Origin Bancorp, Inc. 2026 Q3 Earnings Call

Thanks, Chris, and thanks for being with us this morning. This quarter's results are a direct reflection of our team's deep commitment to Optimize Origin and how we are transforming our company. We reported record net interest income, record net interest margin, record net income, and record EPS, all while continuing to grow our franchise and maintain discipline in how we manage risk and deploy capital. I'm proud of our team and the consistency of their execution. What encourages me most is that our progress has become more consistent. It is deeply embedded in the way we operate. Optimize Origin influences the decision we make every day, from the relationships we pursue to the investments we make in our people and our business. We are building a company that can deliver stronger performance over time, not simply a better quarter.

We are performing well ahead of our near-term ROA objective we established at the beginning of the year. Our ultimate target remains becoming a top-quartile ROA performer. The results we are producing and our disciplined approach give us confidence as we continue working towards our long-term objective. There are countless opportunities across our dynamic markets. Our culture, our bankers, and our footprint position us to compete for high-quality relationships and high-quality bankers. We will remain selective and intentional as we pursue each opportunity. Growth must strengthen the franchise and support the long-term returns we expect to deliver. As we finish the year, our priorities remain clear. Execute on Optimize Origin, invest strategically, maintain our credit discipline, and appropriately deploy capital. We are encouraged by our progress to remain focused on achieving our goals. Now I'll turn it over to Lance and the team.

Thanks, and good morning. As Drake Mills mentioned, we are very encouraged by our third quarter performance and the progress we continue to make across Origin. What excites me the most is not simply the financial results, but what these results signify about the evolution of our company. Optimize Origin has fundamentally changed how we manage our balance sheet, price risk, allocate capital, and evaluate relationship profitability. Those disciplines are translating into stronger financial performance and greater productivity. More importantly, they are establishing the foundation of our next phase of profitable organic growth. Our focus now is to build on that foundation by creating a more productive, diversified, and valuable banking franchise. That is the continued evolution of Optimize Origin.

We are continuing to improve the data and insights available to our bankers to allow us to be more intentional in our client selection, the opportunities we invest in, and the returns we generate. We believe this discipline is becoming an important part of how we operate, and over time, an increasingly meaningful competitive advantage. At the same time, the generational disruption taking place across our footprint continues to create significant client and banker opportunities for Origin. Our culture, combined with our geographic delivery model, positions us well to attract exceptional bankers. We believe our ability to combine empowered local delivery with the capabilities and resources of a larger organization is a meaningful differentiator in the markets we serve. Our lift-out strategy is producing results, including our recent expansion into Birmingham. We believe these opportunities represent attractive investments in the future of our company.

Our loan growth reflects the combination of opportunity and discipline. Year to date, we have grown loans by $512 million, excluding Mortgage Warehouse. This growth has been driven by our Texas markets, which have grown $350 million year to date, and the Southeast, which has grown $133 million year to date. We continue to be very intentional in our client selection, pricing, and relationship profitability expectations. We have no interest in pursuing growth for growth's sake. This discipline is reflected in the 76 basis point improvement in our net interest margin over the past two years. I am equally encouraged by what we are seeing on the deposit side. Average deposits increased $221 million during the quarter, including approximately $80 million of growth in average non-interest-bearing deposits. While these results are encouraging, I believe account opening trends provide an even deeper perspective on the progress we are making in acquiring new relationships.

We discussed last quarter how account openings accelerated in the first half of 2026. With another quarter of data, we continue to see meaningful activity across our footprint. Through September, total deposit account openings increased 39% year over year in Mississippi, 23% in Houston, and 21% in East Texas. Even more encouraging, non-interest-bearing account openings increased 69% in Mississippi, 28% in East Texas, and 23% in Houston over that same nine-month period.

To me, these numbers are important because they help us understand what is happening beyond the period in balance sheet. Account openings are an important leading indicator of client acquisition and the opportunity to deepen those relationships over time. We also see encouraging evidence of our ability to deepen these relationships and expand the services we provide. Treasury management revenue has increased 20% year-over-year, reflecting the continued progress in a business that we believe represents a meaningful long-term growth opportunity for Origin. This is important because of Origin's strategic focus on C&I clients. Our investments in treasury management strengthen our value proposition for our commercial clients while creating opportunities for recurring fee revenue, deeper relationships, and primary operating accounts. Our objective is to increase the number of clients who view Origin as their primary financial partner, deepen these relationships, and create a more durable and valuable franchise.

Inside Origin, we have developed a performance optimization partners group of executives and leaders directly tasked with improving our operating model. This team is incorporating Lean Six Sigma principles to unlock embedded economic value within our organization through process improvement, friction removal, enhanced speed of delivery, and automation opportunities. This should ultimately improve banker capacity and productivity. They are working across our markets and departments to redirect capacity toward higher valued activities, accelerate revenue opportunities, and create an organization that we can grow more efficiently without a proportional increase in expenses. We believe this discipline will be an important driver of sustainable operating leverage, improved profitability, and long-term franchise value. As we look forward, technology, artificial intelligence, and data will be critical to the next phase of Optimize Origin. We are focused on several key initiatives directly tied to desired business outcomes.

Improving the speed and quality of decisions, operational efficiency, and providing our bankers with information so they can spend more time creating value for their clients. The addition of Brad Waldhoff as Origin's Chief Innovation and Technology Officer has strengthened our ability to prioritize these initiatives and align technology investments with our broader business strategy. We are being intentional about the prioritization and timing of strategic investments with a focus on measurable improvements in productivity, client experience, and financial performance. Finally, I want to come back to something that remains foundational to our strategy, our culture. I have a deep belief that Origin has the opportunity to be exceptional in both our financial performance and our culture. And increasingly, I believe these two objectives to be inseparable. Our culture has become a competitive advantage in attracting and hiring exceptional bankers.

Using culture in our talent acquisition strategy helps drive more durable growth and performance. The Glint results we discussed last quarter are one reflection of that commitment. But I see it more broadly in the passion of our employees, the quality of the bankers who want to join our team, and the relationships we are building across our markets. Our culture is not separate from our financial objectives. It is an important part of the operating model that supports them. When I think about the future of Origin, I see a company where disciplined financial management, exceptional talent, local delivery, data-driven decision-making, and technology-enabled productivity all reinforce one another. Our ambition is not simply to become a better performing bank. It is to build a better banking model. We have made meaningful progress, and I am very optimistic about what we can accomplish.

Optimize Origin is driving discipline as a catalyst for improving franchise value. With that, I will turn it over to Jim.

Thanks, Lance. Credit remained sound during the third quarter of 2026. Total past dues, 30-89 days and accruing, were 0.13% of total loans as of quarter end and are in line with levels reported over the past year. Net charge-offs for the quarter were $2.7 million. As shared last quarter, net charge-offs in Q2 benefited from recoveries totaling $2 million versus $563,000 in recoveries for Q3. On a percentage basis, annualized net charge-offs for the quarter were 0.13% and 0.10% of average loans year to date. We are very pleased to report a continued reduction in non-performing assets, which decreased $4.2 million, and as a percentage of total loans decreased to 0.93%. This represents the lowest level over the past five quarters. Classified assets increased moderately to 1.84% of total loans, in line with levels reported in Q3 last year and below levels reported earlier this year.