Business Context and Reporting Period
This Form 8-K, dated June 21, 2022, reports on Origin Bancorp, Inc. (Origin) and its proposed merger with BT Holdings, Inc. (BTH). Origin is a Louisiana corporation with its principal executive offices in Ruston, Louisiana. The filing serves as a supplement to the joint proxy statement/prospectus filed on May 5, 2022, providing additional disclosures regarding the merger agreement approved by both boards of directors. A special meeting of Origin's shareholders is scheduled for June 29, 2022, to vote on the transaction.
Key Financial Metrics and Transaction Details
The filing does not report Origin's standalone revenue, profit, or cash flow for a specific reporting period. Instead, it provides financial data related to the valuation analysis of the merger and projected synergies:
- Projected Cost Savings: Origin expects annual pre-tax cost savings of $2.0 million in 2022 and $7.9 million thereafter.
- Valuation Inputs (BTH): The financial advisor, Stephens Inc., utilized BTH's projected calendar year 2027 net income of $37.8 million (excluding synergies) and $43.6 million (including synergies) for discounted cash flow analysis.
- Comparable Company Multiples: The filing lists Price-to-Tangible Book Value (TBV) and Price-to-Earnings (EPS) multiples for seven relevant public companies, with Price/TBV ranging from 1.05x to 1.83x and 2022 EPS multiples ranging from 7.9x to 11.9x.
- Comparable Transaction Multiples: Data for 27 nationwide and 14 Texas-specific transactions are provided, showing Price/TBV multiples generally ranging from 1.12x to 3.03x.
Material Changes and Supplemental Disclosures
The filing details supplemental disclosures made voluntarily to address demand letters from four law firms representing purported shareholders. These letters alleged omissions regarding financial advisor analysis, compensation, and employment terms. Key changes include:
- Financial Advisor Compensation: Clarified that of the total compensation to Stephens Inc., $2,250,000 is contingent.
- DCF Analysis Details: Disclosed specific inputs for the discounted cash flow analysis, including a risk-free rate of 2.24% (U.S. 30-year treasury) and projected cash flows for 2022-2026 ranging from $19.9 million to $30.3 million depending on synergy inclusion.
- Employment Agreements: Disclosed that BTH executives Ms. Sirman and Jay Dyer have executed amendments to their employment agreements, extending terms for two years post-merger at current salaries. Origin is negotiating agreements with other specified employees.
- Board Composition: Confirmed that BTH's board designated Ms. Sirman and Jay Dyer to serve on the combined Origin and Origin Bank boards.
- Confidentiality Terms: Clarified that the Confidentiality Agreement did not include "standstill" or "don't ask, don't waive" provisions.
Guidance, Outlook, and Risks
Management maintains that the merger is beneficial and that the demands for supplemental disclosure were without merit, though disclosures were made to avoid delaying the transaction. The filing includes standard forward-looking statement disclaimers regarding uncertainties in the merger's completion and integration.
Key Risks Identified:
- Failure to obtain necessary regulatory or shareholder approvals.
- Termination of the merger agreement due to specific events or changes in circumstances.
- Delays in transaction completion or integration issues.
- Failure to realize anticipated cost savings or benefits.
- Dilution caused by the issuance of additional Origin common stock.
- Diversion of management attention from ongoing operations.
Investor Verification Checklist
- Verify the outcome of the special shareholder meeting scheduled for June 29, 2022, to confirm approval of the merger.
- Review the full joint proxy statement/prospectus (File No. 333-264279) for complete details on the merger consideration and financial advisor opinions.
- Monitor regulatory approval status from banking authorities for the combination of Origin Bank and BTH Bank.
- Assess the realization of the projected $7.9 million in annual pre-tax cost savings post-merger.
- Confirm the final terms of employment agreements for key BTH management retained post-transaction.