10-Q/A: Origin Bancorp Files Amended 10-Q to Address Material Weakness in Disclosure Controls

Origin Bancorp has filed an amendment to its Q2 2024 10-Q report to address a material weakness identified in its disclosure controls and procedures related to internal control over financial reporting.

Summary

• Origin Bancorp filed an amendment to its original Form 10-Q for the quarter ended June 30, 2024.
• The amendment addresses a material weakness in the company's disclosure controls and procedures and internal control over financial reporting.
• The material weakness relates to controls over employees' ability to initiate certain manual transfers between deposit accounts.
• The company's management concluded that its disclosure controls and procedures were not effective as of June 30, 2024, due to this material weakness.
• The amendment includes certifications from the CEO and CFO, dated February 26, 2025.
• The company states that the material weakness did not result in any changes to the consolidated financial statements as set forth in the Original Filing.
• The company is enhancing its internal controls to identify and mitigate events like the questioned activity by the former banker in East Texas previously discussed in the Original Filing.
• As of July 31, 2024, 31,140,115 shares of common stock were issued and outstanding.

Sentiment

Score: 4

Explanation: The sentiment is negative due to the identification of a material weakness in internal controls, but the company is taking steps to address the issue. The fact that the weakness did not impact the financial statements is a slight positive.

Positives

• The company is taking steps to enhance internal controls to prevent similar issues in the future.
• The company states that the material weakness did not result in any changes to the consolidated financial statements as set forth in the Original Filing.

Negatives

• A material weakness was identified in the company's disclosure controls and procedures related to internal control over financial reporting.
• Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2024.

Risks

• The effectiveness of disclosure controls and internal control over financial reporting is subject to inherent limitations, including cost limitations, judgments, human error, and the risk of fraud.
• Projections of effectiveness to future periods are subject to the risk that controls may become inadequate or compliance may deteriorate.

Future Outlook

The company continually evaluates and seeks to enhance its internal controls over financial reporting.

Management Comments

• Management concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report solely due to a material weakness in the Company's internal controls over financial reporting relating to controls over employees' ability to initiate certain manual transfers between deposit accounts.

Industry Context

The identification and remediation of material weaknesses in internal controls is a common area of focus for SEC enforcement and investor scrutiny, particularly for financial institutions. Companies are expected to have robust controls to prevent errors and fraud.

Comparison to Industry Standards

• It is difficult to compare this specific situation to industry standards without knowing the specifics of the manual transfer process and the size/complexity of Origin Bancorp.
• However, comparable regional banks are expected to have well-defined and tested internal controls over financial reporting.
• Failure to maintain effective internal controls can lead to regulatory scrutiny and reputational damage.

Stakeholder Impact

• Shareholders may be concerned about the material weakness in internal controls.
• The company's reputation could be negatively impacted.
• Employees involved in financial reporting may face increased scrutiny.

Next Steps

• The company will continue to evaluate and enhance its internal controls over financial reporting.
• The company will monitor the effectiveness of the enhancements designed to identify and mitigate similar events in the future.

Key Dates