KBRA Assigns Senior Unsecured Debt Rating of BBB for Origin Bancorp, Inc.

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns a senior unsecured debt rating
of BBB, subordinated debt rating of BBB-, and short-term debt rating of
K3 for Ruston, Louisiana based Origin Bancorp, Inc. (NASDAQ: OBNK)
(“Origin”, or “the Company”). In addition, KBRA assigns deposit and
senior unsecured debt ratings of BBB+, a subordinated debt rating of
BBB, and short-term deposit and debt ratings of K2 for its subsidiary,
Origin Bank. The Outlook for all long-term ratings is Stable.

The ratings are supported by Origin’s improved operating performance for
2018 with ROA near 1.2%. Also supporting the ratings are OBNK’s deposit
composition, which includes a favorable level of noninterest-bearing
deposits – resulting in relatively stable funding costs and allowing for
NIM expansion (>3.8%) in recent years. The ratings also reflect the
Company’s strong capital position following its IPO. However, Origin is
expected to deploy its excess capital, though intends to maintain
relatively conservative capital ratios in line with prior years (Tier 1
leverage in the 10% range). OBNK’s ratings are constrained by its weak
earnings in recent years, mainly due to the volatility in asset quality
metrics stemming from its energy portfolio. However, that portfolio has
since been cleaned up and the overall exposure has receded. The ratings
are further constrained by a comparatively high efficiency ratio due to
inefficiencies within its mortgage banking division, which has been in a
net loss position. The efficiency ratio has improved in 2018 to be more
in line with rated peers, and KBRA believes that Origin has the
opportunity to additionally improve operating efficiency through further
growth/leverage of its infrastructure and mortgage banking
reorganization efforts.

The ratings are based on KBRA’s Global
Bank and Bank Holding Company Rating Methodology
published on
February 19, 2016.

To view the full report, click here.

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus, is recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.

Contacts

Analytical Contacts:
John
Rempe, Senior Analyst
(301) 969-3045
jrempe@kbra.com

Vincent
Arscott, Senior Director
(646) 731-2473
varscott@kbra.com