Q3 2025 Origin Bancorp Inc Earnings Call
Speaker #1: For your line is muted .
Speaker #3: Good morning , and welcome to the Origin Bancorp, Inc. third quarter earnings conference call . My name is Tom , and I'll be your overall coordinator .
Speaker #3: The format of the call includes prepared remarks from the company , followed by a question and answer session . All attendees will be on a listen only mode until the Q&A portion of the call .
Speaker #3: Please note this event is being recorded . I would now like to turn the conference call over to Chris Reigelman . Chris . You may proceed .
Speaker #4: Good morning and thank you for joining us today . We share our earnings press release yesterday afternoon , a copy of which is available on our website , along with the slide presentation that we refer to during this call .
Lance Hall: Good morning and thank you for joining us today. We issued our earnings press release yesterday afternoon, a copy of which is available on our website along with the slide presentation that we will refer to during this call. Please refer to page two of our slide presentation, which includes our safe harbor statements regarding forward-looking statements and the use of non-GAAP financial measures. For those joining by phone, please note the slide presentation is available on our website at www.ir.origin.bank. Please also note that our safe harbor statements are available on page seven of our earnings release filed with the SEC yesterday. All comments made during today's call are subject to safe harbor statements in our slide presentation and earnings release.
Speaker #4: Please refer to page two of our slide presentation , which includes our Safe Harbor statements . Regarding forward looking statements and the use of non-GAAP financial measures .
Speaker #4: For those joining by phone , please note the slide presentation is available on our website at . Please also note that our safe Harbor statements are available on our page seven of our earnings release filed with the SEC yesterday .
Speaker #4: All comments made during today's call are subject to Safe harbor statements , and our slide presentation and earnings release . I'm joined this morning by Origin Bancorp, Inc. chairman , president and CEO Drake Mills president and CEO of origin Bank .
Lance Hall: I'm joined this morning by Origin Bancorp Inc.'s Chairman, President and CEO Drake Mills, President and CEO of Origin Bank Lance Hall, our Chief Financial Officer Wally Wallace, Chief Risk Officer Jim Crotwell, our Chief Accounting Officer Steve Brawley, and our Chief Credit and Banking Officer Preston Moore. After the presentation, we'll be happy to address any questions you may have. Drake, the call is yours.
Speaker #4: Lance Hall , our Chief Financial Officer , Wally Wallace , Chief Risk officer , Jimmy Crotwell , our chief accounting officer , Steve Brawley .
Speaker #4: And our chief credit and banking officer , Preston Moore . After the presentation , we'll be happy to address any questions you may have .
Speaker #4: Drake , the call is yours .
Speaker #5: Thanks , Chris , and thanks for being with us this morning . Before we discuss our third quarter performance , I want to share my perspective on tricolor and the related charge off .
Drake Mills: Thanks Chris and thanks for being with us this morning. Before we discuss our third quarter performance, I want to share my perspective on Tricolor and the related charge-off. We had a 20-year relationship with Tricolor. During that time, Origin has grown into a dynamic company that strategically builds relationships and has a strong system of risk mitigation for Tricolor. Our systems and processes included audited financials, various loan covenants, monthly borrowing base certificates, and a third-party trust company as collateral custodian. However, even with the best practices of risk mitigation, losses can occur in the event of a customer fraud. As a leader, it's important to use an event like this as an opportunity to better your organization by diving deep into policies, processes, and portfolios to identify lessons learned. Our decision to charge off the entire Tricolor outstanding debt is extremely conservative.
Speaker #5: We had a 20 year relationship with tricolor during that time . Origin has grown into a dynamic company that strategically builds relationships and has a strong system of risk mitigation for tricolor .
Speaker #5: Our systems and processes included audited financials , various loan covenants , monthly borrowing , base certificates and a third party trust company as collateral .
Speaker #5: Custodian . However , even with the best practices of risk mitigation , losses can occur in the event of a customer fraud . As a leader , it's important to use an event like this as an opportunity to better your organization by diving deep into policies , processes and portfolios to identify lessons learned .
Speaker #5: Our decision to charge off the entire tricolor outstanding debt is extremely conservative . We do anticipate recoveries through a combination of no collections , insurance claims , and legal recourse .
Drake Mills: We do anticipate recoveries through a combination of note collections, insurance claims, and legal recourse. This isolated event does not define Origin. When I think of our long history of success, the depth of our management team, the momentum we have generated with Optimized Origin, and the unprecedented opportunities within our markets due to M&A-driven disruption, I am passionate and confident we will achieve our ultimate goal of being a top quartile performer. Now I'll turn it over to Lance and the team.
Speaker #5: This isolated event does not define origin . When I think of our long history of success , the depth of our management team , the momentum we have generated with optimized origin , and the unprecedented opportunities within our markets due to M&A driven disruption , I am passionate and confident we will achieve our ultimate goal of being a top quartile performer .
Speaker #5: Now I'll turn it over to Lance and the team .
Speaker #6: Thanks , Drake , and good morning . I'm extremely proud of how we've executed on Optimized Origin and the momentum that has been created throughout our markets .
Lance Hall: Thanks Drake and good morning. I'm extremely proud of how we've executed on Optimized Origin and the momentum that has been created throughout our market. We are ahead of pace on our stated plan and are creating real traction on our goal of being a top quartile ROA performer. Excluding notable items, our pre-tax pre-provision ROA increased 48 basis points to 1.63% for the third quarter of 2025 compared to 1.15% in the second quarter of 2024 when we began the planning stages of Optimized Origin. Over this same period, NIM has expanded 48 basis points. Total revenue excluding notable items is up 10% and non-interest expense excluding notable items is down 3%. We strongly believe the level of paydowns and payoffs that we've seen through the first three quarters of this year masks the high level of production we are experiencing.
Speaker #6: We are ahead of pace on our stated plan and are creating real traction on our goal of being a top-quartile ROA performer.
Speaker #6: Excluding notable items . Our pre-tax Pre-provision ROA increased 48 basis points to 1.63% for the third quarter of 2025 , compared to 1.15% in the second quarter of 2020 .
Speaker #6: Four . When we began the planning stages of optimized origin . Over this same period , Knilm has expanded 48 basis points . Total revenue , excluding notable items , is up 10% and noninterest expense excluding notable items is down 3% .
Speaker #6: We strongly believe the level of paydowns and payoffs that we've seen through the first three quarters of this year masks the high level of production we are experiencing .
Speaker #6: We continue to see positive trends in loan production , with loan originations up 19.2% year to date compared to the same period last year .
Lance Hall: We continue to see positive trends in loan production with loan originations up 19.2% year to date compared to the same period last year. At a more granular level, business loan production under $2.5 million across our footprint is up 22.9% during that same period. Through Optimized Origin and through insight into data gleaned from our banker profitability reports, our bankers have heightened their focus on generating ROA lift through relationship expansion. This is highlighted by treasury management fee income increasing 7% year over year and loan and swap fees up 62% during the same period. We've seen a strong build on the deposit side in Q3 as non-interest-bearing deposits are up $158.6 million or 8.6% quarter over quarter.
Speaker #6: At a more granular level , business loan production under $2.5 million across our footprint is up 22.9% during that same period . Through optimize and through insight into data gleaned from our banker , profitability reports , our bankers have heightened their focus on generating ROA lift through relationship expansion .
Speaker #6: This is highlighted by Treasury management fee income increasing 7% year over year , and loan and swap fees up 62% during the same period .
Speaker #6: We've seen a strong build on the deposit side in Q3, as noninterest-bearing deposits are up $158.6 million, or 8.6% quarter over quarter.
Speaker #6: While we've come a long way with optimized Origin, I'm very optimistic about what we can continue to accomplish as we close out the remainder of the year and look towards 2026.
Lance Hall: While we've come a long way with Optimized Origin, I'm very optimistic about what we can continue to accomplish as we close out the remainder of the year and look towards 2026. The hires we have made in our DFW markets in addition to our Southeast team reaching profitability gives me great confidence in our ability to drive long-term value in the most dynamic markets in the country. Now I'll turn it over to Jim. Thanks Lance.
Speaker #6: The hires we have made in our DFW markets, in addition to our Southeast team reaching profitability, give me great confidence in our ability to drive long-term value in the most dynamic markets in the country.
Speaker #6: Now I'll turn it over to Jim . Thanks , Lance . As mentioned previously , an early September , we became aware of allegations of fraud related to tricolor .
Jimmy Crotwell: As Drake mentioned previously, in early September we became aware of allegations of fraud related to Tricolor. As you are aware, Tricolor filed Chapter 7 bankruptcy last month. As of quarter end, our credit relationship with Tricolor totaled $30.1 million, including $1.5 million in unfunded letters of credit. We are working with a successor servicer to begin the process of not only servicing the notes but also working closely with the bankruptcy trustee to identify duplicative and any potential fraudulent notes. Given fraud allegations and the inability to clearly establish the level of unduplicated notes supporting our loans to Tricolor, we elected to charge off the entirety of the outstanding Tricolor debt totaling $28.4 million and to fully reserve the $1.5 million in unfunded letters of credit.
Speaker #6: As you are aware , tricolor filed chapter seven bankruptcy last month after quarter end . Our credit relationship with Tricolore totaled $30.1 million , including $1.5 million in unfunded letters of credit .
Speaker #6: We are working with the successor servicer to begin the process of not only servicing the notes , but also working closely with the bankruptcy trustee to identify duplicative and any potential fraudulent notes given fraud allegations in the inability to clearly establish the level of Unduplicated notes supporting our loans to tricolor .
Speaker #6: We elected to charge off the entirety of the outstanding tricolor debt totaling $28.4 million , and to fully reserve the $1.5 million in unfunded letters of credit .
Speaker #6: While we do anticipate there will be some level of recovery from the notes pledged , we are unable to determine the magnitude of the suspected fraud , with 100% certainty at this time .
Jimmy Crotwell: While we do anticipate there will be some level of recovery from the notes pledged, we are unable to determine the magnitude of the suspected fraud with 100% certainty at this time. We will aggressively pursue all available remedies to protect the bank's interest and maximize recoveries in this matter. As such, net charge-offs for Q3 came in at $31.4 million with $3 million in net charge-offs outside of Tricolor. On an annualized basis excluding Tricolor, net charge-offs came in at 0.16% for the quarter. Loans past due 30 to 89 days and still accruing reduced from 0.16% last quarter to 0.10% as of 9:30. Classified loans increased $10.7 million and as a percentage of total loans increased to 1.84% at quarter end compared to 1.66% as of June 30, while non-performing assets increased $1.6 million to 1.18% at quarter end compared to 1.14% as of the prior quarter.
Speaker #6: We will aggressively pursue all available remedies to protect the bank's interest and maximize recoveries in this matter . As such , net charge offs for Q3 came in at $31.4 million , with $3 million in net charge offs outside of tricolor on an annualized basis , excluding tricolor , net charge offs came in at 0.16% for the quarter .
Speaker #6: Loans past due 30 to 89 days and still accruing reduced from 0.16% last quarter to 0.10% as of 930 . Classified loans increased $10.7 million , and as a percentage of total loans increased to 1.84% at quarter end , compared to 1.66% as of June 30th .
Speaker #6: While non-performing assets increased $1.6 million to 1.18% at quarter end , compared to 1.14% as of the prior quarter . For the quarter , our allowance for credit losses increased from 1.29% to 1.35% , net of mortgage warehouse .
Jimmy Crotwell: For the quarter, our allowance for credit losses increased from 1.29% to 1.35% net of mortgage warehouse. We did not experience any significant changes in our CECL model assumptions for the quarter and the increase was primarily driven by increases in the individually evaluated portion of the reserve associated with our non-accruals. The level of our reserve at 1.35% net of mortgage warehouse compares to a level of 1.31% at year end 2023. Lastly, as to total ADC and CRE, we continue to have ample capacity to meet the needs of our clients and grow this segment of our portfolio, reflecting funding to total risk-based capital of 47% for ADC and 235% for CRE. I'll now turn it over to Wally.
Speaker #6: We did not experience any significant changes in our Cecil model assumptions for the quarter , and the increase was primarily driven by increases in the individually evaluated portion of the reserve associated with our Non-accruals .
Speaker #6: The level of our reserve at 1.35% net of mortgage warehouse compares to a level of 1.31% at year end , 2023 . Lastly , as the total ADC and CRE , we continue to have ample capacity to meet the needs of our clients and grow this segment of our portfolio , reflecting funding to total risk based capital of 47% for ADC .
Speaker #6: And 235% for CRE . I'll now turn it over to Wally .
Speaker #7: Thanks , Jim , and good morning , everyone . Turning to the financial highlights in Q3 , we reported diluted earnings per share of $0.27 .
William J. Wallace IV: Thanks Jim and good morning everyone. Turning to the financial highlights in Q3, we reported diluted earnings per share of $0.27. As you can see on Slide 26, the combined financial impact of notable items during the quarter equated to a net expense of $23.3 million, equivalent to $0.59 in EPS pressure. On a pre-tax pre-provision basis, we reported $47.8 million, excluding $7.9 million in net benefits from notable items in Q3 and $15.6 million net pressures in Q2. Pre-tax pre-provision earnings increased to $39.9 million from $37.1 million. On the balance sheet side, loans decreased 1.9% sequentially and decreased 0.6% when excluding mortgage warehouse. Total deposits increased 2.6% during the quarter and 2.9% excluding brokered. Importantly, non-interest-bearing deposits grew 8.6% sequentially, improving to 24% of total deposits. Both total and non-interest-bearing deposits also increased on an average basis, up 0.9% and 1.1% respectively.
Speaker #7: As you can see on slide 26 , the combined financial impact of notable items during the quarter equated to a net expense of $23.3 million , equivalent to $0.59 in EPs pressure on a pre-tax pre-provision basis .
Speaker #7: We reported $47.8 million , excluding 7.9 million in net benefits from notable items in Q3 and $15.6 million of net pressures in Q2 .
Speaker #7: Pre-tax pre-provision earnings increased to $39.9 million from 37.1 million . On the balance sheet side loans decreased 1.9% sequentially and decreased 0.6% when excluding mortgage warehouse .
Speaker #7: Total deposits increased 2.6% during the quarter , and 2.9% excluding brokered . Importantly , non-interest bearing deposits grew 8.6% sequentially , improving to 24% of total deposits .
Speaker #7: Both total and noninterest bearing deposits also increased on an average basis , up 0.9% and 1.1% , respectively . As Lance mentioned , we are excited about the momentum we are seeing from our relationship managers across our markets , and we remain optimistic that loan production is accelerating .
William J. Wallace IV: As Lance mentioned, we are excited about the momentum we are seeing from our relationship managers across our markets, and we remain optimistic that loan production is accelerating, though pay downs have remained a near-term headwind to reported loan balances. While we currently are anticipating that loan growth will return in Q4, the continued declines in Q3 lead us to reduce our loan growth guidance from up low single digits to essentially flat for the year. Given the positive momentum we have seen on the deposit side of the balance sheet and the typically strong seasonal inflows in Q4, we are maintaining our deposit growth guidance of low single digits for the year. Turning to the income statement, net interest margin expanded 4 basis points during the quarter to 3.65%, in line with our expectations.
Speaker #7: Though Paydowns have remained a near-term headwind to reported loan balances . While we currently are anticipating that loan growth will return in Q4 , the continued declines in Q3 lead us to reduce our loan growth guidance from up low single digits to essentially flat for the year .
Speaker #7: Given the positive momentum we have seen on the deposit side of the balance sheet and the typically strong seasonal inflows in Q4 . We are maintaining our deposit growth guidance of low single digits for the year .
Speaker #7: Turning to the income statement , net interest margin expanded four basis points during the 2:45 .65 percent , in line with our expectations driving most of this expansion was increased interest income from our securities portfolio in large part due to the portfolio optimization trade executed during Q2 .
William J. Wallace IV: Driving most of this expansion was increased interest income from our securities portfolio, in large part due to the portfolio optimization trade executed during Q2. Moving forward, as you can see in our outlook on Slide 4 and due primarily to the expectation of an additional Fed rate cut, we tightened our margin guidance range to 3.65% in Q4 2025 and 3.60% for the full year, plus or minus 3 basis points. Our modeling now considers 25 basis point rate cuts in each of October and December as opposed to only December in our prior guide. Shifting to non-interest income, we reported $26.1 million in Q3, excluding $9 million in net benefits from notable items in Q3 and $14.6 million in net pressures in Q2.
Speaker #7: Moving forward , as you can see in our outlook on slide four and due primarily to the expectation of an additional fed rate cut , we tightened our margin guidance range to 3.65% in Q4 25 and 3.60% for the full year , plus or minus three basis points .
Speaker #7: Our modeling now considers 25 basis point rate cuts in each of October and December , as opposed to only December in our prior guide .
Speaker #7: Shifting to non-interest income , we reported 26.1 million in Q3 , excluding 9 million in net benefits from notable items in Q3 and 14.6 million in net pressures in Q2 .
Speaker #7: Noninterest income increased to $17.1 million from 16 million in Q2 , due in large part to the addition of 1.2 million of equity method investment income from increasing our ownership in Argent Financial to over 20% .
William J. Wallace IV: Non-interest income increased to $17.1 million from $16 million in Q2 due in large part to the addition of $1.2 million of equity method investment income from increasing our ownership in Argent Financial to over 20%. Our non-interest expense was basically flat at $62 million in Q3. Excluding $1 million of notable items in both Q3 and Q2, non-interest expense increased slightly to $61.1 million from $61.0 million in Q2. In line with our expectations, we are maintaining our guidance for Q4 and lowering our guidance slightly for the full year to down low single digits from flat to down slightly. Lastly, turning to capital, we note that Q3 tangible book value grew sequentially to $33.95, the 12th consecutive quarter of growth, and the TCE ratio ended the quarter at 10.9%, flat from Q2 as shown on slide 25.
Speaker #7: Our non-interest expense was basically flat at $62 million in Q3 , excluding 1 million of notable items in both Q3 and Q2 . Non-interest expense increased slightly to 61.1 million from 61.0 million in Q2 , in line with our expectations , we are maintaining our guidance for Q4 and lowering our guidance slightly for the full year to down low single digits from flat to down slightly .
Speaker #7: Lastly , turning to capital , we note that Q3 tangible book value grew sequentially to $33.95 . The 12th consecutive quarter of growth and the TCE ratio ended the quarter at 10.9% , flat from Q2 .
Speaker #7: As shown on slide 25 , all of our regulatory capital levels remain above levels , considered well capitalized . As such , we remain confident that we have the capital flexibility to take advantage of any capital deployment opportunities to drive value for our shareholders .
William J. Wallace IV: All of our regulatory capital levels remain above levels considered well capitalized. As such, we remain confident that we have the capital flexibility to take advantage of any capital deployment opportunities to drive value for our shareholders. In fact, during the quarter we repurchased 265,248 shares at an average price of $35.85. Furthermore, we anticipate the full redemption of the remaining $74 million of subordinated debt on our balance sheet on November 1, which will allow us to save $3 million in net annual increased interest expense. With that, I will now turn it back to Drake.
Speaker #7: In fact , during the quarter , we repurchased 265,248 shares at an average price of $35.85 . Furthermore , we anticipate the full redemption of the remaining $74 million of subordinated debt on our balance sheet .
Speaker #7: On November 1st , which will allow us to save $3 million in net annual increased interest expense . With that , I will now turn it back to Drake .
Speaker #5: Thanks , Wally . As you have heard throughout this call , we have a great deal of momentum heading into the fourth quarter and next year .
Drake Mills: Thanks, Wally. As you have heard throughout this call, we have a great deal of momentum heading into the fourth quarter and next year. I referenced in my opening remarks about the opportunities, particularly in our Texas markets associated with disruption from recent M&A. This year alone there have been 15 bank acquisitions in Texas with selling banks totaling $37 billion in deposits. I firmly believe that we have the infrastructure and bankers to win new business and capitalize on this opportunity. Thank you for being on the call today, and thanks to our employees who remain committed to our strategic vision of optimizing Origin. We'll open up for questions.
Speaker #5: I referenced in my opening remarks about the opportunities, particularly in our Texas markets, associated with disruption from recent M&A. This year alone, there have been 15 bank acquisitions in Texas, with selling banks totaling $37 billion in deposits.
Speaker #5: I firmly believe that we have the infrastructure and bankers to win new business and capitalize on this opportunity . Thank you for being on the call today , and thanks to our employees who remain committed to our strategic vision of optimizing origin .
Speaker #5: We'll open up for questions.
Speaker #3: Thank you again . Team . Ladies and gentlemen , at this time , we will conduct the question and answer session . If you'd like to ask a question , please press Star one on your telephone keypad to enter the queue .
Operator: Thank you again, team. Ladies and gentlemen, at this time we will conduct the question and answer session. If you'd like to ask a question, please press star one on your telephone keypad to enter the queue. If you've joined via web, please press the raise hand icon on the right side of your screen. Again, that's star one on your telephone keypad to enter the queue or the raise hand icon on the right side of your screen. Our first question comes from Matt with Stevens. Matt, your line is open, you may proceed. Thanks. Good morning, everybody.
Speaker #3: Or if you've joined via web, please press the raise hand icon on the right side of your screen. Again, that's star one on your telephone keypad to enter the queue or the raise hand icon on the right side of your screen.
Speaker #3: Our first question comes from Matt with Stephens . Matt , your line is open . You may proceed .
Speaker #8: Thanks . Good morning everybody .
Speaker #5: Good morning Matt .
Drake Mills: Good morning, Matt.
Speaker #8: I want to dig a little bit more on credit . And can you just talk about your NFI exposure about what this does include ?
Operator: Want to dig a little bit more on credit? Can you just talk about your NDFI exposure, about what this does include, maybe what it does not include. Secondly, any more as you scrub the portfolio, anything you want to disclose as far as exposure to other auto lending or subprime credits that would be of interest. Thank you, Matt.
Speaker #8: Maybe what it does not include and then secondly , any more , as you scrub the portfolio , anything you want to disclose as far as exposure to , you know , other auto lending or subprime credits that would that would be of interest .
Speaker #8: Thank you .
Speaker #6: Matt . Good morning . It's Jim .
Jimmy Crotwell: Good morning, it's Jim.
Speaker #8: Good morning .
Operator: Good morning.
Speaker #6: I'll start start with a little bit of recap color on subprime and then kind of move through some of the questions you asked .
Jimmy Crotwell: I'll start with a little bit of recap color on subprime and then kind of move through some of the questions you asked. Our subprime portfolio at the end of the quarter was about $92 million. That represented about 1.2% of total loans. The breakdown of that would be about 68% would be residential, about 15% RV, and about 15% auto. Moving to your question about subprime auto reflective, you kind of did the math on that. It's only 0.2% of our entire portfolio and it consists of two relationships, both of which are performing. On both of those, as the sole lender in both of those relationships, some of the issues that we are experiencing with Tricolor, the double pledging of collateral, is really not an issue in the situation of these two relationships.
Speaker #6: Our subprime portfolio at the end of the quarter was about $92 million . That represented about 1.2% of total loans . The breakdown of that would be about 68% would be residential .
Speaker #6: About 15% RV , and about 15% auto . And then kind of moving to your question about subprime auto reflect , if you kind of did the math on that , it's only 2/10 of 1% of our entire portfolio , and it consists of two relationships , both of which are performing , you know , and on both of those , as a sole lender in both of those relationships .
Speaker #6: Some of the issues that we are experiencing , tricolor , the double pledging of collateral , is really not an issue . And the situation of these two relationships moving to the total never portfolio , which excluding mortgage warehouse are NFI exposure is approximately 5% of total loans , 61% of that is real estate related , with 15% related to capital .
Jimmy Crotwell: Moving to the total NDFI portfolio, which is excluding mortgage warehouse, our NDFI exposure is approximately 5% of total loans. 61% of that is real estate related, with 15% related to capital call lines of credit. The remaining 25% is spread across about six different categories. We've done a deep dive into this entire segment of the portfolio and these companies have experienced management teams. The underlying loans have good income and cash flow and are long-term relationships with the bank. We have no past dues and no non-performing loans in the entirety of our NDFI segment.
Speaker #6: Call lines of credit . And the remaining 25% is spread across about six different categories . We've done a deep dive into this entire segment of the portfolio , and these companies have experienced management teams .
Speaker #6: The underlying loans have good income and cash flow , and our long term relationships of the bank . And we have no past dues and no performing loans in the entirety of our Nephi segment .
Speaker #8: Okay . Perfect . Thanks for the disclosures there . And then I guess , Drake , I heard you mention the tricolor and , you know , the fraud allegations .
Operator: Okay, perfect. Thanks for the disclosures there. I guess, Drake, I heard you mention the Tricolor and the fraud allegations. Can you just walk us through any insurance that could offset some of these charge-offs? What does that look like compared to the charge-offs that we just saw? What are some thoughts on timelines around that insurance?
Speaker #8: Can you just walk us through any insurance that could offset some of these ? Charge offs ? And what does that look like compared to the charge offs that we just saw ?
Speaker #8: And what are some thoughts on on timelines around that insurance .
Speaker #5: Yeah . You know , Matt , as I said , we are aggressively pursuing recovery on these loans . We believe in time that we will see some degree of recovery .
Drake Mills: Yeah. You know, Matt, as I said, we are aggressively pursuing recovery on these loans. We believe in time that we will see some degree of recovery. There are two right now. There are too many variables at present for us to sit here and quantify how much that will be and when that will occur. That is why we took the charge the way we did. At this point we feel very good that we have these avenues of recovery. As I've told investors and other relationships I have, I am going to be working diligently to ensure that we have recovery. It is unclear. That is why we took the charge the way we did. We feel confident that we will have some recovery. This just, you know, in this Chapter 7 and going through bankruptcy and understanding the timing of this is extremely difficult to quantify anything.
Speaker #5: But there are two right now . There's too many variables at present for us to sit here and quantify how much that will be and when that will occur .
Speaker #5: That's why we took the charge the way we did . It's it's at this point . We feel very good that we have these avenues of recovery .
Speaker #5: And as I've told investors and other relationships I have , I am going to be working diligently to ensure that we have recovery .
Speaker #5: But it's it's unclear . That's why we took the charge the way we did . We feel confident that we will have some recovery .
Speaker #5: It's just , you know , in this chapter seven and going through bankruptcy and understanding the timing of this is extremely difficult to quantify .
Speaker #5: Anything .
Speaker #8: Okay . Appreciate that . And then if I could just shift gears over to the loan growth commentary . I think the updated guidance now calls for flat balances in 2025 year over year .
Operator: Okay, appreciate that. If I could just shift gears over to the loan growth commentary. I think the updated guidance now calls for flat balances in 2025 year over year. If we go back to January earlier this year, I think the guidance was mid to high single digits, and that was kind of walked down each successive quarter since then. Origin is certainly not alone in seeing some of the slower loan growth trends this year, but it does feel more acute at Origin than maybe some of your peers. Can we just take a step back and remind us about your loan growth views throughout the year and how that evolves, and then we'd love to hear any kind of preliminary thoughts you may have on loan growth in 2026.
Speaker #8: If we go back to January earlier this year , I think the guidance was to high single digits . And that was kind of walked down each successive quarter since then .
Speaker #8: And certainly not alone in seeing some of the slower loan growth trends this year. But it does feel more acute at origin than maybe some of your peers.
Speaker #8: So can we just take a step back and remind us about your loan growth views throughout the year , and how that evolved ?
Speaker #8: And then we'd love to hear any kind of preliminary thoughts you may have on on loan growth in 2026 .
Speaker #6: Yeah . Hey , good morning . Matt . This Lance be glad to go through it . I'm actually really bullish and optimistic about where loan growth is going in Q4 .
Lance Hall: Yeah. Hey, good morning, Matt. It's Lance. Be glad to go through it. I'm actually really bullish and optimistic about where loan growth is going in Q4 and next year, but we'll kind of step back and understand why I used the word earlier that I feel like our extraordinary origination and production has really been masked by pay downs and payoffs. If you think about that, we have actually been averaging the last four quarters, $685 million a quarter in pay downs and payoffs, which are extraordinarily high historically for us. A combination of that is, you know, slowing things down purposefully to stay under $10 billion has led to a little less than $400 million in reduction in our commercial construction and development portfolio. That takes some time to rebuild that back up.
Speaker #6: And next year. But we'll kind of step back and understand why I used the word earlier, that I feel like our extraordinary origination and production has really been masked by paydowns and payoffs.
Speaker #6: If you think about that , we have actually been averaging the last four quarters , $685 million a quarter in Paydowns and payoffs , which are extraordinarily high historically for us .
Speaker #6: You know , combination of that is , you know , slowing things down purposefully to stay under Tenby has led to a little less than $400 million in reduction in our commercial construction and development portfolio .
Speaker #6: So that takes some time to rebuild that back up . So that is , you know , a big part of our . Originations for this year is because we're getting back active and aggressive in that space .
Lance Hall: That is a big part of our originations for this year, is kind of getting back active and aggressive in that space. That is one of the reasons we're very bullish on the fundings that will come from that next year. Just to give you a little color, that $685 million per quarter the last four quarters is compared to a little over $500 million, which would be sort of a typical quarter for us. Part of that is tariffs, part of that is us pushing out credits that Jim has talked about the last few quarters. I think that has sort of covered up what has been pretty extraordinary. On the origination side, our originations for the first nine months of this year are up almost 20% compared to the nine months of the year previously. Strong pipeline for Q4.
Speaker #6: And that's one of the reasons we're very bullish on the fundings that will come from that next year . But just kind of give you a little color , that 685 million per quarter , the last four quarters is , you know , compared to a little over 500 million , which would be sort of a typical quarter for us .
Speaker #6: And so , you know , you know , part of that is tariffs , part of that is , you know , us pushing out credits that Jim has talked about the last few quarters .
Speaker #6: But again , I think that is sort of covered up . You know , what has been pretty extraordinary on the origination side , our originations for the first nine months of this year are up almost 20% compared to the nine months of the year previously .
Speaker #6: Strong pipeline for Q4 . I think we're expecting about 2% growth x warehouse for Q4 . So if you annualize that , you know , kind of at 8% on an annualized basis , you know , I think our guidance for 2026 would continue to be mid to high single digits , but we're seeing really positive momentum kind of throughout each of our markets .
Lance Hall: I think we're expecting about 2% growth ex warehouse for Q4. Even if you annualize that kind of at 8% on an annualized basis, I think our guidance for 2026 would continue to be mid to high single digits. We're seeing really positive momentum throughout each of our markets. Texas is starting to come on strong again. Louisiana has been really strong this year. We've had about 5.5% loan and deposit growth in our Louisiana market. Really like seeing what we're seeing out of Nate and the Southeast team. Good year out of Mississippi. We are well positioned right now. I'm sure later we'll talk about Optimized Origin and kind of see how that's translating into NIM expansion and ROA expansion. The engine is running really well now. It's just having to kind of get past this unprecedented level of pay downs and payoffs.
Speaker #6: Texas is starting to come on strong again . Louisiana has been really strong this year . We've had about 5.5% loan and deposit growth in our in our Louisiana market .
Speaker #6: Really like seeing what we're seeing on Nate in the southeast team Goodyear out of Mississippi . So we are we are well positioned right now .
Speaker #6: And then I'm sure later we'll talk about optimize and kind of say how that's translating into Nim expansion and ROA expansion . And so , you know , the engine is running really well now .
Speaker #6: It's just having to kind of get past this unprecedented level of paydowns and payoffs.
Speaker #8: Okay . Appreciate that . Lance . Thanks for the commentary . I'll step back .
Operator: Okay, appreciate that, Lance. Thanks for the commentary, and I'll step back.
Speaker #5: Thank you . Matt .
Drake Mills: Thank you, Matt.
Speaker #3: Thank you again , Matt . Our next question comes from Woody with KBW . Woody , your line is open . You may proceed .
Operator: Thank you again, Matt. Our next question comes from Woody with KBW. Woody, your line is open. You may proceed.
Speaker #9: Hey , good morning guys .
Drake Mills: Hey, good morning, guys. Morning.
Speaker #5: Good morning .
Speaker #9: Woody wanted to start , I think in the opening comments you mentioned sort of in wake of this event , you'll be evaluating sort of the the processes and systems in place to avoid incidents like this in the future .
Lance Hall: Woody wanted to start, I think.
Drake Mills: The opening comments you mentioned, sort of in wake of this event, you'll be evaluating the processes and systems in place to avoid incidents like this in the future. Do you expect there to be any impact to the expense run rate if there's additional investments that need to be made? At this point, we don't see any additional impact to or an impact to expenses. We are going to be utilizing a move with one of our executives to come in and create a new group that is internal at this point to really focus on credit management and credit audit process. Looking at the components, as I think about Tricolor, and you can sit here and say what lessons were learned.
Speaker #9: Do you expect there to be any impact to the expense run rate ? If there is additional investments that need to be made ?
Speaker #5: You know , at this point , we don't see any additional impact to or an impact to to expenses . We are going to be utilizing some actually a move with one of our executives to come in and create a new group that that is internal at this point to really focus on credit management and credit audit process .
Speaker #5: You know , looking at the components and , you know , as I think about tree color and , and you can sit here and say what lessons were learned .
Speaker #5: This is a process that we're undergoing right now . And we've really identified several enhancements that we believe will mitigate risk going forward , as we better detect fraud .
Drake Mills: This is a process that we're undergoing right now, and we've really identified several enhancements that we believe will mitigate risk going forward as we better detect fraud. As an example, we conducted a deep dive, as Jim Crotwell said, and have gone through a comprehensive review of the segment in our portfolio. We're enhancing our processes, controls for monitoring and testing our collateral. Outside of that, we're expanding the role, as I said, of this executive who will build out a team of internal resources to provide additional oversight and streamline collateral protection, monitoring, and documentation. I don't see that creating significant or really any additional expense. Got it.
Speaker #5: As an example, we're conducting a deep dive, as Jim said, and have gone through a comprehensive review of the segment in our portfolio.
Speaker #5: We're enhancing our processes , controls for monitoring and testing our collateral . But outside of that , we're expanding the role , as I said at this executive who will build out a team of internal resources to provide additional oversight and streamline collateral protection , monitoring and documentation .
Speaker #5: So, I don't see that creating significant or really any additional expense.
Speaker #9: Got it. And then, so you've essentially charged off the full exposure to Tricor. Is there any indirect exposure to the company, like personal loans made to Mr. Chew or any referrals from insiders in the business?
Lance Hall: And then.
Drake Mills: You've essentially charged off the full exposure to Tricolor. Is there any indirect exposure to the company, like personal loans made to Mr. Chu or any referrals from insiders in the business? We can't necessarily speak to any specific customer information. I feel very strongly that all exposure in our portfolio has been properly identified and appropriately accounted for. We do have approximately $500,000 mortgage with one of the executives. That's about a 50% LTV and performing. Outside of that, we disclosed everything but feel very confident that we've addressed any type of exposure. Got it. That's helpful. I guess just sort of excluding the impact of Tricolor, just overall thoughts on credit. Were there any trends to note in criticized or classifieds? I'm going to let Preston.
Speaker #5: Yeah , we you know , while we can't necessarily speak to any specific customer information , I feel very strongly that all exposure in our portfolio has been properly identified and appropriately accounted for .
Speaker #5: We do have a approximately $500,000 mortgage with one of the executives that that's about a 50% LTV , and and performing outside of that , we've disclosed everything but feel very confident in that .
Speaker #5: We've addressed any type of exposure .
Speaker #9: Got it . That's helpful . And then I guess just sort of excluding the impact of Tricor just overall thoughts on credit , were there any trends to note and , and criticize your classifieds ?
Speaker #5: Yeah , we'll let Preston Preston and his team has worked diligently through this process to really be able to recap where we are with credit and how we feel .
Drake Mills: Preston and his team have worked diligently through this process to really be able to recap where we are with credit and how we feel.
Speaker #5: So , Preston .
Speaker #10: Yes , good morning Woody . Clearly we feel like the tricolour situation was an isolated and one off event for origin Bank , but in terms of credit trends , to get to your question , you know , in my opinion , we saw a normal cycle movement of credits , which in my experience can be lumpy .
Lance Hall: Yes, good morning Woody. Clearly we feel like the Tricolor situation was an isolated and one-off event for Origin Bank. In terms of credit trends, to get to your question, in my opinion we saw a normal cycle movement of credits which in my experience can be lumpy. Certainly we saw an increase in classified loans, non-performing loans, charge-offs, and past dues in the quarter. The increase in classified loans and non-performing loans was part of our expected credit migration for the quarter. With respect, looking at charge-offs, clearly we had very elevated charge-off with Tricolor. If you exclude that, net charge-offs would have been 16 basis points for the quarter, which is very much in line with our past experiences.
Speaker #10: Certainly we saw an increase in classified loans , nonperforming loans , charge offs and past dues in the quarter . The increase in classified loans and non-performing loans was part of our expected credit migration for the quarter .
Speaker #10: With respect , you know , looking at charge offs , clearly we had very elevated charge off with tricolor . But if you exclude that net charge offs would have been 16 basis points for the quarter , which is very much in line with our past experiences .
Speaker #10: And then finally, why total past due loans rose moderately in the quarter, past due 30 to 89 days, and still accruing loans declined from 16 basis points to 9.45 basis points into the quarter.
Lance Hall: Finally, while total past due loans rose modestly in the quarter, past due 30 to 89 days and still accruing loans declined from 16 basis points last quarter to 10 basis points at the end of the quarter. I just would say bottom line, we do not see signs of credit deterioration in our loan portfolio.
Speaker #10: And I just would say bottom line , we do not see signs of credit deterioration in our loan portfolio .
Speaker #9: All right . I really appreciate the detail . Thanks for taking my questions .
Drake Mills: All right, I really appreciate the detail. Thanks for taking my questions. Thank you, Woody.
Speaker #5: Thank you . Woody .
Speaker #3: Thank you again , Woody . Ladies and gentlemen , as a reminder , if you'd like to ask a question , please press star One on your telephone keypad to enter the queue .
Operator: Thank you again, Woody. Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press Star one on your telephone keypad to enter the queue. If you joined via web, please press the raise hand icon on the right side of your Tier Roadshow screen. Our next question comes from Evan with Raymond James. Evan, your line is open. You may proceed.
Speaker #3: Or , if you've joined via web , please press the raise hand icon on the right side of your screen . Our next question comes from Evan with Raymond James .
Speaker #3: Evan, your line is open. You may proceed.
Speaker #11: Good morning. Thank you for taking my questions. I know it's been a busy year with Optimized Origin. You've added new benefits to the project each quarter.
Lance Hall: Morning. Thank you for taking my questions. I know it's been a busy year with Optimized Origin. You've added new benefits to the project each quarter. You're staying under $10 billion at year end. As we look towards 2026, can we expect that the heavy lifting on Optimized Origin is behind us and will there be more balance towards balance sheet growth? Hey, Evan, this is Lance. Thanks. Good morning. We have a tremendous amount of opportunity still in front of us around Optimized Origin. Drake jokingly said we're in the top of the fourth inning when it comes to opportunities. Yes, we've done a lot of heavy lift early and you think about the tremendous progress we've made. We commented on some of this earlier. Optimize was basically crafted in Q2 of 2024.
Speaker #11: You're staying under $10 billion at year end . But as we look towards 2026 , can we expect that the heavy lifting on optimized origin is behind us ?
Speaker #11: And is there ? Will there be more balance towards balance sheet growth ?
Speaker #6: Hey Evan , this Lance , thanks . Good morning . We have a tremendous amount of opportunity still in front of us around optimized origin .
Speaker #6: I think Drake jokingly said , we're in the top of the fourth inning when it comes to opportunities . So yes , we've done a lot of heavy lift early and you think about the tremendous progress we've made and we commented on some of this earlier .
Speaker #6: You know , optimize was basically crafted in two Q of 24 . And so if you look at that period of time from two q 24 to now , as we noted earlier , ROA is up 48 Bips Nims up 48 Bips Revenue's up about 10% .
Lance Hall: If you look at that period of time from Q2 2024 to now, as we noted earlier, ROA's up 48 bps, NIM's up 48 bps, revenues up about 10%, expenses are down about 3%. We've executed on what we said we were going to do with Argent Financial, which is a meaningful lift for us. We recreated our mortgage business. We actually had positive contribution income out of our mortgage business this month for the first time in years. Our Southeast market hit profitability last quarter, which is a great trend for us. We're doing a lot of really cool stuff with data. The use, and we've talked about this in the past, of our Banker profitability report. Since we started Optimized Origin, the ROA of our banker portfolios is up 32 bps on average.
Speaker #6: Expenses are down about three . We've executed on what we said we were going to do with Argent Financial , which is which is a meaningful lift for us .
Speaker #6: We've recreated our mortgage business. We actually had positive contribution income from our mortgage business this month for the first time in years. Our Southeast market hit profitability.
Speaker #6: Last quarter , which is a great trend for us . We're doing a lot of really cool stuff with data . The use and we've talked about this in the past of our banker profitability report since we started Optimize the ROA of our banker portfolios is up 32 bips on average .
Speaker #6: And that's really through the identification understanding of where our revenues are created , where our profits are created . But man , just everything seems to be genuine in a positive way from treasury management to fee revenue .
Lance Hall: That's really through the identification and understanding of where our revenues are created, where our profits are created. Everything seems to be going in a positive way, from treasury management to fee revenue. For us, Optimized Origin is a continuous process. There's not a stopping point to this for us. The way that we're continuing to use a third party benchmarking company, we have actually created an internal group that we call Performance Optimization Partners. They are digging into process improvement, revenue enhancement, expense controls. The insights that we're getting from that group is setting what's going to be a pretty dynamic strategic planning and budget session for us here in the next two weeks. From that I would expect continual projects that we'll be announcing on Optimized Origin. That's really going to continue to transform this company as we evolve this into a top tier ROA producer.
Speaker #6: But for us , it's optimizes a continuous process . There's not a stopping point to this for us . So , you know , the way that we're continuing to use third party benchmarking company , we have actually created an internal group that we call performance optimization partners .
Speaker #6: They are digging into process improvement , revenue enhancement , expense controls , and the insights that we're getting from that group is setting what's going to be a pretty dynamic , strategic planning .
Speaker #6: And budget session for us is here in the next two weeks . And so , you know , from that , I would expect continual projects that we'll be announcing on optimize that's really going to continue to transform this company as we evolve this into a top tier ROA producer .
Speaker #11: Great , great . That's helpful . And then I just had another question on capital . So you mentioned the buybacks this quarter .
Lance Hall: Great, great, that's helpful. I just had another question on capital. You mentioned the buybacks this quarter and then I think the redemption of, I think you said $74 million in subordinated debt in the fourth quarter. As we saw most capital ratios tick up, just kind of wondering what your priorities are on capital deployment at this point.
Speaker #11: And then I think the redemption of I think you said 74 million in sub debt in the fourth quarter . But as we saw most capital ratios tick up .
Speaker #11: Just kind of wondering what your priorities are on capital deployment at this point .
Speaker #7: Hey , Evan . As far as priorities go , I mean , I think that our our number one priority would be to deploy our capital organically through balance sheet growth .
William J. Wallace IV: Hey, Evan Swaley, as far as priorities go, I think that our number one priority would be to deploy our capital organically through balance sheet growth. We are very focused on trying to take advantage of any and all disruption in our markets. As you know, that disruption has been increasing as of late. We have a successful history of lifting out teams and growing our balance sheet organically. That would be priority number one. We recognize the level of capital that we have. We've been in the market the last two quarters buying back our own stock and we will continue to look for opportunities to do that if the stock price remains at levels that we believe are there where it's attractive to deploy the capital in the market. We are aware of M&A as an opportunity to deploy capital.
Speaker #7: We we are very focused on trying to take advantage of any and all disruption in our markets . And as you know , that that disruption has been increasing as of late .
Speaker #7: We we have a successful history of lifting out teams and growing our balance sheet organically . So that would be priority number one .
Speaker #7: We we recognize the level of capital that we have . We've we've been in the market the last two quarter buying back our own stock .
Speaker #7: And we will continue to look for opportunities to to do that . If if the , you know , the stock price remains at levels that we believe are that where it's attractive to deploy the capital in the market and , you know , we we we are aware of M&A as an opportunity to deploy capital .
Speaker #7: I don't think that's our focus today given where our stock is trading . But we're we would not take that off of the list .
William J. Wallace IV: I don't think that's our focus today given where our stock is trading, but we would not take that off of the list.
Speaker #11: All right . Great . Thank you for taking my questions . I'll step back .
Lance Hall: All right, great. Thank you for taking my questions. I'll step back.
Speaker #5: Thank you Evan .
Drake Mills: Thank you, Evan.
Speaker #3: Thank you again , Evan . Our next question is a follow up from Matt with Stephens . Matt , your line is open .
Operator: Thank you again, Evan. Our next question is a follow-up from Matt with Stevens. Matt, your line is open. You may proceed. Thanks for taking the follow-up, guys. Over the last year, we've talked a lot about this fixed loan repricing dynamic that will support the overall loan yields. We're definitely seeing the benefits of that over the last few quarters as we look at that into 2026 and 2027. How would you characterize the remaining benefits from this dynamic compared to what we've seen more recently?
Speaker #3: You may proceed .
Speaker #8: Thanks for taking the follow up , guys . Over the last year , we've talked a lot about this fixed loan repricing dynamic that will support the overall loan yields .
Speaker #8: And we're definitely seeing the benefits of that over the last few quarters . As we look at that into 2026 and 2027 , how would you characterize the remaining benefits from from this dynamic compared to what we've seen more recently ?
Speaker #7: Hey , Matt . So , you know , with our with our payoffs and paydowns being elevated , some of that benefit has been pulled forward to to this year , which is great for today .
William J. Wallace IV: Hey, Matt Swaley. With our payoffs and pay downs being elevated, some of that benefit has been pulled forward to this year, which is great for today, NIM, but it does take away from a little bit of the tailwinds that we have. That said, we still right now as it stands today have over $300 million of loans that will have planned payoffs in 2026. Those loans are yielding in the mid 4s. Today we're putting on loans in the 6.90% to 7% range. Still plenty of opportunity there. We have over $1 billion of forecasted principal and payoffs coming for the year. It's still a tailwind, but we have pulled some of that tailwind forward. If I look at year over year, I think our margin's up in the 30 to 35 basis point range. I don't think we'll see that much benefit in 2026.
Speaker #7: Nim . But it does take away from a little bit of the the tailwinds that we have . That said though , we still right now , as it stands today , have over 300 million of loans that that will or will have planned payoffs in 2026 .
Speaker #7: Those loans are yielding in the mid fours . You know , today we're putting on loans in the 690 to 7% range . So still plenty of opportunity there .
Speaker #7: And we have over $1 billion of forecasted . You know principal principal and payoffs coming for for the year . So it's still a tailwind .
Speaker #7: But we have pulled some of that tailwind forward . You know , if I look at year over year , I think our margins up in the 30 to 35 basis point range , I don't think we'll see that much benefit in 2026 .
Speaker #7: We're putting we're putting for cuts in our modeling right now and still see , you know , 10 to 15 basis points of potential margin expansion from from the tailwinds that I just mentioned over the next five quarters .
William J. Wallace IV: We're putting four cuts in our modeling right now and still see 10 to 15 basis points of potential margin expansion from the tailwinds that I just mentioned over the next five quarters.
Speaker #8: Got it . Okay . That's helpful . Thanks for clarifying that . And then just one more point of clarification on the on the fee income guidance .
Operator: Got it. Okay, that's helpful, Wally, thanks for clarifying that. Just one more point of clarification on the fee income guidance. I think there's some discussion in the deck about, let's see here, yeah, kind of a high single digit, I'm sorry, no, low double digit growth in the fourth quarter. Can you clarify the fee income expectations in the near term and kind of puts and takes around the components of that?
Speaker #8: I think there's some discussion in the in the deck about let's see here . Yeah , kind of a high single digit I'm sorry .
Speaker #8: No low double digit growth in in the fourth quarter . Can you just there's several non-recurring items and some things that are non-operating .
Speaker #8: So I'm a little confused as far as kind of what the base is . Can you any way you can clarify the fee income expectations in the in the near term and kind of the puts and takes around the components of that ?
Speaker #7: Sure . If you if you take out the items that are fee and come related from the notable items table at the end of the deck , you'd get to a third quarter base base of about $17.1 million .
William J. Wallace IV: Sure, if you take out the items that are fee income related from the notable items table at the end of the deck, you'd get to third quarter base, base of about $17.1 million. The fourth quarter is a seasonally light quarter in both insurance and mortgage. From a sequential basis, that's probably more in the $15.5 million or so, which is up pretty meaningfully from last year's fourth quarter where the base was about $14 million. That's where that growth guidance is coming from year over year. Fourth quarter over fourth quarter, excluding notable items, the benefits are coming from swap fees, which have been very strong this year. We don't see the same level of swap fees in the fourth quarter that we saw in the second and third. We also have the contribution now from Argent Financial as another positive when you look year over year.
Speaker #7: The fourth quarter is a seasonally light quarter in both insurance and mortgage , so from a sequential basis , you know , that's probably more in the 15.5 or so million dollars , which is up pretty meaningfully from last year's fourth quarter , where the base was about 14 million .
Speaker #7: So that's where that's where that growth guidance is coming from year over year , fourth quarter over fourth quarter , excluding notable items , the benefit coming from swap fees , which have been very strong this year .
Speaker #7: We don't see the same level of swap fees in the fourth quarter as we did in the second and third, but we also have the contribution now from Arjun as another positive.
Speaker #7: When you look year over year .
Speaker #8: Got it. Okay, that's all from me, guys. Thanks for clarifying.
Operator: Got it. Okay, that's all for me, guys. Thanks for clarifying, Matt.
Speaker #5: Matt . Thank you very much .
Drake Mills: Thank you very much.
Speaker #3: Thank you again Matt . And ladies and gentlemen , one last reminder if you'd like to ask a question , that'll be star one or the raise hand icon on the right side of your screen .
Operator: Thank you again, Matt. Ladies and gentlemen, one last reminder: if you'd like to ask a question, that'll be Star one or the raise hand icon on the right side of your screen. It appears there are currently no further questions. Handing it back to Drake Mills for any final remarks.
Speaker #3: It appears there are currently no further questions handing it back to you . Drake Mills for any final remarks .
Speaker #5: Yeah , I want to thank everyone for being on the call . And just from a recap of why we feel so positive about moving into 26 , it's been extremely rewarding to me personally to see the deep commitment throughout our company , from all our employees to deliver on optimized origin , which continues to build momentum .
Drake Mills: Yeah, I want to thank everyone for being on the call. Just from a recap of why we feel so positive about moving into 2026, it's been extremely rewarding to me personally to see the deep commitment throughout our company from all our employees to deliver on Optimized Origin, which continues to build momentum. The momentum in all of our markets from Texas to the Southeast continues to build. The dislocation in the dynamic Texas markets and Southeast markets is significant for us. As we add that to the acceleration of production, I love what's going on with our strong pipelines. I currently am very positive and optimistic about our opportunity to reach our ultimate goal, being a top quartile performer. I appreciate your support, sincerely appreciate you being on the call. Look forward to seeing each of you soon.
Speaker #5: The momentum in all of our markets from Texas to the southeast , continue to build the dislocation in the dynamic Texas markets and southeast markets is significant for us .
Speaker #5: So as we add that to the acceleration of production , I love what's going on with our strong pipelines . I currently am very positive and optimistic about our opportunity to reach our ultimate goal of being a top quartile performer .
Speaker #5: I appreciate your support . Sincerely appreciate you being on the call . Look forward to seeing each of you soon .
Speaker #3: Ladies and gentlemen , this concludes today's call . Thank you and have a great day .
Operator: Ladies and gentlemen, this concludes today's after call. Thank you and have a great day. The host has ended this call. Goodbye.