Origin Bancorp: Favorable Macro In Texas Drives Earnings

Origin Bancorp (OBK) is rated BUY, driven by robust Texas-focused loan growth and record net interest income and margin. OBK trades at a 10% discount to its recent peak P/E but commands a premium to sector medians, justified by projected 21% forward EPS growth. Dividend payouts and share repurchases provide downside protection, with dividends and buybacks both at all-time highs. Management guides for flat NIM growth amid competitive pressures, but stronger-than-expected NIM could further catalyze shares. OBK is focused on Texas as one of the bank's key client bases. Given Texas' strong economy highlighted by strong job growth and a high degree of corporate relocation, OBK should see more commercial loans.