier 2 capital contribution of the BTH Notes, the Company elected to redeem all but $1.1 million of the BTH Notes during the year ended December 31, 2024. 72 Table of Contents In February 2020, Origin Bank completed an offering of $70.0 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030 (the “4.25% Notes”) to certain investors in a transaction exempt from registration under Section 3(a)(2) of the Securities Act of 1933, as amended.
We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest earning assets and expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets.
We analyze our ability to maximize income generated from interest earning assets and expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets.
Additionally, at December 31, 2023 and 2022, we had the ability to borrow $1.42 billion and $1.23 billion from the discount window at the Federal Reserve Bank of Dallas ("FRB"), with $1.69 billion and $1.76 billion in commercial and industrial loans pledged as collateral, respectively.
Additionally, at December 31, 2024 and 2023, we had the ability to borrow $1.33 billion and $1.42 billion from the discount window at the Federal Reserve Bank of Dallas (“FRBD”), with $1.57 billion and $1.69 billion in commercial and industrial loans pledged as collateral, respectively. There were no borrowings against this line at both December 31, 2024 and 2023.
The 4.25% Notes initially bear interest at a fixed annual rate of 4.25%, payable semi-annually in arrears, to but excluding February 15, 2025.
The 4.50% Notes bear a fixed interest rate of 4.50%, payable semi-annually in arrears, to but excluding November 1, 2025.
We also consider potential interest rate risk caused by extended maturities of time deposits when setting the interest rates in periods of future economic uncertainty. 69 Table of Contents The following table reflects the classification of our average deposits and the average rate paid on each deposit category for the periods indicated: Years Ended December 31, 2023 2022 2021 (Dollars in thousands) Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Interest-bearing demand $ 1,788,423 $ 50,033 2.80 % $ 1,545,581 $ 11,007 0.71 % $ 1,396,805 $ 2,822 0.20 % Money market 2,646,447 91,685 3.46 2,233,390 17,501 0.78 2,011,827 5,863 0.29 Time deposits 928,694 27,892 3.00 611,195 4,476 0.73 607,742 4,576 0.75 Brokered time deposits 470,040 24,241 5.16 5,002 8 0.16 — — — Savings 291,059 2,606 0.90 288,010 517 0.18 232,081 157 0.07 Total interest-bearing 6,124,663 196,457 3.21 4,683,178 33,509 0.72 4,248,455 13,418 0.32 Noninterest-bearing demand 2,147,019 — 2,422,132 — 1,905,045 — Total average deposits $ 8,271,682 $ 196,457 2.38 $ 7,105,310 $ 33,509 0.47 $ 6,153,500 $ 13,418 0.22 Our average deposit balance was $8.27 billion for the year ended December 31, 2023, an increase of $1.17 billion, or 16.4%, from $7.11 billion for the year ended December 31, 2022.
We also consider potential interest rate risk caused by extended maturities of time deposits when setting the interest rates in periods of future economic uncertainty. 70 Table of Contents The following table reflects the classification of our average deposits and the average rate paid on each deposit category for the periods indicated: Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Interest-bearing demand $ 1,863,361 $ 63,291 3.40 % $ 1,788,423 $ 50,033 2.80 % $ 1,545,581 $ 11,007 0.71 % Money market 2,942,691 119,533 4.06 2,646,447 91,685 3.46 2,233,390 17,501 0.78 Time deposits 1,004,934 39,634 3.94 928,694 27,892 3.00 611,195 4,476 0.73 Brokered deposits (1) 509,434 27,321 5.36 470,040 24,241 5.16 5,002 8 0.16 Savings 289,525 5,094 1.76 291,059 2,606 0.90 288,010 517 0.18 Total interest-bearing 6,609,945 254,873 3.86 6,124,663 196,457 3.21 4,683,178 33,509 0.72 Noninterest-bearing demand 1,887,884 — 2,147,019 — 2,422,132 — Total average deposits $ 8,497,829 $ 254,873 3.00 $ 8,271,682 $ 196,457 2.38 $ 7,105,310 $ 33,509 0.47 ______________________ (1) Average brokered deposits include average brokered time deposits and average brokered interest-bearing demand of $440.0 million and $69.4 million, respectively, for the year ended December 31, 2024.
During the year ended December 31, 2023, we observed multiple orderly transactions for identical equity securities indicating a price change had occurred and adjusted our basis upwards accordingly. Other noninterest income.
During the years ended December 31, 2024 and 2023, we observed multiple orderly transactions for this equity security indicating a price change had occurred and adjusted our basis upwards accordingly. Mortgage banking revenue.
Results of Operations At and for the Years Ended December 31, (Dollars in thousands, except per share amounts) 2023 2022 2021 Net income $ 83,800 $ 87,715 $ 108,546 Financial ratios: ROAA (1) 0.84 % 1.01 % 1.45 % ROAE (1) 8.38 10.81 15.79 Capital ratio: Book value per common share $ 34.30 $ 30.90 $ 30.75 ____________________________ (1) All average balances are calculated using average daily balances.
These items negatively impacted our diluted EPS of $2.45 by $0.29 for the year ended December 31, 2024. 53 Table of Contents Comparison of Results of Operations for the Years Ended December 31, 2024, 2023 and 2022 At and for the Years Ended December 31, (Dollars in thousands, except per share amounts) 2024 2023 2022 Net income $ 76,492 $ 83,800 $ 87,715 Financial ratios: ROAA (1) 0.77 % 0.84 % 1.01 % ROAE (1) 6.92 8.38 10.81 Capital ratio: Book value per common share $ 36.71 $ 34.30 $ 30.90 ____________________________ (1) All average balances are calculated using average daily balances.
December 31, (Dollars in thousands) 2023 2022 Available for sale: Carrying Amount % of Total Carrying Amount % of Total State and municipal securities $ 282,126 22.5 % $ 389,477 23.7 % Corporate bonds 83,635 6.7 82,258 5.0 U.S. government and agency securities 79,640 6.4 248,420 15.1 Commercial mortgage-backed securities 93,396 7.5 91,943 5.6 Residential mortgage-backed securities 506,502 40.3 572,303 34.9 Commercial collateralized mortgage obligations 35,183 2.8 38,813 2.4 Residential collateralized mortgage obligations 130,144 10.4 146,370 8.9 Asset-backed securities 43,005 3.4 71,900 4.4 Total $ 1,253,631 100.0 % $ 1,641,484 100.0 % Held to maturity: State and municipal securities, net of allowance $ 11,615 $ 11,275 Securities carried at fair value through income: State and municipal securities $ 6,808 $ 6,368 67 Table of Contents The following table presents the fair value of securities available for sale and amortized cost of securities held to maturity and their corresponding yields at December 31, 2023.
December 31, (Dollars in thousands) 2024 2023 Available for sale: Carrying Amount % of Total Carrying Amount % of Total State and municipal securities $ 255,976 23.2 % $ 282,126 22.5 % Corporate bonds 78,236 7.1 83,635 6.7 U.S. treasury and government agency securities 13,805 1.3 79,640 6.4 Commercial mortgage-backed securities 44,284 4.0 93,396 7.5 Residential mortgage-backed securities 540,834 49.0 506,502 40.3 Commercial collateralized mortgage obligations 28,566 2.6 35,183 2.8 Residential collateralized mortgage obligations 140,827 12.8 130,144 10.4 Asset-backed securities — — 43,005 3.4 Total $ 1,102,528 100.0 % $ 1,253,631 100.0 % Held to maturity: State and municipal securities, net of allowance $ 11,095 $ 11,615 Securities carried at fair value through income: State and municipal securities $ 6,512 $ 6,808 68 Table of Contents The following table presents the fair value of securities available for sale and amortized cost of securities held to maturity and their corresponding yields at December 31, 2024.
We manage our interest expense on deposits through specific deposit product pricing that is based on competitive pricing, economic conditions and current and anticipated funding needs. We may use interest rates as a mechanism to attract or deter additional deposits based on our anticipated funding needs and liquidity position.
We may use interest rates as a mechanism to attract or deter additional deposits based on our anticipated funding needs and liquidity position.
There were no otherwise uninsured time deposits below the FDIC insurance limit at December 31, 2023. The estimated total amount of uninsured deposits at December 31, 2023 and 2022, was $3.58 billion and $4.19 billion, respectively. (Dollars in thousands) Remaining maturity: U.S.
The estimated total amount of uninsured deposits at December 31, 2024 and 2023, was $3.66 billion and $3.58 billion, respectively. (Dollars in thousands) Remaining maturity: U.S.
The increases were partially offset by an increase of $13.3 million in the loss on sales of securities, net, and a decrease of $3.4 million in mortgage banking revenue, respectively. Insurance commission and fee income.
The decrease was primarily due to a decrease of $4.9 million in the change in fair value of equity investments and a $3.2 million increase in loss on sales of securities, net, partially offset by increases of $3.2 million and $1.7 million in mortgage banking revenue and insurance commission and fee income, respectively. Change in fair value of equity investments.
Interest income earned on real estate loans and commercial and industrial loans contributed $112.5 million and $65.3 million, respectively, of the $181.1 million total increase in interest income earned on LHFI when compared to the year ended December 31, 2022.
Interest income earned on real estate-based loans, mortgage warehouse lines of credit and commercial and industrial loans contributed $32.4 million, $10.1 million and $8.0 million, respectively, of the $50.5 million total increase in interest income earned on LHFI when compared to the year ended December 31, 2023.
During the year ended December 31, 2023, and with the approval of the Board of Governors of the Federal Reserve System, the Company repurchased $5.0 million of the 4.50% notes in conjunction the Federal Deposit Insurance Corporation’s failed bank resolution process.
During the years ended December 31, 2024 and 2023, and with the approval of the Board of Governors of the Federal Reserve System, the Company repurchased $1.0 million and $5.0 million, respectively, of the 4.50% notes.
N/A = Not applicable. 57 Table of Contents Noninterest income for the year ended December 31, 2023, increased by $1.1 million, or 1.9%, to $58.3 million, compared to $57.3 million for the year ended December 31, 2022.
N/A = Not applicable. Noninterest income for the year ended December 31, 2024, decreased by $3.0 million, or 5.1%, to $55.4 million, compared to $58.3 million for the year ended December 31, 2023.
Increases in average balances and interest rates drove $57.3 million and $55.2 million, respectively, of the total increase in interest income earned on real estate loans, while increases in interest rates drove $44.9 million of the $65.3 million increase in interest income earned on commercial and industrial loans for the comparable periods.
Increases in interest rates drove $17.9 million, $5.5 million and $2.8 million of the increase in interest income earned on real estate-based loans, commercial and industrial loans, and mortgage warehouse lines of credit, and increases in average loan balances drove $14.6 million, $7.3 million and $2.5 million of the increase in interest income earned on real estate-based loans, mortgage warehouse lines of credit and commercial and industrial loans for the comparable periods, respectively.
From and including February 15, 2025, to but excluding the maturity date or early redemption date, the interest rate will equal the three-month LIBOR rate (provided that in the event the three-month LIBOR is less than zero, the three-month LIBOR will be deemed to be zero) plus 282 basis points, payable quarterly in arrears.
The 4.25% Notes bore interest at a fixed annual rate of 4.25%, payable semi-annually in arrears, to but excluding February 15, 2025. From and including February 15, 2025, to but excluding the maturity date or early redemption date, the interest rate would equal the three-month LIBOR rate plus 282 basis points, payable quarterly in arrears.
Management continually monitors, forecasts and tests our liquidity and non-core dependency ratios to ensure compliance with targets established by our Asset-Liability Management Committee and approved by our board of directors. 72 Table of Contents Management measures our liquidity position by giving consideration to both on-balance sheet and off-balance sheet sources of and demands for funds on a daily and weekly basis.
Management continually monitors, forecasts and tests our liquidity and non-core dependency ratios to ensure compliance with targets established by our Asset-Liability Management Committee and approved by our board of directors.
The decrease was primarily due to sales, maturities and calls, as well as normal principal paydowns, which was partially offset by decrease in unrealized losses during the year ended December 31, 2023.
The decrease was primarily due to sales, maturities and calls, as well as normal principal paydowns, which was partially offset by purchases and a decrease in unrealized losses during the year ended December 31, 2024. During the fourth quarter of 2024, we executed a bond portfolio optimization strategy aimed at enhancing long-term yields and improving overall portfolio performance.
In October 2020, the Company completed of an offering of $80.0 million in aggregate principal amount of 4.50% fixed-to-floating rate subordinated notes due 2030 (the “4.50% Notes”). The 4.50% Notes bear a fixed interest rate of 4.50%, payable semi-annually in arrears, to but excluding November 1, 2025.
Origin Bank elected to redeem the 4.25% Notes on February 15, 2025, as permitted under the terms of the 4.25% Notes. In October 2020, the Company completed of an offering of $80.0 million in aggregate principal amount of 4.50% fixed-to-floating rate subordinated notes due 2030 (the “4.50% Notes”).
The $2.3 million increase in other noninterest income was primarily due to a positive fair value adjustment of our municipal securities of $726,000 for the year ended December 31, 2023, compared to a negative fair value adjustment of $854,000 for the year ended December 31, 2022. 58 Table of Contents Noninterest Expense The following table presents the significant components of noninterest expense for the periods indicated: (Dollars in thousands) Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 Noninterest expense: 2023 2022 2021 $ Change % Change $ Change % Change Salaries and employee benefits $ 138,819 $ 118,971 $ 93,026 $ 19,848 16.7 % $ 25,945 27.9 % Occupancy and equipment, net 26,783 20,203 17,347 6,580 32.6 2,856 16.5 Data processing 11,590 10,456 9,117 1,134 10.8 1,339 14.7 Intangible asset amortization 9,628 5,488 844 4,140 75.4 4,644 N/M Office and operations 10,834 8,120 6,399 2,714 33.4 1,721 26.9 Professional services 5,931 3,813 3,644 2,118 55.5 169 4.6 Loan-related expenses 5,035 6,097 7,688 (1,062) (17.4) (1,591) (20.7) Advertising and marketing 5,986 4,431 3,438 1,555 35.1 993 28.9 Electronic banking 4,712 3,958 3,563 754 19.1 395 11.1 Franchise tax expense 3,334 3,582 2,538 (248) (6.9) 1,044 41.1 Regulatory assessments 6,456 3,547 2,904 2,909 82.0 643 22.1 Communications 1,527 1,246 1,574 281 22.6 (328) (20.8) Merger-related expense — 6,171 — (6,171) (100.0) 6,171 N/A Other expenses 4,581 4,336 4,697 245 5.7 (361) (7.7) Total noninterest expense $ 235,216 $ 200,419 $ 156,779 $ 34,797 17.4 $ 43,640 27.8 ____________________________ N/M = Not meaningful.
The increase in contingency income was mainly due to new commercial accounts combined with lower claims for catastrophic events experienced by our insurance agency counterparties during the year ended December 31, 2024, compared to the year ended December 31, 2023. 59 Table of Contents Noninterest Expense The following table presents the significant components of noninterest expense for the periods indicated: (Dollars in thousands) Years Ended December 31, 2024 vs. 2023 2023 vs. 2022 Noninterest expense: 2024 2023 2022 $ Change % Change $ Change % Change Salaries and employee benefits $ 148,823 $ 138,819 $ 118,971 $ 10,004 7.2 % $ 19,848 16.7 % Occupancy and equipment, net 27,865 26,783 20,203 1,082 4.0 6,580 32.6 Data processing 13,497 11,590 10,456 1,907 16.5 1,134 10.8 Office and operations 11,441 10,834 8,120 607 5.6 2,714 33.4 Intangible asset amortization 7,979 9,628 5,488 (1,649) (17.1) 4,140 75.4 Regulatory assessments 6,902 6,456 3,547 446 6.9 2,909 82.0 Advertising and marketing 6,150 5,986 4,431 164 2.7 1,555 35.1 Professional services 6,610 5,931 3,813 679 11.4 2,118 55.5 Loan-related expenses 3,164 5,035 6,097 (1,871) (37.2) (1,062) (17.4) Electronic banking 5,162 4,712 3,958 450 9.6 754 19.1 Franchise tax expense 2,897 3,334 3,582 (437) (13.1) (248) (6.9) Merger-related expense — — 6,171 — N/A (6,171) (100.0) Other expense 10,548 6,108 5,582 4,440 72.7 526 9.4 Total noninterest expense $ 251,038 $ 235,216 $ 200,419 $ 15,822 6.7 $ 34,797 17.4 ____________________________ N/A = Not applicable.
At December 31, 2023, total LHFI were $7.66 billion, an increase of $570.9 million, or 8.1%, compared to $7.09 billion at December 31, 2022. The increase was primarily driven by loan growth of $520.1 million in real estate loans.
At December 31, 2024, total LHFI were $7.57 billion, a decrease of $87.2 million, or 1.1%, compared to $7.66 billion at December 31, 2023. The decrease was primarily driven by a decline of $206.2 million in construction/land/land development loans, which was partially offset by an increase of $122.7 million in residential real estate loans.
(Dollars in thousands) Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 Noninterest income: 2023 2022 2021 $ Change % Change $ Change % Change Insurance commission and fee income $ 25,085 $ 22,869 $ 13,098 $ 2,216 9.7 % $ 9,771 74.6 % Service charges and fees 18,803 17,669 15,049 1,134 6.4 2,620 17.4 Mortgage banking revenue 3,356 6,722 12,927 (3,366) (50.1) (6,205) (48.0) Other fee income 3,871 3,530 2,879 341 9.7 651 22.6 Swap fee income 1,277 457 814 820 N/M (357) (43.9) (Loss) gain on sales of securities, net (11,635) 1,664 1,748 (13,299) N/M (84) (4.8) Limited partnership investment gain (loss) income 405 (199) 5,701 604 N/M (5,900) (103.5) Gain (loss) on sales and disposals of other assets, net 64 (175) (185) 239 N/M 10 (5.4) Change in fair value of equity investments 10,096 — — 10,096 N/A — N/A Other income 7,013 4,737 10,162 2,276 48.0 (5,425) (53.4) Total noninterest income $ 58,335 $ 57,274 $ 62,193 $ 1,061 1.9 $ (4,919) (7.9) ____________________________ N/M = Not meaningful.
(Dollars in thousands) Years Ended December 31, 2024 vs. 2023 2023 vs. 2022 Noninterest income: 2024 2023 2022 $ Change % Change $ Change % Change Insurance commission and fee income $ 26,759 $ 25,085 $ 22,869 $ 1,674 6.7 % $ 2,216 9.7 % Service charges and fees 19,015 18,803 17,669 212 1.1 1,134 6.4 Other fee income 8,917 8,089 7,279 828 10.2 810 11.1 Mortgage banking revenue 6,580 3,356 6,722 3,224 96.1 (3,366) (50.1) Swap fee income 323 1,277 457 (954) (74.7) 820 N/M (Loss) gain on sales of securities, net (14,799) (11,635) 1,664 (3,164) 27.2 (13,299) N/M Change in fair value of equity investments 5,188 10,096 — (4,908) (48.6) 10,096 N/A Other income 3,396 3,264 614 132 4.0 2,650 N/M Total noninterest income $ 55,379 $ 58,335 $ 57,274 $ (2,956) (5.1) $ 1,061 1.9 ____________________________ N/M = Not meaningful.
Total deposits increased at December 31, 2023, compared to December 31, 2022, primarily due to increases in brokered time deposits and money market deposits, which increased by $439.6 million and $330.2 million, respectively, partially offset by a decrease in noninterest-bearing demand deposits of $562.8 million compared to December 31, 2022.
Total deposits decreased by $28.0 million, or 0.3%, to $8.22 billion at December 31, 2024, from $8.25 billion at December 31, 2023, primarily due to a decrease of $364.8 million in brokered deposits, which was partially offset by increases of $184.6 million and $157.9 million and interest-bearing demand and money market deposits, respectively.
Our long-term debt consists of advances from the FHLB with original maturities greater than one year and the subordinated indebtedness captioned and described below. Interest rates for FHLB long-term advances outstanding at December 31, 2023 and 2022, ranged from 1.99% to 4.57% and were subject to restrictions or penalties in the event of prepayment.
Interest rates for FHLB long-term advances outstanding at December 31, 2024 and 2023, ranged from 1.99% to 4.57% and were subject to restrictions or penalties in the event of prepayment. Overnight repurchase agreements with depositors consist of obligations of ours to depositors and mature on a daily basis.
The revolving line of credit matures on October 27, 2024, and the Company had no balance outstanding on this revolving credit loan under the Loan Agreement at December 31, 2023, and $30.0 million outstanding at December 31, 2022.
Consistent with the terms of the agreement, the Company extended the maturity twice in prior years, and the Loan Agreement was terminated as of the October 27, 2024, expiration date. The Company had no balance outstanding on this revolving credit loan under the Loan Agreement at December 31, 2023.
This has put pressure on borrower’s cash flow and contributed to higher overall nonperforming loans at December 31, 2023 compared to December 31, 2022. 66 Table of Contents Securities Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue.
Past due loans to total LHFI increased to 0.56% at December 31, 2024, compared to 0.34% at December 31, 2023. 67 Table of Contents Securities Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue.
Net Interest Income and Net Interest Margin Net interest income for the year ended December 31, 2023, was $299.6 million, an increase of $24.3 million, or 8.8%, compared to the year ended December 31, 2022. Increases in interest rates and average interest-earning assets drove increases of $129.4 million and $67.4 million, respectively, in total interest income.
Net Interest Income and Net Interest Margin Net interest income for the year ended December 31, 2024, was $300.4 million, an increase of $809,000, or 0.3%, compared to the year ended December 31, 2023.
Subordinated Indebtedness Included in subordinated indebtedness, net in the table above, are $37.6 million of subordinated promissory notes ("BTH Notes") assumed from BTH in conjunction with the merger on August 1, 2022. At December 31, 2023, the Company had BTH Notes of $34.7 million with maturity dates ranging from December 2024 to June 2031.
Subordinated Indebtedness At December 31, 2023, the Company had $34.7 million in subordinated promissory notes that were assumed in the merger with BTH (“BTH Notes”) with origination dates ranging from June 2015 to June 2021.
LHFI was $7.66 billion at December 31, 2023, compared to $7.09 billion at December 31, 2022. The increase was partially offset by decreases of $387.9 million and $78.5 million in available for sale securities and cash and cash equivalents, respectively.
These decreases were partially offset by an increase of $189.8 million in cash and cash equivalents. LHFI were $7.57 billion at December 31, 2024, a decrease of 1.1%, compared to $7.66 billion at December 31, 2023. Available for sale securities declined to $1.10 billion, reflecting a 12.1% decrease, at December 31, 2024, compared to $1.25 billion at December 31, 2023.
Deeply rooted in our 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 we serve. We provide a broad range of financial services and currently has over 60 locations from Dallas/Fort Worth, East Texas and Houston, across North Louisiana and into Mississippi .
We provide a broad range of financial services and currently has over 60 locations from Dallas/Fort Worth, East Texas, Houston, across North Louisiana, Mississippi, South Alabama and into the Florida Panhandle .
Comparison of Financial Condition at December 31, 2023, and December 31, 2022 General Total assets increased by $36.5 million, or 0.4%, to $9.72 billion at December 31, 2023, from $9.69 billion at December 31, 2022. The increase in total assets is primarily due to an increase of $570.9 million, or 8.1%, in our loans held for investment (“LHFI”).
Comparison of Financial Condition at December 31, 2024, and December 31, 2023 General Total assets decreased by $43.9 million, or 0.5%, to $9.68 billion at December 31, 2024, from $9.72 billion at December 31, 2023. The decrease in total assets is primarily due to decreases of $151.1 million and $87.2 million in available for sale securities and LHFI, respectively.
(Dollars in thousands) December 31, 2023 December 31, 2022 2023 vs. 2022 Real estate: Amount Percent Amount Percent $ Change % Change Commercial real estate (“CRE”) (1) $ 2,442,734 31.9 % $ 2,304,678 32.6 % $ 138,056 6.0 % Construction/land/land development 1,070,225 14.0 945,625 13.3 124,600 13.2 Residential real estate 1,734,935 22.6 1,477,538 20.8 257,397 17.4 Total real estate 5,247,894 68.5 4,727,841 66.7 520,053 11.0 Commercial and industrial 2,059,460 26.9 2,051,161 28.9 8,299 0.4 Mortgage warehouse lines of credit 329,966 4.3 284,867 4.0 45,099 15.8 Consumer 23,624 0.3 26,153 0.4 (2,529) (9.7) Total LHFI $ 7,660,944 100.0 % $ 7,090,022 100.0 % $ 570,922 8.1 ______________________ (1) Includes owner-occupied CRE of $953.8 million and $843.0 million at December 31, 2023, and 2022, respectively.
(Dollars in thousands) December 31, 2024 December 31, 2023 2024 vs. 2023 Real estate: Amount Percent Amount Percent $ Change % Change Commercial real estate (“CRE”) (1) $ 2,477,431 32.7 % $ 2,442,734 31.9 % $ 34,697 1.4 % Construction/land/land development 864,011 11.4 1,070,225 14.0 (206,214) (19.3) Residential real estate 1,857,589 24.5 1,734,935 22.6 122,654 7.1 Total real estate 5,199,031 68.6 5,247,894 68.5 (48,863) (0.9) Commercial and industrial 2,002,634 26.5 2,059,460 26.9 (56,826) (2.8) Mortgage warehouse lines of credit 349,081 4.6 329,966 4.3 19,115 5.8 Consumer 22,967 0.3 23,624 0.3 (657) (2.8) Total LHFI $ 7,573,713 100.0 % $ 7,660,944 100.0 % $ (87,231) (1.1) ______________________ (1) Includes owner-occupied CRE of $975.9 million and $953.8 million at December 31, 2024 and December 31, 2023, respectively.
There can be no assurance, however, that our loan portfolio will not become subject to losses due to declines in economic conditions or deterioration in the financial condition of our borrowers. 62 Table of Contents The following table shows our nonperforming loans and nonperforming assets at the dates indicated: (Dollars in thousands) Nonperforming LHFI: December 31, 2023 December 31, 2022 Commercial real estate $ 786 $ 526 Construction/land/land development 305 270 Residential real estate 13,037 7,712 Commercial and industrial 15,897 1,383 Consumer 90 49 Total nonperforming LHFI 30,115 9,940 Nonperforming loans held for sale — 3,933 Total nonperforming loans 30,115 13,873 Other real estate owned: Commercial real estate, construction/land/land development 3,068 — Residential real estate 846 806 Total other real estate owned 3,914 806 Other repossessed assets owned 15 — Total repossessed assets owned 3,929 806 Total nonperforming assets $ 34,044 $ 14,679 Loan modifications made to borrowers experiencing financial difficulty - nonaccrual (1) $ 8,388 $ 4,389 Loan modifications made to borrowers experiencing financial difficulty - accruing (1) 28,969 3,248 Total LHFI 7,660,944 7,090,022 Ratio of nonperforming LHFI to total LHFI 0.39 % 0.14 % Ratio of nonperforming assets to total assets 0.35 0.15 ______________________ (1) December 31, 2022, amounts were previously disclosed as troubled debt restructured (“TDR”) loans under Accounting Standards Codification 310-40.
There can be no assurance, however, that our loan portfolio will not become subject to losses due to declines in economic conditions or deterioration in the financial condition of our borrowers. 63 Table of Contents The following table shows our nonperforming loans and nonperforming assets at the dates indicated: (Dollars in thousands) Nonperforming LHFI: December 31, 2024 December 31, 2023 Commercial real estate $ 4,974 $ 786 Construction/land/land development 18,505 305 Residential real estate 36,221 13,037 Commercial and industrial 15,120 15,897 Consumer 182 90 Total nonperforming LHFI 75,002 30,115 Other real estate owned: Commercial real estate, construction/land/land development 1,340 3,068 Residential real estate 1,261 846 Former Bank premises 1,034 — Total other real estate owned 3,635 3,914 Other repossessed assets owned — 15 Total repossessed assets owned 3,635 3,929 Total nonperforming assets $ 78,637 $ 34,044 Total LHFI $ 7,573,713 $ 7,660,944 Ratio of nonperforming LHFI to total LHFI 0.99 % 0.39 % Ratio of nonperforming assets to total assets 0.81 0.35 As explained in detail in Part II, Item 8, Note 18 — Commitments and Contingencies under Loss Contingencies, our credit metrics were negatively impacted by certain questioned activity involving a former banker in our East Texas market.
Amount Ratio Amount Ratio Common equity Tier 1 capital (to risk-weighted assets) $ 1,012,916 11.83 % $ 906,859 10.93 % Tier 1 capital (to risk-weighted assets) 1,028,729 12.01 922,584 11.12 Total capital (to risk-weighted assets) 1,286,604 15.02 1,180,665 14.23 Tier 1 capital (to average total consolidated assets) 1,028,729 10.50 922,584 9.66 Origin Bank Common equity Tier 1 capital (to risk-weighted assets) $ 1,019,732 11.95 % $ 952,579 11.50 % Tier 1 capital (to risk-weighted assets) 1,019,732 11.95 952,579 11.50 Total capital (to risk-weighted assets) 1,188,000 13.92 1,109,257 13.39 Tier 1 capital (to average total consolidated assets) 1,019,732 10.45 952,579 9.94 74 Table of Contents
Amount Ratio Amount Ratio Common equity Tier 1 capital (to risk-weighted assets) $ 1,085,860 13.32 % $ 1,012,916 11.83 % Tier 1 capital (to risk-weighted assets) 1,101,766 13.52 1,028,729 12.01 Total capital (to risk-weighted assets) 1,339,735 16.44 1,286,604 15.02 Tier 1 capital (to average total consolidated assets) 1,101,766 11.08 1,028,729 10.50 Origin Bank Common equity Tier 1 capital (to risk-weighted assets) $ 1,075,768 13.29 % $ 1,019,732 11.95 % Tier 1 capital (to risk-weighted assets) 1,075,768 13.29 1,019,732 11.95 Total capital (to risk-weighted assets) 1,239,644 15.31 1,188,000 13.92 Tier 1 capital (to average total consolidated assets) 1,075,768 10.89 1,019,732 10.45

… 134 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+1 added−12 removed14 unchanged
Biggest changeThe Federal Funds target rate range has increased 525 basis points starting with the Federal Reserve Board’s first rate increase in 2022, and in order to remain competitive as market interest rates increased, we increased interest rates paid on our deposits. Impact of Inflation Our financial statements included herein have been prepared in accordance with U.S.
Biggest changeDuring the second half of 2024, the federal funds target range decreased 100 basis points from its recent cycle high. Impact of Inflation Our financial statements included herein have been prepared in accordance with U.S. GAAP, which presently requires us to measure the majority of our financial position and operating results primarily in terms of historic dollars.
Internal policy regarding interest rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 8.0% for a 100 basis point shift, 15.0% for a 200 basis point shift, 20.0% for a 300 basis point shift, and 25.0% for a 400 basis point shift.
Internal policy regarding interest rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 10.0% for a 100-basis point shift, 15.0% for a 200-basis point shift, 20.0% for a 300-basis point shift, and 25.0% for a 400-basis point shift.
We continue to monitor our asset sensitivity and evaluate strategies to prevent being significantly impacted by future changes in interest rates. 75 Table of Contents The following table summarizes the impact of an instantaneous, sustained simulated change in net interest income and fair value of equity over a 12-month horizon at the date indicated.
We continue to monitor our asset sensitivity and evaluate strategies to prevent being significantly impacted by future changes in interest rates. The following table summarizes the impact of an instantaneous, sustained simulated change in net interest income and fair value of equity over a 12-month horizon at the date indicated.
December 31, 2023 Change in Interest Rates (basis points) % Change in Net Interest Income % Change in Fair Value of Equity +400 15.9 % 4.1 % +300 11.9 3.5 +200 8.0 3.0 +100 0.3 (1.1) Base -100 (4.5) (2.6) -200 (0.8) (0.1) -300 (0.8) (1.4) -400 (1.0) (2.9) We have found that, historically, interest rates on deposits do not change completely in tandem with the changes in the discount and federal funds rates.
December 31, 2024 Change in Interest Rates (basis points) % Change in Net Interest Income % Change in Fair Value of Equity +400 15.9 % (9.3) % +300 12.1 (6.8) +200 8.3 (4.1) +100 4.2 (1.8) Base -100 (4.9) 1.7 -200 (7.8) 3.2 -300 (10.1) 4.9 -400 (11.0) 7.1 We have found that, historically, interest rates on deposits do not change completely in tandem with the changes in the discount and federal funds rates.
Overall, interest rates on deposits typically experience lower rate increases than a cumulative full-cycle rising-rate environment exhibits. This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis, meaning that process by which we measure the gap between interest rate sensitive assets versus interest rate sensitive liabilities.
Overall, interest rates on deposits typically experience a lower degree of rate change than changes in market interest rates. This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis, meaning that process by which we measure the gap between interest rate sensitive assets versus interest rate sensitive liabilities.
While interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate.
In management’s opinion, changes in interest rates affect the financial condition of a financial institution to a far greater degree than changes in the inflation rate. While interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate.
Interest rates are highly sensitive to many factors that are beyond our control, including changes in the expected rate of inflation, the influence of general and local economic conditions and the monetary and fiscal policies of the United States government, its agencies and various other governmental regulatory authorities. 76 Table of Contents Market Risk In 2017, the United Kingdom’s Financial Conduct Authority announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR).
Interest rates are highly sensitive to many factors that are beyond our control, including changes in the expected rate of inflation, the influence of general and local economic conditions and the monetary and fiscal policies of the United States government, its agencies and various other governmental regulatory authorities. 77 Table of Contents
The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings.
In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. 75 Table of Contents The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings.
The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions and the fair value of our available for sale securities.
Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and the application and timing of various strategies. 76 Table of Contents The FRB sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions and the fair value of our available for sale securities.
GAAP, which presently requires us to measure the majority of our financial position and operating results primarily in terms of historic dollars. Changes in the relative value of money due to inflation or recession are generally not considered. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature.
Changes in the relative value of money due to inflation or recession are generally not considered. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the general level of inflation.
As a result, interest rates have a more significant impact on a financial institution’s performance than the general level of inflation. However, inflation affects financial institutions by increasing their cost of goods and services purchased, as well as the cost of salaries and benefits, occupancy expense, and similar items.
However, inflation affects financial institutions by increasing their cost of goods and services purchased, as well as the cost of salaries and benefits, occupancy expense, and similar items. Inflation and related increases in interest rates generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings, and stockholders’ equity.
Removed
In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors.
Added
On September 18, 2024, the FRB reduced the federal funds target rate range by 50 basis points, to a range of 4.75% to 5.00%, marking the first rate reduction since early 2020. Subsequently, it implemented two additional reductions, with the current federal funds target range set to 4.25% to 4.50% on December 18, 2024.
Removed
Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and the application and timing of various strategies. Economic conditions and growth prospects are currently impacted by record inflation and recessionary concerns.
Removed
Increasing interest rates and rising building costs have caused some slowing in the single family housing market. Furthermore, worker shortages especially in the restaurant, hospitality and retail industries, combined with supply chain disruptions impacting numerous industries, and inflationary conditions has had some impact on the level of economic growth.
Removed
Ongoing higher inflation levels and higher interest rates could have a negative impact on both our consumer and commercial borrowers.
Removed
Inflation and related increases in interest rates generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings, and stockholders’ equity. In management’s opinion, changes in interest rates affect the financial condition of a financial institution to a far greater degree than changes in the inflation rate.
Removed
Publication of the one week and two month LIBOR offered rates ceased on December 31, 2021, and the publication of the remaining LIBOR offered rates ceased to be representative on June 30, 2023. The Company discontinued the use of LIBOR for new contracts after December 31, 2021, with limited exceptions as permitted by regulatory guidance and internal policy.
Removed
Regulators, industry groups and certain committees (e.g., the Alternative Reference Rates Committee (ARRC)) have, among other things, published recommended fallback language for LIBOR-linked financial instruments, identified recommended alternatives for certain LIBOR rates (e.g., AMERIBOR or the Secured Overnight Financing Rate (SOFR) as the recommended alternative to U.S. Dollar LIBOR), and proposed implementations of the recommended alternatives in floating rate instruments.
Removed
Further, the Adjustable Interest Rate (LIBOR) Act, enacted in March 2022, provides a statutory framework to replace U.S. dollar LIBOR with a benchmark rate based on the SOFR for contracts governed by U.S. law that have no or ineffective fallbacks, and in December 2022, the Federal Reserve Board adopted related implementing rules.
Removed
In addition, where fallback language allows the Bank to select a benchmark rate, the statutory framework grants the authority to select the Board-selected benchmark replacement as the benchmark replacement, including the safe harbor provisions that, among other things, generally provide that such selection or use will not discharge or excuse performance under, give any person the right to unilaterally terminate or suspend performance under, or constitute a breach, of the contract.
Removed
Effective July 1, 2023, all remaining LIBOR instruments were transitioned in accordance with the statutory framework established by the Federal Reserve with no material financial impact to the Company. In general, the Company converted the index rate of variable rate loans based on 1-Month LIBOR to an index rate equal to 1-Month Term SOFR as of June 30, 2023.
Removed
In addition, the Company converted the index rates of variable rate loans based on 3-Month LIBOR and 12-Month LIBOR to index rates equal to 3-Month Term SOFR and 12-Month Term SOFR, respectively, as of June 30, 2023, plus the incremental differences between the corresponding LIBOR and Term SOFR index rates on June 30, 2023.
Removed
Likewise, all LIBOR-based indexes in the Bank’s swap agreements were converted to appropriate SOFR-based indexes. While we have not had any material issues to-date, the discontinuance of LIBOR could result in customer uncertainty and disputes arising as a consequence of the transition, and could result in damage to our reputation and loss of customers. 77 Table of Contents

Other OBK 10-K year-over-year comparisons