Origin Bancorp, Inc. (OBK) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed outlook. Positive aspects include improved net interest margin, strong capital management, and optimistic long-term growth outlook. However, the flat loan growth guidance, lack of clarity on new hire impacts, and potential expense increases temper enthusiasm. The Q&A reveals uncertainties, particularly regarding deposit cost management and nonperforming loans. Overall, the stock is likely to experience limited movement, reflecting a balance between positive strategic initiatives and concerns about immediate growth and expense management.
Key Financial Performance
Net Interest Income (NII) Increased by 10.2% year-over-year. This growth was attributed to the company's strategic initiatives under Optimize Origin, which included balance sheet management and expense reduction.
Total Revenue (excluding notable items) Increased by 8.8% year-over-year. The increase was driven by improved operational efficiencies and strategic focus on revenue growth.
Noninterest Expense (excluding notable items) Decreased by 0.7% year-over-year. This reduction was due to cost-saving measures, including a 7% reduction in full-time employees (FTEs) and restructuring efforts.
Loan Originations Increased by approximately $500 million or 37% year-over-year. This growth was achieved despite planned reductions in the production team and payoff/paydown pressures, reflecting strong market demand and strategic client selection.
Loan and Swap Fees Increased by 57% year-over-year. This was driven by higher loan originations and strategic initiatives to enhance fee income.
Net Charge-Offs Reported at $3.2 million for the quarter, representing a 0.17% annualized charge-off rate. This was in line with expectations and reflected sound credit performance.
Nonperforming Assets Declined from 1.18% to 1.07% of total loans year-over-year, representing an approximately $7 million reduction. This improvement was due to effective credit risk management.
Allowance for Credit Losses Increased by $523,000 to $96.8 million, remaining stable at 1.34% of total loans net of mortgage warehouse. The increase was primarily driven by loan growth.
Diluted Earnings Per Share (EPS) Reported at $0.95 for Q4. This was impacted by notable items equating to a net expense of $1.7 million, equivalent to $0.04 in EPS pressure.
Net Income Reported at $29.5 million for Q4, driving a return on average assets (ROA) of 1.19%, exceeding the targeted 1% run rate.
Net Interest Margin (NIM) Expanded by 8 basis points to 3.73% during the quarter. This was attributed to balance sheet growth and favorable interest rate dynamics.
Noninterest Income Reported at $16.7 million for Q4. Excluding notable items, it declined to $16.3 million from $17.1 million year-over-year, primarily due to a reduction in swap fee income and seasonality in the insurance segment.
Noninterest-Bearing Deposits Declined by 1.0% sequentially but increased by 5.3% on an average basis year-over-year. This was influenced by strategic deposit management and market dynamics.
Tangible Book Value Increased to $35.04, marking the 13th consecutive quarter of growth. This reflects strong capital management and earnings retention.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Optimize Origin: Achieved a 1% or greater ROA run rate by Q4 2025, with a focus on simplifying operations, sharpening execution, and eliminating friction.
Loan Originations: Increased by approximately $500 million or 37% year-over-year, with loan and swap fees up 57%.
Market Disruption: Capitalized on M&A-driven market disruption, adding over 10 production bankers in Houston and Dallas-Fort Worth.
Strategic Investments: Planned $10 million investment in new bankers and banking teams across markets in 2026.
Operational Efficiencies: Reduced FTEs by nearly 7%, consolidated banking centers, and restructured mortgage delivery.
Expense Management: Noninterest expense, excluding notable items, decreased by 0.7%.
Revenue Growth Focus: Shifted focus to client delivery model and additional revenue growth opportunities in 2026.
Capital Flexibility: Redeemed $145 million in sub-debt and repurchased $16 million in common stock while maintaining strong capital ratios.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Past Due Loans: Total past dues at year-end were 0.96% of total loans, with a slight increase in past dues 30 to 89 days from 0.1% to 0.19%. This indicates a moderate rise in short-term delinquencies.
Classified Loans: Total classified loans increased from 1.84% to 1.92% of total loans, driven by the downgrade of 4 relationships, which could signal potential credit quality concerns.
Net Charge-Offs: Net charge-offs for the quarter were $3.2 million, representing a 0.17% annualized charge-off rate. While in line with expectations, this reflects ongoing credit losses.
Deposit Decline: Total deposits declined 0.3% during the quarter, with noninterest-bearing deposits decreasing 1.0% sequentially. This could indicate challenges in deposit retention.
Margin Compression: Net interest margin is expected to experience slight compression in Q1 due to timing differences in loan versus deposit repricing following recent Fed rate cuts.
Expense Growth: Noninterest expense is projected to grow in the mid-single digits due to strategic investments in production, which could pressure short-term profitability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Growth: Targeting mid- to high single-digit growth in loans and deposits for the year, with loan growth expected to be more weighted to the second half of the year.
Net Interest Margin (NIM): Anticipating slight margin compression in Q1 due to timing differences in loan versus deposit repricing following recent Fed rate cuts. By Q4, NIM is expected to range between 3.70% and 3.80%, with a bias toward the higher end.
Net Interest Income: Expected to grow in the mid- to high single digits for both the full year and Q4 over Q4.
Noninterest Income: Anticipating full-year growth in the mid- to high single digits, with Q4 over Q4 growth in the low to mid-single digits, excluding notable items.
Noninterest Expense: Expecting mid-single-digit growth for the full year and Q4 over Q4, excluding notable items, driven by strategic investments in production capabilities.
Return on Average Assets (ROA): Targeting a run rate ROA of at least 1.15% in Q4 and a pretax pre-provision run rate ROA in excess of 1.72%.
Strategic Investments: Planning to invest approximately $10 million in new bankers and banking teams throughout markets in 2026, alongside continued investments to drive efficiencies and growth.
Market Opportunities: Capitalizing on M&A-driven disruption in markets, with significant opportunities for growth and expansion.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase: During 2025, the company repurchased roughly $16 million worth of its common stock.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What is the bank's plan regarding new hires and expense guidance?
A:The bank has hired 10 producers recently and has allocated $10 million for additional hires. They are strategically targeting new hires to leverage market disruption and build from an organic perspective. The expense run rate is estimated at $64 million for the first quarter, with potential increases due to new hires and renegotiation of technology contracts.
Q:How will new hires impact loan growth guidance?
A:The impact of new hires on loan growth is expected to be back-end loaded in 2026 due to nonsolicitation and noncompete agreements. Most of the dry powder allocated for hires is anticipated to impact the 2027 loan growth run rate.
Q:What is the outlook for net interest margin (NIM) in the first quarter and beyond?
A:The NIM faced timing differentials in the fourth quarter due to deposit cost adjustments and loan repricing lags. The margin is expected to expand to around 3.75% (+/- 5 basis points) after the first quarter, supported by asset repricing and higher yields on maturing securities and loans.
Q:What types of lenders is the bank targeting for new hires?
A:The bank is focusing on hiring C&I lenders, private bankers, and treasury management officers, with a mix of skills to drive core deposit growth and loan opportunities. Most hires are expected to be in Texas and other disrupted areas of their footprint.
Q:What is the bank's strategy for deposit costs and betas?
A:The bank has been successful in lowering deposit costs, particularly leveraging its rural deposit base in North Louisiana. While it anticipates challenges in further reducing deposit rates, it remains focused on exceeding its historical beta assumptions.
Q:What is the bank's approach to managing nonperforming loans (NPLs)?
A:The bank is focused on reducing NPLs and criticized loans, with progress made in the last quarter. It aims to drive these metrics down further in 2026.
Q:What is the bank's strategy for the securities portfolio?
A:The bank plans to maintain its securities portfolio at 11-12% of assets. Any loan growth will be supported by liquidity rather than reducing the securities portfolio.
Q:How does the bank use data to drive decisions?
A:The bank uses data extensively to analyze portfolio performance, banker profitability, and client/product profitability. This data-driven approach helps in making informed decisions about hires, client selection, and expense management.
Q:What is the bank's outlook for 2026 and beyond?
A:The bank is optimistic about 2026, expecting margin expansion, fee revenue growth, expense management, and strong loan and deposit growth. It plans to continue investing in long-term growth and shareholder value.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the exact number of additional hires planned for the year and the precise impact of these hires on loan growth beyond general timelines. Additionally, they did not provide clear specifics on how much further deposit costs could be reduced or the exact strategies for managing nonperforming loans beyond general statements of focus.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CRE credit
Dallas Fort
FTEs NII
Fed rate
Financial banking
Houston Dallas
Inc name
Instructions conference
Lance credit
Lance opportunity
Lance sense
NII item
NIM bias
Optimize accountability
Optimize disruption
Optimize friction
Optimize ownership
Optimize project
Optimize success
ROA amount
ROA balance
Senior Executive
deposit day
disruption market
due
future
income mid
increase
mid digit
momentum
opportunity disruption
optimism
pre
production
quartile ROA
rate ROA
run rate
swap fee
team market
OBK Transcript
Champion Iron Limited (CIA:CA) Q3 2026 Earnings Call Transcript
Unknown1-29
The earnings call shows mixed signals. While there are cost reductions, improved production, and potential synergies from acquisitions, the absence of clear guidance and specifics in the Q&A section raises concerns. The stockpile reduction and provisional price adjustments are positive, but the lack of significant year-over-year change in key financial metrics limits optimism. The market's reaction is likely to be neutral due to the balanced nature of the positive and negative factors presented.
Origin Bancorp, Inc. (OBK) Q4 2025 Earnings Call Transcript
Unknown1-29
The earnings call presents a mixed outlook. Positive aspects include improved net interest margin, strong capital management, and optimistic long-term growth outlook. However, the flat loan growth guidance, lack of clarity on new hire impacts, and potential expense increases temper enthusiasm. The Q&A reveals uncertainties, particularly regarding deposit cost management and nonperforming loans. Overall, the stock is likely to experience limited movement, reflecting a balance between positive strategic initiatives and concerns about immediate growth and expense management.
Origin Bancorp, Inc. (OBK) Q3 2025 Earnings Call Transcript
Positive10-23
The earnings call summary indicates positive financial performance with increased net interest margin, deposit growth, and tangible book value. The Q&A reveals optimism for future loan growth and strategic initiatives like Optimize Origin, which enhance profitability. The $50 million share repurchase plan supports shareholder returns. Despite uncertainties around Tricolor fraud recovery, credit trends remain stable. The raised margin guidance and positive outlook for 2026 loan repricing further bolster the sentiment. Overall, these factors suggest a positive stock price movement over the next two weeks.
Origin Bancorp, Inc. (OBK) Q2 2025 Earnings Call Transcript
Positive7-24
The earnings call summary and Q&A indicate strong financial performance with an expanding net interest margin, consistent growth in tangible book value, and positive guidance for future loan growth. Despite some deposit decline and unclear management responses, the company's strategic initiatives, such as the 'optimize Origin' and securities restructure, are well-received. The stock buyback program and expected growth in Argent's assets further support a positive outlook. Overall, the market is likely to react positively, with a potential stock price increase of 2% to 8% over the next two weeks.
OBK Slides
OBK Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
