• Origin Bancorp, Inc. Reports Earnings For Third-Quarter 2021

    Source: Nasdaq GlobeNewswire / 27 Oct 2021 15:17:04   America/Chicago

    RUSTON, La., Oct. 27, 2021 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $27.0 million for the quarter ended September 30, 2021, or $1.14 diluted earnings per share, compared to net income of $27.7 million for the quarter ended June 30, 2021, or $1.17 diluted earnings per share. Net income was $13.1 million, or $0.56 diluted earnings per share for the quarter ended September 30, 2020. Pre-tax, pre-provision earnings for the quarter were $29.3 million, a 1.4% increase on a linked quarter basis, and a 2.1% decrease from the third quarter of 2020.

    “Origin Bancorp delivered another strong quarter of earnings as our bankers remained focused on the fundamental core aspects of our business,” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “I’m very pleased with the 9% annualized growth on loans excluding PPP and mortgage warehouse. I’m also proud to announce that we have entered into an agreement to acquire The Lincoln Agency, an insurance agency operating out of North Louisiana. This acquisition provides the opportunity to augment noninterest income and create additional long-term value for our company. As the economic outlook continues to improve, Origin is in a position of strength to drive value for our employees, customers, communities and shareholders.”

    Financial Highlights

    • Total LHFI at September 30, 2021, excluding PPP and mortgage warehouse lines of credit, were $4.26 billion, reflecting a $95.9 million or 2.3% increase compared to the linked quarter, and an increase of $214.2 million, or 5.3% compared to September 30, 2020. Total LHFI, excluding PPP and mortgage warehouse lines of credit, grew at an annualized rate of 9.2% during the current quarter.
    • Total securities grew $512.4 million, or 50.1%, to $1.54 billion at September 30, 2021, compared to $1.02 billion at June 30, 2021, and increased $687.9 million, or 81.2%, compared to September 30, 2020.
    • Total deposits grew $130.4 million, or 2.2%, to $6.16 billion at September 30, 2021, compared to $6.03 billion at June 30, 2021, and increased $222.8 million, or 3.8%, compared to September 30, 2020. Noninterest-bearing deposits grew $119.1 million, or 6.4%, compared to June 30, 2021, and $380.7 million, or 23.8%, compared to September 30, 2020.
    • Provision for credit losses was a net benefit of $3.9 million for the quarter ended September 30, 2021, compared to a net benefit of $5.6 million for the linked quarter and a provision expense of $13.6 million for the quarter ended September 30, 2020.
    • Cost of total deposits was 0.21% for the quarter ended September 30, 2021, compared to 0.22% for the linked quarter and 0.42% for the quarter ended September 30, 2020.
    • Nonperforming LHFI to total LHFI improved to 0.47% at September 30, 2021, compared to 0.57% at June 30, 2021 and 0.54% at September 30, 2020.
    • The Company has reached an agreement with the Lincoln Agency, a full-service insurance agency providing personal and business insurance to communities located in and surrounding Ruston, Louisiana, to acquire the remaining 62% ownership, bringing the Company's total ownership to 100%.

    Results of Operations for the Three Months Ended September 30, 2021

    Net Interest Income and Net Interest Margin

    Net interest income for the quarter ended September 30, 2021, was $52.5 million, a decrease of $1.8 million, or 3.2%, compared to the linked quarter. The decrease was primarily due to a $2.3 million decrease in interest income earned on the total loan portfolio offset by a $326,000 increase in interest income earned on total investment securities. The decrease in interest income earned on the total loan portfolio was primarily driven by a $366.4 million decrease in the average balance of total loans caused primarily by decreases of $242.0 million and $158.5 million in average PPP loan balances and average mortgage warehouse lines of credit loan balances, respectively, as the outstanding PPP loan balances declined through the SBA's forgiveness process and mortgage warehouse lines of credit continued to normalize. Net interest income, excluding interest earned on PPP loans and mortgage warehouse lines of credit, increased $1.6 million for the quarter ended September 30, 2021, compared to the linked quarter. The increase in interest income earned on total securities was primarily due to a $103.4 million increase in the average balance of total securities.

    The yield earned on interest-earning assets for the quarter ended September 30, 2021, was 3.33%, a decrease of 11 basis points compared to the linked quarter and a 31 basis point decrease compared to the quarter ended September 30, 2020. Excluding PPP loans, the yield earned on interest-earning assets was 3.25%, a 12 basis point decrease compared to the linked quarter. The rate paid on total interest-bearing liabilities for the quarter ended September 30, 2021, was 0.53%, representing no change from the linked quarter and a decrease of 22 basis points compared to the quarter ended September 30, 2020.

    The fully tax-equivalent net interest margin ("NIM") was 3.02% for the current quarter, a 10 basis point decrease and a 16 basis point decrease from the linked quarter and the quarter ended September 30, 2020, respectively. Excluding PPP loans, the fully tax-equivalent NIM was 2.94%, a 12 basis point decrease and a 34 basis point decrease from the linked quarter and the quarter ended September 30, 2020, respectively. The decline in NIM was primarily due to pricing pressure in a continued low interest rate environment and increases in liquidity resulting from a shift in balance sheet composition as PPP loan balances continued to decline and mortgage warehouse loan volume continued to normalize. This excess liquidity was the primary cause of the increase in average balances of lower-yielding interest-bearing deposits due from banks and investment securities.

    Credit Quality

    The table below includes key credit quality information:

     At and for the three months ended    
    (Dollars in thousands)September 30,
    2021    		 June 30,
    2021    		 $ Change % Change
    Allowance for loan credit losses$69,947  $77,104  $(7,157) (9.3)%
    Classified loans75,591  83,427  (7,836) (9.4)
    Total nonperforming LHFI24,555  30,502  (5,947) (19.5)
    Provision for credit losses(3,921) (5,609) 1,688  (30.1)
    Net charge-offs2,891  2,808  83  3.0 
    Credit quality ratios:       
    Allowance for loan credit losses to nonperforming LHFI284.86% 252.78% N/A 3208 bp 
    Allowance for loan credit losses to total LHFI1.35  1.43  N/A -8 bp 
    Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (1)1.63  1.84  N/A -21 bp 
    Nonperforming LHFI to LHFI0.47  0.57  N/A -10 bp 
    Net charge-offs to total average LHFI (annualized)0.22  0.20  N/A 2 bp 

    ___________________________
    (1)   Please see the Loan Data schedule at the back of this document for additional information.

    The Company recorded a credit loss provision net benefit of $3.9 million during the quarter ended September 30, 2021, compared to a credit loss provision net benefit of $5.6 million recorded during the linked quarter. The release of provision reflects the continued improvement in forecasted economic conditions at September 30, 2021, and improvements in most credit loss metrics. While economic forecasts have improved, uncertainty remains for the remainder of 2021 due to risks related to the resurgence or lingering effects of COVID-19, rising inflation and labor pressures, as well as continued global supply-chain disruptions.

    Overall, most credit metrics improved in the current quarter compared to the linked quarter. The allowance for loan credit losses to nonperforming LHFI increased to 284.86% at September 30, 2021, compared to 252.78% at June 30, 2021. The Company's quarterly net charge-offs were stable, and nonperforming LHFI declined $5.9 million, when compared to the linked quarter. Classified loans declined $8.7 million at September 30, 2021, compared to June 30, 2021, and represented 1.52% of LHFI, excluding PPP loans.

    Noninterest Income

    Noninterest income for the quarter ended September 30, 2021, was $15.9 million, an increase of $3.5 million, or 28.0%, from the linked quarter. The increase from the linked quarter was primarily driven by increases of $2.3 million and $703,000 in limited partnership investment income and swap fee income, respectively.

    The $2.3 million increase in limited partnership investment income was primarily due to valuation increases of the investments in two of the limited partnership funds. The $703,000 increase in swap fee income was driven by swap commission fees earned on a new swap contract executed during the current quarter.

    Noninterest Expense

    Noninterest expense for the quarter ended September 30, 2021, was $39.2 million, an increase of $1.3 million, compared to the linked quarter. This increase was primarily driven by an increase of $1.3 million in salaries and employee benefit expenses primarily due to a $1.0 million increase in medical self-insurance costs driven by higher medical claims during the quarter ended September 30, 2021, and the addition of 12 full-time equivalent employees.

    Financial Condition

    Loans

    • Total LHFI decreased $209.0 million compared to the linked quarter and decreased $425.4 million compared to September 30, 2020.
    • Total LHFI at September 30, 2021, were $4.26 billion, excluding PPP and mortgage warehouse lines of credit, reflecting a $95.9 million, or 2.3% increase, compared to the linked quarter and an increase of $214.2 million, or 5.3%, compared to September 30, 2020.
    • PPP loans, net of deferred fees and costs, totaled $217.0 million at September 30, 2021, a decrease of $153.0 million compared to the linked quarter and a decrease of $335.4 million compared to September 30, 2020. Net deferred loan fees and costs on PPP loans were $6.3 million at September 30, 2021, $9.3 million at June 30, 2021, and $12.1 million at September 30, 2020.
    • Mortgage warehouse lines of credit decreased $151.9 million compared to the linked quarter and decreased $304.2 million compared to September 30, 2020.
    • Average LHFI decreased $370.3 million, compared to the linked quarter, and decreased $155.4 million compared to the quarter ended September 30, 2020.
    • Average LHFI, excluding PPP and mortgage warehouse lines of credit, increased $30.2 million, compared to the linked quarter, and increased $178.5 million compared to the quarter ended September 30, 2020.

    Total LHFI at September 30, 2021, were $5.19 billion, reflecting a decrease of 3.9% compared to the linked quarter and a decrease of 7.6%, compared to September 30, 2020. The decrease in LHFI compared to the linked quarter, was primarily driven by decreases in PPP loans and mortgage warehouse lines of credit, respectively, as the outstanding PPP loan balances declined primarily through the SBA's forgiveness process and mortgage warehouse lines of credit continued to normalize.

    Securities

    • Total securities increased $512.4 million compared to the linked quarter and increased $687.9 million, compared to September 30, 2020.
    • Average securities increased $103.4 million, compared to the linked quarter, and increased $341.2 million compared to the quarter ended September 30, 2020.

    Total securities at September 30, 2021, were $1.54 billion, reflecting an increase of 50.1% compared to the linked quarter and an increase of 81.2%, compared to September 30, 2020. The overall increase in securities reflects a shift in balance sheet composition as liquidity surged due to declines in PPP and mortgage warehouse lines of credit loan balances due to the SBA's forgiveness process and the normalization of mortgage warehouse lines of credit.

    Deposits

    • Total deposits increased $130.4 million and $222.8 million compared to the linked quarter and September 30, 2020, respectively.
    • Noninterest-bearing deposits grew $119.1 million, or 6.4%, compared to June 30, 2021, and $380.7 million, or 23.8%, at September 30, 2020.

    The increase in total deposits from the linked quarter is driven by increases of $141.4 million and $119.1 million in interest-bearing demand and noninterest-bearing deposits, respectively. The increase was partially offset by a decrease of $102.5 million in money market deposits. The increase from September 30, 2020 is driven by increases of $469.2 million, $380.7 million and $285.3 million in interest-bearing demand, noninterest-bearing deposits and money market deposits, respectively. These increases were partially offset by a decrease of $835.9 million in brokered deposits.

    Business depositors drove an increase of $197.6 million in noninterest-bearing demand and interest-bearing deposits compared to the linked quarter, which was offset by a $149.9 million decrease in money market deposits from business depositors. Increases of $708.1 million and $162.0 million in deposits from business depositors and public funds, respectively, drove the increase in total deposits compared to September 30, 2020.

    For the quarter ended September 30, 2021, average noninterest-bearing deposits as a percentage of total average deposits were 31.7%, compared to 29.4% for the linked quarter, and 30.4% for the quarter ended September 30, 2020.

    Borrowings

    • Average FHLB advances and other borrowings for the quarter ended September 30, 2021, increased slightly by $1.2 million or 0.4%, and decreased by $279.2 million or 51.4%, compared to the linked quarter and the quarter ended September 30, 2020, respectively.

    The increase in average FHLB advances and other borrowings from linked quarter is driven by a $1.2 million increase in repurchase agreements. The decrease in average FHLB advances and other borrowings from the quarter ended September 30, 2020 is mainly due to a $209.3 million decrease in the balance of Federal Reserve PPP Liquidity Facility funds, as the Company repaid all advances under this facility prior to the end of the September 30, 2020 quarter.

    Stockholder's Equity

    Stockholders' equity was $705.7 million at September 30, 2021, an increase of $17.4 million compared to $688.2 million at June 30, 2021, and an increase of $78.0 million compared to $627.6 million at September 30, 2020. The increase from the linked quarter was primarily due to net income for the quarter of $27.0 million, which was partially offset by other comprehensive loss, net of tax and the quarterly dividend declared during the quarter ended September 30, 2021. The increase from the September 30, 2020, quarter was primarily driven by net income retained during the intervening period.

    Conference Call

    Origin will hold a conference call to discuss its third quarter 2021 results on Thursday, October 28, 2021, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (844) 695-5516; International: (412) 902-6750 and request to be joined into the Origin Bancorp, Inc. (OBNK) call. A simultaneous audio-only webcast may be accessed via Origin's website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link or directly by visiting: https://services.choruscall.com/mediaframe/webcast.html?webcastid=8RDDBYaT.

    If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Origin's website at www.origin.bank, under Investor Relations, News & Events, Events & Presentations.

    About Origin Bancorp, Inc.

    Origin is a financial holding company headquartered in Ruston, Louisiana. Origin's wholly-owned bank subsidiary, Origin Bank, was founded in 1912. Deeply rooted in Origin's history is a culture committed to providing personalized, relationship banking to its clients and communities. Origin provides a broad range of financial services to businesses, municipalities, high net-worth individuals and retail clients. Origin currently operates 44 banking centers located from Dallas/Fort Worth and Houston, Texas across North Louisiana and into Mississippi. For more information, visit www.origin.bank.

    Forward-Looking Statements

    This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin's future financial performance, business and growth strategy, projected plans and objectives, including the Company’s loan loss reserves and allowance for credit losses related to the COVID-19 pandemic and any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including expectations regarding efforts to respond to the COVID-19 pandemic and changes to interest rates by the Federal Reserve and the resulting impact on Origin's results of operations, estimated forbearance amounts and expectations regarding the Company's liquidity, including in connection with advances obtained from the FHLB, which are all subject to change and may be inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such changes may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions and current expectations, estimates and projections about Origin and its subsidiaries, any of which may change over time and some of which may be beyond Origin's control. Statements or statistics preceded by, followed by or that otherwise include the words "anticipates," "believes," "estimates," "expects," “foresees,” "intends," "plans," "projects," and similar expressions or future or conditional verbs such as "could," "may," “might,” "should," "will," and "would" or variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin's future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: the continuing duration and impacts of the COVID-19 global pandemic and continuing development and distribution of COVID-19 vaccines, as well as other efforts to contain the virus's transmission, including the effect of these factors and developments on Origin’s business, customers and economic conditions generally, as well as the impact of the actions taken by governmental authorities to address the impact of COVID-19 on the United States economy, including, any economic stimulus legislation; deterioration of Origin's asset quality; factors that can impact the performance of Origin’s loan portfolio, including real estate values and liquidity in Origin's primary market areas; the financial health of Origin's commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin's loans; Origin’s ability to anticipate interest rate changes and manage interest rate risk; the effectiveness of Origin’s risk management framework and quantitative models; the risk of widespread inflation; Origin’s inability to receive dividends from Origin Bank and to service debt, pay dividends to Origin’s common stockholders, repurchase Origin’s shares of common stock and satisfy obligations as they become due; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; changes in Origin’s operation or expansion strategy or Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important customer relationships, reputation or otherwise avoid liquidity risks; increasing costs as Origin grows deposits; operational risks associated with Origin’s business; volatility and direction of market interest rates; increased competition in the financial services industry, particularly from regional and national institutions; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated; an increase in unemployment levels and slowdowns in economic growth; Origin's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin's loan portfolio; changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, and potential expenses associated with complying with such regulations, periodic changes to the extensive body of accounting rules and best practices; further government intervention in the U.S. financial system; compliance with governmental and regulatory requirements, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and others relating to banking, consumer protection, securities and tax matters; Origin's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin's non-GAAP liquidity measurements and its underlying assumptions or estimates; uncertainty regarding the future of the London Interbank Offered Rate and the impact of any replacement alternatives on Origin’s business; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies and similar organizations; natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities, regional or national protests and civil unrest (including any resulting branch closures or property damage), widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond Origin’s control; and system failures, cybersecurity threats or security breaches and the cost of defending against them. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any updates to those sections set forth in Origin's subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin's underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

    New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the COVID-19 pandemic and the impact of varying governmental responses that affect Origin's customers and the economies where they operate. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin's behalf may issue. Annualized, pro forma, adjusted, projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results.

    Contact:
    Chris Reigelman, Origin Bancorp, Inc.
    318-497-3177 / chris@origin.bank

     At and for the three months ended
     September 30,
    2021    		 June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020
              
    Income statement and share amounts(Dollars in thousands, except per share amounts, unaudited)
    Net interest income$52,541  $54,292  $55,239  $51,819  $50,617 
    Provision for credit losses(3,921) (5,609) 1,412  6,333  13,633 
    Noninterest income15,923  12,438  17,131  15,381  18,051 
    Noninterest expense39,165  37,832  39,436  38,884  38,734 
    Income before income tax expense33,220  34,507  31,522  21,983  16,301 
    Income tax expense6,242  6,774  6,009  4,431  3,206 
    Net income$26,978  $27,733  $25,513  $17,552  $13,095 
    Pre-tax, pre-provision ("PTPP") earnings (1)$29,299  $28,898  $32,934  $28,316  $29,934 
    Basic earnings per common share1.15  1.18  1.09  0.75  0.56 
    Diluted earnings per common share1.14  1.17  1.08  0.75  0.56 
    Dividends declared per common share0.13  0.13  0.10  0.10  0.0925 
    Weighted average common shares outstanding - basic23,429,705  23,410,693  23,393,356  23,392,684  23,374,496 
    Weighted average common shares outstanding - diluted23,613,010  23,604,566  23,590,430  23,543,917  23,500,596 
              
    Balance sheet data         
    Total LHFI$5,187,288  $5,396,306  $5,849,760  $5,724,773  $5,612,666 
    Total assets7,470,478  7,268,068  7,563,175  7,628,268  7,101,338 
    Total deposits6,158,768  6,028,352  6,346,194  5,751,315  5,935,925 
    Total stockholders' equity705,667  688,235  656,355  647,150  627,637 
              
    Performance metrics and capital ratios         
    Yield on LHFI4.05% 4.00% 4.03% 3.89% 4.02%
    Yield on interest earnings assets3.33  3.44  3.58  3.47  3.64 
    Cost of interest bearing deposits0.30  0.31  0.37  0.43  0.61 
    Cost of total deposits0.21  0.22  0.26  0.31  0.42 
    Net interest margin, fully tax equivalent3.02  3.12  3.22  3.07  3.18 
    Net interest margin, excluding PPP loans, fully tax equivalent (2)2.94  3.06  3.15  3.17  3.28 
    Return on average stockholders' equity (annualized)15.21  16.54  15.73  10.92  8.28 
    Return on average assets (annualized)1.43  1.49  1.40  0.97  0.77 
    PTPP return on average stockholders' equity (annualized) (1)16.52  17.23  20.30  17.61  18.92 
    PTPP return on average assets (annualized) (1)1.56  1.55  1.81  1.57  1.77 
    Efficiency ratio (3)57.21  56.69  54.49  57.86  56.41 
    Book value per common share$30.03  $29.28  $27.94  $27.53  $26.70 
    Tangible book value per common share (1)28.76  28.01  26.66  26.23  25.39 
    Common equity tier 1 to risk-weighted assets (4)11.24% 11.03% 10.16% 9.95% 9.93%
    Tier 1 capital to risk-weighted assets (4)11.39  11.19  10.32  10.11  10.09 
    Total capital to risk-weighted assets (4)14.88  14.85  13.92  13.79  12.48 
    Tier 1 leverage ratio (4)9.21  8.87  8.67  8.62  9.19 

    ____________________________
    (1) PTPP earnings, PTPP return on average stockholders' equity, PTPP return on average assets and tangible book value per common share are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, please see the last two pages.
    (2) Net interest margin, excluding PPP loans, fully tax-equivalent is calculated by removing average PPP loans from average interest earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net-interest income.
    (3) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
    (4) September 30, 2021, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board.

     Three months ended
     September 30,
    2021    		 June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020
              
    Interest and dividend income(Dollars in thousands, except per share amounts, unaudited)
    Interest and fees on loans$53,182  $55,529  $56,810  $54,193  $54,150 
    Investment securities-taxable3,449  3,115  3,300  3,154  2,704 
    Investment securities-nontaxable1,582  1,590  1,672  1,708  1,571 
    Interest and dividend income on assets held in other financial institutions538  414  345  367  375 
    Total interest and dividend income58,751  60,648  62,127  59,422  58,800 
    Interest expense         
    Interest-bearing deposits3,255  3,417  3,789  4,582  5,698 
    FHLB advances and other borrowings1,118  1,106  1,269  1,339  1,564 
    Subordinated debentures1,837  1,833  1,830  1,682  921 
    Total interest expense6,210  6,356  6,888  7,603  8,183 
    Net interest income 52,541  54,292  55,239  51,819  50,617 
    Provision for credit losses(3,921) (5,609) 1,412  6,333  13,633 
    Net interest income after provision for credit losses56,462  59,901  53,827  45,486  36,984 
    Noninterest income         
    Service charges and fees3,973  3,739  3,343  3,420  3,268 
    Mortgage banking revenue2,728  2,765  4,577  6,594  9,523 
    Insurance commission and fee income3,451  3,050  3,771  2,732  3,218 
    Gain on sales of securities, net—  5  1,668  225  301 
    Loss on sales and disposals of other assets, net(8) (42) (38) (33) (247)
    Limited partnership investment income3,078  801  1,772  368  130 
    Swap fee income727  24  348  233  110 
    Change in fair value of equity investments19  —  —  —  — 
    Other fee income783  623  771  604  576 
    Other income1,172  1,473  919  1,238  1,172 
    Total noninterest income15,923  12,438  17,131  15,381  18,051 
    Noninterest expense         
    Salaries and employee benefits23,629  22,354  22,325  22,475  22,597 
    Occupancy and equipment, net4,353  4,349  4,339  4,271  4,263 
    Data processing2,329  2,313  2,173  2,178  2,065 
    Electronic banking997  989  961  942  954 
    Communications359  514  415  449  422 
    Advertising and marketing863  748  680  1,108  1,281 
    Professional services912  836  973  1,176  785 
    Regulatory assessments664  544  1,170  1,135  1,310 
    Loan-related expenses1,949  2,154  1,705  1,856  1,809 
    Office and operations1,598  1,498  1,454  1,472  1,367 
    Intangible asset amortization194  222  234  237  237 
    Franchise tax expense598  629  619  665  511 
    Other expenses720  682  2,388  920  1,133 
    Total noninterest expense39,165  37,832  39,436  38,884  38,734 
    Income before income tax expense33,220  34,507  31,522  21,983  16,301 
    Income tax expense6,242  6,774  6,009  4,431  3,206 
    Net income$26,978  $27,733  $25,513  $17,552  $13,095 
    Basic earnings per common share$1.15  $1.18  $1.09  $0.75  $0.56 
    Diluted earnings per common share1.14  1.17  1.08  0.75  0.56 


     Nine Months Ended September 30,
    (Dollars in thousands, except per share amounts)2021 2020
    Income statement and share amounts(Unaudited) (Unaudited)
    Net interest income$162,072  $139,717 
    Provision for credit losses(8,118) 53,567 
    Noninterest income45,492  49,271 
    Noninterest expense116,433  113,051 
    Income before income tax expense99,249  22,370 
    Income tax expense19,025  3,565 
    Net income$80,224  $18,805 
    PTPP earnings (1)$91,131  $75,937 
    Basic earnings per common share (2)3.43  0.81 
    Diluted earnings per common share(2)3.40  0.80 
    Dividends declared per common share0.36  0.278 
    Weighted average common shares outstanding - basic23,413,794  23,358,672 
    Weighted average common shares outstanding - diluted23,606,597  23,498,838 
        
    Performance metrics   
    Yield on LHFI4.03% 4.28%
    Yield on interest earning assets3.45  3.85 
    Cost of interest bearing deposits0.33  0.87 
    Cost of total deposits0.23  0.62 
    Net interest margin, fully tax equivalent3.12  3.22 
    Net interest margin, excluding PPP loans, fully tax equivalent (3)3.05  3.28 
    Return on average stockholders' equity (annualized)15.81  4.05 
    Return on average assets (annualized)1.44  0.41 
    PTPP return on average stockholders' equity (annualized) (1)17.96  16.37 
    PTPP return on average assets (annualized) (1)1.64  1.64 
    Efficiency ratio (4)56.09  59.82 

    ____________________________
    (1) PTPP earnings, PTPP return on average stockholders' equity, and PTPP return on average assets are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their comparable GAAP measures, please see the last two pages.
    (2) Due to the combined impact of the repurchase of common stock on the quarterly average common shares outstanding calculation compared to the impact of the repurchase of common stock shares on the year-to-date average common outstanding calculation, and the effect of rounding, the sum of the quarterly earnings per common share may not equal the year-to-date earnings per common share amount.
    (3) Net interest margin, excluding PPP loans, fully tax-equivalent is calculated by removing average PPP loans from average interest-earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net interest income.
    (4) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income. 

    (Dollars in thousands)September 30,
    2021    		 June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020
    Assets(Unaudited) (Unaudited) (Unaudited)   (Unaudited)
    Cash and due from banks$124,515  $155,311  $64,330  $60,544  $61,250 
    Interest-bearing deposits in banks227,450  289,421  200,571  316,670  160,661 
    Total cash and cash equivalents351,965  444,732  264,901  377,214  221,911 
    Securities:         
    Available for sale1,486,543  973,948  980,132  1,004,674  797,260 
    Held to maturity, net of allowance for credit losses37,702  37,835  37,983  38,128  38,193 
    Securities carried at fair value through income10,876  10,973  11,077  11,554  11,813 
    Total securities1,535,121  1,022,756  1,029,192  1,054,356  847,266 
    Non-marketable equity securities held in other financial institutions45,144  41,468  47,274  62,586  38,052 
    Loans held for sale109,956  124,710  144,950  191,512  155,525 
    Loans5,187,288  5,396,306  5,849,760  5,724,773  5,612,666 
    Less: allowance for loan credit losses69,947  77,104  85,136  86,670  81,643 
    Loans, net of allowance for loan credit losses5,117,341  5,319,202  5,764,624  5,638,103  5,531,023 
    Premises and equipment, net80,740  80,133  81,064  81,763  79,254 
    Mortgage servicing rights16,000  16,081  17,552  13,660  14,322 
    Cash surrender value of bank-owned life insurance38,162  37,959  37,757  37,553  37,332 
    Goodwill and other intangible assets, net29,830  30,024  30,246  30,480  30,717 
    Accrued interest receivable and other assets146,219  151,003  145,615  141,041  145,936 
    Total assets$7,470,478  $7,268,068  $7,563,175  $7,628,268  $7,101,338 
    Liabilities and Stockholders' Equity         
    Noninterest-bearing deposits$1,980,107  $1,861,016  $1,736,534  $1,607,564  $1,599,436 
    Interest-bearing deposits3,600,654  3,554,427  3,962,082  3,478,985  3,640,587 
    Time deposits578,007  612,909  647,578  664,766  695,902 
    Total deposits6,158,768  6,028,352  6,346,194  5,751,315  5,935,925 
    FHLB advances and other borrowings309,152  314,123  325,751  984,608  360,325 
    Subordinated debentures157,357  157,298  157,239  157,181  78,596 
    Accrued expenses and other liabilities139,534  80,060  77,636  88,014  98,855 
    Total liabilities6,764,811  6,579,833  6,906,820  6,981,118  6,473,701 
    Stockholders' equity         
    Common stock117,480  117,511  117,444  117,532  117,533 
    Additional paid-in capital237,928  237,338  236,934  237,341  236,679 
    Retained earnings338,387  314,472  289,792  266,628  251,427 
    Accumulated other comprehensive income11,872  18,914  12,185  25,649  21,998 
    Total stockholders' equity705,667  688,235  656,355  647,150  627,637 
    Total liabilities and stockholders' equity$7,470,478  $7,268,068  $7,563,175  $7,628,268  $7,101,338 


     At and for the three months ended
    (Dollars in thousands, unaudited)September 30,
    2021    		 June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020
    LHFI         
    Commercial real estate$1,590,519  $1,480,536  $1,454,649  $1,387,939  $1,367,916 
    Construction/land/land development518,920  497,170  548,236  531,860  560,857 
    Residential real estate913,411  966,301  904,753  885,120  832,055 
    Total real estate loans3,022,850  2,944,007  2,907,638  2,804,919  2,760,828 
    Paycheck Protection Program216,957  369,910  584,148  546,519  552,329 
    Commercial and industrial1,218,246  1,200,881  1,250,350  1,271,343  1,263,279 
    Mortgage warehouse lines of credit713,339  865,255  1,090,347  1,084,001  1,017,501 
    Consumer15,896  16,253  17,277  17,991  18,729 
    Total LHFI5,187,288  5,396,306  5,849,760  5,724,773  5,612,666 
    Less: allowance for loan credit losses69,947  77,104  85,136  86,670  81,643 
    LHFI, net$5,117,341  $5,319,202  $5,764,624  $5,638,103  $5,531,023 
              
    Nonperforming assets         
    Nonperforming LHFI         
    Commercial real estate$672  $1,544  $1,085  $3,704  $4,669 
    Construction/land/land development592  621  2,431  2,962  2,976 
    Residential real estate9,377  10,571  10,692  6,530  8,259 
    Commercial and industrial13,873  17,723  19,094  12,897  14,255 
    Consumer41  43  56  56  69 
    Total nonperforming LHFI24,555  30,502  33,358  26,149  30,228 
    Nonperforming loans held for sale2,074  1,606  963  681  483 
    Total nonperforming loans26,629  32,108  34,321  26,830  30,711 
    Repossessed assets4,574  4,723  3,893  1,927  718 
    Total nonperforming assets$31,203  $36,831  $38,214  $28,757  $31,429 
    Classified assets$80,165  $88,150  $99,214  $109,708  $101,577 
    Past due LHFI (1)25,954  30,446  26,574  25,763  29,194 
              
    Allowance for loan credit losses         
    Balance at beginning of period$77,104  $85,136  $86,670  $81,643  $70,468 
    Provision for loan credit losses(4,266) (5,224) 1,360  6,784  12,970 
    Loans charged off3,035  3,010  3,027  2,089  2,293 
    Loan recoveries144  202  133  332  498 
    Net charge-offs2,891  2,808  2,894  1,757  1,795 
    Balance at end of period$69,947  $77,104  $85,136  $86,670  $81,643 
              
    Credit quality ratios         
    Total nonperforming assets to total assets0.42% 0.51% 0.51% 0.38% 0.44%
    Total nonperforming loans to total loans0.50  0.58  0.57  0.45  0.53 
    Nonperforming LHFI to LHFI0.47  0.57  0.57  0.46  0.54 
    Past due LHFI to LHFI0.50  0.56  0.45  0.45  0.52 
    Allowance for loan credit losses to nonperforming LHFI284.86  252.78  255.22  331.45  270.09 
    Allowance for loan credit losses to total LHFI1.35  1.43  1.46  1.51  1.45 
    Allowance for loan credit losses to total LHFI excluding PPP and warehouse loans (2)1.63  1.84  2.02  2.10  2.00 
    Net charge-offs to total average LHFI (annualized)0.22  0.20 



    		  0.21  0.13  0.13 
    Net charge-offs to total average LHFI (annualized), excluding PPP loans0.24  0.23  0.23  0.14  0.15 

    ____________________________
    (1) Past due LHFI are defined as loans 30 days or more past due. There were $266,000 of past due PPP loans at September 30, 2021, that are fully guaranteed by the SBA.
    (2) The allowance for loan credit losses ("ACL") to total LHFI excluding PPP and warehouse loans is calculated by excluding the ACL for warehouse loans from the numerator and excluding the PPP and warehouse loans from the denominator. Due to their low-risk profile, mortgage warehouse loans require a disproportionately low allocation of the allowance for loan credit losses.   

     Three months ended
     September 30, 2021 June 30, 2021 September 30, 2020
     Average Balance Yield/Rate Average Balance Yield/Rate Average Balance Yield/Rate
                
    Assets(Dollars in thousands, unaudited)
    Commercial real estate$1,505,731  4.08% $1,465,799  4.12% $1,344,853  4.29%
    Construction/land/land development527,881  4.10  516,794  4.18  575,080  4.42 
    Residential real estate936,375  4.14  929,332  4.11  787,247  4.32 
    Paycheck Protection Program ("PPP")279,578  5.24  521,551  4.27  550,377  2.48 
    Commercial and industrial excl. PPP1,212,797  3.88  1,240,252  3.80  1,295,105  4.09 
    Mortgage warehouse lines of credit660,715  3.58  819,233  3.63  723,876  3.87 
    Consumer16,222  5.81  16,632  5.83  18,209  6.23 
    LHFI5,139,299  4.05  5,509,593  4.00  5,294,747  4.02 
    Loans held for sale72,739  3.85  68,797  3.51  88,811  2.77 
    Loans receivable5,212,038  4.05  5,578,390  3.99  5,383,558  4.00 
    Investment securities-taxable853,277  1.60  749,538  1.67  539,993  1.99 
    Investment securities-nontaxable280,189  2.24  280,504  2.27  252,304  2.48 
    Non-marketable equity securities held in other financial institutions43,725  2.22  46,898  2.12  39,229  2.53 
    Interest-bearing balances due from banks610,863  0.19  417,782  0.16  204,288  0.24 
    Total interest-earning assets7,000,092  3.33  7,073,112  3.44  6,419,372  3.64 
    Noninterest-earning assets(1)464,721    401,839    327,213   
    Total assets$7,464,813    $7,474,951    $6,746,585   
                
    Liabilities and Stockholders' Equity           
    Liabilities           
    Interest-bearing liabilities           
    Savings and interest-bearing transaction accounts$3,657,625  0.25% $3,774,529  0.23% $3,011,389  0.39%
    Time deposits582,384  0.67  631,654  0.78  730,705  1.50 
    Total interest-bearing deposits4,240,009  0.30  4,406,183  0.31  3,742,094  0.61 
    FHLB advances and other borrowings263,956  1.68  262,806  1.69  543,195  1.15 
    Subordinated debentures157,321  4.63  157,276  4.67  78,585  4.66 
    Total interest-bearing liabilities4,661,286  0.53  4,826,265  0.53  4,363,874  0.75 
    Noninterest-bearing liabilities           
    Noninterest-bearing deposits1,965,843    1,837,823    1,633,510   
    Other liabilities(1)134,079    138,165    119,668   
    Total liabilities6,761,208    6,802,253    6,117,052   
    Stockholders' Equity703,605    672,698    629,533   
    Total liabilities and stockholders' equity$7,464,813    $7,474,951    $6,746,585   
    Net interest spread  2.80%   2.91%   2.89%
    Net interest margin  2.98    3.08    3.14 
    Net interest margin - (tax- equivalent)(2)  3.02    3.12    3.18 
    Net interest margin excluding PPP loans - (tax- equivalent)(3)  2.94    3.06    3.28%
                

    ____________________________
    (1) Includes Government National Mortgage Association ("GNMA") repurchase average balances of $51.3 million, $60.3 million, and $31.7 million for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively. The GNMA repurchase asset and liability are recorded as equal offsetting amounts in the consolidated balance sheets, with the asset included in Loans held for sale and the liability included in FHLB advances and other borrowings.
    (2) In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds.
    (3) Net interest margin, excluding PPP loans, fully tax-equivalent is calculated by removing average PPP loans from average interest-earning assets, and removing the associated interest income (net of 35 basis points assumed cost of funds on average PPP loan balances) from net interest income.  

     At and for the three months ended
     September 30,
    2021    		 June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020
              
    Calculation of Tangible Common Equity:(Dollars in thousands, except per share amounts, unaudited)
    Total common stockholders' equity$705,667  $688,235  $656,355  $647,150  $627,637 
    Less: goodwill and other intangible assets, net29,830  30,024  30,246  30,480  30,717 
    Tangible Common Equity$675,837  $658,211  $626,109  $616,670  $596,920 
              
    Calculation of Tangible Book Value per Common Share:        
    Divided by common shares outstanding at the end of the period23,496,058  23,502,215  23,488,884  23,506,312  23,506,586 
    Tangible Book Value per Common Share$28.76  $28.01  $26.66  $26.23  $25.39 
              
    Calculation of PTPP Earnings:         
    Net Income$26,978  $27,733  $25,513  $17,552  $13,095 
    Plus: provision for credit losses(3,921) (5,609) 1,412  6,333  13,633 
    Plus: income tax expense6,242  6,774  6,009  4,431  3,206 
    PTPP Earnings$29,299  $28,898  $32,934  $28,316  $29,934 
              
    Calculation of PTPP ROAA and PTPP ROAE:         
    PTPP Earnings$29,299  $28,898  $32,934  $28,316  $29,934 
    Divided by number of days in the quarter92  91  90  92  92 
    Multiplied by the number of days in the year365  365  365  366  366 
    Annualized PTPP Earnings$116,241  $115,910  $133,566  $112,648  $119,085 
              
    Divided by total average assets$7,464,813  $7,474,951  $7,382,495  $7,164,028  $6,746,585 
    PTPP ROAA (annualized)1.56% 1.55% 1.81% 1.57% 1.77%
              
    Divided by total average stockholder's equity$703,605  $672,698  $657,863  $639,508  $629,533 
    PTPP ROAE (annualized)16.52% 17.23% 20.30% 17.61% 18.92%


     Nine Months Ended September 30,
    (Dollars in thousands, except per share amounts, unaudited)2021 2020
    Calculation of PTPP Earnings:  
    Net Income$80,224  $18,805 
    Plus: provision for credit losses(8,118) 53,567 
    Plus: income tax expense19,025  3,565 
    PTPP Earnings$91,131  $75,937 
        
    Calculation of PTPP ROAA and PTPP ROAE:  
    PTPP Earnings$91,131  $75,937 
    Divided by number of days in this period273  274 
    Multiplied by the number of days in the year365  366 
    Annualized PTPP Earnings$121,842  $101,434 
        
    Divided by total average assets$7,441,055  $6,200,273 
    PTPP ROAA (annualized)1.64% 1.64%
        
    Divided by total average stockholder's equity$678,223  $619,567 
    PTPP ROAE (annualized)17.96% 16.37%


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