Origin Bancorp Reports 53.6% Decrease in Net Income for Q3 2025

Origin Bancorp, Inc. reported its financial results for the third quarter of 2025, revealing a net income of $8.6 million, a significant decrease of 53.6% compared to $18.6 million in the same period last year. This decline was primarily attributed to a substantial increase in the provision for credit losses, which rose to $36.8 million from $4.6 million, largely due to suspected fraud within a borrowing relationship. The diluted earnings per share for the quarter were $0.27, down from $0.60 a year earlier. Despite the drop in net income, net interest income increased by 11.9% to $83.7 million, driven by a reduction in interest expenses on deposits.

Total assets for Origin Bancorp increased by 1.2% to $9.79 billion as of September 30, 2025, compared to $9.68 billion at the end of 2024. The growth in assets was supported by a 33.3% increase in cash and cash equivalents, which reached $626.9 million. However, loans held for investment (LHFI) decreased slightly by 0.5% to $7.54 billion, with notable declines in construction and commercial loans, offset by growth in residential real estate loans. The company’s total deposits also rose by 1.3% to $8.33 billion, reflecting increases in money market and noninterest-bearing deposits.

Strategically, Origin Bancorp has been implementing its "Optimize Origin" initiative, which focuses on enhancing financial performance and operational efficiency. This includes branch consolidations, headcount reductions, and optimizing the securities portfolio. In line with this initiative, the company repurchased 265,248 shares of its common stock during the quarter at an average price of $35.85 per share. Additionally, the company increased its ownership stake in Argent Financial Group, resulting in a shift to equity method accounting for this investment, which contributed to a fair value adjustment gain of $7.0 million.

Operationally, the company reported a decrease in its employee headcount to 860 as of September 30, 2025, down from 929 a year prior, reflecting the impact of its efficiency measures. The provision for credit losses was notably high due to the fraud incident, which has also led to an increase in nonperforming loans, now totaling $88.3 million, compared to $75.0 million at the end of 2024. The allowance for loan credit losses (ALCL) to nonperforming loans ratio stood at 109.04%, indicating a cautious approach to managing credit risk.

Looking ahead, Origin Bancorp remains focused on achieving a return on average assets (ROAA) target of over 1% by the fourth quarter of 2025. The company is actively monitoring economic conditions and adjusting its strategies to mitigate risks associated with fluctuating interest rates and potential economic downturns. The management believes that the steps taken under the Optimize Origin initiative will position the company for improved performance in the future, despite the challenges faced in the current fiscal period.