In their latest financial disclosure, a prominent bank has reported revenue figures for the first quarter totaling $82.4 million, which fell short of the consensus estimate of $93.61 million. Despite this revenue miss, other financial indicators showed positive developments.
The bank's net interest income reached $78.5 million for the quarter ending March 31, marking a slight increase of $110,000 or 0.1% compared to the previous quarter. Notably, this figure represents the highest net interest income in eight quarters, suggesting resilience in the bank's core operations.
Additionally, the bank experienced growth in total deposits, which climbed to $8.34 billion by March 31. This increase of $115.3 million, or 1.4%, from December 31, 2024, indicates a strengthening in customer confidence and banking activity.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Origin Bancorp Inc (OBK, Financial) is $43.00 with a high estimate of $44.00 and a low estimate of $42.00. The average target implies an upside of 35.48% from the current price of $31.74. More detailed estimate data can be found on the Origin Bancorp Inc (OBK) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Origin Bancorp Inc's (OBK, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Origin Bancorp Inc (OBK, Financial) in one year is $36.55, suggesting a upside of 15.15% from the current price of $31.74. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Origin Bancorp Inc (OBK) Summary page.
Key Business Developments
Release Date: January 23, 2025
- Return on Assets (ROA): Targeting a run rate of 1% or greater by Q4 2025, with an ultimate goal to be in the top quartile of peers.
- Earnings Improvement: Expected to improve by approximately $21 million annually on a pretax, pre-provision basis.
- Banking Center Closures: Announced the closing of 8 banking centers, resulting in an annual expense reduction of approximately $4.6 million.
- Expense Reduction: Additional annual expense reduction of approximately $6.7 million from production groups.
- Net Charge-Offs: Year-to-date net charge-offs at 0.18%.
- Provision Release: $5.5 million provision release for outstanding loans in Q4.
- Allowance for Credit Losses: Decreased from 1.21% to 1.20% of total loans held for investment.
- Diluted Earnings Per Share (EPS): Reported at $0.46 for Q4.
- Deposits: Down 3.1% during the quarter; excluding brokered, deposits grew 1.1% linked quarter.
- Net Interest Margin: Expanded 15 basis points to 3.33% in Q4.
- Non-Interest Income: Reported negative $330,000 in Q4, impacted by a $14.6 million loss on sale of securities.
- Non-Interest Expense: Increased to $65.4 million in Q4 from $62.5 million in Q3.
- Loan Growth Expectation: Mid- to high single-digit loan growth anticipated in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Origin Bancorp Inc (OBK, Financial) has implemented a strategic plan called 'Optimize Origin' aimed at achieving sustainable, elite-level financial performance.
- The company expects strategic actions to drive an ROA run rate of 1% or greater by the fourth quarter of 2025.
- Origin Bancorp Inc (OBK) has identified and is executing on $21 million in annual pretax, pre-provision earnings improvements.
- The company has successfully managed deposit costs and achieved core deposit growth, excluding brokered deposits.
- Origin Bancorp Inc (OBK) is investing in its workforce and systems to enhance productivity and efficiency, including a detailed banker profitability report.
Negative Points
- Deposits were down 3.1% during the quarter, although excluding brokered deposits, there was a slight growth.
- Loans, excluding mortgage warehouse, decreased by 3.2% linked quarter, driven by strategic focus on client selection and elevated paydowns.
- Classified loans increased to 1.57% of loans, up from 1.35% in the previous quarter, indicating some credit quality concerns.
- Non-performing loans increased to 0.99% from 0.81%, reflecting challenges in loan performance.
- The company reported a net expense of $14.7 million during the quarter, impacting earnings per share by $0.37.
