Origin Bancorp Inc
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
OBK$53.24-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001516912-24-000092
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001516912-24-000117
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 164 previous paragraphs and 165 current paragraphs.
89 unchanged; 54 reworded; 22 added; 18 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
2024 Third Quarter Highlights
Current report
•Stockholders’ equity was $1.15 billion at September 30, 2024, reflecting an increase of $82.8 million, or 7.8%, compared to December 31, 2023.
Current report
Results of Operations
Current report
Net Interest Income and Net Interest Margin for the Three Months Ended September 30, 2024 and 2023
Current report
Net interest income for the three months ended September 30, 2024, was $74.8 million, an increase of $674,000, or 0.9%, compared to the three months ended September 30, 2023. The increase was primarily driven by an $8.8 million increase in total interest income, partially offset by an $8.1 million increase in interest expense during the three months ended September 30, 2024, compared to three months ended September 30, 2023.
Current report
The NIM-FTE was 3.18% for the three months ended September 30, 2024, a four-basis point increase from 3.14% for the three months ended September 30, 2023. The primary driver of the increase was a change in the mix of interest-earning assets with higher yielding average LHFI balances increasing to 84.1% of total interest-earning assets during the three months ended September 30, 2024, compared to 80.1% during the three months ended September 30, 2023. Partially offsetting this increase was continued decrease in the net interest spread reflected by a 45-basis point increase in the cost of interest-bearing liabilities to 4.04% from 3.59% for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, with only a 40-basis point increase in the yield earned on interest-earning assets to 6.09% from 5.69% for the same period.
Current report
Noninterest income for the three months ended September 30, 2024, decreased by $2.1 million, or 11.8%, to $16.0 million, compared to $18.1 million for the three months ended September 30, 2023, primarily due to a decrease of $10.1 million in the change in fair value of equity investments partially offset by an increase of $7.4 million in gain (loss) on sales of securities, net.
Current report
Gain (loss) on sales of securities, net. The $7.4 million increase in gain (loss) on sales of securities, net was due to the sale of available for sale investment securities with a book value of $181.9 million, which realized a loss on sale of $7.2 million during three months ended September 30, 2023, with no comparable loss realized during the three months ended September 30, 2024.
Current report
Noninterest expense for the three months ended September 30, 2024, increased by $3.9 million, or 6.6%, to $62.5 million, compared to $58.7 million for the three months ended September 30, 2023, primarily due to increases of $3.9 million, $695,000 and $603,000 in salaries and employee benefits expense, data processing expense and professional services expense, respectively.
Current report
Data Processing. The $695,000 increase in data processing expense was primarily due to an increase of $437,000 in software expenses, primarily driven by new services and increased fees for the three months ended September 30, 2024, compared to three months ended September 30, 2023.
Current report
Professional Services. The $603,000 increase in professional services was primarily due to $848,000 legal and audit fees that were incurred during the current quarter related to the questioned activity mentioned previously.
Current report
We recorded a provision expense of $12.8 million for the nine months ended September 30, 2024, a $1.2 million decrease from $14.0 million for the nine months ended September 30, 2023. The decrease was primarily driven by a $1.4 million decrease in provision for off-balance sheet items, primarily due to lower loan commitment balances at September 30, 2024, compared to September 30, 2023.
Current report
Additionally, as discussed in detail in Part I, Item 1, Note 12 — Commitments and Contingencies under Loss Contingencies, we experienced a combined $7.3 million provision increase associated with the questioned activity recognized during the nine months ended September 30, 2024.
Current report
Net charge-offs were $15.0 million during the nine months ended September 30, 2024, compared to $5.9 million during the nine months ended September 30, 2023, primarily due to a $8.9 million increase in net charge-offs on commercial and industrial loans. The increase was primarily due to charge-offs on three relationships totaling $10.4 million during the nine months ended September 30, 2024, partially offset by recoveries on one relationship totaling $2.8 million.
Current report
Noninterest income for the nine months ended September 30, 2024, increased by $5.6 million, or 11.1%, to $55.7 million, compared to $50.1 million for the nine months ended September 30, 2023. The increase was primarily due to increases of $6.8 million, $1.7 million and $1.4 million in (loss) gain on sales of securities, net, insurance commission and fee income and mortgage banking revenue, respectively. These increases were offset by decreases of $4.9 million and $874,000 in change in fair value of equity investments and swap fee income, respectively.
Current report
(Loss) gain on sales of securities, net. The $6.8 million increase in (loss) gain on sales of securities, net was mainly due to sale of available for sale investment securities with a book value of $181.9 million, which realized a loss on sale of $7.2 million during the nine months ended September 30, 2023, with no comparable amount realized during the nine months ended September 30, 2024.
Current report
Swap fee income. The $874,000 decrease in swap fee income was primarily due to a lower amount of swaps executed during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This was largely due to the expectation throughout nine months ended September 30, 2024, that the Federal Reserve would cut rates.
Current report
Noninterest expense for the nine months ended September 30, 2024, increased by $11.3 million, or 6.5%, to $185.6 million, compared to $174.3 million for the nine months ended September 30, 2023, primarily due to increases of $9.5 million, $1.6 million and $1.3 million in salaries and employee benefits, data processing and other expense, respectively. These increases were offset by decreases of $1.2 million in both loan-related expenses and intangible asset amortization, respectively
Current report
Data Processing. The $1.6 million increase in data processing expense was primarily due to an increase of $969,000 in software expenses, primarily driven by new services and increased fees for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. Also, contributing a combined increase of $563,000 were increased expenses associated with core services, compliance systems and finance and accounting data processing costs.
Current report
Loan-related expenses. The $1.2 million decrease in loan-related expenses was primarily due to decreases of $397,000 and $395,000 in loan related legal fees and servicing costs, respectively.
Current report
Intangible asset amortization. The $1.2 million decrease in intangible asset amortization is primarily due to the accelerated amortization method used to measure the amortization expense of the assets.
Current report
As discussed in our June 30, 2024, Origin Bancorp, Inc. Form 10-Q, and explained in detail in Part I, Item 1, Note 12 — Commitments and Contingencies under Loss Contingencies, our credit metrics were negatively impacted bycertain questioned activity involving a single banker, who has since been terminated, in our East Texas market. Our investigation of this activity remains ongoing and is not final. We continue to work with an outside forensic accounting firm to confirm the Bank’s identification and reconciliation of the activity, targeting a conclusion of this analysis by the end of this year. At this time, we believe that any ultimate loss arising from the situation will not be material to our financial position.
Removed paragraphs (18)
Previous report
2024 Second Quarter Highlights
Previous report
•Stockholders’ equity was $1.10 billion at June 30, 2024, reflecting an increase of $33.0 million, or 3.1%, compared to December 31, 2023.
Previous report
Additionally, partially offsetting the decrease in interest expense due to lower average FHLB advances and other borrowings mentioned above, lower average interest-bearing deposits in banks and average investment securities balances during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, led to a decrease of $5.3 million in interest income, primarily as a result of the strategic decisions of holding excess cash for contingency liquidity during the majority of three months ended June 30, 2023, and selling available for sale securities to pay down borrowings and fund loan growth during the intervening periods.
Previous report
Recently, we identified certain questioned activity involving a single banker in our East Texas market. The activity involved the banker, who has since been terminated, facilitating advances in and among certain customer loans and accounts that, in one or more instances, may not have been appropriately documented. In an effort to better understand and measure the extent of the activity, we have been working with our customers impacted by the activity in order to identify the amounts that may be owed to us, as well as the amounts that may be owed by us. During the quarter, several of the relationships impacted by the activity were placed on non-accrual, resulting in a reversal of $1.2 million of accrued interest which negatively impacted the fully tax equivalent net interest margin (“NIM-FTE”) by five basis points. Our investigation into the questioned activity and impact on our financial statements remains ongoing.
Previous report
The primary increases in our past dues, level of classified, and nonperforming loans for the current quarter resulted from certain questioned activity involving a single banker in our East Texas market. As mentioned previously, in an effort to better understand and measure the extent of the activity, we have been working with our impacted customers in order to identify the amounts that may be owed to us, as well as the amounts that may be owed by us. One of the relationships impacted by this activity filed a lawsuit against the Bank. While this relationship has chosen to file a lawsuit, other relationships have continued to work with us, with certain relationships acknowledging amounts owed and either paying the amounts in full or entering into short-term agreements for repayment. Additionally, we have notified our insurance providers of anticipated claims resulting from this activity, but there is no consideration in this quarter’s financial results of any potential insurance recoveries. We are working with a third party forensic accounting team to confirm the Bank’s identification and reconciliation of the activity, and also assist in evaluating any additional impact from the questioned activity. At this time, we believe that any ultimate loss arising from the situation will not be material to our financial position. Our investigation into the questioned activity and impact on our financial statements remains ongoing.
Previous report
Had we not experienced the combined $7.3 million impact of the increases in the provision for loan credit losses during the three months ended June 30, 2024, due to the questioned activity above, the provision for loan credit losses benefit would have been $1.9 million, reflecting a $6.2 million decrease compared to the three months ended June 30, 2023. The decrease was due to our successful efforts in refining our client selection process. We have moved several credit relationships out of the Bank that were not aligned with our strategic goals, which process released related reserves.
Previous report
Noninterest income for the three months ended June 30, 2024, increased by $6.8 million, or 43.7%, to $22.5 million, compared to $15.6 million for the three months ended June 30, 2023, primarily due to an increase of $5.2 million in change in fair value of equity investments. The remaining increase was attributed to a broad range of small increases across various noninterest income categories that were not individually significant.
Previous report
Noninterest expense for the three months ended June 30, 2024, increased by $5.5 million, or 9.3%, to $64.4 million, compared to $58.9 million for the three months ended June 30, 2023, primarily due to increases of $3.6 million and $1.4 million in salaries and employee benefits and other noninterest expense, respectively.
Previous report
Professional services. Due primarily to the aforementioned questioned activity discussed in detail in Part I, Item 1, Note 12 — Commitments and Contingencies under Loss Contingencies, we expect professional fees will be elevated for the remainder of the 2024 fiscal year.
Previous report
Comparison of Results of Operations for the Six Months Ended June 30, 2024 and 2023
Previous report
We recorded a provision expense of $8.2 million for the six months ended June 30, 2024, a $2.3 million decrease from $10.5 million for the six months ended June 30, 2023. The decrease was primarily due to decreases of $1.3 million and $897,000 in provision for off-balance sheet items and provision for loan credit losses, respectively. The decrease in the provision for off-balance sheet items was mainly due to lower funding commitment balances at June 30, 2024, compared to June 30, 2023. The decrease in provision for loan credit losses was primarily due to a $4.8 million decrease in provision for loans collectively evaluated, partially offset by an increase of $2.3 million in the provision due to higher net charge-offs and an increase of $1.6 million in the provision for loans individually evaluated.
Previous report
Had we not experienced the combined $7.3 million impact of the provision increases during the six months ended June 30, 2024, due to the questioned activity previously discussed, the provision expense would have been $2.2 million, reflecting an $8.2 million decrease compared to the six months ended June 30, 2023. The decrease was due to our successful efforts in refining our client selection process. We have moved several credit relationships out of the Bank that were not aligned with our strategic goals, which process is reflected in lower general reserves during the current period when compared to the six months ended June 30, 2023.
Previous report
Net charge-offs were $5.5 million during the six months ended June 30, 2024, compared to $3.2 million during the six months ended June 30, 2023. The increase was mainly driven by an increase of $2.1 million in net charge-offs on commercial and industrial loans. The ALCL to nonperforming LHFI was 133.05% at June 30, 2024, compared to 280.74% at June 30, 2023, primarily driven by an increase of $42.2 million in our nonperforming LHFI compared to June 30, 2023, with $33.0 million of the increase primarily driven by five loan relationships, related to or impacted by, the questioned loan activity described previously.
Previous report
Noninterest income for the six months ended June 30, 2024, increased by $7.7 million, or 24.0%, to $39.7 million, compared to $32.0 million for the six months ended June 30, 2023. The increase was primarily due to increases of $5.2 million, $1.2 million and $1.1 million in the change in fair value of equity investments, insurance commission and fee income and mortgage banking revenue, respectively.
Previous report
N/M = Not meaningful.
Previous report
N/A = Not applicable.
Previous report
Noninterest expense for the six months ended June 30, 2024, increased by $7.4 million, or 6.4%, to $123.1 million, compared to $115.6 million for the six months ended June 30, 2023, primarily due to increases of $5.7 million and $1.5 million in salaries and employee benefits and other noninterest expense, respectively.
Previous report
While we continue to experience normalization of our credit metrics within our loan portfolio, the primary increases in our past dues, level of classified, and nonperforming loans for the current quarter resulted from certain questioned activity involving a single banker in our East Texas market. As mentioned previously, in an effort to better understand and measure the extent of the activity, we have been working with our impacted customers in order to identify the amounts that may be owed to us, as well as the amounts that may be owed by us. One of the relationships impacted by this activity filed a lawsuit against the Bank. While this relationship has chosen to file a lawsuit, other relationships have continued to work with us, with certain relationships acknowledging amounts owed and either paying the amounts in full or entering into short-term agreements for repayment. Additionally, we have notified our insurance providers of anticipated claims resulting from this activity, but there is no consideration in this quarter’s financial results of any potential insurance recoveries. Our investigation remains ongoing, and we are also working with an outside forensic accounting firm to confirm the Bank’s identification and reconciliation of the activity. At this time, we believe that any ultimate loss arising from the situation will not be material to our financial position.
Reworded paragraphs (54)
Previous wording
We are a financial holding company headquartered in Ruston, Louisiana. Origin’s wholly owned bank subsidiary, Origin Bank, was founded in 1912 in Choudrant, Louisiana. Deeply rooted in Origin’s history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities it serves. Origin provides a broad range of financial services andcurrently has over 60 locations from Dallas/Fort Worth, East Texas and Houston, across North Louisiana and into Mississippi. Locations in South Alabama and the Florida panhandle are planned for 2024. As a financial holding company operating through one segment, we generate the majority of our revenue from interest earned on loans and investments, service charges and fees on deposit accounts.
Current wording
We are a financial holding company headquartered in Ruston, Louisiana. Origin’s wholly owned bank subsidiary, Origin Bank, was founded in 1912 in Choudrant, Louisiana. Deeply rooted in Origin’s history is a culture committed to providing personalized relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities it serves. Origin provides a broad range of financial services and currently operates more than 60 locations in Dallas/Fort Worth, East Texas, Houston, North Louisiana, Mississippi, South Alabama and the Florida Panhandle. As a financial holding company operating through one segment, we generate the majority of our revenue from interest earned on loans and investments, service charges and fees on deposit accounts.
Previous wording
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.
Current wording
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 and interest-bearing liabilities are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income.
Previous wording
•Total loans held for investment (“LHFI”) were $7.96 billion at June 30, 2024, reflecting an increase of $298.2 million, or 3.9%, compared to December 31, 2023. LHFI, excluding mortgage warehouse lines of credit, were $7.45 billion at June 30, 2024, reflecting an increase of $121.7 million, or 1.7%, compared to December 31, 2023.
Current wording
•Total loans held for investment (“LHFI”) were $7.96 billion at September 30, 2024, reflecting an increase of $295.8 million, or 3.9%, compared to December 31, 2023. LHFI, excluding mortgage warehouse lines of credit, were $7.46 billion at September 30, 2024, reflecting an increase of $130.6 million, or 1.8%, compared to December 31, 2023.
Previous wording
•Total deposits were $8.51 billion at June 30, 2024, reflecting an increase of $259.7 million, or 3.1%, compared to December 31, 2023. Deposits, excluding brokered deposits, were $7.87 billion reflecting an increase of $67.9 million, or 0.9%, compared to December 31, 2023.
Current wording
•Total deposits were $8.49 billion at September 30, 2024, reflecting an increase of $235.4 million, or 2.9%, compared to December 31, 2023. Deposits, excluding brokered deposits, were $8.05 billion reflecting an increase of $248.8 million, or 3.2%, compared to December 31, 2023.
Previous wording
•Noninterest income was $22.5 million for three months ended June 30, 2024, reflecting an increase of $6.8 million, or 43.7%, compared to the three months ended June 30, 2023.
Current wording
•Net interest income was $74.8 million for three months ended September 30, 2024, reflecting an increase of $674,000, or 0.9%, compared to the three months ended September 30, 2023.
Previous wording
•Book value per common share was $35.23 at June 30, 2024, reflecting an increase of $0.93, or 2.7%, compared to December 31, 2023.
Current wording
•Book value per common share was $36.76 at September 30, 2024, reflecting an increase of $2.46, or 7.2%, compared to December 31, 2023.
Previous wording
•At June 30, 2024, and December 31, 2023, Company level common equity Tier 1 capital to risk-weighted assets was 12.15%, and 11.83%, respectively, the Tier 1 leverage ratio was 10.70% and 10.50%, respectively, and the total capital ratio was 15.16% and 15.02%, respectively.
Current wording
•At September 30, 2024, and December 31, 2023, Company level common equity Tier 1 capital to risk-weighted assets was 12.46%, and 11.83%, respectively, the Tier 1 leverage ratio was 10.93% and 10.50%, respectively, and the total capital ratio was 15.45% and 15.02%, respectively.
Previous wording
Our net income decreased $771,000, or 3.5%, to $21.0 million for the three months ended June 30, 2024, from $21.8 million for the three months ended June 30, 2023. On a diluted EPS basis, we reported $0.67 per share for the three months ended June 30, 2024, compared to $0.70 per share for the three months ended June 30, 2023. For the six months ended June 30, 2024, we reported $1.40 diluted EPS per share compared to $1.49 for the six months ended June 30, 2023.
Current wording
Our net income decreased $5.7 million, or 23.5%, to $18.6 million for the three months ended September 30, 2024, from $24.3 million for the three months ended September 30, 2023. On a diluted EPS basis, we reported $0.60 per share for the three months ended September 30, 2024, compared to $0.79 per share for the three months ended September 30, 2023. For the nine months ended September 30, 2024, our net income decreased $8.2 million, or 11.6%, to $62.2 million, from $70.4 million for the nine months ended September 30, 2023. We reported $2.00 diluted EPS per share for the nine months ended September 30, 2024, compared to $2.28 for the nine months ended September 30, 2023.
Previous wording
The quarter and the six months ended June 30, 2024, was impacted by certain questioned activity involving a former banker which was explained in detail in Part I, Item 1, Note 12 — Commitments and Contingencies under Loss Contingencies. These items negatively impacted our diluted EPS by $0.25 for the quarter and $0.26 for the six months ended June 30, 2024.
Current wording
The three and nine months ended September 30, 2024, was impacted by certain questioned activity involving a former banker which was explained in detail in Part I, Item 1, Note 12 — Commitments and Contingencies under Loss Contingencies. These items negatively impacted our diluted EPS by $0.02 and $0.27 for the three and nine months ended September 30, 2024, respectively.
Previous wording
Interest income earned on LHFI increased by $14.4 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, with $7.9 million of the increase attributed to higher yields and $6.6 million due to higher average LHFI balances. Interest income earned on LHFI during the three months ended June 30, 2024, increased in substantially all loan categories when compared to the three months ended June 30, 2023. Interest income earned on real estate loans, commercial and industrial loans and mortgage warehouse lines of credit contributed $10.0 million, $2.7 million and $1.7 million, respectively, when compared to the three months ended June 30, 2023. Increases in interest rates drove $5.2 million, $1.4 million and $1.1 million of the increase in interest income earned on real estate loans, commercial and industrial loans and mortgage warehouse lines of credit, and increases in average loan balances drove $4.8 million and $1.3 million of the increase in interest income earned on real estate loans and commercial and industrial loans for the comparable periods, respectively.
Current wording
Interest income earned on LHFI increased by $11.9 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, with $6.3 million of the increase attributed to higher yields and $5.6 million due to higher average LHFI balances. Interest income earned on LHFI during the three months ended September 30, 2024, increased in substantially all loan categories, when compared to the three months ended September 30, 2023. Interest income earned on real estate loans, commercial and industrial loans and mortgage warehouse lines of credit contributed $6.9 million, $2.5 million and $2.5 million, respectively, when compared to the three months ended September 30, 2023. Increases in interest rates drove $4.2 million and $1.6 million of the increase in interest income earned on real estate loans and commercial and industrial loans, and increases in average loan balances drove $2.8 million and $2.0 million of the increase in interest income earned on real estate loans and mortgage warehouse lines of credit for the comparable periods, respectively. The increase in interest income earned on LHFI was partially offset by a $2.0 million decrease in interest income earned on investment securities, primarily due to our strategic decision to sell available for sale investment securities to pay down FHLB advances during the intervening period.
Previous wording
Interest expense on interest-bearing deposits increased by $18.9 million, with $14.7 million of the increase driven by higher interest rates during the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in interest expense was partially offset by a decrease of $7.4 million due to lower average FHLB advances and other borrowings during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, as a result of a strategic decision to sell available for sale securities to pay down borrowings and fund loan growth during the intervening periods.
Current wording
Interest expense on interest-bearing deposits increased by $11.5 million, with $9.3 million of the increase driven by higher interest rates during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase in interest expense was partially offset by a decrease of $2.7 million due to lower average FHLB advances and other borrowings during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
Previous wording
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 funds target rate range was last changed on July 26, 2023, to 5.25% to 5.50%. In July 2024, the Federal Reserve left the current fed funds rate unchanged at a 23-year high for the eighth consecutive meeting. As we navigate through stabilizing rate conditions, our strategic focus continues to align with offering attractive returns to our depositors while closely monitoring economic indicators and federal funds rate projections for informed decision-making.
Current wording
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 funds target rate range was reduced by 50 basis points on September 18, 2024, to a range of 4.75% to 5.00%, the first rate reduction since early 2020. Prior to this movement, the fed funds rate was at a 23-year high.
Previous wording
Total provision expense increased by $925,000, to $5.2 million for the three months ended June 30, 2024, from $4.3 million for the three months ended June 30, 2023, with $1.2 million attributed to an increase in provision expense for loan credit losses, offset by a $325,000 net benefit provision for off-balance sheet items. The net increase in the provision expense for loan credit losses for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was primarily driven by a $4.1 million provision on impacted relationships mentioned in the Net Interest Income and Net Interest Margin section above, and a $3.2 million provision related to the questioned activity involving the former East Texas banker.
Current wording
Total provision expense increased by $1.1 million, to $4.6 million for the three months ended September 30, 2024, from $3.5 million for the three months ended September 30, 2023, primarily driven by an $1.1 million increase in provision expense for loan credit losses. The net increase in the provision expense for loan credit losses for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was primarily due to increases in provision for loans individually evaluated.
Previous wording
Net charge-offs increased to $2.9 million for the three months ended June 30, 2024, from $1.9 million for the three months ended June 30, 2023, primarily due to an increase of $1.3 million in net charge-offs on commercial and industrial loans. The allowance for loan credit losses (“ALCL”) to nonperforming LHFI was 133.05% at June 30, 2024, compared to 280.74% at June 30, 2023, primarily driven by an increase of $42.2 million in our nonperforming LHFI compared to June 30, 2023, with $33.0 million of the increase primarily driven by five loan relationships, related to or impacted by, the questioned loan activity described above. Net charge-offs to total average LHFI (annualized) increased to 0.15% for the three months ended June 30, 2024, from 0.10% for the three months ended June 30, 2023.
Current wording
Net charge-offs increased to $9.5 million for the three months ended September 30, 2024, from $2.7 million for the three months ended September 30, 2023, primarily due to charge-offs on three commercial and industrial relationships totaling $10.4 million during the three months ended September 30, 2024, which was partially offset by a $1.2 million increase in recoveries. The allowance for loan credit losses (“ALCL”) to nonperforming LHFI was 149.35% at September 30, 2024, compared to 301.12% at September 30, 2023, primarily driven by an increase of $32.7 million in our nonperforming LHFI compared to September 30, 2023, with $32.8 million of the increase primarily driven by five loan relationships, related to or impacted by, the questioned loan activity described in Part I, Item 1, Note 12 — Commitments and Contingencies under Loss Contingencies. Net charge-offs to total average LHFI (annualized) increased to 0.48% for the three months ended September 30, 2024, from 0.14% for the three months ended September 30, 2023, due to higher net charge-offs during the three months ended September 30, 2024.
Previous wording
Change in fair value of equity investments. The increase in change in fair value of equity investments was primarily due to a $5.2 million positive valuation adjustment on a non-marketable equity security during the three months ended June 30, 2024, with no comparable amount realized during the three months ended June 30, 2023.
Current wording
Change in fair value of equity investments. The $10.1 million decrease in change in fair value of equity investments was primarily due to a $10.1 million positive valuation adjustment on a non-marketable equity security that occurred during the three months ended September 30, 2023, with no comparable amount realized during the three months ended September 30, 2024.
Previous wording
Salaries and employee benefits. The $3.6 million increase in salaries and employee benefits expenses was primarily driven by increases of $2.4 million and $739,000, in salary, including deferred loan origination personnel costs, and incentive compensation bonus, respectively. The increase in salary expense was mainly attributed to raises given as a result of our annual salary reviews in March 2024, combined with an increase of 36 full-time equivalent employees to 1,053 at June 30, 2024, from 1,017 at June 30, 2023. The increase in incentive compensation bonus was mainly due to an accrual expense reduction during the three months ended June 30, 2023, with no similar adjustment in the three months ended June 30, 2024 resulting in a higher reported bonus expense.
Current wording
Salaries and employee benefits. The $3.9 million increase in salaries and employee benefits expenses was primarily driven by increases of $1.5 million, $783,000, $751,000 and $606,000 in salary expense, share-based compensation, medical insurance expense and incentive compensation bonus, respectively. The increase in salary expense was mainly attributed to raises given as a result of our annual salary reviews in March 2024, combined with an increase of 12 full-time equivalent employees to 1,049 at September 30, 2024, from 1,037 at September 30, 2023. The increase in share-based compensation was primarily due to quarterly evaluation adjustments on performance stock units to align with payout expectations based on company performance. Medical insurance expense increased as a result of higher insurance premiums combined with higher self-insurance claims during the current period. The increase in incentive compensation bonuses can be attributed primarily to elevated anticipated payouts, driven by a greater focus on meeting deposit objectives. This is evidenced by a larger sum of incentives linked to these deposit goals, alongside an increase in accruals associated with financial targets for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, leading to an increase in bonus expense.
Previous wording
For the three months ended June 30, 2024, we recognized income tax expense of $5.7 million, compared to $6.0 million for the three months ended June 30, 2023. The effective tax rate for both the three months ended June 30, 2024 and the three months ended June 30, 2023 was 21.5%.
Current wording
For the three months ended September 30, 2024, we recognized income tax expense of $5.1 million, compared to $5.8 million for the three months ended September 30, 2023. The effective tax rate for the three months ended September 30, 2024 and the three months ended September 30, 2023 was 21.4% and 19.1%, respectively.
Previous wording
Comparison of Results of Operations for the Three Months Ended June 30, 2024 and 2023
Current wording
Comparison of Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Previous wording
Net interest income for the six months ended June 30, 2024, was $147.2 million, a decrease of $5.2 million, or 3.4%, compared to the six months ended June 30, 2023. The decrease was primarily due to an increase in our total interest expense of $33.3 million, while total interest income increased by $28.0 million, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Current wording
Net interest income for the nine months ended September 30, 2024, was $222.0 million, a decrease of $4.6 million, or 2.0%, compared to the nine months ended September 30, 2023. The decline was primarily due to an increase in our total interest expense of $41.4 million, while total interest income increased by $36.8 million, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Previous wording
Interest expense on interest-bearing deposits increased by $47.2 million, with $36.4 million of the increase driven by higher interest rates during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase in interest expense was partially offset by a decrease of $12.7 million due to lower average FHLB advances and other borrowings during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, as a result of a strategic decision to sell available for sale securities to pay down borrowings and fund loan growth during the intervening period.
Current wording
Interest expense on interest-bearing deposits increased by $58.7 million, with $45.0 million of the increase driven by higher interest rates during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in interest expense was partially offset by a decrease of $15.4 million due to lower average FHLB advances and other borrowings during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, as a result of a strategic decision to sell available for sale securities to pay down borrowings and fund loan growth during the intervening period.
Previous wording
Interest income earned on LHFI during the six months ended June 30, 2024, increased in substantially all loan categories when compared to the six months ended June 30, 2023. Interest income earned on real estate loans, commercial and industrial loans and mortgage warehouse lines of credit contributed $24.3 million, $6.5 million and $4.5 million, respectively, of the $35.2 million total increase in interest income earned on LHFI when compared to the six months ended June 30, 2023. Increases in interest rates and average balances drove $13.1 million and $11.2 million, respectively, of the total increase in interest income earned on real estate loans and increases in interest rates drove $4.2 million and $2.5 million of the increase in interest income earned on commercial and industrial loans and mortgage warehouse lines of credit for the comparable periods, respectively.
Current wording
Interest income earned on LHFI during the nine months ended September 30, 2024, increased in substantially all loan categories when compared to the nine months ended September 30, 2023. Interest income earned on real estate loans, commercial and industrial loans and mortgage warehouse lines of credit contributed $31.3 million, $9.0 million and $6.9 million, respectively, of the $47.1 million total increase in interest income earned on LHFI when compared to the nine months ended September 30, 2023. Increases in interest rates drove $17.2 million, $5.8 million and $3.1 million of the increase in interest income earned on real estate loans, commercial and industrial loans, and mortgage warehouse lines of credit, and increases in average loan balances drove $14.1 million, $3.9 million and $3.2 million of the increase in interest income earned on real estate loans, mortgage warehouse lines of credit and commercial and industrial loans for the comparable periods, respectively.
Previous wording
Additionally, lower average balances in investment securities and interest-bearing deposits in banks during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, led to a decrease of $8.2 million in interest income, as a result of the strategic decisions of selling available for sale securities to pay down borrowings and fund loan growth during the intervening period and holding excess cash for contingency liquidity during the six months ended June 30, 2023.
Current wording
The increase in interest income earned on LHFI was partially offset by lower average balances in investment securities and interest-bearing deposits in banks during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This decline led to a decrease of $11.0 million in interest income and was a result of our strategic decision to sell available for sale securities to pay down borrowings, fund loan growth, and to hold excess cash for contingency liquidity purposes during the nine months ended September 30, 2023.
Previous wording
The NIM-FTE was 3.17% for the three months ended June 30, 2024, a one basis point increase from 3.16% for the three months ended June 30, 2023. There was no impact to the NIM-FTE as a result of purchase accounting accretion income due to the BT Holdings, Inc. (“BTH”) merger for the three months ended June 30, 2024, compared to two basis points for the three months ended June 30, 2023. The primary driver of this margin compression was a 68 basis point increase in the rate paid on interest-bearing liabilities to 3.98% from 3.30% over the same period, compared to just a 54 basis point increase in the yield earned on interest-earning assets to 6.04% from 5.50%. However, as discussed above, had we not experienced the reversal of the $1.2 million of accrued interest during the current quarter, our NIM-FTE would have been 3.22%, reflecting a six basis point increase compared to the three months ended June 30, 2023.
Current wording
The NIM-FTE was 3.18% for the nine months ended September 30, 2024, a six basis point decrease from 3.24% for the nine months ended September 30, 2023. There was no impact to the NIM-FTE as a result of purchase accounting accretion income due to the BTH merger for the nine months ended September 30, 2024, compared to three basis points for the nine months ended September 30, 2023. The primary driver of this margin compression was a 72-basis point increase in the rate paid on interest-bearing liabilities to 3.96% for the nine months ended September 30, 2024, from 3.24% for nine months ended September 30, 2023, compared to just a 54-basis point increase in the yield earned on interest-earning assets to 6.04% from 5.50%.
Previous wording
The NIM-FTE was 3.18% for the six months ended June 30, 2024, an 11 basis point decrease from 3.29% for the six months ended June 30, 2023. There was no impact to the NIM-FTE as a result of purchase accounting accretion income due to the BTH merger for the six months ended June 30, 2024, compared to four basis points for the six months ended June 30, 2023. The primary driver of this margin compression was an 88 basis point increase in the rate paid on interest-bearing liabilities to 3.93% from 3.05% over the same period, compared to just a 60 basis point increase in the yield earned on interest-earning assets to 6.01% from 5.41%. However, as discussed previously in the Comparison of Results of Operations for the Three Months Ended June 30, 2024 and 2023, Net Interest Income and Net Interest Margin section above, the reversal of $1.2 million of accrued interest associated with the impact of the questioned activity drove a three basis point decline in the NIM-FTE. Had we not experienced the reversal of the $1.2 million of accrued interest during the six months ended June 30, 2024, our NIM-FTE would have been 3.21%, reflecting an eight basis point decrease compared to the six months ended June 30, 2023.
Current wording
As discussed previously in the Part I, Item 1, Note 12 — Commitments and Contingencies under Loss Contingencies, the reversal of $1.2 million of accrued interest associated with the impact of the questioned activity drove a two-basis point decline in the NIM-FTE for the nine months ended September 30, 2024. Had we not experienced the reversal of the accrued interest, our NIM-FTE would have been 3.20% for the nine months ended September 30, 2024, reflecting a four basis point decrease compared to the nine months ended September 30, 2023.
Previous wording
The following table presents average consolidated balance sheet information, interest income, interest expense and the corresponding average yields earned, and rates paid for the six months ended June 30, 2024 and 2023.
Current wording
The following table presents average consolidated balance sheet information, interest income, interest expense and the corresponding average yields earned, and rates paid for the nine months ended September 30, 2024 and 2023.
Previous wording
Insurance commission and fee income. The $1.2 million increase in insurance commission and fee income was mainly due to increases in both direct bill commission and contingency income. The increase in direct bill commission was mainly driven by higher commissions from property and casualty insurance. 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 six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Current wording
Insurance commission and fee income. The $1.7 million increase in insurance commission and fee income was mainly due to increases in both direct bill commission and contingency income. The increase in direct bill commission was mainly driven by higher commissions from property and casualty insurance. 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 nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Previous wording
Mortgage banking revenue. The $1.1 million increase in mortgage banking revenue compared to the six months ended June 30, 2023, was primarily due to changes in the mix of our mortgage banking revenue due to the sale of substantially all our MSR assets, combined with the $410,000 gain on sale of MSR, during the six months ended June 30, 2024.
Current wording
Mortgage banking revenue. The $1.4 million increase in mortgage banking revenue compared to the nine months ended September 30, 2023, was primarily due to a $1.5 million increase in gain on sale of loans held for sale combined with the $410,000 gain on sale of MSR, partially offset by a $549,000 decrease in servicing revenue during the nine months ended September 30, 2024.
Previous wording
Change in fair value of equity investments. The increase in change in fair value of equity investments was primarily due to a $5.2 million positive valuation adjustment on a non-marketable equity security during the six months ended June 30, 2024, with no comparable amount realized during the six months ended June 30, 2023.
Current wording
Change in fair value of equity investments. The decrease in change in fair value of equity investments was primarily due to a $5.2 million positive valuation adjustment on a non-marketable equity security during the nine months ended September 30, 2024, which was more than offset by a $10.1 million positive valuation adjustment on a non-marketable equity security that occurred during the nine months ended September 30, 2023.
Previous wording
Salaries and employee benefits. The $5.7 million increase in salaries and employee benefits expenses was primarily driven by increases of $3.8 million and $1.2 million, and $576,000 in salary, stock incentive compensation, and medical self-insurance expenses, respectively. The increase in salary expense was mainly attributed to raises given as a result of our annual salary reviews in March 2024 and March 2023, combined with an increase of 36 full-time equivalent employees to 1,053 at June 30, 2024, from 1,017 at June 30, 2023. The increase in stock incentive compensation expense was primarily attributed to an update in performance assumptions and new awards granted during the six months ended June 30, 2024.
Current wording
Salaries and employee benefits. The $9.5 million increase in salaries and employee benefits expenses was primarily driven by increases of $5.3 million, $2.0 million, and $1.3 million and $1.1 million in salary expense, share-based compensation, medical insurance expenses and incentive compensation bonus, respectively. The increase in salary expense was mainly attributed to raises given as a result of our annual salary reviews in March 2024 and March 2023, combined with an increase of 12 full-time equivalent employees to 1,049 at September 30, 2024, from 1,037 at September 30, 2023. The increase in share-based compensation was primarily due to quarterly evaluation adjustments on performance stock units to align with payout expectations based on company performance. Medical insurance expense increased as a result of higher insurance premiums combined with higher self-insurance claims during the current period. The increase in incentive compensation bonuses can be attributed primarily to elevated anticipated payouts, driven by a greater focus on meeting deposit objectives. This is evidenced by a larger sum of incentives linked to these deposit goals, alongside an increase in accruals associated with financial targets for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Previous wording
Other noninterest expenses. The increase in other noninterest expense resulted from recognizing a contingent liability associated with certain questioned activity involving a single banker in one of our East Texas markets totaling approximately $1.2 million.
Current wording
Other expense. The increase in other expense resulted from recognizing a contingent liability associated with certain questioned activity involving a single banker in one of our East Texas markets totaling approximately $1.2 million for the nine months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2024, we recognized income tax expense of $12.0 million, compared to $12.2 million for the six months ended June 30, 2023. Our effective tax rate was 21.5% for the six months ended June 30, 2024, compared to 21.0% for the six months ended June 30, 2023.
Current wording
For the nine months ended September 30, 2024, we recognized income tax expense of $17.0 million, compared to $18.0 million for the nine months ended September 30, 2023. Our effective tax rate was 21.5% for the nine months ended September 30, 2024, compared to 20.4% for the nine months ended September 30, 2023.
Previous wording
Total assets increased by $224.6 million, or 2.3%, to $9.95 billion at June 30, 2024, from $9.72 billion at December 31, 2023. The increase in total assets is primarily due to an increase of $298.2 million, or 3.9%, in our loans held for investment (“LHFI”). LHFI were $7.96 billion at June 30, 2024, compared to $7.66 billion at December 31, 2023. Also contributing to the increase was a $23.3 million increase, or 12.6%, in accrued interest receivable and other assets reflecting a balance of $208.6 million at June 30, 2024, compared to $185.3 million at December 31, 2023. These increases were partially offset by decreases of $93.6 million and $15.6 million in available for sale securities and mortgage servicing rights, respectively. Available for sale securities and mortgage servicing rights were $1.16 billion and zero at June 30, 2024, respectively, compared to $1.25 billion and $15.6 million at December 31, 2023, respectively.
Current wording
Total assets increased by $243.4 million, or 2.5%, to $9.97 billion at September 30, 2024, from $9.72 billion at December 31, 2023. The increase in total assets is primarily due to increases of $295.8 million and $40.8 million in our LHFI and cash and cash equivalents, respectively. These increases were partially offset by a decrease of $92.7 million in available for sale securities. LHFI were $7.96 billion at September 30, 2024, an increase of 3.9%, compared to $7.66 billion at December 31, 2023. Cash and cash equivalents increased to $321.2 million, an increase of 14.5%, at September 30, 2024, compared to $280.4 million at December 31, 2023. Available for sale securities declined to $1.16 billion, reflecting a 7.4% decrease, at September 30, 2024, compared to $1.25 billion at December 31, 2023.
Previous wording
Total deposits increased by $259.7 million, or 3.1%, to $8.51 billion at June 30, 2024, from $8.25 billion at December 31, 2023, primarily due to increases of $191.8 million and $114.6 million in brokered deposits and money market deposits, respectively. These increases were partially offset by a decrease of $67.2 million in interest-bearing demand deposits. The increase in total deposits was partially offset by decreases in Federal Home Loan Bank advances, repurchase obligations and other borrowings of $42.9 million, or 51.3%, to $40.7 million at June 30, 2024, from $83.6 million at December 31, 2023.
Current wording
Total deposits increased by $235.4 million, or 2.9%, to $8.49 billion at September 30, 2024, from $8.25 billion at December 31, 2023, primarily due to increases of $201.6 million and $55.4 million in money market and time deposits, respectively. These increases were partially offset by a decrease of $25.9 million in noninterest-bearing demand deposits. The increase in total deposits was partially offset by decreases in Federal Home Loan Bank advances, repurchase agreements and other borrowings of $53.2 million, or 63.6%, to $30.4 million at September 30, 2024, from $83.6 million at December 31, 2023.
Previous wording
Our loan portfolio is our largest category of interest-earning assets, and interest income earned on our loan portfolio is our primary source of income. At June 30, 2024, 76.8% 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.
Current wording
Our loan portfolio is our largest category of interest-earning assets, and interest income earned on our loan portfolio is our primary source of income. At September 30, 2024, 76.5% 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.
Previous wording
(1)Includes owner-occupied CRE of $959.9 million and $953.8 million at June 30, 2024 and December 31, 2023, respectively.
Current wording
(1)Includes owner-occupied CRE of $991.7 million and $953.8 million at September 30, 2024 and December 31, 2023, respectively.
Previous wording
At June 30, 2024, total LHFI were $7.96 billion, an increase of $298.2 million, or 3.9%, compared to $7.66 billion at December 31, 2023. The increase was primarily driven by loan growth of $176.5 million, $84.3 million and $80.3 million in mortgage warehouse lines of credit loans, residential real estate, and CRE, respectively. Total LHFI at June 30, 2024, excluding mortgage warehouse lines of credit, were $7.45 billion, reflecting an increase of $121.7 million, or 1.7%, compared to December 31, 2023.
Current wording
At September 30, 2024, total LHFI were $7.96 billion, an increase of $295.8 million, or 3.9%, compared to $7.66 billion at December 31, 2023. The increase was primarily driven by loan growth of $165.2 million, $113.4 million and $82.0 million in mortgage warehouse lines of credit loans, residential real estate, and CRE, respectively. These increases were offset by a decrease of $78.7 million in construction/land/land development loans. Total LHFI at September 30, 2024, excluding mortgage warehouse lines of credit, were $7.46 billion, reflecting an increase of $130.6 million, or 1.8%, compared to December 31, 2023.
Previous wording
A significant portion, 31.6%, of our LHFI portfolio at June 30, 2024, consisted of CRE loans secured by real estate properties. 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.
Current wording
A significant portion, 31.7%, of our LHFI portfolio at September 30, 2024, consisted of CRE loans secured by real estate properties. 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.
Previous wording
Purchased loans that have experienced more than insignificant credit deterioration since origination are purchased credit deteriorated (“PCD”) loans. The Company evaluates acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) nonaccrual status; (2) borrowers are experiencing financial difficulty which results in modification to the loan terms; (3) risk ratings of special mention, substandard or doubtful; (4) watchlist credits; and (5) delinquency status, including loans that are current on merger/acquisition date, but had previously been 60 days delinquent twice. 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 $28.1 million of unpaid principal balance PCD loans at June 30, 2024, and $34.8 million of unpaid principal balance PCD loans at December 31, 2023.
Current wording
Purchased loans that have experienced more than insignificant credit deterioration since origination are purchased credit deteriorated (“PCD”) loans. The Company evaluates acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) nonaccrual status; (2) borrowers are experiencing financial difficulty which results in modification to the loan terms; (3) risk ratings of special mention, substandard or doubtful; (4) watchlist credits; and (5) delinquency status, including loans that are current on merger/acquisition date, but had previously been 60 days delinquent twice. 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 $25.0 million of unpaid principal balance PCD loans at September 30, 2024, and $34.8 million of unpaid principal balance PCD loans at December 31, 2023.
Previous wording
Nonperforming LHFI increased $45.7 million at June 30, 2024, compared to December 31, 2023, and nonperforming LHFI to LHFI increased to 0.95% compared to 0.39%. The $45.7 million increase in non-performing loans was primarily driven by $33.0 million, or five loan relationships, related to the questioned loan activity mentioned above. Please see Note 4 — Loans to our consolidated financial statements contained in Part I, Item 1 of this report for more information on nonperforming loans.
Current wording
Nonperforming LHFI increased $34.2 million at September 30, 2024, compared to December 31, 2023, and nonperforming LHFI to LHFI increased to 0.81% compared to 0.39%. The $34.2 million increase in non-performing loans was primarily driven by $32.8 million, or five loan relationships, related to, or impacted by, the questioned loan activity mentioned above. Please see Note 4 — Loans to our consolidated financial statements contained in Part I, Item 1 of this report for more information on nonperforming loans.
Previous wording
The ALCL to nonperforming LHFI decreased to 133.05% at June 30, 2024, compared to 321.66% at December 31, 2023, primarily driven by an increase of $45.7 million in the Company’s nonperforming LHFI as explained in the preceding Nonperforming Assets section, offset by an increase of $4.0 million in the ALCL during the six months ended June 30, 2024.
Current wording
The ALCL to nonperforming LHFI decreased to 149.35% at September 30, 2024, compared to 321.66% at December 31, 2023, primarily driven by an increase of $34.2 million in the Company’s nonperforming LHFI as explained in the preceding Nonperforming Assets section, during the nine months ended September 30, 2024.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Net interest income for the three months ended June 30, 2024, was $73.9 million, a decrease of $1.4 million, or 1.9%, compared to the three months ended June 30, 2023. The decrease was primarily due to an increase in our total interest expense of $10.9 million, while total interest income increased by $9.5 million during the three months ended June 30, 2024, compared to three months ended June 30, 2023.
Previous report — wording carried elsewhere
Other noninterest expenses. The increase in other noninterest expense resulted from recognizing a contingent liability associated with the previously discussed questioned activity involving a single banker in one of our East Texas markets totaling approximately $1.2 million.
Previous report — wording carried elsewhere
Net Interest Income and Net Interest Margin