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Jun 30
Origin Q2 2025 Earnings Report
Origin Bancorp, Inc. reported its second quarter 2025 earnings, with net income and EPS decreasing compared to the previous quarter, primarily due to a significant loss on sales of securities.
Key Takeaways
Origin Bancorp, Inc. reported a net income of $14.6 million and diluted EPS of $0.47 for the second quarter of 2025. This represents a decrease from the previous quarter's net income of $22.4 million and diluted EPS of $0.71. The decline was largely attributed to a $14.4 million loss on sales of securities as part of a bond portfolio optimization strategy. Despite this, net interest income increased by 4.7% to $82.1 million, reaching its highest level in nine quarters, and the fully tax equivalent net interest margin expanded by 17 basis points to 3.61%. The company continued to execute its 'Optimize Origin' initiative, focusing on efficiency and balance sheet optimization.
Net income for Q2 2025 was $14.6 million, a decrease from $22.4 million in the linked quarter, primarily due to a $14.4 million loss on securities sales.
Diluted EPS for Q2 2025 was $0.47, down from $0.71 in the previous quarter, with the securities sale negatively impacting EPS by $0.35.
Net interest income increased by $3.7 million (4.7%) to $82.1 million, reaching a nine-quarter high, and the fully tax equivalent net interest margin expanded to 3.61%.
Total loans held for investment increased by $98.9 million (1.3%) to $7.68 billion, driven by increases in MW LOC, multi-family real estate, and owner-occupied commercial real estate.
Origin
Origin
Origin Revenue by Segment
Revenue by Segment
Commercial Real Estate Revenue
CapyFin.comConstruction/Land/Land Development Revenue
CapyFin.comResidential Real Estate Revenue
CapyFin.comCommercial and Industrial Revenue
CapyFin.comMW LOC Revenue
CapyFin.comConsumer Revenue
CapyFin.comInvestment Securities - Taxable Revenue
CapyFin.comInvestment Securities - Nontaxable Revenue
CapyFin.comAssets Held in Other Financial Institutions Revenue
CapyFin.comLoans Held for Sale Revenue
CapyFin.comNon-Marketable Equity Securities Held in Other Financial Institutions Revenue
CapyFin.comInterest-Earning Balances Due from Banks Revenue
CapyFin.com Forward Guidance
Origin Bancorp, Inc. is focused on achieving a greater than 1% ROAA run rate by Q4 2025 and an ultimate target of top quartile ROAA through its 'Optimize Origin' initiative. This initiative is expected to drive an annual earnings improvement of approximately $34.2 million on a pre-tax pre-provision basis.
Positive Outlook
- Near-term target of greater than 1% ROAA run rate by Q4 2025.
- Ultimate target of top quartile ROAA.
- Expected annual earnings improvement of approximately $34.2 million on a pre-tax pre-provision basis from 'Optimize Origin' initiatives.
- Increased Argent Financial ownership to 20%, expected to increase noninterest income through equity method accounting.
- Continued evaluation of opportunities to maximize return on securities portfolio.
Challenges Ahead
- Bond portfolio optimization resulted in a $14.4 million loss on sales of securities in Q2 2025, negatively impacting diluted EPS by $0.35.
- Weighted average duration of the securities portfolio increased to 4.52 years, indicating higher interest rate risk.
- Nonperforming LHFI increased by $3.9 million compared to the linked quarter, with the ratio of nonperforming LHFI to LHFI rising to 1.11%.
- Total deposits decreased by $215.4 million (2.6%) compared to the linked quarter, partly due to seasonality in public fund deposits.
- FHLB advances and other borrowings increased significantly by $115.4 million to meet current liquidity needs.