On Monday, Keefe, Bruyette & Woods updated its financial outlook on shares of Origin Bancorp (NYSE: NYSE:OBK), raising the bank's price target to $39.00 from the previous $38.00. The firm has maintained an Outperform rating on the stock.
The adjustment follows Origin Bancorp's recent quarterly results, which were impacted by what was described as 'questioned banker activity.' This specific activity was responsible for a 21 cents per share drag on the bank's operating earnings per share (EPS). Despite this, the bank's core credit trends were reported to remain robust.
The bank's nonperforming assets (NPAs) and classified loan amounts have seen an uptick, which is attributed to the aforementioned banker activity. However, the net interest margin (NIM) only experienced a slight dip of 2 basis points compared to the last quarter. Without the interest reversal associated with the questioned activity, the NIM would have actually increased by 3 basis points.
Looking forward, Origin Bancorp anticipates an increase in the net interest margin by low-to-mid single digit basis points per quarter in the second half of 2024. The bank is also implementing a selective approach to growth, aiming to keep its assets below the $10 billion threshold by the end of the year.
In light of these developments, Keefe, Bruyette & Woods has revised its earnings estimates for Origin Bancorp for the years 2024 and 2025 to $2.61 and $2.69 respectively. The firm's analysis leads to a price target of $39.00, with an Outperform rating sustained for the bank's shares.
InvestingPro Insights
Origin Bancorp's (NYSE: OBK) steadfast performance and strategic financial management are reflected in the real-time data and analysis from InvestingPro. With a solid Price/Earnings (P/E) Ratio of 13.2, the bank's valuation is attractive, especially when considering the positive momentum it has shown over the last three months, with a 16.92% total return.
This aligns with the recent price target upgrade by Keefe, Bruyette & Woods. Moreover, the bank's commitment to shareholder returns is evident, having raised its dividend for 6 consecutive years, showcasing a reliable income stream for investors.
InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period, indicating confidence in the bank's future performance. Furthermore, the bank's profitability over the last twelve months and predictions of continued profitability this year by analysts suggest a stable financial outlook.
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