Origin Bancorp delivered results that exceeded Wall Street’s expectations in the fourth quarter, with management attributing this performance to disciplined execution of its Optimize Origin initiative and the ability to capitalize on ongoing market disruption. CEO Drake Mills emphasized that the bank surpassed its near-term return on assets (ROA) goal, highlighting, “We accomplished this goal. While I am pleased with our results, I’m not surprised how our team delivered.” Management cited strong loan originations, prudent expense reductions, and the addition of key banking talent in competitive urban markets as major drivers of the quarter.

Is now the time to buy OBK? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Origin Bancorp’s Q4 Earnings Call

• Matt Olney (Stephens): Asked about the pace and impact of new producer hires on expense growth. President Lance Hall explained the $10 million hiring budget is flexible, allowing for additional hires as opportunities arise, with most impact expected in the latter half of the year.

• Michael Rose (Raymond James): Inquired about the mix of new hires and their expected contribution to loan growth. Hall detailed that most hires are commercial and industrial (C&I) lenders and treasury officers, noting that loan growth from these hires is back-end loaded due to transition periods.

• Wood Lay (KBW): Queried whether market disruption is affecting loan competition. Hall noted competition remains intense but rational, and CEO Drake Mills emphasized a focus on profitable growth over total volume.

• Stephen Scouten (Piper Sandler): Sought clarification on the earn-back period for new hires. Mills stated the bank targets a 12- to 15-month timeline for new hires to become profitable, aided by data-driven hiring and portfolio management.

• Gary Tenner (D.A. Davidson): Asked about swap fee activity and securities portfolio management. Management explained swap fees normalized after a high third quarter, and the securities portfolio will remain stable relative to assets, with liquidity available to fund loan growth if needed.

Catalysts in Upcoming Quarters

In the coming quarters, our team will monitor (1) the pace and effectiveness of new banker hires and their contribution to loan and deposit growth, (2) whether margin recovery materializes as expected following initial compression from interest rate movements, and (3) the success of technology contract negotiations in delivering expense savings. The ongoing impact of market disruption on both competitive dynamics and Origin Bancorp’s expansion efforts will also be important signposts.

Origin Bancorp currently trades at $44.27, up from $40.73 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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