• Red River Bancshares, Inc. Reports Third Quarter 2023 Financial Results

    المصدر: Nasdaq GlobeNewswire / 30 أكتوبر 2023 08:30:01   America/New_York

    ALEXANDRIA, La., Oct. 30, 2023 (GLOBE NEWSWIRE) -- Red River Bancshares, Inc. (the “Company”) (Nasdaq: RRBI), the holding company for Red River Bank (the “Bank”), announced today its unaudited financial results for the third quarter of 2023.

    Net income for the third quarter of 2023 was $8.0 million, or $1.12 per diluted common share (“EPS”), a decrease of $947,000, or 10.6%, compared to $9.0 million, or $1.25 EPS, for the second quarter of 2023. For the third quarter of 2023, the quarterly return on assets was 1.05%, and the quarterly return on equity was 11.15%.

    Net income for the nine months ended September 30, 2023, was $26.6 million, or $3.70 EPS, a decrease of $138,000, or 0.5%, compared to $26.7 million, or $3.71 EPS, for the nine months ended September 30, 2022. For the nine months ended September 30, 2023, the return on assets was 1.18%, and the return on equity was 12.71%.

    Third Quarter 2023 Performance and Operational Highlights

    In the third quarter of 2023, the Company had higher deposits and assets, increased liquidity and capital ratios, and reduced earnings. Net income decreased mainly as a result of lower net interest income. Stock repurchase activity increased compared to the prior quarter.

    • As of September 30, 2023, assets were $3.07 billion, $39.0 million, or 1.3%, higher than June 30, 2023. Total assets were impacted by a $95.7 million increase in deposits, partially offset by the payoff of $60.0 million of Federal Home Loan Bank (“FHLB”) advances.
    • Deposits totaled $2.76 billion as of September 30, 2023, an increase of $95.7 million, or 3.6%, compared to $2.66 billion as of June 30, 2023. During the third quarter of 2023, commercial and public entity customers increased their deposit balances with normal activity, while some consumer customers moved funds from lower yielding categories to higher yielding categories.
    • As of September 30, 2023, loans held for investment (“HFI”) were $1.95 billion, consistent with June 30, 2023. During the third quarter of 2023, new loan originations were offset by loan payments and paydowns.
    • As of September 30, 2023, total securities were $675.3 million compared to $739.0 million as of June 30, 2023. Securities decreased $63.7 million mainly due to maturities and principal repayments, combined with a larger net unrealized loss on securities available-for-sale (“AFS”).
    • In the third quarter of 2023, the Bank repaid $60.0 million in short-term borrowings from the FHLB.
    • In the third quarter of 2023, average liquid assets, which are cash and cash equivalents, increased $64.3 million to $246.2 million, compared to $182.0 million for the second quarter of 2023. The liquid assets to assets ratio was 10.51% as of September 30, 2023.
    • Net income for the third quarter of 2023 was $8.0 million, which was $947,000, or 10.6%, lower than the prior quarter due to lower net interest income and lower Small Business Investment Company (“SBIC”) income.
    • Net interest income and net interest margin fully tax equivalent (“FTE”) decreased in the third quarter of 2023 compared to the prior quarter. Net interest income was $20.7 million for the third quarter of 2023 compared to $21.5 million for the prior quarter. Net interest margin FTE was 2.78% for the third quarter of 2023 compared to 2.96% for the prior quarter. These decreases were mainly due to higher deposit costs exceeding improved yields on earning assets.
    • The current expected credit loss (“CECL”) methodology became effective for the Bank on January 1, 2023. Provision expense was $185,000 for the third quarter of 2023 compared to $300,000 for the second quarter of 2023.
    • As of September 30, 2023, nonperforming assets (“NPA(s)”) were $2.1 million, or 0.07% of assets, and the allowance for credit losses (“ACL”) was $21.2 million, or 1.09% of loans HFI.
    • Capital ratios increased in the third quarter of 2023. The September 30, 2023 leverage ratio was 11.56% and the equity to assets ratio was 9.20%.
    • We paid a quarterly cash dividend of $0.08 per common share in the third quarter of 2023.
    • The 2023 stock repurchase program authorizes us to purchase up to $5.0 million of our outstanding shares of common stock from January 1, 2023 through December 31, 2023. In the third quarter of 2023, we repurchased 23,561 shares of our common stock at an aggregate cost of $1.2 million, and we have $2.9 million remaining that can be repurchased.
    • On September 26, 2023, Red River Bank held a groundbreaking ceremony for its third banking location in the New Orleans, Louisiana market. Construction of this new banking center is in process, and it is projected to open for business in the third quarter of 2024.

    Blake Chatelain, President and Chief Executive Officer stated, “In the third quarter of 2023, we had core deposit growth, improved liquidity, and higher capital ratios. As expected, net income was lower than the prior quarter due to the impact of the interest rate environment on net interest income.

    “While total loans remained consistent, we were pleased with new loan origination activity and rates on new and renewing loans. Total loans were impacted by several customers selling their businesses, which resulted in loan payoffs. We are pleased that lending activity and requests have increased, and the loan pipeline has expanded. For deposits, our commercial and public entity deposit customers increased their deposit balances while maintaining normal operating activity. Our consumer deposit customers moved funds from lower yielding categories to higher yielding time deposits. Overall, our balance sheet is in a solid position with higher liquid asset levels and no borrowings or brokered deposits.

    “Net income trended lower mainly due to the interest rate environment and deposit rate competition resulting in higher deposit costs. In the fourth quarter of 2023, we expect assets repricing into higher rate categories to benefit the net interest margin.

    “We were happy with the positive responses we had from the groundbreaking ceremony of our future New Orleans banking center. This event was attended by various local officials and community leaders. This expansion shows our commitment to providing full-service, Louisiana-based, community banking throughout Louisiana. We expect this banking center to open for business in mid-2024.

    “We recognize that these are uncertain times in the world, and conservative, prudent banking practices are our priority. In Louisiana, various new, significant capital projects have been announced, which should benefit our local economy and provide opportunity for our growth.”

    Liquidity

    As of September 30, 2023, we had sufficient liquid assets available and $1.49 billion from other liquidity sources.

    Cash and cash equivalents were $322.2 million as of September 30, 2023, and averaged $246.2 million for the third quarter of 2023. The liquid assets to assets ratio was 10.51% as of September 30, 2023.

    Our securities portfolio is an alternative source for meeting liquidity needs. The securities portfolio generates cash flow through principal repayments, calls, and maturities, and certain securities can be sold or used as collateral in borrowings that allow for their conversion to cash. Securities AFS can generally be sold, while securities HTM have significant restrictions related to sales. As of September 30, 2023, we project receipt of approximately $45.0 million of principal repayments and maturities through December 31, 2023. As of September 30, 2023, approximately $439.7 million, or 65.1%, of the securities portfolio was available to be sold or used as collateral in borrowings as a liquidity source.

    FHLB advances may also be used to meet the Bank’s liquidity needs. We currently are classified as having “blanket lien collateral status,” which means that advances can be executed at any time without further collateral requirements. As of September 30, 2023, our net borrowing capacity from the FHLB was $910.7 million.

    In addition, in the third quarter the Bank pledged securities to have borrowing access to the Federal Reserve Bank’s Discount Window facility. As of September 30, 2023, our borrowing capacity through this facility was $41.5 million.

    Other sources available for meeting liquidity needs include federal funds lines, repurchase agreements, and other lines of credit. We maintain four federal funds lines of credit with commercial banks, which allow us to borrow up to $95.0 million in federal funds at a rate determined by the applicable commercial bank at the time of borrowing. We also maintain an additional $6.0 million revolving line of credit at one of our correspondent banks. As of September 30, 2023, we had total borrowing capacity of $101.0 million through these combined funding sources.

    The Bank can participate in the Federal Reserve Board’s Bank Term Funding Program (”BTFP”) as an additional liquidity source. If needed, the BTFP gives us the option to use eligible securities as collateral for a loan of up to one year from the Federal Reserve.

    Net Interest Income and Net Interest Margin FTE

    Net interest income and net interest margin FTE for the third quarter of 2023 continued to be impacted by the higher interest rate environment. The Federal Open Market Committee (“FOMC”) increased the federal funds rate 50 basis points (“bp(s)”) in the first quarter, 25 bps in the second quarter, and 25 bps in the third quarter. These increases were in addition to the 425 bp increases in 2022. In the third quarter of 2023, higher deposit costs exceeded improved yields on earning assets.

    Net interest income for the third quarter of 2023 was $20.7 million, which was $785,000, or 3.6%, lower than the second quarter of 2023, due to a $2.6 million increase in interest expense, partially offset by a $1.9 million increase in interest and dividend income. The increase in interest expense was due to higher deposit rates and larger balances in higher cost deposit accounts. The cost of deposits increased 37 bps to 1.40% for the third quarter of 2023 from 1.03% for the prior quarter. The increase in interest and dividend income was primarily due to higher interest income on loans and short-term liquid assets. Loan income increased $1.1 million due to higher rates on new, renewed, and floating rate loans, combined with higher balances in loans HFI. The average rate on new and renewed loans was 7.39% for the third quarter of 2023, compared to 7.09% for the prior quarter. Interest income on short-term liquid assets increased $1.0 million due to an increase in these balances during the third quarter, combined with the higher interest rate environment. Short-term liquid asset balances increased, in part, due to securities cash flows that were redeployed into higher earning short-term liquid assets.

    The net interest margin FTE decreased 18 bps to 2.78% for the third quarter of 2023, compared to 2.96% for the prior quarter. This decrease was driven primarily by higher deposit rates as a result of deposit rate pressures. We continued to experience a change in the deposit mix due to customers moving deposits from lower yielding categories to higher yielding categories. The rate on time deposits increased 70 bps, and the rate on interest-bearing transaction deposits increased 36 bps. The deposit mix shift, combined with the higher rates on these accounts, increased the total cost of deposits by 37 bps. The higher cost of deposits was partially offset by a 32 bp increase in the yield on short-term liquid assets and a 13 bp increase in the yield on loans, which were driven by the higher interest rate environment.

    The FOMC raised the federal funds rate by 25 bps at its July 2023 meeting. The current expectation is that it will keep the rate consistent through December 2023. During the fourth quarter of 2023, we anticipate receiving approximately $45.0 million in cash flows from our securities portfolio that we expect to redeploy into higher yielding assets, which should benefit both net interest income and net interest margin FTE. As of September 30, 2023, floating rate loans were 11.6% of loans HFI, and floating rate transaction deposits were 6.1% of interest-bearing transaction deposits. Depending on balance sheet activity, movement in interest rates, deposit rate pressure, and deposit mix shift, we expect the net interest margin FTE to remain fairly consistent for the fourth quarter of 2023.

    Provision for Credit Losses

    The provision for credit losses for the third quarter of 2023 was $185,000, which was $115,000 lower than the provision for credit losses of $300,000 for the prior quarter. The provision in the third quarter was due to potential economic challenges resulting from the current inflationary environment, changing monetary policy, and consistent loan balances. We will continue to evaluate future provision needs in relation to current economic situations, loan growth, trends in asset quality, forecasted information, and other conditions influencing loss expectations.

    Noninterest Income

    Noninterest income totaled $5.6 million for the third quarter of 2023, a decrease of $426,000, or 7.1%, compared to $6.0 million for the previous quarter. The decrease was mainly due to lower SBIC income, partially offset by higher brokerage income.

    SBIC income for the third quarter of 2023 was $920,000, a decrease of $460,000, or 33.3%, compared to $1.4 million for the prior quarter. In the second quarter, the SBIC sold an investment, which resulted in higher income. We expect this income to be lower in future quarters.

    Brokerage income increased $106,000, or 11.5%, to $1.0 million for the third quarter of 2023, compared to $923,000 for the second quarter of 2023. The higher income in the third quarter was largely due to investing activities of new clients. Assets under management were $978.3 million as of September 30, 2023.

    Operating Expenses

    Operating expenses for the third quarter of 2023 totaled $16.2 million, which was consistent with the previous quarter. Higher occupancy and equipment expenses were offset by small decreases in various other categories.

    Occupancy and equipment expenses totaled $1.7 million for the third quarter of 2023, an increase of $109,000, or 7.0%, from the previous quarter. This increase was primarily due to having a full quarter of expenses for the new operations center building and the expansion of a banking center in the Southwest market, higher facility maintenance expenses, and $25,000 of nonrecurring expenses related to the renovation of the main office building in the third quarter of 2023.

    Asset Overview

    As of September 30, 2023, assets were $3.07 billion, compared to assets of $3.03 billion as of June 30, 2023, an increase of $39.0 million, or 1.3%. In the third quarter, assets were impacted by a $95.7 million, or 3.6%, increase in deposits, partially offset by the payoff of $60.0 million of short-term borrowings from the FHLB. During the third quarter of 2023, liquid assets increased $100.1 million, or 45.1%, to $322.2 million and were 10.51% of assets as of September 30, 2023. Total securities decreased $63.7 million, or 8.6%, to $675.3 million in the third quarter and were 22.02% of assets as of September 30, 2023. As of September 30, 2023, loans HFI were $1.95 billion, consistent with loans HFI as of June 30, 2023. The loans HFI to deposits ratio was 70.60% as of September 30, 2023, compared to 73.10% as of June 30, 2023.

    Securities

    Total securities as of September 30, 2023, were $675.3 million, a decrease of $63.7 million, or 8.6%, from June 30, 2023. Securities decreased primarily due to maturities and principal repayments exceeding purchases, combined with a larger net unrealized loss on securities AFS.

    The estimated fair value of securities AFS totaled $529.0 million, net of $83.3 million of unrealized loss, as of September 30, 2023, compared to $588.5 million, net of $73.0 million of unrealized loss, as of June 30, 2023. As of September 30, 2023, the amortized cost of securities held-to-maturity (“HTM”) totaled $143.4 million compared to $146.6 million as of June 30, 2023. As of September 30, 2023, securities HTM had an unrealized loss of $26.2 million compared to $22.1 million as of June 30, 2023.

    As of September 30, 2023, equity securities, which is an investment in a CRA mutual fund consisting primarily of bonds, totaled $2.8 million compared to $3.9 million as of June 30, 2023. In the third quarter of 2023, we sold $1.0 million of the CRA mutual fund.

    Loans

    Loans HFI as of September 30, 2023, totaled $1.95 billion, which was consistent with June 30, 2023. In the third quarter of 2023, new loan originations were offset by loan payments and paydowns.

    Loans HFI by Category
     September 30, 2023 June 30, 2023
    (dollars in thousands)Amount Percent Amount Percent
    Real estate:       
    Commercial real estate$829,836 42.6% $819,260 42.1%
    One-to-four family residential 579,023 29.7%  565,725 29.1%
    Construction and development 119,647 6.1%  138,450 7.1%
    Commercial and industrial 315,388 16.2%  320,257 16.4%
    SBA PPP, net of deferred income 10 —%  13 —%
    Tax-exempt 74,703 3.9%  75,697 3.9%
    Consumer 29,999 1.5%  28,229 1.4%
    Total loans HFI$1,948,606 100.0% $1,947,631 100.0%
                

    Commercial real estate loans are collateralized by owner occupied and non-owner occupied properties mainly in Louisiana. Investor-owned office properties were $60.7 million, or 3.1% of loans HFI, as of September 30, 2023, and are primarily centered in low-rise suburban areas.

    Health care loans are our largest industry concentration and are made up of a diversified portfolio of health care providers. As of September 30, 2023, total health care loans were 7.5% of loans HFI. Within the health care sector, loans to nursing and residential care facilities were 3.8% of loans HFI, and loans to physician and dental practices were 3.6% of loans HFI. The average health care loan size was $348,000 as of September 30, 2023.

    Asset Quality and Allowance for Credit Losses

    NPAs totaled $2.1 million as of September 30, 2023, an increase of $88,000, or 4.4%, from June 30, 2023, primarily due to an increase in accruing loans 90 days or more past due. The ratio of NPAs to assets was 0.07% as of September 30, 2023, and June 30, 2023.

    Effective January 1, 2023, the Company adopted the CECL methodology for estimating credit losses. In the first quarter of 2023, CECL resulted in a $278,000 increase to the ACL and established a $442,000 reserve for unfunded commitments, yielding a combined 3.5% increase to the December 31, 2022 allowance for loan losses. This one-time cumulative adjustment resulted in a $569,000, net of tax, decrease to stockholders’ equity.

    As of September 30, 2023, the ACL was $21.2 million, and the ratio of ACL to loans HFI was 1.09%. As of June 30, 2023, the ratio of ACL to loans HFI was 1.08%. The net charge-offs to average loans ratio was 0.00% for the third and second quarters of 2023.

    Deposits

    As of September 30, 2023, deposits were $2.76 billion, an increase of $95.7 million, or 3.6%, compared to June 30, 2023. Average deposits for the third quarter of 2023 were $2.71 billion, an increase of $21.8 million, or 0.8%, from the prior quarter. The following tables provide details on our deposit portfolio:

    Deposits by Account Type
     September 30, 2023 June 30, 2023 Change from
    June 30, 2023 to
    September 30, 2023
    (dollars in thousands)Balance % of Total Balance % of Total $ Change % Change
    Noninterest-bearing demand deposits$972,155 35.2% $989,509 37.1% $(17,354) (1.8)%
    Interest-bearing deposits:           
    Interest-bearing demand deposits 145,764 5.3%  94,058 3.5%  51,706  55.0%
    NOW accounts 382,047 13.8%  384,676 14.5%  (2,629) (0.7)%
    Money market accounts 531,740 19.3%  537,890 20.2%  (6,150) (1.1)%
    Savings accounts 178,933 6.5%  179,053 6.7%  (120) (0.1)%
    Time deposits less than or equal to $250,000 380,564 13.8%  328,870 12.4%  51,694  15.7%
    Time deposits greater than $250,000 168,690 6.1%  150,127 5.6%  18,563  12.4%
    Total interest-bearing deposits 1,787,738 64.8%  1,674,674 62.9%  113,064  6.8%
    Total deposits$2,759,893 100.0% $2,664,183 100.0% $95,710  3.6%


    Deposits by Customer Type
     September 30, 2023 June 30, 2023 Change from
    June 30, 2023 to
    September 30, 2023
    (dollars in thousands)Balance % of Total Balance % of Total $ Change % Change
    Consumer$1,310,580 47.5% $1,296,827 48.7% $13,753 1.1%
    Commercial 1,241,213 45.0%  1,196,156 44.9%  45,057 3.8%
    Public 208,100 7.5%  171,200 6.4%  36,900 21.6%
    Total deposits$2,759,893 100.0% $2,664,183 100.0% $95,710 3.6%
                      

    Deposits increased in the third quarter of 2023 mainly as a result of commercial and public entity customers increasing their deposit balances with normal activity. Also, during the third quarter of 2023, there was a deposit mix shift between deposit categories as our consumer customers moved funds from lower yielding categories to higher yielding categories within the Bank.

    The Bank has a granular, diverse deposit portfolio with customers in a variety of industries throughout Louisiana. As of September 30, 2023, the average deposit account size was approximately $28,000.

    In 2022, we implemented the IntraFi Network Insured Cash Sweep (“ICS”) and related reciprocal balance programs for qualified commercial customers. The ICS program provides our customers a demand deposit sweep account that has a competitive interest rate as well as full Federal Deposit Insurance Corporation (“FDIC”) insurance coverage. As of September 30, 2023, we had $134.1 million swept off our balance sheet. The related reciprocal program brings deposit balances back on to our balance sheet as interest-bearing demand deposit accounts. As of September 30, 2023, we had $145.8 million of interest-bearing demand deposit accounts.

    As of September 30, 2023, our estimated uninsured deposits, which are the portion of deposit accounts that exceed the FDIC insurance limit (currently $250,000), were approximately $839.1 million, or 30.4% of total deposits. This amount was estimated based on the same methodologies and assumptions used for regulatory reporting purposes. Also, as of September 30, 2023, our estimated uninsured deposits, excluding collateralized public entity deposits, were approximately $673.8 million, or 24.4% of total deposits. Our cash and cash equivalents of $322.2 million combined with our available borrowing capacity of $1.49 billion equaled 216.3% of our estimated uninsured deposits and 269.4% of our estimated uninsured deposits, excluding collateralized public entity deposits.

    Stockholders’ Equity

    Total stockholders’ equity as of September 30, 2023, was $282.0 million compared to $283.4 million as of June 30, 2023. The $1.4 million, or 0.5%, decrease in stockholders’ equity was attributable to a $7.8 million, net of tax, increase to accumulated other comprehensive loss related to securities, the repurchase of 23,561 shares of common stock for $1.2 million, and $572,000 in cash dividends, partially offset by $8.0 million of net income for the three months ended September 30, 2023, and $79,000 of stock compensation. We paid a quarterly cash dividend of $0.08 per share on September 21, 2023.

    Non-GAAP Disclosure

    Our accounting and reporting policies conform to United States generally accepted accounting principles (“GAAP”) and the prevailing practices in the banking industry. Certain financial measures used by management to evaluate our operating performance are discussed as supplemental non-GAAP performance measures. In accordance with the SEC’s rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the U.S.

    Management and the board of directors review tangible book value per share, tangible common equity to tangible assets, and realized book value per share as part of managing operating performance. However, these non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that are discussed may differ from that of other companies’ reporting measures with similar names. It is important to understand how such other banking organizations calculate and name their financial measures similar to the non-GAAP financial measures discussed by us when comparing such non-GAAP financial measures.

    A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included within the following financial statement tables.

    About Red River Bancshares, Inc.

    Red River Bancshares, Inc. is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999 that provides a fully integrated suite of banking products and services tailored to the needs of commercial and retail customers. Red River Bank operates from a network of 27 banking centers throughout Louisiana and one combined loan and deposit production office in New Orleans, Louisiana. Banking centers are located in the following Louisiana markets: Central, which includes the Alexandria metropolitan statistical area (“MSA”); Northwest, which includes the Shreveport-Bossier City MSA; Capital, which includes the Baton Rouge MSA; Southwest, which includes the Lake Charles MSA; the Northshore, which includes Covington; Acadiana, which includes the Lafayette MSA; and New Orleans.

    Forward-Looking Statements

    Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” The forward-looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause us to make changes to our future plans. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q, and in other documents that we file with the SEC from time to time. In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this news release are qualified in their entirety by this cautionary statement.

    Contact:
    Isabel V. Carriere, CPA, CGMA
    Executive Vice President and Chief Financial Officer
    318-561-4023
    icarriere@redriverbank.net 

    FINANCIAL HIGHLIGHTS (UNAUDITED)
     
      As of and for the
    Three Months Ended    		 As of and for the
    Nine Months Ended
    (Dollars in thousands, except per share data) September 30,
    2023    		 June 30,
    2023    		 September 30,
    2022    		 September 30,
    2023    		 September 30,
    2022
    Net Income $8,021  $8,968  $10,186  $26,587  $26,725 
               
    Per Common Share Data:          
    Earnings per share, basic $1.12  $1.25  $1.42  $3.70  $3.72 
    Earnings per share, diluted $1.12  $1.25  $1.42  $3.70  $3.71 
    Book value per share $39.43  $39.49  $33.88  $39.43  $33.88 
    Tangible book value per share(1) $39.21  $39.28  $33.67  $39.21  $33.67 
    Realized book value per share(1) $50.27  $49.21  $45.54  $50.27  $45.54 
    Cash dividends per share $0.08  $0.08  $0.07  $0.24  $0.21 
    Shares outstanding  7,150,685   7,175,056   7,183,915   7,150,685   7,183,915 
    Weighted average shares outstanding, basic  7,168,413   7,177,621   7,183,915   7,176,219   7,179,984 
    Weighted average shares outstanding, diluted  7,180,084   7,194,634   7,197,100   7,188,371   7,193,958 
               
    Summary Performance Ratios:          
    Return on average assets  1.05%  1.20%  1.30%  1.18%  1.13%
    Return on average equity  11.15%  12.78%  15.48%  12.71%  13.25%
    Net interest margin  2.74%  2.91%  3.00%  2.91%  2.70%
    Net interest margin FTE  2.78%  2.96%  3.06%  2.94%  2.76%
    Efficiency ratio  61.70%  58.63%  53.80%  59.02%  56.52%
    Loans HFI to deposits ratio  70.60%  73.10%  67.22%  70.60%  67.22%
    Noninterest-bearing deposits to deposits ratio  35.22%  37.14%  41.92%  35.22%  41.92%
    Noninterest income to average assets  0.73%  0.81%  0.62%  0.71%  0.60%
    Operating expense to average assets  2.13%  2.16%  1.93%  2.12%  1.84%
               
    Summary Credit Quality Ratios:          
    Nonperforming assets to assets  0.07%  0.07%  0.09%  0.07%  0.09%
    Nonperforming loans to loans HFI  0.10%  0.10%  0.14%  0.10%  0.14%
    Allowance for credit losses to loans HFI  1.09%  1.08%  1.06%  1.09%  1.06%
    Net charge-offs to average loans  0.00%  0.00%  0.00%  0.01%  0.01%
               
    Capital Ratios:          
    Stockholders’ equity to assets  9.20%  9.36%  7.96%  9.20%  7.96%
    Tangible common equity to tangible assets(1)  9.15%  9.31%  7.91%  9.15%  7.91%
    Total risk-based capital to risk-weighted assets  18.35%  18.13%  17.15%  18.35%  17.15%
    Tier 1 risk-based capital to risk-weighted assets  17.31%  17.09%  16.16%  17.31%  16.16%
    Common equity Tier 1 capital to risk-weighted assets  17.31%  17.09%  16.16%  17.31%  16.16%
    Tier 1 risk-based capital to average assets  11.56%  11.48%  10.31%  11.56%  10.31%

    (1)  Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.

     
    RED RIVER BANCSHARES, INC.
    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
     
    (in thousands)September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
    ASSETS         
    Cash and due from banks$42,413  $36,662  $34,491  $37,824  $39,465 
    Interest-bearing deposits in other banks 279,786   185,409   194,727   240,568   261,608 
    Securities available-for-sale, at fair value 529,046   588,478   611,794   614,407   609,748 
    Securities held-to-maturity, at amortized cost 143,420   146,569   149,417   151,683   154,736 
    Equity securities, at fair value 2,833   3,946   4,010   9,979   — 
    Nonmarketable equity securities 2,190   4,330   3,506   3,478   3,460 
    Loans held for sale 2,348   4,586   2,046   518   1,536 
    Loans held for investment 1,948,606   1,947,631   1,921,850   1,916,267   1,879,669 
    Allowance for credit losses (21,183)  (21,085)  (20,854)  (20,628)  (19,953)
    Premises and equipment, net 56,466   55,566   55,065   54,383   52,820 
    Accrued interest receivable 8,778   8,239   8,397   8,830   7,782 
    Bank-owned life insurance 29,332   29,141   28,954   28,775   28,594 
    Intangible assets 1,546   1,546   1,546   1,546   1,546 
    Right-of-use assets 3,757   3,885   4,011   4,137   4,262 
    Other assets 36,815   32,291   31,622   30,919   34,405 
    Total Assets$3,066,153  $3,027,194  $3,030,582  $3,082,686  $3,059,678 
              
    LIABILITIES         
    Noninterest-bearing deposits$972,155  $989,509  $1,060,042  $1,090,539  $1,172,157 
    Interest-bearing deposits 1,787,738   1,674,674   1,671,343   1,708,397   1,624,337 
    Total Deposits 2,759,893   2,664,183   2,731,385   2,798,936   2,796,494 
    Other borrowed funds —   60,000   —   —   — 
    Accrued interest payable 6,800   4,098   2,433   1,563   1,194 
    Lease liabilities 3,892   4,015   4,136   4,258   4,377 
    Accrued expenses and other liabilities 13,617   11,526   15,988   12,176   14,200 
    Total Liabilities 2,784,202   2,743,822   2,753,942   2,816,933   2,816,265 
    COMMITMENTS AND CONTINGENCIES —   —   —   —   — 
    STOCKHOLDERS’ EQUITY         
    Preferred stock, no par value —   —   —   —   — 
    Common stock, no par value 58,031   59,187   59,788   60,050   60,050 
    Additional paid-in capital 2,327   2,248   2,157   2,088   2,014 
    Retained earnings 299,079   291,630   283,236   274,781   265,093 
    Accumulated other comprehensive income (loss) (77,486)  (69,693)  (68,541)  (71,166)  (83,744)
    Total Stockholders’ Equity 281,951   283,372   276,640   265,753   243,413 
    Total Liabilities and Stockholders’ Equity$3,066,153  $3,027,194  $3,030,582  $3,082,686  $3,059,678 
                        


    RED RIVER BANCSHARES, INC.
    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
               
      For the Three Months Ended For the Nine Months Ended
    (in thousands)  September 30,
    2023    		   June 30,
    2023    		   September 30,
    2022    		  September 30,
    2023    		   September 30,
    2022    		 
    INTEREST AND DIVIDEND INCOME                   
    Interest and fees on loans $23,925  $22,851  $19,740 $68,541  $54,543 
    Interest on securities  3,404   3,665   3,572  10,635   10,210 
    Interest on federal funds sold  —   251   317  886   458 
    Interest on deposits in other banks  2,950   1,671   1,238  6,359   2,160 
    Dividends on stock  45   33   19  106   22 
    Total Interest and Dividend Income  30,324   28,471   24,886  86,527   67,393 
    INTEREST EXPENSE          
    Interest on deposits  9,562   6,933   1,798  21,319   4,428 
    Interest on other borrowed funds  37   28   —  64   — 
    Total Interest Expense  9,599   6,961   1,798  21,383   4,428 
    Net Interest Income  20,725   21,510   23,088  65,144   62,965 
    Provision for credit losses  185   300   600  485   1,000 
    Net Interest Income After Provision for Credit Losses  20,540   21,210   22,488  64,659   61,965 
    NONINTEREST INCOME          
    Service charges on deposit accounts  1,489   1,435   1,488  4,317   4,205 
    Debit card income, net  830   924   934  2,687   2,926 
    Mortgage loan income  604   645   624  1,524   2,643 
    Brokerage income  1,029   923   870  2,759   2,536 
    Loan and deposit income  571   517   502  1,566   1,283 
    Bank-owned life insurance income  191   188   181  557   533 
    Gain (Loss) on equity securities  (113)  (64)  —  (145)  (447)
    Gain (Loss) on sale and call of securities  —   —   16  —   (59)
    SBIC income  920   1,380   231  2,479   401 
    Other income (loss)  60   59   21  184   107 
    Total Noninterest Income  5,581   6,007   4,867  15,928   14,128 
    OPERATING EXPENSES          
    Personnel expenses  9,461   9,547   8,853  28,008   25,879 
    Occupancy and equipment expenses  1,663   1,554   1,531  4,933   4,496 
    Technology expenses  675   642   653  2,066   2,118 
    Advertising  331   343   316  955   841 
    Other business development expenses  522   494   436  1,451   1,079 
    Data processing expense  651   638   604  1,689   1,484 
    Other taxes  664   693   650  2,042   1,933 
    Loan and deposit expenses  238   284   164  728   479 
    Legal and professional expenses  616   580   553  1,714   1,446 
    Regulatory assessment expenses  419   397   280  1,223   781 
    Other operating expenses  990   960   1,001  3,041   3,037 
    Total Operating Expenses  16,230   16,132   15,041  47,850   43,573 
    Income Before Income Tax Expense  9,891   11,085   12,314  32,737   32,520 
    Income tax expense  1,870   2,117   2,128  6,150   5,795 
    Net Income $8,021  $8,968  $10,186 $26,587  $26,725 
                        


    RED RIVER BANCSHARES, INC.
    NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
     
     For the Three Months Ended
     September 30, 2023 June 30, 2023
    (dollars in thousands)Average
    Balance
    Outstanding    		 Interest
    Income/Expense    		 Average
    Yield/
    Rate    		 Average
    Balance
    Outstanding    		 Interest
    Income/Expense    		 Average
    Yield/
    Rate
    Assets           
    Interest-earning assets:           
    Loans(1,2)$1,947,794  $23,925 4.81% $1,933,225  $22,851 4.68%
    Securities - taxable 584,319   2,374 1.62%  630,103   2,628 1.67%
    Securities - tax-exempt 201,569   1,030 2.04%  204,208   1,037 2.03%
    Federal funds sold —   — —%  19,780   251 5.02%
    Interest-bearing deposits in other banks 215,920   2,950 5.38%  131,361   1,671 5.04%
    Nonmarketable equity securities 4,213   45 4.23%  3,533   33 3.72%
    Total interest-earning assets 2,953,815  $30,324 4.03%  2,922,210  $28,471 3.86%
    Allowance for credit losses (21,050)      (20,824)    
    Noninterest-earning assets 87,545       89,021     
    Total assets$3,020,310      $2,990,407     
    Liabilities and Stockholders’ Equity           
    Interest-bearing liabilities:           
    Interest-bearing transaction deposits$1,212,226  $5,083 1.66% $1,240,078  $4,013 1.30%
    Time deposits 523,274   4,479 3.40%  433,112   2,920 2.70%
    Total interest-bearing deposits 1,735,500   9,562 2.19%  1,673,190   6,933 1.66%
    Other borrowings 2,609   37 5.49%  1,978   28 5.50%
    Total interest-bearing liabilities 1,738,109  $9,599 2.19%  1,675,168   6,961 1.67%
    Noninterest-bearing liabilities:           
    Noninterest-bearing deposits 973,723       1,014,205     
    Accrued interest and other liabilities 22,992       19,612     
    Total noninterest-bearing liabilities 996,715       1,033,817     
    Stockholders’ equity 285,486       281,422     
    Total liabilities and stockholders’ equity$3,020,310      $2,990,407     
    Net interest income  $20,725     $21,510  
    Net interest spread    1.84%     2.19%
    Net interest margin    2.74%     2.91%
    Net interest margin FTE(3)    2.78%     2.96%
    Cost of deposits    1.40%     1.03%
    Cost of funds    1.29%     0.96%

    (1)  Includes average outstanding balances of loans held for sale of $2.8 million and $3.5 million for the three months ended September 30, 2023 and June 30, 2023, respectively.
    (2)  Nonaccrual loans are included as loans carrying a zero yield.
    (3)  Net interest margin FTE includes an FTE adjustment using a 21.0% federal income tax rate on tax-exempt securities and tax-exempt loans.
     

     
    RED RIVER BANCSHARES, INC.
    NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
     
     For the Nine Months Ended September 30, 
      2023
    		  2022
    (dollars in thousands)Average
    Balance
    Outstanding    		 Interest
    Income/Expense    		 Average
    Yield/
    Rate    		 Average
    Balance
    Outstanding    		 Interest
    Income/Expense    		 Average
    Yield/
    Rate
    Assets           
    Interest-earning assets:           
    Loans(1,2)$1,933,226  $68,541 4.68% $1,786,864  $54,543 4.03%
    Securities - taxable 618,345   7,535 1.63%  635,594   7,029 1.48%
    Securities - tax-exempt 203,748   3,100 2.03%  211,375   3,181 2.01%
    Federal funds sold 24,861   886 4.70%  53,896   458 1.12%
    Interest-bearing deposits in other banks 167,210   6,359 5.05%  385,556   2,160 0.74%
    Nonmarketable equity securities 3,744   106 3.76%  3,451   22 0.86%
    Total interest-earning assets 2,951,134  $86,527 3.88%  3,076,736  $67,393 2.90%
    Allowance for credit losses (20,920)      (19,390)    
    Noninterest-earning assets 88,527       108,124     
    Total assets$3,018,741      $3,165,470     
    Liabilities and Stockholders’ Equity           
    Interest-bearing liabilities:           
    Interest-bearing transaction deposits$1,259,198  $12,126 1.29% $1,383,628  $1,940 0.19%
    Time deposits 441,442   9,193 2.78%  327,477   2,488 1.02%
    Total interest-bearing deposits 1,700,640   21,319 1.68%  1,711,105   4,428 0.35%
    Other borrowings 1,539   64 5.49%  —   — —%
    Total interest-bearing liabilities 1,702,179  $21,383 1.68%  1,711,105  $4,428 0.35%
    Noninterest-bearing liabilities:           
    Noninterest-bearing deposits 1,016,034       1,167,412     
    Accrued interest and other liabilities 20,951       17,244     
    Total noninterest-bearing liabilities 1,036,985       1,184,656     
    Stockholders’ equity 279,577       269,709     
    Total liabilities and stockholders’ equity$3,018,741      $3,165,470     
    Net interest income  $65,144     $62,965  
    Net interest spread    2.20%     2.55%
    Net interest margin    2.91%     2.70%
    Net interest margin FTE(3)    2.94%     2.76%
    Cost of deposits    1.05%     0.21%
    Cost of funds    0.97%     0.19%

    (1)  Includes average outstanding balances of loans held for sale of $2.5 million and $3.6 million for the nine months ended September 30, 2023 and 2022, respectively.
    (2)  Nonaccrual loans are included as loans carrying a zero yield.
    (3)  Net interest margin FTE includes an FTE adjustment using a 21.0% federal income tax rate on tax-exempt securities and tax-exempt loans.
     

     
    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
     
    (dollars in thousands, except per share data)September 30,
    2023    		 June 30,
    2023    		 September 30,
    2022
    Tangible common equity     
    Total stockholders’ equity$281,951  $283,372  $243,413 
    Adjustments:     
    Intangible assets (1,546)  (1,546)  (1,546)
    Total tangible common equity (non-GAAP)$280,405  $281,826  $241,867 
    Realized common equity     
    Total stockholders’ equity$281,951  $283,372  $243,413 
    Adjustments:     
    Accumulated other comprehensive (income) loss 77,486   69,693   83,744 
    Total realized common equity (non-GAAP)$359,437  $353,065  $327,157 
    Common shares outstanding 7,150,685   7,175,056   7,183,915 
    Book value per share$39.43  $39.49  $33.88 
    Tangible book value per share (non-GAAP)$39.21  $39.28  $33.67 
    Realized book value per share (non-GAAP)$50.27  $49.21  $45.54 
          
    Tangible assets     
    Total assets$3,066,153  $3,027,194  $3,059,678 
    Adjustments:     
    Intangible assets (1,546)  (1,546)  (1,546)
    Total tangible assets (non-GAAP)$3,064,607  $3,025,648  $3,058,132 
    Total stockholders’ equity to assets 9.20%  9.36%  7.96%
    Tangible common equity to tangible assets (non-GAAP) 9.15%  9.31%  7.91%

     


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