UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

Commission file number 001-38487

Origin Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Louisiana						72-1192928
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

500 South Service Road East

Ruston, Louisiana 71270

(318) 255-2222

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Exchange on which registered
Common Stock, par value $5.00 per share	OBNK	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☐☒

Accelerated filer

☒☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date: ~~23,496,058~~23,768,748 shares of Common Stock, par value $5.00 per share, were issued and outstanding at ~~October~~April 29, ~~2021.~~2022.

ORIGIN BANCORP, INC.

FORM 10-Q

~~SEPTEMBER 30, 2021~~MARCH 31, 2022

INDEX


			Page
PART I - FINANCIAL INFORMATION			5

Item 1. Financial Statements (Unaudited):			5

Consolidated Balance Sheets at March 3 ~~September~~1 ~~30, 2021,~~, 202 2 , (unaudited), and December 31, ~~2020~~2021			5
Consolidated Statements of Income for the three ~~and~~ ~~nine~~months ended March 31, 202 Se ~~ptember~~2 ~~30, 2021~~ and ~~2020,~~202 1 , (unaudited)			6
Consolidated Statements of Comprehensive Income for the three ~~and~~ ~~nine~~months ended March 31, 202 ~~September~~2 ~~30, 2021~~ and ~~2020,~~202 1 , (unaudited)			8
Consolidated Statements of Changes in Stockholders' Equity for the three ~~and~~ ~~nine~~months ended March 31, 202 ~~September~~2 ~~30, 2021~~ and ~~2020,~~202 1 , (unaudited)			9
Consolidated Statements of Cash Flows for the ~~nine~~three months ended March 31, 202 ~~September~~2 ~~30, 2021~~ and ~~2020,~~202 1 , (unaudited)			1110

Condensed Notes to Consolidated Financial Statements			1312

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			4745

Item 3. Quantitative and Qualitative Disclosures about Market Risk			7161

Item 4. Controls and Procedures			7262

Part II - OTHER INFORMATION			7363

Item 1. Legal Proceedings			7363

Item 1A. Risk Factors			7363

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			7363

Item 3. Defaults Upon Senior Securities			7363

Item 4. Mine Safety Disclosures			7363

Item 5. Other Information			7363

Item 6. Exhibits			7464

SIGNATURE PAGE			7565

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Cautionary Note Regarding Forward-Looking Statements

This ~~quarterly report~~Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements 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 or negatives of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in our forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

•business and economic conditions generally and in the financial services industry, nationally and within our local market areas, including the impact of supply-chain ~~disruptions;~~disruptions and labor pressures;

•natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities, (including the impacts related to or resulting from Russia's military action in Ukraine, including the imposition of additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments), 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 our control;

•system failures, cybersecurity threats and/or security breaches and the cost of defending against them;

•the duration and ~~impacts~~impact of the coronavirus ("COVID-19") pandemic and efforts to contain its transmission, 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, without limitation, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act") and any related future economic stimulus legislation;

•The discontinuation of LIBOR (and its replacement with alternatives) could result in financial, operational, legal, reputational or compliance risks to us;

•deterioration of our asset quality;

•risks associated with widespread inflation or deflation;

•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;

•the risks of mergers, acquisitions and divestitures, including our ability to continue to identify acquisition targets and successfully acquire and integrate desirable financial institutions;

•changes in the value of collateral securing our loans;

•our ability to anticipate interest rate changes and manage interest rate risk;

•the effectiveness of our risk management framework and quantitative models;

•our inability to receive dividends from our bank subsidiary and to service debt, pay dividends to our common stockholders, repurchase our shares of common stock and satisfy obligations as they become due;

•changes in our operation or expansion strategy or our ability to prudently manage our growth and execute our strategy;

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•changes in management personnel;

•our ability to maintain important deposit customer relationships, our reputation or otherwise avoid liquidity risks;

•increasing costs as we grow deposits;

•operational risks associated with our business;

~~Table of Contents~~

•volatility and direction of market interest rates;

•increased competition in the financial services industry, particularly from regional and national institutions;

•our level of nonperforming assets and the costs associated with resolving any problem loans, including litigation and other costs;

•our ability to comply with applicable capital and liquidity requirements, including our 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 our non-GAAP liquidity measurements and their underlying assumptions or estimates;

•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;

•the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in our loan portfolio;

•changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, as well as tax, trade, monetary and fiscal matters;

•periodic changes to the extensive body of accounting rules and best practices, may change the treatment and recognition of critical financial line items and affect our profitability;

•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;

•~~uncertainty regarding the future of the London Interbank Offered Rate and the impact of any replacement alternatives on our business;~~

•~~system failures, cybersecurity threats and/or security breaches and the cost of defending against them;~~

•other factors that are discussed in the sections titled "Item 1A. Risk Factors" in this report, in our annual report on Form 10-K for the year ended December 31, 2020, and in our other reports filed with the SEC; and

•our ability to manage the risks involved in the foregoing.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. In addition, as a result of these and other factors, our past financial performance should not be relied upon as an indication of future performance. 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 we do 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 emerge from time to time, and it is not possible for us to predict those events or how they may affect us. In addition, we cannot assess the impact of each factor on our 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.

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~~PART I - FINANCIAL INFORMATION~~

~~Item 1. Financial Statements~~

ORIGIN BANCORP, INC.

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

September 30, 2021 December 31, 2020
Assets (Unaudited)
Cash and due from banks $ 124,515 $ 60,544
Interest-bearing deposits in banks 227,450 316,670
Total cash and cash equivalents 351,965 377,214
Securities:
Available for sale 1,486,543 1,004,674
Held to maturity, net allowance for credit losses of $60 and $66 at September 30, 2021, and December 31, 2020, respectively (fair value of $40,415 and $41,205 at September 30, 2021, and December 31, 2020, respectively) 37,702 38,128
Securities carried at fair value through income 10,876 11,554
Total securities 1,535,121 1,054,356
Non-marketable equity securities held in other financial institutions 45,144 62,586
Loans held for sale ($63,001 and $136,026 at fair value at September 30, 2021, and December 31, 2020, respectively) 109,956 191,512
Loans, net of allowance for credit losses of $69,947 and $86,670 at September 30, 2021, and December 31, 2020, respectively ($0 and $17,011 at fair value at September 30, 2021, and December 31, 2020, respectively) 5,117,341 5,638,103
Premises and equipment, net 80,740 81,763
Mortgage servicing rights 16,000 13,660
Cash surrender value of bank-owned life insurance 38,162 37,553
Goodwill and other intangible assets, net 29,830 30,480
Accrued interest receivable and other assets 146,219 141,041
Total assets $ 7,470,478 $ 7,628,268
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 1,980,107 $ 1,607,564
Interest-bearing deposits 3,600,654 3,478,985
Time deposits 578,007 664,766
Total deposits 6,158,768 5,751,315
Federal Home Loan Bank ("FHLB") advances and other borrowings 309,152 984,608
Subordinated debentures, net 157,357 157,181
Accrued expenses and other liabilities 139,534 88,014
Total liabilities 6,764,811 6,981,118
Commitments and contingencies — —
Stockholders' equity:
Preferred stock, no par value, 2,000,000 shares authorized — —
Common stock ($5.00 par value; 50,000,000 shares authorized; 23,496,058 and 23,506,312 shares issued at September 30, 2021, and December 31, 2020, respectively) 117,480 117,532
Additional paid‑in capital 237,928 237,341
Retained earnings 338,387 266,628
Accumulated other comprehensive income 11,872 25,649
Total stockholders' equity 705,667 647,150
Total liabilities and stockholders' equity $ 7,470,478 $ 7,628,268


	March 31, 2022		December 31, 2021
Assets	(Unaudited)
Cash and due from banks	$	129,825	$	133,334
Interest-bearing deposits in banks	454,619		572,284

Total cash and cash equivalents	584,444		705,618

Securities:
Available for sale	1,905,687		1,504,728
Held to maturity, net allowance for credit losses of $352 and $167 at March 31, 2022, and December 31, 2021, respectively (fair value of $5,642 and $25,117 at March 31, 2022, and December 31, 2021, respectively)	4,831		22,767
Securities carried at fair value through income	7,058		7,497
Total securities	1,917,576		1,534,992
Non-marketable equity securities held in other financial institutions	45,242		45,192
Loans held for sale ($41,922 and $37,032 at fair value at March 31, 2022, and December 31, 2021, respectively)	80,295		80,387
Loans, net of allowance for credit losses of $62,173 and $64,586 at March 31, 2022, and December 31, 2021, respectively	5,132,233		5,166,745
Premises and equipment, net	80,421		80,691
Mortgage servicing rights	21,187		16,220
Cash surrender value of bank-owned life insurance	38,547		38,352
Goodwill and other intangible assets, net	50,578		51,330
Accrued interest receivable and other assets	161,772		141,758
Total assets	$	8,112,295	$	7,861,285
Liabilities and Stockholders' Equity
Noninterest-bearing deposits	$	2,295,682	$	2,163,507
Interest-bearing deposits	3,947,714		3,864,058
Time deposits	523,783		543,128
Total deposits	6,767,179		6,570,693

Federal Home Loan Bank ("FHLB") advances, repurchase obligations and other borrowings	305,560		309,801
Subordinated indebtedness, net	157,478		157,417
Accrued expenses and other liabilities	205,213		93,163
Total liabilities	7,435,430		7,131,074
Commitments and contingencies - See Note 11 - Commitments and Contingencies	0		0
Stockholders' equity:
Preferred stock, no par value, 2,000,000 shares authorized	—		—


Common stock ($5.00 par value; 50,000,000 shares authorized; 23,748,748 and 23,746,502 shares issued at March 31, 2022, and December 31, 2021, respectively)	118,744		118,733
Additional paid‑in capital	242,789		242,114
Retained earnings	381,222		363,635
Accumulated other comprehensive (loss) income	(65,890)		5,729
Total stockholders' equity	676,865		730,211
Total liabilities and stockholders' equity	$	8,112,295	$	7,861,285

The accompanying notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Income

~~(unaudited)~~(Unaudited)

(Dollars in thousands, except per share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
Interest and dividend income	Interest and dividend income										Interest and dividend income
Interest and fees on loans	Interest and fees on loans	$	53,182	$	54,150	$	165,521	$	154,921		Interest and fees on loans	$	51,183	$	56,810
Investment securities-taxable	Investment securities-taxable	3,449		2,704		9,864		8,148			Investment securities-taxable	5,113		3,300
Investment securities-nontaxable	Investment securities-nontaxable	1,582		1,571		4,844		3,720			Investment securities-nontaxable	1,400		1,672
Interest and dividend income on assets held in other financial institutions	Interest and dividend income on assets held in other financial institutions	538		375		1,297		2,491			Interest and dividend income on assets held in other financial institutions	587		345
Total interest and dividend income	Total interest and dividend income	58,751		58,800		181,526		169,280			Total interest and dividend income	58,283		62,127
Interest expense	Interest expense										Interest expense
Interest-bearing deposits	Interest-bearing deposits	3,255		5,698		10,461		22,568			Interest-bearing deposits	2,886		3,789
FHLB advances and other borrowings	FHLB advances and other borrowings	1,118		1,564		3,493		4,556			FHLB advances and other borrowings	1,094		1,269
Subordinated debentures		1,837		921		5,500		2,439
Subordinated indebtedness											Subordinated indebtedness	1,801		1,830
Total interest expense	Total interest expense	6,210		8,183		19,454		29,563			Total interest expense	5,781		6,888
Net interest income	Net interest income	52,541		50,617		162,072		139,717			Net interest income	52,502		55,239
Provision for credit losses	Provision for credit losses	(3,921)		13,633		(8,118)		53,567			Provision for credit losses	(327)		1,412
Net interest income after provision for credit losses	Net interest income after provision for credit losses	56,462		36,984		170,190		86,150			Net interest income after provision for credit losses	52,829		53,827
Noninterest income	Noninterest income										Noninterest income
Service charges and fees	Service charges and fees	3,973		3,268		11,055		9,578			Service charges and fees	3,998		3,343
Mortgage banking revenue	Mortgage banking revenue	2,728		9,523		10,070		23,009			Mortgage banking revenue	4,096		4,577
Insurance commission and fee income	Insurance commission and fee income	3,451		3,218		10,272		10,014			Insurance commission and fee income	6,456		3,771
Gain on sales of securities, net	Gain on sales of securities, net	—		301		1,673		355			Gain on sales of securities, net	—		1,668
Loss on sales and disposals of other assets, net	Loss on sales and disposals of other assets, net	(8)		(247)		(88)		(1,180)			Loss on sales and disposals of other assets, net	—		(38)
Limited partnership investment income (loss)		3,078		130		5,651		(290)
Limited partnership investment (loss) income											Limited partnership investment (loss) income	(363)		1,772
Swap fee income	Swap fee income	727		110		1,099		2,313			Swap fee income	139		348
Change in fair value of equity investments		19		—		19		—

Other fee income	Other fee income	783		576		2,177		1,649			Other fee income	598		771
Other income	Other income	1,172		1,172		3,564		3,823			Other income	982		919
Total noninterest income	Total noninterest income	15,923		18,051		45,492		49,271			Total noninterest income	15,906		17,131

The accompanying notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Income - Continued

~~(unaudited)~~(Unaudited)

(Dollars in thousands, except per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Noninterest expense
Salaries and employee benefits 23,629 22,597 68,308 68,630
Occupancy and equipment, net 4,353 4,263 13,041 12,751
Data processing 2,329 2,065 6,815 6,143
Electronic banking 997 954 2,947 2,744
Communications 359 422 1,288 1,318
Advertising and marketing 863 1,281 2,291 2,602
Professional services 912 785 2,721 2,799
Regulatory assessments 664 1,310 2,378 2,691
Loan-related expenses 1,949 1,809 5,808 4,460
Office and operations 1,598 1,367 4,550 4,152
Intangible asset amortization 194 237 650 823
Franchise tax expense 598 511 1,846 1,521
Other expenses 720 1,133 3,790 2,417
Total noninterest expense 39,165 38,734 116,433 113,051
Income before income tax expense 33,220 16,301 99,249 22,370
Income tax expense 6,242 3,206 19,025 3,565
Net income $ 26,978 $ 13,095 $ 80,224 $ 18,805
Basic earnings per common share $ 1.15 $ 0.56 $ 3.43 $ 0.81
Diluted earnings per common share 1.14 0.56 3.40 0.80


	Three Months Ended March 31,
	2022		2021
Noninterest expense
Salaries and employee benefits	26,488		22,325
Occupancy and equipment, net	4,427		4,339
Data processing	2,486		2,173
Electronic banking	917		961
Communications	281		415
Advertising and marketing	871		680
Professional services	1,631		973
Regulatory assessments	626		1,170
Loan-related expenses	1,305		1,705
Office and operations	1,560		1,454
Intangible asset amortization	537		234
Franchise tax expense	770		619
Other expenses	875		2,388
Total noninterest expense	42,774		39,436
Income before income tax expense	25,961		31,522
Income tax expense	5,278		6,009
Net income	$	20,683	$	25,513




Basic earnings per common share	$	0.87	$	1.09
Diluted earnings per common share	0.87		1.08

The accompanying notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Comprehensive Income (Loss)

~~(unaudited)~~(Unaudited)

(Dollars in thousands)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net income $ 26,978 $ 13,095 $ 80,224 $ 18,805
Other comprehensive income (loss)
Securities available for sale and transferred securities:
Net unrealized holding (loss) gain arising during the period (8,990) 1,659 (16,211) 20,574
Net losses realized as a yield adjustment in interest on investment securities (3) (3) (8) (8)
Reclassification adjustment for net gain included in net income — (301) (1,673) (355)
Change in the net unrealized (loss) gain on investment securities, before tax (8,993) 1,355 (17,892) 20,211
Income tax (benefit) expense related to net unrealized (loss) gain arising during the period (1,888) 12 (3,757) 3,971
Change in the net unrealized gain on investment securities, net of tax (7,105) 1,343 (14,135) 16,240
Cash flow hedges:
Net unrealized gain (loss) arising during the period 26 7 301 (812)
Reclassification adjustment for loss included in net income (53) (46) (152) (85)
Change in the net unrealized gain (loss) on cash flow hedges, before tax 79 53 453 (727)
Income tax expense (benefit) related to net unrealized gain (loss) on cash flow hedges 16 11 95 (152)
Change in net unrealized position on cash flow hedges, net of tax 63 42 358 (575)
Other comprehensive (loss) income, net of tax (7,042) 1,385 (13,777) 15,665
Comprehensive income $ 19,936 $ 14,480 $ 66,447 $ 34,470


	Three Months Ended March 31,
	2022		2021
Net income	$	20,683	$	25,513
Other comprehensive income (loss)
Securities available for sale and transferred securities:
Net unrealized holding (loss) arising during the period	(91,214)		(15,852)
Net losses realized as a yield adjustment in interest on investment securities	(3)		(3)
Reclassification adjustment for net gain included in net income	—		(1,668)
Change in the net unrealized (loss) on investment securities, before tax	(91,217)		(17,523)
Income tax (benefit) related to net unrealized (loss) arising during the period	(19,156)		(3,680)
Change in the net unrealized (loss) on investment securities, net of tax	(72,061)		(13,843)

Cash flow hedges:
Net unrealized gain arising during the period	513		431
Reclassification adjustment for (loss) gain included in net income	(46)		(49)
Change in the net unrealized gain on cash flow hedges, before tax	559		480
Income tax expense related to net unrealized gain on cash flow hedges	117		101
Change in net unrealized position on cash flow hedges, net of tax	442		379

Other comprehensive (loss), net of tax	(71,619)		(13,464)
Comprehensive (loss) income	$	(50,936)	$	12,049

The accompanying notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity

~~(unaudited)~~(Unaudited)

(Dollars in thousands, except per share amounts)


		Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Total Stockholders' Equity			Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Total Stockholders' Equity
Balance at January 1, 2021	Balance at January 1, 2021	23,506,312	$	117,532	$	237,341	$	266,628	$	25,649	$	647,150	Balance at January 1, 2021	23,506,312	$	117,532	$	237,341	$	266,628	$	25,649	$	647,150
Net income	Net income	—	—		—		25,513		—		25,513		Net income	—	—		—		25,513		—		25,513
Other comprehensive income, net of tax		—	—		—		—		(13,464)		(13,464)
Other comprehensive (loss), net of tax													Other comprehensive (loss), net of tax	—	—		—		—		(13,464)		(13,464)
Recognition of stock compensation, net	Recognition of stock compensation, net	20,140	100		661		—		—		761		Recognition of stock compensation, net	20,140	100		661		—		—		761
Dividends declared - common stock ($0.10 per share)	Dividends declared - common stock ($0.10 per share)	—	—		—		(2,349)		—		(2,349)		Dividends declared - common stock ($0.10 per share)	—	—		—		(2,349)		—		(2,349)
Repurchase of common stock	Repurchase of common stock	(37,568)	(188)		(1,068)		—		—		(1,256)		Repurchase of common stock	(37,568)	(188)		(1,068)		—		—		(1,256)
Balance at March 31, 2021	Balance at March 31, 2021	23,488,884	117,444		236,934		289,792		12,185		656,355		Balance at March 31, 2021	23,488,884	$	117,444	$	236,934	$	289,792	$	12,185	$	656,355

														Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Total Stockholders' Equity
Balance at January 1, 2022													Balance at January 1, 2022	23,746,502	$	118,733	$	242,114	$	363,635	$	5,729	$	730,211
Net income	Net income	—	—		—		27,733		—		27,733		Net income	—	—		—		20,683		—		20,683
Other comprehensive income, net of tax		—	—		—		—		6,729		6,729
Other comprehensive (loss), net of tax													Other comprehensive (loss), net of tax	—	—		—		—		(71,619)		(71,619)
Recognition of stock compensation, net	Recognition of stock compensation, net	13,331	67		404		—		—		471		Recognition of stock compensation, net	2,246	11		675		—		—		686
Dividends declared - common stock ($0.13 per share)	Dividends declared - common stock ($0.13 per share)	—	—		—		(3,053)		—		(3,053)		Dividends declared - common stock ($0.13 per share)	—	—		—		(3,096)		—		(3,096)
Balance at June 30, 2021		23,502,215	$	117,511	$	237,338	$	314,472	$	18,914	$	688,235
Net income		—	—		—		26,978		—		26,978
Other comprehensive income, net of tax		—	—		—		—		(7,042)		(7,042)
Recognition of stock compensation, net		(6,157)	(31)		590		—		—		559
Dividends declared - common stock ($0.13 per share)		—	—		—		(3,063)		—		(3,063)
Balance at September 30, 2021		23,496,058	$	117,480	$	237,928	$	338,387	$	11,872	$	705,667

Balance at March 31, 2022													Balance at March 31, 2022	23,748,748	$	118,744	$	242,789	$	381,222	$	(65,890)	$	676,865

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~ORIGIN BANCORP, INC.~~

~~Condensed Consolidated Statements of Changes in Stockholders' Equity - Continued~~

~~(unaudited)~~

~~(Dollars in thousands, except per share amounts)~~

Common Shares Outstanding Common
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (loss) Total
Stockholders'
Equity
Balance at January 1, 2020 23,480,945 $ 117,405 $ 235,623 $ 239,901 $ 6,333 $ 599,262
Net income — — — 753 — 753
Other comprehensive income, net of tax — — — — 9,489 9,489
Impact of adoption of ASU 2016-13 - CECL — — — (760) — (760)
Recognition of stock compensation, net 25,871 129 655 — — 784
Dividends declared - common stock ($0.0925 per share) — — — (2,174) — (2,174)
Repurchase of common stock (30,868) (154) (569) — — (723)
Balance at March 31, 2020 23,475,948 117,380 235,709 237,720 15,822 606,631
Net income — — — 4,957 — 4,957
Other comprehensive income, net of tax — — — — 4,791 4,791
Recognition of stock compensation, net 25,285 126 447 — — 573
Dividends declared - common stock ($0.0925 per share) — — — (2,171) — (2,171)
Balance at June 30, 2020 23,501,233 117,506 236,156 240,506 20,613 614,781
Net Income — — — 13,095 — 13,095
Other comprehensive income, net of tax — — — — 1,385 1,385
Recognition of stock compensation, net 5,353 27 523 — — 550
Dividends declared - common stock ($0.0925 per share) — — — (2,174) — (2,174)
Balance at September 30, 2020 23,506,586 $ 117,533 $ 236,679 $ 251,427 $ 21,998 $ 627,637

The accompanying notes are an integral part of these consolidated financial statements.

109

Table of Contents

ORIGIN BANCORP, INC.

Consolidated Statements of Cash Flows

~~(unaudited)~~(Unaudited)

(Dollars in thousands)


		Nine Months Ended September 30,				Three Months Ended March 31,
Cash flows from operating activities:	Cash flows from operating activities:	2021		2020			Cash flows from operating activities:	2022		2021
Net income	Net income	$	80,224	$	18,805		Net income	$	20,683	$	25,513
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	Provision for credit losses	(8,118)		53,567			Provision for credit losses	(327)		1,412
Depreciation and amortization	Depreciation and amortization	5,123		5,177			Depreciation and amortization	2,067		1,695
Net amortization on securities	Net amortization on securities	5,376		2,926			Net amortization on securities	2,439		1,748

Amortization of investments in tax credit funds	Amortization of investments in tax credit funds	1,345		1,077			Amortization of investments in tax credit funds	470		373
Net realized gain on securities sold		(1,673)		(355)
Gain on sale of securities, net							Gain on sale of securities, net	—		(1,668)
Deferred income tax expense (benefit)	Deferred income tax expense (benefit)	4,760		(10,302)			Deferred income tax expense (benefit)	2,572		(991)
Stock-based compensation expense	Stock-based compensation expense	1,644		1,659			Stock-based compensation expense	737		614
Originations of mortgage loans held for sale	Originations of mortgage loans held for sale	(386,298)		(500,353)			Originations of mortgage loans held for sale	(81,175)		(137,644)
Proceeds from mortgage loans held for sale	Proceeds from mortgage loans held for sale	448,747		447,267			Proceeds from mortgage loans held for sale	81,916		184,283
Gain on mortgage loans held for sale, including origination of servicing rights	Gain on mortgage loans held for sale, including origination of servicing rights	(10,014)		(12,883)			Gain on mortgage loans held for sale, including origination of servicing rights	(2,450)		(6,940)
Mortgage servicing rights valuation adjustment	Mortgage servicing rights valuation adjustment	1,942		10,680			Mortgage servicing rights valuation adjustment	(4,240)		(1,949)
Net loss on disposals of premises and equipment		7		68

Increase in the cash surrender value of life insurance	Increase in the cash surrender value of life insurance	(609)		(696)			Increase in the cash surrender value of life insurance	(195)		(204)
Gain on equity securities without a readily determinable fair value		(19)		—

Net losses on sales and write-downs of other real estate owned	Net losses on sales and write-downs of other real estate owned	81		1,031			Net losses on sales and write-downs of other real estate owned	—		38

Other operating activities, net	Other operating activities, net	2,155		(9,584)			Other operating activities, net	(7,362)		4,786
Net cash provided by operating activities	Net cash provided by operating activities	144,673		8,084			Net cash provided by operating activities	15,135		71,066
Cash flows from investing activities:	Cash flows from investing activities:						Cash flows from investing activities:

Purchases of securities available for sale	Purchases of securities available for sale	(599,586)		(408,558)			Purchases of securities available for sale	(430,946)		(71,717)
Maturities, pay downs and calls of securities available for sale		105,163		101,065
Proceeds from sales of securities available for sale		43,053		35,208
Purchase of securities held to maturity		—		(10,000)
Maturities and pay downs of securities available for sale							Maturities and pay downs of securities available for sale	40,661		38,028
Proceeds from sales and calls of securities available for sale							Proceeds from sales and calls of securities available for sale	2,662		40,493

Maturities, pay downs and calls of securities held to maturity	Maturities, pay downs and calls of securities held to maturity	424		275			Maturities, pay downs and calls of securities held to maturity	17,749		142
Pay downs of securities carried at fair value		265		250
Net sales of non-marketable equity securities held in other financial institutions		17,600		2,093

Net sales (purchases) of non-marketable equity securities held in other financial institutions							Net sales (purchases) of non-marketable equity securities held in other financial institutions	(19)		15,353
Originations of mortgage warehouse loans	Originations of mortgage warehouse loans	(12,825,009)		(8,624,764)			Originations of mortgage warehouse loans	(2,631,129)		(5,050,426)
Proceeds from pay-offs of mortgage warehouse loans	Proceeds from pay-offs of mortgage warehouse loans	13,195,671		7,881,922			Proceeds from pay-offs of mortgage warehouse loans	2,754,959		5,044,082
Net decrease (increase) in loans, excluding mortgage warehouse and loans held for sale		164,203		(735,728)
Net (increase) in loans, excluding mortgage warehouse and loans held for sale							Net (increase) in loans, excluding mortgage warehouse and loans held for sale	(88,325)		(124,129)

Return of capital on limited partnership investments		—		743
Return of capital and other distributions from limited partnership investments							Return of capital and other distributions from limited partnership investments	5,276		—

Capital calls on limited partnership investments	Capital calls on limited partnership investments	(225)		(525)			Capital calls on limited partnership investments	(97)		(225)
Purchase of low-income housing tax credit investments	Purchase of low-income housing tax credit investments	(383)		—			Purchase of low-income housing tax credit investments	—		(300)
Purchases of premises and equipment	Purchases of premises and equipment	(3,475)		(3,219)			Purchases of premises and equipment	(1,243)		(813)
Proceeds from sales of premises and equipment	Proceeds from sales of premises and equipment	18		—			Proceeds from sales of premises and equipment	—		51
Proceeds from sales of other real estate owned	Proceeds from sales of other real estate owned	1,396		3,483			Proceeds from sales of other real estate owned	—		269
Net cash provided by (used in) investing activities		99,115		(1,757,755)
Net cash (used in) investing activities							Net cash (used in) investing activities	(330,452)		(109,192)

The accompanying notes are an integral part of these consolidated financial statements.

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ORIGIN BANCORP, INC.

Consolidated Statements of Cash Flows - Continued

(Unaudited)

(Dollars in thousands)


	Three Months Ended March 31,
Cash flows from financing activities:	2022		2021
Net increase in deposits	$	196,486	$	594,879

Repayments on long-term FHLB advances	(64)		(13,529)


Proceeds from short-term FHLB advances	—		6,053,425
Repayments on short-term FHLB advances	—		(6,703,425)



Net increase (decrease) in securities sold under agreements to repurchase	805		(2,087)

Dividends paid	(3,084)		(2,341)
Cash received from exercise of stock options	—		147



Common stock repurchased	—		(1,256)
Net cash provided by (used in) financing activities	194,143		(74,187)
Net increase (decrease) in cash and cash equivalents	(121,174)		(112,313)
Cash and cash equivalents at beginning of period	705,618		377,214
Cash and cash equivalents at end of period	$	584,444	$	264,901

Interest paid	$	5,714	$	6,999
Income taxes paid	—		4,040
Significant non-cash transactions:
Unsettled liability for investment purchases recorded at trade date	115,180		1,376
Real estate acquired in settlement of loans	—		2,575
(Decrease) increase in GNMA repurchase obligations	(4,982)		9,593
Recognition of operating right-of-use assets	4,769		—
Recognition of operating lease liabilities	4,769		—

The accompanying notes are an integral part of these consolidated financial statements.

~~ORIGIN BANCORP, INC.~~

~~Consolidated Statements of Cash Flows - Continued~~

~~(unaudited)~~

~~(Dollars in thousands)~~

Nine Months Ended September 30,
Cash flows from financing activities: 2021 2020
Net increase in deposits $ 407,453 $ 1,707,313
Repayments on long-term FHLB advances (13,654) (1,298)
Proceeds from Federal Reserve Bank Paycheck Protection Program Liquidity Facility ("PPPLF") — 319,257
Repayments on PPPLF — (319,257)
Proceeds from short-term FHLB advances 5,726,000 816,000
Repayments on short-term FHLB advances (6,376,000) (896,000)
Issuance of subordinated debentures, net — 68,847
Net decrease in securities sold under agreements to repurchase (3,272) (7,820)
Dividends paid (8,454) (6,503)
Cash received from exercise of stock options 146 248
Common stock repurchased (1,256) (723)
Net cash (used in) provided by financing activities (269,037) 1,680,064
Net decrease in cash and cash equivalents (25,249) (69,607)
Cash and cash equivalents at beginning of period 377,214 291,518
Cash and cash equivalents at end of period $ 351,965 $ 221,911
Interest paid $ 20,016 $ 30,028
Income taxes paid 21,214 24,974
Significant non-cash transactions:
Unsettled liability for investment purchases recorded at trade date 53,600 8,917
Real estate acquired in settlement of loans 3,889 588

~~The accompanying notes are an integral part of these consolidated financial statements.~~

Table of Contents

ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Note 1 - Significant Accounting Policies

Nature of Operations. Origin Bancorp, Inc. ("Company") is a financial holding company headquartered in Ruston, Louisiana. The Company's wholly-owned bank subsidiary, Origin Bank ("Bank"), provides a broad range of financial services to businesses, municipalities, high net worth individuals and retail clients. The Company currently operates 4445 banking centers located in Dallas/Fort Worth and Houston, Texas, North Louisiana and in Mississippi. The Company principally operates in 1 business segment, community banking.

Basis of Presentation. The consolidated financial statements in this quarterly report on Form 10-Q include the accounts of the Company and all other entities in which Origin Bancorp, Inc. has a controlling financial interest, including the Bank and Davison Insurance Agency, LLC, doing business as Lincoln Agency, LLC (the "Lincoln Agency"), Lincoln Agency Transportation Insurance, Pulley-White Insurance Agency (the "Pulley-White"), Reeves, Coon and Funderburg, Simoneaux & Wallace Agency and Thomas & Farr ~~Agency, and Reeves, Coon and Funderburg.~~Agency. All significant intercompany balances and transactions have been eliminated in consolidation. The Company's accounting and financial reporting policies conform, in all material respects, to generally accepted accounting principles in the United States ("U.S. GAAP") and to general practices within the financial services industry. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these consolidated financial statements were issued.

The consolidated financial statements in this quarterly report on Form 10-Q have not been audited by an independent registered public accounting firm, excluding the figures as of December 31, ~~2020,~~2021, but in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company's financial position and results of operations for the periods presented. These consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and with the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, ~~2020,~~2021, included in the Company's annual report on Form 10-K ("~~2020~~2021 Form 10-K") filed with the SEC. Operating results for the interim periods disclosed herein are not necessarily indicative of results that may be expected for a full year. Certain prior period amounts have been reclassified to conform to the current year financial statement presentations. These reclassifications did not impact previously reported net income or comprehensive income.

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions based on available information that affect the amounts reported in the financial statements and disclosures provided, including the accompanying notes, and actual results could differ. Material estimates that are particularly susceptible to change include the allowance for credit losses for loans and available for sale securities; fair value measurements of assets and liabilities; and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the Company's consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual results could differ from those estimates.

Effect of Recently Adopted Accounting Standards

ASU No. ~~2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12~~ simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (ASC) 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things. The amendments were implemented effective January 1, 2021. Implementation of this ASU did not materially impact the consolidated financial statements or disclosures.

~~Effect of Newly Issued But Not Yet Effective Accounting Standards~~

~~ASU No.~~ 2021-06, Presentation of Financial Statements (Topic 205), Financial Services —Depository and ~~Lending (Topic~~Lending(Topic 942), and Financial Services — Investment Companies (Topic 946) —Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrantsamends the Accounting Standards Codification in order to agree the Codification to the new SEC releases 33-10786 and 33-10835 (the "Releases"). The Releases clearly define whether an acquired or disposed business subsidiary is significant; update, expand and eliminate certain disclosures; eliminate overlap with certain SEC and ~~GAAP~~U.S.GAAP rules; and add a new subpart of Regulation S-K. The ASU is effective upon ~~issuance,~~issuance; however, the SEC release on which the ASU is based is effective for registrants with the first fiscal year ending after December 15, 2021, while Guide 3 will be rescinded effective January 1, 2023. Implementation of this ASU did not materially impact the Company's financial statement disclosures.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Effect of Newly Issued But Not Yet Effective Accounting Standards

ASU No. 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this Update affect accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU

is effective for fiscal years beginning after December 15, ~~2021,~~2022, including interim periods within those fiscal ~~years, while certain disclosures related to Guide 3 are effective January 1, 2023.~~years. Implementation of this ASU is not expected to materially impact the Company's financial ~~statement~~statements or disclosures.

ASU No. 2022-01, Derivatives and Hedging (Topic 815) — Fair Value Hedging - Portfolio Layer Method. The amendments in this Update clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers. Additionally, this Update allows entities to elect to apply the portfolio layer method of hedge accounting in accordance with Topic 815. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Implementation of this ASU is not expected to materially impact the Company's financial statements or disclosures.

ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326) — Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. For public business entities, the amendments in this Update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is reviewing this ASU and the possible impact to the Company's financial statements or disclosures.

Table of Contents

ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Note 2 - Earnings Per Share

Basic and diluted earnings per common share are calculated using the treasury method. Under the treasury method, basic earnings per share is calculated as net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares issuable under the Company's stock ~~options~~ and ~~restricted stock awards.~~incentive compensation plans. Information regarding the Company's basic and diluted earnings per common share is presented in the following table:


(Dollars in thousands, except per share amounts)	(Dollars in thousands, except per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,				(Dollars in thousands, except per share amounts)	Three Months Ended March 31,
Numerator:	Numerator:	2021		2020		2021		2020				Numerator:	2022		2021
Net income	Net income	$	26,978	$	13,095	$	80,224	$	18,805			Net income	$	20,683	$	25,513

Denominator:	Denominator:											Denominator:

Weighted average common shares outstanding	Weighted average common shares outstanding	23,429,705		23,374,496		23,413,794		23,358,672				Weighted average common shares outstanding	23,700,550		23,393,356
Dilutive effect of stock-based awards	Dilutive effect of stock-based awards	183,305		126,100		192,803		140,166				Dilutive effect of stock-based awards	70,241		197,074
Weighted average diluted common shares outstanding	Weighted average diluted common shares outstanding	23,613,010		23,500,596		23,606,597		23,498,838				Weighted average diluted common shares outstanding	23,770,791		23,590,430

Basic earnings per common share	Basic earnings per common share	$	1.15	$	0.56	$	3.43	$	0.81			Basic earnings per common share	$	0.87	$	1.09
Diluted earnings per common share	Diluted earnings per common share	1.14		0.56		3.40		0.80				Diluted earnings per common share	0.87		1.08

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Note 3 - Securities

The following table is a summary of the amortized cost and estimated fair value, including the allowance for credit losses and gross unrealized gains and losses, of available for sale, held to maturity and securities carried at fair value through income for the dates indicated:


(Dollars in thousands) March 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses		Net Carrying Amount
Available for sale:
State and municipal securities	$	441,527	$	2,812	$	(23,754)	$	420,585	$	—	$	420,585
Corporate bonds	85,236		817		(1,422)		84,631		—		84,631
U.S. government and agency securities	268,249		2		(7,256)		260,995		—		260,995
Commercial mortgage-backed securities	114,014		—		(6,899)		107,115		—		107,115
Residential mortgage-backed securities	737,342		473		(34,451)		703,364		—		703,364
Commercial collateralized mortgage obligations	45,061		—		(2,524)		42,537		—		42,537
Residential collateralized mortgage obligations	217,819		29		(11,359)		206,489		—		206,489
Asset-backed securities	80,383		109		(521)		79,971		—		79,971
Total	$	1,989,631	$	4,242	$	(88,186)	$	1,905,687	$	—	$	1,905,687
Held to maturity:
State and municipal securities	$	5,183	$	459	$	—	$	5,642	$	(352)	$	4,831
Securities carried at fair value through income:
State and municipal securities(1)	$	7,375	$	—	$	—	$	7,058	$	—	$	7,058


December 31, 2021
Available for sale:
State and municipal securities	$	394,046	$	14,095	$	(2,323)	$	405,818	$	—	$	405,818
Corporate bonds	80,498		2,509		(273)		82,734		—		82,734
U.S. government and agency securities	98,892		2		(1,236)		97,658		—		97,658
Commercial mortgage-backed securities	65,691		—		(1,448)		64,243		—		64,243
Residential mortgage-backed securities	559,655		3,751		(5,605)		557,801		—		557,801
Commercial collateralized mortgage obligations	20,000		2		(330)		19,672		—		19,672
Residential collateralized mortgage obligations	196,691		460		(3,411)		193,740		—		193,740
Asset-backed securities	81,985		1,077		—		83,062		—		83,062
Total	$	1,497,458	$	21,896	$	(14,626)	$	1,504,728	$	—	$	1,504,728
Held to maturity:
State and municipal securities	$	22,934	$	2,183	$	—	$	25,117	$	(167)	$	22,767
Securities carried at fair value through income:
State and municipal securities(1)	$	7,375	$	—	$	—	$	7,497	$	—	$	7,497

(Dollars in thousands)
September 30, 2021
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value Allowance for Credit Losses Net Carrying Amount
Available for sale:
State and municipal securities $ 397,635 $ 13,551 $ (2,453) $ 408,733 $ — $ 408,733
Corporate bonds 76,260 2,708 (141) 78,827 — 78,827
U.S. government and agency securities 99,101 15 (615) 98,501 — 98,501
Commercial mortgage-backed securities 39,931 222 (715) 39,438 — 39,438
Residential mortgage-backed securities 553,202 5,090 (2,941) 555,351 — 555,351
Commercial collateralized mortgage obligations 10,596 — (159) 10,437 — 10,437
Residential collateralized mortgage obligations 211,293 825 (1,687) 210,431 — 210,431
Asset-backed securities 83,330 1,495 — 84,825 — 84,825
Total $ 1,471,348 $ 23,906 $ (8,711) $ 1,486,543 $ — $ 1,486,543
Held to maturity:
State and municipal securities $ 37,762 $ 2,653 $ — $ 40,415 $ (60) $ 37,702
Securities carried at fair value through income:
State and municipal securities(1)
$ 10,353 $ — $ — $ 10,876 $ — $ 10,876
December 31, 2020
Available for sale:
State and municipal securities $ 420,559 $ 21,884 $ (258) $ 442,185 $ — $ 442,185
Corporate bonds 64,313 1,762 (137) 65,938 — 65,938
U.S. government and agency securities 851 3 (5) 849 — 849
Commercial mortgage-backed securities 10,814 266 — 11,080 — 11,080
Residential mortgage-backed securities 207,742 7,441 (232) 214,951 — 214,951
Residential collateralized mortgage obligations 193,865 1,739 (261) 195,343 — 195,343
Asset-backed securities 73,451 877 — 74,328 — 74,328
Total $ 971,595 $ 33,972 $ (893) $ 1,004,674 $ — $ 1,004,674
Held to maturity:
State and municipal securities $ 38,194 $ 3,011 $ — $ 41,205 $ (66) $ 38,128
Securities carried at fair value through income:
State and municipal securities(1)
$ 10,618 $ — $ — $ 11,554 $ — $ 11,554

~~____________________________~~________________________

(1)Securities carried at fair value through income have no unrealized gains or losses at the balance sheet date as all changes in value have been recognized in the consolidated statements of income. See Note 5 - Fair Value of Financial Instruments for more information.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Securities with unrealized losses at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, aggregated by investment category and those individual securities that have been in a continuous unrealized loss position for less than 12 months, and for 12 months or more, were as follows.


		Less than 12 Months				12 Months or More				Total					Less than 12 Months				12 Months or More				Total
(Dollars in thousands) September 30, 2021		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
(Dollars in thousands) March 31, 2022														(Dollars in thousands) March 31, 2022	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available for sale:	Available for sale:													Available for sale:
State and municipal securities	State and municipal securities	$	116,139	$	(2,108)	$	9,983	$	(345)	$	126,122	$	(2,453)	State and municipal securities	$	284,749	$	(21,092)	$	18,775	$	(2,662)	$	303,524	$	(23,754)
Corporate bonds	Corporate bonds	11,907		(93)		2,952		(48)		14,859		(141)		Corporate bonds	35,517		(1,286)		2,864		(136)		38,381		(1,422)
U.S. government and agency securities	U.S. government and agency securities	52,655		(613)		464		(2)		53,119		(615)		U.S. government and agency securities	206,100		(6,777)		4,427		(479)		210,527		(7,256)
Commercial mortgage-backed securities	Commercial mortgage-backed securities	36,978		(715)		—		—		36,978		(715)		Commercial mortgage-backed securities	101,077		(6,120)		6,038		(779)		107,115		(6,899)
Residential mortgage-backed securities	Residential mortgage-backed securities	372,308		(2,902)		1,815		(39)		374,123		(2,941)		Residential mortgage-backed securities	602,374		(32,188)		26,400		(2,263)		628,774		(34,451)
Commercial collateralized mortgage obligations	Commercial collateralized mortgage obligations	10,437		(159)		—		—		10,437		(159)		Commercial collateralized mortgage obligations	42,537		(2,524)		—		—		42,537		(2,524)
Residential collateralized mortgage obligations	Residential collateralized mortgage obligations	125,886		(1,358)		20,323		(329)		146,209		(1,687)		Residential collateralized mortgage obligations	137,027		(6,664)		51,501		(4,695)		188,528		(11,359)

Asset-backed securities														Asset-backed securities	64,455		(521)		—		—		64,455		(521)
Total	Total	$	726,310	$	(7,948)	$	35,537	$	(763)	$	761,847	$	(8,711)	Total	$	1,473,836	$	(77,172)	$	110,005	$	(11,014)	$	1,583,841	$	(88,186)
Held to maturity:	Held to maturity:													Held to maturity:
State and municipal securities	State and municipal securities	$	—	$	—	$	—	$	—	$	—	$	—	State and municipal securities	$	—	$	—	$	—	$	—	$	—	$	—

December 31, 2020
December 31, 2021														December 31, 2021
Available for sale:	Available for sale:													Available for sale:
State and municipal securities	State and municipal securities	$	21,979	$	(258)	$	—	$	—	$	21,979	$	(258)	State and municipal securities	$	82,627	$	(1,651)	$	16,617	$	(672)	$	99,244	$	(2,323)
Corporate bonds	Corporate bonds	30,513		(137)		—		—		30,513		(137)		Corporate bonds	13,299		(201)		2,928		(72)		16,227		(273)
U.S. government and agency securities	U.S. government and agency securities	—		—		568		(5)		568		(5)		U.S. government and agency securities	97,010		(1,234)		440		(2)		97,450		(1,236)

Commercial mortgage-backed securities														Commercial mortgage-backed securities	57,703		(1,167)		6,540		(281)		64,243		(1,448)
Residential mortgage-backed securities	Residential mortgage-backed securities	23,178		(232)		—		—		23,178		(232)		Residential mortgage-backed securities	409,382		(5,577)		1,693		(28)		411,075		(5,605)
Commercial collateralized mortgage obligations														Commercial collateralized mortgage obligations	14,568		(330)		—		—		14,568		(330)
Residential collateralized mortgage obligations	Residential collateralized mortgage obligations	43,911		(261)		—		—		43,911		(261)		Residential collateralized mortgage obligations	127,080		(2,623)		31,301		(788)		158,381		(3,411)
Total	Total	$	119,581	$	(888)	$	568	$	(5)	$	120,149	$	(893)	Total	$	801,669	$	(12,783)	$	59,519	$	(1,843)	$	861,188	$	(14,626)
Held to maturity:	Held to maturity:													Held to maturity:
State and municipal securities	State and municipal securities	$	—	$	—	$	—	$	—	$	—	$	—	State and municipal securities	$	—	$	—	$	—	$	—	$	—	$	—

Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or ~~non credit-related~~noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Management does not have the intent to sell any of the securities in an unrealized loss position and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, at ~~September 30, 2021,~~March 31, 2022, management believes that the unrealized losses detailed in the previous table are due to ~~non credit-related~~noncredit-related factors, including changes in interest rates and other market conditions, and therefore no losses have been recognized in the Company’s consolidated statements of income.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The following table presents the activity in the allowance for credit losses for held-to-maturity debt securities.


(Dollars in thousands)	Municipal Securities
Allowance for credit losses:	2022

Balance at January 1, 2022	$	167
Credit loss expense	185
Balance at March 31, 2022	$	352
Balance at January 1, 2021	$	66
~~Credit loss recovery~~	~~(6)~~
~~Balance at September 30, 2021~~	$	60

~~Balance at January 1, 2020~~	$		—
~~Impact of adopting ASC 326~~	96
Credit loss expense	48—
Balance at ~~September 30, 2020~~March 31, 2021	$	~~144~~66

Accrued interest of ~~$6.0~~$6.8 million and ~~$4.4~~$5.6 million was not included in the calculation of the allowance at ~~September 30,~~March 31, 2022 or 2021, ~~or September 30, 2020,~~ respectively. There were no past due held-to-maturity securities or held-to-maturity securities in nonaccrual status at ~~September 30, 2021,~~March 31, 2022 or December 31, ~~2020.~~2021.

Proceeds from sales and calls, and related gross gains and losses of securities available for sale, are shown below.


		Nine Months Ended September 30,								Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		(Dollars in thousands)	2022	2021

Proceeds from sales/calls	Proceeds from sales/calls	$	43,053	$	35,208				Proceeds from sales/calls	$	2,662	$	40,493
Gross realized gains	Gross realized gains	1,705		434					Gross realized gains	—		1,700
Gross realized losses	Gross realized losses	(32)		(79)					Gross realized losses	—		(32)

The following table presents the amortized cost and fair value of securities available for sale and held to maturity at ~~September 30, 2021,~~March 31, 2022, grouped by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, which do not have contractual payments due at a single maturity date, are shown separately. Actual maturities for mortgage-backed securities, collateralized mortgage obligations and asset-backed securities will differ from contractual maturities as a result of prepayments made on the underlying loans.


(Dollars in thousands)	(Dollars in thousands)	Held to Maturity				Available for Sale				(Dollars in thousands)	Held to Maturity				Available for Sale
September 30, 2021		Amortized Cost		Fair Value		Amortized Cost		Fair Value
March 31, 2022										March 31, 2022	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	Due in one year or less	$	12,574	$	12,579	$	3,553	$	3,573	Due in one year or less	$	—	$	—	$	14,112	$	13,996
Due after one year through five years	Due after one year through five years	—		—		116,012		120,144		Due after one year through five years	—		—		282,759		279,278
Due after five years through ten years	Due after five years through ten years	25,188		27,836		155,246		158,315		Due after five years through ten years	5,183		5,642		196,493		190,003
Due after ten years	Due after ten years	—		—		298,185		304,029		Due after ten years	—		—		301,648		282,934
Commercial mortgage-backed securities	Commercial mortgage-backed securities	—		—		39,931		39,438		Commercial mortgage-backed securities	—		—		114,014		107,115
Residential mortgage-backed securities	Residential mortgage-backed securities	—		—		553,202		555,351		Residential mortgage-backed securities	—		—		737,342		703,364
Commercial collateralized mortgage obligations	Commercial collateralized mortgage obligations	—		—		10,596		10,437		Commercial collateralized mortgage obligations	—		—		45,061		42,537
Residential collateralized mortgage obligations	Residential collateralized mortgage obligations	—		—		211,293		210,431		Residential collateralized mortgage obligations	—		—		217,819		206,489
Asset-backed securities	Asset-backed securities	—		—		83,330		84,825		Asset-backed securities	—		—		80,383		79,971
Total	Total	$	37,762	$	40,415	$	1,471,348	$	1,486,543	Total	$	5,183	$	5,642	$	1,989,631	$	1,905,687

The following table presents carrying amounts of securities pledged as collateral for deposits and repurchase agreements for the period ends presented.


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021		December 31, 2020		(Dollars in thousands)	March 31, 2022		December 31, 2021
Carrying value of securities pledged to secure public deposits	Carrying value of securities pledged to secure public deposits	$	244,534	$	289,537	Carrying value of securities pledged to secure public deposits	$	558,671	$	331,651
Carrying value of securities pledged to repurchase agreements	Carrying value of securities pledged to repurchase agreements	11,669		10,982		Carrying value of securities pledged to repurchase agreements	10,399		10,312

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Note 4 - Loans

Loans consist of the following:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021		December 31, 2020		(Dollars in thousands)	March 31, 2022		December 31, 2021
Loans held for sale	Loans held for sale	$	109,956	$	191,512	Loans held for sale	$	80,295	$	80,387
LHFI:	LHFI:					LHFI:
Loans secured by real estate:	Loans secured by real estate:					Loans secured by real estate:
Commercial real estate	Commercial real estate	$	1,590,519	$	1,370,928	Commercial real estate	$	1,801,382	$	1,693,512
Construction/land/land development	Construction/land/land development	518,920		531,860		Construction/land/land development	593,350		530,083
Residential real estate	Residential real estate	913,411		885,120		Residential real estate	922,054		909,739
Total real estate	Total real estate	3,022,850		2,787,908		Total real estate	3,316,786		3,133,334
Commercial and industrial(1)	Commercial and industrial(1)	1,435,203		1,817,862		Commercial and industrial(1)	1,358,597		1,454,235
Mortgage warehouse lines of credit	Mortgage warehouse lines of credit	713,339		1,084,001		Mortgage warehouse lines of credit	503,249		627,078
Consumer	Consumer	15,896		17,991		Consumer	15,774		16,684
Total loans accounted for at amortized cost		5,187,288		5,707,762
Loans accounted for at fair value		—		17,011
Total LHFI(2)	Total LHFI(2)	5,187,288		5,724,773		Total LHFI(2)	5,194,406		5,231,331
Less: Allowance for loan losses	Less: Allowance for loan losses	69,947		86,670		Less: Allowance for loan losses	62,173		64,586
LHFI, net	LHFI, net	$	5,117,341	$	5,638,103	LHFI, net	$	5,132,233	$	5,166,745

____________________________

(1)Includes ~~$217.0~~$32.2 million and ~~$546.5~~$105.8 million of PPP loans at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(2)Includes net deferred loan fees of ~~$11.7~~$8.4 million and ~~$13.7~~$9.6 million at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, respectively.

Included in loans held for investment ("LHFI") were zero and $17.0 million of commercial real estate loans for which the fair value option was elected at September 30, 2021 and December 31, 2020, respectively. The Company mitigates the interest rate component of fair value risk on loans at fair value by entering into derivative interest rate contracts. See ~~Note 5 - Fair Value of Financial Instruments~~ ~~for more information on loans for which the fair value option has been elected.~~

The Company ~~has been~~was a participating lender in the Paycheck Protection Program ("PPP")~~. At September 30, 2021, there~~ during fiscal years 2020 and 2021. There were approximately ~~$217.0~~$32.2 million and $105.8 million in PPP loans outstanding included in the Company’s commercial and industrial loan portfolio ~~including $6.3~~at March 31, 2022, and December 31, 2021, respectively, which included $736,000 and $3.0 million in net deferred loan ~~fees.~~fees at March 31, 2022, and December 31, 2021, respectively. PPP loans have a maximum maturity of five years and earn interest at 1%. PPP loans are fully guaranteed by the U.S. government and can be forgiven by the Small Business Administration ("SBA") if the borrower uses the proceeds to pay specified expenses. The Company believes that the vast majority of its PPP loans will ultimately be forgiven by the SBA in accordance with the terms of the ~~program,~~program. The Company originated $767.4 million in PPP loans and as of ~~September 30, 2021, forgiveness has~~March 31, 2022, $731.8 million have been ~~granted on $558.7 million of PPP loans.~~forgiven.

Credit quality indicators. As part of the Company's commitment to ~~manage~~managing the credit quality of its loan portfolio, management annually and periodically updates and evaluates certain credit quality indicators, which include but are not limited to (i) weighted-average risk rating of the loan portfolio, (ii) net charge-offs, (iii) level of non-performing loans, (iv) level of classified loans (defined as substandard, doubtful and loss), and (v) the general economic conditions in the cities and states in which the Company operates. The Company maintains an internal risk rating system where ratings are assigned to individual loans based on assessed risk. Loan risk ratings are the primary indicator of credit quality for the loan portfolio and are continually evaluated to ensure they are appropriate based on currently available information.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The following is a summary description of the Company's internal risk ratings:


• Pass (1-6)			Loans within this risk rating are further categorized as follows:
Minimal risk (1)			Well-collateralized by cash equivalent instruments held by the Bank.
Moderate risk (2)			Borrowers with excellent asset quality and liquidity. Borrowers' capitalization and liquidity exceed industry norms. Borrowers in this category have significant levels of liquid assets and have a low level of leverage.
Better than average risk (3)			Borrowers with strong financial strength and excellent liquidity that consistently demonstrate strong operating performance. Borrowers in this category generally have a sizable net worth that can be converted into liquid assets within 12 months.
Average risk (4)			Borrowers with sound credit quality and financial performance, including liquidity. Borrowers are supported by sufficient cash flow coverage generated through operations across the full business cycle.
Marginally acceptable risk (5)			Loans generally meet minimum requirements for an acceptable loan in accordance with lending policy, but possess one or more attributes that cause the overall risk profile to be higher than the majority of newly approved loans.
Watch (6)			A passing loan with one or more factors that identify a potential weakness in the overall ability of the borrower to repay the loan. These weaknesses are generally mitigated by other factors that reduce the risk of delinquency or loss.
• Special Mention (7)			This grade is intended to be temporary and includes borrowers whose credit quality has deteriorated and is at risk of further decline.
• Substandard (8)			This grade includes "Substandard" loans under regulatory guidelines. Substandard loans exhibit a well-defined weakness that jeopardizes debt repayment in accordance with contractual agreements, even though the loan may be performing. These obligations are characterized by the distinct possibility that a loss may be incurred if these weaknesses are not corrected and repayment may be dependent upon collateral liquidation or secondary source of repayment.
• Doubtful (9)			This grade includes "Doubtful" loans under regulatory guidelines. Such loans are placed on nonaccrual status and repayment may be dependent upon collateral with no readily determinable valuation or valuations that are highly subjective in nature. Repayment for these loans is considered improbable based on currently existing facts and circumstances.
• Loss (0)			This grade includes "Loss" loans under regulatory guidelines. Loss loans are charged-off or written down when repayment is not expected.

In connection with the review of the loan portfolio, the Company considers risk elements attributable to particular loan types or categories in assessing the quality of individual loans. The list of loans to be reviewed for possible individual evaluation consists of nonaccrual commercial loans over $100,000 with direct exposure, unsecured loans over 90 days past due, commercial loans classified substandard or worse over $100,000 with direct exposure, ~~troubled debt restructurings ("TDRs"),~~TDRs, consumer loans greater than $100,000 with a FICO score under 625, loans greater than $100,000 in which the borrower has filed bankruptcy, and all loans 180 days or more past due. Loans under $50,000 will be evaluated collectively in designated pools unless a loss exposure has been identified. Some additional risk elements considered by loan type include:

•for commercial real estate loans, the debt service coverage ratio, operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral and the volatility of income, property value and future operating results typical of properties of that type;

•for construction, land and land development loans, the perceived feasibility of the project, including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, experience and ability of the developer and loan to value ratio;

•for residential mortgage loans, the borrower's ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral; and

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

•for commercial and industrial loans, the debt service coverage ratio (income from the business in excess of operating expenses compared to loan repayment requirements), the operating results of the commercial, industrial or professional enterprise, the borrower's business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category and the value, nature and marketability of collateral.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The following table reflects recorded investments in loans by credit quality indicator and origination year at ~~September 30, 2021,~~March 31, 2022, excluding loans held for sale and loans accounted for at fair value. The Company had an immaterial amount of revolving loans converted to term loans at ~~September 30, 2021.~~March 31, 2022.


		Term Loans																Term Loans
		Amortized Cost Basis by Origination Year																Amortized Cost Basis by Origination Year
		2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
(Dollars in thousands)																			(Dollars in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial real estate:	Commercial real estate:																		Commercial real estate:
Pass	Pass	$	362,257	$	398,932	$	295,133	$	253,886	$	123,844	$	95,542	$	21,561	$	1,551,155		Pass	$	213,746	$	547,625	$	330,492	$	256,055	$	215,760	$	185,845	$	20,262	$	1,769,785
Special mention	Special mention	4,321		—		—		8,474		17,324		—		—		30,119			Special mention	—		—		—		3,890		8,332		1,433		—		13,655
Classified	Classified	2,067		950		915		2,527		302		2,321		163		9,245			Classified	—		1,842		593		745		2,403		12,196		163		17,942

Total commercial real estate loans	Total commercial real estate loans	$	368,645	$	399,882	$	296,048	$	264,887	$	141,470	$	97,863	$	21,724	$	1,590,519		Total commercial real estate loans	$	213,746	$	549,467	$	331,085	$	260,690	$	226,495	$	199,474	$	20,425	$	1,801,382
Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	—	$	80	$	24	$	26	$	—	$	130		Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	166	$	—	$	166
Current period gross recoveries	Current period gross recoveries	—		—		—		—		—		10		—		10			Current period gross recoveries	—		—		—		—		—		2		—		2
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	80	$	24	$	16	$	—	$	120		Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	��	$	164	$	—	$	164

Construction/land/land development:	Construction/land/land development:																		Construction/land/land development:
Pass	Pass	$	191,832	$	118,126	$	102,047	$	53,742	$	5,669	$	756	$	24,832	$	497,004		Pass	$	57,089	$	272,703	$	92,952	$	87,621	$	31,925	$	5,232	$	35,645	$	583,167
Special mention	Special mention	—		—		6,817		436		1,776		—		—		9,029			Special mention	—		—		—		—		—		—		—		—
Classified	Classified	690		304		187		187		38		54		11,427		12,887			Classified	—		418		288		1,562		1,596		1,159		5,160		10,183

Total construction/land/land development loans	Total construction/land/land development loans	$	192,522	$	118,430	$	109,051	$	54,365	$	7,483	$	810	$	36,259	$	518,920		Total construction/land/land development loans	$	57,089	$	273,121	$	93,240	$	89,183	$	33,521	$	6,391	$	40,805	$	593,350
Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period gross recoveries	Current period gross recoveries	—		—		—		—		—		—		—		—			Current period gross recoveries	—		—		—		—		—		—		—		—
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Residential real estate:	Residential real estate:																		Residential real estate:
Pass	Pass	$	233,927	$	304,579	$	108,650	$	74,732	$	47,271	$	74,351	$	54,086	$	897,596		Pass	$	98,676	$	273,938	$	256,590	$	79,379	$	44,583	$	95,794	$	59,291	$	908,251
Special mention	Special mention	—		177		147		—		482		285		—		1,091			Special mention	—		—		170		—		—		—		—		170
Classified	Classified	476		170		2,298		2,964		1,949		6,602		265		14,724			Classified	101		723		126		2,235		2,630		7,448		370		13,633

Total residential real estate loans	Total residential real estate loans	$	234,403	$	304,926	$	111,095	$	77,696	$	49,702	$	81,238	$	54,351	$	913,411		Total residential real estate loans	$	98,777	$	274,661	$	256,886	$	81,614	$	47,213	$	103,242	$	59,661	$	922,054
Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	58	$	—	$	—	$	—	$	—	$	58		Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	75	$	—	$	75
Current period gross recoveries	Current period gross recoveries	—		21		—		—		25		35		—		81			Current period gross recoveries	—		—		—		—		—		6		—		6
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	—	$	(21)	$	58	$	—	$	(25)	$	(35)	$	—	$	(23)		Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	69	$	—	$	69

Table of Contents

ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements


		Term Loans
		Amortized Cost Basis by Origination Year																Term Loans
		2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total				Amortized Cost Basis by Origination Year
(Dollars in thousands)	(Dollars in thousands)																		(Dollars in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total

Commercial and industrial:	Commercial and industrial:																		Commercial and industrial:
Pass	Pass	$	430,671	$	226,901	$	117,343	$	75,605	$	16,970	$	26,823	$	491,920	$	1,386,233		Pass	$	81,971	$	355,694	$	127,696	$	77,612	$	45,066	$	35,546	$	605,033	$	1,328,618
Special mention	Special mention	775		2,180		1,743		2,131		—		—		3,501		10,330			Special mention	150		73		27		—		204		—		999		1,453
Classified	Classified	14,177		397		2,179		4,025		4,324		3,761		9,777		38,640			Classified	79		11,448		121		1,685		2,431		6,673		6,089		28,526

Total commercial and industrial loans	Total commercial and industrial loans	$	445,623	$	229,478	$	121,265	$	81,761	$	21,294	$	30,584	$	505,198	$	1,435,203		Total commercial and industrial loans	$	82,200	$	367,215	$	127,844	$	79,297	$	47,701	$	42,219	$	612,121	$	1,358,597
Current period gross charge-offs	Current period gross charge-offs	$	9	$	1,172	$	54	$	—	$	467	$	5,449	$	1,679	$	8,830		Current period gross charge-offs	$	—	$	724	$	—	$	865	$	335	$	174	$	48	$	2,146
Current period gross recoveries	Current period gross recoveries	—		6		42		3		87		185		29		352			Current period gross recoveries	—		—		—		27		12		135		461		635
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	9	$	1,166	$	12	$	(3)	$	380	$	5,264	$	1,650	$	8,478		Current period net charge-offs (recoveries)	$	—	$	724	$	—	$	838	$	323	$	39	$	(413)	$	1,511

Mortgage Warehouse Lines of Credit:	Mortgage Warehouse Lines of Credit:																		Mortgage Warehouse Lines of Credit:
Pass	Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	713,339	$	713,339		Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	503,249	$	503,249

Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period gross recoveries	Current period gross recoveries	—		—		—		—		—		—		—		—			Current period gross recoveries	—		—		—		—		—		—		—		—
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:	Consumer:																		Consumer:
Pass	Pass	$	5,084	$	2,806	$	1,735	$	673	$	76	$	80	$	5,401	$	15,855		Pass	$	2,004	$	5,646	$	1,742	$	1,237	$	300	$	82	$	4,667	$	15,678

Classified	Classified	8		21		3		—		—		2		7		41			Classified	5		20		15		8		—		—		48		96

Total consumer loans	Total consumer loans	$	5,092	$	2,827	$	1,738	$	673	$	76	$	82	$	5,408	$	15,896		Total consumer loans	$	2,009	$	5,666	$	1,757	$	1,245	$	300	$	82	$	4,715	$	15,774
Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	25	$	2	$	—	$	9	$	18	$	54		Current period gross charge-offs	$	—	$	6	$	7	$	—	$	1	$	1	$	—	$	15
Current period gross recoveries	Current period gross recoveries	—		—		9		7		1		15		4		36			Current period gross recoveries	—		—		—		—		1		4		—		5
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	—	$	—	$	16	$	(5)	$	(1)	$	(6)	$	14	$	18		Current period net charge-offs (recoveries)	$	—	$	6	$	7	$	—	$	—	$	(3)	$	—	$	10

The following table reflects recorded investments in loans by credit quality indicator and origination year at December 31, ~~2020,~~2021, excluding loans held for sale and loans accounted for at fair value. The Company had an immaterial amount of revolving loans converted to term loans at December 31, ~~2020.~~2021.


		Term Loans																Term Loans
		Amortized Cost Basis by Origination Year																Amortized Cost Basis by Origination Year
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total			(Dollars in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial real estate:~~(1)~~	Commercial real estate:~~(1)~~																		Commercial real estate:~~(1)~~
Pass	Pass	$	393,317	$	290,394	$	312,051	$	154,445	$	46,132	$	106,994	$	18,419	$	1,321,752		Pass	$	556,218	$	369,128	$	278,045	$	236,543	$	111,308	$	86,498	$	22,904	$	1,660,644
Special mention	Special mention	824		113		2,410		20,691		—		1,656		2,145		27,839			Special mention	—		—		—		8,392		15,828		—		—		24,220
Classified	Classified	2,806		1,678		6,704		6,586		1,476		1,093		994		21,337			Classified	2,045		625		772		2,456		299		2,288		163		8,648

Total commercial real estate loans	Total commercial real estate loans	$	396,947	$	292,185	$	321,165	$	181,722	$	47,608	$	109,743	$	21,558	$	1,370,928		Total commercial real estate loans	$	558,263	$	369,753	$	278,817	$	247,391	$	127,435	$	88,786	$	23,067	$	1,693,512
Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	—	$	3,622	$	199	$	1,103	$	—	$	4,924		Current period gross charge-offs	$	—	$	—	$	—	$	120	$	24	$	26	$	—	$	170
Current period gross recoveries	Current period gross recoveries	—		—		—		—		—		19		—		19			Current period gross recoveries	—		—		—		48		3		14		—		65
Current period net charge-offs		$	—	$	—	$	—	$	3,622	$	199	$	1,084	$	—	$	4,905
(1) Excludes $17.0 million of commercial real estate loans at fair value at December 31, 2020, which are not included in the loss estimation methodology due to the fair value option election.
Current period net charge-offs (recoveries)																			Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	72	$	21	$	12	$	—	$	105

Table of Contents

ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements


		Term Loans																Term Loans
		Amortized Cost Basis by Origination Year																Amortized Cost Basis by Origination Year
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total			(Dollars in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Construction/land/land development:	Construction/land/land development:																		Construction/land/land development:
Pass	Pass	$	189,311	$	150,281	$	138,000	$	12,907	$	1,812	$	1,157	$	18,892	$	512,360		Pass	$	256,212	$	102,459	$	85,442	$	32,128	$	5,422	$	553	$	30,729	$	512,945
Special mention	Special mention	323		10,421		135		1,003		—		—		—		11,882			Special mention	—		—		8,126		—		1,003		—		—		9,129
Classified	Classified	—		1,811		726		1,507		143		168		3,263		7,618			Classified	443		297		272		1,677		158		—		5,162		8,009

Total construction/land/land development loans	Total construction/land/land development loans	$	189,634	$	162,513	$	138,861	$	15,417	$	1,955	$	1,325	$	22,155	$	531,860		Total construction/land/land development loans	$	256,655	$	102,756	$	93,840	$	33,805	$	6,583	$	553	$	35,891	$	530,083
Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period gross recoveries	Current period gross recoveries	—		—		—		—		—		1		—		1			Current period gross recoveries	—		—		—		—		—		—		—		—
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	(1)	$	—	$	(1)		Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Residential real estate:	Residential real estate:																		Residential real estate:
Pass	Pass	$	367,652	$	143,368	$	103,450	$	102,272	$	41,522	$	50,094	$	53,854	$	862,212		Pass	$	313,898	$	252,115	$	109,564	$	52,515	$	45,042	$	59,690	$	60,342	$	893,166
Special mention	Special mention	188		—		29		1,875		9,287		803		—		12,182			Special mention	—		174		—		421		477		—		—		1,072
Classified	Classified	1,857		2,403		2,982		511		1,344		1,533		96		10,726			Classified	1,398		191		2,393		2,848		1,819		6,606		246		15,501

Total residential real estate loans	Total residential real estate loans	$	369,697	$	145,771	$	106,461	$	104,658	$	52,153	$	52,430	$	53,950	$	885,120		Total residential real estate loans	$	315,296	$	252,480	$	111,957	$	55,784	$	47,338	$	66,296	$	60,588	$	909,739
Current period gross charge-offs	Current period gross charge-offs	$	94	$	271	$	—	$	283	$	—	$	44	$	—	$	692		Current period gross charge-offs	$	—	$	7	$	61	$	—	$	—	$	10	$	—	$	78
Current period gross recoveries	Current period gross recoveries	—		—		—		—		—		202		—		202			Current period gross recoveries	—		21		19		—		25		52		—		117
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	94	$	271	$	—	$	283	$	—	$	(158)	$	—	$	490		Current period net charge-offs (recoveries)	$	—	$	(14)	$	42	$	—	$	(25)	$	(42)	$	—	$	(39)

Commercial and industrial:	Commercial and industrial:																		Commercial and industrial:
Pass	Pass	$	851,780	$	153,722	$	110,092	$	29,413	$	9,927	$	26,964	$	511,220	$	1,693,118		Pass	$	448,377	$	164,910	$	93,488	$	64,791	$	14,742	$	24,014	$	599,144	$	1,409,466
Special mention	Special mention	4,860		2,059		26,438		423		—		14,843		8,077		56,700			Special mention	259		2,170		—		1,519		—		—		3,752		7,700
Classified	Classified	5,436		12,250		5,859		5,450		5,950		6,707		26,392		68,044			Classified	14,378		167		2,978		3,849		3,849		3,008		8,840		37,069

Total commercial and industrial loans	Total commercial and industrial loans	$	862,076	$	168,031	$	142,389	$	35,286	$	15,877	$	48,514	$	545,689	$	1,817,862		Total commercial and industrial loans	$	463,014	$	167,247	$	96,466	$	70,159	$	18,591	$	27,022	$	611,736	$	1,454,235
Current period gross charge-offs	Current period gross charge-offs	$	189	$	204	$	87	$	121	$	3,228	$	469	$	2,404	$	6,702		Current period gross charge-offs	$	9	$	1,172	$	54	$	5	$	1,467	$	6,354	$	2,862	$	11,923
Current period gross recoveries	Current period gross recoveries	—		42		20		81		185		112		582		1,022			Current period gross recoveries	—		18		51		3		102		204		339		717
Current period net charge-offs		$	189	$	162	$	67	$	40	$	3,043	$	357	$	1,822	$	5,680
Current period net charge-offs (recoveries)																			Current period net charge-offs (recoveries)	$	9	$	1,154	$	3	$	2	$	1,365	$	6,150	$	2,523	$	11,206

Mortgage Warehouse Lines of Credit:	Mortgage Warehouse Lines of Credit:																		Mortgage Warehouse Lines of Credit:
Pass	Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	1,084,001	$	1,084,001		Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	627,078	$	627,078

Current period gross charge-offs	Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period gross recoveries	Current period gross recoveries	—		—		—		—		—		—		—		—			Current period gross recoveries	—		—		—		��		—		—		—		—
Current period net charge-offs		$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period net charge-offs (recoveries)																			Current period net charge-offs (recoveries)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer:	Consumer:																		Consumer:
Pass	Pass	$	6,702	$	3,318	$	1,578	$	203	$	116	$	83	$	5,935	$	17,935		Pass	$	6,976	$	2,169	$	1,467	$	443	$	55	$	67	$	5,407	$	16,584

Classified	Classified	28		8		—		—		6		1		13		56			Classified	26		21		1		—		—		1		51		100

Total consumer loans	Total consumer loans	$	6,730	$	3,326	$	1,578	$	203	$	122	$	84	$	5,948	$	17,991		Total consumer loans	$	7,002	$	2,190	$	1,468	$	443	$	55	$	68	$	5,458	$	16,684
Current period gross charge-offs	Current period gross charge-offs	$	—	$	39	$	23	$	8	$	—	$	4	$	2	$	76		Current period gross charge-offs	$	—	$	5	$	29	$	2	$	—	$	9	$	18	$	63
Current period gross recoveries	Current period gross recoveries	—		—		1		7		5		7		4		24			Current period gross recoveries	—		—		20		7		1		17		4		49
Current period net charge-offs (recoveries)	Current period net charge-offs (recoveries)	$	—	$	39	$	22	$	1	$	(5)	$	(3)	$	(2)	$	52		Current period net charge-offs (recoveries)	$	—	$	5	$	9	$	(5)	$	(1)	$	(8)	$	14	$	14

Table of Contents

ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The following tables present the Company's loan portfolio aging analysis at the dates indicated:


		September 30, 2021															March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Loans Past Due 90 Days or More		Total Past Due		Current Loans		Total Loans Receivable		Accruing Loans 90 or More Days Past Due		(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Loans Past Due 90 Days or More		Total Past Due		Current Loans		Total Loans Receivable		Accruing Loans 90 or More Days Past Due
Loans secured by real estate:	Loans secured by real estate:															Loans secured by real estate:
Commercial real estate	Commercial real estate	$	—	$	—	$	237	$	237	$	1,590,282	$	1,590,519	$	—	Commercial real estate	$	134	$	—	$	—	$	134	$	1,801,248	$	1,801,382	$	—
Construction/land/land development	Construction/land/land development	167		52		—		219		518,701		518,920		—		Construction/land/land development	1,420		151		—		1,571		591,779		593,350		—
Residential real estate	Residential real estate	340		85		7,917		8,342		905,069		913,411		—		Residential real estate	827		1,549		7,827		10,203		911,851		922,054		—
Total real estate	Total real estate	507		137		8,154		8,798		3,014,052		3,022,850		—		Total real estate	2,381		1,700		7,827		11,908		3,304,878		3,316,786		—
Commercial and industrial	Commercial and industrial	850		2,498		13,648		16,996		1,418,207		1,435,203		—		Commercial and industrial	1,231		172		8,340		9,743		1,348,854		1,358,597		—
Mortgage warehouse lines of credit	Mortgage warehouse lines of credit	—		—		—		—		713,339		713,339		—		Mortgage warehouse lines of credit	—		—		—		—		503,249		503,249		—
Consumer	Consumer	137		23		—		160		15,736		15,896		—		Consumer	76		—		26		102		15,672		15,774		—
Total LHFI	Total LHFI	$	1,494	$	2,658	$	21,802	$	25,954	$	5,161,334	$	5,187,288	$	—	Total LHFI	$	3,688	$	1,872	$	16,193	$	21,753	$	5,172,653	$	5,194,406	$	—

December 31, 2020
(Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Loans Past Due 90 Days or More Total Past Due Current Loans Total Loans Receivable Accruing Loans 90 or More Days Past Due
Loans secured by real estate:
Commercial real estate (1)
$ 1,072 $ — $ 3,172 $ 4,244 $ 1,383,695 $ 1,387,939 $ —
Construction/land/land development 369 1 2,328 2,698 529,162 531,860 —
Residential real estate 3,774 134 364 4,272 880,848 885,120 —
Total real estate 5,215 135 5,864 11,214 2,793,705 2,804,919 —
Commercial and industrial 703 1,097 12,625 14,425 1,803,437 1,817,862 —
Mortgage warehouse lines of credit — — — — 1,084,001 1,084,001 —
Consumer 113 9 2 124 17,867 17,991 —
Total LHFI $ 6,031 $ 1,241 $ 18,491 $ 25,763 $ 5,699,010 $ 5,724,773 $ —

~~____________________________~~

~~(1)Includes $17.0 million of commercial real estate loans at fair value.~~


	December 31, 2021
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Loans Past Due 90 Days or More		Total Past Due		Current Loans		Total Loans Receivable		Accruing Loans 90 or More Days Past Due
Loans secured by real estate:
Commercial real estate	$	22	$	—	$	197	$	219	$	1,693,293	$	1,693,512	$	—
Construction/land/land development	—		129		52		181		529,902		530,083		—
Residential real estate	2,245		352		10,331		12,928		896,811		909,739		—
Total real estate	2,267		481		10,580		13,328		3,120,006		3,133,334		—
Commercial and industrial	77		1,172		10,927		12,176		1,442,059		1,454,235		—
Mortgage warehouse lines of credit	—		—		—		—		627,078		627,078		—
Consumer	90		—		21		111		16,573		16,684		—
Total LHFI	$	2,434	$	1,653	$	21,528	$	25,615	$	5,205,716	$	5,231,331	$	—

Table of Contents

ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The following tables detail activity in the allowance for loan credit losses by portfolio segment. Accrued interest of ~~$16.3~~$15.5 million and ~~$19.3~~$20.2 million was not included in the book value for the purposes of calculating the allowance at ~~September 30,~~March 31, 2022, and March 31, 2021, ~~and September 30, 2020,~~ respectively. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three Months Ended September 30, 2021
(Dollars in thousands) Beginning Balance Charge-offs Recoveries
Provision(1)
Ending Balance
Loans secured by real estate:
Commercial real estate $ 16,282 $ — $ 4 $ (367) $ 15,919
Construction/land/land development 5,602 — — (593) 5,009
Residential real estate 9,059 — 64 (3,004) 6,119
Commercial and industrial 45,049 3,030 58 (216) 41,861
Mortgage warehouse lines of credit 560 — — (90) 470
Consumer 552 5 18 4 569
Total $ 77,104 $ 3,035 $ 144 $ (4,266) $ 69,947

~~____________________________~~



	Three Months Ended March 31, 2022
(Dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision(1)		Ending Balance		Average Balance		Net Charge-offs to Loan Average Balance(2)
Loans secured by real estate:
Commercial real estate	$	13,425	$	166	$	2	$	1,345	$	14,606	$	1,718,259	0.04	%
Construction/land/land development	4,011		—		—		569		4,580		565,347		—
Residential real estate	6,116		75		6		(226)		5,821		907,320		0.03
Commercial and industrial	40,146		2,146		635		(2,320)		36,315		1,425,236		0.43
Mortgage warehouse lines of credit	340		—		—		(11)		329		423,795		—
Consumer	548		15		5		(16)		522		16,462		0.25
Total	$	64,586	$	2,402	$	648	$	(659)	$	62,173	$	5,056,419	0.14

(1)The $327,000 provision for credit losses net benefit on the consolidated statements of income includes a $659,000 provision for loan losses net benefit, a $147,000 provision for off-balance sheet commitments and a $185,000 provision for held to maturity securities credit losses for the three months ended March 31, 2022. (2)Annualized.


	Three Months Ended March 31, 2021
(Dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision(1)		Ending Balance		Average Balance		Net Charge-offs to Loan Average Balance(2)
Loans secured by real estate:
Commercial real estate	$	15,430	$	28	$	3	$	2,992	$	18,397	$	1,421,819	0.01	%
Construction/land/land development	8,191		—		—		(802)		7,389		541,782		—
Residential real estate	9,418		—		9		(1,133)		8,294		888,208		—
Commercial and industrial	51,857		2,955		108		332		49,342		1,821,089		0.63
Mortgage warehouse lines of credit	856		—		—		67		923		961,808		—
Consumer	918		44		13		(96)		791		17,649		0.71
Total	$	86,670	$	3,027	$	133	$	1,360	$	85,136	$	5,652,355	0.21

(1)The $1.4 million provision for credit losses on the consolidated statements of income includes a $1.4 million net loan loss provision, and a $52,000 provision for off-balance sheet commitments for the three months ended March 31, 2021. (2)Annualized

~~(1)~~The ~~$3.9 million net benefit for~~release of credit ~~losses on the consolidated statements of income includes a $4.3 million net loan~~ loss ~~benefit, a $356,000~~ provision ~~for off-balance sheet commitments and a $11,000 provision benefit for held to maturity securities credit losses for~~during the three months ended ~~September 30, 2021.~~

Three Months Ended September 30, 2020
(Dollars in thousands) Beginning Balance Charge-offs Recoveries
Provision(1)
Ending Balance
Loans secured by real estate:
Commercial real estate $ 10,046 $ 200 $ — $ 4,503 $ 14,349
Construction/land/land development 6,860 — 1 1,589 8,450
Residential real estate 6,911 549 11 1,853 8,226
Commercial and industrial 45,281 1,517 480 4,519 48,763
Mortgage warehouse lines of credit 602 — — 302 904
Consumer 768 27 6 204 951
Total $ 70,468 $ 2,293 $ 498 $ 12,970 $ 81,643

~~____________________________~~

~~(1)~~March 31, 2022, reflects improved credit loss metrics with no material adjustments to model assumptions based upon economic forecasts. The ~~$13.6 million provision~~Company's credit quality profile in relation to the allowance for loan credit losses ondrove a release of $23.0 million in the ~~consolidated statements~~collectively evaluated portion of ~~income includes~~the reserve at March 31, 2022, when compared to March 31, 2021, of which a ~~$13.0~~$16.7 million ~~net loan loss provision, a $663,000 provision for off-balance sheet commitments and no provision for held~~reduction was related to ~~maturity securities credit losses for~~qualitative factor changes across the ~~three months ended September 30, 2020.~~Company's risk pools.

Nine Months Ended September 30, 2021
(Dollars in thousands) Beginning Balance Charge-offs Recoveries
Provision(1)
Ending Balance
Loans secured by real estate:
Commercial real estate $ 15,430 $ 130 $ 10 $ 609 $ 15,919
Construction/land/land development 8,191 — — (3,182) 5,009
Residential real estate 9,418 58 81 (3,322) 6,119
Commercial and industrial 51,857 8,830 352 (1,518) 41,861
Mortgage warehouse lines of credit 856 — — (386) 470
Consumer 918 54 36 (331) 569
Total $ 86,670 $ 9,072 $ 479 $ (8,130) $ 69,947

(1)The $8.1 million net benefit for credit losses on the consolidated statements of income includes a $8.1 million net loan loss benefit, a $19,000 provision for off-balance sheet commitments and a $6,000 provision benefit for held to maturity securities credit losses for the nine months ended September 30, 2021.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Nine Months Ended September 30, 2020
(Dollars in thousands) Beginning Balance Impact of Adopting ASC 326 Charge-offs Recoveries
Provision(1)
Ending Balance
Loans secured by real estate:
Commercial real estate $ 10,013 $ (5,052) $ 3,868 $ 6 $ 13,250 $ 14,349
Construction/land/land development 3,711 1,141 — 1 3,597 8,450
Residential real estate 6,332 (2,526) 598 180 4,838 8,226
Commercial and industrial 16,960 7,296 5,770 736 29,541 48,763
Mortgage warehouse lines of credit 262 29 — — 613 904
Consumer 242 360 69 13 405 951
Total $ 37,520 $ 1,248 $ 10,305 $ 936 $ 52,244 $ 81,643

(1)The $53.6 million provision for credit losses on the consolidated statements of income includes a $52.2 million net loan loss provision, a $1.3 million provision for off-balance sheet commitments and a $48,000 provision for held to maturity securities credit losses for the nine months ended September 30, 2020.

The decrease in provision expense compared to the quarter and nine months ended September 30, 2020, was primarily due to improvement in forecasted economic conditions during the quarter and nine months ended September 30, 2021, as compared to deteriorating economic conditions during the quarter and nine months ended September 30, 2020. The Company's credit quality profile in relation to the allowance for loan credit losses drove a decline of $21.7 million in the collectively evaluated portion of the reserve during the nine months ended September 30, 2021, of which a $16.7 million decrease was related to qualitative factor changes across the Company's risk pools for the nine months ended September 30, 2021. These declines were partially offset by an increase in certain specific loan reserves, at September 30, 2021.

The provision for loan credit losses for the nine months ended September 30, 2020, was driven by uncertainty related to the economic impact and duration of the COVID-19 pandemic. Based upon the requirement of CECL, economic forecasts are essential for estimating the life of loan losses. The increased risk, as reflected in current and forecast adjustments, resulted in approximately $29.2 million in provision expense across the Company’s risk pools for the nine months ended September 30, 2020. An additional $5.9 million in provision expense was due to the current and forecast effects of individually evaluated loans. The provision for commercial and industrial loans included approximately $16.4 million related to current and forecasted factors as well as approximately $5.8 million related to individually evaluated loans. There were 2 significant charge-offs in commercial and industrial loans during the nine months ended September 30, 2020 totaling $2.5 million, as well as 2 significant charge-offs in commercial real estate loans totaling $3.4 million during the same period.

The following tables show the recorded investment in loans by loss estimation methodology.


	March 31, 2022
	Collectively Evaluated		Individually Evaluated
(Dollars in thousands)	Probability of Default		Fair Value of Collateral		Discounted Cash Flow		Total
Loans secured by real estate:
Commercial real estate	$	1,799,439	$	—	$	1,943	$	1,801,382
Construction/land/land development	593,128		—		222		593,350
Residential real estate	910,986		10,602		466		922,054
Commercial and industrial	1,348,536		8,744		1,317		1,358,597
Mortgage warehouse lines of credit	503,249		—		—		503,249
Consumer	15,774		—		—		15,774
Total	$	5,171,112	$	19,346	$	3,948	$	5,194,406


	December 31, 2021
	Collectively Evaluated		Individually Evaluated
(Dollars in thousands)	Probability of Default		Fair Value of Collateral		Discounted Cash Flow		Total
Loans secured by real estate:
Commercial real estate	$	1,691,269	$	166	$	2,077	$	1,693,512
Construction/land/land development	529,789		—		294		530,083
Residential real estate	898,456		8,150		3,133		909,739
Commercial and industrial	1,441,204		8,547		4,484		1,454,235
Mortgage warehouse lines of credit	627,078		—		—		627,078
Consumer	16,682		2		—		16,684
Total	$	5,204,478	$	16,865	$	9,988	$	5,231,331

The following tables show the allowance for loan credit losses by loss estimation methodology ~~excluding loans for which the fair value option was elected~~ at March 31, 2022, and December 31, ~~2020. There were no LHFI for which the fair value option was elected at September 30,~~ 2021.


		September 30, 2021									March 31, 2022
		Collectively Evaluated		Individually Evaluated							Collectively Evaluated		Individually Evaluated
(Dollars in thousands)	(Dollars in thousands)	Probability of Default		Fair Value of Collateral		Discounted Cash Flow		Total		(Dollars in thousands)	Probability of Default		Fair Value of Collateral		Discounted Cash Flow		Total
Loans secured by real estate:	Loans secured by real estate:									Loans secured by real estate:
Commercial real estate	Commercial real estate	$	1,588,069	$	237	$	2,213	$	1,590,519	Commercial real estate	$	14,575	$	—	$	31	$	14,606
Construction/land/land development	Construction/land/land development	518,326		287		307		518,920		Construction/land/land development	4,580		—		—		4,580
Residential real estate	Residential real estate	904,482		8,335		594		913,411		Residential real estate	5,275		546		—		5,821
Commercial and industrial	Commercial and industrial	1,420,616		8,552		6,035		1,435,203		Commercial and industrial	28,567		7,745		3		36,315
Mortgage warehouse lines of credit	Mortgage warehouse lines of credit	713,339		—		—		713,339		Mortgage warehouse lines of credit	329		—		—		329
Consumer	Consumer	15,895		1		—		15,896		Consumer	522		—		—		522
Total	Total	$	5,160,727	$	17,412	$	9,149	$	5,187,288	Total	$	53,848	$	8,291	$	34	$	62,173

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

December 31, 2020
Collectively Evaluated Individually Evaluated
(Dollars in thousands) Probability of Default Fair Value of Collateral Discounted Cash Flow Total
Loans secured by real estate:
Commercial real estate(1)
$ 1,365,284 $ 3,173 $ 2,471 $ 1,370,928
Construction/land/land development 528,894 2,621 345 531,860
Residential real estate 879,015 2,009 4,096 885,120
Commercial and industrial 1,804,049 3,152 10,661 1,817,862
Mortgage warehouse lines of credit 1,084,001 — — 1,084,001
Consumer 17,991 — — 17,991
Total $ 5,679,234 $ 10,955 $ 17,573 $ 5,707,762

~~____________________________~~

~~(1)Excludes $17.0 million of commercial real estate loans at fair value, which are not included in the loss estimation methodology due to the fair value option election.~~

~~The following tables show the allowance for loan credit losses by loss estimation methodology at September 30, 2021, and December 31, 2020.~~

September 30, 2021
Collectively Evaluated Individually Evaluated
(Dollars in thousands) Probability of Default Fair Value of Collateral Discounted Cash Flow Total
Loans secured by real estate:
Commercial real estate $ 15,907 $ — $ 12 $ 15,919
Construction/land/land development 5,001 — 8 5,009
Residential real estate 6,103 16 — 6,119
Commercial and industrial 28,681 7,700 5,480 41,861
Mortgage warehouse lines of credit 470 — — 470
Consumer 568 1 — 569
Total $ 56,730 $ 7,717 $ 5,500 $ 69,947

December 31, 2020
Collectively Evaluated Individually Evaluated
(Dollars in thousands) Probability of Default Fair Value of Collateral Discounted Cash Flow Total
Loans secured by real estate:
Commercial real estate $ 14,896 $ 525 $ 9 $ 15,430
Construction/land/land development 8,062 128 1 8,191
Residential real estate 8,983 — 435 9,418
Commercial and industrial 44,714 1,707 5,436 51,857
Mortgage warehouse lines of credit 856 — — 856
Consumer 918 — — 918
Total $ 78,429 $ 2,360 $ 5,881 $ 86,670

Note that the Company is not using the collateral maintenance agreement practical expedient. The fair value of equipment collateral that secures commercial and industrial loans is estimated by third-party valuation experts.

~~Table of Contents~~

~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~


	December 31, 2021
	Collectively Evaluated		Individually Evaluated
(Dollars in thousands)	Probability of Default		Fair Value of Collateral		Discounted Cash Flow		Total
Loans secured by real estate:
Commercial real estate	$	13,416	$	—	$	9	$	13,425
Construction/land/land development	3,997		—		14		4,011
Residential real estate	5,017		19		1,080		6,116
Commercial and industrial	29,995		6,680		3,471		40,146
Mortgage warehouse lines of credit	340		—		—		340
Consumer	546		2		—		548
Total	$	53,311	$	6,701	$	4,574	$	64,586

Collateral-dependent loans consist primarily of commercial real estate and commercial and industrial loans. These loans are individually evaluated when foreclosure is probable or when the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying ~~collateral.~~collateral and, in the case of commercial and industrial loans secured by equipment, the fair value of the collateral is estimated by third-party valuation experts. Loan balances are charged down to the underlying collateral value when they are deemed uncollectible. Note that the Company did not elect to use the collateral maintenance agreement practical expedient available under CECL.

Nonaccrual LHFI were as follows:


		Nonaccrual With No Allowance for Credit Loss				Nonaccrual					Nonaccrual With No Allowance for Credit Loss				Nonaccrual
(Dollars in thousands) Loans secured by real estate:	(Dollars in thousands) Loans secured by real estate:	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		(Dollars in thousands) Loans secured by real estate:	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Commercial real estate	Commercial real estate	$	641	$	1,053	$	672	$	3,704	Commercial real estate	$	177	$	453	$	233	$	512
Construction/land/land development	Construction/land/land development	342		1,319		592		2,962		Construction/land/land development	110		52		256		338
Residential real estate	Residential real estate	7,883		2,436		9,377		6,530		Residential real estate	7,617		7,684		11,609		11,647
Total real estate	Total real estate	8,866		4,808		10,641		13,196		Total real estate	7,904		8,189		12,098		12,497
Commercial and industrial	Commercial and industrial	62		82		13,873		12,897		Commercial and industrial	743		58		8,987		12,306
Consumer	Consumer	—		—		41		56		Consumer	—		—		96		100
Total nonaccrual loans	Total nonaccrual loans	$	8,928	$	4,890	$	24,555	$	26,149	Total nonaccrual loans	$	8,647	$	8,247	$	21,181	$	24,903

All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Subsequent receipts on nonaccrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. At ~~September 30, 2021,~~March 31, 2022, the Company had no$1,000 in funding commitments for which the terms have been modified in TDRs.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ gross interest income, that would have been recorded had the nonaccruing loans been current in accordance with their original terms, was ~~$1.4 million~~$245,000 and ~~$1.1 million,~~$341,000, respectively. No interest income was recorded on these loans while they were considered nonaccrual during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.

The Company elects the fair value option for recording residential mortgage loans held for sale ~~as well as for certain commercial real estate loans at December 31, 2020,~~ in accordance with U.S. GAAP. The Company had ~~$2.1~~$2.7 million of nonaccrual mortgage loans held for sale that were recorded using the fair value option election at ~~September 30, 2021,~~March 31, 2022, compared to ~~$681,000~~$1.8 million at December 31, 2020. There were no LHFI that were recorded using the fair value option election at September 30, 2021, and there were no nonaccrual LHFI that were recorded using the fair value option election at December 31, 2020.

~~Loans classified as TDRs, excluding the impact of forbearances granted due to COVID-19, were as follows:~~

(Dollars in thousands) September 30, 2021 December 31, 2020
TDRs
Nonaccrual TDRs $ 4,559 $ 5,671
Performing TDRs 2,845 3,314
Total $ 7,404 $ 8,985
2021.

2827

Table of Contents

ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Loans classified as TDRs, excluding the impact of forbearances granted due to COVID-19, were as follows:


(Dollars in thousands)	March 31, 2022		December 31, 2021
TDRs
Nonaccrual TDRs	$	3,709	$	4,064
Performing TDRs	3,338		2,763
Total	$	7,047	$	6,827

The tables below summarize loans classified as ~~TDR's~~TDRs by loan and concession type during the ~~three and nine months ended September 30, 2021 and 2020, respectively.~~dates indicated.

Three Months Ended September 30, 2021
(Dollars in thousands) Number of Loans Restructured Pre-Modification Recorded Balance Term Concessions Interest Rate Concessions Combination of Term and Rate Concessions Total Modifications
Residential real estate 1 $ 31 $ 27 $ — $ — $ 27
Commercial and industrial 1 100 100 — — 100
Total 2 $ 131 $ 127 $ — $ — $ 127

Three Months Ended September 30, 2020
(Dollars in thousands) Number of Loans Restructured Pre-Modification Recorded Balance Term Concessions Interest Rate Concessions Combination of Term and Rate Concessions Total Modifications
Loans secured by real estate:
Commercial real estate 2 $ 1,696 $ 1,695 $ — $ — $ 1,695
Residential real estate 2 253 69 182 — 251
Total real estate 4 1,949 1,764 182 — 1,946
Commercial and industrial 2 80 80 — — 80
Consumer 1 2 — — 2 2
Total 7 $ 2,031 $ 1,844 $ 182 $ 2 $ 2,028

Nine Months Ended September 30, 2021
(Dollars in thousands) Number of Loans Restructured Pre-Modification Recorded Balance Term Concessions Interest Rate Concessions Combination of Term and Rate Concessions Total Modifications
Residential real estate 1 $ 31 $ 27 $ — $ — $ 27
Commercial and industrial 1 100 100 — — 100
Total 2 $ 131 $ 127 $ — $ — $ 127

Nine Months Ended September 30, 2020
(Dollars in thousands) Number of Loans Restructured Pre-Modification Recorded Balance Term Concessions Interest Rate Concessions Combination of Term and Rate Concessions Total Modifications
Loans secured by real estate:
Commercial real estate 2 $ 1,696 $ 1,695 $ — $ — $ 1,695
Residential real estate 2 253 69 182 — 251
Total real estate 4 1,949 1,764 182 — 1,946
Commercial and industrial 4 208 198 — — 198
Consumer 1 2 — — 2 2
Total 9 $ 2,159 $ 1,962 $ 182 $ 2 $ 2,146



	Three Months Ended March 31, 2022
(Dollars in thousands)	Number of Loans Restructured	Pre-Modification Recorded Balance		Term Concessions		Interest Rate Concessions		Combination of Term and Rate Concessions		Total Modifications





Commercial and industrial	2	$	664	$	664	$	—	$	—	$	664


Total	2	$	664	$	664	$	—	$	—	$	664

~~Table of Contents~~

~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

During the ~~nine~~three months ended ~~September 30,~~March 31, 2022, and March 31, 2021, no loan ~~defaulted after having been modified as a TDR within the previous 12 months. During the nine months ended September 30, 2020, 2 loans with an outstanding principal balance of $45,000~~ defaulted after having been modified as a TDR within the previous 12 months. A payment default is defined as a loan that was 90 or more days past due. The ~~modifications made during the nine months ended September 30, 2021 or 2020, did not significantly impact the Company's determination of the allowance for loan credit losses. The~~ Company monitors the performance of the modified loans to their restructured terms on an ongoing basis. In the event of a subsequent default, the allowance for loan credit losses continues to be reassessed on the basis of an individual evaluation of each loan. The modifications made during the three months ended March 31, 2022, and March 31, 2021, did not significantly impact the Company's determination of the allowance for loan credit losses.

Note 5 - Fair Value of Financial Instruments

Fair value is the exchange price that is expected to be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Certain assets and liabilities are recorded in the Company's consolidated financial statements at fair value. Some are recorded on a recurring basis and some on a non-recurring basis.

The Company utilizes fair value measurement to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach to estimate the fair values of its financial instruments. Such valuation techniques are consistently applied.

A hierarchy for fair value has been established, which categorizes the valuation techniques into three levels used to measure fair value. The three levels are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - Fair value is based on significant other observable inputs that are generally determined based on a single price for each financial instrument provided to the Company by an unrelated third-party pricing service and is based on one or more of the following:

•Quoted prices for similar, but not identical, assets or liabilities in active markets;

•Quoted prices for identical or similar assets or liabilities in markets that are not active;

•Inputs other than quoted prices that are observable, such as interest rate and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and

•Other inputs derived from or corroborated by observable market inputs.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Level 3 - Prices or valuation techniques that require inputs that are both significant and unobservable in the market. These instruments are valued using the best information available, some of which is internally developed, and reflects the Company's own assumptions about the risk premiums that market participants would generally require and the assumptions they would use.

There were no transfers between fair value reporting levels for any period presented.

~~Table of Contents~~

~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

Fair Values of Assets and Liabilities Recorded on a Recurring Basis

The following tables summarize financial assets and financial liabilities recorded at fair value on a recurring basis at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value. There were no changes in the valuation techniques during ~~2021~~2022 or ~~2020.~~2021.

September 30, 2021
(Dollars in thousands) Level 1 Level 2 Level 3 Total
State and municipal securities $ — $ 366,634 $ 42,099 $ 408,733
Corporate bonds — 78,827 — 78,827
U.S. treasury securities 93,047 — — 93,047
U.S. government agency securities — 5,454 — 5,454
Commercial mortgage-backed securities — 39,438 — 39,438
Residential mortgage-backed securities — 555,351 — 555,351
Commercial collateralized mortgage obligations — 10,437 — 10,437
Residential collateralized mortgage obligations — 210,431 — 210,431
Asset-backed securities — 84,825 — 84,825
Securities available for sale 93,047 1,351,397 42,099 1,486,543
Securities carried at fair value through income — — 10,876 10,876
Loans held for sale — 63,001 — 63,001
Mortgage servicing rights — — 16,000 16,000
Other assets - derivatives — 14,881 — 14,881
Total recurring fair value measurements - assets $ 93,047 $ 1,429,279 $ 68,975 $ 1,591,301
Other liabilities - derivatives $ — $ (14,679) $ — $ (14,679)
Total recurring fair value measurements - liabilities $ — $ (14,679) $ — $ (14,679)


		December 31, 2020									March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Level 1		Level 2		Level 3		Total		(Dollars in thousands)	Level 1		Level 2		Level 3		Total
State and municipal securities	State and municipal securities	$	—	$	398,120	$	44,065	$	442,185	State and municipal securities	$	—	$	365,491	$	55,094	$	420,585
Corporate bonds	Corporate bonds	—		65,938		—		65,938		Corporate bonds	—		84,631		—		84,631

U.S. treasury securities										U.S. treasury securities	117,577		—		—		117,577
U.S. government agency securities	U.S. government agency securities	—		849		—		849		U.S. government agency securities	—		143,418		—		143,418
Commercial mortgage-backed securities	Commercial mortgage-backed securities	—		11,080		—		11,080		Commercial mortgage-backed securities	—		107,115		—		107,115
Residential mortgage-backed securities	Residential mortgage-backed securities	—		214,951		—		214,951		Residential mortgage-backed securities	—		703,364		—		703,364
Commercial collateralized mortgage obligations										Commercial collateralized mortgage obligations	—		42,537		—		42,537
Residential collateralized mortgage obligations	Residential collateralized mortgage obligations	—		195,343		—		195,343		Residential collateralized mortgage obligations	—		206,489		—		206,489
Asset-backed securities	Asset-backed securities	—		74,328		—		74,328		Asset-backed securities	—		79,971		—		79,971
Securities available for sale	Securities available for sale	—		960,609		44,065		1,004,674		Securities available for sale	117,577		1,733,016		55,094		1,905,687
Securities carried at fair value through income	Securities carried at fair value through income	—		—		11,554		11,554		Securities carried at fair value through income	—		—		7,058		7,058
Loans held for sale	Loans held for sale	—		136,026		—		136,026		Loans held for sale	—		41,922		—		41,922
Loans at fair value		—		—		17,011		17,011

Mortgage servicing rights	Mortgage servicing rights	—		—		13,660		13,660		Mortgage servicing rights	—		—		21,187		21,187
Other assets - derivatives	Other assets - derivatives	—		23,694		—		23,694		Other assets - derivatives	—		13,539		—		13,539
Total recurring fair value measurements - assets	Total recurring fair value measurements - assets	$	—	$	1,120,329	$	86,290	$	1,206,619	Total recurring fair value measurements - assets	$	117,577	$	1,788,477	$	83,339	$	1,989,393

Other liabilities - derivatives	Other liabilities - derivatives	$	—	$	(23,020)	$	—	$	(23,020)	Other liabilities - derivatives	$	—	$	(12,229)	$	—	$	(12,229)
Total recurring fair value measurements - liabilities	Total recurring fair value measurements - liabilities	$	—	$	(23,020)	$	—	$	(23,020)	Total recurring fair value measurements - liabilities	$	—	$	(12,229)	$	—	$	(12,229)

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements


	December 31, 2021
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
State and municipal securities	$	—	$	364,357	$	41,461	$	405,818
Corporate bonds	—		82,734		—		82,734
U.S. treasury securities	92,245		—		—		92,245
U.S. government agency securities	—		5,413		—		5,413
Commercial mortgage-backed securities	—		64,243		—		64,243
Residential mortgage-backed securities	—		557,801		—		557,801
Commercial collateralized mortgage obligations	0		19,672		0		19,672
Residential collateralized mortgage obligations	—		193,740		—		193,740
Asset-backed securities	—		83,062		—		83,062
Securities available for sale	92,245		1,371,022		41,461		1,504,728
Securities carried at fair value through income	—		—		7,497		7,497
Loans held for sale	—		37,032		—		37,032

Mortgage servicing rights	—		—		16,220		16,220
Other assets - derivatives	—		11,459		—		11,459
Total recurring fair value measurements - assets	$	92,245	$	1,419,513	$	65,178	$	1,576,936

Other liabilities - derivatives	$	—	$	(11,494)	$	—	$	(11,494)
Total recurring fair value measurements - liabilities	$	—	$	(11,494)	$	—	$	(11,494)

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ are summarized as follows:


(Dollars in thousands)	(Dollars in thousands)	Loans at Fair Value		MSRs		Securities Available for Sale		Securities at Fair Value Through Income		(Dollars in thousands)	MSRs		Securities Available for Sale		Securities at Fair Value Through Income
Balance at January 1, 2021		$	17,011	$	13,660	$	44,065	$	11,554
Balance at January 1, 2022										Balance at January 1, 2022	$	16,220	$	41,461	$	7,497

Gain (loss) recognized in earnings:	Gain (loss) recognized in earnings:									Gain (loss) recognized in earnings:
Mortgage banking revenue(1)	Mortgage banking revenue(1)	—		(1,942)		—		—		Mortgage banking revenue(1)	4,240		—		—
Other noninterest income	Other noninterest income	(251)		—		—		(413)		Other noninterest income	—		—		(439)
Loss recognized in AOCI	Loss recognized in AOCI	—		—		(746)		—		Loss recognized in AOCI	—		(2,216)		—
Purchases, issuances, sales and settlements:	Purchases, issuances, sales and settlements:									Purchases, issuances, sales and settlements:
Originations	Originations	—		4,282		—		—		Originations	727		—		—
Purchases	Purchases	—		—		1,000		—		Purchases	—		18,015		—
Sales		—		—		—		—

Settlements	Settlements	(16,760)		—		(2,220)		(265)		Settlements	—		(2,166)		—
Balance at September 30, 2021		$	—	$	16,000	$	42,099	$	10,876
Balance at March 31, 2022										Balance at March 31, 2022	$	21,187	$	55,094	$	7,058

Balance at January 1, 2020		$	17,670	$	20,697	$	38,173	$	11,513
Gain (loss) recognized in earnings:
Mortgage banking revenue(1)		—		(10,680)		—		—
Other noninterest income		30		—		—		550
Gain recognized in AOCI		—		—		1,352		—
Purchases, issuances, sales and settlements:
Originations		—		4,305		—		—
Purchases		—		—		1,598		—
Sales		—		—		(140)		—
Settlements		(416)		—		(1,884)		(250)
Balance at September 30, 2020		$	17,284	$	14,322	$	39,099	$	11,813

~~____________________________~~


(Dollars in thousands)	Loans at Fair Value		MSRs		Securities Available for Sale		Securities at Fair Value Through Income
Balance at January 1, 2021	$	17,011	$	13,660	$	44,065	$	11,554
Gain (loss) recognized in earnings:
Mortgage banking revenue(1)	—		1,949		—		—
Other noninterest income	(59)		—		—		(477)
Loss recognized in AOCI	—		—		(489)		—
Purchases, issuances, sales and settlements:
Originations	—		1,943		—		—


Settlements	(3,374)		—		(2,101)		—
Balance at March 31, 2021	$	13,578	$	17,552	$	41,475	$	11,077

___________________________

(1)Total mortgage banking revenue includes changes in fair value due to market changes and run-off.

The Company obtains fair value measurements for loans at fair value, securities available for sale and securities at fair value through income from an independent pricing ~~service,~~service; therefore, quantitative unobservable inputs are unknown.

The following methodologies were used to measure the fair value of financial assets and liabilities valued on a recurring basis:

Securities Available for Sale

Securities classified as available for sale are reported at fair value utilizing Level 1, Level 2 or Level 3 inputs. For Level 1 securities, the Company obtains the fair value measurements for those identical assets from an independent pricing service. For Level 2 securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, market consensus prepayment speeds, credit information and the security's terms and conditions, among other things. In order to ensure the fair values are consistent with ~~Accounting Standards Codification ("ASC")~~ASC 820, Fair Value Measurements and Disclosures, the Company periodically checks the fair value by comparing them to other pricing sources, such as Bloomberg LP. The third-party pricing service is subject to an annual review of internal controls in accordance with the Statement on Standards for Attestation Engagements No. 16, which was made available to the Company. In certain cases where Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Mortgage Servicing Rights ("MSRs")

The carrying amounts of the MSRs equal fair value and are valued using a discounted cash flow valuation technique. The significant assumptions used to value MSRs were as follows:


		September 30, 2021			December 31, 2020				March 31, 2022			December 31, 2021
		Range	Weighted Average(1)		Range	Weighted Average(1)			Range	Weighted Average(1)		Range	Weighted Average(1)
Prepayment speeds	Prepayment speeds	9.22% - 37.69%	16.24	%	11.82% - 37.95%	22.08	%	Prepayment speeds	5.73% - 22.67%	7.84	%	9.10% - 36.51%	15.63	%
Discount rates	Discount rates	9.00 - 10.50	9.45		7.83 - 9.09	8.27		Discount rates	8.92 - 10.71	9.41		8.89 - 10.39	9.32

__________________________

(1)The weighted average was calculated with reference to the principal balance of the underlying mortgages.

In recent years, there have been significant market-driven fluctuations in the assumptions listed above. Loans with higher average coupon rates have a greater likelihood of prepayment during ~~the current~~comparatively low interest rate ~~environment,~~environments, while loans with lower average coupon rates have a lower likelihood of prepayment. The increase in rates since the year ended December 31, ~~2020,~~2021, has caused a decrease in our weighted average prepayment speed and an increase in our discount rate assumptions used in the MSR valuation. These fluctuations can be rapid and may continue to be significant. Therefore, estimating these assumptions within ranges that market participants would use in determining the fair value of MSRs requires significant management judgment.

Derivatives

Fair values for interest rate swap agreements are based upon the amounts that would be required to settle the contracts. Fair values for derivative loan commitments and forward loan sale commitments are based on fair values of the underlying mortgage loans and the probability of such commitments being exercised. Significant management judgment and estimation is required in determining these fair value measurements.

Fair Values of Assets Recorded on a Recurring Basis for which the Fair Value Option has been Elected

Certain assets are measured at fair value on a recurring basis due to the Company's election to adopt fair value accounting treatment for those assets. This election allows for a more effective offset of the changes in fair values of the assets and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting under ASC Topic 815, Derivatives and Hedging. For assets for which the fair value has been elected, the earned current contractual interest payment is recognized in interest income, loan origination costs and fees on fair value option loans are recognized in earnings as incurred and not deferred. At ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, there were no gains or losses recorded attributable to changes in instrument-specific credit risk. The following tables summarize the difference between the fair value and the unpaid principal balance for financial instruments for which the fair value option has been elected:


		September 30, 2021							March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference		(Dollars in thousands)	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
Loans held for sale(1)	Loans held for sale(1)	$	63,001	$	62,024	$	977	Loans held for sale(1)	$	41,922	$	41,459	$	463

Securities carried at fair value through income	Securities carried at fair value through income	10,876		10,353		523		Securities carried at fair value through income	7,058		7,375		(317)
Total	Total	$	73,877	$	72,377	$	1,500	Total	$	48,980	$	48,834	$	146

____________________________

(1)$~~2.1~~2.7 million of loans held for sale were designated as nonaccrual or 90 days or more past due at ~~September 30, 2021.~~March 31, 2022. Of this balance, ~~$1.6~~$1.5 million was guaranteed by U.S. Government agencies.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements


		December 31, 2020							December 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference		(Dollars in thousands)	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
Loans held for sale(1)	Loans held for sale(1)	$	136,026	$	129,955	$	6,071	Loans held for sale(1)	$	37,032	$	36,072	$	960
Commercial real estate LHFI(2)		17,011		16,760		251

Securities carried at fair value through income	Securities carried at fair value through income	11,554		10,618		936		Securities carried at fair value through income	7,497		7,375		122
Total	Total	$	164,591	$	157,333	$	7,258	Total	$	44,529	$	43,447	$	1,082

____________________________

(1)$~~681,000~~1.8 million of loans held for sale were designated as nonaccrual or 90 days or more past due at December 31, ~~2020.~~2021. Of this balance, ~~$473,000~~$1.2 million was guaranteed by U.S. Government agencies.

~~(2)There were no commercial real estate loans for which the fair value had been elected that were designated as nonaccrual or 90 days or more past due at December 31, 2020.~~

Changes in the fair value of assets for which the Company elected the fair value option are classified in the consolidated statement of income line items reflected in the following table:


(Dollars in thousands)	(Dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				(Dollars in thousands)	Three Months Ended March 31,
Changes in fair value included in noninterest income:	Changes in fair value included in noninterest income:	2021		2020		2021		2020				Changes in fair value included in noninterest income:	2022		2021
Mortgage banking revenue		$	(791)	$	(221)	$	(5,094)	$	3,401
Mortgage banking revenue (loans held for sale)												Mortgage banking revenue (loans held for sale)	$	(497)	$	(4,125)
Other income:	Other income:											Other income:
Loans at fair value held for investment	Loans at fair value held for investment	(126)		(103)		(251)		30				Loans at fair value held for investment	—		(59)
Securities carried at fair value through income	Securities carried at fair value through income	(97)		(164)		(413)		550				Securities carried at fair value through income	(439)		(477)
Total impact on other income	Total impact on other income	(223)		(267)		(664)		580				Total impact on other income	(439)		(536)
Total fair value option impact on noninterest income (1)	Total fair value option impact on noninterest income (1)	$	(1,014)	$	(488)	$	(5,758)	$	3,981			Total fair value option impact on noninterest income (1)	$	(936)	$	(4,661)

____________________________

(1)The fair value option impact on noninterest income is offset by the derivative gain/loss recognized in noninterest income. Please see Note 6 - Mortgage Banking for more detail.

The following methodologies were used to measure the fair value of financial assets valued on a recurring basis for which the fair value option was elected:

Securities at Fair Value through Income

Securities carried at fair value through income are valued using a discounted cash flow with a credit spread applied to each instrument based on the ~~credit worthiness~~creditworthiness of each issuer. Credit spreads ranged from 83 to 227 basis points at both ~~September 30, 2021,~~March 31, 2022 and December 31, ~~2020.~~2021. The Company believes the fair value approximates an exit price.

Loans Held for Sale

Fair values for loans held for sale are established using anticipated sale prices for loans allocated to a sale commitment, and those unallocated to a commitment are valued based on the interest rate and term for similar loans allocated. The Company believes the fair value approximates an exit price.

~~LHFI~~

For LHFI for which the fair value option has been elected, fair values are calculated using a discounted cash flow model with inputs including observable interest rate curves and unobservable credit adjustment spreads based on credit risk inherent in the loan. There are no LHFI for which the fair value option has been elected at September 30, 2021. Credit spreads ranged from 290 to 413 basis points at December 31, 2020. The Company believes the fair value approximates an exit price.

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~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

Fair Value of Assets Recorded on a Nonrecurring Basis

Equity Securities without Readily Determinable Fair Values

Equity securities without readily determinable fair values totaled ~~$45.1 million and $62.6~~$45.2 million at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020, respectively,~~2021, and are shown on the face of the consolidated balance sheets. The majority of the Company's equity investments qualify for the practical expedient allowed for equity securities without a readily determinable fair value, such that the Company has elected to carry these securities at cost adjusted for any observable transactions during the period, less any impairment. To date, no impairment has been recorded on the Company's investments in equity securities that do not have readily determinable fair values.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Government National Mortgage Association Repurchase Asset

The Company recorded ~~$47.0~~$38.4 million and ~~$55.5~~$43.4 million, respectively, at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, for Government National Mortgage Association ("GNMA") repurchase assets included in ~~mortgage~~ loans held for sale on the consolidated balance sheets. The assets are valued at the lower of cost or market and, where market is lower than cost, valued using anticipated sale prices for loans allocated to a sale commitment, and those unallocated to a commitment are valued based on the interest rate and term for similar loans allocated. The Company believes the fair value approximates an exit price. Please see Note 6 - Mortgage Banking for more information on the GNMA repurchase asset.

Collateral Dependent Loans with Credit Losses

Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured to determine if any credit loss exists. Allowable methods for determining the amount of credit loss ~~includes~~include estimating the fair value using the fair value of the collateral for collateral-dependent loans. If the loan is identified as collateral-dependent, the fair value method of measuring the amount of credit loss is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Loans that have experienced a credit loss that are collateral-dependent are classified within Level 3 of the fair value hierarchy when the credit loss is determined using the fair value method. The fair value of loans that have experienced a credit loss with specific allocated losses was approximately ~~$3.8~~$5.5 million and ~~$12.3~~$4.8 million at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, respectively.

Non-Financial Assets

Foreclosed assets held for sale are the only non-financial assets valued on a non-recurring basis that are initially recorded by the Company at fair value, less estimated costs to sell. At foreclosure, if the fair value, less estimated costs to sell, of the real estate acquired is less than the Company's recorded investment in the related loan, a write-down is recognized through a charge to the allowance for loan credit losses. Additionally, valuations are periodically performed by management, and any subsequent reduction in value is recognized by a charge to income. The carrying value and fair value of foreclosed assets held for sale iswas estimated using Level 3 inputs based on observable market data and was ~~$4.0 million and $1.6~~$1.5 million at ~~September 30, 2021,~~March 31, 2022 and December 31, ~~2020, respectively.~~2021. At ~~September 30, 2021,~~March 31, 2022, the Company had ~~$5.9~~$6.7 million in principal amount of residential mortgage loans in the process of foreclosure.

Fair Values of Financial Instruments Not Recorded at Fair Value

Loans

The estimated fair value approximates carrying value for variable-rate loans that reprice frequently and with no significant change in credit risk. The fair value of ~~fixed-rate~~fixed rate loans and variable-rate loans, which reprice on an infrequent basis, is estimated by discounting future cash flows using exit level pricing, which combines the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality and an estimated additional rate to reflect a liquidity premium. An overall valuation adjustment is made for specific credit risks as well as general portfolio credit risk.

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~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

Deposits

The estimated fair value approximates carrying value for demand deposits. The fair value of ~~fixed-rate~~fixed rate deposit liabilities with defined maturities is estimated by discounting future cash flows using the interest rates currently available for funding from the FHLB. The estimated fair value of deposits does not take into account the value of our long-term relationships with depositors, commonly known as core deposit intangibles, which are separate intangible assets, and not considered financial instruments. Nonetheless, the Company would likely realize a core deposit premium if the deposit portfolio were sold in the principal market for such deposits.

Borrowed Funds

The estimated fair value approximates carrying value for short-term borrowings. The fair value of long-term ~~fixed-rate~~fixed rate and fixed-to-floating-rate borrowings is estimated using quoted market prices, if available, or by discounting future cash flows using current interest rates for similar financial instruments. The estimated fair value approximates carrying value for variable-rate junior subordinated debentures that reprice quarterly.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The carrying value and estimated fair values of financial instruments not recorded at fair value are as follows:

(Dollars in thousands) September 30, 2021 December 31, 2020
Financial assets:
Level 1 inputs:
Carrying
Value Estimated
Fair Value Carrying
Value Estimated
Fair Value
Cash and cash equivalents $ 351,965 $ 351,965 $ 377,214 $ 377,214
Level 2 inputs:
Non-marketable equity securities held in other financial institutions 45,144 45,144 62,586 62,586
Accrued interest and loan fees receivable 23,806 23,806 27,146 27,146
Level 3 inputs:
Securities held to maturity 37,702 40,415 38,128 41,205
LHFI, net(1)
5,117,341 5,092,269 5,621,092 5,802,744
Financial liabilities:
Level 2 inputs:
Deposits 6,158,768 6,160,571 5,751,315 5,756,312
FHLB advances and other borrowings 309,152 304,501 984,608 991,943
Subordinated debentures 157,357 156,569 157,181 156,395
Accrued interest payable 2,994 2,994 3,556 3,556

~~____________________________~~

~~(1)~~Does not include loans for which the fair value option had been elected at December 31, 2020, as these loans are carried at fair value on a recurring basis. There are no loans for which the fair value option had been elected at September 30, 2021.



(Dollars in thousands)	March 31, 2022				December 31, 2021
Financial assets: Level 1 inputs:	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and cash equivalents	$	584,444	$	584,444	$	705,618	$	705,618
Level 2 inputs:
Non-marketable equity securities held in other financial institutions	45,242		45,242		45,192		45,192
Accrued interest and loan fees receivable	23,728		23,728		23,402		23,402
Level 3 inputs:
Securities held to maturity	4,831		5,642		22,767		25,117
LHFI, net	5,132,233		5,095,816		5,166,745		5,133,257
Financial liabilities:
Level 2 inputs:
Deposits	6,767,179		6,761,821		6,570,693		6,572,215
FHLB advances and other borrowings	305,560		270,814		309,801		305,374
Subordinated indebtedness	157,478		156,690		157,417		156,629
Accrued interest payable	2,764		2,764		2,696		2,696

~~Table of Contents~~

~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

Note 6 - Mortgage Banking

The following table presents the Company's revenue from mortgage banking operations:


(Dollars in thousands)	(Dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				(Dollars in thousands)	Three Months Ended March 31,
Mortgage banking revenue	Mortgage banking revenue	2021		2020		2021		2020				Mortgage banking revenue	2022		2021
Origination	Origination	$	349	$	492	$	1,101	$	1,391			Origination	$	205	$	376
Gain on sale of loans held for sale	Gain on sale of loans held for sale	1,984		5,613		10,014		8,578				Gain on sale of loans held for sale	1,723		4,997
Originations of MSRs	Originations of MSRs	1,089		1,780		4,282		4,305				Originations of MSRs	727		1,943
Servicing	Servicing	1,501		1,526		4,537		4,642				Servicing	1,426		1,501
Total gross mortgage revenue	Total gross mortgage revenue	4,923		9,411		19,934		18,916				Total gross mortgage revenue	4,081		8,817
MSR valuation adjustments, net	MSR valuation adjustments, net	(1,170)		(2,693)		(1,942)		(10,680)				MSR valuation adjustments, net	4,240		1,949
Mortgage HFS and pipeline fair value adjustment	Mortgage HFS and pipeline fair value adjustment	(1,046)		540		(6,201)		7,337				Mortgage HFS and pipeline fair value adjustment	326		(3,158)

MSR hedge impact	MSR hedge impact	21		2,265		(1,721)		7,436				MSR hedge impact	(4,551)		(3,031)

Mortgage banking revenue	Mortgage banking revenue	$	2,728	$	9,523	$	10,070	$	23,009			Mortgage banking revenue	$	4,096	$	4,577

Management uses mortgage-backed securities to mitigate the impact of changes in fair value of MSRs. See Note 87 - Derivative Financial Instruments for further information.

Mortgage Servicing Rights

Activity in MSRs was as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2021 2020 2021 2020
Fair Value at Beginning of Period $ 16,081 $ 15,235 $ 13,660 $ 20,697
Originations of MSRs 1,089 1,780 4,282 4,305
Valuation adjustments, net (1,170) (2,693) (1,942) (10,680)
Fair Value at End of Period $ 16,000 $ 14,322 $ 16,000 $ 14,322


	Three Months Ended March 31,
(Dollars in thousands)	2022		2021
Balance at beginning of period	$	16,220	$	13,660
Addition of servicing rights	727		1,943
Valuation adjustment, net of amortization	4,240		1,949

Balance at end of period	$	21,187	$	17,552

The Company receives annual servicing fee income approximating 0.28% of the outstanding balance of the underlying loans. In connection with the Company's activities as a servicer of mortgage loans, the investors and the securitization trusts have no recourse to the Company's assets for failure of debtors to pay when due.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The Company is potentially subject to losses in its loan servicing portfolio due to loan foreclosures. The Company has obligations to either repurchase the outstanding principal balance of a loan or make the purchaser whole for the economic benefits of a loan if it is determined that the loan sold violated representations or warranties made by the Company and/or the borrower at the time of the sale, which the Company refers to as mortgage loan servicing ~~put back~~putback expenses. Such representations and warranties typically include those made regarding loans that had missing or insufficient file documentation and/or loans obtained through fraud by borrowers or other third parties. ~~Put back~~Putback claims may be made until the loan is paid in full. When a ~~put back~~putback claim is received, the Company evaluates the claim and takes appropriate actions based on the nature of the claim. The Company is required by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to provide a response to ~~put back~~putback claims within 60 ~~days~~ of the date of receipt.

At ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, the reserve for mortgage loan servicing ~~put back~~putback expenses totaled ~~$365,000~~$334,000 and ~~$311,000,~~$379,000, respectively. There is inherent uncertainty in reasonably estimating the requirement for reserves against future mortgage loan servicing ~~put back~~putback expenses. Future ~~put back~~putback expenses depend on many subjective factors, including the review procedures of the purchasers and the potential refinance activity on loans sold with servicing released and the subsequent consequences under the representations and warranties.

~~Table of Contents~~

~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

GNMA optional repurchase programs allow financial institutions to buy back individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing. At the servicer's option and without GNMA's prior authorization, the servicer may repurchase a delinquent loan for an amount equal to 100% of the remaining principal balance of the loan. This buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When a financial institution is deemed to have regained effective control over these loans under the unconditional buy-back option, the loans can no longer be reported as sold and must be included in the balance sheet as mortgage loans held for sale, regardless of whether the institution intends to exercise the buy-back option. These loans totaled ~~$47.0~~$38.4 million and ~~$55.5~~$43.4 million at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, respectively, and were recorded as mortgage loans held for sale, at the lower of cost or fair value with a corresponding liability in FHLB advances and other borrowings on the Company's consolidated balance sheets.

~~Note 7 - Borrowings~~

~~Borrowed funds are summarized as follows:~~

(Dollars in thousands) September 30, 2021 December 31, 2020
Overnight repurchase agreements with depositors $ 5,136 $ 8,408
Short-term FHLB advances — 650,000
GNMA repurchase liability 46,955 55,485
Long-term FHLB advances 257,061 270,715
Total FHLB advances and other borrowings $ 309,152 $ 984,608
Subordinated debentures, net $ 157,357 $ 157,181

Security for all indebtedness and outstanding commitments to the FHLB consists of a blanket floating lien on all of the Company's first mortgage loans, commercial real estate and other real estate loans, as well as the Company's investment in capital stock of the FHLB and deposit accounts at the FHLB. The net amounts available under the blanket floating lien at September 30, 2021 and December 31, 2020, were $837.7 million and $456.9 million, respectively.

Note 87 - Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company enters into derivative financial instruments to manage risks related to differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments, as well as to manage changes in fair values of some assets which are marked at fair value through the consolidated statement of income on a recurring basis.

Cash Flow Hedges of Interest Rate Risk

The Company is a party to an interest rate swap agreement under which the Company receives interest at a variable rate and pays at a fixed rate. The derivative instrument represented by this swap agreement is designated as a cash flow hedge of the Company's forecasted variable cash flows under a variable-rate term borrowing agreement. During the term of the swap agreement, the effective portion of changes in the fair value of the derivative instrument are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the periods that the hedged forecasted variable-rate interest payments affected earnings. There was no ineffective portion of the change in fair value of the derivative recognized directly in earnings. The entire swap fair value will be reclassified into earnings before the expiration date of the swap agreement.

~~Table of Contents~~

~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

Derivatives Not Designated as Hedges

Customer interest rate derivative program

The Company offers certain derivatives products, primarily interest rate swaps, directly to qualified commercial banking customers to facilitate their risk management strategies. In some instances, the Company acts only as an intermediary, simultaneously entering into offsetting agreements with unrelated financial institutions, thereby mitigating its net risk exposure resulting from such transactions without significantly impacting its results of operations. Because the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and any offsetting derivatives are recognized directly in earnings as a component of noninterest income.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

From time to time, the Company shares in credit risk on interest rate swap arrangements, by entering into risk participation agreements with syndication partners. These are accounted for at fair value and disclosed as risk participation derivatives.

Mortgage banking derivatives

The Company enters into certain derivative agreements as part of its mortgage banking and related risk management activities. These agreements include interest rate lock commitments on prospective residential mortgage loans and forward commitments to sell these loans to investors on a mandatory delivery basis. The Company also economically hedges the value of MSRs by entering into a series of commitments to purchase mortgage-backed securities in the future.

Fair Values of Derivative Instruments on the Balance Sheet

The following tables disclose the fair value of derivative instruments in the Company's balance sheets at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, as well as the effect of these derivative instruments on the Company's consolidated statements of income for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020:~~2021.


		Notional Amounts(1)				Fair Values					Notional Amounts(1)				Fair Values
(Dollars in thousands) Derivatives designated as cash flow hedging instruments:	(Dollars in thousands) Derivatives designated as cash flow hedging instruments:	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		(Dollars in thousands) Derivatives designated as cash flow hedging instruments:	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Interest rate swaps included in other liabilities		$	21,000	$	21,000	$	(254)	$	(706)
Interest rate swaps included in other assets										Interest rate swaps included in other assets	$	17,000	$	21,000	$	457	$	(103)

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:									Derivatives not designated as hedging instruments:
Interest rate swaps included in other assets	Interest rate swaps included in other assets	$	348,353	$	326,542	$	13,160	$	20,207	Interest rate swaps included in other assets	$	307,605	$	315,188	$	11,216	$	10,417
Interest rate swaps included in other liabilities	Interest rate swaps included in other liabilities	363,738		347,096		(13,893)		(21,321)		Interest rate swaps included in other liabilities	319,841		327,510		(11,275)		(10,762)
Risk participation derivatives included in accrued expenses and other liabilities on the consolidated balance sheets	Risk participation derivatives included in accrued expenses and other liabilities on the consolidated balance sheets	63,374		63,374		(7)		(18)		Risk participation derivatives included in accrued expenses and other liabilities on the consolidated balance sheets	63,374		63,374		—		(2)
Forward commitments to purchase mortgage-backed securities included in other liabilities	Forward commitments to purchase mortgage-backed securities included in other liabilities	85,000		107,000		(507)		(317)		Forward commitments to purchase mortgage-backed securities included in other liabilities	45,000		80,000		(954)		(627)
Forward commitments to sell residential mortgage loans included in other assets (liabilities)		76,620		107,200		264		(658)
Forward commitments to sell residential mortgage loans included in other assets										Forward commitments to sell residential mortgage loans included in other assets	56,000		52,000		1,234		1
Interest rate-lock commitments on residential mortgage loans included in other assets	Interest rate-lock commitments on residential mortgage loans included in other assets	54,957		79,554		1,457		3,487		Interest rate-lock commitments on residential mortgage loans included in other assets	48,694		36,694		632		1,041
		$	992,042	$	1,030,766	$	474	$	1,380		$	840,514	$	874,766	$	853	$	68

____________________________

(1)Notional or contractual amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets.

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~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

The weighted-average rates paid and received for interest rate swaps at ~~September 30, 2021,~~March 31, 2022, were as follows:


		Weighted-Average Interest Rate
				Weighted-Average Interest Rate

Interest rate swaps:	Interest rate swaps:	Paid			Received		Interest rate swaps:	Paid		Received
Cash flow hedges	Cash flow hedges	4.81	%		2.85	%	Cash flow hedges	5.40	%	3.54	%
Non-hedging interest rate swaps - financial institution counterparties	Non-hedging interest rate swaps - financial institution counterparties	4.16			2.54		Non-hedging interest rate swaps - financial institution counterparties	4.35		2.85
Non-hedging interest rate swaps - customer counterparties	Non-hedging interest rate swaps - customer counterparties	2.55			4.16		Non-hedging interest rate swaps - customer counterparties	2.86		4.35

Gains and losses recognized on derivative instruments not designated as hedging instruments are as follows:


(Dollars in thousands)	(Dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				(Dollars in thousands)		Three Months Ended March 31,
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:	2021		2020		2021		2020			Derivatives not designated as hedging instruments:		2022		2021
Amount of gain (loss) recognized in mortgage banking revenue (1)		$	(984)	$	1,286	$	(2,471)	$	5,491
Amount of (loss) gain recognized in other non-interest income		75		157		409		(472)
Amount of (loss) recognized in mortgage banking revenue (1)											Amount of (loss) recognized in mortgage banking revenue (1)		$	(2,407)	$	(1,206)
Amount of gain recognized in other non-interest income											Amount of gain recognized in other non-interest income		286		307

____________________________

(1)Gains and losses on these instruments are largely offset by market fluctuations in mortgage servicing rights. See Note 6 - Mortgage Banking for more information on components of mortgage banking revenue.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Some interest rate swaps included in other assets were subject to a master netting arrangement with the counterparty in all years presented and could be offset against some amounts included in interest rate swaps included in other liabilities. The Company has chosen not to net these exposures in the consolidated balance sheets, and any impact of netting these amounts would not be significant.

At ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, the Company had cash collateral on deposit with swap counterparties totaling ~~$17.5~~$7.2 million and ~~$22.2~~$16.5 million, respectively. These amounts are included in interest-bearing deposits in banks in the consolidated balance sheets and are considered restricted cash until such time as the underlying swaps are settled.

Note 98 - Stock and Incentive Compensation Plans

OnThe Company has granted, and currently has outstanding, stock and incentive compensation awards subject to the provisions of the Company's 2012 Stock Incentive Plan (the "2012 Plan"). Additionally, stock options were issued prior to the establishment of the 2012 Plan, some of which were still outstanding at March 31, 2022. The 2012 Plan is designed to provide flexibility to the Company regarding its ability to motivate, attract and retain the services of key officers, employees and directors. The 2012 Plan allows the Company to make grants of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards ("RSA"), restricted stock units ("RSU"), dividend equivalent rights, performance stock units ("PSU") or any combination thereof. At March 31, 2022, the maximum number of shares of the Company's common stock available for issuance under the 2012 Plan was 597,304 shares.

Additionally, in April ~~28,~~ 2021, an employee stock purchase plan ("ESPP") was approved by the Company's stockholders and qualified as an ESPP under IRS guidelines. The ESPP provides for the purchase of up to an aggregate 1 million shares of the Company's common stock by employees pursuant to the terms of the ESPP. Under the ESPP, employees of the Company, who elect to participate, have the right to purchase a limited number of shares of the Company's common stock at a 15% discount from the lower of the market value of the common stock at the beginning or the end of each one year offering period, beginning on June 1st. The ESPP benefit is treated as compensation to the employee, and the compensation expense will be recognized over the service period based on the fair value of the rights on the grant date, adjusted for forfeitures and certain modifications.

There were no shares of common stock issued pursuant to the ESPP during ~~the quarter~~three months ended March 31, 2022 or ~~year-to-date period ended September 30,~~March 31, 2021.

The Company ~~has~~ granted PSUs to select officers and ~~currently has outstanding, stock and incentive compensation awards subject~~employees pursuant to the ~~provisions~~approval by the Compensation Committee ("Committee") in February 2022. Each PSU to which the participant becomes entitled represents a right for the participant to receive shares of Company common stock or cash equal to the fair market value of such stock, as determined by the Committee. The number of PSUs to which the participant will be entitled will vary from 0% to 150% of the ~~Company's 2012 Stock Incentive Plan (the "2012 Plan"). Additionally, awards have been issued prior~~target number of PSUs, based on the Company’s achievement of specified performance criteria during the performance period compared to performance benchmarks adopted by the ~~establishment~~Committee and, further, the participant's continuous service with the Company through the third anniversary of the 2012 Plan, some of which were still outstanding at September 30, 2021. The 2012 Plan is designed to provide flexibility to the Company regarding its ability to motivate, attract and retain the services of key officers, employees and directors. The 2012 Plan allows the Company to make grants of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards ("RSA"), restricted stock units ("RSU"), dividend equivalent rights, performance unit awards or any combination thereof. At September 30, 2021, the maximum number of sharesdate of the ~~Company's common stock available for issuance under~~grant. The performance period is the ~~2012 Plan was 838,072 shares.~~

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~~ORIGIN BANCORP, INC.~~

~~Condensed Notes to Consolidated Financial Statements~~

3-year period commencing on January 1, 2022 and ending on December 31, 2024 ("Performance Period").

Share-based compensation cost charged to income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ is presented below. There was no stock option expense for any of the periods shown.


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		2021		2020			(Dollars in thousands)	2022		2021
RSA & RSU	RSA & RSU	$	477	$	550	$	1,535	$	1,659		RSA & RSU	$	611	$	614
PSU											PSU	46		—
ESPP	ESPP	82		—		109		—			ESPP	80		—
Total stock compensation expense	Total stock compensation expense	$	559	$	550	$	1,644	$	1,659		Total stock compensation expense	$	737	$	614
Related tax benefits recognized in net income	Related tax benefits recognized in net income	117		116		345		348			Related tax benefits recognized in net income	$	155	$	129

Restricted Stock and Performance Stock Grants

The Company's ~~restricted stock grants~~RSAs and RSUs are time-vested awards and are granted to the Company's Board of Directors, executives and senior management team. The service period in which time-vested awards are earned ranges from one to five years. Time-vested awards are valued utilizing the fair value of the Company's stock at the grant date. These awards are recognized on the straight-line method over the requisite service period, with forfeitures recognized as they occur.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The Company's PSU awards are three-year cliff-vested awards, with each unit divided into 2 categories ("ROAA Unit Group" and "ROAE Unit Group"), composed of an equivalent number of PSUs. The ROAA Unit Group is based upon the Company's Performance Period Return on Average Assets performance, and the ROAE Unit Group is based upon the Company's Performance Period Return on Average Equity performance. The PSUs are initially valued utilizing the fair value of the Company's stock at the grant date, assuming 100% of the target number of units are achieved. Subsequent valuation of the PSUs is determined using the ratio of the actual Company's Performance Period ROAA or ROAE to the Company's targeted Performance Period ROAA or ROAE, applied to the PSUs awarded times the Company's period end stock price. Forfeitures are recognized as they occur.

The following table summarizes the Company's ~~time-vested~~ award activity:


		Nine Months Ended September 30,						Three Months Ended March 31,
		2021			2020				2022			2021
		Shares	Weighted Average Grant-Date Fair Value		Shares	Weighted Average Grant-Date Fair Value					Shares	Weighted Average Grant-Date Fair Value		Shares	Weighted Average Grant-Date Fair Value
Nonvested RSA shares, January 1,	Nonvested RSA shares, January 1,	103,359	$	31.51	149,449	$	35.15			Nonvested RSA shares, January 1,	48,048	$	35.27	103,359	$	31.51
Granted RSA	Granted RSA	13,460	42.26		30,638	20.14				Granted RSA	—	—		6,286	33.82
Vested RSA	Vested RSA	(55,827)	29.90		(52,289)	33.39				Vested RSA	—	—		(1,782)	27.20
Forfeited RSA	Forfeited RSA	(946)	24.69		(4,129)	37.14				Forfeited RSA	—	—		(946)	24.69
Nonvested RSA shares, September 30,		60,046	35.52		123,669	32.11
Nonvested RSA shares, March 31,										Nonvested RSA shares, March 31,	48,048	35.27		106,917	31.78

Nonvested RSU, January 1,	Nonvested RSU, January 1,	—	$	—	—	$	—			Nonvested RSU, January 1,	73,977	$	40.64	—	$	—
Granted RSU	Granted RSU	70,573	40.40		—	—				Granted RSU	40,475	44.77		—	—
Nonvested RSU, September 30,		70,573	40.40		—	—
Forfeited RSU										Forfeited RSU	(743)	40.40		—	—
Nonvested RSU, March 31										Nonvested RSU, March 31	113,709	42.11		—	—

Nonvested PSU, January 1										Nonvested PSU, January 1	—	$	—	—	$	—
Granted PSU										Granted PSU	27,632	44.77		—	—
Nonvested PSU, March 31										Nonvested PSU, March 31	27,632	44.77		—	—

At ~~September 30, 2021,~~March 31, 2022, there was ~~$1.5~~$834,000, $4.4 million and ~~$2.7~~$1.2 million of total unrecognized compensation cost related to nonvested RSA shares, RSU shares and ~~RSU~~PSU shares under the 2012 Plan, respectively. Those costs are expected to be recognized over a weighted-average period of ~~1.6~~1.2 years, 1.7 years and 2.9 years for RSA shares, RSU shares and ~~RSU~~PSU shares, respectively.

Stock Option Grants

The Company ~~issues~~has previously issued common stock options to select officers and employees primarily through individual agreements and as a result of obligations assumed in association with certain business combinations. As a result, both incentive and nonqualified stock options have been issued and may be issued in the future.agreements. The exercise price of each option varies by agreement and is based on ~~either~~ the fair value of the stock at the date of the ~~grant in circumstances where option grants occurred or based on the previously committed exercise price in the case of options acquired through merger.~~grant. No outstanding stock option has a term that exceeds twenty years, and all of the outstanding options are fully vested. The Company recognizes compensation cost for stock option grants over the required service period based upon the grant date fair value, which is established using a Black-Scholes valuation model. The Black-Scholes valuation model uses assumptions of risk-free interest rate, expected term of stock options, expected stock price volatility and expected dividends. Forfeitures are recognized as they occur.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The table below summarizes the status of the Company's stock options and changes during the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020.~~.

(Dollars in thousands, except per share amounts) Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term
(in years) Aggregate Intrinsic Value
Nine Months Ended September 30, 2021
Outstanding at January 1, 2021 224,000 $ 10.86 4.92 $ 3,789
Exercised (14,800) 9.89 — —
Outstanding and exercisable at September 30, 2021 209,200 10.93 4.55 6,574
Nine Months Ended September 30, 2020
Outstanding at January 1, 2020 254,000 $ 10.55 5.81 $ 6,932
Exercised (30,000) 8.25 — —
Outstanding and exercisable at September 30, 2020 224,000 10.86 5.17 2,353


(Dollars in thousands, except per share amounts)	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Three Months Ended March 31, 2022
Outstanding at January 1, 2022	39,200	$	10.73	2.28	$	1,262
Exercised	(4,800)	13.31		—	—
Outstanding and exercisable at March 31, 2022	34,400	10.37		2.34	1,098

Three Months Ended March 31, 2021
Outstanding at January 1, 2021	224,000	$	10.86	4.92	$	3,789
Exercised	(14,800)	9.89		—	—
Outstanding and exercisable at March 31, 2021	209,200	10.93		5.05	6,587

Note 109 - Accumulated Other Comprehensive Income

Accumulated other comprehensive income ("AOCI") includes the after-tax change in unrealized gains and losses on AFS securities and cash flow hedging activities.


(Dollars in thousands)	(Dollars in thousands)	Unrealized Gain (Loss) on AFS Securities		Unrealized (Loss) Gain on Cash Flow Hedges		Accumulated Other Comprehensive Income		(Dollars in thousands)	Unrealized Gain (Loss) on AFS Securities		Unrealized (Loss) Gain on Cash Flow Hedges		Accumulated Other Comprehensive (Loss) Income
Balance at January 1, 2022								Balance at January 1, 2022	$	5,809	$	(80)	$	5,729
Net change								Net change	(72,061)		442		(71,619)
Balance at March 31, 2022								Balance at March 31, 2022	$	(66,252)	$	362	$	(65,890)

Balance at January 1, 2021	Balance at January 1, 2021	$	26,206	$	(557)	$	25,649	Balance at January 1, 2021	$	26,206	$	(557)	$	25,649
Net change	Net change	(14,135)		358		(13,777)		Net change	(13,843)		379		(13,464)
Balance at September 30, 2021		$	12,071	$	(199)	$	11,872

Balance at January 1, 2020		$	6,412	$	(79)	$	6,333
Net change		16,240		(575)		15,665
Balance at September 30, 2020		$	22,652	$	(654)	$	21,998
Balance at March 31, 2021								Balance at March 31, 2021	$	12,363	$	(178)	$	12,185

Note 1110 - Capital and Regulatory Matters

The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

The Company is subject to the Basel III regulatory capital framework ("Basel III Capital Rules"), which includes a 2.5% capital conservation ~~buffer effective for the Company as of January 1, 2019.~~buffer. The capital conservation buffer is designed to absorb losses during periods of economic stress and requires increased capital levels for the purpose of capital distributions and other payments. Failure to meet the full amount of the buffer will result in restrictions on the Company's ability to make capital distributions, which includes dividend payments, ~~and~~ stock repurchases and to pay discretionary bonuses to executive officers.

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total, common equity Tier 1 capital, Tier 1 capital, Tier 1 capital, and total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average total consolidated assets (as defined). Management believes, at ~~September 30, 2021,~~March 31, 2022 and December 31, ~~2020,~~2021, that the Company and the Bank met all capital adequacy requirements to which they are subject, including the capital buffer requirement.

At ~~September 30, 2021,~~March 31, 2022 and December 31, ~~2020,~~2021, the Bank's capital ratios exceeded those levels necessary to be categorized as ~~"well-capitalized"~~"well capitalized" under the regulatory framework for prompt corrective action. To be categorized as ~~"well-capitalized,~~"well capitalized," the Bank must maintain minimum total risk-based, common equity Tier 1 capital, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. A final rule adopted by the federal banking agencies in February 2019 provides banking organizations with the option to phase in, over a three-year period, the adverse day-one regulatory capital effects of the adoption of CECL. In addition, on March 27, 2020, the federal banking agencies issued an interim final rule that gives banking organizations that were required to implement CECL before the end of 2020 the option to delay for two years CECL’s adverse effects on regulatory capital. Origin elected to adopt CECL in the first quarter of 2020 and exercised the option to delay the estimated impact of the adoption of CECL on the Company's regulatory capital for two years (from January 2020 through December 31, 2021)~~, which resulted in an 18 basis point benefit to the common equity Tier 1 capital to risk-weighted assets capital ratio at September 30, 2021.~~. The two-year delay ~~will be~~is followed by ~~the~~a three-year transition period of CECL's initial impact on our regulatory capital (from January 1, 2022 through December 31, 2024). The amount representing the CECL impact to the Company's regulatory capital that will be ratably transiting back into regulatory capital over the transition period is $7.0 million and $7.6 million at March 31, 2022, and December 31, 2021, respectively.

The actual capital amounts and ratios of the Company and Bank at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, are presented in the following table:


(Dollars in thousands) September 30, 2021		Actual				Minimum Capital Required - Basel III				To be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands) March 31, 2022														(Dollars in thousands) March 31, 2022	Actual				Minimum Capital Required - Basel III				To be Well Capitalized Under Prompt Corrective Action Provisions
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets	Amount		Ratio		Amount		Ratio		Amount		Ratio		Common Equity Tier 1 Capital to Risk-Weighted Assets	Amount		Ratio		Amount		Ratio		Amount		Ratio
Origin Bancorp, Inc.	Origin Bancorp, Inc.	$	673,003	11.23	%	$	419,630	7.00	%	N/A		N/A		Origin Bancorp, Inc.	$	699,538	11.20	%	$	437,270	7.00	%	N/A		N/A
Origin Bank	Origin Bank	701,939		11.79		416,719		7.00		$	386,953	6.50	%	Origin Bank	740,991		11.91		435,676		7.00		$	404,556	6.50	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets													Tier 1 Capital to Risk-Weighted Assets
Origin Bancorp, Inc.	Origin Bancorp, Inc.	682,403		11.38		509,551		8.50		N/A		N/A		Origin Bancorp, Inc.	708,955		11.35		530,973		8.50		N/A		N/A
Origin Bank	Origin Bank	701,939		11.79		506,016		8.50		476,250		8.00		Origin Bank	740,991		11.91		529,035		8.50		497,915		8.00
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets													Total Capital to Risk-Weighted Assets
Origin Bancorp, Inc.	Origin Bancorp, Inc.	893,412		14.90		629,446		10.50		N/A		N/A		Origin Bancorp, Inc.	914,619		14.64		655,977		10.50		N/A		N/A
Origin Bank	Origin Bank	834,307		14.01		625,078		10.50		595,313		10.00		Origin Bank	867,955		13.95		653,515		10.50		622,395		10.00
Leverage Ratio	Leverage Ratio													Leverage Ratio
Origin Bancorp, Inc.	Origin Bancorp, Inc.	682,403		9.18		297,379		4.00		N/A		N/A		Origin Bancorp, Inc.	708,955		8.84		320,747		4.00		N/A		N/A
Origin Bank	Origin Bank	701,939		9.48		296,152		4.00		370,190		5.00		Origin Bank	740,991		9.26		319,920		4.00		399,900		5.00
December 31, 2020
December 31, 2021														December 31, 2021
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets													Common Equity Tier 1 Capital to Risk-Weighted Assets
Origin Bancorp, Inc.	Origin Bancorp, Inc.	604,306		9.95		425,012		7.00		N/A		N/A		Origin Bancorp, Inc.	681,039		11.20	%	425,475		7.00	%	N/A		N/A
Origin Bank	Origin Bank	637,863		10.53		424,010		7.00		393,724		6.50		Origin Bank	724,440		11.97		423,819		7.00		393,546		6.50	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets													Tier 1 Capital to Risk-Weighted Assets
Origin Bancorp, Inc.	Origin Bancorp, Inc.	613,682		10.11		516,107		8.50		N/A		N/A		Origin Bancorp, Inc.	690,448		11.36		516,648		8.50		N/A		N/A
Origin Bank	Origin Bank	637,863		10.53		514,870		8.50		484,583		8.00		Origin Bank	724,440		11.97		514,637		8.50		484,365		8.00
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets													Total Capital to Risk-Weighted Assets
Origin Bancorp, Inc.	Origin Bancorp, Inc.	837,058		13.79		637,539		10.50		N/A		N/A		Origin Bancorp, Inc.	897,503		14.77		638,212		10.50		N/A		N/A
Origin Bank	Origin Bank	782,503		12.92		636,019		10.50		605,732		10.00		Origin Bank	852,825		14.09		635,727		10.50		605,454		10.00
Leverage Ratio	Leverage Ratio													Leverage Ratio
Origin Bancorp, Inc.	Origin Bancorp, Inc.	613,682		8.62		284,771		4.00		N/A		N/A		Origin Bancorp, Inc.	690,448		9.20		300,195		4.00		N/A		N/A
Origin Bank	Origin Bank	637,863		8.99		283,842		4.00		354,802		5.00		Origin Bank	724,440		9.66		299,932		4.00		374,915		5.00

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

In the ordinary course of business, the Company depends on dividends from the Bank to provide funds for the payment of dividends to stockholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared and paid exceed the Bank's year-to-date net income combined with the retained net income for the preceding year, which was ~~$87.6~~$109.9 million at ~~September 30, 2021.~~March 31, 2022.

Stock Repurchases

In July 2019, our board of directors authorized a stock buyback program pursuant to which we may, from time to time, purchase up to $40 million of our outstanding common stock. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the SEC. The stock buyback program was initially approved for a period of 36 months, but may be extended, terminated or amended by our board of directors.

At March 31, 2022, there remained approximately $28.0 million of capacity under the stock buyback program. During the first quarter of 2021, the Company repurchased a total of 37,568 shares of its common stock pursuant to its stock buyback program at an average price per share of $33.42, for an aggregate purchase price of $1.3 million. There have been no common stock repurchases since the first quarter of the 2021 year. Prior to 2021, the Company had cumulatively repurchased an aggregate 330,868 common stock shares for a total purchase price of $10.8 million under the stock buyback program. As of September 30, 2021, the Company's board of directors has approved approximately $28.0 million remaining to be purchased under the program.

Note 1211 - Commitments and Contingencies

Credit-Related Commitments

In the ~~normal~~ordinary course of business, the Company enters into financial instruments, such as commitments to extend credit and letters of credit, to meet the financing needs of its customers. Such instruments are not reflected in the accompanying consolidated financial statements until they are funded, although they expose the Company to varying degrees of credit risk and interest rate risk in much the same way as funded loans.

Commitments to extend credit include revolving commercial credit lines, ~~nonrevolving~~non-revolving loan commitments issued mainly to finance the acquisition and development or construction of real property or equipment, and credit card and personal credit lines. The availability of funds under commercial credit lines and loan commitments generally depends on whether the borrower continues to meet credit standards established in the underlying contract and has not violated other contractual conditions. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Credit card and personal credit lines are generally subject to cancellation if the borrower's credit quality deteriorates. A number of commercial and personal credit lines are used only partially or, in some cases, not at all before they expire, and the total commitment amounts do not necessarily represent future cash requirements of the Company.

A substantial majority of the letters of credit are standby agreements that obligate the Company to fulfill a customer's financial commitments to a ~~third party~~third-party if the customer is unable to perform. The Company issues standby letters of credit primarily to provide credit enhancement to its customers' other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services.

The contract amounts of these instruments reflect the Company's exposure to credit risk. The Company undertakes the same credit evaluation in making loan commitments and assuming conditional obligations as it does for on-balance sheet instruments and may require collateral or other credit support. ~~These off-balance sheet financial instruments are summarized below:~~

(Dollars in thousands) September 30, 2021 December 31, 2020
Commitments to extend credit $ 1,567,440 $ 1,341,501
Standby letters of credit 54,721 42,911

In addition to the above, the Company guarantees the credit card debt of certain customers to the merchant bank that issues the credit cards. These guarantees are in place for as long as the guaranteed credit card is open. At September 30, 2021, and December 31, 2020, these credit card guarantees totaled $225,000 and $200,000, respectively. This amount represents the maximum potential amount of future payments under the guarantee for which the Company would be responsible in the event of customer non-payment.

~~At September 30, 2021, the Company held 45unfunded letters of credit from the FHLB totaling $613.0 million with expiration dates ranging from October 21, 2021, to March 22, 2023. At December 31, 2020, the Company held 35unfunded letters of credit from the FHLB totaling $527.4 million with expiration dates ranging from January 20, 2021, to November 4, 2022.~~

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

The table below presents the Company's commitments to extend credit by commitment expiration date for the dates indicated:


(Dollars in thousands) March 31, 2022
	Less than One Year		One-Three Years		Three-Five Years		Greater than Five Years		Total
Commitments to extend credit(1)	$	643,210	$	662,394	$	373,426	$	52,013	$	1,731,043
Standby letters of credit	46,837		8,335		—		—		55,172
Total off-balance sheet commitments	$	690,047	$	670,729	$	373,426	$	52,013	$	1,786,215
December 31, 2021
Commitments to extend credit(1)	$	643,089	$	620,741	$	300,863	$	56,525	$	1,621,218
Standby letters of credit	42,516		6,633		—		—		49,149
Total off-balance sheet commitments	$	685,605	$	627,374	$	300,863	$	56,525	$	1,670,367

____________________________

(1)Includes $503.4 million and $513.0 million of unconditionally cancellable commitments at March 31, 2022 and December 31, 2021, respectively.

At March 31, 2022, the Company held 41unfunded letters of credit from the FHLB totaling $588.7 million, with expiration dates ranging from April 12, 2022, to May 25, 2023. At December 31, 2021, the Company held 43unfunded letters of credit from the FHLB totaling $599.3 million, with expiration dates ranging from January 20, 2022, to March 22, 2023.

Management establishes an asset-specific allowance for certain lending-related commitments and computes a formula-based allowance for performing consumer and commercial lending-related commitments. These are computed using a methodology similar to that used for the commercial loan portfolio, modified for expected maturities and probabilities of drawdown. The reserve for lending-related commitments was ~~$2.3~~$2.4 million and 2.3 million at ~~both September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, respectively, and is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets.

Loss Contingencies

From time to time, the Company is also party to various legal actions arising in the ordinary course of business. At this time, management does not expect that loss contingencies, if any, arising from any such proceedings, either individually or in the aggregate, would have a material adverse effect on the consolidated financial position or liquidity of the Company.

Note 12 - Business Combinations

On February 23, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BT Holdings, Inc., a Texas corporation (“BTH”), pursuant to which, upon the terms and subject to the conditions set forth in the Merger Agreement, BTH will merge with and into the Company (the “Merger”), with the Company as the surviving entity. In connection with the execution of the Merger Agreement, BTH’s wholly-owned subsidiary, BTH Bank, N.A. (“BTH Bank”), agreed to be merged with and into Origin’s wholly-owned subsidiary, Origin Bank, with Origin Bank as the surviving bank.

Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), Origin will issue an aggregate of 6,828,390 shares of its common stock, par value $5.00 per share (“Origin Common Stock”), in exchange for all shares of common stock, par value $1.00 per share, of BTH (“BTH Common Stock”) outstanding immediately prior to the Effective Time, subject to certain adjustments described below. The per share consideration payable in respect of each share of BTH Common Stock shall equal (a) 6,828,390 divided by (b) the total number of shares of BTH Common Stock outstanding immediately prior to the Effective Time (excluding any BTH Cancelled Shares (as defined in the Merger Agreement)) (such quotient, the “Exchange Ratio”). Based on the closing price of Origin Common Stock on February 23, 2022, of $44.52 per share, the aggregate consideration to be paid to holders of BTH Common Stock in connection with the Merger is valued at approximately $313.5 million.

The Exchange Ratio, and thus the number of shares of Origin Common Stock issued in the Merger, may be adjusted downward if the Adjusted Tangible Equity (as defined in the Merger Agreement) of BTH at the closing is less than $198.0 million, such that the aggregate merger consideration, based on the Average Closing Price, is reduced dollar for dollar by the amount of the deficiency. For purposes of the Merger Agreement, “Adjusted Tangible Equity” means the sum of

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ORIGIN BANCORP, INC.

Condensed Notes to Consolidated Financial Statements

~~Note 13 - Subsequent Events~~

~~On October 29, 2021,~~BTH’s equity capital stock, capital surplus, and retained earnings, including the ~~Company entered into~~impact of any accumulated other comprehensive income (loss) resulting from unrealized securities gains or losses (subject to certain limitations set forth in the Merger Agreement), less goodwill and intangible assets, on a ~~second amendment (the "Amendment") to that certain existing loan agreement (the "Loan Agreement") initially executed on October 5, 2018,~~consolidated basis with NexBank (the "Lender"). Pursuant to the Amendment, the loan shall not exceed an aggregate principal of $100 million, consisting of the $50 million existing loan amount and any one or more potential incremental revolving loan commitments that the Lender may make in its sole discretion, up to an aggregate principal of $50 million, upon the request of the Company. The loan is extended to the Company for working capital and general corporate purposes. The Lender has no obligation to agree to extend any incremental revolving loan or to increase the loan amount. The principal amounts borrowed under the Amendment will bear interest at a variable rate equal to the applicable Term SOFR for the then-current SOFR Interest Period plus 3.35%. The line of credit available to the Company under the Loan Agreement expires on October 28, 2022, or such date of the acceleration of the obligationBTH Bank, as determined pursuant to generally accepted accounting principles in the ~~Amendment, at which time all amounts borrowed, together with applicable interest, fees~~United States of America, and ~~other amounts owed by~~adjusted to reflect certain merger related expenses described in the ~~Company shall be due and payable. The Company may extend~~Merger Agreement. “Average Closing Price” means the ~~maturity date to a date that is three hundred and sixty-four (364)~~average closing price of Origin Common Stock during the 20 consecutive trading days ~~after the then-effective maturity date, no more than two times upon (i) delivery of a written request therefor to Lender at least thirty (30) days, but no more than (60) days,~~immediately prior to the ~~maturity date then in effect;~~fifth business day before closing.

At the Effective Time, each option to purchase shares of BTH Common Stock will accelerate and ~~(ii) receipt by the Lender of a certificate of the Company dated the date of such request.~~

~~On October 27, 2021, the Company executed~~vest and be converted into an ~~agreement with Lincoln Agency, LLC, the Lincoln Agency of La, Inc., and certain holders of equity interests in Lincoln Inc. (collectively the "Holders"),~~option to acquire the remaining 62% interest in Lincoln LLC. The Company currently owns a 38% equity interest in Lincoln LLC, and as such, the acquisition would bring the Company's total interest in Lincoln Agency to 100% ownership. The aggregate consideration payable for the purchase ~~will consist of: (i) cash consideration in the amount of $5.3 million and (ii)~~ a number of shares of ~~the Company's common stock~~Origin Common Stock equal to the product of (1) ~~$5.3 million, divided~~the total number of shares of BTH Common Stock subject to such option immediately prior to the Effective Time multiplied by (2) the ~~fair market value~~Exchange Ratio. Each such converted option will have an exercise price per share of Origin Common Stock equal to (a) the per share exercise price for the shares of BTH Common Stock subject to such option immediately prior to the Effective Time divided by (b) the Exchange Ratio.

The closing of the ~~Company's common stock, rounded~~Merger, which is expected to occur during the ~~nearest whole share. Additionally,~~second half of 2022, is subject to customary conditions, including receipt of regulatory approvals and approval by the ~~Holders will be entitled to receive additional cash consideration at certain future dates~~shareholders of each of the ~~amount of which will be determined by achieving target product line revenue amounts earned~~Company and BTH. Based on combined balances as of ~~certain future dates.~~December 31, 2021, Origin is expected to have approximately $9.9 billion in assets, $6.4 billion in loans and $8.3 billion in deposits following the close of the Merger.

~~The acquisition transaction is expected to close on or about December 31, 2021, and is not expected to be material to the financial statements.~~

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, references in this report to "we," "us," "our," "our company," "the Company" or "Origin" refer to Origin Bancorp, Inc., a Louisiana corporation, and its consolidated subsidiaries. All references to "Origin Bank" or "the Bank" refer to Origin Bank, our wholly-owned bank subsidiary.

The following discussion and analysis presents our financial condition and results of operations on a consolidated basis. However, we conduct all of our material business operations through our wholly-owned bank subsidiary, Origin Bank, and the discussion and analysis that follows primarily relates to activities conducted at the Bank level.

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related condensed notes contained in Item 1 of this report. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management's expectations. Factors that could cause such differences are discussed in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors" and in the section titled “Risk Factors” in our ~~2020~~2021 Form 10-K. We assume no obligation to update any of these forward-looking statements.

General

We are 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 4445 banking centers located from Dallas/Fort Worth and Houston, Texas, across North Louisiana and into Mississippi. As a financial holding company operating through one segment, we generate the majority of our revenue from interest earned on loans and investments, service charges and fees on deposit accounts.

We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest-earning assets and minimize expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans, securities and interest-bearing cash, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

Changes in market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as in the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and stockholders' equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income.

~~2021 Third~~2022 First Quarter Highlights

•Total ~~LHFI~~loans held for investment (“LHFI”) were $5.19 billion at ~~September 30, 2021, excluding PPP~~March 31, 2022, a decrease of $36.9 million compared to December 31, 2021. Excluding Paycheck Protection Program ("PPP") loans and mortgage warehouse lines of credit, LFHI were ~~$4.26~~$4.66 billion, reflecting ~~an increase of $162.7~~a $160.5 million or ~~4.0%,~~14.5% annualized increase, compared to ~~$4.09 billion at~~ December 31, ~~2020.~~

•~~Total securities grew $480.8 million, or 45.6%, to $1.54 billion at September 30, 2021, compared to $1.05 billion at December 31, 2020.~~2021.

•Total deposits grew ~~$407.5~~$196.5 million, or ~~7.1%,~~12.1% annualized, to ~~$6.16~~$6.77 billion at ~~September 30, 2021,~~March 31, 2022, compared to ~~$5.75~~$6.57 billion at December 31, ~~2020.~~2021. Noninterest-bearing deposits grew ~~$372.5~~$132.2 million, or ~~23.2%, to $1.98 billion,~~24.8% annualized, compared to ~~$1.61~~December 31, 2021, and represented 33.9% of total deposits at March 31, 2022.

•Average balances of total securities for the quarter ended March 31, 2022, were $1.66 billion, reflecting a $157.1 million, or 10.4%, increase compared to the quarter ended December 31, 2021. Total securities were $1.92 billion at March 31, 2022, compared to $1.53 billion at December 31, ~~2020.~~2021.

•Provision for credit losses was a net benefit of ~~$3.9 million~~$327,000 for the quarter ended ~~September 30, 2021,~~March 31, 2022, compared to a provision expense of ~~$13.6~~$1.4 million for the quarter ended ~~September 30, 2020.~~

•~~Cost of total deposits was 0.21% for the quarter ended September 30, 2021, compared to 0.42% for the quarter ended September 30, 2020.~~March 31, 2021.

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•Total nonperforming LHFI to total LHFI was 0.41% at March 31, 2022, compared to 0.48% at December 31, 2021, reflecting the lowest total nonperforming LHFI to total LHFI ratio for Origin as a public company. The allowance for loan credit losses to nonperforming LHFI was 293.53% at March 31, 2022, compared to 259.35% and 255.22% at December 31, 2021, and March 31, 2021, respectively.

•On February 23, 2022, the Company entered into an agreement and plan of merger with BT Holdings, Inc., (“BTH”), pursuant to which, upon the terms and subject to the conditions set forth in the merger agreement, BTH will merge with and into the Company, with Origin Bancorp, Inc. as the surviving entity in the merger. Subject to various terms and conditions, the merger is expected to close during the second half of 2022.

Comparison of Results of Operations for the Three Months Ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021

Net Interest Income and Net Interest Margin

Net interest income for the three months ended ~~September 30, 2021,~~March 31, 2022, was $52.5 million, ~~an increase~~a decrease of ~~$1.9~~$2.7 million ~~over~~compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The ~~improvement~~decrease was primarily due to a ~~$2.4~~$4.8 million decrease in interest ~~expense~~earned on ~~deposits coupled with~~mortgage warehouse lines of credit and a ~~$745,000~~$3.7 million decrease in interest income and fees earned on PPP loans, partially offset by a $2.9 million and a $1.5 million increase in interest income earned on total real estate-based loans and total investment securities, respectively.

The decreases in ~~taxable securities,~~interest income earned on mortgage warehouse lines of credit and PPP loans were caused primarily by decreases in average loan balances of $538.0 million and $495.2 million, respectively, as the continued normalization and higher interest rates had a negative impact on mortgage warehouse lines of credit and the outstanding balances of PPP loans continued to be forgiven by the Small Business Administration ("SBA").

The $2.9 million increase in interest income earned on total real estate loans was primarily driven by a $339.1 million increase in average real estate loan balances, partially offset by a ~~$968,000 decrease~~decline in ~~interest earned on~~yield to 4.04% during the ~~total loan portfolio and a $916,000~~three months ended March 31, 2022, from 4.11% during the three months ended March 31, 2021.

The $1.5 million increase in interest ~~paid~~income earned on ~~subordinated debentures,~~total investment securities was primarily due to a $657.3 million increase in the average balances of investments in taxable securities during the three months ended March 31, 2022, compared to the three months ended ~~September 30, 2020.~~

~~Deposit interest expense decreased to $3.3~~March 31, 2021. A $2.9 million during the three months ended September 30, 2021, compared to $5.7 million during the three months ended September 30, 2020, primarily due to the reduction in deposit interest rates between the comparable periods. The average rate paid on savings and interest-bearing transaction accounts was 0.25% for the current period, down from 0.39% for the three months ended September 30, 2020, accounting for $1.3 million of the decreaseincrease in interest expense from the three months ended September 30, 2020. The average rate paid on time deposits decreased to 0.67% for the three months ended September 30, 2021, down from 1.50% for the three months ended September 30, 2020, providing an additional decrease of $1.2 million in interest expense.

~~Interest~~ income earned on ~~investments in~~ taxable investment securities ~~increased $745,000 during the three months ended September 30, 2021, compared to the three months ended September 30, 2020. An increase of $1.6 million~~ was driven by an increase in the average balance of investments in taxable securities, which was offset by a ~~$824,000~~$1.1 million decrease due to ~~decrease~~a decline in the average yield earned on these securities. The average yield earned on investments in taxable securities was ~~1.60%~~1.47% for the current period, down from ~~1.99%~~1.78% for the three months ended ~~September 30, 2020.~~March 31, 2021. The primary driver of the increase in average balance of investment securities was higher liquidity ~~resulting from~~due to a ~~shift~~decline in ~~balance sheet composition as Paycheck Protection Program ("PPP")~~PPP loan balances ~~continued to decline~~ and lower mortgage warehouse loan volume ~~continued to normalize.~~driven by higher interest rates. This excess liquidity was the primary cause of the increase in average balances of lower-yielding investment securities and interest-bearing deposits due from banks.

~~The $968,000 decrease in~~Deposit interest ~~income earned on the total loan portfolio~~expense decreased to $2.9 million during the three months ended September 30, 2021, was primarily driven by decreases of $1.4 million and $1.1 million in interest income earned on commercial and industrial loans excluding PPP loans, and mortgage warehouse lines of credit, respectively, whenMarch 31, 2022, compared to ~~the three months ended September 30, 2020, partially offset by an increase of $1.3~~$3.8 million in interest income earned on total real estate loans. The decrease in interest income earned on commercial and industrial loans excluding PPP and mortgage warehouse loans was primarily driven by $2.1 million combined decrease attributable to lower balances in these loan types. The $1.3 million increase in interest income earned on total real estate loans was primarily due to a combined increase of $2.8 million in average balances, which was partially offset by a $1.6 million decrease in the average yield to 4.10% during the three months ended ~~September 30,~~March 31, 2021, ~~from 4.33% during~~primarily due to a decline in deposit interest rates between the comparable periods. The average rate paid on total interest-bearing deposits decreased to 0.26% for the three months ended ~~September 30, 2020.~~

~~Interest paid on subordinated debentures contributed $916,000 to~~March 31, 2022, down from 0.37% for the three months ended March 31, 2021, providing a decrease of $917,000 in ~~net~~ interest ~~income primarily~~expense due to rate alone, partially offset by the ~~completion of the issuance of $80 million~~increase in ~~aggregate principal amount of subordinated notes during the quarter ended December 31, 2020.~~average balances.

The fully tax-equivalent net interest margin was ~~3.02%~~2.86% for the three months ended ~~September 30, 2021,~~March 31, 2022, a 1636 basis point decrease from the three months ended ~~September 30, 2020.~~March 31, 2021. The yield earned on interest-earning assets for the three months ended ~~September 30, 2021,~~March 31, 2022, was ~~3.33%~~3.13%, a 3145 basis point decrease from ~~3.64%~~3.58% for the three months ended ~~September 30, 2020.~~March 31, 2021. This decrease was partially offset by a 22nine basis point decrease in interest rates paid on total interest-bearing liabilities. The rate paid on interest-bearing deposits for the three months ended September 30, 2021, was 0.30%, representing a decrease of 31 basis points compared to 0.61% for the three months ended September 30, 2020. The margin compression we experienced since the quarter ended ~~September 30, 2020,~~March 31, 2021, was ~~partially~~primarily caused ~~by decreasing loan yields driven~~ by declining short-term interest rates during ~~the end of 2020 and~~ early to ~~mid-2021, coupled with increasing liquidity as PPP loan balances paid down through the SBA's forgiveness process and mortgage warehouse loans continued to normalize.~~mid-2021.

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The following table presents average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.


		Three Months Ended September 30,													Three Months Ended March 31,
		2021						2020							2022						2021
(Dollars in thousands) Assets	(Dollars in thousands) Assets	Average Balance(1)		Income/Expense		Yield/Rate		Average Balance(1)		Income/Expense		Yield/Rate		(Dollars in thousands) Assets	Average Balance(1)		Income/Expense		Yield/Rate		Average Balance(1)		Income/Expense		Yield/Rate
Commercial real estate	Commercial real estate	$	1,505,731	$	15,485	4.08	%	$	1,344,853	$	14,515	4.29	%	Commercial real estate	$	1,718,259	$	17,039	4.02	%	$	1,421,819	$	14,593	4.16	%
Construction/land/land development	Construction/land/land development	527,881		5,458		4.10		575,080		6,394		4.42		Construction/land/land development	565,347		5,869		4.21		541,782		5,465		4.09
Residential real estate	Residential real estate	936,375		9,778		4.14		787,247		8,555		4.32		Residential real estate	907,320		8,912		3.98		888,208		8,848		4.04
PPP	PPP	279,578		3,695		5.24		550,377		3,430		2.48		PPP	70,442		2,403		13.83		565,653		6,138		4.40
Commercial and industrial excl. PPP	Commercial and industrial excl. PPP	1,212,797		11,860		3.88		1,295,105		13,306		4.09		Commercial and industrial excl. PPP	1,354,794		12,564		3.76		1,255,436		12,223		3.95

Mortgage warehouse lines of credit	Mortgage warehouse lines of credit	660,715		5,962		3.58		723,876		7,046		3.87		Mortgage warehouse lines of credit	423,795		3,897		3.73		961,808		8,707		3.67
Consumer	Consumer	16,222		238		5.81		18,209		285		6.23		Consumer	16,462		235		5.78		17,649		253		5.81
LHFI	LHFI	5,139,299		52,476		4.05		5,294,747		53,531		4.02		LHFI	5,056,419		50,919		4.08		5,652,355		56,227		4.03
Loans held for sale	Loans held for sale	72,739		706		3.85		88,811		619		2.77		Loans held for sale	32,710		264		3.27		87,177		583		2.71
Loans receivable	Loans receivable	5,212,038		53,182		4.05		5,383,558		54,150		4.00		Loans receivable	5,089,129		51,183		4.08		5,739,532		56,810		4.01
Investment securities-taxable	Investment securities-taxable	853,277		3,449		1.60		539,993		2,704		1.99		Investment securities-taxable	1,408,109		5,113		1.47		750,801		3,300		1.78
Investment securities-non-taxable	Investment securities-non-taxable	280,189		1,582		2.24		252,304		1,571		2.48		Investment securities-non-taxable	253,875		1,400		2.24		295,000		1,672		2.30
Non-marketable equity securities held in other financial institutions	Non-marketable equity securities held in other financial institutions	43,725		245		2.22		39,229		250		2.53		Non-marketable equity securities held in other financial institutions	45,205		215		1.93		60,326		216		1.45
Interest-bearing deposits in banks	Interest-bearing deposits in banks	610,863		293		0.19		204,288		125		0.24		Interest-bearing deposits in banks	746,057		372		0.20		196,616		129		0.27

Total interest-earning assets	Total interest-earning assets	7,000,092		58,751		3.33		6,419,372		58,800		3.64		Total interest-earning assets	7,542,375		58,283		3.13		7,042,275		62,127		3.58
Noninterest-earning assets(2)	Noninterest-earning assets(2)	464,721						327,213						Noninterest-earning assets(2)	502,871						340,220
Total assets	Total assets	$	7,464,813					$	6,746,585					Total assets	$	8,045,246					$	7,382,495

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity													Liabilities and Stockholders' Equity
Liabilities	Liabilities													Liabilities
Interest-bearing liabilities	Interest-bearing liabilities													Interest-bearing liabilities
Savings and interest-bearing transaction accounts	Savings and interest-bearing transaction accounts	$	3,657,625	$	2,274	0.25	%	$	3,011,389	$	2,935	0.39	%	Savings and interest-bearing transaction accounts	$	3,975,395	$	2,177	0.22	%	$	3,513,281	$	2,256	0.26	%
Time deposits	Time deposits	582,384		981		0.67		730,705		2,763		1.50		Time deposits	535,044		709		0.54		656,255		1,533		0.95
Total interest-bearing deposits	Total interest-bearing deposits	4,240,009		3,255		0.30		3,742,094		5,698		0.61		Total interest-bearing deposits	4,510,439		2,886		0.26		4,169,536		3,789		0.37

FHLB advances & other borrowings	FHLB advances & other borrowings	263,956		1,118		1.68		543,195		1,564		1.15		FHLB advances & other borrowings	265,472		1,094		1.67		557,798		1,269		0.92

Subordinated debentures		157,321		1,837		4.63		78,585		921		4.66
Subordinated indebtedness														Subordinated indebtedness	157,455		1,801		4.64		157,221		1,830		4.72
Total interest-bearing liabilities	Total interest-bearing liabilities	4,661,286		6,210		0.53		4,363,874		8,183		0.75		Total interest-bearing liabilities	4,933,366		5,781		0.48		4,884,555		6,888		0.57
Noninterest-bearing liabilities	Noninterest-bearing liabilities													Noninterest-bearing liabilities
Noninterest-bearing deposits	Noninterest-bearing deposits	1,965,843						1,633,510						Noninterest-bearing deposits	2,218,092						1,700,523
Other liabilities(2)	Other liabilities(2)	134,079						119,668						Other liabilities(2)	171,284						139,554
Total liabilities	Total liabilities	6,761,208						6,117,052						Total liabilities	7,322,742						6,724,632
Stockholders' Equity	Stockholders' Equity	703,605						629,533						Stockholders' Equity	722,504						657,863
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	7,464,813					$	6,746,585					Total liabilities and stockholders' equity	$	8,045,246					$	7,382,495
Net interest spread	Net interest spread					2.80	%					2.89	%	Net interest spread					2.65	%					3.01	%
Net interest income and margin	Net interest income and margin			$	52,541	2.98				$	50,617	3.14		Net interest income and margin			$	52,502	2.82				$	55,239	3.18
Net interest income and margin - (tax equivalent)(3)	Net interest income and margin - (tax equivalent)(3)			$	53,267	3.02				$	51,340	3.18		Net interest income and margin - (tax equivalent)(3)			$	53,178	2.86				$	55,988	3.22

____________________________

(1)Nonaccrual loans are included in their respective loan category for the purpose of calculating the yield earned. All average balances are daily average balances.

(2)Includes Government National Mortgage Association ("GNMA") repurchase average balances of ~~$51.3~~$43.8 million, ~~$31.7~~$59.0 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 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. For more information on the GNMA repurchase option, see Note 6 - Mortgage Banking in the condensed notes to our consolidated financial statements.

(3)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 and income from tax-exempt investments and tax credits were computed using a federal income tax rate of 21%.

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Rate/Volume Analysis

The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and those due to changes in interest rates. The change in interest attributable to rate changes has been determined by applying the change in rate between periods to average balances outstanding in the earlier period. The change in interest due to volume has been determined by applying the rate from the earlier period to the change in average balances outstanding between periods. For purposes of this table, changes attributable to both rate and volume that cannot be segregated, including the difference in day count, have been allocated to rate.


		Three Months Ended September 30, 2021 vs. Three Months Ended September 30, 2020							Three Months Ended March 31, 2022 vs. Three Months Ended March 31, 2021
(Dollars in thousands) Interest-earning assets	(Dollars in thousands) Interest-earning assets	Increase (Decrease) due to Change in						(Dollars in thousands) Interest-earning assets	Increase (Decrease) Due To Change In
Loans:	Loans:	Volume		Yield/Rate		Total Change		Loans:	Volume		Yield/Rate		Total Change
Commercial real estate	Commercial real estate	$	1,736	$	(766)	$	970	Commercial real estate	$	3,043	$	(597)	$	2,446
Construction/land/land development	Construction/land/land development	(525)		(411)		(936)		Construction/land/land development	238		166		404
Residential real estate	Residential real estate	1,621		(398)		1,223		Residential real estate	190		(126)		64
PPP	PPP	(1,688)		1,953		265		PPP	(5,373)		1,638		(3,735)
Commercial and industrial excl. PPP	Commercial and industrial excl. PPP	(1,514)		68		(1,446)		Commercial and industrial excl. PPP	1,382		(1,041)		341

Mortgage warehouse lines of credit	Mortgage warehouse lines of credit	(615)		(469)		(1,084)		Mortgage warehouse lines of credit	(4,871)		61		(4,810)
Consumer	Consumer	(31)		(16)		(47)		Consumer	(17)		(1)		(18)
Loans held for sale	Loans held for sale	(112)		199		87		Loans held for sale	(364)		45		(319)
Loans receivable	Loans receivable	(1,128)		160		(968)		Loans receivable	(5,772)		145		(5,627)
Investment securities-taxable	Investment securities-taxable	1,569		(824)		745		Investment securities-taxable	2,889		(1,076)		1,813
Investment securities-non-taxable	Investment securities-non-taxable	174		(163)		11		Investment securities-non-taxable	(233)		(39)		(272)
Non-marketable equity securities held in other financial institutions	Non-marketable equity securities held in other financial institutions	29		(34)		(5)		Non-marketable equity securities held in other financial institutions	(54)		53		(1)
Interest-bearing deposits in banks	Interest-bearing deposits in banks	250		(82)		168		Interest-bearing deposits in banks	360		(117)		243

Total interest-earning assets	Total interest-earning assets	894		(943)		(49)		Total interest-earning assets	(2,810)		(1,034)		(3,844)
Interest-bearing liabilities	Interest-bearing liabilities							Interest-bearing liabilities
Savings and interest-bearing transaction accounts	Savings and interest-bearing transaction accounts	630		(1,291)		(661)		Savings and interest-bearing transaction accounts	297		(376)		(79)
Time deposits	Time deposits	(561)		(1,221)		(1,782)		Time deposits	(283)		(541)		(824)

FHLB advances & other borrowings	FHLB advances & other borrowings	(804)		358		(446)		FHLB advances & other borrowings	(665)		490		(175)

Subordinated debentures		923		(7)		916
Subordinated indebtedness								Subordinated indebtedness	3		(32)		(29)
Total interest-bearing liabilities	Total interest-bearing liabilities	188		(2,161)		(1,973)		Total interest-bearing liabilities	(648)		(459)		(1,107)
Net interest income	Net interest income	$	706	$	1,218	$	1,924	Net interest income	$	(2,162)	$	(575)	$	(2,737)

Provision for Credit Losses

The provision for credit losses, which includes the provisions for loan losses, off-balance sheet commitments and security credit losses, is based on management's assessment of the adequacy of our allowance for credit losses ("ACL") for loans, securities and our reserve for off-balance-sheet lending commitments. Factors impacting the provision include inherent risk characteristics in our loan portfolio, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of the change in collateral values, reasonable and supportable forecasts, and the funding probability on unfunded lending commitments. The provision for credit losses is charged against earnings in order to maintain our ACL, which reflects management's best estimate of life of loan credit losses inherent in our loan portfolio at the balance sheet date, and our reserve for off-balance-sheet lending commitments, which reflects management's best estimate of losses inherent in our legally binding lending-related commitments. The allowance is increased by the provision for loan credit losses and decreased by charge-offs, net of recoveries.

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We recorded a provision for credit loss benefit of ~~$3.9 million~~$327,000 for the quarter ended ~~September 30, 2021,~~March 31, 2022, a decrease of ~~$17.6~~$1.7 million from provision expense of ~~$13.6~~$1.4 million for the three months ended ~~September 30, 2020.~~March 31, 2021. The release of credit loss provision reflects ~~the continued improvement in forecasted economic conditions at September 30, 2021, and improvements in most~~improved credit loss metrics ~~during the period.~~with no material adjustments to model assumptions based upon economic forecasts. As it pertains to economic forecasts, uncertainty remains due to risks related to rising inflation, market interest rate increases, labor pressures, continued global supply-chain disruptions, as well as increased geopolitical risks. Net charge-offs were ~~$2.9~~$1.8 million during the quarter ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$1.8~~$2.9 million during the three months ended ~~September 30, 2020,~~March 31, 2021, while the allowance for loan credit losses to nonperforming LHFI was ~~284.86%~~293.53% at ~~September 30, 2021,~~March 31, 2022, compared to ~~270.09%~~255.22% at ~~September 30, 2020.~~March 31, 2021.

On January 1, 2020, we adopted CECL and recognized a one-time cumulative-effect adjustment to the allowance for loan credit losses of $1.2 million. CECL requires recording life-of-loan projected losses in the loan portfolio based on reasonable and supportable forecasts and related loan portfolio credit performance. At adoption on January 1, 2020, the economic effects resulting from the COVID-19 pandemic were unknown. As such, the economic scenario used to develop our estimate of CECL as of the adoption date assumed a continued moderate U.S. economic expansion compared to 2019. The prior accounting standard recorded reserves based on probable losses at the balance sheet date, generally resulting in lower reserve levels at the outset of an economic downturn.

Pursuant to rules of the federal banking agencies, we have elected to use a two-year delay of CECL’s impact on our regulatory capital (from January 1, 2020 through December 31, 2021) followed by a three-year transition period of CECL’s initial impact on our regulatory capital (from January 1, 2022 through December 31, 2024).

While we continue to gather the latest information available, and as more information becomes available concerning the economic impact and duration of the COVID-19 pandemic, we will update our forecast and related qualitative factors, which could lead to further changes to our allowance for loan credit losses. Even as economic forecasts have improved, uncertainty still remains for the remainder of the 2021 year 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.

~~Table of Contents~~

Noninterest Income

Our primary sources of recurring noninterest income are service charges on deposit accounts, mortgage banking revenue, insurance commission and fee income, and other fee income.

The table below presents the various components of and changes in our noninterest income for the periods indicated.

(Dollars in thousands) Three Months Ended September 30,
Noninterest income: 2021 2020 $ Change % Change
Service charges and fees $ 3,973 $ 3,268 $ 705 21.6 %
Mortgage banking revenue 2,728 9,523 (6,795) (71.4)
Insurance commission and fee income 3,451 3,218 233 7.2
Gains on sales of securities, net — 301 (301) (100.0)
Loss on sales and disposals of other assets, net (8) (247) 239 (96.8)
Limited partnership investment income 3,078 130 2,948 N/M
Swap fee income 727 110 617 N/M
Change in fair value of equity investments 19 — 19 N/M
Other fee income 783 576 207 35.9
Other income 1,172 1,172 — —
Total noninterest income $ 15,923 $ 18,051 $ (2,128) (11.8)

~~____________________________~~


(Dollars in thousands)	Three Months Ended March 31,
Noninterest income:	2022		2021		$ Change		% Change
Service charges and fees	$	3,998	$	3,343	$	655	19.6	%
Mortgage banking revenue	4,096		4,577		(481)		(10.5)
Insurance commission and fee income	6,456		3,771		2,685		71.2
Gains on sales of securities, net	—		1,668		(1,668)		(100.0)
Loss on sales and disposals of other assets, net	—		(38)		38		100.0
Limited partnership investment (loss) income	(363)		1,772		(2,135)		(120.5)
Swap fee income	139		348		(209)		(60.1)

Other fee income	598		771		(173)		(22.4)
Other income	982		919		63		6.9
Total noninterest income	$	15,906	$	17,131	$	(1,225)	(7.2)

~~N/M = Not meaningful~~.

Noninterest income for the three months ended ~~September 30, 2021,~~March 31, 2022, decreased by ~~$2.1~~$1.2 million, or ~~11.8%~~7.2%, to $15.9 million, compared to ~~$18.1~~$17.1 million for the three months ended ~~September 30, 2020.~~March 31, 2021. The decrease was largely driven by a ~~$6.8~~$2.1 million and $1.7 million decrease in ~~mortgage banking revenue,~~limited partnership investment income and gain on sales of securities, net, respectively, which was partially offset by ~~increases~~an increase of ~~$2.9~~$2.7 million ~~$705,000~~in insurance commission and ~~$617,000~~fee income.

Limited partnership investment income. The $2.1 million decrease in limited partnership investment income ~~service charges and fees income and swap fee income, respectively.~~

~~Service charges and fees. The $705,000 increase in service charges and fees income was primarily driven by an increase of $278,000 in debit interchange fees due to an increase in debit card transactions by customers~~ during the three months ended ~~September 30, 2021,~~March 31, 2022, as compared to the three months ended ~~September 30, 2020. Nonsufficient~~March 31, 2021, was primarily due to a decrease in the fair value of investments in one of the limited partnership funds ~~and overdraft fee income and account analysis income also increased by $186,000 and $149,000, respectively, for~~during the current quarter.

Gain on sale of securities, net. The $1.7 million decrease in gain on sale of securities, net during the three months ended ~~September 30, 2021, compared to three months ended September 30, 2020.~~

~~Mortgage banking revenue.~~ ~~The $6.8 million decrease in mortgage banking revenue~~March 31, 2022, as compared to the three months ended ~~September 30, 2020,~~March 31, 2021, was ~~primarily due to decreases~~the result of the movement out of positions in ~~production and~~lower yielding securities during the 2021 quarter. We used the funds generated from the sale ~~volume, and gain on sale margin, as~~of the ~~mortgage market continued to stabilize after an unusually high mortgage volume and revenue year in 2020 for the industry. Comparing~~securities during the three months ended ~~September 30,~~March 31, 2021, to prepay relatively high-cost FHLB advances.

Insurance commission and fee income. The $2.7 million increase in the insurance commission and fee income during the three months ended March 31, 2022, compared to the three months ended September 30, 2020, sales volume decreased $48.0 million, or 27.0%, while gain on sale margin decreased 42.0%, resulting in a decrease in gain on sale of $4.3 million or 58.4%. The decrease in volume also contributed to the $1.6 million decrease in pipeline and held for sale fair value.

~~Limited partnership investment income.~~ ~~The $2.9 million increase in the limited partnership investment income during the quarter ended September 30,~~March 31, 2021, ~~compared to the quarter ended September 30, 2020~~ was primarily due to ~~valuation increases as a result of investment performance in two funds.~~the insurance acquisitions that occurred on December 31, 2021. The acquisition contributed $1.5 million to insurance commissions and fee income during the current quarter.

~~Swap fee income. The $617,000 increase in swap fee income was primarily driven by a $727,000 swap commission fee earned on one large swap transaction during the quarter ended September 30, 2021.~~

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Noninterest Expense

The following table presents the significant components of noninterest expense for the periods indicated:


(Dollars in thousands)	(Dollars in thousands)	Three Months Ended September 30,								(Dollars in thousands)	Three Months Ended March 31,
Noninterest expense:	Noninterest expense:	2021		2020		$ Change		% Change		Noninterest expense:	2022		2021		$ Change		% Change
Salaries and employee benefits	Salaries and employee benefits	$	23,629	$	22,597	$	1,032	4.6	%	Salaries and employee benefits	$	26,488	$	22,325	$	4,163	18.6	%
Occupancy and equipment, net	Occupancy and equipment, net	4,353		4,263		90		2.1		Occupancy and equipment, net	4,427		4,339		88		2.0
Data processing	Data processing	2,329		2,065		264		12.8		Data processing	2,486		2,173		313		14.4
Electronic banking	Electronic banking	997		954		43		4.5		Electronic banking	917		961		(44)		(4.6)
Communications	Communications	359		422		(63)		(14.9)		Communications	281		415		(134)		(32.3)
Advertising and marketing	Advertising and marketing	863		1,281		(418)		(32.6)		Advertising and marketing	871		680		191		28.1
Professional services	Professional services	912		785		127		16.2		Professional services	1,631		973		658		67.6
Regulatory assessments	Regulatory assessments	664		1,310		(646)		(49.3)		Regulatory assessments	626		1,170		(544)		(46.5)
Loan-related expenses	Loan-related expenses	1,949		1,809		140		7.7		Loan-related expenses	1,305		1,705		(400)		(23.5)
Office and operations	Office and operations	1,598		1,367		231		16.9		Office and operations	1,560		1,454		106		7.3
Intangible asset amortization	Intangible asset amortization	194		237		(43)		(18.1)		Intangible asset amortization	537		234		303		129.5
Franchise tax expense	Franchise tax expense	598		511		87		17.0		Franchise tax expense	770		619		151		24.4
Other expenses	Other expenses	720		1,133		(413)		(36.5)		Other expenses	875		2,388		(1,513)		(63.4)
Total noninterest expense	Total noninterest expense	$	39,165	$	38,734	$	431	1.1		Total noninterest expense	$	42,774	$	39,436	$	3,338	8.5

Noninterest expense for the three months ended ~~September 30, 2021,~~March 31, 2022, increased by ~~$431,000,~~$3.3 million, or ~~1.1%~~8.5%, to ~~$39.2~~$42.8 million, compared to the noninterest expense for the three months ended ~~September 30, 2020,~~March 31, 2021, primarily due to increases of ~~$1.0~~$4.2 million ~~$264,000~~ and ~~$231,000~~$658,000 in salaries and employee benefits expenses ~~data processing expenses~~ and ~~office and operations expenses,~~professional services expense, respectively. The increases were partially offset by decreases of ~~$646,000, $418,000~~$1.5 million and ~~$413,000~~$544,000 in other noninterest expenses and regulatory assessments expense, ~~advertising and marketing expenses, and other noninterest expenses,~~ respectively.

Salaries and employee benefits. The ~~$1.0~~$4.2 million increase in salaries and employee benefits expenses was primarily due to ~~increases~~the insurance agency acquisitions that occurred on December 31, 2021, which accounted for $1.2 million of ~~$636,000~~the increase. Additionally, bank salaries and ~~$475,000, in overall salaries~~benefits were higher due to annual raises and a cost of living adjustment that occurred during the ~~hiring of 18 full-time~~quarter ended March 31, 2022, and an increase in bank full time equivalent employees ~~during the intervening period in an effort~~ to ~~increase future loan growth, and medical self-insurance costs driven by higher medical claims, respectively.~~690 at March 31, 2022, from 666 at March 31, 2021.

~~Data processing.~~Other expenses. The ~~$264,000 increase~~$1.5 million decrease in ~~data processing~~other noninterest expense was primarily due to ~~increases~~$1.6 million in ~~subscription fees due~~long-term FHLB advance prepayment penalties during the three months ended March 31, 2021, related to the ~~implementation~~prepayment of ~~new software~~relatively high FHLB advances, with no similar transaction occurring during the ~~intervening period.~~current quarter.

~~Advertising and marketing.~~Professional services. The ~~$418,000 decrease~~$658,000 increase in ~~advertising and marketing~~professional service expense was primarily due to ~~$550,000~~$548,000 in ~~donations and contributions made to various institutions as part of our initiative to invest a portion of our PPP loan income within the communities~~transaction costs in ~~which we operate during the three months ended September 30, 2020, with no comparable donations and contributions made during~~ the current ~~quarter.~~quarter directly related to the pending merger with BTH Holdings.

Regulatory assessments. The ~~$646,000~~$544,000 decrease in regulatory assessments expense was primarily due to ~~higher recorded expense during three months ended September 30, 2020 driven by~~ a ~~significant increase~~reduction in ~~assets since December 31, 2019. Total assets at September 30, 2021, declined when compared to~~ the ~~asset balance at December 31, 2020, causing a lower comparative regulatory~~Federal Deposit Insurance Corporation ("FDIC") assessment ~~expense.~~

~~Office and operations.~~ The $231,000 increase in office and operations expense was primarily due to increases in travel and entertainment spending compared to the three months ended September 30, 2020 due to COVID-19 pandemic-related restrictions. Also, the Company incurred a $93,000 utilization fee for a line of credit with the FHLB for the quarter ended September 30, 2021, with no comparable fee incurredmultiplier during the three months ended ~~September 30, 2020.~~March 31, 2022.

~~Other expenses.~~ The $413,000 decrease in other noninterest expense was primarily due to a $475,000 reserve for a judgment recorded during the three months ended September 30, 2020, with no comparable reserve recorded during the current quarter.

~~Table of Contents~~

Income Tax Expense

For the three months ended ~~September 30, 2021,~~March 31, 2022, we recognized income tax expense of ~~$6.2~~$5.3 million, compared to ~~$3.2~~$6.0 million for the three months ended ~~September 30, 2020. Our~~March 31, 2021. The effective tax rate for the quarter ended March 31, 2022, was ~~relatively stable~~negatively impacted by the transaction costs associated with the BTH merger. The effective tax rate for the three months ended ~~September 30, 2021, when~~March 31, 2022, was 20.4%, compared to ~~the three months ended September 30, 2020, reflecting a rate of 18.8% for the current quarter compared to 19.7%~~19.1% for the three months ended ~~September 30, 2020.~~March 31, 2021.

Our quarterly provision for income taxes has historically been calculated using the estimated annual effective tax rate ("~~AETR"~~EATR") method, which applies an estimated annual effective tax rate to pre-tax income or loss. However, we recorded our interim income tax provision using the actual effective tax rate as of ~~September 30,~~January 1, 2020, and throughout fiscal years 2020 and 2021, ~~and September 30, 2020,~~ as allowed under ASC 740-270, Accounting for Income Taxes - Interim Reporting. ~~We utilized~~As of January 1, 2022, we reverted back to using the ~~actual effective rate to record tax expense, rather than the AETR~~EATR method ~~as a reliable estimate~~for calculating and recording our interim provision for income taxes.

Table of ~~ordinary income. We determined current and deferred income tax expense as if the interim period were an annual period.~~Contents

Our effective income tax rates have differed from the applicable U.S. statutory rates of 21% at ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ due to the effect of tax-exempt income from securities, low-income housing and qualified school construction bond tax credits, tax-exempt income from life insurance policies and income tax effects associated with stock-based ~~compensation. Because of these items, we expect our effective income tax rate to continue to remain below~~compensation, partially offset by merger-related costs in the ~~applicable U.S. statutory rate.~~current quarter. These tax-exempt items can have a larger than proportional effect on the effective income tax rate as net income decreases. Any increases to the statutory tax rate would increase income taxes in the future.

~~Comparison of Results of Operations for the Nine Months Ended September 30, 2021 and2020~~

~~Net Interest Income and Net Interest Margin~~

Net interest income for the nine months ended September 30, 2021, was $162.1 million, an increase of $22.4 million over the nine months ended September 30, 2020. The increase was primarily due to a $12.1 million reduction in total deposit interest expenses, coupled with increases of $8.9 million and $8.4 million in interest income from PPP loans and mortgage warehouse lines of credit, respectively. These increases were offset by a decrease of $7.1 million in interest earned on commercial and industrial, excluding PPP loans, coupled with an increase of $3.1 million of interest expense on subordinated debentures, during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. Total real estate-based loans provided a net increase of $459,000 in net interest income.

Deposit interest expense decreased to $10.5 million during the nine months ended September 30, 2021, compared to $22.6 million during the nine months ended September 30, 2020, primarily due to a reduction in deposit rates during the intervening 12 month period. The average rate paid on savings and interest-bearing transaction accounts was 0.25% for the nine months ended September 30, 2021, down from 0.63% for the nine months ended September 30, 2020, accounting for $10.4 million of the decrease in interest expense from the nine months ended September 30, 2020. The average rate on time deposits decreased to 0.80% for the nine months ended September 30, 2021, down from 1.75% for the nine months ended September 30, 2020, providing an additional decrease of $4.4 million in interest expense. These two rate-driven interest expense declines were offset by a $4.5 million increase in interest expense due to an increase in the average balance of savings and interest-bearing transaction accounts when comparing the nine months ended September 30, 2021, to the nine months ended September 30, 2020.

PPP loans, which were funded beginning in the second quarter of the 2020 year as part of the CARES Act, contributed a $6.6 million increase in interest income due to an increase in yield, primarily as a result of the SBA forgiveness process and the recognition of deferred loan fees as the loans were paid down, and a $2.3 million increase due to an increase in the average loan balances for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. Interest income earned on mortgage warehouse lines of credit increased by $8.4 million during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, primarily due to higher mortgage activity driven by the low-interest rate environment, coupled with additional mortgage warehouse clients being onboarded and funding loans during 2020. Interest income earned on commercial and industrial loans, excluding PPP loans, decreased by $7.1 million during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, primarily due to the impact of lower interest yields which resulted in a $5.0 million decrease. The $3.1 million increase in interest paid on subordinated debentures was due the completion of the issuance of $80 million in aggregate principal amount of subordinated notes during the quarter ended December 31, 2020.

~~Table of Contents~~

The fully tax-equivalent net interest margin was 3.12% for the nine months ended September 30, 2021, a ten basis point decrease from the nine months ended September 30, 2020. The yield earned on interest-earning assets for the nine months ended September 30, 2021, was 3.45%, a 40 basis point decrease from 3.85% for the nine months ended September 30, 2020. This decrease was partially offset by the decrease in interest rates paid on interest-bearing deposits. The rate paid on total interest-bearing liabilities for the nine months ended September 30, 2021, was 0.54%, representing a decrease of 44 basis points compared to 0.98% for the nine months ended September 30, 2020. The margin compression we experienced since the nine months ended September 30, 2020, was primarily caused by decreasing loan yields driven by declining short-term interest rates over the last several quarters.

The results for the nine months ended September 30, 2021, have improved from the results experienced during the nine months ended September 30, 2020 due primarily to the decrease in the cost of interest-bearing deposits and the acceleration of PPP fees accreted into earnings. However, as a result of the uncertainty surrounding the economic outlook and concern that there may be a resurgence of COVID-19, the current low-interest rate environment may continue to put pressure on our net interest margin due to both maturing assets and floating-rate assets potentially repricing lower with little opportunity to offset the reduction with lower funding costs.

~~Table of Contents~~

The following table presents average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the nine months ended September 30, 2021 and 2020.

Nine Months Ended September 30,
2021 2020
(Dollars in thousands)
Assets
Average Balance(1)
Income/Expense Yield/Rate
Average Balance(1)
Income/Expense Yield/Rate
Commercial real estate $ 1,464,758 $ 45,146 4.12 % $ 1,309,198 $ 44,452 4.54 %
Construction/land/land development 528,768 16,314 4.12 560,848 19,613 4.67
Residential real estate 918,148 28,140 4.10 741,814 25,076 4.52
PPP 454,546 15,386 4.53 334,144 6,482 2.59
Commercial and industrial excl. PPP 1,236,005 35,826 3.88 1,348,738 42,916 4.25
Mortgage warehouse lines of credit 812,816 22,085 3.63 466,425 13,733 3.93
Consumer 16,829 732 5.82 18,751 913 6.50
LHFI 5,431,870 163,629 4.03 4,779,918 153,185 4.28
Loans held for sale 76,185 1,892 3.32 71,427 1,736 3.25
Loans receivable 5,508,055 165,521 4.02 4,851,345 154,921 4.27
Investment securities-taxable 784,914 9,864 1.68 494,606 8,148 2.20
Investment securities-non-taxable 285,177 4,844 2.27 188,210 3,720 2.64
Non-marketable equity securities held in other financial institutions 50,256 708 1.88 43,795 856 2.61
Interest-bearing deposits in banks 409,938 589 0.19 289,736 1,635 0.75
Total interest-earning assets 7,038,340 181,526 3.45 5,867,692 169,280 3.85
Noninterest-earning assets(2)
402,715 332,581
Total assets $ 7,441,055 $ 6,200,273
Liabilities and Stockholders' Equity
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts $ 3,649,007 $ 6,722 0.25 % $ 2,697,769 $ 12,685 0.63 %
Time deposits 623,161 3,739 0.80 754,652 9,883 1.75
Total interest-bearing deposits 4,272,168 10,461 0.33 3,452,421 22,568 0.87
FHLB advances & other borrowings 360,443 3,493 1.30 509,763 4,556 1.19
Subordinated debentures 157,273 5,500 4.68 69,516 2,439 4.69
Total interest-bearing liabilities 4,789,884 19,454 0.54 4,031,700 29,563 0.98
Noninterest-bearing liabilities
Noninterest-bearing deposits 1,835,702 1,437,433
Other liabilities(2)
137,246 111,573
Total liabilities 6,762,832 5,580,706
Stockholders' Equity 678,223 619,567
Total liabilities and stockholders' equity $ 7,441,055 $ 6,200,273
Net interest spread 2.91 % 2.87 %
Net interest income and margin $ 162,072 3.08 $ 139,717 3.18
Net interest income and margin - (tax equivalent)(3)
$ 164,274 3.12 $ 141,619 3.22

~~____________________________~~

~~(1)Nonaccrual loans are included in their respective loan category for the purpose of calculating the yield earned. All average balances are daily average balances.~~

~~(2)~~Includes GNMA repurchase average balances of $56.9 million, $29.5 million for the nine months ended September 30, 2021 and 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. For more information on the GNMA repurchase option, see ~~Note 6 - Mortgage Banking~~ ~~in the notes to our consolidated financial statements.~~

~~(3)~~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 and income from tax-exempt investments and tax credits were computed using a Federal income tax rate of 21%.

~~Table of Contents~~

~~Rate/Volume Analysis~~

The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and those due to changes in interest rates. The change in interest attributable to rate changes has been determined by applying the change in rate between periods to average balances outstanding in the earlier period. The change in interest due to volume has been determined by applying the rate from the earlier period to the change in average balances outstanding between periods. For purposes of the below table, changes attributable to both rate and volume that cannot be segregated, including the difference in day count, have been allocated to rate.

Nine Months Ended September 30, 2021 vs.
Nine Months Ended September 30, 2020
(Dollars in thousands)
Interest-earning assets Increase (Decrease)
due to Change in
Loans: Volume Yield/Rate Total Change
Commercial real estate $ 5,282 $ (4,588) $ 694
Construction/land/land development (1,122) (2,177) (3,299)
Residential real estate 5,961 (2,897) 3,064
PPP 2,336 6,568 8,904
Commercial and industrial excl. PPP (2,111) (4,979) (7,090)
Mortgage warehouse lines of credit 10,199 (1,847) 8,352
Consumer (94) (87) (181)
Loans held for sale 116 40 156
Loans receivable 20,567 (9,967) 10,600
Investment securities-taxable 4,782 (3,066) 1,716
Investment securities-non-taxable 1,917 (793) 1,124
Non-marketable equity securities held in other financial institutions 126 (274) (148)
Interest-bearing deposits in banks 678 (1,724) (1,046)
Total interest-earning assets 28,070 (15,824) 12,246
Interest-bearing liabilities
Savings and interest-bearing transaction accounts 4,473 (10,436) (5,963)
Time deposits (1,722) (4,422) (6,144)
FHLB advances & other borrowings (1,335) 272 (1,063)
Subordinated debentures 3,079 (18) 3,061
Total interest-bearing liabilities 4,495 (14,604) (10,109)
Net interest income $ 23,575 $ (1,220) $ 22,355

~~Provision for Credit Losses~~

We recorded a provision for credit loss benefit of $8.1 million for the nine months ended September 30, 2021, a $61.7 million decrease from a provision expense of $53.6 million for the nine months ended September 30, 2020. The decrease in provision expense for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, reflects an improvement in forecasted economic conditions compared to worsening forecasted economic conditions at September 30, 2020. Net charge-offs were $8.6 million during the nine months ended September 30, 2021, compared to net charge-offs of $9.4 million during the nine months ended September 30, 2020. Our allowance for loan credit losses was 1.35% of total LHFI at September 30, 2021, compared to 1.45% at September 30, 2020. The allowance for loan credit losses as a percentage of nonperforming LHFI was 284.86% at September 30, 2021, compared to 270.09% at September 30, 2020.

~~Table of Contents~~

~~Noninterest Income~~

~~Our primary sources of recurring noninterest income are service charges on deposit accounts, mortgage banking revenue, insurance commission and fee income, and other fee income.~~

~~The table below presents the various components of and changes in our noninterest income for the periods indicated.~~

(Dollars in thousands) Nine Months Ended September 30,
Noninterest income: 2021 2020 $ Change % Change
Service charges and fees $ 11,055 $ 9,578 $ 1,477 15.4 %
Mortgage banking revenue 10,070 23,009 (12,939) (56.2)
Insurance commission and fee income 10,272 10,014 258 2.6
Gain on sales of securities, net 1,673 355 1,318 N/M
Loss on sales and disposals of other assets, net (88) (1,180) 1,092 (92.5)
Limited partnership investment income (loss) 5,651 (290) 5,941 N/M
Swap fee income 1,099 2,313 (1,214) (52.5)
Change in fair value of equity investments 19 — 19 N/M
Other fee income 2,177 1,649 528 32.0
Other income 3,564 3,823 (259) (6.8)
Total noninterest income $ 45,492 $ 49,271 $ (3,779) (7.7)

~~____________________________~~

~~N/M = Not meaningful~~.

Noninterest income for the nine months ended September 30, 2021, decreased by $3.8 million, or 7.7%, to $45.5 million, compared to $49.3 million for the nine months ended September 30, 2020. The decrease in noninterest income during the nine months ended September 30, 2021, was largely driven by decreases of $12.9 million and $1.2 million in mortgage banking revenue and swap fee income, respectively. The decreases were offset by increases of $5.9 million, $1.5 million and $1.3 million in limited partnership investment income, service charges and fees income, and gain on sales of securities, net, respectively, coupled with a decrease of $1.1 million in loss on sales and disposals of other assets, net.

~~Service charges and fees~~. The $1.5 million increase in service charges and fees income was primarily driven by an increase of $1.1 million in debit interchange fees due to an increase in debit card transactions by customers during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020.

~~Mortgage banking revenue.~~ The $12.9 million decrease in mortgage banking revenue compared to the nine months ended September 30, 2020, was primarily due to decreases of $13.5 million and $9.2 million in the mortgage held for sale and pipeline fair value adjustment, and MSR hedge impact, respectively, primarily as a result of a decline in the volume of the loan pipeline as well as declines in sale margins for the comparative periods. The decreases were partially offset by increases of $9.1 million and $1.4 million in changes due to market interest rates and gain on sale of loans held for sale.

~~Gains on sales of securities, net~~. The $1.3 million increase in gain on sales of securities, net, was the result of the movement out of positions in lower-yielding securities. We used the funds generated from the sale of the securities to prepay relatively high-cost FHLB advances.

~~Loss on sales and disposals of other assets, net~~. The $1.1 million decrease in loss on sales and disposals of other assets, net was primarily due to the decline in value and subsequent write-down of two commercial real estate owned properties during the nine months ended September 30, 2020. No similar transactions occurred during the nine months ended September 30, 2021.

~~Limited partnership investment income.~~ The $5.9 million increase in the limited partnership investment income during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, was primarily due to valuation increases as a result of investment performance in limited partnership funds.

~~Swap fee income~~. The $1.2 million decrease in swap fee income was due to higher volume of back-to-back swaps executed with commercial customers during the nine months ended September 30, 2020, driven by the low market rate environment during that period.

~~Table of Contents~~

~~Noninterest Expense~~

~~The following table presents the significant components of noninterest expense for the periods indicated:~~

(Dollars in thousands) Nine Months Ended September 30,
Noninterest expense: 2021 2020 $ Change % Change
Salaries and employee benefits $ 68,308 $ 68,630 $ (322) (0.5) %
Occupancy and equipment, net 13,041 12,751 290 2.3
Data processing 6,815 6,143 672 10.9
Electronic banking 2,947 2,744 203 7.4
Communications 1,288 1,318 (30) (2.3)
Advertising and marketing 2,291 2,602 (311) (12.0)
Professional services 2,721 2,799 (78) (2.8)
Regulatory assessments 2,378 2,691 (313) (11.6)
Loan-related expenses 5,808 4,460 1,348 30.2
Office and operations 4,550 4,152 398 9.6
Intangible asset amortization 650 823 (173) (21.0)
Franchise tax expense 1,846 1,521 325 21.4
Other expenses 3,790 2,417 1,373 56.8
Total noninterest expense $ 116,433 $ 113,051 $ 3,382 3.0

Noninterest expense for the nine months ended September 30, 2021, increased by $3.4 million, or 3.0%, to $116.4 million, compared to $113.1 million for the nine months ended September 30, 2020. The increase was primarily due to increases of $1.4 million, $1.3 million and $672,000 in other noninterest expense, loan-related expenses, and data processing expenses.

~~Data processing.~~ The increase in data processing expense was primarily due to infrastructure increases reflecting higher compliance software systems costs, expenses related to multiple small hardware purchases to support the ability of employees to work remotely as needed and higher subscription fees due to the implementation of new software during the intervening period.

~~Loan-related expenses.~~ The increase in loan-related expenses was primarily driven by increases of $1.3 million in the loan-related legal fees. We expect the current level of loan-related legal fees to continue throughout the remainder of 2021.

~~Other noninterest expense.~~ The increase in other noninterest expense was due to prepayment fees of $1.6 million incurred related to the early termination of long-term FHLB advances during the nine months ended September 30, 2021. We terminated the advances early due to the relatively high cost of the funding and offset prepayment fees with gains on the sale of underperforming investment securities as referenced under "Gain on sales of securities, net" above.

~~Income Tax Expense~~

For the nine months ended September 30, 2021, we recognized income tax expense of $19.0 million, compared to $3.6 million for the nine months ended September 30, 2020. Our effective tax rate for the nine months ended September 30, 2021, was 19.2%, compared to 15.9% for the nine months ended September 30, 2020. The increase in our effective tax rate for the nine months ended September 30, 2021, was primarily due to the increase in our pre-tax income compared to nine months ended September 30, 2020, which made the proportional effect on the tax-exempt items smaller on the effective income tax rate.

Our effective income tax rates have differed from the applicable U.S. statutory rates of 21% at September 30, 2021 and 2020, due to the effect of tax-exempt income from securities, low-income housing and qualified school construction bond tax credits, tax-exempt income from life insurance policies and income tax effects associated with stock-based compensation. Because of these items, we expect our effective income tax rate to continue to remain below the applicable U.S. statutory rate. These tax-exempt items can have a larger than proportional effect on the effective income tax rate as net income decreases. Any increases to the statutory tax rate would increase income taxes in the future.

~~Table of Contents~~

Comparison of Financial Condition at ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020~~2021

General

Total assets ~~decreased~~increased by ~~$157.8~~$251.0 million, or ~~2.1%~~3.2%, to ~~$7.47~~$8.11 billion at ~~September 30, 2021,~~March 31, 2022, from ~~$7.63~~$7.86 billion at December 31, ~~2020.~~2021. The ~~decrease~~increase was primarily attributable to ~~a $537.5~~an increase of $382.6 million ~~decrease~~ in ~~LHFI, which was~~total securities, partially offset by a ~~$480.8~~$121.2 million ~~increase~~decrease in ~~total securities~~cash and cash equivalents for the comparable periods.

Loan Portfolio

Our loan portfolio is our largest category of interest-earning assets and interest income earned on our loan portfolio is our primary source of income. At ~~September 30, 2021, 82.1%~~March 31, 2022, 81.9% of the loan portfolio held for investment was comprised of commercial and industrial loans, including PPP loans, mortgage warehouse lines of credit, commercial real estate and construction/land/land development loans, which were primarily originated within our market areas of Texas, North Louisiana, and Mississippi.

The following table presents the ending balance of our loan portfolio held for investment at the dates indicated.

(Dollars in thousands) September 30, 2021 December 31, 2020
Real estate: Amount Percent Amount Percent $ Change % Change
Commercial real estate (1)
$ 1,590,519 30.6 % $ 1,387,939 24.2 % $ 202,580 14.6 %
Construction/land/land development 518,920 10.0 531,860 9.3 (12,940) (2.4)
Residential real estate 913,411 17.6 885,120 15.5 28,291 3.2
Total real estate 3,022,850 58.2 2,804,919 49.0 217,931 7.8
PPP 216,957 4.2 546,519 9.5 (329,562) (60.3)
Commercial and industrial 1,218,246 23.5 1,271,343 22.3 (53,097) (4.2)
Mortgage warehouse lines of credit 713,339 13.8 1,084,001 18.9 (370,662) (34.2)
Consumer 15,896 0.3 17,991 0.3 (2,095) (11.6)
Total LHFI $ 5,187,288 100.0 % $ 5,724,773 100.0 % $ (537,485) (9.4) %

~~___________________________~~

~~(1)~~Includes $17.0 million of commercial real estate loans for which the fair value option was elected at December 31, 2020. There were no loans for which the fair value option was elected at September 30, 2021.



(Dollars in thousands)	March 31, 2022				December 31, 2021				2022 vs. 2021
Real estate:	Amount		Percent		Amount		Percent		$ Change		% Change
Commercial real estate	$	1,801,382	34.7	%	$	1,693,512	32.4	%	$	107,870	6.4	%
Construction/land/land development	593,350		11.4		530,083		10.1		63,267		11.9
Residential real estate	922,054		17.8		909,739		17.4		12,315		1.4
Total real estate	3,316,786		63.9		3,133,334		59.9		183,452		5.9
PPP	32,154		0.6		105,761		2.0		(73,607)		(69.6)
Commercial and industrial	1,326,443		25.5		1,348,474		25.8		(22,031)		(1.6)

Mortgage warehouse lines of credit	503,249		9.7		627,078		12.0		(123,829)		(19.7)
Consumer	15,774		0.3		16,684		0.3		(910)		(5.5)
Total LHFI	$	5,194,406	100.0	%	$	5,231,331	100.0	%	$	(36,925)	(0.7)	%

At ~~September 30, 2021,~~March 31, 2022, total LHFI were $5.19 billion, a decrease of ~~$537.5~~$36.9 million, or ~~9.4%~~0.7%, compared to ~~$5.72~~$5.23 billion at December 31, ~~2020.~~2021. The decrease primarily reflected declines of ~~$370.7~~$123.8 million in mortgage warehouse lines of credit and ~~$329.6~~$73.6 million in PPP loans, primarily due to the increase in market interest rates which drove the decrease in mortgage warehouse lines of credit and PPP loan forgiveness from the Small Business Administration ("SBA")., respectively. Total LHFI at ~~September 30, 2021,~~March 31, 2022, excluding PPP and mortgage warehouse lines of credit, were ~~$4.26~~$4.66 billion, reflecting an increase of ~~$162.7~~$160.5 million, or ~~4.0%,~~14.5% annualized increase, compared to December 31, ~~2020.~~2021. Our lending focus is on operating companies, including commercial loans and lines of credit, as well as owner-occupied commercial real estate loans. We currently do not plan to significantly alter the real estate concentrations within our loan portfolio.

Under the CARES Act, Congress allocated funds to the PPP, which iswas designed to provide short-term loans to certain qualifying businesses ~~who retain~~that retained employees during the COVID-19 pandemic. These loans, totaling ~~$217.0~~$32.2 million with $736,000 in unearned net deferred loan fees for the Company at ~~September 30, 2021,~~March 31, 2022, have a maximum maturity of five years, bear a fixed rate of interest at one percent for the entire term, and ~~we anticipate many~~as of ~~them will be forgiven by the SBA under the terms of the PPP before their respective maturity dates. As of September 30, 2021,~~March 31, 2022, approximately ~~$558.7 million~~ 95.8% of our total PPP loans granted have been ~~granted forgiveness~~forgiven under this program.

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Loan Portfolio Maturity Analysis

The table below presents the maturity distribution of our LHFI at ~~September 30, 2021.~~March 31, 2022. The table also presents the portion of our loans that have fixed interest rates, rather than interest rates that fluctuate over the life of the loans based on changes in the interest rate environment.


		September 30, 2021									March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	One Year or Less		Over One Year Through Five Years		Over Five Years		Total		(Dollars in thousands)	One Year or Less		After One Year Through Five Years		After Five Years Through Fifteen Years		After Fifteen Years		Total
Real estate:	Real estate:									Real estate:
Commercial real estate	Commercial real estate	$	292,287	$	953,492	$	344,740	$	1,590,519	Commercial real estate	$	251,584	$	1,116,338	$	414,743	$	18,717	$	1,801,382
Construction/land/land development	Construction/land/land development	139,342		309,903		69,675		518,920		Construction/land/land development	146,490		361,762		70,634		14,464		593,350
Residential real estate loans	Residential real estate loans	109,825		365,728		437,858		913,411		Residential real estate loans	83,180		354,890		62,344		421,640		922,054
Total real estate	Total real estate	541,454		1,629,123		852,273		3,022,850		Total real estate	481,254		1,832,990		547,721		454,821		3,316,786
Commercial and industrial loans	Commercial and industrial loans	546,226		808,955		80,022		1,435,203		Commercial and industrial loans	451,482		809,064		97,901		150		1,358,597
Mortgage warehouse lines of credit	Mortgage warehouse lines of credit	713,339		—		—		713,339		Mortgage warehouse lines of credit	503,249		—		—		—		503,249
Consumer loans	Consumer loans	4,753		10,190		953		15,896		Consumer loans	4,197		10,385		547		645		15,774
Total LHFI	Total LHFI	$	1,805,772	$	2,448,268	$	933,248	$	5,187,288	Total LHFI	$	1,440,182	$	2,652,439	$	646,169	$	455,616	$	5,194,406

Amounts with fixed rates	Amounts with fixed rates	$	344,432	$	1,516,814	$	286,251	$	2,147,497	Amounts with fixed rates	$	334,897	$	1,505,707	$	428,637	$	52,538	$	2,321,779
Amounts with variable rates	Amounts with variable rates	1,461,340		931,454		646,997		3,039,791		Amounts with variable rates	1,105,285		1,146,732		217,532		403,078		2,872,627
Total	Total	$	1,805,772	$	2,448,268	$	933,248	$	5,187,288	Total	$	1,440,182	$	2,652,439	$	646,169	$	455,616	$	5,194,406

Nonperforming Assets

Nonperforming assets consist of nonperforming loans and property acquired through foreclosures or repossession, as well as bank-owned property not currently in use and listed for sale.

Loans are ~~considered past due~~placed on nonaccrual status when ~~principal and interest payments have not been received at the date such payments are contractually due. We discontinue accruing interest on loans when we determine~~management believes that the borrower's financial condition, after giving consideration to economic and business conditions, and collection efforts, is such that collection of interest ~~and principal payments in accordance with the terms of the loan~~is doubtful, or generally when loans are ~~not reasonably assured.~~90 days or more past due. Loans may be placed on nonaccrual status even if the contractual payments are not past due if information becomes available that causes substantial doubt about the borrower's ability to meet the contractual obligations of the loan. ~~All~~When accrual of interest is discontinued, all unpaid accrued ~~but not collected for loans that are placed~~interest is reversed. Past due status is based on contractual terms of the loan. Interest income on nonaccrual ~~status is reversed against interest income. Interest income is subsequently~~loans may be recognized ~~only~~ to the extent cash payments are received, ~~in excess of principal outstanding. Loans~~but payments received are usually applied to principal. Nonaccrual loans are generally returned to accrual status when contractual payments are less than 90 days past due, the customer has made required payments for at least six months, and the Company reasonably expects to collect all principal and ~~interest amounts contractually due are brought current and future payments are reasonably assured.~~interest. If a loan is determined by management to be uncollectible, regardless of size, the portion of the loan determined to be uncollectible is then charged to the allowance for loan credit losses.

We manage the quality of our lending portfolio in part through a disciplined underwriting policy and through continual monitoring of loan performance and borrowers' financial condition. There can be no assurance, however, that our loan portfolio will not become subject to losses due to declines in economic conditions or deterioration in the financial condition of our borrowers.

~~Although we~~While economic forecasts have ~~seen an impact from the COVID-19 pandemic, the ultimate impact is still unknown. The ongoing economic~~improved, uncertainty ~~possibility of additional governmental restrictions on economic activity~~remains due to ~~a resurgence of the virus, inflationary and~~risks related to rising inflation, market interest rate increases, labor pressures, continued global supply-chain disruptions, as well as ~~continued supply-chain disruptions has created conditions that could cause an increase in nonperforming loans in future periods.~~increased geopolitical risks.

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The following table shows our nonperforming loans and nonperforming assets at the dates indicated:


(Dollars in thousands)	(Dollars in thousands)							(Dollars in thousands)	March 31,		December 31,
Nonperforming LHFI		September 30, 2021			December 31, 2020
Nonperforming LHFI:										Nonperforming LHFI:		2022			2021
Commercial real estate	Commercial real estate	$	672		$	3,704				Commercial real estate		$	233		$	512
Construction/land/land development	Construction/land/land development	592			2,962					Construction/land/land development		256			338
Residential real estate	Residential real estate	9,377			6,530					Residential real estate		11,609			11,647
Commercial and industrial	Commercial and industrial	13,873			12,897					Commercial and industrial		8,987			12,306
Consumer	Consumer	41			56					Consumer		96			100
Total nonperforming LHFI	Total nonperforming LHFI	24,555			26,149					Total nonperforming LHFI		21,181			24,903
Nonperforming loans held for sale	Nonperforming loans held for sale	2,074			681					Nonperforming loans held for sale		2,698			1,754
Total nonperforming loans	Total nonperforming loans	26,629			26,830					Total nonperforming loans		23,879			26,657
Other real estate owned
Commercial real estate		3,855			266
Other real estate owned:										Other real estate owned:
Commercial real estate, construction/land/land development										Commercial real estate, construction/land/land development		1,280			1,279
Residential real estate	Residential real estate	180			1,318					Residential real estate		180			180
Total other real estate owned	Total other real estate owned	4,035			1,584					Total other real estate owned		1,460			1,459
Other repossessed assets owned	Other repossessed assets owned	539			343					Other repossessed assets owned		243			401
Total repossessed assets owned	Total repossessed assets owned	4,574			1,927					Total repossessed assets owned		1,703			1,860
Total nonperforming assets	Total nonperforming assets	$	31,203		$	28,757				Total nonperforming assets		$	25,582		$	28,517
Troubled debt restructuring loans - nonaccrual	Troubled debt restructuring loans - nonaccrual	$	4,559		$	5,671				Troubled debt restructuring loans - nonaccrual		$	3,709		$	4,064
Troubled debt restructuring loans - accruing	Troubled debt restructuring loans - accruing	2,845			3,314					Troubled debt restructuring loans - accruing		3,338			2,763
Total LHFI	Total LHFI	5,187,288			5,724,773					Total LHFI		5,194,406			5,231,331

Ratio of nonperforming LHFI to total LHFI	Ratio of nonperforming LHFI to total LHFI	0.47		%	0.46		%			Ratio of nonperforming LHFI to total LHFI		0.41		%	0.48		%
Ratio of nonperforming assets to total assets	Ratio of nonperforming assets to total assets	0.42			0.38					Ratio of nonperforming assets to total assets		0.32			0.36

At ~~September 30, 2021,~~March 31, 2022, total nonperforming LHFI decreased by ~~$1.6~~$3.7 million, or ~~6.1%~~14.9%, from December 31, ~~2020,~~2021, primarily due to reductions ~~of nonperforming loans~~ in the sectors of commercial real estate and construction, land and land development, partially offset by increases in nonperforming loans in the residential real estate and commercial and industrial sectors. The reduction inall nonperforming LHFI was offset by the $1.4 million increase in nonperforming loans held for sale. Total repossessed assets increased $2.6 million from December 31, 2020, driven primarily by a $3.6 million increase in repossessed commercial real estate loans offset by a $1.1 million reduction in repossessed residential real estate loans.loan categories. Please see Note 4 - Loans ~~within our condensed notes~~ to our consolidated financial statements contained in Item 8 of this report for more information on nonperforming loans.

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Potential Problem Loans

From a credit risk standpoint, we classify loans using risk grades which fall into one of five categories: pass, special mention, substandard, doubtful or loss. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. We review the ratings on loans and adjust them to reflect the degree of risk and loss that is felt to be inherent or expected in each loan. The methodology is structured so that reserve allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss). Loans rated special mention reflect borrowers who exhibit credit weaknesses or downward trends deserving close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank's credit position at some future date. While potentially weak, no loss of principal or interest is envisioned, and these borrowers currently do not pose sufficient risk to warrant adverse classification. Loans rated substandard are those borrowers with deteriorating trends and well-defined weaknesses that jeopardize the orderly liquidation of debt. A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any, and where normal repayment from the borrower might be in jeopardy.

Loans rated as doubtful have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full questionable, and there is a high probability of loss based on currently existing facts, conditions and values. Loans classified as loss are charged-off, and we have no expectation of the recovery of any payments with respect to loans rated as loss. Information regarding the internal risk ratings of our loans at ~~September 30, 2021,~~March 31, 2022, is included in Note 4 - Loans ~~in the condensed notes~~ to our consolidated financial statements ~~included~~contained in Item 1 of this report.

Allowance for Loan Credit Losses

~~Effective January 1, 2020, the Company adopted CECLresulting in a change to the Company's reporting of credit losses for assets held at amortized cost basis and available for sale debt securities. Please see~~ ~~Note 1 - Significant Accounting Policies~~ ~~included in the Company's 2020 Form 10-K filed with the SEC for a description of policy revisions resulting from the Company's adoption of ASU 2016-13.~~

The allowance for loan credit losses represents the estimated losses for loans accounted for on an amortized cost basis. Expected losses are calculated using relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company evaluates LHFI on a pool basis with pools of loans characterized by loan type, collateral, industry, internal credit risk rating and FICO score. The Company applied a probability of default, loss given default loss methodology, to the loan pools at ~~September 30, 2021.~~March 31, 2022. Historical loss rates for each pool are calculated based on charge-off and recovery data beginning with the second quarter of 2012. These loss rates are adjusted for differences between current period conditions, including the ongoing effects of COVID-19 on the U.S. economy, and the conditions existing during the historical loss period. Historical losses are additionally adjusted for the effects of certain economic variables forecast over a one-year period, particularly for differences between current period conditions and the conditions existing during the historical loss period. Subsequent to the forecast effects, historical loss rates are used to estimate losses over the estimated remaining lives of the loans. The estimated remaining lives consist of the contractual lives, adjusted for estimated prepayments. Loans that exhibit characteristics different from their pool characteristics are evaluated on an individual basis. Certain of these loans are considered to be collateral dependent, with the borrower experiencing financial difficulty. For these loans, the fair value of collateral practical expedient is elected whereby the allowance is calculated as the amount by which the amortized cost exceeds the fair value of collateral, less costs to sell (if applicable). Those individual loans that are not collateral dependent are evaluated based on a discounted cash flow methodology.

The amount of the allowance for loan credit losses is affected by loan charge-offs, which decrease the allowance, recoveries on loans previously charged off, which increase the allowance, as well as the provision for loan credit losses charged to income, which increases the allowance. In determining the provision for loan credit losses, management monitors fluctuations in the allowance resulting from actual charge-offs and recoveries and periodically reviews the size and composition of the loan portfolio in light of current and forecasted economic conditions. If actual losses exceed the amount of the allowance for loan credit losses, it would materially and adversely affect our earnings.

As a general rule, when it becomes evident that the full principal and accrued interest of a loan may not be collected, or at 90 days past due, we will reflect that loan as nonperforming. It will remain nonperforming until it performs in a manner that it is reasonable to expect that we will collect principal and accrued interest in full. When the amount or likelihood of a loss on a loan has been confirmed, a charge-off will be taken in the period it is determined.

We establish general allocations for each major loan category and credit quality. The general allocation is based, in part, on historical charge-off experience and loss given default methodology, derived from our internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data. We give consideration to trends, changes in loan mix, delinquencies, prior losses, reasonable and supportable forecasts and other related information.

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In connection with the review of our loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements we consider include:

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~~Our allowance for loan~~Overall credit ~~losses decreased by $16.7 million or 19.3%,~~metrics improved at March 31, 2022, compared to ~~$69.9 million at September 30, 2021, from $86.7 million at~~ December 31, ~~2020.~~2021. The ~~ratio of~~ allowance for loan credit losses to ~~total~~nonperforming LHFI increased to 293.53% at ~~September 30, 2021 and~~March 31, 2022, compared to 259.35% at December 31, ~~2020, was 1.35%~~2021. The Company’s nonperforming LHFI and ~~1.51%~~quarterly net charge-offs improved to $21.2 million and $7.1 million (annualized), ~~respectively.~~respectively, compared to $24.9 million and $10.7 million (annualized), respectively, at December 31, 2021.

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The following table presents an analysis of the allowance for ~~loan~~ credit losses and other related data at the periods indicated.

(Dollars in thousands) Nine Months Ended September 30, Year Ended December 31,
Allowance for loan credit losses 2021 2020 2020
Balance at beginning of period $ 86,670 $ 37,520 $ 37,520
Impact of adopting ASC 326 — 1,248 1,248
Provision for loan losses (8,130) 52,244 59,028
Charge-offs:
Commercial real estate 130 3,868 4,924
Residential real estate 58 598 692
Commercial and industrial 8,830 5,770 6,702
Consumer 54 69 76
Total charge-offs 9,072 10,305 12,394
Recoveries:
Commercial real estate 10 6 19
Construction/land/land development — 1 1
Residential real estate 81 180 202
Commercial and industrial 352 736 1,022
Consumer 36 13 24
Total recoveries 479 936 1,268
Net charge-offs 8,593 9,369 11,126
Balance at end of period $ 69,947 $ 81,643 $ 86,670
Ratio of allowance for loan credit losses to:
Nonperforming LHFI 284.86 % 270.09 % 331.45 %
LHFI 1.35 1.45 1.51
Net annualized charge-offs as a percentage of:
Provision for loan credit losses N/M 23.95 18.85
Allowance for loan credit losses 16.43 15.33 12.84
Average LHFI 0.21 0.26 0.22
~~__________________________~~

~~N/M = Not meaningful~~.



(Dollars in thousands)	Three Months Ended March 31,						Year Ended December 31,
Allowance for loan credit losses	2022			2021			2021
Balance at beginning of period	$	64,586		$	86,670		$	86,670

Provision for loan credit losses	(659)			1,360			(10,798)
Charge-offs:
Commercial real estate	166			28			170

Residential real estate	75			—			78
Commercial and industrial	2,146			2,955			11,923

Consumer	15			44			63
Total charge-offs	2,402			3,027			12,234
Recoveries:
Commercial real estate	2			3			65

Residential real estate	6			9			117
Commercial and industrial	635			108			717

Consumer	5			13			49
Total recoveries	648			133			948
Net charge-offs	1,754			2,894			11,286
Balance at end of period	$	62,173		$	85,136		$	64,586
Ratio of allowance for loan credit losses to:
Nonperforming LHFI	293.53		%	255.22		%	259.53		%
LHFI	1.20			1.46			1.23
Net charge-offs as a percentage of:
Provision for loan credit losses	N/M			863.00			N/M
Allowance for loan credit losses	11.44			13.79			17.47
Average LHFI	0.14			0.21			0.21



N/M = Not meaningful.

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Securities

Our securities portfolio totaled ~~$1.54~~$1.92 billion at ~~September 30, 2021,~~March 31, 2022, representing an increase of ~~$480.8~~$382.6 million, or ~~45.6%~~24.9%, from ~~$1.05~~$1.53 billion at December 31, ~~2020.~~2021. The overall increase in securities reflects a shift in balance sheet composition as liquidity surged primarily due to increases in deposits, and declines in PPP loan balances due to the SBA's forgiveness process, and declines in mortgage warehouse ~~lines~~line of credit loan balances driven by the ~~SBA's forgiveness process and the normalization of mortgage warehouse lines of credit loan balances.~~increase in market interest rates. For additional information regarding our securities portfolio, please see Note 3 - Securities in the condensed notes to our consolidated financial statements contained in Part I, Item 1 of this report.

Deposits

Deposits are the primary funding source used to fund our loans, investments and operating needs. We offer a variety of products designed to attract and retain both consumer and commercial deposit customers. These products consist of noninterest and interest-bearing checking accounts, savings deposits, money market accounts and time deposits. Deposits are primarily gathered from individuals, partnerships and corporations in our market areas. We also obtain deposits from local municipalities and state agencies. Increases of $132.2 million and $82.1 million in noninterest-bearing and interest-bearing demand, respectively, drove the increase in total deposits compared to December 31, 2021.

The following table presents our deposit mix at the dates indicated:


	March 31, 2022				December 31, 2021
(Dollars in thousands)	Balance		% of Total		Balance		% of Total		$ Change		% Change
Noninterest-bearing demand	$	2,295,682	33.9	%	$	2,163,507	32.9	%	$	132,175	6.1	%
Interest-bearing demand	1,494,201		22.1		1,412,089		21.5		82,112		5.8
Money market	2,191,735		32.4		2,204,109		33.5		(12,374)		(0.6)
Time deposits	523,783		7.7		543,128		8.3		(19,345)		(3.6)
Savings	261,778		3.9		247,860		3.8		13,918		5.6
Total deposits	$	6,767,179	100.0	%	$	6,570,693	100.0	%	$	196,486	3.0	%

We manage our interest expense on deposits through specific deposit product pricing that is based on competitive pricing, economic conditions and current and anticipated funding needs. We may use interest rates as a mechanism to attract or deter additional deposits based on our anticipated funding needs and liquidity position. We also consider potential interest rate risk caused by extended maturities of time deposits when setting the interest rates in periods of future economic uncertainty.

The following table ~~presents our deposit mix at the dates indicated:~~

September 30, 2021 December 31, 2020
(Dollars in thousands) Balance % of Total Balance % of Total $ Change % Change
Noninterest-bearing demand $ 1,980,107 32.2 % $ 1,607,564 28.0 % $ 372,543 23.2 %
Interest-bearing demand 1,376,118 22.3 1,478,818 25.7 (102,700) (6.9)
Money market 1,986,598 32.2 1,794,915 31.1 191,683 10.7
Time deposits 578,007 9.4 664,766 11.6 (86,759) (13.1)
Savings 237,938 3.9 205,252 3.6 32,686 15.9
Total deposits $ 6,158,768 100.0 % $ 5,751,315 100.0 % $ 407,453 7.1 %

Increases of $372.5 million and $191.7 million, in noninterest-bearing demand and money market deposits, respectively, drove the increase in total deposits compared to December 31, 2020, partially offset by a $102.7 million decline in interest-bearing demand deposits. Increases in business and public fund account balances drove the increase in noninterest-bearing demand and money market deposits, respectively. The decrease in interest-bearing demand is due to decreases in brokered deposits.

~~The following table~~ reflects the classification of our average deposits and the average rate paid on each deposit category for the periods indicated:


		Nine Months Ended September 30,												Three Months Ended March 31,
		2021						2020							2022				2021
(Dollars in thousands)	(Dollars in thousands)	Average Balance		Interest Expense		Annualized Average Rate Paid		Average Balance		Interest Expense		Annualized Average Rate Paid				(Dollars in thousands)	Average Balance		Interest Expense		Average Rate Paid		Average Balance		Interest Expense		Average Rate Paid
Interest-bearing demand	Interest-bearing demand	$	1,423,590	$	2,147	0.20	%	$	1,039,896	$	4,343	0.56	%			Interest-bearing demand	$	1,496,041	$	698	0.19	%	$	1,477,298	$	731	0.20	%
Money market	Money market	1,997,203		4,457		0.30		1,484,450		8,165		0.73				Money market	2,225,356		1,439		0.26		1,821,093		1,487		0.33
Time deposits	Time deposits	623,161		3,739		0.80		754,652		9,883		1.75				Time deposits	535,044		709		0.54		656,255		1,533		0.95
Savings	Savings	228,214		118		0.07		173,423		177		0.14				Savings	253,998		40		0.06		214,890		38		0.07
Total interest-bearing	Total interest-bearing	4,272,168		10,461		0.33		3,452,421		22,568		0.87				Total interest-bearing	4,510,439		2,886		0.26		4,169,536		3,789		0.37
Noninterest-bearing demand	Noninterest-bearing demand	1,835,702						1,437,433								Noninterest-bearing demand	2,218,092						1,700,523
Total average deposits	Total average deposits	$	6,107,870	$	10,461	0.23	%	$	4,889,854	$	22,568	0.62	%			Total average deposits	$	6,728,531	$	2,886	0.17	%	$	5,870,059	$	3,789	0.26	%

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Our average deposit balance was ~~$6.11~~$6.73 billion for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, an increase of ~~$1.22 billion,~~$858.5 million, or ~~24.9%~~14.6%, from ~~$4.89~~$5.87 billion for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The average annualized rate paid on our interest-bearing deposits for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, was ~~0.33%~~0.26%, compared to ~~0.87%~~0.37% for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The decrease in the average cost of our deposits was primarily the result of ~~steadily falling~~the low interest ~~rates that occurred since June 30, 2020.~~rate environment. The Federal Reserve lowered the federal funds target rate twice during March 2020, resulting in an aggregate 150 basis point decrease in the target rate, which ~~was~~did not ~~fully absorbed by~~change during the ~~markets~~intervening period until ~~later in 2020, although~~ the ~~reduction occurred~~most recent increase of 25 basis points in March 2020. When the target rate reductions began, we took action to lower deposit rates on nonmaturity deposits. Our Louisiana market deposits also increased $330.2 million compared to September 30, 2020, which historically carry lower cost of ~~deposits than those in Texas, helping to lower our overall cost of deposits.~~2022.

Average noninterest-bearing deposits at ~~September 30, 2021,~~March 31, 2022, were ~~$1.84~~$2.22 billion, compared to ~~$1.44~~$1.70 billion at ~~September 30, 2020,~~March 31, 2021, an increase of ~~$398.3~~$517.6 million, or ~~27.7%~~30.4%, and represented ~~30.1%~~33.0% and ~~29.4%~~29.0% of average total deposits for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

Borrowings

Short-term FHLB advances decreased $650.0 million at September 30, 2021, compared to December 31, 2020, while long-term FHLB advances declined $13.7 million compared to December 31, 2020. The decrease in short-term FHLB advances from December 31, 2020, was primarily driven by PPP forgiveness payments, increases in non-brokered deposits and declines in warehouse loan balances during the nine months ended September 30, 2021, driving an increase in overall liquidity and reducing the reliance on borrowings. Additionally, using funds generated from the sale of investment securities we prepaid $13.1 million in long-term FHLB advances and incurred related prepayment fees of $1.6 million during the first quarter of 2021.

The table below shows FHLB advances by maturity and weighted average rate at ~~September 30, 2021:~~March 31, 2022:


(Dollars in thousands)	(Dollars in thousands)	Balance		Weighted Average Rate		(Dollars in thousands)	Balance		Weighted Average Rate
Three to five years	Three to five years	$	504	4.21	%	Three to five years	$	1,214	4.42	%
After five years	After five years	256,557		1.70		After five years	255,721		1.69
Total	Total	$	257,061	1.70	%	Total	$	256,935	1.70	%

At ~~September 30, 2021,~~March 31, 2022, we were eligible to borrow an additional ~~$837.7 million~~$1.02 billion from the FHLB.

Liquidity and Capital Resources

Overview

Management oversees our liquidity position to ensure adequate cash and liquid assets are available to support our operations and satisfy current and future financial obligations, including demand for loan funding and deposit withdrawals. Management continually monitors, forecasts and tests our liquidity and non-core dependency ratios to ensure compliance with targets established by our Asset-Liability Management Committee and approved by our board of directors.

Management measures our liquidity position by giving consideration to both on-balance sheet and off-balance sheet sources of, and demands for, funds on a daily and weekly basis.

The Company, which is a separate legal entity apart from the Bank, must provide for its own liquidity, including payment of any dividends that may be declared for its common stockholders and interest and principal on any outstanding debt or trust preferred securities incurred by the Company. The cash held at the holding Company is available for general corporate purposes described above, as well as providing capital support to the Bank. In addition, the Company ~~entered into a second amendment to the loan agreement initially executed on October 5, 2018, with NexBank, and~~ has ~~up to $100.0 million available under~~ a line of ~~credit. Please see~~ ~~Note 13 - Subsequent Events~~credit under the terms of which the loan amount shall not exceed an aggregate principal balance of $100 million, consisting of an initial $50 million extension of credit and any one or more potential incremental revolving loan amounts that the lender may make in its sole discretion, up to an aggregate principal of $50 million, upon the ~~condensed notes to our consolidated financial statements contained in Part I, Item 1~~request of ~~this report for more information on this line of credit.~~

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the Company.

The table below shows the liquidity measures for the Company at the dates indicated:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021			December 31, 2020			(Dollars in thousands)	March 31, 2022			December 31, 2021
Available cash balances at the holding company (unconsolidated)	Available cash balances at the holding company (unconsolidated)	$	41,503		$	42,908		Available cash balances at the holding company (unconsolidated)	$	28,566		$	28,904
Cash and liquid securities as a percentage of total assets	Cash and liquid securities as a percentage of total assets	20.6		%	13.6		%	Cash and liquid securities as a percentage of total assets	23.0		%	23.2		%

There are regulatory restrictions on the ability of the Bank to pay dividends under federal and state laws, regulations and policies, please see Note 1110 - Capital and Regulatory Matters in the condensed notes to our consolidated financial statements for more information on the availability of Bank dividends.

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Liquidity Sources

In addition to cash generated from operations, we utilize a number of funding sources to manage our liquidity, including core deposits, investment securities, cash and cash equivalents, loan repayments, federal funds lines of credit available from other financial institutions, as well as advances from the FHLB. We may also use the discount window at the Federal Reserve Bank ("FRB") as a source of short-term funding.

Core deposits, which are total deposits excluding time deposits greater than $250,000 and brokered deposits, are a major source of funds used to meet our cash flow needs. Maintaining the ability to acquire these funds as needed in a variety of markets is the key to assuring our liquidity.

Our investment portfolio is another source for meeting our liquidity needs. Monthly payments on mortgage-backed securities are used for short-term liquidity, and our investments are generally traded in active markets that offer a readily available source of cash liquidity through sales, if needed. Securities in our investment portfolio are also used to secure certain deposit types, such as deposits from state and local municipalities, and can be pledged as collateral for other borrowing sources.

Other sources available for meeting liquidity needs include long- and short-term advances from the FHLB, and unsecured federal funds lines of credit. Long-term funds obtained from the FHLB are primarily used as an alternative source to fund long-term growth of the balance sheet by supporting growth in loans and other long-term interest-earning assets. We typically rely on such funding when the cost of such borrowings compares favorably to the rates that we would be required to pay for other funding sources, including certain deposits.

We also had unsecured federal funds lines of credit available to us, with no amounts outstanding at either ~~September 30, 2021,~~March 31, 2022, or December 31, ~~2020.~~2021. These lines of credit primarily provide short-term liquidity and, in order to ensure the availability of these funds, we test these lines of credit at least annually. Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances.

Additionally, we had the ability to borrow at the discount window of the FRB using our commercial and industrial loans as collateral. There were no borrowings against this line at ~~September 30, 2021.~~

~~Please see the "Stock Repurchases"~~ ~~section below for information on the Company's stock buy-back program.~~

~~Off-Balance Sheet Arrangements and Contractual Obligations~~March 31, 2022.

In the normal course of business as a financial services provider, we enter into financial instruments, such as certain contractual obligations and commitments to extend credit and letters of credit, to meet the financing needs of our customers. These commitments involve elements of credit risk, interest rate risk and liquidity risk. Some instruments may not be reflected in our consolidated financial statements until they are funded, and a significant portion of commitments to extend credit may expire without being drawn, although they expose us to varying degrees of credit risk and interest rate risk in much the same way as funded loans.

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~~The table below presents the funding requirements of our most significant financial commitments, excluding interest and purchase discounts, at the date indicated:~~

Payments Due by Period
(Dollars in thousands)
September 30, 2021
Less than
One Year One-Three
Years Three-Five
Years Greater than
Five Years Total
FHLB advances $ — $ — $ 504 $ 256,557 $ 257,061
Time deposits 451,075 109,083 17,349 500 578,007
Subordinated debentures — — — 160,826 160,826
Operating lease obligations 4,612 7,574 4,396 10,640 27,222
Overnight repurchase agreements with depositors 5,136 — — — 5,136
Limited partnership investments(1)
2,945 — — — 2,945
Low-income housing tax credits 2,393 199 308 406 3,306
Total contractual obligations $ 466,161 $ 116,856 $ 22,557 $ 428,929 $ 1,034,503

~~____________________________~~

~~(1)~~These commitments represent amounts we are obligated to contribute to various limited partnership investments in accordance with the provisions of the respective limited partnership agreements. The capital contributions may be required at any time, and are therefore reflected in the Less than One Year category.

~~Credit-Related Commitments~~

Commitments to extend credit include revolving commercial credit lines, non-revolving loan commitments issued mainly to finance the acquisition and development or construction of real property or equipment, and credit card and personal credit lines. The availability of funds under commercial credit lines and loan commitments generally depends on whether the borrower continues to meet credit standards established in the underlying contract and has not violated other contractual conditions. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Credit card and personal credit lines are generally subject to cancellation if the borrower's credit quality deteriorates. A number of commercial and personal credit lines are used only partially or, in some cases, not at all before they expire, and the total commitment amounts do not necessarily represent future cash requirements.

A substantial majority of the letters of credit are standby agreements that obligate us to fulfill a customer's financial commitments to a third party if the customer is unable to perform. We issue standby letters of credit primarily to provide credit enhancement to our customers' other commercial or public financing arrangements and to help them demonstrate financial capacity to vendors of essential goods and services.

~~The table below presents our commitments to extend credit by commitment expiration date for the date indicated:~~

September 30, 2021
(Dollars in thousands) Less than
One Year One-Three
Years Three-Five
Years Greater than
Five Years Total
Commitments to extend credit(1)
$ 658,244 $ 606,585 $ 259,463 $ 43,148 $ 1,567,440
Standby letters of credit 48,998 5,723 — — 54,721
Total off-balance sheet commitments $ 707,242 $ 612,308 $ 259,463 $ 43,148 $ 1,622,161

~~____________________________~~

~~(1)Includes $557.8 million of unconditionally cancellable commitments at September 30, 2021.~~

~~Table of Contents~~

Stockholders' Equity

Stockholders' equity provides a source of permanent funding, allows for future growth and provides a degree of protection to withstand unforeseen adverse developments. Changes in stockholders' equity is reflected below:


(Dollars in thousands)	Total Stockholders' Equity
Balance at January 1, ~~2021~~2022	$	~~647,150~~730,211
Net income	~~80,224~~20,683
Other comprehensive income, net of tax	~~(13,777)~~(71,619)
Dividends declared - common stock ($~~0.36~~0.13 per share)	~~(8,465)~~(3,096)
Other	~~535~~686
Balance at ~~September 30, 2021~~March 31, 2022	$	~~705,667~~676,865

~~Stock Repurchases~~

~~In July 2019, our board~~A decline of ~~directors authorized a stock buyback program pursuant~~$71.6 million in accumulated other comprehensive (loss) income negatively impacted total stockholders' equity primarily due to ~~which we may, from time to time, purchase up to $40 million of our outstanding common stock. The shares may be repurchased in~~ the ~~open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations~~steepening of the ~~Securities and Exchange Commission. The stock buyback program is intended to expire in 2022, but may be terminated or amended by our board~~short end of ~~directors at any time. The stock buyback program does not obligate us to purchase any shares at any time.~~

~~During~~the yield curve during the first quarter and its impact on our investment portfolio, however, it did not impact regulatory capital.

Please see Part II, Item 2. "Unregistered Sales of ~~2021, the Company repurchased a total~~Equity Securities and Use of ~~37,568 shares of its common stock pursuant to its stock buyback program at an average price per share of $33.42,~~Proceeds" below for an aggregate purchase price of $1.3 million. There were no stock repurchases during the second or third quarter of 2021. Prior to 2021, the Company had cumulatively repurchased an aggregate 330,868 common stock shares for a total purchase price of $10.8 million under the stock buyback program. As of September 30, 2021,information on the Company's ~~board~~stock buy-back program.

Table of ~~directors has approved approximately $28.0 million remaining to be purchased under the program.~~Contents

Regulatory Capital Requirements

Together with the Bank, we are subject to various regulatory capital requirements administered by federal banking agencies. ~~These~~For further information, these requirements are discussed in greater detail in "Item 1. Business - Regulation and Supervision" included in our ~~2020~~2021 Form 10-K, filed with the ~~SEC for further information.~~SEC. Failure to meet minimum capital requirements may result in certain actions by regulators that, if enforced, could have a direct material effect on our financial statements. At ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, we and the Bank were in compliance with all applicable regulatory capital requirements, and the Bank was classified as ~~"well-capitalized"~~"well capitalized" for purposes of the prompt corrective action regulations of the Federal Reserve. As we deploy capital and continue to grow operations, regulatory capital levels may decrease depending on the level of earnings. However, we expect to monitor and control growth in order to remain ~~"well-capitalized"~~"well capitalized" under applicable regulatory guidelines and in compliance with all applicable regulatory capital standards. While we are currently classified as ~~well-capitalized,~~"well capitalized," an extended economic recession could adversely impact our reported and regulatory capital ratios.

~~Table of Contents~~

The following table presents our regulatory capital ratios, as well as those of the Bank, at the dates indicated:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021				December 31, 2020				(Dollars in thousands)	March 31, 2022				December 31, 2021
Origin Bancorp, Inc.	Origin Bancorp, Inc.	Amount		Ratio		Amount		Ratio		Origin Bancorp, Inc.	Amount		Ratio		Amount		Ratio
Common equity Tier 1 capital (to risk-weighted assets)	Common equity Tier 1 capital (to risk-weighted assets)	$	673,003	11.23	%	$	604,306	9.95	%	Common equity Tier 1 capital (to risk-weighted assets)	$	699,538	11.20	%	$	681,039	11.20	%
Tier 1 capital (to risk-weighted assets)	Tier 1 capital (to risk-weighted assets)	682,403		11.38		613,682		10.11		Tier 1 capital (to risk-weighted assets)	708,955		11.35		690,448		11.36
Total capital (to risk-weighted assets)	Total capital (to risk-weighted assets)	893,412		14.90		837,058		13.79		Total capital (to risk-weighted assets)	914,619		14.64		897,503		14.77
Tier 1 capital (to average assets)		682,403		9.18		613,682		8.62
Tier 1 capital (to average total consolidated assets)										Tier 1 capital (to average total consolidated assets)	708,955		8.84		690,448		9.20

Origin Bank	Origin Bank									Origin Bank
Common equity Tier 1 capital (to risk-weighted assets)	Common equity Tier 1 capital (to risk-weighted assets)	$	701,939	11.79	%	$	637,863	10.53	%	Common equity Tier 1 capital (to risk-weighted assets)	$	740,991	11.91	%	$	724,440	11.97	%
Tier 1 capital (to risk-weighted assets)	Tier 1 capital (to risk-weighted assets)	701,939		11.79		637,863		10.53		Tier 1 capital (to risk-weighted assets)	740,991		11.91		724,440		11.97
Total capital (to risk-weighted assets)	Total capital (to risk-weighted assets)	834,307		14.01		782,503		12.92		Total capital (to risk-weighted assets)	867,955		13.95		852,825		14.09
Tier 1 capital (to average assets)		701,939		9.48		637,863		8.99
Tier 1 capital (to average total consolidated assets)										Tier 1 capital (to average total consolidated assets)	740,991		9.26		724,440		9.66

Critical Accounting Policies and Estimates

SEC guidance requires disclosure of “critical accounting estimates.” The SEC defines “critical accounting estimates” as those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.

Our accounting policies are fundamental to understanding our management’s discussion and analysis of our results of operations and financial condition. We have identified certain significant accounting policies which involve a higher degree of judgment and complexity in making certain estimates and assumptions that affect amounts reported in our consolidated financial statements. See Note 1 – Significant Accounting Policies in the condensed notes to our consolidated financial statements for more information about our critical accounting policies and use of estimates. Since December 31, 2021, there have been no changes to our critical accounting policies.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Sensitivity and Market Risk

As a financial institution, our primary component of market risk is interest rate volatility. Our financial management policy provides management with guidelines for effective funds management and we have established a measurement system for monitoring the net interest rate sensitivity position.

Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities, other than those which have a short-term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.

We manage exposure to interest rates by structuring the balance sheet in the ordinary course of business. Additionally, from time to time, we enter into derivatives and futures contracts to mitigate interest rate risk from specific transactions. Based upon the nature of operations, we are not subject to foreign exchange or commodity price risk. We have entered into interest rate swaps to mitigate interest rate risk in limited circumstances, but it is not our policy to enter into such transactions on a regular basis.

Our exposure to interest rate risk is managed by the Bank's Asset-Liability Management Committee in accordance with policies approved by the Bank's board of directors. The committee formulates strategies based on appropriate levels of interest rate risk. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors.

The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. We employ methodologies to manage interest rate risk, which includes an analysis of relationships between interest-earning assets and interest-bearing liabilities, and an interest rate shock simulation model.

We use interest rate risk simulation models and shock analyses to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. Contractual maturities and re-pricing opportunities of loans are incorporated in the model, as are prepayment assumptions, maturity data and call options within the investment portfolio. The average life of non-maturity deposit accounts is based on our balance retention rates using a vintage study methodology. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model's simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.

On a quarterly basis, we run various simulation models, including a static balance sheet and dynamic growth balance sheet. These models test the impact on net interest income and fair value of equity from changes in market interest rates under various scenarios. Under the static model, rates are shocked instantaneously and ramped rates change over a twelve-month and ~~twenty-four month~~twenty-four-month horizon based upon parallel yield curve shifts. Parallel shock scenarios assume instantaneous parallel movements in the yield curve compared to a flat yield curve scenario. Additionally, we run non-parallel simulation involving analysis of interest income and expense under various changes in the shape of the yield curve. Internal policy regarding interest rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 8.0% for a 100 basis point shift, 15.0% for a 200 basis point shift, 20.0% for a 300 basis point shift, and 25.0% for a 400 basis point shift. We ~~continue to monitor our asset sensitivity and evaluate strategies to prevent being significantly impacted by declining interest rates in the near future. We~~ are marginally modeling outside of policy in ~~the down 100 and down 200~~most negative basis point rate scenarios, and we continue to monitor our asset sensitivity and evaluate strategies to prevent being significantly impacted by future changes in interest rates.

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The following table summarizes the impact of an instantaneous, sustained simulated change in net interest income and fair value of equity over a 12-month horizon at the date indicated:


		September 30, 2021					March 31, 2022
Change in Interest Rates (basis points)	Change in Interest Rates (basis points)	% Change in Net Interest Income		% Change in Fair Value of Equity		Change in Interest Rates (basis points)	% Change in Net Interest Income		% Change in Fair Value of Equity
+400	+400	17.7	%	(2.6)	%	+400	23.5	%	(2.9)	%
+300	+300	12.5		(2.7)		+300	17.0		(2.9)
+200	+200	8.1		(1.4)		+200	11.4		(1.6)
+100	+100	3.7		(0.4)		+100	8.1		0.8
Base	Base					Base
-100	-100	(8.5)		(4.2)		-100	(9.0)		(3.9)
-200	-200	(15.6)		(1.1)		-200	(16.9)		(9.9)

We have found that, historically, interest rates on deposits change more slowly than changes in the discount and federal funds rates. This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis, meaning that process by which we measure the gap between interest rate sensitive assets versus interest rate sensitive liabilities. The assumptions incorporated into the model are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model's simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions and the application and timing of various strategies.

Impact of Inflation

Our ~~consolidated~~ financial statements ~~and related notes~~ included ~~in this quarterly report on Form 10-Q~~herein have been prepared in accordance with U.S. GAAP. ~~These require the measurement of~~U.S. GAAP presently requires us to measure financial position and operating results primarily in terms of ~~historical dollars, without considering changes~~historic dollars. Changes in the relative value of money ~~over time~~ due to inflation or ~~recession. Inflation~~recession are generally ~~increases~~not considered. The primary effect of inflation on our operations is reflected in increased operating costs. In management’s opinion, changes in interest rates affect the costs of funds and operating overhead, and to the extent loans and other assets bear variable rates, the yields on such assets. Unlike most industrial companies, virtually all of the assets and liabilitiesfinancial condition of a financial institution ~~are monetary~~to a far greater degree than changes in ~~nature. As a result,~~the inflation rate. While interest rates ~~generally have a more significant effect on~~are greatly influenced by changes in the ~~performance~~inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. Interest rates are highly sensitive to many factors that are beyond our control, including changes in the expected rate of ~~a financial institution than~~inflation, the ~~effects~~influence of general ~~levels~~and local economic conditions and the monetary and fiscal policies of ~~inflation. In addition, inflation affects a financial institution's cost of goods~~the United States government, its agencies and services purchased, the cost of salaries and benefits, occupancy expense and similar items. Inflation and related increases in interest rates generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings and stockholders' equity.various other governmental regulatory authorities.

Market Risk

Regulators ~~have encouraged~~expect banks to transition away from the use of the London Interbank Offered Rate ("LIBOR") as a reference rate. It is expected that the transition away from the widespread use of LIBOR to alternative rates will continue to occur over the course of the next ~~twenty-four months.~~fifteen months, ahead of the FCA's announced cessation of the remaining LIBOR settings by June 30, 2023. Please see "Item 1A Risk Factors - Risks Related to Our Business" included in our ~~2020~~annual report on Form 10-K ~~filed with~~for the ~~SEC~~year ended December 31, 2021, for further information.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures — As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of the end of the period covered by this report.

Our management, including the Chief Executive Officer and Chief Financial Officer, identified no change in our internal control over financial reporting that occurred during the three month period ended March 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II: OTHER INFORMATION

Item 1. Legal Proceedings

Refer to Note 1211 - Commitments and Contingencies - Loss Contingencies in the condensed notes to the consolidated financial statements included in Part I, Item 1 of this report for additional information regarding legal proceedings not reportable under this Item.

Item 1A. Risk Factors

In evaluating an investment in the Company's securities, investors should consider carefully, among other things, the risk factors previously disclosed in Part I, Item 1A of our ~~2020~~2021 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In July 2019, the Company's board of directors authorized a stock buyback program pursuant to which the Company may, from time to time, purchase up to $40 million of its outstanding common stock. The shares may be repurchased in the open market or in privately negotiated transactions from time to time, depending upon market conditions and other factors, and in accordance with applicable regulations of the SEC. The stock buyback program ~~is intended to expire in 2022,~~was initially approved for a period of 36 months, but may be extended, terminated or amended by ~~the Company’s~~our board of ~~directors at any time.~~directors. The stock buyback program does not obligate the Company to purchase any shares at any time.

The following table shows the Company's monthly stock repurchases during the quarter ended ~~September 30, 2021.~~March 31, 2022.


(Dollars in thousands, except per share amounts) Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan at the End of the Period
~~July~~January 1, ~~2021 - July~~2022- January 31, ~~2021~~2022	—	$	—		—		$	27,962
~~August~~February 1, ~~2021~~2022 - ~~August 31, 2021~~February 28, 2022	—	—		—		27,962
~~September~~March 1, ~~2021 - September 30, 2021~~2022- March 31, 2022	—	—		—		27,962

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On October 29, 2021, the Company entered into a second amendment (the "Amendment") to that certain existing loan agreement (the "Loan Agreement") initially executed on October 5, 2018, with NexBank (the "Lender"). Pursuant to the Amendment, the loan shall not exceed an aggregate principal of $100 million, consisting of the $50 million existing loan amount and any one or more potential incremental revolving loan commitments that the Lender may make in its sole discretion, up to an aggregate principal of $50 million, upon the request of the Company. The loan is extended to the Company for working capital and general corporate purposes. The Lender has no obligation to agree to extend any incremental revolving loan or to increase the loan amount. The principal amounts borrowed under the Amendment will bear interest at a variable rate equal to the applicable Term SOFR for the then-current SOFR Interest Period plus 3.35%. The line of credit available to the Company under the Loan Agreement expires on October 28, 2022, or such date of the acceleration of the obligation pursuant to the Amendment, at which time all amounts borrowed, together with applicable interest, fees and other amounts owed by the Company shall be due and payable. The Company may extend the maturity date to a date that is three hundred and sixty-four (364) days after the then-effective maturity date, no more than two times upon (i) delivery of a written request therefor to Lender at least thirty (30) days, but no more than (60) days, prior to the maturity date then in effect; and (ii) receipt by the Lender of a certificate of the Company dated the date of such request.None.

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Item 6. Exhibits


Exhibit Number						Description





2.1						Agreement and Plan of Merger by and between Origin Bancorp, Inc. and BT Holdings, Inc. dated February 23, 2022 (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed February 24, 2022 (File No. 001-38487))

3.1						Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed April 28, 2020 (File No. 001-38487)).

3.2						Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed April 28, 2020 (File No. 001-38487)).

~~10.1~~						~~Origin Bancorp, Inc. 2021 Employee Stock Purchases Plan, incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed April 30, 2021 (File No. 001-38487).~~

31.1						Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).

31.2						Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1						Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101						The following financial information from Origin Bancorp, Inc. Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2021,~~March 31, 2022, is formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income, (iv) the Unaudited Consolidated Statements of Changes in Stockholders' Equity, (v) the Unaudited Consolidated Statements of Cash Flows, and (vi) the Condensed Notes to Unaudited Consolidated Financial Statements

101.INS						XBRL Instance Document

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						XBRL Taxonomy Extension Label Linkbase

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


						Origin Bancorp, Inc.


Date:	~~November 3, 2021~~May 4, 2022	By:	/s/ Drake Mills
			Drake Mills
			Chairman, President and Chief Executive Officer


Date:	~~November 3, 2021~~May 4, 2022	By:	/s/ Stephen H. Brolly
			Stephen H. Brolly
			Executive Vice President and Chief Financial Officer

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	Three Months Ended September 30, 2021
(Dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision(1)		Ending Balance
Loans secured by real estate:
Commercial real estate	$	16,282	$	—	$	4	$	(367)	$	15,919
Construction/land/land development	5,602		—		—		(593)		5,009
Residential real estate	9,059		—		64		(3,004)		6,119
Commercial and industrial	45,049		3,030		58		(216)		41,861
Mortgage warehouse lines of credit	560		—		—		(90)		470
Consumer	552		5		18		4		569
Total	$	77,104	$	3,035	$	144	$	(4,266)	$	69,947


	Three Months Ended September 30, 2020
(Dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision(1)		Ending Balance
Loans secured by real estate:
Commercial real estate	$	10,046	$	200	$	—	$	4,503	$	14,349
Construction/land/land development	6,860		—		1		1,589		8,450
Residential real estate	6,911		549		11		1,853		8,226
Commercial and industrial	45,281		1,517		480		4,519		48,763
Mortgage warehouse lines of credit	602		—		—		302		904
Consumer	768		27		6		204		951
Total	$	70,468	$	2,293	$	498	$	12,970	$	81,643



	Nine Months Ended September 30, 2021
(Dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision(1)		Ending Balance
Loans secured by real estate:
Commercial real estate	$	15,430	$	130	$	10	$	609	$	15,919
Construction/land/land development	8,191		—		—		(3,182)		5,009
Residential real estate	9,418		58		81		(3,322)		6,119
Commercial and industrial	51,857		8,830		352		(1,518)		41,861
Mortgage warehouse lines of credit	856		—		—		(386)		470
Consumer	918		54		36		(331)		569
Total	$	86,670	$	9,072	$	479	$	(8,130)	$	69,947

(1)The $8.1 million net benefit for credit losses on the consolidated statements of income includes a $8.1 million net loan loss benefit, a $19,000 provision for off-balance sheet commitments and a $6,000 provision benefit for held to maturity securities credit losses for the nine months ended September 30, 2021.


	Nine Months Ended September 30, 2020
(Dollars in thousands)	Beginning Balance		Impact of Adopting ASC 326		Charge-offs		Recoveries		Provision(1)		Ending Balance
Loans secured by real estate:
Commercial real estate	$	10,013	$	(5,052)	$	3,868	$	6	$	13,250	$	14,349
Construction/land/land development	3,711		1,141		—		1		3,597		8,450
Residential real estate	6,332		(2,526)		598		180		4,838		8,226
Commercial and industrial	16,960		7,296		5,770		736		29,541		48,763
Mortgage warehouse lines of credit	262		29		—		—		613		904
Consumer	242		360		69		13		405		951
Total	$	37,520	$	1,248	$	10,305	$	936	$	52,244	$	81,643

(1)The $53.6 million provision for credit losses on the consolidated statements of income includes a $52.2 million net loan loss provision, a $1.3 million provision for off-balance sheet commitments and a $48,000 provision for held to maturity securities credit losses for the nine months ended September 30, 2020.


	Payments Due by Period
(Dollars in thousands) September 30, 2021	Less than One Year		One-Three Years		Three-Five Years		Greater than Five Years		Total
FHLB advances	$	—	$	—	$	504	$	256,557	$	257,061
Time deposits	451,075		109,083		17,349		500		578,007
Subordinated debentures	—		—		—		160,826		160,826
Operating lease obligations	4,612		7,574		4,396		10,640		27,222
Overnight repurchase agreements with depositors	5,136		—		—		—		5,136
Limited partnership investments(1)	2,945		—		—		—		2,945
Low-income housing tax credits	2,393		199		308		406		3,306
Total contractual obligations	$	466,161	$	116,856	$	22,557	$	428,929	$	1,034,503