Origin Bancorp, Inc.
For the period ended Mar 31, 2025. Filed May 7, 2025.
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.
Mar 31, 2025 · Filed May 7, 2025
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 2024-09-30; filed 2024-11-06.
0001516912-24-000117
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001516912-25-000081
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 165 previous paragraphs and 145 current paragraphs.
79 unchanged; 31 reworded; 35 added; 48 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 16 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 (35)
Current report
In January 2025, we announced our initiative to drive elite financial performance and enhance our award-winning culture.
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•Built on three primary pillars:
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◦Productivity, Delivery & Efficiency
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◦Balance Sheet Optimization
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◦Culture & Employee Engagement
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•Established near term target of greater than a 1% return on average assets (“ROAA”) run rate by the fourth quarter of 2025 and an ultimate target of top quartile ROAA.
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•Near term target is being achieved in part by branch consolidation, headcount reduction, securities optimization, capital optimization, cash/liquidity management, mortgage restructuring, as well as other opportunistic efficiency optimizations throughout the organization.
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•We believe the actions we have taken will drive earnings improvement of approximately $23.4 million annually on a pre-tax pre-provision basis.
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2025 First Quarter Highlights
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•Our fully tax equivalent net interest margin (“NIM-FTE”) increased 25 basis points for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. This expansion was driven primarily by a 58 basis point reduction in rates paid on interest-bearing liabilities, offset by a 20 basis point decline in our yield earned on interest-earning assets.
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•Total loans held for investment (“LHFI”) were $7.59 billion at March 31, 2025, reflecting an increase of $11.8 million, or 0.2%, compared to December 31, 2024.
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•Total subordinated debentures at March 31, 2025, were $89.6 million, a decrease of $70.3 million, or 44.0%, from $159.9 million at December 31, 2024.
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•Stockholders’ equity was $1.18 billion at March 31, 2025, reflecting an increase of $34.9 million, or 3.1%, compared to December 31, 2024.
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Interest expense on total interest-bearing deposits decreased by $11.1 million, with $8.9 million of the decrease attributable to lower interest rates, which excludes the day count impact, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The average rate on interest-bearing deposits declined 62 basis points to 3.23% for the three months ended March 31, 2025, from 3.85% for the three months ended March 31, 2024.
Current report
Interest income earned on LHFI decreased by $10.1 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, with $5.8 million, $3.0 million and $1.3 million due to lower average LHFI balances, lower yields and one less calendar day. Decreases in average loan balances accounted for $3.1 million and $2.3 million of the decrease in interest income earned on real estate loans and commercial and industrial loans for the comparable periods, respectively. Decreases in interest rates drove $2.5 million of the decrease in interest income earned on commercial and industrial loans. The decrease in interest income earned on LHFI was partially offset by increases of $2.8 million and $1.3 million in interest income earned on interest-earning balances due from banks and investment securities. The $2.8 million increase in interest income on interest-earning balances due from banks was primarily driven by a $4.0 million increase in the average balances, partially offset by a $1.2 million decrease in interest income due to yield. The increase in interest income earned on investment securities was primarily driven by the bond portfolio optimization strategy we executed during the quarter ended December 31, 2024, in which we replaced securities with a total book value of $188.2 million and a weighted average yield of 1.51% with new security purchases totaling $173.7 million with a weighted average yield of 5.22%.
Current report
The NIM-FTE was 3.44% for the three months ended March 31, 2025, a 25-basis point increase from 3.19% for the three months ended March 31, 2024. The improvement was mainly driven by a wider interest rate spread, as the 58-basis-point decline in the average rate on total interest-bearing liabilities exceeded the 20-basis-point decline in the yield earned on interest-earning assets for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The average rate on total interest-bearing liabilities for the three months ended March 31, 2025, was 3.30%, compared to 3.88% for the three months ended March 31, 2024. The average yield earned on total interest-earning assets for the three months ended March 31, 2025, was 5.79%, compared to 5.99% for the three months ended March 31, 2024.
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Noninterest income for the three months ended March 31, 2025, decreased by $1.7 million, or 9.6%, to $15.6 million, compared to $17.3 million for the three months ended March 31, 2024, primarily due to a decrease of $1.8 million and $1.5 million in limited partnership investment (loss) income and mortgage banking revenue, respectively. These decreases were partially offset by an increase of $497,000 in other income.
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Limited partnership investment (loss) income. The $1.8 million decrease in limited partnership investment (loss) income was primarily due to $1.6 million in fair value adjustments on multiple limited partnership investments during the three months ended March 31, 2025, with no comparable amount realized during the three months ended March 31, 2024.
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Mortgage banking revenue. The $1.5 million decrease in mortgage banking revenue was primarily due to decreases of $654,000, $450,000 and $410,000 in servicing revenue, MSR asset valuation adjustments, net and gain on sale of MSR asset, respectively, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. These decreases were offset by an increase of $479,000 in MSR asset hedge impact. Majority of these drivers are primarily due the sale of substantially all of our MSR asset during the three months ended March 31, 2024.
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Other income. The $497,000 increase in other income was primarily due to increases of $687,000 and $159,000 in miscellaneous and bank owned life insurance (“BOLI”) income, respectively. The increase in miscellaneous income was primarily driven by a $444,000 expected insurance settlement recovery on vandalized other real estate owned and $213,000 in interest received related to the employee retention credit that was recorded during the year ended December 31, 2024. The increase in BOLI was primarily due to a $208,000 life insurance payout. These increases were offset by a $572,000 write down of other real estate owned, primarily the aforementioned vandalized property, during the current quarter.
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Noninterest expense for the three months ended March 31, 2025, increased by $3.4 million, or 5.7%, to $62.1 million, compared to $58.7 million for the three months ended March 31, 2024, primarily due to increases of $1.9 million in both salaries and employee benefits and net occupancy and equipment expenses, respectively, and an increase of $470,000 in office and operations expense. These increases were partially offset by decreases of $376,000, $342,000, $311,000 and $306,000 in intangible asset amortization, regulatory assessments, advertising and marketing and loan-related expenses, respectively.
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Salaries and employee benefits. The $1.9 million increase in salaries and employee benefits expenses was primarily due to an increase of $1.3 million in incentive compensation bonuses for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Also contributing to the increase were our annual merit increases and a $314,000 increase in medical costs.
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Occupancy and equipment, net. The $1.9 million increase in occupancy and equipment, net expense was primarily due to a $1.5 million increase in expense associated with the accounting for our strategic profitability initiative which included the consolidation of eight banking centers, six of which closed during the three months ended March 31, 2025. Also contributing to the increase was higher depreciation expense related to normal furniture, fixtures, and equipment purchases.
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Office and operations. The $470,000 increase in office and operations expense was primarily due to an increase of $328,000 in check and card fraud and card disputes primarily due to larger volume of transactions during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
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Regulatory assessments. The $342,000 decrease in regulatory assessments was driven primarily by our improved risk-based pricing loan mix adjustment during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
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Advertising and marketing. The $311,000 decrease in advertising and marketing expenses was primarily due to a decrease of $190,000 in sponsorships and marketing agencies expenses, respectively, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
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Loan-related expenses. The $306,000 decrease in loan-related expenses was primarily due to a decrease of $231,000 in loan subservicing costs during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the sale of the majority of our MSR during 2024.
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Total assets increased by $71.7 million, or 0.7%, to $9.75 billion at March 31, 2025, from $9.68 billion at December 31, 2024. The increase in total assets is primarily due to the increase of $58.8 million in available for sale securities, as our deposit growth outpaced our loan growth this quarter.
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Total liabilities increased by $36.7 million, or 0.4%, to $8.57 billion at March 31, 2025, from $8.53 billion at December 31, 2024. Total deposits increased by $115.3 million, or 1.4%, to $8.34 billion at March 31, 2025, from $8.22 billion at December 31, 2024, primarily due to an increase of $278.9 million in money market deposits, which was partially offset by decreases of $78.0 million and $67.1 million in time deposits (excluding brokered time deposits) and interest-bearing demand deposits, respectively. Subordinated debentures decreased $70.3 million, or 44.0%, to $89.6 million at March 31, 2025, from $159.9 million at December 31, 2024, as we redeemed eligible subordinated debentures as part of Optimize Origin.
Current report
As explained in detail in Part I, Note 12 — Commitments and Contingencies under Loss Contingencies, and as discussed in previous filings, our classified and nonperforming LHFI were negatively impacted beginning in the second quarter of 2024 as a result of litigation against the bank brought in response to certain questioned activity involving a former banker in our East Texas market. We continue to work toward a resolution in this matter.
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The steep incline in the interest rate environment over the last several years driven by the FRB’s federal funds rate setting policy, as outlined in the Results of Operations section above, has negatively impacted borrowers with variable or floating rate loans causing their cost of borrowings to increase significantly since mid-2022. This has put pressure on borrower’s cash flow and contributed to higher overall nonperforming loans at March 31, 2025, compared to December 31, 2024. In addition, there is increased risk in our portfolio at March 31, 2025, compared to December 31, 2024, due to the recent economic events.
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(1)Represents the ratio of each loan type to total LHFI.
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The estimated total amount of uninsured deposits at March 31, 2025, and December 31, 2024, was $3.72 billion and $3.66 billion, respectively, including $822.0 million and $862.9 million in public fund deposits collateralized by pledges assets, respectively.
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Total subordinated debentures at March 31, 2025, were $89.6 million, a decrease of $70.3 million, or 44.0%, from $159.9 million at December 31, 2024. The decrease was due to the redemption of $70.0 million in subordinated debentures in conjunction with our Optimize Origin initiative, as forecasted in our fourth quarter 2024 investor presentation. We recognized $681,000 of accelerated amortization of original issue discount related to the redemption during the current quarter. Based upon our forecast, the repurchase is expected to result in approximately $2.1 million in annualized future net interest expense savings.
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Please see Note 7 — Borrowings to our consolidated financial statements contained in Part I, Item 1 of this report for more information on the redemption of the subordinated debentures.
Removed paragraphs (48)
Previous report
2024 Third Quarter Highlights
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•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.
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•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.
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•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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Income Tax Expense
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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.
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Comparison of Results of Operations for the Nine Months Ended September 30, 2024 and 2023
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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.
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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.
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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.
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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.
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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 report
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.
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Rate/Volume Analysis
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Provision for Credit Losses
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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.
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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.
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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.
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Noninterest Income
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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.
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(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.
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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.
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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.
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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.
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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.
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Noninterest Expense
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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
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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.
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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.
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Reworded paragraphs (31)
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 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.
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 55 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
We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize the income generated from interest-earning assets and minimize expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans, securities and interest-bearing cash, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
Current wording
We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize the income generated from interest-earning assets and minimize expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans, securities and interest-earning cash, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
Previous 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.
Current wording
•Net interest income was $78.5 million for three months ended March 31, 2025, reflecting an increase of $5.1 million, or 7.0%, compared to the three months ended March 31, 2024.
Previous 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.
Current wording
•Total deposits were $8.34 billion at March 31, 2025, reflecting an increase of $115.3 million, or 1.4%, compared to December 31, 2024. Deposits, excluding brokered deposits, were $8.29 billion, reflecting an increase of $145.5 million, or 1.8%, compared to December 31, 2024.
Previous 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.
Current wording
•Book value per common share was $37.77 at March 31, 2025, reflecting an increase of $1.06, or 2.9%, compared to December 31, 2024.
Previous 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.
Current wording
Our net income decreased $221,000, or 1.0%, to $22.4 million for the three months ended March 31, 2025, from $22.6 million for the three months ended March 31, 2024. On a diluted EPS basis, we reported $0.71 per share for the three months ended March 31, 2025, compared to $0.73 per share for the three months ended March 31, 2024.
Previous wording
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 wording
Net interest income for the three months ended March 31, 2025, was $78.5 million, an increase of $5.1 million, or 7.0%, compared to the three months ended March 31, 2024. The increase was primarily due to an $11.3 million decrease in interest expense, partially offset by a $6.2 million decrease in total interest income during the three months ended March 31, 2025, compared to three months ended March 31, 2024.
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 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.
Current wording
The Federal Reserve Board (“FRB”) sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions. 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. Subsequent reductions in November and December 2024 resulted in a range of 4.25% to 4.50% as of December 31, 2024. The Federal Reserve maintained this target range throughout the first quarter of 2025. In total, the federal funds target range has decreased 100 basis points from its recent cycle high.
Previous wording
The provision for credit losses, which includes the provisions for loan credit losses, off-balance sheet commitments credit losses and security credit losses, is based on management’s assessment of the adequacy of our allowance for credit losses (“ACL”) for loans, securities, and our reserve for off-balance-sheet lending commitments. Factors impacting the provision include inherent risk characteristics in our loan portfolio, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of the change in collateral values, reasonable and supportable forecasts, and the funding probability on unfunded lending commitments. The provision for credit losses is charged against earnings in order to maintain our ACL, which reflects management’s best estimate of the life of loan credit losses inherent in our loan portfolio at the balance sheet date, and our reserve for off-balance-sheet lending commitments, which reflects management’s best estimate of losses inherent in our legally binding lending-related commitments. The allowance is increased by the provision for loan credit losses and decreased by charge-offs, net of recoveries.
Current wording
The provision for credit losses, which includes the provisions for loan credit losses, off-balance sheet commitments credit losses and security credit losses, is based on management’s assessment of the adequacy of our allowance for credit losses (“ACL”) for loans, securities, and our reserve for off-balance-sheet lending commitments. Factors impacting the provision include inherent risk characteristics in our loan and security portfolios, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of the change in collateral values, reasonable and supportable forecasts, and the funding probability on unfunded lending commitments. The provision for credit losses is charged against earnings in order to maintain our ACL, which reflects management’s best estimate of the life of loan/investment security credit losses inherent in our loan/security portfolios at the balance sheet date, and our reserve for off-balance-sheet lending commitments, which reflects management’s best estimate of losses inherent in our legally binding lending-related commitments. The allowance is increased by the provision for loan credit losses and decreased by charge-offs, net of recoveries.
Previous 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.
Current wording
Total provision expense increased by $432,000, to $3.4 million for the three months ended March 31, 2025, from $3.0 million for the three months ended March 31, 2024, primarily driven by an $805,000 increase in provisions expense for off balance sheet items, partially offset by a $410,000 decrease in provision expense for loan credit losses. The increase in provision expense for off balance sheet items was primarily due to a $1.0 million release of provision recorded during the three months ended March 31, 2024. The net decrease in the provision expense for loan credit losses for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to changes in the provision for loans individually evaluated, resulting in lower reserves on individually evaluated loans, exclusive of the change in net charge-offs embedded in the ALCL.
Previous 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.
Current wording
Net charge-offs increased $146,000, to $2.7 million for the three months ended March 31, 2025, from $2.6 million for the three months ended March 31, 2024. The allowance for loan credit losses (“ALCL”) to nonperforming LHFI was 113.08% at March 31, 2025, compared to 243.27% at March 31, 2024, primarily driven by an increase of $40.9 million in our nonperforming LHFI compared to March 31, 2024, with $28.7 million of the increase primarily driven 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 0.15% for the three months ended March 31, 2025, from 0.13% for the three months ended March 31, 2024, due to slightly higher net charge-offs during the three months ended March 31, 2025.
Previous wording
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 wording
Intangible asset amortization. The $376,000 decrease in intangible asset amortization was primarily due to the accelerated amortization method used to measure the amortization expense of the assets, as well as certain intangible assets that were fully amortized during 2024.
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 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.
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 March 31, 2025, 73.9% 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 75.2% at December 31, 2024.
Previous wording
(1)Includes owner-occupied CRE of $991.7 million and $953.8 million at September 30, 2024 and December 31, 2023, respectively.
Current wording
(1)Includes owner-occupied CRE of $938.0 million and $975.9 million at March 31, 2025 and December 31, 2024, respectively.
Previous 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.
Current wording
At March 31, 2025, total LHFI were $7.59 billion, an increase of $11.8 million, or 0.2%, compared to $7.57 billion at December 31, 2024. The increase was primarily driven by growth of $97.4 million and $55.1 million in residential real estate loans and mortgage warehouse lines of credit, respectively. This was partially offset by decreases of $93.6 million and $65.4 million in CRE loans and construction/land/land development loans, respectively. Total LHFI at March 31, 2025, excluding mortgage warehouse lines of credit, were $7.18 billion, reflecting a decrease of $43.2 million, or 0.6%, compared to December 31, 2024.
Previous 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.
Current wording
A significant portion, 31.4%, of our LHFI portfolio at March 31, 2025, 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 $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.
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 $8.0 million of unpaid principal balance PCD loans at March 31, 2025, and $12.3 million of unpaid principal balance PCD loans at December 31, 2024.
Previous 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.
Current wording
Nonperforming LHFI increased $6.4 million at March 31, 2025, compared to December 31, 2024, and nonperforming LHFI to LHFI increased to 1.07% compared to 0.99%. The increase in nonperforming loans was primarily driven by two loan relationships totaling $8.2 million at March 31, 2025, with residential real estate loans totaling $5.1 million of the increase. The increase in nonperforming loans was partially offset by one residential real estate loan relationship totaling $2.1 million that paid off during the current quarter but was considered nonperforming at December 31, 2024. 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 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.
Current wording
The ALCL to nonperforming LHFI decreased to 113.08% at March 31, 2025, compared to 121.41% at December 31, 2024, primarily driven by an increase of $6.4 million in the Company’s nonperforming LHFI as explained in the preceding Nonperforming Assets section, during the three months ended March 31, 2025.
Previous wording
Our securities portfolio totaled $1.18 billion at September 30, 2024, representing a decrease of $93.5 million, or 7.3%, from $1.27 billion at December 31, 2023. The decrease was primarily due to sales, maturities and calls, as well as normal principal paydowns during the nine months ended September 30, 2024.
Current wording
Our securities portfolio totaled $1.18 billion at March 31, 2025, representing an increase of $58.8 million, or 5.3%, from $1.12 billion at December 31, 2024. The increase was primarily driven by new purchases, along with an improvement in the unrealized loss position, partially offset by normal principal paydowns, maturities and calls during the three months ended March 31, 2025.
Previous wording
Our available for sale portfolio totaled $1.16 billion at September 30, 2024, and represented 98.5% of our total security portfolio and is comprised of 49.6% mortgage-backed, 24.9% municipal, 14.7% collateralized mortgage obligations, 6.9% corporate and 3.9% treasury/agency securities. Our available for sale portfolio totaled $1.25 billion at December 31, 2023, and represented 98.6% of our total security portfolio and is comprised of 47.8% mortgage-backed, 22.5% municipal, 13.2% collateralized mortgage obligations, 10.1% corporate/asset-backed and 6.4% treasury/agency securities.
Current wording
Our available for sale portfolio totaled $1.16 billion at March 31, 2025, and represented 98.5% of our total security portfolio and is comprised of 54.4% mortgage-backed, 22.1% municipal, 15.8% collateralized mortgage obligations, 6.6% corporate and 1.1% treasury/agency securities. Our available for sale portfolio totaled $1.10 billion at December 31, 2024, and represented 98.4% of our total security portfolio and is comprised of 53.0% mortgage-backed, 23.2% municipal, 15.4% collateralized mortgage obligations, 7.1% corporate/asset-backed and 1.3% treasury/agency securities.
Previous wording
The securities portfolio had a weighted average effective duration of 4.21 years at September 30, 2024, compared to 4.28 years at December 31, 2023. For additional information regarding our securities portfolio, please see Note 3 — Securities in the condensed notes to our consolidated financial statements contained in Part I, Item 1 of this report.
Current wording
The securities portfolio had a weighted average effective duration of 4.10 years at March 31, 2025, compared to 4.46 years at December 31, 2024. For additional information regarding our securities portfolio, please see Note 3 — Securities in the condensed notes to our consolidated financial statements contained in Part I, Item 1 of this report.
Previous wording
Total deposits increased at September 30, 2024, compared to December 31, 2023, primarily due to increases of $201.6 million, $55.4 million and $20.5 million in money market, time and savings deposits, respectively, and partially offset by a decrease of $25.9 million in noninterest-bearing demand deposits. Typically, higher interest rates and sustained inflation will cause customers to move liquid asset balances into higher interest-earning vehicles such as money market funds.
Current wording
Total deposits increased at March 31, 2025, compared to December 31, 2024, with an increase of $278.9 million in money market deposits, offset by decreases in all remaining categories, including reductions of $78.0 million, $67.1 million and $30.2 million in time deposits, interest-bearing demand, and brokered deposits, respectively. Typically, higher market interest rates and sustained inflation will cause customers to move liquid asset balances into higher interest-earning vehicles such as money market funds.
Previous wording
(1)At September 30, 2024, brokered deposits included brokered time deposits and brokered interest-bearing demand of $331.3 million and $100.3 million, respectively. At December 31, 2023, brokered deposits included brokered time deposits of $445.0 million.
Current wording
(1)At March 31, 2025, brokered deposits included brokered time deposits of $50.0 million. At December 31, 2024, brokered deposits included brokered time deposits and brokered interest-bearing demand of $80.0 million and $236,000, respectively.
Previous wording
(1)Average brokered deposits include average brokered time deposits and average brokered interest-bearing demand of $510.4 million and $61.0 million, respectively, for the nine months ended September 30, 2024. Average brokered deposits included average brokered time deposits of $431.7 million for the nine months ended September 30, 2023.
Current wording
(1)Average brokered deposits include average brokered time deposits and average brokered interest-bearing demand of $60.1 million and $3,000, respectively, for the three months ended March 31, 2025. Average brokered deposits included average brokered time deposits of $559.9 million and for the three months ended March 31, 2024.
Previous wording
Our average deposit balance was $8.50 billion for the nine months ended September 30, 2024, an increase of $257.0 million, or 3.1%, from $8.24 billion for the nine months ended September 30, 2023. The average annualized rate paid on our interest-bearing deposits for the nine months ended September 30, 2024, was 3.94%, compared to 3.03% for the nine months ended September 30, 2023.
Current wording
Our average deposit balances were $8.35 billion for the three months ended March 31, 2025, a decrease of $91.4 million, or 1.1%, from $8.44 billion for the three months ended March 31, 2024. The average rate paid on our interest-bearing deposits for the three months ended March 31, 2025, was 3.23%, compared to 3.85% for the three months ended March 31, 2024.
Previous wording
The increase in the average cost of our deposits was primarily the result of the rapidly rising interest rate environment experienced since March 2022, when the Federal Reserve Board started a series of eleven federal funds target range rate increases cumulating in a 525-basis point increase to a target range of 5.25% to 5.50%. More recently, in September 2024, the Federal Reserve Board cut the federal funds target range rate 50 basis points from a 23-year high of 5.25% to 5.50% to 4.75% to 5.00%.
Current wording
The decrease in the average cost of our deposits was primarily the result of the recent FRB cuts in the federal funds target rate range beginning in the third and fourth quarters of 2024. The FRB reduced the federal funds target rate range three times by a total of 100 basis points from a 23-year high of 5.25% to 5.50% to 4.25% to 4.50%.
Previous wording
Average noninterest-bearing deposits during the nine months ended September 30, 2024, were $1.87 billion, compared to $2.21 billion at September 30, 2023, a decrease of $335.5 million, or 15.2%, and represented 22.0% and 26.8% of average total deposits for the nine months ended September 30, 2024 and 2023, respectively. Noninterest-bearing deposits have been impacted by the higher interest rate environment, as customers have been moving out of noninterest-bearing deposit balances into higher interest-earning investments, however, this trend has been slowing as rates begin to stabilize.
Current wording
Average noninterest-bearing deposits during the three months ended March 31, 2025, were $1.84 billion, compared to $1.87 billion at March 31, 2024, a decrease of $29.1 million, or 1.6%, and represented 22.0% and 22.1% of average total deposits for the three months ended March 31, 2025 and 2024, respectively. Noninterest-bearing deposits have been impacted by the recent higher interest rate environment, as customers moved out of noninterest-bearing deposit balances into higher interest-earning investments, however, this trend changed direction during the quarter ended September 30, 2024, as rates began to stabilize.
Previous wording
At September 30, 2024 and December 31, 2023, we were eligible to borrow an additional $2.11 billion and $2.01 billion, respectively, from the FHLB.
Current wording
We were eligible to borrow an additional $2.15 billion from the FHLB at both March 31, 2025 and December 31, 2024.
Previous wording
The Company, which is a separate legal entity apart from the Bank, must provide for its own liquidity, including payment of any dividends that may be declared for its common stockholders and interest and principal on any outstanding debt or trust preferred securities incurred by the Company. The cash held at the holding Company is available for general corporate purposes described above, as well as providing capital support to the Bank. In addition, at September 30, 2024, and December 31, 2023, the Company had a line of credit under the terms of which the loan amount shall not exceed an aggregate principal balance of $100 million, consisting of an initial $50 million extension of credit and any one or more potential incremental revolving loan amounts that the lender may make in its sole discretion, up to an aggregate principal of $50 million, upon the request of the Company.
Current wording
The Company, which is a separate legal entity apart from the Bank, must provide for its own liquidity, including payment of any dividends that may be declared for its common stockholders and interest and principal on any outstanding debt or trust preferred securities incurred by the Company. The cash held at the holding company is available for general corporate purposes described above, as well as providing capital support to the Bank.
Previous wording
Additionally, at September 30, 2024, we had the ability to borrow $1.40 billion from the discount window at the Federal Reserve Bank of Dallas (“FRB”), with $1.61 billion in commercial and industrial loans pledged as collateral. There were no borrowings against this line at September 30, 2024, or December 31, 2023.
Current wording
Additionally, at March 31, 2025, we had the ability to borrow $1.39 billion from the discount window at the FRBD, with $1.59 billion in commercial and industrial loans pledged as collateral. There were no borrowings against this line at March 31, 2025, or December 31, 2024.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Net Interest Income and Net Interest Margin
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
(1)Nonaccrual loans are included in their respective loan category for the purpose of calculating the yield earned. All average balances are daily average balances.
Previous report — wording carried elsewhere
(2)In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds and income from tax-exempt investments, and tax credits were computed using a federal income tax rate of 21%.
Previous report — wording carried elsewhere
The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and those due to changes in interest rates. The change in interest attributable to rate changes has been determined by applying the change in rate between periods to average balances outstanding in the earlier period. The change in interest due to volume has been determined by applying the rate from the earlier period to the change in average balances outstanding between periods. For purposes of the below table, changes attributable to both rate and volume that cannot be segregated, including the difference in day count, have been allocated to rate.
Previous report — wording carried elsewhere
The table below presents the various components of and changes in our noninterest income for the periods indicated.
Previous report — wording carried elsewhere
The following table presents the significant components of noninterest expense for the periods indicated: