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All references to "Origin Bank" or "the Bank" refer to Origin Bank, our wholly-owned bank subsidiary.
−Removed: Origin is a financial holding company headquartered in Ruston, Louisiana.
−Removed: Our wholly-owned bank subsidiary, Origin Bank, was founded in 1912.
−Removed: Deeply rooted in our history is a culture committed to providing personalized, relationship banking to our clients and communities.
−Removed: We provide a broad range of financial services to businesses, municipalities, high net worth individuals and retail clients.
−Removed: We currently operate 44 banking centers from Dallas/Fort Worth and Houston, Texas across North Louisiana and into Mississippi.
−Removed: At December 31, 2021, we had total assets of $7.86 billion, total loans of $5.23 billion, total deposits of $6.57 billion and total stockholders' equity of $730.2 million.
+Added: Origin Bancorp, Inc.
+Added: is a financial holding company headquartered in Ruston, Louisiana.
+Added: Our wholly owned bank subsidiary, Origin Bank, was founded in 1912 in Choudrant, Louisiana.
+Added: Deeply rooted in our history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities we serve.
+Added: We provide a broad range of financial services and currently operate 59 banking centers located in Dallas/Fort Worth, East Texas, Houston, North Louisiana and Mississippi.
+Added: At December 31, 2022, we had total assets of $9.69 billion, total loans held for investment ("LHFI") of $7.09 billion, total deposits of $7.78 billion and total stockholders' equity of $949.9 million.
We completed an initial public offering of our common stock in May 2018.
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Successful execution of our strategic plan has produced significant growth in our franchise.
−Removed: Since 2005, we have enhanced our growth by integrating three bank acquisitions, entering denovo into several expansion markets, expanding our product offerings in mortgage lending and servicing as well as in insurance and private banking.
+Added: Since 2005, we have enhanced our growth by integrating four bank acquisitions, entering de novo into several expansion markets, expanding our product offerings in mortgage lending and servicing as well as in insurance and private banking.
We have supported our markets by hiring a number of experienced in-market bankers and banking teams.
−Removed: To support our growth, we raised over $281.8 million of new Tier 1 capital since 2006, including proceeds from our initial public offering completed in May 2018, and in 2020, issued subordinated notes that are treated as Tier 2 capital for regulatory purposes.
+Added: To support our growth, we have raised over $589.6 million of new Tier 1 capital since 2006, including proceeds from our initial public offering completed in May 2018, we issued subordinated notes that are treated as Tier 2 capital for regulatory purposes in 2020, and completed an all stock merger valued at $307.8 million in 2022.
Through these efforts, we have successfully increased our market share in our key geographic markets.
+Added: We believe in relationship-based, community banking where a putting people first philosophy thrives.
+Added: Identifying and merging with BT Holdings, Inc.
+Added: ("BTH"), a Texas corporation and the registered bank holding company of BTH Bank, allowed us to merge two companies that have been passionately committed to community banking for more than 100 years and are each deeply rooted in their communities.
+Added: Our merger with BTH was our only material acquisition during the previous five years.
+Added: On August 1, 2022, we completed our merger with BTH, acquiring 100% of the voting equity interests.
+Added: We issued 6,794,910 shares of our common stock, and all outstanding BTH common stock options were converted into options to purchase an aggregate of 611,676 shares of Origin common stock.
+Added: Based on the closing price of our common stock on July 29, 2022, of $43.07 per share, the aggregate consideration paid to holders of BTH common stock in connection with the merger was approximately $307.8 million.
+Added: Goodwill of $94.5 million was recorded as a result of the transaction.
+Added: Including the effects of known purchase accounting adjustments, as of the merger date, BTH had approximately $1.85 billion in assets, $1.23 billion in net loans and $1.57 billion in deposits.
+Added: BTH formerly operated its banking business from 13 locations in East Texas, Dallas and Fort Worth, each of which now operates as a banking location of Origin Bank.
Our Competitive Strengths and Banking Strategy
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To promote our organic growth, we strategically locate banking centers within our markets and employ highly experienced relationship bankers who proactively develop valuable relationships within the communities that we serve.
−Removed: Through these relationships, our bankers are able to capitalize on loan demand across a wide range of industries.
+Added: Through these relationships, our bankers are able to meet our customers’ needs and capitalize on loan demand across a wide range of industries.
This allows us to not only diversify our loan portfolio, but also focus on loans with quality credit characteristics.
−Removed: We focus on generating core deposits and, in particular, noninterest-bearing deposits, as our primary funding source to support loan growth.
+Added: We focus on generating and retaining core deposits and, in particular, noninterest-bearing deposits, as our primary funding source to support loan growth.
We believe motivating our relationship bankers to generate strong core, noninterest-bearing deposit growth enhances our ability to build and strengthen client relationships and provide stable funding for future growth.
−Removed: We also intend to continue pursuing selective acquisition opportunities that we expect will enhance our business model in markets across our attractive geographic footprint.
+Added: We also intend to continue pursuing selective acquisition opportunities that we expect will enhance our business model within our attractive geographic footprint and other complementary markets.
A Unique from Within Client Experience
Our mission is to passionately pursue ways to make banking and insurance more rewarding for our employees, customers, communities, and stockholders.
−Removed: We recognize that providing a distinguished client service begins with a commitment to building, training and retaining a customer-focused team that exemplifies our core values.
−Removed: Relationships built upon trust, encouraging a strong work ethic, innovation, flexibility and forward-thinking, genuine respect for others, cultivating a commitment to our community and never compromising on integrity are the benchmarks of our values and our promise is to make every customer feel like our only customer, every time.
+Added: We have a deep commitment to providing an unmatched client experience that exceeds our customers’ expectations.
+Added: We believe by aligning our processes, philosophy, technology, and culture;
+Added: we create a seamless experience that goes beyond the transactional and becomes transformational.
+Added: Trust, encouraging strong work ethic, innovation, flexibility, forward-thinking, genuine respect for others, commitment to our community, and never compromising our integrity are our values, and are the foundation of our company.
Concentration on Sound Asset Quality
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We provide products and services that compete with large, national banks but with the personalized attention and responsiveness of a relationship-focused community bank.
−Removed: Our offerings include traditional retail deposits, treasury management, commercial deposits, mortgage origination and servicing, insurance, mobile banking and online banking.
+Added: Our offerings include traditional retail deposits, treasury management, commercial deposits, commercial and consumer loans, mortgage origination and servicing, insurance, mobile banking and online banking.
Our clients value our ability to provide the sophisticated products and services of larger banks, but with a local and agile decision-making process, a focus on building personal relationships, and a commitment to investing in the local economy and community.
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We believe we have an attractive mix of loans and deposits.
−Removed: At December 31, 2021, our loans held for investment ("LHFI") portfolio was comprised of 39.8% commercial and industrial loans (including Paycheck Protection Program ("PPP") and mortgage warehouse loans), and 42.5% commercial real estate loans (including construction/land/land development).
−Removed: This focus on commercial lending increases the asset sensitivity of our balance sheet and provides potential growth opportunities.
+Added: At December 31, 2022, our loans held for investment ("LHFI") portfolio was comprised of 32.9% commercial and industrial loans including mortgage warehouse loans, and 45.8% commercial real estate loans, including construction/land/land development loans.
+Added: 34.1% of our total commercial real estate and construction/land/land development is owner occupied and 65.9% in non-owner occupied.
At December 31, 2022, approximately 32.0% of our deposits were noninterest-bearing demand deposits, and our cost of total deposits was 0.47% for the year ended December 31, 2022.
−Removed: We currently operate in the markets of Dallas/Fort Worth and Houston, Texas, North Louisiana and Mississippi, all of which offer attractive combinations of diversity, growth and stability.
+Added: We currently operate in the markets of Dallas/Fort Worth, Houston, East Texas, North Louisiana and Mississippi, all of which offer attractive combinations of diversity, growth and stability.
The Dallas/Fort Worth and Houston markets represent two of the largest and fastest-growing metropolitan areas in the country.
These markets provide attractive economic environments and offer significant deposit and lending opportunities as they are home to many large and mid-size corporations across a wide range of industries that include healthcare, manufacturing, higher education, agriculture, energy, transportation and technology.
+Added: Our merger with BTH allowed us to enter the East Texas market and expand our footprint across the I-20 corridor.
+Added: The merger also bolstered our presence in the Dallas/ Fort Worth market.
+Added: We believe the strong reputation and commitment of both banks will provide growth in both markets and allow us to strengthen relationships in the communities we serve.
The North Louisiana markets offer a stable economic climate with lower costs associated with deposit gathering and our operational platform.
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Our Banking Services
−Removed: We are focused on delivering a broad range of relationship-driven financial services tailored to meet the needs of small and medium-sized businesses, municipalities, high net worth individuals and retail clients.
+Added: We are focused on delivering a broad range of relationship-driven financial services tailored to meet the needs of small and medium-sized businesses, municipalities, and retail clients.
We principally operate in one business segment, community banking.
We are primarily engaged in attracting deposits from individuals and businesses and using these deposits and borrowed funds to originate commercial, residential mortgage, construction and consumer loans.
−Removed: We have grown our assets, deposits, and business primarily organically by building on our lending products, expanding our deposit products and delivery capabilities, opening new branches, and hiring experienced bankers with existing customer relationships in our market areas.
+Added: We have grown our assets, deposits, and business primarily organically by building relationships through our lending products, expanding our deposit products and delivery capabilities, opening new branches, and hiring experienced bankers with existing customer relationships in our market areas.
A general discussion of the range of financial services we offer follows.
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4,727,841 3,133,334
−Removed: 105,761 546,519
Commercial and industrial
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$ 7,090,022 $ 5,231,331
−Removed: ____________________________
−Removed: (1) Includes commercial real estate loans accounted at fair value at December 31, 2020.
Commercial Real Estate Loans and Construction/Land/Land Development Loans .
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Consumer loans also include closed-end second mortgages, home equity lines of credit and our mortgage loans held for sale.
+Added: Consumer and residential real estate loans have contributed interest income of $51.1 million and $38.0 million for the years ended December 31, 2022 and 2021, respectively.
Commercial and Industrial Loans.
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Mortgage warehouse loans have contributed interest income of $18.7 million and $27.5 million for the years ended December 31, 2022 and 2021, respectively.
−Removed: Paycheck Protection Program Loans.
−Removed: We were a participating lender in the PPP established under the CARES Act and administered by the Small Business Administration (“SBA”) in 2020 and 2021.
−Removed: At December 31, 2021 and 2020, there were approximately $105.8 million and $546.5 million, respectively, in PPP loans outstanding, net of $3.0 million and $9.6 million, respectively, in net deferred loan fees.
−Removed: The majority of PPP loans have a maximum maturity of five years and earn interest at 1%.
−Removed: PPP loans are fully guaranteed by the U.S.
−Removed: government and can be forgiven by the SBA if the borrower uses the proceeds to pay specified expenses.
−Removed: We believe that the vast majority of our PPP loans will ultimately be forgiven by the SBA in accordance with the terms of the program.
Credit Risks .
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We have also established a corporate loan committee with authority to approve loans up to the legal lending limit of Origin Bank.
−Removed: During 2021, credit relationships of $8.0 million or greater are generally presented to the corporate loan committee for approval or ratification of approval prior to committing to the loan.
+Added: During 2022, credit relationships of $8.0 million or greater were generally presented to the corporate loan committee for approval or ratification of approval prior to committing to the loan.
The corporate loan committee meets weekly and on an ad hoc basis as needed.
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In addition, there are legal restrictions on the maximum amount of loans available for each lending relationship.
−Removed: At December 31, 2021, Origin Bank's legal lending limit under the Louisiana Banking Law and Regulation O of the Board of Governors of the Federal Reserve System (the "Federal Reserve") was $204.1 million for secured loans to a single borrower, $81.6 million for unsecured loans to a single borrower and $127.9 million for loans to a single insider which represents 15% of the Bank's capital and surplus as required by regulation.
+Added: Origin Bank is subject to certain legal lending limits under the Louisiana Banking Law and Federal Reserve Regulation O.
At December 31, 2022, we had established a general in-house lending limit ranging between $30.0 million and $35.0 million to any one borrower, excluding mortgage warehouse lines of credit, based upon our internal risk rating of the relationship.
−Removed: Due to multiple sources of repayment, mortgage warehouse lines of credit, has a general in-house lending limit ranging between $30.0 million and $75.0 million to any one borrower,
+Added: Due to multiple sources of repayment, mortgage warehouse lines of credit have a general in-house lending limit ranging between $30.0 million and $75.0 million to any one borrower.
Deposits and Other Sources of Funds
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We obtain most of our deposits from individuals, small businesses and municipalities in our market areas.
+Added: At December 31, 2022, 54.2% of our deposits were business deposits, 35.6% were consumer deposits and 10.2% were public fund deposits.
One area of focus has been to create a deposit-focused sales force of business development bankers who have extensive contacts and connections with targeted clients and centers of influence throughout our communities.
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Revenue from our mortgage banking activities was $6.7 million, $12.9 million and $29.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: We offer a wide variety of commercial and personal property and casualty insurance products through our wholly-owned insurance subsidiaries.
−Removed: Davison Insurance Agency, LLC, doing business as Lincoln Agency, LLC (the "Lincoln Agency"), Lincoln Agency Transportation Insurance, Pulley-White Insurance Agency ("Pulley-White"), Reeves, Coon & Funderburg, Simoneaux & Wallace Agency and Thomas & Farr Agency.
−Removed: With over 30 years of growth in the insurance industry and approximately 126 experienced professionals, our agencies have primary market locations across Louisiana, but also serve customers in Texas, Mississippi, Arkansas and other states across the United States.
+Added: We offer a wide variety of commercial and personal property and casualty insurance products through our wholly-owned insurance subsidiary, Davison Insurance Agency, LLC, which conducts business under the trade names Lincoln Agency, LLC, Lincoln Agency Transportation Insurance, Pulley-White Insurance Agency, Reeves, Coon & Funderburg, Simoneaux & Wallace Agency and Thomas & Farr Agency.
+Added: With over 30 years of growth in the insurance industry and approximately 120 experienced professionals, our agency has primary market locations across Louisiana, but also serves customers in Texas, Mississippi, Arkansas and other states across the United States.
In December 2021, we acquired the remaining 62% interest in the Lincoln Agency, bringing our total ownership to 100% ownership.
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Given customer demand for increased convenience and account access, we offer a wide range of products and services, including 24-hour internet banking and voice response information, mobile applications, cash management, overdraft protection, direct deposit, safe deposit boxes, U.S.
−Removed: savings bonds, automatic account transfers and peer-to-peer electronic pay solutions and personal financial management solutions.
+Added: savings bonds, automatic account transfers, peer-to-peer electronic pay solutions and personal financial management solutions.
Information Technology Systems
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The banking business is highly competitive, and our profitability will depend in large part on our ability to compete with other banks and nonbank financial service companies located in our markets for lending opportunities, deposit funds, financial products, bankers and acquisition targets.
−Removed: We are subject to vigorous competition in all aspects of our business from banks, savings banks, savings and loan associations, finance companies, credit unions and other financial service providers, such as money market funds, brokerage firms, consumer finance companies, asset-based nonbank lenders, insurance companies and certain other non-financial entities, including retail stores which may maintain their own credit programs and certain governmental organizations which may offer more favorable financing than we can.
+Added: We are subject to vigorous competition in all aspects of our business from banks, savings banks, savings and loan associations, finance companies, credit unions, technology companies, and other financial service providers, such as money market funds, fintech companies, brokerage firms, consumer finance companies, asset-based nonbank lenders, insurance companies and certain other non-financial entities, including retail stores which may maintain their own credit programs and certain governmental organizations which may offer more favorable financing than we can.
Many other commercial banks, savings institutions and credit unions have offices in our primary market areas.
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To offset these competitive disadvantages, we depend on our reputation as having greater personal service, consistency, flexibility and the ability to make credit and other business decisions quickly.
−Removed: Human Capital Resources
−Removed: Our current number of full-time equivalent employees is 797, all of whom are the recipients of a variety of initiatives designed to retain, grow, and develop them.
−Removed: Please see the Human Capital Management section referenced as part of Corporate Governance in our Proxy Statement (Schedule 14A) for our 2022 Annual Meeting of Stockholders for more information on Origin's human capital initiatives.
+Added: Human Capital Management
+Added: At December 31, 2022, we had 1,011 full-time equivalent employees, who benefit from a variety of initiatives designed to retain, grow, and develop them in becoming the best versions of themselves.
+Added: At Origin, our culture has always been the foundation of our success.
+Added: We work to define our culture in everything we do.
+Added: It is in our attitudes, our diversity, our core values;
+Added: it is in our interactions with our customers and communities.
+Added: Culture is the soul of who we are as a company, and it starts with our employees.
+Added: Safe Work Environment
+Added: Throughout our history, we have been committed to employee and customer health and safety.
+Added: This focus was magnified with the impact of COVID-19 and employee and customer health and safety continues to be one of our top priorities.
+Added: While COVID-19 variants have evolved and changed our support of our employees and customer health has remained unwavering.
+Added: During the pandemic, we expanded our work from home (“WFH”) capabilities in order to allow our employees to better serve our customers while putting safety first, and this option has allowed smooth operations while variants of the virus ebb and flow.
+Added: Compensation and Benefits
+Added: We provide competitive compensation and benefits in order to attract and retain top talent.
+Added: In addition to base pay and stock awards, we have several incentive programs that are designed to link performance to pay and drive results towards the achievement of overall corporate goals.
+Added: We also provide a myriad of benefits through programs such as DreamManager®, Health and Wellness coaching, Leadership Academies, Financial Wellness Initiatives, and Project Enrich, as detailed below.
+Added: Employee Engagement
+Added: Our Dream Manager® program assists our employees in meeting their own personal and professional goals in addition to helping them improve physically, emotionally, intellectually, and spiritually.
+Added: Over 250 employees have participated in this program since 2019.
+Added: We launched a nationally-recognized financial wellness program (“SmartDollar”) during 2021 that is designed to assist our employees in becoming debt-free and saving money for emergencies and retirement, empowering them to become better financially prepared for their future, which during 2022, had an over 40% participation rate.
+Added: Due to our adoption rate, we won a national award in 2021 from the Dave Ramsey Foundation called the “Vision” award.
+Added: Also in 2021, we hired a certified Holistic Health Coach to spearhead our Health & Wellness initiatives.
+Added: In addition to providing health and wellness information on a regular basis to all employees, we currently have approximately 10% of our employees working directly with our Health Coach on a personalized basis to meet their desire to be healthier.
+Added: Additionally, in one specific initiative designed to help the communities we serve, our Project Enrich program provides employees with up to twenty hours of paid time off to volunteer in their communities.
+Added: In 2022, the employees of Origin volunteered 2,874 hours in the community during bank time, not including many more on personal time.
+Added: Employee Feedback
+Added: Employee feedback is highly valued at Origin and our employees provide anonymous input via quarterly surveys facilitated by Glint, a LinkedIn company.
+Added: Our employees consistently rank Origin in the top 10% of Glint’s global customer base with regard to employee engagement.
+Added: We regularly receive hundreds of written comments each quarter that in turn are used to improve processes, policies, or programs in an effort to show tangible affirmation of those comments.
+Added: We also have continued a practice that was implemented at the beginning of the pandemic called “The Origin Insider”.
+Added: This webinar event occurs monthly and features speakers (internal and external) for our employees on a wide range of topics promoting, among other things, employee engagement and satisfaction.
+Added: The employees are able to submit questions for the speakers in advance of the webinar.
+Added: Talent Development
+Added: Talent development at Origin begins with our comprehensive recruitment program and continues throughout the employee life cycle.
+Added: Beginning in 2021 and continuing throughout 2022, we implemented the Giving Interns Valuable Experience (g.i.v.e.) program, and welcomed a very diverse (both in gender and race) group of 27 interns from 17 different universities.
+Added: The program was successful at promoting Origin’s brand and resulted in strong experiential feedback while also creating job opportunities for four of the 27 interns during 2021 and 2022.
+Added: We utilize assessment tools and provide multiple resources and venues, such as our Career Development Center, for employees to determine what career path is the best fit for them in order to help them grow and enhance their promotional opportunities.
+Added: We also provide advanced leadership development via our Leadership Academy classes, which provide structured training, collaboration with other aspiring leaders throughout the organization, and mentoring relationships.
+Added: In addition, we provide a senior-level two-year class called the Origin Leadership Academy, which focuses on the development of next-generation executives.
+Added: Participants in the Origin Leadership Academy are appointed by senior management.
+Added: Further, all employees are eligible to apply for participation in the “Emerging Leaders Council”, which is a one-year program designed to train and develop emerging leaders in our organization.
+Added: Beginning in 2021, we implemented a program called “Career Manager” which provides young professionals within our organization one-on-one time with senior leaders to enhance their career aspirations and accelerate their understanding of the business of banking.
+Added: This program also helps with employee retention.
+Added: The pilot class included five individuals who all graduated from the program and currently four individuals are in the program.
+Added: We find benefit in developing our future leaders from within and succession plans are in place for senior level positions as well as many other key leadership positions.
+Added: Diversity & Inclusion
+Added: At Origin, one of our core values is, genuine respect for yourself and others .
+Added: This value makes the support of diversity, equity and inclusion a natural fit for our culture and essential to the way we conduct business, foster individual and team enrichment, and participate in our communities.
+Added: We believe it is only with a diverse, equitable, and inclusive workplace that the organization can truly perform at its best, carry out its vision, and make a difference in the communities we serve.
+Added: We believe all employees should be given opportunities to perform to their full potential, knowing their performance will be measured and rewarded fairly.
+Added: In 2023, Origin Bank announced our newly formed Diversity Council, which consists of 18 diverse employees that will collectively advance our Diversity, Equity, and Inclusion efforts in a way that makes a difference within our workplace and in the communities we serve.
+Added: In order to support and enhance our culture, the Company’s talent acquisition team attends job fairs that attract ethnically and culturally diverse employees.
+Added: We also have engaged a third-party workforce development company that utilizes a connected system of job recruiting sites that post our employment opportunities with various groups that include, but are not limited to the following:
+Added: veterans, LGBTQ-identifying individuals, individuals with disabilities, minorities and women, professional and industry organizations, skilled trade associations and college students.
+Added: Also, we have a formal internship program that is designed to develop a strong pool of diverse candidates through on-campus recruiting with local colleges and universities including local Historically Black Colleges and Universities.
+Added: Additionally, all employees participate in diversity training and managers have additional, in-depth training on recognizing unconscious biases and access to brand new micro learning lessons every week to help respond to current needs around diversity and inclusion.
+Added: Also, we recently introduced VIBE Central in Workday.
+Added: VIBE stands for Value, Inclusion, Belonging and Equity.
+Added: This allows senior leaders in our organization to set goals and monitor progress by assessing, measuring, benchmarking, and managing diversity and inclusion by the dimensions of their choice, such as race/ethnicity and gender.
+Added: Origin has been recognized as a “Best Bank to Work For” by American Banker magazine for ten consecutive years and was named the 2nd "Best Bank to Work For" in America in 2022, which we believe is attributable to our deep commitment to corporate culture, and our focus on initiatives to support and develop our employees.
+Added: This ranking is based on feedback from surveys given directly to the American Banker magazine from our employees.
+Added: We have built our success on valued relationships beginning with our employees, who then build long-term, customer-focused relationships throughout our footprint.
None of our employees are represented by any collective bargaining unit or are parties to a collective bargaining agreement.
We believe that our relations with our employees are good.
−Removed: Recent Developments:
−Removed: The effects of the COVID-19 pandemic and the governmental and societal response to the virus, and its variants, negatively impacted overall economic conditions on an unprecedented scale during 2020, resulting in the shuttering of businesses and significant job loss, which continues to impact individuals, households and businesses in a multitude of ways, including excess liquidity and contributing to wide-spread supply chain shortages.
−Removed: A number of restrictive government initiatives designed to combat the effects of the COVID-19 pandemic have been eased on a national level and specifically in the Company's markets of Texas, Louisiana and Mississippi, allowing businesses to reopen in those states, which has bolstered commercial activity to some degree.
−Removed: To date, the U.S.
−Removed: Food and Drug Administration has approved several COVID-19 vaccines for deployment and distribution in the United States.
−Removed: However, a resurgence in infections, new variants, more infectious or deadly variants, or the lack of vaccine longevity or efficacy could cause possible reimplementation of new or additional restrictions at the national and local level to combat the COVID-19 pandemic.
−Removed: The duration and severity of the COVID-19 pandemic remains impossible to predict.
−Removed: We have continued to meet our customers' needs while keeping the safety and well-being of our employees and customers as our top priority.
−Removed: We implemented a COVID-19 hotline and a temporary pandemic Paid Time Off Policy to assist our employees, and our offices and branches all remain open with all drive-thrus fully operational.
−Removed: In addition, we created an Infection Control Protocol in accordance with Centers for Disease Control guidance which has allowed us to ensure all employees can easily read and understand the steps that should be taken if there is a positive case of COVID-19 or a COVID-19 exposure.
−Removed: To allow for more normalized customer operations, we installed thermal kiosks for temperature checks at the entrance of each location and will evaluate any additional safety protocols as needed.
−Removed: In March and April 2020, two relief bills were signed into law, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and the Paycheck Protection Program and Health Care Enhancement Act (the “PPP/HCE Act”), to provide emergency relief to several groups and individuals impacted by the COVID-19 pandemic.
−Removed: Among the numerous provisions contained in the CARES Act was the creation of the $349 billion PPP, which provided for small business, including some of our customers, to receive forgivable SBA-backed loans to pay certain employee compensation and other basic expenses.
−Removed: The PPP/HCE Act included an additional $310 billion for PPP funding.
−Removed: The Consolidated Appropriations Act, 2021, enacted on December 27, 2020, provided additional funding for the PPP of approximately $284 billion and allowed eligible borrowers, including certain borrowers who already received a PPP loan, to apply for “second draw” PPP loans through March 31, 2021.
−Removed: Subsequent legislation expanded the eligibility criteria for both first and second draw PPP loans and extended the deadline to apply for PPP loans through May 31, 2021, among other things.
−Removed: In 2020, we established an SBA Paycheck Protection Program task force and funded $767.4 million in loans under these programs.
−Removed: As of December 31, 2021, 84.5% of these PPP loans have been forgiven by the SBA.
−Removed: We also have offered forbearance (90-day extensions) and modification agreements to our customers affected by the COVID-19 pandemic.
−Removed: Additionally, in light of the volatility and disruptions in the capital and credit markets resulting from the COVID-19 pandemic and its negative impact on the economy, we took a number of precautionary actions to enhance our financial flexibility by bolstering our liquidity to ensure we have adequate cash readily available to meet both expected and unexpected funding needs.
−Removed: Origin Bank completed an offering in February 2020 of $70.0 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030, and the Company completed an offering in October 2020 of $80.0 million in aggregate principal amount of 4.50% fixed to floating rate subordinated notes due 2030.
−Removed: There is significant ongoing uncertainty surrounding the course of the COVID-19 pandemic, including the possible implementation of new or additional restrictions on economic activity, effectiveness of the vaccines on COVID-19 and its variants, the magnitude and duration of the continued disruption to economic activity, particularly its impact on supply chain and the current human resource shortages, and how this disruption will continue to impact demand for our products and services.
−Removed: It is difficult to forecast specific performance targets or time frames while the effects of the COVID-19 pandemic continue to be felt.
−Removed: We are actively monitoring and responding to developments across our markets related to measures designed to stop the spread of COVID-19, including social, financial, legal, regulatory and governmental measures and the impact on our business, customers and employees.
Corporate Information
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The information contained on, or accessible from, our website does not constitute a part of this Annual Report on Form 10-K and is not incorporated by reference herein.
−Removed: Regulation and Supervision
−Removed: banking industry is highly regulated under federal and state law.
−Removed: Our growth and earnings performance will be affected by management decisions, general and local economic conditions, statutes administered by, and the regulations and policies of, various governmental regulatory authorities.
−Removed: These authorities include the Federal Reserve, Federal Deposit Insurance Corporation ("FDIC"), Louisiana Office of Financial Institutions, Consumer Financial Protection Bureau ("Bureau"), Internal Revenue Service and state taxing authorities.
−Removed: The effect of these statutes, regulations and policies, and any changes to such statutes, regulations and policies, can be significant and cannot be predicted.
−Removed: The primary goals of the bank regulatory scheme are to maintain a safe and sound banking system, facilitate the conduct of sound monetary policy and promote fairness and transparency for financial products and services.
−Removed: The system of supervision and regulation applicable to us and our subsidiaries establishes a comprehensive framework for their respective operations and is intended primarily for the protection of the FDIC's Deposit Insurance Fund, the Bank's depositors and the public, rather than our stockholders or creditors.
−Removed: The description below summarizes certain elements of the bank regulatory framework applicable to us.
−Removed: This description is not intended to describe all laws and regulations applicable to us and our subsidiaries, and the description is qualified in its entirety by reference to the full text of the statutes, regulations, policies, interpretive letters and other written guidance that are described herein.
−Removed: Bank Holding Company Regulation
−Removed: Because we control Origin Bank, we are subject to regulation under the Bank Holding Company Act of 1956, as amended, and to supervision, examination and enforcement by the Federal Reserve.
−Removed: The Bank Holding Company Act and other federal laws subject bank holding companies to particular restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations.
−Removed: The Federal Reserve's jurisdiction also extends to any company that we directly or indirectly control, such as any nonbank subsidiaries and other companies in which we own a controlling investment.
−Removed: Financial Services Industry Reform .
−Removed: The Dodd-Frank Act, which was enacted in 2010, broadly affects the financial services industry by implementing changes to the financial regulatory landscape aimed at strengthening the sound operation of the financial services sector.
−Removed: The Dodd-Frank Act, as amended, includes provisions that, among other things:
−Removed: • apply the same leverage and risk-based capital requirements that cover insured depository institutions to bank holding companies with total assets in excess of $3 billion;
−Removed: • establish the Bureau to, among other things, establish and implement rules and regulations applicable to all entities offering consumer financial products or services;
−Removed: • permanently increase FDIC deposit insurance maximum to $250,000 and broaden the base for FDIC insurance assessments from the amount of insured deposits to average total consolidated assets less average tangible equity during the assessment period, subject to certain adjustments;
−Removed: • eliminate the upper limit for the reserve ratio designated by the FDIC each year for the Deposit Insurance Fund, increase the minimum designated reserve ratio of the deposit insurance fund from 1.15% to 1.35% of the estimated amount of total insured deposits, and eliminate the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds;
−Removed: • permit banks meeting supervisory and financial criteria to branch across state lines if the laws of the state where the new branch is to be established would permit the establishment of the branch if it were part of a bank that was chartered by such state;
−Removed: • repeal previous federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transactions and other accounts;
−Removed: • require bank holding companies and banks to be "well capitalized" and "well managed" in order to acquire banks located outside of their home state and require any bank holding company electing to be treated as a financial holding company to be "well capitalized" and "well managed;"
−Removed: • direct the Federal Reserve to establish limitations on interchange fees charged by debit card issuers with $10 billion or more in assets under a "reasonable and proportional cost" per transaction standard;
−Removed: • prohibit a banking entity under a provision known as the Volcker Rule from engaging in proprietary trading or holding an ownership interest in or sponsoring a hedge fund or a private equity fund;
−Removed: • increase regulation of consumer protections regarding mortgage originations, including originator compensation, minimum repayment standards, and prepayment consideration;
−Removed: • implement corporate governance revisions, including with regard to executive compensation and proxy access by stockholders;
−Removed: • increase the authority of the Federal Reserve to examine us and any nonbank subsidiaries.
−Removed: In May 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act ("EGRRCPA") was signed into law.
−Removed: While EGRRCPA preserves the fundamental elements of the post-Dodd-Frank Act regulatory framework, it includes modifications that are intended to result in meaningful regulatory relief both from certain provisions of the Dodd-Frank Act and from certain regulatory capital rules for smaller and certain regional banking organizations.
−Removed: Among other things, EGRRCPA exempts certain banking entities with no more than $10 billion in assets from the Volcker Rule, allows certain banking organizations with less than $10 billion in assets to avoid generally applicable capital requirements if they maintain a specific "community bank leverage ratio," revises the capital treatment of certain commercial real estate loans, and amends certain Truth in Lending Act requirements for residential mortgage loans.
−Removed: Even after the EGRRCPA modifications, the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage requirements or otherwise adversely affect our business.
−Removed: Provisions of the Dodd-Frank Act, and any future legislative or regulatory changes, may also require us to invest significant management attention and resources to evaluate and make any changes necessary to comply with new requirements.
−Removed: Failure to comply with any new requirements may negatively impact our results of operations and financial condition.
−Removed: Revised Rules on Regulatory Capital .
−Removed: The Federal Reserve monitors our capital adequacy at the holding company level by using a combination of risk-based and leverage capital ratios and considers our capital levels when taking action on various types of applications and when conducting supervisory activities.
−Removed: The risk-based capital standards are designed to make regulatory capital requirements more sensitive to differences in risk profiles among financial institutions and their holding companies, to account for off-balance sheet exposure, and to minimize disincentives for holding liquid assets.
−Removed: The regulatory capital rules applicable to us were revised, effective January 1, 2015, under the Basel III regulatory capital framework.
−Removed: These rules include a common equity Tier 1 risk-based capital requirement and establish criteria that instruments must meet to be considered common equity Tier 1 capital, additional Tier 1 capital or Tier 2 capital.
−Removed: These enhancements are designed to both improve the quality and increase the quantity of capital required to be held by banking organizations, better equipping the U.S.
−Removed: banking system to cope with adverse economic conditions.
−Removed: Under these rules, we are required to satisfy four minimum capital ratios:
−Removed: (1) a Tier 1 capital to average total consolidated assets ratio, or "leverage ratio," of at least 4.0%, (2) a common equity Tier 1 capital to risk-weighted assets ratio, or "common equity Tier 1 risk-based capital ratio," of 4.5%, (3) a Tier 1 capital to risk-weighted assets ratio, or "Tier 1 risk-based capital ratio," of at least 6.0%, and (4) a total risk-based capital (Tier 1 plus Tier 2) to risk-weighted assets ratio, or "total risk-based capital ratio," of at least 8.0%.
−Removed: The capital rules also require bank holding companies to maintain a capital conservation buffer above the minimum capital requirements composed solely of common equity Tier 1 capital in order to avoid certain restrictions on capital distributions and discretionary bonus payments to executive officers.
−Removed: Now fully phased in, the capital conservation buffer requirement effectively requires banking organizations to maintain common equity Tier 1 capital of at least 2.5% above the minimum risk-based capital requirements set forth above.
−Removed: This buffer is intended to help to ensure that banking organizations conserve capital when it is most needed, allowing them to better weather periods of economic stress.
−Removed: The revised regulatory capital rules implement stricter eligibility criteria for regulatory capital instruments, exclude certain instruments, such as trust preferred securities (other than grandfathered trust preferred securities, such as those that we have issued), from Tier 1 capital going forward, and require new adjustments to and deductions from capital for minority interests, mortgage servicing assets, deferred tax assets and certain investments in the capital of unconsolidated financial institutions.
−Removed: In addition, the rules require that most regulatory capital deductions be made from common equity Tier 1 capital.
−Removed: Compared to the prior capital rules, the current regulatory capital rules also set forth certain changes in the methods of calculating certain risk-weighted assets, which in turn will affect the calculation of risk-based capital ratios.
−Removed: Under the rules, higher or more sensitive risk weights have been assigned to various categories of assets, including, certain credit facilities that finance the acquisition, development or construction of real property, certain exposures or credits that are 90 days past due or on nonaccrual status, foreign exposures and certain corporate exposures.
−Removed: In addition, these rules include greater recognition of collateral and guarantees, and revised capital treatment for derivatives and repo-style transactions.
−Removed: These capital requirements are minimum requirements.
−Removed: The Federal Reserve may also set higher capital requirements if warranted by our risk profile, economic conditions impacting our market or other circumstances particular to our organization.
−Removed: For example, holding companies experiencing internal growth or making acquisitions are expected to maintain strong capital positions substantially above the minimum supervisory levels, without significant reliance on intangible assets.
−Removed: Failure to meet capital guidelines could subject us to a variety of enforcement remedies, including issuance of a capital directive or restrictions on our operations and expansionary activities.
−Removed: EGRRCPA exempts most banking organizations with less than $10 billion in total consolidated assets from the risk-based and leverage capital rules and the capital conservation buffer if they maintain a "community bank leverage ratio" ("CBLR") of Tier 1 capital to average total consolidated assets.
−Removed: In order to qualify for the CBLR exemption, a banking organization may not have off-balance sheet exposures totaling more than 25% of its assets or trading assets and liabilities totaling more than 5% of its assets.
−Removed: The CBLR is currently set at 9%.
−Removed: We have not elected to use the CBLR framework.
−Removed: Imposition of Liability for Undercapitalized Subsidiaries .
−Removed: Federal banking regulations require FDIC-insured banks that become undercapitalized to submit a capital restoration plan.
−Removed: The capital restoration plan of a bank controlled by a bank holding company will not be accepted by the regulators unless each company having control of the undercapitalized institution guarantees the subsidiary's compliance with the capital restoration plan up to a certain specified amount.
−Removed: Any such guarantee from a bank holding company is entitled to a priority of payment in bankruptcy.
−Removed: The aggregate liability of the holding company of an undercapitalized bank in such a guarantee is limited to the lesser of 5% of the bank's assets at the time it became undercapitalized or the amount necessary to cause the institution to be adequately capitalized.
−Removed: The federal banking agencies have greater power in situations where a bank becomes significantly or critically undercapitalized or fails to submit a capital restoration plan.
−Removed: For example, a bank holding company controlling such a bank may be required to obtain prior Federal Reserve approval of proposed dividends or to divest the bank or other affiliates.
−Removed: Acquisitions by Bank Holding Companies.
−Removed: We must obtain the prior approval of the Federal Reserve before (1) acquiring more than 5% of the voting stock of any bank or other bank holding company, (2) acquiring all or substantially all of the assets of any bank or bank holding company, or (3) merging or consolidating with any other bank holding company.
−Removed: In evaluating applications with respect to these transactions, the Federal Reserve is required to consider, among other things, the effect of the acquisition on competition, the financial condition, managerial resources and future prospects of the bank holding company and the banks concerned, the convenience and needs of the communities to be served (including the record of performance under the Community Reinvestment Act (the "CRA")), the effectiveness of the parties in combating money laundering activities, and the extent to which the proposed acquisition would result in greater or more concentrated risks to the stability of the U.S.
−Removed: banking or financial system.
−Removed: The Federal Reserve can deny an application based on the above criteria or other considerations.
−Removed: In addition, as a condition to receiving regulatory approval, the Federal Reserve can impose conditions on the acquirer or the business to be acquired, which may not be acceptable or, if acceptable, may reduce the benefit of a proposed acquisition.
−Removed: Control Acquisitions.
−Removed: Subject to various exceptions, the Bank Holding Company Act and the Change in Bank Control Act, together with related regulations, require Federal Reserve approval or non-objection prior to any person or company acquiring "control" of a bank holding company.
−Removed: Although "control" is based on all of the facts and circumstances surrounding the investment, control under the Bank Holding Company Act is conclusively presumed to exist if a person or company acquires 25% or more of any class of voting securities of the bank holding company, controls more than half of the board of directors, or is able to exercise a controlling influence over the management or policies of the company.
−Removed: Under the Change in Bank Control Act, control of a bank holding company is presumed to exist (subject to rebuttal) if the acquiring person or entity will own 10% or more of any class of voting securities immediately following the transaction and either no other person will hold a greater percentage of that class of voting securities after the acquisition or the bank holding company has publicly registered securities.
−Removed: Regulatory Restrictions on Dividends and Stock Repurchases .
−Removed: As a bank holding company, we are subject to certain restrictions on dividends under applicable banking laws and regulations.
−Removed: The Federal Reserve has issued a supervisory letter that provides that a bank holding company should not pay dividends unless:
−Removed: (1) its net income over the last four quarters (net of dividends paid) has been sufficient to fully fund the dividends;
−Removed: (2) the prospective rate of earnings retention is consistent with the capital needs, asset quality and overall financial condition of the bank holding company;
−Removed: and (3) the bank holding company will continue to meet, and is not in danger of failing to meet, minimum regulatory capital adequacy ratios.
−Removed: Failure to comply with the supervisory letter could result in a supervisory finding that the bank holding company is operating in an unsafe and unsound manner.
−Removed: In addition, our ability to pay dividends may also be limited if we must maintain the capital conservation buffer under the regulatory capital rules.
−Removed: In the current financial and economic environment, the Federal Reserve Board has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.
−Removed: The Federal Reserve may further restrict the payment of dividends by engaging in supervisory action to restrict dividends or by requiring us to maintain a higher level of capital then would otherwise be required under the capital rules.
−Removed: Additionally, the Federal Reserve's Regulation Y generally requires a bank holding company to provide the Federal Reserve with prior notice of any redemption or repurchase of its own equity securities, if the consideration to be paid, together with the consideration paid for any repurchases or redemptions in the preceding year, is equal to 10.0% or more of the bank holding company's consolidated net worth.
−Removed: The Federal Reserve may oppose the transaction if it believes that the transaction would constitute an unsafe or unsound practice or would violate any law or regulation.
−Removed: In certain circumstances, the Federal Reserve could take the position that paying a dividend would constitute an unsafe or unsound banking practice.
−Removed: Source of Strength.
−Removed: Under longstanding Federal Reserve policy, which has been codified by the Dodd-Frank Act, we are expected to act as a source of financial strength to, and to commit resources to support, Origin Bank.
−Removed: This support may be required at times when we may not otherwise be inclined to provide it.
−Removed: In addition, any capital loans that we make to Origin Bank are subordinate in right of payment to deposits and to certain other indebtedness of Origin Bank.
−Removed: As discussed above, in certain circumstances, we could also be required to guarantee the capital restoration plan of Origin Bank, if it became undercapitalized for purposes of the Federal Reserve's prompt corrective action regulations.
−Removed: In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of Origin Bank under a capital restoration plan would be assumed by the bankruptcy trustee and entitled to a priority of payment.
−Removed: Scope of Permissible Activities .
−Removed: In general, the Bank Holding Company Act limits the activities permissible for bank holding companies to the business of banking, managing or controlling banks and such other activities as the Federal Reserve has determined to be so closely related to banking as to be properly incident thereto.
−Removed: Permissible activities for a bank holding company include, among others, operating a mortgage, finance, credit card or factoring company;
−Removed: performing certain data processing operations;
−Removed: providing investment and financial advice;
−Removed: acting as an insurance agent for certain types of credit-related insurance;
−Removed: leasing personal property on a full-payout, non-operating basis;
−Removed: and providing certain stock brokerage services.
−Removed: A bank holding company may also make an investment of up to 5% of any class of voting securities of any company that is otherwise a non-controlling investment.
−Removed: A bank holding company may elect to become a financial holding company, as we have done, and may thereby engage in activities that are (1) financial in nature or incidental to such financial activity or (2) complementary to a financial activity and that do not pose a substantial risk to the safety and soundness of a depository institution or to the financial system generally.
−Removed: These activities include securities dealing, underwriting and market-making, insurance underwriting and agency activities, merchant banking and insurance company portfolio investments.
−Removed: Expanded financial activities of financial holding companies generally will be regulated according to the type of such financial activity:
−Removed: banking activities by banking regulators, securities activities by securities regulators and insurance activities by insurance regulators.
−Removed: A bank holding company may elect to be treated as a financial holding company if it is "well capitalized" and "well managed" and if each of its depository institution subsidiaries is "well capitalized" and "well managed," and has received a rating of not less than Satisfactory on each such institution's most recent examinations under the CRA.
+Added: Supervision, Regulation and Other Factors
+Added: We are extensively regulated under federal and state law.
+Added: The following is a brief summary that does not purport to be a complete description of all regulations that affect us or all aspects of those regulations.
+Added: This discussion is qualified in its entirety by reference to the particular statutory and regulatory provisions described below and is not intended to be an exhaustive description of the statutes or regulations applicable to the Company’s and Origin Bank’s business.
+Added: In addition, proposals to change the laws and regulations governing the banking industry are frequently raised at both the state and federal levels.
+Added: The likelihood and timing of any changes in these laws and regulations, and the impact such changes may have on us and Origin Bank, are difficult to predict.
+Added: Regulatory agencies may issue enforcement actions, policy statements, interpretive letters and similar written guidance applicable to us or to Origin Bank.
+Added: Changes in applicable laws, regulations or regulatory guidance, or their interpretation by regulatory agencies or courts may have a material adverse effect on our and Origin Bank’s business, operations, and earnings.
+Added: Origin Bank, and in some cases, we and our nonbank affiliates, must undergo regular examinations by the appropriate regulatory agency, which will examine for adherence to a range of legal and regulatory compliance responsibilities.
+Added: A bank regulator conducting an examination has complete access to the books and records of the examined institution.
+Added: The results of the examination are confidential.
+Added: Supervision and regulation of banks, their holding companies and affiliates is intended primarily for the protection of depositors and clients, the Deposit Insurance Fund (the “DIF”) of the FDIC, and the U.S.
+Added: banking and financial system rather than holders of our securities.
+Added: Regulation of the Company
+Added: We are registered as a bank holding company with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the Bank Holding Company Act, as amended (the “BHC Act”) and have elected to be treated as a financial holding company.
+Added: As such, we are subject to comprehensive supervision and regulation by the Federal Reserve and are subject to its regulatory reporting requirements.
+Added: Federal law subjects bank holding companies, such as the Company, to restrictions on the types of activities in which they may engage, and to a range of supervisory requirements.
+Added: In addition, the Louisiana Office of Financial Institutions (the “OFI”) regulates bank holding companies that own Louisiana-chartered banks, such as us, under the bank holding company laws of the State of Louisiana.
+Added: Various federal and state bodies regulate and supervise our non-bank activities including our insurance agency activities.
+Added: These include, but are not limited to, various state regulators of insurance activities.
+Added: Violations of laws and regulations, or other unsafe and unsound practices, may result in regulatory agencies imposing fines or penalties, cease and desist orders, or taking other enforcement actions.
+Added: Under certain circumstances, these agencies may enforce these remedies directly against officers, directors, employees and other parties participating in the affairs of a bank or bank holding company.
+Added: Like all bank holding companies, we are regulated extensively under federal and state law.
+Added: Under federal and state laws and regulations pertaining to the safety and soundness of insured depository institutions, state banking regulators, the Federal Reserve, and separately the FDIC as the insurer of bank deposits, have the authority to compel or restrict certain actions on our part if they determine that we have insufficient capital or other resources, or are otherwise operating in a manner that may be deemed to be inconsistent with safe and sound banking practices.
+Added: Under this authority, our regulators can require us or our subsidiaries to enter into informal or formal supervisory agreements, including board resolutions, memoranda of understanding, written agreements and consent or cease and desist orders, pursuant to which we would be required to take identified corrective actions to address cited concerns and to refrain from taking certain actions.
+Added: If we become subject to and are unable to comply with the terms of any regulatory actions or directives, supervisory agreements, or orders, then we could become subject to additional, heightened supervisory actions and orders, possibly including prompt corrective action restrictions and/or other regulatory actions, including prohibitions on the payment of dividends on our common stock and preferred stock.
+Added: If our regulators were to take such supervisory actions, then we could, among other things, become subject to significant restrictions on our ability to develop any new business, as well as restrictions on our existing business, and we could be required to raise additional capital, dispose of certain assets and liabilities within a prescribed period of time, or both.
+Added: The terms of any such action could have a material negative effect on our business, reputation, operating flexibility, financial condition, and the value of our securities.
+Added: Activity Limitations
+Added: As a financial holding company, we are permitted to engage directly or indirectly in a broader range of activities than those permitted for a bank holding company that has not elected to be a financial holding company.
+Added: Bank holding companies are generally restricted to engaging in the business of banking, managing or controlling banks and certain other activities determined by the Federal Reserve to be closely related to banking.
+Added: Financial holding companies may also engage in activities that are considered to be financial in nature, as well as those incidental or, if determined by the Federal Reserve, complementary to financial activities.
We rely on our financial holding company status to engage in insurance agency activities.
−Removed: If we fail to continue to meet any of the requirements for financial holding company status, we may be required to enter into an agreement with the Federal Reserve to comply with all applicable capital and management requirements within a certain period of time or lose our financial holding company designation, which could also result in a requirement to divest any businesses for which financial holding company status was required.
−Removed: In addition, the Federal Reserve may place limitations on our ability to conduct the broader financial activities permissible for financial holding companies during any period of noncompliance.
−Removed: Volcker Rule.
−Removed: Section 13 of the Bank Holding Company Act, commonly known as the "Volcker Rule," has generally prohibited insured depository institutions and their affiliates from sponsoring or acquiring an ownership interest in certain investment funds, including hedge funds and private equity funds.
−Removed: The Volcker Rule also places restrictions on proprietary trading.
−Removed: EGRRCPA exempts insured depository institutions with $10 billion or less in total consolidated assets and with total trading assets and liabilities of less than 5% of total consolidated assets from the Volcker Rule, and the Federal Reserve has effectively extended the exemption to bank holding companies.
−Removed: Safe and Sound Banking Practices .
−Removed: Bank holding companies are not permitted to engage in unsafe and unsound banking practices.
−Removed: The Federal Reserve has broad authority to prohibit activities of bank holding companies and their nonbanking subsidiaries which represent unsafe and unsound banking practices, result in breaches of fiduciary duty or which constitute violations of laws or regulations, and can assess civil money penalties or take other enforcement action to remedy such activities, practices or violations.
−Removed: Bank Regulation
−Removed: Origin Bank is a commercial bank chartered under the laws of the State of Louisiana and is a member of the Federal Reserve System.
−Removed: In addition, its deposits are insured by the FDIC to the maximum extent permitted by law.
−Removed: As a result, Origin Bank is subject to extensive regulation, supervision and examination by the Louisiana Office of Financial Institutions and the Federal Reserve.
−Removed: As an insured depository institution, the bank is subject to regulation by the FDIC in its capacity as deposit insurer, although the Federal Reserve is the Bank's primary federal regulator.
−Removed: Origin Bank is also subject to secondary oversight by state banking authorities in other states in which it maintains banking offices.
−Removed: The bank regulatory agencies have the power to enforce compliance with applicable banking laws and regulations.
−Removed: These requirements and restrictions include restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon and restrictions relating to investments and other activities of Origin Bank.
−Removed: Origin Bank also is subject to consumer financial protection regulations that are promulgated by the Bureau.
−Removed: Capital Adequacy Requirements.
−Removed: The Federal Reserve and Louisiana Office of Financial Institutions monitor the capital adequacy of Origin Bank by using a combination of risk-based and leverage capital ratios similar to those applied at the holding company level.
−Removed: These agencies consider the bank's capital levels when taking action on various types of applications and when conducting supervisory activities related to the safety and soundness of the bank and the banking system.
−Removed: Under the revised capital rules that became effective on January 1, 2015, Origin Bank is required to maintain four minimum capital ratios:
−Removed: (1) a leverage ratio of at least 4.0%, (2) a common equity Tier 1 risk-based capital ratio of 4.5%, (3) a Tier 1 risk-based capital ratio of at least 6.0%, and (4) a total risk-based capital ratio of at least 8.0%.
−Removed: The capital rules also require FDIC-insured banks to maintain a capital conservation buffer of common equity Tier capital of at least 2.5% above the minimum risk-based capital ratios to avoid certain restrictions on capital distributions and discretionary bonus payments to executive officers.
−Removed: These capital requirements are minimum requirements.
−Removed: The Federal Reserve or Louisiana Office of Financial Institutions may also set higher capital requirements if warranted by the risk profile of Origin Bank, economic conditions impacting its markets or other circumstances particular to Origin Bank.
−Removed: For example, Federal Reserve guidance provides that higher capital may be required to take adequate account of, among other things, interest rate risk and the risks posed by concentrations of credit, nontraditional activities or securities trading activities.
−Removed: In addition, the Federal Reserve's prompt corrective action regulations discussed below may, in effect, increase the minimum regulatory capital ratios for banking organizations.
−Removed: Failure to meet capital guidelines could subject Origin Bank to a variety of enforcement remedies, including issuance of a capital directive, restrictions on business activities and other measures under the Federal Reserve's prompt corrective action regulations.
−Removed: The CBLR framework is available to banks with less than $10 billion in total consolidated assets that do not have more than 25% of its assets in off-balance sheet exposures, nor may it have more than 5% of assets in trading assets and liabilities.
−Removed: We discuss the CBLR further above under “Bank Holding Company Regulation—Revised Rules on Regulatory Capital.” Origin Bank has not elected to use the CBLR framework.
−Removed: Corrective Measures for Capital Deficiencies.
−Removed: The federal banking regulators are required by the Federal Deposit Insurance Act to take "prompt corrective action" with respect to capital-deficient banks that are FDIC-insured.
−Removed: For the purpose of this framework, every bank is placed in one of the following five capital tiers:
−Removed: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized" and "critically undercapitalized." The bank's capital tier depends upon how its capital levels compare with various relevant capital measures and certain other factors, as established by regulation.
−Removed: To be well capitalized, a bank must have a total risk-based capital ratio of at least 10.0%, a Tier 1 risk-based capital ratio of at least 8.0%, a common equity Tier 1 risk-based capital ratio of at least 6.5%, and a leverage ratio of at least 5.0%, and must not be subject to any written agreement, order or directive requiring it to maintain a specific capital level for any capital measure.
−Removed: At December 31, 2021, Origin Bank met the requirements to be categorized as well capitalized under the prompt corrective action framework currently in effect.
−Removed: As a bank's capital decreases, the bank comes under increasing scrutiny by its primary federal regulators.
−Removed: Banks that are adequately, but not well, capitalized may not accept, renew or rollover brokered deposits except with a waiver from the FDIC and are subject to restrictions on the interest rates that can be paid on their deposits.
−Removed: The Federal Reserve's prompt corrective action regulations also generally prohibit a bank from making any capital distributions (including payment of a dividend) or paying any management fee to its parent holding company if an otherwise adequately capitalized bank would thereafter be undercapitalized.
−Removed: Undercapitalized banks are also subject to growth limitations, may not accept, renew or rollover brokered deposits, and are required to submit a capital restoration plan.
−Removed: The Federal Reserve may not accept such a plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the bank's capital.
−Removed: Significantly undercapitalized banks may be subject to a number of additional requirements and restrictions, including orders to sell sufficient shares or obligations to become adequately capitalized, limitations on asset growth, and cessation of receipt of deposits from correspondent banks.
−Removed: Generally, subject to a narrow exception, the FDIC must appoint a receiver or conservator for an institution that is critically undercapitalized.
−Removed: The capital classification of a bank also affects the bank's ability to engage in certain activities and the deposit insurance premiums paid by the bank.
−Removed: Bank Mergers.
−Removed: Section 18(c) of the Federal Deposit Insurance Act, known as the "Bank Merger Act," requires the written approval of a bank's primary federal regulator before the bank may (1) acquire through merger or consolidation, (2) purchase or otherwise acquire the assets of, or (3) assume the deposit liabilities of another bank.
−Removed: The Bank Merger Act prohibits the reviewing agency from approving any proposed merger transaction that would result in a monopoly, or would further a combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the United States.
−Removed: Similarly, the Bank Merger Act prohibits the reviewing agency from approving a proposed merger transaction, the effect of which in any section of the country may be to substantially lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade.
−Removed: An exception may be made in the case of a merger transaction, the effect of which would be to substantially lessen competition, tend to create a monopoly, or otherwise restrain trade, if the reviewing agency finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
−Removed: In every proposed merger transaction, the reviewing agency must also consider the financial and managerial resources and future prospects of the existing and proposed institutions, the convenience and needs of the community to be served, and the effectiveness of each insured depository institution involved in the proposed merger transaction in combating money-laundering activities.
−Removed: Under Louisiana law, Origin Bank is permitted to establish additional branch offices within Louisiana, subject to the approval of the Louisiana Office of Financial Institutions.
−Removed: As a result of the Dodd-Frank Act, the Bank may also establish additional branch offices outside of Louisiana, subject to prior regulatory approval, so long as the laws of the state where the branch is to be located would permit a state bank chartered in that state to establish a branch and the Bank meets certain supervisory and financial criteria.
−Removed: Any new branch, whether located inside or outside of Louisiana, must also be approved by the Federal Reserve, as the Bank's primary federal regulator.
−Removed: Origin Bank may also establish offices in other states by merging with banks or by purchasing branches of other banks in other states, subject to certain restrictions.
−Removed: Restrictions on Transactions with Affiliates and Insiders .
−Removed: Federal law strictly limits the ability of banks to engage in transactions with their affiliates, including their bank holding companies.
−Removed: Sections 23A and 23B of the Federal Reserve Act, and the Federal Reserve's Regulation W, impose quantitative limits, qualitative standards and collateral requirements on certain transactions by a bank with, or for the benefit of, its affiliates.
−Removed: Generally, Sections 23A and 23B (1) limit the extent to which the bank or its subsidiaries may engage in "covered transactions" with any one affiliate to an amount equal to 10% of the bank's capital stock and surplus, and limit the aggregate of all such transactions with all affiliates to an amount equal to 20% of its capital stock and surplus, and (2) require that a broader set of affiliate transactions be on terms substantially the same, or at least as favorable, to the bank or subsidiary as those that would be offered to a non-affiliate.
−Removed: The term "covered transaction" includes the making of loans to an affiliate, the purchase of assets from an affiliate, the issuance of a guarantee on behalf of an affiliate, and several other types of transactions.
−Removed: The Dodd-Frank Act expanded the coverage and scope of the limitations on affiliate transactions within a banking organization, including an expansion of what types of transactions are covered transactions to include credit exposures related to derivatives, repurchase agreements and securities lending arrangements and an increase in the amount of time for which collateral requirements regarding covered transactions must be satisfied.
−Removed: Federal law also limits a bank's authority to extend credit to its directors, executive officers and 10% stockholders, as well as to entities controlled by such persons.
−Removed: Among other things, extensions of credit to insiders are required to be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons.
−Removed: Also, the terms of such extensions of credit may not involve more than the normal risk of repayment or present other unfavorable features and may not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the bank's capital.
−Removed: Loans to senior executive officers of a bank are subject to additional restrictions.
−Removed: Insiders may be subject to enforcement actions for accepting loans in violation of applicable restrictions.
−Removed: Regulatory Restrictions on Dividends .
+Added: If Origin Bank ceases to be “well capitalized” or “well managed” under applicable regulatory standards, or if Origin Bank receives a rating of less than satisfactory under the Community Reinvestment Act, the Federal Reserve may, among other things, place limitations on our ability to conduct these broader financial activities or, if the deficiencies persist, require us to divest the banking subsidiary or the businesses engaged in activities permissible only for financial holding companies.
+Added: In addition, the Federal Reserve has the power to order a bank holding company or its subsidiaries to terminate any nonbanking activity or terminate its ownership or control of any nonbank subsidiary, when it has reasonable cause to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any bank subsidiary of that bank holding company.
+Added: As further described below, each of the Company and Origin Bank is well-capitalized under applicable regulatory standards as of December 31, 2022, and Origin Bank has an overall rating of “Satisfactory” in its most recent CRA evaluation.
+Added: Source of Strength Obligations
+Added: A bank holding company, such as us, is required to act as a source of financial and managerial strength to its subsidiary bank.
+Added: The term “source of financial strength” means the ability of a company, such as us, that directly or indirectly owns or controls an insured depository institution, such as Origin Bank, to provide financial assistance to such insured depository institution in the event of financial distress.
+Added: The appropriate federal banking agency for the depository institution (in the case of Origin Bank, this agency is the Federal Reserve) may require reports from us to assess our ability to serve as a source of strength and to enforce compliance with the source of strength requirements by requiring us to provide financial assistance to Origin Bank in the event of financial distress.
+Added: If we were to enter bankruptcy or become subject to the orderly liquidation process established by the Dodd-Frank Act, any commitment by us to a federal bank regulatory agency to maintain the capital of Origin Bank would be assumed by the bankruptcy trustee or the FDIC, as appropriate, and entitled to a priority of payment.
+Added: In addition, the FDIC provides that any insured depository institution generally will be liable for any loss incurred by the FDIC in connection with the default of, or any assistance provided by the FDIC to, a commonly controlled insured depository institution.
+Added: Origin Bank is an FDIC-insured depository institution and thus subject to these requirements.
+Added: The BHC Act permits acquisitions of banks by bank holding companies, such that we and any other bank holding company, whether located in Louisiana or elsewhere, may acquire a bank located in any other state, subject to certain deposit-percentage, age of bank charter requirements, and other restrictions.
+Added: The BHC Act requires that a bank holding company obtain the prior approval of the Federal Reserve before (i) acquiring direct or indirect ownership or control of more than 5% of the voting shares of any additional bank or bank holding company, (ii) taking any action that causes an additional bank or bank holding company to become a subsidiary of the bank holding company, or (iii) merging or consolidating with any other bank holding company.
+Added: The Federal Reserve may not approve any such transaction that would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any section of the United States, or the effect of which may be substantially to lessen competition or to tend to create a monopoly in any section of the country, or that in any other manner would be in restraint of trade, unless the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
+Added: The Federal Reserve is also required to consider:
+Added: (1) the financial and managerial resources of the companies involved, including pro forma capital ratios;
+Added: (2) the risk to the stability of the United States banking or financial system;
+Added: (3) the convenience and needs of the communities to be served, including performance under the CRA;
+Added: and (4) the effectiveness of the company in combatting money laundering.
+Added: Change in Control
+Added: Federal law restricts the amount of voting stock of a bank holding company or a bank that a person may acquire without the prior approval of banking regulators.
+Added: Under the Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to the Federal Reserve before acquiring control of any bank holding company, such as the Company, or before acquiring control of any FDIC-insured bank, such as Origin Bank.
+Added: Upon receipt of such notice, the Federal Reserve may approve or disapprove the acquisition.
+Added: The Change in Bank Control Act creates a rebuttable presumption of control if a person or group acquires the power to vote 10% or more of our outstanding common stock.
+Added: The overall effect of such laws is to make it more difficult to acquire a bank holding company and a bank by tender offer or similar means than it might be to acquire control of another type of corporation.
+Added: Consequently, shareholders of the Company may be less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to acquire control of other companies.
+Added: Investors should be aware of these requirements when acquiring shares of our stock.
+Added: Governance and Financial Reporting Obligations
+Added: We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC, the Public Company Accounting Oversight Board ("PCAOB"), and the Nasdaq.
+Added: In particular, we are required to include management and independent registered public accounting firm reports on internal controls as part of our Annual Report on Form 10-K in order to comply with Section 404 of the Sarbanes-Oxley Act.
+Added: We have evaluated our controls, including compliance with the SEC rules on internal controls, and have and expect to continue to spend significant amounts of time and money on compliance with these rules.
+Added: Our failure to comply with these internal control rules may materially adversely affect our reputation, ability to obtain the necessary certifications to financial statements, and the values of our securities.
+Added: Section 13 of the BHC Act, commonly referred to as the “Volcker Rule,” generally prohibits banking organizations from (i) engaging in certain proprietary trading, and (ii) acquiring or retaining an ownership interest in or sponsoring a “covered fund,” all subject to certain exceptions.
+Added: The Volcker Rule also specifies certain limited activities in which banking organizations may continue to engage and requires us to maintain a compliance program.
+Added: Banking organizations, such as us, with $10 billion or less in total consolidated assets and with total trading assets and liabilities of less than 5% of total consolidated assets are exempt from the Volcker Rule.
+Added: Incentive Compensation
+Added: The Dodd-Frank Act required the federal banking agencies and the SEC to establish joint rules or guidelines for financial institutions with more than $1 billion in assets, such as us and Origin Bank, which prohibit incentive compensation arrangements that the agencies determine to encourage inappropriate risks by the institution.
+Added: The federal banking agencies issued proposed rules in 2011 and previously issued guidance on sound incentive compensation policies.
+Added: In 2016, the federal banking agencies and the SEC proposed rules that would, depending upon the assets of the institution, directly regulate incentive compensation arrangements and would require enhanced oversight and recordkeeping.
+Added: As of December 31, 2022, these rules have not been implemented.
+Added: Further, the capital conservation buffer described above would limit discretionary bonus payments to bank executives if the institution's regulatory capital ratios failed to exceed certain thresholds.
+Added: We and Origin Bank have undertaken efforts to ensure that our incentive compensation plans do not encourage inappropriate risks, consistent with three key principles - that incentive compensation arrangements should appropriately balance risk and financial rewards, be compatible with effective controls and risk management, and be supported by strong corporate governance.
+Added: Other Regulatory Matters
+Added: We and our subsidiaries are subject to oversight by the SEC, the PCAOB, the Nasdaq, and various state securities and insurance regulators.
+Added: We and our subsidiaries have from time to time received requests for information from regulatory authorities in various states, including state attorneys general, securities regulators and other regulatory authorities, concerning our business practices.
+Added: Such requests are considered incidental to the normal conduct of business.
+Added: Capital Requirements
+Added: We and Origin Bank are required under federal law to maintain certain minimum capital levels based on ratios of capital to total assets and capital to risk-weighted assets.
+Added: The required capital ratios are minimums, and the Federal Reserve may determine that a banking organization, based on its size, complexity or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner.
+Added: Risks such as concentration of credit risks and the risk arising from non-traditional activities, as well as the institution’s exposure to a decline in the economic value of its capital due to changes in interest rates, and an institution’s ability to manage those risks, are important factors that are to be taken into account in assessing an institution’s overall capital adequacy.
+Added: The following is a brief description of the relevant provisions of these capital rules and their potential impact on our capital levels.
+Added: We and Origin Bank are subject to the following risk-based capital ratios:
+Added: a CET1 risk-based capital ratio, a Tier 1 risk-based capital ratio, which includes CET1 and additional Tier 1 capital, and a total risk-based capital ratio, which includes Tier 1 and Tier 2 capital.
+Added: CET1 is primarily comprised of the sum of common stock instruments and related surplus net of treasury stock plus retained earnings less certain adjustments and deductions, including with respect to goodwill, intangible assets, mortgage servicing assets and deferred tax assets subject to temporary timing differences.
+Added: Additional Tier 1 capital is primarily comprised of noncumulative perpetual preferred stock.
+Added: Tier 2 capital consists of instruments disqualified from Tier 1 capital, including qualifying subordinated debt and a limited amount of loan loss reserves up to a maximum of 1.25% of risk-weighted assets, subject to certain eligibility criteria.
+Added: The capital rules also define the risk-weights assigned to assets and off-balance sheet items to determine the risk-weighted asset components of the risk-based capital rules, including, for example, certain “high volatility” commercial real estate, past due assets, structured securities and equity holdings.
+Added: The leverage capital ratio, which serves as a minimum capital standard, is the ratio of Tier 1 capital to quarterly average total consolidated assets net of goodwill, certain other intangible assets, and certain required deduction items.
+Added: The required minimum leverage ratio for all banks and bank holding companies is 4%.
+Added: In addition, effective January 1, 2019, the capital rules required a capital conservation buffer of 2.5%, comprised of CET1, above each of the minimum risk-based capital ratio requirements (CET1, Tier 1, and total capital), which is designed to absorb losses during periods of economic stress.
+Added: These buffer requirements must be met for a bank or bank holding company to be able to pay dividends, engage in share buybacks or make discretionary bonus payments to executive management without restriction.
+Added: The FDICIA, among other things, requires the federal bank regulatory agencies to take “prompt corrective action” regarding depository institutions that do not meet minimum capital requirements.
+Added: FDICIA establishes five regulatory capital tiers:
+Added: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”, and “critically undercapitalized”.
+Added: A depository institution’s capital tier will depend upon how its capital levels compare to various relevant capital measures and certain other factors, as established by regulation.
+Added: FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized.
+Added: The FDICIA imposes progressively more restrictive restraints on operations, management and capital distributions, depending on the category in which an institution is classified.
+Added: Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System.
+Added: In addition, undercapitalized depository institutions may not accept brokered deposits absent a waiver from the FDIC, are subject to growth limitations and are required to submit capital restoration plans for regulatory approval.
+Added: A depository institution's holding company must guarantee any required capital restoration plan, up to an amount equal to the lesser of 5% of the depository institution's assets at the time it becomes undercapitalized or the amount of the capital deficiency when the institution fails to comply with the plan.
+Added: Federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution's capital.
+Added: If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized.
+Added: To be well-capitalized, Origin Bank must maintain at least the following capital ratios:
+Added: • 6.5% CET1 to risk-weighted assets;
+Added: • 8.0% Tier 1 capital to risk-weighted assets;
+Added: • 10.0% Total capital to risk-weighted assets;
+Added: • 5.0% leverage ratio.
+Added: The Federal Reserve has not yet revised the well-capitalized standard for bank holding companies to reflect the higher capital requirements imposed under the current capital rules applicable to banks.
+Added: For purposes of the Federal Reserve’s Regulation Y, including determining whether a bank holding company meets the requirements to be a financial holding company, bank holding companies, such as the Company, must maintain a Tier 1 risk-based capital ratio of 6.0% or greater and a total risk-based capital ratio of 10.0% or greater to be well-capitalized.
+Added: Also, the Federal Reserve may require bank holding companies, including the Company, to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a bank holding company’s particular condition, risk profile and growth plans.
+Added: Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition.
+Added: Failure to meet minimum capital requirements could also result in restrictions on the Company’s or Origin Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth.
+Added: In 2022, the Company’s and Origin Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer.
+Added: Based on current estimates, we believe that the Company and Origin Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer in 2023.
+Added: Please see Note 18 - Capital and Regulatory Matters in the notes to the consolidated financial statements for consolidated capital ratios of the Company and Origin Bank as of December 31, 2022.
+Added: Payment of Dividends
+Added: We are a legal entity separate and distinct from Origin Bank and our other subsidiaries.
+Added: Under the laws of the State of Louisiana, we, as a business corporation, may declare and pay dividends in cash or property unless the payment or declaration would be contrary to restrictions contained in our Articles of Incorporation, or unless, after payment of the dividend, we would not be able to pay our debts when they become due in the usual course of our business or our total assets would be less than the sum of our total liabilities.
+Added: In addition, we are also subject to federal regulatory capital requirements that effectively limit the amount of cash dividends that we may pay.
+Added: The primary sources of funds for our payment of dividends to our shareholders are cash on hand and dividends from Origin Bank and our non-bank subsidiaries.
+Added: Various federal and state statutory provisions and regulations limit the amount of dividends that Origin Bank may pay.
Origin Bank is subject to certain restrictions on dividends under federal and state laws, regulations and policies.
3 unchanged sentences
Further, under federal law, Origin Bank may not pay any dividend to us if it is undercapitalized or the payment of the dividend would cause it to become undercapitalized.
−Removed: In addition, Origin Bank may not declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of its net income during the current calendar year and the retained net income of the prior two calendar years, unless the dividend has been approved by the Federal Reserve.
−Removed: The Federal Reserve may further restrict the payment of dividends by requiring the bank to maintain a higher level of capital than would otherwise be required to be adequately capitalized for regulatory purposes.
−Removed: Under the capital rules, the failure to maintain an adequate capital conservation buffer, as discussed above, may also result in dividend restrictions.
−Removed: Moreover, if, in the opinion of the Federal Reserve, Origin Bank is engaged in an unsound practice (which could include the payment of dividends), the Federal Reserve may require, generally after notice and hearing, the bank to cease such practice.
−Removed: The Federal Reserve has indicated that paying dividends that deplete a depository institution's capital base to an inadequate level would be an unsafe banking practice.
−Removed: The Federal Reserve has also issued guidance providing that a member bank generally should pay dividends only when (1) the bank's net income available to common stockholders over the past year has been sufficient to fully fund the dividends and (2) the prospective rate of earnings retention appears consistent with the bank's capital needs, asset quality, and overall financial condition.
−Removed: Incentive Compensation Guidance .
−Removed: The federal banking agencies have issued comprehensive guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of those organizations by encouraging excessive risk-taking.
−Removed: The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk management, control and governance processes.
−Removed: The incentive compensation guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon three primary principles:
−Removed: (1) balanced risk-taking incentives, (2) compatibility with effective controls and risk management and (3) strong corporate governance.
−Removed: Any deficiencies in compensation practices that are identified may be incorporated into the organization's supervisory ratings, which can affect its ability to make acquisitions or take other actions.
−Removed: In addition, under the incentive compensation guidance, a banking organization's federal supervisor may initiate enforcement action if the organization's incentive compensation arrangements pose a risk to the safety and soundness of the organization.
−Removed: Further, the capital conservation buffer described above would limit discretionary bonus payments to bank executives if the institution's regulatory capital ratios failed to exceed certain thresholds.
−Removed: The scope and content of the U.S.
−Removed: banking regulators' policies on executive compensation are continuing to develop and evolve.
−Removed: The agencies (together with certain other federal agencies) proposed a regulation in 2016 on incentive compensation (as required by the Dodd-Frank Act) but have not finalized it.
−Removed: Deposit Insurance Assessments .
−Removed: FDIC-insured banks are required to pay deposit insurance assessments to the FDIC.
−Removed: The amount of the assessment is based on the size of the bank's assessment base, which is equal to its average consolidated total assets less its average tangible equity, and its risk classification under an FDIC risk-based assessment system.
−Removed: The FDIC has revised its methodology for determining assessments from time to time.
−Removed: The current methodology, which has been in place since the third quarter of 2016, has a range of assessment rates from 1.5 basis points to 30 basis points on insured deposits of small banks such as Origin Bank.
−Removed: An institution’s assessment rate is determined by a number of factors and metrics, including the weighted average of the institution’s CAMELS composite rating.
−Removed: The rate may be adjusted by the institution’s long-term unsecured debt and its brokered deposits.
−Removed: The FDIC may adjust assessment rates downward as the reserve ratio of the Deposit Insurance Fund ("DIF") exceeds 2.0% and higher thresholds.
−Removed: The FDIC can also impose special assessments in certain instances.
−Removed: Since the outbreak of the COVID-19 pandemic, the amount of total estimated insured deposits has grown rapidly while the funds in the DIF have grown at a normal rate, causing the DIF reserve ratio to fall below the statutory minimum of 1.35%.
−Removed: The FDIC adopted a restoration plan on September 15, 2020, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028.
−Removed: Under the restoration plan, the FDIC will continue to closely monitor the factors that affect the DIF reserve ratio and maintain its current schedule of assessment rates.
−Removed: If there are additional bank or financial institution failures or if the FDIC otherwise determines to increase assessment rates, Origin Bank may be required to pay higher FDIC insurance premiums.
+Added: In addition, we and Origin Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums.
+Added: The Federal Reserve has indicated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsafe and unsound banking practice.
+Added: The Federal Reserve has indicated that depository institutions and their holding companies should generally pay dividends only out of current operating earnings.
+Added: Under a Federal Reserve policy adopted in 2009, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to maintaining a strong financial position, and is not based on overly optimistic earnings scenarios, such as potential events that could affect its ability to pay, while still maintaining a strong financial position.
+Added: As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce the bank holding company’s dividends if:
+Added: • its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;
+Added: • its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition;
+Added: • it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
+Added: Regulation of the Bank
+Added: Origin Bank, which is a member of the Federal Reserve System, is subject to comprehensive supervision and regulation by the Federal Reserve, and is subject to its regulatory reporting requirements, as well as supervision and regulation by the OFI.
+Added: As a member bank of the Federal Reserve System, Origin Bank is required to hold stock in its district Federal Reserve Bank in an amount equal to 6% of its capital stock and surplus (half paid to acquire stock with the remainder held as a cash reserve).
+Added: Member banks do not have any control over the Federal Reserve System as a result of owning the stock and the stock cannot be sold or traded.
+Added: The annual dividend rate for member banks with $10 billion or less in total assets is fixed at 6%, which currently applies to us.
+Added: However, the annual dividend rate for member banks with total assets in excess of $10 billion, is based on a floating dividend rate tied to10-year U.S.
+Added: Treasuries with the maximum dividend rate capped at 6%.
+Added: The deposits of Origin Bank are insured by the FDIC up to applicable limits, and, accordingly, Origin Bank is also subject to certain FDIC regulations and the FDIC has backup examination authority and some enforcement powers over Origin Bank.
+Added: In addition, as discussed in more detail below, Origin Bank and any other of our subsidiaries that offer consumer financial products and services are subject to regulation by the CFPB.
+Added: In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the CFPB, and state attorneys general are permitted to enforce certain federal consumer financial protection law.
+Added: Broadly, regulations applicable to Origin Bank include limitations on loans to a single borrower and to its directors, officers and employees;
+Added: restrictions on the opening and closing of branch offices;
+Added: the maintenance of required capital ratios;
+Added: the granting of credit under equal and fair conditions;
+Added: the disclosure of the costs and terms of such credit;
+Added: requirements to maintain reserves against deposits and loans;
+Added: limitations on the types of investment that may be made by Origin Bank;
+Added: and requirements governing risk management practices.
+Added: Subject to Federal Reserve approval and certain state filing requirements, Origin Bank is permitted under federal law to branch on a de novo basis across state lines wherever the laws of that state would permit a bank chartered by that state to establish a branch.
+Added: Transactions with Affiliates and Insiders
+Added: Origin Bank is subject to restrictions on extensions of credit and certain other transactions between Origin Bank and the Company or any nonbank affiliate.
+Added: Generally, these covered transactions with either the Company or any affiliate are limited to 10% of Origin Bank’s capital and surplus, and all such transactions between Origin Bank and the Company and all of its nonbank affiliates combined are limited to 20% of Origin Bank’s capital and surplus.
+Added: Loans and other extensions of credit from Origin Bank to the Company or any affiliate generally are required to be secured by eligible collateral in specified amounts.
+Added: In addition, any transaction between Origin Bank and the Company or any affiliate are required to be on an arm’s length basis.
+Added: Federal banking laws also place similar restrictions on certain extensions of credit by insured banks, such as Origin Bank, to their directors, executive officers and principal shareholders.
+Added: FDIC Insurance Assessments and Depositor Preference
+Added: Origin Bank’s deposits are insured by the FDIC’s DIF up to the limits under applicable law, which currently are set at $250,000 per depositor, per insured bank, for each account ownership category.
+Added: Origin Bank is subject to FDIC assessments for its deposit insurance.
+Added: The FDIC calculates quarterly deposit insurance assessments based on an institution’s average total consolidated assets less its average tangible equity, and determines the applicable rate based upon a range of factors, including certain additional factors for institutions in excess of $10 billion assets.
+Added: The assessment rate schedule can change from time to time, at the discretion of the FDIC, subject to certain limits.
+Added: As of June 30, 2020, the DIF reserve ratio fell to 1.30%, below the statutory minimum of 1.35%.
+Added: The FDIC, as required under the Federal Deposit Insurance Act, established a plan on September 15, 2020 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35% within eight years.
+Added: On October 18, 2022, the FDIC adopted an amended restoration plan to increase the likelihood that the reserve ratio would be restored to at least 1.35 percent by September 30, 2028.
+Added: The FDIC’s amended restoration plan increases the initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning in the first quarterly assessment period of 2023.
+Added: The FDIC could further increase the deposit insurance assessments for certain insured depository institutions, including Origin Bank, if the DIF reserve ratio is not restored as projected.
+Added: Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by a bank’s federal regulatory agency.
+Added: In addition, the Federal Deposit Insurance Act provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution, including those of the parent bank holding company.
+Added: Standards for Safety and Soundness
+Added: The Federal Deposit Insurance Act requires the federal bank regulatory agencies to prescribe, by regulation or guideline, operational and managerial standards for all insured depository institutions relating to:
+Added: (1) internal controls;
+Added: (2) information systems and audit systems;
+Added: (3) loan documentation;
+Added: (4) credit underwriting;
+Added: (5) interest rate risk exposure;
+Added: and (6) asset quality.
+Added: The federal banking agencies have adopted regulations and Interagency Guidelines Establishing Standards for Safety and Soundness to implement these required standards.
+Added: These guidelines set forth the safety and soundness standards used to identify and address problems at insured depository institutions before capital becomes impaired.
+Added: Under the regulations, if a regulator determines that a bank fails to meet any standards prescribed by the guidelines, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans.
+Added: Anti-Money Laundering
+Added: A continued focus of governmental policy relating to financial institutions in recent years has been combating money laundering and terrorist financing.
+Added: The USA PATRIOT Act broadened the application of anti-money laundering regulations to apply to additional types of financial institutions such as broker-dealers, investment advisors and insurance companies, and strengthened the ability of the U.S.
+Added: Government to help prevent, detect and prosecute international money laundering and the financing of terrorism.
+Added: The principal provisions of Title III of the USA PATRIOT Act require that regulated financial institutions, including state member banks:
+Added: (i) establish an anti-money laundering program that includes training and audit components;
+Added: (ii) comply with regulations regarding the verification of the identity of any person seeking to open an account;
+Added: (iii) take additional required precautions with non-U.S.
+Added: owned accounts;
+Added: and (iv) perform certain verification and certification of money laundering risk for their foreign correspondent banking relationships.
+Added: Failure of a financial institution to comply with the USA PATRIOT Act’s requirements could have serious legal and reputational consequences for the institution.
+Added: Origin Bank has augmented its systems and procedures to meet the requirements of these regulations and will continue to revise and update its policies, procedures and controls to reflect changes required by law.
+Added: FinCEN has adopted rules that require financial institutions to obtain beneficial ownership information with respect to legal entities with which such institutions conduct business, subject to certain exclusions and exemptions.
+Added: Bank regulators are focusing their examinations on anti-money laundering compliance, and we continue to monitor and augment, where necessary, our anti-money laundering compliance programs.
+Added: Banking regulators will consider compliance with the Act’s money laundering provisions in acting upon merger and acquisition proposals.
+Added: Bank regulators routinely examine institutions for compliance with these obligations and have been active in imposing cease and desist and other regulatory orders and money penalty sanctions against institutions found to be violating these obligations.
+Added: Sanctions for violations of the Act can be imposed in an amount equal to twice the sum involved in the violating transaction, up to $1 million.
+Added: On January 1, 2021, Congress passed federal legislation that made sweeping changes to federal anti-money laundering laws, including changes that will be implemented in subsequent years.
+Added: On June 30, 2021, FinCEN published the first set of “national AML priorities,” as required by the Bank Secrecy Act, which include, but are not limited to, cybercrime, terrorist financing, fraud, and drug/human trafficking.
+Added: FinCEN is required to implement regulations to specify how covered financial institutions, such as the Company, should incorporate these national priorities into their AML programs.
+Added: As of December 31, 2022, no such regulations have been proposed.
+Added: Economic Sanctions
+Added: The OFAC is responsible for helping to ensure that U.S.
+Added: entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and acts of Congress.
+Added: OFAC publishes, and routinely updates, lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals and Blocked Persons List.
+Added: If we find a name on any transaction, account or wire transfer that is on an OFAC list, we must undertake certain specified activities, which could include blocking or freezing the account or transaction requested, and we must notify the appropriate authorities.
+Added: Concentrations in Lending
+Added: During 2006, the federal bank regulatory agencies released guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) and advised financial institutions of the risks posed by CRE lending concentrations.
+Added: The Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations.
+Added: Higher allowances for loan losses and capital levels may also be required.
+Added: The Guidance is triggered when CRE loan concentrations exceed either:
+Added: • Total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk-based capital;
+Added: • Total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total risk-based capital.
+Added: The Guidance also applies when a bank has a sharp increase in CRE loans or has significant concentrations of CRE secured by a particular property type.
+Added: We have always had exposures to loans secured by CRE due to the nature of our markets and the loan needs of both consumer and commercial clients.
+Added: We believe our long-term experience in CRE lending, underwriting policies, internal controls, and other policies currently in place, as well as our loan and credit monitoring and administration procedures, are generally appropriate to managing our concentrations as required under the Guidance.
+Added: As of December 31, 2022, our CRE loan concentrations were below the Guidance thresholds discussed above.
+Added: Debit Interchange Fees
+Added: Debit card interchange fee restrictions set forth in the Durbin Amendment, as implemented by regulations of the Federal Reserve, cap the maximum debit interchange fee that a debit card issuer may receive per transaction.
+Added: The maximum permissible interchange fee that a non-exempt issuer may receive for an electronic debit transaction is the sum of 21 cents per transaction and 5 bps multiplied by the value of the transaction, subject to an upward adjustment of 1 cent if an issuer certifies that it has implemented policies and procedures reasonably designed to achieve the fraud-prevention standards set forth by the Federal Reserve.
+Added: In addition, card issuers and networks are prohibited from entering into arrangements requiring that debit card transactions be processed on a single network or only two affiliated networks and allows merchants to determine transaction routing.
+Added: Debit card issuers with total consolidated assets of less than $10 billion are exempt from these interchange fee restrictions.
+Added: The exemption for small issuers ceases to apply as of July 1 of the year following the calendar year in which the debit card issuer has total consolidated assets of $10 billion or more at calendar year end.
Community Reinvestment Act
−Removed: The CRA and its implementing regulations are intended to encourage banks to help meet the credit needs of their entire assessment area, including low and moderate income neighborhoods, consistent with the safe and sound operations of such banks.
−Removed: These regulations also provide for regulatory assessment of a bank's CRA performance record when considering applications to establish branches, merger applications and applications to acquire the assets and assume the liabilities of another bank.
−Removed: The CRA requires federal banking agencies to make public their ratings of banks' performance under the CRA.
−Removed: In the case of a bank holding company transaction, the CRA performance record of the subsidiary banks of the bank holding companies involved in the transaction are reviewed in connection with the filing of an application to acquire ownership or control of shares or assets of a bank or to merge with any other bank holding company.
−Removed: An unsatisfactory CRA record could substantially delay approval or result in denial of an application.
−Removed: In addition, a financial holding company may face limitations on activities and acquisitions if its subsidiary depository institutions do not have a least a Satisfactory rating.
−Removed: A satisfactory or better CRA rating also is a prerequisite for certain regulatory benefits, such as expedited processing of applications.
−Removed: Origin Bank received a Satisfactory rating in its most recent CRA examination.
−Removed: Financial Modernization .
−Removed: Under the Gramm-Leach-Bliley Act, banks may establish financial subsidiaries to engage, subject to limitations on investment, in activities that are financial in nature, other than insurance underwriting as principal, insurance company portfolio investment, real estate development, real estate investment, annuity issuance and merchant banking activities.
−Removed: To do so, a bank must be well capitalized, well managed and have a CRA rating from its primary federal regulator of Satisfactory or better.
−Removed: Subsidiary banks of financial holding companies or banks with financial subsidiaries must remain well capitalized and well managed in order to continue to engage in activities that are financial in nature without regulatory actions or additional restrictions.
−Removed: Such actions or restrictions could include divestiture of the financial subsidiary or subsidiaries.
−Removed: In addition, a financial holding company or a bank may not acquire a company that is engaged in activities that are financial in nature unless each of the subsidiary banks of the financial holding company or the bank has a CRA rating of Satisfactory or better.
−Removed: Concentrated Commercial Real Estate Lending Regulations .
−Removed: The federal banking regulatory agencies have promulgated guidance governing financial institutions with concentrations in commercial real estate lending.
−Removed: The guidance provides that a bank may have a concentration in commercial real estate lending if (1) total reported loans for construction, land development, and other land represent 100.0% or more of total capital or (2) total commercial real estate loans represent 300.0% or more of the bank's total capital and the outstanding balance of the bank's commercial real estate loan portfolio has increased 50% or more during the prior 36 months.
−Removed: If a concentration is present, the bank will be subject to further regulatory scrutiny with respect to its risk management practices for commercial real estate lending.
−Removed: At December 31, 2021, Origin Bank's total reported loans for construction, land development, and other land represented less than 100% of the bank's total capital, and its total commercial real estate loans represented less than 300% of the bank's total capital.
−Removed: Consumer Laws and Regulations .
−Removed: Origin Bank is subject to numerous laws and regulations intended to protect consumers in transactions with the bank.
−Removed: These laws include, among others, laws regarding unfair, deceptive and abusive acts and practices, state usury laws and federal consumer protection statutes, including the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Real Estate Procedures Act of 1974, the S.A.F.E.
−Removed: Mortgage Licensing Act of 2008, the Truth in Lending Act and the Truth in Savings Act, among others.
−Removed: Many states and local jurisdictions have consumer protection laws analogous and in addition to those enacted under federal law.
−Removed: These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits, making loans and conducting other types of transactions.
−Removed: Failure to comply with these laws and regulations could give rise to regulatory sanctions, customer rescission rights, actions by state attorneys general and civil or criminal liability.
−Removed: In addition, the Dodd-Frank Act created the Bureau, which has broad authority to regulate the offering and provision of consumer financial products.
−Removed: The Bureau has authority to promulgate regulations, issue orders, guidance, interpretations and policy statements, conduct examinations and bring enforcement actions with regard to consumer financial products and services.
−Removed: In general, banks with assets of $10 billion or less, such as Origin Bank, will continue to be examined for consumer compliance, and subject to enforcement actions, by their primary federal regulator, in our case, the Federal Reserve.
−Removed: However, the Bureau may participate in examinations of these smaller institutions on a "sampling basis" and may refer potential enforcement actions against such institutions to their primary federal regulators.
−Removed: In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the Bureau, and state attorneys general are permitted to enforce certain consumer protection rules adopted by the Bureau against certain institutions.
−Removed: Mortgage Lending Rules.
−Removed: The Dodd-Frank Act authorized the Bureau to establish certain minimum standards for the origination of residential mortgages, including a determination of the borrower's ability to repay.
−Removed: Under the Dodd-Frank Act, financial institutions may not make a residential mortgage loan unless they make a "reasonable and good faith determination" that the consumer has a "reasonable ability" to repay the loan.
−Removed: The Dodd-Frank Act allows borrowers to raise certain defenses to foreclosure but provides a presumption or rebuttable presumption of compliance for loans that are "qualified mortgages." The Bureau has also issued regulations that, among other things, specify the types of income and assets that may be considered in the ability-to-repay determination, the permissible sources for income verification, and the required methods of calculating the loan's monthly payments.
−Removed: These regulations extend the requirement that creditors verify and document a borrower's income and assets to include a requirement to verify all information that creditors rely on in determining repayment ability.
−Removed: The rules also define "qualified mortgages" based on adherence to certain underwriting standards and restrictions on loan terms.
−Removed: Points and fees are subject to a relatively stringent cap, and the terms include a wide array of payments that may be made in the course of closing a loan.
−Removed: Certain loans, including interest-only loans and negative amortization loans, cannot be qualified mortgages.
−Removed: Also, the Dodd-Frank Act and the Bureau's final rule on loan originator compensation prohibit certain compensation payments to loan originators and the steering of consumers to loans not in their interest, particularly if the loans will result in greater compensation for a loan originator.
−Removed: The Dodd-Frank Act and the Bureau's implementing regulations also impose additional disclosure requirements with respect to the origination and sale of residential mortgages.
−Removed: EGRRCPA modifies certain of these requirements by, among other things, creating a safe harbor from the ability-to-repay standards for certain mortgage loans made by a bank with less than $10 billion in total consolidated assets.
−Removed: Anti-Money Laundering and OFAC .
−Removed: The Bank Secrecy Act requires banks and other financial institutions to establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism.
−Removed: The principal requirements for banks include (i) establishment of an anti-money laundering program that includes training and audit components;
−Removed: (ii) establishment of a "know your customer" program involving due diligence to confirm the identity of persons seeking to open accounts and to deny accounts to those persons unable to demonstrate their identities;
−Removed: (iii) the filing of currency transaction reports for deposits and withdrawals of large amounts of cash;
−Removed: (iv) additional precautions for accounts sought and managed for non-U.S.
−Removed: and (v) verification and certification of money laundering risk with respect to private banking and foreign correspondent banking relationships.
−Removed: For many of these tasks, a bank must keep records to be made available to its primary federal regulator.
−Removed: Anti-money laundering rules and policies are developed by a bureau within the U.S.
−Removed: Department of the Treasury, the Financial Crimes Enforcement Network, but compliance by individual institutions is overseen by its primary federal regulator, in the Bank's case, the Federal Reserve.
−Removed: The Office of Foreign Assets Control ("OFAC") administers laws and Executive Orders that prohibit U.S.
−Removed: entities from engaging in transactions with certain prohibited parties.
−Removed: OFAC publishes lists of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, known as Specially Designated Nationals and Blocked Persons.
−Removed: Generally, if a bank identifies a transaction, account or wire transfer relating to a person or entity on an OFAC list, it must freeze the account or block the transaction, file a suspicious activity report and notify the appropriate authorities.
−Removed: Bank regulators routinely examine institutions for compliance with these obligations and they must consider an institution's compliance in connection with the regulatory review of applications, including applications for bank mergers and acquisitions.
−Removed: Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing and comply with OFAC sanctions, or to comply with relevant laws and regulations, could have serious legal, reputational and financial consequences for the institution.
−Removed: Federal law and regulations limit the ability of banks and other financial institutions to disclose non-public information about consumers to non-affiliated third parties.
−Removed: These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third-party.
−Removed: These regulations affect how consumer information is transmitted through financial services companies and conveyed to outside vendors.
−Removed: In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications.
−Removed: Consumers also have the option to direct banks and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services.
−Removed: In addition to applicable federal privacy regulations, Origin Bank is subject to certain state privacy laws.
−Removed: Cybersecurity .
−Removed: The federal banking agencies pay close attention to the cybersecurity practices of banks, bank holding companies and their affiliates.
−Removed: The interagency council of the agencies, the Federal Financial Institutions Examination Council (the "FFIEC"), has issued several policy statements and other guidance for banks as new cybersecurity threats arise.
−Removed: The FFIEC has recently focused on such matters as compromised customer credentials and business continuity planning.
−Removed: Examinations by the banking agencies now include review of an institution's information technology and its ability to thwart cyberattacks.
−Removed: Federal Home Loan Bank System .
−Removed: Origin Bank is a member of the Federal Home Loan Bank of Dallas, which is one of the 11 regional Federal Home Loan Banks composing the Federal Home Loan Bank system.
−Removed: The Federal Home Loan Banks make loans to their member banks in accordance with policies and procedures established by the Federal Home Loan Bank system and the boards of directors of each regional Federal Home Loan Bank.
−Removed: Any advances from a Federal Home Loan Bank must be secured by specified types of collateral, and all long-term advances may be obtained only for the purpose of providing funds for residential housing finance.
−Removed: As a member of the Federal Home Loan Bank of Dallas, Origin Bank is required to acquire and hold shares of capital stock in the Federal Home Loan Bank of Dallas.
−Removed: All loans, advances and other extensions of credit made by the Federal Home Loan Bank of Dallas to Origin Bank are secured by a portion of Origin Bank's mortgage loan portfolio, certain other investments and the capital stock of the Federal Home Loan Bank of Dallas held by Origin Bank.
−Removed: Enforcement Powers .
−Removed: The bank regulatory agencies have broad enforcement powers, including the power to terminate deposit insurance and impose substantial fines and other civil and criminal penalties.
−Removed: Failure to comply with applicable laws, regulations and supervisory agreements, breaches of fiduciary duty or the maintenance of unsafe and unsound conditions or practices could subject us or our subsidiaries, including Origin Bank, as well as their respective officers, directors, and other institution-affiliated parties, to administrative sanctions and potentially substantial civil money penalties.
−Removed: FDIC Conservatorship or Receivership.
−Removed: The bank regulatory agencies may appoint the FDIC as conservator or receiver for a bank (or the FDIC may appoint itself, under certain circumstances) if any one or more of a number of circumstances exist, including, without limitation, if the bank is undercapitalized and has no reasonable prospect of becoming adequately capitalized, fails to become adequately capitalized when required to do so, fails to submit a timely and acceptable capital restoration plan or materially fails to implement an accepted capital restoration plan.
+Added: Origin Bank is subject to the provisions of the CRA, which imposes a continuing and affirmative obligation, consistent with safe and sound operation, to help meet the credit needs of entire communities where the bank accepts deposits, including low- and moderate-income neighborhoods.
+Added: The Federal Reserve’s assessment of Origin Bank’s CRA record is made available to the public.
+Added: CRA agreements with private parties must be disclosed and annual CRA reports must be made to the Federal Reserve.
+Added: A bank holding company will not be permitted to become or remain a financial holding company and no new activities authorized under GLB may be commenced by a holding company or by a bank financial subsidiary if any of its bank subsidiaries received less than a “satisfactory” CRA rating in its latest CRA examination.
+Added: Federal CRA regulations require, among other things, that evidence of discrimination against applicants on a prohibited basis, and illegal or abusive lending practices be considered in the CRA evaluation.
+Added: Origin Bank has a rating of “Satisfactory” in its most recent CRA evaluation.
+Added: On May 5, 2022, the OCC, FRB, and FDIC issued a notice of proposed rulemaking to provide for a coordinated approach to modernize their respective CRA regulations, such that all banks will be subject to the same set of CRA rules.
+Added: No final rule has been issued, but the rulemaking may affect Origin Bank’s CRA compliance obligations in the future.
+Added: Privacy, Credit Reporting, and Data Security
+Added: The GLB generally prohibits disclosure of non-public consumer information to non-affiliated third parties unless the consumer has been given the opportunity to object and has not objected to such disclosure.
+Added: Financial institutions are further required to disclose their privacy policies to clients annually.
+Added: Financial institutions, however, will be required to comply with state law if it is more protective of consumer privacy than the GLB.
+Added: The GLB also directed federal regulators to prescribe standards for the security of consumer information.
+Added: Origin Bank is subject to such standards, as well as standards for notifying clients in the event of a security breach.
+Added: Origin Bank utilizes credit bureau data in underwriting activities.
+Added: Use of such data is regulated under the Fair Credit Reporting Act and Regulation V on a uniform, nationwide basis, including credit reporting, prescreening, and sharing of information between affiliates and the use of credit data.
+Added: The Fair and Accurate Credit Transactions Act, which amended the Fair Credit Reporting Act, permits states to enact identity theft laws that are not inconsistent with the conduct required by the provisions of that Act.
+Added: Clients must be notified when unauthorized disclosure involves sensitive client information that may be misused.
+Added: On November 18, 2021, the federal banking agencies issued a new rule effective in 2022 that requires banks to notify their primary federal regulator within 36 hours of a “computer-security incident” that rises to the level of a “notification incident.”
+Added: The federal banking regulators regularly issue guidance regarding cybersecurity intended to enhance cyber risk management standards among financial institutions.
+Added: As a result, financial institutions, like the Company and Origin Bank, are expected to establish multiple lines of defense and to ensure their risk management processes address the risk posed by potential threats to the institution.
+Added: A financial institution’s management is expected to maintain sufficient processes to effectively respond and recover the institution’s operations after a cyber-attack.
+Added: A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations if a critical service provider of the institution falls victim to this type of cyber-attack.
+Added: Our information security protocols are designed in part to adhere to the requirements of this guidance.
+Added: State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations.
+Added: Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements.
+Added: Many states have also recently implemented or modified their data breach notification and data privacy requirements.
+Added: We expect this trend of state-level activity in those areas to continue and are continually monitoring developments in the states in which our clients are located.
+Added: Anti-Tying Restrictions
+Added: In general, a bank may not extend credit, lease, sell property, or furnish any services or fix or vary the consideration for them on the condition that (1) the client obtain or provide some additional credit, property, or services from or to the bank or bank holding company or their subsidiaries or (2) the client not obtain some other credit, property, or services from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of the credit extended.
+Added: A bank may, however, offer combined-balance products and may otherwise offer more favorable terms if a client obtains two or more traditional bank products.
+Added: The law also expressly permits banks to engage in other forms of tying and authorizes the Federal Reserve Board to grant additional exceptions by regulation or order.
+Added: Also, certain foreign transactions are exempt from the general rule.
+Added: Consumer Regulation
+Added: Activities of Origin Bank are subject to a variety of statutes and regulations designed to protect consumers.
+Added: These laws and regulations include, among numerous other things, provisions that:
+Added: • limit the interest and other charges collected or contracted for by Origin Bank, including rules respecting the terms of credit cards and of debit card overdrafts;
+Added: • govern Origin Bank’s disclosures of credit terms to consumer borrowers;
+Added: • require Origin Bank to provide information to enable the public and public officials to determine whether it is fulfilling its obligation to help meet the housing needs of the communities it serves;
+Added: • prohibit Origin Bank from discriminating on the basis of race, creed or other prohibited factors when it makes decisions to extend credit;
+Added: • govern the manner in which Origin Bank may collect consumer debts;
+Added: • prohibit unfair, deceptive or abusive acts or practices in the provision of consumer financial products and services.
+Added: Mortgage Regulation
+Added: The CFPB adopted a rule that implements the ability-to-repay and qualified mortgage provisions of the Dodd-Frank Act (the “ATR/QM rule”), which requires lenders to consider, among other things, income, employment status, assets, payment amounts, and credit history before approving a mortgage, and provides a compliance “safe harbor” for lenders that issue certain “qualified mortgages.” The ATR/QM rule defines a “qualified mortgage” to have certain specified characteristics, and generally prohibits loans with negative amortization, interest-only payments, balloon payments, or terms exceeding 30 years from being qualified mortgages.
+Added: The rule also establishes general underwriting criteria for qualified mortgages, including that monthly payments be calculated based on the highest payment that will apply in the first five years of the loan and that the borrower have a total debt-to-income ratio that is less than or equal to 43%.
+Added: While “qualified mortgages” will generally be afforded safe harbor status, a rebuttable presumption of compliance with the ability-to-repay requirements will attach to “qualified mortgages” that are “higher priced mortgages” (which are generally subprime loans).
+Added: In addition, the securitizer of asset-backed securities must retain not less than 5% of the credit risk of the assets collateralizing the asset-backed securities, unless subject to an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages.”
+Added: The CFPB has also issued rules to implement requirements of the Dodd-Frank Act pertaining to mortgage loan origination (including with respect to loan originator compensation and loan originator qualifications) as well as integrated mortgage disclosure rules.
+Added: In addition, the CFPB has issued rules that require servicers to comply with certain standards and practices with regard to:
+Added: error correction;
+Added: information disclosure;
+Added: force-placement of insurance;
+Added: information management policies and procedures;
+Added: requiring information about mortgage loss mitigation options be provided to delinquent borrowers;
+Added: providing delinquent borrowers access to servicer personnel with continuity of contact about the borrower’s mortgage loan account;
+Added: and evaluating borrowers’ applications for available loss mitigation options.
+Added: These rules also address initial rate adjustment notices for adjustable-rate mortgages, periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts.
+Added: The CARES Act granted certain forbearance rights and protection against foreclosure to borrowers with a “federally backed mortgage loan,” including certain first or subordinate lien loans designed principally for the occupancy of one to four families.
+Added: These consumer protections continued during the COVID-19 pandemic emergency.
+Added: Non-Discrimination Policies
+Added: Origin Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act and the Fair Housing Act, both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction.
+Added: The Department of Justice, and the federal bank regulatory agencies have issued an Interagency Policy Statement on Discrimination in Lending that provides guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices.
+Added: The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA.
Effect of Governmental Monetary Policies.
4 unchanged sentences
We cannot predict the nature of future fiscal and monetary policies or the effect of these policies on our operations and activities, financial condition, results of operations, growth plans or future prospects.
−Removed: Impact of Current Laws and Regulations
−Removed: The cumulative effect of these laws and regulations, while providing certain benefits, adds significantly to the cost of our operations and thus has a negative impact on our profitability.
−Removed: There has also been a notable expansion in recent years of financial service providers that are not subject to the examination, oversight, and other rules and regulations to which we are subject.
−Removed: Those providers, because they are not so highly regulated, may have a competitive advantage over us and may continue to draw large amounts of funds away from traditional banking institutions, with a continuing adverse effect on the banking industry in general.
−Removed: Future Legislation and Regulatory Reform.
−Removed: From time to time, various legislative and regulatory initiatives are introduced in Congress and state legislatures.
−Removed: New regulations and statutes are regularly proposed that contain wide-ranging proposals for altering the structures, regulations and competitive relationships of financial institutions operating in the United States.
−Removed: We cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which our business may be affected by any new regulation or statute.
−Removed: Future legislation, regulation and policies, and the effects of that legislation and regulation and those policies, may have a significant influence on our operations and activities, financial condition, results of operations, growth plans or future prospects and the overall growth and distribution of loans, investments and deposits.
−Removed: Such legislation, regulation and policies have had a significant effect on the operations and activities, financial condition, results of operations, growth plans and future prospects of commercial banks in the past and are expected to continue to do so.
+Added: On March 15, 2022, Congress enacted the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) to address references to LIBOR in contracts that (i) are governed by U.S.
+Added: (ii) will not mature before June 30, 2023;
+Added: and (iii) lack fallback provisions providing for a clearly defined and practicable replacement for LIBOR.
+Added: On December 16, 2022, the FRB adopted a final rule to implement the LIBOR Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023.
+Added: The final rule identifies replacement benchmark rates based on SOFR to replace overnight, one-month, three-month, six-month, and 12-month LIBOR in contracts subject to the LIBOR Act.
+Added: Federal Home Loan Bank System.
+Added: Origin Bank is a member of the Federal Home Loan Bank of Dallas, which is one of the 11 regional Federal Home Loan Banks composing the Federal Home Loan Bank system.
+Added: The Federal Home Loan Banks make loans to their member banks in accordance with policies and procedures established by the Federal Home Loan Bank system and the boards of directors of each regional Federal Home Loan Bank.
+Added: Any advances from a Federal Home Loan Bank must be secured by specified types of collateral, and all long-term advances may be obtained only for the purpose of providing funds for residential housing finance.
+Added: As a member of the Federal Home Loan Bank of Dallas, Origin Bank is required to acquire and hold shares of capital stock in the Federal Home Loan Bank of Dallas.
+Added: All loans, advances and other extensions of credit made by the Federal Home Loan Bank of Dallas to Origin Bank are secured by a portion of Origin Bank's mortgage loan portfolio, certain other investments and the capital stock of the Federal Home Loan Bank of Dallas held by Origin Bank.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.