Origin Bancorp Outlines Growth Trajectory, Seizes on Market Disruption in Q4 Earnings
In its fourth-quarter earnings call, Origin Bancorp (NYSE: OBK) leadership painted a picture of a regional bank executing a strategic transformation. The "Optimize Origin" initiative, launched last year, is now bearing fruit in improved profitability, while recent merger activity among competitors has opened what management called a "unique window" for talent and client acquisition.
"We are connecting our culture directly to performance, and the momentum is tangible," stated Chairman, President and CEO Drake Mills. He outlined a clear roadmap: achieving a 1% return on assets (ROA) by Q4 2025, navigating the current market disruption, and scaling past the $10 billion asset threshold seamlessly. "We see no structural barriers to our growth," Mills added.
CFO Wally Wallace provided the financial backbone to this optimism. Q4 diluted EPS came in at $0.95, with net income of $29.5 million. This translated to a 1.19% run-rate ROA, already exceeding the near-term target. The net interest margin expanded to 3.73%, ahead of expectations, though Wallace forecasted slight near-term compression due to the lagging repricing of loans following Fed rate cuts.
A significant portion of the discussion focused on strategic investments. President and CEO of Origin Bank, Lance Hall, noted the bank has already added over 10 production bankers in key Texas markets like Houston and Dallas-Fort Worth, with plans for more. "We've set aside roughly $10 million as 'dry powder' to fund this expansion," Hall said, emphasizing a targeted approach to hiring commercial and industrial (C&I) bankers with strong deposit-gathering capabilities.
This aggressive hiring is a direct response to what executives see as a prime opportunity. "The M&A activity in our footprint has created dislocation," Hall explained. "We're investing in production staff to capitalize on this and deepen our client delivery model for 2026." The bank's expense outlook for the year factors in this mid-single-digit growth in investment.
Credit quality remained sturdy, with Chief Risk Officer Jim Crotwell reporting non-performing assets down to 1.07%. On capital, tangible book value per share rose for the 13th consecutive quarter to $35.04, providing flexibility for both growth and shareholder returns. Mills reiterated a commitment to returning about 20% of earnings through dividends, with buybacks as a ongoing tool.
Analyst & Market Perspective:
The call struck a confident tone, but analysts are watching execution. "The targets are ambitious, and the hiring push is aggressive," said Michael Thorne, banking analyst at Ridgewater Capital. "If they can onboard these teams and maintain credit discipline while rates fluctuate, the path to $10B+ looks credible. The pre-provision profit growth is a solid foundation."
Janet Powell, portfolio manager at Sterling Trust, focused on the competitive edge: "In a fragmented market, Origin's narrative of stability during competitor consolidation is powerful. Their ability to grow deposits organically, excluding that year-end transaction, is a key positive signal."
However, not all observers were convinced. David Karr, editor of The Skeptical Banker newsletter, offered a sharper take: "This all sounds great in a conference call, but 'dry powder' for hiring and 'market disruption' are buzzwords until you see the client wins. They're adding expense while promising margin resilience—that's a tough dance. Let's see if this growth is profitable or just costly expansion."
Origin Bancorp, based in Atlanta, Georgia, operates through Origin Bank, providing commercial banking services across the Southeastern U.S.