OBK

Optimize Origin Strategy Execution

• The 18-month-old Optimize Origin transformation has created a more disciplined, scalable organization positioned to capitalize on ongoing market disruption across the company's footprint
• Management has maintained strict discipline on credit standards, client selection, and pricing while pursuing growth, prioritizing relationship profitability, core deposit generation, and long-term returns over just asset size growth

Talent and Market Expansion

• 12 experienced bankers were added in Q2 2026 following 15 additions in Q1, for a total of 27 strategic hires year-to-date, as part of the disciplined lift-out strategy
• Expanded into Birmingham, Alabama with a local experienced team, and added production talent across North Texas, Houston, East Texas, and Mississippi; Texas and Southeast markets drove $323 million of first half loan growth, with $250 million from Texas alone
• Producer count currently sits just under 100, down from ~123 when Optimize Origin launched, as the company actively replaces lower-performing producers with higher-quality, higher-productivity new hires

Deposit and Client Growth

• Non-interest-bearing deposits increased nearly $200 million in Q2, reaching 26% of total deposits, reflecting success in winning primary banking relationships
• New deposit account openings grew over 36% year-over-year in the first half of 2026, with June 2026 new openings up 82% year-over-year to over 1,800 accounts (from ~1,000 in June 2025), driven by market dislocation and client dissatisfaction with competing institutions

Credit Quality

• Credit metrics continued to improve in Q2: total 30-89 day past dues on accruing loans fell to 0.06%, the lowest level in five quarters
• Annualized net charge-offs were 0.02% for the quarter (0.08% year-to-date), with $454,000 in net charge-offs benefiting from $2 million in recoveries
• Nonperforming assets decreased $9 million to 0.98% of total loans, also the lowest level in five quarters; classified assets fell to 1.79% from 1.94% last quarter
• Allowance for credit losses declined $827,000 to $98.2 million, reaching 1.30% of total loans net of mortgage warehouse, driven by reserve releases from credit migration and lower historical loss factors offsetting reserves for new loan production

Strategic Investments

• The firm is making meaningful investments in technology, artificial intelligence, and data to improve banker productivity, decision-making, and operational scalability; the new Chief Information and Technology Officer has delivered early progress, including renegotiation of the two largest technology contracts in the past six months
• Employee engagement and culture scores hit an all-time high in the most recent internal survey, directly tied to improved financial performance

Capital Return

• The Board of Directors increased share repurchase authorization by $100 million, leaving $121.6 million in remaining authorization; the firm also maintains a recently increased quarterly dividend, providing flexibility for growth investment and capital return to shareholders

• Full-year 2026 loan and deposit growth is targeted at mid-to-high single digits, and the company is currently tracking toward the higher end of this range, with potential upside from strong pipelines and new hire contributions once non-solicitation periods expire
• Full-year 2026 adjusted non-interest income growth is expected to be low-to-mid single digits, with Q4 2026 over Q4 2025 growth tracking to low single digits (excluding notable items), maintaining the lower end of the prior outlook
• Full-year 2026 adjusted non-interest expense growth guidance remains mid-single digits for the full year and on a Q4 over Q4 basis (excluding notable items)
• Management maintains its target of at least 1.15% run rate ROA in Q4 2026 and a pre-tax pre-provision run rate ROA above 1.72%, and is currently tracking ahead of these targets
• Net interest margin is expected to be flat to slightly up/down (within +/-5 bps) from Q2 2026 levels in the second half of 2026: tailwinds from repricing of fixed rate loans and reinvestment of securities portfolio roll-offs are expected to be offset by ongoing loan and deposit pricing pressures
• The company crossed the $10 billion asset threshold in 2026; the Durbin Amendment impact will take effect mid-year 2027, with an expected annual negative impact of ~$4.5 million, which management expects to offset through existing growth and partnership opportunities
• The long-term target is to achieve top quartile performance among peers within three years (by 2029)

Origin Bancorp does not break out performance into multiple distinct product segments in this call, so aggregated core performance is provided below:

• Net income: $33.8 million, diluted EPS of $1.09 (the strongest quarterly result since Q4 2021)
• Return on average assets (ROA): 1.35%, above the 1.15% near-term run rate objective
• Pre-tax, pre-provision ROA: 1.73%
• Net interest income: $92.2 million, a 5.7% sequential increase; net interest margin expanded 21 bps to 3.92%, exceeding management expectations
• Reported non-interest income: $15.4 million; adjusted non-interest income (excluding notable items) decreased sequentially from $16.4 million in Q1 due to normal insurance seasonality
• Reported non-interest expense: $64.4 million; adjusted non-interest expense (excluding notable items) increased to $64.3 million from $62.8 million in Q1, in line with expectations
• Total loans grew 2.7% sequentially (1.9% excluding mortgage warehouse): year-to-date C&I and owner-occupied commercial real estate grew $196 million, other commercial real estate grew $167 million, mortgage warehouse grew $61 million
• Total deposits declined 0.6% sequentially in line with seasonal trends; non-interest-bearing deposits grew 9.6% sequentially, ending the quarter at 26% of total deposits (25% on an average basis)

• Ongoing pricing pressure from competitors on both loans and deposits, with competitors increasingly offering non-recourse loan terms on larger relationships that Origin's conservative credit model avoids
• Near-term net interest margin pressure is possible if deposit inflows outpace loan growth due to seasonality or stronger than expected client acquisition, though this would have a positive impact on total net interest income
• Expected modest NIM and pricing pressure in 2027 could slow the pace of performance improvement towards long-term targets
• Earnings from the company's equity investment in Argent have been more volatile following Argent's acquisition of Huntington Trust business, leading to periodic quarterly estimate adjustments
• The $4.5 million annual negative impact from the Durbin Amendment starting mid-2027 requires ongoing offsetting cost and revenue initiatives

Q: Can you add detail on recent loan growth drivers, pipeline strength, and current loan pricing? What competitive dynamics are you seeing? / A: Most loan growth has come from Texas and the Southeast, which are top U.S. dislocation markets aligned with the firm's expansion strategy. More than 50% of year-to-date growth is C&I, with an average loan size of ~$590,000, and strong credit quality. Recent new loan origination yields are around 6.4%, with disciplined pricing maintained across all new production. Competitors are offering looser terms (more non-recourse lending) and pushing spreads lower, but Origin will maintain its conservative credit stance. Pipelines remain strong, and only $12 million of 2026 loan growth has come from 2026 new hires, leaving significant upside as these bankers ramp up.

Q: How sticky is the recent strong growth in non-interest-bearing deposits, and what is the outlook for Argent fees this year? When will the $10 billion asset threshold and Durbin impact take effect? / A: Non-interest-bearing deposit growth is driven by full relationship gains from market dislocation and lift-outs, so management expects this growth to be extremely sticky. Argent fee volatility this quarter came from routine estimate adjustments after actual results are reported, but full year 2026 Argent income guidance remains unchanged at $5-6 million. Origin already crossed the $10 billion asset threshold, and the Durbin Amendment impact will hit mid-2027, with the expected $4.5 million annual cost already planned to be offset by growth from the firm's Argent partnership and other initiatives.

Q: Current full year growth guidance assumes some back half deceleration — is there upside to the outlook given strong pipelines and recent hiring? What drove Q2 margin expansion, and what is the margin outlook for the second half? / A: There is clear upside to the mid-to-high single digit growth guidance once new bankers complete non-solicitation periods, particularly from the new Birmingham market. Competitor pressure on terms and pricing means management is keeping guidance unchanged for now, but the pipeline outlook is very positive. Q2 margin got a 3 bps one-time benefit from interest recoveries on non-accrual loans. Looking forward, tailwinds from repricing $250 million in maturing fixed-rate loans and 100 bps of pickup on reinvested securities roll-offs will offset pricing pressures, so management expects margin to stay roughly flat to Q2 levels through year end, with any small changes limited to +/-5 bps.

Q: How aggressive will share repurchases be following the authorization increase, and what are the key drivers of repurchase activity? / A: Prior constraints on holding company cash from the recent $150 million sub-debt repayment have been lifted, so cash availability is no longer a major limit. Repurchase activity will now be primarily driven by valuation: below 1.5x tangible book value, repurchases are attractive and will be pursued actively, while above 1.5x tangible book value the calculus becomes less favorable and activity will slow.