OBK - Earnings call 3 2020 | Origin Bancorp, Inc.

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Operator

Good afternoon. Welcome to Origin Bancorp, Inc.

Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Chris Reigelman, Head of Investor Relations. ahead. go Please

Chris Reigelman

slide thank our and of being us. with with is to will Good this during press you release issued presentation. the along website, earnings on copy that yesterday We we available refer morning, our for presentation afternoon, which a

includes and to of the Slide which non-GAAP our statements harbor financial slide of refer safe regarding use Please presentation, measures. X our forward-looking statements

www.origin.bank. our on Please phone, by note slide slide our please during safe website to are and available statements the Page at filed release. today's note For available those joining our subject made presentation earnings with the harbor also presentation the All our earnings that on is harbor comments safe yesterday in call SEC. are X release of statements

by Drake Officer, may Preston I'm Brolly; Steve be address our Credit we'll Banking and you of President any Bancorp's Origin happy Chief to and our joined Financial Chief Chairman, this Crotwell; Hall; Mills; presentation, Lance Officer, After have. and the morning Chief questions Risk Origin Bank, President our Jim Moore. CEO, Officer,

At this the call over turn time, you, Drake. to I'll

Drake Mills

Thanks, Chris, and morning. good

culture quarter solidify organization we right our credit the to position confidence throughout that defined by not the right results only relationships strong and right third people, markets, the on and capitalize capital to continued opportunities. a on have relationships strengthen in our supported our infrastructure, This Our great in unique to quality detailed remaining work through but Slide this while is through X. pandemic shown

EPS. provide came over a billion, increased strong X. of later while in starting Total diluted $X.X the assets We'll $XX $X.XX but results net on get want quarter, our presentation, detail overview of or at income into to Slide I million in high-level to for the more

$XX.X quarter earnings million a by income, the finishing prior company, And pretax quarter. net for $XX.X Our for million. high from up the approximately million at the also $X.X to our quarter increased, our pre-provision interest is

through company. uncertainty of there are XXXX, in spots the many the bright markets Even throughout our

focused warehouse marketplace. teams have relationships, Our the the our rate disruption the advantage in remain job strengthening on of mortgage extremely current and capitalizing bankers on environment done incredible taking and of an and mortgage

opportunities As we we pandemic, of protecting sheet to safety health remain of our since to communities, balance customers, of a the to the many I'm our the beginning quarter employees stated proud taking have us. the and partner and results manage expenses. and before optimistic committed and steps to being of within our the the about

to customers how to over turn discussion support Lance? through it go we as our on Lance and I'll as loans well deposits.

Martin Hall

I'll X. we've Drake. start on clients' needs smartly financial the use pandemic. managed and think of We forbearances Thanks, psychological this during Slide our through

proactive when communicated bankers out customers in our pandemic extremely we've past to our first quarters, were the over X hit. As the reaching

For COVID or X% almost $X loans at the days of later, XX under reduced quarter, second we for held of billion forbearances investment, XX% excluding investment held approximately first PPP. for reported PPP. were loans to loans less forbearance our XX%

less to more X% PPP for again, out even forbearances investments, than backing those reduced loans we've see, can of you As held loans.

quarter held Looking loans for decrease of investment. into as little forward X.X% we forbearances to believe those as X, could

a foundation all the first have teams of I'm of Relationships of how company, clients. been responded the markets our extremely our bankers consistent proud and our have delivery year. we throughout with are and who of on over at the hyper-focused X our as dialogue months are

and to trends, cost deposit deposit further deposit X mature. drive reductions highlights our continued time as down costs Slide opportunity deposits

end points from basis of to our cost the at QX, in the points including year total of XX we deposits basis XXX growing quarter. have of $X.XX billion at year-to-date, the While deposits $XXX beginning the lowered third million

deposit time over into reduce time maturing average huge of basis costs on of days renewals continue the to as in our points, our opportunity continued next past XXXX weighted rate to yield rest been through a deposits the priority Effectively be XX the year. which average will costs has QX indicates XX Our X.XX%. funding managing is and

We also success portfolio. continue have we XX% driving have $XXX approximately noninterest-bearing deposits, to as to our of million NIB the grown year-to-date, bringing in NIBs mix

with in shows also on dislocation our client significant acquisitions, year-to-date the category. by from Moving we've loan to win portfolio delivered where new ended and a slide the for loan effectively [ able both the to growth ] needs billion This Slide seen warehouse been warehouse us. X.X% we have in outstanding grow be market warehouse outside shows balances, rates continues quarter driven X we over and PPP. Mortgage market. $X We as of by derived to have

through working should leased integration of partnerships, expansion platforms the strategic lending the models From perspective, we well as focus management, as technology, making on improvement. smart that data manage automation -- be customer staffing use a company drive the experience real consumer Along of estate, we're to on commercial in drive to of expenses robotics diligently in also planning remain should focused and better areas investments in process with and create and efficiency heightened and vendor such contracts. technology a as

relationship should ourselves on the us well to continue growth, for and position technology, future. management focus to margin expenses Our serve

to portfolio. Jim I'll loan turn Crotwell over to it discuss our credit and now culture

Jim Crotwell

Lance. Thanks,

assisted current a those As we protracted closely that monitor nonessential from have the experience energy, sectors to the reported, sectors more recovery restaurants of could hotels, downturn, previously specifically industry continue economic we and living. retail,

of ratings. completed that economic investment. external ensure appropriateness like recently approximately validated monitor internal the have of to initial point these ratings. review, beginning risk which annual total the is of see impact out I'd we sectors downturn loans which to the reviews for of we our assigned loan on sectors can particular pandemic, Since and our As Slide have conducted these the focus held of the XX% totaled XX, $XXX to million, you

the by its are quarter diversity. reductions As last our we portfolio resiliency Lance mentioned, modifications driven is of across which the during portfolio, are COVID-related with in our believe and the with pleased we pleased

information on On our PPP. $XX X.X% held Slide of of net we or total XX, sector, which loans million totaled for hotel investment provide

We XX% feel in optimistic sector and the the about continue loan-to-value the given this pre-COVID these of $XXX average liquidity of loans. low of excess to from guarantors million

with total sector, of outlined continues is of net on as held energy The which investment Slide well, to perform PPP. XX, $XX.X X.X% reducing for million, to loans outstandings

indicated direct have and we have we in exposure. past, exploration As production the no

$X.X one been Our in loans continue totaling nonperforming million, relationship a has to be comprised workout. of which this segment long-term

our included have million, $XXX market, strong and retail of are representing segment during debt sector, which service coverage Overall, and on increased $X this driven nonessential opportunity million our we debt XX% quarter, at On by Slide XX, anchor million X.XXx, tenants, ratio Houston totaled ratios our a the coverage, X% provided support. low service portfolio. information loan-to-value strong a and significant in which strong loan-to-value respectively. pre-pandemic Overall, $X.X guarantor

reflected first quarter, Lastly, by sector a nonperforming and in the the and placed this loans that nonaccrual of this dues past are during single year. was on quarter previous as in credit primarily driven

especially reflected as pleased X.X% sector, by or XX, on no portfolio, been total restaurant dues million I've as this loans. of no Our of and totaled nonperforming past evidenced performance and with $XXX the resiliency loans. Slide

representing of on of quarter reflected living XX, assisted of million totaled PPP. X.X% Slide as as end, loans $XXX Our total net portfolio,

one reduction increased exiting this quarter were we for reducing we While funding continued exposure segment. the of end, segment assisted relationships, portfolio in will projects to on of in quarter on $X.X a in in successful under and living this to million which million in to this due result classified focus assets. segment construction, our $X.X Subsequent our

of was the reserved as fully While moderate this a write-down of have related we to the during will QX X/XX. write-down for credit, amount

a our recap asset quality provides XX trends. Slide of

and loans primarily can X.XX% you or days positive, see, net PPP be nonaccruals. coming at As driven our to past of loans due due more continued by XX are past in

year. As nonperforming XX loans at quarter down of loans the from nonperforming beginning X.XX% of the PPP, net from down to of loans, X.XX% as of X.XX% from June the and ended total

quarter to the and Total of charge-offs an rate year-to-date As which of loans for the levels remained resulted during X.XX%, net anticipated, X.XX%. annualized in classified reduced annualized charge-offs quarter. net stable of criticized

latter for we period with with extension reserve loss X.XX% for credit part loans prior results losses in to which loans investment quarter, in This an net this we the the our within reversion rates of part warehouse beginning allowance and of the level XX held months was for XXXX, estimated portfolio, of economic to of investment forecast. held COVID-XX from the in a to PPP did of to increase of company's historical latter will return due X% X.XX% in of CECL reversion that mortgage the assumption The XX increase from the Lastly, impact contemplates of of the combined XXXX. reserve loans. primarily in on loan

forecast continue status with a the is prudent be current conditions predicted. severe build not may recovery in uncertain. be Our suggests as think to But portfolio. economic it allowance, remains of we duration the originally to The as do our while our decline we performance pleased of

I'll to now. turn Steve it over

Stephen Brolly

XX, to Slide trends Jim. income net Thanks, and can related see our on margin. you Starting interest

along lines $XX.X X.X% mortgage cost QX. increase was for of increase of Our the this main million deposit net quarter, was warehouse increase interest The income an driver an from in savings. credit, with of

warehouse the contributed increase top nearly the loans In see interest $X.X in can million quarter-over-quarter. net an waterfall, right income on you

just income. largest costs, on basis, Our was adding mentioned interest earlier, as next interest over continued increasing contributor lowering focus the on to $XXX,XXX net a Lance income linked-quarter net deposit to

did on better by increased X points. cash, a margin a From we deployment job quarter which perspective, our of margin basis this efficient

basis deposit classes, excluding reductions reductions compared on due the a to of X.XX%, slow higher-earning of Home mentioned At the around mix increase margin was the shutdown. out we to deposit volume quarter last nondeposit quarter. PPP, basis expansion Bank cash into in asset lift lower rate in credit in and Federal received prior We driven and warehouse QX XX advances the by trends X we point Loan and point ended is the to The point end Our uncertainty thing balances economic points had from basis to other X QX. cost NIM X, our up lines funding NIM increases. redeployed a the quarter-over-quarter. increase NIM due -- at mortgage

yields, loans trends of a showed for we profile of XX, Slide held costs investment. On and

and our in rates You points at basis XX can not loan see yield QX, or loan portfolio focus points. X from see in points lowering on XX% excluding costs, yield we the with reductions, loan continued of the PPP. did falling decline significant basis the coming cost the yields only impact had saw in the on X in a deposits continued the With quarter, basis deposit prior QX how, reducing

right and our fixed bottom prior at has not end, quarter shows graph mix changed rate The which of significantly loans from floating quarter.

drove revenue On had Slide Pre-pandemic, a I income. typically this historically we about XX% of on noninterest net million, noninterest percentage quarter. income, down $X noninterest quarters, a really of want about than mortgage, over well mortgage the million while was XX% and past touch from couple a the greater performed quarter. $XX of in have due to Total our reduction to approximately from X from which high XX, points to second noninterest income originations we income sales QX,

which income included in other includes due in asset income increase million miscellaneous fewer Other $X.X $XXX,XXX from in quarter. security decline sales. in a fee income other $XXX,XXX to category income swap this an on losses significant miscellaneous sales, and changes a deals, decrease noninterest income increased Other in

covers XX noninterest Slide expenses. our

at leverage, progress operating quarter. the in we over see the especially current we the X can quarters, trend As the in look past most

increase increased within few metrics, did in expenses improvement on and based communities. a $XXX,XXX, these driven $XXX,XXX see current our Advertising in we in marketing While by our quarter the factors. contribution

a earnings launched in our quarter communities PPP recall of a portion investment initiative with fees, strategic you'll proceeds second our which that strengthened the our As from from call, serve. we we

items, X that $XXX,XXX QX, account which believe to of $XX the million the assessment able $X.X normalized noninterest first in per due with on growth quarters. basis, in We in up million $XXX,XXX we grew expenses will left. expense, was in quarter, primarily and this other asset the a be seen basis. between nearly on in hold expense regulatory quarter coupled X was increase charges a a litigation our the settlement expense for Another to $X These million quarter go-forward million $XX on chart in the

I'll to now turn Drake. it back over

Drake Mills

Steve. you, Thank

completed levels strengthen an end this our As we position. successfully quarter, capital we at capital further opportunity at million remained timing this growth was ratios, company well We issuance look as great The and total attractive, capital for our we capitalized notes took of opportunities. subordinated the to bolster the well in month action of and early The $XX this us our a to right. was month. holding future was market support as

see bank, assuming impact issuance to the the can proceeds XX total the a company of downstreamed Slide has risk-based the You the bank. and at are the capital that on to holding portion

Origin. come also he critical and years announced for Executive its Officer, awesome own has shown risk mine XX our X-K through that the Risk we institution a credit an at diligence Cary been has excellence upcoming building In has over success the can been building released retirement yesterday, partner in the instrumental X of of multiples Davis. and Cary been continue in Cary cycles. credit for to and years of for function decades the of our on past with same

our we operate, Credit Risk the in Officer instrumental Chief role to and service. bring the the this has we Moore Crotwell Officer experience Officer. due thank transition, to XXXX, Preston of these and and this through earlier Cary year. Chief the continue complexity Now increasing assumed year, Credit of guiding Both Preston roles we roles which Officer Cary to their in us environment of his this and for Risk Jim banking of guide been earlier separated growth role of Jim the and assumed of functions Chief Chief company. will decades in and

in where finished the We and quarter. our total I'm interest the net billion loans, in assets, warehouse income pretax mortgage metrics to on and and company our in year income, pre-provision shareholders strong of basis margin, throughout special the billion and $X crossed tirelessly $X posted success all record we record and worked employees customers, extremely the our to loan our portfolio. kept of banking credit proud stabilization expanded daily had deliver performance thanks experienced a another communities. for who A across

for I'll call the open questions.

Operator

Instructions] comes Our first from Brady question [Operator today with Gailey KBW.

Brady Gailey

wanted to growth. with start I

mean mean, core here the at great I here? had think warehouse And that done segments, loans on a all your the I stable just could think downside from then warehouse. basis going You in and kind of ex loan you has from the some well. growth forward, about looking do you Do you those think warehouse? it's core both growth, warehouse? you so see How X do in

Drake Mills

here, Yes. let and answer A me Brady, first thanks. of question. things your couple

impacted certainly mid-single-digit think going from I growth quarter. into loan couple XXXX, we A which things is point. area. on see in to that's confidence, the $XXX creates think especially the Line down at C&I, I this million of growth utilization, low- the

big the energy, been to like just in year a We opposed was Certainly, market. has is down also out million just it's Mortgage has now it win. down the -- we in and worked to. migration natural started million, $XXX $XX.X a a progression at warehouse it where

talked our look you based to if outstandings we dislocation -- what think, last $XXX market numbers think think, the advantage We've at at environment about taken, I a I you strong -- quarter, I when if down, normalized have $XXX slows and of look million -- this, million. But marketplace. of in in and I

Our team well. has done extremely

picked XX to running up have last bolster clients our close to X quarters XX clients. relationships the from We about in numbers to significant

potentially to million range. the mortgage down, in see million in $XXX slow things range, to and year million million probably once normalized number that $XXX finishing see $XXX we So the the $XXX warehouse

So well us. up it's for holding

right have And now. starting of some good show signs Certainly, are companies -- pipeline C&I confidence. we so we see our activity to some

get XX% medium digits to not in range. and/or certainly, end higher low single-digit on of -- back just to that single the think track, but the we we'll range certainly So

Brady Gailey

kind helpful. That's to about then And higher X.XX the reserve you've quarter. now. of to I good it Right. was been you're range, in the a little talking [ X this see where there go ] basically know

Or do over to reserve is a the to that build think you continue time? bit you think little do over? So add you

Stephen Brolly

of to quarter. deterioration industry We've Yes. or on any based credit got migration and type and mixed anything. this signals planned certainly be It's going certainly deterioration interesting the

on model the metrics your the But that the what you from you thoughts going some think things, other do increases you COVID So model. fact our market. have to potential that confidence, to that have and have and those around hand, kind I to at some renewed the look the like. in looks let's see numbers, a are And in the administration, lockdowns the fog come back and up of of certainly change about peak type say,

which would build supports going ] But that we could the X.XX see it. up. saying in see today quarter, to us at that still certainly And split I'm ] if we model in X.XX certainly could wrap I potentially that any between we don't slight number and a [ would fourth where that way. point, I say, the So number are [

Brady Gailey

All then earnings for right. the at in if I conference heard for point. was on you wondering this conversations. a and little kind talk season, about some M&A finally in take of this your calls we've what other same just me, uptick guys the M&A CEOs was that was just And

Drake Mills

helpful is the a especially it the to around I to We desire wouldn't way partners think to really strong have some we say ours franchises. uptick. perform the for focus Certainly, today. us of would deposit an -- in M&A be perform, process, extremely

desire active. I there But continue a uptick desire of ours -- to see So conversations. ours. with we're it. stay And those this an to don't at strong is and dealing in I multiple that could continue that it's point, is we we of have But certainly, a to opportunities, say

Operator

with Matt come Our will next Stephens. Olney question from

Matt Olney

customers. color warehouse the the it, you mortgage how think now And as call far Any new saying range normal Want normal as many XXX more XXX be, times, to to customers can you're mentioned times I And mentioned, you commentary. on onboarding you've added? add Drake, some to you in XXX. circle back XXX. was would

So customers the warehouse in that are of saying number you've the doubled recently? more you

Drake Mills

Yes.

about core certainly top use been not XX. more noninterest-bearing is round to -- we're clients, XX last next the they going of we that and stronger X interesting better -- XX to -- additional numbers seem what's stable, Let's the this be a dealing customers. I'm But onboard XX, from adding about were Probably here. We're had standpoint Today, larger have deposits. that with time we customers. lot this year, deposits to

I'm in So of that's and belief confident why utilization going to the be. what statement our is

Matt Olney

Okay. And what out Drake, new these figure people, topic new adding adding on leverage with these about sticking the on on customers? you wins. the Just warehouse, cost the trying Are operating same the to associated new systems?

Drake Mills

Yes. us. big for that's a Matt, win

extremely there. are drives We Ken and efficient team. Johnson Jason that

backroom a that Our by that's is driven team, awesome. completely lady

person additional all. one added at for through we've this us. a see We That's why process. a think I buildup expense it's in win don't huge

Matt Olney

paydowns than more we could third expectation? more what any seen that growth. quarter, on there? you color from Okay. And the be it and the ex It slower Can originations the strength PPP. third talk sounds in on ex warehouse or watermark in may then the Great. maybe than like higher high accelerate growth quarter about XQ the you achieved again. Was levels achieve tough to that circling Just loan that just the back or we've saw

Drake Mills

CRE. I Yes. It's the looking There that think some And in. we're little in originations. a willing quarter the not We portfolio what growth to we're to activity difficult residential based really the underwrite. obviously similar No, it expand a pipelines, for and fourth was market. that on the at could in more just are seeing see and areas we -- strong outcome strong saw

since fourth to the staying our see a the in but somewhat -- repeat of of we're true third COVID, fourth. I So do strategy in the

Matt Olney

on capital. Okay. just And lastly then

hear that and specifically weeks thoughts Love You mentioned capital program. raised about more deploying you capital in a some the thoughts your remarks that about to buyback few ago.

amount current the program? of the is. what activate buyback us authorization what's to remind that appetite And Just

Stephen Brolly

let's a really a that more little I'd perspective. like created back say, back bit goes would to from up make this we from to And yield when a because XXXX, stock a strategy dividend our strategy, Yes. attractive

the which to capital needed to dividend And we is the what buyback dividend communication It's needed continue established think, the we Board, this and are I year we focusing got $XX.X continue strong just We felt to and where we which So we been in to portfolio, to, with it position on perspective program. do start that -- opportunity." confidence come, in need through XXXX, each to what runs basically do like we've for did have the this us we $XX see next that that. a a on allow buyback. on slowed It felt the year, really did use. say March. have process, we that a or We'll That Certainly, we a I suspended into buyback where a the was is we performance from July million table that And support, to we'll quarter. "Hey, of that in that that it would -- in analyze remaining tool. has as have million XXXX just strategy, was us table.

for loan opportunity felt and with why to M&A. that at could slow a we total position just debt be keep focus the one total market growth that which was our capital came us at steep in the to focused which bridge growth X seeing the additional we strong are of to think see with allowed we give We on actually refreshed XXXX. Tier us had had X some from capital, that mortgage us certainly, X to pullback stay a in capital, ratio, Because game looked Tier us opportunities. where on what standpoint would have want We down a capital warehouse, the did didn't take debt in we sub when on, But -- especially capital. We opportunities think, sub perfect, certainly, on focus time, we those really continuing. was, gap, The side. adding was planned opportunity, some to the I advantage opportunities Tier that and

The unfortunate with successful our multiples, way to can tough think aspect they high-quality the targets. M&A we it's be that significantly is are, with

best in So out recognize this just a now. puts position there our right buy the us us for that to is stock

move So it's to the in and market fourth say, at as I prudent us through the buyback let's be we to in of quarter continue look couple is. get if think going really active, potentially to opportunities, a for continues like it

Operator

with Our next Brad from question comes Milsaps Piper Sandler.

Bradley Milsaps

quarter. as slightly ask PPP, Just the interest you terms did about of to on interest to of of wanted continue guys the to margin. can I good kind tell, warehouse, of to you your of else in do maybe you look holding job seeing best maybe there, of loans you're pretty looked, ex or whatever stable throw want down net It and quickly XXXX? ex that about what -- from Can net kind that linked sort what in into margin that of a talk you sort relates pretty ability how out to kind

Drake Mills

Yes.

deposit job, team our awesome think did I on an especially the side.

feel deposits environment. in have an room continue to reducing go We extremely some competitive to we like

for remind will especially think, we sub pricing with of, could the see our side, impact, away that in this we loan the a everyone very had point if the the that things I impact deposit drove margin, and feel this on second fourth side, X But some that margin see could margin with want I probably at I quarter quarter. expansion lot where with. like say our we NIM that do which the we feel the benefits to with On debt, our pricing to strategy, fourth comfortable do point, that we basis quarter feel that strength. look of that, some quarter a takes that

seeing So XXXX. of we'll there, hopefully, then a because in we And but in a debt, similar the quarter. wins maybe start sub here basis this very point, saw or at pullback to second some what point

Bradley Milsaps

Great. positive very maybe the a And second by business. retail the swing quarter in as on That's just impacted follow-up, know just then for helpful. banking big was a Steve, mortgage I second MSR. the

Just then versus to the kind was quarter. the that XX-Q, third just kind in I on gain second what quarter. that kind the sale And margin third curious will be of in that loan -- of curious but in impact compared what how the your was. of the know

Stephen Brolly

The little down. less volume this and impact maybe hundred have not impact we -- was all. The quarter, much sale a higher on was on and gain dollars couple a had thousand on a originations large did an neutral, It pretty bit sales. MSR at

the X. really MSR X. it market. the why down really came down been to you're have QX, then, we that's would lower, And that XX So went dramatically. in much from pretty -- to X changed And kept hasn't MSR with since if maybe or line. XX, that I a expecting little MSR go really X But after mean, March after

the in We million to about expect we $XXX fourth production $XXX forward, and this Going quarter. had about sales. million quarter, $XXX in million

second is quarter quarter not fourth historically the we're next expecting and that's the So what and as as also. strong third,

Bradley Milsaps

a No, kind that. to know that's of and How lot I follow-up Okay. eventually, start years of making gain Obviously, to will changes there, guys you trying couple to of spent with lower. think rates the get more year helpful. efficient. contract a of just going as refis And last really does in Drake, mortgage do this this impact the 'XX, what kind much a of sense more can trying bit. you market get you what I'm to a be just year a Great. did great little to share year? you relative

that kind around you're kind of Just business. curious of thinking what

Drake Mills

Yes.

on continue because of Mississippi share can extremely market, really we Louisiana. teams in and think done I market that's standpoint Monroe from are like the well. Especially pace lift-out we our in a

-- that to top a are running Monroe in our that in $XX of producers some $X and million Ruston X have We are million month.

So we still have opportunities.

Houston Our expanding origination side. the at looking mortgage is team

origination I to with continue come showed really this this have win And mean, I still as they'd XX% -- see quarter, our pipeline obviously, down, can strong. like we volume. total of we So think, about we in and volumes I strong, think

I So just way. point, at this will come continue share to think market our

Operator

from next with Davidson. Our D.A. Kevin question Fitzsimmons comes

Kevin Fitzsimmons

you're those starting to curious other expect to about a what down deferrals loans, decline and on little you're in terms credit, deferrals or I matter, I'm just the noted I'm list, loans, mention seeing any migration that notable whether special continue. of migration watch for to substandard, any drilling the remaining any or see. curious that impressive of further you in deferrals to -- to former that

Drake Mills

of tell As that you feel-good that I at banks, migrating We we small -- a don't aggressive are the It's company company this continue have a it deferrals a is report, in And forward, feel-good them. there's this say large seeing a to if not And heard C&I that must for all. businesses moment we're been take at moment. not at can move would CEO could a games. with these approach and Thought a a stabilization. going we that I play it to kind good it's It's But degree. were deferrals this of point, standing on companies. they that and a way I we're are focuses to us, we supporting we're that as was and that interesting support I certainly firms, real. saying slap kind think is

it companies that quarter purge ourselves were last these can of to and focus a we mine a on moment companies, that we with return once some environment. and, go had very is a to addressed problems. We're to things. we I these of on feel-good viable Now I and type not But that. aggressive We to we of going some do these said of to being like normal said, focused continue keep everything

So am just Jim the the but minute migration -- to I let going are. of Crotwell through some kind of walk what and for Jim? a components

Jim Crotwell

seen very you, Really, strong portfolio. Thank in Drake. resiliency our we've

as and in base. really watch anticipate overall the mention in Obviously, pandemic, ratings mentioned that presentation, continue criticized you the been loan annual Slide our this As our our And change. during to last over were total ratings quarters validated have see risk internal we pass of internal special we as stabilization the to and all on the by perspective. our just level stable can look loans forward, asset XX, category external X of very look no category in as And that and been we've we risk review. pass proactive classifieds

portfolio, So we right our do seeing now, significant of within and we're bit stability shifts. anticipate good not any a

Kevin Fitzsimmons

where from the want your make And $XXX billion that customers, that's I'm does few year million about the in million. $XXX runs -- -- see your $XXX from million The that that the mortgage to million. to One lines you Great. by a with I were credit, make out billion thing -- -- going basis a year, the on But per see back $XXX the $XXX want an up just helpful. so pickup which million mean of to $X $XXX I'm go could understanding more number follow-up, to then just was million $X on it to like environment, the I on going little commentary slowdown, comments over I sure it Okay. warehouse normalize a that -- end you basis said. I over that to as $XXX the And I'm in quarter, to that saying million from you sure that an and will being million, $XXX commented $XXX million of new Drake, you you're That's basically there average correctly. next want the understanding in to, to because quarters? ramps just correctly. then down we're and end-of-period at normal -- quarter. of

Drake Mills

Yes.

forward at a kind run a confusion And there. to $XXX created of slowed dislocation with $XXX lot I that a environment current in said to slowdown. that take a would short But $XXX $XXX we'll a market, have, comment we our sorry, million ability outstanding. base that And of now like that of we'll XXXX, our a like end to the My see comparing up in On pre-XXXX, time a environment that very quarter. in million look the I to with where $XXX said, million. normalized million as million $XXX we that going would we a to customer $XXX million forward customer and the we normalized is move to market advantage base. to environment, fourth I in the like of think end looks start about $XXX period there with million million normalized

Kevin Fitzsimmons

That that cleared for great. That's me.

Drake Mills

did good job I Well, I on I apologize, think that. a don't

Kevin Fitzsimmons

last number going very just fees. quarter from one that that to -- was where was see you a number me. on quite me, the this One went for swap guys low and No, a That a high just -- forward. No.

Stephen Brolly

last of quarter highest we've Kevin, one the had. was

last a it a it so we second ever had. say, look $XXX,XXX just month, highest $XXX,XXX and normally And at quarter, the And "Maybe was month." we sometimes

quarters least bit them, would to so be if -- would But be guesstimate And took a it lower. is good forward, and this quarter place going think would little going you average that I both it at be a forward. where

Operator

Wallace next William Our with Raymond Instructions] question comes James. from [Operator

William Wallace IV

question expense remarks, you kind XXXX the the you mean think hold First your it there at seasonal hold you would to Did fourth could on 'XX? of the then pressures prepared in that that $XX you you million. $XX for said or normal that think you quarter, for expect could Steve, we line. and line million in

Stephen Brolly

is both. That next right year. be now for would where be for That budget for would the

William Wallace IV

activity contemplate that? variable that mortgage with and does how And all comp the associated Okay.

Stephen Brolly

second had did $XXX less last next we and said activity mortgage million. about million That on an year refi just I would $XXX the the little in than be the about would of million quarter, a third quarter. But be -- and $XXX average, we to bit all because

first up think the to XXXs, quarter may we somewhere and be will third we back year. million, in be $XXX So low next quarter $XXX million, the to closer

compensation of does this originators, year mortgage also that had effect also. compensation we into take for lot a but the the So

Drake Mills

to created a could, to confidence have opportunity has really we've discussed, because in and we've -- second in noted we add for have to a the as if had, I as as that lines in growth looking through office some team offset that real for and his XXXX. all Dallas markets, have active across quarter, expenses at moves, a we strong significant still like deposit with in made that that continue we'll that's core strategy The I'd moment just what think to is we Wally, great and our market. I Lance another Hall in extremely us is

added there. So expense some we'll have

moving The communicated, Houston, and in opportunities some and up and -- we've also ramping a We be offices we'll as from picking standpoint Woodlands lending up there.

all So expense to on strong the in that offset some trying and side. we're baking management really that with

side opportunity on So for to expense growth necessary but we we see this like feel active that. be be cover to able organization, in the it's very still to

William Wallace IV

and like on year? we'd -- I yields bottoming expand is Okay. could in think start fourth back drive helpful. That's will loan liquidity? Or you that But costs said what there. to moves Drake, out Does that a deposit quarter, margin that deployment the margin, of where that quarter. net so, you on interest probably you it from roughly if to you second down next is get help feel see you're And mean was expansion? that some then do you the expect just said you margin would believe, wins,

Drake Mills

opportunity cost pushes a more what have are grow focus us I significant think we going of year, loan Certainly certainly is on see core Bottoming side. through there. the being deposits next to than be deposit because to for with out of incentives a headwind that some

some those pricing -- is So tough point. for loan because we're I we're where where going some at the But teams in at side -- to pretty come on be competitive where to that's to that this our handle customers. focused the this we're stay think able -- is the us point concern yields to taking of focus seeing still

is really, work, strategy is be I of quarter. the put that on and win some working cash if to think So we'll our we liquidity focus to can this is potentially through being utilization on the which that able

William Wallace IV

quarter, just the like be just ratio. feel loan-to-deposit and have Obviously, at would rewards the bank. there out. a picture. don't And to year deposits look deposit perspective? other that a of what if took on Do successes? last you put on maybe deposit it question, at brokered year going dollars myopic checks of I Gosh, stimulus very Okay. stimulus bigger that balance ago, the you if was feel picture, -- core then is what's you PPP reaping I or that the year a we some focus do the brokered And looks know sheet? core funding. Can and some come like you from But then it you're Drake. your peel impact just some of at talk back having funds a kind deposits ago on or growth, bank the growth PPP have so kind the you like deposit to of muddied focus this this replace on

Drake Mills

markets advantage of That our earlier, And No. I that growth phenomenal. Absolutely. deposit months. an year-to-date and couple you the it our significant next can wins. core a we XX think it's in take us. as for seeing some said We're add Dallas markets opportunity look the core I dollars to unbelievable at pretty mean, hundred if from us growth, of growth drove over in million is deposit

teams So an what more a we're the slowdown compensation side. deposit period core as to advantage from opportunity we take of of incentive the doing we is growth see standpoint where loan to our market really the see time a shifting in on

side. we XX% But that feel pretty noise, see all our in XX%, you are. if around say good core deposit have this markets ratio, the we're running on out understand in all loan-to-deposit would strong and loan the slowdown to where we as I about So normalize activity, win taking opportunity we

going be to XXXX So is in our growth. deposit focus core

Operator

from Stephens. a with is follow-up [Operator Instructions] next Matt Olney Our question

Matt Olney

Yes.

modest. want yields. Loan Just and on a it the commentary on yields loan and I renewed specifically out how you figure playing guess bit down this the just have loan over new you more how there. out on the if pressure circle any recent trying margin the back see I'm recently. much loan quarter, was to yields growth, next yields on Any the came but could I'm loan on for looking see pretty few more color discussion we to quarters? And in

Drake Mills

going where of take I yield decline. to environment, that a Yes. and in some you're the headwinds we This is to able loan from it's to we coming where why think think aspect be off you're down to management balance loan of a on see and know deposit things asking -- to couple an from continue costs from, yield that and that because a I slow fend starting other sheet see

create I today, And we're going about So drive incentives -- everything look, and do. And I -- talking moving forward, we're going we're we're to keep incentives. this, and active on -- based working we relationship a going will very say yield able to in and yield, reward to method on incent get our ability very, require floors and be managers to almost any to their to situation. and so

kill some opportunity real us coming So the I to think that, from going down for to yield be the a headwinds that's loan or slow of perspective.

That's pricing. you're going So drive see to going to, incentives. better I think, strong

going to to down certainly see floors. slow this That's going You're situation.

do environment can the competitive I'm still a we and that growth see about. talking loan in very I think

Matt Olney

Okay. And guess… I

Drake Mills

where Matt, deposit now we we pull a at win to CD and big The heading. point. for the this us That's is pricing see the CD on be win next pricing say side and I really right going this. to trigger would where see where is

Operator

like would closing for over turn concludes our I any back session. to Mills This question-and-answer to remarks. the call Drake

Drake Mills

Okay.

I culture opportunity we're this organization, in that off, that this are I point said our the what the have thank thanks First pretty in everyone, incredible that for say you, that comfortable incredible. you, the institution, attitudes we support. and stronger, our people how It's as I inside to will earlier. am my and confidence support is closing doing, this in to thanks But at remarks

when in to was voted banks here to the for. best top a work top for. be last to was And the of the their couple of rewarded banks released in Banker it that such pleasure work days XX American And

winning in So environment. shows that a difficult that we're very

Our stronger. culture is

things all and safe, feel They supported. feel rewarded those and to people be back up are in Our going the return. shareholders end to

and way support. huge Thank your do I appreciate confidence So in a your you.

Operator

now has Thank concluded. attending presentation. for conference today's The you

now may disconnect. You

Origin Bancorp (OBK) 29 Oct 202020 Q3 Earnings call transcript