Origin Bancorp (OBK)

Regional banking company Origin Bancorp (NYSE:OBK) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 21% year on year to $109.8 million. Its non-GAAP loss of $0.59 per share was significantly below analysts’ consensus estimates.

Company Overview

Founded in 1912 during the early boom days of Louisiana banking, Origin Bancorp (NYSE:OBK) is a financial holding company that provides personalized banking services to businesses, municipalities, and individuals across Texas, Louisiana, and Mississippi.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

Origin Bancorp competes with other regional banks operating in Texas, Louisiana, and Mississippi, including Cadence Bank (NYSE:CADE), Hancock Whitney (NASDAQ:HWC), and Regions Financial (NYSE:RF), as well as national banks with significant presence in these markets like JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC).

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Luckily, Origin Bancorp’s revenue grew at a solid 8.4% compounded annual growth rate over the last five years. Its growth beat the average banking company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Origin Bancorp’s recent performance shows its demand has slowed as its annualized revenue growth of 1.6% over the last two years was below its five-year trend. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Origin Bancorp reported robust year-on-year revenue growth of 21%, and its $109.8 million of revenue topped Wall Street estimates by 7.6%.

Net interest income made up 83.8% of the company’s total revenue during the last five years, meaning Origin Bancorp barely relies on non-interest income to drive its overall growth.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Origin Bancorp’s solid 6.7% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Origin Bancorp’s two-year annual EPS declines of 22.8% were bad and lower than its 1.6% two-year revenue growth.

We can take a deeper look into Origin Bancorp’s earnings to better understand the drivers of its performance. A two-year view shows Origin Bancorp has diluted its shareholders, growing its share count by 1.4%. This has led to lower per share earnings. Taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q3, Origin Bancorp reported adjusted EPS of negative $0.59, down from $0.68 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Origin Bancorp’s full-year EPS of $1.87 to grow 84.8%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.

Origin Bancorp’s TBVPS grew at a decent 6% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 12.6% annually over the last two years from $26.78 to $33.95 per share.

Over the next 12 months, Consensus estimates call for Origin Bancorp’s TBVPS to grow by 9.3% to $37.11, decent growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, Origin Bancorp has averaged a Tier 1 capital ratio of 12.8%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, Origin Bancorp has averaged an ROE of 9.9%, healthy for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This is a bright spot for Origin Bancorp.

We were impressed by how significantly Origin Bancorp blew past analysts’ revenue expectations this quarter. On the other hand, its EPS missed. Overall, this quarter could have been better. The stock remained flat at $34.36 immediately following the results.

Updated: December 3, 2025 at 11:47 PM EST

Are you wondering whether to buy Origin Bancorp or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

Origin Bancorp doesn’t top our investment wishlist, but we understand that it’s not a bad business. Although its revenue growth was mediocre over the last five years, its growth over the next 12 months is expected to be higher. And while Origin Bancorp’s estimated sales for the next 12 months are weak, its expanding net interest margin shows its loan book is becoming more profitable.

Origin Bancorp’s P/B ratio based on the next 12 months is 0.9x. While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're pretty confident there are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $42.60 on the company (compared to the current share price of $37.39).