Origin Bancorp, Inc. reported its financial results for the second quarter of 2025, revealing a net income of $14.6 million, a decrease of 30.2% from $21.0 million in the same period last year. This decline translated to diluted earnings per share of $0.47, down from $0.67 in the prior year. The company's net interest income increased by 11.2% to $82.1 million, primarily due to a significant reduction in interest expenses, which fell by $15.4 million. However, total interest income also decreased by $7.2 million, reflecting lower average loan balances and yields.
The company’s total loans held for investment (LHFI) reached $7.68 billion, marking a 1.5% increase from the end of 2024. This growth was driven by a $225.7 million increase in mortgage warehouse lines of credit and a $137.8 million rise in residential real estate loans. However, there were notable declines in commercial real estate and construction loans. The overall loan portfolio's quality showed some strain, with nonperforming loans increasing to $85.3 million, representing 1.11% of total LHFI, compared to 0.99% at the end of 2024.
In terms of strategic developments, Origin Bancorp executed a bond portfolio optimization strategy, selling $215.8 million in lower-yielding securities and realizing a loss of $14.4 million. This move is expected to enhance long-term yields and improve overall portfolio performance. The company also repurchased 136,399 shares of its common stock during the quarter, reflecting its ongoing commitment to return capital to shareholders.
Operationally, the company reported a decrease in total deposits to $8.12 billion, down 1.2% from the previous period, driven by declines in interest-bearing demand and time deposits. However, money market deposits increased significantly, indicating a shift in customer preferences towards higher-yielding accounts. The company’s total stockholders' equity rose to $1.21 billion, bolstered by retained earnings and other comprehensive income.
Looking ahead, Origin Bancorp aims to achieve a return on average assets (ROAA) of over 1% by the fourth quarter of 2025 as part of its "Optimize Origin" initiative. This strategy includes various efficiency measures such as branch consolidations and capital optimization efforts. The company remains focused on managing its liquidity and capital to navigate potential economic uncertainties while pursuing growth opportunities.
About Origin Bancorp, Inc.
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