Origin Bancorp Trades Below Book Value Amid Sector Scrutiny
Shares of the Louisiana-based lender are trading at a discount to their tangible assets, a sign of potential undervaluation as analysts remain bullish.
Shares of Origin Bancorp (NYSE: OBK) are trading at a notable discount to their underlying asset value, highlighting a potential valuation gap as the regional banking sector continues to navigate a complex economic landscape.
In Tuesday morning trading, the Louisiana-based bank’s stock was priced around $34.57. This figure sits just above its tangible book value per share of $33.95, which was reported for the third quarter ending September 30, 2025. Furthermore, the stock is trading approximately 12% below its standard book value of $39.23 per share, a key metric for valuing financial institutions, according to the company's latest earnings release.
The divergence between the market price and the bank's on-paper worth comes at a time of heightened scrutiny for regional lenders. The entire sector has been under pressure from concerns over exposure to commercial real estate loans and the competitive flight of deposits to higher-yielding alternatives. These headwinds have compressed net interest margins across the industry, making some investors cautious.
However, the lack of any significant negative news specific to Origin Bancorp suggests its depressed share price may be more attributable to broad sector sentiment than to company-specific performance. This dynamic can create opportunities for investors looking for fundamentally sound companies that have been discounted by association.
Wall Street analysts appear to see such an opportunity. Of the five analysts covering Origin Bancorp, three rate the stock a "Strong Buy" and two rate it a "Buy," with no "Hold" or "Sell" ratings. The consensus price target sits at $42.75, implying a potential upside of more than 23% from its current levels. This bullish stance from analysts stands in contrast to the stock's recent performance, which has seen it trade well off its 52-week high of $40.82.
Some market observers believe the pessimism surrounding regional banks may be overblown. They point to factors such as a potential steepening of the yield curve, renewed loan activity, and a likely increase in merger and acquisition activity as potential tailwinds for 2025. Following a significant pullback, some analysts have described regional bank valuations as "cheap" compared to historical averages, arguing that current prices may not reflect the industry's earnings potential.
For Origin Bancorp, which has a market capitalization of just over $1 billion, navigating this environment is key. While its quarterly earnings and revenue growth have seen year-over-year declines, a price-to-book ratio of 0.89 makes it an outlier in a sector where the average has been closer to 1.15x. In such situations, investors often watch for signs of insider confidence, such as open-market stock purchases by directors and executives, as a signal that those with the most knowledge of the company believe its shares are undervalued.
As the market continues to digest the Federal Reserve's stance on interest rates and the outlook for the U.S. economy, the performance of regional lenders like Origin Bancorp will be a closely watched indicator of the financial sector's health. The central question for investors is whether the discount to book value represents a genuine buying opportunity or a warning of risks yet to fully materialize.