Origin Bancorp, Inc. Reports Earnings for Second Quarter 2019

RUSTON, Louisiana (July 24, 2019) - Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $12.3 million for the quarter ended June 30, 2019. This represents a decrease of $1.9 million from the quarter ended March 31, 2019, and a decrease of $419,000 from the quarter ended June 30, 2018. Diluted earnings per share for the quarter ended June 30, 2019, was $0.52, down $0.08 from the linked quarter and down $0.01 from the quarter ended June 30, 2018.

"We are pleased to report solid second quarter results which include double digit loan growth year over year, while maintaining sound credit quality, evidenced by stable nonperforming assets and low charge-offs in our loan portfolio," said Drake Mills, Chairman, President and CEO of Origin Bancorp, Inc. "Our team continues to execute on our strategies to drive loan and deposit growth, develop trusted relationships and leverage operational efficiencies. As we look forward to the remainder of 2019, we believe a strong loan pipeline and our strategy to attract low cost deposits helps position us for success."

Second Quarter 2019 Summary

• Net interest income reached a historical quarterly high of $43.0 million for the quarter ended June 30, 2019, compared to $42.0 million for the quarter ended March 31, 2019, and $37.2 million for the quarter ended June 30, 2018.

• Net income was $12.3 million for the quarter ended June 30, 2019 compared to $14.2 million for the linked quarter and $12.7 million for the quarter ended June 30, 2018.

• Total loans held for investment were $3.98 billion, an increase of $146.3 million, or 3.8%, from March 31, 2019, and an increase of $612.5 million, or 18.2%, from June 30, 2018. The yield earned on total loans held for investment during the quarter ended June 30, 2019, was 5.29%, compared to 5.28% for the linked quarter and 4.89% for the quarter ended June 30, 2018.

• Noninterest-bearing deposits increased by $25.6 million, or 2.6%, compared to the linked quarter, and increased by $53.4 million, or 5.6%, from June 30, 2018. Total deposits decreased by $43.2 million, or 1.1%, from March 31, 2019, primarily related to the strategic decision to replace certain brokered deposits with FHLB advances, and increased by $182.9 million, or 5.0%, from June 30, 2018. The average rate paid on interest-bearing deposits was 1.61% compared to 1.48% for the linked quarter and 1.01% for the quarter ended June 30, 2018.

• Nonperforming loans held for investment to total loans held for investment was 0.76% at June 30, 2019, compared to 0.79% at both March 31, 2019, and June 30, 2018.

• The Company opened two full service branches on April 1, 2019, and July 1, 2019.
• The board of directors of the Company authorized a $40 million stock buyback program.
• The Company increased its quarterly cash dividend by $0.06, from $0.0325 to $0.0925, payable in August 2019.

Results of Operations for the Three Months Ended June 30, 2019
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended June 30, 2019, was $43.0 million, reflecting an increase of $943,000, or 2.2%, compared to the linked quarter. The increase was largely driven by increases in the average balance of loans held for investment and partially by the fact that the second quarter of 2019 had 91 days in the period compared to 90 days in the linked quarter. Interest-bearing deposit expense increased by $1.0 million compared to the quarter ended March 31, 2019, driven primarily by increases in rates on interest-bearing deposits. Average noninterest-bearing deposits increased by $45.5 million, or 4.7%, compared to the linked quarter and average interest-bearing deposits increased by $11.4 million, or 0.4%, compared to March 31, 2019.

The fully tax-equivalent net interest margin ("NIM") was 3.70% for the second quarter of 2019, a ten basis point decrease from the first quarter of 2019 and a four basis point decrease from the second quarter of 2018. The net interest spread was reduced by 14 basis points and 19 basis points, respectively, when compared to the three months ended March 31, 2019, and the three months ended June 30, 2018, primarily due to deposit pricing pressures, increases in Federal Home Loan Bank ("FHLB") borrowings and higher interest-bearing balances due from banks. The rate paid on total interest-bearing liabilities for the quarter ended June 30, 2019, was 1.68%, representing an increase of 13 basis points and 61 basis points compared to the linked quarter and the quarter ended June 30, 2018, respectively. The yield earned on interest-earning assets decreased one basis point and increased 42 basis points compared to the linked quarter and the quarter ended June 30, 2018, respectively. Our increase in interest-bearing balances due from banks was $41.4 million at June 30, 2019, or a 33.5% increase from March 31, 2019. Had we invested these funds in higher yielding assets, such as loans held for investment, we estimate that our NIM would have been approximately three basis points higher than currently reported.

Noninterest Income
Noninterest income for the quarter ended June 30, 2019, was $11.2 million, a decrease of $428,000, or 3.7%, from the linked quarter. The decrease in noninterest income over the linked quarter was primarily driven by decreases of $634,000 and $474,000 in other income and insurance commission and fee income, respectively. These decreases were partially offset by a $646,000 increase in mortgage banking revenue.
The decrease in other income was largely driven by a decrease in the fair value of a non-marketable equity investment. The decrease in insurance commission and fee income was primarily driven by seasonal fluctuations as contingency income and renewal income typically experience a seasonal increase during the first quarter of each year. The increase in mortgage banking revenue compared to the linked quarter was primarily driven by increased volume in mortgage loan fundings, sales and growth in our mortgage pipeline.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2019, was $37.1 million, an increase of $1.7 million, or 4.8%, compared to the linked quarter. The increase over the linked quarter included increases of $368,000, $291,000, $225,000, and $223,000, in office and operations, advertising and marketing, other expense, and data processing expense, respectively. The increase in office and operations expense was primarily driven by a $223,000 increase in seasonal business development expenses. The increase in advertising and marketing expense was primarily due to promotions of our recently opened banking centers and the launch of a marketing campaign to promote a new deposit product. The increase in other expense was driven by expenditures that were not individually significant. The increase in data processing expense from the linked quarter was largely driven by system conversion costs and amortization expense incurred with the implementation of new lending software in the second quarter of 2019 which had been in process since the middle of 2018.

Financial Condition

Loans
Total loans held for investment at June 30, 2019, were $3.98 billion, an increase of $146.3 million, or 3.8%, compared to $3.84 billion at March 31, 2019, and an increase of $612.5 million, or 18.2%, compared to $3.37 billion at June 30, 2018.
For the quarter ended June 30, 2019, average loans held for investment were $3.89 billion, an increase of $128.4 million, or 3.4%, from $3.76 billion for the linked quarter. The quarter over quarter change primarily reflected increases of $56.1 million in mortgage warehouse loans driven by seasonality and higher refinancings during the period and $47.9 million in construction/land/land development loans reflecting increased funding for existing projects.

Deposits
Total deposits at June 30, 2019, were $3.86 billion, a decrease of $43.2 million, or 1.1%, compared to $3.90 billion at March 31, 2019, and an increase of $182.9 million, or 5.0%, compared to $3.67 billion, at June 30, 2018. The decrease in total deposits was primarily due to a strategic funding decision to replace certain brokered deposits with lower rate short-term advances from the FHLB. Absent our strategic decision to replace brokered deposits with short-term FHLB advances, total deposit growth would have been $143.8 million, or 3.7%, compared to March 31, 2019.

Average total deposits for the quarter ended June 30, 2019, increased by $56.9 million, or 1.5%, over the linked quarter, led by increases of $97.3 million, $43.0 million and $30.0 million in average money market business deposits, average noninterest-bearing business deposits and average money market consumer deposits, respectively. These increases were partially offset by declines of $85.5 million and $49.9 million in average brokered deposits as mentioned above and the seasonality of interest-bearing public fund deposits, respectively.

For the quarter ended June 30, 2019, average noninterest-bearing deposits as a percentage of total average deposits was 26.1%, compared to 25.3% for the quarter ended March 31, 2019, and 25.8% for the quarter ended June 30, 2018. The increase in noninterest-bearing deposits as a percentage of total deposits compared to the linked quarter was primarily driven by the reallocation of certain brokered deposits to short-term FHLB advances.

Borrowings
Average borrowings for the quarter ended June 30, 2019, increased by $100.3 million, or 29.8%, over the quarter ended March 31, 2019, and increased by $361.0 million over the quarter ended June 30, 2018. As discussed above, the increase in average borrowings in the second quarter of 2019 compared to the linked quarter was driven primarily by short-term FHLB advances totaling $270.0 million due to a strategic funding decision to replace certain brokered deposits with lower rate short-term advances from the FHLB.

Stockholders' Equity
Stockholders' equity was $584.3 million at June 30, 2019, compared to $568.1 million and $519.4 million at March 31, 2019, and June 30, 2018, respectively. Net income of $12.3 million and other comprehensive income of $4.1 million for the three months ended June 30, 2019, were the primary drivers of the increase in stockholders' equity compared to March 31, 2019.

Credit Quality
The Company recorded provision expense of $2.0 million for the quarter ended June 30, 2019, compared to provision expense of $1.0 million for the linked quarter and $311,000 for the quarter ended June 30, 2018. The increase in provision expense from the linked quarter was primarily due to loan growth of $146.3 million, or 3.8%, during the three months ended June 30, 2019, and to a lesser extent, net recoveries in the linked quarter, which offset the amount of provision expense needed to establish the allowance for loan losses at March 31, 2019. During the quarter ended June 30, 2019, we had net charge offs of $677,000 compared to net recoveries of $552,000 for the linked quarter. Total nonperforming loans held for investment were $30.5 million at June 30, 2019, compared to $30.3 million and $26.8 million at March 31, 2019 and June 30, 2018, respectively.

Allowance for loan losses as a percentage of total loans held for investment was 0.92% at June 30, 2019, compared to 0.93% and 1.01% at March 31, 2019, and June 30, 2018, respectively. Allowance for loan losses as a percentage of nonperforming loans held for investment was 120.36% at June 30, 2019, compared to 117.59% and 127.46% at March 31, 2019, and June 30, 2018, respectively.

Total past due loans held for investment, defined as loans 30 days past due or more, decreased by $6.0 million, or 15.7%, compared to the linked quarter. Commercial and industrial and residential real estate loans had the most significant improvements, reflecting decreases of $3.9 million and $1.2 million, respectively. Total past due loans held for investment as a percentage of loans held for investment was 0.80% at June 30, 2019, compared to 0.99% at March 31, 2019, and 1.22% at June 30, 2018.

Conference Call
Origin will hold a conference call to discuss its second quarter 2019 results on Thursday, July 25, 2019, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (844) 695-5516; International: (412) 902-6750 and request to be joined into the Origin Bancorp Inc. (OBNK) call. A simultaneous audio-only webcast may be accessed via Origin's website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link or directly by visiting https://services.choruscall.com/links/obnk190725.html.
If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Origin's website at www.origin.bank, under Investor Relations, News & Events, Events & Presentations.

About Origin Bancorp, Inc.
Origin is a financial holding company for Origin Bank, headquartered in Ruston, Louisiana, which provides a broad range of financial services to small and medium-sized businesses, municipalities, high net-worth individuals and retail clients from 43 banking centers, located from Dallas/Fort Worth, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. For more information, visit www.origin.bank.

Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin's future financial performance, business and growth strategy, projected plans and objectives, including any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, which are all subject to change and may be inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such changes may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions and current expectations, estimates and projections about Origin and its subsidiaries, any of which may change over time and some of which may be beyond Origin's control. Statements preceded by, followed by or that otherwise include the words "assuming," "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin's future results and cause actual results to differ materially from those expressed in the forward-looking statements include: deterioration of Origin's asset quality; changes in real estate values and liquidity in Origin's primary market areas; the financial health of Origin's commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin's loans; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important deposit customer relationships; volatility and direction of market interest rates, which may increase funding costs or reduce interest-earning asset yields thus reducing margin; increased competition in the financial services industry, particularly from regional and national institutions; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated, including the effects of declines in housing markets; an increase in unemployment levels and slowdowns in economic growth; Origin's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin's loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of Origin's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; Origin's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of our non-GAAP liquidity measurements and our underlying assumptions or estimates related to the impact on our net interest margin from changes in the average interest-bearing balances due from banks or other factors; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; and the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") and any updates to those sections set forth in Origin's subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin's underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin's behalf may issue. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Contact:
Chris Reigelman, Origin Bancorp, Inc.
318-497-3177 / chris@origin.bank