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

February 12, 2019

NEW YORK--(BUSINESS WIRE)--Feb 12, 2019--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 published on February 19, 2016.

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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.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190212005569/en/

CONTACT: Analytical Contacts:

John Rempe, Senior Analyst

(301) 969-3045

jrempe@kbra.com

Vincent Arscott, Senior Director

(646) 731-2473

varscott@kbra.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE

SOURCE: Kroll Bond Rating Agency

Copyright Business Wire 2019.

PUB: 02/12/2019 09:46 AM/DISC: 02/12/2019 09:46 AM

http://www.businesswire.com/news/home/20190212005569/en

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