Origin Bancorp Inc.

02/25/2026 | Press release | Distributed by Public on 02/25/2026 14:55

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis presents our financial condition and results of operations on a consolidated basis. However, we conduct all of our material business operations through our wholly-owned bank subsidiary, Origin Bank, and the discussion and analysis that follows primarily relates to activities conducted at the Bank level.
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes contained in Item 8 of this report. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management's expectations. Factors that could cause such differences are discussed in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors." We assume no obligation to update any of these forward-looking statements.
Discussion in this Form 10-K includes results of operations and financial condition for 2025 and 2024 and year-over-year comparisons between 2025 and 2024. For discussion on results of operations and financial condition pertaining to 2024 and 2023 and year-over-year comparisons between 2024 and 2023, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with U.S. GAAP and with general practices within the financial services industry. Application of these principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under current circumstances. These assumptions form the basis for our judgments about the carrying values of assets and liabilities that are not readily available from independent, objective sources. We evaluate our estimates on an ongoing basis. Use of alternative assumptions may have resulted in significantly different estimates. Actual results may differ from these estimates. Please refer to Note 1 - Significant Accounting Policiesto our consolidated financial statements contained in Item 8 of this report for a full discussion of our accounting policies, including estimates.
We have identified the following accounting estimates that, due to the difficult, subjective or complex judgments and assumptions inherent in those estimates and the potential sensitivity of the financial statements to those judgments and assumptions, are critical to an understanding of our financial condition and results of operations. We believe that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate.
Allowance for Loan Credit Losses. The allowance for loan credit losses ("ALCL") represents the estimated losses for loans accounted for on an amortized cost basis. Expected losses are calculated using relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We evaluate loans held for investment ("LHFI") on a pool basis with pools of loans characterized by loan type, collateral, industry, internal credit risk rating and FICO score. The amount of the ALCL is affected by loan charge-offs, which decrease the allowance, recoveries on loans previously charged off, which increase the allowance, as well as the provision for loan credit losses charged to income, which increases the allowance. In determining the provision for loan credit losses, management monitors fluctuations in the allowance resulting from actual charge-offs and recoveries and periodically reviews the size and composition of the loan portfolio in light of current and forecasted economic conditions. If actual losses exceed the amount of ALCL, it could materially and adversely affect our earnings. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Credit losses are charged against the ALCL when management believes the loss is confirmed.
Loan Acquisition Accounting. We account for our mergers/acquisitions under Accounting Standards Codification ("ASC") Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. The fair value for acquired loans at the time of acquisition or merger is based on a variety of factors, including discounted expected cash flows, adjusted for estimated prepayments and credit losses. In accordance with ASC 326, the fair value adjustment is recorded as premium or discount to the unpaid principal balance of each acquired loan. Loans that have been identified as having experienced a more-than-insignificant deterioration in credit quality since origination is a purchase credit deteriorated ("PCD") loan. The net premium or discount on PCD loans is adjusted by the Company's allowance for credit losses recorded at the time of merger/acquisition. The remaining net premium or discount is accreted or amortized into interest income over the remaining life of the loan using the effective interest rate method. The net premium or discount on loans that are not classified as PCD ("non-PCD"), that includes credit and non-credit components, is accreted or amortized into interest income over the remaining life of the loan using a constant yield method. We then record the necessary allowance for credit losses on the non-PCD loans through provision for loan credit losses expense.
General
We are a financial holding company headquartered in Ruston, Louisiana. Our wholly-owned bank subsidiary, Origin Bank, was founded in 1912 in Choudrant, Louisiana. Deeply rooted in our 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 we serve. We provide a broad range of financial services and currently has more than 56 locations from Dallas/Fort Worth, East Texas, Houston, across North Louisiana, Mississippi, South Alabama and into the Florida Panhandle. In addition, we provide a broad range of insurance agency products and services through our wholly owned insurance agency subsidiary, Forth Insurance, LLC. 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.
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 income generated from interest earning assets and 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.
Changes in market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as in the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and stockholders' equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions, as well as developments affecting the real estate, technology, financial services, insurance, transportation and manufacturing sectors within our target markets.
Results of Operations
The year ended December 31, 2025, was impacted by the Tricolor Holdings, LLC borrower fraud, which was first disclosed in our Current Report on Form 8-K filed on September 10, 2025 and discussed in subsequent filings. These items negatively impacted our diluted EPS of $2.40 by $0.77 for the year ended December 31, 2025.
The year ended December 31, 2024, was impacted by certain questioned activity involving a former banker which is explained in detail in the Company's 2024 Form 10-K filed with the SEC. These items negatively impacted our diluted EPS of $2.45 by $0.29 for the year ended December 31, 2024.
Our net income decreased $1.3 million, or 1.7%, to $75.2 million for the year ended December 31, 2025, from $76.5 million for the year ended December 31, 2024. On a diluted EPS basis, we reported $2.40 per share for the year ended December 31, 2025, compared to $2.45 per share for the year ended December 31, 2024.
Comparison of Results of Operations for the Years Ended December 31, 2025, 2024 and 2023
At and for the Years Ended December 31,
(Dollars in thousands, except per share amounts) 2025 2024 2023
Net income $ 75,197 $ 76,492 $ 83,800
Financial ratios:
ROAA(1)
0.77 % 0.77 % 0.84 %
ROAE(1)
6.24 6.92 8.38
Capital ratio:
Book value per common share $ 40.28 $ 36.71 $ 34.30
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(1)All average balances are calculated using average daily balances.
Net Interest Income and Net Interest Margin
Net interest income for the year ended December 31, 2025, was $331.0 million, an increase of $30.6 million, or 10.2%, compared to the year ended December 31, 2024. The expansion in net interest income was primarily due to a $57.2 million decrease in interest expense, partially offset by a $26.6 million decrease in total interest income during the year ended December 31, 2025, compared to year ended December 31, 2024.
The $57.2 million decrease in interest expense was mainly attributable to a $55.4 million reduction in interest expense on interest-bearing deposits. Lower interest rates contributed $38.8 million of the decrease, while lower average balances contributed $16.6 million. The rate-related decrease was driven primarily by money market deposits and interest-bearing demand deposits, which contributed $22.2 million and $11.2 million, respectively. The average rate on money market deposits declined 67-basis points to 3.39% for the year ended December 31, 2025, from 4.06% for the year ended December 31, 2024. The average rate on interest-bearing demand deposits decreased 59 basis points to 2.81% for the year ended December 31, 2025, from 3.40% for the year ended December 31, 2024. Lower average time deposit balances contributed $28.7 million to the decrease in interest expense, partially offset by a $14.3 million increase in interest expense resulting from higher average money market deposit balances. Average time deposit balances decreased by $577.2 million during the year ended December 31, 2025, when compared to the year ended December 31, 2024, while average money market deposit balances increased by $351.1 million over the same period.
The $26.6 million decrease in interest income was mainly driven by a $39.1 million reduction in interest income on LHFI, partially offset by increases of $8.6 million and $4.1 million in interest income on investment securities and interest-earning balances in banks. Lower average balances and lower interest rates contributed $22.3 million and $16.9 million, respectively, to the total $39.1 million decrease in interest income on LHFI. The $333.2 million decrease in average construction/land/land development loans balances, and the 66-basis point decline in the average yield on construction and industrial loans contributed $23.8 million and $13.2 million to the total decrease in interest income on LHFI. The increase in interest income on investment securities was primarily driven by improved yields resulting from the execution of our bond portfolio optimization strategy during the intervening period, in conjunction with our Optimize Origin initiative. The increase in interest income on interest-earning balances due from banks was primarily driven by a $152.1 million increase in average balances which generated a $7.9 million increase in interest income, partially offset by a $3.8 million decrease in interest income due to lower market interest rates.
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. During 2025, the Federal Reserve reduced the federal funds target rate range three times, by a total of 75 basis points, to a range of 3.50% to 3.75%, bringing the total number of reductions to six for a cumulative decrease of 175 basis points from its recent cycle high set in mid-2023.
The NIM-FTE was 3.61% for the year ended December 31, 2025, a 39-basis point increase from 3.22% for the year ended December 31, 2024. The improvement was mainly driven by an expanding interest rate spread, as the 70-basis-point decline in the average rate on total interest-bearing liabilities exceeded the 18-basis-point decline in the yield on interest-earning assets for the year ended December 31, 2025, compared to the year ended December 31, 2024. The average rate on total interest-bearing liabilities for the year ended December 31, 2025, was 3.18%, compared to 3.88% for the year ended December 31, 2024. The average yield on total interest-earning assets for the year ended December 31, 2025, was 5.83%, compared to 6.01% for the year ended December 31, 2024.
The following table presents average consolidated balance sheet information, interest income, interest expense and the corresponding average yields earned, and rates paid for the year ended December 31, 2025 and 2024.
Years Ended December 31,
2025 2024 2023
(Dollars in thousands)
Assets
Average Balance(1)
Income/Expense
Yield/Rate(2)
Average Balance(1)
Income/Expense
Yield/Rate(2)
Average Balance(1)
Income/Expense
Yield/Rate(2)
Commercial real estate $ 2,457,523 $ 143,047 5.82 % $ 2,485,800 $ 146,507 5.89 % $ 2,404,530 $ 135,117 5.62 %
Construction/land/land development 702,655 48,689 6.93 1,035,871 73,910 7.14 1,015,178 69,630 6.86
Residential real estate 1,969,247 110,770 5.62 1,799,963 98,732 5.49 1,629,589 81,964 5.03
Commercial and industrial 2,013,301 144,825 7.19 2,087,361 163,868 7.85 2,054,081 155,842 7.59
Mortgage warehouse lines of credit 412,030 28,380 6.89 420,665 31,587 7.51 314,079 21,476 6.84
Consumer 21,482 1,574 7.33 22,962 1,819 7.92 24,627 1,918 7.79
LHFI 7,576,238 477,285 6.30 7,852,622 516,423 6.58 7,442,084 465,947 6.26
Loans held for sale 6,114 407 6.66 13,306 858 6.45 18,055 868 4.81
Loans receivable 7,582,352 477,692 6.30 7,865,928 517,281 6.58 7,460,139 466,815 6.26
Investment securities-taxable 993,361 33,526 3.38 1,045,520 26,642 2.55 1,295,871 31,682 2.44
Investment securities-non-taxable 168,353 5,403 3.21 146,815 3,672 2.50 214,232 5,098 2.38
Non-marketable equity securities held in other financial institutions 53,534 2,683 5.01 62,579 2,417 3.86 67,956 3,408 5.01
Interest-earning deposits in banks 432,012 18,659 4.32 279,945 14,573 5.21 318,559 16,388 5.14
Total interest-earning assets 9,229,612 537,963 5.83 9,400,787 564,585 6.01 9,356,757 523,391 5.59
Noninterest-earning assets 540,655 557,803 584,263
Total assets $ 9,770,267 $ 9,958,590 $ 9,941,020
Liabilities and Stockholders' Equity
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts $ 5,504,214 $ 169,451 3.08 % $ 5,164,991 $ 191,620 3.71 % $ 4,725,929 $ 144,324 3.05 %
Time deposits 867,764 30,016 3.46 1,444,954 63,253 4.38 1,398,734 52,133 3.73
Total interest-bearing deposits 6,371,978 199,467 3.13 6,609,945 254,873 3.86 6,124,663 196,457 3.21
FHLB advances & other borrowings 42,958 1,687 3.93 34,203 1,602 4.68 327,792 17,258 5.26
Subordinated indebtedness 86,310 5,816 6.74 161,232 7,744 4.80 198,856 10,119 5.09
Total interest-bearing liabilities 6,501,246 206,970 3.18 6,805,380 264,219 3.88 6,651,311 223,834 3.37
Noninterest-bearing liabilities
Noninterest-bearing deposits 1,905,911 1,887,884 2,147,019
Other liabilities 158,518 159,676 142,786
Total liabilities 8,565,675 8,852,940 8,941,116
Stockholders' Equity 1,204,592 1,105,650 999,904
Total liabilities and stockholders' equity $ 9,770,267 $ 9,958,590 $ 9,941,020
Net interest spread 2.65 % 2.13 % 2.22 %
Net interest income and margin $ 330,993 3.59 $ 300,366 3.20 $ 299,557 3.20
Net interest income and margin - (tax equivalent)(3)
$ 332,913 3.61 $ 302,405 3.22 $ 302,132 3.23
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(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.
(2)Yields/Rates are calculated on an actual/actual day count basis.
(3)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%.
Rate/Volume Analysis
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.
Year Ended December 31, 2025 vs. Year Ended December 31, 2024
(Dollars in thousands)
Interest-earning assets
Increase (Decrease) due to Change in
Loans: Volume Yield/Rate Total Change
Commercial real estate $ (1,667) $ (1,793) $ (3,460)
Construction/land/land development (23,775) (1,446) (25,221)
Residential real estate 9,759 2,279 12,038
Commercial and industrial (5,814) (13,229) (19,043)
Mortgage warehouse lines of credit (648) (2,559) (3,207)
Consumer (117) (128) (245)
Loans held for sale (464) 13 (451)
Loans receivable (22,726) (16,863) (39,589)
Investment securities-taxable (1,329) 8,213 6,884
Investment securities-non-taxable 539 1,192 1,731
Non-marketable equity securities held in other financial institutions (349) 615 266
Interest-earning deposits in banks 7,916 (3,830) 4,086
Total interest-earning assets (15,949) (10,673) (26,622)
Interest-bearing liabilities
Savings and interest-bearing transaction accounts 12,099 (34,268) (22,169)
Time deposits (28,675) (4,562) (33,237)
FHLB advances & other borrowings 410 (325) 85
Subordinated indebtedness (3,599) 1,671 (1,928)
Total interest-bearing liabilities (19,765) (37,484) (57,249)
Net interest income $ 3,816 $ 26,811 $ 30,627
Year Ended December 31, 2024 vs. Year Ended December 31, 2023
(Dollars in thousands)
Interest-earning assets
Increase (Decrease) due to Change in
Loans: Volume Yield/Rate Total Change
Commercial real estate $ 4,567 $ 6,823 $ 11,390
Construction/land/land development 1,419 2,861 4,280
Residential real estate 8,569 8,199 16,768
Commercial and industrial 2,525 5,501 8,026
Mortgage warehouse lines of credit 7,288 2,823 10,111
Consumer (130) 31 (99)
Loans held for sale (228) 218 (10)
Loans receivable 24,010 26,456 50,466
Investment securities-taxable (6,121) 1,081 (5,040)
Investment securities-non-taxable (1,604) 178 (1,426)
Non-marketable equity securities held in other financial institutions (270) (721) (991)
Interest-earning deposits in banks (1,986) 171 (1,815)
Total interest-earning assets 14,029 27,165 41,194
Interest-bearing liabilities
Savings and interest-bearing transaction accounts 13,408 33,888 47,296
Time deposits 1,723 9,397 11,120
FHLB advances & other borrowings (15,457) (199) (15,656)
Subordinated indebtedness (1,915) (460) (2,375)
Total interest-bearing liabilities (2,241) 42,626 40,385
Net interest income $ 16,270 $ (15,461) $ 809
Provision for Credit Losses
We recorded a provision expense of $46.3 million for the year ended December 31, 2025, a $38.8 million increase from $7.4 million for the year ended December 31, 2024, primarily driven by a $36.6 million increase in the provision for loan credit losses. The increase was primarily related to the borrower fraud impacting the Tricolor Holdings, LLC loan relationship which drove a $29.6 million increase in the total provision, consisting of a $29.3 million provision for loan credit losses and a $338,000 provision for off-balance sheet commitments, during the year ended December 31, 2025.
Net charge-offs increased $25.1 million, to $39.6 million for the year ended December 31, 2025, from $14.5 million for the year ended December 31, 2024. The increase was largely reflecting net charge-offs of $29.5 million during the year ended December 31, 2025, related to borrower fraud impacting the Tricolor Holdings, LLC loan relationship discussed above. Our net charge-offs, exclusive of this event, would have been $10.1 million for the year ended December 31, 2025, representing a $4.4 million decrease from the year ended December 31, 2024, primarily resulting from charge-offs on one commercial and industrial loan relationship totaling $6.0 million during the prior year. Net charge-offs to total average LHFI increased to 0.52% for the year ended December 31, 2025, from 0.18% for the year ended December 31, 2024, primarily due to higher net charge-offs during the year ended December 31, 2025.
Noninterest Income
The table below presents the various components of and changes in our noninterest income for the periods indicated.
(Dollars in thousands) Years Ended December 31,
2025 vs. 2024
2024 vs. 2023
Noninterest income: 2025 2024 2023 $ Change % Change $ Change % Change
Insurance commission and fee income $ 27,117 $ 26,759 $ 25,085 $ 358 1.3 % $ 1,674 6.7 %
Service charges and fees 19,651 19,015 18,803 636 3.3 212 1.1
Other fee income 9,500 8,917 8,089 583 6.5 828 10.2
Mortgage banking revenue 3,690 6,580 3,356 (2,890) (43.9) 3,224 96.1
Swap fee income 3,413 323 1,277 3,090 N/M (954) (74.7)
Loss on sales of securities, net (14,448) (14,799) (11,635) 351 2.4 (3,164) 27.2
Change in fair value of equity investments 6,972 5,188 10,096 1,784 34.4 (4,908) (48.6)
Equity method investment (loss) income (1,192) 519 405 (1,711) N/M 114 28.1
Other income 5,131 2,877 2,859 2,254 78.3 18 0.6
Total noninterest income $ 59,834 $ 55,379 $ 58,335 $ 4,455 8.0 $ (2,956) (5.1)
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N/M = Not meaningful.
Noninterest income for the year ended December 31, 2025, increased by $4.5 million, or 8.0%, to $59.8 million, compared to $55.4 million for the year ended December 31, 2024. The increase was primarily due to increases of $3.1 million, $2.3 million and $1.8 million in swap fee income, other income, and change in fair value of equity investments, respectively. These increases were partially offset by decreases of $2.9 million and $1.7 million in mortgage banking revenue and equity method investment (loss) income, respectively.
Swap fee income. The $3.1 million increase in swap fee income during the year ended December 31, 2025, was primarily due to both an attractive interest rate environment which is increasingly conducive to facilitating back-to-back swaps for our customers and an increased focus on the marketing of customer swaps as part of Optimize Origin.
Other income. The $2.3 million increase in other income was primarily due to insurance recoveries of $2.6 million during the year ended December 31, 2025, in connection with the previously disclosed questioned banker activity, as explained in detail in Part I, Item 1, Note 19 - Commitments and Contingencies under Loss Contingencies.
Change in fair value of equity investments. The $1.8 million increase in the change in fair value of equity investments, was driven by an upward adjustment of $7.0 million for the year ended December 31, 2025, compared to a $5.2 million upward adjustment for the year ended December 31, 2024. During the year ended December 31, 2025, there was an additional investment in Argent Financial which increased our ownership percentage above the threshold required to implement the equity method of accounting. The equity method of accounting requires the asset be recorded at fair value immediately prior to the purchase, and therefore required an adjustment to its basis.
Mortgage banking revenue. The $2.9 million decrease in mortgage banking revenue compared to the year ended December 31, 2024, was primarily due to decreases in most mortgage banking income categories during the year ended December 31, 2025, primarily due to the restructuring of our mortgage banking operations that was done as part of Optimize Origin.
Equity method investment (loss) income.The decrease in the equity method investment (loss) income was primarily due to a $3.8 million loss on one limited partnership investment during the year ended December 31, 2025, compared to income of $932,000 recognized on the same investment during the year ended December 31, 2024. The decrease was partially offset by income of $3.2 million from the Argent investment, which was accounted for under the equity method beginning July 1, 2025, following an increase in ownership.
Noninterest Expense
The following table presents the significant components of noninterest expense for the periods indicated:
(Dollars in thousands) Years Ended December 31,
2025 vs. 2024
2024 vs. 2023
Noninterest expense: 2025 2024 2023 $ Change % Change $ Change % Change
Salaries and employee benefits $ 150,889 $ 148,823 $ 138,819 $ 2,066 1.4 % $ 10,004 7.2 %
Occupancy and equipment, net 29,771 27,865 26,783 1,906 6.8 1,082 4.0
Data processing 13,587 13,497 11,590 90 0.7 1,907 16.5
Office and operations 12,736 11,441 10,834 1,295 11.3 607 5.6
Intangible asset amortization 6,611 7,979 9,628 (1,368) (17.1) (1,649) (17.1)
Regulatory assessments 5,534 6,902 6,456 (1,368) (19.8) 446 6.9
Advertising and marketing 5,561 6,150 5,986 (589) (9.6) 164 2.7
Professional services 6,633 6,610 5,931 23 0.3 679 11.4
Electronic banking 5,728 5,162 4,712 566 11.0 450 9.6
Loan-related expenses 3,034 3,164 5,035 (130) (4.1) (1,871) (37.2)
Bank share tax expense 2,518 2,897 3,334 (379) (13.1) (437) (13.1)
Other expense 6,300 10,548 6,108 (4,248) (40.3) 4,440 72.7
Total noninterest expense $ 248,902 $ 251,038 $ 235,216 $ (2,136) (0.9) $ 15,822 6.7
Noninterest expense for the year ended December 31, 2025, decreased by $2.1 million, or 0.9%, to $248.9 million, compared to $251.0 million for the year ended December 31, 2024, primarily due to a $4.2 million decrease in other expense and $1.4 million decreases in both regulatory assessments and intangible asset amortization. These decreases were partially offset by increases of $2.1 million, $1.9 million, and $1.3 million in salaries and employee benefits, occupancy and equipment, net, and office and operations expenses, respectively.
Other noninterest expense. The $4.2 million decrease in other noninterest expense was primarily due to a $4.3 million contingent liability recognized during the year ended December 31, 2024, related to certain questioned activity involving a former banker in our East Texas market, as explained in detail inPart I, Item 1, Note 19 - Commitments and Contingencies under Loss Contingencies.
Regulatory assessments. The $1.4 million decrease in regulatory assessment expense was primarily driven by our improved risk-based pricing as a result of an adjustment to our loan mix during the year ended December 31, 2025, compared to the year ended December 31, 2024.
Intangible asset amortization. The $1.4 million decrease in intangible asset amortization is primarily due to the accelerated amortization method used to measure the amortization expense of the assets.
Salaries and employee benefits. The $2.1 million increase in salaries and employee benefits expense was primarily driven by increases of $1.8 million and $1.1 million in medical costs and incentive compensation, respectively, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was also attributable to a lower employee retention credit recognized during the year ended December 31, 2025, of $213,000, compared to $1.7 million recognized during the year ended December 31, 2024. These increases were partially offset by a net decrease of $2.7 million in salaries, reflecting a decline in full time equivalent ("FTE") employees, partially offset by annual cost-living adjustments. Our FTE employees declined to 988 at December 31, 2025, from 1,031 at December 31, 2024. Approximately 70 FTE employees were reduced as part of Optimize Origin, partially offset by net new hires and attrition during the intervening period.
Occupancy and equipment, net. The $1.9 million increase in occupancy and equipment, net was primarily driven by an increase of $1.4 million in depreciation expense. Of this increase, $832,000 and $597,000 were related to additional depreciation expense associated with the opening or relocation of four banking centers during 2024 and 2025, and additional fixed asset purchases, respectively. In addition, depreciation expense increased by $302,000 due to shortened estimated useful lives of certain leasehold improvements and furniture, fixtures and equipment associated with our branch consolidations during the year ended December 31, 2025, compared to the year ended December 31, 2024, as a part of our Optimize Origin initiative.
Office and operations. The $1.3 million increase in office and operations expense was primarily related to a $724,000 increase in check and card fraud.
Income Tax Expense
For the year ended December 31, 2025, we recognized income tax expense of $20.4 million, compared to $20.8 million for the year ended December 31, 2024. Our effective tax rate was 21.4% for both the years ended December 31, 2025 and 2024.
Comparison of Financial Condition at December 31, 2025, and December 31, 2024
General
Total assets increased by $46.0 million, or 0.5%, to $9.72 billion at December 31, 2025, from $9.68 billion on December 31, 2024. The increase in total assets is primarily due to increases of $97.2 million and $48.5 million in LHFI and equity method investments, respectively. LHFI were $7.67 billion at December 31, 2025, an increase of 1.3%, compared to $7.57 billion at December 31, 2024. Equity method investments were $67.5 million at December 31, 2025, an increase of 255.8%, compared to $19.0 million at December 31, 2024. These increases were offset by decreases of $46.0 million and $40.6 million in cash and cash equivalents and non-marketable equity securities held in other financial institutions, respectively. Cash and cash equivalents were $424.2 million at December 31, 2025, a decrease of 9.8%, compared to $470.2 million at December 31, 2024. Non-marketable equity securities held in other financial institutions were $31.1 million at December 31, 2025, a decrease of 56.6%, compared to $71.6 million at December 31, 2024.
Total liabilities decreased by $55.4 million, or 0.6%, to $8.48 billion at December 31, 2025, from $8.53 billion at December 31, 2024. Subordinated indebtedness decreased $143.4 million, or 89.7%, to $16.5 million at December 31, 2025, from $159.9 million at December 31, 2024, as we redeemed eligible subordinated indebtedness as part of Optimize Origin. Total deposits increased by $84.1 million, or 1.0%, to $8.31 billion at December 31, 2025, from $8.22 billion at December 31, 2024, primarily due to increases of $351.0 million and $79.2 million in money market and noninterest-bearing deposits, respectively. These increases were partially offset by decreases of $142.8 million, $111.5 million and $80.2 million in interest-bearing demand deposits, time deposits (excluding brokered time deposits) and brokered deposits, respectively.
Loan Portfolio
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 December 31, 2025, 73.7% 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 existing market areas, compared to 75.2% at December 31, 2024.
The following table presents the ending balance of our loan portfolio held for investment at the dates indicated.
(Dollars in thousands) December 31, 2025 December 31, 2024
2025 vs. 2024
Real estate: Amount Percent Amount Percent $ Change % Change
Commercial real estate ("CRE")(1)
$ 2,523,905 32.9 % $ 2,477,431 32.7 % $ 46,474 1.9 %
Construction/land/land development
611,220 8.0 864,011 11.4 (252,791) (29.3)
Residential real estate 1,997,760 26.0 1,857,589 24.5 140,171 7.5
Total real estate 5,132,885 66.9 5,199,031 68.6 (66,146) (1.3)
Commercial and industrial 1,989,218 25.9 2,002,634 26.5 (13,416) (0.7)
Mortgage warehouse lines of credit 528,781 6.9 349,081 4.6 179,700 51.5
Consumer 20,033 0.3 22,967 0.3 (2,934) (12.8)
Total LHFI $ 7,670,917 100.0 % $ 7,573,713 100.0 % $ 97,204 1.3
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(1)Includes owner-occupied commercial real estate of $1.00 billion and $975.9 million at December 31, 2025 and 2024, respectively.
At December 31, 2025, total LHFI were $7.67 billion, an increase of $97.2 million, or 1.3%, compared to $7.57 billion at December 31, 2024. The increase was primarily driven by growth of $179.7 million, $140.2 million and $46.5 million in mortgage warehouse lines of credit, residential real estate loans and commercial real estate loans, respectively. This growth was offset by a decline of $252.8 million in construction/land/land development loans. The decrease in construction/land/land development loans was primarily due to the normal reclassification of these loans upon completion, resulting in a change in loan category during the current period compared to December 31, 2024. Total LHFI at December 31, 2025, excluding mortgage warehouse lines of credit, were $7.14 billion, reflecting a decrease of $82.5 million, or 1.1%, compared to December 31, 2024.
A significant portion, 32.9%, of our LHFI portfolio at December 31, 2025, consisted of commercial real estate 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.
The table below sets forth the commercial real estate loan portfolio, by portfolio industry sector and collateral location as of December 31, 2025.
December 31, 2025
(Dollars in thousands) Texas Louisiana Mississippi All Other States Total
Non-owner-occupied CRE:
Office building $ 300,086 $ 24,867 $ 30,959 $ 24,509 $ 380,421
Retail shopping 263,636 29,992 39,248 89,393 422,269
Real estate & construction 179,751 47,305 5,599 17,420 250,075
Healthcare 92,345 41,973 5,584 17,638 157,540
Hotels 9,324 47,316 37,584 8,901 103,125
All other sectors 119,438 10,928 2,060 73,248 205,674
Total non-owner-occupied CRE 964,580 202,381 121,034 231,109 1,519,104
Owner-occupied CRE:
Real estate & construction 168,606 44,741 9,279 19,179 241,805
Retail shopping 134,739 18,442 2,884 1,750 157,815
Restaurants 47,634 12,048 2,237 5,357 67,276
Healthcare 58,535 20,206 890 - 79,631
Consumer services 47,039 14,995 241 2,952 65,227
Entertainment & recreation 38,481 20,071 9,653 - 68,205
All other sectors 170,522 79,886 23,021 51,413 324,842
Total owner-occupied CRE 665,556 210,389 48,205 80,651 1,004,801
Total commercial real estate loans $ 1,630,136 $ 412,770 $ 169,239 $ 311,760 $ 2,523,905
Loan Portfolio Maturity Analysis
The table below presents the maturity distribution of our LHFI at December 31, 2025. The table also presents the portion of our loans that have fixed interest rates, rather than interest rates that fluctuate over the life of the loans, based on changes in the interest rate environment.
December 31, 2025
(Dollars in thousands) One Year or Less After One Year
Through Five Years 		After Five Years Through Fifteen Years After Fifteen Years Total
Real estate:
Commercial real estate $ 509,408 $ 1,721,797 $ 292,700 $ - $ 2,523,905
Construction/land/land development 194,282 350,070 63,286 3,582 611,220
Residential real estate 327,298 749,669 52,074 868,719 1,997,760
Total real estate 1,030,988 2,821,536 408,060 872,301 5,132,885
Commercial and industrial 875,247 1,000,348 113,623 - 1,989,218
Mortgage warehouse lines of credit 528,781 - - - 528,781
Consumer 8,056 11,549 368 60 20,033
Total LHFI $ 2,443,072 $ 3,833,433 $ 522,051 $ 872,361 $ 7,670,917
Amounts with fixed rates $ 610,695 $ 1,830,541 $ 317,258 $ 205,487 $ 2,963,981
Amounts with variable rates 1,832,377 2,002,892 204,793 666,874 4,706,936
Total $ 2,443,072 $ 3,833,433 $ 522,051 $ 872,361 $ 7,670,917
Nonperforming Assets
Nonperforming assets consist of nonperforming/nonaccrual loans and property acquired through foreclosures or repossession, as well as bank-owned property not in use and listed for sale.
Loans are placed on nonaccrual status when management believes that the borrower's financial condition, after giving consideration to economic and business conditions, and collection efforts, is such that collection of interest is doubtful, or generally when loans are 90 days or more past due. Loans may be placed on nonaccrual status even if the contractual payments are not past due if information becomes available that causes substantial doubt about the borrower's ability to meet the contractual obligations of the loan. When accrual of interest is discontinued, all unpaid accrued interest is reversed. Past due status is based on the contractual terms of the loan. Interest income on nonaccrual loans may be recognized to the extent cash payments are received, but payments received are usually applied to principal. Nonaccrual loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. If a loan is determined by management to be uncollectible, regardless of size, the portion of the loan determined to be uncollectible is then charged to the ALCL.
We manage the quality of our lending portfolio in part through a disciplined underwriting policy and through continual monitoring of loan performance and borrowers' financial condition. There can be no assurance, however, that our loan portfolio will not become subject to losses due to declines in economic conditions or deterioration in the financial condition of our borrowers.
The following table shows our nonperforming loans and nonperforming assets at the dates indicated:
(Dollars in thousands)
Nonperforming LHFI:
December 31, 2025 December 31, 2024
Commercial real estate $ 13,212 $ 4,974
Construction/land/land development 16,388 18,505
Residential real estate 39,480 36,221
Commercial and industrial 11,919 15,120
Consumer 185 182
Total nonperforming LHFI
81,184 75,002
Other real estate owned:
Commercial real estate, construction/land/land development - 1,340
Residential real estate 650 1,261
Former bank premises - 1,034
Total other real estate owned
650 3,635
Other repossessed assets owned
44 -
Total repossessed assets owned
694 3,635
Total nonperforming assets
$ 81,878 $ 78,637
Total LHFI
$ 7,670,917 $ 7,573,713
Ratio of nonperforming LHFI to total LHFI
1.06 % 0.99 %
Ratio of nonperforming assets to total assets
0.84 0.81
As explained in detail in Part I, Note 19 - 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 certain questioned activity involving a former banker in our East Texas market. We continue to work toward a resolution in this matter.
Nonperforming LHFI increased $6.2 million at December 31, 2025, compared to December 31, 2024, and nonperforming LHFI to LHFI increased to 1.06% compared to 0.99%. The increase in nonperforming loans primarily resulted from seven loan relationships totaling $20.9 million placed on non-performing status during the year ended December 31, 2025, partially offset by reductions totaling $11.0 million through pay-off, pay-down or charge-off activities during the intervening period. Please see Note 5 - Loansto our consolidated financial statements contained in Part II, Item 8 of this report for more information on nonperforming loans.
Potential Problem Loans
From a credit risk standpoint, we classify loans using risk grades which fall into one of five categories: pass, special mention, substandard, doubtful or loss. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. We review the ratings on loans and adjust them to reflect the degree of risk and loss that is felt to be inherent or expected in each loan. The methodology is structured so that reserve allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss). Loans rated special mention reflect borrowers who exhibit credit weaknesses or downward trends deserving close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank's credit position at some future date. While potentially weak these borrowers currently do not pose sufficient risk to warrant adverse classification. Loans rated substandard are those borrowers with deteriorating trends and well-defined weaknesses that jeopardize the orderly liquidation of debt. A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower might be in jeopardy.
Loans rated as doubtful have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full questionable, and there is a high probability of loss based on currently existing facts, conditions and values. Loans classified as loss are charged-off and we have low expectations for the recovery of any payments in respect to loans rated as loss. Information regarding the internal risk ratings of our loans at December 31, 2025, is included in Note 5 - Loansto our consolidated financial statements contained in Part II, Item 8of this report.
Allowance for Loan Credit Losses
The ALCL represents the estimated losses for loans accounted for on an amortized cost basis. Expected losses are calculated using relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We evaluate LHFI on a pool basis with pools of loans characterized by loan type, collateral, industry, internal credit risk rating and FICO score. We applied a probability of default, loss given default loss methodology to the loan pools at December 31, 2025. Historical loss rates for each pool are calculated based on charge-off and recovery data beginning with the second quarter of 2012. These loss rates are adjusted for the effects of certain economic variables forecast over a one-year period, particularly for differences between current period conditions and the conditions existing during the historical loss period. Subsequent to the forecast effects, historical loss rates are used to estimate losses over the estimated remaining lives of the loans. The estimated remaining lives consist of the contractual lives, adjusted for estimated prepayments. Loans that exhibit characteristics different from their pool characteristics are evaluated on an individual basis. Certain of these loans are considered to be collateral dependent, with the borrower experiencing financial difficulty. For these loans, the fair value of collateral practical expedient is elected whereby the allowance is calculated as the amount by which the amortized cost exceeds the fair value of collateral, less costs to sell (if applicable). Those individual loans that are not collateral dependent are evaluated based on a discounted cash flow methodology.
The amount of the ALCL is affected by loan charge-offs, which decrease the allowance, recoveries on loans previously charged off, which increase the allowance, as well as the provision for loan credit losses charged to income, which increases the allowance. In determining the provision for loan credit losses, management monitors fluctuations in the allowance resulting from actual charge-offs and recoveries and periodically reviews the size and composition of the loan portfolio in light of current and forecasted economic conditions. If actual losses exceed the amount of the ALCL, it would materially and adversely affect our earnings.
Acquisition Accounting and Acquired Loans. We account for our mergers/acquisitions under Financial Accounting Standards Board ("FASB") ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. In accordance with ASC 326, we record a discount or premium, and also an allowance for credit losses on acquired loans. All purchased loans are recorded at fair value in accordance with the fair value methodology prescribed in FASB ASC Topic 820, Fair Value Measurements. The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows.
Purchased loans that have experienced more than insignificant credit deterioration since origination are purchased credit deteriorated ("PCD") loans. We evaluate 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. We held approximately $5.4 million and $12.3 million of unpaid principal balance PCD loans at December 31, 2025 and December 31, 2024, respectively.
An ALCL is determined using the same methodology as other individually evaluated loans. The sum of the loan's purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized or accreted into interest income over the life of the loan. Subsequent changes to the ALCL are recorded through the provision for credit losses.
As a general rule, when it becomes evident that the full principal and accrued interest of a loan may not be collected, or at 90 days past due, we will reflect that loan as nonperforming. It will remain nonperforming until it performs in a manner that it is reasonable to expect that we will collect principal and accrued interest in full. When the amount or likelihood of a loss on a loan has been confirmed, a charge-off will be taken in the period it is determined.
We establish general allocations for each major loan category and credit quality. The general allocation is based, in part, on historical charge-off experience and loss given default methodology, derived from our internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data. We give consideration to trends, changes in loan mix, delinquencies, prior losses, reasonable and supportable forecasts and other related information.
In connection with the review of our loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements we consider include:
•for commercial real estate loans, the debt service coverage ratio, operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral and the volatility of income, property value and future operating results typical of properties of that type;
•for construction, land and land development loans, the perceived feasibility of the project, including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, experience and ability of the developer and loan to value ratio;
•for residential mortgage loans, the borrower's ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral;
•for commercial and industrial loans, the debt service coverage ratio (income from the business in excess of operating expenses compared to loan repayment requirements), the operating results of the commercial, industrial or professional enterprise, the borrower's business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category and the value, nature and marketability of collateral; and
•for mortgage warehouse loans, the borrower's adherence to agency or investor underwriting guidelines, while the risk associated with the underlying consumer mortgage loan repayments, similar to other consumer loans, depends on the borrower's financial stability and are more likely than commercial loans to be adversely affected by divorce, job loss, illness and other personal hardships.
The following table presents the allowance for credit loss by loan category:
December 31,
(Dollars in thousands)
2025 2024
Loans secured by real estate:
Amount
%(1)
Amount
%(1)
Commercial real estate $ 18,929 32.9 % $ 16,546 32.7 %
Construction/land/land development 7,219 8.0 7,398 11.4
Residential real estate 14,488 26.0 12,454 24.5
Commercial and industrial 54,496 25.9 53,449 26.5
Mortgage warehouse lines of credit 913 6.9 501 4.6
Consumer 737 0.3 712 0.3
Total $ 96,782 100.0 % $ 91,060 100.0 %
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(1)Represents the ratio of each loan type to total LHFI.
The following table presents an analysis of the ALCL and other related data at the periods indicated.
(Dollars in thousands) Years Ended December 31,
ALCL 2025 2024
Balance at beginning of year $ 91,060 $ 96,868
Provision for loan credit losses 45,303 8,680
Charge-offs:
Commercial real estate 728 480
Residential real estate 489 11
Commercial and industrial 43,691 22,787
Consumer 174 362
Total charge-offs 45,082 23,640
Recoveries:
Commercial real estate 18 530
Residential real estate 60 16
Commercial and industrial 5,392 8,583
Consumer 31 23
Total recoveries 5,501 9,152
Net charge-offs 39,581 14,488
Balance at end of year $ 96,782 $ 91,060
Ratio of ALCL to:
Nonperforming LHFI 119.21 % 121.41 %
LHFI 1.26 1.20
Net charge-offs as a percentage of:
Provision for loan credit losses 87.37 166.91
ALCL 40.90 15.91
Average LHFI 0.52 0.18
Our ALCL increased by $5.7 million, or 6.3%, to $96.8 million at December 31, 2025, from $91.1 million at December 31, 2024. The increase consisted of $3.1 million in higher reserves on individually evaluated loans and $2.6 million in the collective reserves based on updated credit data and risks embedded in our portfolio. The ALCL to nonperforming LHFI decreased to 119.21% at December 31, 2025, compared to 121.41% at December 31, 2024, primarily driven by a $6.2 million increase in nonperforming LHFI as explained in the preceding Nonperforming Assetssection, during the year ended December 31, 2025.
Securities
Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue. We use the securities portfolio to provide a source of liquidity, provide an appropriate return on funds invested, manage interest rate risk and meet collateral as well as regulatory capital requirements. We manage the securities portfolio to optimize returns while maintaining an appropriate level of risk. Securities within the portfolio are classified as either held-to-maturity, available-for-sale or at fair value through income, based on the intent and objective of the investment and the ability to hold to maturity. Unrealized gains and losses arising in the available for sale portfolio as a result of changes in the fair value of the securities are reported on an after-tax basis as a component of accumulated other comprehensive (loss) income in stockholders' equity while securities classified as held to maturity are carried at amortized cost. For further discussion of the valuation components and classification of investment securities, see Note 1 - Significant Accounting Policiesto our consolidated financial statements contained in Part II, Item 8of this report.
Our securities portfolio totaled $1.13 billion at December 31, 2025, representing an increase of $13.8 million, or 1.2%, from $1.12 billion at December 31, 2024. The increase was primarily due to purchases and a decrease in unrealized losses during the year ended December 31, 2025, which was partially offset by sales, maturities and calls, as well as normal principal paydowns. During the second quarter of 2025 and the fourth quarter of 2024, we executed bond portfolio optimization strategies aimed at enhancing long-term yields and improving overall portfolio performance. During the second quarter of 2025, we replaced securities with a total book value of $215.8 million and a weighted average yield of 2.60% with new securities totaling $201.8 million with a weighted average yield of 5.23%, realizing a loss of $14.4 million. As part of the strategy, we also entered into interest rate swaps designated as fair value hedges on certain purchased securities to reduce potential volatility in their fair values resulting from changes in market interest rates. During the fourth quarter of 2024, we replaced securities with a total book value of $188.2 million and a weighted average yield of 1.51% with new securities totaling $173.7 million with a weighted average yield of 5.22%, realizing a loss of $14.6 million.
Our available for sale portfolio totaled $1.12 billion at December 31, 2025, which represented 98.5% of our total security portfolio and is comprised of 42.0% mortgage-backed, 26.4% municipal, 26.3% collateralized mortgage obligations, 5.0% corporate and 0.3% treasury/agency securities. Our available for sale portfolio totaled $1.10 billion at December 31, 2024, which represented 98.4% of our total security portfolio, and was comprised of 53.0% mortgage-backed, 23.2% municipal, 15.4% collateralized mortgage obligations, 7.1% corporate and 1.3% treasury/agency securities.
The securities portfolio had a weighted average effective duration of 4.15 years at December 31, 2025, compared to 4.46 years at December 31, 2024. For additional information regarding our securities portfolio, please see Note 3 - Securitiesto our consolidated financial statements contained in Part II, Item 8of this report.
The following table sets forth the composition of our securities portfolio at the dates indicated.
December 31,
(Dollars in thousands) 2025 2024
Available for sale: Carrying Amount % of Total Carrying Amount % of Total
State and municipal securities $ 294,884 26.4 % $ 255,976 23.2 %
Corporate bonds 55,704 5.0 78,236 7.1
U.S. treasury and government agency securities 3,140 0.3 13,805 1.3
Commercial mortgage-backed securities 15,286 1.4 44,284 4.0
Residential mortgage-backed securities 454,485 40.6 540,834 49.0
Commercial collateralized mortgage obligations 82,793 7.4 28,566 2.6
Residential collateralized mortgage obligations 210,884 18.9 140,827 12.8
Total $ 1,117,176 100.0 % $ 1,102,528 100.0 %
Held to maturity:
State and municipal securities, net of allowance $ 10,559 $ 11,095
Securities carried at fair value through income:
State and municipal securities $ 6,215 $ 6,512
The following table presents the fair value of securities available for sale and amortized cost of securities held to maturity and their corresponding yields at December 31, 2025. The securities are grouped by contractual maturity and use amortized cost for all yield calculations. Mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which do not have contractual payments due at a single maturity date, are shown at the date the last underlying mortgage matures.
December 31, 2025
(Dollars in thousands) Within One Year After One Year but Within Five Years After Five Years but Within Ten Years After Ten Years Total
Available for sale: Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
State and municipal securities (1)(2)
$ 8,592 1.45 % $ 20,596 2.34 % $ 118,106 2.34 % $ 147,590 3.09 % $ 294,884 2.69 %
Corporate bonds - - 20,670 6.84 33,527 4.92 1,507 6.30 55,704 5.67
U.S. treasury and government agency securities - - 50 6.93 - - 3,090 1.45 3,140 1.54
Commercial mortgage-backed securities - - 5,682 1.42 9,604 2.30 - - 15,286 1.97
Residential mortgage-backed securities 14 2.36 - - 17,278 3.16 437,193 3.15 454,485 3.15
Commercial collateralized mortgage obligations - - 6,324 4.59 17,568 3.32 58,901 5.50 82,793 4.97
Residential collateralized mortgage obligations - - - - 15,253 3.85 195,631 3.51 210,884 3.53
Total securities available for sale $ 8,606 1.46 $ 53,322 4.26 $ 211,336 3.00 $ 843,912 3.39 $ 1,117,176 3.34
Held to maturity:
State and municipal securities (1)
- - 5,143 5.61 5,457 2.50 - - 10,600 4.01
Securities carried at fair value through income:
State and municipal securities (1)
- - - - - - 6,215 4.54 6,215 4.54
Total $ 8,606 1.46 $ 58,465 4.38 $ 216,793 2.99 $ 850,127 3.40 $ 1,133,991 3.35
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(1)Tax-exempt security yields are calculated without consideration of their tax benefit status.
(2)Yields are calculated without consideration of the impact of certain interest rate swaps designated as fair value hedges.
The contractual maturity of mortgage-backed securities and collateralized mortgage obligations is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and collateralized mortgage obligations are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay outstanding amounts. Monthly pay downs on mortgage-backed securities tend to cause the average life of the securities to be much different from the stated contractual maturity. During a period of decreasing interest rates, fixed rate mortgage-backed securities tend to experience higher prepayments of principal, which can significantly shorten the estimated average life of these securities. As interest rates continue to fall, prepayments activity may increase further, thereby accelerating the reduction in the estimated average life of these securities.
All of our mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities. Other than securities issued by government agencies or government sponsored enterprises, we did not own securities of any one issuer for which aggregate cost exceeded 10.0% of our consolidated stockholders' equity at December 31, 2025 or 2024. Additionally, we do not hold any Fannie Mae or Freddie Mac preferred stock, collateralized debt obligations, structured investment vehicles or second lien elements in the investment portfolio, nor does the investment portfolio contain any securities that are directly backed by subprime or Alt-A mortgages.
Securities Carried at Fair Value through Income
At December 31, 2025 and 2024, we held one fixed rate community investment bond of $6.2 million and $6.5 million, respectively. We elected the fair value option on this security to offset corresponding changes in the fair value of related interest rate swap agreements.
Equity Method Investments
On July 1, 2025, the Company purchased additional shares of the common stock of Argent Financial Group, Inc., increasing its ownership to an amount in excess of 20% of the outstanding shares of common stock. Because the Company's ownership position exceeded 20% of outstanding shares of Argent's common stock, the Company began applying the equity method for this investment. This purchase was the primary reason our equity method investments increased $48.5 million, or 255.8%, to $67.5 million at December 31, 2025, compared to $19.0 million at December 31, 2024. The implementation of the equity method of accounting resulted in a change in presentation to the underlying asset from non-marketable equity securities held in other financial institutions to equity method investments. As a result, non-marketable equity securities held in other financial institutions declined $40.6 million, or 56.6%, to $31.1 million at December 31, 2025, compared to $71.6 million at December 31, 2024.
Deposits
Deposits are the primary funding source used to fund our loans, investments and operating needs. We offer a variety of products designed to attract and retain both consumer and commercial deposit customers. These products consist of noninterest and interest-bearing checking accounts, savings deposits, money market accounts and time deposits. Deposits are primarily gathered from individuals, partnerships and corporations in our market areas. We also obtain deposits from local municipalities and state agencies.
Total deposits increased $84.1 million, or 1.0%, at December 31, 2025, compared to December 31, 2024, with increases of $351.0 million and $79.2 million in money market and noninterest-bearing demand, respectively, offset by decreases of $142.8 million, $111.5 million, $80.2 million and $11.5 million in interest-bearing demand, time deposits, brokered deposits and savings, respectively. The increase in deposits supported loan growth and redemptions in outstanding subordinated indebtedness during the year, reflecting continued balance sheet optimization.
The following table presents our deposit mix at the dates indicated:
December 31, 2025 December 31, 2024
(Dollars in thousands) Balance % of Total Balance % of Total $ Change % Change
Noninterest-bearing demand
$ 1,979,875 23.8 % $ 1,900,651 23.1 % $ 79,224 4.2 %
Money market
3,281,708 39.5 2,930,710 35.6 350,998 12.0
Interest-bearing demand
1,917,658 23.1 2,060,463 25.1 (142,805) (6.9)
Time deposits
829,452 10.0 941,000 11.4 (111,548) (11.9)
Brokered deposits(1)
- - 80,226 1.0 (80,226) (100.0)
Savings
298,554 3.6 310,070 3.8 (11,516) (3.7)
Total deposits
$ 8,307,247 100.0 % $ 8,223,120 100.0 % $ 84,127 1.0
_____________________
(1)At December 31, 2024, brokered deposits included brokered time deposits and brokered interest-bearing demand of $80.0 million and $236,000, respectively.
We manage our interest expense on deposits through specific deposit product pricing that is based on competitive pricing, economic conditions and current and anticipated funding needs. We may use interest rates as a mechanism to attract or deter additional deposits based on our anticipated funding needs and liquidity position. We also consider potential interest rate risk caused by extended maturities of time deposits when setting the interest rates in periods of future economic uncertainty.
The following table reflects the classification of our average deposits, and the average rate paid on each deposit category for the periods indicated:
Years Ended December 31,
2025 2024 2023
(Dollars in thousands) Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Average
Balance 		Interest Expense Average Rate Paid
Interest-bearing demand
$ 1,895,536 $ 53,185 2.81 % $ 1,863,361 $ 63,291 3.40 % $ 1,788,423 $ 50,033 2.80 %
Money market
3,293,749 111,550 3.39 2,942,691 119,533 4.06 2,646,447 91,685 3.46
Time deposits
842,875 28,771 3.41 1,004,934 39,634 3.94 928,694 27,892 3.00
Brokered deposits(1)
24,889 1,245 5.00 509,434 27,321 5.36 470,040 24,241 5.16
Savings
314,929 4,716 1.50 289,525 5,094 1.76 291,059 2,606 0.90
Total interest-bearing
6,371,978 199,467 3.13 6,609,945 254,873 3.86 6,124,663 196,457 3.21
Noninterest-bearing demand
1,905,911 - 1,887,884 - 2,147,019 -
Total average deposits
$ 8,277,889 $ 199,467 2.41 $ 8,497,829 $ 254,873 3.00 $ 8,271,682 $ 196,457 2.38
______________________
(1)Average brokered deposits include average brokered time deposits of $24.9 million, for the year ended December 31, 2025. Average brokered deposits include average brokered time deposits and average brokered interest-bearing demand of $440.0 million and $69.4 million, respectively, for the year ended December 31, 2024.
Our average deposit balances were $8.28 billion for the year ended December 31, 2025, a decrease of $219.9 million, or 2.6%, from $8.50 billion for the year ended December 31, 2024. The average rate paid on our interest-bearing deposits for the year ended December 31, 2025, was 3.13%, compared to 3.86% for the year ended December 31, 2024.
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 late 2024 and continuing through 2025. The FRB reduced the federal funds target rate range six times, by a total of 175 basis points from its recent cycle high set in mid-2023 of 5.25% to 5.50% to 3.50% to 3.75%.
Average noninterest-bearing deposits were $1.91 billion for the year ended December 31, 2025, an increase of $18.0 million, or 1.0%, from $1.89 billion for the year ended December 31, 2024, and represented 23.0% and 22.2% of average total deposits for the year ended December 31, 2025 and 2024, respectively.
The amount of deposits in excess of the FDIC insurance limit at December 31, 2025 and 2024 was $3.93 billion and $3.66 billion, respectively, including $860.0 million and $862.9 million in public fund deposits collateralized by pledged assets, respectively.
The following table presents the maturity distribution of our time deposits:
(Dollars in thousands)
Remaining maturity:
U.S. Time Deposits in Excess of the FDIC Insurance Limit
Total Time & Brokered Time
Deposits
3 months or less
$ 83,338 $ 324,871
Over 3 through 6 months
94,901 340,775
Over 6 through 12 months
59,370 127,936
Over 12 months
4,413 35,870
$ 242,022 $ 829,452
Borrowings
Borrowed funds are summarized as follows:
December 31,
(Dollars in thousands) 2025 2024
Long-term FHLB advances $ 5,913 $ 6,198
Overnight repurchase agreements with depositors 13,137 6,262
Total FHLB advances and other borrowings $ 19,050 $ 12,460
Subordinated indebtedness, net $ 16,544 $ 159,943
Our long-term debt consists of advances from the FHLB with original maturities greater than one year and the subordinated indebtedness captioned and described below. Interest rates for FHLB long-term advances outstanding at December 31, 2025 and 2024, ranged from 1.99% to 4.57% and were subject to restrictions or penalties in the event of prepayment.
Overnight repurchase agreements with depositors consist of obligations of ours to depositors and mature on a daily basis. These obligations to depositors carried a daily average interest rate of 1.67% and 2.62% for the years ended December 31, 2025, and 2024, respectively.
At December 31, 2025, we held 44 unfunded letters of credit from the FHLB totaling $598.3 million with expiration dates ranging from January 2, 2026, to September 22, 2027. These letters of credit either support pledges for our public fund deposits or confirm letters of credit we have issued to support our customers' businesses. Security for all indebtedness and outstanding commitments to the FHLB consists of a blanket floating lien on all of our first mortgage loans, commercial real estate and other real estate loans, as well as our investment in capital stock of the FHLB and deposit accounts at the FHLB. The net amounts available under our borrowing capacity from the FHLB at December 31, 2025 and 2024, were $2.39 billion and $2.15 billion, respectively.
Additionally, at December 31, 2025 and 2024, we had the ability to borrow $1.25 billion and $1.33 billion from the discount window at the Federal Reserve Bank of Dallas ("FRBD"), with $1.41 billion and $1.57 billion in commercial and industrial loans pledged as collateral, respectively. There were no borrowings against this line at either December 31, 2025 or 2024.
Subordinated Indebtedness
At December 31, 2023, the Company had $34.7 million in subordinated promissory notes that were assumed in the merger with BTH ("BTH Notes") with origination dates ranging from June 2015 to June 2021. After the five-year anniversary of issuance, the Company had the right to redeem the BTH Notes, in part or in full, at the Company's discretion and, if applicable, subject to receipt of any required regulatory approvals. Primarily due to the declining Tier 2 capital contribution of the BTH Notes, the Company elected to redeem all but $1.1 million of the BTH Notes during the year ended December 31, 2024, and redeemed the remaining balance of $1.1 million during the year ended December 31, 2025.
In February 2020, Origin Bank completed an offering of $70.0 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030 (the "4.25% Notes") to certain investors in a transaction exempt from registration under Section 3(a)(2) of the Securities Act of 1933, as amended. The 4.25% Notes bore interest at a fixed annual rate of 4.25%, payable semi-annually in arrears, to but excluding February 15, 2025. From and including February 15, 2025, to but excluding the maturity date or early redemption date, the interest rate would equal the three-month LIBOR rate plus 282 basis points, payable quarterly in arrears. On June 30, 2023, in conjunction with the customary fallback provision upon the discontinuation of LIBOR, the rate for the floating rate periods from and including February 15, 2025, on these notes transitioned to the three-month term SOFR plus 308 basis points. Origin Bank elected to redeem the 4.25% Notes on February 15, 2025, as permitted under the terms of the 4.25% Notes.
In October 2020, the Company completed of an offering of $80.0 million in aggregate principal amount of 4.50% fixed-to-floating rate subordinated notes due 2030 (the "4.50% Notes"). The 4.50% Notes bore a fixed interest rate of 4.50%, payable semi-annually in arrears, to but excluding November 1, 2025. From and including November 1, 2025, to but excluding the maturity date or earlier redemption date, the 4.50% Notes bore a floating interest rate expected to equal the three-month term Secured Overnight Financing Rate plus 432 basis points, payable quarterly in arrears. During the years ended December 31, 2025, 2024 and 2023, and with the approval of the Board of Governors of the Federal Reserve System, the Company redeemed or repurchased $74.0 million, $1.0 million and $5.0 million, respectively, of the 4.50% Notes, leaving no 4.50% Notes outstanding as of December 31, 2025.
For information regarding our junior subordinated indebtedness underlying the issuance of trust preferred securities, please see Note 12 - Borrowingsin the notes to our consolidated financial statements contained in Part II, Item 8of this report.
Liquidity and Capital Resources
Management oversees our liquidity position to ensure adequate cash and liquid assets are available to support our operations and satisfy current and future financial obligations, including demand for loan funding and deposit withdrawals. Management continually monitors, forecasts and tests our liquidity and non-core dependency ratios to ensure compliance with targets established by our Asset-Liability Management Committee and approved by our board of directors.
The Company, which is a separate legal entity apart from the Bank, must provide for its own liquidity, including the funding of the payment of any dividends that may be declared for our common stockholders and interest and principal on any outstanding indebtedness or trust preferred securities incurred by the Company. The available cash balances as noted in the table below are available for the general corporate purposes described above, as well as providing capital support to the Bank.
Management measures our liquidity position by giving consideration to both on-balance sheet and off-balance sheet sources of, and demands for, funds on a daily and weekly basis. The table below shows the liquidity measures for the Company at the dates indicated:
(Dollars in thousands)
December 31, 2025 December 31, 2024
Available cash balances at the holding company (unconsolidated)
$ 32,731 $ 47,876
Cash and liquid securities as a percentage of total assets
8.4 % 10.6 %
There are regulatory restrictions on the ability of the Bank to pay dividends under federal and state laws, regulations and policies. See Item 1. Business - Regulation and Supervisionabove for more information.
Currently, we believe we have sufficient liquidity from our available on- and off-balance sheet liquidity sources, however, should market conditions change, we may take action to enhance our financial flexibility.
In addition to cash generated from operations, we utilize a number of funding sources to manage our liquidity, including core deposits, investment securities, cash and cash equivalents, loan repayments, federal funds lines of credit available from other financial institutions, as well as advances from the FHLB. We may also use the Federal Reserve discount window as a source of short-term funding.
Core deposits, which are total deposits excluding time deposits greater than $250,000, brokered, and Certificate of Deposit Account Registry Service deposits, are a major source of funds used to meet cash flow needs. Maintaining the ability to acquire these funds as needed in a variety of markets is the key to assuring our liquidity.
The investment portfolio is another source for meeting our liquidity needs. Monthly payments on mortgage-backed securities are used for short-term liquidity, and our investments are generally traded in active markets that offer a readily available source of cash through sales, if needed. Securities in our investment portfolio are also used to secure certain deposit types, such as deposits from state and local municipalities, and can be pledged as collateral for other borrowing sources.
Other sources available for meeting liquidity needs include long- and short-term advances from the FHLB, and unsecured federal funds lines of credit. Long-term funds obtained from the FHLB are primarily used as an alternative source to fund long-term growth of the balance sheet by supporting growth in loans and other long-term interest-earning assets. We typically rely on such funding when the cost of such borrowings compares favorably to the rates that we would be required to pay for other funding sources, including certain deposits. See Note 12 - Borrowingsto our consolidated financial statements contained in Part II, Item 8of this report for additional borrowing capacity and outstanding advances at the FHLB.
We also had unsecured federal funds lines of credit available to us, with no amounts outstanding at either December 31, 2025 or 2024. These lines of credit primarily provide short-term liquidity and, in order to ensure the availability of these funds, we test these lines of credit at least annually. Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances.
Additionally, we had the ability to borrow at the Federal Reserve discount window using our commercial and industrial loans as collateral. There were no borrowings against this line at December 31, 2025.
In the normal course of business as a financial services provider, we enter into various financial instruments, such as certain contractual obligations and commitments to extend credit and letters of credit, to meet the financing needs of our customers. These commitments are discussed in more detail in Note 19 - Commitments and Contingencies to our consolidated financial statements contained in Part II, Item 8of this report.
Stockholders' Equity
Stockholders' equity provides a source of permanent funding, allows for future growth and provides a degree of protection to withstand unforeseen adverse developments. Changes in stockholders' equity is reflected below:
(Dollars in thousands) Total
Stockholders' Equity
Balance at January 1, 2025
$ 1,145,245
Net income 75,197
Other comprehensive income, net of tax 51,888
Dividends declared - common stock ($0.60 per share) (19,049)
Repurchase of common stock (15,806)
Other 9,210
Balance at December 31, 2025
$ 1,246,685
Stock Repurchases
In July 2022, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company was authorized to purchase up to $50.0 million of its outstanding common stock. The July 2022 repurchase plan expired in July 2025 with the Company having repurchased a total of 136,399 shares of its common stock at an average price per share of $32.13, for an aggregate purchase price of $4.4 million, including broker commissions and applicable excise taxes. All the common stock repurchases executed under the July 2022 repurchase plan were completed during the second quarter of 2025.
In July 2025, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company may, from time to time, purchase up to $50.0 million of its outstanding common stock. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the Securities and Exchange Commission. The stock repurchase program is intended to expire in three years but may be terminated or amended by the Board of Directors at any time. The stock repurchase program does not obligate the Company to purchase any shares at any time.
During the second half of 2025, the Company repurchased a total of 314,606 shares of its common stock pursuant to its July 2025 stock repurchase program at an average price per share of $36.31, for an aggregate purchase price of $11.4 million, including broker commissions and applicable excise taxes. For the year ended December 31, 2025, stock repurchases totaled 451,005 shares of common stock at an average price per share of $35.05, for an aggregate purchase price of $15.8 million, including broker commissions and applicable excise taxes. There were no stock repurchases during the year ended December 31, 2024.
The Inflation Reduction Act of 2022 signed into law during in August 2022 includes a provision for an excise tax equal to 1% of the fair market value of any stock repurchased by covered corporations during a taxable year, subject to certain limits and provisions. The excise tax became effective in 2023. During the year ended December 31, 2025, the Company incurred $91,000 of excise tax related to share repurchases, which was recorded as a cost of the repurchase and reflected as a reduction to retained earnings. There was no impact to our financial condition or result of operations as a result of this tax in 2024.
Regulatory Capital Requirements
Together with the Bank, we are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements may result in certain actions by regulators that, if enforced, could have a direct material effect on our financial statements. At December 31, 2025 and 2024, we and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was classified as "well capitalized" for purposes of the prompt corrective action regulations of the Federal Reserve. As we deploy capital and continue to grow operations, regulatory capital levels may decrease depending on the level of earnings. However, we expect to monitor and control growth in order to remain "well capitalized" under applicable regulatory guidelines and in compliance with all applicable regulatory capital standards. While we are currently classified as "well capitalized," an extended economic recession could adversely impact our reported and regulatory capital ratios.
The following table presents our regulatory capital ratios, as well as those of the Bank, at the dates indicated:
(Dollars in thousands)
December 31, 2025 December 31, 2024
Origin Bancorp, Inc.
Amount
Ratio
Amount
Ratio
Common equity Tier 1 capital (to risk-weighted assets)
$ 1,139,627 13.54 % $ 1,085,860 13.32 %
Tier 1 capital (to risk-weighted assets)
1,155,628 13.73 1,101,766 13.52
Total capital (to risk-weighted assets)
1,255,717 14.91 1,339,735 16.44
Tier 1 capital (to average total consolidated assets)
1,155,628 11.86 1,101,766 11.08
Origin Bank
Common equity Tier 1 capital (to risk-weighted assets)
$ 1,054,279 12.62 % $ 1,075,768 13.29 %
Tier 1 capital (to risk-weighted assets)
1,054,279 12.62 1,075,768 13.29
Total capital (to risk-weighted assets)
1,154,368 13.82 1,239,644 15.31
Tier 1 capital (to average total consolidated assets)
1,054,279 10.91 1,075,768 10.89
Origin Bancorp Inc. published this content on February 25, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 25, 2026 at 20:55 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]