DEF: Origin Bancorp Sets 2026 Annual Meeting, Expands Equity Plan

Origin Bancorp, Inc. announces its 2026 Annual Meeting of Stockholders, seeking approval for director elections, an expanded omnibus incentive plan, and advisory votes on executive compensation.

Summary

• The Annual Meeting of Stockholders will be held on April 22, 2026, at 12:00 p.m. Central Time, at Squire Creek Country Club in Choudrant, Louisiana.
• Stockholders will vote on the election of ten directors, approval of the Amended and Restated Origin Bancorp, Inc. Omnibus Incentive Plan, an advisory vote on named executive officer (NEO) compensation, an advisory vote on the frequency of Say-on-Pay proposals (Board recommends annually), and the ratification of Forvis Mazars, LLP as the independent auditor for fiscal year 2026.
• The Amended and Restated Origin Bancorp, Inc. Omnibus Incentive Plan proposes to increase the number of shares reserved for issuance by 1,000,000, bringing the total to 1,675,000 shares, which is expected to last for approximately three to five years of awards.
• Net income for the year ended December 31, 2025, decreased by 1.7% to $75.2 million, compared to $76.5 million in 2024.
• Net interest income increased by 10.2% to $331.0 million for the year ended December 31, 2025, up from $300.4 million in 2024.
• The company's Return on Average Assets (ROAA) remained stable at 0.77% for the year ended December 31, 2025, while Return on Average Equity (ROAE) decreased by 9.8% to 6.24%.
• Nonperforming loans held for investment (LHFI) to total LHFI increased to 1.06% at December 31, 2025, from 0.99% in 2024.
• Net charge-offs to average LHFI significantly increased by 188.9% to 0.52% at December 31, 2025, from 0.18% in 2024.
• The 2025 Short-Term Incentive Plan (STIP) financial portion was achieved at 96.2% of target, but Performance Stock Units (PSUs) granted in February 2023 were forfeited due to not meeting threshold performance goals for ROAA and ROAE.
• The company's CEO pay ratio is 30:1, with the median employee's total annual compensation at $87,058 and the CEO's at $2,640,828 for 2025.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this filing with a neutral-to-slightly-negative sentiment. While there are positives like net interest income growth and strategic initiative success, the declines in net income and ROAE, coupled with a significant increase in net charge-offs and nonperforming assets, raise concerns about credit quality and overall profitability. The forfeiture of executive PSUs also reflects underperformance against long-term targets.

Positives

• Net interest income increased by 10.2% to $331.0 million for the year ended December 31, 2025.
• Net interest margin (NIM-FTE) increased by 39 basis points to 3.61% for the year ended December 31, 2025.
• Book value per common share increased by 9.7% to $40.28 at December 31, 2025.
• Total loans held for investment (LHFI) increased by 1.3% to $7.67 billion at December 31, 2025.
• Total deposits increased by 1.0% to $8.31 billion at December 31, 2025.
• The 'Optimize Origin' initiative exceeded its near-term target, achieving a 4Q2025 ROAA run rate of 1.19% against a target of greater than 1%.
• Origin Bank was recognized for the thirteenth consecutive year as one of the Best Banks to Work For in the United States by American Banker.
• The company maintains strong corporate governance practices, including a Code of Ethics, Governance Principles, annual Board evaluations, and director education.
• Stockholders signaled strong support for the executive compensation program in April 2025, with 96.6% approval for the Say-On-Pay proposal.

Negatives

• Net income for the year ended December 31, 2025, decreased by 1.7% to $75.2 million compared to $76.5 million in 2024.
• Return on average equity (ROAE) decreased by 9.8% to 6.24% for the year ended December 31, 2025, from 6.92% in 2024.
• Nonperforming loans held for investment (LHFI) to total LHFI increased by 7 basis points to 1.06% at December 31, 2025, from 0.99% in 2024.
• Net charge-offs to average LHFI significantly increased by 188.9% to 0.52% at December 31, 2025, from 0.18% in 2024.
• Performance Stock Units (PSUs) granted in February 2023 were forfeited due to not meeting threshold performance goals (ROAA of 0.97% vs. 1.06% threshold; ROAE of 8.65% vs. 9.53% threshold).

Risks

• The company evaluates climate risks, including acute risks (extreme heat, wildfires, flooding, hurricanes) and chronic risks (sea level rise, changes in mean temperature and precipitation), as part of its credit analyses and broader risk-management framework.
• Cybersecurity threats are a significant concern, with the company conducting regular penetration testing and vulnerability assessments to safeguard systems and data, though no material cybersecurity incident has impacted business strategy to date.
• The company faces credit risk, as evidenced by loan charge-offs resulting from borrower fraud related to Tricolor Holdings, LLC, and the subsequent increase in nonperforming assets and net charge-offs.
• Operational risks are managed through robust risk management programs, compliance with laws and regulations, and a whistleblower policy to address financial irregularities, internal control breaches, conflicts of interest, and fraud.

Future Outlook

The company's 'Optimize Origin' initiative aims to drive elite financial performance and achieve a top quartile ROAA, having already exceeded its near-term target of a greater than 1% ROAA run rate by 4Q2025. The proposed increase in shares for the Omnibus Incentive Plan is expected to provide sufficient equity awards for approximately three to five years. Management anticipates continuing to pursue all legal means of recovery for loan charge-offs related to borrower fraud.

Management Comments

• Drake Mills, Chairman, President and CEO, stated, 'Our mission is to passionately pursue ways to make banking and insurance more rewarding for our employees, customers, communities and stockholders.'

Industry Context

StockSavvy.ai notes that Origin Bancorp's focus on integrating sustainability principles, including environmental responsibility and social impact, aligns with growing investor and regulatory expectations within the banking sector. The emphasis on digital solutions for efficiency and customer access, alongside robust employee wellness and development programs, reflects broader industry trends aimed at enhancing operational effectiveness and talent retention in a competitive market. The company's consistent recognition as a 'Best Bank to Work For' by American Banker underscores its success in human capital management, a critical differentiator in the financial services industry.

Comparison to Industry Standards

• Origin Bancorp's executive compensation peer group consists of 19 companies with a median asset size of approximately $12.06 billion, including Amerant Bancorp, Inc., First Financial Bankshares, Inc., and Trustmark Corporation, against which compensation levels are benchmarked.
• The company's cumulative five-year Total Shareholder Return (TSR) of 46.71% at December 31, 2025, slightly underperformed its peers as measured by the Nasdaq OMX ABA Community Bank Total Return.
• Origin Bank has been recognized for the thirteenth consecutive year as one of the 'Best Banks to Work For' in the United States by American Banker, indicating strong performance in employee satisfaction and workplace culture compared to industry peers.
• The digital financial education campaign generated a Click-Through Rate (CTR) of 0.55% for consumers and 0.60% for small businesses, both more than double the industry benchmark of 0.22%, demonstrating superior engagement in online financial literacy initiatives.

Management Changes

Corporate Governance

Legal Proceedings

• The Bank charged off certain loans in 2025 due to borrower fraud related to Tricolor Holdings, LLC, where former director Daniel T. Chu served as Chief Executive Officer. Management is pursuing all legal means of recovery.

Related Party Transactions

• The company paid approximately $105,000 to Squire Creek Country Club and Development LLC (jointly owned by the father and brother of director James Davison, Jr.) for corporate functions, employee and vendor lodging, and similar activities in 2025.
• Squire Creek Country Club and Development LLC paid the company approximately $41,000 for outsourced human resource services in 2025.
• Forth Insurance, a wholly-owned subsidiary, paid MNG Properties, L.L.C. (33.3% owned by Chairman and CEO Drake Mills) an aggregate of $165,000 in lease and tax payments in 2025, with future lease payments of approximately $1.5 million at March 1, 2026.
• Forth Insurance leased an office from 2200 Tower Drive, LLC (40% owned by Peyton Farr, husband of director Meryl Farr), making payments of approximately $327,000 in 2025, with future lease payments of approximately $3.2 million at March 1, 2026.
• Peyton Farr (husband of director Meryl Farr), Joe Farr (father-in-law of director Meryl Farr), and Tyler Mills (son of Chairman and CEO Drake Mills) each received compensation in excess of $120,000 for their employment in 2025.
• Forth Insurance indirectly owns approximately eight percent of PMIA Partners, LLC, from which it received $180,000 in distributions in 2025. Peyton Farr serves as manager of one of PMIA's insurance agencies and owns 75% of Strategic Agency Partners, LLC, which indirectly owns approximately 16% of PMIA.

Stakeholder Impact

• Shareholders: Potential dilution from the proposed increase in authorized shares for the Omnibus Incentive Plan (3.2% incremental dilution). Impact from mixed financial performance, including decreased net income and ROAE, but increased net interest income and book value per share. Advisory votes on executive compensation and frequency provide a channel for shareholder input.
• Employees: Continued commitment to competitive compensation and benefits, holistic wellness offerings, talent development programs, and a culture of belonging. Employee engagement is high, with 76% participation in the Project Enrich volunteer program.
• Customers: Continued focus on personalized relationship banking, expansion of financial services, and increased access to online financial education resources, demonstrating commitment to community needs.
• Communities: Significant volunteer hours (4,473 working hours, 1,273 personal hours in 2025) and targeted financial contributions, particularly for local schools and essential resources, reinforcing the company's Community Reinvestment Act (CRA) responsibilities.
• Creditors: Financial performance, particularly the increase in nonperforming assets and net charge-offs, could influence perceptions of credit risk, although total loans and deposits increased.

Next Steps

• Stockholders will vote on the proposals at the Annual Meeting on April 22, 2026.
• If approved, the Amended and Restated Origin Bancorp, Inc. Omnibus Incentive Plan will become effective on April 22, 2026, allowing for future equity-based incentive grants.
• Management will continue to pursue legal means of recovery for loan charge-offs related to borrower fraud.
• The Board and Compensation Committee will consider the outcome of the advisory votes on executive compensation and its frequency when making future decisions.

Key Dates

Recommendation

Origin Bancorp's filing presents a mixed financial picture for 2025. While net interest income and book value per share showed healthy growth, and the 'Optimize Origin' initiative exceeded its near-term ROAA target, the declines in net income and ROAE, coupled with a notable increase in nonperforming loans and net charge-offs, signal potential credit quality deterioration. The forfeiture of 2023 executive PSUs further highlights challenges in achieving long-term performance targets. The proposed equity plan expansion, while necessary for talent retention, introduces dilution. A seasoned investor would likely 'hold' the stock, awaiting clearer trends in credit quality and sustained improvements in profitability metrics before making a more definitive move, despite the company's strong governance and community engagement.

Keywords

Banking, Financial Services, Proxy Statement, SEC Filing, Corporate Governance, Executive Compensation, Omnibus Incentive Plan, Stock Awards, Sustainability, Risk Management, Shareholder Meeting, Net Interest Income, Return on Assets, Loan Growth, Deposit Growth