KBRA Affirms Ratings for Origin Bancorp, Inc.

KBRA affirms the senior unsecured debt rating of BBB, the subordinated debt rating of BBB-, and the short-term debt rating of K3 for Ruston, Louisiana-based Origin Bancorp, Inc. (NYSE: OBK) ("Origin" or "the company"). In addition, KBRA affirms the deposit and senior unsecured debt ratings of BBB+, the subordinated debt rating of BBB, and the short-term deposit and debt ratings of K2 for Origin Bank, the main subsidiary. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

Origin’s ratings remain well positioned within the current rating category, supported by the company’s strategic repositioning and resilience despite moderate credit headwinds in recent years. While execution of management’s “Optimize Origin” initiative temporarily pressured profitability due to largely one-time items taken during 2024 and 2025—including securities portfolio restructuring, workforce rationalization, and branch consolidations, among other actions—KBRA views the strategy as largely implemented and gaining traction. As a result, OBK appears positioned to achieve not only above-peer profitability over time, but also a more durable and sustainable earnings profile. Moreover, the elevated provision for loan losses (in 2025) was largely idiosyncratic and is not expected to be a recurring drag on performance.

A key milestone in this evolution was Origin’s organic progress toward the $10 billion asset threshold, which according to management is expected to occur during 2026. Whereas many peers rely on M&A to offset higher regulatory costs and revenue pressures at this level, OBK enters this phase having already absorbed much of the up-front expense associated with the franchise build out. Additionally, recognition of the equity-method of accounting income from its Argent investment, combined with a continued focus on relationship-based C&I banking, is expected to support growth in service-based fee revenues, particularly treasury management, helping to mitigate the future lost interchange income. As such, we believe noninterest income levels should remain adequate, which have historically tracked right below 20% of total revenues. In KBRA’s view, the company enters this next phase from a position of strength, supported by a scalable organic growth engine, improving operating leverage, and a favorable NIM positioning that is expected to remain relatively stable (around the 3.75% level) despite continued Fed rate reductions. Collectively, these factors support KBRA’s expectation that Origin can drive ROA into the upper quartile of the rating group (approximately 1.15%–1.25%) over the next several years. Notably, 4Q25 results reflected progress toward this objective, with OBK reporting an ROA of nearly 1.2%.

The ratings also continue to recognize OBK’s well-established banking franchise, strategically positioned across several of the nation’s strongest and fastest-growing MSAs. KBRA also favorably views its broad five-state operating presence and focus on C&I lending, which together facilitate a more diversified geographic footprint and loan portfolio relative to peers. Notably, Origin's investor CRE concentration (~236% of total-risk based capital as of 4Q25) remains comfortably below the rated peer average.

The company reported modest adverse credit developments related to BT Holdings, Inc. ("BTH") and borrower fraud at Tricolor Holdings in recent years, but most BTH losses (lending and legal) have already been reserved for, and the entire Tricolor exposure was charged-off, with some recovery expected. As such, management is forecasting an improvement in asset quality measures in 2026 given that the broader loan portfolio continues to perform well. Moreover, in the event of unforeseen issues, KBRA takes comfort in OBK's robust core capital position, including above average TCE and CET1 ratios (11.3% and 13.5%, respectively, as of YE25). Deliberate balance sheet management as it approached the $10 billion in asset threshold and capital accretion has lifted regulatory capital ratios in recent periods. Moving forward, while likely maintaining levels above peers, capital will likely be deployed on organic growth opportunities along with a slightly higher level of capital return to shareholders via a potential increase in dividends and share buybacks.

Rating Sensitivities

An upgrade is not currently expected, though continued execution of its strategic initiatives, which should result in improved earnings performance, along with better credit quality metrics, and maintenance of its favorable capital position could result in positive rating momentum over time. Conversely, a rating downgrade in the near term is unlikely, though any deterioration among key financial metrics, specifically within earnings or capital, could pressure the ratings.

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Methodologies