Origin Bancorp, Inc.OBK
Origin Bancorp, Inc. Income Taxes Disclosure
Note 16 — Income Taxes
The income tax expense from continuing operations is as follows:
| (Dollars in thousands) | Years Ended December 31, | ||||||||||||||||
| Federal income taxes: | 2025 | 2024 | 2023 | ||||||||||||||
| Current | $ | 22,920 | $ | 19,920 | $ | (7,181) | |||||||||||
| Deferred | (4,393) | (1,425) | 27,458 | ||||||||||||||
| State income taxes: | |||||||||||||||||
| Current | 2,044 | 2,314 | 1,590 | ||||||||||||||
| Deferred | (127) | (42) | 256 | ||||||||||||||
| Income tax expense | $ | 20,444 | $ | 20,767 | $ | 22,123 | |||||||||||
The Company’s effective income tax rates have historically differed from the applicable U.S. statutory rates of 21% at December 31, 2025, 2024 and 2023, due to the effect of state and local income taxes, low-income housing and qualified school construction bond tax credits, tax-exempt income from securities and life insurance policies and the income tax effects associated with stock-based compensation.
A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is below:
| Year Ended December 31, 2025 | |||||||||||
| (Dollars in thousands) | Amount | % | |||||||||
| Federal statutory income tax | $ | 20,085 | 21.00 | % | |||||||
| Effect of: | |||||||||||
State and local income taxes, net of federal benefit (1) | 1,484 | 1.55 | |||||||||
| Tax credits | (640) | (0.67) | |||||||||
| Changes in valuation allowance | (15) | (0.02) | |||||||||
| Nontaxable or nondeductible items: | |||||||||||
| Tax exempt interest income | (1,109) | (1.16) | |||||||||
| Other | 757 | 0.79 | |||||||||
| Other (<5%) | (118) | (0.11) | |||||||||
| Total | $ | 20,444 | 21.38 | % | |||||||
(1)State taxes in Mississippi and Texas made up the majority (greater than 50%) of the tax effect in this category.
| Years Ended December 31, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| (Dollars in thousands) | Amount | % | Amount | % | |||||||||||||||||||
| Income taxes computed at statutory rate | $ | 20,424 | 21.00 | % | $ | 22,244 | 21.00 | % | |||||||||||||||
| Tax exempt revenue, net of nondeductible interest | (772) | (0.79) | (1,072) | (1.01) | |||||||||||||||||||
| Low-income housing tax credits, net of amortization | (539) | (0.55) | (758) | (0.72) | |||||||||||||||||||
| Other tax credits, net of add-backs | (1,063) | (1.09) | (1,218) | (1.15) | |||||||||||||||||||
| Bank-owned life insurance income | (196) | (0.20) | (182) | (0.17) | |||||||||||||||||||
| State income taxes, net of federal benefit | 1,791 | 1.84 | 1,498 | 1.41 | |||||||||||||||||||
| Stock-based compensation | 525 | 0.54 | 632 | 0.60 | |||||||||||||||||||
| Nondeductible expense | 834 | 0.86 | 814 | 0.77 | |||||||||||||||||||
| Other | (237) | (0.26) | 165 | 0.16 | |||||||||||||||||||
| Total income tax expense | $ | 20,767 | 21.35 | % | $ | 22,123 | 20.89 | % | |||||||||||||||
Significant components of deferred tax assets and liabilities are as follows:
| (Dollars in thousands) | December 31, | ||||||||||
| Deferred tax assets: | 2025 | 2024 | |||||||||
| Credit loss allowances | $ | 21,881 | $ | 20,458 | |||||||
| Deferred compensation and share-based compensation | 8,369 | 8,244 | |||||||||
| Net operating loss carryforwards | 1,887 | 1,699 | |||||||||
| Other | 7 | 1 | |||||||||
| Self-funded insurance | 593 | 119 | |||||||||
| Litigation reserve | 613 | 854 | |||||||||
| Investments in limited partnerships | 3,786 | 1,307 | |||||||||
| Other real estate owned | 13 | 137 | |||||||||
| Lease obligations | 55 | 48 | |||||||||
| Premium/discount on acquisitions | 195 | 187 | |||||||||
| Deferred rent obligations | 996 | 819 | |||||||||
| Gross deferred tax assets | 38,395 | 33,873 | |||||||||
| Valuation allowance | (1,803) | (1,587) | |||||||||
| Deferred tax assets net of valuation allowance | $ | 36,592 | $ | 32,286 | |||||||
| Deferred tax liabilities: | |||||||||||
| Basis difference in premises and equipment | $ | 5,638 | $ | 6,864 | |||||||
| Intangible assets | 4,681 | 5,597 | |||||||||
| Deferred Income | 5,501 | 3,302 | |||||||||
| Other | 68 | 339 | |||||||||
| Gross deferred tax liabilities | 15,888 | 16,102 | |||||||||
| Net deferred tax asset | $ | 20,704 | $ | 16,184 | |||||||
At December 31, 2025, the Company had $1.9 million of Federal gross net operating net loss carryforwards and $34.6 million in gross state net operating losses carryforwards. Of these net loss carryforwards, $1.9 million in Federal gross net operating loss carryforwards acquired in previous business combinations are expiring between 2026 and 2028, and 99.2% of the $34.6 million in state net operating losses can be carried forward indefinitely with the remaining carryforwards expiring between 2032 and 2034. Due to limitations on the amounts of these losses that can be recognized annually, the Company has determined that it is more likely than not that some of these net operating loss carryforwards will expire unused and has established a $1.8 million valuation allowance related to these carryforwards.
The Company files a consolidated income tax return in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities in these taxing jurisdictions for the years before 2022.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Mar 2, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.