Origin Bancorp anticipates high single-digit net interest income growth as it targets at least 1.15% ROA in Q4
View original at seekingalpha.comOrigin Bancorp anticipates high single-digit net interest income growth as it targets at least 1.15% ROA in Q4 Earnings Call Insights: Origin Bancorp (OBK) Q2 2026 MANAGEMENT VIEW * “We reported strong net income, ROA and ROE results in the second quarter,” and “Optimize Origin has become the way we operate,” said (Cha…
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In Q1 2026, ROA was 1.11%, and the company was on pace to achieve its target run rate by year-end.
60% confidenceQ2 EPS was the strongest quarterly earnings performance since Q4 of 2021.
60% confidenceMaintaining run rate ROA expectation of at least 1.15% in Q4 and pretax pre-provision run rate ROA in excess of 1.72%, tracking ahead of these targets.
60% confidenceThe company removed any Fed rate actions from its forecast and expects margin to remain relatively flat.
60% confidenceSince April 1, the company added 12 experienced bankers as part of a targeted lift-out strategy, and expanded into Birmingham, Alabama.
60% confidenceThe Argent fees outlook for the year remains unchanged, in the $5 million to $6 million range.
60% confidenceMore than 50% of loan growth this year has been C&I; new loans are coming in at about 6.4%; only $12 million of loan growth came from bankers hired in 2026.
60% confidenceThe Board increased the quarterly dividend from $0.15 to $0.25.
60% confidenceQ2 diluted EPS was $1.09; net interest margin expanded 21 basis points to 3.92%, exceeding expectations; Board increased buyback authorization by $100 million to $121.6 million remaining.
60% confidenceNet interest income rose 5.7% sequentially to $92.2 million despite a 1% decline in average earning assets, driven by improved loan yields and lower deposit costs.
60% confidenceMost recent new deposit costs are about 2.7%; the company opened over 1,800 new deposit accounts in June versus right under 1,000 a year earlier.
60% confidenceAnticipates net interest income growth in the high single digits for both the full year and Q4 over Q4; full year noninterest income growth low to mid-single digits.
60% confidenceOrigin Bancorp reported strong net income, ROA and ROE results in the second quarter and Optimize Origin has become the way the company operates.
60% confidenceNoninterest-bearing deposit growth is extremely sticky.
60% confidenceLiquidity is the real driver of NIM sensitivity, with average cash balances declining about $400 million during the quarter.
60% confidenceQ2 tangible book value grew to $36.37, TCE ratio ended at 11.1%, and the company repurchased 217,034 shares at an average price of $46.60.
60% confidenceNoninterest expense was $64.4 million in Q2 excluding $0.1 million in net notable-item expense; expects mid-single-digit expense growth going forward.
60% confidenceLoan and deposit growth is targeted at mid- to high single digits for the year, tracking toward the higher end.
60% confidenceRepurchase pace depends on valuation: below 1.5x tangible book, the buyback math still works; above 1.5x it becomes more discretionary.
60% confidenceQ2 included about 3 basis points of benefit from interest reversal/recovery on nonaccrual loans; margin modeled as essentially flat going forward.
60% confidenceThe company is seeing pricing pressure from competitors on both loans and deposits, with competitors offering nonrecourse terms more regularly.
60% confidenceLoans grew 2.7% sequentially (1.9% excluding mortgage warehouse); total deposits declined 0.6% on seasonal trends.
60% confidenceThe company hired Brad Waldhoff as Chief Technology and Innovation Officer.
60% confidenceNoninterest income was $15.4 million in Q2, decreasing due to normal seasonality in the insurance business.
60% confidenceNet income totaled $33.8 million with negligible notable items and no impact to EPS.
60% confidenceGrowth discipline is about the margin impact of growth, not growth for its own sake.
60% confidenceOrigin Bancorp is now over the $10 billion asset threshold, and the Durbin Amendment will impact the company midyear next year in the $4 million to $4.5 million range.
60% confidenceIn the prior quarter, the outlook included 25 basis point Fed rate cuts in July and December.
60% confidenceNet charge-offs for the quarter were only $454,000; nonperforming assets decreased $9 million to 0.98% of loans; classified assets decreased to 1.79% from 1.97%.
60% confidenceNoninterest-bearing deposits increased nearly $200 million during the quarter and are now 26% of total deposits.
60% confidence