Executive Summary

Q1 2025 delivered improved profitability: net income $22.4M and diluted EPS $0.71, up 57% QoQ; NIM-FTE expanded 11 bps to 3.44% as deposit costs fell 38 bps; PTPP ROAA rose to 1.32% .
Origin raised margin guidance by 5 bps (now 3.50% ±10 bps for Q4 2025, 3.45% ±10 bps for FY2025) and expects lower noninterest expense year-over-year as Optimize Origin actions ramp; sub-debt redemption is expected to save ~$2.1M annually .
Credit metrics weakened modestly: nonperforming LHFI to LHFI rose to 1.07% (from 0.99%), past-dues increased to 0.96% (from 0.56%), and provision swung to $3.4M expense; management linked increases to specific relationships and ongoing East Texas litigation .
Deposits grew 1.4% QoQ (ex-brokered +1.8%), brokered deposits fell to $50M; loan-to-deposit ex-warehouse at 86.1% supports planned mid- to high-single-digit loan growth in 2H 2025 funding .
EPS beat consensus and revenue was slightly below: Primary EPS 0.77* vs 0.69* est; “Revenue” 90.6M* vs 93.6M* est (definition differences vs bank “net revenue”)—estimate marks are S&P Global [GetEstimates].

What Went Well and What Went Wrong

What Went Well

Margin expansion and cost control: NIM-FTE rose to 3.44% (+11 bps QoQ) driven by a 34 bp reduction in rates on interest-bearing liabilities; efficiency ratio improved to 65.99% (vs 83.85% in Q4) .
Deposit mix and liquidity: Total deposits +$115.3M QoQ, brokered deposits declined to $50.0M; ex-brokered deposits +$145.5M, positioning to fund loan growth .
Strategic execution: Redeemed $70M bank-level sub-debt (annual interest expense savings ~$2.1M), continued branch consolidations and mortgage restructuring under Optimize Origin .
- “We expect…an ROA run rate of 1% or greater by the fourth quarter this year…through restructuring of our mortgage business” — CEO Drake Mills .

What Went Wrong

Credit normalization: Past-due LHFI climbed to $72.8M (0.96% of LHFI) from $42.4M; nonperforming LHFI rose to $81.4M (1.07% of LHFI); provision expense of $3.4M vs $(5.4)M QoQ .
Loan growth muted QoQ: LHFI increased just $11.8M (+0.2%); average LHFI declined ~$298M QoQ amid lower mortgage warehouse and construction balances .
Noninterest income softness: While Q4 had a one-time securities loss, Q1 limited partnership investment fair value adjustments reduced other income by $1.6M; mortgage revenue also seasonally lower .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Net Interest Income ($MM)	73.323	78.349	78.459
Noninterest Income ($MM)	17.255	(0.330)	15.602
Net Income ($MM)	22.632	14.270	22.411
Diluted EPS ($)	0.73	0.46	0.71
NIM-FTE (%)	3.19	3.33	3.44
ROAA (annualized, %)	0.92	0.57	0.93
Efficiency Ratio (%)	64.81	83.85	65.99

Estimates vs Actual (S&P Global; values marked * from S&P Global)

Metric	Consensus*	Actual*
Primary EPS (Q1 2025)	0.688*	0.770*
Revenue (Q1 2025, S&P definition)	$93.608M*	$90.617M*
Net Income Normalized (Q1 2025)	$21.532M*	$22.411M*

Notes: S&P Global values marked *; S&P “Revenue” may differ from bank “net revenue” (net interest income + noninterest income). Values retrieved from S&P Global.

Credit KPIs

Metric	Q1 2024	Q4 2024	Q1 2025
Past-due LHFI ($MM)	32.835	42.437	72.774
Nonperforming LHFI ($MM)	40.439	75.002	81.368
ALCL / LHFI (%)	1.25%	1.20%	1.21%
Classified Loans / LHFI (%)	1.07%	1.57%	1.68%
Net Charge-offs / Avg LHFI (annualized, %)	0.13%	(0.03%)	0.15%

Loan Portfolio (Selected Categories, $MM)

Category	Q4 2024	Q1 2025
Non-owner Occupied CRE	1,501.484	1,445.864
Construction/Land/Land Dev.	864.011	798.609
Residential RE – Single Family	1,432.129	1,465.192
Multi-family Real Estate	425.460	489.765
Commercial & Industrial	2,002.634	2,022.085
Mortgage Warehouse (MW LOC)	349.081	404.131
Total LHFI	7,573.713	7,585.526

Deposits & Liquidity

Metric	Q4 2024	Q1 2025
Total Deposits ($MM)	8,223.120	8,338.412
Noninterest-bearing Deposits (% of Total)	23.1%	22.7%
Brokered Deposits ($MM)	80.226	50.000
Loan-to-Deposit (ex-Warehouse, %)	87.9%	86.1%

Non-GAAP/Notable Items and Impact

Item	Q4 2024 EPS Impact	Q1 2025 EPS Impact
Loss on Sale of Securities	(0.37)	—
Operating Exp. – Questioned Banker Activity	(0.10)	(0.01)
Optimize Origin Operating Expense	(0.03)	(0.04)
OID Amortization – Sub-debt Redemption	—	(0.02)
Total Notable Items EPS Impact	(0.37)	(0.06)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (NIM)	Q4 2025	3.45% ±10 bps	3.50% ±10 bps	Raised
Net Interest Margin (NIM)	FY 2025	3.40% ±10 bps	3.45% ±10 bps	Raised
Loan Growth (ex-warehouse)	FY 2025	Mid- to High-single-digit	Mid- to High-single-digit	Maintained
Deposit Growth	FY 2025	Mid-single-digit	Mid-single-digit	Maintained
Noninterest Income Growth (YoY)	FY 2025	Low- to Mid-single-digit	Down low single digits	Lowered
Noninterest Expense Growth (YoY)	FY 2025	Low-single-digit	Flat to down slightly	Lowered
Tax Rate	FY 2025	~21.5%	~21.5%	Maintained

Management also explicitly raised margin guidance by 5 bps due to a higher starting point in Q2 2025 and maintained loan growth outlook at the low end of the guided range amid macro uncertainty .

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
Deposit costs & betas	Pricing pressures elevated; planning for stabilization post Fed cuts	NIM expanded 15 bps; deposit costs surprised better than expected	34 bp drop in interest-bearing deposit rates; betas tracking history; active repricing	Improving
Loan growth outlook	Low single digits 2024; pipelines building	Preparing to accelerate in 2025; client selection constrained 2024	Mid- to high-single-digit 2025; pipelines strong; cautious to low end given macro/tariffs	Building
Margin trajectory & Fed cuts	Modeled mid-single-digit expansion post measured cuts	Expect compression with 50 bp cuts then expansion; favor measured cadence	Raised NIM guidance; 11 bps QoQ expansion achieved	Positive
East Texas “questioned banker” litigation	Identified and reserved; credit metrics affected	Provision release; contingency expense recorded; investigation ongoing	Past-dues/NPLs increased; still working toward resolution	Ongoing
Regional growth (TX & Southeast)	Deposit and loan gains led by TX; Southeast rollout	Under-10B strategy constrained CRE; deposit-driven loan growth strategy	TX pipelines strong; Southeast tracking to plan; bullish on Mobile/AL & FL Panhandle	Positive
Mortgage business model	Normal seasonality; MSR and revenue variability	Considering restructuring to improve returns	Announced restructuring to partnership model; quarterly fees to decline by $0.4–$0.5M	Restructuring
Capital actions	TBV growth; well-capitalized ratios	Plan sub-debt redemption; optimize securities	$70M sub-debt redemption completed; buyback considered; capital remains strong	Positive

Management Commentary

“We expect the strategic actions…will drive us to an ROA run rate of 1% or greater by the fourth quarter this year” — CEO Drake Mills .
“Deposits, excluding brokered, grew 7.2% on an annualized basis…This sets us up well to fund loan growth we expect to see in the back half of the year” — Bank CEO Lance Hall .
“Due primarily to a higher starting point in 2Q ’25, we increased our margin guidance by five basis points to 3.50% in 4Q ’25 and 3.45% for the full year” — CFO Wally Wallace .
“We redeemed $70 million in subordinated debentures…expected to result in approximately $2.1 million in annualized future interest expense savings” .

Q&A Highlights

Loan growth: Management targets mid- to high-single-digit 2025, with pipelines strengthening; client selection exits are in late innings (~$200M exited over 4 quarters) .
Deposit pricing & betas: Active management across markets; betas aligned with historical levels; some competitors offering high CD specials .
10B threshold & Durbin timing: Intends to cross 10B unless macro deteriorates; Durbin impact estimated at ~$5.5–$6.0M pretax annually starting 3Q 2026 .
Capital deployment: Considering buybacks at “bargain” levels; prioritizing sub-debt call and organic lift-outs; capital runway supports growth .
Mortgage restructuring & fee outlook: New partnership model lowers expense; fee run-rate reduced by ~$0.4–$0.5M per quarter starting Q3 .

Estimates Context

EPS beat: Primary EPS 0.77* vs 0.69* consensus; GAAP diluted EPS 0.71 also exceeded consensus, aided by improved NIM and lower expenses; notable items net impact was (~$0.06) [GetEstimates] .
Revenue modest miss: S&P “Revenue” 90.6M* vs 93.6M* consensus; note definitional differences vs bank net revenue (NII + noninterest income 94.1M) [GetEstimates] .
Normalized net income exceeded: $22.4M actual vs $21.5M* consensus [GetEstimates].
Values marked * retrieved from S&P Global.

Key Takeaways for Investors

Margin/income trajectory improving: Deposit cost repricing and securities optimization are lifting NIM; guidance raised to 3.50% Q4 2025—watch deposit betas and pace of Fed cuts for near-term NIM volatility .
Credit watch items manageable: Past-due and NPLs increased on specific relationships; allowance coverage remains ~1.21% of LHFI—monitor East Texas litigation and classified trends .
Funding and growth setup: Ex-brokered deposit growth and low brokered balances position OBK to fund targeted loan growth; loan-to-deposit ex-warehouse at 86.1% gives capacity .
Operating leverage from Optimize Origin: Branch consolidation, mortgage restructuring, and sub-debt redemption underpin expense reductions and earnings uplift; track execution vs ~$23.4M annualized PTPP target .
Capital optionality: Well-capitalized with rising TBV and TCE; sub-debt call completed; potential buybacks and Argent >20% equity method could offset Durbin in 2026 .
Near-term trading implications: EPS beat vs consensus and raised margin guidance are positive catalysts; credit headline risk and revenue definition differences could temper reaction—focus on sustained NIM expansion and expense trajectory [GetEstimates] .
Medium-term thesis: Delivery on 1%+ ROA run-rate by Q4 2025 with continued margin gains and cost reductions, plus growth in TX/Southeast, supports multiple expansion if credit normalizes and deposit momentum holds .

Origin Bancorp, Inc. (OBK)·Q1 2025 Earnings Summary